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H.R. 2646 (107th): Farm Security and Rural Investment Act of 2002


The text of the bill below is as of May 10, 2002 (Passed Congress).

Summary of this bill

Source: Wikipedia

The Farm Security and Rural Investment Act of 2002, also known as the 2002 Farm Bill, includes ten titles, addressing a great variety of issues related to agriculture, ecology, energy, trade, and nutrition.

The act directs approximately 16.5 billion dollars of funding toward agricultural subsidies each year. These subsidies have a dramatic effect on the production of grains, oilseeds, and upland cotton. The specialized nature of the farm bill, as well as the size and timing of the bill, made its passage highly contentious.

Debated in the U.S. House of Representatives during the immediate aftermath of the September 11th attacks in 2001, the bill drew criticism from the …


H.R.2646

One Hundred Seventh Congress

of the

United States of America

AT THE SECOND SESSION

Begun and held at the City of Washington on Wednesday,

the twenty-third day of January, two thousand and two

An Act

To provide for the continuation of agricultural programs through fiscal year 2007, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) SHORT TITLE- This Act may be cited as the ‘Farm Security and Rural Investment Act of 2002’.

    (b) TABLE OF CONTENTS- The table of contents of this Act is as follows:

      Sec. 1. Short title; table of contents.

TITLE I--COMMODITY PROGRAMS

      Sec. 1001. Definitions.

Subtitle A--Direct Payments and Counter-Cyclical Payments

      Sec. 1101. Establishment of base acres and payment acres for a farm.

      Sec. 1102. Establishment of payment yield.

      Sec. 1103. Availability of direct payments.

      Sec. 1104. Availability of counter-cyclical payments.

      Sec. 1105. Producer agreement required as condition of provision of direct payments and counter-cyclical payments.

      Sec. 1106. Planting flexibility.

      Sec. 1107. Relation to remaining payment authority under production flexibility contracts.

      Sec. 1108. Period of effectiveness.

Subtitle B--Marketing Assistance Loans and Loan Deficiency Payments

      Sec. 1201. Availability of nonrecourse marketing assistance loans for loan commodities.

      Sec. 1202. Loan rates for nonrecourse marketing assistance loans.

      Sec. 1203. Term of loans.

      Sec. 1204. Repayment of loans.

      Sec. 1205. Loan deficiency payments.

      Sec. 1206. Payments in lieu of loan deficiency payments for grazed acreage.

      Sec. 1207. Special marketing loan provisions for upland cotton.

      Sec. 1208. Special competitive provisions for extra long staple cotton.

      Sec. 1209. Availability of recourse loans for high moisture feed grains and seed cotton.

Subtitle C--Peanuts

      Sec. 1301. Definitions.

      Sec. 1302. Establishment of payment yield and base acres for peanuts for a farm.

      Sec. 1303. Availability of direct payments for peanuts.

      Sec. 1304. Availability of counter-cyclical payments for peanuts.

      Sec. 1305. Producer agreement required as condition on provision of direct payments and counter-cyclical payments.

      Sec. 1306. Planting flexibility.

      Sec. 1307. Marketing assistance loans and loan deficiency payments for peanuts.

      Sec. 1308. Miscellaneous provisions.

      Sec. 1309. Termination of marketing quota programs for peanuts and compensation to peanut quota holders for loss of quota asset value.

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

Subtitle D--Sugar

      Sec. 1401. Sugar program.

      Sec. 1402. Storage facility loans.

      Sec. 1403. Flexible marketing allotments for sugar.

Subtitle E--Dairy

      Sec. 1501. Milk price support program.

      Sec. 1502. National dairy market loss payments.

      Sec. 1503. Dairy export incentive and dairy indemnity programs.

      Sec. 1504. Dairy product mandatory reporting.

      Sec. 1505. Funding of dairy promotion and research program.

      Sec. 1506. Fluid milk promotion.

      Sec. 1507. Study of national dairy policy.

      Sec. 1508. Studies of effects of changes in approach to national dairy policy and fluid milk identity standards.

Subtitle F--Administration

      Sec. 1601. Administration generally.

      Sec. 1602. Suspension of permanent price support authority.

      Sec. 1603. Payment limitations.

      Sec. 1604. Adjusted gross income limitation.

      Sec. 1605. Commission on application of payment limitations.

      Sec. 1606. Adjustments of loans.

      Sec. 1607. Personal liability of producers for deficiencies.

      Sec. 1608. Extension of existing administrative authority regarding loans.

      Sec. 1609. Commodity Credit Corporation Inventory.

      Sec. 1610. Reserve stock level.

      Sec. 1611. Farm reconstitutions.

      Sec. 1612. Assignment of payments.

      Sec. 1613. Equitable relief from ineligibility for loans, payments, or other benefits.

      Sec. 1614. Tracking of benefits.

      Sec. 1615. Estimates of net farm income.

      Sec. 1616. Availability of incentive payments for certain producers.

      Sec. 1617. Renewed availability of market loss assistance and certain emergency assistance to persons that failed to receive assistance under earlier authorities.

      Sec. 1618. Producer retention of erroneously paid loan deficiency payments and marketing loan gains.

TITLE II--CONSERVATION

Subtitle A--Conservation Security

      Sec. 2001. Conservation security program.

      Sec. 2002. Conservation compliance.

      Sec. 2003. Partnerships and cooperation.

      Sec. 2004. Administrative requirements for conservation programs.

      Sec. 2005. Reform and assessment of conservation programs.

      Sec. 2006. Conforming amendments.

Subtitle B--Conservation Reserve

      Sec. 2101. Conservation reserve program.

Subtitle C--Wetlands Reserve Program

      Sec. 2201. Reauthorization.

      Sec. 2202. Enrollment.

      Sec. 2203. Easements and agreements.

      Sec. 2204. Changes in ownership; agreement modification; termination.

Subtitle D--Environmental Quality Incentives

      Sec. 2301. Environmental quality incentives program.

Subtitle E--Grassland Reserve

      Sec. 2401. Grassland reserve program.

Subtitle F--Other Conservation Programs

      Sec. 2501. Agricultural management assistance.

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

      Sec. 2503. Farmland protection program.

      Sec. 2504. Resource conservation and development program.

      Sec. 2505. Small watershed rehabilitation program.

      Sec. 2506. Use of symbols, slogans, and logos.

      Sec. 2507. Desert terminal lakes.

Subtitle G--Conservation Corridor Demonstration Program

      Sec. 2601. Definitions.

      Sec. 2602. Conservation corridor demonstration program.

      Sec. 2603. Implementation of conservation corridor plan.

      Sec. 2604. Funding requirements.

Subtitle H--Funding and Administration

      Sec. 2701. Funding and administration.

      Sec. 2702. Regulations.

TITLE III--TRADE

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

      Sec. 3001. United States policy.

      Sec. 3002. Provision of agricultural commodities.

      Sec. 3003. Generation and use of currencies by private voluntary organizations and cooperatives.

      Sec. 3004. Levels of assistance.

      Sec. 3005. Food Aid Consultative Group.

      Sec. 3006. Maximum level of expenditures.

      Sec. 3007. Administration.

      Sec. 3008. Assistance for stockpiling and rapid transportation, delivery, and distribution of shelf-stable prepackaged foods.

      Sec. 3009. Sale procedure.

      Sec. 3010. Prepositioning.

      Sec. 3011. Transportation and related costs.

      Sec. 3012. Expiration date.

      Sec. 3013. Micronutrient fortification programs.

      Sec. 3014. John Ogonowski Farmer-to-Farmer Program.

Subtitle B--Agricultural Trade Act of 1978

      Sec. 3101. Exporter assistance initiative.

      Sec. 3102. Export credit guarantee program.

      Sec. 3103. Market access program.

      Sec. 3104. Export enhancement program.

      Sec. 3105. Foreign market development cooperator program.

      Sec. 3106. Food for progress.

      Sec. 3107. McGovern-Dole International Food for Education and Child Nutrition Program.

Subtitle C--Miscellaneous

      Sec. 3201. Surplus commodities for developing or friendly countries.

      Sec. 3202. Bill Emerson Humanitarian Trust Act.

      Sec. 3203. Emerging markets.

      Sec. 3204. Biotechnology and agricultural trade program.

      Sec. 3205. Technical assistance for specialty crops.

      Sec. 3206. Global market strategy.

      Sec. 3207. Report on use of perishable commodities and live animals.

      Sec. 3208. Study on fee for services.

      Sec. 3209. Sense of Congress concerning foreign assistance programs.

      Sec. 3210. Sense of the Senate concerning agricultural trade.

TITLE IV--NUTRITION PROGRAMS

      Sec. 4001. Short title.

Subtitle A--Food Stamp Program

      Sec. 4101. Encouragement of payment of child support.

      Sec. 4102. Simplified definition of income.

      Sec. 4103. Standard deduction.

      Sec. 4104. Simplified utility allowance.

      Sec. 4105. Simplified determination of housing costs.

      Sec. 4106. Simplified determination of deductions.

      Sec. 4107. Simplified definition of resources.

      Sec. 4108. Alternative issuance systems in disasters.

      Sec. 4109. State option to reduce reporting requirements.

      Sec. 4110. Cost neutrality for electronic benefit transfer systems.

      Sec. 4111. Report on electronic benefit transfer systems.

      Sec. 4112. Alternative procedures for residents of certain group facilities.

      Sec. 4113. Redemption of benefits through group living arrangements.

      Sec. 4114. Availability of food stamp program applications on the Internet.

      Sec. 4115. Transitional food stamps for families moving from welfare.

      Sec. 4116. Grants for simple application and eligibility determination systems and improved access to benefits.

      Sec. 4117. Delivery to retailers of notices of adverse action.

      Sec. 4118. Reform of quality control system.

      Sec. 4119. Improvement of calculation of State performance measures.

      Sec. 4120. Bonuses for States that demonstrate high or most improved performance.

      Sec. 4121. Employment and training program.

      Sec. 4122. Reauthorization of food stamp program and food distribution program on Indian reservations.

      Sec. 4123. Expanded grant authority.

      Sec. 4124. Consolidated block grants for Puerto Rico and American Samoa.

      Sec. 4125. Assistance for community food projects.

