H. R. 2646—41
(C) to comply with the planting flexibility requirements
of section 1306;
(D) to use the land on the farm, in a quantity equal
to the attributable base acres for peanuts and any base
acres for the farm under subtitle A, for an agricultural
or conserving use, and not for a nonagricultural commercial
or industrial use, as determined by the Secretary; and
(E) to effectively control noxious weeds and otherwise
maintain the land in accordance with sound agricultural
practices, as determined by the Secretary, if the agricul-
tural or conserving use involves the noncultivation of any
portion of the land referred to in subparagraph (D).
(2) COMPLIANCE.—The Secretary may issue such rules as
the Secretary considers necessary to ensure producer compli-
ance with the requirements of paragraph (1).
(3) MODIFICATION.—At the request of the transferee or
owner, the Secretary may modify the requirements of this sub-
section if the modifications are consistent with the objectives
of this subsection, as determined by the Secretary.
(b) TRANSFER OR CHANGE OF INTEREST IN FARM.—
(1) TERMINATION.—Except as provided in paragraph (2),
a transfer of (or change in) the interest of the producers on
a farm in the base acres for peanuts for which direct payments
or counter-cyclical payments are made shall result in the termi-
nation of the payments with respect to those acres, unless
the transferee or owner of the acreage agrees to assume all
obligations under subsection (a). The termination shall take
effect on the date determined by the Secretary.
(2) EXCEPTION.—If a 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 rules issued by the
Secretary.
(c) ACREAGE REPORTS.—As a condition on the receipt of direct
payments, counter-cyclical payments, marketing assistance loans,
or loan deficiency payments under this subtitle, the Secretary shall
require the producers on a farm to which a payment yield and
base acres for peanuts are assigned under section 1302 to submit
to the Secretary annual acreage reports with respect to all cropland
on the farm.
(d) TENANTS AND SHARECROPPERS.—In carrying out this sub-
title, the Secretary shall provide adequate safeguards to protect
the interests of tenants and sharecroppers.
(e) SHARING OF PAYMENTS.—The Secretary shall provide for
the sharing of direct payments and counter-cyclical payments among
the producers on a farm on a fair and equitable basis.
SEC. 1306. PLANTING FLEXIBILITY.
(a) PERMITTED CROPS.—Subject to subsection (b), any com-
modity or crop may be planted on the base acres for peanuts
on a farm.
(b) LIMITATIONS REGARDING CERTAIN COMMODITIES.—
(1) GENERAL LIMITATION.—The planting of an agricultural
commodity specified in paragraph (2) shall be prohibited on
base acres for peanuts unless the commodity, if planted, is
destroyed before harvest.
H. R. 2646—42
(2) TREATMENT
OF
TREES
AND
OTHER
PERENNIALS.—The
planting of an agricultural commodity specified in paragraph
(3) that is produced on a tree or other perennial plant shall
be prohibited on base acres for peanuts.
(3) COVERED AGRICULTURAL COMMODITIES.—Paragraphs (1)
and (2) apply to the following agricultural commodities:
(A) Fruits.
(B) Vegetables (other than lentils, mung beans, and
dry peas).
(C) Wild rice.
(c) EXCEPTIONS.—Paragraphs (1) and (2) of subsection (b) shall
not limit the planting of an agricultural commodity specified in
paragraph (3) of that subsection—
(1) in any region in which there is a history of double-
cropping of peanuts with agricultural commodities specified
in subsection (b)(3), as determined by the Secretary, in which
case the double-cropping shall be permitted;
(2) on a farm that the Secretary determines has a history
of planting agricultural commodities specified in subsection
(b)(3) on the base acres for peanuts, except that direct payments
and counter-cyclical payments shall be reduced by an acre
for each acre planted to such an agricultural commodity; or
(3) by the producers on a farm that the Secretary deter-
mines has an established planting history of a specific agricul-
tural commodity specified in subsection (b)(3), except that—
(A) the quantity planted may not exceed the average
annual planting history of such agricultural commodity
by the producers on the farm in the 1991 through 1995
or 1998 through 2001 crop years (excluding any crop year
in which no plantings were made), as determined by the
Secretary; and
(B) direct payments and counter-cyclical payments
shall be reduced by an acre for each acre planted to such
agricultural commodity.
SEC. 1307. MARKETING ASSISTANCE LOANS AND LOAN DEFICIENCY
PAYMENTS FOR PEANUTS.
(a) NONRECOURSE LOANS AVAILABLE.—
(1) AVAILABILITY.—For each of the 2002 through 2007 crops
of peanuts, the Secretary shall make available to producers
on a farm nonrecourse marketing assistance loans for peanuts
produced on the farm. The loans shall be made under terms
and conditions that are prescribed by the Secretary and at
the loan rate established under subsection (b).
(2) ELIGIBLE PRODUCTION.—The producers on a farm shall
be eligible for a marketing assistance loan under this subsection
for any quantity of peanuts produced on the farm.
(3) TREATMENT OF CERTAIN COMMINGLED COMMODITIES.—
In carrying out this subsection, the Secretary shall make loans
to producers on a farm that would be eligible to obtain a
marketing assistance loan, but for the fact the peanuts owned
by the producers on the farm are commingled with other pea-
nuts in facilities unlicensed for the storage of agricultural
commodities by the Secretary or a State licensing authority,
if the producers obtaining the loan agree to immediately redeem
the loan collateral in accordance with section 166 of the Federal
H. R. 2646—43
Agriculture Improvement and Reform Act of 1996 (7 U.S.C.
7286).
(4) OPTIONS FOR OBTAINING LOAN.—A marketing assistance
loan under this subsection, and loan deficiency payments under
subsection (e), may be obtained at the option of the producers
on a farm through—
(A) a designated marketing association or marketing
cooperative of producers that is approved by the Secretary;
or
(B) the Farm Service Agency.
(5) STORAGE OF LOAN PEANUTS.—As a condition on the
Secretary’s approval of an individual or entity to provide storage
for peanuts for which a marketing assistance loan is made
under this section, the individual or entity shall agree—
(A) to provide such storage on a nondiscriminatory
basis; and
(B) to comply with such additional requirements as
the Secretary considers appropriate to accomplish the pur-
poses of this section and promote fairness in the adminis-
tration of the benefits of this section.
(6) PAYMENT OF PEANUT STORAGE COSTS.—Effective for the
2002 through 2006 crops of peanuts, to ensure proper storage
of peanuts for which a loan is made under this section, the
Secretary shall use the funds of the Commodity Credit Corpora-
tion to pay storage, handling, and other associated costs. This
authority terminates beginning with the 2007 crop of peanuts.
(7) MARKETING.—A marketing association or cooperative
may market peanuts for which a loan is made under this
section in any manner that conforms to consumer needs,
including the separation of peanuts by type and quality.
(b) LOAN RATE.—The loan rate for a marketing assistance loan
under for peanuts subsection (a) shall be equal to $355 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.—
(1) IN GENERAL.—The Secretary shall permit producers on
a farm to repay a marketing assistance loan for peanuts under
subsection (a) at a rate that is the lesser of—
(A) the loan rate established for peanuts under sub-
section (b), plus interest (determined in accordance with
section 163 of the Federal Agriculture Improvement and
Reform Act of 1996 (7 U.S.C. 7283)); or
(B) a rate that the Secretary determines will—
(i) minimize potential loan forfeitures;
(ii) minimize the accumulation of stocks of peanuts
by the Federal Government;
(iii) minimize the cost incurred by the Federal
Government in storing peanuts; and
(iv) allow peanuts produced in the United States
to be marketed freely and competitively, both domesti-
cally and internationally.
H. R. 2646—44
(2) GOOD
FAITH
EXCEPTION
TO
BENEFICIAL
INTEREST
REQUIREMENT.—For the 2002 crop year only, in the case of
the producers on a farm that marketed or otherwise lost bene-
ficial interest in the peanuts for which a marketing assistance
loan was made under this section before repaying the loan,
the Secretary shall permit the producers to repay the loan
at the applicable repayment rate that was in effect for peanuts
under this subsection on the date that the producers lost bene-
ficial interest, as determined by the Secretary, if the Secretary
determines the producers acted in good faith.
(e) LOAN DEFICIENCY PAYMENTS.—
(1) AVAILABILITY.—The Secretary may make loan deficiency
payments available to producers on a farm that, although
eligible to obtain a marketing assistance loan for peanuts under
subsection (a), agree to forgo obtaining the loan for the peanuts
in return for loan deficiency payments under this subsection.
(2) COMPUTATION.—A loan deficiency payment under this
subsection shall be computed by multiplying—
(A) the payment rate determined under paragraph (3)
for peanuts; by
(B) the quantity of the peanuts produced by the pro-
ducers, excluding any quantity for which the producers
obtain a marketing assistance loan under subsection (a).
(3) PAYMENT RATE.—For purposes of this subsection, the
payment rate shall be the amount by which—
(A) the loan rate established under subsection (b);
exceeds
(B) the rate at which a loan may be repaid under
subsection (d).
(4) EFFECTIVE DATE FOR PAYMENT RATE DETERMINATION.—
(A) IN GENERAL.—The Secretary shall determine the
amount of the loan deficiency payment to be made under
this subsection to the producers on a farm with respect
to a quantity of peanuts using the payment rate in effect
under paragraph (3) as of the date the producers request
the payment.
(B) SPECIAL RULE FOR 2002 CROP YEAR.—For the 2002
crop year only, the Secretary shall determine the amount
of the loan deficiency payment to be made under this
subsection to the producers on a farm with respect to
a quantity of peanuts using the payment rate in effect
under paragraph (3) as of the earlier of the following:
(i) The date on which the producers marketed or
otherwise lost beneficial interest in the crop, as deter-
mined by the Secretary.
(ii) The date the producers request the payment.
(f) COMPLIANCE WITH CONSERVATION AND WETLANDS REQUIRE-
MENTS.—As a condition of the receipt of a marketing assistance
loan under subsection (a), the producer shall comply with applicable
conservation requirements under subtitle B of title XII of the Food
Security Act of 1985 (16 U.S.C. 3811 et seq.) and applicable wetland
protection requirements under subtitle C of title XII of that Act
(16 U.S.C. 3821 et seq.) during the term of the loan.
(g) REIMBURSABLE AGREEMENTS AND PAYMENT OF ADMINISTRA-
TIVE EXPENSES.—The Secretary may implement any reimbursable
agreements or provide for the payment of administrative expenses
H. R. 2646—45
under this subtitle only in a manner that is consistent with such
activities in regard to other commodities.
SEC. 1308. MISCELLANEOUS PROVISIONS.
(a) MANDATORY INSPECTION.—All peanuts marketed in the
United States shall be officially inspected and graded by Federal
or Federal-State inspectors.
(b) TERMINATION
OF PEANUT ADMINISTRATIVE COMMITTEE.—
The Peanut Administrative Committee established under Marketing
Agreement No. 146 issued pursuant to the Agricultural Adjustment
Act (7 U.S.C. 601 et seq.), reenacted with amendments by the
Agricultural Marketing Agreement Act of 1937, is terminated.
(c) PEANUT STANDARDS BOARD.—
(1) ESTABLISHMENT
AND
PURPOSE.—The Secretary shall
establish a Peanut Standards Board for the purpose of advising
the Secretary regarding the establishment of quality and han-
dling standards for domestically produced and imported pea-
nuts.
(2) MEMBERSHIP AND APPOINTMENT.—
(A) TOTAL MEMBERS.—The Board shall consist of 18
members, with representation equally divided between pea-
nut producers and peanut industry representatives.
(B) APPOINTMENT PROCESS FOR PRODUCERS.—The Sec-
retary shall appoint—
(i) 3 producers from the Southeast (Alabama,
Georgia, and Florida) peanut producing region;
(ii) 3 producers from the Southwest (Texas, Okla-
homa, and New Mexico) peanut producing region; and
(iii) 3 producers from the Virginia/Carolina (Vir-
ginia and North Carolina) peanut producing region.
(C) APPOINTMENT PROCESS FOR INDUSTRY REPRESENTA-
TIVES.—The Secretary shall appoint 3 peanut industry rep-
resentatives from each of the 3 peanut producing regions
in the United States.
(3) TERMS.—
(A) IN GENERAL.—A member of the Board shall serve
a 3-year term.
(B) INITIAL
APPOINTMENT.—In making the initial
appointments to the Board, the Secretary shall stagger
the terms of the members so that—
(i) 1 producer member and peanut industry
member from each peanut producing region serves a
1-year term;
(ii) 1 producer member and peanut industry
member from each peanut producing region serves a
2-year term; and
(iii) 1 producer member and peanut industry
member from each peanut producing region serves a
3-year term.
(4) CONSULTATION REQUIRED.—The Secretary shall consult
with the Board in advance whenever the Secretary establishes
or changes, or considers the establishment of or a change to,
quality and handling standards for peanuts.
(5) FEDERAL
ADVISORY
COMMITTEE
ACT.—The Federal
Advisory Committee Act (5 U.S.C. App.) shall not apply to
the Board.
H. R. 2646—46
(d) PRIORITY.—The Secretary shall make identifying and com-
bating the presence of all quality concerns related to peanuts a
priority in the development of quality and handling standards for
peanuts and in the inspection of domestically produced and
imported peanuts. The Secretary shall consult with appropriate
Federal and State agencies to provide adequate safeguards against
all quality concerns related to peanuts.
(e) CONSISTENT STANDARDS.—Imported peanuts shall be subject
to the same quality and handling standards as apply to domestically
produced peanuts.
(f) AUTHORIZATION OF APPROPRIATIONS.—
(1) IN GENERAL.—In addition to other funds that are avail-
able to carry out this section, there is authorized to be appro-
priated such sums as are necessary to carry out this section.
(2) TREATMENT OF BOARD EXPENSES.—The expenses of the
Peanut Standards Board shall not be counted toward any gen-
eral limitation on the expenses of advisory committees, panels,
commissions, and task forces of the Department of Agriculture,
whether enacted before, on, or after the date of enactment
of this Act, unless the limitation specifically refers to this
paragraph and specifically includes the Peanut Standards
Board within the general limitation.
(g) TRANSITION RULE.—
(1) TEMPORARY DESIGNATION OF PEANUT ADMINISTRATIVE
COMMITTEE
MEMBERS.—Notwithstanding 
the 
appointment
process specified in subsection (c) for the Peanut Standards
Board, during the transition period, the Secretary may des-
ignate persons serving as members of the Peanut Administra-
tive Committee on the day before the date of enactment of
this Act to serve as members of the Peanut Standards Board
for the purpose of carrying out the duties of the Board described
in this section.
(2) FUNDS.—The Secretary may transfer any funds avail-
able to carry out the activities of the Peanut Administrative
Committee to the Peanut Standards Board to carry out the
duties of the Board described in this section.
(3) TRANSITION PERIOD.—In paragraph (1), the term ‘‘transi-
tion period’’ means the period beginning on the date of enact-
ment of this Act and ending on the earlier of—
(A) the date the Secretary appoints the members of
the Peanut Standards Board pursuant to subsection (c);
or
(B) 180 days after the date of enactment of this Act.
(h) EFFECTIVE DATE.—This section shall take effect with the
2002 crop of peanuts.
SEC. 1309. TERMINATION OF MARKETING QUOTA PROGRAMS FOR PEA-
NUTS AND COMPENSATION TO PEANUT QUOTA HOLDERS
FOR LOSS OF QUOTA ASSET VALUE.
(a) REPEAL OF MARKETING QUOTA.—
(1) REPEAL.—Part VI of subtitle B of title III of the Agricul-
tural Adjustment Act of 1938 (7 U.S.C. 1357–1359a), relating
to peanuts, is repealed.
(2) TREATMENT OF 2001 CROP.—Part VI of subtitle B of
title III of the Agricultural Adjustment Act of 1938 (7 U.S.C.
1357–1359a), as in effect on the day before the date of enact-
ment of this Act, shall continue to apply with respect to the
H. R. 2646—47
2001 crop of peanuts notwithstanding the amendment made
by paragraph (1). Section 1308(g)(2) shall also apply to the
2001 crop of peanuts.
(b) COMPENSATION CONTRACT REQUIRED.—
(1) IN GENERAL.—The Secretary shall offer to enter into
a contract with each person that the Secretary determines
is an eligible peanut quota holder under subsection (f) for
the purpose of providing compensation for the lost value of
the quota on account of the repeal of the marketing quota
program for peanuts under subsection (a).
(2) PAYMENT PERIOD.—The Secretary shall make payments
under the contracts during fiscal years 2002 through 2006.
(c) TIME FOR PAYMENT.—
(1) PAYMENT IN INSTALLMENTS.—The payments required
under the contracts shall be provided in 5 equal installments
not later than September 30 of each of fiscal years 2002 through
2006.
(2) SINGLE PAYMENT.—At the request of an eligible peanut
quota holder entitled to payments under a contract, the Sec-
retary shall provide the entire payment amount determined
under subsection (d) with respect to the eligible peanut quota
holder for the 5 fiscal years in a single lump sum during
the fiscal year specified by the eligible peanut quota holder.
(d) PAYMENT AMOUNT.—The amount of the payment for a fiscal
year to an eligible peanut quota holder under a contract shall
be equal to the product obtained by multiplying—
(1) $0.11 per pound; by
(2) the number of pounds of quota with respect to which
the person qualifies as a peanut quota holder under subsection
(f).
(e) ASSIGNMENT OF PAYMENTS.—The provisions of section 8(g)
of the Soil Conservation and Domestic Allotment Act (16 U.S.C.
590h(g)), relating to assignment of payments, shall apply to the
payments made under the contracts. A person making an assign-
ment of the payment, or the assignee, shall provide the Secretary
with notice, in such manner as the Secretary may require, of
any assignment made under this subsection.
(f) ELIGIBLE PEANUT QUOTA HOLDER.—
(1) IN GENERAL.—Except as otherwise provided in this sub-
section, the Secretary shall consider a person to be an eligible
peanut quota holder for the purposes of this section if the
person, as of the date of enactment of this Act, owned a farm
that, also as of that date, was eligible for a permanent peanut
quota under section 358–1(b) of the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1358–1(b)), irrespective of temporary
leases, transfers of quotas for seed, or quotas for experimental
purposes.
(2) EFFECT OF PURCHASE CONTRACT.—If there was a written
contract for the purchase of all or a portion of a farm described
in paragraph (1) as of the date of enactment of this Act and
the parties to the sale are unable to agree to the disposition
of eligibility for payments under this section, the Secretary,
taking into account any incomplete permanent transfer of quota
that has otherwise been agreed to, shall provide for the equi-
table division of the payments among the parties by adjusting
the determination of who is the eligible peanut quota holder
with respect to particular pounds of the quota.
H. R. 2646—48
(3) EFFECT
OF
AGREEMENT
FOR
PERMANENT
QUOTA
TRANSFER.—If the Secretary determines that there was in exist-
ence, as of the date of enactment of this Act, an agreement
for the permanent transfer of quota, but that the transfer
was not completed by that date, the Secretary shall consider
the peanut quota holder to be the party to the agreement
who, as of that date, was the owner of the farm to which
the quota was to be transferred.
(4) PROTECTED BASES.—A person that owns a farm with
a peanut poundage quota which is protected under a conserva-
tion reserve program contract entered into under section 1231
of the Food Security Act of 1985 (16 U.S.C. 3831) shall be
considered to be an eligible quota holder with respect to the
protected poundage.
(5) SECRETARIAL
DISCRETION.—Notwithstanding the pre-
ceding paragraphs, the Secretary may declare a person to be
the eligible peanut quota holder with respect to certain pounds
of quota or otherwise for purposes of this section if the Secretary
considers the declaration is needed to insure a fair and equi-
table administration of the payments provided for in this sec-
tion, so long as the Secretary does not, in exercising this
authority, effectively increase the total quota in excess of the
quota that was available to all producers for the 2001 crop
year for other than seed or experimental use.
(6) LIMITATION ON QUANTITY OF QUOTA HELD.—A person
shall be considered an eligible peanut quota holder for purposes
of this section only with respect to that number of permanent
pounds that qualifies the person as a peanut quota holder
under one of the preceding paragraphs. The determination of
the peanut poundage amount for which the person qualifies
shall be made based on the 2001 crop quota levels and shall
take into account sales of the farm that occurred before the
date of enactment of this Act and any permanent transfers
of quota that took place before that date, consistent with the
preceding paragraphs. The Secretary shall not take into
account, or allow eligibility for, quotas for seed, granted as
experimental quotas, or obtained by temporary lease or
transfer.
(g) SUCCESSIONS
IN PAYMENT ELIGIBILITY
AND ATTACHMENT
OF ELIGIBILITY TO PERSONS.—
(1) ELIGIBILITY ATTACHES TO PERSONS.—Once a person is
eligible for payments under this section, as determined under
subsection (f), the continued eligibility of the person for the
payments does not run with a farm, but shall remain with
the person for the term of this section irrespective of whether
the person sells, or continues to have an interest in, the farm
that had the quota that qualified the person as an eligible
peanut quota holder under subsection (f) and irrespective of
whether the person has a continuing interest in the production
of peanuts.
(2) SUCCESSION.—If a person eligible for payments under
this section dies, in the case of an individual, or ceases to
exist, in the case of other persons, the payment eligibility
of the person shall pass to the person’s personal or organiza-
tional successor, as determined by the Secretary.
(h) CONFORMING AMENDMENTS.—
H. R. 2646—49
(1) ADMINISTRATIVE PROVISIONS.—Section 361 of the Agri-
cultural Adjustment Act of 1938 (7 U.S.C. 1361) is amended
by striking ‘‘peanuts,’’.
(2) ADJUSTMENT OF QUOTAS.—Section 371 of the Agricul-
tural 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
(B) in subsection (b), by striking ‘‘peanuts,’’.
(4) EMINENT DOMAIN.—Section 378(c) of the Agricultural
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,’’.
SEC. 1310. REPEAL OF SUPERSEDED PRICE SUPPORT AUTHORITY AND
EFFECT OF REPEAL.
(a) REPEAL OF PRICE SUPPORT AUTHORITY.—
(1) IN GENERAL.—Section 155 of the Federal Agriculture
Improvement and Reform Act of 1996 (7 U.S.C. 7271) is
repealed.
(2) CONFORMING
AMENDMENTS.—The Agricultural Act of
1949 (7 U.S.C. 1441 et seq.) is amended—
(A) in section 101(b) (7 U.S.C. 1441(b)), by striking
‘‘and peanuts’’; and
(B) in section 408(c) (7 U.S.C. 1428(c)), by striking
‘‘peanuts,’’.
(3) TECHNICAL
AMENDMENT.—The chapter heading of
chapter 2 of subtitle D of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. prec. 7271) is amended
by striking ‘‘PEANUTS AND’’.
