[107th Congress Public Law 171]
[From the U.S. Government Printing Office]


<DOC>
[DOCID: f:publ171.107]


[[Page 133]]

             FARM SECURITY AND RURAL INVESTMENT ACT OF 2002

[[Page 116 STAT. 134]]

Public Law 107-171
107th Congress

                                 An Act


 
To provide for the continuation of agricultural programs through fiscal 
    year 2007, and for other purposes. <<NOTE: May 13, 2002 -  [H.R. 
                                2646]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress <<NOTE: Farm Security and Rural 
Investment Act of 2002.>> assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) <<NOTE: 7 USC 7901 note.>>  Short Title.--This Act may be cited 
as the ``Farm Security and Rural Investment Act of 2002''.

    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.

                       TITLE I--COMMODITY PROGRAMS

Sec. 1001. Definitions.

        Subtitle A--Direct Payments and Counter-Cyclical Payments

Sec. 1101. Establishment of base acres and payment acres for a farm.
Sec. 1102. Establishment of payment yield.
Sec. 1103. Availability of direct payments.
Sec. 1104. Availability of counter-cyclical payments.
Sec. 1105. Producer agreement required as condition of provision of 
           direct 
           payments and counter-cyclical payments.
Sec. 1106. Planting flexibility.
Sec. 1107. Relation to remaining payment authority under production 
           flexibility contracts.
Sec. 1108. Period of effectiveness.

   Subtitle B--Marketing Assistance Loans and Loan Deficiency Payments

Sec. 1201. Availability of nonrecourse marketing assistance loans for 
           loan commodities.
Sec. 1202. Loan rates for nonrecourse marketing assistance loans.
Sec. 1203. Term of loans.
Sec. 1204. Repayment of loans.
Sec. 1205. Loan deficiency payments.
Sec. 1206. Payments in lieu of loan deficiency payments for grazed 
           acreage.
Sec. 1207. Special marketing loan provisions for upland cotton.
Sec. 1208. Special competitive provisions for extra long staple cotton.
Sec. 1209. Availability of recourse loans for high moisture feed grains 
           and seed 
           cotton.

                           Subtitle C--Peanuts

Sec. 1301. Definitions.
Sec. 1302. Establishment of payment yield and base acres for peanuts for 
           a farm.
Sec. 1303. Availability of direct payments for peanuts.
Sec. 1304. Availability of counter-cyclical payments for peanuts.
Sec. 1305. Producer agreement required as condition on provision of 
           direct 
           payments and counter-cyclical payments.
Sec. 1306. Planting flexibility.
Sec. 1307. Marketing assistance loans and loan deficiency payments for 
           peanuts.
Sec. 1308. Miscellaneous provisions.
Sec. 1309. Termination of marketing quota programs for peanuts and 
           compensation to peanut quota holders for loss of quota asset 
           value.

[[Page 116 STAT. 135]]

Sec. 1310. Repeal of superseded price support authority and effect of 
           repeal.

                            Subtitle D--Sugar

Sec. 1401. Sugar program.
Sec. 1402. Storage facility loans.
Sec. 1403. Flexible marketing allotments for sugar.

                            Subtitle E--Dairy

Sec. 1501. Milk price support program.
Sec. 1502. National dairy market loss payments.
Sec. 1503. Dairy export incentive and dairy indemnity programs.
Sec. 1504. Dairy product mandatory reporting.
Sec. 1505. Funding of dairy promotion and research program.
Sec. 1506. Fluid milk promotion.
Sec. 1507. Study of national dairy policy.
Sec. 1508. Studies of effects of changes in approach to national dairy 
           policy and fluid milk identity standards.

                       Subtitle F--Administration

Sec. 1601. Administration generally.
Sec. 1602. Suspension of permanent price support authority.
Sec. 1603. Payment limitations.
Sec. 1604. Adjusted gross income limitation.
Sec. 1605. Commission on application of payment limitations.
Sec. 1606. Adjustments of loans.
Sec. 1607. Personal liability of producers for deficiencies.
Sec. 1608. Extension of existing administrative authority regarding 
           loans.
Sec. 1609. Commodity Credit Corporation Inventory.
Sec. 1610. Reserve stock level.
Sec. 1611. Farm reconstitutions.
Sec. 1612. Assignment of payments.
Sec. 1613. Equitable relief from ineligibility for loans, payments, or 
           other benefits.
Sec. 1614. Tracking of benefits.
Sec. 1615. Estimates of net farm income.
Sec. 1616. Availability of incentive payments for certain producers.
Sec. 1617. Renewed availability of market loss assistance and certain 
           emergency assistance to persons that failed to receive 
           assistance under earlier authorities.
Sec. 1618. Producer retention of erroneously paid loan deficiency 
           payments and marketing loan gains.

                         TITLE II--CONSERVATION

                    Subtitle A--Conservation Security

Sec. 2001. Conservation security program.
Sec. 2002. Conservation compliance.
Sec. 2003. Partnerships and cooperation.
Sec. 2004. Administrative requirements for conservation programs.
Sec. 2005. Reform and assessment of conservation programs.
Sec. 2006. Conforming amendments.

                    Subtitle B--Conservation Reserve

Sec. 2101. Conservation reserve program.

                  Subtitle C--Wetlands Reserve Program

Sec. 2201. Reauthorization.
Sec. 2202. Enrollment.
Sec. 2203. Easements and agreements.
Sec. 2204. Changes in ownership; agreement modification; termination.

              Subtitle D--Environmental Quality Incentives

Sec. 2301. Environmental quality incentives program.

                      Subtitle E--Grassland Reserve

Sec. 2401. Grassland reserve program.

                 Subtitle F--Other Conservation Programs

Sec. 2501. Agricultural management assistance.
Sec. 2502. Grazing, wildlife habitat incentive, source water protection, 
           and Great Lakes basin programs.

[[Page 116 STAT. 136]]

Sec. 2503. Farmland protection program.
Sec. 2504. Resource conservation and development program.
Sec. 2505. Small watershed rehabilitation program.
Sec. 2506. Use of symbols, slogans, and logos.
Sec. 2507. Desert terminal lakes.

         Subtitle G--Conservation Corridor Demonstration Program

Sec. 2601. Definitions.
Sec. 2602. Conservation corridor demonstration program.
Sec. 2603. Implementation of conservation corridor plan.
Sec. 2604. Funding requirements.

                 Subtitle H--Funding and Administration

Sec. 2701. Funding and administration.
Sec. 2702. Regulations.

                            TITLE III--TRADE

 Subtitle A--Agricultural Trade Development and Assistance Act of 1954 
                          and Related Statutes

Sec. 3001. United States policy.
Sec. 3002. Provision of agricultural commodities.
Sec. 3003. Generation and use of currencies by private voluntary 
           organizations and cooperatives.
Sec. 3004. Levels of assistance.
Sec. 3005. Food Aid Consultative Group.
Sec. 3006. Maximum level of expenditures.
Sec. 3007. Administration.
Sec. 3008. Assistance for stockpiling and rapid transportation, 
           delivery, and distribution of shelf-stable prepackaged foods.
Sec. 3009. Sale procedure.
Sec. 3010. Prepositioning.
Sec. 3011. Transportation and related costs.
Sec. 3012. Expiration date.
Sec. 3013. Micronutrient fortification programs.
Sec. 3014. John Ogonowski Farmer-to-Farmer Program.

               Subtitle B--Agricultural Trade Act of 1978

Sec. 3101. Exporter assistance initiative.
Sec. 3102. Export credit guarantee program.
Sec. 3103. Market access program.
Sec. 3104. Export enhancement program.
Sec. 3105. Foreign market development cooperator program.
Sec. 3106. Food for progress.
Sec. 3107. McGovern-Dole International Food for Education and Child 
           Nutrition Program.

                        Subtitle C--Miscellaneous

Sec. 3201. Surplus commodities for developing or friendly countries.
Sec. 3202. Bill Emerson Humanitarian Trust Act.
Sec. 3203. Emerging markets.
Sec. 3204. Biotechnology and agricultural trade program.
Sec. 3205. Technical assistance for specialty crops.
Sec. 3206. Global market strategy.
Sec. 3207. Report on use of perishable commodities and live animals.
Sec. 3208. Study on fee for services.
Sec. 3209. Sense of Congress concerning foreign assistance programs.
Sec. 3210. Sense of the Senate concerning agricultural trade.

                      TITLE IV--NUTRITION PROGRAMS

Sec. 4001. Short title.

                     Subtitle A--Food Stamp Program

Sec. 4101. Encouragement of payment of child support.
Sec. 4102. Simplified definition of income.
Sec. 4103. Standard deduction.
Sec. 4104. Simplified utility allowance.
Sec. 4105. Simplified determination of housing costs.
Sec. 4106. Simplified determination of deductions.
Sec. 4107. Simplified definition of resources.

[[Page 116 STAT. 137]]

Sec. 4108. Alternative issuance systems in disasters.
Sec. 4109. State option to reduce reporting requirements.
Sec. 4110. Cost neutrality for electronic benefit transfer systems.
Sec. 4111. Report on electronic benefit transfer systems.
Sec. 4112. Alternative procedures for residents of certain group 
           facilities.
Sec. 4113. Redemption of benefits through group living arrangements.
Sec. 4114. Availability of food stamp program applications on the 
           Internet.
Sec. 4115. Transitional food stamps for families moving from welfare.
Sec. 4116. Grants for simple application and eligibility determination 
           systems and improved access to benefits.
Sec. 4117. Delivery to retailers of notices of adverse action.
Sec. 4118. Reform of quality control system.
Sec. 4119. Improvement of calculation of State performance measures.
Sec. 4120. Bonuses for States that demonstrate high or most improved 
           performance.
Sec. 4121. Employment and training program.
Sec. 4122. Reauthorization of food stamp program and food distribution 
           program on Indian reservations.
Sec. 4123. Expanded grant authority.
Sec. 4124. Consolidated block grants for Puerto Rico and American Samoa.
Sec. 4125. Assistance for community food projects.
Sec. 4126. Availability of commodities for the emergency food assistance 
           program.

                   Subtitle B--Commodity Distribution

Sec. 4201. Commodity supplemental food program.
Sec. 4202. Commodity donations.
Sec. 4203. Distribution of surplus commodities to special nutrition 
           projects.
Sec. 4204. Emergency food assistance.

            Subtitle C--Child Nutrition and Related Programs

Sec. 4301. Commodities for school lunch program.
Sec. 4302. Eligibility for free and reduced price meals.
Sec. 4303. Purchases of locally produced foods.
Sec. 4304. Applicability of Buy-American requirement to Puerto Rico.
Sec. 4305. Fruit and vegetable pilot program.
Sec. 4306. Eligibility for assistance under the special supplemental 
           nutrition program for women, infants, and children.
Sec. 4307. WIC farmers' market nutrition program.

                        Subtitle D--Miscellaneous

Sec. 4401. Partial restoration of benefits to legal immigrants.
Sec. 4402. Seniors farmers' market nutrition program.
Sec. 4403. Nutrition information and awareness pilot program.
Sec. 4404. Hunger fellowship program.
Sec. 4405. General effective date.

                             TITLE V--CREDIT

                    Subtitle A--Farm Ownership Loans

Sec. 5001. Direct loans.
Sec. 5002. Financing of bridge loans.
Sec. 5003. Amount of guarantee of loans for farm operations on tribal 
           lands.
Sec. 5004. Guarantee of loans made under State beginning farmer or 
           rancher programs.
Sec. 5005. Down Payment Loan Program.
Sec. 5006. Beginning farmer and rancher contract land sales program.

                       Subtitle B--Operating Loans

Sec. 5101. Direct loans.
Sec. 5102. Suspension of limitation on period for which borrowers are 
           eligible for guaranteed assistance.

                       Subtitle C--Emergency Loans

Sec. 5201. Emergency loans in response to an emergency resulting from 
           quarantines.

                  Subtitle D--Administrative Provisions

Sec. 5301. Evaluations of direct and guaranteed loan programs.
Sec. 5302. Eligibility of trusts and limited liability companies for 
           farm ownership loans, farm operating loans, and emergency 
           loans.

[[Page 116 STAT. 138]]

Sec. 5303. Debt settlement.
Sec. 5304. Temporary authority to enter into contracts; private 
           collection agencies.
Sec. 5305. Interest rate options for loans in servicing.
Sec. 5306. Elimination of requirement that Secretary require county 
           committees to certify in writing that certain loan reviews 
           have been conducted.
Sec. 5307. Simplified loan guarantee application available for loans of 
           greater amounts.
Sec. 5308. Inventory property.
Sec. 5309. Administration of certified lenders and preferred certified 
           lenders programs.
Sec. 5310. Definitions.
Sec. 5311. Loan authorization levels.
Sec. 5312. Reservation of funds for direct operating loans for beginning 
           farmers and ranchers.
Sec. 5313. Interest rate reduction program.
Sec. 5314. Reamortization of recapture payments.
Sec. 5315. Allocation of certain funds for socially disadvantaged 
           farmers and ranchers.
Sec. 5316. Waiver of borrower training certification requirement.
Sec. 5317. Timing of loan assessments.
Sec. 5318. Annual review of borrowers.
Sec. 5319. Loan eligibility for borrowers with prior debt forgiveness.
Sec. 5320. Making and servicing of loans by personnel of State, county, 
           or area committees.
Sec. 5321. Eligibility of employees of State, county, or area committee 
           for loans and loan guarantees.

                         Subtitle E--Farm Credit

Sec. 5401. Repeal of burdensome approval requirements.
Sec. 5402. Banks for cooperatives.
Sec. 5403. Insurance corporation premiums.

                     Subtitle F--General Provisions

Sec. 5501. Technical amendments.

                       TITLE VI--RURAL DEVELOPMENT

         Subtitle A--Consolidated Farm and Rural Development Act

Sec. 6001. Eligibility of rural empowerment zones and rural enterprise 
           communities for direct and guaranteed loans for essential 
           community facilities. 
Sec. 6002. Water or waste disposal grants.
Sec. 6003. Rural business opportunity grants.
Sec. 6004. Child day care facilities.
Sec. 6005. Rural water and wastewater circuit rider program.
Sec. 6006. Multijurisdictional regional planning organizations.
Sec. 6007. Loan guarantees for certain rural development loans.
Sec. 6008. Tribal college and university essential community facilities.
Sec. 6009. Emergency and imminent community water assistance grant 
           program.
Sec. 6010. Water and waste facility grants for Native American tribes.
Sec. 6011. Grants for water systems for rural and native villages in 
           Alaska.
Sec. 6012. Grants to nonprofit organizations to finance the 
           construction, refurbishing, and servicing of individually-
           owned household water well systems in rural areas for 
           individuals with low or moderate incomes.
Sec. 6013. Loans and loan guarantees for renewable energy systems.
Sec. 6014. Rural business enterprise grants.
Sec. 6015. Rural cooperative development grants.
Sec. 6016. Grants to broadcasting systems.
Sec. 6017. Business and industry loan modifications.
Sec. 6018. Use of rural development loans and grants for other purposes.
Sec. 6019. Simplified application forms for loan guarantees.
Sec. 6020. Definition of rural and rural area.
Sec. 6021. National Rural Development Partnership.
Sec. 6022. Rural telework.
Sec. 6023. Historic barn preservation.
Sec. 6024. Grants for NOAA weather radio transmitters.
Sec. 6025. Grants to train farm workers in new technologies and to train 
           farm workers in specialized skills necessary for higher value 
           crops.
Sec. 6026. Rural community advancement program.
Sec. 6027. Delta Regional Authority.
Sec. 6028. Northern Great Plains Regional Authority.

[[Page 116 STAT. 139]]

Sec. 6029. Rural business investment program.
Sec. 6030. Rural strategic investment program.
Sec. 6031. Funding of pending rural development loan and grant 
           applications.

              Subtitle B--Rural Electrification Act of 1936

Sec. 6101. Guarantees for bonds and notes issued for electrification or 
           telephone purposes.
Sec. 6102. Expansion of 911 access.
Sec. 6103. Enhancement of access to broadband service in rural areas.

   Subtitle C--Food, Agriculture, Conservation, and Trade Act of 1990

Sec. 6201. Alternative Agricultural Research and Commercialization 
           Corporation.
Sec. 6202. Rural electronic commerce extension program. 
Sec. 6203. Telemedicine and distance learning services in rural areas.

             Subtitle D--SEARCH Grants for Small Communities

Sec. 6301. Definitions.
Sec. 6302. SEARCH grant program.
Sec. 6303. Report.
Sec. 6304. Funding.

                        Subtitle E--Miscellaneous

Sec. 6401. Value-added agricultural product market development grants.
Sec. 6402. Agriculture innovation center demonstration program.
Sec. 6403. Fund for Rural America.
Sec. 6404. Rural local television broadcast signal loan guarantees.
Sec. 6405. Rural firefighters and emergency personnel grant program.
Sec. 6406. Sense of Congress on rural policy coordination. 

                 TITLE VII--RESEARCH AND RELATED MATTERS

                         Subtitle A--Extensions

Sec. 7101. National rural information center clearinghouse.
Sec. 7102. Grants and fellowships for food and agricultural sciences 
           education.
Sec. 7103. Policy research centers.
Sec. 7104. Human nutrition intervention and health promotion research 
           program.
Sec. 7105. Pilot research program to combine medical and agricultural 
           research.
Sec. 7106. Nutrition education program.
Sec. 7107. Continuing animal health and disease research programs.
Sec. 7108. Appropriations for research on national or regional problems.
Sec. 7109. Grants to upgrade agricultural and food sciences facilities 
           at 1890 land-grant colleges, including Tuskegee University.
Sec. 7110. National research and training virtual centers.
Sec. 7111. Hispanic-serving institutions.
Sec. 7112. Competitive grants for international agricultural science and 
           education programs.
Sec. 7113. University research.
Sec. 7114. Extension service.
Sec. 7115. Supplemental and alternative crops.
Sec. 7116. Aquaculture research facilities.
Sec. 7117. Rangeland research.
Sec. 7118. National genetics resources program.
Sec. 7119. High-priority research and extension initiatives.
Sec. 7120. Nutrient management research and extension initiative.
Sec. 7121. Agricultural telecommunications program.
Sec. 7122. Assistive technology program for farmers with disabilities.
Sec. 7123. Partnerships for high-value agricultural product quality 
           research.
Sec. 7124. Biobased products.
Sec. 7125. Integrated research, education, and extension competitive 
           grants program.
Sec. 7126. Equity in Educational Land-Grant Status Act of 1994.
Sec. 7127. 1994 Institution research grants.
Sec. 7128. Endowment for 1994 Institutions.
Sec. 7129. Precision agriculture.
Sec. 7130. Thomas Jefferson Initiative for crop diversification.
Sec. 7131. Support for research regarding diseases of wheat, triticale, 
           and barley caused by fusarium graminearum or by tilletia 
           indica.
Sec. 7132. Office of Pest Management Policy.
Sec. 7133. National Agricultural Research, Extension, Education, and 
           Economics Advisory Board.
Sec. 7134. Grants for research on production and marketing of alcohols 
           and industrial hydrocarbons from agricultural commodities and 
           forest products.

[[Page 116 STAT. 140]]

Sec. 7135. Agricultural experiment stations research facilities.
Sec. 7136. Competitive, special, and facilities research grants national 
           research initiative.
Sec. 7137. Federal agricultural research facilities authorization of 
           appropriations.
Sec. 7138. Critical agricultural materials research.
Sec. 7139. Aquaculture.

                        Subtitle B--Modifications

Sec. 7201. Equity in Educational Land-Grant Status Act of 1994.
Sec. 7202. Carryover for experiment stations.
Sec. 7203. Authorization percentages for research and extension formula 
           funds.
Sec. 7204. Carryover for eligible institutions.
Sec. 7205. Initiative for future agriculture and food systems.
Sec. 7206. Eligibility for integrated grants program.
Sec. 7207. Agricultural Research, Extension, and Education Reform Act of 
           1998.
Sec. 7208. Food, Agriculture, Conservation, and Trade Act of 1990.
Sec. 7209. National Agricultural Research, Extension, and Teaching 
           Policy Act of 1977.
Sec. 7210. Biotechnology risk assessment research.
Sec. 7211. Competitive, special, and facilities research grants.
Sec. 7212. Matching funds requirement for research and extension 
           activities of 1890 Institutions.
Sec. 7213. Matching requirements for research and extension formula 
           funds for insular area land-grant institutions.
Sec. 7214. Definition of food and agricultural sciences.
Sec. 7215. Federal Extension Service.
Sec. 7216. Policy research centers.
Sec. 7217. Availability of competitive grant funds.
Sec. 7218. Organic agriculture research and extension initiative.
Sec. 7219. Senior scientific research service.
Sec. 7220. Termination of certain schedule a appointments.
Sec. 7221. Biosecurity planning and response programs.
Sec. 7222. Indirect costs for small business innovation research grants.
Sec. 7223. Carbon cycle research.

        Subtitle C--Repeal of Certain Activities and Authorities

Sec. 7301. Food Safety Research Information Office and National 
           Conference.
Sec. 7302. Reimbursement of expenses under Sheep Promotion, Research, 
           and Information Act of 1994.
Sec. 7303. Market expansion research.
Sec. 7304. National Advisory Board on Agricultural Weather.
Sec. 7305. Agricultural information exchange with Ireland.
Sec. 7306. Pesticide resistance study.
Sec. 7307. Expansion of education study.
Sec. 7308. Task force on 10-year strategic plan for agricultural 
           research facilities.

                       Subtitle D--New Authorities

Sec. 7401. Subtitle definitions.
Sec. 7402. Research equipment grants.
Sec. 7403. Joint requests for proposals.
Sec. 7404. Review of Agricultural Research Service.
Sec. 7405. Beginning farmer and rancher development program.
Sec. 7406. Sense of Congress regarding doubling of funding for 
           agricultural research.
Sec. 7407. Organic production and market data initiatives.
Sec. 7408. International organic research collaboration.
Sec. 7409. Report on producers and handlers of organic agricultural 
           products.
Sec. 7410. Report on genetically modified pest-protected plants.
Sec. 7411. Study of nutrient banking.
Sec. 7412. Grants for youth organizations.

                        Subtitle E--Miscellaneous

Sec. 7501. Resident instruction and distance education at institutions 
           of higher education in United States insular areas.
Sec. 7502. Definitions.
Sec. 7503. Resident instruction and distance education grants program 
           for insular area institutions of higher education.
Sec. 7504. Declaration of extraordinary emergency and resulting 
           authorities.
Sec. 7505. Agricultural biotechnology research and development for 
           developing countries.
Sec. 7506. Land acquisition authority, national peanut research 
           laboratory, Dawson, Georgia.

[[Page 116 STAT. 141]]

                          TITLE VIII--FORESTRY

         Subtitle A--Cooperative Forestry Assistance Act of 1978

Sec. 8001. Repeal of forestry incentives program and stewardship 
           incentive program.
Sec. 8002. Establishment of forest land enhancement program.
Sec. 8003. Enhanced community fire protection.

                  Subtitle B--Amendments to Other Laws

Sec. 8101. Sustainable forestry outreach initiative; renewable resources 
           extension activities.
Sec. 8102. Office of International Forestry.

                  Subtitle C--Miscellaneous Provisions

Sec. 8201. McIntire-Stennis cooperative forestry research program.

                            TITLE IX--ENERGY

Sec. 9001. Definitions.
Sec. 9002. Federal procurement of biobased products.
Sec. 9003. Biorefinery development grants.
Sec. 9004. Biodiesel fuel education program.
Sec. 9005. Energy audit and renewable energy development program.
Sec. 9006. Renewable energy systems and energy efficiency improvements.
Sec. 9007. Hydrogen and fuel cell technologies.
Sec. 9008. Biomass research and development.
Sec. 9009. Cooperative research and extension projects.
Sec. 9010. Continuation of bioenergy program.

                         TITLE X--MISCELLANEOUS

                       Subtitle A--Crop Insurance

Sec. 10001. Equal crop insurance treatment of potatoes and sweet 
           potatoes.
Sec. 10002. Continuous coverage.
Sec. 10003. Quality loss adjustment procedures.
Sec. 10004. Adjusted gross revenue insurance pilot program.
Sec. 10005. Sense of Congress on expansion of crop insurance coverage.
Sec. 10006. Report on specialty crop insurance.

                     Subtitle B--Disaster Assistance

Sec. 10101. Reference to sea grass and sea oats as crops covered by 
           noninsured crop disaster assistance program.
Sec. 10102. Emergency grants to assist low-income migrant and seasonal 
           farmworkers.
Sec. 10103. Emergency loans for seed producers.
Sec. 10104. Assistance for livestock producers.
Sec. 10105. Market loss assistance for apple producers.
Sec. 10106. Market loss assistance for onion producers.
Sec. 10107. Commercial fisheries failure.
Sec. 10108. Study of feasibility of producer indemnification from 
           Government-caused disasters.

                   Subtitle C--Tree Assistance Program

Sec. 10201. Definitions.
Sec. 10202. Eligibility.
Sec. 10203. Assistance.
Sec. 10204. Limitations on assistance.
Sec. 10205. Authorization of appropriations.

                       Subtitle D--Animal Welfare

Sec. 10301. Definition of animal under the Animal Welfare Act.
Sec. 10302. Prohibition on interstate movement of animals for animal 
           fighting.
Sec. 10303. Penalties and foreign commerce provisions of the Animal 
           Welfare Act.
Sec. 10304. Report on rats, mice, and birds.
Sec. 10305. Enforcement of Humane Methods of Slaughter Act of 1958.

                  Subtitle E--Animal Health Protection

Sec. 10401. Short title.
Sec. 10402. Findings.
Sec. 10403. Definitions.
Sec. 10404. Restriction on importation or entry.

[[Page 116 STAT. 142]]

Sec. 10405. Exportation.
Sec. 10406. Interstate movement.
Sec. 10407. Seizure, quarantine, and disposal.
Sec. 10408. Inspections, seizures, and warrants.
Sec. 10409. Detection, control, and eradication of diseases and pests.
Sec. 10410. Veterinary accreditation program.
Sec. 10411. Cooperation.
Sec. 10412. Reimbursable agreements.
Sec. 10413. Administration and claims.
Sec. 10414. Penalties.
Sec. 10415. Enforcement.
Sec. 10416. Regulations and orders.
Sec. 10417. Authorization of appropriations.
Sec. 10418. Repeals and conforming amendments.

                          Subtitle F--Livestock

Sec. 10501. Transportation of poultry and other animals.
Sec. 10502. Swine contractors.
Sec. 10503. Right to discuss terms of contract.
Sec. 10504. Veterinary training.
Sec. 10505. Pseudorabies eradication program.

                       Subtitle G--Specialty Crops

Sec. 10601. Marketing orders for caneberries.
Sec. 10602. Availability of section 32 funds.
Sec. 10603. Purchase of specialty crops.
Sec. 10604. Protection for purchasers of farm products.
Sec. 10605. Farmers' market promotion program.
Sec. 10606. National organic certification cost-share program.
Sec. 10607. Exemption of certified organic products from assessments.
Sec. 10608. Cranberry acreage reserve program.

                       Subtitle H--Administration

Sec. 10701. Initial rate of basic pay for employees of county 
           committees.
Sec. 10702. Commodity Futures Trading Commission pay comparability.
Sec. 10703. Overtime and holiday pay.
Sec. 10704. Assistant Secretary of Agriculture for Civil Rights.
Sec. 10705. Operation of Graduate School of Department of Agriculture.
Sec. 10706. Implementation funding and information management.
Sec. 10707. Outreach and assistance for socially disadvantaged farmers 
           and ranchers.
Sec. 10708. Transparency and accountability for socially disadvantaged 
           farmers and ranchers; public disclosure requirements for 
           county committee elections.

                     Subtitle I--General Provisions

Sec. 10801. Cotton classification services.
Sec. 10802. Program of public education regarding use of biotechnology 
           in producing food for human consumption.
Sec. 10803. Chino Dairy Preserve Project.
Sec. 10804. Grazinglands Research Laboratory.
Sec. 10805. Food and Agricultural Policy Research Institute.
Sec. 10806. Market names for catfish and ginseng.
Sec. 10807. Food Safety Commission.
Sec. 10808. Pasteurization.
Sec. 10809. Rulemaking on labeling of irradiated food; certain 
           petitions.
Sec. 10810. Penalties for violations of Plant Protection Act.
Sec. 10811. Preclearance quarantine inspections.
Sec. 10812. Connecticut River Atlantic Salmon Commission.
Sec. 10813. Pine Point School.
Sec. 10814. 7-month extension of chapter 12 of title 11 of the United 
           States Code.
Sec. 10815. Practices involving nonambulatory livestock.
Sec. 10816. Country of origin labeling.

              Subtitle J--Miscellaneous Studies and Reports

Sec. 10901. Report on specialty crop purchases.
Sec. 10902. Report on pouched and canned salmon.
Sec. 10903. Study on updating yields.
Sec. 10904. Report on effect of farm program payments.
Sec. 10905. Chiloquin Dam fish passage feasibility study.

[[Page 116 STAT. 143]]

Sec. 10906. Report on geographically disadvantaged farmers and ranchers.
Sec. 10907. Studies on agricultural research and technology.
Sec. 10908. Report on tobacco settlement agreement.
Sec. 10909. Report on sale and use of pesticides for agricultural uses.
Sec. 10910. Review of operation of agricultural and natural resource 
           programs on tribal trust land.

                       TITLE I--COMMODITY PROGRAMS

SEC. 1001. DEFINITIONS. <<NOTE: 7 USC 7901.>> 

    In this title (other than subtitle C):
            (1) Agricultural act of 1949.--The term ``Agricultural Act 
        of 1949'' means the Agricultural Act of 1949 (7 U.S.C. 1421 et 
        seq.), as in effect prior to the suspensions under section 171 
        of the Federal Agriculture Improvement and Reform Act of 1996 (7 
        U.S.C. 7301).
            (2) Base acres.--The term ``base acres'', with respect to a 
        covered commodity on a farm, means the number of acres 
        established under section 1101 with respect to the covered 
        commodity on the election made by the owner of the farm under 
        subsection (a) of such section.
            (3) Counter-cyclical payment.--The term ``counter-cyclical 
        payment'' means a payment made to producers on a farm under 
        section 1104.
            (4) Covered commodity.--The term ``covered commodity'' means 
        wheat, corn, grain sorghum, barley, oats, upland cotton, rice, 
        soybeans, and other oilseeds.
            (5) Direct payment.--The term ``direct payment'' means a 
        payment made to producers on a farm under section 1103.
            (6) Effective price.--The term ``effective price'', with 
        respect to a covered commodity for a crop year, means the price 
        calculated by the Secretary under section 1104 to determine 
        whether counter-cyclical payments are required to be made for 
        that crop year.
            (7) Extra long staple cotton.--The term ``extra long staple 
        cotton'' means cotton that--
                    (A) is produced from pure strain varieties of the 
                Barbadense species or any hybrid thereof, or other 
                similar types of extra long staple cotton, designated by 
                the Secretary, having characteristics needed for various 
                end uses for which United States upland cotton is not 
                suitable and grown in irrigated cotton-growing regions 
                of the United States designated by the Secretary or 
                other areas designated by the Secretary as suitable for 
                the production of the varieties or types; and
                    (B) is ginned on a roller-type gin or, if authorized 
                by the Secretary, ginned on another type gin for 
                experimental purposes.
            (8) Loan commodity.--The term `loan commodity' means wheat, 
        corn, grain sorghum, barley, oats, upland cotton, extra long 
        staple cotton, rice, soybeans, other oilseeds, wool, mohair, 
        honey, dry peas, lentils, and small chickpeas.
            (9) Other oilseed.--The term ``other oilseed'' means a crop 
        of sunflower seed, rapeseed, canola, safflower, flaxseed, 
        mustard seed, or, if designated by the Secretary, another 
        oilseed.
            (10) Payment acres.--The term ``payment acres'' means 85 
        percent of the base acres of a covered commodity on a

[[Page 116 STAT. 144]]

        farm, as established under section 1101, on which direct 
        payments and counter-cyclical payments are made.
            (11) Payment yield.--
                    (A) In general.--The term ``payment yield'' means 
                the yield established under section 1102 for a farm for 
                a covered commodity.
                    (B) Updated payment yield.--The term ``updated 
                payment yield'' means the payment yield elected by the 
                owner of a farm under section 1102(e) to be used in 
                calculating the counter-cyclical payments for the farm.
            (12) Producer.--The term ``producer'' means an owner, 
        operator, landlord, tenant, or sharecropper that shares in the 
        risk of producing a crop and is entitled to share in the crop 
        available for marketing from the farm, or would have shared had 
        the crop been produced. In determining whether a grower of 
        hybrid seed is a producer, the Secretary shall not take into 
        consideration the existence of a hybrid seed contract and shall 
        ensure that program requirements do not adversely affect the 
        ability of the grower to receive a payment under this title.
            (13) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.
            (14) State.--The term ``State'' means each of the several 
        States of the United States, the District of Columbia, the 
        Commonwealth of Puerto Rico, and any other territory or 
        possession of the United States.
            (15) Target price.--The term ``target price'' means the 
        price per bushel (or other appropriate unit in the case of 
        upland cotton, rice, and other oilseeds) of a covered commodity 
        used to determine the payment rate for counter-cyclical 
        payments.
            (16) United states.--The term ``United States'', when used 
        in a geographical sense, means all of the States.

        Subtitle A--Direct Payments and Counter-Cyclical Payments

SEC. 1101. <<NOTE: 7 USC 7911.>>  ESTABLISHMENT OF BASE ACRES AND 
            PAYMENT ACRES FOR A FARM.

    (a) Election by Owner of Base Acres Calculation Method.--
            (1) Alternative calculation methods.--For the purpose of 
        making direct payments and counter-cyclical payments with 
        respect to a farm, the Secretary shall give an owner of the farm 
        an opportunity to elect 1 of the following as the method by 
        which the base acres of all covered commodities on the farm are 
        to be determined:
                    (A) Subject to paragraphs (3) and (4), the 4-year 
                average of the following:
                          (i) Acreage planted on the farm to covered 
                      commodities for harvest, grazing, haying, silage, 
                      or other similar purposes for the 1998 through 
                      2001 crop years.
                          (ii) Any acreage on the farm that the 
                      producers were prevented from planting during the 
                      1998 through 2001 crop years to covered 
                      commodities because of

[[Page 116 STAT. 145]]

                      drought, flood, or other natural disaster, or 
                      other condition beyond the control of the 
                      producers, as determined by the Secretary.
                    (B) Subject to paragraph (3), the sum of the 
                following:
                          (i) The contract acreage (as defined in 
                      section 102 of the Federal Agriculture Improvement 
                      and Reform Act of 1996 (7 U.S.C. 7202)) used by 
                      the Secretary to calculate the fiscal year 2002 
                      payment authorized under section 114 of such Act 
                      (7 U.S.C. 7214) for the covered commodities on the 
                      farm.
                          (ii) The 4-year average of eligible oilseed 
                      acreage on the farm for the 1998 through 2001 crop 
                      years, as determined by the Secretary under 
                      paragraph (2).
            (2) Eligible oilseed acreage.--
                    (A) Calculation.--For purposes of paragraph 
                (1)(B)(ii), the eligible acreage for each oilseed on a 
                farm during each of the 1998 through 2001 crop years 
                shall be determined in the manner provided in paragraph 
                (1)(A), except that the total acreage for all oilseeds 
                on the farm for a crop year may not exceed the 
                difference between--
                          (i) the total acreage determined under 
                      paragraph (1)(A) for all covered commodities for 
                      that crop year; and
                          (ii) the total contract acreage determined 
                      under paragraph (1)(B)(i).
                    (B) Effect of negative number.--If the subtraction 
                performed under subparagraph (A) results in a negative 
                number, the eligible oilseed acreage on the farm for 
                that crop year shall be zero for purposes of determining 
                the 4-year average.
                    (C) Offset of contract acreage.--The owner of a farm 
                may increase the eligible acreage for an oilseed on the 
                farm by reducing the contract acreage determined under 
                paragraph (1)(B)(i) for 1 or more covered commodities on 
                an acre-for-acre basis, except that the total base 
                acreage for each oilseed on the farm may not exceed the 
                4-year average of each oilseed determined under 
                paragraph (1)(B)(ii).
            (3) Inclusion of all 4 years in average.--For the purpose of 
        determining a 4-year acreage average under this subsection for a 
        farm, the Secretary shall not exclude any crop year in which a 
        covered commodity was not planted.
            (4) Treatment of multiple planting or prevented planting.--
        For the purpose of determining under paragraph (1)(A) the 
        acreage on a farm that producers planted or were prevented from 
        planting during the 1998 through 2001 crop years to covered 
        commodities, if the acreage that was planted or prevented from 
        being planted was devoted to another covered commodity in the 
        same crop year (other than a covered commodity produced under an 
        established practice of double cropping), the owner may elect 
        the commodity to be used for that crop year in determining the 
        4-year average, but may not include both the initial commodity 
        and the subsequent commodity.

    (b) Single Election; Time for Election.--
            (1) Notice of election opportunity.--As soon as practicable 
        after the date of enactment of this Act, the Secretary

[[Page 116 STAT. 146]]

        shall provide notice to owners of farms regarding their 
        opportunity to make the election described in subsection (a). 
        The notice shall include the following:
                    (A) Notice that the opportunity of an owner to make 
                the election is being provided only once.
                    (B) Information regarding the manner in which the 
                election must be made and the time periods and manner in 
                which notice of the election must be submitted to the 
                Secretary.
            (2) Election deadline.--Within the time period and in the 
        manner prescribed pursuant to paragraph (1), the owner of a farm 
        shall submit to the Secretary notice of the election made by the 
        owner under subsection (a).

    (c) Effect of Failure To Make Election.--If the owner of a farm 
fails to make the election under subsection (a) or fails to timely 
notify the Secretary of the election made, as required by subsection 
(b), the owner shall be deemed to have made the election described in 
subsection (a)(1)(B) to determine base acres for all covered commodities 
on the farm.
    (d) Application of Election to All Covered Commodities.--The 
election made under subparagraph (A) or (B) of subsection (a)(1), or 
deemed to be made under subsection (c), with respect to a farm shall 
apply to all of the covered commodities on the farm.
    (e) Treatment of Conservation Reserve Contract Acreage.--
            (1) In general.--The Secretary shall provide for an 
        adjustment, as appropriate, in the base acres for covered 
        commodities for a farm whenever either of the following 
        circumstances occurs:
                    (A) A conservation reserve contract entered into 
                under section 1231 of the Food Security Act of 1985 (16 
                U.S.C. 3831) with respect to the farm expires or is 
                voluntarily terminated.
                    (B) Cropland is released from coverage under a 
                conservation reserve contract by the Secretary.
            (2) Special payment rules.--For the crop year in which a 
        base acres adjustment under paragraph (1) is first made, the 
        owner of the farm shall elect to receive either direct payments 
        and counter-cyclical payments with respect to the acreage added 
        to the farm under this subsection or a prorated payment under 
        the conservation reserve contract, but not both.

    (f) Payment Acres.--The payment acres for a covered commodity on a 
farm shall be equal to 85 percent of the base acres for the covered 
commodity.

    (g) Prevention of Excess Base Acres.--
            (1) Required reduction.--If the sum of the base acres for a 
        farm, together with the acreage described in paragraph (2), 
        exceeds the actual cropland acreage of the farm, the Secretary 
        shall reduce the base acres for 1 or more covered commodities 
        for the farm or the base acres for peanuts for the farm under 
        subtitle C so that the sum of the base acres and acreage 
        described in paragraph (2) does not exceed the actual cropland 
        acreage of the farm.
            (2) Other acreage.--For purposes of paragraph (1), the 
        Secretary shall include the following:

[[Page 116 STAT. 147]]

                    (A) Any base acres for peanuts for the farm under 
                subtitle C.
                    (B) Any acreage on the farm enrolled in the 
                conservation reserve program or wetlands reserve program 
                under chapter 1 of subtitle D of title XII of the Food 
                Security Act of 1985 (16 U.S.C. 3830 et seq.).
                    (C) Any other acreage on the farm enrolled in a 
                conservation program for which payments are made in 
                exchange for not producing an agricultural commodity on 
                the acreage.
            (3) Selection of acres.--The Secretary shall give the owner 
        of the farm the opportunity to select the base acres or the base 
        acres for peanuts for the farm under subtitle C 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 1302(f) when applying the 
        requirements of this subsection.

    (h) Permanent Reduction in Base Acres.--The owner of a farm may 
reduce, at any time, the base acres for any covered commodity for the 
farm. The reduction shall be permanent and made in the manner prescribed 
by the Secretary.

SEC. 1102. ESTABLISHMENT OF PAYMENT YIELD.

    (a) Establishment and Purpose.--For the purpose of making direct 
payments and counter-cyclical payments under this subtitle, the 
Secretary shall provide for the establishment of a payment yield for 
each farm for each covered commodity in accordance with this section.
    (b) Use of Farm Program Payment Yield.--Except as otherwise provided 
in this section, the payment yield for each of the 2002 through 2007 
crops of a covered commodity for a farm shall be the farm program 
payment yield established for the 1995 crop of the covered commodity 
under section 505 of the Agricultural Act of 1949 (7 U.S.C. 1465), as 
adjusted by the Secretary to account for any additional yield payments 
made with respect to that crop under section 505(b)(2) of that Act.
    (c) Farms Without Farm Program Payment Yield.--In the case of a farm 
for which a farm program payment yield is unavailable for a covered 
commodity (other than soybeans or other oilseeds), the Secretary shall 
establish an appropriate payment yield for the covered commodity on the 
farm taking into consideration the farm program payment yields 
applicable to the commodity under subsection (b) for similar farms, but 
before the yields for the similar farms are updated as provided in 
subsection (e).
    (d) Payment Yields for Oilseeds.--
            (1) Determination of average yield.--In the case of soybeans 
        and each other oilseed, the Secretary shall determine the 
        average yield per planted acre for the oilseed on a farm for the 
        1998 through 2001 crop years, excluding any crop year in which 
        the acreage planted to the oilseed was zero.
            (2) Adjustment for payment yield.--The payment yield for a 
        farm for an oilseed shall be equal to the product of the 
        following:

[[Page 116 STAT. 148]]

                    (A) The average yield for the oilseed determined 
                under paragraph (1).
                    (B) The ratio resulting from dividing the national 
                average yield for the oilseed for the 1981 through 1985 
                crops by the national average yield for the oilseed for 
                the 1998 through 2001 crops.
            (3) Use of partial county average yield.--If the yield per 
        planted acre for a crop of an oilseed for a farm for any of the 
        1998 through 2001 crop years was less than 75 percent of the 
        county yield for that oilseed, the Secretary shall assign a 
        yield for that crop year equal to 75 percent of the county yield 
        for the purpose of determining the average under paragraph (1).

    (e) Opportunity to Partially Update Yields Used to Determine 
Counter-Cyclical Payments.--
            (1) Election to update.--If the owner of a farm elects to 
        use the base acres calculation method described in section 
        1101(a)(1)(A), the owner shall also have a 1-time opportunity to 
        elect to use 1 of the methods described in paragraph (3) to 
        partially update the payment yields that would otherwise be used 
        in calculating any counter-cyclical payments for covered 
        commodities on the farm.
            (2) Time for election.--The election under paragraph (1) 
        shall be made at the same time and in the same manner as the 
        Secretary prescribes for the election required under section 
        1101.
            (3) Methods of updating yields.--If the owner of a farm 
        elects to update yields under this subsection, the payment yield 
        for a covered commodity on the farm, for the purpose of 
        calculating counter-cyclical payments only, shall be equal to 
        the yield determined using either of the following:
                    (A) The sum of the following:
                          (i) The payment yield applicable for direct 
                      payments for the covered commodity on the farm.
                          (ii) 70 percent of the difference between--
                                    (I) the average yield per planted 
                                acre for the crop of the covered 
                                commodity on the farm for the 1998 
                                through 2001 crop years, as determined 
                                by the Secretary, excluding any crop 
                                year in which the acreage planted to the 
                                crop of the covered commodity was zero; 
                                and
                                    (II) the payment yield applicable 
                                for direct payments for the covered 
                                commodity on the farm.
                    (B) 93.5 percent of the average of the yield per 
                planted acre for the crop of the covered commodity on 
                the farm for the 1998 through 2001 crop years, as 
                determined by the Secretary, excluding any crop year in 
                which the acreage planted to the crop of the covered 
                commodity was zero.
            (4) Use of partial county average yield.--If the yield per 
        planted acre for a crop of the covered commodity for a farm for 
        any of the 1998 through 2001 crop years was less than 75 percent 
        of the county yield for that commodity, the Secretary shall 
        assign a yield for that crop year equal to 75 percent of the 
        county yield for the purpose of determining the average yield 
        under paragraph (3).
            (5) Application of election and method to all covered 
        commodities.--The owner of a farm may not elect the method

[[Page 116 STAT. 149]]

        described in paragraph (3)(A) for 1 covered commodity on the 
        farm and the method described in paragraph (3)(B) for other 
        covered commodities on the farm.

SEC. 1103. <<NOTE: 7 USC 7913.>> AVAILABILITY OF DIRECT PAYMENTS.

    (a) Payment Required.--For each of the 2002 through 2007 crop years 
of each covered commodity, the Secretary shall make direct payments to 
producers on farms for which payment yields and base acres are 
established.
    (b) Payment Rate.--The payment rates used to make direct payments 
with respect to covered commodities for a crop year are as follows:
            (1) Wheat, $0.52 per bushel.
            (2) Corn, $0.28 per bushel.
            (3) Grain sorghum, $0.35 per bushel.
            (4) Barley, $0.24 per bushel.
            (5) Oats, $0.024 per bushel.
            (6) Upland cotton, $0.0667 per pound.
            (7) Rice, $2.35 per hundredweight.
            (8) Soybeans, $0.44 per bushel.
            (9) Other oilseeds, $0.0080 per pound.

    (c) Payment Amount.--The amount of the direct payment to be paid to 
the producers on a farm for a covered commodity 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 of the covered commodity on the farm.
            (3) The payment yield for the covered commodity for the 
        farm.

    (d) Time for Payment.--
            (1) In general.--The Secretary shall make direct payments--
                    (A) in the case of the 2002 crop year, as soon as 
                practicable after the date of enactment of this Act; and
                    (B) in the case of each of the 2003 through 2007 
                crop years, not before October 1 of the calendar year in 
                which the crop of the covered commodity is harvested.
            (2) Advance payments.--At the option of the producers on a 
        farm, up to 50 percent of the direct payment for a covered 
        commodity for any of the 2003 through 2007 crop years shall be 
        paid to the producers in advance. The producers shall select the 
        month within which the advance payment for a crop year will be 
        made. The month selected may be any month during the period 
        beginning on December 1 of the calendar year before the calendar 
        year in which the crop of the covered commodity is harvested 
        through the month within which the direct payment would 
        otherwise be made. The producers 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 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.

[[Page 116 STAT. 150]]

SEC. 1104. <<NOTE: 7 USC 7914.>>  AVAILABILITY OF COUNTER-CYCLICAL 
            PAYMENTS.

    (a) Payment Required.--For each of the 2002 through 2007 crop years 
for each covered commodity, the Secretary shall make counter-cyclical 
payments to producers on farms for which payment yields and base acres 
are established with respect to the covered commodity if the Secretary 
determines that the effective price for the covered commodity is less 
than the target price for the covered commodity.
    (b) Effective Price.--For purposes of subsection (a), the effective 
price for a covered commodity is equal to the sum of the following:
            (1) The higher of the following:
                    (A) The national average market price received by 
                producers during the 12-month marketing year for the 
                covered commodity, as determined by the Secretary.
                    (B) The national average loan rate for a marketing 
                assistance loan for the covered commodity in effect for 
                the applicable period under subtitle B.
            (2) The payment rate in effect for the covered commodity 
        under section 1103 for the purpose of making direct payments 
        with respect to the covered commodity.

    (c) Target Price.--
            (1) 2002 and 2003 crop years.--For purposes of the 2002 and 
        2003 crop years, the target prices for covered commodities shall 
        be as follows:
                    (A) Wheat, $3.86 per bushel.
                    (B) Corn, $2.60 per bushel.
                    (C) Grain sorghum, $2.54 per bushel.
                    (D) Barley, $2.21 per bushel.
                    (E) Oats, $1.40 per bushel.
                    (F) Upland cotton, $0.7240 per pound.
                    (G) Rice, $10.50 per hundredweight.
                    (H) Soybeans, $5.80 per bushel.
                    (I) Other oilseeds, $0.0980 per pound.
            (2) Subsequent crop years.--For purposes of each of the 2004 
        through 2007 crop years, the target prices for covered 
        commodities shall be as follows:
                    (A) Wheat, $3.92 per bushel.
                    (B) Corn, $2.63 per bushel.
                    (C) Grain sorghum, $2.57 per bushel.
                    (D) Barley, $2.24 per bushel.
                    (E) Oats, $1.44 per bushel.
                    (F) Upland cotton, $0.7240 per pound.
                    (G) Rice, $10.50 per hundredweight.
                    (H) Soybeans, $5.80 per bushel.
                    (I) Other oilseeds, $0.1010 per pound.

    (d) Payment Rate.--The payment rate used to make counter-cyclical 
payments with respect to a covered commodity for a crop year shall be 
equal to the difference between--
            (1) the target price for the covered commodity; and
            (2) the effective price determined under subsection (b) for 
        the covered commodity.

    (e) Payment Amount.--If counter-cyclical payments are required to be 
paid for any of the 2002 through 2007 crop years of a covered commodity, 
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:

[[Page 116 STAT. 151]]

            (1) The payment rate specified in subsection (d).
            (2) The payment acres of the covered commodity on the farm.
            (3) The payment yield or updated payment yield for the farm, 
        depending on the election of the owner of the farm under section 
        1102.

    (f) Time for Payments.--
            (1) General rule.--If the Secretary determines under 
        subsection (a) that counter-cyclical payments are required to be 
        made under this section for the crop of a covered commodity, the 
        Secretary shall make the counter-cyclical payments for the crop 
        as soon as practicable after the end of the 12-month marketing 
        year for the covered commodity.
            (2) Availability of partial payments.--If, before the end of 
        the 12-month marketing year for a covered commodity, the 
        Secretary estimates that counter-cyclical payments will be 
        required for the crop of the covered commodity, the Secretary 
        shall give producers on a farm the option to receive partial 
        payments of the counter-cyclical payment projected to be made 
        for that crop of the covered commodity.
            (3) Time for partial payments.--
                    (A) 2002 through 2006 crop years.--When the 
                Secretary makes partial payments available under 
                paragraph (2) for a covered commodity for any of the 
                2002 through 2006 crop years--
                          (i) the first partial payment for the crop 
                      year shall be made not earlier than October 1, 
                      and, to the maximum extent practicable, not later 
                      than October 31, of the calendar year in which the 
                      crop of the covered commodity is harvested;
                          (ii) the second partial payment shall be made 
                      not earlier than February 1 of the next calendar 
                      year; and
                          (iii) the final partial payment shall be made 
                      as soon as practicable after the end of the 12-
                      month marketing year for the covered commodity.
                    (B) 2007 crop year.--When the Secretary makes 
                partial payments available for a covered commodity for 
                the 2007 crop year--
                          (i) the first partial payment shall be made 
                      after completion of the first 6 months of the 
                      marketing year for the covered commodity; and
                          (ii) the final partial payment shall be made 
                      as soon as practicable after the end of the 12-
                      month marketing year for the covered commodity.
            (4) Amount of partial payments.--
                    (A) 2002 through 2006 crop years.--
                          (i) First partial payment.--For each of the 
                      2002 through 2006 crop years of a covered 
                      commodity, the first partial payment under 
                      paragraph (3) to the producers on a farm may not 
                      exceed 35 percent of the projected counter-
                      cyclical payment for the covered commodity for the 
                      crop year, as determined by the Secretary.
                          (ii) Second partial payment.--The second 
                      partial payment for a covered commodity for a crop 
                      year may not exceed the difference between--

[[Page 116 STAT. 152]]

                                    (I) 70 percent of the projected 
                                counter-cyclical payment (including any 
                                revision thereof) for the crop of the 
                                covered commodity; and
                                    (II) the amount of the payment made 
                                under clause (i).
                          (iii) Final payment.--The final payment for a 
                      covered commodity for a crop year shall be equal 
                      to the difference between--
                                    (I) the actual counter-cyclical 
                                payment to be made to the producers for 
                                the covered commodity for that crop 
                                year; and
                                    (II) the amount of the partial 
                                payments made to the producers under 
                                clauses (i) and (ii) for that crop year.
                    (B) 2007 crop year.--
                          (i) First partial payment.--For the 2007 crop 
                      year, 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 covered commodity for the crop year, as 
                      determined by the Secretary.
                          (ii) Final payment.--The final payment for the 
                      2007 crop year shall be equal to the difference 
                      between--
                                    (I) the actual counter-cyclical 
                                payment to be made to the producers for 
                                the covered commodity for that crop 
                                year; and
                                    (II) the amount of the partial 
                                payment made to the producers under 
                                clause (i).
            (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 payment 
        to be made for the covered commodity for that crop year.

SEC. 1105. <<NOTE: 7 USC 7915.>>  PRODUCER AGREEMENT REQUIRED AS 
            CONDITION OF PROVISION OF DIRECT PAYMENTS AND COUNTER-
            CYCLICAL PAYMENTS.

    (a) Compliance With Certain Requirements.--
            (1) Requirements.--Before the producers on a farm may 
        receive direct payments or counter-cyclical payments 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 
                requirements 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 the Act 
                (16 U.S.C. 3821 et seq.);
                    (C) to comply with the planting flexibility 
                requirements of section 1106;
                    (D) to use the land on the farm, in a quantity equal 
                to the attributable base acres for the farm and any base 
                acres for peanuts for the farm under subtitle C for an

[[Page 116 STAT. 153]]

                agricultural or conserving use, and not for a 
                nonagricultural commercial or industrial use, as 
                determined by the Secretary; and
                    (E) to effectively control noxious weeds and 
                otherwise maintain the land in accordance with sound 
                agricultural practices, as determined by the Secretary, 
                if the agricultural 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 compliance with 
        the requirements of paragraph (1).
            (3) Modification.--At the request of the transferee or 
        owner, the Secretary may modify the requirements of this 
        subsection if the modifications are consistent with the 
        objectives of this subsection, as determined by the Secretary.

    (b) Transfer or Change of Interest in Farm.--
            (1) Termination.--Except as provided in paragraph (2), a 
        transfer of (or change in) the interest of the producers on a 
        farm in base acres for which direct payments or counter-cyclical 
        payments are made shall result in the termination of the 
        payments with respect to the base acres, unless the transferee 
        or owner of the acreage agrees to assume all obligations under 
        subsection (a). The termination shall take effect on the date 
        determined by the Secretary.
            (2) Exception.--If a producer entitled to a direct payment 
        or counter-cyclical payment dies, becomes incompetent, or is 
        otherwise unable to receive the payment, the Secretary shall 
        make the payment, in accordance with rules issued by the 
        Secretary.

    (c) Acreage Reports.--As a condition on the receipt of any benefits 
under this subtitle or subtitle B, the Secretary shall require producers 
on a farm to submit to the Secretary annual acreage reports with respect 
to all cropland on the farm.
    (d) Tenants and Sharecroppers.--In carrying out this subtitle, the 
Secretary shall provide adequate safeguards to protect the interests of 
tenants and sharecroppers.
    (e) Sharing of Payments.--The Secretary shall provide for the 
sharing of direct payments and counter-cyclical payments among the 
producers on a farm on a fair and equitable basis.

SEC. 1106. <<NOTE: 7 USC 7916.>>  PLANTING FLEXIBILITY.

    (a) Permitted Crops.--Subject to subsection (b), any commodity or 
crop may be planted on base acres on a farm.
    (b) Limitations Regarding Certain Commodities.--
            (1) General limitation.--The planting of an agricultural 
        commodity specified in paragraph (3) shall be prohibited on base 
        acres 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.
            (3) Covered agricultural commodities.--Paragraphs (1) and 
        (2) apply to the following agricultural commodities:
                    (A) Fruits.
                    (B) Vegetables (other than lentils, mung beans, and 
                dry peas).

[[Page 116 STAT. 154]]

                    (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 covered commodities 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 base acres, 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 determines 
        has an established planting history of a specific agricultural 
        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.

    (d) Special Rule for 2002 Crop Year.--For the 2002 crop year only, 
if the calculation of base acres under section 1101(a) results in total 
base acres for a farm in excess of the contract acreage (as defined in 
section 102 of the Federal Agriculture Improvement and Reform Act of 
1996 (7 U.S.C. 7202)) for the farm used to calculate the fiscal year 
2002 payment authorized under section 114 of such Act (7 U.S.C. 7214), 
paragraphs (1) and (2) of subsection (b) shall not limit the harvesting 
of an agricultural commodity specified in paragraph (3) of that 
subsection on the excess base acres, except that direct payments and 
counter-cyclical payments for the 2002 crop year shall be reduced by an 
acre for each acre of the excess base acres planted to such an 
agricultural commodity.

SEC. 1107. <<NOTE: 7 USC 7917.>>  RELATION TO REMAINING PAYMENT 
            AUTHORITY UNDER PRODUCTION FLEXIBILITY CONTRACTS.

    (a) Termination of Superseded Payment Authority.--Notwithstanding 
section 113(a)(7) of the Federal Agriculture Improvement and Reform Act 
of 1996 (7 U.S.C. 7213(a)(7)) or any other provision of law, the 
Secretary shall not make payments for fiscal year 2002 after the date of 
enactment of this Act under a production flexibility contract entered 
into under section 111 of that Act (7 U.S.C. 7211) unless requested by 
the producer that is a party to the contract.
    (b) Contract Payments Made Before Enactment.--If a producer receives 
all or any portion of the payment authorized for fiscal year 2002 under 
a production flexibility contract, the Secretary shall reduce the amount 
of the direct payment otherwise due the producer for the 2002 crop year 
under section 1103 by the amount of the fiscal year 2002 payment 
received by the producer under the production flexibility contract.

[[Page 116 STAT. 155]]

SEC. 1108. <<NOTE: 7 USC 7918.>>  PERIOD OF EFFECTIVENESS.

    This subtitle shall be effective beginning with the 2002 crop year 
of each covered commodity through the 2007 crop year.

   Subtitle B--Marketing Assistance Loans and Loan Deficiency Payments

SEC. 1201. <<NOTE: 7 USC 7931.>> AVAILABILITY OF NONRECOURSE MARKETING 
            ASSISTANCE LOANS FOR LOAN COMMODITIES.

    (a) Nonrecourse Loans Available.--
            (1) Availability.--For each of the 2002 through 2007 crops 
        of each loan commodity, the Secretary shall make available to 
        producers on a farm nonrecourse marketing assistance loans for 
        loan commodities produced on the farm.
            (2) Terms and conditions.--The marketing assistance loans 
        shall be made under terms and conditions that are prescribed by 
        the Secretary and at the loan rate established under section 
        1202 for the loan commodity.

    (b) Eligible Production.--The producers on a farm shall be eligible 
for a marketing assistance loan under subsection (a) for any quantity of 
a loan commodity produced on the farm.
    (c) Treatment of Certain Commingled Commodities.--In carrying out 
this subtitle, the Secretary shall make loans to producers on a farm 
that would be eligible to obtain a marketing assistance loan, but for 
the fact the loan commodity owned by the producers on the farm 
commingled with loan commodities of other producers in facilities 
unlicensed for the storage of agricultural commodities by the Secretary 
or a State licensing authority, if the producers obtaining the loan 
agree to immediately redeem the loan collateral in accordance with 
section 166 of the Federal Agriculture Improvement and Reform Act of 
1996 (7 U.S.C. 7286).
    (d) Compliance With Conservation and Wetlands Requirements.--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 the Act (16 U.S.C. 3821 et seq.) during 
the term of the loan.
    (e) Termination of Superseded Loan Authority.--Notwithstanding 
section 131 of the Federal Agriculture Improvement and Reform Act of 
1996 (7 U.S.C. 7231), nonrecourse marketing assistance loans shall not 
be made for the 2002 crop of loan commodities under subtitle C of title 
I of such Act.

SEC. 1202. <<NOTE: 7 USC 7932.>> LOAN RATES FOR NONRECOURSE MARKETING 
            ASSISTANCE LOANS.

    (a) 2002 and 2003 Crop Years.--For purposes of the 2002 and 2003 
crop years, the loan rate for a marketing assistance loan under section 
1201 for a loan commodity shall be equal to the following:
            (1) In the case of wheat, $2.80 per bushel.
            (2) In the case of corn, $1.98 per bushel.
            (3) In the case of grain sorghum, $1.98 per bushel.
            (4) In the case of barley, $1.88 per bushel.
            (5) In the case of oats, $1.35 per bushel.
            (6) In the case of upland cotton, $0.52 per pound.

[[Page 116 STAT. 156]]

            (7) In the case of extra long staple cotton, $0.7977 per 
        pound.
            (8) In the case of rice, $6.50 per hundredweight.
            (9) In the case of soybeans, $5.00 per bushel.
            (10) In the case of other oilseeds, $0.0960 per pound.
            (11) In the case of graded wool, $1.00 per pound.
            (12) In the case of nongraded wool, $0.40 per pound.
            (13) In the case of mohair, $4.20 per pound.
            (14) In the case of honey, $0.60 per pound.
            (15) In the case of dry peas, $6.33 per hundredweight.
            (16) In the case of lentils, $11.94 per hundredweight.
            (17) In the case of small chickpeas, $7.56 per 
        hundredweight.

    (b) 2004 Through 2007 crop Years.--For purposes of the 2004 through 
2007 crop years, the loan rate for a marketing assistance loan under 
section 1201 for a loan commodity shall be equal to the following:
            (1) In the case of wheat, $2.75 per bushel.
            (2) In the case of corn, $1.95 per bushel.
            (3) In the case of grain sorghum, $1.95 per bushel.
            (4) In the case of barley, $1.85 per bushel.
            (5) In the case of oats, $1.33 per bushel.
            (6) In the case of upland cotton, $0.52 per pound.
            (7) In the case of extra long staple cotton, $0.7977 per 
        pound.
            (8) In the case of rice, $6.50 per hundredweight.
            (9) In the case of soybeans, $5.00 per bushel.
            (10) In the case of other oilseeds, $0.0930 per pound.
            (11) In the case of graded wool, $1.00 per pound.
            (12) In the case of nongraded wool, $0.40 per pound.
            (13) In the case of mohair, $4.20 per pound.
            (14) In the case of honey, $0.60 per pound.
            (15) In the case of dry peas, $6.22 per hundredweight.
            (16) In the case of lentils, $11.72 per hundredweight.
            (17) In the case of small chickpeas, $7.43 per 
        hundredweight.

SEC. 1203. <<NOTE: 7 USC 7933.>>  TERM OF LOANS.

    (a) Term of Loan.--In the case of each loan commodity, a marketing 
assistance loan under section 1201 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.

    (b) Extensions Prohibited.--The Secretary may not extend the term of 
a marketing assistance loan for any loan commodity.

SEC. 1204. <<NOTE: 7 USC 7934.>> REPAYMENT OF LOANS.

    (a) General Rule.--The Secretary shall permit the producers on a 
farm to repay a marketing assistance loan under section 1201 for a loan 
commodity (other than upland cotton, rice, and extra long staple cotton) 
at a rate that is the lesser of--
            (1) the loan rate established for the commodity under 
        section 1202, plus interest (determined in accordance with 
        section 163 of the Federal Agriculture Improvement and Reform 
        Act of 1996 (7 U.S.C. 7283)); or
            (2) a rate that the Secretary determines will--
                    (A) minimize potential loan forfeitures;
                    (B) minimize the accumulation of stocks of the 
                commodity by the Federal Government;

[[Page 116 STAT. 157]]

                    (C) minimize the cost incurred by the Federal 
                Government in storing the commodity;
                    (D) allow the commodity produced in the United 
                States to be marketed freely and competitively, both 
                domestically and internationally; and
                    (E) minimize discrepancies in marketing loan 
                benefits across State boundaries and across county 
                boundaries.

    (b) Repayment Rates for Upland Cotton and Rice.--The Secretary shall 
permit producers to repay a marketing assistance loan under section 1201 
for upland cotton and rice at a rate that is the lesser of--
            (1) the loan rate established for the commodity under 
        section 1202, plus interest (determined in accordance with 
        section 163 of the Federal Agriculture Improvement and Reform 
        Act of 1996 (7 U.S.C. 7283)); or
            (2) the prevailing world market price for the commodity 
        (adjusted to United States quality and location), as determined 
        by the Secretary.

    (c) Repayment Rates for Extra Long Staple Cotton.--Repayment of a 
marketing assistance loan for extra long staple cotton shall be at the 
loan rate established for the commodity under section 1202, plus 
interest (determined in accordance with section 163 of the Federal 
Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283)).

    (d) Prevailing World Market <<NOTE: Regulations.>>  Price.--For 
purposes of this section and section 1207, the Secretary shall prescribe 
by regulation--
            (1) a formula to determine the prevailing world market price 
        for upland cotton and rice, adjusted to United States quality 
        and location; and
            (2) a mechanism by which the Secretary shall announce 
        periodically the prevailing world market price for upland cotton 
        and rice.

    (e) Adjustment of Prevailing World Market Price for Upland Cotton.--
            (1) In general.--During the period beginning on the date of 
        the enactment of this Act through July 31, 2008, the prevailing 
        world market price for upland cotton (adjusted to United States 
        quality and location) established under subsection (d) shall be 
        further adjusted if--
                    (A) the adjusted prevailing world market price is 
                less than 115 percent of the loan rate for upland cotton 
                established under section 1202, as determined by the 
                Secretary; and
                    (B) the Friday through Thursday average price 
                quotation for the lowest-priced United States growth as 
                quoted for Middling (M) 1\3/32\-inch cotton delivered 
                C.I.F. Northern Europe is greater than the Friday 
                through Thursday average price of the 5 lowest-priced 
                growths of upland cotton, as quoted for Middling (M) 
                1\3/32\-inch cotton, delivered C.I.F. Northern Europe 
                (referred to in this section as the ``Northern Europe 
                price'').
            (2) Further adjustment.--Except as provided in paragraph 
        (3), the adjusted prevailing world market price for upland 
        cotton shall be further adjusted on the basis of some or all of 
        the following data, as available:
                    (A) The United States share of world exports.

[[Page 116 STAT. 158]]

                    (B) The current level of cotton export sales and 
                cotton export shipments.
                    (C) Other data determined by the Secretary to be 
                relevant in establishing an accurate prevailing world 
                market price for upland cotton (adjusted to United 
                States quality and location).
            (3) Limitation on further adjustment.--The adjustment under 
        paragraph (2) may not exceed the difference between--
                    (A) the Friday through Thursday average price for 
                the lowest-priced United States growth as quoted for 
                Middling 1\3/32\-inch cotton delivered C.I.F. Northern 
                Europe; and
                    (B) the Northern Europe price.

    (f) Good Faith Exception to Beneficial Interest Requirement.--For 
the 2001 crop year only, in the case of the producers on a farm that 
marketed or otherwise lost beneficial interest in a loan commodity for 
which a marketing assistance loan was made under section 131 of the 
Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7231) 
before repaying the loan, the Secretary shall permit the producers to 
repay the loan at the appropriate repayment rate that was in effect for 
the loan commodity under section 134 of that Act (7 U.S.C. 7234) on the 
date that the producers lost beneficial interest, as determined by the 
Secretary, if the Secretary determines the producers acted in good 
faith.

SEC. 1205. <<NOTE: 7 USC 7935.>>  LOAN DEFICIENCY PAYMENTS.

    (a) Availability of Loan Deficiency Payments.--
            (1) In general.--Except as provided in subsection (d), the 
        Secretary may make loan deficiency payments available to 
        producers on a farm that, although eligible to obtain a 
        marketing assistance loan under section 1201 with respect to a 
        loan commodity, agree to forgo obtaining the loan for the 
        commodity in return for loan deficiency payments under this 
        section.
            (2) Unshorn pelts, hay, and silage.--Nongraded wool in the 
        form of unshorn pelts and hay and silage derived from a loan 
        commodity are not eligible for a marketing assistance loan under 
        section 1201. However, effective for the 2002 through 2007 crop 
        years, the Secretary may make loan deficiency payments available 
        under this section to producers on a farm that produce unshorn 
        pelts or hay and silage derived from a loan commodity.

    (b) Computation.--A loan deficiency payment for a loan commodity or 
commodity referred to in subsection (a)(2) shall be computed by 
multiplying--
            (1) the payment rate determined under subsection (c) for the 
        commodity; by
            (2) the quantity of the commodity produced by the eligible 
        producers, excluding any quantity for which the producers obtain 
        a marketing assistance loan under section 1201.

    (c) Payment Rate.--
            (1) In general.--In the case of a loan commodity, the 
        payment rate shall be the amount by which--
                    (A) the loan rate established under section 1202 for 
                the loan commodity; exceeds
                    (B) the rate at which a marketing assistance loan 
                for the loan commodity may be repaid under section 1204.

[[Page 116 STAT. 159]]

            (2) Unshorn pelts.--In the case of unshorn pelts, the 
        payment rate shall be the amount by which--
                    (A) the loan rate established under section 1202 for 
                ungraded wool; exceeds
                    (B) the rate at which a marketing assistance loan 
                for ungraded wool may be repaid under section 1204.
            (3) hay and silage.--In the case of hay or silage derived 
        from a loan commodity, the payment rate shall be the amount by 
        which--
                    (A) the loan rate established under section 1202 for 
                the loan commodity from which the hay or silage is 
                derived; exceeds
                    (B) the rate at which a marketing assistance loan 
                for the loan commodity may be repaid under section 1204.

    (d) Exception for Extra Long Staple Cotton.--This section shall not 
apply with respect to extra long staple cotton.
    (e) Effective Date for Payment Rate Determination.--The Secretary 
shall determine the amount of the loan deficiency payment to be made 
under this section to the producers on a farm with respect to a quantity 
of a loan commodity or commodity referred to in subsection (a)(2) using 
the payment rate in effect under subsection (c) as of the date the 
producers request the payment.
    (f) Special Loan Deficiency Payment Rules.--
            (1) First-time loan commodities.--For the 2002 crop of wool, 
        mohair, honey, dry peas, lentils and small chickpeas, in the 
        case of producers of such a crop that would be eligible for a 
        loan deficiency payment under this section except for the fact 
        that the producers lost beneficial interest in the crop prior to 
        the date of publication of the regulations implementing this 
        section, the producers shall be eligible for a loan deficiency 
        payment as of the date producers marketed or otherwise lost 
        beneficial interest in the crop, as determined by the Secretary.
            (2) 2001 crop year.--Section 135 of the Federal Agriculture 
        Improvement and Reform Act of 1996 (7 U.S.C. 7235) is amended--
                    (A) in subsection (a)(2), by striking ``2000 crop 
                year'' and inserting ``2000 and 2001 crop years''; and
                    (B) by adding at the end the following:

    ``(g) Effective Date for Payment Rate Determination.--For the 2001 
crop year, the Secretary shall determine the amount of the loan 
deficiency payment to be made under this section to the producers on a 
farm with respect to a quantity of a loan commodity using the payment 
rate in effect under subsection (c) as of the earlier of the following:
            ``(1) The date on which the producers marketed or otherwise 
        lost beneficial interest in the crop of the loan commodity, as 
        determined by the Secretary.
            ``(2) The date the producers requested the payment.''.

SEC. 1206. <<NOTE: 7 USC 7936.>>  PAYMENTS IN LIEU OF LOAN DEFICIENCY 
            PAYMENTS FOR GRAZED ACREAGE.

    (a) Eligible Producers.--
            (1) In general.--Effective for the 2002 through 2007 crop 
        years, in the case of a producer that would be eligible for a 
        loan deficiency payment under section 1205 for wheat, barley, or 
        oats, but that elects to use acreage planted to the wheat,

[[Page 116 STAT. 160]]

        barley, or oats for the grazing of livestock, the Secretary 
        shall make a payment to the producer under this section if the 
        producer enters into an agreement with the Secretary to forgo 
        any other harvesting of the wheat, barley, or oats on that 
        acreage.
            (2) Grazing of triticale acreage.--Effective for the 2002 
        through 2007 crop years, with respect to a producer on a farm 
        that uses acreage planted to triticale for the grazing of 
        livestock, the Secretary shall make a payment to the producer 
        under this section if the producer enters into an agreement with 
        the Secretary to forgo any other harvesting of triticale on that 
        acreage.

    (b) Payment Amount.--
            (1) In general.--The amount of a payment made under this 
        section to a producer on a farm described in subsection (a)(1) 
        shall be equal to the amount determined by multiplying--
                    (A) the loan deficiency payment rate determined 
                under section 1205(c) in effect, as of the date of the 
                agreement, for the county in which the farm is located; 
                by
                    (B) the payment quantity determined by multiplying--
                          (i) the quantity of the grazed acreage on the 
                      farm with respect to which the producer elects to 
                      forgo harvesting of wheat, barley, or oats; and
                          (ii) the payment yield in effect for the 
                      calculation of direct payments under subtitle A 
                      with respect to that loan commodity on the farm 
                      or, in the case of a farm without a payment yield 
                      for that loan commodity, an appropriate yield 
                      established by the Secretary in a manner 
                      consistent with section 1102(c).
            (2) Grazing of triticale acreage.--The amount of a payment 
        made under this section to a producer on a farm described in 
        subsection (a)(2) shall be equal to the amount determined by 
        multiplying--
                    (A) the loan deficiency payment rate determined 
                under section 1205(c) in effect for wheat, as of the 
                date of the agreement, for the county in which the farm 
                is located; by
                    (B) the payment quantity determined by multiplying--
                          (i) the quantity of the grazed acreage on the 
                      farm with respect to which the producer elects to 
                      forgo harvesting of triticale; and
                          (ii) the payment yield in effect for the 
                      calculation of direct payments under subtitle A 
                      with respect to wheat on the farm or, in the case 
                      of a farm without a payment yield for wheat, an 
                      appropriate yield established by the Secretary in 
                      a manner consistent with section 1102(c).

    (c) Time, Manner, and Availability of Payment.--
            (1) Time and manner.--A payment under this section shall be 
        made at the same time and in the same manner as loan deficiency 
        payments are made under section 1205.
            (2) Availability.--The Secretary shall establish an 
        availability period for the payments authorized by this section. 
        In the case of wheat, barley, and oats, the availability period 
        shall be consistent with the availability period for the 
        commodity established by the Secretary for marketing assistance 
        loans authorized by this subtitle.

[[Page 116 STAT. 161]]

    (d) Prohibition on Crop Insurance Indemnity or Noninsured Crop 
Assistance.--A 2002 through 2007 crop of wheat, barley, oats, or 
triticale planted on acreage that a producer elects, in the agreement 
required by subsection (a), to use for the grazing of livestock in lieu 
of any other harvesting of the crop shall not be eligible for an 
indemnity under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) 
or noninsured crop assistance under section 196 of the Federal 
Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333).

SEC. 1207. <<NOTE: 7 USC 7937.>>  SPECIAL MARKETING LOAN PROVISIONS FOR 
            UPLAND COTTON.

    (a) Cotton User Marketing Certificates.--
            (1) Issuance.--During the period beginning on the date of 
        the enactment of this Act through July 31, 2008, the Secretary 
        shall issue marketing certificates or cash payments, at the 
        option of the recipient, to domestic users and exporters for 
        documented purchases by domestic users and sales for export by 
        exporters made in the week following a consecutive 4-week period 
        in which--
                    (A) the Friday through Thursday average price 
                quotation for the lowest-priced United States growth, as 
                quoted for Middling (M) 1\3/32\-inch cotton, delivered 
                C.I.F. Northern Europe exceeds the Northern Europe price 
                by more than 1.25 cents per pound; and
                    (B) the prevailing world market price for upland 
                cotton (adjusted to United States quality and location) 
                does not exceed 134 percent of the loan rate for upland 
                cotton established under section 1202.
            (2) Value of certificates or payments.--The value of the 
        marketing certificates or cash payments shall be based on the 
        amount of the difference (reduced by 1.25 cents per pound) in 
        the prices during the fourth week of the consecutive 4-week 
        period multiplied by the quantity of upland cotton included in 
        the documented sales.
            (3) Administration of marketing certificates.--
                    (A) Redemption, marketing, or exchange.--The 
                Secretary shall establish procedures for redeeming 
                marketing certificates for cash or marketing or exchange 
                of the certificates for agricultural commodities owned 
                by the Commodity Credit Corporation or pledged to the 
                Commodity Credit Corporation as collateral for a loan in 
                such manner, and at such price levels, as the Secretary 
                determines will best effectuate the purposes of cotton 
                user marketing certificates, including enhancing the 
                competitiveness and marketability of United States 
                cotton. Any price restrictions that would otherwise 
                apply to the disposition of agricultural commodities by 
                the Commodity Credit Corporation shall not apply to the 
                redemption of certificates under this subsection.
                    (B) Designation of commodities and products.--To the 
                extent practicable, the Secretary shall permit owners of 
                certificates to designate the commodities and products, 
                including storage sites, the owners would prefer to 
                receive in exchange for certificates
                    (C) Transfers.--Marketing certificates issued to 
                domestic users and exporters of upland cotton may be

[[Page 116 STAT. 162]]

                transferred to other persons in accordance with 
                regulations issued by the Secretary.
            (4) Delayed application of threshold.--Through July 31, 
        2006, the Secretary shall make the calculations under paragraphs 
        (1)(A) and (2) without regard to the 1.25 cent threshold 
        provided under those paragraphs.

    (b) Special Import Quota.--
            (1) Establishment.--
                    (A) In general.--The President shall carry out an 
                import quota program during the period beginning on the 
                date of the enactment of this Act through July 31, 2008, 
                as provided in this subsection.
                    (B) Program requirements.--Except as provided in 
                subparagraph (C), whenever the Secretary determines and 
                announces that for any consecutive 4-week period, the 
                Friday through Thursday average price quotation for the 
                lowest-priced United States growth, as quoted for 
                Middling (M) 1\3/32\-inch cotton, delivered C.I.F. 
                Northern Europe, adjusted for the value of any 
                certificate issued under subsection (a), exceeds the 
                Northern Europe price by more than 1.25 cents per pound, 
                there shall immediately be in effect a special import 
                quota.
                    (C) Tight domestic supply.--During any month for 
                which the Secretary estimates the season-ending United 
                States upland cotton stocks-to-use ratio, as determined 
                under subparagraph (D), to be below 16 percent, the 
                Secretary, in making the determination under 
                subparagraph (B), shall not adjust the Friday through 
                Thursday average price quotation for the lowest-priced 
                United States growth, as quoted for Middling (M) 1\3/
                32\-inch cotton, delivered C.I.F. Northern Europe, for 
                the value of any certificates issued under subsection 
                (a).
                    (D) Season-ending united states stocks-to-use 
                ratio.--For the purposes of making estimates under 
                subparagraph (C), the Secretary shall, on a monthly 
                basis, estimate and report the season-ending United 
                States upland cotton stocks-to-use ratio, excluding 
                projected raw cotton imports but including the quantity 
                of raw cotton that has been imported into the United 
                States during the marketing year.
                    (E) Delayed application of threshold.--Through July 
                31, 2006, the Secretary shall make the calculation under 
                subparagraph (B) without regard to the 1.25 cent 
                threshold provided under that subparagraph.
            (2) Quantity.--The quota shall be equal to one week's 
        consumption of upland cotton by domestic mills at the seasonally 
        adjusted average rate of the most recent three months for which 
        data are available.
            (3) Application.--The <<NOTE: Deadlines.>> quota shall apply 
        to upland cotton purchased not later than 90 days after the date 
        of the Secretary's announcement under paragraph (1) and entered 
        into the United States not later than 180 days after the date.
            (4) Overlap.--A special quota period may be established that 
        overlaps any existing quota period if required by paragraph (1), 
        except that a special quota period may not be established under 
        this subsection if a quota period has been established under 
        subsection (c).

[[Page 116 STAT. 163]]

            (5) Preferential tariff treatment.--The quantity under a 
        special import quota shall be considered to be an in-quota 
        quantity for purposes of--
                    (A) section 213(d) of the Caribbean Basin Economic 
                Recovery Act (19 U.S.C. 2703(d));
                    (B) section 204 of the Andean Trade Preference Act 
                (19 U.S.C. 3203);
                    (C) section 503(d) of the Trade Act of 1974 (19 
                U.S.C. 2463(d)); and
                    (D) General Note 3(a)(iv) to the Harmonized Tariff 
                Schedule.
            (6) Definition.--In this subsection, the term ``special 
        import quota'' means a quantity of imports that is not subject 
        to the over-quota tariff rate of a tariff-rate quota.
            (7) Limitation.--The quantity of cotton entered into the 
        United States during any marketing year under the special import 
        quota established under this subsection may not exceed the 
        equivalent of 5 week's consumption of upland cotton by domestic 
        mills at the seasonally adjusted average rate of the 3 months 
        immediately preceding the first special import quota established 
        in any marketing year.

    (c) Limited Global Import Quota for Upland Cotton.--
            (1) In general.--The President shall carry out an import 
        quota program that provides that whenever the Secretary 
        determines and announces that the average price of the base 
        quality of upland cotton, as determined by the Secretary, in the 
        designated spot markets for a month exceeded 130 percent of the 
        average price of such quality of cotton in the markets for the 
        preceding 36 months, notwithstanding any other provision of law, 
        there shall immediately be in effect a limited global import 
        quota subject to the following conditions:
                    (A) Quantity.--The quantity of the quota shall be 
                equal to 21 days of domestic mill consumption of upland 
                cotton at the seasonally adjusted average rate of the 
                most recent 3 months for which data are available.
                    (B) Quantity if prior quota.--If a quota has been 
                established under this subsection during the preceding 
                12 months, the quantity of the quota next established 
                under this subsection shall be the smaller of 21 days of 
                domestic mill consumption calculated under subparagraph 
                (A) or the quantity required to increase the supply to 
                130 percent of the demand.
                    (C) Preferential tariff treatment.--The quantity 
                under a limited global import quota shall be considered 
                to be an in-quota quantity for purposes of--
                          (i) section 213(d) of the Caribbean Basin 
                      Economic Recovery Act (19 U.S.C. 2703(d));
                          (ii) section 204 of the Andean Trade 
                      Preference Act (19 U.S.C. 3203);
                          (iii) section 503(d) of the Trade Act of 1974 
                      (19 U.S.C. 2463(d)); and
                          (iv) General Note 3(a)(iv) to the Harmonized 
                      Tariff Schedule.
                    (D) Definitions.--In this subsection:
                          (i) Supply.--The term ``supply'' means, using 
                      the latest official data of the Bureau of the 
                      Census, the

[[Page 116 STAT. 164]]

                      Department of Agriculture, and the Department of 
                      the Treasury--
                                    (I) the carry-over of upland cotton 
                                at the beginning of the marketing year 
                                (adjusted to 480-pound bales) in which 
                                the quota is established;
                                    (II) production of the current crop; 
                                and
                                    (III) imports to the latest date 
                                available during the marketing year.
                          (ii) Demand.--The term ``demand'' means--
                                    (I) the average seasonally adjusted 
                                annual rate of domestic mill consumption 
                                during the most recent 3 months for 
                                which data are available; and
                                    (II) the larger of--
                                            (aa) average exports of 
                                        upland cotton during the 
                                        preceding 6 marketing years; or
                                            (bb) cumulative exports of 
                                        upland cotton plus outstanding 
                                        export sales for the marketing 
                                        year in which the quota is 
                                        established.
                          (iii) Limited global import quota.--The term 
                      ``limited global import quota'' means a quantity 
                      of imports that is not subject to the over-quota 
                      tariff rate of a tariff-rate quota.
                    (E) Quota entry period.--When a quota is established 
                under this subsection, cotton may be entered under the 
                quota during the 90-day period beginning on the date the 
                quota is established by the Secretary.
            (2) No overlap.--Notwithstanding paragraph (1), a quota 
        period may not be established that overlaps an existing quota 
        period or a special quota period established under subsection 
        (b).

SEC. 1208. <<NOTE: 7 USC 7938.>>  SPECIAL COMPETITIVE PROVISIONS FOR 
            EXTRA LONG STAPLE COTTON.

    (a) Competitiveness Program.--Notwithstanding any other provision of 
law, during the period beginning on the date of the enactment of this 
Act through July 31, 2008, the Secretary shall carry out a program--
            (1) to maintain and expand the domestic use of extra long 
        staple cotton produced in the United States;
            (2) to increase exports of extra long staple cotton produced 
        in the United States; and
            (3) to ensure that extra long staple cotton produced in the 
        United States remains competitive in world markets.

    (b) Payments Under Program; Trigger.--Under the program, the 
Secretary shall make payments available under this section whenever--
            (1) for a consecutive 4-week period, the world market price 
        for the lowest priced competing growth of extra long staple 
        cotton (adjusted to United States quality and location and for 
        other factors affecting the competitiveness of such cotton), as 
        determined by the Secretary, is below the prevailing United 
        States price for a competing growth of extra long staple cotton; 
        and
            (2) the lowest priced competing growth of extra long staple 
        cotton (adjusted to United States quality and location and for 
        other factors affecting the competitiveness of such cotton),

[[Page 116 STAT. 165]]

        as determined by the Secretary, is less than 134 percent of the 
        loan rate for extra long staple cotton.

    (c) Eligible Recipients.--The Secretary shall make payments 
available under this section to domestic users of extra long staple 
cotton produced in the United States and exporters of extra long staple 
cotton produced in the United States that enter into an agreement with 
the Commodity Credit Corporation to participate in the program under 
this section.
    (d) Payment Amount.--Payments under this section shall be based on 
the amount of the difference in the prices referred to in subsection 
(b)(1) during the fourth week of the consecutive 4-week period 
multiplied by the amount of documented purchases by domestic users and 
sales for export by exporters made in the week following such a 
consecutive 4-week period.
    (e) Form of Payment.--Payments under this section shall be made 
through the issuance of cash or marketing certificates, at the option of 
eligible recipients of the payments.

SEC. 1209. <<NOTE: 7 USC 7939.>>  AVAILABILITY OF RECOURSE LOANS FOR 
            HIGH MOISTURE FEED GRAINS AND SEED COTTON.

    (a) High Moisture Feed Grains.--
            (1) Recourse loans available.--For each of the 2002 through 
        2007 crops of corn and grain sorghum, the Secretary shall make 
        available recourse loans, as determined by the Secretary, to 
        producers on a farm that--
                    (A) normally harvest all or a portion of their crop 
                of corn or grain sorghum in a high moisture state;
                    (B) present--
                          (i) certified scale tickets from an inspected, 
                      certified commercial scale, including a licensed 
                      warehouse, feedlot, feed mill, distillery, or 
                      other similar entity approved by the Secretary, 
                      pursuant to regulations issued by the Secretary; 
                      or
                          (ii) field or other physical measurements of 
                      the standing or stored crop in regions of the 
                      United States, as determined by the Secretary, 
                      that do not have certified commercial scales from 
                      which certified scale tickets may be obtained 
                      within reasonable proximity of harvest operation;
                    (C) certify that they were the owners of the feed 
                grain at the time of delivery to, and that the quantity 
                to be placed under loan under this subsection was in 
                fact harvested on the farm and delivered to, a feedlot, 
                feed mill, or commercial or on-farm high-moisture 
                storage facility, or to a facility maintained by the 
                users of corn and grain sorghum in a high moisture 
                state; and
                    (D) comply with deadlines established by the 
                Secretary for harvesting the corn or grain sorghum and 
                submit applications for loans under this subsection 
                within deadlines established by the Secretary.
            (2) Eligibility of acquired feed grains.--A loan under this 
        subsection shall be made on a quantity of corn or grain sorghum 
        of the same crop acquired by the producer equivalent to a 
        quantity determined by multiplying--
                    (A) the acreage of the corn or grain sorghum in a 
                high moisture state harvested on the producer's farm; by

[[Page 116 STAT. 166]]

                    (B) the lower of the farm program payment yield used 
                to make counter-cyclical payments under subtitle A or 
                the actual yield on a field, as determined by the 
                Secretary, that is similar to the field from which the 
                corn or grain sorghum was obtained.
            (3) High moisture state defined.--In this subsection, the 
        term ``high moisture state'' means corn or grain sorghum having 
        a moisture content in excess of Commodity Credit Corporation 
        standards for marketing assistance loans made by the Secretary 
        under section 1201.

    (b) Recourse Loans Available for Seed Cotton.--For each of the 2002 
through 2007 crops of upland cotton and extra long staple cotton, the 
Secretary shall make available recourse seed cotton loans, as determined 
by the Secretary, on any production.
    (c) Repayment Rates.--Repayment of a recourse loan made under this 
section shall be at the loan rate established for the commodity by the 
Secretary, plus interest (determined in accordance with section 163 of 
the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 
7283)).
    (d) Termination of Superseded Loan Authority.--Notwithstanding 
section 137 of the Federal Agriculture Improvement and Reform Act of 
1996 (7 U.S.C. 7237), recourse loans shall not be made for the 2002 crop 
of corn, grain sorghum, and seed cotton under such section.

                           Subtitle C--Peanuts

SEC. 1301. <<NOTE: 7 USC 7951.>>  DEFINITIONS.

    In this subtitle:
            (1) Base acres for peanuts.--The term ``base acres for 
        peanuts'' means the number of acres assigned to a farm by 
        historic peanut producers pursuant to section 1302(b).
            (2) Counter-cyclical payment.--The term ``counter-cyclical 
        payment'' means a payment made under section 1304.
            (3) Effective price.--The term ``effective price'' means the 
        price calculated by the Secretary under section 1304 for peanuts 
        to determine whether counter-cyclical payments are required to 
        be made under that section for a crop year.
            (4) Direct payment.--The term ``direct payment'' means a 
        payment made under section 1303.
            (5) Historic peanut producer.--The term ``historic peanut 
        producer'' means a producer on a farm in the United States that 
        produced or was prevented from planting peanuts during any or 
        all of the 1998 through 2001 crop years.
            (6) Payment acres.--The term ``payment acres'' means--
                    (A) for the 2002 crop of peanuts, 85 percent of the 
                average acreage determined under section 1302(a)(2) for 
                an historic peanut producer; and
                    (B) for the 2003 through 2007 crops of peanuts, 85 
                percent of the base acres for peanuts assigned to a farm 
                under section 1302(b).
            (7) Payment yield.--The term ``payment yield'' means the 
        yield assigned to a farm by historic peanut producers pursuant 
        to section 1302(b).
            (8) Producer.--The term ``producer'' means an owner, 
        operator, landlord, tenant, or sharecropper that shares in the

[[Page 116 STAT. 167]]

        risk of producing a crop on a farm and is entitled to share in 
        the crop available for marketing from the farm, or would have 
        shared had the crop been produced. In determining whether a 
        grower of hybrid seed is a producer, the Secretary shall not 
        take into consideration the existence of a hybrid seed contract 
        and shall ensure that program requirements do not adversely 
        affect the ability of the grower to receive a payment under this 
        subtitle.
            (9) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.
            (10) State.--The term ``State'' means each of the several 
        States of the United States, the District of Columbia, the 
        Commonwealth of Puerto Rico, and any other territory or 
        possession of the United States.
            (11) Target price.--The term ``target price'' means the 
        price per ton of peanuts used to determine the payment rate for 
        counter-cyclical payments.
            (12) United states.--The term ``United States'', when used 
        in a geographical sense, means all of the States.

SEC. 1302. <<NOTE: 7 USC 7952.>>  ESTABLISHMENT OF PAYMENT YIELD AND 
            BASE ACRES FOR PEANUTS FOR A FARM.

    (a) Average Yield and Acreage Average for Historic Peanut 
Producers.--
            (1) Determination of average yield.--
                    (A) In general.--The Secretary shall determine, for 
                each historic peanut producer, the average yield for 
                peanuts on each farm on which the historic peanut 
                producer planted peanuts for harvest for the 1998 
                through 2001 crop years, excluding any crop year in 
                which the producer did not plant or was prevented from 
                planting peanuts.
                    (B) Assigned yields.--For the purposes of 
                determining the 4-year average yield for an historic 
                peanut producer under this paragraph, the historic 
                peanut producer may elect to substitute for a farm, for 
                not more than 3 of the 1998 through 2001 crop years in 
                which the producer planted peanuts on the farm, the 
                average yield for peanuts produced in the county in 
                which the farm is located for the 1990 through 1997 crop 
                years.
            (2) Determination of acreage average.--
                    (A) In general.--The Secretary shall determine, for 
                each historic peanut producer, the 4-year average of the 
                following:
                          (i) Acreage planted to peanuts on each farm on 
                      which the historic peanut producer planted peanuts 
                      for harvest for the 1998 through 2001 crop years.
                          (ii) Any acreage on each farm that the 
                      historic peanut producer was prevented from 
                      planting to peanuts during the 1998 through 2001 
                      crop years because of drought, flood, or other 
                      natural disaster, or other condition beyond the 
                      control of the historic peanut producer, as 
                      determined by the Secretary.
                    (B) Inclusion of all 4 years in average.--For the 
                purposes of determining the 4-year acreage average for 
                an historic peanut producer under this paragraph, the 
                Secretary shall not exclude any crop year in which the 
                producer did not plant peanuts.

[[Page 116 STAT. 168]]

                    (C) Proportional shares.--If more than 1 historic 
                peanut producer shared in the risk of producing the crop 
                on a farm, the historic peanut producers shall receive 
                their proportional share of the number of acres planted 
                (or prevented from being planted) to peanuts for harvest 
                on the farm based on the sharing arrangement that was in 
                effect among the producers for the crop.
            (3) Time for determinations.--The Secretary shall make the 
        determinations required by this subsection as soon as 
        practicable after the date of enactment of this Act.
            (4) Special considerations.--In making the determinations 
        required by this subsection, the Secretary shall take into 
        account changes in the number, identity, or interest of 
        producers sharing in the risk of producing a peanut crop since 
        the 1998 crop year, including providing a method for the 
        assignment of average acres and average yield to a farm--
                    (A) when an historic peanut producer is no longer 
                living;
                    (B) when an entity composed of historic peanut 
                producers has been dissolved; or
                    (C) in other appropriate situations, as determined 
                by the Secretary.

    (b) Assignment of Average Yields and Average Acreage to Farms.--
            (1) Assignment by historic peanut producers.--The Secretary 
        shall give each historic peanut producer an opportunity to 
        assign the average peanut yield and average acreage determined 
        under subsection (a) for each farm of the historic peanut 
        producer to cropland on that farm or another farm in the same 
        State or a contiguous State.
            (2) Limitation on acreage assignment.--Notwithstanding 
        paragraph (1), the average acreage determined under subsection 
        (a)(2) for a farm may not be assigned to a farm in a contiguous 
        State unless--
                    (A) the historic peanut producer making the 
                assignment produced peanuts in that State during at 
                least 1 of the 1998 through 2001 crop years; or
                    (B) as of March 31, 2003, the historic peanut 
                producer is a producer on a farm in that State.
            (3) Notice of assignment opportunity.--The Secretary shall 
        provide notice to historic peanut producers regarding their 
        opportunity to assign average peanut yields and average acreages 
        to farms under paragraph (1). The notice shall include the 
        following:
                    (A) Notice that the opportunity to make the 
                assignments is being provided only once.
                    (B) A description of the limitation in paragraph (2) 
                on their ability to make the assignments.
                    (C) Information regarding the manner in which the 
                assignments must be made and the time periods and manner 
                in which notice of the assignments must be submitted to 
                the Secretary.
            (4) Assignment deadlines.--Not later than March 31, 2003, an 
        historic peanut producer shall submit to the Secretary notice of 
        the assignments made by the producer under this subsection. If 
        an historic peanut producer fails to submit the

[[Page 116 STAT. 169]]

        notice by that date, the notice shall be submitted in such other 
        manner as the Secretary may prescribe.

    (c) Payment Yield.--The average of all of the yields assigned by 
historic peanut producers under subsection (b) to a farm shall be 
considered to be the payment yield for that farm for the purpose of 
making direct payments and counter-cyclical payments under this 
subtitle.
    (d) Base Acres for Peanuts.--Subject to subsection (e), the total 
number of acres assigned by historic peanut producers under subsection 
(b) to a farm shall be considered to be the farm's base acres for 
peanuts for the purpose of making direct payments and counter-cyclical 
payments under this subtitle.

    (e) Treatment of Conservation Reserve Contract Acreage.--
            (1) In general.--The Secretary shall provide for an 
        adjustment, as appropriate, in the base acres for peanuts for a 
        farm whenever either of the following circumstances occur:
                    (A) A conservation reserve contract entered into 
                under section 1231 of the Food Security Act of 1985 (16 
                U.S.C. 3831) with respect to the farm expires or is 
                voluntarily terminated.
                    (B) Cropland is released from coverage under a 
                conservation reserve contract by the Secretary.
            (2) Special payment rules.--For the crop year in which a 
        base acres for peanuts adjustment under paragraph (1) is first 
        made, the owner of the farm shall elect to receive either direct 
        payments and counter-cyclical payments with respect to the 
        acreage added to the farm under this subsection or a prorated 
        payment under the conservation reserve contract, but not both.

