[110th Congress Public Law 234]
[From the U.S. Government Printing Office]


[DOCID: f:publ234.110]

[[Page 122 STAT. 923]]

Public Law 110-234
110th Congress

                                 An Act


 
To provide for the continuation of agricultural programs through fiscal 
    year 2012, and for other purposes. <<NOTE: May 22, 2008 -  [H.R. 
                                2419]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: Food, 
Conservation, and Energy Act of 2008.>> 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This <<NOTE: 7 USC 8701 note.>> Act may be cited 
as the ``Food, Conservation, and Energy Act of 2008''.

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

Sec. 1. Short title; table of contents.
Sec. 2. Definition of Secretary.

                       TITLE I--COMMODITY PROGRAMS

Sec. 1001. Definitions.

        Subtitle A--Direct Payments and Counter-Cyclical Payments

Sec. 1101. Base <<NOTE: 7 USC 8702.>> acres.

Sec. 1102. Payment yields.
Sec. 1103. Availability of direct payments.
Sec. 1104. Availability of counter-cyclical payments.
Sec. 1105. Average crop revenue election program.
Sec. 1106. Producer agreement required as condition of provision of 
           payments.
Sec. 1107. Planting flexibility.
Sec. 1108. Special rule for long grain and medium grain rice.
Sec. 1109. 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.
Sec. 1210. Adjustments of loans.

                           Subtitle C--Peanuts

Sec. 1301. Definitions.
Sec. 1302. 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 
           payments.
Sec. 1306. Planting flexibility.
Sec. 1307. Marketing assistance loans and loan deficiency payments for 
           peanuts.
Sec. 1308. Adjustments of loans.

                            Subtitle D--Sugar

Sec. 1401. Sugar program.

[[Page 122 STAT. 924]]

Sec. 1402. United States membership in the International Sugar 
           Organization.
Sec. 1403. Flexible marketing allotments for sugar.
Sec. 1404. Storage facility loans.
Sec. 1405. Commodity Credit Corporation storage payments.

                            Subtitle E--Dairy

Sec. 1501. Dairy product price support program.
Sec. 1502. Dairy forward pricing program.
Sec. 1503. Dairy export incentive program.
Sec. 1504. Revision of Federal marketing order amendment procedures.
Sec. 1505. Dairy indemnity program.
Sec. 1506. Milk income loss contract program.
Sec. 1507. Dairy promotion and research program.
Sec. 1508. Report on Department of Agriculture reporting procedures for 
           nonfat dry milk.
Sec. 1509. Federal Milk Marketing Order Review Commission.
Sec. 1510. Mandatory reporting of dairy commodities.

                       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. Availability of quality incentive payments for covered 
           oilseed producers.
Sec. 1606. Personal liability of producers for deficiencies.
Sec. 1607. Extension of existing administrative authority regarding 
           loans.
Sec. 1608. Assignment of payments.
Sec. 1609. Tracking of benefits.
Sec. 1610. Government publication of cotton price forecasts.
Sec. 1611. Prevention of deceased individuals receiving payments under 
           farm commodity programs.
Sec. 1612. Hard white wheat development program.
Sec. 1613. Durum wheat quality program.
Sec. 1614. Storage facility loans.
Sec. 1615. State, county, and area committees.
Sec. 1616. Prohibition on charging certain fees.
Sec. 1617. Signature authority.
Sec. 1618. Modernization of Farm Service Agency.
Sec. 1619. Information gathering.
Sec. 1620. Leasing of office space.
Sec. 1621. Geographically disadvantaged farmers and ranchers.
Sec. 1622. Implementation.
Sec. 1623. Repeals.

                         TITLE II--CONSERVATION

      Subtitle A--Definitions and Highly Erodible Land and Wetland 
                              Conservation

Sec. 2001. Definitions relating to conservation title of Food Security 
           Act of 1985.
Sec. 2002. Review of good faith determinations related to highly 
           erodible land conservation.
Sec. 2003. Review of good faith determinations related to wetland 
           conservation.

                Subtitle B--Conservation Reserve Program

Sec. 2101. Extension of conservation reserve program.
Sec. 2102. Land eligible for enrollment in conservation reserve.
Sec. 2103. Maximum enrollment of acreage in conservation reserve.
Sec. 2104. Designation of conservation priority areas.
Sec. 2105. Treatment of multi-year grasses and legumes.
Sec. 2106. Revised pilot program for enrollment of wetland and buffer 
           acreage in conservation reserve.
Sec. 2107. Additional duty of participants under conservation reserve 
           contracts.
Sec. 2108. Managed haying, grazing, or other commercial use of forage on 
           enrolled land and installation of wind turbines.
Sec. 2109. Cost sharing payments relating to trees, windbreaks, 
           shelterbelts, and wildlife corridors.
Sec. 2110. Evaluation and acceptance of contract offers, annual rental 
           payments, and payment limitations.
Sec. 2111. Conservation reserve program transition incentives for 
           beginning farmers or ranchers and socially disadvantaged 
           farmers or ranchers.

                  Subtitle C--Wetlands Reserve Program

Sec. 2201. Establishment and purpose of wetlands reserve program.

[[Page 122 STAT. 925]]

Sec. 2202. Maximum enrollment and enrollment methods.
Sec. 2203. Duration of wetlands reserve program and lands eligible for 
           enrollment.
Sec. 2204. Terms of wetlands reserve program easements.
Sec. 2205. Compensation for easements under wetlands reserve program.
Sec. 2206. Wetlands reserve enhancement program and reserved rights 
           pilot program.
Sec. 2207. Duties of Secretary of Agriculture under wetlands reserve 
           program.
Sec. 2208. Payment limitations under wetlands reserve contracts and 
           agreements.
Sec. 2209. Repeal of payment limitations exception for State agreements 
           for wetlands reserve enhancement.
Sec. 2210. Report on implications of long-term nature of conservation 
           easements.

              Subtitle D--Conservation Stewardship Program

Sec. 2301. Conservation stewardship program.

          Subtitle E--Farmland Protection and Grassland Reserve

Sec. 2401. Farmland protection program.
Sec. 2402. Farm viability program.
Sec. 2403. Grassland reserve program.

          Subtitle F--Environmental Quality Incentives Program

Sec. 2501. Purposes of environmental quality incentives program.
Sec. 2502. Definitions.
Sec. 2503. Establishment and administration of environmental quality 
           incentives program.
Sec. 2504. Evaluation of applications.
Sec. 2505. Duties of producers under environmental quality incentives 
           program.
Sec. 2506. Environmental quality incentives program plan.
Sec. 2507. Duties of the Secretary.
Sec. 2508. Limitation on environmental quality incentives program 
           payments.
Sec. 2509. Conservation innovation grants and payments.
Sec. 2510. Agricultural water enhancement program.

Subtitle G--Other Conservation Programs of the Food Security Act of 1985

Sec. 2601. Conservation of private grazing land.
Sec. 2602. Wildlife habitat incentive program.
Sec. 2603. Grassroots source water protection program.
Sec. 2604. Great Lakes Basin Program for soil erosion and sediment 
           control.
Sec. 2605. Chesapeake Bay watershed program.
Sec. 2606. Voluntary public access and habitat incentive program.

     Subtitle H--Funding and Administration of Conservation Programs

Sec. 2701. Funding of conservation programs under Food Security Act of 
           1985.
Sec. 2702. Authority to accept contributions to support conservation 
           programs.
Sec. 2703. Regional equity and flexibility.
Sec. 2704. Assistance to certain farmers and ranchers to improve their 
           access to conservation programs.
Sec. 2705. Report regarding enrollments and assistance under 
           conservation programs.
Sec. 2706. Delivery of conservation technical assistance.
Sec. 2707. Cooperative conservation partnership initiative.
Sec. 2708. Administrative requirements for conservation programs.
Sec. 2709. Environmental services markets.
Sec. 2710. Agriculture conservation experienced services program.
Sec. 2711. Establishment of State technical committees and their 
           responsibilities.

           Subtitle I--Conservation Programs Under Other Laws

Sec. 2801. Agricultural management assistance program.
Sec. 2802. Technical assistance under Soil Conservation and Domestic 
           Allotment Act.
Sec. 2803. Small watershed rehabilitation program.
Sec. 2804. Amendments to Soil and Water Resources Conservation Act of 
           1977.
Sec. 2805. Resource Conservation and Development Program.
Sec. 2806. Use of funds in Basin Funds for salinity control activities 
           upstream of Imperial Dam.
Sec. 2807. Desert terminal lakes.

            Subtitle J--Miscellaneous Conservation Provisions

Sec. 2901. High Plains water study.
Sec. 2902. Naming of National Plant Materials Center at Beltsville, 
           Maryland, in honor of Norman A. Berg.

[[Page 122 STAT. 926]]

Sec. 2903. Transition.
Sec. 2904. Regulations.

                            TITLE III--TRADE

                     Subtitle A--Food for Peace Act

Sec. 3001. Short title.
Sec. 3002. United States policy.
Sec. 3003. Food aid to developing countries.
Sec. 3004. Trade and development assistance.
Sec. 3005. Agreements regarding eligible countries and private entities.
Sec. 3006. Use of local currency payments.
Sec. 3007. General authority.
Sec. 3008. Provision of agricultural commodities.
Sec. 3009. Generation and use of currencies by private voluntary 
           organizations and cooperatives.
Sec. 3010. Levels of assistance.
Sec. 3011. Food Aid Consultative Group.
Sec. 3012. Administration.
Sec. 3013. Assistance for stockpiling and rapid transportation, 
           delivery, and distribution of shelf-stable prepackaged foods.
Sec. 3014. General authorities and requirements.
Sec. 3015. Definitions.
Sec. 3016. Use of Commodity Credit Corporation.
Sec. 3017. Administrative provisions.
Sec. 3018. Consolidation and modification of annual reports regarding 
           agricultural trade issues.
Sec. 3019. Expiration of assistance.
Sec. 3020. Authorization of appropriations.
Sec. 3021. Minimum level of nonemergency food assistance.
Sec. 3022. Coordination of foreign assistance programs.
Sec. 3023. Micronutrient fortification programs.
Sec. 3024. John Ogonowski and Doug Bereuter Farmer-to-Farmer Program.

     Subtitle B--Agricultural Trade Act of 1978 and Related Statutes

Sec. 3101. Export credit guarantee program.
Sec. 3102. Market access program.
Sec. 3103. Export enhancement program.
Sec. 3104. Foreign market development cooperator program.
Sec. 3105. Food for Progress Act of 1985.
Sec. 3106. McGovern-Dole International Food for Education and Child 
           Nutrition Program.

                        Subtitle C--Miscellaneous

Sec. 3201. Bill Emerson Humanitarian Trust.
Sec. 3202. Global Crop Diversity Trust.
Sec. 3203. Technical assistance for specialty crops.
Sec. 3204. Emerging markets and facility guarantee loan program.
Sec. 3205. Consultative Group to Eliminate the Use of Child Labor and 
           Forced Labor in Imported Agricultural Products.
Sec. 3206. Local and regional food aid procurement projects.

                       Subtitle D--Softwood Lumber

Sec. 3301. Softwood lumber.

                           TITLE IV--NUTRITION

                     Subtitle A--Food Stamp Program

             PART I--Renaming of Food Stamp Act and Program

Sec. 4001. Renaming of Food Stamp Act and program.
Sec. 4002. Conforming amendments.

                      PART II--Benefit Improvements

Sec. 4101. Exclusion of certain military payments from income.
Sec. 4102. Strengthening the food purchasing power of low-income 
           Americans.
Sec. 4103. Supporting working families with child care expenses.
Sec. 4104. Asset indexation, education, and retirement accounts.
Sec. 4105. Facilitating simplified reporting.
Sec. 4106. Transitional benefits option.
Sec. 4107. Increasing the minimum benefit.

[[Page 122 STAT. 927]]

Sec. 4108. Employment, training, and job retention.

                      PART III--Program Operations

Sec. 4111. Nutrition education.
Sec. 4112. Technical clarification regarding eligibility.
Sec. 4113. Clarification of split issuance.
Sec. 4114. Accrual of benefits.
Sec. 4115. Issuance and use of program benefits.
Sec. 4116. Review of major changes in program design.
Sec. 4117. Civil rights compliance.
Sec. 4118. Codification of access rules.
Sec. 4119. State option for telephonic signature.
Sec. 4120. Privacy protections.
Sec. 4121. Preservation of access and payment accuracy.
Sec. 4122. Funding of employment and training programs.

                       PART IV--Program Integrity

Sec. 4131. Eligibility disqualification.
Sec. 4132. Civil penalties and disqualification of retail food stores 
           and wholesale food concerns.
Sec. 4133. Major systems failures.

                          PART V--Miscellaneous

Sec. 4141. Pilot projects to evaluate health and nutrition promotion in 
           the supplemental nutrition assistance program.
Sec. 4142. Study on comparable access to supplemental nutrition 
           assistance for Puerto Rico.

                 Subtitle B--Food Distribution Programs

                PART I--Emergency Food Assistance Program

Sec. 4201. Emergency food assistance.
Sec. 4202. Emergency food program infrastructure grants.

        PART II--Food Distribution Program on Indian Reservations

Sec. 4211. Assessing the nutritional value of the FDPIR food package.

              PART III--Commodity Supplemental Food Program

Sec. 4221. Commodity supplemental food program.

            PART IV--Senior Farmers' Market Nutrition Program

Sec. 4231. Seniors farmers' market nutrition program.

            Subtitle C--Child Nutrition and Related Programs

Sec. 4301. State performance on enrolling children receiving program 
           benefits for free school meals.
Sec. 4302. Purchases of locally produced foods.
Sec. 4303. Healthy food education and program replicability.
Sec. 4304. Fresh fruit and vegetable program.
Sec. 4305. Whole grain products.
Sec. 4306. Buy American requirements.
Sec. 4307. Survey of foods purchased by school food authorities.

                        Subtitle D--Miscellaneous

Sec. 4401. Bill Emerson National Hunger Fellows and Mickey Leland 
           International Hunger Fellows.
Sec. 4402. Assistance for community food projects.
Sec. 4403. Joint nutrition monitoring and related research activities.
Sec. 4404. Section 32 funds for purchase of fruits, vegetables, and nuts 
           to support domestic nutrition assistance programs.
Sec. 4405. Hunger-free communities.
Sec. 4406. Reauthorization of Federal food assistance programs.
Sec. 4407. Effective and implementation dates.

                             TITLE V--CREDIT

                    Subtitle A--Farm Ownership Loans

Sec. 5001. Direct loans.
Sec. 5002. Conservation loan and loan guarantee program.
Sec. 5003. Limitations on amount of farm ownership loans.

[[Page 122 STAT. 928]]

Sec. 5004. Down payment loan program.
Sec. 5005. Beginning farmer or rancher and socially disadvantaged farmer 
           or rancher contract land sales program.

                       Subtitle B--Operating Loans

Sec. 5101. Farming experience as eligibility requirement.
Sec. 5102. Limitations on amount of operating loans.
Sec. 5103. Suspension of limitation on period for which borrowers are 
           eligible for guaranteed assistance.

                       Subtitle C--Emergency Loans

Sec. 5201. Eligibility of equine farmers and ranchers for emergency 
           loans.

                  Subtitle D--Administrative Provisions

Sec. 5301. Beginning farmer and rancher individual development accounts 
           pilot program.
Sec. 5302. Inventory sales preferences; loan fund set-asides.
Sec. 5303. Loan authorization levels.
Sec. 5304. Transition to private commercial or other sources of credit.
Sec. 5305. Extension of the right of first refusal to reacquire 
           homestead property to immediate family members of borrower-
           owner.
Sec. 5306. Rural development and farm loan program activities.

                         Subtitle E--Farm Credit

Sec. 5401. Farm Credit System Insurance Corporation.
Sec. 5402. Technical correction.
Sec. 5403. Bank for cooperatives voting stock.
Sec. 5404. Premiums.
Sec. 5405. Certification of premiums.
Sec. 5406. Rural utility loans.
Sec. 5407. Equalization of loan-making powers of certain district 
           associations.

                        Subtitle F--Miscellaneous

Sec. 5501. Loans to purchasers of highly fractioned land.

                       TITLE VI--RURAL DEVELOPMENT

         Subtitle A--Consolidated Farm and Rural Development Act

Sec. 6001. Water, waste disposal, and wastewater facility grants.
Sec. 6002. SEARCH grants.
Sec. 6003. Rural business opportunity grants.
Sec. 6004. Child day care facility grants, loans, and loan guarantees.
Sec. 6005. Community facility grants to advance broadband.
Sec. 6006. Rural water and wastewater circuit rider program.
Sec. 6007. Tribal College and University essential community facilities.
Sec. 6008. Emergency and imminent community water assistance grant 
           program.
Sec. 6009. Water systems for rural and native villages in Alaska.
Sec. 6010. 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. 6011. Interest rates for water and waste disposal facilities loans.
Sec. 6012. Cooperative equity security guarantee.
Sec. 6013. Rural cooperative development grants.
Sec. 6014. Grants to broadcasting systems.
Sec. 6015. Locally or regionally produced agricultural food products.
Sec. 6016. Appropriate technology transfer for rural areas.
Sec. 6017. Rural economic area partnership zones.
Sec. 6018. Definitions.
Sec. 6019. National rural development partnership.
Sec. 6020. Historic barn preservation.
Sec. 6021. Grants for NOAA weather radio transmitters.
Sec. 6022. Rural microentrepreneur assistance program.
Sec. 6023. Grants for expansion of employment opportunities for 
           individuals with disabilities in rural areas.
Sec. 6024. Health care services.
Sec. 6025. Delta Regional Authority.
Sec. 6026. Northern Great Plains Regional Authority.
Sec. 6027. Rural Business Investment Program.
Sec. 6028. Rural Collaborative Investment Program.
Sec. 6029. Funding of pending rural development loan and grant 
           applications.

[[Page 122 STAT. 929]]

              Subtitle B--Rural Electrification Act of 1936

Sec. 6101. Energy efficiency programs.
Sec. 6102. Reinstatement of Rural Utility Services direct lending.
Sec. 6103. Deferment of payments to allows loans for improved energy 
           efficiency and demand reduction and for energy efficiency and 
           use audits.
Sec. 6104. Rural electrification assistance.
Sec. 6105. Substantially underserved trust areas.
Sec. 6106. Guarantees for bonds and notes issued for electrification or 
           telephone purposes.
Sec. 6107. Expansion of 911 access.
Sec. 6108. Electric loans for renewable energy.
Sec. 6109. Bonding requirements.
Sec. 6110. Access to broadband telecommunications services in rural 
           areas.
Sec. 6111. National Center for Rural Telecommunications Assessment.
Sec. 6112. Comprehensive rural broadband strategy.
Sec. 6113. Study on rural electric power generation.

                        Subtitle C--Miscellaneous

Sec. 6201. Distance learning and telemedicine.
Sec. 6202. Value-added agricultural market development program grants.
Sec. 6203. Agriculture innovation center demonstration program.
Sec. 6204. Rural firefighters and emergency medical service assistance 
           program.
Sec. 6205. Insurance of loans for housing and related facilities for 
           domestic farm labor.
Sec. 6206. Study of rural transportation issues.

                 Subtitle D--Housing Assistance Council

Sec. 6301. Short title.
Sec. 6302. Assistance to Housing Assistance Council.
Sec. 6303. Audits and reports.
Sec. 6304. Persons not lawfully present in the United States.
Sec. 6305. Limitation on use of authorized amounts.

                 TITLE VII--RESEARCH AND RELATED MATTERS

  Subtitle A--National Agricultural Research, Extension, and Teaching 
                           Policy Act of 1977

Sec. 7101. Definitions.
Sec. 7102. National Agricultural Research, Extension, Education, and 
           Economics Advisory Board.
Sec. 7103. Specialty crop committee report.
Sec. 7104. Renewable energy committee.
Sec. 7105. Veterinary medicine loan repayment.
Sec. 7106. Eligibility of University of the District of Columbia for 
           grants and fellowships for food and agricultural sciences 
           education.
Sec. 7107. Grants to 1890 schools to expand extension capacity.
Sec. 7108. Expansion of food and agricultural sciences awards.
Sec. 7109. Grants and fellowships for food and agricultural sciences 
           education.
Sec. 7110. Grants for research on production and marketing of alcohols 
           and industrial hydrocarbons from agricultural commodities and 
           forest products.
Sec. 7111. Policy research centers.
Sec. 7112. Education grants to Alaska Native-serving institutions and 
           Native Hawaiian-serving institutions.
Sec. 7113. Emphasis of human nutrition initiative.
Sec. 7114. Human nutrition intervention and health promotion research 
           program.
Sec. 7115. Pilot research program to combine medical and agricultural 
           research.
Sec. 7116. Nutrition education program.
Sec. 7117. Continuing animal health and disease research programs.
Sec. 7118. Cooperation among eligible institutions.
Sec. 7119. Appropriations for research on national or regional problems.
Sec. 7120. Animal health and disease research program.
Sec. 7121. Authorization level for extension at 1890 land-grant 
           colleges.
Sec. 7122. Authorization level for agricultural research at 1890 land-
           grant colleges.
Sec. 7123. Grants to upgrade agricultural and food sciences facilities 
           at 1890 land-grant colleges, including Tuskegee University.
Sec. 7124. Grants to upgrade agriculture and food sciences facilities at 
           the District of Columbia land-grant university.
Sec. 7125. Grants to upgrade agriculture and food sciences facilities 
           and equipment at insular area land-grant institutions.
Sec. 7126. National research and training virtual centers.

[[Page 122 STAT. 930]]

Sec. 7127. Matching funds requirement for research and extension 
           activities of 1890 institutions.
Sec. 7128. Hispanic-serving institutions.
Sec. 7129. Hispanic-serving agricultural colleges and universities.
Sec. 7130. International agricultural research, extension, and 
           education.
Sec. 7131. Competitive grants for international agricultural science and 
           education programs.
Sec. 7132. Administration.
Sec. 7133. Research equipment grants.
Sec. 7134. University research.
Sec. 7135. Extension Service.
Sec. 7136. Supplemental and alternative crops.
Sec. 7137. New Era Rural Technology Program.
Sec. 7138. Capacity building grants for NLGCA Institutions.
Sec. 7139. Borlaug international agricultural science and technology 
           fellowship program.
Sec. 7140. Aquaculture assistance programs.
Sec. 7141. Rangeland research grants.
Sec. 7142. Special authorization for biosecurity planning and response.
Sec. 7143. Resident instruction and distance education grants program 
           for insular area institutions of higher education.

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

Sec. 7201. National genetics resources program.
Sec. 7202. National Agricultural Weather Information System.
Sec. 7203. Partnerships.
Sec. 7204. High-priority research and extension areas.
Sec. 7205. Nutrient management research and extension initiative.
Sec. 7206. Organic Agriculture Research and Extension Initiative.
Sec. 7207. Agricultural bioenergy feedstock and energy efficiency 
           research and extension initiative.
Sec. 7208. Farm business management and benchmarking.
Sec. 7209. Agricultural telecommunications program.
Sec. 7210. Assistive technology program for farmers with disabilities.
Sec. 7211. Research on honey bee diseases.
Sec. 7212. National Rural Information Center Clearinghouse.

 Subtitle C--Agricultural Research, Extension, and Education Reform Act 
                                 of 1998

Sec. 7301. Peer and merit review.
Sec. 7302. Partnerships for high-value agricultural product quality 
           research.
Sec. 7303. Precision agriculture.
Sec. 7304. Biobased products.
Sec. 7305. Thomas Jefferson Initiative for Crop Diversification.
Sec. 7306. Integrated research, education, and extension competitive 
           grants program.
Sec. 7307. Fusarium graminearum grants.
Sec. 7308. Bovine Johne's disease control program.
Sec. 7309. Grants for youth organizations.
Sec. 7310. Agricultural biotechnology research and development for 
           developing countries.
Sec. 7311. Specialty crop research initiative.
Sec. 7312. Food animal residue avoidance database program.
Sec. 7313. Office of pest management policy.

                         Subtitle D--Other Laws

Sec. 7401. Critical Agricultural Materials Act.
Sec. 7402. Equity in Educational Land-Grant Status Act of 1994.
Sec. 7403. Smith-Lever Act.
Sec. 7404. Hatch Act of 1887.
Sec. 7405. Agricultural Experiment Station Research Facilities Act.
Sec. 7406. Agriculture and food research initiative.
Sec. 7407. Agricultural Risk Protection Act of 2000.
Sec. 7408. Exchange or sale authority.
Sec. 7409. Enhanced use lease authority pilot program.
Sec. 7410. Beginning farmer and rancher development program.
Sec. 7411. Public education regarding use of biotechnology in producing 
           food for human consumption.
Sec. 7412. McIntire-Stennis Cooperative Forestry Act.
Sec. 7413. Renewable Resources Extension Act of 1978.
Sec. 7414. National Aquaculture Act of 1980.
Sec. 7415. Construction of Chinese Garden at the National Arboretum.

[[Page 122 STAT. 931]]

Sec. 7416. National Agricultural Research, Extension, and Teaching 
           Policy Act Amendments of 1985.
Sec. 7417. Eligibility of University of the District of Columbia for 
           certain land-grant university assistance.

                        Subtitle E--Miscellaneous

                       PART I--General Provisions

Sec. 7501. Definitions.
Sec. 7502. Grazinglands research laboratory.
Sec. 7503. Fort Reno Science Park Research Facility.
Sec. 7504. Roadmap.
Sec. 7505. Review of plan of work requirements.
Sec. 7506. Budget submission and funding.

               PART II--Research, Education, and Economics

Sec. 7511. Research, education, and economics.

                PART III--New Grant and Research Programs

Sec. 7521. Research and education grants for the study of antibiotic-
           resistant bacteria.
Sec. 7522. Farm and ranch stress assistance network.
Sec. 7523. Seed distribution.
Sec. 7524. Live virus foot and mouth disease research.
Sec. 7525. Natural products research program.
Sec. 7526. Sun grant program.
Sec. 7527. Study and report on food deserts.
Sec. 7528. Demonstration project authority for temporary positions.
Sec. 7529. Agricultural and rural transportation research and education.

                          TITLE VIII--FORESTRY

  Subtitle A--Amendments to Cooperative Forestry Assistance Act of 1978

Sec. 8001. National priorities for private forest conservation.
Sec. 8002. Long-term State-wide assessments and strategies for forest 
           resources.
Sec. 8003. Community forest and open space conservation program.
Sec. 8004. Assistance to the Federated States of Micronesia, the 
           Republic of the Marshall Islands, and the Republic of Palau.
Sec. 8005. Changes to Forest Resource Coordinating Committee.
Sec. 8006. Changes to State Forest Stewardship Coordinating Committees.
Sec. 8007. Competition in programs under Cooperative Forestry Assistance 
           Act of 1978.
Sec. 8008. Competitive allocation of funds for cooperative forest 
           innovation partnership projects.

         Subtitle B--Cultural and Heritage Cooperation Authority

Sec. 8101. Purposes.
Sec. 8102. Definitions.
Sec. 8103. Reburial of human remains and cultural items.
Sec. 8104. Temporary closure for traditional and cultural purposes.
Sec. 8105. Forest products for traditional and cultural purposes.
Sec. 8106. Prohibition on disclosure.
Sec. 8107. Severability and savings provisions.

          Subtitle C--Amendments to Other Forestry-Related Laws

Sec. 8201. Rural revitalization technologies.
Sec. 8202. Office of International Forestry.
Sec. 8203. Emergency forest restoration program.
Sec. 8204. Prevention of illegal logging practices.
Sec. 8205. Healthy forests reserve program.

     Subtitle D--Boundary Adjustments and Land Conveyance Provisions

Sec. 8301. Green Mountain National Forest boundary adjustment.
Sec. 8302. Land conveyances, Chihuahuan Desert Nature Park, New Mexico, 
           and George Washington National Forest, Virginia.
Sec. 8303. Sale and exchange of National Forest System land, Vermont.

                  Subtitle E--Miscellaneous Provisions

Sec. 8401. Qualifying timber contract options.
Sec. 8402. Hispanic-serving institution agricultural land national 
           resources leadership program.

[[Page 122 STAT. 932]]

                            TITLE IX--ENERGY

Sec. 9001. Energy.
Sec. 9002. Biofuels infrastructure study.
Sec. 9003. Renewable fertilizer study.

              TITLE X--HORTICULTURE AND ORGANIC AGRICULTURE

Sec. 10001. Definitions.

           Subtitle A--Horticulture Marketing and Information

Sec. 10101. Independent evaluation of Department of Agriculture 
           commodity purchase process.
Sec. 10102. Quality requirements for clementines.
Sec. 10103. Inclusion of specialty crops in census of agriculture.
Sec. 10104. Mushroom promotion, research, and consumer information.
Sec. 10105. Food safety education initiatives.
Sec. 10106. Farmers' market promotion program.
Sec. 10107. Specialty crops market news allocation.
Sec. 10108. Expedited marketing order for Hass avocados for grades and 
           standards and other purposes.
Sec. 10109. Specialty crop block grants.

                 Subtitle B--Pest and Disease Management

Sec. 10201. Plant pest and disease management and disaster prevention.
Sec. 10202. National Clean Plant Network.
Sec. 10203. Plant protection.
Sec. 10204. Regulations to improve management and oversight of certain 
           regulated articles.
Sec. 10205. Pest and Disease Revolving Loan Fund.
Sec. 10206. Cooperative agreements relating to plant pest and disease 
           prevention activities.

                     Subtitle C--Organic Agriculture

Sec. 10301. National organic certification cost-share program.
Sec. 10302. Organic production and market data initiatives.
Sec. 10303. National Organic Program.

                        Subtitle D--Miscellaneous

Sec. 10401. National Honey Board.
Sec. 10402. Identification of honey.
Sec. 10403. Grant program to improve movement of specialty crops.
Sec. 10404. Market loss assistance for asparagus producers.

                           TITLE XI--LIVESTOCK

Sec. 11001. Livestock mandatory reporting.
Sec. 11002. Country of origin labeling.
Sec. 11003. Agricultural Fair Practices Act of 1967 definitions.
Sec. 11004. Annual report.
Sec. 11005. Production contracts.
Sec. 11006. Regulations.
Sec. 11007. Sense of Congress regarding pseudorabies eradication 
           program.
Sec. 11008. Sense of Congress regarding the cattle fever tick 
           eradication program.
Sec. 11009. National Sheep Industry Improvement Center.
Sec. 11010. Trichinae certification program.
Sec. 11011. Low pathogenic diseases.
Sec. 11012. Animal protection.
Sec. 11013. National Aquatic Animal Health Plan.
Sec. 11014. Study on bioenergy operations.
Sec. 11015. Interstate shipment of meat and poultry inspected by Federal 
           and State agencies for certain small establishments.
Sec. 11016. Inspection and grading.
Sec. 11017. Food safety improvement.

       TITLE XII--CROP INSURANCE AND DISASTER ASSISTANCE PROGRAMS

           Subtitle A--Crop Insurance and Disaster Assistance

Sec. 12001. Definition of organic crop.
Sec. 12002. General powers.
Sec. 12003. Reduction in loss ratio.
Sec. 12004. Premiums adjustments.
Sec. 12005. Controlled business insurance.

[[Page 122 STAT. 933]]

Sec. 12006. Administrative fee.
Sec. 12007. Time for payment.
Sec. 12008. Catastrophic coverage reimbursement rate.
Sec. 12009. Grain sorghum price election.
Sec. 12010. Premium reduction authority.
Sec. 12011. Enterprise and whole farm units.
Sec. 12012. Payment of portion of premium for area revenue plans.
Sec. 12013. Denial of claims.
Sec. 12014. Settlement of crop insurance claims on farm-stored 
           production.
Sec. 12015. Time for reimbursement.
Sec. 12016. Reimbursement rate.
Sec. 12017. Renegotiation of Standard Reinsurance Agreement.
Sec. 12018. Change in due date for Corporation payments for underwriting 
           gains.
Sec. 12019. Malting barley.
Sec. 12020. Crop production on native sod.
Sec. 12021. Information management.
Sec. 12022. Research and development.
Sec. 12023. Contracts for additional policies and studies.
Sec. 12024. Funding from insurance fund.
Sec. 12025. Pilot programs.
Sec. 12026. Risk management education for beginning farmers or ranchers.
Sec. 12027. Coverage for aquaculture under noninsured crop assistance 
           program.
Sec. 12028. Increase in service fees for noninsured crop assistance 
           program.
Sec. 12029. Determination of certain sweet potato production.
Sec. 12030. Declining yield report.
Sec. 12031. Definition of basic unit.
Sec. 12032. Crop insurance mediation.
Sec. 12033. Supplemental agricultural disaster assistance.
Sec. 12034. Fisheries disaster assistance.

            Subtitle B--Small Business Disaster Loan Program

Sec. 12051. Short title.
Sec. 12052. Definitions.

                 PART I--Disaster Planning and Response

Sec. 12061. Economic injury disaster loans to nonprofits.
Sec. 12062. Coordination of disaster assistance programs with FEMA.
Sec. 12063. Public awareness of disaster declaration and application 
           periods.
Sec. 12064. Consistency between administration regulations and standard 
           operating procedures.
Sec. 12065. Increasing collateral requirements.
Sec. 12066. Processing disaster loans.
Sec. 12067. Information tracking and follow-up system.
Sec. 12068. Increased deferment period.
Sec. 12069. Disaster processing redundancy.
Sec. 12070. Net earnings clauses prohibited.
Sec. 12071. Economic injury disaster loans in cases of ice storms and 
           blizzards.
Sec. 12072. Development and implementation of major disaster response 
           plan.
Sec. 12073. Disaster planning responsibilities.
Sec. 12074. Assignment of employees of the office of disaster assistance 
           and disaster cadre.
Sec. 12075. Comprehensive disaster response plan.
Sec. 12076. Plans to secure sufficient office space.
Sec. 12077. Applicants that have become a major source of employment due 
           to changed economic circumstances.
Sec. 12078. Disaster loan amounts.
Sec. 12079. Small business bonding threshold.

                        PART II--Disaster Lending

Sec. 12081. Eligibility for additional disaster assistance.
Sec. 12082. Additional economic injury disaster loan assistance.
Sec. 12083. Private disaster loans.
Sec. 12084. Immediate Disaster Assistance program.
Sec. 12085. Expedited disaster assistance loan program.
Sec. 12086. Gulf Coast Disaster Loan Refinancing Program.

                         PART III--Miscellaneous

Sec. 12091. Reports on disaster assistance.

                      TITLE XIII--COMMODITY FUTURES

Sec. 13001. Short title.

[[Page 122 STAT. 934]]

                     Subtitle A--General Provisions

Sec. 13101. Commission authority over agreements, contracts or 
           transactions in foreign currency.
Sec. 13102. Anti-fraud authority over principal-to-principal 
           transactions.
Sec. 13103. Criminal and civil penalties.
Sec. 13104. Authorization of appropriations.
Sec. 13105. Technical and conforming amendments.
Sec. 13106. Portfolio margining and security index issues.

 Subtitle B--Significant Price Discovery Contracts on Exempt Commercial 
                                 Markets

Sec. 13201. Significant price discovery contracts.
Sec. 13202. Large trader reporting.
Sec. 13203. Conforming amendments.
Sec. 13204. Effective date.

                        TITLE XIV--MISCELLANEOUS

   Subtitle A--Socially Disadvantaged Producers and Limited Resource 
                                Producers

Sec. 14001. Improved program delivery by Department of Agriculture on 
           Indian reservations.
Sec. 14002. Foreclosure.
Sec. 14003. Receipt for service or denial of service from certain 
           Department of Agriculture agencies.
Sec. 14004. Outreach and technical assistance for socially disadvantaged 
           farmers or ranchers.
Sec. 14005. Accurate documentation in the Census of Agriculture and 
           certain studies.
Sec. 14006. Transparency and accountability for socially disadvantaged 
           farmers or ranchers.
Sec. 14007. Oversight and compliance.
Sec. 14008. Minority Farmer Advisory Committee.
Sec. 14009. National Appeals Division.
Sec. 14010. Report of civil rights complaints, resolutions, and actions.
Sec. 14011. Sense of Congress relating to claims brought by socially 
           disadvantaged farmers or ranchers.
Sec. 14012. Determination on merits of Pigford claims.
Sec. 14013. Office of Advocacy and Outreach.

                    Subtitle B--Agricultural Security

Sec. 14101. Short title.
Sec. 14102. Definitions.

                    Chapter 1--Agricultural Security

Sec. 14111. Office of Homeland Security.
Sec. 14112. Agricultural biosecurity communication center.
Sec. 14113. Assistance to build local capacity in agricultural 
           biosecurity planning, preparedness, and response.

                       Chapter 2--Other Provisions

Sec. 14121. Research and development of agricultural countermeasures.
Sec. 14122. Agricultural biosecurity grant program.

               Subtitle C--Other Miscellaneous Provisions

Sec. 14201. Cotton classification services.
Sec. 14202. Designation of States for cotton research and promotion.
Sec. 14203. Grants to reduce production of methamphetamines from 
           anhydrous ammonia.
Sec. 14204. Grants to improve supply, stability, safety, and training of 
           agricultural labor force.
Sec. 14205. Amendment to the Right to Financial Privacy Act of 1978.
Sec. 14206. Report on stored quantities of propane.
Sec. 14207. Prohibitions on dog fighting ventures.
Sec. 14208. Department of Agriculture conference transparency.
Sec. 14209. Federal Insecticide, Fungicide, and Rodenticide Act 
           amendments.
Sec. 14210. Importation of live dogs.
Sec. 14211. Permanent debarment from participation in Department of 
           Agriculture programs for fraud.
Sec. 14212. Prohibition on closure or relocation of county offices for 
           the Farm Service Agency.
Sec. 14213. USDA Graduate School.

[[Page 122 STAT. 935]]

Sec. 14214. Fines for violations of the Animal Welfare Act.
Sec. 14215. Definition of central filing system.
Sec. 14216. Consideration of proposed recommendations of study on use of 
           cats and dogs in Federal research.
Sec. 14217. Regional economic and infrastructure development.
Sec. 14218. Coordinator for chronically underserved rural areas.
Sec. 14219. Elimination of statute of limitations applicable to 
           collection of debt by administrative offset.
Sec. 14220. Availability of excess and surplus computers in rural areas.
Sec. 14221. Repeal of section 3068 of the Water Resources Development 
           Act of 2007.
Sec. 14222. Domestic food assistance programs.
Sec. 14223. Technical correction.

                   TITLE XV--TRADE AND TAX PROVISIONS

Sec. 15001. Short title; etc.

   Subtitle A--Supplemental Agricultural Disaster Assistance From the 
                 Agricultural Disaster Relief Trust Fund

Sec. 15101. Supplemental agricultural disaster assistance.

         Subtitle B--Revenue Provisions for Agriculture Programs

Sec. 15201. Customs User Fees.
Sec. 15202. Time for payment of corporate estimated taxes.

                       Subtitle C--Tax Provisions

                          PART I--Conservation

           subpart a--land and species preservation provisions

Sec. 15301. Exclusion of conservation reserve program payments from SECA 
           tax for certain individuals.
Sec. 15302. Two-year extension of special rule encouraging contributions 
           of capital gain real property for conservation purposes.
Sec. 15303. Deduction for endangered species recovery expenditures.

                      subpart b--timber provisions

Sec. 15311. Temporary reduction in rate of tax on qualified timber gain 
           of corporations.
Sec. 15312. Timber REIT modernization.
Sec. 15313. Mineral royalty income qualifying income for timber REITs.
Sec. 15314. Modification of taxable REIT subsidiary asset test for 
           timber REITs.
Sec. 15315. Safe harbor for timber property.
Sec. 15316. Qualified forestry conservation bonds.

                       PART II--Energy Provisions

                      subpart a--cellulosic biofuel

Sec. 15321. Credit for production of cellulosic biofuel.
Sec. 15322. Comprehensive study of biofuels.

                      subpart b--revenue provisions

Sec. 15331. Modification of alcohol credit.
Sec. 15332. Calculation of volume of alcohol for fuel credits.
Sec. 15333. Ethanol tariff extension.
Sec. 15334. Limitations on duty drawback on certain imported ethanol.

                    PART III--Agricultural Provisions

Sec. 15341. Increase in loan limits on agricultural bonds.
Sec. 15342. Allowance of section 1031 treatment for exchanges involving 
           certain mutual ditch, reservoir, or irrigation company stock.
Sec. 15343. Agricultural chemicals security credit.
Sec. 15344. 3-year depreciation for race horses that are 2-years old or 
           younger.
Sec. 15345. Temporary tax relief for Kiowa County, Kansas and 
           surrounding area.
Sec. 15346. Competitive certification awards modification authority.

                    PART IV--Other Revenue Provisions

Sec. 15351. Limitation on excess farm losses of certain taxpayers.
Sec. 15352. Modification to optional method of computing net earnings 
           from self-employment.

[[Page 122 STAT. 936]]

Sec. 15353. Information reporting for Commodity Credit Corporation 
           transactions.

                  PART V--Protection of Social Security

Sec. 15361. Protection of social security.

                      Subtitle D--Trade Provisions

               PART I--Extension of Certain Trade Benefits

Sec. 15401. Short title.
Sec. 15402. Benefits for apparel and other textile articles.
Sec. 15403. Labor Ombudsman and technical assistance improvement and 
           compliance needs assessment and remediation program.
Sec. 15404. Petition process.
Sec. 15405. Conditions regarding enforcement of circumvention.
Sec. 15406. Presidential proclamation authority.
Sec. 15407. Regulations and procedures.
Sec. 15408. Extension of CBTPA.
Sec. 15409. Sense of Congress on interpretation of textile and apparel 
           provisions for Haiti.
Sec. 15410. Sense of Congress on trade mission to Haiti.
Sec. 15411. Sense of Congress on visa systems.
Sec. 15412. Effective date.

                 PART II--Miscellaneous Trade Provisions

Sec. 15421. Unused merchandise drawback.
Sec. 15422. Requirements relating to determination of transaction value 
           of imported merchandise.

SEC. 2. <<NOTE: 7 USC 8701.>> DEFINITION OF SECRETARY.

    In this Act, the term ``Secretary'' means the Secretary of 
Agriculture.

                       TITLE I--COMMODITY PROGRAMS

SEC. 1001. <<NOTE: 7 USC 8702.>> DEFINITIONS.

    In this title (other than subtitle C):
            (1) Average crop revenue election payment.--The term 
        ``average crop revenue election payment'' means a payment made 
        to producers on a farm under section 1105.
            (2) Base acres.--
                    (A) In general.--The term ``base acres'', with 
                respect to a covered commodity on a farm, means the 
                number of acres established under section 1101 of the 
                Farm Security and Rural Investment Act of 2002 (7 U.S.C. 
                7911) as in effect on September 30, 2007, subject to any 
                adjustment under section 1101 of this Act.
                    (B) Peanuts.--The term ``base acres for peanuts'' 
                has the meaning given the term in section 1301.
            (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, long 
        grain rice, medium grain rice, pulse crops, 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.

[[Page 122 STAT. 937]]

            (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 of the species, 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, long grain rice, medium grain rice, 
        soybeans, other oilseeds, graded wool, nongraded wool, mohair, 
        honey, dry peas, lentils, small chickpeas, and large chickpeas.
            (9) Medium grain rice.--The term ``medium grain rice'' 
        includes short grain rice.
            (10) Other oilseed.--The term ``other oilseed'' means a crop 
        of sunflower seed, rapeseed, canola, safflower, flaxseed, 
        mustard seed, crambe, sesame seed, or any oilseed designated by 
        the Secretary.
            (11) Payment acres.--The term ``payment acres'' means, in 
        the case of direct payments and counter-cyclical payments--
                    (A) except as provided in subparagraph (B), 85 
                percent of the base acres of a covered commodity on a 
                farm on which direct payments or counter-cyclical 
                payments are made; and
                    (B) in the case of direct payments for each of the 
                2009 through 2011 crop years, 83.3 percent of the base 
                acres for the covered commodity on a farm on which 
                direct payments are made.
            (12) Payment yield.--The term ``payment yield'' means the 
        yield established for direct payments and the yield established 
        for counter-cyclical payments under section 1102 of the Farm 
        Security and Rural Investment Act of 2002 (7 U.S.C. 7912) as in 
        effect on September 30, 2007, or under section 1102 of this Act, 
        for a farm for a covered commodity.
            (13) Producer.--
                    (A) In general.--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.
                    (B) Hybrid seed.--In determining whether a grower of 
                hybrid seed is a producer, the Secretary shall--
                          (i) not take into consideration the existence 
                      of a hybrid seed contract; and
                          (ii) ensure that program requirements do not 
                      adversely affect the ability of the grower to 
                      receive a payment under this title.
            (14) Pulse crop.--The term ``pulse crop'' means dry peas, 
        lentils, small chickpeas, and large chickpeas.
            (15) State.--The term ``State'' means--

[[Page 122 STAT. 938]]

                    (A) a State;
                    (B) the District of Columbia;
                    (C) the Commonwealth of Puerto Rico; and
                    (D) any other territory or possession of the United 
                States.
            (16) Target price.--The term ``target price'' means the 
        price per bushel, pound, or hundredweight (or other appropriate 
        unit) of a covered commodity used to determine the payment rate 
        for counter-cyclical payments.
            (17) United states.--The term ``United States'', when used 
        in a geographical sense, means all of the States.
            (18) United states premium factor.--The term ``United States 
        Premium Factor'' means the percentage by which the difference in 
        the United States loan schedule premiums for Strict Middling 
        (SM) 1\1/8\-inch upland cotton and for Middling (M) 1\3/32\-inch 
        upland cotton exceeds the difference in the applicable premiums 
        for comparable international qualities.

        Subtitle A--Direct Payments and Counter-Cyclical Payments

SEC. 1101. <<NOTE: 7 USC 8711.>> BASE ACRES.

    (a) Adjustment of Base Acres.--
            (1) In general.--The Secretary shall provide for an 
        adjustment, as appropriate, in the base acres for covered 
        commodities for a farm whenever any 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, or was terminated or expired 
                during the period beginning on October 1, 2007, and 
                ending on the date of enactment of this Act.
                    (B) Cropland is released from coverage under a 
                conservation reserve contract by the Secretary, or was 
                released during the period beginning on October 1, 2007, 
                and ending on the date of enactment of this Act.
                    (C) The producer has eligible pulse crop acreage, 
                which shall be determined in the same manner as eligible 
                oilseed acreage under section 1101(a)(2) of the Farm 
                Security and Rural Investment Act of 2002 (7 U.S.C. 
                7911(a)(2)).
                    (D) The producer has eligible oilseed acreage as the 
                result of the Secretary designating additional oilseeds, 
                which shall be determined in the same manner as eligible 
                oilseed acreage under section 1101(a)(2) of the Farm 
                Security and Rural Investment Act of 2002 (7 U.S.C. 
                7911(a)(2)).
            (2) Special conservation reserve acreage payment rules.--For 
        the crop year in which a base acres adjustment under 
        subparagraph (A) or (B) of 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.

    (b) 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

[[Page 122 STAT. 939]]

        (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 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:
                    (A) Any base acres for peanuts for the farm.
                    (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 
                Federal conservation program for which payments are made 
                in exchange for not producing an agricultural commodity 
                on the acreage.
                    (D) Any eligible pulse crop acreage, which shall be 
                determined in the same manner as eligible oilseed 
                acreage under section 1101(a)(2) of the Farm Security 
                and Rural Investment Act of 2002 (7 U.S.C. 7911(a)(2)).
                    (E) If the Secretary designates additional oilseeds, 
                any eligible oilseed acreage, which shall be determined 
                in the same manner as eligible oilseed acreage under 
                section 1101(a)(2) of the Farm Security and Rural 
                Investment Act of 2002 (7 U.S.C. 7911(a)(2)).
            (3) Selection of acres.--The Secretary shall give the owner 
        of the farm the opportunity to select the base acres for a 
        covered commodity or the base acres for peanuts for the farm 
        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(b) when applying the 
        requirements of this subsection.

    (c) Reduction in Base Acres.--
            (1) Reduction at option of owner.--
                    (A) In general.--The owner of a farm may reduce, at 
                any time, the base acres for any covered commodity for 
                the farm.
                    (B) Effect of reduction.--A reduction under 
                subparagraph (A) shall be permanent and made in a manner 
                prescribed by the Secretary.
            (2) Required action by secretary.--
                    (A) In general.--The Secretary shall proportionately 
                reduce base acres on a farm for covered commodities for 
                land that has been subdivided and developed for multiple 
                residential units or other nonfarming uses if the size 
                of the tracts and the density of the subdivision is such 
                that the land is unlikely to return to the previous 
                agricultural use, unless the producers on the farm 
                demonstrate that the land--
                          (i) remains devoted to commercial agricultural 
                      production; or

[[Page 122 STAT. 940]]

                          (ii) is likely to be returned to the previous 
                      agricultural use.
                    (B) Requirement.--
                The <<NOTE: Procedures.>> Secretary shall establish 
                procedures to identify land described in subparagraph 
                (A).
            (3) Review and report.--Each year, to ensure, to the maximum 
        extent practicable, that payments are received only by 
        producers, the Secretary shall submit to Congress a report that 
        describes the results of the actions taken under paragraph (2).

    (d) Treatment of Farms With Limited Base Acres.--
            (1) Prohibition on payments.--Except as provided in 
        paragraph (2) and notwithstanding any other provision of this 
        title, a producer on a farm may not receive direct payments, 
        counter-cyclical payments, or average crop revenue election 
        payments if the sum of the base acres of the farm is 10 acres or 
        less, as determined by the Secretary.
            (2) Exceptions.--Paragraph (1) shall not apply to a farm 
        owned by--
                    (A) a socially disadvantaged farmer or rancher (as 
                defined in section 355(e) of the Consolidated Farm and 
                Rural Development Act (7 U.S.C. 2003(e)); or
                    (B) a limited resource farmer or rancher, as defined 
                by the Secretary.
            (3) Data collection and publication.--The Secretary shall--
                    (A) collect and publish segregated data and survey 
                information about the farm profiles, utilization of 
                land, and crop production; and
                    (B) perform an evaluation on the supply and price of 
                fruits and vegetables based on the effects of suspension 
                of base acres under this section.
SEC. 1102. <<NOTE: 7 USC 8712.>> PAYMENT YIELDS.

    (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 yield for each farm 
for any designated oilseed or eligible pulse crop for which a payment 
yield was not established under section 1102 of the Farm Security and 
Rural Investment Act of 2002 (7 U.S.C. 7912) in accordance with this 
section.
    (b) Payment Yields for Designated Oilseeds and Eligible Pulse 
Crops.--
            (1) Determination of average yield.--In the case of 
        designated oilseeds and eligible pulse crops, the Secretary 
        shall determine the average yield per planted acre for the 
        designated oilseed or pulse crop on a farm for the 1998 through 
        2001 crop years, excluding any crop year in which the acreage 
        planted to the designated oilseed or pulse crop was zero.
            (2) Adjustment for payment yield.--
                    (A) In general.--The payment yield for a farm for a 
                designated oilseed or eligible pulse crop shall be equal 
                to the product of the following:
                          (i) The average yield for the designated 
                      oilseed or pulse crop determined under paragraph 
                      (1).
                          (ii) The ratio resulting from dividing the 
                      national average yield for the designated oilseed 
                      or pulse crop

[[Page 122 STAT. 941]]

                      for the 1981 through 1985 crops by the national 
                      average yield for the designated oilseed or pulse 
                      crop for the 1998 through 2001 crops.
                    (B) No national average yield information 
                available.--To the extent that national average yield 
                information for a designated oilseed or pulse crop is 
                not available, the Secretary shall use such information 
                as the Secretary determines to be fair and equitable to 
                establish a national average yield under this section.
            (3) Use of partial county average yield.--If the yield per 
        planted acre for a crop of a designated oilseed or pulse crop 
        for a farm for any of the 1998 through 2001 crop years was less 
        than 75 percent of the county yield for that designated oilseed 
        or pulse crop, 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).
            (4) No historic yield data available.--In the case of 
        establishing yields for designated oilseeds and eligible pulse 
        crops, if historic yield data is not available, the Secretary 
        shall use the ratio for dry peas calculated under paragraph 
        (2)(A)(ii) in determining the yields for designated oilseeds and 
        eligible pulse crops, as determined to be fair and equitable by 
        the Secretary.
SEC. 1103. <<NOTE: 7 USC 8713.>> AVAILABILITY OF DIRECT PAYMENTS.

    (a) Payment Required.--For each of the 2008 through 2012 crop years 
of each covered commodity (other than pulse crops), the Secretary shall 
make direct payments to producers on farms for which base acres and 
payment yields are established.
    (b) Payment Rate.--Except as provided in section 1105, the payment 
rates used to make direct payments with respect to covered commodities 
for a crop year shall be 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) Long grain rice, $2.35 per hundredweight.
            (8) Medium grain rice, $2.35 per hundredweight.
            (9) Soybeans, $0.44 per bushel.
            (10) Other oilseeds, $0.80 per hundredweight.

    (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.--Except as provided in paragraph (2), in the 
        case of each of the 2008 through 2012 crop years, the Secretary 
        may not make direct payments before October 1 of the calendar 
        year in which the crop of the covered commodity is harvested.
            (2) Advance payments.--

[[Page 122 STAT. 942]]

                    (A) Option.--
                          (i) In general.--At the option of the 
                      producers on a farm, the Secretary shall pay in 
                      advance up to 22 percent of the direct payment for 
                      a covered commodity for any of the 2008 through 
                      2011 crop years to the producers on a farm.
                          (ii) 2008 crop year.--If the producers on a 
                      farm elect to receive advance direct payments 
                      under clause (i) for a covered commodity for the 
                      2008 crop year, as soon as practicable after the 
                      election, the Secretary shall make the advance 
                      direct payment to the producers on the farm.
                    (B) Month.--
                          (i) Selection.--Subject to clauses (ii) and 
                      (iii), the producers on a farm shall select the 
                      month during which the advance payment for a crop 
                      year will be made.
                          (ii) Options.--The month selected may be any 
                      month during the period--
                                    (I) beginning on December 1 of the 
                                calendar year before the calendar year 
                                in which the crop of the covered 
                                commodity is harvested; and
                                    (II) ending during the month within 
                                which the direct payment would otherwise 
                                be made.
                          (iii) Change.--The producers on a farm may 
                      change the selected month for a subsequent advance 
                      payment by providing advance notice to the 
                      Secretary.
            (3) Repayment of advance payments.--If a producer on a farm 
        that receives an advance direct payment for a crop 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. 1104. <<NOTE: 7 USC 8714.>> AVAILABILITY OF COUNTER-CYCLICAL 
                          PAYMENTS.

    (a) Payment Required.--Except as provided in section 1105, for each 
of the 2008 through 2012 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.--
            (1) Covered commodities other than rice.--Except as provided 
        in paragraph (2), for purposes of subsection (a), the effective 
        price for a covered commodity is equal to the sum of the 
        following:
                    (A) The higher of the following:
                          (i) The national average market price received 
                      by producers during the 12-month marketing year 
                      for the covered commodity, as determined by the 
                      Secretary.
                          (ii) The national average loan rate for a 
                      marketing assistance loan for the covered 
                      commodity in effect for the applicable period 
                      under subtitle B.

[[Page 122 STAT. 943]]

                    (B) 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.
            (2) Rice.--In the case of long grain rice and medium grain 
        rice, for purposes of subsection (a), the effective price for 
        each type or class of rice is equal to the sum of the following:
                    (A) The higher of the following:
                          (i) The national average market price received 
                      by producers during the 12-month marketing year 
                      for the type or class of rice, as determined by 
                      the Secretary.
                          (ii) The national average loan rate for a 
                      marketing assistance loan for the type or class of 
                      rice in effect for the applicable period under 
                      subtitle B.
                    (B) The payment rate in effect for the type or class 
                of rice under section 1103 for the purpose of making 
                direct payments with respect to the type or class of 
                rice.

    (c) Target Price.--
            (1) 2008 crop year.--For purposes of the 2008 crop year, 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, $0.7125 per pound.
                    (G) Long grain rice, $10.50 per hundredweight.
                    (H) Medium grain rice, $10.50 per hundredweight.
                    (I) Soybeans, $5.80 per bushel.
                    (J) Other oilseeds, $10.10 per hundredweight.
            (2) 2009 crop year.--For purposes of the 2009 crop year, 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, $0.7125 per pound.
                    (G) Long grain rice, $10.50 per hundredweight.
                    (H) Medium grain rice, $10.50 per hundredweight.
                    (I) Soybeans, $5.80 per bushel.
                    (J) Other oilseeds, $10.10 per hundredweight.
                    (K) Dry peas, $8.32 per hundredweight.
                    (L) Lentils, $12.81 per hundredweight.
                    (M) Small chickpeas, $10.36 per hundredweight.
                    (N) Large chickpeas, $12.81 per hundredweight.
            (3) Subsequent crop years.--For purposes of each of the 2010 
        through 2012 crop years, the target prices for covered 
        commodities shall be as follows:
                    (A) Wheat, $4.17 per bushel.
                    (B) Corn, $2.63 per bushel.
                    (C) Grain sorghum, $2.63 per bushel.
                    (D) Barley, $2.63 per bushel.
                    (E) Oats, $1.79 per bushel.
                    (F) Upland cotton, $0.7125 per pound.
                    (G) Long grain rice, $10.50 per hundredweight.
                    (H) Medium grain rice, $10.50 per hundredweight.
                    (I) Soybeans, $6.00 per bushel.

[[Page 122 STAT. 944]]

                    (J) Other oilseeds, $12.68 per hundredweight.
                    (K) Dry peas, $8.32 per hundredweight.
                    (L) Lentils, $12.81 per hundredweight.
                    (M) Small chickpeas, $10.36 per hundredweight.
                    (N) Large chickpeas, $12.81 per hundredweight.

    (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 under this section for any of the 2008 through 2012 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:
            (1) The payment rate specified in subsection (d).
            (2) The payment acres of the covered commodity on the farm.
            (3) The payment yield for the covered commodity for the 
        farm.

    (f) Time for Payments.--
            (1) General rule.--Except as provided in paragraph (2), if 
        the Secretary determines under subsection (a) that counter-
        cyclical payments are required to be made under this section for 
        the crop of a covered commodity, beginning October 1, or as soon 
        as practicable thereafter, after the end of the marketing year 
        for the covered commodity, the Secretary shall make the counter-
        cyclical payments for the crop.
            (2) Availability of partial payments.--
                    (A) In general.--If, before the end of the 12-month 
                marketing year 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.
                    (B) <<NOTE: Deadlines.>> Election.--
                          (i) In general.--The Secretary shall allow 
                      producers on a farm to make an election to receive 
                      partial payments for a covered commodity under 
                      subparagraph (A) at any time but not later than 60 
                      days prior to the end of the marketing year for 
                      that covered commodity.
                          (ii) Date of issuance.--The Secretary shall 
                      issue the partial payment after the date of an 
                      announcement by the Secretary but not later than 
                      30 days prior to the end of the marketing year.
            (3) Time for partial payments.--When the Secretary makes 
        partial payments for a covered commodity for any of the 2008 
        through 2010 crop years--
                    (A) the first partial payment shall be made after 
                completion of the first 180 days of the marketing year 
                for the covered commodity; and
                    (B) the final partial payment shall be made 
                beginning October 1, or as soon as practicable 
                thereafter, after the

[[Page 122 STAT. 945]]

                end of the applicable marketing year for the covered 
                commodity.
            (4) Amount of partial payment.--
                    (A) First partial payment.--For each of the 2008 
                through 2010 crops of a covered commodity, 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.
                    (B) 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 payment made to 
                      the producers under subparagraph (A).
            (5) Repayment.--The producers on a farm that receive a 
        partial payment under this subsection for a crop year shall 
        repay to the Secretary the amount, if any, by which the total of 
        the partial payments exceed the actual counter-cyclical payment 
        to be made for the covered commodity for that crop year.
SEC. 1105. <<NOTE: 7 USC 8715.>> AVERAGE CROP REVENUE ELECTION 
                          PROGRAM.

    (a) Availability and Election of Alternative Approach.--
            (1) Availability of average crop revenue election 
        payments.--As an alternative to receiving counter-cyclical 
        payments under section 1104 or 1304 and in exchange for a 20-
        percent reduction in direct payments under section 1103 or 1303 
        and a 30-percent reduction in marketing assistance loan rates 
        under section 1202 or 1307, with respect to all covered 
        commodities and peanuts on a farm, during each of the 2009, 
        2010, 2011, and 2012 crop years, the Secretary shall give the 
        producers on the farm an opportunity to make an irrevocable 
        election to instead receive average crop revenue election 
        (referred to in this section as ``ACRE'') payments under this 
        section for the initial crop year for which the election is made 
        through the 2012 crop year.
            (2) Limitation.--
                    (A) In general.--The total number of planted acres 
                for which the producers on a farm may receive ACRE 
                payments under this section may not exceed the total 
                base acreage for all covered commodities and peanuts on 
                the farm.
                    (B) Election.--If the total number of planted acres 
                to all covered commodities and peanuts of the producers 
                on a farm exceeds the total base acreage of the farm, 
                the producers on the farm may choose which planted acres 
                to enroll in the program under this section.
            (3) Election; time for election.--
                    (A) In general.--The <<NOTE: Notice.>> Secretary 
                shall provide notice to producers regarding the 
                opportunity to make each of the elections described in 
                paragraph (1).
                    (B) Notice requirements.--The notice shall include--
                          (i) notice of the opportunity of the producers 
                      on a farm to make the election; and

[[Page 122 STAT. 946]]

                          (ii) 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.
            (4) Election deadline.--Within <<NOTE: Notice.>> the time 
        period and in the manner prescribed pursuant to paragraph (3), 
        all of the producers on a farm shall submit to the Secretary 
        notice of an election made under paragraph (1).
            (5) Effect of failure to make election.--If all of the 
        producers on a farm fail to make an election under paragraph 
        (1), make different elections under paragraph (1), or fail to 
        timely notify the Secretary of the election made, as required by 
        paragraph (4), all of the producers on the farm shall be deemed 
        to have made the election to receive counter-cyclical payments 
        under section 1104 or 1304 for all covered commodities and 
        peanuts on the farm, and to otherwise not have made the election 
        described in paragraph (1), for the applicable crop years.

    (b) Payments Required.--
            (1) In general.--In the case of producers on a farm who make 
        an election under subsection (a) to receive ACRE payments for 
        any of the 2009 through 2012 crop years for all covered 
        commodities and peanuts, the Secretary shall make ACRE payments 
        available to the producers on a farm in accordance with this 
        subsection.
            (2) ACRE payment.--
                    (A) In general.--Subject to paragraph (3), in the 
                case of producers on a farm described in paragraph (1), 
                the Secretary shall make ACRE payments available to the 
                producers on a farm for each crop year if--
                          (i) the actual State revenue for the crop year 
                      for the covered commodity or peanuts in the State 
                      determined under subsection (c); is less than
                          (ii) the ACRE program guarantee for the crop 
                      year for the covered commodity or peanuts in the 
                      State determined under subsection (d).
                    (B) Individual loss.--The Secretary shall make ACRE 
                payments available to the producers on a farm in a State 
                for a crop year only if (as determined by the 
                Secretary)--
                          (i) the actual farm revenue for the crop year 
                      for the covered commodity or peanuts, as 
                      determined under subsection (e); is less than
                          (ii) the farm ACRE benchmark revenue for the 
                      crop year for the covered commodity or peanuts, as 
                      determined under subsection (f).
            (3) Time for payments.--In the case of each of the 2009 
        through 2012 crop years, the Secretary shall make ACRE payments 
        beginning October 1, or as soon as practicable thereafter, after 
        the end of the applicable marketing year for the covered 
        commodity or peanuts.

    (c) Actual State Revenue.--
            (1) In general.--For purposes of subsection (b)(2)(A), the 
        amount of the actual State revenue for a crop year of a covered 
        commodity or peanuts shall equal the product obtained by 
        multiplying--

[[Page 122 STAT. 947]]

                    (A) the actual State yield for each planted acre for 
                the crop year for the covered commodity or peanuts 
                determined under paragraph (2); and
                    (B) the national average market price for the crop 
                year for the covered commodity or peanuts determined 
                under paragraph (3).
            (2) Actual state yield.--For purposes of paragraph (1)(A), 
        the actual State yield for each planted acre for a crop year for 
        a covered commodity or peanuts in a State shall equal (as 
        determined by the Secretary)--
                    (A) the quantity of the covered commodity or peanuts 
                that is produced in the State during the crop year; 
                divided by
                    (B) the number of acres that are planted to the 
                covered commodity or peanuts in the State during the 
                crop year.
            (3) National average market price.--For purposes of 
        paragraph (1)(B), the national average market price for a crop 
        year for a covered commodity or peanuts in a State shall equal 
        the greater of--
                    (A) the national average market price received by 
                producers during the 12-month marketing year for the 
                covered commodity or peanuts, as determined by the 
                Secretary; or
                    (B) the marketing assistance loan rate for the 
                covered commodity or peanuts under section 1202 or 1307, 
                as reduced under subsection (a)(1).

    (d) ACRE Program Guarantee.--
            (1) Amount.--
                    (A) In general.--For purposes of subsection 
                (b)(2)(A) and subject to subparagraph (B), the ACRE 
                program guarantee for a crop year for a covered 
                commodity or peanuts in a State shall equal 90 percent 
                of the product obtained by multiplying--
                          (i) the benchmark State yield for each planted 
                      acre for the crop year for the covered commodity 
                      or peanuts in a State determined under paragraph 
                      (2); and
                          (ii) the ACRE program guarantee price for the 
                      crop year for the covered commodity or peanuts 
                      determined under paragraph (3).
                    (B) Minimum and maximum guarantee.--In the case of 
                each of the 2010 through 2012 crop years, the ACRE 
                program guarantee for a crop year for a covered 
                commodity or peanuts under subparagraph (A) shall not 
                decrease or increase more than 10 percent from the 
                guarantee for the preceding crop year.
            (2) Benchmark state yield.--
                    (A) In general.--For purposes of paragraph 
                (1)(A)(i), subject to subparagraph (B), the benchmark 
                State yield for each planted acre for a crop year for a 
                covered commodity or peanuts in a State shall equal the 
                average yield per planted acre for the covered commodity 
                or peanuts in the State for the most recent 5 crop year 
                yields, excluding each of the crop years with the 
                highest and lowest yields, using National Agricultural 
                Statistics Service data.
                    (B) Assigned yield.--If the Secretary cannot 
                establish the benchmark State yield for each planted 
                acre for a

[[Page 122 STAT. 948]]

                crop year for a covered commodity or peanuts in a State 
                in accordance with subparagraph (A) or if the yield 
                determined under subparagraph (A) is an unrepresentative 
                average yield for the State (as determined by the 
                Secretary), the Secretary shall assign a benchmark State 
                yield for each planted acre for the crop year for the 
                covered commodity or peanuts in the State on the basis 
                of--
                          (i) previous average yields for a period of 5 
                      crop years, excluding each of the crop years with 
                      the highest and lowest yields; or
                          (ii) benchmark State yields for planted acres 
                      for the crop year for the covered commodity or 
                      peanuts in similar States.
            (3) ACRE program guarantee price.--For purposes of paragraph 
        (1)(A)(ii), the ACRE program guarantee price for a crop year for 
        a covered commodity or peanuts in a State shall be the simple 
        average of the national average market price received by 
        producers of the covered commodity or peanuts for the most 
        recent 2 crop years, as determined by the Secretary.
            (4) States with irrigated and nonirrigated land.--In the 
        case of a State in which at least 25 percent of the acreage 
        planted to a covered commodity or peanuts in the State is 
        irrigated and at least 25 percent of the acreage planted to the 
        covered commodity or peanuts in the State is not irrigated, the 
        Secretary shall calculate a separate ACRE program guarantee for 
        the irrigated and nonirrigated areas of the State for the 
        covered commodity or peanuts.

    (e) Actual Farm Revenue.--For purposes of subsection (b)(2)(B)(i), 
the amount of the actual farm revenue for a crop year for a covered 
commodity or peanuts shall equal the amount determined by multiplying--
            (1) the actual yield for the covered commodity or peanuts of 
        the producers on the farm; and
            (2) the national average market price for the crop year for 
        the covered commodity or peanuts determined under subsection 
        (c)(3).

    (f) Farm ACRE Benchmark Revenue.--For purposes of subsection 
(b)(2)(B)(ii), the farm ACRE benchmark revenue for the crop year for a 
covered commodity or peanuts shall equal the sum obtained by adding--
            (1) the amount determined by multiplying--
                    (A) the average yield per planted acre for the 
                covered commodity or peanuts of the producers on the 
                farm for the most recent 5 crop years, excluding each of 
                the crop years with the highest and lowest yields; and
                    (B) the ACRE program guarantee price for the 
                applicable crop year for the covered commodity or 
                peanuts in a State determined under subsection (d)(3); 
                and
            (2) the amount of the per acre crop insurance premium 
        required to be paid by the producers on the farm for the 
        applicable crop year for the covered commodity or peanuts on the 
        farm.

    (g) Payment Amount.--If ACRE payments are required to be paid for 
any of the 2009 through 2012 crop years of a covered commodity or 
peanuts under this section, the amount of the ACRE payment to be paid to 
the producers on the farm for the crop

[[Page 122 STAT. 949]]

year under this section shall be equal to the product obtained by 
multiplying--
            (1) the lesser of--
                    (A) the difference between--
                          (i) the ACRE program guarantee for the crop 
                      year for the covered commodity or peanuts in the 
                      State determined under subsection (d); and
                          (ii) the actual State revenue from the crop 
                      year for the covered commodity or peanuts in the 
                      State determined under subsection (c); and
                    (B) 25 percent of the ACRE program guarantee for the 
                crop year for the covered commodity or peanuts in the 
                State determined under subsection (d);
            (2)(A) for each of the 2009 through 2011 crop years, 83.3 
        percent of the acreage planted or considered planted to the 
        covered commodity or peanuts for harvest on the farm in the crop 
        year; and
            (B) for the 2012 crop year, 85 percent of the acreage 
        planted or considered planted to the covered commodity or 
        peanuts for harvest on the farm in the crop year; and
            (3) the quotient obtained by dividing--
                    (A) the average yield per planted acre for the 
                covered commodity or peanuts of the producers on the 
                farm for the most recent 5 crop years, excluding each of 
                the crop years with the highest and lowest yields; by
                    (B) the benchmark State yield for the crop year, as 
                determined under subsection (d)(2).
SEC. 1106. <<NOTE: 7 USC 8716.>> PRODUCER AGREEMENT REQUIRED AS 
                          CONDITION OF PROVISION OF PAYMENTS.

    (a) Compliance With Certain Requirements.--
            (1) Requirements.--Before the producers on a farm may 
        receive direct payments, counter-cyclical payments, or average 
        crop revenue election 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 that Act 
                (16 U.S.C. 3821 et seq.);
                    (C) to comply with the planting flexibility 
                requirements of section 1107;
                    (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 
                agricultural or conserving use, and not for a 
                nonagricultural commercial, industrial, or residential 
                use, as determined by the Secretary; and
                    (E) to effectively control noxious weeds and 
                otherwise maintain the land in accordance with sound 
                agricultural practices, as determined by the Secretary, 
                if the agricultural or conserving use involves the 
                noncultivation of any portion of the land referred to in 
                subparagraph (D).

[[Page 122 STAT. 950]]

            (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.--
                    (A) In general.--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, or on 
                which average crop revenue election payments are based, 
                shall result in the termination of the direct payments, 
                counter-cyclical payments, or average crop revenue 
                election payments to the extent the payments are made or 
                based on the base acres, unless the transferee or owner 
                of the acreage agrees to assume all obligations under 
                subsection (a).
                    (B) Effective date.--The termination shall take 
                effect on the date determined by the Secretary.
            (2) Exception.--If a producer entitled to a direct payment, 
        counter-cyclical payment, or average crop revenue election 
        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) Reports.--
            (1) 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.
            (2) Production reports.--As a condition on the receipt of 
        any benefits under this subtitle or subtitle B, the Secretary 
        shall require producers on a farm that receive payments under 
        section 1105 to submit to the Secretary annual production 
        reports with respect to all covered commodities and peanuts 
        produced on the farm.
            (3) Penalties.--No penalty with respect to benefits under 
        this subtitle or subtitle B shall be assessed against the 
        producers on a farm for an inaccurate acreage or production 
        report unless the producers on the farm knowingly and willfully 
        falsified the acreage or production report.

    (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, counter-cyclical payments, or average crop 
revenue election payments among the producers on a farm on a fair and 
equitable basis.
SEC. 1107. <<NOTE: 7 USC 8717.>> 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

[[Page 122 STAT. 951]]

        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 mung beans and pulse 
                crops).
                    (C) Wild rice.

    (c) Exceptions.--Paragraphs (1) and (2) of subsection (b) shall not 
limit the planting of an agricultural commodity specified in paragraph 
(3) of that subsection--
            (1) in any region in which there is a history of double-
        cropping of 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) Planting Transferability Pilot Project.--
            (1) Pilot project authorized.--Notwithstanding paragraphs 
        (1) and (2) of subsection (b) and in addition to the exceptions 
        provided in subsection (c), the Secretary shall carry out a 
        pilot project to permit the planting of cucumbers, green peas, 
        lima beans, pumpkins, snap beans, sweet corn, and tomatoes grown 
        for processing on base acres during each of the 2009 through 
        2012 crop years.
            (2) Pilot project states and acres.--The number of base 
        acres eligible during each crop year for the pilot project under 
        paragraph (1) shall be--
                    (A) 9,000 acres in the State of Illinois;
                    (B) 9,000 acres in the State of Indiana;
                    (C) 1,000 acres in the State of Iowa;
                    (D) 9,000 acres in the State of Michigan;
                    (E) 34,000 acres in the State of Minnesota;
                    (F) 4,000 acres in the State of Ohio; and
                    (G) 9,000 acres in the State of Wisconsin.
            (3) Contract and management requirements.--To be eligible 
        for selection to participate in the pilot project, the producers 
        on a farm shall--

[[Page 122 STAT. 952]]

                    (A) demonstrate to the Secretary that the producers 
                on the farm have entered into a contract to produce a 
                crop of a commodity specified in paragraph (1) for 
                processing;
                    (B) agree to produce the crop as part of a program 
                of crop rotation on the farm to achieve agronomic and 
                pest and disease management benefits; and
                    (C) provide evidence of the disposition of the crop.
            (4) Temporary reduction in base acres.--The base acres on a 
        farm for a crop year shall be reduced by an acre for each acre 
        planted under the pilot program.
            (5) Duration of reductions.--The reduction in the base acres 
        of a farm for a crop year under paragraph (4) shall expire at 
        the end of the crop year.
            (6) Recalculation of base acres.--
                    (A) In general.--If the Secretary recalculates base 
                acres for a farm while the farm is included in the pilot 
                project, the planting and production of a crop of a 
                commodity specified in paragraph (1) on base acres for 
                which a temporary reduction was made under this section 
                shall be considered to be the same as the planting and 
                production of a covered commodity.
                    (B) Prohibition.--Nothing in this paragraph provides 
                authority for the Secretary to recalculate base acres 
                for a farm.
            (7) Pilot impact evaluation.--
                    (A) In general.--The Secretary shall periodically 
                evaluate the pilot project conducted under this 
                subsection to determine the effects of the pilot project 
                on the supply and price of--
                          (i) fresh fruits and vegetables; and
                          (ii) fruits and vegetables for processing.
                    (B) Determination.--An evaluation under subparagraph 
                (A) shall include a determination as to whether--
                          (i) producers of fresh fruits and vegetables 
                      are being negatively impacted; and
                          (ii) existing production capacities are being 
                      supplanted.
                    (C) Report.--As soon as practicable after conducting 
                an evaluation under subparagraph (A), 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 the results of the evaluation.
SEC. 1108. <<NOTE: 7 USC 8718.>> SPECIAL RULE FOR LONG GRAIN AND 
                          MEDIUM GRAIN RICE.

    (a) Calculation Method.--Subject to subsections (b) and (c), for the 
purposes of determining the amount of the counter-cyclical payments to 
be paid to the producers on a farm for long grain rice and medium grain 
rice under section 1104, the base acres of rice on the farm shall be 
apportioned using the 4-year average of the percentages of acreage 
planted in the applicable State to long grain rice and medium grain rice 
during the 2003 through 2006 crop years, as determined by the Secretary.
    (b) Producer Election.--As an alternative to the calculation method 
described in subsection (a), the Secretary shall provide

[[Page 122 STAT. 953]]

producers on a farm the opportunity to elect to apportion rice base 
acres on the farm using the 4-year average of--
            (1) the percentages of acreage planted on the farm to long 
        grain rice and medium grain rice during the 2003 through 2006 
        crop years;
            (2) the percentages of any acreage on the farm that the 
        producers were prevented from planting to long grain rice and 
        medium grain rice during the 2003 through 2006 crop years 
        because of drought, flood, other natural disaster, or other 
        condition beyond the control of the producers, as determined by 
        the Secretary; and
            (3) in the case of a crop year for which a producer on a 
        farm elected not to plant to long grain and medium grain rice 
        during the 2003 through 2006 crop years, the percentages of 
        acreage planted in the applicable State to long grain rice and 
        medium grain rice, as determined by the Secretary.

    (c) Limitation.--In carrying out this section, the Secretary shall 
use the same total base acres, payment acres, and payment yields 
established with respect to rice under sections 1101 and 1102 of the 
Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7911, 7912), as 
in effect on September 30, 2007, subject to any adjustment under section 
1101 of this Act.
SEC. 1109. <<NOTE: 7 USC 8719.>> PERIOD OF EFFECTIVENESS.

    This subtitle shall be effective beginning with the 2008 crop year 
of each covered commodity through the 2012 crop year.

   Subtitle B--Marketing Assistance Loans and Loan Deficiency Payments

SEC. 1201. <<NOTE: 7 USC 8731.>> AVAILABILITY OF NONRECOURSE 
                          MARKETING ASSISTANCE LOANS FOR LOAN 
                          COMMODITIES.

    (a) Nonrecourse Loans Available.--
            (1) Availability.--For each of the 2008 through 2012 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) 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.

[[Page 122 STAT. 954]]

SEC. 1202. <<NOTE: 7 USC 8732.>> LOAN RATES FOR NONRECOURSE 
                          MARKETING ASSISTANCE LOANS.

    (a) 2008 Crop Year.--For purposes of the 2008 crop year, 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 base quality 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 long grain rice, $6.50 per hundredweight.
            (9) In the case of medium grain rice, $6.50 per 
        hundredweight.
            (10) In the case of soybeans, $5.00 per bushel.
            (11) In the case of other oilseeds, $9.30 per hundredweight 
        for each of the following kinds of oilseeds:
                    (A) Sunflower seed.
                    (B) Rapeseed.
                    (C) Canola.
                    (D) Safflower.
                    (E) Flaxseed.
                    (F) Mustard seed.
                    (G) Crambe.
                    (H) Sesame seed.
                    (I) Other oilseeds designated by the Secretary.
            (12) In the case of dry peas, $6.22 per hundredweight.
            (13) In the case of lentils, $11.72 per hundredweight.
            (14) In the case of small chickpeas, $7.43 per 
        hundredweight.
            (15) In the case of graded wool, $1.00 per pound.
            (16) In the case of nongraded wool, $0.40 per pound.
            (17) In the case of mohair, $4.20 per pound.
            (18) In the case of honey, $0.60 per pound.

    (b) 2009 Crop Year.--Except as provided in section 1105, for 
purposes of the 2009 crop year, 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 base quality 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 long grain rice, $6.50 per hundredweight.
            (9) In the case of medium grain rice, $6.50 per 
        hundredweight.
            (10) In the case of soybeans, $5.00 per bushel.
            (11) In the case of other oilseeds, $9.30 per hundredweight 
        for each of the following kinds of oilseeds:
                    (A) Sunflower seed.

[[Page 122 STAT. 955]]

                    (B) Rapeseed.
                    (C) Canola.
                    (D) Safflower.
                    (E) Flaxseed.
                    (F) Mustard seed.
                    (G) Crambe.
                    (H) Sesame seed.
                    (I) Other oilseeds designated by the Secretary.
            (12) In the case of dry peas, $5.40 per hundredweight.
            (13) In the case of lentils, $11.28 per hundredweight.
            (14) In the case of small chickpeas, $7.43 per 
        hundredweight.
            (15) In the case of large chickpeas, $11.28 per 
        hundredweight.
            (16) In the case of graded wool, $1.00 per pound.
            (17) In the case of nongraded wool, $0.40 per pound.
            (18) In the case of mohair, $4.20 per pound.
            (19) In the case of honey, $0.60 per pound.

    (c) 2010 Through 2012 Crop Years.--Except as provided in section 
1105, for purposes of each of the 2010 through 2012 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, $2.94 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, $1.95 per bushel.
            (5) In the case of oats, $1.39 per bushel.
            (6) In the case of base quality 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 long grain rice, $6.50 per hundredweight.
            (9) In the case of medium grain rice, $6.50 per 
        hundredweight.
            (10) In the case of soybeans, $5.00 per bushel.
            (11) In the case of other oilseeds, $10.09 per hundredweight 
        for each of the following kinds of oilseeds:
                    (A) Sunflower seed.
                    (B) Rapeseed.
                    (C) Canola.
                    (D) Safflower.
                    (E) Flaxseed.
                    (F) Mustard seed.
                    (G) Crambe.
                    (H) Sesame seed.
                    (I) Other oilseeds designated by the Secretary.
            (12) In the case of dry peas, $5.40 per hundredweight.
            (13) In the case of lentils, $11.28 per hundredweight.
            (14) In the case of small chickpeas, $7.43 per 
        hundredweight.
            (15) In the case of large chickpeas, $11.28 per 
        hundredweight.
            (16) In the case of graded wool, $1.15 per pound.
            (17) In the case of nongraded wool, $0.40 per pound.
            (18) In the case of mohair, $4.20 per pound.
            (19) In the case of honey, $0.69 per pound.

[[Page 122 STAT. 956]]

    (d) Single County Loan Rate for Other Oilseeds.--The Secretary shall 
establish a single loan rate in each county for each kind of other 
oilseeds described in subsections (a)(11), (b)(11), and (c)(11).
SEC. 1203. <<NOTE: 7 USC 8733.>> 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 8734.>> 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, long grain rice, medium grain rice, 
extra long staple cotton, and confectionery and each other kind of 
sunflower seed (other than oil sunflower seed)) 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));
            (2) a rate (as determined by the Secretary) that--
                    (A) is calculated based on average market prices for 
                the loan commodity during the preceding 30-day period; 
                and
                    (B) will minimize discrepancies in marketing loan 
                benefits across State boundaries and across county 
                boundaries; or
            (3) a rate that the Secretary may develop using alternative 
        methods for calculating a repayment rate for a loan commodity 
        that the Secretary determines will--
                    (A) minimize potential loan forfeitures;
                    (B) minimize the accumulation of stocks of the 
                commodity by the Federal Government;
                    (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, Long Grain Rice, and Medium 
Grain Rice.--The Secretary shall permit producers to repay a marketing 
assistance loan under section 1201 for upland cotton, long grain rice, 
and medium grain 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, as 
        determined and adjusted by the Secretary in accordance with this 
        section.

    (c) Repayment Rates for Extra Long Staple Cotton.--Repayment of a 
marketing assistance loan for extra long staple

[[Page 122 STAT. 957]]

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 Price.--
For <<NOTE: Regulations.>> purposes of this section and section 1207, 
the Secretary shall prescribe by regulation--
            (1) a formula to determine the prevailing world market price 
        for each of upland cotton, long grain rice, and medium grain 
        rice; and
            (2) a mechanism by which the Secretary shall announce 
        periodically those prevailing world market prices.

    (e) Adjustment of Prevailing World Market Price for Upland Cotton, 
Long Grain Rice, and Medium Grain Rice.--
            (1) Rice.--The prevailing world market price for long grain 
        rice and medium grain rice determined under subsection (d) shall 
        be adjusted to United States quality and location.
            (2) Cotton.--The prevailing world market price for upland 
        cotton determined under subsection (d)--
                    (A) shall be adjusted to United States quality and 
                location, with the adjustment to include--
                          (i) a reduction equal to any United States 
                      Premium Factor for upland cotton of a quality 
                      higher than Middling (M) 1\3/32\-inch; and
                          (ii) the average costs to market the 
                      commodity, including average transportation costs, 
                      as determined by the Secretary; and
                    (B) may be further adjusted, during the period 
                beginning on the date of enactment of this Act and 
                ending on July 31, 2013, if the Secretary determines the 
                adjustment is necessary to--
                          (i) minimize potential loan forfeitures;
                          (ii) minimize the accumulation of stocks of 
                      upland cotton by the Federal Government;
                          (iii) ensure that upland cotton produced in 
                      the United States can be marketed freely and 
                      competitively, both domestically and 
                      internationally; and
                          (iv) ensure an appropriate transition between 
                      current-crop and forward-crop price quotations, 
                      except that the Secretary may use forward-crop 
                      price quotations prior to July 31 of a marketing 
                      year only if--
                                    (I) there are insufficient current-
                                crop price quotations; and
                                    (II) the forward-crop price 
                                quotation is the lowest such quotation 
                                available.
            (3) Guidelines for additional adjustments.--In making 
        adjustments under this subsection, the Secretary shall establish 
        a mechanism for determining and announcing the adjustments in 
        order to avoid undue disruption in the United States market.

    (f) Repayment Rates for Confectionery and Other Kinds of Sunflower 
Seeds.--The Secretary shall permit the producers on a farm to repay a 
marketing assistance loan under section 1201 for confectionery and each 
other kind of sunflower seed (other than oil sunflower seed) 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

[[Page 122 STAT. 958]]

        163 of the Federal Agriculture Improvement and Reform Act of 
        1996 (7 U.S.C. 7283)); or
            (2) the repayment rate established for oil sunflower seed.

    (g) Payment of Cotton Storage Costs.--
            (1) 2008 through 2011 crop years.--Effective for each of the 
        2008 through 2011 crop years, the Secretary shall provide cotton 
        storage payments in the same manner, and at the same rates as 
        the Secretary provided storage payments for the 2006 crop of 
        cotton, except that the rates shall be reduced by 10 percent.
            (2) Subsequent crop years.--Beginning with the 2012 crop 
        year, the Secretary shall provide cotton storage payments in the 
        same manner, and at the same rates as the Secretary provided 
        storage payments for the 2006 crop of cotton, except that the 
        rates shall be reduced by 20 percent.

    (h) Authority to Temporarily Adjust Repayment Rates.--
            (1) Adjustment authority.--In the event of a severe 
        disruption to marketing, transportation, or related 
        infrastructure, the Secretary may modify the repayment rate 
        otherwise applicable under this section for marketing assistance 
        loans under section 1201 for a loan commodity.
            (2) Duration.--Any adjustment made under paragraph (1) in 
        the repayment rate for marketing assistance loans for a loan 
        commodity shall be in effect on a short-term and temporary 
        basis, as determined by the Secretary.
SEC. 1205. <<NOTE: 7 USC 8735.>> 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.--
                    (A) Marketing assistance loans.--Subject to 
                subparagraph (B), 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.
                    (B) Loan deficiency payment.--Effective for the 2008 
                through 2012 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--

[[Page 122 STAT. 959]]

                    (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.
            (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.
SEC. 1206. <<NOTE: 7 USC 8736.>> PAYMENTS IN LIEU OF LOAN 
                          DEFICIENCY PAYMENTS FOR GRAZED ACREAGE.

    (a) Eligible Producers.--
            (1) In general.--Effective for the 2008 through 2012 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, 
        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 2008 
        through 2012 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--

[[Page 122 STAT. 960]]

                          (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 of the Farm Security 
                      and Rural Investment Act of 2002 (7 U.S.C. 7912).
            (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 of the Farm 
                      Security and Rural Investment Act of 2002 (7 
                      U.S.C. 7912).

    (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.--
                    (A) In general.--The Secretary shall establish an 
                availability period for the payments authorized by this 
                section.
                    (B) Certain commodities.--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.

    (d) Prohibition on Crop Insurance Indemnity or Noninsured Crop 
Assistance.--A 2008 through 2012 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 a policy or plan of insurance authorized 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 8737.>> SPECIAL MARKETING LOAN PROVISIONS 
                          FOR UPLAND COTTON.

    (a) Special Import Quota.--

[[Page 122 STAT. 961]]

            (1) Definition of special import quota.--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.
            (2) Establishment.--
                    (A) In general.--The <<NOTE: President. Time 
                period.>> President shall carry out an import quota 
                program during the period beginning on the date of 
                enactment of this Act through July 31, 2013, as provided 
                in this subsection.
                    (B) Program requirements.--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 
                to a definable and significant international market, as 
                determined by the Secretary, exceeds the prevailing 
                world market price, there shall immediately be in effect 
                a special import quota.
            (3) Quantity.--The quota shall be equal to 1 week's 
        consumption of cotton by domestic mills at the seasonally 
        adjusted average rate of the most recent 3 months for which data 
        are available.
            (4) 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 (2) and entered 
        into the United States not later than 180 days after that date.
            (5) Overlap.--A special quota period may be established that 
        overlaps any existing quota period if required by paragraph (2), 
        except that a special quota period may not be established under 
        this subsection if a quota period has been established under 
        subsection (b).
            (6) 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.
            (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 10 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.

    (b) Limited Global Import Quota for Upland Cotton.--
            (1) Definitions.--In this subsection:
                    (A) Supply.--The term ``supply'' means, using the 
                latest official data of the Bureau of the Census, the 
                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;

[[Page 122 STAT. 962]]

                          (ii) production of the current crop; and
                          (iii) imports to the latest date available 
                      during the marketing year.
                    (B) Demand.--The term ``demand'' means--
                          (i) the average seasonally adjusted annual 
                      rate of domestic mill consumption of cotton during 
                      the most recent 3 months for which data are 
                      available; and
                          (ii) the larger of--
                                    (I) average exports of upland cotton 
                                during the preceding 6 marketing years; 
                                or
                                    (II) cumulative exports of upland 
                                cotton plus outstanding export sales for 
                                the marketing year in which the quota is 
                                established.
                    (C) 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.
            (2) Program.--The <<NOTE: President.>> 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 the 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 or as 
                estimated by the Secretary.
                    (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) 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.
            (3) No overlap.--Notwithstanding paragraph (2), a quota 
        period may not be established that overlaps an existing quota 
        period or a special quota period established under subsection 
        (a).

[[Page 122 STAT. 963]]

    (c) Economic Adjustment Assistance to Users of Upland Cotton.--
            (1) In general.--Subject to paragraph (2), the Secretary 
        shall, on a monthly basis, provide economic adjustment 
        assistance to domestic users of upland cotton in the form of 
        payments for all documented use of that upland cotton during the 
        previous monthly period regardless of the origin of the upland 
        cotton.
            (2) Value of assistance.--
                    (A) Beginning period.--During the period beginning 
                on August 1, 2008, and ending on July 31, 2012, the 
                value of the assistance provided under paragraph (1) 
                shall be 4 cents per pound.
                    (B) Subsequent period.--Effective <<NOTE: Effective 
                date.>> beginning on August 1, 2012, the value of the 
                assistance provided under paragraph (1) shall be 3 cents 
                per pound.
            (3) Allowable purposes.--Economic adjustment assistance 
        under this subsection shall be made available only to domestic 
        users of upland cotton that certify that the assistance shall be 
        used only to acquire, construct, install, modernize, develop, 
        convert, or expand land, plant, buildings, equipment, 
        facilities, or machinery.
            (4) Review or audit.--The Secretary may conduct such review 
        or audit of the records of a domestic user under this subsection 
        as the Secretary determines necessary to carry out this 
        subsection.
            (5) Improper use of assistance.--If the Secretary 
        determines, after a review or audit of the records of the 
        domestic user, that economic adjustment assistance under this 
        subsection was not used for the purposes specified in paragraph 
        (3), the domestic user shall be--
                    (A) liable to repay the assistance to the Secretary, 
                plus interest, as determined by the Secretary; and
                    (B) ineligible to receive assistance under this 
                subsection for a period of 1 year following the 
                determination of the Secretary.
SEC. 1208. <<NOTE: 7 USC 8738.>> SPECIAL COMPETITIVE PROVISIONS 
                          FOR EXTRA LONG STAPLE COTTON.