      Sec. 4126. Availability of commodities for the emergency food assistance program.

Subtitle B--Commodity Distribution

      Sec. 4201. Commodity supplemental food program.

      Sec. 4202. Commodity donations.

      Sec. 4203. Distribution of surplus commodities to special nutrition projects.

      Sec. 4204. Emergency food assistance.

Subtitle C--Child Nutrition and Related Programs

      Sec. 4301. Commodities for school lunch program.

      Sec. 4302. Eligibility for free and reduced price meals.

      Sec. 4303. Purchases of locally produced foods.

      Sec. 4304. Applicability of Buy-American requirement to Puerto Rico.

      Sec. 4305. Fruit and vegetable pilot program.

      Sec. 4306. Eligibility for assistance under the special supplemental nutrition program for women, infants, and children.

      Sec. 4307. WIC farmers’ market nutrition program.

Subtitle D--Miscellaneous

      Sec. 4401. Partial restoration of benefits to legal immigrants.

      Sec. 4402. Seniors farmers’ market nutrition program.

      Sec. 4403. Nutrition information and awareness pilot program.

      Sec. 4404. Hunger fellowship program.

      Sec. 4405. General effective date.

TITLE V--CREDIT

Subtitle A--Farm Ownership Loans

      Sec. 5001. Direct loans.

      Sec. 5002. Financing of bridge loans.

      Sec. 5003. Amount of guarantee of loans for farm operations on tribal lands.

      Sec. 5004. Guarantee of loans made under State beginning farmer or rancher programs.

      Sec. 5005. Down Payment Loan Program.

      Sec. 5006. Beginning farmer and rancher contract land sales program.

Subtitle B--Operating Loans

      Sec. 5101. Direct loans.

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

Subtitle C--Emergency Loans

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

Subtitle D--Administrative Provisions

      Sec. 5301. Evaluations of direct and guaranteed loan programs.

      Sec. 5302. Eligibility of trusts and limited liability companies for farm ownership loans, farm operating loans, and emergency loans.

      Sec. 5303. Debt settlement.

      Sec. 5304. Temporary authority to enter into contracts; private collection agencies.

      Sec. 5305. Interest rate options for loans in servicing.

      Sec. 5306. Elimination of requirement that Secretary require county committees to certify in writing that certain loan reviews have been conducted.

      Sec. 5307. Simplified loan guarantee application available for loans of greater amounts.

      Sec. 5308. Inventory property.

      Sec. 5309. Administration of certified lenders and preferred certified lenders programs.

      Sec. 5310. Definitions.

      Sec. 5311. Loan authorization levels.

      Sec. 5312. Reservation of funds for direct operating loans for beginning farmers and ranchers.

      Sec. 5313. Interest rate reduction program.

      Sec. 5314. Reamortization of recapture payments.

      Sec. 5315. Allocation of certain funds for socially disadvantaged farmers and ranchers.

      Sec. 5316. Waiver of borrower training certification requirement.

      Sec. 5317. Timing of loan assessments.

      Sec. 5318. Annual review of borrowers.

      Sec. 5319. Loan eligibility for borrowers with prior debt forgiveness.

      Sec. 5320. Making and servicing of loans by personnel of State, county, or area committees.

      Sec. 5321. Eligibility of employees of State, county, or area committee for loans and loan guarantees.

Subtitle E--Farm Credit

      Sec. 5401. Repeal of burdensome approval requirements.

      Sec. 5402. Banks for cooperatives.

      Sec. 5403. Insurance corporation premiums.

Subtitle F--General Provisions

      Sec. 5501. Technical amendments.

TITLE VI--RURAL DEVELOPMENT

Subtitle A--Consolidated Farm and Rural Development Act

      Sec. 6001. Eligibility of rural empowerment zones and rural enterprise communities for direct and guaranteed loans for essential community facilities.

      Sec. 6002. Water or waste disposal grants.

      Sec. 6003. Rural business opportunity grants.

      Sec. 6004. Child day care facilities.

      Sec. 6005. Rural water and wastewater circuit rider program.

      Sec. 6006. Multijurisdictional regional planning organizations.

      Sec. 6007. Loan guarantees for certain rural development loans.

      Sec. 6008. Tribal college and university essential community facilities.

      Sec. 6009. Emergency and imminent community water assistance grant program.

      Sec. 6010. Water and waste facility grants for Native American tribes.

      Sec. 6011. Grants for water systems for rural and native villages in Alaska.

      Sec. 6012. Grants to nonprofit organizations to finance the construction, refurbishing, and servicing of individually-owned household water well systems in rural areas for individuals with low or moderate incomes.

      Sec. 6013. Loans and loan guarantees for renewable energy systems.

      Sec. 6014. Rural business enterprise grants.

      Sec. 6015. Rural cooperative development grants.

      Sec. 6016. Grants to broadcasting systems.

      Sec. 6017. Business and industry loan modifications.

      Sec. 6018. Use of rural development loans and grants for other purposes.

      Sec. 6019. Simplified application forms for loan guarantees.

      Sec. 6020. Definition of rural and rural area.

      Sec. 6021. National Rural Development Partnership.

      Sec. 6022. Rural telework.

      Sec. 6023. Historic barn preservation.

      Sec. 6024. Grants for NOAA weather radio transmitters.

      Sec. 6025. Grants to train farm workers in new technologies and to train farm workers in specialized skills necessary for higher value crops.

      Sec. 6026. Rural community advancement program.

      Sec. 6027. Delta Regional Authority.

      Sec. 6028. Northern Great Plains Regional Authority.

      Sec. 6029. Rural business investment program.

      Sec. 6030. Rural strategic investment program.

      Sec. 6031. Funding of pending rural development loan and grant applications.

Subtitle B--Rural Electrification Act of 1936

      Sec. 6101. Guarantees for bonds and notes issued for electrification or telephone purposes.

      Sec. 6102. Expansion of 911 access.

      Sec. 6103. Enhancement of access to broadband service in rural areas.

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

      Sec. 6201. Alternative Agricultural Research and Commercialization Corporation.

      Sec. 6202. Rural electronic commerce extension program.

      Sec. 6203. Telemedicine and distance learning services in rural areas.

Subtitle D--SEARCH Grants for Small Communities

      Sec. 6301. Definitions.

      Sec. 6302. SEARCH grant program.

      Sec. 6303. Report.

      Sec. 6304. Funding.

Subtitle E--Miscellaneous

      Sec. 6401. Value-added agricultural product market development grants.

      Sec. 6402. Agriculture innovation center demonstration program.

      Sec. 6403. Fund for Rural America.

      Sec. 6404. Rural local television broadcast signal loan guarantees.

      Sec. 6405. Rural firefighters and emergency personnel grant program.

      Sec. 6406. Sense of Congress on rural policy coordination.

TITLE VII--RESEARCH AND RELATED MATTERS

Subtitle A--Extensions

      Sec. 7101. National rural information center clearinghouse.

      Sec. 7102. Grants and fellowships for food and agricultural sciences education.

      Sec. 7103. Policy research centers.

      Sec. 7104. Human nutrition intervention and health promotion research program.

      Sec. 7105. Pilot research program to combine medical and agricultural research.

      Sec. 7106. Nutrition education program.

      Sec. 7107. Continuing animal health and disease research programs.

      Sec. 7108. Appropriations for research on national or regional problems.

      Sec. 7109. Grants to upgrade agricultural and food sciences facilities at 1890 land-grant colleges, including Tuskegee University.

      Sec. 7110. National research and training virtual centers.

      Sec. 7111. Hispanic-serving institutions.

      Sec. 7112. Competitive grants for international agricultural science and education programs.

      Sec. 7113. University research.

      Sec. 7114. Extension service.

      Sec. 7115. Supplemental and alternative crops.

      Sec. 7116. Aquaculture research facilities.

      Sec. 7117. Rangeland research.

      Sec. 7118. National genetics resources program.

      Sec. 7119. High-priority research and extension initiatives.

      Sec. 7120. Nutrient management research and extension initiative.

      Sec. 7121. Agricultural telecommunications program.

      Sec. 7122. Assistive technology program for farmers with disabilities.

      Sec. 7123. Partnerships for high-value agricultural product quality research.

      Sec. 7124. Biobased products.

      Sec. 7125. Integrated research, education, and extension competitive grants program.

      Sec. 7126. Equity in Educational Land-Grant Status Act of 1994.

      Sec. 7127. 1994 Institution research grants.

      Sec. 7128. Endowment for 1994 Institutions.

      Sec. 7129. Precision agriculture.

      Sec. 7130. Thomas Jefferson Initiative for crop diversification.

      Sec. 7131. Support for research regarding diseases of wheat, triticale, and barley caused by fusarium graminearum or by tilletia indica.

      Sec. 7132. Office of Pest Management Policy.

      Sec. 7133. National Agricultural Research, Extension, Education, and Economics Advisory Board.

      Sec. 7134. Grants for research on production and marketing of alcohols and industrial hydrocarbons from agricultural commodities and forest products.

      Sec. 7135. Agricultural experiment stations research facilities.

      Sec. 7136. Competitive, special, and facilities research grants national research initiative.

      Sec. 7137. Federal agricultural research facilities authorization of appropriations.

      Sec. 7138. Critical agricultural materials research.

      Sec. 7139. Aquaculture.

Subtitle B--Modifications

      Sec. 7201. Equity in Educational Land-Grant Status Act of 1994.

      Sec. 7202. Carryover for experiment stations.

      Sec. 7203. Authorization percentages for research and extension formula funds.

      Sec. 7204. Carryover for eligible institutions.

      Sec. 7205. Initiative for future agriculture and food systems.

      Sec. 7206. Eligibility for integrated grants program.

      Sec. 7207. Agricultural Research, Extension, and Education Reform Act of 1998.

      Sec. 7208. Food, Agriculture, Conservation, and Trade Act of 1990.

      Sec. 7209. National Agricultural Research, Extension, and Teaching Policy Act of 1977.

      Sec. 7210. Biotechnology risk assessment research.

      Sec. 7211. Competitive, special, and facilities research grants.

      Sec. 7212. Matching funds requirement for research and extension activities of 1890 Institutions.

      Sec. 7213. Matching requirements for research and extension formula funds for insular area land-grant institutions.