    (f) Prevention of Excess Base Acres for Peanuts.--
            (1) Required reduction.--If the sum of the base acres for 
        peanuts for a farm, together with the acreage described in 
        paragraph (2), exceeds the actual cropland acreage of the farm, 
        the Secretary shall reduce the base acres for peanuts for the 
        farm or the base acres for 1 or more covered commodities under 
        subtitle A for the farm so that the sum of the base acres for 
        peanuts and acreage described in paragraph (2) does not exceed 
        the actual cropland acreage of the farm.
            (2) Other acreage.--For purposes of paragraph (1), the 
        Secretary shall include the following:
                    (A) Any base acres for the farm under subtitle A.
                    (B) Any acreage on the farm enrolled in the 
                conservation reserve program or wetlands reserve program 
                under chapter 1 of subtitle D of title XII of the Food 
                Security Act of 1985 (16 U.S.C. 3830 et seq.).
                    (C) Any other acreage on the farm enrolled in a 
                conservation program for which payments are made in 
                exchange for not producing an agricultural commodity on 
                the acreage.
            (3) Selection of acres.--The Secretary shall give the owner 
        of the farm the opportunity to select the base acres for peanuts 
        or the subtitle A base acres 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.

[[Page 116 STAT. 170]]

            (5) Coordinated application of requirements.--The Secretary 
        shall take into account section 1101(g) when applying the 
        requirements of this subsection.

    (g) Permanent Reduction in Base Acres for Peanuts.--The owner of a 
farm may reduce, at any time, the base acres for peanuts assigned to the 
farm. The reduction shall be permanent and made in the manner prescribed 
by the Secretary.

SEC. 1303. <<NOTE: 7 USC 7953.>>  AVAILABILITY OF DIRECT PAYMENTS FOR 
            PEANUTS.

    (a) Payment Required.--
            (1) 2002 crop year.--For the 2002 crop year, the Secretary 
        shall make direct payments under this section to historic peanut 
        producers.
            (2) Subsequent crop years.--For each of the 2003 through 
        2007 crop years for peanuts, the Secretary shall make direct 
        payments to the producers on a farm to which a payment yield and 
        base acres for peanuts are assigned under section 1302.

    (b) Payment Rate.--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 for 2002 Crop Year.--The amount of the direct 
payment to be paid to an historic peanut producer for the 2002 crop of 
peanuts shall be equal to the product of the following:
            (1) The payment rate specified in subsection (b).
            (2) The payment acres of the historic peanut producer.
            (3) The average peanut yield determined under section 
        1302(a)(1) for the historic peanut producer.

    (d) Payment Amount for Subsequent Crop Years.--The amount of the 
direct payment to be paid to the producers on a farm for the 2003 
through 2007 crops of peanuts 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.

    (e) Time for Payment.--
            (1) In general.--The Secretary shall make direct payments--
                    (A) in the case of the 2002 crop year, as soon as 
                practicable after the date of enactment of this Act; and
                    (B) <<NOTE: Deadline.>> in the case of each of the 
                2003 through 2007 crop years, not later than September 
                30 of the calendar year in which the crop is harvested.
            (2) Advance payments.--At the option of the producers on a 
        farm, up to 50 percent of the direct payment for any of the 2003 
        through 2007 crop years shall be paid to the producers in 
        advance. The producers shall select the month within which the 
        advance payment for a crop year will be made. The month selected 
        may be any month during the period beginning on December 1 of 
        the calendar year before the calendar year in which the crop is 
        harvested through the month within which the direct payment 
        would otherwise be made. The producers 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

[[Page 116 STAT. 171]]

        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. <<NOTE: 7 USC 7954.>>  AVAILABILITY OF COUNTER-CYCLICAL 
            PAYMENTS FOR PEANUTS.

    (a) Payment Required.--
            (1) In general.--During the 2002 through 2007 crop years for 
        peanuts, the Secretary shall make counter-cyclical payments 
        under this section with respect to peanuts if the Secretary 
        determines that the effective price for peanuts is less than the 
        target price for peanuts.
            (2) 2002 crop year.--If counter-cyclical payments are 
        required for the 2002 crop year, the Secretary shall make the 
        payments to historic peanut producers.
            (3) Subsequent crop years.--If counter-cyclical payments are 
        required for any of the 2003 through 2007 crop years for 
        peanuts, the Secretary shall make the payments to the producers 
        on a farm to which a payment yield and base acres for peanuts 
        are assigned under section 1302.

    (b) Effective Price.--For purposes of subsection (a), the effective 
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 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; and
            (2) the effective price determined under subsection (b).

    (e) Payment Amount for 2002 Crop Year.--If counter-cyclical payments 
are required to be paid for the 2002 crop of peanuts, the amount of the 
counter-cyclical payment to be paid to an historic peanut producer 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 of the historic peanut producer.
            (3) The average peanut yield determined under section 
        1302(a)(1) for the historic peanut producer.

    (f) Payment Amount for Subsequent Crop Years.--If counter-cyclical 
payments are required to be paid for any of the 2003 through 2007 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.

[[Page 116 STAT. 172]]

            (3) The payment yield for the farm.

    (g) Time for Payments.--
            (1) General rule.--If the Secretary determines under 
        subsection (a) that counter-cyclical payments are required to be 
        made under this section for a crop year, the Secretary shall 
        make the counter-cyclical payments as soon as practicable after 
        the end of the 12-month marketing year for the crop.
            (2) Availability of partial payments.--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 
        (or, in the case of the 2002 crop year, historic peanut 
        producers) the option to receive partial payments of the 
        counter-cyclical payment projected to be made for that crop.
            (3) Time for partial payments.--
                    (A) 2002 through 2006 crop years.--When the 
                Secretary makes partial payments available under 
                paragraph (2) for any of the 2002 through 2006 crop 
                years--
                          (i) the first partial payment for the crop 
                      year shall be made not earlier than October 1, 
                      and, to the maximum extent practicable, not later 
                      than October 31, of the calendar year in which the 
                      crop is harvested;
                          (ii) the second partial payment shall be made 
                      not earlier than February 1 of the next calendar 
                      year; and
                          (iii) the final partial payment shall be made 
                      as soon as practicable after the end of the 12-
                      month marketing year for that crop.
                    (B) 2007 crop year.--When the Secretary makes 
                partial payments available for the 2007 crop year--
                          (i) the first partial payment shall be made 
                      after completion of the first 6 months of the 
                      marketing year for that crop; and
                          (ii) the final partial payment shall be made 
                      as soon as practicable after the end of the 12-
                      month marketing year for that crop.
            (4) Amount of partial payments.--
                    (A) 2002 crop year.--
                          (i) First partial payment.--In the case of the 
                      2002 crop year, the first partial payment under 
                      paragraph (3) to an historic peanut producer may 
                      not exceed 35 percent of the projected counter-
                      cyclical payment for the crop year, as determined 
                      by the Secretary.
                          (ii) Second partial payment.--The second 
                      partial payment may not exceed the difference 
                      between--
                                    (I) 70 percent of the projected 
                                counter-cyclical payment (including any 
                                revision thereof) for the 2002 crop 
                                year; and
                                    (II) the amount of the payment made 
                                under clause (i).
                          (iii) Final payment.--The final payment shall 
                      be equal to the difference between--
                                    (I) the actual counter-cyclical 
                                payment to be made to the historic 
                                peanut producer; and
                                    (II) the amount of the partial 
                                payments made to the historic peanut 
                                producer under clauses (i) and (ii).

[[Page 116 STAT. 173]]

                    (B) 2003 through 2006 crop years.--
                          (i) First partial payment.--For each of the 
                      2003 through 2006 crop years, the first partial 
                      payment under paragraph (3) to the producers on a 
                      farm may not exceed 35 percent of the projected 
                      counter-cyclical payment for the crop year, as 
                      determined by the Secretary.
                          (ii) Second partial payment.--The second 
                      partial payment for a crop year may not exceed the 
                      difference between--
                                    (I) 70 percent of the projected 
                                counter-cyclical payment (including any 
                                revision thereof) for the crop year; and
                                    (II) the amount of the payment made 
                                under clause (i).
                          (iii) 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 
                                payments made to the producers under 
                                clauses (i) and (ii) for that crop year.
                    (C) 2007 crop year.--
                          (i) First partial payment.--For the 2007 crop 
                      year, 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.
                          (ii) Final payment.--The final payment for the 
                      2007 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 
                                clause (i).
            (5) Repayment.--The producers on a farm (or, in the case of 
        the 2002 crop year, historic peanut producers) 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 payment 
        to be made for that crop year.

SEC. 1305. <<NOTE: 7 USC 7955.>>  PRODUCER AGREEMENT REQUIRED AS 
            CONDITION ON PROVISION OF DIRECT PAYMENTS AND COUNTER-
            CYCLICAL 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 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 
                requirements 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.);

[[Page 116 STAT. 174]]

                    (C) to comply with the planting flexibility 
                requirements of section 1306;
                    (D) to use the land on the farm, in a quantity equal 
                to the attributable base acres for peanuts and any base 
                acres for the farm under subtitle A, for an agricultural 
                or conserving use, and not for a nonagricultural 
                commercial or industrial use, as determined by the 
                Secretary; and
                    (E) to effectively control noxious weeds and 
                otherwise maintain the land in accordance with sound 
                agricultural practices, as determined by the Secretary, 
                if the agricultural 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 compliance with 
        the requirements of paragraph (1).
            (3) Modification.--At the request of the transferee or 
        owner, the Secretary may modify the requirements of this 
        subsection if the modifications are consistent with the 
        objectives of this subsection, as determined by the Secretary.

    (b) Transfer or Change of Interest in Farm.--
            (1) Termination.--Except as provided in paragraph (2), a 
        transfer of (or change in) the interest of the producers on a 
        farm in the base acres for peanuts for which direct payments or 
        counter-cyclical payments are made shall result in the 
        termination of the payments with respect to those acres, unless 
        the transferee or owner of the acreage agrees to assume all 
        obligations under subsection (a). The termination shall take 
        effect on the date determined by the Secretary.
            (2) Exception.--If a producer entitled to a direct payment 
        or counter-cyclical payment dies, becomes incompetent, or is 
        otherwise unable to receive the payment, the Secretary shall 
        make the payment, in accordance with rules issued by the 
        Secretary.

    (c) Acreage Reports.--As a condition on the receipt of direct 
payments, counter-cyclical payments, marketing assistance loans, or loan 
deficiency payments under this subtitle, the Secretary shall require the 
producers on a farm to which a payment yield and base acres for peanuts 
are assigned under section 1302 to submit to the Secretary annual 
acreage reports with respect to all cropland on the farm.
    (d) Tenants and Sharecroppers.--In carrying out this subtitle, the 
Secretary shall provide adequate safeguards to protect the interests of 
tenants and sharecroppers.
    (e) Sharing of Payments.--The Secretary shall provide for the 
sharing of direct payments and counter-cyclical payments among the 
producers on a farm on a fair and equitable basis.

SEC. 1306. <<NOTE: 7 USC 7956.>>  PLANTING FLEXIBILITY.

    (a) Permitted Crops.--Subject to subsection (b), any commodity or 
crop may be planted on the base acres for peanuts on a farm.
    (b) Limitations Regarding Certain Commodities.--
            (1) General limitation.--The planting of an agricultural 
        commodity specified in paragraph (2) shall be prohibited on base 
        acres for peanuts unless the commodity, if planted, is destroyed 
        before harvest.

[[Page 116 STAT. 175]]

            (2) Treatment of trees and other perennials.--The planting 
        of an agricultural commodity specified in paragraph (3) that is 
        produced on a tree or other perennial plant shall be prohibited 
        on base acres for peanuts.
            (3) Covered agricultural commodities.--Paragraphs (1) and 
        (2) apply to the following agricultural commodities:
                    (A) Fruits.
                    (B) Vegetables (other than lentils, mung beans, and 
                dry peas).
                    (C) Wild rice.

    (c) Exceptions.--Paragraphs (1) and (2) of subsection (b) shall not 
limit the planting of an agricultural commodity specified in paragraph 
(3) of that subsection--
            (1) in any region in which there is a history of double-
        cropping of peanuts with agricultural commodities specified in 
        subsection (b)(3), as determined by the Secretary, in which case 
        the double-cropping shall be permitted;
            (2) on a farm that the Secretary determines has a history of 
        planting agricultural commodities specified in subsection (b)(3) 
        on the base acres for peanuts, except that direct payments and 
        counter-cyclical payments shall be reduced by an acre for each 
        acre planted to such an agricultural commodity; or
            (3) by the producers on a farm that the Secretary determines 
        has an established planting history of a specific agricultural 
        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. <<NOTE: 7 USC 7957.>>  MARKETING ASSISTANCE LOANS AND LOAN 
            DEFICIENCY PAYMENTS FOR PEANUTS.

    (a) Nonrecourse Loans Available.--
            (1) Availability.--For each of the 2002 through 2007 crops 
        of peanuts, the Secretary shall make available to producers on a 
        farm nonrecourse marketing assistance loans for peanuts produced 
        on the farm. The loans shall be made under terms and conditions 
        that are prescribed by the Secretary and at the loan rate 
        established under subsection (b).
            (2) Eligible production.--The producers on a farm shall be 
        eligible for a marketing assistance loan under this subsection 
        for any quantity of peanuts produced on the farm.
            (3) Treatment of certain commingled commodities.--In 
        carrying out this subsection, the Secretary shall make loans to 
        producers on a farm that would be eligible to obtain a marketing 
        assistance loan, but for the fact the peanuts owned by the 
        producers on the farm are commingled with other peanuts in 
        facilities unlicensed for the storage of agricultural 
        commodities by the Secretary or a State licensing authority, if 
        the producers obtaining the loan agree to immediately redeem the 
        loan collateral in accordance with section 166 of the Federal

[[Page 116 STAT. 176]]

        Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7286).
            (4) Options for obtaining loan.--A marketing assistance loan 
        under this subsection, and loan deficiency payments under 
        subsection (e), may be obtained at the option of the producers 
        on a farm through--
                    (A) a designated marketing association or marketing 
                cooperative of producers that is approved by the 
                Secretary; or
                    (B) the Farm Service Agency.
            (5) Storage of loan peanuts.--As a condition on the 
        Secretary's approval of an individual or entity to provide 
        storage for peanuts for which a marketing assistance loan is 
        made under this section, the individual or entity shall agree--
                    (A) to provide such storage on a nondiscriminatory 
                basis; and
                    (B) to comply with such additional requirements as 
                the Secretary considers appropriate to accomplish the 
                purposes of this section and promote fairness in the 
                administration of the benefits of this section.
            (6) Payment of peanut storage costs.--Effective for the 2002 
        through 2006 crops of peanuts, to ensure proper storage of 
        peanuts for which a loan is made under this section, the 
        Secretary shall use the funds of the Commodity Credit 
        Corporation to pay storage, handling, and other associated 
        costs. This authority terminates beginning with the 2007 crop of 
        peanuts.
            (7) Marketing.--A marketing association or cooperative may 
        market peanuts for which a loan is made under this section in 
        any manner that conforms to consumer needs, including the 
        separation of peanuts by type and quality.

    (b) Loan Rate.--The loan rate for a marketing assistance loan under 
for peanuts subsection (a) shall be equal to $355 per ton.
    (c) Term of Loan.--
            (1) In general.--A marketing assistance loan for peanuts 
        under subsection (a) shall have a term of 9 months beginning on 
        the first day of the first month after the month in which the 
        loan is made.
            (2) Extensions prohibited.--The Secretary may not extend the 
        term of a marketing assistance loan for peanuts under subsection 
        (a).

    (d) Repayment Rate.--
            (1) In general.--The Secretary shall permit producers on a 
        farm to repay a marketing assistance loan for peanuts under 
        subsection (a) at a rate that is the lesser of--
                    (A) the loan rate established for peanuts under 
                subsection (b), plus interest (determined in accordance 
                with section 163 of the Federal Agriculture Improvement 
                and Reform Act of 1996 (7 U.S.C. 7283)); or
                    (B) a rate that the Secretary determines will--
                          (i) minimize potential loan forfeitures;
                          (ii) minimize the accumulation of stocks of 
                      peanuts by the Federal Government;
                          (iii) minimize the cost incurred by the 
                      Federal Government in storing peanuts; and
                          (iv) allow peanuts produced in the United 
                      States to be marketed freely and competitively, 
                      both domestically and internationally.

[[Page 116 STAT. 177]]

            (2) Good faith exception to beneficial interest 
        requirement.--For the 2002 crop year only, in the case of the 
        producers on a farm that marketed or otherwise lost beneficial 
        interest in the peanuts for which a marketing assistance loan 
        was made under this section before repaying the loan, the 
        Secretary shall permit the producers to repay the loan at the 
        applicable repayment rate that was in effect for peanuts under 
        this subsection on the date that the producers lost beneficial 
        interest, as determined by the Secretary, if the Secretary 
        determines the producers acted in good faith.

    (e) Loan Deficiency Payments.--
            (1) Availability.--The Secretary may make loan deficiency 
        payments available to producers on a farm that, although 
        eligible to obtain a marketing assistance loan for peanuts under 
        subsection (a), agree to forgo obtaining the loan for the 
        peanuts in return for loan deficiency payments under this 
        subsection.
            (2) Computation.--A loan deficiency payment under this 
        subsection shall be computed by multiplying--
                    (A) the payment rate determined under paragraph (3) 
                for peanuts; by
                    (B) the quantity of the peanuts produced by the 
                producers, excluding any quantity for which the 
                producers obtain a marketing assistance loan under 
                subsection (a).
            (3) Payment rate.--For purposes of this subsection, the 
        payment rate shall be the amount by which--
                    (A) the loan rate established under subsection (b); 
                exceeds
                    (B) the rate at which a loan may be repaid under 
                subsection (d).
            (4) Effective date for payment rate determination.--
                    (A) In general.--The Secretary shall determine the 
                amount of the loan deficiency payment to be made under 
                this subsection to the producers on a farm with respect 
                to a quantity of peanuts using the payment rate in 
                effect under paragraph (3) as of the date the producers 
                request the payment.
                    (B) Special rule for 2002 crop year.--For the 2002 
                crop year only, the Secretary shall determine the amount 
                of the loan deficiency payment to be made under this 
                subsection to the producers on a farm with respect to a 
                quantity of peanuts using the payment rate in effect 
                under paragraph (3) as of the earlier of the following:
                          (i) The date on which the producers marketed 
                      or otherwise lost beneficial interest in the crop, 
                      as determined by the Secretary.
                          (ii) The date the producers request the 
                      payment.

    (f) Compliance With Conservation and Wetlands Requirements.--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 Administrative 
Expenses.--The Secretary may implement any reimbursable agreements or 
provide for the payment of administrative expenses

[[Page 116 STAT. 178]]

under this subtitle only in a manner that is consistent with such 
activities in regard to other commodities.

SEC. 1308. <<NOTE: 7 USC 7958.>>  MISCELLANEOUS PROVISIONS.

    (a) Mandatory Inspection.--All peanuts marketed in the United States 
shall be officially inspected and graded by Federal or Federal-State 
inspectors.
    (b) Termination of Peanut Administrative Committee.--The Peanut 
Administrative Committee established under Marketing Agreement No. 146 
issued pursuant to the Agricultural Adjustment Act (7 U.S.C. 601 et 
seq.), reenacted with amendments by the Agricultural Marketing Agreement 
Act of 1937, is terminated.
    (c) Peanut Standards Board.--
            (1) Establishment and purpose.--The Secretary shall 
        establish a Peanut Standards Board for the purpose of advising 
        the Secretary regarding the establishment of quality and 
        handling standards for domestically produced and imported 
        peanuts.
            (2) Membership and appointment.--
                    (A) Total members.--The Board shall consist of 18 
                members, with representation equally divided between 
                peanut producers and peanut industry representatives.
                    (B) Appointment process for producers.--The 
                Secretary shall appoint--
                          (i) 3 producers from the Southeast (Alabama, 
                      Georgia, and Florida) peanut producing region;
                          (ii) 3 producers from the Southwest (Texas, 
                      Oklahoma, and New Mexico) peanut producing region; 
                      and
                          (iii) 3 producers from the Virginia/Carolina 
                      (Virginia and North Carolina) peanut producing 
                      region.
                    (C) Appointment process for industry 
                representatives.--The Secretary shall appoint 3 peanut 
                industry representatives from each of the 3 peanut 
                producing regions in the United States.
            (3) Terms.--
                    (A) In general.--A member of the Board shall serve a 
                3-year term.
                    (B) Initial appointment.--In making the initial 
                appointments to the Board, the Secretary shall stagger 
                the terms of the members so that--
                          (i) 1 producer member and peanut industry 
                      member from each peanut producing region serves a 
                      1-year term;
                          (ii) 1 producer member and peanut industry 
                      member from each peanut producing region serves a 
                      2-year term; and
                          (iii) 1 producer member and peanut industry 
                      member from each peanut producing region serves a 
                      3-year term.
            (4) Consultation required.--The Secretary shall consult with 
        the Board in advance whenever the Secretary establishes or 
        changes, or considers the establishment of or a change to, 
        quality and handling standards for peanuts.
            (5) Federal advisory committee act.--The Federal Advisory 
        Committee Act (5 U.S.C. App.) shall not apply to the Board.

[[Page 116 STAT. 179]]

    (d) Priority.--The Secretary shall make identifying and combating 
the presence of all quality concerns related to peanuts a priority in 
the development of quality and handling standards for peanuts and in the 
inspection of domestically produced and imported peanuts. The Secretary 
shall consult with appropriate Federal and State agencies to provide 
adequate safeguards against all quality concerns related to peanuts.
    (e) Consistent Standards.--Imported peanuts shall be subject to the 
same quality and handling standards as apply to domestically produced 
peanuts.
    (f) Authorization of Appropriations.--
            (1) In general.--In addition to other funds that are 
        available to carry out this section, there is authorized to be 
        appropriated such sums as are necessary to carry out this 
        section.
            (2) Treatment of board expenses.--The expenses of the Peanut 
        Standards Board shall not be counted toward any general 
        limitation on the expenses of advisory committees, panels, 
        commissions, and task forces of the Department of Agriculture, 
        whether enacted before, on, or after the date of enactment of 
        this Act, unless the limitation specifically refers to this 
        paragraph and specifically includes the Peanut Standards Board 
        within the general limitation.

    (g) Transition Rule.--
            (1) Temporary designation of peanut administrative committee 
        members.--Notwithstanding the appointment process specified in 
        subsection (c) for the Peanut Standards Board, during the 
        transition period, the Secretary may designate persons serving 
        as members of the Peanut Administrative Committee on the day 
        before the date of enactment of this Act to serve as members of 
        the Peanut Standards Board for the purpose of carrying out the 
        duties of the Board described in this section.
            (2) Funds.--The Secretary may transfer any funds available 
        to carry out the activities of the Peanut Administrative 
        Committee to the Peanut Standards Board to carry out the duties 
        of the Board described in this section.
            (3) Transition period.--In paragraph (1), the term 
        ``transition period'' means the period beginning on the date of 
        enactment of this Act and ending on the earlier of--
                    (A) the date the Secretary appoints the members of 
                the Peanut Standards Board pursuant to subsection (c); 
                or
                    (B) 180 days after the date of enactment of this 
                Act.

    (h) Effective Date.--This section shall take effect with the 2002 
crop of peanuts.

SEC. 1309. <<NOTE: 7 USC 7959.>>  TERMINATION OF MARKETING QUOTA 
            PROGRAMS FOR PEANUTS AND COMPENSATION TO PEANUT QUOTA 
            HOLDERS FOR LOSS OF QUOTA ASSET VALUE.

    (a) Repeal of Marketing Quota.--
            (1) Repeal.--Part VI of subtitle B of title III of the 
        Agricultural Adjustment Act of 1938 (7 U.S.C. 1357-1359a), 
        relating to peanuts, is repealed.
            (2) Treatment of 2001 crop.--Part VI of subtitle B of title 
        III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1357-
        1359a), as in effect on the day before the date of enactment of 
        this Act, shall continue to apply with respect to the

[[Page 116 STAT. 180]]

        2001 crop of peanuts notwithstanding the amendment made by 
        paragraph (1). Section 1308(g)(2) shall also apply to the 2001 
        crop of peanuts.

    (b) Compensation Contract Required.--
            (1) In general.--The Secretary shall offer to enter into a 
        contract with each person that the Secretary determines is an 
        eligible peanut quota holder under subsection (f) for the 
        purpose of providing compensation for the lost value of the 
        quota on account of the repeal of the marketing quota program 
        for peanuts under subsection (a).
            (2) Payment period.--The Secretary shall make payments under 
        the contracts during fiscal years 2002 through 2006.

    (c) Time for Payment.--
            (1) Payment in installments.--The payments required under 
        the contracts shall be provided in 5 equal installments not 
        later than September 30 of each of fiscal years 2002 through 
        2006.
            (2) Single payment.--At the request of an eligible peanut 
        quota holder entitled to payments under a contract, the 
        Secretary shall provide the entire payment amount determined 
        under subsection (d) with respect to the eligible peanut quota 
        holder for the 5 fiscal years in a single lump sum during the 
        fiscal year specified by the eligible peanut quota holder.

    (d) Payment Amount.--The amount of the payment for a fiscal year to 
an eligible peanut quota holder under a contract shall be equal to the 
product obtained by multiplying--
            (1) $0.11 per pound; by
            (2) the number of pounds of quota with respect to which the 
        person qualifies as a peanut quota holder under subsection (f).

    (e) Assignment of Payments.--The provisions of section 8(g) of the 
Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(g)), 
relating to assignment of payments, shall apply to the payments made 
under the contracts. A person making an assignment of the payment, or 
the assignee, shall provide the Secretary with notice, in such manner as 
the Secretary may require, of any assignment made under this subsection.
    (f) Eligible Peanut Quota Holder.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the Secretary shall consider a person to be an 
        eligible peanut quota holder for the purposes of this section if 
        the person, as of the date of enactment of this Act, owned a 
        farm that, also as of that date, was eligible for a permanent 
        peanut quota under section 358-1(b) of the Agricultural 
        Adjustment Act of 1938 (7 U.S.C. 1358-1(b)), irrespective of 
        temporary leases, transfers of quotas for seed, or quotas for 
        experimental purposes.
            (2) Effect of purchase contract.--If there was a written 
        contract for the purchase of all or a portion of a farm 
        described in paragraph (1) as of the date of enactment of this 
        Act and the parties to the sale are unable to agree to the 
        disposition of eligibility for payments under this section, the 
        Secretary, taking into account any incomplete permanent transfer 
        of quota that has otherwise been agreed to, shall provide for 
        the equitable division of the payments among the parties by 
        adjusting the determination of who is the eligible peanut quota 
        holder with respect to particular pounds of the quota.

[[Page 116 STAT. 181]]

            (3) Effect of agreement for permanent quota transfer.--If 
        the Secretary determines that there was in existence, as of the 
        date of enactment of this Act, an agreement for the permanent 
        transfer of quota, but that the transfer was not completed by 
        that date, the Secretary shall consider the peanut quota holder 
        to be the party to the agreement who, as of that date, was the 
        owner of the farm to which the quota was to be transferred.
            (4) Protected bases.--A person that owns a farm with a 
        peanut poundage quota which is protected under a conservation 
        reserve program contract entered into under section 1231 of the 
        Food Security Act of 1985 (16 U.S.C. 3831) shall be considered 
        to be an eligible quota holder with respect to the protected 
        poundage.
            (5) Secretarial discretion.--Notwithstanding the preceding 
        paragraphs, the Secretary may declare a person to be the 
        eligible peanut quota holder with respect to certain pounds of 
        quota or otherwise for purposes of this section if the Secretary 
        considers the declaration is needed to insure a fair and 
        equitable administration of the payments provided for in this 
        section, so long as the Secretary does not, in exercising this 
        authority, effectively increase the total quota in excess of the 
        quota that was available to all producers for the 2001 crop year 
        for other than seed or experimental use.
            (6) Limitation on quantity of quota held.--A person shall be 
        considered an eligible peanut quota holder for purposes of this 
        section only with respect to that number of permanent pounds 
        that qualifies the person as a peanut quota holder under one of 
        the preceding paragraphs. The determination of the peanut 
        poundage amount for which the person qualifies shall be made 
        based on the 2001 crop quota levels and shall take into account 
        sales of the farm that occurred before the date of enactment of 
        this Act and any permanent transfers of quota that took place 
        before that date, consistent with the preceding paragraphs. The 
        Secretary shall not take into account, or allow eligibility for, 
        quotas for seed, granted as experimental quotas, or obtained by 
        temporary lease or transfer.

    (g) Successions in Payment Eligibility and Attachment of Eligibility 
to Persons.--
            (1) Eligibility attaches to persons.--Once a person is 
        eligible for payments under this section, as determined under 
        subsection (f), the continued eligibility of the person for the 
        payments does not run with a farm, but shall remain with the 
        person for the term of this section irrespective of whether the 
        person sells, or continues to have an interest in, the farm that 
        had the quota that qualified the person as an eligible peanut 
        quota holder under subsection (f) and irrespective of whether 
        the person has a continuing interest in the production of 
        peanuts.
            (2) Succession.--If a person eligible for payments under 
        this section dies, in the case of an individual, or ceases to 
        exist, in the case of other persons, the payment eligibility of 
        the person shall pass to the person's personal or organizational 
        successor, as determined by the Secretary.

    (h) Conforming Amendments.--

[[Page 116 STAT. 182]]

            (1) Administrative provisions.--Section 361 of the 
        Agricultural Adjustment Act of 1938 (7 U.S.C. 1361) is amended 
        by striking ``peanuts,''.
            (2) Adjustment of quotas.--Section 371 of the Agricultural 
        Adjustment Act of 1938 (7 U.S.C. 1371) is amended--
                    (A) in the first sentence of subsection (a), by 
                striking ``peanuts,''; and
                    (B) in the first sentence of subsection (b), by 
                striking ``peanuts''.
            (3) Reports and records.--Section 373 of the Agricultural 
        Adjustment Act of 1938 (7 U.S.C. 1373) is amended--
                    (A) in the first sentence of subsection (a)--
                          (i) by striking ``peanuts,'' each place it 
                      appears;
                          (ii) by inserting ``and'' after ``from 
                      producers,''; and
                          (iii) by striking ``for producers, all'' and 
                      all that follows through the period at the end of 
                      the sentence and inserting ``for producers.''; and
                    (B) in subsection (b), by striking ``peanuts,''.
            (4) Eminent domain.--Section 378(c) of the Agricultural 
        Adjustment Act of 1938 (7 U.S.C. 1378(c)) is amended in the 
        first sentence--
                    (A) by striking ``cotton,'' and inserting ``cotton 
                and''; and
                    (B) by striking ``and peanuts,''.

SEC. 1310. <<NOTE: 7 USC 7960.>>  REPEAL OF SUPERSEDED PRICE SUPPORT 
            AUTHORITY AND EFFECT OF REPEAL.

    (a) Repeal of Price Support Authority.--
            (1) In general.--Section 155 of the Federal Agriculture 
        Improvement and Reform Act of 1996 (7 U.S.C. 7271) is repealed.
            (2) Conforming amendments.--The Agricultural Act of 1949 (7 
        U.S.C. 1441 et seq.) is amended--
                    (A) in section 101(b) (7 U.S.C. 1441(b)), by 
                striking ``and peanuts''; and
                    (B) in section 408(c) (7 U.S.C. 1428(c)), by 
                striking ``peanuts,''.
            (3) Technical amendment.--The chapter heading of chapter 2 
        of subtitle D of the Federal Agriculture Improvement and Reform 
        Act of 1996 (7 U.S.C. prec. 7271) is amended by striking 
        ``PEANUTS AND''.

    (b) Disposal.--Notwithstanding any other provision of law or 
previous declaration made by the Secretary, the Secretary shall ensure 
that the disposal of all peanuts for which a loan for the 2001 crop of 
peanuts was made under section 155 of the Federal Agriculture 
Improvement and Reform Act of 1996 (7 U.S.C. 7271) before the date of 
enactment of this Act is carried out in a manner that prevents price 
disruptions in the domestic and international markets for peanuts.
    (c) Treatment of Crop Insurance Policies for 2002 Crop Year.--
            (1) Applicability.--This subsection shall apply for the 2002 
        crop year only notwithstanding any other provision of law or 
        crop insurance policy.
            (2) Price election.--The nonquota price election for 
        segregation I, II, and III peanuts shall be 17.75 cents per 
        pound

[[Page 116 STAT. 183]]

        and shall be used for all aspects of the policy relating to the 
        calculations of premium, liability, and indemnities.
            (3) Quality Adjustment.--For the purposes of quality 
        adjustment only, the average support price per pound of peanuts 
        shall be a price equal to 17.75 cents per pound. Quality under 
        the crop insurance policy for peanuts shall be adjusted under 
        procedures issued by the Federal Crop Insurance Corporation.

                            Subtitle D--Sugar

SEC. 1401. SUGAR PROGRAM.

    (a) Extension and Modification of Existing Sugar Program.--Section 
156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 
U.S.C. 7272) is amended to read as follows:

``SEC. 156. SUGAR PROGRAM.

    ``(a) Sugarcane.--The Secretary shall make loans available to 
processors of domestically grown sugarcane at a rate equal to 18 cents 
per pound for raw cane sugar.
    ``(b) Sugar Beets.--The Secretary shall make loans available to 
processors of domestically grown sugar beets at a rate equal to 22.9 
cents per pound for refined beet sugar.
    ``(c) Loan Rate Adjustments.--
            ``(1) In general.--The Secretary may reduce the loan rate 
        specified in subsection (a) for domestically grown sugarcane and 
        subsection (b) for domestically grown sugar beets if the 
        Secretary determines that negotiated reductions in export 
        subsidies and domestic subsidies provided for sugar of other 
        major sugar growing, producing, and exporting countries in the 
        aggregate exceed the commitments made as part of the Agreement 
        on Agriculture.
            ``(2) Extent of reduction.--The Secretary shall not reduce 
        the loan rate under subsection (a) or (b) below a rate that 
        provides an equal measure of support to that provided by other 
        major sugar growing, producing, and exporting countries, based 
        on an examination of both domestic and export subsidies subject 
        to reduction in the Agreement on Agriculture.
            ``(3) Announcement of reduction.--The Secretary shall 
        announce any loan rate reduction to be made under this 
        subsection as far in advance as is practicable.
            ``(4) Definitions.--In this subsection:
                    ``(A) Agreement on agriculture.--The term 
                ``Agreement on Agriculture'' means the Agreement on 
                Agriculture referred to in section 101(d)(2) of the 
                Uruguay Round Agreements Act (19 U.S.C. 3511(d)(2)), or 
                any amendatory or successor agreement.
                    ``(B) Major sugar countries.--The term ``major sugar 
                growing, producing, and exporting countries'' means--
                          ``(i) the countries of the European Union; and
                          ``(ii) the 10 foreign countries not covered by 
                      subparagraph (A) that the Secretary determines 
                      produce the greatest quantity of sugar.

    ``(d) Term of Loans.--

[[Page 116 STAT. 184]]

            ``(1) In general.--A loan under this section during any 
        fiscal year shall be made available not earlier than the 
        beginning of the fiscal year and shall mature at the earlier 
        of--
                    ``(A) the end of the 9-month period beginning on the 
                first day of the first month after the month in which 
                the loan is made; or
                    ``(B) the end of the fiscal year in which the loan 
                is made.
            ``(2) Supplemental loans.--In the case of a loan made under 
        this section in the last 3 months of a fiscal year, the 
        processor may repledge the sugar as collateral for a second loan 
        in the subsequent fiscal year, except that the second loan 
        shall--
                    ``(A) be made at the loan rate in effect at the time 
                the second loan is made; and
                    ``(B) mature in 9 months less the quantity of time 
                that the first loan was in effect.

    ``(e) Loan Type; Processor Assurances.--
            ``(1) Nonrecourse loans.--The Secretary shall carry out this 
        section through the use of nonrecourse loans.
            ``(2) Processor assurances.--
                    ``(A) In general.--The Secretary shall obtain from 
                each processor that receives a loan under this section 
                such assurances as the Secretary considers adequate to 
                ensure that the processor will provide payments to 
                producers that are proportional to the value of the loan 
                received by the processor for the sugar beets and 
                sugarcane delivered by producers to the processor.
                    ``(B) Minimum payments.--
                          ``(i) In general.--Subject to clause (ii), the 
                      Secretary may establish appropriate minimum 
                      payments for purposes of this paragraph.
                          ``(ii) Limitation.--In the case of sugar 
                      beets, the minimum payment established under 
                      clause (i) shall not exceed the rate of payment 
                      provided for under the applicable contract between 
                      a sugar beet producer and a sugar beet processor.
                          ``(iii) Effect of disaster.--The Secretary may 
                      not bar a beet sugar processor from eligibility to 
                      obtain a loan under this section because of the 
                      failure of the processor to provide the 
                      appropriate minimum payment established under this 
                      subsection if the failure--
                                    ``(I) occurred during a crop year 
                                prior to the date of enactment of the 
                                Farm Security and Rural Investment Act 
                                of 2002; and
                                    ``(II) was related, at least in 
                                part, to the effects of a natural 
                                disaster, including damage from freeze.
            ``(3) Administration.--The Secretary may not impose or 
        enforce any prenotification requirement, or similar 
        administrative requirement not otherwise in effect on the date 
        of enactment of the Farm Security and Rural Investment Act of 
        2002, that has the effect of preventing a processor from 
        electing to forfeit the loan collateral (of an acceptable grade 
        and quality) on the maturity of the loan.

    ``(f) Loans for In-Process Sugar.--

[[Page 116 STAT. 185]]

            ``(1) Definition of in-process sugars and syrups.--In this 
        subsection, the term `in-process sugars and syrups' does not 
        include raw sugar, liquid sugar, invert sugar, invert syrup, or 
        other finished product that is otherwise eligible for a loan 
        under subsection (a) or (b).
            ``(2) Availability.--The Secretary shall make nonrecourse 
        loans available to processors of a crop of domestically grown 
        sugarcane and sugar beets for in-process sugars and syrups 
        derived from the crop.
            ``(3) Loan rate.--The loan rate shall be equal to 80 percent 
        of the loan rate applicable to raw cane sugar or refined beet 
        sugar, as determined by the Secretary on the basis of the source 
        material for the in-process sugars and syrups.
            ``(4) Further processing on forfeiture.--
                    ``(A) In general.--As a condition of the forfeiture 
                of in-process sugars and syrups serving as collateral 
                for a loan under paragraph (2), the processor shall, 
                within such reasonable time period as the Secretary may 
                prescribe and at no cost to the Commodity Credit 
                Corporation, convert the in-process sugars and syrups 
                into raw cane sugar or refined beet sugar of acceptable 
                grade and quality for sugars eligible for loans under 
                subsection (a) or (b).
                    ``(B) Transfer to corporation.--Once the in-process 
                sugars and syrups are fully processed into raw cane 
                sugar or refined beet sugar, the processor shall 
                transfer the sugar to the Commodity Credit Corporation.
                    ``(C) Payment to processor.--On transfer of the 
                sugar, the Secretary shall make a payment to the 
                processor in an amount equal to the amount obtained by 
                multiplying--
                          ``(i) the difference between--
                                    ``(I) the loan rate for raw cane 
                                sugar or refined beet sugar, as 
                                appropriate; and
                                    ``(II) the loan rate the processor 
                                received under paragraph (3); by
                          ``(ii) the quantity of sugar transferred to 
                      the Secretary.
            ``(5) Loan conversion.--If the processor does not forfeit 
        the collateral as described in paragraph (4), but instead 
        further processes the in-process sugars and syrups into raw cane 
        sugar or refined beet sugar and repays the loan on the in-
        process sugars and syrups, the processor may obtain a loan under 
        subsection (a) or (b) for the raw cane sugar or refined beet 
        sugar, as appropriate.
            ``(6) Term of loan.--The term of a loan made under this 
        subsection for a quantity of in-process sugars and syrups, when 
        combined with the term of a loan made with respect to the raw 
        cane sugar or refined beet sugar derived from the in-process 
        sugars and syrups, may not exceed 9 months, consistent with 
        subsection (d).

    ``(g) Avoiding Forfeitures; Corporation Inventory Disposition.--
            ``(1) In general.--Subject to subsection (e)(3), to the 
        maximum extent practicable, the Secretary shall operate the 
        program established under this section at no cost to the Federal 
        Government by avoiding the forfeiture of sugar to the Commodity 
        Credit Corporation.

[[Page 116 STAT. 186]]

            ``(2) Inventory disposition.--
                    ``(A) In general.--To carry out paragraph (1), the 
                Commodity Credit Corporation may accept bids to obtain 
                raw cane sugar or refined beet sugar in the inventory of 
                the Commodity Credit Corporation from (or otherwise make 
                available such commodities, on appropriate terms and 
                conditions, to) processors of sugarcane and processors 
                of sugar beets (acting in conjunction with the producers 
                of the sugarcane or sugar beets processed by the 
                processors) in return for the reduction of production of 
                raw cane sugar or refined beet sugar, as appropriate.
                    ``(B) Additional authority.--The authority provided 
                under this paragraph is in addition to any authority of 
                the Commodity Credit Corporation under any other law.

    ``(h) Information Reporting.--
            ``(1) Duty of processors and refiners to report.--A 
        sugarcane processor, cane sugar refiner, and sugar beet 
        processor 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, 
        distribution, 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 Secretary, the sugarcane yields 
                and acres planted to sugarcane of the producer.
                    ``(B) Other states.--The Secretary may require each 
                producer of sugarcane or sugar beets not covered by 
                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 products.
                    ``(B) Tariff-rate quotas.--Subparagraph (A) shall 
                not apply to sugars, syrups, or molasses that are within 
                the quantities of tariff-rate quotas that are subject to 
                the lower rate of duties.
            ``(4) Penalty.--Any person willfully failing or refusing to 
        furnish the information, or furnishing willfully any false 
        information, shall be subject to a civil penalty of not more 
        than $10,000 for each such violation.
            ``(5) Monthly reports.--Taking into consideration the 
        information received under this subsection, the Secretary shall 
        publish on a monthly basis composite data on production, 
        imports, distribution, and stock levels of sugar.

[[Page 116 STAT. 187]]

    ``(i) Substitution of Refined Sugar.--For purposes of Additional 
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 substitutable for the export of sugar 
and sugar-containing products under those programs.
    ``(j) Effective Period.--This section shall be effective only for 
the 1996 through 2007 crops of sugar beets and sugarcane.''.
    (b) Effective <<NOTE: 7 USC 7272 note.>> Date of Assessment 
Termination.--Subsection (f) of section 156 of the Federal Agriculture 
Improvement and Reform Act of 1996 (7 U.S.C. 7272(f)), as in effect 
immediately before the enactment of the Farm Security and Rural 
Investment Act of 2002, is deemed to have been repealed effective as of 
October 1, 2001.

    (c) Interest Rate.--Section 163 of the Federal Agriculture 
Improvement and Reform Act of 1996 (7 U.S.C. 7283) is amended--
            (1) by inserting ``(a) In General.--'' before 
        ``Notwithstanding''; and
            (2) by adding at the end the following:

    ``(b) Sugar.--For purposes of this section, raw cane sugar, refined 
beet sugar, and in-process sugar eligible for a loan under section 156 
shall not be considered an agricultural commodity.''.

SEC. 1402. <<NOTE: 7 USC 7971.>> STORAGE FACILITY LOANS.

    (a) In General.--Notwithstanding any other provision of law and as 
soon as practicable after the date of enactment of this Act, the 
Commodity Credit Corporation shall amend part 1436 of title 7, Code of 
Federal Regulations, to establish a sugar storage facility loan program 
to provide financing for processors of domestically-produced sugarcane 
and sugar beets to construct or upgrade storage and handling facilities 
for raw sugars and refined sugars.
    (b) Eligible Processors.--A storage facility loan described in 
subsection (a) shall be made available to any processor of domestically 
produced sugarcane or sugar beets that (as determined by the 
Secretary)--
            (1) has a satisfactory credit history;
            (2) has a need for increased storage capacity, taking into 
        account the effects of marketing allotments; and
            (3) demonstrates an ability to repay the loan.

    (c) Term of Loans.--A storage facility loan described in subsection 
(a) shall--
            (1) have a minimum term of 7 years; and
            (2) be in such amounts and on such terms and conditions 
        (including terms and conditions relating to downpayments, 
        collateral, and eligible facilities) as are normal, customary, 
        and appropriate for the size and commercial nature of the 
        borrower.

SEC. 1403. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR.

    Part VII of subtitle B of title III of the Agricultural Adjustment 
Act of 1938 (7 U.S.C. 359aa et seq.) is amended to read as follows:

[[Page 116 STAT. 188]]

           ``PART VII--FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR

``SEC. 359a. <<NOTE: 7 USC 1359aa.>>  DEFINITIONS.

    ``In this part:
            ``(1) Mainland state.--The term `mainland State' means a 
        State other than an offshore State.
            ``(2) Offshore state.--The term `offshore State' means a 
        sugarcane producing State located outside of the continental 
        United States.
            ``(3) State.--Notwithstanding section 301, the term `State' 
        means--
                    ``(A) a State;
                    ``(B) the District of Columbia; and
                    ``(C) the Commonwealth of Puerto Rico.
            ``(4) United states.--The term `United States', when used in 
        a geographical sense, means all of the States.

``SEC. 359b. <<NOTE: 7 USC 1359bb.>> FLEXIBLE MARKETING ALLOTMENTS FOR 
            SUGAR.

    ``(a) Sugar Estimates.--
            ``(1) In <<NOTE: Deadline.>> general.--Not later than August 
        1 before the beginning of each of the 2002 through 2007 crop 
        years, the Secretary shall estimate--
                    ``(A) the quantity of sugar that will be consumed in 
                the United States during the crop year;
                    ``(B) the quantity of sugar that would provide for 
                reasonable carryover stocks;
                    ``(C) the quantity of sugar that will be available 
                from carry-in stocks for consumption in the United 
                States during the crop year;
                    ``(D) the quantity of sugar that will be available 
                from the domestic processing of sugarcane and sugar 
                beets; and
                    ``(E) the quantity of sugars, syrups, and molasses 
                that will be imported for human consumption or to be 
                used for the extraction of sugar for human consumption 
                in the United States during the crop year, whether such 
                articles are under a tariff-rate quota or are in excess 
                or outside of a tariff-rate quota.
            ``(2) Exclusion.--The estimates under this subsection shall 
        not apply to sugar imported for the production of polyhydric 
        alcohol or to any sugar refined and reexported in refined form 
        or in products containing sugar.
            ``(3) Reestimates.--The Secretary shall make reestimates of 
        sugar consumption, stocks, production, and imports for a crop 
        year as necessary, but no later than the beginning of each of 
        the second through fourth quarters of the crop year.

    ``(b) Sugar Allotments.--
            ``(1) In general.--By the beginning of each crop year, the 
        Secretary shall establish for that crop year appropriate 
        allotments under section 359c for the marketing by processors of 
        sugar processed from sugar beets and from domestically produced 
        sugarcane at a level that the Secretary estimates will result in 
        no forfeitures of sugar to the Commodity Credit Corporation 
        under the loan program for sugar established under section 156 
        of the Federal Agriculture Improvement and Reform Act of 1996 (7 
        U.S.C. 7272).

[[Page 116 STAT. 189]]

            ``(2) Products.--The Secretary may include sugar products, 
        whose majority content is sucrose for human consumption, derived 
        from sugarcane, sugar beets, molasses, or sugar in the 
        allotments under paragraph (1) if the Secretary determines it to 
        be appropriate for purposes of this part.

    ``(c) Prohibitions.--
            ``(1) In general.--During any crop year or portion thereof 
        for which marketing allotments have been established, no 
        processor of sugar beets or sugarcane shall market a quantity of 
        sugar in excess of the allocation established for such 
        processor, except to enable another processor to fulfill an 
        allocation established for such other processor or to facilitate 
        the exportation of such sugar.
            ``(2) Civil penalty.--Any processor who knowingly violates 
        paragraph (1) shall be liable to the Commodity Credit 
        Corporation 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 
        violation.
            ``(3) Definition of market.--For purposes of this part, the 
        term `market' shall mean to sell or otherwise dispose of in 
        commerce in the United States (including the forfeiture of sugar 
        under the loan program for sugar under section 156 of the 
        Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 
        7272) and, with respect to any integrated processor and refiner, 
        the movement of raw cane sugar into the refining process).

``SEC. 359c. <<NOTE: 7 USC 1359cc.>>  ESTABLISHMENT OF FLEXIBLE 
            MARKETING ALLOTMENTS.

    ``(a) In General.--The Secretary shall establish flexible marketing 
allotments for sugar for any crop year in which the allotments are 
required under section 359b(b) in accordance with this section.
    ``(b) Overall Allotment Quantity.--
            ``(1) In general.--The Secretary shall establish the overall 
        quantity of sugar to be allotted for the crop year (in this part 
        referred to as the `overall allotment quantity') by deducting 
        from the sum of the estimated sugar consumption and reasonable 
        carryover stocks (at the end of the crop year) for the crop 
        year, as determined under section 359b(a)--
                    ``(A) 1,532,000 short tons, raw value; and
                    ``(B) carry-in stocks of sugar, including sugar in 
                Commodity Credit Corporation inventory.
            ``(2) Adjustment.--The Secretary shall adjust the overall 
        allotment quantity to avoid the forfeiture of sugar to the 
        Commodity Credit Corporation.

    ``(c) Marketing Allotment for Sugar Derived from Sugar Beets and 
Sugar Derived from Sugarcane.--The overall allotment quantity for the 
crop year shall be allotted between--
            ``(1) sugar derived from sugar beets by establishing a 
        marketing allotment for a crop year at a quantity equal to the 
        product of multiplying the overall allotment quantity for the 
        crop year by 54.35 percent; and
            ``(2) sugar derived from sugarcane by establishing a 
        marketing allotment for a crop year at a quantity equal to the 
        product of multiplying the overall allotment quantity for the 
        crop year by 45.65 percent.

[[Page 116 STAT. 190]]

    ``(d) Filling Cane Sugar and Beet Sugar Allotments.--
            ``(1) Cane sugar.--Each marketing allotment for cane sugar 
        established under this section may only be filled with sugar 
        processed from domestically grown sugarcane.
            ``(2) Beet sugar.--Each marketing allotment for beet sugar 
        established under this section may only be filled with sugar 
        domestically processed from sugar beets.

    ``(e) State Cane Sugar Allotments.--
            ``(1) In general.--The allotment for sugar derived from 
        sugarcane shall be further allotted, among the States in the 
        United States in which sugarcane is produced, after a hearing 
        (if requested by the affected sugarcane processors and growers) 
        and on such notice as the Secretary by regulation may prescribe, 
        in a fair and equitable manner as provided in this subsection 
        and section 359d(b)(1)(D).
            ``(2) Offshore allotment.--
                    ``(A) Collectively.--Prior to the allotment of sugar 
                derived from sugarcane to any other State, 325,000 short 
                tons, raw value shall be allotted to the offshore 
                States.
                    ``(B) Individually.--The collective offshore State 
                allotment provided for under subparagraph (A) shall be 
                further allotted among the offshore States in which 
                sugarcane is produced, after a hearing (if requested by 
                the affected sugarcane processors and growers) and on 
                such notice as the Secretary by regulation may 
                prescribe, in a fair and equitable manner on the basis 
                of--
                          ``(i) past marketings of sugar, based on the 
                      average of the 2 highest years of production of 
                      raw cane sugar from the 1996 through 2000 crops;
                          ``(ii) the ability of processors to market the 
                      sugar covered under the allotments for the crop 
                      year; and
                          ``(iii) past processings of sugar from 
                      sugarcane, based on the 3-year average of the 1998 
                      through 2000 crop years.
            ``(3) Mainland allotment.--The allotment for sugar derived 
        from sugarcane, less the amount provided for under paragraph 
        (2), shall be allotted among the mainland States in the United 
        States in which sugarcane is produced, after a hearing (if 
        requested by the affected sugarcane processors and growers) and 
        on such notice as the Secretary by regulation may prescribe, in 
        a fair and equitable manner on the basis of--
                    ``(A) past marketings of sugar, based on the average 
                of the 2 highest years of production of raw cane sugar 
                from the 1996 through 2000 crops;
                    ``(B) the ability of processors to market the sugar 
                covered under the allotments for the crop year; and
                    ``(C) past processings of sugar from sugarcane, 
                based on the 3 crop years with the greatest processings 
                (in the mainland States collectively) during the 1991 
                through 2000 crop years.

    ``(f) Filling Cane Sugar Allotments.--Except as provided in section 
359e, a State cane sugar allotment established under subsection (e) for 
a crop year may be filled only with sugar processed from sugarcane grown 
in the State covered by the allotment.
    ``(g) Adjustment of Marketing Allotments.--

[[Page 116 STAT. 191]]

            ``(1) In general.--The Secretary shall, based on reestimates 
        under section 359b(a)(3), adjust upward or downward marketing 
        allotments in a fair and equitable manner, as the Secretary 
        determines appropriate, to reflect changes in estimated sugar 
        consumption, stocks, production, or imports.
            ``(2) Allocation to processors.--In the case of any increase 
        or decrease in an allotment, each allocation to a processor of 
        the allotment under section 359d, and each proportionate share 
        established with respect to the allotment under section 359f(c), 
        shall be increased or decreased by the same percentage that the 
        allotment is increased or decreased.
            ``(3) Carry-over of reductions.--Whenever a marketing 
        allotment for a crop year is required to be reduced during the 
        crop year under this subsection, if, at the time of the 
        reduction, the quantity of sugar marketed exceeds the 
        processor's reduced allocation, the allocation of an allotment 
        next established for the processor shall be reduced by the 
        quantity of the excess sugar marketed.

    ``(h) Suspension of Allotments.--Whenever the Secretary estimates or 
reestimates under section 359b(a), or has reason to believe, that 
imports of sugars, syrups or molasses for human consumption or to be 
used for the extraction of sugar for human consumption, whether under a 
tariff-rate quota or in excess or outside of a tariff-rate quota, will 
exceed 1,532,000 short tons (raw value equivalent) (excluding any 
imports attributable to reassignment under paragraph (1)(D) or (2)(C) of 
section 359e(b)), and that the imports would lead to a reduction of the 
overall allotment quantity, the Secretary shall suspend the marketing 
allotments established under this section until such time as the imports 
have been restricted, eliminated, or reduced to or below the level of 
1,532,000 short tons (raw value equivalent).

``SEC. 359d. <<NOTE: 7 USC 1359dd.>> ALLOCATION OF MARKETING ALLOTMENTS.

    ``(a) Allocation to Processors.--Whenever marketing allotments are 
established for a crop year under section 359c, in order to afford all 
interested persons an equitable opportunity to market sugar under an 
allotment, the Secretary shall allocate each such allotment among the 
processors covered by the allotment.
    ``(b) Hearing and Notice.--
            ``(1) Cane sugar.--
                    ``(A) In general.--The Secretary shall make 
                allocations for cane sugar after a hearing, if requested 
                by the affected sugarcane processors and growers, and on 
                such notice as the Secretary by regulation may 
                prescribe, in such manner and in such quantities as to 
                provide a fair, efficient, and equitable distribution of 
                the allocations under this paragraph. Each such 
                allocation shall be subject to adjustment under section 
                359c(g).
                    ``(B) Multiple processor states.--Except as provided 
                in subparagraphs (C) and (D), the Secretary shall 
                allocate the allotment for cane sugar among multiple 
                cane sugar processors in a single State based on--
                          ``(i) past marketings of sugar, based on the 
                      average of the 2 highest years of production of 
                      raw cane sugar from among the 1996 through 2000 
                      crops;

[[Page 116 STAT. 192]]

                          ``(ii) the ability of processors to market 
                      sugar covered by that portion of the allotment 
                      allocated for the crop year; and
                          ``(iii) past processings of sugar from 
                      sugarcane, based on the average of the 3 highest 
                      years of production during the 1996 through 2000 
                      crop years.
                    ``(C) Talisman processing facility.--In the case of 
                allotments under subparagraph (B) attributable to the 
                operations of the Talisman processing facility before 
                the date of enactment of this subparagraph, the 
                Secretary shall allocate the allotment among processors 
                in the State under subparagraph (A) in accordance with 
                the agreements of March 25 and 26, 1999, between the 
                affected processors and the Secretary of the Interior.
                    ``(D) Proportionate share states.--In the case of 
                States subject to section 359f(c), the Secretary shall 
                allocate the allotment for cane sugar among multiple 
                cane sugar processors in a single State based on--
                          ``(i) past marketings of sugar, based on the 
                      average of the 2 highest years of production of 
                      raw cane sugar from among the 1997 through 2001 
                      crop years;
                          ``(ii) the ability of processors to market 
                      sugar covered by that portion of the allotments 
                      allocated for the crop year; and
                          ``(iii) past processings of sugar from 
                      sugarcane, based on the average of the 2 highest 
                      crop years of crop production during the 1997 
                      through 2001 crop years.
                    ``(E) New entrants.--
                          ``(i) In general.--Notwithstanding 
                      subparagraphs (B) and (D), the Secretary, on 
                      application of any processor that begins 
                      processing sugarcane on or after the date of 
                      enactment of this subparagraph, and after a 
                      hearing (if requested by the affected sugarcane 
                      processors and growers) and on such notice as the 
                      Secretary by regulation may prescribe, may provide 
                      the processor with an allocation that provides a 
                      fair, efficient and equitable distribution of the 
                      allocations from the allotment for the State in 
                      which the processor is located.
                          ``(ii) Proportionate share states.--In the 
                      case of proportionate share States, the Secretary 
                      shall establish proportionate shares in a quantity 
                      sufficient to produce the sugarcane required to 
                      satisfy the allocations.
                          ``(iii) Limitations.--The allotment for a new 
                      processor under this subparagraph shall not 
                      exceed--
                                    ``(I) in the case of the first crop 
                                year of operation of a new processor, 
                                50,000 short tons (raw value); and
                                    ``(II) in the case of each 
                                subsequent crop year of operation of the 
                                new processor, a quantity established by 
                                the Secretary in accordance with this 
                                subparagraph and the criteria described 
                                in subparagraph (B) or (D), as 
                                applicable.
                          ``(iv) New entrant states.--
                                    ``(I) In general.--Notwithstanding 
                                subparagraphs (A) and (C) of section 
                                359c(e)(3), to

[[Page 116 STAT. 193]]

                                accommodate an allocation under clause 
                                (i) to a new processor located in a new 
                                entrant mainland State, the Secretary 
                                shall provide the new entrant mainland 
                                State with an allotment.
                                    ``(II) Effect on other allotments.--
                                The allotment to any new entrant 
                                mainland State shall be subtracted, on a 
                                pro rata basis, from the allotments 
                                otherwise allotted to each mainland 
                                State under section 359c(e)(3).
                          ``(v) Adverse effects.--Before providing an 
                      initial processor allocation or State allotment to 
                      a new entrant processor or a new entrant State 
                      under this subparagraph, the Secretary shall take 
                      into consideration any adverse effects that the 
                      provision of the allocation or allotment may have 
                      on existing cane processors and producers in 
                      mainland States.
                          ``(vi) Ability to market.--Consistent with 
                      section 359c and this section, any processor 
                      allocation or State allotment made to a new 
                      entrant processor or to a new entrant State under 
                      this subparagraph shall be provided only after the 
                      applicant processor, or the applicable processors 
                      in the State, have demonstrated the ability to 
                      process, produce, and market (including the 
                      transfer or delivery of the raw cane sugar to a 
                      refinery for further processing or marketing) raw 
                      cane sugar for the crop year for which the 
                      allotment is applicable.
                          ``(vii) Prohibition.--Not more than 1 
                      processor allocation provided under this 
                      subparagraph may be applicable to any individual 
                      sugar processing facility.
                    ``(F) Transfer of ownership.--Except as otherwise 
                provided in section 359f(c)(8), if a sugarcane processor 
                is sold or otherwise transferred to another owner or is 
                closed as part of an affiliated corporate group 
                processing consolidation, the Secretary shall transfer 
                the allotment allocation for the processor to the 
                purchaser, new owner, successor in interest, or any 
                remaining processor of an affiliated entity, as 
                applicable, of the processor.
            ``(2) Beet sugar.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph and sections 359c(g), 359e(b), and 
                359f(b), the Secretary shall make allocations for beet 
                sugar among beet sugar processors for each crop year 
                that allotments are in effect on the basis of the 
                adjusted weighted average quantity of beet sugar 
                produced by the processors for each of the 1998 through 
                2000 crop years, as determined under this paragraph.
                    ``(B) Quantity.--The quantity of an allocation made 
                for a beet sugar processor for a crop year under 
                subparagraph (A) shall bear the same ratio to the 
                quantity of allocations made for all beet sugar 
                processors for the crop year as the adjusted weighted 
                average quantity of beet sugar produced by the processor 
                (as determined under subparagraphs (C) and (D)) bears to 
                the total of the adjusted weighted average quantities of 
                beet sugar produced by all processors (as so 
                determined).

[[Page 116 STAT. 194]]

                    ``(C) Weighted average quantity.--Subject to 
                subparagraph (D), the weighted quantity of beet sugar 
                produced by a beet sugar processor during each of the 
                1998 through 2000 crop years shall be (as determined by 
                the Secretary)--
                          ``(i) in the case of the 1998 crop year, 25 
                      percent of the quantity of beet sugar produced by 
                      the processor during the crop year;
                          ``(ii) in the case of the 1999 crop year, 35 
                      percent of the quantity of beet sugar produced by 
                      the processor during the crop year; and
                          ``(iii) in the case of the 2000 crop year, 40 
                      percent of the quantity of beet sugar produced by 
                      the processor (including any quantity of sugar 
                      received from the Commodity Credit Corporation) 
                      during the crop year.
                    ``(D) Adjustments.--
                          ``(i) In general.--The Secretary shall adjust 
                      the weighted average quantity of beet sugar 
                      produced by a beet sugar processor during the 1998 
                      through 2000 crop years under subparagraph (C) if 
                      the Secretary determines that the processor--
                                    ``(I) during the 1996 through 2000 
                                crop years, opened a sugar beet 
                                processing factory;
                                    ``(II) during the 1998 through 2000 
                                crop years, closed a sugar beet 
                                processing factory;
                                    ``(III) during the 1998 through 2000 
                                crop years, constructed a molasses 
                                desugarization facility; or
                                    ``(IV) during the 1998 through 2000 
                                crop years, suffered substantial quality 
                                losses on sugar beets stored during any 
                                such crop year.
                          ``(ii) Quantity.--The quantity of beet sugar 
                      produced by a beet sugar processor under 
                      subparagraph (C) shall be--
                                    ``(I) in the case of a processor 
                                that opened a sugar beet processing 
                                factory, increased by 1.25 percent of 
                                the total of the adjusted weighted 
                                average quantities of beet sugar 
                                produced by all processors during the 
                                1998 through 2000 crop years (without 
                                consideration of any adjustment under 
                                this subparagraph) for each sugar beet 
                                processing factory that is opened by the 
                                processor;
                                    ``(II) in the case of a processor 
                                that closed a sugar beet processing 
                                factory, decreased by 1.25 percent of 
                                the total of the adjusted weighted 
                                average quantities of beet sugar 
                                produced by all processors during the 
                                1998 through 2000 crop years (without 
                                consideration of any adjustment under 
                                this subparagraph) for each sugar beet 
                                processing factory that is closed by the 
                                processor;
                                    ``(III) in the case of a processor 
                                that constructed a molasses 
                                desugarization facility, increased by 
                                0.25 percent of the total of the 
                                adjusted weighted average quantities of 
                                beet sugar produced by all processors 
                                during the 1998 through 2000 crop years 
                                (without consideration of any adjustment 
                                under this subparagraph) for each

[[Page 116 STAT. 195]]

                                molasses desugarization facility that is 
                                constructed by the processor; and
                                    ``(IV) in the case of a processor 
                                that suffered substantial quality losses 
                                on stored sugar beets, increased by 1.25 
                                percent of the total of the adjusted 
                                weighted average quantities of beet 
                                sugar produced by all processors during 
                                the 1998 through 2000 crop years 
                                (without consideration of any adjustment 
                                under this subparagraph).
                    ``(E) Permanent termination of operations of a 
                processor.--If a processor of beet sugar has been 
                dissolved, liquidated in a bankruptcy proceeding, or 
                otherwise has permanently terminated operations (other 
                than in conjunction with a sale or other disposition of 
                the processor or the assets of the processor), the 
                Secretary shall--
                          ``(i) eliminate the allocation of the 
                      processor provided under this section; and
                          ``(ii) distribute the allocation to other beet 
                      sugar processors on a pro rata basis.
                    ``(F) Sale of all assets of a processor to another 
                processor.--If a processor of beet sugar (or all of the 
                assets of the processor) is sold to another processor of 
                beet sugar, the Secretary shall transfer the allocation 
                of the seller to the buyer unless the allocation has 
                been distributed to other sugar beet processors under 
                subparagraph (E).
                    ``(G) Sale of factories of a processor to another 
                processor.--
                          ``(i) In general.--Subject to subparagraphs 
                      (E) and (F), if 1 or more factories of a processor 
                      of beet sugar (but not all of the assets of the 
                      processor) are sold to another processor of beet 
                      sugar during a crop year, the Secretary shall 
                      assign a pro rata portion of the allocation of the 
                      seller to the allocation of the buyer to reflect 
                      the historical contribution of the production of 
                      the sold factory or factories to the total 
                      allocation of the seller.
                          ``(ii) Application of allocation.--The 
                      assignment of the allocation under clause (i) 
                      shall apply--
                                    ``(I) during the remainder of the 
                                crop year during which the sale 
                                described in clause (i) occurs (referred 
                                to in this subparagraph as the `initial 
                                crop year'); and
                                    ``(II) each subsequent crop year 
                                (referred in this subparagraph as a 
                                `subsequent crop year'), subject to 
                                clause (iii).
                          ``(iii) Subsequent crop years.--
                                    ``(I) In general.--The assignment of 
                                the allocation under clause (i) shall 
                                apply during each subsequent crop year 
                                unless the acquired factory or factories 
                                continue in operation for less than the 
                                initial crop year and the first 
                                subsequent crop year.
                                    ``(II) Reassignment.--If the 
                                acquired factory or factories do not 
                                continue in operation for the complete 
                                initial crop year and the first 
                                subsequent

[[Page 116 STAT. 196]]

                                crop year, the Secretary shall reassign 
                                the temporary allocation to other 
                                processors of beet sugar on a pro rata 
                                basis.
                          ``(iv) Use of other factories to fill 
                      allocation.--If the transferred allocation to the 
                      buyer for the purchased factory or factories 
                      cannot be filled by the production of the 
                      purchased factory or factories for the initial 
                      crop year or a subsequent crop year, the remainder 
                      of the transferred allocation may be filled by 
                      beet sugar produced by the buyer from other 
                      factories of the buyer.
                    ``(H) New entrants starting production or reopening 
                factories.--
                          ``(i) In general.--Except as provided by 
                      clause (ii), if an individual or entity that does 
                      not have an allocation of beet sugar under this 
                      part (referred to in this paragraph as a `new 
                      entrant') starts processing sugar beets after the 
                      date of enactment of this subparagraph, or 
                      acquires and reopens a factory that produced beet 
                      sugar during previous crop years that (at the time 
                      of acquisition) has no allocation associated with 
                      the factory under this part, the Secretary shall--
                                    ``(I) assign an allocation for beet 
                                sugar to the new entrant that provides a 
                                fair and equitable distribution of the 
                                allocations for beet sugar; and
                                    ``(II) reduce the allocations for 
                                beet sugar of all other processors on a 
                                pro rata basis to reflect the new 
                                allocation.
                          ``(ii) Exception.--If a new entrant acquires 
                      and reopens a factory that previously produced 
                      beet sugar from sugar beets and from sugar beet 
                      molasses but the factory last processed sugar 
                      beets during the 1997 crop year and the new 
                      entrant starts to process sugar beets at such 
                      factory after the date of enactment of this 
                      clause, the Secretary shall--
                                    ``(I) assign an allocation for beet 
                                sugar to the new entrant that is not 
                                less than the greater of 1.67 percent of 
                                the total of the adjusted weighted 
                                average quantities of beet sugar 
                                produced by all processors during the 
                                1998 through 2000 crop years as 
                                determined under subsection (b)(2)(C), 
                                or 1,500,000 hundredweights; and
                                    ``(II) reduce the allocations for 
                                beet sugar of all other processors on a 
                                pro rata basis to reflect the new 
                                allocation.
                    ``(I) New entrants acquiring ongoing factories with 
                production history.--If a new entrant acquires a factory 
                that has production history during the period of the 
                1998 through 2000 crop years and that is producing beet 
                sugar at the time the allocations are made from a 
                processor that has an allocation of beet sugar, the 
                Secretary shall transfer a portion of the allocation of 
                the seller to the new entrant to reflect the historical 
                contribution of the production of the sold factory to 
                the total allocation of the seller.

[[Page 116 STAT. 197]]

``SEC. 359e. <<NOTE: 7 USC 1359ee.>>  REASSIGNMENT OF DEFICITS.

    ``(a) Estimates of Deficits.--At any time allotments are in effect 
under this part, the Secretary, from time to time, shall determine 
whether (in view of then-current inventories of sugar, the estimated 
production of sugar and expected marketings, and other pertinent 
factors) any processor of sugarcane will be unable to market the sugar 
covered by the portion of the State cane sugar allotment allocated to 
the processor and whether any processor of sugar beets will be unable to 
market sugar covered by the portion of the beet sugar allotment 
allocated to the processor.
    ``(b) Reassignment of Deficits.--
            ``(1) Cane sugar.--If the Secretary determines that any 
        sugarcane processor who has been allocated a share of a State 
        cane sugar allotment will be unable to market the processor's 
        allocation of the State's allotment for the crop year--
                    ``(A) the Secretary first shall reassign the 
                estimated quantity of the deficit to the allocations for 
                other processors within that State, depending on the 
                capacity of each other processor to fill the portion of 
                the deficit to be assigned to it and taking into account 
                the interests of producers served by the processors;
                    ``(B) if after the reassignments the deficit cannot 
                be completely eliminated, the Secretary shall reassign 
                the estimated quantity of the deficit proportionately to 
                the allotments for other cane sugar States, depending on 
                the capacity of each other State to fill the portion of 
                the deficit to be assigned to it, with the reassigned 
                quantity to each State to be allocated among processors 
                in that State in proportion to the allocations of the 
                processors;
                    ``(C) if after the reassignments the deficit cannot 
                be completely eliminated, the Secretary shall reassign 
                the estimated quantity of the deficit to the Commodity 
                Credit Corporation and shall sell such quantity of sugar 
                from inventories of the Corporation unless the Secretary 
                determines that such sales would have a significant 
                effect on the price of sugar; and
                    ``(D) if after the reassignments and sales, the 
                deficit cannot be completely eliminated, the Secretary 
                shall reassign the remainder to imports.
            ``(2) Beet sugar.--If the Secretary determines that a sugar 
        beet processor who has been allocated a share of the beet sugar 
        allotment will be unable to market that allocation--
                    ``(A) the Secretary first shall reassign the 
                estimated quantity of the deficit to the allotments for 
                other sugar beet processors, depending on the capacity 
                of each other processor to fill the portion of the 
                deficit to be assigned to it and taking into account the 
                interests of producers served by the processors;
                    ``(B) if after the reassignments the deficit cannot 
                be completely eliminated, the Secretary shall reassign 
                the estimated quantity of the deficit to the Commodity 
                Credit Corporation and shall sell such quantity of sugar 
                from inventories of the Corporation unless the Secretary 
                determines that such sales would have a significant 
                effect on the price of sugar; and

[[Page 116 STAT. 198]]

                    ``(C) if after the reassignments and sales, the 
                deficit cannot be completely eliminated, the Secretary 
                shall reassign the remainder to imports.
            ``(3) Corresponding increase.--The allocation of each 
        processor receiving a reassigned quantity of an allotment under 
        this subsection for a crop year shall be increased to reflect 
        the reassignment.

``SEC. 359f. <<NOTE: 7 USC 1359ff.>>  PROVISIONS APPLICABLE TO 
            PRODUCERS.

    ``(a) Processor Assurances.--
            ``(1) In general.--If allotments for a crop year are 
        allocated to processors under section 359d, the Secretary shall 
        obtain from the processors such assurances as the Secretary 
        considers adequate that the allocation will be shared among 
        producers served by the processor in a fair and equitable manner 
        that adequately reflects producers' production histories.
            ``(2) Arbitration.--
                    ``(A) In general.--Any dispute between a processor 
                and a producer, or group of producers, with respect to 
                the sharing of the allocation to the processor shall be 
                resolved through arbitration by the Secretary on the 
                request of either party.
                    ``(B) Period.--The <<NOTE: Deadlines.>> arbitration 
                shall, to the maximum extent practicable, be--
                          ``(i) commenced not more than 45 days after 
                      the request; and
                          ``(ii) completed not more than 60 days after 
                      the request.

    ``(b) Sugar Beet Processing Facility Closures.--
            ``(1) In general.--If a sugar beet processing facility is 
        closed and the sugar beet growers that previously delivered 
        beets to the facility elect to deliver their beets to another 
        processing company, the growers may petition the Secretary to 
        modify allocations under this part to allow the delivery.
            ``(2) Increased allocation for processing company.--The 
        Secretary may increase the allocation to the processing company 
        to which the growers elect to deliver their sugar beets, with 
        the approval of the processing company, to a level that does not 
        exceed the processing capacity of the processing company, to 
        accommodate the change in deliveries.
            ``(3) Decreased allocation for closed company.--The 
        increased allocation shall be deducted from the allocation to 
        the company that owned the processing facility that has been 
        closed and the remaining allocation shall be unaffected.
            ``(4) Timing.--The <<NOTE: Deadline.>> determinations of the 
        Secretary on the issues raised by the petition shall be made 
        within 60 days after the filing of the petition.

    ``(c) Proportionate Shares of Certain Allotments.--
            ``(1) In general.--
                    ``(A) States affected.--In any case in which a State 
                allotment is established under section 359c(f) and there 
                are in excess of 250 sugarcane producers in the State 
                (other than Puerto Rico), the Secretary shall make a 
                determination under subparagraph (B).
                    ``(B) Determination.--The Secretary shall determine, 
                for each State allotment described in subparagraph (A), 
                whether the production of sugarcane, in the absence of

[[Page 116 STAT. 199]]

                proportionate shares, will be greater than the quantity 
                needed to enable processors to fill the allotment and 
                provide a normal carryover inventory of sugar.
            ``(2) Establishment of proportionate shares.--If the 
        Secretary determines under paragraph (1) that the quantity of 
        sugarcane produced by producers in the area covered by a State 
        allotment for a crop year will be in excess of the quantity 
        needed to enable processors to fill the allotment for the crop 
        year and provide a normal carryover inventory of sugar, the 
        Secretary shall establish a proportionate share for each 
        sugarcane-producing farm that limits the acreage of sugarcane 
        that may be harvested on the farm for sugar or seed during the 
        crop year the allotment is in effect as provided in this 
        subsection. Each such proportionate share shall be subject to 
        adjustment under paragraph (7) and section 359c(g).
            ``(3) Method of determining.--For purposes of determining 
        proportionate shares for any crop of sugarcane:
                    ``(A) The Secretary shall establish the State's per-
                acre yield goal for a crop of sugarcane at a level (not 
                less than the average per-acre yield in the State for 
                the 2 highest years from among the 1999, 2000, and 2001 
                crop years, as determined by the Secretary) that will 
                ensure an adequate net return per pound to producers in 
                the State, taking into consideration any available 
                production research data that the Secretary considers 
                relevant.
                    ``(B) The Secretary shall adjust the per-acre yield 
                goal by the average recovery rate of sugar produced from 
                sugarcane by processors in the State.
                    ``(C) The Secretary shall convert the State 
                allotment for the crop year involved into a State 
                acreage allotment for the crop by dividing the State 
                allotment by the per-acre yield goal for the State, as 
                established under subparagraph (A) and as further 
                adjusted under subparagraph (B).
                    ``(D) The Secretary shall establish a uniform 
                reduction percentage for the crop by dividing the State 
                acreage allotment, as determined for the crop under 
                subparagraph (C), by the sum of all adjusted acreage 
                bases in the State, as determined by the Secretary.
                    ``(E) The uniform reduction percentage for the crop, 
                as determined under subparagraph (D), shall be applied 
                to the acreage base for each sugarcane-producing farm in 
                the State to determine the farm's proportionate share of 
                sugarcane acreage that may be harvested for sugar or 
                seed.
            ``(4) Acreage base.--For purposes of this subsection, the 
        acreage base for each sugarcane-producing farm shall be 
        determined by the Secretary, as follows:
                    ``(A) The acreage base for any farm shall be the 
                number of acres that is equal to the average of the 
                acreage planted and considered planted for harvest for 
                sugar or seed on the farm in the 2 highest of the 1999, 
                2000, and 2001 crop years.
                    ``(B) Acreage planted to sugarcane that producers on 
                a farm were unable to harvest to sugarcane for sugar or 
                seed because of drought, flood, other natural disaster, 
                or other condition beyond the control of the producers 
                may

[[Page 116 STAT. 200]]

                be considered as harvested for the production of sugar 
                or seed for purposes of this paragraph.
            ``(5) Violation.--
                    ``(A) In general.--Whenever proportionate shares are 
                in effect in a State for a crop of sugarcane, producers 
                on a farm shall not knowingly harvest, or allow to be 
                harvested, for sugar or seed an acreage of sugarcane in 
                excess of the farm's proportionate share for the crop 
                year, or otherwise violate proportionate share 
                regulations issued by the Secretary under section 
                359h(a).
                    ``(B) Determination of violation.--No producer shall 
                be considered to have violated subparagraph (A) unless 
                the processor of the sugarcane harvested by such 
                producer from acreage in excess of the proportionate 
                share of the farm markets an amount of sugar that 
                exceeds the allocation of such processor for a crop 
                year.
                    ``(C) Civil penalty.--Any producer on a farm who 
                violates subparagraph (A) by knowingly harvesting, or 
                allowing to be harvested, an acreage of sugarcane in 
                excess of the farm's proportionate share shall be liable 
                to the Commodity Credit Corporation for a civil penalty 
                equal to one and one-half times the United States market 
                value of the quantity of sugar that is marketed by the 
                processor of such sugarcane in excess of the allocation 
                of such processor for the crop year. The Secretary shall 
                prorate penalties imposed under this subparagraph in a 
                fair and equitable manner among all the producers of 
                sugarcane harvested from excess acreage that is acquired 
                by such processor.
            ``(6) Waiver.--Notwithstanding the preceding subparagraph, 
        the Secretary may authorize the county and State committees 
        established under section 8(b) of the Soil Conservation and 
        Domestic Allotment Act (16 U.S.C. 590h(b)) to waive or modify 
        deadlines and other proportionate share requirements in cases in 
        which lateness or failure to meet the other requirements does 
        not affect adversely the operation of proportionate shares.
            ``(7) Adjustments.--Whenever the Secretary determines that, 
        because of a natural disaster or other condition beyond the 
        control of producers that adversely affects a crop of sugarcane 
        subject to proportionate shares, the amount of sugarcane 
        produced by producers subject to the proportionate shares will 
        not be sufficient to enable processors in the State to meet the 
        State's cane sugar allotment and provide a normal carryover 
        inventory of sugar, the Secretary may uniformly allow producers 
        to harvest an amount of sugarcane in excess of their 
        proportionate share, or suspend proportionate shares entirely, 
        as necessary to enable processors to meet the State allotment 
        and provide a normal carryover inventory of sugar.
            ``(8) Processing facility closures.--
                    ``(A) In general.--If a sugarcane processing 
                facility subject to this subsection is closed and the 
                sugarcane growers that delivered sugarcane to the 
                facility prior to closure elect to deliver their 
                sugarcane to another processing company, the growers may 
                petition the Secretary to modify allocations under this 
                part to allow the delivery.

[[Page 116 STAT. 201]]

                    ``(B) Increased allocation for processing company.--
                The Secretary may increase the allocation to the 
                processing company to which the growers elect to deliver 
                the sugarcane, with the approval of the processing 
                company, to a level that does not exceed the processing 
                capacity of the processing company, to accommodate the 
                change in deliveries.
                    ``(C) Decreased allocation for closed company.--The 
                increased allocation shall be deducted from the 
                allocation to the company that owned the processing 
                facility that has been closed and the remaining 
                allocation shall be unaffected.
                    ``(D) Timing.--The <<NOTE: Deadline.>>  
                determinations of the Secretary on the issues raised by 
                the petition shall be made within 60 days after the 
                filing of the petition.

``SEC. 359g. <<NOTE: 7 USC 1359gg.>>  SPECIAL RULES.

    ``(a) Transfer of Acreage Base History.--For the purpose of 
establishing proportionate shares for sugarcane farms under section 
359f(c), the Secretary, on application of any producer, with the written 
consent of all owners of a farm, may transfer the acreage base history 
of the farm to any other parcels of land of the applicant.
    ``(b) Preservation of Acreage Base History.--If for reasons beyond 
the control of a producer on a farm, the producer is unable to harvest 
an acreage of sugarcane for sugar or seed with respect to all or a 
portion of the proportionate share established for the farm under 
section 359f(c), the Secretary, on the application of the producer and 
with the written consent of all owners of the farm, may preserve for a 
period of not more than 5 consecutive years the acreage base history of 
the farm to the extent of the proportionate share involved. The 
Secretary may permit the proportionate share to be redistributed to 
other farms, but no acreage base history for purposes of establishing 
acreage bases shall accrue to the other farms by virtue of the 
redistribution of the proportionate share.
    ``(c) Revisions of Allocations and Proportionate Shares.--The 
Secretary, after such notice as the Secretary by regulation may 
prescribe, may revise or amend any allocation of a marketing allotment 
under section 359d, or any proportionate share established or adjusted 
for a farm under section 359f(c), on the same basis as the initial 
allocation or proportionate share was required to be established.
    ``(d) Transfers of Mill Allocations.--
            ``(1) Transfer authorized.--A producer in a proportionate 
        share State, upon written consent from all crop-share owners (or 
        the representative of the crop-share owners) of a farm, and from 
        the processing company holding the applicable allocation for 
        such shares, may deliver sugarcane to another processing company 
        if the additional delivery, when combined with such other 
        processing company's existing deliveries, does not exceed the 
        processing capacity of the company.
            ``(2) Allocation adjustment.--Notwithstanding section 359d, 
        the Secretary shall adjust the allocations of each of such 
        processing companies affected by a transfer under paragraph (1) 
        to reflect the change in deliveries, based on the product of--

[[Page 116 STAT. 202]]

                    ``(A) the number of acres of proportionate shares 
                being transferred; and
                    ``(B) the State's per acre yield goal established 
                under section 359f(c)(3).

``SEC. 359h. <<NOTE: 7 USC 1359hh.>>  REGULATIONS; VIOLATIONS; 
            PUBLICATION OF SECRETARY'S DETERMINATIONS; JURISDICTION OF 
            THE COURTS; UNITED STATES ATTORNEYS.

    ``(a) Regulations.--The Secretary or the Commodity Credit 
Corporation, as appropriate, shall issue such regulations as may be 
necessary to carry out the authority vested in the Secretary in 
administering this part.
    ``(b) Violation.--Any person knowingly violating any regulation of 
the Secretary issued under subsection (a) shall be subject to a civil 
penalty of not more than $5,000 for each violation.
    ``(c) Publication in Federal Register.--Each determination issued by 
the Secretary to establish, adjust, or suspend allotments under this 
part shall be promptly published in the Federal Register and shall be 
accompanied by a statement of the reasons for the determination.
    ``(d) Jurisdiction of Courts; United States Attorneys.--
            ``(1) Jurisdiction of courts.--The several district courts 
        of the United States are vested with jurisdiction specifically 
        to enforce, and to prevent and restrain any person from 
        violating, this part or any regulation issued thereunder.
            ``(2) United states attorneys.--Whenever the Secretary shall 
        so request, it shall be the duty of the several United States 
        attorneys, in their respective districts, to institute 
        proceedings to enforce the remedies and to collect the penalties 
        provided for in this part. The Secretary may elect not to refer 
        to a United States attorney any violation of this part or 
        regulation when the Secretary determines that the administration 
        and enforcement of this part would be adequately served by 
        written notice or warning to any person committing the 
        violation.

    ``(e) Nonexclusivity of Remedies.--The remedies and penalties 
provided for in this part shall be in addition to, and not exclusive of, 
any remedies or penalties existing at law or in equity.

``SEC. 359i. <<NOTE: 7 USC 1359ii.>>  APPEALS.

    ``(a) In General.--An appeal may be taken to the Secretary from any 
decision under section 359d establishing allocations of marketing 
allotments, or under section 359f, by any person adversely affected by 
reason of any such decision.

    ``(b) Procedure.--
            ``(1) Notice of appeal.--Any such appeal shall be taken by 
        filing with the Secretary, within 20 days after the decision 
        complained of is effective, notice in writing of the appeal and 
        a statement of the reasons therefor. Unless a later date is 
        specified by the Secretary as part of the Secretary's decision, 
        the decision complained of shall be considered to be effective 
        as of the date on which announcement of the decision is made. 
        The Secretary shall deliver a copy of any notice of appeal to 
        each person shown by the records of the Secretary to be 
        adversely affected by reason of the decision appealed, and shall 
        at all times thereafter permit any such person to inspect and 
        make copies of appellant's reasons for the appeal and shall on 
        application permit the person to intervene in the appeal.

[[Page 116 STAT. 203]]

            ``(2) Hearing.--The Secretary shall provide each appellant 
        an opportunity for a hearing before an administrative law judge 
        in accordance with sections 554 and 556 of title 5, United 
        States Code. The expenses for conducting the hearing shall be 
        reimbursed by the Commodity Credit Corporation.

    ``(c) Special Appeal Process Regarding Beet Sugar Allocations.--
            ``(1) Appeal authorized.--Beginning after the 2006 crop 
        year, a processor that has an allocation of the beet sugar 
        allotment under this part (referred to in this subsection as a 
        `petitioner') may file a notice of appeal with the Secretary 
        regarding the petitioner's beet sugar allocation. Except as 
        provided in paragraph (2), the Secretary shall consider the 
        appeal if the notice alleges that any processor that has a beet 
        sugar allocation has failed to fill at least 82.5 percent of its 
        allocation of the beet sugar allotment with sugar produced by it 
        or received from the Commodity Credit Corporation in 2 out of 
        the 3 crop years preceding the crop year in which the appeal is 
        filed. A processor that is alleged to have failed to fill at 
        least 82.5 percent of its allocation shall be allowed to fully 
        participate in the appeal.
            ``(2) Exceptions.--An appeal under paragraph (1) shall not 
        be based on the failure of a processor to fill at least 82.5 
        percent of its allocation because of drought, flood, hail, or 
        other weather disaster, as determined by the Secretary. The 
        determination by the Secretary shall not require a formal 
        disaster declaration.
            ``(3) Response to appeal.--Upon the petitioner making an 
        appeal to the Secretary, and upon a review by the Secretary of 
        how processors have filled their allocations, the Secretary 
        may--
                    ``(A) assign an increased allocation for beet sugar 
                to the petitioner that provides a fair and equitable 
                distribution of the allocations for beet sugar, taking 
                into account--
                          ``(i) production history during the period 
                      beginning on April 4, 1996, and through the date 
                      of enactment of the Farm Security and Rural 
                      Investment Act of 2002;
                          ``(ii) capital investment during that period;
                          ``(iii) increases in United States sugar 
                      consumption; and
                          ``(iv) the ability or inability of processors 
                      to fill the allocations they have received under 
                      this part; and
                    ``(B) reduce, correspondingly, the allocation for 
                beet sugar of each processor determined to have failed 
                to fill at least 82.5 percent of its allocation of the 
                beet sugar allotment as described in paragraph (1).
            ``(4) Filing deadline.--For purposes of the filing deadline 
        specified in subsection (b)(1), the 20-day period shall commence 
        on the date on which the Secretary announces the allocations for 
        the subsequent crop year or October 1, whichever is earlier.

``SEC. 359j. <<NOTE: 7 USC 1359jj.>>  ADMINISTRATION.

    ``(a) Use of Certain Agencies.--In carrying out this part, the 
Secretary may use the services of local committees of sugar beet or 
sugarcane producers, sugarcane processors, or sugar beet

[[Page 116 STAT. 204]]

processors, State and county committees established under section 8(b) 
of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)), 
and the departments and agencies of the United States Government.
    ``(b) Use of Commodity Credit Corporation.--The Secretary shall use 
the services, facilities, funds, and authorities of the Commodity Credit 
Corporation to carry out this part.

``SEC. 359k. <<NOTE: 7 USC 1359kk.>>  REALLOCATING SUGAR QUOTA IMPORT 
            SHORTFALLS.

    ``(a) In General.--Notwithstanding any other provision of law, on or 
after June 1 of each of the 2002 through 2007 calendar years, the United 
States Trade Representative, in consultation with the Secretary, shall 
determine the amount of the quota of cane sugar used by each qualified 
supplying country for that crop year, and may reallocate the unused 
quota for that crop year among qualified supplying countries.

    ``(b) Qualified Supplying Country Defined.--In this section, the 
term `qualified supplying country' means one of the following foreign 
countries that is allowed to export cane sugar to the United States 
under an agreement or any other country with which the United States has 
an agreement relating to the importation of cane sugar:
        Argentina
        Australia
        Barbados
        Belize
        Bolivia
        Brazil
        Colombia
        Republic of the Congo
        Costa Rica
        Dominican Republic
        Ecuador
        El Salvador
        Fiji
        Gabon
        Guatemala
        Guyana
        Haiti
        Honduras
        India
        Cote D'Ivoire, formerly known as 
    the Ivory Coast
        Jamaica
        Madagascar
        Malawi
        Mauritius
        Mexico
        Mozambique
        Nicaragua
        Panama
        Papua New Guinea
        Paraguay
        Peru
        Philippines
        St. Kitts and Nevis
        South Africa
        Swaziland
        Taiwan
        Thailand
        Trinidad-Tobago
        Uruguay
        Zimbabwe.''.

[[Page 116 STAT. 205]]

                            Subtitle E--Dairy

SEC. 1501. <<NOTE: 7 USC 7981.>>  MILK PRICE SUPPORT PROGRAM.

    (a) Support Activities.--During the period beginning on June 1, 
2002, and ending on December 31, 2007, the Secretary of Agriculture 
shall support the price of milk produced in the 48 contiguous States 
through the purchase of cheese, butter, and nonfat dry milk produced 
from the milk.
    (b) Rate.--During the period specified in subsection (a), the price 
of milk shall be supported at a rate equal to $9.90 per hundredweight 
for milk containing 3.67 percent butterfat.
    (c) Purchase Prices.--
            (1) Uniform prices.--The support purchase prices under this 
        section for each of the products of milk (butter, cheese, and 
        nonfat dry milk) announced by the Secretary shall be the same 
        for all of that product sold by persons offering to sell the 
        product to the Secretary.
            (2) Sufficient prices.--The purchase prices shall be 
        sufficient to enable plants of average efficiency to pay 
        producers, on average, a price that is not less than the rate of 
        price support for milk in effect under subsection (b).

    (d) Special Rule for Butter and Nonfat Dry Milk Purchase Prices.--
            (1) Allocation of purchase prices.--The Secretary may 
        allocate the rate of price support between the purchase prices 
        for nonfat dry milk and butter in a manner that will result in 
        the lowest level of expenditures by the Commodity Credit 
        Corporation or achieve such other objectives as the Secretary 
        considers appropriate. Not later than 10 days after making or 
        changing an allocation, the Secretary shall notify the Committee 
        on Agriculture of the House of Representatives and the Committee 
        on Agriculture, Nutrition, and Forestry of the Senate of the 
        allocation. Section 553 of title 5, United States Code, shall 
        not apply with respect to the implementation of this section.
            (2) Timing of purchase price adjustments.--The Secretary may 
        make any such adjustments in the purchase prices for nonfat dry 
        milk and butter the Secretary considers to be necessary not more 
        than twice in each calendar year.

    (e) Commodity Credit Corporation.--The Secretary shall carry out the 
program authorized by this section through the Commodity Credit 
Corporation.

SEC. 1502. <<NOTE: 7 USC 7982.>>  NATIONAL DAIRY MARKET LOSS PAYMENTS.

    (a) Definitions.--In this section:
            (1) Class i milk.--The term `Class I milk' means milk 
        (including milk components) classified as Class I milk under a 
        Federal milk marketing order.
            (2) Eligible production.--The term `eligible production' 
        means milk produced by a producer in a participating State.
            (3) Federal milk marketing order.--The term `Federal milk 
        marketing order' means an order issued under section 8c of the 
        Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with 
        amendments by the Agricultural Marketing Agreement Act of 1937.

[[Page 116 STAT. 206]]

            (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 
        Secretary)--
                    (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 <<NOTE: Contracts.>> Secretary shall offer to 
enter into contracts with producers on a dairy farm located in a 
participating State under which the producers receive payments on 
eligible production.

    (c) Amount.--Payments to a producer under this section shall be 
calculated by multiplying (as determined by the Secretary)--
            (1) the payment quantity for the producer during the 
        applicable month established under subsection (d);
            (2) the amount equal to--
                    (A) $16.94 per hundredweight; less
                    (B) the Class I milk price per hundredweight in 
                Boston under the applicable Federal milk marketing 
                order; by
            (3) 45 percent.

    (d) Payment Quantity.--
            (1) In general.--Subject to paragraph (2), the payment 
        quantity for a producer during the applicable month under this 
        section shall be equal to the quantity of eligible production 
        marketed by the producer during the month.
            (2) Limitation.--The payment quantity for all producers on a 
        single dairy operation during the months of the applicable 
        fiscal year for which the producers receive payments under 
        subsection (b) shall not exceed 2,400,000 pounds. For purposes 
        of determining whether producers are producers on separate dairy 
        operations or a single dairy operation, the Secretary shall 
        apply the same standards as were applied in 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 promulgate 
        regulations to ensure that a producer does not reconstitute a 
        dairy operation for the sole purpose of receiving additional 
        payments under this section.

    (e) Payments.--A <<NOTE: Deadline.>> payment under a contract under 
this section shall be made on a monthly basis not later than 60 days 
after the last day of the month for which the payment is made.

    (f) Signup.--The <<NOTE: Contracts.>> Secretary shall offer to enter 
into contracts under this section during the period beginning on the 
date that is 60 days after the date of enactment of this Act and ending 
on September 30, 2005.

    (g) Duration of Contract.--
            (1) In general.--Except as provided in paragraph (2) and 
        subsection (h), any contract entered into by producers on a 
        dairy farm under this section shall cover eligible production 
        marketed by the producers on the dairy farm during the period 
        starting with the first day of month the producers on the

[[Page 116 STAT. 207]]

        dairy farm enter into the contract and ending on September 30, 
        2005.
            (2) Violations.--If a producer violates the contract, the 
        Secretary may--
                    (A) terminate the contract and allow the producer to 
                retain any payments received under the contract; or
                    (B) allow the contract to remain in effect and 
                require the producer to repay a portion of the payments 
                received under the contract based on the severity of the 
                violation.

    (h) Transition Rule.--In addition to any payment that is otherwise 
available under this section, if the producers on a dairy farm enter 
into a contract under this section, the Secretary shall make a payment 
in accordance with the formula specified in subsection (c) on the 
quantity of eligible production of the producer marketed during the 
period beginning on December 1, 2001, and ending on the last day of the 
month preceding the month the producers on the dairy farm entered into 
the contract.

SEC. 1503. DAIRY EXPORT INCENTIVE AND DAIRY INDEMNITY PROGRAMS.

    (a) Dairy Export Incentive Program.--Section 153(a) of the Food 
Security Act of 1985 (15 U.S.C. 713a-14(a)) is amended by striking 
``2002'' and inserting ``2007''.
    (b) Dairy Indemnity Program.--Section 3 of Public Law 90-484 (7 
U.S.C. 450l) is amended by striking ``1995'' and inserting ``2007''.

SEC. 1504. DAIRY PRODUCT MANDATORY REPORTING.

    Section 272(1) of the Agricultural Marketing Act of 1946 (7 U.S.C. 
1637a(1)) is amended--
            (1) by striking ``means manufactured dairy products'' and 
        inserting ``means--
                    ``(A) manufactured dairy products'';
            (2) by striking the period at the end and inserting ``; 
        and''; and
            (3) by adding at the end the following:
                    ``(B) substantially identical products designated by 
                the Secretary.''.

SEC. 1505. FUNDING OF DAIRY PROMOTION AND RESEARCH PROGRAM.

    (a) Definitions.--Section 111 of the Dairy Production Stabilization 
Act of 1983 (7 U.S.C. 4502) is amended--
            (1) in subsection (k), by striking ``and'' at the end;
            (2) in subsection (l), by striking the period at the end and 
        inserting a semicolon; and
            (3) by adding at the end the following:
            ``(m) the term `imported dairy product' means any dairy 
        product that is imported into the United States (as defined in 
        subsection (l)), including dairy products imported into the 
        United States in the form of--
                    ``(1) milk, cream, and fresh and dried dairy 
                products;
                    ``(2) butter and butterfat mixtures;
                    ``(3) cheese; and
                    ``(4) casein and mixtures;
            ``(n) the term `importer' means a person that imports an 
        imported dairy product into the United States; and
            ``(o) the term `Customs' means the United States Customs 
        Service.''.

