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Act of 1996 (7 U.S.C. 7272) is amended by striking sub-
section (g).
(e) IN-PROCESS SUGAR.—Section 156 of the Federal
Agriculture Improvement and Reform Act of 1996 (7 U.S.C.
7272) (as amended by subsections (c) and (d)) is amended
by inserting after subsection (e) the following:
‘‘(f) LOANS FOR IN-PROCESS SUGAR.—
‘‘(1) DEFINITION OF IN-PROCESS SUGARS AND
SYRUPS.—In this subsection, the term ‘in-process sug-
ars and syrups’ does not include raw sugar, liquid
sugar, invert sugar, invert syrup, or other finished
product that is otherwise eligible for a loan under
subsection (a) or (b).
‘‘(2) AVAILABILITY.—The Secretary shall make
nonrecourse loans available to processors of a crop of
domestically grown sugarcane and sugar beets for in-
process sugars and syrups derived from the crop.
‘‘(3) LOAN RATE.—The loan rate shall be equal
to 80 percent of the loan rate applicable to raw cane
sugar or refined beet sugar, as determined by the Sec-
retary on the basis of the source material for the in-
process sugars and syrups.
‘‘(4) FURTHER PROCESSING ON FORFEITURE.—
‘‘(A) IN GENERAL.—As a condition of the
forfeiture of in-process sugars and syrups serving
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as collateral for a loan under paragraph (2), the
processor shall, within such reasonable time pe-
riod as the Secretary may prescribe and at no
cost to the Commodity Credit Corporation, con-
vert the in-process sugars and syrups into raw
cane sugar or refined beet sugar of acceptable
grade and quality for sugars eligible for loans
under subsection (a) or (b).
‘‘(B) TRANSFER
TO
CORPORATION.—Once
the in-process sugars and syrups are fully proc-
essed into raw cane sugar or refined beet sugar,
the processor shall transfer the sugar to the Com-
modity Credit Corporation.
‘‘(C) PAYMENT TO PROCESSOR.—On trans-
fer of the sugar, the Secretary shall make a pay-
ment to the processor in an amount equal to the
amount obtained by multiplying—
‘‘(i) the difference between—
‘‘(I) the loan rate for raw cane
sugar or refined beet sugar, as appro-
priate; and
‘‘(II) the loan rate the processor
received under paragraph (3); by
‘‘(ii) the quantity of sugar transferred
to the Secretary.
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‘‘(5) LOAN CONVERSION.—If the processor does
not forfeit the collateral as described in paragraph
(4), but instead further processes the in-process sugars
and syrups into raw cane sugar or refined beet sugar
and repays the loan on the in-process sugars and syr-
ups, the processor may obtain a loan under subsection
(a) or (b) for the raw cane sugar or refined beet
sugar, as appropriate.’’.
(f) ADMINISTRATION OF PROGRAM.—Section 156 of the
Federal Agriculture Improvement and Reform Act of 1996
(7 U.S.C. 7272) (as amended by subsection (e)) is amended
by inserting after subsection (f) the following:
‘‘(g) AVOIDING FORFEITURES; CORPORATION INVEN-
TORY DISPOSITION.—
‘‘(1) IN GENERAL.—Subject to subsection (e)(3),
to the maximum extent practicable, the Secretary
shall operate the program established under this sec-
tion at no cost to the Federal Government by avoid-
ing the forfeiture of sugar to the Commodity Credit
Corporation.
‘‘(2) INVENTORY DISPOSITION.—
‘‘(A) IN
GENERAL.—To carry out para-
graph (1), the Commodity Credit Corporation
may accept bids to obtain raw cane sugar or re-
fined beet sugar in the inventory of the Com-
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modity Credit Corporation from (or otherwise
make available such commodities, on appro-
priate terms and conditions, to) processors of
sugarcane and processors of sugar beets (acting
in conjunction with the producers of the sugar-
cane or sugar beets processed by the processors)
in return for the reduction of production of raw
cane sugar or refined beet sugar, as appropriate.
‘‘(B) ADDITIONAL
AUTHORITY.—The au-
thority provided under this paragraph is in ad-
dition to any authority of the Commodity Credit
Corporation under any other law.’’.
(g) INFORMATION REPORTING.—Section 156(h) of the
Federal Agriculture Improvement and Reform Act of 1996
(7 U.S.C. 7272(h)) is amended—
(1) by redesignating paragraphs (2) and (3) as
paragraphs (4) and (5), respectively;
(2) by inserting after paragraph (1) the fol-
lowing:
‘‘(2) DUTY OF PRODUCERS TO REPORT.—
‘‘(A) PROPORTIONATE SHARE STATES.—As
a condition of a loan made to a processor for the
benefit of a producer, the Secretary shall require
each producer of sugarcane located in a State
(other than the Commonwealth of Puerto Rico)
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in which there are in excess of 250 producers of
sugarcane to report, in the manner prescribed by
the Secretary, the sugarcane yields and acres
planted to sugarcane of the producer.
‘‘(B) OTHER STATES.—The Secretary may
require each producer of sugarcane or sugar beets
not covered by paragraph (1) to report, in a
manner prescribed by the Secretary, the yields
of, and acres planted to, sugarcane or sugar
beets, respectively, of the producer.
‘‘(3) DUTY OF IMPORTERS TO REPORT.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), the Secretary shall require an
importer of sugars, syrups, or molasses to be
used for human consumption or to be used for
the extraction of sugar for human consumption
to report, in the manner prescribed by the Sec-
retary, the quantities of the products imported
by the importer and the sugar content or equiva-
lent of the products.
‘‘(B) 
TARIFF-RATE
QUOTAS.—Subpara-
graph (A) shall not apply to sugars, syrups, or
molasses that are within the quantities of tariff-
rate quotas that are subject to the lower rate of
duties.’’; and
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(j) INTEREST RATE.—Section 163 of the Federal Agri-
culture Improvement and Reform Act of 1996 (7 U.S.C.
7283) is amended—
(1) by inserting ‘‘(a) IN GENERAL.—’’ before
‘‘Notwithstanding’’; and
(2) by adding at the end the following:
‘‘(b) SUGAR.—For purposes of this section, raw cane
sugar, refined beet sugar, and in-process sugar eligible for
a loan under section 156 shall not be considered an agricul-
tural commodity.’’.
SEC. 142. STORAGE FACILITY LOANS.
Chapter 2 of subtitle D of the Federal Agriculture Im-
provement and Reform Act of 1996 (7 U.S.C. 7271 et seq.)
is amended by adding at the end the following:
‘‘SEC. 157. STORAGE FACILITY LOANS.
‘‘(a) IN GENERAL.—Notwithstanding any other provi-
sion of law and as soon as practicable after the date of en-
actment of this section, the Commodity Credit Corporation
shall amend part 1436 of title 7, Code of Federal Regula-
tions, to establish a sugar storage facility loan program to
provide financing for processors of domestically-produced
sugarcane and sugar beets to construct or upgrade storage
and handling facilities for raw sugars and refined sugars.
‘‘(b) ELIGIBLE PROCESSORS.—A storage facility loan
shall be made available to any processor of domestically
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produced sugarcane or sugar beets that (as determined by
the Secretary)—
‘‘(1) has a satisfactory credit history;
‘‘(2) has a need for increased storage capacity,
taking into account the effects of marketing allot-
ments; and
‘‘(3) demonstrates an ability to repay the loan.
‘‘(c) TERM OF LOANS.—A storage facility loan shall—
‘‘(1) have a minimum term of 7 years; and
‘‘(2) be in such amounts and on such terms and
conditions (including terms and conditions relating
to downpayments, collateral, and eligible facilities) as
are normal, customary, and appropriate for the size
and commercial nature of the borrower.’’.
SEC. 143. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR.
(a) INFORMATION REPORTING.—Section 359a of the
Agricultural Adjustment Act of 1938 (7 U.S.C. 1359aa) is
repealed.
(b) ESTIMATES.—Section 359b of the Agricultural Ad-
justment Act of 1938 (7 U.S.C. 1359bb) is amended—
(1) in the section heading—
(A) by inserting ‘‘FLEXIBLE’’ before ‘‘MAR-
KETING’’; and
(B) by striking ‘‘AND
CRYSTALLINE
FRUCTOSE’’;
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(2) in subsection (a)—
(A) in paragraph (1)—
(i) by striking ‘‘Before’’ and inserting
‘‘Not later than August 1 before’’;
(ii) by striking ‘‘1992 through 1998’’
and inserting ‘‘2002 through 2006’’;
(iii) in subparagraph (A), by striking
‘‘(other than sugar’’ and all that follows
through ‘‘stocks’’;
(iv) by redesignating subparagraphs
(B) and (C) as subparagraphs (C) and (E),
respectively;
(v) by inserting after subparagraph
(A) the following:
‘‘(B) the quantity of sugar that would pro-
vide for reasonable carryover stocks;’’;
(vi) in subparagraph (C) (as so redes-
ignated)—
(I) by striking ‘‘or’’ and all that
follows through ‘‘beets’’; and
(II) by striking ‘‘and’’ following
the semicolon;
(vii) by inserting after subparagraph
(C) (as so redesignated) the following:
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‘‘(D) the quantity of sugar that will be
available from the domestic processing of sugar-
cane and sugar beets; and’’; and
(viii) in subparagraph (E) (as so re-
designated)—
(I) 
by 
striking 
‘‘quantity 
of
sugar’’ and inserting ‘‘quantity of sug-
ars, syrups, and molasses’’;
(II) by inserting ‘‘human’’ after
‘‘imported for’’ the first place it ap-
pears;
(III) by inserting after ‘‘consump-
tion’’ the first place it appears the fol-
lowing: ‘‘or to be used for the extrac-
tion of sugar for human consumption’’;
(IV) by striking ‘‘year’’ and in-
serting ‘‘year, whether such articles are
under a tariff-rate quota or are in ex-
cess or outside of a tariff-rate quota’’;
and
(V) by striking ‘‘(other than
sugar’’ and all that follows through
‘‘carry-in stocks’’;
(B) by redesignating paragraph (2) as
paragraph (3);
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(C) by inserting after paragraph (1) the fol-
lowing:
‘‘(2) EXCLUSION.—The estimates under this sub-
section shall not apply to sugar imported for the pro-
duction of polyhydric alcohol or to any sugar refined
and reexported in refined form or in products con-
taining sugar.’’; and
(D) in paragraph (3) (as so redesignated)—
(i) in the paragraph heading, by strik-
ing ‘‘QUARTERLY
REESTIMATES’’ and in-
serting ‘‘REESTIMATES’’; and
(ii) by inserting ‘‘as necessary, but’’
after ‘‘a fiscal year’’;
(3) in subsection (b)—
(A) by striking paragraph (1) and inserting
the following:
‘‘(1) IN GENERAL.—By the beginning of each fis-
cal year, the Secretary shall establish for that fiscal
year appropriate allotments under section 359c for
the marketing by processors of sugar processed from
sugar beets and from domestically-produced sugarcane
at a level that the Secretary estimates will result in
no forfeitures of sugar to the Commodity Credit Cor-
poration under the loan program for sugar established
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under section 156 of the Federal Agriculture Improve-
ment and Reform Act of 1996 (7 U.S.C. 7272).’’; and
(B) in paragraph (2), by striking ‘‘or crys-
talline fructose’’;
(4) by striking subsection (c);
(5) by redesignating subsection (d) as subsection
(c); and
(6) in subsection (c) (as so redesignated)—
(A) by striking paragraph (2);
(B) by redesignating paragraphs (3) and
(4) as paragraphs (2) and (3), respectively; and
(C) in paragraph (2) (as so redesignated)—
(i) by striking ‘‘or manufacturer’’ and
all that follows through ‘‘(2)’’; and
(ii) by striking ‘‘or crystalline fruc-
tose’’.
(c) ESTABLISHMENT.—Section 359c of the Agricul-
tural Adjustment Act of 1938 (7 U.S.C. 1359cc) is
amended—
(1) in the section heading, by inserting ‘‘FLEXI-
BLE’’ after ‘‘OF’’;
(2) in subsection (a), by inserting ‘‘flexible’’ after
‘‘establish’’;
(3) in subsection (b)—
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(A) in paragraph (1)(A), by striking
‘‘1,250,000’’ and inserting ‘‘1,532,000’’; and
(B) in paragraph (2), by striking ‘‘to the
maximum extent practicable’’;
(4) by striking subsection (c) and inserting the
following:
‘‘(c) MARKETING ALLOTMENT FOR SUGAR DERIVED
FROM SUGAR BEETS AND SUGAR DERIVED FROM SUGAR-
CANE.—The overall allotment quantity for the fiscal year
shall be allotted between—
‘‘(1) sugar derived from sugar beets by estab-
lishing a marketing allotment for a fiscal year at a
quantity equal to the product of multiplying the over-
all allotment quantity for the fiscal year by 54.35
percent; and
‘‘(2) sugar derived from sugarcane by estab-
lishing a marketing allotment for a fiscal year at a
quantity equal to the product of multiplying the over-
all allotment quantity for the fiscal year by 45.65
percent.’’;
(5) by striking subsection (d) and inserting the
following:
‘‘(d) FILLING CANE SUGAR AND BEET SUGAR ALLOT-
MENTS.—
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‘‘(1) CANE SUGAR.—Each marketing allotment
for cane sugar established under this section may only
be filled with sugar processed from domestically
grown sugarcane.
