H. R. 2646—189
‘‘(A) GUIDANCE.—With respect to fiscal years 2003 and
2004, the Secretary shall establish, in guidance issued to
State agencies not later than October 1, 2002—
‘‘(i) performance criteria relating to—
‘‘(I) actions taken to correct errors, reduce
rates of error, and improve eligibility determina-
tions; and
‘‘(II) other indicators of effective administra-
tion determined by the Secretary; and
‘‘(ii) standards for high and most improved
performance to be used in awarding performance bonus
payments under subparagraph (B)(ii).
‘‘(B) PERFORMANCE BONUS PAYMENTS.—With respect to
each of fiscal years 2003 and 2004, the Secretary shall—
‘‘(i) measure the performance of each State agency
with respect to the criteria established under subpara-
graph (A)(i); and
‘‘(ii) subject to paragraph (3), award performance
bonus payments in the following fiscal year, in a total
amount of $48,000,000 for each fiscal year, to State
agencies that meet standards for high or most
improved performance established by the Secretary
under subparagraph (A)(ii).
‘‘(2) FISCAL YEARS 2005 AND THEREAFTER.—
‘‘(A) REGULATIONS.—With respect to fiscal year 2005
and each fiscal year thereafter, the Secretary shall—
‘‘(i) establish, by regulation, performance criteria
relating to—
‘‘(I) actions taken to correct errors, reduce
rates of error, and improve eligibility determina-
tions; and
‘‘(II) other indicators of effective administra-
tion determined by the Secretary;
‘‘(ii) establish, by regulation, standards for high
and most improved performance to be used in awarding
performance bonus payments under subparagraph
(B)(ii); and
‘‘(iii) before issuing proposed regulations to carry
out clauses (i) and (ii), solicit ideas for performance
criteria and standards for high and most improved
performance from State agencies and organizations
that represent State interests.
‘‘(B) PERFORMANCE BONUS PAYMENTS.—With respect to
fiscal year 2005 and each fiscal year thereafter, the Sec-
retary shall—
‘‘(i) measure the performance of each State agency
with respect to the criteria established under subpara-
graph (A)(i); and
‘‘(ii) subject to paragraph (3), award performance
bonus payments in the following fiscal year, in a total
amount of $48,000,000 for each fiscal year, to State
agencies that meet standards for high or most
improved performance established by the Secretary
under subparagraph (A)(ii).
‘‘(3) PROHIBITION ON RECEIPT OF PERFORMANCE BONUS PAY-
MENTS.—A State agency shall not be eligible for a performance
bonus payment with respect to any fiscal year for which the
H. R. 2646—190
State agency has a liability amount established under sub-
section (c)(1)(C).
‘‘(4) PAYMENTS NOT SUBJECT TO JUDICIAL REVIEW.—A deter-
mination by the Secretary whether, and in what amount, to
award a performance bonus payment under this subsection
shall not be subject to administrative or judicial review.’’.
(b) EFFECTIVE DATE.—The amendment made by this section
takes effect on the date of enactment of this Act.
SEC. 4121. EMPLOYMENT AND TRAINING PROGRAM.
(a) LEVELS OF FUNDING.—Section 16(h)(1) of the Food Stamp
Act of 1977 (7 U.S.C. 2025(h)(1)) is amended—
(1) in subparagraph (A), by striking clause (vii) and
inserting the following:
‘‘(vii) for each of fiscal years 2002 through 2007,
$90,000,000.’’;
(2) by striking subparagraph (B) and inserting the fol-
lowing:
‘‘(B) 
ALLOCATION.—Funds 
made 
available 
under
subparagraph (A) shall be made available to and reallo-
cated among State agencies under a reasonable formula
that—
‘‘(i) is determined and adjusted by the Secretary;
and
‘‘(ii) takes into account the number of individuals
who are not exempt from the work requirement under
section 6(o).’’; and
(3) by striking subparagraphs (E) through (G) and inserting
the following:
‘‘(E) ADDITIONAL
ALLOCATIONS
FOR
STATES
THAT
ENSURE AVAILABILITY OF WORK OPPORTUNITIES.—
‘‘(i) IN GENERAL.—In addition to the allocations
under subparagraph (A), from funds made available
under section 18(a)(1), the Secretary shall allocate not
more than $20,000,000 for each of fiscal years 2002
through 2007 to reimburse a State agency that is
eligible under clause (ii) for the costs incurred in
serving food stamp recipients who—
‘‘(I) are not eligible for an exception under
section 6(o)(3); and
‘‘(II) are placed in and comply with a program
described in subparagraph (B) or (C) of section
6(o)(2).
‘‘(ii) ELIGIBILITY.—To be eligible for an additional
allocation under clause (i), a State agency shall make
and comply with a commitment to offer a position
in a program described in subparagraph (B) or (C)
of section 6(o)(2) to each applicant or recipient who—
‘‘(I) is in the last month of the 3-month period
described in section 6(o)(2);
‘‘(II) is not eligible for an exception under sec-
tion 6(o)(3);
‘‘(III) is not eligible for a waiver under section
6(o)(4); and
‘‘(IV) is not exempt under section 6(o)(6).’’.
(b) CARRYOVER FUNDS.—Notwithstanding any other provision
of law, funds provided under section 16(h)(1)(A) of the Food Stamp
H. R. 2646—191
Act of 1977 (7 U.S.C. 2025(h)(1)(A)) for any fiscal year before
fiscal year 2002 shall be rescinded on the date of enactment of
this Act, unless obligated by a State agency before that date.
(c) PARTICIPANT EXPENSES.—Section 6(d)(4)(I)(i)(I) of the Food
Stamp Act of 1977 (7 U.S.C. 2015(d)(4)(I)(i)(I)) is amended by
striking ‘‘, except that the State agency may limit such reimburse-
ment to each participant to $25 per month’’.
(d) FEDERAL REIMBURSEMENT.—Section 16(h)(3) of the Food
Stamp Act of 1977 (7 U.S.C. 2025(h)(3)) is amended by striking
‘‘such total amount shall not exceed an amount representing $25
per participant per month for costs of transportation and other
actual costs (other than dependent care costs) and’’ and inserting
‘‘the amount of the reimbursement for dependent care expenses
shall not exceed’’.
(e) EFFECTIVE DATE.—The amendments made by this section
take effect on the date of enactment of this Act.
SEC. 4122. REAUTHORIZATION OF FOOD STAMP PROGRAM AND FOOD
DISTRIBUTION PROGRAM ON INDIAN RESERVATIONS.
(a) REDUCTIONS IN PAYMENTS FOR ADMINISTRATIVE COSTS.—
Section 16(k)(3) of the Food Stamp Act of 1977 (7 U.S.C. 2025(k)(3))
is amended—
(1) in the first sentence of subparagraph (A), by striking
‘‘2002’’ and inserting ‘‘2007’’; and
(2) in subparagraph (B)(ii), by striking ‘‘2002’’ and inserting
‘‘2007’’.
(b) CASH PAYMENT PILOT PROJECTS.—Section 17(b)(1)(B)(vi) of
the Food Stamp Act of 1977 (7 U.S.C. 2026(b)(1)(B)(vi)) is amended
by striking ‘‘2002’’ and inserting ‘‘2007’’.
(c) AUTHORIZATION OF APPROPRIATIONS.—Section 18(a)(1) of the
Food Stamp Act of 1977 (7 U.S.C. 2027(a)(1)) is amended in the
first sentence by striking ‘‘1996 through 2002’’ and inserting ‘‘2003
through 2007’’.
SEC. 4123. EXPANDED GRANT AUTHORITY.
(a) IN GENERAL.—Section 17(a)(1) of the Food Stamp Act of
1977 (7 U.S.C. 2026(a)(1)) is amended—
(1) by striking ‘‘, by way of making contracts with or
grants to public or private organizations or agencies,’’ and
inserting ‘‘enter into contracts with or make grants to public
or private organizations or agencies under this section to’’;
and
(2) by adding at the end the following: ‘‘The waiver
authority of the Secretary under subsection (b) shall extend
to all contracts and grants under this section.’’.
(b) EFFECTIVE DATE.—The amendments made by this section
take effect on the date of enactment of this Act.
SEC. 4124. CONSOLIDATED BLOCK GRANTS FOR PUERTO RICO AND
AMERICAN SAMOA.
(a) CONSOLIDATED FUNDING.—Section 19 of the Food Stamp
Act of 1977 (7 U.S.C. 2028) is amended—
(1) by striking the section heading and ‘‘(a)(1)(A) From’’
and all that follows through ‘‘(2) The’’ and inserting the fol-
lowing:
H. R. 2646—192
‘‘SEC. 19. CONSOLIDATED BLOCK GRANTS FOR PUERTO RICO AND
AMERICAN SAMOA.
‘‘(a) PAYMENTS TO GOVERNMENTAL ENTITIES.—
‘‘(1) DEFINITION OF GOVERNMENTAL ENTITY.—In this sub-
section, the term ‘governmental entity’ means—
‘‘(A) the Commonwealth of Puerto Rico; and
‘‘(B) American Samoa.
‘‘(2) BLOCK GRANTS.—
‘‘(A) AMOUNT
OF
BLOCK
GRANTS.—From the sums
appropriated under this Act, the Secretary shall, subject
to this section, pay to governmental entities to pay the
expenditures for nutrition assistance programs for needy
persons as described in subparagraphs (B) and (C)—
‘‘(i) for fiscal year 2003, $1,401,000,000; and
‘‘(ii) for each of fiscal years 2004 through 2007,
the amount specified in clause (i), as adjusted by the
percentage by which the thrifty food plan has been
adjusted under section 3(o)(4) between June 30, 2002,
and June 30 of the immediately preceding fiscal year.
‘‘(B) PAYMENTS TO COMMONWEALTH OF PUERTO RICO.—
‘‘(i) IN GENERAL.—For fiscal year 2003 and each
fiscal year thereafter, the Secretary shall use 99.6 per-
cent of the funds made available under subparagraph
(A) for payment to the Commonwealth of Puerto Rico
to pay—
‘‘(I) 100 percent of the expenditures by the
Commonwealth for the fiscal year for the provision
of nutrition assistance included in the plan of the
Commonwealth approved under subsection (b); and
‘‘(II) 50 percent of the related administrative
expenses.
‘‘(ii) EXCEPTION FOR EXPENDITURES FOR CERTAIN
SYSTEMS.—Notwithstanding clause (i), the Common-
wealth of Puerto Rico may spend in fiscal year 2002
or 2003 not more than $6,000,000 of the amount
required to be paid to the Commonwealth for fiscal
year 2002 under this paragraph (as in effect on the
day before the date of enactment of this clause) to
pay 100 percent of the costs of—
‘‘(I) upgrading and modernizing the electronic
data processing system used to carry out nutrition
assistance programs for needy persons;
‘‘(II) implementing systems to simplify the
determination of eligibility to receive the nutrition
assistance; and
‘‘(III) operating systems to deliver the nutri-
tion assistance through electronic benefit transfers.
‘‘(C) PAYMENTS TO AMERICAN SAMOA.—For fiscal year
2003 and each fiscal year thereafter, the Secretary shall
use 0.4 percent of the funds made available under subpara-
graph (A) for payment to American Samoa to pay 100
percent of the expenditures by American Samoa for a nutri-
tion assistance program extended under section 601(c) of
Public Law 96–597 (48 U.S.C. 1469d(c)).
‘‘(D) CARRYOVER OF FUNDS.—For fiscal year 2002 and
each fiscal year thereafter, not more than 2 percent of
the funds made available under this paragraph for the
H. R. 2646—193
fiscal year to each governmental entity may be carried
over to the following fiscal year.
‘‘(3) TIME AND MANNER OF PAYMENTS TO COMMONWEALTH
OF PUERTO RICO.—The’’;
(2) in subsection (b), by striking ‘‘subsection (a)(1)(A)’’ each
place it appears and inserting ‘‘subsection (a)(2)(B)’’; and
(3) in subsection (c), by striking ‘‘subsection (a)(1)(A)’’ each
place it appears and inserting ‘‘subsection (a)(2)(A)’’.
(b) CONFORMING AMENDMENT.—Section 24 of the Food Stamp
Act of 1977 (7 U.S.C. 2033) is repealed.
(c) APPLICABILITY.—
(1) IN GENERAL.—Except as provided in paragraph (2), the
amendments made by this section apply beginning on October
1, 2002.
(2) EXCEPTIONS.—Subparagraphs (B)(ii) and (D) of section
19(a)(2) of the Food Stamp Act of 1977 (as amended by sub-
section (a)(1)) apply beginning on the date of enactment of
this Act.
(d) EFFECTIVE DATE.—The amendments made by this section
take effect on the date of enactment of this Act.
SEC. 4125. ASSISTANCE FOR COMMUNITY FOOD PROJECTS.
(a) IN GENERAL.—Section 25 of the Food Stamp Act of 1977
(7 U.S.C. 2034) is amended—
(1) in subsection (a)—
(A) by striking ‘‘(1)’’ and inserting ‘‘(1)(A)’’;
(B) by redesignating paragraphs (2) and (3) as subpara-
graphs (B) and (C), respectively, of paragraph (1);
(C) in paragraph (1)(C) (as redesignated by subpara-
graph (B)), by striking the period at the end and inserting
‘‘; or’’; and
(D) by adding at the end the following:
‘‘(2) meet specific State, local, or neighborhood food and
agricultural needs, including needs for—
‘‘(A) infrastructure improvement and development;
‘‘(B) planning for long-term solutions; or
‘‘(C) the creation of innovative marketing activities that
mutually benefit agricultural producers and low-income
consumers.’’;
(2) in subsection (b)(2)(B)—
(A) by striking ‘‘$2,500,000’’ and inserting ‘‘$5,000,000’’;
and
(B) by striking ‘‘2002’’ and inserting ‘‘2007’’;
(3) in subsection (d), by striking paragraph (4) and inserting
the following:
‘‘(4) encourage long-term planning activities, and multi-
system, 
interagency 
approaches 
with 
multistakeholder
collaborations, that build the long-term capacity of communities
to address the food and agricultural problems of the commu-
nities, such as food policy councils and food planning associa-
tions.’’; and
(4) by striking subsection (h) and inserting the following:
‘‘(h) INNOVATIVE PROGRAMS FOR ADDRESSING COMMON COMMU-
NITY PROBLEMS.—
‘‘(1) IN GENERAL.—The Secretary shall offer to enter into
a contract with, or make a grant to, 1 nongovernmental
organization that meets the requirements of paragraph (2) to
H. R. 2646—194
coordinate with Federal agencies, States, political subdivisions,
and nongovernmental organizations (collectively referred to in
this subsection as ‘targeted entities’) to gather information,
and recommend to the targeted entities, innovative programs
for addressing common community problems, including—
‘‘(A) loss of farms and ranches;
‘‘(B) rural poverty;
‘‘(C) welfare dependency;
‘‘(D) hunger;
‘‘(E) the need for job training; and
‘‘(F) the need for self-sufficiency by individuals and
communities.
‘‘(2) NONGOVERNMENTAL
ORGANIZATION.—The nongovern-
mental organization referred to in paragraph (1) shall—
‘‘(A) be selected by the Secretary on a competitive
basis;
‘‘(B) be experienced in working with other targeted
entities and in organizing workshops that demonstrate pro-
grams to other targeted entities;
‘‘(C) be experienced in identifying programs that effec-
tively address community problems described in paragraph
(1) that can be implemented by other targeted entities;
‘‘(D) be experienced in, and capable of, receiving
information from and communicating with other targeted
entities throughout the United States;
‘‘(E) be experienced in operating a national information
clearinghouse that addresses 1 or more of the community
problems described in paragraph (1); and
‘‘(F) as a condition of entering into the contract or
receiving the grant referred to in paragraph (1), agree—
‘‘(i) 
to 
contribute 
in-kind 
resources 
toward
implementation of the contract or grant;
‘‘(ii) to provide to other targeted entities informa-
tion and guidance on the innovative programs referred
to in paragraph (1); and
‘‘(iii) to operate a national information clearing-
house on innovative means for addressing community
problems described in paragraph (1) that—
‘‘(I) is easily usable by—
‘‘(aa) Federal, State, and local government
agencies;
‘‘(bb) local community leaders;
‘‘(cc) nongovernmental organizations; and
‘‘(dd) the public; and
‘‘(II) includes information on approved commu-
nity food projects.
‘‘(3) AUDITS; EFFECTIVE USE OF FUNDS.—The Secretary shall
establish auditing procedures and otherwise ensure the effective
use of funds made available to carry out this subsection.
‘‘(4) FUNDING.—Not later than 90 days after the date of
enactment of this paragraph, and on October 1 of each of
fiscal years 2003 through 2007, the Secretary shall allocate
to carry out this subsection $200,000 of the funds made avail-
able under subsection (b), to remain available until expended.’’.
(b) EFFECTIVE DATE.—The amendments made by this section
take effect on the date of enactment of this Act.
H. R. 2646—195
SEC. 4126. AVAILABILITY OF COMMODITIES FOR THE EMERGENCY
FOOD ASSISTANCE PROGRAM.
(a) IN GENERAL.—Section 27(a) of the Food Stamp Act of 1977
(7 U.S.C. 2036(a)) is amended—
(1) by striking ‘‘1997 through 2002’’ and inserting ‘‘2002
through 2007’’; and
(2) by striking ‘‘$100,000,000’’ and inserting ‘‘$140,000,000’’.
(b) EFFECTIVE DATE.—The amendments made by this section
take effect on October 1, 2001.
Subtitle B—Commodity Distribution
SEC. 4201. COMMODITY SUPPLEMENTAL FOOD PROGRAM.
(a) COMMODITY DISTRIBUTION PROGRAM.—Section 4(a) of the
Agriculture and Consumer Protection Act of 1973 (7 U.S.C. 612c
note; Public Law 93–86) is amended in the first sentence by striking
‘‘2002’’ and inserting ‘‘2007’’.
(b) COMMODITY SUPPLEMENTAL FOOD PROGRAM.—Section 5 of
the Agriculture and Consumer Protection Act of 1973 (7 U.S.C.
612c note; Public Law 93–86) is amended—
(1) by striking subsection (a) and inserting the following:
‘‘(a) GRANTS PER ASSIGNED CASELOAD SLOT.—
‘‘(1) IN GENERAL.—In carrying out the program under sec-
tion 4 (referred to in this section as the ‘commodity supple-
mental food program’), for each of fiscal years 2003 through
2007, the Secretary shall provide to each State agency from
funds made available to carry out that section (including any
such funds remaining available from the preceding fiscal year),
a grant per assigned caseload slot for administrative costs
incurred by the State agency and local agencies in the State
in operating the commodity supplemental food program.
‘‘(2) AMOUNT OF GRANTS.—
‘‘(A) FISCAL
YEAR
2003.—For fiscal year 2003, the
amount of each grant per assigned caseload slot shall be
equal to the amount of the grant per assigned caseload
slot for administrative costs in 2001, adjusted by the
percentage change between—
‘‘(i) the value of the State and local government
price index, as published by the Bureau of Economic
Analysis of the Department of Commerce, for the 12-
month period ending June 30, 2001; and
‘‘(ii) the value of that index for the 12-month period
ending June 30, 2002.
‘‘(B) FISCAL YEARS 2004 THROUGH 2007.—For each of
fiscal years 2004 through 2007, the amount of each grant
per assigned caseload slot shall be equal to the amount
of the grant per assigned caseload slot for the preceding
fiscal year, adjusted by the percentage change between—
‘‘(i) the value of the State and local government
price index, as published by the Bureau of Economic
Analysis of the Department of Commerce, for the 12-
month period ending June 30 of the second preceding
fiscal year; and
‘‘(ii) the value of that index for the 12-month period
ending June 30 of the preceding fiscal year.’’;
H. R. 2646—196
(2) in subsection (d)(2), by striking ‘‘2002’’ each place it
appears and inserting ‘‘2007’’; and
(3) by striking subsection (l) and inserting the following:
‘‘(l) USE OF APPROVED FOOD SAFETY TECHNOLOGY.—
‘‘(1) IN GENERAL.—In acquiring commodities for distribution
through a program specified in paragraph (2), the Secretary
shall not prohibit the use of any technology to improve food
safety that—
‘‘(A) has been approved by the Secretary; or
‘‘(B) has been approved or is otherwise allowed by
the Secretary of Health and Human Services.
‘‘(2) PROGRAMS.—A program referred to in paragraph (1)
is a program authorized under—
‘‘(A) this Act;
‘‘(B) the Food Stamp Act of 1977 (7 U.S.C. 2011 et
seq.);
‘‘(C) the Emergency Food Assistance Act of 1983 (7
U.S.C. 7501 et seq.);
‘‘(D) the Richard B. Russell National School Lunch
Act (42 U.S.C. 1751 et seq.); or
‘‘(E) the Child Nutrition Act of 1966 (42 U.S.C. 1771
et seq.).’’.
(c) ADDITIONAL FUNDING FOR CERTAIN STATES.—
(1) IN GENERAL.—Not later than 30 days after the date
of enactment of this Act, of the funds of the Commodity Credit
Corporation, the Secretary of Agriculture shall make available
an amount equal to the amount that the Secretary of Agri-
culture determines to be necessary to permit each State that
began administering the commodity supplemental food program
under the Agriculture and Consumer Protection Act of 1973
(7 U.S.C. 612c note; Public Law 93–86) in the 2000 caseload
cycle to administer the program, through the 2002 caseload
cycle, at a caseload level that is not less than the originally
assigned caseload level of the State.
(2) PROVISION TO STATES.—The Secretary shall provide to
each State described in paragraph (1) for the purpose described
in that paragraph the funds made available under that para-
graph.
(d) EFFECTIVE DATE.—The amendment made by subsection
(b)(3) takes effect on the date of enactment of this Act.
SEC. 4202. COMMODITY DONATIONS.
(a) IN GENERAL.—The Commodity Distribution Reform Act and
WIC Amendments of 1987 (7 U.S.C. 612c note; Public Law 100–
237) is amended—
(1) by redesignating sections 17 and 18 as sections 18
and 19, respectively; and
(2) by inserting after section 16 the following:
‘‘SEC. 17. COMMODITY DONATIONS.
‘‘(a) IN GENERAL.—Notwithstanding any other provision of law
concerning commodity donations, any commodities acquired in the
conduct of the operations of the Commodity Credit Corporation
and any commodities acquired under section 32 of the Act of August
24, 1935 (7 U.S.C. 612c), to the extent that the commodities are
in excess of the quantities of commodities that are essential to
carry out other authorized activities of the Commodity Credit Cor-
poration and the Secretary (including any quantity specifically
H. R. 2646—197
reserved for a specific purpose), may be used for any program
authorized to be carried out by the Secretary that involves the
acquisition of commodities for use in a domestic feeding program,
including any program conducted by the Secretary that provides
commodities to individuals in cases of hardship.
‘‘(b) PROGRAMS.—A program described in subsection (a) includes
a program authorized by—
‘‘(1) the Emergency Food Assistance Act of 1983 (7 U.S.C.
7501 et seq.);
‘‘(2) the Richard B. Russell National School Lunch Act
(42 U.S.C. 1751 et seq.);
‘‘(3) the Child Nutrition Act of 1966 (42 U.S.C. 1771 et
seq.);
‘‘(4) the Older Americans Act of 1965 (42 U.S.C. 3001
et seq.); or
‘‘(5) such other laws as the Secretary determines to be
appropriate.’’.
(b) EFFECTIVE DATE.—The amendments made by this section
take effect on the date of enactment of this Act.
SEC. 4203. DISTRIBUTION OF SURPLUS COMMODITIES TO SPECIAL
NUTRITION PROJECTS.
Section 1114(a)(2)(A) of the Agriculture and Food Act of 1981
(7 U.S.C. 1431e(2)(A)) is amended in the first sentence by striking
‘‘2002’’ and inserting ‘‘2007’’.
SEC. 4204. EMERGENCY FOOD ASSISTANCE.
Section 204(a)(1) of the Emergency Food Assistance Act of
1983 (7 U.S.C. 7508(a)(1)) is amended in the first sentence—
(1) by striking ‘‘$50,000,000’’ and inserting ‘‘$60,000,000’’;
(2) by striking ‘‘1991 through 2002’’ and inserting ‘‘2003
through 2007’’;
(3) by striking ‘‘administrative’’;
(4) by inserting ‘‘storage,’’ after ‘‘processing,’’; and
(5) by inserting ‘‘, including commodities secured by
gleaning (as defined in section 111(a) of the Hunger Prevention
Act of 1988 (7 U.S.C. 612c note; Public Law 100–435))’’ after
‘‘sources’’.
