HR 2646 EAS/PP
Act of 1996 (7 U.S.C. 7272) is amended by striking sub-
section (g).
(e) IN-PROCESS SUGAR.—Section 156 of the Federal
Agriculture Improvement and Reform Act of 1996 (7 U.S.C.
7272) (as amended by subsections (c) and (d)) is amended
by inserting after subsection (e) the following:
‘‘(f) LOANS FOR IN-PROCESS SUGAR.—
‘‘(1) DEFINITION OF IN-PROCESS SUGARS AND
SYRUPS.—In this subsection, the term ‘in-process sug-
ars and syrups’ does not include raw sugar, liquid
sugar, invert sugar, invert syrup, or other finished
product that is otherwise eligible for a loan under
subsection (a) or (b).
‘‘(2) AVAILABILITY.—The Secretary shall make
nonrecourse loans available to processors of a crop of
domestically grown sugarcane and sugar beets for in-
process sugars and syrups derived from the crop.
‘‘(3) LOAN RATE.—The loan rate shall be equal
to 80 percent of the loan rate applicable to raw cane
sugar or refined beet sugar, as determined by the Sec-
retary on the basis of the source material for the in-
process sugars and syrups.
‘‘(4) FURTHER PROCESSING ON FORFEITURE.—
‘‘(A) IN GENERAL.—As a condition of the
forfeiture of in-process sugars and syrups serving
HR 2646 EAS/PP
as collateral for a loan under paragraph (2), the
processor shall, within such reasonable time pe-
riod as the Secretary may prescribe and at no
cost to the Commodity Credit Corporation, con-
vert the in-process sugars and syrups into raw
cane sugar or refined beet sugar of acceptable
grade and quality for sugars eligible for loans
under subsection (a) or (b).
‘‘(B) TRANSFER
TO
CORPORATION.—Once
the in-process sugars and syrups are fully proc-
essed into raw cane sugar or refined beet sugar,
the processor shall transfer the sugar to the Com-
modity Credit Corporation.
‘‘(C) PAYMENT TO PROCESSOR.—On trans-
fer of the sugar, the Secretary shall make a pay-
ment to the processor in an amount equal to the
amount obtained by multiplying—
‘‘(i) the difference between—
‘‘(I) the loan rate for raw cane
sugar or refined beet sugar, as appro-
priate; and
‘‘(II) the loan rate the processor
received under paragraph (3); by
‘‘(ii) the quantity of sugar transferred
to the Secretary.
HR 2646 EAS/PP
‘‘(5) LOAN CONVERSION.—If the processor does
not forfeit the collateral as described in paragraph
(4), but instead further processes the in-process sugars
and syrups into raw cane sugar or refined beet sugar
and repays the loan on the in-process sugars and syr-
ups, the processor may obtain a loan under subsection
(a) or (b) for the raw cane sugar or refined beet
sugar, as appropriate.’’.
(f) ADMINISTRATION OF PROGRAM.—Section 156 of the
Federal Agriculture Improvement and Reform Act of 1996
(7 U.S.C. 7272) (as amended by subsection (e)) is amended
by inserting after subsection (f) the following:
‘‘(g) AVOIDING FORFEITURES; CORPORATION INVEN-
TORY DISPOSITION.—
‘‘(1) IN GENERAL.—Subject to subsection (e)(3),
to the maximum extent practicable, the Secretary
shall operate the program established under this sec-
tion at no cost to the Federal Government by avoid-
ing the forfeiture of sugar to the Commodity Credit
Corporation.
‘‘(2) INVENTORY DISPOSITION.—
‘‘(A) IN
GENERAL.—To carry out para-
graph (1), the Commodity Credit Corporation
may accept bids to obtain raw cane sugar or re-
fined beet sugar in the inventory of the Com-
HR 2646 EAS/PP
modity Credit Corporation from (or otherwise
make available such commodities, on appro-
priate terms and conditions, to) processors of
sugarcane and processors of sugar beets (acting
in conjunction with the producers of the sugar-
cane or sugar beets processed by the processors)
in return for the reduction of production of raw
cane sugar or refined beet sugar, as appropriate.
‘‘(B) ADDITIONAL
AUTHORITY.—The au-
thority provided under this paragraph is in ad-
dition to any authority of the Commodity Credit
Corporation under any other law.’’.
(g) INFORMATION REPORTING.—Section 156(h) of the
Federal Agriculture Improvement and Reform Act of 1996
(7 U.S.C. 7272(h)) is amended—
(1) by redesignating paragraphs (2) and (3) as
paragraphs (4) and (5), respectively;
(2) by inserting after paragraph (1) the fol-
lowing:
‘‘(2) DUTY OF PRODUCERS TO REPORT.—
‘‘(A) PROPORTIONATE SHARE STATES.—As
a condition of a loan made to a processor for the
benefit of a producer, the Secretary shall require
each producer of sugarcane located in a State
(other than the Commonwealth of Puerto Rico)
HR 2646 EAS/PP
in which there are in excess of 250 producers of
sugarcane to report, in the manner prescribed by
the Secretary, the sugarcane yields and acres
planted to sugarcane of the producer.
‘‘(B) OTHER STATES.—The Secretary may
require each producer of sugarcane or sugar beets
not covered by paragraph (1) to report, in a
manner prescribed by the Secretary, the yields
of, and acres planted to, sugarcane or sugar
beets, respectively, of the producer.
‘‘(3) DUTY OF IMPORTERS TO REPORT.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), the Secretary shall require an
importer of sugars, syrups, or molasses to be
used for human consumption or to be used for
the extraction of sugar for human consumption
to report, in the manner prescribed by the Sec-
retary, the quantities of the products imported
by the importer and the sugar content or equiva-
lent of the products.
‘‘(B) 
TARIFF-RATE
QUOTAS.—Subpara-
graph (A) shall not apply to sugars, syrups, or
molasses that are within the quantities of tariff-
rate quotas that are subject to the lower rate of
duties.’’; and
HR 2646 EAS/PP
(j) INTEREST RATE.—Section 163 of the Federal Agri-
culture Improvement and Reform Act of 1996 (7 U.S.C.
7283) is amended—
(1) by inserting ‘‘(a) IN GENERAL.—’’ before
‘‘Notwithstanding’’; and
(2) by adding at the end the following:
‘‘(b) SUGAR.—For purposes of this section, raw cane
sugar, refined beet sugar, and in-process sugar eligible for
a loan under section 156 shall not be considered an agricul-
tural commodity.’’.
SEC. 142. STORAGE FACILITY LOANS.
Chapter 2 of subtitle D of the Federal Agriculture Im-
provement and Reform Act of 1996 (7 U.S.C. 7271 et seq.)
is amended by adding at the end the following:
‘‘SEC. 157. STORAGE FACILITY LOANS.
‘‘(a) IN GENERAL.—Notwithstanding any other provi-
sion of law and as soon as practicable after the date of en-
actment of this section, the Commodity Credit Corporation
shall amend part 1436 of title 7, Code of Federal Regula-
tions, to establish a sugar storage facility loan program to
provide financing for processors of domestically-produced
sugarcane and sugar beets to construct or upgrade storage
and handling facilities for raw sugars and refined sugars.
‘‘(b) ELIGIBLE PROCESSORS.—A storage facility loan
shall be made available to any processor of domestically
HR 2646 EAS/PP
produced sugarcane or sugar beets that (as determined by
the Secretary)—
‘‘(1) has a satisfactory credit history;
‘‘(2) has a need for increased storage capacity,
taking into account the effects of marketing allot-
ments; and
‘‘(3) demonstrates an ability to repay the loan.
‘‘(c) TERM OF LOANS.—A storage facility loan shall—
‘‘(1) have a minimum term of 7 years; and
‘‘(2) be in such amounts and on such terms and
conditions (including terms and conditions relating
to downpayments, collateral, and eligible facilities) as
are normal, customary, and appropriate for the size
and commercial nature of the borrower.’’.
SEC. 143. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR.
(a) INFORMATION REPORTING.—Section 359a of the
Agricultural Adjustment Act of 1938 (7 U.S.C. 1359aa) is
repealed.
(b) ESTIMATES.—Section 359b of the Agricultural Ad-
justment Act of 1938 (7 U.S.C. 1359bb) is amended—
(1) in the section heading—
(A) by inserting ‘‘FLEXIBLE’’ before ‘‘MAR-
KETING’’; and
(B) by striking ‘‘AND
CRYSTALLINE
FRUCTOSE’’;
HR 2646 EAS/PP
(2) in subsection (a)—
(A) in paragraph (1)—
(i) by striking ‘‘Before’’ and inserting
‘‘Not later than August 1 before’’;
(ii) by striking ‘‘1992 through 1998’’
and inserting ‘‘2002 through 2006’’;
(iii) in subparagraph (A), by striking
‘‘(other than sugar’’ and all that follows
through ‘‘stocks’’;
(iv) by redesignating subparagraphs
(B) and (C) as subparagraphs (C) and (E),
respectively;
(v) by inserting after subparagraph
(A) the following:
‘‘(B) the quantity of sugar that would pro-
vide for reasonable carryover stocks;’’;
(vi) in subparagraph (C) (as so redes-
ignated)—
(I) by striking ‘‘or’’ and all that
follows through ‘‘beets’’; and
(II) by striking ‘‘and’’ following
the semicolon;
(vii) by inserting after subparagraph
(C) (as so redesignated) the following:
HR 2646 EAS/PP
‘‘(D) the quantity of sugar that will be
available from the domestic processing of sugar-
cane and sugar beets; and’’; and
(viii) in subparagraph (E) (as so re-
designated)—
(I) 
by 
striking 
‘‘quantity 
of
sugar’’ and inserting ‘‘quantity of sug-
ars, syrups, and molasses’’;
(II) by inserting ‘‘human’’ after
‘‘imported for’’ the first place it ap-
pears;
(III) by inserting after ‘‘consump-
tion’’ the first place it appears the fol-
lowing: ‘‘or to be used for the extrac-
tion of sugar for human consumption’’;
(IV) by striking ‘‘year’’ and in-
serting ‘‘year, whether such articles are
under a tariff-rate quota or are in ex-
cess or outside of a tariff-rate quota’’;
and
(V) by striking ‘‘(other than
sugar’’ and all that follows through
‘‘carry-in stocks’’;
(B) by redesignating paragraph (2) as
paragraph (3);
HR 2646 EAS/PP
(C) by inserting after paragraph (1) the fol-
lowing:
‘‘(2) EXCLUSION.—The estimates under this sub-
section shall not apply to sugar imported for the pro-
duction of polyhydric alcohol or to any sugar refined
and reexported in refined form or in products con-
taining sugar.’’; and
(D) in paragraph (3) (as so redesignated)—
(i) in the paragraph heading, by strik-
ing ‘‘QUARTERLY
REESTIMATES’’ and in-
serting ‘‘REESTIMATES’’; and
(ii) by inserting ‘‘as necessary, but’’
after ‘‘a fiscal year’’;
(3) in subsection (b)—
(A) by striking paragraph (1) and inserting
the following:
‘‘(1) IN GENERAL.—By the beginning of each fis-
cal year, the Secretary shall establish for that fiscal
year appropriate allotments under section 359c for
the marketing by processors of sugar processed from
sugar beets and from domestically-produced sugarcane
at a level that the Secretary estimates will result in
no forfeitures of sugar to the Commodity Credit Cor-
poration under the loan program for sugar established
HR 2646 EAS/PP
under section 156 of the Federal Agriculture Improve-
ment and Reform Act of 1996 (7 U.S.C. 7272).’’; and
(B) in paragraph (2), by striking ‘‘or crys-
talline fructose’’;
(4) by striking subsection (c);
(5) by redesignating subsection (d) as subsection
(c); and
(6) in subsection (c) (as so redesignated)—
(A) by striking paragraph (2);
(B) by redesignating paragraphs (3) and
(4) as paragraphs (2) and (3), respectively; and
(C) in paragraph (2) (as so redesignated)—
(i) by striking ‘‘or manufacturer’’ and
all that follows through ‘‘(2)’’; and
(ii) by striking ‘‘or crystalline fruc-
tose’’.
(c) ESTABLISHMENT.—Section 359c of the Agricul-
tural Adjustment Act of 1938 (7 U.S.C. 1359cc) is
amended—
(1) in the section heading, by inserting ‘‘FLEXI-
BLE’’ after ‘‘OF’’;
(2) in subsection (a), by inserting ‘‘flexible’’ after
‘‘establish’’;
(3) in subsection (b)—
HR 2646 EAS/PP
(A) in paragraph (1)(A), by striking
‘‘1,250,000’’ and inserting ‘‘1,532,000’’; and
(B) in paragraph (2), by striking ‘‘to the
maximum extent practicable’’;
(4) by striking subsection (c) and inserting the
following:
‘‘(c) MARKETING ALLOTMENT FOR SUGAR DERIVED
FROM SUGAR BEETS AND SUGAR DERIVED FROM SUGAR-
CANE.—The overall allotment quantity for the fiscal year
shall be allotted between—
‘‘(1) sugar derived from sugar beets by estab-
lishing a marketing allotment for a fiscal year at a
quantity equal to the product of multiplying the over-
all allotment quantity for the fiscal year by 54.35
percent; and
‘‘(2) sugar derived from sugarcane by estab-
lishing a marketing allotment for a fiscal year at a
quantity equal to the product of multiplying the over-
all allotment quantity for the fiscal year by 45.65
percent.’’;
(5) by striking subsection (d) and inserting the
following:
‘‘(d) FILLING CANE SUGAR AND BEET SUGAR ALLOT-
MENTS.—
HR 2646 EAS/PP
‘‘(1) CANE SUGAR.—Each marketing allotment
for cane sugar established under this section may only
be filled with sugar processed from domestically
grown sugarcane.
‘‘(2) BEET SUGAR.—Each marketing allotment
for beet sugar established under this section may only
be filled with sugar domestically processed from sugar
beets.’’;
(6) by striking subsection (e);
(7) by redesignating subsection (f) as subsection
(e);
(8) in subsection (e) (as so redesignated)—
(A) by striking ‘‘The allotment’’ and insert-
ing the following:
‘‘(1) IN GENERAL.—The allotment’’;
(B) in paragraph (1) (as so redesignated)—
(i) by striking ‘‘the 5’’ and inserting
‘‘the’’;
(ii) by inserting after ‘‘sugarcane is
produced,’’ the following: ‘‘after a hearing
(if requested by the affected sugarcane proc-
essors and growers) and on such notice as
the Secretary by regulation may prescribe,’’;
and
HR 2646 EAS/PP
(iii) by striking ‘‘on the basis of past
marketings’’ and all that follows through
‘‘allotments’’ and inserting ‘‘as provided in
this 
subsection 
and 
section
359d(a)(2)(A)(iv)’’; and
(C) by inserting after paragraph (1) (as so
designated) the following:
‘‘(2) OFFSHORE ALLOTMENT.—
‘‘(A) COLLECTIVELY.—Prior to the allot-
ment of sugar derived from sugarcane to any
other State, 325,000 short tons, raw value shall
be allotted to the offshore States.
‘‘(B) INDIVIDUALLY.—The collective offshore
State allotment provided for under subparagraph
(A) shall be further allotted among the offshore
States in which sugarcane is produced, after a
hearing (if requested by the affected sugarcane
processors and growers) and on such notice as
the Secretary by regulation may prescribe, in a
fair and equitable manner on the basis of—
‘‘(i) past marketings of sugar, based on
the average of the 2 highest years of produc-
tion of raw cane sugar from the 1996
through 2000 crops;
HR 2646 EAS/PP
‘‘(ii) the ability of processors to market
the sugar covered under the allotments for
the crop year; and
‘‘(iii) past processings of sugar from
sugarcane based on the 3-year average of the
1998 through 2000 crop years.
‘‘(3) MAINLAND ALLOTMENT.—The allotment for
sugar derived from sugarcane, less the amount pro-
vided for under paragraph (2), shall be allotted
among the mainland States in the United States in
which sugarcane is produced, after a hearing (if re-
quested by the affected sugarcane processors and grow-
ers) and on such notice as the Secretary by regulation
may prescribe, in a fair and equitable manner on the
basis of—
‘‘(A) past marketings of sugar, based on the
average of the 2 highest years of production of
raw cane sugar from the 1996 through 2000
crops;
‘‘(B) the ability of processors to market the
sugar covered under the allotments for the crop
year; and
‘‘(C) past processings of sugar from sugar-
cane, based on the 3 crop years with the greatest
HR 2646 EAS/PP
processings (in the mainland States collectively)
during the 1991 through 2000 crop years.’’;
(9) by inserting after subsection (e) (as so redes-
ignated) the following:
‘‘(f) FILLING CANE SUGAR ALLOTMENTS.—Except as
provided in section 359e, a State cane sugar allotment es-
tablished under subsection (e) for a fiscal year may be filled
only with sugar processed from sugarcane grown in the
State covered by the allotment.’’;
(10) in subsection (g)—
(A) 
in 
paragraph 
(1), 
by 
striking
‘‘359b(a)(2)—’’ and all that follows through the
comma at the end of subparagraph (C) and in-
serting ‘‘359b(a)(3), adjust upward or downward
marketing allotments in a fair and equitable
manner’’;
(B) in paragraph (2), by striking ‘‘359f(b)’’
and inserting ‘‘359f(c)’’; and
(C) in paragraph (3)—
(i) in the paragraph heading, by strik-
ing ‘‘REDUCTIONS’’ and inserting ‘‘CARRY-
OVER OF REDUCTIONS’’;
(ii) by inserting after ‘‘this subsection,
if’’ the following: ‘‘at the time of the reduc-
tion’’;
HR 2646 EAS/PP
(iii) by striking ‘‘price support’’ and
inserting ‘‘nonrecourse’’;
(iv) by striking ‘‘206’’ and all that fol-
lows through ‘‘the allotment’’ and inserting
‘‘156 of the Federal Agriculture Improve-
ment and Reform Act of 1996 (7 U.S.C.
7272),’’; and
(v) by striking ‘‘, if any,’’; and
(11) by striking subsection (h) and inserting the
following:
‘‘(h) SUSPENSION
OF ALLOTMENTS.—Whenever the
Secretary estimates or reestimates under section 359b(a),
or has reason to believe, that imports of sugars, syrups or
molasses for human consumption or to be used for the ex-
traction of sugar for human consumption, whether under
a tariff-rate quota or in excess or outside of a tariff-rate
quota, will exceed 1,532,000 short tons (raw value equiva-
lent), and that the imports would lead to a reduction of
the overall allotment quantity, the Secretary shall suspend
the marketing allotments established under this section
until such time as the imports have been restricted, elimi-
nated, or reduced to or below the level of 1,532,000 short
tons (raw value equivalent).’’.
HR 2646 EAS/PP
(d) ALLOCATION.—Section 359d(a)(2) of the Agricul-
tural Adjustment Act of 1938 (7 U.S.C. 1359dd(a)(2)) is
amended—
(1) in subparagraph (A)—
(A) by striking ‘‘The Secretary’’ and insert-
ing the following:
‘‘(i) IN GENERAL.—The Secretary’’;
(B) in the first sentence of clause (i) (as so
designated)—
(i) by striking ‘‘interested parties’’ and
inserting ‘‘the affected sugarcane processors
and growers’’; and
(ii) by striking ‘‘by taking’’ and all
that follows through ‘‘allotment allocated.’’
and inserting ‘‘under this subparagraph.’’;
and
(C) by inserting after clause (i) the fol-
lowing:
‘‘(ii) MULTIPLE PROCESSOR STATES.—
Except as provided in clauses (iii) and (iv),
the Secretary shall allocate the allotment for
cane sugar among multiple cane sugar
processors in a single State based on—
‘‘(I) past marketings of sugar,
based on the average of the 2 highest
HR 2646 EAS/PP
years of production of raw cane sugar
from among the 1996 through 2000
crops;
‘‘(II) the ability of processors to
market sugar covered by that portion
of the allotment allocated for the crop
year; and
‘‘(III) past processings of sugar
from sugarcane, based on the average
of the 3 highest years of production
during the 1996 through 2000 crop
years.
‘‘(iii) TALISMAN
PROCESSING
FACIL-
ITY.—In the case of allotments under clause
(ii) attributable to the operations of the Tal-
isman processing facility before the date of
enactment of this clause, the Secretary shall
allocate the allotment among processors in
the State under clause (i) in accordance
with the agreements of March 25 and 26,
1999, between the affected processors and
the Secretary of the Interior.
‘‘(iv) 
PROPORTIONATE
SHARE
STATES.—In the case of States subject to
section 359f(c), the Secretary shall allocate
HR 2646 EAS/PP
the allotment for cane sugar among mul-
tiple cane sugar processors in a single state
based on—
‘‘(I) past marketings of sugar,
based on the average of the 2 highest
years of production of raw cane sugar
from among the 1997 through 2001
crop years;
‘‘(II) the ability of processors to
market sugar covered by that portion
of the allotments allocated for the crop
year; and
‘‘(III) past processings of sugar
from sugarcane, based on the average
of the 2 highest crop years of crop pro-
duction during the 1997 through 2001
crop years.
‘‘(v) NEW ENTRANTS.—
‘‘(I) 
IN
GENERAL.—Notwith-
standing clauses (ii) and (iv), the Sec-
retary, on application of any processor
that begins processing sugarcane on or
after the date of enactment of this
clause, and after a hearing (if re-
quested by the affected sugarcane proc-
HR 2646 EAS/PP
essors and growers) and on such notice
as the Secretary by regulation may
prescribe, may provide the processor
with an allocation that provides a fair,
efficient and equitable distribution of
the allocations from the allotment for
the State in which the processor is lo-
cated.
‘‘(II) 
PROPORTIONATE
SHARE
STATES.—In the case of proportionate
share States, the Secretary shall estab-
lish proportionate shares in a quantity
sufficient to produce the sugarcane re-
quired to satisfy the allocations.
‘‘(III) LIMITATIONS.—The allot-
ment for a new processor under this
clause shall not exceed—
‘‘(aa) in the case of the first
fiscal year of operation of a new
processor, 50,000 short tons (raw
value); and
‘‘(bb) in the case of each sub-
sequent fiscal year of operation of
the new processor, a quantity es-
tablished by the Secretary in ac-
HR 2646 EAS/PP
cordance with this clause and the
criteria described in clause (ii) or
(iii), as applicable.
‘‘(IV) NEW ENTRANT STATES.—
‘‘(aa) 
IN
GENERAL.—Not-
withstanding subparagraphs (A)
and (C) of section 359c(e)(3), to
accommodate an allocation under
subclause (I) to a new processor
located in a new entrant main-
land State, the Secretary shall
provide the new entrant mainland
State with an allotment.
‘‘(bb) EFFECT ON OTHER AL-
LOTMENTS.—The allotment to any
new entrant mainland State shall
be subtracted, on a pro rata basis,
from the allotments otherwise al-
lotted to each mainland State
under section 359c(e)(3).
‘‘(V) ADVERSE EFFECTS.—Before
providing an initial processor alloca-
tion or State allotment to a new en-
trant processor or a new entrant State
under this clause, the Secretary shall
HR 2646 EAS/PP
take into consideration any adverse ef-
fects that the provision of the alloca-
tion or allotment may have on existing
cane processors and producers in
mainland States.
‘‘(VI) ABILITY TO MARKET.—Con-
sistent with section 359c and this sec-
tion, any processor allocation or State
allotment made to a new entrant proc-
essor or to a new entrant State under
this clause shall be provided only after
the applicant processor, or the applica-
ble processors in the State, have dem-
onstrated 
the 
ability 
to 
process,
produce, and market (including the
transfer or delivery of the raw cane
sugar to a refinery for further proc-
essing or marketing) raw cane sugar
for the crop year for which the allot-
ment is applicable.
‘‘(VII) PROHIBITION.—Not more
than 1 processor allocation provided
under this clause may be applicable to
any individual sugar processing facil-
ity.
HR 2646 EAS/PP
‘‘(vi) TRANSFER OF OWNERSHIP.—Ex-
cept as otherwise provided in section
359f(c)(8), if a sugarcane processor is sold
or otherwise transferred to another owner or
closed as part of an affiliated corporate
group processing consolidation, the Sec-
retary shall transfer the allotment alloca-
tion for the processor to the purchaser, new
owner, successor in interest, or any remain-
ing processor of an affiliated entity, as ap-
plicable, of the processor.’’; and
(2) by striking subparagraph (B) and inserting
the following:
‘‘(B) BEET SUGAR.—
‘‘(i) IN GENERAL.—Except as otherwise
provided in this subparagraph and sections
359c(g), 359e(b), and 359f(b), the Secretary
shall make allocations for beet sugar among
beet sugar processors for each crop year that
allotments are in effect on the basis of the
adjusted weighted average quantity of beet
sugar produced by the processors for each of
the 1998 through 2000 crop years, as deter-
mined under this subparagraph.
HR 2646 EAS/PP
‘‘(ii) QUANTITY.—The quantity of an
allocation made for a beet sugar processor
for a crop year under clause (i) shall bear
the same ratio to the quantity of allocations
made for all beet sugar processors for the
crop year as the adjusted weighted average
quantity of beet sugar produced by the proc-
essor (as determined under clauses (iii) and
(iv)) bears to the total of the adjusted
weighted average quantities of beet sugar
produced by all processors (as so deter-
mined).
