H. R. 2419—47 
(E) If the Secretary designates additional oilseeds, any 
eligible oilseed acreage, which shall be determined in the 
same manner as eligible oilseed acreage under section 
1101(a)(2) of the Farm Security and Rural Investment Act 
of 2002 (7 U.S.C. 7911(a)(2)). 
(3) SELECTION
OF
ACRES.—The Secretary shall give the 
owner of the farm the opportunity to select the base acres 
for peanuts or the base acres for covered commodities against 
which the reduction required by paragraph (1) will be made. 
(4) 
EXCEPTION
FOR
DOUBLE-CROPPED
ACREAGE.—In 
applying paragraph (1), the Secretary shall make an exception 
in the case of double cropping, as determined by the Secretary. 
(5) COORDINATED
APPLICATION
OF
REQUIREMENTS.—The 
Secretary shall take into account section 1101(b) when applying 
the requirements of this subsection. 
(c) REDUCTION IN BASE ACRES.— 
(1) REDUCTION AT OPTION OF OWNER.— 
(A) IN GENERAL.—The owner of a farm may reduce, 
at any time, the base acres for peanuts for the farm. 
(B) 
EFFECT
OF
REDUCTION.—A 
reduction 
under 
subparagraph (A) shall be permanent and made in a 
manner prescribed by the Secretary. 
(2) REQUIRED ACTION BY SECRETARY.— 
(A) IN GENERAL.—The Secretary shall proportionately 
reduce base acres on a farm for peanuts for land that 
has been subdivided and developed for multiple residential 
units or other nonfarming uses if the size of the tracts 
and the density of the subdivision is such that the land 
is unlikely to return to the previous agricultural use, unless 
the producers on the farm demonstrate that the land— 
(i) remains devoted to commercial agricultural 
production; or 
(ii) is likely to be returned to the previous agricul-
tural use. 
(B) REQUIREMENT.—The Secretary shall establish 
procedures to identify land described in subparagraph (A). 
(3) REVIEW
AND
REPORT.—Each year, to ensure, to the 
maximum extent practicable, that payments are received only 
by producers, the Secretary shall submit to Congress a report 
that describes the results of the actions taken under paragraph 
(2). 
(d) TREATMENT OF FARMS WITH LIMITED BASE ACRES.— 
(1) PROHIBITION
ON
PAYMENTS.—Except as provided in 
paragraph (2) and notwithstanding any other provision of this 
title, a producer on a farm may not receive direct payments, 
counter-cyclical payments, or average crop revenue election pay-
ments if the sum of the base acres of the farm is 10 acres 
or less, as determined by the Secretary. 
(2) EXCEPTIONS.—Paragraph (1) shall not apply to a farm 
owned by— 
(A) a socially disadvantaged farmer or rancher (as 
defined in section 355(e) of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 2003(e)); or 
(B) a limited resource farmer or rancher, as defined 
by the Secretary. 
(3) DATA
COLLECTION
AND
PUBLICATION.—The Secretary 
shall—
H. R. 2419—48 
(A) collect and publish segregated data and survey 
information about the farm profiles, utilization of land, 
and crop production; and 
(B) perform an evaluation on the supply and price 
of fruits and vegetables based on the effects of suspension 
of base acres under this section. 
SEC. 1303. AVAILABILITY OF DIRECT PAYMENTS FOR PEANUTS. 
(a) PAYMENT REQUIRED.—For each of the 2008 through 2012 
crop years for peanuts, the Secretary shall make direct payments 
to the producers on a farm for which a payment yield and base 
acres for peanuts are established. 
(b) PAYMENT RATE.—Except as provided in section 1105, the 
payment rate used to make direct payments with respect to peanuts 
for a crop year shall be equal to $36 per ton. 
(c) PAYMENT AMOUNT.—The amount of the direct payment to 
be paid to the producers on a farm for peanuts for a crop year 
shall be equal to the product of the following: 
(1) The payment rate specified in subsection (b). 
(2) The payment acres on the farm. 
(3) The payment yield for the farm. 
(d) TIME FOR PAYMENT.— 
(1) IN GENERAL.—Except as provided in paragraph (2), in 
the case of each of the 2008 through 2012 crop years, the 
Secretary may not make direct payments under this section 
before October 1 of the calendar year in which the crop is 
harvested. 
(2) ADVANCE PAYMENTS.— 
(A) OPTION.— 
(i) IN GENERAL.—At the option of the producers 
on a farm, the Secretary shall pay in advance up 
to 22 percent of the direct payment for peanuts for 
any of the 2008 through 2011 crop years to the pro-
ducers on a farm. 
(ii) 2008 CROP YEAR.—If the producers on a farm 
elect to receive advance direct payments under clause 
(i) for peanuts for the 2008 crop year, as soon as 
practicable after the election, the Secretary shall make 
the advance direct payment to the producers on the 
farm. 
(B) MONTH.— 
(i) SELECTION.—Subject to clauses (ii) and (iii), 
the producers on a farm shall select the month during 
which the advance payment for a crop year will be 
made. 
(ii) OPTIONS.—The month selected may be any 
month during the period— 
(I) beginning on December 1 of the calendar 
year before the calendar year in which the crop 
of peanuts is harvested; and 
(II) ending during the month within which 
the direct payment would otherwise be made. 
(iii) CHANGE.—The producers on a farm may 
change the selected month for a subsequent advance 
payment by providing advance notice to the Secretary. 
(3) REPAYMENT OF ADVANCE PAYMENTS.—If a producer on 
a farm that receives an advance direct payment for a crop
H. R. 2419—49 
year ceases to be a producer on that farm, or the extent to 
which the producer shares in the risk of producing a crop 
changes, before the date the remainder of the direct payment 
is made, the producer shall be responsible for repaying the 
Secretary the applicable amount of the advance payment, as 
determined by the Secretary. 
SEC. 1304. AVAILABILITY OF COUNTER-CYCLICAL PAYMENTS FOR PEA-
NUTS. 
(a) PAYMENT REQUIRED.—Except as provided in section 1105, 
for each of the 2008 through 2012 crop years for peanuts, the 
Secretary shall make counter-cyclical payments to producers on 
farms for which payment yields and base acres for peanuts are 
established if the Secretary determines that the effective price 
for peanuts is less than the target price for peanuts. 
(b) EFFECTIVE PRICE.—For purposes of subsection (a), the effec-
tive price for peanuts is equal to the sum of the following: 
(1) The higher of the following: 
(A) The national average market price for peanuts 
received by producers during the 12-month marketing year 
for peanuts, as determined by the Secretary. 
(B) The national average loan rate for a marketing 
assistance loan for peanuts in effect for the applicable 
period under this subtitle. 
(2) The payment rate in effect for peanuts under section 
1303 for the purpose of making direct payments. 
(c) TARGET PRICE.—For purposes of subsection (a), the target 
price for peanuts shall be equal to $495 per ton. 
(d) PAYMENT RATE.—The payment rate used to make counter- 
cyclical payments for a crop year shall be equal to the difference 
between— 
(1) the target price for peanuts; and 
(2) the effective price determined under subsection (b) for 
peanuts. 
(e) PAYMENT
AMOUNT.—If counter-cyclical payments are 
required to be paid for any of the 2008 through 2012 crops of 
peanuts, the amount of the counter-cyclical payment to be paid 
to the producers on a farm for that crop year shall be equal 
to the product of the following: 
(1) The payment rate specified in subsection (d). 
(2) The payment acres on the farm. 
(3) The payment yield for the farm. 
(f) TIME FOR PAYMENTS.— 
(1) GENERAL RULE.—Except as provided in paragraph (2), 
if the Secretary determines under subsection (a) that counter- 
cyclical payments are required to be made under this section 
for a crop of peanuts, beginning October 1, or as soon as 
practicable after the end of the marketing year, the Secretary 
shall make the counter-cyclical payments for the crop. 
(2) AVAILABILITY OF PARTIAL PAYMENTS.— 
(A) IN GENERAL.—If, before the end of the 12-month 
marketing year, the Secretary estimates that counter- 
cyclical payments will be required under this section for 
a crop year, the Secretary shall give producers on a farm 
the option to receive partial payments of the counter- 
cyclical payment projected to be made for the crop. 
(B) ELECTION.—
H. R. 2419—50 
(i) IN GENERAL.—The Secretary shall allow pro-
ducers on a farm to make an election to receive partial 
payments under subparagraph (A) at any time but 
not later than 60 days prior to the end of the marketing 
year for the crop. 
(ii) DATE OF ISSUANCE.—The Secretary shall issue 
the partial payment after the date of an announcement 
by the Secretary but not later than 30 days prior 
to the end of the marketing year. 
(3) TIME
FOR
PARTIAL
PAYMENTS.—When the Secretary 
makes partial payments for any of the 2008 through 2010 
crop years— 
(A) the first partial payment shall be made after 
completion of the first 180 days of the marketing year 
for that crop; and 
(B) the final partial payment shall be made beginning 
October 1, or as soon as practicable thereafter, after the 
end of the applicable marketing year for that crop. 
(4) AMOUNT OF PARTIAL PAYMENTS.— 
(A) FIRST
PARTIAL
PAYMENT.—For each of the 2008 
through 2010 crop years, the first partial payment under 
paragraph (3) to the producers on a farm may not exceed 
40 percent of the projected counter-cyclical payment for 
the crop year, as determined by the Secretary. 
(B) FINAL
PAYMENT.—The final payment for a crop 
year shall be equal to the difference between— 
(i) the actual counter-cyclical payment to be made 
to the producers for that crop year; and 
(ii) the amount of the partial payment made to 
the producers under subparagraph (A). 
(5) REPAYMENT.—The producers on a farm that receive 
a partial payment under this subsection for a crop year shall 
repay to the Secretary the amount, if any, by which the total 
of the partial payments exceed the actual counter-cyclical pay-
ment to be made for that crop year. 
SEC. 1305. PRODUCER AGREEMENT REQUIRED AS CONDITION ON 
PROVISION OF PAYMENTS. 
(a) COMPLIANCE WITH CERTAIN REQUIREMENTS.— 
(1) REQUIREMENTS.—Before the producers on a farm may 
receive direct payments or counter-cyclical payments under this 
subtitle, or average crop revenue election payments under sec-
tion 1105, with respect to the farm, the producers shall agree, 
during the crop year for which the payments are made and 
in exchange for the payments— 
(A) to comply with applicable conservation require-
ments under subtitle B of title XII of the Food Security 
Act of 1985 (16 U.S.C. 3811 et seq.); 
(B) to comply with applicable wetland protection 
requirements under subtitle C of title XII of that Act (16 
U.S.C. 3821 et seq.); 
(C) to comply with the planting flexibility requirements 
of section 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
H. R. 2419—51 
or conserving use, and not for a nonagricultural commer-
cial, industrial, or residential 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.— 
(A) IN GENERAL.—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, or on 
which average crop revenue election payments are based, 
shall result in the termination of the direct payments, 
counter-cyclical payments, or average crop revenue election 
payments to the extent the payments are made or based 
on the base acres, unless the transferee or owner of the 
acreage agrees to assume all obligations under subsection 
(a). 
