II
104TH CONGRESS
1ST SESSION
H. R. 2491
IN THE SENATE OF THE UNITED STATES
OCTOBER 27 (legislative day, OCTOBER 26), 1995
Received
AN ACT
To provide for reconciliation pursuant to section 105 of
the concurrent resolution on the budget for fiscal year 1996.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Seven-Year Balanced
Budget Reconciliation Act of 1995’’.
SEC. 2. TABLE OF TITLES.
This Act is organized into titles as follows:
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Title I—Committee on Agriculture
Title II—Committee on Banking and Financial Services
Title III—Committee on Commerce
Title IV—Committee on Economic and Educational Opportunities
Title V—Committee on Government Reform and Oversight
Title VI—Committee on International Relations
Title VII—Committee on the Judiciary
Title VIII—Committee on National Security
Title IX—Committee on Resources
Title X—Committee on Transportation and Infrastructure
Title XI—Committee on Veterans’ Affairs
Title XII—Committee on Ways and Means-Trade
Title XIII—Committee on Ways and Means-Revenues
Title XIV—Committee on Ways and Means-Tax Simplification
Title XV—Preserving, Protecting, and Strengthening Medicare
Title XVI—Transformation of the Medicaid Program
Title XVII—Abolishment of Department of Commerce
Title XVIII—Welfare Reform
Title XIX—Contract with America-Tax Relief
Title XX—Budget Enforcement
TITLE I—COMMITTEE ON
AGRICULTURE
SEC. 1001. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This title may be cited as the
‘‘Agricultural Reconciliation Act of 1995’’.
(b) TABLE OF CONTENTS.—The table of contents of
this title is as follows:
TITLE I—COMMITTEE ON AGRICULTURE
Sec. 1001. Short title and table of contents.
Subtitle A—Freedom to Farm
Sec. 1101. Short title.
Sec. 1102. Seven-year contracts to improve farming certainty and flexibility.
Sec. 1103. Availability of nonrecourse marketing assistance loans for wheat,
feed grains, cotton, rice, and oilseeds.
Sec. 1104. Reform of payment limitation provisions of Food Security Act of
1985.
Sec. 1105. Suspension of certain provisions regarding program crops.
Subtitle B—Dairy
CHAPTER 1—AUTHORIZATION OF MARKET TRANSITION PAYMENTS IN LIEU
OF MILK PRICE SUPPORT PROGRAM
Sec. 1201. Seven-year market transition contracts for milk producers.
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Sec. 1202. Recourse loans for commercial processors of dairy products.
CHAPTER 2—DAIRY EXPORT PROGRAMS
Sec. 1211. Dairy export incentive program.
Sec. 1212. Authority to assist in establishment and maintenance of export trad-
ing company.
Sec. 1213. Standby authority to indicate entity best suited to provide inter-
national market development and export services.
Sec. 1214. Study and report regarding potential impact of Uruguay Round on
prices, income and Government purchases.
CHAPTER 3—DAIRY PROMOTION PROGRAMS
Sec. 1221. Research and promotion activities under Fluid Milk Promotion Act
of 1990.
Sec. 1222. Expansion of dairy promotion program to cover dairy products im-
ported into the United States.
Sec. 1223. Promotion of United States dairy products in international markets
through dairy promotion program.
Sec. 1224. Issuance of amended order under Dairy Production Stabilization Act
of 1983.
CHAPTER 4—VERIFICATION OF MILK RECEIPTS
Sec. 1231. Program to verify receipts of milk.
Sec. 1232. Verification program to supersede multiple existing Federal orders.
CHAPTER 5—MISCELLANEOUS PROVISIONS RELATED TO DAIRY
Sec. 1241. Extension of transfer authority regarding military and veterans hos-
pitals.
Sec. 1242. Extension of dairy indemnity program.
Sec. 1243. Extension of report regarding export sales of dairy products.
Sec. 1244. Status of producer-handlers.
Subtitle C—Other Commodities
Sec. 1301. Extension and modification of price support and quota programs for
peanuts.
Sec. 1302. Availability of loans for processors of sugarcane and sugar beets.
Sec. 1303. Repeal of obsolete authority for price support for cottonseed and
cottonseed products.
Subtitle D—Miscellaneous Program Changes
Sec. 1401. Limitations on assistance under emergency livestock feed assistance
program.
Sec. 1402. Conservation reserve program.
Sec. 1403. Crop insurance program.
Sec. 1404. Repeal of farmer owned reserve program.
Sec. 1405. Reduction in funding levels for export enhancement program.
Sec. 1406. Business Interruption Insurance Program.
Subtitle E—Commission on 21st Century Production
Agriculture
Sec. 1501. Establishment.
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Sec. 1502. Composition.
Sec. 1503. Comprehensive review of past and future of production agriculture.
Sec. 1504. Reports.
Sec. 1505. Powers.
Sec. 1506. Commission procedures.
Sec. 1507. Personnel matters.
Sec. 1508. Termination of Commission.
Subtitle A—Freedom to Farm
SEC. 1101. SHORT TITLE.
This subtitle may be cited as the ‘‘Freedom to Farm
Act of 1995’’.
SEC. 1102. SEVEN-YEAR CONTRACTS TO IMPROVE FARMING
CERTAINTY AND FLEXIBILITY.
(a) CONTRACTS AUTHORIZED.—Section 102 of the
Agricultural Act of 1949 (7 U.S.C. 1443), which is obso-
lete, is amended to read as follows:
‘‘SEC. 102. SEVEN-YEAR MARKET TRANSITION CONTRACTS.
‘‘(a) CONTRACTS AUTHORIZED.—
‘‘(1) OFFER AND MAIN TERMS.—Beginning as
soon as possible after the date of the enactment of
this section, the Secretary shall offer to enter into
a contract (to be known as a ‘market transition con-
tract’) with eligible owners and operators described
in paragraph (2) on a farm containing eligible farm-
land. Under the terms of a market transition con-
tract, the owner or operator shall agree, in exchange
for annual payments under the contract, to comply
with the conservation compliance plan for the farm
prepared in accordance with section 1212 of the
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Food Security Act of 1985 (16 U.S.C. 3812) and
wetland protection requirements applicable to the
farm under subtitle C of title XII of such Act (16
U.S.C. 3821 et seq.).
‘‘(2) ELIGIBLE OWNERS AND OPERATORS DE-
SCRIBED.—The following persons shall be considered
to be an owner or operator eligible to enter into a
market transition contract:
‘‘(A) An owner of eligible farmland who as-
sumes all of the risk of producing a crop.
‘‘(B) An owner of eligible farmland who
shares in the risk of producing a crop.
‘‘(C) An operator of eligible farmland with
a share-rent lease of the eligible farmland, re-
gardless of the length of the lease, if the owner
enters into the same market transition contract.
‘‘(D) An operator of eligible farmland who
cash rents the eligible farmland under a lease
expiring on or after September 30, 2002, in
which case the consent of the owner is not re-
quired.
‘‘(E) An operator of eligible farmland who
cash rents the eligible farmland under a lease
expiring before September 30, 2002, if the
owner consents to the contract.
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after April 15, 1996, may enter into or expand
a market transition contract to cover the acre-
age equal to the quantity of the farm’s crop
acreage bases restored with respect to the farm
under the terms and conditions of the conserva-
tion reserve program. The Secretary shall annu-
ally conduct an enrollment for such conserva-
tion reserve program acreage for the fiscal
years 1997 through 2002.
‘‘(2) DURATION OF CONTRACT.—The term of
each market transition contract shall—
‘‘(A) begin with the 1996 crop year, or the
crop year in which the contract is entered into
in the case of a contract entered into after
April 15, 1996; and
‘‘(B) extend through the 2002 crop year.
‘‘(3) ESTIMATION OF PAYMENTS.—At the time
the Secretary enters into a market transition con-
tract, the Secretary shall provide an estimate of the
minimum payments anticipated to be made under
the contract during at least the first fiscal year for
which payments will be made. If the actual payment
under the contract for the first fiscal year is less
than 95 percent of the estimated payment, the
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owner or operator subject to the contract may termi-
nate the contract without penalty.
‘‘(4) REPORT
ON
CONTRACTING.—Not later
than 90 days after the date of the enactment of this
section, the Secretary shall submit to the Committee
on Agriculture of the House of Representatives and
the Committee on Agriculture, Nutrition, and For-
estry of the Senate a report describing the manner
in which the Secretary proposes to enter into market
transition contracts, the number of persons and
acreage covered by such contracts, and the total
amount of anticipated payments to be made under
such contracts (consistent with the limitations speci-
fied in subsection (e)).
‘‘(c) ELIGIBLE FARMLAND DESCRIBED.—Land shall
be considered to be farmland eligible for coverage under
a market transition contract only if the land has crop acre-
age base attributable to the land and—
‘‘(1) for at least one of the 1991 through 1995
crop years, at least a portion of the land was en-
rolled in the acreage reduction program authorized
for a crop of rice, upland cotton, feed grains, or
wheat under section 101B, 103B, 105B, or 107B or
was considered planted to rice, upland cotton, feed
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grains, or wheat, as certified under section
503(c)(7);
‘‘(2) was subject to a conservation reserve con-
tract under section 1231 of the Food Security Act
of 1985 (16 U.S.C. 3831) whose term expired on or
after January 1, 1995; or
‘‘(3) is released from coverage under a con-
servation reserve contract by the Secretary during
the period beginning on January 1, 1995, and end-
ing on April 15, 1996.
‘‘(d) TIME FOR PAYMENT.—
‘‘(1) IN GENERAL.—An annual payment under
a market transition contract shall be made not later
than September 30 of each of the fiscal years 1996
through 2002.
‘‘(2) ADVANCE PAYMENTS.—Beginning in fiscal
year 1997, half of the annual payment may be made
on March 15 at the option of the owner or operator
subject to the contract. At the option of the owner
or operator, half of the annual payment for fiscal
year 1996 may be made within 90 days of the date
on which the owner or operator enters into the mar-
ket transition contract.
‘‘(e) TOTAL AMOUNTS AVAILABLE FOR PAYMENTS
UNDER ALL CONTRACTS.—
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‘‘(1) TOTAL PAYMENTS.—Total payments under
all market transition contracts for fiscal years 1996
through 2002 shall not exceed $38,733,000,000.
‘‘(2) TOTAL PAYMENTS PER FISCAL YEAR.—Be-
ginning in fiscal year 1996, the Secretary shall ex-
pend on a fiscal year basis the following amounts to
satisfy the obligations of the Secretary under market
transition contracts:
‘‘(A) For fiscal year 1996,
$6,014,000,000.
‘‘(B) For fiscal year 1997,
$5,829,000,000.
‘‘(C) For fiscal year 1998,
$6,244,000,000.
‘‘(D) For fiscal year 1999,
$6,047,000,000.
‘‘(E) For fiscal year 2000,
$5,573,000,000.
‘‘(F) For fiscal year 2001,
$4,574,000,000.
‘‘(G) For fiscal year 2002,
$4,453,000,000.
‘‘(3) ADJUSTMENT OF PAYMENT AMOUNTS.—
The Secretary shall adjust the amount specified in
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paragraph (1), and the amount specified in para-
graph (2) for a particular fiscal year, as follows:
‘‘(A) Subtracting an amount equal to the
amount, if any, necessary during that fiscal
year to satisfy payment requirements under sec-
tions 101B, 103B, 105B, and 107B for the
1994 and 1995 crop years.
‘‘(B) Adding an amount equal to the sum
of all producer repayments of deficiency pay-
ments received during that fiscal year under
section 114(a)(2).
‘‘(C) Adding an amount equal to the sum
of all market transition contract payments with-
held by the Secretary, at the request of produc-
ers, during the preceding fiscal year as an off-
set against producer repayments of deficiency
payments otherwise required under section
114(a)(2).
‘‘(D) Adding an amount equal to the sum
of all refunds of market transition contract pay-
ments received during the preceding fiscal year
under subsection (i).
‘‘(f) CONTRACT PAYMENTS TO BE BASED ON HIS-
TORIC EXPENDITURE LEVELS.—
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‘‘(1) CONTRACT
COMMODITY
DEFINED.—For
purposes of this section, the term ‘contract commod-
ity’ means rice, upland cotton, feed grains, or wheat.
‘‘(2) CALCULATION OF HISTORIC EXPENDITURE
LEVELS.—
‘‘(A) IN
GENERAL.—For each contract
commodity, the Secretary shall calculate the
total expenditures that were required for the
1991 through 1995 crops of that contract com-
modity under section 101B, 103B, 105B, or
107B, including expenditures in the form of de-
ficiency payments, loan deficiency payments,
gains realized from repaying loans at a level
less than the original level, and marketing cer-
tificates.
‘‘(B) SPECIAL
RULE
FOR
1995
CROP
YEAR.—In the absence of information regarding
actual expenditures for the 1995 crop of each
contract commodity, the Secretary may use an
estimate of expenditures under section 101B,
103B, 105B, or 107B for that crop year. The
Secretary shall base such estimate on informa-
tion contained in the President’s budget for fis-
cal year 1997 submitted to the Congress under
section 1105 of title 31, United States Code.
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‘‘(3) AMOUNTS
AVAILABLE
FOR
EACH
CON-
TRACT COMMODITY.—The amount available for a fis-
cal year for payments with respect to crop acreage
base of a contract commodity included in market
transition contracts in effect during that fiscal year
shall be equal to the product of—
‘‘(A) the ratio of the amount calculated
under paragraph (2) for that contract commod-
ity to the total amount calculated for all con-
tract commodities under such paragraph; and
‘‘(B) the amount specified in paragraph
(2) of subsection (e) for that fiscal year, as ad-
justed under paragraph (3) of such subsection.
‘‘(g) DETERMINATION OF PAYMENTS UNDER PAR-
TICULAR CONTRACT.—
‘‘(1) INDIVIDUAL
PRODUCTION
OF
CONTRACT
COMMODITIES.—For each market transition con-
tract, the amount of production of a contract com-
modity covered by the contract shall be equal to the
product of—
‘‘(A) the crop acreage base of that contract
commodity attributable to the eligible farmland
subject to the contract; and
‘‘(B) the farm program payment yield in
effect for the 1995 crop of that contract com-
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modity for the farm containing that eligible
farmland.
‘‘(2) ANNUAL
TOTAL
PRODUCTION
OF
CON-
TRACT COMMODITIES.—For each of the fiscal years
1996 through 2002, the total production of each
contract commodity covered by all market transition
contracts shall be equal to the sum of the amounts
calculated under paragraph (1) for each individual
market transition contract in effect during that fis-
cal year.
‘‘(3) ANNUAL PAYMENT RATE.—The payment
rate for a contract commodity for a fiscal year shall
be equal to—
‘‘(A) the amount made available under
subsection (f)(3) for that contract commodity
for that fiscal year; divided by
‘‘(B) the amount determined under para-
graph (2) for that fiscal year.
‘‘(4) ANNUAL PAYMENT AMOUNT.—For each of
the fiscal years 1996 through 2002, the amount to
be paid under a particular market transition con-
tract in effect during that fiscal year with respect to
a contract commodity shall be equal to the product
of—
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‘‘(A) the amount of production determined
under paragraph (1) for that contract for that
contract commodity; and
‘‘(B) the payment rate in effect under
paragraph (3) for that fiscal year for that con-
tract commodity.
‘‘(5) ASSIGNMENT OF PAYMENTS.—The provi-
sions of section 8(g) of the Soil Conservation and
Domestic Allotment Act (16 U.S.C. 590h(g)) (relat-
ing to assignment of payments) shall apply to pay-
ments under this subsection. The owner or operator
making the assignment, or the assignee, shall pro-
vide the Secretary with notice, in such manner as
the Secretary may require in the market transition
contract, of any assignment made under this para-
graph.
‘‘(6) SHARING OF PAYMENTS.—The Secretary
shall provide for the sharing of payments made
under a market transition contract among the own-
ers and operators subject to the contract on a fair
and equitable basis.
‘‘(h) LIMITATION
ON TOTAL AMOUNT
OF PAY-
MENT.—The total amount of payments made to a person
under a market transition contract during any fiscal year
may not exceed $50,000. The Secretary shall issue regula-
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tions defining the term ‘person’ as used in this section,
which shall conform, to the extent practicable, to the regu-
lations defining the term ‘person’ issued under section
1001 of the Food Security Act of 1985 (7 U.S.C. 1308).
In the case of payments under a market transition con-
tract provided to corporations and other persons described
in paragraph (5)(B)(i)(II) of such section, the Secretary
shall comply with the attribution requirements specified
in paragraph (5)(C) of such section.
‘‘(i) EFFECT OF VIOLATION.—
‘‘(1) TERMINATION
OF
CONTRACT.—If an
owner or operator subject to a market transition
contract violates the conservation compliance plan
for the farm containing eligible farmland under the
contract or wetland protection requirements applica-
ble to the farm, the Secretary may terminate the
market transition contract with respect to that
owner or operator. Upon such termination, the
owner or operator shall forfeit all rights to receive
future payments under the contract and shall refund
to the Secretary all payments under the contract re-
ceived by the owner or operator during the period of
the violation, together with interest thereon as deter-
mined by the Secretary.
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‘‘(2) REFUND OR ADJUSTMENT.—If the Sec-
retary determines that a violation of a market tran-
sition contract does not warrant termination of the
contract under paragraph (1), the Secretary may re-
quire the owner or operator subject to the con-
tract—
‘‘(A) to refund to the Secretary that part
of the payments received by the owner or opera-
tor during the period of the violation, together
with interest thereon as determined by the Sec-
retary; or
‘‘(B) to accept an adjustment in the
amount of future payments otherwise required
under the contract.
‘‘(3) FORECLOSURE.—An owner or operator
subject to a market transition contract may not be
required to make repayments to the Secretary of
amounts received under the contract if the eligible
farm land that is subject to the contract has been
foreclosed upon and the Secretary determines that
forgiving such repayments is appropriate in order to
provide fair and equitable treatment. This paragraph
shall not void the responsibilities of such an owner
or operator under the contract if the owner or opera-
tor continues or resumes operation, or control, of the
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‘‘(2) EXCEPTION.—If an owner or operator who
is entitled to a payment under a market transition
contract dies, becomes incompetent, or is otherwise
unable to receive such payment, the Secretary shall
make such payment, in accordance with regulations
prescribed by the Secretary and without regard to
any other provision of law, in such manner as the
Secretary determines is fair and reasonable in light
of all of the circumstances.
‘‘(k) PLANTING FLEXIBILITY.—
‘‘(1) PERMITTED CROPS.—In the case of acre-
age on a farm that serves as the basis for payments
under a market transition contract, an owner or op-
erator on the farm may plant for harvest on the
acreage—
‘‘(A) rice, upland cotton, feed grains, and
wheat;
‘‘(B) any oilseed;
‘‘(C) any industrial or experimental crop
designated by the Secretary;
‘‘(D) mung beans, lentils, and dry peas;
and
‘‘(E) any other crop, except any fruit or
vegetable crop (including potatoes and dry edi-
ble beans) not covered by subparagraph (D),
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unless such fruit or vegetable crop is designated
by the Secretary as—
‘‘(i) an industrial or experimental
crop; or
‘‘(ii) a crop for which no substantial
domestic production or market exists.
‘‘(2) LIMITATION.—At the discretion of the
Secretary, the Secretary may prohibit the planting
of any crop specified in paragraph (1) on acreage on
a farm that serves as the basis for payments under
a market transition contract.
‘‘(3) NOTIFICATION.—With regard to commod-
ities that may be planted pursuant to this sub-
section, the Secretary shall make a determination in
each crop year of the commodities that may not be
planted pursuant to this subsection and shall make
available a list of the commodities.
‘‘(4) CONSERVATION USES.—In lieu of planting
any crop specified in paragraph (1), the owner or
operator on a farm may devote to conservation uses
all or part of the eligible farmland subject to a mar-
ket transition contract, in accordance with regula-
tions issued by the Secretary.
‘‘(5) HAYING AND GRAZING.—Haying and graz-
ing of eligible farmland subject to a market transi-
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tion contract shall be permitted, except during any
consecutive five-month period that is established by
the State committee established under section 8(b)
of the Soil Conservation and Domestic Allotment
Act (16 U.S.C. 590h(b)) for a State. The 5-month
period shall be established during the period begin-
ning April 1, and ending October 31, of a year. In
the case of a natural disaster, the Secretary may
permit unlimited haying and grazing on the eligible
farmland. The Secretary may not exclude irrigated
or irrigable acreage not planted in alfalfa when exer-
cising the authority under the preceding sentence.
‘‘(l) MARKET TRANSITION CONTRACTS.—Notwith-
standing any other provision of law, no order issued for
any fiscal year under section 252 of the Balanced Budget
and Emergency Deficit Control Act of 1985 (2 U.S.C.
902) shall affect any payment under any market transi-
tion contract.
‘‘(m) COMMODITY CREDIT CORPORATION.—The Sec-
retary shall carry out this section through the Commodity
Credit Corporation, except that no funds of the Corpora-
tion shall be used for any salary or expense of any officer
or employee of the Department of Agriculture in connec-
tion with the administration of market transition pay-
ments or loans under this Act.
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‘‘(n) REGULATIONS.—The Secretary may issue such
regulations as the Secretary determines necessary to carry
out this section.’’.
(b) CONFORMING AMENDMENTS.—
(1) 
WHEAT
0/85
PROGRAM.—Section
107B(c)(1)(E) of the Agricultural Act of 1949 (7
U.S.C. 1445b–3a(c)(1)(E)) is amended by striking
‘‘through 1997’’ in clauses (i) and (vii) each place
it appears and inserting ‘‘and 1995’’.
(2) FEED
GRAINS
0/85
PROGRAM.—Section
105B(c)(1)(E) 
of 
such 
Act 
(7 
U.S.C.
1444f(c)(1)(E)) is amended by striking ‘‘through
1997’’ in clauses (i) and (vii) each place it appears
and inserting ‘‘and 1995’’.
(3) COTTON PROGRAM.—Section 103B of such
Act (7 U.S.C. 1444–2) is amended—
(A) in the section heading, by striking
‘‘1997’’ and inserting ‘‘1995’’;
(B) in subsections (a)(1), (b)(1), (c)(1)(A),
(c)(1)(B)(ii), and (o), by striking ‘‘1997’’ each
place it appears and inserting ‘‘1995’’;
(C) 
in 
subsections 
(c)(1)(D)(i) 
and
(c)(1)(D)(v)(II) by striking ‘‘through 1997’’
each place it appears and inserting ‘‘and 1995’’;
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(D) 
in 
the 
heading 
of 
subsection
(c)(1)(D)(v)(II), by striking ‘‘THROUGH
1997
CROPS’’ and inserting ‘‘AND 1995 CROPS’’;
(E) in subsection (e)(1)(D), by striking
‘‘291⁄2 percent for each of the 1995 and 1996
crops, and 29 percent for the 1997 crop’’ and
inserting ‘‘and 291⁄2
percent for the 1995
crop’’; and
(F) in subparagraphs (B)(i), (D)(i), (E)(i),
and (F)(i) of subsection (a)(5), by striking
‘‘1998’’ each place it appears and inserting
‘‘1996’’.
(4) RICE
50/85
PROGRAM.—Section 101B of
such Act (7 U.S.C. 1441–2) is amended—
(A) 
in 
subsections 
(c)(1)(D)(i) 
and
(c)(1)(D)(v)(II), by striking ‘‘through 1997’’
each place it appears and inserting ‘‘and 1995’’;
and
(B) 
in 
the 
heading 
of 
subsection
(c)(1)(D)(v)(II), by striking ‘‘THROUGH
1997
CROPS’’ and inserting ‘‘AND 1995 CROPS’’.
(5) OILSEEDS.—Section 205(c) of such Act (7
U.S.C. 1446f(c)) is amended by striking ‘‘through
1997’’ both places it appears and inserting ‘‘and
1995’’.
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(6) CROP ACREAGE BASE.—Section 509 of such
Act (7 U.S.C. 1469) is amended by striking ‘‘effec-
tive only for the 1991 through 1997 program crops’’
and inserting ‘‘effective only until January 1, 1996’’.
SEC. 1103. AVAILABILITY OF NONRECOURSE MARKETING
ASSISTANCE 
LOANS 
FOR 
WHEAT, 
FEED
GRAINS, COTTON, RICE, AND OILSEEDS.
(a) NONRECOURSE LOANS AVAILABLE.—The Agri-
cultural Act of 1949 is amended by inserting after section
102, as amended by section 1102, the following new sec-
tion:
‘‘SEC. 
102A. 
NONRECOURSE 
MARKETING 
ASSISTANCE
LOANS FOR CERTAIN CROPS.
‘‘(a) NONRECOURSE LOANS AVAILABLE.—For each
of the 1996 through 2002 crops of wheat, feed grains, up-
land cotton, extra long staple cotton, rice, and oilseeds,
the Secretary shall make available to eligible producers on
a farm nonrecourse marketing assistance loans under
terms and conditions that are prescribed by the Secretary
and at a loan rate calculated under subsection (c). A mar-
keting assistance loan shall have a term of nine months
beginning on the first day of the first month after the
month in which the loan is made. The Secretary may not
extend the term of a marketing assistance loan.