‘‘(iii) 
WEIGHTED
AVERAGE
QUAN-
TITY.—Subject to clause (iv), the weighted
quantity of beet sugar produced by a beet
sugar processor during each of the 1998
through 2000 crop years shall be (as deter-
mined by the Secretary)—
‘‘(I) in the case of the 1998 crop
year, 25 percent of the quantity of beet
sugar produced by the processor during
the crop year;
‘‘(II) in the case of the 1999 crop
year, 35 percent of the quantity of beet
HR 2646 EAS/PP
sugar produced by the processor during
the crop year; and
‘‘(III) in the case of the 2000 crop
year, 40 percent of the quantity of beet
sugar produced by the processor (in-
cluding any quantity of sugar received
from the Commodity Credit Corpora-
tion) during the crop year.
‘‘(iv) ADJUSTMENTS.—
‘‘(I) IN GENERAL.—The Secretary
shall adjust the weighted average quan-
tity of beet sugar produced by a beet
sugar 
processor 
during 
the 
1998
through 2000 crop years under clause
(iii) if the Secretary determines that,
during any such crop year, the
processor—
‘‘(aa) opened or closed a
sugar beet processing factory;
‘‘(bb) constructed a molasses
desugarization facility; or
‘‘(cc) 
suffered 
substantial
quality losses on sugar beets
stored during any such crop year.
100
HR 2646 EAS/PP
‘‘(II) QUANTITY.—The quantity of
beet sugar produced by a beet sugar
processor under clause (iii) shall be—
‘‘(aa) in the case of a proc-
essor that opened a sugar beet
processing factory, increased by
1.25 percent of the total of the ad-
justed weighted average quantities
of beet sugar produced by all proc-
essors during the 1998 through
2000 crop years (without consid-
eration of any adjustment under
this clause) for each sugar beet
processing factory that is opened
by the processor;
‘‘(bb) in the case of a proc-
essor that closed a sugar beet
processing factory, decreased by
1.25 percent of the total of the ad-
justed weighted average quantities
of beet sugar produced by all proc-
essors during the 1998 through
2000 crop years (without consid-
eration of any adjustment under
this clause) for each sugar beet
101
HR 2646 EAS/PP
processing factory that is closed
by the processor;
‘‘(cc) in the case of a proc-
essor that constructed a molasses
desugarization facility, increased
by 0.25 percent of the total of the
adjusted weighted average quan-
tities of beet sugar produced by all
processors 
during 
the 
1998
through 2000 crop years (without
consideration of any adjustment
under this clause) for each molas-
ses desugarization facility that is
constructed by the processor; and
‘‘(dd) in the case of a proc-
essor that suffered substantial
quality losses on stored sugar
beets, increased by 1.25 percent of
the total of the adjusted weighted
average quantities of beet sugar
produced by all processors during
the 1998 through 2000 crop years
(without consideration of any ad-
justment under this clause).
102
HR 2646 EAS/PP
‘‘(v) PERMANENT TERMINATION OF OP-
ERATIONS OF A PROCESSOR.—If a processor
of beet sugar has been dissolved, liquidated
in a bankruptcy proceeding, or otherwise
has permanently terminated operations
(other than in conjunction with a sale or
other disposition of the processor or the as-
sets of the processor), the Secretary shall—
‘‘(I) eliminate the allocation of the
processor provided under this section;
and
‘‘(II) distribute the allocation to
other beet sugar processors on a pro
rata basis.
‘‘(vi) SALE OF ALL ASSETS OF A PROC-
ESSOR
TO
ANOTHER
PROCESSOR.—If a
processor of beet sugar (or all of the assets
of the processor) is sold to another processor
of beet sugar, the Secretary shall transfer
the allocation of the seller to the buyer un-
less the allocation has been distributed to
other sugar beet processors under clause (v).
‘‘(vii) SALE OF FACTORIES OF A PROC-
ESSOR TO ANOTHER PROCESSOR.—
103
HR 2646 EAS/PP
‘‘(I) IN
GENERAL.—Subject to
clauses (v) and (vi), if 1 or more fac-
tories of a processor of beet sugar (but
not all of the assets of the processor)
are sold to another processor of beet
sugar during a fiscal year, the Sec-
retary shall assign a pro rata portion
of the allocation of the seller to the al-
location of the buyer to reflect the his-
torical contribution of the production
of the sold factory or factories to the
total allocation of the seller.
‘‘(II) APPLICATION
OF
ALLOCA-
TION.—The assignment of the alloca-
tion under subclause (I) shall apply—
‘‘(aa) during the remainder
of the fiscal year during which the
sale described in subclause (I) oc-
curs (referred to in this clause as
the ‘initial fiscal year’); and
‘‘(bb) each subsequent fiscal
year (referred in this clause as a
‘subsequent fiscal year’), subject to
subclause (III).
104
HR 2646 EAS/PP
‘‘(III) 
SUBSEQUENT
FISCAL
YEARS.—
‘‘(aa) IN GENERAL.—The as-
signment of the allocation under
subclause (I) shall apply during
each subsequent fiscal year unless
the acquired factory or factories
continue in operation for less
than the initial fiscal year and
the first subsequent fiscal year.
‘‘(bb) 
REASSIGNMENT.—If
the acquired factory or factories
do not continue in operation for
the complete initial fiscal year
and the first subsequent fiscal
year, the Secretary shall reassign
the temporary allocation to other
processors of beet sugar on a pro
rata basis.
‘‘(IV) USE OF OTHER FACTORIES
TO
FILL
ALLOCATION.—If the trans-
ferred allocation to the buyer for the
purchased factory or factories cannot
be filled by the production by the pur-
chased factory or factories for the ini-
105
HR 2646 EAS/PP
tial fiscal year or a subsequent fiscal
year, the remainder of the transferred
allocation may be filled by beet sugar
produced by the buyer from other fac-
tories of the buyer.
‘‘(viii) NEW ENTRANTS STARTING PRO-
DUCTION OR REOPENING FACTORIES.—If an
individual or entity that does not have an
allocation of beet sugar under this part (re-
ferred to in this subparagraph as a ‘new en-
trant’) starts processing sugar beets after
the date of enactment of this clause, or ac-
quires and reopens a factory that produced
beet sugar during the period of the 1998
through 2000 crop years that (at the time
of acquisition) has no allocation associated
with the factory under this part, the Sec-
retary shall—
‘‘(I) assign an allocation for beet
sugar to the new entrant that provides
a fair and equitable distribution of the
allocations for beet sugar; and
‘‘(II) reduce the allocations for
beet sugar of all other processors on a
106
HR 2646 EAS/PP
pro rata basis to reflect the new alloca-
tion.
‘‘(ix) NEW ENTRANTS ACQUIRING ON-
GOING FACTORIES WITH PRODUCTION HIS-
TORY.—If a new entrant acquires a factory
that has production history during the pe-
riod of the 1998 through 2000 crop years
and that is producing beet sugar at the time
the allocations are made from a processor
that has an allocation of beet sugar, the
Secretary shall transfer a portion of the al-
location of the seller to the new entrant to
reflect the historical contribution of the pro-
duction of the sold factory to the total allo-
cation of the seller.’’.
(e) REASSIGNMENT.—Section 359e(b) of the Agricul-
tural Adjustment Act of 1938 (7 U.S.C. 1359ee(b)) is
amended—
(1) in paragraph (1)—
(A) in subparagraph (B), by striking the
‘‘and’’ after the semicolon;
(B) by redesignating subparagraph (C) as
subparagraph (D);
(C) by inserting after subparagraph (B) the
following:
107
HR 2646 EAS/PP
‘‘(C) if after the reassignments, the deficit
cannot be completely eliminated, the Secretary
shall reassign the estimated quantity of the def-
icit to the sale of any inventories of sugar held
by the Commodity Credit Corporation; and’’;
and
(D) in subparagraph (D) (as so redesig-
nated), by inserting ‘‘and sales’’ after ‘‘reassign-
ments’’; and
(2) in paragraph (2)—
(A) in subparagraph (A), by striking the
‘‘and’’ after the semicolon;
(B) in subparagraph (B), by striking ‘‘reas-
sign the remainder to imports.’’ and inserting
‘‘use the estimated quantity of the deficit for the
sale of any inventories of sugar held by the Com-
modity Credit Corporation; and’’; and
(C) by inserting after subparagraph (B) the
following:
‘‘(C) if after the reassignments and sales,
the deficit cannot be completely eliminated, the
Secretary shall reassign the remainder to im-
ports.’’.
108
HR 2646 EAS/PP
(f) PRODUCER PROVISIONS.—Section 359f of the Agri-
cultural Adjustment Act of 1938 (7 U.S.C. 1359ff) is
amended—
(1) in subsection (a)—
(A) by striking ‘‘Whenever’’ and inserting
the following:
‘‘(1) IN GENERAL.—If’’;
(B) in the second sentence, by striking
‘‘processor’s allocation’’ and inserting ‘‘allocation
to the processor’’;
(C) by striking ‘‘Any dispute’’ and insert-
ing the following:
‘‘(2) ARBITRATION.—
‘‘(A) IN GENERAL.—Any dispute’’; and
(D) by adding at the end the following:
‘‘(B) PERIOD.—The arbitration shall, to the
maximum extent practicable, be—
‘‘(i) commenced not more than 45 days
after the request; and
‘‘(ii) completed not more than 60 days
after the request.’’;
(2) by redesignating subsection (b) as subsection
(c);
(3) by inserting after subsection (a) the fol-
lowing:
109
HR 2646 EAS/PP
‘‘(b) SUGAR
BEET
PROCESSING
FACILITY
CLO-
SURES.—
‘‘(1) IN GENERAL.—If a sugar beet processing fa-
cility is closed and the sugar beet growers that pre-
viously delivered beets to the facility elect to deliver
their beets to another processing company, the growers
may petition the Secretary to modify allocations
under this part to allow the delivery.
‘‘(2) INCREASED ALLOCATION FOR PROCESSING
COMPANY.—The Secretary may increase the allocation
to the processing company to which the growers elect
to deliver their sugar beets, with the approval of the
processing company, to a level that does not exceed
the processing capacity of the processing company, to
accommodate the change in deliveries.
‘‘(3) DECREASED ALLOCATION FOR CLOSED COM-
PANY.—The increased allocation shall be deducted
from the allocation to the company that owned the
processing facility that has been closed and the re-
maining allocation shall be unaffected.
‘‘(4) TIMING.—The determinations of the Sec-
retary on the issues raised by the petition shall be
made within 60 days after the filing of the petition.’’;
and
(4) in subsection (c) (as so redesignated)—
110
HR 2646 EAS/PP
(A) in paragraph (3)(A), by striking ‘‘the
preceding 5 years’’ and inserting ‘‘the 2 highest
years from among the 1999, 2000, and 2001 crop
years’’;
(B) in paragraph (4)(A), by striking ‘‘each’’
and all that follows through ‘‘in effect’’ and in-
serting ‘‘the 2 highest of the 1999, 2000, and
2001 crop years’’; and
(C) by inserting after paragraph (7) the fol-
lowing:
‘‘(8) PROCESSING FACILITY CLOSURES.—
‘‘(A) IN GENERAL.—If a sugarcane proc-
essing facility subject to this subsection is closed
and the sugarcane growers that delivered sugar-
cane to the facility prior to closure elect to de-
liver their sugarcane to another processing com-
pany, the growers may petition the Secretary to
modify allocations under this part to allow the
delivery.
‘‘(B) INCREASED
ALLOCATION
FOR
PROC-
ESSING COMPANY.—The Secretary may increase
the allocation to the processing company to
which the growers elect to deliver the sugarcane,
with the approval of the processing company, to
a level that does not exceed the processing capac-
111
HR 2646 EAS/PP
ity of the processing company, to accommodate
the change in deliveries.
‘‘(C) DECREASED ALLOCATION FOR CLOSED
COMPANY.—The increased allocation shall be de-
ducted from the allocation to the company that
owned the processing facility that has been closed
and the remaining allocation shall be unaffected.
‘‘(D) TIMING.—The determinations of the
Secretary on the issues raised by the petition
shall be made within 60 days after the filing of
the petition.’’.
(g) CONFORMING AMENDMENTS.—
(1) Part VII of subtitle B of title III of the Agri-
cultural Adjustment Act of 1938 (7 U.S.C. 359aa et
seq.) is amended by striking the part heading and in-
serting the following:
‘‘PART VII—FLEXIBLE MARKETING ALLOTMENTS
FOR SUGAR’’.
(2) Part VII of subtitle B of title III of the Agri-
cultural Adjustment Act of 1938 (as amended by sub-
section (a)) is amended by inserting before section
359b (7 U.S.C. 1359bb) the following:
‘‘SEC. 359a. DEFINITIONS.
‘‘In this part:
112
HR 2646 EAS/PP
‘‘(1) MAINLAND
STATE.—The term ‘mainland
State’ means a State other than an offshore State.
‘‘(2) OFFSHORE
STATE.—The term ‘offshore
State’ means a sugarcane producing State located
outside of the continental United States.
‘‘(3) STATE.—Notwithstanding section 301, the
term ‘State’ means—
‘‘(A) a State;
‘‘(B) the District of Columbia; and
‘‘(C) the Commonwealth of Puerto Rico.
‘‘(4) UNITED STATES.—The term ‘United States’,
when used in a geographical sense, means all of the
States.’’.
(3) Section 359g of the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1359gg) is amended—
(A) by striking ‘‘359f’’ each place it appears
and inserting ‘‘359f(c)’’;
(B) in the first sentence of subsection (b), by
striking ‘‘3 consecutive’’ and inserting ‘‘5 con-
secutive’’; and
(C) in subsection (c), by inserting ‘‘or ad-
justed’’ after ‘‘share established’’.
(4) Section 359j of the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1359jj) is amended—
113
HR 2646 EAS/PP
(A) in subsection (b), by striking ‘‘sections
359a through 359i’’ and inserting ‘‘this part’’;
and
(B) by striking subsection (c).
SEC. 144. REALLOCATION OF SUGAR QUOTA.
Subtitle B of title III of the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1311 et seq.) is amended by adding
at the end the following:
‘‘PART VIII—REALLOCATING SUGAR QUOTA
IMPORT SHORTFALLS
‘‘SEC. 360. REALLOCATING CERTAIN SUGAR QUOTAS.
‘‘(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, on or after June 1 of each year, the United
States Trade Representative, in consultation with the Sec-
retary, shall determine the amount of the quota of cane
sugar used by each qualified supplying country for that fis-
cal year, and may reallocate the unused quota for that fiscal
year among qualified supplying countries.
‘‘(b) DEFINITIONS.—In this section:
‘‘(1) QUALIFIED
SUPPLYING
COUNTRY.—The
term ‘qualified supplying country’ means one of the
following 40 foreign countries that is allowed to ex-
port cane sugar to the United States under an agree-
ment or any other country with which the United
114
HR 2646 EAS/PP
States has an agreement relating to the importation
of cane sugar:
Argentina
Australia
Barbados
Belize
Bolivia
Brazil
Colombia
Congo
Costa Rica
Dominican Republic
Ecuador
El Salvador
Fiji
Gabon
Guatemala
Guyana
Haiti
Honduras
India
Ivory Coast
Jamaica
Madagascar
Malawi
Mauritius
Mexico
Mozambique
Nicaragua
Panama
Papua New Guinea
Paraguay
Peru
Philippines
St. Kitts and Nevis
South Africa
Swaziland
Taiwan
Thailand
Trinidad-Tobago
Uruguay
Zimbabwe.
‘‘(2) CANE SUGAR.—The term ‘cane sugar’ has
the same meaning as the term has under part VII.’’.
115
HR 2646 EAS/PP
CHAPTER 3—PEANUTS
SEC. 151. PEANUT PROGRAM.
(a) IN GENERAL.—Subtitle D of the Federal Agri-
culture Improvement and Reform Act of 1996 (7 U.S.C.
7251 et seq.) is amended by adding at the end the following:
‘‘CHAPTER 3—PEANUTS
‘‘SEC. 158A. DEFINITIONS.
‘‘In this chapter:
‘‘(1) COUNTER-CYCLICAL
PAYMENT.—The term
‘counter-cyclical payment’ means a payment made to
peanut producers on a farm under section 158D.
‘‘(2) DIRECT PAYMENT.—The term ‘direct pay-
ment’ means a payment made to peanut producers on
a farm under section 158C.
‘‘(3) EFFECTIVE
PRICE.—The term ‘effective
price’ means the price calculated by the Secretary
under section 158D for peanuts to determine whether
counter-cyclical payments are required to be made
under section 158D for a crop year.
‘‘(4) HISTORICAL
PEANUT
PRODUCERS
ON
A
FARM.—The term ‘historical peanut producers on a
farm’ means the peanut producers on a farm in the
United States that produced or were prevented from
planting peanuts during any of the 1998 through
2001 crop years.
116
HR 2646 EAS/PP
‘‘(5) INCOME PROTECTION PRICE.—The term ‘in-
come protection price’ means the price per ton of pea-
nuts used to determine the payment rate for counter-
cyclical payments.
‘‘(6) PAYMENT
ACRES.—The term ‘payment
acres’ means 85 percent of the peanut acres on a
farm, as established under section 158B, on which di-
rect payments and counter-cyclical payments are
made.
‘‘(7) PEANUT ACRES.—The term ‘peanut acres’
means the number of acres assigned to a particular
farm for historical peanut producers on a farm pur-
suant to section 158B(b).
‘‘(8) PAYMENT
YIELD.—The term ‘payment
yield’ means the yield assigned to a farm by histor-
ical peanut producers on the farm pursuant to section
158B(b).
‘‘(9) PEANUT
PRODUCER.—The term ‘peanut
producer’ means an owner, operator, landlord, tenant,
or sharecropper that—
‘‘(A) shares in the risk of producing a crop
of peanuts in the United States; and
‘‘(B) is entitled to share in the crop avail-
able for marketing from the farm or would have
shared in the crop had the crop been produced.
117
HR 2646 EAS/PP
‘‘SEC. 158B. PAYMENT YIELDS, PEANUT ACRES, AND PAY-
MENT ACRES FOR FARMS.
‘‘(a) PAYMENT YIELDS AND PAYMENT ACRES.—
‘‘(1) AVERAGE YIELD.—
‘‘(A) IN GENERAL.—The Secretary shall de-
termine, for each historical peanut producer, the
average yield for peanuts on all farms of the his-
torical peanut producer for the 1998 through
2001 crop years, excluding any crop year during
which the producers did not produce peanuts.
‘‘(B) ASSIGNED
YIELDS.—Except as pro-
vided in subparagraph (C), if, for any of the
crop years referred to in subparagraph (A) in
which peanuts were planted on a farm by the
historical peanut producer, the historical peanut
producer has satisfied the eligibility criteria es-
tablished to carry out section 1102 of the Agri-
culture, Rural Development, Food and Drug Ad-
ministration, and Related Agencies Appropria-
tions Act, 1999 (7 U.S.C. 1421 note; Public Law
105–277), the Secretary shall assign to the his-
torical peanut producer a yield for the farm for
the crop year equal to 65 percent of the average
yield for peanuts for the previous 5 crop years.
‘‘(C) SELECTION BY PRODUCER.—If a coun-
ty in which a historical peanut producer de-
118
HR 2646 EAS/PP
scribed in subparagraph (A) is located is de-
clared a disaster area during 1 or more of the
4 crop years described in subparagraph (A), for
the purposes of determining the 4-year average
yield for the historical peanut producer, the his-
torical peanut producer may elect to substitute,
for not more than 1 of the crop years during
which a disaster is declared—
‘‘(i) the State 4-year average yield of
peanuts produced in the State; or
‘‘(ii) the average yield for the historical
peanut producer determined by the Sec-
retary under subparagraph (A).
‘‘(2) ACREAGE AVERAGE.—The Secretary shall
determine, for the historical peanut producer, the 4-
year average of—
‘‘(A) acreage planted to peanuts on all
farms for harvest during the 1998 through 2001
crop years; and
‘‘(B) any acreage that was prevented from
being planting to peanuts during the crop years
because of drought, flood, or other natural dis-
aster, or other condition beyond the control of the
historical peanut producer, as determined by the
Secretary.
119
HR 2646 EAS/PP
‘‘(3) TIME FOR DETERMINATIONS; FACTORS.—
‘‘(A) TIMING.—The Secretary shall make
the determinations required by this subsection
not later than 90 days after the date of enact-
ment of this section.
‘‘(B) FACTORS.—In making the determina-
tions, the Secretary shall take into account
changes in the number and identity of historical
peanut producers sharing in the risk of pro-
ducing a peanut crop since the 1998 crop year,
including providing a method for the assignment
of average acres and average yield to a farm
when a historical peanut producer is no longer
living or an entity composed of historical peanut
producers has been dissolved.
‘‘(b) ASSIGNMENT OF YIELD AND ACRES TO FARMS.—
‘‘(1) ASSIGNMENT BY HISTORICAL PEANUT PRO-
DUCERS.—For the first crop year that begins after the
date of enactment of this section, the Secretary shall
provide each historical peanut producer in a State
that produced a contract commodity, or another agri-
cultural commodity for which a production adjust-
ment program is carried out under the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1281 et seq.), or
was prevented from planting a contract commodity,
120
HR 2646 EAS/PP
or another such agricultural commodity, during the
2001 crop year with an opportunity to assign the av-
erage peanut yield and average acreage determined
under subsection (a) for the historical peanut pro-
ducer to cropland on a farm in the State.
‘‘(2) ASSIGNMENT TO CROPLAND.—In the case of
a historical peanut producer on a farm that did not
produce a contract commodity, or another such agri-
cultural commodity, and was not prevented from
planting a contract commodity or another such agri-
cultural commodity during the 2001 crop year, the
average peanut yield and average acreage determined
under subsection (a) shall be assigned to the cropland
on the farm.
‘‘(3) PAYMENT YIELD.—The average of all of the
yields assigned by historical peanut producers to a
farm shall be considered to be the payment yield for
the farm for the purpose of making direct payments
and counter-cyclical payments under this chapter.
‘‘(4) PEANUT ACRES.—Subject to subsection (e),
the total number of acres assigned by historical pea-
nut producers to a farm shall be considered to be the
peanut acres for the farm for the purpose of making
direct payments and counter-cyclical payments under
this chapter.
121
HR 2646 EAS/PP
‘‘(c) ELECTION.—In the case of the first crop year that
begins after the date of enactment of this subsection, a his-
torical peanut producer shall notify the Secretary of the as-
signments described in subsection (b)(1) not later than 180
days after the date of enactment of this section.
‘‘(d) PAYMENT ACRES.—The payment acres for pea-
nuts on a farm shall be equal to 85 percent of the peanut
acres assigned to the farm.
‘‘(e) PREVENTION OF EXCESS PEANUT ACRES.—
‘‘(1) REQUIRED REDUCTION.—If the total of the
peanut acres for a farm, together with the acreage de-
scribed in paragraph (3), exceeds the actual cropland
acreage of the farm, the Secretary shall reduce the
quantity of peanut acres for the farm or contract
acreage for 1 or more covered commodities for the
farm as necessary so that the total of the peanut acres
and acreage described in paragraph (3) does not ex-
ceed the actual cropland acreage of the farm.
‘‘(2) SELECTION OF ACRES.—The Secretary shall
give the peanut producers on the farm the oppor-
tunity to select the peanut acres or contract acreage
against which the reduction will be made.
‘‘(3) OTHER ACREAGE.—For purposes of para-
graph (1), the Secretary shall include—
122
HR 2646 EAS/PP
‘‘(A) any contract acreage for the farm
under subtitle B;
‘‘(B) any acreage on the farm enrolled in
the conservation reserve program or wetlands re-
serve program under chapter 1 of subtitle D of
title XII of the Food Security Act of 1985 (16
U.S.C. 3830 et seq.); and
‘‘(C) any other acreage on the farm enrolled
in a conservation program for which payments
are made in exchange for not producing an agri-
cultural commodity on the acreage.
‘‘(3) DOUBLE-CROPPED ACREAGE.—In applying
paragraph (1), the Secretary shall take into account
additional acreage as a result of an established dou-
ble-cropping history on a farm, as determined by the
Secretary.
‘‘SEC. 158C. DIRECT PAYMENTS FOR PEANUTS.
‘‘(a) IN GENERAL.—For each of the 2002 through 2006
fiscal years, the Secretary shall make direct payments to
peanut producers on a farm with peanut acres under sec-
tion 158B and a payment yield for peanuts under section
158B.
‘‘(b) PAYMENT RATE.—The payment rate used to make
direct payments with respect to peanuts for a fiscal year
shall be equal to $0.018 per pound.
123
HR 2646 EAS/PP
‘‘(c) PAYMENT AMOUNT.—The amount of the direct
payment to be paid to the peanut producers on a farm for
peanuts for a fiscal year shall be equal to the product ob-
tained by multiplying—
‘‘(1) the payment rate specified in subsection (b);
‘‘(2) the payment acres on the farm; by
‘‘(3) the payment yield for the farm.
‘‘(d) TIME FOR PAYMENT.—
‘‘(1) IN GENERAL.—The Secretary shall make di-
rect payments—
‘‘(A) in the case of the 2002 fiscal year,
during the period beginning December 1, 2001,
and ending September 30, 2002; and
‘‘(B) in the case of each of the 2003 through
2006 fiscal years, not later than September 30 of
the fiscal year.
‘‘(2) ADVANCE PAYMENTS.—
‘‘(A) IN
GENERAL.—At the option of the
peanut producers on a farm, the Secretary shall
pay 50 percent of the direct payment for a fiscal
year for the producers on the farm on a date se-
lected by the peanut producers on the farm.
‘‘(B) SELECTED DATE.—The selected date
for a fiscal year shall be on or after December
1 of the fiscal year.