    (a) Competitiveness Program.--Notwithstanding <<NOTE: Effective 
date. Termination date.>> any other provision of law, during the period 
beginning on the date of enactment of this Act through July 31, 2013, 
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

[[Page 122 STAT. 964]]

        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), 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.
SEC. 1209. <<NOTE: 7 USC 8739.>> AVAILABILITY OF RECOURSE LOANS 
                          FOR HIGH MOISTURE FEED GRAINS AND SEED 
                          COTTON.

    (a) High Moisture Feed Grains.--
            (1) Definition of high moisture state.--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.
            (2) Recourse loans available.--For each of the 2008 through 
        2012 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 <<NOTE: Certification.>> 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.

[[Page 122 STAT. 965]]

            (3) 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
                    (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.

    (b) Recourse Loans Available for Seed Cotton.--For each of the 2008 
through 2012 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)).
SEC. 1210. <<NOTE: 7 USC 8740.>> ADJUSTMENTS OF LOANS.

    (a) Adjustment Authority.--Subject to subsection (e), the Secretary 
may make appropriate adjustments in the loan rates for any loan 
commodity (other than cotton) for differences in grade, type, quality, 
location, and other factors.
    (b) Manner of Adjustment.--The adjustments under subsection (a) 
shall, to the maximum extent practicable, be made in such a manner that 
the average loan level for the commodity will, on the basis of the 
anticipated incidence of the factors, be equal to the level of support 
determined in accordance with this subtitle and subtitles B through E.
    (c) Adjustment on County Basis.--
            (1) In general.--The Secretary may establish loan rates for 
        a crop for producers in individual counties in a manner that 
        results in the lowest loan rate being 95 percent of the national 
        average loan rate, if those loan rates do not result in an 
        increase in outlays.
            (2) Prohibition.--Adjustments under this subsection shall 
        not result in an increase in the national average loan rate for 
        any year.

    (d) Adjustment in Loan Rate for Cotton.--
            (1) In general.--The Secretary may make appropriate 
        adjustments in the loan rate for cotton for differences in 
        quality factors.
            (2) Revisions to quality adjustments for upland cotton.--
                    (A) In general.--Not <<NOTE: Deadline.>> later than 
                180 days after the date of enactment of this Act, the 
                Secretary shall implement revisions in the 
                administration of the marketing assistance loan program 
                for upland cotton to more accurately and efficiently 
                reflect market values for upland cotton.
                    (B) Mandatory revisions.--Revisions under 
                subparagraph (A) shall include--
                          (i) the elimination of warehouse location 
                      differentials;

[[Page 122 STAT. 966]]

                          (ii) the establishment of differentials for 
                      the various quality factors and staple lengths of 
                      cotton based on a 3-year, weighted moving average 
                      of the weighted designated spot market regions, as 
                      determined by regional production;
                          (iii) the elimination of any artificial split 
                      in the premium or discount between upland cotton 
                      with a 32 or 33 staple length due to micronaire; 
                      and
                          (iv) a mechanism to ensure that no premium or 
                      discount is established that exceeds the premium 
                      or discount associated with a leaf grade that is 1 
                      better than the applicable color grade.
                    (C) Discretionary revisions.--Revisions under 
                subparagraph (A) may include--
                          (i) the use of non-spot market price data, in 
                      addition to spot market price data, that would 
                      enhance the accuracy of the price information used 
                      in determining quality adjustments under this 
                      subsection;
                          (ii) adjustments in the premiums or discounts 
                      associated with upland cotton with a staple length 
                      of 33 or above due to micronaire with the goal of 
                      eliminating any unnecessary artificial splits in 
                      the calculations of the premiums or discounts; and
                          (iii) such other adjustments as the Secretary 
                      determines appropriate, after consultations 
                      conducted in accordance with paragraph (3).
            (3) Consultation with private sector.--
                    (A) Prior to revision.--In making adjustments to the 
                loan rate for cotton (including any review of the 
                adjustments) as provided in this subsection, the 
                Secretary shall consult with representatives of the 
                United States cotton industry.
                    (B) Inapplicability of federal advisory committee 
                act.--The Federal Advisory Committee Act (5 U.S.C. App.) 
                shall not apply to consultations under this subsection.
            (4) Review of adjustments.--The Secretary may review the 
        operation of the upland cotton quality adjustments implemented 
        pursuant to this subsection and may make further revisions to 
        the administration of the loan program for upland cotton, by--
                    (A) revoking or revising any actions taken under 
                paragraph (2)(B); or
                    (B) revoking or revising any actions taken or 
                authorized to be taken under paragraph (2)(C).

    (e) Rice.--The Secretary shall not make adjustments in the loan 
rates for long grain rice and medium grain rice, except for differences 
in grade and quality (including milling yields).

                           Subtitle C--Peanuts

SEC. 1301. <<NOTE: 7 USC 8751.>> DEFINITIONS.

    In this subtitle:
            (1) Base acres for peanuts.--
                    (A) In general.--The term ``base acres for peanuts'' 
                means the number of acres assigned to a farm pursuant to 
                section 1302 of the Farm Security and Rural Investment

[[Page 122 STAT. 967]]

                Act of 2002 (7 U.S.C. 7952), as in effect on September 
                30, 2007, subject to any adjustment under section 1302 
                of this Act.
                    (B) Covered commodities.--The term ``base acres'', 
                with respect to a covered commodity, has the meaning 
                given the term in section 1101.
            (2) Counter-cyclical payment.--The term ``counter-cyclical 
        payment'' means a payment made to producers on a farm under 
        section 1304.
            (3) Direct payment.--The term ``direct payment'' means a 
        direct payment made to producers on a farm under section 1303.
            (4) 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.
            (5) Payment acres.--The term ``payment acres'' means, in the 
        case of direct payments and counter-cyclical payments--
                    (A) except as provided in subparagraph (B), 85 
                percent of the base acres of peanuts on a farm on which 
                direct payments or counter-cyclical payments are made; 
                and
                    (B) in the case of direct payments for each of the 
                2009 through 2011 crop years, 83.3 percent of the base 
                acres for peanuts on a farm on which direct payments are 
                made.
            (6) Payment yield.--The term ``payment yield'' means the 
        yield established for direct payments and the yield established 
        for counter-cyclical payments under section 1302 of the Farm 
        Security and Rural Investment Act of 2002 (7 U.S.C. 7952), as in 
        effect on September 30, 2007, for a farm for peanuts.
            (7) Producer.--
                    (A) In general.--The term ``producer'' means an 
                owner, operator, landlord, tenant, or sharecropper that 
                shares in the 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.
                    (B) Hybrid seed.--In determining whether a grower of 
                hybrid seed is a producer, the Secretary shall--
                          (i) not take into consideration the existence 
                      of a hybrid seed contract; and
                          (ii) ensure that program requirements do not 
                      adversely affect the ability of the grower to 
                      receive a payment under this subtitle.
            (8) State.--The term ``State'' means--
                    (A) a State;
                    (B) the District of Columbia;
                    (C) the Commonwealth of Puerto Rico; and
                    (D) any other territory or possession of the United 
                States.
            (9) Target price.--The term ``target price'' means the price 
        per ton of peanuts used to determine the payment rate for 
        counter-cyclical payments.
            (10) United states.--The term ``United States'', when used 
        in a geographical sense, means all of the States.

[[Page 122 STAT. 968]]

SEC. 1302. <<NOTE: 7 USC 8752.>> BASE ACRES FOR PEANUTS FOR A 
                          FARM.

    (a) Adjustment of Base Acreage for Peanuts.--
            (1) In general.--The Secretary shall provide for an 
        adjustment, as appropriate, in the base acres for peanuts for a 
        farm whenever any 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, or was terminated or expired 
                during the period beginning on October 1, 2007, and 
                ending on the date of enactment of this Act.
                    (B) Cropland is released from coverage under a 
                conservation reserve contract by the Secretary, or was 
                released during the period beginning on October 1, 2007, 
                and ending on the date of enactment of this Act.
                    (C) The producer has eligible pulse crop acreage, 
                which shall be determined in the same manner as eligible 
                oilseed acreage under section 1101(a)(2) of the Farm 
                Security and Rural Investment Act of 2002 (7 U.S.C. 
                7911(a)(2)).
                    (D) The producer has eligible oilseed acreage as the 
                result of the Secretary designating additional oilseeds, 
                which shall be determined in the same manner as eligible 
                oilseed acreage under section 1101(a)(2) of the Farm 
                Security and Rural Investment Act of 2002 (7 U.S.C. 
                7911(a)(2)).
            (2) Special conservation reserve acreage payment rules.--For 
        the crop year in which a base acres for peanuts adjustment under 
        subparagraph (A) or (B) of 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.

    (b) 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 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 for a covered 
                commodity.
                    (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 
                Federal conservation program for which payments are made 
                in exchange for not producing an agricultural commodity 
                on the acreage.
                    (D) Any eligible pulse crop acreage, which shall be 
                determined in the same manner as eligible oilseed 
                acreage under section 1101(a)(2) of the Farm Security 
                and Rural Investment Act of 2002 (7 U.S.C. 7911(a)(2)).

[[Page 122 STAT. 969]]

                    (E) If the Secretary designates additional oilseeds, 
                any eligible oilseed acreage, which shall be determined 
                in the same manner as eligible oilseed acreage under 
                section 1101(a)(2) of the Farm Security and Rural 
                Investment Act of 2002 (7 U.S.C. 7911(a)(2)).
            (3) Selection of acres.--The Secretary shall give the owner 
        of the farm the opportunity to select the base acres for peanuts 
        or the base acres for covered commodities against which the 
        reduction required by paragraph (1) will be made.
            (4) Exception for double-cropped acreage.--In applying 
        paragraph (1), the Secretary shall make an exception in the case 
        of double cropping, as determined by the Secretary.
            (5) Coordinated application of requirements.--The Secretary 
        shall take into account section 1101(b) when applying the 
        requirements of this subsection.

    (c) Reduction in Base Acres.--
            (1) Reduction at option of owner.--
                    (A) In general.--The owner of a farm may reduce, at 
                any time, the base acres for peanuts for the farm.
                    (B) Effect of reduction.--A reduction under 
                subparagraph (A) shall be permanent and made in a manner 
                prescribed by the Secretary.
            (2) Required action by secretary.--
                    (A) In general.--The Secretary shall proportionately 
                reduce base acres on a farm for peanuts for land that 
                has been subdivided and developed for multiple 
                residential units or other nonfarming uses if the size 
                of the tracts and the density of the subdivision is such 
                that the land is unlikely to return to the previous 
                agricultural use, unless the producers on the farm 
                demonstrate that the land--
                          (i) remains devoted to commercial agricultural 
                      production; or
                          (ii) is likely to be returned to the previous 
                      agricultural use.
                    (B) Requirement.--
                The <<NOTE: Procedures.>> Secretary shall establish 
                procedures to identify land described in subparagraph 
                (A).
            (3) Review and report.--Each year, to ensure, to the maximum 
        extent practicable, that payments are received only by 
        producers, the Secretary shall submit to Congress a report that 
        describes the results of the actions taken under paragraph (2).

    (d) Treatment of Farms With Limited Base Acres.--
            (1) Prohibition on payments.--Except as provided in 
        paragraph (2) and notwithstanding any other provision of this 
        title, a producer on a farm may not receive direct payments, 
        counter-cyclical payments, or average crop revenue election 
        payments if the sum of the base acres of the farm is 10 acres or 
        less, as determined by the Secretary.
            (2) Exceptions.--Paragraph (1) shall not apply to a farm 
        owned by--
                    (A) a socially disadvantaged farmer or rancher (as 
                defined in section 355(e) of the Consolidated Farm and 
                Rural Development Act (7 U.S.C. 2003(e)); or
                    (B) a limited resource farmer or rancher, as defined 
                by the Secretary.
            (3) Data collection and publication.--The Secretary shall--

[[Page 122 STAT. 970]]

                    (A) collect and publish segregated data and survey 
                information about the farm profiles, utilization of 
                land, and crop production; and
                    (B) perform an evaluation on the supply and price of 
                fruits and vegetables based on the effects of suspension 
                of base acres under this section.
SEC. 1303. <<NOTE: 7 USC 8753.>> AVAILABILITY OF DIRECT PAYMENTS 
                          FOR PEANUTS.

    (a) Payment Required.--For each of the 2008 through 2012 crop years 
for peanuts, the Secretary shall make direct payments to the producers 
on a farm for which a payment yield and base acres for peanuts are 
established.
    (b) Payment Rate.--Except as provided in section 1105, the payment 
rate used to make direct payments with respect to peanuts for a crop 
year shall be equal to $36 per ton.
    (c) Payment Amount.--The amount of the direct payment to be paid to 
the producers on a farm for peanuts for a crop year shall be equal to 
the product of the following:
            (1) The payment rate specified in subsection (b).
            (2) The payment acres on the farm.
            (3) The payment yield for the farm.

    (d) Time for Payment.--
            (1) In general.--Except as provided in paragraph (2), in the 
        case of each of the 2008 through 2012 crop years, the Secretary 
        may not make direct payments under this section before October 1 
        of the calendar year in which the crop is harvested.
            (2) Advance payments.--
                    (A) Option.--
                          (i) In general.--At the option of the 
                      producers on a farm, the Secretary shall pay in 
                      advance up to 22 percent of the direct payment for 
                      peanuts for any of the 2008 through 2011 crop 
                      years to the producers on a farm.
                          (ii) 2008 crop year.--If the producers on a 
                      farm elect to receive advance direct payments 
                      under clause (i) for peanuts for the 2008 crop 
                      year, as soon as practicable after the election, 
                      the Secretary shall make the advance direct 
                      payment to the producers on the farm.
                    (B) Month.--
                          (i) Selection.--Subject to clauses (ii) and 
                      (iii), the producers on a farm shall select the 
                      month during which the advance payment for a crop 
                      year will be made.
                          (ii) Options.--The month selected may be any 
                      month during the period--
                                    (I) beginning on December 1 of the 
                                calendar year before the calendar year 
                                in which the crop of peanuts is 
                                harvested; and
                                    (II) ending during the month within 
                                which the direct payment would otherwise 
                                be made.
                          (iii) Change.--The producers on a farm may 
                      change the selected month for a subsequent advance 
                      payment by providing advance notice to the 
                      Secretary.
            (3) Repayment of advance payments.--If a producer on a farm 
        that receives an advance direct payment for a crop

[[Page 122 STAT. 971]]

        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 8754.>> AVAILABILITY OF COUNTER-CYCLICAL 
                          PAYMENTS FOR PEANUTS.

    (a) Payment Required.--Except as provided in section 1105, for each 
of the 2008 through 2012 crop years for peanuts, the Secretary shall 
make counter-cyclical payments to producers on farms for which payment 
yields and base acres for peanuts are established if the Secretary 
determines that the effective price for peanuts is less than the target 
price for peanuts.
    (b) Effective Price.--For purposes of subsection (a), the 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 for peanuts under section 
        1303 for the purpose of making direct payments.

    (c) Target Price.--For purposes of subsection (a), the target price 
for peanuts shall be equal to $495 per ton.
    (d) Payment Rate.--The payment rate used to make counter-cyclical 
payments for a crop year shall be equal to the difference between--
            (1) the target price for peanuts; and
            (2) the effective price determined under subsection (b) for 
        peanuts.

    (e) Payment Amount.--If counter-cyclical payments are required to be 
paid for any of the 2008 through 2012 crops of peanuts, the amount of 
the counter-cyclical payment to be paid to the producers on a farm for 
that crop year shall be equal to the product of the following:
            (1) The payment rate specified in subsection (d).
            (2) The payment acres on the farm.
            (3) The payment yield for the farm.

    (f) Time for Payments.--
            (1) General rule.--Except as provided in paragraph (2), if 
        the Secretary determines under subsection (a) that counter-
        cyclical payments are required to be made under this section for 
        a crop of peanuts, beginning October 1, or as soon as 
        practicable after the end of the marketing year, the Secretary 
        shall make the counter-cyclical payments for the crop.
            (2) Availability of partial payments.--
                    (A) In general.--If, before the end of the 12-month 
                marketing year, the Secretary estimates that counter-
                cyclical payments will be required under this section 
                for a crop year, the Secretary shall give producers on a 
                farm the option to receive partial payments of the 
                counter-cyclical payment projected to be made for the 
                crop.
                    (B) <<NOTE: Deadline.>> Election.--

[[Page 122 STAT. 972]]

                          (i) In general.--The Secretary shall allow 
                      producers on a farm to make an election to receive 
                      partial payments under subparagraph (A) at any 
                      time but not later than 60 days prior to the end 
                      of the marketing year for the crop.
                          (ii) Date of issuance.--The Secretary shall 
                      issue the partial payment after the date of an 
                      announcement by the Secretary but not later than 
                      30 days prior to the end of the marketing year.
            (3) Time for partial payments.--When the Secretary makes 
        partial payments for any of the 2008 through 2010 crop years--
                    (A) the first partial payment shall be made after 
                completion of the first 180 days of the marketing year 
                for that crop; and
                    (B) the final partial payment shall be made 
                beginning October 1, or as soon as practicable 
                thereafter, after the end of the applicable marketing 
                year for that crop.
            (4) Amount of partial payments.--
                    (A) First partial payment.--For each of the 2008 
                through 2010 crop years, the first partial payment under 
                paragraph (3) to the producers on a farm may not exceed 
                40 percent of the projected counter-cyclical payment for 
                the crop year, as determined by the Secretary.
                    (B) Final payment.--The final payment for a crop 
                year shall be equal to the difference between--
                          (i) the actual counter-cyclical payment to be 
                      made to the producers for that crop year; and
                          (ii) the amount of the partial payment made to 
                      the producers under subparagraph (A).
            (5) Repayment.--The producers on a farm that receive a 
        partial payment under this subsection for a crop year shall 
        repay to the Secretary the amount, if any, by which the total of 
        the partial payments exceed the actual counter-cyclical payment 
        to be made for that crop year.
SEC. 1305. <<NOTE: 7 USC 8755.>> PRODUCER AGREEMENT REQUIRED AS 
                          CONDITION ON PROVISION OF PAYMENTS.

    (a) Compliance With Certain Requirements.--
            (1) Requirements.--Before the producers on a farm may 
        receive direct payments or counter-cyclical payments under this 
        subtitle, or average crop revenue election payments under 
        section 1105, with respect to the farm, the producers shall 
        agree, during the crop year for which the payments are made and 
        in exchange for the payments--
                    (A) to comply with applicable conservation 
                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.);
                    (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

[[Page 122 STAT. 973]]

                or conserving use, and not for a nonagricultural 
                commercial, industrial, or residential use, as 
                determined by the Secretary; and
                    (E) to effectively control noxious weeds and 
                otherwise maintain the land in accordance with sound 
                agricultural practices, as determined by the Secretary, 
                if the 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.--
                    (A) In general.--Except as provided in paragraph 
                (2), a transfer of (or change in) the interest of the 
                producers on a farm in the base acres for peanuts for 
                which direct payments or counter-cyclical payments are 
                made, or on which average crop revenue election payments 
                are based, shall result in the termination of the direct 
                payments, counter-cyclical payments, or average crop 
                revenue election payments to the extent the payments are 
                made or based on the base acres, unless the transferee 
                or owner of the acreage agrees to assume all obligations 
                under subsection (a).
                    (B) Effective date.--The termination shall take 
                effect on the date determined by the Secretary.
            (2) Exception.--If a producer entitled to a direct payment, 
        counter-cyclical payment, or average crop revenue election 
        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.--
            (1) In general.--As a condition on the receipt of any 
        benefits under this subtitle, the Secretary shall require 
        producers on a farm to submit to the Secretary annual acreage 
        reports with respect to all cropland on the farm.
            (2) Penalties.--No penalty with respect to benefits under 
        this subtitle shall be assessed against the producers on a farm 
        for an inaccurate acreage report unless the producers on the 
        farm knowingly and willfully falsified the acreage report.

    (d) Tenants and Sharecroppers.--In carrying out this 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, counter-cyclical payments, or average crop 
revenue election payments under section 1105 among the producers on a 
farm on a fair and equitable basis.
SEC. 1306. <<NOTE: 7 USC 8756.>> 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.--

[[Page 122 STAT. 974]]

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

    (c) Exceptions.--Paragraphs (1) and (2) of subsection (b) shall not 
limit the planting of an agricultural commodity specified in paragraph 
(3) of that subsection--
            (1) in any region in which there is a history of double-
        cropping of peanuts with agricultural commodities specified in 
        subsection (b)(3), as determined by the Secretary, in which case 
        the double-cropping shall be permitted;
            (2) on a farm that the Secretary determines has a history of 
        planting agricultural commodities specified in subsection (b)(3) 
        on the base acres for peanuts, except that direct payments and 
        counter-cyclical payments shall be reduced by an acre for each 
        acre planted to such an agricultural commodity; or
            (3) by the producers on a farm that the Secretary 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 8757.>> MARKETING ASSISTANCE LOANS AND 
                          LOAN DEFICIENCY PAYMENTS FOR PEANUTS.

    (a) Nonrecourse Loans Available.--
            (1) Availability.--For each of the 2008 through 2012 crops 
        of peanuts, the Secretary shall make available to producers on a 
        farm nonrecourse marketing assistance loans for peanuts produced 
        on the farm.
            (2) Terms and conditions.--The loans shall be made under 
        terms and conditions that are prescribed by the Secretary and at 
        the loan rate established under subsection (b).
            (3) Eligible production.--The producers on a farm shall be 
        eligible for a marketing assistance loan under this subsection 
        for any quantity of peanuts produced on the farm.
            (4) Options for obtaining loan.--A marketing assistance loan 
        under this subsection, and loan deficiency payments under 
        subsection (e), may be obtained at the option of the producers 
        on a farm through--

[[Page 122 STAT. 975]]

                    (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) Storage, handling, and associated costs.--
                    (A) In general.--Beginning with the 2008 crop of 
                peanuts, to ensure proper storage of peanuts for which a 
                loan is made under this section, the Secretary shall pay 
                handling and other associated costs (other than storage 
                costs) incurred at the time at which the peanuts are 
                placed under loan, as determined by the Secretary.
                    (B) Redemption and forfeiture.--The Secretary 
                shall--
                          (i) require the repayment of handling and 
                      other associated costs paid under subparagraph (A) 
                      for all peanuts pledged as collateral for a loan 
                      that is redeemed under this section; and
                          (ii) pay storage, handling, and other 
                      associated costs for all peanuts pledged as 
                      collateral that are forfeited under this section.
            (7) Marketing.--A marketing association or cooperative may 
        market peanuts for which a loan is made under this section in 
        any manner that conforms to consumer needs, including the 
        separation of peanuts by type and quality.

    (b) Loan Rate.--Except as provided in section 1105, the loan rate 
for a marketing assistance loan for peanuts under subsection (a) shall 
be equal to $355 per ton.
    (c) Term of Loan.--
            (1) In general.--A marketing assistance loan for peanuts 
        under subsection (a) shall have a term of 9 months beginning on 
        the first day of the first month after the month in which the 
        loan is made.
            (2) Extensions prohibited.--The Secretary may not extend the 
        term of a marketing assistance loan for peanuts under subsection 
        (a).

    (d) Repayment Rate.--
            (1) In general.--The Secretary shall permit producers on a 
        farm to repay a marketing assistance loan for peanuts under 
        subsection (a) at a rate that is the lesser of--
                    (A) the loan rate established for peanuts under 
                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;

[[Page 122 STAT. 976]]

                          (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.
            (2) Authority to temporarily adjust repayment rates.--
                    (A) Adjustment authority.--In the event of a severe 
                disruption to marketing, transportation, or related 
                infrastructure, the Secretary may modify the repayment 
                rate otherwise applicable under this subsection for 
                marketing assistance loans for peanuts under subsection 
                (a).
                    (B) Duration.--An adjustment made under subparagraph 
                (A) in the repayment rate for marketing assistance loans 
                for peanuts shall be in effect on a short-term and 
                temporary basis, as determined by the Secretary.

    (e) Loan Deficiency Payments.--
            (1) Availability.--The Secretary may make loan deficiency 
        payments available to producers on a farm that, although 
        eligible to obtain a marketing assistance loan for peanuts under 
        subsection (a), agree to forgo obtaining the loan for the 
        peanuts in return for loan deficiency payments under this 
        subsection.
            (2) Computation.--A loan deficiency payment under this 
        subsection shall be computed by multiplying--
                    (A) the payment rate determined under paragraph (3) 
                for peanuts; by
                    (B) the quantity of the peanuts produced by the 
                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.--The 
        Secretary shall determine the amount of the loan deficiency 
        payment to be made under this subsection to the producers on a 
        farm with respect to a quantity of peanuts using the payment 
        rate in effect under paragraph (3) as of the date the producers 
        request the payment.

    (f) Compliance With Conservation and Wetlands 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 under this subtitle 
only in a manner that is consistent with such activities in regard to 
other commodities.

[[Page 122 STAT. 977]]

SEC. 1308. <<NOTE: 7 USC 8758.>> ADJUSTMENTS OF LOANS.

    (a) Adjustment Authority.--The Secretary may make appropriate 
adjustments in the loan rates for peanuts for differences in grade, 
type, quality, location, and other factors.
    (b) Manner of Adjustment.--The adjustments under subsection (a) 
shall, to the maximum extent practicable, be made in such a manner that 
the average loan level for peanuts will, on the basis of the anticipated 
incidence of the factors, be equal to the level of support determined in 
accordance with this subtitle and subtitles B, D, and E.
    (c) Adjustment on County Basis.--
            (1) In general.--Subject to paragraph (2), the Secretary may 
        establish loan rates for a crop of peanuts for producers in 
        individual counties in a manner that results in the lowest loan 
        rate being 95 percent of the national average loan rate, if 
        those loan rates do not result in an increase in outlays.
            (2) Prohibition.--Adjustments under this subsection shall 
        not result in an increase in the national average loan rate for 
        any year.

                            Subtitle D--Sugar

SEC. 1401. SUGAR PROGRAM.

    (a) In General.--Section 156 of the Federal Agriculture Improvement 
and Reform Act of 1996 (7 U.S.C. 7272) is amended to read as follows:
``SEC. 156. <<NOTE: Loans.>> SUGAR PROGRAM.

    ``(a) Sugarcane.--The Secretary shall make loans available to 
processors of domestically grown sugarcane at a rate equal to--
            ``(1) 18.00 cents per pound for raw cane sugar for the 2008 
        crop year;
            ``(2) 18.25 cents per pound for raw cane sugar for the 2009 
        crop year;
            ``(3) 18.50 cents per pound for raw cane sugar for the 2010 
        crop year;
            ``(4) 18.75 cents per pound for raw cane sugar for the 2011 
        crop year; and
            ``(5) 18.75 cents per pound for raw cane sugar for the 2012 
        crop year.

    ``(b) Sugar Beets.--The Secretary shall make loans available to 
processors of domestically grown sugar beets at a rate equal to--
            ``(1) 22.9 cents per pound for refined beet sugar for the 
        2008 crop year; and
            ``(2) a rate that is equal to 128.5 percent of the loan rate 
        per pound of raw cane sugar for the applicable crop year under 
        subsection (a) for each of the 2009 through 2012 crop years.

    ``(c) Term of Loans.--
            ``(1) In general.--A loan under this section during any 
        fiscal year shall be made available not earlier than the 
        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

[[Page 122 STAT. 978]]

                    ``(B) the end of the fiscal year in which the loan 
                is made.
            ``(2) Supplemental loans.--In the case of a loan made under 
        this section in the last 3 months of a fiscal year, the 
        processor may repledge the sugar as collateral for a second loan 
        in the subsequent fiscal year, except that the second loan 
        shall--
                    ``(A) be made at the loan rate in effect at the time 
                the first loan was made; and
                    ``(B) mature in 9 months less the quantity of time 
                that the first loan was in effect.

    ``(d) Loan Type; Processor Assurances.--
            ``(1) Nonrecourse loans.--The Secretary shall carry out this 
        section through the use of nonrecourse loans.
            ``(2) Processor assurances.--
                    ``(A) In general.--The Secretary shall obtain from 
                each processor that receives a loan under this section 
                such assurances as the Secretary considers adequate to 
                ensure that the processor will provide payments to 
                producers that are proportional to the value of the loan 
                received by the processor for the sugar beets and 
                sugarcane delivered by producers to the processor.
                    ``(B) Minimum payments.--
                          ``(i) In general.--Subject to clause (ii), the 
                      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.
            ``(3) Administration.--The Secretary may not impose or 
        enforce any prenotification requirement, or similar 
        administrative requirement not otherwise in effect on May 13, 
        2002, that has the effect of preventing a processor from 
        electing to forfeit the loan collateral (of an acceptable grade 
        and quality) on the maturity of the loan.

    ``(e) Loans for In-Process Sugar.--
            ``(1) Definition of in-process sugars and syrups.--In this 
        subsection, the term `in-process sugars and syrups' does not 
        include raw sugar, liquid sugar, invert sugar, invert syrup, or 
        other finished product that is otherwise eligible for a loan 
        under subsection (a) or (b).
            ``(2) Availability.--The Secretary shall make nonrecourse 
        loans available to processors of a crop of domestically grown 
        sugarcane and sugar beets for in-process sugars and syrups 
        derived from the crop.
            ``(3) Loan rate.--The loan rate shall be equal to 80 percent 
        of the loan rate applicable to raw cane sugar or refined beet 
        sugar, as determined by the Secretary on the basis of the source 
        material for the in-process sugars and syrups.
            ``(4) Further processing on forfeiture.--
                    ``(A) In general.--As a condition of the forfeiture 
                of in-process sugars and syrups serving as collateral 
                for a loan under paragraph (2), the processor shall, 
                within such reasonable time period as the Secretary may 
                prescribe

[[Page 122 STAT. 979]]

                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 (c).

    ``(f) Avoiding Forfeitures; Corporation Inventory Disposition.--
            ``(1) In general.--Subject to subsection (d)(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.
            ``(2) Inventory disposition.--
                    ``(A) In general.--To carry out paragraph (1), the 
                Commodity Credit Corporation may accept bids to obtain 
                raw cane sugar or refined beet sugar in the inventory of 
                the Commodity Credit Corporation from (or otherwise make 
                available such commodities, on appropriate terms and 
                conditions, to) processors of sugarcane and processors 
                of sugar beets (acting in conjunction with the producers 
                of the sugarcane or sugar beets processed by the 
                processors) in return for the reduction of production of 
                raw cane sugar or refined beet sugar, as appropriate.
                    ``(B) Bioenergy feedstock.--If a reduction in the 
                quantity of production accepted under subparagraph (A) 
                involves sugar beets or sugarcane that has already been 
                planted, the sugar beets or sugarcane so planted may not 
                be used for any commercial purpose other than as a 
                bioenergy feedstock.

[[Page 122 STAT. 980]]

                    ``(C) Additional authority.--The authority provided 
                under this paragraph is in addition to any authority of 
                the Commodity Credit Corporation under any other law.

    ``(g) Information Reporting.--
            ``(1) Duty of processors and refiners to report.--A 
        sugarcane processor, cane sugar refiner, and sugar beet 
        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) Collection of information on mexico.--
                    ``(A) Collection.--The Secretary shall collect--
                          ``(i) information on the production, 
                      consumption, stocks, and trade of sugar in Mexico, 
                      including United States exports of sugar to 
                      Mexico; and
                          ``(ii) publicly available information on 
                      Mexican production, consumption, and trade of high 
                      fructose corn syrups.
                    ``(B) Publication.--The data collected under 
                subparagraph (A) shall be published in each edition of 
                the World Agricultural Supply and Demand Estimates.
            ``(5) Penalty.--Any person willfully failing or refusing to 
        furnish the information required to be reported by paragraph 
        (1), (2), or (3), or furnishing willfully false information, 
        shall be subject to a civil penalty of not more than $10,000 for 
        each such violation.
            ``(6) Monthly reports.--Taking <<NOTE: Publication.>> into 
        consideration the information received under this subsection, 
        the Secretary shall

[[Page 122 STAT. 981]]

        publish on a monthly basis composite data on production, 
        imports, distribution, and stock levels of sugar.

    ``(h) 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.
    ``(i) Effective Period.--This section shall be effective only for 
the 2008 through 2012 crops of sugar beets and sugarcane.''.
    (b) Transition.--The <<NOTE: 7 USC 7272 note.>> Secretary shall make 
loans for raw cane sugar and refined beet sugar available for the 2007 
crop year on the terms and conditions provided in section 156 of the 
Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272), 
as in effect on the day before the date of enactment of this Act.
SEC. 1402. <<NOTE: 7 USC 3602 note.>> UNITED STATES MEMBERSHIP IN 
                          THE INTERNATIONAL SUGAR ORGANIZATION.

    The <<NOTE: Deadline.>> Secretary shall work with the Secretary of 
State to restore United States membership in the International Sugar 
Organization not later than 1 year after the date of enactment of this 
Act.
SEC. 1403. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR.

    (a) Definitions.--Section 359a of the Agricultural Adjustment Act of 
1938 (7 U.S.C. 1359aa) is amended--
            (1) by redesignating paragraphs (1), (2), (3), and (4) as 
        paragraphs (2), (4), (5), and (6), respectively;
            (2) by inserting before paragraph (2) (as so redesignated) 
        the following:
            ``(1) Human consumption.--The term `human consumption', when 
        used in the context of a reference to sugar (whether in the form 
        of sugar, in-process sugar, syrup, molasses, or in some other 
        form) for human consumption, includes sugar for use in human 
        food, beverages, or similar products.''; and
            (3) by inserting after paragraph (2) (as so redesignated) 
        the following:
            ``(3) Market.--
                    ``(A) In general.--The term `market' means to sell 
                or otherwise dispose of in commerce in the United 
                States.
                    ``(B) Inclusions.--The term `market' includes--
                          ``(i) the forfeiture of sugar under the loan 
                      program for sugar established under section 156 of 
                      the Federal Agriculture Improvement and Reform Act 
                      of 1996 (7 U.S.C. 7272);
                          ``(ii) with respect to any integrated 
                      processor and refiner, the movement of raw cane 
                      sugar into the refining process; and
                          ``(iii) the sale of sugar for the production 
                      of ethanol or other bioenergy product, if the 
                      disposition of the sugar is administered by the 
                      Secretary under section 9010 of the Farm Security 
                      and Rural Investment Act of 2002.
                    ``(C) Marketing year.--Forfeited sugar described in 
                subparagraph (B)(i) shall be considered to have been 
                marketed during the crop year for which a loan is made 
                under the loan program described in that 
                subparagraph.''.

[[Page 122 STAT. 982]]

    (b) Flexible Marketing Allotments for Sugar.--Section 359b of the 
Agricultural Adjustment Act of 1938 (7 U.S.C. 1359bb) is amended to read 
as follows:
``SEC. 359b. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR.

    ``(a) Sugar <<NOTE: Deadlines.>> Estimates.--
            ``(1) In general.--Not later than August 1 before the 
        beginning of each of the 2008 through 2012 crop years for 
        sugarcane and sugar beets, the Secretary shall estimate--
                    ``(A) the quantity of sugar that will be subject to 
                human consumption in the United States during the crop 
                year;
                    ``(B) the quantity of sugar that would provide for 
                reasonable carryover stocks;
                    ``(C) the quantity of sugar that will be available 
                from carry-in stocks for human consumption in the United 
                States during the crop year;
                    ``(D) the quantity of sugar that will be available 
                from the domestic processing of sugarcane, sugar beets, 
                and in-process beet sugar; and
                    ``(E) the quantity of sugars, syrups, and molasses 
                that will be imported for human consumption or to be 
                used for the extraction of sugar for human consumption 
                in the United States during the crop year, whether the 
                articles are under a tariff-rate quota or are in excess 
                or outside of a tariff-rate quota.
            ``(2) Exclusion.--The estimates under this subsection shall 
        not apply to sugar imported for the production of polyhydric 
        alcohol or to any sugar refined and reexported in refined form 
        or in products containing sugar.
            ``(3) Reestimates.--The Secretary shall make reestimates of 
        sugar consumption, stocks, production, and imports for a crop 
        year as necessary, but not later than the beginning of each of 
        the second through fourth quarters of the crop year.

    ``(b) Sugar Allotments.--
            ``(1) Establishment.--By the beginning of each crop year, 
        the Secretary shall establish for that crop year appropriate 
        allotments under section 359c for the marketing by processors of 
        sugar processed from sugar cane or sugar beets or in-process 
        beet sugar (whether the sugar beets or in-process beet sugar was 
        produced domestically or imported) at a level that is--
                    ``(A) sufficient to maintain raw and refined sugar 
                prices above forfeiture levels so that there will be no 
                forfeitures of sugar to the Commodity Credit Corporation 
                under the loan program for sugar established under 
                section 156 of the Federal Agriculture Improvement and 
                Reform Act of 1996 (7 U.S.C. 7272); but
                    ``(B) not less than 85 percent of the estimated 
                quantity of sugar for domestic human consumption for the 
                crop year.
            ``(2) Products.--The Secretary may include sugar products, 
        the majority content of which is sucrose for human consumption, 
        derived from sugar cane, sugar beets, molasses, or sugar in the 
        allotments established under paragraph (1) if the Secretary 
        determines it to be appropriate for purposes of this part.

    ``(c) Coverage of Allotments.--

[[Page 122 STAT. 983]]

            ``(1) In general.--The <<NOTE: Applicability.>> marketing 
        allotments under this part shall apply to the marketing by 
        processors of sugar intended for domestic human consumption that 
        has been processed from sugar cane, sugar beets, or in-process 
        beet sugar, whether such sugar beets or in-process beet sugar 
        was produced domestically or imported.
            ``(2) Exceptions.--Consistent with the administration of 
        marketing allotments for each of the 2002 through 2007 crop 
        years, the marketing allotments shall not apply to sugar sold--
                    ``(A) to facilitate the exportation of the sugar to 
                a foreign country, except that the exports of sugar 
                shall not be eligible to receive credits under reexport 
                programs for refined sugar or sugar containing products 
                administered by the Secretary;
                    ``(B) to enable another processor to fulfill an 
                allocation established for that processor; or
                    ``(C) for uses other than domestic human 
                consumption, except for the sale of sugar for the 
                production of ethanol or other bioenergy if the 
                disposition of the sugar is administered by the 
                Secretary under section 9010 of the Farm Security and 
                Rural Investment Act of 2002.
            ``(3) Requirement.--The <<NOTE: Deadline. Reports.>> sale of 
        sugar described in paragraph (2)(B) shall be--
                    ``(A) made prior to May 1; and
                    ``(B) reported to the Secretary.

    ``(d) Prohibitions.--
            ``(1) In general.--During all or part of any crop year for 
        which marketing allotments have been established, no processor 
        of sugar beets or sugarcane shall market for domestic human 
        consumption a quantity of sugar in excess of the allocation 
        established for the processor, except--
                    ``(A) to enable another processor to fulfill an 
                allocation established for that other processor; or
                    ``(B) to facilitate the exportation of the sugar.
            ``(2) Civil penalty.--Any processor who knowingly violates 
        paragraph (1) shall be liable to the Commodity Credit 
        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.''.

    (c) Establishment of Flexible Marketing Allotments.--Section 359c of 
the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359cc) is amended--
            (1) by striking subsection (b) and inserting the following:

    ``(b) Overall Allotment Quantity.--
            ``(1) In general.--The Secretary shall establish the overall 
        quantity of sugar to be allotted for the crop year (referred to 
        in this part as the `overall allotment quantity') at a level 
        that is--
                    ``(A) sufficient to maintain raw and refined sugar 
                prices above forfeiture levels to avoid forfeiture of 
                sugar to the Commodity Credit Corporation; but
                    ``(B) not less than a quantity equal to 85 percent 
                of the estimated quantity of sugar for domestic human 
                consumption for the crop year.
            ``(2) Adjustment.--Subject to paragraph (1), the Secretary 
        shall adjust the overall allotment quantity to maintain--

[[Page 122 STAT. 984]]

                    ``(A) raw and refined sugar prices above forfeiture 
                levels to avoid the forfeiture of sugar to the Commodity 
                Credit Corporation; and
                    ``(B) adequate supplies of raw and refined sugar in 
                the domestic market.'';
            (2) in subsection (d)(2), by inserting ``or in-process beet 
        sugar'' before the period at the end;
            (3) in subsection (g)(1)--
                    (A) by striking ``(1) in general.--The Secretary'' 
                and inserting the following:
            ``(1) Adjustments.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary''; and
                    (B) by adding at the end the following:
                    ``(B) Limitation.--In carrying out subparagraph (A), 
                the Secretary may not reduce the overall allotment 
                quantity to a quantity of less than 85 percent of the 
                estimated quantity of sugar for domestic human 
                consumption for the crop year.''; and
            (4) by striking subsection (h).

    (d) Allocation of Marketing Allotments.--Section 359d(b) of the 
Agricultural Adjustment Act of 1938 (7 U.S.C. 1359dd(b)) is amended--
            (1) in paragraph (1)(F), by striking ``Except as otherwise 
        provided in section 359f(c)(8), if'' and inserting ``If''; and
            (2) in paragraph (2), by striking subparagraphs (G), (H), 
        and (I) and inserting the following:
                    ``(G) Sale of factories of a processor to another 
                processor.--
                          ``(i) Effect of sale.--Subject to 
                      subparagraphs (E) and (F), if 1 or more factories 
                      of a processor of beet sugar (but not all of the 
                      assets of the processor) are sold to another 
                      processor of beet sugar during a crop year, the 
                      Secretary shall assign a pro rata portion of the 
                      allocation of the seller to the allocation of the 
                      buyer to reflect the historical contribution of 
                      the production of the sold 1 or more factories to 
                      the total allocation of the seller, unless the 
                      buyer and the seller have agreed upon the transfer 
                      of a different portion of the allocation of the 
                      seller, in which case, the Secretary shall 
                      transfer that portion agreed upon by the buyer and 
                      seller.
                          ``(ii) Application of allocation.--The 
                      assignment of the allocation under clause (i) 
                      shall apply--
                                    ``(I) during the remainder of the 
                                crop year for which the sale described 
                                in clause (i) occurs; and
                                    ``(II) during each subsequent crop 
                                year.
                          ``(iii) Use of other factories to fill 
                      allocation.--If the assignment of the allocation 
                      under clause (i) to the buyer for the 1 or more 
                      purchased factories cannot be filled by the 
                      production of the 1 or more purchased factories, 
                      the remainder of the allocation may be filled by 
                      beet sugar produced by the buyer from other 
                      factories of the buyer.

[[Page 122 STAT. 985]]

                    ``(H) New entrants starting production, reopening, 
                or acquiring an existing factory with production 
                history.--
                          ``(i) Definition of new entrant.--
                                    ``(I) In general.--In this 
                                subparagraph, the term `new entrant' 
                                means an individual, corporation, or 
                                other entity that--
                                            ``(aa) does not have an 
                                        allocation of the beet sugar 
                                        allotment under this part;
                                            ``(bb) is not affiliated 
                                        with any other individual, 
                                        corporation, or entity that has 
                                        an allocation of beet sugar 
                                        under this part (referred to in 
                                        this clause as a `third party'); 
                                        and
                                            ``(cc) will process sugar 
                                        beets produced by sugar beet 
                                        growers under contract with the 
                                        new entrant for the production 
                                        of sugar at the new or re-opened 
                                        factory that is the basis for 
                                        the new entrant allocation.
                                    ``(II) Affiliation.--For purposes of 
                                subclause (I)(bb), a new entrant and a 
                                third party shall be considered to be 
                                affiliated if--
                                            ``(aa) the third party has 
                                        an ownership interest in the new 
                                        entrant;
                                            ``(bb) the new entrant and 
                                        the third party have owners in 
                                        common;
                                            ``(cc) the third party has 
                                        the ability to exercise control 
                                        over the new entrant by 
                                        organizational rights, 
                                        contractual rights, or any other 
                                        means;
                                            ``(dd) the third party has a 
                                        contractual relationship with 
                                        the new entrant by which the new 
                                        entrant will make use of the 
                                        facilities or assets of the 
                                        third party; or
                                            ``(ee) there are any other 
                                        similar circumstances by which 
                                        the Secretary determines that 
                                        the new entrant and the third 
                                        party are affiliated.
                          ``(ii) Allocation for a new entrant that has 
                      constructed a new factory or reopened a factory 
                      that was not operated since before 1998.--If a new 
                      entrant constructs a new sugar beet processing 
                      factory, or acquires and reopens a sugar beet 
                      processing factory that last processed sugar beets 
                      prior to the 1998 crop year and there is no 
                      allocation currently associated with the factory, 
                      the Secretary shall--
                                    ``(I) assign an allocation for beet 
                                sugar to the new entrant that provides a 
                                fair and equitable distribution of the 
                                allocations for beet sugar so as to 
                                enable the new entrant to achieve a 
                                factory utilization rate comparable to 
                                the factory utilization rates of other 
                                similarly-situated processors; and
                                    ``(II) reduce the allocations for 
                                beet sugar of all other processors on a 
                                pro rata basis to reflect the allocation 
                                to the new entrant.

[[Page 122 STAT. 986]]

                          ``(iii) Allocation for a new entrant that has 
                      acquired an existing factory with a production 
                      history.--
                                    ``(I) In general.--If a new entrant 
                                acquires an existing factory that has 
                                processed sugar beets from the 1998 or 
                                subsequent crop year and has a 
                                production history, on the mutual 
                                agreement of the new entrant and the 
                                company currently holding the allocation 
                                associated with the factory, the 
                                Secretary shall transfer to the new 
                                entrant a portion of the allocation of 
                                the current allocation holder to reflect 
                                the historical contribution of the 
                                production of the 1 or more sold 
                                factories to the total allocation of the 
                                current allocation holder, unless the 
                                new entrant and current allocation 
                                holder have agreed upon the transfer of 
                                a different portion of the allocation of 
                                the current allocation holder, in which 
                                case, the Secretary shall transfer that 
                                portion agreed upon by the new entrant 
                                and the current allocation holder.
                                    ``(II) Prohibition.--In the absence 
                                of a mutual agreement described in 
                                subclause (I), the new entrant shall be 
                                ineligible for a beet sugar allocation.
                          ``(iv) Appeals.--Any decision made under this 
                      subsection may be appealed to the Secretary in 
                      accordance with section 359i.''.

    (e) Reassignment of Deficits.--Section 359e(b) of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1359ee(b)) is amended in paragraphs 
(1)(D) and (2)(C), by inserting ``of raw cane sugar'' after ``imports'' 
each place it appears.
    (f) Provisions Applicable to Producers.--Section 359f(c) of the 
Agricultural Adjustment Act of 1938 (7 U.S.C. 1359ff(c)) is amended--
            (1) by striking paragraph (8);
            (2) by redesignating paragraphs (1) through (7) as 
        paragraphs (2) through (8), respectively;
            (3) by inserting before paragraph (2) (as so redesignated) 
        the following:
            ``(1) Definition of seed.--
                    ``(A) In general.--In this subsection, the term 
                `seed' means only those varieties of seed that are 
                dedicated to the production of sugarcane from which is 
                produced sugar for human consumption.
                    ``(B) Exclusion.--The term `seed' does not include 
                seed of a high-fiber cane variety dedicated to other 
                uses, as determined by the Secretary'';
            (4) in paragraph (3) (as so redesignated)--
                    (A) in the first sentence--
                          (i) by striking ``paragraph (1)'' and 
                      inserting ``paragraph (2)''; and
                          (ii) by inserting ``sugar produced from'' 
                      after ``quantity of''; and
                    (B) in the second sentence, by striking ``paragraph 
                (7)'' and inserting ``paragraph (8)'';

[[Page 122 STAT. 987]]

            (5) in the first sentence of paragraph (6)(C) (as so 
        redesignated), by inserting ``for sugar'' before ``in excess of 
        the farm's proportionate share''; and
            (6) in paragraph (8) (as so redesignated), by inserting 
        ``sugar from'' after ``the amount of''.

    (g) Special Rules.--Section 359g of the Agricultural Adjustment Act 
of 1938 (7 U.S.C. 1359gg) is amended--
            (1) by striking subsection (a) and inserting the following:

    ``(a) Transfer of Acreage Base History.--
            ``(1) Transfer authorized.--For the purpose of 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.
            ``(2) Converted acreage base.--
                    ``(A) In general.--Sugarcane acreage base 
                established under section 359f(c) that has been or is 
                converted to nonagricultural use on or after May 13, 
                2002, may be transferred to other land suitable for the 
                production of sugarcane that can be delivered to a 
                processor in a proportionate share State in accordance 
                with this paragraph.
                    ``(B) Notification.--Not <<NOTE: Deadline.>> later 
                than 90 days after the Secretary becomes aware of a 
                conversion of any sugarcane acreage base to a 
                nonagricultural use, the Secretary shall notify the 1 or 
                more affected landowners of the transferability of the 
                applicable sugarcane acreage base.
                    ``(C) Initial transfer period.--The owner of the 
                base attributable to the acreage at the time of the 
                conversion shall be afforded 90 days from the date of 
                the receipt of the notification under subparagraph (B) 
                to transfer the base to 1 or more farms owned by the 
                owner.
                    ``(D) Grower of record.--If 
                a <<NOTE: Notification. Time period.>> transfer under 
                subparagraph (C) cannot be accomplished during the 
                period specified in that subparagraph, the grower of 
                record with regard to the acreage base on the date on 
                which the acreage was converted to nonagricultural use 
                shall--
                          ``(i) be notified; and
                          ``(ii) have 90 days from the date of the 
                      receipt of the notification to transfer the base 
                      to 1 or more farms operated by the grower.
                    ``(E) Pool distribution.--
                          ``(i) In general.--If transfers under 
                      subparagraphs (B) and (C) cannot be accomplished 
                      during the periods specified in those 
                      subparagraphs, the county committee of the Farm 
                      Service Agency for the applicable county shall 
                      place the acreage base in a pool for possible 
                      assignment to other farms.
                          ``(ii) Acceptance of requests.--After 
                      providing reasonable notice to farm owners, 
                      operators, and growers of record in the county, 
                      the county committee shall accept requests from 
                      owners, operators, and growers of record in the 
                      county.
                          ``(iii) Assignment.--The county committee 
                      shall assign the acreage base to other farms in 
                      the county that are eligible and capable of 
                      accepting the acreage

[[Page 122 STAT. 988]]

                      base, based on a random drawing from among the 
                      requests received under clause (ii).
                    ``(F) Statewide reallocation.--
                          ``(i) In general.--Any acreage base remaining 
                      unassigned after the transfers and processes 
                      described in subparagraphs (A) through (E) shall 
                      be made available to the State committee of the 
                      Farm Service Agency for allocation among the 
                      remaining county committees in the State 
                      representing counties with farms eligible for 
                      assignment of the base, based on a random drawing.
                          ``(ii) Allocation.--Any county committee 
                      receiving acreage base under this subparagraph 
                      shall allocate the acreage base to eligible farms 
                      using the process described in subparagraph (E).
                    ``(G) Status of reassigned base.--After acreage base 
                has been reassigned in accordance with this 
                subparagraph, the acreage base shall--
                          ``(i) remain on the farm; and
                          ``(ii) be subject to the transfer provisions 
                      of paragraph (1).''; and
            (2) in subsection (d)--
                    (A) in paragraph (1)--
                          (i) by inserting ``affected'' before ``crop-
                      share owners'' each place it appears; and
                          (ii) by striking ``, and from the processing 
                      company holding the applicable allocation for such 
                      shares,''; and
                    (B) in paragraph (2), by striking ``based on'' and 
                all that follows through the end of subparagraph (B) and 
                inserting ``based on--
                    ``(A) the number of acres of sugarcane base being 
                transferred; and
                    ``(B) the pro rata amount of allocation at the 
                processing company holding the applicable allocation 
                that equals the contribution of the grower to allocation 
                of the processing company for the sugarcane acreage base 
                being transferred.''.

    (h) Appeals.--Section 359i of the Agricultural Adjustment Act of 
1938 (7 U.S.C. 1359ii) is amended--
            (1) in subsection (a), by inserting ``or 359g(d)'' after 
        ``359f''; and
            (2) by striking subsection (c).

    (i) Reallocating Sugar Quota Import Shortfalls.--Section 359k of the 
Agricultural Adjustment Act of 1938 (7 U.S.C. 1359kk) is repealed.
    (j) Administration of Tariff Rate Quotas.--Part VII of subtitle B of 
title III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359aa) 
(as amended by subsection (i)) is amended by adding at the end the 
following:
``SEC. 359k. <<NOTE: 7 USC 1359kk.>> ADMINISTRATION OF TARIFF RATE 
                          QUOTAS.

    ``(a) Establishment.--
            ``(1) In general.--Except as provided in paragraph (2) and 
        notwithstanding any other provision of law, at the beginning of 
        the quota year, the Secretary shall establish the tariff-rate 
        quotas for raw cane sugar and refined sugars at the minimum 
        level necessary to comply with obligations under

[[Page 122 STAT. 989]]

        international trade agreements that have been approved by 
        Congress.
            ``(2) Exception.--Paragraph (1) shall not apply to specialty 
        sugar.

    ``(b) Adjustment.--
            ``(1) Before april 1.--Before <<NOTE: Deadline.>> April 1 of 
        each fiscal year, if there is an emergency shortage of sugar in 
        the United States market that is caused by a war, flood, 
        hurricane, or other natural disaster, or other similar event as 
        determined by the Secretary--
                    ``(A) the Secretary shall take action to increase 
                the supply of sugar in accordance with sections 
                359c(b)(2) and 359e(b), including an increase in the 
                tariff-rate quota for raw cane sugar to accommodate the 
                reassignment to imports; and
                    ``(B) if there is still a shortage of sugar in the 
                United States market, and marketing of domestic sugar 
                has been maximized, and domestic raw cane sugar refining 
                capacity has been maximized, the Secretary may increase 
                the tariff-rate quota for refined sugars sufficient to 
                accommodate the supply increase, if the further increase 
                will not threaten to result in the forfeiture of sugar 
                pledged as collateral for a loan under section 156 of 
                the Federal Agriculture Improvement and Reform Act of 
                1996 (7 U.S.C. 7272).
            ``(2) On or after april 1.--On or <<NOTE: Deadline.>> after 
        April 1 of each fiscal year--
                    ``(A) the Secretary may take action to increase the 
                supply of sugar in accordance with sections 359c(b)(2) 
                and 359e(b), including an increase in the tariff-rate 
                quota for raw cane sugar to accommodate the reassignment 
                to imports; and
                    ``(B) if there is still a shortage of sugar in the 
                United States market, and marketing of domestic sugar 
                has been maximized, the Secretary may increase the 
                tariff-rate quota for raw cane sugar if the further 
                increase will not threaten to result in the forfeiture 
                of sugar pledged as collateral for a loan under section 
                156 of the Federal Agriculture Improvement and Reform 
                Act of 1996 (7 U.S.C. 7272).''.

    (k) Period of Effectiveness.--Part VII of subtitle B of title III of 
the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359aa) (as amended by 
subsection (j)) is amended by adding at the end the following:
``SEC. 359l. <<NOTE: 7 USC 1359ll.>> PERIOD OF EFFECTIVENESS.

    ``(a) In General.--This part shall be effective only for the 2008 
through 2012 crop years for sugar.
    ``(b) Transition.--The Secretary shall administer flexible marketing 
allotments for sugar for the 2007 crop year for sugar on the terms and 
conditions provided in this part as in effect on the day before the date 
of enactment of this section.''.
SEC. 1404. STORAGE FACILITY LOANS.

    Section 1402(c) of the Farm Security and Rural Investment Act of 
2002 (7 U.S.C. 7971(c)) is amended--
            (1) in paragraph (1), by striking ``and'' at the end;
            (2) by redesignating paragraph (2) as paragraph (3);
            (3) by inserting after paragraph (1) the following:
            ``(2) not include any penalty for prepayment; and''; and

[[Page 122 STAT. 990]]

            (4) in paragraph (3) (as redesignated by paragraph (2)), by 
        inserting ``other'' after ``on such''.
SEC. 1405. COMMODITY CREDIT CORPORATION STORAGE PAYMENTS.

    Subtitle E of the Federal Agriculture Improvement and Reform Act of 
1996 (7 U.S.C. 7281 et seq.) is amended by adding at the end the 
following:
``SEC. 167. <<NOTE: 7 USC 7287.>> COMMODITY CREDIT CORPORATION 
                        STORAGE PAYMENTS.

    ``(a) Initial Crop Years.--Notwithstanding any other provision of 
law, for each of the 2008 through 2011 crop years, the Commodity Credit 
Corporation shall establish rates for the storage of forfeited sugar in 
an amount that is not less than--
            ``(1) in the case of refined sugar, 15 cents per 
        hundredweight of refined sugar per month; and
            ``(2) in the case of raw cane sugar, 10 cents per 
        hundredweight of raw cane sugar per month.

    ``(b) Subsequent Crop Years.--For each of the 2012 and subsequent 
crop years, the Commodity Credit Corporation shall establish rates for 
the storage of forfeited sugar in the same manner as was used on the day 
before the date of enactment of this section.''.

                            Subtitle E--Dairy

SEC. 1501. <<NOTE: 7 USC 8771.>> DAIRY PRODUCT PRICE SUPPORT 
                          PROGRAM.

    (a) Definition of Net Removals.--In this section, the term ``net 
removals'' means--
            (1) the sum of--
                    (A) the quantity of a product described in 
                subsection (b) purchased by the Commodity Credit 
                Corporation under this section; and
                    (B) the quantity of the product exported under 
                section 153 of the Food Security Act of 1985 (15 U.S.C. 
                713a-14); less
            (2) the quantity of the product sold for unrestricted use by 
        the Commodity Credit Corporation.

    (b) Support Activities.--During <<NOTE: Time period.>> the period 
beginning on January 1, 2008, and ending December 31, 2012, the 
Secretary shall support the price of cheddar cheese, butter, and nonfat 
dry milk through the purchase of such products made from milk produced 
in the United States.

    (c) Purchase Price.--To carry out subsection (b) during the period 
specified in that subsection, the Secretary shall purchase--
            (1) cheddar cheese in blocks at not less than $1.13 per 
        pound;
            (2) cheddar cheese in barrels at not less than $1.10 per 
        pound;
            (3) butter at not less than $1.05 per pound; and
            (4) nonfat dry milk at not less than $0.80 per pound.

    (d) Temporary Price Adjustment to Avoid Excess Inventories.--
            (1) Adjustments authorized.--The Secretary may adjust the 
        minimum purchase prices established under subsection (c) only as 
        permitted under this subsection.
            (2) Cheese inventories in excess of 200,000,000 pounds.--If 
        net removals for a period of 12 consecutive months exceed 
        200,000,000 pounds of cheese, but do not exceed 400,000,000

[[Page 122 STAT. 991]]

        pounds, the Secretary may reduce the purchase prices under 
        paragraphs (1) and (2) of subsection (c) during the immediately 
        following month by not more than 10 cents per pound.
            (3) Cheese inventories in excess of 400,000,000 pounds.--If 
        net removals for a period of 12 consecutive months exceed 
        400,000,000 pounds of cheese, the Secretary may reduce the 
        purchase prices under paragraphs (1) and (2) of subsection (c) 
        during the immediately following month by not more than 20 cents 
        per pound.
            (4) Butter inventories in excess of 450,000,000 pounds.--If 
        net removals for a period of 12 consecutive months exceed 
        450,000,000 pounds of butter, but do not exceed 650,000,000 
        pounds, the Secretary may reduce the purchase price under 
        subsection (c)(3) during the immediately following month by not 
        more than 10 cents per pound.
            (5) Butter inventories in excess of 650,000,000 pounds.--If 
        net removals for a period of 12 consecutive months exceed 
        650,000,000 pounds of butter, the Secretary may reduce the 
        purchase price under subsection (c)(3) during the immediately 
        following month by not more than 20 cents per pound.
            (6) Nonfat dry milk inventories in excess of 600,000,000 
        pounds.--If net removals for a period of 12 consecutive months 
        exceed 600,000,000 pounds of nonfat dry milk, but do not exceed 
        800,000,000 pounds, the Secretary may reduce the purchase price 
        under subsection (c)(4) during the immediately following month 
        by not more than 5 cents per pound.
            (7) Nonfat dry milk inventories in excess of 800,000,000 
        pounds.--If net removals for a period of 12 consecutive months 
        exceed 800,000,000 pounds of nonfat dry milk, the Secretary may 
        reduce the purchase price under subsection (c)(4) during the 
        immediately following month by not more than 10 cents per pound.

    (e) Uniform Purchase Price.--The prices that the Secretary pays for 
cheese, butter, or nonfat dry milk, respectively, under subsection (b) 
shall be uniform for all regions of the United States.
    (f) Sales From Inventories.--In the case of each commodity specified 
in subsection (c) that is available for unrestricted use in the 
inventory of the Commodity Credit Corporation, the Secretary may sell 
the commodity at the market prices prevailing for that commodity at the 
time of sale, except that the sale price may not be less than 110 
percent of the minimum purchase price specified in subsection (c) for 
that commodity.
SEC. 1502. <<NOTE: 7 USC 8772.>> DAIRY FORWARD PRICING PROGRAM.

    (a) Program Required.--The Secretary shall establish a program under 
which milk producers and cooperative associations of producers are 
authorized to voluntarily enter into forward price contracts with milk 
handlers.
    (b) Minimum Milk Price Requirements.--Payments made by milk handlers 
to milk producers and cooperative associations of producers, and prices 
received by milk producers and cooperative associations, in accordance 
with the terms of a forward price contract authorized by subsection (a), 
shall be treated as satisfying--
            (1) all uniform and minimum milk price requirements of 
        subparagraphs (B) and (F) of paragraph (5) of section 8c of the 
        Agricultural Adjustment Act (7 U.S.C. 608c), reenacted

[[Page 122 STAT. 992]]

        with amendments by the Agricultural Marketing Agreement Act of 
        1937; and
            (2) the total payment requirement of subparagraph (C) of 
        that paragraph.

    (c) Milk Covered by Program.--
            (1) Covered milk.--The <<NOTE: Applicability.>> program 
        shall apply only with respect to the marketing of federally 
        regulated milk that--
                    (A) is not classified as Class I milk or otherwise 
                intended for fluid use; and
                    (B) is in the current of interstate or foreign 
                commerce or directly burdens, obstructs, or affects 
                interstate or foreign commerce in federally regulated 
                milk.
            (2) Relation to class i milk.--To assist milk handlers in 
        complying with paragraph (1)(A) without having to segregate or 
        otherwise individually track the source and disposition of milk, 
        a milk handler may allocate milk receipts from producers, 
        cooperatives, and other sources that are not subject to a 
        forward contract to satisfy the obligations of the handler with 
        regard to Class I milk usage.

    (d) Voluntary Program.--
            (1) In general.--A milk handler may not require 
        participation in a forward pricing contract as a condition of 
        the handler receiving milk from a producer or cooperative 
        association of producers.
            (2) Pricing.--A producer or cooperative association 
        described in paragraph (1) may continue to have their milk 
        priced in accordance with the minimum payment provisions of the 
        Federal milk marketing order.
            (3) Complaints.--
                    (A) In general.--The Secretary shall investigate 
                complaints made by producers or cooperative associations 
                of coercion by handlers to enter into forward contracts.
                    (B) Action.--If the Secretary finds evidence of 
                coercion, the Secretary shall take appropriate action.

    (e) Duration.--
            (1) New contracts.--No <<NOTE: Deadline.>> forward price 
        contract may be entered into under the program established under 
        this section after September 30, 2012.
            (2) Application.--No <<NOTE: Termination date.>> forward 
        contract entered into under the program may extend beyond 
        September 30, 2015.
SEC. 1503. DAIRY EXPORT INCENTIVE PROGRAM.

    (a) Extension.--Section 153(a) of the Food Security Act of 1985 (15 
U.S.C. 713a-14(a)) is amended by striking ``2007'' and inserting 
``2012''.
    (b) Compliance With Trade Agreements.--Section 153 of the Food 
Security Act of 1985 (15 U.S.C. 713a-14) is amended--
            (1) in subsection (c), by striking paragraph (3) and 
        inserting the following:
            ``(3) the maximum volume of dairy product exports allowable 
        consistent with the obligations of the United States under the 
        Uruguay Round Agreements approved under section 101 of the 
        Uruguay Round Agreements Act (19 U.S.C. 3511) is exported under 
        the program each year (minus the volume sold under section 1163 
        of this Act during that year), except to the extent that the 
        export of such a volume under the program

[[Page 122 STAT. 993]]

        would, in the judgment of the Secretary, exceed the limitations 
        on the value permitted under subsection (f); and''; and.
            (2) in subsection (f), by striking paragraph (1) and 
        inserting the following:
            ``(1) Funds and commodities.--Except as provided in 
        paragraph (2), the Commodity Credit Corporation shall in each 
        year use money and commodities for the program under this 
        section in the maximum amount consistent with the obligations of 
        the United States under the Uruguay Round Agreements approved 
        under section 101 of the Uruguay Round Agreements Act (19 U.S.C. 
        3511), minus the amount expended under section 1163 of this Act 
        during that year.''.
SEC. 1504. REVISION OF FEDERAL MARKETING ORDER AMENDMENT 
                          PROCEDURES.

    Section 8c of the Agricultural Adjustment Act (7 U.S.C. 608c), 
reenacted with amendments by the Agricultural Marketing Agreement Act of 
1937, is amended by striking subsection (17) and inserting the 
following:
            ``(17) Provisions applicable to amendments.--
                    ``(A) Applicability to amendments.--The provisions 
                of this section and section 8d applicable to orders 
                shall be applicable to amendments to orders.
                    ``(B) Supplemental rules of practice.--
                          ``(i) In general.--
                      Not <<NOTE: Deadline.>> later than 60 days after 
                      the date of enactment of this subparagraph, the 
                      Secretary shall issue, using informal rulemaking, 
                      supplemental rules of practice to define 
                      guidelines and timeframes for the rulemaking 
                      process relating to amendments to orders.
                          ``(ii) Issues.--At a minimum, the supplemental 
                      rules of practice shall establish--
                                    ``(I) proposal submission 
                                requirements;
                                    ``(II) pre-hearing information 
                                session specifications;
                                    ``(III) written testimony and data 
                                request requirements;
                                    ``(IV) public participation 
                                timeframes; and
                                    ``(V) electronic document submission 
                                standards.
                          ``(iii) Effective date.--The supplemental 
                      rules of practice shall take effect not later than 
                      120 days after the date of enactment of this 
                      subparagraph, as determined by the Secretary.
                    ``(C) Hearing <<NOTE: Deadlines.>> timeframes.--
                          ``(i) In general.--Not more than 30 days after 
                      the receipt of a proposal for an amendment hearing 
                      regarding a milk marketing order, the Secretary 
                      shall--
                                    ``(I) <<NOTE: Notice.>> issue a 
                                notice providing an action plan and 
                                expected timeframes for completion of 
                                the hearing not more than 120 days after 
                                the date of the issuance of the notice;
                                    ``(II)(aa) issue a request for 
                                additional information to be used by the 
                                Secretary in making a determination 
                                regarding the proposal; and

[[Page 122 STAT. 994]]

                                    ``(bb) if the additional information 
                                is not provided to the Secretary within 
                                the timeframe requested by the 
                                Secretary, issue a denial of the 
                                request; or
                                    ``(III) issue a denial of the 
                                request.
                          ``(ii) Requirement.--A post-hearing brief may 
                      be filed under this paragraph not later than 60 
                      days after the date of an amendment hearing 
                      regarding a milk marketing order.
                          ``(iii) Recommended decisions.--A recommended 
                      decision on a proposed amendment to an order shall 
                      be issued not later than 90 days after the 
                      deadline for the submission of post-hearing 
                      briefs.
                          ``(iv) Final decisions.--A final decision on a 
                      proposed amendment to an order shall be issued not 
                      later than 60 days after the deadline for 
                      submission of comments and exceptions to the 
                      recommended decision issued under clause (iii).
                    ``(D) Industry assessments.--If the Secretary 
                determines it is necessary to improve or expedite 
                rulemaking under this subsection, the Secretary may 
                impose an assessment on the affected industry to 
                supplement appropriated funds for the procurement of 
                service providers, such as court reporters.
                    ``(E) Use of informal rulemaking.--The Secretary may 
                use rulemaking under section 553 of title 5, United 
                States Code, to amend orders, other than provisions of 
                orders that directly affect milk prices.
                    ``(F) Avoiding duplication.--The Secretary shall not 
                be required to hold a hearing on any amendment proposed 
                to be made to a milk marketing order in response to an 
                application for a hearing on the proposed amendment if--
                          ``(i) <<NOTE: Deadline.>> the application 
                      requesting the hearing is received by the 
                      Secretary not later than 90 days after the date on 
                      which the Secretary has announced the decision on 
                      a previously proposed amendment to that order; and
                          ``(ii) the 2 proposed amendments are 
                      essentially the same, as determined by the 
                      Secretary.
                    ``(G) Monthly feed and fuel costs for make 
                allowances.--As part of any hearing to adjust make 
                allowances under marketing orders commencing prior to 
                September 30, 2012, the Secretary shall--
                          ``(i) determine the average monthly prices of 
                      feed and fuel incurred by dairy producers in the 
                      relevant marketing area;
                          ``(ii) consider the most recent monthly feed 
                      and fuel price data available; and
                          ``(iii) consider those prices in determining 
                      whether or not to adjust make allowances.''.
SEC. 1505. DAIRY INDEMNITY PROGRAM.

    Section 3 of Public Law 90-484 (7 U.S.C. 450l) is amended by 
striking ``2007'' and inserting ``2012''.
SEC. 1506. <<NOTE: 7 USC 8773.>> MILK INCOME LOSS CONTRACT 
                          PROGRAM.

    (a) Definitions.--In this section:

[[Page 122 STAT. 995]]

            (1) Class i milk.--The term ``Class I milk'' means milk 
        (including milk components) classified as Class I milk under a 
        Federal milk marketing order.
            (2) Eligible production.--The term ``eligible production'' 
        means milk produced by a producer in a participating State.
            (3) Federal milk marketing order.--The term ``Federal milk 
        marketing order'' means an order issued under section 8c of the 
        Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with 
        amendments by the Agricultural Marketing Agreement Act of 1937.
            (4) Participating state.--The term ``participating State'' 
        means each State.
            (5) Producer.--The term ``producer'' means an individual or 
        entity that directly or indirectly (as determined by the 
        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 (e);
            (2) the amount equal to--
                    (A) $16.94 per hundredweight, as adjusted under 
                subsection (d); less
                    (B) the Class I milk price per hundredweight in 
                Boston under the applicable Federal milk marketing 
                order; by
            (3)(A) for the period beginning October 1, 2007, and ending 
        September 30, 2008, 34 percent;
            (B) for the period beginning October 1, 2008, and ending 
        August 31, 2012, 45 percent; and
            (C) for the period beginning September 1, 2012, and 
        thereafter, 34 percent.

    (d) Payment Rate Adjustment for Feed Prices.--
            (1) Initial <<NOTE: Time period.>> adjustment authority.--
        During the period beginning on January 1, 2008, and ending on 
        August 31, 2012, if the National Average Dairy Feed Ration Cost 
        for a month during that period is greater than $7.35 per 
        hundredweight, the amount specified in subsection (c)(2)(A) used 
        to determine the payment rate for that month shall be increased 
        by 45 percent of the percentage by which the National Average 
        Dairy Feed Ration Cost exceeds $7.35 per hundredweight.
            (2) Subsequent adjustment authority.--For any month 
        beginning on or after September 1, 2012, if the National Average 
        Dairy Feed Ration Cost for the month is greater than $9.50 per 
        hundredweight, the amount specified in subsection (c)(2)(A) used 
        to determine the payment rate for that month shall be increased 
        by 45 percent of the percentage by which the National Average 
        Dairy Feed Ration Cost exceeds $9.50 per hundredweight.

[[Page 122 STAT. 996]]

            (3) National average dairy feed ration cost.--For each 
        month, the Secretary shall calculate a National Average Dairy 
        Feed Ration Cost per hundredweight using the same procedures 
        (adjusted to a hundredweight basis) used to calculate the feed 
        components of the estimated price of 16% Mixed Dairy Feed per 
        pound noted on page 33 of the USDA March 2008 Agricultural 
        Prices publication (including the data and factors noted in 
        footnote 4).

    (e) Payment Quantity.--
            (1) In general.--Subject to paragraph (2), the payment 
        quantity for a producer during the applicable month under this 
        section shall be equal to the quantity of eligible production 
        marketed by the producer during the month.
            (2) Limitation.--
                    (A) In general.--The <<NOTE: Time periods.>> payment 
                quantity for all producers on a single dairy operation 
                for which the producers receive payments under 
                subsection (b) shall not exceed--
                          (i) for the period beginning October 1, 2007, 
                      and ending September 30, 2008, 2,400,000 pounds;
                          (ii) for the period beginning October 1, 2008, 
                      and ending August 31, 2012, 2,985,000 pounds for 
                      each fiscal year; and
                          (iii) <<NOTE: Effective date.>> effective 
                      beginning September 1, 2012, 2,400,000 pounds per 
                      fiscal year.
                    (B) Standards.--
                For <<NOTE: Applicability.>> purposes of determining 
                whether producers are producers on separate dairy 
                operations or a single dairy operation, the Secretary 
                shall apply the same standards as were applied in 
                implementing the dairy program under section 805 of the 
                Agriculture, Rural Development, Food and Drug 
                Administration, and Related Agencies Appropriations Act, 
                2001 (as enacted into law by Public Law 106-387; 114 
                Stat. 1549A-50).
            (3) Reconstitution.--The Secretary shall ensure that a 
        producer does not reconstitute a dairy operation for the sole 
        purpose of receiving additional payments under this section.

    (f) Payments.--A <<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.

    (g) Signup.--The <<NOTE: Contracts. Time period.>> Secretary shall 
offer to enter into contracts under this section during the period 
beginning on the date that is 90 days after the date of enactment of 
this Act and ending on September 30, 2012.

    (h) Duration of Contract.--
            (1) In general.--Except as provided in paragraph (2), any 
        contract entered into by producers on a dairy farm under this 
        section shall cover eligible production marketed by the 
        producers on the dairy farm during the period starting with the 
        first day of month the producers on the dairy farm enter into 
        the contract and ending on September 30, 2012.
            (2) Violations.--If a producer violates the contract, the 
        Secretary may--
                    (A) terminate the contract and allow the producer to 
                retain any payments received under the contract; or
                    (B) allow the contract to remain in effect and 
                require the producer to repay a portion of the payments 
                received under the contract based on the severity of the 
                violation.

[[Page 122 STAT. 997]]

SEC. 1507. DAIRY PROMOTION AND RESEARCH PROGRAM.

    (a) Extension of Dairy Promotion and Research Authority.--Section 
113(e)(2) of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 
4504(e)(2)) is amended by striking ``2007'' and inserting ``2012''.
    (b) Definition of United States for Promotion Program.--Section 111 
of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4502) is 
amended--
            (1) by striking subsection (l) and inserting the following:

    ``(l) the term `United States', when used in a geographical sense, 
means all of the States, the District of Columbia, and the Commonwealth 
of Puerto Rico;''; and
            (2) in subsection (m), by striking ``(as defined in 
        subsection (l))''.

    (c) Definition of United States for Research Program.--Section 130 
of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4531)) is 
amended by striking paragraph (12) and inserting the following:
            ``(12) the term `United States', when used in a geographical 
        sense, means all of the States, the District of Columbia, and 
        the Commonwealth of Puerto Rico.''.

    (d) Assessment Rate for Imported Dairy Products.--Section 113(g) of 
the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4504(g)) is 
amended by striking paragraph (3) and inserting the following:
            ``(3) Rate.--
                    ``(A) In general.--The rate of assessment for milk 
                produced in the United States prescribed by the order 
                shall be 15 cents per hundredweight of milk for 
                commercial use or the equivalent thereof, as determined 
                by the Secretary.
                    ``(B) Imported dairy products.--The rate of 
                assessment for imported dairy products prescribed by the 
                order shall be 7.5 cents per hundredweight of milk for 
                commercial use or the equivalent thereof, as determined 
                by the Secretary.''.

    (e) Time and Method of Importer Payments.--Section 113(g)(6) of the 
Dairy Production Stabilization Act of 1983 (7 U.S.C. 4504(g)(6)) is 
amended--
            (1) by striking subparagraph (B); and
            (2) by redesignating subparagraph (C) as subparagraph (B).

    (f) Refund of Assessments on Certain Imported Dairy Products.--
Section 113(g) of the Dairy Production Stabilization Act of 1983 (7 
U.S.C. 4504(g)) is amended by adding at the end the following:
            ``(7) Refund of assessments on certain imported products.--
                    ``(A) In general.--An importer shall be entitled to 
                a refund of any assessment paid under this subsection on 
                imported dairy products imported under a contract 
                entered into prior to the date of enactment of the Food, 
                Conservation, and Energy Act of 2008.
                    ``(B) Expiration.--Refunds under subparagraph (A) 
                shall expire 1 year after the date of enactment of the 
                Food, Conservation, and Energy Act of 2008.''.

[[Page 122 STAT. 998]]

SEC. 1508. REPORT ON DEPARTMENT OF AGRICULTURE REPORTING 
                          PROCEDURES FOR NONFAT DRY MILK.

    Not later than 90 days after the date of enactment of this Act, the 
Secretary shall submit to the Committee on Agriculture of the House of 
Representatives and the Committee on Agriculture, Nutrition, and 
Forestry of the Senate a report regarding Department of Agriculture 
reporting procedures for nonfat dry milk and the impact of the 
procedures on Federal milk marketing order minimum prices during the 
period beginning on July 1, 2006, and ending on the date of enactment of 
this Act.
SEC. 1509. FEDERAL MILK MARKETING ORDER REVIEW COMMISSION.

    (a) Establishment.--Subject to the availability of appropriations to 
carry out this section, the Secretary shall establish a commission to be 
known as the ``Federal Milk Marketing Order Review Commission'' 
(referred to in this section as the ``commission''), which shall conduct 
a comprehensive review and evaluation of--
            (1) the Federal milk marketing order system in effect on the 
        date of establishment of the commission; and
            (2) non-Federal milk marketing order systems.

    (b) Elements of Review and Evaluation.--As part of the review and 
evaluation under subsection (a), the commission shall consider 
legislative and regulatory options for--
            (1) ensuring that the competitiveness of dairy products with 
        other competing products in the marketplace is preserved and 
        enhanced;
            (2) enhancing the competitiveness of American dairy 
        producers in world markets;
            (3) ensuring the competitiveness and transparency in dairy 
        pricing;
            (4) streamlining and expediting the process by which 
        amendments to Federal milk market orders are adopted;
            (5) simplifying the Federal milk marketing order system;
            (6) evaluating whether the Federal milk marketing order 
        system serves the interests of dairy producers, consumers, and 
        dairy processors; and
            (7) evaluating the nutritional composition of milk, 
        including the potential benefits and costs of adjusting the milk 
        content standards.

    (c) Membership.--
            (1) Composition.--The commission shall consist of 14 
        members.
            (2) Members.--As soon as practicable after the date on which 
        funds are first made available to carry out this section, the 
        Secretary shall appoint members to the commission according to 
        the following requirements:
                    (A) At least 1 member shall represent a national 
                consumer organization.
                    (B) At least 4 members shall represent land-grant 
                universities or NLGCA Institutions (as defined in 
                section 1404 of the National Agricultural Research, 
                Extension, and Teaching Policy Act of 1977 (7 U.S.C. 
                3103)) with accredited dairy economic programs, with at 
                least 2 of those members being experts in the field of 
                economics.
                    (C) At least 1 member shall represent the food and 
                beverage retail sector.

[[Page 122 STAT. 999]]

                    (D) 4 dairy producers and 4 dairy processors, 
                appointed so as to balance geographical distribution of 
                milk production and dairy processing, reflect all 
                segments of dairy processing, and represent all regions 
                of the United States equitably, including States that 
                operate outside of a Federal milk marketing order.
            (3) Chair.--The commission shall elect 1 of the appointed 
        members of the commission to serve as chairperson for the 
        duration of the proceedings of the commission.
            (4) Vacancy.--Any vacancy occurring before the termination 
        of the commission shall be filled in the same manner as the 
        original appointment.
            (5) Compensation.--Members of the commission shall serve 
        without compensation, but shall be reimbursed by the Secretary 
        from existing budget authority for necessary and reasonable 
        expenses incurred in the performance of the duties of the 
        commission.

    (d) Report.--
            (1) In general.--Not later than 2 years after the date of 
        the first meeting of the commission, the commission shall submit 
        to Congress and the Secretary a report describing the results of 
        the review and evaluation conducted under this section, 
        including such recommendations regarding the legislative and 
        regulatory options considered under subsection (b) as the 
        commission considers to be appropriate.
            (2) Opinions.--The report findings shall reflect, to the 
        maximum extent practicable, a consensus opinion of the 
        commission members, but the report may include majority and 
        minority findings regarding those matters for which consensus 
        was not reached.

    (e) Advisory Nature.--The commission is wholly advisory in nature, 
and the recommendations of the commission are nonbinding.
    (f) No Effect on Existing Programs.--The Secretary shall not allow 
the existence of the commission to impede, delay, or otherwise affect 
any decisionmaking process of the Department of Agriculture, including 
any rulemaking procedures planned, proposed, or near completion.
    (g) Administrative Assistance.--The Secretary shall provide 
administrative support to the commission, and expend to carry out this 
section such funds as necessary from budget authority available to the 
Secretary.
    (h) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.
    (i) Termination.--The commission shall terminate effective on the 
date of the submission of the report under subsection (d).
SEC. 1510. MANDATORY REPORTING OF DAIRY COMMODITIES.

    (a) Electronic Reporting.--Section 273 of the Agricultural Marketing 
Act of 1946 (7 U.S.C. 1637b) is amended--
            (1) by redesignating subsection (d) as subsection (e); and
            (2) by inserting after subsection (c) the following:

    ``(d) Electronic Reporting.--
            ``(1) In general.--Subject to the availability of funds 
        under paragraph (3), the Secretary shall establish an electronic 
        reporting system to carry out this section.

[[Page 122 STAT. 1000]]

            ``(2) Frequency of reports.--After the establishment of the 
        electronic reporting system in accordance with paragraph (1), 
        the Secretary shall increase the frequency of the reports 
        required under this section.
            ``(3) Authorization of appropriations.--There are authorized 
        to be appropriated such sums as are necessary to carry out this 
        subsection.''.

    (b) Quarterly Audits.--Section 273(c) of the Agricultural Marketing 
Act of 1946 (7 U.S.C. 1637b(c)) is amended by striking paragraph (3) and 
inserting the following:
            ``(3) Verification.--
                    ``(A) In general.--The Secretary shall take such 
                actions as the Secretary considers necessary to verify 
                the accuracy of the information submitted or reported 
                under this subtitle.
                    ``(B) Quarterly audits.--The Secretary shall 
                quarterly conduct an audit of information submitted or 
                reported under this subtitle and compare such 
                information with other related dairy market 
                statistics.''.

                       Subtitle F--Administration

SEC. 1601. <<NOTE: 7 USC 8781.>> ADMINISTRATION GENERALLY.

    (a) Use of Commodity Credit Corporation.--Except as otherwise 
provided in this title, 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.--Except as <<NOTE: Deadline.>> otherwise 
        provided in this subsection, not later than 90 days after the 
        date of enactment of this Act, the Secretary and the Commodity 
        Credit Corporation, as appropriate, shall promulgate such 
        regulations as are necessary to implement this title and the 
        amendments made by this title.
            (2) Procedure.--The promulgation of the regulations and 
        administration of this title and the amendments made by this 
        title shall be made without regard to--
                    (A) chapter 35 of title 44, United States Code 
                (commonly known as the ``Paperwork Reduction Act'');
                    (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.
            (4) Interim regulations.--Notwithstanding paragraphs (1) and 
        (2), the Secretary shall implement the amendments made by 
        sections 1603 and 1604 for the 2009 crop, fiscal, or program 
        year, as appropriate, through the promulgation of an interim 
        rule.

[[Page 122 STAT. 1001]]

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

    (e) Treatment of Advance Payment Option.--Section 1601(d) of the 
Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7991(d)) is 
amended--
            (1) in paragraph (1), by striking ``and'' at the end;
            (2) in paragraph (2), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(3) the advance payment of direct payments and counter-
        cyclical payments under title I of the Food, Conservation, and 
        Energy Act of 2008.''.
SEC. 1602. <<NOTE: Time period. 7 USC 8782.>> SUSPENSION OF 
                          PERMANENT PRICE SUPPORT AUTHORITY.

    (a) Agricultural Adjustment Act of 1938.--The following provisions 
of the Agricultural Adjustment Act of 1938 shall not be applicable to 
the 2008 through 2012 crops of covered 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, 2012:
            (1) Parts II through V of subtitle B of title III (7 U.S.C. 
        1326 et seq.).
            (2) In the case of upland cotton, section 377 (7 U.S.C. 
        1377).
            (3) Subtitle D of title III (7 U.S.C. 1379a et seq.).
            (4) Title IV (7 U.S.C. 1401 et seq.).

    (b) Agricultural Act of 1949.--The following provisions of the 
Agricultural Act of 1949 shall not be applicable to the 2008 through 
2012 crops of covered commodities, peanuts, and sugar and shall not be 
applicable to milk during the period beginning on the date of enactment 
of this Act and through December 31, 2012:
            (1) Section 101 (7 U.S.C. 1441).
            (2) Section 103(a) (7 U.S.C. 1444(a)).
            (3) Section 105 (7 U.S.C. 1444b).
            (4) Section 107 (7 U.S.C. 1445a).
            (5) Section 110 (7 U.S.C. 1445e).
            (6) Section 112 (7 U.S.C. 1445g).
            (7) Section 115 (7 U.S.C. 1445k).
            (8) Section 201 (7 U.S.C. 1446).
            (9) Title III (7 U.S.C. 1447 et seq.).

[[Page 122 STAT. 1002]]

            (10) Title IV (7 U.S.C. 1421 et seq.), other than sections 
        404, 412, and 416 (7 U.S.C. 1424, 1429, and 1431).
            (11) Title V (7 U.S.C. 1461 et seq.).
            (12) Title VI (7 U.S.C. 1471 et seq.).

    (c) Suspension of Certain Quota Provisions.--The joint 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 2008 
through 2012.
SEC. 1603. PAYMENT LIMITATIONS.

    (a) Extension of Limitations.--Sections 1001 and 1001C(a) of the 
Food Security Act of 1985 (7 U.S.C. 1308, 1308-3(a)) are amended by 
striking ``Farm Security and Rural Investment Act of 2002'' each place 
it appears and inserting ``Food, Conservation, and Energy Act of 2008''.
    (b) Revision of Limitations.--
            (1) Definitions.--Section 1001(a) of the Food Security Act 
        of 1985 (7 U.S.C. 1308(a)) is amended--
                    (A) in the matter preceding paragraph (1), by 
                inserting ``through section 1001F''after ``section'';
                    (B) by striking paragraph (2) and redesignating 
                paragraph (3) as paragraph (5); and
                    (C) by inserting after paragraph (1) the following:
            ``(2) Family member.--The term `family member' means a 
        person to whom a member in the farming operation is related as 
        lineal ancestor, lineal descendant, sibling, spouse, or 
        otherwise by marriage.
            ``(3) Legal entity.--The term `legal entity' means an entity 
        that is created under Federal or State law and that--
                    ``(A) owns land or an agricultural commodity; or
                    ``(B) produces an agricultural commodity.
            ``(4) Person.--The term `person' means a natural person, and 
        does not include a legal entity.''.
            (2) Limitation on direct payments and counter-cyclical 
        payments.--Section 1001 of the Food Security Act of 1985 (7 
        U.S.C. 1308) is amended by striking subsections (b), (c), and 
        (d) and inserting the following:

    ``(b) Limitation on Direct Payments, Counter-Cyclical Payments, and 
ACRE Payments for Covered Commodities (other Than Peanuts).--
            ``(1) Direct payments.--The total amount of direct payments 
        received, directly or indirectly, by a person or legal entity 
        (except a joint venture or a general partnership) for any crop 
        year under subtitle A of title I of the Food, Conservation, and 
        Energy Act of 2008 for 1 or more covered commodities (except for 
        peanuts) may not exceed--
                    ``(A) in the case of a person or legal entity that 
                does not participate in the average crop revenue 
                election program under section 1105 of that Act, 
                $40,000; or
                    ``(B) in the case of a person or legal entity that 
                participates in the average crop revenue election 
                program under section 1105 of that Act, an amount equal 
                to--
                          ``(i) the payment limit specified in 
                      subparagraph (A); less

[[Page 122 STAT. 1003]]

                          ``(ii) the amount of the reduction in direct 
                      payments under section 1105(a)(1) of that Act.
            ``(2) Counter-cyclical payments.--In the case of a person or 
        legal entity (except a joint venture or a general partnership) 
        that does not participate in the average crop revenue election 
        program under section 1105 of the Food, Conservation, and Energy 
        Act of 2008, the total amount of counter-cyclical payments 
        received, directly or indirectly, by the person or legal entity 
        for any crop year under subtitle A of title I of that Act for 1 
        or more covered commodities (except for peanuts) may not exceed 
        $65,000.
            ``(3) ACRE and counter-cyclical payments.--In the case of a 
        person or legal entity (except a joint venture or a general 
        partnership) that participates in the average crop revenue 
        election program under section 1105 of the Food, Conservation, 
        and Energy Act of 2008, the total amount of average crop revenue 
        election payments and counter-cyclical payments received, 
        directly or indirectly, by the person or legal entity for any 
        crop year for 1 or more covered commodities (except for peanuts) 
        may not exceed the sum of--
                    ``(A) $65,000; and
                    ``(B) the amount by which the direct payment 
                limitation is reduced under paragraph (1)(B).

    ``(c) Limitation on Direct Payments, Counter-Cyclical Payments, and 
ACRE Payments for Peanuts.--
            ``(1) Direct payments.--The total amount of direct payments 
        received, directly or indirectly, by a person or legal entity 
        (except a joint venture or a general partnership) for any crop 
        year under subtitle C of title I of the Food, Conservation, and 
        Energy Act of 2008 for peanuts may not exceed--
                    ``(A) in the case of a person or legal entity that 
                does not participate in the average crop revenue 
                election program under section 1105 of that Act, 
                $40,000; or
                    ``(B) in the case of a person or legal entity that 
                participates in the average crop revenue election 
                program under section 1105 of that Act, an amount equal 
                to--
                          ``(i) the payment limit specified in 
                      subparagraph (A); less
                          ``(ii) the amount of the reduction in direct 
                      payments under section 1105(a)(1) of that Act.
            ``(2) Counter-cyclical payments.--In the case of a person or 
        legal entity (except a joint venture or a general partnership) 
        that does not participate in the average crop revenue election 
        program under section 1105 of the Food, Conservation, and Energy 
        Act of 2008, the total amount of counter-cyclical payments 
        received, directly or indirectly, by the person or legal entity 
        for any crop year under subtitle C of title I of that Act for 
        peanuts may not exceed $65,000.
            ``(3) ACRE and counter-cyclical payments.--In the case of a 
        person or legal entity (except a joint venture or a general 
        partnership) that participates in the average crop revenue 
        election program under section 1105 of the Food, Conservation, 
        and Energy Act of 2008, the total amount of average crop revenue 
        election payments received, directly or indirectly, by the 
        person or legal entity for any crop year for peanuts may not 
        exceed the sum of--
                    ``(A) $65,000; and

[[Page 122 STAT. 1004]]

                    ``(B) the amount by which the direct payment 
                limitation is reduced under paragraph (1)(B).