‘‘(2) BEET SUGAR.—Each marketing allotment
for beet sugar established under this section may only
be filled with sugar domestically processed from sugar
beets.’’;
(6) by striking subsection (e);
(7) by redesignating subsection (f) as subsection
(e);
(8) in subsection (e) (as so redesignated)—
(A) by striking ‘‘The allotment’’ and insert-
ing the following:
‘‘(1) IN GENERAL.—The allotment’’;
(B) in paragraph (1) (as so redesignated)—
(i) by striking ‘‘the 5’’ and inserting
‘‘the’’;
(ii) by inserting after ‘‘sugarcane is
produced,’’ the following: ‘‘after a hearing
(if requested by the affected sugarcane proc-
essors and growers) and on such notice as
the Secretary by regulation may prescribe,’’;
and
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(iii) by striking ‘‘on the basis of past
marketings’’ and all that follows through
‘‘allotments’’ and inserting ‘‘as provided in
this 
subsection 
and 
section
359d(a)(2)(A)(iv)’’; and
(C) by inserting after paragraph (1) (as so
designated) the following:
‘‘(2) OFFSHORE ALLOTMENT.—
‘‘(A) COLLECTIVELY.—Prior to the allot-
ment of sugar derived from sugarcane to any
other State, 325,000 short tons, raw value shall
be allotted to the offshore States.
‘‘(B) INDIVIDUALLY.—The collective offshore
State allotment provided for under subparagraph
(A) shall be further allotted among the offshore
States in which sugarcane is produced, after a
hearing (if requested by the affected sugarcane
processors and growers) and on such notice as
the Secretary by regulation may prescribe, in a
fair and equitable manner on the basis of—
‘‘(i) past marketings of sugar, based on
the average of the 2 highest years of produc-
tion of raw cane sugar from the 1996
through 2000 crops;
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‘‘(ii) the ability of processors to market
the sugar covered under the allotments for
the crop year; and
‘‘(iii) past processings of sugar from
sugarcane based on the 3-year average of the
1998 through 2000 crop years.
‘‘(3) MAINLAND ALLOTMENT.—The allotment for
sugar derived from sugarcane, less the amount pro-
vided for under paragraph (2), shall be allotted
among the mainland States in the United States in
which sugarcane is produced, after a hearing (if re-
quested by the affected sugarcane processors and grow-
ers) and on such notice as the Secretary by regulation
may prescribe, in a fair and equitable manner on the
basis of—
‘‘(A) past marketings of sugar, based on the
average of the 2 highest years of production of
raw cane sugar from the 1996 through 2000
crops;
‘‘(B) the ability of processors to market the
sugar covered under the allotments for the crop
year; and
‘‘(C) past processings of sugar from sugar-
cane, based on the 3 crop years with the greatest
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processings (in the mainland States collectively)
during the 1991 through 2000 crop years.’’;
(9) by inserting after subsection (e) (as so redes-
ignated) the following:
‘‘(f) FILLING CANE SUGAR ALLOTMENTS.—Except as
provided in section 359e, a State cane sugar allotment es-
tablished under subsection (e) for a fiscal year may be filled
only with sugar processed from sugarcane grown in the
State covered by the allotment.’’;
(10) in subsection (g)—
(A) 
in 
paragraph 
(1), 
by 
striking
‘‘359b(a)(2)—’’ and all that follows through the
comma at the end of subparagraph (C) and in-
serting ‘‘359b(a)(3), adjust upward or downward
marketing allotments in a fair and equitable
manner’’;
(B) in paragraph (2), by striking ‘‘359f(b)’’
and inserting ‘‘359f(c)’’; and
(C) in paragraph (3)—
(i) in the paragraph heading, by strik-
ing ‘‘REDUCTIONS’’ and inserting ‘‘CARRY-
OVER OF REDUCTIONS’’;
(ii) by inserting after ‘‘this subsection,
if’’ the following: ‘‘at the time of the reduc-
tion’’;
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(iii) by striking ‘‘price support’’ and
inserting ‘‘nonrecourse’’;
(iv) by striking ‘‘206’’ and all that fol-
lows through ‘‘the allotment’’ and inserting
‘‘156 of the Federal Agriculture Improve-
ment and Reform Act of 1996 (7 U.S.C.
7272),’’; and
(v) by striking ‘‘, if any,’’; and
(11) by striking subsection (h) and inserting the
following:
‘‘(h) SUSPENSION
OF ALLOTMENTS.—Whenever the
Secretary estimates or reestimates under section 359b(a),
or has reason to believe, that imports of sugars, syrups or
molasses for human consumption or to be used for the ex-
traction of sugar for human consumption, whether under
a tariff-rate quota or in excess or outside of a tariff-rate
quota, will exceed 1,532,000 short tons (raw value equiva-
lent), and that the imports would lead to a reduction of
the overall allotment quantity, the Secretary shall suspend
the marketing allotments established under this section
until such time as the imports have been restricted, elimi-
nated, or reduced to or below the level of 1,532,000 short
tons (raw value equivalent).’’.
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(d) ALLOCATION.—Section 359d(a)(2) of the Agricul-
tural Adjustment Act of 1938 (7 U.S.C. 1359dd(a)(2)) is
amended—
(1) in subparagraph (A)—
(A) by striking ‘‘The Secretary’’ and insert-
ing the following:
‘‘(i) IN GENERAL.—The Secretary’’;
(B) in the first sentence of clause (i) (as so
designated)—
(i) by striking ‘‘interested parties’’ and
inserting ‘‘the affected sugarcane processors
and growers’’; and
(ii) by striking ‘‘by taking’’ and all
that follows through ‘‘allotment allocated.’’
and inserting ‘‘under this subparagraph.’’;
and
(C) by inserting after clause (i) the fol-
lowing:
‘‘(ii) MULTIPLE PROCESSOR STATES.—
Except as provided in clauses (iii) and (iv),
the Secretary shall allocate the allotment for
cane sugar among multiple cane sugar
processors in a single State based on—
‘‘(I) past marketings of sugar,
based on the average of the 2 highest
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years of production of raw cane sugar
from among the 1996 through 2000
crops;
‘‘(II) the ability of processors to
market sugar covered by that portion
of the allotment allocated for the crop
year; and
‘‘(III) past processings of sugar
from sugarcane, based on the average
of the 3 highest years of production
during the 1996 through 2000 crop
years.
‘‘(iii) TALISMAN
PROCESSING
FACIL-
ITY.—In the case of allotments under clause
(ii) attributable to the operations of the Tal-
isman processing facility before the date of
enactment of this clause, the Secretary shall
allocate the allotment among processors in
the State under clause (i) in accordance
with the agreements of March 25 and 26,
1999, between the affected processors and
the Secretary of the Interior.
‘‘(iv) 
PROPORTIONATE
SHARE
STATES.—In the case of States subject to
section 359f(c), the Secretary shall allocate
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the allotment for cane sugar among mul-
tiple cane sugar processors in a single state
based on—
‘‘(I) past marketings of sugar,
based on the average of the 2 highest
years of production of raw cane sugar
from among the 1997 through 2001
crop years;
‘‘(II) the ability of processors to
market sugar covered by that portion
of the allotments allocated for the crop
year; and
‘‘(III) past processings of sugar
from sugarcane, based on the average
of the 2 highest crop years of crop pro-
duction during the 1997 through 2001
crop years.
‘‘(v) NEW ENTRANTS.—
‘‘(I) 
IN
GENERAL.—Notwith-
standing clauses (ii) and (iv), the Sec-
retary, on application of any processor
that begins processing sugarcane on or
after the date of enactment of this
clause, and after a hearing (if re-
quested by the affected sugarcane proc-
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essors and growers) and on such notice
as the Secretary by regulation may
prescribe, may provide the processor
with an allocation that provides a fair,
efficient and equitable distribution of
the allocations from the allotment for
the State in which the processor is lo-
cated.
‘‘(II) 
PROPORTIONATE
SHARE
STATES.—In the case of proportionate
share States, the Secretary shall estab-
lish proportionate shares in a quantity
sufficient to produce the sugarcane re-
quired to satisfy the allocations.
‘‘(III) LIMITATIONS.—The allot-
ment for a new processor under this
clause shall not exceed—
‘‘(aa) in the case of the first
fiscal year of operation of a new
processor, 50,000 short tons (raw
value); and
‘‘(bb) in the case of each sub-
sequent fiscal year of operation of
the new processor, a quantity es-
tablished by the Secretary in ac-
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cordance with this clause and the
criteria described in clause (ii) or
(iii), as applicable.
‘‘(IV) NEW ENTRANT STATES.—
‘‘(aa) 
IN
GENERAL.—Not-
withstanding subparagraphs (A)
and (C) of section 359c(e)(3), to
accommodate an allocation under
subclause (I) to a new processor
located in a new entrant main-
land State, the Secretary shall
provide the new entrant mainland
State with an allotment.
‘‘(bb) EFFECT ON OTHER AL-
LOTMENTS.—The allotment to any
new entrant mainland State shall
be subtracted, on a pro rata basis,
from the allotments otherwise al-
lotted to each mainland State
under section 359c(e)(3).
‘‘(V) ADVERSE EFFECTS.—Before
providing an initial processor alloca-
tion or State allotment to a new en-
trant processor or a new entrant State
under this clause, the Secretary shall
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take into consideration any adverse ef-
fects that the provision of the alloca-
tion or allotment may have on existing
cane processors and producers in
mainland States.
‘‘(VI) ABILITY TO MARKET.—Con-
sistent with section 359c and this sec-
tion, any processor allocation or State
allotment made to a new entrant proc-
essor or to a new entrant State under
this clause shall be provided only after
the applicant processor, or the applica-
ble processors in the State, have dem-
onstrated 
the 
ability 
to 
process,
produce, and market (including the
transfer or delivery of the raw cane
sugar to a refinery for further proc-
essing or marketing) raw cane sugar
for the crop year for which the allot-
ment is applicable.
‘‘(VII) PROHIBITION.—Not more
than 1 processor allocation provided
under this clause may be applicable to
any individual sugar processing facil-
ity.
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‘‘(vi) TRANSFER OF OWNERSHIP.—Ex-
cept as otherwise provided in section
359f(c)(8), if a sugarcane processor is sold
or otherwise transferred to another owner or
closed as part of an affiliated corporate
group processing consolidation, the Sec-
retary shall transfer the allotment alloca-
tion for the processor to the purchaser, new
owner, successor in interest, or any remain-
ing processor of an affiliated entity, as ap-
plicable, of the processor.’’; and
(2) by striking subparagraph (B) and inserting
the following:
‘‘(B) BEET SUGAR.—
‘‘(i) IN GENERAL.—Except as otherwise
provided in this subparagraph and sections
359c(g), 359e(b), and 359f(b), the Secretary
shall make allocations for beet sugar among
beet sugar processors for each crop year that
allotments are in effect on the basis of the
adjusted weighted average quantity of beet
sugar produced by the processors for each of
the 1998 through 2000 crop years, as deter-
mined under this subparagraph.
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‘‘(ii) QUANTITY.—The quantity of an
allocation made for a beet sugar processor
for a crop year under clause (i) shall bear
the same ratio to the quantity of allocations
made for all beet sugar processors for the
crop year as the adjusted weighted average
quantity of beet sugar produced by the proc-
essor (as determined under clauses (iii) and
(iv)) bears to the total of the adjusted
weighted average quantities of beet sugar
produced by all processors (as so deter-
mined).
‘‘(iii) 
WEIGHTED
AVERAGE
QUAN-
TITY.—Subject to clause (iv), the weighted
quantity of beet sugar produced by a beet
sugar processor during each of the 1998
through 2000 crop years shall be (as deter-
mined by the Secretary)—
‘‘(I) in the case of the 1998 crop
year, 25 percent of the quantity of beet
sugar produced by the processor during
the crop year;
‘‘(II) in the case of the 1999 crop
year, 35 percent of the quantity of beet
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sugar produced by the processor during
the crop year; and
‘‘(III) in the case of the 2000 crop
year, 40 percent of the quantity of beet
sugar produced by the processor (in-
cluding any quantity of sugar received
from the Commodity Credit Corpora-
tion) during the crop year.
‘‘(iv) ADJUSTMENTS.—
‘‘(I) IN GENERAL.—The Secretary
shall adjust the weighted average quan-
tity of beet sugar produced by a beet
sugar 
processor 
during 
the 
1998
through 2000 crop years under clause
(iii) if the Secretary determines that,
during any such crop year, the
processor—
‘‘(aa) opened or closed a
sugar beet processing factory;
‘‘(bb) constructed a molasses
desugarization facility; or
‘‘(cc) 
suffered 
substantial
quality losses on sugar beets
stored during any such crop year.