124
HR 2646 EAS/PP
‘‘(C) SUBSEQUENT
FISCAL
YEARS.—The
peanut producers on a farm may change the se-
lected date for a subsequent fiscal year by pro-
viding advance notice to the Secretary.
‘‘(3) REPAYMENT
OF
ADVANCE
PAYMENTS.—If
any peanut producer on a farm that receives an ad-
vance direct payment for a fiscal year ceases to be eli-
gible for a direct payment before the date the direct
payment would have been made by the Secretary
under paragraph (1), the peanut producer shall be re-
sponsible for repaying the Secretary the full amount
of the advance payment.
‘‘SEC. 158D. COUNTER-CYCLICAL PAYMENTS FOR PEANUTS.
‘‘(a) IN GENERAL.—For each of the 2002 through 2006
crops of peanuts, the Secretary shall make counter-cyclical
payments with respect to peanuts if the Secretary deter-
mines that the effective price for peanuts is less than the
income protection price for peanuts.
‘‘(b) EFFECTIVE PRICE.—For purposes of subsection
(a), the effective price for peanuts is equal to the total of—
‘‘(1) the greater of—
‘‘(A) the national average market price re-
ceived by peanut producers during the marketing
season for peanuts, as determined by the Sec-
retary; or
125
HR 2646 EAS/PP
‘‘(B) the national average loan rate for a
marketing assistance loan for peanuts under sec-
tion 158G in effect for the marketing season for
peanuts under this chapter; and
‘‘(2) the payment rate in effect for peanuts under
section 158C for the purpose of making direct pay-
ments with respect to peanuts.
‘‘(c) INCOME PROTECTION PRICE.—For purposes of
subsection (a), the income protection price for peanuts shall
be equal to $520 per ton.
‘‘(d) PAYMENT AMOUNT.—The amount of the counter-
cyclical payment to be paid to the peanut producers on a
farm for a crop year shall be equal to the product obtained
by multiplying—
‘‘(1) the payment rate specified in subsection (e);
‘‘(2) the payment acres on the farm; by
‘‘(3) the payment yield for the farm.
‘‘(e) PAYMENT RATE.—The payment rate used to make
counter-cyclical payments with respect to peanuts for a
crop year shall be equal to the difference between—
‘‘(1) the income protection price for peanuts; and
‘‘(2) the effective price determined under sub-
section (b) for peanuts.
‘‘(f) TIME FOR PAYMENTS.—
126
HR 2646 EAS/PP
‘‘(1) IN
GENERAL.—The Secretary shall make
counter-cyclical payments to peanut producers on a
farm under this section for a crop of peanuts as soon
as practicable after determining under subsection (a)
that the payments are required for the crop year.
‘‘(2) PARTIAL PAYMENT.—
‘‘(A) IN
GENERAL.—At the option of the
Secretary, the peanut producers on a farm may
elect to receive up to 40 percent of the projected
counter-cyclical payment to be made under this
section for a crop of peanuts on completion of the
first 2 months of the marketing season for the
crop, as determined by the Secretary.
‘‘(B) REPAYMENT.—The peanut producers
on a farm shall repay to the Secretary the
amount, if any, by which the payment received
by producers on the farm (including any partial
payments) exceeds the counter-cyclical payment
the producers on the farm are eligible for under
this section.
‘‘SEC. 158E. PRODUCER AGREEMENTS.
‘‘(a) COMPLIANCE WITH CERTAIN REQUIREMENTS.—
‘‘(1) REQUIREMENTS.—Before the peanut pro-
ducers on a farm may receive direct payments or
counter-cyclical payments with respect to the farm,
127
HR 2646 EAS/PP
the peanut producers on the farm shall agree during
the fiscal year or crop year, respectively, for which the
payments 
are 
received, 
in 
exchange 
for 
the
payments—
‘‘(A) to comply with applicable highly erod-
ible land conservation requirements under sub-
title B of title XII of the Food Security Act of
1985 (16 U.S.C. 3811 et seq.);
‘‘(B) to comply with applicable wetland
conservation requirements under subtitle C of
title XII of that Act (16 U.S.C. 3821 et seq.);
‘‘(C) to comply with the planting flexibility
requirements of section 158F; and
‘‘(D) to use a quantity of the land on the
farm equal to the peanut acres, for an agricul-
tural or conserving use, and not for a non-
agricultural commercial or industrial use, as de-
termined by the Secretary.
‘‘(2) COMPLIANCE.—The Secretary may promul-
gate such regulations as the Secretary considers nec-
essary to ensure peanut producer compliance with
paragraph (1).
‘‘(b) FORECLOSURE.—
‘‘(1) IN GENERAL.—The Secretary shall not re-
quire the peanut producers on a farm to repay a di-
129
HR 2646 EAS/PP
‘‘(2) EFFECTIVE DATE.—The termination takes
effect on the date of the transfer or change.
‘‘(3) TRANSFER OF PAYMENT BASE AND YIELD.—
The Secretary shall not impose any restriction on the
transfer of the peanut acres or payment yield of a
farm as part of a transfer or change described in
paragraph (1).
‘‘(4) MODIFICATION.—At the request of the trans-
feree or owner, the Secretary may modify the require-
ments of subsection (a) if the modifications are con-
sistent with the purposes of subsection (a), as deter-
mined by the Secretary.
‘‘(5) EXCEPTION.—If a peanut producer entitled
to a direct payment or counter-cyclical payment dies,
becomes incompetent, or is otherwise unable to receive
the payment, the Secretary shall make the payment,
in accordance with regulations promulgated by the
Secretary.
‘‘(d) ACREAGE REPORTS.—As a condition on the re-
ceipt of any benefits under this chapter, the Secretary shall
require the peanut producers on a farm to submit to the
Secretary acreage reports for the farm.
‘‘(e) TENANTS
AND SHARECROPPERS.—In carrying
out this chapter, the Secretary shall provide adequate safe-
guards to protect the interests of tenants and sharecroppers.
130
HR 2646 EAS/PP
‘‘(f) SHARING
OF PAYMENTS.—The Secretary shall
provide for the sharing of direct payments and counter-cy-
clical payments among the peanut producers on a farm on
a fair and equitable basis.
‘‘SEC. 158F. PLANTING FLEXIBILITY.
‘‘(a) PERMITTED CROPS.—Subject to subsection (b),
any commodity or crop may be planted on peanut acres
on a farm.
‘‘(b) LIMITATIONS AND EXCEPTIONS REGARDING CER-
TAIN COMMODITIES.—
‘‘(1) LIMITATIONS.—The planting of the fol-
lowing agricultural commodities shall be prohibited
on peanut acres:
‘‘(A) Fruits.
‘‘(B) Vegetables (other than lentils, mung
beans, and dry peas).
‘‘(C) In the case of the 2003 and subsequent
crops of an agricultural commodity, wild rice.
‘‘(2) EXCEPTIONS.—Paragraph (1) shall not
limit the planting of an agricultural commodity spec-
ified in paragraph (1)—
‘‘(A) in any region in which there is a his-
tory of double-cropping of peanuts with agricul-
tural commodities specified in paragraph (1), as
131
HR 2646 EAS/PP
determined by the Secretary, in which case the
double-cropping shall be permitted;
‘‘(B) on a farm that the Secretary deter-
mines has a history of planting agricultural
commodities specified in paragraph (1) on pea-
nut acres, except that direct payments and
counter-cyclical payments shall be reduced by an
acre for each acre planted to the agricultural
commodity; or
‘‘(C) by the peanut producers on a farm
that the Secretary determines has an established
planting history of a specific agricultural com-
modity specified in paragraph (1), except that—
‘‘(i) the quantity planted may not ex-
ceed the average annual planting history of
the agricultural commodity by the peanut
producers on the farm during the 1996
through 2001 crop years (excluding any
crop year in which no plantings were
made), as determined by the Secretary; and
‘‘(ii) direct payments and counter-cy-
clical payments shall be reduced by an acre
for each acre planted to the agricultural
commodity.
132
HR 2646 EAS/PP
‘‘SEC. 158G. MARKETING ASSISTANCE LOANS AND LOAN DE-
FICIENCY PAYMENTS FOR PEANUTS.
‘‘(a) NONRECOURSE LOANS AVAILABLE.—
‘‘(1) AVAILABILITY.—For each of the 2002
through 2006 crops of peanuts, the Secretary shall
make available to peanut producers on a farm non-
recourse marketing assistance loans for peanuts pro-
duced on the farm.
‘‘(2) TERMS AND CONDITIONS.—The loans shall
be made under terms and conditions that are pre-
scribed by the Secretary and at the loan rate estab-
lished under subsection (b).
‘‘(3) ELIGIBLE PRODUCTION.—The producers on
a farm shall be eligible for a marketing assistance
loan under this section for any quantity of peanuts
produced on the farm.
‘‘(4) TREATMENT OF CERTAIN COMMINGLED COM-
MODITIES.—In carrying out this section, the Sec-
retary shall make loans to peanut producers on a
farm that would be eligible to obtain a marketing as-
sistance loan but for the fact the peanuts owned by
the peanut producers on the farm are commingled
with other peanuts of other producers in facilities un-
licensed for the storage of agricultural commodities by
the Secretary or a State licensing authority, if the
peanut producers on a farm obtaining the loan agree
133
HR 2646 EAS/PP
to immediately redeem the loan collateral in accord-
ance with section 158E.
‘‘(5) OPTIONS FOR OBTAINING LOAN.—A mar-
keting assistance loan under this subsection, and loan
deficiency payments under subsection (e), may be ob-
tained at the option of the peanut producers on a
farm through—
‘‘(A) a designated marketing association of
peanut producers that is approved by the Sec-
retary, which may own or construct necessary
storage facilities. In the Southeast and Southwest
areas such designated marketing association
shall be operated primarily on behalf of peanut
producers. The designated area marketing asso-
ciation shall be allowed to form marketing pools
for peanuts by type and quality, including the
creation of a separate pool for Valencia peanuts
in New Mexico;
‘‘(B) the Farm Service Agency; or
‘‘(C) a loan servicing agent approved by the
Secretary.
‘‘(6) LOAN SERVICING AGENT.—If approved by a
majority of historical peanut producers in a State
voting in a referendum conducted by the Secretary, as
a condition of the Secretary’s approval of an entity
134
HR 2646 EAS/PP
to serve as a loan servicing agent or to handle or store
peanuts for producers that receive any marketing loan
benefits in the State, the entity shall agree to provide
adequate storage (if available) and handling of pea-
nuts at the commercial rate to other approved loan
servicing agents and marketing associations.
‘‘(b) LOAN RATE.—The loan rate for a marketing as-
sistance loan for peanuts under subsection (a) shall be equal
to $400 per ton.
‘‘(c) TERM OF LOAN.—
‘‘(1) IN GENERAL.—A marketing assistance loan
for peanuts under subsection (a) shall have a term of
9 months beginning on the first day of the first month
after the month in which the loan is made.
‘‘(2) EXTENSIONS PROHIBITED.—The Secretary
may not extend the term of a marketing assistance
loan for peanuts under subsection (a).
‘‘(d) REPAYMENT RATE.—The Secretary shall permit
peanut producers on a farm to repay a marketing assist-
ance loan for peanuts under subsection (a) at a rate that
is the lesser of—
‘‘(1) the loan rate established for peanuts under
subsection (b), plus interest (as determined by the
Secretary); or
‘‘(2) a rate that the Secretary determines will—
135
HR 2646 EAS/PP
‘‘(A) minimize potential loan forfeitures;
‘‘(B) minimize the accumulation of stocks of
peanuts by the Federal Government;
‘‘(C) minimize the cost incurred by the Fed-
eral Government in storing peanuts; and
‘‘(D) allow peanuts produced in the United
States to be marketed freely and competitively,
both domestically and internationally.
‘‘(e) LOAN DEFICIENCY PAYMENTS.—
‘‘(1) AVAILABILITY.—The Secretary may make
loan deficiency payments available to the peanut pro-
ducers on a farm that, although eligible to obtain a
marketing assistance loan for peanuts under sub-
section (a), agree to forgo obtaining the loan for the
peanuts in return for payments under this subsection.
‘‘(2) AMOUNT.—A loan deficiency payment
under 
this 
subsection 
shall 
be 
obtained 
by
multiplying—
‘‘(A) the loan payment rate determined
under paragraph (3) for peanuts; by
‘‘(B) the quantity of the peanuts produced
by the peanut producers on the farm, excluding
any quantity for which the producers on the
farm obtain a loan under subsection (a).
136
HR 2646 EAS/PP
‘‘(3) LOAN PAYMENT RATE.—For purposes of this
subsection, the loan payment rate shall be the amount
by which—
‘‘(A) the loan rate established under sub-
section (b); exceeds
‘‘(B) the rate at which a loan may be re-
paid under subsection (d).
‘‘(4) TIME FOR PAYMENT.—The Secretary shall
make a payment under this subsection to the peanut
producers on a farm with respect to a quantity of
peanuts as of the earlier of—
‘‘(A) the date on which the peanut pro-
ducers on the farm marketed or otherwise lost
beneficial interest in the peanuts, as determined
by the Secretary; or
‘‘(B) the date the peanut producers on the
farm request the payment.
‘‘(f) COMPLIANCE WITH CONSERVATION REQUIRE-
MENTS.—As a condition of the receipt of a marketing assist-
ance loan under subsection (a), the peanut producers on a
farm shall comply during the term of the loan with—
‘‘(1) applicable highly erodible land conservation
requirements under subtitle B of title XII of the Food
Security Act of 1985 (16 U.S.C. 3811 et seq.); and
137
HR 2646 EAS/PP
‘‘(2) applicable wetland conservation require-
ments under subtitle C of title XII of that Act (16
U.S.C. 3821 et seq.).
‘‘(g) REIMBURSABLE AGREEMENTS AND PAYMENT OF
EXPENSES.—To the maximum extent practicable, the Sec-
retary shall implement any reimbursable agreements or
provide for the payment of expenses under this chapter in
a manner that is consistent with the implementation of the
agreements or payment of the expenses for other commod-
ities.
‘‘(h) AREA MARKETING ASSOCIATION COSTS.—If ap-
proved by a majority of historical peanut producers in a
State voting in a referendum conducted by the Secretary,
the Secretary shall deduct in a marketing assistance loan
made to an area marketing association in a marketing area
in the State, such costs as the area marketing association
may reasonably incur in carrying out the responsibilities,
operations, and activities of the association and Commodity
Credit Corporation under this section.
‘‘(i) DEFINITION OF COMMINGLE.—In this section and
section 158H, the term ‘commingle’, with respect to pea-
nuts, means—
‘‘(1) the mixing of peanuts produced on different
farms by the same or different producers; or
138
HR 2646 EAS/PP
‘‘(2) the mixing of peanuts pledged for marketing
assistance loans with peanuts that are not pledged for
marketing assistance loans, to facilitate storage.
‘‘SEC. 158H. QUALITY IMPROVEMENT.
‘‘(a) OFFICIAL INSPECTION.—
‘‘(1) IN GENERAL.—All peanuts placed under a
marketing assistance loan under section 158G or oth-
erwise sold or marketed shall be officially inspected
and graded by a Federal or State inspector.
‘‘(2) ACCOUNTING FOR COMMINGLED PEANUTS.—
If approved by a majority of historical peanut pro-
ducers in a State voting in a referendum conducted
by the Secretary, all peanuts stored commingled with
peanuts covered by a marketing assistance loan in the
State shall be graded and exchanged on a dollar value
basis, unless the Secretary determines that the bene-
ficial interest in the peanuts covered by the marketing
assistance loan have been transferred to other parties
prior to demand for delivery.
‘‘(b) TERMINATION OF PEANUT ADMINISTRATIVE COM-
MITTEE.—The Peanut Administrative Committee estab-
lished under Marketing Agreement No. 1436, which regu-
lates the quality of domestically produced peanuts under
the Agricultural Adjustment Act (7 U.S.C. 601 et seq.), re-
139
HR 2646 EAS/PP
enacted with amendments by the Agricultural Marketing
Agreement Act of 1937, is terminated.
‘‘(c) 
ESTABLISHMENT
OF
PEANUT
STANDARDS
BOARD.—
‘‘(1) IN GENERAL.—The Secretary shall establish
a Peanut Standards Board for the purpose of assist-
ing in the establishment of quality standards with re-
spect to peanuts.
‘‘(2) COMPOSITION.—The Secretary shall appoint
members to the Board that, to the maximum extent
practicable, reflect all regions and segments of the
peanut industry.
‘‘(3) DUTIES.—The Board shall assist the Sec-
retary in establishing quality standards for peanuts.
‘‘(d) CROPS.—This section shall apply beginning with
the 2002 crop of peanuts.’’.
(b) CONFORMING AMENDMENTS.—
(1) The chapter heading of chapter 2 of subtitle
D of the Federal Agriculture Improvement and Re-
form Act of 1996 (7 U.S.C. prec. 7271) is amended
by striking ‘‘PEANUTS AND’’.
(2) Section 155 of the Federal Agriculture Im-
provement and Reform Act of 1996 (7 U.S.C. 7271)
is repealed.
140
HR 2646 EAS/PP
SEC. 152. TERMINATION OF MARKETING QUOTAS FOR PEA-
NUTS 
AND 
COMPENSATION 
TO 
PEANUT
QUOTA HOLDERS.
(a) REPEAL OF MARKETING QUOTAS FOR PEANUTS.—
Effective beginning with the 2002 crop of peanuts, part VI
of subtitle B of title III of the Agricultural Adjustment Act
of 1938 (7 U.S.C. 1357 et seq.) is repealed.
(b) COMPENSATION OF QUOTA HOLDERS.—
(1) DEFINITIONS.—In this subsection:
(A) PEANUT QUOTA HOLDER.—
(i) IN
GENERAL.—The term ‘‘peanut
quota holder’’ means a person or entity that
owns a farm that—
(I) held a peanut quota estab-
lished for the farm for the 2001 crop of
peanuts under part VI of subtitle B of
title III of the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1357 et seq.) (as
in effect before the amendment made by
subsection (a));
(II) if there was not such a quota
established for the farm for the 2001
crop of peanuts, would be eligible to
have such a quota established for the
farm for the 2002 crop of peanuts, in
141
HR 2646 EAS/PP
the absence of the amendment made by
subsection (a); or
(III) is otherwise a farm that was
eligible for such a quota as of the effec-
tive date of the amendments made by
this section.
(ii) SEED
OR
EXPERIMENTAL
PUR-
POSES.—The Secretary shall apply the defi-
nition of ‘‘peanut quota holder’’ without re-
gard to temporary leases, transfers, or
quotas for seed or experimental purposes.
(B) SECRETARY.—The term ‘‘Secretary’’
means the Secretary of Agriculture.
(2) CONTRACTS.—The Secretary shall offer to
enter into a contract with peanut quota holders for
the purpose of providing compensation for the lost
value of quota as a result of the repeal of the mar-
keting quota program for peanuts under the amend-
ment made by subsection (a).
(3) PAYMENT PERIOD.—Under a contract, the
Secretary shall make payments to an eligible peanut
quota holder for each of fiscal years 2002 through
2006.
(4) TIME
FOR
PAYMENT.—The payments re-
quired under the contracts shall be provided in 5
142
HR 2646 EAS/PP
equal installments not later than September 30 of
each of fiscal years 2002 through 2006.
(5) PAYMENT AMOUNT.—The amount of the pay-
ment for a fiscal year to a peanut quota holder under
a contract shall be equal to the product obtained by
multiplying—
(A) $0.11 per pound; by
(B) the actual farm poundage quota (ex-
cluding any quantity for seed and experimental
peanuts) established for the farm of a peanut
quota holder under section 358–1(b) of the Agri-
cultural Adjustment Act of 1938 (7 U.S.C. 1358–
1(b)) (as in effect prior to the amendment made
by subsection (a)) for the 2001 marketing year.
(6) ASSIGNMENT OF PAYMENTS.—
(A) IN GENERAL.—The provisions of section
8(g) of the Soil Conservation and Domestic Al-
lotment Act (16 U.S.C. 590h(g)), relating to as-
signment of payments, shall apply to the pay-
ments made to peanut quota holders under the
contracts.
(B) NOTICE.—The peanut quota holder
making the assignment, or the assignee, shall
provide the Secretary with notice, in such man-
143
HR 2646 EAS/PP
ner as the Secretary may require, of any assign-
ment made under this subsection.
(c) CONFORMING AMENDMENTS.—
(1) ADMINISTRATIVE PROVISIONS.—Section 361
of the Agricultural Adjustment Act of 1938 (7 U.S.C.
1361) is amended by striking ‘‘peanuts,’’.
(2) ADJUSTMENT OF QUOTAS.—Section 371 of
the Agricultural Adjustment Act of 1938 (7 U.S.C.
1371) is amended—
(A) in the first sentence of subsection (a), by
striking ‘‘peanuts,’’; and
(B) in the first sentence of subsection (b), by
striking ‘‘peanuts’’.
(3) REPORTS AND RECORDS.—Section 373 of the
Agricultural Adjustment Act of 1938 (7 U.S.C. 1373)
is amended—
(A) in the first sentence of subsection (a)—
(i) by striking ‘‘peanuts,’’ each place it
appears;
(ii) by inserting ‘‘and’’ after ‘‘from
producers,’’; and
(iii) by striking ‘‘for producers, all’’
and all that follows through the period at
the end of the sentence and inserting ‘‘for
producers.’’; and
144
HR 2646 EAS/PP
(B) in subsection (b), by striking ‘‘pea-
nuts,’’.
(4) EMINENT DOMAIN.—Section 378(c) of the Ag-
ricultural Adjustment Act of 1938 (7 U.S.C. 1378(c))
is amended in the first sentence—
(A) by striking ‘‘cotton,’’ and inserting
‘‘cotton and’’; and
(B) by striking ‘‘and peanuts,’’.
(d) CROPS.—This section and the amendments made
by this section apply beginning with the 2002 crop of pea-
nuts.
Subtitle D—Administration
SEC. 161. MARKETING ORDERS FOR CANEBERRIES.
(a) IN GENERAL.—Section 8c of the Agricultural Ad-
justment Act (7 U.S.C. 608c), reenacted with amendments
by the Agricultural Marketing Agreement Act of 1937, is
amended—
(1) 
in 
subsection 
(2)(A), 
by 
inserting
‘‘caneberries (including raspberries, blackberries, and
loganberries),’’ after ‘‘other than pears, olives, grape-
fruit, cherries,’’; and
(2) in subsection (6)(I), by striking ‘‘tomatoes,,’’
and inserting ‘‘tomatoes, caneberries (including rasp-
berries, blackberries, and loganberries),’’.
145
HR 2646 EAS/PP
(b) CONFORMING AMENDMENT.—Section 8e(a) of the
Agricultural Adjustment Act (7 U.S.C. 608e–l(a)), reen-
acted with amendments by the Agricultural Marketing
Agreement Act of 1937, is amended in the first sentence by
striking ‘‘or apples’’ and inserting ‘‘apples, or caneberries
(including raspberries, blackberries, and loganberries)’’.
SEC. 162. RESERVE STOCK LEVEL.
Section 301(b)(14)(C) of the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1301(b)(14)(C)) is amended—
(1) in clause (i), by striking ‘‘100,000,000’’ and
inserting ‘‘75,000,000’’; and
(2) in clause (ii), by striking ‘‘15 percent’’ and
inserting ‘‘10 percent’’.
SEC. 163. FARM RECONSTITUTIONS.
(a) IN GENERAL.—Section 316(a)(1)(A)(ii) of the Ag-
ricultural 
Adjustment 
Act 
of 
1938 
(7 
U.S.C.
1314b(a)(1)(A)(ii)) is amended by adding at the end the
following: ‘‘Notwithstanding any other provision of law, for
the 2002 crop only, the Secretary shall allow special farm
reconstitutions, in lieu of lease and transfer of allotments
and quotas, under this section, in accordance with such con-
ditions as are established by the Secretary.’’.
(b) STUDY.—
(1) IN GENERAL.—The Secretary of Agriculture
shall conduct a study on the effects on the limitation
146
HR 2646 EAS/PP
on producers to move quota to a farm other than the
farm to which the quota was initially assigned under
part I of subtitle B of title III of the Agricultural Ad-
justment Act of 1938 (7 U.S.C. 1311 et seq.).
(2) REPORT.—Not later than 90 days after the
date of enactment of this Act, the Secretary shall sub-
mit to the Committee on Agriculture of the House of
Representatives and the Committee on Agriculture,
Nutrition, and Forestry of the Senate a report on the
results of the study.
SEC. 164. ADJUSTMENT AUTHORITY RELATED TO URUGUAY
ROUND COMPLIANCE.
Section 161 of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 7281) is amended by
adding at the end the following:
‘‘(e) ADJUSTMENT AUTHORITY RELATED TO URUGUAY
ROUND COMPLIANCE.—If the Secretary determines that ex-
penditures under subtitles A through D that are subject to
the total allowable domestic support levels under the Uru-
guay Round Agreements (as defined in section 2 of the Uru-
guay Round Agreements Act (19 U.S.C. 3501)), as in effect
on the date of enactment of this subsection, will exceed the
allowable levels for any applicable reporting period, the
Secretary may make adjustments in the amount of the ex-
147
HR 2646 EAS/PP
penditures to ensure that the expenditures do not exceed,
but are not less than, the allowable levels.