(b) DISPOSAL.—Notwithstanding any other provision of law or
previous declaration made by the Secretary, the Secretary shall
ensure that the disposal of all peanuts for which a loan for the
2001 crop of peanuts was made under section 155 of the Federal
Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7271)
before the date of enactment of this Act is carried out in a manner
that prevents price disruptions in the domestic and international
markets for peanuts.
(c) TREATMENT OF CROP INSURANCE POLICIES FOR 2002 CROP
YEAR.—
(1) APPLICABILITY.—This subsection shall apply for the
2002 crop year only notwithstanding any other provision of
law or crop insurance policy.
(2) PRICE ELECTION.—The nonquota price election for seg-
regation I, II, and III peanuts shall be 17.75 cents per pound
H. R. 2646—50
and shall be used for all aspects of the policy relating to
the calculations of premium, liability, and indemnities.
(3) QUALITY ADJUSTMENT.—For the purposes of quality
adjustment only, the average support price per pound of pea-
nuts shall be a price equal to 17.75 cents per pound. Quality
under the crop insurance policy for peanuts shall be adjusted
under procedures issued by the Federal Crop Insurance Cor-
poration.
Subtitle D—Sugar
SEC. 1401. SUGAR PROGRAM.
(a) EXTENSION AND MODIFICATION OF EXISTING SUGAR PRO-
GRAM.—Section 156 of the Federal Agriculture Improvement and
Reform Act of 1996 (7 U.S.C. 7272) is amended to read as follows:
‘‘SEC. 156. SUGAR PROGRAM.
‘‘(a) SUGARCANE.—The Secretary shall make loans available
to processors of domestically grown sugarcane at a rate equal to
18 cents per pound for raw cane sugar.
‘‘(b) SUGAR BEETS.—The Secretary shall make loans available
to processors of domestically grown sugar beets at a rate equal
to 22.9 cents per pound for refined beet sugar.
‘‘(c) LOAN RATE ADJUSTMENTS.—
‘‘(1) IN GENERAL.—The Secretary may reduce the loan rate
specified in subsection (a) for domestically grown sugarcane
and subsection (b) for domestically grown sugar beets if the
Secretary determines that negotiated reductions in export sub-
sidies and domestic subsidies provided for sugar of other major
sugar growing, producing, and exporting countries in the aggre-
gate exceed the commitments made as part of the Agreement
on Agriculture.
‘‘(2) EXTENT OF REDUCTION.—The Secretary shall not reduce
the loan rate under subsection (a) or (b) below a rate that
provides an equal measure of support to that provided by
other major sugar growing, producing, and exporting countries,
based on an examination of both domestic and export subsidies
subject to reduction in the Agreement on Agriculture.
‘‘(3) ANNOUNCEMENT OF REDUCTION.—The Secretary shall
announce any loan rate reduction to be made under this sub-
section as far in advance as is practicable.
‘‘(4) DEFINITIONS.—In this subsection:
‘‘(A) AGREEMENT ON AGRICULTURE.—The term ‘‘Agree-
ment on Agriculture’’ means the Agreement on Agriculture
referred to in section 101(d)(2) of the Uruguay Round
Agreements Act (19 U.S.C. 3511(d)(2)), or any amendatory
or successor agreement.
‘‘(B) MAJOR SUGAR COUNTRIES.—The term ‘‘major sugar
growing, producing, and exporting countries’’ means—
‘‘(i) the countries of the European Union; and
‘‘(ii) the 10 foreign countries not covered by
subparagraph (A) that the Secretary determines
produce the greatest quantity of sugar.
‘‘(d) TERM OF LOANS.—
H. R. 2646—51
‘‘(1) IN GENERAL.—A loan under this section during any
fiscal year shall be made available not earlier than the begin-
ning of the fiscal year and shall mature at the earlier of—
‘‘(A) the end of the 9-month period beginning on the
first day of the first month after the month in which
the loan is made; or
‘‘(B) the end of the fiscal year in which the loan is
made.
‘‘(2) SUPPLEMENTAL LOANS.—In the case of a loan made
under this section in the last 3 months of a fiscal year, the
processor may repledge the sugar as collateral for a second
loan in the subsequent fiscal year, except that the second
loan shall—
‘‘(A) be made at the loan rate in effect at the time
the second loan is made; and
‘‘(B) mature in 9 months less the quantity of time
that the first loan was in effect.
‘‘(e) LOAN TYPE; PROCESSOR ASSURANCES.—
‘‘(1) NONRECOURSE LOANS.—The Secretary shall carry out
this section through the use of nonrecourse loans.
‘‘(2) PROCESSOR ASSURANCES.—
‘‘(A) IN
GENERAL.—The Secretary shall obtain from
each processor that receives a loan under this section such
assurances as the Secretary considers adequate to ensure
that the processor will provide payments to producers that
are proportional to the value of the loan received by the
processor for the sugar beets and sugarcane delivered by
producers to the processor.
‘‘(B) MINIMUM PAYMENTS.—
‘‘(i) IN GENERAL.—Subject to clause (ii), the Sec-
retary may establish appropriate minimum payments
for purposes of this paragraph.
‘‘(ii) LIMITATION.—In the case of sugar beets, the
minimum payment established under clause (i) shall
not exceed the rate of payment provided for under
the applicable contract between a sugar beet producer
and a sugar beet processor.
‘‘(iii) EFFECT OF DISASTER.—The Secretary may not
bar a beet sugar processor from eligibility to obtain
a loan under this section because of the failure of
the processor to provide the appropriate minimum pay-
ment established under this subsection if the failure—
‘‘(I) occurred during a crop year prior to the
date of enactment of the Farm Security and Rural
Investment Act of 2002; and
‘‘(II) was related, at least in part, to the effects
of a natural disaster, including damage from
freeze.
‘‘(3) ADMINISTRATION.—The Secretary may not impose or
enforce any prenotification requirement, or similar administra-
tive requirement not otherwise in effect on the date of enact-
ment of the Farm Security and Rural Investment Act of 2002,
that has the effect of preventing a processor from electing
to forfeit the loan collateral (of an acceptable grade and quality)
on the maturity of the loan.
‘‘(f) LOANS FOR IN-PROCESS SUGAR.—
H. R. 2646—52
‘‘(1) DEFINITION OF IN-PROCESS SUGARS AND SYRUPS.—In
this subsection, the term ‘in-process sugars 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 Secretary 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 as collateral for a
loan under paragraph (2), the processor shall, within such
reasonable time period 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 processed into raw cane sugar
or refined beet sugar, the processor shall transfer the sugar
to the Commodity Credit Corporation.
‘‘(C) PAYMENT
TO
PROCESSOR.—On transfer of the
sugar, the Secretary shall make a payment 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 appropriate; and
‘‘(II) the loan rate the processor received under
paragraph (3); by
‘‘(ii) the quantity of sugar transferred to the Sec-
retary.
‘‘(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 syrups, the processor may obtain a loan under
subsection (a) or (b) for the raw cane sugar or refined beet
sugar, as appropriate.
‘‘(6) TERM OF LOAN.—The term of a loan made under this
subsection for a quantity of in-process sugars and syrups, when
combined with the term of a loan made with respect to the
raw cane sugar or refined beet sugar derived from the in-
process sugars and syrups, may not exceed 9 months, consistent
with subsection (d).
‘‘(g) AVOIDING FORFEITURES; CORPORATION INVENTORY DISPOSI-
TION.—
‘‘(1) IN GENERAL.—Subject to subsection (e)(3), to the max-
imum extent practicable, the Secretary shall operate the pro-
gram established under this section at no cost to the Federal
Government by avoiding the forfeiture of sugar to the Com-
modity Credit Corporation.
H. R. 2646—53
‘‘(2) INVENTORY DISPOSITION.—
‘‘(A) IN
GENERAL.—To carry out paragraph (1), the
Commodity Credit Corporation may accept bids to obtain
raw cane sugar or refined beet sugar in the inventory
of the Commodity Credit Corporation from (or otherwise
make available such commodities, on appropriate terms
and conditions, to) processors of sugarcane and processors
of sugar beets (acting in conjunction with the producers
of the sugarcane 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 authority provided
under this paragraph is in addition to any authority of
the Commodity Credit Corporation under any other law.
‘‘(h) INFORMATION REPORTING.—
‘‘(1) DUTY OF PROCESSORS AND REFINERS TO REPORT.—A
sugarcane processor, cane sugar refiner, and sugar beet proc-
essor shall furnish the Secretary, on a monthly basis, such
information as the Secretary may require to administer sugar
programs, including the quantity of purchases of sugarcane,
sugar beets, and sugar, and production, importation, distribu-
tion, and stock levels of sugar.
‘‘(2) 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) in which there are in excess of 250 producers of
sugarcane to report, in the manner prescribed by the Sec-
retary, 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
subparagraph (A) 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
Secretary, the quantities of the products imported by the
importer and the sugar content or equivalent of the prod-
ucts.
‘‘(B) TARIFF-RATE QUOTAS.—Subparagraph (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.
‘‘(4) PENALTY.—Any person willfully failing or refusing to
furnish the information, or furnishing willfully any false
information, shall be subject to a civil penalty of not more
than $10,000 for each such violation.
‘‘(5) MONTHLY
REPORTS.—Taking into consideration the
information received under this subsection, the Secretary shall
publish on a monthly basis composite data on production,
imports, distribution, and stock levels of sugar.
H. R. 2646—54
‘‘(i) SUBSTITUTION OF REFINED SUGAR.—For purposes of Addi-
tional U.S. Note 6 to chapter 17 of the Harmonized Tariff Schedule
of the United States and the reexport programs and polyhydric
alcohol program administered by the Secretary, all refined sugars
(whether derived from sugar beets or sugarcane) produced by cane
sugar refineries and beet sugar processors shall be fully substitut-
able for the export of sugar and sugar-containing products under
those programs.
‘‘(j) EFFECTIVE PERIOD.—This section shall be effective only
for the 1996 through 2007 crops of sugar beets and sugarcane.’’.
(b) EFFECTIVE DATE OF ASSESSMENT TERMINATION.—Subsection
(f) of section 156 of the Federal Agriculture Improvement and
Reform Act of 1996 (7 U.S.C. 7272(f)), as in effect immediately
before the enactment of the Farm Security and Rural Investment
Act of 2002, is deemed to have been repealed effective as of October
1, 2001.
(c) INTEREST RATE.—Section 163 of the Federal Agriculture
Improvement and Reform Act of 1996 (7 U.S.C. 7283) is amended—
(1) by inserting ‘‘(a) IN GENERAL.—’’ before ‘‘Notwith-
standing’’; 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 agricultural commodity.’’.
SEC. 1402. STORAGE FACILITY LOANS.
(a) IN GENERAL.—Notwithstanding any other provision of law
and as soon as practicable after the date of enactment of this
Act, the Commodity Credit Corporation shall amend part 1436
of title 7, Code of Federal Regulations, to establish a sugar storage
facility loan program to provide financing for processors of domesti-
cally-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 described
in subsection (a) shall be made available to any processor of domesti-
cally 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 allotments; and
(3) demonstrates an ability to repay the loan.
(c) TERM OF LOANS.—A storage facility loan described in sub-
section (a) 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. 1403. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR.
Part VII of subtitle B of title III of the Agricultural Adjustment
Act of 1938 (7 U.S.C. 359aa et seq.) is amended to read as follows:
H. R. 2646—55
‘‘PART VII—FLEXIBLE MARKETING
ALLOTMENTS FOR SUGAR
‘‘SEC. 359a. DEFINITIONS.
‘‘In this part:
‘‘(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.
‘‘SEC. 359b. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR.
‘‘(a) SUGAR ESTIMATES.—
‘‘(1) IN GENERAL.—Not later than August 1 before the begin-
ning of each of the 2002 through 2007 crop years, the Secretary
shall estimate—
‘‘(A) the quantity of sugar that will be consumed in
the United States during the crop year;
‘‘(B) the quantity of sugar that would provide for
reasonable carryover stocks;
‘‘(C) the quantity of sugar that will be available from
carry-in stocks for consumption in the United States during
the crop year;
‘‘(D) the quantity of sugar that will be available from
the domestic processing of sugarcane and sugar beets; and
‘‘(E) the quantity of sugars, syrups, and molasses that
will be imported for human consumption or to be used
for the extraction of sugar for human consumption in the
United States during the crop year, whether such articles
are under a tariff-rate quota or are in excess or outside
of a tariff-rate quota.
‘‘(2) EXCLUSION.—The estimates under this subsection shall
not apply to sugar imported for the production of polyhydric
alcohol or to any sugar refined and reexported in refined form
or in products containing sugar.
‘‘(3) REESTIMATES.—The Secretary shall make reestimates
of sugar consumption, stocks, production, and imports for a
crop year as necessary, but no later than the beginning of
each of the second through fourth quarters of the crop year.
‘‘(b) SUGAR ALLOTMENTS.—
‘‘(1) IN
GENERAL.—By the beginning of each crop year,
the Secretary shall establish for that crop 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
Corporation under the loan program for sugar established under
section 156 of the Federal Agriculture Improvement and Reform
Act of 1996 (7 U.S.C. 7272).
H. R. 2646—56
‘‘(2) PRODUCTS.—The Secretary may include sugar products,
whose majority content is sucrose for human consumption,
derived from sugarcane, sugar beets, molasses, or sugar in
the allotments under paragraph (1) if the Secretary determines
it to be appropriate for purposes of this part.
‘‘(c) PROHIBITIONS.—
‘‘(1) IN GENERAL.—During any crop year or portion thereof
for which marketing allotments have been established, no proc-
essor of sugar beets or sugarcane shall market a quantity
of sugar in excess of the allocation established for such proc-
essor, except to enable another processor to fulfill an allocation
established for such other processor or to facilitate the expor-
tation of such sugar.
‘‘(2) CIVIL PENALTY.—Any processor who knowingly violates
paragraph (1) shall be liable to the Commodity Credit Corpora-
tion for a civil penalty in an amount equal to 3 times the
United States market value, at the time of the commission
of the violation, of that quantity of sugar involved in the viola-
tion.
‘‘(3) DEFINITION OF MARKET.—For purposes of this part,
the term ‘market’ shall mean to sell or otherwise dispose of
in commerce in the United States (including the forfeiture
of sugar under the loan program for sugar under section 156
of the Federal Agriculture Improvement and Reform Act of
1996 (7 U.S.C. 7272) and, with respect to any integrated proc-
essor and refiner, the movement of raw cane sugar into the
refining process).
‘‘SEC. 359c. ESTABLISHMENT OF FLEXIBLE MARKETING ALLOTMENTS.
‘‘(a) IN GENERAL.—The Secretary shall establish flexible mar-
keting allotments for sugar for any crop year in which the allot-
ments are required under section 359b(b) in accordance with this
section.
‘‘(b) OVERALL ALLOTMENT QUANTITY.—
‘‘(1) IN GENERAL.—The Secretary shall establish the overall
quantity of sugar to be allotted for the crop year (in this
part referred to as the ‘overall allotment quantity’) by deducting
from the sum of the estimated sugar consumption and reason-
able carryover stocks (at the end of the crop year) for the
crop year, as determined under section 359b(a)—
‘‘(A) 1,532,000 short tons, raw value; and
‘‘(B) carry-in stocks of sugar, including sugar in Com-
modity Credit Corporation inventory.
‘‘(2) ADJUSTMENT.—The Secretary shall adjust the overall
allotment quantity to avoid the forfeiture of sugar to the Com-
modity Credit Corporation.
‘‘(c) MARKETING ALLOTMENT FOR SUGAR DERIVED FROM SUGAR
BEETS AND SUGAR DERIVED FROM SUGARCANE.—The overall allot-
ment quantity for the crop year shall be allotted between—
‘‘(1) sugar derived from sugar beets by establishing a mar-
keting allotment for a crop year at a quantity equal to the
product of multiplying the overall allotment quantity for the
crop year by 54.35 percent; and
‘‘(2) sugar derived from sugarcane by establishing a mar-
keting allotment for a crop year at a quantity equal to the
product of multiplying the overall allotment quantity for the
crop year by 45.65 percent.
H. R. 2646—57
‘‘(d) FILLING CANE SUGAR AND BEET SUGAR ALLOTMENTS.—
‘‘(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.
‘‘(e) STATE CANE SUGAR ALLOTMENTS.—
‘‘(1) IN GENERAL.—The allotment for sugar derived from
sugarcane shall be further allotted, among the States in the
United 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 pre-
scribe, in a fair and equitable manner as provided in this
subsection and section 359d(b)(1)(D).
‘‘(2) OFFSHORE ALLOTMENT.—
‘‘(A) COLLECTIVELY.—Prior to the allotment 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 allot-
ment 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 production of raw cane sugar
from the 1996 through 2000 crops;
‘‘(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 provided for under
paragraph (2), shall be allotted among the mainland States
in the United 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—
‘‘(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 cov-
ered under the allotments for the crop year; and
‘‘(C) past processings of sugar from sugarcane, based
on the 3 crop years with the greatest processings (in the
mainland States collectively) during the 1991 through 2000
crop years.
‘‘(f) FILLING CANE SUGAR ALLOTMENTS.—Except as provided
in section 359e, a State cane sugar allotment established under
subsection (e) for a crop year may be filled only with sugar processed
from sugarcane grown in the State covered by the allotment.
‘‘(g) ADJUSTMENT OF MARKETING ALLOTMENTS.—
H. R. 2646—58
‘‘(1) 
IN
GENERAL.—The 
Secretary 
shall, 
based 
on
reestimates under section 359b(a)(3), adjust upward or down-
ward marketing allotments in a fair and equitable manner,
as the Secretary determines appropriate, to reflect changes
in estimated sugar consumption, stocks, production, or imports.
‘‘(2) ALLOCATION
TO
PROCESSORS.—In the case of any
increase or decrease in an allotment, each allocation to a proc-
essor of the allotment under section 359d, and each propor-
tionate share established with respect to the allotment under
section 359f(c), shall be increased or decreased by the same
percentage that the allotment is increased or decreased.
‘‘(3) CARRY-OVER OF REDUCTIONS.—Whenever a marketing
allotment for a crop year is required to be reduced during
the crop year under this subsection, if, at the time of the
reduction, the quantity of sugar marketed exceeds the proc-
essor’s reduced allocation, the allocation of an allotment next
established for the processor shall be reduced by the quantity
of the excess sugar marketed.
‘‘(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 extraction 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 equivalent) (excluding any imports attributable to reassign-
ment under paragraph (1)(D) or (2)(C) of section 359e(b)), 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, eliminated, or reduced to or below the level of
1,532,000 short tons (raw value equivalent).
‘‘SEC. 359d. ALLOCATION OF MARKETING ALLOTMENTS.
‘‘(a) ALLOCATION TO PROCESSORS.—Whenever marketing allot-
ments are established for a crop year under section 359c, in order
to afford all interested persons an equitable opportunity to market
sugar under an allotment, the Secretary shall allocate each such
allotment among the processors covered by the allotment.
‘‘(b) HEARING AND NOTICE.—
‘‘(1) CANE SUGAR.—
‘‘(A) IN GENERAL.—The Secretary shall make alloca-
tions for cane sugar after a hearing, if requested by the
affected sugarcane processors and growers, and on such
notice as the Secretary by regulation may prescribe, in
such manner and in such quantities as to provide a fair,
efficient, and equitable distribution of the allocations under
this paragraph. Each such allocation shall be subject to
adjustment under section 359c(g).
‘‘(B) MULTIPLE PROCESSOR STATES.—Except as provided
in subparagraphs (C) and (D), 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 years of production of raw cane sugar
from among the 1996 through 2000 crops;
H. R. 2646—60
accommodate an allocation under clause (i) to a
new processor located in a new entrant mainland
State, the Secretary shall provide the new entrant
mainland State with an allotment.
‘‘(II) EFFECT
ON
OTHER
ALLOTMENTS.—The
allotment to any new entrant mainland State shall
be subtracted, on a pro rata basis, from the allot-
ments otherwise allotted to each mainland State
under section 359c(e)(3).
‘‘(v) ADVERSE EFFECTS.—Before providing an initial
processor allocation or State allotment to a new entrant
processor or a new entrant State under this subpara-
graph, the Secretary shall take into consideration any
adverse effects that the provision of the allocation or
allotment may have on existing cane processors and
producers in mainland States.
‘‘(vi) ABILITY TO MARKET.—Consistent with section
359c and this section, any processor allocation or State
allotment made to a new entrant processor or to a
new entrant State under this subparagraph shall be
provided only after the applicant processor, or the
applicable processors in the State, have demonstrated
the ability to process, produce, and market (including
the transfer or delivery of the raw cane sugar to a
refinery for further processing or marketing) raw cane
sugar for the crop year for which the allotment is
applicable.
‘‘(vii) PROHIBITION.—Not more than 1 processor
allocation provided under this subparagraph may be
applicable to any individual sugar processing facility.
‘‘(F) TRANSFER OF OWNERSHIP.—Except as otherwise
provided in section 359f(c)(8), if a sugarcane processor is
sold or otherwise transferred to another owner or is closed
as part of an affiliated corporate group processing consoli-
dation, the Secretary shall transfer the allotment allocation
for the processor to the purchaser, new owner, successor
in interest, or any remaining processor of an affiliated
entity, as applicable, of the processor.
‘‘(2) BEET SUGAR.—
‘‘(A) IN
GENERAL.—Except as otherwise provided in
this paragraph 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 determined under
this paragraph.
‘‘(B) QUANTITY.—The quantity of an allocation made
for a beet sugar processor for a crop year under subpara-
graph (A) 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 processor (as determined under sub-
paragraphs (C) and (D)) bears to the total of the adjusted
weighted average quantities of beet sugar produced by
all processors (as so determined).
H. R. 2646—61
‘‘(C) 
WEIGHTED
AVERAGE
QUANTITY.—Subject 
to
subparagraph (D), the weighted quantity of beet sugar
produced by a beet sugar processor during each of the
1998 through 2000 crop years shall be (as determined
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 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
(including any quantity of sugar received from the
Commodity Credit Corporation) during the crop year.
‘‘(D) ADJUSTMENTS.—
‘‘(i) IN GENERAL.—The Secretary shall adjust the
weighted average quantity of beet sugar produced by
a beet sugar processor during the 1998 through 2000
crop years under subparagraph (C) if the Secretary
determines that the processor—
‘‘(I) during the 1996 through 2000 crop years,
opened a sugar beet processing factory;
‘‘(II) during the 1998 through 2000 crop years,
closed a sugar beet processing factory;
‘‘(III) during the 1998 through 2000 crop years,
constructed a molasses desugarization facility; or
‘‘(IV) during the 1998 through 2000 crop years,
suffered substantial quality losses on sugar beets
stored during any such crop year.