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‘‘(b) ANNOUNCEMENT OF LOAN RATE.—The Sec-
retary shall announce the loan rate for each commodity
specified in subsection (a) not later than the start of the
marketing year of the commodity for which the loan rate
is to be in effect.
‘‘(c) CALCULATION OF LOAN RATE.—
‘‘(1) CALCULATION.—Subject to adjustment
under paragraph (2), the loan rate for marketing as-
sistance loans under subsection (a) for a particular
commodity specified in such subsection shall be
equal to 70 percent of the simple average price re-
ceived by producers of that commodity during the
marketing years for the immediately preceding five
crops of that commodity.
‘‘(2) REQUIRED BUDGETARY ADJUSTMENTS.—
If the Secretary estimates for one of the marketing
years for the 1996 through 2002 crops of a particu-
lar commodity specified in subsection (a) that the
average price to be received by producers of that
commodity is likely to be less that the loan rate cal-
culated under paragraph (1) for that marketing
year, the Secretary shall reduce the loan rate for
that commodity for that marketing year by an
amount sufficient to enable the Secretary to provide
marketing assistance loans at no net cost to the
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Federal Government by preventing the accumulation
of that commodity by the Commodity Credit Cor-
poration through loan forfeitures and by limiting
producer gains under the marketing loan provision
under subsection (d).
‘‘(3) SIMPLE AVERAGE PRICE.—The Secretary
shall be responsible for determining the simple aver-
age price received by producers of a commodity spec-
ified in subsection (a). In determining the simple av-
erage price a commodity for a five-year period, the
Secretary shall exclude the year in which the average
price was the highest and the year in which the av-
erage price was the lowest during the period.
‘‘(d) MARKETING LOAN PROVISION.—If during the
marketing year, the Secretary determines that the market
price of a commodity subject to a marketing assistance
loan under this section falls below the lower of (1) the
loan rate, or (2) the loan rate as adjusted by subsection
(c)(2), the Secretary shall allow such loan to be repaid
at such market price. This subsection shall not apply in
the case of marketing assistance loans for extra long sta-
ple cotton, rye, or oilseeds.
‘‘(e) ADJUSTMENTS FOR GRADE, TYPE, QUALITY,
LOCATION, AND OTHER FACTORS.—The Secretary may
make such adjustments in the announced loan rate for a
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commodity specified in subsection (a) as the Secretary
considers appropriate to reflect differences in grade, type,
quality, location, and other factors.
‘‘(f) PRODUCERS ELIGIBLE FOR LOANS.—Only the
following producers shall be eligible for a marketing assist-
ance loan under this section:
‘‘(1) In the case of a marketing assistance loan
for a crop of wheat, feed grains (other than rye), up-
land cotton, or rice, a producer whose land on which
the crop is raised is subject to a market transition
contract under section 102.
‘‘(2) In the case of a marketing assistance loan
for a crop of extra long staple cotton, rye, or oil-
seeds, any producer.
‘‘(g) PROHIBITION ON STORAGE PAYMENTS.—The
Secretary may not make payments to producers to cover
storage charges incurred in connection with marketing as-
sistance loans made under this section.
‘‘(h) DEFINITIONS.—For purposes of this section:
‘‘(1) The term ‘feed grains’ means corn, grain
sorghums, barley, oats, and rye.
‘‘(2) The term ‘oilseeds’ means soybeans, sun-
flower seed, rapeseed, canola, safflower, flaxseed,
mustard seed, and, if designated by the Secretary,
other oilseeds.
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‘‘(i) REGULATIONS.—The Secretary may issue such
regulations as the Secretary determines necessary to carry
out this section.’’.
(b) REPEAL OF CURRENT ADJUSTMENT AUTHOR-
ITY.—Section 403 of the Agricultural Act of 1949 (7
U.S.C. 1423) is repealed.
SEC. 1104. REFORM OF PAYMENT LIMITATION PROVISIONS
OF FOOD SECURITY ACT OF 1985.
(a) ATTRIBUTION OF PAYMENTS MADE TO CORPORA-
TIONS AND OTHER ENTITIES.—Paragraph (5)(C) of sec-
tion 1001 of the Food Security Act of 1985 (7 U.S.C.
1308) is amended to read as follows:
‘‘(C)(i) In the case of payments to corporations and
other entities described in subparagraph (B)(i)(II), the
Secretary shall attribute payments to individuals in pro-
portion to their ownership interests in the corporation or
entity receiving the payment or in any other corporation
or entity that has a substantial beneficial interest in the
corporation or entity actually receiving the payment. This
subparagraph shall apply to individuals who hold or ac-
quire, directly or through another corporation or entity,
a substantial beneficial interest in the corporation or en-
tity actually receiving the payment.
‘‘(ii) In the case of payments to corporations and
other entities described in subparagraph (B)(i)(II), the
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Secretary shall also attribute payments to any State (or
political subdivision or agency thereof) or other corpora-
tion or entity that has a substantial beneficial interest in
the corporation or entity actually receiving the payment
in proportion to their ownership interests in the corpora-
tion or entity receiving the payment. This subparagraph
shall apply even if the payments are also attributable to
individuals under clause (i).
‘‘(iii) For purposes of this subparagraph, the term
‘substantial beneficial interest’ means not less than five
percent of all beneficial interests in the corporation or en-
tity actually receiving the payment, except that the Sec-
retary may set a lower percentage in order to ensure that
the provisions of this section and the scheme or device pro-
visions in section 1001B are not circumvented.’’.
(b) TRACKING OF PAYMENTS.—Paragraph (3) of sec-
tion 1001A(a) of the Food Security Act of 1985 (7 U.S.C.
1308–1(a)) is amended to read as follows:
‘‘(3) NOTIFICATION.—To facilitate administra-
tion of this section, each entity or individual receiv-
ing payments as a separate person shall notify each
individual or other entity that acquires or holds a
substantial beneficial interest in it of the require-
ments and limitations under this subsection. Each
such entity or individual receiving payments shall
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provide to the Secretary, at such times and in such
manner as prescribed by the Secretary, the name
and social security number of each individual, or the
name and taxpayer identification number of each en-
tity, that holds or acquires a substantial beneficial
interest.’’.
(c) CONFORMING AMENDMENT.—Paragraph (2) of
such section is amended to read as follows:
‘‘(2) SUBSTANTIAL
BENEFICIAL
INTEREST.—
For purposes of this subsection, the term ‘substan-
tial beneficial interest’ has the meaning given such
term in section 1001(5)(C)(iii).’’.
SEC. 1105. SUSPENSION OF CERTAIN PROVISIONS REGARD-
ING PROGRAM CROPS.
(a) WHEAT.—
(1) NONAPPLICABILITY
OF
CERTIFICATE
RE-
QUIREMENTS.—Sections 379d through 379j of the
Agricultural Adjustment Act of 1938 (7 U.S.C.
1379d–1379j) (relating to marketing certificate re-
quirements for processors and exporters) shall not
be applicable to wheat processors or exporters dur-
ing the period June 1, 1996, through May 31, 2003.
(2) SUSPENSION OF LAND USE, WHEAT MAR-
KETING ALLOCATION, AND PRODUCER CERTIFICATE
PROVISIONS.—Sections 331 through 339, 379b, and
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to any of the 1996 through 2002 crops of upland
cotton.
(2) NONAPPLICABILITY OF SECTION 103 PRO-
GRAM.—Section 103(a) of the Agricultural Act of
1949 (7 U.S.C. 1444(a)) shall not be applicable to
the 1996 through 2002 crops of upland cotton.
Subtitle B—Dairy
CHAPTER 1—AUTHORIZATION OF MARKET
TRANSITION PAYMENTS IN LIEU OF
MILK PRICE SUPPORT PROGRAM
SEC. 1201. SEVEN-YEAR MARKET TRANSITION CONTRACTS
FOR MILK PRODUCERS.
(a) CONTRACTS AUTHORIZED.—Section 204 of the
Agricultural Act of 1949 (7 U.S.C. 1446e) is amended to
read as follows:
‘‘SEC. 204. SEVEN-YEAR MARKET TRANSITION CONTRACTS
FOR MILK PRODUCERS AND RELATED PROVI-
SIONS.
‘‘(a) MARKET TRANSITION CONTRACTS AUTHOR-
IZED.—
‘‘(1) OFFER AND MAIN TERMS.—The Secretary
shall offer to enter into a contract (to be known as
a ‘market transition contract’) with willing milk pro-
ducers, under which the milk producers agree, in ex-
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change for seven payments under the contract, to
comply with—
‘‘(A) governmental animal waste manage-
ment regulations otherwise applicable to the
milk producer; and
‘‘(B) any wetland protection requirements
applicable to the farm under subtitle C of title
XII of such Act (16 U.S.C. 3821 et seq.).
‘‘(2) MILK PRODUCER DEFINED.—For purposes
of this section, the term ‘milk producer’ means a
person that was engaged in the production of cow’s
milk in the 48 contiguous States on September 15,
1995, and that received a payment during the 45-
day period before that date for cow’s milk marketed
for commercial use. Such term includes a person
considered to be a producer-handler that satisfies
the requirements of the preceding sentence.
‘‘(b) TIME
FOR CONTRACTING; DURATION.—The
Secretary shall begin to offer to enter into market transi-
tion contracts as soon as possible after the date of the
enactment of this section. The Secretary may not enter
into a market transition contract after April 15, 1996.
The term of each market transition contract shall extend
through December 31, 2001.
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‘‘(c) ESTIMATION OF PAYMENTS.—At the time the
Secretary enters into a market transition contract, the
Secretary shall provide an estimate of the payments antici-
pated to be made under the contract for at least fiscal
year 1996.
‘‘(d) TIME FOR PAYMENT.—The fiscal year 1996
payment under a market transition contract shall be made
on April 15, 1996, or as soon thereafter as practicable.
The Secretary shall make subsequent payments not later
than October 15 of each of the fiscal years 1997 through
2002.
‘‘(e) PAYMENT RATE.—The Secretary shall use the
following payment rates to calculate payments under a
market transition contract for a fiscal year:
‘‘(1) For fiscal year 1996, 10 cents per hun-
dredweight.
‘‘(2) For fiscal year 1997, 15 cents per hun-
dredweight.
‘‘(3) For fiscal year 1998, 13 cents per hun-
dredweight.
‘‘(4) For fiscal year 1999, 11 cents per hun-
dredweight.
‘‘(5) For fiscal year 2000, 9 cents per hundred-
weight.
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‘‘(6) For fiscal year 2001, 7 cents per hundred-
weight.
‘‘(7) For fiscal year 2002, 5 cents per hundred-
weight.
‘‘(f) CONTRACT PAYMENTS TO BE BASED ON PRO-
DUCTION HISTORY.—
‘‘(1) IN GENERAL.—The Secretary shall deter-
mine the historic annual milk production for each
milk producer that enters into a market transition
contract on the basis of milk checks reflecting pay-
ments for commercial marketings of cow’s milk or
such other records of commercial marketings or
product sales as may be acceptable to the Secretary.
Each milk producer’s historic annual milk produc-
tion shall be expressed in terms of hundredweights
of milk.
‘‘(2) PRODUCERS WITH THREE OR MORE YEARS
OF PRODUCTION.—In the case of a milk producer
that has been engaged in the production of milk for
at least three of the calendar years 1991 through
1995, the milk producer’s historic annual milk pro-
duction shall be equal to the average quantity of
milk marketed by the milk producer during the three
years of such period in which the largest quantities
of milk were marketed by the milk producer.
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‘‘(3) PRODUCERS WITH FEWER YEARS OF PRO-
DUCTION.—In the case of a milk producer not cov-
ered by paragraph (2), the Secretary shall assign the
milk producer an historic annual milk production
equal to an annualized average of the monthly quan-
tity of milk marketed by the milk producer during
the period in which the milk producer has been en-
gaged in milk production. The Secretary shall not
consider months of production after December 31,
1995.
‘‘(g) CALCULATION
OF PAYMENT AMOUNT.—The
total amount to be paid to a milk producer under a market
transition contract for a fiscal year shall be equal to the
product of—
‘‘(1) the payment rate in effect for that fiscal
year under subsection (e); and
‘‘(2) the historic annual milk production for the
milk producer determined under subsection (f).
‘‘(h) ASSIGNMENT OF PAYMENTS.—The right of a
milk producer to a payment under a market transition
contract shall be freely assignable by the milk producer.
The milk producer or assignee shall provide the Secretary
with notice, in such manner as the Secretary may require
in the market transition contract, of any assignment made
under this subsection.
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‘‘(i) EFFECT OF VIOLATION.—
‘‘(1) TERMINATION OF CONTRACT.—If a milk
producer subject to a market transition contract vio-
lates any governmental animal waste management
regulation that applies to the producer or wetland
protection requirements applicable to the producer,
the Secretary may terminate the producer’s market
transition contract. Upon such termination, the milk
producer shall forfeit all rights to receive future pay-
ments under the contract and shall refund to the
Secretary any payment under the contract received
by the producer after notification of the violation,
together with interest thereon as determined by the
Secretary. The Secretary shall make a determination
regarding violations of animal waste management
regulations under this paragraph in consultation
with the appropriate State governmental authority.
‘‘(2) REFUND OR ADJUSTMENT.—If the Sec-
retary determines that a violation of a market tran-
sition contract does not warrant termination of the
contract under paragraph (1), the Secretary may re-
quire the milk producer subject to the contract—
‘‘(A) to refund to the Secretary any pay-
ment under the contract received by the pro-
ducer after notification of the violation, to-
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gether with interest thereon as determined by
the Secretary; or
‘‘(B) to accept an adjustment in the
amount of future payments otherwise required
under the contract.
‘‘(j) MARKET TRANSITION CONTRACTS.—Notwith-
standing any other provision of law, no order issued for
any fiscal year under section 252 of the Balanced Budget
and Emergency Deficit Control Act of 1985 (2 U.S.C.
902) shall affect any payment under any market transi-
tion contract.’’.
(b) CONTINUED OPERATION OF EXISTING PROGRAM
THROUGH 1995.—
(1) PRICE SUPPORT OPERATIONS.—Until De-
cember 31, 1995, the Secretary of Agriculture shall
continue to use section 204 of the Agricultural Act
of 1949 (7 U.S.C. 1446e), as in effect on the day
before the date of the enactment of this Act, to sup-
port the price of milk produced in the 48 contiguous
States.
(2) PRICE REDUCTION.—Subsection (h) of such
section, relating to a reduction in the price received
by milk producers for all milk produced in the 48
contiguous States and marketed for commercial use,
shall continue to apply with respect to milk mar-
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keted through December 31, 1995. In the case of
milk producers that did not increase milk market-
ings in 1995 when compared to 1994 milk market-
ings, the Secretary of Agriculture shall make re-
funds available in 1996 to such milk producers in
the manner provided in paragraph (3) of such sub-
section.
(c) CONFORMING REPEAL OF GENERAL AUTHORITY
TO PROVIDE PRICE SUPPORT FOR MILK.—
(1) DESIGNATED
NONBASIC
AGRICULTURAL
COMMODITY.—Section 201(a) of the Agricultural
Act of 1949 (7 U.S.C. 1446(a)) is amended by strik-
ing ‘‘milk,’’.
(2) OTHER NONBASIC AGRICULTURAL COMMOD-
ITIES.—Section 301 of the Agricultural Act of 1949
(7 U.S.C. 1447) is amended by inserting ‘‘(other
than milk)’’ after ‘‘title II’’.
SEC. 1202. RECOURSE LOANS FOR COMMERCIAL PROC-
ESSORS OF DAIRY PRODUCTS.
The Agricultural Act of 1949 is amended by striking
section 424 (7 U.S.C. 1433c), as added by section 1003
of the Food Security Act of 1985 and effective for 1986
through 1990 crops, and inserting the following new sec-
tion:
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‘‘SEC. 424. RECOURSE LOANS FOR COMMERCIAL PROC-
ESSORS OF DAIRY PRODUCTS.
‘‘(a) RECOURSE LOANS AVAILABLE.—On and after
January 1, 1996, the Secretary may make recourse loans
available to commercial processors of eligible dairy prod-
ucts to assist such processors to manage inventories of eli-
gible dairy products to assure a greater degree of price
stability for the dairy industry during the year. Recourse
loans may be made available under such reasonable terms
and conditions as the Secretary may prescribe.
‘‘(b) AMOUNT OF LOAN.—The Secretary shall estab-
lish the amount of a loan for eligible dairy products, which
shall reflect 90 percent of the reference price for that
product. The rate of interest charged participants in this
program shall not be less than the rate of interest charged
the Commodity Credit Corporation by the United States
Treasury.
‘‘(c) PERIOD
OF LOANS.—A recourse loan made
under this section may not extend beyond the end of the
fiscal year during which the loan is made, except that the
Secretary may extend the loan for an additional period
not to exceed the end of the next fiscal year.
‘‘(d) DEFINITIONS.—For purposes of this section:
‘‘(1) The term ‘eligible dairy products’ means
cheddar cheese, butter, and nonfat dry milk.
‘‘(2) The term ‘reference price’ means—
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‘‘(A) for cheddar cheese, the average Na-
tional Cheese Exchange price for 40 pound
blocks of cheddar cheese for the previous three
months;
‘‘(B) for butter the average Chicago Mer-
cantile Exchange price for butter for the pre-
vious three months; and
‘‘(C) for nonfat dry milk, the Western
States price for nonfat dry milk for the pre-
vious three months.’’.
CHAPTER 2—DAIRY EXPORT PROGRAMS
SEC. 1211. DAIRY EXPORT INCENTIVE PROGRAM.
(a) IN GENERAL.—Section 153(c) of the Food Secu-
rity Act of 1985 (15 U.S.C. 713a–14(c)) is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(1);
(2) by striking the period at the end of para-
graph (2) and inserting ‘‘; and’’; and
(3) by adding at the end the following new
paragraphs:
‘‘(3) the maximum volume of dairy product ex-
ports allowable consistent with the obligations of the
United States as a member of the World Trade Or-
ganization are exported under the program each
year (minus the volume sold under section 1163 of
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the Food Security Act of 1985 (7 U.S.C. 1731 note)
during that year), except to the extent that the ex-
port of such a volume under the program would, in
the judgment of the Secretary, exceed the limitations
on the value set forth in subsection (f); and
‘‘(4) payments may be made under the program
for exports to any destination in the world for the
purpose of market development, except a destination
in a country with respect to which shipments from
the United States are otherwise restricted by law.’’.
(b) SOLE DISCRETION.—Section 153(b) of the Food
Security Act of 1985 (15 U.S.C. 713a–14(b)) is amended
by inserting ‘‘sole’’ before ‘‘discretion’’.
(c) MARKET DEVELOPMENT.—Section 153(e)(1) of
the Food Security Act of 1985 (15 U.S.C. 713a–14(e)(1))
is amended—
(1) by striking ‘‘and’’ and inserting ‘‘the’’; and
(2) by inserting before the period the following:
‘‘, and any additional amount that may be required
to assist in the development of world markets for
United States dairy products’’.
(d) MAXIMUM ALLOWABLE AMOUNTS.—Section 153
of the Food Security Act of 1985 (15 U.S.C. 713a–14)
is amended by adding at the end the following:
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‘‘(f) REQUIRED FUNDING.—The Commodity Credit
Corporation shall in each year use money and commodities
for the program under this section in the maximum
amount consistent with the obligations of the United
States as a member of the World Trade Organization,
minus the amount expended under section 1163 of the
Food Security Act of 1985 (7 U.S.C. 1731 note) during
that year. However, the Commodity Credit Corporation
may not exceed the limitations specified in subsection
(c)(3) on the volume of allowable dairy product exports.’’.
(e) CONFORMING AMENDMENT.—Section 153(a) of
the Food Security Act of 1985 (15 U.S.C. 713a–14(a))
is amended by striking ‘‘2001’’ and inserting ‘‘2002’’.
SEC. 1212. AUTHORITY TO ASSIST IN ESTABLISHMENT AND
MAINTENANCE OF EXPORT TRADING COM-
PANY.
The Secretary of Agriculture shall, consistent with
the obligations of the United States as a member of the
World Trade Organization, provide such advice and assist-
ance to the United States dairy industry as may be nec-
essary to enable that industry to establish and maintain
an export trading company under the Export Trading
Company Act of 1982 (15 U.S.C. 4001 et seq.) for the
purpose of facilitating the international market develop-
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ment for and exportation of dairy products produced in
the United States.
SEC. 1213. STANDBY AUTHORITY TO INDICATE ENTITY
BEST SUITED TO PROVIDE INTERNATIONAL
MARKET DEVELOPMENT AND EXPORT SERV-
ICES.
(a) INDICATION OF ENTITY BEST SUITED TO ASSIST
INTERNATIONAL MARKET DEVELOPMENT FOR AND EX-
PORT OF UNITED STATES DAIRY PRODUCTS.—If—
(1) the United States dairy industry has not es-
tablished an export trading company under the Ex-
port Trading Company Act of 1982 (15 U.S.C. 4001
et seq.) for the purpose of facilitating the inter-
national market development for and exportation of
dairy products produced in the United States on or
before June 30, 1996; or
(2) the quantity of exports of United States
dairy products during the 12-month period preced-
ing July 1, 1997 does not exceed the quantity of ex-
ports of United States dairy products during the 12-
month period preceding July 1, 1996 by 1.5 billion
pounds (milk equivalent, total solids basis);
the Secretary of Agriculture is directed to indicate which
entity autonomous of the Government of the United States
is best suited to facilitate the international market devel-
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opment for and exportation of United States dairy prod-
ucts.
(b) FUNDING OF EXPORT ACTIVITIES.—The Sec-
retary shall assist the entity in identifying sources of fund-
ing for the activities specified in subsection (a) from with-
in the dairy industry and elsewhere.
(c) APPLICATION OF SECTION.—This section shall
apply only during the period beginning on July 1, 1997
and ending on September 30, 2000.
SEC. 1214. STUDY AND REPORT REGARDING POTENTIAL IM-
PACT OF URUGUAY ROUND ON PRICES, IN-
COME AND GOVERNMENT PURCHASES.
(a) STUDY.—The Secretary of Agriculture shall con-
duct a study, on a variety by variety of cheese basis, to
determine the potential impact on milk prices in the Unit-
ed States, dairy producer income, and Federal dairy pro-
gram costs, of the allocation of additional cheese granted
access to the United States as a result of the obligations
of the United States as a member of the World Trade
Organization.
(b) REPORT.—Not later than September 30, 1996,
the Secretary shall report to the Committees on Agri-
culture of the Senate and the House of Representatives
the results of the study conducted under this section.
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(c) RULE OF CONSTRUCTION.—Any limitation im-
posed by Act of Congress on the conduct or completion
of studies or reports to Congress shall not apply to the
study and report required under this section unless such
limitation explicitly references this section in doing so.
CHAPTER 3—DAIRY PROMOTION
PROGRAMS
SEC. 1221. RESEARCH AND PROMOTION ACTIVITIES UNDER
FLUID MILK PROMOTION ACT OF 1990.
(a) EXTENSION OF ORDER.—Section 1999O of the
Fluid Milk Promotion Act of 1990 (subtitle H of title XIX
of Public Law 101–624; 7 U.S.C. 6414(a)) is amended—
(1) by striking subsection (a); and
(2) by redesignating subsections (b) and (c) as
subsections (a) and (b), respectively.
(b) DEFINITION OF RESEARCH.—Paragraph (6) of
section 1999C of such Act (7 U.S.C. 6402) is amended
to read as follows:
‘‘(6) RESEARCH.—The term ‘research’ means—
‘‘(A) market research to support and in-
crease the effectiveness of industry advertising,
promotion, and educational activities; and
‘‘(B) other research to expand sales of
fluid milk products, including research regard-
ing the development of new products, new prod-
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uct characteristics, and improved technology in
the production, manufacturing, or processing of
milk and the products of milk.’’.
(c) CONFORMING AMENDMENTS REGARDING MAR-
KETING ORDERS.—Section 1999J(b) of such Act (7
U.S.C. 6409(b)) is amended—
(1) by striking paragraph (1);
(2) in paragraph (2), by striking ‘‘(2) other-
wise’’ and inserting ‘‘(1)’’; and
(3) by redesignating paragraph (3) as para-
graph (2).
(d) CLARIFICATION
OF
REFERENDUM
REQUIRE-
MENTS.—
(1) SUSPENSION OR TERMINATION.—Subsection
(b) of section 1999O of such Act (7 U.S.C. 6414),
as redesignated by subsection (a)(2), is amended—
(A) in paragraph (1), by striking ‘‘all proc-
essors’’ and inserting ‘‘all fluid milk proc-
essors’’; and
(B) in paragraph (2)(B), by striking ‘‘all
processors’’ and inserting ‘‘all fluid milk proc-
essors voting in the referendum’’.
(2) 
CONFORMING
AMENDMENT.—Section
1999N(b)(2) of such Act (7 U.S.C. 6413(b)(2)) is
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amended by striking ‘‘all processors’’ and inserting
‘‘all fluid milk processors voting in the referendum’’.