[[Page 116 STAT. 208]]

    (b) Representation of Importers on Board.--Section 113(b) of the 
Dairy Production Stabilization Act of 1983 (7 U.S.C. 4504(b)) is 
amended--
            (1) by inserting ``National Dairy Promotion and Research 
        Board.--'' after ``(b)'';
            (2) by designating the first through ninth sentences as 
        paragraphs (1) through (5) and paragraphs (7) through (10), 
        respectively, and indenting the paragraphs appropriately;
            (3) in paragraph (2) (as so designated), by striking 
        ``Members'' and inserting ``Except as provided in paragraph (6), 
        the members'';
            (4) by inserting after paragraph (5) (as so designated) the 
        following:
            ``(6) Importers.--
                    ``(A) Initial representation.--In making initial 
                appointments to the Board of importer representatives, 
                the Secretary shall appoint 2 members who represent 
                importers of dairy products and are subject to 
                assessments under the order.
                    ``(B) Subsequent representation.--At least once 
                every 3 years after the initial appointment of importer 
                representatives under subparagraph (A), the Secretary 
                shall review the average volume of domestic production 
                of dairy products compared to the average volume of 
                imports of dairy products into the United States during 
                the previous 3 years and, on the basis of that review, 
                shall reapportion importer representation on the Board 
                to reflect the proportional share of the United States 
                market by domestic production and imported dairy 
                products.
                    ``(C) Additional members; nominations.--The members 
                appointed under this paragraph--
                          ``(i) shall be in addition to the total number 
                      of members appointed under paragraph (2); and
                          ``(ii) shall be appointed from nominations 
                      submitted by importers under such procedures as 
                      the Secretary determines to be appropriate.''; and
            (5) in paragraph (8) (as so designated), by striking ``is 
        produced'' and inserting ``is produced as well as importers of 
        dairy products''.

    (c) Budgets.--Section 113(e) of the Dairy Production Stabilization 
Act of 1983 (7 U.S.C. 4504(e)) is amended--
            (1) by striking ``(e)'' and inserting:

    ``(e) Budgets.--
            ``(1) Preparation and submission.--'';
            (2) by striking the last sentence; and
            (3) by adding at the end the following:
            ``(2) Foreign market efforts.--The order shall authorize the 
        Board to expend in the maintenance and expansion of foreign 
        markets an amount not to exceed the amount collected from United 
        States producers for a fiscal year. Of those funds, for each of 
        the 2002 through 2007 fiscal years, the Board's budget may 
        provide for the expenditure of revenues available to the Board 
        to develop international markets for, and to promote within such 
        markets, the consumption of dairy products produced or 
        manufactured in the United States.''.

[[Page 116 STAT. 209]]

    (d) Importer Assessment.--Section 113(g) of the Dairy Production 
Stabilization Act of 1983 (7 U.S.C. 4504(g)) is amended--
            (1) by inserting ``Assessments.--'' after ``(g)'';
            (2) by designating the first through fifth sentences as 
        paragraphs (1) through (5), respectively, and indenting 
        appropriately;
            (3) in paragraph (3) (as so designated)--
                    (A) by inserting ``for milk produced in the United 
                States and imported dairy products'' after ``The rate of 
                assessment''; and
                    (B) by inserting before the period at the end the 
                following: ``, as determined by the Secretary''; and
            (4) by adding at the end the following:
            ``(6) Importers.--
                    ``(A) In general.--The order shall provide that each 
                importer of imported dairy products shall pay an 
                assessment to the Board in the manner prescribed by the 
                order.
                    ``(B) Time for payment.--The assessment on imported 
                dairy products shall be paid by the importer to Customs 
                at the time the entry documents are filed with Customs. 
                Customs shall remit the assessments to the Board. For 
                purposes of this subparagraph, the term `importer' 
                includes persons who hold title to foreign-produced 
                dairy products immediately upon release by Customs, as 
                well as persons who act on behalf of others, as agents, 
                brokers, or consignees, to secure the release of dairy 
                products from Customs.
                    ``(C) Use of assessments on imported dairy 
                products.--Assessments collected on imported dairy 
                products shall not be used for foreign market 
                promotion.''.

    (e) Records.--Section 113(k) of the Dairy Production Stabilization 
Act of 1983 (7 U.S.C. 4504(k)) is amended in the first sentence by 
striking ``person receiving'' and inserting ``importer of imported dairy 
products, each person receiving''.
    (f) Importer Eligibility To Vote in Referendum.--Section 116(b) of 
the Dairy Promotion Stabilization Act of 1983 (7 U.S.C. 4507(b)) is 
amended--
            (1) in the first sentence--
                    (A) by inserting after ``of producers'' the 
                following: ``and importers''; and
                    (B) by inserting after ``the producers'' the 
                following: ``and importers''; and
            (2) in the second sentence, by inserting after ``commercial 
        use'' the following: ``and importers voting in the referendum 
        (who have been engaged in the importation of dairy products 
        during the same representative period, as determined by the 
        Secretary)''.

    (g) Order Implementation and International Trade Obligations.--
Section 112 of the Dairy Promotion Stabilization Act of 1983 (7 U.S.C. 
4503) is amended by adding at the end the following:
    ``(d) Order Implementation and International Trade Obligations.--The 
Secretary, in consultation with the United States Trade Representative, 
shall ensure that the order is implemented in a manner consistent with 
the international trade obligations of the Federal Government.''.

[[Page 116 STAT. 210]]

    (h) Conforming Amendments To Reflect Addition of Importers.--The 
Dairy Production Stabilization Act of 1983 is amended--
            (1) in section 110(b) (7 U.S.C. 4501(b))--
                    (A) in the first sentence--
                          (i) by inserting after ``commercial use'' the 
                      following: ``and on imported dairy products''; and
                          (ii) by striking ``products produced in the 
                      United States.'' and inserting ``products.''; and
                    (B) in the second sentence, by inserting after 
                ``produce milk'' the following: ``or the right of any 
                person to import dairy products''; and
            (2) in section 111(d) (7 U.S.C. 4502(d)), by striking 
        ``produced in the United States''.

SEC. 1506. FLUID MILK PROMOTION.

    (a) Definition of Fluid Milk Product.--Section 1999C of the Fluid 
Milk Promotion Act of 1990 (7 U.S.C. 6402) is amended by striking 
paragraph (3) and inserting the following:
            ``(3) Fluid milk product.--The term `fluid milk product' has 
        the meaning given the term in--
                    ``(A) section 1000.15 of title 7, Code of Federal 
                Regulations, subject to such amendments as may be made 
                by the Secretary; or
                    ``(B) any successor regulation.''.

    (b) Definition of Fluid Milk Processor.--Section 1999C(4) of the 
Fluid Milk Promotion Act of 1990 (7 U.S.C. 6402(4)) is amended by 
striking ``500,000 pounds of fluid milk products in consumer-type 
packages per month'' and inserting ``3,000,000 pounds of fluid milk 
products in consumer-type packages per month (excluding products 
delivered directly to the place of residence of a consumer)''.
    (c) Elimination of Order Termination Date.--Section 1999O of the 
Fluid Milk Promotion Act of 1990 (7 U.S.C. 6414) is amended--
            (1) by striking subsection (a); and
            (2) by redesignating subsections (b) and (c) as subsections 
        (a) and (b), respectively.

SEC. 1507. <<NOTE: 7 USC 7983.>> STUDY OF NATIONAL DAIRY POLICY.

    (a) Study Required.--The Secretary of Agriculture shall conduct a 
comprehensive economic evaluation of the potential direct and indirect 
effects of the various elements of the national dairy policy, including 
an examination of the effect of the national dairy policy on--
            (1) farm price stability, farm profitability and viability, 
        and local rural economies in the United States;
            (2) child, senior, and low-income nutrition programs, 
        including impacts on schools and institutions participating in 
        the programs, on program recipients, and other factors; and
            (3) the wholesale and retail cost of fluid milk, dairy 
        farms, and milk utilization.

    (b) Report.--Not <<NOTE: Deadline.>> later than 1 year 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 
describing the results of the study required by this section.

[[Page 116 STAT. 211]]

    (c) National Dairy Policy Defined.--In this section, the term 
``national dairy policy'' means the dairy policy of the United States as 
evidenced by the following policies and programs:
            (1) Federal milk marketing orders issued under section 8c of 
        the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with 
        amendments by the Agricultural Marketing Act of 1937.
            (2) Interstate dairy compacts (including proposed compacts 
        described in H.R. 1827 and S. 1157, as introduced in the 107th 
        Congress).
            (3) Over-order premiums and State pricing programs.
            (4) Direct payments to milk producers.
            (5) Federal milk price support program established under 
        section 1401.
            (6) Export programs regarding milk and dairy products, such 
        as the dairy export incentive program established under section 
        153 of the Food Security Act of 1985 (15 U.S.C. 713a-14).

SEC. 1508. <<NOTE: 7 USC 7984.>>  STUDIES OF EFFECTS OF CHANGES IN 
            APPROACH TO NATIONAL DAIRY POLICY AND FLUID MILK IDENTITY 
            STANDARDS.

    (a) Federal Dairy Policy Changes.--The Secretary of Agriculture 
shall conduct a study of the effects of--
            (1) terminating all Federal programs relating to price 
        support and supply management for milk; and
            (2) granting the consent of Congress to cooperative efforts 
        by States to manage milk prices and supply.

    (b) Fluid Milk Identity Standards.--The Secretary shall conduct a 
study of the effects of including in the standard of identity for fluid 
milk a required minimum protein content that is commensurate with the 
average nonfat solids content of bovine milk produced in the United 
States.
    (c) Reports.--Not <<NOTE: Deadline.>> later than 1 year 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 
describing the results of the studies required by this section.

                       Subtitle F--Administration

SEC. 1601. <<NOTE: 7 USC 7991.>> ADMINISTRATION GENERALLY.

    (a) Use of Commodity Credit Corporation.--The Secretary shall use 
the funds, facilities, and authorities of the Commodity Credit 
Corporation to carry out this title.
    (b) Determinations by Secretary.--A determination made by the 
Secretary under this title shall be final and conclusive.
    (c) Regulations.--
            (1) In general.--Not <<NOTE: Deadline.>> later than 90 days 
        after the date of the enactment of this Act, the Secretary and 
        the Commodity Credit Corporation, as appropriate, shall 
        promulgate such regulations as are necessary to implement this 
        title.
            (2) Procedure.--The <<NOTE: Regulations.>> promulgation of 
        the regulations and administration of this title shall be made 
        without regard to--
                    (A) chapter 35 of title 44, United States Code 
                (commonly know as the ``Paperwork Reduction Act'');

[[Page 116 STAT. 212]]

                    (B) the Statement of Policy of the Secretary of 
                Agriculture effective July 24, 1971 (36 Fed. Reg. 
                13804), relating to notices of proposed rulemaking and 
                public participation in rulemaking; and
                    (C) the notice and comment provisions of section 553 
                of title 5, United States Code.
            (3) Congressional review of agency rulemaking.--In carrying 
        out this subsection, the Secretary shall use the authority 
        provided under section 808 of title 5, United States Code.

    (d) Treatment of Advance Payment Option.--The protection that was 
afforded producers that had an option to elect to accelerate the receipt 
of any payment under a production flexibility contract payable under the 
Federal Agriculture Improvement and Reform Act of 1996, as provided by 
section 525 of Public 106-170 (113 Stat. 1928; 7 U.S.C. 7212 note), 
shall also apply to the option to receive--
            (1) the advance payment of direct payments and counter-
        cyclical payments under subtitle A and subtitle C; and
            (2) the single payment of compensation for eligible peanut 
        quota holders under section 1310.

    (e) Adjustment Authority Related to Uruguay Round Compliance.--
            (1) Required determination; adjustment.--If the Secretary 
        determines that expenditures under subtitles A through E that 
        are subject to the total allowable domestic support levels under 
        the Uruguay Round Agreements (as defined in section 2 of the 
        Uruguay Round Agreements Act (19 U.S.C. 3501)), as in effect on 
        the date of enactment of this Act, will exceed such allowable 
        levels for any applicable reporting period, the Secretary shall, 
        to the maximum extent practicable, make adjustments in the 
        amount of such expenditures during that period to ensure that 
        such expenditures do not exceed such allowable levels.
            (2) Congressional notification.--Before making any 
        adjustment under paragraph (1), the Secretary shall submit to 
        the Committee on Agriculture, Nutrition, and Forestry of the 
        Senate and the Committee on Agriculture of the House of 
        Representatives a report describing the determination made under 
        that paragraph and the extent of the adjustment to be made.

SEC. 1602. <<NOTE: 7 USC 7992.>>  SUSPENSION OF PERMANENT PRICE SUPPORT 
            AUTHORITY.

    (a) Agricultural Adjustment Act of 1938.--The following provisions 
of the Agricultural Adjustment Act of 1938 shall not be applicable to 
the 2002 through 2007 crops of covered commodities, peanuts, and sugar 
and shall not be applicable to milk during the period beginning on the 
date of enactment of this Act through December 31, 2007:
            (1) Parts II through V of subtitle B of title III (7 U.S.C. 
        1326-1351).
            (2) In the case of upland cotton, section 377 (7 U.S.C. 
        1377).
            (3) Subtitle D of title III (7 U.S.C. 1379a-1379j).
            (4) Title IV (7 U.S.C. 1401-1407).

    (b) Agricultural Act of 1949.--The following provisions of the 
Agricultural Act of 1949 shall not be applicable to the 2002

[[Page 116 STAT. 213]]

through 2007 crops of covered commodities, peanuts, and sugar and shall 
not be applicable to milk during the period beginning on the date of 
enactment of this Act and through December 31, 2007:
            (1) Section 101 (7 U.S.C. 1441).
            (2) Section 103(a) (7 U.S.C. 1444(a)).
            (3) Section 105 (7 U.S.C. 1444b).
            (4) Section 107 (7 U.S.C. 1445a).
            (5) Section 110 (7 U.S.C. 1445e).
            (6) Section 112 (7 U.S.C. 1445g).
            (7) Section 115 (7 U.S.C. 1445k).
            (8) Section 201 (7 U.S.C. 1446).
            (9) Title III (7 U.S.C. 1447-1449).
            (10) Title IV (7 U.S.C. 1421-1433d), other than sections 
        404, 412, and 416 (7 U.S.C. 1424, 1429, and 1431).
            (11) Title V (7 U.S.C. 1461-1469).
            (12) Title VI (7 U.S.C. 1471-1471j).

    (c) Suspension of Certain Quota Provisions.--The joint resolution 
entitled ``A joint resolution relating to corn and wheat marketing 
quotas under the Agricultural Adjustment Act of 1938, as amended'', 
approved May 26, 1941 (7 U.S.C. 1330 and 1340), shall not be applicable 
to the crops of wheat planted for harvest in the calendar years 2002 
through 2007.
    (d) Conforming Amendment.--Section 171(a)(1) of the Federal 
Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7301(a)(1)) is 
amended by striking ``2002'' the first place appears and inserting 
``2001''.

SEC. 1603. PAYMENT LIMITATIONS.

    (a) Limitation on Amounts Received.--Section 1001 of the Food 
Security Act of 1985 (7 U.S.C. 1308) is amended by striking the section 
heading, ``Sec. 1001.'', and all that follows through the end of 
paragraph (4) and inserting the following:

``SEC. 1001. PAYMENT LIMITATIONS.

    ``(a) Definitions.--In this section:
            ``(1) Covered commodity.--The term `covered commodity' has 
        the meaning given that term in section 1001 of the Farm Security 
        and Rural Investment Act of 2002.
            ``(2) Loan commodity.--The term `loan commodity' has the 
        meaning given that term in section 1001 of the Farm Security and 
        Rural Investment Act of 2002, except that the term does not 
        include wool, mohair, or honey.
            ``(3) Secretary.--The term `Secretary' means the Secretary 
        of Agriculture.

    ``(b) Limitation on Direct Payments.--
            ``(1) Covered commodities.--The total amount of direct 
        payments made to a person during any crop year under subtitle A 
        of title I of the Farm Security and Rural Investment Act of 2002 
        for 1 or more covered commodities may not exceed $40,000.
            ``(2) Peanuts.--The total amount of direct payments made to 
        a person during any crop year under subtitle C of title I of the 
        Farm Security and Rural Investment Act of 2002 may not exceed 
        $40,000.

    ``(c) Limitation on Counter-Cyclical Payments.--
            ``(1) Covered commodities.--The total amount of counter-
        cyclical payments made to a person during any crop year under

[[Page 116 STAT. 214]]

        subtitle A of title I of the Farm Security and Rural Investment 
        Act of 2002 for 1 or more covered commodities may not exceed 
        $65,000.
            ``(2) Peanuts.--The total amount of counter-cyclical 
        payments made to a person during any crop year under subtitle C 
        of title I of the Farm Security and Rural Investment Act of 2002 
        may not exceed $65,000.

    ``(d) Limitation on Marketing Loan Gains and Loan Deficiency 
Payments.--
            ``(1) Loan commodities.--The total amount of the following 
        gains and payments that a person may receive during any crop 
        year may not exceed $75,000:
                    ``(A) Any gain realized by a producer from repaying 
                a marketing assistance loan for 1 or more loan 
                commodities under subtitle B of title I of the Farm 
                Security and Rural Investment Act of 2002 at a lower 
                level than the original loan rate established for the 
                loan commodity under that subtitle.
                    ``(B) Any loan deficiency payments received for 1 or 
                more loan commodities under that subtitle.
            ``(2) Other commodities.--The total amount of the following 
        gains and payments that a person may receive during any crop 
        year may not exceed $75,000:
                    ``(A) Any gain realized by a producer from repaying 
                a marketing assistance loan for peanuts, wool, mohair, 
                or honey under subtitle B or C of title I of the Farm 
                Security and Rural Investment Act of 2002 at a lower 
                level than the original loan rate established for the 
                commodity under those subtitles.
                    ``(B) Any loan deficiency payments received for 
                peanuts, wool, mohair, and honey under those 
                subtitles.''.

    (b) Clerical and Conforming Amendments to Section 1001.--Section 
1001 of the Food Security Act of 1985 (7 U.S.C. 1308) is amended--
            (1) in paragraph (5)--
                    (A) by striking ``(5)'' and inserting ``(e) 
                Definition of Person.--''
                    (B) by redesignating subparagraphs (A) through (E) 
                as paragraphs (1) through (5), respectively;
                    (C) in paragraph (1), as so redesignated--
                          (i) by redesignating clauses (i) and (ii) as 
                      subparagraphs (A) and (B), respectively; and
                          (ii) by striking the second sentence; and
                    (D) in paragraph (2), as so redesignated--
                          (i) by redesignating clause (i) as 
                      subparagraph (A) and, in such subparagraph (as so 
                      redesignated)--
                                    (I) by striking ``subparagraph (A), 
                                subject to clause (ii)'' and inserting 
                                ``paragraph (1), subject to subparagraph 
                                (B)''; and
                                    (II) by redesignating subclauses 
                                (I), (II), and (III), as clauses (i), 
                                (ii), and (iii), respectively;
                          (ii) by redesignating clause (ii) as 
                      subparagraph (B) and, in such subparagraph (as so 
                      redesignated), by redesignating subclauses (I), 
                      (II), and (III), as clauses (i), (ii), and (iii), 
                      respectively; and
                          (iii) by redesignating clause (iii) as 
                      subparagraph (C) and, in such subparagraph (as so 
                      redesignated)--

[[Page 116 STAT. 215]]

                                    (I) by striking ``as described in 
                                paragraphs (1) and (2)'' and inserting 
                                ``as described in subsections (b), (c), 
                                and (d)''; and
                                    (II) by redesignating subclauses (I) 
                                and (II) as clauses (i) and (ii), 
                                respectively;
            (2) in paragraph (6), by striking ``(6)'' and inserting 
        ``(f) Public Schools.--''; and
            (3) in paragraph (7), by striking ``(7)'' and inserting 
        ``(g) Time Limits; Reliance.--''.

    (c) Conforming Amendments to Other laws.--
            (1) Section 1001A of the Food Security Act of 1985 (7 U.S.C. 
        1308-1) is amended--
                    (A) in subsections (a)(1) and (b)(2)(B), by striking 
                ``section 1001(5)(B)(i)(II)'' and inserting ``section 
                1001(e)(2)(A)(ii)''; and
                    (B) in subsections (a)(1) and (b)(1), by striking 
                ``section 1001(5)(B)(i)'' and inserting ``section 
                1001(e)(2)(A)''; and
            (2) Section 1001B of the Food Security Act of 1985 (7 U.S.C. 
        1308-2) is amended by striking ``as described in paragraphs (1) 
        and (2)'' and inserting ``as described in subsections (b), (c), 
        and (d)''.
            (3) Section 1001C(a) of the Food Security Act of 1985 (7 
        U.S.C. 1308-3(a)) is amended by inserting ``title I of the Farm 
        Security and Rural Investment Act of 2002,'' after ``made 
        available under''.

    (d) Transition.--Section 1001 of the Food Security Act of 1985 (7 
U.S.C. 1308), as in effect on the day before the date of the enactment 
of this Act, shall continue to apply with respect to the 2001 crop of 
any covered commodity.

SEC. 1604. ADJUSTED GROSS INCOME LIMITATION.

    The Food Security Act of 1985 is amended--
            (1) by redesignating section 1001D (7 U.S.C. 1308-4) and 
        section 1001E (7 U.S.C. 1308-5) as sections 1001E and 1001F, 
        respectively; and
            (2) by inserting after section 1001C (7 U.S.C. 1308-3) the 
        following:

``SEC. 1001D. <<NOTE: 7 USC 1308-3a.>>  ADJUSTED GROSS INCOME 
            LIMITATION.

    ``(a) Definition of Average Adjusted Gross Income.--
            ``(1) In general.--In this section, the term `average 
        adjusted gross income', with respect to an individual or entity 
        (for purposes of this section, as defined in section 
        1001(e)(2)(A)(ii)), means the 3-year average of the adjusted 
        gross income or comparable measure of the individual or entity 
        over the 3 preceding tax years, as determined by the Secretary.
            ``(2) Special rules for certain individuals and entities.--
        In the case of an entity that is not required to file a Federal 
        income tax return or an individual or entity that did not have 
        taxable income in 1 or more of the tax years used to determine 
        the average under paragraph (1), the Secretary shall provide, by 
        regulation, a method for determining the average adjusted gross 
        income of the individual or entity for purposes of this section.

    ``(b) Limitation.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, an individual or entity shall not be eligible to receive 
        any benefit described in paragraph (2) during a crop year

[[Page 116 STAT. 216]]

        if the average adjusted gross income of the individual or entity 
        exceeds $2,500,000, unless not less than 75 percent of the 
        average adjusted gross income of the individual or entity is 
        derived from farming, ranching, or forestry operations, as 
        determined by the Secretary.
            ``(2) Covered benefits.--Paragraph (1) applies with respect 
        to the following:
                    ``(A) A direct payment or counter-cyclical payment 
                under subtitle A or C of title I of the Farm Security 
                and Rural Investment Act of 2002.
                    ``(B) A marketing loan gain or payment described in 
                section 1001(d) of this Act.
                    ``(C) A payment under any program under title XII of 
                this Act or title II of the Farm Security and Rural 
                Investment Act of 2002.

    ``(c) Certification.--To comply with the limitation under subsection 
(b), an individual or entity shall provide to the Secretary--
            ``(1) a certification by a certified public accountant or 
        another third party that is acceptable to the Secretary that the 
        average adjusted gross income of the individual or entity does 
        not exceed the limitation specified in that subsection; or
            ``(2) information and documentation regarding the adjusted 
        gross income of the individual or entity through other 
        procedures established by the Secretary.

    ``(d) Commensurate Reduction.--In the case of a benefit described in 
subsection (b)(2) made in a crop year to an entity, general partnership, 
or joint venture, the amount of the benefit shall be reduced by an 
amount that is commensurate with the direct and indirect ownership 
interest in the entity, general partnership, or joint venture of each 
individual who has an average adjusted gross income in excess of the 
limitation specified in subsection (b) for the average of the 3 
preceding crop years.
    ``(e) Effective Period.--This section shall apply only during the 
2003 through 2007 crop years.''.

SEC. 1605. <<NOTE: 7 USC 7993.>>  COMMISSION ON APPLICATION OF PAYMENT 
            LIMITATIONS.

    (a) Establishment.--There is established a commission to be known as 
the ``Commission on the Application of Payment Limitations for 
Agriculture'' (referred to in this section as the ``Commission'').
    (b) Duties.--The Commission shall conduct a study on the potential 
impacts of further payment limitations on the receipt of direct 
payments, counter-cyclical payments, and marketing loan gains and loan 
deficiency payments on--
            (1) farm income;
            (2) land values;
            (3) rural communities;
            (4) agribusiness infrastructure;
            (5) planting decisions of producers affected; and
            (6) supply and prices of covered commodities, loan 
        commodities, specialty crops (including fruits and vegetables), 
        and other agricultural commodities.

    (c) Membership.--
            (1) Composition.--The Commission shall be composed of 10 
        members as follows:
                    (A) 3 members appointed by the Secretary.

[[Page 116 STAT. 217]]

                    (B) 3 members appointed by the Committee on 
                Agriculture, Nutrition, and Forestry of the Senate.
                    (C) 3 members appointed by the Committee on 
                Agriculture of the House of Representatives.
                    (D) The Chief Economist of the Department of 
                Agriculture.
            (2) Federal government employment.--The membership of the 
        Commission may include 1 or more employees of the Department of 
        Agriculture or other Federal agencies.
            (3) Date of appointments.--
        The <<NOTE: Deadline.>> appointment of a member of the 
        Commission shall be made not later than 60 days after the date 
        of enactment of this Act.
            (4) Term; vacancies.--
                    (A) Term.--A member shall be appointed for the life 
                of the Commission.
                    (B) Vacancies.--A vacancy on the Commission--
                          (i) shall not affect the powers of the 
                      Commission; and
                          (ii) shall be filled in the same manner as the 
                      original appointment was made.
            (5) Initial meeting.--Not <<NOTE: Deadline.>> later than 30 
        days after the date on which all members of the Commission have 
        been appointed, the Commission shall hold the initial meeting of 
        the Commission.

    (d) Quorum.--A majority of the members of the Commission shall 
constitute a quorum for the transaction of business, but a lesser number 
of members may hold hearings.
    (e) Chairperson.--The Secretary shall appoint 1 of the members of 
the Commission to serve as Chairperson of the Commission.
    (f) Report.--Not <<NOTE: Deadline.>> later than 1 year after the 
date of enactment of this Act, the Commission shall submit to the 
President, the Committee on Agriculture of the House of Representatives, 
and the Committee on Agriculture, Nutrition, and Forestry of the Senate 
a report containing the results of the study required by subsection (b), 
including such recommendations as the Commission considers appropriate.

    (g) Hearings.--The Commission may hold such hearings, meet and act 
at such times and places, take such testimony, and receive such evidence 
as the Commission considers advisable to carry out this section.
    (h) Information From Federal Agencies.--The Commission may secure 
directly from a Federal agency such information as the Commission 
considers necessary to carry out this section. On request of the 
Chairperson of the Commission, the head of the agency shall provide the 
information to the Commission.
    (i) Postal Services.--The Commission may use the United States mails 
in the same manner and under the same conditions as other agencies of 
the Federal Government.
    (j) Assistance From Secretary.--The Secretary may provide to the 
Commission appropriate office space and such reasonable administrative 
and support services as the Commission may request.
    (k) Compensation of Members.--
            (1) Non-federal employees.--A member of the Commission who 
        is not an officer or employee of the Federal Government shall be 
        compensated at a rate equal to the daily equivalent of the 
        annual rate of basic pay prescribed for level IV

[[Page 116 STAT. 218]]

        of the Executive Schedule under section 5315 of title 5, United 
        States Code, for each day (including travel time) during which 
        the member is engaged in the performance of the duties of the 
        Commission.
            (2) Federal employees.--A member of the Commission who is an 
        officer or employee of the Federal Government shall serve 
        without compensation in addition to the compensation received 
        for the services of the member as an officer or employee of the 
        Federal Government.
            (3) Travel Expenses.--A member of the Commission shall be 
        allowed travel expenses, including per diem in lieu of 
        subsistence, at rates authorized for an employee of an agency 
        under subchapter I of chapter 57 of title 5, United States Code, 
        while away from the home or regular place of business of the 
        member in the performance of the duties of the Commission.

    (l) Federal Advisory Committee Act.--The Federal Advisory Committee 
Act (5 U.S.C. App.) shall not apply to the Commission or any proceeding 
of the Commission.

SEC. 1606. ADJUSTMENTS OF LOANS.

    Section 162(b) of the Federal Agriculture Improvement and Reform Act 
of 1996 (7 U.S.C. 7282(b)) is amended by striking ``this title'' and 
inserting ``this title and title I of the Farm Security and Rural 
Investment Act of 2002''.

SEC. 1607. PERSONAL LIABILITY OF PRODUCERS FOR DEFICIENCIES.

    Section 164 of the Federal Agriculture Improvement and Reform Act of 
1996 (7 U.S.C. 7284) is amended by striking ``this title'' each places 
it appears and inserting ``this title and title I of the Farm Security 
and Rural Investment Act of 2002''.

SEC. 1608. EXTENSION OF EXISTING ADMINISTRATIVE AUTHORITY REGARDING 
            LOANS.

    Section 166 of the Federal Agriculture Improvement and Reform Act of 
1996 (7 U.S.C. 7286) is amended--
            (1) in subsection (a), by striking ``subtitle C'' and 
        inserting ``subtitle C of this title and subtitle B and C of 
        title I of the Farm Security and Rural Investment Act of 2002''; 
        and
            (2) in subsection (c)(1), by striking ``subtitle C'' and 
        inserting ``subtitle C of this title and subtitle B and C of 
        title I of the Farm Security and Rural Investment Act of 2002''.

SEC. 1609. COMMODITY CREDIT CORPORATION INVENTORY.

    Section 5 of the Commodity Credit Corporation Charter Act (15 U.S.C. 
714c) is amended in the last sentence by inserting before the period at 
the end the following: ``(including, at the option of the Corporation, 
the use of private sector entities)''.

SEC. 1610. RESERVE STOCK LEVEL.

    Section 301(b)(14)(C) of the Agricultural Adjustment Act of 1938 (7 
U.S.C. 1301(b)(14)(C)) is amended--
            (1) in clause (i), by striking ``100,000,000'' and inserting 
        ``60,000,000''; and
            (2) in clause (ii), by striking ``15 percent'' and inserting 
        ``10 percent''.

SEC. 1611. FARM RECONSTITUTIONS.

    (a) In General.--Section 316(a)(1)(A)(ii) of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1314b(a)(1)(A)(ii)) is amended

[[Page 116 STAT. 219]]

by adding at the end the following: ``Notwithstanding any other 
provision of law, for the 2002 crop only, the Secretary shall allow 
special farm reconstitutions, in lieu of lease and transfer of 
allotments and quotas, under this section, in accordance with such 
conditions as are established by the Secretary.''.
    (b) <<NOTE: 7 USC 7994.>>  Study.--
            (1) In general.--The Secretary shall conduct a study on the 
        effects on the limitation on producers to move quota to a farm 
        other than the farm to which the quota was initially assigned 
        under part I of subtitle B of title III of the Agricultural 
        Adjustment Act of 1938 (7 U.S.C. 1311 et seq.).
            (2) Report.--Not <<NOTE: Deadline.>> 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 on the results of the study.

SEC. 1612. <<NOTE: 7 USC 7995.>> ASSIGNMENT OF PAYMENTS.

    The provisions of section 8(g) of the Soil Conservation and Domestic 
Allotment Act (16 U.S.C. 590h(g)), relating to assignment of payments, 
shall apply to payments made under the authority of this Act. The 
producer making the assignment, or the assignee, shall provide the 
Secretary with notice, in such manner as the Secretary may require, of 
any assignment made under this section.

SEC. 1613. <<NOTE: 7 USC 7996.>> EQUITABLE RELIEF FROM INELIGIBILITY FOR 
            LOANS, PAYMENTS, OR OTHER BENEFITS.

    (a) Definitions.--In this section:
            (1) Agricultural commodity.--The term ``agricultural 
        commodity'' means any agricultural commodity, food, feed, fiber, 
        or livestock that is subject to a covered program.
            (2) Covered program.--
                    (A) In general.--The term ``covered program'' 
                means--
                          (i) a program administered by the Secretary 
                      under which price or income support, or production 
                      or market loss assistance, is provided to 
                      producers of agricultural commodities; and
                          (ii) a conservation program administered by 
                      the Secretary.
                    (B) Exclusions.--The term ``covered program'' does 
                not include--
                          (i) an agricultural credit program carried out 
                      under the Consolidated Farm and Rural Development 
                      Act (7 U.S.C. 1921 et seq.); or
                          (ii) the crop insurance program carried out 
                      under the Federal Crop Insurance Act (7 U.S.C. 
                      1501 et seq.).
            (3) Participant.--The term ``participant'' means a 
        participant in a covered program.
            (4) State conservationist.--The term ``State 
        Conservationist'' means the State Conservationist with respect 
        to a program administered by the Natural Resources Conservation 
        Service.
            (5) State director.--The term ``State Director'' means the 
        State Executive Director of the Farm Service Agency with respect 
        to a program administered by the Farm Service Agency.

    (b) Equitable Relief.--The Secretary may provide relief to any 
participant that is determined to be not in compliance with the 
requirements of a covered program, and therefore ineligible

[[Page 116 STAT. 220]]

for a loan, payment, or other benefit under the covered program, if the 
participant--
            (1) acting in good faith, relied on the action or advice of 
        the Secretary (including any authorized representative of the 
        Secretary) to the detriment of the participant; or
            (2) failed to comply fully with the requirements of the 
        covered program, but made a good faith effort to comply with the 
        requirements.

    (c) Forms of Relief.--The Secretary may authorize a participant in a 
covered program to--
            (1) retain loans, payments, or other benefits received under 
        the covered program;
            (2) continue to receive loans, payments, and other benefits 
        under the covered program;
            (3) continue to participate, in whole or in part, under any 
        contract executed under the covered program;
            (4) in the case of a conservation program, reenroll all or 
        part of the land covered by the program; and
            (5) receive such other equitable relief as the Secretary 
        determines to be appropriate.

    (d) Remedial Action.--As a condition of receiving relief under this 
section, the Secretary may require the participant to take actions 
designed to remedy any failure to comply with the covered program.
    (e) Equitable Relief by State Directors and State 
Conservationists.--
            (1) In general.--A State Director, in the case of programs 
        administered by the State Director, and the State 
        Conservationist, in the case of programs administered by the 
        State Conservationist, may grant relief to a participant in 
        accordance with subsections (b) through (d) if--
                    (A) the amount of loans, payments, and benefits for 
                which relief will be provided to the participant under 
                this subsection is less than $20,000;
                    (B) the total amount of loans, payments, and 
                benefits for which relief has been previously provided 
                to the participant under this subsection is not more 
                than $5,000; and
                    (C) the total amount of loans, payments, and 
                benefits for which relief is provided to similarly 
                situated participants under this subsection is not more 
                than $1,000,000, as determined by the Secretary.
            (2) Consultation, approval, and reversal.--The decision by a 
        State Director or State Conservationist to grant relief under 
        this subsection--
                    (A) shall not require prior approval by the 
                Administrator of the Farm Service Agency, the Chief of 
                the Natural Resources Conservation Service, or any other 
                officer or employee of the Agency or Service;
                    (B) shall be made only after consultation with, and 
                the approval of, the Office of General Counsel of the 
                Department of Agriculture; and
                    (C) is subject to reversal only by the Secretary 
                (who may not delegate the reversal authority).
            (3) Nonapplicability.--The authority of a State Director or 
        State Conservationist under this subsection does not apply to 
        the administration of--
                    (A) payment limitations under--

[[Page 116 STAT. 221]]

                          (i) sections 1001 through 1001F of the Food 
                      Security Act of 1985 (7 U.S.C. 1308 et seq.); or
                          (ii) a conservation program administered by 
                      the Secretary.
                    (B) highly erodible land and wetland conservation 
                requirements under subtitle B or C of title XII of the 
                Food Security Act of 1985 (16 U.S.C. 3811 et seq.).
            (4) Other authority.--The authority provided to a State 
        Director and State Conservationist under this subsection is in 
        addition to any other applicable authority and does not limit 
        other authority provided by law or the Secretary.

    (f) Judicial Review.--A discretionary decision by the Secretary, the 
State Director, or the State Conservationist under this section shall be 
final, and shall not be subject to review under chapter 7 of title 5, 
United States Code.
    (g) Reports.--Not <<NOTE: Deadline.>> later than February 1 of each 
year, the Secretary shall submit to the Committee on Agriculture of the 
House of Representatives and the Committee on Agriculture, Nutrition, 
and Forestry of the Senate a report that describes for the previous 
calendar year--
            (1) the number of requests for equitable relief under 
        subsections (b) and (e) and the disposition of the requests; and
            (2) the number of requests for equitable relief under 
        section 278(d) of the Department of Agriculture Reorganization 
        Act of 1994 (7 U.S.C. 6998(d)) and the disposition of the 
        requests.

    (h) Relationship to Other Law.--The authority provided in this 
section is in addition to any other authority provided in this or any 
other Act.
    (i) Finality Rule.--Section 281(a) of the Department of Agriculture 
Reorganization Act of 1994 (7 U.S.C. 7001(a)) is amended--
            (1) by striking ``Consolidated Farm Service Agency'' each 
        place it appears and inserting ``Farm Service Agency'';
            (2) in paragraph (1)--
                    (A) by striking ``This subsection'' and inserting 
                the following:
                    ``(A) In general.--Except as provided in 
                subparagraph (B), this subsection''; and
                    (B) by adding at the end the following:
                    ``(B) Nonapplicability.--This subsection does not 
                apply to--
                          ``(i) a function performed under section 376 
                      of the Consolidated Farm and Rural Development 
                      Act; or
                          ``(ii) a function performed under a 
                      conservation program administered by the Natural 
                      Resources Conservation Service.''; and
            (3) in paragraph (2), by inserting ``, before the end of the 
        90-day period,'' after ``unless the decision''.

    (j) Conforming Amendments.--
            (1) Section 326 of the Food and Agriculture Act of 1962 (7 
        U.S.C. 1339a) is repealed.
            (2) Section 278(d) of the Department of Agriculture 
        Reorganization Act of 1994 (7 U.S.C. 6998(d)) is amended in the 
        first sentence by striking ``section 326 of the Food and 
        Agriculture Act of 1962 (7 U.S.C. 1339a)'' and inserting 
        ``section 1613 of the Farm Security and Rural Investment Act of 
        2002''.
            (3) Section 1230A of the Food Security Act of 1985 (16 
        U.S.C. 3830a) is repealed.

[[Page 116 STAT. 222]]

SEC. 1614. <<NOTE: 7 USC 7997.>>  TRACKING OF BENEFITS.

    As soon as practicable after the date of enactment of this Act, the 
Secretary shall establish procedures to track the benefits provided, 
directly or indirectly, to individuals and entities under titles I and 
II and the amendments made by those titles.

SEC. 1615. <<NOTE: 7 USC 7998.>> ESTIMATES OF NET FARM INCOME.

    In each issuance of projections of net farm income, the Secretary 
shall include (as determined by the Secretary)--
            (1) an estimate of the net farm income earned by commercial 
        producers in the United States; and
            (2) an estimate of the net farm income attributable to 
        commercial producers of each of the following:
                    (A) Livestock.
                    (B) Loan commodities.
                    (C) Agricultural commodities other than loan 
                commodities.

SEC. 1616. <<NOTE: 7 USC 7999.>> AVAILABILITY OF INCENTIVE PAYMENTS FOR 
            CERTAIN PRODUCERS.

    (a) Incentive Payments Required.--Subject to subsection (b), the 
Secretary shall make available a total of $20,000,000 of funds of the 
Commodity Credit Corporation during the 2003 through 2005 crop years to 
provide incentive payments to producers of hard white wheat.
    (b) Conditions on Implementation.--The Secretary shall implement 
subsection (a)--
            (1) only with regard to production that meets minimum 
        quality criteria; and
            (2) on not more than 2,000,000 acres or the equivalent 
        volume of production.

    (c) Demand for Wheat.--To be eligible to obtain an incentive payment 
under subsection (a), a producer shall demonstrate to the satisfaction 
of the Secretary that buyers and end-users are available for the wheat 
to be covered by the incentive payment.

SEC. 1617. <<NOTE: 7 USC 8000.>> RENEWED AVAILABILITY OF MARKET LOSS 
            ASSISTANCE AND CERTAIN EMERGENCY ASSISTANCE TO PERSONS THAT 
            FAILED TO RECEIVE ASSISTANCE UNDER EARLIER AUTHORITIES.

    (a) Authority to Provide Assistance.--The Secretary of Agriculture 
may use such funds of the Commodity Credit Corporation as are necessary 
to provide market loss assistance and other emergency assistance under a 
provision of law specified in subsection (c) to persons that, as 
determined by the Secretary)--
            (1) were eligible to receive the assistance under the 
        provision of law; but
            (2) did not receive the assistance before October 1, 2001.

    (b) Limitation.--The amount of assistance provided under a provision 
of law specified in subsection (c) and this section to a person shall 
not exceed the amount of assistance the person would have been eligible 
to receive under the provision had the claim of the producer under the 
provision been timely resolved.
    (c) Covered Market Loss Assistance Authorities.--The following 
provisions of law are covered by this section:
            (1) Sections 1, 2, 3, 4, and 5 of Public Law 107-25 (115 
        Stat. 201).

[[Page 116 STAT. 223]]

            (2) Sections 805, 806, and 814 of the Agriculture, Rural 
        Development, Food and Drug Administration, and Related Agencies 
        Appropriations Act, 2001 (as enacted into law by Public Law 106-
        387; 114 Stat. 1549).
            (3) Sections 201, 202, 204(a), 204(d), 257, and 259 of the 
        Agricultural Risk Protection Act of 2000 (Public Law 106-224; 7 
        U.S.C. 1421 note).
            (4) Sections 802, 803(a), 804, and 805 of the Agriculture, 
        Rural Development, Food and Drug Administration, and Related 
        Agencies Appropriations Act, 2000 (Public Law 106-78; 113 Stat. 
        1135).
            (5) The livestock indemnity program under the heading 
        ``Commodity Credit Corporation Fund'' in chapter 1 of title I of 
        the 1999 Emergency Supplemental Appropriations Act (Public 106-
        31; 113 Stat. 59).
            (6) Section 1111(a) of the Agriculture, Rural Development, 
        Food and Drug Administration, and Related Agencies 
        Appropriations Act, 1999 (as contained in section 101(a) of 
        division A of Public Law 105-277; 112 Stat. 2681-44).

SEC. 1618. <<NOTE: 7 USC 8001.>>  PRODUCER RETENTION OF ERRONEOUSLY PAID 
            LOAN DEFICIENCY PAYMENTS AND MARKETING LOAN GAINS.

    Notwithstanding any other provision of law, the Secretary and the 
Commodity Credit Corporation shall not require producers in Erie County, 
Pennsylvania, to repay loan deficiency payments and marketing loan gains 
erroneously paid or determined to have been earned by the Commodity 
Credit Corporation for certain 1998 and 1999 crops under subtitle C of 
title I of the Federal Agriculture Improvement and Reform Act of 1996 (7 
U.S.C. 7231 et seq.). In the case of a producer who has already made the 
repayment on or before the date of the enactment of this Act, the 
Commodity Credit Corporation shall reimburse the producer for the full 
amount of the repayment.

                         TITLE II--CONSERVATION

                    Subtitle A--Conservation Security

SEC. 2001. CONSERVATION SECURITY PROGRAM.

    (a) In General.--Subtitle D of title XII of the Food Security Act of 
1985 (16 U.S.C. 3830 et seq.) is amended by inserting after chapter 1 
the following:

       ``CHAPTER 2--CONSERVATION SECURITY AND FARMLAND PROTECTION

              ``Subchapter A--Conservation Security Program

``SEC. 1238. <<NOTE: 16 USC 3838.>>  DEFINITIONS.

    ``In this subchapter:
            ``(1) Base payment.--The term `base payment' means an amount 
        that is--
                    ``(A) determined in accordance with the rate 
                described in section 1238C(b)(1)(A); and

[[Page 116 STAT. 224]]

                    ``(B) paid to a producer under a conservation 
                security contract in accordance with clause (i) of 
                subparagraph (C), (D), or (E) of section 1238C(b)(1), as 
                appropriate.
            ``(2) Beginning farmer or rancher.--The term `beginning 
        farmer or rancher' has the meaning given the term under section 
        343(a) of the Consolidated Farm and Rural Development Act (7 
        U.S.C. 1991(a)).
            ``(3) Conservation practice.--The term `conservation 
        practice' means a conservation farming practice described in 
        section 1238A(d)(4) that--
                    ``(A) requires planning, implementation, management, 
                and maintenance; and
                    ``(B) promotes 1 or more of the purposes described 
                in section 1238A(a).
            ``(4) Conservation security contract.--The term 
        `conservation security contract' means a contract described in 
        section 1238A(e).
            ``(5) Conservation security plan.--The term `conservation 
        security plan' means a plan described in section 1238A(c).
            ``(6) Conservation security program.--The term `conservation 
        security program' means the program established under section 
        1238A(a).
            ``(7) Enhanced payment.--The term `enhanced payment' means 
        the amount paid to a producer under a conservation security 
        contract that is equal to the amount described in section 
        1238C(b)(1)(C)(iii).
            ``(8) Nondegradation standard.--The term `nondegradation 
        standard' means the level of measures required to adequately 
        protect, and prevent degradation of, 1 or more natural 
        resources, as determined by the Secretary in accordance with the 
        quality criteria described in handbooks of the Natural Resources 
        Conservation Service.
            ``(9) Producer.--
                    ``(A) In general.--The term `producer' means an 
                owner, operator, landlord, tenant, or sharecropper 
                that--
                          ``(i) shares in the risk of producing any crop 
                      or livestock; and
                          ``(ii) is entitled to share in the crop or 
                      livestock available for marketing from a farm (or 
                      would have shared had the crop or livestock been 
                      produced).
                    ``(B) Hybrid seed growers.--In determining whether a 
                grower of hybrid seed is a producer, the Secretary shall 
                not take into consideration the existence of a hybrid 
                seed contract.
            ``(10) Resource-conserving crop rotation.--The term 
        `resource-conserving crop rotation' means a crop rotation that--
                    ``(A) includes at least 1 resource-conserving crop 
                (as defined by the Secretary);
                    ``(B) reduces erosion;
                    ``(C) improves soil fertility and tilth;
                    ``(D) interrupts pest cycles; and
                    ``(E) in applicable areas, reduces depletion of soil 
                moisture (or otherwise reduces the need for irrigation).
            ``(11) Resource management system.--The term `resource 
        management system' means a system of conservation practices and 
        management relating to land or water use that is designed to 
        prevent resource degradation and permit sustained use of

[[Page 116 STAT. 225]]

        land, water, and other natural resources, as defined in 
        accordance with the technical guide of the Natural Resources 
        Conservation Service.
            ``(12) Secretary.--The term `Secretary' means the Secretary 
        of Agriculture, acting through the Chief of the Natural 
        Resources Conservation Service.
            ``(13) Tier i conservation security contract.--The term 
        `Tier I conservation security contract' means a contract 
        described in section 1238A(d)(5)(A).
            ``(14) Tier ii conservation security contract.--The term 
        `Tier II conservation security contract' means a contract 
        described in section 1238A(d)(5)(B).
            ``(15) Tier iii conservation security contract.--The term 
        `Tier III conservation security contract' means a contract 
        described in section 1238A(d)(5)(C).

``SEC. 1238A. <<NOTE: 16 USC 3838a.>>  CONSERVATION SECURITY PROGRAM.

    ``(a) In General.--The Secretary shall establish and, for each of 
fiscal years 2003 through 2007, carry out a conservation security 
program to assist producers of agricultural operations in promoting, as 
is applicable with respect to land to be enrolled in the program, 
conservation and improvement of the quality of soil, water, air, energy, 
plant and animal life, and any other conservation purposes, as 
determined by the Secretary.
    ``(b) Eligibility.--
            ``(1) Eligible producers.--To be eligible to participate in 
        the conservation security program (other than to receive 
        technical assistance under section 1238C(g) for the development 
        of conservation security contracts), a producer shall--
                    ``(A) develop and submit to the Secretary, and 
                obtain the approval of the Secretary of, a conservation 
                security plan that meets the requirements of subsection 
                (c)(1); and
                    ``(B) enter into a conservation security contract 
                with the Secretary to carry out the conservation 
                security plan.
            ``(2) Eligible land.--Except as provided in paragraph (3), 
        private agricultural land (including cropland, grassland, 
        prairie land, improved pasture land, and rangeland), land under 
        the jurisdiction of an Indian tribe (as defined by the 
        Secretary), and forested land that is an incidental part of an 
        agricultural operation shall be eligible for enrollment in the 
        conservation security program.
            ``(3) Exclusions.--
                    ``(A) Conservation reserve program.--Land enrolled 
                in the conservation reserve program under subchapter B 
                of chapter 1 shall not be eligible for enrollment in the 
                conservation security program.
                    ``(B) Wetlands reserve program.--Land enrolled in 
                the wetlands reserve program established under 
                subchapter C of chapter 1 shall not be eligible for 
                enrollment in the conservation security program.
                    ``(C) Grassland reserve program.--Land enrolled in 
                the grassland reserve program established under 
                subchapter C of chapter 2 shall not be eligible for 
                enrollment in the conservation security program.
                    ``(D) Conversion to cropland.--Land that is used for 
                crop production after the date of enactment of this 
                subchapter that had not been planted, considered to be

[[Page 116 STAT. 226]]

                planted, or devoted to crop production for at least 4 of 
                the 6 years preceding that date (except for land 
                enrolled in the conservation reserve program under 
                subchapter B of chapter 1) or that has been maintained 
                using long-term crop rotation practices, as determined 
                by the Secretary, shall not be the basis for any payment 
                under the conservation security program.
            ``(4) Economic uses.--The Secretary shall permit a producer 
        to implement, with respect to all eligible land covered by a 
        conservation security plan, economic uses that--
                    ``(A) maintain the agricultural nature of the land; 
                and
                    ``(B) are consistent with the natural resource and 
                conservation objectives of the conservation security 
                program.

    ``(c) Conservation Security Plans.--
            ``(1) In general.--A conservation security plan shall--
                    ``(A) identify the designated land and resources to 
                be conserved under the conservation security plan;
                    ``(B) describe the tier of conservation security 
                contract, and the particular conservation practices to 
                be implemented, maintained, or improved, in accordance 
                with subsection (d) on the land covered by the 
                conservation security contract for the specified term; 
                and
                    ``(C) contain a schedule for the implementation, 
                maintenance, or improvement of the conservation 
                practices described in the conservation security plan 
                during the term of the conservation security contract.
            ``(2) Resource planning.--The Secretary may assist producers 
        that enter into conservation security contracts in developing a 
        comprehensive, long-term strategy for improving and maintaining 
        all natural resources of the agricultural operation of the 
        producer.

    ``(d) Conservation Contracts and Practices.--
            ``(1) In general.--
                    ``(A) Establishment of tiers.--The Secretary shall 
                establish, and offer to eligible producers, 3 tiers of 
                conservation contracts under which a payment under this 
                subchapter may be received.
                    ``(B) Eligible conservation practices.--
                          ``(i) In general.--The Secretary shall make 
                      eligible for payment under a conservation security 
                      contract land management, vegetative, and 
                      structural practices.
                          ``(ii) Determination.--In determining the 
                      eligibility of a practice described in clause (i), 
                      the Secretary shall require, to the maximum extent 
                      practicable, that the lowest cost alternatives be 
                      used to fulfill the purposes of the conservation 
                      security plan, as determined by the Secretary.
            ``(2) On-farm research and demonstration or pilot testing.--
        With respect to land enrolled in the conservation security 
        program, the Secretary may approve a conservation security plan 
        that includes--
                    ``(A) on-farm conservation research and 
                demonstration activities; and
                    ``(B) pilot testing of new technologies or 
                innovative conservation practices.

[[Page 116 STAT. 227]]

            ``(3) Use of handbook and guides; state and local 
        conservation concerns.--
                    ``(A) Use of handbook and guides.--In determining 
                eligible conservation practices and the criteria for 
                implementing or maintaining the conservation practices 
                under the conservation security program, the Secretary 
                shall use the National Handbook of Conservation 
                Practices of the Natural Resources Conservation Service.
                    ``(B) State and local conservation priorities.--The 
                conservation priorities of a State or locality in which 
                an agricultural operation is situated shall be 
                determined by the State Conservationist, in consultation 
                with--
                          ``(i) the State technical committee 
                      established under subtitle G; and
                          ``(ii) local agricultural producers and 
                      conservation working groups.
            ``(4) Conservation practices.--Conservation practices that 
        may be implemented by a producer under a conservation security 
        contract (as appropriate for the agricultural operation of a 
        producer) include--
                    ``(A) nutrient management;
                    ``(B) integrated pest management;
                    ``(C) water conservation (including through 
                irrigation) and water quality management;
                    ``(D) grazing, pasture, and rangeland management;
                    ``(E) soil conservation, quality, and residue 
                management;
                    ``(F) invasive species management;
                    ``(G) fish and wildlife habitat conservation, 
                restoration, and management;
                    ``(H) air quality management;
                    ``(I) energy conservation measures;
                    ``(J) biological resource conservation and 
                regeneration;
                    ``(K) contour farming;
                    ``(L) strip cropping;
                    ``(M) cover cropping;
                    ``(N) controlled rotational grazing;
                    ``(O) resource-conserving crop rotation;
                    ``(P) conversion of portions of cropland from a 
                soil-depleting use to a soil-conserving use, including 
                production of cover crops;
                    ``(Q) partial field conservation practices;
                    ``(R) native grassland and prairie protection and 
                restoration; and
                    ``(S) any other conservation practices that the 
                Secretary determines to be appropriate and comparable to 
                other conservation practices described in this 
                paragraph.
            ``(5) Tiers.--Subject to paragraph (6), to carry out this 
        subsection, the Secretary shall establish the following 3 tiers 
        of conservation contracts:
                    ``(A) Tier i conservation security contracts.--A 
                conservation security plan for land enrolled under a 
                Tier I conservation security contract shall--
                          ``(i) be for a period of 5 years; and
                          ``(ii) include conservation practices 
                      appropriate for the agricultural operation, that, 
                      at a minimum (as determined by the Secretary)--

[[Page 116 STAT. 228]]

                                    ``(I) address at least 1 significant 
                                resource of concern for the enrolled 
                                portion of the agricultural operation at 
                                a level that meets the appropriate 
                                nondegradation standard; and
                                    ``(II) cover active management of 
                                conservation practices that are 
                                implemented or maintained under the 
                                conservation security contract.
                    ``(B) Tier ii conservation security contracts.--A 
                conservation security plan for land enrolled under a 
                Tier II conservation security contract shall--
                          ``(i) be for a period of not less than 5 nor 
                      more than 10 years, as determined by the producer;
                          ``(ii) include conservation practices 
                      appropriate for the agricultural operation, that, 
                      at a minimum--
                                    ``(I) address at least 1 significant 
                                resource of concern for the entire 
                                agricultural operation, as determined by 
                                the Secretary, at a level that meets the 
                                appropriate nondegradation standard; and
                                    ``(II) cover active management of 
                                conservation practices that are 
                                implemented or maintained under the 
                                conservation security contract.
                    ``(C) Tier iii conservation security contracts.--A 
                conservation security plan for land enrolled under a 
                Tier III conservation security contract shall--
                          ``(i) be for a period of not less than 5 nor 
                      more than 10 years, as determined by the producer; 
                      and
                          ``(ii) include conservation practices 
                      appropriate for the agricultural operation that, 
                      at a minimum--
                                    ``(I) apply a resource management 
                                system that meets the appropriate 
                                nondegradation standard for all 
                                resources of concern of the entire 
                                agricultural operation, as determined by 
                                the Secretary; and
                                    ``(II) cover active management of 
                                conservation practices that are 
                                implemented or maintained under the 
                                conservation security contract.
            ``(6) Minimum requirements.--The minimum requirements for 
        each tier of conservation contracts implemented under paragraph 
        (5) shall be determined and approved by the Secretary.

    ``(e) Conservation Security Contracts.--
            ``(1) In general.--On approval of a conservation security 
        plan of a producer, the Secretary shall enter into a 
        conservation security contract with the producer to enroll the 
        land covered by the conservation security plan in the 
        conservation security program.
            ``(2) Modification.--
                    ``(A) Optional modifications.--A producer may apply 
                to the Secretary for a modification of the conservation 
                security contract of the producer that is consistent 
                with the purposes of the conservation security program.
                    ``(B) Other modifications.--
                          ``(i) In general.--The Secretary may, in 
                      writing, require a producer to modify a 
                      conservation security contract before the 
                      expiration of the conservation security contract 
                      if the Secretary determines that a change made to 
                      the type, size, management, or other aspect of the 
                      agricultural operation of the producer would,

[[Page 116 STAT. 229]]

                      without the modification of the contract, 
                      significantly interfere with achieving the 
                      purposes of the conservation security program.
                          ``(ii) Participation in other programs.--If 
                      appropriate payment reductions and other 
                      adjustments (as determined by the Secretary) are 
                      made to the conservation security contract of a 
                      producer, the producer may--
                                    ``(I) simultaneously participate 
                                in--
                                            ``(aa) the conservation 
                                        security program;
                                            ``(bb) the conservation 
                                        reserve program under subchapter 
                                        B of chapter 1; and
                                            ``(cc) the wetlands reserve 
                                        program under subchapter C of 
                                        chapter 1; and
                                    ``(II) may remove land enrolled in 
                                the conservation security program for 
                                enrollment in a program described in 
                                item (bb) or (cc) of subclause (I).
            ``(3) Termination.--
                    ``(A) Optional termination.--A producer may 
                terminate a conservation security contract and retain 
                payments received under the conservation security 
                contract, if--
                          ``(i) the producer is in full compliance with 
                      the terms and conditions (including any 
                      maintenance requirements) of the conservation 
                      security contract as of the date of the 
                      termination; and
                          ``(ii) the Secretary determines that 
                      termination of the contract would not defeat the 
                      purposes of the conservation security plan of the 
                      producer.
                    ``(B) Other termination.--A producer that is 
                required to modify a conservation security contract 
                under paragraph (2)(B)(i) may, in lieu of modifying the 
                contract--
                          ``(i) terminate the conservation security 
                      contract; and
                          ``(ii) retain payments received under the 
                      conservation security contract, if the producer 
                      has fully complied with the terms and conditions 
                      of the conservation security contract before 
                      termination of the contract, as determined by the 
                      Secretary.
            ``(4) Renewal.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), at the option of a producer, the 
                conservation security contract of the producer may be 
                renewed for an additional period of not less than 5 nor 
                more than 10 years.
                    ``(B) Tier i renewals.--In the case of a Tier I 
                conservation security contract of a producer, the 
                producer may renew the contract only if the producer 
                agrees--
                          ``(i) to apply additional conservation 
                      practices that meet the nondegradation standard on 
                      land already enrolled in the conservation security 
                      program; or
                          ``(ii) to adopt new conservation practices 
                      with respect to another portion of the 
                      agricultural operation that address resource 
                      concerns and meet the nondegradation standard 
                      under the terms of the Tier I conservation 
                      security contract.

    ``(f) Noncompliance Due to Circumstances Beyond the Control of 
Producers.--The Secretary shall include in the conservation security 
contract a provision, and may permit modification

[[Page 116 STAT. 230]]

of a conservation security contract under subsection (e)(1), to ensure 
that a producer shall not be considered in violation of a conservation 
security contract for failure to comply with the conservation security 
contract due to circumstances beyond the control of the producer, 
including a disaster or related condition, as determined by the 
Secretary.

``SEC. 1238B. <<NOTE: 16 USC 3838b.>>  DUTIES OF PRODUCERS.

    ``Under a conservation security contract, a producer shall agree, 
during the term of the conservation security contract--
            ``(1) to implement the applicable conservation security plan 
        approved by the Secretary;
            ``(2) to maintain, and make available to the Secretary at 
        such times as the Secretary may request, appropriate records 
        showing the effective and timely implementation of the 
        conservation security plan;
            ``(3) not to engage in any activity that would interfere 
        with the purposes of the conservation security program; and
            ``(4) on the violation of a term or condition of the 
        conservation security contract--
                    ``(A) if the Secretary determines that the violation 
                warrants termination of the conservation security 
                contract--
                          ``(i) to forfeit all rights to receive 
                      payments under the conservation security contract; 
                      and
                          ``(ii) to refund to the Secretary all or a 
                      portion of the payments received by the producer 
                      under the conservation security contract, 
                      including any advance payments and interest on the 
                      payments, as determined by the Secretary; or
                    ``(B) if the Secretary determines that the violation 
                does not warrant termination of the conservation 
                security contract, to refund to the Secretary, or accept 
                adjustments to, the payments provided to the producer, 
                as the Secretary determines to be appropriate.

``SEC. 1238C. <<NOTE: 16 USC 3838c.>> DUTIES OF THE SECRETARY.

    ``(a) Timing of Payments.--The Secretary shall make payments under a 
conservation security contract as soon as practicable after October 1 of 
each fiscal year.
    ``(b) Annual Payments.--
            ``(1) Criteria for determining amount of payments.--
                    ``(A) Base payment.--A base payment under this 
                paragraph shall be (as determined by the Secretary)--
                          ``(i) the average national per-acre rental 
                      rate for a specific land use during the 2001 crop 
                      year; or
                          ``(ii) another appropriate rate for the 2001 
                      crop year that ensures regional equity.
                    ``(B) Payments.--A payment for a conservation 
                practice under this paragraph shall be determined in 
                accordance with subparagraphs (C) through (E).
                    ``(C) Tier i conservation security contracts.--The 
                payment for a Tier I conservation security contract 
                shall consist of the total of the following amounts:
                          ``(i) An amount equal to 5 percent of the 
                      applicable base payment for land covered by the 
                      contract.
                          ``(ii) An amount that does not exceed 75 
                      percent (or, in the case of a beginning farmer or 
                      rancher, 90 percent) of the average county costs 
                      of practices

[[Page 116 STAT. 231]]

                      for the 2001 crop year that are included in the 
                      conservation security contract, as determined by 
                      the Secretary, including the costs of--
                                    ``(I) the adoption of new 
                                management, vegetative, and land-based 
                                structural practices;
                                    ``(II) the maintenance of existing 
                                land management and vegetative 
                                practices; and
                                    ``(III) the maintenance of existing 
                                land-based structural practices that are 
                                approved by the Secretary but not 
                                already covered by a Federal or State 
                                maintenance requirement.
                          ``(iii) An enhanced payment that is determined 
                      by the Secretary in a manner that ensures equity 
                      across regions of the United States, if the 
                      producer--
                                    ``(I) implements or maintains 
                                multiple conservation practices that 
                                exceed minimum requirements for the 
                                applicable tier of participation 
                                (including practices that involve a 
                                change in land use, such as resource-
                                conserving crop rotation, managed 
                                rotational grazing, or conservation 
                                buffer practices);
                                    ``(II) addresses local conservation 
                                priorities in addition to resources of 
                                concern for the agricultural operation;
                                    ``(III) participates in an on-farm 
                                conservation research, demonstration, or 
                                pilot project;
                                    ``(IV) participates in a watershed 
                                or regional resource conservation plan 
                                that involves at least 75 percent of 
                                producers in a targeted area; or
                                    ``(V) carries out assessment and 
                                evaluation activities relating to 
                                practices included in a conservation 
                                security plan.
                    ``(D) Tier ii conservation security contracts.--The 
                payment for a Tier II conservation security contract 
                shall consist of the total of the following amounts:
                          ``(i) An amount equal to 10 percent of the 
                      applicable base payment for land covered by the 
                      conservation security contract.
                          ``(ii) An amount that does not exceed 75 
                      percent (or, in the case of a beginning farmer or 
                      rancher, 90 percent) of the average county cost of 
                      adopting or maintaining practices for the 2001 
                      crop year that are included in the conservation 
                      security contract, as described in subparagraph 
                      (C)(ii).
                          ``(iii) An enhanced payment that is determined 
                      in accordance with subparagraph (C)(iii).
                    ``(E) Tier iii conservation security contracts.--The 
                payment for a Tier III conservation security contract 
                shall consist of the total of the following amounts:
                          ``(i) An amount equal to 15 percent of the 
                      base payment for land covered by the conservation 
                      security contract.
                          ``(ii) An amount that does not exceed 75 
                      percent (or, in the case of a beginning farmer or 
                      rancher, 90 percent) of the average county cost of 
                      adopting or maintaining practices for the 2001 
                      crop year that

[[Page 116 STAT. 232]]

                      are included in the conservation security 
                      contract, as described in subparagraph (C)(ii).
                          ``(iii) An enhanced payment that is determined 
                      in accordance with subparagraph (C)(iii).
            ``(2) Limitation on payments.--
                    ``(A) In general.--Subject to paragraphs (1) and 
                (3), the Secretary shall make an annual payment, 
                directly or indirectly, to an individual or entity 
                covered by a conservation security contract in an amount 
                not to exceed--
                          ``(i) in the case of a Tier I conservation 
                      security contract, $20,000;
                          ``(ii) in the case of a Tier II conservation 
                      security contract, $35,000; or
                          ``(iii) in the case of a Tier III conservation 
                      security contract, $45,000.
                    ``(B) Limitation on base payments.--In applying the 
                payment limitation under each of clauses (i), (ii), and 
                (iii) of subparagraph (A), an individual or entity may 
                not receive, directly or indirectly, payments described 
                in clause (i) of paragraph (1)(C), (1)(D), or (1)(E), as 
                appropriate, in an amount that exceeds--
                          ``(i) in the case of Tier I contracts, 25 
                      percent of the applicable payment limitation; or
                          ``(ii) in the case of Tier II contracts and 
                      Tier III contracts, 30 percent of the applicable 
                      payment limitation.
                    ``(C) Other usda payments.--A producer shall not 
                receive payments under the conservation security program 
                and any other conservation program administered by the 
                Secretary for the same practices on the same land.
                    ``(D) Commensurate share.--To be eligible to receive 
                a payment under this subchapter, an individual or entity 
                shall make contributions (including contributions of 
                land, labor, management, equipment, or capital) to the 
                operation of the farm that are at least commensurate 
                with the share of the proceeds of the operation of the 
                individual or entity.
            ``(3) Equipment or facilities.--A payment to a producer 
        under this subchapter shall not be provided for--
                    ``(A) construction or maintenance of animal waste 
                storage or treatment facilities or associated waste 
                transport or transfer devices for animal feeding 
                operations; or
                    ``(B) the purchase or maintenance of equipment or a 
                non-land based structure that is not integral to a land-
                based practice, as determined by the Secretary.

    ``(c) Minimum Practice Requirement.--In determining a payment under 
subsection (b) for a producer that receives a payment under another 
program administered by the Secretary that is contingent on complying 
with requirements under subtitle B or C (relating to the use of highly 
erodible land or wetland), a payment under this subchapter on land 
subject to those requirements shall be for practices only to the extent 
that the practices exceed minimum requirements for the producer under 
those subtitles, as determined by the Secretary.
    ``(d) Regulations.--The Secretary shall promulgate regulations 
that--

[[Page 116 STAT. 233]]

            ``(1) provide for adequate safeguards to protect the 
        interests of tenants and sharecroppers, including provision for 
        sharing payments, on a fair and equitable basis; and
            ``(2) prescribe such other rules as the Secretary determines 
        to be necessary to ensure a fair and reasonable application of 
        the limitations established under subsection (b).

    ``(e) Transfer or Change of Interest in Land Subject to Conservation 
Security Contract.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        transfer, or change in the interest, of a producer in land 
        subject to a conservation security contract shall result in the 
        termination of the conservation security contract.
            ``(2) Transfer of duties and <<NOTE: Deadline.>> rights.--
        Paragraph (1) shall not apply if, not later than 60 days after 
        the date of the transfer or change in the interest in land, the 
        transferee of the land provides written notice to the Secretary 
        that all duties and rights under the conservation security 
        contract have been transferred to, and assumed by, the 
        transferee.

    ``(f) Enrollment Procedure.--In entering into conservation security 
contracts with producers under this subchapter, the Secretary shall not 
use competitive bidding or any similar procedure.
    ``(g) Technical Assistance.--For each of fiscal years 2003 through 
2007, the Secretary shall provide technical assistance to producers for 
the development and implementation of conservation security contracts, 
in an amount not to exceed 15 percent of amounts expended for the fiscal 
year.''.
    (b) Regulations.-- <<NOTE: Deadline. 16 USC 3838 note.>> Not later 
than 270 days after the date of enactment of this Act, the Secretary of 
Agriculture shall promulgate regulations implementing the amendment made 
by subsection (a).

SEC. 2002. CONSERVATION COMPLIANCE.

    (a) Highly Erodible Land.--Section 1211 of the Food Security Act of 
1985 (16 U.S.C. 3811) is amended--
            (1) by striking the section heading and all that follows 
        through ``Except as provided in'' and inserting the following:

``SEC. 1211. PROGRAM INELIGIBILITY.

    ``(a) In General.--Except as provided in''; and
            (2) by adding at the end the following:

    ``(b) Highly Erodible Land.--The Secretary shall have, and shall not 
delegate to any private person or entity, authority to determine whether 
a person has complied with this subtitle.''.
    (b) Wetland.--Section 1221 of the Food Security Act of 1985 (16 
U.S.C. 3821) is amended by adding at the end the following:
    ``(e) Wetland.--The Secretary shall have, and shall not delegate to 
any private person or entity, authority to determine whether a person 
has complied with this subtitle.''.

SEC. 2003. PARTNERSHIPS AND COOPERATION.

    Section 1243 of the Food Security Act of 1985 (16 U.S.C. 3843) is 
amended by adding at the end the following:
    ``(f) Partnerships and Cooperation.--
            ``(1) In general.--In carrying out any program under 
        subtitle D, the Secretary may use resources provided under that 
        subtitle to enter into stewardship agreements with State and 
        local agencies, Indian tribes, and nongovernmental organizations 
        and to designate special projects, as recommended by the State 
        Conservationist, after consultation with the State

[[Page 116 STAT. 234]]

        technical committee, to enhance technical and financial 
        assistance provided to owners, operators, and producers to 
        address natural resource issues related to agricultural 
        production.
            ``(2) Criteria for special projects.--The purposes of 
        special projects carried out under this subsection shall be to 
        encourage--
                    ``(A) producers to cooperate in the installation and 
                maintenance of conservation practices that affect 
                multiple agricultural operations;
                    ``(B) the sharing of information and technical and 
                financial resources among producers;
                    ``(C) cumulative conservation benefits in geographic 
                areas; and
                    ``(D) the development and demonstration of 
                innovative conservation methods.
            ``(3) Incentives.--To realize the purposes of the special 
        projects under paragraph (1), the Secretary may provide special 
        incentives to owners, operators, and producers participating in 
        the special projects to encourage partnerships and enrollments 
        of optimal conservation value.
            ``(4) Flexibility.--
                    ``(A) In general.--The Secretary may enter into 
                stewardship agreements with States (including State 
                agencies and units of local government), Indian tribes, 
                and nongovernmental organizations that have a history of 
                working with agricultural producers to allow greater 
                flexibility to adjust the application of eligibility 
                criteria, approved practices, innovative conservation 
                practices, and other elements of the programs under this 
                title to better reflect unique local circumstances and 
                purposes in a manner that is consistent with--
                          ``(i) conservation enhancement and long-term 
                      productivity of the natural resource base; and
                          ``(ii) the purposes and requirements of this 
                      title.
                    ``(B) Plan.--Each party to a stewardship agreement 
                under subparagraph (A) shall submit to the Secretary, 
                for approval by the Secretary, a special project area 
                plan for each program to be carried out by the party 
                that includes--
                          ``(i) a description of the requested resources 
                      and adjustments to program implementation 
                      (including a description of how those adjustments 
                      will accelerate the achievement of conservation 
                      benefits);
                          ``(ii) an analysis of the contribution those 
                      adjustments will make to the effectiveness of 
                      programs in achieving the purposes of the special 
                      project;
                          ``(iii) a timetable for reevaluating the need 
                      for or performance of the proposed adjustments;
                          ``(iv) a description of non-Federal programs 
                      and resources that will contribute to achieving 
                      the purposes of the special project; and
                          ``(v) a plan for the evaluation of progress 
                      toward the purposes of the special project.
            ``(5) Funding.--
                    ``(A) In general.--In addition to resources from 
                programs under subtitle D, subject to subparagraph (B), 
                the Secretary shall use not more than 5 percent of the 
                funds

[[Page 116 STAT. 235]]

                made available for each fiscal year under section 
                1241(a) to carry out activities that are authorized 
                under conservation programs under subtitle D.
                    ``(B) Unused funding.--Any funds made available for 
                a fiscal year under subparagraph (A) that are not 
                obligated by April 1 of the fiscal year may be used to 
                carry out other activities under conservation programs 
                under subtitle D during the fiscal year in which the 
                funding becomes available.''.

SEC. 2004. ADMINISTRATIVE REQUIREMENTS FOR CONSERVATION PROGRAMS.

    (a) In General.--Subtitle E of title XII of the Food Security Act of 
1985 (16 U.S.C. 3841 et seq.) is amended by adding at the end the 
following:

``SEC. 1244. <<NOTE: 16 USC 3844.>>  ADMINISTRATIVE REQUIREMENTS FOR 
            CONSERVATION PROGRAMS.

    ``(a) Beginning Farmers and Ranchers and Indian Tribes.--In carrying 
out any conservation program administered by the Secretary, the 
Secretary may provide to beginning farmers and ranchers and Indian 
tribes (as those terms are defined in section 1238) and limited resource 
agricultural producers incentives to participate in the conservation 
program to--
            ``(1) foster new farming and ranching opportunities; and
            ``(2) enhance environmental stewardship over the long term.

    ``(b) Privacy of Personal Information Relating to Natural Resources 
Conservation Programs.--
            ``(1) Information received for technical and financial 
        assistance.--
                    ``(A) In general.--In accordance with section 
                552(b)(3) of title 5, United States Code, except as 
                provided in subparagraph (C) and paragraph (2), 
                information described in subparagraph (B)--
                          ``(i) shall not be considered to be public 
                      information; and
                          ``(ii) shall not be released to any person or 
                      Federal, State, local agency or Indian tribe (as 
                      defined by the Secretary) outside the Department 
                      of Agriculture.
                    ``(B) Information.--The information referred to in 
                subparagraph (A) is information--
                          ``(i) provided to the Secretary or a 
                      contractor of the Secretary (including information 
                      provided under subtitle D) for the purpose of 
                      providing technical or financial assistance to an 
                      owner, operator, or producer with respect to any 
                      natural resources conservation program 
                      administered by the Natural Resources Conservation 
                      Service or the Farm Service Agency; and
                          ``(ii) that is proprietary (within the meaning 
                      of section 552(b)(4) of title 5, United States 
                      Code) to the agricultural operation or land that 
                      is a part of an agricultural operation of the 
                      owner, operator, or producer.
                    ``(C) Exception.--Nothing in this section affects 
                the availability of payment information (including 
                payment amounts and the names and addresses of 
                recipients of payments) under section 552 of title 5, 
                United States Code.
            ``(2) Exceptions.--

[[Page 116 STAT. 236]]

                    ``(A) Release and disclosure for enforcement.--The 
                Secretary may release or disclose to the Attorney 
                General information covered by paragraph (1) to the 
                extent necessary to enforce the natural resources 
                conservation programs referred to in paragraph 
                (1)(B)(i).
                    ``(B) Disclosure to cooperating persons and 
                agencies.--
                          ``(i) In general.--The Secretary may release 
                      or disclose information covered by paragraph (1) 
                      to a person or Federal, State, local, or tribal 
                      agency working in cooperation with the Secretary 
                      in providing technical and financial assistance 
                      described in paragraph (1)(B)(i) or collecting 
                      information from data gathering sites.
                          ``(ii) Use of information.--The person or 
                      Federal, State, local, or tribal agency that 
                      receives information described in clause (i) may 
                      release the information only for the purpose of 
                      assisting the Secretary--
                                    ``(I) in providing the requested 
                                technical or financial assistance; or
                                    ``(II) in collecting information 
                                from data gathering sites.
                    ``(C) Statistical and aggregate information.--
                Information covered by paragraph (1) may be disclosed to 
                the public if the information has been transformed into 
                a statistical or aggregate form without naming any--
                          ``(i) individual owner, operator, or producer; 
                      or
                          ``(ii) specific data gathering site.
                    ``(D) Consent of owner, operator, or producer.--
                          ``(i) In general.--An owner, operator, or 
                      producer may consent to the disclosure of 
                      information described in paragraph (1).
                          ``(ii) Condition of other programs.--The 
                      participation of the owner, operator, or producer 
                      in, and the receipt of any benefit by the owner, 
                      operator, or producer under, this title or any 
                      other program administered by the Secretary may 
                      not be conditioned on the owner, operator, or 
                      producer providing consent under this paragraph.
            ``(3) Violations; penalties.--Section 1770(c) shall apply 
        with respect to the release of information collected in any 
        manner or for any purpose prohibited by this subsection.
            ``(4) Data collection, disclosure, and review.--Nothing in 
        this subsection--
                    ``(A) affects any procedure for data collection or 
                disclosure through the National Resources Inventory; or
                    ``(B) limits the authority of Congress or the 
                General Accounting Office to review information 
                collected or disclosed under this subsection.''.

    (b) National Resources Inventory.--Section 1770 of the Food Security 
Act of 1985 (7 U.S.C. 2276) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by striking ``or'' at the end;
                    (B) in paragraph (2), by striking the period and 
                inserting ``; or''; and
                    (C) by adding at the end the following:

[[Page 116 STAT. 237]]

            ``(3) in the case of information collected under the 
        authority described in subsection (d)(12), disclose the 
        information to any person or any Federal, State, local, or 
        tribal agency outside the Department of Agriculture, unless the 
        information has been converted into a statistical or aggregate 
        form that does not allow the identification of the person that 
        supplied particular information.''; and
            (2) in subsection (d)--
                    (A) in paragraph (9), by striking ``or'' at the end;
                    (B) in paragraph (11), by striking the period and 
                inserting ``; or''; and
                    (C) by adding at the end the following:
            ``(12) section 302 of the Rural Development Act of 1972 (7 
        U.S.C. 1010a) regarding the authority to collect data for the 
        National Resources Inventory.''.

SEC. 2005. <<NOTE: 16 USC 3801 note.>>  REFORM AND ASSESSMENT OF 
            CONSERVATION PROGRAMS.

    (a) In General.--The Secretary of Agriculture shall develop a plan 
to coordinate land retirement and agricultural working land conservation 
programs that are administered by the Secretary to achieve the goals 
of--
            (1) eliminating redundancy;
            (2) streamlining program delivery; and
            (3) improving services provided to agricultural producers 
        (including the reevaluation of the provision of technical 
        assistance).

    (b) Report.--Not <<NOTE: Deadline.>> later than December 31, 2005, 
the Secretary of Agriculture shall submit to the Committee on 
Agriculture of the House of Representatives and the Committee on 
Agriculture, Nutrition, and Forestry of the Senate, a report that 
describes--
            (1) the plan developed under subsection (a); and
            (2) the means by which the Secretary intends to achieve the 
        goals described in subsection (a).

SEC. 2006. CONFORMING AMENDMENTS.

    (a) Chapter 1 of subtitle D of title XII of the Food Security Act of 
1985 (16 U.S.C. 3830 et seq.) is amended by striking the chapter heading 
and inserting the following:

     ``CHAPTER 1--COMPREHENSIVE CONSERVATION ENHANCEMENT PROGRAM''.

    (b) Section 1230 of the Food Security Act of 1985 (16 U.S.C. 3830) 
is amended--
            (1) in the section heading, by striking ``environmental 
        conservation acreage reserve program'' and inserting 
        ``comprehensive conservation enhancement program'';
            (2) in subsection (a)(1), by striking ``an environmental 
        conservation acreage reserve program'' and inserting ``a 
        comprehensive conservation enhancement program'';
            (3) by striking subsection (c); and
            (4) by striking ``ECARP'' each place it appears and 
        inserting ``CCEP''.

    (c) Section 1230A of the Food Security Act of 1985 (16 U.S.C. 3830a) 
is repealed.
    (d) Section 1243 of the Food Security Act of 1985 (16 U.S.C. 3843) 
is amended by striking the section heading and inserting the following:

[[Page 116 STAT. 238]]

``SEC. 1243. ADMINISTRATION OF CCEP.''.

                    Subtitle B--Conservation Reserve

SEC. 2101. CONSERVATION RESERVE PROGRAM.

    (a) In General.--Subchapter B of chapter 1 of subtitle D of title 
XII of the Food Security Act of 1985 (16 U.S.C. 3831 et seq.) is amended 
to read as follows:

                  ``Subchapter B--Conservation Reserve

``SEC. 1231. <<NOTE: 16 USC 3831.>>  CONSERVATION RESERVE.

    ``(a) In General.--Through the 2007 calendar year, the Secretary 
shall formulate and carry out a conservation reserve program under which 
land is enrolled through the use of contracts to assist owners and 
operators of land specified in subsection (b) to conserve and improve 
the soil, water, and wildlife resources of such land.
    ``(b) Eligible Land.--The Secretary may include in the program 
established under this subchapter--
            ``(1) highly erodible cropland that--
                    ``(A)(i) if permitted to remain untreated could 
                substantially reduce the agricultural production 
                capability for future generations; or
                    ``(ii) cannot be farmed in accordance with a plan 
                that complies with the requirements of subtitle B; and
                    ``(B) the Secretary determines had a cropping 
                history or was considered to be planted for 4 of the 6 
                years preceding the date of enactment of the Farm 
                Security and Rural Investment Act of 2002 (except for 
                land enrolled in the conservation reserve program as of 
                that date).
            ``(2) marginal pasture land converted to wetland or 
        established as wildlife habitat prior to November 28, 1990;
            ``(3) marginal pasture land to be devoted to appropriate 
        vegetation, including trees, in or near riparian areas, or 
        devoted to similar water quality purposes (including marginal 
        pastureland converted to wetland or established as wildlife 
        habitat);
            ``(4) cropland that is otherwise ineligible if the Secretary 
        determines that--
                    ``(A) if permitted to remain in agricultural 
                production, the land would--
                          ``(i) contribute to the degradation of soil, 
                      water, or air quality; or
                          ``(ii) pose an on-site or off-site 
                      environmental threat to soil, water, or air 
                      quality;
                    ``(B) the land is a--
                          ``(i) newly-created, permanent grass sod 
                      waterway; or
                          ``(ii) a contour grass sod strip established 
                      and maintained as part of an approved conservation 
                      plan;
                    ``(C) the land will be devoted to newly established 
                living snow fences, permanent wildlife habitat, 
                windbreaks, shelterbelts, or filterstrips devoted to 
                trees or shrubs; or
                    ``(D) the land poses an off-farm environmental 
                threat, or a threat of continued degradation of 
                productivity due to soil salinity, if permitted to 
                remain in production; and

[[Page 116 STAT. 239]]

                    ``(E) enrollment of the land would facilitate a net 
                savings in groundwater or surface water resources of the 
                agricultural operation of the producer;
            ``(5) the portion of land in a field not enrolled in the 
        conservation reserve in a case in which more than 50 percent of 
        the land in the field is enrolled as a buffer, if--
                    ``(A) the land is enrolled as part of the buffer; 
                and
                    ``(B) the remainder of the field is--
                          ``(i) infeasible to farm; and
                          ``(ii) enrolled at regular rental rates.

    ``(c) Planting Status of Certain Land.--For purposes of determining 
the eligibility of land to be placed in the conservation reserve 
established under this subchapter, land shall be considered to be 
planted to an agricultural commodity during a crop year if--
            ``(1) during the crop year, the land was devoted to a 
        conserving use; or
            ``(2)(A) during the crop year or during any of the 2 years 
        preceding the crop year, the land was enrolled in the water bank 
        program; and
            ``(B) the contract of the owner or operator of the cropland 
        expired or will expire in calendar year 2000, 2001, or 2002.

    ``(d) Maximum Enrollment.--The Secretary may maintain up to 
39,200,000 acres in the conservation reserve at any 1 time during the 
2002 through 2007 calendar years (including contracts extended by the 
Secretary pursuant to section 1437(c) of the Food, Agriculture, 
Conservation, and Trade Act of 1990 ( 16 U.S.C. 3831 note; Public Law 
101-624)).
    ``(e) Duration of Contract.--
            ``(1) In general.--For the purpose of carrying out this 
        subchapter, the Secretary shall enter into contracts of not less 
        than 10, nor more than 15, years.
            ``(2) Certain land.--
                    ``(A) In general.--In the case of land devoted to 
                hardwood trees, shelterbelts, windbreaks, or wildlife 
                corridors under a contract entered into under this 
                subchapter after October 1, 1990, and land devoted to 
                such uses under contracts modified under section 1235A, 
                the owner or operator of the land may, within the 
                limitations prescribed under this section, specify the 
                duration of the contract.
                    ``(B) Hardwood trees.--In the case of land that is 
                devoted to hardwood trees under a contract entered into 
                under this subchapter prior to October 1, 1990, the 
                Secretary may extend the contract for a term of not to 
                exceed 5 years, as agreed to by the owner or operator of 
                such land and the Secretary.
            ``(3) 1-year extension.--In the case of a contract described 
        in paragraph (1) the term of which expires during calendar year 
        2002, an owner or operator of land enrolled under the contract 
        may extend the contract for 1 additional year.

    ``(f) Conservation Priority Areas.--
            ``(1) Designation.--On application by the appropriate State 
        agency, the Secretary shall designate watershed areas of the 
        Chesapeake Bay Region (Pennsylvania, Maryland, and Virginia), 
        the Great Lakes Region, the Long Island Sound Region, and other 
        areas of special environmental sensitivity as conservation 
        priority areas.

[[Page 116 STAT. 240]]

            ``(2) Eligible watersheds.--Watersheds eligible for 
        designation under this subsection shall include areas with 
        actual and significant adverse water quality or habitat impacts 
        related to agricultural production activities.
            ``(3) Expiration.--Conservation priority area designation 
        under this subsection shall expire after 5 years, subject to 
        redesignation, except that the Secretary may withdraw a 
        watershed's designation--
                    ``(A) on application by the appropriate State 
                agency; or
                    ``(B) in the case of an area covered by this 
                subsection, if the Secretary finds that the area no 
                longer contains actual and significant adverse water 
                quality or habitat impacts related to agricultural 
                production activities.
            ``(4) Duty of secretary.--In carrying out this subsection, 
        the Secretary shall attempt to maximize water quality and 
        habitat benefits in the watersheds described in paragraph (1) by 
        promoting a significant level of enrollment of land within the 
        watersheds in the program under this subchapter by whatever 
        means the Secretary determines are appropriate and consistent 
        with the purposes of this subchapter.

    ``(g) Multi-Year Grasses and Legumes.--For purposes of this 
subchapter, alfalfa and other multi-year grasses and legumes in a 
rotation practice, approved by the Secretary, shall be considered 
agricultural commodities.
    ``(h) Pilot Program for Enrollment of Wetland and Buffer Acreage in 
Conservation Reserve.--
            ``(1) Program.--
                    ``(A) In general.--During the 2002 through 2007 
                calendar years, the Secretary shall carry out a program 
                in each State under which the Secretary shall include 
                eligible acreage described in paragraph (2) in the 
                program established under this subchapter.
                    ``(B) Participation among states.-The Secretary 
                shall ensure, to the maximum extent practicable, that 
                owners and operators in each State have an equitable 
                opportunity to participate in the pilot program 
                established under this subsection.
            ``(2) Eligible acreage.--
                    ``(A) In general.--Subject to subparagraphs (B) 
                through (D), an owner or operator may enroll in the 
                conservation reserve under this subsection--
                          ``(i) a wetland (including a converted wetland 
                      described in section 1222(b)(1)(A)) that was 
                      cropped during at least 3 of the immediately 
                      preceding 10 crop years; and
                          ``(ii) buffer acreage that--
                                    ``(I) is contiguous to the wetland 
                                described in clause (i);
                                    ``(II) is used to protect the 
                                wetland; and
                                    ``(III) is of such width as the 
                                Secretary determines is necessary to 
                                protect the wetland, taking into 
                                consideration and accommodating the 
                                farming practices (including the 
                                straightening of boundaries to 
                                accommodate machinery) used with respect 
                                to the cropland that surrounds the 
                                wetland.

[[Page 116 STAT. 241]]

                    ``(B) Exclusions.--An owner or operator may not 
                enroll in the conservation reserve under this 
                subsection--
                          ``(i) any wetland, or land on a floodplain, 
                      that is, or is adjacent to, a perennial riverine 
                      system wetland identified on the final national 
                      wetland inventory map of the Secretary of the 
                      Interior; or
                          ``(ii) in the case of an area that is not 
                      covered by the final national inventory map, any 
                      wetland, or land on a floodplain, that is adjacent 
                      to a perennial stream identified on a 1-24,000 
                      scale map of the United States Geological Survey.
                    ``(C) Program limitations.--
                          ``(i) In general.--The Secretary may enroll in 
                      the conservation reserve under this subsection not 
                      more than--
                                    ``(I) 100,000 acres in any 1 State 
                                referred to in paragraph (1); and
                                    ``(II) not more than a total of 
                                1,000,000 acres.
                          ``(ii) Relationship to program maximum.--
                      Subject to clause (iii), for the purposes of 
                      subsection (d), any acreage enrolled in the 
                      conservation reserve under this subsection shall 
                      be considered acres maintained in the conservation 
                      reserve.
                          ``(iii) Relationship to other enrolled 
                      acreage.--Acreage enrolled under this subsection 
                      shall not affect for any fiscal year the quantity 
                      of--
                                    ``(I) acreage enrolled to establish 
                                conservation buffers as part of the 
                                program announced on March 24, 1998 (63 
                                Fed. Reg. 14109); or
                                    ``(II) acreage enrolled into the 
                                conservation reserve enhancement program 
                                announced on May 27, 1998 (63 Fed. Reg. 
                                28965).
                          ``(iv) Review; potential increase in 
                      enrollment acreage.--Not <<NOTE: Deadline.>> later 
                      than 3 years after the date of enactment of this 
                      clause, the Secretary shall--
                                    ``(I) conduct a review of the 
                                program under this subsection with 
                                respect to each State that has enrolled 
                                land in the program; and
                                    ``(II) notwithstanding clause 
                                (i)(I), increase the number of acres 
                                that may be enrolled by a State under 
                                clause (i)(I) to not more than 150,000 
                                acres, as determined by the Secretary.
                    ``(D) Owner or operator limitations.--
                          ``(i) Wetland.--
                                    ``(I) In general.--The maximum size 
                                of any wetland described in subparagraph 
                                (A)(i) of an owner or operator enrolled 
                                in the conservation reserve under this 
                                subsection shall be 10 contiguous acres, 
                                of which not more than 5 acres shall be 
                                eligible for payment.
                                    ``(II) Coverage.--All acres 
                                described in subclause (I) (including 
                                acres that are ineligible for payment) 
                                shall be covered by the conservation 
                                contract.
                          ``(ii) Buffer acreage.--The maximum size of 
                      any buffer acreage described in subparagraph 
                      (A)(ii) of an

[[Page 116 STAT. 242]]

                      owner or operator enrolled in the conservation 
                      reserve under this subsection shall be the greater 
                      of--
                                    ``(I) 3 times the size of any 
                                wetland described in subparagraph (A)(i) 
                                to which the buffer acreage is 
                                contiguous; or
                                    ``(II) 150 feet on either side of 
                                the wetland.
                          ``(iii) Tracts.--The maximum size of any 
                      eligible acreage described in subparagraph (A) in 
                      a tract (as determined by the Secretary) of an 
                      owner or operator enrolled in the conservation 
                      reserve under this subsection shall be 40 acres.
            ``(3) Duties of owners and operators.--Under a contract 
        entered into under this subsection, during the term of the 
        contract, an owner or operator of a farm or ranch shall agree--
                    ``(A) to restore the hydrology of the wetland within 
                the eligible acreage to the maximum extent practicable, 
                as determined by the Secretary;
                    ``(B) to establish vegetative cover (which may 
                include emerging vegetation in water) on the eligible 
                acreage, as determined by the Secretary; and
                    ``(C) to carry out other duties described in section 
                1232.
            ``(4) Duties of the secretary.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), in return for a contract 
                entered into by an owner or operator under this 
                subsection, the Secretary shall make payments and 
                provide assistance to the owner or operator in 
                accordance with sections 1233 and 1234.
                    ``(B) Continuous signup.--The Secretary shall use 
                continuous signup under section 1234(c)(2)(B) to 
                determine the acceptability of contract offers and the 
                amount of rental payments under this subsection.
                    ``(C) Incentives.--The amounts payable to owners and 
                operators in the form of rental payments under contracts 
                entered into under this subsection shall reflect 
                incentives that are provided to owners and operators to 
                enroll filterstrips in the conservation reserve under 
                section 1234.

    ``(i) Eligibility for Consideration.--On the expiration of a 
contract entered into under this subchapter, the land subject to the 
contract shall be eligible to be considered for reenrollment in the 
conservation reserve.
    ``(j) Balance of Natural Resource Purposes.--In determining the 
acceptability of contract offers under this subchapter, the Secretary 
shall ensure, to the maximum extent practicable, an equitable balance 
among the conservation purposes of soil erosion, water quality, and 
wildlife habitat.

``SEC. 1232. DUTIES OF OWNERS AND OPERATORS.

    ``(a) In General.--Under <<NOTE: 16 USC 3832.>> the terms of a 
contract entered into under this subchapter, during the term of the 
contract, an owner or operator of a farm or ranch shall agree--
            ``(1) to implement a plan approved by the local conservation 
        district (or in an area not located within a conservation 
        district, a plan approved by the Secretary) for converting 
        eligible land normally devoted to the production of an 
        agricultural commodity on the farm or ranch to a less intensive 
        use (as defined by the Secretary), such as pasture, permanent 
        grass, legumes,

[[Page 116 STAT. 243]]

        forbs, shrubs, or trees, substantially in accordance with a 
        schedule outlined in the plan;
            ``(2) to place highly erodible cropland subject to the 
        contract in the conservation reserve established under this 
        subchapter;
            ``(3) not to use the land for agricultural purposes, except 
        as permitted by the Secretary;
            ``(4) to establish approved vegetative cover (which may 
        include emerging vegetation in water), water cover for the 
        enhancement of wildlife, or, where practicable, maintain 
        existing cover on the land, except that--
                    ``(A) the water cover shall not include ponds for 
                the purpose of watering livestock, irrigating crops, or 
                raising fish for commercial purposes; and
                    ``(B) the Secretary shall not terminate the contract 
                for failure to establish approved vegetative or water 
                cover on the land if--
                          ``(i) the failure to plant the cover was due 
                      to excessive rainfall or flooding;
                          ``(ii) the land subject to the contract that 
                      could practicably be planted to the cover is 
                      planted to the cover; and
                          ``(iii) the land on which the owner or 
                      operator was unable to plant the cover is planted 
                      to the cover after the wet conditions that 
                      prevented the planting subsides;
            ``(5) on a violation of a term or condition of the contract 
        at any time the owner or operator has control of the land--
                    ``(A) to forfeit all rights to receive rental 
                payments and cost sharing payments under the contract 
                and to refund to the Secretary any rental payments and 
                cost sharing payments received by the owner or operator 
                under the contract, together with interest on the 
                payments as determined by the Secretary, if the 
                Secretary, after considering the recommendations of the 
                soil conservation district and the Natural Resources 
                Conservation Service, determines that the violation is 
                of such nature as to warrant termination of the 
                contract; or
                    ``(B) to refund to the Secretary, or accept 
                adjustments to, the rental payments and cost sharing 
                payments provided to the owner or operator, as the 
                Secretary considers appropriate, if the Secretary 
                determines that the violation does not warrant 
                termination of the contract;
            ``(6) on the transfer of the right and interest of the owner 
        or operator in land subject to the contract--
                    ``(A) to forfeit all rights to rental payments and 
                cost sharing payments under the contract; and
                    ``(B) to refund to the United States all rental 
                payments and cost sharing payments received by the owner 
                or operator, or accept such payment adjustments or make 
                such refunds as the Secretary considers appropriate and 
                consistent with the objectives of this subchapter;
        unless the transferee of the land agrees with the Secretary to 
        assume all obligations of the contract, except that no refund of 
        rental payments and cost sharing payments shall be required if 
        the land is purchased by or for the United States Fish and 
        Wildlife Service, or the transferee and the Secretary agree

[[Page 116 STAT. 244]]

        to modifications to the contract, in a case in which the 
        modifications are consistent with the objectives of the program, 
        as determined by the Secretary;
            ``(7) not to conduct any harvesting or grazing, nor 
        otherwise make commercial use of the forage, on land that is 
        subject to the contract, nor adopt any similar practice 
        specified in the contract by the Secretary as a practice that 
        would tend to defeat the purposes of the contract, except that 
        the Secretary may permit, consistent with the conservation of 
        soil, water quality, and wildlife habitat (including habitat 
        during nesting seasons for birds in the area)--
                    ``(A) managed harvesting and grazing (including the 
                managed harvesting of biomass), except that in 
                permitting managed harvesting and grazing, the 
                Secretary--
                          ``(i) shall, in coordination with the State 
                      technical committee--
                                    ``(I) develop appropriate vegetation 
                                management requirements; and
                                    ``(II) identify periods during which 
                                harvesting and grazing under this 
                                paragraph may be conducted;
                          ``(ii) may permit harvesting and grazing or 
                      other commercial use of the forage on the land 
                      that is subject to the contract in response to a 
                      drought or other emergency; and
                          ``(iii) shall, in the case of routine managed 
                      harvesting or grazing or harvesting or grazing 
                      conducted in response to a drought or other 
                      emergency, reduce the rental payment otherwise 
                      payable under the contract by an amount 
                      commensurate with the economic value of the 
                      activity; and
                    ``(B) the installation of wind turbines, except that 
                in permitting the installation of wind turbines, the 
                Secretary shall determine the number and location of 
                wind turbines that may be installed, taking into 
                account--
                          ``(i) the location, size, and other physical 
                      characteristics of the land;
                          ``(ii) the extent to which the land contains 
                      wildlife and wildlife habitat; and
                          ``(iii) the purposes of the conservation 
                      reserve program under this subchapter;
            ``(8) not to conduct any planting of trees on land that is 
        subject to the contract unless the contract specifies that the 
        harvesting and commercial sale of trees such as Christmas trees 
        are prohibited, nor otherwise make commercial use of trees on 
        land that is subject to the contract unless it is expressly 
        permitted in the contract, nor adopt any similar practice 
        specified in the contract by the Secretary as a practice that 
        would tend to defeat the purposes of the contract, except that 
        no contract shall prohibit activities consistent with customary 
        forestry practice, such as pruning, thinning, or stand 
        improvement of trees, on land converted to forestry use;
            ``(9) not to adopt any practice specified by the Secretary 
        in the contract as a practice that would tend to defeat the 
        purposes of this subchapter; and
            ``(10) to comply with such additional provisions as the 
        Secretary determines are desirable and are included in the 
        contract

[[Page 116 STAT. 245]]

        to carry out this subchapter or to facilitate the practical 
        administration of this subchapter.

