H. R. 2854
One Hundred Fourth Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Wednesday,
the third day of January, one thousand nine hundred and ninety-six
An Act
To modify the operation of certain agricultural programs.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the ‘‘Federal Agri-
culture Improvement and Reform Act of 1996’’.
(b) TABLE OF CONTENTS.—The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I—AGRICULTURAL MARKET TRANSITION ACT
Subtitle A—Short Title, Purpose, and Definitions
Sec. 101. Short title and purpose.
Sec. 102. Definitions.
Subtitle B—Production Flexibility Contracts
Sec. 111. Authorization for use of production flexibility contracts.
Sec. 112. Elements of contracts.
Sec. 113. Amounts available for contract payments.
Sec. 114. Determination of contract payments under contracts.
Sec. 115. Payment limitations.
Sec. 116. Violations of contract.
Sec. 117. Transfer or change of interest in lands subject to contract.
Sec. 118. Planting flexibility.
Subtitle C—Nonrecourse Marketing Assistance Loans and Loan Deficiency
Payments
Sec. 131. Availability of nonrecourse marketing assistance loans.
Sec. 132. Loan rates for marketing assistance loans.
Sec. 133. Term of loans.
Sec. 134. Repayment of loans.
Sec. 135. Loan deficiency payments.
Sec. 136. Special marketing loan provisions for upland cotton.
Sec. 137. Availability of recourse loans for high moisture feed grains and seed cot-
ton.
Subtitle D—Other Commodities
CHAPTER 1—DAIRY
Sec. 141. Milk price support program.
Sec. 142. Recourse loan program for commercial processors of dairy products.
Sec. 143. Consolidation and reform of Federal milk marketing orders.
Sec. 144. Effect on fluid milk standards in State of California.
Sec. 145. Milk manufacturing marketing adjustment.
Sec. 146. Promotion.
Sec. 147. Northeast Interstate Dairy Compact.
Sec. 148. Dairy export incentive program.
Sec. 149. Authority to assist in establishment and maintenance of one or more ex-
port trading companies.
Sec. 150. Standby authority to indicate entity best suited to provide international
market development and export services.
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Sec. 151. Study and report regarding potential impact of Uruguay Round on prices,
income, and Government purchases.
Sec. 152. Promotion of United States dairy products in international markets
through dairy promotion program.
CHAPTER 2—PEANUTS AND SUGAR
Sec. 155. Peanut program.
Sec. 156. Sugar program.
Subtitle E—Administration
Sec. 161. Administration.
Sec. 162. Adjustments of loans.
Sec. 163. Commodity Credit Corporation interest rate.
Sec. 164. Personal liability of producers for deficiencies.
Sec. 165. Commodity Credit Corporation sales price restrictions.
Subtitle F—Permanent Price Support Authority
Sec. 171. Suspension and repeal of permanent price support authority.
Sec. 172. Effect of amendments.
Subtitle G—Commission on 21st Century Production Agriculture
Sec. 181. Establishment.
Sec. 182. Composition.
Sec. 183. Comprehensive review of past and future of production agriculture.
Sec. 184. Reports.
Sec. 185. Powers.
Sec. 186. Commission procedures.
Sec. 187. Personnel matters.
Sec. 188. Termination of Commission.
Subtitle H—Miscellaneous Commodity Provisions
Sec. 191. Options pilot program.
Sec. 192. Risk management education.
Sec. 193. Crop insurance.
Sec. 194. Establishment of Office of Risk Management.
Sec. 195. Revenue insurance.
Sec. 196. Administration and operation of noninsured crop assistance program.
TITLE II—AGRICULTURAL TRADE
Subtitle A—Amendments to Agricultural Trade Development and Assistance Act of
1954 and Related Statutes
Sec. 201. Food aid to developing countries.
Sec. 202. Trade and development assistance.
Sec. 203. Agreements regarding eligible countries and private entities.
Sec. 204. Terms and conditions of sales.
Sec. 205. Use of local currency payment.
Sec. 206. Value-added foods.
Sec. 207. Eligible organizations.
Sec. 208. Generation and use of foreign currencies.
Sec. 209. General levels of assistance under Public Law 480.
Sec. 210. Food Aid Consultative Group.
Sec. 211. Support of nongovernmental organizations.
Sec. 212. Commodity determinations.
Sec. 213. General provisions.
Sec. 214. Agreements.
Sec. 215. Use of Commodity Credit Corporation.
Sec. 216. Administrative provisions.
Sec. 217. Expiration date.
Sec. 218. Regulations.
Sec. 219. Independent evaluation of programs.
Sec. 220. Authorization of appropriations.
Sec. 221. Coordination of foreign assistance programs.
Sec. 222. Micronutrient fortification pilot program.
Sec. 223. Use of certain local currency.
Sec. 224. Farmer-to-farmer program.
Sec. 225. Food security commodity reserve.
Sec. 226. Protein byproducts derived from alcohol fuel production.
Sec. 227. Food for progress program.
Sec. 228. Use of foreign currency proceeds from export sales financing.
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Sec. 229. Stimulation of foreign production.
Subtitle B—Amendments to Agricultural Trade Act of 1978
Sec. 241. Agricultural export promotion strategy.
Sec. 242. Implementation of commitments under Uruguay Round Agreements.
Sec. 243. Export credits.
Sec. 244. Market access program.
Sec. 245. Export enhancement program.
Sec. 246. Arrival certification.
Sec. 247. Compliance.
Sec. 248. Regulations.
Sec. 249. Trade compensation and assistance programs.
Sec. 250. Foreign Agricultural Service.
Sec. 251. Reports.
Sec. 252. Foreign market development cooperator program.
Subtitle C—Miscellaneous Agricultural Trade Provisions
Sec. 261. Edward R. Madigan United States Agricultural Export Excellence Award.
Sec. 262. Reporting requirements relating to tobacco.
Sec. 263. Triggered export enhancement.
Sec. 264. Disposition of commodities to prevent waste.
Sec. 265. Debt-for-health-and-protection swap.
Sec. 266. Policy on expansion of international markets.
Sec. 267. Policy on maintenance and development of export markets.
Sec. 268. Policy on trade liberalization.
Sec. 269. Agricultural trade negotiations.
Sec. 270. Policy on unfair trade practices.
Sec. 271. Agricultural aid and trade missions.
Sec. 272. Annual reports by agricultural attaches.
Sec. 273. World livestock market price information.
Sec. 274. Orderly liquidation of stocks.
Sec. 275. Sales of extra long staple cotton.
Sec. 276. Regulations.
Sec. 277. Emerging markets.
Sec. 278. Reimbursement for overhead expenses.
Sec. 279. Labeling of domestic and imported lamb and mutton.
Sec. 280. Import assistance for CBI beneficiary countries and the Philippines.
Sec. 281. Studies, reports, and other provisions.
Sec. 282. Sense of Congress concerning multilateral disciplines on credit guaran-
tees.
Sec. 283. International Cotton Advisory Committee.
TITLE III—CONSERVATION
Subtitle A—Definitions
Sec. 301. Definitions applicable to highly erodible cropland conservation.
Subtitle B—Highly Erodible Land Conservation
Sec. 311. Program ineligibility.
Sec. 312. Conservation reserve lands.
Sec. 313. Good faith exemption.
Sec. 314. Expedited procedures for granting variances from conservation plans.
Sec. 315. Development and implementation of conservation plans and conservation
systems.
Sec. 316. Investigation of possible compliance deficiencies.
Sec. 317. Wind erosion estimation pilot project.
Subtitle C—Wetland Conservation
Sec. 321. Program ineligibility.
Sec. 322. Delineation of wetlands; exemptions to program ineligibility.
Sec. 323. Consultation and cooperation requirements.
Sec. 324. Application of program ineligibility to affiliated persons.
Sec. 325. Clarification of definition of agricultural lands in memorandum of agree-
ment.
Sec. 326. Effective date.
Subtitle D—Environmental Conservation Acreage Reserve Program
Sec. 331. Environmental conservation acreage reserve program.
Sec. 332. Conservation reserve program.
Sec. 333. Wetlands reserve program.
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Sec. 334. Environmental quality incentives program.
Sec. 335. Conservation farm option.
Sec. 336. Repeal of superseded authorities.
Subtitle E—Conservation Funding and Administration
Sec. 341. Conservation funding and administration.
Sec. 342. State technical committees.
Sec. 343. Public notice and comment for revisions to certain State technical guides.
Subtitle F—National Natural Resources Conservation Foundation
Sec. 351. Short title.
Sec. 352. Definitions.
Sec. 353. National Natural Resources Conservation Foundation.
Sec. 354. Composition and operation.
Sec. 355. Officers and employees.
Sec. 356. Corporate powers and obligations of the Foundation.
Sec. 357. Administrative services and support.
Sec. 358. Audits and petition of Attorney General for equitable relief.
Sec. 359. Release from liability.
Sec. 360. Authorization of appropriations.
Subtitle G—Forestry
Sec. 371. Office of International Forestry.
Sec. 372. Cooperative work for protection, management, and improvement of Na-
tional Forest System.
Sec. 373. Forestry incentives program.
Sec. 374. Optional State grants for forest legacy program.
Subtitle H—Miscellaneous Conservation Provisions
Sec. 381. Conservation activities of Commodity Credit Corporation.
Sec. 382. Floodplain easements.
Sec. 383. Resource conservation and development program.
Sec. 384. Repeal of report requirement.
Sec. 385. Flood risk reduction.
Sec. 386. Conservation of private grazing land.
Sec. 387. Wildlife habitat incentives program.
Sec. 388. Farmland protection program.
Sec. 389. Interim moratorium on bypass flows.
Sec. 390. Everglades ecosystem restoration.
Sec. 391. Agricultural air quality research oversight.
TITLE IV—NUTRITION ASSISTANCE
Sec. 401. Food stamp program.
Sec. 402. Commodity distribution program; commodity supplemental food program.
Sec. 403. Emergency food assistance program.
Sec. 404. Soup kitchen and food bank program.
Sec. 405. National commodity processing.
TITLE V—AGRICULTURAL PROMOTION
Subtitle A—Commodity Promotion and Evaluation
Sec. 501. Commodity promotion and evaluation.
Subtitle B—Issuance of Orders for Promotion, Research, and Information Activities
Regarding Agricultural Commodities
Sec. 511. Short title.
Sec. 512. Findings and purpose.
Sec. 513. Definitions.
Sec. 514. Issuance of orders.
Sec. 515. Required terms in orders.
Sec. 516. Permissive terms in orders.
Sec. 517. Assessments.
Sec. 518. Referenda.
Sec. 519. Petition and review of orders.
Sec. 520. Enforcement.
Sec. 521. Investigations and power to subpoena.
Sec. 522. Suspension or termination.
Sec. 523. Amendments to orders.
Sec. 524. Effect on other laws.
Sec. 525. Regulations.
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Sec. 526. Authorization of appropriations.
Subtitle C—Canola and Rapeseed
Sec. 531. Short title.
Sec. 532. Findings and declaration of policy.
Sec. 533. Definitions.
Sec. 534. Issuance and amendment of orders.
Sec. 535. Required terms in orders.
Sec. 536. Assessments.
Sec. 537. Referenda.
Sec. 538. Petition and review.
Sec. 539. Enforcement.
Sec. 540. Investigations and power to subpoena.
Sec. 541. Suspension or termination.
Sec. 542. Regulations.
Sec. 543. Authorization of appropriations.
Subtitle D—Kiwifruit
Sec. 551. Short title.
Sec. 552. Findings and purposes.
Sec. 553. Definitions.
Sec. 554. Issuance of orders.
Sec. 555. National Kiwifruit Board.
Sec. 556. Required terms in order.
Sec. 557. Permissive terms in order.
Sec. 558. Petition and review.
Sec. 559. Enforcement.
Sec. 560. Investigations and power to subpoena.
Sec. 561. Referenda.
Sec. 562. Suspension or termination.
Sec. 563. Regulations.
Sec. 564. Authorization of appropriations.
Subtitle E—Popcorn
Sec. 571. Short title.
Sec. 572. Findings and declaration of policy.
Sec. 573. Definitions.
Sec. 574. Issuance of orders.
Sec. 575. Required terms in orders.
Sec. 576. Referenda.
Sec. 577. Petition and review.
Sec. 578. Enforcement.
Sec. 579. Investigations and power to subpoena.
Sec. 580. Relation to other programs.
Sec. 581. Regulations.
Sec. 582. Authorization of appropriations.
Subtitle F—Miscellaneous
Sec. 591. Maintenance of records for honey promotion program.
TITLE VI—CREDIT
Subtitle A—Farm Ownership Loans
Sec. 601. Limitation on direct farm ownership loans.
Sec. 602. Purposes of loans.
Sec. 603. Soil and water conservation and protection.
Sec. 604. Interest rate requirements.
Sec. 605. Insurance of loans.
Sec. 606. Loans guaranteed.
Subtitle B—Operating Loans
Sec. 611. Limitation on direct operating loans.
Sec. 612. Purposes of operating loans.
Sec. 613. Participation in loans.
Sec. 614. Line-of-credit loans.
Sec. 615. Insurance of operating loans.
Sec. 616. Special assistance for beginning farmers and ranchers.
Sec. 617. Limitation on period for which borrowers are eligible for guaranteed as-
sistance.
Subtitle C—Emergency Loans
Sec. 621. Hazard insurance requirement.
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Sec. 622. Narrowing of authority to waive application of the credit elsewhere test.
Sec. 623. Linking of emergency loans for crop or livestock changes to natural disas-
ters.
Sec. 624. Maximum emergency loan indebtedness.
Sec. 625. Establishment of date for emergency loan asset valuation.
Sec. 626. Insurance of emergency loans.
Subtitle D—Administrative Provisions
Sec. 631. Temporary authority to enter into contracts.
Sec. 632. Use of collection agencies.
Sec. 633. Notice of loan service programs.
Sec. 634. Clarification of written statement required of borrowers.
Sec. 635. Annual review of the credit history, business operation, and continued eli-
gibility of a borrower.
Sec. 636. Extension of veterans preference.
Sec. 637. Verification of the credit elsewhere test.
Sec. 638. Sale of property.
Sec. 639. Easements on inventoried property.
Sec. 640. Definitions.
Sec. 641. Authorization for loans.
Sec. 642. Contracts on loan security properties.
Sec. 643. List of certified lenders and inventory property demonstration project.
Sec. 644. Homestead property.
Sec. 645. Restructuring.
Sec. 646. Transfer of inventory land for conservation purposes.
Sec. 647. Implementation of target participation rates.
Sec. 648. Delinquent borrowers.
Sec. 649. Short form certification of farm program borrower compliance.
Sec. 650. Credit study.
Subtitle E—General Provisions
Sec. 661. Conforming amendments.
Sec. 662. Electronic filing of effective financing statements under the clear title pro-
visions of the Food Security Act of 1985.
Sec. 663. Effective date.
TITLE VII—RURAL DEVELOPMENT
Subtitle A—Amendments to the Food, Agriculture, Conservation, and Trade Act of
1990
CHAPTER 1—GENERAL PROVISIONS
Sec. 701. Rural investment partnerships.
Sec. 702. Water and waste facility financing.
Sec. 703. Rural wastewater circuit rider program.
Sec. 704. Telemedicine and distance learning services in rural areas.
Sec. 705. Limitation on authorization of appropriations for rural technology grants.
Sec. 706. Demonstration projects.
Sec. 707. Monitoring the economic progress of rural America.
Sec. 708. Analysis by Office of Technology Assessment.
Sec. 709. Rural health infrastructure improvement.
Sec. 710. Census of agriculture.
Sec. 711. Study of the transportation of fertilizer and agricultural chemicals to
farmers.
CHAPTER 2—ALTERNATIVE AGRICULTURAL RESEARCH AND COMMERCIALIZATION
Sec. 721. Definitions.
Sec. 722. Alternative Agricultural Research and Commercialization Corporation.
Sec. 723. Board of directors, employees, and facilities.
Sec. 724. Research and development grants, contracts, and agreements.
Sec. 725. Commercialization assistance.
Sec. 726. General rules regarding the provision of assistance.
Sec. 727. Regional centers.
Sec. 728. Alternative Agricultural Research and Commercialization Revolving
Fund.
Sec. 729. Procurement preferences for products receiving Corporation assistance.
Sec. 730. Business plan and feasibility study and report.
Subtitle B—Amendments to the Consolidated Farm and Rural Development Act
CHAPTER 1—GENERAL PROVISIONS
Sec. 741. Water and waste facility loans and grants.
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Sec. 742. Emergency community water assistance grant program for small commu-
nities.
Sec. 743. Emergency community water assistance grant program for smallest com-
munities.
Sec. 744. Agricultural Credit Insurance Fund.
Sec. 745. Rural Development Insurance Fund.
Sec. 746. Insured watershed and resource conservation and development loans.
Sec. 747. Rural industrialization assistance.
Sec. 748. Administration.
Sec. 749. Authorization of appropriations.
Sec. 750. Testimony before congressional committees.
Sec. 751. Prohibition on use of loans for certain purposes.
Sec. 752. Rural development certified lenders program.
Sec. 753. System for delivery of certain rural development programs.
Sec. 754. State rural economic development review panel.
Sec. 755. Limited transfer authority of loan amounts.
Sec. 756. Allocation and transfer of loan guarantee authority.
Sec. 757. Water systems for rural and Native villages in Alaska.
Sec. 758. Application requirements relating to water and waste disposal loan and
grant programs.
Sec. 759. National Sheep Industry Improvement Center.
Sec. 759A. Cooperative agreements.
Sec. 759B. Eligibility for grants to broadcasting systems.
CHAPTER 2—RURAL COMMUNITY ADVANCEMENT PROGRAM
Sec. 761. Rural community advancement program.
Sec. 762. Simplified, uniform application for assistance from all Federal rural de-
velopment programs.
Sec. 763. Community facilities grant program.
Subtitle C—Amendments to the Rural Electrification Act of 1936
Sec. 771. Purposes; investigations and reports.
Sec. 772. Authorization of appropriations.
Sec. 773. Loans for electrical plants and transmission lines.
Sec. 774. Loans for electrical and plumbing equipment.
Sec. 775. Testimony on budget requests.
Sec. 776. Transfer of functions of administration created by Executive order.
Sec. 777. Annual report.
Sec. 778. Prohibition on restricting water and waste facility services to electric cus-
tomers.
Sec. 779. Telephone loan terms and conditions.
Sec. 780. Privatization program.
Sec. 781. Rural Business Incubator Fund.
Subtitle D—Miscellaneous Rural Development Provisions
Sec. 791. Interest rate formula.
Sec. 792. Grants for financially stressed farmers, dislocated farmers, and rural
families.
Sec. 793. Fund for Rural America.
Sec. 794. Under Secretary of Agriculture for Rural Economic and Community De-
velopment renamed the Under Secretary of Agriculture for Rural Devel-
opment.
TITLE VIII—RESEARCH, EXTENSION, AND EDUCATION
Subtitle A—Modification and Extension of Activities Under 1977 Act
Sec. 801. Purposes of agricultural research, extension, and education.
Sec. 802. National Agricultural Research, Extension, Education, and Economics Ad-
visory Board.
Sec. 803. Federal Advisory Committee Act exemption for Federal-State cooperative
programs.
Sec. 804. Coordination and planning of agricultural research, extension, and edu-
cation.
Sec. 805. Grants and fellowships for food and agricultural sciences education.
Sec. 806. Grants for research on the production and marketing of alcohols and in-
dustrial hydrocarbons from agricultural commodities and forest prod-
ucts.
Sec. 807. Policy research centers.
Sec. 808. Human nutrition intervention and health promotion research program.
Sec. 809. Food and nutrition education program.
Sec. 810. Purposes and findings relating to animal health and disease research.
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Sec. 811. Animal health and disease continuing research.
Sec. 812. Animal health and disease national or regional research.
Sec. 813. Grant program to upgrade agricultural and food sciences facilities at 1890
land-grant colleges.
Sec. 814. National research and training centennial centers.
Sec. 815. Programs for Hispanic-serving institutions.
Sec. 816. International agricultural research and extension.
Sec. 817. Authorization of appropriations for agricultural research programs.
Sec. 818. Authorization of appropriations for extension education.
Sec. 819. Supplemental and alternative crops research.
Sec. 820. Aquaculture assistance programs.
Sec. 821. Authorization of appropriations for rangeland research.
Subtitle B—Modification and Extension of Activities Under 1990 Act
Sec. 831. Water quality research, education, and coordination.
Sec. 832. National genetics resources program.
Sec. 833. National agricultural weather information system.
Sec. 834. Livestock product safety and inspection program.
Sec. 835. Plant genome mapping program.
Sec. 836. Certain specialized research programs.
Sec. 837. Agricultural telecommunications program.
Sec. 838. National centers for agricultural product quality research.
Sec. 839. Red meat safety research center.
Sec. 840. Indian reservation extension agent program.
Sec. 841. Assistive technology program for farmers with disabilities.
Sec. 842. National rural information center clearinghouse.
Sec. 843. Global climate change.
Subtitle C—Repeal of Certain Activities and Authorities
Sec. 851. Subcommittee on Food, Agricultural, and Forestry Research.
Sec. 852. Joint Council on Food and Agricultural Sciences.
Sec. 853. Agricultural Science and Technology Review Board.
Sec. 854. Animal Health Science Research Advisory Board.
Sec. 855. Resident instruction program at 1890 land-grant colleges.
Sec. 856. Grants to States for international trade development centers.
Sec. 857. Rangeland research.
Sec. 858. Composting research and extension program.
Sec. 859. Education program regarding handling of agricultural chemicals and agri-
cultural chemical containers.
Sec. 860. Program administration regarding sustainable agriculture research and
education.
Sec. 861. Research regarding production, preparation, processing, handling, and
storage of agricultural products.
Sec. 862. Plant and animal pest and disease control program.
Sec. 863. Certain specialized research programs.
Sec. 864. Commission on agricultural research facilities.
Sec. 865. Special grant to study constraints on agricultural trade.
Sec. 866. Pilot project to coordinate food and nutrition education programs.
Sec. 867. Demonstration areas for rural economic development.
Sec. 868. Technical advisory committee regarding global climate change.
Sec. 869. Committee of nine under Hatch Act of 1887.
Sec. 870. Cotton crop reports.
Sec. 871. Rural economic and business development and additional research grants
under title V of Rural Development Act of 1972.
Sec. 872. Human nutrition research.
Sec. 873. Grants to upgrade 1890 land-grant college extension facilities.
Sec. 874. Indian subsistence farming demonstration grant program.
Subtitle D—Miscellaneous Research Provisions
Sec. 881. Critical agricultural materials research.
Sec. 882. Memorandum of agreement regarding 1994 Institutions.
Sec. 883. Smith-Lever Act funding for 1890 land-grant colleges, including Tuskegee
University.
Sec. 884. Agricultural research facilities.
Sec. 885. National competitive research initiative.
Sec. 886. Rural development research and education.
Sec. 887. Dairy goat research program.
Sec. 888. Competitive grants for research to eradicate and control brown citrus
aphid and citrus tristeza virus.
Sec. 889. Stuttgart National Aquaculture Research Center.
Sec. 890. Expansion of authorities related to National Arboretum.
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Sec. 891. Transfer of aquacultural research center.
Sec. 892. Use of remote sensing data and other data to anticipate potential food,
feed, and fiber shortages or excesses and to provide timely information
to assist farmers with planting decisions.
Sec. 893. Sense of Senate regarding methyl bromide alternative research and ex-
tension activities.
Subtitle E—Research Authority After Fiscal Year 1997
Sec. 897. Authorization of appropriations.
Sec. 898. Activities subject to availability of appropriations.
TITLE IX—MISCELLANEOUS
Subtitle A—Commercial Transportation of Equine for Slaughter
Sec. 901. Findings.
Sec. 902. Definitions.
Sec. 903. Regulation of commercial transportation of equine for slaughter.
Sec. 904. Limitation of authority to equine for slaughter.
Sec. 905. Effective date.