    ``(d) Limitation on Applicability.--Nothing in this section 
authorizes any limitation on any benefit associated with the marketing 
assistance loan program or the loan deficiency payment program under 
title I of the Food, Conservation, and Energy Act of 2008.''.
            (3) Direct attribution.--Section 1001 of the Food Security 
        Act of 1985 (7 U.S.C. 1308) is amended--
                    (A) by striking subsections (e) and (f) and 
                redesignating subsection (g) as subsection (h); and
                    (B) by inserting after subsection (d) the following:

    ``(e) Attribution of Payments.--
            ``(1) In general.--In <<NOTE: Regulations.>> implementing 
        subsections (b) and (c) and a program described in paragraphs 
        (1)(C) and (2)(B) of section 1001D(b), the Secretary shall issue 
        such regulations as are necessary to ensure that the total 
        amount of payments are attributed to a person by taking into 
        account the direct and indirect ownership interests of the 
        person in a legal entity that is eligible to receive the 
        payments.
            ``(2) Payments to a person.--Each payment made directly to a 
        person shall be combined with the pro rata interest of the 
        person in payments received by a legal entity in which the 
        person has a direct or indirect ownership interest unless the 
        payments of the legal entity have been reduced by the pro rata 
        share of the person.
            ``(3) Payments to a legal entity.--
                    ``(A) In general.--Each payment made to a legal 
                entity shall be attributed to those persons who have a 
                direct or indirect ownership interest in the legal 
                entity unless the payment to the legal entity has been 
                reduced by the pro rata share of the person.
                    ``(B) Attribution of payments.--
                          ``(i) Payment limits.--Except as provided in 
                      clause (ii), payments made to a legal entity shall 
                      not exceed the amounts specified in subsections 
                      (b) and (c).
                          ``(ii) Exception for joint ventures and 
                      general partnerships.--Payments made to a joint 
                      venture or a general partnership shall not exceed, 
                      for each payment specified in subsections (b) and 
                      (c), the amount determined by multiplying the 
                      maximum payment amount specified in subsections 
                      (b) and (c) by the number of persons and legal 
                      entities (other than joint ventures and general 
                      partnerships) that comprise the ownership of the 
                      joint venture or general partnership.
                          ``(iii) Reduction.--Payments made to a legal 
                      entity shall be reduced proportionately by an 
                      amount that represents the direct or indirect 
                      ownership in the legal entity by any person or 
                      legal entity that has otherwise exceeded the 
                      applicable maximum payment limitation.
            ``(4) 4 levels of attribution for embedded legal entities.--
                    ``(A) In general.--Attribution of payments made to 
                legal entities shall be traced through 4 levels of 
                ownership in legal entities.
                    ``(B) First level.--Any payments made to a legal 
                entity (a first-tier legal entity) that is owned in 
                whole

[[Page 122 STAT. 1005]]

                or in part by a person shall be attributed to the person 
                in an amount that represents the direct ownership in the 
                first-tier legal entity by the person.
                    ``(C) Second level.--
                          ``(i) In general.--Any payments made to a 
                      first-tier legal entity that is owned (in whole or 
                      in part) by another legal entity (a second-tier 
                      legal entity) shall be attributed to the second-
                      tier legal entity in proportion to the ownership 
                      of the second-tier legal entity in the first-tier 
                      legal entity.
                          ``(ii) Ownership by a person.--If the second-
                      tier legal entity is owned (in whole or in part) 
                      by a person, the amount of the payment made to the 
                      first-tier legal entity shall be attributed to the 
                      person in the amount that represents the indirect 
                      ownership in the first-tier legal entity by the 
                      person.
                    ``(D) Third and fourth levels.--
                          ``(i) In general.--Except as provided in 
                      clause (ii), the Secretary shall attribute 
                      payments at the third and fourth tiers of 
                      ownership in the same manner as specified in 
                      subparagraph (C).
                          ``(ii) Fourth-tier ownership.--If the fourth-
                      tier of ownership is that of a fourth-tier legal 
                      entity and not that of a person, the Secretary 
                      shall reduce the amount of the payment to be made 
                      to the first-tier legal entity in the amount that 
                      represents the indirect ownership in the first-
                      tier legal entity by the fourth-tier legal entity.

    ``(f) Special Rules.--
            ``(1) Minor children.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), payments received by a child under the 
                age of 18 shall be attributed to the parents of the 
                child.
                    ``(B) Regulations.--The Secretary shall issue 
                regulations specifying the conditions under which 
                payments received by a child under the age of 18 will 
                not be attributed to the parents of the child.
            ``(2) Marketing <<NOTE: Applicability.>> cooperatives.--
        Subsections (b) and (c) shall not apply to a cooperative 
        association of producers with respect to commodities produced by 
        the members of the association that are marketed by the 
        association on behalf of the members of the association but 
        shall apply to the producers as persons.
            ``(3) Trusts and estates.--
                    ``(A) In general.--With respect to irrevocable 
                trusts and estates, the Secretary shall administer this 
                section through section 1001F in such manner as the 
                Secretary determines will ensure the fair and equitable 
                treatment of the beneficiaries of the trusts and 
                estates.
                    ``(B) Irrevocable trust.--
                          ``(i) In general.--In order for a trust to be 
                      considered an irrevocable trust, the terms of the 
                      trust agreement shall not--
                                    ``(I) allow for modification or 
                                termination of the trust by the grantor;

[[Page 122 STAT. 1006]]

                                    ``(II) allow for the grantor to have 
                                any future, contingent, or remainder 
                                interest in the corpus of the trust; or
                                    ``(III) except as provided in clause 
                                (ii), provide for the transfer of the 
                                corpus of the trust to the remainder 
                                beneficiary in less than 20 years 
                                beginning on the date the trust is 
                                established.
                          ``(ii) Exception.--Clause (i)(III) shall not 
                      apply in a case in which the transfer is--
                                    ``(I) contingent on the remainder 
                                beneficiary achieving at least the age 
                                of majority; or
                                    ``(II) contingent on the death of 
                                the grantor or income beneficiary.
                    ``(C) Revocable trust.--For the purposes of this 
                section through section 1001F, a revocable trust shall 
                be considered to be the same person as the grantor of 
                the trust.
            ``(4) Cash rent tenants.--
                    ``(A) Definition.--In this paragraph, the term `cash 
                rent tenant' means a person or legal entity that rents 
                land--
                          ``(i) for cash; or
                          ``(ii) for a crop share guaranteed as to the 
                      amount of the commodity to be paid in rent.
                    ``(B) Restriction.--A cash rent tenant who makes a 
                significant contribution of active personal management, 
                but not of personal labor, with respect to a farming 
                operation shall be eligible to receive a payment 
                described in subsection (b) or (c) only if the tenant 
                makes a significant contribution of equipment to the 
                farming operation.
            ``(5) Federal agencies.--
                    ``(A) In general.--Notwithstanding subsection (d), a 
                Federal agency shall not be eligible to receive any 
                payment, benefit, or loan under title I of the Food, 
                Conservation, and Energy Act of 2008 or title XII of 
                this Act.
                    ``(B) Land rental.--A lessee of land owned by a 
                Federal agency may receive a payment described in 
                subsection (b), (c), or (d) if the lessee otherwise 
                meets all applicable criteria.
            ``(6) State and local governments.--
                    ``(A) In general.--Notwithstanding subsection (d), 
                except as provided in subsection (g), a State or local 
                government, or political subdivision or agency of the 
                government, shall not be eligible to receive any 
                payment, benefit, or loan under title I of the Food, 
                Conservation, and Energy Act of 2008 or title XII of 
                this Act.
                    ``(B) Tenants.--A lessee of land owned by a State or 
                local government, or political subdivision or agency of 
                the government, may receive payments described in 
                subsections (b), (c), and (d) if the lessee otherwise 
                meets all applicable criteria.
            ``(7) Changes in farming operations.--
                    ``(A) In general.--In the administration of this 
                section through section 1001F, the Secretary may not 
                approve any change in a farming operation that otherwise 
                will increase the number of persons to which the 
                limitations

[[Page 122 STAT. 1007]]

                under this section are applied unless the Secretary 
                determines that the change is bona fide and substantive.
                    ``(B) Family members.--The addition of a family 
                member to a farming operation under the criteria set out 
                in section 1001A shall be considered a bona fide and 
                substantive change in the farming operation.
            ``(8) Death of owner.--
                    ``(A) In general.--If any ownership interest in land 
                or a commodity is transferred as the result of the death 
                of a program participant, the new owner of the land or 
                commodity may, if the person is otherwise eligible to 
                participate in the applicable program, succeed to the 
                contract of the prior owner and receive payments subject 
                to this section without regard to the amount of payments 
                received by the new owner.
                    ``(B) Limitations on prior owner.--Payments made 
                under this paragraph shall not exceed the amount to 
                which the previous owner was entitled to receive under 
                the terms of the contract at the time of the death of 
                the prior owner.

    ``(g) Public Schools.--
            ``(1) In general.--Notwithstanding subsection (f)(6)(A), a 
        State or local government, or political subdivision or agency of 
        the government, shall be eligible, subject to the limitation in 
        paragraph (2), to receive a payment described in subsection (b) 
        or (c) for land owned by the State or local government, or 
        political subdivision or agency of the government, that is used 
        to maintain a public school.
            ``(2) Limitation.--
                    ``(A) In general.--For each State, the total amount 
                of payments described in subsections (b) and (c) that 
                are received collectively by the State and local 
                government and all political subdivisions or agencies of 
                those governments shall not exceed $500,000.
                    ``(B) Exception.--The limitation in subparagraph (A) 
                shall not apply to States with a population of less than 
                1,500,000.''.

    (c) Repeal of 3-Entity Rule.--Section 1001A of the Food Security Act 
of 1985 (7 U.S.C. 1308-1) is amended--
            (1) in the section heading, by striking ``prevention of 
        creation of entities to qualify as separate persons'' and 
        inserting ``notification of interests''; and
            (2) by striking subsection (a) and inserting the following:

    ``(a) Notification of Interests.--To facilitate administration of 
section 1001 and this section, each person or legal entity receiving 
payments described in subsections (b) and (c) of section 1001 as a 
separate person or legal entity shall separately provide to the 
Secretary, at such times and in such manner as prescribed by the 
Secretary--
            ``(1) the name and social security number of each person, or 
        the name and taxpayer identification number of each legal 
        entity, that holds or acquires an ownership interest in the 
        separate person or legal entity; and
            ``(2) the name and taxpayer identification number of each 
        legal entity in which the person or legal entity holds an 
        ownership interest.''.

[[Page 122 STAT. 1008]]

    (d) Amendment for Consistency.--Section 1001A of the Food Security 
Act of 1985 (7 U.S.C. 1308-1) is amended by striking subsection (b) and 
inserting the following:
    ``(b) Actively Engaged.--
            ``(1) In general.--To be eligible to receive a payment 
        described in subsection (b) or (c) of section 1001, a person or 
        legal entity shall be actively engaged in farming with respect 
        to a farming operation as provided in this subsection or 
        subsection (c).
            ``(2) Classes actively engaged.--Except as provided in 
        subsections (c) and (d)--
                    ``(A) a person (including a person participating in 
                a farming operation as a partner in a general 
                partnership, a participant in a joint venture, a grantor 
                of a revocable trust, or a participant in a similar 
                entity, as determined by the Secretary) shall be 
                considered to be actively engaged in farming with 
                respect to a farming operation if--
                          ``(i) the person makes a significant 
                      contribution (based on the total value of the 
                      farming operation) to the farming operation of--
                                    ``(I) capital, equipment, or land; 
                                and
                                    ``(II) personal labor or active 
                                personal management;
                          ``(ii) the person's share of the profits or 
                      losses from the farming operation is commensurate 
                      with the contributions of the person to the 
                      farming operation; and
                          ``(iii) the contributions of the person are at 
                      risk;
                    ``(B) a legal entity that is a corporation, joint 
                stock company, association, limited partnership, 
                charitable organization, or other similar entity 
                determined by the Secretary (including any such legal 
                entity participating in the farming operation as a 
                partner in a general partnership, a participant in a 
                joint venture, a grantor of a revocable trust, or as a 
                participant in a similar legal entity as determined by 
                the Secretary) shall be considered as actively engaged 
                in farming with respect to a farming operation if--
                          ``(i) the legal entity separately makes a 
                      significant contribution (based on the total value 
                      of the farming operation) of capital, equipment, 
                      or land;
                          ``(ii) the stockholders or members 
                      collectively make a significant contribution of 
                      personal labor or active personal management to 
                      the operation; and
                          ``(iii) the standards provided in clauses (ii) 
                      and (iii) of subparagraph (A), as applied to the 
                      legal entity, are met by the legal entity;
                    ``(C) if a legal entity that is a general 
                partnership, joint venture, or similar entity, as 
                determined by the Secretary, separately makes a 
                significant contribution (based on the total value of 
                the farming operation involved) of capital, equipment, 
                or land, and the standards provided in clauses (ii) and 
                (iii) of subparagraph (A), as applied to the legal 
                entity, are met by the legal entity, the partners or 
                members making a significant contribution of personal 
                labor or active personal management shall be considered

[[Page 122 STAT. 1009]]

                to be actively engaged in farming with respect to the 
                farming operation involved; and
                    ``(D) in making determinations under this subsection 
                regarding equipment and personal labor, the Secretary 
                shall take into consideration the equipment and personal 
                labor normally and customarily provided by farm 
                operators in the area involved to produce program crops.

    ``(c) Special Classes Actively Engaged.--
            ``(1) Landowner.--A person or legal entity that is a 
        landowner contributing the owned land to a farming operation 
        shall be considered to be actively engaged in farming with 
        respect to the farming operation if--
                    ``(A) the landowner receives rent or income for the 
                use of the land based on the production on the land or 
                the operating results of the operation; and
                    ``(B) the person or legal entity meets the standards 
                provided in clauses (ii) and (iii) of subsection 
                (b)(2)(A).
            ``(2) Adult family member.--If a majority of the 
        participants in a farming operation are family members, an adult 
        family member shall be considered to be actively engaged in 
        farming with respect to the farming operation if the person--
                    ``(A) makes a significant contribution, based on the 
                total value of the farming operation, of active personal 
                management or personal labor; and
                    ``(B) with respect to such contribution, meets the 
                standards provided in clauses (ii) and (iii) of 
                subsection (b)(2)(A).
            ``(3) Sharecropper.--A sharecropper who makes a significant 
        contribution of personal labor to a farming operation shall be 
        considered to be actively engaged in farming with respect to the 
        farming operation if the contribution meets the standards 
        provided in clauses (ii) and (iii) of subsection (b)(2)(A).
            ``(4) Growers of hybrid seed.--In determining whether a 
        person or legal entity growing hybrid seed under contract shall 
        be considered to be actively engaged in farming, the Secretary 
        shall not take into consideration the existence of a hybrid seed 
        contract.
            ``(5) Custom farming services.--
                    ``(A) In general.--A person or legal entity 
                receiving custom farming services shall be considered 
                separately eligible for payment limitation purposes if 
                the person or legal entity is actively engaged in 
                farming based on subsection (b)(2) or paragraphs (1) 
                through (4) of this subsection.
                    ``(B) Prohibition.--No other rules with respect to 
                custom farming shall apply.
            ``(6) Spouse.--If 1 spouse (or estate of a deceased spouse) 
        is determined to be actively engaged, the other spouse shall be 
        determined to have met the requirements of subsection 
        (b)(2)(A)(i)(II).

    ``(d) Classes Not Actively Engaged.--
            ``(1) Cash rent landlord.--A landlord contributing land to a 
        farming operation shall not be considered to be actively engaged 
        in farming with respect to the farming operation if the landlord 
        receives cash rent, or a crop share guaranteed as to the amount 
        of the commodity to be paid in rent, for the use of the land.

[[Page 122 STAT. 1010]]

            ``(2) Other persons and legal entities.--Any other person or 
        legal entity that the Secretary determines does not meet the 
        standards described in subsections (b)(2) and (c) shall not be 
        considered to be actively engaged in farming with respect to a 
        farming operation.''.

    (e) Denial of Program Benefits.--Section 1001B of the Food Security 
Act of 1985 (7 U.S.C. 1308-2) is amended to read as follows:
``SEC. 1001B. DENIAL OF PROGRAM BENEFITS.

    ``(a) 2-Year Denial of Program Benefits.--A person or legal entity 
shall be ineligible to receive payments specified in subsections (b) and 
(c) of section 1001 for the crop year, and the succeeding crop year, in 
which the Secretary determines that the person or legal entity--
            ``(1) failed to comply with section 1001A(b) and adopted or 
        participated in adopting a scheme or device to evade the 
        application of section 1001, 1001A, or 1001C; or
            ``(2) intentionally concealed the interest of the person or 
        legal entity in any farm or legal entity engaged in farming.

    ``(b) Extended Ineligibility.--If 
the <<NOTE: Fraud. Regulations.>> Secretary determines that a person or 
legal entity, for the benefit of the person or legal entity or the 
benefit of any other person or legal entity, has knowingly engaged in, 
or aided in the creation of a fraudulent document, failed to disclose 
material information relevant to the administration of sections 1001 
through 1001F, or committed other equally serious actions (as identified 
in regulations issued by the Secretary), the Secretary may for a period 
not to exceed 5 crop years deny the issuance of payments to the person 
or legal entity.

    ``(c) Pro Rata Denial.--
            ``(1) In general.--Payments otherwise owed to a person or 
        legal entity described in subsections (a) or (b) shall be denied 
        in a pro rata manner based on the ownership interest of the 
        person or legal entity in a farm.
            ``(2) Cash rent tenant.--Payments otherwise payable to a 
        person or legal entity shall be denied in a pro rata manner if 
        the person or legal entity is a cash rent tenant on a farm owned 
        or under the control of a person or legal entity with respect to 
        which a determination has been made under subsection (a) or (b).

    ``(d) Joint and Several Liability.--Any legal entity (including 
partnerships and joint ventures) and any member of any legal entity 
determined to have knowingly participated in a scheme or device to 
evade, or that has the purpose of evading, sections 1001, 1001A, or 
1001C shall be jointly and severally liable for any amounts that are 
payable to the Secretary as the result of the scheme or device 
(including amounts necessary to recover those amounts).
    ``(e) Release.--The Secretary may partially or fully release from 
liability any person or legal entity who cooperates with the Secretary 
in enforcing sections 1001, 1001A, and 1001C, and this section.''.
    (f) Conforming Amendment to Apply Direct Attribution to NAP.--
            (1) In general.--Section 196(i) of the Federal Agriculture 
        Improvement and Reform Act of 1996 (7 U.S.C. 7333(i)) is 
        amended--

[[Page 122 STAT. 1011]]

                    (A) by striking paragraphs (1) and (2) and inserting 
                the following:
            ``(1) Definitions.--In this subsection, the terms `legal 
        entity' and `person' have the meanings given those terms in 
        section 1001(a) of the Food Security Act of 1985 (7 U.S.C. 
        1308(a)).
            ``(2) Payment limitation.--The total amount of payments 
        received, directly or indirectly, by a person or legal entity 
        (excluding a joint venture or general partnership) for any crop 
        year may not exceed $100,000.'';
                    (B) by striking paragraph (4) and inserting the 
                following:
            ``(4) Adjusted gross income limitation.--A person or legal 
        entity that has an average adjusted gross income in excess of 
        the average adjusted gross income limitation applicable under 
        section 1001D(b)(1)(A) of the Food Security Act of 1985 (7 
        U.S.C. 1308-3a(b)(1)(A)), or a successor provision, shall not be 
        eligible to receive noninsured crop disaster assistance under 
        this section.''; and
                    (C) in paragraph (5)--
                          (i) by striking ``necessary to ensure'' and 
                      inserting ``necessary--
                    ``(A) to ensure''; and
                          (ii) by striking ``this subsection.'' and 
                      inserting the following: ``this subsection; and
                    ``(B) to ensure that payments under this section are 
                attributed to a person or legal entity (excluding a 
                joint venture or general partnership) in accordance with 
                the terms and conditions of sections 1001 through 1001D 
                of the Food Security Act of 1985 (7 U.S.C. 1308 et 
                seq.), as determined by the Secretary.''.
            (2) Transition.--Section 196(i) <<NOTE: 7 USC 7333 
        note.>> of the Federal Agriculture Improvement and Reform Act of 
        1996 (7 U.S.C. 7333(i)), as in effect on September 30, 2007, 
        shall apply with respect to the 2007 and 2008 crops of any 
        eligible crop.

    (g) Conforming Amendments.--
            (1) Section 1009(e) of the Food Security Act of 1985 (7 
        U.S.C. 1308a(e)) is amended in the second sentence by striking 
        ``of $50,000''.
            (2) Section 609(b)(1) of the Emergency Livestock Feed 
        Assistance Act of 1988 (7 U.S.C. 1471g(b)(1)) is amended by 
        inserting ``(before the amendment made by section 1703(a) of the 
        Food, Conservation, and Energy Act of 2008)'' after ``1985''.
            (3) Section 524(b)(3) of the Federal Crop Insurance Act (7 
        U.S.C. 1524(b)(3)) is amended by inserting ``(before the 
        amendment made by section 1703(a) of the Food, Conservation, and 
        Energy Act of 2008)'' after ``1308(5)))''.
            (4) Section 10204(c)(1) of the Farm Security and Rural 
        Investment Act of 2002 (7 U.S.C. 8204(c)(1)) is amended by 
        inserting ``(before the amendment made by section 1703(a) of the 
        Food, Conservation, and Energy Act of 2008)'' after ``1308)''.
            (5) Section 1271(c)(3)(A) of the Food, Agriculture, 
        Conservation, and Trade Act of 1990 (16 U.S.C. 2106a(c)(3)(A)) 
        is amended by inserting ``(before the amendment made by section 
        1703(a) of the Food, Conservation, and Energy Act of 2008)'' 
        after ``1308)''.

[[Page 122 STAT. 1012]]

            (6) Section 291(2) of the Trade Act of 1974 (19 U.S.C. 
        2401(2)) is amended by inserting ``(before the amendment made by 
        section 1703(a) of the Food, Conservation, and Energy Act of 
        2008)'' before the period at the end.

    (h) Transition.--Section <<NOTE: Applicability. 7 USC 1308 
note.>> 1001, 1001A, and 1001B of the Food Security Act of 1985 (7 
U.S.C. 1308, 1308-1, 1308-2), as in effect on September 30, 2007, shall 
continue to apply with respect to the 2007 and 2008 crops of any covered 
commodity or peanuts.
SEC. 1604. ADJUSTED GROSS INCOME LIMITATION.

    (a) In General.--Section 1001D of the Food Security Act of 1985 (7 
U.S.C. 1308-3a(e)) is amended to read as follows:
``SEC. 1001D. ADJUSTED GROSS INCOME LIMITATION.

    ``(a) Definitions.--
            ``(1) In general.--In this section:
                    ``(A) Average adjusted gross income.--The term 
                `average adjusted gross income', with respect to a 
                person or legal entity, means the average of the 
                adjusted gross income or comparable measure of the 
                person or legal entity over the 3 taxable years 
                preceding the most immediately preceding complete 
                taxable year, as determined by the Secretary.
                    ``(B) Average adjusted gross farm income.--The term 
                `average adjusted gross farm income', with respect to a 
                person or legal entity, means the average of the portion 
                of adjusted gross income of the person or legal entity 
                that is attributable to activities related to farming, 
                ranching, or forestry for the 3 taxable years described 
                in subparagraph (A), as determined by the Secretary in 
                accordance with subsection (c).
                    ``(C) Average adjusted gross nonfarm income.--The 
                term `average adjusted gross nonfarm income', with 
                respect to a person or legal entity, means the 
                difference between--
                          ``(i) the average adjusted gross income of the 
                      person or legal entity; and
                          ``(ii) the average adjusted gross farm income 
                      of the person or legal entity.
            ``(2) Special rules for certain persons and legal 
        entities.--In the case of a legal entity that is not required to 
        file a Federal income tax return or a person or legal entity 
        that did not have taxable income in 1 or more of the taxable 
        years used to determine the average under subparagraph (A) or 
        (B) of paragraph (1), the Secretary shall provide, by 
        regulation, a method for determining the average adjusted gross 
        income, the average adjusted gross farm income, and the average 
        adjusted gross nonfarm income of the person or legal entity for 
        purposes of this section.
            ``(3) Allocation of income.--On the request of any person 
        filing a joint tax return, the Secretary shall provide for the 
        allocation of average adjusted gross income, average adjusted 
        gross farm income, and average adjusted gross nonfarm income 
        among the persons filing the return if--
                    ``(A) the person provides a certified statement by a 
                certified public accountant or attorney that specifies 
                the method by which the average adjusted gross income, 
                average adjusted gross farm income, and average adjusted 
                gross

[[Page 122 STAT. 1013]]

                nonfarm income would have been declared and reported had 
                the persons filed 2 separate returns; and
                    ``(B) the Secretary determines that the method 
                described in the statement is consistent with the 
                information supporting the filed joint tax return.

    ``(b) Limitations.--
            ``(1) Commodity programs.--
                    ``(A) Nonfarm limitation.--Notwithstanding any other 
                provision of law, a person or legal entity shall not be 
                eligible to receive any benefit described in 
                subparagraph (C) during a crop, fiscal, or program year, 
                as appropriate, if the average adjusted gross nonfarm 
                income of the person or legal entity exceeds $500,000.
                    ``(B) Farm limitation.--Notwithstanding any other 
                provision of law, a person or legal entity shall not be 
                eligible to receive a direct payment under subtitle A or 
                C of title I of the Food, Conservation, and Energy Act 
                of 2008 during a crop year, if the average adjusted 
                gross farm income of the person or legal entity exceeds 
                $750,000.
                    ``(C) Covered <<NOTE: Applicability.>> benefits.--
                Subparagraph (A) applies with respect to the following:
                          ``(i) A direct payment or counter-cyclical 
                      payment under subtitle A or C of title I of the 
                      Food, Conservation, and Energy Act of 2008 or an 
                      average crop revenue election payment under 
                      subtitle A of title I of that Act.
                          ``(ii) A marketing loan gain or loan 
                      deficiency payment under subtitle B or C of title 
                      I of the Food, Conservation, and Energy Act of 
                      2008.
                          ``(iii) A payment or benefit under section 196 
                      of the Federal Agriculture Improvement and Reform 
                      Act of 1996 (7 U.S.C. 7333).
                          ``(iv) A payment or benefit under section 1506 
                      of the Food, Conservation, and Energy Act of 2008.
                          ``(v) A payment or benefit under title IX of 
                      the Trade Act of 1974 or subtitle B of the Federal 
                      Crop Insurance Act.
            ``(2) Conservation programs.--
                    ``(A) Limits.--
                          ``(i) In general.--Notwithstanding any other 
                      provision of law, except as provided in clause 
                      (ii), a person or legal entity shall not be 
                      eligible to receive any benefit described in 
                      subparagraph (B) during a crop, fiscal, or program 
                      year, as appropriate, if the average adjusted 
                      gross nonfarm income of the person or legal entity 
                      exceeds $1,000,000, unless not less than 66.66 
                      percent of the average adjusted gross income of 
                      the person or legal entity is average adjusted 
                      gross farm income.
                          ``(ii) Exception.--The <<NOTE: Waiver 
                      authority.>> Secretary may waive the limitation 
                      established under clause (i) on a case-by-case 
                      basis if the Secretary determines that 
                      environmentally sensitive land of special 
                      significance would be protected.
                    ``(B) Covered <<NOTE: Applicability.>> benefits.--
                Subparagraph (A) applies with respect to the following:

[[Page 122 STAT. 1014]]

                          ``(i) A payment or benefit under title XII of 
                      this Act.
                          ``(ii) A payment or benefit under title II of 
                      the Farm Security and Rural Investment Act of 2002 
                      (Public Law 107-171; 116 Stat. 223) or title II of 
                      the Food, Conservation, and Energy Act of 2008.
                          ``(iii) A payment or benefit under section 
                      524(b) of the Federal Crop Insurance Act (7 U.S.C. 
                      1524(b)).

    ``(c) Income Determination.--
            ``(1) In general.--In determining the average adjusted gross 
        farm income of a person or legal entity, the Secretary shall 
        include income or benefits derived from or related to--
                    ``(A) the production of crops, including specialty 
                crops (as defined in section 3 of the Specialty Crops 
                Competitiveness Act of 2004 (7 U.S.C. 1621 note; Public 
                Law 108-465)) and unfinished raw forestry products;
                    ``(B) the production of livestock (including cattle, 
                elk, reindeer, bison, horses, deer, sheep, goats, swine, 
                poultry, fish, and other aquacultural products used for 
                food, honeybees, and other animals designated by the 
                Secretary) and products produced by, or derived from, 
                livestock;
                    ``(C) the production of farm-based renewable energy 
                (as defined in section 9001 of the Farm Security and 
                Rural Investment Act of 2002 (7 U.S.C. 8101));
                    ``(D) the sale, including the sale of easements and 
                development rights, of farm, ranch, or forestry land, 
                water or hunting rights, or environmental benefits;
                    ``(E) the rental or lease of land or equipment used 
                for farming, ranching, or forestry operations, including 
                water or hunting rights;
                    ``(F) the processing (including packing), storing 
                (including shedding), and transporting of farm, ranch, 
                and forestry commodities, including renewable energy;
                    ``(G) the feeding, rearing, or finishing of 
                livestock;
                    ``(H) the sale of land that has been used for 
                agriculture;
                    ``(I) payments or other benefits received under any 
                program authorized under title I of the Farm Security 
                and Rural Investment Act of 2002 (7 U.S.C. 7901 et seq.) 
                or title I of the Food, Conservation, and Energy Act of 
                2008;
                    ``(J) payments or other benefits received under any 
                program authorized under title XII of this Act, title II 
                of the Farm Security and Rural Investment Act of 2002 
                (Public Law 107-171; 116 Stat. 223), or title II of the 
                Food, Conservation, and Energy Act of 2008;
                    ``(K) payments or other benefits received under 
                section 196 of the Federal Agriculture Improvement and 
                Reform Act of 1996 (7 U.S.C. 7333);
                    ``(L) payments or other benefits received under 
                title IX of the Trade Act of 1974 or subtitle B of the 
                Federal Crop Insurance Act;
                    ``(M) risk management practices, including benefits 
                received under a program authorized under the Federal 
                Crop Insurance Act (7 U.S.C. 1501 et seq.) (including a 
                catastrophic risk protection plan offered under section 
                508(b) of that Act (7 U.S.C. 1508(b))); and

[[Page 122 STAT. 1015]]

                    ``(N) any other activity related to farming, 
                ranching, or forestry, as determined by the Secretary.
            ``(2) Income derived from farming, ranching, or forestry.--
        In determining the average adjusted gross farm income of a 
        person or legal entity, in addition to the inclusions described 
        in paragraph (1), the Secretary shall include any income 
        reported on the Schedule F or other schedule used by the person 
        or legal entity to report income from farming, ranching, or 
        forestry operations to the Internal Revenue Service, to the 
        extent such income is not already included under paragraph (1).
            ``(3) Special rule.--If not less than 66.66 percent of the 
        average adjusted gross income of a person or legal entity is 
        derived from farming, ranching, or forestry operations described 
        in paragraphs (1) and (2), in determining the average adjusted 
        gross farm income of the person or legal entity, the Secretary 
        shall also include--
                    ``(A) the sale of equipment to conduct farm, ranch, 
                or forestry operations; and
                    ``(B) the provision of production inputs and 
                services to farmers, ranchers, foresters, and farm 
                operations.

    ``(d) Enforcement.--
            ``(1) In general.--To <<NOTE: Deadline.>> comply with 
        subsection (b), at least once every 3 years a person or legal 
        entity shall provide to the Secretary--
                    ``(A) a <<NOTE: Certification.>> certification by a 
                certified public accountant or another third party that 
                is acceptable to the Secretary that the average adjusted 
                gross income, average adjusted gross farm income, and 
                average adjusted gross nonfarm income of the person or 
                legal entity does not exceed the applicable limitation 
                specified in that subsection; or
                    ``(B) information and documentation regarding the 
                average adjusted gross income, average adjusted gross 
                farm income, and average adjusted gross nonfarm income 
                of the person or legal entity through other procedures 
                established by the Secretary.
            ``(2) Denial of program benefits.--If the Secretary 
        determines that a person or legal entity has failed to comply 
        with this section, the Secretary shall deny the issuance of 
        applicable payments and benefits specified in paragraphs (1)(C) 
        and (2)(B) of subsection (b) to the person or legal entity, 
        under similar terms and conditions as described in section 
        1001B.
            ``(3) Audit.--The <<NOTE: Procedures.>> Secretary shall 
        establish statistically valid procedures under which the 
        Secretary shall conduct targeted audits of such persons or legal 
        entities as the Secretary determines are most likely to exceed 
        the limitations under subsection (b).

    ``(e) Commensurate Reduction.--In the case of a payment or benefit 
described in paragraphs (1)(C) and (2)(B) of subsection (b) made in a 
crop, program, or fiscal year, as appropriate, to an entity, general 
partnership, or joint venture, the amount of the payment or 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 person who has an average adjusted gross income, average 
adjusted gross farm income, or average adjusted gross nonfarm income in 
excess of the applicable limitation specified in subsection (b).

[[Page 122 STAT. 1016]]

    ``(f) Effective Period.--This section shall apply only during the 
2009 through 2012 crop, program, or fiscal years, as appropriate.''.
    (b) Transition.--Section <<NOTE: Applicability. 7 USC 1308-3a 
note.>> 1001D of the Food Security Act of 1985 (7 U.S.C. 1308-3a), as in 
effect on September 30, 2007, shall apply with respect to the 2007 and 
2008 crop, fiscal, or program year, as appropriate, for each program 
described in paragraphs (1)(C) and (2)(B) of subsection (b) of that 
section (as amended by subsection (a)).
SEC. 1605. AVAILABILITY OF QUALITY INCENTIVE PAYMENTS FOR COVERED 
                          OILSEED PRODUCERS.

    (a) Incentive Payments Required.--Subject to subsection (b) and the 
availability of appropriations under subsection (h), the Secretary shall 
use funds made available under subsection (h) to provide quality 
incentive payments for the production of oilseeds with specialized 
traits that enhance human health, as determined by the Secretary.
    (b) Covered Oilseeds.--The Secretary shall make payments under this 
section only for the production of an oilseed variety that has, as 
determined by the Secretary--
            (1) been demonstrated to improve the health profile of the 
        oilseed for use in human consumption by--
                    (A) reducing or eliminating the need to partially 
                hydrogenate the oil derived from the oilseed for use in 
                human consumption; or
                    (B) adopting new technology traits; and
            (2) 1 or more impediments to commercialization.

    (c) Request for Proposals.--
            (1) Issuance.--If funds are made available to carry out this 
        section for a crop year, the Secretary shall issue a request for 
        proposals for payments under this section.
            (2) Multiyear proposals.--A proponent may submit a multiyear 
        proposal for payments under this section.
            (3) Content of proposals.--A proposal for payments under 
        this section shall include a description of--
                    (A) how use of the oilseed enhances human health;
                    (B) the impediments to commercial use of the 
                oilseed;
                    (C) each oilseed variety described in subsection (b) 
                and the value of the oilseed variety as a matter of 
                public policy;
                    (D) a range for the base price and premiums per 
                bushel or hundredweight to be paid to producers;
                    (E) a per bushel or hundredweight amount of 
                incentive payments requested for each year under this 
                section that does not exceed \1/3\ of the total premium 
                offered for any year;
                    (F) the period of time, not to exceed 4 years, 
                during which incentive payments are to be provided to 
                producers; and
                    (G) the targeted total quantity of production and 
                estimated acres needed to produce the targeted quantity 
                for each year under this section.

    (d) Contracts for Production.--
            (1) In general.--The Secretary shall approve successful 
        proposals submitted under subsection (c) on a timely basis.

[[Page 122 STAT. 1017]]

            (2) Timing of payments.--The Secretary shall make payments 
        to producers under this section after the Secretary receives 
        documentation that the premium required under a contract has 
        been paid to covered producers.

    (e) Administration.--
            (1) In general.--If funding provided for a crop year is not 
        fully allocated under the initial request for proposals under 
        subsection (c), the Secretary shall issue additional requests 
        for proposals for subsequent crop years under this section.
            (2) Prorated payments.--If funding provided for a crop year 
        is less than the amount otherwise approved by the Secretary or 
        for which approval is sought, the Secretary shall prorate the 
        payments or approvals in a manner determined by the Secretary so 
        that the total payments do not exceed the funding level.

    (f) Proprietary Information.--The Secretary shall protect 
proprietary information provided to the Secretary for the purpose of 
administering this section.
    (g) Program Compliance and Penalties.--
            (1) Guarantee.--The proponent, if approved, shall be 
        required to guarantee that the oilseed on which a payment is 
        made by the Secretary under this section is used for human 
        consumption as described in the proposal, as approved by the 
        Secretary.
            (2) Noncompliance.--If oilseeds on which a payment is made 
        by the Secretary under this section are not actually used for 
        the purpose the payment is made, the proponent shall be required 
        to pay to the Secretary an amount equal to, as determined by the 
        Secretary--
                    (A) in the case of an inadvertent failure, twice the 
                amount of the payment made by the Secretary under this 
                section to the producer of the oilseeds; and
                    (B) in any other case, up to twice the full value of 
                the oilseeds involved.
            (3) Documentation.--The Secretary may require such 
        assurances and documentation as may be needed to enforce the 
        guarantee.
            (4) Additional penalties.--
                    (A) In general.--In addition to payments required 
                under paragraph (2), the Secretary may impose penalties 
                on additional persons that use oilseeds the use of which 
                is restricted under this section for a purpose other 
                than the intended use.
                    (B) Amount.--The amount of a penalty under this 
                paragraph shall--
                          (i) be in an amount determined appropriated by 
                      the Secretary; but
                          (ii) not to exceed twice the full value of the 
                      oilseeds.

    (h) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section for 
each of fiscal years 2009 through 2012.
SEC. 1606. 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 ``and title I of the Farm 
Security and Rural Investment Act of 2002'' each place it appears and 
inserting ``title I of the Farm Security

[[Page 122 STAT. 1018]]

and Rural Investment Act of 2002, and title I of the Food, Conservation, 
and Energy Act of 2008''.
SEC. 1607. 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) by striking ``and subtitle B and C of title I of the 
        Farm Security and Rural Investment Act of 2002'' each place it 
        appears and inserting ``, title I of the Farm Security and Rural 
        Investment Act of 2002, and title I of the Food, Conservation, 
        and Energy Act of 2008''; and
            (2) in subsection (c), by adding at the end the following:
            ``(3) Termination of authority.--The authority to carry out 
        paragraph (1) terminates effective ending with the 2009 crop 
        year.''.
SEC. 1608. <<NOTE: 7 USC 8784.>> ASSIGNMENT OF PAYMENTS.

    (a) In General.--The <<NOTE: Applicability.>> 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 this title.

    (b) Notice.--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. 1609. <<NOTE: 7 USC 8785.>> TRACKING OF BENEFITS.

    As soon as practicable after the date of enactment of this Act, the 
Secretary may track the benefits provided, directly or indirectly, to 
individuals and entities under titles I and II and the amendments made 
by those titles.
SEC. 1610. GOVERNMENT PUBLICATION OF COTTON PRICE FORECASTS.

    Section 15 of the Agricultural Marketing Act (12 U.S.C. 1141j) is 
amended--
            (1) by striking subsection (d); and
            (2) by redesignating subsections (e) through (g) as 
        subsections (d) through (f), respectively.
SEC. 1611. <<NOTE: 7 USC 8786.>> PREVENTION OF DECEASED 
                          INDIVIDUALS RECEIVING PAYMENTS UNDER 
                          FARM COMMODITY PROGRAMS.

    (a) Regulations.--Not <<NOTE: Deadline.>> later than 180 days after 
the date of enactment of this Act, the Secretary shall promulgate 
regulations that--
            (1) describe the circumstances under which, in order to 
        allow for the settlement of estates and for related purposes, 
        payments may be issued in the name of a deceased individual; and
            (2) preclude the issuance of payments to, and on behalf of, 
        deceased individuals that were not eligible for the payments.

    (b) Coordination.--At least twice each year, the Secretary shall 
reconcile the social security numbers of all individuals who receive 
payments under this title, whether directly or indirectly, with the 
Social Security Administration to determine if the individuals are 
alive.

[[Page 122 STAT. 1019]]

SEC. 1612. <<NOTE: 7 USC 8787.>> HARD WHITE WHEAT DEVELOPMENT 
                          PROGRAM.

    (a) Definitions.--In this section:
            (1) Eligible hard white wheat seed.--The term ``eligible 
        hard white wheat seed'' means hard white wheat seed that, as 
        determined by the Secretary, is--
                    (A) certified;
                    (B) of a variety that is suitable for the State in 
                which the seed will be planted;
                    (C) rated at least superior with respect to quality; 
                and
                    (D) specifically approved under a seed establishment 
                program established by the State Department of 
                Agriculture and the State Wheat Commission of the 1 or 
                more States in which the seed will be planted.
            (2) Program.--The term ``program'' means the hard white 
        wheat development program established under subsection (b)(1).
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture, in consultation with the State Departments of 
        Agriculture and the State Wheat Commissions of the States in 
        regions in which hard white wheat is produced, as determined by 
        the Secretary.

    (b) Establishment.--
            (1) In general.--Subject to the availability of 
        appropriations, the Secretary shall establish a hard white wheat 
        development program in accordance with paragraph (2) to promote 
        the establishment of hard white wheat as a viable market class 
        of wheat in the United States by encouraging production of at 
        least 240,000,000 bushels of hard white wheat by 2012.
            (2) Payments.--
                    (A) In general.--Subject to subparagraphs (B) and 
                (C) and subsection (c), if funds are made available for 
                any of the 2009 through 2012 crops of hard white wheat, 
                the Secretary shall make available incentive payments to 
                producers of those crops.
                    (B) Acreage limitation.--The Secretary shall carry 
                out subparagraph (A) subject to a regional limitation 
                determined by the Secretary on the number of acres for 
                which payments may be received that takes into account 
                planting history and potential planting, but does not 
                exceed a total of 2,900,000 acres or the equivalent 
                volume of production based on a yield of 50 bushels per 
                acre.
                    (C) Payment limitations.--Payments to producers on a 
                farm described in subparagraph (A) shall be--
                          (i) in an amount that is not less than $0.20 
                      per bushel; and
                          (ii) in an amount that is not less than $2.00 
                      per acre for planting eligible hard white wheat 
                      seed.

    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $35,000,000 for the period of 
fiscal years 2009 through 2012.
SEC. 1613. <<NOTE: 7 USC 8788.>> DURUM WHEAT QUALITY PROGRAM.

    (a) In General.--Subject to the availability of funds under 
subsection (c), the Secretary shall provide compensation to producers of 
durum wheat in an amount not to exceed 50 percent of the actual cost of 
fungicides applied to a crop of durum wheat

[[Page 122 STAT. 1020]]

of the producers to control Fusarium head blight (wheat scab) on acres 
certified to have been planted to Durum wheat in a crop year.
    (b) Insufficient Funds.--If the total amount of funds appropriated 
for a fiscal year under subsection (c) are insufficient to fulfill all 
eligible requests for compensation under this section, the Secretary 
shall prorate the compensation payments in a manner determined by the 
Secretary to be equitable.
    (c) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $10,000,000 for each of fiscal 
years 2009 through 2012.
SEC. 1614. <<NOTE: 7 USC 8789.>> STORAGE FACILITY LOANS.

    (a) In General.--As soon as practicable after the date of enactment 
of this Act, the Secretary shall establish a storage facility loan 
program to provide funds for producers of grains, oilseeds, pulse crops, 
hay, renewable biomass, and other storable commodities (other than 
sugar), as determined by the Secretary, to construct or upgrade storage 
and handling facilities for the commodities.
    (b) Eligible Producers.--A storage facility loan under this section 
shall be made available to any producer described in subsection (a) 
that, as determined by the Secretary--
            (1) has a satisfactory credit history;
            (2) has a need for increased storage capacity; and
            (3) demonstrates an ability to repay the loan.

    (c) Term of Loans.--A storage facility loan under this section shall 
have a maximum term of 12 years.
    (d) Loan Amount.--The maximum principal amount of a storage facility 
loan under this section shall be $500,000.
    (e) Loan Disbursements.--The Secretary shall provide for 1 partial 
disbursement of loan principal and 1 final disbursement of loan 
principal, as determined to be appropriate and subject to acceptable 
documentation, to facilitate the purchase and construction of eligible 
facilities.
    (f) Loan Security.--Approval of a storage facility loan under this 
section shall--
            (1) require the borrower to provide loan security to the 
        Secretary, in the form of--
                    (A) a lien on the real estate parcel on which the 
                storage facility is located; or
                    (B) such other security as is acceptable to the 
                Secretary;
            (2) under such rules and regulations as the Secretary may 
        prescribe, not require a severance agreement from the holder of 
        any prior lien on the real estate parcel on which the storage 
        facility is located, if the borrower--
                    (A) agrees to increase the down payment on the 
                storage facility by an amount determined appropriate by 
                the Secretary; or
                    (B) provides other security acceptable to the 
                Secretary; and
            (3) allow a borrower, upon the approval of the Secretary, to 
        define a subparcel of real estate as security for the storage 
        facility loan if the subparcel is--
                    (A) of adequate size and value to adequately secure 
                the loan; and

[[Page 122 STAT. 1021]]

                    (B) not subject to any other liens or mortgages that 
                are superior to the lien interest of the Commodity 
                Credit Corporation.
SEC. 1615. STATE, COUNTY, AND AREA COMMITTEES.

    Section 8(b)(5)(B)(ii) of the Soil Conservation and Domestic 
Allotment Act (16 U.S.C. 590h(b)(5)(B)(ii)) is amended--
            (1) by redesignating subclauses (I) and (II) as items (aa) 
        and (bb), respectively, and indenting appropriately;
            (2) in the matter preceding item (aa) (as redesignated by 
        paragraph (1)), by striking ``A committee established'' and 
        inserting the following:
                                    ``(I) In general.--Except as 
                                provided in subclause (II), a committee 
                                established''; and
            (3) by adding at the end the following:
                                    ``(II) Combination or consolidation 
                                of areas.--A committee established by 
                                combining or consolidating 2 or more 
                                county or area committees shall consist 
                                of not fewer than 3 nor more than 11 
                                members that--
                                            ``(aa) are fairly 
                                        representative of the 
                                        agricultural producers within 
                                        the area covered by the county, 
                                        area, or local committee; and
                                            ``(bb) are elected by the 
                                        agricultural producers that 
                                        participate or cooperate in 
                                        programs administered within the 
                                        area under the jurisdiction of 
                                        the county, area, or local 
                                        committee.
                                    ``(III) Representation of socially 
                                disadvantaged farmers and ranchers.--
                                The <<NOTE: Procedures.>> Secretary 
                                shall develop procedures to maintain 
                                representation of socially disadvantaged 
                                farmers and ranchers on combined or 
                                consolidated committees.
                                    ``(IV) Eligibility for membership.--
                                Notwithstanding any other producer 
                                eligibility requirements for service on 
                                county or area committees, if a county 
                                or area is consolidated or combined, a 
                                producer shall be eligible to serve only 
                                as a member of the county or area 
                                committee that the producer elects to 
                                administer the farm records of the 
                                producer.''.
SEC. 1616. PROHIBITION ON CHARGING CERTAIN FEES.

    Public Law 108-470 (7 U.S.C. 7416a) is amended--
            (1) in subsection (a), by striking ``may'' and inserting 
        ``shall''; and
            (2) by adding at the end the following:

    ``(c) Prohibition on Charging Certain Fees.--The Secretary may not 
charge any fees or related costs for the collection of commodity 
assessments pursuant to this Act.''.
SEC. 1617. <<NOTE: 7 USC 8790.>> SIGNATURE AUTHORITY.

    (a) In General.--In carrying out this title and title II and 
amendments made by those titles, if the Secretary approves a document, 
the Secretary shall not subsequently determine the document is 
inadequate or invalid because of the lack of authority of any person 
signing the document on behalf of the applicant or any other individual, 
entity, general partnership, or joint venture,

[[Page 122 STAT. 1022]]

or the documents relied upon were determined inadequate or invalid, 
unless the person signing the program document knowingly and willfully 
falsified the evidence of signature authority or a signature.
    (b) Affirmation.--
            (1) In general.--Nothing in this section prohibits the 
        Secretary from asking a proper party to affirm any document that 
        otherwise would be considered approved under subsection (a).
            (2) No retroactive effect.--A denial of benefits based on a 
        lack of affirmation under paragraph (1) shall not be retroactive 
        with respect to third-party producers who were not the subject 
        of the erroneous representation of authority, if the third-party 
        producers--
                    (A) relied on the prior approval by the Secretary of 
                the documents in good faith; and
                    (B) substantively complied with all program 
                requirements
SEC. 1618. MODERNIZATION OF FARM SERVICE AGENCY.

    Not later <<NOTE: Deadline. Reports.>> than 180 days after the date 
of enactment of this Act, the Secretary shall transmit to the Committee 
on Agriculture and the Committee on Appropriations of the House of 
Representatives and the Committee on Agriculture, Nutrition, and 
Forestry and the Committee on Appropriations of the Senate a report 
prepared by a third party that describes--
            (1) the data processing and information technology 
        challenges experienced in local offices of the Farm Service 
        Agency;
            (2) the impact of those challenges on service to producers, 
        on efficiency of personnel, and on implementation of this Act;
            (3) the need for information technology system upgrades of 
        the Farm Service Agency relative to other agencies of the 
        Department of Agriculture;
            (4) the detailed plan needed to fulfill the needs of the 
        Department that are identified in paragraph (3), including 
        hardware, software, and infrastructure requirements;
            (5) the estimated cost and timeframe for long-term 
        modernization and stabilization of Farm Service Agency 
        information technology systems;
            (6) the benefits associated with such modernization and 
        stabilization; and
            (7) an evaluation of the existence of appropriate oversight 
        within the Department to ensure that funds needed for systems 
        upgrades can be appropriately managed.
SEC. 1619. <<NOTE: 7 USC 8791.>> INFORMATION GATHERING.

    (a) Geospatial Systems.--The Secretary shall ensure that all the 
geospatial data of the agencies of the Department of Agriculture are 
portable and standardized.
    (b) Limitation on Disclosures.--
            (1) Definition of agricultural operation.--In this 
        subsection, the term ``agricultural operation'' includes the 
        production and marketing of agricultural commodities and 
        livestock.
            (2) Prohibition.--Except as provided in paragraphs (3) and 
        (4), the Secretary, any officer or employee of the Department of 
        Agriculture, or any contractor or cooperator of the Department, 
        shall not disclose--

[[Page 122 STAT. 1023]]

                    (A) information provided by an agricultural producer 
                or owner of agricultural land concerning the 
                agricultural operation, farming or conservation 
                practices, or the land itself, in order to participate 
                in programs of the Department; or
                    (B) geospatial information otherwise maintained by 
                the Secretary about agricultural land or operations for 
                which information described in subparagraph (A) is 
                provided.
            (3) Authorized disclosures.--
                    (A) Limited release of information.--If the 
                Secretary determines that the information described in 
                paragraph (2) will not be subsequently disclosed except 
                in accordance with paragraph (4), the Secretary may 
                release or disclose the information to a person or 
                Federal, State, local, or tribal agency working in 
                cooperation with the Secretary in any Department 
                program--
                          (i) when providing technical or financial 
                      assistance with respect to the agricultural 
                      operation, agricultural land, or farming or 
                      conservation practices; or
                          (ii) when responding to a disease or pest 
                      threat to agricultural operations, if the 
                      Secretary determines that a threat to agricultural 
                      operations exists and the disclosure of 
                      information to a person or cooperating government 
                      entity is necessary to assist the Secretary in 
                      responding to the disease or pest threat as 
                      authorized by law.
            (4) Exceptions.--Nothing in this subsection affects--
                    (A) the disclosure of payment information (including 
                payment information and the names and addresses of 
                recipients of payments) under any Department program 
                that is otherwise authorized by law;
                    (B) the disclosure of information described in 
                paragraph (2) 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; or
                    (C) the disclosure of information described in 
                paragraph (2) pursuant to the consent of the 
                agricultural producer or owner of agricultural land.
            (5) Condition of other programs.--The participation of the 
        agricultural producer or owner of agricultural land in, or 
        receipt of any benefit under, any program administered by the 
        Secretary may not be conditioned on the consent of the 
        agricultural producer or owner of agricultural land under 
        paragraph (4)(C).
            (6) Waiver of privilege or protection.--The disclosure of 
        information under paragraph (2) shall not constitute a waiver of 
        any applicable privilege or protection under Federal law, 
        including trade secret protection.
SEC. 1620. LEASING OF OFFICE SPACE.

    Not later <<NOTE: Deadline. Reports.>> than 1 year after the date of 
enactment of this Act, the Secretary shall submit to the Committee on 
Agriculture and the Committee on Appropriations of the House of 
Representatives and the Committee on Agriculture, Nutrition, and 
Forestry and the Committee on Appropriations of the Senate a report that 
describes--

[[Page 122 STAT. 1024]]

            (1) the costs and time associated with complying with 
        leasing procedures of the General Services Administration 
        relative to the previous independent leasing procedures of the 
        Department of Agriculture;
            (2) the additional staffing needs associated with complying 
        with those procedures; and
            (3) the value added to the leasing process and the ability 
        of the Department to secure best-value leases by complying with 
        the General Services Administration leasing procedures.
SEC. 1621. <<NOTE: 7 USC 8792.>>  GEOGRAPHICALLY DISADVANTAGED 
                          FARMERS AND RANCHERS.

    (a) Definitions.--In this section:
            (1) Agricultural commodity.--The term ``agricultural 
        commodity'' has the meaning given the term in section 102 of the 
        Agricultural Trade Act of 1978 (7 U.S.C. 5602).
            (2) Geographically disadvantaged farmer or rancher.--The 
        term ``geographically disadvantaged farmer or rancher'' has the 
        meaning given the term in section 10906(a) of the Farm Security 
        and Rural Investment Act of 2002 (7 U.S.C. 2204 note; Public Law 
        107-171).

    (b) Authorization.--Subject to the availability of funds under 
subsection (d), the Secretary may provide geographically disadvantaged 
farmers or ranchers direct reimbursement payments for activities 
described in subsection (c).
    (c) Transportation.--
            (1) In general.--Subject to paragraphs (2) and (3), the 
        Secretary may provide direct reimbursement payments to a 
        geographically disadvantaged farmer or rancher to transport an 
        agricultural commodity, or inputs used to produce an 
        agricultural commodity, during a fiscal year.
            (2) Proof of eligibility.--To be eligible to receive 
        assistance under paragraph (1), a geographically disadvantaged 
        farmer or rancher shall demonstrate to the Secretary that 
        transportation of the agricultural commodity or inputs occurred 
        over a distance of more than 30 miles, as determined by the 
        Secretary.
            (3) Amount.--
                    (A) In general.--Subject to paragraph (2), the 
                amount of direct reimbursement payments made to a 
                geographically disadvantaged farmer or rancher under 
                this section for a fiscal year shall equal the product 
                obtained by multiplying--
                          (i) the amount of costs incurred by the 
                      geographically disadvantaged farmer or rancher for 
                      transportation of the agricultural commodity or 
                      inputs during the fiscal year; and
                          (ii)(I) the percentage of the allowance for 
                      that fiscal year under section 5941 of title 5, 
                      United States Code, for Federal employees 
                      stationed in Alaska and Hawaii; or
                          (II) in the case of an insular area (as 
                      defined in section 1404 of the National 
                      Agricultural Research, Extension, and Teaching 
                      Policy Act of 1977 (7 U.S.C. 3103)), a comparable 
                      percentage of the allowance for the fiscal year, 
                      as determined by the Secretary.

[[Page 122 STAT. 1025]]

                    (B) Limitation.--The total amount of direct 
                reimbursement payments provided by the Secretary under 
                this section shall not exceed $15,000,000 for a fiscal 
                year.

    (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 2009 through 2012.
SEC. 1622. <<NOTE: 7 USC 8793.>>  IMPLEMENTATION.

    The Secretary shall make available to the Farm Service Agency to 
carry out this title $50,000,000.
SEC. 1623. REPEALS.

    (a) Commission on Application of Payment Limitations.--Section 1605 
of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7993) is 
repealed.
    (b) Renewed Availability of Market Loss Assistance and Certain 
Emergency Assistance to Persons That Failed To Receive Assistance Under 
Earlier Authorities.--Section 1617 of the Farm Security and Rural 
Investment Act of 2002 (7 U.S.C. 8000) is repealed.

                         TITLE II--CONSERVATION

      Subtitle A--Definitions and Highly Erodible Land and Wetland 
                              Conservation

SEC. 2001. DEFINITIONS RELATING TO CONSERVATION TITLE OF FOOD 
                          SECURITY ACT OF 1985.

    (a) Beginning Farmer or Rancher.--Section 1201(a) of the Food 
Security Act of 1985 (16 U.S.C. 3801(a)) is amended--
            (1) by redesignating paragraphs (2) through (6), (7) through 
        (11), (12), (13) through (15), (16), (17), and (18) as 
        paragraphs (3) through (7), (9) through (13), (15), (20) through 
        (22), (24), (26), and (27), respectively; and
            (2) by inserting after paragraph (1) the following new 
        paragraph:
            ``(2) Beginning farmer or rancher.--The term `beginning 
        farmer or rancher' has the meaning given the term in section 
        343(a)(8) of the Consolidated Farm and Rural Development Act (7 
        U.S.C. 1991(a)(8)).''.

    (b) Farm.--Section 1201(a) of the Food Security Act of 1985 (16 
U.S.C. 3801(a)) is amended by inserting after paragraph (7), as 
redesignated by subsection (a)(1), the following new paragraph:
            ``(8) Farm.--The term `farm' means a farm that--
                    ``(A) is under the general control of one operator;
                    ``(B) has one or more owners;
                    ``(C) consists of one or more tracts of land, 
                whether or not contiguous;
                    ``(D) is located within a county or region, as 
                determined by the Secretary; and
                    ``(E) may contain lands that are incidental to the 
                production of perennial crops, including conserving 
                uses, forestry, and livestock, as determined by the 
                Secretary.''.

    (c) Indian Tribe.--Section 1201(a) of the Food Security Act of 1985 
(16 U.S.C. 3801(a)) is amended by inserting after paragraph

[[Page 122 STAT. 1026]]

(13), as redesignated by subsection (a)(1), the following new paragraph:
            ``(14) Indian tribe.--The term `Indian tribe' has the 
        meaning given the term in section 4(e) of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 
        450b(e)).''.

    (d) Integrated Pest Management; Livestock; Nonindustrial Private 
Forest Land; Person and Legal Entity.--Section 1201(a) of the Food 
Security Act of 1985 (16 U.S.C. 3801(a)) is amended by inserting after 
paragraph (15), as redesignated by subsection (a)(1), the following new 
paragraphs:
            ``(16) Integrated pest management.--The term `integrated 
        pest management' means a sustainable approach to managing pests 
        by combining biological, cultural, physical, and chemical tools 
        in a way that minimizes economic, health, and environmental 
        risks.
            ``(17) Livestock.--The term `livestock' means all animals 
        raised on farms, as determined by the Secretary.
            ``(18) Nonindustrial private forest land.--The term 
        `nonindustrial private forest land' means rural land, as 
        determined by the Secretary, that--
                    ``(A) has existing tree cover or is suitable for 
                growing trees; and
                    ``(B) is owned by any nonindustrial private 
                individual, group, association, corporation, Indian 
                tribe, or other private legal entity that has definitive 
                decisionmaking authority over the land.
            ``(19) Person and legal entity.--For purposes of applying 
        payment limitations under subtitle D, the terms `person' and 
        `legal entity' have the meanings given those terms in section 
        1001(a) of this Act (7 U.S.C. 1308(a)).''.

    (e) Socially Disadvantaged Farmer or Rancher.--Section 1201(a) of 
the Food Security Act of 1985 (16 U.S.C. 3801(a)) is amended by 
inserting after paragraph (22), as redesignated by subsection (a)(1), 
the following new paragraph:
            ``(23) Socially disadvantaged farmer or rancher.--The term 
        `socially disadvantaged farmer or rancher' has the meaning given 
        the term in section 2501(e)(2) of the Food, Agriculture, 
        Conservation, and Trade Act of 1990 (7 U.S.C. 2279(e)(2)).''.

    (f) Technical Assistance.--Section 1201(a) of the Food Security Act 
of 1985 (16 U.S.C. 3801(a)) is amended by inserting after paragraph 
(24), as redesignated by subsection (a)(1), the following new paragraph:
            ``(25) Technical assistance.--The term `technical 
        assistance' means technical expertise, information, and tools 
        necessary for the conservation of natural resources on land 
        active in agricultural, forestry, or related uses. The term 
        includes the following:
                    ``(A) Technical services provided directly to 
                farmers, ranchers, and other eligible entities, such as 
                conservation planning, technical consultation, and 
                assistance with design and implementation of 
                conservation practices.
                    ``(B) Technical infrastructure, including 
                activities, processes, tools, and agency functions 
                needed to support delivery of technical services, such 
                as technical standards,

[[Page 122 STAT. 1027]]

                resource inventories, training, data, technology, 
                monitoring, and effects analyses.''.
SEC. 2002. REVIEW OF GOOD FAITH DETERMINATIONS RELATED TO HIGHLY 
                          ERODIBLE LAND CONSERVATION.

    Section 1212 of the Food Security Act of 1985 (16 U.S.C. 3812) is 
amended by striking subsection (f) and inserting the following new 
subsection:
    ``(f) Graduated Penalties.--
            ``(1) Ineligibility.--No person shall become ineligible 
        under section 1211 for program loans, payments, and benefits as 
        a result of the failure of the person to actively apply a 
        conservation plan, if the Secretary determines that the person 
        has acted in good faith and without an intent to violate this 
        subtitle.
            ``(2) Eligible reviewers.--A determination of the Secretary, 
        or a designee of the Secretary, under paragraph (1) shall be 
        reviewed by the applicable--
                    ``(A) State Executive Director, with the technical 
                concurrence of the State Conservationist; or
                    ``(B) district director, with the technical 
                concurrence of the area conservationist.
            ``(3) Period for implementation.--A person who meets the 
        requirements of paragraph (1) shall be allowed a reasonable 
        period of time, as determined by the Secretary, but not to 
        exceed 1 year, during which to implement the measures and 
        practices necessary to be considered to be actively applying the 
        conservation plan of the person.
            ``(4) Penalties.--
                    ``(A) Application.--This paragraph applies if the 
                Secretary determines that--
                          ``(i) a person has failed to comply with 
                      section 1211 with respect to highly erodible 
                      cropland, and has acted in good faith and without 
                      an intent to violate section 1211; or
                          ``(ii) the violation--
                                    ``(I) is technical and minor in 
                                nature; and
                                    ``(II) has a minimal effect on the 
                                erosion control purposes of the 
                                conservation plan applicable to the land 
                                on which the violation has occurred.
                    ``(B) Reduction.--If this paragraph applies under 
                subparagraph (A), the Secretary shall, in lieu of 
                applying the ineligibility provisions of section 1211, 
                reduce program benefits described in section 1211 that 
                the producer would otherwise be eligible to receive in a 
                crop year by an amount commensurate with the seriousness 
                of the violation, as determined by the Secretary.
            ``(5) Subsequent crop years.--Any person whose benefits are 
        reduced for any crop year under this subsection shall continue 
        to be eligible for all of the benefits described in section 1211 
        for any subsequent crop year if, prior to the beginning of the 
        subsequent crop year, the Secretary determines that the person 
        is actively applying a conservation plan according to the 
        schedule specified in the plan.''.

[[Page 122 STAT. 1028]]

SEC. 2003. REVIEW OF GOOD FAITH DETERMINATIONS RELATED TO WETLAND 
                          CONSERVATION.

    Section 1222(h) of the Food Security Act of 1985 (16 U.S.C. 3822(h)) 
is amended--
            (1) by redesignating paragraph (2) as paragraph (3);
            (2) by inserting after paragraph (1) the following new 
        paragraph:
            ``(2) Eligible reviewers.--A determination of the Secretary, 
        or a designee of the Secretary, under paragraph (1) shall be 
        reviewed by the applicable--
                    ``(A) State Executive Director, with the technical 
                concurrence of the State Conservationist; or
                    ``(B) district director, with the technical 
                concurrence of the area conservationist.''; and
            (3) in paragraph (3) (as redesignated by paragraph (1)), by 
        inserting ``be'' before ``actively''.

                Subtitle B--Conservation Reserve Program

SEC. 2101. EXTENSION OF CONSERVATION RESERVE PROGRAM.

    Section 1231(a) of the Food Security Act of 1985 (16 U.S.C. 3831(a)) 
is amended--
            (1) by striking ``2007 calendar year'' and inserting ``2012 
        fiscal year''; and
            (2) by inserting before the period the following: ``and to 
        address issues raised by State, regional, and national 
        conservation initiatives''; and
SEC. 2102. LAND ELIGIBLE FOR ENROLLMENT IN CONSERVATION RESERVE.

    Section 1231(b) of the Food Security Act of 1985 (16 U.S.C. 3831(b)) 
is amended--
            (1) in paragraph (1)(B)--
                    (A) by striking ``Farm Security and Rural Investment 
                Act of 2002'' and inserting ``Food, Conservation, and 
                Energy Act of 2008''; and
                    (B) by striking the period at the end and inserting 
                a semicolon; and
            (2) in paragraph (4)--
                    (A) in subparagraph (C), by striking ``; or'' and 
                inserting a semicolon;
                    (B) in subparagraph (D), by striking ``and'' at the 
                end and inserting ``or''; and
                    (C) in subparagraph (E), by inserting ``or'' after 
                the semicolon at the end.
SEC. 2103. MAXIMUM ENROLLMENT OF ACREAGE IN CONSERVATION RESERVE.

    Section 1231(d) of the Food Security Act of 1985 (16 U.S.C. 3831(d)) 
is amended--
            (1) by striking ``2007 calendar years'' and inserting ``2009 
        fiscal years'';
            (2) by striking ``( 16 U.S.C.'' and inserting ``(16 
        U.S.C.''; and
            (3) by adding at the end the following new sentence: 
        ``During fiscal years 2010, 2011, and 2012, the Secretary may

[[Page 122 STAT. 1029]]

        maintain up to 32,000,000 acres in the conservation reserve at 
        any 1 time.''.
SEC. 2104. DESIGNATION OF CONSERVATION PRIORITY AREAS.

    Section 1231(f) of the Food Security Act of 1985 (16 U.S.C. 3831(f)) 
is amended by striking ``the Chesapeake Bay Region (Pennsylvania, 
Maryland, and Virginia)'' and inserting ``the Chesapeake Bay Region''.
SEC. 2105. TREATMENT OF MULTI-YEAR GRASSES AND LEGUMES.

    Subsection (g) of section 1231 of the Food Security Act of 1985 (16 
U.S.C. 3831) is amended to read as follows:
    ``(g) Multi-Year Grasses and Legumes.--
            ``(1) In general.--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.
            ``(2) Cropping history.--Alfalfa, when grown as part of a 
        rotation practice, as determined by the Secretary, is an 
        agricultural commodity subject to the cropping history criteria 
        under subsection (b)(1)(B) for the purpose of determining 
        whether highly erodible cropland has been planted or considered 
        planted for 4 of the 6 years referred to in such subsection.''.
SEC. 2106. REVISED PILOT PROGRAM FOR ENROLLMENT OF WETLAND AND 
                          BUFFER ACREAGE IN CONSERVATION RESERVE.

    (a) Revised Program.--
            (1) In general.--Title XII of the Food Security Act of 1985 
        is amended by inserting after section 1231 (16 U.S.C. 3831) the 
        following new section:
``SEC. 1231B. <<NOTE: 16 USC 3831b.>>  PILOT PROGRAM FOR 
                            ENROLLMENT OF WETLAND AND BUFFER 
                            ACREAGE IN CONSERVATION RESERVE.

    ``(a) Program Required.--
            ``(1) In general.--During the 2008 through 2012 fiscal 
        years, the Secretary shall carry out a program in each State 
        under which the Secretary shall enroll eligible acreage 
        described in subsection (b).
            ``(2) 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 program established under this section.

    ``(b) Eligible Acreage.--
            ``(1) Wetland and related land.--Subject to subsections (c) 
        and (d), an owner or operator may enroll in the conservation 
        reserve, pursuant to the program established under this section, 
        land--
                    ``(A) that is wetland (including a converted wetland 
                described in section 1222(b)(1)(A)) that had a cropping 
                history during at least 3 of the immediately preceding 
                10 crop years;
                    ``(B) on which a constructed wetland is to be 
                developed that will receive flow from a row crop 
                agriculture drainage system and is designed to provide 
                nitrogen removal in addition to other wetland functions;
                    ``(C) that was devoted to commercial pond-raised 
                aquaculture in any year during the period of calendar 
                years 2002 through 2007; or

[[Page 122 STAT. 1030]]

                    ``(D) that, after January 1, 1990, and before 
                December 31, 2002, was--
                          ``(i) cropped during at least 3 of 10 crop 
                      years; and
                          ``(ii) subject to the natural overflow of a 
                      prairie wetland.
            ``(2) Buffer acreage.--Subject to subsections (c) and (d), 
        an owner or operator may enroll in the conservation reserve, 
        pursuant to the program established under this section, buffer 
        acreage that--
                    ``(A) with respect to land described in subparagraph 
                (A), (B), or (C) of paragraph (1)--
                          ``(i) is contiguous to such land
                          ``(ii) is used to protect such land; and
                          ``(iii) is of such width as the Secretary 
                      determines is necessary to protect such land, 
                      taking into consideration and accommodating the 
                      farming practices (including the straightening of 
                      boundaries to accommodate machinery) used with 
                      respect to the cropland that surrounds such land; 
                      and
                    ``(B) with respect to land described in subparagraph 
                (D) of paragraph (1), enhances a wildlife benefit to the 
                extent practicable in terms of upland to wetland ratios, 
                as determined by the Secretary.

    ``(c) Program Limitations.--
            ``(1) Acreage limitation.--The Secretary may enroll in the 
        conservation reserve, pursuant to the program established under 
        this section, not more than--
                    ``(A) 100,000 acres in any State; and
                    ``(B) a total of 1,000,000 acres.
            ``(2) Relationship to maximum enrollment.--Subject to 
        paragraph (3), any acreage enrolled in the conservation reserve 
        under this section shall be considered acres maintained in the 
        conservation reserve.
            ``(3) Relationship to other enrolled acreage.--Acreage 
        enrolled in the conservation reserve under this section shall 
        not affect for any fiscal year the quantity of--
                    ``(A) acreage enrolled to establish conservation 
                buffers as part of the program announced on March 24, 
                1998 (63 Fed. Reg. 14109); or
                    ``(B) acreage enrolled into the conservation reserve 
                enhancement program announced on May 27, 1998 (63 Fed. 
                Reg. 28965).
            ``(4) Review; potential increase in enrollment acreage.--The 
        Secretary shall conduct a review of the program established 
        under this section with respect to each State that has enrolled 
        land in the conservation reserve pursuant to the program. As a 
        result of the review, the Secretary may increase the number of 
        acres that may be enrolled in a State under the program to not 
        more than 200,000 acres, notwithstanding paragraph (1)(A).

    ``(d) Owner or Operator Enrollment Limitations.--
            ``(1) Wetland and related land.--
                    ``(A) Wetlands and constructed wetlands.--The 
                maximum size of any land described in subparagraph (A) 
                or (B) of subsection (b)(1) that an owner or operator 
                may

[[Page 122 STAT. 1031]]

                enroll in the conservation reserve, pursuant to the 
                program established under this section, shall be 40 
                contiguous acres.
                    ``(B) Flooded farmland.--The maximum size of any 
                land described in subparagraph (D) of subsection (b)(1) 
                that an owner or operator may enroll in the conservation 
                reserve, pursuant to the program established under this 
                section, shall be 20 contiguous acres.
                    ``(C) Coverage.--All acres described in subparagraph 
                (A) or (B), including acres that are ineligible for 
                payment, shall be covered by the conservation contract.
            ``(2) Buffer acreage.--The maximum size of any buffer 
        acreage described in subsection (b)(2) that an owner or operator 
        may enroll in the conservation reserve under this section shall 
        be determined by the Secretary in consultation with the State 
        Technical Committee.
            ``(3) Tracts.--Except for land described in subsection 
        (b)(1)(C) and buffer acreage related to such land, the maximum 
        size of any eligible acreage described in subsection (b)(1) in a 
        tract of an owner or operator enrolled in the conservation 
        reserve under this section shall be 40 acres.

    ``(e) Duties of Owners and Operators.--During the term of a contract 
entered into under the program established under this section, an owner 
or operator shall agree--
            ``(1) to restore the hydrology of the wetland within the 
        eligible acreage to the maximum extent practicable, as 
        determined by the Secretary;
            ``(2) to establish vegetative cover (which may include 
        emerging vegetation in water and bottomland hardwoods, cypress, 
        and other appropriate tree species) on the eligible acreage, as 
        determined by the Secretary;
            ``(3) to a general prohibition of commercial use of the 
        enrolled land; and
            ``(4) to carry out other duties described in section 1232.

    ``(f) Duties of the Secretary.--
            ``(1) In general.--Except as provided in paragraphs (2) and 
        (3), in return for a contract entered into under this section, 
        the Secretary shall--
                    ``(A) make payments to the owner or operator based 
                on rental rates for cropland; and
                    ``(B) provide assistance to the owner or operator in 
                accordance with sections 1233 and 1234.
            ``(2) Contract offers and payments.--The Secretary shall use 
        the method of determination described in section 1234(c)(2)(B) 
        to determine the acceptability of contract offers and the amount 
        of rental payments under this section.
            ``(3) Incentives.--The amounts payable to owners and 
        operators in the form of rental payments under contracts entered 
        into under this section shall reflect incentives that are 
        provided to owners and operators to enroll filterstrips in the 
        conservation reserve under section 1234.''.
            (2) Repeal of superceded program.--Section 1231 of the Food 
        Security Act of 1985 (16 U.S.C. 3831) is amended--
                    (A) by striking subsection (h); and
                    (B) by redesignating subsections (i) and (j) as 
                subsections (h) and (i), respectively.

[[Page 122 STAT. 1032]]

    (b) Conforming Changes to Emergency Forestry Conservation Reserve 
Program.--Subsection (k) of section 1231 of the Food Security Act of 
1985 (16 U.S.C. 3831) is amended--
            (1) by striking ``(k) Emergency Forestry Conservation 
        Reserve Program.--'' and inserting the following:
``SEC. 1231A. <<NOTE: 16 USC 3831a.>> EMERGENCY FORESTRY 
                            CONSERVATION RESERVE PROGRAM.'';
            (2) by striking ``subsection'' each place it appears (other 
        than paragraph (3)(C)(ii)) and inserting ``section'';
            (3) by redesignating paragraphs (1), (2), and (3) as 
        subsections (a), (b), and (c), respectively;
            (4) in subsection (a), as so redesignated, by redesignating 
        subparagraphs (A) and (B) as paragraphs (1) and (2), 
        respectively; and
            (5) in subsection (c), as so redesignated--
                    (A) by redesignating subparagraphs (A) through (I) 
                as paragraphs (1) through (9), respectively;
                    (B) in paragraph (1), as so redesignated, by 
                striking ``subparagraph (B)'' and ``subparagraph (G)'' 
                and inserting ``paragraph (2)'' and ``paragraph (7)'', 
                respectively;
                    (C) in paragraph (3), as so redesignated--
                          (i) by redesignating clauses (i) and (ii) as 
                      subparagraphs (A) and (B), respectively; and
                          (ii) by striking ``subsection (d)'' and 
                      inserting ``section 1231(d)'';
                    (D) in paragraph (4), as so redesignated, by 
                redesignating clauses (i) and (ii) as subparagraphs (A) 
                and (B), respectively;
                    (E) in paragraph (5), as so redesignated--
                          (i) by redesignating clauses (i) through (v) 
                      as subparagraphs (A) through (E), respectively, 
                      and subclauses (I) and (II) as clauses (i) and 
                      (ii), respectively;
                          (ii) in subparagraph (B), as so redesignated, 
                      by striking ``clause (i)(I)'' and inserting 
                      ``subparagraph (A)(i)''; and
                          (iii) in subparagraph (C), as so redesignated, 
                      by striking ``clause (i)(II)'' and inserting 
                      ``subparagraph (A)(ii)''; and
                    (F) in paragraph (9), as so redesignated, by 
                redesignating clauses (i) through (iii) as subparagraphs 
                (A) through (C), respectively, and subclauses (I) 
                through (III) as clauses (i) through (iii), 
                respectively.
SEC. 2107. ADDITIONAL DUTY OF PARTICIPANTS UNDER CONSERVATION 
                          RESERVE CONTRACTS.

    Section 1232(a) of the Food Security Act of 1985 (16 U.S.C. 3832(a)) 
is amended--
            (1) by redesignating paragraphs (5) through (10) as 
        paragraphs (6) through (11), respectively; and
            (2) by inserting after paragraph (4) the following new 
        paragraph:
            ``(5) to undertake management on the land as needed 
        throughout the term of the contract to implement the 
        conservation plan;''.

[[Page 122 STAT. 1033]]

SEC. 2108. MANAGED HAYING, GRAZING, OR OTHER COMMERCIAL USE OF 
                          FORAGE ON ENROLLED LAND AND INSTALLATION 
                          OF WIND TURBINES.

    (a) General Prohibition; Exceptions.--Section 1232(a) of the Food 
Security Act of 1985 (16 U.S.C. 3832(a)) is amended by striking 
paragraph (8), as redesignated by section 2107, and inserting the 
following new paragraph:
            ``(8) 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 (including the managed 
                harvesting of biomass), except that in permitting 
                managed harvesting, the Secretary, in coordination with 
                the State technical committee--
                          ``(i) shall develop appropriate vegetation 
                      management requirements; and
                          ``(ii) shall identify periods during which 
                      managed harvesting may be conducted;
                    ``(B) 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;
                    ``(C) routine grazing or prescribed grazing for the 
                control of invasive species, except that in permitting 
                such routine grazing or prescribed grazing, the 
                Secretary, in coordination with the State technical 
                committee--
                          ``(i) shall develop appropriate vegetation 
                      management requirements and stocking rates for the 
                      land that are suitable for continued routine 
                      grazing; and
                          ``(ii) shall establish the frequency during 
                      which routine grazing may be conducted, taking 
                      into consideration regional differences such as--
                                    ``(I) climate, soil type, and 
                                natural resources;
                                    ``(II) the number of years that 
                                should be required between routine 
                                grazing activities; and
                                    ``(III) how often during a year in 
                                which routine grazing is permitted that 
                                routine grazing should be allowed to 
                                occur; and
                    ``(D) 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;''.

    (b) Rental Payment Reduction.--Section 1232 of the Food Security Act 
of 1985 (16 U.S.C. 3832) is amended by adding at the end the following 
new subsection:
    ``(d) Rental Payment Reduction for Certain Authorized Uses of 
Enrolled Land.--In the case of an authorized activity

[[Page 122 STAT. 1034]]

under subsection (a)(8) on land that is subject to a contract under this 
subchapter, the Secretary shall reduce the rental payment otherwise 
payable under the contract by an amount commensurate with the economic 
value of the authorized activity.''.
SEC. 2109. COST SHARING PAYMENTS RELATING TO TREES, WINDBREAKS, 
                          SHELTERBELTS, AND WILDLIFE CORRIDORS.

    Section 1234(b) of the Food Security Act of 1985 (16 U.S.C. 3834(b)) 
is amended by striking paragraph (3) and inserting the following new 
paragraph:
            ``(3) 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;
                          ``(ii) land converted to such production under 
                      section 1235A; and
                          ``(iii) land on which an owner or operator 
                      agrees to conduct thinning authorized by section 
                      1232(a)(9), if the thinning is necessary to 
                      improve the condition of resources on the land.
                    ``(B) Payments.--
                          ``(i) Percentage.--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 
                      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) or thinning.
                          ``(ii) Duration.--The Secretary shall make 
                      payments as described in clause (i) for a period 
                      of not less than 2 years, but not more than 4 
                      years, beginning on the date of--
                                    ``(I) the planting of the trees or 
                                shrubs; or
                                    ``(II) the thinning of existing 
                                stands to improve the condition of 
                                resources on the land.''.
SEC. 2110. EVALUATION AND ACCEPTANCE OF CONTRACT OFFERS, ANNUAL 
                          RENTAL PAYMENTS, AND PAYMENT 
                          LIMITATIONS.

    (a) Evaluation and Acceptance of Contract Offers.--Section 1234(c) 
of the Food Security Act of 1985 (16 U.S.C. 3834(c)) is amended by 
striking paragraph (3) and inserting the following new paragraph:
            ``(3) Acceptance of contract offers.--
                    ``(A) Evaluation of offers.--In determining the 
                acceptability of contract offers, the Secretary may 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, or wildlife 
                habitat or provide other environmental benefits.
                    ``(B) Establishment of different criteria in various 
                states and regions.--The Secretary may establish

[[Page 122 STAT. 1035]]

                different criteria for determining the acceptability of 
                contract offers 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.
                    ``(C) Local preference.--In determining the 
                acceptability of contract offers for new enrollments, 
                the Secretary shall accept, to the maximum extent 
                practicable, an offer from an owner or operator that is 
                a resident of the county in which the land is located or 
                of a contiguous county if, as determined by the 
                Secretary, the land would provide at least equivalent 
                conservation benefits to land under competing offers.''.

    (b) Annual Survey of Dryland and Irrigated Cash Rental Rates.--
            (1) Annual estimates required.--Section 1234(c) of the Food 
        Security Act of 1985 (16 U.S.C. 3834(c)) is amended by adding at 
        the end the following new paragraph:
            ``(5) Rental rates.--
                    ``(A) Annual estimates.--The Secretary (acting 
                through the National Agricultural Statistics Service) 
                shall conduct an annual survey of per acre estimates of 
                county average market dryland and irrigated cash rental 
                rates for cropland and pastureland in all counties or 
                equivalent subdivisions within each State that have 
                20,000 acres or more of cropland and pastureland.
                    ``(B) Public availability 
                of <<NOTE: Website.>> estimates.--The estimates derived 
                from the annual survey conducted under subparagraph (A) 
                shall be maintained on a website of the Department of 
                Agriculture for use by the general public.''.
            (2) First survey.--The <<NOTE: Deadline. 16 USC 3834 
        note.>> first survey required by paragraph (5) of section 
        1234(c) of the Food Security Act of 1985 (16 U.S.C. 3834(c)), as 
        added by subsection (a), shall be conducted not later than 1 
        year after the date of enactment of this Act.

    (c) Payment Limitations.--Section 1234(f) of the Food Security Act 
of 1985 (16 U.S.C. 3834(f)) is amended--
            (1) in paragraph (1), by striking ``made to a person'' and 
        inserting ``received by a person or legal entity, directly or 
        indirectly,'';
            (2) by striking paragraph (2); and
            (3) in paragraph (4), by striking ``any person'' and 
        inserting ``any person or legal entity''.
SEC. 2111. CONSERVATION RESERVE PROGRAM TRANSITION INCENTIVES FOR 
                          BEGINNING FARMERS OR RANCHERS AND 
                          SOCIALLY DISADVANTAGED FARMERS OR 
                          RANCHERS.

    (a) Contract Modification Authority.--Section 1235(c)(1)(B) of the 
Food Security Act of 1985 (16 U.S.C. 3835(c)(1)(B)) is amended--
            (1) in clause (ii), by striking ``or'' at the end;
            (2) by redesignating clause (iii) as clause (iv); and
            (3) by inserting after clause (ii) the following new clause:
                          ``(iii) to facilitate a transition of land 
                      subject to the contract from a retired or retiring 
                      owner or operator to a beginning farmer or rancher 
                      or socially disadvantaged farmer or rancher for 
                      the purpose of returning some or all of the land 
                      into production using sustainable grazing or crop 
                      production methods; or''.

[[Page 122 STAT. 1036]]

    (b) Transition Option.--Section 1235 of the Food Security Act of 
1985 (16 U.S.C. 3835) is amended by adding at the end the following new 
subsection:
    ``(f) Transition Option for Certain Farmers or Ranchers.--
            ``(1) Duties of the secretary.--In <<NOTE: Contracts.>> the 
        case of a contract modification approved in order to facilitate 
        the transfer, as described in subsection (c)(1)(B)(iii), of land 
        to a beginning farmer or rancher or socially disadvantaged 
        farmer or rancher (in this subsection referred to as a `covered 
        farmer or rancher'), the Secretary shall--
                    ``(A) <<NOTE: Effective date.>> beginning on the 
                date that is 1 year before the date of termination of 
                the contract--
                          ``(i) allow the covered farmer or rancher, in 
                      conjunction with the retired or retiring owner or 
                      operator, to make conservation and land 
                      improvements; and
                          ``(ii) allow the covered farmer or rancher to 
                      begin the certification process under the Organic 
                      Foods Production Act of 1990 (7 U.S.C. 6501 et 
                      seq.);
                    ``(B) beginning on the date of termination of the 
                contract, require the retired or retiring owner or 
                operator to sell or lease (under a long-term lease or a 
                lease with an option to purchase) to the covered farmer 
                or rancher the land subject to the contract for 
                production purposes;
                    ``(C) require the covered farmer or rancher to 
                develop and implement a conservation plan;
                    ``(D) provide to the covered farmer or rancher an 
                opportunity to enroll in the conservation stewardship 
                program or the environmental quality incentives program 
                by not later than the date on which the farmer or 
                rancher takes possession of the land through ownership 
                or lease; and
                    ``(E) continue to make annual payments to the 
                retired or retiring owner or operator for not more than 
                an additional 2 years after the date of termination of 
                the contract, if the retired or retiring owner or 
                operator is not a family member (as defined in section 
                1001A(b)(3)(B) of this Act) of the covered farmer or 
                rancher.
            ``(2) Reenrollment.--The Secretary shall provide a covered 
        farmer or rancher with the option to reenroll any applicable 
        partial field conservation practice that--
                    ``(A) is eligible for enrollment under the 
                continuous signup requirement of section 1231(h)(4)(B); 
                and
                    ``(B) is part of an approved conservation plan.''.

                  Subtitle C--Wetlands Reserve Program

SEC. 2201. ESTABLISHMENT AND PURPOSE OF WETLANDS RESERVE PROGRAM.

    Subsection (a) of section 1237 of the Food Security Act of 1985 (16 
U.S.C. 3837) is amended to read as follows:
    ``(a) Establishment and Purposes.--
            ``(1) Establishment.--The Secretary shall establish a 
        wetlands reserve program to assist owners of eligible lands in 
        restoring and protecting wetlands.

[[Page 122 STAT. 1037]]

            ``(2) Purposes.--The purposes of the wetlands reserve 
        program are to restore, protect, or enhance wetlands on private 
        or tribal lands that are eligible under subsections (c) and 
        (d).''.
SEC. 2202. MAXIMUM ENROLLMENT AND ENROLLMENT METHODS.

    Section 1237(b) of the Food Security Act of 1985 (16 U.S.C. 3837(b)) 
is amended--
            (1) by striking paragraph (1) and inserting the following 
        new paragraph:
            ``(1) Maximum enrollment.--The total number of acres 
        enrolled in the wetlands reserve program shall not exceed 
        3,041,200 acres.'';
            (2) in paragraph (2), by striking ``The Secretary'' and 
        inserting ``Subject to paragraph (3), the Secretary''; and
            (3) by adding at the end the following new paragraph:
            ``(3) Acreage owned by <<NOTE: Contracts.>> indian tribes.--
        In the case of acreage owned by an Indian tribe, the Secretary 
        shall enroll acreage into the wetlands reserve program through 
        the use of--
                    ``(A) a 30-year contract (the value of which shall 
                be equivalent to the value of a 30-year easement);
                    ``(B) restoration cost-share agreements; or
                    ``(C) any combination of the options described in 
                subparagraphs (A) and (B).''.
SEC. 2203. DURATION OF WETLANDS RESERVE PROGRAM AND LANDS ELIGIBLE 
                          FOR ENROLLMENT.

    (a) In General.--Section 1237(c) of the Food Security Act of 1985 
(16 U.S.C. 3837(c)) is amended--
            (1) in the matter preceding paragraph (1)--
                    (A) by striking ``2007 calendar'' and inserting 
                ``2012 fiscal''; and
                    (B) by inserting ``private or tribal'' before 
                ``land'' the second place it appears;
            (2) by striking paragraph (2) and inserting the following 
        new paragraph:
            ``(2) such land is--
                    ``(A) farmed wetland or converted wetland, together 
                with the adjacent land that is functionally dependent on 
                the wetlands, except that converted wetland with respect 
                to which the conversion was not commenced prior to 
                December 23, 1985, shall not be eligible to be enrolled 
                in the program under this section; or
                    ``(B) cropland or grassland that was used for 
                agricultural production prior to flooding from the 
                natural overflow of a closed basin lake or pothole, as 
                determined by the Secretary, together (where 
                practicable) with the adjacent land that is functionally 
                dependent on the cropland or grassland; and''.

    (b) Change of Ownership.--Section 1237E(a) of the Food Security Act 
of 1985 (16 U.S.C. 3837e(a)) is amended by striking ``in the preceding 
12 months'' and inserting ``during the preceding 7-year period''.
    (c) Annual Survey and Reallocation.--Section 1237F of the Food 
Security Act of 1985 (16 U.S.C. 3837f) is amended by adding at the end 
the following new subsection:
    ``(c) Prairie Pothole Region Survey and Reallocation.--

[[Page 122 STAT. 1038]]

            ``(1) Survey.--The Secretary shall conduct a survey during 
        fiscal year 2008 and each subsequent fiscal year for the purpose 
        of determining interest and allocations for the Prairie Pothole 
        Region to enroll eligible land described in section 
        1237(c)(2)(B).
            ``(2) Annual adjustment.--The Secretary shall make an 
        adjustment to the allocation for an interested State for a 
        fiscal year, based on the results of the survey conducted under 
        paragraph (1) for the State during the previous fiscal year.''.
SEC. 2204. TERMS OF WETLANDS RESERVE PROGRAM EASEMENTS.

    Section 1237A(b)(2)(B) of the Food Security Act of 1985 (16 U.S.C. 
3837a(b)(2)(B)) is amended--
            (1) in clause (i), by striking ``or'' at the end;
            (2) in clause (ii), by striking ``; and'' and inserting ``; 
        or''; and
            (3) by adding at the end the following new clause:
                          ``(iii) to meet habitat needs of specific 
                      wildlife species; and''.
SEC. 2205. COMPENSATION FOR EASEMENTS UNDER WETLANDS RESERVE 
                          PROGRAM.