    ``(b) Conservation Plans.--The plan referred to in subsection 
(a)(1)--
            ``(1) shall set forth--
                    ``(A) the conservation measures and practices to be 
                carried out by the owner or operator during the term of 
                the contract; and
                    ``(B) the commercial use, if any, to be permitted on 
                the land during the term; and
            ``(2) may provide for the permanent retirement of any 
        existing cropland base and allotment history for the land.

    ``(c) Foreclosure.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, an owner or operator who is a party to a contract entered 
        into under this subchapter may not be required to make 
        repayments to the Secretary of amounts received under the 
        contract if the land that is subject to the contract has been 
        foreclosed on and the Secretary determines that forgiving the 
        repayments is appropriate in order to provide fair and equitable 
        treatment.
            ``(2) Resumption of control.--
                    ``(A) In general.--This subsection shall not void 
                the responsibilities of an owner or operator under the 
                contract if the owner or operator resumes control over 
                the land that is subject to the contract within the 
                period specified in the contract.
                    ``(B) Contract.--On the resumption of the control 
                over the land by the owner or operator, the provisions 
                of the contract in effect on the date of the foreclosure 
                shall apply.

``SEC. 1233. <<NOTE: 16 USC 3833.>>  DUTIES OF THE SECRETARY.

    ``In return for a contract entered into by an owner or operator 
under section 1232, the Secretary shall--
            ``(1) share the cost of carrying out the conservation 
        measures and practices set forth in the contract for which the 
        Secretary determines that cost sharing is appropriate and in the 
        public interest; and
            ``(2) for a period of years not in excess of the term of the 
        contract, pay an annual rental payment in an amount necessary to 
        compensate for--
                    ``(A) the conversion of highly erodible cropland 
                normally devoted to the production of an agricultural 
                commodity on a farm or ranch to a less intensive use; 
                and
                    ``(B) the retirement of any cropland base and 
                allotment history that the owner or operator agrees to 
                retire permanently.

``SEC. 1234. <<NOTE: 16 USC 3834.>> PAYMENTS.

    ``(a) Timing.--The Secretary shall provide payment for obligations 
incurred by the Secretary under a contract entered into under this 
subchapter--
            ``(1) with respect to any cost-sharing payment obligation 
        incurred by the Secretary, as soon as practicable after the 
        obligation is incurred; and
            ``(2) with respect to any annual rental payment obligation 
        incurred by the Secretary--
                    ``(A) as soon as practicable after October 1 of each 
                calendar year; or

[[Page 116 STAT. 246]]

                    ``(B) at the option of the Secretary, at any time 
                prior to such date during the year that the obligation 
                is incurred.

    ``(b) Federal Percentage of Cost Sharing Payments.--
            ``(1) In general.--In making cost sharing payments to an 
        owner or operator under a contract entered into under this 
        subchapter, the Secretary shall pay 50 percent of the cost of 
        establishing water quality and conservation measures and 
        practices required under each contract for which the Secretary 
        determines that cost sharing is appropriate and in the public 
        interest.
            ``(2) Limitation.--The Secretary shall not make any payment 
        to an owner or operator under this subchapter to the extent that 
        the total amount of cost sharing payments provided to the owner 
        or operator from all sources would exceed 100 percent of the 
        total cost of establishing measures and practices described in 
        paragraph (1).
            ``(3) Hardwood trees, windbreaks, shelterbelts, and wildlife 
        corridors.--
                    ``(A) Applicability.--This paragraph applies to--
                          ``(i) land devoted to the production of 
                      hardwood trees, windbreaks, shelterbelts, or 
                      wildlife corridors under a contract entered into 
                      under this subchapter after November 28, 1990; and
                          ``(ii) land converted to such production under 
                      section 1235A.
                    ``(B) Payments.--In making cost share payments to an 
                owner or operator of land described in subparagraph (A), 
                the Secretary shall pay 50 percent of the reasonable and 
                necessary costs, as determined by the Secretary, 
                incurred by the owner or operator for maintaining trees 
                or shrubs, including the cost of replanting (if the 
                trees or shrubs were lost due to conditions beyond the 
                control of the owner or operator), during not less than 
                the 2-year, and not more than the 4-year, period 
                beginning on the date of the planting of the trees or 
                shrubs, as determined appropriate by the Secretary.
            ``(4) Hardwood tree planting.--The Secretary may permit 
        owners or operators that contract to devote at least 10 acres of 
        land to the production of hardwood trees under this subchapter 
        to extend the planting of the trees over a 3-year period if at 
        least \1/3\ of the trees are planted in each of the first 2 
        years.
            ``(5) Other federal cost share assistance.--An owner or 
        operator shall not be eligible to receive or retain cost share 
        assistance under this subsection if the owner or operator 
        receives any other Federal cost share assistance with respect to 
        the land under any other provision of law.

    ``(c) Annual Rental Payments.--
            ``(1) In general.--In determining the amount of annual 
        rental payments to be paid to owners and operators for 
        converting highly erodible cropland normally devoted to the 
        production of an agricultural commodity to less intensive use, 
        the Secretary may consider, among other things, the amount 
        necessary to encourage owners or operators of highly erodible 
        cropland to participate in the program established by this 
        subchapter.

[[Page 116 STAT. 247]]

            ``(2) Method of determination.--The amounts payable to 
        owners or operators in the form of rental payments under 
        contracts entered into under this subchapter may be determined 
        through--
                    ``(A) the submission of bids for such contracts by 
                owners and operators in such manner as the Secretary may 
                prescribe; or
                    ``(B) such other means as the Secretary determines 
                are appropriate.
            ``(3) Acceptance of contract offers.--In determining the 
        acceptability of contract offers, the Secretary may--
                    ``(A) take into consideration the extent to which 
                enrollment of the land that is the subject of the 
                contract offer would improve soil resources, water 
                quality, wildlife habitat, or provide other 
                environmental benefits; and
                    ``(B) establish different criteria in various States 
                and regions of the United States based on the extent to 
                which water quality or wildlife habitat may be improved 
                or erosion may be abated.
            ``(4) Hardwood tree acreage.--In the case of acreage 
        enrolled in the conservation reserve established under this 
        subchapter that is to be devoted to hardwood trees, the 
        Secretary may consider bids for contracts under this subsection 
        on a continuous basis.

    ``(d) Cash or In-Kind Payments.--
            ``(1) In general.--Except as otherwise provided in this 
        section, payments under this subchapter--
                    ``(A) shall be made in cash or in commodities in 
                such amount and on such time schedule as is agreed on 
                and specified in the contract; and
                    ``(B) may be made in advance of determination of 
                performance.
            ``(2) Method of providing in-kind payments.--If the payment 
        to an owner or operator is made with in-kind commodities, the 
        payment shall be made by the Commodity Credit Corporation--
                    ``(A) by delivery of the commodity involved to the 
                owner or operator at a warehouse or other similar 
                facility located in the county in which the highly 
                erodible cropland is located or at such other location 
                as is agreed to by the Secretary and the owner or 
                operator;
                    ``(B) by the transfer of negotiable warehouse 
                receipts; or
                    ``(C) by such other method, including the sale of 
                the commodity in commercial markets, as is determined by 
                the Secretary to be appropriate to enable the owner or 
                operator to receive efficient and expeditious possession 
                of the commodity.
            ``(3) Cash payments.--
                    ``(A) Commodity credit corporation stocks.--If 
                stocks of a commodity acquired by the Commodity Credit 
                Corporation are not readily available to make full 
                payment in kind to the owner or operator, the Secretary 
                may substitute full or partial payment in cash for 
                payment in kind.
                    ``(B) Special conservation reserve enhancement 
                program.--Payments to an owner or operator under a

[[Page 116 STAT. 248]]

                special conservation reserve enhancement program 
                described in subsection (f)(4) shall be in the form of 
                cash only.

    ``(e) Payments on Death, Disability, or Succession.--If an owner or 
operator that is entitled to a payment under a contract entered into 
under this subchapter dies, becomes incompetent, is otherwise unable to 
receive the payment, or is succeeded by another person that renders or 
completes the required performance, the Secretary shall make the 
payment, in accordance with regulations prescribed by the Secretary and 
without regard to any other provision of law, in such manner as the 
Secretary determines is fair and reasonable in light of all of the 
circumstances.
    ``(f) Payment Limitation for Rental Payments.--
            ``(1) In general.--The total amount of rental payments, 
        including rental payments made in the form of in-kind 
        commodities, made to a person under this subchapter for any 
        fiscal year may not exceed $50,000.
            ``(2) Regulations.--
                    ``(A) In general.--The Secretary shall promulgate 
                regulations--
                          ``(i) defining the term `person' as used in 
                      this subsection; and
                          ``(ii) providing such terms and conditions as 
                      the Secretary determines necessary to ensure a 
                      fair and reasonable application of the limitation 
                      established by this subsection.
                    ``(B) Corporations and stockholders.--The 
                regulations promulgated by the Secretary on December 18, 
                1970, under section 101 of the Agricultural Act of 1970 
                (7 U.S.C. 1307), shall be used to determine whether 
                corporations and their stockholders may be considered as 
                separate persons under this subsection.
            ``(3) Other payments.--Rental payments received by an owner 
        or operator shall be in addition to, and not affect, the total 
        amount of payments that the owner or operator is otherwise 
        eligible to receive under the Farm Security and Rural Investment 
        Act of 2002.
            ``(4) Special conservation reserve enhancement program.--
                    ``(A) In general.--The provisions of this subsection 
                that limit payments to any person, and section 1305(d) 
                of the Agricultural Reconciliation Act of 1987 (7 U.S.C. 
                1308 note; Public Law 100-203), shall not be applicable 
                to payments received by a State, political subdivision, 
                or agency thereof in connection with agreements entered 
                into under a special conservation reserve enhancement 
                program carried out by that entity that has been 
                approved by the Secretary.
                    ``(B) Agreements.--The Secretary may enter into such 
                agreements for payments to States (including political 
                subdivisions and agencies of States) that the Secretary 
                determines will advance the purposes of this subchapter.

    ``(g) Other State or Local Assistance.--In addition to any payment 
under this subchapter, an owner or operator may receive cost share 
assistance, rental payments, or tax benefits from a State or subdivision 
thereof for enrolling land in the conservation reserve program.

[[Page 116 STAT. 249]]

``SEC. 1235. <<NOTE: 16 USC 3835.>>  CONTRACTS.

    ``(a) Ownership or Operation Requirements.--
            ``(1) In general.--Except as provided in paragraph (2), no 
        contract shall be entered into under this subchapter concerning 
        land with respect to which the ownership has changed in the 1-
        year period preceding the first year of the contract period 
        unless--
                    ``(A) the new ownership was acquired by will or 
                succession as a result of the death of the previous 
                owner;
                    ``(B) the new ownership was acquired before January 
                1, 1985;
                    ``(C) the Secretary determines that the land was 
                acquired under circumstances that give adequate 
                assurance that the land was not acquired for the purpose 
                of placing the land in the program established by this 
                subchapter; or
                    ``(D) the ownership change occurred due to 
                foreclosure on the land and the owner of the land 
                immediately before the foreclosure exercises a right of 
                redemption from the mortgage holder in accordance with 
                State law.
            ``(2) Exceptions.--Paragraph (1) shall not--
                    ``(A) prohibit the continuation of an agreement by a 
                new owner after an agreement has been entered into under 
                this subchapter; or
                    ``(B) require a person to own the land as a 
                condition of eligibility for entering into the contract 
                if the person--
                          ``(i) has operated the land to be covered by a 
                      contract under this section for at least 1 year 
                      preceding the date of the contract or since 
                      January 1, 1985, whichever is later; and
                          ``(ii) controls the land for the contract 
                      period.

    ``(b) Sales or Transfers.--If, during the term of a contract entered 
into under this subchapter, an owner or operator of land subject to the 
contract sells or otherwise transfers the ownership or right of 
occupancy of the land, the new owner or operator of the land may--
            ``(1) continue the contract under the same terms or 
        conditions;
            ``(2) enter into a new contract in accordance with this 
        subchapter; or
            ``(3) elect not to participate in the program established by 
        this subchapter.

    ``(c) Modifications.--
            ``(1) In general.--The Secretary may modify a contract 
        entered into with an owner or operator under this subchapter 
        if--
                    ``(A) the owner or operator agrees to the 
                modification; and
                    ``(B) the Secretary determines that the modification 
                is desirable--
                          ``(i) to carry out this subchapter;
                          ``(ii) to facilitate the practical 
                      administration of this subchapter; or
                          ``(iii) to achieve such other goals as the 
                      Secretary determines are appropriate, consistent 
                      with this subchapter.

[[Page 116 STAT. 250]]

            ``(2) Production of agricultural commodities.--The Secretary 
        may modify or waive a term or condition of a contract entered 
        into under this subchapter in order to permit all or part of the 
        land subject to such contract to be devoted to the production of 
        an agricultural commodity during a crop year, subject to such 
        conditions as the Secretary determines are appropriate.

    ``(d) Termination.--
            ``(1) In general.--The Secretary may terminate a contract 
        entered into with an owner or operator under this subchapter 
        if--
                    ``(A) the owner or operator agrees to the 
                termination; and
                    ``(B) the Secretary determines that the termination 
                would be in the public interest.
            ``(2) Notice to congressional committees.--At least 90 days 
        before taking any action to terminate under paragraph (1) all 
        conservation reserve contracts entered into under this 
        subchapter, the Secretary shall provide to the Committee on 
        Agriculture of the House of Representatives and the Committee on 
        Agriculture, Nutrition, and Forestry of the Senate written 
        notice of the action.

    ``(e) Early Termination by Owner or Operator.--
            ``(1) Early termination.--
                    ``(A) In general.--The Secretary shall allow a 
                participant that entered into a contract under this 
                subchapter before January 1, 1995, to terminate the 
                contract at any time if the contract has been in effect 
                for at least 5 years.
                    ``(B) Liability for contract violation.--The 
                termination shall not relieve the participant of 
                liability for a contract violation occurring before the 
                date of the termination.
                    ``(C) Notice to secretary.--The participant shall 
                provide the Secretary with reasonable notice of the 
                desire of the participant to terminate the contract.
            ``(2) Certain land excepted.--The following land shall not 
        be subject to an early termination of contract under this 
        subsection:
                    ``(A) Filterstrips, waterways, strips adjacent to 
                riparian areas, windbreaks, and shelterbelts.
                    ``(B) Land with an erodibility index of more than 
                15.
                    ``(C) Other land of high environmental value 
                (including wetland), as determined by the Secretary.
            ``(3) Effective date.--The contract termination shall become 
        effective 60 days after the date on which the owner or operator 
        submits the notice required under paragraph (1)(C).
            ``(4) Prorated rental payment.--If a contract entered into 
        under this subchapter is terminated under this subsection before 
        the end of the fiscal year for which a rental payment is due, 
        the Secretary shall provide a prorated rental payment covering 
        the portion of the fiscal year during which the contract was in 
        effect.
            ``(5) Renewed enrollment.--The termination of a contract 
        entered into under this subchapter shall not affect the ability 
        of the owner or operator that requested the termination to 
        submit a subsequent bid to enroll the land that was subject to 
        the contract into the conservation reserve.

[[Page 116 STAT. 251]]

            ``(6) Conservation requirements.--If land that was subject 
        to a contract is returned to production of an agricultural 
        commodity, the conservation requirements under subtitles B and C 
        shall apply to the use of the land to the extent that the 
        requirements are similar to those requirements imposed on other 
        similar land in the area, except that the requirements may not 
        be more onerous than the requirements imposed on other land.

``SEC. 1235A. <<NOTE: 16 USC 3835a.>>  CONVERSION OF LAND SUBJECT TO 
            CONTRACT TO OTHER CONSERVING USES.

    ``(a) Conversion to Trees.--
            ``(1) In general.--The Secretary shall permit an owner or 
        operator that has entered into a contract under this subchapter 
        that is in effect on November 28, 1990, to convert areas of 
        highly erodible cropland that are subject to the contract, and 
        that are devoted to vegetative cover, from that use to hardwood 
        trees, windbreaks, shelterbelts, or wildlife corridors.
            ``(2) Terms.--
                    ``(A) Extension of contract.--With respect to a 
                contract that is modified under this section that 
                provides for the planting of hardwood trees, windbreaks, 
                shelterbelts, or wildlife corridors, if the original 
                term of the contract was less than 15 years, the owner 
                or operator may extend the contract to a term of not to 
                exceed 15 years.
                    ``(B) Cost share assistance.--The Secretary shall 
                pay 50 percent of the cost of establishing conservation 
                measures and practices authorized under this subsection 
                for which the Secretary determines the cost sharing is 
                appropriate and in the public interest.

    ``(b) Conversion to Wetland.--The Secretary shall permit an owner or 
operator that has entered into a contract under this subchapter that is 
in effect on November 28, 1990, to restore areas of highly erodible 
cropland that are devoted to vegetative cover under the contract to 
wetland if--
            ``(1) the areas are prior converted wetland;
            ``(2) the owner or operator of the areas enters into an 
        agreement to provide the Secretary with a long-term or permanent 
        easement under subchapter C covering the areas;
            ``(3) there is a high probability that the prior converted 
        area can be successfully restored to wetland status; and
            ``(4) the restoration of the areas otherwise meets the 
        requirements of subchapter C.

    ``(c) Limitation.--The Secretary shall not incur, through a 
conversion under this section, any additional expense on the acres, 
including the expense involved in the original establishment of the 
vegetative cover, that would result in cost share for costs under this 
section in excess of the costs that would have been subject to cost 
share for the new practice had that practice been the original practice.
    ``(d) Condition of Contract.--An owner or operator shall as a 
condition of entering into a contract under subsection (a) participate 
in the Forest Stewardship Program established under section 5 of the 
Cooperative Forestry Assistance Act of 1978 (16 U.S.C. 2103a).''.

[[Page 116 STAT. 252]]

    (b) Study <<NOTE: 16 USC 3831 note.>> on Economic Effects.--
            (1) In general.--Not later than 18 months after the date of 
        enactment of this Act, the Secretary of Agriculture shall submit 
        to the Committee on Agriculture of the House of Representatives 
        and the Committee on Agriculture, Nutrition, and Forestry of the 
        Senate a report that describes the economic and social effects 
        on rural communities resulting from the conservation reserve 
        program established under subchapter B of chapter 1 of subtitle 
        D of title XII of the Food Security Act of 1985 (16 U.S.C. 3831 
        et seq.).
            (2) Components.--The study under paragraph (1) shall include 
        analyses of--
                    (A) the impact that enrollments in the conservation 
                reserve program have on rural businesses, civic 
                organizations, and community services (such as schools, 
                public safety, and infrastructure), particularly in 
                communities with a large percentage of whole farm 
                enrollments;
                    (B) the effect that those enrollments have on rural 
                population and beginning farmers (including a 
                description of any connection between the rate of 
                enrollment and the incidence of absentee ownership);
                    (C)(i) the manner in which differential per acre 
                payment rates potentially impact the types of land (by 
                productivity) enrolled;
                    (ii) changes to the per acre payment rates that may 
                affect that impact; and
                    (iii) the manner in which differential per acre 
                payment rates could facilitate retention of productive 
                agricultural land in agriculture; and
                    (D) the effect of enrollment on opportunities for 
                recreational activities (including hunting and fishing).

                  Subtitle C--Wetlands Reserve Program

SEC. 2201. REAUTHORIZATION.

    Section 1237(c) of the Food Security Act of 1985 (16 U.S.C. 3837(c)) 
is amended by striking ``2002'' and inserting ``2007''.

SEC. 2202. ENROLLMENT.

    Section 1237 of the Food Security Act of 1985 (16 U.S.C. 3837) is 
amended--
            (1) by striking subsection (b) and inserting the following:

    ``(b) Enrollment Conditions.--
            ``(1) Maximum enrollment.--The total number of acres 
        enrolled in the wetlands reserve program shall not exceed 
        2,275,000 acres, of which, to the maximum extent practicable, 
        the Secretary shall enroll 250,000 acres in each calendar year.
            ``(2) Methods of enrollment.--The Secretary shall enroll 
        acreage into the wetlands reserve program through the use of 
        permanent easements, 30-year easements, restoration cost share 
        agreements, or any combination of those options.''; and
            (2) by striking subsection (g).

SEC. 2203. EASEMENTS AND AGREEMENTS.

    Section 1237A of the Food Security Act of 1985 (16 U.S.C. 3837a) is 
amended by striking subsection (h).

[[Page 116 STAT. 253]]

SEC. 2204. CHANGES IN OWNERSHIP; AGREEMENT MODIFICATION; TERMINATION.

    Section 1237E(a) of the Food Security Act of 1985 (16 U.S.C. 
3837e(a)) is amended by striking paragraph (2) and inserting the 
following:
            ``(2)(A) the ownership change occurred because of 
        foreclosure on the land; and
            ``(B) immediately before the foreclosure, the owner of the 
        land exercises a right of redemption from the mortgage holder in 
        accordance with State law; or''.

              Subtitle D--Environmental Quality Incentives

SEC. 2301. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.

    Chapter 4 of subtitle D of title XII of the Food Security Act of 
1985 (16 U.S.C. 3839aa et seq.) is amended to read as follows:

``SEC. 1240. <<NOTE: 16 USC 3839aa.>>  PURPOSES.

    ``The purposes of the environmental quality incentives program 
established by this chapter are to promote agricultural production and 
environmental quality as compatible goals, and to optimize environmental 
benefits, by--
            ``(1) assisting producers in complying with local, State, 
        and national regulatory requirements concerning--
                    ``(A) soil, water, and air quality;
                    ``(B) wildlife habitat; and
                    ``(C) surface and ground water conservation;
            ``(2) avoiding, to the maximum extent practicable, the need 
        for resource and regulatory programs by assisting producers in 
        protecting soil, water, air, and related natural resources and 
        meeting environmental quality criteria established by Federal, 
        State, tribal, and local agencies;
            ``(3) providing flexible assistance to producers to install 
        and maintain conservation practices that enhance soil, water, 
        related natural resources (including grazing land and wetland), 
        and wildlife while sustaining production of food and fiber;
            ``(4) assisting producers to make beneficial, cost effective 
        changes to cropping systems, grazing management, nutrient 
        management associated with livestock, pest or irrigation 
        management, or other practices on agricultural land; and
            ``(5) consolidating and streamlining conservation planning 
        and regulatory compliance processes to reduce administrative 
        burdens on producers and the cost of achieving environmental 
        goals.

``SEC. 1240A. <<NOTE: 16 USC 3839aa-1.>> DEFINITIONS.

    ``In this chapter:
            ``(1) Beginning farmer or rancher.--The term `beginning 
        farmer or rancher' has the meaning provided under section 343(a) 
        of the Consolidated Farm and Rural Development Act (7 U.S.C. 
        1999(a)).
            ``(2) Eligible land.--
                    ``(A) In general.--The term `eligible land' means 
                land on which agricultural commodities or livestock are 
                produced.

[[Page 116 STAT. 254]]

                    ``(B) Inclusions.--The term `eligible land' 
                includes--
                          ``(i) cropland;
                          ``(ii) grassland;
                          ``(iii) rangeland;
                          ``(iv) pasture land;
                          ``(v) private, nonindustrial forest land; and
                          ``(vi) other agricultural land that the 
                      Secretary determines poses a serious threat to 
                      soil, air, water, or related resources.
            ``(3) Land management practice.--The term `land management 
        practice' means a site-specific nutrient or manure management, 
        integrated pest management, irrigation management, tillage or 
        residue management, grazing management, air quality management, 
        or other land management practice carried out on eligible land 
        that the Secretary determines is needed to protect from 
        degradation, in the most cost-effective manner, water, soil, or 
        related resources.
            ``(4) Livestock.--The term `livestock' means dairy cattle, 
        beef cattle, laying hens, broilers, turkeys, swine, sheep, and 
        other such animals as are determined by the Secretary.
            ``(5) Practice.--The term `practice' means 1 or more 
        structural practices, land management practices, and 
        comprehensive nutrient management planning practices.
            ``(6) Structural practice.--The term `structural practice' 
        means--
                    ``(A) the establishment on eligible land of a site-
                specific animal waste management facility, terrace, 
                grassed waterway, contour grass strip, filterstrip, 
                tailwater pit, permanent wildlife habitat, constructed 
                wetland, or other structural practice that the Secretary 
                determines is needed to protect, in the most cost 
                effective manner, water, soil, or related resources from 
                degradation; and
                    ``(B) the capping of abandoned wells on eligible 
                land.

``SEC. 1240B. <<NOTE: 16 USC 3839aa-2.>>  ESTABLISHMENT AND 
            ADMINISTRATION OF ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.

    ``(a) Establishment.--
            ``(1) In general.--During each of the 2002 through 2007 
        fiscal years, the Secretary shall provide cost-share payments 
        and incentive payments to producers that enter into contracts 
        with the Secretary under the program.
            ``(2) Eligible practices.--With respect to practices 
        implemented under this chapter--
                    ``(A) a producer that implements a structural 
                practice in accordance with this chapter shall be 
                eligible to receive cost-share payments; and
                    ``(B) a producer that implements a land management 
                practice, or develops a comprehensive nutrient 
                management plan, in accordance with this chapter shall 
                be eligible to receive incentive payments.

    ``(b) Practices and Term.--
            ``(1) Practices.--A contract under this chapter may apply to 
        1 or more structural practices, land management practices, and 
        comprehensive nutrient management practices.
            ``(2) Term.--A contract under this chapter shall have a term 
        that--

[[Page 116 STAT. 255]]

                    ``(A) at a minimum, is equal to the period beginning 
                on the date on which the contract is entered into and 
                ending on the date that is 1 year after the date on 
                which all practices under the contract have been 
                implemented; but
                    ``(B) not to exceed 10 years.

    ``(c) Bidding Down.--If the Secretary determines that the 
environmental values of 2 or more applications for cost-share payments 
or incentive payments are comparable, the Secretary shall not assign a 
higher priority to the application only because it would present the 
least cost to the program established under the program.
    ``(d) Cost-Share Payments.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        cost-share payments provided to a producer proposing to 
        implement 1 or more practices under the program shall be not 
        more than 75 percent of the cost of the practice, as determined 
        by the Secretary.
            ``(2) Exceptions.--
                    ``(A) Limited resource and beginning farmers.--The 
                Secretary may increase the amount provided to a producer 
                under paragraph (1) to not more than 90 percent if the 
                producer is a limited resource or beginning farmer or 
                rancher, as determined by the Secretary.
                    ``(B) Cost-share assistance from other sources.--
                Except as provided in paragraph (3), any cost-share 
                payments received by a producer from a State or private 
                organization or person for the implementation of 1 or 
                more practices on eligible land of the producer shall be 
                in addition to the payments provided to the producer 
                under paragraph (1).
            ``(3) Other payments.--A producer shall not be eligible for 
        cost-share payments for practices on eligible land under the 
        program if the producer receives cost-share payments or other 
        benefits for the same practice on the same land under chapter 1 
        and the program.

    ``(e) Incentive Payments.--
            ``(1) In general.--The Secretary shall make incentive 
        payments in an amount and at a rate determined by the Secretary 
        to be necessary to encourage a producer to perform 1 or more 
        land management practices.
            ``(2) Special rule.--In determining the amount and rate of 
        incentive payments, the Secretary may accord great significance 
        to a practice that promotes residue, nutrient, pest, invasive 
        species, or air quality management.

    ``(f) Modification or Termination of Contracts.--
            ``(1) Voluntary modification or termination.--The Secretary 
        may modify or terminate a contract entered into with a producer 
        under this chapter if--
                    ``(A) the producer agrees to the modification or 
                termination; and
                    ``(B) the Secretary determines that the modification 
                or termination is in the public interest.
            ``(2) Involuntary termination.--The Secretary may terminate 
        a contract under this chapter if the Secretary determines that 
        the producer violated the contract.

[[Page 116 STAT. 256]]

    ``(g) Allocation of Funding.--For each of fiscal years 2002 through 
2007, 60 percent of the funds made available for cost-share payments and 
incentive payments under this chapter shall be targeted at practices 
relating to livestock production.

``SEC. 1240C. <<NOTE: 16 USC 3839aa-3.>>  EVALUATION OF OFFERS AND 
            PAYMENTS.

    ``In evaluating applications for cost-share payments and incentive 
payments, the Secretary shall accord a higher priority to assistance and 
payments that--
            ``(1) encourage the use by producers of cost-effective 
        conservation practices; and
            ``(2) address national conservation priorities.

``SEC. 1240D. <<NOTE: 16 USC 3839aa-4.>> DUTIES OF PRODUCERS.

    ``To receive technical assistance, cost-share payments, or incentive 
payments under the program, a producer shall agree--
            ``(1) to implement an environmental quality incentives 
        program plan (including a comprehensive nutrient management 
        plan, if applicable) that describes conservation and 
        environmental purposes to be achieved through 1 or more 
        practices that are approved by the Secretary;
            ``(2) not to conduct any practices on the farm or ranch that 
        would tend to defeat the purposes of the program;
            ``(3) on the violation of a term or condition of the 
        contract at anytime the producer has control of the land--
                    ``(A) if the Secretary determines that the violation 
                warrants termination of the contract--
                          ``(i) to forfeit all rights to receive 
                      payments under the contract; and
                          ``(ii) to refund to the Secretary all or a 
                      portion of the payments received by the owner or 
                      operator under the contract, including any 
                      interest on the payments, as determined by the 
                      Secretary; or
                    ``(B) if the Secretary determines that the violation 
                does not warrant termination of the contract, to refund 
                to the Secretary, or accept adjustments to, the payments 
                provided to the owner or operator, as the Secretary 
                determines to be appropriate;
            ``(4) on the transfer of the right and interest of the 
        producer in land subject to the contract, unless the transferee 
        of the right and interest agrees with the Secretary to assume 
        all obligations of the contract, to refund all cost-share 
        payments and incentive payments received under the program, as 
        determined by the Secretary;
            ``(5) to supply information as required by the Secretary to 
        determine compliance with the program plan and requirements of 
        the program; and
            ``(6) to comply with such additional provisions as the 
        Secretary determines are necessary to carry out the program 
        plan.

``SEC. 1240E. <<NOTE: 16 USC 3839aa-5.>> ENVIRONMENTAL QUALITY 
            INCENTIVES PROGRAM PLAN.

    ``(a) In General.--To be eligible to receive cost-share payments or 
incentive payments under the program, a producer shall submit to the 
Secretary for approval a plan of operations that--
            ``(1) specifies practices covered under the program;
            ``(2) includes such terms and conditions as the Secretary 
        considers necessary to carry out the program, including a

[[Page 116 STAT. 257]]

        description of the purposes to be met by the implementation of 
        the plan; and
            ``(3) in the case of a confined livestock feeding operation, 
        provides for development and implementation of a comprehensive 
        nutrient management plan, if applicable.

    ``(b) Avoidance of Duplication.--The Secretary shall, to the maximum 
extent practicable, eliminate duplication of planning activities under 
the program under this chapter and comparable conservation programs.

``SEC. 1240F. <<NOTE: 16 USC 3839aa-6.>> DUTIES OF THE SECRETARY.

    ``To the extent appropriate, the Secretary shall assist a producer 
in achieving the conservation and environmental goals of a program plan 
by--
            ``(1) providing cost-share payments or incentive payments 
        for developing and implementing 1 or more practices, as 
        appropriate; and
            ``(2) providing the producer with information and training 
        to aid in implementation of the plan.

``SEC. 1240G. <<NOTE: 16 USC 3839aa-7.>> LIMITATION ON PAYMENTS.

    ``An individual or entity may not receive, directly or indirectly, 
cost-share or incentive payments under this chapter that, in the 
aggregate, exceed $450,000 for all contracts entered into under this 
chapter by the individual or entity during the period of fiscal years 
2002 through 2007, regardless of the number of contracts entered into 
under this chapter by the individual or entity.

``SEC. 1240H. <<NOTE: 16 USC 3839aa-8.>> CONSERVATION INNOVATION GRANTS.

    ``(a) In General.--The Secretary may pay the cost of competitive 
grants that are intended to stimulate innovative approaches to 
leveraging Federal investment in environmental enhancement and 
protection, in conjunction with agricultural production, through the 
program.
    ``(b) Use.--The Secretary may provide grants under this section to 
governmental and nongovernmental organizations and persons, on a 
competitive basis, to carry out projects that--
            ``(1) involve producers that are eligible for payments or 
        technical assistance under the program;
            ``(2) implement projects, such as--
                    ``(A) market systems for pollution reduction; and
                    ``(B) innovative conservation practices, including 
                the storing of carbon in the soil; and
            ``(3) leverage funds made available to carry out the program 
        under this chapter with matching funds provided by State and 
        local governments and private organizations to promote 
        environmental enhancement and protection in conjunction with 
        agricultural production.

    ``(c) Cost Share.--The amount of a grant made under this section to 
carry out a project shall not exceed 50 percent of the cost of the 
project.

``SEC. 1240I. <<NOTE: 16 USC 3839aa-9.>> GROUND AND SURFACE WATER 
            CONSERVATION.

    ``(a) Establishment.--In carrying out the program under this 
chapter, subject to subsection (b), the Secretary shall promote ground 
and surface water conservation by providing cost-share payments, 
incentive payments, and loans to producers to carry out

[[Page 116 STAT. 258]]

eligible water conservation activities with respect to the agricultural 
operations of producers, to--
            ``(1) improve irrigation systems;
            ``(2) enhance irrigation efficiencies;
            ``(3) convert to--
                    ``(A) the production of less water-intensive 
                agricultural commodities; or
                    ``(B) dryland farming;
            ``(4) improve the storage of water through measures such as 
        water banking and groundwater recharge;
            ``(5) mitigate the effects of drought; or
            ``(6) institute other measures that improve groundwater and 
        surface water conservation, as determined by the Secretary, in 
        the agricultural operations of producers.

    ``(b) Net Savings.--The Secretary may provide assistance to a 
producer under this section only if the Secretary determines that the 
assistance will facilitate a conservation measure that results in a net 
savings in groundwater or surface water resources in the agricultural 
operation of the producer.
    ``(c) Funding.--Of the funds of the Commodity Credit Corporation, in 
addition to amounts made available under section 1241(a)(6) to carry out 
this chapter, the Secretary shall use--
            ``(1) to carry out this section--
                    ``(A) $25,000,000 for fiscal year 2002;
                    ``(B) $45,000,000 for fiscal year 2003; and
                    ``(C) $60,000,000 for each of fiscal years 2004 
                through 2007; and
            ``(2) $50,000,000 to carry out water conservation activities 
        in Klamath Basin, California and Oregon, to be made available as 
        soon as practicable after the date of enactment of this 
        section.''.

                      Subtitle E--Grassland Reserve

SEC. 2401. GRASSLAND RESERVE PROGRAM.

    Chapter 2 of the Food Security Act of 1985 (as amended by section 
2001) is amended by adding at the end the following:

                ``Subchapter C--Grassland Reserve Program

``SEC. 1238N. <<NOTE: 16 USC 3838n.>> GRASSLAND RESERVE PROGRAM.

    ``(a) Establishment.--The Secretary shall establish a grassland 
reserve program (referred to in this subchapter as the `program') to 
assist owners in restoring and conserving eligible land described in 
subsection (c).
    ``(b) Enrollment Conditions.--
            ``(1) Maximum enrollment.--The total number of acres 
        enrolled in the program shall not exceed 2,000,000 acres of 
        restored or improved grassland, rangeland, and pastureland.
            ``(2) Methods of enrollment.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the Secretary shall enroll in the 
                program from a willing owner not less than 40 contiguous 
                acres of land through the use of--
                          ``(i) a 10-year, 15-year, or 20-year rental 
                      agreement;

[[Page 116 STAT. 259]]

                          ``(ii)(I) a 30-year rental agreement or 
                      permanent or 30-year easement; or
                          ``(II) in a State that imposes a maximum 
                      duration for easements, an easement for the 
                      maximum duration allowed under State law.
                    ``(B) Waiver.--The Secretary may enroll in the 
                program such parcels of land that are less than 40 acres 
                as the Secretary determines are appropriate to achieve 
                the purposes of the program.
            ``(3) Limitation on use of easements and rental 
        agreements.--Of the total amount of funds expended under the 
        program to acquire easements and rental agreements described in 
        paragraph (2)(A)--
                    ``(A) not more than 40 percent shall be used for 
                rental agreements described in paragraph (2)(A)(i); and
                    ``(B) not more than 60 percent shall be used for 
                easements and rental agreements described in paragraph 
                (2)(A)(ii).

    ``(c) Eligible Land.--Land shall be eligible to be enrolled in the 
program if the Secretary determines that the land is private land that 
is--
            ``(1) grassland, land that contains forbs, or shrubland 
        (including improved rangeland and pastureland); or
            ``(2) land that--
                    ``(A) is located in an area that has been 
                historically dominated by grassland, forbs, or 
                shrubland; and
                    ``(B) has potential to serve as habitat for animal 
                or plant populations of significant ecological value if 
                the land is--
                          ``(i) retained in the current use of the land; 
                      or
                          ``(ii) restored to a natural condition; or
            ``(3) land that is incidental to land described in paragraph 
        (1) or (2), if the incidental land is determined by the 
        Secretary to be necessary for the efficient administration of an 
        agreement or easement.

``SEC. 1238O. <<NOTE: 16 USC 3838o.>>  REQUIREMENTS RELATING TO 
            EASEMENTS AND AGREEMENTS.

    ``(a) Requirements of Landowner.--
            ``(1) In general.--To be eligible to enroll land in the 
        program through the grant of an easement, the owner of the land 
        shall enter into an agreement with the Secretary--
                    ``(A) to grant an easement that applies to the land 
                to the Secretary;
                    ``(B) to create and record an appropriate deed 
                restriction in accordance with applicable State law to 
                reflect the easement;
                    ``(C) to provide a written statement of consent to 
                the easement signed by persons holding a security 
                interest or any vested interest in the land;
                    ``(D) to provide proof of unencumbered title to the 
                underlying fee interest in the land that is the subject 
                of the easement; and
                    ``(E) to comply with the terms of the easement and 
                restoration agreement.

[[Page 116 STAT. 260]]

            ``(2) Agreements.--To be eligible to enroll land in the 
        program under an agreement, the owner or operator of the land 
        shall agree--
                    ``(A) to comply with the terms of the agreement 
                (including any related restoration agreements); and
                    ``(B) to the suspension of any existing cropland 
                base and allotment history for the land under a program 
                administered by the Secretary.

    ``(b) Terms of Easement or Rental Agreement.--An easement or rental 
agreement under subsection (a) shall--
            ``(1) permit--
                    ``(A) common grazing practices, including 
                maintenance and necessary cultural practices, on the 
                land in a manner that is consistent with maintaining the 
                viability of grassland, forb, and shrub species common 
                to that locality;
                    ``(B) subject to appropriate restrictions during the 
                nesting season for birds in the local area that are in 
                significant decline or are conserved in accordance with 
                Federal or State law, as determined by the Natural 
                Resources Conservation Service State conservationist, 
                haying, mowing, or harvesting for seed production; and
                    ``(C) fire rehabilitation and construction of fire 
                breaks and fences (including placement of the posts 
                necessary for fences);
            ``(2) prohibit--
                    ``(A) the production of crops (other than hay), 
                fruit trees, vineyards, or any other agricultural 
                commodity that requires breaking the soil surface; and
                    ``(B) except as permitted under this subsection or 
                subsection (d), the conduct of any other activity that 
                would disturb the surface of the land covered by the 
                easement or rental agreement; and
            ``(3) include such additional provisions as the Secretary 
        determines are appropriate to carry out or facilitate the 
        administration of this subchapter.

    ``(c) Evaluation and Ranking of Easement and Rental Agreement 
Applications.--
            ``(1) In general.--The Secretary shall establish criteria to 
        evaluate and rank applications for easements and rental 
        agreements under this subchapter.
            ``(2) Considerations.--In establishing the criteria, the 
        Secretary shall emphasize support for--
                    ``(A) grazing operations;
                    ``(B) plant and animal biodiversity; and
                    ``(C) grassland, land that contains forbs, and 
                shrubland under the greatest threat of conversion.

    ``(d) Restoration Agreements.--
            ``(1) In general.--The Secretary shall prescribe the terms 
        of a restoration agreement by which grassland, land that 
        contains forbs, or shrubland that is subject to an easement or 
        rental agreement entered into under the program shall be 
        restored.
            ``(2) Requirements.--The restoration agreement shall 
        describe the respective duties of the owner and the Secretary 
        (including the Federal share of restoration payments and 
        technical assistance).

[[Page 116 STAT. 261]]

    ``(e) Violations.--On a violation of the terms or conditions of an 
easement, rental agreement, or restoration agreement entered into under 
this section--
            ``(1) the easement or rental agreement shall remain in 
        force; and
            ``(2) the Secretary may require the owner to refund all or 
        part of any payments received by the owner under this 
        subchapter, with interest on the payments as determined 
        appropriate by the Secretary.

``SEC. 1238P. <<NOTE: 16 USC 3838p.>>  DUTIES OF SECRETARY.

    ``(a) In general.--In return for the granting of an easement, or the 
execution of a rental agreement, by an owner under this subchapter, the 
Secretary shall, in accordance with this section--
            ``(1) make easement or rental agreement payments to the 
        owner in accordance with subsection (b); and
            ``(2) make payments to the owner for the Federal share of 
        the cost of restoration in accordance with subsection (c).

    ``(b) Payments.--
            ``(1) Easement payments.--
                    ``(A) Amount.--In return for the granting of an 
                easement by an owner under this subchapter, the 
                Secretary shall make easement payments to the owner in 
                an amount equal to--
                          ``(i) in the case of a permanent easement, the 
                      fair market value of the land less the grazing 
                      value of the land encumbered by the easement; and
                          ``(ii) in the case of a 30-year easement or an 
                      easement for the maximum duration allowed under 
                      applicable State law, 30 percent of the fair 
                      market value of the land less the grazing value of 
                      the land for the period during which the land is 
                      encumbered by the easement.
                    ``(B) Schedule.--Easement payments may be provided 
                in not less than 1 payment nor more than 10 annual 
                payments of equal or unequal amount, as agreed to by the 
                Secretary and the owner.
            ``(2) Rental agreement payments.--In return for entering 
        into a rental agreement by an owner under this subchapter, the 
        Secretary shall make annual payments to the owner during the 
        term of the rental agreement in an amount that is not more than 
        75 percent of the grazing value of the land covered by the 
        contract.

    ``(c) Federal Share of Restoration.--The Secretary shall make 
payments to an owner under this section of not more than--
            ``(1) in the case of grassland, land that contains forbs, or 
        shrubland that has never been cultivated, 90 percent of the 
        costs of carrying out measures and practices necessary to 
        restore functions and values of that land; or
            ``(2) in the case of restored grassland, land that contains 
        forbs, or shrubland, 75 percent of those costs.

    ``(d) Payments to Others.--If an owner that is entitled to a payment 
under this subchapter dies, becomes incompetent, is otherwise unable to 
receive the payment, or is succeeded by another person who renders or 
completes the required performance, the Secretary shall make the 
payment, in accordance with regulations promulgated by the Secretary and 
without regard to any other

[[Page 116 STAT. 262]]

provision of law, in such manner as the Secretary determines is fair and 
reasonable in light of all the circumstances.

``SEC. 1238Q. <<NOTE: 16 USC 3838q.>>  DELEGATION TO PRIVATE 
            ORGANIZATIONS.

    ``(a) In General.--The Secretary may permit a private conservation 
or land trust organization (referred to in this section as a `private 
organization') or a State agency to hold and enforce an easement under 
this subchapter, in lieu of the Secretary, subject to the right of the 
Secretary to conduct periodic inspections and enforce the easement, if--
            ``(1) the Secretary determines that granting the permission 
        will promote protection of grassland, land that contains forbs, 
        and shrubland;
            ``(2) the owner authorizes the private organization or State 
        agency to hold and enforce the easement; and
            ``(3) the private organization or State agency agrees to 
        assume the costs incurred in administering and enforcing the 
        easement, including the costs of restoration or rehabilitation 
        of the land as specified by the owner and the private 
        organization or State agency.

    ``(b) Application.--A private organization or State agency that 
seeks to hold and enforce an easement under this subchapter shall apply 
to the Secretary for approval.
    ``(c) Approval by Secretary.--The Secretary may approve a private 
organization to hold and enforce an easement under this subchapter if 
(as determined by the Secretary) the private organization--
            ``(1)(A) is an organization described in section 501(c)(3) 
        of the Internal Revenue Code of 1986 that is exempt from 
        taxation under section 501(a) of that Code; or
            ``(B) is described in section 509(a)(3), and is controlled 
        by an organization described in section 509(a)(2), of that Code;
            ``(2) has the relevant experience necessary to administer 
        grassland and shrubland easements;
            ``(3) has a charter that describes the commitment of the 
        private organization to conserving ranchland, agricultural land, 
        or grassland for grazing and conservation purposes; and
            ``(4) has the resources necessary to effectuate the purposes 
        of the charter.

    ``(d) Reassignment.--
            ``(1) In general.--If a private organization holding an 
        easement on land under this subchapter terminates, not later 
        than 30 days after termination of the private organization, the 
        owner of the land shall reassign the easement to--
                    ``(A) a new private organization that is approved by 
                the Secretary; or
                    ``(B) the Secretary.
            ``(2) Notification of secretary.--
                    ``(A) In general.--If <<NOTE: Deadline.>> the 
                easement is reassigned to a new private organization, 
                not later than 60 days after the date of reassignment, 
                the owner and the new organization shall notify the 
                Secretary in writing that a reassignment for termination 
                has been made.
                    ``(B) Failure to notify.--If the owner and the new 
                organization fail to notify the Secretary of the 
                reassignment in accordance with subparagraph (A), the 
                easement shall revert to the control of the 
                Secretary.''.

[[Page 116 STAT. 263]]

                 Subtitle F--Other Conservation Programs

SEC. 2501. AGRICULTURAL MANAGEMENT ASSISTANCE.

    Section 524 of the Federal Crop Insurance Act (7 U.S.C. 1524) is 
amended by striking subsection (b) and inserting the following:
    ``(b) Agricultural Management Assistance.--
            ``(1) Authority.--The Secretary shall provide financial 
        assistance to producers in the States of Connecticut, Delaware, 
        Maryland, Massachusetts, Maine, Nevada, New Hampshire, New 
        Jersey, New York, Pennsylvania, Rhode Island, Utah, Vermont, 
        West Virginia, and Wyoming.
            ``(2) Uses.--A producer may use financial assistance 
        provided under this subsection to--
                    ``(A) construct or improve--
                          ``(i) watershed management structures; or
                          ``(ii) irrigation structures;
                    ``(B) plant trees to form windbreaks or to improve 
                water quality;
                    ``(C) mitigate financial risk through production or 
                marketing diversification or resource conservation 
                practices, including--
                          ``(i) soil erosion control;
                          ``(ii) integrated pest management;
                          ``(iii) organic farming; or
                          ``(iv) to develop and implement a plan to 
                      create marketing opportunities for the producer, 
                      including through value-added processing;
                    ``(D) enter into futures, hedging, or options 
                contracts in a manner designed to help reduce 
                production, price, or revenue risk;
                    ``(E) enter into agricultural trade options as a 
                hedging transaction to reduce production, price, or 
                revenue risk; or
                    ``(F) conduct any other activity relating to an 
                activity described in subparagraphs (A) through (E), as 
                determined by the Secretary.
            ``(3) Payment limitation.--The total amount of payments made 
        to a person (as defined in section 1001(5) of the Food Security 
        Act (7 U.S.C. 1308(5))) under this subsection for any year may 
        not exceed $50,000.
            ``(4) Commodity credit corporation.--
                    ``(A) In general.--The Secretary shall carry out 
                this subsection through the Commodity Credit 
                Corporation.
                    ``(B) Funding.--
                          ``(i) In general.--Except as provided in 
                      clause (ii), the Commodity Credit Corporation 
                      shall make available to carry out this subsection 
                      not less than $10,000,000 for each fiscal year.
                          ``(ii) Exception.--For each of fiscal years 
                      2003 through 2007, the Commodity Credit 
                      Corporation shall make available to carry out this 
                      subsection $20,000,000.''.

[[Page 116 STAT. 264]]

SEC. 2502. GRAZING, WILDLIFE HABITAT INCENTIVE, SOURCE WATER PROTECTION, 
            AND GREAT LAKES BASIN PROGRAMS.

    (a) In General.--Chapter 5 of subtitle D of title XII of the Food 
Security Act of 1985 (16 U.S.C. 3839bb et seq.) is amended to read as 
follows:

                ``CHAPTER 5--OTHER CONSERVATION PROGRAMS

``SEC. 1240M. <<NOTE: 16 USC 3839bb.>> CONSERVATION OF PRIVATE GRAZING 
            LAND.

    ``(a) Purpose.--It is the purpose of this section to authorize the 
Secretary to provide a coordinated technical, educational, and related 
assistance program to conserve and enhance private grazing land 
resources and provide related benefits to all citizens of the United 
States by--
            ``(1) establishing a coordinated and cooperative Federal, 
        State, and local grazing conservation program for management of 
        private grazing land;
            ``(2) strengthening technical, educational, and related 
        assistance programs that provide assistance to owners and 
        managers of private grazing land;
            ``(3) conserving and improving wildlife habitat on private 
        grazing land;
            ``(4) conserving and improving fish habitat and aquatic 
        systems through grazing land conservation treatment;
            ``(5) protecting and improving water quality;
            ``(6) improving the dependability and consistency of water 
        supplies;
            ``(7) identifying and managing weed, noxious weed, and brush 
        encroachment problems on private grazing land; and
            ``(8) integrating conservation planning and management 
        decisions by owners and managers of private grazing land, on a 
        voluntary basis.

    ``(b) Definitions.--In this section:
            ``(1) Department.--The term `Department' means the 
        Department of Agriculture.
            ``(2) Private grazing land.--The term `private grazing land' 
        means private, State-owned, tribally-owned, and any other non-
        federally owned rangeland, pastureland, grazed forest land, and 
        hay land.
            ``(3) Secretary.--The term `Secretary' means the Secretary 
        of Agriculture.

    ``(c) Private Grazing Land Conservation Assistance.--
            ``(1) Assistance to grazing landowners and others.--Subject 
        to the availability of appropriations for this section, the 
        Secretary shall establish a voluntary program to provide 
        technical, educational, and related assistance to owners and 
        managers of private grazing land and public agencies, through 
        local conservation districts, to enable the landowners, 
        managers, and public agencies to voluntarily carry out 
        activities that are consistent with this section, including--
                    ``(A) maintaining and improving private grazing land 
                and the multiple values and uses that depend on private 
                grazing land;
                    ``(B) implementing grazing land management 
                technologies;
                    ``(C) managing resources on private grazing land, 
                including--

[[Page 116 STAT. 265]]

                          ``(i) planning, managing, and treating private 
                      grazing land resources;
                          ``(ii) ensuring the long-term sustainability 
                      of private grazing land resources;
                          ``(iii) harvesting, processing, and marketing 
                      private grazing land resources; and
                          ``(iv) identifying and managing weed, noxious 
                      weed, and brush encroachment problems;
                    ``(D) protecting and improving the quality and 
                quantity of water yields from private grazing land;
                    ``(E) maintaining and improving wildlife and fish 
                habitat on private grazing land;
                    ``(F) enhancing recreational opportunities on 
                private grazing land;
                    ``(G) maintaining and improving the aesthetic 
                character of private grazing land;
                    ``(H) identifying the opportunities and encouraging 
                the diversification of private grazing land enterprises; 
                and
                    ``(I) encouraging the use of sustainable grazing 
                systems, such as year-round, rotational, or managed 
                grazing.
            ``(2) Program elements.--
                    ``(A) Funding.--If funding is provided to carry out 
                this section, it shall be provided through a specific 
                line-item in the annual appropriations for the Natural 
                Resources Conservation Service.
                    ``(B) Technical assistance and education.--Personnel 
                of the Department trained in pasture and range 
                management shall be made available under the program to 
                deliver and coordinate technical assistance and 
                education to owners and managers of private grazing 
                land, at the request of the owners and managers.

    ``(d) Grazing Technical Assistance Self-Help.--
            ``(1) Findings.--Congress finds that--
                    ``(A) there is a severe lack of technical assistance 
                for farmers and ranchers that graze livestock;
                    ``(B) Federal budgetary constraints preclude any 
                significant expansion, and may force a reduction of, 
                current levels of technical support; and
                    ``(C) farmers and ranchers have a history of 
                cooperatively working together to address common needs 
                in the promotion of their products and in the drainage 
                of wet areas through drainage districts.
            ``(2) Establishment of grazing demonstration.--In accordance 
        with paragraph (3), the Secretary may establish 2 grazing 
        management demonstration districts at the recommendation of the 
        grazing land conservation initiative steering committee.
            ``(3) Procedure.--
                    ``(A) Proposal.--Within a reasonable time after the 
                submission of a request of an organization of farmers or 
                ranchers engaged in grazing, the Secretary shall propose 
                that a grazing management district be established.
                    ``(B) Funding.--The terms and conditions of the 
                funding and operation of the grazing management district 
                shall be proposed by the producers.
                    ``(C) Approval.--The Secretary shall approve the 
                proposal if the Secretary determines that the proposal--

[[Page 116 STAT. 266]]

                          ``(i) is reasonable;
                          ``(ii) will promote sound grazing practices; 
                      and
                          ``(iii) contains provisions similar to the 
                      provisions contained in the beef promotion and 
                      research order issued under section 4 of the Beef 
                      Research and Information Act (7 U.S.C. 2903) in 
                      effect on April 4, 1996.
                    ``(D) Area included.--The area proposed to be 
                included in a grazing management district shall be 
                determined by the Secretary on the basis of an 
                application by farmers or ranchers.
                    ``(E) Authorization.--The Secretary may use 
                authority under the Agricultural Adjustment Act (7 
                U.S.C. 601 et seq.), reenacted with amendments by the 
                Agricultural Marketing Agreement Act of 1937, to 
                operate, on a demonstration basis, a grazing management 
                district.
                    ``(F) Activities.--The activities of a grazing 
                management district shall be scientifically sound 
                activities, as determined by the Secretary in 
                consultation with a technical advisory committee 
                composed of ranchers, farmers, and technical experts.

    ``(e) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $60,000,000 for each of fiscal 
years 2002 through 2007.

``SEC. 1240N. <<NOTE: 16 USC 3839bb-1.>>  WILDLIFE HABITAT INCENTIVE 
            PROGRAM.

    ``(a) In General.--The <<NOTE: Establishment.>> Secretary, in 
consultation with the State technical committees established under 
section 1261, shall establish within the Natural Resources Conservation 
Service a program to be known as the wildlife habitat incentive program 
(referred to in this section as the `program').

    ``(b) Cost-Share Payments.--
            ``(1) In general.--Under the program, the Secretary shall 
        make cost-share payments to landowners to develop--
                    ``(A) upland wildlife habitat;
                    ``(B) wetland wildlife habitat;
                    ``(C) habitat for threatened and endangered species;
                    ``(D) fish habitat; and
                    ``(E) other types of wildlife habitat approved by 
                the Secretary.
            ``(2) Increased cost share for long-term agreements.--
                    ``(A) In general.--In a case in which the Secretary 
                enters into an agreement or contract to protect and 
                restore plant and animal habitat that has a term of at 
                least 15 years, the Secretary may provide cost-share 
                payments in addition to amounts provided under paragraph 
                (1).
                    ``(B) Funding limitation.--The Secretary may use, 
                for a fiscal year, not more than 15 percent of funds 
                made available under section 1241(a)(7) for the fiscal 
                year to carry out contracts and agreements described in 
                subparagraph (A).

    ``(c) Regional Equity.--In carrying out this section, the Secretary 
shall, to the maximum extent practicable, ensure that regional issues of 
concern relating to wildlife habitat are addressed in an appropriate 
manner.

[[Page 116 STAT. 267]]

``SEC. 1240O. <<NOTE: 16 USC 3839bb-2.>>  GRASSROOTS SOURCE WATER 
            PROTECTION PROGRAM.

    ``(a) In General.--The Secretary shall establish a national 
grassroots water protection program to more effectively use onsite 
technical assistance capabilities of each State rural water association 
that, as of the date of enactment of this section, operates a wellhead 
or groundwater protection program in the State.
    ``(b) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $5,000,000 for each of fiscal 
years 2002 through 2007.

``SEC. 1240P. <<NOTE: 16 USC 3839bb-3.>> GREAT LAKES BASIN PROGRAM FOR 
            SOIL EROSION AND SEDIMENT CONTROL.

    ``(a) In General.--The Secretary, in consultation with the Great 
Lakes Commission created by Article IV of the Great Lakes Basin Compact 
(82 Stat. 415) and in cooperation with the Administrator of the 
Environmental Protection Agency and the Secretary of the Army, may carry 
out the Great Lakes basin program for soil erosion and sediment control 
(referred to in this section as the `program').
    ``(b) Assistance.--In carrying out the program, the Secretary may--
            ``(1) provide project demonstration grants, provide 
        technical assistance, and carry out information and education 
        programs to improve water quality in the Great Lakes basin by 
        reducing soil erosion and improving sediment control; and
            ``(2) provide a priority for projects and activities that 
        directly reduce soil erosion or improve sediment control.

    ``(c) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $5,000,000 for each of fiscal 
years 2002 through 2007.''.
    (b) Conforming Amendment.--Sections 386 and 387 of the Federal 
Agriculture Improvement and Reform Act of 1996 (16 U.S.C. 2005b, 3836a) 
are repealed.

SEC. 2503. FARMLAND PROTECTION PROGRAM.

    (a) In General.--Chapter 2 of the Food Security Act of 1985 (as 
amended by section 2001) is amended by adding at the end the following:

               ``Subchapter B--Farmland Protection Program

``SEC. 1238H. <<NOTE: 16 USC 3838h.>> DEFINITIONS.

    ``In this subchapter:
            ``(1) Eligible entity.--The term `eligible entity' means--
                    ``(A) any agency of any State or local government or 
                an Indian tribe (including a farmland protection board 
                or land resource council established under State law); 
                or
                    ``(B) any organization that--
                          ``(i) is organized for, and at all times since 
                      the formation of the organization has been 
                      operated principally for, 1 or more of the 
                      conservation purposes specified in clause (i), 
                      (ii), (iii), or (iv) of section 170(h)(4)(A) of 
                      the Internal Revenue Code of 1986;
                          ``(ii) is an organization described in section 
                      501(c)(3) of that Code that is exempt from 
                      taxation under section 501(a) of that Code;

[[Page 116 STAT. 268]]

                          ``(iii) is described in section 509(a)(2) of 
                      that Code; or
                          ``(iv) is described in section 509(a)(3), and 
                      is controlled by an organization described in 
                      section 509(a)(2), of that Code.
            ``(2) Eligible land.--
                    ``(A) In general.--The term `eligible land' means 
                land on a farm or ranch that--
                          ``(i)(I) has prime, unique, or other 
                      productive soil; or
                          ``(II) contains historical or archaeological 
                      resources; and
                          ``(ii) is subject to a pending offer for 
                      purchase from an eligible entity.
                    ``(B) Inclusions.--The term `eligible land' 
                includes, on a farm or ranch--
                          ``(i) cropland;
                          ``(ii) rangeland;
                          ``(iii) grassland;
                          ``(iv) pasture land; and
                          ``(v) forest land that is an incidental part 
                      of an agricultural operation, as determined by the 
                      Secretary.
            ``(3) Indian tribe.--The term `Indian tribe' has the meaning 
        given the term in section 4 of the Indian Self-Determination and 
        Education Assistance Act (25 U.S.C. 450b).
            ``(4) Program.--The term `program' means the farmland 
        protection program established under section 1238I(a).

``SEC. 1238I. <<NOTE: 16 USC 3838i.>> FARMLAND PROTECTION.

    ``(a) In General.--The Secretary, acting through the Natural 
Resources Conservation Service, shall establish and carry out a farmland 
protection program under which the Secretary shall purchase conservation 
easements or other interests in eligible land that is subject to a 
pending offer from an eligible entity for the purpose of protecting 
topsoil by limiting nonagricultural uses of the land.
    ``(b) Conservation Plan.--Any highly erodible cropland for which a 
conservation easement or other interest is purchased under this 
subchapter shall be subject to the requirements of a conservation plan 
that requires, at the option of the Secretary, the conversion of the 
cropland to less intensive uses.
    ``(c) Cost Sharing.--
            ``(1) Farmland protection.--
                    ``(A) Share provided under this subsection.--The 
                share of the cost of purchasing a conservation easement 
                or other interest in eligible land described in 
                subsection (a) provided under section 1241(d) shall not 
                exceed 50 percent of the appraised fair market value of 
                the conservation easement or other interest in eligible 
                land.
                    ``(B) Share not provided under this subsection.--As 
                part of the share of the cost of purchasing a 
                conservation easement or other interest in eligible land 
                described in subsection (a) that is not provided under 
                section 1241(d), an eligible entity may include a 
                charitable donation by the private landowner from which 
                the eligible land is to be purchased of not more than 25 
                percent of the fair

[[Page 116 STAT. 269]]

                market value of the conservation easement or other 
                interest in eligible land.
            ``(2) Bidding down.--If the Secretary determines that 2 or 
        more applications for the purchase of a conservation easement or 
        other interest in eligible land described in subsection (a) are 
        comparable in achieving the purposes of this section, the 
        Secretary shall not assign a higher priority to any 1 of those 
        applications solely on the basis of lesser cost to the farmland 
        protection program established under subsection (a).

``SEC. 1238J. <<NOTE: 16 USC 3838j.>> FARM VIABILITY PROGRAM.

    ``(a) In General.--The Secretary may provide to eligible entities 
identified by the Secretary grants for use in carrying out farm 
viability programs developed by the eligible entities and approved by 
the Secretary.
    ``(b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out this section such sums as are 
necessary for each of fiscal years 2002 through 2007.''.
    (b) Conforming Amendments.--
            (1) In general.--
                    (A) Section 388 of the Federal Agriculture 
                Improvement and Reform Act of 1996 (16 U.S.C. 3830 note; 
                Public Law 104-127) is repealed.
                    (B) Section 211 of the Agriculture Risk Protection 
                Act of 2000 (16 U.S.C. 3830 note; Public Law 106-224) is 
                amended--
                          (i) by striking subsection (a); and
                          (ii) in subsection (b)--
                                    (I) by striking the subsection 
                                designation and the subsection heading;
                                    (II) by redesignating paragraphs 
                                (1), (2), and (3) as subsections (a), 
                                (b), and (c), respectively, and 
                                indenting appropriately;
                                    (III) in subsection (a) (as so 
                                redesignated), by redesignating 
                                subparagraphs (A), (B), and (C) as 
                                paragraphs (1), (2), and (3), 
                                respectively, and indenting 
                                appropriately;
                                    (IV) in subsection (b) (as so 
                                redesignated), by striking 
                                ``assistance'' and inserting 
                                ``Assistance''; and
                                    (V) by striking ``subsection'' each 
                                place it appears and inserting 
                                ``section''.
            (2) Effect <<NOTE: 16 USC 3830 note.>>  on contracts.--The 
        amendment made by paragraph (1)(A) shall have no effect on any 
        contract entered into under section 388 of the Federal 
        Agriculture Improvement and Reform Act of 1996 (16 U.S.C. 3830 
        note) that is in effect as of the date of enactment of this Act.

SEC. 2504. RESOURCE CONSERVATION AND DEVELOPMENT PROGRAM.

    Subtitle H of title XV of the Agriculture and Food Act of 1981 (16 
U.S.C. 3451 et seq.) is amended to read as follows:

[[Page 116 STAT. 270]]

       ``Subtitle H--Resource Conservation and Development Program

``SEC. 1528. <<NOTE: 16 USC 3451.>> DEFINITIONS.

    ``In this subtitle:
            ``(1) Area plan.--The term `area plan' means a resource 
        conservation and use plan developed through a planning process 
        by a council for a designated area of 1 or more States, or of 
        land under the jurisdiction of an Indian tribe, that includes 1 
        or more of the following elements:
                    ``(A) A land conservation element, the purpose of 
                which is to control erosion and sedimentation.
                    ``(B) A water management element that provides 1 or 
                more clear environmental or conservation benefits, the 
                purpose of which is to provide for--
                          ``(i) the conservation, use, and quality of 
                      water, including irrigation and rural water 
                      supplies;
                          ``(ii) the mitigation of floods and high water 
                      tables;
                          ``(iii) the repair and improvement of 
                      reservoirs;
                          ``(iv) the improvement of agricultural water 
                      management; and
                          ``(v) the improvement of water quality.
                    ``(C) A community development element, the purpose 
                of which is to improve--
                          ``(i) the development of resources-based 
                      industries;
                          ``(ii) the protection of rural industries from 
                      natural resource hazards;
                          ``(iii) the development of adequate rural 
                      water and waste disposal systems;
                          ``(iv) the improvement of recreation 
                      facilities;
                          ``(v) the improvement in the quality of rural 
                      housing;
                          ``(vi) the provision of adequate health and 
                      education facilities;
                          ``(vii) the satisfaction of essential 
                      transportation and communication needs; and
                          ``(viii) the promotion of food security, 
                      economic development, and education.
                    ``(D) A land management element, the purpose of 
                which is--
                          ``(i) energy conservation, including the 
                      production of energy crops;
                          ``(ii) the protection of agricultural land, as 
                      appropriate, from conversion to other uses;
                          ``(iii) farmland protection; and
                          ``(iv) the protection of fish and wildlife 
                      habitats.
            ``(2) Board.--The term `Board' means the Resource 
        Conservation and Development Policy Advisory Board established 
        under section 1533(a).
            ``(3) Council.--The term `council' means a nonprofit entity 
        (including an affiliate of the entity) operating in a State that 
        is--
                    ``(A) established by volunteers or representatives 
                of States, local units of government, Indian tribes, or 
                local nonprofit organizations to carry out an area plan 
                in a designated area; and

[[Page 116 STAT. 271]]

                    ``(B) designated by the chief executive officer or 
                legislature of the State to receive technical assistance 
                and financial assistance under this subtitle.
            ``(4) Designated area.--The term `designated area' means a 
        geographic area designated by the Secretary to receive technical 
        assistance and financial assistance under this subtitle.
            ``(5) Financial assistance.--The term `financial assistance' 
        means a grant or loan provided by the Secretary (or the 
        Secretary and other Federal agencies) to, or a cooperative 
        agreement entered into by the Secretary (or the Secretary and 
        other Federal agencies) with, a council, or association of 
        councils, to carry out an area plan in a designated area, 
        including assistance provided for planning, analysis, 
        feasibility studies, training, education, and other activities 
        necessary to carry out the area plan.
            ``(6) Indian tribe.--The term `Indian tribe' has the meaning 
        given the term in section 4 of the Indian Self-Determination and 
        Education Assistance Act (25 U.S.C. 450b).
            ``(7) Local unit of government.--The term `local unit of 
        government' means--
                    ``(A) any county, city, town, township, parish, 
                village, or other general-purpose subdivision of a 
                State; and
                    ``(B) any local or regional special district or 
                other limited political subdivision of a State, 
                including any soil conservation district, school 
                district, park authority, and water or sanitary 
                district.
            ``(8) Nonprofit organization.--The term `nonprofit 
        organization' means any organization that is--
                    ``(A) described in section 501(c) of the Internal 
                Revenue Code of 1986; and
                    ``(B) exempt from taxation under section 501(a) of 
                the Internal Revenue Code of 1986.
            ``(9) Planning process.--The term `planning process' means 
        actions taken by a council to develop and carry out an effective 
        area plan in a designated area, including development of the 
        area plan, goals, purposes, policies, implementation activities, 
        evaluations and reviews, and the opportunity for public 
        participation in the actions.
            ``(10) Project.--The term `project' means a project that is 
        carried out by a council to achieve any of the elements of an 
        area plan.
            ``(11) Secretary.--The term `Secretary' means the Secretary 
        of Agriculture.
            ``(12) State.--The term `State' means--
                    ``(A) any State;
                    ``(B) the District of Columbia; or
                    ``(C) any territory or possession of the United 
                States.
            ``(13) Technical assistance.--The term `technical 
        assistance' means any service provided by the Secretary or agent 
        of the Secretary, including--
                    ``(A) inventorying, evaluating, planning, designing, 
                supervising, laying out, and inspecting projects;
                    ``(B) providing maps, reports, and other documents 
                associated with the services provided;
                    ``(C) providing assistance for the long-term 
                implementation of area plans; and

[[Page 116 STAT. 272]]

                    ``(D) providing services of an agency of the 
                Department of Agriculture to assist councils in 
                developing and carrying out area plans.

``SEC. 1529. <<NOTE: 16 USC 3452.>> RESOURCE CONSERVATION AND 
            DEVELOPMENT PROGRAM.

    ``The <<NOTE: Establishment.>> Secretary shall establish a resource 
conservation and development program under which the Secretary shall 
provide technical assistance and financial assistance to councils to 
develop and carry out area plans and projects in designated areas--
            ``(1) to conserve and improve the use of land, develop 
        natural resources, and improve and enhance the social, economic, 
        and environmental conditions in primarily rural areas of the 
        United States; and
            ``(2) to encourage and improve the capability of State, 
        units of government, Indian tribes, nonprofit organizations, and 
        councils to carry out the purposes described in paragraph (1).

``SEC. 1530. <<NOTE: 16 USC 3453.>> SELECTION OF DESIGNATED AREAS.

    ``The Secretary shall select designated areas for assistance under 
this subtitle on the basis of the elements of area plans.

``SEC. 1531. <<NOTE: 16 USC 3454.>> POWERS OF THE SECRETARY.

    ``In carrying out this subtitle, the Secretary may--
            ``(1) provide technical assistance to any council to assist 
        in developing and implementing an area plan for a designated 
        area;
            ``(2) cooperate with other departments and agencies of the 
        Federal Government, States, local units of government, local 
        Indian tribes, and local nonprofit organizations in conducting 
        surveys and inventories, disseminating information, and 
        developing area plans;
            ``(3) assist in carrying out an area plan approved by the 
        Secretary for any designated area by providing technical 
        assistance and financial assistance to any council; and
            ``(4) enter into agreements with councils in accordance with 
        section 1532.

``SEC. 1532. <<NOTE: 16 USC 3455.>> ELIGIBILITY; TERMS AND CONDITIONS.

    ``(a) Eligibility.--Technical assistance and financial assistance 
may be provided by the Secretary under this subtitle to any council to 
assist in carrying out a project specified in an area plan approved by 
the Secretary only if--
            ``(1) the council agrees in writing--
                    ``(A) to carry out the project; and
                    ``(B) to finance or arrange for financing of any 
                portion of the cost of carrying out the project for 
                which financial assistance is not provided by the 
                Secretary under this subtitle;
            ``(2) the project is included in an area plan and is 
        approved by the council;
            ``(3) the Secretary determines that assistance is necessary 
        to carry out the area plan;
            ``(4) the project provided for in the area plan is 
        consistent with any comprehensive plan for the area;
            ``(5) the cost of the land or an interest in the land 
        acquired or to be acquired under the plan by any State, local 
        unit of government, Indian tribe, or local nonprofit 
        organization

[[Page 116 STAT. 273]]

        is borne by the State, local unit of government, Indian tribe, 
        or local nonprofit organization, respectively; and
            ``(6) the State, local unit of government, Indian tribe, or 
        local nonprofit organization participating in the area plan 
        agrees to maintain and operate the project.

    ``(b) Loans.--
            ``(1) In general.--Subject to paragraphs (2) and (3), a loan 
        made under this subtitle shall be made on such terms and 
        conditions as the Secretary may prescribe.
            ``(2) Term.--A loan for a project made under this subtitle 
        shall have a term of not more than 30 years after the date of 
        completion of the project.
            ``(3) Interest rate.--A loan made under this subtitle shall 
        bear interest at the average rate of interest paid by the United 
        States on obligations of a comparable term, as determined by the 
        Secretary of the Treasury.

    ``(c) Approval by Secretary.--Technical assistance and financial 
assistance under this subtitle may not be made available to a council to 
carry out an area plan unless the area plan has been submitted to and 
approved by the Secretary.
    ``(d) Withdrawal.--The Secretary may withdraw technical assistance 
and financial assistance with respect to any area plan if the Secretary 
determines that the assistance is no longer necessary or that sufficient 
progress has not been made toward developing or implementing the 
elements of the area plan.

``SEC. 1533. <<NOTE: 16 USC 3456.>>  RESOURCE CONSERVATION AND 
            DEVELOPMENT POLICY ADVISORY BOARD.

    ``(a) Establishment.--The Secretary shall establish within the 
Department of Agriculture a Resource Conservation and Development Policy 
Advisory Board.
    ``(b) Composition.--
            ``(1) In general.--The Board shall be composed of at least 7 
        employees of the Department of Agriculture selected by the 
        Secretary.
            ``(2) Chairperson.--A member of the Board shall be 
        designated by the Secretary to serve as chairperson of the 
        Board.

    ``(c) Duties.--The Board shall advise the Secretary regarding the 
administration of this subtitle, including the formulation of policies 
for carrying out this subtitle.

``SEC. 1534. <<NOTE: 16 USC 3457.>> EVALUATION OF PROGRAM.

    ``(a) In General.--The Secretary, in consultation with councils, 
shall evaluate the program established under this subtitle to determine 
whether the program is effectively meeting the needs of, and the 
purposes identified by, States, units of government, Indian tribes, 
nonprofit organizations, and councils participating in, or served by, 
the program.
    ``(b) Report.--Not <<NOTE: Deadline.>> later than June 30, 2005, 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 describing the results of the 
evaluation, together with any recommendations of the Secretary for 
continuing, terminating, or modifying the program.

[[Page 116 STAT. 274]]

``SEC. 1535. <<NOTE: 16 USC 3458.>> LIMITATION ON ASSISTANCE.

    ``In carrying out this subtitle, the Secretary shall provide 
technical assistance and financial assistance with respect to not more 
than 450 active designated areas.

``SEC. 1536. <<NOTE: 16 USC 3459.>> SUPPLEMENTAL AUTHORITY OF THE 
            SECRETARY.

    ``The authority of the Secretary under this subtitle to assist 
councils in the development and implementation of area plans shall be 
supplemental to, and not in lieu of, any authority of the Secretary 
under any other provision of law.

``SEC. 1537. <<NOTE: 16 USC 3460.>> AUTHORIZATION OF APPROPRIATIONS.

    ``(a) In General.--There are authorized to be such sums as are 
necessary to carry out this subtitle.
    ``(b) Loans.--The Secretary shall not use more than $15,000,000 of 
any funds made available for a fiscal year to make loans under this 
subtitle.
    ``(c) Availability.--Funds appropriated to carry out this subtitle 
shall remain available until expended.''.

SEC. 2505. SMALL WATERSHED REHABILITATION PROGRAM.

    Section 14 of the Watershed Protection and Flood Prevention Act (16 
U.S.C. 1012) is amended by striking subsection (h) and inserting the 
following:
    ``(h) Funding.--
            ``(1) Funds of commodity credit corporation.--In carrying 
        out this section, of the funds of the Commodity Credit 
        Corporation, the Secretary shall make available, to remain 
        available until expended--
                    ``(A) $45,000,000 for fiscal year 2003;
                    ``(B) $50,000,000 for fiscal year 2004;
                    ``(C) $55,000,000 for fiscal year 2005;
                    ``(D) $60,000,000 for fiscal year 2006;
                    ``(E) $65,000,000 for fiscal year 2007; and
                    ``(F) $0 for fiscal year 2008.
            ``(2) Authorization of appropriations.--In addition to 
        amounts made available under paragraph (1), there are authorized 
        to be appropriated to the Secretary to carry out this section, 
        to remain available until expended--
                    ``(A) $45,000,000 for fiscal year 2003;
                    ``(B) $55,000,000 for fiscal year 2004;
                    ``(C) $65,000,000 for fiscal year 2005;
                    ``(D) $75,000,000 for fiscal year 2006; and
                    ``(E) $85,000,000 for fiscal year 2007.''.

SEC. 2506. USE OF SYMBOLS, SLOGANS, AND LOGOS.

    Section 356 of the Federal Agriculture Improvement Act of 1996 (16 
U.S.C. <<NOTE: 16 USC 5805.>>  5801 et seq.) is amended--
            (1) in subsection (c)--
                    (A) by redesignating paragraphs (4) through (7) as 
                paragraphs (5) through (8), respectively; and
                    (B) by inserting after paragraph (3) the following:
            ``(4) on the written approval of the Secretary, to use, 
        license, or transfer symbols, slogans, and logos of the 
        Foundation (exclusive of any symbol or logo of a governmental 
        entity);''; and
            (2) in subsection (d), by adding at the end the following:
            ``(3) Use of symbols, slogans, and logos of the 
        foundation.--

[[Page 116 STAT. 275]]

                    ``(A) In general.--The Secretary may authorize the 
                Foundation to use, license, or transfer symbols, 
                slogans, and logos of the Foundation.
                    ``(B) Income.--
                          ``(i) In general.--All revenue received by the 
                      Foundation from the use, licensing, or transfer of 
                      symbols, slogans, and logos of the Foundation 
                      shall be transferred to the Secretary.
                          ``(ii) Conservation operations.--The Secretary 
                      shall transfer all revenue received under clause 
                      (i) to the account within the Natural Resources 
                      Conservation Service that is used to carry out 
                      conservation operations.''.

SEC. 2507. <<NOTE: 43 USC 2211 note.>>  DESERT TERMINAL LAKES.

    ``(a) In General.--Subject to subsection (b), as soon as practicable 
after the date of enactment of this Act, the Secretary of Agriculture 
shall transfer $200,000,000 of the funds of the Commodity Credit 
Corporation to the Bureau of Reclamation Water and Related Resources 
Account, which funds shall--
            ``(1) be used by the Secretary of the Interior, acting 
        through the Commissioner of Reclamation, to provide water to at-
        risk natural desert terminal lakes; and
            ``(2) remain available until expended.

    ``(b) Limitation.--The funds described in subsection (a) shall not 
be used to purchase or lease water rights.

         Subtitle G--Conservation Corridor Demonstration Program

SEC. 2601. <<NOTE: 16 USC 3801 note.>> DEFINITIONS.

    In this subtitle:
            (1) Delmarva peninsula.--The term ``Delmarva Peninsula'' 
        means land in the States of Delaware, Maryland, and Virginia 
        located on the east side of the Chesapeake Bay.
            (2) Demonstration program.--The term ``demonstration 
        program'' means the Conservation Corridor Demonstration Program 
        established under this subtitle.
            (3) Conservation corridor plan; plan.--The terms 
        ``conservation corridor plan'' and ``plan'' mean a conservation 
        corridor plan required to be submitted and approved as a 
        condition for participation in the demonstration program.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.

SEC. 2602. <<NOTE: 16 USC 3801 note.>> CONSERVATION CORRIDOR 
            DEMONSTRATION PROGRAM.

    (a) Establishment.--The Secretary shall carry out a demonstration 
program, to be known as the ``Conservation Corridor Demonstration 
Program'', under which any of the States of Delaware, Maryland, and 
Virginia, a local government of any 1 of those States with jurisdiction 
over land on the Delmarva Peninsula, or a combination of those States, 
may submit a conservation corridor plan to integrate agriculture and 
forestry conservation programs of the Department of Agriculture with 
State and local efforts to address farm conservation needs.
    (b) Submission of Conservation Corridor Plan.--

[[Page 116 STAT. 276]]

            (1) Submission and proposal.--To be eligible to participate 
        in the demonstration program, a State, local government, or 
        combination of States referred to in subsection (a) shall--
                    (A) submit to the Secretary a conservation corridor 
                plan that--
                          (i) proposes specific criteria and commitment 
                      of resources in the geographic region designated 
                      in the plan; and
                          (ii) describes how the linkage of Federal, 
                      State, and local resources will improve--
                                    (I) the economic viability of 
                                agriculture; and
                                    (II) the environmental integrity of 
                                the watersheds in the Delmarva 
                                Peninsula; and
                    (B) demonstrate to the Secretary that, in developing 
                the plan, the State, local government, or combination of 
                States has solicited and taken into account the views of 
                local residents.
            (2) Draft memorandum of agreement.--If the conservation 
        corridor plan is submitted by more than 1 State, the plan shall 
        provide a draft memorandum of agreement among entities in each 
        submitting State.

    (c) Review <<NOTE: Deadline.>> of Plan.--Not later than 90 days 
after the date of receipt of a conservation corridor plan, the 
Secretary--
            (1) shall review the plan; and
            (2) may approve the plan for implementation under this 
        subtitle if the Secretary determines that the plan meets the 
        requirements specified in subsection (d).

    (d) Criteria for Approval.--The Secretary may approve a conservation 
corridor plan only if, as determined by the Secretary, the plan provides 
for each of the following:
            (1) Voluntary actions.--Actions taken under the plan--
                    (A) are voluntary;
                    (B) require the consent of willing landowners; and
                    (C) provide a mechanism by which the landowner may 
                withdraw such consent without adverse consequences other 
                than the loss of any payments to the landowner 
                conditioned on continued enrollment of the land.
            (2) Land of high conservation value.--Criteria specified in 
        the plan ensure that land enrolled in each conservation program 
        incorporated through the plan are of exceptionally high 
        conservation value, as determined by the Secretary.
            (3) No effect on unenrolled land.--The enrollment of land in 
        a conservation program incorporated through the plan will 
        neither--
                    (A) adversely affect any adjacent land not so 
                enrolled; nor
                    (B) create any buffer zone on such unenrolled land.
            (4) Greater benefits.--The conservation programs 
        incorporated through the plan provide benefits greater than the 
        benefits that would likely be achieved through individual 
        application of the conservation programs.
            (5) Sufficient staffing.--Staffing, considering both Federal 
        and non-Federal resources, is sufficient to ensure success of 
        the plan.

[[Page 116 STAT. 277]]

SEC. 2603. <<NOTE: 16 USC 3801 note.>>  IMPLEMENTATION OF CONSERVATION 
            CORRIDOR PLAN.

    (a) Memorandum of Agreement.--On approval of a conservation corridor 
plan, the Secretary may enter into a memorandum of agreement with the 
State, local government, or combination of States that submitted the 
plan to--
            (1) guarantee specific program resources for implementation 
        of the plan;
            (2) establish various compensation rates to the extent that 
        the parties to the agreement consider justified; and
            (3) provide streamlined and integrated paperwork 
        requirements.

    (b) Continued Compliance With Plan Approval Criteria.--The Secretary 
shall terminate the memorandum of agreement entered into under 
subsection (a) with respect to an approved conservation corridor plan 
and cease the provision of resources for implementation of the plan if 
the Secretary determines that, in the implementation of the plan--
            (1) the State, local government, or combination of States 
        that submitted the plan has deviated from--
                    (A) the plan;
                    (B) the criteria specified in section 2602(d) on 
                which approval of the plan was conditioned; or
                    (C) the cost-sharing requirements of section 2604(a) 
                or any other condition of the plan; or
            (2) the economic viability of agriculture in the geographic 
        region designated in the plan is being hindered.

    (c) Progress Report.--At the end of the 3-year period that begins on 
the date on which funds are first provided with respect to a 
conservation corridor plan under the demonstration program, the State, 
local government, or combination of States that submitted the plan shall 
submit to the Secretary--
            (1) a report on the effectiveness of the activities carried 
        out under the plan; and
            (2) an evaluation of the economic viability of agriculture 
        in the geographic region designated in the plan.

    (d) Duration.--The demonstration program shall be carried out for 
not less than 3 nor more than 5 years beginning on the date on which 
funds are first provided under the demonstration program.

SEC. 2604. <<NOTE: 16 USC 3801 note.>> FUNDING REQUIREMENTS.

    (a) Cost Sharing.--
            (1) Required non-federal share.--Subject to paragraph (2), 
        as a condition on the approval of a conservation corridor plan, 
        the Secretary shall require the State and local participants to 
        contribute financial resources sufficient to cover at least 50 
        percent of the total cost of the activities carried out under 
        the plan.
            (2) Exception.--The Secretary may reduce the cost-sharing 
        requirement in the case of a specific project or activity under 
        the demonstration program on good cause and on demonstration 
        that the project or activity is likely to achieve extraordinary 
        natural resource benefits.

    (b) Reservation of Funds.--The Secretary may consider directing 
funds on a priority basis to the demonstration program and to projects 
in areas identified by the plan.

[[Page 116 STAT. 278]]

    (c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this subtitle for 
each of fiscal years 2002 through 2007.

                 Subtitle H--Funding and Administration

SEC. 2701. FUNDING AND ADMINISTRATION.

    Subtitle E of the Food Security Act of 1985 is amended by striking 
sections 1241 and 1242 (16 U.S.C. 3841, 3842) and inserting the 
following:

``SEC. 1241. <<NOTE: 16 USC 3841.>> COMMODITY CREDIT CORPORATION.

    ``(a) In General.--For each of fiscal years 2002 through 2007, the 
Secretary shall use the funds, facilities, and authorities of the 
Commodity Credit Corporation to carry out the following programs under 
subtitle D (including the provision of technical assistance):
            ``(1) The conservation reserve program under subchapter B of 
        chapter 1.
            ``(2) The wetlands reserve program under subchapter C of 
        chapter 1.
            ``(3) The conservation security program under subchapter A 
        of chapter 2.
            ``(4) The farmland protection program under subchapter B of 
        chapter 2, using, to the maximum extent practicable--
                    ``(A) $50,000,000 in fiscal year 2002;
                    ``(B) $100,000,000 in fiscal year 2003;
                    ``(C) $125,000,000 in each of fiscal years 2004 and 
                2005;
                    ``(D) $100,000,000 in fiscal year 2006; and
                    ``(E) $97,000,000 in fiscal year 2007.
            ``(5) The grassland reserve program under subchapter C of 
        chapter 2, using, to the maximum extent practicable $254,000,000 
        for the period of fiscal years 2003 through 2007.
            ``(6) The environmental quality incentives program under 
        chapter 4, using, to the maximum extent practicable--
                    ``(A) $400,000,000 in fiscal year 2002;
                    ``(B) $700,000,000 in fiscal year 2003;
                    ``(C) $1,000,000,000 in fiscal year 2004;
                    ``(D) $1,200,000,000 in each of fiscal years 2005 
                and 2006; and
                    ``(E) $1,300,000,000 in fiscal year 2007.
            ``(7) The wildlife habitat incentives program under section 
        1240N, using, to the maximum extent practicable--
                    ``(A) $15,000,000 in fiscal year 2002;
                    ``(B) $30,000,000 in fiscal year 2003;
                    ``(C) $60,000,000 in fiscal year 2004; and
                    ``(D) $85,000,000 in each of fiscal years 2005 
                through 2007.

    ``(b) Section 11.--Nothing in this section affects the limit on 
expenditures for technical assistance imposed by section 11 of the 
Commodity Credit Corporation Charter Act (15 U.S.C. 714i).
    ``(c) Regional Equity.--Before April 1 of each fiscal year, the 
Secretary shall give priority for funding under the conservation

[[Page 116 STAT. 279]]

programs under subtitle D (excluding the conservation reserve program 
under subchapter B of chapter 1, the wetlands reserve program under 
subchapter C of chapter 1, and the conservation security program under 
subchapter A of chapter 2) to approved applications in any State that 
has not received, for the fiscal year, an aggregate amount of at least 
$12,000,000 for those conservation programs.

``SEC. 1242. <<NOTE: 16 USC 3842.>>  DELIVERY OF TECHNICAL ASSISTANCE.

    ``(a) In General.--The Secretary shall provide technical assistance 
under this title to a producer eligible for that assistance--
            ``(1) directly; or
            ``(2) at the option of the producer, through a payment, as 
        determined by the Secretary, to the producer for an approved 
        third party, if available.

    ``(b) Certification of Third-Party Providers.--
            ``(1) In general.--Not <<NOTE: Deadline.>> later than 180 
        days after the date of enactment of the Farm Security and Rural 
        Investment Act of 2002, the Secretary shall, by regulation, 
        establish a system for--
                    ``(A) approving individuals and entities to provide 
                technical assistance to carry out programs under this 
                title (including criteria for the evaluation of 
                providers or potential providers of technical 
                assistance); and
                    ``(B) establishing the amounts and methods for 
                payments for that assistance.
            ``(2) Expertise.--In promulgating regulations to carry out 
        this subsection the Secretary shall ensure that persons with 
        expertise in the technical aspects of conservation planning, 
        watershed planning, environmental engineering (including 
        commercial entities, nonprofit entities, State or local 
        governments or agencies, and other Federal agencies), are 
        eligible to become approved providers of the technical 
        assistance.
            ``(3) Interim assistance.--
                    ``(A) In general.--A person that has provided 
                technical assistance in accordance with an agreement 
                between the person and the Secretary before the date of 
                enactment of the Farm Security and Rural Investment Act 
                of 2002 may continue to provide technical assistance 
                under this section until the date on which the Secretary 
                establishes the system described in paragraph (1).
                    ``(B) Evaluation.--If a person described in 
                subparagraph (A) seeks to continue to provide technical 
                assistance after the date referred to in subparagraph 
                (A), the Secretary shall evaluate the person using 
                criteria referred to in paragraph (1).
            ``(4) Non-federal assistance.--The Secretary may request the 
        services of, and enter into cooperative agreements or contracts 
        with, non-Federal entities to assist the Secretary in providing 
        technical assistance necessary to develop and implement 
        conservation programs under this title.''.

SEC. 2702. <<NOTE: 16 USC 3801 note.>> REGULATIONS.

    (a) In General.--Except <<NOTE: Deadline.>>  as otherwise provided 
in this title or an amendment made by this title, not later than 90 days 
after the date of enactment of this Act, the Secretary of Agriculture, 
in consultation with the Commodity Credit Corporation, shall promulgate 
such regulations as are necessary to implement this title.

[[Page 116 STAT. 280]]

    (b) Applicable Authority.--The promulgation of regulations under 
subsection (a) and administration of this title--
            (1) shall--
                    (A) be carried out without regard to chapter 35 of 
                title 44, United States Code (commonly known as the 
                Paperwork Reduction Act); and
                    (B) the Statement of Policy of the Secretary of 
                Agriculture effective July 24, 1971 (36 Fed. Reg. 13804) 
                relating to notices of proposed rulemaking and public 
                participation in rulemaking; and
            (2) may--
                    (A) be promulgated with an opportunity for notice 
                and comment; or
                    (B) if determined to be appropriate by the Secretary 
                of Agriculture or the Commodity Credit Corporation, as 
                an interim rule effective on publication with an 
                opportunity for notice and comment.

    (c) Congressional Review of Agency Rulemaking.--In carrying out this 
section, the Secretary shall use the authority provided under section 
808(2) of title 5, United States Code.

                            TITLE III--TRADE

 Subtitle A--Agricultural Trade Development and Assistance Act of 1954 
                          and Related Statutes

SEC. 3001. UNITED STATES POLICY.

    Section 2 of the Agricultural Trade Development and Assistance Act 
of 1954 (7 U.S.C. 1691) is amended--
            (1) in paragraph (4), by striking ``and'' at the end;
            (2) in paragraph (5), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(6) prevent conflicts.''.

SEC. 3002. PROVISION OF AGRICULTURAL COMMODITIES.

    Section 202 of the Agricultural Trade Development and Assistance Act 
of 1954 (7 U.S.C. 1722) is amended--
            (1) in subsection (b), by adding at the end the following:
            ``(3) Program diversity.--The Administrator shall--
                    ``(A) encourage eligible organizations to propose 
                and implement program plans to address 1 or more aspects 
                of the program under section 201; and
                    ``(B) consider proposals that incorporate a variety 
                of program objectives and strategic plans based on the 
                identification by eligible organizations of appropriate 
                activities, consistent with section 201, to assist 
                development of foreign countries.'';
            (2) in subsection (e)(1), by striking ``not less than 
        $10,000,000, and not more than $28,000,000,'' and inserting 
        ``not less than 5 percent nor more than 10 percent of the 
        funds''; and
            (3) by adding at the end the following:

    ``(h) Streamlined Program Management.--

[[Page 116 STAT. 281]]

            ``(1) Improvements.--Not <<NOTE: Deadline.>> later than 1 
        year after the date of enactment of this subsection, the 
        Administrator shall--
                    ``(A) streamline program procedures and guidelines 
                under this title for agreements with eligible 
                organizations for programs in 1 or more countries; and
                    ``(B) effective beginning with fiscal year 2004, to 
                the maximum extent practicable, incorporate the changes 
                into the procedures and guidelines for programs and the 
                guidelines for resource requests.
            ``(2) Streamlined procedures and guidelines.--In carrying 
        out paragraph (1), the Administrator shall make improvements in 
        the Office of Food for Peace management systems that include--
                    ``(A) expedition of and greater consistency in the 
                program review and approval process under this title;
                    ``(B) streamlining of information collection and 
                reporting systems by identifying the critical 
                information that needs to be monitored and reported on 
                by eligible organizations; and
                    ``(C) for approved programs, provision of greater 
                flexibility for an eligible organization to make 
                modifications in program activities to achieve program 
                results with streamlined procedures for reporting such 
                modifications.
            ``(3) Consultation.--
                    ``(A) In general.--Paragraphs (1) and (2) shall be 
                carried out in accordance with section 205 and 
                subsections (b) and (c) of section 207.
                    ``(B) Consultation with congressional committees.--
                Not later than 180 days <<NOTE: Deadline.>> after the 
                date of enactment of this subsection, the Administrator 
                shall consult with the Committee on Agriculture and the 
                Committee on International Relations of the House of 
                Representatives and the Committee on Agriculture, 
                Nutrition, and Forestry of the Senate on progress made 
                in carrying out this subsection.
            ``(4) Report.--Not <<NOTE: Deadline.>> later than 270 days 
        after the date of enactment of this subsection, the 
        Administrator shall submit to the Committee on Agriculture and 
        the Committee on International Relations of the House of 
        Representatives and the Committee on Agriculture, Nutrition, and 
        Forestry of the Senate a report on the improvements made and 
        planned upgrades in the information management, procurement, and 
        financial management systems to administer this title.''.

SEC. 3003. GENERATION AND USE OF CURRENCIES BY PRIVATE VOLUNTARY 
            ORGANIZATIONS AND COOPERATIVES.

    Section 203 of the Agricultural Trade Development and Assistance Act 
of 1954 (7 U.S.C. 1723) is amended--
            (1) in the section heading, by striking ``foreign'';
            (2) in subsection (a), by striking ``the recipient country, 
        or in a country'' and inserting ``1 or more recipient countries, 
        or 1 or more countries'';
            (3) in subsection (b)--
                    (A) by striking ``in recipient countries, or in 
                countries'' and inserting ``1 or more recipient 
                countries, or in 1 or more countries''; and
                    (B) by striking ``foreign currency'';

[[Page 116 STAT. 282]]

            (4) in subsection (c)--
                    (A) by striking ``foreign currency''; and
                    (B) by striking ``the recipient country, or in a 
                country'' and inserting ``1 or more recipient countries, 
                or in 1 or more countries''; and
            (5) in subsection (d)--
                    (A) by striking ``Foreign currencies'' and inserting 
                ``Proceeds'';
                    (B) in paragraph (2)--
                          (i) by striking ``income generating'' and 
                      inserting ``income-generating''; and
                          (ii) by striking ``the recipient country or 
                      within a country'' and inserting ``1 or more 
                      recipient countries or within 1 or more 
                      countries''; and
                    (C) in paragraph (3)--
                          (i) by inserting a comma after ``invested''; 
                      and
                          (ii) by inserting a comma after ``used''.

SEC. 3004. LEVELS OF ASSISTANCE.