Subtitle C—Child Nutrition and Related
Programs
SEC. 4301. COMMODITIES FOR SCHOOL LUNCH PROGRAM.
(a) IN GENERAL.—Section 6(e)(1)(B) of the Richard B. Russell
National School Lunch Act (42 U.S.C. 1755(e)(1)(B)) is amended
by striking ‘‘2001’’ and inserting ‘‘2003’’.
(b) EFFECTIVE DATE.—The amendment made by this section
takes effect on the date of enactment of this Act.
SEC. 4302. ELIGIBILITY FOR FREE AND REDUCED PRICE MEALS.
(a) IN GENERAL.—Section 9(b) of the Richard B. Russell
National School Lunch Act (42 U.S.C. 1758(b)) is amended by adding
at the end the following:
‘‘(7) EXCLUSION
OF
CERTAIN
MILITARY
HOUSING
ALLOW-
ANCES.—For each of fiscal years 2002 and 2003, the amount
of a basic allowance provided under section 403 of title 37,
H. R. 2646—198
United States Code, on behalf of a member of a uniformed
service for housing that is acquired or constructed under sub-
chapter IV of chapter 169 of title 10, United States Code,
or any related provision of law, shall not be considered to
be income for the purpose of determining the eligibility of
a child who is a member of the household of the member
of a uniformed service for free or reduced price lunches under
this Act.’’.
(b) EFFECTIVE DATE.—The amendment made by this section
takes effect on the date of enactment of this Act.
SEC. 4303. PURCHASES OF LOCALLY PRODUCED FOODS.
Section 9 of the Richard B. Russell National School Lunch
Act (42 U.S.C. 1758) is amended by adding at the end the following:
‘‘(j) PURCHASES OF LOCALLY PRODUCED FOODS.—
‘‘(1) IN GENERAL.—The Secretary shall—
‘‘(A) encourage institutions participating in the school
lunch program under this Act and the school breakfast
program established by section 4 of the Child Nutrition
Act of 1966 (42 U.S.C. 1773) to purchase, in addition to
other food purchases, locally produced foods for school meal
programs, to the maximum extent practicable and appro-
priate;
‘‘(B) advise institutions participating in a program
described in subparagraph (A) of the policy described in
that subparagraph and post information concerning the
policy on the website maintained by the Secretary; and
‘‘(C) in accordance with requirements established by
the Secretary, provide startup grants to not more than
200 institutions to defray the initial costs of equipment,
materials, and storage facilities, and similar costs, incurred
in carrying out the policy described in subparagraph (A).
‘‘(2) AUTHORIZATION OF APPROPRIATIONS.—
‘‘(A) IN GENERAL.—There is authorized to be appro-
priated to carry out this subsection $400,000 for each of
fiscal years 2003 through 2007, to remain available until
expended.
‘‘(B) LIMITATION.—No amounts may be made available
to carry out this subsection unless specifically provided
by an appropriation Act.’’.
SEC. 4304. APPLICABILITY OF BUY-AMERICAN REQUIREMENT TO
PUERTO RICO.
Section 12(n) of the Richard B. Russell National School Lunch
Act (42 U.S.C. 1760(n)) is amended by adding at the end the
following:
‘‘(4) APPLICABILITY TO PUERTO RICO.—Paragraph (2)(A) shall
apply to a school food authority in the Commonwealth of Puerto
Rico with respect to domestic commodities or products that
are produced in the Commonwealth of Puerto Rico in sufficient
quantities to meet the needs of meals provided under the school
lunch program under this Act or the school breakfast program
under section 4 of the Child Nutrition Act of 1966 (42 U.S.C.
1773).’’.
H. R. 2646—199
SEC. 4305. FRUIT AND VEGETABLE PILOT PROGRAM.
(a) IN GENERAL.—Section 18 of the Richard B. Russell National
School Lunch Act (42 U.S.C. 1769) is amended by adding at the
end the following:
‘‘(g) FRUIT AND VEGETABLE PILOT PROGRAM.—
‘‘(1) IN GENERAL.—In the school year beginning July 2002,
the Secretary shall carry out a pilot program to make available
to students in 25 elementary or secondary schools in each
of 4 States, and in elementary or secondary schools on 1 Indian
reservation, free fresh and dried fruits and fresh vegetables
throughout the school day in 1 or more areas designated by
the school.
‘‘(2) PUBLICITY.—A school that participates in the pilot
program shall widely publicize within the school the availability
of free fruits and vegetables under the pilot program.
‘‘(3) REPORT.—Not later than May 1, 2003, the Secretary,
acting through the Administrator of the Economic Research
Service, shall report to the Committee on Education and the
Workforce of the House of Representatives and the Committee
on Agriculture, Nutrition, and Forestry of the Senate on the
results of the pilot program.
‘‘(4) FUNDING.—The Secretary shall use not more than
$6,000,000 of funds made available under section 32 of the
Act of August 24, 1935 (7 U.S.C. 612c), to carry out this sub-
section (other than paragraph (3)).’’.
(b) EFFECTIVE DATE.—The amendment made by this section
takes effect on the date of enactment of this Act.
SEC. 4306. ELIGIBILITY FOR ASSISTANCE UNDER THE SPECIAL
SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN,
INFANTS, AND CHILDREN.
(a) IN GENERAL.—Section 17(d)(2)(B)(i) of the Child Nutrition
Act of 1966 (42 U.S.C. 1786(d)(2)(B)(i)) is amended—
(1) by striking ‘‘basic allowance for housing’’ and inserting
the following: ‘‘basic allowance—
‘‘(I) for housing’’;
(2) by striking ‘‘and’’ at the end and inserting ‘‘or’’; and
(3) by adding at the end the following:
‘‘(II) provided under section 403 of title 37, United
States Code, for housing that is acquired or constructed
under subchapter IV of chapter 169 of title 10, United
States Code, or any related provision of law; and’’.
(b) EFFECTIVE DATE.—The amendments made by this section
take effect on the date of enactment of this Act.
SEC. 4307. WIC FARMERS’ MARKET NUTRITION PROGRAM.
(a) IN GENERAL.—Section 17(m)(9) of the Child Nutrition Act
of 1966 (42 U.S.C. 1786(m)(9)) is amended—
(1) by striking ‘‘(9)(A) There’’ and inserting the following:
‘‘(9) FUNDING.—
‘‘(A) IN GENERAL.—
‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There’’;
and
(2) in subparagraph (A), by adding at the end the following:
‘‘(ii) MANDATORY FUNDING.—Not later than 30 days
after the date of enactment of the Food Stamp
H. R. 2646—200
Reauthorization Act of 2002, of the funds of the Com-
modity Credit Corporation, the Secretary shall make
available to carry out this subsection $15,000,000, to
remain available until expended.’’.
(b) EFFECTIVE DATE.—The amendments made by this section
take effect on the date of enactment of this Act.
Subtitle D—Miscellaneous
SEC. 
4401. 
PARTIAL 
RESTORATION 
OF 
BENEFITS 
TO 
LEGAL
IMMIGRANTS.
(a) RESTORATION OF BENEFITS TO DISABLED ALIENS.—Section
402(a)(2)(F) of the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2)(F)) is amended by
striking ‘‘(i) was’’ and all that follows through ‘‘(II) in the case’’
and inserting the following:
‘‘(i) in the case of the specified Federal program
described in paragraph (3)(A)—
‘‘(I) was lawfully residing in the United States
on August 22, 1996; and
‘‘(II) is blind or disabled (as defined in para-
graph (2) or (3) of section 1614(a) of the Social
Security Act (42 U.S.C. 1382c(a))); and
‘‘(ii) in the case’’.
(b) RESTORATION OF BENEFITS TO ALL QUALIFIED ALIEN CHIL-
DREN.—
(1) IN
GENERAL.—Section 402(a)(2)(J) of the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996
(8 U.S.C. 1612(a)(2)(J)) is amended by striking ‘‘who’’ and all
that follows through ‘‘is under’’ and inserting ‘‘who is under’’.
(2) CONFORMING AMENDMENTS.—
(A) Section 403(c)(2) of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (8 U.S.C.
1613(c)(2)) is amended by adding at the end the following:
‘‘(L) Assistance or benefits provided to individuals
under the age of 18 under the Food Stamp Act of 1977
(7 U.S.C. 2011 et seq.).’’.
(B) Section 421(d) of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (8 U.S.C.
1631(d)) is amended by adding at the end the following:
‘‘(3) This section shall not apply to assistance or benefits
under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.)
to the extent that a qualified alien is eligible under section
402(a)(2)(J).’’.
(C) Section 5(i)(2)(E) of the Food Stamp Act of 1977
(7 U.S.C. 2014(i)(2)(E)) is amended by inserting before the
period at the end the following: ‘‘, or to any alien who
is under 18 years of age’’.
(3) EFFECTIVE DATE.—The amendments made by this sub-
section take effect on October 1, 2003.
(c) FOOD STAMP EXCEPTION FOR CERTAIN QUALIFIED ALIENS.—
(1) IN GENERAL.—Section 402(a)(2) of the Personal Respon-
sibility and Work Opportunity Reconciliation Act of 1996 (8
U.S.C. 1612(a)(2)) is amended by adding at the end the fol-
lowing:
H. R. 2646—201
‘‘(L) FOOD STAMP EXCEPTION FOR CERTAIN QUALIFIED
ALIENS.—With respect to eligibility for benefits for the
specified Federal program described in paragraph (3)(B),
paragraph (1) shall not apply to any qualified alien who
has resided in the United States with a status within
the meaning of the term ‘qualified alien’ for a period of
5 years or more beginning on the date of the alien’s entry
into the United States.’’.
(2) EFFECTIVE DATE.—The amendment made by paragraph
(1) takes effect on April 1, 2003.
SEC. 4402. SENIORS FARMERS’ MARKET NUTRITION PROGRAM.
(a) ESTABLISHMENT.—The Secretary of Agriculture shall use
$5,000,000 for fiscal year 2002, and $15,000,000 for each of fiscal
years 2003 through 2007, of the funds available to the Commodity
Credit Corporation to carry out and expand a seniors farmers’
market nutrition program.
(b) PROGRAM PURPOSES.—The purposes of the seniors farmers’
market nutrition program are—
(1) to provide resources in the form of fresh, nutritious,
unprepared, locally grown fruits, vegetables, and herbs from
farmers’ markets, roadside stands, and community supported
agriculture programs to low-income seniors;
(2) to increase the domestic consumption of agricultural
commodities by expanding or aiding in the expansion of
domestic farmers’ markets, roadside stands, and community
supported agriculture programs; and
(3) to develop or aid in the development of new and addi-
tional farmers’ markets, roadside stands, and community sup-
ported agriculture programs.
(c) REGULATIONS.—The Secretary may issue such regulations
as the Secretary considers necessary to carry out the seniors
farmers’ market nutrition program.
SEC. 4403. NUTRITION INFORMATION AND AWARENESS PILOT PRO-
GRAM.
(a) ESTABLISHMENT.—The Secretary of Agriculture may estab-
lish, in not more than 5 States, for a period not to exceed 4
years for each participating State, a pilot program to increase
the domestic consumption of fresh fruits and vegetables.
(b) PURPOSE.—
(1) IN GENERAL.—Subject to paragraph (2), the purpose
of the program shall be to provide funds to States solely for
the purpose of assisting eligible public and private sector enti-
ties with cost-share assistance to carry out demonstration
projects—
(A) to increase fruit and vegetable consumption; and
(B) to convey related health promotion messages.
(2) LIMITATION.—Funds made available to a State under
the program shall not be used to disparage any agricultural
commodity.
(c) SELECTION OF STATES.—
(1) IN GENERAL.—In selecting States to participate in the
program, the Secretary shall take into consideration, with
respect to projects and activities proposed to be carried out
under the program—
(A) experience in carrying out similar projects or activi-
ties;
H. R. 2646—202
(B) innovative approaches; and
(C) the ability of the State to promote and track
increases in levels of fruit and vegetable consumption.
(2) ENHANCEMENT OF EXISTING STATE PROGRAMS.—The Sec-
retary may use the pilot program to enhance existing State
programs that are consistent with the purpose of the pilot
program specified in subsection (b).
(d) ELIGIBLE PUBLIC AND PRIVATE SECTOR ENTITIES.—
(1) IN GENERAL.—A participating State shall establish eligi-
bility criteria under which the State may select public and
private sector entities to carry out demonstration projects under
the program.
(2) LIMITATION.—No funds made available to States under
the program shall be provided by a State to any foreign for-
profit corporation.
(e) FEDERAL SHARE.—The Federal share of the cost of any
project or activity carried out using funds provided under this
section shall be 50 percent.
(f) AUTHORIZATION OF APPROPRIATIONS.—There is authorized
to be appropriated to carry out this section $10,000,000 for each
of fiscal years 2002 through 2007.
SEC. 4404. HUNGER FELLOWSHIP PROGRAM.
(a) SHORT TITLE; FINDINGS.—
(1) SHORT
TITLE.—This section may be cited as the
‘‘Congressional Hunger Fellows Act of 2002’’.
(2) FINDINGS.—The Congress finds as follows:
(A) There is a critical need for compassionate individ-
uals who are committed to assisting people who suffer
from hunger as well as a need for such individuals to
initiate and administer solutions to the hunger problem.
(B) Bill Emerson, the distinguished late Representative
from the 8th District of Missouri, demonstrated his commit-
ment to solving the problem of hunger in a bipartisan
manner, his commitment to public service, and his great
affection for the institution and the ideals of the United
States Congress.
(C) George T. (Mickey) Leland, the distinguished late
Representative from the 18th District of Texas, dem-
onstrated his compassion for those in need, his high regard
for public service, and his lively exercise of political talents.
(D) The special concern that Mr. Emerson and Mr.
Leland demonstrated during their lives for the hungry
and poor was an inspiration for others to work toward
the goals of equality and justice for all.
(E) These two outstanding leaders maintained a special
bond of friendship regardless of political affiliation and
worked together to encourage future leaders to recognize
and provide service to others, and therefore it is especially
appropriate to honor the memory of Mr. Emerson and
Mr. Leland by creating a fellowship program to develop
and train the future leaders of the United States to pursue
careers in humanitarian service.
(b) ESTABLISHMENT.—There is established as an independent
entity of the legislative branch of the United States Government
the Congressional Hunger Fellows Program (hereinafter in this
section referred to as the ‘‘Program’’).
H. R. 2646—203
(c) BOARD OF TRUSTEES.—
(1) IN
GENERAL.—The Program shall be subject to the
supervision and direction of a Board of Trustees.
(2) MEMBERS OF THE BOARD OF TRUSTEES.—
(A) APPOINTMENT.—The Board shall be composed of
6 voting members appointed under clause (i) and one non-
voting ex officio member designated in clause (ii) as follows:
(i) VOTING
MEMBERS.—(I) The Speaker of the
House of Representatives shall appoint two members.
(II) The minority leader of the House of Represent-
atives shall appoint one member.
(III) The majority leader of the Senate shall
appoint two members.
(IV) The minority leader of the Senate shall
appoint one member.
(ii) NONVOTING MEMBER.—The Executive Director
of the program shall serve as a nonvoting ex officio
member of the Board.
(B) TERMS.—Members of the Board shall serve a term
of 4 years.
(C) VACANCY.—
(i) AUTHORITY OF BOARD.—A vacancy in the mem-
bership of the Board does not affect the power of the
remaining members to carry out this section.
(ii) APPOINTMENT OF SUCCESSORS.—A vacancy in
the membership of the Board shall be filled in the
same manner in which the original appointment was
made.
(iii) INCOMPLETE TERM.—If a member of the Board
does not serve the full term applicable to the member,
the individual appointed to fill the resulting vacancy
shall be appointed for the remainder of the term of
the predecessor of the individual.
(D) CHAIRPERSON.—As the first order of business of
the first meeting of the Board, the members shall elect
a Chairperson.
(E) COMPENSATION.—
(i) IN GENERAL.—Subject to clause (ii), members
of the Board may not receive compensation for service
on the Board.
(ii) TRAVEL.—Members of the Board may be
reimbursed for travel, subsistence, and other necessary
expenses incurred in carrying out the duties of the
program.
(3) DUTIES.—
(A) BYLAWS.—
(i) ESTABLISHMENT.—The Board shall establish
such bylaws and other regulations as may be appro-
priate to enable the Board to carry out this section,
including the duties described in this paragraph.
(ii) CONTENTS.—Such bylaws and other regulations
shall include provisions—
(I) 
for 
appropriate 
fiscal 
control, 
funds
accountability, and operating principles;
(II) to prevent any conflict of interest, or the
appearance of any conflict of interest, in the
procurement and employment actions taken by the
H. R. 2646—204
Board or by any officer or employee of the Board
and in the selection and placement of individuals
in the fellowships developed under the program;
(III) for the resolution of a tie vote of the
members of the Board; and
(IV) for authorization of travel for members
of the Board.
(iii) TRANSMITTAL TO CONGRESS.—Not later than
90 days after the date of the first meeting of the
Board, the Chairperson of the Board shall transmit
to the appropriate congressional committees a copy
of such bylaws.
(B) BUDGET.—For each fiscal year the program is in
operation, the Board shall determine a budget for the pro-
gram for that fiscal year. All spending by the program
shall be pursuant to such budget unless a change is
approved by the Board.
(C) PROCESS FOR SELECTION AND PLACEMENT OF FEL-
LOWS.—The Board shall review and approve the process
established by the Executive Director for the selection and
placement of individuals in the fellowships developed under
the program.
(D) ALLOCATION
OF
FUNDS
TO
FELLOWSHIPS.—The
Board of Trustees shall determine the priority of the pro-
grams to be carried out under this section and the amount
of funds to be allocated for the Emerson and Leland fellow-
ships.
(d) PURPOSES; AUTHORITY OF PROGRAM.—
(1) PURPOSES.—The purposes of the program are—
(A) to encourage future leaders of the United States
to pursue careers in humanitarian service, to recognize
the needs of people who are hungry and poor, and to
provide assistance and compassion for those in need;
(B) to increase awareness of the importance of public
service; and
(C) to provide training and development opportunities
for such leaders through placement in programs operated
by appropriate organizations or entities.
(2) AUTHORITY.—The program is authorized to develop such
fellowships to carry out the purposes of this section, including
the fellowships described in paragraph (3).
(3) FELLOWSHIPS.—
(A) IN
GENERAL.—The program shall establish and
carry out the Bill Emerson Hunger Fellowship and the
Mickey Leland Hunger Fellowship.
(B) CURRICULUM.—
(i) IN GENERAL.—The fellowships established under
subparagraph (A) shall provide experience and training
to develop the skills and understanding necessary to
improve the humanitarian conditions and the lives of
individuals who suffer from hunger, including—
(I) training in direct service to the hungry
in conjunction with community-based organiza-
tions through a program of field placement; and
(II) experience in policy development through
placement in a governmental entity or nonprofit
organization.
H. R. 2646—205
(ii) FOCUS
OF
BILL
EMERSON
HUNGER
FELLOW-
SHIP.—The Bill Emerson Hunger Fellowship shall
address hunger and other humanitarian needs in the
United States.
(iii) FOCUS OF MICKEY LELAND HUNGER FELLOW-
SHIP.—The Mickey Leland Hunger Fellowship shall
address international hunger and other humanitarian
needs.
(iv) WORKPLAN.—To carry out clause (i) and to
assist in the evaluation of the fellowships under para-
graph (4), the program shall, for each fellow, approve
a work plan that identifies the target objectives for
the fellow in the fellowship, including specific duties
and responsibilities related to those objectives.
(C) PERIOD OF FELLOWSHIP.—
(i) EMERSON
FELLOW.—A Bill Emerson Hunger
Fellowship awarded under this paragraph shall be for
no more than 1 year.
(ii) LELAND
FELLOW.—A Mickey Leland Hunger
Fellowship awarded under this paragraph shall be for
no more than 2 years. Not less than 1 year of the
fellowship shall be dedicated to fulfilling the require-
ment of subparagraph (B)(i)(I).
(D) SELECTION OF FELLOWS.—
(i) IN GENERAL.—A fellowship shall be awarded
pursuant to a nationwide competition established by
the program.
(ii) QUALIFICATION.—A successful applicant shall
be an individual who has demonstrated—
(I) an intent to pursue a career in humani-
tarian service and outstanding potential for such
a career;
(II) leadership potential or actual leadership
experience;
(III) diverse life experience;
(IV) proficient writing and speaking skills;
(V) an ability to live in poor or diverse commu-
nities; and
(VI) such other attributes as determined to
be appropriate by the Board.
(iii) AMOUNT OF AWARD.—
(I) IN GENERAL.—Each individual awarded a
fellowship under this paragraph shall receive a
living allowance and, subject to subclause (II), an
end-of-service award as determined by the pro-
gram.
(II) REQUIREMENT FOR SUCCESSFUL COMPLE-
TION
OF
FELLOWSHIP.—Each individual awarded
a fellowship under this paragraph shall be entitled
to receive an end-of-service award at an appro-
priate rate for each month of satisfactory service
as determined by the Executive Director.
(iv) RECOGNITION OF FELLOWSHIP AWARD.—
(I) EMERSON FELLOW.—An individual awarded
a fellowship from the Bill Emerson Hunger Fellow-
ship shall be known as an ‘‘Emerson Fellow’’.
H. R. 2646—206
(II) LELAND FELLOW.—An individual awarded
a fellowship from the Mickey Leland Hunger
Fellowship shall be known as a ‘‘Leland Fellow’’.
(4) EVALUATION.—The program shall conduct periodic
evaluations of the Bill Emerson and Mickey Leland Hunger
Fellowships. Such evaluations shall include the following:
(A) An assessment of the successful completion of the
work plan of the fellow.
(B) An assessment of the impact of the fellowship
on the fellows.
(C) An assessment of the accomplishment of the pur-
poses of the program.
(D) An assessment of the impact of the fellow on the
community.
(e) TRUST FUND.—
(1) ESTABLISHMENT.—There is established the Congres-
sional Hunger Fellows Trust Fund (hereinafter in this section
referred to as the ‘‘Fund’’) in the Treasury of the United States,
consisting of amounts appropriated to the Fund under sub-
section (i), amounts credited to it under paragraph (3), and
amounts received under subsection (g)(3)(A).
(2) INVESTMENT OF FUNDS.—The Secretary of the Treasury
shall invest the full amount of the Fund. Each investment
shall be made in an interest bearing obligation of the United
States or an obligation guaranteed as to principal and interest
by the United States that, as determined by the Secretary
in consultation with the Board, has a maturity suitable for
the Fund.
(3) RETURN ON INVESTMENT.—Except as provided in sub-
section (f)(2), the Secretary of the Treasury shall credit to
the Fund the interest on, and the proceeds from the sale or
redemption of, obligations held in the Fund.
(f) EXPENDITURES; AUDITS.—
(1) IN
GENERAL.—The Secretary of the Treasury shall
transfer to the program from the amounts described in sub-
section (e)(3) and subsection (g)(3)(A) such sums as the Board
determines are necessary to enable the program to carry out
the provisions of this section.
(2) LIMITATION.—The Secretary may not transfer to the
program the amounts appropriated to the Fund under sub-
section (i).
(3) USE
OF
FUNDS.—Funds transferred to the program
under paragraph (1) shall be used for the following purposes:
(A) STIPENDS FOR FELLOWS.—To provide for a living
allowance for the fellows.
(B) TRAVEL
OF
FELLOWS.—To defray the costs of
transportation of the fellows to the fellowship placement
sites.
(C) INSURANCE.—To defray the costs of appropriate
insurance of the fellows, the program, and the Board.
(D) TRAINING
OF
FELLOWS.—To defray the costs of
preservice and midservice education and training of fellows.
(E) SUPPORT STAFF.—Staff described in subsection (g).
(F) AWARDS.—End-of-service awards under subsection
(d)(3)(D)(iii)(II).
H. R. 2646—207
(G) ADDITIONAL APPROVED USES.—For such other pur-
poses that the Board determines appropriate to carry out
the program.
(4) AUDIT BY GAO.—
(A) IN
GENERAL.—The Comptroller General of the
United States shall conduct an annual audit of the accounts
of the program.