‘‘(f) EXPENDITURE LIMITATION.—If the Secretary
makes a determination under subsection (e) that expendi-
tures will exceed allowable levels for any applicable report-
ing period and notifies Congress of the Secretary’s intent
to make adjustments to ensure that expenditures do not ex-
ceed allowable levels, no expenditures under any program
proposed to be adjusted by the Secretary may be made after
the date that is 18 months after the date of the determina-
tion, unless a joint resolution disapproving the adjustments
is enacted by both Houses of Congress within 60 days of
the date of the notification.
‘‘(g) ANNUAL REPORT ON DOMESTIC SUPPORT.—Not
later than April 30 of each year, the Secretary shall submit
to the Committee on Agriculture of the House of Representa-
tives and the Committee on Agriculture, Nutrition, and
Forestry of the Senate a report that describes—
‘‘(1) estimated levels of domestic support for ag-
ricultural commodities during the current marketing
year and the following marketing year;
‘‘(2) the manner in which the Secretary intends
to notify the World Trade Organization of the esti-
mated levels; and
148
HR 2646 EAS/PP
‘‘(3) proposed changes to domestic support pro-
grams subject to reduction commitments made in the
context of WTO trade negotiations.’’.
SEC. 165. SUSPENSION OF PERMANENT PRICE SUPPORT AU-
THORITY.
Section 171 of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 7301) is amended—
(1) by striking ‘‘2002’’ each place it appears and
inserting ‘‘2006’’; and
(2) in subsection (a)(1)—
(A) by striking subparagraph (E); and
(B) by redesignating subparagraphs (F)
through (I) as subparagraphs (E) through (H),
respectively.
SEC. 166. COMMODITY PURCHASES.
(a) IN GENERAL.—Section 191 of the Federal Agri-
culture Improvement and Reform Act of 1996 (7 U.S.C.
7331 et seq.) is amended to read as follows:
‘‘SEC. 191. COMMODITY PURCHASES.
‘‘(a) IN GENERAL.—To purchase agricultural com-
modities under this section, the Secretary shall use funds
of the Commodity Credit Corporation in an amount equal
to—
149
HR 2646 EAS/PP
‘‘(1) for each of fiscal years 2002 and 2003,
$130,000,000, of which not less than $100,000,000
shall be used for the purchase of specialty crops;
‘‘(2) for fiscal year 2004, $150,000,000, of which
not less than $120,000,000 shall be used for the pur-
chase of specialty crops;
‘‘(3) for fiscal year 2005, $170,000,000, of which
not less than $140,000,000 shall be used for the pur-
chase of specialty crops;
‘‘(4) for fiscal year 2006, $200,000,000, of which
not less than $170,000,000 shall be used for the pur-
chase of specialty crops; and
‘‘(5) for fiscal year 2007, $0.
‘‘(b) OTHER PURCHASES.—The Secretary shall ensure
that purchases of agricultural commodities under this sec-
tion are in addition to purchases by the Secretary under
any other law.
‘‘(c) PURCHASES BY DEPARTMENT OF DEFENSE FOR
SCHOOL LUNCH PROGRAM.—The Secretary shall provide
not less than $50,000,000 for each fiscal year of the funds
made available under subsection (a) to the Secretary of De-
fense to purchase fresh fruits and vegetables for distribution
to schools and service institutions in accordance with sec-
tion 6(a) of the Richard B. Russell National School Lunch
150
HR 2646 EAS/PP
Act (42 U.S.C. 1755(a)) in a manner prescribed by the Sec-
retary of Agriculture.
‘‘(d) PURCHASES FOR EMERGENCY FOOD ASSISTANCE
PROGRAM.—The Secretary shall use not less than
$40,000,000 for each fiscal year of the funds made available
under subsection (a) to purchase agricultural commodities
for distribution under the Emergency Food Assistance Act
of 1983 (7 U.S.C. 7501 et seq.).’’.
(b) SENSE OF THE SENATE CONCERNING PURCHASES
OF CRANBERRIES.—
(1) FINDINGS.—Congress finds that—
(A) the price per hundred pounds of cran-
berries has dropped from approximately $70 to
approximately $10;
(B) the cost of producing cranberries is be-
tween $30 and $35 per hundred pounds, which
is much more than the price per hundred pounds
of cranberries for each of the past 2 years;
(C) there is a serious economic crisis among
cranberry growers in the United States, espe-
cially in the States of Wisconsin, Massachusetts,
and New Jersey;
(D) the Cranberry Marketing Committee
has issued 2 marketing orders, but the marketing
orders have not led to higher prices;
151
HR 2646 EAS/PP
(E) although Congress directed the Sec-
retary of Agriculture to use $30,000,000 to pur-
chase cranberries in fiscal year 2001, the price
of cranberries has not risen significantly; and
(F) the cranberry industry faces a surplus
of cranberries and continuing low prices for
cranberries.
(2) SENSE OF THE SENATE.—It is the sense of
the Senate that the Secretary of Agriculture should
attempt to alleviate the economic crisis among cran-
berry growers by continuing to expend for each fiscal
year for the purchase of cranberries the same amount
as the Secretary expended for fiscal year 2001.
SEC. 167. HARD WHITE WHEAT INCENTIVE PAYMENTS.
Section 193 of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 1508) is amended to
read as follows:
‘‘SEC. 193. HARD WHITE WHEAT INCENTIVE PAYMENTS.
‘‘(a) IN GENERAL.—For the period of crop years 2003
through 2005, the Secretary shall use $40,000,000 of funds
of the Commodity Credit Corporation to provide incentive
payments to producers of hard white wheat to ensure that
hard white wheat, produced on a total of not more than
2,000,000 acres, meets minimum quality standards estab-
lished by the Secretary.
152
HR 2646 EAS/PP
‘‘(b) APPLICATION.—The amounts payable to pro-
ducers in the form of payments under this section shall be
determined through the submission of bids by producers in
such manner as the Secretary may prescribe.
‘‘(c) DEMAND FOR WHEAT.—To be eligible to obtain
a payment under this section, a producer shall demonstrate
to the Secretary the availability of buyers and end-users
for the wheat that is the covered by the payment.’’.
SEC. 168. LIVESTOCK ASSISTANCE PROGRAM.
Section 194 of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 6933) is amended to
read as follows:
‘‘SEC. 194. LIVESTOCK ASSISTANCE PROGRAM.
‘‘(a) IN GENERAL.—The Secretary shall carry out a
program to provide livestock feed assistance to livestock pro-
ducers affected by disasters.
‘‘(b) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this section
$500,000,000 for each of fiscal years 2003 through 2008.’’.
SEC. 169. PAYMENT LIMITATIONS; NUTRITION AND COM-
MODITY PROGRAMS.
(a) PAYMENT LIMITATIONS.—
(1) IN GENERAL.—Section 1001 of the Food Se-
curity Act of 1985 (7 U.S.C. 1308) is amended to
read as follows:
153
HR 2646 EAS/PP
‘‘SEC. 1001. PAYMENT LIMITATIONS.
‘‘(a) DEFINITIONS.—In this section and sections
1001A through 1001F:
‘‘(1) BENEFICIAL
INTEREST.—The term ‘bene-
ficial interest’ means an interest in an entity that is
at least—
‘‘(A) 10 percent; or
‘‘(B) a lower percentage, which the Sec-
retary shall establish, on a case-by-case basis, as
needed to achieve the purposes of this section and
sections 1001A through 1001F, including effec-
tive implementation of section 1001A(b).
‘‘(2) COUNTER-CYCLICAL
PAYMENT.—The term
‘counter-cyclical payment’ means a payment made
under section 114 or 158D of the Federal Agriculture
Improvement and Reform Act of 1996.
‘‘(3) DIRECT PAYMENT.—The term ‘direct pay-
ment’ means a payment made under section 113 or
158C of the Federal Agriculture Improvement and
Reform Act of 1996.
‘‘(4) ENTITY.—
‘‘(A) IN
GENERAL.—The term ‘entity’
means—
‘‘(i) an entity that (subject to the re-
quirements of this section and section
154
HR 2646 EAS/PP
1001A) is eligible to receive a payment
under subsection (b) or (c);
‘‘(ii) a corporation, joint stock com-
pany, 
association, 
limited 
partnership,
charitable organization, a grantor of a rev-
ocable trust, or other similar entity (as de-
termined by the Secretary); and
‘‘(iii) an entity that is participating
in a farming operation as a partner in a
general partnership or as a participant in
a joint venture.
‘‘(B) 
EXCLUSION.—Except 
in 
section
1001F, the term ‘entity’ does not include an enti-
ty that is a general partnership or joint venture.
‘‘(5) 
INDIVIDUAL.—The 
term 
‘individual’
means—
‘‘(A) a natural person, and minor children
of the natural person (as determined by the Sec-
retary), that (subject to the requirements of this
section and section 1001A) is eligible to receive
a payment under subsection (b) or (c); and
‘‘(B) an individual participating in a
farming operation as a partner in a general
partnership, a participant in a joint venture, a
grantor of a revocable trust, or a participant in
155
HR 2646 EAS/PP
a similar entity (as determined by the Sec-
retary).
‘‘(6) LOAN COMMODITY.—The term ‘loan com-
modity’ has the meaning given the term in section
102 of the Federal Agriculture Improvement and Re-
form Act of 1996.
‘‘(7) SECRETARY.—The term ‘Secretary’ means
the Secretary of Agriculture.
‘‘(b) LIMITATIONS ON DIRECT AND COUNTER-CYCLI-
CAL PAYMENTS.—Subject to subsections (d) through (i), the
total amount of direct payments and counter-cyclical pay-
ments that an individual or entity may receive, directly
or indirectly, during any fiscal year shall not exceed
$75,000.
‘‘(c) LIMITATIONS ON MARKETING LOAN GAINS, LOAN
DEFICIENCY PAYMENTS, AND COMMODITY CERTIFICATE
TRANSACTIONS.—
‘‘(1) IN
GENERAL.—Subject to subsections (d)
through (i), the total amount of the payments and
benefits described in paragraph (2) that an indi-
vidual or entity may receive, directly or indirectly,
during any crop year shall not exceed $150,000.
‘‘(2) PAYMENTS AND BENEFITS.—Paragraph (1)
shall apply to the following payments and benefits:
‘‘(A) MARKETING LOAN GAINS.—
156
HR 2646 EAS/PP
‘‘(i) REPAYMENT GAINS.—Any gain re-
alized by a producer from repaying a mar-
keting assistance loan under section 131 or
158G(a) of the Federal Agriculture Im-
provement and Reform Act of 1996 for a
crop of any loan commodity or peanuts, re-
spectively, at a lower level than the original
loan rate established for the loan commodity
or peanuts under section 132 or 158G(d) of
that Act, respectively.
‘‘(ii) FORFEITURE GAINS.—In the case
of settlement of a marketing assistance loan
under section 131 or 158G(a) of that Act for
a crop of any loan commodity or peanuts,
respectively, by forfeiture, the amount by
which the loan amount exceeds the repay-
ment amount for the loan if the loan had
been settled by repayment instead of for-
feiture.
‘‘(B) LOAN
DEFICIENCY
PAYMENTS.—Any
loan deficiency payment received for a loan com-
modity or peanuts under section 135 or 158G(e)
of that Act, respectively.
‘‘(C) COMMODITY CERTIFICATES.—Any gain
realized from the use of a commodity certificate
157
HR 2646 EAS/PP
issued by the Commodity Credit Corporation, as
determined by the Secretary, including the use of
a certificate for the settlement of a marketing as-
sistance loan made under section 131 or 158G(a)
of that Act.
‘‘(d) SETTLEMENT
OF CERTAIN LOANS.—Notwith-
standing subtitle C and section 158G of the Federal Agri-
culture Improvement and Reform Act of 1996, if the
amount of payments and benefits described in subsection
(c)(2) attributed directly or indirectly to an individual or
entity for a crop year reaches the limitation described in
subsection (c)(1)—
‘‘(1) the portion of any unsettled marketing as-
sistance loan made under section 131 or 158G(a) of
that Act attributed directly or indirectly to the indi-
vidual or entity shall be settled through the repay-
ment of the total loan principal, plus applicable in-
terest; and
‘‘(2) the Secretary may refuse to provide to the
producer for the crop year any additional marketing
assistance loans under section 131 or 158G(a) of that
Act.
‘‘(e) PAYMENTS TO INDIVIDUALS AND ENTITIES.—
‘‘(1) INTERESTS WITHIN THE SAME ENTITY.—All
individuals or entities that are owners of an entity,
158
HR 2646 EAS/PP
including shareholders, may not collectively receive
payments directly or indirectly that are attributable
to the ownership interests in the entity for a fiscal or
corresponding crop year that exceed the limitations
established under subsections (b) and (c).
‘‘(2) ALL INTERESTS OF AN INDIVIDUAL OR EN-
TITY.—An individual or entity may not receive, di-
rectly or indirectly, through all ownership interests of
the individual or entity from all sources, payments
for a fiscal or corresponding crop year that exceed the
limitations established under subsections (b) and (c).
‘‘(f) MARRIED COUPLES.—During a fiscal and cor-
responding crop year, the total amount of payments and
benefits described in subsections (b) and (c) that a married
couple may receive directly or indirectly may not exceed—
‘‘(1) the limits described in subsections (b) and
(c); plus
‘‘(2) if each spouse meets the other requirements
established under this section and section 1001A, a
combined total of an additional $50,000.
‘‘(g) PUBLIC SCHOOLS.—The provisions of this section
that limit payments to any individual or entity shall not
be applicable to land owned by a public school district or
land owned by a State that is used to maintain a public
school.
159
HR 2646 EAS/PP
‘‘(h) TIME LIMITS.—The Secretary shall promulgate
regulations that establish time limits for the various steps
involved with notice, hearing, decision, and the appeals pro-
cedure in order to ensure expeditious handling and settle-
ment of payment limitation disputes.
‘‘(i) GOOD FAITH RELIANCE.—Notwithstanding any
other provision of law, an action taken by an individual
or other entity in good faith on action or advice of an au-
thorized representative of the Secretary may be accepted as
meeting the requirements of this section or section 1001A,
to the extent the Secretary determines it is desirable in
order to provide fair and equitable treatment.’’.
(2) SUBSTANTIVE CHANGE.—Section 1001A(a) of
the Food Security Act of 1985 (7 U.S.C. 1308–1(a))
is amended—
(A) in the section heading, by striking
‘‘PREVENTION OF CREATION OF ENTITIES
TO QUALIFY AS SEPARATE PERSONS;’’ and
inserting ‘‘SUBSTANTIVE CHANGE;’’;
(B) by striking ‘‘(a) PREVENTION’’ and all
that follows through the end of paragraph (2)
and inserting the following:
‘‘(a) SUBSTANTIVE CHANGE.—
‘‘(1) IN GENERAL.—The Secretary may not ap-
prove (for purposes of the application of the limita-
160
HR 2646 EAS/PP
tions under this section) any change in a farming op-
eration that otherwise will increase the number of in-
dividuals or entities to which the limitations under
this section are applied unless the Secretary deter-
mines that the change is bona fide and substantive.
‘‘(2) FAMILY
MEMBERS.—For the purpose of
paragraph (1), the addition of a family member to a
farming operation under the criteria established
under subsection (b)(3)(B) shall be considered a bona
fide and substantive change in the farming oper-
ation.’’;
(C) in the first sentence of paragraph (3)—
(i) by striking ‘‘as a separate person’’;
and
(ii) by inserting ‘‘, as determined by
the Secretary’’ before the period at the end;
and
(D) by striking paragraph (4).
(3) ACTIVELY
ENGAGED
IN
FARMING.—Section
1001A(b) of the Food Security Act of 1985 (7 U.S.C.
1308–1(b)) is amended—
(A) by striking paragraph (1) and inserting
the following:
‘‘(1) IN GENERAL.—To be eligible to receive, di-
rectly or indirectly, payments or benefits (as described
161
HR 2646 EAS/PP
in subsections (b) and (c) of section 1001 as being
subject to limitation) with respect to a particular
farming operation an individual or entity shall be ac-
tively engaged in farming with respect to the oper-
ation, as provided under paragraphs (2), (3), and
(4).’’;
(B) in paragraph (2)—
(i) in subparagraph (A)(i), by striking
subclause (II) and inserting the following:
‘‘(II) personal labor and active
personal management (in accordance
with subparagraph (F));’’;
(ii) by striking subparagraph (B) and
inserting the following:
‘‘(B) ENTITIES.—An entity (as defined in
section 1001(a)) shall be considered as actively
engaged in farming with respect to a farming
operation if—
‘‘(i) the entity separately makes a sig-
nificant contribution (based on the total
value of the farming operation) of capital,
equipment, or land;
‘‘(ii)(I) the stockholders or members
that collectively own at least 50 percent of
the combined beneficial interest in the enti-
162
HR 2646 EAS/PP
ty make a significant contribution of per-
sonal labor or active personal management
to the operation; or
‘‘(II) in the case of a corporation or
entity in which all of the beneficial interests
are held by family members (as defined in
paragraph (3)(B))—
‘‘(aa) any stockholder (or house-
hold comprised of a stockholder and the
spouse of the stockholder) who owns at
least 10 percent of the beneficial inter-
est and makes a significant contribu-
tion of personal labor or active per-
sonal management; or
‘‘(bb) any combination of stock-
holders who collectively own at least 10
percent of the beneficial interest and
makes a significant contribution of
personal labor or active personal man-
agement; and
‘‘(iii) the standards provided in clauses
(ii) and (iii) of subparagraph (A), as ap-
plied to the entity, are met by the entity.’’;
and
163
HR 2646 EAS/PP
(iii) by adding at the end the fol-
lowing:
‘‘(E) ACTIVE
PERSONAL
MANAGEMENT.—
For an individual to be considered to be pro-
viding active personal management under this
paragraph on behalf of the individual or entity,
the management provided by the individual shall
be personally provided on a regular, substantial,
and continuous basis through the direct super-
vision and direction of—
‘‘(i) activities and labor involved in
the farming operation; and
‘‘(ii) onsite services that are directly
related and necessary to the farming oper-
ation.
‘‘(F) SIGNIFICANT CONTRIBUTION OF PER-
SONAL
LABOR
OR
ACTIVE
PERSONAL
MANAGE-
MENT.—
‘‘(i) IN GENERAL.—For an individual
to be considered to be providing a signifi-
cant contribution of personal labor or active
personal management under this paragraph
on behalf of the individual or entity, the
total contribution of personal labor and ac-
164
HR 2646 EAS/PP
tive personal management shall be at least
equal to the lesser of—
‘‘(I) 1,000 hours annually; or
‘‘(II) 50 percent of the commensu-
rate share of the total number of hours
of personal labor and active personal
management required to conduct the
farming operation.
‘‘(ii) MINIMUM
NUMBER
OF
LABOR
HOURS.—For the purpose of clause (i), the
minimum number of labor hours required to
produce each commodity shall be equal to
the number of hours that would be necessary
to conduct a farming operation for the pro-
duction of each commodity that is com-
parable in size to an individual or entity’s
commensurate share in the farming oper-
ation for the production of the commodity,
based on the minimum number of hours per
acre required to produce the commodity in
the State where the farming operation is lo-
cated, as determined by the Secretary.’’;
(C) in paragraph (3)—
(i) by striking subparagraph (A) and
inserting the following:
165
HR 2646 EAS/PP
‘‘(A) LANDOWNERS.—An individual or enti-
ty that is a landowner contributing the owned
land and that meets the standard provided in
clauses (ii) and (iii) of paragraph (2)(A), if—
‘‘(i) the landowner share rents the
land;
‘‘(ii) the tenant is actively engaged in
farming; and
‘‘(iii) the share received by the land-
owner is commensurate with the share of the
crop or income received as rent; or
‘‘(iv)(I) the landowner makes a signifi-
cant contribution of active personal man-
agement;
‘‘(II) the landowner formerly made a
significant contribution of personal labor or
active personal management on the land for
which payments are received and ceased to
make the contribution as a result of a dis-
ability, as determined by the Secretary; or
‘‘(III) the landowner or spouse of the
landowner formerly made a significant con-
tribution of personal labor or active per-
sonal management on the land for which
payments are received and ceased to make
166
HR 2646 EAS/PP
the contribution as a result of death or re-
tirement, and 1 or more family members of
the landowner currently make a significant
contribution of personal labor or active per-
sonal management on the land.’’; and
(ii) in subparagraph (B), by striking
‘‘persons’’ and inserting ‘‘individuals and
entities’’; and
(D) in paragraph (4)—
(i) in the paragraph heading, by strik-
ing ‘‘PERSONS’’ and inserting ‘‘INDIVID-
UALS AND ENTITIES’’;
(ii) in the matter preceding subpara-
graph (A), by striking ‘‘persons’’ and in-
serting ‘‘individuals and entities’’; and
(iii) in subparagraph (B)—
(I) in the subparagraph heading,
by striking ‘‘PERSONS’’ and inserting
‘‘INDIVIDUALS AND ENTITIES’’; and
(II) by striking ‘‘person, or class
of persons’’ and inserting ‘‘individual
or entity, or class of individuals or en-
tities’’;
(E) in paragraph (5)—
167
HR 2646 EAS/PP
(i) by striking ‘‘A person’’ and insert-
ing ‘‘An individual or entity’’; and
(ii) by striking ‘‘such person’’ and in-
serting ‘‘the individual or entity’’; and
(F) in paragraph (6), by striking ‘‘a per-
son’’ and inserting ‘‘an individual or entity’’.
(4) ADMINISTRATION.—Section 1001A of the
Food Security Act of 1985 (7 U.S.C. 1308–1) is
amended by adding at the end the following:
‘‘(c) ADMINISTRATION.—
‘‘(1) REVIEWS.—
‘‘(A) IN GENERAL.—During each of fiscal
years 2002 through 2006, the Office of Inspector
General for the Department of Agriculture shall
conduct a review of the administration of the re-
quirements of this section and sections 1001,
1001B, 1001C, and 1001E in at least 6 States.
‘‘(B) MINIMUM
NUMBER
OF
COUNTIES.—
Each State review described in subparagraph
(A) shall cover at least 5 counties in the State.
‘‘(C) REPORT.—Not later than 90 days
after completing a review described in subpara-
graph (A), the Inspector General for the Depart-
ment of Agriculture shall issue a final report to
168
HR 2646 EAS/PP
the Secretary of the findings of the Inspector
General.
‘‘(2) EFFECT OF REPORT.—If a report issued
under paragraph (1) reveals that significant problems
exist in the implementation of payment limitation re-
quirements of this section and sections 1001, 1001B,
1001C, and 1001E in a State and the Secretary
agrees that the problems exist, the Secretary—
‘‘(A) shall initiate a training program re-
garding the payment limitation requirements;
and
‘‘(B) may require that all payment limita-
tion determinations regarding farming oper-
ations in the State be issued from the head-
quarters of the Farm Service Agency.’’.
(5) SCHEME OR DEVICE.—Section 1001B of the
Food Security Act of 1985 (7 U.S.C. 1308–2) is
amended—
(A) by striking ‘‘person’’ each place it ap-
pears and inserting ‘‘individual or entity’’; and
(B) by striking ‘‘paragraphs (1) and (2)’’
and inserting ‘‘subsections (b) and (c)’’.
(6) FOREIGN INDIVIDUALS AND ENTITIES.—Sec-
tion 1001C(b) of the Food Security Act of 1985 (7
169
HR 2646 EAS/PP
U.S.C. 1308–3(b)) is amended in the first sentence by
striking ‘‘considered a person that is’’.
(7) EDUCATION PROGRAM.—Section 1001D(c) of
the Food Security Act of 1985 (7 U.S.C. 1308–4(c))
is amended by striking ‘‘5 persons’’ and inserting ‘‘5
individuals or entities’’.
(8) REPORT TO CONGRESS.—No later than 180
days after the date of enactment of this Act, the Sec-
retary of Agriculture shall provide a report to the
Committee on Agriculture of the House of Representa-
tives and the Committee on Agriculture, Nutrition,
and Forestry of the Senate that describes—
(A) how State and county office employees
are trained regarding the payment limitation re-
quirements of section 1001 through 1001E of the
Food Security Act of 1985 (7 U.S.C. 1308
through 1308–5);
(B) the general procedures used by State
and county office employees to identify potential
violations of the payment limitation require-
ments;
(C) the requirements for State and county
office employees to report serious violations of the
payment limitation requirements, including vio-
lations of section 1001B of that Act to the county
170
HR 2646 EAS/PP
committee, higher level officials of the Farm
Service Agency, and to the Office of Inspector
General; and
(D) the sanctions imposed against State
and county office employees who fail to report or
investigate potential violations of the payment
limitation requirements.
(b) ADJUSTED
GROSS
INCOME
LIMITATION.—The
Food Security Act of 1985 is amended by inserting after
section 1001E (7 U.S.C. 1308–5) the following:
‘‘SEC. 1001F. ADJUSTED GROSS INCOME LIMITATION.
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) ADJUSTED GROSS INCOME.—The term ‘ad-
justed gross income’ means adjusted gross income of
an individual or entity—
‘‘(A) as defined in section 62 of the Internal
Revenue Code of 1986 and implemented in ac-
cordance with procedures established by the Sec-
retary; and
‘‘(B) that is earned directly or indirectly
from 
all 
agricultural 
and 
nonagricultural
sources of an individual or entity for a fiscal or
corresponding crop year.
‘‘(2) AVERAGE ADJUSTED GROSS INCOME.—
171
HR 2646 EAS/PP
‘‘(A) IN GENERAL.—The term ‘average ad-
justed gross income’ means the average adjusted
gross income of an individual or entity for each
of the 3 preceding taxable years.