    Section 204(a) of the Agricultural Trade Development and Assistance 
Act of 1954 (7 U.S.C. 1724(a)) is amended--
            (1) by striking ``1996 through 2002'' each place it appears 
        and inserting ``2002 through 2007'';
            (2) in paragraph (1), by striking ``2,025,000'' and 
        inserting ``2,500,000''; and
            (3) in paragraph (2), by striking ``1,550,000 metric tons'' 
        and inserting ``1,875,000 metric tons''.

SEC. 3005. FOOD AID CONSULTATIVE GROUP.

    Section 205(f) of the Agricultural Trade Development and Assistance 
Act of 1954 (7 U.S.C. 1725(f)) is amended by striking ``2002'' and 
inserting ``2007''.

SEC. 3006. MAXIMUM LEVEL OF EXPENDITURES.

    Section 206 of the Agricultural Trade Development and Assistance Act 
of 1954 (7 U.S.C. 1726) is repealed.

SEC. 3007. ADMINISTRATION.

    Section 207 of the Agricultural Trade Development and Assistance Act 
of 1954 (7 U.S.C. 1726a) is amended--
            (1) in subsection (a)--
                    (A) by redesignating paragraph (2) as paragraph (3); 
                and
                    (B) by striking paragraph (1) and inserting the 
                following:
            ``(1) Recipient countries.--A proposal to enter into a 
        nonemergency food assistance agreement under this title shall 
        identify the recipient country or countries that are the subject 
        of the agreement.
            ``(2) Timing.--Not <<NOTE: Deadline.>> later than 120 days 
        after the date of receipt by the Administrator of a proposal 
        submitted by an eligible organization under this title, the 
        Administrator shall determine whether to accept the proposal.'';
            (2) in subsection (b), by striking ``guideline'' each place 
        it appears and inserting ``guideline or annual policy 
        guidance''; and
            (3) by adding at the end the following:

    ``(e) Timely Approval.--

[[Page 116 STAT. 283]]

            ``(1) In general.--The Administrator is encouraged to 
        finalize program agreements and resource requests for programs 
        under this section before the beginning of each fiscal year.
            ``(2) Report.--Not <<NOTE: Deadline.>> later than December 1 
        of each year, the Administrator shall submit to the Committee on 
        Agriculture and the Committee on International Relations of the 
        House of Representatives and the Committee on Agriculture, 
        Nutrition, and Forestry of the Senate a report that contains--
                    ``(A) a list of programs, countries, and commodities 
                approved to date for assistance under this section; and
                    ``(B) a statement of the total amount of funds 
                approved to date for transportation and administrative 
                costs under this section.''.

SEC. 3008. ASSISTANCE FOR STOCKPILING AND RAPID TRANSPORTATION, 
            DELIVERY, AND DISTRIBUTION OF SHELF-STABLE PREPACKAGED 
            FOODS.

    Section 208(f) of the Agricultural Trade Development and Assistance 
Act of 1954 (7 U.S.C. 1726b(f)) is amended by striking ``and 2002'' and 
inserting ``through 2007''.

SEC. 3009. SALE PROCEDURE.

    (a) In General.--Section 403 of the Agricultural Trade Development 
and Assistance Act of 1954 (7 U.S.C. 1733) is amended--
            (1) in subsection (e)--
                    (A) by striking ``In carrying'' and inserting the 
                following:
            ``(1) In general.--In carrying''; and
                    (B) by adding at the end the following:
            ``(2) Sale price.--Sales of agricultural commodities 
        described in paragraph (1) shall be made at a reasonable market 
        price in the economy where the agricultural commodity is to be 
        sold, as determined by the Secretary or the Administrator, as 
        appropriate.''; and
            (2) by adding at the end the following:

    ``(l) Sale Procedure.--
            ``(1) In general.--Subsections (b) and (h) shall apply to 
        sales of commodities in recipient countries to generate proceeds 
        to carry out projects under--
                    ``(A) titles I and II;
                    ``(B) section 416(b) of the Agricultural Act of 1949 
                (7 U.S.C. 1431(b)); and
                    ``(C) the Food for Progress Act of 1985 (7 U.S.C. 
                1736o).
            ``(2) Currency.--A sale described in paragraph (1) may be 
        made in United States dollars or other currencies.''.

    (b) Conforming Amendments.--
            (1) Section 416(b) of the Agricultural Act of 1949 (7 U.S.C. 
        1431(b)) is amended by adding at the end the following:
            ``(10) Sale procedure.--In approving sales of commodities 
        under this subsection, the Secretary shall follow the sale 
        procedure described in section 403(l) of the Agricultural Trade 
        Development and Assistance Act of 1954.''.
            (2) Subsection (f) of the Food for Progress Act of 1985 (7 
        U.S.C. 1736o(f)) is amended by adding at the end the following:

[[Page 116 STAT. 284]]

            ``(5) Sale procedure.--In making sales of eligible 
        commodities under this section, the Secretary shall follow the 
        sale procedure described in section 403(l) of the Agricultural 
        Trade Development and Assistance Act of 1954.''.

SEC. 3010. PREPOSITIONING.

    Section 407(c)(4) of the Agricultural Trade Development and 
Assistance Act of 1954 (7 U.S.C. 1736a(c)(4)) is amended by striking 
``and 2002'' and inserting ``through 2007''.

SEC. 3011. TRANSPORTATION AND RELATED COSTS.

    Section 407(c)(1) of the Agricultural Trade Development and 
Assistance Act of 1954 (7 U.S.C. 1736a(c)(1)) is amended--
            (1) by striking ``The Administrator'' and inserting the 
        following:
                    ``(A) In general.--The Administrator''; and
            (2) by adding at the end the following:
            ``(B) Certain commodities made available for nonemergency 
        assistance.--In the case of agricultural commodities made 
        available for nonemergency assistance under title II for least 
        developed countries that meet the poverty and other eligibility 
        criteria established by the International Bank for 
        Reconstruction and Development for financing under the 
        International Development Association, the Administrator may pay 
        the transportation costs incurred in moving the agricultural 
        commodities from designated points of entry or ports of entry 
        abroad to storage and distribution sites and associated storage 
        and distribution costs.''.

SEC. 3012. EXPIRATION DATE.

    Section 408 of the Agricultural Trade Development and Assistance Act 
of 1954 (7 U.S.C. 1736b) is amended by striking ``2002'' and inserting 
``2007''.

SEC. 3013. MICRONUTRIENT FORTIFICATION PROGRAMS.

    Section 415 of the Agricultural Trade Development and Assistance Act 
of 1954 (7 U.S.C. 1736g-2) is amended--
            (1) in the section heading, by striking ``pilot program.'' 
        and inserting ``programs.'';
            (2) in subsection (a)--
                    (A) by redesignating paragraphs (1) and (2) as 
                subparagraphs (A) and (B), respectively, and adjusting 
                the margins appropriately;
                    (B) by striking the first sentence and inserting the 
                following:
            ``(1) Programs.--Not <<NOTE: Deadline.>> later than 
        September 30, 2003, the Administrator, in consultation with the 
        Secretary, shall establish micronutrient fortification 
        programs.''; and
                    (C) in the second sentence, by striking ``The 
                purpose of the program'' and inserting the following:
            ``(2) Purpose.--The purpose of a program''; and
                    (D) in paragraph (2) (as designated by subparagraph 
                (C))--
                          (i) in subparagraph (A), by striking ``and'' 
                      at the end;
                          (ii) in subparagraph (B)--
                                    (I) by striking ``whole''; and

[[Page 116 STAT. 285]]

                                    (II) by striking the period at the 
                                end and inserting ``; and''; and
                          (iii) by adding at the end the following:
                    ``(C) assess and apply technologies and systems to 
                improve and ensure the quality, shelf life, 
                bioavailability, and safety of fortified food aid 
                commodities, and products of those commodities, that are 
                provided to developing countries, by using the same 
                mechanism that was used to assess the micronutrient 
                fortification program in the report entitled 
                `Micronutrient Compliance Review of Fortified P.L. 480 
                Commodities', published October 2001 with funds from the 
                Bureau for Humanitarian Response of the United States 
                Agency for International Development.'';
            (3) in subsection (b), by striking ``the pilot program'' and 
        inserting ``a program under this section'';
            (4) in the first sentence of subsection (c)--
                    (A) by striking ``the pilot program, whole'' and 
                inserting ``a program,'';
                    (B) by striking ``the pilot program may'' and 
                inserting ``a program may'';
                    (C) by striking ``including'' and inserting ``such 
                as''; and
                    (D) by striking ``and iodine'' and inserting 
                ``iodine, and folic acid''; and
            (5) in subsection (d)--
                    (A) by striking ``the pilot program'' and inserting 
                ``programs''; and
                    (B) by striking ``2002'' and inserting ``2007''.

SEC. 3014. JOHN OGONOWSKI FARMER-TO-FARMER PROGRAM.

    Section 501 of the Agricultural Trade Development and Assistance Act 
of 1954 (7 U.S.C. 1737) is amended to read as follows:

``SEC. 501. JOHN OGONOWSKI FARMER-TO-FARMER PROGRAM.

    ``(a) Definitions.--In this section:
            ``(1) Caribbean basin country.--The term `Caribbean Basin 
        country' means a country eligible for designation as a 
        beneficiary country under section 212 of the Caribbean Basin 
        Economic Recovery Act (19 U.S.C. 2702).
            ``(2) Emerging market.--The term `emerging market' means a 
        country that the Secretary determines--
                    ``(A) is taking steps toward a market-oriented 
                economy through the food, agriculture, or rural business 
                sectors of the economy of the country; and
                    ``(B) has the potential to provide a viable and 
                significant market for United States agricultural 
                commodities or products of United States agricultural 
                commodities.
            ``(3) Middle income country.--The term `middle income 
        country' means a country that has developed economically to the 
        point at which the country does not receive bilateral 
        development assistance from the United States.
            ``(4) Sub-saharan african country.--The term `sub-Saharan 
        African country' has the meaning given the term in section 107 
        of the Trade and Development Act of 2000 (19 U.S.C. 3706).

    ``(b) Provision.--Notwithstanding any other provision of law, to 
further assist developing countries, middle-income countries, emerging 
markets, sub-Saharan African countries, and Caribbean

[[Page 116 STAT. 286]]

Basin countries to increase farm production and farmer incomes, the 
President may--
            ``(1) establish and administer a program, to be known as the 
        `John Ogonowski Farmer-to-Farmer Program', of farmer-to-farmer 
        assistance between the United States and such countries to 
        assist in--
                    ``(A) increasing food production and distribution; 
                and
                    ``(B) improving the effectiveness of the farming and 
                marketing operations of agricultural producers in those 
                countries;
            ``(2) use United States agricultural producers, 
        agriculturalists, colleges and universities (including 
        historically black colleges and universities, land grant 
        colleges or universities, and foundations maintained by colleges 
        or universities), private agribusinesses, private organizations 
        (including grassroots organizations with an established and 
        demonstrated capacity to carry out such a bilateral exchange 
        program), private corporations, and nonprofit farm organizations 
        to work in conjunction with agricultural producers and farm 
        organizations in those countries, on a voluntary basis--
                    ``(A) to improve agricultural and agribusiness 
                operations and agricultural systems in those countries, 
                including improving--
                          ``(i) animal care and health;
                          ``(ii) field crop cultivation;
                          ``(iii) fruit and vegetable growing;
                          ``(iv) livestock operations;
                          ``(v) food processing and packaging;
                          ``(vi) farm credit;
                          ``(vii) marketing;
                          ``(viii) inputs; and
                          ``(ix) agricultural extension; and
                    ``(B) to strengthen cooperatives and other 
                agricultural groups in those countries;
            ``(3) transfer the knowledge and expertise of United States 
        agricultural producers and businesses, on an individual basis, 
        to those countries while enhancing the democratic process by 
        supporting private and public agriculturally related 
        organizations that request and support technical assistance 
        activities through cash and in-kind services;
            ``(4) to the maximum extent practicable, make grants to or 
        enter into contracts or other cooperative agreements with 
        private voluntary organizations, cooperatives, land grant 
        universities, private agribusiness, or nonprofit farm 
        organizations to carry out this section (except that any such 
        contract or other agreement may obligate the United States to 
        make outlays only to the extent that the budget authority for 
        such outlays is available under subsection (d) or has otherwise 
        been provided in advance in appropriation Acts);
            ``(5) coordinate programs established under this section 
        with other foreign assistance programs and activities carried 
        out by the United States; and
            ``(6) to the extent that local currencies can be used to 
        meet the costs of a program established under this section, 
        augment funds of the United States that are available for such a 
        program through the use, within the country in which the program 
        is being conducted, of--

[[Page 116 STAT. 287]]

                    ``(A) foreign currencies that accrue from the sale 
                of agricultural commodities and products under this Act; 
                and
                    ``(B) local currencies generated from other types of 
                foreign assistance activities.

    ``(c) Special Emphasis on Sub-Saharan African and Caribbean Basin 
Countries.--
            ``(1) Findings.--Congress finds that--
                    ``(A) agricultural producers in sub-Saharan African 
                and Caribbean Basin countries need training in 
                agricultural techniques that are appropriate for the 
                majority of eligible agricultural producers in those 
                countries, including training in--
                          ``(i) standard growing practices;
                          ``(ii) insecticide and sanitation procedures; 
                      and
                          ``(iii) other agricultural methods that will 
                      produce increased yields of more nutritious and 
                      healthful crops;
                    ``(B) agricultural producers in the United States 
                (including African-American agricultural producers) and 
                banking and insurance professionals have agribusiness 
                expertise that would be invaluable for agricultural 
                producers in sub-Saharan African and Caribbean Basin 
                countries;
                    ``(C) a commitment by the United States is 
                appropriate to support the development of a 
                comprehensive agricultural skills training program for 
                those agricultural producers that focuses on--
                          ``(i) improving knowledge of insecticide and 
                      sanitation procedures to prevent crop destruction;
                          ``(ii) teaching modern agricultural techniques 
                      that would facilitate a continual analysis of crop 
                      production, including--
                                    ``(I) the identification and 
                                development of standard growing 
                                practices; and
                                    ``(II) the establishment of systems 
                                for recordkeeping;
                          ``(iii) the use and maintenance of 
                      agricultural equipment that is appropriate for the 
                      majority of eligible agricultural producers in 
                      sub-Saharan African or Caribbean Basin countries;
                          ``(iv) the expansion of small agricultural 
                      operations into agribusiness enterprises by 
                      increasing access to credit for agricultural 
                      producers through--
                                    ``(I) the development and use of 
                                village banking systems; and
                                    ``(II) the use of agricultural risk 
                                insurance pilot products; and
                          ``(v) marketing crop yields to prospective 
                      purchasers (including businesses and individuals) 
                      for local needs and export; and
                    ``(D) programs that promote the exchange of 
                agricultural knowledge and expertise through the 
                exchange of American and foreign agricultural producers 
                have been effective in promoting improved agricultural 
                techniques and food security and the extension of 
                additional resources to such farmer-to-farmer exchanges 
                is warranted.
            ``(2) Goals for programs carried out in sub-saharan african 
        and caribbean countries.--The goals of programs

[[Page 116 STAT. 288]]

        carried out under this section in sub-Saharan African and 
        Caribbean Basin countries shall be--
                    ``(A) to expand small agricultural operations in 
                those countries into agribusiness enterprises by 
                increasing access to credit for agricultural producers 
                through--
                          ``(i) the development and use of village 
                      banking systems; and
                          ``(ii) the use of agricultural risk insurance 
                      pilot products;
                    ``(B) to provide training to agricultural producers 
                in those countries that will--
                          ``(i) enhance local food security; and
                          ``(ii) help mitigate and alleviate hunger;
                    ``(C) to provide training to agricultural producers 
                in those countries in groups to encourage participants 
                to share and pass on to other agricultural producers in 
                the home communities of the participants, the 
                information and skills obtained from the training, 
                rather than merely retaining the information and skills 
                for the personal enrichment of the participants; and
                    ``(D) to maximize the number of beneficiaries of the 
                programs in sub-Saharan African and Caribbean Basin 
                countries.

    ``(d) Minimum Funding.--Notwithstanding any other provision of law, 
in addition to any funds that may be specifically appropriated to carry 
out this section, not less than 0.5 percent of the amounts made 
available for each of fiscal years 2002 through 2007 to carry out this 
Act shall be used to carry out programs under this section, with--
            ``(1) not less than 0.2 percent to be used for programs in 
        developing countries; and
            ``(2) not less than 0.1 percent to be used for programs in 
        sub-Saharan African and Caribbean Basin countries.

    ``(e) Authorization of Appropriations.--
            ``(1) In general.--There is authorized to be appropriated to 
        carry out programs under this section in sub-Saharan African and 
        Caribbean Basin countries $10,000,000 for each of fiscal years 
        2002 through 2007.
            ``(2) Administrative costs.--Not more than 5 percent of the 
        funds made available for a fiscal year under paragraph (1) may 
        be used to pay administrative costs incurred in carrying out 
        programs in sub-Saharan African and Caribbean Basin 
        countries.''.

               Subtitle B--Agricultural Trade Act of 1978

SEC. 3101. EXPORTER ASSISTANCE INITIATIVE.

    Title I of the Agricultural Trade Act of 1978 (7 U.S.C. 5601 et 
seq.) is amended by adding at the end the following:

``SEC. 107. <<NOTE: 7 USC 5607.>>  EXPORTER ASSISTANCE INITIATIVE.

    ``To provide a comprehensive source of information to facilitate 
exports of United States agricultural commodities, the Secretary shall 
maintain on a website on the Internet information to assist exporters 
and potential exporters of United States agricultural commodities.''.

[[Page 116 STAT. 289]]

SEC. 3102. EXPORT CREDIT GUARANTEE PROGRAM.

    (a) Terms of Supplier Credit Program.--Section 202(a) of the 
Agricultural Trade Act of 1978 (7 U.S.C. 5622(a)) is amended by adding 
at the end the following:
            ``(3) Extended supplier credits.--
                    ``(A) In general.--Subject to the appropriation of 
                funds under subparagraph (B), in carrying out this 
                section, the Commodity Credit Corporation may issue 
                guarantees for the repayment of credit made available 
                for a period of more than 180 days, but not more than 
                360 days, by a United States exporter to a buyer in a 
                foreign country.
                    ``(B) Authorization of appropriations.--There are 
                authorized to be appropriated such sums as are necessary 
                to fund the additional costs attributable to the portion 
                of any guarantee issued under this paragraph to cover 
                the repayment of credit beyond the initial 180-day 
                period.''.

    (b) Processed and High-Value Products.--Section 202(k)(1) of the 
Agricultural Trade Act of 1978 (7 U.S.C. 5622(k)(1)) is amended by 
striking ``, 2001, and 2002'' and inserting ``through 2007''.
    (c) Report.--Section 202 of the Agricultural Trade Act of 1978 (7 
U.S.C. 5622) is amended by adding at the end the following:
    ``(l) Consultation on Agricultural Export Credit Programs.--The 
Secretary and the United States Trade Representative shall consult on a 
regular basis with the Committee on Agriculture, and the Committee on 
International Relations, of the House of Representatives and the 
Committee on Agriculture, Nutrition, and Forestry of the Senate on the 
status of multilateral negotiations regarding agricultural export credit 
programs.''.
    (d) Reauthorization.--Section 211(b)(1) of the Agricultural Trade 
Act of 1978 (7 U.S.C. 5641(b)(1)) is amended by striking ``2002'' and 
inserting ``2007''.

SEC. 3103. MARKET ACCESS PROGRAM.

    Section 211(c) of the Agricultural Trade Act of 1978 (7 U.S.C. 
5641(c)) is amended--
            (1) by redesignating paragraphs (1) and (2) as subparagraphs 
        (A) and (B), respectively, and indenting appropriately;
            (2) by striking ``The Commodity'' and inserting the 
        following:
            ``(1) In general.--The Commodity'';
            (3) by striking subparagraph (A) (as so redesignated) and 
        inserting the following:
                    ``(A) in addition to any funds that may be 
                specifically appropriated to implement a market access 
                program, not more than $90,000,000 for fiscal year 2001, 
                $100,000,000 for fiscal year 2002, $110,000,000 for 
                fiscal year 2003, $125,000,000 for fiscal year 2004, 
                $140,000,000 for fiscal year 2005, and $200,000,000 for 
                each of fiscal years 2006 and 2007, of the funds of, or 
                an equal value of commodities owned by, the Commodity 
                Credit Corporation; and''; and
            (4) by adding at the end the following:
            ``(2) Program priorities.--In providing any amount of funds 
        made available under paragraph (1)(A) for any fiscal year that 
        is in excess of the amount made available under paragraph (1)(A) 
        for fiscal year 2001, the Secretary shall, to the maximum extent 
        practicable--

[[Page 116 STAT. 290]]

                    ``(A) give equal consideration to--
                          ``(i) proposals submitted by organizations 
                      that were participating organizations in prior 
                      fiscal years; and
                          ``(ii) proposals submitted by eligible trade 
                      organizations that have not previously 
                      participated in the program established under this 
                      title; and
                    ``(B) give equal consideration to--
                          ``(i) proposals submitted for activities in 
                      emerging markets; and
                          ``(ii) proposals submitted for activities in 
                      markets other than emerging markets.''.

SEC. 3104. EXPORT ENHANCEMENT PROGRAM.

    (a) In General.--Section 301(e)(1)(G) of the Agricultural Trade Act 
of 1978 (7 U.S.C. 5651(e)(1)(G)) is amended by striking ``fiscal year 
2002'' and inserting ``each of fiscal years 2002 through 2007''.
    (b) Unfair Trade Practices.--Section 102(5)(A) of the Agricultural 
Trade Act of 1978 (7 U.S.C. 5602(5)(A)) is amended--
            (1) in clause (i), by striking ``or'' at the end; and
            (2) by striking clause (ii) and inserting the following:
                          ``(ii) in the case of a monopolistic state 
                      trading enterprise engaged in the export sale of 
                      an agricultural commodity, implements a pricing 
                      practice that is inconsistent with sound 
                      commercial practice;
                          ``(iii) provides a subsidy that--
                                    ``(I) decreases market opportunities 
                                for United States exports; or
                                    ``(II) unfairly distorts an 
                                agricultural market to the detriment of 
                                United States exporters;
                          ``(iv) imposes an unfair technical barrier to 
                      trade, including--
                                    ``(I) a trade restriction or 
                                commercial requirement (such as a 
                                labeling requirement) that adversely 
                                affects a new technology (including 
                                biotechnology); and
                                    ``(II) an unjustified sanitary or 
                                phytosanitary restriction (including any 
                                restriction that, in violation of the 
                                Uruguay Round Agreements, is not based 
                                on scientific principles;
                          ``(v) imposes a rule that unfairly restricts 
                      imports of United States agricultural commodities 
                      in the administration of tariff rate quotas; or
                          ``(vi) fails to adhere to, or circumvents any 
                      obligation under, any provision of a trade 
                      agreement with the United States.''.

SEC. 3105. FOREIGN MARKET DEVELOPMENT COOPERATOR PROGRAM.

    (a) Value-Added Products.--
            (1) In general.--Section 702(a) of the Agricultural Trade 
        Act of 1978 (7 U.S.C. 5722(a)) is amended by inserting ``, with 
        a continued significant emphasis on the importance of the export 
        of value-added United States agricultural products into emerging 
        markets'' after ``products''.
            (2) Report to congress.--Section 702 of the Agricultural 
        Trade Act of 1978 (7 U.S.C. 5722) is amended by adding at the 
        end the following:

    ``(c) Report to Congress.--The Secretary shall annually submit to 
the Committee on Agriculture and the Committee on

[[Page 116 STAT. 291]]

International Relations of the House of Representatives and the 
Committee on Agriculture, Nutrition, and Forestry of the Senate a report 
on activities under this section describing the amount of funding 
provided, the types of programs funded, the value-added products that 
have been targeted, and the foreign markets for those products that have 
been developed.''.
    (b) Funding.--Section 703 of the Agricultural Trade Act of 1978 (7 
U.S.C. 5723) is amended to read as follows:

``SEC. 703. FUNDING.

    ``(a) In General.--To carry out this title, the Secretary shall use 
funds of the Commodity Credit Corporation, or commodities of the 
Commodity Credit Corporation of a comparable value, in the amount of 
$34,500,000 for each of fiscal years 2002 through 2007.
    ``(b) Program Priorities.--In providing any amount of funds or 
commodities made available under subsection (a) for any fiscal year that 
is in excess of the amount made available under this section for fiscal 
year 2001, the Secretary shall, to the maximum extent practicable--
            ``(1) give equal consideration to--
                    ``(A) proposals submitted by organizations that were 
                participating organizations in prior fiscal years; and
                    ``(B) proposals submitted by eligible trade 
                organizations that have not previously participated in 
                the program established under this title; and
            ``(2) give equal consideration to--
                    ``(A) proposals submitted for activities in emerging 
                markets; and
                    ``(B) proposals submitted for activities in markets 
                other than emerging markets.''.

SEC. 3106. FOOD FOR PROGRESS.

    (a) In General.--Subsections (f)(3), (k), and (l)(1) of the Food for 
Progress Act of 1985 (7 U.S.C. 1736o) are each amended by striking 
``2002'' and inserting ``2007''.
    (b) Definitions; Program.--
            (1) In general.--The Food for Progress Act of 1985 (7 U.S.C. 
        1736o) is amended by striking subsections (b) and (c) and 
        inserting the following:

    ``(b) Definitions.--In this section:
            ``(1) Cooperative.--The term `cooperative' has the meaning 
        given the term in section 402 of the Agricultural Trade 
        Development and Assistance Act of 1954 (7 U.S.C. 1732).
            ``(2) Corporation.--The term `Corporation' means the 
        Commodity Credit Corporation.
            ``(3) Developing country.--The term `developing country' has 
        the meaning given the term in section 402 of the Agricultural 
        Trade Development and Assistance Act of 1954 (7 U.S.C. 1732).
            ``(4) Eligible commodity.--The term `eligible commodity' 
        means an agricultural commodity, or a product of an agricultural 
        commodity, in inventories of the Corporation or acquired by the 
        President or the Corporation for disposition through commercial 
        purchases under a program authorized under this section.
            ``(5) Eligible entity.--The term `eligible entity' means--

[[Page 116 STAT. 292]]

                    ``(A) the government of an emerging agricultural 
                country;
                    ``(B) an intergovernmental organization;
                    ``(C) a private voluntary organization;
                    ``(D) a nonprofit agricultural organization or 
                cooperative;
                    ``(E) a nongovernmental organization; and
                    ``(F) any other private entity.
            ``(6) Food security.--The term `food security' means access 
        by all people at all times to sufficient food and nutrition for 
        a healthy and productive life.
            ``(7) Nongovernmental organization.--The term 
        `nongovernmental organization' has the meaning given the term in 
        section 402 of the Agricultural Trade Development and Assistance 
        Act of 1954 (7 U.S.C. 1732).
            ``(8) Private voluntary organization.--The term `private 
        voluntary organization' has the meaning given the term in 
        section 402 of the Agricultural Trade Development and Assistance 
        Act of 1954 (7 U.S.C. 1732).
            ``(9) Program.--The term `program' means a food assistance 
        or development initiative proposed by an eligible entity and 
        approved by the President under this section.

    ``(c) Program.--In order to use the food resources of the United 
States more effectively in support of developing countries, and 
countries that are emerging democracies that have made commitments to 
introduce or expand free enterprise elements in their agricultural 
economies through changes in commodity pricing, marketing, input 
availability, distribution, and private sector involvement, the 
President may enter into agreements with eligible entities to furnish to 
the countries eligible commodities made available under subsections (e) 
and (f).''.
            (2) Conforming amendments.--The Food for Progress Act of 
        1985 (7 U.S.C. 136o) <<NOTE: 7 USC 1736.>>  is amended--
                    (A) in the first sentence of subsection (d), by 
                striking ``food'';
                    (B) in subsection (l)(2), by striking 
                ``agricultural'';
                    (C) in subsection (m)(1), by striking ``these'';
                    (D) in subsections (d), (e), (f), (h), (j), (l), and 
                (m), by striking ``commodities'' each place it appears 
                and inserting ``eligible commodities'';
                    (E) in subsections (e), (f), and (l), by striking 
                ``Commodity Credit Corporation'' each place it appears 
                and inserting ``Corporation''; and
                    (F) by striking subsection (o).

    (c) Consideration for Agreements.--Subsection (d) of the Food for 
Progress Act of 1985 (7 U.S.C. 1736o(d)) is amended by striking ``(d) In 
determining'' and inserting ``(d) Consideration for Agreements.--In 
determining''.
    (d) Funding of Eligible Commodities.--Subsection (e) of the Food for 
Progress Act of 1985 (7 U.S.C. 1736o(e)) is amended--
            (1) by striking ``(e)'' and inserting ``(e) Funding of 
        Eligible Commodities.--'';
            (2) in paragraph (2), by inserting ``, and subsection (g) 
        does not apply to eligible commodities furnished on a grant 
        basis or on credit terms under that title'' before the period at 
        the end; and
            (3) by adding at the end the following:

[[Page 116 STAT. 293]]

            ``(5) No effect on domestic programs.--The President shall 
        not make an eligible commodity available for disposition under 
        this section in any amount that will reduce the amount of the 
        eligible commodity that is traditionally made available through 
        donations to domestic feeding programs or agencies, as 
        determined by the President.''.

    (e) Provision of Eligible Commodities to Developing Countries.--
Subsection (f) of the Food for Progress Act of 1985 (7 U.S.C. 1736o(f)) 
is amended--
            (1) by striking ``(f)'' and inserting ``(f) Provision of 
        Eligible Commodities to Developing Countries.--''; and
            (2) in paragraph (3), by striking ``$30,000,000 (or in the 
        case of fiscal year 1999, $35,000,000)'' and inserting 
        ``$40,000,000''.

    (f) Minimum Tonnage.--The Food for Progress Act of 1985 is amended 
by striking subsection (g) (7 U.S.C. 1736o(g)) and inserting the 
following:
    ``(g) Minimum Tonnage.--Subject to subsection (f)(3), not less than 
400,000 metric tons of eligible commodities may be provided under this 
section for the program for each of fiscal years 2002 through 2007.''.
    (g) Prohibition on Resale or Transshipment of Eligible 
Commodities.--Subsection (h) of the Food for Progress Act of 1985 (7 
U.S.C. 1736o(h)) is amended by striking ``(h) An agreement'' and 
inserting ``(h) Prohibition on Resale or Transshipment of Eligible 
Commodities.--An agreement''.
    (h) Displacement of United States Commercial Sales.--Subsection (i) 
of the Food for Progress Act of 1985 (7 U.S.C. 1736o(i)) is amended by 
striking ``(i) In entering'' and inserting ``(i) Displacement of United 
States Commercial Sales.--In entering''.
    (i) Multicountry or Multiyear Basis.--Subsection (j) of the Food for 
Progress Act of 1985 (7 U.S.C. 1736o(j)) is amended--
            (1) by striking ``(j) In carrying out this section, the 
        President may,'' and inserting the following: ``(j) Multicountry 
        or Multiyear Basis.--
            ``(1) In general.--In carrying out this section, the 
        President,'';
            (2) by striking ``approve'' and inserting ``is encouraged to 
        approve'';
            (3) by striking ``multiyear'' and inserting ``multicountry 
        or multiyear''; and
            (4) by adding at the end the following:
            ``(2) Deadline for 
        program <<NOTE: President.>> announcements.--Before the 
        beginning of any fiscal year, the President shall, to the 
        maximum extent practicable--
                    ``(A) make all determinations concerning program 
                agreements and resource requests for programs under this 
                section; and
                    ``(B) announce those determinations.
            ``(3) Report.--Not <<NOTE: Deadline.>> later than December 1 
        of each fiscal year, the President shall submit to the Committee 
        on Agriculture of the House of Representatives and the Committee 
        on Agriculture, Nutrition, and Forestry of the Senate a list of 
        programs, countries, and eligible commodities, and the total 
        amount of funds for transportation and administrative costs, 
        approved to date for the fiscal year under this section.''.

[[Page 116 STAT. 294]]

    (j) Effective and Termination Dates.--Subsection (k) of the Food for 
Progress Act of 1985 (7 U.S.C. 1736o(k)) is amended by striking ``(k) 
This section'' and inserting ``(k) Effective and Termination Dates.--
This section''.
    (k) Administrative Expenses.--Subsection (l) of the Food for 
Progress Act of 1985 (7 U.S.C. 1736o(l)) is amended--
            (1) by striking ``(l)'' and inserting ``(l) Administrative 
        Expenses.--'';
            (2) in paragraph (1), by striking ``$10,000,000'' and 
        inserting ``$15,000,000'';
            (3) in paragraph (3), by striking ``local currencies'' and 
        inserting ``proceeds''; and
            (4) by adding at the end the following:
            ``(4) Humanitarian or development purposes.--The Secretary 
        may authorize the use of proceeds to pay the costs incurred by 
        an eligible entity under this section for--
                    ``(A)(i) programs targeted at hunger and 
                malnutrition; or
                    ``(ii) development programs involving food security;
                    ``(B) transportation, storage, and distribution of 
                eligible commodities provided under this section; and
                    ``(C) administration, sales, monitoring, and 
                technical assistance.''.

    (l) Presidential Approval.--Subsection (m) of the Food for Progress 
Act of 1985 (7 U.S.C. 1736o(m)) is amended by striking ``(m) In 
carrying'' and inserting ``(m) Presidential Approval.--In carrying''.
    (m) Program Management.--The Food for Progress Act of 1985 is 
amended by striking subsection (n) (7 U.S.C. 1736o(n)) and inserting the 
following:
    ``(n) Program Management.--
            ``(1) In general.--The <<NOTE: President.>> President shall 
        ensure, to the maximum extent practicable, that each eligible 
        entity participating in 1 or more programs under this section--
                    ``(A) uses eligible commodities made available under 
                this section--
                          ``(i) in an effective manner;
                          ``(ii) in the areas of greatest need; and
                          ``(iii) in a manner that promotes the purposes 
                      of this section;
                    ``(B) in using eligible commodities, assesses and 
                takes into account the needs of recipient countries and 
                the target populations of the recipient countries;
                    ``(C) works with recipient countries, and indigenous 
                institutions or groups in recipient countries, to design 
                and carry out mutually acceptable programs authorized 
                under this section; and
                    ``(D) monitors and reports on the distribution or 
                sale of eligible commodities provided under this section 
                using methods that, as determined by the President, 
                facilitate accurate and timely reporting.
            ``(2) Requirements.--
                    ``(A) In general.--Not <<NOTE: Deadline.>> later 
                than 270 days after the date of enactment of this 
                paragraph, the President shall review and, as necessary, 
                make changes in regulations and internal procedures 
                designed to streamline, improve,

[[Page 116 STAT. 295]]

                and clarify the application, approval, and 
                implementation processes pertaining to agreements under 
                this section.
                    ``(B) Considerations.--In conducting the review, the 
                President shall consider--
                          ``(i) revising procedures for submitting 
                      proposals;
                          ``(ii) developing criteria for program 
                      approval that separately address the objectives of 
                      the program;
                          ``(iii) pre-screening organizations and 
                      proposals to ensure that the minimum 
                      qualifications are met;
                          ``(iv) implementing e-government initiatives 
                      and otherwise improving the efficiency of the 
                      proposal submission and approval processes;
                          ``(v) upgrading information management 
                      systems;
                          ``(vi) improving commodity and transportation 
                      procurement processes; and
                          ``(vii) ensuring that evaluation and 
                      monitoring methods are sufficient.
                    ``(C) Consultations.--Not <<NOTE: Deadline.>> later 
                than 1 year after the date of enactment of this 
                paragraph, the President shall consult with the 
                Committee on Agriculture, and the Committee on 
                International Relations, of the House of Representatives 
                and the Committee on Agriculture, Nutrition, and 
                Forestry of the Senate on changes made in regulations 
                and procedures.
            ``(3) Reports.--Each eligible entity that enters into an 
        agreement under this section shall submit to the President, at 
        such time as the President may request, a report containing such 
        information as the President may request relating to the use of 
        eligible commodities and funds furnished to the eligible entity 
        under this section.''.

SEC. 3107. <<NOTE: 7 USC 1736o-1.>>  MCGOVERN-DOLE INTERNATIONAL FOOD 
            FOR EDUCATION AND CHILD NUTRITION PROGRAM.

    (a) Definition of Agricultural Commodity.--In this section, the term 
``agricultural commodity'' means an agricultural commodity, or a product 
of an agricultural commodity, that is produced in the United States.
    (b) Program.--Subject to subsection (l), the President may establish 
a program, to be known as ``McGovern-Dole International Food for 
Education and Child Nutrition Program'', requiring the procurement of 
agricultural commodities and the provision of financial and technical 
assistance to carry out--
            (1) preschool and school food for education programs in 
        foreign countries to improve food security, reduce the incidence 
        of hunger, and improve literacy and primary education, 
        particularly with respect to girls; and
            (2) maternal, infant, and child nutrition programs for 
        pregnant women, nursing mothers, infants, and children who are 5 
        years of age or younger.

    (c) Eligible Commodities and Cost Items.--Notwithstanding any other 
provision of law--
            (1) any agricultural commodity is eligible to be provided 
        under this section;
            (2) as necessary to achieve the purposes of this section, 
        funds appropriated under this section may be used to pay--
                    (A)(i) the cost of acquiring agricultural 
                commodities;

[[Page 116 STAT. 296]]

                    (ii) the costs associated with packaging, 
                enrichment, preservation, and fortification of 
                agricultural commodities;
                    (iii) the processing, transportation, handling, and 
                other incidental costs up to the time of the delivery of 
                agricultural commodities free on board vessels in United 
                States ports;
                    (iv) the vessel freight charges from United States 
                ports or designated Canadian transshipment ports, as 
                determined by the Secretary, to designated ports of 
                entry abroad;
                    (v) the costs associated with transporting 
                agricultural commodities from United States ports to 
                designated points of entry abroad in the case--
                          (I) of landlocked countries;
                          (II) of ports that cannot be used effectively 
                      because of natural or other disturbances;
                          (III) of the unavailability of carriers to a 
                      specific country; or
                          (IV) of substantial savings in costs or time 
                      that may be effected by the utilization of points 
                      of entry other than ports; and
                    (vi) the charges for general average contributions 
                arising out of the ocean transport of agricultural 
                commodities transferred pursuant thereto;
                    (B) all or any part of the internal transportation, 
                storage, and handling costs incurred in moving the 
                eligible commodity, if the President determines that--
                          (i) payment of the costs is appropriate; and
                          (ii) the recipient country is a low income, 
                      net food-importing country that--
                                    (I) meets the poverty criteria 
                                established by the International Bank 
                                for Reconstruction and Development for 
                                Civil Works Preference; and
                                    (II) has a national government that 
                                is committed to or is working toward, 
                                through a national action plan, the 
                                goals of the World Declaration on 
                                Education for All convened in 1990 in 
                                Jomtien, Thailand, and the followup 
                                Dakar Framework for Action of the World 
                                Education Forum, convened in 2000;
                    (C) the costs of activities conducted in the 
                recipient countries by a nonprofit voluntary 
                organization, cooperative, or intergovernmental agency 
                or organization that would enhance the effectiveness of 
                the activities implemented by such entities under this 
                section; and
                    (D) the costs of meeting the allowable 
                administrative expenses of private voluntary 
                organizations, cooperatives, or intergovernmental 
                organizations that are implementing activities under 
                this section.

    (d) General Authorities.--The President <<NOTE: President.>> shall 
designate 1 or more Federal agencies to--
            (1) implement the program established under this section;
            (2) ensure that the program established under this section 
        is consistent with the foreign policy and development assistance 
        objectives of the United States; and
            (3) consider, in determining whether a country should 
        receive assistance under this section, whether the government of 
        the country is taking concrete steps to improve the preschool 
        and school systems in the country.

[[Page 116 STAT. 297]]

    (e) Eligible Entities.--Assistance may be provided under this 
section to private voluntary organizations, cooperatives, 
intergovernmental organizations, governments of developing countries and 
their agencies, and other organizations.
    (f) Procedures.--
            (1) In <<NOTE: President.>> general.--In carrying out 
        subsection (b), the President shall ensure that procedures are 
        established that--
                    (A) provide for the submission of proposals by 
                eligible entities, each of which may include 1 or more 
                recipient countries, for commodities and other 
                assistance under this section;
                    (B) provide for eligible commodities and assistance 
                on a multiyear basis;
                    (C) ensure that eligible entities demonstrate the 
                organizational capacity and the ability to develop, 
                implement, monitor, report on, and provide 
                accountability for activities conducted under this 
                section;
                    (D) provide for the expedited development, review, 
                and approval of proposals submitted in accordance with 
                this section;
                    (E) ensure monitoring and reporting by eligible 
                entities on the use of commodities and other assistance 
                provided under this section; and
                    (F) allow for the sale or barter of commodities by 
                eligible entities to acquire funds to implement 
                activities that improve the food security of women and 
                children or otherwise enhance the effectiveness of 
                programs and activities authorized under this section.
            (2) Priorities for program funding.--In carrying out 
        paragraph (1) with respect to criteria for determining the use 
        of commodities and other assistance provided for programs and 
        activities authorized under this section, the implementing 
        agency may consider the ability of eligible entities to--
                    (A) identify and assess the needs of beneficiaries, 
                especially malnourished or undernourished mothers and 
                their children who are 5 years of age or younger, and 
                school-age children who are malnourished, 
                undernourished, or do not regularly attend school;
                    (B)(i) in the case of preschool and school-age 
                children, target low-income areas where children's 
                enrollment and attendance in school is low or girls' 
                enrollment and participation in preschool or school is 
                low, and incorporate developmental objectives for 
                improving literacy and primary education, particularly 
                with respect to girls; and
                    (ii) in the case of programs to benefit mothers and 
                children who are 5 years of age or younger, coordinate 
                supplementary feeding and nutrition programs with 
                existing or newly-established maternal, infant, and 
                children programs that provide health-needs 
                interventions, including maternal, prenatal, and 
                postnatal and newborn care;
                    (C) involve indigenous institutions as well as local 
                communities and governments in the development and 
                implementation of the programs and activities to foster 
                local capacity building and leadership; and

[[Page 116 STAT. 298]]

                    (D) carry out multiyear programs that foster local 
                self-sufficiency and ensure the longevity of programs in 
                the recipient country .

    (g) Use of Food and Nutrition Service.--The Food and Nutrition 
Service of the Department of Agriculture may provide technical advice on 
the establishment of programs under subsection (b)(1) and on 
implementation of the programs in the field in recipient countries.
    (h) Multilateral Involvement.--
            (1) In general.--The President is urged to engage existing 
        international food aid coordinating mechanisms to ensure 
        multilateral commitments to, and participation in, programs 
        similar to programs supported under this section.
            (2) Reports.--The <<NOTE: President.>> President shall 
        annually submit to the Committee on International Relations and 
        the Committee on Agriculture of the House of Representatives and 
        the Committee on Agriculture, Nutrition, and Forestry of the 
        Senate a report on the commitments and activities of 
        governments, including the United States government, in the 
        global effort to reduce child hunger and increase school 
        attendance.

    (i) Private Sector Involvement.--The President is urged to encourage 
the support and active involvement of the private sector, foundations, 
and other individuals and organizations in programs assisted under this 
section.
    (j) Graduation.--An agreement with an eligible organization under 
this section shall include provisions--
            (1) to--
                    (A) sustain the benefits to the education, 
                enrollment, and attendance of children in schools in the 
                targeted communities when the provision of commodities 
                and assistance to a recipient country under a program 
                under this section terminates; and
                    (B) estimate the period of time required until the 
                recipient country or eligible organization is able to 
                provide sufficient assistance without additional 
                assistance under this section; or
            (2) to provide other long-term benefits to targeted 
        populations of the recipient country.

    (k) Requirement To Safeguard Local Production and Usual Marketing.--
The requirement of section 403(a) of the Agricultural Trade Development 
and Assistance Act of 1954 (7 U.S.C. 1733(a)) applies with respect to 
the availability of commodities under this section.
    (l) Funding.--
            (1) In general.--Of the funds of the Commodity Credit 
        Corporation, the President shall use $100,000,000 for fiscal 
        year 2003 to carry out this section.
            (2) Authorization of appropriations.--There are authorized 
        to be appropriated such sums as are necessary to carry out this 
        section for each of fiscal years 2004 through 2007.
            (3) Administrative expenses.--Funds made available to carry 
        out this section may be used to pay the administrative expenses 
        of any Federal agency implementing or assisting in the 
        implementation of this section.

[[Page 116 STAT. 299]]

                        Subtitle C--Miscellaneous

SEC. 3201. SURPLUS COMMODITIES FOR DEVELOPING OR FRIENDLY COUNTRIES.

    (a) Use of Currencies.--Section 416(b)(7)(D) of the Agricultural Act 
of 1949 (7 U.S.C. 1431(b)(7)(D)) is amended--
            (1) in clauses (i) and (iii), by striking ``foreign 
        currency'' each place it appears;
            (2) in clause (ii)--
                    (A) by striking ``Foreign currencies'' and inserting 
                ``Proceeds''; and
                    (B) by striking ``foreign currency''; and
            (3) in clause (iv)--
                    (A) by striking ``Foreign currency proceeds'' and 
                inserting ``Proceeds'';
                    (B) by striking ``country of origin'' the second 
                place it appears and all that follows through ``as 
                necessary to expedite'' and inserting ``country of 
                origin as necessary to expedite'';
                    (C) by striking ``; or'' and inserting a period; and
                    (D) by striking subclause (II).

    (b) Implementation of Agreements.--Section 416(b) of the 
Agricultural Act of 1949 (7 U.S.C. 1431(b)) (as amended by section 
3009(b)) is amended--
            (1) in paragraph (8), by striking ``(8)(A)'' and all that 
        follows through ``(B) The Secretary'' and inserting the 
        following:
            ``(8) Administrative provisions.--
                    ``(A) Expedited procedures.--To the maximum extent 
                practicable, expedited procedures shall be used in the 
                implementation of this subsection.
                    ``(B) Estimate <<NOTE: Federal Register, 
                publication. Deadline.>> of commodities.--The Secretary 
                shall publish in the Federal Register, not later than 
                October 31 of each fiscal year, an estimate of the types 
                and quantities of commodities and products that will be 
                available under this section for the fiscal year.
                    ``(C) Finalization <<NOTE: Deadline.>> of 
                agreements.--The Secretary is encouraged to finalize 
                program agreements under this section not later than 
                December 31 of each fiscal year.
                    ``(D) Regulations.--The Secretary''; and
            (2) by adding at the end the following:
            ``(11) Requirements.--
                    ``(A) In <<NOTE: Deadline.>> general.--Not later 
                than 270 days after the date of enactment of this 
                subparagraph, the Secretary shall review and, as 
                necessary, make changes in regulations and internal 
                procedures designed to streamline, improve, and clarify 
                the application, approval, and implementation processes 
                pertaining to agreements under this section.
                    ``(B) Considerations.--In conducting the review, the 
                Secretary shall consider--
                          ``(i) revising procedures for submitting 
                      proposals;
                          ``(ii) developing criteria for program 
                      approval that separately address the objectives of 
                      the program;
                          ``(iii) pre-screening organizations and 
                      proposals to ensure that the minimum 
                      qualifications are met;

[[Page 116 STAT. 300]]

                          ``(iv) implementing e-government initiatives 
                      and otherwise improving the efficiency of the 
                      proposal submission and approval processes;
                          ``(v) upgrading information management 
                      systems;
                          ``(vi) improving commodity and transportation 
                      procurement processes; and
                          ``(vii) ensuring that evaluation and 
                      monitoring methods are sufficient.
                    ``(C) Consultations.--Not <<NOTE: Deadline.>> later 
                than 1 year after the date of enactment of this 
                subparagraph, the Secretary shall consult with the 
                Committee on Agriculture, and the Committee on 
                International Relations, of the House of Representatives 
                and the Committee on Agriculture, Nutrition, and 
                Forestry of the Senate on changes made in regulations 
                and procedures under this paragraph.''.

SEC. 3202. BILL EMERSON HUMANITARIAN TRUST.

    Section 302 of the Bill Emerson Humanitarian Trust Act (7 U.S.C. 
1736f-1) is amended by striking ``2002'' each place it appears in 
subsection (b)(2)(B)(i) and paragraphs (1) and (2) of subsection (h) and 
inserting ``2007''.

SEC. 3203. EMERGING MARKETS.

    Section 1542 of the Food, Agriculture, Conservation, and Trade Act 
of 1990 (7 U.S.C. 5622 note) is amended in subsections (a) and 
(d)(1)(A)(i) by striking ``2002'' and inserting ``2007''.

SEC. 3204. BIOTECHNOLOGY AND AGRICULTURAL TRADE PROGRAM.

    The Food, Agriculture, Conservation, and Trade Act of 1990 is 
amended by inserting after section 1543 (7 U.S.C. 3293) the following:

``SEC. 1543A. <<NOTE: 7 USC 5679.>> BIOTECHNOLOGY AND AGRICULTURAL TRADE 
            PROGRAM.

    ``(a) Establishment.--There is established in the Department the 
biotechnology and agricultural trade program.
    ``(b) Purpose.--The purpose of the program shall be to remove, 
resolve, or mitigate significant regulatory nontariff barriers to the 
export of United States agricultural commodities (as defined in section 
102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602)) into foreign 
markets through public and private sector projects funded by grants that 
address--
            ``(1) quick response intervention regarding nontariff 
        barriers to United States exports involving--
                    ``(A) United States agricultural commodities 
                produced through biotechnology;
                    ``(B) food safety;
                    ``(C) disease; or
                    ``(D) other sanitary or phytosanitary concerns; or
            ``(2) developing protocols as part of bilateral negotiations 
        with other countries on issues such as animal health, grain 
        quality, and genetically modified commodities.

    ``(c) Eligible Programs.--Depending on need, as determined by the 
Secretary, activities authorized under this section may be carried out 
through--
            ``(1) this section;
            ``(2) the emerging markets program under section 1542; or
            ``(3) the Cochran Fellowship Program under section 1543.

[[Page 116 STAT. 301]]

    ``(d) Funding.--There is authorized to be appropriated $6,000,000 
for each of fiscal years 2002 through 2007.''.

SEC. 3205. <<NOTE: 7 USC 5680.>>  TECHNICAL ASSISTANCE FOR SPECIALTY 
            CROPS.

    (a) Establishment.--The Secretary of Agriculture shall establish an 
export assistance program (referred to in this section as the 
``program'') to address unique barriers that prohibit or threaten the 
export of United States specialty crops.
    (b) Purpose.--The program shall provide direct assistance through 
public and private sector projects and technical assistance to remove, 
resolve, or mitigate sanitary and phytosanitary and related barriers to 
trade.
    (c) Priority.--The program shall address time sensitive and 
strategic market access projects based on--
            (1) trade effect on market retention, market access, and 
        market expansion; and
            (2) trade impact.

    (d) Funding.--For each of fiscal years 2002 through 2007, the 
Secretary shall make available $2,000,000 of the funds of, or an equal 
value of commodities owned by, the Commodity Credit Corporation.

SEC. 3206. <<NOTE: 7 USC 5603a.>> GLOBAL MARKET STRATEGY.

    (a) In <<NOTE: Deadline.>> General.--Not later than 180 days after 
the date of enactment of this Act, and biennially thereafter, the 
Secretary of Agriculture shall consult with the Committee on 
Agriculture, and the Committee on International Relations, of the House 
of Representatives and the Committee on Agriculture, Nutrition, and 
Forestry of the Senate on the formulation and implementation of a global 
market strategy for the Department of Agriculture that, to the maximum 
extent practicable--
            (1) identifies opportunities for the growth of agricultural 
        exports to overseas markets;
            (2) ensures that the resources, programs, and policies of 
        the Department are coordinated with those of other agencies; and
            (3) remove barriers to agricultural trade in overseas 
        markets.

    (b) Review.--The consultations under subsection (a) shall include a 
review of--
            (1) the strategic goals of the Department; and
            (2) the progress of the Department in implementing the 
        strategic goals through the global market strategy.

SEC. 3207. REPORT ON USE OF PERISHABLE COMMODITIES AND LIVE ANIMALS.

    Not <<NOTE: Deadline.>> later than 120 days after the date of 
enactment of this Act, the Secretary of Agriculture shall submit to the 
Committee on Agriculture of the House of Representatives and the 
Committee on Agriculture, Nutrition, and Forestry of the Senate a report 
on international food aid programs of the United States that evaluates--
            (1) the implications of storage and transportation capacity 
        and funding for the use of perishable agricultural commodities 
        and semiperishable agricultural commodities; and
            (2) the feasibility of the transport of lambs and other live 
        animals under the program.

[[Page 116 STAT. 302]]

SEC. 3208. <<NOTE: 7 USC 5693 note.>>  STUDY ON FEE FOR SERVICES.

    (a) In General.--Not <<NOTE: Deadline.>> later than 1 year after the 
date of enactment of this Act, the Secretary of Agriculture shall submit 
to the Committee on Agriculture, and the Committee on International 
Relations, of the House of Representatives and the Committee on 
Agriculture, Nutrition and Forestry of the Senate a report on the 
feasibility of instituting a program under which the Secretary would 
charge and retain a fee to cover the costs incurred by the Department of 
Agriculture, acting through the Foreign Agricultural Service or any 
successor agency, in providing persons with commercial services provided 
outside the United States.

    (b) Purpose of Program.--The purpose of a program described in 
subsection (a) would be to supplement and not replace any services 
currently offered overseas by the Foreign Agricultural Service.
    (c) Market Development Strategy.--A program under subsection (b) 
would be part of an overall market development strategy for a particular 
country or region.
    (d) Pilot Program.--A program under subsection (a) would be 
established on a pilot basis to ensure that the program does not 
disadvantage small- and medium-sized companies, including companies that 
have never engaged in exporting.

SEC. 3209. SENSE OF CONGRESS CONCERNING FOREIGN ASSISTANCE PROGRAMS.

    (a) Findings.--Congress finds that--
            (1) the international community faces a continuing epidemic 
        of ethnic, sectarian, and criminal violence;
            (2) poverty, hunger, political uncertainty, and social 
        instability are the principal causes of violence and conflict 
        around the world;
            (3) broad-based, equitable economic growth and agriculture 
        development facilitates political stability, food security, 
        democracy, and the rule of law;
            (4) democratic governments are more likely to advocate and 
        observe international laws, protect civil and human rights, 
        pursue free market economies, and avoid external conflicts;
            (5) the United States Agency for International Development 
        has provided critical democracy and governance assistance to a 
        majority of the nations that successfully made the transition to 
        democratic governments during the past 2 decades;
            (6) 43 of the top 50 consumer nations of American 
        agricultural products were once United States foreign aid 
        recipients;
            (7) in the past 50 years, infant child death rates in the 
        developing world have been reduced by 50 percent, and health 
        conditions around the world have improved more during this 
        period than in any other period;
            (8) the United States Agency for International Development 
        child survival programs have significantly contributed to a 10 
        percent reduction in infant mortality rates worldwide in just 
        the past 8 years;
            (9) in providing assistance by the United States and other 
        donors in better seeds and teaching more efficient agricultural 
        techniques over the past 2 decades have helped make it possible 
        to feed an additional 1,000,000,000 people in the world;
            (10) despite this progress, approximately 1,200,000,000 
        people, one-quarter of the world's population, live on less that

[[Page 116 STAT. 303]]

        $1 per day, and approximately 3,000,000,000 people live on only 
        $2 per day;
            (11) 95 percent of new births occur in developing countries, 
        including the world's poorest countries; and
            (12) only \1/2\ percent of the Federal budget is dedicated 
        to international economic and humanitarian assistance.

    (b) Sense of Congress.--It is the sense of Congress that--
            (1) United States foreign assistance programs should play an 
        increased role in the global fight against terrorism to 
        complement the national security objectives of the United 
        States;
            (2) the United States should lead coordinated international 
        efforts to provide increased financial assistance to countries 
        with impoverished and disadvantaged populations that are the 
        breeding grounds for terrorism; and
            (3) the United States Agency for International Development 
        and the Department of Agriculture should substantially increase 
        humanitarian, economic development, and agricultural assistance 
        to foster international peace and stability and the promotion of 
        human rights.

SEC. 3210. SENSE OF THE SENATE CONCERNING AGRICULTURAL TRADE.

    (a) Agriculture Trade Negotiating Objectives.--It is the sense of 
the Senate that the principal negotiating objective of the United States 
with respect to agricultural trade in all multilateral, regional, and 
bilateral negotiations is to obtain competitive opportunities for the 
export of United States agricultural commodities in foreign markets 
substantially equivalent to the competitive opportunities afforded 
foreign exports in United States markets and to achieve fairer and more 
open conditions of agricultural trade in bulk and value-added 
commodities by--
            (1) reducing or eliminating, by a date certain, tariffs or 
        other charges that decrease market opportunities for the export 
        of United States agricultural commodities, giving priority to 
        United States agricultural commodities that are subject to 
        significantly higher tariffs or subsidy regimes of major 
        producing countries;
            (2) immediately eliminating all export subsidies on 
        agricultural commodities worldwide while maintaining bona fide 
        food aid and preserving United States agricultural market 
        development and export credit programs that allow the United 
        States to compete with other foreign export promotion efforts;
            (3) leveling the playing field for United States 
        agricultural producers by disciplining domestic supports such 
        that no other country can provide greater support, measured as a 
        percentage of total agricultural production value, than the 
        United States does while preserving existing green box category 
        to support conservation activities, family farms, and rural 
        communities;
            (4) developing, strengthening, and clarifying rules and 
        effective dispute settlement mechanisms to eliminate practices 
        that unfairly decrease United States market access opportunities 
        for United States agricultural commodities or distort 
        agricultural markets to the detriment of the United States, 
        including--
                    (A) unfair or trade-distorting activities of state 
                trading enterprises and other administrative mechanisms, 
                with emphasis on--

[[Page 116 STAT. 304]]

                          (i) requiring price transparency in the 
                      operation of state trading enterprises and such 
                      other mechanisms; and
                          (ii) ending discriminatory pricing practices 
                      for agricultural commodities that amount to de 
                      facto export subsidies so that the enterprises or 
                      other mechanisms do not (except in cases of bona 
                      fide food aid) sell agricultural commodities in 
                      foreign markets at prices below domestic market 
                      prices or prices below the full costs of acquiring 
                      and delivering agricultural commodities to the 
                      foreign markets;
                    (B) unjustified trade restrictions or commercial 
                requirements affecting new agricultural technologies, 
                including biotechnology;
                    (C) unjustified sanitary or phytosanitary 
                restrictions, including restrictions that are not based 
                on scientific principles, in contravention of the 
                Agreement on the Application of Sanitary and 
                Phytosanitary Measures (as described in section 
                101(d)(3) of the Uruguay Round Agreements Act (19 U.S.C. 
                3511(d)(3)));
                    (D) other unjustified technical barriers to 
                agricultural trade; and
                    (E) restrictive and nontransparent rules in the 
                administration of tariff rate quotas;
            (5) improving import relief mechanisms to recognize the 
        unique characteristics of perishable agricultural commodities;
            (6) taking into account whether a party to negotiations with 
        respect to trading in an agricultural commodity has--
                    (A) failed to adhere to the provisions of an 
                existing bilateral trade agreement with the United 
                States;
                    (B) circumvented obligations under a multilateral 
                trade agreement to which the United States is a 
                signatory; or
                    (C) manipulated its currency value to the detriment 
                of United States agricultural producers or exporters; 
                and
            (7) otherwise ensuring that countries that accede to the 
        World Trade Organization--
                    (A) have made meaningful market liberalization 
                commitments in agriculture; and
                    (B) make progress in fulfilling those commitments 
                over time.

    (b) Priority for Agriculture Trade.--It is the sense of the Senate 
that--
            (1) reaching a successful agreement on agriculture should be 
        the top priority of United States negotiators in World Trade 
        Organization talks; and
            (2) if the primary export competitors of the United States 
        fail to reduce their trade distorting domestic supports and 
        eliminate export subsidies in accordance with the negotiating 
        objectives expressed in this section, the United States should 
        take steps to increase the leverage of United States negotiators 
        and level the playing field for United States producers, within 
        existing World Trade Organization commitments.

    (c) Consultation With Congressional Committees.--It is the sense of 
the Senate that--

[[Page 116 STAT. 305]]

            (1) before the United States Trade Representative negotiates 
        a trade agreement that would reduce tariffs on agricultural 
        commodities or require a change in United States agricultural 
        law, the United States Trade Representative should consult with 
        the Committee on Agriculture and the Committee on Ways and Means 
        of the House of Representatives and the Committee on 
        Agriculture, Nutrition, and Forestry and the Committee on 
        Finance of the Senate;
            (2) not less than 48 hours before initialing an agreement 
        relating to agricultural trade negotiated under the auspices of 
        the World Trade Organization, the United States Trade 
        Representative should consult closely with the committees 
        referred to in paragraph (1) regarding--
                    (A) the details of the agreement;
                    (B) the potential impact of the agreement on United 
                States agricultural producers; and
                    (C) any changes in United States law necessary to 
                implement the agreement; and
            (3) any agreement or other understanding (whether verbal or 
        in writing) that relates to agricultural trade that is not 
        disclosed to Congress before legislation implementing a trade 
        agreement is introduced in either the Senate or the House of 
        Representatives should not be considered to be part of the 
        agreement approved by Congress and should have no force and 
        effect under Unites States law or in any dispute settlement 
        body.

     TITLE IV--NUTRITION <<NOTE: Food Stamp Reauthorization Act of 
2002.>> PROGRAMS

SEC. 4001. SHORT <<NOTE: 7 USC 2011 note.>> TITLE.

    This title may be cited as the ``Food Stamp Reauthorization Act of 
2002''.

                     Subtitle A--Food Stamp Program

SEC. 4101. ENCOURAGEMENT OF PAYMENT OF CHILD SUPPORT.

    (a) Exclusion.--Section 5(d)(6) of the Food Stamp Act of 1977 (7 
U.S.C. 2014(d)(6)) is amended by adding at the end the following: ``and 
child support payments made by a household member to or for an 
individual who is not a member of the household if the household member 
is legally obligated to make the payments,''.
    (b) Simplified Procedure.--Section 5 of the Food Stamp Act of 1977 
(7 U.S.C. 2014) is amended--
            (1) in subsection (e), by striking paragraph (4) and 
        inserting the following:
            ``(4) Deduction for child support payments.--
                    ``(A) In general.--In lieu of providing an exclusion 
                for legally obligated child support payments made by a 
                household member under subsection (d)(6), a State agency 
                may elect to provide a deduction for the amount of the 
                payments.
                    ``(B) Order of determining deductions.--A deduction 
                under this paragraph shall be determined before the 
                computation of the excess shelter expense deduction 
                under paragraph (6).''; and

[[Page 116 STAT. 306]]

            (2) by adding at the end the following:

    ``(n) State Options To Simplify Determination of Child Support 
Payments.--Regardless of whether a State agency elects to provide a 
deduction under subsection (e)(4), the Secretary shall establish 
simplified procedures to allow State agencies, at the option of the 
State agencies, to determine the amount of any legally obligated child 
support payments made, including procedures to allow the State agency to 
rely on information from the agency responsible for implementing the 
program under part D of title IV of the Social Security Act (42 U.S.C. 
651 et seq.) concerning payments made in prior months in lieu of 
obtaining current information from the households.''.

SEC. 4102. SIMPLIFIED DEFINITION OF INCOME.

    Section 5(d) of the Food Stamp Act of 1977 (7 U.S.C. 2014(d)) is 
amended--
            (1) by striking ``and (15)'' and inserting ``(15)''; and
            (2) by inserting before the period at the end the following: 
        ``, (16) at the option of the State agency, any educational 
        loans on which payment is deferred, grants, scholarships, 
        fellowships, veterans' educational benefits, and the like (other 
        than loans, grants, scholarships, fellowships, veterans' 
        educational benefits, and the like excluded under paragraph 
        (3)), to the extent that they are required to be excluded under 
        title XIX of the Social Security Act (42 U.S.C. 1396 et seq.), 
        (17) at the option of the State agency, any State complementary 
        assistance program payments that are excluded for the purpose of 
        determining eligibility for medical assistance under section 
        1931 of the Social Security Act (42 U.S.C. 1396u-1), and (18) at 
        the option of the State agency, any types of income that the 
        State agency does not consider when determining eligibility for 
        (A) cash assistance under a program funded under part A of title 
        IV of the Social Security Act (42 U.S.C. 601 et seq.) or the 
        amount of such assistance, or (B) medical assistance under 
        section 1931 of the Social Security Act (42 U.S.C. 1396u-1), 
        except that this paragraph does not authorize a State agency to 
        exclude wages or salaries, benefits under title I, II, IV, X, 
        XIV, or XVI of the Social Security Act (42 U.S.C. 301 et seq.), 
        regular payments from a government source (such as unemployment 
        benefits and general assistance), worker's compensation, child 
        support payments made to a household member by an individual who 
        is legally obligated to make the payments, or such other types 
        of income the consideration of which the Secretary determines by 
        regulation to be essential to equitable determinations of 
        eligibility and benefit levels''.

SEC. 4103. STANDARD DEDUCTION.

    Section 5(e) of the Food Stamp Act of 1977 (7 U.S.C. 2014(e)) is 
amended by striking paragraph (1) and inserting the following:
            ``(1) Standard deduction.--
                    ``(A) In general.--
                          ``(i) Deduction.--The Secretary shall allow a 
                      standard deduction for each household in the 48 
                      contiguous States and the District of Columbia, 
                      Alaska, Hawaii, and the Virgin Islands of the 
                      United States in an amount that is--

[[Page 116 STAT. 307]]

                                    ``(I) equal to 8.31 percent of the 
                                income standard of eligibility 
                                established under subsection (c)(1); but
                                    ``(II) not more than 8.31 percent of 
                                the income standard of eligibility 
                                established under subsection (c)(1) for 
                                a household of 6 members.
                          ``(ii) Minimum amount.--Notwithstanding clause 
                      (i), the standard deduction for each household in 
                      the 48 contiguous States and the District of 
                      Columbia, Alaska, Hawaii, and the Virgin Islands 
                      of the United States shall be not less than $134, 
                      $229, $189, and $118, respectively.
                    ``(B) Guam.--
                          ``(i) In general.--The Secretary shall allow a 
                      standard deduction for each household in Guam in 
                      an amount that is--
                                    ``(I) equal to 8.31 percent of twice 
                                the income standard of eligibility 
                                established under subsection (c)(1) for 
                                the 48 contiguous States and the 
                                District of Columbia; but
                                    ``(II) not more than 8.31 percent of 
                                twice the income standard of eligibility 
                                established under subsection (c)(1) for 
                                the 48 contiguous States and the 
                                District of Columbia for a household of 
                                6 members.
                          ``(ii) Minimum amount.--Notwithstanding clause 
                      (i), the standard deduction for each household in 
                      Guam shall be not less than $269.''.

SEC. 4104. SIMPLIFIED UTILITY ALLOWANCE.

    Section 5(e)(7)(C)(iii) of the Food Stamp Act of 1977 (7 U.S.C. 
2014(e)(7)(C)(iii)) is amended--
            (1) in subclause (I)(bb), by inserting ``(without regard to 
        subclause (III))'' after ``Secretary finds''; and
            (2) by adding at the end the following:
                                    ``(III) Inapplicability of certain 
                                restrictions.--Clauses (ii)(II) and 
                                (ii)(III) shall not apply in the case of 
                                a State agency that has made the use of 
                                a standard utility allowance mandatory 
                                under subclause (I).''.

SEC. 4105. SIMPLIFIED DETERMINATION OF HOUSING COSTS.

    (a) In General.--Section 5(e)(7) of the Food Stamp Act of 1977 (7 
U.S.C. 2014(e)(7)) is amended by adding at the end the following:
                    ``(D) Homeless households.--
                          ``(i) Alternative deduction.--In lieu of the 
                      deduction provided under subparagraph (A), a State 
                      agency may elect to allow a household in which all 
                      members are homeless individuals, but that is not 
                      receiving free shelter throughout the month, to 
                      receive a deduction of $143 per month.
                          ``(ii) Ineligibility.--The State agency may 
                      make a household with extremely low shelter costs 
                      ineligible for the alternative deduction under 
                      clause (i).''.

    (b) Conforming Amendments.--Section 5 of the Food Stamp Act of 1977 
(7 U.S.C. 2014) is amended--
            (1) in subsection (e)--

[[Page 116 STAT. 308]]

                    (A) by striking paragraph (5); and
                    (B) by redesignating paragraphs (6) and (7) as 
                paragraphs (5) and (6), respectively; and
            (2) in subsection (k)(4)(B), by striking ``subsection 
        (e)(7)'' and inserting ``subsection (e)(6)''.

SEC. 4106. SIMPLIFIED DETERMINATION OF DEDUCTIONS.

    Section 5(f)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2014(f)(1)) 
is amended by adding at the end the following:
                    ``(C) Simplified determination of deductions.--
                          ``(i) In general.--Except as provided in 
                      clause (ii), for the purposes of subsection (e), a 
                      State agency may elect to disregard until the next 
                      recertification of eligibility under section 
                      11(e)(4) 1 or more types of changes in the 
                      circumstances of a household that affect the 
                      amount of deductions the household may claim under 
                      subsection (e).
                          ``(ii) Changes that may not be disregarded.--
                      Under clause (i), a State agency may not 
                      disregard--
                                    ``(I) any reported change of 
                                residence; or
                                    ``(II) under standards prescribed by 
                                the Secretary, any change in earned 
                                income.''.

SEC. 4107. SIMPLIFIED DEFINITION OF RESOURCES.

    Section 5(g) of the Food Stamp Act of 1977 (7 U.S.C. 2014(g)) is 
amended--
            (1) in paragraph (1), by striking ``a member who is 60 years 
        of age or older'' and inserting ``an elderly or disabled 
        member''; and
            (2) by adding at the end the following:
            ``(6) Exclusion of types of financial resources not 
        considered under certain other federal programs.--
                    ``(A) In general.--Subject to subparagraph (B), a 
                State agency may, at the option of the State agency, 
                exclude from financial resources under this subsection 
                any types of financial resources that the State agency 
                does not consider when determining eligibility for--
                          ``(i) cash assistance under a program funded 
                      under part A of title IV of the Social Security 
                      Act (42 U.S.C. 601 et seq.); or
                          ``(ii) medical assistance under section 1931 
                      of the Social Security Act (42 U.S.C. 1396u-1).
                    ``(B) Limitations.--Except to the extent that any of 
                the types of resources specified in clauses (i) through 
                (iv) are excluded under another paragraph of this 
                subsection, subparagraph (A) does not authorize a State 
                agency to exclude--
                          ``(i) cash;
                          ``(ii) licensed vehicles;
                          ``(iii) amounts in any account in a financial 
                      institution that are readily available to the 
                      household; or
                          ``(iv) any other similar type of resource the 
                      inclusion in financial resources of which the 
                      Secretary determines by regulation to be essential 
                      to equitable determinations of eligibility under 
                      the food stamp program.''.

[[Page 116 STAT. 309]]

SEC. 4108. ALTERNATIVE ISSUANCE SYSTEMS IN DISASTERS.

    (a) In General.--Section 5(h)(3)(B) of the Food Stamp Act of 1977 (7 
U.S.C. 2014(h)(3)(B)) is amended--
            (1) in the first sentence, by inserting ``issuance methods 
        and'' after ``shall adjust''; and
            (2) in the second sentence, by inserting ``, any conditions 
        that make reliance on electronic benefit transfer systems 
        described in section 7(i) impracticable,'' after ``personnel''.

    (b) Effective Date.--The amendments made by this section take effect 
on the date of enactment of this Act.

SEC. 4109. STATE OPTION TO REDUCE REPORTING REQUIREMENTS.

    Section 6(c)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2015(c)(1)) 
is amended--
            (1) in subparagraph (B), by striking ``on a monthly basis''; 
        and
            (2) by adding at the end the following:
                    ``(D) Frequency of reporting.--
                          ``(i) In general.--Except as provided in 
                      subparagraphs (A) and (C), a State agency may 
                      require households that report on a periodic basis 
                      to submit reports--
                                    ``(I) not less often than once each 
                                6 months; but
                                    ``(II) not more often than once each 
                                month.
                          ``(ii) Reporting by households with excess 
                      income.--A household required to report less often 
                      than once each 3 months shall, notwithstanding 
                      subparagraph (B), report in a manner prescribed by 
                      the Secretary if the income of the household for 
                      any month exceeds the income standard of 
                      eligibility established under section 5(c)(2).''.

SEC. 4110. COST NEUTRALITY FOR ELECTRONIC BENEFIT TRANSFER SYSTEMS.

    Section 7(i)(2) of the Food Stamp Act of 1977 (7 U.S.C. 2016(i)(2)) 
is amended--
            (1) by striking subparagraph (A); and
            (2) by redesignating subparagraphs (B) through (I) as 
        subparagraphs (A) through (H), respectively.

SEC. 4111. <<NOTE: 7 USC 2016 note.>>  REPORT ON ELECTRONIC BENEFIT 
            TRANSFER SYSTEMS.

    (a) Definition of EBT System.--In this section, the term ``EBT 
system'' means an electronic benefit transfer system used in issuance of 
benefits under the food stamp program under the Food Stamp Act of 1977 
(7 U.S.C. 2011 et seq.).
    (b) Report.--Not <<NOTE: Deadline.>> later than October 1, 2003, the 
Secretary of Agriculture shall submit to the Committee on Agriculture of 
the House of Representatives and the Committee on Agriculture, 
Nutrition, and Forestry of the Senate a report that--
            (1) describes the status of use by each State agency of EBT 
        systems;
            (2) specifies the number of vendors that have entered into a 
        contract for an EBT system with a State agency;
            (3)(A) specifies the number of State agencies that have 
        entered into an EBT-system contract with multiple EBT-system 
        vendors; and

[[Page 116 STAT. 310]]

            (B) describes, for each State agency described in 
        subparagraph (A), how responsibilities are divided among the 
        various vendors;
            (4) with respect to any State in which an EBT system is not 
        operational throughout the State as of October 1, 2002--
                    (A) provides an explanation of the reasons why an 
                EBT system is not operational throughout the State;
                    (B) describes how the reasons are being addressed; 
                and
                    (C) specifies the expected date of operation of an 
                EBT system throughout the State;
            (5) provides a description of--
                    (A) the issues faced by any State agency that has 
                awarded a second EBT-system contract in the 2-year 
                period preceding the date of the report; and
                    (B) the steps that the State agency has taken to 
                address those issues;
            (6) provides a description of--
                    (A) the issues faced by any State agency that will 
                award a second EBT-system contract within the 2-year 
                period beginning on the date of the report; and
                    (B) strategies that the State agency is considering 
                to address those issues;
            (7) describes initiatives being considered or taken by the 
        Department of Agriculture, food retailers, EBT-system vendors, 
        and client advocates to address any outstanding issues with 
        respect to EBT systems; and
            (8) examines areas of potential advances in electronic 
        benefit delivery in the 5- to 10-year period beginning on the 
        date of the report, including--
                    (A) access to EBT systems at farmers' markets;
                    (B) increased use of transaction data from EBT 
                systems to identify and prosecute fraud; and
                    (C) fostering of increased competition among EBT-
                system vendors to ensure cost containment and optimal 
                service.

SEC. 4112. ALTERNATIVE PROCEDURES FOR RESIDENTS OF CERTAIN GROUP 
            FACILITIES.

    (a) In General.--Section 8 of the Food Stamp Act of 1977 (7 U.S.C. 
2017) is amended by adding at the end the following:
    ``(f) Alternative Procedures for Residents of Certain Group 
Facilities.--
            ``(1) In general.--
                    ``(A) Applicability.--
                          ``(i) In general.--Subject to clause (ii), at 
                      the option of the State agency, allotments for 
                      residents of any facility described in 
                      subparagraph (B), (C), (D), or (E) of section 
                      3(i)(5) (referred to in this subsection as a 
                      `covered facility') may be determined and issued 
                      under this paragraph in lieu of subsection (a).
                          ``(ii) Limitation.--Unless the Secretary 
                      authorizes implementation of this paragraph in all 
                      States under paragraph (3), clause (i) shall apply 
                      only to residents of covered facilities 
                      participating in a pilot project under paragraph 
                      (2).

[[Page 116 STAT. 311]]

                    ``(B) Amount of allotment.--The allotment for each 
                eligible resident described in subparagraph (A) shall be 
                calculated in accordance with standardized procedures 
                established by the Secretary that take into account the 
                allotments typically received by residents of covered 
                facilities.
                    ``(C) Issuance of allotment.--
                          ``(i) In general.--The State agency shall 
                      issue an allotment determined under this paragraph 
                      to a covered facility as the authorized 
                      representative of the residents of the covered 
                      facility.
                          ``(ii) Adjustment.--The Secretary shall 
                      establish procedures to ensure that a covered 
                      facility does not receive a greater proportion of 
                      a resident's monthly allotment than the proportion 
                      of the month during which the resident lived in 
                      the covered facility.
                    ``(D) Departures of residents of covered 
                facilities.--
                          ``(i) Notification.--Any covered facility that 
                      receives an allotment for a resident under this 
                      paragraph shall--
                                    ``(I) notify the State agency 
                                promptly on the departure of the 
                                resident; and
                                    ``(II) notify the resident, before 
                                the departure of the resident, that the 
                                resident--
                                            ``(aa) is eligible for 
                                        continued benefits under the 
                                        food stamp program; and
                                            ``(bb) should contact the 
                                        State agency concerning 
                                        continuation of the benefits.
                          ``(ii) Issuance to departed residents.--On 
                      receiving a notification under clause (i)(I) 
                      concerning the departure of a resident, the State 
                      agency--
                                    ``(I) shall promptly issue the 
                                departed resident an allotment for the 
                                days of the month after the departure of 
                                the resident (calculated in a manner 
                                prescribed by the Secretary) unless the 
                                departed resident reapplies to 
                                participate in the food stamp program; 
                                and
                                    ``(II) may issue an allotment for 
                                the month following the month of the 
                                departure (but not any subsequent month) 
                                based on this paragraph unless the 
                                departed resident reapplies to 
                                participate in the food stamp program.
                          ``(iii) State option.--The State agency may 
                      elect not to issue an allotment under clause 
                      (ii)(I) if the State agency lacks sufficient 
                      information on the location of the departed 
                      resident to provide the allotment.
                          ``(iv) Effect of reapplication.--If the 
                      departed resident reapplies to participate in the 
                      food stamp program, the allotment of the departed 
                      resident shall be determined without regard to 
                      this paragraph.
            ``(2) Pilot projects.--
                    ``(A) In general.--Before the Secretary authorizes 
                implementation of paragraph (1) in all States, the 
                Secretary shall carry out, at the request of 1 or more 
                State agencies and in 1 or more areas of the United 
                States, such number of pilot projects as the Secretary 
                determines to be sufficient

[[Page 116 STAT. 312]]

                to test the feasibility of determining and issuing 
                allotments to residents of covered facilities under 
                paragraph (1) in lieu of subsection (a).
                    ``(B) Project plan.--To be eligible to participate 
                in a pilot project under subparagraph (A), a State 
                agency shall submit to the Secretary for approval a 
                project plan that includes--
                          ``(i) a specification of the covered 
                      facilities in the State that will participate in 
                      the pilot project;
                          ``(ii) a schedule for reports to be submitted 
                      to the Secretary on the pilot project;
                          ``(iii) procedures for standardizing allotment 
                      amounts that takes into account the allotments 
                      typically received by residents of covered 
                      facilities; and
                          ``(iv) a commitment to carry out the pilot 
                      project in compliance with the requirements of 
                      this subsection other than paragraph (1)(B).
            ``(3) Authorization of implementation in all states.--
                    ``(A) In general.--The Secretary shall--
                          ``(i) determine whether to authorize 
                      implementation of paragraph (1) in all States; and
                          ``(ii) notify the Committee on Agriculture of 
                      the House of Representatives and the Committee on 
                      Agriculture, Nutrition, and Forestry of the Senate 
                      of the determination.
                    ``(B) Determination not to authorize implementation 
                in all states.--
                          ``(i) In general.--If the Secretary makes a 
                      finding described in clause (ii), the Secretary--
                                    ``(I) shall not authorize 
                                implementation of paragraph (1) in all 
                                States; and
                                    ``(II) shall terminate all pilot 
                                projects under paragraph (2) within a 
                                reasonable period of time (as determined 
                                by the Secretary).
                          ``(ii) Finding.--The finding referred to in 
                      clause (i) is that--
                                    ``(I) an insufficient number of 
                                project plans that the Secretary 
                                determines to be eligible for approval 
                                are submitted by State agencies under 
                                paragraph (2)(B); or
                                    ``(II)(aa) a sufficient number of 
                                pilot projects have been carried out 
                                under paragraph (2)(A); and
                                    ``(bb) authorization of 
                                implementation of paragraph (1) in all 
                                States is not in the best interest of 
                                the food stamp program.''.

    (b) Conforming Amendments.--
            (1) Section 3(i) of the Food Stamp Act of 1977 (7 U.S.C. 
        2012(i)) is amended--
                    (A) by striking ``(i) `Household' means (1) an'' and 
                inserting the following:

    ``(i)(1) `Household' means--
            ``(A) an'';
                    (B) in the first sentence, by striking ``others, or 
                (2) a group'' and inserting the following: ``others; or
            ``(B) a group'';
                    (C) in the second sentence, by striking ``Spouses'' 
                and inserting the following:

[[Page 116 STAT. 313]]

    ``(2) Spouses'';
                    (D) in the third sentence, by striking 
                ``Notwithstanding'' and inserting the following:

    ``(3) Notwithstanding'';
                    (E) in paragraph (3) (as designated by subparagraph 
                (D)), by striking ``the preceding sentences'' and 
                inserting ``paragraphs (1) and (2)'';
                    (F) in the fourth sentence, by striking ``In no 
                event'' and inserting the following:

    ``(4) In no event'';
                    (G) in the fifth sentence, by striking ``For the 
                purposes of this subsection, residents'' and inserting 
                the following:

    ``(5) For the purposes of this subsection, the following persons 
shall not be considered to be residents of institutions and shall be 
considered to be individual households:
            ``(A) Residents''; and
                    (H) in paragraph (5) (as designated by subparagraph 
                (G))--
                          (i) by striking ``Act, or are individuals'' 
                      and inserting the following: ``Act.
            ``(B) Individuals'';
                          (ii) by striking ``such section, temporary'' 
                      and inserting the following: ``that section.
            ``(C) Temporary'';
                          (iii) by striking ``children, residents'' and 
                      inserting the following: ``children.
            ``(D) Residents'';
                          (iv) by striking ``coupons, and narcotics'' 
                      and inserting the following: ``coupons.
            ``(E) Narcotics''; and
                          (v) by striking ``shall not'' and all that 
                      follows and inserting a period.
            (2) Section 5(a) of the Food Stamp Act of 1977 (7 U.S.C. 
        2014(a)) is amended by striking ``the third sentence of section 
        3(i)'' each place it appears and inserting ``section 3(i)(4)''.
            (3) Section 8(e)(1) of the Food Stamp Act of 1977 (7 U.S.C. 
        2017(e)(1)) is amended by striking ``the last sentence of 
        section 3(i)'' and inserting ``section 3(i)(5)''.
            (4) Section 17(b)(1)(B)(iv)(III)(aa) of the Food Stamp Act 
        of 1977 (7 U.S.C. 2026(b)(1)(B)(iv)(III)(aa)) is amended by 
        striking ``the last 2 sentences of section 3(i)'' and inserting 
        ``paragraphs (4) and (5) of section 3(i)''.

SEC. 4113. REDEMPTION OF BENEFITS THROUGH GROUP LIVING ARRANGEMENTS.

    (a) In General.--Section 10 of the Food Stamp Act of 1977 (7 U.S.C. 
2019) is amended by inserting after the first sentence the following: 
``Notwithstanding the preceding sentence, a center, organization, 
institution, shelter, group living arrangement, or establishment 
described in that sentence may be authorized to redeem coupons through a 
financial institution described in that sentence if the center, 
organization, institution, shelter, group living arrangement, or 
establishment is equipped with 1 or more point-of-sale devices and is 
operating in an area in which an electronic benefit transfer system 
described in section 7(i) has been implemented.''.

[[Page 116 STAT. 314]]

    (b) Effective <<NOTE: 7 USC 2019 note.>> Date.--The amendment made 
by this section takes effect on the date of enactment of this Act.

SEC. 4114. AVAILABILITY OF FOOD STAMP PROGRAM APPLICATIONS ON THE 
            INTERNET.

    (a) In General.--Section 11(e)(2)(B)(ii) of the Food Stamp Act of 
1977 (7 U.S.C. 2020(e)(2)(B)(ii)) is amended--
            (1) by inserting ``(I)'' after ``(ii)'';
            (2) in subclause (I) (as designated by paragraph (1)), by 
        adding ``and'' at the end; and
            (3) by adding at the end the following:
                    ``(II) if the State agency maintains a website for 
                the State agency, shall make the application available 
                on the website in each language in which the State 
                agency makes a printed application available;''.

    (b) Effective <<NOTE: 7 USC 2020 note.>> Date.--The amendments made 
by this section take effect 18 months after the date of enactment of 
this Act.

SEC. 4115. TRANSITIONAL FOOD STAMPS FOR FAMILIES MOVING FROM WELFARE.

    (a) In General.--Section 11 of the Food Stamp Act of 1977 (7 U.S.C. 
2020) is amended by adding at the end the following:
    ``(s) Transitional Benefits Option.--
            ``(1) In general.--A State agency may provide transitional 
        food stamp benefits to a household that ceases to receive cash 
        assistance under a State program funded under part A of title IV 
        of the Social Security Act (42 U.S.C. 601 et seq.).
            ``(2) Transitional benefits period.--Under paragraph (1), a 
        household may receive transitional food stamp benefits for a 
        period of not more than 5 months after the date on which cash 
        assistance is terminated.
            ``(3) Amount of benefits.--During the transitional benefits 
        period under paragraph (2), a household shall receive an amount 
        of food stamp benefits equal to the allotment received in the 
        month immediately preceding the date on which cash assistance 
        was terminated, adjusted for the change in household income as a 
        result of--
                    ``(A) the termination of cash assistance; and
                    ``(B) at the option of the State agency, information 
                from another program in which the household 
                participates.
            ``(4) Determination of future eligibility.--In the final 
        month of the transitional benefits period under paragraph (2), 
        the State agency may--
                    ``(A) require the household to cooperate in a 
                recertification of eligibility; and
                    ``(B) initiate a new certification period for the 
                household without regard to whether the preceding 
                certification period has expired.
            ``(5) Limitation.--A household shall not be eligible for 
        transitional benefits under this subsection if the household--
                    ``(A) loses eligibility under section 6;
                    ``(B) is sanctioned for a failure to perform an 
                action required by Federal, State, or local law relating 
                to a cash assistance program described in paragraph (1); 
                or
                    ``(C) is a member of any other category of 
                households designated by the State agency as ineligible 
                for transitional benefits.
            ``(6) Applications for recertification.--

[[Page 116 STAT. 315]]

                    ``(A) In general.--A household receiving 
                transitional benefits under this subsection may apply 
                for recertification at any time during the transitional 
                benefits period under paragraph (2).
                    ``(B) Determination of allotment.--If a household 
                applies for recertification under subparagraph (A), the 
                allotment of the household for all subsequent months 
                shall be determined without regard to this 
                subsection.''.

    (b) Conforming Amendments.--
            (1) Section 3(c) of the Food Stamp Act of 1977 (7 U.S.C. 
        2012(c)) is amended by adding at the end the following: ``The 
        limits specified in this subsection may be extended until the 
        end of any transitional benefit period established under section 
        11(s).''.
            (2) Section 6(c) of the Food Stamp Act of 1977 (7 U.S.C. 
        2015(c)) is amended by striking ``No household'' and inserting 
        ``Except in a case in which a household is receiving 
        transitional benefits during the transitional benefits period 
        under section 11(s), no household''.

SEC. 4116. GRANTS FOR SIMPLE APPLICATION AND ELIGIBILITY DETERMINATION 
            SYSTEMS AND IMPROVED ACCESS TO BENEFITS.

    (a) In General.--Section 11 of the Food Stamp Act of 1977 (7 U.S.C. 
2020) (as amended by section 4115(a)) is amended by adding at the end 
the following:
    ``(t) Grants for Simple Application and Eligibility Determination 
Systems and Improved Access to Benefits.--
            ``(1) In general.--For each of fiscal years 2003 through 
        2007, the Secretary shall use not more than $5,000,000 of funds 
        made available under section 18(a)(1) to make grants to pay 100 
        percent of the costs of eligible entities approved by the 
        Secretary to carry out projects to develop and implement--
                    ``(A) simple food stamp application and eligibility 
                determination systems; or
                    ``(B) measures to improve access to food stamp 
                benefits by eligible households.
            ``(2) Types of projects.--A project under paragraph (1) may 
        consist of--
                    ``(A) coordinating application and eligibility 
                determination processes, including verification 
                practices, under the food stamp program and other 
                Federal, State, and local assistance programs;
                    ``(B) establishing methods for applying for benefits 
                and determining eligibility that--
                          ``(i) more extensively use--
                                    ``(I) communications by telephone; 
                                and
                                    ``(II) electronic alternatives such 
                                as the Internet; or
                          ``(ii) otherwise improve the administrative 
                      infrastructure used in processing applications and 
                      determining eligibility;
                    ``(C) developing procedures, training materials, and 
                other resources aimed at reducing barriers to 
                participation and reaching eligible households;

[[Page 116 STAT. 316]]

                    ``(D) improving methods for informing and enrolling 
                eligible households; or
                    ``(E) carrying out such other activities as the 
                Secretary determines to be appropriate.
            ``(3) Limitation.--A grant under this subsection shall not 
        be made for the ongoing cost of carrying out any project.
            ``(4) Eligible entities.--To be eligible to receive a grant 
        under this subsection, an entity shall be--
                    ``(A) a State agency administering the food stamp 
                program;
                    ``(B) a State or local government;
                    ``(C) an agency providing health or welfare 
                services;
                    ``(D) a public health or educational entity; or
                    ``(E) a private nonprofit entity such as a 
                community-based organization, food bank, or other 
                emergency feeding organization.
            ``(5) Selection of eligible entities.--The Secretary--
                    ``(A) shall develop criteria for the selection of 
                eligible entities to receive grants under this 
                subsection; and
                    ``(B) may give preference to any eligible entity 
                that consists of a partnership between a governmental 
                entity and a nongovernmental entity.''.

    (b) Conforming Amendments.--Section 17 of the Food Stamp Act of 1977 
(7 U.S.C. 2026) is amended--
            (1) by striking subsection (i); and
            (2) by redesignating subsections (j) and (k) as subsections 
        (i) and (j), respectively.

SEC. 4117. DELIVERY TO RETAILERS OF NOTICES OF ADVERSE ACTION.

    (a) In General.--Section 14(a) of the Food Stamp Act of 1977 (7 
U.S.C. 2023(a)) is amended by striking paragraph (2) and inserting the 
following:
            ``(2) Delivery of notices.--A notice under paragraph (1) 
        shall be delivered by any form of delivery that the Secretary 
        determines will provide evidence of the delivery.''.

    (b) Effective <<NOTE: 7 USC 2023 note.>> Date.--The amendment made 
by this section takes effect on the date of enactment of this Act.

SEC. 4118. REFORM OF QUALITY CONTROL SYSTEM.

    (a) In General.--Section 16(c) of the Food Stamp Act of 1977 (7 
U.S.C. 2025(c)) is amended--
            (1) by striking ``(c)(1) The program'' and all that follows 
        through the end of paragraph (1) and inserting the following:

    ``(c) Quality Control System.--
            ``(1) In general.--
                    ``(A) System.--In carrying out the food stamp 
                program, the Secretary shall carry out a system that 
                enhances payment accuracy and improves administration by 
                establishing fiscal incentives that require State 
                agencies with high payment error rates to share in the 
                cost of payment error.
                    ``(B) Adjustment of federal share of administrative 
                costs for fiscal years before fiscal year 2003.--
                          ``(i) In general.--Subject to clause (ii), 
                      with respect to any fiscal year before fiscal year 
                      2003, the Secretary shall adjust a State agency's 
                      federally funded share of administrative costs 
                      under subsection (a), other than the costs already 
                      shared in excess of 50

[[Page 116 STAT. 317]]

                      percent under the proviso in the first sentence of 
                      subsection (a) or under subsection (g), by 
                      increasing that share of all such administrative 
                      costs by 1 percentage point to a maximum of 60 
                      percent of all such administrative costs for each 
                      full \1/10\ of a percentage point by which the 
                      payment error rate is less than 6 percent.
                          ``(ii) Limitation.--Only States with a rate of 
                      invalid decisions in denying eligibility that is 
                      less than a nationwide percentage that the 
                      Secretary determines to be reasonable shall be 
                      entitled to the adjustment under clause (i).
                    ``(C) Establishment of liability amount for fiscal 
                year 2003 and thereafter.--With respect to fiscal year 
                2004 and any fiscal year thereafter for which the 
                Secretary determines that, for the second or subsequent 
                consecutive fiscal year, a 95 percent statistical 
                probability exists that the payment error rate of a 
                State agency exceeds 105 percent of the national 
                performance measure for payment error rates announced 
                under paragraph (6), the Secretary shall establish an 
                amount for which the State agency may be liable 
                (referred to in this paragraph as the `liability 
                amount') that is equal to the product obtained by 
                multiplying--
                          ``(i) the value of all allotments issued by 
                      the State agency in the fiscal year;
                          ``(ii) the difference between--
                                    ``(I) the payment error rate of the 
                                State agency; and
                                    ``(II) 6 percent; and
                          ``(iii) 10 percent.
                    ``(D) Authority of secretary with respect to 
                liability amount.--With respect to the liability amount 
                established for a State agency under subparagraph (C) 
                for any fiscal year, the Secretary shall--
                          ``(i)(I) waive the responsibility of the State 
                      agency to pay all or any portion of the liability 
                      amount established for the fiscal year (referred 
                      to in this paragraph as the `waiver amount');
                          ``(II) require that a portion, not to exceed 
                      50 percent, of the liability amount established 
                      for the fiscal year be used by the State agency 
                      for new investment, approved by the Secretary, to 
                      improve administration by the State agency of the 
                      food stamp program (referred to in this paragraph 
                      as the `new investment amount'), which new 
                      investment amount shall not be matched by Federal 
                      funds;
                          ``(III) designate a portion, not to exceed 50 
                      percent, of the amount established for the fiscal 
                      year for payment to the Secretary in accordance 
                      with subparagraph (E) (referred to in this 
                      paragraph as the `at-risk amount'); or
                          ``(IV) take any combination of the actions 
                      described in subclauses (I) through (III); or
                          ``(ii) make the determinations described in 
                      clause (i) and enter into a settlement with the 
                      State agency, only with respect to any waiver 
                      amount or new investment amount, before the end of 
                      the fiscal year in

[[Page 116 STAT. 318]]

                      which the liability amount is determined under 
                      subparagraph (C).
                    ``(E) Payment of at-risk amount for certain 
                states.--
                          ``(i) In general.--A State agency shall pay to 
                      the Secretary the at-risk amount designated under 
                      subparagraph (D)(i)(III) for any fiscal year in 
                      accordance with clause (ii), if, with respect to 
                      the immediately following fiscal year, a liability 
                      amount has been established for the State agency 
                      under subparagraph (C).
                          ``(ii) Method of payment of at-risk amount.--
                                    ``(I) Remission to the secretary.--
                                In the case of a State agency required 
                                to pay an at-risk amount under clause 
                                (i), as soon as practicable after 
                                completion of all administrative and 
                                judicial reviews with respect to that 
                                requirement to pay, the chief executive 
                                officer of the State shall remit to the 
                                Secretary the at-risk amount required to 
                                be paid.
                                    ``(II) Alternative method of 
                                collection.--
                                            ``(aa) In general.--If the 
                                        chief executive officer of the 
                                        State fails to make the payment 
                                        under subclause (I) within a 
                                        reasonable period of time 
                                        determined by the Secretary, the 
                                        Secretary may reduce any amount 
                                        due to the State agency under 
                                        any other provision of this 
                                        section by the amount required 
                                        to be paid under clause (i).
                                            ``(bb) Accrual of 
                                        interest.--During any period of 
                                        time determined by the Secretary 
                                        under item (aa), interest on the 
                                        payment under subclause (I) 
                                        shall not accrue under section 
                                        13(a)(2).
                    ``(F) Use of portion of liability amount for new 
                investment.--
                          ``(i) Reduction of other amounts due to state 
                      agency.--In the case of a State agency that fails 
                      to comply with a requirement for new investment 
                      under subparagraph (D)(i)(II) or clause (iii)(I), 
                      the Secretary may reduce any amount due to the 
                      State agency under any other provision of this 
                      section by the portion of the liability amount 
                      that has not been used in accordance with that 
                      requirement.
                          ``(ii) Effect of state agency's wholly 
                      prevailing on appeal.--If a State agency begins 
                      required new investment under subparagraph 
                      (D)(i)(II), the State agency appeals the liability 
                      amount of the State agency, and the determination 
                      by the Secretary of the liability amount is 
                      reduced to $0 on administrative or judicial 
                      review, the Secretary shall pay to the State 
                      agency an amount equal to 50 percent of the new 
                      investment amount that was included in the 
                      liability amount subject to the appeal.
                          ``(iii) Effect of secretary's wholly 
                      prevailing on appeal.--If a State agency does not 
                      begin required new investment under subparagraph 
                      (D)(i)(II), the State agency appeals the liability 
                      amount of the State

[[Page 116 STAT. 319]]

                      agency, and the determination by the Secretary of 
                      the liability amount is wholly upheld on 
                      administrative or judicial review, the Secretary 
                      shall--
                                    ``(I) require all or any portion of 
                                the new investment amount to be used by 
                                the State agency for new investment, 
                                approved by the Secretary, to improve 
                                administration by the State agency of 
                                the food stamp program, which amount 
                                shall not be matched by Federal funds; 
                                and
                                    ``(II) require payment of any 
                                remaining portion of the new investment 
                                amount in accordance with subparagraph 
                                (E)(ii).
                          ``(iv) Effect of neither party's wholly 
                      prevailing on appeal.--The 
                      Secretary <<NOTE: Regulations.>> shall promulgate 
                      regulations regarding obligations of the Secretary 
                      and the State agency in a case in which the State 
                      agency appeals the liability amount of the State 
                      agency and neither the Secretary nor the State 
                      agency wholly prevails.
                    ``(G) Corrective action plans.--The Secretary shall 
                foster management improvements by the States by 
                requiring State agencies, other than State agencies with 
                payment error rates of less than 6 percent, to develop 
                and implement corrective action plans to reduce payment 
                errors.'';
            (2) in paragraph (4), by striking ``(4)'' and all that 
        follows through the end of the first sentence and inserting the 
        following:
            ``(4) Reporting requirements.--The Secretary may require a 
        State agency to report any factors that the Secretary considers 
        necessary to determine a State agency's payment error rate, 
        liability amount or new investment amount under paragraph (1), 
        or performance under the performance measures under subsection 
        (d).'';
            (3) in paragraph (5)--
                    (A) by striking ``(5)'' and all that follows through 
                the end of the second sentence and inserting the 
                following:
            ``(5) Procedures.--To facilitate the implementation of this 
        subsection, each State agency shall expeditiously submit to the 
        Secretary data concerning the operations of the State agency in 
        each fiscal year sufficient for the Secretary to establish the 
        State agency's payment error rate, liability amount or new 
        investment amount under paragraph (1), or performance under the 
        performance measures under subsection (d).''; and
                    (B) in the last sentence, by striking ``paragraph 
                (1)(C)'' and inserting ``paragraph (1)'';
            (4) in paragraph (6)--
                    (A) by striking ``(6) At'' and inserting the 
                following:
            ``(6) National performance measure for payment error 
        rates.--
                    ``(A) Announcement.--At'';
                    (B) in subparagraph (A) (as designated by 
                subparagraph (A)), by striking ``and incentive payments 
                or claims pursuant to paragraphs (1)(A) and (1)(C)'';
                    (C) in the first and third sentences, by striking 
                ``paragraph (5)'' each place it appears and inserting 
                ``paragraph (8)'';

[[Page 116 STAT. 320]]

                    (D) by striking ``Where a State'' and inserting the 
                following:
                    ``(B) Use of alternative measure of state error.--
                Where a State'';
                    (E) by striking ``The announced'' and inserting the 
                following:
                    ``(C) Use of national performance measure.--The 
                announced'';
                    (F) in subparagraph (C) (as designated by 
                subparagraph (E)), by striking ``the State share of the 
                cost of payment error under paragraph (1)(C)'' and 
                inserting ``the liability amount of a State under 
                paragraph (1)(C)''; and
                    (G) by adding at the end the following:
                    ``(D) No administrative or judicial review.--The 
                national performance measure announced under this 
                paragraph shall not be subject to administrative or 
                judicial review.'';
            (5) in paragraph (7)--
                    (A) by striking ``(7) If the Secretary asserts a 
                financial claim against'' and inserting the following:
            ``(7) Administrative and judicial review.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), if the Secretary asserts a 
                financial claim against or establishes a liability 
                amount with respect to'';
                    (B) in subparagraph (A) (as designated by 
                subparagraph (A)), by striking ``paragraph (1)(C)'' and 
                inserting ``paragraph (1)''; and
                    (C) by adding at the end the following:
                    ``(B) Determination of payment error rate.--With 
                respect to any fiscal year, a determination of the 
                payment error rate of a State agency or a determination 
                whether the payment error rate exceeds 105 percent of 
                the national performance measure for payment error rates 
                shall be subject to administrative or judicial review 
                only if the Secretary establishes a liability amount 
                with respect to the fiscal year under paragraph (1)(C).
                    ``(C) Authority of secretary with respect to 
                liability amount.--An action by the Secretary under 
                subparagraph (D) or (F)(iii) of paragraph (1) shall not 
                be subject to administrative or judicial review.''; and
            (6) in paragraph (8)--
                    (A) in subparagraph (A), by striking ``paragraph 
                (1)(C)'' and inserting ``paragraph (1)'';
                    (B) in subparagraph (C)--
                          (i) in clause (i), by striking ``payment 
                      claimed against State agencies; and'' and 
                      inserting ``payment claimed against State agencies 
                      or liability amount established with respect to 
                      State agencies;'';
                          (ii) in clause (ii), by striking ``claims.'' 
                      and inserting ``claims or liability amounts; 
                      and''; and
                          (iii) by adding at the end the following:
            ``(iii) provide a copy of the document providing 
        notification under clause (ii) to the chief executive officer 
        and the legislature of the State.''; and
                    (C) in subparagraphs (D) and (H), by inserting ``or 
                liability amount'' after ``claim'' each place it 
                appears.