100
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‘‘(II) QUANTITY.—The quantity of
beet sugar produced by a beet sugar
processor under clause (iii) shall be—
‘‘(aa) in the case of a proc-
essor that opened a sugar beet
processing factory, increased by
1.25 percent of the total of the ad-
justed weighted average quantities
of beet sugar produced by all proc-
essors during the 1998 through
2000 crop years (without consid-
eration of any adjustment under
this clause) for each sugar beet
processing factory that is opened
by the processor;
‘‘(bb) in the case of a proc-
essor that closed a sugar beet
processing factory, decreased by
1.25 percent of the total of the ad-
justed weighted average quantities
of beet sugar produced by all proc-
essors during the 1998 through
2000 crop years (without consid-
eration of any adjustment under
this clause) for each sugar beet
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processing factory that is closed
by the processor;
‘‘(cc) in the case of a proc-
essor that constructed a molasses
desugarization facility, increased
by 0.25 percent of the total of the
adjusted weighted average quan-
tities of beet sugar produced by all
processors 
during 
the 
1998
through 2000 crop years (without
consideration of any adjustment
under this clause) for each molas-
ses desugarization facility that is
constructed by the processor; and
‘‘(dd) in the case of a proc-
essor that suffered substantial
quality losses on stored sugar
beets, increased by 1.25 percent of
the total of the adjusted weighted
average quantities of beet sugar
produced by all processors during
the 1998 through 2000 crop years
(without consideration of any ad-
justment under this clause).
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‘‘(v) PERMANENT TERMINATION OF OP-
ERATIONS OF A PROCESSOR.—If a processor
of beet sugar has been dissolved, liquidated
in a bankruptcy proceeding, or otherwise
has permanently terminated operations
(other than in conjunction with a sale or
other disposition of the processor or the as-
sets of the processor), the Secretary shall—
‘‘(I) eliminate the allocation of the
processor provided under this section;
and
‘‘(II) distribute the allocation to
other beet sugar processors on a pro
rata basis.
‘‘(vi) SALE OF ALL ASSETS OF A PROC-
ESSOR
TO
ANOTHER
PROCESSOR.—If a
processor of beet sugar (or all of the assets
of the processor) is sold to another processor
of beet sugar, the Secretary shall transfer
the allocation of the seller to the buyer un-
less the allocation has been distributed to
other sugar beet processors under clause (v).
‘‘(vii) SALE OF FACTORIES OF A PROC-
ESSOR TO ANOTHER PROCESSOR.—
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‘‘(I) IN
GENERAL.—Subject to
clauses (v) and (vi), if 1 or more fac-
tories of a processor of beet sugar (but
not all of the assets of the processor)
are sold to another processor of beet
sugar during a fiscal year, the Sec-
retary shall assign a pro rata portion
of the allocation of the seller to the al-
location of the buyer to reflect the his-
torical contribution of the production
of the sold factory or factories to the
total allocation of the seller.
‘‘(II) APPLICATION
OF
ALLOCA-
TION.—The assignment of the alloca-
tion under subclause (I) shall apply—
‘‘(aa) during the remainder
of the fiscal year during which the
sale described in subclause (I) oc-
curs (referred to in this clause as
the ‘initial fiscal year’); and
‘‘(bb) each subsequent fiscal
year (referred in this clause as a
‘subsequent fiscal year’), subject to
subclause (III).
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‘‘(III) 
SUBSEQUENT
FISCAL
YEARS.—
‘‘(aa) IN GENERAL.—The as-
signment of the allocation under
subclause (I) shall apply during
each subsequent fiscal year unless
the acquired factory or factories
continue in operation for less
than the initial fiscal year and
the first subsequent fiscal year.
‘‘(bb) 
REASSIGNMENT.—If
the acquired factory or factories
do not continue in operation for
the complete initial fiscal year
and the first subsequent fiscal
year, the Secretary shall reassign
the temporary allocation to other
processors of beet sugar on a pro
rata basis.
‘‘(IV) USE OF OTHER FACTORIES
TO
FILL
ALLOCATION.—If the trans-
ferred allocation to the buyer for the
purchased factory or factories cannot
be filled by the production by the pur-
chased factory or factories for the ini-
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tial fiscal year or a subsequent fiscal
year, the remainder of the transferred
allocation may be filled by beet sugar
produced by the buyer from other fac-
tories of the buyer.
‘‘(viii) NEW ENTRANTS STARTING PRO-
DUCTION OR REOPENING FACTORIES.—If an
individual or entity that does not have an
allocation of beet sugar under this part (re-
ferred to in this subparagraph as a ‘new en-
trant’) starts processing sugar beets after
the date of enactment of this clause, or ac-
quires and reopens a factory that produced
beet sugar during the period of the 1998
through 2000 crop years that (at the time
of acquisition) has no allocation associated
with the factory under this part, the Sec-
retary shall—
‘‘(I) assign an allocation for beet
sugar to the new entrant that provides
a fair and equitable distribution of the
allocations for beet sugar; and
‘‘(II) reduce the allocations for
beet sugar of all other processors on a
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pro rata basis to reflect the new alloca-
tion.
‘‘(ix) NEW ENTRANTS ACQUIRING ON-
GOING FACTORIES WITH PRODUCTION HIS-
TORY.—If a new entrant acquires a factory
that has production history during the pe-
riod of the 1998 through 2000 crop years
and that is producing beet sugar at the time
the allocations are made from a processor
that has an allocation of beet sugar, the
Secretary shall transfer a portion of the al-
location of the seller to the new entrant to
reflect the historical contribution of the pro-
duction of the sold factory to the total allo-
cation of the seller.’’.
(e) REASSIGNMENT.—Section 359e(b) of the Agricul-
tural Adjustment Act of 1938 (7 U.S.C. 1359ee(b)) is
amended—
(1) in paragraph (1)—
(A) in subparagraph (B), by striking the
‘‘and’’ after the semicolon;
(B) by redesignating subparagraph (C) as
subparagraph (D);
(C) by inserting after subparagraph (B) the
following:
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‘‘(C) if after the reassignments, the deficit
cannot be completely eliminated, the Secretary
shall reassign the estimated quantity of the def-
icit to the sale of any inventories of sugar held
by the Commodity Credit Corporation; and’’;
and
(D) in subparagraph (D) (as so redesig-
nated), by inserting ‘‘and sales’’ after ‘‘reassign-
ments’’; and
(2) in paragraph (2)—
(A) in subparagraph (A), by striking the
‘‘and’’ after the semicolon;
(B) in subparagraph (B), by striking ‘‘reas-
sign the remainder to imports.’’ and inserting
‘‘use the estimated quantity of the deficit for the
sale of any inventories of sugar held by the Com-
modity Credit Corporation; and’’; and
(C) by inserting after subparagraph (B) the
following:
‘‘(C) if after the reassignments and sales,
the deficit cannot be completely eliminated, the
Secretary shall reassign the remainder to im-
ports.’’.
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(f) PRODUCER PROVISIONS.—Section 359f of the Agri-
cultural Adjustment Act of 1938 (7 U.S.C. 1359ff) is
amended—
(1) in subsection (a)—
(A) by striking ‘‘Whenever’’ and inserting
the following:
‘‘(1) IN GENERAL.—If’’;
(B) in the second sentence, by striking
‘‘processor’s allocation’’ and inserting ‘‘allocation
to the processor’’;
(C) by striking ‘‘Any dispute’’ and insert-
ing the following:
‘‘(2) ARBITRATION.—
‘‘(A) IN GENERAL.—Any dispute’’; and
(D) by adding at the end the following:
‘‘(B) PERIOD.—The arbitration shall, to the
maximum extent practicable, be—
‘‘(i) commenced not more than 45 days
after the request; and
‘‘(ii) completed not more than 60 days
after the request.’’;
(2) by redesignating subsection (b) as subsection
(c);
(3) by inserting after subsection (a) the fol-
lowing:
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‘‘(b) SUGAR
BEET
PROCESSING
FACILITY
CLO-
SURES.—
‘‘(1) IN GENERAL.—If a sugar beet processing fa-
cility is closed and the sugar beet growers that pre-
viously delivered beets to the facility elect to deliver
their beets to another processing company, the growers
may petition the Secretary to modify allocations
under this part to allow the delivery.
‘‘(2) INCREASED ALLOCATION FOR PROCESSING
COMPANY.—The Secretary may increase the allocation
to the processing company to which the growers elect
to deliver their sugar beets, with the approval of the
processing company, to a level that does not exceed
the processing capacity of the processing company, to
accommodate the change in deliveries.
‘‘(3) DECREASED ALLOCATION FOR CLOSED COM-
PANY.—The increased allocation shall be deducted
from the allocation to the company that owned the
processing facility that has been closed and the re-
maining allocation shall be unaffected.
‘‘(4) TIMING.—The determinations of the Sec-
retary on the issues raised by the petition shall be
made within 60 days after the filing of the petition.’’;
and
(4) in subsection (c) (as so redesignated)—
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(A) in paragraph (3)(A), by striking ‘‘the
preceding 5 years’’ and inserting ‘‘the 2 highest
years from among the 1999, 2000, and 2001 crop
years’’;
(B) in paragraph (4)(A), by striking ‘‘each’’
and all that follows through ‘‘in effect’’ and in-
serting ‘‘the 2 highest of the 1999, 2000, and
2001 crop years’’; and
(C) by inserting after paragraph (7) the fol-
lowing:
‘‘(8) PROCESSING FACILITY CLOSURES.—
‘‘(A) IN GENERAL.—If a sugarcane proc-
essing facility subject to this subsection is closed
and the sugarcane growers that delivered sugar-
cane to the facility prior to closure elect to de-
liver their sugarcane to another processing com-
pany, the growers may petition the Secretary to
modify allocations under this part to allow the
delivery.
‘‘(B) INCREASED
ALLOCATION
FOR
PROC-
ESSING COMPANY.—The Secretary may increase
the allocation to the processing company to
which the growers elect to deliver the sugarcane,
with the approval of the processing company, to
a level that does not exceed the processing capac-
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ity of the processing company, to accommodate
the change in deliveries.
‘‘(C) DECREASED ALLOCATION FOR CLOSED
COMPANY.—The increased allocation shall be de-
ducted from the allocation to the company that
owned the processing facility that has been closed
and the remaining allocation shall be unaffected.
‘‘(D) TIMING.—The determinations of the
Secretary on the issues raised by the petition
shall be made within 60 days after the filing of
the petition.’’.
(g) CONFORMING AMENDMENTS.—
(1) Part VII of subtitle B of title III of the Agri-
cultural Adjustment Act of 1938 (7 U.S.C. 359aa et
seq.) is amended by striking the part heading and in-
serting the following:
‘‘PART VII—FLEXIBLE MARKETING ALLOTMENTS
FOR SUGAR’’.
(2) Part VII of subtitle B of title III of the Agri-
cultural Adjustment Act of 1938 (as amended by sub-
section (a)) is amended by inserting before section
359b (7 U.S.C. 1359bb) the following:
‘‘SEC. 359a. DEFINITIONS.
‘‘In this part:
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‘‘(1) MAINLAND
STATE.—The term ‘mainland
State’ means a State other than an offshore State.
‘‘(2) OFFSHORE
STATE.—The term ‘offshore
State’ means a sugarcane producing State located
outside of the continental United States.
‘‘(3) STATE.—Notwithstanding section 301, the
term ‘State’ means—
‘‘(A) a State;
‘‘(B) the District of Columbia; and
‘‘(C) the Commonwealth of Puerto Rico.
‘‘(4) UNITED STATES.—The term ‘United States’,
when used in a geographical sense, means all of the
States.’’.
(3) Section 359g of the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1359gg) is amended—
(A) by striking ‘‘359f’’ each place it appears
and inserting ‘‘359f(c)’’;
(B) in the first sentence of subsection (b), by
striking ‘‘3 consecutive’’ and inserting ‘‘5 con-
secutive’’; and
(C) in subsection (c), by inserting ‘‘or ad-
justed’’ after ‘‘share established’’.
(4) Section 359j of the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1359jj) is amended—
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(A) in subsection (b), by striking ‘‘sections
359a through 359i’’ and inserting ‘‘this part’’;
and
(B) by striking subsection (c).
SEC. 144. REALLOCATION OF SUGAR QUOTA.
Subtitle B of title III of the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1311 et seq.) is amended by adding
at the end the following:
‘‘PART VIII—REALLOCATING SUGAR QUOTA
IMPORT SHORTFALLS
‘‘SEC. 360. REALLOCATING CERTAIN SUGAR QUOTAS.
‘‘(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, on or after June 1 of each year, the United
States Trade Representative, in consultation with the Sec-
retary, shall determine the amount of the quota of cane
sugar used by each qualified supplying country for that fis-
cal year, and may reallocate the unused quota for that fiscal
year among qualified supplying countries.