SEC. 1222. EXPANSION OF DAIRY PROMOTION PROGRAM TO
COVER DAIRY PRODUCTS IMPORTED INTO
THE UNITED STATES.
(a) DECLARATION OF POLICY.—Section 110(b) of
the Dairy Production Stabilization Act of 1983 (7 U.S.C.
4501(b)) is amended by inserting after ‘‘commercial use’’
the following: ‘‘and dairy products imported into the Unit-
ed States’’.
(b) DEFINITIONS.—
(1) MILK.—Subsection (d) of section 111 of
such Act (7 U.S.C. 4502) is amended by inserting
before the period at the end the following: ‘‘or cow’s
milk imported into the United States in the form of
dairy products intended for consumption in the
United States’’.
(2) DAIRY PRODUCTS.—Subsection (e) of such
section is amended by inserting before the semicolon
the following: ‘‘and casein (except casein imported
under 
sections 
3501.90.20 
(casein 
glue) 
and
3501.90.50 (other) of the Harmonized Tariff Sched-
ule)’’.
(3) RESEARCH.—Subsection (j) of such section
is amended by inserting before the semicolon the fol-
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lowing: ‘‘or to reduce the costs associated with proc-
essing or marketing those products’’.
(4) UNITED STATES.—Subsection (l) of such
section is amended to read as follows:
‘‘(l) the term ‘United States’ means the several
States and the District of Columbia;’’.
(5) IMPORTERS AND EXPORTERS.—Such section
is further amended—
(A) in subsection (k), by striking ‘‘and’’ at
the end of such subsection; and
(B) by adding at the end the following new
subsections:
‘‘(m) the term ‘importer’ means the first person
to take title to dairy products imported into the
United States for domestic consumption; and
‘‘(n) the term ‘exporter’ means any person who
exports dairy products from the United States.’’.
(c) MEMBERSHIP
OF BOARD.—Section 113(b) of
such Act (7 U.S.C. 4504(b)) is amended—
(1) in the first sentence, by striking ‘‘thirty-six
members’’ and inserting ‘‘38 members, including one
representative of importers and one representative of
exporters to be appointed by the Secretary’’;
(2) in the second sentence, by striking ‘‘Mem-
bers’’ and inserting ‘‘The remaining members’’; and
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(3) in the third sentence, by striking ‘‘United
States’’ and inserting ‘‘United States, including
Alaska and Hawaii’’.
(d) ASSESSMENT.—Section 113(g) of such Act (7
U.S.C. 4504(g)) is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(g)’’; and
(2) by adding at the end the following new
paragraph:
‘‘(2) The order shall provide that each importer of
dairy products intended for consumption in the United
States shall remit to the Board, in the manner prescribed
by the order, an assessment equal to 1.2 cents per pound
of total milk solids contained in the imported dairy prod-
ucts, or 15 cents per hundredweight of milk contained in
the imported dairy products, whichever is less. If an im-
porter can establish that it is participating in active, ongo-
ing qualified State or regional dairy product promotion or
nutrition programs intended to increase the consumption
of milk and dairy products, the importer shall receive cred-
it in determining the assessment due from that importer
for contributions to such programs of up to .8 cents per
pound of total milk solids contained in the imported dairy
products, or 10 cents per hundredweight of milk contained
in the imported dairy products, whichever is less. The as-
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sessment collected under this paragraph shall be used for
the purpose specified in paragraph (1).’’.
(e) RECORDS.—Section 113(k) of such Act (7 U.S.C.
4504(k)) is amended in the first sentence by inserting
after ‘‘commercial use,’’ the following: ‘‘each importer of
dairy products,’’.
(f) TERMINATION OR SUSPENSION OF ORDER.—Sec-
tion 116(b) of such Act (7 U.S.C. 4507(b)) is amended—
(1) by inserting ‘‘and importers’’ after ‘‘produc-
ers’’ each place it appears;
(2) by striking ‘‘who, during a representative
period (as determined by the Secretary), have been
engaged in the production of milk for commercial
use’’; and
(3) by adding at the end the following new sen-
tences: ‘‘A producer shall be eligible to vote in the
referendum if the producer, during a representative
period (as determined by the Secretary), has been
engaged in the production of milk for commercial
use. An importer shall be eligible to vote in the ref-
erendum if the importer, during a representative pe-
riod (as determined by the Secretary), has been en-
gaged in the importation of dairy products into the
United States intended for consumption in the
United States.’’.
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SEC. 1223. PROMOTION OF UNITED STATES DAIRY PROD-
UCTS 
IN 
INTERNATIONAL 
MARKETS
THROUGH DAIRY PROMOTION PROGRAM.
Section 113(e) of the Dairy Production Stabilization
Act of 1983 (7 U.S.C. 4504(e)) is amended by adding at
the end the following new sentence: ‘‘For each of the fiscal
years 1996 through 2000, the Board’s budget shall pro-
vide for the expenditure of not less than 10 percent of
the anticipated revenues available to the Board to develop
international markets for, and to promote within such
markets, the consumption of dairy products produced in
the United States from milk produced in the United
States.’’.
SEC. 1224. ISSUANCE OF AMENDED ORDER UNDER DAIRY
PRODUCTION STABILIZATION ACT OF 1983.
(a) IMPLEMENTATION OF AMENDMENTS.—To imple-
ment the amendments made by sections 1222 and 1223,
the Secretary of Agriculture shall issue an amended dairy
products promotion and research order under section 112
of the Dairy Production Stabilization Act of 1983 (7
U.S.C. 4504) reflecting such amendments, and no other
changes, in the order in existence on the date of the enact-
ment of this Act.
(b) PROPOSAL
OF AMENDED ORDER.—Not later
than 60 days after the date of the enactment of this Act,
the Secretary of Agriculture shall publish a proposed dairy
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products promotion and research order reflecting the
amendments made by sections 1222 and 1223. The Sec-
retary shall provide notice and an opportunity for public
comment on the proposed order.
(c) ISSUANCE OF AMENDED ORDER.—After notice
and opportunity for public comment are provided in ac-
cordance with subsection (b), the Secretary of Agriculture
shall issue a final dairy products promotion and research
order, taking into consideration the comments received
and including in the order such provisions as are necessary
to ensure that the order is in conformity with the amend-
ments made by sections 1222 and 1223.
(d) EFFECTIVE DATE.—The final dairy products pro-
motion and research order shall be issued and become ef-
fective not later than 120 days after publication of the
proposed order.
(e) REFERENDUM ON AMENDMENTS.—Section 115
of Dairy Production Stabilization Act of 1983 (7 U.S.C.
4506) is amended—
(1) by redesignating subsection (b) as sub-
section (c); and
(2) by inserting after subsection (a) the follow-
ing new subsection:
‘‘(b) REFERENDUM.—Not later than 36 months after
the issuance of the order reflecting the amendments made
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by sections 1222 and 1223 of the Agricultural Reconcili-
ation Act of 1995, the Secretary shall conduct a referen-
dum under this section for the sole purpose of determining
whether the requirements of such amendments shall be
continued. The Secretary shall conduct the referendum
among persons who have been producers or importers dur-
ing a representative period as determined by the Sec-
retary. The requirements of such amendments shall be
continued only if the Secretary determines that such re-
quirements have been approved by not less than a majority
of the persons voting in the referendum. If continuation
of the amendments is not approved, the Secretary shall
issue a new order, within six months after the announce-
ment of the results of the referendum, that is identical
to the order in effect on the date of the enactment of the
Agricultural Reconciliation Act of 1995. The new order
shall become effective upon issuance and shall not be sub-
ject to referendum for approval.’’.
CHAPTER 4—VERIFICATION OF MILK
RECEIPTS
SEC. 1231. PROGRAM TO VERIFY RECEIPTS OF MILK.
(a) ESTABLISHMENT OF VERIFICATION PROGRAM.—
Section 204 of the Agricultural Act of 1949 (7 U.S.C.
1446e), as amended by section 1201, is further amended
by adding at the end the following new subsection:
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‘‘(k) VERIFICATION OF RECEIPTS OF MILK.—
‘‘(1) VERIFICATION PROGRAM REQUIRED.—The
Secretary shall establish a program through which
the verification of receipts of all cow’s milk marketed
in the 48 contiguous States and the auditing of mar-
keting agreements with respect to receipts of such
milk may be accomplished. The Secretary shall pre-
scribe regulations to establish the program required
by this subsection.
‘‘(2) ADMINISTRATIVE
SERVICES.—The pro-
gram shall provide a means by which (A) processors,
associations of producers, and other persons engaged
in the handling of milk and milk products file re-
ports with the Secretary regarding receipts of milk,
prices paid for milk, and the purposes for which
milk was used by handlers, (B) authorized deduc-
tions from payments to producers, including assess-
ments for research and promotion programs, are col-
lected, (C) assurance of proper payment by handlers
for milk purchased is achieved, and (D) the reports,
records, and facilities of handlers are reviewed and
inspected to assure their accuracy. The regulations
shall provide for the publication of statistics regard-
ing receipts, prices, and uses of milk. Statistics pub-
lished by the Secretary shall include information re-
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garding payments received by producers for milk on
a component basis, including payments for milkfat,
protein and other solids. The Secretary shall collect
an assessment from handlers required to file reports
under this paragraph to cover any expenses associ-
ated with the collection and publication of such sta-
tistics. Assessments shall be based on the relative
volume of receipts of milk by each handler and shall
not exceed the total cost of such expenses.
‘‘(3) MARKETING
SERVICES.—The program
shall further provide a means by which the weighing,
sampling, and testing of milk purchased from pro-
ducers is accomplished and verified. This paragraph
shall not apply to producers for whom such market-
ing services are rendered by a cooperative marketing
association qualified under the provisions of the Act
of February 18, 1922 (7 U.S.C. 291–292), com-
monly known as the ‘Co-operative Marketing Asso-
ciations Act’. An assessment may be levied on pro-
ducers for whom such services are performed to
cover the expenses of the Secretary or the coopera-
tive marketing association providing the services. As-
sessments shall be based on the relative marketings
of milk by each producer and shall not exceed the
total cost of providing such services.
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‘‘(4) MARKETING AGREEMENTS.—Producers or
associations of producers, including cooperative mar-
keting associations qualified under the provisions of
the Act of February 18, 1922 (7 U.S.C. 291–292),
commonly known as the ‘Co-operative Marketing As-
sociations Act’, may negotiate and enter into mar-
keting agreements or other private contracts with
handlers for the marketing and receipt of milk.
Upon the request of either or both of the parties, the
Secretary may perform an audit of the agreement or
contract to assure compliance with its terms, except
that the Secretary shall be reimbursed for any costs
associated with the audit in the manner provided in
the agreement or contract. If there is no provision
for the reimbursement of the Secretary in the agree-
ment or contract, the party or parties requesting the
audit shall provide such reimbursement.
‘‘(5) PROHIBITION
ON
MARKETING
LIMITA-
TIONS.—No marketing agreement or Government
order or regulation applicable to milk and its prod-
ucts in any marketing area or jurisdiction shall pro-
hibit or in any manner limit the marketing in that
area of any milk or product of milk produced in any
production area in the United States.
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‘‘(6) EFFECT
ON
EXISTING
MARKETING
OR-
DERS.—Effective July 1, 1996, the program estab-
lished under this subsection shall supersede any
Federal marketing order issued under section 8c of
the Agricultural Adjustment Act (7 U.S.C. 608c),
reenacted with amendments by the Agricultural
Marketing Agreement Act of 1937, with respect to
milk or its products.’’.
(b) TIME FOR ISSUANCE.—Not later than July 1,
1996, the Secretary of Agriculture shall issue final regula-
tions under subsection (k) of section 204 of the Agricul-
tural Act of 1949, as added by this section, to establish
the verification program required by such subsection. The
regulations shall take effect on that date.
(c) PROCESS.—In preparation for the issuance of the
regulations under subsection (k) of section 204 of the Ag-
ricultural Act of 1949, as added by this section, the Sec-
retary shall comply with the following:
(1) The Secretary shall issue proposed regula-
tions not later than April 1, 1996.
(2) The Secretary shall provide for a comment
period on the regulations, as proposed under para-
graph (1). However, the comment period shall not
exceed 60 days nor extend past May 31, 1996.
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SEC. 1232. VERIFICATION PROGRAM TO SUPERSEDE MUL-
TIPLE EXISTING FEDERAL ORDERS.
(a) TERMINATION OF MILK MARKETING ORDERS.—
Section 8c of the Agricultural Adjustment Act (7 U.S.C.
608c), reenacted with amendments by the Agricultural
Marketing Agreement Act of 1937, is amended by striking
paragraphs (5) and (18) relating to milk and its products.
(b) PROHIBITION
ON SUBSEQUENT ORDERS RE-
GARDING MILK.—Paragraph (2) of such section is amend-
ed—
(1) by striking ‘‘Milk, fruits’’ and inserting
‘‘Fruits’’; and
(2) by inserting ‘‘milk,’’ after ‘‘honey,’’ in sub-
paragraph (B).
(c) CONFORMING AMENDMENTS.—(1) Section 2(3) of
such Act (7 U.S.C. 602(3) is amended by striking ‘‘, other
than milk and its products,’’.
(2) Section 8c of such Act (7 U.S.C. 608c) is amend-
ed—
(A) in paragraph (6), by striking ‘‘, other than
milk and its products,’’;
(B) in paragraph (7)(B), by striking ‘‘(except
for milk and cream to be sold for consumption in
fluid form)’’;
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(C) in paragraph (11)(B), by striking ‘‘Except
in the case of milk and its products, orders’’ and in-
serting ‘‘Orders’’;
(D) in paragraph (13)(A), by striking ‘‘, except
to a retailer in his capacity as a retailer of milk and
its products’’; and
(E) in paragraph (17), by striking the second
proviso, which relates to milk orders.
(3) Section 8d(2) of such Act (7 U.S.C. 608d(2)) is
amended by striking the second sentence, which relates to
information from milk handlers.
(4) Section 10(b)(2) of such Act (7 U.S.C. 610(b)(2))
is amended—
(A) by striking clause (i);
(B) by redesignating clauses (ii) and (iii) as
clauses (i) and (ii), respectively; and
(C) in clause (i) (as so redesignated), by strik-
ing ‘‘other commodity’’ in the first sentence and in-
serting ‘‘commodity’’.
(5) Section 11 of such Act (7 U.S.C. 611) is amended
by striking ‘‘and milk, and its products,’’.
(6) Section 715 of the Agriculture, Rural Develop-
ment, Food and Drug Administration, and Related Agen-
cies Appropriations Act, 1994 (Public Law 103–111; 107
Stat. 1079; 7 U.S.C. 608d note), is amended by striking
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the third proviso, which relates to information from milk
handlers.
(d) EFFECTIVE DATE.—The amendments made by
this section shall take effect on July 1, 1996.
CHAPTER 5—MISCELLANEOUS
PROVISIONS RELATED TO DAIRY
SEC. 1241. EXTENSION OF TRANSFER AUTHORITY REGARD-
ING MILITARY AND VETERANS HOSPITALS.
Subsections (a) and (b) of section 202 of the Agricul-
tural Act of 1949 (7 U.S.C. 1446a) are amended by strik-
ing ‘‘1995’’ both places it appears and inserting ‘‘2002’’.
SEC. 1242. EXTENSION OF DAIRY INDEMNITY PROGRAM.
Section 3 of Public Law 90–484 (7 U.S.C. 450l) is
amended by striking ‘‘1995’’ and inserting ‘‘2002’’.
SEC. 1243. EXTENSION OF REPORT REGARDING EXPORT
SALES OF DAIRY PRODUCTS.
Section 1163(c) of the Food Security Act of 1985 is
amended by striking ‘‘1995’’ and inserting ‘‘2002’’.
SEC. 1244. STATUS OF PRODUCER-HANDLERS.
The legal status of producer-handlers of milk under
the Agricultural Adjustment Act (7 U.S.C. 601 et seq.),
reenacted with amendments by the Agricultural Marketing
Agreement Act of 1937, shall be the same after the
amendments made by this title take effect as it was before
the effective date of the amendments.
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Subtitle C—Other Commodities
SEC. 1301. EXTENSION AND MODIFICATION OF PRICE SUP-
PORT AND QUOTA PROGRAMS FOR PEANUTS.
(a) EXTENSION OF PRICE SUPPORT PROGRAM.—Sec-
tion 108B of the Agricultural Act of 1949 (7 U.S.C.
1445c–3) is amended—
(1) in the section heading, by striking ‘‘1991
THROUGH 1997 CROPS OF’’;
(2) in subsections (a)(1), (b)(1), and (h), by
striking ‘‘1997’’ each place it appears and inserting
‘‘2002’’;
(3) in subsection (g)(1)—
(A) by striking ‘‘1997 crops’’ the first
place it appears and inserting ‘‘2002 crops’’;
and
(B) by striking ‘‘1997 crop’’ both places it
appears and inserting ‘‘1997 through 2002
crops’’; and
(4) in subsection (g)(2)(A)—
(A) by striking ‘‘1997 crop’’ in clause
(i)(IV) and inserting ‘‘1997 through 2002
crops’’; and
(B) by striking ‘‘1997’’ in clause (ii)(II)
and inserting ‘‘2002’’.
(b) CHANGES TO PRICE SUPPORT PROGRAM.—
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(1) QUOTA SUPPORT RATE.—
(A) SUPPORT
RATE
FOR
1996
THROUGH
2002 CROPS.—Subsection (a)(2) of section 108B
of the Agricultural Act of 1949 (7 U.S.C.
1445c–3) is amended to read as follows:
‘‘(2) SUPPORT
RATE.—The national average
quota support rate for quota peanuts shall be equal
to $610 per ton for each of the 1996 through 2002
crops of quota peanuts.’’.
(B) EFFECT OF AMENDMENT ON CURRENT
CROP.—The national average quota support
rate in effect under section 108B(a)(2) of the
Agricultural Act of 1949 (7 U.S.C. 1445c–3)
on the day before the date of the enactment of
this Act shall continue to apply with respect to
the 1995 crop of quota peanuts.
(2) OFFERS FROM HANDLERS.—Subsection (a)
of such section is amended—
(A) by redesignating paragraphs (4) and
(5) as paragraphs (5) and (6), respectively; and
(B) by inserting after paragraph (3) the
following new paragraph:
‘‘(4) OFFERS FROM HANDLERS.—The Secretary
shall reduce the support rate by 15 percent for any
producer on a farm who had available to the pro-
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ducer an offer from a handler to purchase quota
peanuts from the farm at a price equal to or greater
than the applicable quota support rate.’’.
(3) COVERING
LOSSES.—Subsection (d)(2) of
such section is amended to read as follows:
‘‘(2) QUOTA
LOAN
POOLS.—Losses in quota
area pools shall be covered using the following
sources in the following order of priority:
‘‘(A) TRANSFERS FROM ADDITIONAL LOAN
POOLS.—The proceeds due any producer from
any pool shall be reduced by the amount of any
loss that is incurred with respect to peanuts
transferred from an additional loan pool to a
quota loan pool by such producer under section
358–1(b)(8) of the Agricultural Adjustment Act
of 1938.
‘‘(B) OTHER PRODUCERS IN SAME POOL.—
Further losses in an area quota pool shall be
offset by reducing the gain of any producer in
such pool by the amount of pool gains attrib-
uted to the same producer from the sale of ad-
ditional peanuts for domestic and export edible
use.
‘‘(C) USE OF MARKETING ASSESSMENTS.—
The Secretary shall use funds collected under
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subsection (g) (except funds attributable to
handlers) to offset further losses in area quota
pools. The Secretary shall transfer to the
Treasury those funds collected under subsection
(g) and available for use under this paragraph
that the Secretary determines are not required
to cover losses in area quota pools.
‘‘(D) CROSS COMPLIANCE.—Further losses
in area quota pools, other than losses incurred
as a result of transfers from additional loan
pools to quota loan pools under section 358–
1(b)(8) of the Agricultural Adjustment Act of
1938, shall be offset by any gains or profits
from quota pools in other production areas
(other than separate type pools established
under subsection (c)(2)(A) for Valencia peanuts
produced in New Mexico) in such manner as
the Secretary shall by regulation prescribe.
‘‘(E) INCREASED ASSESSMENTS.—If use of
the authorities provided in the preceding sub-
paragraphs is not sufficient to cover losses in
an area quota pool, the Secretary shall increase
the marketing assessment established under
subsection (g) by such an amount as the Sec-
retary considers necessary to cover the losses.
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The increased assessment shall apply only to
quota peanuts marketed in the production area
covered by that pool. Amounts collected under
subsection (g) as a result of the increased as-
sessment shall be retained by the Secretary to
cover losses in that pool.’’.
(c) EXTENSION OF NATIONAL POUNDAGE QUOTA
PROGRAM.—Part VI of subtitle B of title III of the Agri-
cultural Adjustment Act of 1938 is amended—
(1) in section 358–1 (7 U.S.C. 1358–1)—
(A) in the section heading, by striking
‘‘1991 THROUGH 1997 CROPS OF’’;
(B) in subsection (a)(3), by striking
‘‘1990’’ and inserting ‘‘1990, for the 1991
through 1995 marketing years, and 1995, for
the 1996 through 2002 marketing years’’;
(C) in subsection (b)(1)(A)—
(i) by striking ‘‘1997’’ and inserting
‘‘2002’’; and
(ii) in clause (i), by inserting before
the semicolon the following: ‘‘, in the case
of the 1991 through 1995 marketing
years, and the 1995 marketing year, in the
case of the 1996 through 2002 marketing
years’’; and
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(D) in subsections (b)(1)(B), (b)(2)(A),
(b)(2)(C), (b)(3)(A), and (f), by striking
‘‘1997’’ each place it appears and inserting
‘‘2002’’;
(2) in section 358b (7 U.S.C. 1358b)—
(A) in the section heading, by striking
‘‘1991 THROUGH 1995 CROPS OF’’; and
(B) in subsection (c), by striking ‘‘1995’’
and inserting ‘‘2002’’;
(3) in section 358c(d) (7 U.S.C. 1358c(d)), by
striking ‘‘1995’’ and inserting ‘‘2002’’; and
(4) in section 358e (7 U.S.C. 1359a)—
(A) in the section heading, by striking
‘‘1991 THROUGH 1997’’ and inserting ‘‘CER-
TAIN’’; and
(B) in subsection (i), by striking ‘‘1997’’
and inserting ‘‘2002’’.
(d) PRIORITIZED
QUOTA
REDUCTIONS.—Section
358–1(b)(2)(C) of the Agricultural Adjustment Act of
1938 (7 U.S.C. 1358–1(b)(2)(C)) is amended—
(1) by striking ‘‘all the’’; and
(2) by adding at the end the following new sen-
tence: ‘‘Rather than allocating the decrease among
all the farms in a State, the Secretary shall allocate
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the decrease among farms in the following order of
priority:
‘‘(i) Farms owned or controlled by
municipalities, airport authorities, schools,
colleges, refuges, and other public entities
(not including universities for research
purposes).
‘‘(ii) Farms for which the quota hold-
er is not a producer and resides in another
State.
‘‘(iii) Farms for which the quota hold-
er, although a resident of the State, is not
a producer.
‘‘(iv) Other farms described in the
first sentence of this subparagraph.’’.
(e) ELIMINATION OF QUOTA FLOOR.—Section 358–
1(a)(1) of the Agricultural Adjustment Act of 1938 (7
U.S.C. 1358–1(a)(1)) is amended by striking the second
sentence.
(f) SPRING
AND
FALL
TRANSFERS
WITHIN
A
STATE.—Section 358b(a)(1) of the Agricultural Adjust-
ment Act of 1938 (7 U.S.C. 1358b(a)(1)) is amended—
(1) by striking ‘‘any such lease’’ in the matter
preceding the subparagraphs and inserting ‘‘any
such sale or lease’’; and
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(2) by striking ‘‘in the fall or after the normal
planting season—’’ and subparagraphs (A) and (B)
and inserting the following: ‘‘in the spring (or before
the normal planting season) or in the fall (or after
the normal planting season) with the owner or oper-
ator of a farm located within any county in the same
State. In the case of a fall transfer or a transfer
after the normal planting season, the transfer may
be made only if not less than 90 percent of the basic
quota (the farm quota exclusive of temporary quota
transfers), plus any poundage quota transferred to
the farm under this subsection, has been planted or
considered planted on the farm from which the
quota is to be leased.’’.
(g) 
TRANSFERS
IN
COUNTIES
WITH
SMALL
QUOTAS.—Section 358b(a) of the Agricultural Adjust-
ment Act of 1938 (7 U.S.C. 1358b(a)) is amended by add-
ing at the end the following new paragraph:
‘‘(4) TRANSFERS
IN
COUNTIES
WITH
SMALL
QUOTAS.—Notwithstanding paragraphs (1) and (2),
in the case of any county for which the poundage
quota allocated to the county was less than 10,000
tons for the preceding year’s crop, all or any part of
a farm poundage quota for a farm in that county
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may be transferred by sale or lease or otherwise to
a farm in any other county in the same State.’’.