‘‘(ii) QUANTITY.—The quantity of beet sugar pro-
duced by a beet sugar processor under subparagraph
(C) shall be—
‘‘(I) in the case of a processor that opened
a sugar beet processing factory, increased by 1.25
percent of the total of the adjusted weighted aver-
age quantities of beet sugar produced by all proc-
essors during the 1998 through 2000 crop years
(without consideration of any adjustment under
this subparagraph) for each sugar beet processing
factory that is opened by the processor;
‘‘(II) in the case of a processor that closed
a sugar beet processing factory, decreased by 1.25
percent of the total of the adjusted weighted aver-
age quantities of beet sugar produced by all proc-
essors during the 1998 through 2000 crop years
(without consideration of any adjustment under
this subparagraph) for each sugar beet processing
factory that is closed by the processor;
‘‘(III) in the case of a processor that con-
structed 
a 
molasses 
desugarization 
facility,
increased by 0.25 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
adjustment under this subparagraph) for each
H. R. 2646—62
molasses desugarization facility that is constructed
by the processor; and
‘‘(IV) in the case of a processor 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
adjustment under this subparagraph).
‘‘(E) PERMANENT
TERMINATION
OF
OPERATIONS
OF
A
PROCESSOR.—If a processor of beet sugar has been dis-
solved, 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 assets of the processor), the Secretary shall—
‘‘(i) eliminate the allocation of the processor pro-
vided under this section; and
‘‘(ii) distribute the allocation to other beet sugar
processors on a pro rata basis.
‘‘(F) SALE OF ALL ASSETS OF A PROCESSOR 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 unless the allocation has been
distributed to other sugar beet processors under subpara-
graph (E).
‘‘(G) SALE OF FACTORIES OF A PROCESSOR TO ANOTHER
PROCESSOR.—
‘‘(i) IN
GENERAL.—Subject to subparagraphs (E)
and (F), if 1 or more factories 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 crop
year, the Secretary shall assign a pro rata portion
of the allocation of the seller to the allocation of the
buyer to reflect the historical contribution of the
production of the sold factory or factories to the total
allocation of the seller.
‘‘(ii) APPLICATION
OF
ALLOCATION.—The assign-
ment of the allocation under clause (i) shall apply—
‘‘(I) during the remainder of the crop year
during which the sale described in clause (i) occurs
(referred to in this subparagraph as the ‘initial
crop year’); and
‘‘(II) each subsequent crop year (referred in
this subparagraph as a ‘subsequent crop year’),
subject to clause (iii).
‘‘(iii) SUBSEQUENT CROP YEARS.—
‘‘(I) IN
GENERAL.—The assignment of the
allocation under clause (i) shall apply during each
subsequent crop year unless the acquired factory
or factories continue in operation for less than
the initial crop year and the first subsequent crop
year.
‘‘(II) REASSIGNMENT.—If the acquired factory
or factories do not continue in operation for the
complete initial crop year and the first subsequent
H. R. 2646—63
crop year, the Secretary shall reassign the tem-
porary allocation to other processors of beet sugar
on a pro rata basis.
‘‘(iv) USE OF OTHER FACTORIES TO FILL ALLOCA-
TION.—If the transferred allocation to the buyer for
the purchased factory or factories cannot be filled by
the production of the purchased factory or factories
for the initial crop year or a subsequent crop year,
the remainder of the transferred allocation may be
filled by beet sugar produced by the buyer from other
factories of the buyer.
‘‘(H) 
NEW
ENTRANTS
STARTING
PRODUCTION
OR
REOPENING FACTORIES.—
‘‘(i) IN
GENERAL.—Except as provided by clause
(ii), if an individual or entity that does not have an
allocation of beet sugar under this part (referred to
in this paragraph as a ‘new entrant’) starts processing
sugar beets after the date of enactment of this subpara-
graph, or acquires and reopens a factory that produced
beet sugar during previous crop years that (at the
time of acquisition) has no allocation associated with
the factory under this part, the Secretary 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 pro rata basis to reflect
the new allocation.
‘‘(ii) EXCEPTION.—If a new entrant acquires and
reopens a factory that previously produced beet sugar
from sugar beets and from sugar beet molasses but
the factory last processed sugar beets during the 1997
crop year and the new entrant starts to process sugar
beets at such factory after the date of enactment of
this clause, the Secretary shall—
‘‘(I) assign an allocation for beet sugar to the
new entrant that is not less than the greater of
1.67 percent of the total of the adjusted weighted
average quantities of beet sugar produced by all
processors during the 1998 through 2000 crop
years as determined under subsection (b)(2)(C),
or 1,500,000 hundredweights; and
‘‘(II) reduce the allocations for beet sugar of
all other processors on a pro rata basis to reflect
the new allocation.
‘‘(I) NEW
ENTRANTS
ACQUIRING
ONGOING
FACTORIES
WITH PRODUCTION HISTORY.—If a new entrant acquires a
factory that has production history during the period 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 allocation of the seller to
the new entrant to reflect the historical contribution of
the production of the sold factory to the total allocation
of the seller.
H. R. 2646—64
‘‘SEC. 359e. REASSIGNMENT OF DEFICITS.
‘‘(a) ESTIMATES OF DEFICITS.—At any time allotments are in
effect under this part, the Secretary, from time to time, shall
determine whether (in view of then-current inventories of sugar,
the estimated production of sugar and expected marketings, and
other pertinent factors) any processor of sugarcane will be unable
to market the sugar covered by the portion of the State cane
sugar allotment allocated to the processor and whether any proc-
essor of sugar beets will be unable to market sugar covered by
the portion of the beet sugar allotment allocated to the processor.
‘‘(b) REASSIGNMENT OF DEFICITS.—
‘‘(1) CANE SUGAR.—If the Secretary determines that any
sugarcane processor who has been allocated a share of a State
cane sugar allotment will be unable to market the processor’s
allocation of the State’s allotment for the crop year—
‘‘(A) the Secretary first shall reassign the estimated
quantity of the deficit to the allocations for other processors
within that State, depending on the capacity of each other
processor to fill the portion of the deficit to be assigned
to it and taking into account the interests of producers
served by the processors;
‘‘(B) if after the reassignments the deficit cannot be
completely eliminated, the Secretary shall reassign the esti-
mated quantity of the deficit proportionately to the allot-
ments for other cane sugar States, depending on the
capacity of each other State to fill the portion of the deficit
to be assigned to it, with the reassigned quantity to each
State to be allocated among processors in that State in
proportion to the allocations of the processors;
‘‘(C) if after the reassignments the deficit cannot be
completely eliminated, the Secretary shall reassign the esti-
mated quantity of the deficit to the Commodity Credit
Corporation and shall sell such quantity of sugar from
inventories of the Corporation unless the Secretary deter-
mines that such sales would have a significant effect on
the price of sugar; and
‘‘(D) if after the reassignments and sales, the deficit
cannot be completely eliminated, the Secretary shall
reassign the remainder to imports.
‘‘(2) BEET SUGAR.—If the Secretary determines that a sugar
beet processor who has been allocated a share of the beet
sugar allotment will be unable to market that allocation—
‘‘(A) the Secretary first shall reassign the estimated
quantity of the deficit to the allotments for other sugar
beet processors, depending on the capacity of each other
processor to fill the portion of the deficit to be assigned
to it and taking into account the interests of producers
served by the processors;
‘‘(B) if after the reassignments the deficit cannot be
completely eliminated, the Secretary shall reassign the esti-
mated quantity of the deficit to the Commodity Credit
Corporation and shall sell such quantity of sugar from
inventories of the Corporation unless the Secretary deter-
mines that such sales would have a significant effect on
the price of sugar; and
H. R. 2646—65
‘‘(C) if after the reassignments and sales, the deficit
cannot be completely eliminated, the Secretary shall
reassign the remainder to imports.
‘‘(3) CORRESPONDING
INCREASE.—The allocation of each
processor receiving a reassigned quantity of an allotment under
this subsection for a crop year shall be increased to reflect
the reassignment.
‘‘SEC. 359f. PROVISIONS APPLICABLE TO PRODUCERS.
‘‘(a) PROCESSOR ASSURANCES.—
‘‘(1) IN GENERAL.—If allotments for a crop year are allocated
to processors under section 359d, the Secretary shall obtain
from the processors such assurances as the Secretary considers
adequate that the allocation will be shared among producers
served by the processor in a fair and equitable manner that
adequately reflects producers’ production histories.
‘‘(2) ARBITRATION.—
‘‘(A) IN GENERAL.—Any dispute between a processor
and a producer, or group of producers, with respect to
the sharing of the allocation to the processor shall be
resolved through arbitration by the Secretary on the
request of either party.
‘‘(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.
‘‘(b) SUGAR BEET PROCESSING FACILITY CLOSURES.—
‘‘(1) IN
GENERAL.—If a sugar beet processing facility is
closed and the sugar beet growers that previously 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 COMPANY.—The
increased allocation shall be deducted from the allocation to
the company that owned the processing facility that has been
closed and the remaining allocation shall be unaffected.
‘‘(4) 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.
‘‘(c) PROPORTIONATE SHARES OF CERTAIN ALLOTMENTS.—
‘‘(1) IN GENERAL.—
‘‘(A) STATES AFFECTED.—In any case in which a State
allotment is established under section 359c(f) and there
are in excess of 250 sugarcane producers in the State
(other than Puerto Rico), the Secretary shall make a deter-
mination under subparagraph (B).
‘‘(B) DETERMINATION.—The Secretary shall determine,
for each State allotment described in subparagraph (A),
whether the production of sugarcane, in the absence of
H. R. 2646—66
proportionate shares, will be greater than the quantity
needed to enable processors to fill the allotment and provide
a normal carryover inventory of sugar.
‘‘(2) ESTABLISHMENT
OF
PROPORTIONATE
SHARES.—If the
Secretary determines under paragraph (1) that the quantity
of sugarcane produced by producers in the area covered by
a State allotment for a crop year will be in excess of the
quantity needed to enable processors to fill the allotment for
the crop year and provide a normal carryover inventory of
sugar, the Secretary shall establish a proportionate share for
each sugarcane-producing farm that limits the acreage of sugar-
cane that may be harvested on the farm for sugar or seed
during the crop year the allotment is in effect as provided
in this subsection. Each such proportionate share shall be sub-
ject to adjustment under paragraph (7) and section 359c(g).
‘‘(3) METHOD
OF
DETERMINING.—For purposes of deter-
mining proportionate shares for any crop of sugarcane:
‘‘(A) The Secretary shall establish the State’s per-acre
yield goal for a crop of sugarcane at a level (not less
than the average per-acre yield in the State for the 2
highest years from among the 1999, 2000, and 2001 crop
years, as determined by the Secretary) that will ensure
an adequate net return per pound to producers in the
State, taking into consideration any available production
research data that the Secretary considers relevant.
‘‘(B) The Secretary shall adjust the per-acre yield goal
by the average recovery rate of sugar produced from sugar-
cane by processors in the State.
‘‘(C) The Secretary shall convert the State allotment
for the crop year involved into a State acreage allotment
for the crop by dividing the State allotment by the per-
acre yield goal for the State, as established under subpara-
graph (A) and as further adjusted under subparagraph
(B).
‘‘(D) The Secretary shall establish a uniform reduction
percentage for the crop by dividing the State acreage allot-
ment, as determined for the crop under subparagraph (C),
by the sum of all adjusted acreage bases in the State,
as determined by the Secretary.
‘‘(E) The uniform reduction percentage for the crop,
as determined under subparagraph (D), shall be applied
to the acreage base for each sugarcane-producing farm
in the State to determine the farm’s proportionate share
of sugarcane acreage that may be harvested for sugar
or seed.
‘‘(4) ACREAGE BASE.—For purposes of this subsection, the
acreage base for each sugarcane-producing farm shall be deter-
mined by the Secretary, as follows:
‘‘(A) The acreage base for any farm shall be the number
of acres that is equal to the average of the acreage planted
and considered planted for harvest for sugar or seed on
the farm in the 2 highest of the 1999, 2000, and 2001
crop years.
‘‘(B) Acreage planted to sugarcane that producers on
a farm were unable to harvest to sugarcane for sugar
or seed because of drought, flood, other natural disaster,
or other condition beyond the control of the producers may
H. R. 2646—67
be considered as harvested for the production of sugar
or seed for purposes of this paragraph.
‘‘(5) VIOLATION.—
‘‘(A) IN GENERAL.—Whenever proportionate shares are
in effect in a State for a crop of sugarcane, producers
on a farm shall not knowingly harvest, or allow to be
harvested, for sugar or seed an acreage of sugarcane in
excess of the farm’s proportionate share for the crop year,
or otherwise violate proportionate share regulations issued
by the Secretary under section 359h(a).
‘‘(B) DETERMINATION OF VIOLATION.—No producer shall
be considered to have violated subparagraph (A) unless
the processor of the sugarcane harvested by such producer
from acreage in excess of the proportionate share of the
farm markets an amount of sugar that exceeds the alloca-
tion of such processor for a crop year.
‘‘(C) CIVIL
PENALTY.—Any producer on a farm who
violates subparagraph (A) by knowingly harvesting, or
allowing to be harvested, an acreage of sugarcane in excess
of the farm’s proportionate share shall be liable to the
Commodity Credit Corporation for a civil penalty equal
to one and one-half times the United States market value
of the quantity of sugar that is marketed by the processor
of such sugarcane in excess of the allocation of such proc-
essor for the crop year. The Secretary shall prorate pen-
alties imposed under this subparagraph in a fair and equi-
table manner among all the producers of sugarcane har-
vested from excess acreage that is acquired by such proc-
essor.
‘‘(6) WAIVER.—Notwithstanding the preceding subpara-
graph, the Secretary may authorize the county and State
committees established under section 8(b) of the Soil Conserva-
tion and Domestic Allotment Act (16 U.S.C. 590h(b)) to waive
or modify deadlines and other proportionate share requirements
in cases in which lateness or failure to meet the other require-
ments does not affect adversely the operation of proportionate
shares.
‘‘(7) ADJUSTMENTS.—Whenever the Secretary determines
that, because of a natural disaster or other condition beyond
the control of producers that adversely affects a crop of sugar-
cane subject to proportionate shares, the amount of sugarcane
produced by producers subject to the proportionate shares will
not be sufficient to enable processors in the State to meet
the State’s cane sugar allotment and provide a normal carryover
inventory of sugar, the Secretary may uniformly allow pro-
ducers to harvest an amount of sugarcane in excess of their
proportionate share, or suspend proportionate shares entirely,
as necessary to enable processors to meet the State allotment
and provide a normal carryover inventory of sugar.
‘‘(8) PROCESSING FACILITY CLOSURES.—
‘‘(A) IN GENERAL.—If a sugarcane processing facility
subject to this subsection is closed and the sugarcane
growers that delivered sugarcane to the facility prior to
closure elect to deliver their sugarcane to another proc-
essing company, the growers may petition the Secretary
to modify allocations under this part to allow the delivery.
H. R. 2646—68
‘‘(B) INCREASED
ALLOCATION
FOR
PROCESSING
COM-
PANY.—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 com-
pany, to a level that does not exceed the processing capacity
of the processing company, to accommodate the change
in deliveries.
‘‘(C) DECREASED ALLOCATION FOR CLOSED COMPANY.—
The increased allocation shall be deducted from the alloca-
tion 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.
‘‘SEC. 359g. SPECIAL RULES.
‘‘(a) TRANSFER OF ACREAGE BASE HISTORY.—For the purpose
of establishing proportionate shares for sugarcane farms under
section 359f(c), the Secretary, on application of any producer, with
the written consent of all owners of a farm, may transfer the
acreage base history of the farm to any other parcels of land
of the applicant.
‘‘(b) PRESERVATION OF ACREAGE BASE HISTORY.—If for reasons
beyond the control of a producer on a farm, the producer is unable
to harvest an acreage of sugarcane for sugar or seed with respect
to all or a portion of the proportionate share established for the
farm under section 359f(c), the Secretary, on the application of
the producer and with the written consent of all owners of the
farm, may preserve for a period of not more than 5 consecutive
years the acreage base history of the farm to the extent of the
proportionate share involved. The Secretary may permit the propor-
tionate share to be redistributed to other farms, but no acreage
base history for purposes of establishing acreage bases shall accrue
to the other farms by virtue of the redistribution of the propor-
tionate share.
‘‘(c) REVISIONS OF ALLOCATIONS AND PROPORTIONATE SHARES.—
The Secretary, after such notice as the Secretary by regulation
may prescribe, may revise or amend any allocation of a marketing
allotment under section 359d, or any proportionate share estab-
lished or adjusted for a farm under section 359f(c), on the same
basis as the initial allocation or proportionate share was required
to be established.
‘‘(d) TRANSFERS OF MILL ALLOCATIONS.—
‘‘(1) TRANSFER AUTHORIZED.—A producer in a proportionate
share State, upon written consent from all crop-share owners
(or the representative of the crop-share owners) of a farm,
and from the processing company holding the applicable alloca-
tion for such shares, may deliver sugarcane to another proc-
essing company if the additional delivery, when combined with
such other processing company’s existing deliveries, does not
exceed the processing capacity of the company.
‘‘(2) ALLOCATION
ADJUSTMENT.—Notwithstanding section
359d, the Secretary shall adjust the allocations of each of such
processing companies affected by a transfer under paragraph
(1) to reflect the change in deliveries, based on the product
of—
H. R. 2646—69
‘‘(A) the number of acres of proportionate shares being
transferred; and
‘‘(B) the State’s per acre yield goal established under
section 359f(c)(3).
‘‘SEC. 359h. REGULATIONS; VIOLATIONS; PUBLICATION OF SEC-
RETARY’S DETERMINATIONS; JURISDICTION OF THE
COURTS; UNITED STATES ATTORNEYS.
‘‘(a) REGULATIONS.—The Secretary or the Commodity Credit
Corporation, as appropriate, shall issue such regulations as may
be necessary to carry out the authority vested in the Secretary
in administering this part.
‘‘(b) VIOLATION.—Any person knowingly violating any regulation
of the Secretary issued under subsection (a) shall be subject to
a civil penalty of not more than $5,000 for each violation.
‘‘(c) PUBLICATION IN FEDERAL REGISTER.—Each determination
issued by the Secretary to establish, adjust, or suspend allotments
under this part shall be promptly published in the Federal Register
and shall be accompanied by a statement of the reasons for the
determination.
‘‘(d) JURISDICTION OF COURTS; UNITED STATES ATTORNEYS.—
‘‘(1) JURISDICTION OF COURTS.—The several district courts
of the United States are vested with jurisdiction specifically
to enforce, and to prevent and restrain any person from vio-
lating, this part or any regulation issued thereunder.
‘‘(2) UNITED STATES ATTORNEYS.—Whenever the Secretary
shall so request, it shall be the duty of the several United
States attorneys, in their respective districts, to institute pro-
ceedings to enforce the remedies and to collect the penalties
provided for in this part. The Secretary may elect not to refer
to a United States attorney any violation of this part or regula-
tion when the Secretary determines that the administration
and enforcement of this part would be adequately served by
written notice or warning to any person committing the viola-
tion.
‘‘(e) NONEXCLUSIVITY OF REMEDIES.—The remedies and pen-
alties provided for in this part shall be in addition to, and not
exclusive of, any remedies or penalties existing at law or in equity.
‘‘SEC. 359i. APPEALS.
‘‘(a) IN GENERAL.—An appeal may be taken to the Secretary
from any decision under section 359d establishing allocations of
marketing allotments, or under section 359f, by any person
adversely affected by reason of any such decision.
‘‘(b) PROCEDURE.—
‘‘(1) NOTICE OF APPEAL.—Any such appeal shall be taken
by filing with the Secretary, within 20 days after the decision
complained of is effective, notice in writing of the appeal and
a statement of the reasons therefor. Unless a later date is
specified by the Secretary as part of the Secretary’s decision,
the decision complained of shall be considered to be effective
as of the date on which announcement of the decision is made.
The Secretary shall deliver a copy of any notice of appeal
to each person shown by the records of the Secretary to be
adversely affected by reason of the decision appealed, and shall
at all times thereafter permit any such person to inspect and
make copies of appellant’s reasons for the appeal and shall
on application permit the person to intervene in the appeal.
H. R. 2646—70
‘‘(2) HEARING.—The Secretary shall provide each appellant
an opportunity for a hearing before an administrative law judge
in accordance with sections 554 and 556 of title 5, United
States Code. The expenses for conducting the hearing shall
be reimbursed by the Commodity Credit Corporation.
‘‘(c) SPECIAL APPEAL PROCESS REGARDING BEET SUGAR ALLOCA-
TIONS.—
‘‘(1) APPEAL AUTHORIZED.—Beginning after the 2006 crop
year, a processor that has an allocation of the beet sugar
allotment under this part (referred to in this subsection as
a ‘petitioner’) may file a notice of appeal with the Secretary
regarding the petitioner’s beet sugar allocation. Except as pro-
vided in paragraph (2), the Secretary shall consider the appeal
if the notice alleges that any processor that has a beet sugar
allocation has failed to fill at least 82.5 percent of its allocation
of the beet sugar allotment with sugar produced by it or
received from the Commodity Credit Corporation in 2 out of
the 3 crop years preceding the crop year in which the appeal
is filed. A processor that is alleged to have failed to fill at
least 82.5 percent of its allocation shall be allowed to fully
participate in the appeal.
‘‘(2) EXCEPTIONS.—An appeal under paragraph (1) shall
not be based on the failure of a processor to fill at least
82.5 percent of its allocation because of drought, flood, hail,
or other weather disaster, as determined by the Secretary.
The determination by the Secretary shall not require a formal
disaster declaration.
‘‘(3) RESPONSE TO APPEAL.—Upon the petitioner making
an appeal to the Secretary, and upon a review by the Secretary
of how processors have filled their allocations, the Secretary
may—
‘‘(A) assign an increased allocation for beet sugar to
the petitioner that provides a fair and equitable distribu-
tion of the allocations for beet sugar, taking into account—
‘‘(i) production history during the period beginning
on April 4, 1996, and through the date of enactment
of the Farm Security and Rural Investment Act of
2002;
‘‘(ii) capital investment during that period;
‘‘(iii) increases in United States sugar consump-
tion; and
‘‘(iv) the ability or inability of processors to fill
the allocations they have received under this part;
and
‘‘(B) reduce, correspondingly, the allocation for beet
sugar of each processor determined to have failed to fill
at least 82.5 percent of its allocation of the beet sugar
allotment as described in paragraph (1).