‘‘(B) EFFECTIVE
ADJUSTED
GROSS
IN-
COME.—In the case of an individual or entity
that does not have an adjusted gross income for
each of the 3 preceding taxable years, the Sec-
retary shall establish rules that provide the indi-
vidual or entity with an effective adjusted gross
income for the applicable year.
‘‘(b) LIMITATION.—Notwithstanding any other provi-
sion of title I of the Federal Agriculture Improvement and
Reform Act of 1996 (7 U.S.C. 7201 et seq.), an individual
or entity shall not be eligible for a payment or benefit de-
scribed in subsection (b) or (c) of section 1001 if the average
adjusted gross income of the individual or entity exceeds
$2,500,000.
‘‘(c) CERTIFICATION.—To comply with the limitation
under subsection (b), an individual or entity shall provide
to the Secretary—
‘‘(1) a certification by a certified public account-
ant or another third party that is acceptable to the
Secretary that the average adjusted gross income of
the individual or entity does not exceed $2,500,000; or
172
HR 2646 EAS/PP
‘‘(2) information and documentation regarding
the adjusted gross income of the individual or entity
through other procedures established by the Secretary.
‘‘(d) COMMENSURATE REDUCTION.—In the case of a
payment or benefit made in a fiscal year or corresponding
crop year to an entity that has an average adjusted gross
income of $2,500,000 or less, the payment shall be reduced
by an amount that is commensurate with the direct and
indirect ownership interest in the entity of each individual
who has an average adjusted gross income in excess of
$2,500,000 for that fiscal year or corresponding crop year.
‘‘(e) GENERAL
PARTNERSHIPS
AND
JOINT
VEN-
TURES.—For purposes of this section, a general partnership
or joint venture shall be considered an entity.’’.
(c) FOOD STAMP PROGRAM.—
(1) INCREASE
IN
BENEFITS
TO
HOUSEHOLDS
WITH CHILDREN.—Section 5(e) of the Food Stamp
Act of 1977 (7 U.S.C. 2014(e)) is amended by striking
paragraph (1) and inserting the following:
‘‘(1) STANDARD DEDUCTION.—
‘‘(A) IN
GENERAL.—Subject to the other
provisions of this paragraph, the Secretary shall
allow for each household a standard deduction
that is equal to the greater of—
173
HR 2646 EAS/PP
‘‘(i) the applicable percentage specified
in subparagraph (D) of the applicable in-
come standard of eligibility established
under subsection (c)(1); or
‘‘(ii) the minimum deduction specified
in subparagraph (E).
‘‘(B) GUAM.—The Secretary shall allow for
each household in Guam a standard deduction
that is—
‘‘(i) equal to the applicable percentage
specified in subparagraph (D) of twice the
income standard of eligibility established
under subsection (c)(1) for the 48 contig-
uous States and the District of Columbia;
but
‘‘(ii) not less than the minimum de-
duction for Guam specified in subpara-
graph (E).
‘‘(C) HOUSEHOLDS OF 6 OR MORE MEM-
BERS.—The income standard of eligibility estab-
lished under subsection (c)(1) for a household of
6 members shall be used to calculate the standard
deduction for each household of 6 or more mem-
bers.
174
HR 2646 EAS/PP
‘‘(D) APPLICABLE
PERCENTAGE.—For the
purpose of subparagraph (A), the applicable per-
centage shall be—
‘‘(i) 8 percent for each of fiscal years
2002 through 2004;
‘‘(ii) 8.25 percent for each of fiscal
years 2005 and 2006;
‘‘(iii) 8.5 percent for each of fiscal
years 2007 and 2008;
‘‘(iv) 8.75 percent for fiscal year 2009;
and
‘‘(v) 9 percent for each of fiscal years
2010 and 2011.
‘‘(E) MINIMUM DEDUCTION.—The minimum
deduction shall be $134, $229, $189, $269, and
$118 for the 48 contiguous States and the Dis-
trict of Columbia, Alaska, Hawaii, Guam, and
the Virgin Islands of the United States, respec-
tively.’’.
(2) EXCESS SHELTER EXPENSE DEDUCTION.—
(A) IN GENERAL.—Section 5(e)(7)(B) of the
Food 
Stamp 
Act 
of 
1977 
(7 
U.S.C.
2014(e)(7)(B)) is amended—
(i) in clause (v), by striking ‘‘and’’ at
the end; and
175
HR 2646 EAS/PP
(ii) by striking clause (vi) and insert-
ing the following:
‘‘(vi) for fiscal year 2002, $354, $566,
$477, $416, and $279 per month, respec-
tively;
‘‘(vii) for fiscal year 2003, $390, $624,
$526, $458, and $307 per month, respec-
tively; and
‘‘(viii) for fiscal years 2004 and each
fiscal year thereafter, the applicable amount
for the preceding fiscal year, as adjusted to
reflect changes for the 12-month period end-
ing the preceding November 30 in the Con-
sumer Price Index for All Urban Consumers
published by the Bureau of Labor Statistics
of the Department of Labor.’’.
(B) PROSPECTIVE AMENDMENTS.—Effective
October 1, 2009, section 5(e)(7) of the Food
Stamp Act of 1977 (7 U.S.C. 2014(e)(7)) is
amended—
(i) by striking subparagraph (B); and
(ii) by redesignating subparagraph (C)
as subparagraph (B).
(3) 
PARTICIPANT
EXPENSES.—Section
6(d)(4)(I)(i)(I) of the Food Stamp Act of 1977 (7
176
HR 2646 EAS/PP
U.S.C. 2015(d)(4)(I)(i)(I)) is amended by striking ‘‘,
except that the State agency may limit such reim-
bursement to each participant to $25 per month’’.
(4) 
FEDERAL
REIMBURSEMENT.—Section
16(h)(3) of the Food Stamp Act of 1977 (7 U.S.C.
2025(h)(3)) is amended by striking ‘‘such total
amount shall not exceed an amount representing $25
per participant per month for costs of transportation
and other actual costs (other than dependent care
costs) and’’ and inserting ‘‘the amount of the reim-
bursement for dependent care expenses shall not ex-
ceed’’.
(5) EFFECTIVENESS OF CERTAIN PROVISIONS.—
Section 413 and subsections (c) and (d) of section
434, and the amendments made by section 413 and
subsections (c) and (d) of section 434, shall have no
effect.
(d) LOAN DEFICIENCY PAYMENTS.—
(1) ELIGIBILITY.—Section 135 of the Federal
Agriculture Improvement and Reform Act of 1996 (7
U.S.C. 7235) (as amended by section 126(1)) is
amended by striking subsection (a) and inserting the
following:
‘‘(a) IN GENERAL.—The Secretary may make loan de-
ficiency payments available to—
177
HR 2646 EAS/PP
‘‘(1) producers on a farm that, 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 covered commodity in re-
turn for payments under this section; and
‘‘(2) effective only for the 2000 and 2001 crop
years, producers that, although not eligible to obtain
such a marketing assistance loan under section 131,
produce a loan commodity.’’.
(2) BENEFICIAL INTEREST.—Section 135(e)(1) of
the Federal Agriculture Improvement and Reform Act
of 1996 (7 U.S.C. 7235(e)) (as amended by section
126(2)) is amended by striking ‘‘A producer’’ and in-
serting ‘‘Effective for the 2001 through 2006 crops, a
producer’’.
(e) LOAN AUTHORIZATION LEVELS.—Section 346(b) of
the Consolidated Farm and Rural Development Act (7
U.S.C. 1994(b)) (as amended by section 529(1)(A)) is
amended by striking paragraph (1) and inserting the fol-
lowing:
‘‘(1) IN GENERAL.—The Secretary may make or
guarantee loans under subtitles A and B from the Ag-
ricultural Credit Insurance Fund provided for in sec-
tion 309 for not more than $3,796,000,000 for each of
178
HR 2646 EAS/PP
fiscal years 2002 through 2006, of which, for each fis-
cal year—
‘‘(A) $770,000,000 shall be for direct loans,
of which—
‘‘(i) $205,000,000 shall be for farm
ownership loans under subtitle A; and
‘‘(ii) $565,000,000 shall be for oper-
ating loans under subtitle B; and
‘‘(B) $3,026,000,000 shall be for guaranteed
loans, of which—
‘‘(i) $1,000,000,000 shall be for guar-
antees of farm ownership loans under sub-
title A; and
‘‘(ii) $2,026,000,000 shall be for guar-
antees of operating loans under subtitle B.’’.
(f) BEGINNING FARMER AND RANCHER DEVELOPMENT
PROGRAM.—In addition to funds made available under the
Agriculture, Rural Development, Food and Drug Adminis-
tration, and Related Agencies Appropriations Act, 2002
(Public Law 107–76), the Secretary of Agriculture shall use
$5,000,000 of funds of the Commodity Credit Corporation
for fiscal year 2002 to make loans described in section
346(b)(2)(A)(i) of the Consolidated Farm and Rural Devel-
opment Act (7 U.S.C. 1994(b)(2)(A)(i)).
179
HR 2646 EAS/PP
(g) INITIATIVE FOR FUTURE AGRICULTURE AND FOOD
SYSTEMS.—Section 401(b)(1) of the Agricultural Research,
Extension, and Education Reform Act of 1998 (7 U.S.C.
7621(b)(1)) (as amended by section 741) is amended—
(1) 
in 
subparagraph 
(A), 
by 
striking
‘‘$120,000,000’’ and inserting ‘‘$130,000,000’’; and
(2) 
in 
subparagraph 
(B), 
by 
striking
‘‘$145,000,000’’ and inserting ‘‘$225,000,000’’.
(h) SPECIALTY CROP INSURANCE INITIATIVE.—
(1) RESEARCH AND DEVELOPMENT FUNDING.—
Section 522(e) of the Federal Crop Insurance Act (7
U.S.C. 1522(e)) is amended by striking paragraph (1)
and inserting the following:
‘‘(1) REIMBURSEMENTS.—Of the amounts made
available from the insurance fund established under
section 516(c), the Corporation may use to provide re-
imbursements under subsection (b) not more than—
‘‘(A) $32,000,000 for fiscal year 2002;
‘‘(B) $27,500,000 for each of fiscal years
2003 and 2004;
‘‘(C) $25,000,000 for each of fiscal years
2005 and 2006; and
‘‘(D) $15,000,000 for fiscal year 2007 and
each subsequent fiscal year.’’.
180
HR 2646 EAS/PP
(2) EDUCATION AND INFORMATION FUNDING.—
Section 524(a)(4) of the Federal Crop Insurance Act
(7 U.S.C. 1524(a)(4)) is amended by striking sub-
paragraph (A) and inserting the following:
‘‘(A) for the education and information pro-
gram established under paragraph (2)—
‘‘(i) $10,000,000 for fiscal year 2003;
‘‘(ii) $13,000,000 for fiscal year 2004;
‘‘(iii) $15,000,000 for each of fiscal
years 2005 and 2006; and
‘‘(iv) $5,000,000 for fiscal year 2007
and each subsequent fiscal year; and’’.
(3) REPORTS.—Not later than September 30,
2002, the Secretary of Agriculture shall submit to the
Committee on Agriculture of the House of Representa-
tives and the Committee on Agriculture, Nutrition,
and Forestry of the Senate a report that describes—
(A) the progress made by the Corporation
in research and development of innovative risk
management products to include cost of produc-
tion insurance that provides coverage for spe-
cialty crops, paying special attention to apples,
asparagus, blueberries (wild and domestic), cab-
bage, canola, carrots, cherries, Christmas trees,
citrus fruits, cucumbers, dry beans, eggplants,
181
HR 2646 EAS/PP
floriculture, grapes, greenhouse and nursery ag-
ricultural commodities, green peas, green pep-
pers, hay, lettuce, maple, mushrooms, pears, po-
tatoes, pumpkins, snap beans, spinach, squash,
strawberries, sugar beets, and tomatoes;
(B) the progress made by the Corporation
in increasing the use of risk management prod-
ucts offered through the Corporation by pro-
ducers of specialty crops, by small- and mod-
erate-sized farms, and in areas that are under-
served, as determined by the Secretary; and
(C) how the additional funding provided
under the amendments made by this section has
been used.
(i) EFFECTIVE DATE.—This section and the amend-
ments made by this section take effect 1 day after the date
of enactment of this Act.
SEC. 170. RESTRICTION OF COMMODITY AND CROP INSUR-
ANCE PAYMENTS, LOANS, AND BENEFITS TO
PREVIOUSLY CROPPED LAND; FOOD STAMP
PROGRAM FOR CERTAIN QUALIFIED ALIENS.
(a) RESTRICTION OF COMMODITY AND CROP INSUR-
ANCE PAYMENTS, LOANS, AND BENEFITS TO PREVIOUSLY
CROPPED LAND.—Section 194 of the Federal Agriculture
182
HR 2646 EAS/PP
Improvement and Reform Act of 1996 (Public Law 104–
127; 110 Stat. 945) is amended to read as follows:
‘‘SEC. 194. RESTRICTION OF COMMODITY AND CROP INSUR-
ANCE PAYMENTS, LOANS, AND BENEFITS TO
PREVIOUSLY CROPPED LAND.
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) AGRICULTURAL COMMODITY.—The term ‘ag-
ricultural commodity’ has the meaning given the term
in section 102 of the Agricultural Trade Act of 1978
(7 U.S.C. 5602).
‘‘(2) EXCLUSIONS.—The term ‘agricultural com-
modity’ does not include forage, livestock, timber, for-
est products, or hay.
‘‘(3) IN GENERAL.—The term ‘considered plant-
ed’ shall include cropland that has been prevented
from being planted at least 8 out of the past 10 years
due to disaster related conditions as determined by
the Secretary.
‘‘(b) COMMODITIES.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of this title, except as provided in para-
graph (2), the Secretary shall not provide a crop pay-
ment, crop loan, or other crop benefit under this title
to an owner or producer, with respect to an agricul-
tural commodity produced on land during a crop
184
HR 2646 EAS/PP
‘‘(1) has been planted, considered planted, or de-
voted to an agricultural commodity during—
‘‘(A) at least 1 of the 5 crop years preceding
the 2002 crop year; or
‘‘(B) at least 3 of the 10 crop years pre-
ceding the 2002 crop year; or
‘‘(2)(A) has been planted, considered planted, or
devoted to an agricultural commodity during at least
1 of the 20 crop years preceding the 2002 crop year;
and
‘‘(B) has been maintained, and will continue to
be maintained, using long-term crop rotation prac-
tices, as determined by the Secretary.
‘‘(d) CONSERVATION RESERVE LAND.—For purposes of
this section, land that is enrolled in the conservation reserve
program established under subchapter B of chapter 1 of sub-
title D of title XII of the Food Security Act of 1985 (16
U.S.C.3831 et seq.) shall be considered planted to an agri-
cultural commodity.
‘‘(e) LAND UNDER THE JURISDICTION OF AN INDIAN
TRIBE.—For purposes of this section, land that is under
the jurisdiction of an Indian tribe (as defined in section
4 of the Indian Self-Determination and Education Assist-
ance Act (25 U.S.C. 450b)) shall be considered planted to
an agricultural commodity if—
185
HR 2646 EAS/PP
‘‘(1) the land is planted to an agricultural com-
modity after the date of enactment of this subsection
as part of an irrigation project that—
‘‘(A) is authorized by the Bureau of Rec-
lamation or the Bureau of Indian Affairs; and
‘‘(B) is under construction prior to the date
of enactment of this subsection; or
‘‘(2) the land becomes available for planting be-
cause of a settlement or statutory authorization of a
water rights claim by an Indian tribe after the date
of enactment of this subsection.’’.
(b) PARTIAL RESTORATION OF BENEFITS TO LEGAL
IMMIGRANTS.—Section 403(c)(2)(L) of the Personal Re-
sponsibility and Work Opportunity Reconciliation Act of
1996 (8 U.S.C. 1613(c)(2)(L)) (as amended by section
452(a)(2)(A)) is amended by inserting ‘‘provided to indi-
viduals under the age of 18’’ after ‘‘benefits’’.
(c) FOOD STAMP EXCEPTION FOR CERTAIN QUALIFIED
ALIENS.—
(1) IN GENERAL.—Section 402(a)(2) of the Per-
sonal Responsibility and Work Opportunity Rec-
onciliation Act of 1996 (8 U.S.C. 1612(a)(2)) (as
amended by section 452(c)(2)) is amended by adding
at the end the following:
186
HR 2646 EAS/PP
‘‘(M) FOOD STAMP EXCEPTION FOR CERTAIN
QUALIFIED ALIENS.—
‘‘(i) With respect to eligibility for bene-
fits for the specified Federal program de-
scribed in paragraph (3)(B), paragraph (1)
shall not apply, subject to the exclusion in
clause (ii), to any individual who has con-
tinuously resided in the United States as a
qualified alien for a period of 5 years or
more beginning on the date on which the
qualified alien entered the United States.
‘‘(ii) No alien who enters the country
illegally and remains in the United States
illegally for a period of one year or longer
or has been in the United States as an ille-
gal alien for a period of one year or longer,
regardless of their status upon entering the
country or their current status as a quali-
fied alien, shall be eligible under clause (i)
for benefits for the specified Federal pro-
gram described in paragraph (3)(B).
‘‘(iii) Clause (ii) shall not apply to a
qualified alien who has continuously resided
in the United States for a period of 5 years
187
HR 2646 EAS/PP
or more as of the date of enactment of this
Act.’’.
(2) EFFECTIVE DATE.—The amendment made by
paragraph (1) takes effect on April 1, 2003.
SEC. 171. REDUCTION OF COMMODITY BENEFITS TO IM-
PROVE NUTRITION ASSISTANCE.
(a) INCOME PROTECTION PRICES FOR COUNTER-CY-
CLICAL PAYMENTS.—Section 114(c) of the Federal Agri-
culture Improvement and Reform Act of 1996 (as amended
by section 111) is amended by striking paragraph (2) and
inserting the following:
‘‘(2) INCOME PROTECTION PRICES.—The income
protection prices for contract commodities under
paragraph (1)(A) are as follows:
‘‘(A) Wheat, $3.4460 per bushel.
‘‘(B) Corn, $2.3472 per bushel.
‘‘(C) Grain sorghum, $2.3472 per bushel.
‘‘(D) Barley, $2.1973 per bushel.
‘‘(E) Oats, $1.5480 per bushel.
‘‘(F) Upland cotton, $0.6793 per pound.
‘‘(G) Rice, $9.2914 per hundredweight.
‘‘(H) Soybeans, $5.7431 per bushel.
‘‘(I) Oilseeds (other than soybeans), $0.1049
per pound.’’.
188
HR 2646 EAS/PP
(b) LOAN
RATES
FOR
MARKETING
ASSISTANCE
LOANS.—
(1) IN GENERAL.—Section 132 of the Federal
Agriculture Improvement and Reform Act of 1996 (as
amended by section 123(a)) is amended to read as fol-
lows:
‘‘SEC. 132. LOAN RATES.
‘‘The loan rate for a marketing assistance loan under
section 131 for a loan commodity shall be—
‘‘(1) in the case of wheat, $2.9960 per bushel;
‘‘(2) in the case of corn, $2.0772 per bushel;
‘‘(3) in the case of grain sorghum, $2.0772 per
bushel;
‘‘(4) in the case of barley, $1.9973 per bushel;
‘‘(5) in the case of oats, $1.4980 per bushel;
‘‘(6) in the case of upland cotton, $0.5493 per
pound;
‘‘(7) in the case of extra long staple cotton,
$0.7965 per pound;
‘‘(8) in the case of rice, $6.4914 per hundred-
weight;
‘‘(9) in the case of soybeans, $5.1931 per bushel;
‘‘(10) in the case of oilseeds (other than soy-
beans), $0.0949 per pound;
189
HR 2646 EAS/PP
‘‘(11) in the case of graded wool, $1.00 per
pound;
‘‘(12) in the case of nongraded wool, $0.40 per
pound;
‘‘(13) in the case of mohair, $2.00 per pound;
‘‘(14) in the case of honey, $0.60 per pound;
‘‘(15) in the case of dry peas, $6.78 per hundred-
weight;
‘‘(16) in the case of lentils, $12.79 per hundred-
weight;
‘‘(17) in the case of large chickpeas, $17.44 per
hundredweight; and
‘‘(18) in the case of small chickpeas, $8.10 per
hundredweight.’’.
(2) ADJUSTMENT OF LOANS.—
(A) IN
GENERAL.—The amendment made
by section 123(b) is repealed.
(B) APPLICABILITY.—Section 162 of the
Federal Agriculture Improvement and Reform
Act of 1996 (7 U.S.C. 7282) shall be applied and
administered as if the amendment made by sec-
tion 123(b) had not been enacted.
(c) FOOD STAMP PROGRAM.—
(1) SIMPLIFIED RESOURCE ELIGIBILITY LIMIT.—
Section 5(g)(1) of the Food Stamp Act of 1977 (7
190
HR 2646 EAS/PP
U.S.C. 2014(g)(1)) is amended by striking ‘‘a member
who is 60 years of age or older’’ and inserting ‘‘an
elderly or disabled member’’.
(2) INCREASE
IN
BENEFITS
TO
HOUSEHOLDS
WITH CHILDREN.—Section 5(e) of the Food Stamp
Act of 1977 (7 U.S.C. 2014(e)) is amended by striking
paragraph (1) and inserting the following:
‘‘(1) STANDARD DEDUCTION.—
‘‘(A) IN
GENERAL.—Subject to the other
provisions of this paragraph, the Secretary shall
allow a standard deduction for each household
that is—
‘‘(i) equal to the applicable percentage
specified in subparagraph (D) of the income
standard of eligibility established under
subsection (c)(1); but
‘‘(ii) not less than the minimum de-
duction specified in subparagraph (E).
‘‘(B) GUAM.—The Secretary shall allow a
standard deduction for each household in Guam
that is—
‘‘(i) equal to the applicable percentage
specified in subparagraph (D) of twice the
income standard of eligibility established
under subsection (c)(1) for the 48 contig-
191
HR 2646 EAS/PP
uous States and the District of Columbia;
but
‘‘(ii) not less than the minimum de-
duction for Guam specified in subpara-
graph (E).
‘‘(C) HOUSEHOLDS OF 6 OR MORE MEM-
BERS.—The income standard of eligibility estab-
lished under subsection (c)(1) for a household of
6 members shall be used to calculate the standard
deduction for each household of 6 or more mem-
bers.
‘‘(D) APPLICABLE
PERCENTAGE.—For the
purpose of subparagraph (A), the applicable per-
centage shall be—
‘‘(i) 8 percent for each of fiscal years
2002 through 2004;
‘‘(ii) 8.5 percent for each of fiscal years
2005 through 2007;
‘‘(iii) 9 percent for each of fiscal years
2008 through 2010; and
‘‘(iv) 10 percent for each fiscal year
thereafter.
‘‘(E) MINIMUM DEDUCTION.—The minimum
deduction shall be $134, $229, $189, $269, and
$118 for the 48 contiguous States and the Dis-
192
HR 2646 EAS/PP
trict of Columbia, Alaska, Hawaii, Guam, and
the Virgin Islands of the United States, respec-
tively.’’.
(3) EFFECTIVENESS OF CERTAIN PROVISIONS.—
Sections 413 and 165(c)(1) shall have no effect.
SEC. 
172. 
REPORTS 
ON 
EQUITABLE 
RELIEF 
AND
MISACTION-MISINFORMATION REQUESTS.
Section 195 of the Federal Agriculture Improvement
and Reform Act of 1996 (Public Law 104–127; 110 Stat.
946) is amended to read as follows:
‘‘SEC. 
195. 
REPORTS 
ON 
EQUITABLE 
RELIEF 
AND
MISACTION-MISINFORMATION REQUESTS.
‘‘(a) IN GENERAL.—Not later than 90 days after the
date of enactment of the Agriculture, Conservation, and
Rural Enhancement Act of 2002 and not later than Decem-
ber 1 of fiscal year 2003 and each subsequent fiscal year,
the Secretary shall submit to the Committee on Agriculture
of the House of Representatives and the Committee on Agri-
culture, Nutrition, and Forestry of the Senate a report that
describes—
‘‘(1) the number of requests received by the Sec-
retary during the preceding fiscal year for equitable
relief under programs carried out by the Farm Serv-
ice Agency and the Natural Resources Conservation
Service, including a description (by program) of—
193
HR 2646 EAS/PP
‘‘(A) the number of requests received;
‘‘(B) the number of requests approved by the
Secretary; and
‘‘(C) the basis for the approval or denial of
the requests; and
‘‘(2) the number of requests received by the Sec-
retary during the preceding fiscal year for relief de-
scribed in section 326 of the Food and Agriculture Act
of 1962 (7 U.S.C. 1339a) with respect to programs
carried out under this title, including a description
(by program) of—
‘‘(A) the number of requests received;
‘‘(B) the number of requests approved by the
Secretary; and
‘‘(C) the basis for the approval or denial of
the requests.
‘‘(b) APPEALS.—The Secretary, acting through the Di-
rector of the National Appeals Division, shall include in
each report submitted under subsection (a) a description of
actions taken by the Division taken during the preceding
fiscal year with respect to requests for relief described in
subsection (a).’’.
194
HR 2646 EAS/PP
SEC. 173. ESTIMATES OF NET FARM INCOME.
Title I of the Federal Agriculture Improvement and
Reform Act of 1996 (7 U.S.C. 7201 et seq.) is amended by
adding at the end the following:
‘‘SEC. 197. ESTIMATES OF NET FARM INCOME.