‘‘(b) DEFINITIONS.—In this section:
‘‘(1) QUALIFIED
SUPPLYING
COUNTRY.—The
term ‘qualified supplying country’ means one of the
following 40 foreign countries that is allowed to ex-
port cane sugar to the United States under an agree-
ment or any other country with which the United
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States has an agreement relating to the importation
of cane sugar:
Argentina
Australia
Barbados
Belize
Bolivia
Brazil
Colombia
Congo
Costa Rica
Dominican Republic
Ecuador
El Salvador
Fiji
Gabon
Guatemala
Guyana
Haiti
Honduras
India
Ivory Coast
Jamaica
Madagascar
Malawi
Mauritius
Mexico
Mozambique
Nicaragua
Panama
Papua New Guinea
Paraguay
Peru
Philippines
St. Kitts and Nevis
South Africa
Swaziland
Taiwan
Thailand
Trinidad-Tobago
Uruguay
Zimbabwe.
‘‘(2) CANE SUGAR.—The term ‘cane sugar’ has
the same meaning as the term has under part VII.’’.
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CHAPTER 3—PEANUTS
SEC. 151. PEANUT PROGRAM.
(a) IN GENERAL.—Subtitle D of the Federal Agri-
culture Improvement and Reform Act of 1996 (7 U.S.C.
7251 et seq.) is amended by adding at the end the following:
‘‘CHAPTER 3—PEANUTS
‘‘SEC. 158A. DEFINITIONS.
‘‘In this chapter:
‘‘(1) COUNTER-CYCLICAL
PAYMENT.—The term
‘counter-cyclical payment’ means a payment made to
peanut producers on a farm under section 158D.
‘‘(2) DIRECT PAYMENT.—The term ‘direct pay-
ment’ means a payment made to peanut producers on
a farm under section 158C.
‘‘(3) EFFECTIVE
PRICE.—The term ‘effective
price’ means the price calculated by the Secretary
under section 158D for peanuts to determine whether
counter-cyclical payments are required to be made
under section 158D for a crop year.
‘‘(4) HISTORICAL
PEANUT
PRODUCERS
ON
A
FARM.—The term ‘historical peanut producers on a
farm’ means the peanut producers on a farm in the
United States that produced or were prevented from
planting peanuts during any of the 1998 through
2001 crop years.
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‘‘(5) INCOME PROTECTION PRICE.—The term ‘in-
come protection price’ means the price per ton of pea-
nuts used to determine the payment rate for counter-
cyclical payments.
‘‘(6) PAYMENT
ACRES.—The term ‘payment
acres’ means 85 percent of the peanut acres on a
farm, as established under section 158B, on which di-
rect payments and counter-cyclical payments are
made.
‘‘(7) PEANUT ACRES.—The term ‘peanut acres’
means the number of acres assigned to a particular
farm for historical peanut producers on a farm pur-
suant to section 158B(b).
‘‘(8) PAYMENT
YIELD.—The term ‘payment
yield’ means the yield assigned to a farm by histor-
ical peanut producers on the farm pursuant to section
158B(b).
‘‘(9) PEANUT
PRODUCER.—The term ‘peanut
producer’ means an owner, operator, landlord, tenant,
or sharecropper that—
‘‘(A) shares in the risk of producing a crop
of peanuts in the United States; and
‘‘(B) is entitled to share in the crop avail-
able for marketing from the farm or would have
shared in the crop had the crop been produced.
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scribed in subparagraph (A) is located is de-
clared a disaster area during 1 or more of the
4 crop years described in subparagraph (A), for
the purposes of determining the 4-year average
yield for the historical peanut producer, the his-
torical peanut producer may elect to substitute,
for not more than 1 of the crop years during
which a disaster is declared—
‘‘(i) the State 4-year average yield of
peanuts produced in the State; or
‘‘(ii) the average yield for the historical
peanut producer determined by the Sec-
retary under subparagraph (A).
‘‘(2) ACREAGE AVERAGE.—The Secretary shall
determine, for the historical peanut producer, the 4-
year average of—
‘‘(A) acreage planted to peanuts on all
farms for harvest during the 1998 through 2001
crop years; and
‘‘(B) any acreage that was prevented from
being planting to peanuts during the crop years
because of drought, flood, or other natural dis-
aster, or other condition beyond the control of the
historical peanut producer, as determined by the
Secretary.
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‘‘(3) TIME FOR DETERMINATIONS; FACTORS.—
‘‘(A) TIMING.—The Secretary shall make
the determinations required by this subsection
not later than 90 days after the date of enact-
ment of this section.
‘‘(B) FACTORS.—In making the determina-
tions, the Secretary shall take into account
changes in the number and identity of historical
peanut producers sharing in the risk of pro-
ducing a peanut crop since the 1998 crop year,
including providing a method for the assignment
of average acres and average yield to a farm
when a historical peanut producer is no longer
living or an entity composed of historical peanut
producers has been dissolved.
‘‘(b) ASSIGNMENT OF YIELD AND ACRES TO FARMS.—
‘‘(1) ASSIGNMENT BY HISTORICAL PEANUT PRO-
DUCERS.—For the first crop year that begins after the
date of enactment of this section, the Secretary shall
provide each historical peanut producer in a State
that produced a contract commodity, or another agri-
cultural commodity for which a production adjust-
ment program is carried out under the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1281 et seq.), or
was prevented from planting a contract commodity,
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or another such agricultural commodity, during the
2001 crop year with an opportunity to assign the av-
erage peanut yield and average acreage determined
under subsection (a) for the historical peanut pro-
ducer to cropland on a farm in the State.
‘‘(2) ASSIGNMENT TO CROPLAND.—In the case of
a historical peanut producer on a farm that did not
produce a contract commodity, or another such agri-
cultural commodity, and was not prevented from
planting a contract commodity or another such agri-
cultural commodity during the 2001 crop year, the
average peanut yield and average acreage determined
under subsection (a) shall be assigned to the cropland
on the farm.
‘‘(3) PAYMENT YIELD.—The average of all of the
yields assigned by historical peanut producers to a
farm shall be considered to be the payment yield for
the farm for the purpose of making direct payments
and counter-cyclical payments under this chapter.
‘‘(4) PEANUT ACRES.—Subject to subsection (e),
the total number of acres assigned by historical pea-
nut producers to a farm shall be considered to be the
peanut acres for the farm for the purpose of making
direct payments and counter-cyclical payments under
this chapter.
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‘‘(c) ELECTION.—In the case of the first crop year that
begins after the date of enactment of this subsection, a his-
torical peanut producer shall notify the Secretary of the as-
signments described in subsection (b)(1) not later than 180
days after the date of enactment of this section.
‘‘(d) PAYMENT ACRES.—The payment acres for pea-
nuts on a farm shall be equal to 85 percent of the peanut
acres assigned to the farm.
‘‘(e) PREVENTION OF EXCESS PEANUT ACRES.—
‘‘(1) REQUIRED REDUCTION.—If the total of the
peanut acres for a farm, together with the acreage de-
scribed in paragraph (3), exceeds the actual cropland
acreage of the farm, the Secretary shall reduce the
quantity of peanut acres for the farm or contract
acreage for 1 or more covered commodities for the
farm as necessary so that the total of the peanut acres
and acreage described in paragraph (3) does not ex-
ceed the actual cropland acreage of the farm.
‘‘(2) SELECTION OF ACRES.—The Secretary shall
give the peanut producers on the farm the oppor-
tunity to select the peanut acres or contract acreage
against which the reduction will be made.
‘‘(3) OTHER ACREAGE.—For purposes of para-
graph (1), the Secretary shall include—
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‘‘(A) any contract acreage for the farm
under subtitle B;
‘‘(B) any acreage on the farm enrolled in
the conservation reserve program or wetlands re-
serve program under chapter 1 of subtitle D of
title XII of the Food Security Act of 1985 (16
U.S.C. 3830 et seq.); and
‘‘(C) any other acreage on the farm enrolled
in a conservation program for which payments
are made in exchange for not producing an agri-
cultural commodity on the acreage.
‘‘(3) DOUBLE-CROPPED ACREAGE.—In applying
paragraph (1), the Secretary shall take into account
additional acreage as a result of an established dou-
ble-cropping history on a farm, as determined by the
Secretary.
‘‘SEC. 158C. DIRECT PAYMENTS FOR PEANUTS.
‘‘(a) IN GENERAL.—For each of the 2002 through 2006
fiscal years, the Secretary shall make direct payments to
peanut producers on a farm with peanut acres under sec-
tion 158B and a payment yield for peanuts under section
158B.
‘‘(b) PAYMENT RATE.—The payment rate used to make
direct payments with respect to peanuts for a fiscal year
shall be equal to $0.018 per pound.
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‘‘(c) PAYMENT AMOUNT.—The amount of the direct
payment to be paid to the peanut producers on a farm for
peanuts for a fiscal year shall be equal to the product ob-
tained by multiplying—
‘‘(1) the payment rate specified in subsection (b);
‘‘(2) the payment acres on the farm; by
‘‘(3) the payment yield for the farm.
‘‘(d) TIME FOR PAYMENT.—
‘‘(1) IN GENERAL.—The Secretary shall make di-
rect payments—
‘‘(A) in the case of the 2002 fiscal year,
during the period beginning December 1, 2001,
and ending September 30, 2002; and
‘‘(B) in the case of each of the 2003 through
2006 fiscal years, not later than September 30 of
the fiscal year.
‘‘(2) ADVANCE PAYMENTS.—
‘‘(A) IN
GENERAL.—At the option of the
peanut producers on a farm, the Secretary shall
pay 50 percent of the direct payment for a fiscal
year for the producers on the farm on a date se-
lected by the peanut producers on the farm.
‘‘(B) SELECTED DATE.—The selected date
for a fiscal year shall be on or after December
1 of the fiscal year.
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‘‘(C) SUBSEQUENT
FISCAL
YEARS.—The
peanut producers on a farm may change the se-
lected date for a subsequent fiscal year by pro-
viding advance notice to the Secretary.
‘‘(3) REPAYMENT
OF
ADVANCE
PAYMENTS.—If
any peanut producer on a farm that receives an ad-
vance direct payment for a fiscal year ceases to be eli-
gible for a direct payment before the date the direct
payment would have been made by the Secretary
under paragraph (1), the peanut producer shall be re-
sponsible for repaying the Secretary the full amount
of the advance payment.
‘‘SEC. 158D. COUNTER-CYCLICAL PAYMENTS FOR PEANUTS.
‘‘(a) IN GENERAL.—For each of the 2002 through 2006
crops of peanuts, the Secretary shall make counter-cyclical
payments with respect to peanuts if the Secretary deter-
mines that the effective price for peanuts is less than the
income protection price for peanuts.
‘‘(b) EFFECTIVE PRICE.—For purposes of subsection
(a), the effective price for peanuts is equal to the total of—
‘‘(1) the greater of—
‘‘(A) the national average market price re-
ceived by peanut producers during the marketing
season for peanuts, as determined by the Sec-
retary; or
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‘‘(B) the national average loan rate for a
marketing assistance loan for peanuts under sec-
tion 158G in effect for the marketing season for
peanuts under this chapter; and
‘‘(2) the payment rate in effect for peanuts under
section 158C for the purpose of making direct pay-
ments with respect to peanuts.
‘‘(c) INCOME PROTECTION PRICE.—For purposes of
subsection (a), the income protection price for peanuts shall
be equal to $520 per ton.
‘‘(d) PAYMENT AMOUNT.—The amount of the counter-
cyclical payment to be paid to the peanut producers on a
farm for a crop year shall be equal to the product obtained
by multiplying—
‘‘(1) the payment rate specified in subsection (e);
‘‘(2) the payment acres on the farm; by
‘‘(3) the payment yield for the farm.
‘‘(e) PAYMENT RATE.—The payment rate used to make
counter-cyclical payments with respect to peanuts for a
crop year shall be equal to the difference between—
‘‘(1) the income protection price for peanuts; and
‘‘(2) the effective price determined under sub-
section (b) for peanuts.
‘‘(f) TIME FOR PAYMENTS.—
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‘‘(1) IN
GENERAL.—The Secretary shall make
counter-cyclical payments to peanut producers on a
farm under this section for a crop of peanuts as soon
as practicable after determining under subsection (a)
that the payments are required for the crop year.
‘‘(2) PARTIAL PAYMENT.—
‘‘(A) IN
GENERAL.—At the option of the
Secretary, the peanut producers on a farm may
elect to receive up to 40 percent of the projected
counter-cyclical payment to be made under this
section for a crop of peanuts on completion of the
first 2 months of the marketing season for the
crop, as determined by the Secretary.
‘‘(B) REPAYMENT.—The peanut producers
on a farm shall repay to the Secretary the
amount, if any, by which the payment received
by producers on the farm (including any partial
payments) exceeds the counter-cyclical payment
the producers on the farm are eligible for under
this section.
‘‘SEC. 158E. PRODUCER AGREEMENTS.