‘‘(4) FILING DEADLINE.—For purposes of the filing deadline
specified in subsection (b)(1), the 20-day period shall commence
on the date on which the Secretary announces the allocations
for the subsequent crop year or October 1, whichever is earlier.
‘‘SEC. 359j. ADMINISTRATION.
‘‘(a) USE OF CERTAIN AGENCIES.—In carrying out this part,
the Secretary may use the services of local committees of sugar
beet or sugarcane producers, sugarcane processors, or sugar beet
H. R. 2646—71
processors, State and county committees established under section
8(b) of the Soil Conservation and Domestic Allotment Act (16 U.S.C.
590h(b)), and the departments and agencies of the United States
Government.
‘‘(b) USE OF COMMODITY CREDIT CORPORATION.—The Secretary
shall use the services, facilities, funds, and authorities of the Com-
modity Credit Corporation to carry out this part.
‘‘SEC. 359k. REALLOCATING SUGAR QUOTA IMPORT SHORTFALLS.
‘‘(a) IN GENERAL.—Notwithstanding any other provision of law,
on or after June 1 of each of the 2002 through 2007 calendar
years, the United States Trade Representative, in consultation with
the Secretary, shall determine the amount of the quota of cane
sugar used by each qualified supplying country for that crop year,
and may reallocate the unused quota for that crop year among
qualified supplying countries.
‘‘(b) QUALIFIED SUPPLYING COUNTRY DEFINED.—In this section,
the term ‘qualified supplying country’ means one of the following
foreign countries that is allowed to export cane sugar to the United
States under an agreement or any other country with which the
United States has an agreement relating to the importation of
cane sugar:
Argentina
Australia
Barbados
Belize
Bolivia
Brazil
Colombia
Republic of the Congo
Costa Rica
Dominican Republic
Ecuador
El Salvador
Fiji
Gabon
Guatemala
Guyana
Haiti
Honduras
India
Cote D’Ivoire, formerly known as the 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.’’.
H. R. 2646—72
Subtitle E—Dairy
SEC. 1501. MILK PRICE SUPPORT PROGRAM.
(a) SUPPORT ACTIVITIES.—During the period beginning on June
1, 2002, and ending on December 31, 2007, the Secretary of Agri-
culture shall support the price of milk produced in the 48 contiguous
States through the purchase of cheese, butter, and nonfat dry
milk produced from the milk.
(b) RATE.—During the period specified in subsection (a), the
price of milk shall be supported at a rate equal to $9.90 per
hundredweight for milk containing 3.67 percent butterfat.
(c) PURCHASE PRICES.—
(1) UNIFORM PRICES.—The support purchase prices under
this section for each of the products of milk (butter, cheese,
and nonfat dry milk) announced by the Secretary shall be
the same for all of that product sold by persons offering to
sell the product to the Secretary.
(2) SUFFICIENT PRICES.—The purchase prices shall be suffi-
cient to enable plants of average efficiency to pay producers,
on average, a price that is not less than the rate of price
support for milk in effect under subsection (b).
(d) SPECIAL RULE FOR BUTTER AND NONFAT DRY MILK PUR-
CHASE PRICES.—
(1) ALLOCATION OF PURCHASE PRICES.—The Secretary may
allocate the rate of price support between the purchase prices
for nonfat dry milk and butter in a manner that will result
in the lowest level of expenditures by the Commodity Credit
Corporation or achieve such other objectives as the Secretary
considers appropriate. Not later than 10 days after making
or changing an allocation, the Secretary shall notify the Com-
mittee on Agriculture of the House of Representatives and
the Committee on Agriculture, Nutrition, and Forestry of the
Senate of the allocation. Section 553 of title 5, United States
Code, shall not apply with respect to the implementation of
this section.
(2) TIMING OF PURCHASE PRICE ADJUSTMENTS.—The Sec-
retary may make any such adjustments in the purchase prices
for nonfat dry milk and butter the Secretary considers to be
necessary not more than twice in each calendar year.
(e) COMMODITY CREDIT CORPORATION.—The Secretary shall
carry out the program authorized by this section through the Com-
modity Credit Corporation.
SEC. 1502. NATIONAL DAIRY MARKET LOSS PAYMENTS.
(a) DEFINITIONS.—In this section:
(1) CLASS I MILK.—The term ‘Class I milk’ means milk
(including milk components) classified as Class I milk under
a Federal milk marketing order.
(2) ELIGIBLE PRODUCTION.—The term ‘eligible production’
means milk produced by a producer in a participating State.
(3) FEDERAL MILK MARKETING ORDER.—The term ‘Federal
milk marketing order’ means an order issued under section
8c of the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted
with amendments by the Agricultural Marketing Agreement
Act of 1937.
H. R. 2646—73
(4) PARTICIPATING STATE.—The term ‘participating State’
means each State.
(5) PRODUCER.—The term ‘producer’ means an individual
or entity that directly or indirectly (as determined by the Sec-
retary)—
(A) shares in the risk of producing milk; and
(B) 
makes 
contributions 
(including 
land, 
labor,
management, equipment, or capital) to the dairy farming
operation of the individual or entity that are at least
commensurate with the share of the individual or entity
of the proceeds of the operation.
(b) PAYMENTS.—The Secretary shall offer to enter into contracts
with producers on a dairy farm located in a participating State
under which the producers receive payments on eligible production.
(c) AMOUNT.—Payments to a producer under this section shall
be calculated by multiplying (as determined by the Secretary)—
(1) the payment quantity for the producer during the
applicable month established under subsection (d);
(2) the amount equal to—
(A) $16.94 per hundredweight; less
(B) the Class I milk price per hundredweight in Boston
under the applicable Federal milk marketing order; by
(3) 45 percent.
(d) PAYMENT QUANTITY.—
(1) IN GENERAL.—Subject to paragraph (2), the payment
quantity for a producer during the applicable month under
this section shall be equal to the quantity of eligible production
marketed by the producer during the month.
(2) LIMITATION.—The payment quantity for all producers
on a single dairy operation during the months of the applicable
fiscal year for which the producers receive payments under
subsection (b) shall not exceed 2,400,000 pounds. For purposes
of determining whether producers are producers on separate
dairy operations or a single dairy operation, the Secretary
shall apply the same standards as were applied in imple-
menting the dairy program under section 805 of the Agriculture,
Rural Development, Food and Drug Administration, and
Related Agencies Appropriations Act, 2001 (as enacted into
law by Public Law 106–387; 114 Stat. 1549A–50).
(3) RECONSTITUTION.—The Secretary shall promulgate
regulations to ensure that a producer does not reconstitute
a dairy operation for the sole purpose of receiving additional
payments under this section.
(e) PAYMENTS.—A payment under a contract under this section
shall be made on a monthly basis not later than 60 days after
the last day of the month for which the payment is made.
(f) SIGNUP.—The Secretary shall offer to enter into contracts
under this section during the period beginning on the date that
is 60 days after the date of enactment of this Act and ending
on September 30, 2005.
(g) DURATION OF CONTRACT.—
(1) IN GENERAL.—Except as provided in paragraph (2) and
subsection (h), any contract entered into by producers on a
dairy farm under this section shall cover eligible production
marketed by the producers on the dairy farm during the period
starting with the first day of month the producers on the
H. R. 2646—74
dairy farm enter into the contract and ending on September
30, 2005.
(2) VIOLATIONS.—If a producer violates the contract, the
Secretary may—
(A) terminate the contract and allow the producer to
retain any payments received under the contract; or
(B) allow the contract to remain in effect and require
the producer to repay a portion of the payments received
under the contract based on the severity of the violation.
(h) TRANSITION RULE.—In addition to any payment that is
otherwise available under this section, if the producers on a dairy
farm enter into a contract under this section, the Secretary shall
make a payment in accordance with the formula specified in sub-
section (c) on the quantity of eligible production of the producer
marketed during the period beginning on December 1, 2001, and
ending on the last day of the month preceding the month the
producers on the dairy farm entered into the contract.
SEC. 1503. DAIRY EXPORT INCENTIVE AND DAIRY INDEMNITY PRO-
GRAMS.
(a) DAIRY EXPORT INCENTIVE PROGRAM.—Section 153(a) of the
Food Security Act of 1985 (15 U.S.C. 713a–14(a)) is amended by
striking ‘‘2002’’ and inserting ‘‘2007’’.
(b) DAIRY INDEMNITY PROGRAM.—Section 3 of Public Law 90–
484 (7 U.S.C. 450l) is amended by striking ‘‘1995’’ and inserting
‘‘2007’’.
SEC. 1504. DAIRY PRODUCT MANDATORY REPORTING.
Section 272(1) of the Agricultural Marketing Act of 1946 (7
U.S.C. 1637a(1)) is amended—
(1) by striking ‘‘means manufactured dairy products’’ and
inserting ‘‘means—
‘‘(A) manufactured dairy products’’;
(2) by striking the period at the end and inserting ‘‘; and’’;
and
(3) by adding at the end the following:
‘‘(B) substantially identical products designated by the
Secretary.’’.
SEC. 1505. FUNDING OF DAIRY PROMOTION AND RESEARCH PROGRAM.
(a) DEFINITIONS.—Section 111 of the Dairy Production Stabiliza-
tion Act of 1983 (7 U.S.C. 4502) is amended—
(1) in subsection (k), by striking ‘‘and’’ at the end;
(2) in subsection (l), by striking the period at the end
and inserting a semicolon; and
(3) by adding at the end the following:
‘‘(m) the term ‘imported dairy product’ means any dairy
product that is imported into the United States (as defined
in subsection (l)), including dairy products imported into the
United States in the form of—
‘‘(1) milk, cream, and fresh and dried dairy products;
‘‘(2) butter and butterfat mixtures;
‘‘(3) cheese; and
‘‘(4) casein and mixtures;
‘‘(n) the term ‘importer’ means a person that imports an
imported dairy product into the United States; and
‘‘(o) the term ‘Customs’ means the United States Customs
Service.’’.
H. R. 2646—75
(b) REPRESENTATION OF IMPORTERS ON BOARD.—Section 113(b)
of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4504(b))
is amended—
(1) by inserting ‘‘NATIONAL
DAIRY
PROMOTION
AND
RESEARCH BOARD.—’’ after ‘‘(b)’’;
(2) by designating the first through ninth sentences as
paragraphs (1) through (5) and paragraphs (7) through (10),
respectively, and indenting the paragraphs appropriately;
(3) in paragraph (2) (as so designated), by striking ‘‘Mem-
bers’’ and inserting ‘‘Except as provided in paragraph (6), the
members’’;
(4) by inserting after paragraph (5) (as so designated) the
following:
‘‘(6) IMPORTERS.—
‘‘(A) INITIAL
REPRESENTATION.—In making initial
appointments to the Board of importer representatives,
the Secretary shall appoint 2 members who represent
importers of dairy products and are subject to assessments
under the order.
‘‘(B) SUBSEQUENT
REPRESENTATION.—At least once
every 3 years after the initial appointment of importer
representatives under subparagraph (A), the Secretary
shall review the average volume of domestic production
of dairy products compared to the average volume of
imports of dairy products into the United States during
the previous 3 years and, on the basis of that review,
shall reapportion importer representation on the Board
to reflect the proportional share of the United States
market by domestic production and imported dairy prod-
ucts.
‘‘(C) ADDITIONAL MEMBERS; NOMINATIONS.—The mem-
bers appointed under this paragraph—
‘‘(i) shall be in addition to the total number of
members appointed under paragraph (2); and
‘‘(ii) shall be appointed from nominations sub-
mitted by importers under such procedures as the Sec-
retary determines to be appropriate.’’; and
(5) in paragraph (8) (as so designated), by striking ‘‘is
produced’’ and inserting ‘‘is produced as well as importers of
dairy products’’.
(c) BUDGETS.—Section 113(e) of the Dairy Production Stabiliza-
tion Act of 1983 (7 U.S.C. 4504(e)) is amended—
(1) by striking ‘‘(e)’’ and inserting:
‘‘(e) BUDGETS.—
‘‘(1) PREPARATION AND SUBMISSION.—’’;
(2) by striking the last sentence; and
(3) by adding at the end the following:
‘‘(2) FOREIGN MARKET EFFORTS.—The order shall authorize
the Board to expend in the maintenance and expansion of
foreign markets an amount not to exceed the amount collected
from United States producers for a fiscal year. Of those funds,
for each of the 2002 through 2007 fiscal years, the Board’s
budget may provide for the expenditure of revenues available
to the Board to develop international markets for, and to pro-
mote within such markets, the consumption of dairy products
produced or manufactured in the United States.’’.
H. R. 2646—76
(d) IMPORTER ASSESSMENT.—Section 113(g) of the Dairy Produc-
tion Stabilization Act of 1983 (7 U.S.C. 4504(g)) is amended—
(1) by inserting ‘‘ASSESSMENTS.—’’ after ‘‘(g)’’;
(2) by designating the first through fifth sentences as para-
graphs (1) through (5), respectively, and indenting appro-
priately;
(3) in paragraph (3) (as so designated)—
(A) by inserting ‘‘for milk produced in the United States
and imported dairy products’’ after ‘‘The rate of assess-
ment’’; and
(B) by inserting before the period at the end the fol-
lowing: ‘‘, as determined by the Secretary’’; and
(4) by adding at the end the following:
‘‘(6) IMPORTERS.—
‘‘(A) IN GENERAL.—The order shall provide that each
importer of imported dairy products shall pay an assess-
ment to the Board in the manner prescribed by the order.
‘‘(B) TIME FOR PAYMENT.—The assessment on imported
dairy products shall be paid by the importer to Customs
at the time the entry documents are filed with Customs.
Customs shall remit the assessments to the Board. For
purposes of this subparagraph, the term ‘importer’ includes
persons who hold title to foreign-produced dairy products
immediately upon release by Customs, as well as persons
who act on behalf of others, as agents, brokers, or con-
signees, to secure the release of dairy products from Cus-
toms.
‘‘(C) USE OF ASSESSMENTS ON IMPORTED DAIRY PROD-
UCTS.—Assessments collected on imported dairy products
shall not be used for foreign market promotion.’’.
(e) RECORDS.—Section 113(k) of the Dairy Production Stabiliza-
tion Act of 1983 (7 U.S.C. 4504(k)) is amended in the first sentence
by striking ‘‘person receiving’’ and inserting ‘‘importer of imported
dairy products, each person receiving’’.
(f) IMPORTER ELIGIBILITY TO VOTE IN REFERENDUM.—Section
116(b) of the Dairy Promotion Stabilization Act of 1983 (7 U.S.C.
4507(b)) is amended—
(1) in the first sentence—
(A) by inserting after ‘‘of producers’’ the following: ‘‘and
importers’’; and
(B) by inserting after ‘‘the producers’’ the following:
‘‘and importers’’; and
(2) in the second sentence, by inserting after ‘‘commercial
use’’ the following: ‘‘and importers voting in the referendum
(who have been engaged in the importation of dairy products
during the same representative period, as determined by the
Secretary)’’.
(g) ORDER
IMPLEMENTATION
AND
INTERNATIONAL
TRADE
OBLIGATIONS.—Section 112 of the Dairy Promotion Stabilization
Act of 1983 (7 U.S.C. 4503) is amended by adding at the end
the following:
‘‘(d) ORDER
IMPLEMENTATION
AND
INTERNATIONAL
TRADE
OBLIGATIONS.—The Secretary, in consultation with the United
States Trade Representative, shall ensure that the order is imple-
mented in a manner consistent with the international trade obliga-
tions of the Federal Government.’’.
H. R. 2646—77
(h) CONFORMING
AMENDMENTS
TO
REFLECT
ADDITION
OF
IMPORTERS.—The Dairy Production Stabilization Act of 1983 is
amended—
(1) in section 110(b) (7 U.S.C. 4501(b))—
(A) in the first sentence—
(i) by inserting after ‘‘commercial use’’ the fol-
lowing: ‘‘and on imported dairy products’’; and
(ii) by striking ‘‘products produced in the United
States.’’ and inserting ‘‘products.’’; and
(B) in the second sentence, by inserting after ‘‘produce
milk’’ the following: ‘‘or the right of any person to import
dairy products’’; and
(2) in section 111(d) (7 U.S.C. 4502(d)), by striking ‘‘pro-
duced in the United States’’.
SEC. 1506. FLUID MILK PROMOTION.
(a) DEFINITION OF FLUID MILK PRODUCT.—Section 1999C of
the Fluid Milk Promotion Act of 1990 (7 U.S.C. 6402) is amended
by striking paragraph (3) and inserting the following:
‘‘(3) FLUID MILK PRODUCT.—The term ‘fluid milk product’
has the meaning given the term in—
‘‘(A) section 1000.15 of title 7, Code of Federal Regula-
tions, subject to such amendments as may be made by
the Secretary; or
‘‘(B) any successor regulation.’’.
(b) DEFINITION OF FLUID MILK PROCESSOR.—Section 1999C(4)
of the Fluid Milk Promotion Act of 1990 (7 U.S.C. 6402(4)) is
amended by striking ‘‘500,000 pounds of fluid milk products in
consumer-type packages per month’’ and inserting ‘‘3,000,000
pounds of fluid milk products in consumer-type packages per month
(excluding products delivered directly to the place of residence of
a consumer)’’.
(c) ELIMINATION OF ORDER TERMINATION DATE.—Section 1999O
of the Fluid Milk Promotion Act of 1990 (7 U.S.C. 6414) is
amended—
(1) by striking subsection (a); and
(2) by redesignating subsections (b) and (c) as subsections
(a) and (b), respectively.
SEC. 1507. STUDY OF NATIONAL DAIRY POLICY.
(a) STUDY REQUIRED.—The Secretary of Agriculture shall con-
duct a comprehensive economic evaluation of the potential direct
and indirect effects of the various elements of the national dairy
policy, including an examination of the effect of the national dairy
policy on—
(1) farm price stability, farm profitability and viability,
and local rural economies in the United States;
(2) child, senior, and low-income nutrition programs,
including impacts on schools and institutions participating in
the programs, on program recipients, and other factors; and
(3) the wholesale and retail cost of fluid milk, dairy farms,
and milk utilization.
(b) REPORT.—Not later than 1 year after the date of enactment
of this Act, the Secretary shall submit to the Committee on Agri-
culture of the House of Representatives and the Committee on
Agriculture, Nutrition, and Forestry of the Senate a report
describing the results of the study required by this section.
H. R. 2646—78
(c) NATIONAL DAIRY POLICY DEFINED.—In this section, the term
‘‘national dairy policy’’ means the dairy policy of the United States
as evidenced by the following policies and programs:
(1) Federal milk marketing orders issued under section
8c of the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted
with amendments by the Agricultural Marketing Act of 1937.
(2) Interstate dairy compacts (including proposed compacts
described in H.R. 1827 and S. 1157, as introduced in the 107th
Congress).
(3) Over-order premiums and State pricing programs.
(4) Direct payments to milk producers.
(5) Federal milk price support program established under
section 1401.
(6) Export programs regarding milk and dairy products,
such as the dairy export incentive program established under
section 153 of the Food Security Act of 1985 (15 U.S.C. 713a–
14).
SEC. 1508. STUDIES OF EFFECTS OF CHANGES IN APPROACH TO
NATIONAL DAIRY POLICY AND FLUID MILK IDENTITY
STANDARDS.
(a) FEDERAL DAIRY POLICY CHANGES.—The Secretary of Agri-
culture shall conduct a study of the effects of—
(1) terminating all Federal programs relating to price sup-
port and supply management for milk; and
(2) granting the consent of Congress to cooperative efforts
by States to manage milk prices and supply.
(b) FLUID MILK IDENTITY STANDARDS.—The Secretary shall con-
duct a study of the effects of including in the standard of identity
for fluid milk a required minimum protein content that is commen-
surate with the average nonfat solids content of bovine milk pro-
duced in the United States.
(c) REPORTS.—Not later than 1 year after the date of enactment
of this Act, the Secretary shall submit to the Committee on Agri-
culture of the House of Representatives and the Committee on
Agriculture, Nutrition, and Forestry of the Senate a report
describing the results of the studies required by this section.
Subtitle F—Administration
SEC. 1601. ADMINISTRATION GENERALLY.
(a) USE OF COMMODITY CREDIT CORPORATION.—The Secretary
shall use the funds, facilities, and authorities of the Commodity
Credit Corporation to carry out this title.
(b) DETERMINATIONS
BY SECRETARY.—A determination made
by the Secretary under this title shall be final and conclusive.
(c) REGULATIONS.—
(1) IN GENERAL.—Not later than 90 days after the date
of the enactment of this Act, the Secretary and the Commodity
Credit Corporation, as appropriate, shall promulgate such regu-
lations as are necessary to implement this title.
(2) PROCEDURE.—The promulgation of the regulations and
administration of this title shall be made without regard to—
(A) chapter 35 of title 44, United States Code (com-
monly know as the ‘‘Paperwork Reduction Act’’);
H. R. 2646—79
(B) the Statement of Policy of the Secretary of Agri-
culture effective July 24, 1971 (36 Fed. Reg. 13804),
relating to notices of proposed rulemaking and public
participation in rulemaking; and
(C) the notice and comment provisions of section 553
of title 5, United States Code.
(3) CONGRESSIONAL REVIEW OF AGENCY RULEMAKING.—In
carrying out this subsection, the Secretary shall use the
authority provided under section 808 of title 5, United States
Code.
(d) TREATMENT OF ADVANCE PAYMENT OPTION.—The protection
that was afforded producers that had an option to elect to accelerate
the receipt of any payment under a production flexibility contract
payable under the Federal Agriculture Improvement and Reform
Act of 1996, as provided by section 525 of Public 106–170 (113
Stat. 1928; 7 U.S.C. 7212 note), shall also apply to the option
to receive—
(1) the advance payment of direct payments and counter-
cyclical payments under subtitle A and subtitle C; and
(2) the single payment of compensation for eligible peanut
quota holders under section 1310.
(e) ADJUSTMENT AUTHORITY RELATED
TO URUGUAY ROUND
COMPLIANCE.—
(1) REQUIRED DETERMINATION; ADJUSTMENT.—If the Sec-
retary determines that expenditures under subtitles A through
E that are subject to the total allowable domestic support
levels under the Uruguay Round Agreements (as defined in
section 2 of the Uruguay Round Agreements Act (19 U.S.C.
3501)), as in effect on the date of enactment of this Act, will
exceed such allowable levels for any applicable reporting period,
the Secretary shall, to the maximum extent practicable, make
adjustments in the amount of such expenditures during that
period to ensure that such expenditures do not exceed such
allowable levels.