    Subsection (f) of section 1237A of the Food Security Act of 1985 (16 
U.S.C. 3837a) is amended to read as follows:
    ``(f) Compensation.--
            ``(1) Determination.--Effective on the <<NOTE: Effective 
        date.>> date of the enactment of the Food, Conservation, and 
        Energy Act of 2008, the Secretary shall pay as compensation for 
        a conservation easement acquired under this subchapter the 
        lowest of--
                    ``(A) the fair market value of the land, as 
                determined by the Secretary, using the Uniform Standards 
                of Professional Appraisal Practices or an area-wide 
                market analysis or survey;
                    ``(B) the amount corresponding to a geographical 
                cap, as determined by the Secretary in regulations; or
                    ``(C) the offer made by the landowner.
            ``(2) Form of payment.--Compensation for an easement shall 
        be provided by the Secretary in the form of a cash payment, in 
        an amount determined under paragraph (1) and specified in the 
        easement agreement.
            ``(3) Payment schedule for easements.--
                    ``(A) Easements valued at $500,000 or less.--For 
                easements valued at $500,000 or less, the Secretary may 
                provide easement payments in not more than 30 annual 
                payments.
                    ``(B) Easements in excess of $500,000.--For 
                easements valued at more than $500,000, the Secretary 
                may provide easement payments in at least 5, but not 
                more than 30 annual payments, except that, if the 
                Secretary determines it would further the purposes of 
                the program, the Secretary may make a lump sum payment 
                for such an easement.
            ``(4) Restoration agreement payment limitation.--Payments 
        made to a person or legal entity, directly or indirectly, 
        pursuant to a restoration cost-share agreement under this 
        subchapter may not exceed, in the aggregate, $50,000 per year.
            ``(5) Enrollment procedure.--Lands may be enrolled under 
        this subchapter through the submission of bids under a procedure 
        established by the Secretary.''.

[[Page 122 STAT. 1039]]

SEC. 2206. WETLANDS RESERVE ENHANCEMENT PROGRAM AND RESERVED 
                          RIGHTS PILOT PROGRAM.

    Section 1237A of the Food Security Act of 1985 (16 U.S.C. 3837a) is 
amended by adding at the end the following new subsection:
    ``(h) Wetlands Reserve Enhancement Program.--
            ``(1) Program authorized.--The Secretary may enter into 1 or 
        more agreements with a State (including a political subdivision 
        or agency of a State), nongovernmental organization, or Indian 
        tribe to carry out a special wetlands reserve enhancement 
        program that the Secretary determines would advance the purposes 
        of this subchapter.
            ``(2) Reserved rights pilot program.--
                    ``(A) Reservation of grazing rights.--As part of the 
                wetlands reserve enhancement program, the Secretary 
                shall carry out a pilot program for land in which a 
                landowner may reserve grazing rights in the warranty 
                easement deed restriction if the Secretary determines 
                that the reservation and use of the grazing rights--
                          ``(i) is compatible with the land subject to 
                      the easement;
                          ``(ii) is consistent with the long-term 
                      wetland protection and enhancement goals for which 
                      the easement was established; and
                          ``(iii) complies with a conservation plan.
                    ``(B) Duration.--The pilot program established under 
                this paragraph shall terminate on September 30, 2012.''.
SEC. 2207. DUTIES OF SECRETARY OF AGRICULTURE UNDER WETLANDS 
                          RESERVE PROGRAM.

    Section 1237C of the Food Security Act of 1985 (16 U.S.C. 3837c) is 
amended--
            (1) in subsection (a)(1), by inserting ``including necessary 
        maintenance activities,'' after ``values,''; and
            (2) by striking subsection (c) and inserting the following 
        new subsection:

    ``(c) Ranking of Offers.--
            ``(1) Conservation benefits and funding considerations.--
        When evaluating offers from landowners, the Secretary may 
        consider--
                    ``(A) the conservation benefits of obtaining an 
                easement or other interest in the land;
                    ``(B) the cost-effectiveness of each easement or 
                other interest in eligible land, so as to maximize the 
                environmental benefits per dollar expended; and
                    ``(C) whether the landowner or another person is 
                offering to contribute financially to the cost of the 
                easement or other interest in the land to leverage 
                Federal funds.
            ``(2) Additional considerations.--In determining the 
        acceptability of easement offers, the Secretary may take into 
        consideration--
                    ``(A) the extent to which the purposes of the 
                easement program would be achieved on the land;
                    ``(B) the productivity of the land; and
                    ``(C) the on-farm and off-farm environmental threats 
                if the land is used for the production of agricultural 
                commodities.''.

[[Page 122 STAT. 1040]]

SEC. 2208. PAYMENT LIMITATIONS UNDER WETLANDS RESERVE CONTRACTS 
                          AND AGREEMENTS.

    Section 1237D(c)(1) of the Food Security Act of 1985 (16 U.S.C. 
3837d(c)(1)) is amended--
            (1) by striking ``The total amount of easement payments made 
        to a person'' and inserting ``The total amount of payments that 
        a person or legal entity may receive, directly or indirectly,''; 
        and
            (2) by inserting ``or under 30-year contracts'' before the 
        period at the end.
SEC. 2209. REPEAL OF PAYMENT LIMITATIONS EXCEPTION FOR STATE 
                          AGREEMENTS FOR WETLANDS RESERVE 
                          ENHANCEMENT.

    Section 1237D(c) of the Food Security Act of 1985 (16 U.S.C. 
3837d(c)) is amended by striking paragraph (4).
SEC. 2210. REPORT ON IMPLICATIONS OF LONG-TERM NATURE OF 
                          CONSERVATION EASEMENTS.

    (a) Report Required.--Not later than January 1, 2010, 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 evaluates the implications of the 
long-term nature of conservation easements granted under section 1237A 
of the Food Security Act of 1985 (16 U.S.C. 3837a) on resources of the 
Department of Agriculture.
    (b) Inclusions.--The report required by subsection (a) shall include 
the following:
            (1) Data relating to the number and location of conservation 
        easements granted under that section that the Secretary holds or 
        has a significant role in monitoring or managing.
            (2) An assessment of the extent to which the oversight of 
        the conservation easement agreements impacts the availability of 
        resources, including technical assistance.
            (3) An assessment of the uses and value of agreements with 
        partner organizations.
            (4) Any other relevant information relating to costs or 
        other effects that would be helpful to the Committees referred 
        to in subsection (a).

              Subtitle D--Conservation Stewardship Program

SEC. 2301. CONSERVATION STEWARDSHIP PROGRAM.

    (a) Establishment of Program.--Chapter 2 of subtitle D of title XII 
of the Food Security Act of 1985 is amended--
            (1) by redesignating subchapters B (farmland protection 
        program) and C (grassland <<NOTE: 16 USC 3838h et seq., 3838n et 
        seq.>> reserve program) as subchapters C and D, respectively; 
        and
            (2) by inserting after subchapter A the following new 
        subchapter:

            ``Subchapter B--Conservation Stewardship Program

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

    ``In this subchapter:

[[Page 122 STAT. 1041]]

            ``(1) Conservation activities.--
                    ``(A) In general.--The term `conservation 
                activities' means conservation systems, practices, or 
                management measures that are designed to address a 
                resource concern.
                    ``(B) Inclusions.--The term `conservation 
                activities' includes--
                          ``(i) structural measures, vegetative 
                      measures, and land management measures, including 
                      agriculture drainage management systems, as 
                      determined by the Secretary; and
                          ``(ii) planning needed to address a resource 
                      concern.
            ``(2) Conservation measurement tools.--The term 
        `conservation measurement tools' means procedures to estimate 
        the level of environmental benefit to be achieved by a producer 
        in implementing conservation activities, including indices or 
        other measures developed by the Secretary.
            ``(3) Conservation stewardship plan.--The term `conservation 
        stewardship plan' means a plan that--
                    ``(A) identifies and inventories resource concerns;
                    ``(B) establishes benchmark data and conservation 
                objectives;
                    ``(C) describes conservation activities to be 
                implemented, managed, or improved; and
                    ``(D) includes a schedule and evaluation plan for 
                the planning, installation, and management of the new 
                and existing conservation activities.
            ``(4) Priority resource concern.--The term `priority 
        resource concern' means a resource concern that is identified at 
        the State level, in consultation with the State Technical 
        Committee, as a priority for a particular watershed or area of 
        the State.
            ``(5) Program.--The term `program' means the conservation 
        stewardship program established by this subchapter.
            ``(6) Resource concern.--The term `resource concern' means a 
        specific natural resource impairment or problem, as determined 
        by the Secretary, that--
                    ``(A) represents a significant concern in a State or 
                region; and
                    ``(B) is likely to be addressed successfully through 
                the implementation of conservation activities by 
                producers on land eligible for enrollment in the 
                program.
            ``(7) Stewardship threshold.--The term `stewardship 
        threshold' means the level of natural resource conservation and 
        environmental management required, as determined by the 
        Secretary using conservation measurement tools, to improve and 
        conserve the quality and condition of a resource concern.
``SEC. 1238E. <<NOTE: 16 USC 3838e.>>  CONSERVATION STEWARDSHIP 
                            PROGRAM.

    ``(a) Establishment and Purpose.--During each of fiscal years 2009 
through 2012, the Secretary shall carry out a conservation stewardship 
program to encourage producers to address resource concerns in a 
comprehensive manner--
            ``(1) by undertaking additional conservation activities; and
            ``(2) by improving, maintaining and managing existing 
        conservation activities.

    ``(b) Eligible Land.--

[[Page 122 STAT. 1042]]

            ``(1) In general.--Except as provided in subsection (c), the 
        following land is eligible for enrollment in the program:
                    ``(A) Private agricultural land (including cropland, 
                grassland, prairie land, improved pastureland, 
                rangeland, and land used for agro-forestry).
                    ``(B) Agricultural land under the jurisdiction of an 
                Indian tribe.
                    ``(C) Forested land that is an incidental part of an 
                agricultural operation.
                    ``(D) Other private agricultural land (including 
                cropped woodland, marshes, and agricultural land used 
                for the production of livestock) on which resource 
                concerns related to agricultural production could be 
                addressed by enrolling the land in the program, as 
                determined by the Secretary.
            ``(2) Special rule for nonindustrial private forest land.--
        Nonindustrial private forest land is eligible for enrollment in 
        the program, except that not more than 10 percent of the annual 
        acres enrolled nationally in any fiscal year may be 
        nonindustrial private forest land.
            ``(3) Agricultural operation.--Eligible land shall include 
        all acres of an agricultural operation of a producer, whether or 
        not contiguous, that are under the effective control of the 
        producer at the time the producer enters into a stewardship 
        contract, and is operated by the producer with equipment, labor, 
        management, and production or cultivation practices that are 
        substantially separate from other agricultural operations, as 
        determined by the Secretary.

    ``(c) Exclusions.--
            ``(1) Land enrolled in other conservation programs.--Subject 
        to paragraph (2), the following land is not be eligible for 
        enrollment in the program:
                    ``(A) Land enrolled in the conservation reserve 
                program.
                    ``(B) Land enrolled in the wetlands reserve program.
                    ``(C) Land enrolled in the grassland reserve 
                program.
            ``(2) Conversion to cropland.--Land used for crop production 
        after the date of enactment of the Food, Conservation, and 
        Energy Act of 2008 that had not been planted, considered to be 
        planted, or devoted to crop production for at least 4 of the 6 
        years preceding that date shall not be the basis for any payment 
        under the program, unless the land does not meet the requirement 
        because--
                    ``(A) the land had previously been enrolled in the 
                conservation reserve program;
                    ``(B) the land has been maintained using long-term 
                crop rotation practices, as determined by the Secretary; 
                or
                    ``(C) the land is incidental land needed for 
                efficient operation of the farm or ranch, as determined 
                by the Secretary.
``SEC. 1238F. <<NOTE: 16 USC 3838f.>>  STEWARDSHIP CONTRACTS.

    ``(a) Submission of Contract Offers.--To be eligible to participate 
in the conservation stewardship program, a producer shall submit to the 
Secretary for approval a contract offer that--
            ``(1) demonstrates to the satisfaction of the Secretary that 
        the producer, at the time of the contract offer, is meeting

[[Page 122 STAT. 1043]]

        the stewardship threshold for at least one resource concern; and
            ``(2) would, at a minimum, meet or exceed the stewardship 
        threshold for at least 1 priority resource concern by the end of 
        the stewardship contract by--
                    ``(A) installing and adopting additional 
                conservation activities; and
                    ``(B) improving, maintaining, and managing 
                conservation activities in place at the operation of the 
                producer at the time the contract offer is accepted by 
                the Secretary.

    ``(b) Evaluation of Contract Offers.--
            ``(1) Ranking of applications.--In evaluating contract 
        offers made by producers to enter into contracts under the 
        program, the Secretary shall rank applications based on--
                    ``(A) the level of conservation treatment on all 
                applicable priority resource concerns at the time of 
                application, based to the maximum extent practicable on 
                conservation measurement tools;
                    ``(B) the degree to which the proposed conservation 
                treatment on applicable priority resource concerns 
                effectively increases conservation performance, based to 
                the maximum extent possible on conservation measurement 
                tools;
                    ``(C) the number of applicable priority resource 
                concerns proposed to be treated to meet or exceed the 
                stewardship threshold by the end of the contract;
                    ``(D) the extent to which other resource concerns, 
                in addition to priority resource concerns, will be 
                addressed to meet or exceed the stewardship threshold by 
                the end of the contract period; and
                    ``(E) the extent to which the actual and anticipated 
                environmental benefits from the contract are provided at 
                the least cost relative to other similarly beneficial 
                contract offers.
            ``(2) Prohibition.--The Secretary may not assign a higher 
        priority to any application because the applicant is willing to 
        accept a lower payment than the applicant would otherwise be 
        eligible to receive.
            ``(3) Additional criteria.--The Secretary may develop and 
        use such additional criteria for evaluating applications to 
        enroll in the program that the Secretary determines are 
        necessary to ensure that national, State, and local conservation 
        priorities are effectively addressed.

    ``(c) Entering Into Contracts.--After a determination that a 
producer is eligible for the program under subsection (a), and a 
determination that the contract offer ranks sufficiently high under the 
evaluation criteria under subsection (b), the Secretary shall enter into 
a conservation stewardship contract with the producer to enroll the land 
to be covered by the contract.
    ``(d) Contract Provisions.--
            ``(1) Term.--A conservation stewardship contract shall be 
        for a term of 5 years.
            ``(2) Provisions.--The conservation stewardship contract of 
        a producer shall--
                    ``(A) state the amount of the payment the Secretary 
                agrees to make to the producer for each year of the 
                conservation stewardship contract under section 
                1238G(e);

[[Page 122 STAT. 1044]]

                    ``(B) require the producer--
                          ``(i) to implement during the term of the 
                      conservation stewardship contract the conservation 
                      stewardship plan approved by the Secretary;
                          ``(ii) 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 
                      stewardship contract; and
                          ``(iii) not to engage in any activity during 
                      the term of the conservation stewardship contract 
                      on the eligible land covered by the contract that 
                      would interfere with the purposes of the 
                      conservation stewardship contract;
                    ``(C) permit all economic uses of the land that--
                          ``(i) maintain the agricultural nature of the 
                      land; and
                          ``(ii) are consistent with the conservation 
                      purposes of the conservation stewardship contract;
                    ``(D) include a provision to ensure that a producer 
                shall not be considered in violation of the contract for 
                failure to comply with the contract due to circumstances 
                beyond the control of the producer, including a disaster 
                or related condition, as determined by the Secretary; 
                and
                    ``(E) include such other provisions as the Secretary 
                determines necessary to ensure the purposes of the 
                program are achieved.

    ``(e) Contract Renewal.--At the end of an initial conservation 
stewardship contract of a producer, the Secretary may allow the producer 
to renew the contract for one additional five-year period if the 
producer--
            ``(1) demonstrates compliance with the terms of the existing 
        contract; and
            ``(2) agrees to adopt new conservation activities, as 
        determined by the Secretary.

    ``(f) Modification.--The Secretary may allow a producer to modify a 
stewardship contract if the Secretary determines that the modification 
is consistent with achieving the purposes of the program.
    ``(g) Contract Termination.--
            ``(1) Voluntary termination.--A producer may terminate a 
        conservation stewardship contract if the Secretary determines 
        that termination would not defeat the purposes of the program.
            ``(2) Involuntary termination.--The Secretary may terminate 
        a contract under this subchapter if the Secretary determines 
        that the producer violated the contract.
            ``(3) Repayment.--If a contract is terminated, the Secretary 
        may, consistent with the purposes of the program--
                    ``(A) allow the producer to retain payments already 
                received under the contract; or
                    ``(B) require repayment, in whole or in part, of 
                payments already received and assess liquidated damages.
            ``(4) Change of interest in land subject to a contract.--
                    ``(A) In general.--Except as provided in paragraph 
                (B), a change in the interest of a producer in land 
                covered by a contract under this chapter shall result in 
                the termination of the contract with regard to that 
                land.

[[Page 122 STAT. 1045]]

                    ``(B) Transfer of duties and rights.--Subparagraph 
                (A) shall not apply if--
                          ``(i) within a reasonable period of time (as 
                      determined by the Secretary) after the date of the 
                      change in the interest in land covered by a 
                      contract under the program, the transferee of the 
                      land provides written notice to the Secretary that 
                      all duties and rights under the contract have been 
                      transferred to, and assumed by, the transferee; 
                      and
                          ``(ii) the transferee meets the eligibility 
                      requirements of the program.

    ``(h) Coordination With Organic Certification.--The Secretary shall 
establish a transparent means by which producers may initiate organic 
certification under the Organic Foods Production Act of 1990 (7 U.S.C. 
6501 et. seq.) while participating in a contract under this subchapter.
    ``(i) On-Farm Research and Demonstration or Pilot Testing.--The 
Secretary may approve a contract offer under this subchapter that 
includes--
            ``(1) on-farm conservation research and demonstration 
        activities; and
            ``(2) pilot testing of new technologies or innovative 
        conservation practices.
``SEC. 1238G. <<NOTE: 16 USC 3838g.>>  DUTIES OF THE SECRETARY.

    ``(a) In General.--To achieve the conservation goals of a contract 
under the conservation stewardship program, the Secretary shall--
            ``(1) make the program available to eligible producers on a 
        continuous enrollment basis with 1 or more ranking periods, one 
        of which shall occur in the first quarter of each fiscal year;
            ``(2) identify not less than 3 nor more than 5 priority 
        resource concerns in a particular watershed or other appropriate 
        region or area within a State; and
            ``(3) develop reliable conservation measurement tools for 
        purposes of carrying out the program.

    ``(b) Allocation to States.--The Secretary shall allocate acres to 
States for enrollment, based--
            ``(1) primarily on each State's proportion of eligible acres 
        under section 1238E(b)(1) to the total number of eligible acres 
        in all States; and
            ``(2) also on consideration of--
                    ``(A) the extent and magnitude of the conservation 
                needs associated with agricultural production in each 
                State;
                    ``(B) the degree to which implementation of the 
                program in the State is, or will be, effective in 
                helping producers address those needs; and
                    ``(C) other considerations to achieve equitable 
                geographic distribution of funds, as determined by the 
                Secretary.

    ``(c) Specialty Crop and Organic Producers.--The Secretary shall 
ensure that outreach and technical assistance are available, and program 
specifications are appropriate to enable specialty crop and organic 
producers to participate in the program.

[[Page 122 STAT. 1046]]

    ``(d) Acreage Enrollment <<NOTE: Time period.>> Limitation.--During 
the period beginning on October 1, 2008, and ending on September 30, 
2017, the Secretary shall, to the maximum extent practicable--
            ``(1) enroll in the program an additional 12,769,000 acres 
        for each fiscal year; and
            ``(2) manage the program to achieve a national average rate 
        of $18 per acre, which shall include the costs of all financial 
        assistance, technical assistance, and any other expenses 
        associated with enrollment or participation in the program.

    ``(e) Conservation Stewardship Payments.--
            ``(1) Availability of payments.--The Secretary shall provide 
        a payment under the program to compensate the producer for--
                    ``(A) installing and adopting additional 
                conservation activities; and
                    ``(B) improving, maintaining, and managing 
                conservation activities in place at the operation of the 
                producer at the time the contract offer is accepted by 
                the Secretary.
            ``(2) Payment amount.--The amount of the conservation 
        stewardship payment shall be determined by the Secretary and 
        based, to the maximum extent practicable, on the following 
        factors:
                    ``(A) Costs incurred by the producer associated with 
                planning, design, materials, installation, labor, 
                management, maintenance, or training.
                    ``(B) Income forgone by the producer.
                    ``(C) Expected environmental benefits as determined 
                by conservation measurement tools.
            ``(3) Exclusions.--A payment to a producer under this 
        subsection shall not be provided for--
                    ``(A) the design, construction, or maintenance of 
                animal waste storage or treatment facilities or 
                associated waste transport or transfer devices for 
                animal feeding operations; or
                    ``(B) conservation activities for which there is no 
                cost incurred or income forgone to the producer.
            ``(4) Timing of payments.--
                    ``(A) In general.--The Secretary shall make payments 
                as soon as practicable after October 1 of each fiscal 
                year for activities carried out in the previous fiscal 
                year.
                    ``(B) Additional activities.--The Secretary shall 
                make payments to compensate producers for installation 
                of additional practices at the time at which the 
                practices are installed and adopted.

    ``(f) Supplemental Payments for Resource-Conserving Crop 
Rotations.--
            ``(1) Availability of payments.--The Secretary shall provide 
        additional payments to producers that, in participating in the 
        program, agree to adopt resource-conserving crop rotations to 
        achieve beneficial crop rotations as appropriate for the land of 
        the producers.
            ``(2) Beneficial crop rotations.--The Secretary shall 
        determine whether a resource-conserving crop rotation is a 
        beneficial crop rotation eligible for additional payments under 
        paragraph (1), based on whether the resource-conserving crop 
        rotation is designed to provide natural resource conservation 
        and production benefits.

[[Page 122 STAT. 1047]]

            ``(3) Eligibility.--To be eligible to receive a payment 
        described in paragraph (1), a producer shall agree to adopt and 
        maintain beneficial resource-conserving crop rotations for the 
        term of the contract.
            ``(4) Resource-conserving crop rotation.--In this 
        subsection, 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.

    ``(g) Payment Limitations.--A person or legal entity may not 
receive, directly or indirectly, payments under this subchapter that, in 
the aggregate, exceed $200,000 for all contracts entered into during any 
5-year period, excluding funding arrangements with federally recognized 
Indian tribes or Alaska Native corporations, regardless of the number of 
contracts entered into under the program by the person or entity.
    ``(h) Regulations.--The Secretary shall promulgate regulations 
that--
            ``(1) prescribe such other rules as the Secretary determines 
        to be necessary to ensure a fair and reasonable application of 
        the limitations established under subsection (g); and
            ``(2) otherwise enable the Secretary to carry out the 
        program.

    ``(i) Data.--The <<NOTE: Contracts.>> Secretary shall maintain 
detailed and segmented data on contracts and payments under the program 
to allow for quantification of the amount of payments made for--
            ``(1) the installation and adoption of additional 
        conservation activities and improvements to conservation 
        activities in place on the operation of a producer at the time 
        the conservation stewardship offer is accepted by the Secretary;
            ``(2) participation in research, demonstration, and pilot 
        projects; and
            ``(3) the development and periodic assessment and evaluation 
        of conservation plans developed under this subchapter.''.

    (b) Termination of Conservation Security Program Authority; Effect 
on Existing Contracts.--Section 1238A of the Food Security Act of 1985 
(16 U.S.C. 3838a) is amended by adding at the end the following new 
subsection:
    ``(g) Prohibition on Conservation Security Program Contracts; Effect 
on Existing Contracts.--
            ``(1) Prohibition.--A conservation security contract may not 
        be entered into or renewed under this subchapter after September 
        30, 2008.
            ``(2) Exception.--This subchapter, and the terms and 
        conditions of the conservation security program, shall continue 
        to apply to--
                    ``(A) conservation security contracts entered into 
                on or before September 30, 2008; and
                    ``(B) any conservation security contract entered 
                into after that date, but for which the application for 
                the contract was received during the 2008 sign-up 
                period.

[[Page 122 STAT. 1048]]

            ``(3) Effect on payments.--The Secretary shall make payments 
        under this subchapter with respect to conservation security 
        contracts described in paragraph (2) during the remaining term 
        of the contracts.
            ``(4) Regulations.--A contract described in paragraph (2) 
        may not be administered under the regulations issued to carry 
        out the conservation stewardship program.''.

    (c) Reference to Redesignated Subchapter.--Section 1238A(b)(3)(C) of 
title XII of the Food Security Act of 1985 (16 U.S.C. 3838a(b)(3)(C)) is 
amended by striking ``subchapter C'' and inserting ``subchapter D''.

          Subtitle E--Farmland Protection and Grassland Reserve

SEC. 2401. FARMLAND PROTECTION PROGRAM.

    (a) Definitions.--Section 1238H of the Food Security Act of 1985 (16 
U.S.C. 3838h) is amended--
            (1) by striking paragraph (1) and inserting the following 
        new paragraph:
            ``(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; and
                          ``(iii) is--
                                    ``(I) described in paragraph (1) or 
                                (2) of section 509(a) of that Code; or
                                    ``(II) described in section 
                                509(a)(3), and is controlled by an 
                                organization described in section 
                                509(a)(2), of that Code.''; and
            (2) in paragraph (2)--
                    (A) in subparagraph (A)--
                          (i) by striking ``that--'' and inserting 
                      ``that is subject to a pending offer for purchase 
                      from an eligible entity and--''; and
                          (ii) by striking clauses (i) and (ii) and 
                      inserting the following new clauses:
                          ``(i) has prime, unique, or other productive 
                      soil;
                          ``(ii) contains historical or archaeological 
                      resources; or
                          ``(iii) the protection of which will further a 
                      State or local policy consistent with the purposes 
                      of the program.''; and
                    (B) in subparagraph (B)--
                          (i) in clause (iv), by striking ``and'' at the 
                      end; and

[[Page 122 STAT. 1049]]

                          (ii) by striking clause (v) and inserting the 
                      following new clauses:
                          ``(v) forest land that--
                                    ``(I) contributes to the economic 
                                viability of an agricultural operation; 
                                or
                                    ``(II) serves as a buffer to protect 
                                an agricultural operation from 
                                development; and
                          ``(vi) land that is incidental to land 
                      described in clauses (i) through (v), if such land 
                      is necessary for the efficient administration of a 
                      conservation easement, as determined by the 
                      Secretary.''.

    (b) Farmland Protection.--Section 1238I of the Food Security Act of 
1985 (16 U.S.C. 3838i) is amended to read as follows:
``SEC. 1238I. FARMLAND PROTECTION PROGRAM.

    ``(a) Establishment.--The Secretary shall establish and carry out a 
farmland protection program under which the Secretary shall facilitate 
and provide funding for the purchase of conservation easements or other 
interests in eligible land.
    ``(b) Purpose.--The purpose of the program is to protect the 
agricultural use and related conservation values of eligible land by 
limiting nonagricultural uses of that land.
    ``(c) Cost-Share Assistance.--
            ``(1) Provision of assistance.--The Secretary shall provide 
        cost-share assistance to eligible entities for purchasing a 
        conservation easement or other interest in eligible land.
            ``(2) Federal share.--The share of the cost provided by the 
        Secretary for purchasing a conservation easement or other 
        interest in eligible land shall not exceed 50 percent of the 
        appraised fair market value of the conservation easement or 
        other interest in eligible land.
            ``(3) Non-federal share.--
                    ``(A) Share provided by eligible entity.--The 
                eligible entity shall provide a share of the cost of 
                purchasing a conservation easement or other interest in 
                eligible land in an amount that is not less than 25 
                percent of the acquisition purchase price.
                    ``(B) Landowner contribution.--As part of the non-
                Federal share of the cost of purchasing a conservation 
                easement or other interest in eligible land, an eligible 
                entity may include a charitable donation or qualified 
                conservation contribution (as defined by section 170(h) 
                of the Internal Revenue Code of 1986) from the private 
                landowner from which the conservation easement or other 
                interest in land will be purchased.

    ``(d) Determination of <<NOTE: Effective date.>> Fair Market 
Value.--Effective on the date of enactment of the Food, Conservation, 
and Energy Act of 2008, the fair market value of the conservation 
easement or other interest in eligible land shall be determined on the 
basis of an appraisal using an industry approved method, selected by the 
eligible entity and approved by the Secretary.

    ``(e) Bidding Down Prohibited.--If the Secretary determines that 2 
or more applications for cost-share assistance are comparable in 
achieving the purpose of the program, the Secretary shall not assign a 
higher priority to any 1 of those applications solely on the basis of 
lesser cost to the program.
    ``(f) Condition on Assistance.--

[[Page 122 STAT. 1050]]

            ``(1) Conservation plan.--Any highly erodible cropland for 
        which a conservation easement or other interest is purchased 
        using cost-share assistance provided under the program shall be 
        subject to a conservation plan that requires, at the option of 
        the Secretary, the conversion of the cropland to less intensive 
        uses.
            ``(2) Contingent right of enforcement.--The Secretary shall 
        require the inclusion of a contingent right of enforcement for 
        the Secretary in the terms of a conservation easement or other 
        interest in eligible land that is purchased using cost-share 
        assistance provided under the program.

    ``(g) Agreements With Eligible Entities.--
            ``(1) In general.--The Secretary shall enter into agreements 
        with eligible entities to stipulate the terms and conditions 
        under which the eligible entity is permitted to use cost-share 
        assistance provided under subsection (c).
            ``(2) Length of agreements.--An agreement under this 
        subsection shall be for a term that is--
                    ``(A) in the case of an eligible entity certified 
                under the process described in subsection (h), a minimum 
                of five years; and
                    ``(B) for all other eligible entities, at least 
                three, but not more than five years.
            ``(3) Substitution of qualified projects.--An agreement 
        shall allow, upon mutual agreement of the parties, substitution 
        of qualified projects that are identified at the time of the 
        proposed substitution.
            ``(4) Minimum requirements.--An eligible entity shall be 
        authorized to use its own terms and conditions, as approved by 
        the Secretary, for conservation easements and other purchases of 
        interests in land, so long as such terms and conditions--
                    ``(A) are consistent with the purposes of the 
                program;
                    ``(B) permit effective enforcement of the 
                conservation purposes of such easements or other 
                interests; and
                    ``(C) include a limit on the impervious surfaces to 
                be allowed that is consistent with the agricultural 
                activities to be conducted.
            ``(5) Effect of violation.--If a violation occurs of a term 
        or condition of an agreement entered into under this 
        subsection--
                    ``(A) the agreement shall remain in force; and
                    ``(B) the Secretary may require the eligible entity 
                to refund all or part of any payments received by the 
                entity under the program, with interest on the payments 
                as determined appropriate by the Secretary.

    ``(h) Certification of Eligible Entities.--
            ``(1) Certification process.--The Secretary shall establish 
        a process under which the Secretary may--
                    ``(A) directly certify eligible entities that meet 
                established criteria;
                    ``(B) enter into long-term agreements with certified 
                entities, as authorized by subsection (g)(2)(A); and
                    ``(C) accept proposals for cost-share assistance to 
                certified entities for the purchase of conservation 
                easements or other interests in eligible land throughout 
                the duration of such agreements.

[[Page 122 STAT. 1051]]

            ``(2) Certification criteria.--In order to be certified, an 
        eligible entity shall demonstrate to the Secretary that the 
        entity will maintain, at a minimum, for the duration of the 
        agreement--
                    ``(A) a plan for administering easements that is 
                consistent with the purpose of this subchapter;
                    ``(B) the capacity and resources to monitor and 
                enforce conservation easements or other interests in 
                land; and
                    ``(C) policies and procedures to ensure--
                          ``(i) the long-term integrity of conservation 
                      easements or other interests in eligible land;
                          ``(ii) timely completion of acquisitions of 
                      easements or other interests in eligible land; and
                          ``(iii) timely and complete evaluation and 
                      reporting to the Secretary on the use of funds 
                      provided by the Secretary under the program.
            ``(3) Review and revision.--
                    ``(A) Review.--The Secretary shall conduct a review 
                of eligible entities certified under paragraph (1) every 
                three years to ensure that such entities are meeting the 
                criteria established under paragraph (2).
                    ``(B) Revocation.--If the Secretary finds that the 
                certified entity no longer meets the criteria 
                established under paragraph (2), the Secretary may--
                          ``(i) allow the certified entity a specified 
                      period of time, at a minimum 180 days, in which to 
                      take such actions as may be necessary to meet the 
                      criteria; and
                          ``(ii) revoke the certification of the entity, 
                      if after the specified period of time, the 
                      certified entity does not meet the criteria 
                      established in paragraph (2).''.
SEC. 2402. FARM VIABILITY PROGRAM.

    Section 1238J(b) of the Food Security Act of 1985 (16 U.S.C. 
3838j(b)) is amended by striking ``2007'' and inserting ``2012''.
SEC. 2403. GRASSLAND RESERVE PROGRAM.

    Subchapter D of chapter 2 of subtitle D of title XII of the Food 
Security Act of 1985 (16 U.S.C. 3838n et seq.), as redesignated by 
section 2301(a)(1), is amended to read as follows:

                ``Subchapter D--Grassland Reserve Program

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

    ``(a) Establishment and Purpose.--The Secretary shall establish a 
grassland reserve program (referred to in this subchapter as the 
`program') for the purpose of assisting owners and operators in 
protecting grazing uses and related conservation values by restoring and 
conserving eligible land through rental contracts, easements, and 
restoration agreements.
    ``(b) Enrollment of Acreage.--
            ``(1) Acreage enrolled.--The Secretary shall enroll an 
        additional 1,220,000 acres of eligible land in the program 
        during fiscal years 2009 through 2012.
            ``(2) Methods of enrollment.--The Secretary shall enroll 
        eligible land in the program through the use of;
                    ``(A) a 10-year, 15-year, or 20-year rental 
                contract;
                    ``(B) a permanent easement; or

[[Page 122 STAT. 1052]]

                    ``(C) in a State that imposes a maximum duration for 
                easements, an easement for the maximum duration allowed 
                under the law of that State.
            ``(3) Limitation.--Of the total amount of funds expended 
        under the program to acquire rental contracts and easements 
        described in paragraph (2), the Secretary shall use, to the 
        extent practicable--
                    ``(A) 40 percent for rental contacts; and
                    ``(B) 60 percent for easements.
            ``(4) Enrollment of conservation reserve land.--
                    ``(A) Priority.--Upon expiration of a contract under 
                subchapter B of chapter 1 of this subtitle, the 
                Secretary shall give priority for enrollment in the 
                program to land previously enrolled in the conservation 
                reserve program if--
                          ``(i) the land is eligible land, as defined in 
                      subsection (c); and
                          ``(ii) the Secretary determines that the land 
                      is of high ecological value and under significant 
                      threat of conversion to uses other than grazing.
                    ``(B) Maximum enrollment.--The number of acres of 
                land enrolled under the priority described in 
                subparagraph (A) in a calendar year shall not exceed 10 
                percent of the total number of acres enrolled in the 
                program in that calendar year.

    ``(c) Eligible Land Defined.--For purposes of the program, the term 
`eligible land' means private or tribal land that--
            ``(1) is grassland, land that contains forbs, or shrubland 
        (including improved rangeland and pastureland) for which grazing 
        is the predominant use;
            ``(2) is located in an area that has been historically 
        dominated by grassland, forbs, or shrubland, and the land--
                    ``(A) could provide habitat for animal or plant 
                populations of significant ecological value if the 
                land--
                          ``(i) is retained in its current use; or
                          ``(ii) is restored to a natural condition;
                    ``(B) contains historical or archaeological 
                resources; or
                    ``(C) would address issues raised by State, 
                regional, and national conservation priorities; or
            ``(3) 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 a rental contract 
        or easement under the program.
``SEC. 1238O. <<NOTE: 16 USC 3838o.>>  DUTIES OF OWNERS AND 
                            OPERATORS.

    ``(a) Rental Contracts.--To be eligible to enroll eligible land in 
the program under a rental contract, the owner or operator of the land 
shall agree--
            ``(1) to comply with the terms of the contract and, when 
        applicable, a restoration agreement;
            ``(2) to suspend any existing cropland base and allotment 
        history for the land under another program administered by the 
        Secretary; and
            ``(3) to implement a grazing management plan, as approved by 
        the Secretary, which may be modified upon mutual agreement of 
        the parties.

[[Page 122 STAT. 1053]]

    ``(b) Easements.--To be eligible to enroll eligible land in the 
program through an easement, the owner of the land shall agree--
            ``(1) to grant an easement to the Secretary or to an 
        eligible entity described in section 1238Q;
            ``(2) to create and record an appropriate deed restriction 
        in accordance with applicable State law to reflect the easement;
            ``(3) to provide a written statement of consent to the 
        easement signed by persons holding a security interest or any 
        vested interest in the land;
            ``(4) to provide proof of unencumbered title to the 
        underlying fee interest in the land that is the subject of the 
        easement;
            ``(5) to comply with the terms of the easement and, when 
        applicable, a restoration agreement;
            ``(6) to implement a grazing management plan, as approved by 
        the Secretary, which may be modified upon mutual agreement of 
        the parties; and
            ``(7) to eliminate any existing cropland base and allotment 
        history for the land under another program administered by the 
        Secretary.

    ``(c) Restoration Agreements.--
            ``(1) When applicable.--To be eligible for cost-share 
        assistance to restore eligible land subject to a rental contract 
        or an easement under the program, the owner or operator of the 
        land shall agree to comply with the terms of a restoration 
        agreement.
            ``(2) Terms and conditions.--The Secretary shall prescribe 
        the terms and conditions of a restoration agreement by which 
        eligible land that is subject to a rental contract or easement 
        under the program shall be restored.
            ``(3) Duties.--The restoration agreement shall describe the 
        respective duties of the owner or operator and the Secretary, 
        including the Federal share of restoration payments and 
        technical assistance.

    ``(d) Terms and Conditions Applicable to Rental Contracts and 
Easements.--
            ``(1) Permissible activities.--The terms and conditions of a 
        rental contract or easement under the program shall 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 
                appropriate to that locality;
                    ``(B) haying, mowing, or harvesting for seed 
                production, 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 State 
                Conservationist;
                    ``(C) fire presuppression, rehabilitation, and 
                construction of fire breaks; and
                    ``(D) grazing related activities, such as fencing 
                and livestock watering.
            ``(2) Prohibitions.--The terms and conditions of a rental 
        contract or easement under the program shall prohibit--
                    ``(A) the production of crops (other than hay), 
                fruit trees, vineyards, or any other agricultural 
                commodity that is inconsistent with maintaining grazing 
                land; and

[[Page 122 STAT. 1054]]

                    ``(B) except as permitted under a restoration plan, 
                the conduct of any other activity that would be 
                inconsistent with maintaining grazing land enrolled in 
                the program.
            ``(3) Additional terms and conditions.--A rental contract or 
        easement under the program shall include such additional 
        provisions as the Secretary determines are appropriate to carry 
        out or facilitate the purposes and administration of the 
        program.

    ``(e) Violations.--On a violation of the terms or conditions of a 
rental contract, easement, or restoration agreement entered into under 
this section--
            ``(1) the contract or easement shall remain in force; and
            ``(2) the Secretary may require the owner or operator to 
        refund all or part of any payments received under the program, 
        with interest on the payments as determined appropriate by the 
        Secretary.
``SEC. 1238P. <<NOTE: 16 USC 3838p.>>  DUTIES OF SECRETARY.

    ``(a) Evaluation and Ranking of Applications.--
            ``(1) Criteria.--The Secretary shall establish criteria to 
        evaluate and rank applications for rental contracts and 
        easements under the program .
            ``(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 to 
                uses other than grazing.

    ``(b) Payments.--
            ``(1) In general.--In return for the execution of a rental 
        contract or the granting of an easement by an owner or operator 
        under the program, the Secretary shall--
                    ``(A) make rental contract or easement payments to 
                the owner or operator in accordance with paragraphs (2) 
                and (3); and
                    ``(B) make payments to the owner or operator under a 
                restoration agreement for the Federal share of the cost 
                of restoration in accordance with paragraph (4).
            ``(2) Rental contract payments.--
                    ``(A) Percentage of grazing value of land.--In 
                return for the execution of a rental contract by an 
                owner or operator under the program, the Secretary shall 
                make annual payments during the term of the contract in 
                an amount, subject to subparagraph (B), that is not more 
                than 75 percent of the grazing value of the land covered 
                by the contract.
                    ``(B) Payment limitation.--Payments made under 1 or 
                more rental contracts to a person or legal entity, 
                directly or indirectly, may not exceed, in the 
                aggregate, $50,000 per year.
            ``(3) Easement payments.--
                    ``(A) In general.--Subject to subparagraph (B), in 
                return for the granting of an easement by an owner under 
                the program, the Secretary shall make easement payments 
                in an amount not to exceed the fair market value of the

[[Page 122 STAT. 1055]]

                land less the grazing value of the land encumbered by 
                the easement.
                    ``(B) Method for determination of compensation.--In 
                making a determination under subparagraph (A), the 
                Secretary shall pay as compensation for a easement 
                acquired under the program the lowest of--
                          ``(i) the fair market value of the land 
                      encumbered by the easement, as determined by the 
                      Secretary, using--
                                    ``(I) the Uniform Standards of 
                                Professional Appraisal Practices; or
                                    ``(II) an area-wide market analysis 
                                or survey;
                          ``(ii) the amount corresponding to a 
                      geographical cap, as determined by the Secretary 
                      in regulations; or
                          ``(iii) the offer made by the landowner.
                    ``(C) Schedule.--Easement payments may be provided 
                in up to 10 annual payments of equal or unequal amount, 
                as agreed to by the Secretary and the owner.
            ``(4) Restoration agreement payments.--
                    ``(A) Federal share of restoration.--The Secretary 
                shall make payments to an owner or operator under a 
                restoration agreement of not more than 50 percent of the 
                costs of carrying out measures and practices necessary 
                to restore functions and values of that land.
                    ``(B) Payment limitation.--Payments made under 1 or 
                more restoration agreements to a person or legal entity, 
                directly or indirectly, may not exceed, in the 
                aggregate, $50,000 per year.
            ``(5) Payments to others.--If an owner or operator who is 
        entitled to a payment under the program 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 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 OF DUTY.

    ``(a) Authority to Delegate.--The Secretary may delegate a duty 
under the program--
            ``(1) by transferring title of ownership to an easement to 
        an eligible entity to hold and enforce; or
            ``(2) by entering into a cooperative agreement with an 
        eligible entity for the eligible entity to own, write, and 
        enforce an easement.

    ``(b) Eligible Entity Defined.--In this section, the term `eligible 
entity' means--
            ``(1) an agency of State or local government or an Indian 
        tribe; or
            ``(2) an organization that--
                    ``(A) is organized for, and at all times since the 
                formation of the organization has been operated 
                principally for, one 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;

[[Page 122 STAT. 1056]]

                    ``(B) is an organization described in section 
                501(c)(3) of that Code that is exempt from taxation 
                under section 501(a) of that Code; and
                    ``(C) is described in--
                          ``(i) paragraph (1) or (2) of section 509(a) 
                      of that Code; or
                          ``(ii) in section 509(a)(3) of that Code, and 
                      is controlled by an organization described in 
                      section 509(a)(2) of that Code.

    ``(c) Transfer of Title of Ownership.--
            ``(1) Transfer.--The Secretary may transfer title of 
        ownership to an easement to an eligible entity to hold and 
        enforce, in lieu of the Secretary, subject to the right of the 
        Secretary to conduct periodic inspections and enforce the 
        easement, if--
                    ``(A) the Secretary determines that the transfer 
                will promote protection of grassland, land that contains 
                forbs, or shrubland;
                    ``(B) the owner authorizes the eligible entity to 
                hold or enforce the easement; and
                    ``(C) the eligible entity 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 eligible 
                entity.
            ``(2) Application.--An eligible entity that seeks to hold 
        and enforce an easement shall apply to the Secretary for 
        approval.
            ``(3) Approval by secretary.--The Secretary may approve an 
        application described in paragraph (2) if the eligible entity--
                    ``(A) has the relevant experience necessary, as 
                appropriate for the application, to administer an 
                easement on grassland, land that contains forbs, or 
                shrubland;
                    ``(B) has a charter that describes a commitment to 
                conserving ranchland, agricultural land, or grassland 
                for grazing and conservation purposes; and
                    ``(C) has the resources necessary to effectuate the 
                purposes of the charter.

    ``(d) Cooperative Agreements.--
            ``(1) Authorized; terms and conditions.--The Secretary shall 
        establish the terms and conditions of a cooperative agreement 
        under which an eligible entity shall use funds provided by the 
        Secretary to own, write, and enforce an easement, in lieu of the 
        Secretary.
            ``(2) Minimum requirements.--At a minimum, the cooperative 
        agreement shall--
                    ``(A) specify the qualification of the eligible 
                entity to carry out the entity's responsibilities under 
                the program, including acquisition, monitoring, 
                enforcement, and implementation of management policies 
                and procedures that ensure the long-term integrity of 
                the easement protections;
                    ``(B) require the eligible entity 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 eligible entity;
                    ``(C) specify the right of the Secretary to conduct 
                periodic inspections to verify the eligible entity's 
                enforcement of the easement;

[[Page 122 STAT. 1057]]

                    ``(D) subject to subparagraph (E), identify a 
                specific project or a range of projects to be funded 
                under the agreement;
                    ``(E) allow, upon mutual agreement of the parties, 
                substitution of qualified projects that are identified 
                at the time of substitution;
                    ``(F) specify the manner in which the eligible 
                entity will evaluate and report the use of funds to the 
                Secretary;
                    ``(G) allow the eligible entity flexibility to 
                develop and use terms and conditions for easements, if 
                the Secretary finds the terms and conditions consistent 
                with the purposes of the program and adequate to enable 
                effective enforcement of the easements;
                    ``(H) if applicable, allow an eligible entity to 
                include a charitable donation or qualified conservation 
                contribution (as defined by section 170(h) of the 
                Internal Revenue Code of 1986) from the landowner from 
                which the easement will be purchased as part of the 
                entity's share of the cost to purchase an easement; and
                    ``(I) provide for a schedule of payments to an 
                eligible entity, as agreed to by the Secretary and the 
                eligible entity.
            ``(3) Cost sharing.--
                    ``(A) In general.--As part of a cooperative 
                agreement with an eligible entity under this subsection, 
                the Secretary may provide a share of the purchase price 
                of an easement under the program.
                    ``(B) Minimum share by eligible entity.--The 
                eligible entity shall be required to provide a share of 
                the purchase price at least equivalent to that provided 
                by the Secretary.
                    ``(C) Priority.--The Secretary may accord a higher 
                priority to proposals from eligible entities that 
                leverage a greater share of the purchase price of the 
                easement.
            ``(4) Violation.--If an eligible entity violates the terms 
        or conditions of a cooperative agreement entered into under this 
        subsection--
                    ``(A) the cooperative agreement shall remain in 
                force; and
                    ``(B) the Secretary may require the eligible entity 
                to refund all or part of any payments received by the 
                eligible entity under the program, with interest on the 
                payments as determined appropriate by the Secretary.

    ``(e) Protection of Federal Investment.--When delegating a duty 
under this section, the Secretary shall ensure that the terms of an 
easement include a contingent right of enforcement for the 
Department.''.

          Subtitle F--Environmental Quality Incentives Program

SEC. 2501. PURPOSES OF ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.

    (a) Revised Purposes.--Section 1240 of the Food Security Act of 1985 
(16 U.S.C. 3839aa) is amended--
            (1) in the matter preceding paragraph (1), by inserting ``, 
        forest management,'' after ``agricultural production''; and

[[Page 122 STAT. 1058]]

            (2) by striking paragraphs (3) and (4) and inserting the 
        following new paragraphs:
            ``(3) providing flexible assistance to producers to install 
        and maintain conservation practices that sustain food and fiber 
        production while--
                    ``(A) enhancing soil, water, and related natural 
                resources, including grazing land, forestland, wetland, 
                and wildlife; and
                    ``(B) conserving energy;
            ``(4) assisting producers to make beneficial, cost effective 
        changes to production systems (including conservation practices 
        related to organic production), grazing management, fuels 
        management, forest management, nutrient management associated 
        with livestock, pest or irrigation management, or other 
        practices on agricultural and forested land; and''.

    (b) Technical Correction.--The Food Security Act of 1985 is amended 
by inserting immediately before section 1240 (16 U.S.C. 3839aa) the 
following:

        ``CHAPTER 4--ENVIRONMENTAL QUALITY INCENTIVES PROGRAM''.

SEC. 2502. DEFINITIONS.

    Section 1240A of the Food Security Act of 1985 (16 U.S.C. 3839aa-1) 
is amended to read as follows:
``SEC. 1240A. DEFINITIONS.

    ``In this chapter:
            ``(1) Eligible land.--
                    ``(A) In general.--The term `eligible land' means 
                land on which agricultural commodities, livestock, or 
                forest-related products are produced.
                    ``(B) Inclusions.--The term `eligible land' includes 
                the following:
                          ``(i) Cropland.
                          ``(ii) Grassland.
                          ``(iii) Rangeland.
                          ``(iv) Pasture land.
                          ``(v) Nonindustrial private forest land.
                          ``(vi) Other agricultural land (including 
                      cropped woodland, marshes, and agricultural land 
                      used for the production of livestock) on which 
                      resource concerns related to agricultural 
                      production could be addressed through a contract 
                      under the program, as determined by the Secretary.
            ``(2) National organic program.--The term `national organic 
        program' means the national organic program established under 
        the Organic Foods Production Act of 1990 (7 U.S.C. 6501 et. 
        seq.).
            ``(3) Organic system plan.--The term `organic system plan' 
        means an organic plan approved under the national organic 
        program.
            ``(4) Payment.--The term `payment' means financial 
        assistance provided to a producer for performing practices under 
        this chapter, including compensation for--

[[Page 122 STAT. 1059]]

                    ``(A) incurred costs associated with planning, 
                design, materials, equipment, installation, labor, 
                management, maintenance, or training; and
                    ``(B) income forgone by the producer.
            ``(5) Practice.--The term `practice' means 1 or more 
        improvements and conservation activities that are consistent 
        with the purposes of the program under this chapter, as 
        determined by the Secretary, including--
                    ``(A) improvements to eligible land of the producer, 
                including--
                          ``(i) structural practices;
                          ``(ii) land management practices;
                          ``(iii) vegetative practices;
                          ``(iv) forest management; and
                          ``(v) other practices that the Secretary 
                      determines would further the purposes of the 
                      program; and
                    ``(B) conservation activities involving the 
                development of plans appropriate for the eligible land 
                of the producer, including--
                          ``(i) comprehensive nutrient management 
                      planning; and
                          ``(ii) other plans that the Secretary 
                      determines would further the purposes of the 
                      program under this chapter.
            ``(6) Program.--The term `program' means the environmental 
        quality incentives program established by this chapter.''.
SEC. 2503. ESTABLISHMENT AND ADMINISTRATION OF ENVIRONMENTAL 
                          QUALITY INCENTIVES PROGRAM.

    Section 1240B of the Food Security Act of 1985 (16 U.S.C. 3839aa-2) 
is amended to read as follows:
``SEC. 1240B. ESTABLISHMENT AND ADMINISTRATION.

    ``(a) Establishment.--During each of the 2002 through 2012 fiscal 
years, the Secretary shall provide payments to producers that enter into 
contracts with the Secretary under the program.
    ``(b) Practices and Term.--
            ``(1) Practices.--A contract under the program may apply to 
        the performance of one or more practices.
            ``(2) Term.--A contract under the program shall have a term 
        that--
                    ``(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 one 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 two or more applications for 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.
    ``(d) Payments.--
            ``(1) Availability of payments.--Payments are provided to a 
        producer to implement one or more practices under the program.

[[Page 122 STAT. 1060]]

            ``(2) Limitation on payment amounts.--A payment to a 
        producer for performing a practice may not exceed, as determined 
        by the Secretary--
                    ``(A) 75 percent of the costs associated with 
                planning, design, materials, equipment, installation, 
                labor, management, maintenance, or training;
                    ``(B) 100 percent of income foregone by the 
                producer; or
                    ``(C) in the case of a practice consisting of 
                elements covered under subparagraphs (A) and (B)--
                          ``(i) 75 percent of the costs incurred for 
                      those elements covered under subparagraph (A); and
                          ``(ii) 100 percent of income foregone for 
                      those elements covered under subparagraph (B).
            ``(3) Special rule involving payments for foregone income.--
        In determining the amount and rate of payments under paragraph 
        (2)(B), the Secretary may accord great significance to a 
        practice that, as determined by the Secretary, promotes--
                    ``(A) residue management;
                    ``(B) nutrient management;
                    ``(C) air quality management;
                    ``(D) invasive species management;
                    ``(E) pollinator habitat;
                    ``(F) animal carcass management technology; or
                    ``(G) pest management.
            ``(4) Increased payments for certain producers.--
                    ``(A) In general.--Notwithstanding paragraph (2), in 
                the case of a producer that is a limited resource, 
                socially disadvantaged farmer or rancher or a beginning 
                farmer or rancher, the Secretary shall increase the 
                amount that would otherwise be provided to a producer 
                under this subsection--
                          ``(i) to not more than 90 percent of the costs 
                      associated with planning, design, materials, 
                      equipment, installation, labor, management, 
                      maintenance, or training; and
                          ``(ii) to not less than 25 percent above the 
                      otherwise applicable rate.
                    ``(B) Advance payments.--Not more than 30 percent of 
                the amount determined under subparagraph (A) may be 
                provided in advance for the purpose of purchasing 
                materials or contracting.
            ``(5) Financial assistance from other sources.--Except as 
        provided in paragraph (6), any payments received by a producer 
        from a State or private organization or person for the 
        implementation of one or more practices on eligible land of the 
        producer shall be in addition to the payments provided to the 
        producer under this subsection.
            ``(6) Other payments.--A producer shall not be eligible for 
        payments for practices on eligible land under the program if the 
        producer receives payments or other benefits for the same 
        practice on the same land under another program under this 
        subtitle.

    ``(e) Modification or Termination of Contracts.--

[[Page 122 STAT. 1061]]

            ``(1) Voluntary modification or termination.--The Secretary 
        may modify or terminate a contract entered into with a producer 
        under the program 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 the program if the Secretary determines that 
        the producer violated the contract.

    ``(f) Allocation of Funding.--For each of fiscal years 2002 through 
2012, 60 percent of the funds made available for payments under the 
program shall be targeted at practices relating to livestock production.
    ``(g) Funding for Federally Recognized Native American Indian Tribes 
and Alaska Native Corporations.--The Secretary may enter into 
alternative funding arrangements with federally recognized Native 
American Indian Tribes and Alaska Native Corporations (including their 
affiliated membership organizations) if the Secretary determines that 
the goals and objectives of the program will be met by such 
arrangements, and that statutory limitations regarding contracts with 
individual producers will not be exceeded by any Tribal or Native 
Corporation member.
    ``(h) Water Conservation or Irrigation Efficiency Practice.--
            ``(1) Availability of payments.--The Secretary may provide 
        payments under this subsection to a producer for a water 
        conservation or irrigation practice.
            ``(2) Priority.--In providing payments to a producer for a 
        water conservation or irrigation practice, the Secretary shall 
        give priority to applications in which--
                    ``(A) consistent with the law of the State in which 
                the eligible land of the producer is located, there is a 
                reduction in water use in the operation of the producer; 
                or
                    ``(B) the producer agrees not to use any associated 
                water savings to bring new land, other than incidental 
                land needed for efficient operations, under irrigated 
                production, unless the producer is participating in a 
                watershed-wide project that will effectively conserve 
                water, as determined by the Secretary.

    ``(i) Payments for Conservation Practices Related to Organic 
Production.--
            ``(1) Payments authorized.--The Secretary shall provide 
        payments under this subsection for conservation practices, on 
        some or all of the operations of a producer, related--
                    ``(A) to organic production; and
                    ``(B) to the transition to organic production.
            ``(2) Eligibility requirements.--As a condition for 
        receiving payments under this subsection, a producer shall 
        agree--
                    ``(A) to develop and carry out an organic system 
                plan; or
                    ``(B) to develop and implement conservation 
                practices for certified organic production that are 
                consistent with an organic system plan and the purposes 
                of this chapter.

[[Page 122 STAT. 1062]]

            ``(3) Payment limitations.--Payments under this subsection 
        to a person or legal entity, directly or indirectly, may not 
        exceed, in the aggregate, $20,000 per year or $80,000 during any 
        6-year period. In applying these limitations, the Secretary 
        shall not take into account payments received for technical 
        assistance.
            ``(4) Exclusion of certain organic certification costs.--
        Payments may not be made under this subsection to cover the 
        costs associated with organic certification that are eligible 
        for cost-share payments under section 10606 of the Farm Security 
        and Rural Investment Act of 2002 (7 U.S.C. 6523).
            ``(5) Termination of contracts.--The Secretary may cancel or 
        otherwise nullify a contract to provide payments under this 
        subsection if the Secretary determines that the producer--
                    ``(A) is not pursuing organic certification; or
                    ``(B) is not in compliance with the Organic Foods 
                Production Act of 1990 (7 U.S.C. 6501 et seq).''.
SEC. 2504. EVALUATION OF APPLICATIONS.

    Section 1240C of the Food Security Act of 1985 (16 U.S.C. 3839aa-3) 
is amended to read as follows:
``SEC. 1240C. EVALUATION OF APPLICATIONS.

    ``(a) Evaluation Criteria.--The Secretary shall develop criteria for 
evaluating applications that will ensure that national, State, and local 
conservation priorities are effectively addressed.
    ``(b) Prioritization of Applications.--In evaluating applications 
under this chapter, the Secretary shall prioritize applications--
            ``(1) based on their overall level of cost-effectiveness to 
        ensure that the conservation practices and approaches proposed 
        are the most efficient means of achieving the anticipated 
        environmental benefits of the project;
            ``(2) based on how effectively and comprehensively the 
        project addresses the designated resource concern or resource 
        concerns;
            ``(3) that best fulfill the purpose of the environmental 
        quality incentives program specified in section 1240(1); and
            ``(4) that improve conservation practices or systems in 
        place on the operation at the time the contract offer is 
        accepted or that will complete a conservation system.

    ``(c) Grouping of Applications.--To the greatest extent practicable, 
the Secretary shall group applications of similar crop or livestock 
operations for evaluation purposes or otherwise evaluate applications 
relative to other applications for similar farming operations.''.
SEC. 2505. DUTIES OF PRODUCERS UNDER ENVIRONMENTAL QUALITY 
                          INCENTIVES PROGRAM.

    Section 1240D of the Food Security Act of 1985 (16 U.S.C. 3839aa-4) 
is amended--
            (1) in the matter preceding paragraph (1), by striking 
        ``technical assistance, cost-share payments, or incentive'';
            (2) in paragraph (2), by striking ``farm or ranch'' and 
        inserting ``farm, ranch, or forest land''; and

[[Page 122 STAT. 1063]]

            (3) in paragraph (4), by striking ``cost-share payments and 
        incentive''.
SEC. 2506. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM PLAN.

    (a) Plan of Operations.--Section 1240E(a) of the Food Security Act 
of 1985 (16 U.S.C. 3839aa-5(a)) is amended--
            (1) in the subsection heading, by striking ``In General'' 
        and inserting ``Plan of Operations'';
            (2) in matter preceding paragraph (1), by striking ``cost-
        share payments or incentive'';
            (3) in paragraph (2), by striking ``and'' after the 
        semicolon at the end;
            (4) in paragraph (3), by striking the period at the end and 
        inserting ``; and''; and
            (5) by adding at the end the following new paragraph:
            ``(4) in the case of forest land, is consistent with the 
        provisions of a forest management plan that is approved by the 
        Secretary, which may include--
                    ``(A) a forest stewardship plan described in section 
                5 of the Cooperative Forestry Assistance Act of 1978 (16 
                U.S.C. 2103a);
                    ``(B) another practice plan approved by the State 
                forester; or
                    ``(C) another plan determined appropriate by the 
                Secretary.''.

    (b) Avoidance of Duplication.--Subsection (b) of section 1240E of 
the Food Security Act of 1985 (16 U.S.C. 3839aa-5) is amended to read as 
follows:
    ``(b) Avoidance of Duplication.--The Secretary shall--
            ``(1) consider a plan developed in order to acquire a permit 
        under a water or air quality regulatory program as the 
        equivalent of a plan of operations under subsection (a), if the 
        plan contains elements equivalent to those elements required by 
        a plan of operations; and
            ``(2) to the maximum extent practicable, eliminate 
        duplication of planning activities under the program under this 
        chapter and comparable conservation programs.''.
SEC. 2507. DUTIES OF THE SECRETARY.

    Section 1240F(1) of the Food Security Act of 1985 (16 U.S.C. 3839aa-
6(1)) is amended by striking ``cost-share payments or incentive''.
SEC. 2508. LIMITATION ON ENVIRONMENTAL QUALITY INCENTIVES PROGRAM 
                          PAYMENTS.

    Section 1240G of the Food Security Act of 1985 (16 U.S.C. 3839aa-7) 
is amended--
            (1) by striking ``An individual or entity'' and inserting 
        ``(a) limitation.--Subject to subsection (b), a person or legal 
        entity'';
            (2) by striking ``$450,000'' and inserting ``$300,000'';
            (3) by striking ``the individual'' both places it appears 
        and inserting ``the person''; and
            (4) by adding at the end the following new subsection:

    ``(b) Waiver Authority.--In the case of contracts under this chapter 
for projects of special environmental significance (including projects 
involving methane digesters), as determined by the Secretary, the 
Secretary may--

[[Page 122 STAT. 1064]]

            ``(1) waive the limitation otherwise applicable under 
        subsection (a); and
            ``(2) raise the limitation to not more than $450,000 during 
        any six-year period.''.
SEC. 2509. CONSERVATION INNOVATION GRANTS AND PAYMENTS.

    Section 1240H of the Food Security Act of 1985 (16 U.S.C. 3839aa-8) 
is amended to read as follows:
``SEC. 1240H. CONSERVATION INNOVATION GRANTS AND PAYMENTS.

    ``(a) Competitive Grants for Innovative Conservation Approaches.--
            ``(1) Grants.--Out of the funds made available to carry out 
        this chapter, the Secretary may pay the cost of competitive 
        grants that are intended to stimulate innovative approaches to 
        leveraging the Federal investment in environmental enhancement 
        and protection, in conjunction with agricultural production or 
        forest resource management, through the program.
            ``(2) Use.--The Secretary may provide grants under this 
        subsection to governmental and non-governmental organizations 
        and persons, on a competitive basis, to carry out projects 
        that--
                    ``(A) involve producers who are eligible for 
                payments or technical assistance under the program;
                    ``(B) leverage Federal 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) ensure efficient and effective transfer of 
                innovative technologies and approaches demonstrated 
                through projects that receive funding under this 
                section, such as market systems for pollution reduction 
                and practices for the storage of carbon in soil; and
                    ``(D) provide environmental and resource 
                conservation benefits through increased participation by 
                producers of specialty crops.

    ``(b) Air Quality Concerns From Agricultural Operations.--
            ``(1) Implementation assistance.--The Secretary shall 
        provide payments under this subsection to producers to implement 
        practices to address air quality concerns from agricultural 
        operations and to meet Federal, State, and local regulatory 
        requirements. The funds shall be made available on the basis of 
        air quality concerns in a State and shall be used to provide 
        payments to producers that are cost effective and reflect 
        innovative technologies.
            ``(2) Funding.--Of the funds made available to carry out 
        this chapter, the Secretary shall carry out this subsection 
        using $37,500,000 for each of fiscal years 2009 through 2012.''.
SEC. 2510. AGRICULTURAL WATER ENHANCEMENT PROGRAM.

    Section 1240I of the Food Security Act of 1985 (16 U.S.C. 3839aa-9) 
is amended to read as follows:
``SEC. 1240I. AGRICULTURAL WATER ENHANCEMENT PROGRAM.

    ``(a) Definitions.--In this section:

[[Page 122 STAT. 1065]]

            ``(1) Agricultural water enhancement activity.--The term 
        `agricultural water enhancement activity' includes the following 
        activities carried out with respect to agricultural land:
                    ``(A) Water quality or water conservation plan 
                development, including resource condition assessment and 
                modeling.
                    ``(B) Water conservation restoration or enhancement 
                projects, including conversion to the production of less 
                water-intensive agricultural commodities or dryland 
                farming.
                    ``(C) Water quality or quantity restoration or 
                enhancement projects.
                    ``(D) Irrigation system improvement and irrigation 
                efficiency enhancement.
                    ``(E) Activities designed to mitigate the effects of 
                drought.
                    ``(F) Related activities that the Secretary 
                determines will help achieve water quality or water 
                conservation benefits on agricultural land.
            ``(2) Partner.--The term `partner' means an entity that 
        enters into a partnership agreement with the Secretary to carry 
        out agricultural water enhancement activities on a regional 
        basis, including--
                    ``(A) an agricultural or silvicultural producer 
                association or other group of such producers;
                    ``(B) a State or unit of local government; or
                    ``(C) a federally recognized Indian tribe.
            ``(3) Partnership agreement.--The term `partnership 
        agreement' means an agreement between the Secretary and a 
        partner.
            ``(4) Program.--The term `program' means the agricultural 
        water enhancement program established under subsection (b).

    ``(b) Establishment of <<NOTE: Effective 
date. Procedures. Contracts.>> Program.--Beginning in fiscal year 2009, 
the Secretary shall carry out, in accordance with this section and using 
such procedures as the Secretary determines to be appropriate, an 
agricultural water enhancement program as part of the environmental 
quality incentives program to promote ground and surface water 
conservation and improve water quality on agricultural lands--
            ``(1) by entering into contracts with, and making payments 
        to, producers to carry out agricultural water enhancement 
        activities; or
            ``(2) by entering into partnership agreements with partners, 
        in accordance with subsection (c), on a regional level to 
        benefit working agricultural land.

    ``(c) Partnership Agreements.--
            ``(1) Agreements authorized.--The Secretary may enter into 
        partnership agreements to meet the objectives of the program 
        described in subsection (b).
            ``(2) Applications.--An application to the Secretary to 
        enter into a partnership agreement under paragraph (1) shall 
        include the following:
                    ``(A) A description of the geographical area to be 
                covered by the partnership agreement.
                    ``(B) A description of the agricultural water 
                quality or water conservation issues to be addressed by 
                the partnership agreement.

[[Page 122 STAT. 1066]]

                    ``(C) A description of the agricultural water 
                enhancement objectives to be achieved through the 
                partnership.
                    ``(D) A description of the partners collaborating to 
                achieve the project objectives and the roles, 
                responsibilities, and capabilities of each partner.
                    ``(E) A description of the program resources, 
                including payments the Secretary is requested to make.
                    ``(F) Such other such elements as the Secretary 
                considers necessary to adequately evaluate and 
                competitively select applications for partnership 
                agreements.
            ``(3) Duties of partners.--A <<NOTE: Reports.>> partner 
        under a partnership agreement shall--
                    ``(A) identify producers participating in the 
                project and act on their behalf in applying for the 
                program;
                    ``(B) leverage funds provided by the Secretary with 
                additional funds to help achieve project objectives;
                    ``(C) conduct monitoring and evaluation of project 
                effects; and
                    ``(D) at the conclusion of the project, report to 
                the Secretary on project results.

    ``(d) Agricultural Water Enhancement Activities by Producers.--The 
Secretary shall select agricultural water enhancement activities 
proposed by producers according to applicable requirements under the 
environmental quality incentives program.
    ``(e) Agricultural Water Enhancement Activities by Partners.--
            ``(1) Competitive process.--The Secretary shall conduct a 
        competitive process to select partners. <<NOTE: Public 
        information.>> In carrying out the process, the Secretary shall 
        make public the criteria used in evaluating applications.
            ``(2) Authority to give priority to certain proposals.--The 
        Secretary may give a higher priority to proposals from partners 
        that--
                    ``(A) include high percentages of agricultural land 
                and producers in a region or other appropriate area;
                    ``(B) result in high levels of applied agricultural 
                water quality and water conservation activities;
                    ``(C) significantly enhance agricultural activity;
                    ``(D) allow for monitoring and evaluation; and
                    ``(E) assist producers in meeting a regulatory 
                requirement that reduces the economic scope of the 
                producer's operation.
            ``(3) Priority to proposals from states with water quantity 
        concerns.--The Secretary shall give a higher priority to 
        proposals from partners that--
                    ``(A) include the conversion of agricultural land 
                from irrigated farming to dryland farming;
                    ``(B) leverage Federal funds provided under the 
                program with funds provided by partners; and
                    ``(C) assist producers in States with water quantity 
                concerns, as determined by the Secretary.
            ``(4) Administration.--In carrying out this subsection, the 
        Secretary shall--
                    ``(A) accept qualified applications--
                          ``(i) directly from partners applying on 
                      behalf of producers; or

[[Page 122 STAT. 1067]]

                          ``(ii) from producers applying through a 
                      partner as part of a regional agricultural water 
                      enhancement project; and
                    ``(B) ensure that resources made available for 
                regional agricultural water enhancement activities are 
                delivered in accordance with applicable program rules.

    ``(f) Areas Experiencing Exceptional Drought.--Notwithstanding the 
purposes described in section 1240, the Secretary shall consider as an 
eligible agricultural water enhancement activity the use of a water 
impoundment to capture surface water runoff on agricultural land if the 
agricultural water enhancement activity--
            ``(1) is located in an area that is experiencing or has 
        experienced exceptional drought conditions during the previous 
        two calendar years; and
            ``(2) will capture surface water runoff through the 
        construction, improvement, or maintenance of irrigation ponds or 
        small, on-farm reservoirs.

    ``(g) Waiver Authority.--To assist in the implementation of 
agricultural water enhancement activities under the program, the 
Secretary shall waive the applicability of the limitation in section 
1001D(b)(2)(B) of this Act for participating producers if the Secretary 
determines that the waiver is necessary to fulfill the objectives of the 
program.
    ``(h) Payments Under Program.--
            ``(1) In general.--The Secretary shall provide appropriate 
        payments to producers participating in agricultural water 
        enhancement activities in an amount determined by the secretary 
        to be necessary to achieve the purposes of the program described 
        in subsection (b).
            ``(2) Payments to producers in states with water quantity 
        concerns.--The Secretary shall provide payments for a period of 
        five years to producers participating in agricultural water 
        enhancement activities under proposals described in subsection 
        (e)(3) in an amount sufficient to encourage producers to convert 
        from irrigated farming to dryland farming.

    ``(i) Consistency With State Law.--Any agricultural water 
enhancement activity conducted under the program shall be conducted in a 
manner consistent with State water law.
    ``(j) Funding.--
            ``(1) Availability of funds.--In addition to funds made 
        available to carry out this chapter under section 1241(a), the 
        Secretary shall carry out the program using, of the funds of the 
        Commodity Credit Corporation--
                    ``(A) $73,000,000 for each of fiscal years 2009 and 
                2010;
                    ``(B) $74,000,000 for fiscal year 2011; and
                    ``(C) $60,000,000 for fiscal year 2012 and each 
                fiscal year thereafter.
            ``(2) Limitation on administrative expenses.--None of the 
        funds made available for regional agricultural water 
        conservation activities under the program may be used to pay for 
        the administrative expenses of partners.''.

[[Page 122 STAT. 1068]]

Subtitle G--Other Conservation Programs of the Food Security Act of 1985

SEC. 2601. CONSERVATION OF PRIVATE GRAZING LAND.

    Section 1240M(e) of the Food Security Act of 1985 (16 U.S.C. 
3839bb(e)) is amended by striking ``2007'' and inserting ``2012''.
SEC. 2602. WILDLIFE HABITAT INCENTIVE PROGRAM.

    (a) Eligibility.--Section 1240N of the Food Security Act of 1985 (16 
U.S.C. 3839bb-1) is amended--
            (1) in subsection (a), by inserting before the period at the 
        end the following: ``for the development of wildlife habitat on 
        private agricultural land, nonindustrial private forest land, 
        and tribal lands''.
            (2) in subsection (b)(1), by striking ``landowners'' and 
        inserting ``owners of lands referred to in subsection (a)''.

    (b) Inclusion of Pivot Corners and Irregular Areas.--Section 
1240N(b)(1)(E) of the Food Security Act of 1985 (16 U.S.C. 3839bb-
1(b)(1)(E)) is amended by inserting before the period at the end the 
following: ``, including habitat developed on pivot corners and 
irregular areas''.
    (c) Cost Share for Long-Term Agreements.--Section 1240N(b)(2)(B) of 
the Food Security Act of 1985 (16 U.S.C. 3839bb-1(b)(2)(B)) is amended 
by striking ``15 percent'' and inserting ``25 percent''.
    (d) Priority for Certain Conservation Initiatives; Payment 
Limitation.--Section 1240N of the Food Security Act of 1985 (16 U.S.C. 
3839bb-1) is amended by adding at the end the following new subsections:
    ``(d) Priority for Certain Conservation Initiatives.--In carrying 
out this section, the Secretary may give priority to projects that would 
address issues raised by State, regional, and national conservation 
initiatives.
    ``(e) Payment Limitation.--Payments made to a person or legal 
entity, directly or indirectly, under the program may not exceed, in the 
aggregate, $50,000 per year.''.
SEC. 2603. GRASSROOTS SOURCE WATER PROTECTION PROGRAM.

    Section 1240O(b) of the Food Security Act of 1985 (16 U.S.C. 3839bb-
2(b)) is amended by striking ``$5,000,000 for each of fiscal years 2002 
through 2007'' and inserting ``$20,000,000 for each of fiscal years 2008 
through 2012''.
SEC. 2604. GREAT LAKES BASIN PROGRAM FOR SOIL EROSION AND SEDIMENT 
                          CONTROL.

    Section 1240P of the Food Security Act of 1985 (16 U.S.C. 3839bb-3) 
is amended to read as follows:
``SEC. 1240P. GREAT LAKES BASIN PROGRAM FOR SOIL EROSION AND 
                            SEDIMENT CONTROL.

    ``(a) Program Authorized.--The Secretary may carry out the Great 
Lakes basin program for soil erosion and sediment control (referred to 
in this section as the `program'), including providing assistance to 
implement the recommendations of the Great Lakes Regional Collaboration 
Strategy to Restore and Protect the Great Lakes.

[[Page 122 STAT. 1069]]

    ``(b) Consultation and Cooperation.--The Secretary shall carry out 
the program 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.
    ``(c) Assistance.--In carrying out the program, the Secretary may--
            ``(1) provide project demonstration grants, provide 
        technical assistance, and carry out information and educational 
        programs to improve water quality in the Great Lakes basin by 
        reducing soil erosion and improving sediment control; and
            ``(2) establish a priority for projects and activities 
        that--
                    ``(A) directly reduce soil erosion or improve 
                sediment control;
                    ``(B) reduce soil loss in degraded rural watersheds; 
                or
                    ``(C) improve water quality for downstream 
                watersheds.

    ``(d) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary to carry out the program $5,000,000 for 
each of fiscal years 2008 through 2012.''.
SEC. 2605. CHESAPEAKE BAY WATERSHED PROGRAM.

    Chapter 5 of subtitle D of title XII of the Food Security Act of 
1985 is amended by inserting after section 1240P (16 U.S.C. 3839bb-3) 
the following new section:
``SEC. 1240Q. <<NOTE: 16 USC 3839bb-4.>>  CHESAPEAKE BAY 
                            WATERSHED.

    ``(a) Chesapeake Bay Watershed Defined.--In this section, the term 
`Chesapeake Bay watershed' means all tributaries, backwaters, and side 
channels, including their watersheds, draining into the Chesapeake Bay.
    ``(b) Establishment and Purpose.--The Secretary shall assist 
producers in implementing conservation activities on agricultural lands 
in the Chesapeake Bay watershed for the purposes of--
            ``(1) improving water quality and quantity in the Chesapeake 
        Bay watershed; and
            ``(2) restoring, enhancing, and preserving soil, air, and 
        related resources in the Chesapeake Bay watershed.

    ``(c) Conservation Activities.--The Secretary shall deliver the 
funds made available to carry out this section through applicable 
programs under this subtitle to assist producers in enhancing land and 
water resources--
            ``(1) by controlling erosion and reducing sediment and 
        nutrient levels in ground and surface water; and
            ``(2) by planning, designing, implementing, and evaluating 
        habitat conservation, restoration, and enhancement measures 
        where there is significant ecological value if the lands are--
                    ``(A) retained in their current use; or
                    ``(B) restored to their natural condition.

    ``(d) Agreements.--
            ``(1) In general.--The Secretary shall--
                    ``(A) enter into agreements with producers to carry 
                out the purposes of this section; and
                    ``(B) use the funds made available to carry out this 
                section to cover the costs of the program involved with 
                each agreement.
            ``(2) Special considerations.--In entering into agreements 
        under this subsection, the Secretary shall give special

[[Page 122 STAT. 1070]]

        consideration to, and begin evaluating, applications with 
        producers in the following river basins:
                    ``(A) The Susquehanna River.
                    ``(B) The Shenandoah River.
                    ``(C) The Potomac River (including North and South 
                Potomac).
                    ``(D) The Patuxent River.

    ``(e) Duties of the Secretary.--In carrying out the purposes in this 
section, the Secretary shall--
            ``(1) where available, use existing plans, models, and 
        assessments to assist producers in implementing conservation 
        activities; and
            ``(2) proceed expeditiously with the implementation of any 
        agreement with a producer that is consistent with State 
        strategies for the restoration of the Chesapeake Bay watershed.

    ``(f) Consultation.--The Secretary, in consultation with appropriate 
Federal agencies, shall ensure conservation activities carried out under 
this section complement Federal and State programs, including programs 
that address water quality, in the Chesapeake Bay watershed.
    ``(g) Sense of Congress Regarding Chesapeake Bay Executive 
Council.--It is the sense of Congress that the Secretary should be a 
member of the Chesapeake Bay Executive Council, and is authorized to do 
so under section 1(3) of the Soil Conservation and Domestic Allotment 
Act (16 U.S.C. 590a(3)).
    ``(h) Funding.--
            ``(1) Availability.--Of the funds of the Commodity Credit 
        Corporation, the Secretary shall use, to the maximum extent 
        practicable--
                    ``(A) $23,000,000 for fiscal year 2009;
                    ``(B) $43,000,000 for fiscal year 2010;
                    ``(C) $72,000,000 for fiscal year 2011; and
                    ``(D) $50,000,000 for fiscal year 2012.
            ``(2) Duration of availability.--Funds made available under 
        paragraph (1) shall remain available until expended.''
SEC. 2606. VOLUNTARY PUBLIC ACCESS AND HABITAT INCENTIVE PROGRAM.

    Chapter 5 of subtitle D of title XII of the Food Security Act of 
1985 (16 U.S.C. 3839bb et seq.) is amended by inserting after section 
1240Q, as added by section 2605, the following new section:
``SEC. 1240R. <<NOTE: 16 USC 3839bb-5.>>  VOLUNTARY PUBLIC ACCESS 
                            AND HABITAT INCENTIVE PROGRAM.

    ``(a) Establishment.--The Secretary shall establish a voluntary 
public access program under which States and tribal governments may 
apply for grants to encourage owners and operators of privately-held 
farm, ranch, and forest land to voluntarily make that land available for 
access by the public for wildlife-dependent recreation, including 
hunting or fishing under programs administered by the States and tribal 
governments.
    ``(b) Applications.--In submitting applications for a grant under 
the program, a State or tribal government shall describe--
            ``(1) the benefits that the State or tribal government 
        intends to achieve by encouraging public access to private farm 
        and ranch land for--
                    ``(A) hunting and fishing; and

[[Page 122 STAT. 1071]]

                    ``(B) to the maximum extent practicable, other 
                recreational purposes; and
            ``(2) the methods that will be used to achieve those 
        benefits.

    ``(c) Priority.--In approving applications and awarding grants under 
the program, the Secretary shall give priority to States and tribal 
governments that propose--
            ``(1) to maximize participation by offering a program the 
        terms of which are likely to meet with widespread acceptance 
        among landowners;
            ``(2) to ensure that land enrolled under the State or tribal 
        government program has appropriate wildlife habitat;
            ``(3) to strengthen wildlife habitat improvement efforts on 
        land enrolled in a special conservation reserve enhancement 
        program described in section 1234(f)(4) by providing incentives 
        to increase public hunting and other recreational access on that 
        land;
            ``(4) to use additional Federal, State, tribal government, 
        or private resources in carrying out the program; and
            ``(5) to make available to the public the location of land 
        enrolled.

    ``(d) Relationship to Other Laws.--
            ``(1) No preemption.--Nothing in this section preempts a 
        State or tribal government law, including any State or tribal 
        government liability law.
            ``(2) Effect of inconsistent opening dates for migratory 
        bird hunting.--The Secretary shall reduce by 25 percent the 
        amount of a grant otherwise determined for a State under the 
        program if the opening dates for migratory bird hunting in the 
        State are not consistent for residents and non-residents.

    ``(e) Regulations.--The Secretary shall promulgate such regulations 
as are necessary to carry out this section.
    ``(f) Funding.--Of the funds of the Commodity Credit Corporation, 
the Secretary shall use, to the maximum extent practicable, $50,000,000 
for the period of fiscal years 2009 through 2012.''.

     Subtitle H--Funding and Administration of Conservation Programs

SEC. 2701. FUNDING OF CONSERVATION PROGRAMS UNDER FOOD SECURITY 
                          ACT OF 1985.

    (a) In General.--Section 1241(a) of the Food Security Act of 1985 
(16 U.S.C. 3841(a)) is amended in the matter preceding paragraph (1), by 
striking ``2007'' and inserting ``2012''.
    (b) Conservation Reserve Program.--Paragraph (1) of section 1241(a) 
of the Food Security Act of 1985 (16 U.S.C. 3841(a)) is amended by 
striking the period at the end and inserting the following: ``, 
including to the maximum extent practicable--
                    ``(A) $100,000,000 for the period of fiscal years 
                2009 through 2012 to provide cost share payments under 
                paragraph (3) of section 1234(b) in connection with 
                thinning activities conducted on land described in 
                subparagraph (A)(iii) of such paragraph; and
                    ``(B) $25,000,000 for the period of fiscal years 
                2009 through 2012 to carry out section 1235(f) to 
                facilitate the transfer of land subject to contracts 
                from retired or retiring

[[Page 122 STAT. 1072]]

                owners and operators to beginning farmers or ranchers 
                and socially disadvantaged farmers or ranchers.''.

    (c) Conservation Security and Conservation Stewardship Programs.--
Paragraph (3) of section 1241(a) of the Food Security Act of 1985 (16 
U.S.C. 3841(a)) is amended to read as follows:
            ``(3)(A) Conservation security program.--The conservation 
        security program under subchapter A of chapter 2, using such 
        sums as are necessary to administer contracts entered into 
        before September 30, 2008.
            ``(B) Conservation stewardship program.--The conservation 
        stewardship program under subchapter B of chapter 2.''.

    (d) Farmland Protection Program.--Paragraph (4) of section 1241(a) 
of the Food Security Act of 1985 (16 U.S.C. 3841(a)) is amended to read 
as follows:
            ``(4) The farmland protection program under subchapter C of 
        chapter 2, using, to the maximum extent practicable--
                    ``(A) $97,000,000 in fiscal year 2008;
                    ``(B) $121,000,000 in fiscal year 2009;
                    ``(C) $150,000,000 in fiscal year 2010;
                    ``(D) $175,000,000 in fiscal year 2011; and
                    ``(E) $200,000,000 in fiscal year 2012.''.

    (e) Grassland Reserve Program.--Paragraph (5) of section 1241(a) of 
the Food Security Act of 1985 (16 U.S.C. 3841(a)) is amended to read as 
follows:
            ``(5) The grassland reserve program under subchapter D of 
        chapter 2.''.

    (f) Environmental Quality Incentives Program.--Paragraph (6) of 
section 1241(a) of the Food Security Act of 1985 (16 U.S.C. 3841(a)) is 
amended to read as follows:
            ``(6) The environmental quality incentives program under 
        chapter 4, using, to the maximum extent practicable--
                    ``(A) $1,200,000,000 in fiscal year 2008;
                    ``(B) $1,337,000,000 in fiscal year 2009;
                    ``(C) $1,450,000,000 in fiscal year 2010;
                    ``(D) $1,588,000,000 in fiscal year 2011; and
                    ``(E) $1,750,000,000 in fiscal year 2012.''.

    (g) Wildlife Habitat Incentives Program.--Paragraph (7)(D) of 
section 1241(a) of the Food Security Act of 1985 (16 U.S.C. 3841(a)) is 
amended by striking ``2007'' and inserting ``2012''.
SEC. 2702. AUTHORITY TO ACCEPT CONTRIBUTIONS TO SUPPORT 
                          CONSERVATION PROGRAMS.

    Section 1241 of the Food Security Act of 1985 (16 U.S.C. 3841) is 
amended by adding at the end the following new subsection:
    ``(e) Acceptance and Use of Contributions.--
            ``(1) Authority to establish contribution accounts.--Subject 
        to paragraph (2), the Secretary may establish a sub-account for 
        each conservation program administered by the Secretary under 
        subtitle D to accept contributions of non-Federal funds to 
        support the purposes of the program.
            ``(2) Deposit and use of contributions.--Contributions of 
        non-Federal funds received for a conservation program 
        administered by the Secretary under subtitle D shall be 
        deposited into the sub-account established under this subsection 
        for the program and shall be available to the Secretary, without 
        further appropriation and until expended, to carry out the 
        program.''.

[[Page 122 STAT. 1073]]

SEC. 2703. REGIONAL EQUITY AND FLEXIBILITY.

    (a) Regional Equity and Flexibility.--Section 1241(d) of the Food 
Security Act of 1985 (16 U.S.C. 3841(d)) is amended--
            (1) by striking ``Before April 1'' and inserting the 
        following:
            ``(1) Priority funding to promote equity.--Before April 1'';
            (2) by striking ``$12,000,000'' and inserting 
        ``$15,000,000''; and
            (3) by adding at the end the following new paragraph:
            ``(2) Specific funding allocations.--In determining the 
        specific funding allocations for States under paragraph (1), the 
        Secretary shall consider the respective demand in each State for 
        each program covered by such paragraph.''.

    (b) Allocations Review and Update.--Section 1241 of the Food 
Security Act of 1985 (16 U.S.C. 3841) is amended by inserting after 
subsection (e), as added by section 2702, the following new subsection:
    ``(f) Allocations Review and Update.--
            ``(1) Review.--Not <<NOTE: Deadline.>> later than January 1, 
        2012, the Secretary shall conduct a review of conservation 
        programs and authorities under this title that utilize 
        allocation formulas to determine the sufficiency of the formulas 
        in accounting for State-level economic factors, level of 
        agricultural infrastructure, or related factors that affect 
        conservation program costs.
            ``(2) Update.--The Secretary shall improve conservation 
        program allocation formulas as necessary to ensure that the 
        formulas adequately reflect the costs of carrying out the 
        conservation programs.''.
SEC. 2704. ASSISTANCE TO CERTAIN FARMERS AND RANCHERS TO IMPROVE 
                          THEIR ACCESS TO CONSERVATION PROGRAMS.

    Section 1241 of the Food Security Act of 1985 (16 U.S.C. 3841) is 
amended by inserting after subsection (f), as added by section 2703(b), 
the following new subsection:
    ``(g) Assistance to Certain Farmers or Ranchers for Conservation 
Access.--
            ``(1) Assistance.--Of the funds made available for each of 
        fiscal years 2009 through 2012 to carry out the environmental 
        quality incentives program and the acres made available for each 
        of such fiscal years to carry out the conservation stewardship 
        program, the Secretary shall use, to the maximum extent 
        practicable--
                    ``(A) 5 percent to assist beginning farmers or 
                ranchers; and
                    ``(B) 5 percent to assist socially disadvantaged 
                farmers or ranchers.
            ``(2) Repooling of funds.--In any fiscal year, amounts not 
        obligated under paragraph (1) by a date determined by the 
        Secretary shall be available for payments and technical 
        assistance to all persons eligible for payments or technical 
        assistance in that fiscal year under the environmental quality 
        incentives program.
            ``(3) Repooling of acres.--In any fiscal year, acres not 
        obligated under paragraph (1) by a date determined by the 
        Secretary shall be available for use in that fiscal year under 
        the conservation stewardship program.''.

[[Page 122 STAT. 1074]]

SEC. 2705. REPORT REGARDING ENROLLMENTS AND ASSISTANCE UNDER 
                          CONSERVATION PROGRAMS.

    Section 1241 of the Food Security Act of 1985 (16 U.S.C. 3841) is 
amended by inserting after subsection (g), as added by section 2704, the 
following new subsection:
    ``(h) Report on Program Enrollments and Assistance.--Beginning in 
calendar year 2009, and each year thereafter, 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 
semiannual report containing statistics by State related to enrollments 
in conservation programs under this subtitle, as follows:
            ``(1) Payments made under the wetlands reserve program for 
        easements valued at $250,000 or greater.
            ``(2) Payments made under the farmland protection program 
        for easements in which the Federal share is $250,000 or greater.
            ``(3) Payments made under the grassland reserve program 
        valued at $250,000 or greater.
            ``(4) Payments made under the environmental quality 
        incentives program for land determined to have special 
        environmental significance pursuant to section 1240G(b).
            ``(5) Payments made under the agricultural water enhancement 
        program subject to the waiver of adjusted gross income 
        limitations pursuant to section 1240I(g).
            ``(6) Waivers granted by the Secretary under section 
        1001D(b)(2) of this Act in order to protect environmentally 
        sensitive land of special significance.''.
SEC. 2706. DELIVERY OF CONSERVATION TECHNICAL ASSISTANCE.

    Section 1242 of the Food Security Act of 1985 (16 U.S.C. 3842) is 
amended to read as follows:
``SEC. 1242. DELIVERY OF TECHNICAL ASSISTANCE.

    ``(a) Definition of Eligible Participant.--In this section, the term 
`eligible participant' means a producer, landowner, or entity that is 
participating in, or seeking to participate in, programs for which the 
producer, landowner, or entity is otherwise eligible to participate in 
under this title or the agricultural management assistance program under 
section 524 of the Federal Crop Insurance Act (7 U.S.C. 1524).
    ``(b) Purpose of Technical Assistance.--The purpose of technical 
assistance authorized by this section is to provide eligible 
participants with consistent, science-based, site-specific practices 
designed to achieve conservation objectives on land active in 
agricultural, forestry, or related uses.
    ``(c) Provision of Technical Assistance.--The Secretary shall 
provide technical assistance under this title to an eligible 
participant--
            ``(1) directly;
            ``(2) through an agreement with a third-party provider; or
            ``(3) at the option of the eligible participant, through a 
        payment, as determined by the Secretary, to the eligible 
        participant for an approved third-party provider, if available.

    ``(d) Non-Federal Assistance.--The Secretary may request the 
services of, and enter into cooperative agreements or contracts

[[Page 122 STAT. 1075]]

with, other agencies within the Department or non-Federal entities to 
assist the Secretary in providing technical assistance necessary to 
assist in implementing conservation programs under this title.
    ``(e) Certification of Third-Party Providers.--
            ``(1) Purpose.--The purpose of the third-party provider 
        program is to increase the availability and range of technical 
        expertise available to eligible participants to plan and 
        implement conservation measures.
            ``(2) Regulations.--Not <<NOTE: Deadline.>> later than 180 
        days after the date of the enactment of the Food, Conservation, 
        and Energy Act of 2008, the Secretary shall promulgate such 
        regulations as are necessary to carry out this section.
            ``(3) Expertise.--In promulgating such regulations, the 
        Secretary, to the maximum extent practicable, shall--
                    ``(A) ensure that persons with expertise in the 
                technical aspects of conservation planning, watershed 
                planning, and 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;
                    ``(B) provide <<NOTE: Criteria.>> national criteria 
                for the certification of third party providers; and
                    ``(C) approve any unique certification standards 
                established at the State level.