(B) EFFECTIVE DATE.—The termination shall take effect 
on the date determined by the Secretary. 
(2) EXCEPTION.—If a producer entitled to a direct payment, 
counter-cyclical payment, or average crop revenue election pay-
ment 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.— 
(1) IN
GENERAL.—As a condition on the receipt of any 
benefits under this subtitle, the Secretary shall require pro-
ducers on a farm to submit to the Secretary annual acreage 
reports with respect to all cropland on the farm. 
(2) PENALTIES.—No penalty with respect to benefits under 
this subtitle shall be assessed against the producers on a farm 
for an inaccurate acreage report unless the producers on the 
farm knowingly and willfully falsified the acreage report. 
(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, counter-cyclical payments, or aver-
age crop revenue election payments under section 1105 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.—
H. R. 2419—52 
(1) GENERAL LIMITATION.—The planting of an agricultural 
commodity specified in paragraph (3) shall be prohibited on 
base acres for peanuts unless the commodity, if planted, is 
destroyed before harvest. 
(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 mung beans and pulse 
crops). 
(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 2008 through 2012 crops 
of peanuts, the Secretary shall make available to producers 
on a farm nonrecourse marketing assistance loans for peanuts 
produced on the farm. 
(2) TERMS
AND
CONDITIONS.—The loans shall be made 
under terms and conditions that are prescribed by the Secretary 
and at the loan rate established under subsection (b). 
(3) 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. 
(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—
H. R. 2419—53 
(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) STORAGE, HANDLING, AND ASSOCIATED COSTS.— 
(A) IN
GENERAL.—Beginning with the 2008 crop of 
peanuts, to ensure proper storage of peanuts for which 
a loan is made under this section, the Secretary shall 
pay handling and other associated costs (other than storage 
costs) incurred at the time at which the peanuts are placed 
under loan, as determined by the Secretary. 
(B) REDEMPTION
AND
FORFEITURE.—The Secretary 
shall— 
(i) require the repayment of handling and other 
associated costs paid under subparagraph (A) for all 
peanuts pledged as collateral for a loan that is 
redeemed under this section; and 
(ii) pay storage, handling, and other associated 
costs for all peanuts pledged as collateral that are 
forfeited under this section. 
(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.—Except as provided in section 1105, the loan 
rate for a marketing assistance loan for peanuts under 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;
H. R. 2419—54 
(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. 
(2) AUTHORITY
TO
TEMPORARILY
ADJUST
REPAYMENT 
RATES.— 
(A) ADJUSTMENT AUTHORITY.—In the event of a severe 
disruption to marketing, transportation, or related infra-
structure, the Secretary may modify the repayment rate 
otherwise applicable under this subsection for marketing 
assistance loans for peanuts under subsection (a). 
(B) DURATION.—An adjustment made under subpara-
graph (A) in the repayment rate for marketing assistance 
loans for peanuts shall be in effect on a short-term and 
temporary basis, as determined by the Secretary. 
(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.— 
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. 
(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 
under this subtitle only in a manner that is consistent with such 
activities in regard to other commodities.
H. R. 2419—55 
SEC. 1308. ADJUSTMENTS OF LOANS. 
(a) ADJUSTMENT AUTHORITY.—The Secretary may make appro-
priate adjustments in the loan rates for peanuts for differences 
in grade, type, quality, location, and other factors. 
(b) MANNER
OF ADJUSTMENT.—The adjustments under sub-
section (a) shall, to the maximum extent practicable, be made 
in such a manner that the average loan level for peanuts will, 
on the basis of the anticipated incidence of the factors, be equal 
to the level of support determined in accordance with this subtitle 
and subtitles B, D, and E. 
(c) ADJUSTMENT ON COUNTY BASIS.— 
(1) IN GENERAL.—Subject to paragraph (2), the Secretary 
may establish loan rates for a crop of peanuts for producers 
in individual counties in a manner that results in the lowest 
loan rate being 95 percent of the national average loan rate, 
if those loan rates do not result in an increase in outlays. 
(2) PROHIBITION.—Adjustments under this subsection shall 
not result in an increase in the national average loan rate 
for any year. 
Subtitle D—Sugar 
SEC. 1401. SUGAR PROGRAM. 
(a) IN
GENERAL.—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— 
‘‘(1) 18.00 cents per pound for raw cane sugar for the 
2008 crop year; 
‘‘(2) 18.25 cents per pound for raw cane sugar for the 
2009 crop year; 
‘‘(3) 18.50 cents per pound for raw cane sugar for the 
2010 crop year; 
‘‘(4) 18.75 cents per pound for raw cane sugar for the 
2011 crop year; and 
‘‘(5) 18.75 cents per pound for raw cane sugar for the 
2012 crop year. 
‘‘(b) SUGAR BEETS.—The Secretary shall make loans available 
to processors of domestically grown sugar beets at a rate equal 
to— 
‘‘(1) 22.9 cents per pound for refined beet sugar for the 
2008 crop year; and 
‘‘(2) a rate that is equal to 128.5 percent of the loan rate 
per pound of raw cane sugar for the applicable crop year under 
subsection (a) for each of the 2009 through 2012 crop years. 
‘‘(c) TERM OF LOANS.— 
‘‘(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
H. R. 2419—56 
‘‘(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 first loan was made; and 
‘‘(B) mature in 9 months less the quantity of time 
that the first loan was in effect. 
‘‘(d) 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. 
‘‘(3) ADMINISTRATION.—The Secretary may not impose or 
enforce any prenotification requirement, or similar administra-
tive requirement not otherwise in effect on May 13, 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. 
‘‘(e) LOANS FOR IN-PROCESS SUGAR.— 
‘‘(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
H. R. 2419—57 
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 multi-
plying— 
‘‘(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 (c). 
‘‘(f) AVOIDING FORFEITURES; CORPORATION INVENTORY DISPOSI-
TION.— 
‘‘(1) IN GENERAL.—Subject to subsection (d)(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. 
‘‘(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) BIOENERGY
FEEDSTOCK.—If a reduction in the 
quantity of production accepted under subparagraph (A) 
involves sugar beets or sugarcane that has already been 
planted, the sugar beets or sugarcane so planted may not 
be used for any commercial purpose other than as a bio-
energy feedstock.
H. R. 2419—58 
‘‘(C) ADDITIONAL AUTHORITY.—The authority provided 
under this paragraph is in addition to any authority of 
the Commodity Credit Corporation under any other law. 
‘‘(g) 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) COLLECTION OF INFORMATION ON MEXICO.— 
‘‘(A) COLLECTION.—The Secretary shall collect— 
‘‘(i) information on the production, consumption, 
stocks, and trade of sugar in Mexico, including United 
States exports of sugar to Mexico; and 
‘‘(ii) publicly available information on Mexican 
production, consumption, and trade of high fructose 
corn syrups. 
‘‘(B) PUBLICATION.—The data collected under subpara-
graph (A) shall be published in each edition of the World 
Agricultural Supply and Demand Estimates. 
‘‘(5) PENALTY.—Any person willfully failing or refusing to 
furnish the information required to be reported by paragraph 
(1), (2), or (3), or furnishing willfully false information, shall 
be subject to a civil penalty of not more than $10,000 for 
each such violation. 
‘‘(6) MONTHLY
REPORTS.—Taking into consideration the 
information received under this subsection, the Secretary shall
H. R. 2419—59 
publish on a monthly basis composite data on production, 
imports, distribution, and stock levels of sugar. 
‘‘(h) 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. 
‘‘(i) EFFECTIVE PERIOD.—This section shall be effective only 
for the 2008 through 2012 crops of sugar beets and sugarcane.’’. 
(b) TRANSITION.—The Secretary shall make loans for raw cane 
sugar and refined beet sugar available for the 2007 crop year 
on the terms and conditions provided in section 156 of the Federal 
Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272), 
as in effect on the day before the date of enactment of this Act. 
SEC. 1402. UNITED STATES MEMBERSHIP IN THE INTERNATIONAL 
SUGAR ORGANIZATION. 
The Secretary shall work with the Secretary of State to restore 
United States membership in the International Sugar Organization 
not later than 1 year after the date of enactment of this Act. 
SEC. 1403. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR. 
(a) DEFINITIONS.—Section 359a of the Agricultural Adjustment 
Act of 1938 (7 U.S.C. 1359aa) is amended— 
(1) by redesignating paragraphs (1), (2), (3), and (4) as 
paragraphs (2), (4), (5), and (6), respectively; 
(2) by inserting before paragraph (2) (as so redesignated) 
the following: 
‘‘(1) HUMAN CONSUMPTION.—The term ‘human consump-
tion’, when used in the context of a reference to sugar (whether 
in the form of sugar, in-process sugar, syrup, molasses, or 
in some other form) for human consumption, includes sugar 
for use in human food, beverages, or similar products.’’; and 
(3) by inserting after paragraph (2) (as so redesignated) 
the following: 
‘‘(3) MARKET.— 
‘‘(A) IN GENERAL.—The term ‘market’ means to sell 
or otherwise dispose of in commerce in the United States. 
‘‘(B) INCLUSIONS.—The term ‘market’ includes— 
‘‘(i) the forfeiture of sugar 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); 
‘‘(ii) with respect to any integrated processor and 
refiner, the movement of raw cane sugar into the 
refining process; and 
‘‘(iii) the sale of sugar for the production of ethanol 
or other bioenergy product, if the disposition of the 
sugar is administered by the Secretary under section 
9010 of the Farm Security and Rural Investment Act 
of 2002. 
‘‘(C) MARKETING YEAR.—Forfeited sugar described in 
subparagraph (B)(i) shall be considered to have been mar-
keted during the crop year for which a loan is made under 
the loan program described in that subparagraph.’’.
H. R. 2419—60 
(b) FLEXIBLE MARKETING ALLOTMENTS
FOR SUGAR.—Section 
359b of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359bb) 
is amended to read as follows: 
‘‘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 2008 through 2012 crop years for sugarcane 
and sugar beets, the Secretary shall estimate— 
‘‘(A) the quantity of sugar that will be subject to human 
consumption 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 human consumption in the United States 
during the crop year; 
‘‘(D) the quantity of sugar that will be available from 
the domestic processing of sugarcane, sugar beets, and 
in-process beet sugar; 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 the 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 not later than the beginning of 
each of the second through fourth quarters of the crop year. 
‘‘(b) SUGAR ALLOTMENTS.— 
‘‘(1) ESTABLISHMENT.—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 cane or sugar beets or in-process 
beet sugar (whether the sugar beets or in-process beet sugar 
was produced domestically or imported) at a level that is— 
‘‘(A) sufficient to maintain raw and refined sugar prices 
above forfeiture levels so that there will be 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); but 
‘‘(B) not less than 85 percent of the estimated quantity 
of sugar for domestic human consumption for the crop 
year. 