(2) CONGRESSIONAL
NOTIFICATION.—Before making any
adjustment under paragraph (1), the Secretary shall submit
to the Committee on Agriculture, Nutrition, and Forestry of
the Senate and the Committee on Agriculture of the House
of Representatives a report describing the determination made
under that paragraph and the extent of the adjustment to
be made.
SEC. 1602. SUSPENSION OF PERMANENT PRICE SUPPORT AUTHORITY.
(a) AGRICULTURAL ADJUSTMENT ACT OF 1938.—The following
provisions of the Agricultural Adjustment Act of 1938 shall not
be applicable to the 2002 through 2007 crops of covered commod-
ities, peanuts, and sugar and shall not be applicable to milk during
the period beginning on the date of enactment of this Act through
December 31, 2007:
(1) Parts II through V of subtitle B of title III (7 U.S.C.
1326–1351).
(2) In the case of upland cotton, section 377 (7 U.S.C.
1377).
(3) Subtitle D of title III (7 U.S.C. 1379a–1379j).
(4) Title IV (7 U.S.C. 1401–1407).
(b) AGRICULTURAL ACT OF 1949.—The following provisions of
the Agricultural Act of 1949 shall not be applicable to the 2002
H. R. 2646—80
through 2007 crops of covered commodities, peanuts, and sugar
and shall not be applicable to milk during the period beginning
on the date of enactment of this Act and through December 31,
2007:
(1) Section 101 (7 U.S.C. 1441).
(2) Section 103(a) (7 U.S.C. 1444(a)).
(3) Section 105 (7 U.S.C. 1444b).
(4) Section 107 (7 U.S.C. 1445a).
(5) Section 110 (7 U.S.C. 1445e).
(6) Section 112 (7 U.S.C. 1445g).
(7) Section 115 (7 U.S.C. 1445k).
(8) Section 201 (7 U.S.C. 1446).
(9) Title III (7 U.S.C. 1447–1449).
(10) Title IV (7 U.S.C. 1421–1433d), other than sections
404, 412, and 416 (7 U.S.C. 1424, 1429, and 1431).
(11) Title V (7 U.S.C. 1461–1469).
(12) Title VI (7 U.S.C. 1471–1471j).
(c) SUSPENSION OF CERTAIN QUOTA PROVISIONS.—The joint reso-
lution entitled ‘‘A joint resolution relating to corn and wheat mar-
keting quotas under the Agricultural Adjustment Act of 1938, as
amended’’, approved May 26, 1941 (7 U.S.C. 1330 and 1340), shall
not be applicable to the crops of wheat planted for harvest in
the calendar years 2002 through 2007.
(d) CONFORMING AMENDMENT.—Section 171(a)(1) of the Federal
Agriculture Improvement and Reform Act of 1996 (7 U.S.C.
7301(a)(1)) is amended by striking ‘‘2002’’ the first place appears
and inserting ‘‘2001’’.
SEC. 1603. PAYMENT LIMITATIONS.
(a) LIMITATION ON AMOUNTS RECEIVED.—Section 1001 of the
Food Security Act of 1985 (7 U.S.C. 1308) is amended by striking
the section heading, ‘‘SEC. 1001.’’, and all that follows through
the end of paragraph (4) and inserting the following:
‘‘SEC. 1001. PAYMENT LIMITATIONS.
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) COVERED COMMODITY.—The term ‘covered commodity’
has the meaning given that term in section 1001 of the Farm
Security and Rural Investment Act of 2002.
‘‘(2) LOAN
COMMODITY.—The term ‘loan commodity’ has
the meaning given that term in section 1001 of the Farm
Security and Rural Investment Act of 2002, except that the
term does not include wool, mohair, or honey.
‘‘(3) SECRETARY.—The term ‘Secretary’ means the Secretary
of Agriculture.
‘‘(b) LIMITATION ON DIRECT PAYMENTS.—
‘‘(1) COVERED COMMODITIES.—The total amount of direct
payments made to a person during any crop year under subtitle
A of title I of the Farm Security and Rural Investment Act
of 2002 for 1 or more covered commodities may not exceed
$40,000.
‘‘(2) PEANUTS.—The total amount of direct payments made
to a person during any crop year under subtitle C of title
I of the Farm Security and Rural Investment Act of 2002
may not exceed $40,000.
‘‘(c) LIMITATION ON COUNTER-CYCLICAL PAYMENTS.—
‘‘(1) COVERED COMMODITIES.—The total amount of counter-
cyclical payments made to a person during any crop year under
H. R. 2646—81
subtitle A of title I of the Farm Security and Rural Investment
Act of 2002 for 1 or more covered commodities may not exceed
$65,000.
‘‘(2) PEANUTS.—The total amount of counter-cyclical pay-
ments made to a person during any crop year under subtitle
C of title I of the Farm Security and Rural Investment Act
of 2002 may not exceed $65,000.
‘‘(d) LIMITATION ON MARKETING LOAN GAINS AND LOAN DEFI-
CIENCY PAYMENTS.—
‘‘(1) LOAN COMMODITIES.—The total amount of the following
gains and payments that a person may receive during any
crop year may not exceed $75,000:
‘‘(A) Any gain realized by a producer from repaying
a marketing assistance loan for 1 or more loan commodities
under subtitle B of title I of the Farm Security and Rural
Investment Act of 2002 at a lower level than the original
loan rate established for the loan commodity under that
subtitle.
‘‘(B) Any loan deficiency payments received for 1 or
more loan commodities under that subtitle.
‘‘(2) OTHER COMMODITIES.—The total amount of the fol-
lowing gains and payments that a person may receive during
any crop year may not exceed $75,000:
‘‘(A) Any gain realized by a producer from repaying
a marketing assistance loan for peanuts, wool, mohair,
or honey under subtitle B or C of title I of the Farm
Security and Rural Investment Act of 2002 at a lower
level than the original loan rate established for the com-
modity under those subtitles.
‘‘(B) Any loan deficiency payments received for peanuts,
wool, mohair, and honey under those subtitles.’’.
(b) CLERICAL
AND CONFORMING AMENDMENTS
TO SECTION
1001.—Section 1001 of the Food Security Act of 1985 (7 U.S.C.
1308) is amended—
(1) in paragraph (5)—
(A) by striking ‘‘(5)’’ and inserting ‘‘(e) DEFINITION OF
PERSON.—’’
(B) by redesignating subparagraphs (A) through (E)
as paragraphs (1) through (5), respectively;
(C) in paragraph (1), as so redesignated—
(i) by redesignating clauses (i) and (ii) as subpara-
graphs (A) and (B), respectively; and
(ii) by striking the second sentence; and
(D) in paragraph (2), as so redesignated—
(i) by redesignating clause (i) as subparagraph (A)
and, in such subparagraph (as so redesignated)—
(I) by striking ‘‘subparagraph (A), subject to
clause (ii)’’ and inserting ‘‘paragraph (1), subject
to subparagraph (B)’’; and
(II) by redesignating subclauses (I), (II), and
(III), as clauses (i), (ii), and (iii), respectively;
(ii) by redesignating clause (ii) as subparagraph
(B) and, in such subparagraph (as so redesignated),
by redesignating subclauses (I), (II), and (III), as
clauses (i), (ii), and (iii), respectively; and
(iii) by redesignating clause (iii) as subparagraph
(C) and, in such subparagraph (as so redesignated)—
H. R. 2646—82
(I) by striking ‘‘as described in paragraphs
(1) and (2)’’ and inserting ‘‘as described in sub-
sections (b), (c), and (d)’’; and
(II) by redesignating subclauses (I) and (II)
as clauses (i) and (ii), respectively;
(2) in paragraph (6), by striking ‘‘(6)’’ and inserting ‘‘(f)
PUBLIC SCHOOLS.—’’; and
(3) in paragraph (7), by striking ‘‘(7)’’ and inserting ‘‘(g)
TIME LIMITS; RELIANCE.—’’.
(c) CONFORMING AMENDMENTS TO OTHER LAWS.—
(1) Section 1001A of the Food Security Act of 1985 (7
U.S.C. 1308–1) is amended—
(A) in subsections (a)(1) and (b)(2)(B), by striking ‘‘sec-
tion 
1001(5)(B)(i)(II)’’ 
and 
inserting 
‘‘section
1001(e)(2)(A)(ii)’’; and
(B) in subsections (a)(1) and (b)(1), by striking ‘‘section
1001(5)(B)(i)’’ and inserting ‘‘section 1001(e)(2)(A)’’; and
(2) Section 1001B of the Food Security Act of 1985 (7
U.S.C. 1308–2) is amended by striking ‘‘as described in para-
graphs (1) and (2)’’ and inserting ‘‘as described in subsections
(b), (c), and (d)’’.
(3) Section 1001C(a) of the Food Security Act of 1985 (7
U.S.C. 1308–3(a)) is amended by inserting ‘‘title I of the Farm
Security and Rural Investment Act of 2002,’’ after ‘‘made avail-
able under’’.
(d) TRANSITION.—Section 1001 of the Food Security Act of 1985
(7 U.S.C. 1308), as in effect on the day before the date of the
enactment of this Act, shall continue to apply with respect to
the 2001 crop of any covered commodity.
SEC. 1604. ADJUSTED GROSS INCOME LIMITATION.
The Food Security Act of 1985 is amended—
(1) by redesignating section 1001D (7 U.S.C. 1308–4) and
section 1001E (7 U.S.C. 1308–5) as sections 1001E and 1001F,
respectively; and
(2) by inserting after section 1001C (7 U.S.C. 1308–3) the
following:
‘‘SEC. 1001D. ADJUSTED GROSS INCOME LIMITATION.
‘‘(a) DEFINITION OF AVERAGE ADJUSTED GROSS INCOME.—
‘‘(1) IN
GENERAL.—In this section, the term ‘average
adjusted gross income’, with respect to an individual or entity
(for 
purposes 
of 
this 
section, 
as 
defined 
in 
section
1001(e)(2)(A)(ii)), means the 3-year average of the adjusted
gross income or comparable measure of the individual or entity
over the 3 preceding tax years, as determined by the Secretary.
‘‘(2) SPECIAL RULES FOR CERTAIN INDIVIDUALS AND ENTI-
TIES.—In the case of an entity that is not required to file
a Federal income tax return or an individual or entity that
did not have taxable income in 1 or more of the tax years
used to determine the average under paragraph (1), the Sec-
retary shall provide, by regulation, a method for determining
the average adjusted gross income of the individual or entity
for purposes of this section.
‘‘(b) LIMITATION.—
‘‘(1) IN GENERAL.—Notwithstanding any other provision of
law, an individual or entity shall not be eligible to receive
any benefit described in paragraph (2) during a crop year
H. R. 2646—83
if the average adjusted gross income of the individual or entity
exceeds $2,500,000, unless not less than 75 percent of the
average adjusted gross income of the individual or entity is
derived from farming, ranching, or forestry operations, as deter-
mined by the Secretary.
‘‘(2) COVERED
BENEFITS.—Paragraph (1) applies with
respect to the following:
‘‘(A) A direct payment or counter-cyclical payment
under subtitle A or C of title I of the Farm Security
and Rural Investment Act of 2002.
‘‘(B) A marketing loan gain or payment described in
section 1001(d) of this Act.
‘‘(C) A payment under any program under title XII
of this Act or title II of the Farm Security and Rural
Investment Act of 2002.
‘‘(c) CERTIFICATION.—To comply with the limitation under sub-
section (b), an individual or entity shall provide to the Secretary—
‘‘(1) a certification by a certified public accountant or
another third party that is acceptable to the Secretary that
the average adjusted gross income of the individual or entity
does not exceed the limitation specified in that subsection;
or
‘‘(2) information and documentation regarding the adjusted
gross income of the individual or entity through other proce-
dures established by the Secretary.
‘‘(d) COMMENSURATE REDUCTION.—In the case of a benefit
described in subsection (b)(2) made in a crop year to an entity,
general partnership, or joint venture, the amount of the benefit
shall be reduced by an amount that is commensurate with the
direct and indirect ownership interest in the entity, general partner-
ship, or joint venture of each individual who has an average
adjusted gross income in excess of the limitation specified in sub-
section (b) for the average of the 3 preceding crop years.
‘‘(e) EFFECTIVE PERIOD.—This section shall apply only during
the 2003 through 2007 crop years.’’.
SEC. 1605. COMMISSION ON APPLICATION OF PAYMENT LIMITATIONS.
(a) ESTABLISHMENT.—There is established a commission to be
known as the ‘‘Commission on the Application of Payment Limita-
tions for Agriculture’’ (referred to in this section as the ‘‘Commis-
sion’’).
(b) DUTIES.—The Commission shall conduct a study on the
potential impacts of further payment limitations on the receipt
of direct payments, counter-cyclical payments, and marketing loan
gains and loan deficiency payments on—
(1) farm income;
(2) land values;
(3) rural communities;
(4) agribusiness infrastructure;
(5) planting decisions of producers affected; and
(6) supply and prices of covered commodities, loan commod-
ities, specialty crops (including fruits and vegetables), and other
agricultural commodities.
(c) MEMBERSHIP.—
(1) COMPOSITION.—The Commission shall be composed of
10 members as follows:
(A) 3 members appointed by the Secretary.
H. R. 2646—84
(B) 3 members appointed by the Committee on Agri-
culture, Nutrition, and Forestry of the Senate.
(C) 3 members appointed by the Committee on Agri-
culture of the House of Representatives.
(D) The Chief Economist of the Department of Agri-
culture.
(2) FEDERAL GOVERNMENT EMPLOYMENT.—The membership
of the Commission may include 1 or more employees of the
Department of Agriculture or other Federal agencies.
(3) DATE OF APPOINTMENTS.—The appointment of a member
of the Commission shall be made not later than 60 days after
the date of enactment of this Act.
(4) TERM; VACANCIES.—
(A) TERM.—A member shall be appointed for the life
of the Commission.
(B) VACANCIES.—A vacancy on the Commission—
(i) shall not affect the powers of the Commission;
and
(ii) shall be filled in the same manner as the
original appointment was made.
(5) INITIAL MEETING.—Not later than 30 days after the
date on which all members of the Commission have been
appointed, the Commission shall hold the initial meeting of
the Commission.
(d) QUORUM.—A majority of the members of the Commission
shall constitute a quorum for the transaction of business, but a
lesser number of members may hold hearings.
(e) CHAIRPERSON.—The Secretary shall appoint 1 of the mem-
bers of the Commission to serve as Chairperson of the Commission.
(f) REPORT.—Not later than 1 year after the date of enactment
of this Act, the Commission shall submit to the President, the
Committee on Agriculture of the House of Representatives, and
the Committee on Agriculture, Nutrition, and Forestry of the Senate
a report containing the results of the study required by subsection
(b), including such recommendations as the Commission considers
appropriate.
(g) HEARINGS.—The Commission may hold such hearings, meet
and act at such times and places, take such testimony, and receive
such evidence as the Commission considers advisable to carry out
this section.
(h) INFORMATION FROM FEDERAL AGENCIES.—The Commission
may secure directly from a Federal agency such information as
the Commission considers necessary to carry out this section. On
request of the Chairperson of the Commission, the head of the
agency shall provide the information to the Commission.
(i) POSTAL SERVICES.—The Commission may use the United
States mails in the same manner and under the same conditions
as other agencies of the Federal Government.
(j) ASSISTANCE FROM SECRETARY.—The Secretary may provide
to the Commission appropriate office space and such reasonable
administrative and support services as the Commission may
request.
(k) COMPENSATION OF MEMBERS.—
(1) NON-FEDERAL EMPLOYEES.—A member of the Commis-
sion who is not an officer or employee of the Federal Govern-
ment shall be compensated at a rate equal to the daily equiva-
lent of the annual rate of basic pay prescribed for level IV
H. R. 2646—85
of the Executive Schedule under section 5315 of title 5, United
States Code, for each day (including travel time) during which
the member is engaged in the performance of the duties of
the Commission.
(2) FEDERAL EMPLOYEES.—A member of the Commission
who is an officer or employee of the Federal Government shall
serve without compensation in addition to the compensation
received for the services of the member as an officer or employee
of the Federal Government.
(3) TRAVEL EXPENSES.—A member of the Commission shall
be allowed travel expenses, including per diem in lieu of subsist-
ence, at rates authorized for an employee of an agency under
subchapter I of chapter 57 of title 5, United States Code,
while away from the home or regular place of business of
the member in the performance of the duties of the Commission.
(l) FEDERAL ADVISORY COMMITTEE ACT.—The Federal Advisory
Committee Act (5 U.S.C. App.) shall not apply to the Commission
or any proceeding of the Commission.
SEC. 1606. ADJUSTMENTS OF LOANS.
Section 162(b) of the Federal Agriculture Improvement and
Reform Act of 1996 (7 U.S.C. 7282(b)) is amended by striking
‘‘this title’’ and inserting ‘‘this title and title I of the Farm Security
and Rural Investment Act of 2002’’.
SEC. 1607. PERSONAL LIABILITY OF PRODUCERS FOR DEFICIENCIES.
Section 164 of the Federal Agriculture Improvement and
Reform Act of 1996 (7 U.S.C. 7284) is amended by striking ‘‘this
title’’ each places it appears and inserting ‘‘this title and title
I of the Farm Security and Rural Investment Act of 2002’’.
SEC. 1608. EXTENSION OF EXISTING ADMINISTRATIVE AUTHORITY
REGARDING LOANS.
Section 166 of the Federal Agriculture Improvement and
Reform Act of 1996 (7 U.S.C. 7286) is amended—
(1) in subsection (a), by striking ‘‘subtitle C’’ and inserting
‘‘subtitle C of this title and subtitle B and C of title I of
the Farm Security and Rural Investment Act of 2002’’; and
(2) in subsection (c)(1), by striking ‘‘subtitle C’’ and
inserting ‘‘subtitle C of this title and subtitle B and C of
title I of the Farm Security and Rural Investment Act of 2002’’.
SEC. 1609. COMMODITY CREDIT CORPORATION INVENTORY.
Section 5 of the Commodity Credit Corporation Charter Act
(15 U.S.C. 714c) is amended in the last sentence by inserting
before the period at the end the following: ‘‘(including, at the option
of the Corporation, the use of private sector entities)’’.
SEC. 1610. 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
‘‘60,000,000’’; and
(2) in clause (ii), by striking ‘‘15 percent’’ and inserting
‘‘10 percent’’.
SEC. 1611. FARM RECONSTITUTIONS.
(a) IN GENERAL.—Section 316(a)(1)(A)(ii) of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1314b(a)(1)(A)(ii)) is amended
H. R. 2646—86
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 allot-
ments and quotas, under this section, in accordance with such
conditions as are established by the Secretary.’’.
(b) STUDY.—
(1) IN GENERAL.—The Secretary shall conduct a study on
the effects on the limitation 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
Adjustment 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 submit to the Com-
mittee 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. 1612. ASSIGNMENT OF PAYMENTS.
The provisions of section 8(g) of the Soil Conservation and
Domestic Allotment Act (16 U.S.C. 590h(g)), relating to assignment
of payments, shall apply to payments made under the authority
of this Act. The producer making the assignment, or the assignee,
shall provide the Secretary with notice, in such manner as the
Secretary may require, of any assignment made under this section.
SEC. 1613. EQUITABLE RELIEF FROM INELIGIBILITY FOR LOANS, PAY-
MENTS, OR OTHER BENEFITS.
(a) DEFINITIONS.—In this section:
(1) AGRICULTURAL
COMMODITY.—The term ‘‘agricultural
commodity’’ means any agricultural commodity, food, feed, fiber,
or livestock that is subject to a covered program.
(2) COVERED PROGRAM.—
(A) IN GENERAL.—The term ‘‘covered program’’ means—
(i) a program administered by the Secretary under
which price or income support, or production or market
loss assistance, is provided to producers of agricultural
commodities; and
(ii) a conservation program administered by the
Secretary.
(B) EXCLUSIONS.—The term ‘‘covered program’’ does
not include—
(i) an agricultural credit program carried out under
the Consolidated Farm and Rural Development Act
(7 U.S.C. 1921 et seq.); or
(ii) the crop insurance program carried out under
the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).
(3) PARTICIPANT.—The term ‘‘participant’’ means a partici-
pant in a covered program.
(4) STATE CONSERVATIONIST.—The term ‘‘State Conserva-
tionist’’ means the State Conservationist with respect to a
program administered by the Natural Resources Conservation
Service.
(5) STATE
DIRECTOR.—The term ‘‘State Director’’ means
the State Executive Director of the Farm Service Agency with
respect to a program administered by the Farm Service Agency.
(b) EQUITABLE RELIEF.—The Secretary may provide relief to
any participant that is determined to be not in compliance with
the requirements of a covered program, and therefore ineligible
H. R. 2646—87
for a loan, payment, or other benefit under the covered program,
if the participant—
(1) acting in good faith, relied on the action or advice
of the Secretary (including any authorized representative of
the Secretary) to the detriment of the participant; or
(2) failed to comply fully with the requirements of the
covered program, but made a good faith effort to comply with
the requirements.
(c) FORMS OF RELIEF.—The Secretary may authorize a partici-
pant in a covered program to—
(1) retain loans, payments, or other benefits received under
the covered program;
(2) continue to receive loans, payments, and other benefits
under the covered program;
(3) continue to participate, in whole or in part, under
any contract executed under the covered program;
(4) in the case of a conservation program, reenroll all
or part of the land covered by the program; and
(5) receive such other equitable relief as the Secretary
determines to be appropriate.
(d) REMEDIAL ACTION.—As a condition of receiving relief under
this section, the Secretary may require the participant to take
actions designed to remedy any failure to comply with the covered
program.
(e) EQUITABLE RELIEF BY STATE DIRECTORS AND STATE CON-
SERVATIONISTS.—
(1) IN GENERAL.—A State Director, in the case of programs
administered by the State Director, and the State Conserva-
tionist, in the case of programs administered by the State
Conservationist, may grant relief to a participant in accordance
with subsections (b) through (d) if—
(A) the amount of loans, payments, and benefits for
which relief will be provided to the participant under this
subsection is less than $20,000;
(B) the total amount of loans, payments, and benefits
for which relief has been previously provided to the partici-
pant under this subsection is not more than $5,000; and
(C) the total amount of loans, payments, and benefits
for which relief is provided to similarly situated partici-
pants under this subsection is not more than $1,000,000,
as determined by the Secretary.
(2) CONSULTATION, APPROVAL, AND REVERSAL.—The decision
by a State Director or State Conservationist to grant relief
under this subsection—
(A) shall not require prior approval by the Adminis-
trator of the Farm Service Agency, the Chief of the Natural
Resources Conservation Service, or any other officer or
employee of the Agency or Service;
(B) shall be made only after consultation with, and
the approval of, the Office of General Counsel of the Depart-
ment of Agriculture; and
(C) is subject to reversal only by the Secretary (who
may not delegate the reversal authority).