[[Page 116 STAT. 321]]

    (b) Authority To Settle Claims Concerning At-Risk Amounts.--Section 
13(a) of the Food Stamp Act of 1977 (7 U.S.C. 2022(a)) is amended--
            (1) by striking ``(a)(1) The'' and inserting the following:

    ``(a) General Authority of the Secretary.--
            ``(1) Determination of claims.--Except in the case of an at-
        risk amount required under section 16(c)(1)(D)(i)(III), the'';
            (2) by striking the fourth sentence;
            (3) by striking ``To the extent'' and inserting the 
        following:
            ``(2) Claims established under quality control system.--To 
        the extent'';
            (4) in paragraph (2) (as designated by paragraph (3)), by 
        striking ``section 16(c)(1)(C)'' and inserting ``section 
        16(c)(1)'';
            (5) by striking ``Any interest'' and inserting the 
        following:
            ``(3) Computation of interest.--Any interest''; and
            (6) by striking ``(2) Each adult'' and inserting the 
        following:
            ``(4) Joint and several liability of household members.--
        Each adult''.

    (c) Crediting of Payments to Food Stamp Appropriations Account.--
Section 18(e) of the Food Stamp Act of 1977 (7 U.S.C. 2027(e)) is 
amended in the first sentence--
            (1) by striking ``11(g) and (h), and'' and inserting 
        ``subsections (g) and (h) of section 11,''; and
            (2) by inserting ``and section 16(c)(1),'' after ``section 
        13,''.

    (d) Conforming Amendments.--Section 22(h) of the Food Stamp Act of 
1977 (7 U.S.C. 2031(h)) is amended--
            (1) in the second sentence, by striking ``section 
        16(c)(1)(C)'' and inserting ``section 16(c)(1)''; and
            (2) by striking the third sentence.

    (e) Applicability.--The amendments <<NOTE: 7 USC 2022 note.>> made 
by this section shall not apply with respect to any sanction, appeal, 
new investment agreement, or other action by the Secretary of 
Agriculture or a State agency that is based on a payment error rate 
calculated for any fiscal year before fiscal year 2003.

SEC. 4119. IMPROVEMENT OF CALCULATION OF STATE PERFORMANCE MEASURES.

    (a) In General.--Section 16(c)(8) of the Food Stamp Act of 1977 (7 
U.S.C. 2025(c)(8)) is amended--
            (1) in subparagraph (B), by striking ``180 days after the 
        end of the fiscal year'' and inserting ``the first May 31 after 
        the end of the fiscal year referred to in subparagraph (A)''; 
        and
            (2) in subparagraph (C), by striking ``30 days thereafter'' 
        and inserting ``the first June 30 after the end of the fiscal 
        year referred to in subparagraph (A)''.

    (b) Effective <<NOTE: 7 USC 2025 note.>> Date.--The amendments made 
by this section take effect on the date of enactment of this Act.

SEC. 4120. BONUSES FOR STATES THAT DEMONSTRATE HIGH OR MOST IMPROVED 
            PERFORMANCE.

    (a) In General.--Section 16 of the Food Stamp Act of 1977 (7 U.S.C. 
2025) is amended by striking subsection (d) and inserting the following:
    ``(d) Bonuses for States That Demonstrate High or Most Improved 
Performance.--
            ``(1) Fiscal years 2003 and 2004.--

[[Page 116 STAT. 322]]

                    ``(A) Guidance.-- <<NOTE: Deadline.>> With respect 
                to fiscal years 2003 and 2004, the Secretary shall 
                establish, in guidance issued to State agencies not 
                later than October 1, 2002--
                          ``(i) performance criteria relating to--
                                    ``(I) actions taken to correct 
                                errors, reduce rates of error, and 
                                improve eligibility determinations; and
                                    ``(II) other indicators of effective 
                                administration determined by the 
                                Secretary; and
                          ``(ii) standards for high and most improved 
                      performance to be used in awarding performance 
                      bonus payments under subparagraph (B)(ii).
                    ``(B) Performance bonus payments.--With respect to 
                each of fiscal years 2003 and 2004, the Secretary 
                shall--
                          ``(i) measure the performance of each State 
                      agency with respect to the criteria established 
                      under subparagraph (A)(i); and
                          ``(ii) subject to paragraph (3), award 
                      performance bonus payments in the following fiscal 
                      year, in a total amount of $48,000,000 for each 
                      fiscal year, to State agencies that meet standards 
                      for high or most improved performance established 
                      by the Secretary under subparagraph (A)(ii).
            ``(2) Fiscal years 2005 and thereafter.--
                    ``(A) Regulations.--With respect to fiscal year 2005 
                and each fiscal year thereafter, the Secretary shall--
                          ``(i) establish, by regulation, performance 
                      criteria relating to--
                                    ``(I) actions taken to correct 
                                errors, reduce rates of error, and 
                                improve eligibility determinations; and
                                    ``(II) other indicators of effective 
                                administration determined by the 
                                Secretary;
                          ``(ii) establish, by regulation, standards for 
                      high and most improved performance to be used in 
                      awarding performance bonus payments under 
                      subparagraph (B)(ii); and
                          ``(iii) before issuing proposed regulations to 
                      carry out clauses (i) and (ii), solicit ideas for 
                      performance criteria and standards for high and 
                      most improved performance from State agencies and 
                      organizations that represent State interests.
                    ``(B) Performance bonus payments.--With respect to 
                fiscal year 2005 and each fiscal year thereafter, the 
                Secretary shall--
                          ``(i) measure the performance of each State 
                      agency with respect to the criteria established 
                      under subparagraph (A)(i); and
                          ``(ii) subject to paragraph (3), award 
                      performance bonus payments in the following fiscal 
                      year, in a total amount of $48,000,000 for each 
                      fiscal year, to State agencies that meet standards 
                      for high or most improved performance established 
                      by the Secretary under subparagraph (A)(ii).
            ``(3) Prohibition on receipt of performance bonus 
        payments.--A State agency shall not be eligible for a 
        performance bonus payment with respect to any fiscal year for 
        which the

[[Page 116 STAT. 323]]

        State agency has a liability amount established under subsection 
        (c)(1)(C).
            ``(4) Payments not subject to judicial review.--A 
        determination by the Secretary whether, and in what amount, to 
        award a performance bonus payment under this subsection shall 
        not be subject to administrative or judicial review.''.

    (b) Effective <<NOTE: 7 USC 2025 note.>> Date.--The amendment made 
by this section takes effect on the date of enactment of this Act.

SEC. 4121. EMPLOYMENT AND TRAINING PROGRAM.

    (a) Levels of Funding.--Section 16(h)(1) of the Food Stamp Act of 
1977 (7 U.S.C. 2025(h)(1)) is amended--
            (1) in subparagraph (A), by striking clause (vii) and 
        inserting the following:
                          ``(vii) for each of fiscal years 2002 through 
                      2007, $90,000,000.'';
            (2) by striking subparagraph (B) and inserting the 
        following:
                    ``(B) Allocation.--Funds made available under 
                subparagraph (A) shall be made available to and 
                reallocated among State agencies under a reasonable 
                formula that--
                          ``(i) is determined and adjusted by the 
                      Secretary; and
                          ``(ii) takes into account the number of 
                      individuals who are not exempt from the work 
                      requirement under section 6(o).''; and
            (3) by striking subparagraphs (E) through (G) and inserting 
        the following:
                    ``(E) Additional allocations for states that ensure 
                availability of work opportunities.--
                          ``(i) In general.--In addition to the 
                      allocations under subparagraph (A), from funds 
                      made available under section 18(a)(1), the 
                      Secretary shall allocate not more than $20,000,000 
                      for each of fiscal years 2002 through 2007 to 
                      reimburse a State agency that is eligible under 
                      clause (ii) for the costs incurred in serving food 
                      stamp recipients who--
                                    ``(I) are not eligible for an 
                                exception under section 6(o)(3); and
                                    ``(II) are placed in and comply with 
                                a program described in subparagraph (B) 
                                or (C) of section 6(o)(2).
                          ``(ii) Eligibility.--To be eligible for an 
                      additional allocation under clause (i), a State 
                      agency shall make and comply with a commitment to 
                      offer a position in a program described in 
                      subparagraph (B) or (C) of section 6(o)(2) to each 
                      applicant or recipient who--
                                    ``(I) is in the last month of the 3-
                                month period described in section 
                                6(o)(2);
                                    ``(II) is not eligible for an 
                                exception under section 6(o)(3);
                                    ``(III) is not eligible for a waiver 
                                under section 6(o)(4); and
                                    ``(IV) is not exempt under section 
                                6(o)(6).''.

    (b) Carryover <<NOTE: 7 USC 2025 note.>> Funds.--Notwithstanding any 
other provision of law, funds provided under section 16(h)(1)(A) of the 
Food Stamp

[[Page 116 STAT. 324]]

Act of 1977 (7 U.S.C. 2025(h)(1)(A)) for any fiscal year before fiscal 
year 2002 shall be rescinded on the date of enactment of this Act, 
unless obligated by a State agency before that date.

    (c) Participant Expenses.--Section 6(d)(4)(I)(i)(I) of the Food 
Stamp Act of 1977 (7 U.S.C. 2015(d)(4)(I)(i)(I)) is amended by striking 
``, except that the State agency may limit such reimbursement to each 
participant to $25 per month''.
    (d) Federal Reimbursement.--Section 16(h)(3) of the Food Stamp Act 
of 1977 (7 U.S.C. 2025(h)(3)) is amended by striking ``such total amount 
shall not exceed an amount representing $25 per participant per month 
for costs of transportation and other actual costs (other than dependent 
care costs) and'' and inserting ``the amount of the reimbursement for 
dependent care expenses shall not exceed''.
    (e) Effective <<NOTE: 7 USC 2015 note.>> Date.--The amendments made 
by this section take effect on the date of enactment of this Act.

SEC. 4122. REAUTHORIZATION OF FOOD STAMP PROGRAM AND FOOD DISTRIBUTION 
            PROGRAM ON INDIAN RESERVATIONS.

    (a) Reductions in Payments for Administrative Costs.--Section 
16(k)(3) of the Food Stamp Act of 1977 (7 U.S.C. 2025(k)(3)) is 
amended--
            (1) in the first sentence of subparagraph (A), by striking 
        ``2002'' and inserting ``2007''; and
            (2) in subparagraph (B)(ii), by striking ``2002'' and 
        inserting ``2007''.

    (b) Cash Payment Pilot Projects.--Section 17(b)(1)(B)(vi) of the 
Food Stamp Act of 1977 (7 U.S.C. 2026(b)(1)(B)(vi)) is amended by 
striking ``2002'' and inserting ``2007''.
    (c) Authorization of Appropriations.--Section 18(a)(1) of the Food 
Stamp Act of 1977 (7 U.S.C. 2027(a)(1)) is amended in the first sentence 
by striking ``1996 through 2002'' and inserting ``2003 through 2007''.

SEC. 4123. EXPANDED GRANT AUTHORITY.

    (a) In General.--Section 17(a)(1) of the Food Stamp Act of 1977 (7 
U.S.C. 2026(a)(1)) is amended--
            (1) by striking ``, by way of making contracts with or 
        grants to public or private organizations or agencies,'' and 
        inserting ``enter into contracts with or make grants to public 
        or private organizations or agencies under this section to''; 
        and
            (2) by adding at the end the following: ``The waiver 
        authority of the Secretary under subsection (b) shall extend to 
        all contracts and grants under this section.''.

    (b) Effective <<NOTE: 7 USC 2026 note.>> Date.--The amendments made 
by this section take effect on the date of enactment of this Act.

SEC. 4124. CONSOLIDATED BLOCK GRANTS FOR PUERTO RICO AND AMERICAN SAMOA.

    (a) Consolidated Funding.--Section 19 of the Food Stamp Act of 1977 
(7 U.S.C. 2028) is amended--
            (1) by striking the section heading and ``(a)(1)(A) From'' 
        and all that follows through ``(2) The'' and inserting the 
        following:

[[Page 116 STAT. 325]]

``SEC. 19. CONSOLIDATED BLOCK GRANTS FOR PUERTO RICO AND AMERICAN SAMOA.

    ``(a) Payments to Governmental Entities.--
            ``(1) Definition of governmental entity.--In this 
        subsection, the term `governmental entity' means--
                    ``(A) the Commonwealth of Puerto Rico; and
                    ``(B) American Samoa.
            ``(2) Block grants.--
                    ``(A) Amount of block grants.--From the sums 
                appropriated under this Act, the Secretary shall, 
                subject to this section, pay to governmental entities to 
                pay the expenditures for nutrition assistance programs 
                for needy persons as described in subparagraphs (B) and 
                (C)--
                          ``(i) for fiscal year 2003, $1,401,000,000; 
                      and
                          ``(ii) for each of fiscal years 2004 through 
                      2007, the amount specified in clause (i), as 
                      adjusted by the percentage by which the thrifty 
                      food plan has been adjusted under section 3(o)(4) 
                      between June 30, 2002, and June 30 of the 
                      immediately preceding fiscal year.
                    ``(B) Payments to commonwealth of puerto rico.--
                          ``(i) In general.--For fiscal year 2003 and 
                      each fiscal year thereafter, the Secretary shall 
                      use 99.6 percent of the funds made available under 
                      subparagraph (A) for payment to the Commonwealth 
                      of Puerto Rico to pay--
                                    ``(I) 100 percent of the 
                                expenditures by the Commonwealth for the 
                                fiscal year for the provision of 
                                nutrition assistance included in the 
                                plan of the Commonwealth approved under 
                                subsection (b); and
                                    ``(II) 50 percent of the related 
                                administrative expenses.
                          ``(ii) Exception for expenditures for certain 
                      systems.--Notwithstanding clause (i), the 
                      Commonwealth of Puerto Rico may spend in fiscal 
                      year 2002 or 2003 not more than $6,000,000 of the 
                      amount required to be paid to the Commonwealth for 
                      fiscal year 2002 under this paragraph (as in 
                      effect on the day before the date of enactment of 
                      this clause) to pay 100 percent of the costs of--
                                    ``(I) upgrading and modernizing the 
                                electronic data processing system used 
                                to carry out nutrition assistance 
                                programs for needy persons;
                                    ``(II) implementing systems to 
                                simplify the determination of 
                                eligibility to receive the nutrition 
                                assistance; and
                                    ``(III) operating systems to deliver 
                                the nutrition assistance through 
                                electronic benefit transfers.
                    ``(C) Payments to american samoa.--For fiscal year 
                2003 and each fiscal year thereafter, the Secretary 
                shall use 0.4 percent of the funds made available under 
                subparagraph (A) for payment to American Samoa to pay 
                100 percent of the expenditures by American Samoa for a 
                nutrition assistance program extended under section 
                601(c) of Public Law 96-597 (48 U.S.C. 1469d(c)).
                    ``(D) Carryover of funds.--For fiscal year 2002 and 
                each fiscal year thereafter, not more than 2 percent of 
                the funds made available under this paragraph for the

[[Page 116 STAT. 326]]

                fiscal year to each governmental entity may be carried 
                over to the following fiscal year.
            ``(3) Time and manner of payments to commonwealth of puerto 
        rico.--The'';
            (2) in subsection (b), by striking ``subsection (a)(1)(A)'' 
        each place it appears and inserting ``subsection (a)(2)(B)''; 
        and
            (3) in subsection (c), by striking ``subsection (a)(1)(A)'' 
        each place it appears and inserting ``subsection (a)(2)(A)''.

    (b) Conforming Amendment.--Section 24 of the Food Stamp Act of 1977 
(7 U.S.C. 2033) is repealed.
    (c) Applicability.-- <<NOTE: 7 USC 2028 note.>> 
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section apply beginning on October 1, 
        2002.
            (2) Exceptions.--Subparagraphs (B)(ii) and (D) of section 
        19(a)(2) of the Food Stamp Act of 1977 (as amended by subsection 
        (a)(1)) apply beginning on the date of enactment of this Act.

    (d) Effective <<NOTE: 7 USC 2028 note.>> Date.--The amendments made 
by this section take effect on the date of enactment of this Act.

SEC. 4125. ASSISTANCE FOR COMMUNITY FOOD PROJECTS.

    (a) In General.--Section 25 of the Food Stamp Act of 1977 (7 U.S.C. 
2034) is amended--
            (1) in subsection (a)--
                    (A) by striking ``(1)'' and inserting ``(1)(A)'';
                    (B) by redesignating paragraphs (2) and (3) as 
                subparagraphs (B) and (C), respectively, of paragraph 
                (1);
                    (C) in paragraph (1)(C) (as redesignated by 
                subparagraph (B)), by striking the period at the end and 
                inserting ``; or''; and
                    (D) by adding at the end the following:
            ``(2) meet specific State, local, or neighborhood food and 
        agricultural needs, including needs for--
                    ``(A) infrastructure improvement and development;
                    ``(B) planning for long-term solutions; or
                    ``(C) the creation of innovative marketing 
                activities that mutually benefit agricultural producers 
                and low-income consumers.'';
            (2) in subsection (b)(2)(B)--
                    (A) by striking ``$2,500,000'' and inserting 
                ``$5,000,000''; and
                    (B) by striking ``2002'' and inserting ``2007'';
            (3) in subsection (d), by striking paragraph (4) and 
        inserting the following:
            ``(4) encourage long-term planning activities, and 
        multisystem, interagency approaches with multistakeholder 
        collaborations, that build the long-term capacity of communities 
        to address the food and agricultural problems of the 
        communities, such as food policy councils and food planning 
        associations.''; and
            (4) by striking subsection (h) and inserting the following:

    ``(h) Innovative Programs for Addressing Common Community 
Problems.--
            ``(1) In <<NOTE: Contracts.>> general.--The Secretary shall 
        offer to enter into a contract with, or make a grant to, 1 
        nongovernmental organization that meets the requirements of 
        paragraph (2) to

[[Page 116 STAT. 327]]

        coordinate with Federal agencies, States, political 
        subdivisions, and nongovernmental organizations (collectively 
        referred to in this subsection as `targeted entities') to gather 
        information, and recommend to the targeted entities, innovative 
        programs for addressing common community problems, including--
                    ``(A) loss of farms and ranches;
                    ``(B) rural poverty;
                    ``(C) welfare dependency;
                    ``(D) hunger;
                    ``(E) the need for job training; and
                    ``(F) the need for self-sufficiency by individuals 
                and communities.
            ``(2) Nongovernmental organization.--The nongovernmental 
        organization referred to in paragraph (1) shall--
                    ``(A) be selected by the Secretary on a competitive 
                basis;
                    ``(B) be experienced in working with other targeted 
                entities and in organizing workshops that demonstrate 
                programs to other targeted entities;
                    ``(C) be experienced in identifying programs that 
                effectively address community problems described in 
                paragraph (1) that can be implemented by other targeted 
                entities;
                    ``(D) be experienced in, and capable of, receiving 
                information from and communicating with other targeted 
                entities throughout the United States;
                    ``(E) be experienced in operating a national 
                information clearinghouse that addresses 1 or more of 
                the community problems described in paragraph (1); and
                    ``(F) as a condition of entering into the contract 
                or receiving the grant referred to in paragraph (1), 
                agree--
                          ``(i) to contribute in-kind resources toward 
                      implementation of the contract or grant;
                          ``(ii) to provide to other targeted entities 
                      information and guidance on the innovative 
                      programs referred to in paragraph (1); and
                          ``(iii) to operate a national information 
                      clearinghouse on innovative means for addressing 
                      community problems described in paragraph (1) 
                      that--
                                    ``(I) is easily usable by--
                                            ``(aa) Federal, State, and 
                                        local government agencies;
                                            ``(bb) local community 
                                        leaders;
                                            ``(cc) nongovernmental 
                                        organizations; and
                                            ``(dd) the public; and
                                    ``(II) includes information on 
                                approved community food projects.
            ``(3) Audits; effective use of funds.--The Secretary shall 
        establish auditing procedures and otherwise ensure the effective 
        use of funds made available to carry out this subsection.
            ``(4) Funding.--Not <<NOTE: Deadline.>> later than 90 days 
        after the date of enactment of this paragraph, and on October 1 
        of each of fiscal years 2003 through 2007, the Secretary shall 
        allocate to carry out this subsection $200,000 of the funds made 
        available under subsection (b), to remain available until 
        expended.''.

    (b) Effective <<NOTE: 7 USC 2034 note.>> Date.--The amendments made 
by this section take effect on the date of enactment of this Act.

[[Page 116 STAT. 328]]

SEC. 4126. AVAILABILITY OF COMMODITIES FOR THE EMERGENCY FOOD ASSISTANCE 
            PROGRAM.

    (a) In General.--Section 27(a) of the Food Stamp Act of 1977 (7 
U.S.C. 2036(a)) is amended--
            (1) by striking ``1997 through 2002'' and inserting ``2002 
        through 2007''; and
            (2) by striking ``$100,000,000'' and inserting 
        ``$140,000,000''.

    (b) Effective <<NOTE: 7 USC 2036 note.>> Date.--The amendments made 
by this section take effect on October 1, 2001.

                   Subtitle B--Commodity Distribution

SEC. 4201. COMMODITY SUPPLEMENTAL FOOD PROGRAM.

    (a) Commodity Distribution Program.--Section 4(a) of the Agriculture 
and Consumer Protection Act of 1973 (7 U.S.C. 612c note; Public Law 93-
86) is amended in the first sentence by striking ``2002'' and inserting 
``2007''.
    (b) Commodity Supplemental Food Program.--Section 5 of the 
Agriculture and Consumer Protection Act of 1973 (7 U.S.C. 612c note; 
Public Law 93-86) is amended--
            (1) by striking subsection (a) and inserting the following:

    ``(a) Grants Per Assigned Caseload Slot.--
            ``(1) In general.--In carrying out the program under section 
        4 (referred to in this section as the `commodity supplemental 
        food program'), for each of fiscal years 2003 through 2007, the 
        Secretary shall provide to each State agency from funds made 
        available to carry out that section (including any such funds 
        remaining available from the preceding fiscal year), a grant per 
        assigned caseload slot for administrative costs incurred by the 
        State agency and local agencies in the State in operating the 
        commodity supplemental food program.
            ``(2) Amount of grants.--
                    ``(A) Fiscal year 2003.--For fiscal year 2003, the 
                amount of each grant per assigned caseload slot shall be 
                equal to the amount of the grant per assigned caseload 
                slot for administrative costs in 2001, adjusted by the 
                percentage change between--
                          ``(i) the value of the State and local 
                      government price index, as published by the Bureau 
                      of Economic Analysis of the Department of 
                      Commerce, for the 12-month period ending June 30, 
                      2001; and
                          ``(ii) the value of that index for the 12-
                      month period ending June 30, 2002.
                    ``(B) Fiscal years 2004 through 2007.--For each of 
                fiscal years 2004 through 2007, the amount of each grant 
                per assigned caseload slot shall be equal to the amount 
                of the grant per assigned caseload slot for the 
                preceding fiscal year, adjusted by the percentage change 
                between--
                          ``(i) the value of the State and local 
                      government price index, as published by the Bureau 
                      of Economic Analysis of the Department of 
                      Commerce, for the 12-month period ending June 30 
                      of the second preceding fiscal year; and
                          ``(ii) the value of that index for the 12-
                      month period ending June 30 of the preceding 
                      fiscal year.'';

[[Page 116 STAT. 329]]

            (2) in subsection (d)(2), by striking ``2002'' each place it 
        appears and inserting ``2007''; and
            (3) by striking subsection (l) and inserting the following:

    ``(l) Use of Approved Food Safety Technology.--
            ``(1) In general.--In acquiring commodities for distribution 
        through a program specified in paragraph (2), the Secretary 
        shall not prohibit the use of any technology to improve food 
        safety that--
                    ``(A) has been approved by the Secretary; or
                    ``(B) has been approved or is otherwise allowed by 
                the Secretary of Health and Human Services.
            ``(2) Programs.--A program referred to in paragraph (1) is a 
        program authorized under--
                    ``(A) this Act;
                    ``(B) the Food Stamp Act of 1977 (7 U.S.C. 2011 et 
                seq.);
                    ``(C) the Emergency Food Assistance Act of 1983 (7 
                U.S.C. 7501 et seq.);
                    ``(D) the Richard B. Russell National School Lunch 
                Act (42 U.S.C. 1751 et seq.); or
                    ``(E) the Child Nutrition Act of 1966 (42 U.S.C. 
                1771 et seq.).''.

    (c) Additional <<NOTE: 7 USC 612c note.>> Funding for Certain 
States.--
            (1) In general.--Not later than 30 days after the date of 
        enactment of this Act, of the funds of the Commodity Credit 
        Corporation, the Secretary of Agriculture shall make available 
        an amount equal to the amount that the Secretary of Agriculture 
        determines to be necessary to permit each State that began 
        administering the commodity supplemental food program under the 
        Agriculture and Consumer Protection Act of 1973 (7 U.S.C. 612c 
        note; Public Law 93-86) in the 2000 caseload cycle to administer 
        the program, through the 2002 caseload cycle, at a caseload 
        level that is not less than the originally assigned caseload 
        level of the State.
            (2) Provision to states.--The Secretary shall provide to 
        each State described in paragraph (1) for the purpose described 
        in that paragraph the funds made available under that paragraph.

    (d) Effective <<NOTE: 7 USC 612c note.>> Date.--The amendment made 
by subsection (b)(3) takes effect on the date of enactment of this Act.

SEC. 4202. COMMODITY DONATIONS.

    (a) In General.--The Commodity Distribution Reform Act and WIC 
Amendments of 1987 (7 U.S.C. 612c note; Public Law 100-237) is amended--
            (1) by redesignating sections 17 and 18 as sections 18 and 
        19, respectively; and
            (2) by inserting after section 16 the following:

``SEC. 17. COMMODITY DONATIONS.

    ``(a) In General.--Notwithstanding any other provision of law 
concerning commodity donations, any commodities acquired in the conduct 
of the operations of the Commodity Credit Corporation and any 
commodities acquired under section 32 of the Act of August 24, 1935 (7 
U.S.C. 612c), to the extent that the commodities are in excess of the 
quantities of commodities that are essential to carry out other 
authorized activities of the Commodity Credit Corporation and the 
Secretary (including any quantity specifically

[[Page 116 STAT. 330]]

reserved for a specific purpose), may be used for any program authorized 
to be carried out by the Secretary that involves the acquisition of 
commodities for use in a domestic feeding program, including any program 
conducted by the Secretary that provides commodities to individuals in 
cases of hardship.
    ``(b) Programs.--A program described in subsection (a) includes a 
program authorized by--
            ``(1) the Emergency Food Assistance Act of 1983 (7 U.S.C. 
        7501 et seq.);
            ``(2) the Richard B. Russell National School Lunch Act (42 
        U.S.C. 1751 et seq.);
            ``(3) the Child Nutrition Act of 1966 (42 U.S.C. 1771 et 
        seq.);
            ``(4) the Older Americans Act of 1965 (42 U.S.C. 3001 et 
        seq.); or
            ``(5) such other laws as the Secretary determines to be 
        appropriate.''.

    (b) Effective <<NOTE: 7 USC 612c note.>> Date.--The amendments made 
by this section take effect on the date of enactment of this Act.

SEC. 4203. DISTRIBUTION OF SURPLUS COMMODITIES TO SPECIAL NUTRITION 
            PROJECTS.

    Section 1114(a)(2)(A) of the Agriculture and Food Act of 1981 (7 
U.S.C. 1431e(2)(A)) is amended in the first sentence by striking 
``2002'' and inserting ``2007''.

SEC. 4204. EMERGENCY FOOD ASSISTANCE.

    Section 204(a)(1) of the Emergency Food Assistance Act of 1983 (7 
U.S.C. 7508(a)(1)) is amended in the first sentence--
            (1) by striking ``$50,000,000'' and inserting 
        ``$60,000,000'';
            (2) by striking ``1991 through 2002'' and inserting ``2003 
        through 2007'';
            (3) by striking ``administrative'';
            (4) by inserting ``storage,'' after ``processing,''; and
            (5) by inserting ``, including commodities secured by 
        gleaning (as defined in section 111(a) of the Hunger Prevention 
        Act of 1988 (7 U.S.C. 612c note; Public Law 100-435))'' after 
        ``sources''.

            Subtitle C--Child Nutrition and Related Programs

SEC. 4301. COMMODITIES FOR SCHOOL LUNCH PROGRAM.

    (a) In General.--Section 6(e)(1)(B) of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1755(e)(1)(B)) is amended by 
striking ``2001'' and inserting ``2003''.
    (b) Effective <<NOTE: 42 USC 1755 note.>> Date.--The amendment made 
by this section takes effect on the date of enactment of this Act.

SEC. 4302. ELIGIBILITY FOR FREE AND REDUCED PRICE MEALS.

    (a) In General.--Section 9(b) of the Richard B. Russell National 
School Lunch Act (42 U.S.C. 1758(b)) is amended by adding at the end the 
following:
            ``(7) Exclusion of certain military housing allowances.--For 
        each of fiscal years 2002 and 2003, the amount of a basic 
        allowance provided under section 403 of title 37,

[[Page 116 STAT. 331]]

        United States Code, on behalf of a member of a uniformed service 
        for housing that is acquired or constructed under subchapter IV 
        of chapter 169 of title 10, United States Code, or any related 
        provision of law, shall not be considered to be income for the 
        purpose of determining the eligibility of a child who is a 
        member of the household of the member of a uniformed service for 
        free or reduced price lunches under this Act.''.

    (b) Effective <<NOTE: 42 USC 1758 note.>> Date.--The amendment made 
by this section takes effect on the date of enactment of this Act.

SEC. 4303. PURCHASES OF LOCALLY PRODUCED FOODS.

    Section 9 of the Richard B. Russell National School Lunch Act (42 
U.S.C. 1758) is amended by adding at the end the following:
    ``(j) Purchases of Locally Produced Foods.--
            ``(1) In general.--The Secretary shall--
                    ``(A) encourage institutions participating in the 
                school lunch program under this Act and the school 
                breakfast program established by section 4 of the Child 
                Nutrition Act of 1966 (42 U.S.C. 1773) to purchase, in 
                addition to other food purchases, locally produced foods 
                for school meal programs, to the maximum extent 
                practicable and appropriate;
                    ``(B) advise institutions participating in a program 
                described in subparagraph (A) of the policy described in 
                that subparagraph and post information concerning the 
                policy on the website maintained by the Secretary; and
                    ``(C) in accordance with requirements established by 
                the Secretary, provide startup grants to not more than 
                200 institutions to defray the initial costs of 
                equipment, materials, and storage facilities, and 
                similar costs, incurred in carrying out the policy 
                described in subparagraph (A).
            ``(2) Authorization of appropriations.--
                    ``(A) In general.--There is authorized to be 
                appropriated to carry out this subsection $400,000 for 
                each of fiscal years 2003 through 2007, to remain 
                available until expended.
                    ``(B) Limitation.--No amounts may be made available 
                to carry out this subsection unless specifically 
                provided by an appropriation Act.''.

SEC. 4304. APPLICABILITY OF BUY-AMERICAN REQUIREMENT TO PUERTO RICO.

    Section 12(n) of the Richard B. Russell National School Lunch Act 
(42 U.S.C. 1760(n)) is amended by adding at the end the following:
            ``(4) Applicability to puerto rico.--Paragraph (2)(A) shall 
        apply to a school food authority in the Commonwealth of Puerto 
        Rico with respect to domestic commodities or products that are 
        produced in the Commonwealth of Puerto Rico in sufficient 
        quantities to meet the needs of meals provided under the school 
        lunch program under this Act or the school breakfast program 
        under section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 
        1773).''.

[[Page 116 STAT. 332]]

SEC. 4305. FRUIT AND VEGETABLE PILOT PROGRAM.

    (a) In General.--Section 18 of the Richard B. Russell National 
School Lunch Act (42 U.S.C. 1769) is amended by adding at the end the 
following:
    ``(g) Fruit and Vegetable Pilot Program.--
            ``(1) In general.--In the school year beginning July 2002, 
        the Secretary shall carry out a pilot program to make available 
        to students in 25 elementary or secondary schools in each of 4 
        States, and in elementary or secondary schools on 1 Indian 
        reservation, free fresh and dried fruits and fresh vegetables 
        throughout the school day in 1 or more areas designated by the 
        school.
            ``(2) Publicity.--A school that participates in the pilot 
        program shall widely publicize within the school the 
        availability of free fruits and vegetables under the pilot 
        program.
            ``(3) Report.--Not <<NOTE: Deadline.>> later than May 1, 
        2003, the Secretary, acting through the Administrator of the 
        Economic Research Service, shall report to the Committee on 
        Education and the Workforce of the House of Representatives and 
        the Committee on Agriculture, Nutrition, and Forestry of the 
        Senate on the results of the pilot program.
            ``(4) Funding.--The Secretary shall use not more than 
        $6,000,000 of funds made available under section 32 of the Act 
        of August 24, 1935 (7 U.S.C. 612c), to carry out this subsection 
        (other than paragraph (3)).''.

    (b) Effective <<NOTE: 42 USC 1769 note.>> Date.--The amendment made 
by this section takes effect on the date of enactment of this Act.

SEC. 4306. ELIGIBILITY FOR ASSISTANCE UNDER THE SPECIAL SUPPLEMENTAL 
            NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN.

    (a) In General.--Section 17(d)(2)(B)(i) of the Child Nutrition Act 
of 1966 (42 U.S.C. 1786(d)(2)(B)(i)) is amended--
            (1) by striking ``basic allowance for housing'' and 
        inserting the following: ``basic allowance--
                    ``(I) for housing'';
            (2) by striking ``and'' at the end and inserting ``or''; and
            (3) by adding at the end the following:
                    ``(II) provided under section 403 of title 37, 
                United States Code, for housing that is acquired or 
                constructed under subchapter IV of chapter 169 of title 
                10, United States Code, or any related provision of law; 
                and''.

    (b) Effective <<NOTE: 42 USC 1786 note.>> Date.--The amendments made 
by this section take effect on the date of enactment of this Act.

SEC. 4307. WIC FARMERS' MARKET NUTRITION PROGRAM.

    (a) In General.--Section 17(m)(9) of the Child Nutrition Act of 1966 
(42 U.S.C. 1786(m)(9)) is amended--
            (1) by striking ``(9)(A) There'' and inserting the 
        following:
            ``(9) Funding.--
                    ``(A) In general.--
                          ``(i) Authorization of appropriations.--
                      There''; and
            (2) in subparagraph (A), by adding at the end the following:
                          ``(ii) Mandatory funding.--
                      Not <<NOTE: Deadline.>> later than 30 days after 
                      the date of enactment of the Food Stamp

[[Page 116 STAT. 333]]

                      Reauthorization Act of 2002, of the funds of the 
                      Commodity Credit Corporation, the Secretary shall 
                      make available to carry out this subsection 
                      $15,000,000, to remain available until 
                      expended.''.

    (b) Effective <<NOTE: 42 USC 1786 note.>> Date.--The amendments made 
by this section take effect on the date of enactment of this Act.

                        Subtitle D--Miscellaneous

SEC. 4401. PARTIAL RESTORATION OF BENEFITS TO LEGAL IMMIGRANTS.

    (a) Restoration of Benefits to Disabled Aliens.--Section 
402(a)(2)(F) of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2)(F)) is amended by 
striking ``(i) was'' and all that follows through ``(II) in the case'' 
and inserting the following:
                          ``(i) in the case of the specified Federal 
                      program described in paragraph (3)(A)--
                                    ``(I) was lawfully residing in the 
                                United States on August 22, 1996; and
                                    ``(II) is blind or disabled (as 
                                defined in paragraph (2) or (3) of 
                                section 1614(a) of the Social Security 
                                Act (42 U.S.C. 1382c(a))); and
                          ``(ii) in the case''.

    (b) Restoration of Benefits to All Qualified Alien Children.--
            (1) In general.--Section 402(a)(2)(J) of the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996 
        (8 U.S.C. 1612(a)(2)(J)) is amended by striking ``who'' and all 
        that follows through ``is under'' and inserting ``who is 
        under''.
            (2) Conforming amendments.--
                    (A) Section 403(c)(2) of the Personal Responsibility 
                and Work Opportunity Reconciliation Act of 1996 (8 
                U.S.C. 1613(c)(2)) is amended by adding at the end the 
                following:
                    ``(L) Assistance or benefits provided to individuals 
                under the age of 18 under the Food Stamp Act of 1977 (7 
                U.S.C. 2011 et seq.).''.
                    (B) Section 421(d) of the Personal Responsibility 
                and Work Opportunity Reconciliation Act of 1996 (8 
                U.S.C. 1631(d)) is amended by adding at the end the 
                following:
            ``(3) This <<NOTE: Applicability.>> section shall not apply 
        to assistance or benefits under the Food Stamp Act of 1977 (7 
        U.S.C. 2011 et seq.) to the extent that a qualified alien is 
        eligible under section 402(a)(2)(J).''.
                    (C) Section 5(i)(2)(E) of the Food Stamp Act of 1977 
                (7 U.S.C. 2014(i)(2)(E)) is amended by inserting before 
                the period at the end the following: ``, or to any alien 
                who is under 18 years of age''.
            (3) Effective <<NOTE: 7 USC 2014 note.>> date.--The 
        amendments made by this subsection take effect on October 1, 
        2003.

    (c) Food Stamp Exception for Certain Qualified Aliens.--
            (1) In general.--Section 402(a)(2) of the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996 
        (8 U.S.C. 1612(a)(2)) is amended by adding at the end the 
        following:

[[Page 116 STAT. 334]]

                    ``(L) Food stamp exception for certain qualified 
                aliens.--With respect to eligibility for benefits for 
                the specified Federal program described in paragraph 
                (3)(B), paragraph (1) shall not apply to any qualified 
                alien who has resided in the United States with a status 
                within the meaning of the term `qualified alien' for a 
                period of 5 years or more beginning on the date of the 
                alien's entry into the United States.''.
            (2) Effective <<NOTE: 8 USC 1612 note.>> date.--The 
        amendment made by paragraph (1) takes effect on April 1, 2003.

SEC. 4402. <<NOTE: 7 USC 3007.>> SENIORS FARMERS' MARKET NUTRITION 
            PROGRAM.

    (a) Establishment.--The Secretary of Agriculture shall use 
$5,000,000 for fiscal year 2002, and $15,000,000 for each of fiscal 
years 2003 through 2007, of the funds available to the Commodity Credit 
Corporation to carry out and expand a seniors farmers' market nutrition 
program.
    (b) Program Purposes.--The purposes of the seniors farmers' market 
nutrition program are--
            (1) to provide resources in the form of fresh, nutritious, 
        unprepared, locally grown fruits, vegetables, and herbs from 
        farmers' markets, roadside stands, and community supported 
        agriculture programs to low-income seniors;
            (2) to increase the domestic consumption of agricultural 
        commodities by expanding or aiding in the expansion of domestic 
        farmers' markets, roadside stands, and community supported 
        agriculture programs; and
            (3) to develop or aid in the development of new and 
        additional farmers' markets, roadside stands, and community 
        supported agriculture programs.

    (c) Regulations.--The Secretary may issue such regulations as the 
Secretary considers necessary to carry out the seniors farmers' market 
nutrition program.

SEC. 4403. <<NOTE: 7 USC 3171 note.>>  NUTRITION INFORMATION AND 
            AWARENESS PILOT PROGRAM.

    (a) Establishment.--The Secretary of Agriculture may establish, in 
not more than 5 States, for a period not to exceed 4 years for each 
participating State, a pilot program to increase the domestic 
consumption of fresh fruits and vegetables.
    (b) Purpose.--
            (1) In general.--Subject to paragraph (2), the purpose of 
        the program shall be to provide funds to States solely for the 
        purpose of assisting eligible public and private sector entities 
        with cost-share assistance to carry out demonstration projects--
                    (A) to increase fruit and vegetable consumption; and
                    (B) to convey related health promotion messages.
            (2) Limitation.--Funds made available to a State under the 
        program shall not be used to disparage any agricultural 
        commodity.

    (c) Selection of States.--
            (1) In general.--In selecting States to participate in the 
        program, the Secretary shall take into consideration, with 
        respect to projects and activities proposed to be carried out 
        under the program--
                    (A) experience in carrying out similar projects or 
                activities;

[[Page 116 STAT. 335]]

                    (B) innovative approaches; and
                    (C) the ability of the State to promote and track 
                increases in levels of fruit and vegetable consumption.
            (2) Enhancement of existing state programs.--The Secretary 
        may use the pilot program to enhance existing State programs 
        that are consistent with the purpose of the pilot program 
        specified in subsection (b).

    (d) Eligible Public and Private Sector Entities.--
            (1) In general.--A participating State shall establish 
        eligibility criteria under which the State may select public and 
        private sector entities to carry out demonstration projects 
        under the program.
            (2) Limitation.--No funds made available to States under the 
        program shall be provided by a State to any foreign for-profit 
        corporation.

    (e) Federal Share.--The Federal share of the cost of any project or 
activity carried out using funds provided under this section shall be 50 
percent.
    (f) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $10,000,000 for each of fiscal 
years 2002 through 2007.

SEC. 4404. <<NOTE: Congressional Hunger Fellows Act of 2002. 2 USC 
            1161.>>  HUNGER FELLOWSHIP PROGRAM.

    (a) Short Title; Findings.--
            (1) Short title.--This section may be cited as the 
        ``Congressional Hunger Fellows Act of 2002''.
            (2) Findings.--The Congress finds as follows:
                    (A) There is a critical need for compassionate 
                individuals who are committed to assisting people who 
                suffer from hunger as well as a need for such 
                individuals to initiate and administer solutions to the 
                hunger problem.
                    (B) Bill Emerson, the distinguished late 
                Representative from the 8th District of Missouri, 
                demonstrated his commitment to solving the problem of 
                hunger in a bipartisan manner, his commitment to public 
                service, and his great affection for the institution and 
                the ideals of the United States Congress.
                    (C) George T. (Mickey) Leland, the distinguished 
                late Representative from the 18th District of Texas, 
                demonstrated his compassion for those in need, his high 
                regard for public service, and his lively exercise of 
                political talents.
                    (D) The special concern that Mr. Emerson and Mr. 
                Leland demonstrated during their lives for the hungry 
                and poor was an inspiration for others to work toward 
                the goals of equality and justice for all.
                    (E) These two outstanding leaders maintained a 
                special bond of friendship regardless of political 
                affiliation and worked together to encourage future 
                leaders to recognize and provide service to others, and 
                therefore it is especially appropriate to honor the 
                memory of Mr. Emerson and Mr. Leland by creating a 
                fellowship program to develop and train the future 
                leaders of the United States to pursue careers in 
                humanitarian service.

    (b) Establishment.--There is established as an independent entity of 
the legislative branch of the United States Government the Congressional 
Hunger Fellows Program (hereinafter in this section referred to as the 
``Program'').

[[Page 116 STAT. 336]]

    (c) Board of Trustees.--
            (1) In general.--The Program shall be subject to the 
        supervision and direction of a Board of Trustees.
            (2) Members of the board of trustees.--
                    (A) Appointment.--The Board shall be composed of 6 
                voting members appointed under clause (i) and one 
                nonvoting ex officio member designated in clause (ii) as 
                follows:
                          (i) Voting members.--(I) The Speaker of the 
                      House of Representatives shall appoint two 
                      members.
                          (II) The minority leader of the House of 
                      Representatives shall appoint one member.
                          (III) The majority leader of the Senate shall 
                      appoint two members.
                          (IV) The minority leader of the Senate shall 
                      appoint one member.
                          (ii) Nonvoting member.--The Executive Director 
                      of the program shall serve as a nonvoting ex 
                      officio member of the Board.
                    (B) Terms.--Members of the Board shall serve a term 
                of 4 years.
                    (C) Vacancy.--
                          (i) Authority of board.--A vacancy in the 
                      membership of the Board does not affect the power 
                      of the remaining members to carry out this 
                      section.
                          (ii) Appointment of successors.--A vacancy in 
                      the membership of the Board shall be filled in the 
                      same manner in which the original appointment was 
                      made.
                          (iii) Incomplete term.--If a member of the 
                      Board does not serve the full term applicable to 
                      the member, the individual appointed to fill the 
                      resulting vacancy shall be appointed for the 
                      remainder of the term of the predecessor of the 
                      individual.
                    (D) Chairperson.--As the first order of business of 
                the first meeting of the Board, the members shall elect 
                a Chairperson.
                    (E) Compensation.--
                          (i) In general.--Subject to clause (ii), 
                      members of the Board may not receive compensation 
                      for service on the Board.
                          (ii) Travel.--Members of the Board may be 
                      reimbursed for travel, subsistence, and other 
                      necessary expenses incurred in carrying out the 
                      duties of the program.
            (3) Duties.--
                    (A) Bylaws.--
                          (i) Establishment.--The Board shall establish 
                      such bylaws and other regulations as may be 
                      appropriate to enable the Board to carry out this 
                      section, including the duties described in this 
                      paragraph.
                          (ii) Contents.--Such bylaws and other 
                      regulations shall include provisions--
                                    (I) for appropriate fiscal control, 
                                funds accountability, and operating 
                                principles;
                                    (II) to prevent any conflict of 
                                interest, or the appearance of any 
                                conflict of interest, in the procurement 
                                and employment actions taken by the

[[Page 116 STAT. 337]]

                                Board or by any officer or employee of 
                                the Board and in the selection and 
                                placement of individuals in the 
                                fellowships developed under the program;
                                    (III) for the resolution of a tie 
                                vote of the members of the Board; and
                                    (IV) for authorization of travel for 
                                members of the Board.
                          (iii) Transmittal to congress.--Not later than 
                      90 days after the date of the first meeting of the 
                      Board, the Chairperson of the Board shall transmit 
                      to the appropriate congressional committees a copy 
                      of such bylaws.
                    (B) Budget.--For each fiscal year the program is in 
                operation, the Board shall determine a budget for the 
                program for that fiscal year. All spending by the 
                program shall be pursuant to such budget unless a change 
                is approved by the Board.
                    (C) Process for selection and placement of 
                fellows.--The Board shall review and approve the process 
                established by the Executive Director for the selection 
                and placement of individuals in the fellowships 
                developed under the program.
                    (D) Allocation of funds to fellowships.--The Board 
                of Trustees shall determine the priority of the programs 
                to be carried out under this section and the amount of 
                funds to be allocated for the Emerson and Leland 
                fellowships.

    (d) Purposes; Authority of Program.--
            (1) Purposes.--The purposes of the program are--
                    (A) to encourage future leaders of the United States 
                to pursue careers in humanitarian service, to recognize 
                the needs of people who are hungry and poor, and to 
                provide assistance and compassion for those in need;
                    (B) to increase awareness of the importance of 
                public service; and
                    (C) to provide training and development 
                opportunities for such leaders through placement in 
                programs operated by appropriate organizations or 
                entities.
            (2) Authority.--The program is authorized to develop such 
        fellowships to carry out the purposes of this section, including 
        the fellowships described in paragraph (3).
            (3) Fellowships.--
                    (A) In general.--The program shall establish and 
                carry out the Bill Emerson Hunger Fellowship and the 
                Mickey Leland Hunger Fellowship.
                    (B) Curriculum.--
                          (i) In general.--The fellowships established 
                      under subparagraph (A) shall provide experience 
                      and training to develop the skills and 
                      understanding necessary to improve the 
                      humanitarian conditions and the lives of 
                      individuals who suffer from hunger, including--
                                    (I) training in direct service to 
                                the hungry in conjunction with 
                                community-based organizations through a 
                                program of field placement; and
                                    (II) experience in policy 
                                development through placement in a 
                                governmental entity or nonprofit 
                                organization.

[[Page 116 STAT. 338]]

                          (ii) Focus of bill emerson hunger 
                      fellowship.--The Bill Emerson Hunger Fellowship 
                      shall address hunger and other humanitarian needs 
                      in the United States.
                          (iii) Focus of mickey leland hunger 
                      fellowship.--The Mickey Leland Hunger Fellowship 
                      shall address international hunger and other 
                      humanitarian needs.
                          (iv) Workplan.--To carry out clause (i) and to 
                      assist in the evaluation of the fellowships under 
                      paragraph (4), the program shall, for each fellow, 
                      approve a work plan that identifies the target 
                      objectives for the fellow in the fellowship, 
                      including specific duties and responsibilities 
                      related to those objectives.
                    (C) Period of fellowship.--
                          (i) Emerson fellow.--A Bill Emerson Hunger 
                      Fellowship awarded under this paragraph shall be 
                      for no more than 1 year.
                          (ii) Leland fellow.--A Mickey Leland Hunger 
                      Fellowship awarded under this paragraph shall be 
                      for no more than 2 years. Not less than 1 year of 
                      the fellowship shall be dedicated to fulfilling 
                      the requirement of subparagraph (B)(i)(I).
                    (D) Selection of fellows.--
                          (i) In general.--A fellowship shall be awarded 
                      pursuant to a nationwide competition established 
                      by the program.
                          (ii) Qualification.--A successful applicant 
                      shall be an individual who has demonstrated--
                                    (I) an intent to pursue a career in 
                                humanitarian service and outstanding 
                                potential for such a career;
                                    (II) leadership potential or actual 
                                leadership experience;
                                    (III) diverse life experience;
                                    (IV) proficient writing and speaking 
                                skills;
                                    (V) an ability to live in poor or 
                                diverse communities; and
                                    (VI) such other attributes as 
                                determined to be appropriate by the 
                                Board.
                          (iii) Amount of award.--
                                    (I) In general.--Each individual 
                                awarded a fellowship under this 
                                paragraph shall receive a living 
                                allowance and, subject to subclause 
                                (II), an end-of-service award as 
                                determined by the program.
                                    (II) Requirement for successful 
                                completion of fellowship.--Each 
                                individual awarded a fellowship under 
                                this paragraph shall be entitled to 
                                receive an end-of-service award at an 
                                appropriate rate for each month of 
                                satisfactory service as determined by 
                                the Executive Director.
                          (iv) Recognition of fellowship award.--
                                    (I) Emerson fellow.--An individual 
                                awarded a fellowship from the Bill 
                                Emerson Hunger Fellowship shall be known 
                                as an ``Emerson Fellow''.

[[Page 116 STAT. 339]]

                                    (II) Leland fellow.--An individual 
                                awarded a fellowship from the Mickey 
                                Leland Hunger Fellowship shall be known 
                                as a ``Leland Fellow''.
            (4) Evaluation.--The program shall conduct periodic 
        evaluations of the Bill Emerson and Mickey Leland Hunger 
        Fellowships. Such evaluations shall include the following:
                    (A) An assessment of the successful completion of 
                the work plan of the fellow.
                    (B) An assessment of the impact of the fellowship on 
                the fellows.
                    (C) An assessment of the accomplishment of the 
                purposes of the program.
                    (D) An assessment of the impact of the fellow on the 
                community.

    (e) Trust Fund.--
            (1) Establishment.--There is established the Congressional 
        Hunger Fellows Trust Fund (hereinafter in this section referred 
        to as the ``Fund'') in the Treasury of the United States, 
        consisting of amounts appropriated to the Fund under subsection 
        (i), amounts credited to it under paragraph (3), and amounts 
        received under subsection (g)(3)(A).
            (2) Investment of funds.--The Secretary of the Treasury 
        shall invest the full amount of the Fund. Each investment shall 
        be made in an interest bearing obligation of the United States 
        or an obligation guaranteed as to principal and interest by the 
        United States that, as determined by the Secretary in 
        consultation with the Board, has a maturity suitable for the 
        Fund.
            (3) Return on investment.--Except as provided in subsection 
        (f)(2), the Secretary of the Treasury shall credit to the Fund 
        the interest on, and the proceeds from the sale or redemption 
        of, obligations held in the Fund.

    (f) Expenditures; Audits.--
            (1) In general.--The Secretary of the Treasury shall 
        transfer to the program from the amounts described in subsection 
        (e)(3) and subsection (g)(3)(A) such sums as the Board 
        determines are necessary to enable the program to carry out the 
        provisions of this section.
            (2) Limitation.--The Secretary may not transfer to the 
        program the amounts appropriated to the Fund under subsection 
        (i).
            (3) Use of funds.--Funds transferred to the program under 
        paragraph (1) shall be used for the following purposes:
                    (A) Stipends for fellows.--To provide for a living 
                allowance for the fellows.
                    (B) Travel of fellows.--To defray the costs of 
                transportation of the fellows to the fellowship 
                placement sites.
                    (C) Insurance.--To defray the costs of appropriate 
                insurance of the fellows, the program, and the Board.
                    (D) Training of fellows.--To defray the costs of 
                preservice and midservice education and training of 
                fellows.
                    (E) Support staff.--Staff described in subsection 
                (g).
                    (F) Awards.--End-of-service awards under subsection 
                (d)(3)(D)(iii)(II).

[[Page 116 STAT. 340]]

                    (G) Additional approved uses.--For such other 
                purposes that the Board determines appropriate to carry 
                out the program.
            (4) Audit by gao.--
                    (A) In general.--The Comptroller General of the 
                United States shall conduct an annual audit of the 
                accounts of the program.
                    (B) Books.--The program shall make available to the 
                Comptroller General all books, accounts, financial 
                records (including records of salaries of the Executive 
                Director and other personnel), reports, files, and all 
                other papers, things, or property belonging to or in use 
                by the program and necessary to facilitate such audit.
                    (C) Report to congress.--The Comptroller General 
                shall submit a copy of the results of each such audit to 
                the appropriate congressional committees.

    (g) Staff; Powers of Program.--
            (1) Executive director.--
                    (A) In general.--The Board shall appoint an 
                Executive Director of the program who shall administer 
                the program. The Executive Director shall carry out such 
                other functions consistent with the provisions of this 
                section as the Board shall prescribe.
                    (B) Restriction.--The Executive Director may not 
                serve as Chairperson of the Board.
                    (C) Compensation.--The Executive Director shall be 
                paid at a rate not to exceed the rate of basic pay 
                payable for level V of the Executive Schedule under 
                section 5316 of title 5, United States Code.
            (2) Staff.--
                    (A) In general.--With the approval of a majority of 
                the Board, the Executive Director may appoint and fix 
                the pay of additional personnel as the Executive 
                Director considers necessary and appropriate to carry 
                out the functions of the provisions of this section.
                    (B) Compensation.--An individual appointed under 
                subparagraph (A) shall be paid at a rate not to exceed 
                the rate of basic pay payable for level GS-15 of the 
                General Schedule.
            (3) Powers.--In order to carry out the provisions of this 
        section, the program may perform the following functions:
                    (A) Gifts.--The program may solicit, accept, use, 
                and dispose of gifts, bequests, or devises of services 
                or property, both real and personal, for the purpose of 
                aiding or facilitating the work of the program. Gifts, 
                bequests, or devises of money and proceeds from sales of 
                other property received as gifts, bequests, or devises 
                shall be deposited in the Fund and shall be available 
                for disbursement upon order of the Board.
                    (B) Experts and consultants.--The program may 
                procure temporary and intermittent services under 
                section 3109 of title 5, United States Code, but at 
                rates for individuals not to exceed the daily equivalent 
                of the maximum annual rate of basic pay payable for GS-
                15 of the General Schedule.
                    (C) Contract authority.--The program may contract, 
                with the approval of a majority of the members of the

[[Page 116 STAT. 341]]

                Board, with and compensate Government and private 
                agencies or persons without regard to section 3709 of 
                the Revised Statutes (41 U.S.C. 5).
                    (D) Other necessary expenditures.--The program shall 
                make such other expenditures which the program considers 
                necessary to carry out the provisions of this section, 
                but excluding project development.

    (h) Report.--Not <<NOTE: Deadline.>> later than December 31 of each 
year, the Board shall submit to the appropriate congressional committees 
a report on the activities of the program carried out during the 
previous fiscal year, and shall include the following:
            (1) An analysis of the evaluations conducted under 
        subsection (d)(4) (relating to evaluations of the Emerson and 
        Leland fellowships and accomplishment of the program purposes) 
        during that fiscal year.
            (2) A statement of the total amount of funds attributable to 
        gifts received by the program in that fiscal year (as authorized 
        under subsection (g)(3)(A)), and the total amount of such funds 
        that were expended to carry out the program that fiscal year.

    (i) Authorization of Appropriations.--There are authorized to be 
appropriated $18,000,000 to carry out the provisions of this section.
    (j) Definition.--In this section, the term ``appropriate 
congressional committees'' means--
            (1) the Committee on Agriculture and the Committee on 
        International Relations of the House of Representatives; and
            (2) the Committee on Agriculture, Nutrition, and Forestry 
        and the Committee on Foreign Relations of the Senate.

SEC. 4405. <<NOTE: 2 USC 1161 note.>>  GENERAL EFFECTIVE DATE.

    Except as otherwise provided in this title, the amendments made by 
this title take effect on October 1, 2002.

                             TITLE V--CREDIT

                    Subtitle A--Farm Ownership Loans

SEC. 5001. DIRECT LOANS.

    Section 302(b)(1) of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 1922(b)(1)) is amended by striking ``operated'' and inserting 
``participated in the business operations of''.

SEC. 5002. FINANCING OF BRIDGE LOANS.

    Section 303(a)(1) of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 1923(a)(1)) is amended--
            (1) in subparagraph (C), by striking ``or'' at the end;
            (2) in subparagraph (D), by striking the period at the end 
        and inserting ``; or''; and
            (3) by adding at the end the following:
                    ``(E) refinancing a temporary bridge loan made by a 
                commercial or cooperative lender to a farmer or rancher 
                for the acquisition of land for a farm or ranch, if--
                          ``(i) the Secretary approved an application 
                      for a direct farm ownership loan to the farmer or 
                      rancher for acquisition of the land; and

[[Page 116 STAT. 342]]

                          ``(ii) funds for direct farm ownership loans 
                      under section 346(b) were not available at the 
                      time at which the application was approved.''.

SEC. 5003. AMOUNT OF GUARANTEE OF LOANS FOR FARM OPERATIONS ON TRIBAL 
            LANDS.

    Section 309(h) of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1929(h)) is amended--
            (1) in paragraph (4), by striking ``paragraphs (5) and (6)'' 
        and inserting ``paragraphs (5), (6), and (7)''; and
            (2) by adding at the end the following:
            ``(7) Amount of guarantee of loans for farm operations on 
        tribal lands.--In the case of an operating loan made to a farmer 
        or rancher whose farm or ranch land is subject to the 
        jurisdiction of an Indian tribe and whose loan is secured by 1 
        or more security instruments that are subject to the 
        jurisdiction of an Indian tribe, the Secretary shall guarantee 
        95 percent of the loan.''.

SEC. 5004. GUARANTEE OF LOANS MADE UNDER STATE BEGINNING FARMER OR 
            RANCHER PROGRAMS.

    Section 309 of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1929) is amended by adding at the end the following:
    ``(j) Guarantee of Loans Made Under State Beginning Farmer or 
Rancher Programs.--The Secretary may guarantee under this title a loan 
made under a State beginning farmer or rancher program, including a loan 
financed by the net proceeds of a qualified small issue agricultural 
bond for land or property described in section 144(a)(12)(B)(ii) of the 
Internal Revenue Code of 1986.''.

SEC. 5005. DOWN PAYMENT LOAN PROGRAM.

    Section 310E of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1935) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1), by striking ``30 percent'' and 
                inserting ``40 percent''; and
                    (B) in paragraph (3), by striking ``10 years'' and 
                inserting ``15 years''; and
            (2) in subsection (c)(3)(B), by striking ``10-year'' and 
        inserting ``15-year''.

SEC. 5006. BEGINNING FARMER AND RANCHER CONTRACT LAND SALES PROGRAM.

    Subtitle A of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1922 et seq.) is amended by adding at the end the following:

``SEC. 310F. <<NOTE: 7 USC 1936.>>  BEGINNING FARMER AND RANCHER 
            CONTRACT LAND SALES PROGRAM.

    ``(a) In General.--If the Secretary makes a determination that the 
risk is comparable under subsection (b), the Secretary shall carry out a 
pilot program in not fewer than 5 States, as determined by the 
Secretary, to guarantee up to 5 loans per State in each of fiscal years 
2003 through 2007 made by a private seller of a farm or ranch to a 
qualified beginning farmer or rancher on a contract land sale basis, if 
the loan meets applicable underwriting

[[Page 116 STAT. 343]]

criteria and a commercial lending institution agrees to serve as escrow 
agent.
    ``(b) Date of <<NOTE: Deadline.>> Commencement of Program.--Not 
later than October 1, 2002, the Secretary shall make a determination on 
whether guarantees of contract land sales present a risk that is 
comparable with the risk presented in the case of guarantees to 
commercial lenders.''.

                       Subtitle B--Operating Loans

SEC. 5101. DIRECT LOANS.

    Section 311(c) of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1941(c)) is amended--
            (1) in paragraph (1)--
                    (A) in the matter that precedes subparagraph (A), by 
                striking ``paragraph (3)'' and inserting ``paragraphs 
                (3) and (4)''; and
                    (B) in subparagraph (A), by striking ``who has not'' 
                and all that follows through ``5 years''; and
            (2) by adding at the end the following:
            ``(4) Waivers.--
                    ``(A) Farm and ranch operations on tribal lands.--
                The Secretary shall waive the limitation under paragraph 
                (1)(C) or (3) for a direct loan made under this subtitle 
                to a farmer or rancher whose farm or ranch land is 
                subject to the jurisdiction of an Indian tribe and whose 
                loan is secured by 1 or more security instruments that 
                are subject to the jurisdiction of an Indian tribe if 
                the Secretary determines that commercial credit is not 
                generally available for such farm or ranch operations.
                    ``(B) Other farm and ranch operations.--On a case-
                by-case determination not subject to administrative 
                appeal, the Secretary may grant a borrower a waiver, 1 
                time only for a period of 2 years, of the limitation 
                under paragraph (1)(C) or (3) for a direct operating 
                loan if the borrower demonstrates to the satisfaction of 
                the Secretary that--
                          ``(i) the borrower has a viable farm or ranch 
                      operation;
                          ``(ii) the borrower applied for commercial 
                      credit from at least 2 commercial lenders;
                          ``(iii) the borrower was unable to obtain a 
                      commercial loan (including a loan guaranteed by 
                      the Secretary); and
                          ``(iv) the borrower successfully has 
                      completed, or will complete within 1 year, 
                      borrower training under section 359 (from which 
                      requirement the Secretary shall not grant a waiver 
                      under section 359(f)).''.

SEC. 5102. <<NOTE: 7 USC 1949 note.>>  SUSPENSION OF LIMITATION ON 
            PERIOD FOR WHICH BORROWERS ARE ELIGIBLE FOR GUARANTEED 
            ASSISTANCE.

    During the period <<NOTE: Effective date. Termination 
date.>> beginning January 1, 2002, and ending December 31, 2006, section 
319(b) of the Consolidated Farm and Rural Development Act (7 U.S.C. 
1949(b)) shall have no force or effect.

[[Page 116 STAT. 344]]

                       Subtitle C--Emergency Loans

SEC. 5201. EMERGENCY LOANS IN RESPONSE TO AN EMERGENCY RESULTING FROM 
            QUARANTINES.

    (a) Loan Authority.--Section 321(a) of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 1961(a)) is amended--
            (1) in each of the 1st and 3rd sentences, by striking ``a 
        natural disaster in the United States or by'' and inserting ``a 
        quarantine imposed by the Secretary under the Plant Protection 
        Act or the animal quarantine laws (as defined in section 2509 of 
        the Food, Agriculture, Conservation, and Trade Act of 1990), a 
        natural disaster in the United States, or''; and
            (2) in the 4th sentence--
                    (A) by striking ``a natural disaster'' and inserting 
                ``such a quarantine or natural disaster''; and
                    (B) by striking ``by such natural disaster'' and 
                inserting ``by such quarantine or natural disaster''.

    (b) Conforming Amendment.--Section 323 of such Act (7 U.S.C. 1963) 
is amended by inserting ``quarantine,'' before ``natural disaster''.

                  Subtitle D--Administrative Provisions

SEC. 5301. <<NOTE: 7 USC 1922 note.>>  EVALUATIONS OF DIRECT AND 
            GUARANTEED LOAN PROGRAMS.

    (a) Studies.--The Secretary of Agriculture shall conduct 2 studies 
of the direct and guaranteed loan progams under sections 302 and 311 of 
the Consolidated Farm and Rural Development Act, each of which shall 
include an examination of the number, average principal amount, and 
delinquency and default rates of loans provided or guaranteed during the 
period covered by the study.
    (b) Periods Covered.--
            (1) First study.--One study under subsection (a) shall cover 
        the 1-year period that begins 1 year after the date of the 
        enactment of this section.
            (2) Second study.--One study under subsection (a) shall 
        cover the 1-year period that begins 3 years after such date of 
        enactment.

    (c) Reports to the Congress.--At the end of the period covered by 
each study under this section, the Secretary of Agriculture shall submit 
to the Congress a report that contains an evaluation of the results of 
the study, including an analysis of the effectiveness of loan programs 
referred to in subsection (a) in meeting the credit needs of 
agricultural producers in an efficient and fiscally responsible manner.

SEC. 5302. ELIGIBILITY OF TRUSTS AND LIMITED LIABILITY COMPANIES FOR 
            FARM OWNERSHIP LOANS, FARM OPERATING LOANS, AND EMERGENCY 
            LOANS.

    (a) In General.--Sections 302(a), 311(a), and 321(a) of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 1922(a), 1941(a), 
and 1961(a)) are each amended by striking ``and joint operations'' each 
place it appears and inserting ``joint operations, trusts, and limited 
liability companies''.

[[Page 116 STAT. 345]]

    (b) Conforming Amendment.--Section 321(a) of the Consolidated Farm 
and Rural Development Act (7 U.S.C. 1961(a)) is amended by striking ``or 
joint operations'' each place it appears and inserting ``joint 
operations, trusts, or limited liability companies''.

SEC. 5303. DEBT SETTLEMENT.

    Section 331(b)(4) of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 1981(b)(4)) is amended--
            (1) by striking ``The Secretary may release'' and inserting 
        ``After consultation with a local or area county committee, the 
        Secretary may release''; and
            (2) by striking ``carried out--'' and all that follows 
        through ``(B) after'' and inserting ``carried out after''.

SEC. 5304. TEMPORARY AUTHORITY TO ENTER INTO CONTRACTS; PRIVATE 
            COLLECTION AGENCIES.

    (a) In General.--Section 331 of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1981) is amended by striking subsections (d) 
and (e).
    (b) Application.--The <<NOTE: 7 USC 1981 note.>> amendment made by 
subsection (a) shall not apply to a contract entered into before the 
effective date of this Act.

SEC. 5305. INTEREST RATE OPTIONS FOR LOANS IN SERVICING.

    Section 331B of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1981b) is amended--
            (1) by striking ``lower of (1) the'' and inserting the 
        following: ``lowest of--
            ``(1) the''; and
            (2) by striking ``original loan or (2) the'' and inserting 
        the following: ``original loan;
            ``(2) the rate being charged by the Secretary for loans, 
        other than guaranteed loans, of the same type at the time at 
        which the borrower applies for a deferral, consolidation, 
        rescheduling, or reamortization; or
            ``(3) the''.

SEC. 5306. ELIMINATION OF REQUIREMENT THAT SECRETARY REQUIRE COUNTY 
            COMMITTEES TO CERTIFY IN WRITING THAT CERTAIN LOAN REVIEWS 
            HAVE BEEN CONDUCTED.

    Section 333(2) of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1983(2)) is amended to read as follows:
            ``(2) except with respect to a loan under section 306, 310B, 
        or 314--
                    ``(A) an annual review of the credit history and 
                business operation of the borrower; and
                    ``(B) an annual review of the continued eligibility 
                of the borrower for the loan;''.

SEC. 5307. SIMPLIFIED LOAN GUARANTEE APPLICATION AVAILABLE FOR LOANS OF 
            GREATER AMOUNTS.

    Section 333A(g)(1) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1983a(g)(1)) is amended by striking ``$50,000'' and 
inserting ``$125,000''.

SEC. 5308. INVENTORY PROPERTY.

    Section 335(c) of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1985(c)) is amended--

[[Page 116 STAT. 346]]

            (1) in paragraph (1)--
                    (A) in subparagraph (B)--
                          (i) in clause (i), by striking ``75 days'' and 
                      inserting ``135 days''; and
                          (ii) by adding at the end the following:
                          ``(iv) Combining and dividing of property.--To 
                      the maximum extent practicable, the Secretary 
                      shall maximize the opportunity for beginning 
                      farmers and ranchers to purchase real property 
                      acquired by the Secretary under this title by 
                      combining or dividing inventory parcels of the 
                      property in such manner as the Secretary 
                      determines to be appropriate.''; and
                    (B) in subparagraph (C)--
                          (i) by striking ``75 days'' and inserting 
                      ``135 days''; and
                          (ii) by striking ``75-day period'' and 
                      inserting ``135-day period''; and
            (2) by striking paragraph (2) and inserting the following:
            ``(2) Previous <<NOTE: Deadline.>> lease.--In the case of 
        real property acquired before April 4, 1996, that the Secretary 
        leased before April 4, 1996, not later than 60 days after the 
        lease expires, the Secretary shall offer to sell the property in 
        accordance with paragraph (1).''.

SEC. 5309. ADMINISTRATION OF CERTIFIED LENDERS AND PREFERRED CERTIFIED 
            LENDERS PROGRAMS.

    Section 339 of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1989) is amended by adding at the end the following:
    ``(e) Administration of Certified Lenders and Preferred Certified 
Lenders Programs.--The Secretary may administer the loan guarantee 
programs under subsections (c) and (d) through central offices 
established in States or in multi-State areas.''.

SEC. 5310. DEFINITIONS.

    (a) Qualified Beginning Farmer or Rancher.--Section 343(a)(11)(F) of 
the Consolidated Farm and Rural Development Act (7 U.S.C. 
1991(a)(11)(F)) is amended by striking ``25 percent'' and inserting ``30 
percent''.
    (b) Debt Forgiveness.--Section 343(a)(12)(B) of the Consolidated 
Farm and Rural Development Act (7 U.S.C. 1991(a)(12)(B)) is amended to 
read as follows:
                    ``(B) Exceptions.--The term `debt forgiveness' does 
                not include--
                          ``(i) consolidation, rescheduling, 
                      reamortization, or deferral of a loan; or
                          ``(ii) any write-down provided as part of a 
                      resolution of a discrimination complaint against 
                      the Secretary.''.

SEC. 5311. LOAN AUTHORIZATION LEVELS.

    Section 346(b)(1) of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 1994(b)(1)) is amended to read as follows:
            ``(1) In general.--The Secretary may make or guarantee loans 
        under subtitles A and B from the Agricultural Credit Insurance 
        Fund provided for in section 309 for not more than 
        $3,796,000,000 for each of fiscal years 2003 through 2007, of 
        which, for each fiscal year--
                    ``(A) $770,000,000 shall be for direct loans, of 
                which--

[[Page 116 STAT. 347]]

                          ``(i) $205,000,000 shall be for farm ownership 
                      loans under subtitle A; and
                          ``(ii) $565,000,000 shall be for operating 
                      loans under subtitle B; and
                    ``(B) $3,026,000,000 shall be for guaranteed loans, 
                of which--
                          ``(i) $1,000,000,000 shall be for guarantees 
                      of farm ownership loans under subtitle A; and
                          ``(ii) $2,026,000,000 shall be for guarantees 
                      of operating loans under subtitle B.''.

SEC. 5312. RESERVATION OF FUNDS FOR DIRECT OPERATING LOANS FOR BEGINNING 
            FARMERS AND RANCHERS.

    Section 346(b)(2)(A)(ii)(III) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1994(b)(2)(A)(ii)(III)) is amended by striking 
``2000 through 2002'' and inserting ``2003 through 2007''.

SEC. 5313. INTEREST RATE REDUCTION PROGRAM.

    Section 351 of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1999) is amended--
            (1) in subsection (a)--
                    (A) by striking ``Program.--'' and all that follows 
                through ``The Secretary'' and inserting ``Program.--The 
                Secretary''; and
                    (B) by striking paragraph (2); and
            (2) in subsection (e), by striking paragraph (2) and 
        inserting the following:
            ``(2) Maximum amount of funds.--
                    ``(A) In general.--The total amount of funds used by 
                the Secretary to carry out this section for a fiscal 
                year shall not exceed $750,000,000.
                    ``(B) Beginning farmers and ranchers.--
                          ``(i) In general.--The Secretary shall reserve 
                      not less than 15 percent of the funds used by the 
                      Secretary under subparagraph (A) to make payments 
                      for guaranteed loans made to beginning farmers and 
                      ranchers.
                          ``(ii) Duration of reservation of funds.--
                      Funds reserved for beginning farmers or ranchers 
                      under clause (i) for a fiscal year shall be 
                      reserved only until March 1 of the fiscal year.''.

SEC. 5314. REAMORTIZATION OF RECAPTURE PAYMENTS.

    Section 353(e)(7) of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 2001(e)(7)) is amended by adding at the end the following:
                    ``(D) Reamortization.--
                          ``(i) In general.--The Secretary may modify 
                      the amortization of a recapture payment referred 
                      to in subparagraph (A) of this paragraph on which 
                      a payment has become delinquent by using loan 
                      service tools under section 343(b)(3) if--
                                    ``(I) the default is due to 
                                circumstances beyond the control of the 
                                borrower; and
                                    ``(II) the borrower acted in good 
                                faith (as determined by the Secretary) 
                                in attempting to repay the recapture 
                                amount.
                          ``(ii) Limitations.--

[[Page 116 STAT. 348]]

                                    ``(I) Term of reamortization.--The 
                                term of a reamortization under this 
                                subparagraph may not exceed 25 years 
                                from the date of the original 
                                amortization agreement.
                                    ``(II) No reduction or principal or 
                                unpaid interest due.--A reamortization 
                                of a recapture payment under this 
                                subparagraph may not provide for 
                                reducing the outstanding principal or 
                                unpaid interest due on the recapture 
                                payment.

SEC. 5315. ALLOCATION OF CERTAIN FUNDS FOR SOCIALLY DISADVANTAGED 
            FARMERS AND RANCHERS.

    The last sentence of section 355(c)(2) of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 2003(c)(2)) is amended to read as 
follows: ``Any funds reserved and allocated under this paragraph but not 
used within a State shall, to the extent necessary to satisfy pending 
applications under this title, be available for use by socially 
disadvantaged farmers and ranchers in other States, as determined by the 
Secretary, and any remaining funds shall be reallocated within the 
State.''.

SEC. 5316. WAIVER OF BORROWER TRAINING CERTIFICATION REQUIREMENT.

    Section 359 of the Consolidated Farm and Rural Development Act (7 
U.S.C. 2006a) is amended by striking subsection (f) and inserting the 
following:
    ``(f) Waivers.--
            ``(1) In general.--The Secretary may waive the requirements 
        of this section for an individual borrower if the Secretary 
        determines that the borrower demonstrates adequate knowledge in 
        areas described in this section.
            ``(2) Criteria.--The Secretary shall establish criteria 
        providing for the application of paragraph (1) consistently in 
        all counties nationwide.''.

SEC. 5317. TIMING OF LOAN ASSESSMENTS.

    Section 360(a) of the Consolidated Farm and Rural Development Act (7 
U.S.C. 2006b(a)) is amended by striking ``After an applicant is 
determined eligible for assistance under this title by the appropriate 
county committee established pursuant to section 332, the'' and 
inserting ``The''.

SEC. 5318. ANNUAL REVIEW OF BORROWERS.

    Section 360(d)(1) of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 2006b(d)(1)) is amended by striking ``biannual'' and inserting 
``annual''.

SEC. 5319. LOAN ELIGIBILITY FOR BORROWERS WITH PRIOR DEBT FORGIVENESS.

    Section 373(b)(2)(A) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 2008h(b)(2)(A)) is amended--
            (1) in clause (i), by striking ``or'';
            (2) in clause (ii), by striking the period and inserting ``; 
        or''; and
            (3) by adding at the end the following:
                          ``(iii) received debt forgiveness on not more 
                      than 1 occasion resulting directly and primarily 
                      from a

[[Page 116 STAT. 349]]

                      major disaster or emergency designated by the 
                      President on or after April 4, 1996, under the 
                      Robert T. Stafford Disaster Relief and Emergency 
                      Assistance Act (42 U.S.C. 5121 et seq.).''.

SEC. 5320. MAKING AND SERVICING OF LOANS BY PERSONNEL OF STATE, COUNTY, 
            OR AREA COMMITTEES.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1981-2008j) is amended by adding at the end the following:

``SEC. 376. <<NOTE: 7 USC 2008k.>>  MAKING AND SERVICING OF LOANS BY 
            PERSONNEL OF STATE, COUNTY, OR AREA COMMITTEES.

    ``The Secretary shall use personnel of a State, county or area 
committee established under section 8(b)(5) of the Soil Conservation and 
Domestic Allotment Act (16 U.S.C 590h(b)(5)) to make and service loans 
under this title to the extent the personnel have been trained to do 
so.''.

SEC. 5321. ELIGIBILITY OF EMPLOYEES OF STATE, COUNTY, OR AREA COMMITTEE 
            FOR LOANS AND LOAN GUARANTEES.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1981-2008j) is further amended by adding at the end the 
following:

``SEC. 377. <<NOTE: 7 USC 2008l.>> ELIGIBILITY OF EMPLOYEES OF STATE, 
            COUNTY, OR AREA COMMITTEE FOR LOANS AND LOAN GUARANTEES.

    ``(a) In General.--The Secretary shall not prohibit an employee of a 
State, county or area committee established under section 8(b)(5) of the 
Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)(5)) or 
an employee of the Department of Agriculture from obtaining a loan or 
loan guarantee under subtitle A, B or C of this title.
    ``(b) Approvals.--
            ``(1) County or area office.--In the case of a loan 
        application from an employee in a county or area office, the 
        Farm Service Agency State office shall be responsible for 
        reviewing and approving the application.
            ``(2) State office.--In the case of a loan application from 
        an employee of a State office, the Farm Service Agency national 
        office shall be responsible for reviewing and approving the 
        application.''.

                         Subtitle E--Farm Credit

SEC. 5401. REPEAL OF BURDENSOME APPROVAL REQUIREMENTS.

    (a) Banks for Cooperatives.--Section 3.1(11)(B) of the Farm Credit 
Act of 1971 (12 U.S.C. 2122(11)(B)) is amended--
            (1) by striking clause (iii); and
            (2) by redesignating clause (iv) as clause (iii).

    (b) Other System Banks; Associations.--Section 4.18A of the Farm 
Credit Act of 1971 (12 U.S.C. 2206a) is amended--
            (1) in subsection (a)(1), by striking ``3.1(11)(B)(iv)'' and 
        inserting ``3.1(11)(B)(iii)''; and
            (2) by striking subsection (c).

[[Page 116 STAT. 350]]

SEC. 5402. BANKS FOR COOPERATIVES.

    Section 3.7(b) of the Farm Credit Act of 1971 (12 U.S.C. 2128(b)) is 
amended--
            (1) in paragraphs (1) and (2)(A)(i), by striking ``farm 
        supplies'' each place it appears and inserting ``agricultural 
        supplies''; and
            (2) by adding at the end the following:
            ``(4) Definition of agricultural supply.--In this 
        subsection, the term `agricultural supply' includes--
                    ``(A) a farm supply; and
                    ``(B)(i) agriculture-related processing equipment;
                    ``(ii) agriculture-related machinery; and
                    ``(iii) other capital goods related to the storage 
                or handling of agricultural commodities or products.''.

SEC. 5403. INSURANCE CORPORATION PREMIUMS.

    (a) Reduction in Premiums for GSE-Guaranteed Loans.--
            (1) In general.--Section 5.55 of the Farm Credit Act of 1971 
        (12 U.S.C. 2277a-4) is amended--
                    (A) in subsection (a)--
                          (i) in paragraph (1)--
                                    (I) in subparagraph (A), by striking 
                                ``government-guaranteed loans provided 
                                for in subparagraph (C)'' and inserting 
                                ``loans provided for in subparagraphs 
                                (C) and (D)'';
                                    (II) in subparagraph (B), by 
                                striking ``and'' at the end;
                                    (III) in subparagraph (C), by 
                                striking the period at the end and 
                                inserting ``; and''; and
                                    (IV) by adding at the end the 
                                following:
                    ``(D) the annual average principal outstanding for 
                such year on the guaranteed portions of Government 
                Sponsored Enterprise-guaranteed loans made by the bank 
                that are in accrual status, multiplied by a factor, not 
                to exceed 0.0015, determined by the Corporation at the 
                sole discretion of the Corporation.''; and
                          (ii) by adding at the end the following:
            ``(4) Definition of government sponsored enterprise-
        guaranteed loan.--In this section and sections 1.12(b) and 
        5.56(a), the term `Government Sponsored Enterprise-guaranteed 
        loan' means a loan or credit, or portion of a loan or credit, 
        that is guaranteed by an entity that is chartered by Congress to 
        serve a public purpose and the debt obligations of which are not 
        explicitly guaranteed by the United States, including the 
        Federal National Mortgage Association, the Federal Home Loan 
        Mortgage Corporation, the Federal Home Loan Bank System, and the 
        Federal Agricultural Mortgage Corporation, but not including any 
        other institution of the Farm Credit System.''; and
                    (B) in subsection (e)(4)(B), by striking 
                ``government-guaranteed loans described in subsection 
                (a)(1)(C)'' and inserting ``loans described in 
                subparagraph (C) or (D) of subsection (a)(1)''.
            (2) Conforming amendments.--
                    (A) Section 1.12(b) of the Farm Credit Act of 1971 
                (12 U.S.C. 2020(b)) is amended--

[[Page 116 STAT. 351]]

                          (i) in paragraph (1), by inserting ``and 
                      Government Sponsored Enterprise-guaranteed loans 
                      (as defined in section 5.55(a)(4)) provided for in 
                      paragraph (4)'' after ``government-guaranteed 
                      loans (as defined in section 5.55(a)(3)) provided 
                      for in paragraph (3)'';
                          (ii) in paragraph (2), by striking ``and'' at 
                      the end;
                          (iii) in paragraph (3), by striking the period 
                      at the end and inserting ``; and''; and
                          (iv) by adding at the end the following:
            ``(4) the annual average principal outstanding for such year 
        on the guaranteed portions of Government Sponsored Enterprise-
        guaranteed loans (as so defined) made by the association, or by 
        the other financing institution and funded by or discounted with 
        the Farm Credit Bank, that are in accrual status, multiplied by 
        a factor, not to exceed 0.0015, determined by the Corporation 
        for the purpose of setting the premium for such guaranteed 
        portions of loans under section 5.55(a)(1)(D).''.
                    (B) Section 5.56(a) of the Farm Credit Act of 1971 
                (12 U.S.C. 2277a-5(a)) is amended--
                          (i) in paragraph (1), by inserting ``and 
                      Government Sponsored Enterprise-guaranteed loans 
                      (as defined in section 5.55(a)(4))'' after 
                      ``government-guaranteed loans'';
                          (ii) by redesignating paragraphs (4) and (5) 
                      as paragraphs (5) and (6), respectively; and
                          (iii) by inserting after paragraph (3) the 
                      following:
            ``(4) the annual average principal outstanding on the 
        guaranteed portions of Government Sponsored Enterprise-
        guaranteed loans (as defined in section 5.55(a)(4)) that are in 
        accrual status;''.

    (b) Applicability.--The <<NOTE: 12 USC 2020 note.>> amendments made 
by this section shall apply with respect to determinations of premiums 
for calendar year 2002 and for any succeeding calendar year, and to 
certified statements with respect to such premiums.

                     Subtitle F--General Provisions

SEC. 5501. TECHNICAL AMENDMENTS.

    (a) Section 321(a) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1961(a)) is amended by striking ``Disaster Relief and 
Emergency Assistance Act'' each place it appears and inserting ``Robert 
T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 
et seq.)''.
    (b) Section 336(b) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1986(b)) is amended in the second sentence by striking 
``provided for in section 332 of this title''.
    (c) Section 359(c)(1) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 2006a(c)(1)) is amended by striking ``established pursuant 
to section 332,''.

[[Page 116 STAT. 352]]

                       TITLE VI--RURAL DEVELOPMENT

         Subtitle A--Consolidated Farm and Rural Development Act

SEC. 6001. ELIGIBILITY OF RURAL EMPOWERMENT ZONES AND RURAL ENTERPRISE 
            COMMUNITIES FOR DIRECT AND GUARANTEED LOANS FOR ESSENTIAL 
            COMMUNITY FACILITIES.

    Section 306(a)(1) of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 1926(a)(1)) is amended by inserting after the first sentence 
the following: ``The Secretary may also make or insure loans to 
communities that have been designated as rural empowerment zones or 
rural enterprise communities pursuant to part I of subchapter U of 
chapter 1 of the Internal Revenue Code of 1986, or as rural enterprise 
communities pursuant to section 766 of the Agriculture, Rural 
Development, Food and Drug Administration, and Related Agencies 
Appropriations Act, 1999 (Public Law 105-277; 112 Stat. 2681, 2681-37), 
to provide for the installation or improvement of essential community 
facilities including necessary related equipment, and to furnish 
financial assistance or other aid in planning projects for such 
purposes.''.

SEC. 6002. WATER OR WASTE DISPOSAL GRANTS.

    Section 306(a)(2) of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 1926(a)(2)) is amended--
            (1) by striking ``(2) The'' and inserting the following:
            ``(2) Water, waste disposal, and wastewater facility 
        grants.--
                    ``(A) Authority.--
                          ``(i) In general.--The'';
            (2) by striking ``aggregating not to exceed $590,000,000 in 
        any fiscal year'';
            (3) by striking ``The amount'' and inserting the following:
                          ``(ii) Amount.--The amount'';
            (4) by striking ``paragraph'' and inserting 
        ``subparagraph'';
            (5) by striking ``The Secretary shall'' and inserting the 
        following:
                          ``(iii) Grant rate.--The Secretary shall''; 
                      and
            (6) by adding at the end the following:
                    ``(B) Revolving funds for financing water and 
                wastewater projects.--
                          ``(i) In general.--The Secretary may make 
                      grants to qualified private, nonprofit entities to 
                      capitalize revolving funds for the purpose of 
                      providing financing to eligible entities for--
                                    ``(I) predevelopment costs 
                                associated with proposed water and 
                                wastewater projects or with existing 
                                water and wastewater systems; and
                                    ``(II) short-term costs incurred for 
                                replacement equipment, small-scale 
                                extension services, or other small 
                                capital projects that are not part of 
                                the regular operations and maintenance 
                                activities of existing water and 
                                wastewater systems.
                          ``(ii) Eligible entities.--To be eligible to 
                      obtain financing from a revolving fund under 
                      clause (i), an

[[Page 116 STAT. 353]]

                      eligible entity must be eligible to obtain a loan, 
                      loan guarantee, or grant under paragraph (1) or 
                      this paragraph.
                          ``(iii) Maximum amount of financing.--The 
                      amount of financing made to an eligible entity 
                      under this subparagraph shall not exceed--
                                    ``(I) $100,000 for costs described 
                                in clause (i)(I); and
                                    ``(II) $100,000 for costs described 
                                in clause (i)(II).
                          ``(iv) Term.--The term of financing provided 
                      to an eligible entity under this subparagraph 
                      shall not exceed 10 years.
                          ``(v) Administration.--The Secretary shall 
                      limit the amount of grant funds that may be used 
                      by a grant recipient for administrative costs 
                      incurred under this subparagraph.
                          ``(vi) Annual report.--A nonprofit entity 
                      receiving a grant under this subparagraph shall 
                      submit to the Secretary an annual report that 
                      describes the number and size of communities 
                      served and the type of financing provided.
                          ``(vii) Authorization of appropriations.--
                      There are authorized to be appropriated to carry 
                      out this subparagraph $30,000,000 for each of 
                      fiscal years 2002 through 2007.''.

SEC. 6003. RURAL BUSINESS OPPORTUNITY GRANTS.

    Section 306(a)(11)(D) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1926(a)(11)(D)) is amended--
            (1) by striking ``$7,500,000'' and inserting 
        ``$15,000,000''; and
            (2) by striking ``2002'' and inserting ``2007''.

SEC. 6004. CHILD DAY CARE FACILITIES.

    Section 306(a)(19) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1926(a)(19)) is amended by adding at the end the 
following:
                    ``(C) Reservation of funds for child day care 
                facilities.--
                          ``(i) In general.--For each fiscal year, not 
                      less than 10 percent of the funds made available 
                      to carry out this paragraph shall be reserved for 
                      grants to pay the Federal share of the cost of 
                      developing and constructing day care facilities 
                      for children in rural areas.
                          ``(ii) Release.--Funds reserved under clause 
                      (i) for a fiscal year shall be reserved only until 
                      April 1 of the fiscal year.''.

SEC. 6005. RURAL WATER AND WASTEWATER CIRCUIT RIDER PROGRAM.

    Section 306(a) of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1926(a)) is amended by adding at the end the following:
            ``(22) Rural water and wastewater circuit rider program.--

[[Page 116 STAT. 354]]

                    ``(A) In general.--The Secretary shall establish a 
                national rural water and wastewater circuit rider 
                program that is based on the rural water circuit rider 
                program of the National Rural Water Association that (as 
                of the date of enactment of this paragraph) receives 
                funding from the Secretary, acting through the Rural 
                Utilities Service.
                    ``(B) Relationship to existing program.--The program 
                established under subparagraph (A) shall not affect the 
                authority of the Secretary to carry out the circuit 
                rider program for which funds are made available under 
                the heading ``rural community advancement program'' in 
                title III of the Agriculture, Rural Development, Food 
                and Drug Administration, and Related Agencies 
                Appropriations Act, 2002 (115 Stat. 719).
                    ``(C) Authorization of appropriations.--There is 
                authorized to be appropriated to carry out this 
                paragraph $15,000,000 for fiscal year 2003 and each 
                fiscal year thereafter.''.

SEC. 6006. MULTIJURISDICTIONAL REGIONAL PLANNING ORGANIZATIONS.

    Section 306(a) of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1926(a)) (as amended by section 6005) is amended by adding at the 
end the following:
            ``(23) Multijurisdictional regional planning 
        organizations.--
                    ``(A) Grants.--The Secretary shall provide grants to 
                multijurisdictional regional planning and development 
                organizations to pay the Federal share of the cost of 
                providing assistance to local governments to improve the 
                infrastructure, services, and business development 
                capabilities of local governments and local economic 
                development organizations.
                    ``(B) Priority.--In determining which organizations 
                will receive a grant under this paragraph, the Secretary 
                shall give priority to an organization that--
                          ``(i) serves a rural area that, during the 
                      most recent 5-year period--
                                    ``(I) had a net out-migration of 
                                inhabitants, or other population loss, 
                                from the rural area that equals or 
                                exceeds 5 percent of the population of 
                                the rural area; or
                                    ``(II) had a median household income 
                                that is less than the nonmetropolitan 
                                median household income of the 
                                applicable State; and
                          ``(ii) has a history of providing substantive 
                      assistance to local governments and economic 
                      development organizations.
                    ``(C) Federal share.--A grant provided under this 
                paragraph shall be for not more than 75 percent of the 
                cost of providing assistance described in subparagraph 
                (A).
                    ``(D) Maximum amount of grants.--The amount of a 
                grant provided to an organization under this paragraph 
                shall not exceed $100,000.
                    ``(E) Authorization of appropriations.--There is 
                authorized to be appropriated to carry out this 
                paragraph $30,000,000 for each of fiscal years 2003 
                through 2007.''.

[[Page 116 STAT. 355]]

SEC. 6007. LOAN GUARANTEES FOR CERTAIN RURAL DEVELOPMENT LOANS.

    (a) Loan Guarantees for Water, Wastewater, and Essential Community 
Facilities Loans.--Section 306(a) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. <<NOTE: 7 USC 1926.>> 1925(a)) (as amended by 
section 6006) is amended by adding at the end the following:
            ``(24) Loan guarantees for water, wastewater, and essential 
        community facilities loans.--
                    ``(A) In general.--The Secretary may guarantee a 
                loan made to finance a community facility or water or 
                waste facility project in a rural area, including a loan 
                financed by the net proceeds of a bond described in 
                section 142(a) of the Internal Revenue Code of 1986.
                    ``(B) Requirements.--To be eligible for a loan 
                guarantee under subparagraph (A), an individual or 
                entity offering to purchase the loan shall demonstrate 
                to the Secretary that the person has--
                          ``(i) the capabilities and resources necessary 
                      to service the loan in a manner that ensures the 
                      continued performance of the loan, as determined 
                      by the Secretary; and
                          ``(ii) the ability to generate capital to 
                      provide borrowers of the loan with the additional 
                      credit necessary to properly service the loan.''.