‘‘In each issuance of projections of net farm income,
the Secretary shall include (as determined by the Sec-
retary)—
‘‘(1) an estimate of the net farm income earned
by commercial producers in the United States; and
‘‘(2) an estimate of the net farm income attrib-
utable to commercial producers of each of—
‘‘(A) livestock;
‘‘(B) loan commodities; and
‘‘(C) agricultural commodities other than
loan commodities.’’.
SEC. 174. COMMODITY CREDIT CORPORATION INVENTORY.
Section 5 of the Commodity Credit Corporation Char-
ter Act (15 U.S.C. 714c) is amended in the last sentence
by inserting before the period at the end the following: ‘‘(in-
cluding, at the option of the Corporation, the use of private
sector entities)’’.
SEC. 175. AGRICULTURAL PRODUCERS SUPPLEMENTAL
PAYMENTS AND ASSISTANCE.
(a) IN GENERAL.—The Secretary of Agriculture may
use such funds of the Commodity Credit Corporation as are
195
HR 2646 EAS/PP
necessary to provide payments and assistance under Public
Law 107–25 (115 Stat. 201) to persons that (as determined
by the Secretary)—
(1) are eligible to receive the payments or assist-
ance; but
(2) did not receive the payments or assistance
prior to October 1, 2001.
(b) LIMITATION.—The amount of payments or assist-
ance provided under Public Law 107–25 and this section
to an eligible person described in subsection (a) shall not
exceed the amount of payments or assistance the person
would have been eligible to receive under Public Law 107–
25.
Subtitle E—Payment Limitation
Commission
SEC. 181. ESTABLISHMENT OF COMMISSION.
(a) ESTABLISHMENT.—There is established a commis-
sion to be known as the ‘‘Commission on the Application
of Payment Limitations for Agriculture’’ (referred to in this
subtitle as the ‘‘Commission’’).
(b) MEMBERSHIP.—
(1) COMPOSITION.—
(A) IN GENERAL.—The Commission shall be
composed of 11 members appointed as follows:
196
HR 2646 EAS/PP
(i) 3 members shall be appointed by
the President, of whom 2 shall be from land
grant colleges or universities and have ex-
pertise in agricultural economics.
(ii) 1 member shall be appointed by
the Majority Leader of the Senate.
(iii) 1 member shall be appointed by
the Minority Leader of the Senate.
(iv) 1 member shall be appointed by
the Speaker of the House of Representatives.
(v) 1 member shall be appointed by the
Minority Leader of the House of Represent-
atives.
(vi) 1 member shall be appointed by
the Chairman of the Committee on Agri-
culture, Nutrition, and Forestry of the Sen-
ate.
(vii) 1 member shall be appointed by
the ranking minority member of the Com-
mittee on Agriculture, Nutrition, and For-
estry of the Senate.
(viii) 1 member shall be appointed by
the Chairman of the Committee on Agri-
culture of the House of Representatives.
197
HR 2646 EAS/PP
(ix) 1 member shall be appointed by
the ranking minority member of the Com-
mittee on Agriculture of the House of Rep-
resentatives.
(B) DIVERSITY OF VIEWS.—The appointing
authorities under subparagraph (A) shall seek to
ensure that the membership of the Commission
has a diversity of experiences and expertise on
the issues to be studied by the Commission, such
as agricultural production, agricultural lending,
farmland appraisal, agricultural accounting and
finance, and other relevant areas.
(2) FEDERAL GOVERNMENT EMPLOYMENT.—The
membership of the Commission may include 1 or
more employees of the Department of Agriculture or
other Federal agencies.
(3) DATE OF APPOINTMENTS.—The appointment
of a member of the Commission shall be made not
later than 60 days after the date of enactment of this
Act.
(c) TERM; VACANCIES.—
(1) TERM.—A member shall be appointed for the
life of the Commission.
(2) 
VACANCIES.—A 
vacancy 
on 
the
Commission—
198
HR 2646 EAS/PP
(A) shall not affect the powers of the Com-
mission; and
(B) shall be filled in the same manner as
the original appointment was made.
(d) INITIAL MEETING.—Not later than 30 days after
the date on which all members of the Commission have been
appointed, the Commission shall hold the initial meeting
of the Commission.
(e) MEETINGS.—The Commission shall meet—
(1) on a regular basis, as determined by the
Chairperson; and
(2) at the call of the Chairperson or a majority
of the members of the Commission.
(f) QUORUM.—A majority of the members of the Com-
mission shall constitute a quorum for the transaction of
business, but a lesser number of members may hold hear-
ings.
(g) CHAIRPERSON.—The Secretary shall appoint 1 of
the members of the Commission to serve as Chairperson of
the Commission.
SEC. 182. DUTIES.
(a) COMPREHENSIVE REVIEW.—The Commission shall
conduct a comprehensive review of—
(1) the laws (including regulations) that apply
or fail to apply payment limitations to agricultural
199
HR 2646 EAS/PP
commodity and conservation programs administered
by the Secretary;
(2) the impact that failing to apply effective
payment limitations has on—
(A) the agricultural producers that partici-
pate in the programs;
(B) overproduction of agricultural commod-
ities;
(C) the prices that agricultural producers
receive for agricultural commodities in the mar-
ketplace; and
(D) land prices and rental rates;
(3) the feasibility of improving the application
and effectiveness of payment limitation requirements,
including the use of commodity certificates and the
forfeiture of loan collateral; and
(4) alternatives to payment limitation require-
ments in effect on the date of enactment of this Act
that would apply meaningful limitations to improve
the effectiveness and integrity of the requirements.
(b) RECOMMENDATIONS.—In carrying out the review
under subsection (a), the Commission shall develop specific
recommendations for modifications to applicable legislation
and regulations that would improve payment limitation re-
quirements.
200
HR 2646 EAS/PP
(c) REPORT.—Not later than 1 year after the date of
enactment of this Act, the Commission shall submit to the
President, the Committee on Agriculture of the House of
Representatives, and the Committee on Agriculture, Nutri-
tion, and Forestry of the Senate a report containing the
results of the review conducted, and any recommendations
developed, under this section.
SEC. 183. POWERS.
(a) HEARINGS.—The Commission may hold such hear-
ings, meet and act at such times and places, take such testi-
mony, and receive such evidence as the Commission con-
siders advisable to carry out this subtitle.
(b) INFORMATION FROM FEDERAL AGENCIES.—
(1) IN GENERAL.—The Commission may secure
directly from a Federal agency such information as
the Commission considers necessary to carry out this
subtitle.
(2) PROVISION OF INFORMATION.—On request of
the Chairperson of the Commission, the head of the
agency shall provide the information to the Commis-
sion.
(c) POSTAL SERVICES.—The Commission may use the
United States mails in the same manner and under the
same conditions as other agencies of the Federal Govern-
ment.
201
HR 2646 EAS/PP
(d) ASSISTANCE FROM SECRETARY.—The Secretary
may provide to the Commission appropriate office space
and such reasonable administrative and support services as
the Commission may request.
SEC. 184. COMMISSION PERSONNEL MATTERS.
(a) COMPENSATION OF MEMBERS.—
(1) NON-FEDERAL
EMPLOYEES.—A member of
the Commission who is not an officer or employee of
the Federal Government shall be compensated at a
rate equal to the daily equivalent of the annual rate
of basic pay prescribed for level IV of the Executive
Schedule under section 5315 of title 5, United States
Code, for each day (including travel time) during
which the member is engaged in the performance of
the duties of the Commission.
(2) FEDERAL
EMPLOYEES.—A member of the
Commission who is an officer or employee of the Fed-
eral Government shall serve without compensation in
addition to the compensation received for the services
of the member as an officer or employee of the Federal
Government.
(b) TRAVEL EXPENSES.—A member of the Commission
shall be allowed travel expenses, including per diem in lieu
of subsistence, at rates authorized for an employee of an
agency under subchapter I of chapter 57 of title 5, United
202
HR 2646 EAS/PP
States Code, while away from the home or regular place
of business of the member in the performance of the duties
of the Commission.
SEC. 185. FEDERAL ADVISORY COMMITTEE ACT.
The Federal Advisory Committee Act (5 U.S.C. App.)
shall not apply to the Commission or any proceeding of
the Commission.
SEC. 186. FUNDING.
Of the funds of the Commodity Credit Corporation, the
Secretary shall use not more than $100,000 to carry out
this subtitle.
SEC. 187. TERMINATION OF COMMISSION.
The Commission shall terminate on the day after the
date on which the Commission submits the report of the
Commission under section 182(c).
Subtitle F—Emergency Agriculture
Assistance
SEC. 191. INCOME LOSS ASSISTANCE.
(a) IN GENERAL.—The Secretary of Agriculture (re-
ferred to in this subtitle as the ‘‘Secretary’’) shall use
$1,800,000,000 of funds of the Commodity Credit Corpora-
tion to make emergency financial assistance available to
producers on a farm that have incurred qualifying income
losses in calendar year 2001, including losses due to army
worms.
203
HR 2646 EAS/PP
(b) ADMINISTRATION.—The Secretary shall make as-
sistance available under this section in the same manner
as provided under section 815 of the Agriculture, Rural De-
velopment, Food and Drug Administration, and Related
Agencies Appropriations Act, 2001 (Public Law 106–387;
114 Stat. 1549A–55), including using the same loss thresh-
olds for the quantity and economic losses as were used in
administering that section.
(c) USE OF FUNDS FOR CASH PAYMENTS.—The Sec-
retary may use funds made available under this section to
make, in a manner consistent with this section, cash pay-
ments not for crop disasters, but for income loss to carry
out the purposes of this section.
SEC. 192. LIVESTOCK ASSISTANCE PROGRAM.
(a) 
IN
GENERAL.—The 
Secretary 
shall 
use
$500,000,000 of the funds of the Commodity Credit Cor-
poration to make and administer payments for livestock
losses to producers for 2001 losses in a county that has re-
ceived an emergency designation by the President or the
Secretary after January 1, 2001, of which $12,000,000 shall
be made available for the American Indian livestock pro-
gram under section 806 of the Agriculture, Rural Develop-
ment, Food and Drug Administration, and Related Agen-
cies Appropriations Act, 2001 (Public Law 106–387; 114
Stat. 1549A–51).
204
HR 2646 EAS/PP
(b) ADMINISTRATION.—The Secretary shall make as-
sistance available under this section in the same manner
as provided under section 806 of the Agriculture, Rural De-
velopment, Food and Drug Administration, and Related
Agencies Appropriations Act, 2001 (Public Law 105–277;
114 Stat. 1549A–51).
SEC. 193. MARKET LOSS ASSISTANCE FOR APPLE PRO-
DUCERS.
(a) IN GENERAL.—The Secretary of Agriculture shall
use $100,000,000 of funds of the Commodity Credit Cor-
poration for fiscal year 2002 to make payments to apple
producers, as soon as practicable after the date of enactment
of this Act, for the loss of markets during the 2000 crop
year.
(b) PAYMENT QUANTITY.—A payment to the producers
on a farm for the 2000 crop year under this section shall
be made on the lesser of—
(1) the quantity of apples produced by the pro-
ducers on the farm during the 2000 crop year; or
(2) 5,000,000 pounds of apples.
(c) LIMITATIONS.—The Secretary shall not establish a
payment limitation, or income eligibility limitation, with
respect to payments made under this section.
205
HR 2646 EAS/PP
SEC. 194. COMMODITY CREDIT CORPORATION.
The Secretary shall use the funds, facilities, and au-
thorities of the Commodity Credit Corporation to carry out
this subtitle.
SEC. 195. ADMINISTRATIVE EXPENSES.
(a) IN GENERAL.—In addition to funds otherwise
available, not later than 30 days after the date of enactment
of this Act, out of any funds in the Treasury not otherwise
appropriated, the Secretary of the Treasury shall transfer
to the Secretary of Agriculture to pay the salaries and ex-
penses of the Department of Agriculture in carrying out this
subtitle $50,000,000, to remain available until expended.
(b) RECEIPT AND ACCEPTANCE.—The Secretary shall
be entitled to receive, shall accept, and shall use to carry
out this section the funds transferred under subsection (a),
without further appropriation.
SEC. 196. REGULATIONS.
(a) IN GENERAL.—The Secretary may promulgate
such regulations as are necessary to implement this subtitle.
(b) PROCEDURE.—The promulgation of the regulations
and administration of this subtitle shall be made without
regard to—
(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.
206
HR 2646 EAS/PP
13804), relating to notices of proposed rulemaking
and public participation in rulemaking; and
(3) chapter 35 of title 44, United States Code
(commonly known as the ‘‘Paperwork Reduction
Act’’).
(c) CONGRESSIONAL
REVIEW
OF
AGENCY
RULE-
MAKING.—In carrying out this section, the Secretary shall
use the authority provided under section 808 of title 5,
United States Code.
SEC. 197. EMERGENCY REQUIREMENT.
The entire amount necessary to carry out this subtitle
is designated by Congress as an emergency requirement
pursuant to section 252(e) of the Balanced Budget and
Emergency Deficit Control Act of 1985 (2 U.S.C. 901(e)).
TITLE II—CONSERVATION
Subtitle A—Conservation Security
SEC. 201. CONSERVATION SECURITY PROGRAM.
Subtitle D of title XII of the Food Security Act of 1985
(16 U.S.C. 3830 et seq.) is amended by inserting after chap-
ter 1 the following:
207
HR 2646 EAS/PP
‘‘CHAPTER 2—CONSERVATION SECURITY
AND FARMLAND PROTECTION
‘‘Subchapter A—Conservation Security
Program
‘‘SEC. 1238. DEFINITIONS.
‘‘In this subchapter:
‘‘(1) BASE PAYMENT.—The term ‘base payment’
means the amount paid to a producer under a con-
servation security contract that is equal to the total
of the amounts described in clauses (i) and (ii) of
subparagraphs 
(C), 
(D), 
or 
(E) 
of 
section
1238C(b)(1), as appropriate.
‘‘(2) BEGINNING
FARMER
OR
RANCHER.—The
term ‘beginning farmer or rancher’ has the meaning
provided under section 343(a) of the Consolidated
Farm and Rural Development Act (7 U.S.C.
1999(a)).
‘‘(3) BONUS AMOUNT.—The term ‘bonus amount’
means the amount paid to a producer under a con-
servation security contract that is equal to the total
of the amounts described in clauses (iii) and (iv) of
subparagraph (C), and of clause (iii) of subparagraph
(D) or (E), of section 1238C(b)(1), as appropriate.
208
HR 2646 EAS/PP
‘‘(4) CONSERVATION PRACTICE.—The term ‘con-
servation practice’ means a land-based farming tech-
nique that—
‘‘(A) requires planning, implementation,
management, and maintenance; and
‘‘(B) promotes 1 or more of the purposes de-
scribed in section 1238A(a).
‘‘(5) CONSERVATION SECURITY CONTRACT.—The
term ‘conservation security contract’ means a con-
tract described in section 1238A(e).
‘‘(6) CONSERVATION SECURITY PLAN.—The term
‘conservation security plan’ means a plan described
in section 1238A(c).
‘‘(7) CONSERVATION SECURITY PROGRAM.—The
term ‘conservation security program’ means the pro-
gram established under section 1238A(a).
‘‘(8) INDIAN TRIBE.—The term ‘Indian tribe’ has
the meaning given the term in section 4 of the Indian
Self-Determination and Education Assistance Act (25
U.S.C. 450b).
‘‘(9) NUTRIENT MANAGEMENT.—The term ‘nutri-
ent management’ means management of the quantity,
source, placement, form, and timing of the land ap-
plication of nutrients and other additions to soil on
land enrolled in the conservation security program—
209
HR 2646 EAS/PP
‘‘(A) to achieve or maintain adequate soil
fertility for agricultural production;
‘‘(B) to minimize the potential for loss of
environmental quality, including soil, water, fish
and wildlife habitat, and air and water quality;
and
‘‘(C) to reduce energy consumption.
‘‘(10) PRODUCER.—
‘‘(A) IN
GENERAL.—The term ‘producer’
means an owner, operator, landlord, tenant, or
sharecropper that—
‘‘(i) shares in the risk of producing
any crop or livestock; and
‘‘(ii) is entitled to share in the crop or
livestock available for marketing from a
farm (or would have shared had the crop or
livestock been produced).
‘‘(B) HYBRID
SEED
GROWERS.—In deter-
mining whether a grower of hybrid seed is a pro-
ducer, the Secretary shall not take into consider-
ation the existence of a hybrid seed contract.
‘‘(11) RESOURCE OF CONCERN.—The term ‘re-
source of concern’ means a conservation priority of a
State and locality under section 1238A(c)(3).
210
HR 2646 EAS/PP
‘‘(12) RESOURCE-CONSERVING CROP.—The term
‘resource-conserving crop’ means—
‘‘(A) a perennial grass;
‘‘(B) a legume grown for use as—
‘‘(i) forage;
‘‘(ii) seed for planting; or
‘‘(iii) green manure;
‘‘(C) a legume-grass mixture;
‘‘(D) a small grain grown in combination
with a grass or legume, whether interseeded or
planted in succession; and
‘‘(E) such other plantings, including trees
and annual grasses, as the Secretary considers
appropriate for a particular area.
‘‘(13) 
RESOURCE-CONSERVING
CROP
ROTA-
TION.—The term ‘resource-conserving crop rotation’
means a crop rotation that—
‘‘(A) includes at least 1 resource-conserving
crop;
‘‘(B) reduces erosion;
‘‘(C) improves soil fertility and tilth; and
‘‘(D) interrupts pest cycles.
‘‘(14) RESOURCE
MANAGEMENT
SYSTEM.—The
term ‘resource management system’ means a system of
conservation practices and management relating to
211
HR 2646 EAS/PP
land or water use that is designed to prevent resource
degradation and permit sustained use of land, water,
and other natural resources, as defined in accordance
with the technical guide of the Natural Resources
Conservation Service.
‘‘(15) SECRETARY.—The term ‘Secretary’ means
the Secretary of Agriculture, acting through the Nat-
ural Resources Conservation Service.
‘‘(16) TIER
I
CONSERVATION
PRACTICE.—The
term ‘Tier I conservation practice’ means a conserva-
tion practice described in section 1238A(d)(4)(A)(ii).
‘‘(17) TIER
I
CONSERVATION
SECURITY
CON-
TRACT.—The term ‘Tier I conservation security con-
tract’ 
means 
a 
contract 
described 
in 
section
1238A(d)(4)(A).
‘‘(18) TIER
II
CONSERVATION
PRACTICE.—The
term ‘Tier II conservation practice’ means a con-
servation 
practice 
described 
in 
section
1238A(d)(4)(B)(ii).
‘‘(19) TIER
II
CONSERVATION
SECURITY
CON-
TRACT.—The term ‘Tier II conservation security con-
tract’ 
means 
a 
contract 
described 
in 
section
1238A(d)(4)(B).
‘‘(20) TIER III CONSERVATION PRACTICE.—The
term ‘Tier III conservation practice’ means a con-
212
HR 2646 EAS/PP
servation 
practice 
described 
in 
section
1238A(d)(4)(C)(ii).
‘‘(21) TIER
III
CONSERVATION
SECURITY
CON-
TRACT.—The term ‘Tier III conservation security
contract’ means a contract described in section
1238A(d)(4)(C).
‘‘SEC. 1238A. CONSERVATION SECURITY PROGRAM.
‘‘(a) IN GENERAL.—For each of fiscal years 2003
through 2006, the Secretary shall establish a conservation
security program to assist owners and operators of agricul-
tural operations to promote, as is applicable for each
operation—
‘‘(1) conservation of soil, water, energy, and
other related resources;
‘‘(2) soil quality protection and improvement;
‘‘(3) water quality protection and improvement;
‘‘(4) air quality protection and improvement;
‘‘(5) soil, plant, or animal health and well-being;
‘‘(6) diversity of flora and fauna;
‘‘(7) on-farm conservation and regeneration of
biological resources, including plant and animal
germplasm;
‘‘(8) wetland restoration, conservation, and en-
hancement;
213
HR 2646 EAS/PP
‘‘(9) wildlife habitat management, with special
emphasis on species identified by any natural herit-
age program of the applicable State;
‘‘(10) reduction of greenhouse gas emissions and
enhancement of carbon sequestration;
‘‘(11) environmentally sound management of
invasive species; or
‘‘(12) any similar conservation purpose (as de-
termined by the Secretary).
‘‘(b) ELIGIBILITY.—
‘‘(1) ELIGIBLE OWNERS AND OPERATORS.—To be
eligible to participate in the conservation security
program (other than to receive technical assistance
under section 1238C(g) for the development of con-
servation security contracts), a producer shall—
‘‘(A) develop and submit to the Secretary,
and obtain the approval of the Secretary of, a
conservation security plan that meets the re-
quirements of subsection (c)(1); and
‘‘(B) enter into a conservation security con-
tract with the Secretary to carry out the con-
servation security plan.
‘‘(2) ELIGIBLE LAND.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (C)(iii), private agricultural land
214
HR 2646 EAS/PP
(including cropland, grassland, prairie land,
pasture land, and rangeland) and land under
the jurisdiction of an Indian tribe shall be eligi-
ble for enrollment in the conservation security
program.
‘‘(B) FORESTED
LAND.—Private forested
land shall be eligible for enrollment in the con-
servation security program if the forested land is
part of the agricultural land described in sub-
paragraph (A), including land that is used for—
‘‘(i) alley cropping;
‘‘(ii) forest farming;
‘‘(iii) forest buffers;
‘‘(iv) windbreaks;
‘‘(v) silvopasture systems; and
‘‘(vi) such other integrated agroforestry
uses as the Secretary may determine to be
appropriate.
‘‘(C) EXCLUSIONS.—
‘‘(i) CONSERVATION
RESERVE
PRO-
GRAM.—Land enrolled in the conservation
reserve program under subchapter B of
chapter 1 shall not be eligible for enrollment
in the conservation security program except
for land described in section 1231(b)(6).
215
HR 2646 EAS/PP
‘‘(ii) WETLANDS RESERVE PROGRAM.—
Land enrolled in the wetlands reserve pro-
gram established under subchapter C of
chapter 1 shall not be eligible for enrollment
in the conservation security program.
‘‘(iii) CONVERSION
TO
CROPLAND.—
Land that is used for crop production after
the date of enactment of this subchapter
that had not been in crop production for at
least 3 of the 10 years preceding that date
(except for land enrolled in the conservation
reserve program under subchapter B of
chapter 1) shall not be eligible for enroll-
ment in the conservation security program.
‘‘(3) SUSTAINABLE ECONOMIC USES.—The Sec-
retary shall permit a producer to implement, with re-
spect to all eligible land covered by a conservation se-
curity plan, sustainable economic uses (including
Tier II conservation practices) that—
‘‘(A) maintain the agricultural nature of
the land; and
‘‘(B) are consistent with the natural re-
source and environmental benefits of the con-
servation security plan.
‘‘(c) CONSERVATION SECURITY PLANS.—
216
HR 2646 EAS/PP
‘‘(1) IN GENERAL.—A conservation security plan
shall—
‘‘(A) identify the resources and designated
land to be conserved under the conservation secu-
rity plan;
‘‘(B) describe—
‘‘(i) the tier of conservation security
contracts, and the particular conservation
practices, to be implemented, maintained,
or improved, in accordance with subsection
(d) on the land covered by the conservation
security contract for the specified term; and
‘‘(ii) as appropriate for the land cov-
ered by the conservation security contract,
the minimum number, type, extent, and
scope of conservation practices described in
clause (i) that are required to be carried out
on the land before the producer is eligible to
receive—
‘‘(I) a base payment; and
‘‘(II) a bonus amount;
‘‘(C) contain a schedule for the implementa-
tion, maintenance, or improvement of the con-
servation practices described in the conservation
217
HR 2646 EAS/PP
security plan during the term of the conservation
security contract;
‘‘(D) meet the highly erodible land and wet-
land conservation requirements of subtitles B
and C; and
‘‘(E) identify, and authorize the implemen-
tation of, sustainable economic uses described in
subsection (b)(3).
‘‘(2) 
COMPREHENSIVE
PLANNING.—The 
Sec-
retary shall encourage owners and operators that
enter into conservation security contracts—
‘‘(A) to undertake a comprehensive exam-
ination of the opportunities for conserving nat-
ural resources and improving the profitability,
environmental health, and quality of life in rela-
tion to their entire agricultural operation;
‘‘(B) to develop a long-term strategy for im-
plementing, monitoring, and evaluating con-
servation practices and environmental results in
the entire agricultural operation;
‘‘(C) to participate in other Federal, State,
local, or private conservation programs;
‘‘(D) to maintain the agricultural integrity
of the land; and
218
HR 2646 EAS/PP
‘‘(E) to adopt innovative conservation tech-
nologies and management practices or update ex-
isting technologies and practices.
‘‘(3) STATE, TRIBAL, AND LOCAL CONSERVATION
PRIORITIES.—
‘‘(A) IN GENERAL.—To the maximum ex-
tent practicable and in a manner consistent with
the conservation security program, each con-
servation security plan shall address, at least,
the conservation priorities of the State or Indian
tribe, and locality in which the agricultural op-
eration is located.
‘‘(B) ADMINISTRATION.—The conservation
priorities of the State, Indian tribe, and locality
in which the agricultural operation is located
shall be—
‘‘(i)(I) determined by the State con-
servationist, in consultation with the State
technical committee established under sub-
title G and the local subcommittee of the
State technical committee; and
‘‘(II) approved by the Secretary; and
‘‘(ii) in the case of land under the ju-
risdiction of an Indian tribe—
219
HR 2646 EAS/PP
‘‘(I) determined by the Indian
tribe, after consultation with the Sec-
retary; and
‘‘(II) approved by the Secretary.