(B) BOOKS.—The program shall make available to the
Comptroller General all books, accounts, financial records
(including records of salaries of the Executive Director and
other personnel), reports, files, and all other papers, things,
or property belonging to or in use by the program and
necessary to facilitate such audit.
(C) REPORT TO CONGRESS.—The Comptroller General
shall submit a copy of the results of each such audit to
the appropriate congressional committees.
(g) STAFF; POWERS OF PROGRAM.—
(1) EXECUTIVE DIRECTOR.—
(A) IN GENERAL.—The Board shall appoint an Execu-
tive Director of the program who shall administer the
program. The Executive Director shall carry out such other
functions consistent with the provisions of this section as
the Board shall prescribe.
(B) RESTRICTION.—The Executive Director may not
serve as Chairperson of the Board.
(C) COMPENSATION.—The Executive Director shall be
paid at a rate not to exceed the rate of basic pay payable
for level V of the Executive Schedule under section 5316
of title 5, United States Code.
(2) STAFF.—
(A) IN GENERAL.—With the approval of a majority of
the Board, the Executive Director may appoint and fix
the pay of additional personnel as the Executive Director
considers necessary and appropriate to carry out the func-
tions of the provisions of this section.
(B) COMPENSATION.—An individual appointed under
subparagraph (A) shall be paid at a rate not to exceed
the rate of basic pay payable for level GS–15 of the General
Schedule.
(3) POWERS.—In order to carry out the provisions of this
section, the program may perform the following functions:
(A) GIFTS.—The program may solicit, accept, use, and
dispose of gifts, bequests, or devises of services or property,
both real and personal, for the purpose of aiding or facili-
tating the work of the program. Gifts, bequests, or devises
of money and proceeds from sales of other property received
as gifts, bequests, or devises shall be deposited in the
Fund and shall be available for disbursement upon order
of the Board.
(B) EXPERTS
AND
CONSULTANTS.—The program may
procure temporary and intermittent services under section
3109 of title 5, United States Code, but at rates for individ-
uals not to exceed the daily equivalent of the maximum
annual rate of basic pay payable for GS–15 of the General
Schedule.
(C) CONTRACT AUTHORITY.—The program may contract,
with the approval of a majority of the members of the
H. R. 2646—208
Board, with and compensate Government and private agen-
cies or persons without regard to section 3709 of the
Revised Statutes (41 U.S.C. 5).
(D) OTHER NECESSARY EXPENDITURES.—The program
shall make such other expenditures which the program
considers necessary to carry out the provisions of this sec-
tion, but excluding project development.
(h) REPORT.—Not later than December 31 of each year, the
Board shall submit to the appropriate congressional committees
a report on the activities of the program carried out during the
previous fiscal year, and shall include the following:
(1) An analysis of the evaluations conducted under sub-
section (d)(4) (relating to evaluations of the Emerson and
Leland fellowships and accomplishment of the program pur-
poses) during that fiscal year.
(2) A statement of the total amount of funds attributable
to gifts received by the program in that fiscal year (as author-
ized under subsection (g)(3)(A)), and the total amount of such
funds that were expended to carry out the program that fiscal
year.
(i) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated $18,000,000 to carry out the provisions of this
section.
(j) DEFINITION.—In this section, the term ‘‘appropriate congres-
sional committees’’ means—
(1) the Committee on Agriculture and the Committee on
International Relations of the House of Representatives; and
(2) the Committee on Agriculture, Nutrition, and Forestry
and the Committee on Foreign Relations of the Senate.
SEC. 4405. GENERAL EFFECTIVE DATE.
Except as otherwise provided in this title, the amendments
made by this title take effect on October 1, 2002.
TITLE V—CREDIT
Subtitle A—Farm Ownership Loans
SEC. 5001. DIRECT LOANS.
Section 302(b)(1) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1922(b)(1)) is amended by striking ‘‘operated’’
and inserting ‘‘participated in the business operations of’’.
SEC. 5002. FINANCING OF BRIDGE LOANS.
Section 303(a)(1) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1923(a)(1)) is amended—
(1) in subparagraph (C), by striking ‘‘or’’ at the end;
(2) in subparagraph (D), by striking the period at the
end and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(E) refinancing a temporary bridge loan made by a
commercial or cooperative lender to a farmer or rancher
for the acquisition of land for a farm or ranch, if—
‘‘(i) the Secretary approved an application for a
direct farm ownership loan to the farmer or rancher
for acquisition of the land; and
H. R. 2646—209
‘‘(ii) funds for direct farm ownership loans under
section 346(b) were not available at the time at which
the application was approved.’’.
SEC. 5003. AMOUNT OF GUARANTEE OF LOANS FOR FARM OPERATIONS
ON TRIBAL LANDS.
Section 309(h) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1929(h)) is amended—
(1) in paragraph (4), by striking ‘‘paragraphs (5) and (6)’’
and inserting ‘‘paragraphs (5), (6), and (7)’’; and
(2) by adding at the end the following:
‘‘(7) AMOUNT OF GUARANTEE OF LOANS FOR FARM OPER-
ATIONS ON TRIBAL LANDS.—In the case of an operating loan
made to a farmer or rancher whose farm or ranch land is
subject to the jurisdiction of an Indian tribe and whose loan
is secured by 1 or more security instruments that are subject
to the jurisdiction of an Indian tribe, the Secretary shall guar-
antee 95 percent of the loan.’’.
SEC. 5004. GUARANTEE OF LOANS MADE UNDER STATE BEGINNING
FARMER OR RANCHER PROGRAMS.
Section 309 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1929) is amended by adding at the end the following:
‘‘(j) GUARANTEE
OF LOANS MADE UNDER STATE BEGINNING
FARMER OR RANCHER PROGRAMS.—The Secretary may guarantee
under this title a loan made under a State beginning farmer or
rancher program, including a loan financed by the net proceeds
of a qualified small issue agricultural bond for land or property
described in section 144(a)(12)(B)(ii) of the Internal Revenue Code
of 1986.’’.
SEC. 5005. DOWN PAYMENT LOAN PROGRAM.
Section 310E of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1935) is amended—
(1) in subsection (b)—
(A) in paragraph (1), by striking ‘‘30 percent’’ and
inserting ‘‘40 percent’’; and
(B) in paragraph (3), by striking ‘‘10 years’’ and
inserting ‘‘15 years’’; and
(2) in subsection (c)(3)(B), by striking ‘‘10-year’’ and
inserting ‘‘15-year’’.
SEC. 5006. BEGINNING FARMER AND RANCHER CONTRACT LAND SALES
PROGRAM.
Subtitle A of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1922 et seq.) is amended by adding at the end
the following:
‘‘SEC. 310F. BEGINNING FARMER AND RANCHER CONTRACT LAND
SALES PROGRAM.
‘‘(a) IN GENERAL.—If the Secretary makes a determination that
the risk is comparable under subsection (b), the Secretary shall
carry out a pilot program in not fewer than 5 States, as determined
by the Secretary, to guarantee up to 5 loans per State in each
of fiscal years 2003 through 2007 made by a private seller of
a farm or ranch to a qualified beginning farmer or rancher on
a contract land sale basis, if the loan meets applicable underwriting
H. R. 2646—210
criteria and a commercial lending institution agrees to serve as
escrow agent.
‘‘(b) DATE OF COMMENCEMENT OF PROGRAM.—Not later than
October 1, 2002, the Secretary shall make a determination on
whether guarantees of contract land sales present a risk that is
comparable with the risk presented in the case of guarantees to
commercial lenders.’’.
Subtitle B—Operating Loans
SEC. 5101. DIRECT LOANS.
Section 311(c) of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1941(c)) is amended—
(1) in paragraph (1)—
(A) in the matter that precedes subparagraph (A), by
striking ‘‘paragraph (3)’’ and inserting ‘‘paragraphs (3) and
(4)’’; and
(B) in subparagraph (A), by striking ‘‘who has not’’
and all that follows through ‘‘5 years’’; and
(2) by adding at the end the following:
‘‘(4) WAIVERS.—
‘‘(A) FARM AND RANCH OPERATIONS ON TRIBAL LANDS.—
The Secretary shall waive the limitation under paragraph
(1)(C) or (3) for a direct loan made under this subtitle
to a farmer or rancher whose farm or ranch land is subject
to the jurisdiction of an Indian tribe and whose loan is
secured by 1 or more security instruments that are subject
to the jurisdiction of an Indian tribe if the Secretary deter-
mines that commercial credit is not generally available
for such farm or ranch operations.
‘‘(B) OTHER FARM AND RANCH OPERATIONS.—On a case-
by-case determination not subject to administrative appeal,
the Secretary may grant a borrower a waiver, 1 time only
for a period of 2 years, of the limitation under paragraph
(1)(C) or (3) for a direct operating loan if the borrower
demonstrates to the satisfaction of the Secretary that—
‘‘(i) the borrower has a viable farm or ranch oper-
ation;
‘‘(ii) the borrower applied for commercial credit
from at least 2 commercial lenders;
‘‘(iii) the borrower was unable to obtain a commer-
cial loan (including a loan guaranteed by the Sec-
retary); and
‘‘(iv) the borrower successfully has completed, or
will complete within 1 year, borrower training under
section 359 (from which requirement the Secretary
shall not grant a waiver under section 359(f)).’’.
SEC. 5102. SUSPENSION OF LIMITATION ON PERIOD FOR WHICH BOR-
ROWERS ARE ELIGIBLE FOR GUARANTEED ASSISTANCE.
During the period beginning January 1, 2002, and ending
December 31, 2006, section 319(b) of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1949(b)) shall have no force or
effect.
H. R. 2646—211
Subtitle C—Emergency Loans
SEC. 5201. EMERGENCY LOANS IN RESPONSE TO AN EMERGENCY
RESULTING FROM QUARANTINES.
(a) LOAN AUTHORITY.—Section 321(a) of the Consolidated Farm
and Rural Development Act (7 U.S.C. 1961(a)) is amended—
(1) in each of the 1st and 3rd sentences, by striking ‘‘a
natural disaster in the United States or by’’ and inserting
‘‘a quarantine imposed by the Secretary under the Plant Protec-
tion Act or the animal quarantine laws (as defined in section
2509 of the Food, Agriculture, Conservation, and Trade Act
of 1990), a natural disaster in the United States, or’’; and
(2) in the 4th sentence—
(A) by striking ‘‘a natural disaster’’ and inserting ‘‘such
a quarantine or natural disaster’’; and
(B) by striking ‘‘by such natural disaster’’ and inserting
‘‘by such quarantine or natural disaster’’.
(b) CONFORMING AMENDMENT.—Section 323 of such Act (7
U.S.C. 1963) is amended by inserting ‘‘quarantine,’’ before ‘‘natural
disaster’’.
Subtitle D—Administrative Provisions
SEC. 5301. EVALUATIONS OF DIRECT AND GUARANTEED LOAN PRO-
GRAMS.
(a) STUDIES.—The Secretary of Agriculture shall conduct 2
studies of the direct and guaranteed loan progams under sections
302 and 311 of the Consolidated Farm and Rural Development
Act, each of which shall include an examination of the number,
average principal amount, and delinquency and default rates of
loans provided or guaranteed during the period covered by the
study.
(b) PERIODS COVERED.—
(1) FIRST STUDY.—One study under subsection (a) shall
cover the 1-year period that begins 1 year after the date of
the enactment of this section.
(2) SECOND STUDY.—One study under subsection (a) shall
cover the 1-year period that begins 3 years after such date
of enactment.
(c) REPORTS TO THE CONGRESS.—At the end of the period cov-
ered by each study under this section, the Secretary of Agriculture
shall submit to the Congress a report that contains an evaluation
of the results of the study, including an analysis of the effectiveness
of loan programs referred to in subsection (a) in meeting the credit
needs of agricultural producers in an efficient and fiscally respon-
sible manner.
SEC. 5302. ELIGIBILITY OF TRUSTS AND LIMITED LIABILITY COMPA-
NIES FOR FARM OWNERSHIP LOANS, FARM OPERATING
LOANS, AND EMERGENCY LOANS.
(a) IN GENERAL.—Sections 302(a), 311(a), and 321(a) of the
Consolidated Farm and Rural Development Act (7 U.S.C. 1922(a),
1941(a), and 1961(a)) are each amended by striking ‘‘and joint
operations’’ each place it appears and inserting ‘‘joint operations,
trusts, and limited liability companies’’.
H. R. 2646—212
(b) CONFORMING AMENDMENT.—Section 321(a) of the Consoli-
dated Farm and Rural Development Act (7 U.S.C. 1961(a)) is
amended by striking ‘‘or joint operations’’ each place it appears
and inserting ‘‘joint operations, trusts, or limited liability compa-
nies’’.
SEC. 5303. DEBT SETTLEMENT.
Section 331(b)(4) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1981(b)(4)) is amended—
(1) by striking ‘‘The Secretary may release’’ and inserting
‘‘After consultation with a local or area county committee, the
Secretary may release’’; and
(2) by striking ‘‘carried out—’’ and all that follows through
‘‘(B) after’’ and inserting ‘‘carried out after’’.
SEC. 5304. TEMPORARY AUTHORITY TO ENTER INTO CONTRACTS; PRI-
VATE COLLECTION AGENCIES.
(a) IN GENERAL.—Section 331 of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1981) is amended by striking
subsections (d) and (e).
(b) APPLICATION.—The amendment made by subsection (a) shall
not apply to a contract entered into before the effective date of
this Act.
SEC. 5305. INTEREST RATE OPTIONS FOR LOANS IN SERVICING.
Section 331B of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1981b) is amended—
(1) by striking ‘‘lower of (1) the’’ and inserting the following:
‘‘lowest of—
‘‘(1) the’’; and
(2) by striking ‘‘original loan or (2) the’’ and inserting
the following: ‘‘original loan;
‘‘(2) the rate being charged by the Secretary for loans,
other than guaranteed loans, of the same type at the time
at which the borrower applies for a deferral, consolidation,
rescheduling, or reamortization; or
‘‘(3) the’’.
SEC. 
5306. 
ELIMINATION 
OF 
REQUIREMENT 
THAT 
SECRETARY
REQUIRE COUNTY COMMITTEES TO CERTIFY IN WRITING
THAT CERTAIN LOAN REVIEWS HAVE BEEN CONDUCTED.
Section 333(2) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1983(2)) is amended to read as follows:
‘‘(2) except with respect to a loan under section 306, 310B,
or 314—
‘‘(A) an annual review of the credit history and business
operation of the borrower; and
‘‘(B) an annual review of the continued eligibility of
the borrower for the loan;’’.
SEC. 5307. SIMPLIFIED LOAN GUARANTEE APPLICATION AVAILABLE
FOR LOANS OF GREATER AMOUNTS.
Section 333A(g)(1) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1983a(g)(1)) is amended by striking ‘‘$50,000’’
and inserting ‘‘$125,000’’.
SEC. 5308. INVENTORY PROPERTY.
Section 335(c) of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1985(c)) is amended—
H. R. 2646—213
(1) in paragraph (1)—
(A) in subparagraph (B)—
(i) in clause (i), by striking ‘‘75 days’’ and inserting
‘‘135 days’’; and
(ii) by adding at the end the following:
‘‘(iv) COMBINING AND DIVIDING OF PROPERTY.—To
the maximum extent practicable, the Secretary shall
maximize the opportunity for beginning farmers and
ranchers to purchase real property acquired by the
Secretary under this title by combining or dividing
inventory parcels of the property in such manner as
the Secretary determines to be appropriate.’’; and
(B) in subparagraph (C)—
(i) by striking ‘‘75 days’’ and inserting ‘‘135 days’’;
and
(ii) by striking ‘‘75-day period’’ and inserting ‘‘135-
day period’’; and
(2) by striking paragraph (2) and inserting the following:
‘‘(2) PREVIOUS LEASE.—In the case of real property acquired
before April 4, 1996, that the Secretary leased before April
4, 1996, not later than 60 days after the lease expires, the
Secretary shall offer to sell the property in accordance with
paragraph (1).’’.
SEC. 5309. ADMINISTRATION OF CERTIFIED LENDERS AND PREFERRED
CERTIFIED LENDERS PROGRAMS.
Section 339 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1989) is amended by adding at the end the following:
‘‘(e) ADMINISTRATION OF CERTIFIED LENDERS AND PREFERRED
CERTIFIED LENDERS PROGRAMS.—The Secretary may administer the
loan guarantee programs under subsections (c) and (d) through
central offices established in States or in multi-State areas.’’.
SEC. 5310. DEFINITIONS.
(a) QUALIFIED
BEGINNING
FARMER
OR
RANCHER.—Section
343(a)(11)(F) of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1991(a)(11)(F)) is amended by striking ‘‘25 percent’’
and inserting ‘‘30 percent’’.
(b) DEBT FORGIVENESS.—Section 343(a)(12)(B) of the Consoli-
dated Farm and Rural Development Act (7 U.S.C. 1991(a)(12)(B))
is amended to read as follows:
‘‘(B) EXCEPTIONS.—The term ‘debt forgiveness’ does not
include—
‘‘(i) consolidation, rescheduling, reamortization, or
deferral of a loan; or
‘‘(ii) any write-down provided as part of a resolu-
tion of a discrimination complaint against the Sec-
retary.’’.
SEC. 5311. LOAN AUTHORIZATION LEVELS.
Section 346(b)(1) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1994(b)(1)) is amended to read as follows:
‘‘(1) IN GENERAL.—The Secretary may make or guarantee
loans under subtitles A and B from the Agricultural Credit
Insurance Fund provided for in section 309 for not more than
$3,796,000,000 for each of fiscal years 2003 through 2007,
of which, for each fiscal year—
‘‘(A) $770,000,000 shall be for direct loans, of which—
H. R. 2646—214
‘‘(i) $205,000,000 shall be for farm ownership loans
under subtitle A; and
‘‘(ii) $565,000,000 shall be for operating loans
under subtitle B; and
‘‘(B) $3,026,000,000 shall be for guaranteed loans, of
which—
‘‘(i) $1,000,000,000 shall be for guarantees of farm
ownership loans under subtitle A; and
‘‘(ii) $2,026,000,000 shall be for guarantees of oper-
ating loans under subtitle B.’’.
SEC. 5312. RESERVATION OF FUNDS FOR DIRECT OPERATING LOANS
FOR BEGINNING FARMERS AND RANCHERS.
Section 346(b)(2)(A)(ii)(III) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1994(b)(2)(A)(ii)(III)) is amended by
striking ‘‘2000 through 2002’’ and inserting ‘‘2003 through 2007’’.
SEC. 5313. INTEREST RATE REDUCTION PROGRAM.
Section 351 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1999) is amended—
(1) in subsection (a)—
(A) by striking ‘‘PROGRAM.—’’ and all that follows
through ‘‘The Secretary’’ and inserting ‘‘PROGRAM.—The
Secretary’’; and
(B) by striking paragraph (2); and
(2) in subsection (e), by striking paragraph (2) and inserting
the following:
‘‘(2) MAXIMUM AMOUNT OF FUNDS.—
‘‘(A) IN
GENERAL.—The total amount of funds used
by the Secretary to carry out this section for a fiscal year
shall not exceed $750,000,000.
‘‘(B) BEGINNING FARMERS AND RANCHERS.—
‘‘(i) IN GENERAL.—The Secretary shall reserve not
less than 15 percent of the funds used by the Secretary
under subparagraph (A) to make payments for guaran-
teed loans made to beginning farmers and ranchers.
‘‘(ii) DURATION OF RESERVATION OF FUNDS.—Funds
reserved for beginning farmers or ranchers under
clause (i) for a fiscal year shall be reserved only until
March 1 of the fiscal year.’’.
SEC. 5314. REAMORTIZATION OF RECAPTURE PAYMENTS.
Section 353(e)(7) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 2001(e)(7)) is amended by adding at the end
the following:
‘‘(D) REAMORTIZATION.—
‘‘(i) IN GENERAL.—The Secretary may modify the
amortization of a recapture payment referred to in
subparagraph (A) of this paragraph on which a pay-
ment has become delinquent by using loan service
tools under section 343(b)(3) if—
‘‘(I) the default is due to circumstances beyond
the control of the borrower; and
‘‘(II) the borrower acted in good faith (as deter-
mined by the Secretary) in attempting to repay
the recapture amount.
‘‘(ii) LIMITATIONS.—
H. R. 2646—215
‘‘(I) TERM OF REAMORTIZATION.—The term of
a reamortization under this subparagraph may not
exceed 25 years from the date of the original
amortization agreement.
‘‘(II) NO REDUCTION OR PRINCIPAL OR UNPAID
INTEREST DUE.—A reamortization of a recapture
payment under this subparagraph may not provide
for reducing the outstanding principal or unpaid
interest due on the recapture payment.
SEC. 5315. ALLOCATION OF CERTAIN FUNDS FOR SOCIALLY DISADVAN-
TAGED FARMERS AND RANCHERS.
The last sentence of section 355(c)(2) of the Consolidated Farm
and Rural Development Act (7 U.S.C. 2003(c)(2)) is amended to
read as follows: ‘‘Any funds reserved and allocated under this para-
graph but not used within a State shall, to the extent necessary
to satisfy pending applications under this title, be available for
use by socially disadvantaged farmers and ranchers in other States,
as determined by the Secretary, and any remaining funds shall
be reallocated within the State.’’.
SEC. 
5316. 
WAIVER 
OF 
BORROWER 
TRAINING 
CERTIFICATION
REQUIREMENT.
Section 359 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 2006a) is amended by striking subsection (f) and
inserting the following:
‘‘(f) WAIVERS.—
‘‘(1) IN GENERAL.—The Secretary may waive the require-
ments of this section for an individual borrower if the Secretary
determines that the borrower demonstrates adequate knowl-
edge in areas described in this section.
‘‘(2) CRITERIA.—The Secretary shall establish criteria pro-
viding for the application of paragraph (1) consistently in all
counties nationwide.’’.
SEC. 5317. TIMING OF LOAN ASSESSMENTS.
Section 360(a) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 2006b(a)) is amended by striking ‘‘After an
applicant is determined eligible for assistance under this title by
the appropriate county committee established pursuant to section
332, the’’ and inserting ‘‘The’’.
SEC. 5318. ANNUAL REVIEW OF BORROWERS.
Section 360(d)(1) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 2006b(d)(1)) is amended by striking ‘‘biannual’’
and inserting ‘‘annual’’.
SEC. 5319. LOAN ELIGIBILITY FOR BORROWERS WITH PRIOR DEBT
FORGIVENESS.
Section 373(b)(2)(A) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 2008h(b)(2)(A)) is amended—
(1) in clause (i), by striking ‘‘or’’;
(2) in clause (ii), by striking the period and inserting ‘‘;
or’’; and
(3) by adding at the end the following:
‘‘(iii) received debt forgiveness on not more than
1 occasion resulting directly and primarily from a
H. R. 2646—216
major disaster or emergency designated by the Presi-
dent on or after April 4, 1996, under the Robert T.
Stafford Disaster Relief and Emergency Assistance Act
(42 U.S.C. 5121 et seq.).’’.
SEC. 5320. MAKING AND SERVICING OF LOANS BY PERSONNEL OF
STATE, COUNTY, OR AREA COMMITTEES.
Subtitle D of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1981–2008j) is amended by adding at the end the
following:
‘‘SEC. 376. MAKING AND SERVICING OF LOANS BY PERSONNEL OF
STATE, COUNTY, OR AREA COMMITTEES.
‘‘The Secretary shall use personnel of a State, county or area
committee established under section 8(b)(5) of the Soil Conservation
and Domestic Allotment Act (16 U.S.C 590h(b)(5)) to make and
service loans under this title to the extent the personnel have
been trained to do so.’’.
SEC. 5321. ELIGIBILITY OF EMPLOYEES OF STATE, COUNTY, OR AREA
COMMITTEE FOR LOANS AND LOAN GUARANTEES.
Subtitle D of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1981–2008j) is further amended by adding at the
end the following:
‘‘SEC. 377. ELIGIBILITY OF EMPLOYEES OF STATE, COUNTY, OR AREA
COMMITTEE FOR LOANS AND LOAN GUARANTEES.