(h) UNDERMARKETINGS.—
(1) ELIMINATION.—Subsection (b) of section
358–1 of the Agricultural Adjustment Act of 1938
(7 U.S.C. 1358–1) is amended by striking para-
graphs (8) and (9).
(2) CONFORMING
AMENDMENTS.—(A) Such
subsection is further amended—
(i) in paragraph (1)(B), by striking ‘‘in-
cluding—’’ and clauses (i) and (ii) and insert-
ing ‘‘including any increases resulting from the
allocation of quotas voluntarily released for 1
year under paragraph (7).’’; and
(ii) in paragraph (3)(B), by striking ‘‘in-
clude—’’ and clauses (i) and (ii) and inserting
‘‘include any increase resulting from the alloca-
tion of quotas voluntarily released for 1 year
under paragraph (7).’’.
(B) Section 358b(a) of the Agricultural Adjust-
ment Act of 1938 (7 U.S.C. 1358b(a)) is amended—
(i) in paragraph (1) (as amended by sub-
section (f)), by striking ‘‘(including any applica-
ble under marketings)’’ both places it appears;
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(ii) in paragraph (2), by striking ‘‘(includ-
ing any applicable under marketings)’’; and
(iii) in paragraph (3), by striking ‘‘(includ-
ing any applicable undermarketings)’’.
(i) LIMITATION
ON
PAYMENTS
FOR
DISASTER
TRANSFERS.—Section 358–1(b) of the Agricultural Ad-
justment Act of 1938 (7 U.S.C. 1358–1(b)), as amended
by subsection (h), is further amended by adding at the
end the following new paragraph:
‘‘(8) TRANSFER
OF
ADDITIONAL
PEANUTS.—
Additional peanuts on a farm from which the quota
poundage was not harvested and marketed because
of drought, flood, or any other natural disaster, or
any other condition beyond the control of the pro-
ducer, may be transferred to the quota loan pool for
pricing purposes on such basis as the Secretary shall
by regulation provide, except that the poundage of
such peanuts so transferred shall not exceed the dif-
ference in the total peanuts meeting quality require-
ments for domestic edible use as determined by the
Secretary marketed from the farm and the total
farm poundage quota, excluding quota pounds trans-
ferred to the farm in the fall. Peanuts transferred
under this paragraph shall be supported at a total
of not more than 70 percent of the quota support
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rate for the marketing years in which such transfers
occur and such transfers for a farm shall not exceed
25 percent of the total farm quota pounds, excluding
pounds transferred in the fall.’’.
(j) TEMPORARY QUOTA ALLOCATION.—
(1) ANNUAL
ALLOCATION.—Subsection (b)(2)
of section 358–1 of the Agricultural Adjustment Act
of 1938 (7 U.S.C. 1358–1) is amended—
(A) in subparagraph (A), by striking ‘‘sub-
paragraph (B) and subject to’’; and
(B) by striking subparagraph (B) and in-
serting the following new subparagraph:
‘‘(B) TEMPORARY QUOTA ALLOCATION.—
‘‘(i) ALLOCATION RELATED TO SEED
PEANUTS.—Temporary allocation of quota
pounds for the marketing year only in
which the crop is planted shall be made to
producers for each of the 1996 through
2002 marketing years as provided in this
subparagraph. The temporary quota alloca-
tion shall be equal to the pounds of seed
peanuts planted on the farm, as may be
adjusted under regulations prescribed by
the Secretary. The temporary allocation of
quota pounds under this paragraph shall
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be in addition to the farm poundage quota
otherwise established under this subsection
and shall be credited for the applicable
marketing year only, in total to the pro-
ducer of the peanuts on the farm in a
manner prescribed by the Secretary.
‘‘(ii) EFFECT
OF
OTHER
REQUIRE-
MENTS.—Nothing in this section shall alter
or change in any way the requirements re-
garding the use of quota and additional
peanuts established by section 359a(b) of
the Agricultural Adjustment Act of 1938
(7 U.S.C. 1359a(b)), as added by section
804 of the Food, Agriculture, Conserva-
tion, and Trade Act of 1990.’’.
(2) 
CONFORMING
AMENDMENT.—Subsection
(a)(1) of such section is amended by striking ‘‘do-
mestic edible, seed,’’ and inserting ‘‘domestic edible
use’’.
(k) SUSPENSION OF MARKETING QUOTAS AND ACRE-
AGE ALLOTMENTS.—The following provisions of the Agri-
cultural Adjustment Act of 1938 shall not apply to the
1996 through 2002 crops of peanuts:
(1) Subsections (a) through (j) of section 358
(7 U.S.C. 1358).
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(2) Subsections (a) through (h) of section 358a
(7 U.S.C. 1358a).
(3) Subsections (a), (b), (d), and (e) of section
358d (7 U.S.C. 1359).
(4) Part I of subtitle C of title III (7 U.S.C.
1361 et seq.).
(5) Section 371 (7 U.S.C. 1371).
(l) EXTENSION
OF
REPORTING
AND
RECORD-
KEEPING REQUIREMENTS.—Section 373(a) of the Agri-
cultural Adjustment Act of 1938 (7 U.S.C. 1373(a)) is
amended by inserting after the first sentence the following
new sentence: ‘‘In the case of the 1996 through 2002
crops of peanuts, this subsection shall also apply to all
producers engaged in the production of peanuts.’’.
(m) SUSPENSION OF CERTAIN PRICE SUPPORT PRO-
VISIONS.—Section 101 of the Agricultural Act of 1949 (7
U.S.C. 1441) shall not apply to the 1996 through 2002
crops of peanuts.
SEC. 1302. AVAILABILITY OF LOANS FOR PROCESSORS OF
SUGARCANE AND SUGAR BEETS.
(a) SUGAR LOANS.—Section 206 of the Agricultural
Act of 1949 (7 U.S.C. 1446g) is amended to read as fol-
lows:
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‘‘SEC. 206. ASSURANCE OF ADEQUATE SUGAR SUPPLY.
‘‘(a) SUGARCANE PROCESSOR LOANS.—For the 1996
through 2002 crops of domestically grown sugarcane, the
Secretary shall make loans available to sugarcane proc-
essors on raw cane sugar processed from such crops. Sub-
ject to subsection (c), loans under this subsection shall be
made at a rate equal to the rate provided under this sec-
tion, as in effect on the day before the date of the enact-
ment of the Agricultural Reconciliation Act of 1995, for
raw cane sugar produced from the 1995 crop of domesti-
cally grown sugarcane.
‘‘(b) SUGAR BEETS.—For the 1996 through 2002
crops of domestically grown sugar beets, the Secretary
shall make loans available to sugar beet processors on re-
fined beet sugar processed from such crops. Subject to
subsection (c), loans under this subsection shall be made
at a rate equal to the rate provided under this section,
as in effect on the day before the date of the enactment
of the Agricultural Reconciliation Act of 1995, for refined
beet sugar produced from the 1995 crop of domestically
grown sugar beets.
‘‘(c) REDUCTION IN LOAN RATES.—
‘‘(1) REDUCTION
REQUIRED.—The Secretary
shall reduce the loan rate specified in subsection (a)
for domestically grown sugarcane and subsection (b)
for domestically grown sugar beets if the Secretary
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determines that negotiated reductions in export sub-
sidies and domestic subsidies provided for sugar of
the European Union and other major sugar growing,
producing, and exporting countries in the aggregate
exceed the commitments made as part of the Agree-
ment on Agriculture.
‘‘(2) EXTENT OF REDUCTION.—The Secretary
shall not reduce the loan rate under subsection (a)
or (b) below a rate that provides an equal measure
of support to that provided by the European Union
and other major sugar growing, producing, and ex-
porting countries, based on an examination of both
domestic and export subsidies subject to reduction in
the Agreement on Agriculture.
‘‘(3) ANNOUNCEMENT
OF
REDUCTION.—The
Secretary shall announce any loan rate reduction to
be made under this subsection as far in advance as
is practicable.
‘‘(4) MAJOR SUGAR COUNTRIES DEFINED.—For
purposes of this subsection, the term ‘major sugar
growing, 
producing, 
and 
exporting 
countries’
means—
‘‘(A) the countries of the European Union;
and
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‘‘(B) the ten foreign countries not covered
by subparagraph (A) that the Secretary deter-
mines produce the greatest amount of sugar.
‘‘(5) 
AGREEMENT
ON
AGRICULTURE
DE-
FINED.—For purposes of this subsection and sub-
section (d), the term ‘Agreement on Agriculture’
means the Agreement on Agriculture referred to in
section 101(d)(2) of the Uruguay Round Agree-
ments Act (19 U.S.C. 3511(d)(2)).
‘‘(d) LOAN TYPE; PROCESSOR ASSURANCES.—
‘‘(1) RECOURSE LOANS.—Subject to paragraph
(2), the Secretary shall carry out this section
through the use of recourse loans.
‘‘(2) SWITCH TO NONRECOURSE LOANS.—
‘‘(A) IN GENERAL.—During any fiscal year
in which the tariff rate quota for imports of
sugar into the United States is set at, or is in-
creased to, a level that exceeds the loan modi-
fication threshold, the Secretary shall carry out
this section by making available nonrecourse
loans. Any recourse loan previously made avail-
able by the Secretary under this section during
such fiscal year shall be modified by the Sec-
retary into a nonrecourse loan.
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‘‘(B) LOAN
MODIFICATION
THRESHOLD
DEFINED.—For the purposes of this subsection,
the term ‘loan modification threshold’ means—
‘‘(i) for fiscal years 1996 and 1997,
1,257,000 short tons raw value; and
‘‘(ii) for fiscal years after fiscal year
1997, 103 percent of the loan modification
threshold for the previous fiscal year.
‘‘(3) PROCESSOR
ASSURANCES.—If the Sec-
retary is required under paragraph (2) to make
nonrecourse loans available during a fiscal year or to
modify recourse loans into nonrecourse loans, the
Secretary shall obtain from each processor that re-
ceives a loan under this section such assurances as
the Secretary considers adequate that the processor
will provide an appropriate minimum payment for
sugar beets and sugarcane delivered by producers
served by the processor. The Secretary may establish
appropriate minimum payments for purposes of this
paragraph.
‘‘(4) ANNOUNCEMENT
OF
THRESHOLD.—As
soon as practicable, but not later than September 1
of each fiscal year, the Secretary shall announce the
loan modification threshold that shall apply under
paragraph (2) for the subsequent fiscal year.
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‘‘(e) LENGTH OF LOANS.—Each loan made under
this section shall be for a term of three months, and may
be extended for additional three-month terms, except
that—
‘‘(1) no loan may have a cumulative term in ex-
cess of nine months or a term that extends beyond
September 30 of the fiscal year in which the loan is
made; and
‘‘(2) a processor may terminate a loan and re-
deem the collateral for the loan at any time by pay-
ment in full of principal, interest, and fees then
owing.
‘‘(f) USE OF COMMODITY CREDIT CORPORATION.—
The Secretary shall use the funds, facilities, and authori-
ties of the Commodity Credit Corporation to carry out this
section.
‘‘(g) MARKETING ASSESSMENT.—
‘‘(1) SUGARCANE.—Effective only for market-
ings of raw cane sugar during fiscal years 1996
through 2003, the first processor of sugarcane shall
remit to the Commodity Credit Corporation a non-
refundable marketing assessment for each pound of
raw cane sugar, processed by the processor from do-
mestically produced sugarcane or sugarcane molas-
ses, that has been marketed. The assessment rate
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per pound is equal to 1.5 percent of the loan rate
for raw cane sugar under this section.
‘‘(2) SUGAR BEETS.—Effective only for market-
ings of beet sugar during fiscal years 1996 through
2003, the first processor of sugar beets shall remit
to the Commodity Credit Corporation a nonrefund-
able marketing assessment for each pound of beet
sugar, processed by the processor from domestically
produced sugar beets or sugar beet molasses, that
has been marketed. The assessment rate per pound
is equal to 1.6083 percent of the loan rate for raw
cane sugar under this section.
‘‘(3) COLLECTION.—
‘‘(A) TIMING.—Marketing assessments re-
quired under this subsection shall be collected
on a monthly basis and shall be remitted to the
Commodity Credit Corporation within 30 days
after the end of each month. Any cane sugar or
beet sugar processed during a fiscal year that
has not been marketed by September 30 of that
year shall be subject to assessment on that
date. The sugar shall not be subject to a second
assessment at the time that it is marketed.
‘‘(B) MANNER.—Subject to subparagraph
(A), marketing assessments shall be collected
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under this subsection in the manner prescribed
by the Secretary and shall be nonrefundable.
‘‘(4) PENALTIES.—If any person fails to remit
the assessment required by this subsection or fails to
comply with such requirements for recordkeeping or
otherwise as are required by the Secretary to carry
out this subsection, the person shall be liable to the
Secretary for a civil penalty up to an amount deter-
mined by multiplying—
‘‘(A) the quantity of cane sugar or beet
sugar involved in the violation; by
‘‘(B) the loan rate in effect at the time of
the violation.
‘‘(5) ENFORCEMENT.—The Secretary may en-
force this subsection in the courts of the United
States.
‘‘(6) DEFINITION OF MARKET.—For purposes
of this subsection, the term ‘market’ means to sell
or otherwise dispose of in commerce in the United
States (including, with respect to any integrated
processor and refiner, the movement of raw cane
sugar into the refining process) and to deliver to a
buyer.
‘‘(h) INFORMATION REPORTING.—
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‘‘(1) DUTY OF PROCESSORS AND REFINERS TO
REPORT.—All sugarcane processors, cane sugar re-
finers, and sugar beet processors shall furnish the
Secretary, on a monthly basis, such information as
the Secretary may require to administer sugar pro-
grams, including the quantity of purchases of sugar-
cane, sugar beets, and sugar, and production, impor-
tation, distribution, and stock levels of sugar.
‘‘(2) DUTY
OF
PRODUCERS
TO
REPORT.—In
order to efficiently and effectively carry out the pro-
gram under this section, the Secretary may require
a producer of sugarcane or sugar beets to report, in
the manner prescribed by the Secretary, the produc-
er’s sugarcane or sugar beet yields and acres planted
to sugarcane or sugar beets, respectively.
‘‘(3) PENALTY.—Any person willfully failing or
refusing to furnish the information, or furnishing
willfully any false information, shall be subject to a
civil penalty of not more than $10,000 for each such
violation.
‘‘(4) MONTHLY REPORTS.—Taking into consid-
eration the information received under paragraph
(1), the Secretary shall publish on a monthly basis
composite data on production, imports, distribution,
and stock levels of sugar.
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‘‘(i) SUGAR ESTIMATES.—
‘‘(1) DOMESTIC REQUIREMENT.—Before the be-
ginning of each fiscal year, the Secretary shall esti-
mate the United States demand for sugar for that
fiscal year, which shall be equal to—
‘‘(A) the quantity of sugar, that will be
consumed in the United States during the fiscal
year (other than sugar imported for the produc-
tion of polyhydric alcohol or to be refined and
reexported in refined form or in sugar contain-
ing products); plus
‘‘(B) the quantity of sugar that would pro-
vide for adequate carryover stocks; minus
‘‘(C) the quantity of sugar that will be
available from carry-in stocks.
‘‘(2) QUARTERLY
REESTIMATES.—The Sec-
retary shall make quarterly reestimates of sugar
consumption, stocks, production, and imports for a
fiscal year no later than the beginning of each of the
second through fourth quarters of the fiscal year.
‘‘(j) REGULATIONS.—The Secretary shall issue such
regulations as the Secretary determines necessary to carry
out this section.’’.
(b) EFFECT ON EXISTING LOANS FOR SUGAR.—Sec-
tion 206 of the Agricultural Act of 1949 (7 U.S.C. 1446g),
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as in effect on the day before the date of the enactment
of this Act, shall continue to apply with respect to the
1991 through 1995 crops of sugarcane and sugar beets.
(c) TERMINATION OF MARKETING QUOTAS AND AL-
LOTMENTS.—
(1) TERMINATION.—Part VII of subtitle B of
title III of the Agricultural Adjustment Act of 1938
(7 U.S.C. 1359aa–1359jj) is repealed.
(2) 
CONFORMING
AMENDMENT.—Section
344(f)(2) of such Act (7 U.S.C. 1344(f)(2)) is
amended by striking ‘‘sugar cane for sugar; sugar
beets for sugar;’’.
SEC. 1303. REPEAL OF OBSOLETE AUTHORITY FOR PRICE
SUPPORT FOR COTTONSEED AND COTTON-
SEED PRODUCTS.
(a) REPEAL.—Section 301(b) of the Disaster Assist-
ance Act of 1988 (7 U.S.C. 1464 note) is amended by
striking paragraph (1).
(b) CONFORMING REPEAL.—Section 420 of the Agri-
cultural Act of 1949 (7 U.S.C. 1432) is repealed.
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Subtitle D—Miscellaneous Program
Changes
SEC. 1401. LIMITATIONS ON ASSISTANCE UNDER EMER-
GENCY LIVESTOCK FEED ASSISTANCE PRO-
GRAM.
Section 609 of the Emergency Livestock Feed Assist-
ance Act of 1988 (7 U.S.C. 1471g) is amended by striking
subsections (c) and (d) and inserting the following new
subsection:
‘‘(c) No person may receive benefits under this title
attributable to lost production of a feed commodity due
to a natural disaster if crop insurance protection or
noninsured crop disaster assistance for the loss of feed
produced on the farm is available to the person under the
Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).’’.
SEC. 1402. CONSERVATION RESERVE PROGRAM.
(a) LIMITATIONS ON ACREAGE ENROLLMENTS.—
(1) LIMITATION.—Section 1231(d) of the Food
Security Act of 1985 (16 U.S.C. 3831(d)) is amend-
ed by striking ‘‘38,000,000 acres’’ and inserting
‘‘36,400,000 acres’’.
(2) PROHIBITION ON 1997 INCREASE.—Section
727 of the Agriculture, Rural Development, Food
and Drug Administration, and Related Agencies Ap-
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propriations Act, 1996, is amended by striking the
proviso relating to enrollment of new acres in 1997.
(b) OPTIONAL CONTRACT TERMINATION BY PRODUC-
ERS.—Section 1235 of such Act (16 U.S.C. 3835), is
amended by adding at the end the following new sub-
section:
‘‘(e) TERMINATION BY OWNER OR OPERATOR.—
‘‘(1) NOTICE OF TERMINATION.—An owner or
operator of land subject to a contract entered into
under this subchapter may terminate the contract by
submitting to the Secretary written notice of the in-
tention of the owner or operator to terminate the
contract.
‘‘(2) EFFECTIVE
DATE.—The contract termi-
nation shall take effect 60 days after the date on
which the owner or operator submits the written no-
tice under paragraph (1).
‘‘(3) PRO-RATED RENTAL PAYMENT.—If a con-
tract entered into under this subchapter is termi-
nated under this subsection before the end of the fis-
cal year for which a rental payment is due, the Sec-
retary shall provide a prorated rental payment cover-
ing the portion of the fiscal year during which the
contract was in effect.
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‘‘(4) RENEWED
ENROLLMENT.—The termi-
nation of a contract entered into under this sub-
chapter shall not affect the ability of the owner or
operator who requested such termination to submit
a subsequent bid to enroll the land that was subject
to the contract into the conservation reserve.
‘‘(5) CONSERVATION REQUIREMENTS.—If land
that was subject to a contract is returned to produc-
tion of an agricultural commodity, the Secretary
may impose conservation requirements under sub-
title A on the use of the land that are similar to the
requirements imposed on other lands subject to such
subtitle, but in no case shall such requirements be
more onerous that the requirements imposed on
other lands.’’.
(c) 
LIMITATION
ON
RENTAL
RATES.—Section
1234(c) of such Act (16 U.S.C. 3834) is amended by add-
ing at the end the following new paragraph:
‘‘(5) In the case of the extension of a contract, or
a new contract covering land which was previously enrolled
in the conservation reserve, annual rental payments under
the new or extended contract may not exceed 75 percent
of the annual rental payment under the previous con-
tract.’’.
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SEC. 1403. CROP INSURANCE.
(a) CONVERSION OF CATASTROPHIC RISK PROTEC-
TION PROGRAM TO VOLUNTARY PROGRAM.—Subsection
(b)(7) of section 508 of the Federal Crop Insurance Act
(7 U.S.C. 1508) is amended—
(1) by redesignating subparagraph (B) as sub-
paragraph (C); and
(2) by inserting after subparagraph (A) the fol-
lowing new subparagraph:
‘‘(B) EXCEPTION TO MANDATORY PARTICI-
PATION REQUIREMENT.—Notwithstanding sub-
paragraph (A), a producer may decline to ob-
tain catastrophic risk protection beginning with
spring-planted 1996 crops and in any subse-
quent crop year, yet remain eligible for any
market transition contract or marketing assist-
ance loan, the conservation reserve program, or
any benefit described in section 371 of the Con-
solidated Farm and Rural Development Act, if
the producer agrees in writing to waive any eli-
gibility for emergency crop loss assistance in
connection with losses to any crop for which the
producer declines to obtain catastrophic risk
protection.’’.
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(b) DELIVERY OF VOLUNTARY CATASTROPHIC PRO-
TECTION.—Subsection (b)(4) of such section is amended
by adding at the end the following new subparagraphs:
‘‘(C) ELIMINATION OF SECRETARIAL OP-
TION.—For crop years beginning after the im-
plementation of the exception under paragraph
(7)(B) to the mandatory participation require-
ment, the option for delivery of catastrophic
risk protection provided in subparagraph (A)(ii)
shall not be available to the Secretary. All risk
protection policies written by the Department
prior to that date shall be transferred, including
all fees collected for the crop year in which the
private sector will assume the policies, in an or-
derly manner to the private sector for perform-
ance of all service and loss adjustment func-
tions.
‘‘(D) GUARANTEE
OF
PRIVATE
SECTOR
SERVICE.—In full consultation and cooperation
with approved insurance providers, the Corpora-
tion shall develop a plan to ensure that each
producer of an insured crop has the opportunity
to be serviced by an approved insurance pro-
vider if insurance is available for that crop in
that county. Not later than May 1, 1996, the
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Corporation shall submit to the Committee on
Agriculture of the House of Representatives
and the Committee on Agriculture, Nutrition,
and Forestry of the Senate the plan in the form
it is to be implemented by the Secretary.’’.
(c) ESTABLISHMENT OF THE OFFICE OF RISK MAN-
AGEMENT.—
(1) ESTABLISHMENT.—The Department of Ag-
riculture Reorganization Act of 1994 is amended by
inserting after section 226 (7 U.S.C. 6932) the fol-
lowing new section:
‘‘SEC. 226A. OFFICE OF RISK MANAGEMENT.
‘‘(a) ESTABLISHMENT.—Subject to subsection (e),
the Secretary shall establish and maintain in the Depart-
ment an independent Office of Risk Management.
‘‘(b) FUNCTIONS OF THE OFFICE OF RISK MANAGE-
MENT.—The Office of Risk Management shall have juris-
diction over the following functions:
‘‘(1) Supervision of the Federal Crop Insurance
Corporation.
‘‘(2) Administration and oversight of all as-
pects, including delivery through local offices of the
Department, of all programs authorized under the
Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).
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‘‘(3) Any pilot or other programs involving reve-
nue insurance, risk management savings accounts,
or the use of the futures market to manage risk and
support farm income that may be established under
the Federal Crop Insurance Act or other law.
‘‘(4) Such other functions as the Secretary con-
siders appropriate.
‘‘(c) ADMINISTRATOR.—
‘‘(1) The Office of Risk Management shall be
headed by an Administrator who shall be appointed
by the Secretary.
‘‘(2) The Administrator of the Office of Risk
Management shall also serve as Manager of the Fed-
eral Crop Insurance Corporation.
‘‘(d) RESOURCES.—
‘‘(1) 
FUNCTIONAL
COORDINATION.—Certain
functions of the Office of Risk Management, such as
human resources, public affairs, and legislative af-
fairs, may be provided by a consolidation of such
functions under the Under Secretary of Agriculture
for Farm and Foreign Agricultural Services.
‘‘(2) MINIMUM
PROVISIONS.—Notwithstanding
paragraph (1) or any other provision of law or order
of the Secretary, the Secretary shall provide the Of-
fice of Risk Management with human and capital
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resources sufficient for the Office to carry out its
functions in a timely and efficient manner.
‘‘(3) FISCAL
YEAR
1996
FUNDING.—Not less
than $88,500,000 of the appropriation provided for
the salaries and expenses of the Consolidated Farm
Services Agency in the Agricultural, Rural Develop-
ment, Food and Drug Administration, and Related
Agencies Appropriations Act, 1996 shall be provided
to the Office of Risk Management for the salaries
and expenses of the Office.’’.
(2) 
CONFORMING
AMENDMENT.—Section
226(b) of such Act (7 U.S.C. 6932(b)) is amended
by striking paragraph (2).
(d) RECONFIGURATION OF BOARD OF DIRECTORS.—
Section 505 of the Federal Crop Insurance Act (7 U.S.C.
1505) is amended to read as follows:
‘‘SEC. 505. BOARD OF DIRECTORS.