      Sec. 7214. Definition of food and agricultural sciences.

      Sec. 7215. Federal Extension Service.

      Sec. 7216. Policy research centers.

      Sec. 7217. Availability of competitive grant funds.

      Sec. 7218. Organic agriculture research and extension initiative.

      Sec. 7219. Senior scientific research service.

      Sec. 7220. Termination of certain schedule a appointments.

      Sec. 7221. Biosecurity planning and response programs.

      Sec. 7222. Indirect costs for small business innovation research grants.

      Sec. 7223. Carbon cycle research.

Subtitle C--Repeal of Certain Activities and Authorities

      Sec. 7301. Food Safety Research Information Office and National Conference.

      Sec. 7302. Reimbursement of expenses under Sheep Promotion, Research, and Information Act of 1994.

      Sec. 7303. Market expansion research.

      Sec. 7304. National Advisory Board on Agricultural Weather.

      Sec. 7305. Agricultural information exchange with Ireland.

      Sec. 7306. Pesticide resistance study.

      Sec. 7307. Expansion of education study.

      Sec. 7308. Task force on 10-year strategic plan for agricultural research facilities.

Subtitle D--New Authorities

      Sec. 7401. Subtitle definitions.

      Sec. 7402. Research equipment grants.

      Sec. 7403. Joint requests for proposals.

      Sec. 7404. Review of Agricultural Research Service.

      Sec. 7405. Beginning farmer and rancher development program.

      Sec. 7406. Sense of Congress regarding doubling of funding for agricultural research.

      Sec. 7407. Organic production and market data initiatives.

      Sec. 7408. International organic research collaboration.

      Sec. 7409. Report on producers and handlers of organic agricultural products.

      Sec. 7410. Report on genetically modified pest-protected plants.

      Sec. 7411. Study of nutrient banking.

      Sec. 7412. Grants for youth organizations.

Subtitle E--Miscellaneous

      Sec. 7501. Resident instruction and distance education at institutions of higher education in United States insular areas.

      Sec. 7502. Definitions.

      Sec. 7503. Resident instruction and distance education grants program for insular area institutions of higher education.

      Sec. 7504. Declaration of extraordinary emergency and resulting authorities.

      Sec. 7505. Agricultural biotechnology research and development for developing countries.

      Sec. 7506. Land acquisition authority, national peanut research laboratory, Dawson, Georgia.

TITLE VIII--FORESTRY

Subtitle A--Cooperative Forestry Assistance Act of 1978

      Sec. 8001. Repeal of forestry incentives program and stewardship incentive program.

      Sec. 8002. Establishment of forest land enhancement program.

      Sec. 8003. Enhanced community fire protection.

Subtitle B--Amendments to Other Laws

      Sec. 8101. Sustainable forestry outreach initiative; renewable resources extension activities.

      Sec. 8102. Office of International Forestry.

Subtitle C--Miscellaneous Provisions

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

TITLE IX--ENERGY

      Sec. 9001. Definitions.

      Sec. 9002. Federal procurement of biobased products.

      Sec. 9003. Biorefinery development grants.

      Sec. 9004. Biodiesel fuel education program.

      Sec. 9005. Energy audit and renewable energy development program.

      Sec. 9006. Renewable energy systems and energy efficiency improvements.

      Sec. 9007. Hydrogen and fuel cell technologies.

      Sec. 9008. Biomass research and development.

      Sec. 9009. Cooperative research and extension projects.

      Sec. 9010. Continuation of bioenergy program.

TITLE X--MISCELLANEOUS

Subtitle A--Crop Insurance

      Sec. 10001. Equal crop insurance treatment of potatoes and sweet potatoes.

      Sec. 10002. Continuous coverage.

      Sec. 10003. Quality loss adjustment procedures.

      Sec. 10004. Adjusted gross revenue insurance pilot program.

      Sec. 10005. Sense of Congress on expansion of crop insurance coverage.

      Sec. 10006. Report on specialty crop insurance.

Subtitle B--Disaster Assistance

      Sec. 10101. Reference to sea grass and sea oats as crops covered by noninsured crop disaster assistance program.

      Sec. 10102. Emergency grants to assist low-income migrant and seasonal farmworkers.

      Sec. 10103. Emergency loans for seed producers.

      Sec. 10104. Assistance for livestock producers.

      Sec. 10105. Market loss assistance for apple producers.

      Sec. 10106. Market loss assistance for onion producers.

      Sec. 10107. Commercial fisheries failure.

      Sec. 10108. Study of feasibility of producer indemnification from Government-caused disasters.

Subtitle C--Tree Assistance Program

      Sec. 10201. Definitions.

      Sec. 10202. Eligibility.

      Sec. 10203. Assistance.

      Sec. 10204. Limitations on assistance.

      Sec. 10205. Authorization of appropriations.

Subtitle D--Animal Welfare

      Sec. 10301. Definition of animal under the Animal Welfare Act.

      Sec. 10302. Prohibition on interstate movement of animals for animal fighting.

      Sec. 10303. Penalties and foreign commerce provisions of the Animal Welfare Act.

      Sec. 10304. Report on rats, mice, and birds.

      Sec. 10305. Enforcement of Humane Methods of Slaughter Act of 1958.

Subtitle E--Animal Health Protection

      Sec. 10401. Short title.

      Sec. 10402. Findings.

      Sec. 10403. Definitions.

      Sec. 10404. Restriction on importation or entry.

      Sec. 10405. Exportation.

      Sec. 10406. Interstate movement.

      Sec. 10407. Seizure, quarantine, and disposal.

      Sec. 10408. Inspections, seizures, and warrants.

      Sec. 10409. Detection, control, and eradication of diseases and pests.

      Sec. 10410. Veterinary accreditation program.

      Sec. 10411. Cooperation.

      Sec. 10412. Reimbursable agreements.

      Sec. 10413. Administration and claims.

      Sec. 10414. Penalties.

      Sec. 10415. Enforcement.

      Sec. 10416. Regulations and orders.

      Sec. 10417. Authorization of appropriations.

      Sec. 10418. Repeals and conforming amendments.

Subtitle F--Livestock

      Sec. 10501. Transportation of poultry and other animals.

      Sec. 10502. Swine contractors.

      Sec. 10503. Right to discuss terms of contract.

      Sec. 10504. Veterinary training.

      Sec. 10505. Pseudorabies eradication program.

Subtitle G--Specialty Crops

      Sec. 10601. Marketing orders for caneberries.

      Sec. 10602. Availability of section 32 funds.

      Sec. 10603. Purchase of specialty crops.

      Sec. 10604. Protection for purchasers of farm products.

      Sec. 10605. Farmers’ market promotion program.

      Sec. 10606. National organic certification cost-share program.

      Sec. 10607. Exemption of certified organic products from assessments.

      Sec. 10608. Cranberry acreage reserve program.

Subtitle H--Administration

      Sec. 10701. Initial rate of basic pay for employees of county committees.

      Sec. 10702. Commodity Futures Trading Commission pay comparability.

      Sec. 10703. Overtime and holiday pay.

      Sec. 10704. Assistant Secretary of Agriculture for Civil Rights.

      Sec. 10705. Operation of Graduate School of Department of Agriculture.

      Sec. 10706. Implementation funding and information management.

      Sec. 10707. Outreach and assistance for socially disadvantaged farmers and ranchers.

      Sec. 10708. Transparency and accountability for socially disadvantaged farmers and ranchers; public disclosure requirements for county committee elections.

Subtitle I--General Provisions

      Sec. 10801. Cotton classification services.

      Sec. 10802. Program of public education regarding use of biotechnology in producing food for human consumption.

      Sec. 10803. Chino Dairy Preserve Project.

      Sec. 10804. Grazinglands Research Laboratory.

      Sec. 10805. Food and Agricultural Policy Research Institute.

      Sec. 10806. Market names for catfish and ginseng.

      Sec. 10807. Food Safety Commission.

      Sec. 10808. Pasteurization.

      Sec. 10809. Rulemaking on labeling of irradiated food; certain petitions.

      Sec. 10810. Penalties for violations of Plant Protection Act.

      Sec. 10811. Preclearance quarantine inspections.

      Sec. 10812. Connecticut River Atlantic Salmon Commission.

      Sec. 10813. Pine Point School.

      Sec. 10814. 7-month extension of chapter 12 of title 11 of the United States Code.

      Sec. 10815. Practices involving nonambulatory livestock.

      Sec. 10816. Country of origin labeling.

Subtitle J--Miscellaneous Studies and Reports

      Sec. 10901. Report on specialty crop purchases.

      Sec. 10902. Report on pouched and canned salmon.

      Sec. 10903. Study on updating yields.

      Sec. 10904. Report on effect of farm program payments.

      Sec. 10905. Chiloquin Dam fish passage feasibility study.

      Sec. 10906. Report on geographically disadvantaged farmers and ranchers.

      Sec. 10907. Studies on agricultural research and technology.

      Sec. 10908. Report on tobacco settlement agreement.

      Sec. 10909. Report on sale and use of pesticides for agricultural uses.

      Sec. 10910. Review of operation of agricultural and natural resource programs on tribal trust land.

TITLE I--COMMODITY PROGRAMS

SEC. 1001. DEFINITIONS.

    In this title (other than subtitle C):

      (1) AGRICULTURAL ACT OF 1949- The term ‘Agricultural Act of 1949’ means the Agricultural Act of 1949 (7 U.S.C. 1421 et seq.), as in effect prior to the suspensions under section 171 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7301).

      (2) BASE ACRES- The term ‘base acres’, with respect to a covered commodity on a farm, means the number of acres established under section 1101 with respect to the covered commodity on the election made by the owner of the farm under subsection (a) of such section.

      (3) COUNTER-CYCLICAL PAYMENT- The term ‘counter-cyclical payment’ means a payment made to producers on a farm under section 1104.

      (4) COVERED COMMODITY- The term ‘covered commodity’ means wheat, corn, grain sorghum, barley, oats, upland cotton, rice, soybeans, and other oilseeds.

      (5) DIRECT PAYMENT- The term ‘direct payment’ means a payment made to producers on a farm under section 1103.