(3) NONAPPLICABILITY.—The authority of a State Director
or State Conservationist under this subsection does not apply
to the administration of—
(A) payment limitations under—
H. R. 2646—88
(i) sections 1001 through 1001F of the Food Secu-
rity Act of 1985 (7 U.S.C. 1308 et seq.); or
(ii) a conservation program administered by the
Secretary.
(B) highly erodible land and wetland conservation
requirements under subtitle B or C of title XII of the
Food Security Act of 1985 (16 U.S.C. 3811 et seq.).
(4) OTHER AUTHORITY.—The authority provided to a State
Director and State Conservationist under this subsection is
in addition to any other applicable authority and does not
limit other authority provided by law or the Secretary.
(f) JUDICIAL REVIEW.—A discretionary decision by the Secretary,
the State Director, or the State Conservationist under this section
shall be final, and shall not be subject to review under chapter
7 of title 5, United States Code.
(g) REPORTS.—Not later than February 1 of each year, the
Secretary shall submit to the Committee on Agriculture of the
House of Representatives and the Committee on Agriculture, Nutri-
tion, and Forestry of the Senate a report that describes for the
previous calendar year—
(1) the number of requests for equitable relief under sub-
sections (b) and (e) and the disposition of the requests; and
(2) the number of requests for equitable relief under section
278(d) of the Department of Agriculture Reorganization Act
of 1994 (7 U.S.C. 6998(d)) and the disposition of the requests.
(h) RELATIONSHIP TO OTHER LAW.—The authority provided in
this section is in addition to any other authority provided in this
or any other Act.
(i) FINALITY RULE.—Section 281(a) of the Department of Agri-
culture Reorganization Act of 1994 (7 U.S.C. 7001(a)) is amended—
(1) by striking ‘‘Consolidated Farm Service Agency’’ each
place it appears and inserting ‘‘Farm Service Agency’’;
(2) in paragraph (1)—
(A) by striking ‘‘This subsection’’ and inserting the
following:
‘‘(A) IN GENERAL.—Except as provided in subparagraph
(B), this subsection’’; and
(B) by adding at the end the following:
‘‘(B) NONAPPLICABILITY.—This subsection does not
apply to—
‘‘(i) a function performed under section 376 of the
Consolidated Farm and Rural Development Act; or
‘‘(ii) a function performed under a conservation
program administered by the Natural Resources Con-
servation Service.’’; and
(3) in paragraph (2), by inserting ‘‘, before the end of
the 90-day period,’’ after ‘‘unless the decision’’.
(j) CONFORMING AMENDMENTS.—
(1) Section 326 of the Food and Agriculture Act of 1962
(7 U.S.C. 1339a) is repealed.
(2) Section 278(d) of the Department of Agriculture Reorga-
nization Act of 1994 (7 U.S.C. 6998(d)) is amended in the
first sentence by striking ‘‘section 326 of the Food and Agri-
culture Act of 1962 (7 U.S.C. 1339a)’’ and inserting ‘‘section
1613 of the Farm Security and Rural Investment Act of 2002’’.
(3) Section 1230A of the Food Security Act of 1985 (16
U.S.C. 3830a) is repealed.
H. R. 2646—89
SEC. 1614. TRACKING OF BENEFITS.
As soon as practicable after the date of enactment of this
Act, the Secretary shall establish procedures to track the benefits
provided, directly or indirectly, to individuals and entities under
titles I and II and the amendments made by those titles.
SEC. 1615. ESTIMATES OF NET FARM INCOME.
In each issuance of projections of net farm income, the Secretary
shall include (as determined by the Secretary)—
(1) an estimate of the net farm income earned by commer-
cial producers in the United States; and
(2) an estimate of the net farm income attributable to
commercial producers of each of the following:
(A) Livestock.
(B) Loan commodities.
(C) Agricultural commodities other than loan commod-
ities.
SEC. 1616. AVAILABILITY OF INCENTIVE PAYMENTS FOR CERTAIN PRO-
DUCERS.
(a) INCENTIVE PAYMENTS REQUIRED.—Subject to subsection (b),
the Secretary shall make available a total of $20,000,000 of funds
of the Commodity Credit Corporation during the 2003 through
2005 crop years to provide incentive payments to producers of
hard white wheat.
(b) CONDITIONS
ON IMPLEMENTATION.—The Secretary shall
implement subsection (a)—
(1) only with regard to production that meets minimum
quality criteria; and
(2) on not more than 2,000,000 acres or the equivalent
volume of production.
(c) DEMAND FOR WHEAT.—To be eligible to obtain an incentive
payment under subsection (a), a producer shall demonstrate to
the satisfaction of the Secretary that buyers and end-users are
available for the wheat to be covered by the incentive payment.
SEC. 1617. RENEWED AVAILABILITY OF MARKET LOSS ASSISTANCE
AND CERTAIN EMERGENCY ASSISTANCE TO PERSONS
THAT FAILED TO RECEIVE ASSISTANCE UNDER EARLIER
AUTHORITIES.
(a) AUTHORITY TO PROVIDE ASSISTANCE.—The Secretary of Agri-
culture may use such funds of the Commodity Credit Corporation
as are necessary to provide market loss assistance and other emer-
gency assistance under a provision of law specified in subsection
(c) to persons that, as determined by the Secretary)—
(1) were eligible to receive the assistance under the provi-
sion of law; but
(2) did not receive the assistance before October 1, 2001.
(b) LIMITATION.—The amount of assistance provided under a
provision of law specified in subsection (c) and this section to
a person shall not exceed the amount of assistance the person
would have been eligible to receive under the provision had the
claim of the producer under the provision been timely resolved.
(c) COVERED MARKET LOSS ASSISTANCE AUTHORITIES.—The fol-
lowing provisions of law are covered by this section:
(1) Sections 1, 2, 3, 4, and 5 of Public Law 107–25 (115
Stat. 201).
H. R. 2646—90
(2) Sections 805, 806, and 814 of the Agriculture, Rural
Development, Food and Drug Administration, and Related
Agencies Appropriations Act, 2001 (as enacted into law by
Public Law 106–387; 114 Stat. 1549).
(3) Sections 201, 202, 204(a), 204(d), 257, and 259 of the
Agricultural Risk Protection Act of 2000 (Public Law 106–
224; 7 U.S.C. 1421 note).
(4) Sections 802, 803(a), 804, and 805 of the Agriculture,
Rural Development, Food and Drug Administration, and
Related Agencies Appropriations Act, 2000 (Public Law 106–
78; 113 Stat. 1135).
(5) The livestock indemnity program under the heading
‘‘COMMODITY CREDIT CORPORATION FUND’’ in chapter 1 of title
I of the 1999 Emergency Supplemental Appropriations Act
(Public 106–31; 113 Stat. 59).
(6) Section 1111(a) of the Agriculture, Rural Development,
Food and Drug Administration, and Related Agencies Appro-
priations Act, 1999 (as contained in section 101(a) of division
A of Public Law 105–277; 112 Stat. 2681–44).
SEC. 1618. PRODUCER RETENTION OF ERRONEOUSLY PAID LOAN DEFI-
CIENCY PAYMENTS AND MARKETING LOAN GAINS.
Notwithstanding any other provision of law, the Secretary and
the Commodity Credit Corporation shall not require producers in
Erie County, Pennsylvania, to repay loan deficiency payments and
marketing loan gains erroneously paid or determined to have been
earned by the Commodity Credit Corporation for certain 1998 and
1999 crops under subtitle C of title I of the Federal Agriculture
Improvement and Reform Act of 1996 (7 U.S.C. 7231 et seq.).
In the case of a producer who has already made the repayment
on or before the date of the enactment of this Act, the Commodity
Credit Corporation shall reimburse the producer for the full amount
of the repayment.
TITLE II—CONSERVATION
Subtitle A—Conservation Security
SEC. 2001. CONSERVATION SECURITY PROGRAM.
(a) IN GENERAL.—Subtitle D of title XII of the Food Security
Act of 1985 (16 U.S.C. 3830 et seq.) is amended by inserting
after chapter 1 the following:
‘‘CHAPTER 2—CONSERVATION SECURITY AND
FARMLAND PROTECTION
‘‘Subchapter A—Conservation Security Program
‘‘SEC. 1238. DEFINITIONS.
‘‘In this subchapter:
‘‘(1) BASE PAYMENT.—The term ‘base payment’ means an
amount that is—
‘‘(A) determined in accordance with the rate described
in section 1238C(b)(1)(A); and
H. R. 2646—91
‘‘(B) paid to a producer under a conservation security
contract in accordance with clause (i) of subparagraph (C),
(D), or (E) of section 1238C(b)(1), as appropriate.
‘‘(2) BEGINNING FARMER OR RANCHER.—The term ‘beginning
farmer or rancher’ has the meaning given the term under
section 343(a) of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1991(a)).
‘‘(3) CONSERVATION
PRACTICE.—The term ‘conservation
practice’ means a conservation farming practice described in
section 1238A(d)(4) that—
‘‘(A) requires planning, implementation, management,
and maintenance; and
‘‘(B) promotes 1 or more of the purposes described
in section 1238A(a).
‘‘(4) CONSERVATION SECURITY CONTRACT.—The term ‘con-
servation security contract’ means a contract described in sec-
tion 1238A(e).
‘‘(5) CONSERVATION SECURITY PLAN.—The term ‘conserva-
tion security plan’ means a plan described in section 1238A(c).
‘‘(6) CONSERVATION
SECURITY
PROGRAM.—The term ‘con-
servation security program’ means the program established
under section 1238A(a).
‘‘(7) ENHANCED PAYMENT.—The term ‘enhanced payment’
means the amount paid to a producer under a conservation
security contract that is equal to the amount described in
section 1238C(b)(1)(C)(iii).
‘‘(8) NONDEGRADATION STANDARD.—The term ‘nondegrada-
tion standard’ means the level of measures required to ade-
quately protect, and prevent degradation of, 1 or more natural
resources, as determined by the Secretary in accordance with
the quality criteria described in handbooks of the Natural
Resources Conservation Service.
‘‘(9) PRODUCER.—
‘‘(A) IN
GENERAL.—The term ‘producer’ means an
owner, operator, landlord, tenant, or sharecropper that—
‘‘(i) shares in the risk of producing any crop or
livestock; and
‘‘(ii) is entitled to share in the crop or livestock
available for marketing from a farm (or would have
shared had the crop or livestock been produced).
‘‘(B) HYBRID SEED GROWERS.—In determining whether
a grower of hybrid seed is a producer, the Secretary shall
not take into consideration the existence of a hybrid seed
contract.
‘‘(10) RESOURCE-CONSERVING
CROP
ROTATION.—The term
‘resource-conserving crop rotation’ means a crop rotation that—
‘‘(A) includes at least 1 resource-conserving crop (as
defined by the Secretary);
‘‘(B) reduces erosion;
‘‘(C) improves soil fertility and tilth;
‘‘(D) interrupts pest cycles; and
‘‘(E) in applicable areas, reduces depletion of soil mois-
ture (or otherwise reduces the need for irrigation).
‘‘(11) RESOURCE MANAGEMENT SYSTEM.—The term ‘resource
management system’ means a system of conservation practices
and management relating to land or water use that is designed
to prevent resource degradation and permit sustained use of
H. R. 2646—92
land, water, and other natural resources, as defined in accord-
ance with the technical guide of the Natural Resources Con-
servation Service.
‘‘(12) SECRETARY.—The term ‘Secretary’ means the Sec-
retary of Agriculture, acting through the Chief of the Natural
Resources Conservation Service.
‘‘(13) TIER I CONSERVATION SECURITY CONTRACT.—The term
‘Tier I conservation security contract’ means a contract
described in section 1238A(d)(5)(A).
‘‘(14) TIER II CONSERVATION SECURITY CONTRACT.—The term
‘Tier II conservation security contract’ means a contract
described in section 1238A(d)(5)(B).
‘‘(15) TIER
III
CONSERVATION
SECURITY
CONTRACT.—The
term ‘Tier III conservation security contract’ means a contract
described in section 1238A(d)(5)(C).
‘‘SEC. 1238A. CONSERVATION SECURITY PROGRAM.
‘‘(a) IN GENERAL.—The Secretary shall establish and, for each
of fiscal years 2003 through 2007, carry out a conservation security
program to assist producers of agricultural operations in promoting,
as is applicable with respect to land to be enrolled in the program,
conservation and improvement of the quality of soil, water, air,
energy, plant and animal life, and any other conservation purposes,
as determined by the Secretary.
‘‘(b) ELIGIBILITY.—
‘‘(1) ELIGIBLE
PRODUCERS.—To be eligible to participate
in the conservation security program (other than to receive
technical assistance under section 1238C(g) for the development
of conservation security contracts), a producer shall—
‘‘(A) develop and submit to the Secretary, and obtain
the approval of the Secretary of, a conservation security
plan that meets the requirements of subsection (c)(1); and
‘‘(B) enter into a conservation security contract with
the Secretary to carry out the conservation security plan.
‘‘(2) ELIGIBLE LAND.—Except as provided in paragraph (3),
private agricultural land (including cropland, grassland, prairie
land, improved pasture land, and rangeland), land under the
jurisdiction of an Indian tribe (as defined by the Secretary),
and forested land that is an incidental part of an agricultural
operation shall be eligible for enrollment in the conservation
security program.
‘‘(3) EXCLUSIONS.—
‘‘(A) CONSERVATION RESERVE PROGRAM.—Land enrolled
in the conservation reserve program under subchapter B
of chapter 1 shall not be eligible for enrollment in the
conservation security program.
‘‘(B) WETLANDS RESERVE PROGRAM.—Land enrolled in
the wetlands reserve program established under subchapter
C of chapter 1 shall not be eligible for enrollment in the
conservation security program.
‘‘(C) GRASSLAND RESERVE PROGRAM.—Land enrolled in
the grassland reserve program established under sub-
chapter C of chapter 2 shall not be eligible for enrollment
in the conservation security program.
‘‘(D) CONVERSION TO CROPLAND.—Land that is used
for crop production after the date of enactment of this
subchapter that had not been planted, considered to be
H. R. 2646—93
planted, or devoted to crop production for at least 4 of
the 6 years preceding that date (except for land enrolled
in the conservation reserve program under subchapter B
of chapter 1) or that has been maintained using long-
term crop rotation practices, as determined by the Sec-
retary, shall not be the basis for any payment under the
conservation security program.
‘‘(4) ECONOMIC USES.—The Secretary shall permit a pro-
ducer to implement, with respect to all eligible land covered
by a conservation security plan, economic uses that—
‘‘(A) maintain the agricultural nature of the land; and
‘‘(B) are consistent with the natural resource and con-
servation objectives of the conservation security program.
‘‘(c) CONSERVATION SECURITY PLANS.—
‘‘(1) IN GENERAL.—A conservation security plan shall—
‘‘(A) identify the designated land and resources to be
conserved under the conservation security plan;
‘‘(B) describe the tier of conservation security contract,
and the particular conservation practices to be imple-
mented, maintained, or improved, in accordance with sub-
section (d) on the land covered by the conservation security
contract for the specified term; and
‘‘(C) contain a schedule for the implementation, mainte-
nance, or improvement of the conservation practices
described in the conservation security plan during the term
of the conservation security contract.
‘‘(2) RESOURCE PLANNING.—The Secretary may assist pro-
ducers that enter into conservation security contracts in devel-
oping a comprehensive, long-term strategy for improving and
maintaining all natural resources of the agricultural operation
of the producer.
‘‘(d) CONSERVATION CONTRACTS AND PRACTICES.—
‘‘(1) IN GENERAL.—
‘‘(A) ESTABLISHMENT OF TIERS.—The Secretary shall
establish, and offer to eligible producers, 3 tiers of conserva-
tion contracts under which a payment under this sub-
chapter may be received.
‘‘(B) ELIGIBLE CONSERVATION PRACTICES.—
‘‘(i) IN
GENERAL.—The Secretary shall make
eligible for payment under a conservation security con-
tract land management, vegetative, and structural
practices.
‘‘(ii) DETERMINATION.—In determining the eligi-
bility of a practice described in clause (i), the Secretary
shall require, to the maximum extent practicable, that
the lowest cost alternatives be used to fulfill the pur-
poses of the conservation security plan, as determined
by the Secretary.
‘‘(2) ON-FARM
RESEARCH
AND
DEMONSTRATION
OR
PILOT
TESTING.—With respect to land enrolled in the conservation
security program, the Secretary may approve a conservation
security plan that includes—
‘‘(A) on-farm conservation research and demonstration
activities; and
‘‘(B) pilot testing of new technologies or innovative
conservation practices.
H. R. 2646—94
‘‘(3) USE OF HANDBOOK AND GUIDES; STATE AND LOCAL CON-
SERVATION CONCERNS.—
‘‘(A) USE OF HANDBOOK AND GUIDES.—In determining
eligible conservation practices and the criteria for imple-
menting or maintaining the conservation practices under
the conservation security program, the Secretary shall use
the National Handbook of Conservation Practices of the
Natural Resources Conservation Service.
‘‘(B) STATE AND LOCAL CONSERVATION PRIORITIES.—The
conservation priorities of a State or locality in which an
agricultural operation is situated shall be determined by
the State Conservationist, in consultation with—
‘‘(i) the State technical committee established
under subtitle G; and
‘‘(ii) local agricultural producers and conservation
working groups.
‘‘(4) CONSERVATION
PRACTICES.—Conservation practices
that may be implemented by a producer under a conservation
security contract (as appropriate for the agricultural operation
of a producer) include—
‘‘(A) nutrient management;
‘‘(B) integrated pest management;
‘‘(C) water conservation (including through irrigation)
and water quality management;
‘‘(D) grazing, pasture, and rangeland management;
‘‘(E) soil conservation, quality, and residue manage-
ment;
‘‘(F) invasive species management;
‘‘(G) fish and wildlife habitat conservation, restoration,
and management;
‘‘(H) air quality management;
‘‘(I) energy conservation measures;
‘‘(J) biological resource conservation and regeneration;
‘‘(K) contour farming;
‘‘(L) strip cropping;
‘‘(M) cover cropping;
‘‘(N) controlled rotational grazing;
‘‘(O) resource-conserving crop rotation;
‘‘(P) conversion of portions of cropland from a soil-
depleting use to a soil-conserving use, including production
of cover crops;
‘‘(Q) partial field conservation practices;
‘‘(R) native grassland and prairie protection and res-
toration; and
‘‘(S) any other conservation practices that the Secretary
determines to be appropriate and comparable to other con-
servation practices described in this paragraph.
‘‘(5) TIERS.—Subject to paragraph (6), to carry out this
subsection, the Secretary shall establish the following 3 tiers
of conservation contracts:
‘‘(A) TIER
I
CONSERVATION
SECURITY
CONTRACTS.—A
conservation security plan for land enrolled under a Tier
I conservation security contract shall—
‘‘(i) be for a period of 5 years; and
‘‘(ii) include conservation practices appropriate for
the agricultural operation, that, at a minimum (as
determined by the Secretary)—
H. R. 2646—95
‘‘(I) address at least 1 significant resource of
concern for the enrolled portion of the agricultural
operation at a level that meets the appropriate
nondegradation standard; and
‘‘(II) cover active management of conservation
practices that are implemented or maintained
under the conservation security contract.
‘‘(B) TIER II CONSERVATION SECURITY CONTRACTS.—A
conservation security plan for land enrolled under a Tier
II conservation security contract shall—
‘‘(i) be for a period of not less than 5 nor more
than 10 years, as determined by the producer;
‘‘(ii) include conservation practices appropriate for
the agricultural operation, that, at a minimum—
‘‘(I) address at least 1 significant resource of
concern for the entire agricultural operation, as
determined by the Secretary, at a level that meets
the appropriate nondegradation standard; and
‘‘(II) cover active management of conservation
practices that are implemented or maintained
under the conservation security contract.
‘‘(C) TIER III CONSERVATION SECURITY CONTRACTS.—A
conservation security plan for land enrolled under a Tier
III conservation security contract shall—
‘‘(i) be for a period of not less than 5 nor more
than 10 years, as determined by the producer; and
‘‘(ii) include conservation practices appropriate for
the agricultural operation that, at a minimum—
‘‘(I) apply a resource management system that
meets the appropriate nondegradation standard for
all resources of concern of the entire agricultural
operation, as determined by the Secretary; and
‘‘(II) cover active management of conservation
practices that are implemented or maintained
under the conservation security contract.
‘‘(6) MINIMUM
REQUIREMENTS.—The minimum require-
ments for each tier of conservation contracts implemented
under paragraph (5) shall be determined and approved by the
Secretary.
‘‘(e) CONSERVATION SECURITY CONTRACTS.—
‘‘(1) IN GENERAL.—On approval of a conservation security
plan of a producer, the Secretary shall enter into a conservation
security contract with the producer to enroll the land covered
by the conservation security plan in the conservation security
program.
‘‘(2) MODIFICATION.—
‘‘(A) OPTIONAL MODIFICATIONS.—A producer may apply
to the Secretary for a modification of the conservation
security contract of the producer that is consistent with
the purposes of the conservation security program.
‘‘(B) OTHER MODIFICATIONS.—
‘‘(i) IN GENERAL.—The Secretary may, in writing,
require a producer to modify a conservation security
contract before the expiration of the conservation secu-
rity contract if the Secretary determines that a change
made to the type, size, management, or other aspect
of the agricultural operation of the producer would,
H. R. 2646—96
without the modification of the contract, significantly
interfere with achieving the purposes of the conserva-
tion security program.
‘‘(ii) PARTICIPATION IN OTHER PROGRAMS.—If appro-
priate payment reductions and other adjustments (as
determined by the Secretary) are made to the conserva-
tion security contract of a producer, the producer
may—
‘‘(I) simultaneously participate in—
‘‘(aa) the conservation security program;
‘‘(bb) the conservation reserve program
under subchapter B of chapter 1; and
‘‘(cc) the wetlands reserve program under
subchapter C of chapter 1; and
‘‘(II) may remove land enrolled in the conserva-
tion security program for enrollment in a program
described in item (bb) or (cc) of subclause (I).
‘‘(3) TERMINATION.—
‘‘(A) OPTIONAL TERMINATION.—A producer may termi-
nate a conservation security contract and retain payments
received under the conservation security contract, if—
‘‘(i) the producer is in full compliance with the
terms and conditions (including any maintenance
requirements) of the conservation security contract as
of the date of the termination; and
‘‘(ii) the Secretary determines that termination of
the contract would not defeat the purposes of the con-
servation security plan of the producer.