Subtitle B—General Provisions
Sec. 911. Interstate quarantine.
Sec. 912. Cotton classification services.
Sec. 913. Plant variety protection for certain tuber propagated plant varieties.
Sec. 914. Swine health protection.
Sec. 915. Designation of Mount Pleasant National Scenic Area.
Sec. 916. Pseudorabies eradication program.
Sec. 917. Collection and use of agricultural quarantine and inspection fees.
Sec. 918. Meat and poultry inspection.
Sec. 919. Reimbursable agreements.
Sec. 920. Overseas tort claims.
Sec. 921. Operation of Graduate School of Department of Agriculture as
nonappropriated fund instrumentality.
Sec. 922. Student internship programs.
Sec. 923. Conveyance of excess Federal personal property.
Sec. 924. Conveyance of land to White Oak Cemetery.
Sec. 925. Sale of land by the University of Arkansas.
Sec. 926. Designation of Dale Bumpers Small Farms Research Center.
Sec. 927. Department of Agriculture Washington Area Strategic Space Plan.
Sec. 928. Severability.
TITLE I—AGRICULTURAL MARKET
TRANSITION ACT
Subtitle A—Short Title, Purpose, and
Definitions
SEC. 101. SHORT TITLE AND PURPOSE.
(a) SHORT TITLE.—This title may be cited as the ‘‘Agricultural
Market Transition Act’’.
(b) PURPOSE.—It is the purpose of this title—
(1) to authorize the use of binding production flexibility
contracts between the United States and agricultural producers
to support farming certainty and flexibility while ensuring
continued compliance with farm conservation and wetland
protection requirements;
(2) to make nonrecourse marketing assistance loans and
loan deficiency payments available for certain crops;
(3) to improve the operation of farm programs for milk,
peanuts, and sugar; and
(4) to establish a commission to undertake a comprehensive
review of past and future production agriculture in the United
States.
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SEC. 102. DEFINITIONS.
In this title:
(1) AGRICULTURAL
ACT
OF
1949.—Except in section 171,
the term ‘‘Agricultural Act of 1949’’ means the Agricultural
Act of 1949 (7 U.S.C. 1421 et seq.), as in effect prior to the
suspensions under section 171(b)(1).
(2) CONSIDERED PLANTED.—The term ‘‘considered planted’’
means acreage that is considered planted under title V of
the Agricultural Act of 1949 (7 U.S.C. 1461 et seq.) and such
other acreage as the Secretary considers fair and equitable.
(3) CONTRACT.—The terms ‘‘contract’’ and ‘‘production flexi-
bility contract’’ mean a production flexibility contract entered
into under section 111.
(4) CONTRACT
ACREAGE.—The term ‘‘contract acreage’’
means 1 or more crop acreage bases established for contract
commodities under title V of the Agricultural Act of 1949 (7
U.S.C. 1461 et seq.) that would have been in effect for the
1996 crop (but for suspension under section 171(b)(1)).
(5) CONTRACT COMMODITY.—The term ‘‘contract commodity’’
means wheat, corn, grain sorghum, barley, oats, upland cotton,
and rice.
(6) CONTRACT
PAYMENT.—The term ‘‘contract payment’’
means a payment made under this subtitle pursuant to a
contract.
(7) DEPARTMENT.—The term ‘‘Department’’ means the
Department of Agriculture.
(8) EXTRA LONG STAPLE COTTON.—The term ‘‘extra long
staple cotton’’ means cotton that—
(A) is produced from pure strain varieties of the
Barbadense species or any hybrid thereof, or other similar
types of extra long staple cotton, designated by the Sec-
retary, having characteristics needed for various end uses
for which United States upland cotton is not suitable and
grown in irrigated cotton-growing regions of the United
States designated by the Secretary or other areas des-
ignated by the Secretary as suitable for the production
of the varieties or types; and
(B) is ginned on a roller-type gin or, if authorized
by the Secretary, ginned on another type gin for experi-
mental purposes.
(9) FARM PROGRAM PAYMENT YIELD.—The term ‘‘farm pro-
gram payment yield’’ means the farm program payment yield
established for the 1995 crop of a contract commodity under
section 505 of the Agricultural Act of 1949 (7 U.S.C. 1465).
The Secretary shall adjust the farm program payment yield
for the 1995 crop of a contract commodity to account for any
additional yield payments made with respect to that crop under
subsection (b)(2) of the section.
(10) LOAN COMMODITY.—The term ‘‘loan commodity’’ means
each contract commodity, extra long staple cotton, and oilseed.
(11) OILSEED.—The term ‘‘oilseed’’ means a crop of soy-
beans, sunflower seed, rapeseed, canola, safflower, flaxseed,
mustard seed, or, if designated by the Secretary, other oilseeds.
(12) PRODUCER.—The term ‘‘producer’’ means an owner,
operator, landlord, tenant, or sharecropper who shares in the
risk of producing a crop and who is entitled to share in the
crop available for marketing from the farm, or would have
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shared had the crop been produced. In determining whether
a grower of hybrid seed is a producer, the Secretary shall
not take into consideration the existence of a hybrid seed con-
tract.
(13) SECRETARY.—The term ‘‘Secretary’’ means the Sec-
retary of Agriculture.
(14) STATE.—The term ‘‘State’’ means each of the several
States of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, and any other territory or
possession of the United States.
(15) UNITED STATES.—The term ‘‘United States’’, when used
in a geographical sense, means all of the States.
Subtitle B—Production Flexibility
Contracts
SEC. 111. AUTHORIZATION FOR USE OF PRODUCTION FLEXIBILITY
CONTRACTS.
(a) OFFER AND TERMS.—The Secretary shall offer to enter into
a production flexibility contract with an eligible owner or producer
described in subsection (b) on a farm containing eligible cropland.
Under the terms of a contract, the owner or producer shall agree,
in exchange for annual contract payments, to—
(1) comply with applicable conservation requirements under
subtitle B of title XII of the Food Security Act of 1985 (16
U.S.C. 3811 et seq.);
(2) comply with applicable wetland protection requirements
under subtitle C of title XII of the Act (16 U.S.C. 3821 et
seq.);
(3) comply with the planting flexibility requirements of
section 118; and
(4) use the land subject to the contract for an agricultural
or related activity, but not for a nonagricultural commercial
or industrial use, as determined by the Secretary.
(b) ELIGIBLE OWNERS AND PRODUCERS DESCRIBED.—The follow-
ing producers and owners shall be eligible to enter into a contract:
(1) An owner of eligible cropland who assumes all or a
part of the risk of producing a crop.
(2) A producer (other than an owner) on eligible cropland
with a share-rent lease of the eligible cropland, regardless
of the length of the lease, if the owner enters into the same
contract.
(3) A producer (other than an owner) on eligible cropland
who cash rents the eligible cropland under a lease expiring
on or after September 30, 2002, in which case the owner is
not required to enter into the contract.
(4) A producer (other than an owner) on eligible cropland
who cash rents the eligible cropland under a lease expiring
before September 30, 2002. The owner of the eligible cropland
may also enter into the same contract. If the producer elects
to enroll less than 100 percent of the eligible cropland in
the contract, the consent of the owner is required.
(5) An owner of eligible cropland who cash rents the eligible
cropland and the lease term expires before September 30, 2002,
if the tenant declines to enter into a contract. In the case
of an owner covered by this paragraph, contract payments
H. R. 2854—12
shall not begin under a contract until the lease held by the
tenant ends.
(6) An owner or producer described in any preceding para-
graph regardless of whether the owner or producer purchased
catastrophic risk protection for a 1996 crop under section 508(b)
of the Federal Crop Insurance Act (7 U.S.C. 1508(b)).
(c) TENANTS AND SHARECROPPERS.—In carrying out this sub-
title, the Secretary shall provide adequate safeguards to protect
the interests of tenants and sharecroppers.
(d) ELIGIBLE CROPLAND DESCRIBED.—Land shall be considered
to be cropland eligible for coverage under a contract only if the
land has contract acreage attributable to the land and—
(1) for at least 1 of the 1991 through 1995 crops, at least
a portion of the land was enrolled in the acreage reduction
program authorized for a crop of a contract commodity under
section 101B, 103B, 105B, or 107B of the Agricultural Act
of 1949 or was considered planted;
(2) was subject to a conservation reserve contract under
section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831)
whose term expired, or was voluntarily terminated, on or after
January 1, 1995; or
(3) is released from coverage under a conservation reserve
contract by the Secretary during the period beginning on Janu-
ary 1, 1995, and ending on the date specified in section
112(a)(2).
(e) QUANTITY OF ELIGIBLE CROPLAND COVERED BY CONTRACT.—
Subject to subsection (b)(4), an owner or producer may enroll as
contract acreage all or a portion of the eligible cropland on the
farm.
(f) VOLUNTARY REDUCTION IN CONTRACT ACREAGE.—Subject to
subsection (b)(4), an owner or producer who enters into a contract
may subsequently reduce the quantity of contract acreage covered
by the contract.
SEC. 112. ELEMENTS OF CONTRACTS.
(a) TIME FOR CONTRACTING.—
(1) COMMENCEMENT.—To the extent practicable, the Sec-
retary shall commence entering into contracts not later than
45 days after the date of enactment of this title.
(2) DEADLINE.—Except as provided in paragraph (3), the
Secretary may not enter into a contract after August 1, 1996.
(3) CONSERVATION RESERVE LANDS.—
(A) IN GENERAL.—At the beginning of each fiscal year,
the Secretary shall allow an eligible owner or producer
on a farm covered by a conservation reserve contract
entered into under section 1231 of the Food Security Act
of 1985 (16 U.S.C. 3831) that terminates after the date
specified in paragraph (2) to enter into or expand a produc-
tion flexibility contract to cover the contract acreage of
the farm that was subject to the former conservation
reserve contract.
(B) AMOUNT.—Contract payments made for contract
acreage under this paragraph shall be made at the rate
and amount applicable to the annual contract payment
level for the applicable crop. For the fiscal year in which
the conservation reserve contract is terminated, the owner
or producer subject to the production flexibility contract
H. R. 2854—13
may elect to receive either contract payments or a prorated
payment under the conservation reserve contract, but not
both.
(b) DURATION OF CONTRACT.—
(1) BEGINNING DATE.—The term of a contract shall begin
with—
(A) the 1996 crop of a contract commodity; or
(B) in the case of acreage that was subject to a con-
servation reserve contract described in subsection (a)(3),
the date the production flexibility contract was entered
into or expanded to cover the acreage.
(2) ENDING DATE.—The term of a contract shall extend
through the 2002 crop, unless earlier terminated by the owner
or producer.
(c) ESTIMATION OF CONTRACT PAYMENTS.—At the time the Sec-
retary enters into a contract, the Secretary shall provide an estimate
of the minimum contract payments anticipated to be made during
at least the first fiscal year for which contract payments will be
made.
(d) TIME FOR PAYMENT.—
(1) IN
GENERAL.—An annual contract payment shall be
made not later than September 30 of each of fiscal years 1996
through 2002.
(2) ADVANCE PAYMENTS.—
(A) FISCAL
YEAR
1996.—At the option of the owner
or producer, 50 percent of the contract payment for fiscal
year 1996 shall be made not later than 30 days after
the date on which the contract is entered into and approved
by the Secretary and the owner or producer.
(B) SUBSEQUENT FISCAL YEARS.—At the option of the
owner or producer for fiscal year 1997 and each subsequent
fiscal year, 50 percent of the annual contract payment
shall be made on December 15 or January 15 of the fiscal
year. The owner or producer may change the date selected
under this subparagraph for a subsequent fiscal year by
providing advance notice to the Secretary.
SEC. 113. AMOUNTS AVAILABLE FOR CONTRACT PAYMENTS.
(a) FISCAL YEAR AMOUNTS.—The Secretary shall, to the maxi-
mum extent practicable, expend the following amounts to satisfy
the obligations of the Secretary under all contracts:
(1) For fiscal year 1996, $5,570,000,000.
(2) For fiscal year 1997, $5,385,000,000.
(3) For fiscal year 1998, $5,800,000,000.
(4) For fiscal year 1999, $5,603,000,000.
(5) For fiscal year 2000, $5,130,000,000.
(6) For fiscal year 2001, $4,130,000,000.
(7) For fiscal year 2002, $4,008,000,000.
(b) ALLOCATION.—The amount made available for a fiscal year
under subsection (a) shall be allocated as follows:
(1) For wheat, 26.26 percent.
(2) For corn, 46.22 percent.
(3) For grain sorghum, 5.11 percent.
(4) For barley, 2.16 percent.
(5) For oats, 0.15 percent.
(6) For upland cotton, 11.63 percent.
(7) For rice, 8.47 percent.
H. R. 2854—15
(1) the payment quantity determined under subsection (a)
for each of the contract commodities covered by the contract;
and
(2) the corresponding payment rate for the contract
commodity in effect under subsection (c).
(e) REDUCTION IN PAYMENT AMOUNT.—The contract payment
determined under subsection (d) for an owner or producer for a
fiscal year shall be immediately reduced by the amount of any
repayment of deficiency payments that is required under section
114(a)(2) of the Agricultural Act of 1949 (7 U.S.C. 1445j(a)(2))
and is not repaid as of the date the contract payment is determined.
The Secretary shall be required to collect the required repayment,
or any claim based on the required repayment, as soon as the
contract payment is determined.
(f) ASSIGNMENT OF CONTRACT PAYMENTS.—The provisions of
section 8(g) of the Soil Conservation and Domestic Allotment Act
(16 U.S.C. 590h(g)) (relating to assignment of payments) shall apply
to contract payments under this section. The owner or producer
making the assignment, or the assignee, shall provide the Secretary
with notice, in such manner as the Secretary may require in the
contract, of any assignment made under this subsection.
(g) SHARING OF CONTRACT PAYMENTS.—The Secretary shall pro-
vide for the sharing of contract payments among the owners and
producers subject to the contract on a fair and equitable basis.
SEC. 115. PAYMENT LIMITATIONS.
(a) APPLICABILITY
OF PAYMENT LIMITATIONS.—Sections 1001
through 1001C of the Food Security Act of 1985 (7 U.S.C. 1308
through 1308–3), as amended by this section, shall be applicable
to contract payments made under this subtitle.
(b) PAYMENT LIMITATIONS.—Section 1001 of the Food Security
Act of 1985 (7 U.S.C. 1308) is amended by striking paragraphs
(1) through (4) and inserting the following:
‘‘(1) LIMITATION ON PAYMENTS UNDER PRODUCTION FLEXIBIL-
ITY CONTRACTS.—The total amount of contract payments made
under the Agricultural Market Transition Act to a person under
1 or more production flexibility contracts during any fiscal
year may not exceed $40,000.
‘‘(2) LIMITATION ON MARKETING LOAN GAINS AND LOAN DEFI-
CIENCY PAYMENTS.—The total amount of the payments specified
in paragraph (3) that a person shall be entitled to receive
under the Agricultural Market Transition Act for 1 or more
contract commodities and oilseeds during any crop year may
not exceed $75,000.
‘‘(3) DESCRIPTION OF PAYMENTS SUBJECT TO LIMITATION.—
The payments referred to in paragraph (2) are the following:
‘‘(A) Any gain realized by a producer from repaying
a marketing assistance loan under section 131 of the Agri-
cultural Market Transition Act for a crop of any loan
commodity at a lower level than the original loan rate
established for the loan commodity under section 132 of
the Act.
‘‘(B) Any loan deficiency payment received for a loan
commodity under section 135 of the Act.
‘‘(4) DEFINITIONS.—In this title, the terms ‘contract
commodity’, ‘contract payment’, ‘loan commodity’, ‘oilseed’, and
‘production flexibility contract’ have the meaning given those
H. R. 2854—16
terms in section 102 of the Agricultural Market Transition
Act.’’.
(c) CONFORMING AMENDMENTS.—
(1) Section 1001A of the Food Security Act of 1985 (7
U.S.C. 1308–1) is amended—
(A) in subsection (a)(1), by striking ‘‘under the Agricul-
tural Act of 1949 (7 U.S.C. 1421 et seq.)’’; and
(B) in subsection (b)(1), by striking ‘‘under the Agricul-
tural Act of 1949’’.
(2) Section 1001C(a) of the Act (7 U.S.C. 1308–3(a)) is
amended—
(A) by striking ‘‘For each of the 1991 through 1997
crops, any’’ and inserting ‘‘Any’’;
(B) by striking ‘‘production adjustment payments, price
support program loans, payments, or benefits made avail-
able under the Agricultural Act of 1949 (7 U.S.C. 1421
et seq.),’’ and inserting ‘‘loans or payments made available
under the Agricultural Market Transition Act,’’; and
(C) by striking ‘‘during the 1989 through 1997 crop
years’’.
SEC. 116. VIOLATIONS OF CONTRACT.
(a) TERMINATION OF CONTRACT FOR VIOLATION.—Except as pro-
vided in subsection (b), if an owner or producer subject to a contract
violates a requirement of the contract specified in section 111(a),
the Secretary shall terminate the contract with respect to the
owner or producer on each farm in which the owner or producer
has an interest. On the termination, the owner or producer shall
forfeit all rights to receive future contract payments on each farm
in which the owner or producer has an interest and shall refund
to the Secretary all contract payments received by the owner or
producer during the period of the violation, together with interest
on the contract payments as determined by the Secretary.
(b) REFUND OR ADJUSTMENT.—If the Secretary determines that
a violation does not warrant termination of the contract under
subsection (a), the Secretary may require the owner or producer
subject to the contract—
(1) to refund to the Secretary that part of the contract
payments received by the owner or producer during the period
of the violation, together with interest on the contract payments
as determined by the Secretary; or
(2) to accept a reduction in the amount of future contract
payments that is proportionate to the severity of the violation,
as determined by the Secretary.
(c) FORECLOSURE.—
(1) EFFECT OF FORECLOSURE.—An owner or producer sub-
ject to a contract may not be required to make repayments
to the Secretary of amounts received under the contract if
the contract acreage has been foreclosed on and the Secretary
determines that forgiving the repayments is appropriate to
provide fair and equitable treatment.
(2) RESUMPTION OF OPERATION.—This subsection shall not
void the responsibilities of the owner or producer under the
contract if the owner or producer continues or resumes oper-
ation, or control, of the contract acreage. On the resumption
of operation or control over the contract acreage by the owner
H. R. 2854—17
or producer, the provisions of the contract in effect on the
date of the foreclosure shall apply.
(d) REVIEW.—A determination of the Secretary under this sec-
tion shall be considered to be an adverse decision for purposes
of the availability of administrative review of the determination.
SEC. 117. TRANSFER OR CHANGE OF INTEREST IN LANDS SUBJECT
TO CONTRACT.
(a) TERMINATION.—Except as provided in subsection (c), a trans-
fer of (or change in) the interest of an owner or producer subject
to a contract in the contract acreage covered by the contract shall
result in the termination of the contract with respect to the acreage,
unless the transferee or owner of the acreage agrees to assume
all obligations under the contract. The termination shall be effective
on the date of the transfer or change.
(b) MODIFICATION.—At the request of the transferee or owner,
the Secretary may modify the contract if the modifications are
consistent with the objectives of this subtitle, as determined by
the Secretary.
(c) EXCEPTION.—If an owner or producer who is entitled to
a contract payment dies, becomes incompetent, or is otherwise
unable to receive the contract payment, the Secretary shall make
the payment, in accordance with regulations prescribed by the
Secretary.
SEC. 118. PLANTING FLEXIBILITY.
(a) PERMITTED CROPS.—Subject to subsection (b), any commod-
ity or crop may be planted on contract acreage on a farm.
(b) LIMITATIONS
AND
EXCEPTIONS
REGARDING
FRUITS
AND
VEGETABLES.—
(1) LIMITATIONS.—The planting of fruits and vegetables
(other than lentils, mung beans, and dry peas) shall be prohib-
ited on contract acreage.
(2) EXCEPTIONS.—Paragraph (1) shall not limit the planting
of a fruit or vegetable—
(A) in any region in which there is a history of double-
cropping of contract commodities with fruits or vegetables,
as determined by the Secretary, in which case the double-
cropping shall be permitted;
(B) on a farm that the Secretary determines has a
history of planting fruits or vegetables on contract acreage,
except that a contract payment shall be reduced by an
acre for each acre planted to the fruit or vegetable; or
(C) by a producer who the Secretary determines has
an established planting history of a specific fruit or vegeta-
ble, except that—
(i) the quantity planted may not exceed the produc-
er’s average annual planting history of the fruit or
vegetable in the 1991 through 1995 crop years (exclud-
ing any crop year in which no plantings were made),
as determined by the Secretary; and
(ii) a contract payment shall be reduced by an
acre for each acre planted to the fruit or vegetable.
H. R. 2854—18
Subtitle C—Nonrecourse Marketing Assist-
ance Loans and Loan Deficiency Pay-
ments
SEC. 131. AVAILABILITY OF NONRECOURSE MARKETING ASSISTANCE
LOANS.
(a) NONRECOURSE LOANS AVAILABLE.—For each of the 1996
through 2002 crops of each loan commodity, the Secretary shall
make available to producers on a farm nonrecourse marketing
assistance loans for loan commodities produced on the farm. The
loans shall be made under terms and conditions that are prescribed
by the Secretary and at the loan rate established under section
132 for the loan commodity.
(b) ELIGIBLE PRODUCTION.—The following production shall be
eligible for a marketing assistance loan under subsection (a):
(1) In the case of a marketing assistance loan for a contract
commodity, any production by a producer on a farm containing
eligible cropland covered by a production flexibility contract.
(2) In the case of a marketing assistance loan for extra
long staple cotton and oilseeds, any production.
(c) COMPLIANCE WITH CONSERVATION AND WETLANDS REQUIRE-
MENTS.—As a condition of the receipt of a marketing assistance
loan under subsection (a), the producer shall comply with applicable
conservation requirements under subtitle B of title XII of the Food
Security Act of 1985 (16 U.S.C. 3811 et seq.) and applicable wetland
protection requirements under subtitle C of title XII of the Act
(16 U.S.C. 3821 et seq.) during the term of the loan.
(d) ADDITIONAL OUTLAYS PROHIBITED.—The Secretary shall
carry out this subtitle in such a manner that there are no additional
outlays under this subtitle as a result of the reconstitution of
a farm that occurs as a result of the combination of another farm
that does not contain eligible cropland covered by a production
flexibility contract.
SEC. 132. LOAN RATES FOR MARKETING ASSISTANCE LOANS.
(a) WHEAT.—
(1) LOAN RATE.—Subject to paragraph (2), the loan rate
for a marketing assistance loan under section 131 for wheat
shall be—
(A) not less than 85 percent of the simple average
price received by producers of wheat, as determined by
the Secretary, during the marketing years for the imme-
diately preceding 5 crops of wheat, excluding the year
in which the average price was the highest and the year
in which the average price was the lowest in the period;
but
(B) not more than $2.58 per bushel.
(2) STOCKS TO USE RATIO ADJUSTMENT.—If the Secretary
estimates for any marketing year that the ratio of ending
stocks of wheat to total use for the marketing year will be—
(A) equal to or greater than 30 percent, the Secretary
may reduce the loan rate for wheat for the corresponding
crop by an amount not to exceed 10 percent in any year;
(B) less than 30 percent but not less than 15 percent,
the Secretary may reduce the loan rate for wheat for the
H. R. 2854—19
corresponding crop by an amount not to exceed 5 percent
in any year; or
(C) less than 15 percent, the Secretary may not reduce
the loan rate for wheat for the corresponding crop.
(b) FEED GRAINS.—
(1) LOAN RATE FOR CORN.—Subject to paragraph (2), the
loan rate for a marketing assistance loan under section 131
for corn shall be—
(A) not less than 85 percent of the simple average
price received by producers of corn, as determined by the
Secretary, during the marketing years for the immediately
preceding 5 crops of corn, excluding the year in which
the average price was the highest and the year in which
the average price was the lowest in the period; but
(B) not more than $1.89 per bushel.