‘‘(2) PRODUCTS.—The Secretary may include sugar products, 
the majority content of which is sucrose for human consump-
tion, derived from sugar cane, sugar beets, molasses, or sugar 
in the allotments established under paragraph (1) if the Sec-
retary determines it to be appropriate for purposes of this 
part. 
‘‘(c) COVERAGE OF ALLOTMENTS.—
H. R. 2419—61 
‘‘(1) IN GENERAL.—The marketing allotments under this 
part shall apply to the marketing by processors of sugar 
intended for domestic human consumption that has been proc-
essed from sugar cane, sugar beets, or in-process beet sugar, 
whether such sugar beets or in-process beet sugar was produced 
domestically or imported. 
‘‘(2) EXCEPTIONS.—Consistent with the administration of 
marketing allotments for each of the 2002 through 2007 crop 
years, the marketing allotments shall not apply to sugar sold— 
‘‘(A) to facilitate the exportation of the sugar to a 
foreign country, except that the exports of sugar shall 
not be eligible to receive credits under reexport programs 
for refined sugar or sugar containing products administered 
by the Secretary; 
‘‘(B) to enable another processor to fulfill an allocation 
established for that processor; or 
‘‘(C) for uses other than domestic human consumption, 
except for the sale of sugar for the production of ethanol 
or other bioenergy if the disposition of the sugar is adminis-
tered by the Secretary under section 9010 of the Farm 
Security and Rural Investment Act of 2002. 
‘‘(3) REQUIREMENT.—The sale of sugar described in para-
graph (2)(B) shall be— 
‘‘(A) made prior to May 1; and 
‘‘(B) reported to the Secretary. 
‘‘(d) PROHIBITIONS.— 
‘‘(1) IN
GENERAL.—During all or part of any crop year 
for which marketing allotments have been established, no proc-
essor of sugar beets or sugarcane shall market for domestic 
human consumption a quantity of sugar in excess of the alloca-
tion established for the processor, except— 
‘‘(A) to enable another processor to fulfill an allocation 
established for that other processor; or 
‘‘(B) to facilitate the exportation of the 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.’’. 
(c) ESTABLISHMENT OF FLEXIBLE MARKETING ALLOTMENTS.— 
Section 359c of the Agricultural Adjustment Act of 1938 (7 U.S.C. 
1359cc) is amended— 
(1) by striking subsection (b) and inserting the following: 
‘‘(b) OVERALL ALLOTMENT QUANTITY.— 
‘‘(1) IN GENERAL.—The Secretary shall establish the overall 
quantity of sugar to be allotted for the crop year (referred 
to in this part as the ‘overall allotment quantity’) at a level 
that is— 
‘‘(A) sufficient to maintain raw and refined sugar prices 
above forfeiture levels to avoid forfeiture of sugar to the 
Commodity Credit Corporation; but 
‘‘(B) not less than a quantity equal to 85 percent of 
the estimated quantity of sugar for domestic human 
consumption for the crop year. 
‘‘(2) ADJUSTMENT.—Subject to paragraph (1), the Secretary 
shall adjust the overall allotment quantity to maintain—
H. R. 2419—62 
‘‘(A) raw and refined sugar prices above forfeiture levels 
to avoid the forfeiture of sugar to the Commodity Credit 
Corporation; and 
‘‘(B) adequate supplies of raw and refined sugar in 
the domestic market.’’; 
(2) in subsection (d)(2), by inserting ‘‘or in-process beet 
sugar’’ before the period at the end; 
(3) in subsection (g)(1)— 
(A) by striking ‘‘(1) IN GENERAL.—The Secretary’’ and 
inserting the following: 
‘‘(1) ADJUSTMENTS.— 
‘‘(A) IN GENERAL.—Subject to subparagraph (B), the 
Secretary’’; and 
(B) by adding at the end the following: 
‘‘(B) LIMITATION.—In carrying out subparagraph (A), 
the Secretary may not reduce the overall allotment quantity 
to a quantity of less than 85 percent of the estimated 
quantity of sugar for domestic human consumption for 
the crop year.’’; and 
(4) by striking subsection (h). 
(d) ALLOCATION OF MARKETING ALLOTMENTS.—Section 359d(b) 
of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359dd(b)) 
is amended— 
(1) in paragraph (1)(F), by striking ‘‘Except as otherwise 
provided in section 359f(c)(8), if’’ and inserting ‘‘If’’; and 
(2) in paragraph (2), by striking subparagraphs (G), (H), 
and (I) and inserting the following: 
‘‘(G) SALE OF FACTORIES OF A PROCESSOR TO ANOTHER 
PROCESSOR.— 
‘‘(i) EFFECT OF SALE.—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 1 or more factories to the 
total allocation of the seller, unless the buyer and 
the seller have agreed upon the transfer of a different 
portion of the allocation of the seller, in which case, 
the Secretary shall transfer that portion agreed upon 
by the buyer and seller. 
‘‘(ii) APPLICATION
OF
ALLOCATION.—The assign-
ment of the allocation under clause (i) shall apply— 
‘‘(I) during the remainder of the crop year 
for which the sale described in clause (i) occurs; 
and 
‘‘(II) during each subsequent crop year. 
‘‘(iii) USE OF OTHER FACTORIES TO FILL ALLOCA-
TION.—If the assignment of the allocation under clause 
(i) to the buyer for the 1 or more purchased factories 
cannot be filled by the production of the 1 or more 
purchased factories, the remainder of the allocation 
may be filled by beet sugar produced by the buyer 
from other factories of the buyer.
H. R. 2419—63 
‘‘(H) 
NEW
ENTRANTS
STARTING
PRODUCTION, 
REOPENING, OR
ACQUIRING
AN
EXISTING
FACTORY
WITH 
PRODUCTION HISTORY.— 
‘‘(i) DEFINITION OF NEW ENTRANT.— 
‘‘(I) IN GENERAL.—In this subparagraph, the 
term ‘new entrant’ means an individual, corpora-
tion, or other entity that— 
‘‘(aa) does not have an allocation of the 
beet sugar allotment under this part; 
‘‘(bb) is not affiliated with any other indi-
vidual, corporation, or entity that has an 
allocation of beet sugar under this part 
(referred to in this clause as a ‘third party’); 
and 
‘‘(cc) will process sugar beets produced by 
sugar beet growers under contract with the 
new entrant for the production of sugar at 
the new or re-opened factory that is the basis 
for the new entrant allocation. 
‘‘(II) AFFILIATION.—For purposes of subclause 
(I)(bb), a new entrant and a third party shall be 
considered to be affiliated if— 
‘‘(aa) the third party has an ownership 
interest in the new entrant; 
‘‘(bb) the new entrant and the third party 
have owners in common; 
‘‘(cc) the third party has the ability to 
exercise control over the new entrant by 
organizational rights, contractual rights, or 
any other means; 
‘‘(dd) the third party has a contractual 
relationship with the new entrant by which 
the new entrant will make use of the facilities 
or assets of the third party; or 
‘‘(ee) there are any other similar cir-
cumstances by which the Secretary determines 
that the new entrant and the third party are 
affiliated. 
‘‘(ii) ALLOCATION FOR A NEW ENTRANT THAT HAS 
CONSTRUCTED A NEW FACTORY OR REOPENED A FACTORY 
THAT WAS NOT OPERATED SINCE BEFORE 1998.—If a new 
entrant constructs a new sugar beet processing factory, 
or acquires and reopens a sugar beet processing factory 
that last processed sugar beets prior to the 1998 crop 
year and there is no allocation currently associated 
with the factory, 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 so 
as to enable the new entrant to achieve a factory 
utilization rate comparable to the factory utiliza-
tion rates of other similarly-situated processors; 
and 
‘‘(II) reduce the allocations for beet sugar of 
all other processors on a pro rata basis to reflect 
the allocation to the new entrant.
H. R. 2419—64 
‘‘(iii) ALLOCATION FOR A NEW ENTRANT THAT HAS 
ACQUIRED AN EXISTING FACTORY WITH A PRODUCTION 
HISTORY.— 
‘‘(I) IN GENERAL.—If a new entrant acquires 
an existing factory that has processed sugar beets 
from the 1998 or subsequent crop year and has 
a production history, on the mutual agreement 
of the new entrant and the company currently 
holding the allocation associated with the factory, 
the Secretary shall transfer to the new entrant 
a portion of the allocation of the current allocation 
holder to reflect the historical contribution of the 
production of the 1 or more sold factories to the 
total allocation of the current allocation holder, 
unless the new entrant and current allocation 
holder have agreed upon the transfer of a different 
portion of the allocation of the current allocation 
holder, in which case, the Secretary shall transfer 
that portion agreed upon by the new entrant and 
the current allocation holder. 
‘‘(II) PROHIBITION.—In the absence of a mutual 
agreement described in subclause (I), the new 
entrant shall be ineligible for a beet sugar alloca-
tion. 
‘‘(iv) APPEALS.—Any decision made under this sub-
section may be appealed to the Secretary in accordance 
with section 359i.’’. 
(e) REASSIGNMENT OF DEFICITS.—Section 359e(b) of the Agricul-
tural Adjustment Act of 1938 (7 U.S.C. 1359ee(b)) is amended 
in paragraphs (1)(D) and (2)(C), by inserting ‘‘of raw cane sugar’’ 
after ‘‘imports’’ each place it appears. 
(f) PROVISIONS APPLICABLE TO PRODUCERS.—Section 359f(c) of 
the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359ff(c)) is 
amended— 
(1) by striking paragraph (8); 
(2) by redesignating paragraphs (1) through (7) as para-
graphs (2) through (8), respectively; 
(3) by inserting before paragraph (2) (as so redesignated) 
the following: 
‘‘(1) DEFINITION OF SEED.— 
‘‘(A) IN GENERAL.—In this subsection, the term ‘seed’ 
means only those varieties of seed that are dedicated to 
the production of sugarcane from which is produced sugar 
for human consumption. 
‘‘(B) EXCLUSION.—The term ‘seed’ does not include seed 
of a high-fiber cane variety dedicated to other uses, as 
determined by the Secretary’’; 
(4) in paragraph (3) (as so redesignated)— 
(A) in the first sentence— 
(i) by striking ‘‘paragraph (1)’’ and inserting ‘‘para-
graph (2)’’; and 
(ii) by inserting ‘‘sugar produced from’’ after 
‘‘quantity of’’; and 
(B) in the second sentence, by striking ‘‘paragraph 
(7)’’ and inserting ‘‘paragraph (8)’’;
H. R. 2419—65 
(5) in the first sentence of paragraph (6)(C) (as so redesig-
nated), by inserting ‘‘for sugar’’ before ‘‘in excess of the farm’s 
proportionate share’’; and 
(6) in paragraph (8) (as so redesignated), by inserting 
‘‘sugar from’’ after ‘‘the amount of’’. 