‘‘(4) SUBMISSION OF PLAN.—
‘‘(A) IN GENERAL.—During the development
of a conservation security plan by a producer, at
the request of the producer, the Secretary shall
supply to the producer a statement of the min-
imum number, type, and scope of conservation
practices described in paragraph (1)(B)(ii).
‘‘(B) APPROVAL FOR BASE PAYMENTS.—If a
conservation security plan submitted to the Sec-
retary contains, in addition to paragraph
(1)(C), the conservation practices referred to in
paragraph (1)(B)(ii)—
‘‘(i) the Secretary shall approve the
conservation security plan; and
‘‘(ii) the producer of the conservation
security plan, on approval of and compli-
ance with the plan, as determined by the
Secretary, shall be eligible to receive a base
payment.
‘‘(C) APPROVAL FOR BONUS AMOUNTS.—If a
conservation security plan submitted to the Sec-
220
HR 2646 EAS/PP
retary contains a proposal for the implementa-
tion, maintenance, or improvement of a con-
servation practice that qualifies for a bonus
amount under section 1238C(b)(1)(C)(iii), the
Secretary may increase the payment of the pro-
ducer by such bonus amount as the Secretary de-
termines is appropriate.
‘‘(d) CONSERVATION CONTRACTS AND PRACTICES.—
‘‘(1) IN GENERAL.—
‘‘(A) ESTABLISHMENT OF TIERS.—The Sec-
retary shall establish 3 tiers of conservation con-
tracts under which a payment under this sub-
chapter may be received.
‘‘(B) 
ELIGIBLE
CONSERVATION
PRAC-
TICES.—
‘‘(i) IN GENERAL.—The Secretary shall
make eligible for payment under a conserva-
tion security contract land management,
vegetative, and structural practices that—
‘‘(I) are necessary to achieve the
purposes of the conservation security
plan; and
‘‘(II) primarily provide for, and
have as a primary purpose, resource
221
HR 2646 EAS/PP
protection and environmental improve-
ment.
‘‘(ii) DETERMINATION.—
‘‘(I) IN
GENERAL.—Subject to
subclause (II), in determining the eli-
gibility of a practice described in
clause (i), the Secretary shall require,
to the maximum extent practicable, the
lowest cost alternatives be used to ful-
fill the purposes of the conservation se-
curity plan, as determined by the Sec-
retary.
‘‘(II) 
INNOVATIVE
TECH-
NOLOGIES.—Subclause (I) shall not
apply, to the maximum extent prac-
ticable, to the adoption of innovative
technologies.
‘‘(2) ON-FARM
RESEARCH
AND
DEMONSTRA-
TION.—With respect to land enrolled in the conserva-
tion security program that will be maintained using
a Tier II conservation practice or a Tier III con-
servation practice, the Secretary may approve a con-
servation security plan that includes on-farm con-
servation research and demonstration activities,
including—
222
HR 2646 EAS/PP
‘‘(A) total farm planning;
‘‘(B) total resource management;
‘‘(C) integrated farming systems;
‘‘(D) germplasm conservation and regenera-
tion;
‘‘(E) greenhouse gas reduction and carbon
sequestration;
‘‘(F) agroecological restoration and wildlife
habitat restoration;
‘‘(G) agroforestry;
‘‘(H) invasive species control;
‘‘(I) energy conservation and management;
‘‘(J) farm and environmental results moni-
toring and evaluation; or
‘‘(K) participation in research projects re-
lating to water conservation and management
through—
‘‘(i) recycling or reuse of water; or
‘‘(ii) more efficient irrigation of farm-
land.
‘‘(3) USE OF HANDBOOK AND GUIDES.—
‘‘(A) IN GENERAL.—In determining eligible
conservation practices under the conservation se-
curity program, the Secretary shall use the Na-
223
HR 2646 EAS/PP
tional Handbook of Conservation Practices of the
Natural Resources Conservation Service.
‘‘(B) 
CONSERVATION
PRACTICE
STAND-
ARDS.—To the maximum extent practicable, the
Secretary shall establish guidance standards for
implementation of eligible conservation practices
that shall include measurable goals for enhanc-
ing and preventing degradation of resources.
‘‘(C) ADJUSTMENTS.—
‘‘(i) IN GENERAL.—After providing no-
tice and an opportunity for public partici-
pation, the Secretary shall make such ad-
justments to the National Handbook of Con-
servation Practices, and the field office tech-
nical guides, of the Natural Resources Con-
servation Service as are necessary to carry
out this chapter.
‘‘(ii) EFFECT
ON
PLAN.—If the Sec-
retary makes an adjustment to a practice
under clause (i), the Secretary may require
an adjustment to a conservation security
plan in effect as of the date of the adjust-
ment if the Secretary determines that the
plan, without the adjustment, would signifi-
224
HR 2646 EAS/PP
cantly interfere with achieving the purposes
of the conservation security program.
‘‘(D) PILOT TESTING.—
‘‘(i) IN GENERAL.—Under any of the 3
tiers of conservation practices established
under paragraph (4), the Secretary may
approve requests by a producer for pilot
testing of new technologies and innovative
conservation practices and systems.
‘‘(ii) INCORPORATION
INTO
STAND-
ARDS.—
‘‘(I) IN GENERAL.—After evalua-
tion by the Secretary and provision of
notice and an opportunity for public
participation, the Secretary may, as
expeditiously as practicable, approve
new technologies and innovative con-
servation practices and systems.
‘‘(II) 
INCORPORATION.—If 
the
Secretary approves a new technology
or innovative conservation practice
under subclause (I), the Secretary
shall, as expeditiously as practicable,
incorporate the technology or practice
into the standards for implementation
225
HR 2646 EAS/PP
of conservation practices established
under paragraph (3).
‘‘(4) TIERS.—Subject to paragraph (5), to carry
out this subsection, the Secretary shall establish the
following 3 tiers of conservation contracts:
‘‘(A) TIER I CONSERVATION CONTRACTS.—
‘‘(i) IN GENERAL.—A conservation se-
curity plan for land enrolled in the con-
servation security program under a Tier I
conservation security contract shall be
maintained using Tier I conservation prac-
tices and shall, at a minimum—
‘‘(I) if applicable to the particular
agricultural operation, address at least
1 resource of concern;
‘‘(II) apply to the total agricul-
tural operation or to a particular unit
of the agricultural operation;
‘‘(III) cover—
‘‘(aa) management of con-
servation practices that are being
implemented as of the date on
which the conservation security
contract is entered into; and
226
HR 2646 EAS/PP
‘‘(bb) conservation practices
that are implemented after the
date on which the conservation se-
curity contract is entered into;
and
‘‘(IV) meet applicable standards
for implementation of conservation
practices established under paragraph
(3).
‘‘(ii) CONSERVATION PRACTICES.—Tier
I conservation practices shall consist of, as
appropriate for the agricultural operation
of a producer, 1 or more of the following
basic conservation activities:
‘‘(I) Nutrient management.
‘‘(II) Integrated pest management.
‘‘(III) Irrigation, water conserva-
tion, and water quality management.
‘‘(IV) Grazing pasture and range-
land management.
‘‘(V) Soil conservation, quality,
and residue management.
‘‘(VI) Invasive species manage-
ment.
227
HR 2646 EAS/PP
‘‘(VII) Fish and wildlife habitat
management, with special emphasis on
species identified by any natural herit-
age program of the applicable State or
the appropriate State agency.
‘‘(VIII) Fish and wildlife con-
servation and enhancement.
‘‘(IX) Air quality management.
‘‘(X) Energy conservation meas-
ures.
‘‘(XI) Biological resource con-
servation and regeneration.
‘‘(XII) Animal health manage-
ment.
‘‘(XIII) 
Plant 
and 
animal
germplasm conservation, evaluation,
and development.
‘‘(XIV) Contour farming.
‘‘(XV) Strip cropping.
‘‘(XVI) Cover cropping.
‘‘(XVII) Sediment dams.
‘‘(XVIII) Any other conservation
practice that the Secretary determines
to be appropriate and comparable to
228
HR 2646 EAS/PP
other conservation practices described
in this clause.
‘‘(iii) TIER
II
CONSERVATION
CON-
TRACTS.—A conservation security plan for
land enrolled in the conservation security
program that will be maintained using Tier
I conservation contracts may include Tier
II conservation practices.
‘‘(B) TIER II CONSERVATION PRACTICES.—
‘‘(i) IN GENERAL.—A conservation se-
curity plan for land enrolled in the con-
servation security program under a Tier II
conservation security contract shall be
maintained using Tier II conservation
practices and shall, at a minimum—
‘‘(I) as applicable to the par-
ticular agricultural operation, address
at least 1 resource of concern for the
entire agricultural operation;
‘‘(II) cover—
‘‘(aa) management of con-
servation practices that are being
implemented as of the date on
which the conservation security
contract is entered into; and
229
HR 2646 EAS/PP
‘‘(bb) conservation practices
that are implemented after the
date on which the conservation se-
curity contract is entered into;
and
‘‘(III) meet applicable resource
management system criteria for 1 or
more resources of concern of the agri-
cultural operation, as specified in the
conservation security contract.
‘‘(ii) CONSERVATION
PRACTICES
AND
REQUIREMENTS.—Tier 
II 
conservation
practices and requirements shall consist of,
as appropriate for the agricultural oper-
ation of a producer, any of the Tier I con-
servation practices and 1 or more of the fol-
lowing land use adjustment or protection
practices:
‘‘(I) Resource-conserving crop ro-
tations.
‘‘(II) Controlled, rotational graz-
ing.
‘‘(III) Conversion of portions of
cropland from a soil-depleting use to a
230
HR 2646 EAS/PP
soil-conserving use, including produc-
tion of cover crops.
‘‘(IV) Partial field conservation
practices (including windbreaks, grass
waterways, shelter belts, filter strips,
riparian buffers, wetland buffers, con-
tour buffer strips, living snow fences,
crosswind trap strips, field borders,
grass terraces, wildlife corridors, and
critical area planting appropriate to
the agricultural operation).
‘‘(V) Fish and wildlife habitat
conservation and restoration.
‘‘(VI) Native grassland and prai-
rie protection and restoration.
‘‘(VII) Wetland protection and
restoration.
‘‘(VIII) Agroforestry practices and
systems as described in subsection
(b)(2)(B).
‘‘(IX) 
Any 
other 
conservation
practice involving modification of the
use of land that the Secretary deter-
mines to be appropriate and com-
231
HR 2646 EAS/PP
parable to other conservation practices
described in this clause.
‘‘(C) TIER III CONSERVATION CONTRACTS.—
‘‘(i) IN GENERAL.—A conservation se-
curity plan for land enrolled in the con-
servation security program under a Tier III
conservation security contract shall be
maintained using Tier III conservation
contracts and shall, at a minimum—
‘‘(I) address all applicable re-
sources of concern in the total agricul-
tural operation;
‘‘(II) cover—
‘‘(aa) management of con-
servation practices that are being
implemented as of the date on
which the conservation security
contract is entered into; and
‘‘(bb) conservation practices
that are implemented after the
date on which the conservation se-
curity contract is entered into;
and
‘‘(III) meet applicable resource
management system criteria for 1 or
232
HR 2646 EAS/PP
more resources of concern of the agri-
cultural operation, as specified in the
conservation security contract.
‘‘(ii) CONSERVATION PRACTICES.—Tier
III conservation practices shall consist of,
as appropriate for the agricultural oper-
ation of a producer (in addition to appro-
priate Tier I conservation practices and
Tier II conservation practices), develop-
ment, implementation, and maintenance of
a conservation security plan that, over the
term of the conservation security contract—
‘‘(I) integrates all necessary con-
servation practices to foster environ-
mental enhancement and the long-term
sustainability of the natural resource
base of an agricultural operation; and
‘‘(II) improves profitability and
sustainability associated with the agri-
cultural operation.
‘‘(5) MINIMUM REQUIREMENTS.—The minimum
requirements for each tier of conservation practices
described in paragraph (4) shall be—
‘‘(A)(i) determined by the State conserva-
tionist, in consultation with the State technical
233
HR 2646 EAS/PP
committee established under subtitle G and the
local subcommittee of the State technical com-
mittee; and
‘‘(ii) approved by the Secretary; and
‘‘(B) in the case of land under the jurisdic-
tion of an Indian tribe—
‘‘(i) determined by the Indian tribe,
after consultation with the Secretary; and
‘‘(ii) approved by the Secretary.
‘‘(e) CONSERVATION SECURITY CONTRACTS.—
‘‘(1) CONTRACTS.—
‘‘(A) IN GENERAL.—On approval of a con-
servation security plan of a producer, the Sec-
retary shall enter into a conservation security
contract with the producer to enroll the land cov-
ered by the conservation security plan in the
conservation security program.
‘‘(B) REQUIRED COMPONENTS.—A conserva-
tion security contract shall specifically describe
the practices that are required under subsection
(c)(1)(B).
‘‘(2) TERM.—Subject to paragraphs (3) and
(4)—
‘‘(A) a conservation security contract for
land enrolled in the conservation security pro-
234
HR 2646 EAS/PP
gram of a producer that will be maintained
using 1 or more Tier I conservation contracts
shall have a term of 5 years; and
‘‘(B) a conservation security contract for
land enrolled in the conservation security pro-
gram that will be maintained using a Tier II
conservation contract or Tier III conservation
contract shall have a 5-year to 10-year term, as
determined by the producer.
‘‘(3) MODIFICATIONS.—
‘‘(A) OPTIONAL MODIFICATIONS.—
‘‘(i) IN GENERAL.—An owner or oper-
ator may apply to the Secretary to modify
the conservation security plan to effectuate
the purposes of the conservation security
program.
‘‘(ii) APPROVAL BY THE SECRETARY.—
To be effective, any modification under
clause (i)—
‘‘(I) shall be approved by the Sec-
retary; and
‘‘(II) shall authorize the Secretary
to 
redetermine, 
if 
necessary, 
the
amount and timing of the payments
under the conservation security con-
235
HR 2646 EAS/PP
tract and subsections (a) and (b) of
section 1238C.
‘‘(B) OTHER MODIFICATIONS.—
‘‘(i) IN GENERAL.—The Secretary may,
in writing, require a producer to modify a
conservation security contract before the ex-
piration of the conservation security con-
tract if—
‘‘(I) the Secretary determines that
a change made to the type, size, man-
agement, or other aspect of the agricul-
tural operation of the producer would,
without the modification of the con-
tract, 
significantly 
interfere 
with
achieving the purposes of the conserva-
tion security program; or
‘‘(II) the Secretary makes a
change to the National Handbook of
Conservation Practices of the Natural
Resource Conservation Service under
subsection (d)(3)(C).
‘‘(ii) PAYMENTS.—The Secretary may
adjust the amount and timing of the pay-
ment schedule under the conservation secu-
236
HR 2646 EAS/PP
rity contract to reflect any modifications
made under this subparagraph.
‘‘(iii) DEADLINE.—The Secretary may
terminate a conservation security contract
if a modification required under this sub-
paragraph is not submitted to the Secretary
in the form of an amended conservation se-
curity contract by the date that is 90 days
after the date on which the Secretary issues
a written request for the modification.
‘‘(iv) TERMINATION.—a producer that
is required to modify a conservation secu-
rity contract under this subparagraph may,
in lieu of modifying the contract—
‘‘(I) terminate the conservation se-
curity contract; and
‘‘(II) retain payments received
under the conservation security con-
tract, if the producer fully complied
with the terms and conditions of the
conservation security contract before
termination of the contract.
‘‘(4) RENEWAL.—
‘‘(A) IN GENERAL.—At the option of a pro-
ducer, the conservation security contract of the
237
HR 2646 EAS/PP
producer may be renewed, for a term described
in subparagraph (B), if—
‘‘(i) the producer agrees to any modi-
fication of the applicable conservation secu-
rity contract that the Secretary determines
to be necessary to achieve the purposes of
the conservation security program;
‘‘(ii) the Secretary determines that the
producer has complied with the terms and
conditions of the conservation security con-
tract, including the conservation security
plan; and
‘‘(iii) in the case of a Tier I conserva-
tion security contract, the producer agrees
to increase the conservation practices on
land enrolled in the conservation security
program by—
‘‘(I) adopting new conservation
practices; or
‘‘(II) expanding existing practices
to meet applicable resource manage-
ment systems criteria.
‘‘(B) TERMS
OF
RENEWAL.—Under sub-
paragraph (A)—
238
HR 2646 EAS/PP
‘‘(i) a conservation security contract
for land enrolled in the conservation secu-
rity program that will be maintained using
Tier I conservation contracts may be re-
newed for 5-year terms;
‘‘(ii) in the case of a Tier II conserva-
tion security contract or a Tier III con-
servation security contract, the contract
shall be renewed for 5-year to 10-year
terms, at the option of the producer; and
‘‘(iii) participation in the conservation
security program prior to the renewal of the
conservation security contract shall not bar
renewal more than once.
‘‘(f) NONCOMPLIANCE DUE TO CIRCUMSTANCES BE-
YOND THE CONTROL OF PRODUCERS.—The Secretary shall
include in the conservation security contract a provision,
and may modify a conservation security contract under
subsection (e)(3)(B), to ensure that a producer shall not be
considered in violation of a conservation security contract
for failure to comply with the conservation security contract
due to circumstances beyond the control of the producer, in-
cluding a disaster or related condition, as determined by
the Secretary.
239
HR 2646 EAS/PP
‘‘SEC. 1238B. DUTIES OF PRODUCERS.
‘‘Under a conservation security contract, a producer
shall agree, during the term of the conservation security
contract—
‘‘(1) to implement the applicable conservation se-
curity plan approved by the Secretary;
‘‘(2) to maintain, and make available to the Sec-
retary at such times as the Secretary may request,
appropriate records showing the effective and timely
implementation of the conservation security plan;
‘‘(3) not to engage in any activity that would
interfere with the purposes of the conservation secu-
rity plan; and
‘‘(4) on the violation of a term or condition of
the conservation security contract—
‘‘(A) if the Secretary determines that the
violation warrants termination of the conserva-
tion security contract—
‘‘(i) to forfeit all rights to receive pay-
ments under the conservation security con-
tract; and
‘‘(ii) to refund to the Secretary all or
a portion of the payments received by the
producer under the conservation security
contract, including any advance payment
240
HR 2646 EAS/PP
and interest on the payments, as deter-
mined by the Secretary; or
‘‘(B) if the Secretary determines that the
violation does not warrant termination of the
conservation security contract, to refund to the
Secretary, or accept adjustments to, the pay-
ments provided to the producer, as the Secretary
determines to be appropriate.
‘‘SEC. 1238C. DUTIES OF THE SECRETARY.
‘‘(a) ADVANCE PAYMENT.—At the time at which a pro-
ducer enters into a conservation security contract, the Sec-
retary shall, at the option of the producer, make an advance
payment to the producer in an amount not to exceed—
‘‘(1) in the case of a Tier I conservation security
contract, the greater of—
‘‘(A) $1,000; or
‘‘(B) 20 percent of the value of the annual
payment under the contract, as determined by
the Secretary;
‘‘(2) in the case of a Tier II conservation secu-
rity contract, the greater of—
‘‘(A) $2,000; or
‘‘(B) 20 percent of the value of the annual
payment under the contract, as determined by
the Secretary; and
241
HR 2646 EAS/PP
‘‘(3) in the case of a Tier III conservation secu-
rity contract, the greater of—
‘‘(A) $3,000; or
‘‘(B) 20 percent of the value of the annual
payment under the contract, as determined by
the Secretary.
‘‘(b) ANNUAL PAYMENTS.—
‘‘(1) CRITERIA FOR DETERMINING AMOUNT OF
PAYMENTS.—
‘‘(A) BASE RATE.—In this paragraph, the
term ‘base rate’ means the average county rental
rate for the specific land use during the 2001
crop year, or another appropriate average coun-
ty rate for the 2001 crop year, that ensures re-
gional equity, as determined by the Secretary.
‘‘(B) PAYMENTS.—A payment for a con-
servation practice under this paragraph shall be
determined in accordance with subparagraphs
(C) through (F).
‘‘(C) TIER I CONSERVATION CONTRACTS.—
The payment for a Tier I conservation security
contract shall be comprised of the total of the fol-
lowing amounts:
242
HR 2646 EAS/PP
‘‘(i) An amount equal to 6 percent of
the base rate for land covered by the con-
tract.
‘‘(ii) An amount equal to the following
costs of practices covered by the conserva-
tion security contract, based on the average
county costs for such practices for the 2001
crop year, as determined by the Secretary:
‘‘(I) 100 percent of the cost of—
‘‘(aa) the adoption of new
management practices; and
‘‘(bb) the maintenance of new
and existing land management
and vegetative practices.
‘‘(II) 100 percent of the cost of
maintenance of existing land-based
structural practices approved by the
Secretary.
‘‘(III)(aa) 75 percent (or, in the
case of a limited resource producer (as
determined by the Secretary) or a be-
ginning farmer or rancher, 90 percent)
of the cost of adoption of new land-
based structural practices; or
243
HR 2646 EAS/PP
‘‘(bb) 75 percent (or, in the case of
a limited resource producer (as deter-
mined by the Secretary) or a beginning
farmer or rancher, 90 percent) of the
cost of the adoption of a structural
practice for which a similar structural
practice under the environmental qual-
ity 
incentives 
program 
established
under chapter 4 would require mainte-
nance, if the producer agrees to pro-
vide, without reimbursement, substan-
tially equivalent maintenance.
‘‘(iii) A bonus amount determined by
the Secretary for implementing or adopting
1 or more of the following practices:
‘‘(I) A practice adopted or main-
tained that, because of the extent and
scope of the practice, maximizes the ob-
jectives of the conservation security
program beyond the minimum require-
ments of the practices adopted or
maintained.
‘‘(II) A practice adopted or main-
tained to address resources of concern
and local conservation concerns beyond
244
HR 2646 EAS/PP
those identified as State or local con-
servation priorities.
‘‘(III) A practice adopted or
maintained to address national pri-
ority concerns, as determined by the
Secretary.
‘‘(IV) Participation by the pro-
ducer in an on-farm conservation re-
search, demonstration, or pilot project.
‘‘(V) Participation by the pro-
ducer in a watershed or regional re-
source conservation plan that involves
at least 75 percent of producers in a
targeted area.
‘‘(VI) Recordkeeping, monitoring,
and evaluation carried out by the pro-
ducer that furthers the purposes of the
conservation security program.
‘‘(iv) A bonus amount determined by
the Secretary that reflects the status of a
producer as a beginning farmer or rancher.
‘‘(D) TIER II CONSERVATION CONTRACTS.—
The payment for a Tier II conservation security
contract shall be comprised of the total of the fol-
lowing amounts:
245
HR 2646 EAS/PP
‘‘(i) An amount equal to 11 percent of
the base rate for land covered by the con-
servation security contract.
‘‘(ii) An amount equal to the cost of
practices covered by the conservation secu-
rity contract, based on the average county
costs for practices for the 2001 crop year,
described in subparagraph (C)(ii).
‘‘(iii) A bonus amount determined by
the Secretary in accordance with clauses
(iii) and (iv) of subparagraph (C), except
that the bonus amount under this clause
may include any amount for the adoption
or maintenance by the producer of any
practice that exceeds resource management
system standards.
‘‘(E) TIER III CONSERVATION CONTRACTS.—
The payment for a Tier III conservation security
contract shall be comprised of the total of the fol-
lowing amounts:
‘‘(i) An amount equal to 20 percent of
the base rate for land covered by the con-
servation security contract.
‘‘(ii) An amount equal to the cost of
practices covered by the conservation secu-
246
HR 2646 EAS/PP
rity contract, based on the average county
costs for practices for the 2001 crop year,
described in subparagraph (C)(ii).
‘‘(iii) A bonus amount determined by
the Secretary in accordance with subpara-
graph (D)(iii).
‘‘(F) EXCLUSION OF COSTS FOR PURCHASE
OR MAINTENANCE OF EQUIPMENT OR NON-LAND
BASED
STRUCTURES.—A payment under this
subchapter shall not include any amount for the
purchase or maintenance of equipment or a non-
land based structure.
‘‘(2) TIME OF PAYMENT.—The Secretary shall
provide payments under a conservation security con-
tract as soon as practicable after October 1 of each
fiscal year.
‘‘(3) LIMITATION ON PAYMENTS.—
‘‘(A) IN GENERAL.—Subject to paragraphs
(1), (2), (4), and (5), the Secretary shall, in
amounts and for a term specified in a conserva-
tion security contract and taking into account
any advance payments, make an annual pay-
ment, directly or indirectly, to the individual or
entity covered by the conservation security con-
tract in an amount not to exceed—
247
HR 2646 EAS/PP
‘‘(i) in the case of a Tier I conserva-
tion security contract, $20,000;
‘‘(ii) in the case of a Tier II conserva-
tion security contract, $35,000; or
‘‘(iii) in the case of a Tier III con-
servation security contract, $50,000.
‘‘(B) 
LIMITATION
ON
NONBONUS
PAY-
MENTS.—In applying the payment limitation
under each of clauses (i), (ii), and (iii) of sub-
paragraph (A), an individual or entity may not
receive, directly or indirectly, payments de-
scribed in clauses (i) and (ii) of paragraph
(1)(C), (1)(D), or (1)(E), as appropriate, in an
amount that exceeds 75 percent of the applicable
payment limitation.
‘‘(C) OTHER USDA PAYMENTS.—If a pro-
ducer has the same practices on the same land
enrolled in the conservation security program
and 1 or more other conservation programs ad-
ministered by the Secretary, the Secretary shall
include all payments from the conservation secu-
rity program and the other conservation pro-
grams, other than payments for conservation
easements, in applying the annual payment lim-
itations under this paragraph.