(2) STOCKS TO USE RATIO ADJUSTMENT.—If the Secretary
estimates for any marketing year that the ratio of ending
stocks of corn to total use for the marketing year will be—
(A) equal to or greater than 25 percent, the Secretary
may reduce the loan rate for corn for the corresponding
crop by an amount not to exceed 10 percent in any year;
(B) less than 25 percent but not less than 12.5 percent,
the Secretary may reduce the loan rate for corn for the
corresponding crop by an amount not to exceed 5 percent
in any year; or
(C) less than 12.5 percent, the Secretary may not
reduce the loan rate for corn for the corresponding crop.
(3) OTHER FEED GRAINS.—The loan rate for a marketing
assistance loan under section 131 for grain sorghum, barley,
and oats, respectively, shall be established at such level as
the Secretary determines is fair and reasonable in relation
to the rate that loans are made available for corn, taking
into consideration the feeding value of the commodity in rela-
tion to corn.
(c) UPLAND COTTON.—
(1) LOAN RATE.—Subject to paragraph (2), the loan rate
for a marketing assistance loan under section 131 for upland
cotton shall be established by the Secretary at such loan rate,
per pound, as will reflect for the base quality of upland cotton,
as determined by the Secretary, at average locations in the
United States a rate that is not less than the smaller of—
(A) 85 percent of the average price (weighted by market
and month) of the base quality of cotton as quoted in
the designated United States spot markets during 3 years
of the 5-year period ending July 31 of the year preceding
the year in which the crop is planted, excluding the year
in which the average price was the highest and the year
in which the average price was the lowest in the period;
or
(B) 90 percent of the average, for the 15-week period
beginning July 1 of the year preceding the year in which
the crop is planted, of the 5 lowest-priced growths of the
growths quoted for Middling 13⁄32-inch cotton C.I.F. North-
ern Europe (adjusted downward by the average difference
during the period April 15 through October 15 of the year
preceding the year in which the crop is planted between
the average Northern European price quotation of such
H. R. 2854—21
on the first day of the first month after the month in which
the loan is made.
(b) SPECIAL RULE FOR COTTON.—A marketing assistance loan
for upland cotton or extra long staple cotton shall have a term
of 10 months beginning on the first day of the month in which
the loan is made.
(c) EXTENSIONS PROHIBITED.—The Secretary may not extend
the term of a marketing assistance loan for any loan commodity.
SEC. 134. REPAYMENT OF LOANS.
(a) REPAYMENT RATES FOR WHEAT, FEED GRAINS, AND OIL-
SEEDS.—The Secretary shall permit a producer to repay a marketing
assistance loan under section 131 for wheat, corn, grain sorghum,
barley, oats, and oilseeds at a rate that is the lesser of—
(1) the loan rate established for the commodity under sec-
tion 132, plus interest (as determined by the Secretary); or
(2) a rate that the Secretary determines will—
(A) minimize potential loan forfeitures;
(B) minimize the accumulation of stocks of the commod-
ity by the Federal Government;
(C) minimize the cost incurred by the Federal Govern-
ment in storing the commodity; and
(D) allow the commodity produced in the United States
to be marketed freely and competitively, both domestically
and internationally.
(b) REPAYMENT RATES FOR UPLAND COTTON AND RICE.—The
Secretary shall permit producers to repay a marketing assistance
loan under section 131 for upland cotton and rice at a rate that
is the lesser of—
(1) the loan rate established for the commodity under sec-
tion 132, plus interest (as determined by the Secretary); or
(2) the prevailing world market price for the commodity
(adjusted to United States quality and location), as determined
by the Secretary.
(c) REPAYMENT RATES
FOR EXTRA LONG STAPLE COTTON.—
Repayment of a marketing assistance loan for extra long staple
cotton shall be at the loan rate established for the commodity
under section 132, plus interest (as determined by the Secretary).
(d) PREVAILING WORLD MARKET PRICE.—For purposes of this
section and section 136, the Secretary shall prescribe by regula-
tion—
(1) a formula to determine the prevailing world market
price for each loan commodity, adjusted to United States quality
and location; and
(2) a mechanism by which the Secretary shall announce
periodically the prevailing world market price for each loan
commodity.
(e) ADJUSTMENT
OF PREVAILING WORLD MARKET PRICE
FOR
UPLAND COTTON.—
(1) IN GENERAL.—During the period ending July 31, 2003,
the prevailing world market price for upland cotton (adjusted
to United States quality and location) established under sub-
section (d) shall be further adjusted if—
(A) the adjusted prevailing world market price is less
than 115 percent of the loan rate for upland cotton estab-
lished under section 132, as determined by the Secretary;
and
H. R. 2854—22
(B) the Friday through Thursday average price
quotation for the lowest-priced United States growth as
quoted for Middling (M) 13⁄32-inch cotton delivered C.I.F.
Northern Europe is greater than the Friday through Thurs-
day average price of the 5 lowest-priced growths of upland
cotton, as quoted for Middling (M) 13⁄32-inch cotton, deliv-
ered C.I.F. Northern Europe (referred to in this section
as the ‘‘Northern Europe price’’).
(2) FURTHER ADJUSTMENT.—Except as provided in para-
graph (3), the adjusted prevailing world market price for upland
cotton shall be further adjusted on the basis of some or all
of the following data, as available:
(A) The United States share of world exports.
(B) The current level of cotton export sales and cotton
export shipments.
(C) Other data determined by the Secretary to be rel-
evant in establishing an accurate prevailing world market
price for upland cotton (adjusted to United States quality
and location).
(3) LIMITATION ON FURTHER ADJUSTMENT.—The adjustment
under paragraph (2) may not exceed the difference between—
(A) the Friday through Thursday average price for
the lowest-priced United States growth as quoted for Mid-
dling 13⁄32-inch cotton delivered C.I.F. Northern Europe;
and
(B) the Northern Europe price.
SEC. 135. LOAN DEFICIENCY PAYMENTS.
(a) AVAILABILITY OF LOAN DEFICIENCY PAYMENTS.—Except as
provided in subsection (d), the Secretary may make loan deficiency
payments available to producers who, although eligible to obtain
a marketing assistance loan under section 131 with respect to
a loan commodity, agree to forgo obtaining the loan for the commod-
ity in return for payments under this section.
(b) COMPUTATION.—A loan deficiency payment under this sec-
tion shall be computed by multiplying—
(1) the loan payment rate determined under subsection
(c) for the loan commodity; by
(2) the quantity of the loan commodity that the producers
on a farm are eligible to place under loan but for which the
producers forgo obtaining the loan in return for payments under
this section.
(c) LOAN PAYMENT RATE.—For purposes of this section, the
loan payment rate shall be the amount by which—
(1) the loan rate established under section 132 for the
loan commodity; exceeds
(2) the rate at which a loan for the commodity may be
repaid under section 134.
(d) EXCEPTION FOR EXTRA LONG STAPLE COTTON.—This section
shall not apply with respect to extra long staple cotton.
SEC. 136. SPECIAL MARKETING LOAN PROVISIONS FOR UPLAND COT-
TON.
(a) COTTON USER MARKETING CERTIFICATES.—
(1) ISSUANCE.—Subject to paragraph (4), during the period
ending July 31, 2003, the Secretary shall issue marketing cer-
tificates or cash payments to domestic users and exporters
for documented purchases by domestic users and sales for
H. R. 2854—23
export by exporters made in the week following a consecutive
4-week period in which—
(A) the Friday through Thursday average price
quotation for the lowest-priced United States growth, as
quoted for Middling (M) 13⁄32-inch cotton, delivered C.I.F.
Northern Europe exceeds the Northern Europe price by
more than 1.25 cents per pound; and
(B) the prevailing world market price for upland cotton
(adjusted to United States quality and location) does not
exceed 130 percent of the loan rate for upland cotton estab-
lished under section 132.
(2) VALUE OF CERTIFICATES OR PAYMENTS.—The value of
the marketing certificates or cash payments shall be based
on the amount of the difference (reduced by 1.25 cents per
pound) in the prices during the 4th week of the consecutive
4-week period multiplied by the quantity of upland cotton
included in the documented sales.
(3) ADMINISTRATION OF MARKETING CERTIFICATES.—
(A) REDEMPTION, MARKETING, OR EXCHANGE.—The Sec-
retary shall establish procedures for redeeming marketing
certificates for cash or marketing or exchange of the certifi-
cates for agricultural commodities owned by the Commodity
Credit Corporation in such manner, and at such price
levels, as the Secretary determines will best effectuate
the purposes of cotton user marketing certificates. Any
price restrictions that would otherwise apply to the disposi-
tion of agricultural commodities by the Commodity Credit
Corporation shall not apply to the redemption of certificates
under this subsection.
(B) DESIGNATION OF COMMODITIES AND PRODUCTS.—
To the extent practicable, the Secretary shall permit owners
of certificates to designate the commodities and products,
including storage sites, the owners would prefer to receive
in exchange for certificates. If any certificate is not pre-
sented for redemption, marketing, or exchange within a
reasonable number of days after the issuance of the certifi-
cate (as determined by the Secretary), reasonable costs
of storage and other carrying charges, as determined by
the Secretary, shall be deducted from the value of the
certificate for the period beginning after the reasonable
number of days and ending with the date of the presen-
tation of the certificate to the Commodity Credit Corpora-
tion.
(C) TRANSFERS.—Marketing certificates issued to
domestic users and exporters of upland cotton may be
transferred to other persons in accordance with regulations
issued by the Secretary.
(4) EXCEPTION.—The Secretary shall not issue marketing
certificates or cash payments under paragraph (1) if, for the
immediately preceding consecutive 10-week period, the Friday
through Thursday average price quotation for the lowest priced
United States growth, as quoted for Middling (M) 13⁄32-inch
cotton, delivered C.I.F. Northern Europe, adjusted for the value
of any certificate issued under this subsection, exceeds the
Northern Europe price by more than 1.25 cents per pound.
H. R. 2854—24
(5) LIMITATION
ON
EXPENDITURES.—Total expenditures
under this subsection shall not exceed $701,000,000 during
fiscal years 1996 through 2002.
(b) SPECIAL IMPORT QUOTA.—
(1) ESTABLISHMENT.—The President shall carry out an
import quota program that provides that, during the period
ending July 31, 2003, whenever the Secretary determines and
announces that for any consecutive 10-week period, the Friday
through Thursday average price quotation for the lowest-priced
United States growth, as quoted for Middling (M) 13⁄32-inch
cotton, delivered C.I.F. Northern Europe, adjusted for the value
of any certificates issued under subsection (a), exceeds the
Northern Europe price by more than 1.25 cents per pound,
there shall immediately be in effect a special import quota.
(2) QUANTITY.—The quota shall be equal to 1 week’s
consumption of upland cotton by domestic mills at the season-
ally adjusted average rate of the most recent 3 months for
which data are available.
(3) APPLICATION.—The quota shall apply to upland cotton
purchased not later than 90 days after the date of the Sec-
retary’s announcement under paragraph (1) and entered into
the United States not later than 180 days after the date.
(4) OVERLAP.—A special quota period may be established
that overlaps any existing quota period if required by paragraph
(1), except that a special quota period may not be established
under this subsection if a quota period has been established
under subsection (c).
(5) PREFERENTIAL TARIFF TREATMENT.—The quantity under
a special import quota shall be considered to be an in-quota
quantity for purposes of—
(A) section 213(d) of the Caribbean Basin Economic
Recovery Act (19 U.S.C. 2703(d));
(B) section 204 of the Andean Trade Preference Act
(19 U.S.C. 3203);
(C) section 503(d) of the Trade Act of 1974 (19 U.S.C.
2463(d)); and
(D) General Note 3(a)(iv) to the Harmonized Tariff
Schedule.
(6) DEFINITION.—In this subsection, the term ‘‘special
import quota’’ means a quantity of imports that is not subject
to the over-quota tariff rate of a tariff-rate quota.
(c) LIMITED GLOBAL IMPORT QUOTA FOR UPLAND COTTON.—
(1) IN GENERAL.—The President shall carry out an import
quota program that provides that whenever the Secretary deter-
mines and announces that the average price of the base quality
of upland cotton, as determined by the Secretary, in the des-
ignated spot markets for a month exceeded 130 percent of
the average price of such quality of cotton in the markets
for the preceding 36 months, notwithstanding any other provi-
sion of law, there shall immediately be in effect a limited
global import quota subject to the following conditions:
(A) QUANTITY.—The quantity of the quota shall be
equal to 21 days of domestic mill consumption of upland
cotton at the seasonally adjusted average rate of the most
recent 3 months for which data are available.
(B) QUANTITY IF PRIOR QUOTA.—If a quota has been
established under this subsection during the preceding 12
H. R. 2854—25
months, the quantity of the quota next established under
this subsection shall be the smaller of 21 days of domestic
mill consumption calculated under subparagraph (A) or
the quantity required to increase the supply to 130 percent
of the demand.
(C) PREFERENTIAL TARIFF TREATMENT.—The quantity
under a limited global import quota shall be considered
to be an in-quota quantity for purposes of—
(i) section 213(d) of the Caribbean Basin Economic
Recovery Act (19 U.S.C. 2703(d));
(ii) section 204 of the Andean Trade Preference
Act (19 U.S.C. 3203);
(iii) section 503(d) of the Trade Act of 1974 (19
U.S.C. 2463(d)); and
(iv) General Note 3(a)(iv) to the Harmonized Tariff
Schedule.
(D) DEFINITIONS.—In this subsection:
(i) SUPPLY.—The term ‘‘supply’’ means, using the
latest official data of the Bureau of the Census, the
Department of Agriculture, and the Department of the
Treasury—
(I) the carry-over of upland cotton at the begin-
ning of the marketing year (adjusted to 480-pound
bales) in which the quota is established;
(II) production of the current crop; and
(III) imports to the latest date available during
the marketing year.
(ii) DEMAND.—The term ‘‘demand’’ means—
(I) the average seasonally adjusted annual rate
of domestic mill consumption during the most
recent 3 months for which data are available; and
(II) the larger of—
(aa) average exports of upland cotton dur-
ing the preceding 6 marketing years; or
(bb) cumulative exports of upland cotton
plus outstanding export sales for the market-
ing year in which the quota is established.
(iii) LIMITED
GLOBAL
IMPORT
QUOTA.—The term
‘‘limited global import quota’’ means a quantity of
imports that is not subject to the over-quota tariff
rate of a tariff-rate quota.
(E) QUOTA
ENTRY
PERIOD.—When a quota is estab-
lished under this subsection, cotton may be entered under
the quota during the 90-day period beginning on the date
the quota is established by the Secretary.
(2) NO OVERLAP.—Notwithstanding paragraph (1), a quota
period may not be established that overlaps an existing quota
period or a special quota period established under subsection
(b).
SEC. 137. AVAILABILITY OF RECOURSE LOANS FOR HIGH MOISTURE
FEED GRAINS AND SEED COTTON.
(a) HIGH MOISTURE FEED GRAINS.—
(1) RECOURSE
LOANS
AVAILABLE.—For each of the 1996
through 2002 crops of corn and grain sorghum, the Secretary
shall make available recourse loans, as determined by the
H. R. 2854—26
Secretary, to producers on a farm containing eligible cropland
covered by a production flexibility contract who—
(A) normally harvest all or a portion of their crop
of corn or grain sorghum in a high moisture state;
(B) present—
(i) certified scale tickets from an inspected, cer-
tified commercial scale, including a licensed warehouse,
feedlot, feed mill, distillery, or other similar entity
approved by the Secretary, pursuant to regulations
issued by the Secretary; or
(ii) field or other physical measurements of the
standing or stored crop in regions of the United States,
as determined by the Secretary, that do not have cer-
tified commercial scales from which certified scale tick-
ets may be obtained within reasonable proximity of
harvest operation;
(C) certify that they were the owners of the feed grain
at the time of delivery to, and that the quantity to be
placed under loan under this subsection was in fact har-
vested on the farm and delivered to, a feedlot, feed mill,
or commercial or on-farm high-moisture storage facility,
or to a facility maintained by the users of corn and grain
sorghum in a high moisture state; and
(D) comply with deadlines established by the Secretary
for harvesting the corn or grain sorghum and submit
applications for loans under this subsection within dead-
lines established by the Secretary.
(2) ELIGIBILITY OF ACQUIRED FEED GRAINS.—A loan under
this subsection shall be made on a quantity of corn or grain
sorghum of the same crop acquired by the producer equivalent
to a quantity determined by multiplying—
(A) the acreage of the corn or grain sorghum in a
high moisture state harvested on the producer’s farm; by
(B) the lower of the farm program payment yield or
the actual yield on a field, as determined by the Secretary,
that is similar to the field from which the corn or grain
sorghum was obtained.
(3) HIGH
MOISTURE
STATE
DEFINED.—In this subsection,
the term ‘‘high moisture state’’ means corn or grain sorghum
having a moisture content in excess of Commodity Credit Cor-
poration standards for marketing assistance loans made by
the Secretary under section 131.
(b) RECOURSE LOANS AVAILABLE FOR SEED COTTON.—
(1) UPLAND COTTON.—For each of the 1996 through 2002
crops of upland cotton, the Secretary shall make available
recourse seed cotton loans, as determined by the Secretary,
to producers on a farm containing eligible cropland covered
by a production flexibility contract.
(2) EXTRA LONG STAPLE COTTON.—For each of the 1996
through 2002 crops of extra long staple cotton, the Secretary
shall make available recourse seed cotton loans, as determined
by the Secretary, on any production.
(c) REPAYMENT RATES.—Repayment of a recourse loan made
under this section shall be at the loan rate established for the
commodity by the Secretary, plus interest (as determined by the
Secretary).
H. R. 2854—27
Subtitle D—Other Commodities
CHAPTER 1—DAIRY
SEC. 141. MILK PRICE SUPPORT PROGRAM.
(a) SUPPORT ACTIVITIES.—The Secretary of Agriculture shall
support the price of milk produced in the 48 contiguous States
through the purchase of cheese, butter, and nonfat dry milk pro-
duced from the milk.
(b) RATE.—The price of milk shall be supported at the following
rates per hundredweight for milk containing 3.67 percent butterfat:
(1) During calendar year 1996, $10.35.
(2) During calendar year 1997, $10.20.
(3) During calendar year 1998, $10.05.
(4) During calendar year 1999, $9.90.
(c) PURCHASE PRICES.—The support purchase prices under this
section for each of the products of milk (butter, cheese, and nonfat
dry milk) announced by the Secretary shall be the same for all
of that product sold by persons offering to sell the product to
the Secretary. The purchase prices shall be sufficient to enable
plants of average efficiency to pay producers, on average, a price
that is not less than the rate of price support for milk in effect
under subsection (b).
(d) SPECIAL RULE FOR BUTTER AND NONFAT DRY MILK PUR-
CHASE PRICES.—
(1) ALLOCATION OF PURCHASE PRICES.—The Secretary may
allocate the rate of price support between the purchase prices
for nonfat dry milk and butter in a manner that will result
in the lowest level of expenditures by the Commodity Credit
Corporation or achieve such other objectives as the Secretary
considers appropriate. Not later than 10 days after making
or changing an allocation, the Secretary shall notify the
Committee on Agriculture of the House of Representatives and
the Committee on Agriculture, Nutrition, and Forestry of the
Senate of the allocation. Section 553 of title 5, United States
Code, shall not apply with respect to the implementation of
this section.
(2) TIMING OF PURCHASE PRICE ADJUSTMENTS.—The Sec-
retary may make any such adjustments in the purchase prices
for nonfat dry milk and butter the Secretary considers to be
necessary not more than twice in each calendar year.
(e) REFUNDS OF 1995 AND 1996 ASSESSMENTS.—
(1) REFUND
REQUIRED.—The Secretary shall provide for
a refund of the entire reduction required under section 204(h)(2)
of the Agricultural Act of 1949 (7 U.S.C. 1446e(h)(2)), as in
effect on the day before the amendment made by subsection
(g), in the price of milk received by a producer during calendar
year 1995 or 1996, if the producer provides evidence that the
producer did not increase marketings in calendar year 1995
or 1996 when compared to calendar year 1994 or 1995, respec-
tively.
(2) EXCEPTION.—This subsection shall not apply with
respect to a producer for a particular calendar year if the
producer has already received a refund under section 204(h)
of the Agricultural Act of 1949 for the same fiscal year before
the effective date of this section.
H. R. 2854—28
(3) TREATMENT
OF
REFUND.—A refund under this sub-
section shall not be considered as any type of price support
or payment for purposes of sections 1211 and 1221 of the
Food Security Act of 1985 (16 U.S.C. 3811 and 3821).
(f) COMMODITY CREDIT CORPORATION.—The Secretary shall
carry out the program authorized by this section through the
Commodity Credit Corporation.
(g) CONFORMING REPEAL.—Effective on the first day of the
first month beginning after the date of enactment of this title,
section 204 of the Agricultural Act of 1949 (7 U.S.C. 1446e) is
repealed.
(h) PERIOD OF EFFECTIVENESS.—This section (other than sub-
section (g)) shall be effective only during the period beginning
on the first day of the first month beginning after the date of
enactment of this title and ending on December 31, 1999. The
program authorized by this section shall terminate on December
31, 1999, and shall be considered to have expired notwithstanding
section 257 of the Balanced Budget and Emergency Deficit Control
Act of 1985 (2 U.S.C. 907).
SEC. 142. RECOURSE LOAN PROGRAM FOR COMMERCIAL PROCESSORS
OF DAIRY PRODUCTS.
(a) RECOURSE LOANS AVAILABLE.—Under such reasonable terms
and conditions as the Secretary may prescribe, the Secretary shall
make recourse loans available to commercial processors of eligible
dairy products to assist the processors to manage inventories of
eligible dairy products and assure a greater degree of price stability
for the dairy industry during the year. The Secretary shall use
the funds, facilities, and authorities of the Commodity Credit Cor-
poration to carry out this section.
(b) AMOUNT
OF LOAN.—The Secretary shall establish the
amount of a loan for eligible dairy products, which shall reflect
a milk equivalent value of $9.90 per hundredweight of milk contain-
ing 3.67 percent butterfat. The rate of interest charged participants
under this section shall not be less than the rate of interest charged
the Commodity Credit Corporation by the United States Treasury.
(c) PERIOD OF LOAN.—The original term of a recourse loan
made under this section may not extend beyond the end of the
fiscal year in which the loan is made. At the end of the fiscal
year, the Secretary may extend the loan for an additional period
not to exceed the end of the next fiscal year.
(d) DEFINITION OF ELIGIBLE DAIRY PRODUCTS.—In this section,
the term ‘‘eligible dairy products’’ means cheddar cheese, butter,
and nonfat dry milk.
(e) EFFECTIVE DATE.—This section shall be effective beginning
January 1, 2000.
SEC. 143. CONSOLIDATION AND REFORM OF FEDERAL MILK MARKET-
ING ORDERS.
(a) AMENDMENT OF ORDERS.—
(1) REQUIRED CONSOLIDATION.—The Secretary shall amend
Federal milk marketing orders issued under section 8c of the
Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with
amendments by the Agricultural Marketing Agreement Act of
1937, to limit the number of Federal milk marketing orders
to not less than 10 and not more than 14 orders.
(2) INCLUSION OF CALIFORNIA AS SEPARATE ORDER.—Upon
the petition and approval of California dairy producers in the
H. R. 2854—29
manner provided in section 8c of the Agricultural Adjustment
Act (7 U.S.C. 608c), reenacted with amendments by the Agricul-
tural Marketing Agreement Act of 1937, the Secretary shall
designate the State of California as a separate Federal milk
marketing order. The order covering California shall have the
right to reblend and distribute order receipts to recognize quota
value.
(3) RELATED ISSUES ADDRESSED IN CONSOLIDATION.—Among
the issues the Secretary is authorized to implement as part
of the consolidation of Federal milk marketing orders are the
following:
(A) The use of utilization rates and multiple basing
points for the pricing of fluid milk.
(B) The use of uniform multiple component pricing
when developing 1 or more basic formula prices for manu-
facturing milk.