(g) SPECIAL RULES.—Section 359g of the Agricultural Adjust-
ment Act of 1938 (7 U.S.C. 1359gg) is amended— 
(1) by striking subsection (a) and inserting the following: 
‘‘(a) TRANSFER OF ACREAGE BASE HISTORY.— 
‘‘(1) TRANSFER
AUTHORIZED.—For the purpose of estab-
lishing 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. 
‘‘(2) CONVERTED ACREAGE BASE.— 
‘‘(A) IN GENERAL.—Sugarcane acreage base established 
under section 359f(c) that has been or is converted to 
nonagricultural use on or after May 13, 2002, may be 
transferred to other land suitable for the production of 
sugarcane that can be delivered to a processor in a propor-
tionate share State in accordance with this paragraph. 
‘‘(B) NOTIFICATION.—Not later than 90 days after the 
Secretary becomes aware of a conversion of any sugarcane 
acreage base to a nonagricultural use, the Secretary shall 
notify the 1 or more affected landowners of the transfer-
ability of the applicable sugarcane acreage base. 
‘‘(C) INITIAL TRANSFER PERIOD.—The owner of the base 
attributable to the acreage at the time of the conversion 
shall be afforded 90 days from the date of the receipt 
of the notification under subparagraph (B) to transfer the 
base to 1 or more farms owned by the owner. 
‘‘(D) GROWER OF RECORD.—If a transfer under subpara-
graph (C) cannot be accomplished during the period speci-
fied in that subparagraph, the grower of record with regard 
to the acreage base on the date on which the acreage 
was converted to nonagricultural use shall— 
‘‘(i) be notified; and 
‘‘(ii) have 90 days from the date of the receipt 
of the notification to transfer the base to 1 or more 
farms operated by the grower. 
‘‘(E) POOL DISTRIBUTION.— 
‘‘(i) IN
GENERAL.—If transfers under subpara-
graphs (B) and (C) cannot be accomplished during the 
periods specified in those subparagraphs, the county 
committee of the Farm Service Agency for the 
applicable county shall place the acreage base in a 
pool for possible assignment to other farms. 
‘‘(ii) ACCEPTANCE OF REQUESTS.—After providing 
reasonable notice to farm owners, operators, and 
growers of record in the county, the county committee 
shall accept requests from owners, operators, and 
growers of record in the county. 
‘‘(iii) ASSIGNMENT.—The county committee shall 
assign the acreage base to other farms in the county 
that are eligible and capable of accepting the acreage
H. R. 2419—66 
base, based on a random drawing from among the 
requests received under clause (ii). 
‘‘(F) STATEWIDE REALLOCATION.— 
‘‘(i) IN
GENERAL.—Any acreage base remaining 
unassigned after the transfers and processes described 
in subparagraphs (A) through (E) shall be made avail-
able to the State committee of the Farm Service Agency 
for allocation among the remaining county committees 
in the State representing counties with farms eligible 
for assignment of the base, based on a random drawing. 
‘‘(ii) ALLOCATION.—Any county committee receiving 
acreage base under this subparagraph shall allocate 
the acreage base to eligible farms using the process 
described in subparagraph (E). 
‘‘(G) STATUS OF REASSIGNED BASE.—After acreage base 
has been reassigned in accordance with this subparagraph, 
the acreage base shall— 
‘‘(i) remain on the farm; and 
‘‘(ii) be subject to the transfer provisions of para-
graph (1).’’; and 
(2) in subsection (d)— 
(A) in paragraph (1)— 
(i) by inserting ‘‘affected’’ before ‘‘crop-share 
owners’’ each place it appears; and 
(ii) by striking ‘‘, and from the processing company 
holding the applicable allocation for such shares,’’; and 
(B) in paragraph (2), by striking ‘‘based on’’ and all 
that follows through the end of subparagraph (B) and 
inserting ‘‘based on— 
‘‘(A) the number of acres of sugarcane base being trans-
ferred; and 
‘‘(B) the pro rata amount of allocation at the processing 
company holding the applicable allocation that equals the 
contribution of the grower to allocation of the processing 
company for the sugarcane acreage base being trans-
ferred.’’. 
(h) APPEALS.—Section 359i of the Agricultural Adjustment Act 
of 1938 (7 U.S.C. 1359ii) is amended— 
(1) in subsection (a), by inserting ‘‘or 359g(d)’’ after ‘‘359f’’; 
and 
(2) by striking subsection (c). 
(i) REALLOCATING SUGAR QUOTA IMPORT SHORTFALLS.—Section 
359k of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359kk) 
is repealed. 
(j) ADMINISTRATION OF TARIFF RATE QUOTAS.—Part VII of sub-
title B of title III of the Agricultural Adjustment Act of 1938 
(7 U.S.C. 1359aa) (as amended by subsection (i)) is amended by 
adding at the end the following: 
‘‘SEC. 359k. ADMINISTRATION OF TARIFF RATE QUOTAS. 
‘‘(a) ESTABLISHMENT.— 
‘‘(1) IN
GENERAL.—Except as provided in paragraph (2) 
and notwithstanding any other provision of law, at the begin-
ning of the quota year, the Secretary shall establish the tariff- 
rate quotas for raw cane sugar and refined sugars at the 
minimum level necessary to comply with obligations under
H. R. 2419—67 
international trade agreements that have been approved by 
Congress. 
‘‘(2) EXCEPTION.—Paragraph (1) shall not apply to specialty 
sugar. 
‘‘(b) ADJUSTMENT.— 
‘‘(1) BEFORE APRIL 1.—Before April 1 of each fiscal year, 
if there is an emergency shortage of sugar in the United States 
market that is caused by a war, flood, hurricane, or other 
natural disaster, or other similar event as determined by the 
Secretary— 
‘‘(A) the Secretary shall take action to increase the 
supply of sugar in accordance with sections 359c(b)(2) and 
359e(b), including an increase in the tariff-rate quota for 
raw cane sugar to accommodate the reassignment to 
imports; and 
‘‘(B) if there is still a shortage of sugar in the United 
States market, and marketing of domestic sugar has been 
maximized, and domestic raw cane sugar refining capacity 
has been maximized, the Secretary may increase the tariff- 
rate quota for refined sugars sufficient to accommodate 
the supply increase, if the further increase will not threaten 
to result in the forfeiture of sugar pledged as collateral 
for a loan under section 156 of the Federal Agriculture 
Improvement and Reform Act of 1996 (7 U.S.C. 7272). 
‘‘(2) ON OR AFTER APRIL 1.—On or after April 1 of each 
fiscal year— 
‘‘(A) the Secretary may take action to increase the 
supply of sugar in accordance with sections 359c(b)(2) and 
359e(b), including an increase in the tariff-rate quota for 
raw cane sugar to accommodate the reassignment to 
imports; and 
‘‘(B) if there is still a shortage of sugar in the United 
States market, and marketing of domestic sugar has been 
maximized, the Secretary may increase the tariff-rate quota 
for raw cane sugar if the further increase will not threaten 
to result in the forfeiture of sugar pledged as collateral 
for a loan under section 156 of the Federal Agriculture 
Improvement and Reform Act of 1996 (7 U.S.C. 7272).’’. 
(k) PERIOD OF EFFECTIVENESS.—Part VII of subtitle B of title 
III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359aa) 
(as amended by subsection (j)) is amended by adding at the end 
the following: 
‘‘SEC. 359l. PERIOD OF EFFECTIVENESS. 
‘‘(a) IN GENERAL.—This part shall be effective only for the 
2008 through 2012 crop years for sugar. 
‘‘(b) TRANSITION.—The Secretary shall administer flexible mar-
keting allotments for sugar for the 2007 crop year for sugar on 
the terms and conditions provided in this part as in effect on 
the day before the date of enactment of this section.’’. 
SEC. 1404. STORAGE FACILITY LOANS. 
Section 1402(c) of the Farm Security and Rural Investment 
Act of 2002 (7 U.S.C. 7971(c)) is amended— 
(1) in paragraph (1), by striking ‘‘and’’ at the end; 
(2) by redesignating paragraph (2) as paragraph (3); 
(3) by inserting after paragraph (1) the following: 
‘‘(2) not include any penalty for prepayment; and’’; and
H. R. 2419—68 
(4) in paragraph (3) (as redesignated by paragraph (2)), 
by inserting ‘‘other’’ after ‘‘on such’’. 
SEC. 1405. COMMODITY CREDIT CORPORATION STORAGE PAYMENTS. 
Subtitle E of the Federal Agriculture Improvement and Reform 
Act of 1996 (7 U.S.C. 7281 et seq.) is amended by adding at 
the end the following: 
‘‘SEC. 167. COMMODITY CREDIT CORPORATION STORAGE PAYMENTS. 
‘‘(a) INITIAL CROP YEARS.—Notwithstanding any other provision 
of law, for each of the 2008 through 2011 crop years, the Commodity 
Credit Corporation shall establish rates for the storage of forfeited 
sugar in an amount that is not less than— 
‘‘(1) in the case of refined sugar, 15 cents per hundred-
weight of refined sugar per month; and 
‘‘(2) in the case of raw cane sugar, 10 cents per hundred-
weight of raw cane sugar per month. 
‘‘(b) SUBSEQUENT CROP YEARS.—For each of the 2012 and subse-
quent crop years, the Commodity Credit Corporation shall establish 
rates for the storage of forfeited sugar in the same manner as 
was used on the day before the date of enactment of this section.’’. 
Subtitle E—Dairy 
SEC. 1501. DAIRY PRODUCT PRICE SUPPORT PROGRAM. 
(a) DEFINITION OF NET REMOVALS.—In this section, the term 
‘‘net removals’’ means— 
(1) the sum of— 
(A) the quantity of a product described in subsection 
(b) purchased by the Commodity Credit Corporation under 
this section; and 
(B) the quantity of the product exported under section 
153 of the Food Security Act of 1985 (15 U.S.C. 713a– 
14); less 
(2) the quantity of the product sold for unrestricted use 
by the Commodity Credit Corporation. 
(b) SUPPORT ACTIVITIES.—During the period beginning on 
January 1, 2008, and ending December 31, 2012, the Secretary 
shall support the price of cheddar cheese, butter, and nonfat dry 
milk through the purchase of such products made from milk pro-
duced in the United States. 
(c) PURCHASE PRICE.—To carry out subsection (b) during the 
period specified in that subsection, the Secretary shall purchase— 
(1) cheddar cheese in blocks at not less than $1.13 per 
pound; 
(2) cheddar cheese in barrels at not less than $1.10 per 
pound; 
(3) butter at not less than $1.05 per pound; and 
(4) nonfat dry milk at not less than $0.80 per pound. 
(d) TEMPORARY PRICE ADJUSTMENT TO AVOID EXCESS INVEN-
TORIES.— 
(1) ADJUSTMENTS AUTHORIZED.—The Secretary may adjust 
the minimum purchase prices established under subsection (c) 
only as permitted under this subsection. 