    ``(f) Administration.--
            ``(1) Funding.--Effective <<NOTE: Effective date.>> for 
        fiscal year 2008 and each subsequent fiscal year, funds of the 
        Commodity Credit Corporation made available to carry out 
        technical assistance for each of the programs specified in 
        section 1241 shall be available for the provision of technical 
        assistance from third-party providers under this section.
            ``(2) Term of agreement.--An agreement with a third-party 
        provider under this section shall have a term that--
                    ``(A) at a minimum, is equal to the period beginning 
                on the date on which the agreement is entered into and 
                ending on the date that is 1 year after the date on 
                which all activities performed pursuant to the agreement 
                have been completed;
                    ``(B) does not exceed 3 years; and
                    ``(C) can be renewed, as determined by the 
                Secretary.
            ``(3) Review of <<NOTE: Deadline.>> certification 
        requirements.--Not later than 1 year after the date of enactment 
        of the Food, Conservation, and Energy Act of 2008, the Secretary 
        shall--
                    ``(A) review certification requirements for third-
                party providers; and
                    ``(B) make any adjustments considered necessary by 
                the Secretary to improve participation.
            ``(4) Eligible activities.--
                    ``(A) Inclusion of activities.--The Secretary may 
                include as activities eligible for payments to a third 
                party provider--
                          ``(i) technical services provided directly to 
                      eligible participants, such as conservation 
                      planning, education and outreach, and assistance 
                      with design and implementation of conservation 
                      practices; and
                          ``(ii) related technical assistance services 
                      that accelerate conservation program delivery.

[[Page 122 STAT. 1076]]

                    ``(B) Exclusions.--The Secretary shall not designate 
                as an activity eligible for payments to a third party 
                provider any service that is provided by a business, or 
                equivalent, in connection with conducting business and 
                that is customarily provided at no cost.
            ``(5) Payment amounts.--The Secretary shall establish fair 
        and reasonable amounts of payments for technical services 
        provided by third-party providers.

    ``(g) Availability of Technical Services.--
            ``(1) In general.--In carrying out the programs under this 
        title and the agricultural management assistance program under 
        section 524 of the Federal Crop Insurance Act (7 U.S.C. 1524), 
        the Secretary shall make technical services available to all 
        eligible participants who are installing an eligible practice.
            ``(2) Technical service contracts.--In any case in which 
        financial assistance is not provided under a program referred to 
        in paragraph (1), the Secretary may enter into a technical 
        service contract with the eligible participant for the purposes 
        of assisting in the planning, design, or installation of an 
        eligible practice.

    ``(h) Review of Conservation Practice Standards.--
            ``(1) Review required.--The Secretary shall--
                    ``(A) review conservation practice standards, 
                including engineering design specifications, in effect 
                on the date of the enactment of the Food, Conservation, 
                and Energy Act of 2008;
                    ``(B) ensure, to the maximum extent practicable, the 
                completeness and relevance of the standards to local 
                agricultural, forestry, and natural resource needs, 
                including specialty crops, native and managed 
                pollinators, bioenergy crop production, forestry, and 
                such other needs as are determined by the Secretary; and
                    ``(C) ensure that the standards provide for the 
                optimal balance between meeting site-specific 
                conservation needs and minimizing risks of design 
                failure and associated costs of construction and 
                installation.
            ``(2) Consultation.--In conducting the review under 
        paragraph (1), the Secretary shall consult with eligible 
        participants, crop consultants, cooperative extension and land 
        grant universities, nongovernmental organizations, and other 
        qualified entities.
            ``(3) Expedited revision of standards.--If the Secretary 
        determines under paragraph (1) that revisions to the 
        conservation practice standards, including engineering design 
        specifications, are necessary, the Secretary shall establish an 
        administrative process for expediting the revisions.

    ``(i) Addressing Concerns of Speciality Crop, Organic, and Precision 
Agriculture Producers.--
            ``(1) In general.--The Secretary shall--
                    ``(A) to the maximum extent practicable, fully 
                incorporate specialty crop production, organic crop 
                production, and precision agriculture into the 
                conservation practice standards; and
                    ``(B) provide for the appropriate range of 
                conservation practices and resource mitigation measures 
                available to producers involved with organic or 
                specialty crop production or precision agriculture.

[[Page 122 STAT. 1077]]

            ``(2) Availability of adequate technical assistance.--
                    ``(A) In general.--The Secretary shall ensure that 
                adequate technical assistance is available for the 
                implementation of conservation practices by producers 
                involved with organic, specialty crop production, or 
                precision agriculture through Federal conservation 
                programs.
                    ``(B) Requirements.--In carrying out subparagraph 
                (A), the Secretary shall develop--
                          ``(i) programs that meet specific needs of 
                      producers involved with organic, specialty crop 
                      production or precision agriculture through 
                      cooperative agreements with other agencies and 
                      nongovernmental organizations; and
                          ``(ii) program specifications that allow for 
                      innovative approaches to engage local resources in 
                      providing technical assistance for planning and 
                      implementation of conservation practices.''.
SEC. 2707. COOPERATIVE CONSERVATION PARTNERSHIP INITIATIVE.

    (a) Transfer of Existing Provisions.--Subsections (a), (c), and (d) 
of section 1243 of the Food Security Act of 1985 (16 U.S.C. 3843) are--
            (1) redesignated as subsections (c), (d), and (e), 
        respectively; and
            (2) transferred to appear at the end of section 1244 of such 
        Act (16 U.S.C. 3844).

    (b) Establishment of Partnership Initiative.--Section 1243 of the 
Food Security Act of 1985 (16 U.S.C. 3843), as amended by subsection 
(a), is amended to read as follows:
``SEC. 1243. COOPERATIVE CONSERVATION PARTNERSHIP INITIATIVE.

    ``(a) Establishment of Initiative.--The Secretary shall establish a 
cooperative conservation partnership initiative (in this section 
referred to as the `Initiative') to work with eligible partners to 
provide assistance to producers enrolled in a program described in 
subsection (c)(1) that will enhance conservation outcomes on 
agricultural and nonindustrial private forest land.
    ``(b) Purposes.--The purposes of a partnership entered into under 
the Initiative shall be--
            ``(1) to address conservation priorities involving 
        agriculture and nonindustrial private forest land on a local, 
        State, multi-State, or regional level;
            ``(2) to encourage producers to cooperate in meeting 
        applicable Federal, State, and local regulatory requirements 
        related to production involving agriculture and nonindustrial 
        private forest land;
            ``(3) to encourage producers to cooperate in the 
        installation and maintenance of conservation practices that 
        affect multiple agricultural or nonindustrial private forest 
        operations; or
            ``(4) to promote the development and demonstration of 
        innovative conservation practices and delivery methods, 
        including those for specialty crop and organic production and 
        precision agriculture producers.

    ``(c) Initiative Programs.--
            ``(1) Covered programs.--Except as provided in paragraph 
        (2), the Initiative applies to all conservation programs under 
        subtitle D.

[[Page 122 STAT. 1078]]

            ``(2) Excluded programs.--The Initiative shall not include 
        the following programs:
                    ``(A) Conservation reserve program.
                    ``(B) Wetlands reserve program.
                    ``(C) Farmland protection program
                    ``(D) Grassland reserve program.

    ``(d) Eligible Partners.--The Secretary may enter into a partnership 
under the Initiative with one or more of the following:
            ``(1) States and local governments.
            ``(2) Indian tribes.
            ``(3) Producer associations.
            ``(4) Farmer cooperatives.
            ``(5) Institutions of higher education.
            ``(6) Nongovernmental organizations with a history of 
        working cooperatively with producers to effectively address 
        conservation priorities related to agricultural production and 
        nonindustrial private forest land.

    ``(e) Implementation Agreements.--The Secretary shall carry out the 
Initiative--
            ``(1) by selecting, through a competitive process, eligible 
        partners from among applications submitted under subsection (f); 
        and
            ``(2) by entering into multi-year agreements with eligible 
        partners so selected for a period not to exceed 5 years.

    ``(f) Applications.--
            ``(1) Required information.--An application to enter into a 
        partnership agreement under the Initiative shall include the 
        following:
                    ``(A) A description of the area covered by the 
                agreement, conservation priorities in the area, 
                conservation objectives to be achieved, and the expected 
                level of participation by agricultural producers and 
                nonindustrial private forest landowners.
                    ``(B) A description of the partner, or partners, 
                collaborating to achieve the objectives of the 
                agreement, and the roles, responsibilities, and 
                capabilities of the partner.
                    ``(C) A description of the resources that are 
                requested from the Secretary, and the non-Federal 
                resources that will be leveraged by the Federal 
                contribution.
                    ``(D) A description of the plan for monitoring, 
                evaluating, and reporting on progress made towards 
                achieving the objectives of the agreement.
                    ``(E) Such other information that may be required by 
                the Secretary.
            ``(2) Priorities.--The Secretary shall give priority to 
        applications for agreements that--
                    ``(A) have a high percentage of producers involved 
                and working agricultural or nonindustrial private forest 
                land included in the area covered by the agreement;
                    ``(B) significantly leverage non-Federal financial 
                and technical resources and coordinate with other local, 
                State, or Federal efforts;
                    ``(C) deliver high percentages of applied 
                conservation to address water quality, water 
                conservation, or State, regional, or national 
                conservation initiatives;

[[Page 122 STAT. 1079]]

                    ``(D) provide innovation in conservation methods and 
                delivery, including outcome-based performance measures 
                and methods; or
                    ``(E) meet other factors, as determined by the 
                Secretary.

    ``(g) Relationship to Covered Programs.--
            ``(1) Compliance with program rules.--Except as provided in 
        paragraph (2), the Secretary shall ensure that resources made 
        available under the Initiative are delivered in accordance with 
        the applicable rules of programs specified in subsection (c)(1) 
        through normal program mechanisms relating to program functions, 
        including rules governing appeals, payment limitations, and 
        conservation compliance.
            ``(2) Adjustment.--The Secretary may adjust the elements of 
        any program specified in subsection (c)(1)--
                    ``(A) to better reflect unique local circumstances 
                and purposes if the Secretary determines such 
                adjustments are necessary to achieve the purposes of the 
                Initiative; and
                    ``(B) to provide preferential enrollment to 
                producers who are eligible for the applicable program 
                and to participate in the Initiative.

    ``(h) Technical and Financial Assistance.--The Secretary shall 
provide appropriate technical and financial assistance to producers 
participating in the Initiative in an amount determined to be necessary 
to achieve the purposes of the Initiative.
    ``(i) Funding.--
            ``(1) Reservation.--Of the funds and acres made available 
        for each of fiscal years 2009 through 2012 to implement the 
        programs described in subsection (c)(1), the Secretary shall 
        reserve 6 percent of the funds and acres to ensure an adequate 
        source of funds and acres for the Initiative.
            ``(2) Allocation requirements.--Of the funds and acres 
        reserved for the Initiative for a fiscal year, the Secretary 
        shall allocate--
                    ``(A) 90 percent of the funds and acres to projects 
                based on the direction of State conservationists, with 
                the advice of State technical committees; and
                    ``(B) 10 percent of the funds and acres to projects 
                based on a national competitive process established by 
                the Secretary.
            ``(3) Unused funding.--Any funds and acres reserved for a 
        fiscal year under paragraph (1) that are not obligated by April 
        1 of that fiscal year may be used to carry out other activities 
        under the program that is the source of the funds or acres 
        during the remainder of that fiscal year.
            ``(4) Administrative costs of partners.--Overhead or 
        administrative costs of partners may not be covered by funds 
        provided through the Initiative.''.
SEC. 2708. ADMINISTRATIVE REQUIREMENTS FOR CONSERVATION PROGRAMS.

    Section 1244 of the Food Security Act of 1985 (16 U.S.C. 3844), as 
amended by section 2707, is further amended--
            (1) by striking subsection (a) and inserting the following 
        new subsection:

    ``(a) Incentives for Certain Farmers and Ranchers and Indian 
Tribes.--

[[Page 122 STAT. 1080]]

            ``(1) Incentives authorized.--In carrying out any 
        conservation program administered by the Secretary, the 
        Secretary may provide to a person or entity specified in 
        paragraph (2) incentives to participate in the conservation 
        program--
                    ``(A) to foster new farming and ranching 
                opportunities; and
                    ``(B) to enhance long-term environmental goals.
            ``(2) Covered persons.--Incentives authorized by paragraph 
        (1) may be provided to the following:
                    ``(A) Beginning farmers or ranchers.
                    ``(B) Socially disadvantaged farmers or ranchers.
                    ``(C) Limited resource farmers or ranchers.
                    ``(D) Indian tribes.''; and
            (2) by adding at the end the following new subsections:

    ``(f) Acreage Limitations.--
            ``(1) Limitations.--
                    ``(A) Enrollments.--The Secretary shall not enroll 
                more than 25 percent of the cropland in any county in 
                the programs administered under subchapters B and C of 
                chapter 1 of subtitle D.
                    ``(B) Easements.--Not more than 10 percent of the 
                cropland in a country may be subject to an easement 
                acquired under subchapter C of chapter 1 of subtitle D.
            ``(2) Exceptions.--The Secretary may exceed the limitation 
        in paragraph (1)(A), if the Secretary determines that--
                    ``(A) the action would not adversely affect the 
                local economy of a county; and
                    ``(B) operators in the county are having 
                difficulties complying with conservation plans 
                implemented under section 1212.
            ``(3) Waiver to exclude certain acreage.--The Secretary may 
        grant a waiver to exclude acreage enrolled under subsection 
        (c)(2)(B) or (f)(4) of section 1234 from the limitations in 
        paragraph (1)(A) with the concurrence of the county government 
        of the county involved.
            ``(4) Shelterbelts and windbreaks.--The limitations 
        established under paragraph (1) shall not apply to cropland that 
        is subject to an easement under subchapter C of chapter 1 that 
        is used for the establishment of shelterbelts and windbreaks.

    ``(g) Compliance and <<NOTE: Procedures.>> Performance.--For each 
conservation program under subtitle D, the Secretary shall develop 
procedures--
            ``(1) to monitor compliance with program requirements;
            ``(2) to measure program performance;
            ``(3) to demonstrate whether the long-term conservation 
        benefits of the program are being achieved;
            ``(4) to track participation by crop and livestock types; 
        and
            ``(5) to coordinate activities described in this subsection 
        with the national conservation program authorized under section 
        5 of the Soil and Water Resources Conservation Act of 1977 (16 
        U.S.C. 2004).

    ``(h) Encouragement of Pollinator Habitat Development and 
Protection.--In carrying out any conservation program administered by 
the Secretary, the Secretary may, as appropriate, encourage--
            ``(1) the development of habitat for native and managed 
        pollinators; and

[[Page 122 STAT. 1081]]

            ``(2) the use of conservation practices that benefit native 
        and managed pollinators.

    ``(i) Streamlined Application Process.--
            ``(1) In general.--In carrying out each conservation program 
        under this title, the Secretary shall ensure that the 
        application process used by producers and landowners is 
        streamlined to minimize complexity and eliminate redundancy.
            ``(2) Review and streamlining.--
                    ``(A) Review.--The Secretary shall carry out a 
                review of the application forms and processes for each 
                conservation program covered by this subsection.
                    ``(B) Streamlining.--On completion of the review the 
                Secretary shall revise application forms and processes, 
                as necessary, to ensure that--
                          ``(i) all required application information is 
                      essential for the efficient, effective, and 
                      accountable implementation of conservation 
                      programs;
                          ``(ii) conservation program applicants are not 
                      required to provide information that is readily 
                      available to the Secretary through existing 
                      information systems of the Department of 
                      Agriculture;
                          ``(iii) information provided by the applicant 
                      is managed and delivered efficiently for use in 
                      all stages of the application process, or for 
                      multiple applications; and
                          ``(iv) information technology is used 
                      effectively to minimize data and information input 
                      requirements.
            ``(3) Implementation and <<NOTE: Deadline.>> notification.--
        Not later than 1 year after the date of enactment of the Food, 
        Conservation, and Energy Act of 2008, the Secretary shall submit 
        to Congress a written notification of completion of the 
        requirements of this subsection.''.
SEC. 2709. ENVIRONMENTAL SERVICES MARKETS.

    Subtitle E of title XII of the Food Security Act of 1985 is amended 
by inserting after section 1244 (16 U.S.C. 3844) the following new 
section:
``SEC. 1245. <<NOTE: 16 USC 3845.>>  ENVIRONMENTAL SERVICES 
                          MARKETS.

    ``(a) Technical Guidelines Required.--The Secretary shall establish 
technical guidelines that outline science-based methods to measure the 
environmental services benefits from conservation and land management 
activities in order to facilitate the participation of farmers, 
ranchers, and forest landowners in emerging environmental services 
markets. The Secretary shall give priority to the establishment of 
guidelines related to farmer, rancher, and forest landowner 
participation in carbon markets.
    ``(b) Establishment.--The Secretary shall establish guidelines under 
subsection (a) for use in developing the following:
            ``(1) A procedure to measure environmental services 
        benefits.
            ``(2) A protocol to report environmental services benefits.
            ``(3) A registry to collect, record and maintain the 
        benefits measured.

    ``(c) Verification Requirements.--
            ``(1) Verification of reports.--The Secretary shall 
        establish guidelines for a process to verify that a farmer, 
        rancher, or forest landowner who reports an environmental 
        services

[[Page 122 STAT. 1082]]

        benefit pursuant to the protocol required by paragraph (2) of 
        subsection (b) for inclusion in the registry required by 
        paragraph (3) of such subsection has implemented the 
        conservation or land management activity covered by the report.
            ``(2) Role of third parties.--In establishing the 
        verification guidelines required by paragraph (1), the Secretary 
        shall consider the role of third-parties in conducting 
        independent verification of benefits produced for environmental 
        services markets and other functions, as determined by the 
        Secretary.

    ``(d) Use of Existing Information.--In carrying out subsection (b), 
the Secretary shall build on activities or information in existence on 
the date of the enactment of the Food, Conservation, and Energy Act of 
2008 regarding environmental services markets.
    ``(e) Consultation.--In carrying out this section, the Secretary 
shall consult with the following:
            ``(1) Federal and State government agencies.
            ``(2) Nongovernmental interests including--
                    ``(A) farm, ranch, and forestry producers;
                    ``(B) financial institutions involved in 
                environmental services trading;
                    ``(C) institutions of higher education with relevant 
                expertise or experience;
                    ``(D) nongovernmental organizations with relevant 
                expertise or experience; and
                    ``(E) private sector representatives with relevant 
                expertise or experience.
            ``(3) Other interested persons, as determined by the 
        Secretary.''.
SEC. 2710. AGRICULTURE CONSERVATION EXPERIENCED SERVICES PROGRAM.

    Subtitle F of title XII of the Food Security Act of 1985 is amended 
by inserting after section 1251 (16 U.S.C. 2005a) the following new 
section:
``SEC. 1252. <<NOTE: 16 USC 3851.>>  AGRICULTURE CONSERVATION 
                          EXPERIENCED SERVICES PROGRAM.

    ``(a) Establishment and Purpose.--The Secretary shall establish a 
conservation experienced services program (in this section referred to 
as the `ACES Program') for the purpose of utilizing the talents of 
individuals who are age 55 or older, but who are not employees of the 
Department of Agriculture or a State agriculture department, to provide 
technical services in support of the conservation-related programs and 
authorities carried out by the Secretary. Such technical services may 
include conservation planning assistance, technical consultation, and 
assistance with design and implementation of conservation practices.
    ``(b) Program Agreements.--
            ``(1) Relation to older american community service 
        employment program.--Notwithstanding any other provision of law 
        relating to Federal grants, cooperative agreements, or 
        contracts, to carry out the ACES program during a fiscal year, 
        the Secretary may enter into agreements with nonprofit private 
        agencies and organizations eligible to receive grants for that 
        fiscal year under the Community Service Senior Opportunities Act 
        (42 U.S.C. 3056 et seq.) to secure participants for the

[[Page 122 STAT. 1083]]

        ACES program who will provide technical services under the ACES 
        program.
            ``(2) Required determination.--Before entering into an 
        agreement under paragraph (1), the Secretary shall ensure that 
        the agreement would not--
                    ``(A) result in the displacement of individuals 
                employed by the Department, including partial 
                displacement through reduction of non-overtime hours, 
                wages, or employment benefits;
                    ``(B) result in the use of an individual under the 
                ACES program for a job or function in a case in which a 
                Federal employee is in a layoff status from the same or 
                a substantially-equivalent job or function with the 
                Department; or
                    ``(C) affect existing contracts for services.

    ``(c) Funding Source.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        Secretary may carry out the ACES program using funds made 
        available to carry out each program under this title.
            ``(2) Exclusions.--Funds made available to carry out the 
        following programs may not be used to carry out the ACES 
        program:
                    ``(A) The conservation reserve program.
                    ``(B) The wetlands reserve program.
                    ``(C) The grassland reserve program.
                    ``(D) The conservation stewardship program.

    ``(d) Liability.--An individual providing technical services under 
the ACES program is deemed to be an employee of the United States 
Government for purposes of chapter 171 of title 28, United States Code, 
if the individual--
            ``(1) is providing technical services pursuant to an 
        agreement entered into under subsection (b); and
            ``(2) is acting within the scope of the agreement.''.
SEC. 2711. ESTABLISHMENT OF STATE TECHNICAL COMMITTEES AND THEIR 
                          RESPONSIBILITIES.

    Subtitle G of title XII of the Farm Security Act of 1985 (16 U.S.C. 
3861, 3862) is amended to read as follows:

                ``Subtitle G--State Technical Committees

``SEC. 1261. <<NOTE: 16 USC 3861.>>  ESTABLISHMENT OF STATE 
                          TECHNICAL COMMITTEES.

    ``(a) Establishment.--The Secretary shall establish a technical 
committee in each State to assist the Secretary in the considerations 
relating to implementation and technical aspects of the conservation 
programs under this title.
    ``(b) Standards.--Not <<NOTE: Deadline.>> later than 180 days after 
the date of enactment of the Food, Conservation, and Energy Act of 2008, 
the Secretary shall develop--
            ``(1) standard operating procedures to standardize the 
        operations of State technical committees; and
            ``(2) standards to be used by State technical committees in 
        the development of technical guidelines under section 1262(b) 
        for the implementation of the conservation provisions of this 
        title.

    ``(c) Composition.--Each State technical committee shall be composed 
of agricultural producers and other professionals that

[[Page 122 STAT. 1084]]

represent a variety of disciplines in the soil, water, wetland, and 
wildlife sciences. The technical committee for a State shall include 
representatives from among the following:
            ``(1) The Natural Resources Conservation Service.
            ``(2) The Farm Service Agency.
            ``(3) The Forest Service.
            ``(4) The National Institute of Food and Agriculture.
            ``(5) The State fish and wildlife agency.
            ``(6) The State forester or equivalent State official.
            ``(7) The State water resources agency.
            ``(8) The State department of agriculture.
            ``(9) The State association of soil and water conservation 
        districts.
            ``(10) Agricultural producers representing the variety of 
        crops and livestock or poultry raised within the State.
            ``(11) Owners of nonindustrial private forest land.
            ``(12) Nonprofit organizations within the meaning of section 
        501(c)(3) of the Internal Revenue Code of 1986 with demonstrable 
        conservation expertise and experience working with agriculture 
        producers in the State.
            ``(13) Agribusiness.
``SEC. 1262. <<NOTE: 16 USC 3862.>>  RESPONSIBILITIES.

    ``(a) In General.--Each State technical committee established under 
section 1261 shall meet regularly to provide information, analysis, and 
recommendations to appropriate officials of the Department of 
Agriculture who are charged with implementing the conservation 
provisions of this title.
    ``(b) Public Notice and Attendance.--Each State technical committee 
shall provide public notice of, and permit public attendance at, 
meetings considering issues of concern related to carrying out this 
title.
    ``(c) Role.--
            ``(1) In general.--The role of State technical committees is 
        advisory in nature, and such committees shall have no 
        implementation or enforcement authority. However, the Secretary 
        shall give strong consideration to the recommendations of such 
        committees in administering the programs under this title.
            ``(2) Advisory role in establishing program priorities and 
        criteria.--Each State technical committee shall advise the 
        Secretary in establishing priorities and criteria for the 
        programs in this title, including the review of whether local 
        working groups are addressing those priorities.

    ``(d) FACA Requirements.--
            ``(1) Exemption.--Each State technical committee shall be 
        exempt from the Federal Advisory Committee Act (5 U.S.C. App.).
            ``(2) Local working groups.--For purposes of the Federal 
        Advisory Committee Act (5 U.S.C. App.), any local working group 
        established under this subtitle shall be considered to be a 
        subcommittee of the applicable State technical committee.''.

[[Page 122 STAT. 1085]]

           Subtitle I--Conservation Programs Under Other Laws

SEC. 2801. AGRICULTURAL MANAGEMENT ASSISTANCE PROGRAM.

    (a) Eligible States.--Section 524(b)(1) of the Federal Crop 
Insurance Act (7 U.S.C. 1524(b)(1)) is amended by inserting ``Hawaii,'' 
after ``Delaware,''.
    (b) Funding.--Section 524(b)(4)(B) of the Federal Crop Insurance Act 
(7 U.S.C. 1524(b)(4)(B)) is amended--
            (1) in clause (i), by striking ``Except as provided in 
        clauses (ii) and (iii)'' and inserting ``Except as provided in 
        clause (ii)''; and
            (2) by striking clauses (ii) and (iii) and inserting the 
        following new clause:
                          ``(ii) Exception for fiscal years 2008 through 
                      2012.--For each of fiscal years 2008 through 2012, 
                      the Commodity Credit Corporation shall make 
                      available to carry out this subsection 
                      $15,000,000.''.

    (c) Certain Uses.--Section 524(b)(4) of the Federal Crop Insurance 
Act (7 U.S.C. 1524(b)(4)) is amended by adding at the end the following 
new subparagraph:
                    ``(C) Certain uses.--Of the amounts made available 
                to carry out this subsection for a fiscal year, the 
                Commodity Credit Corporation shall use not less than--
                          ``(i) 50 percent to carry out subparagraphs 
                      (A), (B), and (C) of paragraph (2) through the 
                      Natural Resources Conservation Service;
                          ``(ii) 10 percent to provide organic 
                      certification cost share assistance through the 
                      Agricultural Marketing Service; and
                          ``(iii) 40 percent to conduct activities to 
                      carry out subparagraph (F) of paragraph (2) 
                      through the Risk Management Agency.''.
SEC. 2802. TECHNICAL ASSISTANCE UNDER SOIL CONSERVATION AND 
                          DOMESTIC ALLOTMENT ACT.

    (a) Prevention of Soil Erosion.--
            (1) In general.--The first section of the Soil Conservation 
        and Domestic Allotment Act (16 U.S.C. 590a) is amended--
                    (A) by striking ``That it'' and inserting the 
                following:
``SECTION 1. PURPOSE.

    ``It''; and
                    (B) in the matter preceding paragraph (1), by 
                striking ``and thereby to preserve natural resources,'' 
                and inserting ``to preserve soil, water, and related 
                resources, promote soil and water quality,''.
            (2) Policies and purposes.--Section 7(a)(1) of the Soil 
        Conservation and Domestic Allotment Act (16 U.S.C. 590g(a)(1)) 
        is amended by striking ``fertility'' and inserting ``and water 
        quality and related resources''.

    (b) Definitions.--Section 10 of the Soil Conservation and Domestic 
Allotment Act (16 U.S.C. 590j) is amended to read as follows:

[[Page 122 STAT. 1086]]

``SEC. 10. DEFINITIONS.

    ``In this Act:
            ``(1) Agricultural commodity.--The term `agricultural 
        commodity' means--
                    ``(A) an agricultural commodity; and
                    ``(B) any regional or market classification, type, 
                or grade of an agricultural commodity.
            ``(2) Technical assistance.--
                    ``(A) In general.--The term `technical assistance' 
                means technical expertise, information, and tools 
                necessary for the conservation of natural resources on 
                land active in agricultural, forestry, or related uses.
                    ``(B) Inclusions.--The term `technical assistance' 
                includes--
                          ``(i) technical services provided directly to 
                      farmers, ranchers, and other eligible entities, 
                      such as conservation planning, technical 
                      consultation, and assistance with design and 
                      implementation of conservation practices; and
                          ``(ii) technical infrastructure, including 
                      activities, processes, tools, and agency functions 
                      needed to support delivery of technical services, 
                      such as technical standards, resource inventories, 
                      training, data, technology, monitoring, and 
                      effects analyses.''.
SEC. 2803. SMALL WATERSHED REHABILITATION PROGRAM.

    (a) Availability of Funds.--Section 14(h)(1) of the Watershed 
Protection and Flood Prevention Act (16 U.S.C. 1012(h)(1)) is amended by 
adding at the end the following new subparagraph:
                    ``(G) $100,000,000 for fiscal year 2009, to be 
                available until expended.''.

    (b) Authorization of Appropriations.--Section 14(h)(2)(E) of the 
Watershed Protection and Flood Prevention Act (16 U.S.C. 1012(h)(2)(E)) 
is amended by striking ``fiscal year 2007'' and inserting ``each of 
fiscal years 2008 through 2012''.
SEC. 2804. AMENDMENTS TO SOIL AND WATER RESOURCES CONSERVATION ACT 
                          OF 1977.

    (a) Congressional Findings.--Section 2 of the Soil and Water 
Resources Conservation Act of 1977 (16 U.S.C. 2001) is amended--
            (1) in paragraph (2), by striking ``base, of the'' and 
        inserting ``base of the''; and
            (2) in paragraph (3), by striking ``(3)'' and all that 
        follows through ``Since individual'' and inserting the 
        following:
            ``(3) Appraisal and inventory of resources, assessment and 
        inventory of conservation needs, evaluation of the effects of 
        conservation practices, and analyses of alternative approaches 
        to existing conservation programs are basic to effective soil, 
        water, and related natural resource conservation.
            ``(4) Since individual''.

    (b) Continuing Appraisal of Soil, Water, and Related Resources.--
Section 5 of the Soil and Water Resources Conservation Act of 1977 (16 
U.S.C. 2004) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (5), by striking ``and'' at the 
                end;
                    (B) in paragraph (6), by striking the period at the 
                end and inserting ``; and''; and

[[Page 122 STAT. 1087]]

                    (C) by adding at the end the following new 
                paragraph:
            ``(7) data on conservation plans, conservation practices 
        planned or implemented, environmental outcomes, economic costs, 
        and related matters under conservation programs administered by 
        the Secretary.'';
            (2) by redesignating subsection (d) as subsection (e);
            (3) by inserting after subsection (c) the following new 
        subsection:

    ``(d) Evaluation of Appraisal.--In conducting the appraisal 
described in subsection (a), the Secretary shall concurrently solicit 
and evaluate recommendations for improving the appraisal, including the 
content, scope, process, participation in, and other elements of the 
appraisal, as determined by the Secretary.''; and
            (4) in subsection (e), as redesignated by paragraph (2), by 
        striking the first sentence and inserting the following: ``The 
        Secretary shall conduct comprehensive appraisals under this 
        section, to be completed by December 31, 2010, and December 31, 
        2015.''.

    (c) Soil and Water Conservation Program.--Section 6 of the Soil and 
Water Resources Conservation Act of 1977 (16 U.S.C. 2005) is amended--
            (1) by redesignating subsection (b) as subsection (d);
            (2) by inserting after subsection (a) the following new 
        subsections:

    ``(b) Evaluation of Existing Conservation Programs.--In evaluating 
existing conservation programs, the Secretary shall emphasize 
demonstration, innovation, and monitoring of specific program components 
in order to encourage further development and adoption of practices and 
performance-based standards.
    ``(c) Improvement to Program.--In developing a national soil and 
water conservation program under subsection (a), the Secretary shall 
solicit and evaluate recommendations for improving the program, 
including the content, scope, process, participation in, and other 
elements of the program, as determined by the Secretary.''; and
            (3) in subsection (d), as redesignated by paragraph (1), by 
        striking ``December 31, 1979'' and all that follows through 
        ``December 31, 2007'' and inserting ``December 31, 2011, and 
        December 31, 2016''.

    (d) Reports to Congress.--Section 7 of the Soil and Water Resources 
Conservation Act of 1977 (16 U.S.C. 2006) is amended to read as follows:
``SEC. 7. <<NOTE: President.>> REPORTS TO CONGRESS.

    ``(a) Appraisal.--Not later than the date on which Congress convenes 
in 2011 and 2016, the President shall transmit to the Committee on 
Agriculture of the House of Representatives and the Committee on 
Agriculture, Nutrition, and Forestry of the Senate the appraisal 
developed under section 5 and completed before the end of the previous 
year.
    ``(b) Program and Statement of Policy.--Not later than the date on 
which Congress convenes in 2012 and 2017, the President shall transmit 
to the Committee on Agriculture of the House of Representatives and the 
Committee on Agriculture, Nutrition, and Forestry of the Senate--

[[Page 122 STAT. 1088]]

            ``(1) the initial program or updated program developed under 
        section 6 and completed before the end of the previous year;
            ``(2) a detailed statement of policy regarding soil and 
        water conservation activities of the Department of Agriculture; 
        and
            ``(3) a special evaluation of the status, conditions, and 
        trends of soil quality on cropland in the United States that 
        addresses the challenges and opportunities for reducing soil 
        erosion to tolerance levels.

    ``(c) Improvements to Appraisal and Program.--Not later than the 
date on which Congress convenes in 2012, 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 plans of the Department of Agriculture for improving the 
resource appraisal and national conservation program required under this 
Act, based on the recommendations received under sections 5(d) and 
6(c).''.
    (e) Termination of Program.--Section 10 of the Soil and Water 
Resources Conservation Act of 1977 (16 U.S.C. 2009) is amended by 
striking ``2008'' and inserting ``2018''.
SEC. 2805. RESOURCE CONSERVATION AND DEVELOPMENT PROGRAM.

    (a) Locally Led Planning Process.--Section 1528 of the Agriculture 
and Food Act of 1981 (16 U.S.C. 3451) is amended--
            (1) in paragraph (1), in the matter preceding subparagraph 
        (A), by striking ``planning process'' and inserting ``locally 
        led planning process'';
            (2) by redesignating paragraphs (8) and (9) as paragraphs 
        (9) and (8), respectively, and moving those paragraphs so as to 
        appear in numerical order;
            (3) in paragraph (8) (as so redesignated)--
                    (A) by striking ``planning process'' and inserting 
                ``Locally led planning process''; and
                    (B) by striking ``council'' and inserting ``locally 
                led council''.

    (b) Authorized Technical Assistance.--Section 1528(13) of the 
Agriculture and Food Act of 1981 (16 U.S.C. 3451(13)) is amended by 
striking subparagraphs (C) and (D) and inserting the following new 
subparagraphs:
                    ``(C) providing assistance for the implementation of 
                area plans and projects; and
                    ``(D) providing services that involve the resources 
                of Department of Agriculture programs in a local 
                community, as defined in the locally led planning 
                process.''.

    (c) Improved Provision of Technical Assistance.--Section 1531 of the 
Agriculture and Food Act of 1981 (16 U.S.C. 3454) is amended--
            (1) by inserting ``(a) In General.--'' before ``In 
        carrying''; and
            (2) by adding at the end the following new subsection:

    ``(b) Coordinator.--
            ``(1) In general.--To improve the provision of technical 
        assistance to councils under this subtitle, the Secretary shall 
        designate for each council an individual to be the coordinator 
        for the council.

[[Page 122 STAT. 1089]]

            ``(2) Responsibility.--A coordinator for a council shall be 
        directly responsible for the provision of technical assistance 
        to the council.''.

    (d) Program Evaluation.--Section 1534 of the Agriculture and Food 
Act of 1981 (16 U.S.C. 3457) is repealed.
SEC. 2806. USE OF FUNDS IN BASIN FUNDS FOR SALINITY CONTROL 
                          ACTIVITIES UPSTREAM OF IMPERIAL DAM.

    (a) In General.--Section 202(a) of the Colorado River Basin Salinity 
Control Act (43 U.S.C. 1592(a)) is amended by adding at the end the 
following new paragraph:
            ``(7) Basin states program.--
                    ``(A) In general.--A Basin States Program that the 
                Secretary, acting through the Bureau of Reclamation, 
                shall implement to carry out salinity control activities 
                in the Colorado River Basin using funds made available 
                under section 205(f).
                    ``(B) Assistance.--The Secretary, in consultation 
                with the Colorado River Basin Salinity Control Advisory 
                Council, shall carry out this paragraph using funds 
                described in subparagraph (A) directly or by providing 
                grants, grant commitments, or advance funds to Federal 
                or non-Federal entities under such terms and conditions 
                as the Secretary may require.
                    ``(C) Activities.--Funds described in subparagraph 
                (A) shall be used to carry out, as determined by the 
                Secretary--
                          ``(i) cost-effective measures and associated 
                      works to reduce salinity from saline springs, 
                      leaking wells, irrigation sources, industrial 
                      sources, erosion of public and private land, or 
                      other sources;
                          ``(ii) operation and maintenance of salinity 
                      control features constructed under the Colorado 
                      River Basin salinity control program; and
                          ``(iii) studies, planning, and administration 
                      of salinity control activities.
                    ``(D) Report.--
                          ``(i) In general.--Not later than 30 days 
                      before implementing the program established under 
                      this paragraph, the Secretary shall submit to the 
                      appropriate committees of Congress a planning 
                      report that describes the proposed implementation 
                      of the program.
                          ``(ii) Implementation.--The Secretary may not 
                      expend funds to implement the program established 
                      under this paragraph before the expiration of the 
                      30-day period beginning on the date on which the 
                      Secretary submits the report, or any revision to 
                      the report, under clause (i).''.

    (b) Conforming Amendments.--
            (1) Section 202 of the Colorado River Basin Salinity Control 
        Act (43 U.S.C. 1592) is amended--
                    (A) in subsection (a), in the matter preceding 
                paragraph (1), by striking ``program'' and inserting 
                ``programs''; and
                    (B) in subsection (b)(4)--
                          (i) by striking ``program'' and inserting 
                      ``programs''; and
                          (ii) by striking ``and (6)'' and inserting 
                      ``(6), and (7)''.

[[Page 122 STAT. 1090]]

            (2) Section 205 of the Colorado River Basin Salinity Control 
        Act (43 U.S.C. 1595) is amended by striking subsection (f) and 
        inserting the following new subsection:

    ``(f) Up-Front Cost Share.--
            ``(1) In general.--Effective <<NOTE: Effective 
        date.>> beginning on the date of enactment of this paragraph, 
        subject to paragraph (3), the cost share obligations required by 
        this section shall be met through an up-front cost share from 
        the Basin Funds, in the same proportions as the cost allocations 
        required under subsection (a), as provided in paragraph (2).
            ``(2) Basin states program.--The Secretary shall expend the 
        required cost share funds described in paragraph (1) through the 
        Basin States Program for salinity control activities established 
        under section 202(a)(7).
            ``(3) Existing salinity control activities.--The cost share 
        contribution required by this section shall continue to be met 
        through repayment in a manner consistent with this section for 
        all salinity control activities for which repayment was 
        commenced prior to the date of enactment of this paragraph.''.
SEC. 2807. DESERT TERMINAL LAKES.

    Section 2507 of the Farm Security and Rural Investment Act of 2002 
(43 U.S.C. 2211 note; Public Law 107-171) is amended--
            (1) in subsection (a)--
                    (A) by striking ``(a)'' and all that follows through 
                ``$200,000,000'' and inserting ``(a) Transfer.--Subject 
                to subsection (b) and paragraph (1) of section 207(a) of 
                Public Law 108-7 (117 Stat. 146), notwithstanding 
                paragraph (3) of that section, on the date of enactment 
                of the Food, Conservation, and Energy Act of 2008, the 
                Secretary of Agriculture shall transfer $175,000,000''; 
                and
                    (B) by striking the quotation marks at the beginning 
                of paragraphs (1) and (2); and
            (2) by striking subsection (b) and inserting the following 
        new subsection:

    ``(b) Permitted Uses.--In any case in which there are willing 
sellers, the funds described in subsection (a) may be used--
            ``(1) to lease water; or
            ``(2) to purchase land, water appurtenant to the land, and 
        related interests in the Walker River Basin in accordance with 
        section 208(a)(1)(A) of the Energy and Water Development 
        Appropriations Act, 2006 (Public Law 109-103; 119 Stat. 
        2268).''.

            Subtitle J--Miscellaneous Conservation Provisions

SEC. 2901. <<NOTE: Texas.>> HIGH PLAINS WATER STUDY.

    Notwithstanding any other provision of this Act, no person shall 
become ineligible for any program benefits under this Act or an 
amendment made by this Act solely as a result of participating in a 1-
time study of recharge potential for the Ogallala Aquifer in the High 
Plains of the State of Texas.

[[Page 122 STAT. 1091]]

SEC. 2902. NAMING OF NATIONAL PLANT MATERIALS CENTER AT 
                          BELTSVILLE, MARYLAND, IN HONOR OF NORMAN 
                          A. BERG.

    The National Plant Materials Center at Beltsville, Maryland, 
referenced in section 613.5(a) of title 7, Code of Federal Regulations, 
shall be known and designated as the ``Norman A. Berg National Plant 
Materials Center''. Any reference in a law, map, regulation, document, 
paper, or other record of the United States to such National Plant 
Materials Center shall be deemed to be a reference to the Norman A. Berg 
National Plant Materials Center.
SEC. 2903. TRANSITION.

    (a) <<NOTE: 16 USC 3801 note.>>  Continuation of Programs in Fiscal 
Year 2008.--Except as otherwise provided by an amendment made by this 
title, the Secretary of Agriculture shall continue to carry out any 
program or activity covered by title XII of the Food Security Act (16 
U.S.C. 3801 et seq.) until September 30, 2008, using the provisions of 
law applicable to the program or activity as they existed on the day 
before the date of the enactment of this Act and using funds made 
available under such title for fiscal year 2008 for the program or 
activity.

    (b) Ground and Surface <<NOTE: Time period. 16 USC 3839aa-9 
note.>> Water Conservation Program.--During the period beginning on the 
date of the enactment of this Act and ending on September 30, 2008, the 
Secretary of Agriculture shall continue to carry out the ground and 
surface water conservation program under section 1240I of the Food 
Security Act of 1985 (16 U.S.C. 3839aa-9), as in effect before the 
amendment made by section 2510, using the terms, conditions, and funds 
available to the Secretary to carry out such program on the day before 
the date of the enactment of this Act.
SEC. 2904. REGULATIONS.

    (a) Issuance.--Except as <<NOTE: Deadline.>> 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.

    (b) Applicable Authority.--The promulgation of regulations under 
subsection (a) and administration of this title--
            (1) shall be carried out without regard to--
                    (A) 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.

[[Page 122 STAT. 1092]]

                           TITLE IV--NUTRITION

                     Subtitle A--Food Stamp Program

             PART I--RENAMING OF FOOD STAMP ACT AND PROGRAM

SEC. 4001. RENAMING OF FOOD STAMP ACT AND PROGRAM.

    (a) Short Title.--The first section of the Food Stamp Act of 1977 (7 
U.S.C. 2011 note; Public Law 88-525) is amended by striking ``Food Stamp 
Act of 1977'' and inserting ``Food and Nutrition Act of 2008''.
    (b) Program.--The Food and Nutrition Act of 2008 (7 U.S.C. 2011 et 
seq.) (as amended by subsection (a)) is amended by striking ``food stamp 
program'' each place it appears and inserting ``supplemental nutrition 
assistance program''.
SEC. 4002. CONFORMING AMENDMENTS.

    (a) In General.--
            (1) Section 4 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2013) is amended in the section heading by striking 
        ``food stamp program'' and inserting ``supplemental nutrition 
        assistance program''.
            (2) Section 5(h)(2)(A) of the Food and Nutrition Act of 2008 
        (7 U.S.C. 2014(h)(2)(A)) is amended by striking ``Food Stamp 
        Disaster Task Force'' and inserting ``Disaster Task Force''.
            (3) Section 6 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2015) is amended--
                    (A) in subsection (d)(3), by striking ``for food 
                stamps'';
                    (B) in subsection (j), in the subsection heading, by 
                striking ``Food Stamp''; and
                    (C) in subsection (o)--
                          (i) in paragraph (2), by striking ``food stamp 
                      benefits'' and inserting ``supplemental nutrition 
                      assistance program benefits''; and
                          (ii) in paragraph (6)--
                                    (I) in subparagraph (A)--
                                            (aa) in clause (i), by 
                                        striking ``food stamps'' and 
                                        inserting ``supplemental 
                                        nutrition assistance program 
                                        benefits''; and
                                            (bb) in clause (ii)--

                                              
                                              
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                                    (II) in subparagraphs (D) and (E), 
                                by striking ``food stamp recipients'' 
                                each place it appears and inserting 
                                ``members of households that receive

[[Page 122 STAT. 1093]]

                                supplemental nutrition assistance 
                                program benefits''.
            (4) Section 7 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2016) is amended--
                    (A) in subsection (i)--
                          (i) in paragraph (3)(B)(ii), by striking 
                      ``food stamp households'' and inserting 
                      ``households receiving supplemental nutrition 
                      assistance program benefits''; and
                          (ii) in paragraph (7), by striking ``food 
                      stamp issuance'' and inserting ``supplemental 
                      nutrition assistance issuance''; and
                    (B) in subsection (k)--
                          (i) in paragraph (2), by striking ``food stamp 
                      benefits'' and inserting ``supplemental nutrition 
                      assistance program benefits''; and
                          (ii) in paragraph (3), by striking ``food 
                      stamp retail'' and inserting ``retail''.
            (5) Section 9(b)(1) of that Food and Nutrition Act of 2008 
        (7 U.S.C. 2018(b)(1)) is amended by striking ``food stamp 
        households'' and inserting ``households that receive 
        supplemental nutrition assistance program benefits''.
            (6) Section 11 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2020) is amended--
                    (A) in subsection (e)--
                          (i) by striking ``food stamps'' each place it 
                      appears and inserting ``supplemental nutrition 
                      assistance program benefits'';
                          (ii) by striking ``food stamp offices'' each 
                      place it appears and inserting ``supplemental 
                      nutrition assistance program offices'';
                          (iii) by striking ``food stamp office'' each 
                      place it appears and inserting ``supplemental 
                      nutrition assistance program office''; and
                          (iv) in paragraph (25)--
                                    (I) in the matter preceding 
                                subparagraph (A), by striking 
                                ``Simplified Food Stamp Program'' and 
                                inserting ``Simplified Supplemental 
                                Nutrition Assistance Program''; and
                                    (II) in subparagraph (A), by 
                                striking ``food stamp benefits'' and 
                                inserting ``supplemental nutrition 
                                assistance program benefits'';
                    (B) in subsection (k), by striking ``may issue, upon 
                request by the State agency, food stamps'' and inserting 
                ``may provide, on request by the State agency, 
                supplemental nutrition assistance program benefits'';
                    (C) in subsection (l), by striking ``food stamp 
                participation'' and inserting ``supplemental nutrition 
                assistance program participation'';
                    (D) in subsections (q) and (r), in the subsection 
                headings, by striking ``Food Stamps'' each place it 
                appears and inserting ``Benefits'';
                    (E) in subsection (s), by striking ``food stamp 
                benefits'' each place it appears and inserting 
                ``supplemental nutrition assistance program benefits''; 
                and
                    (F) in subsection (t)(1)--

[[Page 122 STAT. 1094]]

                          (i) in subparagraph (A), by striking ``food 
                      stamp application'' and inserting ``supplemental 
                      nutrition assistance program application''; and
                          (ii) in subparagraph (B), by striking ``food 
                      stamp benefits'' and inserting ``supplemental 
                      nutrition assistance program benefits''.
            (7) Section 14(b) of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2023(b)) is amended by striking ``food stamp''.
            (8) Section 16 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2025) is amended--
                    (A) in subsection (a)(4), by striking ``food stamp 
                informational activities'' and inserting ``informational 
                activities relating to the supplemental nutrition 
                assistance program'';
                    (B) in subsection (c)(9)(C), by striking ``food 
                stamp caseload'' and inserting ``the caseload under the 
                supplemental nutrition assistance program''; and
                    (C) in subsection (h)(1)(E)(i), by striking ``food 
                stamp recipients'' and inserting ``members of households 
                receiving supplemental nutrition assistance program 
                benefits''.
            (9) Section 17 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2026) is amended--
                    (A) in subsection (a)(2), by striking ``food stamp 
                benefits'' each place it appears and inserting 
                ``supplemental nutrition assistance program benefits'';
                    (B) in subsection (b)--
                          (i) in paragraph (1)--
                                    (I) in subparagraph (A), by striking 
                                ``food stamp benefits'' and inserting 
                                ``supplemental nutrition assistance 
                                program benefits''; and
                                    (II) in subparagraph (B)--
                                            (aa) in clause (ii)(II), by 
                                        striking ``food stamp 
                                        recipients'' and inserting 
                                        ``supplemental nutrition 
                                        assistance program recipients'';
                                            (bb) in clause (iii)(I), by 
                                        striking ``the State's food 
                                        stamp households'' and inserting 
                                        ``the number of households in 
                                        the State receiving supplemental 
                                        nutrition assistance program 
                                        benefits''; and
                                            (cc) in clause (iv)(IV)(bb), 
                                        by striking ``food stamp 
                                        deductions'' and inserting 
                                        ``supplemental nutrition 
                                        assistance program deductions'';
                          (ii) in paragraph (2), by striking ``food 
                      stamp benefits'' and inserting ``supplemental 
                      nutrition assistance program benefits''; and
                          (iii) in paragraph (3)--
                                    (I) in subparagraph (A), by striking 
                                ``food stamp employment'' and inserting 
                                ``supplemental nutrition assistance 
                                program employment'';
                                    (II) in subparagraph (B), by 
                                striking ``food stamp recipients'' and 
                                inserting ``supplemental nutrition 
                                assistance program recipients'';
                                    (III) in subparagraph (C), by 
                                striking ``food stamps'' and inserting 
                                ``supplemental nutrition assistance 
                                program benefits''; and

[[Page 122 STAT. 1095]]

                                    (IV) in subparagraph (D), by 
                                striking ``food stamp benefits'' and 
                                inserting ``supplemental nutrition 
                                assistance program benefits'';
                    (C) in subsection (c), by striking ``food stamps'' 
                and inserting ``supplemental nutrition assistance'';
                    (D) in subsection (d)--
                          (i) in paragraph (1)(B), by striking ``food 
                      stamp benefits'' and inserting ``supplemental 
                      nutrition assistance program benefits'';
                          (ii) in paragraph (2)--
                                    (I) in subparagraph (A), by striking 
                                ``food stamp allotments'' each place it 
                                appears and inserting ``allotments''; 
                                and
                                    (II) in subparagraph (C)(ii), by 
                                striking ``food stamp benefit'' and 
                                inserting ``supplemental nutrition 
                                assistance program benefits''; and
                          (iii) in paragraph (3)(E), by striking ``food 
                      stamp benefits'' and inserting ``supplemental 
                      nutrition assistance program benefits'';
                    (E) in subsections (e) and (f), by striking ``food 
                stamp benefits'' each place it appears and inserting 
                ``supplemental nutrition assistance program benefits'';
                    (F) in subsection (g), in the first sentence, by 
                striking ``receipt of food stamp'' and inserting 
                ``receipt of supplemental nutrition assistance 
                program''; and
                    (G) in subsection (j), by striking ``food stamp 
                agencies'' and inserting ``supplemental nutrition 
                assistance program agencies''.
            (10) Section 18(a)(3)(A)(ii) of the Food and Nutrition Act 
        of 2008 (7 U.S.C. 2027(a)(3)(A)(ii)) is amended by striking 
        ``food stamps'' and inserting ``supplemental nutrition 
        assistance program benefits''.
            (11) Section 22 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2031) is amended--
                    (A) in the section heading, by striking ``food stamp 
                portion of minnesota family investment plan'' and 
                inserting ``minnesota family investment project'';
                    (B) in subsections (b)(12) and (d)(3), by striking 
                ``the Food Stamp Act, as amended,'' each place it 
                appears and inserting ``this Act''; and
                    (C) in subsection (g)(1), by striking ``the Food 
                Stamp Act of 1977 (7 U.S.C. 2011 et seq.)'' and 
                inserting ``this Act''.
            (12) Section 26 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2035) is amended--
                    (A) in the section heading, by striking ``simplified 
                food stamp program'' and inserting ``simplified 
                supplemental nutrition assistance program''; and
                    (B) in subsection (b), by striking ``simplified food 
                stamp program'' and inserting ``simplified supplemental 
                nutrition assistance program''.

    (b) Conforming Cross-References.--
            (1) In general.--Each provision of law described in 
        paragraph (2) is amended (as applicable)--
                    (A) by striking ``food stamp program'' each place it 
                appears and inserting ``supplemental nutrition 
                assistance program'';

[[Page 122 STAT. 1096]]

                    (B) by striking ``Food Stamp Act of 1977'' each 
                place it appears and inserting ``Food and Nutrition Act 
                of 2008'';
                    (C) by striking ``Food Stamp Act'' each place it 
                appears and inserting ``Food and Nutrition Act of 
                2008'';
                    (D) by striking ``food stamp'' each place it appears 
                and inserting ``supplemental nutrition assistance 
                program benefits'';
                    (E) by striking ``food stamps'' each place it 
                appears and inserting ``supplemental nutrition 
                assistance program benefits'';
                    (F) in each applicable title, subtitle, chapter, 
                subchapter, and section heading, by striking ``food 
                stamp act'' each place it appears and inserting ``food 
                and nutrition act of 2008'';
                    (G) in each applicable subsection and appropriations 
                heading, by striking ``Food Stamp Act'' each place it 
                appears and inserting ``Food and Nutrition Act of 
                2008'';
                    (H) in each applicable heading other than a title, 
                subtitle, chapter, subchapter, section, subsection, or 
                appropriations heading, by striking ``food stamp act'' 
                each place it appears and inserting ``food and nutrition 
                act of 2008'';
                    (I) in each applicable title, subtitle, chapter, 
                subchapter, and section heading, by striking ``food 
                stamp program'' each place it appears and inserting 
                ``supplemental nutrition assistance program'';
                    (J) in each applicable subsection and appropriations 
                heading, by striking ``Food Stamp Program'' each place 
                it appears and inserting ``Supplemental Nutrition 
                Assistance Program'';
                    (K) in each applicable heading other than a title, 
                subtitle, chapter, subchapter, section, subsection, or 
                appropriations heading, by striking ``food stamp 
                program'' each place it appears and inserting 
                ``supplemental nutrition assistance program'';
                    (L) in each applicable title, subtitle, chapter, 
                subchapter, and section heading, by striking ``food 
                stamps'' each place it appears and inserting 
                ``supplemental nutrition assistance program benefits'';
                    (M) in each applicable subsection and appropriations 
                heading, by striking ``Food Stamps'' each place it 
                appears and inserting ``Supplemental Nutrition 
                Assistance Program Benefits''; and
                    (N) in each applicable heading other than a title, 
                subtitle, chapter, subchapter, section, subsection, or 
                appropriations heading, by striking ``food stamps'' each 
                place it appears and inserting ``supplemental nutrition 
                assistance program benefits''.
            (2) Provisions of law.--The provisions of law referred to in 
        paragraph (1) are the following:
                    (A) <<NOTE: 7 USC 2012 note.>>  The Hunger 
                Prevention Act of 1988 (Public Law 100-435; 102 Stat. 
                1645).
                    (B) <<NOTE: 7 USC 2012 note.>>  The Food Stamp 
                Program Improvements Act of 1994 (Public Law 103-225; 
                108 Stat. 106).
                    (C) <<NOTE: 7 USC 20163et seq.>>  Title IV of the 
                Farm Security and Rural Investment Act of 2002 (Public 
                Law 107-171; 116 Stat. 305).

[[Page 122 STAT. 1097]]

                    (D) Section 2 of Public Law 103-205 (7 U.S.C. 2012 
                note).
                    (E) Section 807(b) of the Stewart B. McKinney 
                Homeless Assistance Act (7 U.S.C. 2014 note; Public Law 
                100-77).
                    (F) <<NOTE: 7 USC 2016 note.>>  The Electronic 
                Benefit Transfer Interoperability and Portability Act of 
                2000 (Public Law 106-171; 114 Stat. 3).
                    (G) Section 502(b) of the Agricultural Research, 
                Extension, and Education Reform Act of 1998 (7 U.S.C. 
                2025 note; Public Law 105-185).
                    (H) <<NOTE: 7 USC 3315.>>  The National Agricultural 
                Research, Extension, and Teaching Policy Act of 1977 (7 
                U.S.C. 3101 et seq.).
                    (I) <<NOTE: 7 USC 7509.>>  The Emergency Food 
                Assistance Act of 1983 (7 U.S.C. 7501 et seq.).
                    (J) <<NOTE: 8 USC 1255a.>>  The Immigration and 
                Nationality Act (8 U.S.C. 1101 et seq.).
                    (K) Section 8119 of the Department of Defense 
                Appropriations Act, 1999 (10 U.S.C. 113 note; Public Law 
                105-262).
                    (L) <<NOTE: 15 USC 5901, 5904.>>  The Armored Car 
                Industry Reciprocity Act of 1993 (15 U.S.C. 5901 et 
                seq.).
                    (M) <<NOTE: 18 USC 506, 1956. 20 USC 1087ss.>>  
                Title 18, United States Code.
                    (N) The Higher Education Act of 1965 (20 U.S.C. 1001 
                et seq.).
                    (O) <<NOTE: 26 USC 32 et seq.>>  The Internal 
                Revenue Code of 1986.
                    (P) Section 650 of the Treasury and General 
                Government Appropriations Act, 2000 (26 U.S.C. 7801 
                note; Public Law 106-58).
                    (Q) <<NOTE: 29 USC 49b.>>  The Wagner-Peysner Act 
                (29 U.S.C. 49 et seq.).
                    (R) <<NOTE: 20 USC 29713et seq.>>  The Workforce 
                Investment Act of 1998 (29 U.S.C. 2801 et seq.).
                    (S) <<NOTE: 31 USC 3803.>>  Title 31, United States 
                Code.
                    (T) <<NOTE: 37 USC 402a.>>  Title 37, United States 
                Code.
                    (U) <<NOTE: 42 USC 290cc-22.>>  The Public Health 
                Service Act (42 U.S.C. 201 et seq.).
                    (V) <<NOTE: 42 USC 4053et seq.>>  Titles II through 
                XIX of the Social Security Act (42 U.S.C. 401 et seq.).
                    (W) Section 406 of the Family Support Act of 1988 
                (Public Law 100-485; 102 Stat. 2400).
                    (X) Section 232 of the Social Security Act 
                Amendments of 1994 (42 U.S.C. 1314a).
                    (Y) <<NOTE: 42 USC 1437f.>>  The United States 
                Housing Act of 1937 (42 U.S.C. 1437 et seq.).
                    (Z) <<NOTE: 42 USC 1758, 1766.>>  The Richard B. 
                Russell National School Lunch Act (42 U.S.C. 1751 et 
                seq.).
                    (AA) <<NOTE: 42 USC 1786.>>  The Child Nutrition Act 
                of 1966 (42 U.S.C. 1771 et seq.).
                    (BB) <<NOTE: 42 USC 30123et seq.>>  The Older 
                Americans Act of 1965 (42 U.S.C. 3001 et seq.).
                    (CC) Section 208 of the Intergovernmental Personnel 
                Act of 1970 (42 U.S.C. 4728).
                    (DD) <<NOTE: 42 USC 5179.>>  The Robert T. Stafford 
                Disaster Relief and Emergency Assistance Act (42 U.S.C. 
                5121 et seq.).
                    (EE) <<NOTE: 42 USC 8622, 8624.>>  The Low-Income 
                Home Energy Assistance Act of 1981 (42 U.S.C. 8621 et 
                seq.).

[[Page 122 STAT. 1098]]

                    (FF) Section 658K of the Child Care and Development 
                Block Grant Act of 1990 (42 U.S.C. 9858i).
                    (GG) <<NOTE: 43 USC 1626.>>  The Alaska Native 
                Claims Settlement Act (43 U.S.C. 1601 et seq.).
                    (HH) <<NOTE: 48 USC 1841.>>  Public Law 95-348 (92 
                Stat. 487).
                    (II) <<NOTE: 7 USC 2270, 4004a.>>  The Agriculture 
                and Food Act of 1981 (Public Law 97-98; 95 Stat. 1213).
                    (JJ) <<NOTE: 7 USC 2014 note, 2017 note.>>  The 
                Disaster Assistance Act of 1988 (Public Law 100-387; 102 
                Stat. 924).
                    (KK) <<NOTE: 7 USC 20113et seq.>>  The Food, 
                Agriculture, Conservation, and Trade Act of 1990 (Public 
                Law 101-624; 104 Stat. 3359).
                    (LL) <<NOTE: 42 USC 8011.>>  The Cranston-Gonzalez 
                National Affordable Housing Act (Public Law 101-625; 104 
                Stat. 4079).
                    (MM) <<NOTE: 7 USC 1421 note.>>  Section 388 of the 
                Persian Gulf Conflict Supplemental Authorization and 
                Personnel Benefits Act of 1991 (Public Law 102-25; 105 
                Stat. 98).
                    (NN) <<NOTE: 7 USC 1421 note, 2026 note.>>  The 
                Food, Agriculture, Conservation, and Trade Act 
                Amendments of 1991 (Public Law 102-237; 105 Stat. 1818).
                    (OO) <<NOTE: 7 USC 2014 note.>>  The Act of March 
                26, 1992 (Public Law 102-265; 106 Stat. 90).
                    (PP) <<NOTE: 7 USC 2011 note, 2020 note.>>  Public 
                Law 105-379 (112 Stat. 3399).
                    (QQ) Section 101(c) of the Emergency Supplemental 
                Act, 2000 (Public Law 106-246; 114 Stat. 528).

    (c) <<NOTE: 7 USC 2012 note.>>  References.--Any reference in any 
Federal, State, tribal, or local law (including regulations) to the 
``food stamp program'' established under the Food and Nutrition Act of 
2008 (7 U.S.C. 2011 et seq.) shall be considered to be a reference to 
the ``supplemental nutrition assistance program'' established under that 
Act.

                      PART II--BENEFIT IMPROVEMENTS

SEC. 4101. EXCLUSION OF CERTAIN MILITARY PAYMENTS FROM INCOME.

    Section 5(d) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2014(d)) is amended--
            (1) by striking ``(d) Household'' and inserting ``(d) 
        Exclusions From Income.--Household'';
            (2) by striking ``only (1) any'' and inserting ``only--
            ``(1) any'';
            (3) by indenting each of paragraphs (2) through (18) so as 
        to align with the margin of paragraph (1) (as amended by 
        paragraph (2));
            (4) by striking the comma at the end of each of paragraphs 
        (1) through (16) and inserting a semicolon;
            (5) in paragraph (3)--
                    (A) by striking ``like (A) awarded'' and inserting 
                ``like--
                    ``(A) awarded'';
                    (B) by striking ``thereof, (B) to'' and inserting 
                ``thereof;
                    ``(B) to''; and
                    (C) by striking ``program, and (C) to'' and 
                inserting ``program; and
                    ``(C) to'';
            (6) in paragraph (11), by striking ``)), or (B) a'' and 
        inserting ``)); or
            ``(B) a'';

[[Page 122 STAT. 1099]]

            (7) in paragraph (17), by striking ``, and'' at the end and 
        inserting a semicolon;
            (8) in paragraph (18), by striking the period at the end and 
        inserting ``; and''; and
            (9) by adding at the end the following:
            ``(19) any additional payment under chapter 5 of title 37, 
        United States Code, or otherwise designated by the Secretary to 
        be appropriate for exclusion under this paragraph, that is 
        received by or from a member of the United States Armed Forces 
        deployed to a designated combat zone, if the additional pay--
                    ``(A) is the result of deployment to or service in a 
                combat zone; and
                    ``(B) was not received immediately prior to serving 
                in a combat zone.''.
SEC. 4102. STRENGTHENING THE FOOD PURCHASING POWER OF LOW-INCOME 
                          AMERICANS.

    Section 5(e)(1) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2014(e)(1)) is amended--
            (1) in subparagraph (A)(ii), by striking ``not less than 
        $134'' and all that follows through the end of the clause and 
        inserting the following: ``not less than--
                                    ``(I) for fiscal year 2009, $144, 
                                $246, $203, and $127, respectively; and
                                    ``(II) for fiscal year 2010 and each 
                                fiscal year thereafter, an amount that 
                                is equal to the amount from the previous 
                                fiscal year adjusted to the nearest 
                                lower dollar increment to reflect 
                                changes for the 12-month period ending 
                                on the preceding June 30 in the Consumer 
                                Price Index for All Urban Consumers 
                                published by the Bureau of Labor 
                                Statistics of the Department of Labor, 
                                for items other than food.'';
            (2) in subparagraph (B)(ii), by striking ``not less than 
        $269'' and all that follows through the end of the clause and 
        inserting the following: ``not less than--
                                    ``(I) for fiscal year 2009, $289; 
                                and
                                    ``(II) for fiscal year 2010 and each 
                                fiscal year thereafter, an amount that 
                                is equal to the amount from the previous 
                                fiscal year adjusted to the nearest 
                                lower dollar increment to reflect 
                                changes for the 12-month period ending 
                                on the preceding June 30 in the Consumer 
                                Price Index for All Urban Consumers 
                                published by the Bureau of Labor 
                                Statistics of the Department of Labor, 
                                for items other than food.''; and
            (3) by adding at the end the following:
                    ``(C) Requirement.--Each adjustment under 
                subparagraphs (A)(ii)(II) and (B)(ii)(II) shall be based 
                on the unrounded amount for the prior 12-month 
                period.''.
SEC. 4103. SUPPORTING WORKING FAMILIES WITH CHILD CARE EXPENSES.

    Section 5(e)(3)(A) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2014(e)(3)(A)) is amended by striking ``, the maximum allowable level of 
which shall be $200 per month for each dependent

[[Page 122 STAT. 1100]]

child under 2 years of age and $175 per month for each other 
dependent,''.
SEC. 4104. ASSET INDEXATION, EDUCATION, AND RETIREMENT ACCOUNTS.

    (a) Adjusting Countable Resources for Inflation.--Section (5)(g) of 
the Food and Nutrition Act of 2008 (7 U.S.C. 2014(g)) is amended--
            (1) by striking ``(g)(1) The Secretary'' and inserting the 
        following:

    ``(g) Allowable Financial Resources.--
            ``(1) Total amount.--
                    ``(A) In general.--The Secretary''.
            (2) in subparagraph (A) (as so designated by paragraph 
        (1))--
                    (A) by inserting ``(as adjusted in accordance with 
                subparagraph (B))'' after ``$2,000''; and
                    (B) by inserting ``(as adjusted in accordance with 
                subparagraph (B))'' after ``$3,000''; and
            (3) by adding at the end the following:
                    ``(B) Adjustment for inflation.--
                          ``(i) In general.--Beginning 
                      on <<NOTE: Effective date.>> October 1, 2008, and 
                      each October 1 thereafter, the amounts specified 
                      in subparagraph (A) shall be adjusted and rounded 
                      down to the nearest $250 increment to reflect 
                      changes for the 12-month period ending the 
                      preceding June in the Consumer Price Index for All 
                      Urban Consumers published by the Bureau of Labor 
                      Statistics of the Department of Labor.
                          ``(ii) Requirement.--Each adjustment under 
                      clause (i) shall be based on the unrounded amount 
                      for the prior 12-month period.''.

    (b) Exclusion of Retirement Accounts From Allowable Financial 
Resources.--
            (1) In general.--Section 5(g)(2)(B)(v) of the Food and 
        Nutrition Act of 2008 (7 U.S.C. 2014(g)(2)(B)(v)) is amended by 
        striking ``or retirement account (including an individual 
        account)'' and inserting ``account''.
            (2) Mandatory and discretionary exclusions.--Section 5(g) of 
        the Food and Nutrition Act of 2008 (7 U.S.C. 2014(g)) is amended 
        by adding at the end the following:
            ``(7) Exclusion of retirement accounts from allowable 
        financial resources.--
                    ``(A) Mandatory exclusions.--The Secretary shall 
                exclude from financial resources under this subsection 
                the value of--
                          ``(i) any funds in a plan, contract, or 
                      account, described in sections 401(a), 403(a), 
                      403(b), 408, 408A, 457(b), and 501(c)(18) of the 
                      Internal Revenue Code of 1986 and the value of 
                      funds in a Federal Thrift Savings Plan account as 
                      provided in section 8439 of title 5, United States 
                      Code; and
                          ``(ii) any retirement program or account 
                      included in any successor or similar provision 
                      that may be enacted and determined to be exempt 
                      from tax under the Internal Revenue Code of 1986.

[[Page 122 STAT. 1101]]

                    ``(B) Discretionary exclusions.--The Secretary may 
                exclude from financial resources under this subsection 
                the value of any other retirement plans, contracts, or 
                accounts (as determined by the Secretary).''.

    (c) Exclusion of Education Accounts From Allowable Financial 
Resources.--Section 5(g) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2014(g)) (as amended by subsection (b)) is amended by adding at the end 
the following:
            ``(8) Exclusion of education accounts from allowable 
        financial resources.--
                    ``(A) Mandatory exclusions.--The Secretary shall 
                exclude from financial resources under this subsection 
                the value of any funds in a qualified tuition program 
                described in section 529 of the Internal Revenue Code of 
                1986 or in a Coverdell education savings account under 
                section 530 of that Code.
                    ``(B) Discretionary exclusions.--The Secretary may 
                exclude from financial resources under this subsection 
                the value of any other education programs, contracts, or 
                accounts (as determined by the Secretary).''.
SEC. 4105. FACILITATING SIMPLIFIED REPORTING.

    Section 6(c)(1)(A) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2015(c)(1)(A)) is amended--
            (1) by striking ``reporting by'' and inserting 
        ``reporting'';
            (2) in clause (i), by inserting ``for periods shorter than 4 
        months by'' before ``migrant'';
            (3) in clause (ii), by inserting ``for periods shorter than 
        4 months by'' before ``households''; and
            (4) in clause (iii), by inserting ``for periods shorter than 
        1 year by'' before ``households''.
SEC. 4106. TRANSITIONAL BENEFITS OPTION.

    Section 11(s)(1) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2020(s)(1)) is amended--
            (1) by striking ``benefits to a household''; and inserting 
        ``benefits--
                    ``(A) to a household'';
            (2) by striking the period at the end and inserting ``; 
        or''; and
            (3) by adding at the end the following:
                    ``(B) at the option of the State, to a household 
                with children that ceases to receive cash assistance 
                under a State-funded public assistance program.''.
SEC. 4107. INCREASING THE MINIMUM BENEFIT.

    Section 8(a) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2017(a)) is amended by striking ``$10 per month'' and inserting ``8 
percent of the cost of the thrifty food plan for a household containing 
1 member, as determined by the Secretary under section 3, rounded to the 
nearest whole dollar increment''.
SEC. 4108. EMPLOYMENT, TRAINING, AND JOB RETENTION.

    Section 6(d)(4) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2015(d)(4)) is amended--
            (1) in subparagraph (B)--
                    (A) by redesignating clause (vii) as clause (viii); 
                and
                    (B) by inserting after clause (vi) the following:

[[Page 122 STAT. 1102]]

                          ``(vii) Programs intended to ensure job 
                      retention by providing job retention services, if 
                      the job retention services are provided for a 
                      period of not more than 90 days after an 
                      individual who received employment and training 
                      services under this paragraph gains employment.''; 
                      and
            (2) in subparagraph (F), by adding at the end the following:
                          ``(iii) Any individual voluntarily electing to 
                      participate in a program under this paragraph 
                      shall not be subject to the limitations described 
                      in clauses (i) and (ii).''.

                      PART III--PROGRAM OPERATIONS

SEC. 4111. NUTRITION EDUCATION.

    (a) Authority to Provide Nutrition Education.--Section 4(a) of the 
Food and Nutrition Act of 2008 (7 U.S.C. 2013(a)) is amended in the 
first sentence by inserting ``and, through an approved State plan, 
nutrition education'' after ``an allotment''.
    (b) Implementation.--Section 11 of the Food and Nutrition Act of 
2008 (7 U.S.C. 2020) is amended by striking subsection (f) and inserting 
the following:
    ``(f) Nutrition Education.--
            ``(1) In general.--State agencies may implement a nutrition 
        education program for individuals eligible for program benefits 
        that promotes healthy food choices consistent with the most 
        recent Dietary Guidelines for Americans published under section 
        301 of the National Nutrition Monitoring and Related Research 
        Act of 1990 (7 U.S.C. 5341).
            ``(2) Delivery of nutrition education.--State agencies may 
        deliver nutrition education directly to eligible persons or 
        through agreements with the National Institute of Food and 
        Agriculture, including through the expanded food and nutrition 
        education program under section 3(d) of the Act of May 8, 1914 
        (7 U.S.C. 343(d)), and other State and community health and 
        nutrition providers and organizations.
            ``(3) Nutrition education state plans.--
                    ``(A) In general.--A State agency that elects to 
                provide nutrition education under this subsection shall 
                submit a nutrition education State plan to the Secretary 
                for approval.
                    ``(B) Requirements.--The plan shall--
                          ``(i) identify the uses of the funding for 
                      local projects; and
                          ``(ii) conform to standards established by the 
                      Secretary through regulations or guidance.
                    ``(C) Reimbursement.--State costs for providing 
                nutrition education under this subsection shall be 
                reimbursed pursuant to section 16(a).
            ``(4) Notification.--To the maximum extent practicable, 
        State agencies shall notify applicants, participants, and 
        eligible program participants of the availability of nutrition 
        education under this subsection.''.
SEC. 4112. TECHNICAL CLARIFICATION REGARDING ELIGIBILITY.

    Section 6(k) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2015(k)) is amended--

[[Page 122 STAT. 1103]]

            (1) by redesignating paragraphs (1) and (2) as subparagraphs 
        (A) and (B), respectively, and indenting appropriately;
            (2) by striking ``No member'' and inserting the following:
            ``(1) In general.--No member''; and
            (3) by adding at the end the following:
            ``(2) Procedures.--The Secretary shall--
                    ``(A) define the terms `fleeing' and `actively 
                seeking' for purposes of this subsection; and
                    ``(B) ensure that State agencies use consistent 
                procedures established by the Secretary that disqualify 
                individuals whom law enforcement authorities are 
                actively seeking for the purpose of holding criminal 
                proceedings against the individual.''.
SEC. 4113. CLARIFICATION OF SPLIT ISSUANCE.

    Section 7(h) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2016(h)) is amended by striking paragraph (2) and inserting the 
following:
            ``(2) Requirements.--
                    ``(A) In general.--Any procedure established under 
                paragraph (1) shall--
                          ``(i) not reduce the allotment of any 
                      household for any period; and
                          ``(ii) ensure that no household experiences an 
                      interval between issuances of more than 40 days.
                    ``(B) Multiple issuances.--The procedure may include 
                issuing benefits to a household in more than 1 issuance 
                during a month only when a benefit correction is 
                necessary.''.
SEC. 4114. ACCRUAL OF BENEFITS.

    Section 7(i) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2016(i)) is amended by adding at the end the following:
            ``(12) Recovering electronic benefits.--
                    ``(A) In general.--A <<NOTE: Procedures.>> State 
                agency shall establish a procedure for recovering 
                electronic benefits from the account of a household due 
                to inactivity.
                    ``(B) Benefit storage.--A State agency may store 
                recovered electronic benefits off-line in accordance 
                with subparagraph (D), if the household has not accessed 
                the account after 6 months.
                    ``(C) Benefit expunging.--
                A <<NOTE: Deadline.>> State agency shall expunge 
                benefits that have not been accessed by a household 
                after a period of 12 months.
                    ``(D) Notice.--A State agency shall--
                          ``(i) send notice to a household the benefits 
                      of which are stored under subparagraph (B); and
                          ``(ii) not later than 48 hours after request 
                      by the household, make the stored benefits 
                      available to the household.''.
SEC. 4115. ISSUANCE AND USE OF PROGRAM BENEFITS.

    (a) In General.--Section 7 of the Food and Nutrition Act of 2008 (7 
U.S.C. 2016) is amended--
            (1) by striking the section designation and heading and all 
        that follows through ``subsection (j)) shall be'' and inserting 
        the following:

[[Page 122 STAT. 1104]]

``SEC. 7. ISSUANCE AND USE OF PROGRAM BENEFITS.

    ``(a) In General.--Except as provided in subsection (i), EBT cards 
shall be'';
            (2) in subsection (b)--
                    (A) by striking ``(b) Coupons'' and inserting the 
                following:

    ``(b) Use.--Benefits''; and
                    (B) by striking the second proviso;
            (3) in subsection (c)--
                    (A) by striking ``(c) Coupons'' and inserting the 
                following:

    ``(c) Design.--
            ``(1) In general.--EBT cards'';
                    (B) in the first sentence, by striking ``and define 
                their denomination''; and
                    (C) by striking the second sentence and inserting 
                the following:
            ``(2) Prohibition.--The name of any public official shall 
        not appear on any EBT card.'';
            (4) by striking subsection (d);
            (5) in subsection (e)--
                    (A) by striking ``coupons'' each place it appears 
                and inserting ``benefits''; and
                    (B) by striking ``coupon issuers'' each place it 
                appears and inserting ``benefit issuers'';
            (6) in subsection (f)--
                    (A) by striking ``coupons'' each place it appears 
                and inserting ``benefits'';
                    (B) by striking ``coupon issuer'' and inserting 
                ``benefit issuers'';
                    (C) by striking ``including any losses'' and all 
                that follows through ``section 11(e)(20),''; and
                    (D) by striking ``and allotments'';
            (7) by striking subsection (g) and inserting the following:

    ``(g) Alternative Benefit Delivery.--
            ``(1) In general.--If the Secretary determines, in 
        consultation with the Inspector General of the Department of 
        Agriculture, that it would improve the integrity of the 
        supplemental nutrition assistance program, the Secretary shall 
        require a State agency to issue or deliver benefits using 
        alternative methods.
            ``(2) No imposition of costs.--The cost of documents or 
        systems that may be required by this subsection may not be 
        imposed upon a retail food store participating in the 
        supplemental nutrition assistance program.
            ``(3) Devaluation and <<NOTE: Effective dates.>> termination 
        of issuance of paper coupons.--
                    ``(A) Coupon issuance.--Effective on the date of 
                enactment of the Food, Conservation, and Energy Act of 
                2008, no State shall issue any coupon, stamp, 
                certificate, or authorization card to a household that 
                receives supplemental nutrition assistance under this 
                Act.
                    ``(B) Ebt cards.--Effective beginning on the date 
                that is 1 year after the date of enactment of the Food, 
                Conservation, and Energy Act of 2008, only an EBT card 
                issued under subsection (i) shall be eligible for 
                exchange at any retail food store.

[[Page 122 STAT. 1105]]

                    ``(C) De-obligation of coupons.--Coupons not 
                redeemed during the 1-year period beginning on the date 
                of enactment of the Food, Conservation, and Energy Act 
                of 2008 shall--
                          ``(i) no longer be an obligation of the 
                      Federal Government; and
                          ``(ii) not be redeemable.'';
            (8) in subsection (h)(1), by striking ``coupons'' and 
        inserting ``benefits'';
            (9) in subsection (i), by adding at the end the following:
            ``(12) Interchange fees.--No interchange fees shall apply to 
        electronic benefit transfer transactions under this 
        subsection.'';
            (10) in subsection (j)--
                    (A) in paragraph (2)(A)(ii), by striking ``printing, 
                shipping, and redeeming coupons'' and inserting 
                ``issuing and redeeming benefits''; and
                    (B) in paragraph (5), by striking ``coupon'' and 
                inserting ``benefit'';
            (11) in subsection (k)--
                    (A) by striking ``coupons in the form of'' each 
                place it appears and inserting ``program benefits in the 
                form of'';
                    (B) by striking ``a coupon issued in the form of'' 
                each place it appears and inserting ``program benefits 
                in the form of''; and
                    (C) in subparagraph (A), by striking ``subsection 
                (i)(11)(A)'' and inserting ``subsection (h)(11)(A)''; 
                and
            (12) by redesignating subsections (e) through (k) as 
        subsections (d) through (j), respectively.

    (b) Conforming Amendments.--
            (1) Section 3 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2012) is amended--
                    (A) in subsection (a), by striking ``coupons'' and 
                inserting ``benefits'';
                    (B) by striking subsection (b) and inserting the 
                following:

    ``(b) Benefit.--The term `benefit' means the value of supplemental 
nutrition assistance provided to a household by means of--
            ``(1) an electronic benefit transfer under section 7(i); or
            ``(2) other means of providing assistance, as determined by 
        the Secretary.'';
                    (C) in subsection (c), in the first sentence, by 
                striking ``authorization cards'' and inserting 
                ``benefits'';
                    (D) in subsection (d), by striking ``or access 
                device'' and all that follows through the end of the 
                subsection and inserting a period;
                    (E) in subsection (e)--
                          (i) by striking ``(e) `Coupon issuer' means'' 
                      and inserting the following:

    ``(e) Benefit Issuer.--The term `benefit issuer' means''; and
                          (ii) by striking ``coupons'' and inserting 
                      ``benefits'';
                    (F) in subsection (g)(7), by striking ``subsection 
                (r)'' and inserting ``subsection (j)'';
                    (G) in subsection (i)(5)--
                          (i) in subparagraph (B), by striking 
                      ``subsection (r)'' and inserting ``subsection 
                      (j)''; and

[[Page 122 STAT. 1106]]

                          (ii) in subparagraph (D), by striking 
                      ``coupons'' and inserting ``benefits'';
                    (H) in subsection (j), by striking ``(as that term 
                is defined in subsection (p))'';
                    (I) in subsection (k)--
                          (i) in paragraph (1)(A), by striking 
                      ``subsection (u)(1)'' and inserting ``subsection 
                      (r)(1)'';
                          (ii) in paragraph (2), by striking 
                      ``subsections (g)(3), (4), (5), (7), (8), and (9) 
                      of this section'' and inserting ``paragraphs (3), 
                      (4), (5), (7), (8), and (9) of subsection (k)''; 
                      and
                          (iii) in paragraph (3), by striking 
                      ``subsection (g)(6) of this section'' and 
                      inserting ``subsection (k)(6)'';
                    (J) in subsection (t), by inserting ``, including 
                point of sale devices,'' after ``other means of 
                access'';
                    (K) in subsection (u), by striking ``(as defined in 
                subsection (g))'';
                    (L) by adding at the end the following:

    ``(v) EBT Card.--The term `EBT card' means an electronic benefit 
transfer card issued under section 7(i).''; and
                    (M) by redesignating subsections (a) through (v) as 
                subsections (b), (d), (f), (g), (e), (h), (k), (l), (n), 
                (o), (p), (q), (s), (t), (u), (v), (c), (j), (m), (a), 
                (r), and (i), respectively, and moving the subsections 
                so as to appear in alphabetical order.
            (2) Section 4(a) of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2013(a)) is amended--
                    (A) by striking ``coupons'' each place it appears 
                and inserting ``benefits''; and
                    (B) by striking ``Coupons issued'' and inserting 
                ``benefits issued''.
            (3) Section 5 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2014) is amended--
                    (A) in subsection (a), by striking ``section 
                3(i)(4)'' and inserting ``section 3(n)(4)'';
                    (B) in subsection (h)(3)(B), in the second sentence, 
                by striking ``section 7(i)'' and inserting ``section 
                7(h)''; and
                    (C) in subsection (i)(2)(E), by striking ``, as 
                defined in section 3(i) of this Act,''.
            (4) Section 6 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2015) is amended--
                    (A) in subsection (b)(1)--
                          (i) in subparagraph (B), by striking ``coupons 
                      or authorization cards'' and inserting ``program 
                      benefits''; and
                          (ii) by striking ``coupons'' each place it 
                      appears and inserting ``benefits''; and
                    (B) in subsection (d)(4)(L), by striking ``section 
                11(e)(22)'' and inserting ``section 11(e)(19)''.
            (5) Section 8 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2017) is amended--
                    (A) in subsection (b), by striking ``, whether 
                through coupons, access devices, or otherwise''; and
                    (B) in subsections (e)(1) and (f), by striking 
                ``section 3(i)(5)'' each place it appears and inserting 
                ``section 3(n)(5)''.
            (6) Section 9 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2018) is amended--

[[Page 122 STAT. 1107]]

                    (A) by striking ``coupons'' each place it appears 
                and inserting ``benefits'';
                    (B) in subsection (a)--
                          (i) in paragraph (1), by striking ``coupon 
                      business'' and inserting ``benefit transactions''; 
                      and
                          (ii) by striking paragraph (3) and inserting 
                      the following:
            ``(3) Authorization periods.--The Secretary shall establish 
        specific time periods during which authorization to accept and 
        redeem benefits shall be valid under the supplemental nutrition 
        assistance program.''; and
                    (C) in subsection (g), by striking ``section 
                3(g)(9)'' and inserting ``section 3(k)(9)''.
            (7) Section 10 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2019) is amended--
                    (A) by striking the section designation and heading 
                and all that follows through ``Regulations'' and 
                inserting the following:
``SEC. 10. REDEMPTION OF PROGRAM BENEFITS.

    ``Regulations'';
                    (B) by striking ``section 3(k)(4) of this Act'' and 
                inserting ``section 3(p)(4)'';
                    (C) by striking ``section 7(i)'' and inserting 
                ``section 7(h)''; and
                    (D) by striking ``coupons'' each place it appears 
                and inserting ``benefits''.
            (8) Section 11 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2020) is amended--
                    (A) in subsection (d)--
                          (i) by striking ``section 3(n)(1) of this 
                      Act'' each place it appears and inserting 
                      ``section 3(t)(1)''; and
                          (ii) by striking ``section 3(n)(2) of this 
                      Act'' each place it appears and inserting 
                      ``section 3(t)(2)'';
                    (B) in subsection (e)--
                          (i) in paragraph (8)(E), by striking 
                      ``paragraph (16) or (20)(B)'' and inserting 
                      ``paragraph (15) or (18)(B)'';
                          (ii) by striking paragraphs (15) and (19);
                          (iii) by redesignating paragraphs (16) through 
                      (18) and (20) through (25) as paragraphs (15) 
                      through (17) and (18) through (23), respectively; 
                      and
                          (iv) in paragraph (17) (as so redesignated), 
                      by striking ``(described in section 3(n)(1) of 
                      this Act)'' and inserting ``described in section 
                      3(t)(1)'';
                    (C) in subsection (h), by striking ``coupon or 
                coupons'' and inserting ``benefits'';
                    (D) by striking ``coupon'' each place it appears and 
                inserting ``benefit'';
                    (E) by striking ``coupons'' each place it appears 
                and inserting ``benefits''; and
                    (F) in subsection (q), by striking ``section 
                11(e)(20)(B)'' and inserting ``subsection (e)(18)(B)''.
            (9) Section 13 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2022) is amended by striking ``coupons'' each place it 
        appears and inserting ``benefits''.
            (10) Section 15 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2024) is amended--

[[Page 122 STAT. 1108]]

                    (A) in subsection (a), by striking ``coupons'' and 
                inserting ``benefits'';
                    (B) in subsection (b)(1)--
                          (i) by striking ``coupons, authorization 
                      cards, or access devices'' each place it appears 
                      and inserting ``benefits'';
                          (ii) by striking ``coupons or authorization 
                      cards'' and inserting ``benefits''; and
                          (iii) by striking ``access device'' each place 
                      it appears and inserting ``benefit'';
                    (C) in subsection (c), by striking ``coupons'' each 
                place it appears and inserting ``benefits'';
                    (D) in subsection (d), by striking ``Coupons'' and 
                inserting ``Benefits'';
                    (E) by striking subsections (e) and (f);
                    (F) by redesignating subsections (g) and (h) as 
                subsections (e) and (f), respectively; and
                    (G) in subsection (e) (as so redesignated), by 
                striking ``coupon, authorization cards or access 
                devices'' and inserting ``benefits''.
            (11) Section 16(a) of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2025(a)) is amended by striking ``coupons'' each place it 
        appears and inserting ``benefits''.
            (12) Section 17 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2026) is amended--
                    (A) in subsection (a)(2), by striking ``coupon'' and 
                inserting ``benefit'';
                    (B) in subsection (b)(1)--
                          (i) in subparagraph (B)--
                                    (I) in clause (iv)--
                                            (aa) in subclause (I), 
                                        inserting ``or otherwise 
                                        providing benefits in a form not 
                                        restricted to the purchase of 
                                        food'' after ``of cash'';
                                            (bb) in subclause (III)(aa), 
                                        by striking ``section 3(i)'' and 
                                        inserting ``section 3(n)''; and
                                            (cc) in subclause (VII), by 
                                        striking ``section 7(j)'' and 
                                        inserting ``section 7(i)''; and
                                    (II) in clause (v)--
                                            (aa) by striking 
                                        ``countersigned food coupons or 
                                        similar''; and
                                            (bb) by striking ``food 
                                        coupons'' and inserting ``EBT 
                                        cards''; and
                          (ii) in subparagraph (C)(i)(I), by striking 
                      ``coupons'' and inserting ``EBT cards'';
                    (C) in subsection (f), by striking ``section 
                7(g)(2)'' and inserting ``section 7(f)(2)''; and
                    (D) in subsection (j), by striking ``coupon'' and 
                inserting ``benefit''.
            (13) Section 19(a)(2)(A)(ii) of the Food and Nutrition Act 
        of 2008 (7 U.S.C. 2028(a)(2)(A)(ii)) is amended by striking 
        ``section 3(o)(4)'' and inserting ``section 3(u)(4)''.
            (14) Section 21 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2030) is repealed.
            (15) Section 22 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2031) is amended--
                    (A) by striking ``food coupons'' each place it 
                appears and inserting ``benefits'';

[[Page 122 STAT. 1109]]

                    (B) by striking ``coupons'' each place it appears 
                and inserting ``benefits''; and
                    (C) in subsection (g)(1)(A), by striking ``coupon'' 
                and inserting ``benefits''.
            (16) Section 26(f)(3) of the Food and Nutrition Act of 2008 
        (7 U.S.C. 2035(f)(3)) is amended--
                    (A) in subparagraph (A), by striking ``subsections 
                (a) through (g)'' and inserting ``subsections (a) 
                through (f)''; and
                    (B) in subparagraph (E), by striking ``(16), (18), 
                (20), (24), and (25)'' and inserting ``(15), (17), (18), 
                (22), and (23)''.