      (6) EFFECTIVE PRICE- The term ‘effective price’, with respect to a covered commodity for a crop year, means the price calculated by the Secretary under section 1104 to determine whether counter-cyclical payments are required to be made for that crop year.

      (7) EXTRA LONG STAPLE COTTON- The term ‘extra long staple cotton’ means cotton that--

        (A) is produced from pure strain varieties of the Barbadense species or any hybrid thereof, or other similar types of extra long staple cotton, designated by the Secretary, having characteristics needed for various end uses for which United States upland cotton is not suitable and grown in irrigated cotton-growing regions of the United States designated by the Secretary or other areas designated by the Secretary as suitable for the production of the varieties or types; and

        (B) is ginned on a roller-type gin or, if authorized by the Secretary, ginned on another type gin for experimental purposes.

      (8) LOAN COMMODITY- The term ‘loan commodity’ means wheat, corn, grain sorghum, barley, oats, upland cotton, extra long staple cotton, rice, soybeans, other oilseeds, wool, mohair, honey, dry peas, lentils, and small chickpeas.

      (9) OTHER OILSEED- The term ‘other oilseed’ means a crop of sunflower seed, rapeseed, canola, safflower, flaxseed, mustard seed, or, if designated by the Secretary, another oilseed.

      (10) PAYMENT ACRES- The term ‘payment acres’ means 85 percent of the base acres of a covered commodity on a farm, as established under section 1101, on which direct payments and counter-cyclical payments are made.

      (11) PAYMENT YIELD-

        (A) IN GENERAL- The term ‘payment yield’ means the yield established under section 1102 for a farm for a covered commodity.

        (B) UPDATED PAYMENT YIELD- The term ‘updated payment yield’ means the payment yield elected by the owner of a farm under section 1102(e) to be used in calculating the counter-cyclical payments for the farm.

      (12) PRODUCER- The term ‘producer’ means an owner, operator, landlord, tenant, or sharecropper that shares in the risk of producing a crop and is entitled to share in the crop available for marketing from the farm, or would have shared had the crop been produced. In determining whether a grower of hybrid seed is a producer, the Secretary shall not take into consideration the existence of a hybrid seed contract and shall ensure that program requirements do not adversely affect the ability of the grower to receive a payment under this title.

      (13) SECRETARY- The term ‘Secretary’ means the Secretary of Agriculture.

      (14) STATE- The term ‘State’ means each of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any other territory or possession of the United States.

      (15) TARGET PRICE- The term ‘target price’ means the price per bushel (or other appropriate unit in the case of upland cotton, rice, and other oilseeds) of a covered commodity used to determine the payment rate for counter-cyclical payments.

      (16) UNITED STATES- The term ‘United States’, when used in a geographical sense, means all of the States.

Subtitle A--Direct Payments and Counter-Cyclical Payments

SEC. 1101. ESTABLISHMENT OF BASE ACRES AND PAYMENT ACRES FOR A FARM.

    (a) ELECTION BY OWNER OF BASE ACRES CALCULATION METHOD-

      (1) ALTERNATIVE CALCULATION METHODS- For the purpose of making direct payments and counter-cyclical payments with respect to a farm, the Secretary shall give an owner of the farm an opportunity to elect 1 of the following as the method by which the base acres of all covered commodities on the farm are to be determined:

        (A) Subject to paragraphs (3) and (4), the 4-year average of the following:

          (i) Acreage planted on the farm to covered commodities for harvest, grazing, haying, silage, or other similar purposes for the 1998 through 2001 crop years.

          (ii) Any acreage on the farm that the producers were prevented from planting during the 1998 through 2001 crop years to covered commodities because of drought, flood, or other natural disaster, or other condition beyond the control of the producers, as determined by the Secretary.

        (B) Subject to paragraph (3), the sum of the following:

          (i) The contract acreage (as defined in section 102 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7202)) used by the Secretary to calculate the fiscal year 2002 payment authorized under section 114 of such Act (7 U.S.C. 7214) for the covered commodities on the farm.

          (ii) The 4-year average of eligible oilseed acreage on the farm for the 1998 through 2001 crop years, as determined by the Secretary under paragraph (2).

      (2) ELIGIBLE OILSEED ACREAGE-

        (A) CALCULATION- For purposes of paragraph (1)(B)(ii), the eligible acreage for each oilseed on a farm during each of the 1998 through 2001 crop years shall be determined in the manner provided in paragraph (1)(A), except that the total acreage for all oilseeds on the farm for a crop year may not exceed the difference between--

          (i) the total acreage determined under paragraph (1)(A) for all covered commodities for that crop year; and

          (ii) the total contract acreage determined under paragraph (1)(B)(i).

        (B) EFFECT OF NEGATIVE NUMBER- If the subtraction performed under subparagraph (A) results in a negative number, the eligible oilseed acreage on the farm for that crop year shall be zero for purposes of determining the 4-year average.

        (C) OFFSET OF CONTRACT ACREAGE- The owner of a farm may increase the eligible acreage for an oilseed on the farm by reducing the contract acreage determined under paragraph (1)(B)(i) for 1 or more covered commodities on an acre-for-acre basis, except that the total base acreage for each oilseed on the farm may not exceed the 4-year average of each oilseed determined under paragraph (1)(B)(ii).

      (3) INCLUSION OF ALL 4 YEARS IN AVERAGE- For the purpose of determining a 4-year acreage average under this subsection for a farm, the Secretary shall not exclude any crop year in which a covered commodity was not planted.

      (4) TREATMENT OF MULTIPLE PLANTING OR PREVENTED PLANTING- For the purpose of determining under paragraph (1)(A) the acreage on a farm that producers planted or were prevented from planting during the 1998 through 2001 crop years to covered commodities, if the acreage that was planted or prevented from being planted was devoted to another covered commodity in the same crop year (other than a covered commodity produced under an established practice of double cropping), the owner may elect the commodity to be used for that crop year in determining the 4-year average, but may not include both the initial commodity and the subsequent commodity.

    (b) SINGLE ELECTION; TIME FOR ELECTION-

      (1) NOTICE OF ELECTION OPPORTUNITY- As soon as practicable after the date of enactment of this Act, the Secretary shall provide notice to owners of farms regarding their opportunity to make the election described in subsection (a). The notice shall include the following:

        (A) Notice that the opportunity of an owner to make the election is being provided only once.

        (B) Information regarding the manner in which the election must be made and the time periods and manner in which notice of the election must be submitted to the Secretary.

      (2) ELECTION DEADLINE- Within the time period and in the manner prescribed pursuant to paragraph (1), the owner of a farm shall submit to the Secretary notice of the election made by the owner under subsection (a).

    (c) EFFECT OF FAILURE TO MAKE ELECTION- If the owner of a farm fails to make the election under subsection (a) or fails to timely notify the Secretary of the election made, as required by subsection (b), the owner shall be deemed to have made the election described in subsection (a)(1)(B) to determine base acres for all covered commodities on the farm.

    (d) APPLICATION OF ELECTION TO ALL COVERED COMMODITIES- The election made under subparagraph (A) or (B) of subsection (a)(1), or deemed to be made under subsection (c), with respect to a farm shall apply to all of the covered commodities on the farm.

    (e) TREATMENT OF CONSERVATION RESERVE CONTRACT ACREAGE-

      (1) IN GENERAL- The Secretary shall provide for an adjustment, as appropriate, in the base acres for covered commodities for a farm whenever either of the following circumstances occurs:

        (A) A conservation reserve contract entered into under section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831) with respect to the farm expires or is voluntarily terminated.

        (B) Cropland is released from coverage under a conservation reserve contract by the Secretary.

      (2) SPECIAL PAYMENT RULES- For the crop year in which a base acres adjustment under paragraph (1) is first made, the owner of the farm shall elect to receive either direct payments and counter-cyclical payments with respect to the acreage added to the farm under this subsection or a prorated payment under the conservation reserve contract, but not both.

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

    (g) PREVENTION OF EXCESS BASE ACRES-

      (1) REQUIRED REDUCTION- If the sum of the base acres for a farm, together with the acreage described in paragraph (2), exceeds the actual cropland acreage of the farm, the Secretary shall reduce the base acres for 1 or more covered commodities for the farm or the base acres for peanuts for the farm under subtitle C so that the sum of the base acres and acreage described in paragraph (2) does not exceed the actual cropland acreage of the farm.

      (2) OTHER ACREAGE- For purposes of paragraph (1), the Secretary shall include the following:

        (A) Any base acres for peanuts for the farm under subtitle C.

        (B) Any acreage on the farm enrolled in the conservation reserve program or wetlands reserve program under chapter 1 of subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3830 et seq.).

        (C) Any other acreage on the farm enrolled in a conservation program for which payments are made in exchange for not producing an agricultural commodity on the acreage.

      (3) SELECTION OF ACRES- The Secretary shall give the owner of the farm the opportunity to select the base acres or the base acres for peanuts for the farm under subtitle C against which the reduction required by paragraph (1) will be made.

      (4) EXCEPTION FOR DOUBLE-CROPPED ACREAGE- In applying paragraph (1), the Secretary shall make an exception in the case of double cropping, as determined by the Secretary.

      (5) COORDINATED APPLICATION OF REQUIREMENTS- The Secretary shall take into account section 1302(f) when applying the requirements of this subsection.

    (h) PERMANENT REDUCTION IN BASE ACRES- The owner of a farm may reduce, at any time, the base acres for any covered commodity for the farm. The reduction shall be permanent and made in the manner prescribed by the Secretary.

SEC. 1102. ESTABLISHMENT OF PAYMENT YIELD.

    (a) ESTABLISHMENT AND PURPOSE- For the purpose of making direct payments and counter-cyclical payments under this subtitle, the Secretary shall provide for the establishment of a payment yield for each farm for each covered commodity in accordance with this section.

    (b) USE OF FARM PROGRAM PAYMENT YIELD- Except as otherwise provided in this section, the payment yield for each of the 2002 through 2007 crops of a covered commodity for a farm shall be the farm program payment yield established for the 1995 crop of the covered commodity under section 505 of the Agricultural Act of 1949 (7 U.S.C. 1465), as adjusted by the Secretary to account for any additional yield payments made with respect to that crop under section 505(b)(2) of that Act.