(2) CHEESE INVENTORIES IN EXCESS OF 200,000,000 POUNDS.— 
If net removals for a period of 12 consecutive months exceed 
200,000,000 pounds of cheese, but do not exceed 400,000,000
H. R. 2419—69 
pounds, the Secretary may reduce the purchase prices under 
paragraphs (1) and (2) of subsection (c) during the immediately 
following month by not more than 10 cents per pound. 
(3) CHEESE INVENTORIES IN EXCESS OF 400,000,000 POUNDS.— 
If net removals for a period of 12 consecutive months exceed 
400,000,000 pounds of cheese, the Secretary may reduce the 
purchase prices under paragraphs (1) and (2) of subsection 
(c) during the immediately following month by not more than 
20 cents per pound. 
(4) BUTTER INVENTORIES IN EXCESS OF 450,000,000 POUNDS.— 
If net removals for a period of 12 consecutive months exceed 
450,000,000 pounds of butter, but do not exceed 650,000,000 
pounds, the Secretary may reduce the purchase price under 
subsection (c)(3) during the immediately following month by 
not more than 10 cents per pound. 
(5) BUTTER INVENTORIES IN EXCESS OF 650,000,000 POUNDS.— 
If net removals for a period of 12 consecutive months exceed 
650,000,000 pounds of butter, the Secretary may reduce the 
purchase price under subsection (c)(3) during the immediately 
following month by not more than 20 cents per pound. 
(6) NONFAT DRY MILK INVENTORIES IN EXCESS OF 600,000,000 
POUNDS.—If net removals for a period of 12 consecutive months 
exceed 600,000,000 pounds of nonfat dry milk, but do not exceed 
800,000,000 pounds, the Secretary may reduce the purchase 
price under subsection (c)(4) during the immediately following 
month by not more than 5 cents per pound. 
(7) NONFAT DRY MILK INVENTORIES IN EXCESS OF 800,000,000 
POUNDS.—If net removals for a period of 12 consecutive months 
exceed 800,000,000 pounds of nonfat dry milk, the Secretary 
may reduce the purchase price under subsection (c)(4) during 
the immediately following month by not more than 10 cents 
per pound. 
(e) UNIFORM PURCHASE PRICE.—The prices that the Secretary 
pays for cheese, butter, or nonfat dry milk, respectively, under 
subsection (b) shall be uniform for all regions of the United States. 
(f) SALES FROM INVENTORIES.—In the case of each commodity 
specified in subsection (c) that is available for unrestricted use 
in the inventory of the Commodity Credit Corporation, the Secretary 
may sell the commodity at the market prices prevailing for that 
commodity at the time of sale, except that the sale price may 
not be less than 110 percent of the minimum purchase price speci-
fied in subsection (c) for that commodity. 
SEC. 1502. DAIRY FORWARD PRICING PROGRAM. 
(a) PROGRAM REQUIRED.—The Secretary shall establish a pro-
gram under which milk producers and cooperative associations of 
producers are authorized to voluntarily enter into forward price 
contracts with milk handlers. 
(b) MINIMUM MILK PRICE REQUIREMENTS.—Payments made by 
milk handlers to milk producers and cooperative associations of 
producers, and prices received by milk producers and cooperative 
associations, in accordance with the terms of a forward price con-
tract authorized by subsection (a), shall be treated as satisfying— 
(1) all uniform and minimum milk price requirements of 
subparagraphs (B) and (F) of paragraph (5) of section 8c of 
the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted
H. R. 2419—70 
with amendments by the Agricultural Marketing Agreement 
Act of 1937; and 
(2) the total payment requirement of subparagraph (C) 
of that paragraph. 
(c) MILK COVERED BY PROGRAM.— 
(1) COVERED MILK.—The program shall apply only with 
respect to the marketing of federally regulated milk that— 
(A) is not classified as Class I milk or otherwise 
intended for fluid use; and 
(B) is in the current of interstate or foreign commerce 
or directly burdens, obstructs, or affects interstate or for-
eign commerce in federally regulated milk. 
(2) RELATION TO CLASS I MILK.—To assist milk handlers 
in complying with paragraph (1)(A) without having to segregate 
or otherwise individually track the source and disposition of 
milk, a milk handler may allocate milk receipts from producers, 
cooperatives, and other sources that are not subject to a forward 
contract to satisfy the obligations of the handler with regard 
to Class I milk usage. 
(d) VOLUNTARY PROGRAM.— 
(1) IN GENERAL.—A milk handler may not require participa-
tion in a forward pricing contract as a condition of the handler 
receiving milk from a producer or cooperative association of 
producers. 
(2) 
PRICING.—A 
producer 
or 
cooperative 
association 
described in paragraph (1) may continue to have their milk 
priced in accordance with the minimum payment provisions 
of the Federal milk marketing order. 
(3) COMPLAINTS.— 
(A) IN GENERAL.—The Secretary shall investigate com-
plaints made by producers or cooperative associations of 
coercion by handlers to enter into forward contracts. 
(B) ACTION.—If the Secretary finds evidence of coer-
cion, the Secretary shall take appropriate action. 
(e) DURATION.— 
(1) NEW CONTRACTS.—No forward price contract may be 
entered into under the program established under this section 
after September 30, 2012. 
(2) APPLICATION.—No forward contract entered into under 
the program may extend beyond September 30, 2015. 
SEC. 1503. DAIRY EXPORT INCENTIVE PROGRAM. 
(a) EXTENSION.—Section 153(a) of the Food Security Act of 
1985 (15 U.S.C. 713a–14(a)) is amended by striking ‘‘2007’’ and 
inserting ‘‘2012’’. 
(b) COMPLIANCE WITH TRADE AGREEMENTS.—Section 153 of 
the Food Security Act of 1985 (15 U.S.C. 713a–14) is amended— 
(1) in subsection (c), by striking paragraph (3) and inserting 
the following: 
‘‘(3) the maximum volume of dairy product exports allow-
able consistent with the obligations of the United States under 
the Uruguay Round Agreements approved under section 101 
of the Uruguay Round Agreements Act (19 U.S.C. 3511) is 
exported under the program each year (minus the volume sold 
under section 1163 of this Act during that year), except to 
the extent that the export of such a volume under the program
H. R. 2419—71 
would, in the judgment of the Secretary, exceed the limitations 
on the value permitted under subsection (f); and’’; and. 
(2) in subsection (f), by striking paragraph (1) and inserting 
the following: 
‘‘(1) FUNDS AND COMMODITIES.—Except as provided in para-
graph (2), the Commodity Credit Corporation shall in each 
year use money and commodities for the program under this 
section in the maximum amount consistent with the obligations 
of the United States under the Uruguay Round Agreements 
approved under section 101 of the Uruguay Round Agreements 
Act (19 U.S.C. 3511), minus the amount expended under section 
1163 of this Act during that year.’’. 
SEC. 1504. REVISION OF FEDERAL MARKETING ORDER AMENDMENT 
PROCEDURES. 
Section 8c of the Agricultural Adjustment Act (7 U.S.C. 608c), 
reenacted with amendments by the Agricultural Marketing Agree-
ment Act of 1937, is amended by striking subsection (17) and 
inserting the following: 
‘‘(17) PROVISIONS APPLICABLE TO AMENDMENTS.— 
‘‘(A) APPLICABILITY TO AMENDMENTS.—The provisions 
of this section and section 8d applicable to orders shall 
be applicable to amendments to orders. 
‘‘(B) SUPPLEMENTAL RULES OF PRACTICE.— 
‘‘(i) IN
GENERAL.—Not later than 60 days after 
the date of enactment of this subparagraph, the Sec-
retary shall issue, using informal rulemaking, supple-
mental rules of practice to define guidelines and time-
frames for the rulemaking process relating to amend-
ments to orders. 
‘‘(ii) ISSUES.—At a minimum, the supplemental 
rules of practice shall establish— 
‘‘(I) proposal submission requirements; 
‘‘(II) pre-hearing information session specifica-
tions; 
‘‘(III) written testimony and data request 
requirements; 
‘‘(IV) public participation timeframes; and 
‘‘(V) electronic document submission stand-
ards. 
‘‘(iii) EFFECTIVE DATE.—The supplemental rules of 
practice shall take effect not later than 120 days after 
the date of enactment of this subparagraph, as deter-
mined by the Secretary. 
‘‘(C) HEARING TIMEFRAMES.— 
‘‘(i) IN GENERAL.—Not more than 30 days after 
the receipt of a proposal for an amendment hearing 
regarding a milk marketing order, the Secretary 
shall— 
‘‘(I) issue a notice providing an action plan 
and expected timeframes for completion of the 
hearing not more than 120 days after the date 
of the issuance of the notice; 
‘‘(II)(aa) issue a request for additional informa-
tion to be used by the Secretary in making a 
determination regarding the proposal; and
H. R. 2419—72 
‘‘(bb) if the additional information is not pro-
vided to the Secretary within the timeframe 
requested by the Secretary, issue a denial of the 
request; or 
‘‘(III) issue a denial of the request. 
‘‘(ii) REQUIREMENT.—A post-hearing brief may be 
filed under this paragraph not later than 60 days after 
the date of an amendment hearing regarding a milk 
marketing order. 
‘‘(iii) RECOMMENDED DECISIONS.—A recommended 
decision on a proposed amendment to an order shall 
be issued not later than 90 days after the deadline 
for the submission of post-hearing briefs. 
‘‘(iv) FINAL DECISIONS.—A final decision on a pro-
posed amendment to an order shall be issued not later 
than 60 days after the deadline for submission of com-
ments and exceptions to the recommended decision 
issued under clause (iii). 
‘‘(D) INDUSTRY ASSESSMENTS.—If the Secretary deter-
mines it is necessary to improve or expedite rulemaking 
under this subsection, the Secretary may impose an assess-
ment on the affected industry to supplement appropriated 
funds for the procurement of service providers, such as 
court reporters. 
‘‘(E) USE OF INFORMAL RULEMAKING.—The Secretary 
may use rulemaking under section 553 of title 5, United 
States Code, to amend orders, other than provisions of 
orders that directly affect milk prices. 
‘‘(F) AVOIDING DUPLICATION.—The Secretary shall not 
be required to hold a hearing on any amendment proposed 
to be made to a milk marketing order in response to an 
application for a hearing on the proposed amendment if— 
‘‘(i) the application requesting the hearing is 
received by the Secretary not later than 90 days after 
the date on which the Secretary has announced the 
decision on a previously proposed amendment to that 
order; and 
‘‘(ii) the 2 proposed amendments are essentially 
the same, as determined by the Secretary. 
‘‘(G) MONTHLY FEED AND FUEL COSTS FOR MAKE ALLOW-
ANCES.—As part of any hearing to adjust make allowances 
under marketing orders commencing prior to September 
30, 2012, the Secretary shall— 
‘‘(i) determine the average monthly prices of feed 
and fuel incurred by dairy producers in the relevant 
marketing area; 
‘‘(ii) consider the most recent monthly feed and 
fuel price data available; and 
‘‘(iii) consider those prices in determining whether 
or not to adjust make allowances.’’. 