‘‘(a) AUTHORITY.—The management of the Corpora-
tion shall be vested in a Board of Directors subject to the
general supervision of the Secretary.
‘‘(b) MEMBERSHIP.—
‘‘(1) IN GENERAL.—The Board shall consist of
the Manager of the Corporation, the Under Sec-
retary of Agriculture for Farm and Foreign Agricul-
tural Services, one person who is an officer or em-
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ployee of an approved insurance provider, one person
who is a licensed crop insurance agent, one person
experienced in the reinsurance business who is not
otherwise employed by the Federal Government, and
four active producers who are not otherwise em-
ployed by the Federal Government. The Secretary
shall not be a member of the Board.
‘‘(2) PRODUCER MEMBERS.—In appointing the
four active producers who are not otherwise em-
ployed by the Federal Government, the Secretary
shall ensure that three such members are policy-
holders and are from different geographic areas of
the United States, in order that diverse agricultural
interests in the United States are at all times rep-
resented on the Board. The Secretary shall ensure
that the fourth active producer, who may also be a
policyholder, receives a significant portion of crop in-
come from crops covered by the noninsured crop dis-
aster assistance program established under section
519.
‘‘(c) APPOINTMENT.—
‘‘(1) MANAGER.—The Administrator of the Of-
fice of Risk Management appointed by the Secretary
under section 226A(c) of the Department of Agri-
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culture Reorganization Act of 1994 shall serve as
Manager of the Corporation.
‘‘(2) TERMS OF OTHER MEMBERS.—Other than
the Manager of the Corporation and the Under Sec-
retary of Agriculture for Farm and Foreign Agricul-
tural Services, the members of the Board shall be
appointed by the Secretary for a term of three years.
However, in the initial appointment of such mem-
bers, the Secretary shall appoint two members for
one year, two members for two years, and two mem-
bers for three years in order to provide greater con-
tinuity to the Board.
‘‘(3) SUCCESSION.—A member of the Board ap-
pointed under paragraph (2) may serve after the ex-
piration of the term of office of such member until
the successor for such member has taken office.
‘‘(d) QUORUM.—Five of the members in office shall
constitute a quorum for the transaction of the business
of the Board.
‘‘(e) IMPAIRMENT OF POWERS.—The powers of the
Board to execute the functions of the Corporation shall
be impaired at any time there are not six members of the
Board in office. Any impairment of the powers of the
Board shall also serve to impair the powers of the Man-
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ager to act under any delegation of power provided under
subsection (g).
‘‘(f) COMPENSATION.—
‘‘(1) EMPLOYEES OF THE DEPARTMENT.—The
members of the Board who are employed in the De-
partment shall receive no additional compensation
for their services as members, but may be allowed
necessary traveling and subsistence expenses when
engaged in business of the Corporation outside of
the District of Columbia.
‘‘(2) NONEMPLOYEES OF THE FEDERAL GOV-
ERNMENT.—The members of the Board who are not
employed by the Federal Government shall be paid
such compensation for their services as members as
the Secretary shall determine, but such compensa-
tion shall not exceed the daily equivalent of the rate
prescribed for positions a level V of the Executive
Schedule under section 5316 of title 5, United
States Code, when actually employed. Such members
may also receive actual necessary traveling and sub-
sistence expenses, or a per diem allowance in lieu of
subsistence expenses, as authorized by section 5703
of such title for persons in Government service em-
ployed intermittently, when on the business of the
Corporation away from their homes or regular places
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of business. Any such compensation shall be paid
from the insurance fund established under section
516(c).
‘‘(g) CHIEF EXECUTIVE OFFICER.—The Manager of
the Corporation shall be its chief executive officer, with
such power and authority as may be conferred by the
Board.’’.
SEC. 1404. REPEAL OF FARMER OWNED RESERVE PRO-
GRAM.
(a) REPEAL.—Section 110 of the Agricultural Act of
1949 (7 U.S.C. 1445e) is repealed.
(b) EFFECT OF REPEAL ON EXISTING LOANS.—The
repeal of section 110 of the Agricultural Act of 1949 by
subsection (a) shall not affect the validity or terms and
conditions of any extended price support loan provided
under such section before the date of the enactment of
this Act.
SEC. 1405. REDUCTION IN FUNDING LEVELS FOR EXPORT
ENHANCEMENT PROGRAM.
Section 301(e) of the Agricultural Trade Act of 1978
(7 U.S.C. 5651(e)) is amended by striking paragraph (1)
and inserting the following new paragraph:
‘‘(1) IN GENERAL.—To carry out the program
established under this section, the Commodity Credit
Corporation shall make available—
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‘‘(A) for each of the fiscal years 1991
through 1995, not more than $500,000,000 of
the funds or commodities of the Commodity
Credit Corporation;
‘‘(B) for each of the fiscal years 1996 and
1997, not more than $400,000,000 of the funds
or commodities of the Commodity Credit Cor-
poration;
‘‘(C) for fiscal year 1998, not more than
$500,000,000 of the funds or commodities of
the Commodity Credit Corporation;
‘‘(D) for fiscal year 1999, not more than
$550,000,000 of the funds or commodities of
the Commodity Credit Corporation;
‘‘(E) for fiscal year 2000, not more than
$579,000,000 of the funds or commodities of
the Commodity Credit Corporation; and
‘‘(F) for each of the fiscal years 2001 and
2002, not more than $478,000,000 of the funds
or commodities of the Commodity Credit Cor-
poration.’’.
SEC. 1406. BUSINESS INTERRUPTION INSURANCE PRO-
GRAM.
(a) ESTABLISHMENT OF PROGRAM.—Not later than
December 31, 1996, the Secretary of Agriculture shall im-
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plement a program (to be known as the ‘‘Business Inter-
ruption Insurance Program’’), under which the producer
of a program crop could elect to obtain revenue insurance
coverage to ensure that the producer receives an indemnity
payment if the producer suffers a loss of revenue. The na-
ture and extent of the program and the manner of deter-
mining the amount of an indemnity payment shall be es-
tablished by the Secretary.
(b) REPORT ON PROGRESS AND PROPOSED EXPAN-
SION.—Not later than January 1, 1998, the Secretary
shall submit to the Commission on the 21st Century Pro-
duction Agriculture the data and results of the program
through October 1, 1997. In addition, the Secretary shall
submit information and recommendations to the Commis-
sion with respect to the program that will serve as the
basis for the Secretary to offer revenue insurance to agri-
cultural producers, at one or more levels of coverage,
that—
(1) is in addition to, or in lieu of, catastrophic
and higher levels of crop insurance;
(2) is offered through reinsurance arrange-
ments with private insurance companies;
(3) is actuarially sound; and
(4) requires the payment of premiums and ad-
ministrative fees by participating producers.
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(c) PROGRAM CROP DEFINED.—For purposes of this
section, the term ‘‘program crop’’ means a crop of wheat,
corn, grain sorghums, oats, barley, upland cotton, or rice.
Subtitle E—Commission on 21st
Century Production Agriculture
SEC. 1501. ESTABLISHMENT.
There is hereby established a commission to be known
as the ‘‘Commission on 21st Century Production Agri-
culture’’ (hereinafter in this title referred to as the ‘‘Com-
mission’’).
SEC. 1502. COMPOSITION.
(a) MEMBERSHIP AND APPOINTMENT.—The Com-
mission shall be composed of 11 members, appointed as
follows:
(1) Three members shall be appointed by the
President.
(2) Four members shall be appointed by the
Chairman of the Committee on Agriculture of the
House of Representatives in consultation with the
ranking minority member of the Committee.
(3) Four members shall be appointed by the
Chairman of the Committee on Agriculture, Nutri-
tion, and Forestry of the Senate in consultation with
the ranking minority member of the Committee.
100
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(b) QUALIFICATIONS.—At least one of the members
appointed under each of the paragraphs (1), (2), and (3)
of subsection (a) shall be an individual who is primarily
involved in production agriculture. All other members of
the Commission shall be appointed from among individ-
uals having knowledge and experience in agricultural pro-
duction, marketing, finance, or trade.
(c) TERM OF MEMBERS; VACANCIES.—Members of
the Commission shall be appointed for the life of the Com-
mission. A vacancy on the Commission shall not affect its
powers, but shall be filled in the same manner as the origi-
nal appointment was made.
(d) TIME FOR APPOINTMENT; FIRST MEETING.—
The members of the Commission shall be appointed not
later than October 1, 1997. The Commission shall convene
its first meeting to carry out its duties under this title
30 days after six members of the Commission have been
appointed.
(e) CHAIRMAN.—The chairman of the Commission
shall be designated jointly by the Chairman of the Com-
mittee on Agriculture of the House of Representatives and
the Chairman of the Committee on Agriculture, Nutrition,
and Forestry of the Senate from among the members of
the Commission.
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SEC. 1503. COMPREHENSIVE REVIEW OF PAST AND FUTURE
OF PRODUCTION AGRICULTURE.
(a) INITIAL REVIEW.—The Commission shall conduct
a comprehensive review of changes in the condition of pro-
duction agriculture in the United States since the date of
the enactment of this Act and the extent to which such
changes are the result of the amendments made by this
Act. The review shall include the following:
(1) An assessment of the initial success of mar-
ket transition contracts under section 102 of the Ag-
ricultural Act of 1949 in supporting the economic vi-
ability of farming in the United States.
(2) An assessment of the food security situation
in the United States in the areas of trade, consumer
prices, international competitiveness of United
States production agriculture, food supplies, and hu-
manitarian relief.
(3) An assessment of the changes in farmland
values and agricultural producer incomes since the
date of the enactment of this Act.
(4) An assessment of the extent to which regu-
latory relief for agricultural producers has been en-
acted and implemented, including the application of
cost/benefit principles in the issuance of agricultural
regulations.
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(5) An assessment of the extent to which tax
relief for agricultural producers has been enacted in
the form of capital gains tax reductions, estate tax
exemptions, and mechanisms to average tax loads
over high and low income years.
(6) An assessment of the effect of any Govern-
ment interference in agricultural export markets,
such as the imposition of trade embargoes, and the
degree of implementation and success of inter-
national trade agreements.
(7) An assessment of the likely affect of the
sale, lease, or transfer of farm poundage quota for
peanuts across State lines.
(b) SUBSEQUENT REVIEW.—The Commission shall
conduct a comprehensive review of the future of produc-
tion agriculture in the United States and the appropriate
role of the Federal Government in support of production
agriculture. The review shall include the following:
(1) An assessment of changes in the condition
of production agriculture in the United States since
the initial review conducted under subsection (a).
(2) Identification of the appropriate future rela-
tionship of the Federal Government with production
agriculture after 2002.
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(3) An assessment of the personnel and infra-
structure requirements of the Department of Agri-
culture necessary to support the future relationship
of the Federal Government with production agri-
culture.
(c) RECOMMENDATIONS.—In carrying out the subse-
quent review under subsection (b), the Commission shall
develop specific recommendations for legislation to achieve
the appropriate future relationship of the Federal Govern-
ment with production agriculture identified under sub-
section (a)(2).
SEC. 1504. REPORTS.
(a) REPORT ON INITIAL REVIEW.—Not later than
June 1, 1998, the Commission shall submit to the Presi-
dent, the Committee on Agriculture of the House of Rep-
resentatives, and the Committee on Agriculture, Nutrition,
and Forestry of the Senate a report containing the results
of the initial review conducted under section 1503(a).
(b) REPORT ON SUBSEQUENT REVIEW.—Not later
than January 1, 2001, the Commission shall submit to
the President and the congressional committees specified
in subsection (a) a report containing the results of the
subsequent review conducted under section 1503(b).
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SEC. 1505. POWERS.
(a) HEARINGS.—The Commission may, for the pur-
pose of carrying out this title, conduct such hearings, sit
and act at such times, take such testimony, and receive
such evidence, as the Commission considers appropriate.
(b) ASSISTANCE
FROM
OTHER
AGENCIES.—The
Commission may secure directly from any department or
agency of the Federal Government such information as
may be necessary for the Commission to carry out its du-
ties under this title. Upon request of the chairman of the
Commission, the head of the department or agency shall,
to the extent permitted by law, furnish such information
to the Commission.
(c) MAIL.—The Commission may use the United
States mails in the same manner and under the same con-
ditions as the departments and agencies of the Federal
Government.
(d) ASSISTANCE FROM SECRETARY.—The Secretary
of Agriculture shall provide to the Commission appropriate
office space and such reasonable administrative and sup-
port services as the Commission may request.
SEC. 1506. COMMISSION PROCEDURES.
(a) MEETINGS.—The Commission shall meet on a
regular basis (as determined by the chairman) and at the
call of the chairman or a majority of its members.
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(b) QUORUM.—A majority of the members of the
Commission shall constitute a quorum for the transaction
of business.
SEC. 1507. PERSONNEL MATTERS.
(a) COMPENSATION.—Each member of the Commis-
sion shall serve without compensation, but shall be allowed
travel expenses including per diem in lieu of subsistence,
as authorized by section 5703 of title 5, United States
Code, when engaged in the performance of Commission
duties.
(b) STAFF.—The Commission shall appoint a staff
director, who shall be paid at a rate not to exceed the
maximum rate of basic pay under section 5376 of title
5, United States Code, and such professional and clerical
personnel as may be reasonable and necessary to enable
the Commission to carry out its duties under this title
without regard to the provisions of title 5, United States
Code, governing appointments in the competitive service,
and without regard to the provisions of chapter 51 and
subchapter III of chapter 53 of such title, or any other
provision of law, relating to the number, classification, and
General Schedule rates. No employee appointed under this
subsection (other than the staff director) may be com-
pensated at a rate to exceed the maximum rate applicable
to level GS–15 of the General Schedule.
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(c) DETAILED PERSONNEL.—Upon request of the
chairman of the Commission, the head of any department
or agency of the Federal Government is authorized to de-
tail, without reimbursement, any personnel of such depart-
ment or agency to the Commission to assist the Commis-
sion in carrying out its duties under this section. The de-
tail of any such personnel may not result in the interrup-
tion or loss of civil service status or privilege of such per-
sonnel.
SEC. 1508. TERMINATION OF COMMISSION.
The Commission shall terminate upon submission of
the final report required by section 1504.
TITLE II—COMMITTEE ON BANK-
ING AND FINANCIAL SERV-
ICES
SEC. 2001. TABLE OF CONTENTS.
The table of contents for this title is as follows:
Subtitle A—Housing Provisions
Sec. 2101. Termination of RTC and FDIC affordable housing programs.
Sec. 2102. Foreclosure avoidance and borrower assistance.
Sec. 2103. Reform of HUD-owned multifamily property disposition program.
Sec. 2104. Recapture of rural housing loan subsidies by Rural Housing and
Community Development Service.
Sec. 2105. Reduction of section 8 annual adjustment factors for units without
tenant turnover.
Subtitle B—Thrift Charter Conversion
Sec. 2200. Short title.
CHAPTER 1—BANK INSURANCE FUND AND SAVINGS ASSOCIATION
INSURANCE FUND
Sec. 2201. Special assessment.
Sec. 2202. Assessments on insured depository institutions.
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Sec. 2203. Merger of Bank Insurance Fund and Savings Association Insurance
Fund after recapitalization of SAIF.
Sec. 2204. Refund of amounts in deposit insurance fund in excess of designated
reserve amount.
Sec. 2205. Assessments authorized only if needed to maintain the reserve ratio
of a deposit insurance fund.
CHAPTER 2—STATUS OF BANKS AND SAVINGS ASSOCIATIONS
Sec. 2221. Termination of Federal savings associations; treatment of State sav-
ings associations as banks for purposes of Federal banking law.
Sec. 2222. Treatment of certain activities and affiliations of bank holding com-
panies resulting from this Act.
Sec. 2223. Transition provisions for activities of savings associations which con-
vert into or become treated as banks.
Sec. 2224. Registration of bank holding companies resulting from conversions
of savings associations to banks or treatment of savings asso-
ciations as banks.
Sec. 2225. Additional transition provisions and special rules.
Sec. 2226. Technical and conforming amendments.
Sec. 2227. References to savings associations and State banks in Federal law.
Sec. 2228. Repeal of Home Owners’ Loan Act.
Sec. 2229. Effective date; definitions.
CHAPTER 3—TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY
Sec. 2241. Office of Thrift Supervision abolished.
Sec. 2242. Determination of transferred functions and employees.
Sec. 2243. Savings provisions.
Sec. 2244. References in Federal law to Director of the Office of Thrift Super-
vision.
Sec. 2245. Reconfiguration of board of directors of FDIC as a result of removal
of Director of the Office of Thrift Supervision.
Subtitle C—Community Reinvestment Act Amendments
Sec. 2301. Expression of congressional intent.
Sec. 2302. Community Reinvestment Act exemption.
Sec. 2303. Self-certification of CRA compliance.
Sec. 2304. Community input and conclusive rating.
Sec. 2305. Special purpose financial institutions.
Sec. 2306. Increased incentives for lending to low- and moderate-income com-
munities.
Sec. 2307. Prohibition on additional reporting under CRA.
Sec. 2308. Technical amendment.
Sec. 2309. Duplicative reporting.
Sec. 2310. CRA congressional oversight.
Sec. 2311. Consultation among examiners.
Sec. 2312. Limitation on regulations.
Subtitle D—Phase-Down of Oversight Board
Sec. 2401. Termination of authority of Oversight Board to employ staff.
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Subtitle A—Housing Provisions
SEC. 2101. TERMINATION OF RTC AND FDIC AFFORDABLE
HOUSING PROGRAMS.
(a) REPEAL OF UNIFIED PROGRAM AND TRANSFER
OF RTC WINDUP AUTHORITY TO HUD.—Section 21A(c)
of the Federal Home Loan Bank Act (12 U.S.C.
1441a(c)) is amended by striking paragraph (17) and in-
serting the following new paragraph:
‘‘(17) TRANSFER
OF
AUTHORITY.—The Sec-
retary shall assume, not later than December 31,
1995, and thereafter shall carry out, any remaining
authority and responsibilities of the Corporation to
recapture excess proceeds from resale of properties
and to monitor and enforce low-income occupancy
requirements or rent limitations under this sub-
section and shall assume any direct or contingent li-
ability of the Corporation to carry out such author-
ity and responsibilities.’’.
(b) TERMINATION OF RTC AFFORDABLE HOUSING
PROGRAM.—Section 21A(c) of the Federal Home Loan
Bank Act (12 U.S.C. 1441a(c)) is amended by adding at
the end the following new paragraph:
‘‘(18) TERMINATION.—
‘‘(A) IN GENERAL.—On and after the date
of the enactment of the Seven-Year Balanced
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Budget Reconciliation Act of 1995, the provi-
sions of this subsection (other than paragraph
(17)) shall not apply with respect to any eligible
residential property or eligible condominium
property.
‘‘(B) SAVINGS PROVISION.—Notwithstand-
ing subparagraph (A), the provisions of this
subsection shall continue to apply on and after
such date of enactment to any eligible residen-
tial property or eligible condominium property
that—
‘‘(i) has been sold or otherwise dis-
posed of by the Corporation before such
date of enactment; or
‘‘(ii) is subject to a contract of sale or
other disposition entered into before such
date of enactment.’’.
(c) TERMINATION OF AFFORDABLE HOUSING ADVI-
SORY BOARD.—Section 14(b)(9) of the Resolution Trust
Corporation Completion Act (12 U.S.C. 1831q note) is
amended by striking ‘‘September 30, 1998’’ and inserting
‘‘September 30, 1995’’.
(d) REPEAL OF FDIC PROGRAM AND TRANSFER OF
WINDUP AUTHORITY TO HUD.—
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(1) REPEAL.—Section 40 of the Federal De-
posit Insurance Act (12 U.S.C. 1831q) is hereby re-
pealed.
(2) TRANSFER OF WINDUP AUTHORITY.—Not-
withstanding paragraph (1)—
(A) effective December 31, 1995, the Sec-
retary shall carry out any remaining authority
and responsibilities of the Federal Deposit In-
surance Corporation under section 40 of the
Federal Deposit Insurance Act to recapture ex-
cess proceeds from resale of properties and to
monitor and enforce low-income occupancy re-
quirements or rent limitations under such sec-
tion and shall assume any direct or contingent
liability of the Corporation to carry out such
authority and responsibilities; and
(B) the Federal Deposit Insurance Cor-
poration shall consummate any sales of prop-
erty under section 40 of such Act that were
pending under contracts of sale on September
30, 1995.
(e) FDIC DISPOSITION OF ASSETS AS CONSERVATOR
OR RECEIVER.—Section 11(d)(13)(E) of the Federal De-
posit Insurance Act (12 U.S.C. 1821(d)(13)(E)) is amend-
ed—
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(1) in clause (iii), by inserting ‘‘and’’ after the
semicolon;
(2) in clause (iv), by striking ‘‘; and’’ and in-
serting a period; and
(3) by striking clause (v).
(f) 
DISPOSITION
OF
FDIC 
ASSETS.—Section
13(d)(3)(D) of the Federal Deposit Insurance Act (12
U.S.C. 1823(d)(3)(D)) is amended—
(1) in clause (iii), by inserting ‘‘and’’ after the
semicolon;
(2) in clause (iv), by striking ‘‘; and’’ and in-
serting a period; and
(3) by striking clause (v).
SEC. 2102. FORECLOSURE AVOIDANCE AND BORROWER AS-
SISTANCE.
(a) FORECLOSURE AVOIDANCE.—The last sentence
of section 204(a) of the National Housing Act (12 U.S.C.
1710(a)) is amended by inserting before the period the
following: ‘‘: And provided further, That the Secretary may
pay insurance benefits to the mortgagee to recompense the
mortgagee for its actions to provide an alternative to fore-
closure of a mortgage that is in default, which actions may
include such actions as special forbearance, loan modifica-
tion, and deeds in lieu of foreclosure, all upon such terms
and conditions as the mortgagee shall determine in the
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mortgagee’s sole discretion within guidelines provided by
the Secretary, but which may not include assignment of
a mortgage to the Secretary: And provided further, That
for purposes of the preceding proviso, no action authorized
by the Secretary and no action taken, nor any failure to
act, by the Secretary or the mortgagee shall be subject
to judicial review’’.
(b) AUTHORITY
TO ASSIST MORTGAGORS
IN DE-
FAULT.—Section 230 of the National Housing Act (12
U.S.C. 1715u) is amended to read as follows:
‘‘AUTHORITY TO ASSIST MORTGAGORS IN DEFAULT
‘‘SEC. 230. (a) PAYMENT OF PARTIAL CLAIM.—The
Secretary may establish a program for payment of a par-
tial insurance claim to a mortgagee that agrees to apply
the claim amount to payment of a mortgage on a 1- to
4-family residence that is in default. Any such payment
under such program to the mortgagee shall be made in
the Secretary’s sole discretion and on terms and conditions
acceptable to the Secretary, except that—
‘‘(1) the amount of the payment shall be in an
amount determined by the Secretary, which shall not
exceed an amount equivalent to 12 monthly mort-
gage payments and any costs related to the default
that are approved by the Secretary; and
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‘‘(2) the mortgagor shall agree to repay the
amount of the insurance claim to the Secretary upon
terms and conditions acceptable to the Secretary.
The Secretary may pay the mortgagee, from the appro-
priate insurance fund, in connection with any activities
that the mortgagee is required to undertake concerning
repayment by the mortgagor of the amount owed to the
Secretary.
‘‘(b) ASSIGNMENT.—
‘‘(1) PROGRAM
AUTHORITY.—The Secretary
may establish a program for assignment to the Sec-
retary, upon request of the mortgagee, of a mort-
gage on a 1- to 4-family residence insured under this
Act.
‘‘(2) PROGRAM
REQUIREMENTS.—The Sec-
retary may accept assignment of a mortgage under
a program under this subsection only if—
‘‘(A) the mortgage was in default;
‘‘(B) the mortgagee has modified the mort-
gage to cure the default and provide for mort-
gage payments within the reasonable ability of
the mortgagor to pay at interest rates not ex-
ceeding current market interest rates; and
‘‘(C) the Secretary arranges for servicing
of the assigned mortgage by a mortgagee
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(which may include the assigning mortgagee)
through procedures that the Secretary has de-
termined to be in the best interests of the ap-
propriate insurance fund.
‘‘(3) PAYMENT
OF
INSURANCE
BENEFITS.—
Upon accepting assignment of a mortgage under the
program under this subsection, the Secretary may
pay insurance benefits to the mortgagee from the
appropriate insurance fund in an amount that the
Secretary determines to be appropriate, but which
may not exceed the amount necessary to compensate
the mortgagee for the assignment and any losses
and expenses resulting from the mortgage modifica-
tion.
‘‘(c) PROHIBITION OF JUDICIAL REVIEW.—No deci-
sion by the Secretary to exercise or forego exercising any
authority under this section shall be subject to judicial re-
view.’’.
(c) SAVINGS PROVISION.—Any mortgage for which
the mortgagor has applied to the Secretary of Housing
and Urban Development, before the date of the enactment
of this Act, for assignment pursuant to section 230(b) of
the National Housing Act shall continue to be governed
by the provisions of such section, as in effect immediately
before such date of enactment.