    (c) FARMS WITHOUT FARM PROGRAM PAYMENT YIELD- In the case of a farm for which a farm program payment yield is unavailable for a covered commodity (other than soybeans or other oilseeds), the Secretary shall establish an appropriate payment yield for the covered commodity on the farm taking into consideration the farm program payment yields applicable to the commodity under subsection (b) for similar farms, but before the yields for the similar farms are updated as provided in subsection (e).

    (d) PAYMENT YIELDS FOR OILSEEDS-

      (1) DETERMINATION OF AVERAGE YIELD- In the case of soybeans and each other oilseed, the Secretary shall determine the average yield per planted acre for the oilseed on a farm for the 1998 through 2001 crop years, excluding any crop year in which the acreage planted to the oilseed was zero.

      (2) ADJUSTMENT FOR PAYMENT YIELD- The payment yield for a farm for an oilseed shall be equal to the product of the following:

        (A) The average yield for the oilseed determined under paragraph (1).

        (B) The ratio resulting from dividing the national average yield for the oilseed for the 1981 through 1985 crops by the national average yield for the oilseed for the 1998 through 2001 crops.

      (3) USE OF PARTIAL COUNTY AVERAGE YIELD- If the yield per planted acre for a crop of an oilseed for a farm for any of the 1998 through 2001 crop years was less than 75 percent of the county yield for that oilseed, the Secretary shall assign a yield for that crop year equal to 75 percent of the county yield for the purpose of determining the average under paragraph (1).

    (e) OPPORTUNITY TO PARTIALLY UPDATE YIELDS USED TO DETERMINE COUNTER-CYCLICAL PAYMENTS-

      (1) ELECTION TO UPDATE- If the owner of a farm elects to use the base acres calculation method described in section 1101(a)(1)(A), the owner shall also have a 1-time opportunity to elect to use 1 of the methods described in paragraph (3) to partially update the payment yields that would otherwise be used in calculating any counter-cyclical payments for covered commodities on the farm.

      (2) TIME FOR ELECTION- The election under paragraph (1) shall be made at the same time and in the same manner as the Secretary prescribes for the election required under section 1101.

      (3) METHODS OF UPDATING YIELDS- If the owner of a farm elects to update yields under this subsection, the payment yield for a covered commodity on the farm, for the purpose of calculating counter-cyclical payments only, shall be equal to the yield determined using either of the following:

        (A) The sum of the following:

          (i) The payment yield applicable for direct payments for the covered commodity on the farm.

          (ii) 70 percent of the difference between--

            (I) the average yield per planted acre for the crop of the covered commodity on the farm for the 1998 through 2001 crop years, as determined by the Secretary, excluding any crop year in which the acreage planted to the crop of the covered commodity was zero; and

            (II) the payment yield applicable for direct payments for the covered commodity on the farm.

        (B) 93.5 percent of the average of the yield per planted acre for the crop of the covered commodity on the farm for the 1998 through 2001 crop years, as determined by the Secretary, excluding any crop year in which the acreage planted to the crop of the covered commodity was zero.

      (4) USE OF PARTIAL COUNTY AVERAGE YIELD- If the yield per planted acre for a crop of the covered commodity for a farm for any of the 1998 through 2001 crop years was less than 75 percent of the county yield for that commodity, the Secretary shall assign a yield for that crop year equal to 75 percent of the county yield for the purpose of determining the average yield under paragraph (3).

      (5) APPLICATION OF ELECTION AND METHOD TO ALL COVERED COMMODITIES- The owner of a farm may not elect the method described in paragraph (3)(A) for 1 covered commodity on the farm and the method described in paragraph (3)(B) for other covered commodities on the farm.

SEC. 1103. AVAILABILITY OF DIRECT PAYMENTS.

    (a) PAYMENT REQUIRED- For each of the 2002 through 2007 crop years of each covered commodity, the Secretary shall make direct payments to producers on farms for which payment yields and base acres are established.

    (b) PAYMENT RATE- The payment rates used to make direct payments with respect to covered commodities for a crop year are as follows:

      (1) Wheat, $0.52 per bushel.

      (2) Corn, $0.28 per bushel.

      (3) Grain sorghum, $0.35 per bushel.

      (4) Barley, $0.24 per bushel.

      (5) Oats, $0.024 per bushel.

      (6) Upland cotton, $0.0667 per pound.

      (7) Rice, $2.35 per hundredweight.

      (8) Soybeans, $0.44 per bushel.

      (9) Other oilseeds, $0.0080 per pound.

    (c) PAYMENT AMOUNT- The amount of the direct payment to be paid to the producers on a farm for a covered commodity for a crop year shall be equal to the product of the following:

      (1) The payment rate specified in subsection (b).

      (2) The payment acres of the covered commodity on the farm.

      (3) The payment yield for the covered commodity for the farm.

    (d) TIME FOR PAYMENT-

      (1) IN GENERAL- The Secretary shall make direct payments--

        (A) in the case of the 2002 crop year, as soon as practicable after the date of enactment of this Act; and

        (B) in the case of each of the 2003 through 2007 crop years, not before October 1 of the calendar year in which the crop of the covered commodity is harvested.

      (2) ADVANCE PAYMENTS- At the option of the producers on a farm, up to 50 percent of the direct payment for a covered commodity for any of the 2003 through 2007 crop years shall be paid to the producers in advance. The producers shall select the month within which the advance payment for a crop year will be made. The month selected may be any month during the period beginning on December 1 of the calendar year before the calendar year in which the crop of the covered commodity is harvested through the month within which the direct payment would otherwise be made. The producers may change the selected month for a subsequent advance payment by providing advance notice to the Secretary.

      (3) REPAYMENT OF ADVANCE PAYMENTS- If a producer on a farm that receives an advance direct payment for a crop year ceases to be a producer on that farm, or the extent to which the producer shares in the risk of producing a crop changes, before the date the remainder of the direct payment is made, the producer shall be responsible for repaying the Secretary the applicable amount of the advance payment, as determined by the Secretary.

SEC. 1104. AVAILABILITY OF COUNTER-CYCLICAL PAYMENTS.

    (a) PAYMENT REQUIRED- For each of the 2002 through 2007 crop years for each covered commodity, the Secretary shall make counter-cyclical payments to producers on farms for which payment yields and base acres are established with respect to the covered commodity if the Secretary determines that the effective price for the covered commodity is less than the target price for the covered commodity.

    (b) EFFECTIVE PRICE- For purposes of subsection (a), the effective price for a covered commodity is equal to the sum of the following:

      (1) The higher of the following:

        (A) The national average market price received by producers during the 12-month marketing year for the covered commodity, as determined by the Secretary.

        (B) The national average loan rate for a marketing assistance loan for the covered commodity in effect for the applicable period under subtitle B.

      (2) The payment rate in effect for the covered commodity under section 1103 for the purpose of making direct payments with respect to the covered commodity.

    (c) TARGET PRICE-

      (1) 2002 AND 2003 CROP YEARS- For purposes of the 2002 and 2003 crop years, the target prices for covered commodities shall be as follows:

        (A) Wheat, $3.86 per bushel.

        (B) Corn, $2.60 per bushel.

        (C) Grain sorghum, $2.54 per bushel.

        (D) Barley, $2.21 per bushel.

        (E) Oats, $1.40 per bushel.

        (F) Upland cotton, $0.7240 per pound.

        (G) Rice, $10.50 per hundredweight.

        (H) Soybeans, $5.80 per bushel.

        (I) Other oilseeds, $0.0980 per pound.

      (2) SUBSEQUENT CROP YEARS- For purposes of each of the 2004 through 2007 crop years, the target prices for covered commodities shall be as follows:

        (A) Wheat, $3.92 per bushel.

        (B) Corn, $2.63 per bushel.

        (C) Grain sorghum, $2.57 per bushel.

        (D) Barley, $2.24 per bushel.

        (E) Oats, $1.44 per bushel.

        (F) Upland cotton, $0.7240 per pound.

        (G) Rice, $10.50 per hundredweight.

        (H) Soybeans, $5.80 per bushel.

        (I) Other oilseeds, $0.1010 per pound.

    (d) PAYMENT RATE- The payment rate used to make counter-cyclical payments with respect to a covered commodity for a crop year shall be equal to the difference between--

      (1) the target price for the covered commodity; and

      (2) the effective price determined under subsection (b) for the covered commodity.

    (e) PAYMENT AMOUNT- If counter-cyclical payments are required to be paid for any of the 2002 through 2007 crop years of a covered commodity, the amount of the counter-cyclical payment to be paid to the producers on a farm for that crop year shall be equal to the product of the following:

      (1) The payment rate specified in subsection (d).

      (2) The payment acres of the covered commodity on the farm.

      (3) The payment yield or updated payment yield for the farm, depending on the election of the owner of the farm under section 1102.

    (f) TIME FOR PAYMENTS-

      (1) GENERAL RULE- If the Secretary determines under subsection (a) that counter-cyclical payments are required to be made under this section for the crop of a covered commodity, the Secretary shall make the counter-cyclical payments for the crop as soon as practicable after the end of the 12-month marketing year for the covered commodity.

      (2) AVAILABILITY OF PARTIAL PAYMENTS- If, before the end of the 12-month marketing year for a covered commodity, the Secretary estimates that counter-cyclical payments will be required for the crop of the covered commodity, the Secretary shall give producers on a farm the option to receive partial payments of the counter-cyclical payment projected to be made for that crop of the covered commodity.

      (3) TIME FOR PARTIAL PAYMENTS-

        (A) 2002 THROUGH 2006 CROP YEARS- When the Secretary makes partial payments available under paragraph (2) for a covered commodity for any of the 2002 through 2006 crop years--

          (i) the first partial payment for the crop year shall be made not earlier than October 1, and, to the maximum extent practicable, not later than October 31, of the calendar year in which the crop of the covered commodity is harvested;

          (ii) the second partial payment shall be made not earlier than February 1 of the next calendar year; and

          (iii) the final partial payment shall be made as soon as practicable after the end of the 12-month marketing year for the covered commodity.