SEC. 1505. DAIRY INDEMNITY PROGRAM. 
Section 3 of Public Law 90–484 (7 U.S.C. 450l) is amended 
by striking ‘‘2007’’ and inserting ‘‘2012’’. 
SEC. 1506. MILK INCOME LOSS CONTRACT PROGRAM. 
(a) DEFINITIONS.—In this section:
H. R. 2419—73 
(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. 
(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 (e); 
(2) the amount equal to— 
(A) $16.94 per hundredweight, as adjusted under sub-
section (d); less 
(B) the Class I milk price per hundredweight in Boston 
under the applicable Federal milk marketing order; by 
(3)(A) for the period beginning October 1, 2007, and ending 
September 30, 2008, 34 percent; 
(B) for the period beginning October 1, 2008, and ending 
August 31, 2012, 45 percent; and 
(C) for the period beginning September 1, 2012, and there-
after, 34 percent. 
(d) PAYMENT RATE ADJUSTMENT FOR FEED PRICES.— 
(1) INITIAL
ADJUSTMENT
AUTHORITY.—During the period 
beginning on January 1, 2008, and ending on August 31, 2012, 
if the National Average Dairy Feed Ration Cost for a month 
during that period is greater than $7.35 per hundredweight, 
the amount specified in subsection (c)(2)(A) used to determine 
the payment rate for that month shall be increased by 45 
percent of the percentage by which the National Average Dairy 
Feed Ration Cost exceeds $7.35 per hundredweight. 
(2) SUBSEQUENT ADJUSTMENT AUTHORITY.—For any month 
beginning on or after September 1, 2012, if the National Aver-
age Dairy Feed Ration Cost for the month is greater than 
$9.50 per hundredweight, the amount specified in subsection 
(c)(2)(A) used to determine the payment rate for that month 
shall be increased by 45 percent of the percentage by which 
the National Average Dairy Feed Ration Cost exceeds $9.50 
per hundredweight.
H. R. 2419—74 
(3) NATIONAL AVERAGE DAIRY FEED RATION COST.—For each 
month, the Secretary shall calculate a National Average Dairy 
Feed Ration Cost per hundredweight using the same procedures 
(adjusted to a hundredweight basis) used to calculate the feed 
components of the estimated price of 16% Mixed Dairy Feed 
per pound noted on page 33 of the USDA March 2008 Agricul-
tural Prices publication (including the data and factors noted 
in footnote 4). 
(e) 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.— 
(A) IN GENERAL.—The payment quantity for all pro-
ducers on a single dairy operation for which the producers 
receive payments under subsection (b) shall not exceed— 
(i) for the period beginning October 1, 2007, and 
ending September 30, 2008, 2,400,000 pounds; 
(ii) for the period beginning October 1, 2008, and 
ending August 31, 2012, 2,985,000 pounds for each 
fiscal year; and 
(iii) 
effective 
beginning 
September 
1, 
2012, 
2,400,000 pounds per fiscal year. 
(B) STANDARDS.—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 implementing 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 ensure that a 
producer does not reconstitute a dairy operation for the sole 
purpose of receiving additional payments under this section. 
(f) 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. 
(g) SIGNUP.—The Secretary shall offer to enter into contracts 
under this section during the period beginning on the date that 
is 90 days after the date of enactment of this Act and ending 
on September 30, 2012. 
(h) DURATION OF CONTRACT.— 
(1) IN GENERAL.—Except as provided in paragraph (2), any 
contract entered into by producers on a dairy farm under this 
section shall cover eligible production marketed by the pro-
ducers on the dairy farm during the period starting with the 
first day of month the producers on the dairy farm enter into 
the contract and ending on September 30, 2012. 
(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. R. 2419—75 
SEC. 1507. DAIRY PROMOTION AND RESEARCH PROGRAM. 
(a) 
EXTENSION
OF
DAIRY
PROMOTION
AND
RESEARCH 
AUTHORITY.—Section 113(e)(2) of the Dairy Production Stabilization 
Act of 1983 (7 U.S.C. 4504(e)(2)) is amended by striking ‘‘2007’’ 
and inserting ‘‘2012’’. 
(b) DEFINITION OF UNITED STATES FOR PROMOTION PROGRAM.— 
Section 111 of the Dairy Production Stabilization Act of 1983 (7 
U.S.C. 4502) is amended— 
(1) by striking subsection (l) and inserting the following: 
‘‘(l) the term ‘United States’, when used in a geographical 
sense, means all of the States, the District of Columbia, and the 
Commonwealth of Puerto Rico;’’; and 
(2) in subsection (m), by striking ‘‘(as defined in subsection 
(l))’’. 
(c) DEFINITION OF UNITED STATES FOR RESEARCH PROGRAM.— 
Section 130 of the Dairy Production Stabilization Act of 1983 (7 
U.S.C. 4531)) is amended by striking paragraph (12) and inserting 
the following: 
‘‘(12) the term ‘United States’, when used in a geographical 
sense, means all of the States, the District of Columbia, and 
the Commonwealth of Puerto Rico.’’. 
(d) ASSESSMENT RATE FOR IMPORTED DAIRY PRODUCTS.—Section 
113(g) of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 
4504(g)) is amended by striking paragraph (3) and inserting the 
following: 
‘‘(3) RATE.— 
‘‘(A) IN GENERAL.—The rate of assessment for milk 
produced in the United States prescribed by the order 
shall be 15 cents per hundredweight of milk for commercial 
use or the equivalent thereof, as determined by the Sec-
retary. 
‘‘(B) IMPORTED DAIRY PRODUCTS.—The rate of assess-
ment for imported dairy products prescribed by the order 
shall be 7.5 cents per hundredweight of milk for commercial 
use or the equivalent thereof, as determined by the Sec-
retary.’’. 
(e) TIME
AND
METHOD
OF
IMPORTER
PAYMENTS.—Section 
113(g)(6) of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 
4504(g)(6)) is amended— 
(1) by striking subparagraph (B); and 
(2) by redesignating subparagraph (C) as subparagraph 
(B). 
(f) REFUND
OF ASSESSMENTS
ON CERTAIN IMPORTED DAIRY 
PRODUCTS.—Section 113(g) of the Dairy Production Stabilization 
Act of 1983 (7 U.S.C. 4504(g)) is amended by adding at the end 
the following: 
‘‘(7) REFUND OF ASSESSMENTS ON CERTAIN IMPORTED PROD-
UCTS.— 
‘‘(A) IN GENERAL.—An importer shall be entitled to 
a refund of any assessment paid under this subsection 
on imported dairy products imported under a contract 
entered into prior to the date of enactment of the Food, 
Conservation, and Energy Act of 2008. 
‘‘(B) EXPIRATION.—Refunds under subparagraph (A) 
shall expire 1 year after the date of enactment of the 
Food, Conservation, and Energy Act of 2008.’’.
H. R. 2419—76 
SEC. 1508. REPORT ON DEPARTMENT OF AGRICULTURE REPORTING 
PROCEDURES FOR NONFAT DRY MILK. 
Not later than 90 days after the date of enactment of this 
Act, the Secretary 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 regarding Depart-
ment of Agriculture reporting procedures for nonfat dry milk and 
the impact of the procedures on Federal milk marketing order 
minimum prices during the period beginning on July 1, 2006, and 
ending on the date of enactment of this Act. 
SEC. 1509. FEDERAL MILK MARKETING ORDER REVIEW COMMISSION. 
(a) ESTABLISHMENT.—Subject to the availability of appropria-
tions to carry out this section, the Secretary shall establish a 
commission to be known as the ‘‘Federal Milk Marketing Order 
Review Commission’’ (referred to in this section as the ‘‘commis-
sion’’), which shall conduct a comprehensive review and evaluation 
of— 
(1) the Federal milk marketing order system in effect on 
the date of establishment of the commission; and 
(2) non-Federal milk marketing order systems. 
(b) ELEMENTS OF REVIEW AND EVALUATION.—As part of the 
review and evaluation under subsection (a), the commission shall 
consider legislative and regulatory options for— 
(1) ensuring that the competitiveness of dairy products 
with other competing products in the marketplace is preserved 
and enhanced; 
(2) enhancing the competitiveness of American dairy pro-
ducers in world markets; 
(3) ensuring the competitiveness and transparency in dairy 
pricing; 
(4) streamlining and expediting the process by which 
amendments to Federal milk market orders are adopted; 
(5) simplifying the Federal milk marketing order system; 
(6) evaluating whether the Federal milk marketing order 
system serves the interests of dairy producers, consumers, and 
dairy processors; and 
(7) evaluating the nutritional composition of milk, including 
the potential benefits and costs of adjusting the milk content 
standards. 
(c) MEMBERSHIP.— 
(1) COMPOSITION.—The commission shall consist of 14 mem-
bers. 
(2) MEMBERS.—As soon as practicable after the date on 
which funds are first made available to carry out this section, 
the Secretary shall appoint members to the commission 
according to the following requirements: 
(A) At least 1 member shall represent a national con-
sumer organization. 
(B) At least 4 members shall represent land-grant 
universities or NLGCA Institutions (as defined in section 
1404 of the National Agricultural Research, Extension, and 
Teaching Policy Act of 1977 (7 U.S.C. 3103)) with accredited 
dairy economic programs, with at least 2 of those members 
being experts in the field of economics. 
(C) At least 1 member shall represent the food and 
beverage retail sector.
H. R. 2419—77 
(D) 4 dairy producers and 4 dairy processors, appointed 
so as to balance geographical distribution of milk produc-
tion and dairy processing, reflect all segments of dairy 
processing, and represent all regions of the United States 
equitably, including States that operate outside of a Federal 
milk marketing order. 
(3) CHAIR.—The commission shall elect 1 of the appointed 
members of the commission to serve as chairperson for the 
duration of the proceedings of the commission. 
(4) VACANCY.—Any vacancy occurring before the termi-
nation of the commission shall be filled in the same manner 
as the original appointment. 
(5) COMPENSATION.—Members of the commission shall 
serve without compensation, but shall be reimbursed by the 
Secretary from existing budget authority for necessary and 
reasonable expenses incurred in the performance of the duties 
of the commission. 
(d) REPORT.— 
(1) IN GENERAL.—Not later than 2 years after the date 
of the first meeting of the commission, the commission shall 
submit to Congress and the Secretary a report describing the 
results of the review and evaluation conducted under this sec-
tion, including such recommendations regarding the legislative 
and regulatory options considered under subsection (b) as the 
commission considers to be appropriate. 
(2) OPINIONS.—The report findings shall reflect, to the max-
imum extent practicable, a consensus opinion of the commission 
members, but the report may include majority and minority 
findings regarding those matters for which consensus was not 
reached. 
(e) ADVISORY NATURE.—The commission is wholly advisory in 
nature, and the recommendations of the commission are nonbinding. 