‘‘(a) COMPLIANCE WITH CERTAIN REQUIREMENTS.—
‘‘(1) REQUIREMENTS.—Before the peanut pro-
ducers on a farm may receive direct payments or
counter-cyclical payments with respect to the farm,
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the peanut producers on the farm shall agree during
the fiscal year or crop year, respectively, for which the
payments 
are 
received, 
in 
exchange 
for 
the
payments—
‘‘(A) to comply with applicable highly erod-
ible land conservation requirements under sub-
title B of title XII of the Food Security Act of
1985 (16 U.S.C. 3811 et seq.);
‘‘(B) to comply with applicable wetland
conservation requirements under subtitle C of
title XII of that Act (16 U.S.C. 3821 et seq.);
‘‘(C) to comply with the planting flexibility
requirements of section 158F; and
‘‘(D) to use a quantity of the land on the
farm equal to the peanut acres, for an agricul-
tural or conserving use, and not for a non-
agricultural commercial or industrial use, as de-
termined by the Secretary.
‘‘(2) COMPLIANCE.—The Secretary may promul-
gate such regulations as the Secretary considers nec-
essary to ensure peanut producer compliance with
paragraph (1).
‘‘(b) FORECLOSURE.—
‘‘(1) IN GENERAL.—The Secretary shall not re-
quire the peanut producers on a farm to repay a di-
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rect payment or counter-cyclical payment if a fore-
closure has occurred with respect to the farm and the
Secretary determines that forgiving the repayment is
appropriate to provide fair and equitable treatment.
‘‘(2) COMPLIANCE WITH REQUIREMENTS.—
‘‘(A) IN
GENERAL.—This subsection shall
not void the responsibilities of the peanut pro-
ducers on a farm under subsection (a) if the pea-
nut producers on the farm continue or resume
operation, or control, of the farm.
‘‘(B) APPLICABLE REQUIREMENTS.—On the
resumption of operation or control over the farm
by the peanut producers on the farm, the require-
ments of subsection (a) in effect on the date of
the foreclosure shall apply.
‘‘(c) TRANSFER OR CHANGE OF INTEREST IN FARM.—
‘‘(1) TERMINATION.—Except as provided in
paragraph (5), a transfer of (or change in) the inter-
est of the peanut producers on a farm in peanut acres
for which direct payments or counter-cyclical pay-
ments are made shall result in the termination of the
payments with respect to the peanut acres, unless the
transferee or owner of the acreage agrees to assume all
obligations under subsection (a).
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‘‘(2) EFFECTIVE DATE.—The termination takes
effect on the date of the transfer or change.
‘‘(3) TRANSFER OF PAYMENT BASE AND YIELD.—
The Secretary shall not impose any restriction on the
transfer of the peanut acres or payment yield of a
farm as part of a transfer or change described in
paragraph (1).
‘‘(4) MODIFICATION.—At the request of the trans-
feree or owner, the Secretary may modify the require-
ments of subsection (a) if the modifications are con-
sistent with the purposes of subsection (a), as deter-
mined by the Secretary.
‘‘(5) EXCEPTION.—If a peanut producer entitled
to a direct payment or counter-cyclical payment dies,
becomes incompetent, or is otherwise unable to receive
the payment, the Secretary shall make the payment,
in accordance with regulations promulgated by the
Secretary.
‘‘(d) ACREAGE REPORTS.—As a condition on the re-
ceipt of any benefits under this chapter, the Secretary shall
require the peanut producers on a farm to submit to the
Secretary acreage reports for the farm.
‘‘(e) TENANTS
AND SHARECROPPERS.—In carrying
out this chapter, the Secretary shall provide adequate safe-
guards to protect the interests of tenants and sharecroppers.
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‘‘(f) SHARING
OF PAYMENTS.—The Secretary shall
provide for the sharing of direct payments and counter-cy-
clical payments among the peanut producers on a farm on
a fair and equitable basis.
‘‘SEC. 158F. PLANTING FLEXIBILITY.
‘‘(a) PERMITTED CROPS.—Subject to subsection (b),
any commodity or crop may be planted on peanut acres
on a farm.
‘‘(b) LIMITATIONS AND EXCEPTIONS REGARDING CER-
TAIN COMMODITIES.—
‘‘(1) LIMITATIONS.—The planting of the fol-
lowing agricultural commodities shall be prohibited
on peanut acres:
‘‘(A) Fruits.
‘‘(B) Vegetables (other than lentils, mung
beans, and dry peas).
‘‘(C) In the case of the 2003 and subsequent
crops of an agricultural commodity, wild rice.
‘‘(2) EXCEPTIONS.—Paragraph (1) shall not
limit the planting of an agricultural commodity spec-
ified in paragraph (1)—
‘‘(A) in any region in which there is a his-
tory of double-cropping of peanuts with agricul-
tural commodities specified in paragraph (1), as
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determined by the Secretary, in which case the
double-cropping shall be permitted;
‘‘(B) on a farm that the Secretary deter-
mines has a history of planting agricultural
commodities specified in paragraph (1) on pea-
nut acres, except that direct payments and
counter-cyclical payments shall be reduced by an
acre for each acre planted to the agricultural
commodity; or
‘‘(C) by the peanut producers on a farm
that the Secretary determines has an established
planting history of a specific agricultural com-
modity specified in paragraph (1), except that—
‘‘(i) the quantity planted may not ex-
ceed the average annual planting history of
the agricultural commodity by the peanut
producers on the farm during the 1996
through 2001 crop years (excluding any
crop year in which no plantings were
made), as determined by the Secretary; and
‘‘(ii) direct payments and counter-cy-
clical payments shall be reduced by an acre
for each acre planted to the agricultural
commodity.
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‘‘SEC. 158G. MARKETING ASSISTANCE LOANS AND LOAN DE-
FICIENCY PAYMENTS FOR PEANUTS.
‘‘(a) NONRECOURSE LOANS AVAILABLE.—
‘‘(1) AVAILABILITY.—For each of the 2002
through 2006 crops of peanuts, the Secretary shall
make available to peanut producers on a farm non-
recourse marketing assistance loans for peanuts pro-
duced on the farm.
‘‘(2) TERMS AND CONDITIONS.—The loans shall
be made under terms and conditions that are pre-
scribed by the Secretary and at the loan rate estab-
lished under subsection (b).
‘‘(3) ELIGIBLE PRODUCTION.—The producers on
a farm shall be eligible for a marketing assistance
loan under this section for any quantity of peanuts
produced on the farm.
‘‘(4) TREATMENT OF CERTAIN COMMINGLED COM-
MODITIES.—In carrying out this section, the Sec-
retary shall make loans to peanut producers on a
farm that would be eligible to obtain a marketing as-
sistance loan but for the fact the peanuts owned by
the peanut producers on the farm are commingled
with other peanuts of other producers in facilities un-
licensed for the storage of agricultural commodities by
the Secretary or a State licensing authority, if the
peanut producers on a farm obtaining the loan agree
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to immediately redeem the loan collateral in accord-
ance with section 158E.
‘‘(5) OPTIONS FOR OBTAINING LOAN.—A mar-
keting assistance loan under this subsection, and loan
deficiency payments under subsection (e), may be ob-
tained at the option of the peanut producers on a
farm through—
‘‘(A) a designated marketing association of
peanut producers that is approved by the Sec-
retary, which may own or construct necessary
storage facilities. In the Southeast and Southwest
areas such designated marketing association
shall be operated primarily on behalf of peanut
producers. The designated area marketing asso-
ciation shall be allowed to form marketing pools
for peanuts by type and quality, including the
creation of a separate pool for Valencia peanuts
in New Mexico;
‘‘(B) the Farm Service Agency; or
‘‘(C) a loan servicing agent approved by the
Secretary.
‘‘(6) LOAN SERVICING AGENT.—If approved by a
majority of historical peanut producers in a State
voting in a referendum conducted by the Secretary, as
a condition of the Secretary’s approval of an entity
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to serve as a loan servicing agent or to handle or store
peanuts for producers that receive any marketing loan
benefits in the State, the entity shall agree to provide
adequate storage (if available) and handling of pea-
nuts at the commercial rate to other approved loan
servicing agents and marketing associations.
‘‘(b) LOAN RATE.—The loan rate for a marketing as-
sistance loan for peanuts under subsection (a) shall be equal
to $400 per ton.
‘‘(c) TERM OF LOAN.—
‘‘(1) IN GENERAL.—A marketing assistance loan
for peanuts under subsection (a) shall have a term of
9 months beginning on the first day of the first month
after the month in which the loan is made.
‘‘(2) EXTENSIONS PROHIBITED.—The Secretary
may not extend the term of a marketing assistance
loan for peanuts under subsection (a).
‘‘(d) REPAYMENT RATE.—The Secretary shall permit
peanut producers on a farm to repay a marketing assist-
ance loan for peanuts under subsection (a) at a rate that
is the lesser of—
‘‘(1) the loan rate established for peanuts under
subsection (b), plus interest (as determined by the
Secretary); or
‘‘(2) a rate that the Secretary determines will—
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‘‘(A) minimize potential loan forfeitures;
‘‘(B) minimize the accumulation of stocks of
peanuts by the Federal Government;
‘‘(C) minimize the cost incurred by the Fed-
eral Government in storing peanuts; and
‘‘(D) allow peanuts produced in the United
States to be marketed freely and competitively,
both domestically and internationally.
‘‘(e) LOAN DEFICIENCY PAYMENTS.—
‘‘(1) AVAILABILITY.—The Secretary may make
loan deficiency payments available to the peanut pro-
ducers on a farm that, although eligible to obtain a
marketing assistance loan for peanuts under sub-
section (a), agree to forgo obtaining the loan for the
peanuts in return for payments under this subsection.
‘‘(2) AMOUNT.—A loan deficiency payment
under 
this 
subsection 
shall 
be 
obtained 
by
multiplying—
‘‘(A) the loan payment rate determined
under paragraph (3) for peanuts; by
‘‘(B) the quantity of the peanuts produced
by the peanut producers on the farm, excluding
any quantity for which the producers on the
farm obtain a loan under subsection (a).
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‘‘(3) LOAN PAYMENT RATE.—For purposes of this
subsection, the loan payment rate shall be the amount
by which—
‘‘(A) the loan rate established under sub-
section (b); exceeds
‘‘(B) the rate at which a loan may be re-
paid under subsection (d).
‘‘(4) TIME FOR PAYMENT.—The Secretary shall
make a payment under this subsection to the peanut
producers on a farm with respect to a quantity of
peanuts as of the earlier of—
‘‘(A) the date on which the peanut pro-
ducers on the farm marketed or otherwise lost
beneficial interest in the peanuts, as determined
by the Secretary; or
‘‘(B) the date the peanut producers on the
farm request the payment.
‘‘(f) COMPLIANCE WITH CONSERVATION REQUIRE-
MENTS.—As a condition of the receipt of a marketing assist-
ance loan under subsection (a), the peanut producers on a
farm shall comply during the term of the loan with—
‘‘(1) applicable highly erodible land conservation
requirements under subtitle B of title XII of the Food
Security Act of 1985 (16 U.S.C. 3811 et seq.); and
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‘‘(2) applicable wetland conservation require-
ments under subtitle C of title XII of that Act (16
U.S.C. 3821 et seq.).
‘‘(g) REIMBURSABLE AGREEMENTS AND PAYMENT OF
EXPENSES.—To the maximum extent practicable, the Sec-
retary shall implement any reimbursable agreements or
provide for the payment of expenses under this chapter in
a manner that is consistent with the implementation of the
agreements or payment of the expenses for other commod-
ities.
‘‘(h) AREA MARKETING ASSOCIATION COSTS.—If ap-
proved by a majority of historical peanut producers in a
State voting in a referendum conducted by the Secretary,
the Secretary shall deduct in a marketing assistance loan
made to an area marketing association in a marketing area
in the State, such costs as the area marketing association
may reasonably incur in carrying out the responsibilities,
operations, and activities of the association and Commodity
Credit Corporation under this section.
‘‘(i) DEFINITION OF COMMINGLE.—In this section and
section 158H, the term ‘commingle’, with respect to pea-
nuts, means—
‘‘(1) the mixing of peanuts produced on different
farms by the same or different producers; or
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‘‘(2) the mixing of peanuts pledged for marketing
assistance loans with peanuts that are not pledged for
marketing assistance loans, to facilitate storage.
‘‘SEC. 158H. QUALITY IMPROVEMENT.
‘‘(a) OFFICIAL INSPECTION.—
‘‘(1) IN GENERAL.—All peanuts placed under a
marketing assistance loan under section 158G or oth-
erwise sold or marketed shall be officially inspected
and graded by a Federal or State inspector.
‘‘(2) ACCOUNTING FOR COMMINGLED PEANUTS.—
If approved by a majority of historical peanut pro-
ducers in a State voting in a referendum conducted
by the Secretary, all peanuts stored commingled with
peanuts covered by a marketing assistance loan in the
State shall be graded and exchanged on a dollar value
basis, unless the Secretary determines that the bene-
ficial interest in the peanuts covered by the marketing
assistance loan have been transferred to other parties
prior to demand for delivery.