‘‘(a) IN GENERAL.—The Secretary shall not prohibit an employee
of a State, county or area committee established under section
8(b)(5) of the Soil Conservation and Domestic Allotment Act (16
U.S.C. 590h(b)(5)) or an employee of the Department of Agriculture
from obtaining a loan or loan guarantee under subtitle A, B or
C of this title.
‘‘(b) APPROVALS.—
‘‘(1) COUNTY OR AREA OFFICE.—In the case of a loan applica-
tion from an employee in a county or area office, the Farm
Service Agency State office shall be responsible for reviewing
and approving the application.
‘‘(2) STATE OFFICE.—In the case of a loan application from
an employee of a State office, the Farm Service Agency national
office shall be responsible for reviewing and approving the
application.’’.
Subtitle E—Farm Credit
SEC. 5401. REPEAL OF BURDENSOME APPROVAL REQUIREMENTS.
(a) BANKS FOR COOPERATIVES.—Section 3.1(11)(B) of the Farm
Credit Act of 1971 (12 U.S.C. 2122(11)(B)) is amended—
(1) by striking clause (iii); and
(2) by redesignating clause (iv) as clause (iii).
(b) OTHER SYSTEM BANKS; ASSOCIATIONS.—Section 4.18A of
the Farm Credit Act of 1971 (12 U.S.C. 2206a) is amended—
(1) in subsection (a)(1), by striking ‘‘3.1(11)(B)(iv)’’ and
inserting ‘‘3.1(11)(B)(iii)’’; and
(2) by striking subsection (c).
H. R. 2646—217
SEC. 5402. BANKS FOR COOPERATIVES.
Section 3.7(b) of the Farm Credit Act of 1971 (12 U.S.C. 2128(b))
is amended—
(1) in paragraphs (1) and (2)(A)(i), by striking ‘‘farm sup-
plies’’ each place it appears and inserting ‘‘agricultural sup-
plies’’; and
(2) by adding at the end the following:
‘‘(4) DEFINITION OF AGRICULTURAL SUPPLY.—In this sub-
section, the term ‘agricultural supply’ includes—
‘‘(A) a farm supply; and
‘‘(B)(i) agriculture-related processing equipment;
‘‘(ii) agriculture-related machinery; and
‘‘(iii) other capital goods related to the storage or han-
dling of agricultural commodities or products.’’.
SEC. 5403. INSURANCE CORPORATION PREMIUMS.
(a) REDUCTION IN PREMIUMS FOR GSE-GUARANTEED LOANS.—
(1) IN GENERAL.—Section 5.55 of the Farm Credit Act of
1971 (12 U.S.C. 2277a–4) is amended—
(A) in subsection (a)—
(i) in paragraph (1)—
(I) in subparagraph (A), by striking ‘‘govern-
ment-guaranteed loans provided for in subpara-
graph (C)’’ and inserting ‘‘loans provided for in
subparagraphs (C) and (D)’’;
(II) in subparagraph (B), by striking ‘‘and’’
at the end;
(III) in subparagraph (C), by striking the
period at the end and inserting ‘‘; and’’; and
(IV) by adding at the end the following:
‘‘(D) the annual average principal outstanding for such
year on the guaranteed portions of Government Sponsored
Enterprise-guaranteed loans made by the bank that are
in accrual status, multiplied by a factor, not to exceed
0.0015, determined by the Corporation at the sole discretion
of the Corporation.’’; and
(ii) by adding at the end the following:
‘‘(4) DEFINITION OF GOVERNMENT SPONSORED ENTERPRISE-
GUARANTEED LOAN.—In this section and sections 1.12(b) and
5.56(a), the term ‘Government Sponsored Enterprise-guaran-
teed loan’ means a loan or credit, or portion of a loan or
credit, that is guaranteed by an entity that is chartered by
Congress to serve a public purpose and the debt obligations
of which are not explicitly guaranteed by the United States,
including the Federal National Mortgage Association, the Fed-
eral Home Loan Mortgage Corporation, the Federal Home Loan
Bank System, and the Federal Agricultural Mortgage Corpora-
tion, but not including any other institution of the Farm Credit
System.’’; and
(B) in subsection (e)(4)(B), by striking ‘‘government-
guaranteed loans described in subsection (a)(1)(C)’’ and
inserting ‘‘loans described in subparagraph (C) or (D) of
subsection (a)(1)’’.
(2) CONFORMING AMENDMENTS.—
(A) Section 1.12(b) of the Farm Credit Act of 1971
(12 U.S.C. 2020(b)) is amended—
H. R. 2646—218
(i) in paragraph (1), by inserting ‘‘and Government
Sponsored Enterprise-guaranteed loans (as defined in
section 5.55(a)(4)) provided for in paragraph (4)’’ after
‘‘government-guaranteed loans (as defined in section
5.55(a)(3)) provided for in paragraph (3)’’;
(ii) in paragraph (2), by striking ‘‘and’’ at the end;
(iii) in paragraph (3), by striking the period at
the end and inserting ‘‘; and’’; and
(iv) by adding at the end the following:
‘‘(4) the annual average principal outstanding for such year
on the guaranteed portions of Government Sponsored Enter-
prise-guaranteed loans (as so defined) made by the association,
or by the other financing institution and funded by or dis-
counted with the Farm Credit Bank, that are in accrual status,
multiplied by a factor, not to exceed 0.0015, determined by
the Corporation for the purpose of setting the premium for
such guaranteed portions of loans under section 5.55(a)(1)(D).’’.
(B) Section 5.56(a) of the Farm Credit Act of 1971
(12 U.S.C. 2277a–5(a)) is amended—
(i) in paragraph (1), by inserting ‘‘and Government
Sponsored Enterprise-guaranteed loans (as defined in
section 
5.55(a)(4))’’ 
after 
‘‘government-guaranteed
loans’’;
(ii) by redesignating paragraphs (4) and (5) as
paragraphs (5) and (6), respectively; and
(iii) by inserting after paragraph (3) the following:
‘‘(4) the annual average principal outstanding on the
guaranteed portions of Government Sponsored Enterprise-
guaranteed loans (as defined in section 5.55(a)(4)) that are
in accrual status;’’.
(b) APPLICABILITY.—The amendments made by this section shall
apply with respect to determinations of premiums for calendar
year 2002 and for any succeeding calendar year, and to certified
statements with respect to such premiums.
Subtitle F—General Provisions
SEC. 5501. TECHNICAL AMENDMENTS.
(a) Section 321(a) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1961(a)) is amended by striking ‘‘Disaster Relief
and Emergency Assistance Act’’ each place it appears and inserting
‘‘Robert T. Stafford Disaster Relief and Emergency Assistance Act
(42 U.S.C. 5121 et seq.)’’.
(b) Section 336(b) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1986(b)) is amended in the second sentence
by striking ‘‘provided for in section 332 of this title’’.
(c) Section 359(c)(1) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 2006a(c)(1)) is amended by striking
‘‘established pursuant to section 332,’’.
H. R. 2646—219
TITLE VI—RURAL DEVELOPMENT
Subtitle A—Consolidated Farm and Rural
Development Act
SEC. 6001. ELIGIBILITY OF RURAL EMPOWERMENT ZONES AND RURAL
ENTERPRISE COMMUNITIES FOR DIRECT AND GUARAN-
TEED LOANS FOR ESSENTIAL COMMUNITY FACILITIES.
Section 306(a)(1) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1926(a)(1)) is amended by inserting after the
first sentence the following: ‘‘The Secretary may also make or
insure loans to communities that have been designated as rural
empowerment zones or rural enterprise communities pursuant to
part I of subchapter U of chapter 1 of the Internal Revenue Code
of 1986, or as rural enterprise communities pursuant to section
766 of the Agriculture, Rural Development, Food and Drug Adminis-
tration, and Related Agencies Appropriations Act, 1999 (Public Law
105–277; 112 Stat. 2681, 2681–37), to provide for the installation
or improvement of essential community facilities including nec-
essary related equipment, and to furnish financial assistance or
other aid in planning projects for such purposes.’’.
SEC. 6002. WATER OR WASTE DISPOSAL GRANTS.
Section 306(a)(2) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1926(a)(2)) is amended—
(1) by striking ‘‘(2) The’’ and inserting the following:
‘‘(2) WATER, WASTE DISPOSAL, AND WASTEWATER FACILITY
GRANTS.—
‘‘(A) AUTHORITY.—
‘‘(i) IN GENERAL.—The’’;
(2) by striking ‘‘aggregating not to exceed $590,000,000
in any fiscal year’’;
(3) by striking ‘‘The amount’’ and inserting the following:
‘‘(ii) AMOUNT.—The amount’’;
(4) by striking ‘‘paragraph’’ and inserting ‘‘subparagraph’’;
(5) by striking ‘‘The Secretary shall’’ and inserting the
following:
‘‘(iii) GRANT RATE.—The Secretary shall’’; and
(6) by adding at the end the following:
‘‘(B) REVOLVING
FUNDS
FOR
FINANCING
WATER
AND
WASTEWATER PROJECTS.—
‘‘(i) IN GENERAL.—The Secretary may make grants
to qualified private, nonprofit entities to capitalize
revolving funds for the purpose of providing financing
to eligible entities for—
‘‘(I) predevelopment costs associated with pro-
posed water and wastewater projects or with
existing water and wastewater systems; and
‘‘(II) short-term costs incurred for replacement
equipment, small-scale extension services, or other
small capital projects that are not part of the
regular operations and maintenance activities of
existing water and wastewater systems.
‘‘(ii) ELIGIBLE ENTITIES.—To be eligible to obtain
financing from a revolving fund under clause (i), an
H. R. 2646—220
eligible entity must be eligible to obtain a loan, loan
guarantee, or grant under paragraph (1) or this para-
graph.
‘‘(iii) MAXIMUM
AMOUNT
OF
FINANCING.—The
amount of financing made to an eligible entity under
this subparagraph shall not exceed—
‘‘(I) $100,000 for costs described in clause (i)(I);
and
‘‘(II) $100,000 for costs described in clause
(i)(II).
‘‘(iv) TERM.—The term of financing provided to
an eligible entity under this subparagraph shall not
exceed 10 years.
‘‘(v) ADMINISTRATION.—The Secretary shall limit
the amount of grant funds that may be used by a
grant recipient for administrative costs incurred under
this subparagraph.
‘‘(vi) ANNUAL REPORT.—A nonprofit entity receiving
a grant under this subparagraph shall submit to the
Secretary an annual report that describes the number
and size of communities served and the type of
financing provided.
‘‘(vii) AUTHORIZATION OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this
subparagraph $30,000,000 for each of fiscal years 2002
through 2007.’’.
SEC. 6003. RURAL BUSINESS OPPORTUNITY GRANTS.
Section 306(a)(11)(D) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1926(a)(11)(D)) is amended—
(1) by striking ‘‘$7,500,000’’ and inserting ‘‘$15,000,000’’;
and
(2) by striking ‘‘2002’’ and inserting ‘‘2007’’.
SEC. 6004. CHILD DAY CARE FACILITIES.
Section 306(a)(19) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1926(a)(19)) is amended by adding at the end
the following:
‘‘(C) RESERVATION
OF
FUNDS
FOR
CHILD
DAY
CARE
FACILITIES.—
‘‘(i) IN GENERAL.—For each fiscal year, not less
than 10 percent of the funds made available to carry
out this paragraph shall be reserved for grants to
pay the Federal share of the cost of developing and
constructing day care facilities for children in rural
areas.
‘‘(ii) RELEASE.—Funds reserved under clause (i)
for a fiscal year shall be reserved only until April
1 of the fiscal year.’’.
SEC. 6005. RURAL WATER AND WASTEWATER CIRCUIT RIDER PRO-
GRAM.
Section 306(a) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1926(a)) is amended by adding at the end
the following:
‘‘(22) RURAL WATER AND WASTEWATER CIRCUIT RIDER PRO-
GRAM.—
H. R. 2646—221
‘‘(A) IN
GENERAL.—The Secretary shall establish a
national rural water and wastewater circuit rider program
that is based on the rural water circuit rider program
of the National Rural Water Association that (as of the
date of enactment of this paragraph) receives funding from
the Secretary, acting through the Rural Utilities Service.
‘‘(B) RELATIONSHIP TO EXISTING PROGRAM.—The pro-
gram established under subparagraph (A) shall not affect
the authority of the Secretary to carry out the circuit
rider program for which funds are made available under
the heading ‘‘RURAL COMMUNITY ADVANCEMENT PROGRAM’’
in title III of the Agriculture, Rural Development, Food
and Drug Administration, and Related Agencies Appropria-
tions Act, 2002 (115 Stat. 719).
‘‘(C) AUTHORIZATION
OF
APPROPRIATIONS.—There is
authorized to be appropriated to carry out this paragraph
$15,000,000 for fiscal year 2003 and each fiscal year there-
after.’’.
SEC. 6006. MULTIJURISDICTIONAL REGIONAL PLANNING ORGANIZA-
TIONS.
Section 306(a) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1926(a)) (as amended by section 6005) is
amended by adding at the end the following:
‘‘(23) MULTIJURISDICTIONAL REGIONAL PLANNING ORGANIZA-
TIONS.—
‘‘(A) GRANTS.—The Secretary shall provide grants to
multijurisdictional regional planning and development
organizations to pay the Federal share of the cost of pro-
viding assistance to local governments to improve the infra-
structure, services, and business development capabilities
of local governments and local economic development
organizations.
‘‘(B) PRIORITY.—In determining which organizations
will receive a grant under this paragraph, the Secretary
shall give priority to an organization that—
‘‘(i) serves a rural area that, during the most recent
5-year period—
‘‘(I) had a net out-migration of inhabitants,
or other population loss, from the rural area that
equals or exceeds 5 percent of the population of
the rural area; or
‘‘(II) had a median household income that is
less than the nonmetropolitan median household
income of the applicable State; and
‘‘(ii) has a history of providing substantive assist-
ance to local governments and economic development
organizations.
‘‘(C) FEDERAL
SHARE.—A grant provided under this
paragraph shall be for not more than 75 percent of the
cost of providing assistance described in subparagraph (A).
‘‘(D) MAXIMUM AMOUNT OF GRANTS.—The amount of
a grant provided to an organization under this paragraph
shall not exceed $100,000.
‘‘(E) AUTHORIZATION
OF
APPROPRIATIONS.—There is
authorized to be appropriated to carry out this paragraph
$30,000,000 for each of fiscal years 2003 through 2007.’’.
H. R. 2646—222
SEC. 6007. LOAN GUARANTEES FOR CERTAIN RURAL DEVELOPMENT
LOANS.
(a) LOAN GUARANTEES FOR WATER, WASTEWATER, AND ESSEN-
TIAL COMMUNITY FACILITIES LOANS.—Section 306(a) of the Consoli-
dated Farm and Rural Development Act (7 U.S.C. 1925(a)) (as
amended by section 6006) is amended by adding at the end the
following:
‘‘(24) LOAN
GUARANTEES
FOR
WATER, WASTEWATER, AND
ESSENTIAL COMMUNITY FACILITIES LOANS.—
‘‘(A) IN GENERAL.—The Secretary may guarantee a loan
made to finance a community facility or water or waste
facility project in a rural area, including a loan financed
by the net proceeds of a bond described in section 142(a)
of the Internal Revenue Code of 1986.
‘‘(B) REQUIREMENTS.—To be eligible for a loan guar-
antee under subparagraph (A), an individual or entity
offering to purchase the loan shall demonstrate to the
Secretary that the person has—
‘‘(i) the capabilities and resources necessary to
service the loan in a manner that ensures the contin-
ued performance of the loan, as determined by the
Secretary; and
‘‘(ii) the ability to generate capital to provide bor-
rowers of the loan with the additional credit necessary
to properly service the loan.’’.
(b) LOAN GUARANTEES FOR CERTAIN LOANS.—Section 310B of
the Consolidated Farm and Rural Development Act (7 U.S.C. 1932)
is amended by adding at the end the following:
‘‘(h) LOAN GUARANTEES FOR CERTAIN LOANS.—The Secretary
may guarantee loans made under subsection (a) to finance the
issuance of bonds for the projects described in section 306(a)(24).’’.
SEC. 6008. TRIBAL COLLEGE AND UNIVERSITY ESSENTIAL COMMUNITY
FACILITIES.
Section 306(a) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1926(a)) (as amended by section 6007(a)) is
amended by adding at the end the following:
‘‘(25) TRIBAL COLLEGE AND UNIVERSITY ESSENTIAL COMMU-
NITY FACILITIES.—
‘‘(A) IN
GENERAL.—The Secretary may make grants
to tribal colleges and universities (as defined in section
316 of the Higher Education Act of 1965 (20 U.S.C. 1059c))
to provide the Federal share of the cost of developing
specific tribal college or university essential community
facilities in rural areas.
‘‘(B) FEDERAL SHARE.—
‘‘(i) IN GENERAL.—Except as provided in clauses
(ii) and (iii), the Secretary shall, by regulation, estab-
lish the maximum percentage of the cost of the facility
that may be covered by a grant under this paragraph.
‘‘(ii) MAXIMUM AMOUNT.—The amount of a grant
provided under this paragraph for a facility shall not
exceed 75 percent of the cost of developing the facility.
‘‘(iii) GRADUATED SCALE.—The Secretary shall pro-
vide for a graduated scale of the percentages of the
cost covered by a grant made under this paragraph
that provides higher percentages for facilities in
H. R. 2646—223
communities that have lower community population
and income levels, as determined by the Secretary.
‘‘(C) AUTHORIZATION
OF
APPROPRIATIONS.—There is
authorized to be appropriated to carry out this paragraph
$10,000,000 for each of fiscal years 2003 through 2007.’’.
SEC. 6009. EMERGENCY AND IMMINENT COMMUNITY WATER ASSIST-
ANCE GRANT PROGRAM.
Section 306A of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1926a) is amended—
(1) in the section heading, by inserting ‘‘AND IMMINENT’’
after ‘‘EMERGENCY’’;
(2) in subsection (a)—
(A) in paragraph (1), by inserting ‘‘, or when such
a decline is imminent’’ before the semicolon at the end;
and
(B) in paragraph (2)—
(i) in subparagraph (A), by striking ‘‘acute’’ and
inserting ‘‘acute, or imminent,’’; and
(ii) in subparagraph (B), by striking ‘‘decline’’ and
inserting ‘‘decline, or imminent decline,’’;
(3) in subsection (c)(2), by striking ‘‘occurred’’ and inserting
‘‘occurred, or will occur,’’;
(4) in subsection (d), by striking paragraph (1) and inserting
the following:
‘‘(1) IN GENERAL.—Grants made under this section may
be used—
‘‘(A) for waterline extensions from existing systems,
laying of new waterlines, repairs, significant maintenance,
digging of new wells, equipment replacement, and hook
and tap fees;
‘‘(B) for any other appropriate purpose associated with
developing sources of, treating, storing, or distributing
water;
‘‘(C) to assist communities in complying with the
requirements of the Federal Water Pollution Control Act
(33 U.S.C. 1251 et seq.) or the Safe Drinking Water Act
(42 U.S.C. 300f et seq.); and
‘‘(D) to provide potable water to communities through
other means.’’;
(5) in subsection (f)(2), by striking ‘‘$75,000’’ and inserting
‘‘$150,000’’;
(6) in subsection (h)—
(A) in the second sentence of paragraph (1), by striking
‘‘decline’’ and inserting ‘‘decline, or imminent decline,’’; and
(B) by striking paragraph (2) and inserting the fol-
lowing:
‘‘(2) TIMING OF REVIEW OF APPLICATIONS.—
‘‘(A) SIMPLIFIED APPLICATION.—The application process
developed by the Secretary under paragraph (1) shall
include a simplified application form that will permit expe-
dited consideration of an application for a grant filed under
this section.
‘‘(B) PRIORITY REVIEW.—In processing applications for
any water or waste grant or loan authorized under this
title, the Secretary shall afford priority processing to an
application for a grant under this section to the extent
H. R. 2646—224
funds will be available for an award on the application
at the conclusion of priority processing.
‘‘(C) TIMING.—The Secretary shall, to the maximum
extent practicable, review and act on an application under
this section within 60 days after the date on which the
application is submitted to the Secretary.’’; and
(7) by striking subsection (i) and inserting the following:
‘‘(i) FUNDING.—
‘‘(1) RESERVATION.—
‘‘(A) IN GENERAL.—For each fiscal year, not less than
3 nor more than 5 percent of the total amount made avail-
able to carry out section 306(a)(2) for the fiscal year shall
be reserved for grants under this section.
‘‘(B) RELEASE.—Funds reserved under subparagraph
(A) for a fiscal year shall be reserved only until July 1
of the fiscal year.
‘‘(2) AUTHORIZATION
OF
APPROPRIATIONS.—In addition to
funds made available under paragraph (1), there is authorized
to be appropriated to carry out this section $35,000,000 for
each of fiscal years 2003 through 2007.’’.
SEC. 6010. WATER AND WASTE FACILITY GRANTS FOR NATIVE AMER-
ICAN TRIBES.
Section 306C of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1926c) is amended by striking subsection (e) and
inserting the following:
‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—
‘‘(1) IN
GENERAL.—Subject to paragraph (2), there are
authorized to be appropriated—
‘‘(A) for grants under this section, $30,000,000 for each
fiscal year;
‘‘(B) for loans under this section, $30,000,000 for each
fiscal year; and
‘‘(C) in addition to grants provided under subparagraph
(A), for grants under this section to benefit Indian tribes
(as defined in section 4 of the Indian Self-Determination
and 
Education 
Assistance 
Act 
(25 
U.S.C. 
450b)),
$20,000,000 for each fiscal year.
‘‘(2) EXCEPTION.—An entity eligible to receive funding
through a grant made under section 306D shall not be eligible
for a grant from funds made available under paragraph (1)(C).’’.
SEC. 6011. GRANTS FOR WATER SYSTEMS FOR RURAL AND NATIVE
VILLAGES IN ALASKA.
Section 306D(d)(1) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1926d(d)(1)) is amended by striking
‘‘and 2002’’ and inserting ‘‘through 2007’’.
SEC. 6012. GRANTS TO NONPROFIT ORGANIZATIONS TO FINANCE THE
CONSTRUCTION, REFURBISHING, AND SERVICING OF
INDIVIDUALLY-OWNED HOUSEHOLD WATER WELL SYS-
TEMS IN RURAL AREAS FOR INDIVIDUALS WITH LOW OR
MODERATE INCOMES.
(a) IN GENERAL.—The Consolidated Farm and Rural Develop-
ment Act is amended by inserting after section 306D (7 U.S.C.
1926d) the following:
H. R. 2646—225
‘‘SEC. 306E. GRANTS TO NONPROFIT ORGANIZATIONS TO FINANCE THE
CONSTRUCTION, REFURBISHING, AND SERVICING OF
INDIVIDUALLY-OWNED HOUSEHOLD WATER WELL SYS-
TEMS IN RURAL AREAS FOR INDIVIDUALS WITH LOW OR
MODERATE INCOMES.
‘‘(a) DEFINITION OF ELIGIBLE INDIVIDUAL.—In this section, the
term ‘eligible individual’ means an individual who is a member
of a household the members of which have a combined income
(for the most recent 12-month period for which the information
is available) that is not more than 100 percent of the median
nonmetropolitan household income for the State or territory in
which the individual resides, according to the most recent decennial
census of the United States.
‘‘(b) GRANTS.—
‘‘(1) IN GENERAL.—The Secretary may make grants to pri-
vate nonprofit organizations for the purpose of providing loans
to eligible individuals for the construction, refurbishing, and
servicing of individual household water well systems in rural
areas that are or will be owned by the eligible individuals.
‘‘(2) TERMS OF LOANS.—A loan made with grant funds under
this section—
‘‘(A) shall have an interest rate of 1 percent;
‘‘(B) shall have a term not to exceed 20 years; and
‘‘(C) shall not exceed $8,000 for each water well system
described in paragraph (1).
‘‘(3) ADMINISTRATIVE
EXPENSES.—A recipient of a grant
made under this section may use grant funds to pay administra-
tive expenses associated with providing the assistance described
in paragraph (1), as determined by the Secretary.
‘‘(c) PRIORITY IN AWARDING GRANTS.—In awarding grants under
this section, the Secretary shall give priority to an applicant that
has substantial expertise and experience in promoting the safe
and productive use of individually-owned household water well sys-
tems and ground water.
‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There is authorized
to be appropriated to carry out this section $10,000,000 for each
of fiscal years 2003 through 2007.’’.