        (B) 2007 CROP YEAR- When the Secretary makes partial payments available for a covered commodity for the 2007 crop year--

          (i) the first partial payment shall be made after completion of the first 6 months of the marketing year for the covered commodity; and

          (ii) the final partial payment shall be made as soon as practicable after the end of the 12-month marketing year for the covered commodity.

      (4) AMOUNT OF PARTIAL PAYMENTS-

        (A) 2002 THROUGH 2006 CROP YEARS-

          (i) FIRST PARTIAL PAYMENT- For each of the 2002 through 2006 crop years of a covered commodity, the first partial payment under paragraph (3) to the producers on a farm may not exceed 35 percent of the projected counter-cyclical payment for the covered commodity for the crop year, as determined by the Secretary.

          (ii) SECOND PARTIAL PAYMENT- The second partial payment for a covered commodity for a crop year may not exceed the difference between--

            (I) 70 percent of the projected counter-cyclical payment (including any revision thereof) for the crop of the covered commodity; and

            (II) the amount of the payment made under clause (i).

          (iii) FINAL PAYMENT- The final payment for a covered commodity for a crop year shall be equal to the difference between--

            (I) the actual counter-cyclical payment to be made to the producers for the covered commodity for that crop year; and

            (II) the amount of the partial payments made to the producers under clauses (i) and (ii) for that crop year.

        (B) 2007 CROP YEAR-

          (i) FIRST PARTIAL PAYMENT- For the 2007 crop year, the first partial payment under paragraph (3) to the producers on a farm may not exceed 40 percent of the projected counter-cyclical payment for the covered commodity for the crop year, as determined by the Secretary.

          (ii) FINAL PAYMENT- The final payment for the 2007 crop year shall be equal to the difference between--

            (I) the actual counter-cyclical payment to be made to the producers for the covered commodity for that crop year; and

            (II) the amount of the partial payment made to the producers under clause (i).

      (5) REPAYMENT- The producers on a farm that receive a partial payment under this subsection for a crop year shall repay to the Secretary the amount, if any, by which the total of the partial payments exceed the actual counter-cyclical payment to be made for the covered commodity for that crop year.

SEC. 1105. PRODUCER AGREEMENT REQUIRED AS CONDITION OF PROVISION OF DIRECT PAYMENTS AND COUNTER-CYCLICAL PAYMENTS.

    (a) COMPLIANCE WITH CERTAIN REQUIREMENTS-

      (1) REQUIREMENTS- Before the producers on a farm may receive direct payments or counter-cyclical payments with respect to the farm, the producers shall agree, during the crop year for which the payments are made and in exchange for the payments--

        (A) to comply with applicable conservation requirements under subtitle B of title XII of the Food Security Act of 1985 (16 U.S.C. 3811 et seq.);

        (B) to comply with applicable wetland protection requirements under subtitle C of title XII of the Act (16 U.S.C. 3821 et seq.);

        (C) to comply with the planting flexibility requirements of section 1106;

        (D) to use the land on the farm, in a quantity equal to the attributable base acres for the farm and any base acres for peanuts for the farm under subtitle C for an agricultural or conserving use, and not for a nonagricultural commercial or industrial use, as determined by the Secretary; and

        (E) to effectively control noxious weeds and otherwise maintain the land in accordance with sound agricultural practices, as determined by the Secretary, if the agricultural or conserving use involves the noncultivation of any portion of the land referred to in subparagraph (D).

      (2) COMPLIANCE- The Secretary may issue such rules as the Secretary considers necessary to ensure producer compliance with the requirements of paragraph (1).

      (3) MODIFICATION- At the request of the transferee or owner, the Secretary may modify the requirements of this subsection if the modifications are consistent with the objectives of this subsection, as determined by the Secretary.

    (b) TRANSFER OR CHANGE OF INTEREST IN FARM-

      (1) TERMINATION- Except as provided in paragraph (2), a transfer of (or change in) the interest of the producers on a farm in base acres for which direct payments or counter-cyclical payments are made shall result in the termination of the payments with respect to the base acres, unless the transferee or owner of the acreage agrees to assume all obligations under subsection (a). The termination shall take effect on the date determined by the Secretary.

      (2) EXCEPTION- If a producer entitled to a direct payment or counter-cyclical payment dies, becomes incompetent, or is otherwise unable to receive the payment, the Secretary shall make the payment, in accordance with rules issued by the Secretary.

    (c) ACREAGE REPORTS- As a condition on the receipt of any benefits under this subtitle or subtitle B, the Secretary shall require producers on a farm to submit to the Secretary annual acreage reports with respect to all cropland on the farm.

    (d) TENANTS AND SHARECROPPERS- In carrying out this subtitle, the Secretary shall provide adequate safeguards to protect the interests of tenants and sharecroppers.

    (e) SHARING OF PAYMENTS- The Secretary shall provide for the sharing of direct payments and counter-cyclical payments among the producers on a farm on a fair and equitable basis.

SEC. 1106. PLANTING FLEXIBILITY.

    (a) PERMITTED CROPS- Subject to subsection (b), any commodity or crop may be planted on base acres on a farm.

    (b) LIMITATIONS REGARDING CERTAIN COMMODITIES-

      (1) GENERAL LIMITATION- The planting of an agricultural commodity specified in paragraph (3) shall be prohibited on base acres unless the commodity, if planted, is destroyed before harvest.

      (2) TREATMENT OF TREES AND OTHER PERENNIALS- The planting of an agricultural commodity specified in paragraph (3) that is produced on a tree or other perennial plant shall be prohibited on base acres.

      (3) COVERED AGRICULTURAL COMMODITIES- Paragraphs (1) and (2) apply to the following agricultural commodities:

        (A) Fruits.

        (B) Vegetables (other than lentils, mung beans, and dry peas).

        (C) Wild rice.

    (c) EXCEPTIONS- Paragraphs (1) and (2) of subsection (b) shall not limit the planting of an agricultural commodity specified in paragraph (3) of that subsection--

      (1) in any region in which there is a history of double-cropping of covered commodities with agricultural commodities specified in subsection (b)(3), as determined by the Secretary, in which case the double-cropping shall be permitted;

      (2) on a farm that the Secretary determines has a history of planting agricultural commodities specified in subsection (b)(3) on base acres, except that direct payments and counter-cyclical payments shall be reduced by an acre for each acre planted to such an agricultural commodity; or

      (3) by the producers on a farm that the Secretary determines has an established planting history of a specific agricultural commodity specified in subsection (b)(3), except that--

        (A) the quantity planted may not exceed the average annual planting history of such agricultural commodity by the producers on the farm in the 1991 through 1995 or 1998 through 2001 crop years (excluding any crop year in which no plantings were made), as determined by the Secretary; and

        (B) direct payments and counter-cyclical payments shall be reduced by an acre for each acre planted to such agricultural commodity.

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

SEC. 1107. RELATION TO REMAINING PAYMENT AUTHORITY UNDER PRODUCTION FLEXIBILITY CONTRACTS.

    (a) TERMINATION OF SUPERSEDED PAYMENT AUTHORITY- Notwithstanding section 113(a)(7) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7213(a)(7)) or any other provision of law, the Secretary shall not make payments for fiscal year 2002 after the date of enactment of this Act under a production flexibility contract entered into under section 111 of that Act (7 U.S.C. 7211) unless requested by the producer that is a party to the contract.

    (b) CONTRACT PAYMENTS MADE BEFORE ENACTMENT- If a producer receives all or any portion of the payment authorized for fiscal year 2002 under a production flexibility contract, the Secretary shall reduce the amount of the direct payment otherwise due the producer for the 2002 crop year under section 1103 by the amount of the fiscal year 2002 payment received by the producer under the production flexibility contract.

SEC. 1108. PERIOD OF EFFECTIVENESS.

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

Subtitle B--Marketing Assistance Loans and Loan Deficiency Payments

SEC. 1201. AVAILABILITY OF NONRECOURSE MARKETING ASSISTANCE LOANS FOR LOAN COMMODITIES.

    (a) NONRECOURSE LOANS AVAILABLE-

      (1) AVAILABILITY- For each of the 2002 through 2007 crops of each loan commodity, the Secretary shall make available to producers on a farm nonrecourse marketing assistance loans for loan commodities produced on the farm.

      (2) TERMS AND CONDITIONS- The marketing assistance loans shall be made under terms and conditions that are prescribed by the Secretary and at the loan rate established under section 1202 for the loan commodity.

    (b) ELIGIBLE PRODUCTION- The producers on a farm shall be eligible for a marketing assistance loan under subsection (a) for any quantity of a loan commodity produced on the farm.

    (c) TREATMENT OF CERTAIN COMMINGLED COMMODITIES- In carrying out this subtitle, the Secretary shall make loans to producers on a farm that would be eligible to obtain a marketing assistance loan, but for the fact the loan commodity owned by the producers on the farm commingled with loan commodities of other producers in facilities unlicensed for the storage of agricultural commodities by the Secretary or a State licensing authority, if the producers obtaining the loan agree to immediately redeem the loan collateral in accordance with section 166 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7286).

    (d) COMPLIANCE WITH CONSERVATION AND WETLANDS REQUIREMENTS- As a condition of the receipt of a marketing assistance loan under subsection (a), the producer shall comply with applicable conservation requirements under subtitle B of title XII of the Food Security Act of 1985 (16 U.S.C. 3811 et seq.) and applicable wetland protection requirements under subtitle C of title XII of the Act (16 U.S.C. 3821 et seq.) during the term of the loan.

    (e) TERMINATION OF SUPERSEDED LOAN AUTHORITY- Notwithstanding section 131 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7231), nonrecourse marketing assistance loans shall not be made for the 2002 crop of loan commodities under subtitle C of title I of such Act.

SEC. 1202. LOAN RATES FOR NONRECOURSE MARKETING ASSISTANCE LOANS.

    (a) 2002 AND 2003 CROP YEARS- For purposes of the 2002 and 2003 crop years, the loan rate for a marketing assistance loan under section 1201 for a loan commodity shall be equal to the following:

      (1) In the case of wheat, $2.80 per bushel.

      (2) In the case of corn, $1.98 per bushel.

      (3) In the case of grain sorghum, $1.98 per bushel.

      (4) In the case of barley, $1.88 per bushel.

      (5) In the case of oats, $1.35 per bushel.