‘‘(b) TERMINATION OF PEANUT ADMINISTRATIVE COM-
MITTEE.—The Peanut Administrative Committee estab-
lished under Marketing Agreement No. 1436, which regu-
lates the quality of domestically produced peanuts under
the Agricultural Adjustment Act (7 U.S.C. 601 et seq.), re-
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enacted with amendments by the Agricultural Marketing
Agreement Act of 1937, is terminated.
‘‘(c) 
ESTABLISHMENT
OF
PEANUT
STANDARDS
BOARD.—
‘‘(1) IN GENERAL.—The Secretary shall establish
a Peanut Standards Board for the purpose of assist-
ing in the establishment of quality standards with re-
spect to peanuts.
‘‘(2) COMPOSITION.—The Secretary shall appoint
members to the Board that, to the maximum extent
practicable, reflect all regions and segments of the
peanut industry.
‘‘(3) DUTIES.—The Board shall assist the Sec-
retary in establishing quality standards for peanuts.
‘‘(d) CROPS.—This section shall apply beginning with
the 2002 crop of peanuts.’’.
(b) CONFORMING AMENDMENTS.—
(1) The chapter heading of chapter 2 of subtitle
D of the Federal Agriculture Improvement and Re-
form Act of 1996 (7 U.S.C. prec. 7271) is amended
by striking ‘‘PEANUTS AND’’.
(2) Section 155 of the Federal Agriculture Im-
provement and Reform Act of 1996 (7 U.S.C. 7271)
is repealed.
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SEC. 152. TERMINATION OF MARKETING QUOTAS FOR PEA-
NUTS 
AND 
COMPENSATION 
TO 
PEANUT
QUOTA HOLDERS.
(a) REPEAL OF MARKETING QUOTAS FOR PEANUTS.—
Effective beginning with the 2002 crop of peanuts, part VI
of subtitle B of title III of the Agricultural Adjustment Act
of 1938 (7 U.S.C. 1357 et seq.) is repealed.
(b) COMPENSATION OF QUOTA HOLDERS.—
(1) DEFINITIONS.—In this subsection:
(A) PEANUT QUOTA HOLDER.—
(i) IN
GENERAL.—The term ‘‘peanut
quota holder’’ means a person or entity that
owns a farm that—
(I) held a peanut quota estab-
lished for the farm for the 2001 crop of
peanuts under part VI of subtitle B of
title III of the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1357 et seq.) (as
in effect before the amendment made by
subsection (a));
(II) if there was not such a quota
established for the farm for the 2001
crop of peanuts, would be eligible to
have such a quota established for the
farm for the 2002 crop of peanuts, in
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the absence of the amendment made by
subsection (a); or
(III) is otherwise a farm that was
eligible for such a quota as of the effec-
tive date of the amendments made by
this section.
(ii) SEED
OR
EXPERIMENTAL
PUR-
POSES.—The Secretary shall apply the defi-
nition of ‘‘peanut quota holder’’ without re-
gard to temporary leases, transfers, or
quotas for seed or experimental purposes.
(B) SECRETARY.—The term ‘‘Secretary’’
means the Secretary of Agriculture.
(2) CONTRACTS.—The Secretary shall offer to
enter into a contract with peanut quota holders for
the purpose of providing compensation for the lost
value of quota as a result of the repeal of the mar-
keting quota program for peanuts under the amend-
ment made by subsection (a).
(3) PAYMENT PERIOD.—Under a contract, the
Secretary shall make payments to an eligible peanut
quota holder for each of fiscal years 2002 through
2006.
(4) TIME
FOR
PAYMENT.—The payments re-
quired under the contracts shall be provided in 5
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equal installments not later than September 30 of
each of fiscal years 2002 through 2006.
(5) PAYMENT AMOUNT.—The amount of the pay-
ment for a fiscal year to a peanut quota holder under
a contract shall be equal to the product obtained by
multiplying—
(A) $0.11 per pound; by
(B) the actual farm poundage quota (ex-
cluding any quantity for seed and experimental
peanuts) established for the farm of a peanut
quota holder under section 358–1(b) of the Agri-
cultural Adjustment Act of 1938 (7 U.S.C. 1358–
1(b)) (as in effect prior to the amendment made
by subsection (a)) for the 2001 marketing year.
(6) ASSIGNMENT OF PAYMENTS.—
(A) IN GENERAL.—The provisions of section
8(g) of the Soil Conservation and Domestic Al-
lotment Act (16 U.S.C. 590h(g)), relating to as-
signment of payments, shall apply to the pay-
ments made to peanut quota holders under the
contracts.
(B) NOTICE.—The peanut quota holder
making the assignment, or the assignee, shall
provide the Secretary with notice, in such man-
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ner as the Secretary may require, of any assign-
ment made under this subsection.
(c) CONFORMING AMENDMENTS.—
(1) ADMINISTRATIVE PROVISIONS.—Section 361
of the Agricultural Adjustment Act of 1938 (7 U.S.C.
1361) is amended by striking ‘‘peanuts,’’.
(2) ADJUSTMENT OF QUOTAS.—Section 371 of
the Agricultural Adjustment Act of 1938 (7 U.S.C.
1371) is amended—
(A) in the first sentence of subsection (a), by
striking ‘‘peanuts,’’; and
(B) in the first sentence of subsection (b), by
striking ‘‘peanuts’’.
(3) REPORTS AND RECORDS.—Section 373 of the
Agricultural Adjustment Act of 1938 (7 U.S.C. 1373)
is amended—
(A) in the first sentence of subsection (a)—
(i) by striking ‘‘peanuts,’’ each place it
appears;
(ii) by inserting ‘‘and’’ after ‘‘from
producers,’’; and
(iii) by striking ‘‘for producers, all’’
and all that follows through the period at
the end of the sentence and inserting ‘‘for
producers.’’; and
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(B) in subsection (b), by striking ‘‘pea-
nuts,’’.
(4) EMINENT DOMAIN.—Section 378(c) of the Ag-
ricultural Adjustment Act of 1938 (7 U.S.C. 1378(c))
is amended in the first sentence—
(A) by striking ‘‘cotton,’’ and inserting
‘‘cotton and’’; and
(B) by striking ‘‘and peanuts,’’.
(d) CROPS.—This section and the amendments made
by this section apply beginning with the 2002 crop of pea-
nuts.
Subtitle D—Administration
SEC. 161. MARKETING ORDERS FOR CANEBERRIES.
(a) IN GENERAL.—Section 8c of the Agricultural Ad-
justment Act (7 U.S.C. 608c), reenacted with amendments
by the Agricultural Marketing Agreement Act of 1937, is
amended—
(1) 
in 
subsection 
(2)(A), 
by 
inserting
‘‘caneberries (including raspberries, blackberries, and
loganberries),’’ after ‘‘other than pears, olives, grape-
fruit, cherries,’’; and
(2) in subsection (6)(I), by striking ‘‘tomatoes,,’’
and inserting ‘‘tomatoes, caneberries (including rasp-
berries, blackberries, and loganberries),’’.
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(b) CONFORMING AMENDMENT.—Section 8e(a) of the
Agricultural Adjustment Act (7 U.S.C. 608e–l(a)), reen-
acted with amendments by the Agricultural Marketing
Agreement Act of 1937, is amended in the first sentence by
striking ‘‘or apples’’ and inserting ‘‘apples, or caneberries
(including raspberries, blackberries, and loganberries)’’.
SEC. 162. RESERVE STOCK LEVEL.
Section 301(b)(14)(C) of the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1301(b)(14)(C)) is amended—
(1) in clause (i), by striking ‘‘100,000,000’’ and
inserting ‘‘75,000,000’’; and
(2) in clause (ii), by striking ‘‘15 percent’’ and
inserting ‘‘10 percent’’.
SEC. 163. FARM RECONSTITUTIONS.
(a) IN GENERAL.—Section 316(a)(1)(A)(ii) of the Ag-
ricultural 
Adjustment 
Act 
of 
1938 
(7 
U.S.C.
1314b(a)(1)(A)(ii)) is amended by adding at the end the
following: ‘‘Notwithstanding any other provision of law, for
the 2002 crop only, the Secretary shall allow special farm
reconstitutions, in lieu of lease and transfer of allotments
and quotas, under this section, in accordance with such con-
ditions as are established by the Secretary.’’.
(b) STUDY.—
(1) IN GENERAL.—The Secretary of Agriculture
shall conduct a study on the effects on the limitation
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on producers to move quota to a farm other than the
farm to which the quota was initially assigned under
part I of subtitle B of title III of the Agricultural Ad-
justment Act of 1938 (7 U.S.C. 1311 et seq.).
(2) REPORT.—Not later than 90 days after the
date of enactment of this Act, the Secretary shall sub-
mit to the Committee on Agriculture of the House of
Representatives and the Committee on Agriculture,
Nutrition, and Forestry of the Senate a report on the
results of the study.
SEC. 164. ADJUSTMENT AUTHORITY RELATED TO URUGUAY
ROUND COMPLIANCE.
Section 161 of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 7281) is amended by
adding at the end the following:
‘‘(e) ADJUSTMENT AUTHORITY RELATED TO URUGUAY
ROUND COMPLIANCE.—If the Secretary determines that ex-
penditures under subtitles A through D that are subject to
the total allowable domestic support levels under the Uru-
guay Round Agreements (as defined in section 2 of the Uru-
guay Round Agreements Act (19 U.S.C. 3501)), as in effect
on the date of enactment of this subsection, will exceed the
allowable levels for any applicable reporting period, the
Secretary may make adjustments in the amount of the ex-
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penditures to ensure that the expenditures do not exceed,
but are not less than, the allowable levels.
‘‘(f) EXPENDITURE LIMITATION.—If the Secretary
makes a determination under subsection (e) that expendi-
tures will exceed allowable levels for any applicable report-
ing period and notifies Congress of the Secretary’s intent
to make adjustments to ensure that expenditures do not ex-
ceed allowable levels, no expenditures under any program
proposed to be adjusted by the Secretary may be made after
the date that is 18 months after the date of the determina-
tion, unless a joint resolution disapproving the adjustments
is enacted by both Houses of Congress within 60 days of
the date of the notification.
‘‘(g) ANNUAL REPORT ON DOMESTIC SUPPORT.—Not
later than April 30 of each year, the Secretary shall submit
to the Committee on Agriculture of the House of Representa-
tives and the Committee on Agriculture, Nutrition, and
Forestry of the Senate a report that describes—
‘‘(1) estimated levels of domestic support for ag-
ricultural commodities during the current marketing
year and the following marketing year;
‘‘(2) the manner in which the Secretary intends
to notify the World Trade Organization of the esti-
mated levels; and
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‘‘(3) proposed changes to domestic support pro-
grams subject to reduction commitments made in the
context of WTO trade negotiations.’’.
SEC. 165. SUSPENSION OF PERMANENT PRICE SUPPORT AU-
THORITY.
Section 171 of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 7301) is amended—
(1) by striking ‘‘2002’’ each place it appears and
inserting ‘‘2006’’; and
(2) in subsection (a)(1)—
(A) by striking subparagraph (E); and
(B) by redesignating subparagraphs (F)
through (I) as subparagraphs (E) through (H),
respectively.
SEC. 166. COMMODITY PURCHASES.
(a) IN GENERAL.—Section 191 of the Federal Agri-
culture Improvement and Reform Act of 1996 (7 U.S.C.
7331 et seq.) is amended to read as follows:
‘‘SEC. 191. COMMODITY PURCHASES.
‘‘(a) IN GENERAL.—To purchase agricultural com-
modities under this section, the Secretary shall use funds
of the Commodity Credit Corporation in an amount equal
to—
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‘‘(1) for each of fiscal years 2002 and 2003,
$130,000,000, of which not less than $100,000,000
shall be used for the purchase of specialty crops;
‘‘(2) for fiscal year 2004, $150,000,000, of which
not less than $120,000,000 shall be used for the pur-
chase of specialty crops;
‘‘(3) for fiscal year 2005, $170,000,000, of which
not less than $140,000,000 shall be used for the pur-
chase of specialty crops;
‘‘(4) for fiscal year 2006, $200,000,000, of which
not less than $170,000,000 shall be used for the pur-
chase of specialty crops; and
‘‘(5) for fiscal year 2007, $0.
‘‘(b) OTHER PURCHASES.—The Secretary shall ensure
that purchases of agricultural commodities under this sec-
tion are in addition to purchases by the Secretary under
any other law.
‘‘(c) PURCHASES BY DEPARTMENT OF DEFENSE FOR
SCHOOL LUNCH PROGRAM.—The Secretary shall provide
not less than $50,000,000 for each fiscal year of the funds
made available under subsection (a) to the Secretary of De-
fense to purchase fresh fruits and vegetables for distribution
to schools and service institutions in accordance with sec-
tion 6(a) of the Richard B. Russell National School Lunch
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Act (42 U.S.C. 1755(a)) in a manner prescribed by the Sec-
retary of Agriculture.