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(d) APPLICABILITY OF OTHER LAWS.—No provision
of the National Housing Act or any other law shall be
construed to require the Secretary of Housing and Urban
Development to provide an alternative to foreclosure for
mortgagees with mortgages on 1- to 4-family residences
insured by the Secretary under the National Housing Act,
or to accept assignments of such mortgages.
SEC. 2103. REFORM OF HUD-OWNED MULTIFAMILY PROP-
ERTY DISPOSITION PROGRAM.
(a) IN GENERAL.—Effective October 1, 1995, section
203 of the Housing and Community Development Amend-
ments of 1978 (12 U.S.C. 1701z–11) is amended to read
as follows:
‘‘SEC. 203. MANAGEMENT AND DISPOSITION OF HUD-
OWNED MULTIFAMILY HOUSING PROJECTS.
‘‘(a) IN GENERAL.—The Secretary of Housing and
Urban Development may manage and dispose of (1) multi-
family housing projects that are owned by the Secretary
or that are subject to mortgages held by the Secretary,
and (2) mortgages on multifamily housing projects that
are held by the Secretary, without regard to any other pro-
vision of law.
‘‘(b) AUTHORITY TO DELEGATE.—The Secretary of
Housing and Urban Development may delegate to one or
more entities the authority to carry out some or all of the
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functions and responsibilities of the Secretary in connec-
tion with the foreclosure of mortgages on multifamily
housing projects held by the Secretary.
‘‘(c) DEFINITION.—For purposes of this section, the
term ‘multifamily housing project’ means any multifamily
rental housing project which is, or prior to acquisition by
the Secretary was, assisted or insured under the National
Housing Act, or was subject to a loan under section 202
of the Housing Act of 1959.’’.
(b) CONFORMING AMENDMENTS.—
(1) NONDISCRIMINATION AGAINST CERTIFICATE
AND
VOUCHER
HOLDERS.—Section 183(c) of the
Housing and Community Development Act of 1987
(42 U.S.C. 1437f note) is amended by striking ‘‘sec-
tion 203(i)(2) of the Housing and Community De-
velopment Amendments of 1978, as amended by sec-
tion 181(h) of this Act’’ and inserting ‘‘section
203(b) of the Housing and Community Development
Amendments of 1978 (as in effect before October 1,
1995)’’.
(2) LIHPRH ACT OF 1990.—Section 212(c) of
the Low-Income Housing Preservation and Resident
Homeownership Act of 1990 (12 U.S.C. 4102(c)) is
amended by striking the last sentence.
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(3) HOPE
HOMEOWNERSHIP
PROGRAM.—Sec-
tion 427 of the Cranston-Gonzalez National Afford-
able Housing Act (42 U.S.C. 12877) is amended by
striking ‘‘subject to—’’ and all that follows and in-
serting ‘‘subject to the Low-Income Housing Preser-
vation and Resident Homeownership Act of 1990.’’.
(4) FHA MULTIFAMILY
HOUSING
MORTGAGE
INSURANCE.—Section 207(k) of the National Hous-
ing Act (12 U.S.C. 1713(k)) is amended by striking
the third sentence.
(5) MULTIFAMILY
MORTGAGE
FORECLOSURE
ACT OF 1981.—Section 367(b)(2) of the Multifamily
Mortgage 
Foreclosure 
Act 
of 
1981 
(12
U.S.C.3706(b)(2)) is amended—
(A) by striking subparagraph (B); and
(B) by striking ‘‘(A)’’.
(6) PREVENTING MORTGAGE DEFAULTS ON IN-
SURED
MULTIFAMILY
PROJECTS.—Section
103(h)(2)(B) of the Multifamily Housing Property
Disposition Reform Act of 1994 (12 U.S.C. 1715z–
1a note) is amended by inserting ‘‘(as in effect be-
fore October 1, 1995)’’ after ‘‘1978’’.
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SEC. 2104. RECAPTURE OF RURAL HOUSING LOAN SUB-
SIDIES BY RURAL HOUSING AND COMMUNITY
DEVELOPMENT SERVICE.
The first sentence of section 521(a)(1)(D)(i) of the
Housing Act of 1949 (42 U.S.C. 1490a(a)(1)(D)(i)) is
amended by inserting ‘‘upon the repayment of any loan
made under this title or’’ after ‘‘assistance rendered’’.
SEC. 2105. REDUCTION OF SECTION 8 ANNUAL ADJUST-
MENT FACTORS FOR UNITS WITHOUT TEN-
ANT TURNOVER.
Paragraph (2)(A) of section 8(c) of the United States
Housing Act of 1937 (42 U.S.C. 1437f(c)(2)(A)) is
amended by striking the last sentence.
Subtitle B—Thrift Charter
Conversion
SEC. 2200. SHORT TITLE.
This subtitle may be cited as the ‘‘Thrift Charter
Conversion Act of 1995’’.
CHAPTER 1—BANK INSURANCE FUND AND
SAVINGS ASSOCIATION INSURANCE FUND
SEC. 2201. SPECIAL ASSESSMENT.
Section 7(b)(6) of the Federal Deposit Insurance Act
(12 U.S.C. 1817(b)(6)) is amended—
(1) by redesignating clauses (i), (ii), and (iii) of
subparagraph (A) as subclauses (I), (II), and (III),
respectively;
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(2) by redesignating subparagraphs (A) and
(B) as clauses (i) and (ii), respectively;
(3) by moving the left margin of such clauses
and subclauses (as so redesignated) 2 ems to the
right;
(4) by striking ‘‘SPECIAL
ASSESSMENTS.—In
addition to’’ and inserting ‘‘SPECIAL
ASSESS-
MENTS.—
‘‘(A) IN GENERAL.—In addition to’’; and
(5) by adding at the end the following new sub-
paragraphs:
‘‘(B) SINGLE
ADDITIONAL
SPECIAL
AS-
SESSMENT
WITH
RESPECT
TO
CERTAIN
AC-
COUNTS.—
‘‘(i) IN
GENERAL.—The Corporation
shall impose, on the basis of such factors
as the Board of Directors considers to be
appropriate, a single special assessment on
the institutions described in the following
subclauses (other than institutions exempt
under subparagraph (C)):
‘‘(I) Each Savings Association
Insurance Fund member (including
any Savings Association Insurance
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Fund member referred to in section
5(d)(2)(G)).
‘‘(II) Each Bank Insurance Fund
member which has deposits which are
treated, under section 5(d)(3), as de-
posits which are insured by the Sav-
ings Association Insurance Fund.
‘‘(ii) AMOUNT OF ASSESSMENT.—The
assessment imposed under clause (i) shall
be in an amount equal to such percentage
of the Savings Association Insurance Fund
assessment base (of the institutions subject
to such assessment) as of March 31, 1995,
as the Board of Directors determines, in
the Board of Directors’ discretion, to be
necessary in order for the reserve ratio of
the Savings Association Insurance Fund to
meet the designated reserve ratio on the
1st business day of January, 1996.
‘‘(iii) DEPOSIT
OF
ASSESSMENT.—
Notwithstanding any other provision of
law, the proceeds of any assessment im-
posed under clause (i) shall be deposited in
the Savings Association Insurance Fund.
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‘‘(iv) DATE PAYMENT DUE.—The spe-
cial assessment imposed under this sub-
paragraph shall be—
‘‘(I) due on the 1st business day
of January, 1996; and
‘‘(II) paid to the Corporation on
the later of the due date or such other
date as the Corporation may prescribe
which may not be later than the end
of the 60-day period beginning on the
date of the Thrift Charter Conversion
Act of 1995.
‘‘(v) SAVINGS
ASSOCIATION
INSUR-
ANCE
FUND
ASSESSMENT
BASE
DE-
FINED.—For purposes of this subpara-
graph, the term Savings Association Insur-
ance Fund assessment base means—
‘‘(I) the assessment base of Sav-
ings 
Association 
Insurance 
Fund
members on which assessments are
imposed under the risk-based assess-
ment system established pursuant to
paragraph (1); and
‘‘(II) in the case of an institution
described in clause (i)(II), the ad-
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justed attributable deposit amount de-
termined under subparagraph (C) of
section 5(d)(3) for purposes of sub-
paragraph (B)(i) of such section.
‘‘(C) SPECIAL
RULES
FOR
CERTAIN
EX-
EMPT INSTITUTIONS.—
‘‘(i) IN GENERAL.—The Board of Di-
rectors may exempt any weak insured de-
pository institution from the payment of
the assessment imposed under subpara-
graph (B)(i) if the exemption would reduce
risk to the Savings Association Insurance
Fund.
‘‘(ii) CONTINUATION OF ASSESSMENT
RATES APPLICABLE AS OF JUNE 30, 1995.—
Notwithstanding any other provision of
this subsection or any determination by the
Corporation pursuant to paragraph (2),
the semiannual assessment rate applicable
under paragraph (2) during the period be-
ginning on January 1, 1996, and ending
on December 31, 1999, with respect to any
insured depository institution which re-
ceives an exemption under clause (i) shall
be the semiannual assessment rate which
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would be applicable to such institution
under paragraph (2) if such assessment
rate were calculated in the manner in
which semiannual assessment rates for
Savings Association Insurance Fund mem-
bers were determined by the Corporation
under such paragraph as of June 30,
1995.
‘‘(iii) SPECIAL
RULE
FOR
OAKAR
BANKS.—If an insured depository institu-
tion to which clause (ii) applies is an insti-
tution 
described 
in 
subparagraph
(B)(i)(II), section 5(d)(3) (as in effect on
September 13, 1995) shall continue to
apply with respect to such institution for
purposes of clause (ii) without regard to
the repeal of such section by section
2202(c) of the Thrift Charter Conversion
Act of 1995.
‘‘(iv) DEPOSIT OF ASSESSMENT.—As-
sessments imposed under paragraph (2) in
accordance with clause (i) on depository in-
stitutions to which such clause applies
shall be deposited—
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‘‘(I) in the Savings Association
Insurance Fund until such fund is
merged into the deposit insurance
fund pursuant to section 2203(a)(2)
of the Thrift Charter Conversion Act
of 1995; and
‘‘(II) after such merger, in the
deposit insurance fund.
‘‘(v) GUIDELINES.—
‘‘(I) GUIDELINES
REQUIRED.—
Not later than 30 days after the date
of the enactment of the Thrift Char-
ter Conversion Act of 1995, the Board
of Directors shall prescribe guidelines
containing the criteria to be used by
the Board of Directors in making any
determination under clause (i).
‘‘(II) PUBLICATION.—The guide-
lines prescribed under subclause (I)
shall be published in the Federal Reg-
ister.
‘‘(D) PRO RATA PAYMENT OF SPECIAL AS-
SESSMENT BY EXEMPT INSTITUTIONS AUTHOR-
IZED.—In the case of any depository institution
which receives an exemption under subpara-
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graph (C)(i) from the special assessment im-
posed under subparagraph (B) and any succes-
sor to such institution, subparagraph (C)(ii)
shall cease to apply with respect to such institu-
tion as of the date on which the institution
makes a payment to the Corporation, on such
terms as the Board of Directors may prescribe,
in an amount equal to the product of—
‘‘(i) 12.5 percent of the product of—
‘‘(I) the Savings Association In-
surance Fund assessment base of the
institution which would have been
used in the calculation of the amount
of such special assessment if the insti-
tution had not received the exemption
from such assessment; and
‘‘(II) the percentage rate cal-
culated by the Board of Directors
under subparagraph (B)(ii) for use in
determining the amount of the special
assessment for depository institutions
which did not receive an exemption
under subparagraph (C); and
‘‘(ii) the whole number of full semi-
annual periods which begin after the date
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of such payment and end before January
1, 2000.
‘‘(E) ASSESSMENT FOR CERTAIN DEPOS-
ITS.—
‘‘(i) IN
GENERAL.—Notwithstanding
any other provision of law, in carrying out
the special assessment under subparagraph
(B), the Corporation may set assessment
rates on the basis of the factors described
in clause (iii) for deposits treated under
section 5(d)(3) as deposits insured by the
Savings Association Insurance Fund.
‘‘(ii) MINIMUM RATE.—Notwithstand-
ing clause (i), any rate assessed under
such clause may not be less than 2⁄3 of the
assessment rate imposed under subpara-
graph (B).
‘‘(iii) FACTORS.—In setting any as-
sessment rate under clause (i), the Cor-
poration shall consider the following fac-
tors:
‘‘(I) The extent to which deposits
treated under section 5(d)(3) as de-
posits insured by the Savings Associa-
tion Insurance Fund do not reflect the
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actual amount of deposits insured by
such fund because of the growth attri-
bution rule contained in clause (iii) of
such section.
‘‘(II) The ability of an insured
depository institution to demonstrate
with deposit data the amount of ac-
tual deposits which should be treated
as deposits insured by the Savings As-
sociation Insurance Fund notwith-
standing the growth attribution rule
referred to in subclause (I).
‘‘(iv) NO NET BUDGET EFFECT.—Not-
withstanding any other provision of this
subparagraph, the Corporation shall not
set any assessment rate under clause (i)
that would result in an increased budget
outlay or a decrease in offsetting receipts
under this paragraph.’’.
SEC. 2202. ASSESSMENTS ON INSURED DEPOSITORY INSTI-
TUTIONS.
(a) FINANCING CORPORATION ASSESSMENTS ON ALL
FDIC-INSURED
DEPOSITORY
INSTITUTIONS.—Section
21(f) of the Federal Home Loan Bank Act (12 U.S.C.
1441(f)) is amended—
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(1) in the portion of paragraph (2) which pre-
cedes subparagraph (A)—
(A) by striking ‘‘each Savings Association
Insurance Fund member’’ and inserting ‘‘each
insured depository institution (as defined in sec-
tion 3(c)(2) of the Federal Deposit Insurance
Act)’’; and
(B) by striking ‘‘such members’’ and in-
serting ‘‘such institutions’’; and
(2) by striking ‘‘, except that—’’ and all that
follows through the end of the paragraph and insert-
ing ‘‘, except that the Financing Corporation shall
have first priority to make the assessment.’’.
(b) ASSESSMENT RATES FOR SAIF MEMBERS MAY
NOT BE LESS THAN ASSESSMENT RATES FOR BIF MEM-
BERS.—Section 7(b)(2)(F) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1817(b)(2)(F)) is amended—
(1) by striking ‘‘and’’ at the end of clause (i);
(2) by striking the period at the end of clause
(ii) and inserting ‘‘; and’’; and
(3) by adding at the end the following new
clause:
‘‘(iii) notwithstanding any other provi-
sion of this subsection, assessment rates
for Savings Association Insurance Fund
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members may not be less than assessment
rates for Bank Insurance Fund mem-
bers.’’.
(c) REPEAL
OF EXIT MORATORIUM
AND OAKAR
BANK PROVISIONS.—Effective January 1, 1998, section
5(d) of the Federal Deposit Insurance Act (12 U.S.C.
1815(d)) is amended by striking paragraphs (2) and (3).
(d) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) Section 7(b)(2)(D) of the Federal Deposit
Insurance Act (12 U.S.C. 1817(b)(2)(D)) is amend-
ed by striking ‘‘Savings Association Insurance Fund
members’’ and inserting ‘‘members of a deposit in-
surance fund’’.
(2) Section 21(k) of the Federal Home Loan
Bank Act (12 U.S.C. 1441(k)) is amended—
(A) by striking paragraph (1); and
(B) by redesignating paragraphs (2) and
(3) as paragraphs (1) and (2), respectively.
(e) EFFECTIVE DATE.—The amendments made by
subsections (a), (b), and (d) shall take effect on January
1, 1996.
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SEC. 2203. MERGER OF BANK INSURANCE FUND AND SAV-
INGS ASSOCIATION INSURANCE FUND AFTER
RECAPITALIZATION OF SAIF.
(a) ESTABLISHMENT
OF
DEPOSIT
INSURANCE
FUND.—
(1) IN GENERAL.—Effective January 1, 1998,
section 11(a)(5) of the Federal Deposit Insurance
Act (12 U.S.C. 1821(a)(5)) is amended to read as
follows:
‘‘(5) DEPOSIT INSURANCE FUND.—
‘‘(A) ESTABLISHMENT.—There is estab-
lished a fund to be known as the deposit insur-
ance fund which shall—
‘‘(i) be maintained and administered
by the Corporation; and
‘‘(ii) initially consist of the assets and
liabilities of the Bank Insurance Fund and
Savings Association Insurance Fund which
have been merged by the Corporation into
the deposit insurance fund pursuant to
section 2203(a)(2) of the Thrift Charter
Conversion Act of 1995, other than any as-
sets of the Savings Association Insurance
Fund which have been deposited in the
special reserve of the deposit insurance
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fund pursuant to section 2203(b)(2) of
such Act.
‘‘(B) USES.—The deposit insurance fund
shall be available to the Corporation for use in
carrying out the insurance purposes of the Cor-
poration in accordance with this Act with re-
spect to insured depository institutions.
‘‘(C) DEPOSITS.—All amounts assessed
against insured depository institutions by the
Corporation shall be deposited into the deposit
insurance fund.’’.
(2) MERGER BY CORPORATION.—Except with
respect to any assets of the Savings Association In-
surance Fund which are required to be deposited in
the special reserve of the deposit insurance fund
pursuant to subsection (b)(2), the Corporation shall
merge the Bank Insurance Fund and the Savings
Association Insurance Fund on January 1, 1998,
into the deposit insurance fund established by the
amendment made by paragraph (1).
(b) ESTABLISHMENT OF SPECIAL RESERVE OF THE
DEPOSIT INSURANCE FUND.—
(1) IN GENERAL.—Effective January 1, 1998,
section 11(a)(6) of the Federal Deposit Insurance
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Act (12 U.S.C. 1821(a)(6)) is amended to read as
follows:
‘‘(6) SPECIAL RESERVE OF THE DEPOSIT IN-
SURANCE FUND.—
‘‘(A) IN GENERAL.—There is established a
fund to be known as the special reserve of the
deposit insurance fund which shall—
‘‘(i) be maintained and administered
by the Corporation; and
‘‘(ii) initially consist of amounts de-
posited in the special reserve pursuant to
section 2203(b)(2) of the Thrift Charter
Conversion Act of 1995.
‘‘(B) EMERGENCY
USE
OF
SPECIAL
RE-
SERVE.—
‘‘(i) USE
AUTHORIZED.—Subject to
clause (ii) and notwithstanding subpara-
graph (C), the Corporation may, in the
sole discretion of the Board of Directors,
transfer amounts from the special reserve
for deposit in the deposit insurance fund
for use in accordance with paragraph
(5)(B).
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‘‘(ii) CONDITIONS
ON
TRANSFER.—
The Board of Directors may authorize a
transfer under clause (i) only if—
‘‘(I) the Board of Directors de-
termines that the reserve ratio of the
deposit insurance fund is less than 50
percent of the designated reserve
ratio; and
‘‘(II) the Board of Directors
finds that the reserve ratio of the de-
posit insurance will likely be less than
the designated reserve ratio of the
fund for each of the 4 calendar quar-
ters beginning after the date of such
determination.
‘‘(C) NO REFUNDS OR OTHER USES AU-
THORIZED.—Except as provided in subpara-
graph (B), the Corporation may not make any
payment from the special reserve, make any re-
fund or provide any credit to any insured de-
pository institution with respect to any amount
in the special reserve, or use any amount in the
special reserve for any other purpose (including
the use of any such amount as security for the
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repayment of any obligation of the Corpora-
tion).
‘‘(D) EXCLUSION OF SPECIAL RESERVE IN
CALCULATING
THE
RESERVE
RATIO.—No
amount in the special reserve may be taken into
account in calculating the reserve ratio of the
deposit insurance fund under section 7.’’.
(2) TRANSFER
AND
DEPOSIT
BY
CORPORA-
TION.—If, at the time of the merger of the Bank In-
surance Fund and the Savings Association Insur-
ance Fund pursuant to subsection (a)(2), the reserve
ratio of the Savings Association Insurance Fund ex-
ceeds the designated reserve ratio, the Corporation
shall transfer from such fund to the special reserve
of the deposit insurance fund established by the
amendment made by paragraph (1) an amount equal
to the amount which causes the reserve ratio of the
Savings Association Insurance Fund to exceed the
designated reserve ratio.
(c) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) Section 3(y) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1813(y)) is amended by strik-
ing ‘‘the Bank Insurance Fund or the Savings Asso-
ciation Insurance Fund, as appropriate’’ and insert-
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ing ‘‘the deposit insurance fund established under
section 11(a)(5)’’.
(2) Section 11(a) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1821(a)) is amended by strik-
ing paragraphs (4)(A) and (7).
(3) Section 5(d)(1) of the Federal Deposit In-
surance Act (12 U.S.C. 1815(d)(1)) is amended—
(A) in subparagraph (A), by striking ‘‘re-
serve ratios’’ and all that follows through the
period and inserting ‘‘the reserve ratio of the
deposit insurance fund.’’;
(B) by striking subparagraph (B); and
(C) by redesignating subparagraph (C) as
subparagraph (B).
(4) Section 7 of the Federal Deposit Insurance
Act (12 U.S.C. 1817) is amended by striking sub-
section (l).
(5) Section 7(b)(2) of the Federal Deposit In-
surance Act (12 U.S.C. 1817(b)(2)) is amended—
(A) by striking subparagraphs (B), (F),
and (G);
(B) in clauses (i) and (iv) of subparagraph
(A), by striking ‘‘each deposit insurance fund’’
and inserting ‘‘the deposit insurance fund’’;
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(C) in subparagraph (A)(iii), by striking
‘‘a deposit insurance fund’’ and inserting ‘‘the
deposit insurance fund’’; and
(D) by inserting after subparagraph (E)
the following new subparagraph:
‘‘(F) RESERVE RATIO DEFINED.—For pur-
poses of this subsection, the term ‘reserve ratio’
means the ratio of the net worth of the deposit
insurance fund to the aggregate estimated in-
sured deposits held in all insured depository in-
stitutions.’’.
(6) Section 7(b)(3) of the Federal Deposit In-
surance Act (12 U.S.C. 1817(b)(3)) is amended—
(A) in subparagraph (A) by striking ‘‘any
deposit insurance fund’’ and inserting ‘‘the de-
posit insurance fund’’; and
(B) by striking subparagraphs (C) and
(D).
(7) Subparagraph (A) of section 7(b)(6) of the
Federal 
Deposit 
Insurance 
Act 
(12 
U.S.C.
1817(b)(6)) (as so redesignated by section 2201 of
this subtitle) is amended—
(A) in clause (i)—
(i) by inserting ‘‘or’’ after the semi-
colon at the end of subclause (I);
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(ii) by striking subclause (II); and
(iii) by striking ‘‘; and’’ at the end of
subclause (III) and inserting a period; and
(B) by striking clause (ii).
(8) Section 11(a)(4)(B) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(a)(4)(B)) is amend-
ed by striking ‘‘Bank Insurance Fund and the Sav-
ings Association Insurance Fund’’ and inserting ‘‘de-
posit insurance fund’’.
(9) Paragraph (1) of section 11(f) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 1821(f)) is
amended by striking ‘‘depositor, except that—’’ and
all that follows through the period at the end of the
paragraph and inserting ‘‘depositor.’’.
(10) Section 11(i)(3) of the Federal Deposit In-
surance Act (12 U.S.C. 1821(i)(3)) is amended—
(A) by striking subparagraph (B); and
(B) in subparagraph (C), by striking ‘‘sub-
paragraphs (A) and (B)’’ and inserting ‘‘sub-
paragraph (A)’’.
(11) Section 11A(a)(3) of the Federal Deposit
Insurance Act (12 U.S.C. 1821a(a)(3)) is amended
by striking ‘‘Bank Insurance Fund, the Savings As-
sociation Insurance Fund,’’ and inserting ‘‘deposit
insurance fund’’.
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(12) Section 11A(f) of the Federal Deposit In-
surance Act (12 U.S.C. 1821a(f)) is amended by
striking ‘‘Savings Association Insurance Fund’’ and
inserting ‘‘deposit insurance fund’’.
(13) Section 13(a)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1823(a)(1)) is amended
by striking ‘‘Bank Insurance Fund, the Savings As-
sociation Insurance Fund,’’ and inserting ‘‘deposit
insurance fund, the special reserve of the deposit in-
surance fund,’’.
(14) Section 13(c)(4)(G)(ii) of the Federal De-
posit Insurance Act (12 U.S.C. 1823(c)(4)(G)(ii)) is
amended—
(A) by striking ‘‘appropriate insurance
fund’’ and inserting ‘‘deposit insurance fund’’;
(B) by striking ‘‘the members of the insur-
ance fund (of which such institution is a mem-
ber)’’ and inserting ‘‘insured depository institu-
tions’’;
(C) by striking ‘‘each member’s’’ and in-
serting ‘‘each insured depository institution’s’’;
and
(D) by striking ‘‘the member’s’’ each place
such term appears and inserting ‘‘the institu-
tion’s’’.
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(15) Section 13(c) of the Federal Deposit In-
surance Act (12 U.S.C. 1823(c)) is amended by
striking paragraph (11).