(f) NO EFFECT ON EXISTING PROGRAMS.—The Secretary shall 
not allow the existence of the commission to impede, delay, or 
otherwise affect any decisionmaking process of the Department 
of Agriculture, including any rulemaking procedures planned, pro-
posed, or near completion. 
(g) ADMINISTRATIVE ASSISTANCE.—The Secretary shall provide 
administrative support to the commission, and expend to carry 
out this section such funds as necessary from budget authority 
available to the Secretary. 
(h) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 
to be appropriated such sums as are necessary to carry out this 
section. 
(i) TERMINATION.—The commission shall terminate effective on 
the date of the submission of the report under subsection (d). 
SEC. 1510. MANDATORY REPORTING OF DAIRY COMMODITIES. 
(a) ELECTRONIC REPORTING.—Section 273 of the Agricultural 
Marketing Act of 1946 (7 U.S.C. 1637b) is amended— 
(1) by redesignating subsection (d) as subsection (e); and 
(2) by inserting after subsection (c) the following: 
‘‘(d) ELECTRONIC REPORTING.— 
‘‘(1) IN GENERAL.—Subject to the availability of funds under 
paragraph (3), the Secretary shall establish an electronic 
reporting system to carry out this section.
H. R. 2419—78 
‘‘(2) FREQUENCY OF REPORTS.—After the establishment of 
the electronic reporting system in accordance with paragraph 
(1), the Secretary shall increase the frequency of the reports 
required under this section. 
‘‘(3) 
AUTHORIZATION
OF
APPROPRIATIONS.—There 
are 
authorized to be appropriated such sums as are necessary to 
carry out this subsection.’’. 
(b) QUARTERLY AUDITS.—Section 273(c) of the Agricultural Mar-
keting Act of 1946 (7 U.S.C. 1637b(c)) is amended by striking 
paragraph (3) and inserting the following: 
‘‘(3) VERIFICATION.— 
‘‘(A) IN
GENERAL.—The Secretary shall take such 
actions as the Secretary considers necessary to verify the 
accuracy of the information submitted or reported under 
this subtitle. 
‘‘(B) QUARTERLY
AUDITS.—The Secretary shall quar-
terly conduct an audit of information submitted or reported 
under this subtitle and compare such information with 
other related dairy market statistics.’’. 
Subtitle F—Administration 
SEC. 1601. ADMINISTRATION GENERALLY. 
(a) USE OF COMMODITY CREDIT CORPORATION.—Except as other-
wise provided in this title, the Secretary shall use the funds, facili-
ties, 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.—Except as otherwise provided in this sub-
section, not later than 90 days after the date of enactment 
of this Act, the Secretary and the Commodity Credit Corpora-
tion, as appropriate, shall promulgate such regulations as are 
necessary to implement this title and the amendments made 
by this title. 
(2) PROCEDURE.—The promulgation of the regulations and 
administration of this title and the amendments made by this 
title shall be made without regard to— 
(A) chapter 35 of title 44, United States Code (com-
monly known as the ‘‘Paperwork Reduction Act’’); 
(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. 
(4) INTERIM
REGULATIONS.—Notwithstanding paragraphs 
(1) and (2), the Secretary shall implement the amendments 
made by sections 1603 and 1604 for the 2009 crop, fiscal, 
or program year, as appropriate, through the promulgation 
of an interim rule.
H. R. 2419—79 
(d) ADJUSTMENT AUTHORITY RELATED TO TRADE AGREEMENTS 
COMPLIANCE.— 
(1) REQUIRED DETERMINATION; ADJUSTMENT.—If the Sec-
retary determines that expenditures under this title 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)) 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 of the House of Representa-
tives or the Committee on Agriculture, Nutrition, and Forestry 
of the Senate a report describing the determination made under 
that paragraph and the extent of the adjustment to be made. 
(e) TREATMENT OF ADVANCE PAYMENT OPTION.—Section 1601(d) 
of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 
7991(d)) is amended— 
(1) in paragraph (1), by striking ‘‘and’’ at the end; 
(2) in paragraph (2), by striking the period at the end 
and inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(3) the advance payment of direct payments and counter- 
cyclical payments under title I of the Food, Conservation, and 
Energy Act of 2008.’’. 
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 2008 through 2012 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, 2012: 
(1) Parts II through V of subtitle B of title III (7 U.S.C. 
1326 et seq.). 
(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 et seq.). 
(4) Title IV (7 U.S.C. 1401 et seq.). 
(b) AGRICULTURAL ACT OF 1949.—The following provisions of 
the Agricultural Act of 1949 shall not be applicable to the 2008 
through 2012 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, 
2012: 
(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 et seq.).
H. R. 2419—80 
(10) Title IV (7 U.S.C. 1421 et seq.), other than sections 
404, 412, and 416 (7 U.S.C. 1424, 1429, and 1431). 
(11) Title V (7 U.S.C. 1461 et seq.). 
(12) Title VI (7 U.S.C. 1471 et seq.). 
(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 2008 through 2012. 
SEC. 1603. PAYMENT LIMITATIONS. 
(a) EXTENSION OF LIMITATIONS.—Sections 1001 and 1001C(a) 
of the Food Security Act of 1985 (7 U.S.C. 1308, 1308–3(a)) are 
amended by striking ‘‘Farm Security and Rural Investment Act 
of 2002’’ each place it appears and inserting ‘‘Food, Conservation, 
and Energy Act of 2008’’. 
(b) REVISION OF LIMITATIONS.— 
(1) DEFINITIONS.—Section 1001(a) of the Food Security Act 
of 1985 (7 U.S.C. 1308(a)) is amended— 
(A) in the matter preceding paragraph (1), by inserting 
‘‘through section 1001F’’after ‘‘section’’; 
(B) by striking paragraph (2) and redesignating para-
graph (3) as paragraph (5); and 
(C) by inserting after paragraph (1) the following: 
‘‘(2) FAMILY MEMBER.—The term ‘family member’ means 
a person to whom a member in the farming operation is related 
as lineal ancestor, lineal descendant, sibling, spouse, or other-
wise by marriage. 
‘‘(3) LEGAL ENTITY.—The term ‘legal entity’ means an entity 
that is created under Federal or State law and that— 
‘‘(A) owns land or an agricultural commodity; or 
‘‘(B) produces an agricultural commodity. 
‘‘(4) PERSON.—The term ‘person’ means a natural person, 
and does not include a legal entity.’’. 
(2) LIMITATION
ON
DIRECT
PAYMENTS
AND
COUNTER- 
CYCLICAL PAYMENTS.—Section 1001 of the Food Security Act 
of 1985 (7 U.S.C. 1308) is amended by striking subsections 
(b), (c), and (d) and inserting the following: 
‘‘(b) LIMITATION ON DIRECT PAYMENTS, COUNTER-CYCLICAL PAY-
MENTS, AND ACRE PAYMENTS FOR COVERED COMMODITIES (OTHER 
THAN PEANUTS).— 
‘‘(1) DIRECT PAYMENTS.—The total amount of direct pay-
ments received, directly or indirectly, by a person or legal 
entity (except a joint venture or a general partnership) for 
any crop year under subtitle A of title I of the Food, Conserva-
tion, and Energy Act of 2008 for 1 or more covered commodities 
(except for peanuts) may not exceed— 
‘‘(A) in the case of a person or legal entity that does 
not participate in the average crop revenue election pro-
gram under section 1105 of that Act, $40,000; or 
‘‘(B) in the case of a person or legal entity that partici-
pates in the average crop revenue election program under 
section 1105 of that Act, an amount equal to— 
‘‘(i) the payment limit specified in subparagraph 
(A); less
H. R. 2419—81 
‘‘(ii) the amount of the reduction in direct payments 
under section 1105(a)(1) of that Act. 
‘‘(2) COUNTER-CYCLICAL PAYMENTS.—In the case of a person 
or legal entity (except a joint venture or a general partnership) 
that does not participate in the average crop revenue election 
program under section 1105 of the Food, Conservation, and 
Energy Act of 2008, the total amount of counter-cyclical pay-
ments received, directly or indirectly, by the person or legal 
entity for any crop year under subtitle A of title I of that 
Act for 1 or more covered commodities (except for peanuts) 
may not exceed $65,000. 
‘‘(3) ACRE AND COUNTER-CYCLICAL PAYMENTS.—In the case 
of a person or legal entity (except a joint venture or a general 
partnership) that participates in the average crop revenue elec-
tion program under section 1105 of the Food, Conservation, 
and Energy Act of 2008, the total amount of average crop 
revenue election payments and counter-cyclical payments 
received, directly or indirectly, by the person or legal entity 
for any crop year for 1 or more covered commodities (except 
for peanuts) may not exceed the sum of— 
‘‘(A) $65,000; and 
‘‘(B) the amount by which the direct payment limitation 
is reduced under paragraph (1)(B). 
‘‘(c) LIMITATION ON DIRECT PAYMENTS, COUNTER-CYCLICAL PAY-
MENTS, AND ACRE PAYMENTS FOR PEANUTS.— 
‘‘(1) DIRECT PAYMENTS.—The total amount of direct pay-
ments received, directly or indirectly, by a person or legal 
entity (except a joint venture or a general partnership) for 
any crop year under subtitle C of title I of the Food, Conserva-
tion, and Energy Act of 2008 for peanuts may not exceed— 
‘‘(A) in the case of a person or legal entity that does 
not participate in the average crop revenue election pro-
gram under section 1105 of that Act, $40,000; or 
‘‘(B) in the case of a person or legal entity that partici-
pates in the average crop revenue election program under 
section 1105 of that Act, an amount equal to— 
‘‘(i) the payment limit specified in subparagraph 
(A); less 
‘‘(ii) the amount of the reduction in direct payments 
under section 1105(a)(1) of that Act. 
‘‘(2) COUNTER-CYCLICAL PAYMENTS.—In the case of a person 
or legal entity (except a joint venture or a general partnership) 
that does not participate in the average crop revenue election 
program under section 1105 of the Food, Conservation, and 
Energy Act of 2008, the total amount of counter-cyclical pay-
ments received, directly or indirectly, by the person or legal 
entity for any crop year under subtitle C of title I of that 
Act for peanuts may not exceed $65,000. 
‘‘(3) ACRE AND COUNTER-CYCLICAL PAYMENTS.—In the case 
of a person or legal entity (except a joint venture or a general 
partnership) that participates in the average crop revenue elec-
tion program under section 1105 of the Food, Conservation, 
and Energy Act of 2008, the total amount of average crop 
revenue election payments received, directly or indirectly, by 
the person or legal entity for any crop year for peanuts may 
not exceed the sum of— 
‘‘(A) $65,000; and
H. R. 2419—82 
‘‘(B) the amount by which the direct payment limitation 
is reduced under paragraph (1)(B). 
‘‘(d) LIMITATION
ON APPLICABILITY.—Nothing in this section 
authorizes any limitation on any benefit associated with the mar-
keting assistance loan program or the loan deficiency payment 
program under title I of the Food, Conservation, and Energy Act 
of 2008.’’. 