      (6) In the case of upland cotton, $0.52 per pound.

      (7) In the case of extra long staple cotton, $0.7977 per pound.

      (8) In the case of rice, $6.50 per hundredweight.

      (9) In the case of soybeans, $5.00 per bushel.

      (10) In the case of other oilseeds, $0.0960 per pound.

      (11) In the case of graded wool, $1.00 per pound.

      (12) In the case of nongraded wool, $0.40 per pound.

      (13) In the case of mohair, $4.20 per pound.

      (14) In the case of honey, $0.60 per pound.

      (15) In the case of dry peas, $6.33 per hundredweight.

      (16) In the case of lentils, $11.94 per hundredweight.

      (17) In the case of small chickpeas, $7.56 per hundredweight.

    (b) 2004 THROUGH 2007 CROP YEARS- For purposes of the 2004 through 2007 crop years, the loan rate for a marketing assistance loan under section 1201 for a loan commodity shall be equal to the following:

      (1) In the case of wheat, $2.75 per bushel.

      (2) In the case of corn, $1.95 per bushel.

      (3) In the case of grain sorghum, $1.95 per bushel.

      (4) In the case of barley, $1.85 per bushel.

      (5) In the case of oats, $1.33 per bushel.

      (6) In the case of upland cotton, $0.52 per pound.

      (7) In the case of extra long staple cotton, $0.7977 per pound.

      (8) In the case of rice, $6.50 per hundredweight.

      (9) In the case of soybeans, $5.00 per bushel.

      (10) In the case of other oilseeds, $0.0930 per pound.

      (11) In the case of graded wool, $1.00 per pound.

      (12) In the case of nongraded wool, $0.40 per pound.

      (13) In the case of mohair, $4.20 per pound.

      (14) In the case of honey, $0.60 per pound.

      (15) In the case of dry peas, $6.22 per hundredweight.

      (16) In the case of lentils, $11.72 per hundredweight.

      (17) In the case of small chickpeas, $7.43 per hundredweight.

SEC. 1203. 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. REPAYMENT OF LOANS.

    (a) GENERAL RULE- The Secretary shall permit the producers on a farm to repay a marketing assistance loan under section 1201 for a loan commodity (other than upland cotton, rice, and extra long staple cotton) at a rate that is the lesser of--

      (1) the loan rate established for the commodity under section 1202, plus interest (determined in accordance with section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283)); or

      (2) a rate that the Secretary determines will--

        (A) minimize potential loan forfeitures;

        (B) minimize the accumulation of stocks of the commodity by the Federal Government;

        (C) minimize the cost incurred by the Federal Government in storing the commodity;

        (D) allow the commodity produced in the United States to be marketed freely and competitively, both domestically and internationally; and

        (E) minimize discrepancies in marketing loan benefits across State boundaries and across county boundaries.

    (b) REPAYMENT RATES FOR UPLAND COTTON AND RICE- The Secretary shall permit producers to repay a marketing assistance loan under section 1201 for upland cotton and rice at a rate that is the lesser of--

      (1) the loan rate established for the commodity under section 1202, plus interest (determined in accordance with section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283)); or

      (2) the prevailing world market price for the commodity (adjusted to United States quality and location), as determined by the Secretary.

    (c) REPAYMENT RATES FOR EXTRA LONG STAPLE COTTON- Repayment of a marketing assistance loan for extra long staple cotton shall be at the loan rate established for the commodity under section 1202, plus interest (determined in accordance with section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283)).

    (d) PREVAILING WORLD MARKET PRICE- For purposes of this section and section 1207, the Secretary shall prescribe by regulation--

      (1) a formula to determine the prevailing world market price for upland cotton and rice, adjusted to United States quality and location; and

      (2) a mechanism by which the Secretary shall announce periodically the prevailing world market price for upland cotton and rice.

    (e) ADJUSTMENT OF PREVAILING WORLD MARKET PRICE FOR UPLAND COTTON-

      (1) IN GENERAL- During the period beginning on the date of the enactment of this Act through July 31, 2008, the prevailing world market price for upland cotton (adjusted to United States quality and location) established under subsection (d) shall be further adjusted if--

        (A) the adjusted prevailing world market price is less than 115 percent of the loan rate for upland cotton established under section 1202, as determined by the Secretary; and

        (B) the Friday through Thursday average price quotation for the lowest-priced United States growth as quoted for Middling (M) 1 3/32 -inch cotton delivered C.I.F. Northern Europe is greater than the Friday through Thursday average price of the 5 lowest-priced growths of upland cotton, as quoted for Middling (M) 1 3/32 -inch cotton, delivered C.I.F. Northern Europe (referred to in this section as the ‘Northern Europe price’).

      (2) FURTHER ADJUSTMENT- Except as provided in paragraph (3), the adjusted prevailing world market price for upland cotton shall be further adjusted on the basis of some or all of the following data, as available:

        (A) The United States share of world exports.

        (B) The current level of cotton export sales and cotton export shipments.

        (C) Other data determined by the Secretary to be relevant in establishing an accurate prevailing world market price for upland cotton (adjusted to United States quality and location).

      (3) LIMITATION ON FURTHER ADJUSTMENT- The adjustment under paragraph (2) may not exceed the difference between--

        (A) the Friday through Thursday average price for the lowest-priced United States growth as quoted for Middling 1 3/32 -inch cotton delivered C.I.F. Northern Europe; and

        (B) the Northern Europe price.

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

SEC. 1205. LOAN DEFICIENCY PAYMENTS.

    (a) AVAILABILITY OF LOAN DEFICIENCY PAYMENTS-

      (1) IN GENERAL- Except as provided in subsection (d), the Secretary may make loan deficiency payments available to producers on a farm that, although eligible to obtain a marketing assistance loan under section 1201 with respect to a loan commodity, agree to forgo obtaining the loan for the commodity in return for loan deficiency payments under this section.

      (2) UNSHORN PELTS, HAY, AND SILAGE- Nongraded wool in the form of unshorn pelts and hay and silage derived from a loan commodity are not eligible for a marketing assistance loan under section 1201. However, effective for the 2002 through 2007 crop years, the Secretary may make loan deficiency payments available under this section to producers on a farm that produce unshorn pelts or hay and silage derived from a loan commodity.

    (b) COMPUTATION- A loan deficiency payment for a loan commodity or commodity referred to in subsection (a)(2) shall be computed by multiplying--

      (1) the payment rate determined under subsection (c) for the commodity; by

      (2) the quantity of the commodity produced by the eligible producers, excluding any quantity for which the producers obtain a marketing assistance loan under section 1201.

    (c) PAYMENT RATE-

      (1) IN GENERAL- In the case of a loan commodity, the payment rate shall be the amount by which--

        (A) the loan rate established under section 1202 for the loan commodity; exceeds

        (B) the rate at which a marketing assistance loan for the loan commodity may be repaid under section 1204.

      (2) UNSHORN PELTS- In the case of unshorn pelts, the payment rate shall be the amount by which--

        (A) the loan rate established under section 1202 for ungraded wool; exceeds

        (B) the rate at which a marketing assistance loan for ungraded wool may be repaid under section 1204.

      (3) HAY AND SILAGE- In the case of hay or silage derived from a loan commodity, the payment rate shall be the amount by which--

        (A) the loan rate established under section 1202 for the loan commodity from which the hay or silage is derived; exceeds

        (B) the rate at which a marketing assistance loan for the loan commodity may be repaid under section 1204.

    (d) EXCEPTION FOR EXTRA LONG STAPLE COTTON- This section shall not apply with respect to extra long staple cotton.

    (e) EFFECTIVE DATE FOR PAYMENT RATE DETERMINATION- The Secretary shall determine the amount of the loan deficiency payment to be made under this section to the producers on a farm with respect to a quantity of a loan commodity or commodity referred to in subsection (a)(2) using the payment rate in effect under subsection (c) as of the date the producers request the payment.

    (f) SPECIAL LOAN DEFICIENCY PAYMENT RULES-

      (1) FIRST-TIME LOAN COMMODITIES- For the 2002 crop of wool, mohair, honey, dry peas, lentils and small chickpeas, in the case of producers of such a crop that would be eligible for a loan deficiency payment under this section except for the fact that the producers lost beneficial interest in the crop prior to the date of publication of the regulations implementing this section, the producers shall be eligible for a loan deficiency payment as of the date producers marketed or otherwise lost beneficial interest in the crop, as determined by the Secretary.

      (2) 2001 CROP YEAR- Section 135 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7235) is amended--

        (A) in subsection (a)(2), by striking ‘2000 crop year’ and inserting ‘2000 and 2001 crop years’; and

        (B) by adding at the end the following:

    ‘(g) EFFECTIVE DATE FOR PAYMENT RATE DETERMINATION- For the 2001 crop year, the Secretary shall determine the amount of the loan deficiency payment to be made under this section to the producers on a farm with respect to a quantity of a loan commodity using the payment rate in effect under subsection (c) as of the earlier of the following:

      ‘(1) The date on which the producers marketed or otherwise lost beneficial interest in the crop of the loan commodity, as determined by the Secretary.

      ‘(2) The date the producers requested the payment.’.

SEC. 1206. PAYMENTS IN LIEU OF LOAN DEFICIENCY PAYMENTS FOR GRAZED ACREAGE.

    (a) ELIGIBLE PRODUCERS-

      (1) IN GENERAL- Effective for the 2002 through 2007 crop years, in the case of a producer that would be eligible for a loan deficiency payment under section 1205 for wheat, barley, or oats, but that elects to use acreage planted to the wheat, barley, or oats for the grazing of livestock, the Secretary shall make a payment to the producer under this section if the producer enters into an agreement with the Secretary to forgo any other harvesting of the wheat, barley, or oats on that acreage.

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

    (b) PAYMENT AMOUNT-

      (1) IN GENERAL- The amount of a payment made under this section to a producer on a farm described in subsection (a)(1) shall be equal to the amount determined by multiplying--

        (A) the loan deficiency payment rate determined under section 1205(c) in effect, as of the date of the agreement, for the county in which the farm is located; by

        (B) the payment quantity determined by multiplying--

          (i) the quantity of the grazed acreage on the farm with respect to which the producer elects to forgo harvesting of wheat, barley, or oats; and

          (ii) the payment yield in effect for the calculation of direct payments under subtitle A with respect to that loan commodity on the farm or, in the case of a farm without a payment yield for that loan commodity, an appropriate yield established by the Secretary in a manner consistent with section 1102(c).