‘‘(d) PURCHASES FOR EMERGENCY FOOD ASSISTANCE
PROGRAM.—The Secretary shall use not less than
$40,000,000 for each fiscal year of the funds made available
under subsection (a) to purchase agricultural commodities
for distribution under the Emergency Food Assistance Act
of 1983 (7 U.S.C. 7501 et seq.).’’.
(b) SENSE OF THE SENATE CONCERNING PURCHASES
OF CRANBERRIES.—
(1) FINDINGS.—Congress finds that—
(A) the price per hundred pounds of cran-
berries has dropped from approximately $70 to
approximately $10;
(B) the cost of producing cranberries is be-
tween $30 and $35 per hundred pounds, which
is much more than the price per hundred pounds
of cranberries for each of the past 2 years;
(C) there is a serious economic crisis among
cranberry growers in the United States, espe-
cially in the States of Wisconsin, Massachusetts,
and New Jersey;
(D) the Cranberry Marketing Committee
has issued 2 marketing orders, but the marketing
orders have not led to higher prices;
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(E) although Congress directed the Sec-
retary of Agriculture to use $30,000,000 to pur-
chase cranberries in fiscal year 2001, the price
of cranberries has not risen significantly; and
(F) the cranberry industry faces a surplus
of cranberries and continuing low prices for
cranberries.
(2) SENSE OF THE SENATE.—It is the sense of
the Senate that the Secretary of Agriculture should
attempt to alleviate the economic crisis among cran-
berry growers by continuing to expend for each fiscal
year for the purchase of cranberries the same amount
as the Secretary expended for fiscal year 2001.
SEC. 167. HARD WHITE WHEAT INCENTIVE PAYMENTS.
Section 193 of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 1508) is amended to
read as follows:
‘‘SEC. 193. HARD WHITE WHEAT INCENTIVE PAYMENTS.
‘‘(a) IN GENERAL.—For the period of crop years 2003
through 2005, the Secretary shall use $40,000,000 of funds
of the Commodity Credit Corporation to provide incentive
payments to producers of hard white wheat to ensure that
hard white wheat, produced on a total of not more than
2,000,000 acres, meets minimum quality standards estab-
lished by the Secretary.
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‘‘(b) APPLICATION.—The amounts payable to pro-
ducers in the form of payments under this section shall be
determined through the submission of bids by producers in
such manner as the Secretary may prescribe.
‘‘(c) DEMAND FOR WHEAT.—To be eligible to obtain
a payment under this section, a producer shall demonstrate
to the Secretary the availability of buyers and end-users
for the wheat that is the covered by the payment.’’.
SEC. 168. LIVESTOCK ASSISTANCE PROGRAM.
Section 194 of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 6933) is amended to
read as follows:
‘‘SEC. 194. LIVESTOCK ASSISTANCE PROGRAM.
‘‘(a) IN GENERAL.—The Secretary shall carry out a
program to provide livestock feed assistance to livestock pro-
ducers affected by disasters.
‘‘(b) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this section
$500,000,000 for each of fiscal years 2003 through 2008.’’.
SEC. 169. PAYMENT LIMITATIONS; NUTRITION AND COM-
MODITY PROGRAMS.
(a) PAYMENT LIMITATIONS.—
(1) IN GENERAL.—Section 1001 of the Food Se-
curity Act of 1985 (7 U.S.C. 1308) is amended to
read as follows:
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‘‘SEC. 1001. PAYMENT LIMITATIONS.
‘‘(a) DEFINITIONS.—In this section and sections
1001A through 1001F:
‘‘(1) BENEFICIAL
INTEREST.—The term ‘bene-
ficial interest’ means an interest in an entity that is
at least—
‘‘(A) 10 percent; or
‘‘(B) a lower percentage, which the Sec-
retary shall establish, on a case-by-case basis, as
needed to achieve the purposes of this section and
sections 1001A through 1001F, including effec-
tive implementation of section 1001A(b).
‘‘(2) COUNTER-CYCLICAL
PAYMENT.—The term
‘counter-cyclical payment’ means a payment made
under section 114 or 158D of the Federal Agriculture
Improvement and Reform Act of 1996.
‘‘(3) DIRECT PAYMENT.—The term ‘direct pay-
ment’ means a payment made under section 113 or
158C of the Federal Agriculture Improvement and
Reform Act of 1996.
‘‘(4) ENTITY.—
‘‘(A) IN
GENERAL.—The term ‘entity’
means—
‘‘(i) an entity that (subject to the re-
quirements of this section and section
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1001A) is eligible to receive a payment
under subsection (b) or (c);
‘‘(ii) a corporation, joint stock com-
pany, 
association, 
limited 
partnership,
charitable organization, a grantor of a rev-
ocable trust, or other similar entity (as de-
termined by the Secretary); and
‘‘(iii) an entity that is participating
in a farming operation as a partner in a
general partnership or as a participant in
a joint venture.
‘‘(B) 
EXCLUSION.—Except 
in 
section
1001F, the term ‘entity’ does not include an enti-
ty that is a general partnership or joint venture.
‘‘(5) 
INDIVIDUAL.—The 
term 
‘individual’
means—
‘‘(A) a natural person, and minor children
of the natural person (as determined by the Sec-
retary), that (subject to the requirements of this
section and section 1001A) is eligible to receive
a payment under subsection (b) or (c); and
‘‘(B) an individual participating in a
farming operation as a partner in a general
partnership, a participant in a joint venture, a
grantor of a revocable trust, or a participant in
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a similar entity (as determined by the Sec-
retary).
‘‘(6) LOAN COMMODITY.—The term ‘loan com-
modity’ has the meaning given the term in section
102 of the Federal Agriculture Improvement and Re-
form Act of 1996.
‘‘(7) SECRETARY.—The term ‘Secretary’ means
the Secretary of Agriculture.
‘‘(b) LIMITATIONS ON DIRECT AND COUNTER-CYCLI-
CAL PAYMENTS.—Subject to subsections (d) through (i), the
total amount of direct payments and counter-cyclical pay-
ments that an individual or entity may receive, directly
or indirectly, during any fiscal year shall not exceed
$75,000.
‘‘(c) LIMITATIONS ON MARKETING LOAN GAINS, LOAN
DEFICIENCY PAYMENTS, AND COMMODITY CERTIFICATE
TRANSACTIONS.—
‘‘(1) IN
GENERAL.—Subject to subsections (d)
through (i), the total amount of the payments and
benefits described in paragraph (2) that an indi-
vidual or entity may receive, directly or indirectly,
during any crop year shall not exceed $150,000.
‘‘(2) PAYMENTS AND BENEFITS.—Paragraph (1)
shall apply to the following payments and benefits:
‘‘(A) MARKETING LOAN GAINS.—
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‘‘(i) REPAYMENT GAINS.—Any gain re-
alized by a producer from repaying a mar-
keting assistance loan under section 131 or
158G(a) of the Federal Agriculture Im-
provement and Reform Act of 1996 for a
crop of any loan commodity or peanuts, re-
spectively, at a lower level than the original
loan rate established for the loan commodity
or peanuts under section 132 or 158G(d) of
that Act, respectively.
‘‘(ii) FORFEITURE GAINS.—In the case
of settlement of a marketing assistance loan
under section 131 or 158G(a) of that Act for
a crop of any loan commodity or peanuts,
respectively, by forfeiture, the amount by
which the loan amount exceeds the repay-
ment amount for the loan if the loan had
been settled by repayment instead of for-
feiture.
‘‘(B) LOAN
DEFICIENCY
PAYMENTS.—Any
loan deficiency payment received for a loan com-
modity or peanuts under section 135 or 158G(e)
of that Act, respectively.
‘‘(C) COMMODITY CERTIFICATES.—Any gain
realized from the use of a commodity certificate
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issued by the Commodity Credit Corporation, as
determined by the Secretary, including the use of
a certificate for the settlement of a marketing as-
sistance loan made under section 131 or 158G(a)
of that Act.
‘‘(d) SETTLEMENT
OF CERTAIN LOANS.—Notwith-
standing subtitle C and section 158G of the Federal Agri-
culture Improvement and Reform Act of 1996, if the
amount of payments and benefits described in subsection
(c)(2) attributed directly or indirectly to an individual or
entity for a crop year reaches the limitation described in
subsection (c)(1)—
‘‘(1) the portion of any unsettled marketing as-
sistance loan made under section 131 or 158G(a) of
that Act attributed directly or indirectly to the indi-
vidual or entity shall be settled through the repay-
ment of the total loan principal, plus applicable in-
terest; and
‘‘(2) the Secretary may refuse to provide to the
producer for the crop year any additional marketing
assistance loans under section 131 or 158G(a) of that
Act.
‘‘(e) PAYMENTS TO INDIVIDUALS AND ENTITIES.—
‘‘(1) INTERESTS WITHIN THE SAME ENTITY.—All
individuals or entities that are owners of an entity,
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including shareholders, may not collectively receive
payments directly or indirectly that are attributable
to the ownership interests in the entity for a fiscal or
corresponding crop year that exceed the limitations
established under subsections (b) and (c).
‘‘(2) ALL INTERESTS OF AN INDIVIDUAL OR EN-
TITY.—An individual or entity may not receive, di-
rectly or indirectly, through all ownership interests of
the individual or entity from all sources, payments
for a fiscal or corresponding crop year that exceed the
limitations established under subsections (b) and (c).
‘‘(f) MARRIED COUPLES.—During a fiscal and cor-
responding crop year, the total amount of payments and
benefits described in subsections (b) and (c) that a married
couple may receive directly or indirectly may not exceed—
‘‘(1) the limits described in subsections (b) and
(c); plus
‘‘(2) if each spouse meets the other requirements
established under this section and section 1001A, a
combined total of an additional $50,000.
‘‘(g) PUBLIC SCHOOLS.—The provisions of this section
that limit payments to any individual or entity shall not
be applicable to land owned by a public school district or
land owned by a State that is used to maintain a public
school.
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‘‘(h) TIME LIMITS.—The Secretary shall promulgate
regulations that establish time limits for the various steps
involved with notice, hearing, decision, and the appeals pro-
cedure in order to ensure expeditious handling and settle-
ment of payment limitation disputes.
‘‘(i) GOOD FAITH RELIANCE.—Notwithstanding any
other provision of law, an action taken by an individual
or other entity in good faith on action or advice of an au-
thorized representative of the Secretary may be accepted as
meeting the requirements of this section or section 1001A,
to the extent the Secretary determines it is desirable in
order to provide fair and equitable treatment.’’.
(2) SUBSTANTIVE CHANGE.—Section 1001A(a) of
the Food Security Act of 1985 (7 U.S.C. 1308–1(a))
is amended—
(A) in the section heading, by striking
‘‘PREVENTION OF CREATION OF ENTITIES
TO QUALIFY AS SEPARATE PERSONS;’’ and
inserting ‘‘SUBSTANTIVE CHANGE;’’;
(B) by striking ‘‘(a) PREVENTION’’ and all
that follows through the end of paragraph (2)
and inserting the following:
‘‘(a) SUBSTANTIVE CHANGE.—
‘‘(1) IN GENERAL.—The Secretary may not ap-
prove (for purposes of the application of the limita-
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tions under this section) any change in a farming op-
eration that otherwise will increase the number of in-
dividuals or entities to which the limitations under
this section are applied unless the Secretary deter-
mines that the change is bona fide and substantive.
‘‘(2) FAMILY
MEMBERS.—For the purpose of
paragraph (1), the addition of a family member to a
farming operation under the criteria established
under subsection (b)(3)(B) shall be considered a bona
fide and substantive change in the farming oper-
ation.’’;
(C) in the first sentence of paragraph (3)—
(i) by striking ‘‘as a separate person’’;
and
(ii) by inserting ‘‘, as determined by
the Secretary’’ before the period at the end;
and
(D) by striking paragraph (4).
(3) ACTIVELY
ENGAGED
IN
FARMING.—Section
1001A(b) of the Food Security Act of 1985 (7 U.S.C.