(16) Section 13(h) of the Federal Deposit In-
surance Act (12 U.S.C. 1823(h)) is amended by
striking ‘‘Bank Insurance Fund’’ and inserting ‘‘de-
posit insurance fund’’.
(17) Section 14(a) of the Federal Deposit In-
surance Act (12 U.S.C. 1824(a)) is amended—
(A) by striking ‘‘Bank Insurance Fund or
the Savings Association Insurance Fund’’ and
inserting ‘‘deposit insurance fund’’; and
(B) by striking ‘‘each such fund’’ and in-
serting ‘‘the fund’’.
(18) Section 14(b) of the Federal Deposit In-
surance Act (12 U.S.C. 1824(b)) is amended by
striking ‘‘Bank Insurance Fund or Savings Associa-
tion Insurance Fund’’ and inserting ‘‘deposit insur-
ance fund’’.
(19) Section 14(c) of the Federal Deposit In-
surance Act (12 U.S.C. 1824(c)) is amended by
striking paragraph (3).
(20) Section 14 of the Federal Deposit Insur-
ance Act (12 U.S.C. 1824) is amended by striking
subsection (d).
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(21) Section 15(c)(5) of the Federal Deposit
Insurance Act (12 U.S.C. 1825(c)(5)) is amended—
(A) by striking ‘‘Bank Insurance Fund or
Savings Association Insurance Fund, respec-
tively,’’ and inserting ‘‘deposit insurance fund’’;
(B) by striking ‘‘Bank Insurance Fund or
Savings Association Insurance Fund, respec-
tively;’’ and inserting ‘‘deposit insurance fund;’’;
and
(C) by striking ‘‘Bank Insurance Fund or
the Savings Association Insurance Fund, re-
spectively,’’ and inserting ‘‘deposit insurance
fund,’’.
(22) Section 17(a)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1827(a)(1)) is amended
by striking ‘‘Bank Insurance Fund, the Savings As-
sociation Insurance Fund,’’ each place such term ap-
pears and inserting ‘‘deposit insurance fund’’.
(23) Section 17(d) of the Federal Deposit In-
surance Act (12 U.S.C. 1827(d)) is amended by
striking ‘‘Bank Insurance Fund, the Savings Asso-
ciation Insurance Fund,’’ each place such term ap-
pears and inserting ‘‘deposit insurance fund’’.
(24) The heading for section 17(a) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 1827(a)) is
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amended by striking ‘‘BIF, SAIF,’’ and inserting
‘‘THE DEPOSIT INSURANCE FUND’’.
(25) Subsections (a)(1) and (d)(1)(A) of section
24 of the Federal Deposit Insurance Act (12 U.S.C.
1831a) are each amended by striking ‘‘appropriate’’.
(26) Section 24(e)(2) of the Federal Deposit
Insurance Act (12 U.S.C. 1831a(e)(2)) is amend-
ed—
(A) in subparagraph (A), by striking ‘‘of
which such banks are members’’; and
(B) in subparagraph (B)(ii), by striking
‘‘of which such bank is a member’’.
(27) Section 24(f)(6)(B) of the Federal Deposit
Insurance Act (12 U.S.C. 1831a(f)(6)(B)) is amend-
ed by striking ‘‘of which such bank is a member’’.
(28) Section 31 of the Federal Deposit Insur-
ance Act (12 U.S.C. 1831h) is hereby repealed.
(29) Section 36(i)(3) of the Federal Deposit In-
surance Act (12 U.S.C. 1831m(i)(3)) is amended by
striking ‘‘affected’’.
(30) Section 38 of the Federal Deposit Insur-
ance Act (12 U.S.C. 1831o) is amended by striking
subsection (o).
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(31) Section 21B(f)(2)(C)(ii) of the Federal
Home 
Loan 
Bank 
Act 
(12 
U.S.C.
1441b(f)(2)(C)(ii)) is amended to read as follows:
‘‘(C) PAYMENTS BY FEDERAL HOME
LOAN BANKS.—To the extent the amounts
available pursuant to subparagraphs (A)
and (B) are insufficient to cover the
amount of interest payments, each Federal
home loan bank shall pay to the Funding
Corporation each calendar year an amount
equal to 23.7 percent of the bank’s net
earnings for the year for which such
amount is required to be paid.’’.
(d) EFFECTIVE
DATE
OF
AMENDMENTS.—The
amendments made by subsection (c) shall take effect on
January 1, 1998.
SEC. 2204. REFUND OF AMOUNTS IN DEPOSIT INSURANCE
FUND IN EXCESS OF DESIGNATED RESERVE
AMOUNT.
Subsection (e) of section 7 of the Federal Deposit In-
surance Act (12 U.S.C. 1817(e)) is amended to read as
follows:
‘‘(e) REFUNDS.—
‘‘(1) OVERPAYMENTS.—In the case of any pay-
ment of an assessment by an insured depository in-
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stitution in excess of the amount due to the Cor-
poration, the Corporation may—
‘‘(A) refund the amount of the excess pay-
ment to the insured depository institution; or
‘‘(B) credit such excess amount toward the
payment of subsequent semiannual assessments
until such credit is exhausted.
‘‘(2) BALANCE IN INSURANCE FUND IN EXCESS
OF DESIGNATED RESERVE.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), if as of the end of any semiannual
period the amount of the actual reserves in—
‘‘(i) the Bank Insurance Fund (until
the merger of such fund into the deposit
insurance 
fund 
pursuant 
to 
section
2203(a)(2) of the Thrift Charter Conver-
sion Act of 1995); or
‘‘(ii) the deposit insurance fund (after
the establishment of such fund under sec-
tion 2203(a)(1) of such Act),
exceeds the balance required to meet the des-
ignated reserve ratio applicable with respect to
such fund, such excess amount shall be re-
funded to members of the fund by the Corpora-
tion on such basis as the Board of Directors
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determines to be appropriate, taking into ac-
count the factors considered under the risk-
based assessment system.
‘‘(B) REFUND NOT TO EXCEED PREVIOUS
SEMIANNUAL
ASSESSMENT.—The amount of
any refund under this paragraph to any mem-
ber of a deposit insurance fund for any semi-
annual period may not exceed the total amount
of assessments paid by such member to the in-
surance fund with respect to such period.’’.
SEC. 2205. ASSESSMENTS AUTHORIZED ONLY IF NEEDED
TO MAINTAIN THE RESERVE RATIO OF A DE-
POSIT INSURANCE FUND.
(a) IN GENERAL.—Section 7(b)(2)(A)(i) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 1817(b)(2)(A)(i))
is amended in the portion of such section preceding
subclause (I) by inserting ‘‘when necessary, and only to
the extent necessary’’ after ‘‘insured depository institu-
tions’’.
(b) 
LIMITATION
ON
ASSESSMENT.—Section
7(b)(2)(A)(iii) of the Federal Deposit Insurance Act (12
U.S.C. 1817(b)(2)(A)(iii)) is amended to read as follows:
‘‘(iii) LIMITATION ON ASSESSMENT.—
The Board of Directors shall not set semi-
annual assessments with respect to a de-
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posit insurance fund in excess of the
amount needed—
‘‘(I) to maintain the reserve ratio
of the fund at the designated reserve
ratio; or
‘‘(II) if the reserve ratio is less
than the designated reserve ratio, to
increase the reserve ratio to the des-
ignated reserve ratio.’’.
CHAPTER 2—STATUS OF BANKS AND
SAVINGS ASSOCIATIONS
SEC. 2221. TERMINATION OF FEDERAL SAVINGS ASSOCIA-
TIONS; TREATMENT OF STATE SAVINGS ASSO-
CIATIONS AS BANKS FOR PURPOSES OF FED-
ERAL BANKING LAW.
(a) TERMINATION OF FEDERAL SAVINGS ASSOCIA-
TION CHARTERS.—
(1) IN GENERAL.—Each Federal savings asso-
ciation shall—
(A) convert to a national bank charter;
(B) convert to a State depository institu-
tion charter; or
(C) surrender the charter of such savings
association and liquidate the institution.
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(2) CONVERSION TO NATIONAL BANK BY OPER-
ATION OF LAW.—If any Federal savings association
has not taken any action required under paragraph
(1) as of January 1, 1998, the savings association
shall—
(A) become a national bank on such date
by operation of law;
(B) immediately file articles of association
and an organizational certificate with the
Comptroller of the Currency in accordance with
sections 5133, 5134, and 5135 of the Revised
Statutes of the United States; and
(C) cease to exist as a Federal savings as-
sociation as of such date.
(3) PROHIBITION ON NEW CHARTERS OF FED-
ERAL SAVINGS ASSOCIATIONS.—The Director of the
Office of Thrift Supervision may not grant any char-
ter for a Federal savings association for which an
application was received after the date of the enact-
ment of this Act.
(b) TREATMENT OF STATE SAVINGS ASSOCIATIONS
AS
BANKS
FOR
PURPOSES
OF
FEDERAL
BANKING
LAW.—
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(1) AMENDMENTS
TO
FEDERAL
DEPOSIT
IN-
SURANCE ACT.—Section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813) is amended—
(A) by striking paragraph (2) of subsection
(a) and inserting the following new paragraph:
‘‘(2) STATE BANK.—
‘‘(A) IN GENERAL.—The term ‘State bank’
means any bank, banking association, trust
company, savings bank, industrial bank (or
similar depository institution which the Board
of Directors finds to be operating substantially
in the same manner as an industrial bank),
building and loan association, savings and loan
association, homestead association, cooperative
bank, or other banking institution—
‘‘(i) which is engaged in the business
of receiving deposits, other than trust
funds (as defined in this section); and
‘‘(ii) which—
‘‘(I) is incorporated under the
laws of any State;
‘‘(II) is organized and operating
according to the laws of the State in
which such institution is chartered or
organized; or
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HR 2491 RDS
‘‘(III) is operating under the
Code of Law for the District of Co-
lumbia (except a national bank).
‘‘(B) 
CERTAIN
INSURED
BANKS
IN-
CLUDED.—The term ‘State bank’ includes any
cooperative bank or other unincorporated bank
the deposits of which were insured by the Cor-
poration on the day before the date of the en-
actment of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989.
‘‘(C) CERTAIN
UNINSURED
BANKS
EX-
CLUDED.—The term ‘State bank’ does not in-
clude any cooperative bank or other unincor-
porated bank the deposits of which were not in-
sured by the Corporation on the day before the
date of the enactment of the Financial Institu-
tions Reform, Recovery, and Enforcement Act
of 1989.’’; and
(B) in subsection (q)—
(i) by inserting ‘‘and’’ after the semi-
colon at the end of paragraph (2);
(ii) by striking ‘‘; and’’ at the end of
paragraph (3) and inserting a period; and
(iii) by striking paragraph (4).
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(2) AMENDMENTS
TO
THE
BANK
HOLDING
COMPANY
ACT
OF
1956.—Section 2 of the Bank
Holding Company Act of 1956 (12 U.S.C. 1841) is
amended—
(A) by striking subparagraph (E) of sub-
section (a)(5); and
(B) by striking subparagraphs (B) and (J)
of subsection (c)(2).
(3) AMENDMENTS TO THE FEDERAL RESERVE
ACT.—The 2d and 3d paragraphs of the 1st section
of the Federal Reserve Act (12 U.S.C. 221) are each
amended by inserting ‘‘(as defined in section 3(a)(2)
of the Federal Deposit Insurance Act)’’ after ‘‘State
bank’’.
SEC. 2222. TREATMENT OF CERTAIN ACTIVITIES AND AF-
FILIATIONS OF BANK HOLDING COMPANIES
RESULTING FROM THIS ACT.
Section 4 of the Bank Holding Company Act of 1956
(12 U.S.C. 1843) is amended by adding at the end the
following new subsection:
‘‘(k) TREATMENT OF COMPANIES RESULTING FROM
SAVINGS AND LOAN HOLDING COMPANIES.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of this section (other than paragraph (5))
or any other provision of Federal law including sec-
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tions 20 and 32 of the Banking Act of 1933, a
qualified bank holding company may, after such
company becomes a bank holding company—
‘‘(A) maintain or enter into any non-
banking affiliation which such company was au-
thorized to maintain or enter into as of Septem-
ber 22, 1995, or was authorized to maintain
following a merger of insured depository institu-
tion subsidiaries pursuant to an application
filed no later than such date; and
‘‘(B) engage, directly or through any affili-
ate described in subparagraph (A) which is not
a bank, in any activity in which such company
or any affiliate described in subparagraph (A)
was authorized to engage as of September 22,
1995, or in which such company was authorized
to engage following a merger of insured deposi-
tory institution subsidiaries pursuant to an ap-
plication filed no later than such date,
if the requirements of paragraph (4) are met.
‘‘(2) QUALIFIED BANK HOLDING COMPANY DE-
FINED.—For purposes of this subsection, the term
‘qualified bank holding company’ means—
‘‘(A) any company which—
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‘‘(i) as of September 13, 1995, is a
savings and loan holding company and is
not a bank holding company; and
‘‘(ii) becomes a bank holding company
after such date; and
‘‘(B) any bank holding company which as
of September 13, 1995—
‘‘(i) is a savings and loan holding
company; and
‘‘(ii) is exempt from this section pur-
suant to an order issued by the Board
under subsection (d).
‘‘(3) NO
LOSS
OF
SUBSECTION (d) EXEMP-
TION.—No qualified bank holding company de-
scribed in paragraph (2)(B) shall lose the grounds
for the exemption under subsection (d) because a
savings association which such company controlled,
directly or indirectly, as of September 13, 1995, be-
comes a bank after such date so long as such bank
continues to meet the requirements of subpara-
graphs (A) and (B) of paragraph (4).
‘‘(4) PREREQUISITES
FOR
CONTINUATION
OF
GRANDFATHERED ACTIVITIES AND AFFILIATIONS.—
This subsection shall cease to apply with respect to
a qualified bank holding company if, at any time
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after such company first meets the definition of a
qualified bank holding company—
‘‘(A) any insured depository institution
controlled by such company which, as of the
day before the company first meets the defini-
tion of a qualified bank holding company, was
subject to the requirements contained in section
10(m) of the Home Owners’ Loan Act, as in ef-
fect on such date, (and regulations in effect on
such date under such section) for treatment as
a qualified thrift lender under such section fails
to meet such requirements;
‘‘(B) any insured depository institution
controlled by such company fails to comply with
any limitation or restriction on the type or
amounts of loans or investments of the institu-
tion to which such institution was subject as of
the date of the enactment of the Thrift Charter
Conversion Act of 1995; or
‘‘(C) the company or any subsidiary of the
company acquires more than 5 percent of the
shares or assets of any bank or insured institu-
tion after September 13, 1995.
‘‘(5) 
NONTRANSFERABLE.—This 
subsection
shall not apply with respect to any qualified bank
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holding company if, after September 13, 1995, any
person acquires, directly or indirectly, control of the
company or the company is the subject of any merg-
er, consolidation, or other similar transaction.
‘‘(6) PROHIBITION ON CERTAIN INSURED DE-
POSITORY INSTITUTIONS IDENTIFYING THEMSELVES
AS NATIONAL BANKS.—
‘‘(A) IN
GENERAL.—Notwithstanding the
requirement of section 5134 of the Revised
Statutes of the United States—
‘‘(i) the name of an insured depository
institution subsidiary of a qualified bank
holding company which—
‘‘(I) as of the date of the enact-
ment of the Thrift Charter Conversion
Act of 1995, is a savings and loan
holding company described in section
10(c)(3) of the Home Owners’ Loan
Act (as in effect on such date); and
‘‘(II) is subject to the restrictions
contained in paragraph (3),
may not include the term ‘national’; and
‘‘(ii) such insured depository institu-
tion may not be identified as a national
bank on any sign displayed by the institu-
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tion or in any advertisement or other pub-
lication of the institution.
‘‘(B) DEPOSITORY INSTITUTION NOT LIA-
BLE
FOR
FRAUDULENT
MISREPRESENTATION
FOR
NOT
REPRESENTING
ITSELF
AS
A
NA-
TIONAL BANK.—An insured depository institu-
tion which is subject to subparagraph (A) shall
not be liable for any civil or criminal penalty
under any Federal or State consumer protection
law, or in any criminal or civil action, for fraud-
ulently misrepresenting the nature of the char-
ter of the institution, for falsely advertising the
status of the institution, for making a false
statement with respect to the status of the in-
stitution, or for any similar offense by reason of
the institution’s compliance with such subpara-
graph.
‘‘(7) ENFORCEMENT.—In addition to any other
power of the Board, the Board may enforce compli-
ance with the provisions of this subsection with re-
spect to any qualified bank holding company and
any bank controlled by such company under section
8 of the Federal Deposit Insurance Act.’’.
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SEC. 2223. TRANSITION PROVISIONS FOR ACTIVITIES OF
SAVINGS ASSOCIATIONS WHICH CONVERT
INTO OR BECOME TREATED AS BANKS.
Notwithstanding any other provision of Federal law,
any insured depository institution which, as of September
13, 1995, is a savings association (as defined in section
3(b) of the Federal Deposit Insurance Act (as in effect
on such date)) and after such date converts to a national
or State bank charter or becomes treated as a State bank
pursuant to the amendment made by section 2221(b) may
continue to engage, directly or indirectly, in any activity
in which such institution was lawfully engaged as of such
date during the 5-year period beginning on the effective
date of such conversion or the effective date of such
amendments, as the case may be.
SEC. 2224. REGISTRATION OF BANK HOLDING COMPANIES
RESULTING FROM CONVERSIONS OF SAV-
INGS ASSOCIATIONS TO BANKS OR TREAT-
MENT OF SAVINGS ASSOCIATIONS AS BANKS.
Section 3 of the Bank Holding Company Act of 1956
(12 U.S.C. 1842) is amended by adding at the end the
following new subsections:
‘‘(h) REGISTRATION OF CERTAIN BANK HOLDING
COMPANIES.—A company which, as of September 13,
1995, is a savings and loan holding company (as defined
in section 10(a)(1)(D) of Home Owners’ Loan Act (as in
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effect on such date)) and is not a bank holding company
shall not be required to obtain the approval of the Board
under subsection (a) to become a bank holding company
after September 13, 1995, as a result of the conversion
of any insured depository institution subsidiary of such
company into a bank or by virtue of the treatment of any
insured depository institution subsidiary of such company
as a bank pursuant to the amendments made by the Thrift
Charter Conversion Act of 1995, if such company—
‘‘(1) registers as a bank holding company with
the Board in accordance with section 5(a); and
‘‘(2) does not acquire, directly or indirectly,
ownership or control of any additional insured de-
pository institution or other company in connection
with such conversion or treatment.
‘‘(i) REGULATION OF QUALIFIED BANK HOLDING
COMPANIES.—The Board shall regulate qualified bank
holding companies (as defined in section 4(k)(2)) in a
manner consistent with—
‘‘(1) the regulation of such companies by the
Director of the Office of Thrift Supervision before
the date of the enactment of the Thrift Charter Con-
version Act of 1995; and
‘‘(2) the safety and soundness of insured depos-
itory institution subsidiaries of such companies.’’.
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SEC. 2225. ADDITIONAL TRANSITION PROVISIONS AND SPE-
CIAL RULES.
(a) MUTUAL NATIONAL BANKS AUTHORIZED; CON-
VERSION OF MUTUAL SAVINGS ASSOCIATIONS INTO NA-
TIONAL BANKS.—
(1) IN GENERAL.—Chapter one of title LXII of
the Revised Statutes of the United States (12
U.S.C. 21 et seq.) is amended by inserting after sec-
tion 5133 the following new section:
‘‘SEC. 5133A. MUTUAL NATIONAL BANKS.
‘‘(a) IN GENERAL.—Notwithstanding the paragraph
designated the ‘‘Third’’ of section 5134, the Comptroller
of the Currency may charter national banks organized in
the mutual form either de novo or through a conversion
of any stock national or State bank (as defined in section
3 of the Federal Deposit Insurance Act) or any State mu-
tual bank or credit union, subject to regulations prescribed
by the Comptroller of the Currency in accordance with this
section.
‘‘(b) REGULATIONS.—
‘‘(1) TRANSITION RULES.—National banks or-
ganized in the mutual form shall be subject to the
regulations of the Director of the Office of Thrift
Supervision governing corporate organization, gov-
ernance, and conversion of mutual institutions, as in
effect on September 13, 1995, including parts 543,
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544, 546, 563b, and 563c of chapter V of title 12
of the Code of Federal Regulations (as in effect on
such date), during the 3-year period beginning on
the date of the enactment of the Thrift Charter Con-
version Act of 1995.
‘‘(2) REGULATIONS OF THE COMPTROLLER.—
The Comptroller of the Currency shall prescribe ap-
propriate regulations for national banks organized in
the mutual form, effective as of the end of the 3-
year period referred to in paragraph (1).
‘‘(3) APPLICABILITY
OF
CAPITAL
STOCK
RE-
QUIREMENTS.—The Comptroller of the Currency
shall prescribe regulations regarding the manner in
which requirements of title LXII of the Revised
Statutes of the United States with respect to capital
stock, and limitations imposed on national banks
under such title based on capital stock, shall apply
to national banks organized in mutual form pursu-
ant to subsection (a).
‘‘(c) CONVERSIONS.—
‘‘(1) 
CONVERSION
TO
STOCK
NATIONAL
BANK.—Subject to subsection (b)(1) and, after the
end of the 3-year period referred to in such sub-
section, such regulations as the Comptroller of the
Currency may prescribe for the protection of deposi-
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tors’ rights and for any other purpose the Comptrol-
ler of the Currency may consider appropriate, any
national bank which is organized in mutual form
pursuant to paragraph (1) may reorganize as a
stock national bank.
‘‘(2) CONVERSIONS TO STATE BANKS.—Any na-
tional mutual bank may convert to a State bank
charter in accordance with regulations prescribed by
the Comptroller of the Currency and applicable
State law.’’.
(2) MUTUAL
BANK
HOLDING
COMPANIES.—
Subsection (g) of section 3 of the Bank Holding
Company Act of 1956 (12 U.S.C. 1842(g)) is
amended to read as follows:
‘‘(g) MUTUAL BANK HOLDING COMPANIES.—
‘‘(1) IN
GENERAL.—A national mutual bank
may reorganize so as to become a holding company
by—
‘‘(A) chartering an interim national bank,
the stock of which is to be wholly owned, except
as otherwise provided in this section, by the na-
tional mutual bank; and
‘‘(B) transferring the substantial part of
the national mutual bank’s assets and liabil-
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ities, including all of the bank’s insured liabil-
ities, to the interim national bank.
‘‘(2) DIRECTORS AND CERTAIN ACCOUNT HOLD-
ERS’ APPROVAL OF PLAN REQUIRED.—A reorganiza-
tion is not authorized under this subsection unless—
‘‘(A) a plan providing for such reorganiza-
tion has been approved by a majority of the
board of directors of the national mutual bank;
and
‘‘(B) in the case of a national mutual bank
in which holders of accounts and obligors exer-
cise voting rights, such plan has been submitted
to and approved by a majority of such individ-
uals at a meeting held at the call of the direc-
tors in accordance with the procedures pre-
scribed by the bank’s charter and bylaws.
‘‘(3) NOTICE TO THE BOARD; DISAPPROVAL PE-
RIOD.—
‘‘(A) NOTICE REQUIRED.—
‘‘(i) IN GENERAL.—At least 60 days
before taking any action described in para-
graph (1), a national mutual bank seeking
to establish a mutual holding company
shall provide written notice to the Board.
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‘‘(ii) CONTENTS OF NOTICE.—The no-
tice shall contain such relevant information
as the Board shall require by regulation or
by specific request in connection with any
particular notice.
‘‘(B) TRANSACTION ALLOWED IF NOT DIS-
APPROVED.—Unless the Board within such 60-
day notice period disapproves the proposed
holding company formation, or extends for an-
other 30 days the period during which such dis-
approval may be issued, the national mutual
bank providing such notice may proceed with
the transaction, if the requirements of para-
graph (2) have been met.
‘‘(C) GROUNDS
FOR
DISAPPROVAL.—The
Board may disapprove any proposed holding
company formation only if—
‘‘(i) such disapproval is necessary to
prevent unsafe or unsound practices;
‘‘(ii) the financial or management re-
sources of the national mutual bank in-
volved warrant disapproval;
‘‘(iii) the national mutual bank fails
to furnish the information required under
subparagraph (A); or
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‘‘(iv) the national mutual bank fails to
comply with the requirement of paragraph
(2).
‘‘(D) RETENTION OF CAPITAL ASSETS.—In
connection with the transaction described in
paragraph (1), a national mutual bank may,
subject to the approval of the Board, retain
capital assets at the holding company level to
the extent that the capital retained at the hold-
ing company is in excess of the amount of cap-
ital required in order for the interim national
bank to meet all relevant capital standards es-
tablished by the Comptroller of the Currency
for national banks.
‘‘(4) OWNERSHIP.—
‘‘(A) IN GENERAL.—Persons having own-
ership rights in the national mutual bank under
section 5133A of the Revised Statutes of the
United States (including paragraph 575.5 of
chapter V of title 12 of the Code of Federal
Regulations, as in effect on September 13,
1995, and applicable to national mutual banks
pursuant to such section) or State law shall
have the same ownership rights with respect to
the mutual holding company.