(4) EFFECT OF EXISTING LAW.—In implementing the consoli-
dation of Federal milk marketing orders and related reforms
under this subsection, the Secretary may not consider, or base
any decision on, the table contained in section 8c(5)(A) of the
Agricultural Adjustment Act (7 U.S.C. 608c(5)(A)), reenacted
with amendments by the Agricultural Marketing Agreement
Act of 1937, as added by section 131 of the Food Security
Act of 1985.
(b) EXPEDITED PROCESS.—
(1) USE
OF
INFORMAL
RULEMAKING.—To implement the
consolidation of Federal milk marketing orders and related
reforms under subsection (a), the Secretary shall use the notice
and comment procedures provided in section 553 of title 5,
United States Code.
(2) TIME LIMITATIONS.—
(A) PROPOSED
AMENDMENTS.—The Secretary shall
announce the proposed amendments to be made under
subsection (a) not later than 2 years after the date of
enactment of this title.
(B) FINAL AMENDMENTS.—The Secretary shall imple-
ment the amendments not later than 3 years after the
date of enactment of this title.
(3) EFFECT OF COURT ORDER.—The actions authorized by
this subsection are intended to ensure the timely publication
and implementation of new and amended Federal milk market-
ing orders. In the event that the Secretary is enjoined or
otherwise restrained by a court order from publishing or
implementing the consolidation and related reforms under sub-
section (a), the length of time for which that injunction or
other restraining order is effective shall be added to the time
limitations specified in paragraph (2) thereby extending those
time limitations by a period of time equal to the period of
time for which the injunction or other restraining order is
effective.
(c) FAILURE TO TIMELY CONSOLIDATE ORDERS.—If the Secretary
fails to implement the consolidation required under subsection (a)(1)
within the time period required under subsection (b)(2)(B) (plus
any additional period provided under subsection (b)(3)), the Sec-
retary may not assess or collect assessments from milk producers
or handlers under such section 8c for marketing order administra-
tion and services provided under such section after the end of
H. R. 2854—30
that period until the consolidation is completed. The Secretary
may not reduce the level of services provided under the section
on account of the prohibition against assessments, but shall rather
cover the cost of marketing order administration and services
through funds available for the Agricultural Marketing Service
of the Department.
(d) REPORT REGARDING FURTHER REFORMS.—
(1) REPORT REQUIRED.—Not later than April 1, 1997, the
Secretary shall submit to Congress a report—
(A) reviewing the Federal milk marketing order system
established pursuant to section 8c of the Agricultural
Adjustment Act (7 U.S.C. 608c), reenacted with amend-
ments by the Agricultural Marketing Agreement Act of
1937, in light of the reforms required by subsection (a);
(B) describing the efforts underway and the progress
made in implementing the reforms required by subsection
(a); and
(C) containing such recommendations as the Secretary
considers appropriate for further improvements and
reforms to the Federal milk marketing order system.
(2) EFFECT OF OTHER LAWS.—Any limitation imposed by
Act of Congress on the conduct or completion of reports to
Congress shall not apply to the report required under this
section, unless the limitation specifically refers to this section.
SEC. 144. EFFECT ON FLUID MILK STANDARDS IN STATE OF CALIFOR-
NIA.
Nothing in this Act or any other provision of law shall be
construed to preempt, prohibit, or otherwise limit the authority
of the State of California, directly or indirectly, to establish or
continue to effect any law, regulation, or requirement regarding—
(1) the percentage of milk solids or solids not fat in fluid
milk products sold at retail or marketed in the State of Califor-
nia; or
(2) the labeling of such fluid milk products with regard
to milk solids or solids not fat.
SEC. 145. MILK MANUFACTURING MARKETING ADJUSTMENT.
(a) MAXIMUM ALLOWANCES ESTABLISHED.—No State shall pro-
vide for a manufacturing allowance for the processing of milk in
excess of—
(1) $1.65 per hundredweight of milk for milk manufactured
into butter and nonfat dry milk; and
(2) $1.80 per hundredweight of milk for milk manufactured
into cheese.
(b) MANUFACTURING ALLOWANCE DEFINED.—In this section, the
term ‘‘manufacturing allowance’’ means—
(1) the amount by which the product price value of butter
and nonfat dry milk manufactured from a hundred pounds
of milk containing 3.5 pounds of butterfat and 8.7 pounds
of milk solids not fat resulting from a State’s yield and product
price formulas exceeds the class price for the milk used to
produce those products; or
(2) the amount by which the product price value of cheese
manufactured from a hundred pounds of milk containing 3.5
pounds of butterfat and 8.7 pounds of milk solids not fat result-
ing from a State’s yield and product price formulas exceeds
the class price for the milk used to produce cheese.
H. R. 2854—31
(c) EFFECT OF VIOLATION.—If the Secretary determines follow-
ing a hearing that a State has in effect a manufacturing allowance
that exceeds the manufacturing allowance authorized in subsection
(a), the Secretary shall suspend purchases of cheddar cheese, butter,
and nonfat dry milk produced in that State until such time as
the State complies with such subsection.
(d) EFFECTIVE DATE; IMPLEMENTATION.—This section (other
than subsection (e)) shall be effective during the period beginning
on the first day of the first month beginning after the date of
enactment of this title and ending on December 31, 1999. During
that period, the Secretary may exercise the authority provided
to the Secretary under this section without regard to the issuance
of regulations intended to carry out this section.
(e) CONFORMING REPEAL.—Effective on the first day of the
first month beginning after the date of enactment of this title,
section 102 of the Food, Agriculture, Conservation, and Trade Act
of 1990 (7 U.S.C. 1446e–1) is repealed.
SEC. 146. PROMOTION.
(a) CONGRESSIONAL PURPOSE.—Section 1999B(a) of the Fluid
Milk Promotion Act of 1990 (7 U.S.C. 6401(a)) is amended—
(1) by redesignating paragraphs (6), (7) and (8) as para-
graphs (7), (8) and (9), respectively; and
(2) by inserting after paragraph (5) the following:
‘‘(6) the congressional purpose underlying this subtitle is
to maintain and expand markets for fluid milk products, not
to maintain or expand any processor’s share of those markets
and that the subtitle does not prohibit or restrict individual
advertising or promotion of fluid milk products since the pro-
grams created and funded by this subtitle are not extended
to replace individual advertising and promotion efforts;’’.
(b) CONGRESSIONAL POLICY.—Section 1999B(b) of the Fluid Milk
Promotion Act of 1990 (7 U.S.C. 6401(b)) is amended to read as
follows:
‘‘(b) POLICY.—It is declared to be the policy of Congress that
it is in the public interest to authorize the establishment, through
the exercise of powers provided in this subtitle, of an orderly proce-
dure for developing, financing, through adequate assessments on
fluid milk products produced in the United States and carrying
out an effective, continuous, and coordinated program of promotion,
research, and consumer information designed to strengthen the
position of the dairy industry in the marketplace and maintain
and expand domestic and foreign markets and uses for fluid milk
products, the purpose of which is not to compete with or replace
individual advertising or promotion efforts designed to promote
individual brand name or trade name fluid milk products, but
rather to maintain and expand the markets for all fluid milk
products, with the goal and purpose of this subtitle being a national
governmental goal that authorizes and funds programs that result
in government speech promoting government objectives.’’.
(c) RESEARCH.—Section 1999C(6) of the Fluid Milk Promotion
Act of 1990 (7 U.S.C. 6402(6)) is amended to read as follows:
‘‘(6) RESEARCH.—The term ‘research’ means market
research to support advertising and promotion efforts, including
educational activities, research directed to product characteris-
tics, product development, including new products or improved
H. R. 2854—32
technology in production, manufacturing or processing of milk
and the products of milk.’’.
(d) VOTING.—
(1) INITIAL REFERENDA.—Section 1999N(b)(2) of the Fluid
Milk Promotion Act of 1990 (7 U.S.C. 6413(b)(2)) is amended
by striking ‘‘all processors’’ and inserting ‘‘fluid milk processors
voting in the referendum’’.
(2) SUSPENSION OR TERMINATION.—Section 1999O(c) of such
Act (7 U.S.C. 6414(c)) is amended—
(A) in paragraph (1), by striking ‘‘all processors’’ and
inserting ‘‘fluid milk processors voting in the preceding
referendum’’; and
(B) in paragraph (2)(B), by striking ‘‘all processors’’
and inserting ‘‘fluid milk processors voting in the referen-
dum’’.
(e) DURATION.—Section 1999O(a) of the Fluid Milk Promotion
Act of 1990 (7 U.S.C. 6414(a)) is amended by striking ‘‘1996’’ and
inserting ‘‘2002’’.
SEC. 147. NORTHEAST INTERSTATE DAIRY COMPACT.
Congress hereby consents to the Northeast Interstate Dairy
Compact entered into among the States of Connecticut, Maine,
Massachusetts, New Hampshire, Rhode Island and Vermont as
specified in section 1(b) Senate Joint Resolution 28 of the 104th
Congress, as placed on the calendar of the Senate, subject to the
following conditions:
(1) FINDING OF COMPELLING PUBLIC INTEREST.—Based upon
a finding by the Secretary of a compelling public interest in
the Compact region, the Secretary may grant the States that
have ratified the Northeast Interstate Dairy Compact, as of
the date of enactment of this title, the authority to implement
the Northeast Interstate Dairy Compact.
(2) LIMITATION ON MANUFACTURING PRICE.—The Northeast
Interstate Dairy Compact Commission shall not regulate Class
II, Class III, or Class III-A milk used for manufacturing pur-
poses or any other milk, other than Class I (fluid) milk, as
defined by a Federal milk marketing order issued under section
8c of the Agricultural Adjustment Act (7 U.S.C. 608c) reenacted
with amendments by the Agricultural Marketing Agreement
Act of 1937.
(3) DURATION.—Consent for the Northeast Interstate Dairy
Compact shall terminate concurrent with the Secretary’s
implementation of the dairy pricing and Federal milk marketing
order consolidation and reforms under section 143.
(4) ADDITIONAL STATES.—Delaware, New Jersey, New York,
Pennsylvania, Maryland, and Virginia are the only additional
States that may join the Northeast Interstate Dairy Compact,
individually or otherwise, if upon entry the State is contiguous
to a participating State and if Congress consents to the entry
of the State into the Compact after the date of enactment
of this title.
(5) COMPENSATION OF COMMODITY CREDIT CORPORATION.—
Before the end of each fiscal year that a Compact price regula-
tion is in effect, the Northeast Interstate Dairy Compact
Commission shall compensate the Commodity Credit Corpora-
tion for the cost of any purchases of milk and milk products
by the Corporation that result from the projected rate of
H. R. 2854—33
increase in milk production for the fiscal year within the Com-
pact region in excess of the projected national average rate
of the increase in milk production, as determined by the Sec-
retary.
(6) MILK
MARKETING
ORDER
ADMINISTRATOR.—At the
request of the Northeast Interstate Dairy Compact Commission,
the Administrator of the applicable Federal milk marketing
order issued under section 8(c)5 of the Agricultural Adjustment
Act (7 U.S.C. 608c), reenacted with amendments by the Agricul-
tural Marketing Agreement Act of 1937, shall provide technical
assistance to the Compact Commission and be compensated
for that assistance.
(7) FURTHER CONDITIONS.—The Northeast Interstate Dairy
Compact Commission shall not prohibit or in any way limit
the marketing in the Compact region of any milk or milk
product produced in any other production area in the United
States. The Compact Commission shall respect and abide by
the ongoing procedures between Federal milk marketing orders
with respect to the sharing of proceeds from sales within the
Compact region of bulk milk, packaged milk, or producer milk
originating from outside of the Compact region. The Compact
Commission shall not use compensatory payments under sec-
tion 10(6) of the Compact as a barrier to the entry of milk
into the Compact region or for any other purpose. Establish-
ment of a Compact over-order price, in itself, shall not be
considered a compensatory payment or a limitation or prohibi-
tion on the marketing of milk.
SEC. 148. DAIRY EXPORT INCENTIVE PROGRAM.
(a) DURATION.—Section 153(a) of the Food Security Act of 1985
(15 U.S.C. 713a–14(a)) is amended by striking ‘‘2001’’ and inserting
‘‘2002’’.
(b) SOLE DISCRETION.—Section 153(b) of the Food Security Act
of 1985 (15 U.S.C. 713a–14(b)) is amended by inserting ‘‘sole’’ before
‘‘discretion’’.
(c) ELEMENTS OF PROGRAM.—Section 153(c) of the Food Security
Act of 1985 (15 U.S.C. 713a–14(c)) is amended—
(1) by striking ‘‘and’’ at the end of paragraph (1);
(2) by striking the period at the end of paragraph (2)
and inserting a semicolon; and
(3) by adding at the end the following:
‘‘(3) the maximum volume of dairy product exports allow-
able consistent with the obligations of the United States as
a member of the World Trade Organization is exported under
the program each year (minus the volume sold under section
1163 of the Food Security Act of 1985 (Public Law 99–198;
7 U.S.C. 1731 note) during that year), except to the 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 subsection (f); and
‘‘(4) payments may be made under the program for exports
to any destination in the world for the purpose of market
development, except a destination in a country with respect
to which shipments from the United States are otherwise
restricted by law.’’.
(d) MARKET DEVELOPMENT.—Section 153(e)(1) of the Food Secu-
rity Act of 1985 (15 U.S.C. 713a–14(e)(1)) is amended—
H. R. 2854—34
(1) by striking ‘‘and’’ and inserting ‘‘the’’; and
(2) by inserting before the period the following: ‘‘, and
any additional amount that may be required to assist in the
development of world markets for United States dairy prod-
ucts’’.
(e) MAXIMUM ALLOWABLE AMOUNTS.—Section 153 of the Food
Security Act of 1985 (15 U.S.C. 713a–14) is amended by adding
at the end the following:
‘‘(f) REQUIRED FUNDING.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
the Commodity Credit Corporation shall in each year use money
and commodities for the program under this section in the
maximum amount consistent with the obligations of the United
States as a member of the World Trade Organization, minus
the amount expended under section 1163 of the Food Security
Act of 1985 (Public Law 99–198; 7 U.S.C. 1731 note) during
that year.
‘‘(2) VOLUME
LIMITATIONS.—The Commodity Credit Cor-
poration may not exceed the limitations specified in subsection
(c)(3) on the volume of allowable dairy product exports.’’.
SEC. 149. AUTHORITY TO ASSIST IN ESTABLISHMENT AND MAINTE-
NANCE OF ONE OR MORE EXPORT TRADING COMPANIES.
The Secretary of Agriculture shall, consistent with the obliga-
tions of the United States as a member of the World Trade
Organization, provide such advice and assistance to the United
States dairy industry as may be necessary to enable that industry
to establish and maintain one or more export trading companies
under the Export Trading Company Act of 1982 (15 U.S.C. 4001
et seq.) for the purpose of facilitating the international market
development for and exportation of dairy products produced in
the United States.
SEC. 150. STANDBY AUTHORITY TO INDICATE ENTITY BEST SUITED
TO PROVIDE INTERNATIONAL MARKET DEVELOPMENT
AND EXPORT SERVICES.
(a) INDICATION
OF ENTITY BEST SUITED TO ASSIST INTER-
NATIONAL MARKET DEVELOPMENT
FOR
AND EXPORT
OF UNITED
STATES
DAIRY
PRODUCTS.—The Secretary of Agriculture shall
indicate which entity or entities autonomous of the Government
of the United States, which seeks such a designation, is best suited
to facilitate the international market development for and expor-
tation of United States dairy products, if the Secretary determines
that—
(1) the United States dairy industry has not established
an export trading company under the Export Trading Company
Act of 1982 (15 U.S.C. 4001 et seq.) for the purpose of facilitat-
ing the international market development for an exportation
of dairy products produced in the United States on or before
June 30, 1997; or
(2) the quantity of exports of United States dairy products
during the 12-month period preceding July 1, 1998 does not
exceed the quantity of exports of United States dairy products
during the 12-month period preceding July 1, 1997 by 1.5
billion pounds (milk equivalent, total solids basis).
(b) FUNDING OF EXPORT ACTIVITIES.—The Secretary shall assist
the entity or entities identified under subsection (a) in identifying
H. R. 2854—35
sources of funding for the activities specified in subsection (a)
from within the dairy industry and elsewhere.
(c) APPLICATION OF SECTION.—This section shall apply only
during the period beginning on July 1, 1997 and ending on Septem-
ber 30, 2000.
SEC. 151. STUDY AND REPORT REGARDING POTENTIAL IMPACT OF
URUGUAY ROUND ON PRICES, INCOME, AND GOVERN-
MENT PURCHASES.
(a) STUDY.—The Secretary of Agriculture shall conduct a study,
on a variety by variety of cheese basis, to determine the potential
impact on milk prices in the United States, dairy producer income,
and Federal dairy program costs, of the allocation of additional
cheese granted access to the United States as a result of the
obligations of the United States as a member of the World Trade
Organization.
(b) REPORT.—Not later than June 30, 1997, the Secretary shall
report to the Committee on Agriculture, Nutrition, and Forestry
of the Senate and the Committee on Agriculture of the House
of Representatives the results of the study conducted under this
section.
(c) RULE OF CONSTRUCTION.—Any limitation imposed by Act
of Congress on the conduct or completion of studies or reports
to Congress shall not apply to the study and report required under
this section, unless the limitation specifically refers to this section.
SEC. 152. PROMOTION OF UNITED STATES DAIRY PRODUCTS IN INTER-
NATIONAL MARKETS THROUGH DAIRY PROMOTION PRO-
GRAM.
Section 113(e) of the Dairy Production Stabilization Act of
1983 (7 U.S.C. 4504(e)) is amended by adding at the end the
following new sentence: ‘‘For each of fiscal years 1997 through
2001, the Board’s budget may provide for the expenditure of reve-
nues available to the Board to develop international markets for,
and to promote within such markets, the consumption of dairy
products produced in the United States from milk produced in
the United States.’’.
CHAPTER 2—PEANUTS AND SUGAR
SEC. 155. PEANUT PROGRAM.
(a) QUOTA PEANUTS.—
(1) AVAILABILITY
OF
LOANS.—The Secretary shall make
nonrecourse loans available to producers of quota peanuts.
(2) LOAN RATE.—The national average quota loan rate for
quota peanuts shall be $610 per ton.
(3) INSPECTION, HANDLING, OR STORAGE.—The loan amount
may not be reduced by the Secretary by any deductions for
inspection, handling, or storage.
(4) LOCATION
AND
OTHER
FACTORS.—The Secretary may
make adjustments in the loan rate for quota peanuts for loca-
tion of peanuts and such other factors as are authorized by
section 162.
(5) OFFERS FROM HANDLERS.—If a producer markets a quota
peanut crop, meeting quality requirements for domestic edible
use, through the marketing association loan for two consecutive
marketing years and the Secretary determines that a handler
provided the producer with a written offer, upon delivery, for
H. R. 2854—36
the purchase of the quota peanut crops at a price equal to
or in excess of the quota support price, the producer shall
be ineligible for quota price support for the next marketing
year. The Secretary shall establish the method by which a
producer may appeal a determination under this paragraph
regarding ineligibility for quota price support.
(b) ADDITIONAL PEANUTS.—
(1) IN GENERAL.—Subject to paragraph (2), the Secretary
shall make nonrecourse loans available to producers of addi-
tional peanuts at such rates as the Secretary finds appropriate,
taking into consideration the demand for peanut oil and peanut
meal, expected prices of other vegetable oils and protein meals,
and the demand for peanuts in foreign markets.
(2) LIMITATION.—The Secretary shall establish the support
rate on additional peanuts at a level estimated by the Secretary
to ensure that there are no losses to the Commodity Credit
Corporation on the sale or disposal of the peanuts.
(3) ANNOUNCEMENT.—The Secretary shall announce the
loan rate for additional peanuts of each crop not later than
February 15 preceding the marketing year for the crop for
which the loan rate is being determined.
(c) AREA MARKETING ASSOCIATIONS.—
(1) WAREHOUSE STORAGE LOANS.—
(A) IN GENERAL.—In carrying out subsections (a) and
(b), the Secretary shall make warehouse storage loans
available in each of the producing areas (described in sec-
tion 1446.95 of title 7 of the Code of Federal Regulations
(January 1, 1989)) to a designated area marketing associa-
tion of peanut producers that is selected and approved
by the Secretary and that is operated primarily for the
purpose of conducting the loan activities. The Secretary
may not make warehouse storage loans available to any
cooperative that is engaged in operations or activities
concerning peanuts other than those operations and activi-
ties specified in this section and section 358e of the Agricul-
tural Adjustment Act of 1938 (7 U.S.C. 1359a).
(B) ADMINISTRATIVE AND SUPERVISORY ACTIVITIES.—An
area marketing association shall be used in administrative
and supervisory activities relating to loans and marketing
activities under this section and section 358e of the Agricul-
tural Adjustment Act of 1938 (7 U.S.C. 1359a).
(C) ASSOCIATION COSTS.—Loans made to the associa-
tion under this paragraph shall include such costs as the
area marketing association reasonably may incur in carry-
ing out the responsibilities, operations, and activities of
the association under this section and section 358e of the
Agricultural Adjustment Act of 1938 (7 U.S.C. 1359a).
(2) POOLS FOR QUOTA AND ADDITIONAL PEANUTS.—
(A) IN GENERAL.—The Secretary shall require that each
area marketing association establish pools and maintain
complete and accurate records by area and segregation
for quota peanuts handled under loan and for additional
peanuts placed under loan, except that separate pools shall
be established for Valencia peanuts produced in New Mex-
ico.
(B) ELIGIBILITY
TO
PARTICIPATE
IN
NEW
MEXICO
POOLS.—
H. R. 2854—37
(i) IN GENERAL.—Except as provided in clause (ii),
in the case of the 1996 and subsequent crops, Valencia
peanuts not physically produced in the State of New
Mexico shall not be eligible to participate in the pools
of the State.
(ii) EXCEPTION.—A producer of Valencia peanuts
may enter Valencia peanuts that are produced in Texas
into the pools of New Mexico in a quantity not greater
than the average annual quantity of the peanuts that
the producer entered into the New Mexico pools for
the 1990 through 1995 crops.
(C) TYPES
OF
PEANUTS.—Bright hull and dark hull
Valencia peanuts shall be considered as separate types
for the purpose of establishing the pools.
(D) NET GAINS.—Net gains on peanuts in each pool,
unless otherwise approved by the Secretary, shall be
distributed only to producers who placed peanuts in the
pool and shall be distributed in proportion to the value
of the peanuts placed in the pool by each producer. Net
gains for peanuts in each pool shall consist of the following:
(i) QUOTA PEANUTS.—For quota peanuts, the net
gains over and above the loan indebtedness and other
costs or losses incurred on peanuts placed in the pool.
(ii) ADDITIONAL PEANUTS.—For additional peanuts,
the net gains over and above the loan indebtedness
and other costs or losses incurred on peanuts placed
in the pool for additional peanuts.
(d) LOSSES.—Losses in quota area pools shall be covered using
the following sources in the following order of priority:
(1) TRANSFERS FROM ADDITIONAL LOAN POOLS.—The pro-
ceeds due any producer from any pool shall be reduced by
the amount of any loss that is incurred with respect to peanuts
transferred from an additional loan pool to a quota loan pool
by the producer under section 358–1(b)(8) of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1358–1(b)(8)).
(2) PRODUCERS IN SAME POOL.—Further losses in an area
quota pool shall be offset by reducing the gain of any producer
in the pool by the amount of pool gains attributed to the
same producer from the sale of additional peanuts for domestic
and edible export use.
(3) OFFSET WITHIN AREA.—Further losses in an area quota
pool shall be offset by any gains or profits from additional
peanuts (other than separate type pools established under sub-
section (c)(2)(A) for Valencia peanuts produced in New Mexico)
owned or controlled by the Commodity Credit Corporation in
that area and sold for domestic edible use, in accordance with
regulations issued by the Secretary. This paragraph shall not
apply to profits or gains from a farm with 1 acre or less
of peanut production.