    (c) Conforming Cross-References.--
            (1) In general.--
                    (A) Use of terms.--Each provision of law described 
                in subparagraph (B) is amended (as applicable)--
                          (i) by striking ``coupons'' each place it 
                      appears and inserting ``benefits'';
                          (ii) by striking ``coupon'' each place it 
                      appears and inserting ``benefit'';
                          (iii) by striking ``food coupons'' each place 
                      it appears and inserting ``benefits'';
                          (iv) in each section heading, by striking 
                      ``food coupons'' each place it appears and 
                      inserting ``benefits'';
                          (v) by striking ``food stamp coupon'' each 
                      place it appears and inserting ``benefit''; and
                          (vi) by striking ``food stamps'' each place it 
                      appears and inserting ``benefits''.
                    (B) Provisions of law.--The provisions of law 
                referred to in subparagraph (A) are the following:
                          (i) Section 2 of Public Law 103-205 (7 U.S.C. 
                      2012 note; 107 Stat. 2418).
                          (ii) Section 1956(c)(7)(D) of title 18, United 
                      States Code.
                          (iii) <<NOTE: 42 USC 411, 503.>>  Titles II 
                      through XIX of the Social Security Act (42 U.S.C. 
                      401 et seq.).
                          (iv) Section 401(b)(3) of the Social Security 
                      Amendments of 1972 (42 U.S.C. 1382e note; Public 
                      Law 92-603).
                          (v) <<NOTE: 42 USC 5179.>>  The Robert T. 
                      Stafford Disaster Relief and Emergency Assistance 
                      Act (42 U.S.C. 5121 et seq.).
                          (vi) Section 802(d)(2)(A)(i)(II) of the 
                      Cranston-Gonzalez National Affordable Housing Act 
                      (42 U.S.C. 8011(d)(2)(A)(i)(II)).
            (2) Definition references.--
                    (A) Section 2 of Public Law 103-205 (7 U.S.C. 2012 
                note; 107 Stat. 2418) is amended by striking ``section 
                3(k)(1)'' and inserting ``section 3(p)(1)''.
                    (B) Section 205 of the Food Stamp Program 
                Improvements Act of 1994 (7 U.S.C. 2012 note; Public Law 
                103-225) is amended by striking ``section 3(k) of such 
                Act (as amended by section 201)'' and inserting 
                ``section 3(p) of that Act''.
                    (C) Section 115 of the Personal Responsibility and 
                Work Opportunity Reconciliation Act of 1996 (21 U.S.C. 
                862a) is amended--

[[Page 122 STAT. 1110]]

                          (i) by striking ``section 3(h)'' each place it 
                      appears and inserting ``section 3(l)''; and
                          (ii) in subsection (e)(2), by striking 
                      ``section 3(m)'' and inserting ``section 3(s)''.
                    (D) Section 402(a) of the Personal Responsibility 
                and Work Opportunity Reconciliation Act of 1996 (8 
                U.S.C. 1612(a)) is amended--
                          (i) in paragraph (2)(F)(ii), by striking 
                      ``section 3(r)'' and inserting ``section 3(j)''; 
                      and
                          (ii) in paragraph (3)(B), by striking 
                      ``section 3(h)'' and inserting ``section 3(l)''.
                    (E) Section 3803(c)(2)(C)(vii) of title 31, United 
                States Code, is amended by striking ``section 3(h)'' and 
                inserting ``section 3(l)''.
                    (F) Section 303(d)(4) of the Social Security Act (42 
                U.S.C. 503(d)(4)) is amended by striking ``section 
                3(n)(1)'' and inserting ``section 3(t)(1)''.
                    (G) Section 404 of the Social Security Act (42 
                U.S.C. 604) is amended by striking ``section 3(h)'' each 
                place it appears and inserting ``section 3(l)''.
                    (H) Section 531 of the Social Security Act (42 
                U.S.C. 654) is amended by striking ``section 3(h)'' each 
                place it appears and inserting ``section 3(l)''.
                    (I) Section 802(d)(2)(A)(i)(II) of the Cranston-
                Gonzalez National Affordable Housing Act (42 U.S.C. 
                8011(d)(2)(A)(i)(II)) is amended by striking ``(as 
                defined in section 3(e) of such Act)''.

    (d) <<NOTE: 7 USC 2012 note.>>  References.--Any reference in any 
Federal, State, tribal, or local law (including regulations) to a 
``coupon'', ``authorization card'', or other access device provided 
under the Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.) shall 
be considered to be a reference to a ``benefit'' provided under that 
Act.
SEC. 4116. REVIEW OF MAJOR CHANGES IN PROGRAM DESIGN.

    Section 11 of the Food and Nutrition Act of 2008 (7 U.S.C. 2020) is 
amended by striking the section enumerator and heading and subsection 
(a) and inserting the following:
``SEC. 11. ADMINISTRATION.

    ``(a) State Responsibility.--
            ``(1) In general.--The State agency of each participating 
        State shall have responsibility for certifying applicant 
        households and issuing EBT cards.
            ``(2) Local administration.--The responsibility of the 
        agency of the State government shall not be affected by whether 
        the program is operated on a State-administered or county-
        administered basis, as provided under section 3(t)(1).
            ``(3) Records.--
                    ``(A) In general.--Each State agency shall keep such 
                records as may be necessary to determine whether the 
                program is being conducted in compliance with this Act 
                (including regulations issued under this Act).
                    ``(B) Inspection and audit.--Records described in 
                subparagraph (A) shall--
                          ``(i) be available for inspection and audit at 
                      any reasonable time;
                          ``(ii) subject to subsection (e)(8), be 
                      available for review in any action filed by a 
                      household to enforce

[[Page 122 STAT. 1111]]

                      any provision of this Act (including regulations 
                      issued under this Act); and
                          ``(iii) be preserved for such period of not 
                      less than 3 years as may be specified in 
                      regulations.
            ``(4) Review of major changes in program design.--
                    ``(A) In general.--The Secretary shall develop 
                standards for identifying major changes in the 
                operations of a State agency, including--
                          ``(i) large or substantially-increased numbers 
                      of low-income households that do not live in 
                      reasonable proximity to an office performing the 
                      major functions described in subsection (e);
                          ``(ii) substantial increases in reliance on 
                      automated systems for the performance of 
                      responsibilities previously performed by personnel 
                      described in subsection (e)(6)(B);
                          ``(iii) changes that potentially increase the 
                      difficulty of reporting information under 
                      subsection (e) or section 6(c); and
                          ``(iv) changes that may disproportionately 
                      increase the burdens on any of the types of 
                      households described in subsection (e)(2)(A).
                    ``(B) Notification.--If a State agency implements a 
                major change in operations, the State agency shall--
                          ``(i) notify the Secretary; and
                          ``(ii) collect such information as the 
                      Secretary shall require to identify and correct 
                      any adverse effects on program integrity or 
                      access, including access by any of the types of 
                      households described in subsection (e)(2)(A).''.
SEC. 4117. CIVIL RIGHTS COMPLIANCE.

    Section 11 of the Food and Nutrition Act of 2008 (7 U.S.C. 2020) is 
amended by striking subsection (c) and inserting the following:
    ``(c) Civil Rights Compliance.--
            ``(1) In general.--In the certification of applicant 
        households for the supplemental nutrition assistance program, 
        there shall be no discrimination by reason of race, sex, 
        religious creed, national origin, or political affiliation.
            ``(2) Relation to other laws.--The administration of the 
        program by a State agency shall be consistent with the rights of 
        households under the following laws (including implementing 
        regulations):
                    ``(A) The Age Discrimination Act of 1975 (42 U.S.C. 
                6101 et seq.).
                    ``(B) Section 504 of the Rehabilitation Act of 1973 
                (29 U.S.C. 794).
                    ``(C) The Americans with Disabilities Act of 1990 
                (42 U.S.C. 12101 et seq.).
                    ``(D) Title VI of the Civil Rights Act of 1964 (42 
                U.S.C. 2000d et seq.).''.
SEC. 4118. CODIFICATION OF ACCESS RULES.

    Section 11(e)(1) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2020(e)(1)) is amended--
            (1) by striking ``shall (A) at'' and inserting ``shall--
                    ``(A) at''; and

[[Page 122 STAT. 1112]]

            (2) by striking ``and (B) use'' and inserting ``and
                    ``(B) comply with regulations of the Secretary 
                requiring the use of''.
SEC. 4119. STATE OPTION FOR TELEPHONIC SIGNATURE.

    Section 11(e)(2)(C) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2020(e)(2)(C)) is amended--
            (1) by striking ``(C) Nothing in this Act'' and inserting 
        the following:
                    ``(C) Electronic and automated systems.--
                          ``(i) In general.--Nothing in this Act''; and
            (2) by adding at the end the following:
                          ``(ii) State option for telephonic 
                      signature.--A State agency may establish a system 
                      by which an applicant household may sign an 
                      application through a recorded verbal assent over 
                      the telephone.
                          ``(iii) Requirements.--A system established 
                      under clause (ii) shall--
                                    ``(I) record for future reference 
                                the verbal assent of the household 
                                member and the information to which 
                                assent was given;
                                    ``(II) include effective safeguards 
                                against impersonation, identity theft, 
                                and invasions of privacy;
                                    ``(III) not deny or interfere with 
                                the right of the household to apply in 
                                writing;
                                    ``(IV) promptly provide to the 
                                household member a written copy of the 
                                completed application, with instructions 
                                for a simple procedure for correcting 
                                any errors or omissions;
                                    ``(V) comply with paragraph (1)(B);
                                    ``(VI) satisfy all requirements for 
                                a signature on an application under this 
                                Act and other laws applicable to the 
                                supplemental nutrition assistance 
                                program, with the date on which the 
                                household member provides verbal assent 
                                considered as the date of application 
                                for all purposes; and
                                    ``(VII) comply with such other 
                                standards as the Secretary may 
                                establish.''.
SEC. 4120. PRIVACY PROTECTIONS.

    Section 11(e)(8) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2020(e)(8)) is amended--
            (1) in the matter preceding subparagraph (A)--
                    (A) by striking ``limit'' and inserting 
                ``prohibit''; and
                    (B) by striking ``to persons'' and all that follows 
                through ``State programs'';
            (2) by redesignating subparagraphs (A) through (E) as 
        subparagraphs (B) through (F), respectively;
            (3) by inserting before subparagraph (B) (as so 
        redesignated) the following:
                    ``(A) the safeguards shall permit--
                          ``(i) the disclosure of such information to 
                      persons directly connected with the administration 
                      or enforcement of the provisions of this Act, 
                      regulations issued pursuant to this Act, Federal 
                      assistance programs, or federally-assisted State 
                      programs; and

[[Page 122 STAT. 1113]]

                          ``(ii) the subsequent use of the information 
                      by persons described in clause (i) only for such 
                      administration or enforcement;''; and
            (4) in subparagraph (F) (as so redesignated) by inserting 
        ``or subsection (u)'' before the semicolon at the end.
SEC. 4121. PRESERVATION OF ACCESS AND PAYMENT ACCURACY.

    Section 16 of the Food and Nutrition Act of 2008 (7 U.S.C. 2025) is 
amended by striking subsection (g) and inserting the following:
    ``(g) Cost Sharing for Computerization.--
            ``(1) In general.--Except as provided in paragraphs (2) and 
        (3), the Secretary is authorized to pay to each State agency the 
        amount provided under subsection (a)(6) for the costs incurred 
        by the State agency in the planning, design, development, or 
        installation of 1 or more automatic data processing and 
        information retrieval systems that the Secretary determines--
                    ``(A) would assist in meeting the requirements of 
                this Act;
                    ``(B) meet such conditions as the Secretary 
                prescribes;
                    ``(C) are likely to provide more efficient and 
                effective administration of the supplemental nutrition 
                assistance program;
                    ``(D) would be compatible with other systems used in 
                the administration of State programs, including the 
                program funded under part A of title IV of the Social 
                Security Act (42 U.S.C. 601 et seq.);
                    ``(E) would be tested adequately before and after 
                implementation, including through pilot projects in 
                limited areas for major systems changes as determined 
                under rules promulgated by the Secretary, data from 
                which shall be thoroughly evaluated before the Secretary 
                approves the system to be implemented more broadly; and
                    ``(F) would be operated in accordance with an 
                adequate plan for--
                          ``(i) continuous updating to reflect changed 
                      policy and circumstances; and
                          ``(ii) testing the effect of the system on 
                      access for eligible households and on payment 
                      accuracy.
            ``(2) Limitation.--The Secretary shall not make payments to 
        a State agency under paragraph (1) to the extent that the State 
        agency--
                    ``(A) is reimbursed for the costs under any other 
                Federal program; or
                    ``(B) uses the systems for purposes not connected 
                with the supplemental nutrition assistance program.''.
SEC. 4122. FUNDING OF EMPLOYMENT AND TRAINING PROGRAMS.

    Section 16(h)(1)(A) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2025(h)(1)(A)) is amended in subparagraph (A), by striking ``to remain 
available until expended'' and inserting ``to remain available for 15 
months''.

[[Page 122 STAT. 1114]]

                       PART IV--PROGRAM INTEGRITY

SEC. 4131. <<NOTE: Regulations.>> ELIGIBILITY DISQUALIFICATION.

    Section 6 of the Food and Nutrition Act of 2008 (7 U.S.C. 2015) is 
amended by adding at the end the following:
    ``(p) Disqualification for Obtaining Cash by Destroying Food and 
Collecting Deposits.--Subject to any requirements established by the 
Secretary, any person who has been found by a State or Federal court or 
administrative agency in a hearing under subsection (b) to have 
intentionally obtained cash by purchasing products with supplemental 
nutrition assistance program benefits that have containers that require 
return deposits, discarding the product, and returning the container for 
the deposit amount shall be ineligible for benefits under this Act for 
such period of time as the Secretary shall prescribe by regulation.
    ``(q) Disqualification for Sale of Food Purchased With Supplemental 
Nutrition Assistance Program Benefits.--Subject to any requirements 
established by the Secretary, any person who has been found by a State 
or Federal court or administrative agency in a hearing under subsection 
(b) to have intentionally sold any food that was purchased using 
supplemental nutrition assistance program benefits shall be ineligible 
for benefits under this Act for such period of time as the Secretary 
shall prescribe by regulation.''.
SEC. 4132. CIVIL PENALTIES AND DISQUALIFICATION OF RETAIL FOOD 
                          STORES AND WHOLESALE FOOD CONCERNS.

    Section 12 of the Food and Nutrition Act of 2008 (7 U.S.C. 2021) is 
amended--
            (1) by striking the section designation and heading and all 
        that follows through the end of subsection (a) and inserting the 
        following:
``SEC. 12. CIVIL PENALTIES AND DISQUALIFICATION OF RETAIL FOOD 
                      STORES AND WHOLESALE FOOD CONCERNS.

    ``(a) Disqualification.--
            ``(1) In general.--An approved retail food store or 
        wholesale food concern that violates a provision of this Act or 
        a regulation under this Act may be--
                    ``(A) disqualified for a specified period of time 
                from further participation in the supplemental nutrition 
                assistance program;
                    ``(B) assessed a civil penalty of up to $100,000 for 
                each violation; or
                    ``(C) both.
            ``(2) Regulations.--Regulations promulgated under this Act 
        shall provide criteria for the finding of a violation of, the 
        suspension or disqualification of and the assessment of a civil 
        penalty against a retail food store or wholesale food concern on 
        the basis of evidence that may include facts established through 
        on-site investigations, inconsistent redemption data, or 
        evidence obtained through a transaction report under an 
        electronic benefit transfer system.'';
            (2) in subsection (b)--
                    (A) by striking ``(b) Disqualification'' and 
                inserting the following:

[[Page 122 STAT. 1115]]

    ``(b) Period of Disqualification.--Subject to subsection (c), a 
disqualification'';
                    (B) in paragraph (1), by striking ``of no less than 
                six months nor more than five years'' and inserting 
                ``not to exceed 5 years'';
                    (C) in paragraph (2), by striking ``of no less than 
                twelve months nor more than ten years'' and inserting 
                ``not to exceed 10 years'';
                    (D) in paragraph (3)(B)--
                          (i) by inserting ``or a finding of the 
                      unauthorized redemption, use, transfer, 
                      acquisition, alteration, or possession of EBT 
                      cards'' after ``concern'' the first place it 
                      appears; and
                          (ii) by striking ``civil money penalties'' and 
                      inserting ``civil penalties''; and
                    (E) by striking ``civil money penalty'' each place 
                it appears and inserting ``civil penalty'';
            (3) in subsection (c)--
                    (A) by striking ``(c) The action'' and inserting the 
                following:

    ``(c) Civil Penalty and Review of Disqualification and Penalty 
Determinations.--
            ``(1) Civil penalty.--In addition to a disqualification 
        under this section, the Secretary may assess a civil penalty in 
        an amount not to exceed $100,000 for each violation.
            ``(2) Review.--The action''; and
                    (B) in paragraph (2) (as designated by subparagraph 
                (A)), by striking ``civil money penalty'' and inserting 
                ``civil penalty'';
            (4) in subsection (d)--
                    (A) by striking ``(d)'' and all that follows through 
                ``. The Secretary shall'' and inserting the following:

    ``(d) Conditions of Authorization.--
            ``(1) In general.--As a condition of authorization to accept 
        and redeem benefits, the Secretary may require a retail food 
        store or wholesale food concern that, pursuant to subsection 
        (a), has been disqualified for more than 180 days, or has been 
        subjected to a civil penalty in lieu of a disqualification 
        period of more than 180 days, to furnish a collateral bond or 
        irrevocable letter of credit for a period of not more than 5 
        years to cover the value of benefits that the store or concern 
        may in the future accept and redeem in violation of this Act.
            ``(2) Collateral.--The Secretary also may require a retail 
        food store or wholesale food concern that has been sanctioned 
        for a violation and incurs a subsequent sanction regardless of 
        the length of the disqualification period to submit a collateral 
        bond or irrevocable letter of credit.
            ``(3) Bond requirements.--The Secretary shall'';
                    (B) by striking ``If the Secretary finds'' and 
                inserting the following
            ``(4) Forfeiture.--If the Secretary finds''; and
                    (C) by striking ``Such store or concern'' and 
                inserting the following:
            ``(5) Hearing.--A store or concern described in paragraph 
        (4)'';
            (5) in subsection (e), by striking ``civil money penalty'' 
        each place it appears and inserting ``civil penalty''; and

[[Page 122 STAT. 1116]]

            (6) by adding at the end the following:

    ``(h) Flagrant Violations.--
            ``(1) In general.--The <<NOTE: Procedures.>> Secretary, in 
        consultation with the Inspector General of the Department of 
        Agriculture, shall establish procedures under which the 
        processing of program benefit redemptions for a retail food 
        store or wholesale food concern may be immediately suspended 
        pending administrative action to disqualify the retail food 
        store or wholesale food concern.
            ``(2) Requirements.--Under the procedures described in 
        paragraph (1), if the Secretary, in consultation with the 
        Inspector General, determines that a retail food store or 
        wholesale food concern is engaged in flagrant violations of this 
        Act (including regulations promulgated under this Act), 
        unsettled program benefits that have been redeemed by the retail 
        food store or wholesale food concern--
                    ``(A) may be suspended; and
                    ``(B)(i) if the program disqualification is upheld, 
                may be subject to forfeiture pursuant to section 15(g); 
                or
                    ``(ii) if the program disqualification is not 
                upheld, shall be released to the retail food store or 
                wholesale food concern.
            ``(3) No liability for interest.--The Secretary shall not be 
        liable for the value of any interest on funds suspended under 
        this subsection.''.
SEC. 4133. MAJOR SYSTEMS FAILURES.

    Section 13(b) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2022(b)) is amended by adding at the end the following:
            ``(5) Overissuances caused by systemic state errors.--
                    ``(A) In general.--If the Secretary determines that 
                a State agency overissued benefits to a substantial 
                number of households in a fiscal year as a result of a 
                major systemic error by the State agency, as defined by 
                the Secretary, the Secretary may prohibit the State 
                agency from collecting these overissuances from some or 
                all households.
                    ``(B) Procedures.--
                          ``(i) Information reporting by states.--Every 
                      State agency shall provide to the Secretary all 
                      information requested by the Secretary concerning 
                      the issuance of benefits to households by the 
                      State agency in the applicable fiscal year.
                          ``(ii) Final determination.--After reviewing 
                      relevant information provided by a State agency, 
                      the Secretary shall make a final determination--
                                    ``(I) whether the State agency 
                                overissued benefits to a substantial 
                                number of households as a result of a 
                                systemic error in the applicable fiscal 
                                year; and
                                    ``(II) as to the amount of the 
                                overissuance in the applicable fiscal 
                                year for which the State agency is 
                                liable.
                          ``(iii) Establishing a claim.--Upon 
                      determining under clause (ii) that a State agency 
                      has overissued benefits to households due to a 
                      major systemic error determined under subparagraph 
                      (A), the Secretary shall establish a claim against 
                      the State agency equal

[[Page 122 STAT. 1117]]

                      to the value of the overissuance caused by the 
                      systemic error.
                          ``(iv) Administrative 
                      and <<NOTE: Applicability.>> judicial review.--
                      Administrative and judicial review, as provided in 
                      section 14, shall apply to the final 
                      determinations by the Secretary under clause (ii).
                          ``(v) Remission to the secretary.--
                                    ``(I) Determination not appealed.--
                                If the determination of the Secretary 
                                under clause (ii) is not appealed, the 
                                State agency shall, as soon as 
                                practicable, remit to the Secretary the 
                                dollar amount specified in the claim 
                                under clause (iii).
                                    ``(II) Determination appealed.--If 
                                the determination of the Secretary under 
                                clause (ii) is appealed, upon completion 
                                of administrative and judicial review 
                                under clause (iv), and a finding of 
                                liability on the part of the State, the 
                                appealing State agency shall, as soon as 
                                practicable, remit to the Secretary a 
                                dollar amount subject to the finding 
                                made in the administrative and judicial 
                                review.
                          ``(vi) Alternative method of collection.--
                                    ``(I) In general.--If a State agency 
                                fails to make a payment under clause (v) 
                                within a reasonable period of time, as 
                                determined by the Secretary, the 
                                Secretary may reduce any amount due to 
                                the State agency under any other 
                                provision of this Act by the amount due.
                                    ``(II) Accrual of interest.--During 
                                the period of time determined by the 
                                Secretary to be reasonable under 
                                subclause (I), interest in the amount 
                                owed shall not accrue.
                          ``(vii) Limitation.--Any liability amount 
                      established under section 16(c)(1)(C) shall be 
                      reduced by the amount of the claim established 
                      under this subparagraph.''.

                          PART V--MISCELLANEOUS

SEC. 4141. PILOT PROJECTS TO EVALUATE HEALTH AND NUTRITION 
                          PROMOTION IN THE SUPPLEMENTAL NUTRITION 
                          ASSISTANCE PROGRAM.

    Section 17 of the Food and Nutrition Act of 2008 (7 U.S.C. 2026) is 
amended by adding at the end the following:
    ``(k) Pilot Projects to Evaluate Health and Nutrition Promotion in 
the Supplemental Nutrition Assistance Program.--
            ``(1) In general.--The Secretary shall carry out, under such 
        terms and conditions as the Secretary considers to be 
        appropriate, pilot projects to develop and test methods--
                    ``(A) of using the supplemental nutrition assistance 
                program to improve the dietary and health status of 
                households eligible for or participating in the 
                supplemental nutrition assistance program; and
                    ``(B) to reduce overweight, obesity (including 
                childhood obesity), and associated co-morbidities in the 
                United States.
            ``(2) Grants.--

[[Page 122 STAT. 1118]]

                    ``(A) In general.--In carrying out this subsection, 
                the Secretary may enter into competitively awarded 
                contracts or cooperative agreements with, or provide 
                grants to, public or private organizations or agencies 
                (as defined by the Secretary), for use in accordance 
                with projects that meet the strategy goals of this 
                subsection.
                    ``(B) Application.--To be eligible to receive a 
                contract, cooperative agreement, or grant under this 
                paragraph, an organization shall submit to the Secretary 
                an application at such time, in such manner, and 
                containing such information as the Secretary may 
                require.
                    ``(C) Selection criteria.--Pilot projects shall be 
                evaluated against publicly disseminated criteria that 
                may include--
                          ``(i) identification of a low-income target 
                      audience that corresponds to individuals living in 
                      households with incomes at or below 185 percent of 
                      the poverty level;
                          ``(ii) incorporation of a scientifically based 
                      strategy that is designed to improve diet quality 
                      through more healthful food purchases, 
                      preparation, or consumption;
                          ``(iii) a commitment to a pilot project that 
                      allows for a rigorous outcome evaluation, 
                      including data collection;
                          ``(iv) strategies to improve the nutritional 
                      value of food served during school hours and 
                      during after-school hours;
                          ``(v) innovative ways to provide significant 
                      improvement to the health and wellness of 
                      children;
                          ``(vi) other criteria, as determined by the 
                      Secretary.
                    ``(D) Use of funds.--Funds provided under this 
                paragraph shall not be used for any project that limits 
                the use of benefits under this Act.
            ``(3) Projects.--Pilot projects carried out under paragraph 
        (1) may include projects to determine whether healthier food 
        purchases by and healthier diets among households participating 
        in the supplemental nutrition assistance program result from 
        projects that--
                    ``(A) increase the supplemental nutrition assistance 
                purchasing power of the participating households by 
                providing increased supplemental nutrition assistance 
                program benefit allotments to the participating 
                households;
                    ``(B) increase access to farmers markets by 
                participating households through the electronic 
                redemption of supplemental nutrition assistance program 
                benefits at farmers' markets;
                    ``(C) provide incentives to authorized supplemental 
                nutrition assistance program retailers to increase the 
                availability of healthy foods to participating 
                households;
                    ``(D) subject authorized supplemental nutrition 
                assistance program retailers to stricter retailer 
                requirements with respect to carrying and stocking 
                healthful foods;
                    ``(E) provide incentives at the point of purchase to 
                encourage households participating in the supplemental 
                nutrition assistance program to purchase fruits, 
                vegetables, or other healthful foods; or

[[Page 122 STAT. 1119]]

                    ``(F) provide to participating households integrated 
                communication and education programs, including the 
                provision of funding for a portion of a school-based 
                nutrition coordinator to implement a broad nutrition 
                action plan and parent nutrition education programs in 
                elementary schools, separately or in combination with 
                pilot projects carried out under subparagraphs (A) 
                through (E).
            ``(4) Evaluation and reporting.--
                    ``(A) Evaluation.--
                          ``(i) Independent evaluation.--
                                    ``(I) In general.--The Secretary 
                                shall provide for an independent 
                                evaluation of projects selected under 
                                this subsection that measures the impact 
                                of the pilot program on health and 
                                nutrition as described in paragraph (1).
                                    ``(II) Requirement.--The independent 
                                evaluation under subclause (I) shall use 
                                rigorous methodologies, particularly 
                                random assignment or other methods that 
                                are capable of producing scientifically 
                                valid information regarding which 
                                activities are effective.
                          ``(ii) Costs.--The Secretary may use funds 
                      provided to carry out this section to pay costs 
                      associated with monitoring and evaluating each 
                      pilot project.
                    ``(B) Reporting.--Not later than 90 days after the 
                last day of fiscal year 2009 and each fiscal year 
                thereafter until the completion of the last evaluation 
                under subparagraph (A), 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 
                includes a description of--
                          ``(i) the status of each pilot project;
                          ``(ii) the results of the evaluation completed 
                      during the previous fiscal year; and
                          ``(iii) to the maximum extent practicable--
                                    ``(I) the impact of the pilot 
                                project on appropriate health, 
                                nutrition, and associated behavioral 
                                outcomes among households participating 
                                in the pilot project;
                                    ``(II) baseline information relevant 
                                to the stated goals and desired outcomes 
                                of the pilot project; and
                                    ``(III) equivalent information about 
                                similar or identical measures among 
                                control or comparison groups that did 
                                not participate in the pilot project.
                    ``(C) Public dissemination.--In addition to the 
                reporting requirements under subparagraph (B), 
                evaluation results shall be shared broadly to inform 
                policy makers, service providers, other partners, and 
                the public in order to promote wide use of successful 
                strategies.
            ``(5) Funding.--
                    ``(A) Authorization of appropriations.--There are 
                authorized to be appropriated such sums as are necessary 
                to carry out this section for each of fiscal years 2008 
                through 2012.

[[Page 122 STAT. 1120]]

                    ``(B) Mandatory funding.--Out of any funds made 
                available under section 18, on October 1, 2008, the 
                Secretary shall make available $20,000,000 to carry out 
                a project described in paragraph (3)(E), to remain 
                available until expended.''.
SEC. 4142. STUDY ON COMPARABLE ACCESS TO SUPPLEMENTAL NUTRITION 
                          ASSISTANCE FOR PUERTO RICO.

    (a) In General.--The Secretary shall carry out a study of the 
feasibility and effects of including the Commonwealth of Puerto Rico in 
the definition of the term ``State'' under section 3 of the Food and 
Nutrition Act of 2008 (7 U.S.C. 2012), in lieu of providing block grants 
under section 19 of that Act (7 U.S.C. 2028).
    (b) Inclusions.--The study shall include--
            (1) an assessment of the administrative, financial 
        management, and other changes that would be necessary for the 
        Commonwealth to establish a comparable supplemental nutrition 
        assistance program, including compliance with appropriate 
        program rules under the Food and Nutrition Act of 2008 (7 U.S.C. 
        2011 et seq.), such as--
                    (A) benefit levels under section 3(u) of that Act (7 
                U.S.C. 2012(u));
                    (B) income eligibility standards under sections 5(c) 
                and 6 of that Act (7 U.S.C. 2014(c), 2015); and
                    (C) deduction levels under section 5(e) of that Act 
                (7 U.S.C. 2014(e));
            (2) an estimate of the impact on Federal and Commonwealth 
        benefit and administrative costs;
            (3) an assessment of the impact of the program on low-income 
        Puerto Ricans, as compared to the program under section 19 of 
        that Act (7 U.S.C. 2028); and
            (4) such other matters as the Secretary considers to be 
        appropriate.

    (c) Report.--Not later than 2 years 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 that describes the 
results of the study conducted under this section.
    (d) Funding.--
            (1) In general.--On <<NOTE: Transfer date.>> October 1, 
        2008, out of any funds in the Treasury not otherwise 
        appropriated, the Secretary of the Treasury shall transfer to 
        the Secretary to carry out this section $1,000,000, to remain 
        available until expended.
            (2) Receipt and acceptance.--The Secretary shall be entitled 
        to receive, shall accept, and shall use to carry out this 
        section the funds transferred under paragraph (1), without 
        further appropriation.

                 Subtitle B--Food Distribution Programs

                PART I--EMERGENCY FOOD ASSISTANCE PROGRAM

SEC. 4201. EMERGENCY FOOD ASSISTANCE.

    (a) Purchase of Commodities.--Section 27(a) of the Food and 
Nutrition Act of 2008 (7 U.S.C. 2036(a)) is amended by -

[[Page 122 STAT. 1121]]

            (1) by striking ``(a) Purchase of Commodities'' and all that 
        follows through ``$140,000,000 of'' and inserting the following:

    ``(a) Purchase of Commodities.--
            ``(1) In general.--From amounts made available to carry out 
        this Act, for each of the fiscal years 2008 through 2012, the 
        Secretary shall purchase a dollar amount described in paragraph 
        (2) of''; and
            (2) by adding at the end the following:
            ``(2) Amounts.--The Secretary shall use to carry out 
        paragraph (1)--
                    ``(A) for fiscal year 2008, $190,000,000;
                    ``(B) for fiscal year 2009, $250,000,000; and
                    ``(C) for each of fiscal years 2010 through 2012, 
                the dollar amount of commodities specified in 
                subparagraph (B) adjusted by the percentage by which the 
                thrifty food plan has been adjusted under section 
                3(u)(4) between June 30, 2008, and June 30 of the 
                immediately preceding fiscal year.''.

    (b) State Plans.--Section 202A of the Emergency Food Assistance Act 
of 1983 (7 U.S.C. 7503) is amended by striking subsection (a) and 
inserting the following:
    ``(a) Plans.--
            ``(1) In general.--To receive commodities under this Act, a 
        State shall submit to the Secretary an operation and 
        administration plan for the provision of benefits under this 
        Act.
            ``(2) Updates.--A State shall submit to the Secretary for 
        approval any amendment to a plan submitted under paragraph (1) 
        in any case in which the State proposes to make a change to the 
        operation or administration of a program described in the 
        plan.''.

    (c) Authorization and Appropriations.--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 ``$60,000,000'' and inserting 
        ``$100,000,000''; and
            (2) by inserting ``and donated wild game'' before the period 
        at the end.
SEC. 4202. EMERGENCY FOOD PROGRAM INFRASTRUCTURE GRANTS.

    The Emergency Food Assistance Act of 1983 is amended by inserting 
after section 208 (7 U.S.C. 7511) the following:
``SEC. 209. <<NOTE: 7 USC 7511a.>>  EMERGENCY FOOD PROGRAM 
                        INFRASTRUCTURE GRANTS.

    ``(a) Definition of Eligible Entity.--In this section, the term 
`eligible entity' means an emergency feeding organization.
    ``(b) Program Authorized.--
            ``(1) In general.--The Secretary shall use funds made 
        available under subsection (d) to make grants to eligible 
        entities to pay the costs of an activity described in subsection 
        (c).
            ``(2) Rural preference.--The Secretary shall use not less 
        than 50 percent of the funds described in paragraph (1) for a 
        fiscal year to make grants to eligible entities that serve 
        predominantly rural communities for the purposes of--
                    ``(A) expanding the capacity and infrastructure of 
                food banks, State-wide food bank associations, and food 
                bank collaboratives that operate in rural areas; and

[[Page 122 STAT. 1122]]

                    ``(B) improving the capacity of the food banks to 
                procure, receive, store, distribute, track, and deliver 
                time-sensitive or perishable food products.

    ``(c) Use of Funds.--An eligible entity shall use a grant received 
under this section for any fiscal year to carry out activities of the 
eligible entity, including--
            ``(1) the development and maintenance of a computerized 
        system for the tracking of time-sensitive food products;
            ``(2) capital, infrastructure, and operating costs 
        associated with the collection, storage, distribution, and 
        transportation of time-sensitive and perishable food products;
            ``(3) improving the security and diversity of the emergency 
        food distribution and recovery systems of the United States 
        through the support of small or mid-size farms and ranches, 
        fisheries, and aquaculture, and donations from local food 
        producers and manufacturers to persons in need;
            ``(4) providing recovered foods to food banks and similar 
        nonprofit emergency food providers to reduce hunger in the 
        United States;
            ``(5) improving the identification of--
                    ``(A) potential providers of donated foods;
                    ``(B) potential nonprofit emergency food providers; 
                and
                    ``(C) persons in need of emergency food assistance 
                in rural areas; and
            ``(6) constructing, expanding, or repairing a facility or 
        equipment to support hunger relief agencies in the community.

    ``(d) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $15,000,000 for each of fiscal 
years 2008 through 2012.''.

        PART II--FOOD DISTRIBUTION PROGRAM ON INDIAN RESERVATIONS

SEC. 4211. ASSESSING THE NUTRITIONAL VALUE OF THE FDPIR FOOD 
                          PACKAGE.

    (a) In General.--Section 4 of the Food and Nutrition Act of 2008 (7 
U.S.C. 2013) is amended by striking subsection (b) and inserting the 
following:
    ``(b) Food Distribution Program on Indian Reservations.--
            ``(1) In general.--Distribution of commodities, with or 
        without the supplemental nutrition assistance program, shall be 
        made whenever a request for concurrent or separate food program 
        operations, respectively, is made by a tribal organization.
            ``(2) Administration.--
                    ``(A) In general.--Subject to subparagraphs (B) and 
                (C), in the event of distribution on all or part of an 
                Indian reservation, the appropriate agency of the State 
                government in the area involved shall be responsible for 
                the distribution.
                    ``(B) Administration by tribal organization.--If the 
                Secretary determines that a tribal organization is 
                capable of effectively and efficiently administering a 
                distribution described in paragraph (1), then the tribal 
                organization shall administer the distribution.
                    ``(C) Prohibition.--The Secretary shall not approve 
                any plan for a distribution described in paragraph (1) 
                that

[[Page 122 STAT. 1123]]

                permits any household on any Indian reservation to 
                participate simultaneously in the supplemental nutrition 
                assistance program and the program established under 
                this subsection.
            ``(3) Disqualified participants.--An individual who is 
        disqualified from participation in the food distribution program 
        on Indian reservations under this subsection is not eligible to 
        participate in the supplemental nutrition assistance program 
        under this Act for a period of time to be determined by the 
        Secretary.
            ``(4) Administrative costs.--The Secretary is authorized to 
        pay such amounts for administrative costs and distribution costs 
        on Indian reservations as the Secretary finds necessary for 
        effective administration of such distribution by a State agency 
        or tribal organization.
            ``(5) Bison meat.--Subject to the availability of 
        appropriations to carry out this paragraph, the Secretary may 
        purchase bison meat for recipients of food distributed under 
        this subsection, including bison meat from--
                    ``(A) Native American bison producers; and
                    ``(B) producer-owned cooperatives of bison ranchers.
            ``(6) Traditional and locally-grown food fund.--
                    ``(A) In general.--Subject to the availability of 
                appropriations, the Secretary shall establish a fund for 
                use in purchasing traditional and locally-grown foods 
                for recipients of food distributed under this 
                subsection.
                    ``(B) Native american producers.--Where practicable, 
                of the food provided under subparagraph (A), at least 50 
                percent shall be produced by Native American farmers, 
                ranchers, and producers.
                    ``(C) Definition of traditional and locally grown.--
                The Secretary shall determine the definition of the term 
                `traditional and locally-grown' with respect to food 
                distributed under this paragraph.
                    ``(D) Survey.--In carrying out this paragraph, the 
                Secretary shall--
                          ``(i) survey participants of the food 
                      distribution program on Indian reservations 
                      established under this subsection to determine 
                      which traditional foods are most desired by those 
                      participants; and
                          ``(ii) purchase or offer to purchase those 
                      traditional foods that may be procured cost-
                      effectively.
                    ``(E) Report.--Not later than 1 year after the date 
                of enactment of this paragraph, and annually thereafter, 
                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 activities carried out 
                under this paragraph during the preceding calendar year.
                    ``(F) Authorization of appropriations.--There is 
                authorized to be appropriated to the Secretary to carry 
                out this paragraph $5,000,000 for each of fiscal years 
                2008 through 2012.''.

    (b) FDPIR Food Package.--Not <<NOTE: Deadline. Reports.>>  later 
than 180 days after the date of enactment of this Act, the Secretary 
shall submit to the Committee on Agriculture of the House of 
Representatives

[[Page 122 STAT. 1124]]

and the Committee on Agriculture, Nutrition, and Forestry of the Senate 
a report that describes--
            (1) how the Secretary derives the process for determining 
        the food package under the food distribution program on Indian 
        reservations established under section 4(b) of the Food and 
        Nutrition Act of 2008 (7 U.S.C. 2013(b)) (referred to in this 
        subsection as the ``food package'');
            (2) the extent to which the food package--
                    (A) addresses the nutritional needs of low-income 
                Native Americans compared to the supplemental nutrition 
                assistance program, particularly for very low-income 
                households;
                    (B) conforms (or fails to conform) to the 2005 
                Dietary Guidelines for Americans published under section 
                301 of the National Nutrition Monitoring and Related 
                Research Act of 1990 (7 U.S.C. 5341);
                    (C) addresses (or fails to address) the nutritional 
                and health challenges that are specific to Native 
                Americans; and
                    (D) is limited by distribution costs or challenges 
                in infrastructure; and
            (3)(A) any plans of the Secretary to revise and update the 
        food package to conform with the most recent Dietary Guidelines 
        for Americans, including any costs associated with the planned 
        changes; or
            (B) if the Secretary does not plan changes to the food 
        package, the rationale of the Secretary for retaining the food 
        package.

              PART III--COMMODITY SUPPLEMENTAL FOOD PROGRAM

SEC. 4221. 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 by striking subsection 
(g) and inserting the following:
    ``(g) Prohibition.--Notwithstanding any other provision of law 
(including regulations), the Secretary may not require a State or local 
agency to prioritize assistance to a particular group of individuals 
that are--
            ``(1) low-income persons aged 60 and older; or
            ``(2) women, infants, and children.''.

            PART IV--SENIOR FARMERS' MARKET NUTRITION PROGRAM

SEC. 4231. SENIORS FARMERS' MARKET NUTRITION PROGRAM.

    Section 4402 of the Farm Security and Rural Investment Act of 2002 
(7 U.S.C. 3007) is amended--
            (1) in subsection (b)(1), by inserting ``honey,'' after 
        ``vegetables,'';
            (2) by striking subsection (c) and inserting the following:

    ``(c) Exclusion of Benefits in Determining Eligibility for Other 
Programs.--The value of any benefit provided to any eligible seniors 
farmers' market nutrition program recipient under this

[[Page 122 STAT. 1125]]

section shall not be considered to be income or resources for any 
purposes under any Federal, State, or local law.''; and
            (3) by adding at the end the following:

    ``(d) Prohibition on Collection of Sales Tax.--Each State shall 
ensure that no State or local tax is collected within the State on a 
purchase of food with a benefit distributed under the seniors farmers' 
market nutrition program.
    ``(e) Regulations.--The Secretary may promulgate such regulations as 
the Secretary considers to be necessary to carry out the seniors 
farmers' market nutrition program.''.

            Subtitle C--Child Nutrition and Related Programs

SEC. 4301. <<NOTE: 42 USC 1758a.>>  STATE PERFORMANCE ON ENROLLING 
                          CHILDREN RECEIVING PROGRAM BENEFITS FOR 
                          FREE SCHOOL MEALS.

    (a) In General.--Not <<NOTE: Deadline. Reports.>>  later than 
December 31, 2008 and June 30 of each year thereafter, the Secretary 
shall submit to the Committees on Agriculture and Education and Labor of 
the House of Representatives and the Committee on Agriculture, 
Nutrition, and Forestry of the Senate a report that assesses the 
effectiveness of each State in enrolling school-aged children in 
households receiving program benefits under the Food and Nutrition Act 
of 2008 (7 U.S.C. 2011 et seq.) (referred to in this section as 
``program benefits'') for free school meals using direct certification.

    (b) Specific Measures.--The assessment of the Secretary of the 
performance of each State shall include--
            (1) an estimate of the number of school-aged children, by 
        State, who were members of a household receiving program 
        benefits at any time in July, August, or September of the prior 
        year;
            (2) an estimate of the number of school-aged children, by 
        State, who were directly certified as eligible for free lunches 
        under the Richard B. Russell National School Lunch Act (42 
        U.S.C. 1751 et seq.), based on receipt of program benefits, as 
        of October 1 of the prior year; and
            (3) an estimate of the number of school-aged children, by 
        State, who were members of a household receiving program 
        benefits at any time in July, August, or September of the prior 
        year who were not candidates for direct certification because on 
        October 1 of the prior year the children attended a school 
        operating under the special assistance provisions of section 
        11(a)(1) of the Richard B. Russell National School Lunch Act (42 
        U.S.C. 1759a(a)(1)) that is not operating in a base year.

    (c) Performance Innovations.--The report of the Secretary shall 
describe best practices from States with the best performance or the 
most improved performance from the previous year.
SEC. 4302. PURCHASES OF LOCALLY PRODUCED FOODS.

    Section 9(j) of the Richard B. Russell National School Lunch Act (42 
U.S.C. 1758(j)) is amended to read as follows:
    ``(j) Purchases of Locally Produced Foods.--The Secretary shall--

[[Page 122 STAT. 1126]]

            ``(1) encourage institutions receiving funds under this Act 
        and the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.) to 
        purchase unprocessed agricultural products, both locally grown 
        and locally raised, to the maximum extent practicable and 
        appropriate;
            ``(2) <<NOTE: Website.>>  advise institutions participating 
        in a program described in paragraph (1) of the policy described 
        in that paragraph and paragraph (3) and post information 
        concerning the policy on the website maintained by the 
        Secretary; and
            ``(3) allow institutions receiving funds under this Act and 
        the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.), 
        including the Department of Defense Fresh Fruit and Vegetable 
        Program, to use a geographic preference for the procurement of 
        unprocessed agricultural products, both locally grown and 
        locally raised.''.
SEC. 4303. HEALTHY FOOD EDUCATION AND PROGRAM REPLICABILITY.

    Section 18(h) of the Richard B. Russell National School Lunch Act 
(42 U.S.C. 1769(h)) is amended--
            (1) in paragraph (1)(C), by inserting ``promotes healthy 
        food education in the school curriculum and'' before 
        ``incorporates'';
            (2) by redesignating paragraph (2) as paragraph (4); and
            (3) by inserting after paragraph (1) the following:
            ``(2) Administration.--In providing grants under paragraph 
        (1), the Secretary shall give priority to projects that can be 
        replicated in schools.
            ``(3) Pilot program for high-poverty schools.--
                    ``(A) Definitions.--In this paragraph:
                          ``(i) Eligible program.--The term `eligible 
                      program' means--
                                    ``(I) a school-based program with 
                                hands-on vegetable gardening and 
                                nutrition education that is incorporated 
                                into the curriculum for 1 or more grades 
                                at 2 or more eligible schools; or
                                    ``(II) a community-based summer 
                                program with hands-on vegetable 
                                gardening and nutrition education that 
                                is part of, or coordinated with, a 
                                summer enrichment program at 2 or more 
                                eligible schools.
                          ``(ii) Eligible school.--The term `eligible 
                      school' means a public school, at least 50 percent 
                      of the students of which are eligible for free or 
                      reduced price meals under this Act.
                    ``(B) Establishment.--The Secretary shall carry out 
                a pilot program under which the Secretary shall provide 
                to nonprofit organizations or public entities in not 
                more than 5 States grants to develop and run, through 
                eligible programs, community gardens at eligible schools 
                in the States that would--
                          ``(i) be planted, cared for, and harvested by 
                      students at the eligible schools; and
                          ``(ii) teach the students participating in the 
                      community gardens about agriculture production 
                      practices and diet.

[[Page 122 STAT. 1127]]

                    ``(C) Priority states.--Of the States in which 
                grantees under this paragraph are located--
                          ``(i) at least 1 State shall be among the 15 
                      largest States, as determined by the Secretary;
                          ``(ii) at least 1 State shall be among the 
                      16th to 30th largest States, as determined by the 
                      Secretary; and
                          ``(iii) at least 1 State shall be a State that 
                      is not described in clause (i) or (ii).
                    ``(D) Use of produce.--Produce from a community 
                garden provided a grant under this paragraph may be--
                          ``(i) used to supplement food provided at the 
                      eligible school;
                          ``(ii) distributed to students to bring home 
                      to the families of the students; or
                          ``(iii) donated to a local food bank or senior 
                      center nutrition program.
                    ``(E) No cost-sharing requirement.--A nonprofit 
                organization or public entity that receives a grant 
                under this paragraph shall not be required to share the 
                cost of carrying out the activities assisted under this 
                paragraph.
                    ``(F) Evaluation.--A nonprofit organization or 
                public entity that receives a grant under this paragraph 
                shall be required to cooperate in an evaluation in 
                accordance with paragraph (1)(H).''.
SEC. 4304. FRESH FRUIT AND VEGETABLE PROGRAM.

    (a) Program.--
            (1) In general.--The Richard B. Russell National School 
        Lunch Act is amended by inserting after section 18 (42 U.S.C. 
        1769) the following:
``SEC. 19. <<NOTE: 42 USC 1769a.>>  FRESH FRUIT AND VEGETABLE 
                      PROGRAM.

    ``(a) In General.--For <<NOTE: Grants.>>  the school year beginning 
July 2008 and each subsequent school year, the Secretary shall provide 
grants to States to carry out a program to make free fresh fruits and 
vegetables available in elementary schools (referred to in this section 
as the `program').

    ``(b) Program.--A school participating in the program shall make 
free fresh fruits and vegetables available to students throughout the 
school day (or at such other times as are considered appropriate by the 
Secretary) in 1 or more areas designated by the school.
    ``(c) Funding to States.--
            ``(1) Minimum grant.--Except as provided in subsection 
        (i)(2), the Secretary shall provide to each of the 50 States and 
        the District of Columbia an annual grant in an amount equal to 1 
        percent of the funds made available for a year to carry out the 
        program.
            ``(2) Additional funding.--Of the funds remaining after 
        grants are made under paragraph (1), the Secretary shall 
        allocate additional funds to each State that is operating a 
        school lunch program under section 4 based on the proportion 
        that--
                    ``(A) the population of the State; bears to
                    ``(B) the population of the United States.

    ``(d) Selection of Schools.--

[[Page 122 STAT. 1128]]

            ``(1) In general.--Except as provided in paragraph (2) of 
        this subsection and section 4304(a)(2) of the Food, 
        Conservation, and Energy Act of 2008, each year, in selecting 
        schools to participate in the program, each State shall--
                    ``(A) ensure that each school chosen to participate 
                in the program is a school--
                          ``(i) in which not less than 50 percent of the 
                      students are eligible for free or reduced price 
                      meals under this Act; and
                          ``(ii) that submits an application in 
                      accordance with subparagraph (D);
                    ``(B) to the maximum extent practicable, give the 
                highest priority to schools with the highest proportion 
                of children who are eligible for free or reduced price 
                meals under this Act;
                    ``(C) ensure that each school selected is an 
                elementary school (as defined in section 9101 of the 
                Elementary and Secondary Education Act of 1965 (20 
                U.S.C. 7801));
                    ``(D) solicit applications from interested schools 
                that include--
                          ``(i) information pertaining to the percentage 
                      of students enrolled in the school submitting the 
                      application who are eligible for free or reduced 
                      price school lunches under this Act;
                          ``(ii) a certification of support for 
                      participation in the program signed by the school 
                      food manager, the school principal, and the 
                      district superintendent (or equivalent positions, 
                      as determined by the school);
                          ``(iii) a plan for implementation of the 
                      program, including efforts to integrate activities 
                      carried out under this section with other efforts 
                      to promote sound health and nutrition, reduce 
                      overweight and obesity, or promote physical 
                      activity; and
                          ``(iv) such other information as may be 
                      requested by the Secretary; and
                    ``(E) encourage applicants to submit a plan for 
                implementation of the program that includes a 
                partnership with 1 or more entities that will provide 
                non-Federal resources (including entities representing 
                the fruit and vegetable industry).
            ``(2) Exception.--Clause (i) of paragraph (1)(A) shall not 
        apply to a State if all schools that meet the requirements of 
        that clause have been selected and the State does not have a 
        sufficient number of additional schools that meet the 
        requirement of that clause.
            ``(3) Outreach to low-income schools.--
                    ``(A) In general.--Prior to making decisions 
                regarding school participation in the program, a State 
                agency shall inform the schools within the State with 
                the highest proportion of free and reduced price meal 
                eligibility, including Native American schools, of the 
                eligibility of the schools for the program with respect 
                to priority granted to schools with the highest 
                proportion of free and reduced price eligibility under 
                paragraph (1)(B).
                    ``(B) Requirement.--In providing information to 
                schools in accordance with subparagraph (A), a State

[[Page 122 STAT. 1129]]

                agency shall inform the schools that would likely be 
                chosen to participate in the program under paragraph 
                (1)(B).

    ``(e) Notice of Availability.--If selected to participate in the 
program, a school shall widely publicize within the school the 
availability of free fresh fruits and vegetables under the program.
    ``(f) Per-Student Grant.--The per-student grant provided to a school 
under this section shall be--
            ``(1) determined by a State agency; and
            ``(2) not less than $50, nor more than $75.

    ``(g) Limitation.--To the maximum extent practicable, each State 
agency shall ensure that in making the fruits and vegetables provided 
under this section available to students, schools offer the fruits and 
vegetables separately from meals otherwise provided at the school under 
this Act or the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.).
    ``(h) Evaluation and Reports.--
            ``(1) In general.--The Secretary shall conduct an evaluation 
        of the program, including a determination as to whether children 
        experienced, as a result of participating in the program--
                    ``(A) increased consumption of fruits and 
                vegetables;
                    ``(B) other dietary changes, such as decreased 
                consumption of less nutritious foods; and
                    ``(C) such other outcomes as are considered 
                appropriate by the Secretary.
            ``(2) Report.--Not later than September 30, 2011, the 
        Secretary shall submit to the Committee on Education and Labor 
        of the House of Representatives and the Committee on 
        Agriculture, Nutrition, and Forestry of the Senate a report that 
        describes the results of the evaluation under paragraph (1).

    ``(i) Funding.--
            ``(1) In general.--Out of the funds made available under 
        subsection (b)(2)(A) of section 14222 of the Food, Conservation, 
        and Energy Act of 2008, the Secretary shall use the following 
        amounts to carry out this section:
                    ``(A) On October 1, 2008, $40,000,000.
                    ``(B) On July 1, 2009, $65,000,000.
                    ``(C) On July 1, 2010, $101,000,000.
                    ``(D) On July 1, 2011, $150,000,000.
                    ``(E) On July 1, 2012, and each July 1 thereafter, 
                the amount made available for the preceding fiscal year, 
                as adjusted to reflect changes for the 12-month period 
                ending the preceding April 30 in the Consumer Price 
                Index for All Urban Consumers published by the Bureau of 
                Labor Statistics of the Department of Labor, for items 
                other than food.
            ``(2) Maintenance of existing funding.--In allocating 
        funding made available under paragraph (1) among the States in 
        accordance with subsection (c), the Secretary shall ensure that 
        each State that received funding under section 18(f) on the day 
        before the date of enactment of the Food, Conservation, and 
        Energy Act of 2008 shall continue to receive sufficient funding 
        under this section to maintain the caseload level of the State 
        under that section as in effect on that date.
            ``(3) <<NOTE: Effective date.>>  Evaluation funding.--On 
        October 1, 2008, out of any funds made available under 
        subsection (b)(2)(A) of section 14222 of the Food, Conservation, 
        and Energy Act of 2008,

[[Page 122 STAT. 1130]]

        the Secretary shall use to carry out the evaluation required 
        under subsection (h), $3,000,000, to remain available for 
        obligation until September 30, 2010.
            ``(4) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to carry out 
        this section any funds transferred for that purpose, without 
        further appropriation.
            ``(5) Authorization of appropriations.--In addition to any 
        other amounts made available to carry out this section, there 
        are authorized to be appropriated such sums as are necessary to 
        expand the program established under this section.
            ``(6) Administrative costs.--
                    ``(A) In general.--Of funds made available to carry 
                out this section for a fiscal year, the Secretary may 
                use not more than $500,000 for the administrative costs 
                of carrying out the program.
                    ``(B) Reservation of funds.--The Secretary shall 
                allow each State to reserve such funding as the 
                Secretary determines to be necessary to administer the 
                program in the State (with adjustments for the size of 
                the State and the grant amount), but not to exceed the 
                amount required to pay the costs of 1 full-time 
                coordinator for the program in the State.
            ``(7) Reallocation.--
                    ``(A) Among states.--The Secretary may reallocate 
                any amounts made available to carry out this section 
                that are not obligated or expended by a date determined 
                by the Secretary.
                    ``(B) Within states.--A State that receives a grant 
                under this section may reallocate any amounts made 
                available under the grant that are not obligated or 
                expended by a date determined by the Secretary.''.
            (2) <<NOTE: 42 USC 1769a note. Waiver authority.>>  
        Transition of existing schools.--
                    (A) Existing secondary schools.--Section 19(d)(1)(C) 
                of the Richard B. Russell National School Lunch Act (as 
                amended by paragraph (1)) may be waived by a State until 
                July 1, 2010, for each secondary school in the State 
                that has been awarded funding under section 18(f) of 
                that Act (42 U.S.C. 1769(f)) for the school year 
                beginning July 1, 2008.
                    (B) School year beginning july 1, 2008.--To 
                facilitate transition from the program authorized under 
                section 18(f) of the Richard B. Russell National School 
                Lunch Act (42 U.S.C. 1769(f)) (as in effect on the day 
                before the date of enactment of this Act) to the program 
                established under section 19 of that Act (as amended by 
                paragraph (1))--
                          (i) for the school year beginning July 1, 
                      2008, the Secretary may permit any school selected 
                      for participation under section 18(f) of that Act 
                      (42 U.S.C. 1769(f)) for that school year to 
                      continue to participate under section 19 of that 
                      Act until the end of that school year; and
                          (ii) funds made available under that Act for 
                      fiscal year 2009 may be used to support the 
                      participation of any schools selected to 
                      participate in the program authorized under 
                      section 18(f) of that Act (42 U.S.C.

[[Page 122 STAT. 1131]]

                      1769(f)) (as in effect on the day before the date 
                      of enactment of this Act).

    (b) Conforming Amendments.--Section 18 of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1769) is amended--
            (1) by striking subsection (f); and
            (2) by redesignating subsections (g) through (j) as 
        subsections (f) through (i), respectively.
SEC. 4305. <<NOTE: 42 USC 1755a.>>  WHOLE GRAIN PRODUCTS.

    (a) Purpose.--The purpose of this section is to encourage greater 
awareness and interest in the number and variety of whole grain products 
available to schoolchildren, as recommended by the 2005 Dietary 
Guidelines for Americans.
    (b) Definition of Eligible Whole Grains and Whole Grain Products.--
In this section, the terms ``whole grains'' and ``whole grain products'' 
have the meaning given the terms by the Food and Nutrition Service in 
the HealthierUS School Challenge.
    (c) Purchase of Whole Grains and Whole Grain Products.--In addition 
to the commodities delivered under section 6 of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1755), the Secretary shall purchase 
whole grains and whole grain products for use in--
            (1) the school lunch program established under the Richard 
        B. Russell National School Lunch Act (42 U.S.C. 1751 et seq.); 
        and
            (2) the school breakfast program established by section 4 of 
        the Child Nutrition Act of 1966 (42 U.S.C. 1773).

    (d) Evaluation.--Not <<NOTE: Deadline.>>  later than September 30, 
2011, the Secretary shall conduct an evaluation of the activities 
conducted under subsection (c) that includes--
            (1) an evaluation of whether children participating in the 
        school lunch and breakfast programs increased their consumption 
        of whole grains;
            (2) an evaluation of which whole grains and whole grain 
        products are most acceptable for use in the school lunch and 
        breakfast programs;
            (3) any recommendations of the Secretary regarding the 
        integration of whole grain products in the school lunch and 
        breakfast programs; and
            (4) an evaluation of any other outcomes determined to be 
        appropriate by the Secretary.

    (e) Report.--As soon as practicable after the completion of the 
evaluation under subsection (d), the Secretary shall submit to the 
Committee on Agriculture, Nutrition, and Forestry of the Senate and the 
Committee on Education and Labor of the House of Representative a report 
describing the results of the evaluation.
SEC. 4306. <<NOTE: 7 USC 2208 note.>>  BUY AMERICAN REQUIREMENTS.

    (a) Findings.--The Congress finds the following:
            (1) Federal law requires that commodities and products 
        purchased with Federal funds be, to the extent practicable, of 
        domestic origin.
            (2) Federal Buy American statutory requirements seek to 
        ensure that purchases made with Federal funds benefit domestic 
        producers.
            (3) The Richard B. Russell National School Lunch Act (42 
        U.S.C. 1751 et seq.) requires the use of domestic food

[[Page 122 STAT. 1132]]

        products for all meals served under the program, including food 
        products purchased with local funds.

    (b) Buy American Statutory Requirements.--The Department of 
Agriculture should undertake training, guidance, and enforcement of the 
various current Buy American statutory requirements and regulations, 
including those of the Richard B. Russell National School Lunch Act (42 
U.S.C. 1751 et seq.).
SEC. 4307. SURVEY OF FOODS PURCHASED BY SCHOOL FOOD AUTHORITIES.

    (a) In General.--For fiscal year 2009, the Secretary shall carry out 
a nationally representative survey of the foods purchased during the 
most recent school year for which data is available by school 
authorities participating in the school lunch program established under 
the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et 
seq.).
    (b) Report.--
            (1) In general.--On completion of the survey, the Secretary 
        shall submit to the Committees on Agriculture and Education and 
        Labor of the House of Representatives and the Committee on 
        Agriculture, Nutrition, and Forestry of the Senate a report that 
        describes the results of the survey.
            (2) Interim requirement.--If the initial report required 
        under paragraph (1) is not submitted to the Committees referred 
        to in that paragraph by June 30, 2009, the Secretary shall 
        submit to the Committees an interim report that describes the 
        relevant survey data, or a sample of such data, available to the 
        Secretary as of that date.

    (c) Funding.--Of the funds of the Commodity Credit Corporation, the 
Secretary shall use to carry out this section not more than $3,000,000.

                        Subtitle D--Miscellaneous

SEC. 4401. BILL EMERSON NATIONAL HUNGER FELLOWS AND MICKEY LELAND 
                          INTERNATIONAL HUNGER FELLOWS.

    Section 4404 of the Farm Security and Rural Investment Act of 2002 
(2 U.S.C. 1161) is amended to read as follows:
``SEC. 4404. <<NOTE: Bill Emerson National Hunger Fellows and 
                          Mickey Leland International Hunger 
                          Fellows Program Act of 2008.>>  BILL 
                          EMERSON NATIONAL HUNGER FELLOWS AND 
                          MICKEY LELAND INTERNATIONAL HUNGER 
                          FELLOWS.

    ``(a) Short Title.--This section may be cited as the `Bill Emerson 
National Hunger Fellows and Mickey Leland International Hunger Fellows 
Program Act of 2008'.
    ``(b) Definitions.--In this subsection:
            ``(1) Director.--The term `Director' means the head of the 
        Congressional Hunger Center.
            ``(2) Fellow.--The term `fellow' means--
                    ``(A) a Bill Emerson Hunger Fellow; or
                    ``(B) Mickey Leland Hunger Fellow.
            ``(3) Fellowship programs.--The term `Fellowship Programs' 
        means the Bill Emerson National Hunger Fellowship Program and 
        the Mickey Leland International Hunger Fellowship Program 
        established under subsection (c)(1).

    ``(c) Fellowship Programs.--

[[Page 122 STAT. 1133]]

            ``(1) In general.--There is established the Bill Emerson 
        National Hunger Fellowship Program and the Mickey Leland 
        International Hunger Fellowship Program.
            ``(2) Purposes.--
                    ``(A) In general.--The purposes of the Fellowship 
                Programs are--
                          ``(i) to encourage future leaders of the 
                      United States--
                                    ``(I) to pursue careers in 
                                humanitarian and public service;
                                    ``(II) to recognize the needs of 
                                low-income people and hungry people;
                                    ``(III) to provide assistance to 
                                people in need; and
                                    ``(IV) to seek public policy 
                                solutions to the challenges of hunger 
                                and poverty;
                          ``(ii) to provide training and development 
                      opportunities for such leaders through placement 
                      in programs operated by appropriate organizations 
                      or entities; and
                          ``(iii) to increase awareness of the 
                      importance of public service.
                    ``(B) Bill emerson hunger fellowship program.--The 
                purpose of the Bill Emerson Hunger Fellowship Program is 
                to address hunger and poverty in the United States.
                    ``(C) Mickey leland hunger fellowship program.--The 
                purpose of the Mickey Leland Hunger Fellowship Program 
                is to address international hunger and other 
                humanitarian needs.
            ``(3) Administration.--
                    ``(A) In general.--Subject <<NOTE: Grants.>>  to 
                subparagraph (B), the Secretary shall offer to provide a 
                grant to the Congressional Hunger Center to administer 
                the Fellowship Programs.
                    ``(B) Terms of grant.--The terms of the grant 
                provided under subparagraph (A), including the length of 
                the grant and provisions for the alteration or 
                termination of the grant, shall be determined by the 
                Secretary in accordance with this section.

    ``(d) Fellowships.--
            ``(1) In general.--The Director shall make available Bill 
        Emerson Hunger Fellowships and Mickey Leland Hunger Fellowships 
        in accordance with this subsection.
            ``(2) Curriculum.--
                    ``(A) In general.--The Fellowship Programs shall 
                provide experience and training to develop the skills 
                necessary to train fellows to carry out the purposes 
                described in subsection (c)(2), including--
                          ``(i) training in direct service programs for 
                      the hungry and other anti-hunger programs in 
                      conjunction with community-based organizations 
                      through a program of field placement; and
                          ``(ii) providing experience in policy 
                      development through placement in a governmental 
                      entity or nongovernmental, nonprofit, or private 
                      sector organization.
                    ``(B) Work plan.--To carry out subparagraph (A) and 
                assist in the evaluation of the fellowships under 
                paragraph (6), the Director shall, for each fellow, 
                approve a work

[[Page 122 STAT. 1134]]

                plan that identifies the target objectives for the 
                fellow in the fellowship, including specific duties and 
                responsibilities relating to those objectives.
            ``(3) Period of fellowship.--
                    ``(A) Bill emerson hunger fellow.--A Bill Emerson 
                Hunger Fellowship awarded under this section shall be 
                for not more than 15 months.
                    ``(B) Mickey leland hunger fellow.--A Mickey Leland 
                Hunger Fellowship awarded under this section shall be 
                for not more than 2 years.
            ``(4) Selection of fellows.--
                    ``(A) In general.--Fellowships shall be awarded 
                pursuant to a nationwide competition established by the 
                Director.
                    ``(B) Qualifications.--A successful program 
                applicant shall be an individual who has demonstrated--
                          ``(i) an intent to pursue a career in 
                      humanitarian services 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 are considered 
                      to be appropriate by the Director.
            ``(5) Amount of award.--
                    ``(A) In general.--A fellow shall receive--
                          ``(i) a living allowance during the term of 
                      the Fellowship; and
                          ``(ii) subject to subparagraph (B), an end-of-
                      service award.
                    ``(B) Requirement for successful completion of 
                fellowship.--Each fellow shall be entitled to receive an 
                end-of-service award at an appropriate rate for each 
                month of satisfactory service completed, as determined 
                by the Director.
                    ``(C) Terms of fellowship.--A fellow shall not be 
                considered an employee of--
                          ``(i) the Department of Agriculture;
                          ``(ii) the Congressional Hunger Center; or
                          ``(iii) a host agency in the field or policy 
                      placement of the fellow.
                    ``(D) 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'.
                          ``(ii) Leland fellow.--An individual awarded a 
                      fellowship from the Mickey Leland Hunger 
                      Fellowship shall be known as a `Leland Fellow'.
            ``(6) Evaluations and audits.--Under terms stipulated in the 
        contract entered into under subsection (c)(3), the Director 
        shall--
                    ``(A) conduct periodic evaluations of the Fellowship 
                Programs; and
                    ``(B) arrange for annual independent financial 
                audits of expenditures under the Fellowship Programs.

    ``(e) Authority.--

[[Page 122 STAT. 1135]]

            ``(1) In general.--Subject to paragraph (2), in carrying out 
        this section, the Director may solicit, accept, use, and dispose 
        of gifts, bequests, or devises of services or property, both 
        real and personal, for the purpose of facilitating the work of 
        the Fellowship Programs.
            ``(2) Limitation.--Gifts, bequests, or devises of money and 
        proceeds from sales of other property received as gifts, 
        bequests, or devises shall be used exclusively for the purposes 
        of the Fellowship Programs.

    ``(f) Report.--The Director shall annually submit to the Secretary 
of Agriculture, 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 activities and expenditures of the 
        Fellowship Programs during the preceding fiscal year, including 
        expenditures made from funds made available under subsection 
        (g); and
            ``(2) includes the results of evaluations and audits 
        required by subsection (d).

    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary such sums as are necessary to carry out 
this section, to remain available until expended.''.
SEC. 4402. ASSISTANCE FOR COMMUNITY FOOD PROJECTS.

    Section 25 of the Food and Nutrition Act of 2008 (7 U.S.C. 2034) is 
amended--
            (1) by striking subsection (a) and inserting the following:

    ``(a) Definitions.--In this section:
            ``(1) Community food project.--In this section, the term 
        `community food project' means a community-based project that--
                    ``(A) requires a 1-time contribution of Federal 
                assistance to become self-sustaining; and
                    ``(B) is designed--
                          ``(i)(I) to meet the food needs of low-income 
                      individuals;
                          ``(II) to increase the self-reliance of 
                      communities in providing for the food needs of the 
                      communities; and
                          ``(III) to promote comprehensive responses to 
                      local food, farm, and nutrition issues; or
                          ``(ii) to meet specific State, local, or 
                      neighborhood food and agricultural needs, 
                      including needs relating to--
                                    ``(I) infrastructure improvement and 
                                development;
                                    ``(II) planning for long-term 
                                solutions; or
                                    ``(III) the creation of innovative 
                                marketing activities that mutually 
                                benefit agricultural producers and low-
                                income consumers.
            ``(2) Center.--The term `Center' means the healthy urban 
        food enterprise development center established under subsection 
        (h).
            ``(3) Underserved community.--The term `underserved 
        community' means a community (including an urban or rural 
        community or an Indian tribe) that, as determined by the 
        Secretary, has--

[[Page 122 STAT. 1136]]

                    ``(A) limited access to affordable, healthy foods, 
                including fresh fruits and vegetables;
                    ``(B) a high incidence of a diet-related disease 
                (including obesity) as compared to the national average;
                    ``(C) a high rate of hunger or food insecurity; or
                    ``(D) severe or persistent poverty.'';
            (2) by redesignating subsection (h) as subsection (i); and
            (3) by inserting after subsection (g) the following:

    ``(h) Healthy Urban Food Enterprise Development Center.--
            ``(1) Definition of eligible entity.--In this subsection, 
        the term `eligible entity' means--
                    ``(A) a nonprofit organization;
                    ``(B) a cooperative;
                    ``(C) a commercial entity;
                    ``(D) an agricultural producer;
                    ``(E) an academic institution;
                    ``(F) an individual; and
                    ``(G) such other entities as the Secretary may 
                designate.
            ``(2) Establishment.--The Secretary shall offer to provide a 
        grant to a nonprofit organization to establish and support a 
        healthy urban food enterprise development center to carry out 
        the purpose described in paragraph (3).
            ``(3) Purpose.--The purpose of the Center is to increase 
        access to healthy affordable foods, including locally produced 
        agricultural products, to underserved communities.
            ``(4) Activities.--
                    ``(A) Technical assistance and information.--The 
                Center shall collect, develop, and provide technical 
                assistance and information to small and medium-sized 
                agricultural producers, food wholesalers and retailers, 
                schools, and other individuals and entities regarding 
                best practices and the availability of assistance for 
                aggregating, storing, processing, and marketing locally 
                produced agricultural products and increasing the 
                availability of such products in underserved 
                communities.
                    ``(B) Authority to subgrant.--The Center may provide 
                subgrants to eligible entities--
                          ``(i) to carry out feasibility studies to 
                      establish businesses for the purpose described in 
                      paragraph (3); and
                          ``(ii) to establish and otherwise assist 
                      enterprises that process, distribute, aggregate, 
                      store, and market healthy affordable foods.
            ``(5) Priority.--In providing technical assistance and 
        grants under paragraph (4), the Center shall give priority to 
        applications that include projects--
                    ``(A) to benefit underserved communities; and
                    ``(B) to develop market opportunities for small and 
                mid-sized farm and ranch operations.
            ``(6) Report.--For each fiscal year for which the nonprofit 
        organization described in paragraph (2) receives funds, the 
        organization shall submit to the Secretary a report describing 
        the activities carried out in the preceding fiscal year, 
        including--
                    ``(A) a description of technical assistance provided 
                by the Center;

[[Page 122 STAT. 1137]]

                    ``(B) the total number and a description of the 
                subgrants provided under paragraph (4)(B);
                    ``(C) a complete listing of cases in which the 
                activities of the Center have resulted in increased 
                access to healthy, affordable foods, such as fresh fruit 
                and vegetables, particularly for school-aged children 
                and individuals in low-income communities; and
                    ``(D) a determination of whether the activities 
                identified in subparagraph (C) are sustained during the 
                years following the initial provision of technical 
                assistance and subgrants under this section.
            ``(7) Competitive award process.--The Secretary shall use a 
        competitive process to award funds to establish the Center.
            ``(8) Limitation on administrative expenses.--Not more than 
        10 percent of the total amount allocated for this subsection in 
        a given fiscal year may be used for administrative expenses.
            ``(9) Funding.--
                    ``(A) In general.--Out of any funds in the Treasury 
                not otherwise appropriated, the Secretary of the 
                Treasury shall transfer to the Secretary to carry out 
                this subsection $1,000,000 for each of fiscal years 2009 
                through 2011.
                    ``(B) Additional funding.--There is authorized to be 
                appropriated $2,000,000 to carry out this subsection for 
                fiscal year 2012.''.
SEC. 4403. <<NOTE: 7 USC 5311a.>>  JOINT NUTRITION MONITORING AND 
                          RELATED RESEARCH ACTIVITIES.

    The Secretary and the Secretary of Health and Human Services shall 
continue to provide jointly for national nutrition monitoring and 
related research activities carried out as of the date of enactment of 
this Act--
            (1) to collect continuous dietary, health, physical 
        activity, and diet and health knowledge data on a nationally 
        representative sample;
            (2) to periodically collect data on special at-risk 
        populations, as identified by the Secretaries;
            (3) to distribute information on health, nutrition, the 
        environment, and physical activity to the public in a timely 
        fashion;
            (4) to analyze new data that becomes available;
            (5) to continuously update food composition tables; and
            (6) to research and develop data collection methods and 
        standards.
SEC. 4404. <<NOTE: 7 USC 612c-5.>>  SECTION 32 FUNDS FOR PURCHASE 
                          OF FRUITS, VEGETABLES, AND NUTS TO 
                          SUPPORT DOMESTIC NUTRITION ASSISTANCE 
                          PROGRAMS.

    (a) Funding for Additional Purchases of Fruits, Vegetables, and 
Nuts.--In addition to the purchases of fruits, vegetables, and nuts 
required by section 10603 of the Farm Security and Rural Investment Act 
of 2002 (7 U.S.C. 612c-4), the Secretary of Agriculture shall purchase 
fruits, vegetables, and nuts for the purpose of providing nutritious 
foods for use in domestic nutrition assistance programs, using, of the 
funds made available under section 32 of the Act of August 24, 1935 (7 
U.S.C. 612c), the following amounts:
            (1) $190,000,000 for fiscal year 2008.

[[Page 122 STAT. 1138]]

            (2) $193,000,000 for fiscal year 2009.
            (3) $199,000,000 for fiscal year 2010.
            (4) $203,000,000 for fiscal year 2011.
            (5) $206,000,000 for fiscal year 2012 and each fiscal year 
        thereafter.

    (b) Form of Purchases.--Fruits, vegetables, and nuts may be 
purchased under this section in the form of frozen, canned, dried, or 
fresh fruits, vegetables, and nuts.
    (c) Purchase of Fresh Fruits and Vegetables for Distribution to 
Schools and Service Institutions.--Section 10603 of the Farm Security 
and Rural Investment Act of 2002 (7 U.S.C. 612c-4) is amended by 
striking subsection (b) and inserting the following:
    ``(b) <<NOTE: 7 USC 612c-4.>>  Purchase of Fresh Fruits and 
Vegetables for Distribution to Schools and Service Institutions.--The 
Secretary of Agriculture shall purchase fresh fruits and vegetables for 
distribution to schools and service institutions in accordance with 
section 6(a) of the Richard B. Russell National School Lunch Act (42 
U.S.C. 1755(a)) using, of the amount specified in subsection (a), not 
less than $50,000,000 for each of fiscal years 2008 through 2012.''.
SEC. 4405. <<NOTE: 7 USC 7517.>>  HUNGER-FREE COMMUNITIES.

    (a) Definitions.--In this section:
            (1) Eligible entity.--The term ``eligible entity'' means a 
        public food program service provider or nonprofit organization, 
        including an emergency feeding organization, that has 
        collaborated, or will collaborate, with 1 or more local partner 
        organizations to achieve at least 1 hunger-free communities 
        goal.
            (2) Emergency feeding organization.--The term ``emergency 
        feeding organization'' has the meaning given the term in section 
        201A of the Emergency Food Assistance Act of 1983 (7 U.S.C. 
        7501).
            (3) Hunger-free communities goal.--The term ``hunger-free 
        communities goal'' means any of the 14 goals described in the H. 
        Con. Res. 302 (102nd Congress).

    (b) Hunger-Free Communities Collaborative Grants.--
            (1) Program.--
                    (A) In general.--The Secretary shall use not more 
                than 50 percent of any funds made available under 
                subsection (e) to make grants to eligible entities to 
                pay the Federal share of the costs of an activity 
                described in paragraph (2).
                    (B) Federal share.--The Federal share of the cost of 
                carrying out an activity under this subsection shall not 
                exceed 80 percent.
                    (C) Non-federal share.--
                          (i) Calculation.--The non-Federal share of the 
                      cost of an activity under this subsection may be 
                      provided in cash or fairly evaluated in-kind 
                      contributions, including facilities, equipment, or 
                      services.
                          (ii) Sources.--Any entity may provide the non-
                      Federal share of the cost of an activity under 
                      this subsection through a State government, a 
                      local government, or a private source.

[[Page 122 STAT. 1139]]

            (2) Use of funds.--An eligible entity in a community shall 
        use a grant received under this subsection for any fiscal year 
        for hunger relief activities, including--
                    (A) meeting the immediate needs of people who 
                experience hunger in the community served by the 
                eligible entity by--
                          (i) distributing food;
                          (ii) providing community outreach to assist in 
                      participation in federally assisted nutrition 
                      programs, including--
                                    (I) the school breakfast program 
                                established by section 4 of the Child 
                                Nutrition Act of 1966 (42 U.S.C. 1773);
                                    (II) the school lunch program 
                                established under the Richard B. Russell 
                                National School Lunch Act (42 U.S.C. 
                                1751 et seq.);
                                    (III) the summer food service 
                                program for children established under 
                                section 13 of that Act; and
                                    (IV) other Federal programs that 
                                provide food for children in child care 
                                facilities and homeless and older 
                                individuals; or
                          (iii) improving access to food as part of a 
                      comprehensive service; and
                    (B) developing new resources and strategies to help 
                reduce hunger in the community and prevent hunger in the 
                future by--
                          (i) developing creative food resources, such 
                      as community gardens, buying clubs, food 
                      cooperatives, community-owned and operated grocery 
                      stores, and farmers' markets;
                          (ii) coordinating food services with park and 
                      recreation programs and other community-based 
                      outlets to reduce barriers to access; or
                          (iii) creating nutrition education programs 
                      for at-risk populations to enhance food-purchasing 
                      and food-preparation skills and to heighten 
                      awareness of the connection between diet and 
                      health.

    (c) Hunger-Free Communities Infrastructure Grants.--
            (1) Program authorized.--
                    (A) In general.--The Secretary shall use not more 
                than 50 percent of any funds made available for a fiscal 
                year under subsection (e) to make grants to eligible 
                entities to pay the Federal share of the costs of an 
                activity described in paragraph (2).
                    (B) Federal share.--The Federal share of the cost of 
                carrying out an activity under this subsection shall not 
                exceed 80 percent.
            (2) Application.--
                    (A) In general.--To receive a grant under this 
                subsection, an eligible entity shall submit an 
                application at such time, in such form, and containing 
                such information as the Secretary may prescribe.
                    (B) Contents.--Each application submitted under 
                subparagraph (A) shall--
                          (i) identify any activity described in 
                      paragraph (3) that the grant will be used to fund; 
                      and

[[Page 122 STAT. 1140]]

                          (ii) describe the means by which an activity 
                      identified under clause (i) will reduce hunger in 
                      the community of the eligible entity.
                    (C) Priority.--In making grants under this 
                subsection, the Secretary shall give priority to 
                eligible entities that demonstrate 2 or more of the 
                following:
                          (i) The eligible entity serves a community in 
                      which the rates of food insecurity, hunger, 
                      poverty, or unemployment are demonstrably higher 
                      than national average rates.
                          (ii) The eligible entity serves a community 
                      that has successfully carried out long-term 
                      efforts to reduce hunger in the community.
                          (iii) The eligible entity serves a community 
                      that provides public support for the efforts of 
                      the eligible entity.
                          (iv) The eligible entity is committed to 
                      achieving more than 1 hunger-free communities 
                      goal.
            (3) Use of funds.--An eligible entity shall use a grant 
        received under this subsection to construct, expand, or repair a 
        facility or equipment to support hunger relief efforts in the 
        community.

    (d) Report.--If funds are made available under subsection (e) to 
carry out this section, not later than September 30, 2012, the Secretary 
shall submit to Congress a report that describes--
            (1) each grant made under this section, including--
                    (A) a description of any activity funded; and
                    (B) the degree of success of each activity funded in 
                achieving hunger free-communities goals; and
            (2) the degree of success of all activities funded under 
        this section in achieving domestic hunger goals.

    (e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section for 
each of fiscal years 2008 through 2012.
SEC. 4406. REAUTHORIZATION OF FEDERAL FOOD ASSISTANCE PROGRAMS.

    (a) Supplemental Nutrition Assistance Program.--
            (1) Authorization of appropriations.--Section 18(a)(1) of 
        the Food and Nutrition Act of 2008 (7 U.S.C. 2027(a)(1)) is 
        amended in the first sentence by striking ``for each of the 
        fiscal years 2003 through 2007'' and inserting ``for each of 
        fiscal years 2008 through 2012''.
            (2) Grants for simple application and eligibility 
        determination systems and improved access to benefits.--Section 
        11(t)(1) of the Food and Nutrition Act of 2008 (7 U.S.C. 
        2020(t)(1)) is amended by striking ``For each of fiscal years 
        2003 through 2007'' and inserting ``Subject to the availability 
        of appropriations under section 18(a), for each fiscal year''.
            (3) Funding of employment and training programs.--Section 
        16(h)(1) of the Food and Nutrition Act of 2008 (7 U.S.C. 
        2025(h)(1)) is amended--
                    (A) in subparagraph (A), by striking ``the amount 
                of--'' and all that follows through the end of the 
                subparagraph and inserting ``, $90,000,000 for each 
                fiscal year.''; and

[[Page 122 STAT. 1141]]

                    (B) in subparagraph (E)(i), by striking ``for each 
                of fiscal years 2002 through 2007'' and inserting ``for 
                each fiscal year''.
            (4) Reductions in payments for administrative costs.--
        Section 16(k)(3) of the Food and Nutrition Act of 2008 (7 U.S.C. 
        2025(k)(3)) is amended--
                    (A) in the first sentence of subparagraph (A), by 
                striking ``effective for each of fiscal years 1999 
                through 2007,''; and
                    (B) in subparagraph (B)(ii), by striking ``through 
                fiscal year 2007''.
            (5) Cash payment pilot projects.--Section 17(b)(1)(B)(vi) of 
        the Food and Nutrition Act of 2008 (7 U.S.C. 2026(b)(1)(B)(vi)) 
        is amended--
                    (A) by striking ``Any pilot'' and inserting 
                ``Subject to the availability of appropriations under 
                section 18(a), any pilot''; and
                    (B) by striking ``through October 1, 2007,''.
            (6) Consolidated block grants for puerto rico and american 
        samoa.--Section 19(a)(2)(A)(ii) of the Food and Nutrition Act of 
        2008 (7 U.S.C. 2028(a)(2)(A)(ii)) is amended by striking ``for 
        each of fiscal years 2004 through 2007'' and inserting ``subject 
        to the availability of appropriations under section 18(a), for 
        each fiscal year thereafter''.
            (7) Assistance for community food projects.--Section 25 of 
        the Food and Nutrition Act of 2008 (7 U.S.C. 2034) is amended--
                    (A) in subsection (b)(2)(B), by striking ``for each 
                of fiscal years 1997 through 2007'' and inserting ``for 
                fiscal year 2008 and each fiscal year thereafter''; and
                    (B) in subsection (i)(4) (as redesignated by section 
                4402), by striking ``of fiscal years 2003 through 2007'' 
                and inserting ``fiscal year thereafter''.

    (b) Commodity Distribution.--
            (1) 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 by striking ``for each of the 
        fiscal years 2003 through 2007'' and inserting ``for fiscal year 
        2008 and each fiscal year thereafter''.
            (2) 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 ``years 1991 through 2007'' and inserting ``years 2008 
        through 2012''.
            (3) 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--
                    (A) in subsection (a)--
                          (i) in paragraph (1), by striking ``each of 
                      fiscal years 2003 through 2007'' and inserting 
                      ``each of fiscal years 2008 through 2012''; and
                          (ii) in paragraph (2)(B), by striking the 
                      subparagraph designation and heading and all that 
                      follows through ``2007'' and inserting the 
                      following:
                    ``(B) Subsequent fiscal years.--For each of fiscal 
                years 2004 through 2012''; and

[[Page 122 STAT. 1142]]

                    (B) in subsection (d)(2), by striking ``each of the 
                fiscal years 1991 through 2007'' and inserting ``each of 
                fiscal years 2008 through 2012''.
            (4) 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 ``Effective through September 30, 2007'' and 
        inserting ``For each of fiscal years 2008 through 2012''.

    (c) Farm Security and Rural Investment.--
            (1) Seniors farmers' market nutrition program.--Section 4402 
        of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 
        3007) is amended by striking by striking subsection (a) and 
        inserting the following:

    ``(a) Funding.--Of the funds of the Commodity Credit Corporation, 
the Secretary of Agriculture shall use to carry out and expand the 
seniors farmers' market nutrition program $20,600,000 for each of fiscal 
years 2008 through 2012.''.
            (2) Nutrition information and awareness pilot program.--
        Section 4403(f) of the Farm Security and Rural Investment Act of 
        2002 (7 U.S.C. 3171 note; Public Law 107-171) is amended by 
        striking ``2007'' and inserting ``2012''.
SEC. 4407. <<NOTE: 2 USC 1161 note.>>  EFFECTIVE AND 
                          IMPLEMENTATION DATES.

    Except as otherwise provided in this title, this title and the 
amendments made by this title take effect on October 1, 2008.

                             TITLE V--CREDIT

                    Subtitle A--Farm Ownership Loans

SEC. 5001. DIRECT LOANS.

    Section 302 of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1922) is amended--
            (1) by striking the section designation and heading and all 
        that follows through ``(a) The Secretary is authorized to'' and 
        inserting the following:
``SEC. 302. PERSONS ELIGIBLE FOR REAL ESTATE LOANS.

    ``(a) In General.--The Secretary may''; and
            (2) in subsection (a)(2), by inserting ``, taking into 
        consideration all farming experience of the applicant, without 
        regard to any lapse between farming experiences'' after 
        ``farming operations''.
SEC. 5002. CONSERVATION LOAN AND LOAN GUARANTEE PROGRAM.

    Section 304 of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1924) is amended to read as follows:
``SEC. 304. CONSERVATION LOAN AND LOAN GUARANTEE PROGRAM.

    ``(a) In General.--The Secretary may make or guarantee qualified 
conservation loans to eligible borrowers under this section.
    ``(b) Definitions.--In this section:
            ``(1) Qualified conservation loan.--The term `qualified 
        conservation loan' means a loan, the proceeds of which are used 
        to cover the costs to the borrower of carrying out a qualified 
        conservation project.

[[Page 122 STAT. 1143]]

            ``(2) Qualified conservation project.--The term `qualified 
        conservation project' means conservation measures that address 
        provisions of a conservation plan of the eligible borrower.
            ``(3) Conservation plan.--The term `conservation plan' means 
        a plan, approved by the Secretary, that, for a farming or 
        ranching operation, identifies the conservation activities that 
        will be addressed with loan funds provided under this section, 
        including--
                    ``(A) the installation of conservation structures to 
                address soil, water, and related resources;
                    ``(B) the establishment of forest cover for 
                sustained yield timber management, erosion control, or 
                shelter belt purposes;
                    ``(C) the installation of water conservation 
                measures;
                    ``(D) the installation of waste management systems;
                    ``(E) the establishment or improvement of permanent 
                pasture;
                    ``(F) compliance with section 1212 of the Food 
                Security Act of 1985; and
                    ``(G) other purposes consistent with the plan, 
                including the adoption of any other emerging or existing 
                conservation practices, techniques, or technologies 
                approved by the Secretary.

    ``(c) Eligibility.--
            ``(1) In general.--The Secretary may make or guarantee loans 
        to farmers or ranchers in the United States, farm cooperatives, 
        private domestic corporations, partnerships, joint operations, 
        trusts, or limited liability companies that are controlled by 
        farmers or ranchers and engaged primarily and directly in 
        agricultural production in the United States.
            ``(2) Requirements.--To be eligible for a loan under this 
        section, applicants shall meet the requirements in paragraphs 
        (1) and (2) of section 302(a).

    ``(d) Priority.--In making or guaranteeing loans under this section, 
the Secretary shall give priority to--
            ``(1) qualified beginning farmers or ranchers and socially 
        disadvantaged farmers or ranchers;
            ``(2) owners or tenants who use the loans to convert to 
        sustainable or organic agricultural production systems; and
            ``(3) producers who use the loans to build conservation 
        structures or establish conservation practices to comply with 
        section 1212 of the Food Security Act of 1985.

    ``(e) Limitations Applicable to Loan Guarantees.--The portion of a 
loan that the Secretary may guarantee under this section shall be 75 
percent of the principal amount of the loan.
    ``(f) Administrative Provisions.--The Secretary shall ensure, to the 
maximum extent practicable, that loans made or guaranteed under this 
section are distributed across diverse geographic regions.
    ``(g) Credit Eligibility.--The provisions of paragraphs (1) and (3) 
of section 333 shall not apply to loans made or guaranteed under this 
section.
    ``(h) Authorization of Appropriations.--For each of fiscal years 
2008 through 2012, there are authorized to be appropriated to the 
Secretary such funds as are necessary to carry out this section.''.

[[Page 122 STAT. 1144]]

SEC. 5003. LIMITATIONS ON AMOUNT OF FARM OWNERSHIP LOANS.

    Section 305(a)(2) of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 1925(a)(2)) is amended by striking ``$200,000'' and inserting 
``$300,000''.
SEC. 5004. DOWN PAYMENT LOAN PROGRAM.

    Section 310E of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1935) is amended--
            (1) in subsection (a)(1), by striking ``and ranchers'' and 
        inserting ``or ranchers and socially disadvantaged farmers or 
        ranchers'';
            (2) in subsection (b)--
                    (A) by striking paragraph (1) and inserting the 
                following;
            ``(1) Principal.--Each loan made under this section shall be 
        in an amount that does not exceed 45 percent of the least of--
                    ``(A) the purchase price of the farm or ranch to be 
                acquired;
                    ``(B) the appraised value of the farm or ranch to be 
                acquired; or
                    ``(C) $500,000.
            ``(2) Interest rate.--The interest rate on any loan made by 
        the Secretary under this section shall be a rate equal to the 
        greater of--
                    ``(A) the difference obtained by subtracting 4 
                percent from the interest rate for farm ownership loans 
                under this subtitle; or
                    ``(B) 1.5 percent.''; and
                    (B) in paragraph (3), by striking ``15'' and 
                inserting ``20'';
            (3) in subsection (c)--
                    (A) in paragraph (1), by striking ``10'' and 
                inserting ``5'';
                    (B) by striking paragraph (2) and redesignating 
                paragraph (3) as paragraph (2); and
                    (C) in paragraph (2)(B) (as so redesignated), by 
                striking ``15-year'' and inserting ``20-year'';
            (4) in subsection (d)--
                    (A) in paragraph (3)--
                          (i) by inserting ``and socially disadvantaged 
                      farmers or ranchers'' after ``ranchers''; and
                          (ii) by striking ``and'' at the end;
                    (B) in paragraph (4), by striking ``and ranchers.'' 
                and inserting `` or ranchers or socially disadvantaged 
                farmers or ranchers; and''; and
                    (C) by adding at the end the following:
            ``(5) establish annual performance goals to promote the use 
        of the down payment loan program and other joint financing 
        arrangements as the preferred choice for direct real estate 
        loans made by any lender to a qualified beginning farmer or 
        rancher or socially disadvantaged farmer or rancher.''; and
            (5) by adding at the end the following:

    ``(e) Socially Disadvantaged Farmer or Rancher Defined.--In this 
section, the term `socially disadvantaged farmer or rancher' has the 
meaning given that term in section 355(e)(2).''.

[[Page 122 STAT. 1145]]

SEC. 5005. BEGINNING FARMER OR RANCHER AND SOCIALLY DISADVANTAGED 
                          FARMER OR RANCHER CONTRACT LAND SALES 
                          PROGRAM.

    Section 310F of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1936) is amended to read as follows:
``SEC. 310F. BEGINNING FARMER OR RANCHER AND SOCIALLY 
                          DISADVANTAGED FARMER OR RANCHER CONTRACT 
                          LAND SALES PROGRAM.