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‘‘(B) HOLDERS OF CERTAIN ACCOUNTS.—
Holders of savings, demand, or other accounts
of—
‘‘(i) a national bank chartered as part
of a transaction described in paragraph
(1); or
‘‘(ii) a mutual bank acquired pursuant
to paragraph (5)(B),
shall have the same ownership rights with re-
spect to the mutual holding company as persons
described in subparagraph (A) of this para-
graph.
‘‘(5) PERMITTED ACTIVITIES.—A mutual hold-
ing company may engage only in the following activi-
ties:
‘‘(A) Investing in the stock of a national or
State bank.
‘‘(B) Acquiring a mutual bank through the
merger of such bank into a national bank sub-
sidiary of such holding company or an interim
national bank subsidiary of such holding com-
pany.
‘‘(C) Subject to paragraph (6), merging
with or acquiring another holding company, one
of whose subsidiaries is a national mutual bank.
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‘‘(D) Investing in a corporation the capital
stock of which is available for purchase by a na-
tional mutual bank under Federal law or under
the law of any State where the home office of
any subsidiary bank is located.
‘‘(E) Engaging in the activities permitted
under section 4(c).
‘‘(6) LIMITATIONS ON CERTAIN ACTIVITIES OF
ACQUIRED HOLDING COMPANIES.—
‘‘(A) NEW ACTIVITIES.—If a mutual hold-
ing company acquires or merges with another
holding company under paragraph (5)(C), the
holding company acquired or the holding com-
pany resulting from such merger or acquisition
may only invest in assets and engage in activi-
ties which are authorized under paragraph (5).
‘‘(B) GRACE PERIOD FOR DIVESTING PRO-
HIBITED ASSETS OR DISCONTINUING PROHIB-
ITED ACTIVITIES.—Not later than 2 years fol-
lowing a merger or acquisition described in
paragraph (5)(C), the acquired holding com-
pany or the holding company resulting from
such merger or acquisition shall—
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‘‘(i) dispose of any asset which is an
asset in which a mutual holding company
may not invest under paragraph (5); and
‘‘(ii) cease any activity which is an ac-
tivity in which a mutual holding company
may not engage under paragraph (5).
‘‘(7) 
CHARTERING
AND
OTHER
REQUIRE-
MENTS.—
‘‘(A) IN
GENERAL.—A mutual holding
company shall be chartered by the Board and
shall be subject to such regulations as the
Board may prescribe.
‘‘(B) OTHER REQUIREMENTS.—Unless the
context otherwise requires, a mutual holding
company shall be subject to the other require-
ments of this Act regarding regulation of hold-
ing companies.
‘‘(8) CAPITAL IMPROVEMENT.—
‘‘(A) PLEDGE OF STOCK OF SAVINGS ASSO-
CIATION
SUBSIDIARY.—This section shall not
prohibit a mutual holding company from pledg-
ing all or a portion of the stock of a national
bank chartered as part of a transaction de-
scribed in paragraph (1) to raise capital for
such bank.
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‘‘(B) ISSUANCE OF NONVOTING SHARES.—
No provision of this Act shall be construed as
prohibiting a national bank chartered as part of
a transaction described in paragraph (1) from
issuing any nonvoting shares or less than 50
percent of the voting shares of such bank to
any person other than the mutual holding com-
pany.
‘‘(9) INSOLVENCY AND LIQUIDATION.—
‘‘(A) IN GENERAL.—Notwithstanding any
provision of law, upon—
‘‘(i) the default of any national
bank—
‘‘(I) the stock of which is owned
by any mutual holding company; and
‘‘(II) which was chartered in a
transaction described in paragraph
(1);
‘‘(ii) the default of a mutual holding
company; or
‘‘(iii) a foreclosure on a pledge by a
mutual holding company described in para-
graph (8)(A),
a trustee shall be appointed receiver of such
mutual holding company and such trustee shall
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have the authority to liquidate the assets of,
and satisfy the liabilities of, such mutual hold-
ing company pursuant to title 11, United States
Code.
‘‘(B) DISTRIBUTION OF NET PROCEEDS.—
Except as provided in subparagraph (C), the
net proceeds of any liquidation of any mutual
holding company pursuant to subparagraph (A)
shall be transferred to persons who hold owner-
ship interests in such mutual holding company.
‘‘(C) RECOVERY BY CORPORATION.—If the
Corporation incurs a loss as a result of the de-
fault of any savings association subsidiary of a
mutual holding company which is liquidated
pursuant to subparagraph (A), the Corporation
shall succeed to the ownership interests of the
depositors of such savings association in the
mutual holding company, to the extent of the
Corporation’s loss.
‘‘(10) STATE
MUTUAL
BANK
HOLDING
COM-
PANY.—
‘‘(A) IN GENERAL.—Notwithstanding any
provision of Federal law, a State bank operat-
ing in mutual form may reorganize so as to
form a holding company under State law.
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‘‘(B) REGULATION
OF
STATE
MUTUAL
HOLDING COMPANY.—A corporation organized
as a holding company in accordance with sub-
paragraph (A) shall be regulated on the same
terms and be subject to the same limitations as
any other holding company which controls a
bank.
‘‘(11) REGULATIONS.—
‘‘(A) TRANSITION
RULES.—Mutual bank
holding companies organized under this sub-
section shall be subject to the regulations of the
Director of the Office of Thrift Supervision gov-
erning corporate organization, governance, and
conversion of mutual institutions, as in effect
on September 13, 1995, including part 575 of
chapter V of title 12 of the Code of Federal
Regulations (as in effect on such date), during
the 3-year period beginning on the date of the
enactment of the Thrift Charter Conversion Act
of 1995.
‘‘(B) REGULATIONS OF THE BOARD.—The
Board shall prescribe appropriate regulations
for mutual holding companies, effective at the
end of the 3-year period referred to in subpara-
graph (A).
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‘‘(12) DEFINITIONS.—For purposes of this sub-
section—
‘‘(A) MUTUAL
HOLDING
COMPANY.—The
term ‘mutual holding company’ means a cor-
poration organized as a holding company under
this subsection.
‘‘(B) 
DEFAULT.—The 
term 
‘default’
means an adjudication or other official deter-
mination of a court of competent jurisdiction or
other public authority pursuant to which a con-
servator, receiver, or other legal custodian is
appointed.
‘‘(C) NATIONAL MUTUAL BANK.—The term
‘national mutual bank’ means a national bank
organized in mutual form under section 5133A
of the Revised Statutes of the United States.’’.
(3) LIMITATION ON FEDERAL REGULATION OF
STATE
BANKS.—Except as otherwise provided in
Federal law, the Comptroller of the Currency, Board
of Governors of the Federal Reserve System, and
Federal Deposit Insurance Corporation may not
adopt or enforce any regulation which contravenes
the corporate governance rules prescribed by State
law or regulation for State banks unless the Comp-
troller, Board, or Corporation finds that such Fed-
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eral regulation is necessary to assure the safety and
soundness of such State banks.
(4) CONVERSIONS OF MUTUAL SAVINGS ASSO-
CIATIONS TO MUTUAL NATIONAL BANKS BY OPER-
ATION OF LAW.—Notwithstanding any other provi-
sion of Federal or State law, any savings association
(as defined in section 3 of the Federal Deposit In-
surance Act (as in effect on September 13, 1995))
which is organized in mutual form as of the date of
the enactment of this Act may become a national
mutual bank by operation of law if the association—
(A) files the articles of association and or-
ganization certificate with the Comptroller of
the Currency before January 1, 1998, in ac-
cordance with chapter one of title LXII of the
Revised Statutes of the United States; and
(B) provides such other document or infor-
mation as the Comptroller of the Currency may
prescribe in regulations consistent with this sec-
tion and section 5133A of the Revised Statutes
of the United States (as added by paragraph
(1) of this subsection).
(5) CLERICAL AMENDMENT.—The table of sec-
tions for chapter one of title LXII of the Revised
Statutes of the United States (12 U.S.C. 21 et seq.)
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is amended by inserting after the item relating to
section 5133 the following new item:
‘‘5133A.
Mutual national banks.’’.
(b) 
MEMBERSHIP
IN
FEDERAL
HOME
LOAN
BANKS.—Any insured depository institution which—
(1) as of the date of the enactment of this Act,
is a Federal savings association which, pursuant to
section 6(e) of the Federal Home Loan Bank Act,
may not voluntarily withdraw from membership in a
Federal home loan bank; and
(2) after such date converts from a Federal
savings association to a national bank,
shall continue to be subject to the prohibition under such
section on voluntary withdrawal from such membership as
though such bank were still a Federal savings association
until the bank ceases to be a national bank.
(c) BRANCHES.—
(1) IN GENERAL.—Notwithstanding any provi-
sion of the Federal Deposit Insurance Act, the Bank
Holding Company Act of 1956, or any other Federal
or State law, any depository institution which—
(A) as of the date of the enactment of this
Act, is a savings association; and
(B) becomes a bank before January 1,
1998, or, pursuant to the amendments made by
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this subsection, is treated as a bank as of such
date under the Federal Deposit Insurance Act,
and any depository institution or bank holding com-
pany which acquires such depository institution, may
continue, after the depository institution becomes or
commences to be treated as a bank, to operate any
branch which the savings association operated as a
branch on September 13, 1995.
(2) NO
ADDITIONAL
BRANCHES.—Paragraph
(1) shall not be construed as authorizing the estab-
lishment, acquisition, or operation of any additional
branch of a depository institution in any State by
virtue of the operation by such institution of a
branch in such State pursuant to such paragraph
except to the extent such establishment, acquisition,
or operation is permitted under the Federal Deposit
Insurance Act, Bank Holding Company Act of 1956,
and any other applicable Federal or State law with-
out regard to such branch.
(d) TRANSITION PROVISION RELATING TO LIMITA-
TIONS ON LOANS TO 1 BORROWER.—Section 5200 of the
Revised Statutes of the United States (12 U.S.C. 84) is
amended by adding at the end the following new sub-
section:
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‘‘(e) TRANSITION PROVISION FOR SAVINGS ASSOCIA-
TIONS CONVERTING TO NATIONAL BANKS.—In the case
of any depository institution which, as of September 13,
1995, is a savings association (as defined in section 3(b)
of the Federal Deposit Insurance Act (as in effect on such
date)) and becomes a national bank on or before January
1, 1998, any loan, or legally binding commitment to make
a loan, made or entered into by such institution which is
outstanding on the date the institution becomes a national
bank may continue to be held without regard to any limi-
tation contained in this section during the 3-year period
beginning on such date.’’.
SEC. 2226. TECHNICAL AND CONFORMING AMENDMENTS.
(a) AMENDMENTS TO THE FEDERAL DEPOSIT IN-
SURANCE ACT.—
(1) Section 3(z) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1813(z)) is amended by strik-
ing ‘‘the Director of the Office of Thrift Super-
vision,’’.
(2) Section 8(b) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1818(b)) is amended by strik-
ing paragraph (9).
(3) Section 13 of the Federal Deposit Insurance
Act (12 U.S.C. 1823) is amended by striking sub-
section (k).
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(4) Subsections (c)(2) and (i)(2) of section 18
of the Federal Deposit Insurance Act (12 U.S.C.
1828) are each amended—
(A) in subparagraph (B), by inserting
‘‘and’’ after the semicolon;
(B) in subparagraph (C), by striking ‘‘;
and’’ and inserting a period; and
(C) by striking subparagraph (D).
(5) Section 18 of the Federal Deposit Insurance
Act (12 U.S.C. 1828) is amended by striking sub-
section (m).
(6) The Federal Deposit Insurance Act (12
U.S.C. 1811 et seq.) is amended by striking section
28.
(b) AMENDMENTS TO THE BANK HOLDING COMPANY
ACT OF 1956.—
(1) Section 2 of the Bank Holding Company
Act of 1956 (12 U.S.C. 1841) is amended by strik-
ing subsections (i) and (j).
(2) Section 4(c)(8) of the Bank Holding Com-
pany Act of 1956 (12 U.S.C. 1843(c)(8)) is amend-
ed by striking the sentence preceding the penul-
timate sentence.
(3) Section 4(f) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1843(f)) is amended—
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(A) in paragraph (2)(A)(i), by striking ‘‘or
an insured institution’’ and all that follows
through ‘‘of this subsection)’’;
(B) in paragraph (2)(A)(ii)—
(i) by striking ‘‘or a savings associa-
tion’’ where such term appears in the por-
tion of such paragraph which precedes
subclause (I);
(ii) by inserting ‘‘and’’ at the end of
subclause (VI);
(iii) by striking subclauses (VIII),
(IX), and (X); and
(iv) by striking ‘‘(V), and (VIII)’’,
where such term appears in the portion of
such paragraph which appears after the
end of subclause (VII), and inserting ‘‘and
(V)’’; and
(C) by striking paragraphs (10), (11),
(12), and (13).
(4) Section 4(i) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1843(i)) is amended—
(A) by striking paragraphs (1) and (2);
and
(B) in paragraph (3)(A), by striking ‘‘any
Federal savings association’’ and all that fol-
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lows through the period at the end of such
paragraph and inserting ‘‘such association was
authorized to engage under this section as of
September 15, 1995.’’.
(c) OTHER TECHNICAL AND CONFORMING AMEND-
MENTS.—
(1) Section 804(a) of the Alternative Mortgage
Transaction Parity Act of 1982 (12 U.S.C. 3803) is
amended—
(A) in the portion of such subsection which
precedes paragraph (1)—
(i) 
by 
striking 
‘‘, 
and 
other
nonfederally chartered housing creditors,’’;
and
(ii) by inserting ‘‘and in order to per-
mit other nonfederally chartered housing
creditors to make, purchase, and enforce
alternative mortgage transactions,’’ after
‘‘enforcing alternative mortgage trans-
actions, ’’; and
(B) in paragraph (1), by inserting ‘‘(as
such term is defined in section 3(a) of the Fed-
eral Deposit Insurance Act)’’ after ‘‘with re-
spect to banks’’.
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(2) Section 205 of the Depository Institution
Management Interlocks Act (12 U.S.C. 3204) is
amended—
(A) in the portion of paragraph (8)(A)
which precedes clause (i), by striking ‘‘A diver-
sified savings’’ and all that follows through
‘‘with respect to’’ and inserting ‘‘A depository
institution holding company which, as of Sep-
tember 13, 1995, and at all times thereafter, is
a diversified savings and loan holding company
(as defined in section 10(1)(F) of Home Own-
ers’ Loan Act, as such section is in effect on
such date) with respect to’’; and
(B) by striking paragraph (9).
(3) Section 19(b)(1)(A) of the Federal Reserve
Act (12 U.S.C. 461(b)(1)(A)) is amended—
(A) by inserting ‘‘and’’ after the semicolon
at the end of clause (v); and
(B) by striking clause (vi).
(4) Subparagraphs (A), (B), (C) of section
10(e)(5) of the Federal Home Loan Bank Act (12
U.S.C. 1430(e)(5)) are each amended by inserting
before the period at the end ‘‘(as such section is in
effect on September 13, 1995)’’.
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SEC. 2227. REFERENCES TO SAVINGS ASSOCIATIONS AND
STATE BANKS IN FEDERAL LAW.
Effective January 1, 1998, any reference in any Fed-
eral banking law to—
(1) the term ‘‘savings association’’ shall be
deemed to be a reference to a bank as defined in
section 3(a) of the Federal Deposit Insurance Act;
and
(2) the term ‘‘State bank’’ shall be deemed to
include any depository institution included in the
definition of such term in section 3(a)(2) of such
Act.
SEC. 2228. REPEAL OF HOME OWNERS’ LOAN ACT.
Effective January 1, 1998, the Home Owners’ Loan
Act (12 U.S.C. 1461 et seq.) is hereby repealed.
SEC. 2229. EFFECTIVE DATE; DEFINITIONS.
(a) EFFECTIVE
DATE
OF
AMENDMENTS.—The
amendments made by this chapter shall take effect on
January 1, 1998.
(b) DEFINITIONS.—For purposes of this chapter, the
terms ‘‘appropriate Federal banking agency’’, ‘‘bank hold-
ing company’’, ‘‘depository institution’’, ‘‘Federal savings
association’’, ‘‘insured depository institution’’, ‘‘savings
association’’, and ‘‘State bank’’ have the same meanings
as in section 3 of the Federal Deposit Insurance Act (as
in effect on the date of the enactment of this Act).
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CHAPTER 3—TRANSFER OF FUNCTIONS,
PERSONNEL, AND PROPERTY
SEC. 2241. OFFICE OF THRIFT SUPERVISION ABOLISHED.
Effective January 1, 1998, the Office of Thrift Su-
pervision and the position of Director of the Office of
Thrift Supervision are hereby abolished.
SEC. 2242. DETERMINATION OF TRANSFERRED FUNCTIONS
AND EMPLOYEES.
(a) ALL OFFICE OF THRIFT SUPERVISION EMPLOY-
EES SHALL BE TRANSFERRED.—All employees of the Of-
fice of Thrift Supervision shall be identified for transfer
under subsection (b) to the Office of the Comptroller of
the Currency, the Federal Deposit Insurance Corporation,
or the Board of Governors of the Federal Reserve System.
(b) FUNCTIONS AND EMPLOYEES TRANSFERRED.—
(1) IN GENERAL.—The Director of the Office of
Thrift Supervision, the Comptroller of the Currency,
the Chairperson of the Federal Deposit Insurance
Corporation, and the Chairman of the Board of Gov-
ernors of the Federal Reserve System shall jointly
determine the functions or activities of the Office of
Thrift Supervision, and the number of employees of
such Office necessary to perform or support such
functions or activities, which are transferred from
the Office to the Office of the Comptroller of the
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Currency, the Federal Deposit Insurance Corpora-
tion, or the Board of Governors of the Federal Re-
serve System, as the case may be.
(2) ALLOCATION OF EMPLOYEES.—The Comp-
troller of the Currency, the Chairperson of the Fed-
eral Deposit Insurance Corporation, and the Chair-
man of the Board of Governors of the Federal Re-
serve System shall allocate the employees of the Of-
fice of Thrift Supervision consistent with the num-
ber determined pursuant to paragraph (1) in a man-
ner which such Comptroller, Chairperson, and Chair-
man, in their sole discretion, deem equitable, except
that, within work units, the agency preferences of
individual employees shall be accommodated as far
as possible.
(c) DISPOSITION OF AFFAIRS.—
(1) IN GENERAL.—In winding up the affairs of
the Office of Thrift Supervision, the Director of the
Office of Thrift Supervision shall consult and co-
operate with the Comptroller of the Currency, the
Federal Deposit Insurance Corporation, and the
Board of Governors of the Federal Reserve System,
as the case may be, to facilitate the orderly transfer
of the functions to such Comptroller, Corporation, or
Board.
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(2) CONTINUING AUTHORITY OF DIRECTOR OF
THE OFFICE OF THRIFT SUPERVISION.—Except as
provided in paragraph (1), no provision of this sub-
title shall be construed as affecting the authority
vested in the Director of the Office of Thrift Super-
vision before the date of enactment of this Act which
is necessary to carry out the duties of the position
until the date upon which the position of Director of
the Office of Thrift Supervision is abolished.
(3) CONTINUATION
OF
AGENCY
SERVICES.—
Any agency, department, or other instrumentality of
the United States, or any successor to any such
agency, department, or instrumentality, which was
providing support services to the Director of the Of-
fice of Thrift Supervision on the day before the date
such position is abolished shall—
(A) continue to provide such services on a
reimbursable basis, in accordance with the
terms of the arrangement pursuant to which
such services were provided until the arrange-
ment is modified or terminated in accordance
with such terms, except that effective January
1, 1998, the Comptroller of the Currency, the
Federal Deposit Insurance Corporation, or the
Board of Governors of the Federal Reserve Sys-
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tem, as the case may be, shall be substituted
for the Director of the Office of Thrift Super-
vision as a party to the arrangement; and
(B) consult with the Comptroller, the Cor-
poration, or the Board to coordinate and facili-
tate a prompt and reasonable transition.
(d) TRANSFER OF PROPERTY.—Effective January 1,
1998, all property of the Office of Thrift Supervision shall
be transferred to the Comptroller of the Currency, the
Federal Deposit Insurance Corporation, or the Board of
Governors of the Federal Reserve System, as determined
in accordance with subsections (a) and (b).
SEC. 2243. SAVINGS PROVISIONS.
(a) EXISTING RIGHTS, DUTIES, AND OBLIGATIONS
NOT AFFECTED.—No provision of this title shall be con-
strued as affecting the validity of any right, duty, or obli-
gation of the United States, the Director of the Office of
Thrift Supervision, or any person, which existed on the
day before the date upon which the position of Director
of the Office of Thrift Supervision and the Office of Thrift
Supervision are abolished.
(b) CONTINUATION OF SUITS.—No action or other
proceeding commenced by or against the Director of the
Office of Thrift Supervision shall abate by reason of enact-
ment of this Act, except that, effective January 1, 1998,
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the Comptroller of the Currency, the Federal Deposit In-
surance Corporation, or the Board of Governors of the
Federal Reserve System, as the case may be, shall be sub-
stituted as a party to any such action or proceeding.
(c) CONTINUATION OF ADMINISTRATIVE RULES.—
All orders, resolutions, determinations, regulations, inter-
pretative rules, other interpretations, guidelines, proce-
dures, supervisory and enforcement actions, and other ad-
visory material (other than any regulation implementing
or prescribed pursuant to section 3(f) of the Home Own-
ers’ Loan Act (as in effect on September 13, 1995))
which—
(1) have been issued, made, prescribed, or per-
mitted to become effective by the Office of Thrift
Supervision, and
(2) are in effect on December 31, 1996, (or be-
come effective after such date pursuant to the terms
of the order, resolution, determination, rule, other
interpretation, guideline, procedure, supervisory or
enforcement action, and other advisory material, as
in effect on such date), shall—
(A) continue in effect according to the
terms of such orders, resolutions, determina-
tions, regulations, interpretative rules, other in-
terpretations, guidelines, procedures, super-
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visory or enforcement actions, or other advisory
material;
(B) be administered by the Comptroller of
the Currency, the Federal Deposit Insurance
Corporation, or the Board of Governors of the
Federal Reserve System; and
(C) be enforceable by or against the Comp-
troller of the Currency, the Federal Deposit In-
surance Corporation, or the Board of Governors
of the Federal Reserve System until modified,
terminated, set aside, or superseded in accord-
ance with applicable law by the Comptroller,
Corporation, or Board, by any court of com-
petent jurisdiction, or by operation of law.
(d) TREATMENT OF REFERENCES IN ADJUSTABLE
RATE MORTGAGES ISSUED BEFORE FIRREA.—For pur-
poses of section 402(e) of Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 1437
note), any reference in such section to—
(A) the Director of the Office of Thrift Su-
pervision shall be deemed to be a reference to
the Secretary of the Treasury; and
(B) a Savings Association Insurance Fund
member shall be deemed to be a reference to an
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insured depository institution (as defined in sec-
tion 3 of the Federal Deposit Insurance Act).
(e) TREATMENT OF REFERENCES IN ADJUSTABLE
RATE
MORTGAGE
INSTRUMENTS
ISSUED
AFTER
FIRREA.—
(1) IN GENERAL.—For purposes of adjustable
rate mortgage instruments that are in effect as of
the date of enactment of this Act, any reference in
the instrument to the Director of the Office of
Thrift Supervision or Savings Association Insurance
Fund members shall be treated as a reference to the
Secretary of the Treasury or insured depository in-
stitutions (as defined in section 3 of the Federal De-
posit Insurance Act), as appropriate.
(2) SUBSTITUTION FOR INDEXES.—If any index
used to calculate the applicable interest rate on any
adjustable rate mortgage instrument is no longer
calculated and made available as a direct or indirect
result of the enactment of this Act, any index—
(A) made available by the Secretary of the
Treasury; or
(B) determined by the Secretary of the
Treasury, pursuant to paragraph (4), to be sub-
stantially similar to the index which is no
longer calculated or made available,
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may be substituted by the holder of any such adjust-
able rate mortgage instrument upon notice to the
borrower.
(3) AGENCY
ACTION
REQUIRED
TO
PROVIDE
CONTINUED AVAILABILITY OF INDEXES.—Promptly
after the enactment of this subsection, the Secretary
of the Treasury, the Chairperson of the Federal De-
posit Insurance Corporation, and the Comptroller of
the Currency shall take such action as may be nec-
essary to assure that the indexes prepared by the
Director of the Office of Thrift Supervision imme-
diately prior to the enactment of this subsection and
used to calculate the interest rate on adjustable rate
mortgage instruments continue to be available.
(4) REQUIREMENTS RELATING TO SUBSTITUTE
INDEXES.—If any agency can no longer make avail-
able an index pursuant to paragraph (3), an index
that is substantially similar to such index may be
substituted for such index for purposes of paragraph
(2) if the Secretary of the Treasury determines,
after notice and opportunity for comment, that—
(A) the new index is based upon data sub-
stantially similar to that of the original index;
and