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
takes effect on October 1, 2002.
SEC. 6013. LOANS AND LOAN GUARANTEES FOR RENEWABLE ENERGY
SYSTEMS.
Section 310B(a)(3) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1932(a)(3)) is amended by inserting ‘‘and other
renewable energy systems (including wind energy systems and
anaerobic digestors for the purpose of energy generation)’’ after
‘‘solar energy systems’’.
SEC. 6014. RURAL BUSINESS ENTERPRISE GRANTS.
Section 310B(c)(1) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1932(c)(1)) is amended—
(1) by striking ‘‘(1) IN GENERAL.—The Secretary’’ and
inserting the following:
‘‘(1) GRANTS.—
‘‘(A) IN GENERAL.—The Secretary’’; and
(2) by adding at the end the following:
H. R. 2646—226
‘‘(B) SMALL AND EMERGING PRIVATE BUSINESS ENTER-
PRISES.—
‘‘(i) IN GENERAL.—For the purpose of subparagraph
(A), a small and emerging private business enterprise
shall include (regardless of the number of employees
or operating capital of the enterprise) an eligible non-
profit entity, or other tax-exempt organization, with
a principal office in an area that is located—
‘‘(I) on land of an existing or former Native
American reservation; and
‘‘(II) in a city, town, or unincorporated area
that has a population of not more than 5,000
inhabitants.
‘‘(ii) USE OF GRANT.—An eligible nonprofit entity,
or other tax exempt organization, described in clause
(i) may use assistance provided under this paragraph
to create, expand, or operate value-added processing
in an area described in clause (i) in connection with
production agriculture.
‘‘(iii) PRIORITY.—In making grants under this para-
graph, the Secretary shall give priority to grants that
will be used to provide assistance to eligible nonprofit
entities and other tax exempt organizations described
in clause (i).’’.
SEC. 6015. RURAL COOPERATIVE DEVELOPMENT GRANTS.
Section 310B(e) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1932(e)) is amended—
(1) in paragraph (5)(F), before the period at the end the
following: ‘‘, except that the Secretary shall not require non-
Federal financial support in an amount that is greater than
5 percent in the case of a 1994 institution (as defined in
section 532 of the Equity in Educational Land-Grant Status
Act of 1994 (7 U.S.C. 301 note; Public Law 103–382))’’; and
(2) in paragraph (9), by striking ‘‘2002’’ and inserting
‘‘2007’’.
SEC. 6016. GRANTS TO BROADCASTING SYSTEMS.
Section 310B(f) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1932(f)) is amended by adding at the end
the following:
‘‘(3) AUTHORIZATION OF APPROPRIATIONS.—There is author-
ized to be appropriated to carry out this subsection $5,000,000
for each of fiscal years 2002 through 2007.’’.
SEC. 6017. BUSINESS AND INDUSTRY LOAN MODIFICATIONS.
Section 310B of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1932) is amended by striking subsection (g) and
inserting the following:
‘‘(g) BUSINESS
AND
INDUSTRY
DIRECT
AND
GUARANTEED
LOANS.—
‘‘(1) DEFINITION OF BUSINESS AND INDUSTRY LOAN.—In this
subsection, the term ‘business and industry loan’ means a busi-
ness and industry direct or guaranteed loan that is made or
guaranteed by the Secretary under subsection (a)(1).
‘‘(2) LOAN GUARANTEES FOR THE PURCHASE OF COOPERATIVE
STOCK.—
H. R. 2646—227
‘‘(A) IN
GENERAL.—The Secretary may guarantee a
business and industry loan to individual farmers or
ranchers for the purpose of purchasing capital stock of
a farmer or rancher cooperative established for the purpose
of processing an agricultural commodity.
‘‘(B) PROCESSING CONTRACTS DURING INITIAL PERIOD.—
A cooperative described in subparagraph (A) for which
a farmer or rancher receives a guarantee to purchase stock
under subparagraph (A) may contract for services to process
agricultural commodities, or otherwise process value-added
agricultural products, during the 5-year period beginning
on the date of the startup of the cooperative in order
to provide adequate time for the planning and construction
of the processing facility of the cooperative.
‘‘(C) FINANCIAL INFORMATION.—Financial information
required by the Secretary from a farmer or rancher as
a condition of making a business and industry loan guar-
antee under this paragraph shall be provided in the manner
generally required by commercial agricultural lenders in
the area.
‘‘(3) LOANS TO COOPERATIVES.—
‘‘(A) IN GENERAL.—The Secretary may make or guar-
antee a business and industry loan to a cooperative
organization that is headquartered in a metropolitan area
if the loan is used for a project or venture described in
subsection (a) that is located in a rural area or a loan
guarantee that meets the requirements of paragraph (6).
‘‘(B) REFINANCING.—A cooperative organization that is
eligible for a business and industry loan shall be eligible
to refinance an existing business and industry loan with
a lender if—
‘‘(i) the cooperative organization—
‘‘(I) is current and performing with respect
to the existing loan; and
‘‘(II) is not, and has not been, in payment
default, or the collateral of which has not been
converted, with respect to the existing loan; and
‘‘(ii) there is adequate security or full collateral
for the refinanced loan.
‘‘(4) LOAN APPRAISALS.—The Secretary may require that
any appraisal made in connection with a business and industry
loan be conducted by a specialized appraiser that uses stand-
ards that are similar to standards used for similar purposes
in the private sector, as determined by the Secretary.
‘‘(5) FEES.—The Secretary may assess a 1-time fee for any
guaranteed business and industry loan in an amount that does
not exceed 2 percent of the guaranteed principal portion of
the loan.
‘‘(6) LOAN GUARANTEES IN NONRURAL AREAS.—
‘‘(A) IN
GENERAL.—The Secretary may guarantee a
business and industry loan to a cooperative organization
for a facility that is not located in a rural area if—
‘‘(i) the primary purpose of the loan guarantee
is for a facility to provide value-added processing for
agricultural producers that are located within 80 miles
of the facility;
H. R. 2646—228
‘‘(ii) the applicant demonstrates to the Secretary
that the primary benefit of the loan guarantee will
be to provide employment for residents of a rural area;
and
‘‘(iii) the total amount of business and industry
loans guaranteed for a fiscal year under this paragraph
does not exceed 10 percent of the business and industry
loans guaranteed for the fiscal year under subsection
(a)(1).
‘‘(B) PRINCIPAL AMOUNTS.—The principal amount of a
business and industry loan guaranteed under this para-
graph may not exceed $25,000,000.
‘‘(7) INTANGIBLE
ASSETS.—In determining whether a
cooperative organization is eligible for a guaranteed business
and industry loan, the Secretary may consider the market
value of a properly appraised brand name, patent, or trademark
of the cooperative.
‘‘(8) LIMITATIONS ON LOAN GUARANTEES FOR COOPERATIVE
ORGANIZATIONS.—
‘‘(A) PRINCIPAL AMOUNT.—
‘‘(i) IN GENERAL.—Subject to clause (ii), the prin-
cipal amount of a business and industry loan made
to a cooperative organization and guaranteed under
this subsection shall not exceed $40,000,000.
‘‘(ii) USE.—To be eligible for a guarantee under
this subsection for a business and industry loan made
to a cooperative organization, the principal amount
of the any such loan in excess of $25,000,000 shall
be used to carry out a project—
‘‘(I) in a rural area; and
‘‘(II) that provides for the value-added proc-
essing of agricultural commodities.
‘‘(B) APPLICATIONS.—If a cooperative organization sub-
mits an application for a guarantee under this subsection
of a business and industry loan with a principal amount
that is in excess of $25,000,000, the Secretary—
‘‘(i) shall review and, if appropriate, approve the
application; and
‘‘(ii) may not delegate the approval authority.
‘‘(C) MAXIMUM AMOUNT.—The total amount of business
and industry loans made to cooperative organizations and
guaranteed for a fiscal year under this subsection with
principal amounts that are in excess of $25,000,000 may
not exceed 10 percent of the business and industry loans
guaranteed for the fiscal year under subsection (a)(1).’’.
SEC. 6018. USE OF RURAL DEVELOPMENT LOANS AND GRANTS FOR
OTHER PURPOSES.
Subtitle A of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1921 et seq.) (as amended by section 5006) is amended
by adding at the end the following:
‘‘SEC. 310G. USE OF RURAL DEVELOPMENT LOANS AND GRANTS FOR
OTHER PURPOSES.
‘‘If, after making a loan or a grant described in section 381E(d),
the Secretary determines that the circumstances under which the
loan or grant was made have sufficiently changed to make the
project or activity for which the loan or grant was made available
H. R. 2646—229
no longer appropriate, the Secretary may allow the loan borrower
or grant recipient to use property (real and personal) purchased
or improved with the loan or grant funds, or proceeds from the
sale of property (real and personal) purchased with such funds,
for another project or activity that (as determined by the Sec-
retary)—
‘‘(1) will be carried out in the same area as the original
project or activity;
‘‘(2) meets the criteria for a loan or a grant described
in section 381E(d); and
‘‘(3) satisfies such additional requirements as are estab-
lished by the Secretary.’’.
SEC. 6019. SIMPLIFIED APPLICATION FORMS FOR LOAN GUARANTEES.
Section 333A of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1983a) (as amended by section 5307) is amended
by striking subsection (g) and inserting the following:
‘‘(g) SIMPLIFIED APPLICATION FORMS FOR LOAN GUARANTEES.—
‘‘(1) IN GENERAL.—The Secretary shall provide to lenders
a short, simplified application form for guarantees under this
title of—
‘‘(A) farmer program loans the principal amount of
which is $125,000 or less; and
‘‘(B) business and industry guaranteed loans under
section 310B(a)(1) the principal amount of which is—
‘‘(i) in the case of a loan guarantee made during
fiscal year 2002 or 2003, $400,000 or less; and
‘‘(ii) in the case of a loan guarantee made during
any subsequent fiscal year—
‘‘(I) $400,000 or less; or
‘‘(II) if the Secretary determines that there
is not a significant increased risk of a default
on the loan, $600,000 or less.
‘‘(2) WATER AND WASTE DISPOSAL GRANTS AND LOANS.—
The Secretary shall develop an application process that acceler-
ates, to the maximum extent practicable, the processing of
applications for water and waste disposal grants or direct or
guaranteed loans under paragraph (1) or (2) of section 306(a)
the grant award amount or principal loan amount, respectively,
of which is $300,000 or less.
‘‘(3) ADMINISTRATION.—In developing an application under
this subsection, the Secretary shall—
‘‘(A) consult with commercial and cooperative lenders;
and
‘‘(B) ensure that—
‘‘(i) the form can be completed manually or elec-
tronically, at the option of the lender;
‘‘(ii) the form minimizes the documentation
required to accompany the form;
‘‘(iii) the cost of completing and processing the
form is minimal; and
‘‘(iv) the form can be completed and processed in
an expeditious manner.’’.
SEC. 6020. DEFINITION OF RURAL AND RURAL AREA.
(a) IN GENERAL.—Section 343(a) of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1991(a)) is amended by adding
at the end the following:
H. R. 2646—230
‘‘(13) RURAL AND RURAL AREA.—
‘‘(A) IN
GENERAL.—Except as otherwise provided in
this paragraph, the terms ‘rural’ and ‘rural area’ mean
any area other than—
‘‘(i) a city or town that has a population of greater
than 50,000 inhabitants; and
‘‘(ii) the urbanized area contiguous and adjacent
to such a city or town.
‘‘(B) WATER AND WASTE DISPOSAL GRANTS AND DIRECT
AND GUARANTEED LOANS.—For the purpose of water and
waste disposal grants and direct and guaranteed loans
provided under paragraphs (1), (2), and (24) of section
306(a), the terms ‘rural’ and ‘rural area’ mean a city, town,
or unincorporated area that has a population of no more
than 10,000 inhabitants.
‘‘(C) COMMUNITY FACILITY LOANS AND GRANTS.—For the
purpose of community facility direct and guaranteed loans
and grants under paragraphs (1), (19), (20), (21), and (24)
of section 306(a), the terms ‘rural’ and ‘rural area’ mean
a city, town, or unincorporated area that has a population
of not more than 20,000 inhabitants.
‘‘(D) 
MULTIJURISDICTIONAL
REGIONAL
PLANNING
ORGANIZATIONS; NATIONAL RURAL DEVELOPMENT PARTNER-
SHIP.—In sections 306(a)(23) and 378, the term ‘rural area’
means—
‘‘(i) all the territory of a State that is not within
the boundary of any standard metropolitan statistical
area; and
‘‘(ii) all territory within any standard metropolitan
statistical area within a census tract having a popu-
lation density of less than 20 persons per square mile,
as determined by the Secretary according to the most
recent census of the United States as of any date.
‘‘(E) RURAL BUSINESS INVESTMENT PROGRAM.—In sub-
title H, the term ‘rural area’ means an area that is
located—
‘‘(i) outside a standard metropolitan statistical
area; or
‘‘(ii) within a community that has a population
of 50,000 inhabitants or less.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 306(a) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1926(a)) is amended by striking
paragraph (7).
(2) Section 381A of the Consolidated Farm and Rural
Development Act (7 U.S.C. 2009) is amended—
(A) by striking paragraph (1); and
(B) by redesignating paragraphs (2) and (3) as para-
graphs (1) and (2), respectively.
(3) Section 735 of the Agriculture, Rural Development,
Food and Drug Administration, and Related Agencies Appro-
priations Act, 1999 (112 Stat. 2681–29) is repealed.
SEC. 6021. NATIONAL RURAL DEVELOPMENT PARTNERSHIP.
Subtitle D of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1981 et seq.) (as amended by section 5321) is amended
by adding at the end the following:
H. R. 2646—231
‘‘SEC. 378. NATIONAL RURAL DEVELOPMENT PARTNERSHIP.
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) AGENCY
WITH
RURAL
RESPONSIBILITIES.—The term
‘agency with rural responsibilities’ means any executive agency
(as defined in section 105 of title 5, United States Code) that
implements a Federal law, or administers a program, targeted
at or having a significant impact on rural areas.
‘‘(2) COORDINATING COMMITTEE.—The term ‘Coordinating
Committee’ means the National Rural Development Coordi-
nating Committee established by subsection (c).
‘‘(3) PARTNERSHIP.—The term ‘Partnership’ means the
National Rural Development Partnership continued by sub-
section (b).
‘‘(4) STATE RURAL DEVELOPMENT COUNCIL.—The term ‘State
rural development council’ means a State rural development
council that meets the requirements of subsection (d).
‘‘(b) PARTNERSHIP.—
‘‘(1) IN
GENERAL.—The Secretary shall continue the
National Rural Development Partnership composed of—
‘‘(A) the Coordinating Committee; and
‘‘(B) State rural development councils.
‘‘(2) PURPOSES.—The purposes of the Partnership are to
empower and build the capacity of States and rural commu-
nities to design flexible and innovative responses to their own
special rural development needs, with local determinations of
progress and selection of projects and activities.
‘‘(3) GOVERNING PANEL.—
‘‘(A) IN GENERAL.—A panel consisting of representa-
tives of the Coordinating Committee and State rural
development councils shall be established to lead and
coordinate the strategic operation, policies, and practices
of the Partnership.
‘‘(B) ANNUAL REPORTS.—In conjunction with the Coordi-
nating Committee and State rural development councils,
the panel shall prepare and submit to Congress an annual
report on the activities of the Partnership.
‘‘(4) ROLE OF FEDERAL GOVERNMENT.—The role of the Fed-
eral Government in the Partnership may be that of a partner
and facilitator, with Federal agencies authorized—
‘‘(A) to cooperate with States to implement the Partner-
ship;
‘‘(B) to provide States with the technical and adminis-
trative support necessary to plan and implement tailored
rural development strategies to meet local needs;
‘‘(C) to ensure that the head of each agency with rural
responsibilities designates a senior-level agency official to
represent the agency on the Coordinating Committee and
directs appropriate field staff to participate fully with the
State rural development council within the jurisdiction of
the field staff; and
‘‘(D) to enter into cooperative agreements with, and
to provide grants and other assistance to, the Coordinating
Committee and State rural development councils.
‘‘(c) NATIONAL
RURAL
DEVELOPMENT
COORDINATING
COM-
MITTEE.—
H. R. 2646—232
‘‘(1) ESTABLISHMENT.—The Secretary shall establish a
National Rural Development Coordinating Committee within
the Department of Agriculture.
‘‘(2) COMPOSITION.—The Coordinating Committee shall be
composed of—
‘‘(A) 1 representative of each agency with rural respon-
sibilities; and
‘‘(B) representatives, approved by the Secretary, of—
‘‘(i) national associations of State, regional, local,
and tribal governments and intergovernmental and
multijurisdictional agencies and organizations;
‘‘(ii) national public interest groups;
‘‘(iii) other national nonprofit organizations that
elect to participate in the activities of the Coordinating
Committee; and
‘‘(iv) the private sector.
‘‘(3) DUTIES.—The Coordinating Committee shall—
‘‘(A) support the work of the State rural development
councils;
‘‘(B) facilitate coordination of rural development poli-
cies, programs, and activities among Federal agencies and
with those of State, local, and tribal governments, the
private sector, and nonprofit organizations;
‘‘(C) review and comment on policies, regulations, and
proposed legislation that affect or would affect rural areas
and gather and provide related information;
‘‘(D) develop and facilitate strategies to reduce or elimi-
nate administrative and regulatory impediments; and
‘‘(E) require each State rural development council
receiving funds under this section to submit an annual
report on the use of the funds, including a description
of strategic plans, goals, performance measures, and out-
comes for the State rural development council of the State.
‘‘(4) FEDERAL
PARTICIPATION
IN
COORDINATING
COM-
MITTEE.—
‘‘(A) IN
GENERAL.—A Federal employee shall fully
participate in the governance and operations of the Coordi-
nating Committee, including activities related to grants,
contracts, and other agreements, in accordance with this
section.
‘‘(B) CONFLICTS.—Participation by a Federal employee
in the Coordinating Committee in accordance with this
paragraph shall not constitute a violation of section 205
or 208 of title 18, United States Code.
‘‘(5) ADMINISTRATIVE SUPPORT.—The Secretary may provide
such administrative support for the Coordinating Committee
as the Secretary determines is necessary to carry out the duties
of the Coordinating Committee.
‘‘(6) PROCEDURES.—The Secretary may prescribe such regu-
lations, bylaws, or other procedures as are necessary for the
operation of the Coordinating Committee.
‘‘(d) STATE RURAL DEVELOPMENT COUNCILS.—
‘‘(1) ESTABLISHMENT.—Notwithstanding chapter 63 of title
31, United States Code, each State may elect to participate
in the Partnership by entering into an agreement with the
Secretary to recognize a State rural development council.
H. R. 2646—233
‘‘(2) COMPOSITION.—A State rural development council
shall—
‘‘(A) be composed of representatives of Federal, State,
local, and tribal governments, nonprofit organizations,
regional organizations, the private sector, and other entities
committed to rural advancement; and
‘‘(B) have a nonpartisan and nondiscriminatory mem-
bership that—
‘‘(i) is broad and representative of the economic,
social, and political diversity of the State; and
‘‘(ii) shall be responsible for the governance and
operations of the State rural development council.
‘‘(3) DUTIES.—A State rural development council shall—
‘‘(A) facilitate collaboration among Federal, State, local,
and tribal governments and the private and nonprofit sec-
tors in the planning and implementation of programs and
policies that have an impact on rural areas of the State;
‘‘(B) monitor, report, and comment on policies and pro-
grams that address, or fail to address, the needs of the
rural areas of the State;
‘‘(C) as part of the Partnership, in conjunction with
the Coordinating Committee, facilitate the development of
strategies to reduce or eliminate conflicting or duplicative
administrative or regulatory requirements of Federal,
State, local, and tribal governments; and
‘‘(D)(i) provide to the Coordinating Committee an
annual plan with goals and performance measures; and
‘‘(ii) submit to the Coordinating Committee an annual
report on the progress of the State rural development
council in meeting the goals and measures.
‘‘(4) FEDERAL PARTICIPATION IN STATE RURAL DEVELOPMENT
COUNCILS.—
‘‘(A) IN GENERAL.—A State Director for Rural Develop-
ment of the Department of Agriculture, other employees
of the Department, and employees of other Federal agencies
with rural responsibilities shall fully participate as voting
members in the governance and operations of State rural
development councils (including activities related to grants,
contracts, and other agreements in accordance with this
section) on an equal basis with other members of the State
rural development councils.
‘‘(B) CONFLICTS.—Participation by a Federal employee
in a State rural development council in accordance with
this paragraph shall not constitute a violation of section
205 or 208 of title 18, United States Code.
‘‘(e) ADMINISTRATIVE SUPPORT OF THE PARTNERSHIP.—
‘‘(1) DETAIL OF EMPLOYEES.—
‘‘(A) IN GENERAL.—In order to provide experience in
intergovernmental collaboration, the head of an agency
with rural responsibilities that elects to participate in the
Partnership may, and is encouraged to, detail to the Sec-
retary for the support of the Partnership 1 or more
employees of the agency with rural responsibilities without
reimbursement for a period of up to 1 year.
‘‘(B) CIVIL SERVICE STATUS.—The detail shall be with-
out interruption or loss of civil service status or privilege.
H. R. 2646—234
‘‘(2) ADDITIONAL SUPPORT.—The Secretary may provide for
any additional support staff to the Partnership as the Secretary
determines to be necessary to carry out the duties of the Part-
nership.
‘‘(3) INTERMEDIARIES.—The Secretary may enter into a con-
tract with a qualified intermediary under which the inter-
mediary shall be responsible for providing administrative and
technical assistance to a State rural development council,
including administering the financial assistance available to
the State rural development council.
‘‘(f) MATCHING REQUIREMENTS FOR STATE RURAL DEVELOPMENT
COUNCILS.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
a State rural development council shall provide matching funds,
or in-kind goods or services, to support the activities of the
State rural development council in an amount that is not less
than 33 percent of the amount of Federal funds received from
a Federal agency under subsection (g)(2).
‘‘(2) EXCEPTIONS TO MATCHING REQUIREMENT FOR CERTAIN
FEDERAL
FUNDS.—Paragraph (1) shall not apply to funds,
grants, funds provided under contracts or cooperative agree-
ments, gifts, contributions, or technical assistance received by
a State rural development council from a Federal agency that
are used—
‘‘(A) to support 1 or more specific program or project
activities; or
‘‘(B) to reimburse the State rural development council
for services provided to the Federal agency providing the
funds, grants, funds provided under contracts or coopera-
tive agreements, gifts, contributions, or technical assist-
ance.
‘‘(3) DEPARTMENT’S
SHARE.—The Secretary shall develop
a plan to decrease, over time, the share of the Department
of Agriculture of the cost of the core operations of State rural
development councils.
‘‘(g) FUNDING.—
‘‘(1) AUTHORIZATION OF APPROPRIATIONS.—There is author-
ized to be appropriated to carry out this section $10,000,000
for each of fiscal years 2003 through 2007.
‘‘(2) FEDERAL AGENCIES.—
‘‘(A) IN GENERAL.—Notwithstanding any other provi-
sion of law limiting the ability of an agency, along with
other agencies, to provide funds to the Coordinating Com-
mittee or a State rural development council in order to
carry out the purposes of this section, a Federal agency
may make grants, gifts, or contributions to, provide tech-
nical assistance to, or enter into contracts or cooperative
agreements with, the Coordinating Committee or a State
rural development council.
‘‘(B) ASSISTANCE.—Federal agencies are encouraged to
use funds made available for programs that have an impact
on rural areas to provide assistance to, and enter into
contracts with, the Coordinating Committee or a State
rural development council, as described in subparagraph
(A).
H. R. 2646—235
‘‘(3) CONTRIBUTIONS.—The Coordinating Committee and a
State rural development council may accept private contribu-
tions.
‘‘(h) TERMINATION.—The authority provided under this section
shall terminate on the date that is 5 years after the date of enact-
ment of this section.’’.
SEC. 6022. RURAL TELEWORK.
Subtitle D of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1981 et seq.) (as amended by section 6021) is amended
by adding at the end the following:
‘‘SEC. 379. RURAL TELEWORK.
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) ELIGIBLE ORGANIZATION.—The term ‘eligible organiza-
tion’ means a nonprofit entity, an educational institution, an
Indian tribe (as defined in section 4 of the Indian Self-Deter-
mination and Education Assistance Act (25 U.S.C. 450b)), or
any other organization, in a rural area (except for the institute),
that meets the requirements of this section and such other
requirements as are established by the Secretary.