1308–1(b)) is amended—
(A) by striking paragraph (1) and inserting
the following:
‘‘(1) IN GENERAL.—To be eligible to receive, di-
rectly or indirectly, payments or benefits (as described
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in subsections (b) and (c) of section 1001 as being
subject to limitation) with respect to a particular
farming operation an individual or entity shall be ac-
tively engaged in farming with respect to the oper-
ation, as provided under paragraphs (2), (3), and
(4).’’;
(B) in paragraph (2)—
(i) in subparagraph (A)(i), by striking
subclause (II) and inserting the following:
‘‘(II) personal labor and active
personal management (in accordance
with subparagraph (F));’’;
(ii) by striking subparagraph (B) and
inserting the following:
‘‘(B) ENTITIES.—An entity (as defined in
section 1001(a)) shall be considered as actively
engaged in farming with respect to a farming
operation if—
‘‘(i) the entity separately makes a sig-
nificant contribution (based on the total
value of the farming operation) of capital,
equipment, or land;
‘‘(ii)(I) the stockholders or members
that collectively own at least 50 percent of
the combined beneficial interest in the enti-
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ty make a significant contribution of per-
sonal labor or active personal management
to the operation; or
‘‘(II) in the case of a corporation or
entity in which all of the beneficial interests
are held by family members (as defined in
paragraph (3)(B))—
‘‘(aa) any stockholder (or house-
hold comprised of a stockholder and the
spouse of the stockholder) who owns at
least 10 percent of the beneficial inter-
est and makes a significant contribu-
tion of personal labor or active per-
sonal management; or
‘‘(bb) any combination of stock-
holders who collectively own at least 10
percent of the beneficial interest and
makes a significant contribution of
personal labor or active personal man-
agement; and
‘‘(iii) the standards provided in clauses
(ii) and (iii) of subparagraph (A), as ap-
plied to the entity, are met by the entity.’’;
and
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(iii) by adding at the end the fol-
lowing:
‘‘(E) ACTIVE
PERSONAL
MANAGEMENT.—
For an individual to be considered to be pro-
viding active personal management under this
paragraph on behalf of the individual or entity,
the management provided by the individual shall
be personally provided on a regular, substantial,
and continuous basis through the direct super-
vision and direction of—
‘‘(i) activities and labor involved in
the farming operation; and
‘‘(ii) onsite services that are directly
related and necessary to the farming oper-
ation.
‘‘(F) SIGNIFICANT CONTRIBUTION OF PER-
SONAL
LABOR
OR
ACTIVE
PERSONAL
MANAGE-
MENT.—
‘‘(i) IN GENERAL.—For an individual
to be considered to be providing a signifi-
cant contribution of personal labor or active
personal management under this paragraph
on behalf of the individual or entity, the
total contribution of personal labor and ac-
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tive personal management shall be at least
equal to the lesser of—
‘‘(I) 1,000 hours annually; or
‘‘(II) 50 percent of the commensu-
rate share of the total number of hours
of personal labor and active personal
management required to conduct the
farming operation.
‘‘(ii) MINIMUM
NUMBER
OF
LABOR
HOURS.—For the purpose of clause (i), the
minimum number of labor hours required to
produce each commodity shall be equal to
the number of hours that would be necessary
to conduct a farming operation for the pro-
duction of each commodity that is com-
parable in size to an individual or entity’s
commensurate share in the farming oper-
ation for the production of the commodity,
based on the minimum number of hours per
acre required to produce the commodity in
the State where the farming operation is lo-
cated, as determined by the Secretary.’’;
(C) in paragraph (3)—
(i) by striking subparagraph (A) and
inserting the following:
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‘‘(A) LANDOWNERS.—An individual or enti-
ty that is a landowner contributing the owned
land and that meets the standard provided in
clauses (ii) and (iii) of paragraph (2)(A), if—
‘‘(i) the landowner share rents the
land;
‘‘(ii) the tenant is actively engaged in
farming; and
‘‘(iii) the share received by the land-
owner is commensurate with the share of the
crop or income received as rent; or
‘‘(iv)(I) the landowner makes a signifi-
cant contribution of active personal man-
agement;
‘‘(II) the landowner formerly made a
significant contribution of personal labor or
active personal management on the land for
which payments are received and ceased to
make the contribution as a result of a dis-
ability, as determined by the Secretary; or
‘‘(III) the landowner or spouse of the
landowner formerly made a significant con-
tribution of personal labor or active per-
sonal management on the land for which
payments are received and ceased to make
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the contribution as a result of death or re-
tirement, and 1 or more family members of
the landowner currently make a significant
contribution of personal labor or active per-
sonal management on the land.’’; and
(ii) in subparagraph (B), by striking
‘‘persons’’ and inserting ‘‘individuals and
entities’’; and
(D) in paragraph (4)—
(i) in the paragraph heading, by strik-
ing ‘‘PERSONS’’ and inserting ‘‘INDIVID-
UALS AND ENTITIES’’;
(ii) in the matter preceding subpara-
graph (A), by striking ‘‘persons’’ and in-
serting ‘‘individuals and entities’’; and
(iii) in subparagraph (B)—
(I) in the subparagraph heading,
by striking ‘‘PERSONS’’ and inserting
‘‘INDIVIDUALS AND ENTITIES’’; and
(II) by striking ‘‘person, or class
of persons’’ and inserting ‘‘individual
or entity, or class of individuals or en-
tities’’;
(E) in paragraph (5)—
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(i) by striking ‘‘A person’’ and insert-
ing ‘‘An individual or entity’’; and
(ii) by striking ‘‘such person’’ and in-
serting ‘‘the individual or entity’’; and
(F) in paragraph (6), by striking ‘‘a per-
son’’ and inserting ‘‘an individual or entity’’.
(4) ADMINISTRATION.—Section 1001A of the
Food Security Act of 1985 (7 U.S.C. 1308–1) is
amended by adding at the end the following:
‘‘(c) ADMINISTRATION.—
‘‘(1) REVIEWS.—
‘‘(A) IN GENERAL.—During each of fiscal
years 2002 through 2006, the Office of Inspector
General for the Department of Agriculture shall
conduct a review of the administration of the re-
quirements of this section and sections 1001,
1001B, 1001C, and 1001E in at least 6 States.
‘‘(B) MINIMUM
NUMBER
OF
COUNTIES.—
Each State review described in subparagraph
(A) shall cover at least 5 counties in the State.
‘‘(C) REPORT.—Not later than 90 days
after completing a review described in subpara-
graph (A), the Inspector General for the Depart-
ment of Agriculture shall issue a final report to
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the Secretary of the findings of the Inspector
General.
‘‘(2) EFFECT OF REPORT.—If a report issued
under paragraph (1) reveals that significant problems
exist in the implementation of payment limitation re-
quirements of this section and sections 1001, 1001B,
1001C, and 1001E in a State and the Secretary
agrees that the problems exist, the Secretary—
‘‘(A) shall initiate a training program re-
garding the payment limitation requirements;
and
‘‘(B) may require that all payment limita-
tion determinations regarding farming oper-
ations in the State be issued from the head-
quarters of the Farm Service Agency.’’.
(5) SCHEME OR DEVICE.—Section 1001B of the
Food Security Act of 1985 (7 U.S.C. 1308–2) is
amended—
(A) by striking ‘‘person’’ each place it ap-
pears and inserting ‘‘individual or entity’’; and
(B) by striking ‘‘paragraphs (1) and (2)’’
and inserting ‘‘subsections (b) and (c)’’.
(6) FOREIGN INDIVIDUALS AND ENTITIES.—Sec-
tion 1001C(b) of the Food Security Act of 1985 (7
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U.S.C. 1308–3(b)) is amended in the first sentence by
striking ‘‘considered a person that is’’.
(7) EDUCATION PROGRAM.—Section 1001D(c) of
the Food Security Act of 1985 (7 U.S.C. 1308–4(c))
is amended by striking ‘‘5 persons’’ and inserting ‘‘5
individuals or entities’’.
(8) REPORT TO CONGRESS.—No later than 180
days after the date of enactment of this Act, the Sec-
retary of Agriculture shall provide a report to the
Committee on Agriculture of the House of Representa-
tives and the Committee on Agriculture, Nutrition,
and Forestry of the Senate that describes—
(A) how State and county office employees
are trained regarding the payment limitation re-
quirements of section 1001 through 1001E of the
Food Security Act of 1985 (7 U.S.C. 1308
through 1308–5);
(B) the general procedures used by State
and county office employees to identify potential
violations of the payment limitation require-
ments;
(C) the requirements for State and county
office employees to report serious violations of the
payment limitation requirements, including vio-
lations of section 1001B of that Act to the county
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committee, higher level officials of the Farm
Service Agency, and to the Office of Inspector
General; and
(D) the sanctions imposed against State
and county office employees who fail to report or
investigate potential violations of the payment
limitation requirements.
(b) ADJUSTED
GROSS
INCOME
LIMITATION.—The
Food Security Act of 1985 is amended by inserting after
section 1001E (7 U.S.C. 1308–5) the following:
‘‘SEC. 1001F. ADJUSTED GROSS INCOME LIMITATION.
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) ADJUSTED GROSS INCOME.—The term ‘ad-
justed gross income’ means adjusted gross income of
an individual or entity—
‘‘(A) as defined in section 62 of the Internal
Revenue Code of 1986 and implemented in ac-
cordance with procedures established by the Sec-
retary; and
‘‘(B) that is earned directly or indirectly
from 
all 
agricultural 
and 
nonagricultural
sources of an individual or entity for a fiscal or
corresponding crop year.
‘‘(2) AVERAGE ADJUSTED GROSS INCOME.—
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‘‘(A) IN GENERAL.—The term ‘average ad-
justed gross income’ means the average adjusted
gross income of an individual or entity for each
of the 3 preceding taxable years.
‘‘(B) EFFECTIVE
ADJUSTED
GROSS
IN-
COME.—In the case of an individual or entity
that does not have an adjusted gross income for
each of the 3 preceding taxable years, the Sec-
retary shall establish rules that provide the indi-
vidual or entity with an effective adjusted gross
income for the applicable year.
‘‘(b) LIMITATION.—Notwithstanding any other provi-
sion of title I of the Federal Agriculture Improvement and
Reform Act of 1996 (7 U.S.C. 7201 et seq.), an individual
or entity shall not be eligible for a payment or benefit de-
scribed in subsection (b) or (c) of section 1001 if the average
adjusted gross income of the individual or entity exceeds
$2,500,000.
‘‘(c) CERTIFICATION.—To comply with the limitation
under subsection (b), an individual or entity shall provide
to the Secretary—
‘‘(1) a certification by a certified public account-
ant or another third party that is acceptable to the
Secretary that the average adjusted gross income of
the individual or entity does not exceed $2,500,000; or
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‘‘(2) information and documentation regarding
the adjusted gross income of the individual or entity
through other procedures established by the Secretary.
‘‘(d) COMMENSURATE REDUCTION.—In the case of a
payment or benefit made in a fiscal year or corresponding
crop year to an entity that has an average adjusted gross
income of $2,500,000 or less, the payment shall be reduced
by an amount that is commensurate with the direct and
indirect ownership interest in the entity of each individual
who has an average adjusted gross income in excess of
$2,500,000 for that fiscal year or corresponding crop year.
‘‘(e) GENERAL
PARTNERSHIPS
AND
JOINT
VEN-
TURES.—For purposes of this section, a general partnership
or joint venture shall be considered an entity.’’.
(c) FOOD STAMP PROGRAM.—
(1) INCREASE
IN
BENEFITS
TO
HOUSEHOLDS
WITH CHILDREN.—Section 5(e) of the Food Stamp
Act of 1977 (7 U.S.C. 2014(e)) is amended by striking
paragraph (1) and inserting the following:
‘‘(1) STANDARD DEDUCTION.—
‘‘(A) IN
GENERAL.—Subject to the other
provisions of this paragraph, the Secretary shall
allow for each household a standard deduction
that is equal to the greater of—
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‘‘(i) the applicable percentage specified
in subparagraph (D) of the applicable in-
come standard of eligibility established
under subsection (c)(1); or
‘‘(ii) the minimum deduction specified
in subparagraph (E).
‘‘(B) GUAM.—The Secretary shall allow for
each household in Guam a standard deduction
that is—
‘‘(i) equal to the applicable percentage
specified in subparagraph (D) of twice the
income standard of eligibility established
under subsection (c)(1) for the 48 contig-
uous States and the District of Columbia;
but
‘‘(ii) not less than the minimum de-
duction for Guam specified in subpara-
graph (E).
‘‘(C) HOUSEHOLDS OF 6 OR MORE MEM-
BERS.—The income standard of eligibility estab-
lished under subsection (c)(1) for a household of
6 members shall be used to calculate the standard
deduction for each household of 6 or more mem-
bers.
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‘‘(D) APPLICABLE
PERCENTAGE.—For the
purpose of subparagraph (A), the applicable per-
centage shall be—
‘‘(i) 8 percent for each of fiscal years
2002 through 2004;
‘‘(ii) 8.25 percent for each of fiscal
years 2005 and 2006;
‘‘(iii) 8.5 percent for each of fiscal
years 2007 and 2008;
‘‘(iv) 8.75 percent for fiscal year 2009;
and
‘‘(v) 9 percent for each of fiscal years
2010 and 2011.
‘‘(E) MINIMUM DEDUCTION.—The minimum
deduction shall be $134, $229, $189, $269, and
$118 for the 48 contiguous States and the Dis-
trict of Columbia, Alaska, Hawaii, Guam, and
the Virgin Islands of the United States, respec-
tively.’’.
(2) EXCESS SHELTER EXPENSE DEDUCTION.—
(A) IN GENERAL.—Section 5(e)(7)(B) of the
Food 
Stamp 
Act 
of 
1977 
(7 
U.S.C.
2014(e)(7)(B)) is amended—
(i) in clause (v), by striking ‘‘and’’ at
the end; and