    ``(a) In General.--The Secretary shall, in accordance with this 
section, guarantee a loan made by a private seller of a farm or ranch to 
a qualified beginning farmer or rancher or socially disadvantaged farmer 
or rancher (as defined in section 355(e)(2)) on a contract land sales 
basis.
    ``(b) Eligibility.--In order to be eligible for a loan guarantee 
under subsection (a)--
            ``(1) the qualified beginning farmer or rancher or socially 
        disadvantaged farmer or rancher shall--
                    ``(A) on the date the contract land sale that is 
                subject of the loan is complete, own and operate the 
                farm or ranch that is the subject of the contract land 
                sale;
                    ``(B) have a credit history that--
                          ``(i) includes a record of satisfactory debt 
                      repayment, as determined by the Secretary; and
                          ``(ii) is acceptable to the Secretary; and
                    ``(C) demonstrate to the Secretary that the farmer 
                or rancher, as the case may be, is unable to obtain 
                sufficient credit without a guarantee to finance any 
                actual need of the farmer or rancher, as the case may 
                be, at a reasonable rate or term; and
            ``(2) the loan shall meet applicable underwriting criteria, 
        as determined by the Secretary.

    ``(c) Limitations.--
            ``(1) Down payment.--The Secretary shall not provide a loan 
        guarantee under subsection (a) if the contribution of the 
        qualified beginning farmer or rancher or socially disadvantaged 
        farmer or rancher to the down payment for the farm or ranch that 
        is the subject of the contract land sale would be less than 5 
        percent of the purchase price of the farm or ranch.
            ``(2) Maximum purchase price.--The Secretary shall not 
        provide a loan guarantee under subsection (a) if the purchase 
        price or the appraisal value of the farm or ranch that is the 
        subject of the contract land sale is greater than $500,000.

    ``(d) Period of Guarantee.--The period during which a loan guarantee 
under this section is in effect shall be the 10-year period beginning 
with the date the guarantee is provided.
    ``(e) Guarantee Plan.--
            ``(1) Selection of plan.--A private seller of a farm or 
        ranch who makes a loan that is guaranteed by the Secretary under 
        subsection (a) may select--
                    ``(A) a prompt payment guarantee plan, which shall 
                cover--
                          ``(i) 3 amortized annual installments; or
                          ``(ii) an amount equal to 3 annual 
                      installments (including an amount equal to the 
                      total cost of any tax and insurance incurred 
                      during the period covered by the annual 
                      installments); or

[[Page 122 STAT. 1146]]

                    ``(B) a standard guarantee plan, which shall cover 
                an amount equal to 90 percent of the outstanding 
                principal of the loan.
            ``(2) Eligiblity for standard guarantee plan.--In order for 
        a private seller to be eligible for a standard guarantee plan 
        referred to in paragraph (1)(B), the private seller shall--
                    ``(A) secure a commercial lending institution or 
                similar entity, as determined by the Secretary, to serve 
                as an escrow agent; or
                    ``(B) in cooperation with the farmer or rancher, use 
                an appropriate alternate arrangement, as determined by 
                the Secretary.

    ``(f) Transition From Pilot Program.--
            ``(1) In general.--The Secretary may phase-in the 
        implementation of the changes to the Beginning Farmer and 
        Rancher and Socially Disadvantaged Farmer or Rancher Contract 
        Land Sales Program provided for in this section.
            ``(2) Limitation.--All changes to the Beginning Farmer and 
        Rancher and Socially Disadvantaged Farmer or Rancher Contract 
        Land Sales Program must be implemented for the 2011 Fiscal 
        Year.''.

                       Subtitle B--Operating Loans

SEC. 5101. FARMING EXPERIENCE AS ELIGIBILITY REQUIREMENT.

    Section 311 of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1941) is amended--
            (1) by striking the section designation and all that follows 
        through ``(a) The Secretary is authorized to'' and inserting the 
        following:
``SEC. 311. PERSONS ELIGIBLE FOR LOANS.

    ``(a) In General.--The Secretary may'';
            (2) in subsection (a)(2), by inserting ``, taking into 
        consideration all farming experience of the applicant, without 
        regard to any lapse between farming experiences'' after 
        ``farming operations''.
SEC. 5102. LIMITATIONS ON AMOUNT OF OPERATING LOANS.

    Section 313(a)(1) of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 1943(a)(1)) is amended by striking ``$200,000'' and inserting 
``$300,000''.
SEC. 5103. SUSPENSION OF LIMITATION ON PERIOD FOR WHICH BORROWERS 
                          ARE ELIGIBLE FOR GUARANTEED ASSISTANCE.

    Section 5102 of the Farm Security And Rural Investment Act of 2002 
(7 U.S.C. 1949 note; Public Law 107-171) is amended by striking 
``September 30, 2007'' and inserting ``December 31, 2010''.

                       Subtitle C--Emergency Loans

SEC. 5201. ELIGIBILITY OF EQUINE FARMERS AND RANCHERS FOR 
                          EMERGENCY LOANS.

    Section 321(a) of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1961(a)) is amended--

[[Page 122 STAT. 1147]]

            (1) in paragraph (1), by striking ``farmers, ranchers'' and 
        inserting ``farmers or ranchers (including equine farmers or 
        ranchers)''; and
            (2) in paragraph (2)(A), by striking ``farming, ranching,'' 
        and inserting ``farming or ranching (including equine farming or 
        ranching)''.

                  Subtitle D--Administrative Provisions

SEC. 5301. BEGINNING FARMER AND RANCHER INDIVIDUAL DEVELOPMENT 
                          ACCOUNTS PILOT PROGRAM.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1981-2008r) is amended by inserting after section 333A the 
following:
``SEC. 333B. <<NOTE: 7 USC 1983b.>>  BEGINNING FARMER AND RANCHER 
                          INDIVIDUAL DEVELOPMENT ACCOUNTS PILOT 
                          PROGRAM.

    ``(a) Definitions.--In this section:
            ``(1) Demonstration program.--The term `demonstration 
        program' means a demonstration program carried out by a 
        qualified entity under the pilot program established in 
        subsection (b)(1).
            ``(2) Eligible participant.--The term `eligible participant' 
        means a qualified beginning farmer or rancher that--
                    ``(A) lacks significant financial resources or 
                assets; and
                    ``(B) has an income that is less than--
                          ``(i) 80 percent of the median income of the 
                      State in which the farmer or rancher resides; or
                          ``(ii) 200 percent of the most recent annual 
                      Federal Poverty Income Guidelines published by the 
                      Department of Health and Human Services for the 
                      State.
            ``(3) Individual development account.--The term `individual 
        development account' means a savings account described in 
        subsection (b)(4)(A).
            ``(4) Qualified entity.--
                    ``(A) In general.--The term `qualified entity' 
                means--
                          ``(i) 1 or more organizations--
                                    ``(I) described in section 501(c)(3) 
                                of the Internal Revenue Code of 1986; 
                                and
                                    ``(II) exempt from taxation under 
                                section 501(a) of such Code; or
                          ``(ii) a State, local, or tribal government 
                      submitting an application jointly with an 
                      organization described in clause (i).
                    ``(B) No prohibition on collaboration.--An 
                organization described in subparagraph (A)(i) may 
                collaborate with a financial institution or for-profit 
                community development corporation to carry out the 
                purposes of this section.

    ``(b) Pilot Program.--
            ``(1) In general.--The Secretary shall establish a pilot 
        program to be known as the `New Farmer Individual Development 
        Accounts Pilot Program' under which the Secretary shall work 
        through qualified entities to establish demonstration programs--
                    ``(A) of at least 5 years in duration; and

[[Page 122 STAT. 1148]]

                    ``(B) in at least 15 States.
            ``(2) Coordination.--The Secretary shall operate the pilot 
        program through, and in coordination with the farm loan programs 
        of, the Farm Service Agency.
            ``(3) Reserve funds.--
                    ``(A) In general.--A qualified entity carrying out a 
                demonstration program under this section shall establish 
                a reserve fund consisting of a non-Federal match of 50 
                percent of the total amount of the grant awarded to the 
                demonstration program under this section.
                    ``(B) Federal funds.--After the qualified entity has 
                deposited the non-Federal matching funds described in 
                subparagraph (A) in the reserve fund, the Secretary 
                shall provide the total amount of the grant awarded 
                under this section to the demonstration program for 
                deposit in the reserve fund.
                    ``(C) Use of funds.--Of the funds deposited under 
                subparagraph (B) in the reserve fund established for a 
                demonstration program, the qualified entity carrying out 
                the demonstration program--
                          ``(i) may use up to 10 percent for 
                      administrative expenses; and
                          ``(ii) shall use the remainder in making 
                      matching awards described in paragraph 
                      (4)(B)(ii)(I).
                    ``(D) Interest.--Any interest earned on amounts in a 
                reserve fund established under subparagraph (A) may be 
                used by the qualified entity as additional matching 
                funds for, or to administer, the demonstration program.
                    ``(E) Guidance.--The Secretary shall issue guidance 
                regarding the investment requirements of reserve funds 
                established under this paragraph.
                    ``(F) Reversion.--On the date on which all funds 
                remaining in any individual development account 
                established by a qualified entity have reverted under 
                paragraph (5)(B)(ii) to the reserve fund established by 
                the qualified entity, there shall revert to the Treasury 
                of the United States a percentage of the amount (if any) 
                in the reserve fund equal to--
                          ``(i) the amount of Federal funds deposited in 
                      the reserve fund under subparagraph (B) that were 
                      not used for administrative expenses; divided by
                          ``(ii) the total amount of funds deposited in 
                      the reserve fund.
            ``(4) Individual development accounts.--
                    ``(A) In general.--A qualified entity receiving a 
                grant under this section shall establish and administer 
                individual development accounts for eligible 
                participants.
                    ``(B) Contract requirements.--To be eligible to 
                receive funds under this section from a qualified 
                entity, an eligible participant shall enter into a 
                contract with only 1 qualified entity under which--
                          ``(i) the eligible participant agrees--
                                    ``(I) to deposit a certain amount of 
                                funds of the eligible participant in a 
                                personal savings account, as prescribed 
                                by the contractual agreement between the 
                                eligible participant and the qualified 
                                entity;

[[Page 122 STAT. 1149]]

                                    ``(II) to use the funds described in 
                                subclause (I) only for 1 or more 
                                eligible expenditures described in 
                                paragraph (5)(A); and
                                    ``(III) to complete financial 
                                training; and
                          ``(ii) the qualified entity agrees--
                                    ``(I) to deposit, not later than 1 
                                month after an amount is deposited 
                                pursuant to clause (i)(I), at least a 
                                100-percent, and up to a 200-percent, 
                                match of that amount into the individual 
                                development account established for the 
                                eligible participant; and
                                    ``(II) with uses of funds proposed 
                                by the eligible participant.
                    ``(C) Limitation.--
                          ``(i) In general.--A qualified entity 
                      administering a demonstration program under this 
                      section may provide not more than $6,000 for each 
                      fiscal year in matching funds to the individual 
                      development account established by the qualified 
                      entity for an eligible participant.
                          ``(ii) Treatment of amount.--An amount 
                      provided under clause (i) shall not be considered 
                      to be a gift or loan for mortgage purposes.
            ``(5) Eligible expenditures.--
                    ``(A) In general.--An eligible expenditure described 
                in this subparagraph is an expenditure--
                          ``(i) to purchase farmland or make a down 
                      payment on an accepted purchase offer for 
                      farmland;
                          ``(ii) to make mortgage payments on farmland 
                      purchased pursuant to clause (i), for up to 180 
                      days after the date of the purchase;
                          ``(iii) to purchase breeding stock, fruit or 
                      nut trees, or trees to harvest for timber; and
                          ``(iv) for other similar expenditures, as 
                      determined by the Secretary.
                    ``(B) Timing.--
                          ``(i) In general.--An eligible participant may 
                      make an eligible expenditure at any time during 
                      the 2-year period beginning on the date on which 
                      the last matching funds are provided under 
                      paragraph (4)(B)(ii)(I) to the individual 
                      development account established for the eligible 
                      participant.
                          ``(ii) Unexpended funds.--At the end of the 
                      period described in clause (i), any funds 
                      remaining in an individual development account 
                      established for an eligible participant shall 
                      revert to the reserve fund of the demonstration 
                      program under which the account was established.

    ``(c) Applications.--
            ``(1) In general.--A qualified entity that seeks to carry 
        out a demonstration program under this section may submit to the 
        Secretary an application at such time, in such form, and 
        containing such information as the Secretary may prescribe.
            ``(2) Criteria.--In considering whether to approve an 
        application to carry out a demonstration program under this 
        section, the Secretary shall assess--

[[Page 122 STAT. 1150]]

                    ``(A) the degree to which the demonstration program 
                described in the application is likely to aid eligible 
                participants in successfully pursuing new farming 
                opportunities;
                    ``(B) the experience and ability of the qualified 
                entity to responsibly administer the demonstration 
                program;
                    ``(C) the experience and ability of the qualified 
                entity in recruiting, educating, and assisting eligible 
                participants to increase economic independence and 
                pursue or advance farming opportunities;
                    ``(D) the aggregate amount of direct funds from non-
                Federal public sector and private sources that are 
                formally committed to the demonstration program as 
                matching contributions;
                    ``(E) the adequacy of the plan of the qualified 
                entity to provide information relevant to an evaluation 
                of the demonstration program; and
                    ``(F) such other factors as the Secretary considers 
                to be appropriate.
            ``(3) Preferences.--In considering an application to conduct 
        a demonstration program under this section, the Secretary shall 
        give preference to an application from a qualified entity that 
        demonstrates--
                    ``(A) a track record of serving clients targeted by 
                the program, including, as appropriate, socially 
                disadvantaged farmers or ranchers (as defined in section 
                355(e)(2)); and
                    ``(B) expertise in dealing with financial management 
                aspects of farming.
            ``(4) Approval.--Not <<NOTE: Deadline.>>  later than 1 year 
        after the date of enactment of this section, in accordance with 
        this section, the Secretary shall, on a competitive basis, 
        approve such applications to conduct demonstration programs as 
        the Secretary considers appropriate.
            ``(5) Term of authority.--If the Secretary approves an 
        application to carry out a demonstration program, the Secretary 
        shall authorize the applicant to carry out the project for a 
        period of 5 years, plus an additional 2 years to make eligible 
        expenditures in accordance with subsection (b)(5)(B).

    ``(d) Grant Authority.--
            ``(1) In general.--The Secretary shall make a grant to a 
        qualified entity authorized to carry out a demonstration program 
        under this section.
            ``(2) Maximum amount of grants.--The aggregate amount of 
        grant funds provided to a demonstration program carried out 
        under this section shall not exceed $250,000.
            ``(3) Timing of grant payments.--The Secretary shall pay the 
        amounts awarded under a grant made under this section--
                    ``(A) on the awarding of the grant; or
                    ``(B) pursuant to such payment plan as the qualified 
                entity may specify.

    ``(e) Reports.--
            ``(1) Annual progress reports.--
                    ``(A) In general.--Not later than 60 days after the 
                end of the calendar year in which the Secretary 
                authorizes a qualified entity to carry out a 
                demonstration program under this section, and annually 
                thereafter until the conclusion of the demonstration 
                program, the qualified entity

[[Page 122 STAT. 1151]]

                shall prepare an annual report that includes, for the 
                period covered by the report--
                          ``(i) an evaluation of the progress of the 
                      demonstration program;
                          ``(ii) information about the demonstration 
                      program, including the eligible participants and 
                      the individual development accounts that have been 
                      established; and
                          ``(iii) such other information as the 
                      Secretary may require.
                    ``(B) Submission of reports.--A qualified entity 
                shall submit each report required under subparagraph (A) 
                to the Secretary.
            ``(2) Reports by the secretary.--Not later than 1 year after 
        the date on which all demonstration programs under this section 
        are concluded, the Secretary shall submit to Congress a final 
        report that describes the results and findings of all reports 
        and evaluations carried out under this section.

    ``(f) Annual Review.--The Secretary may conduct an annual review of 
the financial records of a qualified entity--
            ``(1) to assess the financial soundness of the qualified 
        entity; and
            ``(2) to determine the use of grant funds made available to 
        the qualified entity under this section.

    ``(g) Regulations.--In carrying out this section, the Secretary may 
promulgate regulations to ensure that the program includes provisions 
for--
            ``(1) the termination of demonstration programs;
            ``(2) control of the reserve funds in the case of such a 
        termination;
            ``(3) transfer of demonstration programs to other qualified 
        entities; and
            ``(4) remissions from a reserve fund to the Secretary in a 
        case in which a demonstration program is terminated without 
        transfer to a new qualified entity.

    ``(h) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $5,000,000 for each of fiscal 
years 2008 through 2012.''.
SEC. 5302. INVENTORY SALES PREFERENCES; LOAN FUND SET-ASIDES.

    (a) Inventory Sales Preferences.--Section 335(c) of the Consolidated 
Farm and Rural Development Act (7 U.S.C. 1985(c)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (B)--
                          (i) in the subparagraph heading, by inserting 
                      ``; socially disadvantaged farmer or rancher'' 
                      after ``or rancher'';
                          (ii) in clause (i), by inserting `` or a 
                      socially disadvantaged farmer or rancher'' after 
                      ``or rancher'';
                          (iii) in clause (ii), by inserting ``or 
                      socially disadvantaged farmer or rancher'' after 
                      ``or rancher'';
                          (iv) in clause (iii), by inserting ``or a 
                      socially disadvantaged farmer or rancher'' after 
                      ``or rancher''; and
                          (v) in clause (iv), by striking ``and 
                      ranchers'' and inserting ``or ranchers and 
                      socially disadvantaged farmers or ranchers''; and

[[Page 122 STAT. 1152]]

                    (B) in subparagraph (C), by inserting ``or a 
                socially disadvantaged farmer or rancher'' after ``or 
                rancher'';
            (2) in paragraph (5)(B)--
                    (A) in clause (i)--
                          (i) in the clause heading, by inserting ``; 
                      socially disadvantaged farmer or rancher'' after 
                      ``or rancher'';
                          (ii) by inserting ``or a socially 
                      disadvantaged farmer or rancher'' after ``a 
                      beginning farmer or rancher''; and
                          (iii) by inserting ``or the socially 
                      disadvantaged farmer or rancher'' after ``the 
                      beginning farmer or rancher''; and
                    (B) in clause (ii)--
                          (i) in the matter preceding subclause (I), by 
                      inserting ``or a socially disadvantaged farmer or 
                      rancher'' after ``or rancher''; and
                          (ii) in subclause (II), by inserting ``or the 
                      socially disadvantaged farmer or rancher'' after 
                      ``or rancher''; and
            (3) in paragraph (6)--
                    (A) in subparagraph (A), by inserting ``or a 
                socially disadvantaged farmer or rancher'' after ``or 
                rancher''; and
                    (B) in subparagraph (C)--
                          (i) in clause (i)(I), by striking ``and 
                      ranchers'' and inserting ``or ranchers and 
                      socially disadvantaged farmers or ranchers''; and
                          (ii) in clause (ii), by inserting ``or 
                      socially disadvantaged farmers or ranchers'' after 
                      ``or ranchers''.

    (b) Loan Fund Set-Asides.--Section 346(b)(2) of such Act (7 U.S.C. 
1994(b)(2)) is amended--
            (1) in subparagraph (A)--
                    (A) in clause (i)--
                          (i) in subclause (I), by striking ``70 
                      percent'' and inserting ``an amount that is not 
                      less than 75 percent of the total amount''; and
                          (ii) in subclause (II)--
                                    (I) in the subclause heading, by 
                                inserting ``; joint financing 
                                arrangements'' after ``payment loans'';
                                    (II) by striking ``60 percent'' and 
                                inserting ``an amount not less than \2/
                                3\ of the amount''; and
                                    (III) by inserting ``and joint 
                                financing arrangements under section 
                                307(a)(3)(D)'' after ``section 310E''; 
                                and
                    (B) in clause (ii)(III), by striking ``2003 through 
                2007, 35 percent'' and inserting ``2008 through 2012, an 
                amount that is not less than 50 percent of the total 
                amount''; and
            (2) in subparagraph (B)(i), by striking ``25 percent'' and 
        inserting ``an amount that is not less than 40 percent of the 
        total amount''.
SEC. 5303. LOAN AUTHORIZATION LEVELS.

    Section 346(b)(1) of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 1994(b)(1)) is amended--
            (1) in the matter preceding subparagraph (A), by striking 
        ``$3,796,000,000 for each of fiscal years 2003 through 2007''

[[Page 122 STAT. 1153]]

        and inserting ``$4,226,000,000 for each of fiscal years 2008 
        through 2012''; and
            (2) in subparagraph (A)--
                    (A) in the matter preceding clause (i), by striking 
                ``$770,000,000'' and inserting ``$1,200,000,000'';
                    (B) in clause (i), by striking ``$205,000,000'' and 
                inserting ``$350,000,000''; and
                    (C) in clause (ii), by striking ``$565,000,000'' and 
                inserting ``$850,000,000''.
SEC. 5304. TRANSITION TO PRIVATE COMMERCIAL OR OTHER SOURCES OF 
                          CREDIT.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1981-2008r) is amended by inserting after section 344 the 
following:
``SEC. 345. <<NOTE: 7 USC 1993.>>  TRANSITION TO PRIVATE 
                        COMMERCIAL OR OTHER SOURCES OF CREDIT.

    ``(a) In General.--In <<NOTE: Plan. Regulations. Criteria.>>  making 
or insuring a farm loan under subtitle A or B, the Secretary shall 
establish a plan and promulgate regulations (including performance 
criteria) that promote the goal of transitioning borrowers to private 
commercial credit and other sources of credit in the shortest period of 
time practicable.

    ``(b) Coordination.--In carrying out this section, the Secretary 
shall integrate and coordinate the transition policy described in 
subsection (a) with--
            ``(1) the borrower training program established by section 
        359;
            ``(2) the loan assessment process established by section 
        360;
            ``(3) the supervised credit requirement established by 
        section 361;
            ``(4) the market placement program established by section 
        362; and
            ``(5) other appropriate programs and authorities, as 
        determined by the Secretary.''.
SEC. 5305. EXTENSION OF THE RIGHT OF FIRST REFUSAL TO REACQUIRE 
                          HOMESTEAD PROPERTY TO IMMEDIATE FAMILY 
                          MEMBERS OF BORROWER-OWNER.

    Section 352(c)(4)(B) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 2000(c)(4)(B)) is amended--
            (1) in the 1st sentence, by striking ``, the borrower-
        owner'' inserting ``of a borrower-owner who is a socially 
        disadvantaged farmer or rancher (as defined in section 
        355(e)(2)), the borrower-owner or a member of the immediate 
        family of the borrower-owner''; and
            (2) in the 2nd sentence, by inserting ``or immediate family 
        member, as the case may be,'' before ``from''.
SEC. 5306. RURAL DEVELOPMENT AND FARM LOAN PROGRAM ACTIVITIES.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1981-2008r) is amended by inserting after section 364 the 
following:

[[Page 122 STAT. 1154]]

``SEC. 365. <<NOTE: 7 USC 2008.>>  RURAL DEVELOPMENT AND FARM LOAN 
                        PROGRAM ACTIVITIES.

    ``The Secretary may not complete a study of, or enter into a 
contract with a private party to carry out, without specific 
authorization in a subsequent Act of Congress, a competitive sourcing 
activity of the Secretary, including support personnel of the Department 
of Agriculture, relating to rural development or farm loan programs.''.

                         Subtitle E--Farm Credit

SEC. 5401. FARM CREDIT SYSTEM INSURANCE CORPORATION.

    (a) In General.--Section 1.12(b) of the Farm Credit Act of 1971 (12 
U.S.C. 2020(b)) is amended--
            (1) in the first sentence, by striking ``Each Farm'' and 
        inserting the following;
            ``(1) In general.--Each Farm''; and
            (2) by striking the second sentence and inserting the 
        following:
            ``(2) Computation.--The assessment on any association or 
        other financing institution described in paragraph (1) for any 
        period shall be computed in an equitable manner, as determined 
        by the Corporation.''.

    (b) Rules and Regulations.--Section 5.58(10) of such Act (12 U.S.C. 
2277a-7(10)) is amended by inserting ``and section 1.12(b)'' after 
``part''.
SEC. 5402. TECHNICAL CORRECTION.

    Section 3.3(b) of the Farm Credit Act of 1971 (12 U.S.C. 2124(b)) is 
amended in the first sentence by striking ``per'' and inserting ``par''.
SEC. 5403. BANK FOR COOPERATIVES VOTING STOCK.

    (a) In General.--Section 3.3(c) of the Farm Credit Act of 1971 (12 
U.S.C. 2124(c)) is amended by striking ``and (ii)'' and inserting ``(ii) 
other categories of persons and entities described in sections 3.7 and 
3.8 eligible to borrow from the bank, as determined by the bank's board 
of directors; and (iii)''.
    (b) Conforming Amendments.--Section 4.3A(c)(1)(D) of such Act (12 
U.S.C. 2154a(c)(1)(D)) is amended by redesignating clauses (ii) and 
(iii) as clauses (iii) and (iv), respectively, and inserting after 
clause (i) the following:
                          ``(ii) persons and entities eligible to borrow 
                      from the banks for cooperatives, as described in 
                      section 3.3(c)(ii);''.
SEC. 5404. PREMIUMS.

    (a) Amount in Fund Not Exceeding Secure Base Amount.--Section 
5.55(a) of the Farm Credit Act of 1971 (12 U.S.C. 2277a-4(a)) is 
amended--
            (1) in paragraph (1)--
                    (A) in the matter preceding subparagraph (A)--
                          (i) by striking ``paragraph (2)'' and 
                      inserting ``paragraph (3)''; and
                          (ii) by striking ``annual'' ; and
                    (B) by striking subparagraphs (A) through (D) and 
                inserting the following:

[[Page 122 STAT. 1155]]

                    ``(A) the average outstanding insured obligations 
                issued by the bank for the calendar year, after 
                deducting from the obligations the percentages of the 
                guaranteed portions of loans and investments described 
                in paragraph (2), multiplied by 0.0020; and
                    ``(B) the product obtained by multiplying--
                          ``(i) the sum of--
                                    ``(I) the average principal 
                                outstanding for the calendar year on 
                                loans made by the bank that are in 
                                nonaccrual status; and
                                    ``(II) the average amount 
                                outstanding for the calendar year of 
                                other-than-temporarily impaired 
                                investments made by the bank; by
                          ``(ii) 0.0010.'';
            (2) by striking paragraph (4);
            (3) by redesignating paragraphs (2) and (3) as paragraphs 
        (3) and (4), respectively;
            (4) by inserting after paragraph (1) the following:
            ``(2) Deductions from average outstanding insured 
        obligations.--The average outstanding insured obligations issued 
        by the bank for the calendar year referred to in paragraph 
        (1)(A) shall be reduced by deducting from the obligations the 
        sum of (as determined by the Corporation)--
                    ``(A) 90 percent of each of--
                          ``(i) the average principal outstanding for 
                      the calendar year on the guaranteed portions of 
                      Federal government-guaranteed loans made by the 
                      bank that are in accrual status; and
                          ``(ii) the average amount outstanding for the 
                      calendar year of the guaranteed portions of 
                      Federal government-guaranteed investments made by 
                      the bank that are not permanently impaired; and
                    ``(B) 80 percent of each of--
                          ``(i) the average principal outstanding for 
                      the calendar year on the guaranteed portions of 
                      State government-guaranteed loans made by the bank 
                      that are in accrual status; and
                          ``(ii) the average amount outstanding for the 
                      calendar year of the guaranteed portions of State 
                      government-guaranteed investments made by the bank 
                      that are not permanently impaired.'';
            (5) in paragraph (3) (as so redesignated by paragraph (3) of 
        this subsection), by striking ``annual''; and
            (6) in paragraph (4) (as so redesignated by paragraph (3) of 
        this subsection)--
                    (A) in the paragraph heading, by inserting ``or 
                investments'' after ``loans'' ; and
                    (B) in the matter preceding subparagraph (A), by 
                striking ``As used'' and all that follows through 
                ``guaranteed--'' and inserting ``In this section, the 
                term `government-guaranteed', when applied to a loan or 
                an investment, means a loan, credit, or investment, or 
                portion of a loan, credit, or investment, that is 
                guaranteed--''.

    (b) Amount in Fund Exceeding Secure Base Amount.--Section 5.55(b) of 
such Act (12 U.S.C. 2277a-4(b)) is amended by striking ``annual''.

[[Page 122 STAT. 1156]]

    (c) Secure Base Amount.--Section 5.55(c) of such Act (12 U.S.C. 
2277a-4(c)) is amended--
            (1) by striking ``For purposes'' and inserting the 
        following:
            ``(1) In general.--For purposes'';
            (2) by striking ``(adjusted downward'' and all that follows 
        through ``by the Corporation)'' and inserting ``(as adjusted 
        under paragraph (2))''; and
            (3) by adding at the end the following:
            ``(2) Adjustment.--The aggregate outstanding insured 
        obligations of all insured System banks under paragraph (1) 
        shall be adjusted downward to exclude an amount equal to the sum 
        of (as determined by the corporation)--
                    ``(A) 90 percent of each of--
                          ``(i) the guaranteed portions of principal 
                      outstanding on Federal government-guaranteed loans 
                      in accrual status made by the banks; and
                          ``(ii) the guaranteed portions of the amount 
                      of Federal government-guaranteed investments made 
                      by the banks that are not permanently impaired; 
                      and
                    ``(B) 80 percent of each of--
                          ``(i) the guaranteed portions of principal 
                      outstanding on State government-guaranteed loans 
                      in accrual status made by the banks; and
                          ``(ii) the guaranteed portions of the amount 
                      of State government-guaranteed investments made by 
                      the banks that are not permanently impaired.''.

    (d) Determination of Loan and Investment Amounts.--Section 5.55(d) 
of such Act (12 U.S.C. 2277a-4(d)) is amended--
            (1) in the subsection heading, by striking ``Principal 
        Outstanding'' and inserting ``Loan and Investment Amounts'';
            (2) in the matter preceding paragraph (1), by striking ``For 
        the purpose'' and all that follows through ``made--'' and 
        inserting ``For the purpose of subsections (a) and (c), the 
        principal outstanding on all loans made by an insured System 
        bank, and the amount outstanding on all investments made by an 
        insured System bank, shall be determined based on--'';
            (3) in each of paragraphs (1), (2), and (3), by inserting 
        ``all loans or investments made'' before ``by'' the first place 
        it appears; and
            (4) in each of paragraphs (1) and (2), by inserting ``or 
        investments'' after ``that is able to make such loans'' each 
        place it appears.

    (e) Allocation to System Institutions of Excess Reserves.--Section 
5.55(e) of such Act (12 U.S.C. 2277a-4(e)) is amended--
            (1) in paragraph (3), by striking ``the average secure base 
        amount for the calendar year (as calculated on an average daily 
        balance basis)'' and inserting ``the secure base amount'';
            (2) in paragraph (4), by striking subparagraph (B) and 
        inserting the following:
                    ``(B) there shall be credited to the allocated 
                insurance reserves account of each insured system bank 
                an amount that bears the same ratio to the total amount 
                (less any amount credited under subparagraph (A)) as--
                          ``(i) the average principal outstanding for 
                      the calendar year on insured obligations issued by 
                      the bank

[[Page 122 STAT. 1157]]

                      (after deducting from the principal the 
                      percentages of the guaranteed portions of loans 
                      and investments described in subsection (a)(2)); 
                      bears to
                          ``(ii) the average principal outstanding for 
                      the calendar year on insured obligations issued by 
                      all insured System banks (after deducting from the 
                      principal the percentages of the guaranteed 
                      portions of loans and investments described in 
                      subsection (a)(2)).''; and
            (3) in paragraph (6)--
                    (A) in subparagraph (A)--
                          (i) in the matter preceding clause (i), by 
                      striking ``beginning more'' and all that follows 
                      through ``January 1, 2005'';
                          (ii) by striking clause (i) and inserting the 
                      following:
                          ``(i) subject to subparagraph (D), pay to each 
                      insured System bank, in a manner determined by the 
                      Corporation, an amount equal to the balance in the 
                      Allocated Insurance Reserves Account of the System 
                      bank; and''; and
                          (iii) in clause (ii)--
                                    (I) by striking ``subparagraphs (C), 
                                (E), and (F)'' and inserting 
                                ``subparagraphs (C) and (E)''; and
                                    (II) by striking ``, of the lesser 
                                of--'' and all that follows through the 
                                end of subclause (II) and inserting ``at 
                                the time of the termination of the 
                                Financial Assistance Corporation, of the 
                                balance in the Allocated Insurance 
                                Reserves Account established under 
                                paragraph (1)(B).'';
                    (B) in subparagraph (C)--
                          (i) in clause (i), by striking ``(in addition 
                      to the amounts described in subparagraph 
                      (F)(ii))''; and
                          (ii) by striking clause (ii) and inserting the 
                      following:
                          ``(ii) Termination of account.--On 
                      disbursement of an amount equal to $56,000,000, 
                      the Corporation shall--
                                    ``(I) close the account established 
                                under paragraph (1)(B); and
                                    ``(II) transfer any remaining funds 
                                in the Account to the remaining 
                                Allocated Insurance Reserves Accounts in 
                                accordance with paragraph (4)(B) for the 
                                calendar year in which the transfer 
                                occurs.''; and
                    (C) by striking subparagraph (F).
SEC. 5405. CERTIFICATION OF PREMIUMS.

    (a) Filing Certified Statement.--Section 5.56 of the Farm Credit Act 
of 1971 (12 U.S.C. 2277a-5) is amended by striking subsection (a) and 
inserting the following:
    ``(a) Filing Certified Statement.--On a date to be determined in the 
sole discretion of the Board of Directors of the Corporation, each 
insured System bank that became insured before the beginning of the 
period for which premiums are being assessed (referred to in this 
section as the `period') shall file with the Corporation a certified 
statement showing--

[[Page 122 STAT. 1158]]

            ``(1) the average outstanding insured obligations for the 
        period issued by the bank;
            ``(2)(A) the average principal outstanding for the period on 
        the guaranteed portion of Federal government-guaranteed loans 
        that are in accrual status; and
            ``(B) the average amount outstanding for the period of 
        Federal government-guaranteed investments that are not 
        permanently impaired (as defined in section 5.55(a)(4));
            ``(3)(A) the average principal outstanding for the period on 
        State government-guaranteed loans that are in accrual status; 
        and
            ``(B) the average amount outstanding for the period of State 
        government-guaranteed investments that are not permanently 
        impaired (as defined in section 5.55(a)(4));
            ``(4)(A) the average principal outstanding for the period on 
        loans that are in nonaccrual status; and
            ``(B) the average amount outstanding for the period of 
        other-than-temporarily impaired investments; and
            ``(5) the amount of the premium due the Corporation from the 
        bank for the period.''.

    (b) Premium Payments.--Section 5.56 of such Act (12 U.S.C. 2277a-5) 
is amended by striking subsection (c) and inserting the following:
    ``(c) Premium Payments.--
            ``(1) In general.--Except as provided in paragraph (2), each 
        insured System bank shall pay to the Corporation the premium 
        payments required under subsection (a), not more frequently than 
        once in each calendar quarter, in such manner and at such 1 or 
        more times as the Board of Directors shall prescribe.
            ``(2) Premium amount.--The <<NOTE: Deadline.>>  amount of 
        the premium shall be established not later than 60 days after 
        filing the certified statement specifying the amount of the 
        premium.''.

    (c) Subsequent Premium Payments.--Section 5.56 of such Act (12 
U.S.C. 2277a-5) is amended--
            (1) by striking subsection (d); and
            (2) by redesignating subsection (e) as subsection (d).
SEC. 5406. RURAL UTILITY LOANS.

    (a) Definition of Qualified Loan.--Section 8.0(9) of the Farm Credit 
Act of 1971 (12 U.S.C. 2279aa(9)) is amended--
            (1) in subparagraph (A)(iii), by striking ``or'' at the end;
            (2) in subparagraph (B)(ii), by striking the period at the 
        end and inserting ``; or''; and
            (3) by adding at the end the following:
                    ``(C) that is a loan, or an interest in a loan, for 
                an electric or telephone facility by a cooperative 
                lender to a borrower that has received, or is eligible 
                to receive, a loan under the Rural Electrification Act 
                of 1936 (7 U.S.C. 901 et seq.).''.

    (b) Guarantee of Qualified Loans.--Section 8.6(a)(1) of such Act (12 
U.S.C. 2279aa-6(a)(1)) is amended by inserting ``applicable'' before 
``standards'' each place it appears in subparagraphs (A) and (B)(i).
    (c) Standards for Qualified Loans.--Section 8.8 of such Act (12 
U.S.C. 2279aa-8) is amended--
            (1) in subsection (a)--

[[Page 122 STAT. 1159]]

                    (A) by striking the first sentence and inserting the 
                following:
            ``(1) In general.--The Corporation shall establish 
        underwriting, security appraisal, and repayment standards for 
        qualified loans taking into account the nature, risk profile, 
        and other differences between different categories of qualified 
        loans.
            ``(2) Supervision, examination, and report of condition.--
        The standards shall be subject to the authorities of the Farm 
        Credit Administration under section 8.11.''; and
                    (B) in the last sentence, by striking ``In 
                establishing'' and inserting the following:
            ``(3) Mortgage loans.--In establishing'';
            (2) in subsection (b)--
                    (A) in the matter preceding paragraph (1), by 
                inserting ``with respect to loans secured by 
                agricultural real estate'' after ``subsection (a)''; and
                    (B) in paragraph (5)--
                          (i) by striking ``borrower'' the first place 
                      it appears and inserting ``farmer or rancher''; 
                      and
                          (ii) by striking ``site'' and inserting ``farm 
                      or ranch'';
            (3) in subsection (c)(1), by inserting ``secured by 
        agricultural real estate'' after ``A loan'';
            (4) by striking subsection (d); and
            (5) by redesignating subsection (e) as subsection (d).

    (d) Risk-Based Capital Levels.--Section 8.32(a)(1) of such Act (12 
U.S.C. 2279bb-1(a)(1)) is amended--
            (1) by striking ``With respect'' and inserting the 
        following:
                    ``(A) In general.--With respect''; and
            (2) by adding at the end the following:
                    ``(B) Rural utility loans.--With respect to 
                securities representing an interest in, or obligation 
                backed by, a pool of qualified loans described in 
                section 8.0(9)(C) owned or guaranteed by the 
                Corporation, losses occur at a rate of default and 
                severity reasonably related to risks in electric and 
                telephone facility loans (as applicable), as determined 
                by the Director.''.
SEC. 5407. EQUALIZATION OF LOAN-MAKING POWERS OF CERTAIN DISTRICT 
                          ASSOCIATIONS.

    (a) In General.--The Farm Credit Act of 1971 is amended by inserting 
after section 7.6 (12 U.S.C. 2279b) the following:
``SEC. 7.7. <<NOTE: 12 USC 2279c.>>  EQUALIZATION OF LOAN-MAKING 
                        POWERS OF CERTAIN DISTRICT ASSOCIATIONS.

    ``(a) Equalization of Loan-Making Powers.--
            ``(1) In general.--
                    ``(A) Federal land bank associations.--Subject to 
                paragraph (2), any association that owns a Federal land 
                bank association authorized as of January 1, 2007, to 
                make long-term loans under title I in its chartered 
                territory within the geographic area described in 
                subsection (b) may make short- and intermediate-term 
                loans and otherwise operate as a production credit 
                association under title II within that same chartered 
                territory.
                    ``(B) Production credit associations.--Subject to 
                paragraph (2), any association that under its charter 
                has title I lending authority and that owns a production 
                credit association authorized as of January 1, 2007, to 
                make

[[Page 122 STAT. 1160]]

                short- and intermediate-term loans under title II in the 
                geographic area described in subsection (b) may make 
                long-term loans and otherwise operate, directly or 
                through a subsidiary association, as a Federal land bank 
                association or Federal land credit association under 
                title I in the geographic area.
                    ``(C) Farm credit bank.--Notwithstanding section 
                5.17(a), the Farm Credit Bank with which any association 
                had a written financing agreement as of January 1, 2007, 
                may make loans and extend other comparable financial 
                assistance with respect to, and may purchase, any loans 
                made under the new authority provided under subparagraph 
                (A) or (B) by an association exercising such authority.
            ``(2) Required approvals.--An association may exercise the 
        additional authority provided for in paragraph (1) only after 
        the exercise of the authority is approved by--
                    ``(A) the board of directors of the association; and
                    ``(B) a majority of the voting stockholders of the 
                association (or, if the association is a subsidiary of 
                another association, the voting stockholders of the 
                parent association) voting, in person or by proxy, at a 
                duly authorized meeting of stockholders in accordance 
                with the process described in section 7.11.

    ``(b) Applicability.--This section applies only to associations the 
chartered territory of which was within the geographic area served by 
the Federal intermediate credit bank immediately prior to its merger 
with a Farm Credit Bank under section 410(e)(1) of the Agricultural 
Credit Act of 1987 (12 U.S.C. 2011 note; Public Law 100-233).''.
    (b) Charter Amendments.--Section 5.17(a) of the Farm Credit Act of 
1971 (12 U.S.C. 2252(a)) is amended by adding at the end the following:
            ``(15)(A) Approve amendments to the charters of institutions 
        of the Farm Credit System to implement the equalization of loan-
        making powers of a Farm Credit System association under section 
        7.7.
            ``(B) Amendments described in subparagraph (A) to the 
        charters of an association and the related Farm Credit Bank 
        shall be approved by the Farm Credit Administration, subject to 
        any conditions of approval imposed, by not later than 30 days 
        after the date on which the Farm Credit Administration receives 
        all approvals required by section 7.7(a)(2).''.

    (c) Conforming Amendments.--
            (1) Section 5.17(a)(2) of the Farm Credit Act of 1971 (12 
        U.S.C. 2252(a)(2)) is amended--
                    (A) by striking ``(2)(A)'' and inserting ``(2)''; 
                and
                    (B) by striking subparagraphs (B) and (C).
            (2) Section 410 of the 1987 act.--Section 410(e)(1)(A)(iii) 
        of the Agricultural Credit Act of 1987 (12 U.S.C. 2011 note; 
        Public Law 100-233) is amended by inserting ``(except section 
        7.7 of that Act)'' after ``(12 U.S.C. 2001 et seq.)''.
            (3) Section 401 of the 1992 act.--Section 401(b) of the Farm 
        Credit Banks and Associations Safety and Soundness Act of 1992 
        (12 U.S.C. 2011 note; Public Law 102-552) is amended--
                    (A) by inserting ``(except section 7.7 of the Farm 
                Credit Act of 1971)'' after ``provision of law''; and

[[Page 122 STAT. 1161]]

                    (B) by striking ``, subject to such limitations'' 
                and all that follows through the end of the paragraph 
                and inserting a period.

    (d) <<NOTE: 12 USC 2252 note.>>  Effective Date.--The amendments 
made by this section take effect on January 1, 2010.

                        Subtitle F--Miscellaneous

SEC. 5501. LOANS TO PURCHASERS OF HIGHLY FRACTIONED LAND.

    The first section of Public Law 91-229 (25 U.S.C. 488) is amended--
            (1) by striking ``That the Secretary'' and inserting the 
        following:
``SECTION 1. LOANS TO PURCHASERS OF HIGHLY FRACTIONED LAND.

    ``(a) In General.--The Secretary''; and
            (2) by adding at the end the following:

    ``(b) Highly Fractionated Land.--
            ``(1) In general.--Subject to paragraph (2), the Secretary 
        of Agriculture may make and insure loans in accordance with 
        section 309 of the Consolidated Farm and Rural Development Act 
        (7 U.S.C. 1929) to eligible purchasers of highly fractionated 
        land pursuant to section 205(c) of the Indian Land Consolidation 
        Act (25 U.S.C. 2204(c)).
            ``(2) Exclusion.--Section 4 shall not apply to trust land, 
        restricted tribal land, or tribal corporation land that is 
        mortgaged in accordance with paragraph (1).''.

                       TITLE VI--RURAL DEVELOPMENT

         Subtitle A--Consolidated Farm and Rural Development Act

SEC. 6001. WATER, WASTE DISPOSAL, AND WASTEWATER FACILITY GRANTS.

    Section 306(a)(2)(B)(vii) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1926(a)(2)(B)(vii)) is amended by striking 
``2002 through 2007'' and inserting ``2008 through 2012''.
SEC. 6002. SEARCH GRANTS.

    (a) In General.--Section 306(a)(2) of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 1926(a)(2)) is amended by adding at the 
end the following:
                    ``(C) Special evaluation assistance for rural 
                communities and households program.--
                          ``(i) In general.--The Secretary may establish 
                      the Special Evaluation Assistance for Rural 
                      Communities and Households (SEARCH) program, to 
                      make predevelopment planning grants for 
                      feasibility studies, design assistance, and 
                      technical assistance, to financially distressed 
                      communities in rural areas with populations of 
                      2,500 or fewer inhabitants for water and waste 
                      disposal projects described in paragraph (1), this 
                      paragraph, and paragraph (24).
                          ``(ii) Terms.--

[[Page 122 STAT. 1162]]

                                    ``(I) Documentation.--With respect 
                                to grants made under this subparagraph, 
                                the Secretary shall require the lowest 
                                amount of documentation practicable.
                                    ``(II) Matching.--Notwithstanding 
                                any other provisions in this subsection, 
                                the Secretary may fund up to 100 percent 
                                of the eligible costs of grants provided 
                                under this subparagraph, as determined 
                                by the Secretary.
                          ``(iii) Funding.--The Secretary may use not 
                      more than 4 percent of the total amount of funds 
                      made available for a fiscal year for water, waste 
                      disposal, and essential community facility 
                      activities under this title to carry out this 
                      subparagraph.
                          ``(iv) Relationship to other authority.--The 
                      funds and authorities provided under this 
                      subparagraph are in addition to any other funds or 
                      authorities the Secretary may have to carry out 
                      activities described in clause (i).''.

    (b) Conforming Amendment.--Subtitle D of title VI of the Farm 
Security and Rural Investment Act of 2002 <<NOTE: 7 USC 2009ee--2009ee-
3.>>  (7 U.S.C. 2009ee et seq.) is repealed.
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 by striking ``1996 through 
2007'' and inserting ``2008 through 2012''.
SEC. 6004. CHILD DAY CARE FACILITY GRANTS, LOANS, AND LOAN 
                          GUARANTEES.

    Section 306(a)(19)(C)(ii) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1926(a)(19)(C)(ii)) is amended by striking 
``April'' and inserting ``June''.
SEC. 6005. COMMUNITY FACILITY GRANTS TO ADVANCE BROADBAND.

    Section 306(a)(20)(E) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1926(a)(20)(E)) is amended--
            (1) by striking ``state'' and inserting ``State''; and
            (2) by striking ``dial-up Internet access or''.
SEC. 6006. RURAL WATER AND WASTEWATER CIRCUIT RIDER PROGRAM.

    Section 306(a)(22)(C) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1926(a)(22)(C)) is amended by striking ``$15,000,000 for 
fiscal year 2003'' and inserting ``$25,000,000 for fiscal year 2008''.
SEC. 6007. TRIBAL COLLEGE AND UNIVERSITY ESSENTIAL COMMUNITY 
                          FACILITIES.

    Section 306(a)(25) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1926(a)(25)) is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``tribal colleges and universities'' 
                and inserting ``an entity that is a Tribal College or 
                University''; and
                    (B) by striking ``tribal college or university'' and 
                inserting ``Tribal College or University'';

[[Page 122 STAT. 1163]]

            (2) by striking subparagraph (B) and inserting the 
        following:
                    ``(B) Federal share.--The Secretary shall establish 
                the maximum percentage of the cost of the facility that 
                may be covered by a grant under this paragraph, except 
                that the Secretary may not require non-Federal financial 
                support in an amount that is greater than 5 percent of 
                the total cost of the facility.''; and
            (3) in subparagraph (C), by striking ``2003 through 2007'' 
        and inserting ``2008 through 2012''.
SEC. 6008. EMERGENCY AND IMMINENT COMMUNITY WATER ASSISTANCE GRANT 
                          PROGRAM.

    Section 306A(i)(2) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1926a(i)(2)) is amended by striking ``2003 through 2007'' 
and inserting ``2008 through 2012''.
SEC. 6009. WATER SYSTEMS FOR RURAL AND NATIVE VILLAGES IN ALASKA.

    (a) In General.--Section 306D(d)(1) of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 1926d(d)(1)) is amended by striking 
``2001 through 2007'' and inserting ``2008 through 2012''.
    (b) Rural Communities Assistance.--Section 4009 of the Solid Waste 
Disposal Act (42 U.S.C. 6949) is amended by adding at the end the 
following:
    ``(e) Additional Appropriations.--
            ``(1) In general.--There are authorized to be appropriated 
        to carry out this section for the Denali Commission to provide 
        assistance to municipalities in the State of Alaska $1,500,000 
        for each of fiscal years 2008 through 2012.
            ``(2) Administration.--For the purpose of carrying out this 
        subsection, the Denali Commission shall--
                    ``(A) be considered a State; and
                    ``(B) comply with all other requirements and 
                limitations of this section.''.
SEC. 6010. 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.

    Section 306E of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1926e) is amended--
            (1) in subsection (b)(2)(C), by striking ``$8,000'' and 
        inserting ``$11,000''; and
            (2) in subsection (d), by striking ``2003 through 2007'' and 
        inserting ``2008 through 2012''.
SEC. 6011. INTEREST RATES FOR WATER AND WASTE DISPOSAL FACILITIES 
                          LOANS.

    Section 307(a)(3) of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 1927(a)(3)) is amended by adding at the end the following:
                    ``(E) Interest rates for water and waste disposal 
                facilities loans.--
                          ``(i) In general.--Except as provided in 
                      clause (ii) and notwithstanding subparagraph (A), 
                      in the case of a direct loan for a water or waste 
                      disposal facility--

[[Page 122 STAT. 1164]]

                                    ``(I) in the case of a loan that 
                                would be subject to the 5 percent 
                                interest rate limitation under 
                                subparagraph (A), the Secretary shall 
                                establish the interest rate at a rate 
                                that is equal to 60 percent of the 
                                current market yield for outstanding 
                                municipal obligations with remaining 
                                periods to maturity comparable to the 
                                average maturity of the loan, adjusted 
                                to the nearest \1/8\ of 1 percent; and
                                    ``(II) in the case of a loan that 
                                would be subject to the 7 percent 
                                limitation under subparagraph (A), the 
                                Secretary shall establish the interest 
                                rate at a rate that is equal to 80 
                                percent of the current market yield for 
                                outstanding municipal obligations with 
                                remaining periods to maturity comparable 
                                to the average maturity of the loan, 
                                adjusted to the nearest \1/8\ of 1 
                                percent.
                          ``(ii) Exception.--Clause (i) does not apply 
                      to a loan for a specific project that is the 
                      subject of a loan that has been approved, but not 
                      closed, as of the date of enactment of this 
                      subparagraph.''.
SEC. 6012. COOPERATIVE EQUITY SECURITY GUARANTEE.

    (a) In General.--Section 310B of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1932) is amended--
            (1) by striking ``sec. 310B. (a)'' and inserting the 
        following:
``SEC. 310B. ASSISTANCE FOR RURAL ENTITIES.

    ``(a) Loans to Private Business Enterprises.--
            ``(1) Definitions.--In this subsection:'';
            (2) in subsection (a)--
                    (A) by moving the second and fourth sentences so as 
                to appear as the second and first sentences, 
                respectively;
                    (B) in the sentence beginning ``As used in this 
                subsection, the'' (as moved by subparagraph (A)), by 
                striking ``As used in this subsection, the'' and 
                inserting the following:
                    ``(A) Aquaculture.--The'';
                    (C) in the sentence beginning ``For the purposes of 
                this subsection, the'', by striking ``For the purposes 
                of this subsection, the'' and inserting the following:
                    ``(B) Solar energy.--The'';
                    (D) in the sentence beginning ``The Secretary may 
                also''--
                          (i) by striking ``The Secretary may also'' and 
                      inserting the following:
            ``(2) Loan purposes.--The Secretary may'';
                          (ii) by inserting ``and private investment 
                      funds that invest primarily in cooperative 
                      organizations'' after ``or nonprofit'';
                          (iii) by striking ``of (1) improving'' and 
                      inserting ``of--
                    ``(A) improving'';
                          (iv) by striking ``control, (2) the'' and 
                      inserting ``control;
                    ``(B) the'';
                          (v) by striking ``areas, (3) reducing'' and 
                      inserting ``areas;

[[Page 122 STAT. 1165]]

                    ``(C) reducing'';
                          (vi) by striking ``areas, and (4) to'' and 
                      inserting ``areas; and
                    ``(D) to'';
                    (E) in the sentence beginning ``Such loans,'', by 
                striking ``Such loans,'' and inserting the following:
            ``(3) Loan guarantees.--Loans described in paragraph (2),''; 
        and
                    (F) in the last sentence, by striking ``No loan'' 
                and inserting the following:
            ``(4) Maximum amount of principal.--No loan''; and
            (3) in subsection (g)--
                    (A) in paragraph (1), by inserting ``, including 
                guarantees described in paragraph (3)(A)(ii)'' before 
                the period at the end;
                    (B) in paragraph (3)(A)--
                          (i) by striking ``(A) In general.--The 
                      Secretary'' and inserting the following:
                    ``(A) Eligibility.--
                          ``(i) In general.--The Secretary''; and
                          (ii) by adding at the end the following:
                          ``(ii) Equity.--The Secretary may guarantee a 
                      loan made for the purchase of preferred stock or 
                      similar equity issued by a cooperative 
                      organization or a fund that invests primarily in 
                      cooperative organizations, if the guarantee 
                      significantly benefits 1 or more entities eligible 
                      for assistance for the purposes described in 
                      subsection (a)(1), as determined by the 
                      Secretary.''; and
                    (C) in paragraph (8)(A)(ii), by striking ``a 
                project--'' and all that follows through the end of 
                subclause (II) and inserting ``a project that--
                                    ``(I)(aa) is in a rural area; and
                                    ``(bb) provides for the value-added 
                                processing of agricultural commodities; 
                                or
                                    ``(II) significantly benefits 1 or 
                                more entities eligible for assistance 
                                for the purposes described in subsection 
                                (a)(1), as determined by the 
                                Secretary.''.

    (b) Conforming Amendments.--
            (1) Section 307(a)(6)(B) of the Consolidated Farm and Rural 
        Development Act (7 U.S.C. 1927(a)(6)(B)) is amended by striking 
        clause (ii) and inserting the following:
            ``(ii) section 310B(a)(2)(A); and''.
            (2) Section 310B(g) of the Consolidated Farm and Rural 
        Development Act (7 U.S.C. 1932(g)) is amended by striking 
        ``subsection (a)(1)'' each place it appears in paragraphs (1), 
        (6)(A)(iii), and (8)(C) and inserting ``subsection (a)(2)(A)''.
            (3) Section 333A(g)(1)(B) of the Consolidated Farm and Rural 
        Development Act (7 U.S.C. 1983a(g)(1)(B)) is amended by striking 
        ``section 310B(a)(1)'' and inserting ``section 310B(a)(2)(A)''.
            (4) Section 381E(d)(3)(B) of the Consolidated Farm and Rural 
        Development Act (7 U.S.C. 2009d(d)(3)(B)) is amended by striking 
        ``section 310B(a)(1)'' and inserting ``section 310B(a)(2)(A)''.

[[Page 122 STAT. 1166]]

SEC. 6013. RURAL COOPERATIVE DEVELOPMENT GRANTS.

    (a) Eligibility.--Section 310B(e)(5) of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 1932(e)(5)) is amended--
            (1) in subparagraph (A), by striking ``administering a 
        nationally coordinated, regionally or State-wide operated 
        project'' and inserting ``carrying out activities to promote and 
        assist the development of cooperatively and mutually owned 
        businesses'';
            (2) in subparagraph (B), by inserting ``to promote and 
        assist the development of cooperatively and mutually owned 
        businesses'' before the semicolon;
            (3) by striking subparagraph (D);
            (4) by redesignating subparagraph (E) as subparagraph (D);
            (5) in subparagraph (D) (as so redesignated), by striking 
        ``and'' at the end;
            (6) by inserting after subparagraph (D) (as so redesignated) 
        the following:
                    ``(E) demonstrate a commitment to--
                          ``(i) networking with and sharing the results 
                      of the efforts of the center with other 
                      cooperative development centers and other 
                      organizations involved in rural economic 
                      development efforts; and
                          ``(ii) developing multiorganization and 
                      multistate approaches to addressing the economic 
                      development and cooperative needs of rural areas; 
                      and''; and
            (7) in subparagraph (F), by striking ``providing greater 
        than'' and inserting ``providing''.

    (b) Authority to Award Multiyear Grants.--Section 310B(e) of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 1932(e)) is 
amended by striking paragraph (6) and inserting the following:
            ``(6) Grant period.--
                    ``(A) In general.--A grant awarded to a center that 
                has received no prior funding under this subsection 
                shall be made for a period of 1 year.
                    ``(B) Multiyear grants.--If the Secretary determines 
                it to be in the best interest of the program, the 
                Secretary shall award grants for a period of more than 1 
                year, but not more than 3 years, to a center that has 
                successfully met the parameters described in paragraph 
                (5), as determined by the Secretary.''.

    (c) Authority to Extend Grant Period.--Section 310B(e) of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 1932(e)) is 
amended--
            (1) by redesignating paragraphs (7), (8), and (9) as 
        paragraphs (8), (9), and (12), respectively; and
            (2) by inserting after paragraph (6) the following:
            ``(7) Authority to extend grant period.--The Secretary may 
        extend for 1 additional 12-month period the period in which a 
        grantee may use a grant made under this subsection.''.

    (d) Cooperative Research Program.--Section 310B(e) of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 1932(e)) is 
amended by inserting after paragraph (9) (as redesignated by subsection 
(c)(1)) the following:
            ``(10) <<NOTE: Contracts.>>  Cooperative research program.--
        The Secretary shall enter into a cooperative research agreement 
        with 1 or

[[Page 122 STAT. 1167]]

        more qualified academic institutions in each fiscal year to 
        conduct research on the effects of all types of cooperatives on 
        the national economy.''.

    (e) Addressing Needs of Minority Communities.--Section 310B(e) of 
the Consolidated Farm and Rural Development Act (7 U.S.C. 1932(e)) is 
amended by inserting after paragraph (10) (as added by subsection (d)) 
the following:
            ``(11) Addressing needs of minority communities.--
                    ``(A) Definition of socially disadvantaged group.--
                In this paragraph, the term `socially disadvantaged 
                group' has the meaning given the term in section 355(e).
                    ``(B) Reservation of funds.--
                          ``(i) In general.--If the total amount 
                      appropriated under paragraph (12) for a fiscal 
                      year exceeds $7,500,000, the Secretary shall 
                      reserve an amount equal to 20 percent of the total 
                      amount appropriated for grants for cooperative 
                      development centers, individual cooperatives, or 
                      groups of cooperatives--
                                    ``(I) that serve socially 
                                disadvantaged groups; and
                                    ``(II) a majority of the boards of 
                                directors or governing boards of which 
                                are comprised of individuals who are 
                                members of socially disadvantaged 
                                groups.
                          ``(ii) Insufficient applications.--To the 
                      extent there are insufficient applications to 
                      carry out clause (i), the Secretary shall use the 
                      funds as otherwise authorized by this 
                      subsection.''.

    (f) Authorization of Appropriations.--Paragraph (12) of section 
310B(e) of the Consolidated Farm and Rural Development Act (7 U.S.C. 
1932(e)) (as redesignated by subsection (c)(1)) is amended by striking 
``1996 through 2007'' and inserting ``2008 through 2012''.
SEC. 6014. GRANTS TO BROADCASTING SYSTEMS.

    Section 310B(f)(3) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1932(f)(3)) is amended by striking ``2002 through 2007'' 
and inserting ``2008 through 2012''.
SEC. 6015. LOCALLY OR REGIONALLY PRODUCED AGRICULTURAL FOOD 
                          PRODUCTS.

    Section 310B(g) of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 1932(g)) is amended by adding at the end the following:
            ``(9) Locally or regionally produced agricultural food 
        products.--
                    ``(A) Definitions.--In this paragraph:
                          ``(i) Locally or regionally produced 
                      agricultural food product.--The term `locally or 
                      regionally produced agricultural food product' 
                      means any agricultural food product that is 
                      raised, produced, and distributed in--
                                    ``(I) the locality or region in 
                                which the final product is marketed, so 
                                that the total distance that the product 
                                is transported is less than 400 miles 
                                from the origin of the product; or
                                    ``(II) the State in which the 
                                product is produced.

[[Page 122 STAT. 1168]]

                          ``(ii) Underserved community.--The term 
                      `underserved community' means a community 
                      (including an urban or rural community and an 
                      Indian tribal community) that has, as determined 
                      by the Secretary--
                                    ``(I) limited access to affordable, 
                                healthy foods, including fresh fruits 
                                and vegetables, in grocery retail stores 
                                or farmer-to-consumer direct markets; 
                                and
                                    ``(II) a high rate of hunger or food 
                                insecurity or a high poverty rate.
                    ``(B) Loan and loan guarantee program.--
                          ``(i) In general.--The Secretary shall make or 
                      guarantee loans to individuals, cooperatives, 
                      cooperative organizations, businesses, and other 
                      entities to establish and facilitate enterprises 
                      that process, distribute, aggregate, store, and 
                      market locally or regionally produced agricultural 
                      food products to support community development and 
                      farm and ranch income.
                          ``(ii) Requirement.--The recipient of a loan 
                      or loan guarantee under clause (i) shall include 
                      in an appropriate agreement with retail and 
                      institutional facilities to which the recipient 
                      sells locally or regionally produced agricultural 
                      food products a requirement to inform consumers of 
                      the retail or institutional facilities that the 
                      consumers are purchasing or consuming locally or 
                      regionally produced agricultural food products.
                          ``(iii) Priority.--In making or guaranteeing a 
                      loan under clause (i), the Secretary shall give 
                      priority to projects that have components 
                      benefitting underserved communities.
                          ``(iv) Reports.--Not later than 2 years after 
                      the date of enactment of this paragraph and 
                      annually thereafter, 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 projects carried out using loans or 
                      loan guarantees made under clause (i), including--
                                    ``(I) the characteristics of the 
                                communities served; and
                                    ``(II) resulting benefits.
                          ``(v) Reservation of funds.--
                                    ``(I) In general.--For each of 
                                fiscal years 2008 through 2012, the 
                                Secretary shall reserve not less than 5 
                                percent of the funds made available to 
                                carry out this subsection to carry out 
                                this subparagraph.
                                    ``(II) Availability of funds.--Funds 
                                reserved under subclause (I) for a 
                                fiscal year shall be reserved until 
                                April 1 of the fiscal year.''.
SEC. 6016. APPROPRIATE TECHNOLOGY TRANSFER FOR RURAL AREAS.

    Section 310B of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1932) is amended by adding at the end the following:
    ``(i) Appropriate Technology Transfer for Rural Areas Program.--

[[Page 122 STAT. 1169]]

            ``(1) Definition of national nonprofit agricultural 
        assistance institution.--In this subsection, the term `national 
        nonprofit agricultural assistance institution' means an 
        organization that--
                    ``(A) is described in section 501(c)(3) of the 
                Internal Revenue Code of 1986 and exempt from taxation 
                under 501(a) of that Code;
                    ``(B) has staff and offices in multiple regions of 
                the United States;
                    ``(C) has experience and expertise in operating 
                national agriculture technical assistance programs;
                    ``(D) expands markets for the agricultural 
                commodities produced by producers through the use of 
                practices that enhance the environment, natural resource 
                base, and quality of life; and
                    ``(E) improves the economic viability of 
                agricultural operations.
            ``(2) Establishment.--The Secretary shall establish a 
        national appropriate technology transfer for rural areas program 
        to assist agricultural producers that are seeking information 
        to--
                    ``(A) reduce input costs;
                    ``(B) conserve energy resources;
                    ``(C) diversify operations through new energy crops 
                and energy generation facilities; and
                    ``(D) expand markets for agricultural commodities 
                produced by the producers by using practices that 
                enhance the environment, natural resource base, and 
                quality of life.
            ``(3) Implementation.--
                    ``(A) In general.--The Secretary shall carry out the 
                program under this subsection by making a grant to, or 
                offering to enter into a cooperative agreement with, a 
                national nonprofit agricultural assistance institution.
                    ``(B) Grant amount.--A grant made, or cooperative 
                agreement entered into, under subparagraph (A) shall 
                provide 100 percent of the cost of providing information 
                described in paragraph (2).
            ``(4) Authorization of appropriations.--There are authorized 
        to be appropriated to carry out this subsection $5,000,000 for 
        each of fiscal years 2008 through 2012.''.
SEC. 6017. RURAL ECONOMIC AREA PARTNERSHIP ZONES.

    Section 310B of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1932) (as amended by section 6016) is amended by adding at the 
end the following:
    ``(j) <<NOTE: Effective date. Termination date.>>  Rural Economic 
Area Partnership Zones.--Effective beginning on the date of enactment of 
this subsection through September 30, 2012, the Secretary shall carry 
out those rural economic area partnership zones administratively in 
effect on the date of enactment of this subsection in accordance with 
the terms and conditions contained in the memorandums of agreement 
entered into by the Secretary for the rural economic area partnership 
zones, except as otherwise provided in this subsection.''.

[[Page 122 STAT. 1170]]

SEC. 6018. DEFINITIONS.

    (a) Rural Area.--Section 343(a) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1991(a)) is amended by striking paragraph (13) 
and inserting the following:
            ``(13) Rural and rural area.--
                    ``(A) In general.--Subject to subparagraphs (B) 
                through (G), 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) any urbanized area contiguous and 
                      adjacent to a city or town described in clause 
                      (i).
                    ``(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 any area other than a city, town, or 
                unincorporated area that has a population of greater 
                than 20,000 inhabitants.
                    ``(D) Areas rural in character.--
                          ``(i) Application.--This subparagraph applies 
                      to--
                                    ``(I) an urbanized area described in 
                                subparagraphs (A)(ii) and (F) that--
                                            ``(aa) has 2 points on its 
                                        boundary that are at least 40 
                                        miles apart; and
                                            ``(bb) is not contiguous or 
                                        adjacent to a city or town that 
                                        has a population of greater than 
                                        150,000 inhabitants or an 
                                        urbanized area of such city or 
                                        town; and
                                    ``(II) an area within an urbanized 
                                area described in subparagraphs (A)(ii) 
                                and (F) that is within \1/4\-mile of a 
                                rural area described in subparagraph 
                                (A).
                          ``(ii) Determination.--Notwithstanding any 
                      other provision of this paragraph, on the petition 
                      of a unit of local government in an area described 
                      in clause (i) or on the initiative of the Under 
                      Secretary for Rural Development, the Under 
                      Secretary may determine that a part of an area 
                      described in clause (i) is a rural area for the 
                      purposes of this paragraph, if the Under Secretary 
                      finds that the part is rural in character, as 
                      determined by the Under Secretary.
                          ``(iii) Administration.--In carrying out this 
                      subparagraph, the Under Secretary for Rural 
                      Development shall--
                                    ``(I) not delegate the authority to 
                                carry out this subparagraph;
                                    ``(II) consult with the applicable 
                                rural development State or regional 
                                director of the Department of 
                                Agriculture and the governor of the 
                                respective State;

[[Page 122 STAT. 1171]]

                                    ``(III) provide to the petitioner an 
                                opportunity to appeal to the Under 
                                Secretary a determination made under 
                                this subparagraph;
                                    ``(IV) <<NOTE: Public 
                                information. Notice. Deadline.>>  
                                release to the public notice of a 
                                petition filed or initiative of the 
                                Under Secretary under this subparagraph 
                                not later than 30 days after receipt of 
                                the petition or the commencement of the 
                                initiative, as appropriate;
                                    ``(V) <<NOTE: Time period.>>  make a 
                                determination under this subparagraph 
                                not less than 15 days, and not more than 
                                60 days, after the release of the notice 
                                under subclause (IV);
                                    ``(VI) <<NOTE: Reports.>>  submit to 
                                the Committee on Agriculture of the 
                                House of Representatives and the 
                                Committee on Agriculture, Nutrition, and 
                                Forestry of the Senate an annual report 
                                on actions taken to carry out this 
                                subparagraph; and
                                    ``(VII) <<NOTE: Termination date.>>  
                                terminate a determination under this 
                                subparagraph that part of an area is a 
                                rural area on the date that data is 
                                available for the next decennial census 
                                conducted under section 141(a) of title 
                                13, United States Code.
                    ``(E) Exclusions.--Notwithstanding any other 
                provision of this paragraph, in determining which census 
                blocks in an urbanized area are not in a rural area (as 
                defined in this paragraph), the Secretary shall exclude 
                any cluster of census blocks that would otherwise be 
                considered not in a rural area only because the cluster 
                is adjacent to not more than 2 census blocks that are 
                otherwise considered not in a rural area under this 
                paragraph.
                    ``(F) Urban area growth.--
                          ``(i) Application.--This subparagraph applies 
                      to--
                                    ``(I) any area that--
                                            ``(aa) is a collection of 
                                        census blocks that are 
                                        contiguous to each other;
                                            ``(bb) has a housing density 
                                        that the Secretary estimates is 
                                        greater than 200 housing units 
                                        per square mile; and
                                            ``(cc) is contiguous or 
                                        adjacent to an existing boundary 
                                        of a rural area; and
                                    ``(II) any urbanized area contiguous 
                                and adjacent to a city or town described 
                                in subparagraph (A)(i).
                          ``(ii) Adjustments.--The Secretary may, by 
                      regulation only, consider--
                                    ``(I) an area described in clause 
                                (i)(I) not to be a rural area for 
                                purposes of subparagraphs (A) and (C); 
                                and
                                    ``(II) an area described in clause 
                                (i)(II) not to be a rural area for 
                                purposes of subparagraph (C).
                          ``(iii) Appeals.--A program applicant may 
                      appeal an estimate made under clause (i)(I) based 
                      on appropriate data for an area, as determined by 
                      the Secretary.
                    ``(G) Hawaii and puerto rico.--Notwithstanding any 
                other provision of this paragraph, within the areas of 
                the County of Honolulu, Hawaii, and the Commonwealth of

[[Page 122 STAT. 1172]]

                Puerto Rico, the Secretary may designate any part of the 
                areas as a rural area if the Secretary determines that 
                the part is not urban in character, other than any area 
                included in the Honolulu Census Designated Place or the 
                San Juan Census Designated Place.''.

    (b) Report.--Not later than 2 years after the date of enactment of 
this Act, the Secretary shall prepare and 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) assesses the various definitions of the term ``rural'' 
        and ``rural area'' that are used with respect to programs 
        administered by the Secretary;
            (2) describes the effects that the variations in those 
        definitions have on those programs;
            (3) make recommendations for ways to better target funds 
        provided through rural development programs; and
            (4) determines the effect of the amendment made by 
        subsection (a) on the level of rural development funding and 
        participation in those programs in each State.
SEC. 6019. NATIONAL RURAL DEVELOPMENT PARTNERSHIP.

    Section 378 of the Consolidated Farm and Rural Development Act (7 
U.S.C. 2008m) is amended--
            (1) in subsection (g)(1), by striking ``2003 through 2007'' 
        and inserting ``2008 through 2012''; and
            (2) in subsection (h), by striking ``the date that is 5 
        years after the date of enactment of this section'' and 
        inserting ``September 30, 2012''.
SEC. 6020. HISTORIC BARN PRESERVATION.

    (a) Grant Priority.--Section 379A(c) of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 2008o(c)) is amended--
            (1) in paragraph (2)--
                    (A) in subparagraphs (A) and (B), by striking ``a 
                historic barn'' each place it appears and inserting 
                ``historic barns''; and
                    (B) in subparagraph (C), by striking ``on a historic 
                barn'' and inserting ``on historic barns (including 
                surveys)'';
            (2) by redesignating paragraphs (3) and (4) as paragraphs 
        (4) and (5), respectively; and
            (3) by inserting after paragraph (2) the following:
            ``(3) Priority.--In making grants under this subsection, the 
        Secretary shall give the highest priority to funding projects 
        described in paragraph (2)(C).''.

    (b) Authorization of Appropriations.--Section 379A(c)(5) of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 2008o(c)(5)) (as 
redesignated by subsection (a)(2)) is amended by striking ``2002 through 
2007'' and inserting ``2008 through 2012''.
SEC. 6021. GRANTS FOR NOAA WEATHER RADIO TRANSMITTERS.

    Section 379B(d) of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 2008p(d)) is amended by striking ``2002 through 2007'' and 
inserting ``2008 through 2012''.

[[Page 122 STAT. 1173]]

SEC. 6022. RURAL MICROENTREPRENEUR ASSISTANCE PROGRAM.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1981 et seq.) is amended by adding at the end the following:
``SEC. 379E. <<NOTE: 7 USC 2008s.>>  RURAL MICROENTREPRENEUR 
                          ASSISTANCE PROGRAM.

    ``(a) Definitions.--In this section:
            ``(1) 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).
            ``(2) Microentrepreneur.--The term `microentrepreneur' means 
        an owner and operator, or prospective owner and operator, of a 
        rural microenterprise who is unable to obtain sufficient 
        training, technical assistance, or credit other than under this 
        section, as determined by the Secretary.
            ``(3) Microenterprise development organization.--The term 
        `microenterprise development organization' means an organization 
        that--
                    ``(A) is--
                          ``(i) a nonprofit entity;
                          ``(ii) an Indian tribe, the tribal government 
                      of which certifies to the Secretary that--
                                    ``(I) no microenterprise development 
                                organization serves the Indian tribe; 
                                and
                                    ``(II) no rural microentrepreneur 
                                assistance program exists under the 
                                jurisdiction of the Indian tribe; or
                          ``(iii) a public institution of higher 
                      education;
                    ``(B) provides training and technical assistance to 
                rural microentrepreneurs;
                    ``(C) facilitates access to capital or another 
                service described in subsection (b) for rural 
                microenterprises; and
                    ``(D) has a demonstrated record of delivering 
                services to rural microentrepreneurs, or an effective 
                plan to develop a program to deliver services to rural 
                microentrepreneurs, as determined by the Secretary.
            ``(4) Microloan.--The term `microloan' means a business loan 
        of not more than $50,000 that is provided to a rural 
        microenterprise.
            ``(5) Program.--The term `program' means the rural 
        microentrepreneur assistance program established under 
        subsection (b).
            ``(6) Rural microenterprise.--The term `rural 
        microenterprise' means--
                    ``(A) a sole proprietorship located in a rural area; 
                or
                    ``(B) a business entity with not more than 10 full-
                time-equivalent employees located in a rural area.

    ``(b) Rural Microentrepreneur Assistance Program.--
            ``(1) Establishment.--The Secretary shall establish a rural 
        microentrepreneur assistance program to provide loans and grants 
        to support microentrepreneurs in the development and ongoing 
        success of rural microenterprises.
            ``(2) Purpose.--The purpose of the program is to provide 
        microentrepreneurs with--
                    ``(A) the skills necessary to establish new rural 
                microenterprises; and

[[Page 122 STAT. 1174]]

                    ``(B) continuing technical and financial assistance 
                related to the successful operation of rural 
                microenterprises.
            ``(3) Loans.--
                    ``(A) In general.--The Secretary shall make loans to 
                microenterprise development organizations for the 
                purpose of providing fixed interest rate microloans to 
                microentrepreneurs for startup and growing rural 
                microenterprises.
                    ``(B) Loan terms.--A loan made by the Secretary to a 
                microenterprise development organization under this 
                paragraph shall--
                          ``(i) be for a term not to exceed 20 years; 
                      and
                          ``(ii) bear an annual interest rate of at 
                      least 1 percent.
                    ``(C) Loan loss reserve fund.--The Secretary shall 
                require each microenterprise development organization 
                that receives a loan under this paragraph to--
                          ``(i) establish a loan loss reserve fund; and
                          ``(ii) maintain the reserve fund in an amount 
                      equal to at least 5 percent of the outstanding 
                      balance of such loans owed by the microenterprise 
                      development organization, until all obligations 
                      owed to the Secretary under this paragraph are 
                      repaid.
                    ``(D) Deferral of interest and principal.--The 
                Secretary may permit the deferral of payments on 
                principal and interest due on a loan to a 
                microenterprise development organization made under this 
                paragraph for a 2-year period beginning on the date the 
                loan is made.
            ``(4) Grants.--
                    ``(A) Grants to support rural microenterprise 
                development.--
                          ``(i) In general.--The Secretary shall make 
                      grants to microenterprise development 
                      organizations to--
                                    ``(I) provide training, operational 
                                support, business planning, and market 
                                development assistance, and other 
                                related services to rural 
                                microentrepreneurs; and
                                    ``(II) carry out such other projects 
                                and activities as the Secretary 
                                determines appropriate to further the 
                                purposes of the program.
                          ``(ii) Selection.--In making grants under 
                      clause (i), the Secretary shall--
                                    ``(I) place an emphasis on 
                                microenterprise development 
                                organizations that serve 
                                microentrepreneurs that are located in 
                                rural areas that have suffered 
                                significant outward migration, as 
                                determined by the Secretary; and
                                    ``(II) ensure, to the maximum extent 
                                practicable, that grant recipients 
                                include microenterprise development 
                                organizations--
                                            ``(aa) of varying sizes; and
                                            ``(bb) that serve racially 
                                        and ethnically diverse 
                                        populations.
                    ``(B) Grants to assist microentrepreneurs.--

[[Page 122 STAT. 1175]]

                          ``(i) In general.--The Secretary shall make 
                      grants to microenterprise development 
                      organizations to provide marketing, management, 
                      and other technical assistance to 
                      microentrepreneurs that--
                                    ``(I) received a loan from the 
                                microenterprise development organization 
                                under paragraph (3); or
                                    ``(II) are seeking a loan from the 
                                microenterprise development organization 
                                under paragraph (3).
                          ``(ii) Maximum amount of grant.--A 
                      microenterprise development organization shall be 
                      eligible to receive an annual grant under this 
                      subparagraph in an amount equal to not more than 
                      25 percent of the total outstanding balance of 
                      microloans made by the microenterprise development 
                      organization under paragraph (3), as of the date 
                      the grant is awarded.
                    ``(C) Administrative expenses.--Not more than 10 
                percent of a grant received by a microenterprise 
                development organization for a fiscal year under this 
                paragraph may be used to pay administrative expenses.

    ``(c) Administration.--
            ``(1) Cost share.--
                    ``(A) Federal share.--Subject to subparagraph (B), 
                the Federal share of the cost of a project funded under 
                this section shall not exceed 75 percent.
                    ``(B) Matching requirement.--As a condition of any 
                grant made under this subparagraph, the Secretary shall 
                require the microenterprise development organization to 
                match not less than 15 percent of the total amount of 
                the grant in the form of matching funds, indirect costs, 
                or in-kind goods or services.
                    ``(C) Form of non-federal share.--The non-Federal 
                share of the cost of a project funded under this section 
                may be provided--
                          ``(i) in cash (including through fees, grants 
                      (including community development block grants), 
                      and gifts); or
                          ``(ii) in the form of in-kind contributions.
            ``(2) <<NOTE: Deadline.>>  Oversight.--At a minimum, not 
        later than December 1 of each fiscal year, a microenterprise 
        development organization that receives a loan or grant under 
        this section shall provide to the Secretary such information as 
        the Secretary may require to ensure that assistance provided 
        under this section is used for the purposes for which the loan 
        or grant was made.

    ``(d) Funding.--
            ``(1) Mandatory funding.--Of the funds of the Commodity 
        Credit Corporation, the Secretary shall use to carry out this 
        section, to remain available until expended--
                    ``(A) $4,000,000 for each of fiscal years 2009 
                through 2011; and
                    ``(B) $3,000,000 for fiscal year 2012.
            ``(2) Discretionary funding.--In addition to amounts made 
        available under paragraph (1), there are authorized to be 
        appropriated to carry out this section $40,000,000 for each of 
        fiscal years 2009 through 2012.''.

[[Page 122 STAT. 1176]]

SEC. 6023. GRANTS FOR EXPANSION OF EMPLOYMENT OPPORTUNITIES FOR 
                          INDIVIDUALS WITH DISABILITIES IN RURAL 
                          AREAS.

    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. 379F. <<NOTE: 7 USC 2000t.>>  GRANTS FOR EXPANSION OF 
                          EMPLOYMENT OPPORTUNITIES FOR INDIVIDUALS 
                          WITH DISABILITIES IN RURAL AREAS.

    ``(a) Definitions.--In this section:
            ``(1) Individual with a disability.--The term `individual 
        with a disability' means an individual with a disability (as 
        defined in section 3 of the Americans with Disabilities Act of 
        1990 (42 U.S.C. 12102)).
            ``(2) Individuals with disabilities.--The term `individuals 
        with disabilities' means more than 1 individual with a 
        disability.

    ``(b) Grants.--The Secretary shall make grants to nonprofit 
organizations, or to a consortium of nonprofit organizations, to expand 
and enhance employment opportunities for individuals with disabilities 
in rural areas.
    ``(c) Eligibility.--To be eligible to receive a grant under this 
section, a nonprofit organization or consortium of nonprofit 
organizations shall have--
            ``(1) a significant focus on serving the needs of 
        individuals with disabilities;
            ``(2) demonstrated knowledge and expertise in--
                    ``(A) employment of individuals with disabilities; 
                and
                    ``(B) advising private entities on accessibility 
                issues involving individuals with disabilities;
            ``(3) expertise in removing barriers to employment for 
        individuals with disabilities, including access to 
        transportation, assistive technology, and other accommodations; 
        and
            ``(4) existing relationships with national organizations 
        focused primarily on the needs of rural areas.

    ``(d) Uses.--A grant received under this section may be used only to 
expand or enhance--
            ``(1) employment opportunities for individuals with 
        disabilities in rural areas by developing national technical 
        assistance and education resources to assist small businesses in 
        a rural area to recruit, hire, accommodate, and employ 
        individuals with disabilities; and
            ``(2) self-employment and entrepreneurship opportunities for 
        individuals with disabilities in a rural area.

    ``(e) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $2,000,000 for each of fiscal 
years 2008 through 2012.''.
SEC. 6024. HEALTH CARE SERVICES.

    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:

[[Page 122 STAT. 1177]]

``SEC. 379G. <<NOTE: 7 USC 2008u.>>  HEALTH CARE SERVICES.

    ``(a) Purpose.--The purpose of this section is to address the 
continued unmet health needs in the Delta region through cooperation 
among health care professionals, institutions of higher education, 
research institutions, and other individuals and entities in the region.
    ``(b) Definition of Eligible Entity.--In this section, the term 
`eligible entity' means a consortium of regional institutions of higher 
education, academic health and research institutes, and economic 
development entities located in the Delta region that have experience in 
addressing the health care issues in the region.
    ``(c) Grants.--To carry out the purpose described in subsection (a), 
the Secretary may award a grant to an eligible entity for -
            ``(1) the development of -
                    ``(A) health care services;
                    ``(B) health education programs; and
                    ``(C) health care job training programs; and
            ``(2) the development and expansion of public health-related 
        facilities in the Delta region to address longstanding and unmet 
        health needs of the region.

    ``(d) Use.--As a condition of the receipt of the grant, the eligible 
entity shall use the grant to fund projects and activities described in 
subsection (c), based on input solicited from local governments, public 
health care providers, and other entities in the Delta region.
    ``(e) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary to carry out this section, $3,000,000 for 
each of fiscal years 2008 through 2012.''.
SEC. 6025. DELTA REGIONAL AUTHORITY.

    (a) 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 ``2001 through 2007'' and inserting ``2008 through 
2012''.
    (b) Termination of Authority.--Section 382N of the Consolidated Farm 
and Rural Development Act (7 U.S.C. 2009aa-13) is amended by striking 
``2007'' and inserting ``2012''.
    (c) Expansion.--Section 4(2) of the Delta Development Act (42 U.S.C. 
3121 note; Public Law 100-460) is amended--
            (1) in subparagraph (D), by inserting ``Beauregard, 
        Bienville, Cameron, Claiborne, DeSoto, Jefferson Davis, Red 
        River, St. Mary, Vermillion, Webster,'' after ``St. James,''; 
        and
            (2) in subparagraph (E)--
                    (A) by inserting ``Jasper,'' after ``Copiah,''; and
                    (B) by inserting ``Smith,'' after ``Simpson,''.
SEC. 6026. NORTHERN GREAT PLAINS REGIONAL AUTHORITY.

    (a) Definition of Region.--Section 383A(4) of the Consolidated Farm 
and Rural Development Act (7 U.S.C. 2009bb(4)) is amended by inserting 
``Missouri (other than counties included in the Delta Regional 
Authority),'' after ``Minnesota,''.
    (b) Establishment.--Section 383B of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 2009bb-1) is amended--
            (1) in subsection (a), by adding at the end the following:
            ``(4) Failure to confirm.--
                    ``(A) <<NOTE: Deadline.>>  Federal member.--
                Notwithstanding any other provision of this section, if 
                a Federal member described

[[Page 122 STAT. 1178]]

                in paragraph (2)(A) has not been confirmed by the Senate 
                by not later than 180 days after the date of enactment 
                of this paragraph, the Authority may organize and 
                operate without the Federal member.
                    ``(B) Indian chairperson.--In the case of the Indian 
                Chairperson, if no Indian Chairperson is confirmed by 
                the Senate, the regional authority shall consult and 
                coordinate with the leaders of Indian tribes in the 
                region concerning the activities of the Authority, as 
                appropriate.'';
            (2) in subsection (d)--
                    (A) in paragraph (1), by striking ``to establish 
                priorities and'' and inserting ``for multistate 
                cooperation to advance the economic and social well-
                being of the region and to'';
                    (B) in paragraph (3), by striking ``local 
                development districts,'' and inserting ``regional and 
                local development districts or organizations, regional 
                boards established under subtitle I,'';
                    (C) in paragraph (4), by striking ``cooperation;'' 
                and inserting ``cooperation for--
                          ``(i) renewable energy development and 
                      transmission;
                          ``(ii) transportation planning and economic 
                      development;
                          ``(iii) information technology;
                          ``(iv) movement of freight and individuals 
                      within the region;
                          ``(v) federally-funded research at 
                      institutions of higher education; and
                          ``(vi) conservation land management;'';
                    (D) by striking paragraph (6) and inserting the 
                following:
            ``(6) enhance the capacity of, and provide support for, 
        multistate development and research organizations, local 
        development organizations and districts, and resource 
        conservation districts in the region;''; and
                    (E) in paragraph (7), by inserting ``renewable 
                energy,'' after ``commercial,''.
            (3) in subsection (f)(2), by striking ``the Federal 
        cochairperson'' and inserting ``a cochairperson'';
            (4) in subsection (g)(1), by striking subparagraphs (A) 
        through (C) and inserting the following:
                    ``(A) for each of fiscal years 2008 and 2009, 100 
                percent;
                    ``(B) for fiscal year 2010, 75 percent; and
                    ``(C) for fiscal year 2011 and each fiscal year 
                thereafter, 50 percent.''.

    (c) Interstate Cooperation for Economic Opportunity and 
Efficiency.--
            (1) In general.--Subtitle G of the Consolidated Farm and 
        Rural Development Act is amended--
                    (A) by redesignating sections 383C through 383N (7 
                U.S.C. 2009bb-2 through 2009bb-13) as sections 383D 
                through 383O, respectively; and
                    (B) by inserting after section 383B (7 U.S.C. 
                2009bb-1) the following:

[[Page 122 STAT. 1179]]

``SEC. 383C. <<NOTE: 7 USC 2009bb-1a.>>  INTERSTATE COOPERATION 
                          FOR ECONOMIC OPPORTUNITY AND EFFICIENCY.

    ``(a) In General.--The <<NOTE: Plans.>>  Authority shall provide 
assistance to States in developing regional plans to address multistate 
economic issues, including plans--
            ``(1) to develop a regional transmission system for movement 
        of renewable energy to markets outside the region;
            ``(2) to address regional transportation concerns, including 
        the establishment of a Northern Great Plains Regional 
        Transportation Working Group;
            ``(3) to encourage and support interstate collaboration on 
        federally-funded research that is in the national interest; and
            ``(4) to establish a Regional Working Group on Agriculture 
        Development and Transportation.

    ``(b) Economic Issues.--The multistate economic issues referred to 
in subsection (a) shall include--
            ``(1) renewable energy development and transmission;
            ``(2) transportation planning and economic development;
            ``(3) information technology;
            ``(4) movement of freight and individuals within the region;
            ``(5) federally-funded research at institutions of higher 
        education; and
            ``(6) conservation land management.''.
            (2) Conforming amendments.--
                    (A) Section 383B(c)(3)(B) of the Consolidated Farm 
                and Rural Development Act (7 U.S.C. 2009bb-1(c)(3)(B)) 
                is amended by striking ``383I'' and inserting ``383J''.
                    (B) Section 383D(a) of the Consolidated Farm and 
                Rural Development Act (as redesignated by paragraph 
                (1)(A)) is <<NOTE: 7 USC 2009bb-2.>>  amended by 
                striking ``383I'' and inserting ``383J''.
                    (C) Section 383E of the Consolidated Farm and Rural 
                Development Act (as so redesignated) <<NOTE: 7 USC 
                2009bb-3.>>  is amended--
                          (i) in subsection (b)(1), by striking 
                      ``383F(b)'' and inserting ``383G(b)''; and
                          (ii) in subsection (c)(2)(A), by striking 
                      ``383I'' and inserting ``383J''.
                    (D) Section 383G of the Consolidated Farm and Rural 
                Development Act (as so redesignated) <<NOTE: 7 USC 
                2009bb-5.>>  is amended--
                          (i) in subsection (b)--
                                    (I) in paragraph (1), by striking 
                                ``383M'' and inserting ``383N''; and
                                    (II) in paragraph (2), by striking 
                                ``383D(b)'' and inserting ``383E(b)'';
                          (ii) in subsection (c)(2)(A), by striking 
                      ``383E(b)'' and inserting ``383F(b)''; and
                          (iii) in subsection (d)--
                                    (I) by striking ``383M'' and 
                                inserting ``383N''; and
                                    (II) by striking ``383C(a)'' and 
                                inserting ``383D(a)''.
                    (E) Section 383J(c)(2) of the Consolidated Farm and 
                Rural Development Act (as so redesignated) <<NOTE: 7 USC 
                2009bb-8.>>  is amended by striking ``383H'' and 
                inserting ``383I''.

    (d) Economic and Community Development Grants.--Section 383D of the 
Consolidated Farm and Rural Development Act (as redesignated by 
subsection (c)(1)(A)) <<NOTE: 7 USC 2009bb-2.>>  is amended--
            (1) in subsection (a)--

[[Page 122 STAT. 1180]]

                    (A) in paragraph (1), by striking ``transportation 
                and telecommunication'' and inserting ``transportation, 
                renewable energy transmission, and telecommunication''; 
                and
                    (B) by redesignating paragraphs (1) and (2) as 
                paragraphs (2) and (1), respectively, and moving those 
                paragraphs so as to appear in numerical order; and
            (2) in subsection (b)(2), by striking ``the activities in 
        the following order or priority'' and inserting ``the following 
        activities''.

    (e) Supplements to Federal Grant Programs.--Section 383E(a) of the 
Consolidated Farm and Rural Development Act (as redesignated by 
subsection (c)(1)(A)) <<NOTE: 7 USC 2009bb-3.>>  is amended by striking 
``, including local development districts,''.