‘‘(2) INSTITUTE.—The term ‘institute’ means a rural
telework institute established using a grant under subsection
(b).
‘‘(3) TELEWORK.—The term ‘telework’ means the use of
telecommunications to perform work functions at a rural work
center located outside the place of business of an employer.
‘‘(b) RURAL TELEWORK INSTITUTE.—
‘‘(1) IN GENERAL.—The Secretary shall make 1 or more
grants to an eligible organization to pay the Federal share
of the cost of establishing and operating a national rural
telework institute to carry out projects described in paragraph
(2).
‘‘(2) PROJECTS.—The institute shall use grant funds
received under this subsection to carry out a 5-year project—
‘‘(A) to serve as a clearinghouse for telework research
and development;
‘‘(B) to conduct outreach to rural communities and
rural workers;
‘‘(C) to develop and share best practices in rural
telework throughout the United States;
‘‘(D) to develop innovative, market-driven telework
projects and joint ventures with the private sector that
employ workers in rural areas in jobs that promote eco-
nomic self-sufficiency;
‘‘(E) to share information about the design and
implementation of telework arrangements;
‘‘(F) to support private sector businesses that are
transitioning to telework;
‘‘(G) to support and assist telework projects and
individuals at the State and local level; and
‘‘(H) to perform such other functions as the Secretary
considers appropriate.
‘‘(3) NON-FEDERAL SHARE.—
‘‘(A) IN GENERAL.—As a condition of receiving a grant
under this subsection, an eligible organization shall agree
to obtain, after the application of the eligible organization
H. R. 2646—236
has been approved and notice of award has been issued,
contributions from non-Federal sources that are equal to—
‘‘(i) during each of the first, second, and third
years of a project, 30 percent of the amount of the
grant; and
‘‘(ii) during each of the fourth and fifth years of
the project, 50 percent of the amount of the grant.
‘‘(B) INDIAN
TRIBES.—Notwithstanding subparagraph
(A), an Indian tribe may use any Federal funds made
available to the Indian tribe for self-governance to pay
the non-Federal contributions required under subparagraph
(A).
‘‘(C) FORM.—The non-Federal contributions required
under subparagraph (A) may be in the form of in-kind
contributions, including office equipment, office space, com-
puter software, consultant services, computer networking
equipment, and related services.
‘‘(c) TELEWORK GRANTS.—
‘‘(1) IN GENERAL.—Subject to paragraphs (2) through (5),
the Secretary shall make grants to eligible organizations to
pay the Federal share of the cost of—
‘‘(A) obtaining equipment and facilities to establish
or expand telework locations in rural areas; and
‘‘(B) operating telework locations in rural areas.
‘‘(2) APPLICATIONS.—To be eligible to receive a grant under
this subsection, an eligible organization shall submit to the
Secretary, and receive the approval of the Secretary of, an
application for the grant that demonstrates that the eligible
organization has adequate resources and capabilities to estab-
lish or expand a telework location in a rural area.
‘‘(3) NON-FEDERAL SHARE.—
‘‘(A) IN GENERAL.—As a condition of receiving a grant
under this subsection, an eligible organization shall agree
to obtain, after the application of the eligible organization
has been approved and notice of award has been issued,
contributions from non-Federal sources that are equal to
50 percent of the amount of the grant.
‘‘(B) INDIAN
TRIBES.—Notwithstanding subparagraph
(A), an Indian tribe may use Federal funds made available
to the tribe for self-governance to pay the non-Federal
contributions required under subparagraph (A).
‘‘(C) SOURCES.—The non-Federal contributions required
under subparagraph (A)—
‘‘(i) may be in the form of in-kind contributions,
including office equipment, office space, computer soft-
ware, consultant services, computer networking equip-
ment, and related services; and
‘‘(ii) may not be made from funds made available
for community development block grants under title
I of the Housing and Community Development Act
of 1974 (42 U.S.C. 5301 et seq.).
‘‘(4) DURATION.—The Secretary may not provide a grant
under this subsection to expand or operate a telework location
in a rural area after the date that is 3 years after the establish-
ment of the telework location.
H. R. 2646—237
‘‘(5) AMOUNT.—The amount of a grant provided to an
eligible organization under this subsection shall be not less
than $1,000,000 and not more than $2,000,000.
‘‘(d) APPLICABILITY
OF CERTAIN FEDERAL LAW.—An eligible
organization that receives funds under this section shall be subject
to the provisions of Federal law (including regulations) administered
by the Secretary of Labor or the Equal Employment Opportunity
Commission that govern the responsibilities of employers to
employees.
‘‘(e) REGULATIONS.—Not later than 180 days after the date
of enactment of this section, the Secretary shall promulgate regula-
tions to carry out this section.
‘‘(f) AUTHORIZATION OF APPROPRIATION.—There is authorized
to be appropriated to carry out this section $30,000,000 for each
of fiscal years 2002 through 2007, of which $5,000,000 shall be
provided to establish and support an institute under subsection
(b).’’.
SEC. 6023. HISTORIC BARN PRESERVATION.
Subtitle D of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1981 et seq.) (as amended by section 6022) is amended
by adding at the end the following:
‘‘SEC. 379A. HISTORIC BARN PRESERVATION.
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) BARN.—The term ‘barn’ means a building (other than
a dwelling) on a farm, ranch, or other agricultural operation
for—
‘‘(A) housing animals;
‘‘(B) storing or processing crops;
‘‘(C) storing and maintaining agricultural equipment;
or
‘‘(D) serving an essential or useful purpose related
to agricultural activities conducted on the adjacent land.
‘‘(2) ELIGIBLE
APPLICANT.—The term ‘eligible applicant’
means—
‘‘(A) a State department of agriculture (or a designee);
‘‘(B) a national or State nonprofit organization that—
‘‘(i) is described in section 501(c)(3) of the Internal
Revenue Code of 1986 and exempt from taxation under
section 501(a) of such Code; and
‘‘(ii) has experience or expertise, as determined
by the Secretary, in the identification, evaluation,
rehabilitation, preservation, or protection of historic
barns; and
‘‘(C) a State historic preservation office.
‘‘(3) HISTORIC
BARN.—The term ‘historic barn’ means a
barn that—
‘‘(A) is at least 50 years old;
‘‘(B) retains sufficient integrity of design, materials,
and construction to clearly identify the barn as an agricul-
tural building; and
‘‘(C) meets the criteria for listing on National, State,
or local registers or inventories of historic structures.
‘‘(4) SECRETARY.—The term ‘Secretary’ means the Sec-
retary, acting through the Under Secretary of Rural Develop-
ment.
H. R. 2646—238
‘‘(b) PROGRAM.—The Secretary shall establish a historic barn
preservation program—
‘‘(1) to assist States in developing a list of historic barns;
‘‘(2) to collect and disseminate information on historic
barns;
‘‘(3) to foster educational programs relating to the history,
construction techniques, rehabilitation, and contribution to
society of historic barns; and
‘‘(4) to sponsor and conduct research on—
‘‘(A) the history of barns; and
‘‘(B) best practices to protect and rehabilitate historic
barns from the effects of decay, fire, arson, and natural
disasters.
‘‘(c) GRANTS.—
‘‘(1) IN GENERAL.—The Secretary may make grants to, or
enter into contracts or cooperative agreements with, eligible
applicants to carry out an eligible project under paragraph
(2).
‘‘(2) ELIGIBLE PROJECTS.—A grant under this subsection
may be made to an eligible applicant for a project—
‘‘(A) to rehabilitate or repair a historic barn;
‘‘(B) to preserve a historic barn through—
‘‘(i) the installation of a fire protection system,
including fireproofing or fire detection system and
sprinklers; and
‘‘(ii) the installation of a system to prevent van-
dalism; and
‘‘(C) to identify, document, and conduct research on
a historic barn to develop and evaluate appropriate tech-
niques or best practices for protecting historic barns.
‘‘(3) REQUIREMENTS.—An eligible applicant that receives
a grant for a project under this subsection shall comply with
any standards established by the Secretary of the Interior
for historic preservation projects.
‘‘(4) 
AUTHORIZATION
OF
APPROPRIATIONS.—There 
are
authorized to be appropriated such sums as are necessary to
carry out this section for each of fiscal years 2002 through
2007.’’.
SEC. 6024. GRANTS FOR NOAA WEATHER RADIO TRANSMITTERS.
Subtitle D of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1981 et seq.) (as amended by section 6023)) is amended
by adding at the end the following:
‘‘SEC. 379B. GRANTS FOR NOAA WEATHER RADIO TRANSMITTERS.
‘‘(a) IN GENERAL.—The Secretary, acting through the Adminis-
trator of the Rural Utilities Service, may make grants to public
and nonprofit entities, and borrowers of loans made by the Rural
Utilities Service, for the Federal share of the cost of acquiring
radio transmitters to increase coverage of rural areas by the all
hazards weather radio broadcast system of the National Oceanic
and Atmospheric Administration.
‘‘(b) ELIGIBILITY.—To be eligible for a grant under this section,
an applicant shall provide to the Secretary—
‘‘(1) a binding commitment from a tower owner to place
the transmitter on a tower; and
‘‘(2) a description of how the tower placement will increase
coverage of a rural area by the all hazards weather radio
H. R. 2646—239
broadcast system of the National Oceanic and Atmospheric
Administration.
‘‘(c) FEDERAL SHARE.—A grant provided under this section shall
be not more than 75 percent of the total cost of acquiring a radio
transmitter, as described in subsection (a).
‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated such sums as are necessary to carry out this
section for each of fiscal years 2002 through 2007.’’.
SEC. 6025. GRANTS TO TRAIN FARM WORKERS IN NEW TECHNOLOGIES
AND TO TRAIN FARM WORKERS IN SPECIALIZED SKILLS
NECESSARY FOR HIGHER VALUE CROPS.
Subtitle D of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1981 et seq.) (as amended by section 6024) is amended
by adding at the end the following:
‘‘SEC. 379C. GRANTS TO TRAIN FARM WORKERS IN NEW TECH-
NOLOGIES AND TO TRAIN FARM WORKERS IN SPECIAL-
IZED SKILLS NECESSARY FOR HIGHER VALUE CROPS.
‘‘(a) IN GENERAL.—The Secretary shall make grants to nonprofit
organizations, or to a consortium of nonprofit organizations, agri-
businesses, State and local governments, agricultural labor
organizations, farmer or rancher cooperatives, and community-
based organizations with the capacity to train farm workers.
‘‘(b) USE OF FUNDS.—An entity to which a grant is made under
this section shall use the grant to train farm workers to use new
technologies and develop specialized skills for agricultural develop-
ment.
‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There is authorized
to be appropriated to carry out this section $10,000,000 for each
of fiscal years 2002 through 2007.’’.
SEC. 6026. RURAL COMMUNITY ADVANCEMENT PROGRAM.
(a) NATIONAL RESERVE PROGRAM.—Section 381E of the Consoli-
dated Farm and Rural Development Act (7 U.S.C. 2009d) is
amended—
(1) in subsection (b)—
(A) by striking paragraph (4); and
(B) by redesignating paragraph (5) as paragraph (4);
(2) by striking subsection (e);
(3) by redesignating subsections (f) through (h) as sub-
sections (e) through (g), respectively; and
(4) in subsection (g) (as so redesignated), by striking ‘‘sub-
section (g) of this section’’ and inserting ‘‘subsection (f)’’.
(b) RURAL VENTURE CAPITAL DEMONSTRATION PROGRAM.—Sec-
tion 381O of the Consolidated Farm and Rural Development Act
(7 U.S.C. 2009n) is repealed.
(c) CONFORMING AMENDMENTS.—Section 381G of the Consoli-
dated Farm and Rural Development Act (7 U.S.C. 2009f(a)) is
amended—
(1) in subsection (a), by striking ‘‘section 381E(g)’’ each
place it appears and inserting ‘‘section 381E(f)’’; and
(2) in subsection (b)(1), by striking ‘‘section 381E(h)’’ and
inserting ‘‘section 381E(g)’’.
H. R. 2646—240
SEC. 6027. DELTA REGIONAL AUTHORITY.
(a) VOTING.—Section 382B(c) of the Consolidated Farm and
Rural Development Act (7 U.S.C. 2009aa–1(c)) is amended by
striking paragraph (1) and inserting the following:
‘‘(1) IN GENERAL.—
‘‘(A) TEMPORARY METHOD.—During the period begin-
ning on the date of enactment of this subparagraph and
ending on December 31, 2004, a decision by the Authority
shall require the affirmative vote of the Federal cochair-
person and a majority of the State members (not including
any member representing a State that is delinquent under
subsection (g)(2)(C)) to be effective.
‘‘(B) PERMANENT
METHOD.—Effective beginning on
January 1, 2005, a decision by the Authority shall require
a majority vote of the Authority (not including any member
representing a State that is delinquent under subsection
(g)(2)(C)) to be effective.’’.
(b) AUTHORITY TO ISSUE REGULATIONS.—Section 382B(e)(4) of
the Consolidated Farm and Rural Development Act (7 U.S.C.
2009aa–1(e)(4)) is amended by striking ‘‘and rules’’ and inserting
‘‘, rules, and regulations’’.
(c) ECONOMIC AND COMMUNITY DEVELOPMENT GRANTS.—Section
382C(b) of the Consolidated Farm and Rural Development Act
(7 U.S.C. 2009aa–2(b)) is amended by striking paragraph (3).
(d) SUPPLEMENTS TO FEDERAL GRANT PROGRAMS.—Section 382D
of the Consolidated Farm and Rural Development Act (7 U.S.C.
2009aa–3) is amended to read as follows:
‘‘SEC. 382D. SUPPLEMENTS TO FEDERAL GRANT PROGRAMS.
‘‘(a) FINDING.—Congress finds that certain States and local
communities of the region, including local development districts,
may be unable to take maximum advantage of Federal grant pro-
grams for which the States and communities are eligible because—
‘‘(1) the States or communities lack the economic resources
to provide the required matching share; or
‘‘(2) there are insufficient funds available under the
applicable Federal law authorizing the Federal grant program
to meet pressing needs of the region.
‘‘(b) FEDERAL GRANT PROGRAM FUNDING.—Notwithstanding any
provision of law limiting the Federal share, the areas eligible for
assistance, or the authorizations of appropriations of any Federal
grant program, and in accordance with subsection (c), the Authority,
with the approval of the Federal cochairperson and with respect
to a project to be carried out in the region—
‘‘(1) may increase the Federal share of the costs of a project
under the Federal grant program to not more than 90 percent
(except as provided in section 382F(b)); and
‘‘(2) shall use amounts made available to carry out this
subtitle to pay the increased Federal share.
‘‘(c) CERTIFICATIONS.—
‘‘(1) IN GENERAL.—In the case of any project for which
all or any portion of the basic Federal share of the costs
of the project is proposed to be paid under this section, no
Federal contribution shall be made until the Federal official
administering the Federal law that authorizes the Federal
grant program certifies that the project—
H. R. 2646—241
‘‘(A) meets (except as provided in subsection (b)) the
applicable requirements of the applicable Federal grant
program; and
‘‘(B) could be approved for Federal contribution under
the Federal grant program if funds were available under
the law for the project.
‘‘(2) CERTIFICATION BY AUTHORITY.—
‘‘(A) IN GENERAL.—The certifications and determina-
tions required to be made by the Authority for approval
of projects under this Act in accordance with section 382I—
‘‘(i) shall be controlling; and
‘‘(ii) shall be accepted by the Federal agencies.
‘‘(B) ACCEPTANCE BY FEDERAL COCHAIRPERSON.—In the
case of any project described in paragraph (1), any finding,
report, certification, or documentation required to be sub-
mitted with respect to the project to the head of the depart-
ment, agency, or instrumentality of the Federal Govern-
ment responsible for the administration of the Federal
grant program under which the project is carried out shall
be accepted by the Federal cochairperson.’’.
(e) GRANTS
TO
LOCAL
DEVELOPMENT
AGENCIES.—Section
382E(b)(1) of the Consolidated Farm and Rural Development Act
(7 U.S.C. 2009aa–4(b)(1)) is amended by striking ‘‘may’’ and
inserting ‘‘shall’’.
(f) APPROVAL OF DEVELOPMENT PLANS AND PROJECTS.—Section
382I of the Consolidated Farm and Rural Development Act (7
U.S.C. 2009aa–8) is amended—
(1) in subsection (a), by inserting ‘‘and approved’’ after
‘‘reviewed’’; and
(2) in subsection (d), by striking ‘‘VOTES FOR DECISIONS.—
’’ and inserting ‘‘APPROVAL OF GRANT APPLICATIONS.—’’.
(g) AUTHORIZATION
OF APPROPRIATIONS.—Section 382M(a) of
the Consolidated Farm and Rural Development Act (7 U.S.C.
2009aa–12(a)) is amended by striking ‘‘2002’’ and inserting ‘‘2007’’.
(h) TERMINATION OF AUTHORITY.—Section 382N of the Consoli-
dated Farm and Rural Development Act (7 U.S.C. 2009aa–13) is
amended by striking ‘‘2002’’ and inserting ‘‘2007’’.
(i) DELTA REGION AGRICULTURAL ECONOMIC DEVELOPMENT.—
Subtitle D of the Consolidated Farm and Rural Development Act
(7 U.S.C. 1981 et seq.) (as amended by section 6025) is amended
by adding at the end the following:
‘‘SEC. 379D. DELTA REGION AGRICULTURAL ECONOMIC DEVELOP-
MENT.
‘‘(a) IN GENERAL.—The Secretary may make grants to assist
in the development of state-of-the-art technology in animal nutrition
(including research and development of the technology) and value-
added manufacturing to promote an economic platform for the Delta
region (as defined in section 382A) to relieve severe economic condi-
tions.
‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section $7,000,000 for each
of fiscal years 2002 through 2007.’’.
(j) DEFINITION OF LOWER MISSISSIPPI.—Section 4(2)(I) of the
Delta Development Act (42 U.S.C. 3121 note; Public Law 100–
460) is amended by inserting ‘‘Butler, Conecuh, Escambia, Monroe,’’
after ‘‘Russell,’’.
H. R. 2646—242
SEC. 6028. NORTHERN GREAT PLAINS REGIONAL AUTHORITY.
The Consolidated Farm and Rural Development Act (7 U.S.C.
1921 et seq.) is amended by adding at the end the following:
‘‘Subtitle G—Northern Great Plains
Regional Authority
‘‘SEC. 383A. DEFINITIONS.
‘‘In this subtitle:
‘‘(1) AUTHORITY.—The term ‘Authority’ means the Northern
Great Plains Regional Authority established by section 383B.
‘‘(2) FEDERAL GRANT PROGRAM.—The term ‘Federal grant
program’ means a Federal grant program to provide assistance
in—
‘‘(A) 
implementing 
the 
recommendations 
of 
the
Northern Great Plains Rural Development Commission
established by the Northern Great Plains Rural Develop-
ment Act (7 U.S.C. 2661 note; Public Law 103–318);
‘‘(B) acquiring or developing land;
‘‘(C) constructing or equipping a highway, road, bridge,
or facility;
‘‘(D) carrying out other economic development activi-
ties; or
‘‘(E) conducting research activities related to the activi-
ties described in subparagraphs (A) through (D).
‘‘(3) INDIAN TRIBE.—The term ‘Indian tribe’ has the meaning
given the term in section 4 of the Indian Self-Determination
and Education Assistance Act (25 U.S.C. 450b).
‘‘(4) REGION.—The term ‘region’ means the States of Iowa,
Minnesota, Nebraska, North Dakota, and South Dakota.
‘‘SEC. 383B. NORTHERN GREAT PLAINS REGIONAL AUTHORITY.
‘‘(a) ESTABLISHMENT.—
‘‘(1) IN GENERAL.—There is established the Northern Great
Plains Regional Authority.
‘‘(2) COMPOSITION.—The Authority shall be composed of—
‘‘(A) a Federal member, to be appointed by the Presi-
dent, by and with the advice and consent of the Senate;
‘‘(B) the Governor (or a designee of the Governor) of
each State in the region that elects to participate in the
Authority; and
‘‘(C) a member of an Indian tribe, who shall be a
chairperson of an Indian tribe in the region or a designee
of such a chairperson, to be appointed by the President,
by and with the advice and consent of the Senate.
‘‘(3) COCHAIRPERSONS.—The Authority shall be headed by—
‘‘(A) the Federal member, who shall serve—
‘‘(i) as the Federal cochairperson; and
‘‘(ii) as a liaison between the Federal Government
and the Authority;
‘‘(B) a State cochairperson, who—
‘‘(i) shall be a Governor of a participating State
in the region; and
‘‘(ii) shall be elected by the State members for
a term of not less than 1 year; and
‘‘(C) the member of an Indian tribe, who shall serve—
H. R. 2646—243
‘‘(i) as the tribal cochairperson; and
‘‘(ii) as a liaison between the governments of Indian
tribes in the region and the Authority.
‘‘(b) ALTERNATE MEMBERS.—
‘‘(1) ALTERNATE FEDERAL COCHAIRPERSON.—The President
shall appoint an alternate Federal cochairperson.
‘‘(2) STATE ALTERNATES.—
‘‘(A) IN GENERAL.—The State member of a participating
State may have a single alternate, who shall be—
‘‘(i) a resident of that State; and
‘‘(ii) appointed by the Governor of the State.
‘‘(B) QUORUM.—A State alternate member shall not
be counted toward the establishment of a quorum of the
members of the Authority in any case in which a quorum
of the State members is required to be present.
‘‘(3) ALTERNATE
TRIBAL
COCHAIRPERSON.—The President
shall appoint an alternate tribal cochairperson, by and with
the advice and consent of the Senate.
‘‘(4) DELEGATION OF POWER.—No power or responsibility
of the Authority specified in paragraphs (2) and (3) of subsection
(c), and no voting right of any member of the Authority, shall
be delegated to any person who is not—
‘‘(A) a member of the Authority; or
‘‘(B) entitled to vote in Authority meetings.
‘‘(c) VOTING.—
‘‘(1) IN GENERAL.—A decision by the Authority shall require
a majority vote of the Authority (not including any member
representing a State that is delinquent under subsection
(g)(2)(D)) to be effective.
‘‘(2) QUORUM.—A quorum of State members shall be
required to be present for the Authority to make any policy
decision, including—
‘‘(A) a modification or revision of an Authority policy
decision;
‘‘(B) approval of a State or regional development plan;
and
‘‘(C) any allocation of funds among the States.
‘‘(3) PROJECT
AND
GRANT
PROPOSALS.—The approval of
project and grant proposals shall be—
‘‘(A) a responsibility of the Authority; and
‘‘(B) conducted in accordance with section 383I.
‘‘(4) VOTING
BY
ALTERNATE
MEMBERS.—An alternate
member shall vote in the case of the absence, death, disability,
removal, or resignation of the Federal, State, or Indian tribe
member for whom the alternate member is an alternate.
‘‘(d) DUTIES.—The Authority shall—
‘‘(1) develop, on a continuing basis, comprehensive and
coordinated plans and programs to establish priorities and
approve grants for the economic development of the region,
giving due consideration to other Federal, State, tribal, and
local planning and development activities in the region;
‘‘(2) not later than 220 days after the date of enactment
of this subtitle, establish priorities in a development plan for
the region (including 5-year regional outcome targets);
‘‘(3) assess the needs and assets of the region based on
available research, demonstrations, investigations, assess-
ments, and evaluations of the region prepared by Federal,
H. R. 2646—244
State, tribal, and local agencies, universities, local development
districts, and other nonprofit groups;
‘‘(4) formulate and recommend to the Governors and legisla-
tures of States that participate in the Authority forms of inter-
state cooperation;
‘‘(5) work with State, tribal, and local agencies in developing
appropriate model legislation;
‘‘(6)(A) enhance the capacity of, and provide support for,
local development districts in the region; or
‘‘(B) if no local development district exists in an area in
a participating State in the region, foster the creation of a
local development district;
‘‘(7) encourage private investment in industrial, commer-
cial, and other economic development projects in the region;
and
‘‘(8) cooperate with and assist State governments with eco-
nomic development programs of participating States.