‘‘(B) OTHER TERMINATION.—A producer that is required
to modify a conservation security contract under paragraph
(2)(B)(i) may, in lieu of modifying the contract—
‘‘(i) terminate the conservation security contract;
and
‘‘(ii) retain payments received under the conserva-
tion security contract, if the producer has fully com-
plied with the terms and conditions of the conservation
security contract before termination of the contract,
as determined by the Secretary.
‘‘(4) RENEWAL.—
‘‘(A) IN GENERAL.—Except as provided in subparagraph
(B), at the option of a producer, the conservation security
contract of the producer may be renewed for an additional
period of not less than 5 nor more than 10 years.
‘‘(B) TIER I RENEWALS.—In the case of a Tier I conserva-
tion security contract of a producer, the producer may
renew the contract only if the producer agrees—
‘‘(i) to apply additional conservation practices that
meet the nondegradation standard on land already
enrolled in the conservation security program; or
‘‘(ii) to adopt new conservation practices with
respect to another portion of the agricultural operation
that address resource concerns and meet the nondeg-
radation standard under the terms of the Tier I con-
servation security contract.
‘‘(f) NONCOMPLIANCE DUE TO CIRCUMSTANCES BEYOND THE CON-
TROL OF PRODUCERS.—The Secretary shall include in the conserva-
tion security contract a provision, and may permit modification
H. R. 2646—97
of a conservation security contract under subsection (e)(1), to ensure
that a producer shall not be considered in violation of a conservation
security contract for failure to comply with the conservation security
contract due to circumstances beyond the control of the producer,
including a disaster or related condition, as determined by the
Secretary.
‘‘SEC. 1238B. DUTIES OF PRODUCERS.
‘‘Under a conservation security contract, a producer shall agree,
during the term of the conservation security contract—
‘‘(1) to implement the applicable conservation security plan
approved by the Secretary;
‘‘(2) to maintain, and make available to the Secretary at
such times as the Secretary may request, appropriate records
showing the effective and timely implementation of the con-
servation security plan;
‘‘(3) not to engage in any activity that would interfere
with the purposes of the conservation security program; and
‘‘(4) on the violation of a term or condition of the conserva-
tion security contract—
‘‘(A) if the Secretary determines that the violation war-
rants termination of the conservation security contract—
‘‘(i) to forfeit all rights to receive payments under
the conservation security contract; and
‘‘(ii) to refund to the Secretary all or a portion
of the payments received by the producer under the
conservation security contract, including any advance
payments and interest on the payments, as determined
by the Secretary; or
‘‘(B) if the Secretary determines that the violation does
not warrant termination of the conservation security con-
tract, to refund to the Secretary, or accept adjustments
to, the payments provided to the producer, as the Secretary
determines to be appropriate.
‘‘SEC. 1238C. DUTIES OF THE SECRETARY.
‘‘(a) TIMING OF PAYMENTS.—The Secretary shall make payments
under a conservation security contract as soon as practicable after
October 1 of each fiscal year.
‘‘(b) ANNUAL PAYMENTS.—
‘‘(1) CRITERIA FOR DETERMINING AMOUNT OF PAYMENTS.—
‘‘(A) BASE PAYMENT.—A base payment under this para-
graph shall be (as determined by the Secretary)—
‘‘(i) the average national per-acre rental rate for
a specific land use during the 2001 crop year; or
‘‘(ii) another appropriate rate for the 2001 crop
year that ensures regional equity.
‘‘(B) PAYMENTS.—A payment for a conservation practice
under this paragraph shall be determined in accordance
with subparagraphs (C) through (E).
‘‘(C) TIER I CONSERVATION SECURITY CONTRACTS.—The
payment for a Tier I conservation security contract shall
consist of the total of the following amounts:
‘‘(i) An amount equal to 5 percent of the applicable
base payment for land covered by the contract.
‘‘(ii) An amount that does not exceed 75 percent
(or, in the case of a beginning farmer or rancher,
90 percent) of the average county costs of practices
H. R. 2646—98
for the 2001 crop year that are included in the con-
servation security contract, as determined by the Sec-
retary, including the costs of—
‘‘(I) the adoption of new management, vegeta-
tive, and land-based structural practices;
‘‘(II) the maintenance of existing land manage-
ment and vegetative practices; and
‘‘(III) the maintenance of existing land-based
structural practices that are approved by the Sec-
retary but not already covered by a Federal or
State maintenance requirement.
‘‘(iii) An enhanced payment that is determined by
the Secretary in a manner that ensures equity across
regions of the United States, if the producer—
‘‘(I) implements or maintains multiple con-
servation practices that exceed minimum require-
ments for the applicable tier of participation
(including practices that involve a change in land
use, such as resource-conserving crop rotation,
managed rotational grazing, or conservation buffer
practices);
‘‘(II) addresses local conservation priorities in
addition to resources of concern for the agricultural
operation;
‘‘(III) participates in an on-farm conservation
research, demonstration, or pilot project;
‘‘(IV) participates in a watershed or regional
resource conservation plan that involves at least
75 percent of producers in a targeted area; or
‘‘(V) carries out assessment and evaluation
activities relating to practices included in a con-
servation security plan.
‘‘(D) TIER II CONSERVATION SECURITY CONTRACTS.—The
payment for a Tier II conservation security contract shall
consist of the total of the following amounts:
‘‘(i) An amount equal to 10 percent of the applicable
base payment for land covered by the conservation
security contract.
‘‘(ii) An amount that does not exceed 75 percent
(or, in the case of a beginning farmer or rancher,
90 percent) of the average county cost of adopting
or maintaining practices for the 2001 crop year that
are included in the conservation security contract, as
described in subparagraph (C)(ii).
‘‘(iii) An enhanced payment that is determined in
accordance with subparagraph (C)(iii).
‘‘(E) TIER III CONSERVATION SECURITY CONTRACTS.—The
payment for a Tier III conservation security contract shall
consist of the total of the following amounts:
‘‘(i) An amount equal to 15 percent of the base
payment for land covered by the conservation security
contract.
‘‘(ii) An amount that does not exceed 75 percent
(or, in the case of a beginning farmer or rancher,
90 percent) of the average county cost of adopting
or maintaining practices for the 2001 crop year that
H. R. 2646—99
are included in the conservation security contract, as
described in subparagraph (C)(ii).
‘‘(iii) An enhanced payment that is determined in
accordance with subparagraph (C)(iii).
‘‘(2) LIMITATION ON PAYMENTS.—
‘‘(A) IN GENERAL.—Subject to paragraphs (1) and (3),
the Secretary shall make an annual payment, directly or
indirectly, to an individual or entity covered by a conserva-
tion security contract in an amount not to exceed—
‘‘(i) in the case of a Tier I conservation security
contract, $20,000;
‘‘(ii) in the case of a Tier II conservation security
contract, $35,000; or
‘‘(iii) in the case of a Tier III conservation security
contract, $45,000.
‘‘(B) LIMITATION ON BASE PAYMENTS.—In applying the
payment limitation under each of clauses (i), (ii), and (iii)
of subparagraph (A), an individual or entity may not
receive, directly or indirectly, payments described in clause
(i) of paragraph (1)(C), (1)(D), or (1)(E), as appropriate,
in an amount that exceeds—
‘‘(i) in the case of Tier I contracts, 25 percent
of the applicable payment limitation; or
‘‘(ii) in the case of Tier II contracts and Tier III
contracts, 30 percent of the applicable payment limita-
tion.
‘‘(C) OTHER
USDA
PAYMENTS.—A producer shall not
receive payments under the conservation security program
and any other conservation program administered by the
Secretary for the same practices on the same land.
‘‘(D) COMMENSURATE SHARE.—To be eligible to receive
a payment under this subchapter, an individual or entity
shall make contributions (including contributions of land,
labor, management, equipment, or capital) to the operation
of the farm that are at least commensurate with the share
of the proceeds of the operation of the individual or entity.
‘‘(3) EQUIPMENT OR FACILITIES.—A payment to a producer
under this subchapter shall not be provided for—
‘‘(A) construction or maintenance of animal waste stor-
age or treatment facilities or associated waste transport
or transfer devices for animal feeding operations; or
‘‘(B) the purchase or maintenance of equipment or a
non-land based structure that is not integral to a land-
based practice, as determined by the Secretary.
‘‘(c) MINIMUM PRACTICE REQUIREMENT.—In determining a pay-
ment under subsection (b) for a producer that receives a payment
under another program administered by the Secretary that is
contingent on complying with requirements under subtitle B or
C (relating to the use of highly erodible land or wetland), a payment
under this subchapter on land subject to those requirements shall
be for practices only to the extent that the practices exceed min-
imum requirements for the producer under those subtitles, as deter-
mined by the Secretary.
‘‘(d) REGULATIONS.—The Secretary shall promulgate regulations
that—
H. R. 2646—100
‘‘(1) provide for adequate safeguards to protect the interests
of tenants and sharecroppers, including provision for sharing
payments, on a fair and equitable basis; and
‘‘(2) prescribe such other rules as the Secretary determines
to be necessary to ensure a fair and reasonable application
of the limitations established under subsection (b).
‘‘(e) TRANSFER OR CHANGE OF INTEREST IN LAND SUBJECT TO
CONSERVATION SECURITY CONTRACT.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
the transfer, or change in the interest, of a producer in land
subject to a conservation security contract shall result in the
termination of the conservation security contract.
‘‘(2) TRANSFER OF DUTIES AND RIGHTS.—Paragraph (1) shall
not apply if, not later than 60 days after the date of the
transfer or change in the interest in land, the transferee of
the land provides written notice to the Secretary that all duties
and rights under the conservation security contract have been
transferred to, and assumed by, the transferee.
‘‘(f) ENROLLMENT PROCEDURE.—In entering into conservation
security contracts with producers under this subchapter, the Sec-
retary shall not use competitive bidding or any similar procedure.
‘‘(g) TECHNICAL ASSISTANCE.—For each of fiscal years 2003
through 2007, the Secretary shall provide technical assistance to
producers for the development and implementation of conservation
security contracts, in an amount not to exceed 15 percent of amounts
expended for the fiscal year.’’.
(b) REGULATIONS.—Not later than 270 days after the date of
enactment of this Act, the Secretary of Agriculture shall promulgate
regulations implementing the amendment made by subsection (a).
SEC. 2002. CONSERVATION COMPLIANCE.
(a) HIGHLY ERODIBLE LAND.—Section 1211 of the Food Security
Act of 1985 (16 U.S.C. 3811) is amended—
(1) by striking the section heading and all that follows
through ‘‘Except as provided in’’ and inserting the following:
‘‘SEC. 1211. PROGRAM INELIGIBILITY.
‘‘(a) IN GENERAL.—Except as provided in’’; and
(2) by adding at the end the following:
‘‘(b) HIGHLY ERODIBLE LAND.—The Secretary shall have, and
shall not delegate to any private person or entity, authority to
determine whether a person has complied with this subtitle.’’.
(b) WETLAND.—Section 1221 of the Food Security Act of 1985
(16 U.S.C. 3821) is amended by adding at the end the following:
‘‘(e) WETLAND.—The Secretary shall have, and shall not dele-
gate to any private person or entity, authority to determine whether
a person has complied with this subtitle.’’.
SEC. 2003. PARTNERSHIPS AND COOPERATION.
Section 1243 of the Food Security Act of 1985 (16 U.S.C. 3843)
is amended by adding at the end the following:
‘‘(f) PARTNERSHIPS AND COOPERATION.—
‘‘(1) IN GENERAL.—In carrying out any program under sub-
title D, the Secretary may use resources provided under that
subtitle to enter into stewardship agreements with State and
local agencies, Indian tribes, and nongovernmental organiza-
tions and to designate special projects, as recommended by
the State Conservationist, after consultation with the State
H. R. 2646—101
technical committee, to enhance technical and financial assist-
ance provided to owners, operators, and producers to address
natural resource issues related to agricultural production.
‘‘(2) CRITERIA FOR SPECIAL PROJECTS.—The purposes of spe-
cial projects carried out under this subsection shall be to
encourage—
‘‘(A) producers to cooperate in the installation and
maintenance of conservation practices that affect multiple
agricultural operations;
‘‘(B) the sharing of information and technical and finan-
cial resources among producers;
‘‘(C) cumulative conservation benefits in geographic
areas; and
‘‘(D) the development and demonstration of innovative
conservation methods.
‘‘(3) INCENTIVES.—To realize the purposes of the special
projects under paragraph (1), the Secretary may provide special
incentives to owners, operators, and producers participating
in the special projects to encourage partnerships and enroll-
ments of optimal conservation value.
‘‘(4) FLEXIBILITY.—
‘‘(A) IN
GENERAL.—The Secretary may enter into
stewardship agreements with States (including State agen-
cies and units of local government), Indian tribes, and
nongovernmental organizations that have a history of
working with agricultural producers to allow greater flexi-
bility to adjust the application of eligibility criteria,
approved practices, innovative conservation practices, and
other elements of the programs under this title to better
reflect unique local circumstances and purposes in a
manner that is consistent with—
‘‘(i) conservation enhancement and long-term
productivity of the natural resource base; and
‘‘(ii) the purposes and requirements of this title.
‘‘(B) PLAN.—Each party to a stewardship agreement
under subparagraph (A) shall submit to the Secretary,
for approval by the Secretary, a special project area plan
for each program to be carried out by the party that
includes—
‘‘(i) a description of the requested resources and
adjustments to program implementation (including a
description of how those adjustments will accelerate
the achievement of conservation benefits);
‘‘(ii) an analysis of the contribution those adjust-
ments will make to the effectiveness of programs in
achieving the purposes of the special project;
‘‘(iii) a timetable for reevaluating the need for or
performance of the proposed adjustments;
‘‘(iv) a description of non-Federal programs and
resources that will contribute to achieving the purposes
of the special project; and
‘‘(v) a plan for the evaluation of progress toward
the purposes of the special project.
‘‘(5) FUNDING.—
‘‘(A) IN GENERAL.—In addition to resources from pro-
grams under subtitle D, subject to subparagraph (B), the
Secretary shall use not more than 5 percent of the funds
H. R. 2646—102
made available for each fiscal year under section 1241(a)
to carry out activities that are authorized under conserva-
tion programs under subtitle D.
‘‘(B) UNUSED FUNDING.—Any funds made available for
a fiscal year under subparagraph (A) that are not obligated
by April 1 of the fiscal year may be used to carry out
other activities under conservation programs under subtitle
D during the fiscal year in which the funding becomes
available.’’.
SEC. 2004. ADMINISTRATIVE REQUIREMENTS FOR CONSERVATION
PROGRAMS.
(a) IN GENERAL.—Subtitle E of title XII of the Food Security
Act of 1985 (16 U.S.C. 3841 et seq.) is amended by adding at
the end the following:
‘‘SEC. 1244. ADMINISTRATIVE REQUIREMENTS FOR CONSERVATION
PROGRAMS.
‘‘(a) BEGINNING FARMERS AND RANCHERS AND INDIAN TRIBES.—
In carrying out any conservation program administered by the
Secretary, the Secretary may provide to beginning farmers and
ranchers and Indian tribes (as those terms are defined in section
1238) and limited resource agricultural producers incentives to
participate in the conservation program to—
‘‘(1) foster new farming and ranching opportunities; and
‘‘(2) enhance environmental stewardship over the long term.
‘‘(b) PRIVACY OF PERSONAL INFORMATION RELATING TO NATURAL
RESOURCES CONSERVATION PROGRAMS.—
‘‘(1) INFORMATION RECEIVED FOR TECHNICAL AND FINANCIAL
ASSISTANCE.—
‘‘(A) IN GENERAL.—In accordance with section 552(b)(3)
of title 5, United States Code, except as provided in
subparagraph (C) and paragraph (2), information described
in subparagraph (B)—
‘‘(i) shall not be considered to be public informa-
tion; and
‘‘(ii) shall not be released to any person or Federal,
State, local agency or Indian tribe (as defined by the
Secretary) outside the Department of Agriculture.
‘‘(B) INFORMATION.—The information referred to in
subparagraph (A) is information—
‘‘(i) provided to the Secretary or a contractor of
the Secretary (including information provided under
subtitle D) for the purpose of providing technical or
financial assistance to an owner, operator, or producer
with respect to any natural resources conservation pro-
gram administered by the Natural Resources Conserva-
tion Service or the Farm Service Agency; and
‘‘(ii) that is proprietary (within the meaning of
section 552(b)(4) of title 5, United States Code) to
the agricultural operation or land that is a part of
an agricultural operation of the owner, operator, or
producer.
‘‘(C) EXCEPTION.—Nothing in this section affects the
availability of payment information (including payment
amounts and the names and addresses of recipients of
payments) under section 552 of title 5, United States Code.
‘‘(2) EXCEPTIONS.—
H. R. 2646—103
‘‘(A) RELEASE AND DISCLOSURE FOR ENFORCEMENT.—
The Secretary may release or disclose to the Attorney Gen-
eral information covered by paragraph (1) to the extent
necessary to enforce the natural resources conservation
programs referred to in paragraph (1)(B)(i).
‘‘(B) DISCLOSURE TO COOPERATING PERSONS AND AGEN-
CIES.—
‘‘(i) IN GENERAL.—The Secretary may release or
disclose information covered by paragraph (1) to a per-
son or Federal, State, local, or tribal agency working
in cooperation with the Secretary in providing technical
and financial assistance described in paragraph
(1)(B)(i) or collecting information from data gathering
sites.
‘‘(ii) USE OF INFORMATION.—The person or Federal,
State, local, or tribal agency that receives information
described in clause (i) may release the information
only for the purpose of assisting the Secretary—
‘‘(I) in providing the requested technical or
financial assistance; or
‘‘(II) in collecting information from data gath-
ering sites.
‘‘(C) STATISTICAL
AND
AGGREGATE
INFORMATION.—
Information covered by paragraph (1) may be disclosed
to the public if the information has been transformed into
a statistical or aggregate form without naming any—
‘‘(i) individual owner, operator, or producer; or
‘‘(ii) specific data gathering site.
‘‘(D) CONSENT OF OWNER, OPERATOR, OR PRODUCER.—
‘‘(i) IN GENERAL.—An owner, operator, or producer
may consent to the disclosure of information described
in paragraph (1).
‘‘(ii) CONDITION OF OTHER PROGRAMS.—The partici-
pation of the owner, operator, or producer in, and
the receipt of any benefit by the owner, operator, or
producer under, this title or any other program
administered by the Secretary may not be conditioned
on the owner, operator, or producer providing consent
under this paragraph.
‘‘(3) VIOLATIONS; PENALTIES.—Section 1770(c) shall apply
with respect to the release of information collected in any
manner or for any purpose prohibited by this subsection.
‘‘(4) DATA COLLECTION, DISCLOSURE, AND REVIEW.—Nothing
in this subsection—
‘‘(A) affects any procedure for data collection or disclo-
sure through the National Resources Inventory; or
‘‘(B) limits the authority of Congress or the General
Accounting Office to review information collected or dis-
closed under this subsection.’’.
(b) NATIONAL RESOURCES INVENTORY.—Section 1770 of the Food
Security Act of 1985 (7 U.S.C. 2276) is amended—
(1) in subsection (a)—
(A) in paragraph (1), by striking ‘‘or’’ at the end;
(B) in paragraph (2), by striking the period and
inserting ‘‘; or’’; and
(C) by adding at the end the following:
H. R. 2646—104
‘‘(3) in the case of information collected under the authority
described in subsection (d)(12), disclose the information to any
person or any Federal, State, local, or tribal agency outside
the Department of Agriculture, unless the information has been
converted into a statistical or aggregate form that does not
allow the identification of the person that supplied particular
information.’’; and
(2) in subsection (d)—
(A) in paragraph (9), by striking ‘‘or’’ at the end;
(B) in paragraph (11), by striking the period and
inserting ‘‘; or’’; and
(C) by adding at the end the following:
‘‘(12) section 302 of the Rural Development Act of 1972
(7 U.S.C. 1010a) regarding the authority to collect data for
the National Resources Inventory.’’.
SEC. 2005. REFORM AND ASSESSMENT OF CONSERVATION PROGRAMS.
(a) IN GENERAL.—The Secretary of Agriculture shall develop
a plan to coordinate land retirement and agricultural working land
conservation programs that are administered by the Secretary to
achieve the goals of—
(1) eliminating redundancy;
(2) streamlining program delivery; and
(3) improving services provided to agricultural producers
(including the reevaluation of the provision of technical assist-
ance).
(b) REPORT.—Not later than December 31, 2005, the Secretary
of Agriculture shall submit to the Committee on Agriculture of
the House of Representatives and the Committee on Agriculture,
Nutrition, and Forestry of the Senate, a report that describes—
(1) the plan developed under subsection (a); and
(2) the means by which the Secretary intends to achieve
the goals described in subsection (a).
SEC. 2006. CONFORMING AMENDMENTS.
(a) Chapter 1 of subtitle D of title XII of the Food Security
Act of 1985 (16 U.S.C. 3830 et seq.) is amended by striking the
chapter heading and inserting the following:
‘‘CHAPTER 1—COMPREHENSIVE CONSERVATION
ENHANCEMENT PROGRAM’’.
(b) Section 1230 of the Food Security Act of 1985 (16 U.S.C.
3830) is amended—
(1) in the section heading, by striking ‘‘ENVIRONMENTAL
CONSERVATION ACREAGE RESERVE PROGRAM’’ and inserting
‘‘COMPREHENSIVE CONSERVATION ENHANCEMENT PROGRAM’’;
(2) in subsection (a)(1), by striking ‘‘an environmental con-
servation acreage reserve program’’ and inserting ‘‘a com-
prehensive conservation enhancement program’’;
(3) by striking subsection (c); and
(4) by striking ‘‘ECARP’’ each place it appears and inserting
‘‘CCEP’’.
(c) Section 1230A of the Food Security Act of 1985 (16 U.S.C.
3830a) is repealed.
(d) Section 1243 of the Food Security Act of 1985 (16 U.S.C.
3843) is amended by striking the section heading and inserting
the following:
H. R. 2646—105
‘‘SEC. 1243. ADMINISTRATION OF CCEP.’’.
Subtitle B—Conservation Reserve
SEC. 2101. CONSERVATION RESERVE PROGRAM.
(a) IN GENERAL.—Subchapter B of chapter 1 of subtitle D
of title XII of the Food Security Act of 1985 (16 U.S.C. 3831
et seq.) is amended to read as follows:
‘‘Subchapter B—Conservation Reserve
‘‘SEC. 1231. CONSERVATION RESERVE.
‘‘(a) IN GENERAL.—Through the 2007 calendar year, the Sec-
retary shall formulate and carry out a conservation reserve program
under which land is enrolled through the use of contracts to assist
owners and operators of land specified in subsection (b) to conserve
and improve the soil, water, and wildlife resources of such land.