(4) FIRST USE OF MARKETING ASSESSMENTS.—The Secretary
shall use funds collected under subsection (g) (except funds
attributable to handlers) to offset further losses in area quota
pools. The Secretary shall transfer to the Treasury those funds
collected under subsection (g) and available for use under this
paragraph that the Secretary determines are not required to
cover losses in area quota pools.
H. R. 2854—38
(5) CROSS COMPLIANCE.—Further losses in area quota pools,
other than losses incurred as a result of transfers from addi-
tional loan pools to quota loan pools under section 358–1(b)(8)
of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1358–
1(b)(8)), shall be offset by any gains or profits from quota
pools in other production areas (other than separate type pools
established under subsection (c)(2)(A) for Valencia peanuts pro-
duced in New Mexico) in such manner as the Secretary shall
by regulation prescribe.
(6) OFFSET GENERALLY.—If losses in an area quota pool
have not been entirely offset under the preceding paragraphs,
further losses shall be offset by any gains or profits from
additional peanuts (other than separate type pools established
under subsection (c)(2)(A) for Valencia peanuts produced in
New Mexico) owned or controlled by the Commodity Credit
Corporation and sold for domestic edible use, in accordance
with regulations issued by the Secretary. This paragraph shall
not apply to profits or gains from a farm with 1 acre or less
of peanut production.
(7) SECOND USE OF MARKETING ASSESSMENTS.—The Sec-
retary shall use funds collected under subsection (g) and attrib-
utable to handlers to offset further losses in area quota pools.
The Secretary shall transfer to the Treasury those funds col-
lected under subsection (g) and available for use under this
paragraph that the Secretary determines are not required to
cover losses in area quota pools.
(8) INCREASED ASSESSMENTS.—If use of the authorities pro-
vided in the preceding paragraphs is not sufficient to cover
losses in an area quota pool, the Secretary shall increase the
marketing assessment for producers established under sub-
section (g) by such an amount as the Secretary considers nec-
essary to cover the losses. The increased assessment shall apply
only to quota peanuts in the production area covered by the
pool. Amounts collected under subsection (g) as a result of
the increased assessment shall be retained by the Secretary
to cover losses in that pool.
(e) DISAPPROVAL OF QUOTAS.—Notwithstanding any other provi-
sion of law, no loan for quota peanuts may be made available
by the Secretary for any crop of peanuts with respect to which
poundage quotas have been disapproved by producers, as provided
for in section 358–1(d) of the Agricultural Adjustment Act of 1938
(7 U.S.C. 1358–1(d)).
(f) QUALITY IMPROVEMENT.—
(1) IN GENERAL.—With respect to peanuts under loan, the
Secretary shall—
(A) promote the crushing of peanuts at a greater risk
of deterioration before peanuts of a lesser risk of deteriora-
tion;
(B) ensure that all Commodity Credit Corporation
inventories of peanuts sold for domestic edible use must
be shown to have been officially inspected by licensed
Department inspectors both as farmer stock and shelled
or cleaned in-shell peanuts;
(C) continue to endeavor to operate the peanut program
so as to improve the quality of domestic peanuts and ensure
the coordination of activities under the Peanut Administra-
tive Committee established under Marketing Agreement
H. R. 2854—39
No. 146, regulating the quality of domestically produced
peanuts (under the Agricultural Adjustment Act (7 U.S.C.
601 et seq.), reenacted with amendments by the Agricul-
tural Marketing Agreement Act of 1937); and
(D) ensure that any changes made in the peanut pro-
gram as a result of this subsection requiring additional
production or handling at the farm level shall be reflected
as an upward adjustment in the Department loan schedule.
(2) EXPORTS
AND
OTHER
PEANUTS.—The Secretary shall
require that all peanuts in the domestic and export markets
fully comply with all quality standards under Marketing Agree-
ment No. 146.
(g) MARKETING ASSESSMENT.—
(1) IN GENERAL.—The Secretary shall provide for a non-
refundable marketing assessment. The assessment shall be
made on a per pound basis in an amount equal to 1.1 percent
for each of the 1994 and 1995 crops, 1.15 percent for the
1996 crop, and 1.2 percent for each of the 1997 through 2002
crops, of the national average quota or additional peanut loan
rate for the applicable crop.
(2) FIRST PURCHASERS.—
(A) IN GENERAL.—Except as provided under paragraphs
(3) and (4), the first purchaser of peanuts shall—
(i) collect from the producer a marketing assess-
ment equal to the quantity of peanuts acquired multi-
plied by—
(I) in the case of each of the 1994 and 1995
crops, .55 percent of the applicable national aver-
age loan rate;
(II) in the case of the 1996 crop, .6 percent
of the applicable national average loan rate; and
(III) in the case of each of the 1997 through
2002 crops, .65 percent of the applicable national
average loan rate;
(ii) pay, in addition to the amount collected under
clause (i), a marketing assessment in an amount equal
to the quantity of peanuts acquired multiplied by .55
percent of the applicable national average loan rate;
and
(iii) remit the amounts required under clauses (i)
and (ii) to the Commodity Credit Corporation in a
manner specified by the Secretary.
(B) DEFINITION
OF
FIRST
PURCHASER.—In this sub-
section, the term ‘‘first purchaser’’ means a person acquir-
ing peanuts from a producer except that in the case of
peanuts forfeited by a producer to the Commodity Credit
Corporation, the term means the person acquiring the pea-
nuts from the Commodity Credit Corporation.
(3) OTHER PRIVATE MARKETINGS.—In the case of a private
marketing by a producer directly to a consumer through a
retail or wholesale outlet or in the case of a marketing by
the producer outside of the continental United States, the pro-
ducer shall be responsible for the full amount of the assessment
and shall remit the assessment by such time as is specified
by the Secretary.
(4) LOAN PEANUTS.—In the case of peanuts that are pledged
as collateral for a loan made under this section, the producer
H. R. 2854—40
portion of the assessment shall be deducted from the proceeds
of the loan. The remainder of the assessment shall be paid
by the first purchaser of the peanuts. For purposes of computing
net gains on peanuts under this section, the reduction in loan
proceeds shall be treated as having been paid to the producer.
(5) PENALTIES.—If any person fails to collect or remit the
reduction required by this subsection or fails to comply with
the requirements for recordkeeping or otherwise as are required
by the Secretary to carry out this subsection, the person shall
be liable to the Secretary for a civil penalty up to an amount
determined by multiplying—
(A) the quantity of peanuts involved in the violation;
by
(B) the national average quota peanut rate for the
applicable crop year.
(6) ENFORCEMENT.—The Secretary may enforce this sub-
section in the courts of the United States.
(h) CROPS.—Subsections (a) through (g) shall be effective only
for the 1996 through 2002 crops of peanuts.
(i) POUNDAGE QUOTAS.—
(1) IN GENERAL.—Part VI of subtitle B of title III of the
Agricultural Adjustment Act of 1938 is amended—
(A) in section 358–1 (7 U.S.C. 1358–1)—
(i) in the section heading, by striking ‘‘1991
THROUGH 1997 CROPS OF’’;
(ii) in subsections (a)(1), (b)(1)(B), (b)(2)(A),
(b)(2)(C), and (b)(3)(A), by striking ‘‘of the 1991 through
1997 marketing years’’ each place it appears and
inserting ‘‘marketing year’’;
(iii) in subsection (a)(3), by striking ‘‘1990’’ and
inserting ‘‘1990, for the 1991 through 1995 marketing
years, and 1995, for the 1996 through 2002 marketing
years’’;
(iv) in subsection (b)(1)(A)—
(I) by striking ‘‘each of the 1991 through 1997
marketing years’’ and inserting ‘‘each marketing
year’’; and
(II) in clause (i), by inserting before the semi-
colon the following: ‘‘, in the case of the 1991
through 1995 marketing years, and the 1995
marketing year, in the case of the 1996 through
2002 marketing years’’;
(v) in subsection (b)(1), by adding at the end the
following:
‘‘(D) CERTAIN FARMS INELIGIBLE FOR QUOTA.—Effective
beginning with the 1998 crop, the Secretary shall not estab-
lish a farm poundage quota under subparagraph (A) for
a farm owned or controlled by—
‘‘(i) a municipality, airport authority, school, col-
lege, refuge, or other public entity (other than a univer-
sity used for research purposes); or
‘‘(ii) a person who is not a producer and resides
in another State.’’;
(vi) in subsection (b)(2), by adding at the end the
following:
‘‘(E) TRANSFER OF QUOTA FROM INELIGIBLE FARMS.—
Any farm poundage quota held at the end of the 1996
H. R. 2854—41
marketing year by a farm described in paragraph (1)(D)
shall be allocated to other farms in the same State on
such basis as the Secretary may by regulation prescribe.’’;
and
(vii) in subsection (f), by striking ‘‘1997’’ and insert-
ing ‘‘2002’’;
(B) in section 358b (7 U.S.C. 1358b)—
(i) in the section heading, by striking ‘‘1991
THROUGH 1995 CROPS OF’’; and
(ii) in subsection (c), by striking ‘‘1995’’ and insert-
ing ‘‘2002’’;
(C) in section 358c(d) (7 U.S.C. 1358c(d)), by striking
‘‘1995’’ and inserting ‘‘2002’’; and
(D) in section 358e (7 U.S.C. 1359a)—
(i) in the section heading, by striking ‘‘FOR 1991
THROUGH 1997 CROPS OF PEANUTS’’; and
(ii) in subsection (i), by striking ‘‘1997’’ and insert-
ing ‘‘2002’’.
(2) ELIMINATION OF QUOTA FLOOR.—Section 358–1(a)(1) of
the Agricultural Adjustment Act of 1938 (7 U.S.C. 1358–1(a)(1))
is amended by striking the second sentence.
(3) TEMPORARY QUOTA ALLOCATION.—Section 358–1 of the
Agricultural Adjustment Act of 1938 (7 U.S.C. 1358–1) is
amended—
(A) in subsection (a)(1), by striking ‘‘domestic edible,
seed,’’ and inserting ‘‘domestic edible use (except seed)’’;
and
(B) in subsection (b)(2)—
(i) in subparagraph (A), by striking ‘‘subparagraph
(B) and subject to’’; and
(ii) by striking subparagraph (B) and inserting
the following:
‘‘(B) TEMPORARY QUOTA ALLOCATION.—
‘‘(i) ALLOCATION RELATED TO SEED PEANUTS.—Tem-
porary allocation of quota pounds for the marketing
year only in which the crop is planted shall be made
to producers for each of the 1996 through 2002 market-
ing years as provided in this subparagraph.
‘‘(ii) QUANTITY.—The temporary quota allocation
shall be equal to the pounds of seed peanuts planted
on the farm, as may be adjusted and determined under
regulations prescribed by the Secretary.
‘‘(iii) ADDITIONAL QUOTA.—The temporary alloca-
tion of quota pounds under this paragraph shall be
in addition to the farm poundage quota otherwise
established under this subsection and shall be credited,
for the applicable marketing year only, in total, to
the producer of the peanuts on the farm in a manner
prescribed by the Secretary.
‘‘(iv) EFFECT OF OTHER REQUIREMENTS.—Nothing
in this section alters or changes the requirements
regarding the use of quota and additional peanuts
established by section 358e(b).’’.
(4) UNDERMARKETINGS.—Part VI of subtitle B of title III
of the Agricultural Adjustment Act of 1938 is amended—
(A) in section 358–1(b) (7 U.S.C. 1358–1(b))—
H. R. 2854—42
(i) in paragraph (1)(B), by striking ‘‘includ-
ing—’’ and clauses (i) and (ii) and inserting ‘‘including
any increases resulting from the allocation of quotas
voluntarily released for 1 year under paragraph (7).’’;
(ii) in paragraph (3)(B), by striking ‘‘include—’’
and clauses (i) and (ii) and inserting ‘‘include any
increase resulting from the allocation of quotas volun-
tarily released for 1 year under paragraph (7).’’; and
(iii) by striking paragraphs (8) and (9); and
(B) in section 358b(a) (7 U.S.C. 1358b(a))—
(i) in paragraph (2), by striking ‘‘(including any
applicable under marketings)’’; and
(ii) in paragraph (3), by striking ‘‘(including any
applicable undermarketings)’’.
(5) DISASTER TRANSFERS.—Section 358–1(b) of the Agricul-
tural Adjustment Act of 1938 (7 U.S.C. 1358–1(b)), as amended
by paragraph (4)(A)(iii), is amended by adding at the end the
following:
‘‘(8) DISASTER TRANSFERS.—
‘‘(A) IN GENERAL.—Except as provided in subparagraph
(B), additional peanuts produced on a farm from which
the quota poundage was not harvested and marketed
because of drought, flood, or any other natural disaster,
or any other condition beyond the control of the producer,
may be transferred to the quota loan pool for pricing pur-
poses on such basis as the Secretary shall by regulation
provide.
‘‘(B) LIMITATION.—The poundage of peanuts transferred
under subparagraph (A) shall not exceed the difference
between—
‘‘(i) the total quantity of peanuts meeting quality
requirements for domestic edible use, as determined
by the Secretary, marketed from the farm; and
‘‘(ii) the total farm poundage quota, excluding
quota pounds transferred to the farm in the fall.
‘‘(C) SUPPORT RATE.—Peanuts transferred under this
paragraph shall be supported at 70 percent of the quota
support rate for the marketing years in which the transfers
occur. The transfers for a farm shall not exceed 25 percent
of the total farm quota pounds, excluding pounds trans-
ferred in the fall.’’.
(6) SALE OR LEASE.—Section 358b(a) of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1358b(a)) is amended—
(A) by striking paragraph (1) and inserting the follow-
ing:
‘‘(1) SALE AND LEASE AUTHORITY.—
‘‘(A) SALE OR LEASE WITHIN SAME STATE.—Subject to
subparagraph (B) and such terms and conditions as the
Secretary may prescribe, the owner, or operator with the
permission of the owner, of a farm in a State for which
a farm poundage quota has been established may sell or
lease all or any part of the poundage quota to any other
owner or operator of a farm within the same State for
transfer to the farm. However, any such lease of poundage
quota may be entered into in the fall or after the normal
planting season—
H. R. 2854—43
‘‘(i) if not less than 90 percent of the basic quota
(the farm quota and temporary quota transfers), plus
any poundage quota transferred to the farm under
this subsection, has been planted or considered planted
on the farm from which the quota is to be leased;
and
‘‘(ii) under such terms and conditions as the Sec-
retary may by regulation prescribe.
‘‘In the case of a fall transfer or a transfer after the normal
planting season by a cash lessee, the landowner shall not
be required to sign the transfer authorization. A fall trans-
fer or a transfer after the normal planting season may
be made not later than 72 hours after the peanuts that
are the subject of the transfer are inspected and graded.
‘‘(B) PERCENTAGE LIMITATIONS ON SPRING TRANSFERS.—
Spring transfers under subparagraph (A) by sale or lease
of a quota for farms in a county to any owner or operator
of a farm outside the county within the same State shall
not exceed the applicable percentage specified in this
subparagraph of the quotas of all farms in the originating
county (as of January 1, 1996) for the crop year in which
the transfer is made, plus the total amount of quotas
eligible for transfer from the originating county in the
preceding crop year that were not transferred in that year
or that were transferred through an expired lease. How-
ever, not more than an aggregate of 40 percent of the
total poundage quota within a county (as of January 1,
1996) may be transferred outside of the county. Cumulative
unexpired transfers outside of a county may not exceed
for a crop year the following:
‘‘(i) For the 1996 crop, 15 percent.
‘‘(ii) For the 1997 crop, 25 percent.
‘‘(iii) For the 1998 crop, 30 percent.
‘‘(iv) For the 1999 crop, 35 percent.
‘‘(v) For the 2000 and subsequent crops, not more
than an aggregate of 40 percent of the total poundage
quota within the county as of January 1, 1996.
‘‘(C) CLARIFICATION REGARDING FALL TRANSFERS.—The
limitation in subparagraph (B) does not apply to 1-year
fall transfers, which in all cases may be made to any
farm in the same State.
‘‘(D) EFFECT OF TRANSFER.—Any farm poundage quota
transferred under this paragraph shall not result in any
reduction in the farm poundage quota for the transferring
farm if the transferred quota is produced or considered
produced on the receiving farm.’’; and
(B) by adding at the end the following:
‘‘(4) TRANSFERS IN COUNTIES WITH SMALL QUOTAS.—Not-
withstanding paragraphs (1) and (2), in the case of any county
in a State for which the poundage quota allocated to the county
was less than 100,000 pounds for the preceding year’s crop,
all or any part of a farm poundage quota may be transferred
by sale or lease or otherwise from a farm in the county to
a farm in another county in the same State.’’.
H. R. 2854—44
SEC. 156. SUGAR PROGRAM.
(a) SUGARCANE.—The Secretary shall make loans available to
processors of domestically grown sugarcane at a rate equal to 18
cents per pound for raw cane sugar.
(b) SUGAR BEETS.—The Secretary shall make loans available
to processors of domestically grown sugar beets at a rate equal
to 22.9 cents per pound for refined beet sugar.
(c) REDUCTION IN LOAN RATES.—
(1) REDUCTION REQUIRED.—The Secretary shall reduce the
loan rate specified in subsection (a) for domestically grown
sugarcane and subsection (b) for domestically grown sugar beets
if the Secretary determines that negotiated reductions in export
subsidies and domestic subsidies provided for sugar of other
major sugar growing, producing, and exporting countries in
the aggregate exceed the commitments made as part of the
Agreement on Agriculture.
(2) EXTENT OF REDUCTION.—The Secretary shall not reduce
the loan rate under subsection (a) or (b) below a rate that
provides an equal measure of support to that provided by
other major sugar growing, producing, and exporting countries,
based on an examination of both domestic and export subsidies
subject to reduction in the Agreement on Agriculture.
(3) ANNOUNCEMENT OF REDUCTION.—The Secretary shall
announce any loan rate reduction to be made under this sub-
section as far in advance as is practicable.
(4) DEFINITIONS.—In this subsection:
(A) AGREEMENT ON AGRICULTURE.—The term ‘‘Agree-
ment on Agriculture’’ means the Agreement on Agriculture
referred to in section 101(d)(2) of the Uruguay Round
Agreements Act (19 U.S.C. 3511(d)(2)).
(B) MAJOR SUGAR COUNTRIES.—The term ‘‘major sugar
growing, producing, and exporting countries’’ means—
(i) the countries of the European Union; and
(ii) the 10 foreign countries not covered by subpara-
graph (A) that the Secretary determines produce the
greatest quantity of sugar.
(d) TERM OF LOANS.—
(1) IN GENERAL.—A loan under this section during any
fiscal year shall be made available not earlier than the begin-
ning of the fiscal year and shall mature at the earlier of—
(A) the end of the 9-month period beginning on the
first day of the first month after the month in which
the loan is made; or
(B) the end of the fiscal year in which the loan is
made.
(2) SUPPLEMENTAL LOANS.—In the case of a loan made
under this section in the last 3 months of a fiscal year, the
processor may repledge the sugar as collateral for a second
loan in the subsequent fiscal year, except that the second
loan shall—
(A) be made at the loan rate in effect at the time
the second loan is made; and
(B) mature in 9 months less the quantity of time that
the first loan was in effect.
(e) LOAN TYPE; PROCESSOR ASSURANCES.—
H. R. 2854—45
(1) RECOURSE LOANS.—Subject to paragraph (2), the Sec-
retary shall carry out this section through the use of recourse
loans.
(2) NONRECOURSE LOANS.—During any fiscal year in which
the tariff rate quota for imports of sugar into the United States
is established at, or is increased to, a level in excess of 1,500,000
short tons raw value, the Secretary shall carry out this section
by making available nonrecourse loans. Any recourse loan pre-
viously made available by the Secretary under this section
during the fiscal year shall be changed by the Secretary into
a nonrecourse loan.
(3) PROCESSOR ASSURANCES.—If the Secretary is required
under paragraph (2) to make nonrecourse loans available dur-
ing a fiscal year or to change recourse loans into nonrecourse
loans, the Secretary shall obtain from each processor that
receives a loan under this section such assurances as the Sec-
retary considers adequate to ensure that the processor will
provide payments to producers that are proportional to the
value of the loan received by the processor for sugar beets
and sugarcane delivered by producers served by the processor.
The Secretary may establish appropriate minimum payments
for purposes of this paragraph.
(f) MARKETING ASSESSMENT.—
(1) SUGARCANE.—Effective for marketings of raw cane
sugar during the 1996 through 2003 fiscal years, the first
processor of sugarcane shall remit to the Commodity Credit
Corporation a nonrefundable marketing assessment in an
amount equal to—
(A) in the case of marketings during fiscal year 1996,
1.1 percent of the loan rate established under subsection
(a) per pound of raw cane sugar, processed by the processor
from domestically produced sugarcane or sugarcane molas-
ses, that has been marketed (including the transfer or
delivery of the sugar to a refinery for further processing
or marketing); and
(B) in the case of marketings during each of fiscal
years 1997 through 2003, 1.375 percent of the loan rate
established under subsection (a) per pound of raw cane
sugar, processed by the processor from domestically pro-
duced sugarcane or sugarcane molasses, that has been
marketed (including the transfer or delivery of the sugar
to a refinery for further processing or marketing).
(2) SUGAR BEETS.—Effective for marketings of beet sugar
during the 1996 through 2003 fiscal years, the first processor
of sugar beets shall remit to the Commodity Credit Corporation
a nonrefundable marketing assessment in an amount equal
to—
(A) in the case of marketings during fiscal year 1996,
1.1794 percent of the loan rate established under subsection
(a) per pound of beet sugar, processed by the processor
from domestically produced sugar beets or sugar beet
molasses, that has been marketed; and
(B) in the case of marketings during each of fiscal
years 1997 through 2003, 1.47425 percent of the loan rate
established under subsection (a) per pound of beet sugar,
processed by the processor from domestically produced
H. R. 2854—46
sugar beets or sugar beet molasses, that has been mar-
keted.
(3) COLLECTION.—
(A) TIMING.—A marketing assessment required under
this subsection shall be collected on a monthly basis and
shall be remitted to the Commodity Credit Corporation
not later than 30 days after the end of each month. Any
cane sugar or beet sugar processed during a fiscal year
that has not been marketed by September 30 of the year
shall be subject to assessment on that date. The sugar
shall not be subject to a second assessment at the time
that it is marketed.
(B) MANNER.—Subject to subparagraph (A), marketing
assessments shall be collected under this subsection in
the manner prescribed by the Secretary and shall be non-
refundable.
(4) PENALTIES.—If any person fails to remit the assessment
required by this subsection or fails to comply with such require-
ments for recordkeeping or otherwise as are required by the
Secretary to carry out this subsection, the person shall be
liable to the Secretary for a civil penalty up to an amount
determined by multiplying—
(A) the quantity of cane sugar or beet sugar involved
in the violation; by
(B) the loan rate for the applicable crop of sugarcane
or sugar beets.
(5) ENFORCEMENT.—The Secretary may enforce this sub-
section in a court of the United States.
(g) FORFEITURE PENALTY.—
(1) IN GENERAL.—A penalty shall be assessed on the forfeit-
ure of any sugar pledged as collateral for a nonrecourse loan
under this section.
(2) CANE
SUGAR.—The penalty for cane sugar shall be
1 cent per pound.
(3) BEET SUGAR.—The penalty for beet sugar shall bear
the same relation to the penalty for cane sugar as the marketing
assessment for sugar beets bears to the marketing assessment
for sugarcane.
(4) EFFECT OF FORFEITURE.—Any payments owed producers
by a processor that forfeits any sugar pledged as collateral
for a nonrecourse loan shall be reduced in proportion to the
loan forfeiture penalty incurred by the processor.
(h) INFORMATION REPORTING.—
(1) DUTY
OF
PROCESSORS
AND
REFINERS
TO
REPORT.—A
sugarcane processor, cane sugar refiner, and sugar beet proc-
essor shall furnish the Secretary, on a monthly basis, such
information as the Secretary may require to administer sugar
programs, including the quantity of purchases of sugarcane,
sugar beets, and sugar, and production, importation, distribu-
tion, and stock levels of sugar.