‘‘(e) ADMINISTRATION.—In carrying out subsection (d), the
Authority may—
‘‘(1) hold such hearings, sit and act at such times and
places, take such testimony, receive such evidence, and print
or otherwise reproduce and distribute a description of the pro-
ceedings and reports on actions by the Authority as the
Authority considers appropriate;
‘‘(2) authorize, through the Federal, State, or tribal cochair-
person or any other member of the Authority designated by
the Authority, the administration of oaths if the Authority
determines that testimony should be taken or evidence received
under oath;
‘‘(3) request from any Federal, State, tribal, or local agency
such information as may be available to or procurable by the
agency that may be of use to the Authority in carrying out
the duties of the Authority;
‘‘(4) adopt, amend, and repeal bylaws and rules governing
the conduct of business and the performance of duties of the
Authority;
‘‘(5) request the head of any Federal agency to detail to
the Authority such personnel as the Authority requires to carry
out duties of the Authority, each such detail to be without
loss of seniority, pay, or other employee status;
‘‘(6) request the head of any State agency, tribal govern-
ment, or local government to detail to the Authority such per-
sonnel as the Authority requires to carry out duties of the
Authority, each such detail to be without loss of seniority,
pay, or other employee status;
‘‘(7) provide for coverage of Authority employees in a suit-
able retirement and employee benefit system by—
‘‘(A) making arrangements or entering into contracts
with any participating State government or tribal govern-
ment; or
‘‘(B) 
otherwise 
providing 
retirement 
and 
other
employee benefit coverage;
‘‘(8) accept, use, and dispose of gifts or donations of services
or real, personal, tangible, or intangible property;
‘‘(9) enter into and perform such contracts, leases, coopera-
tive agreements, or other transactions as are necessary to carry
H. R. 2646—245
out Authority duties, including any contracts, leases, or coopera-
tive agreements with—
‘‘(A) any department, agency, or instrumentality of the
United States;
‘‘(B) any State (including a political subdivision,
agency, or instrumentality of the State);
‘‘(C) any Indian tribe in the region; or
‘‘(D) any person, firm, association, or corporation; and
‘‘(10) establish and maintain a central office and field offices
at such locations as the Authority may select.
‘‘(f) FEDERAL AGENCY COOPERATION.—A Federal agency shall—
‘‘(1) cooperate with the Authority; and
‘‘(2) provide, on request of the Federal cochairperson, appro-
priate assistance in carrying out this subtitle, in accordance
with applicable Federal laws (including regulations).
‘‘(g) ADMINISTRATIVE EXPENSES.—
‘‘(1) FEDERAL SHARE.—The Federal share of the administra-
tive expenses of the Authority shall be—
‘‘(A) for fiscal year 2002, 100 percent;
‘‘(B) for fiscal year 2003, 75 percent; and
‘‘(C) for fiscal year 2004 and each fiscal year thereafter,
50 percent.
‘‘(2) NON-FEDERAL SHARE.—
‘‘(A) IN
GENERAL.—The non-Federal share of the
administrative expenses of the Authority shall be paid
by non-Federal sources in the States that participate in
the Authority.
‘‘(B) SHARE
PAID
BY
EACH
STATE.—The share of
administrative expenses of the Authority to be paid by
non-Federal sources in each State shall be determined by
the Authority.
‘‘(C) NO FEDERAL PARTICIPATION.—The Federal cochair-
person shall not participate or vote in any decision under
subparagraph (B).
‘‘(D) DELINQUENT STATES.—If a State is delinquent in
payment of the State’s share of administrative expenses
of the Authority under this subsection—
‘‘(i) no assistance under this subtitle shall be pro-
vided to the State (including assistance to a political
subdivision or a resident of the State); and
‘‘(ii) no member of the Authority from the State
shall participate or vote in any action by the Authority.
‘‘(h) COMPENSATION.—
‘‘(1) FEDERAL AND TRIBAL COCHAIRPERSONS.—The Federal
cochairperson and the tribal cochairperson shall be com-
pensated by the Federal Government at the annual rate of
basic pay prescribed for level III of the Executive Schedule
in subchapter II of chapter 53 of title 5, United States Code.
‘‘(2) ALTERNATE FEDERAL AND TRIBAL COCHAIRPERSONS.—
The alternate Federal cochairperson and the alternate tribal
cochairperson—
‘‘(A) shall be compensated by the Federal Government
at the annual rate of basic pay prescribed for level V
of the Executive Schedule described in paragraph (1); and
‘‘(B) when not actively serving as an alternate, shall
perform such functions and duties as are delegated by
H. R. 2646—246
the Federal cochairperson or the tribal cochairperson,
respectively.
‘‘(3) STATE MEMBERS AND ALTERNATES.—
‘‘(A) IN
GENERAL.—A State shall compensate each
member and alternate representing the State on the
Authority at the rate established by State law.
‘‘(B) NO ADDITIONAL COMPENSATION.—No State member
or alternate member shall receive any salary, or any con-
tribution to or supplementation of salary from any source
other than the State for services provided by the member
or alternate member to the Authority.
‘‘(4) DETAILED EMPLOYEES.—
‘‘(A) IN
GENERAL.—No person detailed to serve the
Authority under subsection (e)(6) shall receive any salary
or any contribution to or supplementation of salary for
services provided to the Authority from—
‘‘(i) any source other than the State, tribal, local,
or intergovernmental agency from which the person
was detailed; or
‘‘(ii) the Authority.
‘‘(B) VIOLATION.—Any person that violates this para-
graph shall be fined not more than $5,000, imprisoned
not more than 1 year, or both.
‘‘(C) APPLICABLE LAW.—The Federal cochairperson, the
alternate Federal cochairperson, and any Federal officer
or employee detailed to duty on the Authority under sub-
section (e)(5) shall not be subject to subparagraph (A),
but shall remain subject to sections 202 through 209 of
title 18, United States Code.
‘‘(5) ADDITIONAL PERSONNEL.—
‘‘(A) COMPENSATION.—
‘‘(i) IN GENERAL.—The Authority may appoint and
fix the compensation of an executive director and such
other personnel as are necessary to enable the
Authority to carry out the duties of the Authority.
‘‘(ii) EXCEPTION.—Compensation under clause (i)
shall not exceed the maximum rate for the Senior
Executive Service under section 5382 of title 5, United
States Code, including any applicable locality-based
comparability payment that may be authorized under
section 5304(h)(2)(C) of that title.
‘‘(B) EXECUTIVE
DIRECTOR.—The executive director
shall be responsible for—
‘‘(i) the carrying out of the administrative duties
of the Authority;
‘‘(ii) direction of the Authority staff; and
‘‘(iii) such other duties as the Authority may
assign.
‘‘(C) NO
FEDERAL
EMPLOYEE
STATUS.—No member,
alternate, officer, or employee of the Authority (except the
Federal cochairperson of the Authority, the alternate and
staff for the Federal cochairperson, and any Federal
employee detailed to the Authority under subsection (e)(5))
shall be considered to be a Federal employee for any pur-
pose.
‘‘(i) CONFLICTS OF INTEREST.—
H. R. 2646—247
‘‘(1) IN
GENERAL.—Except as provided under paragraph
(2), no State member, Indian tribe member, State alternate,
officer, or employee of the Authority shall participate personally
and substantially as a member, alternate, officer, or employee
of the Authority, through decision, approval, disapproval, rec-
ommendation, the rendering of advice, investigation, or other-
wise, in any proceeding, application, request for a ruling or
other determination, contract, claim, controversy, or other
matter in which, to knowledge of the member, alternate, officer,
or employee—
‘‘(A) the member, alternate, officer, or employee;
‘‘(B) the spouse, minor child, partner, or organization
(other than a State or political subdivision of the State
or the Indian tribe) of the member, alternate, officer, or
employee, in which the member, alternate, officer, or
employee is serving as officer, director, trustee, partner,
or employee; or
‘‘(C) any person or organization with whom the
member, alternate, officer, or employee is negotiating or
has any arrangement concerning prospective employment;
has a financial interest.
‘‘(2) DISCLOSURE.—Paragraph (1) shall not apply if the
State member, Indian tribe member, alternate, officer, or
employee—
‘‘(A) immediately advises the Authority of the nature
and circumstances of the proceeding, application, request
for a ruling or other determination, contract, claim, con-
troversy, or other particular matter presenting a potential
conflict of interest;
‘‘(B) makes full disclosure of the financial interest;
and
‘‘(C) before the proceeding concerning the matter pre-
senting the conflict of interest, receives a written deter-
mination by the Authority that the interest is not so
substantial as to be likely to affect the integrity of the
services that the Authority may expect from the State
member, Indian tribe member, alternate, officer, or
employee.
‘‘(3) VIOLATION.—Any person that violates this subsection
shall be fined not more than $10,000, imprisoned not more
than 2 years, or both.
‘‘(j) VALIDITY
OF
CONTRACTS, LOANS, 
AND
GRANTS.—The
Authority may declare void any contract, loan, or grant of or by
the Authority in relation to which the Authority determines that
there has been a violation of any provision under subsection (h)(4)
or subsection (i) of this subtitle, or sections 202 through 209 of
title 18, United States Code.
‘‘SEC. 383C. ECONOMIC AND COMMUNITY DEVELOPMENT GRANTS.
‘‘(a) IN GENERAL.—The Authority may approve grants to States,
Indian tribes, local governments, and public and nonprofit organiza-
tions for projects, approved in accordance with section 383I—
‘‘(1) to develop the transportation and telecommunication
infrastructure of the region for the purpose of facilitating eco-
nomic development in the region (except that grants for this
purpose may be made only to States, Indian tribes, local govern-
ments, and nonprofit organizations);
H. R. 2646—248
‘‘(2) to assist the region in obtaining the job training,
employment-related education, and business development (with
an emphasis on entrepreneurship) that are needed to build
and maintain strong local economies;
‘‘(3) to provide assistance to severely distressed and under-
developed areas that lack financial resources for improving
basic public services;
‘‘(4) to provide assistance to severely distressed and under-
developed areas that lack financial resources for equipping
industrial parks and related facilities; and
‘‘(5) to otherwise achieve the purposes of this subtitle.
‘‘(b) FUNDING.—
‘‘(1) IN GENERAL.—Funds for grants under subsection (a)
may be provided—
‘‘(A) entirely from appropriations to carry out this sec-
tion;
‘‘(B) in combination with funds available under another
Federal grant program; or
‘‘(C) from any other source.
‘‘(2) PRIORITY OF FUNDING.—To best build the foundations
for long-term economic development and to complement other
Federal, State, and tribal resources in the region, Federal funds
available under this subtitle shall be focused on the activities
in the following order or priority:
‘‘(A) Basic public infrastructure in distressed counties
and isolated areas of distress.
‘‘(B) Transportation and telecommunication infrastruc-
ture for the purpose of facilitating economic development
in the region.
‘‘(C) 
Business 
development, 
with 
emphasis 
on
entrepreneurship.
‘‘(D) Job training or employment-related education,
with emphasis on use of existing public educational institu-
tions located in the region.
‘‘SEC. 383D. SUPPLEMENTS TO FEDERAL GRANT PROGRAMS.
‘‘(a) FINDING.—Congress finds that certain States and local
communities of the region, including local development districts,
may be unable to take maximum advantage of Federal grant pro-
grams for which the States and communities are eligible because—
‘‘(1) they lack the economic resources to provide the
required matching share; or
‘‘(2) there are insufficient funds available under the
applicable Federal law authorizing the Federal grant program
to meet pressing needs of the region.
‘‘(b) FEDERAL GRANT PROGRAM FUNDING.—Notwithstanding any
provision of law limiting the Federal share, the areas eligible for
assistance, or the authorizations of appropriations, under any Fed-
eral grant program, and in accordance with subsection (c), the
Authority, with the approval of the Federal cochairperson and with
respect to a project to be carried out in the region—
‘‘(1) may increase the Federal share of the costs of a project
under any Federal grant program to not more than 90 percent
(except as provided in section 383F(b)); and
‘‘(2) shall use amounts made available to carry out this
subtitle to pay the increased Federal share.
‘‘(c) CERTIFICATIONS.—
H. R. 2646—249
‘‘(1) IN GENERAL.—In the case of any project for which
all or any portion of the basic Federal share of the costs
of the project is proposed to be paid under this section, no
Federal contribution shall be made until the Federal official
administering the Federal law that authorizes the Federal
grant program certifies that the project—
‘‘(A) meets (except as provided in subsection (b)) the
applicable requirements of the applicable Federal grant
program; and
‘‘(B) could be approved for Federal contribution under
the Federal grant program if funds were available under
the law for the project.
‘‘(2) CERTIFICATION BY AUTHORITY.—
‘‘(A) IN GENERAL.—The certifications and determina-
tions required to be made by the Authority for approval
of projects under this Act in accordance with section 383I—
‘‘(i) shall be controlling; and
‘‘(ii) shall be accepted by the Federal agencies.
‘‘(B) ACCEPTANCE BY FEDERAL COCHAIRPERSON.—In the
case of any project described in paragraph (1), any finding,
report, certification, or documentation required to be sub-
mitted with respect to the project to the head of the depart-
ment, agency, or instrumentality of the Federal Govern-
ment responsible for the administration of the Federal
grant program under which the project is carried out shall
be accepted by the Federal cochairperson.
‘‘SEC. 383E. LOCAL DEVELOPMENT DISTRICTS AND ORGANIZATIONS
AND NORTHERN GREAT PLAINS INC.
‘‘(a) DEFINITION
OF LOCAL DEVELOPMENT DISTRICT.—In this
section, the term ‘local development district’ means an entity—
‘‘(1) that—
‘‘(A) is a planning district in existence on the date
of enactment of this subtitle that is recognized by the
Economic Development Administration of the Department
of Commerce; or
‘‘(B) is—
‘‘(i) organized and operated in a manner that
ensures broad-based community participation and an
effective opportunity for other nonprofit groups to con-
tribute to the development and implementation of pro-
grams in the region;
‘‘(ii) governed by a policy board with at least a
simple majority of members consisting of—
‘‘(I) elected officials or employees of a general
purpose unit of local government who have been
appointed to represent the government; or
‘‘(II) individuals appointed by the general pur-
pose unit of local government to represent the
government;
‘‘(iii) certified to the Authority as having a charter
or authority that includes the economic development
of counties or parts of counties or other political sub-
divisions within the region—
‘‘(I) by the Governor of each State in which
the entity is located; or
H. R. 2646—250
‘‘(II) by the State officer designated by the
appropriate State law to make the certification;
and
‘‘(iv)(I) a nonprofit incorporated body organized or
chartered under the law of the State in which the
entity is located;
‘‘(II) a nonprofit agency or instrumentality of a
State or local government;
‘‘(III) a public organization established before the
date of enactment of this subtitle under State law
for creation of multi-jurisdictional, area-wide planning
organizations; or
‘‘(IV) a nonprofit association or combination of
bodies, agencies, and instrumentalities described in
subclauses (I) through (III); and
‘‘(2) 
that 
has 
not, 
as 
certified 
by 
the 
Federal
cochairperson—
‘‘(A) inappropriately used Federal grant funds from
any Federal source; or
‘‘(B) appointed an officer who, during the period in
which another entity inappropriately used Federal grant
funds from any Federal source, was an officer of the other
entity.
‘‘(b) GRANTS TO LOCAL DEVELOPMENT DISTRICTS.—
‘‘(1) IN
GENERAL.—The Authority may make grants for
administrative expenses under this section.
‘‘(2) CONDITIONS FOR GRANTS.—
‘‘(A) MAXIMUM
AMOUNT.—The amount of any grant
awarded under paragraph (1) shall not exceed 80 percent
of the administrative expenses of the local development
district receiving the grant.
‘‘(B) MAXIMUM PERIOD.—No grant described in para-
graph (1) shall be awarded to a State agency certified
as a local development district for a period greater than
3 years.
‘‘(C) LOCAL
SHARE.—The contributions of a local
development district for administrative expenses may be
in cash or in kind, fairly evaluated, including space, equip-
ment, and services.
‘‘(c) DUTIES
OF
LOCAL
DEVELOPMENT
DISTRICTS.—A local
development district shall—
‘‘(1) operate as a lead organization serving multicounty
areas in the region at the local level; and
‘‘(2) serve as a liaison between State, tribal, and local
governments, nonprofit organizations (including community-
based groups and educational institutions), the business
community, and citizens that—
‘‘(A) are involved in multijurisdictional planning;
‘‘(B) provide technical assistance to local jurisdictions
and potential grantees; and
‘‘(C) provide leadership and civic development assist-
ance.
‘‘(d) NORTHERN GREAT PLAINS INC.—Northern Great Plains Inc.,
a nonprofit corporation incorporated in the State of Minnesota
to implement the recommendations of the Northern Great Plains
Rural Development Commission established by the Northern Great
H. R. 2646—251
Plains Rural Development Act (7 U.S.C. 2661 note; Public Law
103–318)—
‘‘(1) shall serve as an independent, primary resource for
the Authority on issues of concern to the region;
‘‘(2) shall advise the Authority on development of inter-
national trade;
‘‘(3) may provide research, education, training, and other
support to the Authority; and
‘‘(4) may carry out other activities on its own behalf or
on behalf of other entities.
‘‘SEC. 383F. DISTRESSED COUNTIES AND AREAS AND NONDISTRESSED
COUNTIES.
‘‘(a) DESIGNATIONS.—Not later than 90 days after the date
of enactment of this subtitle, and annually thereafter, the Authority,
in accordance with such criteria as the Authority may establish,
shall designate—
‘‘(1) as distressed counties, counties in the region that
are the most severely and persistently distressed and under-
developed and have high rates of poverty, unemployment, or
outmigration;
‘‘(2) as nondistressed counties, counties in the region that
are not designated as distressed counties under paragraph (1);
and
‘‘(3) as isolated areas of distress, areas located in nondis-
tressed counties (as designated under paragraph (2)) that have
high rates of poverty, unemployment, or outmigration.
‘‘(b) DISTRESSED COUNTIES.—
‘‘(1) IN
GENERAL.—The Authority shall allocate at least
75 percent of the appropriations made available under section
383M for programs and projects designed to serve the needs
of distressed counties and isolated areas of distress in the
region.
‘‘(2) FUNDING LIMITATIONS.—The funding limitations under
section 383D(b) shall not apply to a project to provide transpor-
tation or telecommunication or basic public services to residents
of 1 or more distressed counties or isolated areas of distress
in the region.
‘‘(c) NONDISTRESSED COUNTIES.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
no funds shall be provided under this subtitle for a project
located in a county designated as a nondistressed county under
subsection (a)(2).
‘‘(2) EXCEPTIONS.—
‘‘(A) IN GENERAL.—The funding prohibition under para-
graph (1) shall not apply to grants to fund the administra-
tive expenses of local development districts under section
383E(b).
‘‘(B) MULTICOUNTY
PROJECTS.—The Authority may
waive the application of the funding prohibition under para-
graph (1) to—
‘‘(i) a multicounty project that includes participa-
tion by a nondistressed county; or
‘‘(ii) any other type of project;
if the Authority determines that the project could bring
significant benefits to areas of the region outside a nondis-
tressed county.
H. R. 2646—252
‘‘(C) ISOLATED AREAS OF DISTRESS.—For a designation
of an isolated area of distress for assistance to be effective,
the designation shall be supported—
‘‘(i) by the most recent Federal data available;
or
‘‘(ii) if no recent Federal data are available, by
the most recent data available through the government
of the State in which the isolated area of distress
is located.
‘‘(d) TRANSPORTATION, TELECOMMUNICATION, AND BASIC PUBLIC
INFRASTRUCTURE.—The Authority shall allocate at least 50 percent
of any funds made available under section 383M for transportation,
telecommunication, and basic public infrastructure projects author-
ized under paragraphs (1) and (3) of section 383C(a).
‘‘SEC. 383G. DEVELOPMENT PLANNING PROCESS.
‘‘(a) STATE DEVELOPMENT PLAN.—In accordance with policies
established by the Authority, each State member shall submit a
development plan for the area of the region represented by the
State member.
‘‘(b) CONTENT OF PLAN.—A State development plan submitted
under subsection (a) shall reflect the goals, objectives, and priorities
identified in the regional development plan developed under section
383B(d)(2).
‘‘(c) CONSULTATION WITH INTERESTED LOCAL PARTIES.—In car-
rying out the development planning process (including the selection
of programs and projects for assistance), a State may—
‘‘(1) consult with—
‘‘(A) local development districts; and
‘‘(B) local units of government; and
‘‘(2) take into consideration the goals, objectives, priorities,
and recommendations of the entities described in paragraph
(1).
‘‘(d) PUBLIC PARTICIPATION.—
‘‘(1) IN GENERAL.—The Authority and applicable State and
local development districts shall encourage and assist, to the
maximum extent practicable, public participation in the
development, revision, and implementation of all plans and
programs under this subtitle.
‘‘(2) REGULATIONS.—The Authority shall develop guidelines
for providing public participation described in paragraph (1),
including public hearings.
‘‘SEC. 383H. PROGRAM DEVELOPMENT CRITERIA.
‘‘(a) IN GENERAL.—In considering programs and projects to
be provided assistance under this subtitle, and in establishing a
priority ranking of the requests for assistance provided to the
Authority, the Authority shall follow procedures that ensure, to
the maximum extent practicable, consideration of—
‘‘(1) the relationship of the project or class of projects to
overall regional development;
‘‘(2) the per capita income and poverty and unemployment
and outmigration rates in an area;
‘‘(3) the financial resources available to the applicants for
assistance seeking to carry out the project, with emphasis on
ensuring that projects are adequately financed to maximize
the probability of successful economic development;
H. R. 2646—253
‘‘(4) the importance of the project or class of projects in
relation to other projects or classes of projects that may be
in competition for the same funds;
‘‘(5) the prospects that the project for which assistance
is sought will improve, on a continuing rather than a temporary
basis, the opportunities for employment, the average level of
income, or the economic development of the area to be served
by the project; and
‘‘(6) the extent to which the project design provides for
detailed outcome measurements by which grant expenditures
and the results of the expenditures may be evaluated.
‘‘(b) NO
RELOCATION
ASSISTANCE.—No financial assistance
authorized by this subtitle shall be used to assist a person or
entity in relocating from one area to another, except that financial
assistance may be used as otherwise authorized by this title to
attract businesses from outside the region to the region.
‘‘(c) MAINTENANCE
OF EFFORT.—Funds may be provided for
a program or project in a State under this subtitle only if the
Authority determines that the level of Federal or State financial
assistance provided under a law other than this subtitle, for the
same type of program or project in the same area of the State
within the region, will not be reduced as a result of funds made
available by this subtitle.
‘‘SEC. 383I. APPROVAL OF DEVELOPMENT PLANS AND PROJECTS.
‘‘(a) IN GENERAL.—A State or regional development plan or
any multistate subregional plan that is proposed for development
under this subtitle shall be reviewed by the Authority.
‘‘(b) EVALUATION BY STATE MEMBER.—An application for a grant
or any other assistance for a project under this subtitle shall be
made through and evaluated for approval by the State member
of the Authority representing the applicant.
‘‘(c) CERTIFICATION.—An application for a grant or other assist-
ance for a project shall be approved only on certification by the
State member that the application for the project—
‘‘(1) describes ways in which the project complies with
any applicable State development plan;
‘‘(2) meets applicable criteria under section 383H;
‘‘(3) provides adequate assurance that the proposed project
will be properly administered, operated, and maintained; and
‘‘(4) otherwise meets the requirements of this subtitle.
‘‘(d) VOTES FOR DECISIONS.—On certification by a State member
of the Authority of an application for a grant or other assistance
for a specific project under this section, an affirmative vote of
the Authority under section 383B(c) shall be required for approval
of the application.
‘‘SEC. 383J. CONSENT OF STATES.
‘‘Nothing in this subtitle requires any State to engage in or
accept any program under this subtitle without the consent of
the State.
‘‘SEC. 383K. RECORDS.
‘‘(a) RECORDS OF THE AUTHORITY.—
‘‘(1) IN GENERAL.—The Authority shall maintain accurate
and complete records of all transactions and activities of the
Authority.
H. R. 2646—254
‘‘(2) AVAILABILITY.—All records of the Authority shall be
available for audit and examination by the Comptroller General
of the United States and the Inspector General of the Depart-
ment of Agriculture (including authorized representatives of
the Comptroller General and the Inspector General of the
Department of Agriculture).