    (b) Loan Guarantees for Certain Loans.--Section 310B of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 1932) is amended 
by adding at the end the following:
    ``(h) Loan Guarantees for Certain Loans.--The Secretary may 
guarantee loans made under subsection (a) to finance the issuance of 
bonds for the projects described in section 306(a)(24).''.

SEC. 6008. TRIBAL COLLEGE AND UNIVERSITY ESSENTIAL COMMUNITY FACILITIES.

    Section 306(a) of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1926(a)) (as amended by section 6007(a)) is amended by adding at 
the end the following:
            ``(25) Tribal college and university essential community 
        facilities.--
                    ``(A) In general.--The Secretary may make grants to 
                tribal colleges and universities (as defined in section 
                316 of the Higher Education Act of 1965 (20 U.S.C. 
                1059c)) to provide the Federal share of the cost of 
                developing specific tribal college or university 
                essential community facilities in rural areas.
                    ``(B) Federal share.--
                          ``(i) In <<NOTE: Regulation.>> general.--
                      Except as provided in clauses (ii) and (iii), the 
                      Secretary shall, by regulation, establish the 
                      maximum percentage of the cost of the facility 
                      that may be covered by a grant under this 
                      paragraph.
                          ``(ii) Maximum amount.--The amount of a grant 
                      provided under this paragraph for a facility shall 
                      not exceed 75 percent of the cost of developing 
                      the facility.
                          ``(iii) Graduated scale.--The Secretary shall 
                      provide for a graduated scale of the percentages 
                      of the cost covered by a grant made under this 
                      paragraph that provides higher percentages for 
                      facilities in

[[Page 116 STAT. 356]]

                      communities that have lower community population 
                      and income levels, as determined by the Secretary.
                    ``(C) Authorization of appropriations.--There is 
                authorized to be appropriated to carry out this 
                paragraph $10,000,000 for each of fiscal years 2003 
                through 2007.''.

SEC. 6009. EMERGENCY AND IMMINENT COMMUNITY WATER ASSISTANCE GRANT 
            PROGRAM.

    Section 306A of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1926a) is amended--
            (1) in the section heading, by inserting ``and imminent'' 
        after ``emergency'';
            (2) in subsection (a)--
                    (A) in paragraph (1), by inserting ``, or when such 
                a decline is imminent'' before the semicolon at the end; 
                and
                    (B) in paragraph (2)--
                          (i) in subparagraph (A), by striking ``acute'' 
                      and inserting ``acute, or imminent,''; and
                          (ii) in subparagraph (B), by striking 
                      ``decline'' and inserting ``decline, or imminent 
                      decline,'';
            (3) in subsection (c)(2), by striking ``occurred'' and 
        inserting ``occurred, or will occur,'';
            (4) in subsection (d), by striking paragraph (1) and 
        inserting the following:
            ``(1) In general.--Grants made under this section may be 
        used--
                    ``(A) for waterline extensions from existing 
                systems, laying of new waterlines, repairs, significant 
                maintenance, digging of new wells, equipment 
                replacement, and hook and tap fees;
                    ``(B) for any other appropriate purpose associated 
                with developing sources of, treating, storing, or 
                distributing water;
                    ``(C) to assist communities in complying with the 
                requirements of the Federal Water Pollution Control Act 
                (33 U.S.C. 1251 et seq.) or the Safe Drinking Water Act 
                (42 U.S.C. 300f et seq.); and
                    ``(D) to provide potable water to communities 
                through other means.'';
            (5) in subsection (f)(2), by striking ``$75,000'' and 
        inserting ``$150,000'';
            (6) in subsection (h)--
                    (A) in the second sentence of paragraph (1), by 
                striking ``decline'' and inserting ``decline, or 
                imminent decline,''; and
                    (B) by striking paragraph (2) and inserting the 
                following:
            ``(2) Timing of review of applications.--
                    ``(A) Simplified application.--The application 
                process developed by the Secretary under paragraph (1) 
                shall include a simplified application form that will 
                permit expedited consideration of an application for a 
                grant filed under this section.
                    ``(B) Priority review.--In processing applications 
                for any water or waste grant or loan authorized under 
                this title, the Secretary shall afford priority 
                processing to an application for a grant under this 
                section to the extent

[[Page 116 STAT. 357]]

                funds will be available for an award on the application 
                at the conclusion of priority processing.
                    ``(C) Timing.--The Secretary shall, to the maximum 
                extent practicable, review and act on an application 
                under this section within 60 days after the date on 
                which the application is submitted to the Secretary.''; 
                and
            (7) by striking subsection (i) and inserting the following:

    ``(i) Funding.--
            ``(1) Reservation.--
                    ``(A) In general.--For each fiscal year, not less 
                than 3 nor more than 5 percent of the total amount made 
                available to carry out section 306(a)(2) for the fiscal 
                year shall be reserved for grants under this section.
                    ``(B) Release.--Funds reserved under subparagraph 
                (A) for a fiscal year shall be reserved only until July 
                1 of the fiscal year.
            ``(2) Authorization of appropriations.--In addition to funds 
        made available under paragraph (1), there is authorized to be 
        appropriated to carry out this section $35,000,000 for each of 
        fiscal years 2003 through 2007.''.

SEC. 6010. WATER AND WASTE FACILITY GRANTS FOR NATIVE AMERICAN TRIBES.

    Section 306C of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1926c) is amended by striking subsection (e) and inserting the 
following:
    ``(e) Authorization of Appropriations.--
            ``(1) In general.--Subject to paragraph (2), there are 
        authorized to be appropriated--
                    ``(A) for grants under this section, $30,000,000 for 
                each fiscal year;
                    ``(B) for loans under this section, $30,000,000 for 
                each fiscal year; and
                    ``(C) in addition to grants provided under 
                subparagraph (A), for grants under this section to 
                benefit Indian tribes (as defined in section 4 of the 
                Indian Self-Determination and Education Assistance Act 
                (25 U.S.C. 450b)), $20,000,000 for each fiscal year.
            ``(2) Exception.--An entity eligible to receive funding 
        through a grant made under section 306D shall not be eligible 
        for a grant from funds made available under paragraph (1)(C).''.

SEC. 6011. GRANTS FOR WATER SYSTEMS FOR RURAL AND NATIVE VILLAGES IN 
            ALASKA.

    Section 306D(d)(1) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1926d(d)(1)) is amended by striking ``and 2002'' and 
inserting ``through 2007''.

SEC. 6012. GRANTS TO NONPROFIT ORGANIZATIONS TO FINANCE THE 
            CONSTRUCTION, REFURBISHING, AND SERVICING OF INDIVIDUALLY-
            OWNED HOUSEHOLD WATER WELL SYSTEMS IN RURAL AREAS FOR 
            INDIVIDUALS WITH LOW OR MODERATE INCOMES.

    (a) In General.--The Consolidated Farm and Rural Development Act is 
amended by inserting after section 306D (7 U.S.C. 1926d) the following:

[[Page 116 STAT. 358]]

``SEC. 306E. <<NOTE: 7 USC 1926e.>>  GRANTS TO NONPROFIT ORGANIZATIONS 
            TO FINANCE THE CONSTRUCTION, REFURBISHING, AND SERVICING OF 
            INDIVIDUALLY-OWNED HOUSEHOLD WATER WELL SYSTEMS IN RURAL 
            AREAS FOR INDIVIDUALS WITH LOW OR MODERATE INCOMES.

    ``(a) Definition of Eligible Individual.--In this section, the term 
`eligible individual' means an individual who is a member of a household 
the members of which have a combined income (for the most recent 12-
month period for which the information is available) that is not more 
than 100 percent of the median nonmetropolitan household income for the 
State or territory in which the individual resides, according to the 
most recent decennial census of the United States.
    ``(b) Grants.--
            ``(1) In general.--The Secretary may make grants to private 
        nonprofit organizations for the purpose of providing loans to 
        eligible individuals for the construction, refurbishing, and 
        servicing of individual household water well systems in rural 
        areas that are or will be owned by the eligible individuals.
            ``(2) Terms of loans.--A loan made with grant funds under 
        this section--
                    ``(A) shall have an interest rate of 1 percent;
                    ``(B) shall have a term not to exceed 20 years; and
                    ``(C) shall not exceed $8,000 for each water well 
                system described in paragraph (1).
            ``(3) Administrative expenses.--A recipient of a grant made 
        under this section may use grant funds to pay administrative 
        expenses associated with providing the assistance described in 
        paragraph (1), as determined by the Secretary.

    ``(c) Priority in Awarding Grants.--In awarding grants under this 
section, the Secretary shall give priority to an applicant that has 
substantial expertise and experience in promoting the safe and 
productive use of individually-owned household water well systems and 
ground water.
    ``(d) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $10,000,000 for each of fiscal 
years 2003 through 2007.''.
    (b) Effective <<NOTE: 7 USC 1926e note.>> Date.--The amendment made 
by subsection (a) takes effect on October 1, 2002.

SEC. 6013. LOANS AND LOAN GUARANTEES FOR RENEWABLE ENERGY SYSTEMS.

    Section 310B(a)(3) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1932(a)(3)) is amended by inserting ``and other renewable 
energy systems (including wind energy systems and anaerobic digestors 
for the purpose of energy generation)'' after ``solar energy systems''.

SEC. 6014. RURAL BUSINESS ENTERPRISE GRANTS.

    Section 310B(c)(1) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1932(c)(1)) is amended--
            (1) by striking ``(1) In General.--The Secretary'' and 
        inserting the following:
            ``(1) Grants.--
                    ``(A) In general.--The Secretary''; and
            (2) by adding at the end the following:

[[Page 116 STAT. 359]]

                    ``(B) Small and emerging private business 
                enterprises.--
                          ``(i) In general.--For the purpose of 
                      subparagraph (A), a small and emerging private 
                      business enterprise shall include (regardless of 
                      the number of employees or operating capital of 
                      the enterprise) an eligible nonprofit entity, or 
                      other tax-exempt organization, with a principal 
                      office in an area that is located--
                                    ``(I) on land of an existing or 
                                former Native American reservation; and
                                    ``(II) in a city, town, or 
                                unincorporated area that has a 
                                population of not more than 5,000 
                                inhabitants.
                          ``(ii) Use of grant.--An eligible nonprofit 
                      entity, or other tax exempt organization, 
                      described in clause (i) may use assistance 
                      provided under this paragraph to create, expand, 
                      or operate value-added processing in an area 
                      described in clause (i) in connection with 
                      production agriculture.
                          ``(iii) Priority.--In making grants under this 
                      paragraph, the Secretary shall give priority to 
                      grants that will be used to provide assistance to 
                      eligible nonprofit entities and other tax exempt 
                      organizations described in clause (i).''.

SEC. 6015. RURAL COOPERATIVE DEVELOPMENT GRANTS.

    Section 310B(e) of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 1932(e)) is amended--
            (1) in paragraph (5)(F), before the period at the end the 
        following: ``, except that the Secretary shall not require non-
        Federal financial support in an amount that is greater than 5 
        percent in the case of a 1994 institution (as defined in section 
        532 of the Equity in Educational Land-Grant Status Act of 1994 
        (7 U.S.C. 301 note; Public Law 103-382))''; and
            (2) in paragraph (9), by striking ``2002'' and inserting 
        ``2007''.

SEC. 6016. GRANTS TO BROADCASTING SYSTEMS.

    Section 310B(f) of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 1932(f)) is amended by adding at the end the following:
            ``(3) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection $5,000,000 for 
        each of fiscal years 2002 through 2007.''.

SEC. 6017. BUSINESS AND INDUSTRY LOAN MODIFICATIONS.

    Section 310B of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1932) is amended by striking subsection (g) and inserting the 
following:
    ``(g) Business and Industry Direct and Guaranteed Loans.--
            ``(1) Definition of business and industry loan.--In this 
        subsection, the term `business and industry loan' means a 
        business and industry direct or guaranteed loan that is made or 
        guaranteed by the Secretary under subsection (a)(1).
            ``(2) Loan guarantees for the purchase of cooperative 
        stock.--

[[Page 116 STAT. 360]]

                    ``(A) In general.--The Secretary may guarantee a 
                business and industry loan to individual farmers or 
                ranchers for the purpose of purchasing capital stock of 
                a farmer or rancher cooperative established for the 
                purpose of processing an agricultural commodity.
                    ``(B) Processing contracts during initial period.--A 
                cooperative described in subparagraph (A) for which a 
                farmer or rancher receives a guarantee to purchase stock 
                under subparagraph (A) may contract for services to 
                process agricultural commodities, or otherwise process 
                value-added agricultural products, during the 5-year 
                period beginning on the date of the startup of the 
                cooperative in order to provide adequate time for the 
                planning and construction of the processing facility of 
                the cooperative.
                    ``(C) Financial information.--Financial information 
                required by the Secretary from a farmer or rancher as a 
                condition of making a business and industry loan 
                guarantee under this paragraph shall be provided in the 
                manner generally required by commercial agricultural 
                lenders in the area.
            ``(3) Loans to cooperatives.--
                    ``(A) In general.--The Secretary may make or 
                guarantee a business and industry loan to a cooperative 
                organization that is headquartered in a metropolitan 
                area if the loan is used for a project or venture 
                described in subsection (a) that is located in a rural 
                area or a loan guarantee that meets the requirements of 
                paragraph (6).
                    ``(B) Refinancing.--A cooperative organization that 
                is eligible for a business and industry loan shall be 
                eligible to refinance an existing business and industry 
                loan with a lender if--
                          ``(i) the cooperative organization--
                                    ``(I) is current and performing with 
                                respect to the existing loan; and
                                    ``(II) is not, and has not been, in 
                                payment default, or the collateral of 
                                which has not been converted, with 
                                respect to the existing loan; and
                          ``(ii) there is adequate security or full 
                      collateral for the refinanced loan.
            ``(4) Loan appraisals.--The Secretary may require that any 
        appraisal made in connection with a business and industry loan 
        be conducted by a specialized appraiser that uses standards that 
        are similar to standards used for similar purposes in the 
        private sector, as determined by the Secretary.
            ``(5) Fees.--The Secretary may assess a 1-time fee for any 
        guaranteed business and industry loan in an amount that does not 
        exceed 2 percent of the guaranteed principal portion of the 
        loan.
            ``(6) Loan guarantees in nonrural areas.--
                    ``(A) In general.--The Secretary may guarantee a 
                business and industry loan to a cooperative organization 
                for a facility that is not located in a rural area if--
                          ``(i) the primary purpose of the loan 
                      guarantee is for a facility to provide value-added 
                      processing for agricultural producers that are 
                      located within 80 miles of the facility;

[[Page 116 STAT. 361]]

                          ``(ii) the applicant demonstrates to the 
                      Secretary that the primary benefit of the loan 
                      guarantee will be to provide employment for 
                      residents of a rural area; and
                          ``(iii) the total amount of business and 
                      industry loans guaranteed for a fiscal year under 
                      this paragraph does not exceed 10 percent of the 
                      business and industry loans guaranteed for the 
                      fiscal year under subsection (a)(1).
                    ``(B) Principal amounts.--The principal amount of a 
                business and industry loan guaranteed under this 
                paragraph may not exceed $25,000,000.
            ``(7) Intangible assets.--In determining whether a 
        cooperative organization is eligible for a guaranteed business 
        and industry loan, the Secretary may consider the market value 
        of a properly appraised brand name, patent, or trademark of the 
        cooperative.
            ``(8) Limitations on loan guarantees for cooperative 
        organizations.--
                    ``(A) Principal amount.--
                          ``(i) In general.--Subject to clause (ii), the 
                      principal amount of a business and industry loan 
                      made to a cooperative organization and guaranteed 
                      under this subsection shall not exceed 
                      $40,000,000.
                          ``(ii) Use.--To be eligible for a guarantee 
                      under this subsection for a business and industry 
                      loan made to a cooperative organization, the 
                      principal amount of the any such loan in excess of 
                      $25,000,000 shall be used to carry out a project--
                                    ``(I) in a rural area; and
                                    ``(II) that provides for the value-
                                added processing of agricultural 
                                commodities.
                    ``(B) Applications.--If a cooperative organization 
                submits an application for a guarantee under this 
                subsection of a business and industry loan with a 
                principal amount that is in excess of $25,000,000, the 
                Secretary--
                          ``(i) shall review and, if appropriate, 
                      approve the application; and
                          ``(ii) may not delegate the approval 
                      authority.
                    ``(C) Maximum amount.--The total amount of business 
                and industry loans made to cooperative organizations and 
                guaranteed for a fiscal year under this subsection with 
                principal amounts that are in excess of $25,000,000 may 
                not exceed 10 percent of the business and industry loans 
                guaranteed for the fiscal year under subsection 
                (a)(1).''.

SEC. 6018. USE OF RURAL DEVELOPMENT LOANS AND GRANTS FOR OTHER PURPOSES.

    Subtitle A of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1921 et seq.) (as amended by section 5006) is amended by adding 
at the end the following:

``SEC. 310G. <<NOTE: 7 USC 1936a.>>  USE OF RURAL DEVELOPMENT LOANS AND 
            GRANTS FOR OTHER PURPOSES.

    ``If, after making a loan or a grant described in section 381E(d), 
the Secretary determines that the circumstances under which the loan or 
grant was made have sufficiently changed to make the project or activity 
for which the loan or grant was made available

[[Page 116 STAT. 362]]

no longer appropriate, the Secretary may allow the loan borrower or 
grant recipient to use property (real and personal) purchased or 
improved with the loan or grant funds, or proceeds from the sale of 
property (real and personal) purchased with such funds, for another 
project or activity that (as determined by the Secretary)--
            ``(1) will be carried out in the same area as the original 
        project or activity;
            ``(2) meets the criteria for a loan or a grant described in 
        section 381E(d); and
            ``(3) satisfies such additional requirements as are 
        established by the Secretary.''.

SEC. 6019. SIMPLIFIED APPLICATION FORMS FOR LOAN GUARANTEES.

    Section 333A of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1983a) (as amended by section 5307) is amended by striking 
subsection (g) and inserting the following:
    ``(g) Simplified Application Forms for Loan Guarantees.--
            ``(1) In general.--The Secretary shall provide to lenders a 
        short, simplified application form for guarantees under this 
        title of--
                    ``(A) farmer program loans the principal amount of 
                which is $125,000 or less; and
                    ``(B) business and industry guaranteed loans under 
                section 310B(a)(1) the principal amount of which is--
                          ``(i) in the case of a loan guarantee made 
                      during fiscal year 2002 or 2003, $400,000 or less; 
                      and
                          ``(ii) in the case of a loan guarantee made 
                      during any subsequent fiscal year--
                                    ``(I) $400,000 or less; or
                                    ``(II) if the Secretary determines 
                                that there is not a significant 
                                increased risk of a default on the loan, 
                                $600,000 or less.
            ``(2) Water and waste disposal grants and loans.--The 
        Secretary shall develop an application process that accelerates, 
        to the maximum extent practicable, the processing of 
        applications for water and waste disposal grants or direct or 
        guaranteed loans under paragraph (1) or (2) of section 306(a) 
        the grant award amount or principal loan amount, respectively, 
        of which is $300,000 or less.
            ``(3) Administration.--In developing an application under 
        this subsection, the Secretary shall--
                    ``(A) consult with commercial and cooperative 
                lenders; and
                    ``(B) ensure that--
                          ``(i) the form can be completed manually or 
                      electronically, at the option of the lender;
                          ``(ii) the form minimizes the documentation 
                      required to accompany the form;
                          ``(iii) the cost of completing and processing 
                      the form is minimal; and
                          ``(iv) the form can be completed and processed 
                      in an expeditious manner.''.

SEC. 6020. DEFINITION OF RURAL AND RURAL AREA.

    (a) In General.--Section 343(a) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1991(a)) is amended by adding at the end the 
following:

[[Page 116 STAT. 363]]

            ``(13) Rural and rural area.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the terms `rural' and `rural area' mean 
                any area other than--
                          ``(i) a city or town that has a population of 
                      greater than 50,000 inhabitants; and
                          ``(ii) the urbanized area contiguous and 
                      adjacent to such a city or town.
                    ``(B) Water and waste disposal grants and direct and 
                guaranteed loans.--For the purpose of water and waste 
                disposal grants and direct and guaranteed loans provided 
                under paragraphs (1), (2), and (24) of section 306(a), 
                the terms `rural' and `rural area' mean a city, town, or 
                unincorporated area that has a population of no more 
                than 10,000 inhabitants.
                    ``(C) Community facility loans and grants.--For the 
                purpose of community facility direct and guaranteed 
                loans and grants under paragraphs (1), (19), (20), (21), 
                and (24) of section 306(a), the terms `rural' and `rural 
                area' mean a city, town, or unincorporated area that has 
                a population of not more than 20,000 inhabitants.
                    ``(D) Multijurisdictional regional planning 
                organizations; national rural development partnership.--
                In sections 306(a)(23) and 378, the term `rural area' 
                means--
                          ``(i) all the territory of a State that is not 
                      within the boundary of any standard metropolitan 
                      statistical area; and
                          ``(ii) all territory within any standard 
                      metropolitan statistical area within a census 
                      tract having a population density of less than 20 
                      persons per square mile, as determined by the 
                      Secretary according to the most recent census of 
                      the United States as of any date.
                    ``(E) Rural business investment program.--In 
                subtitle H, the term `rural area' means an area that is 
                located--
                          ``(i) outside a standard metropolitan 
                      statistical area; or
                          ``(ii) within a community that has a 
                      population of 50,000 inhabitants or less.''.

    (b) Conforming Amendments.--
            (1) Section 306(a) of the Consolidated Farm and Rural 
        Development Act (7 U.S.C. 1926(a)) is amended by striking 
        paragraph (7).
            (2) Section 381A of the Consolidated Farm and Rural 
        Development Act (7 U.S.C. 2009) is amended--
                    (A) by striking paragraph (1); and
                    (B) by redesignating paragraphs (2) and (3) as 
                paragraphs (1) and (2), respectively.
            (3) Section 735 of the Agriculture, Rural Development, Food 
        and Drug Administration, and Related Agencies Appropriations 
        Act, 1999 (112 Stat. 2681-29) <<NOTE: 7 USC 2009 note.>> is 
        repealed.

SEC. 6021. NATIONAL RURAL DEVELOPMENT PARTNERSHIP.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1981 et seq.) (as amended by section 5321) is amended by adding 
at the end the following:

[[Page 116 STAT. 364]]

``SEC. 378. <<NOTE: 7 USC 2008m.>>  NATIONAL RURAL DEVELOPMENT 
            PARTNERSHIP.

    ``(a) Definitions.--In this section:
            ``(1) Agency with rural responsibilities.--The term `agency 
        with rural responsibilities' means any executive agency (as 
        defined in section 105 of title 5, United States Code) that 
        implements a Federal law, or administers a program, targeted at 
        or having a significant impact on rural areas.
            ``(2) Coordinating committee.--The term `Coordinating 
        Committee' means the National Rural Development Coordinating 
        Committee established by subsection (c).
            ``(3) Partnership.--The term `Partnership' means the 
        National Rural Development Partnership continued by subsection 
        (b).
            ``(4) State rural development council.--The term `State 
        rural development council' means a State rural development 
        council that meets the requirements of subsection (d).

    ``(b) Partnership.--
            ``(1) In general.--The Secretary shall continue the National 
        Rural Development Partnership composed of--
                    ``(A) the Coordinating Committee; and
                    ``(B) State rural development councils.
            ``(2) Purposes.--The purposes of the Partnership are to 
        empower and build the capacity of States and rural communities 
        to design flexible and innovative responses to their own special 
        rural development needs, with local determinations of progress 
        and selection of projects and activities.
            ``(3) Governing <<NOTE: Establishment.>> panel.--
                    ``(A) In general.--A panel consisting of 
                representatives of the Coordinating Committee and State 
                rural development councils shall be established to lead 
                and coordinate the strategic operation, policies, and 
                practices of the Partnership.
                    ``(B) Annual reports.--In conjunction with the 
                Coordinating Committee and State rural development 
                councils, the panel shall prepare and submit to Congress 
                an annual report on the activities of the Partnership.
            ``(4) Role of federal government.--The role of the Federal 
        Government in the Partnership may be that of a partner and 
        facilitator, with Federal agencies authorized--
                    ``(A) to cooperate with States to implement the 
                Partnership;
                    ``(B) to provide States with the technical and 
                administrative support necessary to plan and implement 
                tailored rural development strategies to meet local 
                needs;
                    ``(C) to ensure that the head of each agency with 
                rural responsibilities designates a senior-level agency 
                official to represent the agency on the Coordinating 
                Committee and directs appropriate field staff to 
                participate fully with the State rural development 
                council within the jurisdiction of the field staff; and
                    ``(D) to enter into cooperative agreements with, and 
                to provide grants and other assistance to, the 
                Coordinating Committee and State rural development 
                councils.

    ``(c) National Rural Development Coordinating Committee.--

[[Page 116 STAT. 365]]

            ``(1) Establishment.--The Secretary shall establish a 
        National Rural Development Coordinating Committee within the 
        Department of Agriculture.
            ``(2) Composition.--The Coordinating Committee shall be 
        composed of--
                    ``(A) 1 representative of each agency with rural 
                responsibilities; and
                    ``(B) representatives, approved by the Secretary, 
                of--
                          ``(i) national associations of State, 
                      regional, local, and tribal governments and 
                      intergovernmental and multijurisdictional agencies 
                      and organizations;
                          ``(ii) national public interest groups;
                          ``(iii) other national nonprofit organizations 
                      that elect to participate in the activities of the 
                      Coordinating Committee; and
                          ``(iv) the private sector.
            ``(3) Duties.--The Coordinating Committee shall--
                    ``(A) support the work of the State rural 
                development councils;
                    ``(B) facilitate coordination of rural development 
                policies, programs, and activities among Federal 
                agencies and with those of State, local, and tribal 
                governments, the private sector, and nonprofit 
                organizations;
                    ``(C) review and comment on policies, regulations, 
                and proposed legislation that affect or would affect 
                rural areas and gather and provide related information;
                    ``(D) develop and facilitate strategies to reduce or 
                eliminate administrative and regulatory impediments; and
                    ``(E) require each State rural development council 
                receiving funds under this section to submit an annual 
                report on the use of the funds, including a description 
                of strategic plans, goals, performance measures, and 
                outcomes for the State rural development council of the 
                State.
            ``(4) Federal participation in coordinating committee.--
                    ``(A) In general.--A Federal employee shall fully 
                participate in the governance and operations of the 
                Coordinating Committee, including activities related to 
                grants, contracts, and other agreements, in accordance 
                with this section.
                    ``(B) Conflicts.--Participation by a Federal 
                employee in the Coordinating Committee in accordance 
                with this paragraph shall not constitute a violation of 
                section 205 or 208 of title 18, United States Code.
            ``(5) Administrative support.--The Secretary may provide 
        such administrative support for the Coordinating Committee as 
        the Secretary determines is necessary to carry out the duties of 
        the Coordinating Committee.
            ``(6) Procedures.--The Secretary may prescribe such 
        regulations, bylaws, or other procedures as are necessary for 
        the operation of the Coordinating Committee.

    ``(d) State Rural Development Councils.--
            ``(1) Establishment.--Notwithstanding chapter 63 of title 
        31, United States Code, each State may elect to participate in 
        the Partnership by entering into an agreement with the Secretary 
        to recognize a State rural development council.

[[Page 116 STAT. 366]]

            ``(2) Composition.--A State rural development council 
        shall--
                    ``(A) be composed of representatives of Federal, 
                State, local, and tribal governments, nonprofit 
                organizations, regional organizations, the private 
                sector, and other entities committed to rural 
                advancement; and
                    ``(B) have a nonpartisan and nondiscriminatory 
                membership that--
                          ``(i) is broad and representative of the 
                      economic, social, and political diversity of the 
                      State; and
                          ``(ii) shall be responsible for the governance 
                      and operations of the State rural development 
                      council.
            ``(3) Duties.--A State rural development council shall--
                    ``(A) facilitate collaboration among Federal, State, 
                local, and tribal governments and the private and 
                nonprofit sectors in the planning and implementation of 
                programs and policies that have an impact on rural areas 
                of the State;
                    ``(B) monitor, report, and comment on policies and 
                programs that address, or fail to address, the needs of 
                the rural areas of the State;
                    ``(C) as part of the Partnership, in conjunction 
                with the Coordinating Committee, facilitate the 
                development of strategies to reduce or eliminate 
                conflicting or duplicative administrative or regulatory 
                requirements of Federal, State, local, and tribal 
                governments; and
                    ``(D)(i) provide to the Coordinating Committee an 
                annual plan with goals and performance measures; and
                    ``(ii) submit to the Coordinating Committee an 
                annual report on the progress of the State rural 
                development council in meeting the goals and measures.
            ``(4) Federal participation in state rural development 
        councils.--
                    ``(A) In general.--A State Director for Rural 
                Development of the Department of Agriculture, other 
                employees of the Department, and employees of other 
                Federal agencies with rural responsibilities shall fully 
                participate as voting members in the governance and 
                operations of State rural development councils 
                (including activities related to grants, contracts, and 
                other agreements in accordance with this section) on an 
                equal basis with other members of the State rural 
                development councils.
                    ``(B) Conflicts.--Participation by a Federal 
                employee in a State rural development council in 
                accordance with this paragraph shall not constitute a 
                violation of section 205 or 208 of title 18, United 
                States Code.

    ``(e) Administrative Support of the Partnership.--
            ``(1) Detail of employees.--
                    ``(A) In general.--In order to provide experience in 
                intergovernmental collaboration, the head of an agency 
                with rural responsibilities that elects to participate 
                in the Partnership may, and is encouraged to, detail to 
                the Secretary for the support of the Partnership 1 or 
                more employees of the agency with rural responsibilities 
                without reimbursement for a period of up to 1 year.
                    ``(B) Civil service status.--The detail shall be 
                without interruption or loss of civil service status or 
                privilege.

[[Page 116 STAT. 367]]

            ``(2) Additional support.--The Secretary may provide for any 
        additional support staff to the Partnership as the Secretary 
        determines to be necessary to carry out the duties of the 
        Partnership.
            ``(3) Intermediaries.--The Secretary may enter into a 
        contract with a qualified intermediary under which the 
        intermediary shall be responsible for providing administrative 
        and technical assistance to a State rural development council, 
        including administering the financial assistance available to 
        the State rural development council.

    ``(f) Matching Requirements for State Rural Development Councils.--
            ``(1) In general.--Except as provided in paragraph (2), a 
        State rural development council shall provide matching funds, or 
        in-kind goods or services, to support the activities of the 
        State rural development council in an amount that is not less 
        than 33 percent of the amount of Federal funds received from a 
        Federal agency under subsection (g)(2).
            ``(2) Exceptions to matching requirement for certain federal 
        funds.--Paragraph (1) shall not apply to funds, grants, funds 
        provided under contracts or cooperative agreements, gifts, 
        contributions, or technical assistance received by a State rural 
        development council from a Federal agency that are used--
                    ``(A) to support 1 or more specific program or 
                project activities; or
                    ``(B) to reimburse the State rural development 
                council for services provided to the Federal agency 
                providing the funds, grants, funds provided under 
                contracts or cooperative agreements, gifts, 
                contributions, or technical assistance.
            ``(3) Department's share.--The Secretary shall develop a 
        plan to decrease, over time, the share of the Department of 
        Agriculture of the cost of the core operations of State rural 
        development councils.

    ``(g) Funding.--
            ``(1) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this section $10,000,000 for 
        each of fiscal years 2003 through 2007.
            ``(2) Federal agencies.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law limiting the ability of an agency, 
                along with other agencies, to provide funds to the 
                Coordinating Committee or a State rural development 
                council in order to carry out the purposes of this 
                section, a Federal agency may make grants, gifts, or 
                contributions to, provide technical assistance to, or 
                enter into contracts or cooperative agreements with, the 
                Coordinating Committee or a State rural development 
                council.
                    ``(B) Assistance.--Federal agencies are encouraged 
                to use funds made available for programs that have an 
                impact on rural areas to provide assistance to, and 
                enter into contracts with, the Coordinating Committee or 
                a State rural development council, as described in 
                subparagraph (A).

[[Page 116 STAT. 368]]

            ``(3) Contributions.--The Coordinating Committee and a State 
        rural development council may accept private contributions.

    ``(h) Termination.--The authority provided under this section shall 
terminate on the date that is 5 years after the date of enactment of 
this section.''.

SEC. 6022. RURAL TELEWORK.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1981 et seq.) (as amended by section 6021) is amended by adding 
at the end the following:

``SEC. 379. <<NOTE: 7 USC 2008n.>>  RURAL TELEWORK.

    ``(a) Definitions.--In this section:
            ``(1) Eligible organization.--The term `eligible 
        organization' means a nonprofit entity, an educational 
        institution, an Indian tribe (as defined in section 4 of the 
        Indian Self-Determination and Education Assistance Act (25 
        U.S.C. 450b)), or any other organization, in a rural area 
        (except for the institute), that meets the requirements of this 
        section and such other requirements as are established by the 
        Secretary.
            ``(2) Institute.--The term `institute' means a rural 
        telework institute established using a grant under subsection 
        (b).
            ``(3) Telework.--The term `telework' means the use of 
        telecommunications to perform work functions at a rural work 
        center located outside the place of business of an employer.

    ``(b) Rural Telework Institute.--
            ``(1) In <<NOTE: Grants.>> general.--The Secretary shall 
        make 1 or more grants to an eligible organization to pay the 
        Federal share of the cost of establishing and operating a 
        national rural telework institute to carry out projects 
        described in paragraph (2).
            ``(2) Projects.--The institute shall use grant funds 
        received under this subsection to carry out a 5-year project--
                    ``(A) to serve as a clearinghouse for telework 
                research and development;
                    ``(B) to conduct outreach to rural communities and 
                rural workers;
                    ``(C) to develop and share best practices in rural 
                telework throughout the United States;
                    ``(D) to develop innovative, market-driven telework 
                projects and joint ventures with the private sector that 
                employ workers in rural areas in jobs that promote 
                economic self-sufficiency;
                    ``(E) to share information about the design and 
                implementation of telework arrangements;
                    ``(F) to support private sector businesses that are 
                transitioning to telework;
                    ``(G) to support and assist telework projects and 
                individuals at the State and local level; and
                    ``(H) to perform such other functions as the 
                Secretary considers appropriate.
            ``(3) Non-federal share.--
                    ``(A) In general.--As a condition of receiving a 
                grant under this subsection, an eligible organization 
                shall agree to obtain, after the application of the 
                eligible organization

[[Page 116 STAT. 369]]

                has been approved and notice of award has been issued, 
                contributions from non-Federal sources that are equal 
                to--
                          ``(i) during each of the first, second, and 
                      third years of a project, 30 percent of the amount 
                      of the grant; and
                          ``(ii) during each of the fourth and fifth 
                      years of the project, 50 percent of the amount of 
                      the grant.
                    ``(B) Indian tribes.--Notwithstanding subparagraph 
                (A), an Indian tribe may use any Federal funds made 
                available to the Indian tribe for self-governance to pay 
                the non-Federal contributions required under 
                subparagraph (A).
                    ``(C) Form.--The non-Federal contributions required 
                under subparagraph (A) may be in the form of in-kind 
                contributions, including office equipment, office space, 
                computer software, consultant services, computer 
                networking equipment, and related services.

    ``(c) Telework Grants.--
            ``(1) In general.--Subject to paragraphs (2) through (5), 
        the Secretary shall make grants to eligible organizations to pay 
        the Federal share of the cost of--
                    ``(A) obtaining equipment and facilities to 
                establish or expand telework locations in rural areas; 
                and
                    ``(B) operating telework locations in rural areas.
            ``(2) Applications.--To be eligible to receive a grant under 
        this subsection, an eligible organization shall submit to the 
        Secretary, and receive the approval of the Secretary of, an 
        application for the grant that demonstrates that the eligible 
        organization has adequate resources and capabilities to 
        establish or expand a telework location in a rural area.
            ``(3) Non-federal share.--
                    ``(A) In general.--As a condition of receiving a 
                grant under this subsection, an eligible organization 
                shall agree to obtain, after the application of the 
                eligible organization has been approved and notice of 
                award has been issued, contributions from non-Federal 
                sources that are equal to 50 percent of the amount of 
                the grant.
                    ``(B) Indian tribes.--Notwithstanding subparagraph 
                (A), an Indian tribe may use Federal funds made 
                available to the tribe for self-governance to pay the 
                non-Federal contributions required under subparagraph 
                (A).
                    ``(C) Sources.--The non-Federal contributions 
                required under subparagraph (A)--
                          ``(i) may be in the form of in-kind 
                      contributions, including office equipment, office 
                      space, computer software, consultant services, 
                      computer networking equipment, and related 
                      services; and
                          ``(ii) may not be made from funds made 
                      available for community development block grants 
                      under title I of the Housing and Community 
                      Development Act of 1974 (42 U.S.C. 5301 et seq.).
            ``(4) Duration.--The Secretary may not provide a grant under 
        this subsection to expand or operate a telework location in a 
        rural area after the date that is 3 years after the 
        establishment of the telework location.

[[Page 116 STAT. 370]]

            ``(5) Amount.--The amount of a grant provided to an eligible 
        organization under this subsection shall be not less than 
        $1,000,000 and not more than $2,000,000.

    ``(d) Applicability of Certain Federal Law.--An eligible 
organization that receives funds under this section shall be subject to 
the provisions of Federal law (including regulations) administered by 
the Secretary of Labor or the Equal Employment Opportunity Commission 
that govern the responsibilities of employers to employees.
    ``(e) Regulations.--Not <<NOTE: Deadline.>> later than 180 days 
after the date of enactment of this section, the Secretary shall 
promulgate regulations to carry out this section.

    ``(f) Authorization of Appropriation.--There is authorized to be 
appropriated to carry out this section $30,000,000 for each of fiscal 
years 2002 through 2007, of which $5,000,000 shall be provided to 
establish and support an institute under subsection (b).''.

SEC. 6023. HISTORIC BARN PRESERVATION.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1981 et seq.) (as amended by section 6022) is amended by adding 
at the end the following:

``SEC. 379A. <<NOTE: 7 USC 2008o.>>  HISTORIC BARN PRESERVATION.

    ``(a) Definitions.--In this section:
            ``(1) Barn.--The term `barn' means a building (other than a 
        dwelling) on a farm, ranch, or other agricultural operation 
        for--
                    ``(A) housing animals;
                    ``(B) storing or processing crops;
                    ``(C) storing and maintaining agricultural 
                equipment; or
                    ``(D) serving an essential or useful purpose related 
                to agricultural activities conducted on the adjacent 
                land.
            ``(2) Eligible applicant.--The term `eligible applicant' 
        means--
                    ``(A) a State department of agriculture (or a 
                designee);
                    ``(B) a national or State nonprofit organization 
                that--
                          ``(i) is described in section 501(c)(3) of the 
                      Internal Revenue Code of 1986 and exempt from 
                      taxation under section 501(a) of such Code; and
                          ``(ii) has experience or expertise, as 
                      determined by the Secretary, in the 
                      identification, evaluation, rehabilitation, 
                      preservation, or protection of historic barns; and
                    ``(C) a State historic preservation office.
            ``(3) Historic barn.--The term `historic barn' means a barn 
        that--
                    ``(A) is at least 50 years old;
                    ``(B) retains sufficient integrity of design, 
                materials, and construction to clearly identify the barn 
                as an agricultural building; and
                    ``(C) meets the criteria for listing on National, 
                State, or local registers or inventories of historic 
                structures.
            ``(4) Secretary.--The term `Secretary' means the Secretary, 
        acting through the Under Secretary of Rural Development.

[[Page 116 STAT. 371]]

    ``(b) Program.--The Secretary shall establish a historic barn 
preservation program--
            ``(1) to assist States in developing a list of historic 
        barns;
            ``(2) to collect and disseminate information on historic 
        barns;
            ``(3) to foster educational programs relating to the 
        history, construction techniques, rehabilitation, and 
        contribution to society of historic barns; and
            ``(4) to sponsor and conduct research on--
                    ``(A) the history of barns; and
                    ``(B) best practices to protect and rehabilitate 
                historic barns from the effects of decay, fire, arson, 
                and natural disasters.

    ``(c) Grants.--
            ``(1) In general.--The Secretary may make grants to, or 
        enter into contracts or cooperative agreements with, eligible 
        applicants to carry out an eligible project under paragraph (2).
            ``(2) Eligible projects.--A grant under this subsection may 
        be made to an eligible applicant for a project--
                    ``(A) to rehabilitate or repair a historic barn;
                    ``(B) to preserve a historic barn through--
                          ``(i) the installation of a fire protection 
                      system, including fireproofing or fire detection 
                      system and sprinklers; and
                          ``(ii) the installation of a system to prevent 
                      vandalism; and
                    ``(C) to identify, document, and conduct research on 
                a historic barn to develop and evaluate appropriate 
                techniques or best practices for protecting historic 
                barns.
            ``(3) Requirements.--An eligible applicant that receives a 
        grant for a project under this subsection shall comply with any 
        standards established by the Secretary of the Interior for 
        historic preservation projects.
            ``(4) Authorization of appropriations.--There are authorized 
        to be appropriated such sums as are necessary to carry out this 
        section for each of fiscal years 2002 through 2007.''.

SEC. 6024. GRANTS FOR NOAA WEATHER RADIO TRANSMITTERS.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1981 et seq.) (as amended by section 6023)) is amended by adding 
at the end the following:

``SEC. 379B. <<NOTE: 7 USC 2008p.>>  GRANTS FOR NOAA WEATHER RADIO 
            TRANSMITTERS.

    ``(a) In General.--The Secretary, acting through the Administrator 
of the Rural Utilities Service, may make grants to public and nonprofit 
entities, and borrowers of loans made by the Rural Utilities Service, 
for the Federal share of the cost of acquiring radio transmitters to 
increase coverage of rural areas by the all hazards weather radio 
broadcast system of the National Oceanic and Atmospheric Administration.
    ``(b) Eligibility.--To be eligible for a grant under this section, 
an applicant shall provide to the Secretary--
            ``(1) a binding commitment from a tower owner to place the 
        transmitter on a tower; and
            ``(2) a description of how the tower placement will increase 
        coverage of a rural area by the all hazards weather radio

[[Page 116 STAT. 372]]

        broadcast system of the National Oceanic and Atmospheric 
        Administration.

    ``(c) Federal Share.--A grant provided under this section shall be 
not more than 75 percent of the total cost of acquiring a radio 
transmitter, as described in subsection (a).
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section for 
each of fiscal years 2002 through 2007.''.

SEC. 6025. GRANTS TO TRAIN FARM WORKERS IN NEW TECHNOLOGIES AND TO TRAIN 
            FARM WORKERS IN SPECIALIZED SKILLS NECESSARY FOR HIGHER 
            VALUE CROPS.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1981 et seq.) (as amended by section 6024) is amended by adding 
at the end the following:

``SEC. 379C. <<NOTE: 7 USC 2008q.>>  GRANTS TO TRAIN FARM WORKERS IN NEW 
            TECHNOLOGIES AND TO TRAIN FARM WORKERS IN SPECIALIZED SKILLS 
            NECESSARY FOR HIGHER VALUE CROPS.

    ``(a) In General.--The Secretary shall make grants to nonprofit 
organizations, or to a consortium of nonprofit organizations, 
agribusinesses, State and local governments, agricultural labor 
organizations, farmer or rancher cooperatives, and community-based 
organizations with the capacity to train farm workers.
    ``(b) Use of Funds.--An entity to which a grant is made under this 
section shall use the grant to train farm workers to use new 
technologies and develop specialized skills for agricultural 
development.
    ``(c) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $10,000,000 for each of fiscal 
years 2002 through 2007.''.

SEC. 6026. RURAL COMMUNITY ADVANCEMENT PROGRAM.

    (a) National Reserve Program.--Section 381E of the Consolidated Farm 
and Rural Development Act (7 U.S.C. 2009d) is amended--
            (1) in subsection (b)--
                    (A) by striking paragraph (4); and
                    (B) by redesignating paragraph (5) as paragraph (4);
            (2) by striking subsection (e);
            (3) by redesignating subsections (f) through (h) as 
        subsections (e) through (g), respectively; and
            (4) in subsection (g) (as so redesignated), by striking 
        ``subsection (g) of this section'' and inserting ``subsection 
        (f)''.

    (b) Rural Venture Capital Demonstration Program.--Section 381O of 
the Consolidated Farm and Rural Development Act (7 U.S.C. 2009n) is 
repealed.
    (c) Conforming Amendments.--Section 381G of the Consolidated Farm 
and Rural Development Act (7 U.S.C. 2009f(a)) is amended--
            (1) in subsection (a), by striking ``section 381E(g)'' each 
        place it appears and inserting ``section 381E(f)''; and
            (2) in subsection (b)(1), by striking ``section 381E(h)'' 
        and inserting ``section 381E(g)''.

[[Page 116 STAT. 373]]

SEC. 6027. DELTA REGIONAL AUTHORITY.

    (a) Voting.--Section 382B(c) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 2009aa-1(c)) is amended by striking paragraph 
(1) and inserting the following:
            ``(1) In general.--
                    ``(A) Temporary <<NOTE: Effective date. Termination 
                date.>> method.--During the period beginning on the date 
                of enactment of this subparagraph and ending on December 
                31, 2004, a decision by the Authority shall require the 
                affirmative vote of the Federal cochairperson and a 
                majority of the State members (not including any member 
                representing a State that is delinquent under subsection 
                (g)(2)(C)) to be effective.
                    ``(B) Permanent <<NOTE: Effective date.>> method.--
                Effective beginning on January 1, 2005, a decision by 
                the Authority shall require a majority vote of the 
                Authority (not including any member representing a State 
                that is delinquent under subsection (g)(2)(C)) to be 
                effective.''.

    (b) Authority to Issue Regulations.--Section 382B(e)(4) of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-1(e)(4)) is 
amended by striking ``and rules'' and inserting ``, rules, and 
regulations''.
    (c) Economic and Community Development Grants.--Section 382C(b) of 
the Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-2(b)) 
is amended by striking paragraph (3).
    (d) Supplements to Federal Grant Programs.--Section 382D of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-3) is 
amended to read as follows:

``SEC. 382D. SUPPLEMENTS TO FEDERAL GRANT PROGRAMS.

    ``(a) Finding.--Congress finds that certain States and local 
communities of the region, including local development districts, may be 
unable to take maximum advantage of Federal grant programs for which the 
States and communities are eligible because--
            ``(1) the States or communities lack the economic resources 
        to provide the required matching share; or
            ``(2) there are insufficient funds available under the 
        applicable Federal law authorizing the Federal grant program to 
        meet pressing needs of the region.

    ``(b) Federal Grant Program Funding.--Notwithstanding any provision 
of law limiting the Federal share, the areas eligible for assistance, or 
the authorizations of appropriations of any Federal grant program, and 
in accordance with subsection (c), the Authority, with the approval of 
the Federal cochairperson and with respect to a project to be carried 
out in the region--
            ``(1) may increase the Federal share of the costs of a 
        project under the Federal grant program to not more than 90 
        percent (except as provided in section 382F(b)); and
            ``(2) shall use amounts made available to carry out this 
        subtitle to pay the increased Federal share.

    ``(c) Certifications.--
            ``(1) In general.--In the case of any project for which all 
        or any portion of the basic Federal share of the costs of the 
        project is proposed to be paid under this section, no Federal 
        contribution shall be made until the Federal official 
        administering the Federal law that authorizes the Federal grant 
        program certifies that the project--

[[Page 116 STAT. 374]]

                    ``(A) meets (except as provided in subsection (b)) 
                the applicable requirements of the applicable Federal 
                grant program; and
                    ``(B) could be approved for Federal contribution 
                under the Federal grant program if funds were available 
                under the law for the project.
            ``(2) Certification by authority.--
                    ``(A) In general.--The certifications and 
                determinations required to be made by the Authority for 
                approval of projects under this Act in accordance with 
                section 382I--
                          ``(i) shall be controlling; and
                          ``(ii) shall be accepted by the Federal 
                      agencies.
                    ``(B) Acceptance by federal cochairperson.--In the 
                case of any project described in paragraph (1), any 
                finding, report, certification, or documentation 
                required to be submitted with respect to the project to 
                the head of the department, agency, or instrumentality 
                of the Federal Government responsible for the 
                administration of the Federal grant program under which 
                the project is carried out shall be accepted by the 
                Federal cochairperson.''.

    (e) Grants to Local Development Agencies.--Section 382E(b)(1) of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-4(b)(1)) is 
amended by striking ``may'' and inserting ``shall''.
    (f) Approval of Development Plans and Projects.--Section 382I of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-8) is 
amended--
            (1) in subsection (a), by inserting ``and approved'' after 
        ``reviewed''; and
            (2) in subsection (d), by striking ``Votes for Decisions.--
        '' and inserting ``Approval of Grant Applications.--''.

    (g) Authorization of Appropriations.--Section 382M(a) of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-12(a)) is 
amended by striking ``2002'' and inserting ``2007''.
    (h) Termination of Authority.--Section 382N of the Consolidated Farm 
and Rural Development Act (7 U.S.C. 2009aa-13) is amended by striking 
``2002'' and inserting ``2007''.
    (i) Delta Region Agricultural Economic Development.--Subtitle D of 
the Consolidated Farm and Rural Development Act (7 U.S.C. 1981 et seq.) 
(as amended by section 6025) is amended by adding at the end the 
following:

``SEC. 379D. <<NOTE: 7 USC 2008r.>>  DELTA REGION AGRICULTURAL ECONOMIC 
            DEVELOPMENT.

    ``(a) In General.--The Secretary may make grants to assist in the 
development of state-of-the-art technology in animal nutrition 
(including research and development of the technology) and value-added 
manufacturing to promote an economic platform for the Delta region (as 
defined in section 382A) to relieve severe economic conditions.
    ``(b) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $7,000,000 for each of fiscal 
years 2002 through 2007.''.
    (j) Definition of Lower Mississippi.--Section 4(2)(I) of the Delta 
Development Act (42 U.S.C. 3121 note; Public Law 100-460) is amended by 
inserting ``Butler, Conecuh, Escambia, Monroe,'' after ``Russell,''.

[[Page 116 STAT. 375]]

SEC. 6028. NORTHERN GREAT PLAINS REGIONAL AUTHORITY.

    The Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et 
seq.) is amended by adding at the end the following:

         ``Subtitle G--Northern Great Plains Regional Authority

``SEC. 383A. <<NOTE: 7 USC 2009bb.>>  DEFINITIONS.

    ``In this subtitle:
            ``(1) Authority.--The term `Authority' means the Northern 
        Great Plains Regional Authority established by section 383B.
            ``(2) Federal grant program.--The term `Federal grant 
        program' means a Federal grant program to provide assistance 
        in--
                    ``(A) implementing the recommendations of the 
                Northern Great Plains Rural Development Commission 
                established by the Northern Great Plains Rural 
                Development Act (7 U.S.C. 2661 note; Public Law 103-
                318);
                    ``(B) acquiring or developing land;
                    ``(C) constructing or equipping a highway, road, 
                bridge, or facility;
                    ``(D) carrying out other economic development 
                activities; or
                    ``(E) conducting research activities related to the 
                activities described in subparagraphs (A) through (D).
            ``(3) Indian tribe.--The term `Indian tribe' has the meaning 
        given the term in section 4 of the Indian Self-Determination and 
        Education Assistance Act (25 U.S.C. 450b).
            ``(4) Region.--The term `region' means the States of Iowa, 
        Minnesota, Nebraska, North Dakota, and South Dakota.

``SEC. 383B. <<NOTE: 7 USC 2009bb-1.>> NORTHERN GREAT PLAINS REGIONAL 
            AUTHORITY.

    ``(a) Establishment.--
            ``(1) In general.--There is established the Northern Great 
        Plains Regional Authority.
            ``(2) Composition.--The Authority shall be composed of--
                    ``(A) a Federal member, to be appointed by the 
                President, by and with the advice and consent of the 
                Senate;
                    ``(B) the Governor (or a designee of the Governor) 
                of each State in the region that elects to participate 
                in the Authority; and
                    ``(C) a member of an Indian tribe, who shall be a 
                chairperson of an Indian tribe in the region or a 
                designee of such a chairperson, to be appointed by the 
                President, by and with the advice and consent of the 
                Senate.
            ``(3) Cochairpersons.--The Authority shall be headed by--
                    ``(A) the Federal member, who shall serve--
                          ``(i) as the Federal cochairperson; and
                          ``(ii) as a liaison between the Federal 
                      Government and the Authority;
                    ``(B) a State cochairperson, who--
                          ``(i) shall be a Governor of a participating 
                      State in the region; and
                          ``(ii) shall be elected by the State members 
                      for a term of not less than 1 year; and
                    ``(C) the member of an Indian tribe, who shall 
                serve--

[[Page 116 STAT. 376]]

                          ``(i) as the tribal cochairperson; and
                          ``(ii) as a liaison between the governments of 
                      Indian tribes in the region and the Authority.

    ``(b) Alternate Members.--
            ``(1) Alternate <<NOTE: President.>> federal 
        cochairperson.--The President shall appoint an alternate Federal 
        cochairperson.
            ``(2) State alternates.--
                    ``(A) In general.--The State member of a 
                participating State may have a single alternate, who 
                shall be--
                          ``(i) a resident of that State; and
                          ``(ii) appointed by the Governor of the State.
                    ``(B) Quorum.--A State alternate member shall not be 
                counted toward the establishment of a quorum of the 
                members of the Authority in any case in which a quorum 
                of the State members is required to be present.
            ``(3) Alternate <<NOTE: President.>> tribal cochairperson.--
        The President shall appoint an alternate tribal cochairperson, 
        by and with the advice and consent of the Senate.
            ``(4) Delegation of power.--No power or responsibility of 
        the Authority specified in paragraphs (2) and (3) of subsection 
        (c), and no voting right of any member of the Authority, shall 
        be delegated to any person who is not--
                    ``(A) a member of the Authority; or
                    ``(B) entitled to vote in Authority meetings.

    ``(c) Voting.--
            ``(1) In general.--A decision by the Authority shall require 
        a majority vote of the Authority (not including any member 
        representing a State that is delinquent under subsection 
        (g)(2)(D)) to be effective.
            ``(2) Quorum.--A quorum of State members shall be required 
        to be present for the Authority to make any policy decision, 
        including--
                    ``(A) a modification or revision of an Authority 
                policy decision;
                    ``(B) approval of a State or regional development 
                plan; and
                    ``(C) any allocation of funds among the States.
            ``(3) Project and grant proposals.--The approval of project 
        and grant proposals shall be--
                    ``(A) a responsibility of the Authority; and
                    ``(B) conducted in accordance with section 383I.
            ``(4) Voting by alternate members.--An alternate member 
        shall vote in the case of the absence, death, disability, 
        removal, or resignation of the Federal, State, or Indian tribe 
        member for whom the alternate member is an alternate.

    ``(d) Duties.--The Authority shall--
            ``(1) develop, on a continuing basis, comprehensive and 
        coordinated plans and programs to establish priorities and 
        approve grants for the economic development of the region, 
        giving due consideration to other Federal, State, tribal, and 
        local planning and development activities in the region;
            ``(2) not <<NOTE: Deadline.>> later than 220 days after the 
        date of enactment of this subtitle, establish priorities in a 
        development plan for the region (including 5-year regional 
        outcome targets);
            ``(3) assess the needs and assets of the region based on 
        available research, demonstrations, investigations, assessments, 
        and evaluations of the region prepared by Federal,

[[Page 116 STAT. 377]]

        State, tribal, and local agencies, universities, local 
        development districts, and other nonprofit groups;
            ``(4) formulate and recommend to the Governors and 
        legislatures of States that participate in the Authority forms 
        of interstate cooperation;
            ``(5) work with State, tribal, and local agencies in 
        developing appropriate model legislation;
            ``(6)(A) enhance the capacity of, and provide support for, 
        local development districts in the region; or
            ``(B) if no local development district exists in an area in 
        a participating State in the region, foster the creation of a 
        local development district;
            ``(7) encourage private investment in industrial, 
        commercial, and other economic development projects in the 
        region; and
            ``(8) cooperate with and assist State governments with 
        economic development programs of participating States.

    ``(e) Administration.--In carrying out subsection (d), the Authority 
may--
            ``(1) hold such hearings, sit and act at such times and 
        places, take such testimony, receive such evidence, and print or 
        otherwise reproduce and distribute a description of the 
        proceedings and reports on actions by the Authority as the 
        Authority considers appropriate;
            ``(2) authorize, through the Federal, State, or tribal 
        cochairperson or any other member of the Authority designated by 
        the Authority, the administration of oaths if the Authority 
        determines that testimony should be taken or evidence received 
        under oath;
            ``(3) request from any Federal, State, tribal, or local 
        agency such information as may be available to or procurable by 
        the agency that may be of use to the Authority in carrying out 
        the duties of the Authority;
            ``(4) adopt, amend, and repeal bylaws and rules governing 
        the conduct of business and the performance of duties of the 
        Authority;
            ``(5) request the head of any Federal agency to detail to 
        the Authority such personnel as the Authority requires to carry 
        out duties of the Authority, each such detail to be without loss 
        of seniority, pay, or other employee status;
            ``(6) request the head of any State agency, tribal 
        government, or local government to detail to the Authority such 
        personnel as the Authority requires to carry out duties of the 
        Authority, each such detail to be without loss of seniority, 
        pay, or other employee status;
            ``(7) provide for coverage of Authority employees in a 
        suitable retirement and employee benefit system by--
                    ``(A) making arrangements or entering into contracts 
                with any participating State government or tribal 
                government; or
                    ``(B) otherwise providing retirement and other 
                employee benefit coverage;
            ``(8) accept, use, and dispose of gifts or donations of 
        services or real, personal, tangible, or intangible property;
            ``(9) enter into and perform such contracts, leases, 
        cooperative agreements, or other transactions as are necessary 
        to carry

[[Page 116 STAT. 378]]

        out Authority duties, including any contracts, leases, or 
        cooperative agreements with--
                    ``(A) any department, agency, or instrumentality of 
                the United States;
                    ``(B) any State (including a political subdivision, 
                agency, or instrumentality of the State);
                    ``(C) any Indian tribe in the region; or
                    ``(D) any person, firm, association, or corporation; 
                and
            ``(10) establish and maintain a central office and field 
        offices at such locations as the Authority may select.

    ``(f) Federal Agency Cooperation.--A Federal agency shall--
            ``(1) cooperate with the Authority; and
            ``(2) provide, on request of the Federal cochairperson, 
        appropriate assistance in carrying out this subtitle, in 
        accordance with applicable Federal laws (including regulations).

    ``(g) Administrative Expenses.--
            ``(1) Federal share.--The Federal share of the 
        administrative expenses of the Authority shall be--
                    ``(A) for fiscal year 2002, 100 percent;
                    ``(B) for fiscal year 2003, 75 percent; and
                    ``(C) for fiscal year 2004 and each fiscal year 
                thereafter, 50 percent.
            ``(2) Non-federal share.--
                    ``(A) In general.--The non-Federal share of the 
                administrative expenses of the Authority shall be paid 
                by non-Federal sources in the States that participate in 
                the Authority.
                    ``(B) Share paid by each state.--The share of 
                administrative expenses of the Authority to be paid by 
                non-Federal sources in each State shall be determined by 
                the Authority.
                    ``(C) No federal participation.--The Federal 
                cochairperson shall not participate or vote in any 
                decision under subparagraph (B).
                    ``(D) Delinquent states.--If a State is delinquent 
                in payment of the State's share of administrative 
                expenses of the Authority under this subsection--
                          ``(i) no assistance under this subtitle shall 
                      be provided to the State (including assistance to 
                      a political subdivision or a resident of the 
                      State); and
                          ``(ii) no member of the Authority from the 
                      State shall participate or vote in any action by 
                      the Authority.

    ``(h) Compensation.--
            ``(1) Federal and tribal cochairpersons.--The Federal 
        cochairperson and the tribal cochairperson shall be compensated 
        by the Federal Government at the annual rate of basic pay 
        prescribed for level III of the Executive Schedule in subchapter 
        II of chapter 53 of title 5, United States Code.
            ``(2) Alternate federal and tribal cochairpersons.--The 
        alternate Federal cochairperson and the alternate tribal 
        cochairperson--
                    ``(A) shall be compensated by the Federal Government 
                at the annual rate of basic pay prescribed for level V 
                of the Executive Schedule described in paragraph (1); 
                and
                    ``(B) when not actively serving as an alternate, 
                shall perform such functions and duties as are delegated 
                by

[[Page 116 STAT. 379]]

                the Federal cochairperson or the tribal cochairperson, 
                respectively.
            ``(3) State members and alternates.--
                    ``(A) In general.--A State shall compensate each 
                member and alternate representing the State on the 
                Authority at the rate established by State law.
                    ``(B) No additional compensation.--No State member 
                or alternate member shall receive any salary, or any 
                contribution to or supplementation of salary from any 
                source other than the State for services provided by the 
                member or alternate member to the Authority.
            ``(4) Detailed employees.--
                    ``(A) In general.--No person detailed to serve the 
                Authority under subsection (e)(6) shall receive any 
                salary or any contribution to or supplementation of 
                salary for services provided to the Authority from--
                          ``(i) any source other than the State, tribal, 
                      local, or intergovernmental agency from which the 
                      person was detailed; or
                          ``(ii) the Authority.
                    ``(B) Violation.--Any person that violates this 
                paragraph shall be fined not more than $5,000, 
                imprisoned not more than 1 year, or both.
                    ``(C) Applicable law.--The Federal cochairperson, 
                the alternate Federal cochairperson, and any Federal 
                officer or employee detailed to duty on the Authority 
                under subsection (e)(5) shall not be subject to 
                subparagraph (A), but shall remain subject to sections 
                202 through 209 of title 18, United States Code.
            ``(5) Additional personnel.--
                    ``(A) Compensation.--
                          ``(i) In general.--The Authority may appoint 
                      and fix the compensation of an executive director 
                      and such other personnel as are necessary to 
                      enable the Authority to carry out the duties of 
                      the Authority.
                          ``(ii) Exception.--Compensation under clause 
                      (i) shall not exceed the maximum rate for the 
                      Senior Executive Service under section 5382 of 
                      title 5, United States Code, including any 
                      applicable locality-based comparability payment 
                      that may be authorized under section 5304(h)(2)(C) 
                      of that title.
                    ``(B) Executive director.--The executive director 
                shall be responsible for--
                          ``(i) the carrying out of the administrative 
                      duties of the Authority;
                          ``(ii) direction of the Authority staff; and
                          ``(iii) such other duties as the Authority may 
                      assign.
                    ``(C) No federal employee status.--No member, 
                alternate, officer, or employee of the Authority (except 
                the Federal cochairperson of the Authority, the 
                alternate and staff for the Federal cochairperson, and 
                any Federal employee detailed to the Authority under 
                subsection (e)(5)) shall be considered to be a Federal 
                employee for any purpose.

    ``(i) Conflicts of Interest.--

[[Page 116 STAT. 380]]

            ``(1) In general.--Except as provided under paragraph (2), 
        no State member, Indian tribe member, State alternate, officer, 
        or employee of the Authority shall participate personally and 
        substantially as a member, alternate, officer, or employee of 
        the Authority, through decision, approval, disapproval, 
        recommendation, the rendering of advice, investigation, or 
        otherwise, in any proceeding, application, request for a ruling 
        or other determination, contract, claim, controversy, or other 
        matter in which, to knowledge of the member, alternate, officer, 
        or employee--
                    ``(A) the member, alternate, officer, or employee;
                    ``(B) the spouse, minor child, partner, or 
                organization (other than a State or political 
                subdivision of the State or the Indian tribe) of the 
                member, alternate, officer, or employee, in which the 
                member, alternate, officer, or employee is serving as 
                officer, director, trustee, partner, or employee; or
                    ``(C) any person or organization with whom the 
                member, alternate, officer, or employee is negotiating 
                or has any arrangement concerning prospective 
                employment;
        has a financial interest.
            ``(2) Disclosure.--Paragraph (1) shall not apply if the 
        State member, Indian tribe member, alternate, officer, or 
        employee--
                    ``(A) immediately advises the Authority of the 
                nature and circumstances of the proceeding, application, 
                request for a ruling or other determination, contract, 
                claim, controversy, or other particular matter 
                presenting a potential conflict of interest;
                    ``(B) makes full disclosure of the financial 
                interest; and
                    ``(C) before the proceeding concerning the matter 
                presenting the conflict of interest, receives a written 
                determination by the Authority that the interest is not 
                so substantial as to be likely to affect the integrity 
                of the services that the Authority may expect from the 
                State member, Indian tribe member, alternate, officer, 
                or employee.
            ``(3) Violation.--Any person that violates this subsection 
        shall be fined not more than $10,000, imprisoned not more than 2 
        years, or both.

    ``(j) Validity of Contracts, Loans, and Grants.--The Authority may 
declare void any contract, loan, or grant of or by the Authority in 
relation to which the Authority determines that there has been a 
violation of any provision under subsection (h)(4) or subsection (i) of 
this subtitle, or sections 202 through 209 of title 18, United States 
Code.

``SEC. 383C. <<NOTE: 7 USC 2009bb-2.>>  ECONOMIC AND COMMUNITY 
            DEVELOPMENT GRANTS.

    ``(a) In General.--The Authority may approve grants to States, 
Indian tribes, local governments, and public and nonprofit organizations 
for projects, approved in accordance with section 383I--
            ``(1) to develop the transportation and telecommunication 
        infrastructure of the region for the purpose of facilitating 
        economic development in the region (except that grants for this 
        purpose may be made only to States, Indian tribes, local 
        governments, and nonprofit organizations);

[[Page 116 STAT. 381]]

            ``(2) to assist the region in obtaining the job training, 
        employment-related education, and business development (with an 
        emphasis on entrepreneurship) that are needed to build and 
        maintain strong local economies;
            ``(3) to provide assistance to severely distressed and 
        underdeveloped areas that lack financial resources for improving 
        basic public services;
            ``(4) to provide assistance to severely distressed and 
        underdeveloped areas that lack financial resources for equipping 
        industrial parks and related facilities; and
            ``(5) to otherwise achieve the purposes of this subtitle.

    ``(b) Funding.--
            ``(1) In general.--Funds for grants under subsection (a) may 
        be provided--
                    ``(A) entirely from appropriations to carry out this 
                section;
                    ``(B) in combination with funds available under 
                another Federal grant program; or
                    ``(C) from any other source.
            ``(2) Priority of funding.--To best build the foundations 
        for long-term economic development and to complement other 
        Federal, State, and tribal resources in the region, Federal 
        funds available under this subtitle shall be focused on the 
        activities in the following order or priority:
                    ``(A) Basic public infrastructure in distressed 
                counties and isolated areas of distress.
                    ``(B) Transportation and telecommunication 
                infrastructure for the purpose of facilitating economic 
                development in the region.
                    ``(C) Business development, with emphasis on 
                entrepreneurship.
                    ``(D) Job training or employment-related education, 
                with emphasis on use of existing public educational 
                institutions located in the region.

``SEC. 383D. <<NOTE: 7 USC 2009bb-3.>>  SUPPLEMENTS TO FEDERAL GRANT 
            PROGRAMS.

    ``(a) Finding.--Congress finds that certain States and local 
communities of the region, including local development districts, may be 
unable to take maximum advantage of Federal grant programs for which the 
States and communities are eligible because--
            ``(1) they lack the economic resources to provide the 
        required matching share; or
            ``(2) there are insufficient funds available under the 
        applicable Federal law authorizing the Federal grant program to 
        meet pressing needs of the region.

    ``(b) Federal Grant Program Funding.--Notwithstanding any provision 
of law limiting the Federal share, the areas eligible for assistance, or 
the authorizations of appropriations, under any Federal grant program, 
and in accordance with subsection (c), the Authority, with the approval 
of the Federal cochairperson and with respect to a project to be carried 
out in the region--
            ``(1) may increase the Federal share of the costs of a 
        project under any Federal grant program to not more than 90 
        percent (except as provided in section 383F(b)); and
            ``(2) shall use amounts made available to carry out this 
        subtitle to pay the increased Federal share.

    ``(c) Certifications.--

[[Page 116 STAT. 382]]

            ``(1) In general.--In the case of any project for which all 
        or any portion of the basic Federal share of the costs of the 
        project is proposed to be paid under this section, no Federal 
        contribution shall be made until the Federal official 
        administering the Federal law that authorizes the Federal grant 
        program certifies that the project--
                    ``(A) meets (except as provided in subsection (b)) 
                the applicable requirements of the applicable Federal 
                grant program; and
                    ``(B) could be approved for Federal contribution 
                under the Federal grant program if funds were available 
                under the law for the project.
            ``(2) Certification by authority.--
                    ``(A) In general.--The certifications and 
                determinations required to be made by the Authority for 
                approval of projects under this Act in accordance with 
                section 383I--
                          ``(i) shall be controlling; and
                          ``(ii) shall be accepted by the Federal 
                      agencies.
                    ``(B) Acceptance by federal cochairperson.--In the 
                case of any project described in paragraph (1), any 
                finding, report, certification, or documentation 
                required to be submitted with respect to the project to 
                the head of the department, agency, or instrumentality 
                of the Federal Government responsible for the 
                administration of the Federal grant program under which 
                the project is carried out shall be accepted by the 
                Federal cochairperson.

``SEC. 383E. <<NOTE: 7 USC 2009bb-4.>>  LOCAL DEVELOPMENT DISTRICTS AND 
            ORGANIZATIONS AND NORTHERN GREAT PLAINS INC.

    ``(a) Definition of Local Development District.--In this section, 
the term `local development district' means an entity--
            ``(1) that--
                    ``(A) is a planning district in existence on the 
                date of enactment of this subtitle that is recognized by 
                the Economic Development Administration of the 
                Department of Commerce; or
                    ``(B) is--
                          ``(i) organized and operated in a manner that 
                      ensures broad-based community participation and an 
                      effective opportunity for other nonprofit groups 
                      to contribute to the development and 
                      implementation of programs in the region;
                          ``(ii) governed by a policy board with at 
                      least a simple majority of members consisting of--
                                    ``(I) elected officials or employees 
                                of a general purpose unit of local 
                                government who have been appointed to 
                                represent the government; or
                                    ``(II) individuals appointed by the 
                                general purpose unit of local government 
                                to represent the government;
                          ``(iii) certified to the Authority as having a 
                      charter or authority that includes the economic 
                      development of counties or parts of counties or 
                      other political subdivisions within the region--
                                    ``(I) by the Governor of each State 
                                in which the entity is located; or

[[Page 116 STAT. 383]]

                                    ``(II) by the State officer 
                                designated by the appropriate State law 
                                to make the certification; and
                          ``(iv)(I) a nonprofit incorporated body 
                      organized or chartered under the law of the State 
                      in which the entity is located;
                          ``(II) a nonprofit agency or instrumentality 
                      of a State or local government;
                          ``(III) a public organization established 
                      before the date of enactment of this subtitle 
                      under State law for creation of multi-
                      jurisdictional, area-wide planning organizations; 
                      or
                          ``(IV) a nonprofit association or combination 
                      of bodies, agencies, and instrumentalities 
                      described in subclauses (I) through (III); and
            ``(2) that has not, as certified by the Federal 
        cochairperson--
                    ``(A) inappropriately used Federal grant funds from 
                any Federal source; or
                    ``(B) appointed an officer who, during the period in 
                which another entity inappropriately used Federal grant 
                funds from any Federal source, was an officer of the 
                other entity.

    ``(b) Grants to Local Development Districts.--
            ``(1) In general.--The Authority may make grants for 
        administrative expenses under this section.
            ``(2) Conditions for grants.--
                    ``(A) Maximum amount.--The amount of any grant 
                awarded under paragraph (1) shall not exceed 80 percent 
                of the administrative expenses of the local development 
                district receiving the grant.
                    ``(B) Maximum period.--No grant described in 
                paragraph (1) shall be awarded to a State agency 
                certified as a local development district for a period 
                greater than 3 years.
                    ``(C) Local share.--The contributions of a local 
                development district for administrative expenses may be 
                in cash or in kind, fairly evaluated, including space, 
                equipment, and services.

    ``(c) Duties of Local Development Districts.--A local development 
district shall--
            ``(1) operate as a lead organization serving multicounty 
        areas in the region at the local level; and
            ``(2) serve as a liaison between State, tribal, and local 
        governments, nonprofit organizations (including community-based 
        groups and educational institutions), the business community, 
        and citizens that--
                    ``(A) are involved in multijurisdictional planning;
                    ``(B) provide technical assistance to local 
                jurisdictions and potential grantees; and
                    ``(C) provide leadership and civic development 
                assistance.

    ``(d) Northern Great Plains Inc.--Northern Great Plains Inc., a 
nonprofit corporation incorporated in the State of Minnesota to 
implement the recommendations of the Northern Great Plains Rural 
Development Commission established by the Northern Great

[[Page 116 STAT. 384]]

Plains Rural Development Act (7 U.S.C. 2661 note; Public Law 103-318)--
            ``(1) shall serve as an independent, primary resource for 
        the Authority on issues of concern to the region;
            ``(2) shall advise the Authority on development of 
        international trade;
            ``(3) may provide research, education, training, and other 
        support to the Authority; and
            ``(4) may carry out other activities on its own behalf or on 
        behalf of other entities.

``SEC. 383F. <<NOTE: 7 USC 2009bb-5.>>  DISTRESSED COUNTIES AND AREAS 
            AND NONDISTRESSED COUNTIES.

    ``(a) Designations.--Not <<NOTE: Deadline.>> later than 90 days 
after the date of enactment of this subtitle, and annually thereafter, 
the Authority, in accordance with such criteria as the Authority may 
establish, shall designate--
            ``(1) as distressed counties, counties in the region that 
        are the most severely and persistently distressed and 
        underdeveloped and have high rates of poverty, unemployment, or 
        outmigration;
            ``(2) as nondistressed counties, counties in the region that 
        are not designated as distressed counties under paragraph (1); 
        and
            ``(3) as isolated areas of distress, areas located in 
        nondistressed counties (as designated under paragraph (2)) that 
        have high rates of poverty, unemployment, or outmigration.

    ``(b) Distressed Counties.--
            ``(1) In general.--The Authority shall allocate at least 75 
        percent of the appropriations made available under section 383M 
        for programs and projects designed to serve the needs of 
        distressed counties and isolated areas of distress in the 
        region.
            ``(2) Funding limitations.--The funding limitations under 
        section 383D(b) shall not apply to a project to provide 
        transportation or telecommunication or basic public services to 
        residents of 1 or more distressed counties or isolated areas of 
        distress in the region.

    ``(c) Nondistressed Counties.--
            ``(1) In general.--Except as provided in paragraph (2), no 
        funds shall be provided under this subtitle for a project 
        located in a county designated as a nondistressed county under 
        subsection (a)(2).
            ``(2) Exceptions.--
                    ``(A) In general.--The funding prohibition under 
                paragraph (1) shall not apply to grants to fund the 
                administrative expenses of local development districts 
                under section 383E(b).
                    ``(B) Multicounty projects.--The Authority may waive 
                the application of the funding prohibition under 
                paragraph (1) to--
                          ``(i) a multicounty project that includes 
                      participation by a nondistressed county; or
                          ``(ii) any other type of project;
                if the Authority determines that the project could bring 
                significant benefits to areas of the region outside a 
                nondistressed county.

[[Page 116 STAT. 385]]

                    ``(C) Isolated areas of distress.--For a designation 
                of an isolated area of distress for assistance to be 
                effective, the designation shall be supported--
                          ``(i) by the most recent Federal data 
                      available; or
                          ``(ii) if no recent Federal data are 
                      available, by the most recent data available 
                      through the government of the State in which the 
                      isolated area of distress is located.

    ``(d) Transportation, Telecommunication, and Basic Public 
Infrastructure.--The Authority shall allocate at least 50 percent of any 
funds made available under section 383M for transportation, 
telecommunication, and basic public infrastructure projects authorized 
under paragraphs (1) and (3) of section 383C(a).

``SEC. 383G. <<NOTE: 7 USC 2009bb-6.>>  DEVELOPMENT PLANNING PROCESS.

    ``(a) State Development Plan.--In accordance with policies 
established by the Authority, each State member shall submit a 
development plan for the area of the region represented by the State 
member.
    ``(b) Content of Plan.--A State development plan submitted under 
subsection (a) shall reflect the goals, objectives, and priorities 
identified in the regional development plan developed under section 
383B(d)(2).
    ``(c) Consultation With Interested Local Parties.--In carrying out 
the development planning process (including the selection of programs 
and projects for assistance), a State may--
            ``(1) consult with--
                    ``(A) local development districts; and
                    ``(B) local units of government; and
            ``(2) take into consideration the goals, objectives, 
        priorities, and recommendations of the entities described in 
        paragraph (1).

    ``(d) Public Participation.--
            ``(1) In general.--The Authority and applicable State and 
        local development districts shall encourage and assist, to the 
        maximum extent practicable, public participation in the 
        development, revision, and implementation of all plans and 
        programs under this subtitle.
            ``(2) Regulations.--The Authority shall develop guidelines 
        for providing public participation described in paragraph (1), 
        including public hearings.

``SEC. 383H. <<NOTE: 7 USC 2009bb-7.>>  PROGRAM DEVELOPMENT CRITERIA.

    ``(a) In General.--In considering programs and projects to be 
provided assistance under this subtitle, and in establishing a priority 
ranking of the requests for assistance provided to the Authority, the 
Authority shall follow procedures that ensure, to the maximum extent 
practicable, consideration of--
            ``(1) the relationship of the project or class of projects 
        to overall regional development;
            ``(2) the per capita income and poverty and unemployment and 
        outmigration rates in an area;
            ``(3) the financial resources available to the applicants 
        for assistance seeking to carry out the project, with emphasis 
        on ensuring that projects are adequately financed to maximize 
        the probability of successful economic development;

[[Page 116 STAT. 386]]

            ``(4) the importance of the project or class of projects in 
        relation to other projects or classes of projects that may be in 
        competition for the same funds;
            ``(5) the prospects that the project for which assistance is 
        sought will improve, on a continuing rather than a temporary 
        basis, the opportunities for employment, the average level of 
        income, or the economic development of the area to be served by 
        the project; and
            ``(6) the extent to which the project design provides for 
        detailed outcome measurements by which grant expenditures and 
        the results of the expenditures may be evaluated.

    ``(b) No Relocation Assistance.--No financial assistance authorized 
by this subtitle shall be used to assist a person or entity in 
relocating from one area to another, except that financial assistance 
may be used as otherwise authorized by this title to attract businesses 
from outside the region to the region.
    ``(c) Maintenance of Effort.--Funds may be provided for a program or 
project in a State under this subtitle only if the Authority determines 
that the level of Federal or State financial assistance provided under a 
law other than this subtitle, for the same type of program or project in 
the same area of the State within the region, will not be reduced as a 
result of funds made available by this subtitle.

``SEC. 383I. <<NOTE: 7 USC 2009bb-8.>>  APPROVAL OF DEVELOPMENT PLANS 
            AND PROJECTS.

    ``(a) In General.--A State or regional development plan or any 
multistate subregional plan that is proposed for development under this 
subtitle shall be reviewed by the Authority.
    ``(b) Evaluation by State Member.--An application for a grant or any 
other assistance for a project under this subtitle shall be made through 
and evaluated for approval by the State member of the Authority 
representing the applicant.
    ``(c) Certification.--An application for a grant or other assistance 
for a project shall be approved only on certification by the State 
member that the application for the project--
            ``(1) describes ways in which the project complies with any 
        applicable State development plan;
            ``(2) meets applicable criteria under section 383H;
            ``(3) provides adequate assurance that the proposed project 
        will be properly administered, operated, and maintained; and
            ``(4) otherwise meets the requirements of this subtitle.

    ``(d) Votes for Decisions.--On certification by a State member of 
the Authority of an application for a grant or other assistance for a 
specific project under this section, an affirmative vote of the 
Authority under section 383B(c) shall be required for approval of the 
application.

``SEC. 383J. <<NOTE: 7 USC 2009bb-9.>> CONSENT OF STATES.

    ``Nothing in this subtitle requires any State to engage in or accept 
any program under this subtitle without the consent of the State.

``SEC. 383K. <<NOTE: 7 USC 2009bb-10.>> RECORDS.

    ``(a) Records of the Authority.--
            ``(1) In general.--The Authority shall maintain accurate and 
        complete records of all transactions and activities of the 
        Authority.

[[Page 116 STAT. 387]]

            ``(2) Availability.--All records of the Authority shall be 
        available for audit and examination by the Comptroller General 
        of the United States and the Inspector General of the Department 
        of Agriculture (including authorized representatives of the 
        Comptroller General and the Inspector General of the Department 
        of Agriculture).

    ``(b) Records of Recipients of Federal Assistance.--
            ``(1) In general.--A recipient of Federal funds under this 
        subtitle shall, as required by the Authority, maintain accurate 
        and complete records of transactions and activities financed 
        with Federal funds and report to the Authority on the 
        transactions and activities to the Authority.
            ``(2) Availability.--All records required under paragraph 
        (1) shall be available for audit by the Comptroller General of 
        the United States, the Inspector General of the Department of 
        Agriculture, and the Authority (including authorized 
        representatives of the Comptroller General, the Inspector 
        General of the Department of Agriculture, and the Authority).

    ``(c) Annual Audit.--The Inspector General of the Department of 
Agriculture shall audit the activities, transactions, and records of the 
Authority on an annual basis.

``SEC. 383L. <<NOTE: Deadline. 7 USC 2009bb-11.>>  ANNUAL REPORT.

    ``Not later than 180 days after the end of each fiscal year, the 
Authority shall submit to the President and to Congress a report 
describing the activities carried out under this subtitle.

``SEC. 383M. <<NOTE: 7 USC 2009bb-12.>> AUTHORIZATION OF APPROPRIATIONS.

    ``(a) In General.--There is authorized to be appropriated to the 
Authority to carry out this subtitle $30,000,000 for each of fiscal 
years 2002 through 2007, to remain available until expended.
    ``(b) Administrative Expenses.--Not more than 5 percent of the 
amount appropriated under subsection (a) for a fiscal year shall be used 
for administrative expenses of the Authority.
    ``(c) Minimum State Share of Grants.--Notwithstanding any other 
provision of this subtitle, for any fiscal year, the aggregate amount of 
grants received by a State and all persons or entities in the State 
under this subtitle shall be not less than \1/3\ of the product obtained 
by multiplying--
            ``(1) the aggregate amount of grants under this subtitle for 
        the fiscal year; and
            ``(2) the ratio that--
                    ``(A) the population of the State (as determined by 
                the Secretary of Commerce based on the most recent 
                decennial census for which data are available); bears to
                    ``(B) the population of the region (as so 
                determined).

``SEC. 383N. <<NOTE: 7 USC 2009bb-13.>> TERMINATION OF AUTHORITY.

    ``The authority provided by this subtitle terminates effective 
October 1, 2007.''.

SEC. 6029. RURAL BUSINESS INVESTMENT PROGRAM.

    The Consolidated Farm and Rural Development Act (as amended by 
section 6028) is amended by adding at the end the following:

[[Page 116 STAT. 388]]

             ``Subtitle H--Rural Business Investment Program

``SEC. 384A. <<NOTE: 7 USC 2009cc.>> DEFINITIONS.

    ``In this subtitle:
            ``(1) Articles.--The term `articles' means articles of 
        incorporation for an incorporated body or the functional 
        equivalent or other similar documents specified by the Secretary 
        for other business entities.
            ``(2) Developmental venture capital.--The term 
        `developmental venture capital' means capital in the form of 
        equity capital investments in rural business investment 
        companies with an objective of fostering economic development in 
        rural areas.
            ``(3) Employee welfare benefit plan; pension plan.--
                    ``(A) In general.--The terms `employee welfare 
                benefit plan' and `pension plan' have the meanings given 
                the terms in section 3 of the Employee Retirement Income 
                Security Act of 1974 (29 U.S.C. 1002).
                    ``(B) Inclusions.--The terms `employee welfare 
                benefit plan' and `pension plan' include--
                          ``(i) public and private pension or retirement 
                      plans subject to this subtitle; and
                          ``(ii) similar plans not covered by this 
                      subtitle that have been established, and that are 
                      maintained, by the Federal Government or any State 
                      (including by a political subdivision, agency, or 
                      instrumentality of the Federal Government or a 
                      State) for the benefit of employees.
            ``(4) Equity capital.--The term `equity capital' means 
        common or preferred stock or a similar instrument, including 
        subordinated debt with equity features.
            ``(5) Leverage.--The term `leverage' includes--
                    ``(A) debentures purchased or guaranteed by the 
                Secretary;
                    ``(B) participating securities purchased or 
                guaranteed by the Secretary; and
                    ``(C) preferred securities outstanding as of the 
                date of enactment of this subtitle.
            ``(6) License.--The term `license' means a license issued by 
        the Secretary as provided in section 384D(e).
            ``(7) Limited liability company.--The term `limited 
        liability company' means a business entity that is organized and 
        operating in accordance with a State limited liability company 
        law approved by the Secretary.
            ``(8) Member.--The term `member' means, with respect to a 
        rural business investment company that is a limited liability 
        company, a holder of an ownership interest or a person otherwise 
        admitted to membership in the limited liability company.
            ``(9) Operational assistance.--The term `operational 
        assistance' means management, marketing, and other technical 
        assistance that assists a rural business concern with business 
        development.
            ``(10) Participation agreement.--The term `participation 
        agreement' means an agreement, between the Secretary and a rural 
        business investment company granted final approval

[[Page 116 STAT. 389]]

        under section 384D(e), that requires the rural business 
        investment company to make investments in smaller enterprises in 
        rural areas.
            ``(11) Private capital.--
                    ``(A) In general.--The term `private capital' means 
                the total of--
                          ``(i)(I) the paid-in capital and paid-in 
                      surplus of a corporate rural business investment 
                      company;
                          ``(II) the contributed capital of the partners 
                      of a partnership rural business investment 
                      company; or
                          ``(III) the equity investment of the members 
                      of a limited liability company rural business 
                      investment company; and
                          ``(ii) unfunded binding commitments from 
                      investors that meet criteria established by the 
                      Secretary to contribute capital to the rural 
                      business investment company, except that--
                                    ``(I) unfunded commitments may be 
                                counted as private capital for purposes 
                                of approval by the Secretary of any 
                                request for leverage; but
                                    ``(II) leverage shall not be funded 
                                based on the commitments.
                    ``(B) Exclusions.--The term `private capital' does 
                not include--
                          ``(i) any funds borrowed by a rural business 
                      investment company from any source;
                          ``(ii) any funds obtained through the issuance 
                      of leverage; or
                          ``(iii) any funds obtained directly or 
                      indirectly from the Federal Government or any 
                      State (including by a political subdivision, 
                      agency, or instrumentality of the Federal 
                      Government or a State), except for--
                                    ``(I) funds obtained from the 
                                business revenues (excluding any 
                                governmental appropriation) of any 
                                federally chartered or government-
                                sponsored enterprise established prior 
                                to the date of enactment of this 
                                subtitle;
                                    ``(II) funds invested by an employee 
                                welfare benefit plan or pension plan; 
                                and
                                    ``(III) any qualified nonprivate 
                                funds (if the investors of the qualified 
                                nonprivate funds do not control, 
                                directly or indirectly, the management, 
                                board of directors, general partners, or 
                                members of the rural business investment 
                                company).
            ``(12) Qualified nonprivate funds.--The term `qualified 
        nonprivate funds' means any--
                    ``(A) funds directly or indirectly invested in any 
                applicant or rural business investment company on or 
                before the date of enactment of this subtitle, by any 
                Federal agency, other than the Department of 
                Agriculture, under a provision of law explicitly 
                mandating the inclusion of those funds in the definition 
                of the term `private capital'; and
                    ``(B) funds invested in any applicant or rural 
                business investment company by 1 or more entities of any 
                State (including by a political subdivision, agency, or 
                instrumentality of the State and including any guarantee 
                extended

[[Page 116 STAT. 390]]

                by those entities) in an aggregate amount that does not 
                exceed 33 percent of the private capital of the 
                applicant or rural business investment company.
            ``(13) Rural business concern.--The term `rural business 
        concern' means--
                    ``(A) a public, private, or cooperative for-profit 
                or nonprofit organization;
                    ``(B) a for-profit or nonprofit business controlled 
                by an Indian tribe on a Federal or State reservation or 
                other federally recognized Indian tribal group; or
                    ``(C) any other person or entity;
        that primarily operates in a rural area, as determined by the 
        Secretary.
            ``(14) Rural business investment company.--The term `rural 
        business investment company' means a company that--
                    ``(A) has been granted final approval by the 
                Secretary under section 384D(e); and
                    ``(B) has entered into a participation agreement 
                with the Secretary.
            ``(15) Smaller enterprise.--The term `smaller enterprise' 
        means any rural business concern that, together with its 
        affiliates--
                    ``(A) has--
                          ``(i) a net financial worth of not more than 
                      $6,000,000, as of the date on which assistance is 
                      provided under this subtitle to the rural business 
                      concern; and
                          ``(ii) an average net income for the 2-year 
                      period preceding the date on which assistance is 
                      provided under this subtitle to the rural business 
                      concern, of not more than $2,000,000, after 
                      Federal income taxes (excluding any carryover 
                      losses), except that, for purposes of this clause, 
                      if the rural business concern is not required by 
                      law to pay Federal income taxes at the enterprise 
                      level, but is required to pass income through to 
                      the shareholders, partners, beneficiaries, or 
                      other equitable owners of the business concern, 
                      the net income of the business concern shall be 
                      determined by allowing a deduction in an amount 
                      equal to the total of--
                                    ``(I) if the rural business concern 
                                is not required by law to pay State (and 
                                local, if any) income taxes at the 
                                enterprise level, the net income 
                                (determined without regard to this 
                                clause), multiplied by the marginal 
                                State income tax rate (or by the 
                                combined State and local income tax 
                                rates, as applicable) that would have 
                                applied if the business concern were a 
                                corporation; and
                                    ``(II) the net income (so 
                                determined) less any deduction for State 
                                (and local) income taxes calculated 
                                under subclause (I), multiplied by the 
                                marginal Federal income tax rate that 
                                would have applied if the rural business 
                                concern were a corporation; or
                    ``(B) satisfies the standard industrial 
                classification size standards established by the 
                Administrator of the Small

[[Page 116 STAT. 391]]

                Business Administration for the industry in which the 
                rural business concern is primarily engaged.

``SEC. 384B. <<NOTE: 7 USC 2009cc-1.>>  PURPOSES.

    ``The purposes of the Rural Business Investment Program established 
under this subtitle are--
            ``(1) to promote economic development and the creation of 
        wealth and job opportunities in rural areas and among 
        individuals living in those areas by encouraging developmental 
        venture capital investments in smaller enterprises primarily 
        located in rural areas; and
            ``(2) to establish a developmental venture capital program, 
        with the mission of addressing the unmet equity investment needs 
        of small enterprises located in rural areas, by authorizing the 
        Secretary--
                    ``(A) to enter into participation agreements with 
                rural business investment companies;
                    ``(B) to guarantee debentures of rural business 
                investment companies to enable each rural business 
                investment company to make developmental venture capital 
                investments in smaller enterprises in rural areas; and
                    ``(C) to make grants to rural business investment 
                companies, and to other entities, for the purpose of 
                providing operational assistance to smaller enterprises 
                financed, or expected to be financed, by rural business 
                investment companies.

``SEC. 384C. <<NOTE: 7 USC 2009cc-2.>>  ESTABLISHMENT.

    ``In accordance with this subtitle, the Secretary shall establish a 
Rural Business Investment Program, under which the Secretary may--
            ``(1) enter into participation agreements with companies 
        granted final approval under section 384D(e) for the purposes 
        set forth in section 384B;
            ``(2) guarantee the debentures issued by rural business 
        investment companies as provided in section 384E; and
            ``(3) make grants to rural business investment companies, 
        and to other entities, under section 384H.

``SEC. 384D. <<NOTE: 7 USC 2009cc-3.>>  SELECTION OF RURAL BUSINESS 
            INVESTMENT COMPANIES.

    ``(a) Eligibility.--A company shall be eligible to apply to 
participate, as a rural business investment company, in the program 
established under this subtitle if--
            ``(1) the company is a newly formed for-profit entity or a 
        newly formed for-profit subsidiary of such an entity;
            ``(2) the company has a management team with experience in 
        community development financing or relevant venture capital 
        financing; and
            ``(3) the company will invest in enterprises that will 
        create wealth and job opportunities in rural areas, with an 
        emphasis on smaller enterprises.

    ``(b) Application.--To participate, as a rural business investment 
company, in the program established under this subtitle, a company 
meeting the eligibility requirements of subsection (a) shall submit an 
application to the Secretary that includes--

[[Page 116 STAT. 392]]

            ``(1) a business plan describing how the company intends to 
        make successful developmental venture capital investments in 
        identified rural areas;
            ``(2) information regarding the community development 
        finance or relevant venture capital qualifications and general 
        reputation of the management of the company;
            ``(3) a description of how the company intends to work with 
        community-based organizations and local entities (including 
        local economic development companies, local lenders, and local 
        investors) and to seek to address the unmet equity capital needs 
        of the communities served;
            ``(4) a proposal describing how the company intends to use 
        the grant funds provided under this subtitle to provide 
        operational assistance to smaller enterprises financed by the 
        company, including information regarding whether the company 
        intends to use licensed professionals, as necessary, on the 
        staff of the company or from an outside entity;
            ``(5) with respect to binding commitments to be made to the 
        company under this subtitle, an estimate of the ratio of cash to 
        in-kind contributions;
            ``(6) a description of the criteria to be used to evaluate 
        whether and to what extent the company meets the purposes of the 
        program established under this subtitle;
            ``(7) information regarding the management and financial 
        strength of any parent firm, affiliated firm, or any other firm 
        essential to the success of the business plan of the company; 
        and
            ``(8) such other information as the Secretary may require.

    ``(c) Status.--Not <<NOTE: Deadline. Reports.>> later than 90 days 
after the initial receipt by the Secretary of an application under this 
section, the Secretary shall provide to the applicant a written report 
describing the status of the application and any requirements remaining 
for completion of the application.

    ``(d) Matters Considered.--In reviewing and processing any 
application under this section, the Secretary--
            ``(1) shall determine whether--
                    ``(A) the applicant meets the requirements of 
                subsection (e); and
                    ``(B) the management of the applicant is qualified 
                and has the knowledge, experience, and capability 
                necessary to comply with this subtitle;
            ``(2) shall take into consideration--
                    ``(A) the need for and availability of financing for 
                rural business concerns in the geographic area in which 
                the applicant is to commence business;
                    ``(B) the general business reputation of the owners 
                and management of the applicant; and
                    ``(C) the probability of successful operations of 
                the applicant, including adequate profitability and 
                financial soundness; and
            ``(3) shall not take into consideration any projected 
        shortage or unavailability of grant funds or leverage.

    ``(e) Approval; License.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        Secretary may approve an applicant to operate as a rural 
        business investment company under this subtitle and license the 
        applicant as a rural business investment company, if--

[[Page 116 STAT. 393]]

                    ``(A) the Secretary determines that the application 
                satisfies the requirements of subsection (b);
                    ``(B) the area in which the rural business 
                investment company is to conduct its operations, and 
                establishment of branch offices or agencies (if 
                authorized by the articles), are approved by the 
                Secretary; and
                    ``(C) the applicant enters into a participation 
                agreement with the Secretary.
            ``(2) Capital requirements.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this subtitle, the Secretary may approve an 
                applicant to operate as a rural business investment 
                company under this subtitle and designate the applicant 
                as a rural business investment company, if the Secretary 
                determines that the applicant--
                          ``(i) has private capital of more than 
                      $2,500,000;
                          ``(ii) would otherwise be approved under this 
                      subtitle, except that the applicant does not 
                      satisfy the requirements of section 384I(c); and
                          ``(iii) has a viable business plan that--
                                    ``(I) reasonably projects profitable 
                                operations; and
                                    ``(II) has a reasonable timetable 
                                for achieving a level of private capital 
                                that satisfies the requirements of 
                                section 384I(c).
                    ``(B) Leverage.--An applicant approved under 
                subparagraph (A) shall not be eligible to receive 
                leverage under this subtitle until the applicant 
                satisfies the requirements of section 384I(c).
                    ``(C) Grants.--An applicant approved under 
                subparagraph (A) shall be eligible for grants under 
                section 384H in proportion to the private capital of the 
                applicant, as determined by the Secretary.

``SEC. 384E. <<NOTE: 7 USC 2009cc-4.>>  DEBENTURES.

    ``(a) In General.--The Secretary may guarantee the timely payment of 
principal and interest, as scheduled, on debentures issued by any rural 
business investment company.
    ``(b) Terms and Conditions.--The Secretary may make guarantees under 
this section on such terms and conditions as the Secretary considers 
appropriate, except that the term of any debenture guaranteed under this 
section shall not exceed 15 years.
    ``(c) Full <<NOTE: Applicability.>>  Faith and Credit of the United 
States.--Section 381H(i) shall apply to any guarantee under this 
section.