(2) PENALTY.—Any person willfully failing or refusing to
furnish the information, or furnishing willfully any false
information, shall be subject to a civil penalty of not more
than $10,000 for each such violation.
(3) MONTHLY
REPORTS.—Taking into consideration the
information received under paragraph (1), the Secretary shall
H. R. 2854—47
publish on a monthly basis composite data on production,
imports, distribution, and stock levels of sugar.
(i) CROPS.—This section (other than subsection (f)) shall be
effective only for the 1996 through 2002 crops of sugar beets and
sugarcane.
Subtitle E—Administration
SEC. 161. ADMINISTRATION.
(a) USE OF COMMODITY CREDIT CORPORATION.—The Secretary
shall carry out this title through the Commodity Credit Corporation.
(b) LIMITATION ON EXPENDITURE OF COMMODITY CREDIT COR-
PORATION FUNDS.—
(1) GENERAL POWERS AND RESPONSIBILITIES.—Section 4 of
the Commodity Credit Corporation Charter Act (15 U.S.C. 714b)
is amended—
(A) in the first sentence of subsection (g), by inserting
before the period the following: ‘‘, except that obligations
under all such contracts or agreements (other than
reimbursable agreements under section 11) for equipment
or services relating to automated data processing, informa-
tion technologies, or related items (including telecommuni-
cations equipment and computer hardware and software)
may not exceed $170,000,000 in fiscal year 1996 and not
more than $275,000,000 in the 6-fiscal year period begin-
ning on October 1, 1996, unless additional amounts for
such contracts and agreements are provided in advance
in appropriation Acts’’; and
(B) in subsection (h), by striking ‘‘shall have power
to acquire personal property necessary to the conduct of
its business but’’.
(2) 
REIMBURSABLE
AGREEMENTS.—Section 
of 
the
Commodity Credit Corporation Charter Act (15 U.S.C. 714i)
is amended by adding at the end the following: ‘‘After Septem-
ber 30, 1996, the total amount of all allotments and fund
transfers from the Corporation under this section (including
allotments and transfers for automated data processing or
information resource management activities) for a fiscal year
may not exceed the total amount of the allotments and transfers
made under this section in fiscal year 1995.’’.
(3) REPORTING REQUIREMENTS.—Section 13 of the Commod-
ity Credit Corporation Charter Act (15 U.S.C. 714k) is amended
by adding at the end the following: ‘‘In addition to the annual
report, the Corporation shall submit to Congress on a quarterly
basis an itemized report of all expenditures over $10,000 made
under section 5 or 11 during the period covered by the report,
including expenditures in the form of allotments or fund trans-
fers to other agencies and departments of the Federal Govern-
ment.’’.
(c) DETERMINATIONS
BY SECRETARY.—A determination made
by the Secretary under this title shall be final and conclusive.
(d) REGULATIONS.—Not later than 90 days after the date of
enactment of this title, the Secretary and the Commodity Credit
Corporation, as appropriate, shall issue such regulations as are
necessary to implement this title. The issuance of the regulations
shall be made without regard to—
H. R. 2854—48
(1) the notice and comment provisions of section 553 of
title 5, United States Code;
(2) the Statement of Policy of the Secretary of Agriculture
effective July 24, 1971 (36 Fed. Reg. 13804) relating to notices
of proposed rulemaking and public participation in rulemaking;
and
(3) chapter 35 of title 44, United States Code (commonly
know as the ‘‘Paperwork Reduction Act’’).
SEC. 162. ADJUSTMENTS OF LOANS.
(a) ADJUSTMENT AUTHORITY.—The Secretary may make appro-
priate adjustments in the loan rates for any commodity for dif-
ferences in grade, type, quality, location, and other factors.
(b) MANNER
OF ADJUSTMENT.—The adjustments under the
authority of this section shall, to the maximum extent practicable,
be made in such manner that the average loan level for the commod-
ity will, on the basis of the anticipated incidence of the factors,
be equal to the level of support determined as provided in this
title.
(c) ADJUSTMENT ON COUNTY BASIS.—The Secretary may estab-
lish loan rates for a crop for producers in individual counties in
a manner that results in the lowest such rate being 95 percent
of the national average loan rate, except that such action shall
not result in an increase in outlays. Adjustments under this sub-
section shall not result in an increase in the national average
loan rate for any year.
SEC. 163. COMMODITY CREDIT CORPORATION INTEREST RATE.
Notwithstanding any other provision of law, the monthly
Commodity Credit Corporation interest rate applicable to loans
provided for agricultural commodities by the Corporation shall be
100 basis points greater than the rate determined under the
applicable interest rate formula in effect on October 1, 1995.
SEC. 164. PERSONAL LIABILITY OF PRODUCERS FOR DEFICIENCIES.
(a) IN GENERAL.—Except as provided in subsection (b), no pro-
ducer shall be personally liable for any deficiency arising from
the sale of the collateral securing any nonrecourse loan made under
this title unless the loan was obtained through a fraudulent rep-
resentation by the producer.
(b) LIMITATIONS.—Subsection (a) shall not prevent the Commod-
ity Credit Corporation or the Secretary from requiring a producer
to assume liability for—
(1) a deficiency in the grade, quality, or quantity of a
commodity stored on a farm or delivered by the producer;
(2) a failure to properly care for and preserve a commodity;
or
(3) a failure or refusal to deliver a commodity in accordance
with a program established under this title.
(c) ACQUISITION OF COLLATERAL.—In the case of a nonrecourse
loan made under this title or the Commodity Credit Corporation
Charter Act (15 U.S.C. 714 et seq.), if the Commodity Credit Cor-
poration acquires title to the unredeemed collateral, the Corporation
shall be under no obligation to pay for any market value that
the collateral may have in excess of the loan indebtedness.
(d) SUGARCANE AND SUGAR BEETS.—A security interest obtained
by the Commodity Credit Corporation as a result of the execution
of a security agreement by the processor of sugarcane or sugar
H. R. 2854—49
beets shall be superior to all statutory and common law liens
on raw cane sugar and refined beet sugar in favor of the producers
of sugarcane and sugar beets and all prior recorded and unrecorded
liens on the crops of sugarcane and sugar beets from which the
sugar was derived.
SEC. 165. COMMODITY CREDIT CORPORATION SALES PRICE RESTRIC-
TIONS.
(a) GENERAL SALES AUTHORITY.—The Commodity Credit Cor-
poration may sell any commodity owned or controlled by the Cor-
poration at any price that the Secretary determines will maximize
returns to the Corporation.
(b) NONAPPLICATION
OF
SALES
PRICE
RESTRICTIONS.—Sub-
section (a) shall not apply to—
(1) a sale for a new or byproduct use;
(2) a sale of peanuts or oilseeds for the extraction of oil;
(3) a sale for seed or feed if the sale will not substantially
impair any loan program;
(4) a sale of a commodity that has substantially deterio-
rated in quality or as to which there is a danger of loss or
waste through deterioration or spoilage;
(5) a sale for the purpose of establishing a claim arising
out of a contract or against a person who has committed fraud,
misrepresentation, or other wrongful act with respect to the
commodity;
(6) a sale for export, as determined by the Corporation;
and
(7) a sale for other than a primary use.
(c) PRESIDENTIAL DISASTER AREAS.—
(1) IN GENERAL.—Notwithstanding subsection (a), on such
terms and conditions as the Secretary may consider in the
public interest, the Corporation may make available any
commodity or product owned or controlled by the Corporation
for use in relieving distress—
(A) in any area in the United States (including the
Virgin Islands) declared by the President to be an acute
distress area because of unemployment or other economic
cause, if the President finds that the use will not displace
or interfere with normal marketing of agricultural commod-
ities; and
(B) in connection with any major disaster determined
by the President to warrant assistance by the Federal
Government under the Robert T. Stafford Disaster Relief
and Emergency Assistance Act (42 U.S.C. 5121 et seq.).
(2) COSTS.—Except on a reimbursable basis, the Corpora-
tion shall not bear any costs in connection with making a
commodity available under paragraph (1) beyond the cost of
the commodity to the Corporation incurred in—
(A) the storage of the commodity; and
(B) the handling and transportation costs in making
delivery of the commodity to designated agencies at 1 or
more central locations in each State or other area.
(d) EFFICIENT OPERATIONS.—Subsection (a) shall not apply to
the sale of a commodity the disposition of which is desirable in
the interest of the effective and efficient conduct of the operations
of the Corporation because of the small quantity of the commodity
H. R. 2854—50
involved, or because of the age, location, or questionable continued
storability of the commodity.
Subtitle F—Permanent Price Support
Authority
SEC. 171. SUSPENSION AND REPEAL OF PERMANENT PRICE SUPPORT
AUTHORITY.
(a) AGRICULTURAL ADJUSTMENT ACT OF 1938.—
(1) SUSPENSIONS.—The following provisions of the Agricul-
tural Adjustment Act of 1938 shall not be applicable to the
1996 through 2002 crops of loan commodities, peanuts, and
sugar and shall not be applicable to milk during the period
beginning on the date of enactment of this title and ending
on December 31, 2002:
(A) Parts II through V of subtitle B of title III (7
U.S.C. 1326–1351).
(B) Subsections (a) through (j) of section 358 (7 U.S.C.
1358).
(C) Subsections (a) through (h) of section 358a (7 U.S.C.
1358a).
(D) Subsections (a), (b), (d), and (e) of section 358d
(7 U.S.C. 1359).
(E) Part VII of subtitle B of title III (7 U.S.C. 1359aa–
1359jj).
(F) In the case of peanuts, part I of subtitle C of
title III (7 U.S.C. 1361–1368).
(G) In the case of upland cotton, section 377 (7 U.S.C.
1377).
(H) Subtitle D of title III (7 U.S.C. 1379a–1379j).
(I) Title IV (7 U.S.C. 1401–1407).
(2) REPORTS AND RECORDS.—Effective only for the 1996
through 2002 crops of peanuts, the first sentence of section
373(a) of the Agricultural Adjustment Act of 1938 (7 U.S.C.
1373(a)) is amended by inserting before ‘‘all brokers and dealers
in peanuts’’ the following: ‘‘all producers engaged in the produc-
tion of peanuts,’’.
(b) AGRICULTURAL ACT OF 1949.—
(1) SUSPENSIONS.—The following provisions of the Agricul-
tural Act of 1949 shall not be applicable to the 1996 through
2002 crops of loan commodities, peanuts, and sugar and shall
not be applicable to milk during the period beginning on the
date of enactment of this title and ending on December 31,
2002:
(A) Section 101 (7 U.S.C. 1441).
(B) Section 103(a) (7 U.S.C. 1444(a)).
(C) Section 105 (7 U.S.C. 1444b).
(D) Section 107 (7 U.S.C. 1445a).
(E) Section 110 (7 U.S.C. 1445e).
(F) Section 112 (7 U.S.C. 1445g).
(G) Section 115 (7 U.S.C. 1445k).
(H) Section 201 (7 U.S.C. 1446).
(I) Title III (7 U.S.C. 1447–1449).
(J) Title IV (7 U.S.C. 1421–1433d), other than sections
404, 412, and 416 (7 U.S.C. 1424, 1429, and 1431).
(K) Title V (7 U.S.C. 1461–1469).
H. R. 2854—51
(L) Title VI (7 U.S.C. 1471–1471j).
(2) REPEALS.—The following provisions of the Agricultural
Act of 1949 are repealed:
(A) Section 101B (7 U.S.C. 1441–2).
(B) Section 103B (7 U.S.C. 1444–2).
(C) Section 105B (7 U.S.C. 1444f).
(D) Section 107B (7 U.S.C. 1445–3a).
(E) Section 108B (7 U.S.C. 1445c–3).
(F) Section 113 (7 U.S.C. 1445h).
(G) Subsections (b) and (c) of section 114 (7 U.S.C.
1445j).
(H) Sections 205, 206, and 207 (7 U.S.C. 1446f, 1446g,
and 1446h).
(I) Sections 406 and 427 (7 U.S.C. 1426 and 1433f).
(3) POTENTIAL PRICE SUPPORT FOR RICE.—Section 101 of
the Agricultural Act of 1949 (7 U.S.C. 1441), as suspended
by paragraph (1), is amended by adding after subsection (d)
the following:
‘‘(e) RICE.—The Secretary shall make available to producers
of each crop of rice on a farm price support at a level that is
not less than 50 percent, or more than 90 percent of the parity
price for rice as the Secretary determines will not result in increas-
ing stocks of rice to the Commodity Credit Corporation.’’.
(c) SUSPENSION OF CERTAIN QUOTA PROVISIONS.—The joint reso-
lution entitled ‘‘A joint resolution relating to corn and wheat market-
ing quotas under the Agricultural 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 1996 through 2002.
SEC. 172. EFFECT OF AMENDMENTS.
(a) EFFECT ON PRIOR CROPS.—Except as otherwise specifically
provided in this title and notwithstanding any other provision of
law, this title and the amendments made by this title shall not
affect the authority of the Secretary to carry out a price support
or production adjustment program for any of the 1991 through
1995 crops of an agricultural commodity established under a provi-
sion of law in effect immediately before the date of enactment
of this title.
(b) LIABILITY.—A provision of this title or an amendment made
by this title shall not affect the liability of any person under
any provision of law as in effect before the date of enactment
of this title.
Subtitle G—Commission on 21st Century
Production Agriculture
SEC. 181. ESTABLISHMENT.
There is established a commission to be known as the ‘‘Commis-
sion on 21st Century Production Agriculture’’ (in this subtitle
referred to as the ‘‘Commission’’).
SEC. 182. COMPOSITION.
(a) MEMBERSHIP
AND APPOINTMENT.—The Commission shall
be composed of 11 members, appointed as follows:
(1) Three members shall be appointed by the President.
H. R. 2854—52
(2) Four members shall be appointed by the Chairman
of the Committee on Agriculture of the House of Representa-
tives in consultation with the ranking minority member of
the Committee.
(3) Four members shall be appointed by the Chairman
of the Committee on Agriculture, Nutrition, and Forestry of
the Senate in consultation with the ranking minority member
of the Committee.
(b) QUALIFICATIONS.—At least 1 of the members appointed
under each of paragraphs (1), (2), and (3) of subsection (a) shall
be an individual who is primarily involved in production agriculture.
All other members of the Commission shall be appointed from
among individuals having knowledge and experience in agricultural
production, marketing, finance, or trade.
(c) TERM OF MEMBERS; VACANCIES.—A member of the Commis-
sion shall be appointed for the life of the Commission. A vacancy
on the Commission shall not affect its powers, but shall be filled
in the same manner as the original appointment was made.
(d) TIME FOR APPOINTMENT; FIRST MEETING.—The members
of the Commission shall be appointed not later than October 1,
1997. The Commission shall convene its first meeting to carry
out its duties under this subtitle 30 days after 6 members of
the Commission have been appointed.
(e) CHAIRPERSON.—The chairperson of the Commission shall
be designated jointly by the Chairman of the Committee on Agri-
culture of the House of Representatives and the Chairman of the
Committee on Agriculture, Nutrition, and Forestry of the Senate
from among the members of the Commission.
SEC. 183. COMPREHENSIVE REVIEW OF PAST AND FUTURE OF
PRODUCTION AGRICULTURE.
(a) INITIAL REVIEW.—The Commission shall conduct a com-
prehensive review of changes in the condition of production agri-
culture in the United States since the date of enactment of this
title and the extent to which the changes are the result of this
title and the amendments made by this title. The review shall
include the following:
(1) An assessment of the initial success of production flexi-
bility contracts in supporting the economic viability of farming
in the United States.
(2) An assessment of economic risks to farms delineated
by size of farm operation (such as small, medium, or large
farms) and region of production.
(3) An assessment of the food security situation in the
United States in the areas of trade, consumer prices, inter-
national competitiveness of United States production agri-
culture, food supplies, and humanitarian relief.
(4) An assessment of the changes in farmland values and
agricultural producer incomes since the date of enactment of
this title.
(5) An assessment of the extent to which regulatory relief
for agricultural producers has been enacted and implemented,
including the application of cost/benefit principles in the issu-
ance of agricultural regulations.
(6) An assessment of the extent to which tax relief for
agricultural producers has been enacted in the form of capital
H. R. 2854—53
gains tax reductions, estate tax exemptions, and mechanisms
to average tax loads over high- and low-income years.
(7) An assessment of the effect of any Federal Government
interference in agricultural export markets, such as the imposi-
tion of trade embargoes, and the degree of implementation
and success of international trade agreements and United
States export programs.
(8) An assessment of the likely effect of the sale, lease,
or transfer of farm poundage quota for peanuts across State
lines.
(b) SUBSEQUENT REVIEW.—The Commission shall conduct a
comprehensive review of the future of production agriculture in
the United States and the appropriate role of the Federal Govern-
ment in support of production agriculture. The review shall include
the following:
(1) An assessment of changes in the condition of production
agriculture in the United States since the initial review con-
ducted under subsection (a).
(2) Identification of the appropriate future relationship of
the Federal Government with production agriculture after 2002.
(3) An assessment of the personnel and infrastructure
requirements of the Department of Agriculture necessary to
support the future relationship of the Federal Government
with production agriculture.
(4) An assessment of economic risks to farms delineated
by size of farm operation (such as small, medium, or large
farms) and region of production.
(c) RECOMMENDATIONS.—In carrying out the subsequent review
under subsection (b), the Commission shall develop specific rec-
ommendations for legislation to achieve the appropriate future rela-
tionship of the Federal Government with production agriculture
identified under subsection (a)(2).
SEC. 184. REPORTS.
(a) REPORT ON INITIAL REVIEW.—Not later than June 1, 1998,
the Commission shall submit to the President, the Committee on
Agriculture of the House of Representatives, and the Committee
on Agriculture, Nutrition, and Forestry of the Senate a report
containing the results of the initial review conducted under section
183(a).
(b) REPORT ON SUBSEQUENT REVIEW.—Not later than January
1, 2001, the Commission shall submit to the President and the
congressional committees specified in subsection (a) a report
containing the results of the subsequent review conducted under
section 183(b).
SEC. 185. POWERS.
(a) HEARINGS.—The Commission may, for the purpose of carry-
ing out this subtitle, conduct such hearings, sit and act at such
times, take such testimony, and receive such evidence, as the
Commission considers appropriate.
(b) ASSISTANCE FROM OTHER AGENCIES.—The Commission may
secure directly from any department or agency of the Federal
Government such information as may be necessary for the Commis-
sion to carry out its duties under this subtitle. On the request
of the chairperson of the Commission, the head of the department
or agency shall, to the extent permitted by law, furnish such
information to the Commission.
H. R. 2854—54
(c) MAIL.—The Commission may use the United States mails
in the same manner and under the same conditions as the depart-
ments and agencies of the Federal Government.
(d) ASSISTANCE FROM SECRETARY.—The Secretary shall provide
to the Commission appropriate office space and such reasonable
administrative and support services as the Commission may
request.
SEC. 186. COMMISSION PROCEDURES.
(a) MEETINGS.—The Commission shall meet on a regular basis
(as determined by the chairperson) and at the call of the chairperson
or a majority of its members.
(b) QUORUM.—A majority of the members of the Commission
shall constitute a quorum for the transaction of business.
SEC. 187. PERSONNEL MATTERS.
(a) COMPENSATION.—Each member of the Commission shall
serve without compensation, but shall be allowed travel expenses
including per diem in lieu of subsistence, as authorized by section
5703 of title 5, United States Code, when engaged in the perform-
ance of Commission duties.
(b) STAFF.—
(1) APPOINTMENT.—The Commission shall appoint a staff
director, who shall be paid at a rate not to exceed the maximum
rate of basic pay under section 5376 of title 5, United States
Code, and such professional and clerical personnel as may
be reasonable and necessary to enable the Commission to carry
out its duties under this subtitle without regard to the provi-
sions of title 5, United States Code, governing appointments
in the competitive service, and without regard to the provisions
of chapter 51 and subchapter III of chapter 53 of such title,
or any other provision of law, relating to the number, classifica-
tion, and General Schedule rates.
(2) LIMITATION ON COMPENSATION.—No employee appointed
under this subsection (other than the staff director) may be
compensated at a rate to exceed the maximum rate applicable
to level GS–15 of the General Schedule.
(c) DETAILED PERSONNEL.—On the request of the chairperson
of the Commission, the head of any department or agency of the
Federal Government is authorized to detail, without reimbursement,
any personnel of the department or agency to the Commission
to assist the Commission in carrying out its duties under this
section. The detail of any individual may not result in the interrup-
tion or loss of civil service status or other privilege of the individual.
SEC. 188. TERMINATION OF COMMISSION.
The Commission shall terminate on submission of the final
report required by section 184.
Subtitle H—Miscellaneous Commodity
Provisions
SEC. 191. OPTIONS PILOT PROGRAM.
(a) PILOT PROGRAMS AUTHORIZED.—Until December 31, 2002,
the Secretary of Agriculture may conduct a pilot program for 1
or more agricultural commodities supported under this title to
H. R. 2854—55
ascertain whether futures and options contracts can provide produc-
ers with reasonable protection from the financial risks of fluctua-
tions in price, yield, and income inherent in the production and
marketing of the commodities. The pilot program shall be an alter-
native to other related programs of the Department of Agriculture.
(b) DISTRIBUTION OF PILOT PROGRAM.—For each agricultural
commodity included in the pilot program, the Secretary may operate
the pilot program in not more than 100 counties, except that not
more than 6 of the counties may be located in any 1 State. The
pilot program for a commodity shall not be operated in any county
for more than 3 of the 1996 through 2002 calendar years.
(c) ELIGIBLE PARTICIPANTS.—In operating the pilot program,
the Secretary may enter into contract with a producer who—
(1) is eligible for a production flexibility contract, a market-
ing assistance loan, or other assistance under this title;
(2) volunteers to participate in the pilot program;
(3) operates a farm located in a county selected for the
pilot program; and
(4) meets such other eligibility requirements as the Sec-
retary may establish.
(d) NOTICE TO PRODUCERS.—The Secretary shall provide notice
to each producer participating in the pilot program that—
(1) the participation of the producer is voluntary; and
(2) neither the United States, the Commodity Credit Cor-
poration, the Federal Crop Insurance Corporation, the Depart-
ment of Agriculture, nor any other Federal agency is authorized
to guarantee that participants in the pilot program will be
better or worse off financially as a result of participation in
the pilot program than the producer would have been if the
producer had not participated in the pilot program.
(e) CONTRACTS.—The Secretary shall set forth in each contract
under the pilot program the terms and conditions for participation
in the pilot program and the notice required by subsection (d).
(f) ELIGIBLE MARKETS.—Trades for futures and options con-
tracts under the pilot program shall be carried out on commodity
futures and options markets designated as contract markets under
the Commodity Exchange Act (7 U.S.C. 1 et seq.).
(g) RECORDKEEPING.—A producer participating in the pilot pro-
gram shall compile, maintain, and submit (or authorize the compila-
tion, maintenance, and submission) of such documentation as the
regulations governing the pilot program require.
(h) USE OF COMMODITY CREDIT CORPORATION.—The Secretary
shall fund and operate the pilot program through the Commodity
Credit Corporation. To the maximum extent practicable, the Sec-
retary shall operate the pilot program in a budget neutral manner.
(i) CONFORMING REPEAL.—The Options Pilot Program Act of
1990 (subtitle E of title XI of Public Law 101–624; 7 U.S.C. 1421
note) is repealed.
SEC. 192. RISK MANAGEMENT EDUCATION.
In consultation with the Commodity Futures Trading Commis-
sion, the Secretary shall provide such education in management
of the financial risks inherent in the production and marketing
of agricultural commodities as the Secretary considers appropriate.
As part of such educational activities, the Secretary may develop
and implement programs to facilitate the participation of agricul-
tural producers in commodity futures trading programs, forward
H. R. 2854—56
contracting options, and insurance protection programs by assisting
and training producers in the usage of such programs. In
implementing this authority, the Secretary may use existing
research and extension authorities and resources of the Department
of Agriculture.