248
HR 2646 EAS/PP
‘‘(D) NON-USDA PAYMENTS.—
‘‘(i) IN
GENERAL.—A payment de-
scribed in clause (ii) shall not be considered
an annual payment for purposes of the an-
nual payment limitations under this para-
graph.
‘‘(ii) PAYMENT.—A payment referred
to in clause (i) is a payment that—
‘‘(I) is for the same practice on
the same land enrolled in the conserva-
tion security program; and
‘‘(II) is received from a Federal
program that is not administered by
the Secretary, or that is administered
by any State, local, or private agricul-
tural agency or organization.
‘‘(E) COMMENSURATE SHARE.—To be eligi-
ble to receive a payment under this chapter, an
individual or entity shall make contributions
(including contributions of land, labor, manage-
ment, equipment, or capital) to the operation of
the farm that are at least commensurate with the
share of the proceeds of the operation of the indi-
vidual or entity.
249
HR 2646 EAS/PP
‘‘(4) LAND ENROLLED IN OTHER CONSERVATION
PROGRAMS.—Notwithstanding any other provision of
law, if a producer has land enrolled in another con-
servation program administered by the Secretary and
has applied to enroll the same land in the conserva-
tion security program, the producer may elect to—
‘‘(A) convert the contract under the other
conservation program to a conservation security
contract, without penalty, except that this sub-
paragraph shall not apply to a contract entered
into under—
‘‘(i) the conservation reserve program
under subchapter B of chapter 1; or
‘‘(ii) the wetlands reserve program
under subchapter C of chapter 1; or
‘‘(B) have each annual payment to the pro-
ducer under this subsection reduced to reflect
payment for practices the producer receives
under the other conservation program, except
that the annual payment under this subsection
shall not be reduced by the amount of any incen-
tive received under a program referred to in sec-
tion 1231(b)(6) for qualified practices that en-
hance or extend the conservation benefit achieved
under the other conservation program.
250
HR 2646 EAS/PP
‘‘(5) WASTE STORAGE OR TREATMENT FACILI-
TIES.—A payment to a producer under this sub-
chapter shall not be provided for the purpose of con-
struction or maintenance of animal waste storage or
treatment facilities or associated waste transport or
transfer devices for animal feeding operations.
‘‘(c) MINIMUM PRACTICE REQUIREMENT.—In deter-
mining a payment under subsection (a) or (b) for an owner,
operator, or producer that receives a payment under an-
other program administered by the Secretary that is contin-
gent on complying with requirements under subtitle B or
C of title XII of the Food Security Act of 1985 (16 U.S.C.
3811 et seq.) relating to the use of highly erodible land or
wetland, a payment under this chapter for 1 or more prac-
tices on land subject to those requirements shall be for prac-
tices that exceed minimum requirements for the owner, op-
erator, or producer under those subtitles, as determined by
the Secretary.
‘‘(d) REGULATIONS.—
‘‘(1) IN GENERAL.—The Secretary shall promul-
gate regulations that—
‘‘(A) provide for adequate safeguards to pro-
tect the interests of tenants and sharecroppers,
including provision for sharing payments, on a
fair and equitable basis; and
251
HR 2646 EAS/PP
‘‘(B) prescribe such other rules as the Sec-
retary determines to be necessary to ensure a fair
and reasonable application of the limitations es-
tablished under subsections (a) and (b).
‘‘(2) PENALTIES FOR SCHEMES OR DEVICES.—
‘‘(A) IN GENERAL.—If the Secretary deter-
mines that an individual or entity has adopted
a scheme or device to evade, or that has the pur-
pose of evading, the regulations promulgated
under paragraph (1), the individual or entity
shall be ineligible to participate in the conserva-
tion security program for—
‘‘(i) the year for which the scheme or
device was adopted; and
‘‘(ii) each of the following 5 years.
‘‘(B) FRAUD.—If the Secretary determines
that fraud was committed in connection with the
scheme or device, the individual or entity shall
be ineligible to participate in the conservation
security program for—
‘‘(i) the year for which the scheme or
device was adopted; and
‘‘(ii) each of the following 10 years.
‘‘(e) TERMINATION.—
252
HR 2646 EAS/PP
‘‘(1) IN GENERAL.—Subject to section 1238B, the
Secretary shall allow a producer to terminate the con-
servation security contract.
‘‘(2) PAYMENTS.—the producer may retain any
or all payments received under a terminated con-
servation security contract if—
‘‘(A) the producer is in full compliance with
the terms and conditions (including any mainte-
nance requirements) of the conservation security
contract as of the date of the termination; and
‘‘(B) the Secretary determines that termi-
nation of the contract will not defeat the pur-
poses of the conservation security plan of the
producer.
‘‘(f) TRANSFER OR CHANGE OF INTEREST IN LAND
SUBJECT TO CONSERVATION SECURITY CONTRACT.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the transfer, or change in the interest, of
a producer in land subject to a conservation security
contract shall result in the termination of the con-
servation security contract.
‘‘(2) TRANSFER OF DUTIES AND RIGHTS.—Para-
graph (1) shall not apply if, not later than 60 days
after the date of the transfer or change in the interest
in land, the transferee of the land provides written
253
HR 2646 EAS/PP
notice to the Secretary that all duties and rights
under the conservation security contract have been
transferred to the transferee.
‘‘(g) TECHNICAL ASSISTANCE.—
‘‘(1) IN GENERAL.—For each of fiscal years 2003
through 2006, the Secretary shall provide technical
assistance to producers for the development and im-
plementation of conservation security contracts, in an
amount not to exceed 20 percent of amounts expended
for the fiscal year.
‘‘(2) COORDINATION BY THE SECRETARY.—The
Secretary shall provide overall technical coordination
and leadership for the conservation security program,
including final approval of all conservation security
plans.
‘‘(h) CONSERVATION SECURITY STATE PROGRAM.—
‘‘(1) IN
GENERAL.—Effective October 1, 2004,
the Secretary, in cooperation with appropriate State
agencies, may permit 1 State to jointly implement a
conservation security program with the Secretary.
‘‘(2) ELIGIBLE STATE.—The State referred to in
paragraph (1) shall be a State selected by the
Secretary—
‘‘(A) in consultation with—
254
HR 2646 EAS/PP
‘‘(i) the Committee on Agriculture of
the House of Representatives; and
‘‘(ii) the Committee on Agriculture,
Nutrition, and Forestry of the Senate; and
‘‘(B) after taking into consideration—
‘‘(i) the percentage of private land in
agricultural production in the State; and
‘‘(ii) infrastructure in the State that is
available to implement the pilot program
under paragraph (1).’’.
SEC. 202. FUNDING.
Section 1241 of the Food Security Act of 1985 (16
U.S.C. 3841) is amended by adding at the end the following:
‘‘(c) CONSERVATION SECURITY PROGRAM.—Of the
funds of the Commodity Credit Corporation, the Corpora-
tion shall make available for each of fiscal years 2002
through 2006 such sums as are necessary to carry out sub-
chapter A of chapter 2 (including the provision of technical
assistance, education and outreach, and monitoring and
evaluation).’’.
SEC. 203. PARTNERSHIPS AND COOPERATION.
Section 1243 of the Food Security Act of 1985 (16
U.S.C. 3843) is amended by adding at the end the following:
‘‘(f) PARTNERSHIPS AND COOPERATION.—
255
HR 2646 EAS/PP
‘‘(1) IN GENERAL.—In carrying out any pro-
gram under subtitle D, the Secretary may use re-
sources provided under that subtitle to enter into
agreements with State and local agencies, Indian
tribes, and nongovernmental organizations and to
designate special projects, as recommended by the
State Conservationist, after consultation with the
State technical committee, to enhance technical and
financial assistance provided to owners, operators,
and producers to address environmental issues af-
fected by agricultural production with respect to—
‘‘(A) meeting the purposes of—
‘‘(i) the Federal Water Pollution Con-
trol Act (33 U.S.C. 1251 et seq.) or com-
parable State or tribal laws in impaired or
threatened watersheds;
‘‘(ii) the Safe Drinking Water Act (42
U.S.C. 300f et seq.) or comparable State or
tribal laws in watersheds providing water
for drinking water supplies;
‘‘(iii) the Clean Air Act (42 U.S.C.
7401 et seq.) or comparable State laws; or
‘‘(iv) other Federal, State, tribal, or
local laws; or
256
HR 2646 EAS/PP
‘‘(B) watersheds of special significance, con-
servation priority areas described in section
1230(c), or other geographic areas of environ-
mental sensitivity, such as wetland, including
State, multi-State, or tribal projects—
‘‘(i) to facilitate surface and ground
water conservation;
‘‘(ii) to protect water quality;
‘‘(iii) to protect endangered or threat-
ened species or habitat, such as conservation
corridors;
‘‘(iv) to improve methods of irrigation;
‘‘(v) to convert acreage from irrigated
production; or
‘‘(vi) to reduce nutrient loads of water-
sheds.’’.
‘‘(2) INCENTIVES.—To realize the purposes of the
special projects under paragraph (1), the Secretary
may provide special incentives to owners, operators,
and producers participating in the special projects to
encourage partnerships, enrollments of exceptional en-
vironmental value, and sharing of technical and fi-
nancial resources among owners, operators, and pro-
ducers and among owners, operators, and producers
257
HR 2646 EAS/PP
and governmental and nongovernmental organiza-
tions.
‘‘(3) FLEXIBILITY.—
‘‘(A) IN
GENERAL.—The Secretary may
enter into agreements with States (including
State agencies and units of local government),
Indian tribes, and nongovernmental organiza-
tions to allow greater flexibility to adjust the ap-
plication of eligibility criteria, approved prac-
tices, innovative conservation practices, and
other elements of the programs under this title to
better reflect unique local circumstances and
purposes in a manner that is consistent with—
‘‘(i) environmental enhancement and
long-term sustainability of the natural re-
source base; and
‘‘(ii) the purposes and requirements of
this title.
‘‘(B) PLAN.—Each party to an agreement
under subparagraph (A) shall submit to the Sec-
retary, for approval by the Secretary, a special
project area or priority area program plan for
each program to be carried out by the party that
includes—
258
HR 2646 EAS/PP
‘‘(i) a description of the requested re-
sources and adjustments to program imple-
mentation (including a description of how
those 
adjustments 
will 
accelerate 
the
achievement of environmental benefits);
‘‘(ii) an analysis of the contribution
those adjustments will make to the effective-
ness of programs in achieving the purposes
of the special project or priority area pro-
gram;
‘‘(iii) a timetable for reevaluating the
need for or performance of the proposed ad-
justments;
‘‘(iv) a description of non-Federal pro-
grams and resources that will contribute to
achieving the purposes of the special project
or priority area program; and
‘‘(v) a plan for regular monitoring,
evaluation, and reporting of progress to-
ward the purposes of the special project or
priority area program.
‘‘(4) PURPOSES
OF
SPECIAL
PROJECTS.—The
purposes of special projects carried out under this sec-
tion shall be to encourage—
259
HR 2646 EAS/PP
‘‘(A) producers to cooperate in the installa-
tion and maintenance of conservation systems
that affect multiple agricultural operations;
‘‘(B) the sharing of information and tech-
nical and financial resources;
‘‘(C) cumulative environmental benefits
across operations of producers; and
‘‘(D) the development and demonstration of
innovative conservation methods.
‘‘(5) FUNDING.—
‘‘(A) IN GENERAL.—In addition to resources
from programs under subtitle D, subject to sub-
paragraph (B), the Secretary shall use 5 percent
of the funds made available for each fiscal year
under section 1241(b) to carry out activities that
are authorized under the environmental quality
incentives program established under chapter 4
of subtitle D.
‘‘(B) UNUSED FUNDING.—Any funds made
available for a fiscal year under subparagraph
(A) that are not obligated by April 1 of the fiscal
year may be used to carry out other activities
under the environmental quality incentives pro-
gram during the fiscal year in which the funding
becomes available.’’.
260
HR 2646 EAS/PP
SEC. 204. ADMINISTRATIVE REQUIREMENTS FOR CON-
SERVATION PROGRAMS.
Subtitle E of title XII of the Food Security Act of 1985
(16 U.S.C. 3841 et seq.) is amended by adding at the end
the following:
‘‘SEC. 1244. ADMINISTRATIVE REQUIREMENTS FOR CON-
SERVATION PROGRAMS.
‘‘(a) GOOD FAITH RELIANCE.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of law, except as provided in paragraph
(4), the Secretary shall provide equitable relief to an
owner, operator, or producer that has entered into a
contract under a conservation program administered
by the Secretary, and that is subsequently determined
to be in violation of the contract, if the owner, oper-
ator, or producer, in attempting to comply with the
terms of the contract and enrollment requirements—
‘‘(A) took actions in good faith reliance on
the action or advice of an employee of the Sec-
retary; and
‘‘(B) had no knowledge that the actions
taken were in violation of the contract.
‘‘(2) TYPES OF RELIEF.—The Secretary shall—
‘‘(A) to the extent the Secretary determines
that an owner, operator, or producer has been
injured by good faith reliance described in para-
261
HR 2646 EAS/PP
graph (1), allow the owner, operator, or
producer—
‘‘(i) to retain payments received under
the contract;
‘‘(ii) to continue to receive payments
under the contract;
‘‘(iii) to keep all or part of the land
covered by the contract enrolled in the ap-
plicable program;
‘‘(iv) to reenroll all or part of the land
covered by the contract in the applicable
program; or
‘‘(v) to receive any other equitable re-
lief the Secretary considers appropriate;
and
‘‘(B) require the owner, operator, or pro-
ducer to take such actions as are necessary to
remedy any failure to comply with the contract.
‘‘(3) RELATIONSHIP TO OTHER LAW.—The au-
thority to provide relief under this subsection shall be
in addition to any other authority provided in this
or any other Act.
‘‘(4) EXCEPTIONS.—This section shall not apply
to—
262
HR 2646 EAS/PP
‘‘(A) any pattern of conduct in which an
employee of the Secretary takes actions or pro-
vides advice with respect to an owner, operator,
or producer that the employee and the owner, op-
erator, or producer know are inconsistent with
applicable law (including regulations); or
‘‘(B) an owner, operator, or producer takes
any action, independent of any advice or author-
ization provided by an employee of the Sec-
retary, that the owner, operator, or producer
knows or should have known to be inconsistent
with applicable law (including regulations).
‘‘(5) APPLICABILITY OF RELIEF.—Relief under
this section shall be available for contracts in effect on
or after the date of enactment of this section.
‘‘(b) EDUCATION, OUTREACH, MONITORING, 
AND
EVALUATION.—In carrying out any conservation program
administered by the Secretary, the Secretary—
‘‘(1) shall provide education, outreach, training,
monitoring, evaluation, technical assistance, and re-
lated services to agricultural producers (socially dis-
advantaged agricultural producers, beginning farmers
and ranchers, Indian tribes (as those terms are de-
fined in section 1238), and limited resource agricul-
tural producers);
263
HR 2646 EAS/PP
‘‘(2) may enter into contracts with States (in-
cluding State agencies and units of local government),
private nonprofit, community-based organizations,
and educational institutions with demonstrated expe-
rience in providing the services described in para-
graph (1), to provide those services; and
‘‘(3) shall use such sums as are necessary from
funds of the Commodity Credit Corporation to carry
out activities described in paragraphs (1) and (2).
‘‘(c) BEGINNING FARMERS AND RANCHERS AND IN-
DIAN TRIBES.—In carrying out any conservation program
administered by the Secretary, the Secretary may provide
to beginning farmers and ranchers and Indian tribes (as
those terms are defined in section 1238) and limited re-
source agricultural producers incentives to participate in
the conservation program to—
‘‘(1) foster new farming opportunities; and
‘‘(2) enhance environmental stewardship over the
long term.
‘‘(d) PROGRAM EVALUATION.—The Secretary shall
maintain data concerning conservation security plans, con-
servation practices planned or implemented, environmental
outcomes, economic costs, and related matters under con-
servation programs administered by the Secretary.
264
HR 2646 EAS/PP
‘‘(e) MEDIATION AND INFORMAL HEARINGS.—If the
Secretary makes a decision under a conservation program
administered by the Secretary that is adverse to an owner,
operator, or producer, at the request of the owner, operator,
or producer, the Secretary shall provide the owner, operator,
or producer with mediation services or an informal hearing
on the decision.
‘‘(f) TECHNICAL ASSISTANCE.—
‘‘(1) IN GENERAL.—Under any conservation pro-
gram administered by the Secretary, subject to para-
graph (2), technical assistance provided by persons
certified under paragraph (3) (including farmers and
ranchers) may include—
‘‘(A) conservation planning;
‘‘(B) design, installation, and certification
of conservation practices;
‘‘(C) conservation training for producers;
and
‘‘(D) such other conservation activities as
the Secretary determines to be appropriate.
‘‘(2) OUTSIDE ASSISTANCE.—
‘‘(A) IN
GENERAL.—The Secretary may
contract directly with qualified persons not em-
ployed by the Department to provide conserva-
tion technical assistance.
265
HR 2646 EAS/PP
‘‘(B) PAYMENT BY SECRETARY.—Subject to
subparagraph (C), the Secretary may provide a
payment to an owner, operator, or producer en-
rolled in a conservation program administered
by the Secretary if the owner, operator, or pro-
ducer elects to obtain technical assistance from a
person certified to provide technical assistance
under this subsection.
‘‘(C) NONPRIVATE
PROVIDERS.—In deter-
mining whether to provide a payment under sub-
paragraph (B) to a nonprivate provider, the Sec-
retary shall provide a payment if the provision
of the payment would result in an increase in
the total amount of technical assistance available
to producers, as determined by the Secretary.
‘‘(3) CERTIFICATION OF PROVIDERS OF TECH-
NICAL ASSISTANCE.—
‘‘(A) PROCEDURES.—
‘‘(i) IN GENERAL.—The Secretary shall
establish procedures for certifying persons
not employed by the Department to provide
technical assistance in planning, designing,
or certifying activities to participate in any
conservation program administered by the
Secretary to agricultural producers and
266
HR 2646 EAS/PP
landowners participating, or seeking to par-
ticipate, in conservation programs adminis-
tered by the Secretary.
‘‘(ii) NON-FEDERAL ASSISTANCE.—The
Secretary may request the services of, and
enter into a cooperative agreement with, a
State water quality agency, State fish and
wildlife agency, State forestry agency, State
conservation agency or conservation dis-
trict, or any other governmental or non-
governmental organization or person con-
sidered appropriate by the Secretary to as-
sist in providing the technical assistance
necessary to develop and implement con-
servation plans under this title.
‘‘(B) EQUIVALENCE.—The Secretary shall
ensure that new certification programs of the De-
partment for providers of technical assistance
meet or exceed the testing and continuing edu-
cation standards of any certification program
that establishes nationally recognized and accept-
ed standards for training, testing, and other pro-
fessional qualifications.
‘‘(C) STANDARDS.—The Secretary shall es-
tablish standards for the conduct of—
267
HR 2646 EAS/PP
‘‘(i) the certification process conducted
by the Secretary; and
‘‘(ii) periodic recertification by the
Secretary of providers.
‘‘(D) CERTIFICATION REQUIRED.—
‘‘(i) IN
GENERAL.—A provider may
not provide to any producer technical as-
sistance described in paragraph (3)(A)(i)
unless the provider is certified by the Sec-
retary.
‘‘(ii) WAIVER.—The Secretary may ex-
empt a provider from any requirement of
this subparagraph if the Secretary deter-
mines that the provider has been certified or
recertified to provide technical assistance
through a program the standards of which
meet or exceed standards established by the
Secretary under subparagraph (C).
‘‘(E) FEE.—
‘‘(i) IN
GENERAL.—In exchange for
certification or recertification, a provider
shall pay a fee to the Secretary in an
amount determined by the Secretary.
‘‘(ii) ACCOUNT.—A fee paid to the Sec-
retary under clause (i) shall be—
268
HR 2646 EAS/PP
‘‘(I) credited to the account in the
Treasury that incurs costs relating to
implementing this subsection; and
‘‘(II) made available to the Sec-
retary for use for conservation pro-
grams administered by the Secretary,
without further appropriation, until
expended.
‘‘(iii) WAIVER.—The Secretary may
waive any requirement of any provider to
pay a fee under this subparagraph if the
provider qualifies for a waiver under sub-
paragraph (D)(ii).
‘‘(F) TECHNICAL
ASSISTANCE
ADVISORY
COUNCIL.—
‘‘(i) PURPOSE.—The Secretary shall
establish a technical assistance advisory
council (referred to in this subparagraph as
the ‘advisory council’) to advise the Sec-
retary with respect to the management of
certification programs for the provision of
technical assistance for third party pro-
viders.
‘‘(ii) MEMBERSHIP.—The membership
of the advisory council shall include—
269
HR 2646 EAS/PP
‘‘(I) representatives of the Federal
Government and appropriate State
and local governments; and
‘‘(II) not more than 20 additional
members that represent 2 or more of
the following:
‘‘(aa) Agricultural producers.
‘‘(bb) Agricultural industries.
‘‘(cc) Wildlife and environ-
mental entities.
‘‘(dd) A minimum of 6 pro-
fessional societies and organiza-
tions.
‘‘(ee) Such other entities (the
representation of which on the ad-
visory council shall not exceed 4
members) as the Secretary deter-
mines would contribute to the
work of the advisory council.
‘‘(iii) RESPONSIBILITIES.—The advi-
sory council shall advise the Secretary with
respect to—
‘‘(I) appropriate standards for
certification;
270
HR 2646 EAS/PP
‘‘(II) the status of third party cer-
tification programs;
‘‘(III) cases in which waivers for
certification, recertification and pay-
ment of fees should be allowed;
‘‘(IV) periodic reviews of certifi-
cation program; and
‘‘(V) guidelines for penalties and
disciplinary actions for violation of
certification requirements.
‘‘(iv) MEETINGS.—
‘‘(I) INITIAL MEETING.—Not later
than 30 days after the date on which
all members of the advisory council
have been appointed, the advisory
council shall hold the initial meeting of
advisory council.
‘‘(II) SUBSEQUENT
MEETINGS.—
The Secretary shall require the advi-
sory council to meet as needed.
‘‘(v) AUTHORIZATION
OF
APPROPRIA-
TIONS.—There are authorized to be appro-
priated to carry out this subparagraph such
sums as are necessary for each of fiscal
years 2002 through 2006.
271
HR 2646 EAS/PP
‘‘(4) EFFECT ON IMPLEMENTATION.—Nothing in
this subsection shall prohibit or impede the expedi-
tious implementation of the provision of third-party
technical assistance under this title.
‘‘(5) OTHER
REQUIREMENTS.—The Secretary
may establish such other requirements as the Sec-
retary determines are necessary to carry out this sub-
section.
‘‘(g) PRIVACY OF PERSONAL INFORMATION RELATING
TO NATURAL RESOURCES CONSERVATION PROGRAMS.—
‘‘(1) INFORMATION
RECEIVED
FOR
TECHNICAL
AND FINANCIAL ASSISTANCE.—
‘‘(A) IN GENERAL.—In accordance with sec-
tion 552(b)(3) of title 5, United States Code, ex-
cept as provided in subparagraph (C) and para-
graph (3), information described in subpara-
graph (B)—
‘‘(i) shall not be considered to be public
information; and
‘‘(ii) shall not be released to any per-
son or Federal, State, local agency or In-
dian tribe (as defined in section 1238) out-
side the Department of Agriculture.
‘‘(B) INFORMATION.—The information re-
ferred to in subparagraph (A) is information—
272
HR 2646 EAS/PP
‘‘(i) provided to the Secretary or a con-
tractor of the Secretary (including informa-
tion provided under subtitle D) for the pur-
pose of providing technical or financial as-
sistance to an owner, operator, or producer
with respect to any natural resources con-
servation program administered by the Nat-
ural Resources Conservation Service or the
Farm Service Agency; and
‘‘(ii) that is proprietary (within the
meaning of section 552(b)(4) of title 5,
United States Code) to the agricultural op-
eration or land that is a part of an agricul-
tural operation of the owner, operator, or
producer.
‘‘(C) EXCEPTION.—Information regarding
owners, operators, or producers that have re-
ceived payments from the Secretary and the
amounts received, shall be—
‘‘(i) considered to be public informa-
tion; and
‘‘(ii) may be released to any—
‘‘(I) person;
‘‘(II) Indian tribe (as defined in
section 1238); or
273
HR 2646 EAS/PP
‘‘(III) Federal, State, local agency
outside the Department of Agriculture.
‘‘(2) INVENTORY, MONITORING, AND SITE SPE-
CIFIC INFORMATION.—Except as provided in para-
graph (3) and notwithstanding any other provision of
law, in order to maintain the personal privacy, con-
fidentiality, and cooperation of owners, operators,
and producers, and to maintain the integrity of each
unit at which primary sampling for data gathering
is carried out by the National Resources Inventory
(referred to in this subsection as a ‘data gathering
site’), the specific geographic locations of data gath-
ering sites, and the information generated by the data
gathering sites—
‘‘(A) shall not be considered to be public in-
formation; and
‘‘(B) shall not be released to any person or
Federal, State, local, or tribal agency outside the
Department.
‘‘(3) EXCEPTIONS.—
‘‘(A) RELEASE AND DISCLOSURE FOR EN-
FORCEMENT.—The Secretary may release or dis-
close to the Attorney General information covered
by paragraph (1) or (2) to the extent necessary