    ``(d) Maximum Guarantee.--Under this section, the Secretary may--
            ``(1) guarantee the debentures issued by a rural business 
        investment company only to the extent that the total face amount 
        of outstanding guaranteed debentures of the rural business 
        investment company does not exceed the lesser of--
                    ``(A) 300 percent of the private capital of the 
                rural business investment company; or
                    ``(B) $105,000,000; and
            ``(2) provide for the use of discounted debentures.

``SEC. 384F. <<NOTE: 7 USC 2009cc-5.>>  ISSUANCE AND GUARANTEE OF TRUST 
            CERTIFICATES.

    ``(a) Issuance.--The Secretary may issue trust certificates 
representing ownership of all or a fractional part of debentures issued

[[Page 116 STAT. 394]]

by a rural business investment company and guaranteed by the Secretary 
under this subtitle, if the certificates are based on and backed by a 
trust or pool approved by the Secretary and composed solely of 
guaranteed debentures.
    ``(b) Guarantee.--
            ``(1) In general.--The Secretary may, under such terms and 
        conditions as the Secretary considers appropriate, guarantee the 
        timely payment of the principal of and interest on trust 
        certificates issued by the Secretary or agents of the Secretary 
        for purposes of this section.
            ``(2) Limitation.--Each guarantee under this subsection 
        shall be limited to the extent of principal and interest on the 
        guaranteed debentures that compose the trust or pool.
            ``(3) Prepayment or default.--
                    ``(A) In general.--In the event a debenture in a 
                trust or pool is prepaid, or in the event of default of 
                such a debenture, the guarantee of timely payment of 
                principal and interest on the trust certificates shall 
                be reduced in proportion to the amount of principal and 
                interest the prepaid debenture represents in the trust 
                or pool.
                    ``(B) Interest.--Interest on prepaid or defaulted 
                debentures shall accrue and be guaranteed by the 
                Secretary only through the date of payment of the 
                guarantee.
                    ``(C) Redemption.--At any time during its term, a 
                trust certificate may be called for redemption due to 
                prepayment or default of all debentures.

    ``(c) Full <<NOTE: Applicability.>> Faith and Credit of the United 
States.--Section 381H(i) shall apply to any guarantee of a trust 
certificate issued by the Secretary under this section.

    ``(d) Subrogation and Ownership Rights.--
            ``(1) Subrogation.--If the Secretary pays a claim under a 
        guarantee issued under this section, the claim shall be 
        subrogated fully to the rights satisfied by the payment.
            ``(2) Ownership rights.--No Federal, State, or local law 
        shall preclude or limit the exercise by the Secretary of the 
        ownership rights of the Secretary in a debenture residing in a 
        trust or pool against which 1 or more trust certificates are 
        issued under this section.

    ``(e) Management and Administration.--
            ``(1) Registration.--The Secretary shall provide for a 
        central registration of all trust certificates issued under this 
        section.
            ``(2) Creation of pools.--The Secretary may--
                    ``(A) maintain such commercial bank accounts or 
                investments in obligations of the United States as may 
                be necessary to facilitate the creation of trusts or 
                pools backed by debentures guaranteed under this 
                subtitle; and
                    ``(B) issue trust certificates to facilitate the 
                creation of those trusts or pools.
            ``(3) Fidelity bond or insurance requirement.--Any agent 
        performing functions on behalf of the Secretary under this 
        paragraph shall provide a fidelity bond or insurance in such 
        amount as the Secretary considers to be necessary to fully 
        protect the interests of the United States.
            ``(4) Regulation of brokers and dealers.--The Secretary may 
        regulate brokers and dealers in trust certificates issued under 
        this section.

[[Page 116 STAT. 395]]

            ``(5) Electronic registration.--Nothing in this subsection 
        prohibits the use of a book-entry or other electronic form of 
        registration for trust certificates issued under this section.

``SEC. 384G. <<NOTE: 7 USC 2009cc-6.>>  FEES.

    ``(a) In General.--The Secretary may charge such fees as the 
Secretary considers appropriate with respect to any guarantee or grant 
issued under this subtitle.
    ``(b) Trust Certificate.--Notwithstanding subsection (a), the 
Secretary shall not collect a fee for any guarantee of a trust 
certificate under section 384F, except that any agent of the Secretary 
may collect a fee approved by the Secretary for the functions described 
in section 384F(e)(2).
    ``(c) License.--
            ``(1) In general.--The Secretary may prescribe fees to be 
        paid by each applicant for a license to operate as a rural 
        business investment company under this subtitle.
            ``(2) Use of amounts.--Fees collected under this 
        subsection--
                    ``(A) shall be deposited in the account for salaries 
                and expenses of the Secretary; and
                    ``(B) are authorized to be appropriated solely to 
                cover the costs of licensing examinations.

``SEC. 384H. <<NOTE: 7 USC 2009cc-7.>> OPERATIONAL ASSISTANCE GRANTS.

    ``(a) In General.--In accordance with this section, the Secretary 
may make grants to rural business investment companies and to other 
entities, as authorized by this subtitle, to provide operational 
assistance to smaller enterprises financed, or expected to be financed, 
by the entities.
    ``(b) Terms.--Grants made under this section shall be made over a 
multiyear period (not to exceed 10 years) under such terms as the 
Secretary may require.
    ``(c) Use of Funds.--The proceeds of a grant made under this section 
may be used by the rural business investment company receiving the grant 
only to provide operational assistance in connection with an equity or 
prospective equity investment in a business located in a rural area.
    ``(d) Submission of Plans.--A rural business investment company 
shall be eligible for a grant under this section only if the rural 
business investment company submits to the Secretary, in such form and 
manner as the Secretary may require, a plan for use of the grant.
    ``(e) Grant Amount.--
            ``(1) Rural business investment companies.--The amount of a 
        grant made under this section to a rural business investment 
        company shall be equal to the lesser of--
                    ``(A) 10 percent of the private capital raised by 
                the rural business investment company; or
                    ``(B) $1,000,000.
            ``(2) Other entities.--The amount of a grant made under this 
        section to any entity other than a rural business investment 
        company shall be equal to the resources (in cash or in kind) 
        raised by the entity in accordance with the requirements 
        applicable to rural business investment companies under this 
        subtitle.

[[Page 116 STAT. 396]]

``SEC. 384I. <<NOTE: 7 USC 2009cc-8.>>  RURAL BUSINESS INVESTMENT 
            COMPANIES.

    ``(a) Organization.--For the purpose of this subtitle, a rural 
business investment company shall--
            ``(1) be an incorporated body, a limited liability company, 
        or a limited partnership organized and chartered or otherwise 
        existing under State law solely for the purpose of performing 
        the functions and conducting the activities authorized by this 
        subtitle;
            ``(2)(A) if incorporated, have succession for a period of 
        not less than 30 years unless earlier dissolved by the 
        shareholders of the rural business investment company; and
            ``(B) if a limited partnership or a limited liability 
        company, have succession for a period of not less than 10 years; 
        and
            ``(3) possess the powers reasonably necessary to perform the 
        functions and conduct the activities.

    ``(b) Articles.--The articles of any rural business investment 
company--
            ``(1) shall specify in general terms--
                    ``(A) the purposes for which the rural business 
                investment company is formed;
                    ``(B) the name of the rural business investment 
                company;
                    ``(C) the area or areas in which the operations of 
                the rural business investment company are to be carried 
                out;
                    ``(D) the place where the principal office of the 
                rural business investment company is to be located; and
                    ``(E) the amount and classes of the shares of 
                capital stock of the rural business investment company;
            ``(2) may contain any other provisions consistent with this 
        subtitle that the rural business investment company may 
        determine appropriate to adopt for the regulation of the 
        business of the rural business investment company and the 
        conduct of the affairs of the rural business investment company; 
        and
            ``(3) shall be subject to the approval of the Secretary.

    ``(c) Capital Requirements.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        private capital of each rural business investment company shall 
        be not less than--
                    ``(A) $5,000,000; or
                    ``(B) $10,000,000, with respect to each rural 
                business investment company authorized or seeking 
                authority to issue participating securities to be 
                purchased or guaranteed by the Secretary under this 
                subtitle.
            ``(2) Exception.--The Secretary may, in the discretion of 
        the Secretary and based on a showing of special circumstances 
        and good cause, permit the private capital of a rural business 
        investment company described in paragraph (1)(B) to be less than 
        $10,000,000, but not less than $5,000,000, if the Secretary 
        determines that the action would not create or otherwise 
        contribute to an unreasonable risk of default or loss to the 
        Federal Government.
            ``(3) Adequacy.--In addition to the requirements of 
        paragraph (1), the Secretary shall--
                    ``(A) determine whether the private capital of each 
                rural business investment company is adequate to ensure 
                a reasonable prospect that the rural business investment

[[Page 116 STAT. 397]]

                company will be operated soundly and profitably, and 
                managed actively and prudently in accordance with the 
                articles of the rural business investment company;
                    ``(B) determine that the rural business investment 
                company will be able to comply with the requirements of 
                this subtitle;
                    ``(C) require that at least 75 percent of the 
                capital of each rural business investment company is 
                invested in rural business concerns and not more than 10 
                percent of the investments shall be made in an area 
                containing a city of over 150,000 in the last decennial 
                census and the Census Bureau defined urbanized area 
                containing or adjacent to that city;
                    ``(D) ensure that the rural business investment 
                company is designed primarily to meet equity capital 
                needs of the businesses in which the rural business 
                investment company invests and not to compete with 
                traditional small business financing by commercial 
                lenders; and
                    ``(E) require that the rural business investment 
                company makes short-term non-equity investments of less 
                than 5 years only to the extent necessary to preserve an 
                existing investment.

      ``(d) Diversification of Ownership.--The Secretary shall ensure 
that the management of each rural business investment company licensed 
after the date of enactment of this subtitle is sufficiently diversified 
from and unaffiliated with the ownership of the rural business 
investment company so as to ensure independence and objectivity in the 
financial management and oversight of the investments and operations of 
the rural business investment company.

``SEC. 384J. <<NOTE: 7 USC 2009cc-9.>>  FINANCIAL INSTITUTION 
            INVESTMENTS.

    ``(a) In General.--Except as otherwise provided in this section and 
notwithstanding any other provision of law, the following banks, 
associations, and institutions are eligible both to establish and invest 
in any rural business investment company or in any entity established to 
invest solely in rural business investment companies:
            ``(1) Any bank or savings association the deposits of which 
        are insured under the Federal Deposit Insurance Act (12 U.S.C. 
        1811 et seq.).
            ``(2) Any Farm Credit System institution described in 
        section 1.2(a) of the Farm Credit Act of 1971 (12 U.S.C. 
        2002(a)).

    ``(b) Limitation.--No bank, association, or institution described in 
subsection (a) may make investments described in subsection (a) that are 
greater than 5 percent of the capital and surplus of the bank, 
association, or institution.
    ``(c) Limitation on Rural Business Investment Companies Controlled 
by Farm Credit System Institutions.--If a Farm Credit System institution 
described in section 1.2(a) of the Farm Credit Act of 1971 (12 U.S.C. 
2002(a)) holds more than 15 percent of the shares of a rural business 
investment company, either alone or in conjunction with other System 
institutions (or affiliates), the rural business investment company 
shall not provide equity investments in, or provide other financial 
assistance to, entities that are not otherwise eligible to receive 
financing from the Farm Credit System under that Act (12 U.S.C. 2001 et 
seq.).

[[Page 116 STAT. 398]]

``SEC. 384K. <<NOTE: 7 USC 2009cc-10.>>  REPORTING REQUIREMENTS.

    ``(a) Rural Business Investment Companies.--Each rural business 
investment company that participates in the program established under 
this subtitle shall provide to the Secretary such information as the 
Secretary may require, including--
            ``(1) information relating to the measurement criteria that 
        the rural business investment company proposed in the program 
        application of the rural business investment company; and
            ``(2) in each case in which the rural business investment 
        company under this subtitle makes an investment in, or a loan or 
        grant to, a business that is not located in a rural area, a 
        report on the number and percentage of employees of the business 
        who reside in those areas.

    ``(b) Public Reports.--
            ``(1) In general.--The Secretary shall prepare and make 
        available to the public an annual report on the program 
        established under this subtitle, including detailed information 
        on--
                    ``(A) the number of rural business investment 
                companies licensed by the Secretary during the previous 
                fiscal year;
                    ``(B) the aggregate amount of leverage that rural 
                business investment companies have received from the 
                Federal Government during the previous fiscal year;
                    ``(C) the aggregate number of each type of leveraged 
                instruments used by rural business investment companies 
                during the previous fiscal year and how each number 
                compares to previous fiscal years;
                    ``(D) the number of rural business investment 
                company licenses surrendered and the number of rural 
                business investment companies placed in liquidation 
                during the previous fiscal year, identifying the amount 
                of leverage each rural business investment company has 
                received from the Federal Government and the type of 
                leverage instruments each rural business investment 
                company has used;
                    ``(E) the amount of losses sustained by the Federal 
                Government as a result of operations under this subtitle 
                during the previous fiscal year and an estimate of the 
                total losses that the Federal Government can reasonably 
                expect to incur as a result of the operations during the 
                current fiscal year;
                    ``(F) actions taken by the Secretary to maximize 
                recoupment of funds of the Federal Government expended 
                to implement and administer the Rural Business 
                Investment Program under this subtitle during the 
                previous fiscal year and to ensure compliance with the 
                requirements of this subtitle (including regulations);
                    ``(G) the amount of Federal Government leverage that 
                each licensee received in the previous fiscal year and 
                the types of leverage instruments each licensee used;
                    ``(H) for each type of financing instrument, the 
                sizes, types of geographic locations, and other 
                characteristics of the small business investment 
                companies using the instrument during the previous 
                fiscal year, including the extent to which the 
                investment companies have used the leverage from each 
                instrument to make loans or equity investments in rural 
                areas; and

[[Page 116 STAT. 399]]

                    ``(I) the actions of the Secretary to carry out this 
                subtitle.
            ``(2) Prohibition.--In compiling the report required under 
        paragraph (1), the Secretary may not--
                    ``(A) compile the report in a manner that permits 
                identification of any particular type of investment by 
                an individual rural business investment company or small 
                business concern in which a rural business investment 
                company invests; and
                    ``(B) may not release any information that is 
                prohibited under section 1905 of title 18, United States 
                Code.

``SEC. 384L. <<NOTE: 7 USC 2009cc-11.>>  EXAMINATIONS.

    ``(a) In General.--Each rural business investment company that 
participates in the program established under this subtitle shall be 
subject to examinations made at the direction of the Secretary in 
accordance with this section.
    ``(b) Assistance of Private Sector Entities.--An examination under 
this section may be conducted with the assistance of a private sector 
entity that has the qualifications and the expertise necessary to 
conduct such an examination.
    ``(c) Costs.--
            ``(1) In general.--The Secretary may assess the cost of an 
        examination under this section, including compensation of the 
        examiners, against the rural business investment company 
        examined.
            ``(2) Payment.--Any rural business investment company 
        against which the Secretary assesses costs under this paragraph 
        shall pay the costs.

    ``(d) Deposit of Funds.--Funds collected under this section shall--
            ``(1) be deposited in the account that incurred the costs 
        for carrying out this section;
            ``(2) be made available to the Secretary to carry out this 
        section, without further appropriation; and
            ``(3) remain available until expended.

``SEC. 384M. <<NOTE: 7 USC 2009cc-12.>>  INJUNCTIONS AND OTHER ORDERS.

    ``(a) In General.--
            ``(1) Application by secretary.--Whenever, in the judgment 
        of the Secretary, a rural business investment company or any 
        other person has engaged or is about to engage in any act or 
        practice that constitutes or will constitute a violation of a 
        provision of this subtitle (including any rule, regulation, 
        order, or participation agreement under this subtitle), the 
        Secretary may apply to the appropriate district court of the 
        United States for an order enjoining the act or practice, or for 
        an order enforcing compliance with the provision, rule, 
        regulation, order, or participation agreement.
            ``(2) Jurisdiction; relief.--The court shall have 
        jurisdiction over the action and, on a showing by the Secretary 
        that the rural business investment company or other person has 
        engaged or is about to engage in an act or practice described in 
        paragraph (1), a permanent or temporary injunction, restraining 
        order, or other order, shall be granted without bond.

    ``(b) Jurisdiction.--

[[Page 116 STAT. 400]]

            ``(1) In general.--In any proceeding under subsection (a), 
        the court as a court of equity may, to such extent as the court 
        considers necessary, take exclusive jurisdiction over the rural 
        business investment company and the assets of the rural business 
        investment company, wherever located.
            ``(2) Trustee or receiver.--The court shall have 
        jurisdiction in any proceeding described in paragraph (1) to 
        appoint a trustee or receiver to hold or administer the assets.

    ``(c) Secretary As Trustee or Receiver.--
            ``(1) Authority.--The Secretary may act as trustee or 
        receiver of a rural business investment company.
            ``(2) Appointment.--On the request of the Secretary, the 
        court shall appoint the Secretary to act as a trustee or 
        receiver of a rural business investment company unless the court 
        considers the appointment inequitable or otherwise inappropriate 
        by reason of any special circumstances involved.

``SEC. 384N. <<NOTE: 7 USC 2009cc-13.>>  ADDITIONAL PENALTIES FOR 
            NONCOMPLIANCE.

    ``(a) In General.--With respect to any rural business investment 
company that violates or fails to comply with this subtitle (including 
any rule, regulation, order, or participation agreement under this 
subtitle), the Secretary may, in accordance with this section--
            ``(1) void the participation agreement between the Secretary 
        and the rural business investment company; and
            ``(2) cause the rural business investment company to forfeit 
        all of the rights and privileges derived by the rural business 
        investment company under this subtitle.

    ``(b) Adjudication of Noncompliance.--
            ``(1) In general.--Before the Secretary may cause a rural 
        business investment company to forfeit rights or privileges 
        under subsection (a), a court of the United States of competent 
        jurisdiction must find that the rural business investment 
        company committed a violation, or failed to comply, in a cause 
        of action brought for that purpose in the district, territory, 
        or other place subject to the jurisdiction of the United States, 
        in which the principal office of the rural business investment 
        company is located.
            ``(2) Parties authorized to file causes of action.--Each 
        cause of action brought by the United States under this 
        subsection shall be brought by the Secretary or by the Attorney 
        General.

``SEC. 384O. <<NOTE: 7 USC 2009cc-14.>>  UNLAWFUL ACTS AND OMISSIONS; 
            BREACH OF FIDUCIARY DUTY.

    ``(a) Parties Deemed To Commit a Violation.--Whenever any rural 
business investment company violates this subtitle (including any rule, 
regulation, order, or participation agreement under this subtitle), by 
reason of the failure of the rural business investment company to comply 
with this subtitle or by reason of its engaging in any act or practice 
that constitutes or will constitute a violation of this subtitle, the 
violation shall also be deemed to be a violation and an unlawful act 
committed by any person that, directly or indirectly, authorizes, 
orders, participates in, causes, brings about, counsels, aids, or abets 
in the commission of any acts, practices, or transactions that 
constitute or will constitute, in whole or in part, the violation.

[[Page 116 STAT. 401]]

    ``(b) Fiduciary Duties.--It shall be unlawful for any officer, 
director, employee, agent, or other participant in the management or 
conduct of the affairs of a rural business investment company to engage 
in any act or practice, or to omit any act or practice, in breach of the 
fiduciary duty of the officer, director, employee, agent, or participant 
if, as a result of the act or practice, the rural business investment 
company suffers or is in imminent danger of suffering financial loss or 
other damage.
    ``(c) Unlawful Acts.--Except with the written consent of the 
Secretary, it shall be unlawful--
            ``(1) for any person to take office as an officer, director, 
        or employee of any rural business investment company, or to 
        become an agent or participant in the conduct of the affairs or 
        management of a rural business investment company, if the 
        person--
                    ``(A) has been convicted of a felony, or any other 
                criminal offense involving dishonesty or breach of 
                trust; or
                    ``(B) has been found liable in a civil action for 
                damages, or has been permanently or temporarily enjoined 
                by an order, judgment, or decree of a court of competent 
                jurisdiction, by reason of any act or practice involving 
                fraud or breach of trust; and
            ``(2) for any person to continue to serve in any of the 
        capacities described in paragraph (1), if--
                    ``(A) the person is convicted of a felony or any 
                other criminal offense involving dishonesty or breach of 
                trust; or
                    ``(B) the person is found liable in a civil action 
                for damages, or is permanently or temporarily enjoined 
                by an order, judgment, or decree of a court of competent 
                jurisdiction, by reason of any act or practice involving 
                fraud or breach of trust.

``SEC. 384P. <<NOTE: 7 USC 2009cc-15.>>  REMOVAL OR SUSPENSION OF 
            DIRECTORS OR OFFICERS.

    ``Using the procedures established by the Secretary for removing or 
suspending a director or an officer of a rural business investment 
company, the Secretary may remove or suspend any director or officer of 
any rural business investment company.

``SEC. 384Q. <<NOTE: 7 USC 2009cc-16.>> CONTRACTING OF FUNCTIONS.

    ``(a) In General.--Notwithstanding any other provision of law, to 
carry out the day-to-day management and operation of the program 
authorized by this subtitle on behalf of the Secretary, the Secretary 
shall enter into an interagency agreement under section 1535 of title 
31, United States Code, with another Federal agency that has 
considerable expertise in operating a program under which capital is 
provided for equity investments in private sector companies.
    ``(b) Funding.--The costs incurred by a Federal agency entering into 
an agreement under subsection (a) shall be reimbursed in accordance with 
section 1535 of title 31, United States Code, from amounts made 
available under section 384S(a)(2).

``SEC. 384R. <<NOTE: 7 USC 2009cc-17.>> REGULATIONS.

    ``The Secretary may promulgate such regulations as the Secretary 
considers necessary to carry out this subtitle.

[[Page 116 STAT. 402]]

``SEC. 384S. <<NOTE: 7 USC 2009cc-18.>>  FUNDING.

    ``(a) In General.--Notwithstanding any other provision of law, of 
the funds of the Commodity Credit Corporation, the Secretary shall make 
available--
            ``(1) such sums as may be necessary for the cost of 
        guaranteeing $280,000,000 of debentures under this subtitle; and
            ``(2) $44,000,000 to make grants under this subtitle.

    ``(b) Availability of Funds.--Funds transferred under subsection (a) 
shall remain available until expended.''.

SEC. 6030. RURAL STRATEGIC INVESTMENT PROGRAM.

    The Consolidated Farm and Rural Development Act (as amended by 
section 6029) is amended by adding at the end the following:

            ``Subtitle I--Rural Strategic Investment Program

``SEC. 385A. <<NOTE: 7 USC 2009dd.>>  PURPOSE.

    ``The purpose of this subtitle is to establish a rural strategic 
investment program--
            ``(1) to provide rural communities with flexible resources 
        to develop comprehensive, collaborative, and locally-based 
        strategic planning processes; and
            ``(2) to implement innovative community and economic 
        development strategies that optimize regional competitive 
        advantages.

``SEC. 385B. <<NOTE: 7 USC 2009dd-1.>> DEFINITIONS.

    ``In this subtitle:
            ``(1) Benchmark.--The term `benchmark' means an annual set 
        of strategies and goals of a Regional Board established for the 
        purpose of measuring performance in meeting the regional plan of 
        the Regional Board.
            ``(2) Conference.--The term ``Conference'' means the 
        National Conference on Rural America conducted under section 
        385H.
            ``(3) Eligible area.--
                    ``(A) In general.--The term `eligible area' means a 
                nonmetropolitan county (as defined by the Secretary) 
                that has a population of 50,000 inhabitants or less.
                    ``(B) Inclusion.--
                          ``(i) In general.--Subject to clause (ii), the 
                      term `eligible area' includes an unincorporated or 
                      other area of a county that has a population of 
                      more than 50,000 inhabitants if the unincorporated 
                      area or other area is adjacent to an eligible 
                      rural area described in subparagraph (A).
                          ``(ii) Participation.--An area described in 
                      clause (i) may be represented on a Regional Board.
                    ``(C) Exclusion.--The term `eligible area' does not 
                include any area designated by the Secretary as a rural 
                empowerment zone or rural enterprise community.
            ``(4) Innovation grant.--The term `innovation grant' means 
        an innovation grant made by the National Board to a Regional 
        Board under section 385G.

[[Page 116 STAT. 403]]

            ``(5) National board.--The term `National Board' means the 
        National Board on Rural America established under section 
        385D(a).
            ``(6) National plan.--The term `national plan' means a 
        national strategic investment plan of the National Board 
        developed under section 385D(d)(3).
            ``(7) Planning grant.--The term `planning grant' means a 
        regional strategic investment planning grant made by the 
        National Board to a Regional Board under section 385F.
            ``(8) Program.--The term `program' means the rural strategic 
        investment program established under this subtitle.
            ``(9) Region.--The term `region' means the eligible areas 
        that--
                    ``(A) are under the jurisdiction of a Regional 
                Board; and
                    ``(B) meet criteria established by the National 
                Board not later than 1 year after the date of enactment 
                of this subtitle.
            ``(10) Regional board.--The term `Regional Board' means a 
        Regional Investment Board certified under section 385C(a).
            ``(11) Regional plan.--The term `regional plan' means a 
        regional strategic investment plan of a Regional Board developed 
        under section 385C(b)(3)(B).

``SEC. 385C. <<NOTE: 7 USC 2009dd-2.>>  REGIONAL INVESTMENT BOARDS.

    ``(a) In General.--The National Board may certify a group 
representing the interests described in subsection (b)(2)(A) as a 
Regional Investment Board created to develop and implement a regional 
strategic investment plan for grants made under this subtitle to promote 
investment in eligible areas.
    ``(b) Requirements for Certification.--
            ``(1) In general.--A Regional Board shall meet the 
        requirements of this subsection for certification.
            ``(2) Composition.--
                    ``(A) In general.--A Regional Board shall be 
                composed of residents of the region that broadly 
                represent diverse public, nonprofit, and private sector 
                interests in investment in the region, including (to the 
                maximum extent practicable) representatives of--
                          ``(i) units of local government (including 
                      multijurisdictional units of local government);
                          ``(ii) in the case of regions with Indian 
                      populations, Indian tribes (as defined in section 
                      4 of the Indian Self-Determination and Education 
                      Assistance Act (25 U.S.C. 450b));
                          ``(iii) private nonprofit community-based 
                      development organizations;
                          ``(iv) regional development organizations;
                          ``(v) private business organizations;
                          ``(vi) other entities and organizations, as 
                      determined by the Regional Board; and
                          ``(vii) consortia of entities and 
                      organizations described in clauses (i) through 
                      (vii).
                    ``(B) Local public-private representation.--Of the 
                members of a Regional Board, to the maximum extent 
                practicable--

[[Page 116 STAT. 404]]

                          ``(i) \1/2\ of the members shall be 
                      representatives of units of local government and 
                      Indian tribes described in subparagraph (A); and
                          ``(ii) \1/2\ of the members shall be 
                      representatives of nonprofit, regional, private, 
                      and other entities and organizations described in 
                      subparagraph (A).
                    ``(C) Ex-officio members.--
                          ``(i) In general.--An officer or employee of a 
                      Federal or State agency may serve as an ex-
                      officio, non-voting member of a Regional Board 
                      representing the agency.
                          ``(ii) Conflicts.--Participation by a Federal 
                      officer or employee in activities of the Regional 
                      Board shall not constitute a violation of section 
                      205 or 208 of title 18, United States Code.
                    ``(D) Certification.--To be certified by the 
                National Board, a Regional Board shall demonstrate to 
                the National Board that the Regional Board is broadly 
                representative of the interests described in 
                subparagraph (A).
                    ``(E) Appeals.--
                          ``(i) In general.--Prior to certification of 
                      the Regional Board by the National Board, 
                      representatives of interests described in 
                      subparagraph (A) that participated in the 
                      development of a Regional Board may appeal the 
                      composition of the Regional Board to the National 
                      Board on the ground that--
                                    ``(I) the composition of the 
                                Regional Board does not adequately 
                                reflect the purposes of the program; or
                                    ``(II) the selection process for the 
                                Regional Board unfairly disadvantaged 
                                those interests.
                          ``(ii) Action by national board.--The National 
                      Board shall act on any appeal of the composition 
                      of a Regional Board before taking action on the 
                      certification of the Regional Board.
            ``(3) Duties and purpose.--The organizational documents of 
        the proposed Regional Board shall demonstrate that, on 
        certification, the Regional Board shall--
                    ``(A) create a collaborative, inclusive public-
                private planning process;
                    ``(B) develop, and submit to the National Board for 
                approval, a regional strategic investment plan that 
                meets the requirements of section 385F, with benchmarks, 
                to promote investment in eligible areas through the use 
                of grants made available under this subtitle;
                    ``(C) implement the approved regional plan;
                    ``(D) provide <<NOTE: Reports.>> annual reports to 
                the Secretary and the National Board on progress made in 
                achieving the benchmarks of the regional plan, including 
                an annual financial statement; and
                    ``(E) select a non-Federal organization (such as a 
                regional development organization) in the local area 
                served by the Regional Board that has previous 
                experience in the management of Federal funds to serve 
                as fiscal manager of any funds of the Regional Board.

[[Page 116 STAT. 405]]

``SEC. 385D. <<NOTE: 7 USC 2009dd-3.>> NATIONAL BOARD ON RURAL AMERICA.

    ``(a) Establishment.--
            ``(1) In general.--The Secretary shall establish a National 
        Board on Rural America to carry out the rural strategic 
        investment program established under this subtitle.
            ``(2) Supervision and direction.--Except as otherwise 
        provided in this subtitle, the National Board shall be subject 
        to the general supervision and direction of the Secretary.

    ``(b) Composition.--
            ``(1) In general.--
                    ``(A) Appointment.--In addition to the Secretary or 
                the designee of the Secretary, the National Board shall 
                consist of 14 members appointed by the Secretary from 
                among--
                          ``(i) representatives of nationally recognized 
                      entrepreneurship organizations;
                          ``(ii) representatives of regional planning 
                      and development organizations;
                          ``(iii) representatives of community-based 
                      organizations;
                          ``(iv) elected members of county governments;
                          ``(v) elected members of State legislatures;
                          ``(vi) representatives of the rural 
                      philanthropic community; and
                          ``(vii) representatives of Indian tribes (as 
                      defined in section 4 of the Indian Self-
                      Determination and Education Assistance Act (25 
                      U.S.C. 450b)).
                    ``(B) Recommendations.--In appointing the members of 
                the National Board under subparagraph (A), the Secretary 
                shall consider recommendations made by--
                          ``(i) the chairman and ranking member of each 
                      of the Committee on Agriculture of the House of 
                      Representatives and the Committee on Agriculture, 
                      Nutrition, and Forestry of the Senate;
                          ``(ii) the Majority Leader of the Senate; and
                          ``(iii) the Speaker of the House of 
                      Representatives.
            ``(3) Term of office.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                term of office of a member of the National Board 
                appointed under paragraph (1)(A) shall be 4 years.
                    ``(B) Staggered initial terms.--Of the initial 
                members of the National Board appointed under paragraph 
                (1)(A), the term of office of--
                          ``(i) 5 members shall be 4 years;
                          ``(ii) 5 members shall be 3 years; and
                          ``(iii) 4 members shall be 2 years.
            ``(4) Initial appointments.--Not later than 90 days after 
        the date of enactment of this subtitle, the Secretary shall 
        appoint the initial members of the National Board under 
        paragraph (1)(A).
            ``(5) Ex-officio members.--
                    ``(A) Special assistant to the president for rural 
                policy.--If appointed by the President under section 
                6406(1) of the Farm Security and Rural Investment Act of 
                2002, the Special Assistant to the President for Rural 
                Policy shall serve as an ex-officio, non-voting member 
                of the National Board.

[[Page 116 STAT. 406]]

                    ``(B) Other members.--In consultation with the 
                chairman and ranking member of each of the Committee on 
                Agriculture of the House of Representatives and the 
                Committee on Agriculture, Nutrition, and Forestry of the 
                Senate, the Secretary may appoint not more than 3 other 
                officers or employees of the Executive Branch to serve 
                as ex-officio, non-voting members of the National Board.
            ``(6) Vacancies.--A vacancy on the National Board shall be 
        filled in the same manner as the original appointment.
            ``(7) Compensation.--A member of the National Board shall 
        receive no compensation for service on the National Board, but 
        shall be reimbursed for travel and other expenses incurred in 
        carrying out the duties of the member of the National Board in 
        accordance with section 5702 and 5703 of title 5, United States 
        Code.
            ``(8) Chairperson.--The National Board shall select a 
        chairperson from among the members of the National Board.
            ``(9) Meetings.--
                    ``(A) Time and place.--The National Board shall meet 
                at the call of the chairperson.
                    ``(B) Quorum.--A quorum of the National Board shall 
                consist of a majority of the members.
                    ``(C) Majority vote.--A decision of the National 
                Board shall be made by majority vote.
            ``(10) Federal status.--For purposes of Federal law, a 
        member of the National Board shall be considered a special 
        Government employee (as defined in section 202(a) of title 18, 
        United States Code).
            ``(11) Conflict of interest.--
                    ``(A) In general.--Except as provided in 
                subparagraph (C), no member of the National Board shall 
                vote on any matter respecting any application for a 
                grant or other particular matter pending before the 
                National Board in which, to the knowledge of the member, 
                the member, spouse, or child of the member, partner, or 
                organization in which the member is serving as officer, 
                director, trustee, partner, or employee, or any person 
                or organization with whom the member is negotiating or 
                has any arrangement concerning prospective employment, 
                has a financial interest.
                    ``(B) Violations.--A violation of subparagraph (A) 
                by a member of the National Board shall be cause for 
                removal of the member, but shall not impair or otherwise 
                affect the validity of any otherwise lawful action by 
                the National Board in which the member participated.
                    ``(C) Exception.--Subparagraph (A) shall not apply 
                to the extent a member of the National Board advises the 
                National Board of the nature of the particular matter in 
                which the member proposes to participate, if--
                          ``(i) the member makes a full disclosure of 
                      the financial interest; and
                          ``(ii) prior to any participation by the 
                      member, the National Board determines, by majority 
                      vote of the other members of the National Board, 
                      that the financial interest is too remote or too 
                      inconsequential to affect the integrity of the 
                      services of the member to the National Board in 
                      that matter.

[[Page 116 STAT. 407]]

    ``(c) Administrative Support.--The Secretary, on a reimbursable 
basis, may provide such administrative support to the National Board as 
the Secretary determines is necessary to carry out the duties of the 
National Board.
    ``(d) Duties.--The National Board shall--
            ``(1) certify Regional Boards in accordance with section 
        385C, with the initial certification of Regional Boards 
        occurring not later than 540 days after the date of enactment of 
        this subtitle;
            ``(2) approve, negotiate, or disapprove each regional plan 
        that is submitted by a Regional Board to the National Board 
        under section 385C;
            ``(3) develop, and submit to the Secretary for approval, a 
        national strategic investment plan;
            ``(4) use the amount received from the Secretary under 
        section 385E to make planning grants and innovation grants to 
        Regional Boards and to otherwise carry out the program;
            ``(5) provide leadership and advice to Regional Boards on 
        issues, best practices, and emerging trends relating to rural 
        development;
            ``(6) evaluate the progress of each Regional Board in 
        achieving the benchmarks of the regional plan using annual 
        reports submitted under section 385C(b)(3)(D) and any other 
        information that is available to the Regional Board; and
            ``(7) submit an annual report on the performance of Regional 
        Boards and the program to--
                    ``(A) the Committee on Agriculture of the House of 
                Representatives;
                    ``(B) the Committee on Agriculture, Nutrition, and 
                Forestry of the Senate; and
                    ``(C) the Secretary.

``SEC. 385E. <<NOTE: 7 USC 2009dd-4.>>  RURAL STRATEGIC INVESTMENT 
            PROGRAM.

    ``(a) In General.--If the Secretary approves a national strategic 
investment plan submitted by the National Board, of the funds of the 
Commodity Credit Corporation, the Secretary shall transfer to the 
National Board $100,000,000, to remain available until expended, for the 
Board to use to make planning grants and innovation grants to Regional 
Boards and to otherwise carry out this subtitle.
    ``(b) Use by National Board.--Of the amount transferred by the 
Secretary to the National Board under subsection (a), the National Board 
shall use--
            ``(1) not less than $8,000,000 to make planning grants to 
        Regional Boards under section 385F;
            ``(2) not less than $87,000,000 to make innovation grants to 
        Regional Boards under section 385G; and
            ``(3) the remainder of the funds to carry out section 385H 
        and administer this subtitle (other than section 385H).

``SEC. 385F. <<NOTE: 7 USC 2009dd-5.>>  REGIONAL STRATEGIC INVESTMENT 
            PLANNING GRANTS.

    ``(a) In General.--The National Board shall use amounts made 
available under section 385E(b)(1) to make not fewer than 80 planning 
grants, on a competitive basis, to applicant Regional Boards to develop, 
maintain, evaluate, and report progress on regional strategic investment 
plans in accordance with section 385C and this section.

[[Page 116 STAT. 408]]

    ``(b) Regional Plans.--A regional plan for a region covered by a 
Regional Board shall, to the maximum extent practicable, cover--
            ``(1) basic infrastructure needs of the region;
            ``(2) basic services within the region;
            ``(3) opportunities for economic diversification and 
        innovation within the region, with particular attention to 
        entrepreneurial support and innovation;
            ``(4) the current and future human resource capacity of the 
        region;
            ``(5) access to market-based financing and venture and 
        equity capital in the region;
            ``(6) the development of innovative public and private 
        collaborations for investments in the region; and
            ``(7) other appropriate matters, as determined by the 
        National Board and the Secretary.

    ``(c) Preferences.--In awarding planning grants, the National Board 
shall give a preference to planning grants that will be used to address 
community capacity building and community sustainability.
    ``(d) Amount.--The total amount of a planning grant made to a 
Regional Board shall not exceed $100,000.
    ``(e) Cost Sharing.--
            ``(1) In general.--Subject to paragraphs (2) and (3), the 
        share of the costs of developing, maintaining, evaluating, and 
        reporting on a regional plan funded by a grant under this 
        section shall not exceed 50 percent.
            ``(2) Form.--
                    ``(A) In general. Except as provided in subparagraph 
                (B), a Regional Board shall pay the grantee share of the 
                costs described in paragraph (1) in the form of cash, 
                services, materials, or other in-kind contributions.
                    ``(B) Limitation.--A grantee shall not pay more than 
                50 percent of the grantee share in the form of services, 
                materials, or other in-kind contributions.
            ``(3) Increased share.--The National Board may increase the 
        share of the costs covered by a planning grant made to a 
        Regional Board under this section if a limited ability of the 
        Regional Board to pay would otherwise create a barrier to full 
        participation in the program.

``SEC. 385G. <<NOTE: 7 USC 2009dd-6.>>  INNOVATION GRANTS.

    ``(a) In General.--The National Board shall use amounts made 
available under section 385E(b)(2) to make innovation grants, on a 
competitive basis, to Regional Boards to implement projects that are 
identified in the regional plans of the Regional Boards.
    ``(b) Eligibility.--
            ``(1) In general.--For a Regional Board to be eligible to 
        receive an innovation grant, the National Board shall determine 
        that--
                    ``(A) the regional plan of a Regional Board meets 
                the requirements of this subtitle;
                    ``(B) the management and organizational structure of 
                the Regional Board is sufficient to oversee grant 
                projects;
                    ``(C) the Regional Board will be able to provide the 
                grantee share required under this section; and

[[Page 116 STAT. 409]]

                    ``(D) the Regional Board agrees to achieve, to the 
                maximum extent practicable, the performance-based 
                benchmarks of the regional plan.
            ``(2) Relationship to planning grants.--A Regional Board 
        that meets the requirements of paragraph (1) shall be eligible 
        to receive an innovation grant, regardless of whether the 
        Regional Board receives a planning grant.

    ``(c) Selection.--Subject to subsection (d), of the applications 
submitted by Regional Boards for innovation grants, the National Board 
shall, to the maximum extent practicable, select not fewer than 30 
regional boards to receive innovation grants.
    ``(d) Preferences.--In awarding innovation grants, the National 
Board shall give a preference (in order of priority) to Regional Boards 
that--
            ``(1) exhibit collaborative innovation and entrepreneurship, 
        particularly within a public-private partnership;
            ``(2) represent a broad coalition of interests described in 
        section 385C(b)(2)(A);
            ``(3) demonstrate a plan to leverage public (Federal and 
        non-federal) and private funds and existing assets, including 
        natural assets and public infrastructure;
            ``(4) address gaps in existing basic services within a 
        region;
            ``(5) address economic diversification, including 
        agricultural and non-agriculturally based economies, within a 
        regional framework;
            ``(6) demonstrate a plan to achieve multijurisdictional 
        regional planning and development, with particular evidence of 
        economic development successes within diverse stakeholder 
        frameworks; or
            ``(7) meet other community development needs identified by a 
        Regional Board.

    ``(e) Uses.--
            ``(1) Leverage.--A Regional Board shall prioritize projects, 
        in part, on the degree to which the Regional Board is able to 
        leverage additional funds for the implementation of the 
        projects.
            ``(2) Purposes.--A Regional Board may use an innovation 
        grant provided for a region--
                    ``(A) to support the development of critical 
                infrastructure necessary to facilitate economic 
                development in the region;
                    ``(B) to provide assistance to entities within the 
                region that provide basic public services;
                    ``(C) to assist with job training, workforce 
                development, or other needs related to the development 
                and maintenance of strong local and regional economies;
                    ``(D) to assist in the development of unique new 
                collaborations that link public, private, and 
                philanthropic resources to achieve collaboratively 
                designed regional advancement; and
                    ``(E) to provide support to business investment.
            ``(3) Other department programs.--A Regional Board may not 
        use an innovation grant provided for a region for any purpose 
        for which funding may be obtained under any other rural 
        development program of the Department of Agriculture unless--
                    ``(A) the Regional Board--

[[Page 116 STAT. 410]]

                          ``(i) has submitted an application for the 
                      funding under the other program; and
                          ``(ii) withdraws the application; and
                    ``(B) the National Board approves use of the 
                innovation grant for that purpose.
            ``(4) Operating expenses.--A Regional Board may use for 
        administrative costs in carrying out programs and activities 
        related to the grant the greater of--
                    ``(A) $100,000; or
                    ``(B) 5 percent of the amount of an innovation grant 
                provided.

    ``(f) Amount.--
            ``(1) In general.--The amount of an innovation grant made to 
        a Regional Board shall not exceed $3,000,000.
            ``(2) Availability.--The amount of an innovation grant made 
        to a Regional Board shall remain available until expended.

    ``(g) Cost Sharing.--
            ``(1) In general.--Subject to paragraphs (2) and (3), the 
        share of the costs of projects covered by an innovation grant 
        made to a Regional Board under this section shall not exceed 75 
        percent, as determined by the National Board.
            ``(2) Form.--A Regional Board may pay the grantee share of 
        the costs of projects covered by an innovation grant in the form 
        of cash or services, materials, or other in-kind contributions.
            ``(3) Waiver of grantee share.--The National Board may waive 
        the grantee share of the costs of projects covered by an 
        innovation grant made to a Regional Board under this section if 
        the National Board determines that such a waiver is appropriate.
            ``(4) Other federal programs.--For the purpose of 
        determining grantee share requirements for any other Federal 
        programs, funds provided for innovation grants shall be 
        considered to be non-Federal funds.

    ``(h) Negotiation.--The National Board may--
            ``(1) negotiate with a Regional Board on the substance, 
        size, and scope of a regional plan; and
            ``(2) approve an innovation grant for an amount that is 
        lower than the amount requested by the Regional Board.

    ``(i) Noncompliance.--If a Regional Board fails to comply with the 
requirements of this section, the National Board may take such actions 
as are necessary to obtain reimbursement of unused grant funds.
    ``(j) Other Uses.--The National Board may use not more than 5 
percent of the amounts made available for innovation grants--
            ``(1) to provide assistance to interests described in 
        section 385C(b)(2)(A) to obtain certification of a Regional 
        Board;
            ``(2) to provide assistance for emergent innovative 
        opportunities that are not covered by existing regional plans;
            ``(3) to provide technical assistance, research, 
        organizational support, and other capacity building 
        infrastructure to support existing Regional Boards;
            ``(4) to provide assistance for other entrepreneurial 
        opportunities to advance the goals of the program; or
            ``(5) to advance a more integrative rural policy framework 
        for the United States.

[[Page 116 STAT. 411]]

    ``(k) Transfers.--To ensure maximum use of funds provided under this 
subtitle, the National Board may transfer not more than 10 percent of 
the amount of funds made available between planning grants and 
innovation grants.

``SEC. 385H. <<NOTE: 7 USC 2009dd-7.>>  NATIONAL CONFERENCE ON RURAL 
            AMERICA.

    ``(a) In <<NOTE: President. Deadline.>> General.--The President 
shall call and conduct a National Conference on Rural America, which 
shall be held not earlier than November 1, 2002, and not later than 
October 30, 2004.

    ``(b) Purpose.--The purpose of the Conference shall be to bring 
together the resources of governmental agencies and the private and 
nonprofit sectors to develop--
            ``(1) policy recommendations and integrative strategies for 
        addressing the unique challenges facing rural areas of the 
        United States; and
            ``(2) an implementation plan, with outcome-based 
        measurements, for addressing the challenges.

    ``(c) Composition.--
            ``(1) In general.--The Conference shall be comprised of--
                    ``(A) representatives of organizations devoted to 
                rural development;
                    ``(B) Members of Congress, including the chairman 
                and ranking member of each of the Committee on 
                Agriculture of the House of Representatives and the 
                Committee on Agriculture, Nutrition, and Forestry of the 
                Senate;
                    ``(C) representatives of the Department of 
                Agriculture and other Federal agencies;
                    ``(D) State, local, and tribal elected officials and 
                representatives;
                    ``(E) representatives of colleges and universities, 
                State and tribal extension services, and State rural 
                development councils; and
                    ``(F) individuals with specialized knowledge of and 
                expertise in rural and community development, 
                cooperative business, agricultural credit, venture 
                capital, health care, and rural demography.
            ``(2) Selection.--Of the participants in the Conference 
        described in paragraph (1)--
                    ``(A) \1/3\ of <<NOTE: President.>> the members 
                shall be selected by the President;
                    ``(B) \1/3\ of the members shall be selected by the 
                Chairman and the ranking member of the Committee on 
                Agriculture of the House of Representatives; and
                    ``(C) \1/3\ of the members shall be selected by the 
                Chairman and the ranking member of the Committee on 
                Agriculture, Nutrition, and Forestry of the Senate.
            ``(3) Representation.--In selecting the participants of the 
        Conference, the President and the Chairman of each Committee 
        referred to in paragraph (2) shall ensure, to the maximum extent 
        practicable, that the participants are representative of the 
        ethnic, racial, and linguistic diversity of rural areas of the 
        United States.

    ``(d) Report.--
            ``(1) Report <<NOTE: Deadline.>> to president.--Not later 
        than 120 days after the termination of the Conference, the 
        Conference shall submit

[[Page 116 STAT. 412]]

        to the President a report that contains the findings and 
        recommendations of the Conference, including findings and 
        recommendations to address needs related to--
                    ``(A) telecommunications;
                    ``(B) rural health issues;
                    ``(C) transportation;
                    ``(D) opportunities for economic diversification and 
                innovation within rural America, with particular 
                attention to entrepreneurial support and innovation;
                    ``(E) the current and future human resource capacity 
                of rural America;
                    ``(F) access to market-based financing and venture 
                and equity capital in rural America; and
                    ``(G) the development of innovative public and 
                private collaborations for investments in rural America.
            ``(2) Report <<NOTE: Deadline.>> made public and to 
        congress.--Not later than 90 days after receipt by the 
        President, the President shall--
                    ``(A) make the report public; and
                    ``(B) transmit to the Committee on Agriculture of 
                the House of Representatives and the Committee on 
                Agriculture, Nutrition, and Forestry of the Senate a 
                copy of the report and a statement of the President 
                containing recommendations for implementing the report.
            ``(3) Publication and distribution.--
                    ``(A) In general.--The Conference shall publish and 
                distribute the report described in paragraph (1).
                    ``(B) Mandatory distribution.--The Conference shall 
                provide a copy of a report published under subparagraph 
                (A), at no cost, to--
                          ``(i) each Federal depository library; and
                          ``(ii) on request, each State, tribal, and 
                      local elected official in a rural area of the 
                      United States.

    ``(e) Funding.--Not <<NOTE: Deadline.>> later than 180 days after 
the establishment of the National Board, the National Board shall 
transfer not more than $2,000,000 to the Office of the President to 
carry out this section, to remain available until expended.''.

SEC. 6031. FUNDING OF PENDING RURAL DEVELOPMENT LOAN AND GRANT 
            APPLICATIONS.

    (a) Definition of Application.--In this section, the term 
``application'' does not include an application for a loan or grant 
that, as of the date of enactment of this Act, is in the preapplication 
phase of consideration under regulations of the Secretary of Agriculture 
in effect on the date of enactment of this Act.
    (b) Use of Funds.--Subject to subsection (c), the Secretary of 
Agriculture shall use funds made available under subsection (d) to 
provide funds for applications that are pending on the date of enactment 
of this Act for--
            (1) water or waste disposal grants or direct loans under 
        paragraph (1) or (2) of section 306(a) of the Consolidated Farm 
        and Rural Development Act (7 U.S.C. 1926(a)); and
            (2) emergency community water assistance grants under 
        section 306A of that Act (7 U.S.C. 1926a).

    (c) Limitations.--
            (1) Appropriated amounts.--Funds made available under this 
        section shall be available to the Secretary to provide funds

[[Page 116 STAT. 413]]

        for applications for loans and grants described in subsection 
        (b) that are pending on the date of enactment of this Act only 
        to the extent that funds for the loans and grants appropriated 
        in the annual appropriations Act for fiscal year 2002 have been 
        exhausted.
            (2) Program requirements.--The Secretary may use funds made 
        available under this section to provide funds for a pending 
        application for a loan or grant described in subsection (b) only 
        if the Secretary processes, reviews, and approves the 
        application in accordance with regulations in effect on the date 
        of enactment of this Act.
            (3) Priority.--In providing funding under this section for 
        pending applications for loans or grants described in subsection 
        (b), the Secretary shall provide funding in the following order 
        of priority (until funds made available under this section are 
        exhausted):
                    (A) Pending applications for water systems.
                    (B) Pending applications for waste disposal systems.

    (d) Funding.--Notwithstanding any other provision of law, of the 
funds of the Commodity Credit Corporation, the Secretary shall use 
$360,000,000 to carry out this section, to remain available until 
expended.

              Subtitle B--Rural Electrification Act of 1936

SEC. 6101. GUARANTEES FOR BONDS AND NOTES ISSUED FOR ELECTRIFICATION OR 
            TELEPHONE PURPOSES.

    (a) In General.--The Rural Electrification Act of 1936 is amended by 
inserting after section 313 (7 U.S.C. 940c) the following:

``SEC. 313A. <<NOTE: 7 USC 940c-1.>>  GUARANTEES FOR BONDS AND NOTES 
            ISSUED FOR ELECTRIFICATION OR TELEPHONE PURPOSES.

    ``(a) In General.--Subject to subsection (b), the Secretary shall 
guarantee payments on bonds or notes issued by cooperative or other 
lenders organized on a not-for-profit basis if the proceeds of the bonds 
or notes are used to make loans for any electrification or telephone 
purpose eligible for assistance under this Act, including section 4 or 
201 or to refinance bonds or notes issued for such purposes.
    ``(b) Limitations.--
            ``(1) Outstanding loans.--A lender shall not receive a 
        guarantee under this section for a bond or note if, at the time 
        of the guarantee, the total principal amount of such guaranteed 
        bonds or notes outstanding of the lender would exceed the 
        principal amount of outstanding loans of the lender for 
        electrification or telephone purposes that have been made 
        concurrently with loans approved for such purposes under this 
        Act.
            ``(2) Generation of electricity.--The Secretary shall not 
        guarantee payment on a bond or note issued by a lender, the 
        proceeds of which are used for the generation of electricity.
            ``(3) Qualifications.--The Secretary may deny the request of 
        a lender for the guarantee of a bond or note under this section 
        if the Secretary determines that--

[[Page 116 STAT. 414]]

                    ``(A) the lender does not have appropriate expertise 
                or experience or is otherwise not qualified to make 
                loans for electrification or telephone purposes;
                    ``(B) the bond or note issued by the lender would 
                not be investment grade quality without a guarantee; or
                    ``(C) the lender has not provided to the Secretary a 
                list of loan amounts approved by the lender that the 
                lender certifies are for eligible purposes described in 
                subsection (a).
            ``(4) Interest rate reduction.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a lender may not use any amount 
                obtained from the reduction in funding costs as a result 
                of the guarantee of a bond or note under this section to 
                reduce the interest rate on a new or outstanding loan.
                    ``(B) Concurrent loans.--A lender may use any amount 
                described in subparagraph (A) to reduce the interest 
                rate on a loan if the loan is--
                          ``(i) made by the lender for electrification 
                      or telephone projects that are eligible for 
                      assistance under this Act; and
                          ``(ii) made concurrently with a loan approved 
                      by the Secretary under this Act for such a 
                      project, as provided in section 307.

    ``(c) Fees.--
            ``(1) In general.--A lender that receives a guarantee issued 
        under this section on a bond or note shall pay a fee to the 
        Secretary.
            ``(2) Amount.--The amount of an annual fee paid for the 
        guarantee of a bond or note under this section shall be equal to 
        30 basis points of the amount of the unpaid principal of the 
        bond or note guaranteed under this section.
            ``(3) Payment.--A lender shall pay the fees required under 
        this subsection on a semiannual basis.
            ``(4) Rural economic development subaccount.--Subject to 
        subsection (e)(2), fees collected under this subsection shall 
        be--
                    ``(A) deposited into the rural economic development 
                subaccount maintained under section 313(b)(2)(A), to 
                remain available until expended; and
                    ``(B) used for the purposes described in section 
                313(b)(2)(B).

    ``(d) Guarantees.--
            ``(1) In general.--A guarantee issued under this section 
        shall--
                    ``(A) be for the full amount of a bond or note, 
                including the amount of principal, interest, and call 
                premiums;
                    ``(B) be fully assignable and transferable; and
                    ``(C) represent the full faith and credit of the 
                United States.
            ``(2) Limitation.--To ensure that the Secretary has the 
        resources necessary to properly examine the proposed guarantees, 
        the Secretary may limit the number of guarantees issued under 
        this section to 5 per year.
            ``(3) Department opinion.--On the timely request of a 
        lender, the General Counsel of the Department of Agriculture 
        shall provide the Secretary with an opinion regarding the

[[Page 116 STAT. 415]]

        validity and authority of a guarantee issued to the lender under 
        this section.

    ``(e) Authorization of Appropriations.--
            ``(1) In general.--There are authorized to be appropriated 
        such sums as are necessary to carry out this section.
            ``(2) Fees.--To the extent that the amount of funds 
        appropriated for a fiscal year under paragraph (1) are not 
        sufficient to carry out this section, the Secretary may use up 
        to \1/3\ of the fees collected under subsection (c) for the cost 
        of providing guarantees of bonds and notes under this section 
        before depositing the remainder of the fees into the rural 
        economic development subaccount maintained under section 
        313(b)(2)(A).

    ``(f) Termination.--The authority provided under this section shall 
terminate on September 30, 2007.''.
    (b) Administration.-- <<NOTE: 7 USC 940c-1 note. Deadline.>> 
            (1) Regulations.--Not later than 180 days after the date of 
        enactment of this Act, the Secretary of Agriculture shall 
        promulgate regulations to carry out the amendments made by this 
        section.
            (2) Implementation.--Not later than 240 days after the date 
        of enactment of this Act, the Secretary shall implement the 
        amendment made by this section.

SEC. 6102. EXPANSION OF 911 ACCESS.

    Title III of the Rural Electrification Act of 1936 (7 U.S.C. 931 et 
seq.) is amended by adding at the end the following:

``SEC. 315. <<NOTE: 7 USC 940e.>>  EXPANSION OF 911 ACCESS.

    ``(a) In General.--Subject to such terms and conditions as the 
Secretary may prescribe, the Secretary may make telephone loans under 
this title to borrowers of loans made by the Rural Utilities Service, 
State or local governments, Indian tribes (as defined in section 4 of 
the Indian Self-Determination and Education Assistance Act (25 U.S.C. 
450b)), or other public entities for facilities and equipment to expand 
or improve 911 access and integrated emergency communications systems in 
rural areas.
    ``(b) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section for 
each of fiscal years 2002 through 2007.''.

SEC. 6103. ENHANCEMENT OF ACCESS TO BROADBAND SERVICE IN RURAL AREAS.

    (a) In General.--The Rural Electrification Act of 1936 (7 U.S.C. 901 
et seq.) is amended by adding at the end the following:

                   ``TITLE VI--RURAL BROADBAND ACCESS

``SEC. 601. <<NOTE: Loans. 7 USC 950bb.>>  ACCESS TO BROADBAND 
            TELECOMMUNICATIONS SERVICES IN RURAL AREAS.

    ``(a) Purpose.--The purpose of this section is to provide loans and 
loan guarantees to provide funds for the costs of the construction, 
improvement, and acquisition of facilities and equipment for broadband 
service in eligible rural communities.
    ``(b) Definitions.--In this section:
            ``(1) Broadband service.--The term `broadband service' means 
        any technology identified by the Secretary as having the 
        capacity to transmit data to enable a subscriber to the

[[Page 116 STAT. 416]]

        service to originate and receive high-quality voice, data, 
        graphics, and video.
            ``(2) Eligible rural community.--The term `eligible rural 
        community' means any incorporated or unincorporated place that--
                    ``(A) has not more than 20,000 inhabitants, based on 
                the most recent available population statistics of the 
                Bureau of the Census; and
                    ``(B) is not located in an area designated as a 
                standard metropolitan statistical area.

    ``(c) Loans and Loan Guarantees.--
            ``(1) In general.--The Secretary shall make or guarantee 
        loans to eligible entities described in subsection (d) to 
        provide funds for the construction, improvement, or acquisition 
        of facilities and equipment for the provision of broadband 
        service in eligible rural communities.
            ``(2) Priority.--In making or guaranteeing loans under 
        paragraph (1), the Secretary shall give priority to eligible 
        rural communities in which broadband service is not available to 
        residential customers.

    ``(d) Eligible Entities.--
            ``(1) In general.--To be eligible to obtain a loan or loan 
        guarantee under this section, an entity shall--
                    ``(A) have the ability to furnish, improve, or 
                extend a broadband service to an eligible rural 
                community; and
                    ``(B) submit to the Secretary a proposal for a 
                project that meets the requirements of this section.
            ``(2) State and local governments.--A State or local 
        government (including any agency, subdivision, or 
        instrumentality thereof (including consortia thereof)) shall be 
        eligible for a loan or loan guarantee under this section to 
        provide broadband services to an eligible rural community only 
        if, not later than 90 days after the Administrator has 
        promulgated regulations to carry out this section, no other 
        eligible entity is already offering, or has committed to offer, 
        broadband services to the eligible rural community.
            ``(3) Subscriber lines.--An entity shall not be eligible to 
        obtain a loan or loan guarantee under this section if the entity 
        serves more than 2 percent of the telephone subscriber lines 
        installed in the aggregate in the United States.

    ``(e) Broadband Service.--The Secretary shall, from time to time as 
advances in technology warrant, review and recommend modifications of 
rate-of-data transmission criteria for purposes of the identification of 
broadband service technologies under subsection (b)(1).
    ``(f) Technological Neutrality.--For purposes of determining whether 
or not to make a loan or loan guarantee for a project under this 
section, the Secretary shall use criteria that are technologically 
neutral.
    ``(g) Terms and Conditions for Loans and Loan Guarantees.--
Notwithstanding any other provision of law, a loan or loan guarantee 
under subsection (c) shall--
            ``(1) bear interest at an annual rate of, as determined by 
        the Secretary--
                    ``(A) in the case of a direct loan--

[[Page 116 STAT. 417]]

                          ``(i) the cost of borrowing to the Department 
                      of the Treasury for obligations of comparable 
                      maturity; or
                          ``(ii) 4 percent; and
                    ``(B) in the case of a guaranteed loan, the current 
                applicable market rate for a loan of comparable 
                maturity; and
            ``(2) have a term not to exceed the useful life of the 
        assets constructed, improved, or acquired with the proceeds of 
        the loan or extension of credit.

    ``(h) Use of Loan Proceeds to Refinance Loans for Deployment of 
Broadband Service.--Notwithstanding any other provision of this Act, the 
proceeds of any loan made or guaranteed by the Secretary under this Act 
may be used by the recipient of the loan for the purpose of refinancing 
an outstanding obligation of the recipient on another telecommunications 
loan made under this Act if the use of the proceeds for that purpose 
will further the construction, improvement, or acquisition of facilities 
and equipment for the provision of broadband service in eligible rural 
communities.
    ``(i) Reports.--Not later than 1 year <<NOTE: Deadline.>> after the 
date of enactment of this section, and biennially thereafter, the 
Administrator shall submit to Congress a report that--
            ``(1) describes how the Administrator determines under 
        subsection (a)(1) that a service enables a subscriber to 
        originate and receive high-quality voice, data, graphics, and 
        video; and
            ``(2) provides a detailed list of services that have been 
        granted assistance under this section.

    ``(j) Funding.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, of the funds of the Commodity Credit Corporation, the 
        Secretary shall make available to carry out this section--
                    ``(A) $20,000,000 for each of fiscal years 2002 
                through 2005, to remain available until expended; and
                    ``(B) $10,000,000 for each of fiscal years 2006 and 
                2007, to remain available until expended.
            ``(2) Television funds.--
                    ``(A) In general.--The Secretary shall be entitled 
                to receive, shall accept, and shall use to carry out 
                this section, without further appropriation any funds 
                made available under section 1011(a)(2)(B) of the 
                Launching Our Communities' Access to Local Television 
                Act of 2000 (47 U.S.C. 1109(a)(2)(B)).
                    ``(B) Use of television funds.--The Secretary shall 
                use any funds received under subparagraph (A) in equal 
                amounts for each remaining fiscal year on receipt of the 
                funds (including the fiscal year of receipt) through 
                fiscal year 2007.
            ``(3) Authorization of appropriations.--In addition to funds 
        otherwise made available under this subsection, there are 
        authorized to be appropriated such sums as necessary to carry 
        out this section for each of fiscal years 2003 through 2007.
            ``(4) Allocation of funds.--
                    ``(A) In general.--From amounts made available for 
                each fiscal year under this subsection, the Secretary 
                shall--

[[Page 116 STAT. 418]]

                          ``(i) establish a national reserve for loans 
                      and loan guarantees to eligible entities in States 
                      under this section; and
                          ``(ii) allocate amounts in the reserve to each 
                      State for each fiscal year for loans and loan 
                      guarantees to eligible entities in the State.
                    ``(B) Amount.--The amount of an allocation made to a 
                State for a fiscal year under subparagraph (A) shall 
                bear the same ratio to the amount of allocations made 
                for all States for the fiscal year as the number of 
                communities with a population of 2,500 inhabitants or 
                less in the State bears to the number of communities 
                with a population of 2,500 inhabitants or less in all 
                States, as determined on the basis of the latest 
                available census.
                    ``(C) Unobligated amounts.--Any amounts in the 
                reserve established for a State for a fiscal year under 
                subparagraph (B) that are not obligated by April 1 of 
                the fiscal year shall be available to the Secretary to 
                make loans and loan guarantees under this section to 
                eligible entities in any State, as determined by the 
                Secretary.

    ``(k) Termination of Authority.--No loan or loan guarantee may be 
made under this section after September 30, 2007.''.
    (b) <<NOTE: 7 USC 950bb note.>>  Regulations.--
            (1) In <<NOTE: Deadline.>> general.--Not later than 180 days 
        after the date of enactment of this Act, the Secretary of 
        Agriculture shall promulgate such regulations as are necessary 
        to implement the amendment made by subsection (a).
            (2) Procedure.--The promulgation of the regulations shall be 
        made without regard to--
                    (A) the notice and comment provisions of section 553 
                of title 5, United States Code;
                    (B) the Statement of Policy of the Secretary of 
                Agriculture effective July 24, 1971 (36 Fed. Reg. 
                13804), relating to notices of proposed rulemaking and 
                public participation in rulemaking; and
                    (C) chapter 35 of title 44, United States Code 
                (commonly known as the ``Paperwork Reduction Act'').
            (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.

   Subtitle C--Food, Agriculture, Conservation, and Trade Act of 1990

SEC. 6201. ALTERNATIVE AGRICULTURAL RESEARCH AND COMMERCIALIZATION 
            CORPORATION.

    (a) Repeal of Corporation Authorization.--Subtitle G of title XVI of 
the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 
5901 et seq.) is repealed.
    (b) Disposition <<NOTE: 7 USC 5901 note.>> of Assets.--On the date 
of enactment of this Act--
            (1) the assets, both tangible and intangible, of the 
        Alternative Agricultural Research and Commercialization 
        Corporation (referred to in this section as the 
        ``Corporation''), including the funds in the Alternative 
        Agricultural Research and

[[Page 116 STAT. 419]]

        Commercialization Revolving Fund as of the date of enactment of 
        this Act, are transferred to the Secretary of Agriculture; and
            (2) notwithstanding the Federal Property and Administrative 
        Services Act of 1949 (40 U.S.C. 471 et seq.) and any other law 
        that prescribes procedures for procurement, use, and disposal of 
        property by a Federal agency, the Secretary shall have authority 
        to manage and dispose of the assets transferred under paragraph 
        (1) in a manner that, to the maximum extent practicable, 
        provides the best value to the Federal Government.

    (c) Use of <<NOTE: 7 USC 5901 note.>> Assets.--
            (1) In general.--Funds transferred under subsection (b), and 
        any income from assets or proceeds from the sale of assets 
        transferred under subsection (b), shall be deposited in an 
        account in the Treasury, and shall remain available to the 
        Secretary until expended, without further appropriation, to 
        pay--
                    (A) any claims against, or obligations of, the 
                Corporation; and
                    (B) the costs incurred by the Secretary in carrying 
                out this section.
            (2) Final disposition.--On final disposition of all assets 
        transferred under subsection (b), any funds remaining in the 
        account described in paragraph (1) shall be transferred into 
        miscellaneous receipts in the Treasury.

    (d) Conforming Amendments.--
            (1) Section 5315 of title 5, United States Code, <<NOTE: 5 
        USC 5315.>> is amended by striking ``Executive Director of the 
        Alternative Agricultural Research and Commercialization 
        Corporation''.
            (2) Section 730 of the Federal Agriculture Improvement and 
        Reform Act of 1996 (7 U.S.C. 5902 note; Public Law 104-127) is 
        repealed.
            (3) Section 211(b) of the Department of Agriculture 
        Reorganization Act of 1994 (7 U.S.C. 6911(b)) is amended by 
        striking paragraph (5).
            (4) Section 404(d) of the Agricultural Research, Extension, 
        and Education Reform Act of 1998 (7 U.S.C. 7624(d)) is amended--
                    (A) by striking paragraph (2); and
                    (B) by redesignating paragraphs (3) and (4) as 
                paragraphs (2) and (3), respectively.
            (5) The Herger-Feinstein Quincy Library Group Forest 
        Recovery Act (16 U.S.C. 2104; Public Law 105-277; 112 Stat. 
        2681-305) is amended by striking subsection (m).
            (6) Section 9101(3) of title 31, United States 
        Code, <<NOTE: 31 USC 9101.>>  is amended by striking 
        subparagraph (Q).

SEC. 6202. RURAL ELECTRONIC COMMERCE EXTENSION PROGRAM.

    Subtitle H of title XVI of the Food, Agriculture, Conservation, and 
Trade Act of 1990 is amended by inserting after section 1669 (7 U.S.C. 
5922) the following:

``SEC. 1670. <<NOTE: 7 USC 5923.>> RURAL ELECTRONIC COMMERCE EXTENSION 
            PROGRAM.

    ``(a) Definitions.--In this section:
            ``(1) Development center.--The term `development center' 
        means--
                    ``(A) the North Central Regional Center for Rural 
                Development;

[[Page 116 STAT. 420]]

                    ``(B) the Northeast Regional Center for Rural 
                Development or its designee;
                    ``(C) the Southern Rural Development Center; and
                    ``(D) the Western Rural Development Center or its 
                designee.
            ``(2) Extension program.--The term `extension program' means 
        the rural electronic commerce extension program established 
        under subsection (b).
            ``(3) Microenterprise.--The term `microenterprise' means a 
        commercial enterprise that has 5 or fewer employees, 1 or more 
        of whom own the enterprise.
            ``(4) Secretary.--The term `Secretary' means the Secretary 
        of Agriculture, acting through the Administrator of the 
        Cooperative State Research, Education, and Extension Service.
            ``(5) Small business.--The term `small business' has the 
        meaning given the term `small-business concern' by section 3(a) 
        of the Small Business Act (15 U.S.C. 632(a)).

    ``(b) Establishment.--The Secretary shall establish a rural 
electronic commerce extension program to expand and enhance electronic 
commerce practices and technology to be used by small businesses and 
microenterprises in rural areas.
    ``(c) Grants.--
            ``(1) In general.--The Secretary shall carry out the program 
        established under subsection (b) by making--
                    ``(A) grants to each of the development centers; and
                    ``(B) competitive grants to land-grant colleges and 
                universities (or consortia of land-grant colleges and 
                universities) and to colleges and universities 
                (including community colleges) with agricultural or 
                rural development programs--
                          ``(i) to develop and facilitate innovative 
                      rural electronic commerce business strategies; and
                          ``(ii) to assist small businesses and 
                      microenterprises in identifying, adapting, 
                      implementing, and using electronic commerce 
                      business practices and technologies.
            ``(2) Eligibility.--The selection criteria established for 
        grants awarded under paragraph (1)(B) shall include--
                    ``(A) the ability of an applicant to provide 
                training and education on best practices, technology 
                transfer, adoption, and use of electronic commerce in 
                rural communities by small businesses and 
                microenterprises;
                    ``(B) the extent and geographic diversity of the 
                area served by the proposed project or activity under 
                the extension program;
                    ``(C) in the case of a land-grant college or 
                university, the extent of participation of the land-
                grant college or university in the extension program 
                (including any economic benefits that would result from 
                that participation);
                    ``(D) the percentage of funding and in-kind 
                commitments from non-Federal sources that would be 
                needed by and available for a proposed project or 
                activity under the extension program; and
                    ``(E) the extent of participation of low-income and 
                minority businesses or microenterprises in a proposed 
                project or activity under the extension program.
            ``(3) Non-federal share.--

[[Page 116 STAT. 421]]

                    ``(A) In general.--As a condition of the receipt of 
                funds under this section, a development center or grant 
                applicant shall agree to obtain from non-Federal sources 
                (including State, local, nonprofit, or private sector 
                sources) contributions of an amount equal to 50 percent 
                of the grant amount.
                    ``(B) Form.--The non-Federal share required under 
                subparagraph (A) may be provided in the form of in-kind 
                contributions.
                    ``(C) Exception.--The non-Federal share required 
                under subparagraph (A) may be reduced to 25 percent if 
                the grant recipient serves low-income or minority-owned 
                businesses or microenterprises, as determined by the 
                Secretary.

    ``(d) Report.--Not <<NOTE: Deadline.>> later than 2 years after the 
date of enactment of this section, the Secretary shall submit to the 
Committee on Agriculture of the House of Representatives and the 
Committee on Agriculture, Nutrition, and Forestry of the Senate a report 
that describes--
            ``(1) the policies, practices, and procedures used to assist 
        rural communities in efforts to adopt and use electronic 
        commerce techniques; and

    ``(e) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $60,000,000 for each of fiscal 
years 2002 through 2007, of which not less than \1/3\ of the amount made 
available for each fiscal year shall be used to carry out activities 
under subsection (c)(1)(A).''.

SEC. 6203. TELEMEDICINE AND DISTANCE LEARNING SERVICES IN RURAL AREAS.

    (a) In General.--Section 2335A of the Food, Agriculture, 
Conservation, and Trade Act of 1990 (7 U.S.C. 950aaa-5) is amended by 
striking ``2002'' and inserting ``2007''.
    (b) Conforming Amendment.--Section 1(b) of Public Law 102-551 (7 
U.S.C. 950aaa note) is amended by striking ``1997'' and inserting 
``2007''.

             Subtitle D--SEARCH Grants for Small Communities

SEC. 6301. <<NOTE: 7 USC 2009ee.>>  DEFINITIONS.

    In this subtitle:
            (1) Council.--The term ``council'' means an independent 
        citizens' council established by a State rural development 
        director under section 6302(c).
            (2) Environmental project.--
                    (A) In general.--The term ``environmental project'' 
                means a project that--
                          (i) improves environmental quality; and
                          (ii) is necessary to comply with an applicable 
                      environmental law (including a regulation).
                    (B) Inclusion.--The term ``environmental project'' 
                includes an initial feasibility study of a project.
            (3) Region.--The term ``region'' means a geographic area of 
        a State, as determined by the State rural development

[[Page 116 STAT. 422]]

        director, in coordination with the environmental protection 
        director of the State.
            (4) SEARCH grant.--The term ``SEARCH grant'' means a grant 
        awarded under section 6302(f).
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.
            (6) Small community.--The term ``small community'' means an 
        incorporated or unincorporated rural community with a population 
        of 2,500 inhabitants or less.
            (7) State.--The term ``State'' has the meaning given the 
        term in section 381A of the Consolidated Farm and Rural 
        Development Act (7 U.S.C. 2009).

SEC. 6302. <<NOTE: 7 USC 2009ee-1.>>  SEARCH GRANT PROGRAM.

    (a) In General.--The Secretary, in coordination with the 
Administrator of the Environmental Protection Agency, may establish the 
SEARCH grant program.
    (b) Allocation to State Rural Development Directors.--
            (1) In <<NOTE: Deadline.>> general.--Subject to paragraph 
        (2) and section 6304(a)(2), not later than 60 days after the 
        date on which the Director of the Office of Management and 
        Budget apportions any amounts made available under this subtitle 
        for any of fiscal years 2002 through 2007, the Secretary, on 
        request of a State rural development director (in coordination 
        with the environmental protection director of the State), shall 
        allocate to the State rural development director an amount not 
        to exceed $1,000,000, to be used by the State rural development 
        director to award SEARCH grants under subsection (d).
            (2) Grants to states.--The total amount of funds allocated 
        to State rural development directors in all States other than 
        Alaska, Hawaii, or the 48 contiguous States for a fiscal year 
        under this subsection shall not exceed $1,000,000.

    (c) Independent Citizens' Council.--
            (1) Establishment.--The State rural development director of 
        a State shall establish an independent citizens' council to 
        carry out the duties described in this section.
            (2) Composition.--
                    (A) In general.--A council shall be composed of 9 
                members, appointed by the State rural development 
                director, in coordination with the environmental 
                protection director of the State.
                    (B) Representation; residence.--Each member of a 
                council shall--
                          (i) represent an individual region of the 
                      State, as determined by the State rural 
                      development director; and
                          (ii) reside in a small community in the State.

    (d) Eligibility.--A SEARCH grant shall be awarded under this section 
only to a small community for 1 or more environmental projects for which 
the small community--
            (1) needs funds to carry out initial feasibility or 
        environmental studies as required by Federal or State law before 
        applying to traditional funding sources; and
            (2) demonstrates that the small community has been unable to 
        obtain sufficient funding from traditional funding sources.

[[Page 116 STAT. 423]]

    (e) Applications.--To be eligible to receive a SEARCH grant, a small 
community in a State shall submit to the State rural development 
director of the State an application that includes--
            (1) a description of the proposed environmental project 
        (including an explanation of how the project would assist the 
        small community in complying with a Federal or State 
        environmental law (including a regulation);
            (2) an explanation of why the project is important to the 
        small community;
            (3) a description of all actions taken with respect to the 
        project as of the date of the application, including any attempt 
        to secure funding; and
            (4) a description of demonstrated need for funding for the 
        project.

    (f) Awards.--
            (1) In <<NOTE: Deadline.>> general.--Not later than May 1 of 
        each fiscal year, a State rural development director, in 
        coordination with the council and the environmental protection 
        director of the State, shall--
                    (A) review all applications received by the State 
                rural development director under subsection (e); and
                    (B) award SEARCH grants to small communities based 
                on--
                          (i) an evaluation of whether the proposed 
                      project meets the eligibility criteria under 
                      subsection (d); and
                          (ii) the content of the application.
            (2) Administration.--In awarding a SEARCH grant, a State 
        rural development director--
                    (A) shall award the funds for any recommended 
                environmental project in a timely and expeditious 
                manner; and
                    (B) shall not award a SEARCH grant to a grantee or 
                project in violation of any Federal or State law 
                (including a regulation).
            (3) Matching requirement.--A small community that receives a 
        SEARCH grant under this section may be required to provide 
        matching funds.

    (g) Unexpended Funds.--
            (1) In <<NOTE: Deadline.>> general.--If, for any fiscal 
        year, any unexpended funds remain after SEARCH grants are 
        awarded by a State rural development director under subsection 
        (f), the State rural development director, in coordination with 
        the environmental protection director of the State, may repeat 
        the application and review process so that any remaining funds 
        are recommended for award, and awarded, not later than July 30 
        of the fiscal year.
            (2) Retention of funds.--
                    (A) In general.--Any unexpended funds that are not 
                awarded under subsection (f) or paragraph (1) shall be 
                retained by the State rural development director for 
                award during the following fiscal year.
                    (B) Limitation.--A State SEARCH account that 
                accumulates a balance of unexpended funds described in 
                subparagraph (A) in excess of $2,000,000 shall be 
                ineligible to receive additional funds for SEARCH grants 
                until such time as the State rural development director 
                awards grants in the amount of the excess.

[[Page 116 STAT. 424]]

SEC. 6303. <<NOTE: Deadline. 7 USC 2009ee-2.>>  REPORT.

    Not later than 30 days after the end of the first fiscal year for 
which SEARCH grants are awarded, and annually thereafter, the Secretary 
shall submit to the Committee on Energy and Commerce and the Committee 
on Agriculture of the House of Representatives and the Committee on 
Agriculture, Nutrition, and Forestry of the Senate a report that--
            (1) describes the number of SEARCH grants awarded during the 
        fiscal year;
            (2) identifies each small community that received a SEARCH 
        grant during the fiscal year;
            (3) describes the project or purpose for which each SEARCH 
        grant was awarded, including a statement of the benefit to 
        public health or the environment of the environmental project 
        receiving the grant funds; and
            (4) describes the status of each project or portion of a 
        project for which a SEARCH grant was awarded, including a 
        project or portion of a project for which a SEARCH grant was 
        awarded for any previous fiscal year.

SEC. 6304. <<NOTE: 7 USC 2009ee-3.>>  FUNDING.

    (a) Allocation to State Rural Development Directors.--
            (1) Authorization of appropriations.--There is authorized to 
        be appropriated to carry out section 6302(b) $51,000,000 for 
        each of fiscal years 2002 through 2007, of which not to exceed 
        $1,000,000 shall be used to make grants under section 
        6302(b)(2).
            (2) Actual appropriation.--If funds to carry out section 
        6302(b) are made available for a fiscal year in an amount that 
        is less than the amount authorized under paragraph (1) for the 
        fiscal year, the Secretary shall divide the appropriated funds 
        for the fiscal year equally among the 50 States.

    (b) Other Expenses.--There are authorized to be appropriated such 
sums as are necessary to carry out this subtitle (other than section 
6302(b)).

                        Subtitle E--Miscellaneous

SEC. 6401. VALUE-ADDED AGRICULTURAL PRODUCT MARKET DEVELOPMENT GRANTS.

    (a) In General.--Section 231 of the Agricultural Risk Protection Act 
of 2000 (7 U.S.C. 1621 note; Public Law 106-224) is amended--
            (1) by redesignating subsections (b) through (d) as 
        subsections (c) through (e), respectively;
            (2) by striking subsection (a) and inserting the following:

    ``(a) Definition of Value-Added Agricultural Product.--
            ``(1) In general.--The term `value-added agricultural 
        product' means any agricultural commodity or product that--
                    ``(A)(i) has undergone a change in physical state;
                    ``(ii) was produced in a manner that enhances the 
                value of the agricultural commodity or product, as 
                demonstrated through a business plan that shows the 
                enhanced value, as determined by the Secretary; or

[[Page 116 STAT. 425]]

                    ``(iii) is physically segregated in a manner that 
                results in the enhancement of the value of the 
                agricultural commodity or product; and
                    ``(B) as a result of the change in physical state or 
                the manner in which the agricultural commodity or 
                product was produced or segregated--
                          ``(i) the customer base for the agricultural 
                      commodity or product has been expanded; and
                          ``(ii) a greater portion of the revenue 
                      derived from the marketing, processing, or 
                      physical segregation of the agricultural commodity 
                      or product is available to the producer of the 
                      commodity or product.
            ``(2) Inclusion.--The term `value-added agricultural 
        product' includes farm- or ranch-based renewable energy.

    ``(b) Grant Program.--
            ``(1) In general.--From amounts made available under 
        paragraph (4), the Secretary shall award competitive grants--
                    ``(A) to an eligible independent producer (as 
                determined by the Secretary) of a value-added 
                agricultural product to assist the producer--
                          ``(i) in developing a business plan for viable 
                      marketing opportunities for the value-added 
                      agricultural product; or
                          ``(ii) in developing strategies that are 
                      intended to create marketing opportunities for the 
                      producer; and
                    ``(B) to an eligible agricultural producer group, 
                farmer or rancher cooperative, or majority-controlled 
                producer-based business venture (as determined by the 
                Secretary) to assist the entity--
                          ``(i) in developing a business plan for viable 
                      marketing opportunities in emerging markets for a 
                      value-added agricultural product; or
                          ``(ii) in developing strategies that are 
                      intended to create marketing opportunities in 
                      emerging markets for the value-added agricultural 
                      product.
            ``(2) Amount of grant.--
                    ``(A) In general.--The total amount provided under 
                this subsection to a grant recipient shall not exceed 
                $500,000.
                    ``(B) Majority-controlled producer-based business 
                ventures.--The amount of grants provided to majority-
                controlled producer-based business ventures under 
                paragraph (1)(B) for a fiscal year may not exceed 10 
                percent of the amount of funds that are used to make 
                grants for the fiscal year under this subsection.
            ``(3) Grantee strategies.--A grantee under paragraph (1) 
        shall use the grant--
                    ``(A) to develop a business plan or perform a 
                feasibility study to establish a viable marketing 
                opportunity for a value-added agricultural product; or
                    ``(B) to provide capital to establish alliances or 
                business ventures that allow the producer of the value-
                added agricultural product to better compete in domestic 
                or international markets.
            ``(4) Funding.--Not <<NOTE: Deadline.>> later than 30 days 
        after the date of enactment of this paragraph, on October 1, 
        2002, and on each October 1 thereafter through October 1, 2006, 
        of the funds

[[Page 116 STAT. 426]]

        of the Commodity Credit Corporation, the Secretary shall make 
        available to carry out this subsection $40,000,000, to remain 
        available until expended.'';
            (3) in subsection (c)(1) (as redesignated by paragraph 
        (1))--
                    (A) by striking ``subsection (a)(2)'' and inserting 
                ``subsection (b)(2)'';
                    (B) by striking ``$5,000,000'' and inserting ``5 
                percent''; and
                    (C) by striking ``subsection (a)'' and inserting 
                ``subsection (b)''; and
            (4) in subsection (d) (as redesignated by paragraph (1)), by 
        striking ``subsections (a) and (b)'' and inserting ``subsections 
        (b) and (c)''.

    (b) <<NOTE: 7 USC 1621 note.>>  Applicability.--
            (1) In general.--Except <<NOTE: Effective date.>> as 
        provided in paragraph (2), the amendments made by subsection (a) 
        apply beginning on October 1, 2002.
            (2) Funding.--Funds <<NOTE: Deadline.>> made available under 
        section 231(b)(4)(A)(i) of the Agricultural Risk Protection Act 
        of 2000 (as amended by subsection (a)(2)) shall be made 
        available not later than 30 days after the date of enactment of 
        this Act.

SEC. 6402. <<NOTE: 7 USC 1621 note.>> AGRICULTURE INNOVATION CENTER 
            DEMONSTRATION PROGRAM.

    (a) Purpose.--The purpose of this section is to direct the Secretary 
of Agriculture to establish a demonstration program under which 
agricultural producers are provided--
            (1) technical assistance, consisting of engineering 
        services, applied research, scale production, and similar 
        services, to enable the agricultural producers to establish 
        businesses to produce value-added agricultural commodities or 
        products;
            (2) assistance in marketing, market development, and 
        business planning; and
            (3) organizational, outreach, and development assistance to 
        increase the viability, growth, and sustainability of businesses 
        that produce value-added agricultural commodities or products.

    (b) Definitions.--In this section:
            (1) Program.--The term ``Program'' means the Agriculture 
        Innovation Center Demonstration Program established under 
        subsection (c).
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.

    (c) Establishment of Program.--The Secretary shall establish a 
demonstration program, to be known as the ``Agriculture Innovation 
Center Demonstration Program'' under which the Secretary shall--
            (1) make <<NOTE: Grants.>> grants to assist eligible 
        entities in establishing Agriculture Innovation Centers to 
        enable agricultural producers to obtain the assistance described 
        in subsection (a); and
            (2) provide assistance to eligible entities in establishing 
        Agriculture Innovation Centers through the research and 
        technical services of the Department of Agriculture.

    (d) Eligibility Requirements.--
            (1) In general.--An entity shall be eligible for a grant and 
        assistance described in subsection (c) to establish an 
        Agriculture Innovation Center if--

[[Page 116 STAT. 427]]

                    (A) the entity--
                          (i) has provided services similar to the 
                      services described in subsection (a); or
                          (ii) demonstrates the capability of providing 
                      such services;
                    (B) the application of the entity for the grant and 
                assistance includes a plan, in accordance with 
                regulations promulgated by the Secretary, that 
                outlines--
                          (i) the support for the entity in the 
                      agricultural community;
                          (ii) the technical and other expertise of the 
                      entity; and
                          (iii) the goals of the entity for increasing 
                      and improving the ability of local agricultural 
                      producers to develop markets and processes for 
                      value-added agricultural commodities or products;
                    (C) the entity demonstrates that adequate resources 
                (in cash or in kind) are available, or have been 
                committed to be made available, to the entity, to 
                increase and improve the ability of local agricultural 
                producers to develop markets and processes for value-
                added agricultural commodities or products; and
                    (D) the Agriculture Innovation Center of the entity 
                has a board of directors established in accordance with 
                paragraph (2).
            (2) Board <<NOTE: Establishment.>> of directors.--Each 
        Agriculture Innovation Center of an eligible entity shall have a 
        board of directors composed of representatives of each of the 
        following groups:
                    (A) The 2 general agricultural organizations with 
                the greatest number of members in the State in which the 
                eligible entity is located.
                    (B) The department of agriculture, or similar State 
                department or agency, of the State in which the eligible 
                entity is located.
                    (C) Entities representing the 4 highest grossing 
                commodities produced in the State, determined on the 
                basis of annual gross cash sales.

    (e) Grants and Assistance.--
            (1) In general.--Subject to subsection (i), under the 
        Program, the Secretary shall make, on a competitive basis, 
        annual grants to eligible entities.
            (2) Maximum amount of grants.--A grant under paragraph (1) 
        shall be in an amount that does not exceed the lesser of--
                    (A) $1,000,000; or
                    (B) twice the dollar amount of the resources (in 
                cash or in kind) that the eligible entity demonstrates 
                are available, or have been committed to be made 
                available, to the eligible entity in accordance with 
                subsection (d)(1)(C).
            (3) Maximum number of grants.--
                    (A) First fiscal year of program.--In the first 
                fiscal year of the Program, the Secretary shall make 
                grants to not more than 5 eligible entities.
                    (B) Second fiscal year of program.--In the second 
                fiscal year of the Program, the Secretary may make 
                grants to--

[[Page 116 STAT. 428]]

                          (i) the eligible entities to which grants were 
                      made under subparagraph (A); and
                          (ii) not more than 10 additional eligible 
                      entities.
            (4) State limitation.--
                    (A) In general.--Subject to subparagraph (B), in the 
                first 3 fiscal years of the Program, the Secretary shall 
                not make a grant under the Program to more than 1 entity 
                in any 1 State.
                    (B) Collaboration.--Nothing in subparagraph (A) 
                precludes a recipient of a grant under the Program from 
                collaborating with any other institution with respect to 
                activities conducted using the grant.

    (f) Use of Funds.--An eligible entity to which a grant is made under 
the Program may use the grant only for the following purposes (but only 
to the extent that the use is not described in section 231(d) of the 
Agricultural Risk Protection Act of 2000 (7 U.S.C. 1621 note; Public Law 
106-224)):
            (1) Applied research.
            (2) Consulting services.
            (3) Hiring of employees, at the discretion of the board of 
        directors of the Agriculture Innovation Center of the eligible 
        entity.
            (4) The making of matching grants, each of which shall be in 
        an amount not to exceed $5,000, to agricultural producers, 
        except that the aggregate amount of all such matching grants 
        made by the eligible entity shall be not more than $50,000.
            (5) Legal services.
            (6) Any other related cost, as determined by the Secretary.

    (g) Research on Effects on the Agricultural Sector.--
            (1) In general.--Of the amount made available under 
        subsection (i) for each fiscal year, the Secretary shall use 
        $300,000 to support research at a university concerning the 
        effects of projects for value-added agricultural commodities or 
        products on agricultural producers and the commodity markets.
            (2) Research elements.--Research under paragraph (1) shall 
        systematically examine, using linked, long-term, global 
        projections of the agricultural sector, the potential effects of 
        projects described in subparagraph (A) on--
                    (A) demand for agricultural commodities;
                    (B) market prices;
                    (C) farm income; and
                    (D) Federal outlays on commodity programs.

    (h) Report to Congress.--
            (1) In <<NOTE: Deadline.>> general.--Not later than 3 years 
        after the date on which the last of the first 10 grants is made 
        under the Program, 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 
        on--
                    (A) the effectiveness of the Program in improving 
                and expanding the production of value-added agricultural 
                commodities or products; and
                    (B) the effects of the Program on the economic 
                viability of agricultural producers.
            (2) Required elements.--The report under paragraph (1) 
        shall--

[[Page 116 STAT. 429]]

                    (A) include a description of the best practices and 
                innovations found at each of the Agriculture Innovation 
                Centers established under the Program; and
                    (B) specify the number and type of activities 
                assisted, and the type of assistance provided, under the 
                Program.

    (i) Funding.--Of the amount made available under section 231(a)(1) 
of the Agricultural Risk Protection Act of 2000 (7 U.S.C. 1621 note; 
Public Law 106-224) for each fiscal year, the Secretary shall use to 
carry out this section--
            (1) not less than $3,000,000 for fiscal year 2002; and
            (2) not less than $6,000,000 for each of fiscal years 2003 
        and 2004.

SEC. 6403. FUND FOR RURAL AMERICA.

    (a) In General.--Section 793 of the Federal Agriculture Improvement 
and Reform Act of 1996 (7 U.S.C. 2204f) is repealed.
    (b) Conforming Amendment.--Section 2(b)(8)(B) of the Competitive, 
Special, and Facilities Research Grant Act (7 U.S.C. 450i(b)(8)(B)) is 
amended in the second sentence by striking ``smaller college or 
university (as described in section 793(c)(2)(ii) of the Federal 
Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 
2204f(c)(2)(ii))'' and inserting ``college, university, or research 
foundation maintained by a college or university that ranks in the 
lowest \1/3\ of such colleges, universities, and research foundations on 
the basis of Federal research funds received''.

SEC. 6404. RURAL LOCAL TELEVISION BROADCAST SIGNAL LOAN GUARANTEES.

    (a) In General.--Section 1011(a) of the Launching Our Communities' 
Access to Local Television Act of 2000 (47 U.S.C. 1109(a)) is amended--
            (1) by striking ``For'' and inserting the following:
            ``(1) Authorization of appropriations.--For''; and
            (2) by adding at the end the following:
            ``(2) Commodity credit corporation funds.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, subject to subparagraph (B), in 
                addition to amounts made available under paragraph (1), 
                of the funds of the Commodity Credit Corporation, the 
                Secretary of Agriculture shall make available for loan 
                guarantees to carry out this title $80,000,000 for the 
                period beginning on the date of enactment of this 
                paragraph and ending on December 31, 2006, to remain 
                available until expended.
                    ``(B) Broadband loans and loan guarantees.--
                          ``(i) In general.--Amounts made available 
                      under subparagraph (A) that are not obligated as 
                      of the release date described in clause (ii) shall 
                      be available to the Secretary to make loans and 
                      loan guarantees under section 601 of the Rural 
                      Electrification Act of 1936.
                          ``(ii) Release date.--For purposes of clause 
                      (i), the release date is the date that is the 
                      earlier of--
                                    ``(I) the date the Secretary 
                                determines that at least 75 percent of 
                                the designated market areas (as defined 
                                in section 122(j) of title 17, United 
                                States Code) not in the top 40 
                                designated market areas described in 
                                section 1004(e)(1)(C)(i) of the

[[Page 116 STAT. 430]]

                                Launching Our Communities' Access to 
                                Local Television Act of 2000 (47 U.S.C. 
                                1103(e)(1)(C)(i)) have access to local 
                                television broadcast signals for 
                                virtually all households (as determined 
                                by the Secretary); or
                                    ``(II) December 31, 2006.
                    ``(C) Advanced appropriations.--Subsections (c) and 
                (h)(1)(B) of section 1004 and section 1005(n)(3)(B) 
                shall not apply to amounts made available under this 
                paragraph.''.

    (b) Technical and Conforming Amendments.--
            (1) Approval of loan guarantees.--Section 1004 of the 
        Launching Our Communities' Access to Local Television Act of 
        2000 (47 U.S.C. 1103) is amended--
                    (A) in subsection (b)(1)--
                          (i) by striking ``section 5'' and inserting 
                      ``section 1005''; and
                          (ii) by striking ``section 11'' and inserting 
                      ``section 1011'';
                    (B) in subsection (d)(1), by striking ``section 3'' 
                and inserting ``section 1003''; and
                    (C) in the first sentence of subsection (h)(2)(D), 
                by striking ``section 5'' and inserting ``section 
                1005''.
            (2) Administration of loan guarantees.--Section 1005 of the 
        Launching Our Communities' Access to Local Television Act of 
        2000 (47 U.S.C. 1104) is amended--
                    (A) in subsection (a), by striking ``sections 3 and 
                4'' and inserting ``sections 1003 and 1004'';
                    (B) in subsection (b)--
                          (i) in paragraph (1)(D), by striking ``section 
                      6(a)(2)'' and inserting ``section 1006(a)(2)''; 
                      and
                          (ii) in paragraph (3), by striking ``section 
                      4(d)(3)(B)(iii)'' and inserting ``section 
                      1004(d)(3)(B)(iii)''; and
                    (C) in subsection (e)(3), by striking ``section 
                4(g)'' and inserting ``section 1004(g)''.

SEC. 6405. <<NOTE: 7 USC 2655.>>  RURAL FIREFIGHTERS AND EMERGENCY 
            PERSONNEL GRANT PROGRAM.

    (a) In General.--The Secretary of Agriculture may make grants to 
units of general local government and Indian tribes (as defined in 
section 4 of the Indian Self-Determination and Education Assistance Act 
(25 U.S.C. 450b)) to pay the cost of training firefighters and emergency 
medical personnel in firefighting, emergency medical practices, and 
responding to hazardous materials and bioagents in rural areas.
    (b) Use of Funds.--
            (1) Scholarships.--
                    (A) In general.--Not less than 60 percent of the 
                amounts made available for competitively-awarded grants 
                under this section shall be used to provide grants to 
                fund partial scholarships for training of individuals at 
                training centers approved by the Secretary.
                    (B) Priority.--In awarding grants under this 
                paragraph, the Secretary shall give priority to grant 
                applicants that provide for training within the region 
                (or locality) of the applicant.

[[Page 116 STAT. 431]]

            (2) Grants for training centers.--
                    (A) In general.--A grant under subsection (a) may be 
                used to provide financial assistance to State and 
                regional centers that provide training for firefighters 
                and emergency medical personnel for improvements to the 
                training facility, equipment, curricula, and personnel.
                    (B) Limitation.--Not more than $750,000 shall be 
                provided to any single training center for any fiscal 
                year under this paragraph.

    (c) Funding.--Of the funds of the Commodity Credit Corporation, the 
Secretary shall make available to carry out this section $10,000,000 for 
each of fiscal years 2003 through 2007, to remain available until 
expended.

SEC. 6406. SENSE OF CONGRESS ON RURAL POLICY COORDINATION.

    It is the sense of Congress that the President should--
            (1) appoint a Special Assistant to the President for Rural 
        Policy;
            (2) designate within each Federal agency with jurisdiction 
        over rural programs or activities 1 or more senior officers or 
        employees to provide rural policy leadership for the agency; and
            (3) create an intergovernmental rural policy working group 
        comprised of--
                    (A) the Special Assistant to the President for Rural 
                Policy, who should serve as Chairperson; and
                    (B) the senior officers and employees designated 
                under paragraph (2).

                 TITLE VII--RESEARCH AND RELATED MATTERS

                         Subtitle A--