SEC. 193. CROP INSURANCE.
(a) CATASTROPHIC RISK PROTECTION.—
(1) SINGLE DELIVERY.—Section 508(b)(4) of the Federal Crop
Insurance Act (7 U.S.C. 1508(b)(4)) is amended by adding at
the end the following:
‘‘(C) DELIVERY OF COVERAGE.—
‘‘(i) 
IN
GENERAL.—In 
full 
consultation 
with
approved insurance providers, the Secretary may con-
tinue to offer catastrophic risk protection in a State
(or a portion of a State) through local offices of the
Department if the Secretary determines that there is
an insufficient number of approved insurance providers
operating in the State or portion of the State to ade-
quately provide catastrophic risk protection coverage
to producers.
‘‘(ii) COVERAGE BY APPROVED INSURANCE PROVID-
ERS.—To the extent that catastrophic risk protection
coverage by approved insurance providers is suffi-
ciently available in a State (or a portion of a State)
as determined by the Secretary, only approved insur-
ance providers may provide the coverage in the State
or portion of the State.
‘‘(iii) TIMING OF DETERMINATIONS.—Not later than
90 days after the date of enactment of this subpara-
graph, the Secretary shall announce the results of the
determinations under clause (i) for policies for the 1997
crop year. For subsequent crop years, the Secretary
shall make the announcement not later than April
30 of the year preceding the year in which the crop
will be produced, or at such other times during the
year as the Secretary finds practicable in consultation
with affected crop insurance providers for those States
(or portions of States) in which catastrophic coverage
remains available through local offices of the Depart-
ment.
‘‘(iv) CURRENT POLICIES.—This clause shall take
effect beginning with the 1997 crop year. Subject to
clause (ii) all catastrophic risk protection policies writ-
ten by local offices of the Department shall be trans-
ferred to the approved insurance provider for perform-
ance of all sales, service, and loss adjustment functions.
Any fees in connection with such policies that are
not yet collected at the time of the transfer shall be
payable to the approved insurance providers assuming
the policies. The transfer process for policies for the
1997 crop year with sales closing dates before January
1, 1997, shall begin at the time of the Secretary’s
announcement under clause (iii) and be completed by
the sales closing date for the crop and county. The
transfer process for all subsequent policies (including
policies for the 1998 and subsequent crop years) shall
H. R. 2854—57
begin at a date that permits the process to be com-
pleted not later than 45 days before the sales closing
date.’’.
(2) WAIVER OF MANDATORY LINKAGE.—Section 508(b)(7) of
the Federal Crop Insurance Act (7 U.S.C. 1508(b)(7)) is amend-
ed by striking subparagraph (A) and inserting the following:
‘‘(A) IN GENERAL.—Effective for the spring-planted 1996
and subsequent crops (and fall-planted 1996 crops at the
option of the Secretary), to be eligible for any payment
or loan under the Agricultural Market Transition Act, for
the conservation reserve program, or for any benefit
described in section 371 of the Consolidated Farm and
Rural Development Act (7 U.S.C. 2008f), a person shall—
‘‘(i) obtain at least the catastrophic level of insur-
ance for each crop of economic significance in which
the person has an interest; or
‘‘(ii) provide a written waiver to the Secretary that
waives any eligibility for emergency crop loss assist-
ance in connection with the crop.’’.
(3) SPECIAL RULE FOR 1996.—
(A) EFFECTIVE
PERIOD.—This paragraph shall apply
only to the 1996 crop year.
(B) AVAILABILITY.—During a period of not less than
2 weeks, but not more than 4 weeks, beginning on the
date of enactment of this title, the Secretary shall provide
producers with an opportunity to obtain catastrophic risk
protection insurance under section 508(b) of the Federal
Crop Insurance Act (7 U.S.C. 1508(b)) for a spring-planted
crop, and limited additional coverage for malting barley
under the Malting Barley Price and Quality Endorsement.
The Federal Crop Insurance Corporation may attach such
limitations and restrictions on obtaining insurance during
this period as the Corporation considers necessary to main-
tain the actuarial soundness of the crop insurance program.
(C) ATTACHMENT.—Insurance coverage under any pol-
icy obtained under this paragraph during the extended
sales period shall not attach until 10 days after the applica-
tion.
(D) CANCELLATION.—During the extended period, a
producer may cancel a catastrophic risk protection policy
if—
(i) the policy is a continuation of a policy that
was obtained for a previous crop year; and
(ii) the cancellation request is made before the
acreage reporting date for the policy for the 1996 crop
year.
(b) CROP INSURANCE PILOT PROJECT.—
(1) COVERAGE.—The Secretary of Agriculture shall develop
and administer a pilot project for crop insurance coverage that
indemnifies crop losses due to a natural disaster such as insect
infestation or disease.
(2) ACTUARIAL SOUNDNESS.—A pilot project under this para-
graph shall be actuarially sound, as determined by the Sec-
retary and administered at no net cost.
(3) DURATION.—A pilot project under this paragraph shall
be of two years’ duration.
H. R. 2854—58
(c) CROP INSURANCE FOR NURSERY CROPS.—Section 508(a)(6)
of the Federal Crop Insurance Act (7 U.S.C. 1508(a)(6)) is amended
by adding at the end the following:
‘‘(D) ADDITION OF NURSERY CROPS.—Not later than 2
years after the date of enactment of this subparagraph,
the Corporation shall conduct a study and limited pilot
program on the feasibility of insuring nursery crops.’’.
(d) MARKETING WINDOWS.—Section 508(j) of the Federal Crop
Insurance Act (7 U.S.C. 1508(j)) is amended by adding at the
end the following:
‘‘(4) MARKETING WINDOWS.—The Corporation shall consider
marketing windows in determining whether it is feasible to
require planting during a crop year.’’.
(e) FUNDING.—
(1) MANDATORY EXPENSES.—Section 516(a)(2) of the Federal
Crop Insurance Act (7 U.S.C. 1516(a)(2)) is amended—
(A) by inserting ‘‘and’’ at the end of subparagraph
(A);
(B) by striking ‘‘; and’’ at the end of subparagraph
(B) and inserting a period; and
(C) by striking subparagraph (C).
(2) FUNDING OF SALES COMMISSIONS.—Section 516(b) of the
Federal Crop Insurance Act (7 U.S.C. 1516(b)) is amended—
(A) in paragraph (1)—
(i) by striking ‘‘(A) IN GENERAL’’ and all that follows
through ‘‘subparagraph (B), in’’ and inserting ‘‘In’’; and
(ii) by striking subparagraph (B); and
(B) in paragraph (2)(B), by striking ‘‘subject to para-
graph (1)(B),’’.
(3) OTHER EXPENSES.—Section 516(b)(2)(A) of the Federal
Crop Insurance Act (7 U.S.C. 1516(b)(2)(A)) is amended by
striking ‘‘, noninsured assistance benefits,’’.
(f) LIMITATION ON MULTIPLE BENEFITS FOR SAME LOSS.—Sec-
tion 508 of the Federal Crop Insurance Act (7 U.S.C. 1508) is
amended by adding at the end the following:
‘‘(n) LIMITATION
ON MULTIPLE BENEFITS
FOR SAME LOSS.—
If a producer who is eligible to receive benefits under catastrophic
risk protection under subsection (b) is also eligible to receive assist-
ance for the same loss under any other program administered
by the Secretary, the producer shall be required to elect whether
to receive benefits under this title or under the other program,
but not both. A producer who purchases additional coverage under
subsection (c) may also receive assistance for the same loss under
other programs administered by the Secretary, except that the
amount received for the loss under the additional coverage together
with the amount received under the other programs may not exceed
the amount of the actual loss of the producer.’’.
SEC. 194. ESTABLISHMENT OF OFFICE OF RISK MANAGEMENT.
(a) ESTABLISHMENT.—The Department of Agriculture Reorga-
nization Act of 1994 is amended by inserting after section 226
(7 U.S.C. 6932) the following new section:
‘‘SEC. 226A. OFFICE OF RISK MANAGEMENT.
‘‘(a) ESTABLISHMENT.—Subject to subsection (e), the Secretary
shall establish and maintain in the Department an independent
Office of Risk Management.
H. R. 2854—59
‘‘(b) FUNCTIONS OF THE OFFICE OF RISK MANAGEMENT.—The
Office of Risk Management shall have jurisdiction over the following
functions:
‘‘(1) Supervision of the Federal Crop Insurance Corporation.
‘‘(2) Administration and oversight of all aspects, including
delivery through local offices of the Department, of all programs
authorized under the Federal Crop Insurance Act (7 U.S.C.
1501 et seq.).
‘‘(3) Any pilot or other programs involving revenue insur-
ance, risk management savings accounts, or the use of the
futures market to manage risk and support farm income that
may be established under the Federal Crop Insurance Act or
other law.
‘‘(4) Such other functions as the Secretary considers appro-
priate.
‘‘(c) ADMINISTRATOR.—
‘‘(1) APPOINTMENT.—The Office of Risk Management shall
be headed by an Administrator who shall be appointed by
the Secretary.
‘‘(2) MANAGER.—The Administrator of the Office of Risk
Management shall also serve as Manager of the Federal Crop
Insurance Corporation.
‘‘(d) RESOURCES.—
‘‘(1) FUNCTIONAL COORDINATION.—Certain functions of the
Office of Risk Management, such as human resources, public
affairs, and legislative affairs, may be provided by a consolida-
tion of such functions under the Under Secretary of Agriculture
for Farm and Foreign Agricultural Services.
‘‘(2) MINIMUM PROVISIONS.—Notwithstanding paragraph (1)
or any other provision of law or order of the Secretary, the
Secretary shall provide the Office of Risk Management with
human and capital resources sufficient for the Office to carry
out its functions in a timely and efficient manner.’’.
(b) FISCAL YEAR 1996 FUNDING.—From funds appropriated for
the salaries and expenses of the Consolidated Farm Service Agency
in the Agriculture, Rural Development, Food and Drug Administra-
tion, and Related Agencies Appropriations Act, 1996 (Public Law
104–37), the Secretary of Agriculture may use such sums as nec-
essary for the salaries and expenses of the Office of Risk Manage-
ment established under subsection (a).
(c) CONFORMING AMENDMENT.—Section 226(b) of the Act (7
U.S.C. 6932(b)) is amended by striking paragraph (2).
SEC. 195. REVENUE INSURANCE.
Section 508(h) of the Federal Crop Insurance Act (7 U.S.C.
1508(h)) is amended by adding at the end the following:
‘‘(9) REVENUE INSURANCE PILOT PROGRAM.—
‘‘(A) IN GENERAL.—Not later than December 31, 1996,
the Secretary shall carry out a pilot program in a limited
number of counties, as determined by the Secretary, for
crop years 1997, 1998, 1999, and 2000, under which a
producer of wheat, feed grains, soybeans, or such other
commodity as the Secretary considers appropriate may elect
to receive insurance against loss of revenue, as determined
by the Secretary.
‘‘(B) ADMINISTRATION.—Revenue insurance under this
paragraph shall—
H. R. 2854—60
‘‘(i) be offered through reinsurance arrangements
with private insurance companies;
‘‘(ii) offer at least a minimum level of coverage
that is an alternative to catastrophic crop insurance;
‘‘(iii) be actuarially sound; and
‘‘(iv) require the payment of premiums and
administrative fees by an insured producer.’’.
SEC. 196. ADMINISTRATION AND OPERATION OF NONINSURED CROP
ASSISTANCE PROGRAM.
(a) OPERATION AND ADMINISTRATION OF PROGRAM.—
(1) IN GENERAL.—In the case of an eligible crop described
in paragraph (2), the Secretary of Agriculture shall operate
a noninsured crop disaster assistance program to provide cov-
erage equivalent to the catastrophic risk protection otherwise
available under section 508(b) of the Federal Crop Insurance
Act (7 U.S.C. 1508(b)). The Secretary shall carry out this section
through the Consolidated Farm Service Agency (in this section
referred to as the ‘‘Agency’’).
(2) ELIGIBLE CROPS.—
(A) IN GENERAL.—In this section, the term ‘‘eligible
crop’’ means each commercial crop or other agricultural
commodity (except livestock)—
(i) for which catastrophic risk protection under
section 508(b) of the Federal Crop Insurance Act (7
U.S.C. 1508(b)) is not available; and
(ii) that is produced for food or fiber.
(B) CROPS SPECIFICALLY INCLUDED.—The term ‘‘eligible
crop’’ shall include floricultural, ornamental nursery, and
Christmas tree crops, turfgrass sod, seed crops, aquaculture
(including ornamental fish), and industrial crops.
(3) CAUSE OF LOSS.—To qualify for assistance under this
section, the losses of the noninsured commodity shall be due
to drought, flood, or other natural disaster, as determined by
the Secretary.
(b) APPLICATION
FOR NONINSURED CROP DISASTER ASSIST-
ANCE.—
(1) TIMELY
APPLICATION.—To be eligible for assistance
under this section, a producer shall submit an application for
noninsured crop disaster assistance at a local office of the
Department. The application shall be in such form, contain
such information, and be submitted at such time as the Sec-
retary may require.
(2) RECORDS.—A producer shall provide records, as required
by the Secretary, of crop acreage, acreage yields, and produc-
tion.
(3) ACREAGE REPORTS.—A producer shall provide reports
on acreage planted or prevented from being planted, as required
by the Secretary, by the designated acreage reporting date
for the crop and location as established by the Secretary.
(c) LOSS REQUIREMENTS.—
(1) REQUIRED AREA LOSS.—A producer of an eligible crop
shall not receive noninsured crop disaster assistance unless
the average yield for that crop, or an equivalent measure in
the event yield data are not available, in an area falls below
65 percent of the expected area yield, as established by the
Secretary.
H. R. 2854—61
(2) PREVENTED PLANTING.—Subject to paragraph (1), the
Secretary shall make a prevented planting noninsured crop
disaster assistance payment if the producer is prevented from
planting more than 35 percent of the acreage intended for
the eligible crop because of drought, flood, or other natural
disaster, as determined by the Secretary.
(3) REDUCED YIELDS.—Subject to paragraph (1), the Sec-
retary shall make a reduced yield noninsured crop disaster
assistance payment to a producer if the total quantity of the
eligible crop that the producer is able to harvest on any farm
is, because of drought, flood, or other natural disaster as deter-
mined by the Secretary, less than 50 percent of the expected
individual yield for the crop, as determined by the Secretary,
factored for the interest of the producer for the crop.
(d) PAYMENT.—The Secretary shall make available to a producer
eligible for noninsured assistance under this section a payment
computed by multiplying—
(1) the quantity that is less than 50 percent of the estab-
lished yield for the crop; by
(2)(A) in the case of each of the 1996 through 1998 crop
years, 60 percent of the average market price for the crop
(or any comparable coverage determined by the Secretary);
or
(B) in the case of each of the 1999 and subsequent crop
years, 55 percent of the average market price for the crop
(or any comparable coverage determined by the Secretary);
by
(3) a payment rate for the type of crop (as determined
by the Secretary) that—
(A) in the case of a crop that is produced with a
significant and variable harvesting expense, reflects the
decreasing cost incurred in the production cycle for the
crop that is—
(i) harvested;
(ii) planted but not harvested; and
(iii) prevented from being planted because of
drought, flood, or other natural disaster (as determined
by the Secretary); and
(B) in the case of a crop that is not produced with
a significant and variable harvesting expense, as deter-
mined by the Secretary.
(e) YIELD DETERMINATIONS.—
(1) ESTABLISHMENT.—The Secretary shall establish farm
yields for purposes of providing noninsured crop disaster assist-
ance under this section.
(2) ACTUAL
PRODUCTION
HISTORY.—The Secretary shall
determine yield coverage using the actual production history
of the producer over a period of not less than the 4 previous
consecutive crop years and not more than 10 consecutive crop
years. Subject to paragraph (3), the yield for the year in which
noninsured crop disaster assistance is sought shall be equal
to the average of the actual production history of the producer
during the period considered.
(3) ASSIGNMENT OF YIELD.—If a producer does not submit
adequate documentation of production history to determine a
crop yield under paragraph (2), the Secretary shall assign to
the producer a yield equal to not less than 65 percent of
H. R. 2854—62
the transitional yield of the producer (adjusted to reflect actual
production reflected in the records acceptable to the Secretary
for continuous years), as specified in regulations issued by
the Secretary based on production history requirements.
(4) PROHIBITION ON ASSIGNED YIELDS IN CERTAIN COUN-
TIES.—
(A) IN GENERAL.—
(i) DOCUMENTATION.—If sufficient data are avail-
able to demonstrate that the acreage of a crop in
a county for the crop year has increased by more
than 100 percent over any year in the preceding 7
crop years or, if data are not available, if the acreage
of the crop in the county has increased significantly
from the previous crop years, a producer must provide
such detailed documentation of production costs, acres
planted, and yield for the crop year for which benefits
are being claimed as is required by the Secretary.
If the Secretary determines that the documentation
provided is not sufficient, the Secretary may require
documenting proof that the crop, had the crop been
harvested, could have been marketed at a reasonable
price.
(ii) PROHIBITION.—Except as provided in subpara-
graph (B), a producer who produces a crop on a farm
located in a county described in clause (i) may not
obtain an assigned yield.
(B) EXCEPTION.—A crop or a producer shall not be
subject to this subsection if—
(i) the planted acreage of the producer for the
crop has been inspected by a third party acceptable
to the Secretary; or
(ii)(I) the County Executive Director and the State
Executive Director recommend an exemption from the
requirement to the Administrator of the Agency; and
(II) the Administrator approves the recommenda-
tion.
(5) LIMITATION
ON
RECEIPT
OF
SUBSEQUENT
ASSIGNED
YIELD.—A producer who receives an assigned yield for the cur-
rent year of a natural disaster because required production
records were not submitted to the local office of the Department
shall not be eligible for an assigned yield for the year of the
next natural disaster unless the required production records
of the previous 1 or more years (as applicable) are provided
to the local office.
(6) YIELD VARIATIONS DUE TO DIFFERENT FARMING PRAC-
TICES.—The Secretary shall ensure that noninsured crop disas-
ter assistance accurately reflects significant yield variations
due to different farming practices, such as between irrigated
and nonirrigated acreage.
(f) CONTRACT PAYMENTS.—A producer who has received a
guaranteed payment for production, as opposed to delivery, of a
crop pursuant to a contract shall have the production of the pro-
ducer adjusted upward by the amount of the production equal
to the amount of the contract payment received.
(g) USE OF COMMODITY CREDIT CORPORATION.—The Secretary
may use the funds of the Commodity Credit Corporation to carry
out this section.
H. R. 2854—63
(h) EXCLUSIONS.—Noninsured crop disaster assistance under
this section shall not cover losses due to—
(1) the neglect or malfeasance of the producer;
(2) the failure of the producer to reseed to the same crop
in those areas and under such circumstances where it is cus-
tomary to reseed; or
(3) the failure of the producer to follow good farming prac-
tices, as determined by the Secretary.
(i) PAYMENT AND INCOME LIMITATIONS.—
(1) DEFINITIONS.—In this subsection:
(A) PERSON.—The term ‘‘person’’ has the meaning pro-
vided the term in regulations issued by the Secretary.
The regulations shall conform, to the extent practicable,
to the regulations defining the term ‘‘person’’ issued under
section 1001 of the Food Security Act of 1985 (7 U.S.C.
1308).
(B) QUALIFYING GROSS REVENUES.—The term ‘‘qualify-
ing gross revenues’’ means—
(i) if a majority of the gross revenue of the person
is received from farming, ranching, and forestry oper-
ations, the gross revenue from the farming, ranching,
and forestry operations of the person; and
(ii) if less than a majority of the gross revenue
of the person is received from farming, ranching, and
forestry operations, the gross revenue of the person
from all sources.
(2) PAYMENT LIMITATION.—The total amount of payments
that a person shall be entitled to receive annually under this
section may not exceed $100,000.
(3) LIMITATION ON MULTIPLE BENEFITS FOR SAME LOSS.—
If a producer who is eligible to receive benefits under this
section is also eligible to receive assistance for the same loss
under any other program administered by the Secretary, the
producer shall be required to elect whether to receive benefits
under this section or under the other program, but not both.
(4) INCOME LIMITATION.—A person who has qualifying gross
revenues in excess of the amount specified in section 2266(a)
of the Food, Agriculture, Conservation, and Trade Act of 1990
(7 U.S.C. 1421 note) (as in effect on November 28, 1990) during
the taxable year (as determined by the Secretary) shall not
be eligible to receive any noninsured assistance payment under
this section.
(5) REGULATIONS.—The Secretary shall issue regulations
prescribing such rules as the Secretary determines necessary
to ensure a fair and equitable application of section 1001 of
the Food Security Act of 1985 (7 U.S.C. 1308), the general
payment limitation regulations of the Secretary, and the limita-
tions established under this subsection.
(j) CONFORMING REPEAL.—Section 519 of the Federal Crop
Insurance Act (7 U.S.C. 1519) is repealed.
H. R. 2854—64
TITLE II—AGRICULTURAL TRADE
Subtitle A—Amendments to Agricultural
Trade Development and Assistance Act
of 1954 and Related Statutes
SEC. 201. FOOD AID TO DEVELOPING COUNTRIES.
(a) IN GENERAL.—Section 3 of the Agricultural Trade Develop-
ment and Assistance Act of 1954 (7 U.S.C. 1691a) is amended
to read as follows:
‘‘SEC. 3. FOOD AID TO DEVELOPING COUNTRIES.
‘‘(a) POLICY.—In light of the Uruguay Round Agreement on
Agriculture and the Ministerial Decision on Measures Concerning
the Possible Negative Effects of the Reform Program on Least-
Developed and Net-Food Importing Developing Countries, the
United States reaffirms the commitment of the United States to
providing food aid to developing countries.
‘‘(b) SENSE OF CONGRESS.—It is the sense of Congress that—
‘‘(1) the President should initiate consultations with other
donor nations to consider appropriate levels of food aid commit-
ments to meet the legitimate needs of developing countries;
and
‘‘(2) the United States should increase its contribution of
bona fide food assistance to developing countries consistent
with the Agreement on Agriculture.’’.
(b) CONFORMING AMENDMENT.—Section 411 of the Uruguay
Round Agreements Act is amended by striking subsection (e) (19
U.S.C. 3611).
SEC. 202. TRADE AND DEVELOPMENT ASSISTANCE.
Section 101 of the Agricultural Trade Development and Assist-
ance Act of 1954 (7 U.S.C. 1701) is amended—
(1) by striking ‘‘developing countries’’ each place it appears
and inserting ‘‘developing countries and private entities’’; and
(2) in subsection (b), by inserting ‘‘and entities’’ before
the period at the end.
SEC. 203. AGREEMENTS REGARDING ELIGIBLE COUNTRIES AND PRI-
VATE ENTITIES.
Section 102 of the Agricultural Trade Development and Assist-
ance Act of 1954 (7 U.S.C. 1702) is amended to read as follows:
‘‘SEC. 102. AGREEMENTS REGARDING ELIGIBLE COUNTRIES AND PRI-
VATE ENTITIES.
‘‘(a) PRIORITY.—In selecting agreements to be entered into under
this title, the Secretary shall give priority to agreements providing
for the export of agricultural commodities to developing countries
that—
‘‘(1) have the demonstrated potential to become commercial
markets for competitively priced United States agricultural
commodities;
‘‘(2) are undertaking measures for economic development
purposes to improve food security and agricultural development,
alleviate poverty, and promote broad-based equitable and
sustainable development; and
H. R. 2854—65
‘‘(3) demonstrate the greatest need for food.
‘‘(b) PRIVATE ENTITIES.—An agreement entered into under this
title with a private entity shall require such security, or such
other provisions as the Secretary determines necessary, to provide
reasonable and adequate assurance of repayment of the financing
extended to the private entity.