‘‘(b) RECORDS OF RECIPIENTS OF FEDERAL ASSISTANCE.—
‘‘(1) IN GENERAL.—A recipient of Federal funds under this
subtitle shall, as required by the Authority, maintain accurate
and complete records of transactions and activities financed
with Federal funds and report to the Authority on the trans-
actions and activities to the Authority.
‘‘(2) AVAILABILITY.—All records required under paragraph
(1) shall be available for audit by the Comptroller General
of the United States, the Inspector General of the Department
of Agriculture, and the Authority (including authorized rep-
resentatives of the Comptroller General, the Inspector General
of the Department of Agriculture, and the Authority).
‘‘(c) ANNUAL AUDIT.—The Inspector General of the Department
of Agriculture shall audit the activities, transactions, and records
of the Authority on an annual basis.
‘‘SEC. 383L. ANNUAL REPORT.
‘‘Not later than 180 days after the end of each fiscal year,
the Authority shall submit to the President and to Congress a
report describing the activities carried out under this subtitle.
‘‘SEC. 383M. AUTHORIZATION OF APPROPRIATIONS.
‘‘(a) IN GENERAL.—There is authorized to be appropriated to
the Authority to carry out this subtitle $30,000,000 for each of
fiscal years 2002 through 2007, to remain available until expended.
‘‘(b) ADMINISTRATIVE EXPENSES.—Not more than 5 percent of
the amount appropriated under subsection (a) for a fiscal year
shall be used for administrative expenses of the Authority.
‘‘(c) MINIMUM STATE SHARE OF GRANTS.—Notwithstanding any
other provision of this subtitle, for any fiscal year, the aggregate
amount of grants received by a State and all persons or entities
in the State under this subtitle shall be not less than 1⁄3 of the
product obtained by multiplying—
‘‘(1) the aggregate amount of grants under this subtitle
for the fiscal year; and
‘‘(2) the ratio that—
‘‘(A) the population of the State (as determined by
the Secretary of Commerce based on the most recent decen-
nial census for which data are available); bears to
‘‘(B) the population of the region (as so determined).
‘‘SEC. 383N. TERMINATION OF AUTHORITY.
‘‘The authority provided by this subtitle terminates effective
October 1, 2007.’’.
SEC. 6029. RURAL BUSINESS INVESTMENT PROGRAM.
The Consolidated Farm and Rural Development Act (as
amended by section 6028) is amended by adding at the end the
following:
H. R. 2646—255
‘‘Subtitle H—Rural Business Investment
Program
‘‘SEC. 384A. DEFINITIONS.
‘‘In this subtitle:
‘‘(1) ARTICLES.—The term ‘articles’ means articles of incor-
poration for an incorporated body or the functional equivalent
or other similar documents specified by the Secretary for other
business entities.
‘‘(2) 
DEVELOPMENTAL
VENTURE
CAPITAL.—The 
term
‘developmental venture capital’ means capital in the form of
equity capital investments in rural business investment compa-
nies with an objective of fostering economic development in
rural areas.
‘‘(3) EMPLOYEE WELFARE BENEFIT PLAN; PENSION PLAN.—
‘‘(A) IN GENERAL.—The terms ‘employee welfare benefit
plan’ and ‘pension plan’ have the meanings given the terms
in section 3 of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1002).
‘‘(B) INCLUSIONS.—The terms ‘employee welfare benefit
plan’ and ‘pension plan’ include—
‘‘(i) public and private pension or retirement plans
subject to this subtitle; and
‘‘(ii) similar plans not covered by this subtitle that
have been established, and that are maintained, by
the Federal Government or any State (including by
a political subdivision, agency, or instrumentality of
the Federal Government or a State) for the benefit
of employees.
‘‘(4) EQUITY
CAPITAL.—The term ‘equity capital’ means
common or preferred stock or a similar instrument, including
subordinated debt with equity features.
‘‘(5) LEVERAGE.—The term ‘leverage’ includes—
‘‘(A) debentures purchased or guaranteed by the Sec-
retary;
‘‘(B) participating securities purchased or guaranteed
by the Secretary; and
‘‘(C) preferred securities outstanding as of the date
of enactment of this subtitle.
‘‘(6) LICENSE.—The term ‘license’ means a license issued
by the Secretary as provided in section 384D(e).
‘‘(7) LIMITED
LIABILITY
COMPANY.—The term ‘limited
liability company’ means a business entity that is organized
and operating in accordance with a State limited liability com-
pany law approved by the Secretary.
‘‘(8) MEMBER.—The term ‘member’ means, with respect to
a rural business investment company that is a limited liability
company, a holder of an ownership interest or a person other-
wise admitted to membership in the limited liability company.
‘‘(9) OPERATIONAL
ASSISTANCE.—The term ‘operational
assistance’ means management, marketing, and other technical
assistance that assists a rural business concern with business
development.
‘‘(10) PARTICIPATION AGREEMENT.—The term ‘participation
agreement’ means an agreement, between the Secretary and
a rural business investment company granted final approval
H. R. 2646—256
under section 384D(e), that requires the rural business invest-
ment company to make investments in smaller enterprises
in rural areas.
‘‘(11) PRIVATE CAPITAL.—
‘‘(A) IN GENERAL.—The term ‘private capital’ means
the total of—
‘‘(i)(I) the paid-in capital and paid-in surplus of
a corporate rural business investment company;
‘‘(II) the contributed capital of the partners of a
partnership rural business investment company; or
‘‘(III) the equity investment of the members of
a limited liability company rural business investment
company; and
‘‘(ii) unfunded binding commitments from investors
that meet criteria established by the Secretary to con-
tribute capital to the rural business investment com-
pany, except that—
‘‘(I) unfunded commitments may be counted
as private capital for purposes of approval by the
Secretary of any request for leverage; but
‘‘(II) leverage shall not be funded based on
the commitments.
‘‘(B) EXCLUSIONS.—The term ‘private capital’ does not
include—
‘‘(i) any funds borrowed by a rural business invest-
ment company from any source;
‘‘(ii) any funds obtained through the issuance of
leverage; or
‘‘(iii) any funds obtained directly or indirectly from
the Federal Government or any State (including by
a political subdivision, agency, or instrumentality of
the Federal Government or a State), except for—
‘‘(I) funds obtained from the business revenues
(excluding any governmental appropriation) of any
federally 
chartered 
or 
government-sponsored
enterprise established prior to the date of enact-
ment of this subtitle;
‘‘(II) funds invested by an employee welfare
benefit plan or pension plan; and
‘‘(III) any qualified nonprivate funds (if the
investors of the qualified nonprivate funds do not
control, directly or indirectly, the management,
board of directors, general partners, or members
of the rural business investment company).
‘‘(12) QUALIFIED NONPRIVATE FUNDS.—The term ‘qualified
nonprivate funds’ means any—
‘‘(A) funds directly or indirectly invested in any
applicant or rural business investment company on or
before the date of enactment of this subtitle, by any Federal
agency, other than the Department of Agriculture, under
a provision of law explicitly mandating the inclusion of
those funds in the definition of the term ‘private capital’;
and
‘‘(B) funds invested in any applicant or rural business
investment company by 1 or more entities of any State
(including by a political subdivision, agency, or instrumen-
tality of the State and including any guarantee extended
H. R. 2646—257
by those entities) in an aggregate amount that does not
exceed 33 percent of the private capital of the applicant
or rural business investment company.
‘‘(13) RURAL BUSINESS CONCERN.—The term ‘rural business
concern’ means—
‘‘(A) a public, private, or cooperative for-profit or non-
profit organization;
‘‘(B) a for-profit or nonprofit business controlled by
an Indian tribe on a Federal or State reservation or other
federally recognized Indian tribal group; or
‘‘(C) any other person or entity;
that primarily operates in a rural area, as determined by the
Secretary.
‘‘(14) RURAL BUSINESS INVESTMENT COMPANY.—The term
‘rural business investment company’ means a company that—
‘‘(A) has been granted final approval by the Secretary
under section 384D(e); and
‘‘(B) has entered into a participation agreement with
the Secretary.
‘‘(15) SMALLER ENTERPRISE.—The term ‘smaller enterprise’
means any rural business concern that, together with its
affiliates—
‘‘(A) has—
‘‘(i) a net financial worth of not more than
$6,000,000, as of the date on which assistance is pro-
vided under this subtitle to the rural business concern;
and
‘‘(ii) an average net income for the 2-year period
preceding the date on which assistance is provided
under this subtitle to the rural business concern, of
not more than $2,000,000, after Federal income taxes
(excluding any carryover losses), except that, for pur-
poses of this clause, if the rural business concern is
not required by law to pay Federal income taxes at
the enterprise level, but is required to pass income
through to the shareholders, partners, beneficiaries,
or other equitable owners of the business concern, the
net income of the business concern shall be determined
by allowing a deduction in an amount equal to the
total of—
‘‘(I) if the rural business concern is not
required by law to pay State (and local, if any)
income taxes at the enterprise level, the net income
(determined without regard to this clause), multi-
plied by the marginal State income tax rate (or
by the combined State and local income tax rates,
as applicable) that would have applied if the busi-
ness concern were a corporation; and
‘‘(II) the net income (so determined) less any
deduction for State (and local) income taxes cal-
culated under subclause (I), multiplied by the mar-
ginal Federal income tax rate that would have
applied if the rural business concern were a cor-
poration; or
‘‘(B) satisfies the standard industrial classification size
standards established by the Administrator of the Small
H. R. 2646—258
Business Administration for the industry in which the rural
business concern is primarily engaged.
‘‘SEC. 384B. PURPOSES.
‘‘The purposes of the Rural Business Investment Program estab-
lished under this subtitle are—
‘‘(1) to promote economic development and the creation
of wealth and job opportunities in rural areas and among
individuals living in those areas by encouraging developmental
venture capital investments in smaller enterprises primarily
located in rural areas; and
‘‘(2) to establish a developmental venture capital program,
with the mission of addressing the unmet equity investment
needs of small enterprises located in rural areas, by authorizing
the Secretary—
‘‘(A) to enter into participation agreements with rural
business investment companies;
‘‘(B) to guarantee debentures of rural business invest-
ment companies to enable each rural business investment
company to make developmental venture capital invest-
ments in smaller enterprises in rural areas; and
‘‘(C) to make grants to rural business investment
companies, and to other entities, for the purpose of pro-
viding operational assistance to smaller enterprises
financed, or expected to be financed, by rural business
investment companies.
‘‘SEC. 384C. ESTABLISHMENT.
‘‘In accordance with this subtitle, the Secretary shall establish
a Rural Business Investment Program, under which the Secretary
may—
‘‘(1) enter into participation agreements with companies
granted final approval under section 384D(e) for the purposes
set forth in section 384B;
‘‘(2) guarantee the debentures issued by rural business
investment companies as provided in section 384E; and
‘‘(3) make grants to rural business investment companies,
and to other entities, under section 384H.
‘‘SEC. 384D. SELECTION OF RURAL BUSINESS INVESTMENT COMPA-
NIES.
‘‘(a) ELIGIBILITY.—A company shall be eligible to apply to
participate, as a rural business investment company, in the program
established under this subtitle if—
‘‘(1) the company is a newly formed for-profit entity or
a newly formed for-profit subsidiary of such an entity;
‘‘(2) the company has a management team with experience
in community development financing or relevant venture capital
financing; and
‘‘(3) the company will invest in enterprises that will create
wealth and job opportunities in rural areas, with an emphasis
on smaller enterprises.
‘‘(b) APPLICATION.—To participate, as a rural business invest-
ment company, in the program established under this subtitle,
a company meeting the eligibility requirements of subsection (a)
shall submit an application to the Secretary that includes—
H. R. 2646—259
‘‘(1) a business plan describing how the company intends
to make successful developmental venture capital investments
in identified rural areas;
‘‘(2) information regarding the community development
finance or relevant venture capital qualifications and general
reputation of the management of the company;
‘‘(3) a description of how the company intends to work
with 
community-based 
organizations 
and 
local 
entities
(including local economic development companies, local lenders,
and local investors) and to seek to address the unmet equity
capital needs of the communities served;
‘‘(4) a proposal describing how the company intends to
use the grant funds provided under this subtitle to provide
operational assistance to smaller enterprises financed by the
company, including information regarding whether the company
intends to use licensed professionals, as necessary, on the staff
of the company or from an outside entity;
‘‘(5) with respect to binding commitments to be made to
the company under this subtitle, an estimate of the ratio of
cash to in-kind contributions;
‘‘(6) a description of the criteria to be used to evaluate
whether and to what extent the company meets the purposes
of the program established under this subtitle;
‘‘(7) information regarding the management and financial
strength of any parent firm, affiliated firm, or any other firm
essential to the success of the business plan of the company;
and
‘‘(8) such other information as the Secretary may require.
‘‘(c) STATUS.—Not later than 90 days after the initial receipt
by the Secretary of an application under this section, the Secretary
shall provide to the applicant a written report describing the status
of the application and any requirements remaining for completion
of the application.
‘‘(d) MATTERS CONSIDERED.—In reviewing and processing any
application under this section, the Secretary—
‘‘(1) shall determine whether—
‘‘(A) the applicant meets the requirements of subsection
(e); and
‘‘(B) the management of the applicant is qualified and
has the knowledge, experience, and capability necessary
to comply with this subtitle;
‘‘(2) shall take into consideration—
‘‘(A) the need for and availability of financing for rural
business concerns in the geographic area in which the
applicant is to commence business;
‘‘(B) the general business reputation of the owners
and management of the applicant; and
‘‘(C) the probability of successful operations of the
applicant, including adequate profitability and financial
soundness; and
‘‘(3) shall not take into consideration any projected shortage
or unavailability of grant funds or leverage.
‘‘(e) APPROVAL; LICENSE.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
the Secretary may approve an applicant to operate as a rural
business investment company under this subtitle and license
the applicant as a rural business investment company, if—
H. R. 2646—260
‘‘(A) the Secretary determines that the application
satisfies the requirements of subsection (b);
‘‘(B) the area in which the rural business investment
company is to conduct its operations, and establishment
of branch offices or agencies (if authorized by the articles),
are approved by the Secretary; and
‘‘(C) the applicant enters into a participation agreement
with the Secretary.
‘‘(2) CAPITAL REQUIREMENTS.—
‘‘(A) IN GENERAL.—Notwithstanding any other provi-
sion of this subtitle, the Secretary may approve an
applicant to operate as a rural business investment com-
pany under this subtitle and designate the applicant as
a rural business investment company, if the Secretary
determines that the applicant—
‘‘(i) has private capital of more than $2,500,000;
‘‘(ii) would otherwise be approved under this sub-
title, except that the applicant does not satisfy the
requirements of section 384I(c); and
‘‘(iii) has a viable business plan that—
‘‘(I) reasonably projects profitable operations;
and
‘‘(II) has a reasonable timetable for achieving
a level of private capital that satisfies the require-
ments of section 384I(c).
‘‘(B) 
LEVERAGE.—An 
applicant 
approved 
under
subparagraph (A) shall not be eligible to receive leverage
under this subtitle until the applicant satisfies the require-
ments of section 384I(c).
‘‘(C) GRANTS.—An applicant approved under subpara-
graph (A) shall be eligible for grants under section 384H
in proportion to the private capital of the applicant, as
determined by the Secretary.
‘‘SEC. 384E. DEBENTURES.
‘‘(a) IN GENERAL.—The Secretary may guarantee the timely
payment of principal and interest, as scheduled, on debentures
issued by any rural business investment company.
‘‘(b) TERMS AND CONDITIONS.—The Secretary may make guaran-
tees under this section on such terms and conditions as the Sec-
retary considers appropriate, except that the term of any debenture
guaranteed under this section shall not exceed 15 years.
‘‘(c) FULL FAITH AND CREDIT OF THE UNITED STATES.—Section
381H(i) shall apply to any guarantee under this section.
‘‘(d) MAXIMUM GUARANTEE.—Under this section, the Secretary
may—
‘‘(1) guarantee the debentures issued by a rural business
investment company only to the extent that the total face
amount of outstanding guaranteed debentures of the rural busi-
ness investment company does not exceed the lesser of—
‘‘(A) 300 percent of the private capital of the rural
business investment company; or
‘‘(B) $105,000,000; and
‘‘(2) provide for the use of discounted debentures.
‘‘SEC. 384F. ISSUANCE AND GUARANTEE OF TRUST CERTIFICATES.
‘‘(a) ISSUANCE.—The Secretary may issue trust certificates rep-
resenting ownership of all or a fractional part of debentures issued
H. R. 2646—261
by a rural business investment company and guaranteed by the
Secretary under this subtitle, if the certificates are based on and
backed by a trust or pool approved by the Secretary and composed
solely of guaranteed debentures.
‘‘(b) GUARANTEE.—
‘‘(1) IN GENERAL.—The Secretary may, under such terms
and conditions as the Secretary considers appropriate, guar-
antee the timely payment of the principal of and interest on
trust certificates issued by the Secretary or agents of the Sec-
retary for purposes of this section.
‘‘(2) LIMITATION.—Each guarantee under this subsection
shall be limited to the extent of principal and interest on
the guaranteed debentures that compose the trust or pool.
‘‘(3) PREPAYMENT OR DEFAULT.—
‘‘(A) IN GENERAL.—In the event a debenture in a trust
or pool is prepaid, or in the event of default of such a
debenture, the guarantee of timely payment of principal
and interest on the trust certificates shall be reduced in
proportion to the amount of principal and interest the
prepaid debenture represents in the trust or pool.
‘‘(B) INTEREST.—Interest on prepaid or defaulted deben-
tures shall accrue and be guaranteed by the Secretary
only through the date of payment of the guarantee.
‘‘(C) REDEMPTION.—At any time during its term, a
trust certificate may be called for redemption due to prepay-
ment or default of all debentures.
‘‘(c) FULL FAITH AND CREDIT OF THE UNITED STATES.—Section
381H(i) shall apply to any guarantee of a trust certificate issued
by the Secretary under this section.
‘‘(d) SUBROGATION AND OWNERSHIP RIGHTS.—
‘‘(1) SUBROGATION.—If the Secretary pays a claim under
a guarantee issued under this section, the claim shall be sub-
rogated fully to the rights satisfied by the payment.
‘‘(2) OWNERSHIP RIGHTS.—No Federal, State, or local law
shall preclude or limit the exercise by the Secretary of the
ownership rights of the Secretary in a debenture residing in
a trust or pool against which 1 or more trust certificates are
issued under this section.
‘‘(e) MANAGEMENT AND ADMINISTRATION.—
‘‘(1) REGISTRATION.—The Secretary shall provide for a cen-
tral registration of all trust certificates issued under this sec-
tion.
‘‘(2) CREATION OF POOLS.—The Secretary may—
‘‘(A) maintain such commercial bank accounts or
investments in obligations of the United States as may
be necessary to facilitate the creation of trusts or pools
backed by debentures guaranteed under this subtitle; and
‘‘(B) issue trust certificates to facilitate the creation
of those trusts or pools.
‘‘(3) FIDELITY
BOND
OR
INSURANCE
REQUIREMENT.—Any
agent performing functions on behalf of the Secretary under
this paragraph shall provide a fidelity bond or insurance in
such amount as the Secretary considers to be necessary to
fully protect the interests of the United States.
‘‘(4) REGULATION OF BROKERS AND DEALERS.—The Secretary
may regulate brokers and dealers in trust certificates issued
under this section.
H. R. 2646—262
‘‘(5) ELECTRONIC REGISTRATION.—Nothing in this subsection
prohibits the use of a book-entry or other electronic form of
registration for trust certificates issued under this section.
‘‘SEC. 384G. FEES.
‘‘(a) IN GENERAL.—The Secretary may charge such fees as the
Secretary considers appropriate with respect to any guarantee or
grant issued under this subtitle.
‘‘(b) TRUST CERTIFICATE.—Notwithstanding subsection (a), the
Secretary shall not collect a fee for any guarantee of a trust certifi-
cate under section 384F, except that any agent of the Secretary
may collect a fee approved by the Secretary for the functions
described in section 384F(e)(2).
‘‘(c) LICENSE.—
‘‘(1) IN
GENERAL.—The Secretary may prescribe fees to
be paid by each applicant for a license to operate as a rural
business investment company under this subtitle.
‘‘(2) 
USE
OF
AMOUNTS.—Fees 
collected 
under 
this
subsection—
‘‘(A) shall be deposited in the account for salaries and
expenses of the Secretary; and
‘‘(B) are authorized to be appropriated solely to cover
the costs of licensing examinations.
‘‘SEC. 384H. OPERATIONAL ASSISTANCE GRANTS.
‘‘(a) IN GENERAL.—In accordance with this section, the Sec-
retary may make grants to rural business investment companies
and to other entities, as authorized by this subtitle, to provide
operational assistance to smaller enterprises financed, or expected
to be financed, by the entities.
‘‘(b) TERMS.—Grants made under this section shall be made
over a multiyear period (not to exceed 10 years) under such terms
as the Secretary may require.
‘‘(c) USE
OF FUNDS.—The proceeds of a grant made under
this section may be used by the rural business investment company
receiving the grant only to provide operational assistance in connec-
tion with an equity or prospective equity investment in a business
located in a rural area.
‘‘(d) SUBMISSION OF PLANS.—A rural business investment com-
pany shall be eligible for a grant under this section only if the
rural business investment company submits to the Secretary, in
such form and manner as the Secretary may require, a plan for
use of the grant.
‘‘(e) GRANT AMOUNT.—
‘‘(1) RURAL BUSINESS INVESTMENT COMPANIES.—The amount
of a grant made under this section to a rural business invest-
ment company shall be equal to the lesser of—
‘‘(A) 10 percent of the private capital raised by the
rural business investment company; or
‘‘(B) $1,000,000.
‘‘(2) OTHER ENTITIES.—The amount of a grant made under
this section to any entity other than a rural business investment
company shall be equal to the resources (in cash or in kind)
raised by the entity in accordance with the requirements
applicable to rural business investment companies under this
subtitle.
H. R. 2646—263
‘‘SEC. 384I. RURAL BUSINESS INVESTMENT COMPANIES.
‘‘(a) ORGANIZATION.—For the purpose of this subtitle, a rural
business investment company shall—
‘‘(1) be an incorporated body, a limited liability company,
or a limited partnership organized and chartered or otherwise
existing under State law solely for the purpose of performing
the functions and conducting the activities authorized by this
subtitle;
‘‘(2)(A) if incorporated, have succession for a period of not
less than 30 years unless earlier dissolved by the shareholders
of the rural business investment company; and
‘‘(B) if a limited partnership or a limited liability company,
have succession for a period of not less than 10 years; and
‘‘(3) possess the powers reasonably necessary to perform
the functions and conduct the activities.
‘‘(b) ARTICLES.—The articles of any rural business investment
company—
‘‘(1) shall specify in general terms—
‘‘(A) the purposes for which the rural business invest-
ment company is formed;
‘‘(B) the name of the rural business investment com-
pany;
‘‘(C) the area or areas in which the operations of the
rural business investment company are to be carried out;
‘‘(D) the place where the principal office of the rural
business investment company is to be located; and
‘‘(E) the amount and classes of the shares of capital
stock of the rural business investment company;
‘‘(2) may contain any other provisions consistent with this
subtitle that the rural business investment company may deter-
mine appropriate to adopt for the regulation of the business
of the rural business investment company and the conduct
of the affairs of the rural business investment company; and
‘‘(3) shall be subject to the approval of the Secretary.
‘‘(c) CAPITAL REQUIREMENTS.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
the private capital of each rural business investment company
shall be not less than—
‘‘(A) $5,000,000; or
‘‘(B) $10,000,000, with respect to each rural business
investment company authorized or seeking authority to
issue participating securities to be purchased or guaranteed
by the Secretary under this subtitle.
‘‘(2) EXCEPTION.—The Secretary may, in the discretion of
the Secretary and based on a showing of special circumstances
and good cause, permit the private capital of a rural business
investment company described in paragraph (1)(B) to be less
than $10,000,000, but not less than $5,000,000, if the Secretary
determines that the action would not create or otherwise con-
tribute to an unreasonable risk of default or loss to the Federal
Government.
‘‘(3) ADEQUACY.—In addition to the requirements of para-
graph (1), the Secretary shall—
‘‘(A) determine whether the private capital of each
rural business investment company is adequate to ensure
a reasonable prospect that the rural business investment