    (f) Multistate and Local Development Districts and Organizations and 
Northern Great Plains Inc.--Section 383F of the Consolidated Farm and 
Rural Development Act (as redesignated by subsection 
(c)(1)(A)) <<NOTE: 7 USC 2009bb-4.>>  is amended--
            (1) by striking the section heading and inserting 
        ``multistate and local development districts and organizations 
        and northern great plains inc.''; and
            (2) by striking subsections (a) through (c) and inserting 
        the following:

    ``(a) Definition of Multistate and Local Development District or 
Organization.--In this section, the term `multistate and local 
development district or organization' 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) a nonprofit incorporated body organized 
                      or chartered under the law of the State in which 
                      the entity is located;
                          ``(iii) a nonprofit agency or instrumentality 
                      of a State or local government;
                          ``(iv) a public organization established 
                      before the date of enactment of this subtitle 
                      under State law for creation of 
                      multijurisdictional, area-wide planning 
                      organizations;
                          ``(v) a nonprofit agency or instrumentality of 
                      a State that was established for the purpose of 
                      assisting with multistate cooperation; or
                          ``(vi) a nonprofit association or combination 
                      of bodies, agencies, and instrumentalities 
                      described in clauses (ii) through (v); and
            ``(2) that has not, as certified by the Authority (in 
        consultation with the Federal cochairperson or Secretary, as 
        appropriate)--
                    ``(A) inappropriately used Federal grant funds from 
                any Federal source; or

[[Page 122 STAT. 1181]]

                    ``(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 Multistate, Local, or Regional Development Districts 
and Organizations.--
            ``(1) In general.--The Authority may make grants for 
        administrative expenses under this section to multistate, local, 
        and regional development districts and organizations.
            ``(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 multistate, local, 
                or regional development district or organization 
                receiving the grant.
                    ``(B) Maximum period.--No grant described in 
                paragraph (1) shall be awarded for a period greater than 
                3 years.
            ``(3) Local share.--The contributions of a multistate, 
        local, or regional development district or organization for 
        administrative expenses may be in cash or in kind, fairly 
        evaluated, including space, equipment, and services.

    ``(c) Duties.--
            ``(1) In general.--Except as provided in paragraph (2), a 
        local development district shall operate as a lead organization 
        serving multicounty areas in the region at the local level.
            ``(2) Designation.--The Federal cochairperson may designate 
        an Indian tribe or multijurisdictional organization to serve as 
        a lead organization in such cases as the Federal cochairperson 
        or Secretary, as appropriate, determines appropriate.''.

    (g) Distressed Counties and Areas and Nondistressed Counties.--
Section 383G of the Consolidated Farm and Rural Development Act (as 
redesignated by subsection (c)(1)(A)) <<NOTE: 7 USC 2009bb-5.>>  is 
amended--
            (1) in subsection (b)(1), by striking ``75'' and inserting 
        ``50'';
            (2) by striking subsection (c);
            (3) by redesignating subsection (d) as subsection (c); and
            (4) in subsection (c) (as so redesignated)--
                    (A) in the subsection heading, by inserting 
                ``Renewable Energy,'' after``Telecommunication''; and
                    (B) by inserting ``, renewable energy,'' after 
                ``telecommunication,''.

    (h) Development Planning Process.--Section 383H of the Consolidated 
Farm and Rural Development Act (as redesignated by subsection 
(c)(1)(A)) <<NOTE: 7 USC 2009bb-6.>>  is amended--
            (1) in subsection (c)(1), by striking subparagraph (A) and 
        inserting the following:
                    ``(A) multistate, regional, and local development 
                districts and organizations; and''; and
            (2) in subsection (d)(1), by striking ``State and local 
        development districts'' and inserting ``multistate, regional, 
        and local development districts and organizations''.

    (i) Program Development Criteria.--Section 383I(a)(1) of the 
Consolidated Farm and Rural Development Act (as redesignated by 
subsection (c)(1)(A)) <<NOTE: 7 USC 2009bb-7.>>  is amended by inserting 
``multistate or'' before ``regional''.

[[Page 122 STAT. 1182]]

    (j) Authorization of Appropriations.--Section 383N(a) of the 
Consolidated Farm and Rural Development Act (as redesignated by 
subsection (c)(1)(A)) <<NOTE: 7 USC 2009bb-12.>>  is amended by striking 
``2002 through 2007'' and inserting ``2008 through 2012''.

    (k) Termination of Authority.--Section 383O of the Consolidated Farm 
and Rural Development Act (as redesignated by subsection 
(c)(1)(A)) <<NOTE: 7 USC 2009bb-13.>>  is amended by striking ``2007'' 
and inserting ``2012''.
SEC. 6027. RURAL BUSINESS INVESTMENT PROGRAM.

    (a) Issuance and Guarantee of Trust Certificates.--Section 
384F(b)(3)(A) of the Consolidated Farm and Rural Development Act (7 
U.S.C. 2009cc-5(b)(3)(A)) is amended by striking ``In the event'' and 
inserting the following:
                          ``(i) Authority to prepay.--A debenture may be 
                      prepaid at any time without penalty.
                          ``(ii) Reduction of guarantee.--Subject to 
                      clause (i), if''.

    (b) Fees.--Section 384G of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 2009cc-6) is amended--
            (1) in subsection (a), by striking ``such fees as the 
        Secretary considers appropriate'' and inserting ``a fee that 
        does not exceed $500'';
            (2) in subsection (b), by striking ``approved by the 
        Secretary'' and inserting ``that does not exceed $500''; and
            (3) in subsection (c)--
                    (A) in paragraph (1), by striking ``The'' and 
                inserting ``Except as provided in paragraph (3), the'';
                    (B) in paragraph (2)--
                          (i) in subparagraph (A), by striking ``and'' 
                      at the end;
                          (ii) in subparagraph (B), by striking the 
                      period at the end and inserting ``; and''; and
                          (iii) by adding at the end the following:
                    ``(C) shall not exceed $500 for any fee collected 
                under this subsection.''; and
                    (C) by adding at the end the following:
            ``(3) Prohibition on collection of certain fees.--In the 
        case of a license described in paragraph (1) that was approved 
        before July 1, 2007, the Secretary shall not collect any fees 
        due on or after the date of enactment of this paragraph.''.

    (c) Rural Business Investment Companies.--Section 384I(c) of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 2009cc-8(c)) is 
amended--
            (1) by redesignating paragraph (3) as paragraph (4); and
            (2) by inserting after paragraph (2) the following:
            ``(3) Time frame.--Each rural business investment company 
        shall have a period of 2 years to meet the capital requirements 
        of this subsection.''.

    (d) Financial Institution Investments.--Section 384J of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 2009cc-9) is 
amended--
            (1) in subsection (a)(1), by inserting ``, including an 
        investment pool created entirely by such bank or savings 
        association'' before the period at the end; and
            (2) in subsection (c), by striking ``15'' and inserting 
        ``25''.

[[Page 122 STAT. 1183]]

    (e) Contracting of Functions.--Section 384Q of the Consolidated Farm 
and Rural Development Act (7 U.S.C. 2009cc-16) is repealed.
    (f) Funding.--The Consolidated Farm and Rural Development Act is 
amended by striking section 384S (7 U.S.C. 2009cc-18) and inserting the 
following:
``SEC. 384S. <<NOTE: 7 USC 2009cc-18.>>  AUTHORIZATION OF 
                          APPROPRIATIONS.

    ``There is authorized to be appropriated to carry out this subtitle 
$50,000,000 for the period of fiscal years 2008 through 2012.''.
SEC. 6028. RURAL COLLABORATIVE INVESTMENT PROGRAM.

    Subtitle I of the Consolidated Farm and Rural Development Act (7 
U.S.C. 2009dd et seq.) is amended to read as follows:

          ``Subtitle I--Rural Collaborative Investment Program

``SEC. 385A. <<NOTE: 7 USC 2009dd.>>  PURPOSE.

    ``The purpose of this subtitle is to establish a regional rural 
collaborative investment program--
            ``(1) to provide rural regions with a flexible investment 
        vehicle, allowing for local control with Federal oversight, 
        assistance, and accountability;
            ``(2) to provide rural regions with incentives and resources 
        to develop and implement comprehensive strategies for achieving 
        regional competitiveness, innovation, and prosperity;
            ``(3) to foster multisector community and economic 
        development collaborations that will optimize the asset-based 
        competitive advantages of rural regions with particular emphasis 
        on innovation, entrepreneurship, and the creation of quality 
        jobs;
            ``(4) to foster collaborations necessary to provide the 
        professional technical expertise, institutional capacity, and 
        economies of scale that are essential for the long-term 
        competitiveness of rural regions; and
            ``(5) to better use Department of Agriculture and other 
        Federal, State, and local governmental resources, and to 
        leverage those resources with private, nonprofit, and 
        philanthropic investments, in order to achieve measurable 
        community and economic prosperity, growth, and sustainability.
``SEC. 385B. <<NOTE: 7 USC 2009dd-1.>>  DEFINITIONS.

    ``In this subtitle:
            ``(1) Benchmark.--The term `benchmark' means an annual set 
        of goals and performance measures established for the purpose of 
        assessing performance in meeting a regional investment strategy 
        of a Regional Board.
            ``(2) 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).
            ``(3) National board.--The term `National Board' means the 
        National Rural Investment Board established under section 
        385C(c).

[[Page 122 STAT. 1184]]

            ``(4) National institute.--The term `National Institute' 
        means the National Institute on Regional Rural Competitiveness 
        and Entrepreneurship established under section 385C(b)(2).
            ``(5) Regional board.--The term `Regional Board' means a 
        Regional Rural Investment Board described in section 385D(a).
            ``(6) Regional innovation grant.--The term `regional 
        innovation grant' means a grant made by the Secretary to a 
        certified Regional Board under section 385F.
            ``(7) Regional investment strategy grant.--The term 
        `regional investment strategy grant' means a grant made by the 
        Secretary to a certified Regional Board under section 385E.
            ``(8) Rural heritage.--
                    ``(A) In general.--The term `rural heritage' means 
                historic sites, structures, and districts.
                    ``(B) Inclusions.--The term `rural heritage' 
                includes historic rural downtown areas and main streets, 
                neighborhoods, farmsteads, scenic and historic trails, 
                heritage areas, and historic landscapes.
``SEC. 385C. <<NOTE: 7 USC 2009dd-2.>>  ESTABLISHMENT AND 
                          ADMINISTRATION OF RURAL COLLABORATIVE 
                          INVESTMENT PROGRAM.

    ``(a) Establishment.--The Secretary shall establish a Rural 
Collaborative Investment Program to support comprehensive regional 
investment strategies for achieving rural competitiveness.
    ``(b) Duties of Secretary.--In carrying out this subtitle, the 
Secretary shall--
            ``(1) appoint and provide administrative and program support 
        to the National Board;
            ``(2) <<NOTE: Establishment.>>  establish a national 
        institute, to be known as the `National Institute on Regional 
        Rural Competitiveness and Entrepreneurship', to provide 
        technical assistance to the Secretary and the National Board 
        regarding regional competitiveness and rural entrepreneurship, 
        including technical assistance for--
                    ``(A) the development of rigorous analytic programs 
                to assist Regional Boards in determining the challenges 
                and opportunities that need to be addressed to receive 
                the greatest regional competitive advantage;
                    ``(B) the provision of support for best practices 
                developed by the Regional Boards;
                    ``(C) the establishment of programs to support the 
                development of appropriate governance and leadership 
                skills in the applicable regions; and
                    ``(D) the evaluation of the progress and performance 
                of the Regional Boards in achieving benchmarks 
                established in a regional investment strategy;
            ``(3) work with the National Board to develop a national 
        rural investment plan that shall--
                    ``(A) create a framework to encourage and support a 
                more collaborative and targeted rural investment 
                portfolio in the United States;
                    ``(B) establish a Rural Philanthropic Initiative, to 
                work with rural communities to create and enhance the 
                pool of permanent philanthropic resources committed to 
                rural community and economic development;

[[Page 122 STAT. 1185]]

                    ``(C) cooperate with the Regional Boards and State 
                and local governments, organizations, and entities to 
                ensure investment strategies are developed that take 
                into consideration existing rural assets; and
                    ``(D) encourage the organization of Regional Boards;
            ``(4) <<NOTE: Certification.>>  certify the eligibility of 
        Regional Boards to receive regional investment strategy grants 
        and regional innovation grants;
            ``(5) <<NOTE: Grants.>>  provide grants for Regional Boards 
        to develop and implement regional investment strategies;
            ``(6) provide technical assistance to Regional Boards on 
        issues, best practices, and emerging trends relating to rural 
        development, in cooperation with the National Rural Investment 
        Board; and
            ``(7) provide analytic and programmatic support for regional 
        rural competitiveness through the National Institute, 
        including--
                    ``(A) programs to assist Regional Boards in 
                determining the challenges and opportunities that must 
                be addressed to receive the greatest regional 
                competitive advantage;
                    ``(B) support for best practices development by the 
                regional investment boards;
                    ``(C) programs to support the development of 
                appropriate governance and leadership skills in the 
                region; and
                    ``(D) <<NOTE: Reports.>>  a review and evaluation of 
                the performance of the Regional Boards (including 
                progress in achieving benchmarks established in a 
                regional investment strategy) in an annual report 
                submitted to--
                          ``(i) the Committee on Agriculture of the 
                      House of Representatives; and
                          ``(ii) the Committee on Agriculture, 
                      Nutrition, and Forestry of the Senate.

    ``(c) National Rural Investment Board.--
The <<NOTE: Establishment.>>  Secretary shall establish within the 
Department of Agriculture a board to be known as the `National Rural 
Investment Board'.

    ``(d) Duties of National Board.--The National Board shall--
            ``(1) <<NOTE: Deadline. Regulations.>>  not later than 180 
        days after the date of establishment of the National Board, 
        develop rules relating to the operation of the National Board; 
        and
            ``(2) provide advice to--
                    ``(A) the Secretary and subsequently review the 
                design, development, and execution of the National Rural 
                Investment Plan;
                    ``(B) Regional Boards on issues, best practices, and 
                emerging trends relating to rural development; and
                    ``(C) the Secretary and the National Institute on 
                the development and execution of the program under this 
                subtitle.

    ``(e) Membership.--
            ``(1) In general.--The <<NOTE: Deadline.>>  National Board 
        shall consist of 14 members appointed by the Secretary not later 
        than 180 days after the date of enactment of the Food, 
        Conservation, and Energy Act of 2008.
            ``(2) Supervision.--The National Board shall be subject to 
        the general supervision and direction of the Secretary.
            ``(3) Sectors represented.--The National Board shall consist 
        of representatives from each of--

[[Page 122 STAT. 1186]]

                    ``(A) nationally recognized entrepreneurship 
                organizations;
                    ``(B) regional strategy and development 
                organizations;
                    ``(C) community-based organizations;
                    ``(D) elected members of local governments;
                    ``(E) members of State legislatures;
                    ``(F) primary, secondary, and higher education, job 
                skills training, and workforce development institutions;
                    ``(G) the rural philanthropic community;
                    ``(H) financial, lending, venture capital, 
                entrepreneurship, and other related institutions;
                    ``(I) private sector business organizations, 
                including chambers of commerce and other for-profit 
                business interests;
                    ``(J) Indian tribes; and
                    ``(K) cooperative organizations.
            ``(4) Selection of members.--
                    ``(A) In general.--In selecting members of the 
                National Board, 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 and Minority Leader 
                      of the Senate; and
                          ``(iii) the Speaker and Minority Leader of the 
                      House of Representatives.
                    ``(B) Ex-officio 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, nonvoting members of the National Board.
            ``(5) 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 for a period 
                of not more than 4 years.
                    ``(B) Staggered terms.--The members of the National 
                Board shall be appointed to serve staggered terms.
            ``(6) Initial appointments.--Not <<NOTE: Deadline.>>  later 
        than 1 year after the date of enactment of the Food, 
        Conservation, and Energy Act of 2008, the Secretary shall 
        appoint the initial members of the National Board.
            ``(7) Vacancies.--A vacancy on the National Board shall be 
        filled in the same manner as the original appointment.
            ``(8) Compensation.--A member of the National Board shall 
        receive no compensation for service on the National Board, but 
        shall be reimbursed for related 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.
            ``(9) Chairperson.--The National Board shall select a 
        chairperson from among the members of the National Board.

[[Page 122 STAT. 1187]]

            ``(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).

    ``(f) Administrative Support.--The Secretary, on a reimbursable 
basis from funds made available under section 385H, may provide such 
administrative support to the National Board as the Secretary determines 
is necessary.
``SEC. 385D. <<NOTE: 7 USC 2009dd-3.>>  REGIONAL RURAL INVESTMENT 
                          BOARDS.

    ``(a) In General.--A Regional Rural Investment Board shall be a 
multijurisdictional and multisectoral group that--
            ``(1) represents the long-term economic, community, and 
        cultural interests of a region;
            ``(2) <<NOTE: Certification.>>  is certified by the 
        Secretary to establish a rural investment strategy and compete 
        for regional innovation grants;
            ``(3) is composed of residents of a region that are broadly 
        representative of diverse public, nonprofit, and private sector 
        interests in investment in the region, including (to the maximum 
        extent practicable) representatives of--
                    ``(A) units of local, multijurisdictional, or State 
                government, including not more than 1 representative 
                from each State in the region;
                    ``(B) nonprofit community-based development 
                organizations, including community development financial 
                institutions and community development corporations;
                    ``(C) agricultural, natural resource, and other 
                asset-based related industries;
                    ``(D) in the case of regions with federally 
                recognized Indian tribes, Indian tribes;
                    ``(E) regional development organizations;
                    ``(F) private business organizations, including 
                chambers of commerce;
                    ``(G)(i) institutions of higher education (as 
                defined in section 101(a) of the Higher Education Act of 
                1965 (20 U.S.C. 1001(a)));
                    ``(ii) tribally controlled colleges or universities 
                (as defined in section 2(a) of Tribally Controlled 
                College or University Assistance Act of 1978 (25 U.S.C. 
                1801(a))); and
                    ``(iii) tribal technical institutions;
                    ``(H) workforce and job training organizations;
                    ``(I) other entities and organizations, as 
                determined by the Regional Board;
                    ``(J) cooperatives; and
                    ``(K) consortia of entities and organizations 
                described in subparagraphs (A) through (J);
            ``(4) represents a region inhabited by--
                    ``(A) more than 25,000 individuals, as determined in 
                the latest available decennial census conducted under 
                section 141(a) of title 13, United States Code; or
                    ``(B) in the case of a region with a population 
                density of less than 2 individuals per square mile, at 
                least 10,000 individuals, as determined in that latest 
                available decennial census;
            ``(5) has a membership of which not less than 25 percent, 
        nor more than 40 percent, represents--

[[Page 122 STAT. 1188]]

                    ``(A) units of local government and Indian tribes 
                described in subparagraphs (A) and (D) of paragraph (3);
                    ``(B) nonprofit community and economic development 
                organizations and institutions of higher education 
                described in subparagraphs (B) and (G) of paragraph (3); 
                or
                    ``(C) private business (including chambers of 
                commerce and cooperatives) and agricultural, natural 
                resource, and other asset-based related industries 
                described in subparagraphs (C) and (F) of paragraph (3);
            ``(6) has a membership that may include an officer or 
        employee of a Federal agency, serving as an ex-officio, 
        nonvoting member of the Regional Board to represent the agency; 
        and
            ``(7) has organizational documents that demonstrate that the 
        Regional Board will--
                    ``(A) create a collaborative public-private strategy 
                process;
                    ``(B) develop, and submit to the Secretary for 
                approval, a regional investment strategy that meets the 
                requirements of section 385E, with benchmarks--
                          ``(i) to promote investment in rural areas 
                      through the use of grants made available under 
                      this subtitle; and
                          ``(ii) to provide financial and technical 
                      assistance to promote a broad-based regional 
                      development program aimed at increasing and 
                      diversifying economic growth, improved community 
                      facilities, and improved quality of life;
                    ``(C) implement the approved regional investment 
                strategy;
                    ``(D) provide annual reports to the Secretary and 
                the National Board on progress made in achieving the 
                benchmarks of the regional investment strategy, 
                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.

    ``(b) Urban Areas.--A resident of an urban area may serve as an ex-
officio member of a Regional Board.
    ``(c) Duties.--A Regional Board shall--
            ``(1) create a collaborative planning process for public-
        private investment within a region;
            ``(2) develop, and submit to the Secretary for approval, a 
        regional investment strategy;
            ``(3) develop approaches that will create permanent 
        resources for philanthropic giving in the region, to the maximum 
        extent practicable;
            ``(4) implement an approved strategy; and
            ``(5) <<NOTE: Reports.>>  provide annual reports to the 
        Secretary and the National Board on progress made in achieving 
        the strategy, including an annual financial statement.

[[Page 122 STAT. 1189]]

``SEC. 385E. <<NOTE: 7 USC 2009dd-4.>>  REGIONAL INVESTMENT 
                          STRATEGY GRANTS.

    ``(a) In General.--The Secretary shall make regional investment 
strategy grants available to Regional Boards for use in developing, 
implementing, and maintaining regional investment strategies.
    ``(b) Regional Investment Strategy.--A regional investment strategy 
shall provide--
            ``(1) an assessment of the competitive advantage of a 
        region, including--
                    ``(A) an analysis of the economic conditions of the 
                region;
                    ``(B) an assessment of the current economic 
                performance of the region;
                    ``(C) an overview of the population, geography, 
                workforce, transportation system, resources, 
                environment, and infrastructure needs of the region; and
                    ``(D) such other pertinent information as the 
                Secretary may request;
            ``(2) an analysis of regional economic and community 
        development challenges and opportunities, including--
                    ``(A) incorporation of relevant material from other 
                government-sponsored or supported plans and consistency 
                with applicable State, regional, and local workforce 
                investment strategies or comprehensive economic 
                development plans; and
                    ``(B) an identification of past, present, and 
                projected Federal and State economic and community 
                development investments in the region;
            ``(3) a section describing goals and objectives necessary to 
        solve regional competitiveness challenges and meet the potential 
        of the region;
            ``(4) an overview of resources available in the region for 
        use in--
                    ``(A) establishing regional goals and objectives;
                    ``(B) developing and implementing a regional action 
                strategy;
                    ``(C) identifying investment priorities and funding 
                sources; and
                    ``(D) identifying lead organizations to execute 
                portions of the strategy;
            ``(5) an analysis of the current state of collaborative 
        public, private, and nonprofit participation and investment, and 
        of the strategic roles of public, private, and nonprofit 
        entities in the development and implementation of the regional 
        investment strategy;
            ``(6) a section identifying and prioritizing vital projects, 
        programs, and activities for consideration by the Secretary, 
        including--
                    ``(A) other potential funding sources; and
                    ``(B) recommendations for leveraging past and 
                potential investments;
            ``(7) a plan of action to implement the goals and objectives 
        of the regional investment strategy;
            ``(8) a list of performance measures to be used to evaluate 
        implementation of the regional investment strategy, including--

[[Page 122 STAT. 1190]]

                    ``(A) the number and quality of jobs, including 
                self-employment, created during implementation of the 
                regional rural investment strategy;
                    ``(B) the number and types of investments made in 
                the region;
                    ``(C) the growth in public, private, and nonprofit 
                investment in the human, community, and economic assets 
                of the region;
                    ``(D) changes in per capita income and the rate of 
                unemployment; and
                    ``(E) other changes in the economic environment of 
                the region;
            ``(9) a section outlining the methodology for use in 
        integrating the regional investment strategy with the economic 
        priorities of the State; and
            ``(10) such other information as the Secretary determines to 
        be appropriate.

    ``(c) Maximum Amount of Grant.--A regional investment strategy grant 
shall not exceed $150,000.
    ``(d) Cost Sharing.--
            ``(1) In general.--Subject to paragraph (2), of the share of 
        the costs of developing, maintaining, evaluating, implementing, 
        and reporting with respect to a regional investment strategy 
        funded by a grant under this section--
                    ``(A) not more than 40 percent may be paid using 
                funds from the grant; and
                    ``(B) the remaining share shall be provided by the 
                applicable Regional Board or other eligible grantee.
            ``(2) Form.--A Regional Board or other eligible grantee 
        shall pay the share described in paragraph (1)(B) in the form of 
        cash, services, materials, or other in-kind contributions, on 
        the condition that not more than 50 percent of that share is 
        provided in the form of services, materials, and other in-kind 
        contributions.
``SEC. 385F. <<NOTE: 7 USC 2009dd-5.>>  REGIONAL INNOVATION GRANTS 
                          PROGRAM.

    ``(a) Grants.--
            ``(1) In general.--The Secretary shall provide, on a 
        competitive basis, regional innovation grants to Regional Boards 
        for use in implementing projects and initiatives that are 
        identified in a regional rural investment strategy approved 
        under section 385E.
            ``(2) Timing.--After October 1, 2008, the Secretary shall 
        provide awards under this section on a quarterly funding cycle.

    ``(b) Eligibility.--To be eligible to receive a regional innovation 
grant, a Regional Board shall demonstrate to the Secretary that--
            ``(1) the regional rural investment strategy of a Regional 
        Board has been reviewed by the National Board prior to approval 
        by the Secretary;
            ``(2) the management and organizational structure of the 
        Regional Board is sufficient to oversee grant projects, 
        including management of Federal funds; and
            ``(3) the Regional Board has a plan to achieve, to the 
        maximum extent practicable, the performance-based benchmarks of 
        the project in the regional rural investment strategy.

    ``(c) Limitations.--

[[Page 122 STAT. 1191]]

            ``(1) Amount received.--A Regional Board may not receive 
        more than $6,000,000 in regional innovation grants under this 
        section during any 5-year period.
            ``(2) Determination of amount.--The Secretary shall 
        determine the amount of a regional innovation grant based on--
                    ``(A) the needs of the region being addressed by the 
                applicable regional rural investment strategy consistent 
                with the purposes described in subsection (f)(2); and
                    ``(B) the size of the geographical area of the 
                region.
            ``(3) Geographic diversity.--The Secretary shall ensure that 
        not more than 10 percent of funding made available under this 
        section is provided to Regional Boards in any State.

    ``(d) Cost-Sharing.--
            ``(1) Limitation.--Subject to paragraph (2), the amount of a 
        grant made under this section shall not exceed 50 percent of the 
        cost of the project.
            ``(2) Waiver of grantee share.--The Secretary may waive the 
        limitation in paragraph (1) under special circumstances, as 
        determined by the Secretary, including--
                    ``(A) a sudden or severe economic dislocation;
                    ``(B) significant chronic unemployment or poverty;
                    ``(C) a natural disaster; or
                    ``(D) other severe economic, social, or cultural 
                duress.
            ``(3) Other federal assistance.--For the purpose of 
        determining cost-share limitations for any other Federal 
        program, funds provided under this section shall be considered 
        to be non-Federal funds.

    ``(e) Preferences.--In providing regional innovation grants under 
this section, the Secretary shall give--
            ``(1) a high priority to strategies that demonstrate 
        significant leverage of capital and quality job creation; and
            ``(2) a preference to an application proposing projects and 
        initiatives that would--
                    ``(A) advance the overall regional competitiveness 
                of a region;
                    ``(B) address the priorities of a regional rural 
                investment strategy, including priorities that--
                          ``(i) promote cross-sector collaboration, 
                      public-private partnerships, or the provision of 
                      interim financing or seed capital for program 
                      implementation;
                          ``(ii) exhibit collaborative innovation and 
                      entrepreneurship, particularly within a public-
                      private partnership; and
                          ``(iii) represent a broad coalition of 
                      interests described in section 385D(a);
                    ``(C) include a strategy to leverage public non-
                Federal and private funds and existing assets, including 
                agricultural, natural resource, and public 
                infrastructure assets, with substantial emphasis placed 
                on the existence of real financial commitments to 
                leverage available funds;
                    ``(D) create quality jobs;
                    ``(E) enhance the role, relevance, and leveraging 
                potential of community and regional foundations in 
                support of regional investment strategies;

[[Page 122 STAT. 1192]]

                    ``(F) demonstrate a history, or involve 
                organizations with a history, of successful leveraging 
                of capital for economic development and public purposes;
                    ``(G) address gaps in existing basic services, 
                including technology, within a region;
                    ``(H) address economic diversification, including 
                agricultural and non-agriculturally based economies, 
                within a regional framework;
                    ``(I) improve the overall quality of life in the 
                region;
                    ``(J) enhance the potential to expand economic 
                development successes across diverse stakeholder groups 
                within the region;
                    ``(K) include an effective working relationship with 
                1 or more institutions of higher education, tribally 
                controlled colleges or universities, or tribal technical 
                institutions;
                    ``(L) help to meet the other regional 
                competitiveness needs identified by a Regional Board; or
                    ``(M) protect and promote rural heritage.

    ``(f) Uses.--
            ``(1) Leverage.--A Regional Board shall prioritize projects 
        and initiatives carried out using funds from a regional 
        innovation grant provided under this section, based in part on 
        the degree to which members of the Regional Board are able to 
        leverage additional funds for the implementation of the 
        projects.
            ``(2) Purposes.--A Regional Board may use a regional 
        innovation grant--
                    ``(A) to support the development of critical 
                infrastructure (including technology deployment and 
                services) necessary to facilitate the competitiveness of 
                a region;
                    ``(B) to provide assistance to entities within the 
                region that provide essential public and community 
                services;
                    ``(C) to enhance the value-added production, 
                marketing, and use of agricultural and natural resources 
                within the region, including activities relating to 
                renewable and alternative energy production and usage;
                    ``(D) to assist with entrepreneurship, job training, 
                workforce development, housing, educational, or other 
                quality of life services or needs, relating to the 
                development and maintenance of strong local and regional 
                economies;
                    ``(E) to assist in the development of unique new 
                collaborations that link public, private, and 
                philanthropic resources, including community 
                foundations;
                    ``(F) to provide support for business and 
                entrepreneurial investment, strategy, expansion, and 
                development, including feasibility strategies, technical 
                assistance, peer networks, business development funds, 
                and other activities to strengthen the economic 
                competitiveness of the region;
                    ``(G) to provide matching funds to enable community 
                foundations located within the region to build 
                endowments which provide permanent philanthropic 
                resources to implement a regional investment strategy; 
                and
                    ``(H) to preserve and promote rural heritage.
            ``(3) Availability of funds.--The funds made available to a 
        Regional Board or any other eligible grantee through a regional 
        innovation grant shall remain available for the 7-year period 
        beginning on the date on which the award is provided, on the 
        condition that the Regional Board or other

[[Page 122 STAT. 1193]]

        grantee continues to be certified by the Secretary as making 
        adequate progress toward achieving established benchmarks.

    ``(g) Cost Sharing.--
            ``(1) Waiver of grantee share.--The Secretary may waive the 
        share of a grantee of the costs of a project funded by a 
        regional innovation grant under this section if the Secretary 
        determines that such a waiver is appropriate, including with 
        respect to special circumstances within tribal regions, in the 
        event an area experiences--
                    ``(A) a sudden or severe economic dislocation;
                    ``(B) significant chronic unemployment or poverty;
                    ``(C) a natural disaster; or
                    ``(D) other severe economic, social, or cultural 
                duress.
            ``(2) Other federal programs.--For the purpose of 
        determining cost-sharing requirements for any other Federal 
        program, funds provided as a regional innovation grant under 
        this section shall be considered to be non-Federal funds.

    ``(h) Noncompliance.--If a Regional Board or other eligible grantee 
fails to comply with any requirement relating to the use of funds 
provided under this section, the Secretary may--
            ``(1) take such actions as are necessary to obtain 
        reimbursement of unused grant funds; and
            ``(2) reprogram the recaptured funds for purposes relating 
        to implementation of this subtitle.

    ``(i) Priority to Areas With Awards and Approved Strategies.--
            ``(1) In general.--Subject to paragraph (3), in providing 
        rural development assistance under other programs, the Secretary 
        shall give a high priority to areas that receive innovation 
        grants under this section.
            ``(2) Consultation.--The Secretary shall consult with the 
        heads of other Federal agencies to promote the development of 
        priorities similar to those described in paragraph (1).
            ``(3) Exclusion of certain programs.--Paragraph (1) shall 
        not apply to the provision of rural development assistance under 
        any program relating to basic health, safety, or infrastructure, 
        including broadband deployment or minimum environmental needs.
``SEC. 385G. <<NOTE: 7 USC 2009dd-6.>>  RURAL ENDOWMENT LOANS 
                          PROGRAM.

    ``(a) In General.--The Secretary may provide long-term loans to 
eligible community foundations to assist in the implementation of 
regional investment strategies.
    ``(b) Eligible Community Foundations.--To be eligible to receive a 
loan under this section, a community foundation shall--
            ``(1) be located in an area that is covered by a regional 
        investment strategy;
            ``(2) match the amount of the loan with an amount that is at 
        least 250 percent of the amount of the loan; and
            ``(3) use the loan and the matching amount to carry out the 
        regional investment strategy in a manner that is targeted to 
        community and economic development, including through the 
        development of community foundation endowments.

    ``(c) Terms.--A loan made under this section shall--
            ``(1) have a term of not less than 10, nor more than 20, 
        years;
            ``(2) bear an interest rate of 1 percent per annum; and

[[Page 122 STAT. 1194]]

            ``(3) be subject to such other terms and conditions as are 
        determined appropriate by the Secretary.
``SEC. 385H. <<NOTE: 7 USC 2009dd-7.>>  AUTHORIZATION OF 
                          APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this subtitle 
$135,000,000 for the period of fiscal years 2009 through 2012.''.
SEC. 6029. 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 in effect on 
the date of enactment of this Act.
    (b) Use of Funds.--Subject to subsection (c), the Secretary 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 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 2007 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 to 
carry out this section $120,000,000, to remain available until expended.

[[Page 122 STAT. 1195]]

              Subtitle B--Rural Electrification Act of 1936

SEC. 6101. ENERGY EFFICIENCY PROGRAMS.

    Sections 2(a) and 4 of the Rural Electrification Act of 1936 (7 
U.S.C. 902(a), 904) are amended by inserting ``efficiency and'' before 
``conservation'' each place it appears.
SEC. 6102. REINSTATEMENT OF RURAL UTILITY SERVICES DIRECT LENDING.

    (a) In General.--Section 4 of the Rural Electrification Act of 1936 
(7 U.S.C. 904) is amended--
            (1) by designating the first, second, and third sentences as 
        subsections (a), (b), and (d), respectively; and
            (2) by inserting after subsection (b) (as so designated) the 
        following:

    ``(c) Direct Loans.--
            ``(1) Direct hardship loans.--Direct hardship loans under 
        this section shall be for the same purposes and on the same 
        terms and conditions as hardship loans made under section 
        305(c)(1).
            ``(2) Other direct loans.--All other direct loans under this 
        section shall bear interest at a rate equal to the then current 
        cost of money to the Government of the United States for loans 
        of similar maturity, plus \1/8\ of 1 percent.''.

    (b) Elimination of Federal Financing Bank Guaranteed Loans.--Section 
306 of the Rural Electrification Act of 1936 (7 U.S.C. 936) is amended--
            (1) in the third sentence, by striking ``guarantee, 
        accommodation, or subordination'' and inserting ``accommodation 
        or subordination''; and
            (2) by striking the fourth sentence.
SEC. 6103. DEFERMENT OF PAYMENTS TO ALLOWS LOANS FOR IMPROVED 
                          ENERGY EFFICIENCY AND DEMAND REDUCTION 
                          AND FOR ENERGY EFFICIENCY AND USE 
                          AUDITS.

    Section 12 of the Rural Electrification Act of 1936 (7 U.S.C. 912) 
is amended by adding at the end the following:
    ``(c) Deferment of Payments on Loans.--
            ``(1) In general.--The Secretary shall allow borrowers to 
        defer payment of principal and interest on any direct loan made 
        under this Act to enable the borrower to make loans to 
        residential, commercial, and industrial consumers--
                    ``(A) to conduct energy efficiency and use audits; 
                and
                    ``(B) to install energy efficient measures or 
                devices that reduce the demand on electric systems.
            ``(2) Amount.--The total amount of a deferment under this 
        subsection shall not exceed the sum of the principal and 
        interest on the loans made to a customer of the borrower, as 
        determined by the Secretary.
            ``(3) Term.--The term of a deferment under this subsection 
        shall not exceed 60 months.''.
SEC. 6104. RURAL ELECTRIFICATION ASSISTANCE.

    Section 13 of the Rural Electrification Act of 1936 (7 U.S.C. 913) 
is amended to read as follows:

[[Page 122 STAT. 1196]]

``SEC. 13. DEFINITIONS.

    ``In this Act:
            ``(1) Farm.--The term `farm' means a farm, as defined by the 
        Bureau of the Census.
            ``(2) 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).
            ``(3) Rural area.--Except as provided otherwise in this Act, 
        the term `rural area' means the farm and nonfarm population of--
                    ``(A) any area described in section 343(a)(13)(C) of 
                the Consolidated Farm and Rural Development Act (7 
                U.S.C. 1991(a)(13)(C)); and
                    ``(B) any area within a service area of a borrower 
                for which a borrower has an outstanding loan made under 
                titles I through V as of the date of enactment of this 
                paragraph.
            ``(4) Territory.--The term `territory' includes any insular 
        possession of the United States.
            ``(5) Secretary.--The term `Secretary' means the Secretary 
        of Agriculture.''.
SEC. 6105. <<NOTE: 7 USC 936f.>>  SUBSTANTIALLY UNDERSERVED TRUST 
                          AREAS.

    The Rural Electrification Act of 1936 is amended by inserting after 
section 306E (7 U.S.C. 936e) the following:
``SEC. 306F. SUBSTANTIALLY UNDERSERVED TRUST AREAS.

    ``(a) Definitions.--In this section:
            ``(1) Eligible program.--The term `eligible program' means a 
        program administered by the Rural Utilities Service and 
        authorized in--
                    ``(A) this Act; or
                    ``(B) paragraph (1), (2), (14), (22), or (24) of 
                section 306(a) or section 306A, 306C, 306D, or 306E of 
                the Consolidated Farm and Rural Development Act (7 
                U.S.C. 1926(a), 1926a, 1926c, 1926d, 1926e).
            ``(2) Substantially underserved trust area.--The term 
        `substantially underserved trust area' means a community in 
        `trust land' (as defined in section 3765 of title 38, United 
        States Code) with respect to which the Secretary determines has 
        a high need for the benefits of an eligible program.

    ``(b) Initiative.--The Secretary, in consultation with local 
governments and Federal agencies, may implement an initiative to 
identify and improve the availability of eligible programs in 
communities in substantially underserved trust areas.
    ``(c) Authority of Secretary.--In carrying out subsection (b), the 
Secretary--
            ``(1) may make available from loan or loan guarantee 
        programs administered by the Rural Utilities Service to 
        qualified utilities or applicants financing with an interest 
        rate as low as 2 percent, and with extended repayment terms;
            ``(2) <<NOTE: Waiver authority.>>  may waive nonduplication 
        restrictions, matching fund requirements, or credit support 
        requirements from any loan or grant program administered by the 
        Rural Utilities Service to facilitate the construction, 
        acquisition, or improvement of infrastructure;

[[Page 122 STAT. 1197]]

            ``(3) may give the highest funding priority to designated 
        projects in substantially underserved trust areas; and
            ``(4) shall only make loans or loan guarantees that are 
        found to be financially feasible and that provide eligible 
        program benefits to substantially underserved trust areas.

    ``(d) Report.--Not later than 1 year after the date of enactment of 
this section and annually thereafter, the Secretary shall submit to 
Congress a report that describes--
            ``(1) the progress of the initiative implemented under 
        subsection (b); and
            ``(2) <<NOTE: Recommen- dations.>>  recommendations for any 
        regulatory or legislative changes that would be appropriate to 
        improve services to substantially underserved trust areas.''.
SEC. 6106. GUARANTEES FOR BONDS AND NOTES ISSUED FOR 
                          ELECTRIFICATION OR TELEPHONE PURPOSES.

    (a) In General.--Section 313A of the Rural Electrification Act of 
1936 (7 U.S.C. 940c-1) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1), by striking ``for 
                electrification'' and all that follows through the end 
                and inserting ``for eligible electrification or 
                telephone purposes consistent with this Act.''; and
                    (B) by striking paragraph (4) and inserting the 
                following:
            ``(4) Annual amount.--The total amount of guarantees 
        provided by the Secretary under this section during a fiscal 
        year shall not exceed $1,000,000,000, subject to the 
        availability of funds under subsection (e).'';
            (2) in subsection (c), by striking paragraphs (2) and (3) 
        and inserting the following:
            ``(2) Amount.--
                    ``(A) In general.--The amount of the 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.
                    ``(B) Prohibition.--Except as otherwise provided in 
                this subsection and subsection (e)(2), no other fees 
                shall be assessed.
            ``(3) Payment.--
                    ``(A) In general.--A lender shall pay the fees 
                required under this subsection on a semiannual basis.
                    ``(B) Structured schedule.--The Secretary shall, 
                with the consent of the lender, structure the schedule 
                for payment of the fee to ensure that sufficient funds 
                are available to pay the subsidy costs for note or bond 
                guarantees as provided for in subsection (e)(2).''; and
            (3) in subsection (f), by striking ``2007'' and inserting 
        ``2012''.

    (b) <<NOTE: 7 USC 940c-1 note.>>  Administration.--The Secretary 
shall continue to carry out section 313A of the Rural Electrification 
Act of 1936 (7 U.S.C. 940c-1) in the same manner as on the day before 
the date of enactment of this Act, except without regard to the 
limitations prescribed in subsection (b)(1) of that section, until such 
time as any regulations necessary to carry out the amendments made by 
this section are fully implemented.

[[Page 122 STAT. 1198]]

SEC. 6107. EXPANSION OF 911 ACCESS.

    Section 315 of the Rural Electrification Act of 1936 (7 U.S.C. 940e) 
is amended to read as follows:
``SEC. 315. EXPANSION OF 911 ACCESS.

    ``(a) In General.--Subject to subsection (c) and such terms and 
conditions as the Secretary may prescribe, the Secretary may make loans 
under this title to entities eligible to borrow from 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 in rural areas--
            ``(1) 911 access;
            ``(2) integrated interoperable emergency communications, 
        including multiuse networks that provide commercial or 
        transportation information services in addition to emergency 
        communications services;
            ``(3) homeland security communications;
            ``(4) transportation safety communications; or
            ``(5) location technologies used outside an urbanized area.

    ``(b) Loan Security.--Government-imposed fees related to emergency 
communications (including State or local 911 fees) may be considered to 
be security for a loan under this section.
    ``(c) Emergency Communications Equipment Providers.--The Secretary 
may make a loan under this section to an emergency communication 
equipment provider to expand or improve 911 access or other 
communications or technologies described in subsection (a) if the local 
government that has jurisdiction over the project is not allowed to 
acquire the debt resulting from the loan.
    ``(d) Authorization of Appropriations.--The Secretary shall use to 
make loans under this section any funds otherwise made available for 
telephone loans for each of fiscal years 2008 through 2012.''.
SEC. 6108. ELECTRIC LOANS FOR RENEWABLE ENERGY.

    Title III of the Rural Electrification Act of 1936 is amended by 
inserting after section 316 (7 U.S.C. 940f) the following:
``SEC. 317. <<NOTE: 7 USC 940g.>>  ELECTRIC LOANS FOR RENEWABLE 
                        ENERGY.

    ``(a) Definition of Renewable Energy Source.--In this section, the 
term `renewable energy source' means an energy conversion system fueled 
from a solar, wind, hydropower, biomass, or geothermal source of energy.
    ``(b) Loans.--In addition to any other funds or authorities 
otherwise made available under this Act, the Secretary may make electric 
loans under this title for electric generation from renewable energy 
resources for resale to rural and nonrural residents.
    ``(c) Rate.--The rate of a loan under this section shall be equal to 
the average tax-exempt municipal bond rate of similar maturities.''.
SEC. 6109. BONDING REQUIREMENTS.

    Title III of the Rural Electrification Act of 1936 is amended by 
inserting after section 317 (as added by section 6108) the following:

[[Page 122 STAT. 1199]]

``SEC. 318. <<NOTE: 7 USC 940h.>>  BONDING REQUIREMENTS.

    ``The <<NOTE: Review.>>  Secretary shall review the bonding 
requirements for all programs administered by the Rural Utilities 
Service under this Act to ensure that bonds are not required if--
            ``(1) the interests of the Secretary are adequately 
        protected by product warranties; or
            ``(2) the costs or conditions associated with a bond exceed 
        the benefit of the bond.''.
SEC. 6110. ACCESS TO BROADBAND TELECOMMUNICATIONS SERVICES IN 
                          RURAL AREAS.

    (a) In General.--Section 601 of the Rural Electrification Act of 
1936 (7 U.S.C. 950bb) is amended to read as follows:
``SEC. 601. <<NOTE: Loans.>>  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 rural areas.
    ``(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 service 
        to originate and receive high-quality voice, data, graphics, and 
        video.
            ``(2) Incumbent service provider.--The term `incumbent 
        service provider', with respect to an application submitted 
        under this section, means an entity that, as of the date of 
        submission of the application, is providing broadband service to 
        not less than 5 percent of the households in the service 
        territory proposed in the application.
            ``(3) Rural area.--
                    ``(A) In general.--The term `rural area' means any 
                area other than--
                          ``(i) an area described in clause (i) or (ii) 
                      of section 343(a)(13)(A) of the Consolidated Farm 
                      and Rural Development Act (7 U.S.C. 
                      1991(a)(13)(A)); and
                          ``(ii) a city, town, or incorporated area that 
                      has a population of greater than 20,000 
                      inhabitants.
                    ``(B) Urban area growth.--The Secretary may, by 
                regulation only, consider an area described in section 
                343(a)(13)(F)(i)(I) of that Act to not be a rural area 
                for purposes of this section.

    ``(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 rural areas.
            ``(2) Priority.--In making or guaranteeing loans under 
        paragraph (1), the Secretary shall give the highest priority to 
        applicants that offer to provide broadband service to the 
        greatest proportion of households that, prior to the provision 
        of the broadband service, had no incumbent service provider.

    ``(d) Eligibility.--
            ``(1) Eligible entities.--

[[Page 122 STAT. 1200]]

                    ``(A) In general.--To be eligible to obtain a loan 
                or loan guarantee under this section, an entity shall--
                          ``(i) demonstrate the ability to furnish, 
                      improve, or extend a broadband service to a rural 
                      area;
                          ``(ii) submit to the Secretary a loan 
                      application at such time, in such manner, and 
                      containing such information as the Secretary may 
                      require; and
                          ``(iii) <<NOTE: Deadline.>>  agree to complete 
                      buildout of the broadband service described in the 
                      loan application by not later than 3 years after 
                      the initial date on which proceeds from the loan 
                      made or guaranteed under this section are made 
                      available.
                    ``(B) Limitation.--An eligible entity that provides 
                telecommunications or broadband service to at least 20 
                percent of the households in the United States may not 
                receive an amount of funds under this section for a 
                fiscal year in excess of 15 percent of the funds 
                authorized and appropriated under subsection (k) for the 
                fiscal year.
            ``(2) Eligible projects.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), the proceeds of a loan made 
                or guaranteed under this section may be used to carry 
                out a project in a proposed service territory only if, 
                as of the date on which the application for the loan or 
                loan guarantee is submitted--
                          ``(i) not less than 25 percent of the 
                      households in the proposed service territory is 
                      offered broadband service by not more than 1 
                      incumbent service provider; and
                          ``(ii) broadband service is not provided in 
                      any part of the proposed service territory by 3 or 
                      more incumbent service providers.
                    ``(B) Exception to 25 percent requirement.--
                Subparagraph (A)(i) shall not apply to the proposed 
                service territory of a project if a loan or loan 
                guarantee has been made under this section to the 
                applicant to provide broadband service in the proposed 
                service territory.
                    ``(C) Exception to 3 or more incumbent service 
                provider requirement.--
                          ``(i) In general.--Except as provided in 
                      clause (ii), subparagraph (A)(ii) shall not apply 
                      to an incumbent service provider that is upgrading 
                      broadband service to the existing territory of the 
                      incumbent service provider.
                          ``(ii) Exception.--Clause (i) shall not apply 
                      if the applicant is eligible for funding under 
                      another title of this Act.
            ``(3) Equity and market survey requirements.--
                    ``(A) In general.--The Secretary may require an 
                entity to provide a cost share in an amount not to 
                exceed 10 percent of the amount of the loan or loan 
                guarantee requested in the application of the entity, 
                unless the Secretary determines that a higher percentage 
                is required for financial feasibility.
                    ``(B) Market survey.--
                          ``(i) In general.--The Secretary may require 
                      an entity that proposes to have a subscriber 
                      projection

[[Page 122 STAT. 1201]]

                      of more than 20 percent of the broadband service 
                      market in a rural area to submit to the Secretary 
                      a market survey.
                          ``(ii) Less than 20 percent.--The Secretary 
                      may not require an entity that proposes to have a 
                      subscriber projection of less than 20 percent of 
                      the broadband service market in a rural area to 
                      submit to the Secretary a market survey.
            ``(4) State and local governments and indian tribes.--
        Subject to paragraph (1), a State or local government (including 
        any agency, subdivision, or instrumentality thereof (including 
        consortia thereof)) and an Indian tribe shall be eligible for a 
        loan or loan guarantee under this section to provide broadband 
        services to a rural area.
            ``(5) <<NOTE: Publication.>>  Notice requirement.--The 
        Secretary shall publish a notice of each application for a loan 
        or loan guarantee under this section describing the application, 
        including--
                    ``(A) the identity of the applicant;
                    ``(B) each area proposed to be served by the 
                applicant; and
                    ``(C) the estimated number of households without 
                terrestrial-based broadband service in those areas.
            ``(6) Paperwork reduction.--The Secretary shall take steps 
        to reduce, to the maximum extent practicable, the cost and 
        paperwork associated with applying for a loan or loan guarantee 
        under this section by first-time applicants (particularly first-
        time applicants who are small and start-up broadband service 
        providers), including by providing for a new application that 
        maintains the ability of the Secretary to make an analysis of 
        the risk associated with the loan involved.
            ``(7) Preapplication process.--The Secretary shall establish 
        a process under which a prospective applicant may seek a 
        determination of area eligibility prior to preparing a loan 
        application under this section.

    ``(e) Broadband Service.--
            ``(1) In general.--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).
            ``(2) Prohibition.--The Secretary shall not establish 
        requirements for bandwidth or speed that have the effect of 
        precluding the use of evolving technologies appropriate for 
        rural areas.

    ``(f) Technological Neutrality.--For purposes of determining whether 
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.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, a loan or loan guarantee under this section shall--
                    ``(A) bear interest at an annual rate of, as 
                determined by the Secretary--
                          ``(i) in the case of a direct loan, a rate 
                      equivalent to--

[[Page 122 STAT. 1202]]

                                    ``(I) the cost of borrowing to the 
                                Department of the Treasury for 
                                obligations of comparable maturity; or
                                    ``(II) 4 percent; and
                          ``(ii) in the case of a guaranteed loan, the 
                      current applicable market rate for a loan of 
                      comparable maturity; and
                    ``(B) have a term of such length, not exceeding 35 
                years, as the borrower may request, if the Secretary 
                determines that the loan is adequately secured.
            ``(2) Term.--In determining the term of a loan or loan 
        guarantee, the Secretary shall consider whether the recipient is 
        or would be serving an area that is not receiving broadband 
        services.
            ``(3) Recurring revenue.--The Secretary shall consider the 
        existing recurring revenues of the entity at the time of 
        application in determining an adequate level of credit support.

    ``(h) Adequacy of Security.--
            ``(1) In general.--The Secretary shall ensure that the type 
        and amount of, and method of security used to secure, any loan 
        or loan guarantee under this section is commensurate to the risk 
        involved with the loan or loan guarantee, particularly in any 
        case in which the loan or loan guarantee is issued to a 
        financially strong and stable entity, as determined by the 
        Secretary.
            ``(2) Determination of amount and method of security.--In 
        determining the amount of, and method of security used to 
        secure, a loan or loan guarantee under this section, the 
        Secretary shall consider reducing the security in a rural area 
        that does not have broadband service.

    ``(i) 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 support the construction, improvement, or acquisition of facilities 
and equipment for the provision of broadband service in rural areas.
    ``(j) Reports.--Not later than 1 year after the date of enactment of 
the Food, Conservation, and Energy Act of 2008, and annually thereafter, 
the Administrator shall submit to Congress a report that describes the 
extent of participation in the loan and loan guarantee program under 
this section for the preceding fiscal year, including a description of 
--
            ``(1) the number of loans applied for and provided under 
        this section;
            ``(2)(A) the communities proposed to be served in each loan 
        application submitted for the fiscal year; and
            ``(B) the communities served by projects funded by loans and 
        loan guarantees provided under this section;
            ``(3) the period of time required to approve each loan 
        application under this section;
            ``(4) any outreach activities carried out by the Secretary 
        to encourage entities in rural areas without broadband service 
        to submit applications under this section;

[[Page 122 STAT. 1203]]

            ``(5) the method by which the Secretary determines that a 
        service enables a subscriber to originate and receive high-
        quality voice, data, graphics, and video for purposes of 
        subsection (b)(1); and
            ``(6) each broadband service, including the type and speed 
        of broadband service, for which assistance was sought, and each 
        broadband service for which assistance was provided, under this 
        section.

    ``(k) Funding.--
            ``(1) Authorization of appropriations.--There is authorized 
        to be appropriated to the Secretary to carry out this section 
        $25,000,000 for each of fiscal years 2008 through 2012, to 
        remain available until expended.
            ``(2) Allocation of funds.--
                    ``(A) In general.--From amounts made available for 
                each fiscal year under this subsection, the Secretary 
                shall--
                          ``(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--
                          ``(i) the number of communities with a 
                      population of 2,500 inhabitants or less in the 
                      State; bears to
                          ``(ii) the number of communities with a 
                      population of 2,500 inhabitants or less in all 
                      States.
                    ``(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.

    ``(l) Termination of Authority.--No loan or loan guarantee may be 
made under this section after September 30, 2012.''.
    (b) <<NOTE: 7 USC 950bb note.>>  Regulations.--The Secretary may 
implement the amendment made by subsection (a) through the promulgation 
of an interim regulation.

    (c) <<NOTE: 7 USC 950bb note.>>  Application.--The amendment made by 
subsection (a) shall not apply to--
            (1) an application submitted under section 601 of the Rural 
        Electrification Act of 1936 (7 U.S.C. 950bb) (as it existed 
        before the amendment made by subsection (a)) that--
                    (A) was pending on the date that is 45 days prior to 
                the date of enactment of this Act; and
                    (B) is pending on the date of enactment of this Act; 
                or
            (2) a petition for reconsideration of a decision on an 
        application described in paragraph (1).
SEC. 6111. NATIONAL CENTER FOR RURAL TELECOMMUNICATIONS 
                          ASSESSMENT.

    Title VI of the Rural Electrification Act of 1936 (7 U.S.C. 950bb et 
seq.) is amended by adding at the end the following:

[[Page 122 STAT. 1204]]

``SEC. 602. <<NOTE: 7 USC 950bb-1.>>  NATIONAL CENTER FOR RURAL 
                        TELECOMMUNICATIONS ASSESSMENT.

    ``(a) Designation of Center.--The Secretary shall designate an 
entity to serve as the National Center for Rural Telecommunications 
Assessment (referred to in this section as the `Center').
    ``(b) Criteria.--In designating the Center under subsection (a), the 
Secretary shall take into consideration the following criteria:
            ``(1) The Center shall be an entity that demonstrates to the 
        Secretary--
                    ``(A) a focus on rural policy research; and
                    ``(B) a minimum of 5 years of experience relating to 
                rural telecommunications research and assessment.
            ``(2) The Center shall be capable of assessing broadband 
        services in rural areas.
            ``(3) The Center shall have significant experience involving 
        other rural economic development centers and organizations with 
        respect to the assessment of rural policies and the formulation 
        of policy solutions at the Federal, State, and local levels.

    ``(c) Board of Directors.--The Center shall be managed by a board of 
directors, which shall be responsible for the duties of the Center 
described in subsection (d).
    ``(d) Duties.--The Center shall--
            ``(1) assess the effectiveness of programs carried out under 
        this title in increasing broadband penetration and purchase in 
        rural areas, especially in rural communities identified by the 
        Secretary as having no broadband service before the provision of 
        a loan or loan guarantee under this title;
            ``(2) work with existing rural development centers selected 
        by the Center to identify policies and initiatives at the 
        Federal, State, and local levels that have increased broadband 
        penetration and purchase in rural areas and provide 
        recommendations to Federal, State, and local policymakers on 
        effective strategies to bring affordable broadband services to 
        residents of rural areas, particularly residents located outside 
        of the municipal boundaries of a rural city or town; and
            ``(3) <<NOTE: Publication. Reports.>>  develop and publish 
        reports describing the activities carried out by the Center 
        under this section.

    ``(e) Reporting Requirements.--Not later than December 1 of each 
applicable fiscal year, the board of directors of the Center shall 
submit to Congress and the Secretary a report describing the activities 
carried out by the Center during the preceding fiscal year and the 
results of any research conducted by the Center during that fiscal year, 
including--
            ``(1) an assessment of each program carried out under this 
        title; and
            ``(2) an assessment of the effects of the policy initiatives 
        identified under subsection (d)(2).

    ``(f) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary to carry out this section $1,000,000 for 
each of fiscal years 2008 through 2012.''.
SEC. 6112. COMPREHENSIVE RURAL BROADBAND STRATEGY.

    (a) In General.--Not <<NOTE: Deadline. Reports.>>  later than 1 year 
after the date of enactment of this Act, the Chairman of the Federal 
Communications Commission, in coordination with the Secretary, shall 
submit to Congress a report describing a comprehensive rural broadband 
strategy that includes--

[[Page 122 STAT. 1205]]

            (1) recommendations--
                    (A) to promote interagency coordination of Federal 
                agencies in regards to policies, procedures, and 
                targeted resources, and to streamline or otherwise 
                improve and streamline the policies, programs, and 
                services;
                    (B) to coordinate existing Federal rural broadband 
                or rural initiatives;
                    (C) to address both short- and long-term needs 
                assessments and solutions for a rapid build-out of rural 
                broadband solutions and application of the 
                recommendations for Federal, State, regional, and local 
                government policymakers; and
                    (D) to identify how specific Federal agency programs 
                and resources can best respond to rural broadband 
                requirements and overcome obstacles that currently 
                impede rural broadband deployment; and
            (2) a description of goals and timeframes to achieve the 
        purposes of the report.

    (b) Updates.--The <<NOTE: Deadline.>>  Chairman of the Federal 
Communications Commission, in coordination with the Secretary, shall 
update and evaluate the report described in subsection (a) during the 
third year after the date of enactment of this Act.
SEC. 6113. STUDY ON RURAL ELECTRIC POWER GENERATION.

    (a) In General.--The Secretary shall conduct a study on the electric 
power generation needs in rural areas of the United States.
    (b) Components.--The study shall include an examination of--
            (1) generation in various areas in rural areas of the United 
        States, particularly by rural electric cooperatives;;
            (2) financing available for capacity, including financing 
        available through programs authorized under the Rural 
        Electrification Act of 1936 (7 U.S.C. 901 et seq.);
            (3) the impact of electricity costs on consumers and local 
        economic development;
            (4) the ability of fuel feedstock technology to meet 
        regulatory requirements, such as carbon capture and 
        sequestration; and
            (5) any other factors that the Secretary considers 
        appropriate.

    (c) Report.--Not later than 60 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 containing the findings 
of the study under this section.

                        Subtitle C--Miscellaneous

SEC. 6201. DISTANCE LEARNING AND TELEMEDICINE.

    (a) In General.--Section 2333(c)(1) of the Food, Agriculture, 
Conservation and Trade Act of 1990 (7 U.S.C. Sec. 950aaa-2(a)(1)) is 
amended--
            (1) in subparagraph (A), by striking ``and'' at the end;
            (2) in subparagraph (B), by striking the period at the end 
        and inserting a semicolon; and
            (3) by adding at the end the following:
                    ``(C) libraries.''.

[[Page 122 STAT. 1206]]

    (b) Authorization of Appropriations.--Section 2335A of the Food, 
Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 950aaa-5) is 
amended by striking ``2007'' and inserting ``2012''.
    (c) Conforming Amendment.--Section 1(b) of Public Law 102-551 (7 
U.S.C. 950aaa note; Public Law 102-551) is amended by striking ``2007'' 
and inserting ``2012''.
SEC. 6202. VALUE-ADDED AGRICULTURAL MARKET DEVELOPMENT PROGRAM 
                          GRANTS.

    (a) Definitions.--Section 231 of the Agricultural Risk Protection 
Act of 2000 (7 U.S.C. 1621 note; Public Law 106-224) is amended by 
striking subsection (a) and inserting the following:
    ``(a) Definitions.--In this section:
            ``(1) Beginning farmer or rancher.--The term `beginning 
        farmer or rancher' has the meaning given the term in section 
        343(a) of the Consolidated Farm and Rural Development Act (7 
        U.S.C. 1991(a)).
            ``(2) Family farm.--The term `family farm' has the meaning 
        given the term in section 761.2 of title 7, Code of Federal 
        Regulations (as in effect on December 30, 2007).
            ``(3) Mid-tier value chain.--The term `mid-tier value chain' 
        means local and regional supply networks that link independent 
        producers with businesses and cooperatives that market value-
        added agricultural products in a manner that--
                    ``(A) targets and strengthens the profitability and 
                competitiveness of small and medium-sized farms and 
                ranches that are structured as a family farm; and
                    ``(B) obtains agreement from an eligible 
                agricultural producer group, farmer or rancher 
                cooperative, or majority-controlled producer-based 
                business venture that is engaged in the value chain on a 
                marketing strategy.
            ``(4) Socially disadvantaged farmer or rancher.--The term 
        `socially disadvantaged farmer or rancher' has the meaning given 
        the term in section 355(e) of the Consolidated Farm and Rural 
        Development Act (7 U.S.C. 2003(e)).
            ``(5) Value-added agricultural product.--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;
                    ``(iii) is physically segregated in a manner that 
                results in the enhancement of the value of the 
                agricultural commodity or product;
                    ``(iv) is a source of farm- or ranch-based renewable 
                energy, including E-85 fuel; or
                    ``(v) is aggregated and marketed as a locally-
                produced agricultural food product; and
            ``(B) as a result of the change in physical state or the 
        manner in which the agricultural commodity or product was 
        produced, marketed, or segregated--
                    ``(i) the customer base for the agricultural 
                commodity or product is expanded; and
                    ``(ii) a greater portion of the revenue derived from 
                the marketing, processing, or physical segregation of 
                the

[[Page 122 STAT. 1207]]

                agricultural commodity or product is available to the 
                producer of the commodity or product.''.

    (b) Grant Program.--Section 231(b) of the Agricultural Risk 
Protection Act of 2000 (7 U.S.C. 1621 note; Public Law 106-224) is 
amended--
            (1) in paragraph (1), by striking ``paragraph (4)'' and 
        inserting ``paragraph (7)''; and
            (2) by striking paragraph (4) and inserting the following:
            ``(4) Term.--A grant under this subsection shall have a term 
        that does not exceed 3 years.
            ``(5) Simplified application.--The Secretary shall offer a 
        simplified application form and process for project proposals 
        requesting less than $50,000.
            ``(6) Priority.--In awarding grants under this subsection, 
        the Secretary shall give priority to projects that contribute to 
        increasing opportunities for--
                    ``(A) beginning farmers or ranchers;
                    ``(B) socially disadvantaged farmers or ranchers; 
                and
                    ``(C) operators of small- and medium-sized farms and 
                ranches that are structured as a family farm.
            ``(7) Funding.--
                    ``(A) Mandatory funding.--On October 1, 2008, 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) Discretionary funding.--There is authorized to 
                be appropriated to carry out this subsection $40,000,000 
                for each of fiscal years 2008 through 2012.
                    ``(C) Reservation of funds for projects to benefit 
                beginning farmers or ranchers, socially disadvantaged 
                farmers or ranchers, and mid-tier value chains.--
                          ``(i) In general.--The Secretary shall reserve 
                      10 percent of the amounts made available for each 
                      fiscal year under this paragraph to fund projects 
                      that benefit beginning farmers or ranchers or 
                      socially disadvantaged farmers or ranchers.
                          ``(ii) Mid-tier value chains.--The Secretary 
                      shall reserve 10 percent of the amounts made 
                      available for each fiscal year under this 
                      paragraph to fund applications of eligible 
                      entities described in paragraph (1) that propose 
                      to develop mid-tier value chains.
                          ``(iii) Unobligated amounts.--Any amounts in 
                      the reserves for a fiscal year established under 
                      clauses (i) and (ii) that are not obligated by 
                      June 30 of the fiscal year shall be available to 
                      the Secretary to make grants under this subsection 
                      to eligible entities in any State, as determined 
                      by the Secretary.''.
SEC. 6203. AGRICULTURE INNOVATION CENTER DEMONSTRATION PROGRAM.

    Section 6402 of the Farm Security and Rural Investment Act of 2002 
(7 U.S.C. 1621 note; Public Law 107-171) is amended by striking 
subsection (i) and inserting the following:
    ``(i) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary to carry out this section $6,000,000 for 
each of fiscal years 2008 through 2012.''.

[[Page 122 STAT. 1208]]

SEC. 6204. RURAL FIREFIGHTERS AND EMERGENCY MEDICAL SERVICE 
                          ASSISTANCE PROGRAM.

    Section 6405 of the Farm Security and Rural Investment Act of 2002 
(7 U.S.C. 2655) is amended to read as follows:
``SEC. 6405. RURAL FIREFIGHTERS AND EMERGENCY MEDICAL SERVICE 
                          ASSISTANCE PROGRAM.

    ``(a) Definition of Emergency Medical Services.--In this section:
            ``(1) In general.--The term `emergency medical services' 
        means resources used by a public or nonprofit entity to deliver 
        medical care outside of a medical facility under emergency 
        conditions that occur as a result of--
                    ``(A) the condition of a patient; or
                    ``(B) a natural disaster or related condition.
            ``(2) Inclusion.--The term `emergency medical services' 
        includes services (whether compensated or volunteer) delivered 
        by an emergency medical services provider or other provider 
        recognized by the State involved that is licensed or certified 
        by the State as--
                    ``(A) an emergency medical technician or the 
                equivalent (as determined by the State);
                    ``(B) a registered nurse;
                    ``(C) a physician assistant; or
                    ``(D) a physician that provides services similar to 
                services provided by such an emergency medical services 
                provider.

    ``(b) Grants.--The Secretary shall award grants to eligible 
entities--
            ``(1) to enable the entities to provide for improved 
        emergency medical services in rural areas; and
            ``(2) 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.

    ``(c) Eligibility.--To be eligible to receive a grant under this 
section, an entity shall--
            ``(1) be--
                    ``(A) a State emergency medical services office;
                    ``(B) a State emergency medical services 
                association;
                    ``(C) a State office of rural health or an 
                equivalent agency;
                    ``(D) a local government entity;
                    ``(E) an Indian tribe (as defined in section 4 of 
                the Indian Self-Determination and Education Assistance 
                Act (25 U.S.C. 450b));
                    ``(F) a State or local ambulance provider; or
                    ``(G) any other public or nonprofit entity 
                determined appropriate by the Secretary; and
            ``(2) prepare and submit to the Secretary an application at 
        such time, in such manner, and containing such information as 
        the Secretary may require, that includes--
                    ``(A) a description of the activities to be carried 
                out under the grant; and
                    ``(B) an assurance that the applicant will comply 
                with the matching requirement of subsection (f).

[[Page 122 STAT. 1209]]

    ``(d) Use of Funds.--An entity shall use amounts received under a 
grant made under subsection (b) only in a rural area--
            ``(1) to hire or recruit emergency medical service 
        personnel;
            ``(2) to recruit or retain volunteer emergency medical 
        service personnel;
            ``(3) to train emergency medical service personnel in 
        emergency response, injury prevention, safety awareness, or 
        other topics relevant to the delivery of emergency medical 
        services;
            ``(4) to fund training to meet State or Federal 
        certification requirements;
            ``(5) to provide training for firefighters or emergency 
        medical personnel for improvements to the training facility, 
        equipment, curricula, or personnel;
            ``(6) to develop new ways to educate emergency health care 
        providers through the use of technology-enhanced educational 
        methods (such as distance learning);
            ``(7) to acquire emergency medical services vehicles, 
        including ambulances;
            ``(8) to acquire emergency medical services equipment, 
        including cardiac defibrillators;
            ``(9) to acquire personal protective equipment for emergency 
        medical services personnel as required by the Occupational 
        Safety and Health Administration; or
            ``(10) to educate the public concerning cardiopulmonary 
        resuscitation (CPR), first aid, injury prevention, safety 
        awareness, illness prevention, or other related emergency 
        preparedness topics.

    ``(e) Preference.--In awarding grants under this section, the 
Secretary shall give preference to--
            ``(1) applications that reflect a collaborative effort by 2 
        or more of the entities described in subparagraphs (A) through 
        (G) of subsection (c)(1); and
            ``(2) applications submitted by entities that intend to use 
        amounts provided under the grant to fund activities described in 
        any of paragraphs (1) through (5) of subsection (d).

    ``(f) Matching Requirement.--The Secretary may not make a grant 
under this section to an entity unless the entity makes available 
(directly or through contributions from other public or private 
entities) non-Federal contributions toward the activities to be carried 
out under the grant in an amount equal to at least 5 percent of the 
amount received under the grant.
    ``(g) Authorization of Appropriations.--
            ``(1) In general.--There is authorized to be appropriated to 
        the Secretary to carry out this section not more than 
        $30,000,000 for each of fiscal years 2008 through 2012.
            ``(2) Administrative costs.--Not more than 5 percent of the 
        amount appropriated under paragraph (1) for a fiscal year may be 
        used for administrative expenses incurred in carrying out this 
        section.''.
SEC. 6205. INSURANCE OF LOANS FOR HOUSING AND RELATED FACILITIES 
                          FOR DOMESTIC FARM LABOR.

    Section 514(f)(3) of the Housing Act of 1949 (42 U.S.C. 1484(f)(3)) 
is amended by striking ``or the handling of such commodities in the 
unprocessed stage'' and inserting ``, the handling of agricultural or 
aquacultural commodities in the unprocessed stage, or the processing of 
agricultural or aquacultural commodities''.

[[Page 122 STAT. 1210]]

SEC. 6206. STUDY OF RURAL TRANSPORTATION ISSUES.

    (a) In General.--The Secretary of Agriculture and the Secretary of 
Transportation shall jointly conduct a study of transportation issues 
regarding the movement of agricultural products, domestically produced 
renewable fuels, and domestically produced resources for the production 
of electricity for rural areas of the United States, and economic 
development in those areas.
    (b) Inclusions.--The study shall include an examination of--
            (1) the importance of freight transportation, including 
        rail, truck, and barge, to--
                    (A) the delivery of equipment, seed, fertilizer, and 
                other such products important to the development of 
                agricultural commodities and products;
                    (B) the movement of agricultural commodities and 
                products to market;
                    (C) the delivery of ethanol and other renewable 
                fuels;
                    (D) the delivery of domestically produced resources 
                for use in the generation of electricity for rural 
                areas;
                    (E) the location of grain elevators, ethanol plants, 
                and other facilities;
                    (F) the development of manufacturing facilities in 
                rural areas; and
                    (G) the vitality and economic development of rural 
                communities;
            (2) the sufficiency in rural areas of transportation 
        capacity, the sufficiency of competition in the transportation 
        system, the reliability of transportation services, and the 
        reasonableness of transportation rates;
            (3) the sufficiency of facility investment in rural areas 
        necessary for efficient and cost-effective transportation; and
            (4) the accessibility to shippers in rural areas of Federal 
        processes for the resolution of grievances arising within 
        various transportation modes.

    (c) Report to Congress.--Not later than 1 year after the date of 
enactment of this Act, the Secretary and the Secretary of Transportation 
shall submit to Congress a report that contains the results of the study 
required by subsection (a).

Subtitle D--Housing <<NOTE: Housing Assistance Council Authorization Act 
of 2008. 42 USC 1490e note.>>  Assistance Council
SEC. 6301. SHORT TITLE.

    This subtitle may be cited as the ``Housing Assistance Council 
Authorization Act of 2008''.
SEC. 6302. <<NOTE: 42 USC 1490e note.>>  ASSISTANCE TO HOUSING 
                          ASSISTANCE COUNCIL.

    (a) Use.--The Secretary of Housing and Urban Development may provide 
financial assistance to the Housing Assistance Council for use by the 
Council to develop the ability and capacity of community-based housing 
development organizations to undertake community development and 
affordable housing projects and programs in rural areas. Assistance 
provided by the Secretary under this section may be used by the Housing 
Assistance Council for--
            (1) technical assistance, training, support, research, and 
        advice to develop the business and administrative capabilities 
        of rural community-based housing development organizations;

[[Page 122 STAT. 1211]]

            (2) loans, grants, or other financial assistance to rural 
        community-based housing development organizations to carry out 
        community development and affordable housing activities for low- 
        and moderate-income families; and
            (3) such other activities as may be determined by the 
        Secretary of Housing and Urban Development and the Housing 
        Assistance Council.

    (b) Authorization of Appropriations.--There is authorized to be 
appropriated for financial assistance under this section for the Housing 
Assistance Council $10,000,000 for each of fiscal years 2009 through 
2011.
SEC. 6303. <<NOTE: 42 USC 1490e note.>>  AUDITS AND REPORTS.

    (a) Audit.--
            (1) In general.--The financial transactions and activities 
        of the Housing Assistance Council shall be audited annually by 
        an independent certified public accountant or an independent 
        licensed public accountant certified or licensed by a regulatory 
        authority of a State or other political subdivision of the 
        United States.
            (2) Requirements of audits.--The Comptroller General of the 
        United States may rely on any audit completed under paragraph 
        (1), if the audit complies with--
                    (A) the annual programmatic and financial 
                examination requirements established in OMB Circular A-
                133; and
                    (B) generally accepted government auditing 
                standards.
            (3) Report to congress.--The Comptroller General shall 
        submit to the Committee on Banking, Housing, and Urban Affairs 
        of the Senate and the Committee on Financial Services of the 
        House of Representative a report detailing each audit completed 
        under paragraph (1).

    (b) GAO Report.--The Comptroller General of the United States shall 
conduct a study and submit a report to the Committee on Banking, 
Housing, and Urban Affairs of the Senate and the Committee on Financial 
Services of the House of Representative on the use of any funds 
appropriated to the Housing Assistance Council over the past 7 years.
SEC. 6304. <<NOTE: 42 USC 1490e note.>>  PERSONS NOT LAWFULLY 
                          PRESENT IN THE UNITED STATES.

    Aliens who are not lawfully present in the United States shall be 
ineligible for financial assistance under this subtitle, as provided and 
defined by section 214 of the Housing and Community Development Act of 
1980 (42 U.S.C. 1436a). Nothing in this subtitle shall be construed to 
alter the restrictions or definitions in such section 214.
SEC. 6305. <<NOTE: 42 USC 1490e note.>>  LIMITATION ON USE OF 
                          AUTHORIZED AMOUNTS.

    None of the amounts authorized by this subtitle may be used to lobby 
or retain a lobbyist for the purpose of influencing a Federal, State, or 
local governmental entity or officer.

[[Page 122 STAT. 1212]]

                 TITLE VII--RESEARCH AND RELATED MATTERS

  Subtitle A--National Agricultural Research, Extension, and Teaching 
                           Policy Act of 1977

SEC. 7101. DEFINITIONS.

    (a) In General.--Section 1404 of the National Agricultural Research, 
Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103) is amended--
            (1) in paragraph (4)--
                    (A) by redesignating subparagraphs (A) through (E) 
                as clauses (i) through (v), respectively;
                    (B) by striking ``(4) The terms'' and inserting the 
                following:
            ``(4) College and university.--
                    ``(A) In general.--The terms''; and
                    (C) by adding at the end the following:
                    ``(B) Inclusions.--The terms `college' and 
                `university' include a research foundation maintained by 
                a college or university described in subparagraph 
                (A).'';
            (2) by redesignating paragraphs (5) through (8), (9) through 
        (11), (12) through (14), (15), (16), (17), and (18) as 
        paragraphs (6) through (9), (11) through (13), (15) through 
        (17), (20), (5), (18), and (19), respectively, and moving the 
        paragraphs so as to appear in alphabetical and numerical order;
            (3) in paragraph (9) (as redesignated by paragraph (2))--
                    (A) by striking ``renewable natural resources'' and 
                inserting ``renewable energy and natural resources''; 
                and
                    (B) by striking subparagraph (F) and inserting the 
                following:
                    ``(F) Soil, water, and related resource conservation 
                and improvement.'';
            (4) by inserting after paragraph (9) (as so redesignated) 
        the following:
            ``(10) Hispanic-serving agricultural colleges and 
        universities.--
                    ``(A) In general.--The term `Hispanic-serving 
                agricultural colleges and universities' means colleges 
                or universities that--
                          ``(i) qualify as Hispanic-serving 
                      institutions; and
                          ``(ii) offer associate, bachelors, or other 
                      accredited degree programs in agriculture-related 
                      fields.
                    ``(B) Exception.--The term `Hispanic-serving 
                agricultural colleges and universities' does not include 
                1862 institutions (as defined in section 2 of the 
                Agricultural Research, Extension, and Education Reform 
                Act of 1998 (7 U.S.C. 7601)).'';
            (5) by striking paragraph (11) (as so redesignated) and 
        inserting the following:
            ``(11) Hispanic-serving institution.--The term `Hispanic-
        serving institution' has the meaning given the term in section

[[Page 122 STAT. 1213]]

        502 of the Higher Education Act of 1965 (20 U.S.C. 1101a).''; 
        and
            (6) by inserting after paragraph (13) (as so redesignated) 
        the following:
            ``(14) NLGCA institution; non-land-grant college of 
        agriculture.--
                    ``(A) In general.--The terms `NLGCA Institution' and 
                `non-land-grant college of agriculture' mean a public 
                college or university offering a baccalaureate or higher 
                degree in the study of agriculture or forestry.
                    ``(B) Exclusions.--The terms `NLGCA Institution' and 
                `non-land-grant college of agriculture' do not include--
                          ``(i) Hispanic-serving agricultural colleges 
                      and universities; or
                          ``(ii) any institution designated under--
                                    ``(I) the Act of July 2, 1862 
                                (commonly known as the `First Morrill 
                                Act'; 7 U.S.C. 301 et seq.);
                                    ``(II) the Act of August 30, 1890 
                                (commonly known as the `Second Morrill 
                                Act') (7 U.S.C. 321 et seq.);
                                    ``(III) the Equity in Educational 
                                Land-Grant Status Act of 1994 (Public 
                                Law 103-382; 7 U.S.C. 301 note); or
                                    ``(IV) Public Law 87-788 (commonly 
                                known as the `McIntire-Stennis 
                                Cooperative Forestry Act') (16 U.S.C. 
                                582a et seq.).''.

    (b) Conforming Amendments.--
            (1) Section 2(3) of the Research Facilities Act (7 U.S.C. 
        390(3)) is amended by striking ``section 1404(8) of the National 
        Agricultural Research, Extension, and Teaching Policy Act of 
        1977 (7 U.S.C. 3103(8))'' and inserting ``section 1404 of the 
        National Agricultural Research, Extension, and Teaching Policy 
        Act of 1977 (7 U.S.C. 3103)''.
            (2) Section 2(k) of the Competitive, Special, and Facilities 
        Research Grant Act (7 U.S.C. 450i(k)) is amended in the second 
        sentence by striking ``section 1404(17) of the National 
        Agricultural Research, Extension, and Teaching Policy Act of 
        1977 (7 U.S.C. 3103(17))'' and inserting ``section 1404 of the 
        National Agricultural Research, Extension, and Teaching Policy 
        Act of 1977 (7 U.S.C. 3103)''.
            (3) Section 18(a)(3)(B) of the Food and Nutrition Act of 
        2008 (7 U.S.C. 2027(a)(3)(B)) is amended by striking ``section 
        1404(5) of the National Agricultural Research, Extension, and 
        Teaching Policy Act of 1977 (7 U.S.C. 3103(5)))'' and inserting 
        ``section 1404 of the National Agricultural Research, Extension, 
        and Teaching Policy Act of 1977 (7 U.S.C. 3103))''.
            (4) Section 1473 of the National Agricultural Research, 
        Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3319) is 
        amended in the first sentence by striking ``section 1404(16) of 
        this title'' and inserting ``section 1404(18)''.
            (5) Section 1619(b) of the Food, Agriculture, Conservation, 
        and Trade Act of 1990 (7 U.S.C. 5801(b)) is amended--
                    (A) in paragraph (1), by striking ``section 1404(17) 
                of the National Agricultural Research, Extension, and 
                Teaching Policy Act of 1977 (7 U.S.C. 3103(17))'' and 
                inserting ``section 1404 of the National Agricultural

[[Page 122 STAT. 1214]]

                Research, Extension, and Teaching Policy Act of 1977 (7 
                U.S.C. 3103)'';
                    (B) in paragraph (5), by striking ``section 1404(7) 
                of the National Agricultural Research, Extension, and 
                Teaching Policy Act of 1977 (7 U.S.C. 3103(7))'' and 
                inserting ``section 1404 of the National Agricultural 
                Research, Extension, and Teaching Policy Act of 1977 (7 
                U.S.C. 3103)''; and
                    (C) in paragraph (8), by striking ``section 1404(13) 
                of the National Agricultural Research, Extension, and 
                Teaching Policy Act of 1977 (7 U.S.C. 3103(13))'' and 
                inserting ``section 1404 of the National Agricultural 
                Research, Extension, and Teaching Policy Act of 1977 (7 
                U.S.C. 3103)''.
            (6) Section 125(c)(1)(C) of Public Law 100-238 (5 U.S.C. 
        8432 note) is amended by striking ``section 1404(5) of the 
        National Agricultural Research, Extension, and Teaching Policy 
        Act of 1977 (7 U.S.C. 3103(5))'' and inserting ``section 1404 of 
        the National Agricultural Research, Extension, and Teaching 
        Policy Act of 1977 (7 U.S.C. 3103)''.
SEC. 7102. NATIONAL AGRICULTURAL RESEARCH, EXTENSION, EDUCATION, 
                          AND ECONOMICS ADVISORY BOARD.

    (a) In General.--Section 1408 of the National Agricultural Research, 
Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3123) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1), by striking ``31'' and 
                inserting ``25''; and
                    (B) by striking paragraph (3) and inserting the 
                following:
            ``(3) Membership categories.--The Advisory Board shall 
        consist of members from each of the following categories:
                    ``(A) 1 member representing a national farm 
                organization.
                    ``(B) 1 member representing farm cooperatives.
                    ``(C) 1 member actively engaged in the production of 
                a food animal commodity, recommended by a coalition of 
                national livestock organizations.
                    ``(D) 1 member actively engaged in the production of 
                a plant commodity, recommended by a coalition of 
                national crop organizations.
                    ``(E) 1 member actively engaged in aquaculture, 
                recommended by a coalition of national aquacultural 
                organizations.
                    ``(F) 1 member representing a national food animal 
                science society.
                    ``(G) 1 member representing a national crop, soil, 
                agronomy, horticulture, plant pathology, or weed science 
                society.
                    ``(H) 1 member representing a national food science 
                organization.
                    ``(I) 1 member representing a national human health 
                association.
                    ``(J) 1 member representing a national nutritional 
                science society.

[[Page 122 STAT. 1215]]

                    ``(K) 1 member representing the land-grant colleges 
                and universities eligible to receive funds under the Act 
                of July 2, 1862 (7 U.S.C. 301 et seq.).
                    ``(L) 1 member representing the land-grant colleges 
                and universities eligible to receive funds under the Act 
                of August 30, 1890 (7 U.S.C. 321 et seq.), including 
                Tuskegee University.
                    ``(M) 1 member representing the 1994 Institutions 
                (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)).
                    ``(N) 1 member representing NLGCA Institutions.
                    ``(O) 1 member representing Hispanic-serving 
                institutions.
                    ``(P) 1 member representing the American Colleges of 
                Veterinary Medicine.
                    ``(Q) 1 member engaged in the transportation of food 
                and agricultural products to domestic and foreign 
                markets.
                    ``(R) 1 member representing food retailing and 
                marketing interests.
                    ``(S) 1 member representing food and fiber 
                processors.
                    ``(T) 1 member actively engaged in rural economic 
                development.
                    ``(U) 1 member representing a national consumer 
                interest group.
                    ``(V) 1 member representing a national forestry 
                group.
                    ``(W) 1 member representing a national conservation 
                or natural resource group.
                    ``(X) 1 member representing private sector 
                organizations involved in international development.
                    ``(Y) 1 member representing a national social 
                science association.'';
            (2) in subsection (g)(1), by striking ``$350,000'' and 
        inserting ``$500,000''; and
            (3) in subsection (h), by striking ``2007'' and inserting 
        ``2012''.

    (b) <<NOTE: 7 USC 3123 note.>>  No Effect on Terms.--Nothing in this 
section or any amendment made by this section affects the term of any 
member of the National Agricultural Research, Extension, Education, and 
Economics Advisory Board serving as of the date of enactment of this 
Act.
SEC. 7103. SPECIALTY CROP COMMITTEE REPORT.

    Section 1408A(c) of the National Agricultural Research, Extension, 
and Teaching Policy Act of 1977 (7 U.S.C. 3123a(c)) is amended by adding 
at the end the following:
            ``(4) Analyses of changes in macroeconomic conditions, 
        technologies, and policies on specialty crop production and 
        consumption, with particular focus on the effect of those 
        changes on the financial stability of producers.
            ``(5) Development of data that provide applied information 
        useful to specialty crop growers, their associations, and other 
        interested beneficiaries in evaluating that industry from a 
        regional and national perspective.''.

[[Page 122 STAT. 1216]]

SEC. 7104. RENEWABLE ENERGY COMMITTEE.

    The National Agricultural Research, Extension, and Teaching Policy 
Act of 1977 is amended by inserting after section 1408A (7 U.S.C. 3123a) 
the following:
``SEC. 1408B. <<NOTE: 7 USC 3123b.>>  RENEWABLE ENERGY COMMITTEE.

    ``(a) Initial Members.--Not <<NOTE: Deadline. Establishment.>>  
later than 90 days after the date of enactment of this section, the 
executive committee of the Advisory Board shall establish and appoint 
the initial members of a permanent renewable energy committee.

    ``(b) Duties.--The permanent renewable energy committee shall study 
the scope and effectiveness of research, extension, and economics 
programs affecting the renewable energy industry.
    ``(c) Nonadvisory Board Members.--
            ``(1) In general.--An individual who is not a member of the 
        Advisory Board may be appointed as a member of the renewable 
        energy committee.
            ``(2) Service.--A member of the renewable energy committee 
        shall serve at the discretion of the executive committee.

    ``(d) Report by Renewable Energy Committee.--Not later than 180 days 
after the date of establishment of the renewable energy committee, and 
annually thereafter, the renewable energy committee shall submit to the 
Advisory Board a report that contains the findings and any 
recommendations of the renewable energy committee with respect to the 
study conducted under subsection (b).
    ``(e) Consultation.--In carrying out the duties described in 
subsection (b), the renewable energy committee shall consult with the 
Biomass Research and Development Technical Advisory Committee 
established under section 9008(d) of the Biomass Research and 
Development Act of 2000 (7 U.S.C. 8605).
    ``(f) Matters To Be Considered in Budget Recommendation.--In 
preparing the annual budget recommendations for the Department, the 
Secretary shall take into consideration those findings and 
recommendations contained in the most recent report of the renewable 
energy committee under subsection (d) that are developed by the Advisory 
Committee.
    ``(g) Report by the Secretary.--In the budget material submitted to 
Congress by the Secretary in connection with the budget submitted 
pursuant to section 1105 of title 31, United States Code, for a fiscal 
year, the Secretary shall include a report that describes the ways in 
which the Secretary addressed each recommendation of the renewable 
energy committee described in subsection (f).''.
SEC. 7105. VETERINARY MEDICINE LOAN REPAYMENT.

    (a) In General.--Section 1415A of the National Agricultural 
Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3151a) is 
amended--
            (1) by striking subsection (b) and inserting the following:

    ``(b) Determination of Veterinarian Shortage Situations.--In 
determining `veterinarian shortage situations', the Secretary may 
consider--
            ``(1) geographical areas that the Secretary determines have 
        a shortage of veterinarians; and
            ``(2) areas of veterinary practice that the Secretary 
        determines have a shortage of veterinarians, such as food animal 
        medicine, public health, epidemiology, and food safety.'';

[[Page 122 STAT. 1217]]

            (2) in subsection (c), by adding at the end the following:
            ``(8) Priority.--In administering the program, the Secretary 
        shall give priority to agreements with veterinarians for the 
        practice of food animal medicine in veterinarian shortage 
        situations.'';
            (3) by redesignating subsection (d) as subsection (f); and
            (4) by inserting after subsection (c) the following:

    ``(d) Use of Funds.--None of the funds appropriated to the Secretary 
under subsection (f) may be used to carry out section 5379 of title 5, 
United States Code.
    ``(e) Regulations.--Notwithstanding <<NOTE: Deadline.>>  subchapter 
II of chapter 5 of title 5, United States Code, not later than 270 days 
after the date of enactment of this subsection, the Secretary shall 
promulgate regulations to carry out this section.''.

    (b) Disapproval of Transfer of Funds.--Congress disapproves the 
transfer of funds from the Cooperative State Research, Education, and 
Extension Service to the Food Safety and Inspection Service described in 
the notice of use of funds for implementation of the veterinary medicine 
loan repayment program authorized by the National Veterinary Medical 
Service Act (72 Fed. Reg. 48609 (August 24, 2007)), and such funds shall 
be rescinded on the date of enactment of this Act and made available to 
the Secretary, without further appropriation or fiscal year limitation, 
for use only in accordance with section 1415A of the National 
Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 
U.S.C. 3151a) (as amended by subsection (a)).
SEC. 7106. ELIGIBILITY OF UNIVERSITY OF THE DISTRICT OF COLUMBIA 
                          FOR GRANTS AND FELLOWSHIPS FOR FOOD AND 
                          AGRICULTURAL SCIENCES EDUCATION.

    Section 1417 of the National Agricultural Research, Extension, and 
Teaching Policy Act of 1977 (7 U.S.C. 3152) is amended--
            (1) in the matter preceding paragraph (1) of subsection (b), 
        by inserting ``(including the University of the District of 
        Columbia)'' after ``land-grant colleges and universities''; and
            (2) in subsection (d)(2), by inserting ``(including the 
        University of the District of Columbia)'' after 
        ``universities''.
SEC. 7107. GRANTS TO 1890 SCHOOLS TO EXPAND EXTENSION CAPACITY.

    Section 1417(b)(4) of the National Agricultural Research, Extension, 
and Teaching Policy Act of 1977 (7 U.S.C. 3152(b)(4)) is amended by 
striking ``teaching and research'' and inserting ``teaching, research, 
and extension''.
SEC. 7108. EXPANSION OF FOOD AND AGRICULTURAL SCIENCES AWARDS.

    Section 1417(i) of the National Agricultural Research, Extension, 
and Teaching Policy Act of 1977 (7 U.S.C. 3152(i)) is amended--
            (1) in the subsection heading, by striking ``Teaching 
        Awards'' and inserting ``Teaching, Extension, and Research 
        Awards''; and
            (2) by striking paragraph (1) and inserting the following:
            ``(1) Establishment.--

[[Page 122 STAT. 1218]]

                    ``(A) In general.--The Secretary shall establish a 
                National Food and Agricultural Sciences Teaching, 
                Extension, and Research Awards program to recognize and 
                promote excellence in teaching, extension, and research 
                in the food and agricultural sciences at a college or 
                university.
                    ``(B) Minimum requirement.--The Secretary shall make 
                at least 1 cash award in each fiscal year to a nominee 
                selected by the Secretary for excellence in each of the 
                areas of teaching, extension, and research of food and 
                agricultural science at a college or university.''.
SE