‘‘(c) AGRICULTURAL MARKET DEVELOPMENT PLAN.—
‘‘(1) DEFINITION OF AGRICULTURAL TRADE ORGANIZATION.—
In this subsection, the term ‘agricultural trade organization’
means a United States agricultural trade organization that
promotes the export and sale of a United States agricultural
commodity and that does not stand to profit directly from
the specific sale of the commodity.
‘‘(2) PLAN.—The Secretary shall consider a developing coun-
try for which an agricultural market development plan has
been approved under this subsection to have the demonstrated
potential to become a commercial market for competitively
priced United States agricultural commodities for the purpose
of granting a priority under subsection (a).
‘‘(3) REQUIREMENTS.—
‘‘(A) IN GENERAL.—To be approved by the Secretary,
an agricultural market development plan shall—
‘‘(i) be submitted by a developing country or private
entity, in conjunction with an agricultural trade
organization;
‘‘(ii) describe a project or program for the develop-
ment and expansion of a commercial market for a
United States agricultural commodity in a developing
country, and the economic development of the country,
using funds derived from the sale of agricultural
commodities received under an agreement described
in section 101;
‘‘(iii) provide for any matching funds that are
required by the Secretary for the project or program;
‘‘(iv) provide for a results-oriented means of meas-
uring the success of the project or program; and
‘‘(v) provide for graduation to the use of non-Fed-
eral funds to carry out the project or program, consist-
ent with requirements established by the Secretary.
‘‘(B) AGRICULTURAL TRADE ORGANIZATION.—The project
or program shall be designed and carried out by the agricul-
tural trade organization.
‘‘(C) ADDITIONAL REQUIREMENTS.—An agricultural mar-
ket development plan shall contain such additional require-
ments as are determined necessary by the Secretary.
‘‘(4) ADMINISTRATIVE COSTS.—
‘‘(A) IN
GENERAL.—The Secretary may make funds
made available to carry out this title available for the
reimbursement of administrative expenses incurred by
agricultural trade organizations in developing, implement-
ing, and administering agricultural market development
plans, subject to such requirements and in such amounts
as the Secretary considers appropriate.
‘‘(B) DURATION.—The funds may be made available
to agricultural trade organizations for the duration of the
applicable agricultural market development plan.
H. R. 2854—66
‘‘(C) TERMINATION.—The Secretary may terminate
assistance made available under this subsection if the agri-
cultural trade organization is not carrying out the approved
agricultural market development plan.’’.
SEC. 204. TERMS AND CONDITIONS OF SALES.
Section 103 of the Agricultural Trade Development and Assist-
ance Act of 1954 (7 U.S.C. 1703) is amended—
(1) in subsection (a)(2)(A)—
(A) by striking ‘‘a recipient country to make’’; and
(B) by striking ‘‘such country’’ and inserting ‘‘the appro-
priate country’’;
(2) in subsection (c), by striking ‘‘less than 10 nor’’; and
(3) in subsection (d)—
(A) by striking ‘‘recipient country’’ and inserting ‘‘devel-
oping country or private entity’’; and
(B) by striking ‘‘7’’ and inserting ‘‘5’’.
SEC. 205. USE OF LOCAL CURRENCY PAYMENT.
Section 104 of the Agricultural Trade Development and Assist-
ance Act of 1954 (7 U.S.C. 1704) is amended—
(1) in subsection (a), by striking ‘‘recipient country’’ and
inserting ‘‘developing country or private entity’’; and
(2) in subsection (c)—
(A) by striking ‘‘recipient country’’ each place it appears
and inserting ‘‘appropriate developing country’’; and
(B) in paragraph (3), by striking ‘‘recipient countries’’
and inserting ‘‘appropriate developing countries’’.
SEC. 206. VALUE-ADDED FOODS.
Section 105 of the Agricultural Trade Development and Assist-
ance Act of 1954 (7 U.S.C. 1705) is repealed.
SEC. 207. ELIGIBLE ORGANIZATIONS.
(a) IN GENERAL.—Section 202 of the Agricultural Trade Devel-
opment and Assistance Act of 1954 (7 U.S.C. 1722) is amended—
(1) by striking subsection (b) and inserting the following:
‘‘(b) NONEMERGENCY ASSISTANCE.—
‘‘(1) IN GENERAL.—The Administrator may provide agricul-
tural commodities for nonemergency assistance under this title
through eligible organizations (as described in subsection (d))
that have entered into an agreement with the Administrator
to use the commodities in accordance with this title.
‘‘(2) LIMITATION.—The Administrator may not deny a
request for funds submitted under this subsection because the
program for which the funds are requested—
‘‘(A) would be carried out by the eligible organization
in a foreign country in which the Agency for International
Development does not have a mission, office, or other pres-
ence; or
‘‘(B) is not part of a development plan for the country
prepared by the Agency.’’; and
(2) in subsection (e)—
(A) in the subsection heading, by striking ‘‘PRIVATE
VOLUNTARY
ORGANIZATIONS
AND
COOPERATIVES’’ 
and
inserting ‘‘ELIGIBLE ORGANIZATIONS’’;
(B) in paragraph (1)—
H. R. 2854—67
(i) 
by 
striking 
‘‘$13,500,000’’ 
and 
inserting
‘‘$28,000,000’’; and
(ii) by striking ‘‘private voluntary organizations
and cooperatives to assist such organizations and
cooperatives’’ and inserting ‘‘eligible organizations
described in subsection (d), to assist the organizations’’;
(C) by striking paragraph (2) and inserting the follow-
ing:
‘‘(2) REQUEST FOR FUNDS.—To receive funds made available
under paragraph (1), an eligible organization described in sub-
section (d) shall submit a request for the funds that is subject
to approval by the Administrator.’’; and
(D) in paragraph (3), by striking ‘‘a private voluntary
organization or cooperative, the Administrator may provide
assistance to that organization or cooperative’’ and insert-
ing ‘‘an eligible organization, the Administrator may pro-
vide assistance to the eligible organization’’.
(b) CONFORMING AMENDMENTS.—Section 207 of the Agricultural
Trade Development and Assistance Act of 1954 (7 U.S.C. 1726a)
is amended—
(1) in subsection (a)(1), by striking ‘‘a private voluntary
organization or cooperative’’ each place it appears and inserting
‘‘an eligible organization’’; and
(2) in subsection (b)—
(A) in paragraph (1), by striking ‘‘private voluntary
organizations and cooperatives’’ and inserting ‘‘eligible
organizations’’; and
(B) in paragraph (2), by striking ‘‘organizations,
cooperatives,’’ and inserting ‘‘eligible organizations’’.
SEC. 208. GENERATION AND USE OF FOREIGN CURRENCIES.
Section 203 of the Agricultural Trade Development and Assist-
ance Act of 1954 (7 U.S.C. 1723) is amended—
(1) in subsection (a), by inserting ‘‘, or in a country in
the same region,’’ after ‘‘in the recipient country’’;
(2) in subsection (b)—
(A) by inserting ‘‘or in countries in the same region,’’
after ‘‘in recipient countries,’’; and
(B) by striking ‘‘10 percent’’ and inserting ‘‘15 percent’’;
(3) in subsection (c), by inserting ‘‘or in a country in the
same region,’’ after ‘‘in the recipient country,’’; and
(4) in subsection (d)(2), by inserting ‘‘or within a country
in the same region’’ after ‘‘within the recipient country’’.
SEC. 209. GENERAL LEVELS OF ASSISTANCE UNDER PUBLIC LAW 480.
Section 204 of the Agricultural Trade Development and Assist-
ance Act of 1954 (7 U.S.C. 1724) is amended—
(1) in subsection (a)—
(A) in paragraph (1), by striking ‘‘amount that’’ and
all that follows through the period at the end and inserting
‘‘amount that for each of fiscal years 1996 through 2002
is not less than 2,025,000 metric tons.’’;
(B) in paragraph (2), by striking ‘‘amount that’’ and
all that follows through the period at the end and inserting
‘‘amount that for each of fiscal years 1996 through 2002
is not less than 1,550,000 metric tons.’’; and
H. R. 2854—68
(C) in paragraph (3), by adding at the end the following:
‘‘No waiver shall be made before the beginning of the
applicable fiscal year.’’; and
(2) in subsection (b)(1), by inserting before the period at
the end the following: ‘‘and that not less than 50 percent
of the quantity of the bagged commodities that are whole grain
commodities be bagged in the United States’’.
SEC. 210. FOOD AID CONSULTATIVE GROUP.
Section 205 of the Agricultural Trade Development and Assist-
ance Act of 1954 (7 U.S.C. 1725) is amended—
(1) in subsection (a), by striking ‘‘private voluntary
organizations, cooperatives and indigenous non-governmental
organizations’’ and inserting ‘‘eligible organizations described
in section 202(d)(1)’’;
(2) in subsection (b)—
(A) in paragraph (2), by striking ‘‘for International
Affairs and Commodity Programs’’ and inserting ‘‘of Agri-
culture for Farm and Foreign Agricultural Services’’;
(B) in paragraph (4), by striking ‘‘and’’ at the end;
(C) in paragraph (5), by striking the period at the
end and inserting ‘‘; and’’; and
(D) by adding at the end the following:
‘‘(6) representatives from agricultural producer groups in
the United States.’’;
(3) in the second sentence of subsection (d), by inserting
‘‘(but at least twice per year)’’ after ‘‘when appropriate’’; and
(4) in subsection (f), by striking ‘‘1995’’ and inserting ‘‘2002’’.
SEC. 211. SUPPORT OF NONGOVERNMENTAL ORGANIZATIONS.
(a) IN GENERAL.—Section 306(b) of the Agricultural Trade
Development and Assistance Act of 1954 (7 U.S.C. 1727e(b)) is
amended—
(1) in the subsection heading, by striking ‘‘INDIGENOUS
NON-GOVERNMENTAL’’ and inserting ‘‘NONGOVERNMENTAL’’; and
(2) by striking ‘‘utilization of indigenous’’ and inserting
‘‘utilization of’’.
(b) CONFORMING AMENDMENT.—Section 402 of the Agricultural
Trade Development and Assistance Act of 1954 (7 U.S.C. 1732)
is amended by striking paragraph (6) and inserting the following:
‘‘(6) NONGOVERNMENTAL
ORGANIZATION.—The term ‘non-
governmental organization’ means an organization that works
at the local level to solve development problems in a foreign
country in which the organization is located, except that the
term does not include an organization that is primarily an
agency or instrumentality of the government of the foreign
country.’’.
SEC. 212. COMMODITY DETERMINATIONS.
Section 401 of the Agricultural Trade Development and Assist-
ance Act of 1954 (7 U.S.C. 1731) is amended—
(1) by striking subsections (a) through (d) and inserting
the following:
‘‘(a) AVAILABILITY OF COMMODITIES.—No agricultural commod-
ity shall be available for disposition under this Act if the Secretary
determines that the disposition would reduce the domestic supply
of the commodity below the supply needed to meet domestic require-
ments and provide adequate carryover (as determined by the Sec-
H. R. 2854—69
retary), unless the Secretary determines that some part of the
supply should be used to carry out urgent humanitarian purposes
under this Act.’’;
(2) by redesignating subsections (e) and (f) as subsections
(b) and (c), respectively; and
(3) in subsection (c) (as so redesignated), by striking ‘‘(e)(1)’’
and inserting ‘‘(b)(1)’’.
SEC. 213. GENERAL PROVISIONS.
Section 403 of the Agricultural Trade Development and Assist-
ance Act of 1954 (7 U.S.C. 1733) is amended—
(1) in subsection (b)—
(A) in the subsection heading, by striking ‘‘CONSULTA-
TIONS’’ and inserting ‘‘IMPACT
ON LOCAL FARMERS
AND
ECONOMY’’; and
(B) by striking ‘‘consult with’’ and all that follows
through ‘‘other donor organizations to’’;
(2) in subsection (c)—
(A) by striking ‘‘from countries’’; and
(B) by striking ‘‘for use’’ and inserting ‘‘or use’’;
(3) in subsection (f)—
(A) by inserting ‘‘or private entities, as appropriate,’’
after ‘‘from countries’’; and
(B) by inserting ‘‘or private entities’’ after ‘‘such coun-
tries’’; and
(4) in subsection (i)(2), by striking subparagraph (C).
SEC. 214. AGREEMENTS.
Section 404 of the Agricultural Trade Development and Assist-
ance Act of 1954 (7 U.S.C. 1734) is amended—
(1) in subsection (a), by inserting ‘‘with foreign countries’’
after ‘‘Before entering into agreements’’;
(2) in subsection (b)(2)—
(A) by inserting ‘‘with foreign countries’’ after ‘‘with
respect to agreements entered into’’; and
(B) by inserting before the semicolon at the end the
following: ‘‘and broad-based economic growth’’; and
(3) in subsection (c), by striking paragraph (1) and inserting
the following:
‘‘(1) IN
GENERAL.—Agreements to provide assistance on
a multi-year basis to recipient countries or to eligible organiza-
tions—
‘‘(A) may be made available under titles I and III;
and
‘‘(B) shall be made available under title II.’’.
SEC. 215. USE OF COMMODITY CREDIT CORPORATION.
Section 406 of the Agricultural Trade Development and Assist-
ance Act of 1954 (7 U.S.C. 1736) is amended—
(1) in subsection (a), by striking ‘‘shall’’ and inserting ‘‘may’’;
and
(2) in subsection (b)—
(A) by striking ‘‘this Act’’ and inserting ‘‘titles II and
III’’; and
(B) by striking paragraph (4) and inserting the follow-
ing:
H. R. 2854—70
‘‘(4) the vessel freight charges from United States ports
or designated Canadian transshipment ports, as determined
by the Secretary, to designated ports of entry abroad;’’.
SEC. 216. ADMINISTRATIVE PROVISIONS.
Section 407 of the Agricultural Trade Development and Assist-
ance Act of 1954 (7 U.S.C. 1736a) is amended—
(1) in subsection (a)—
(A) in paragraph (1), by inserting ‘‘or private entity
that enters into an agreement under title I’’ after ‘‘import-
ing country’’; and
(B) in paragraph (2), by adding at the end the following:
‘‘Resulting contracts may contain such terms and conditions
as the Secretary determines are necessary and appro-
priate.’’;
(2) in subsection (c)—
(A) in paragraph (1)(A), by inserting ‘‘importer or’’
before ‘‘importing country’’; and
(B) in paragraph (2)(A), by inserting ‘‘importer or’’
before ‘‘importing country’’;
(3) in subsection (d)—
(A) by striking paragraph (2) and inserting the follow-
ing:
‘‘(2) FREIGHT PROCUREMENT.—Notwithstanding the Federal
Property and Administrative Services Act of 1949 (40 U.S.C.
471 et seq.) or other similar provisions of law relating to the
making or performance of Federal Government contracts, ocean
transportation under titles II and III may be procured on
the basis of full and open competitive procedures. Resulting
contracts may contain such terms and conditions as the
Administrator determines are necessary and appropriate.’’; and
(B) by striking paragraph (4);
(4) in subsection (g)(2)—
(A) in subparagraph (B), by striking ‘‘and’’ at the end;
(B) in subparagraph (C), by striking the period at
the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(D) an assessment of the progress towards achieving
food security in each country receiving food assistance from
the United States Government, with special emphasis on
the nutritional status of the poorest populations in each
country.’’; and
(5) by striking subsection (h).
SEC. 217. EXPIRATION DATE.
Section 408 of the Agricultural Trade Development and Assist-
ance Act of 1954 (7 U.S.C. 1736b) is amended by striking ‘‘1995’’
and inserting ‘‘2002’’.
SEC. 218. REGULATIONS.
Section 409 of the Agricultural Trade Development and Assist-
ance Act of 1954 (7 U.S.C. 1736c) is repealed.
SEC. 219. INDEPENDENT EVALUATION OF PROGRAMS.
Section 410 of the Agricultural Trade Development and Assist-
ance Act of 1954 (7 U.S.C. 1736d) is repealed.
H. R. 2854—71
SEC. 220. AUTHORIZATION OF APPROPRIATIONS.
Section 412 of the Agricultural Trade Development and Assist-
ance Act of 1954 (7 U.S.C. 1736f) is amended—
(1) by striking subsections (b) and (c) and inserting the
following:
‘‘(b) TRANSFER OF FUNDS.—
‘‘(1) IN
GENERAL.—Except as provided in paragraph (2)
and notwithstanding any other provision of law, the President
may direct that up to 15 percent of the funds available for
any fiscal year for carrying out any title of this Act be used
to carry out any other title of this Act.
‘‘(2) TITLE III FUNDS.—The President may direct that up
to 50 percent of the funds available for any fiscal year for
carrying out title III be used to carry out title II.’’; and
(2) by redesignating subsections (d) and (e) as subsections
(c) and (d), respectively.
SEC. 221. COORDINATION OF FOREIGN ASSISTANCE PROGRAMS.
Section 413 of the Agricultural Trade Development and Assist-
ance Act of 1954 (7 U.S.C. 1736g) is amended by striking ‘‘this
Act’’ each place it appears and inserting ‘‘title III’’.
SEC. 222. MICRONUTRIENT FORTIFICATION PILOT PROGRAM.
Title IV of the Agricultural Trade Development and Assistance
Act of 1954 (7 U.S.C. 1731 et seq.) is amended by adding at
the end the following:
‘‘SEC. 415. MICRONUTRIENT FORTIFICATION PILOT PROGRAM.
‘‘(a) IN GENERAL.—Subject to the availability of practical tech-
nology and to cost effectiveness, not later than September 30, 1997,
the Secretary, in consultation with the Administrator, shall estab-
lish a micronutrient fortification pilot program under this Act.
The purpose of the program shall be to—
‘‘(1) assist developing countries in correcting micronutrient
dietary deficiencies among segments of the populations of the
countries; and
‘‘(2) encourage the development of technologies for the for-
tification of whole grains and other commodities that are readily
transferable to developing countries.
‘‘(b) SELECTION
OF PARTICIPATING COUNTRIES.—From among
the countries eligible for assistance under this Act, the Secretary
may select not more than 5 developing countries to participate
in the pilot program.
‘‘(c) FORTIFICATION.—Under the pilot program, whole grains
and other commodities made available to a developing country
selected to participate in the pilot program may be fortified with
1 or more micronutrients (including vitamin A, iron, and iodine)
with respect to which a substantial portion of the population in
the country is deficient. The commodity may be fortified in the
United States or in the developing country.
‘‘(d) TERMINATION OF AUTHORITY.—The authority to carry out
the pilot program established under this section shall terminate
on September 30, 2002.’’.
SEC. 223. USE OF CERTAIN LOCAL CURRENCY.
Title IV of the Agricultural Trade Development and Assistance
Act of 1954 (7 U.S.C. 1731 et seq.) (as amended by section 222)
is amended by adding at the end the following:
H. R. 2854—72
‘‘SEC. 416. USE OF CERTAIN LOCAL CURRENCY.
‘‘Local currency payments received by the United States pursu-
ant to agreements entered into under title I (as in effect on Novem-
ber 27, 1990) may be utilized by the Secretary in accordance with
section 108 (as in effect on November 27, 1990).’’.
SEC. 224. FARMER-TO-FARMER PROGRAM.
Section 501 of the Agricultural Trade Development and Assist-
ance Act of 1954 (7 U.S.C. 1737) is amended—
(1) in subsection (a), by striking paragraph (6) and inserting
the following:
‘‘(6) to the extent that local currencies can be used to
meet the costs of a program established under this section,
augment funds of the United States that are available for
such a program through the use of foreign currencies that
accrue from the sale of agricultural commodities under this
Act, and local currencies generated from other types of foreign
assistance activities, within the country where the program
is being conducted.’’; and
(2) in subsection (c)—
(A) by striking ‘‘0.2’’ and inserting ‘‘0.4’’;
(B) by striking ‘‘1991 through 1995’’ and inserting
‘‘1996 through 2002’’; and
(C) by striking ‘‘0.1’’ and inserting ‘‘0.2’’.
SEC. 225. FOOD SECURITY COMMODITY RESERVE.
(a) IN GENERAL.—Title III of the Agricultural Act of 1980
(7 U.S.C. 1736f–1 et seq.) is amended to read as follows:
‘‘TITLE III—FOOD SECURITY
COMMODITY RESERVE
‘‘SEC. 301. SHORT TITLE.
‘‘This title may be cited as the ‘Food Security Commodity
Reserve Act of 1996’.
‘‘SEC. 302. ESTABLISHMENT OF COMMODITY RESERVE.
‘‘(a) IN GENERAL.—To provide for a reserve solely to meet
emergency humanitarian food needs in developing countries, the
Secretary of Agriculture (referred to in this title as the ‘Secretary’)
shall establish a reserve stock of wheat, rice, corn, or sorghum,
or any combination of the commodities, totaling not more than
4,000,000 metric tons for use as described in subsection (c).
‘‘(b) COMMODITIES IN RESERVE.—
‘‘(1) IN GENERAL.—The reserve established under this sec-
tion shall consist of—
‘‘(A) wheat in the reserve established under the Food
Security Wheat Reserve Act of 1980 as of the date of
enactment of the Federal Agriculture Improvement and
Reform Act of 1996;
‘‘(B) wheat, rice, corn, and sorghum (referred to in
this section as ‘eligible commodities’) acquired in accord-
ance with paragraph (2) to replenish eligible commodities
released from the reserve, including wheat to replenish
wheat released from the reserve established under the
Food Security Wheat Reserve Act of 1980 but not replen-
H. R. 2854—73
ished as of the date of enactment of the Federal Agriculture
Improvement and Reform Act of 1996; and
‘‘(C) such rice, corn, and sorghum as the Secretary
may, at such time and in such manner as the Secretary
determines appropriate, acquire as a result of exchanging
an equivalent value of wheat in the reserve established
under this section.
‘‘(2) REPLENISHMENT OF RESERVE.—
‘‘(A) IN GENERAL.—Subject to subsection (h), commod-
ities of equivalent value to eligible commodities in the
reserve established under this section may be acquired—
‘‘(i) through purchases—
‘‘(I) from producers; or
‘‘(II) in the market, if the Secretary determines
that the purchases will not unduly disrupt the
market; or
‘‘(ii) by designation by the Secretary of stocks of
eligible commodities of the Commodity Credit Corpora-
tion.
‘‘(B) FUNDS.—Any use of funds to acquire eligible
commodities through purchases from producers or in the
market to replenish the reserve must be authorized in
an appropriations Act.
‘‘(c) RELEASE OF ELIGIBLE COMMODITIES.—
‘‘(1) EMERGENCY ASSISTANCE.—
‘‘(A) IN GENERAL.—Notwithstanding paragraph (2), to
meet unanticipated need, the Secretary may release eligible
commodities in any fiscal year, without regard to the avail-
ability of domestic supply of the commodities, to provide
emergency assistance to developing countries under title
II of the Agricultural Trade Development and Assistance
Act of 1954 (7 U.S.C. 1721 et seq.).
‘‘(B) RELEASE
FOR
EMERGENCY
ASSISTANCE.—If the
eligible commodities needed to meet unanticipated need
cannot be made available in a timely manner under normal
means for obtaining eligible commodities for food assistance
because of unanticipated need for emergency assistance
as provided under section 202(a) of the Agricultural Trade
Development and Assistance Act of 1954 (7 U.S.C. 1722(a)),
the Secretary may in any fiscal year release from the
reserve—
‘‘(i) up to 500,000 metric tons of wheat or the
equivalent value of eligible commodities other than
wheat; and
‘‘(ii) up to 500,000 metric tons of any eligible
commodities under this paragraph that could have
been released but were not released in prior fiscal
years.
‘‘(C) WAIVER OF MINIMUM TONNAGE REQUIREMENTS.—
Nothing in this paragraph shall require a waiver under
section 204(a)(3) of the Agricultural Trade Development
and Assistance Act of 1954 (7 U.S.C. 1724(a)(3)) as a pre-
requisite for the release of eligible commodities under this
paragraph.
‘‘(2) EMERGENCY FOOD ASSISTANCE.—Notwithstanding any
other provision of law, eligible commodities designated or
acquired for the reserve established under this section may