‘‘(b) ELIGIBLE LAND.—The Secretary may include in the program
established under this subchapter—
‘‘(1) highly erodible cropland that—
‘‘(A)(i) if permitted to remain untreated could substan-
tially reduce the agricultural production capability for
future generations; or
‘‘(ii) cannot be farmed in accordance with a plan that
complies with the requirements of subtitle B; and
‘‘(B) the Secretary determines had a cropping history
or was considered to be planted for 4 of the 6 years pre-
ceding the date of enactment of the Farm Security and
Rural Investment Act of 2002 (except for land enrolled
in the conservation reserve program as of that date).
‘‘(2) marginal pasture land converted to wetland or estab-
lished as wildlife habitat prior to November 28, 1990;
‘‘(3) marginal pasture land to be devoted to appropriate
vegetation, including trees, in or near riparian areas, or devoted
to 
similar 
water 
quality 
purposes 
(including 
marginal
pastureland converted to wetland or established as wildlife
habitat);
‘‘(4) cropland that is otherwise ineligible if the Secretary
determines that—
‘‘(A) if permitted to remain in agricultural production,
the land would—
‘‘(i) contribute to the degradation of soil, water,
or air quality; or
‘‘(ii) pose an on-site or off-site environmental threat
to soil, water, or air quality;
‘‘(B) the land is a—
‘‘(i) newly-created, permanent grass sod waterway;
or
‘‘(ii) a contour grass sod strip established and
maintained as part of an approved conservation plan;
‘‘(C) the land will be devoted to newly established
living snow fences, permanent wildlife habitat, windbreaks,
shelterbelts, or filterstrips devoted to trees or shrubs; or
‘‘(D) the land poses an off-farm environmental threat,
or a threat of continued degradation of productivity due
to soil salinity, if permitted to remain in production; and
H. R. 2646—106
‘‘(E) enrollment of the land would facilitate a net
savings in groundwater or surface water resources of the
agricultural operation of the producer;
‘‘(5) the portion of land in a field not enrolled in the
conservation reserve in a case in which more than 50 percent
of the land in the field is enrolled as a buffer, if—
‘‘(A) the land is enrolled as part of the buffer; and
‘‘(B) the remainder of the field is—
‘‘(i) infeasible to farm; and
‘‘(ii) enrolled at regular rental rates.
‘‘(c) PLANTING STATUS
OF CERTAIN LAND.—For purposes of
determining the eligibility of land to be placed in the conservation
reserve established under this subchapter, land shall be considered
to be planted to an agricultural commodity during a crop year
if—
‘‘(1) during the crop year, the land was devoted to a con-
serving use; or
‘‘(2)(A) during the crop year or during any of the 2 years
preceding the crop year, the land was enrolled in the water
bank program; and
‘‘(B) the contract of the owner or operator of the cropland
expired or will expire in calendar year 2000, 2001, or 2002.
‘‘(d) MAXIMUM ENROLLMENT.—The Secretary may maintain up
to 39,200,000 acres in the conservation reserve at any 1 time
during the 2002 through 2007 calendar years (including contracts
extended by the Secretary pursuant to section 1437(c) of the Food,
Agriculture, Conservation, and Trade Act of 1990 ( 16 U.S.C. 3831
note; Public Law 101–624)).
‘‘(e) DURATION OF CONTRACT.—
‘‘(1) IN GENERAL.—For the purpose of carrying out this
subchapter, the Secretary shall enter into contracts of not less
than 10, nor more than 15, years.
‘‘(2) CERTAIN LAND.—
‘‘(A) IN GENERAL.—In the case of land devoted to hard-
wood trees, shelterbelts, windbreaks, or wildlife corridors
under a contract entered into under this subchapter after
October 1, 1990, and land devoted to such uses under
contracts modified under section 1235A, the owner or oper-
ator of the land may, within the limitations prescribed
under this section, specify the duration of the contract.
‘‘(B) HARDWOOD TREES.—In the case of land that is
devoted to hardwood trees under a contract entered into
under this subchapter prior to October 1, 1990, the Sec-
retary may extend the contract for a term of not to exceed
5 years, as agreed to by the owner or operator of such
land and the Secretary.
‘‘(3) 1-YEAR EXTENSION.—In the case of a contract described
in paragraph (1) the term of which expires during calendar
year 2002, an owner or operator of land enrolled under the
contract may extend the contract for 1 additional year.
‘‘(f) CONSERVATION PRIORITY AREAS.—
‘‘(1) DESIGNATION.—On application by the appropriate State
agency, the Secretary shall designate watershed areas of the
Chesapeake Bay Region (Pennsylvania, Maryland, and Vir-
ginia), the Great Lakes Region, the Long Island Sound Region,
and other areas of special environmental sensitivity as con-
servation priority areas.
H. R. 2646—107
‘‘(2) ELIGIBLE WATERSHEDS.—Watersheds eligible for des-
ignation under this subsection shall include areas with actual
and significant adverse water quality or habitat impacts related
to agricultural production activities.
‘‘(3) EXPIRATION.—Conservation priority area designation
under this subsection shall expire after 5 years, subject to
redesignation, except that the Secretary may withdraw a water-
shed’s designation—
‘‘(A) on application by the appropriate State agency;
or
‘‘(B) in the case of an area covered by this subsection,
if the Secretary finds that the area no longer contains
actual and significant adverse water quality or habitat
impacts related to agricultural production activities.
‘‘(4) DUTY OF SECRETARY.—In carrying out this subsection,
the Secretary shall attempt to maximize water quality and
habitat benefits in the watersheds described in paragraph (1)
by promoting a significant level of enrollment of land within
the watersheds in the program under this subchapter by what-
ever means the Secretary determines are appropriate and con-
sistent with the purposes of this subchapter.
‘‘(g) MULTI-YEAR GRASSES AND LEGUMES.—For purposes of this
subchapter, alfalfa and other multi-year grasses and legumes in
a rotation practice, approved by the Secretary, shall be considered
agricultural commodities.
‘‘(h) PILOT
PROGRAM
FOR
ENROLLMENT
OF
WETLAND
AND
BUFFER ACREAGE IN CONSERVATION RESERVE.—
‘‘(1) PROGRAM.—
‘‘(A) IN GENERAL.—During the 2002 through 2007 cal-
endar years, the Secretary shall carry out a program in
each State under which the Secretary shall include eligible
acreage described in paragraph (2) in the program estab-
lished under this subchapter.
‘‘(B) PARTICIPATION AMONG STATES.-The Secretary shall
ensure, to the maximum extent practicable, that owners
and operators in each State have an equitable opportunity
to participate in the pilot program established under this
subsection.
‘‘(2) ELIGIBLE ACREAGE.—
‘‘(A) IN
GENERAL.—Subject to subparagraphs (B)
through (D), an owner or operator may enroll in the con-
servation reserve under this subsection—
‘‘(i) a wetland (including a converted wetland
described in section 1222(b)(1)(A)) that was cropped
during at least 3 of the immediately preceding 10
crop years; and
‘‘(ii) buffer acreage that—
‘‘(I) is contiguous to the wetland described in
clause (i);
‘‘(II) is used to protect the wetland; and
‘‘(III) is of such width as the Secretary deter-
mines is necessary to protect the wetland, taking
into consideration and accommodating the farming
practices (including the straightening of bound-
aries to accommodate machinery) used with
respect to the cropland that surrounds the wet-
land.
H. R. 2646—108
‘‘(B) EXCLUSIONS.—An owner or operator may not
enroll in the conservation reserve under this subsection—
‘‘(i) any wetland, or land on a floodplain, that
is, or is adjacent to, a perennial riverine system wet-
land identified on the final national wetland inventory
map of the Secretary of the Interior; or
‘‘(ii) in the case of an area that is not covered
by the final national inventory map, any wetland, or
land on a floodplain, that is adjacent to a perennial
stream identified on a 1-24,000 scale map of the United
States Geological Survey.
‘‘(C) PROGRAM LIMITATIONS.—
‘‘(i) IN GENERAL.—The Secretary may enroll in the
conservation reserve under this subsection not more
than—
‘‘(I) 100,000 acres in any 1 State referred to
in paragraph (1); and
‘‘(II) not more than a total of 1,000,000 acres.
‘‘(ii) RELATIONSHIP TO PROGRAM MAXIMUM.—Sub-
ject to clause (iii), for the purposes of subsection (d),
any acreage enrolled in the conservation reserve under
this subsection shall be considered acres maintained
in the conservation reserve.
‘‘(iii) RELATIONSHIP
TO
OTHER
ENROLLED
ACRE-
AGE.—Acreage enrolled under this subsection shall not
affect for any fiscal year the quantity of—
‘‘(I) acreage enrolled to establish conservation
buffers as part of the program announced on
March 24, 1998 (63 Fed. Reg. 14109); or
‘‘(II) acreage enrolled into the conservation
reserve enhancement program announced on May
27, 1998 (63 Fed. Reg. 28965).
‘‘(iv) REVIEW; POTENTIAL INCREASE IN ENROLLMENT
ACREAGE.—Not later than 3 years after the date of
enactment of this clause, the Secretary shall—
‘‘(I) conduct a review of the program under
this subsection with respect to each State that
has enrolled land in the program; and
‘‘(II) notwithstanding clause (i)(I), increase the
number of acres that may be enrolled by a State
under clause (i)(I) to not more than 150,000 acres,
as determined by the Secretary.
‘‘(D) OWNER OR OPERATOR LIMITATIONS.—
‘‘(i) WETLAND.—
‘‘(I) IN GENERAL.—The maximum size of any
wetland described in subparagraph (A)(i) of an
owner or operator enrolled in the conservation
reserve under this subsection shall be 10 contig-
uous acres, of which not more than 5 acres shall
be eligible for payment.
‘‘(II) COVERAGE.—All acres described in sub-
clause (I) (including acres that are ineligible for
payment) shall be covered by the conservation con-
tract.
‘‘(ii) BUFFER ACREAGE.—The maximum size of any
buffer acreage described in subparagraph (A)(ii) of an
H. R. 2646—109
owner or operator enrolled in the conservation reserve
under this subsection shall be the greater of—
‘‘(I) 3 times the size of any wetland described
in subparagraph (A)(i) to which the buffer acreage
is contiguous; or
‘‘(II) 150 feet on either side of the wetland.
‘‘(iii) TRACTS.—The maximum size of any eligible
acreage described in subparagraph (A) in a tract (as
determined by the Secretary) of an owner or operator
enrolled in the conservation reserve under this sub-
section shall be 40 acres.
‘‘(3) DUTIES OF OWNERS AND OPERATORS.—Under a contract
entered into under this subsection, during the term of the
contract, an owner or operator of a farm or ranch shall agree—
‘‘(A) to restore the hydrology of the wetland within
the eligible acreage to the maximum extent practicable,
as determined by the Secretary;
‘‘(B) to establish vegetative cover (which may include
emerging vegetation in water) on the eligible acreage, as
determined by the Secretary; and
‘‘(C) to carry out other duties described in section 1232.
‘‘(4) DUTIES OF THE SECRETARY.—
‘‘(A) IN
GENERAL.—Except as provided in subpara-
graphs (B) and (C), in return for a contract entered into
by an owner or operator under this subsection, the Sec-
retary shall make payments and provide assistance to the
owner or operator in accordance with sections 1233 and
1234.
‘‘(B) CONTINUOUS
SIGNUP.—The Secretary shall use
continuous signup under section 1234(c)(2)(B) to determine
the acceptability of contract offers and the amount of rental
payments under this subsection.
‘‘(C) INCENTIVES.—The amounts payable to owners and
operators in the form of rental payments under contracts
entered into under this subsection shall reflect incentives
that are provided to owners and operators to enroll
filterstrips in the conservation reserve under section 1234.
‘‘(i) ELIGIBILITY FOR CONSIDERATION.—On the expiration of a
contract entered into under this subchapter, the land subject to
the contract shall be eligible to be considered for reenrollment
in the conservation reserve.
‘‘(j) BALANCE
OF NATURAL RESOURCE PURPOSES.—In deter-
mining the acceptability of contract offers under this subchapter,
the Secretary shall ensure, to the maximum extent practicable,
an equitable balance among the conservation purposes of soil ero-
sion, water quality, and wildlife habitat.
‘‘SEC. 1232. DUTIES OF OWNERS AND OPERATORS.
‘‘(a) IN GENERAL.—Under the terms of a contract entered into
under this subchapter, during the term of the contract, an owner
or operator of a farm or ranch shall agree—
‘‘(1) to implement a plan approved by the local conservation
district (or in an area not located within a conservation district,
a plan approved by the Secretary) for converting eligible land
normally devoted to the production of an agricultural com-
modity on the farm or ranch to a less intensive use (as defined
by the Secretary), such as pasture, permanent grass, legumes,
H. R. 2646—110
forbs, shrubs, or trees, substantially in accordance with a
schedule outlined in the plan;
‘‘(2) to place highly erodible cropland subject to the contract
in the conservation reserve established under this subchapter;
‘‘(3) not to use the land for agricultural purposes, except
as permitted by the Secretary;
‘‘(4) to establish approved vegetative cover (which may
include emerging vegetation in water), water cover for the
enhancement of wildlife, or, where practicable, maintain
existing cover on the land, except that—
‘‘(A) the water cover shall not include ponds for the
purpose of watering livestock, irrigating crops, or raising
fish for commercial purposes; and
‘‘(B) the Secretary shall not terminate the contract
for failure to establish approved vegetative or water cover
on the land if—
‘‘(i) the failure to plant the cover was due to exces-
sive rainfall or flooding;
‘‘(ii) the land subject to the contract that could
practicably be planted to the cover is planted to the
cover; and
‘‘(iii) the land on which the owner or operator
was unable to plant the cover is planted to the cover
after the wet conditions that prevented the planting
subsides;
‘‘(5) on a violation of a term or condition of the contract
at any time the owner or operator has control of the land—
‘‘(A) to forfeit all rights to receive rental payments
and cost sharing payments under the contract and to refund
to the Secretary any rental payments and cost sharing
payments received by the owner or operator under the
contract, together with interest on the payments as deter-
mined by the Secretary, if the Secretary, after considering
the recommendations of the soil conservation district and
the Natural Resources Conservation Service, determines
that the violation is of such nature as to warrant termi-
nation of the contract; or
‘‘(B) to refund to the Secretary, or accept adjustments
to, the rental payments and cost sharing payments provided
to the owner or operator, as the Secretary considers appro-
priate, if the Secretary determines that the violation does
not warrant termination of the contract;
‘‘(6) on the transfer of the right and interest of the owner
or operator in land subject to the contract—
‘‘(A) to forfeit all rights to rental payments and cost
sharing payments under the contract; and
‘‘(B) to refund to the United States all rental payments
and cost sharing payments received by the owner or oper-
ator, or accept such payment adjustments or make such
refunds as the Secretary considers appropriate and con-
sistent with the objectives of this subchapter;
unless the transferee of the land agrees with the Secretary
to assume all obligations of the contract, except that no refund
of rental payments and cost sharing payments shall be required
if the land is purchased by or for the United States Fish
and Wildlife Service, or the transferee and the Secretary agree
H. R. 2646—111
to modifications to the contract, in a case in which the modifica-
tions are consistent with the objectives of the program, as
determined by the Secretary;
‘‘(7) not to conduct any harvesting or grazing, nor otherwise
make commercial use of the forage, on land that is subject
to the contract, nor adopt any similar practice specified in
the contract by the Secretary as a practice that would tend
to defeat the purposes of the contract, except that the Secretary
may permit, consistent with the conservation of soil, water
quality, and wildlife habitat (including habitat during nesting
seasons for birds in the area)—
‘‘(A) managed harvesting and grazing (including the
managed harvesting of biomass), except that in permitting
managed harvesting and grazing, the Secretary—
‘‘(i) shall, in coordination with the State technical
committee—
‘‘(I) develop appropriate vegetation manage-
ment requirements; and
‘‘(II) identify periods during which harvesting
and grazing under this paragraph may be con-
ducted;
‘‘(ii) may permit harvesting and grazing or other
commercial use of the forage on the land that is subject
to the contract in response to a drought or other emer-
gency; and
‘‘(iii) shall, in the case of routine managed har-
vesting or grazing or harvesting or grazing conducted
in response to a drought or other emergency, reduce
the rental payment otherwise payable under the con-
tract by an amount commensurate with the economic
value of the activity; and
‘‘(B) the installation of wind turbines, except that in
permitting the installation of wind turbines, the Secretary
shall determine the number and location of wind turbines
that may be installed, taking into account—
‘‘(i) the location, size, and other physical character-
istics of the land;
‘‘(ii) the extent to which the land contains wildlife
and wildlife habitat; and
‘‘(iii) the purposes of the conservation reserve pro-
gram under this subchapter;
‘‘(8) not to conduct any planting of trees on land that
is subject to the contract unless the contract specifies that
the harvesting and commercial sale of trees such as Christmas
trees are prohibited, nor otherwise make commercial use of
trees on land that is subject to the contract unless it is expressly
permitted in the contract, nor adopt any similar practice speci-
fied in the contract by the Secretary as a practice that would
tend to defeat the purposes of the contract, except that no
contract shall prohibit activities consistent with customary for-
estry practice, such as pruning, thinning, or stand improvement
of trees, on land converted to forestry use;
‘‘(9) not to adopt any practice specified by the Secretary
in the contract as a practice that would tend to defeat the
purposes of this subchapter; and
‘‘(10) to comply with such additional provisions as the Sec-
retary determines are desirable and are included in the contract
H. R. 2646—112
to carry out this subchapter or to facilitate the practical
administration of this subchapter.
‘‘(b) CONSERVATION PLANS.—The plan referred to in subsection
(a)(1)—
‘‘(1) shall set forth—
‘‘(A) the conservation measures and practices to be
carried out by the owner or operator during the term
of the contract; and
‘‘(B) the commercial use, if any, to be permitted on
the land during the term; and
‘‘(2) may provide for the permanent retirement of any
existing cropland base and allotment history for the land.
‘‘(c) FORECLOSURE.—
‘‘(1) IN GENERAL.—Notwithstanding any other provision of
law, an owner or operator who is a party to a contract entered
into under this subchapter may not be required to make repay-
ments to the Secretary of amounts received under the contract
if the land that is subject to the contract has been foreclosed
on and the Secretary determines that forgiving the repayments
is appropriate in order to provide fair and equitable treatment.
‘‘(2) RESUMPTION OF CONTROL.—
‘‘(A) IN GENERAL.—This subsection shall not void the
responsibilities of an owner or operator under the contract
if the owner or operator resumes control over the land
that is subject to the contract within the period specified
in the contract.
‘‘(B) CONTRACT.—On the resumption of the control over
the land by the owner or operator, the provisions of the
contract in effect on the date of the foreclosure shall apply.
‘‘SEC. 1233. DUTIES OF THE SECRETARY.
‘‘In return for a contract entered into by an owner or operator
under section 1232, the Secretary shall—
‘‘(1) share the cost of carrying out the conservation meas-
ures and practices set forth in the contract for which the
Secretary determines that cost sharing is appropriate and in
the public interest; and
‘‘(2) for a period of years not in excess of the term of
the contract, pay an annual rental payment in an amount
necessary to compensate for—
‘‘(A) the conversion of highly erodible cropland normally
devoted to the production of an agricultural commodity
on a farm or ranch to a less intensive use; and
‘‘(B) the retirement of any cropland base and allotment
history that the owner or operator agrees to retire perma-
nently.
‘‘SEC. 1234. PAYMENTS.
‘‘(a) TIMING.—The Secretary shall provide payment for obliga-
tions incurred by the Secretary under a contract entered into under
this subchapter—
‘‘(1) with respect to any cost-sharing payment obligation
incurred by the Secretary, as soon as practicable after the
obligation is incurred; and
‘‘(2) with respect to any annual rental payment obligation
incurred by the Secretary—
‘‘(A) as soon as practicable after October 1 of each
calendar year; or
H. R. 2646—113
‘‘(B) at the option of the Secretary, at any time prior
to such date during the year that the obligation is incurred.
‘‘(b) FEDERAL PERCENTAGE OF COST SHARING PAYMENTS.—
‘‘(1) IN
GENERAL.—In making cost sharing payments to
an owner or operator under a contract entered into under
this subchapter, the Secretary shall pay 50 percent of the
cost of establishing water quality and conservation measures
and practices required under each contract for which the Sec-
retary determines that cost sharing is appropriate and in the
public interest.
‘‘(2) LIMITATION.—The Secretary shall not make any pay-
ment to an owner or operator under this subchapter to the
extent that the total amount of cost sharing payments provided
to the owner or operator from all sources would exceed 100
percent of the total cost of establishing measures and practices
described in paragraph (1).
‘‘(3) HARDWOOD TREES, WINDBREAKS, SHELTERBELTS, AND
WILDLIFE CORRIDORS.—
‘‘(A) APPLICABILITY.—This paragraph applies to—
‘‘(i) land devoted to the production of hardwood
trees, windbreaks, shelterbelts, or wildlife corridors
under a contract entered into under this subchapter
after November 28, 1990; and
‘‘(ii) land converted to such production under sec-
tion 1235A.
‘‘(B) PAYMENTS.—In making cost share payments to
an owner or operator of land described in subparagraph
(A), the Secretary shall pay 50 percent of the reasonable
and necessary costs, as determined by the Secretary,
incurred by the owner or operator for maintaining trees
or shrubs, including the cost of replanting (if the trees
or shrubs were lost due to conditions beyond the control
of the owner or operator), during not less than the 2-
year, and not more than the 4-year, period beginning on
the date of the planting of the trees or shrubs, as deter-
mined appropriate by the Secretary.
‘‘(4) HARDWOOD
TREE
PLANTING.—The Secretary may
permit owners or operators that contract to devote at least
10 acres of land to the production of hardwood trees under
this subchapter to extend the planting of the trees over a
3-year period if at least 1⁄3 of the trees are planted in each
of the first 2 years.
‘‘(5) OTHER FEDERAL COST SHARE ASSISTANCE.—An owner
or operator shall not be eligible to receive or retain cost share
assistance under this subsection if the owner or operator
receives any other Federal cost share assistance with respect
to the land under any other provision of law.
‘‘(c) ANNUAL RENTAL PAYMENTS.—
‘‘(1) IN GENERAL.—In determining the amount of annual
rental payments to be paid to owners and operators for con-
verting highly erodible cropland normally devoted to the produc-
tion of an agricultural commodity to less intensive use, the
Secretary may consider, among other things, the amount nec-
essary to encourage owners or operators of highly erodible
cropland to participate in the program established by this sub-
chapter.