(3) DIRECT ATTRIBUTION.—Section 1001 of the Food Security 
Act of 1985 (7 U.S.C. 1308) is amended— 
(A) by striking subsections (e) and (f) and redesignating 
subsection (g) as subsection (h); and 
(B) by inserting after subsection (d) the following: 
‘‘(e) ATTRIBUTION OF PAYMENTS.— 
‘‘(1) IN GENERAL.—In implementing subsections (b) and (c) 
and a program described in paragraphs (1)(C) and (2)(B) of 
section 1001D(b), the Secretary shall issue such regulations 
as are necessary to ensure that the total amount of payments 
are attributed to a person by taking into account the direct 
and indirect ownership interests of the person in a legal entity 
that is eligible to receive the payments. 
‘‘(2) PAYMENTS TO A PERSON.—Each payment made directly 
to a person shall be combined with the pro rata interest of 
the person in payments received by a legal entity in which 
the person has a direct or indirect ownership interest unless 
the payments of the legal entity have been reduced by the 
pro rata share of the person. 
‘‘(3) PAYMENTS TO A LEGAL ENTITY.— 
‘‘(A) IN GENERAL.—Each payment made to a legal entity 
shall be attributed to those persons who have a direct 
or indirect ownership interest in the legal entity unless 
the payment to the legal entity has been reduced by the 
pro rata share of the person. 
‘‘(B) ATTRIBUTION OF PAYMENTS.— 
‘‘(i) PAYMENT LIMITS.—Except as provided in clause 
(ii), payments made to a legal entity shall not exceed 
the amounts specified in subsections (b) and (c). 
‘‘(ii) EXCEPTION FOR JOINT VENTURES AND GENERAL 
PARTNERSHIPS.—Payments made to a joint venture or 
a general partnership shall not exceed, for each pay-
ment specified in subsections (b) and (c), the amount 
determined by multiplying the maximum payment 
amount specified in subsections (b) and (c) by the 
number of persons and legal entities (other than joint 
ventures and general partnerships) that comprise the 
ownership of the joint venture or general partnership. 
‘‘(iii) REDUCTION.—Payments made to a legal entity 
shall be reduced proportionately by an amount that 
represents the direct or indirect ownership in the legal 
entity by any person or legal entity that has otherwise 
exceeded the applicable maximum payment limitation. 
‘‘(4) 4 LEVELS OF ATTRIBUTION FOR EMBEDDED LEGAL ENTI-
TIES.— 
‘‘(A) IN GENERAL.—Attribution of payments made to 
legal entities shall be traced through 4 levels of ownership 
in legal entities. 
‘‘(B) FIRST
LEVEL.—Any payments made to a legal 
entity (a first-tier legal entity) that is owned in whole
H. R. 2419—83 
or in part by a person shall be attributed to the person 
in an amount that represents the direct ownership in the 
first-tier legal entity by the person. 
‘‘(C) SECOND LEVEL.— 
‘‘(i) IN GENERAL.—Any payments made to a first- 
tier legal entity that is owned (in whole or in part) 
by another legal entity (a second-tier legal entity) shall 
be attributed to the second-tier legal entity in propor-
tion to the ownership of the second-tier legal entity 
in the first-tier legal entity. 
‘‘(ii) OWNERSHIP BY A PERSON.—If the second-tier 
legal entity is owned (in whole or in part) by a person, 
the amount of the payment made to the first-tier legal 
entity shall be attributed to the person in the amount 
that represents the indirect ownership in the first- 
tier legal entity by the person. 
‘‘(D) THIRD AND FOURTH LEVELS.— 
‘‘(i) IN
GENERAL.—Except as provided in clause 
(ii), the Secretary shall attribute payments at the third 
and fourth tiers of ownership in the same manner 
as specified in subparagraph (C). 
‘‘(ii) FOURTH-TIER OWNERSHIP.—If the fourth-tier 
of ownership is that of a fourth-tier legal entity and 
not that of a person, the Secretary shall reduce the 
amount of the payment to be made to the first-tier 
legal entity in the amount that represents the indirect 
ownership in the first-tier legal entity by the fourth- 
tier legal entity. 
‘‘(f) SPECIAL RULES.— 
‘‘(1) MINOR CHILDREN.— 
‘‘(A) IN GENERAL.—Except as provided in subparagraph 
(B), payments received by a child under the age of 18 
shall be attributed to the parents of the child. 
‘‘(B) REGULATIONS.—The Secretary shall issue regula-
tions specifying the conditions under which payments 
received by a child under the age of 18 will not be attributed 
to the parents of the child. 
‘‘(2) MARKETING
COOPERATIVES.—Subsections (b) and (c) 
shall not apply to a cooperative association of producers with 
respect to commodities produced by the members of the associa-
tion that are marketed by the association on behalf of the 
members of the association but shall apply to the producers 
as persons. 
‘‘(3) TRUSTS AND ESTATES.— 
‘‘(A) IN GENERAL.—With respect to irrevocable trusts 
and estates, the Secretary shall administer this section 
through section 1001F in such manner as the Secretary 
determines will ensure the fair and equitable treatment 
of the beneficiaries of the trusts and estates. 
‘‘(B) IRREVOCABLE TRUST.— 
‘‘(i) IN GENERAL.—In order for a trust to be consid-
ered an irrevocable trust, the terms of the trust agree-
ment shall not— 
‘‘(I) allow for modification or termination of 
the trust by the grantor;
H. R. 2419—84 
‘‘(II) allow for the grantor to have any future, 
contingent, or remainder interest in the corpus 
of the trust; or 
‘‘(III) except as provided in clause (ii), provide 
for the transfer of the corpus of the trust to the 
remainder beneficiary in less than 20 years begin-
ning on the date the trust is established. 
‘‘(ii) EXCEPTION.—Clause (i)(III) shall not apply in 
a case in which the transfer is— 
‘‘(I) contingent on the remainder beneficiary 
achieving at least the age of majority; or 
‘‘(II) contingent on the death of the grantor 
or income beneficiary. 
‘‘(C) REVOCABLE TRUST.—For the purposes of this sec-
tion through section 1001F, a revocable trust shall be 
considered to be the same person as the grantor of the 
trust. 
‘‘(4) CASH RENT TENANTS.— 
‘‘(A) DEFINITION.—In this paragraph, the term ‘cash 
rent tenant’ means a person or legal entity that rents 
land— 
‘‘(i) for cash; or 
‘‘(ii) for a crop share guaranteed as to the amount 
of the commodity to be paid in rent. 
‘‘(B) RESTRICTION.—A cash rent tenant who makes a 
significant contribution of active personal management, but 
not of personal labor, with respect to a farming operation 
shall be eligible to receive a payment described in sub-
section (b) or (c) only if the tenant makes a significant 
contribution of equipment to the farming operation. 
‘‘(5) FEDERAL AGENCIES.— 
‘‘(A) IN GENERAL.—Notwithstanding subsection (d), a 
Federal agency shall not be eligible to receive any payment, 
benefit, or loan under title I of the Food, Conservation, 
and Energy Act of 2008 or title XII of this Act. 
‘‘(B) LAND RENTAL.—A lessee of land owned by a Fed-
eral agency may receive a payment described in subsection 
(b), (c), or (d) if the lessee otherwise meets all applicable 
criteria. 
‘‘(6) STATE AND LOCAL GOVERNMENTS.— 
‘‘(A) IN
GENERAL.—Notwithstanding subsection (d), 
except as provided in subsection (g), a State or local govern-
ment, or political subdivision or agency of the government, 
shall not be eligible to receive any payment, benefit, or 
loan under title I of the Food, Conservation, and Energy 
Act of 2008 or title XII of this Act. 
‘‘(B) TENANTS.—A lessee of land owned by a State 
or local government, or political subdivision or agency of 
the government, may receive payments described in sub-
sections (b), (c), and (d) if the lessee otherwise meets all 
applicable criteria. 
‘‘(7) CHANGES IN FARMING OPERATIONS.— 
‘‘(A) IN GENERAL.—In the administration of this section 
through section 1001F, the Secretary may not approve 
any change in a farming operation that otherwise will 
increase the number of persons to which the limitations
H. R. 2419—85 
under this section are applied unless the Secretary deter-
mines that the change is bona fide and substantive. 
‘‘(B) FAMILY
MEMBERS.—The addition of a family 
member to a farming operation under the criteria set out 
in section 1001A shall be considered a bona fide and sub-
stantive change in the farming operation. 
‘‘(8) DEATH OF OWNER.— 
‘‘(A) IN GENERAL.—If any ownership interest in land 
or a commodity is transferred as the result of the death 
of a program participant, the new owner of the land or 
commodity may, if the person is otherwise eligible to 
participate in the applicable program, succeed to the con-
tract of the prior owner and receive payments subject to 
this section without regard to the amount of payments 
received by the new owner. 
‘‘(B) LIMITATIONS ON PRIOR OWNER.—Payments made 
under this paragraph shall not exceed the amount to which 
the previous owner was entitled to receive under the terms 
of the contract at the time of the death of the prior owner. 
‘‘(g) PUBLIC SCHOOLS.— 
‘‘(1) IN GENERAL.—Notwithstanding subsection (f)(6)(A), a 
State or local government, or political subdivision or agency 
of the government, shall be eligible, subject to the limitation 
in paragraph (2), to receive a payment described in subsection 
(b) or (c) for land owned by the State or local government, 
or political subdivision or agency of the government, that is 
used to maintain a public school. 
‘‘(2) LIMITATION.— 
‘‘(A) IN GENERAL.—For each State, the total amount 
of payments described in subsections (b) and (c) that are 
received collectively by the State and local government 
and all political subdivisions or agencies of those govern-
ments shall not exceed $500,000. 
‘‘(B) EXCEPTION.—The limitation in subparagraph (A) 
shall not apply to States with a population of less than 
1,500,000.’’. 
(c) REPEAL
OF 3-ENTITY RULE.—Section 1001A of the Food 
Security Act of 1985 (7 U.S.C. 1308–1) is amended— 
(1) in the section heading, by striking ‘‘PREVENTION OF 
CREATION OF ENTITIES TO QUALIFY AS SEPARATE PERSONS’’ 
and inserting ‘‘NOTIFICATION OF INTERESTS’’; and 
(2) by striking subsection (a) and inserting the following: 
‘‘(a) NOTIFICATION OF INTERESTS.—To facilitate administration 
of section 1001 and this section, each person or legal entity receiving 
payments described in subsections (b) and (c) of section 1001 as 
a separate person or legal entity shall separately provide to the 
Secretary, at such times and in such manner as prescribed by 
the Secretary— 
‘‘(1) the name and social security number of each person, 
or the name and taxpayer identification number of each legal 
entity, that holds or acquires an ownership interest in the 
separate person or legal entity; and 
‘‘(2) the name and taxpayer identification number of each 
legal entity in which the person or legal entity holds an owner-
ship interest.’’.