      (2) GRAZING OF TRITICALE ACREAGE- The amount of a payment made under this section to a producer on a farm described in subsection (a)(2) shall be equal to the amount determined by multiplying--

        (A) the loan deficiency payment rate determined under section 1205(c) in effect for wheat, as of the date of the agreement, for the county in which the farm is located; by

        (B) the payment quantity determined by multiplying--

          (i) the quantity of the grazed acreage on the farm with respect to which the producer elects to forgo harvesting of triticale; and

          (ii) the payment yield in effect for the calculation of direct payments under subtitle A with respect to wheat on the farm or, in the case of a farm without a payment yield for wheat, an appropriate yield established by the Secretary in a manner consistent with section 1102(c).

    (c) TIME, MANNER, AND AVAILABILITY OF PAYMENT-

      (1) TIME AND MANNER- A payment under this section shall be made at the same time and in the same manner as loan deficiency payments are made under section 1205.

      (2) AVAILABILITY- The Secretary shall establish an availability period for the payments authorized by this section. In the case of wheat, barley, and oats, the availability period shall be consistent with the availability period for the commodity established by the Secretary for marketing assistance loans authorized by this subtitle.

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

SEC. 1207. SPECIAL MARKETING LOAN PROVISIONS FOR UPLAND COTTON.

    (a) Cotton User Marketing Certificates-

      (1) ISSUANCE- During the period beginning on the date of the enactment of this Act through July 31, 2008, the Secretary shall issue marketing certificates or cash payments, at the option of the recipient, to domestic users and exporters for documented purchases by domestic users and sales for export by exporters made in the week following a consecutive 4-week period in which--

        (A) the Friday through Thursday average price quotation for the lowest-priced United States growth, as quoted for Middling (M) 1 3/32 -inch cotton, delivered C.I.F. Northern Europe exceeds the Northern Europe price by more than 1.25 cents per pound; and

        (B) the prevailing world market price for upland cotton (adjusted to United States quality and location) does not exceed 134 percent of the loan rate for upland cotton established under section 1202.

      (2) VALUE OF CERTIFICATES OR PAYMENTS- The value of the marketing certificates or cash payments shall be based on the amount of the difference (reduced by 1.25 cents per pound) in the prices during the fourth week of the consecutive 4-week period multiplied by the quantity of upland cotton included in the documented sales.

      (3) ADMINISTRATION OF MARKETING CERTIFICATES-

        (A) REDEMPTION, MARKETING, OR EXCHANGE- The Secretary shall establish procedures for redeeming marketing certificates for cash or marketing or exchange of the certificates for agricultural commodities owned by the Commodity Credit Corporation or pledged to the Commodity Credit Corporation as collateral for a loan in such manner, and at such price levels, as the Secretary determines will best effectuate the purposes of cotton user marketing certificates, including enhancing the competitiveness and marketability of United States cotton. Any price restrictions that would otherwise apply to the disposition of agricultural commodities by the Commodity Credit Corporation shall not apply to the redemption of certificates under this subsection.

        (B) DESIGNATION OF COMMODITIES AND PRODUCTS- To the extent practicable, the Secretary shall permit owners of certificates to designate the commodities and products, including storage sites, the owners would prefer to receive in exchange for certificates

        (C) TRANSFERS- Marketing certificates issued to domestic users and exporters of upland cotton may be transferred to other persons in accordance with regulations issued by the Secretary.

      (4) DELAYED APPLICATION OF THRESHOLD- Through July 31, 2006, the Secretary shall make the calculations under paragraphs (1)(A) and (2) without regard to the 1.25 cent threshold provided under those paragraphs.

    (b) Special Import Quota-

      (1) ESTABLISHMENT-

        (A) IN GENERAL- The President shall carry out an import quota program during the period beginning on the date of the enactment of this Act through July 31, 2008, as provided in this subsection.

        (B) PROGRAM REQUIREMENTS- Except as provided in subparagraph (C), whenever the Secretary determines and announces that for any consecutive 4-week period, the Friday through Thursday average price quotation for the lowest-priced United States growth, as quoted for Middling (M) 1 3/32 -inch cotton, delivered C.I.F. Northern Europe, adjusted for the value of any certificate issued under subsection (a), exceeds the Northern Europe price by more than 1.25 cents per pound, there shall immediately be in effect a special import quota.

        (C) TIGHT DOMESTIC SUPPLY- During any month for which the Secretary estimates the season-ending United States upland cotton stocks-to-use ratio, as determined under subparagraph (D), to be below 16 percent, the Secretary, in making the determination under subparagraph (B), shall not adjust the Friday through Thursday average price quotation for the lowest-priced United States growth, as quoted for Middling (M) 1 3/32 -inch cotton, delivered C.I.F. Northern Europe, for the value of any certificates issued under subsection (a).

        (D) SEASON-ENDING UNITED STATES STOCKS-TO-USE RATIO- For the purposes of making estimates under subparagraph (C), the Secretary shall, on a monthly basis, estimate and report the season-ending United States upland cotton stocks-to-use ratio, excluding projected raw cotton imports but including the quantity of raw cotton that has been imported into the United States during the marketing year.

        (E) DELAYED APPLICATION OF THRESHOLD- Through July 31, 2006, the Secretary shall make the calculation under subparagraph (B) without regard to the 1.25 cent threshold provided under that subparagraph.

      (2) QUANTITY- The quota shall be equal to one week’s consumption of upland cotton by domestic mills at the seasonally adjusted average rate of the most recent three months for which data are available.

      (3) APPLICATION- The quota shall apply to upland cotton purchased not later than 90 days after the date of the Secretary’s announcement under paragraph (1) and entered into the United States not later than 180 days after the date.

      (4) OVERLAP- A special quota period may be established that overlaps any existing quota period if required by paragraph (1), except that a special quota period may not be established under this subsection if a quota period has been established under subsection (c).

      (5) PREFERENTIAL TARIFF TREATMENT- The quantity under a special import quota shall be considered to be an in-quota quantity for purposes of--

        (A) section 213(d) of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2703(d));

        (B) section 204 of the Andean Trade Preference Act (19 U.S.C. 3203);

        (C) section 503(d) of the Trade Act of 1974 (19 U.S.C. 2463(d)); and

        (D) General Note 3(a)(iv) to the Harmonized Tariff Schedule.

      (6) DEFINITION- In this subsection, the term ‘special import quota’ means a quantity of imports that is not subject to the over-quota tariff rate of a tariff-rate quota.

      (7) LIMITATION- The quantity of cotton entered into the United States during any marketing year under the special import quota established under this subsection may not exceed the equivalent of 5 week’s consumption of upland cotton by domestic mills at the seasonally adjusted average rate of the 3 months immediately preceding the first special import quota established in any marketing year.

    (c) LIMITED GLOBAL IMPORT QUOTA FOR UPLAND COTTON-

      (1) IN GENERAL- The President shall carry out an import quota program that provides that whenever the Secretary determines and announces that the average price of the base quality of upland cotton, as determined by the Secretary, in the designated spot markets for a month exceeded 130 percent of the average price of such quality of cotton in the markets for the preceding 36 months, notwithstanding any other provision of law, there shall immediately be in effect a limited global import quota subject to the following conditions:

        (A) QUANTITY- The quantity of the quota shall be equal to 21 days of domestic mill consumption of upland cotton at the seasonally adjusted average rate of the most recent 3 months for which data are available.

        (B) QUANTITY IF PRIOR QUOTA- If a quota has been established under this subsection during the preceding 12 months, the quantity of the quota next established under this subsection shall be the smaller of 21 days of domestic mill consumption calculated under subparagraph (A) or the quantity required to increase the supply to 130 percent of the demand.

        (C) PREFERENTIAL TARIFF TREATMENT- The quantity under a limited global import quota shall be considered to be an in-quota quantity for purposes of--

          (i) section 213(d) of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2703(d));

          (ii) section 204 of the Andean Trade Preference Act (19 U.S.C. 3203);

          (iii) section 503(d) of the Trade Act of 1974 (19 U.S.C. 2463(d)); and

          (iv) General Note 3(a)(iv) to the Harmonized Tariff Schedule.

        (D) DEFINITIONS- In this subsection:

          (i) SUPPLY- The term ‘supply’ means, using the latest official data of the Bureau of the Census, the Department of Agriculture, and the Department of the Treasury--

            (I) the carry-over of upland cotton at the beginning of the marketing year (adjusted to 480-pound bales) in which the quota is established;

            (II) production of the current crop; and

            (III) imports to the latest date available during the marketing year.

          (ii) DEMAND- The term ‘demand’ means--

            (I) the average seasonally adjusted annual rate of domestic mill consumption during the most recent 3 months for which data are available; and

            (II) the larger of--

(aa) average exports of upland cotton during the preceding 6 marketing years; or

(bb) cumulative exports of upland cotton plus outstanding export sales for the marketing year in which the quota is established.

          (iii) LIMITED GLOBAL IMPORT QUOTA- The term ‘limited global import quota’ means a quantity of imports that is not subject to the over-quota tariff rate of a tariff-rate quota.

        (E) QUOTA ENTRY PERIOD- When a quota is established under this subsection, cotton may be entered under the quota during the 90-day period beginning on the date the quota is established by the Secretary.

      (2) NO OVERLAP- Notwithstanding paragraph (1), a quota period may not be established that overlaps an existing quota period or a special quota period established under subsection (b).

SEC. 1208. SPECIAL COMPETITIVE PROVISIONS FOR EXTRA LONG STAPLE COTTON.

    (a) COMPETITIVENESS PROGRAM- Notwithstanding any other provision of law, during the period beginning on the date of the enactment of this Act through July 31, 2008, the Secretary shall carry out a program--

      (1) to maintain and expand the domestic use of extra long staple cotton produced in the United States;

      (2) to increase exports of extra long staple cotton produced in the United States; and

      (3) to ensure that extra long staple cotton produced in the United States remains competitive in world markets.

    (b) PAYMENTS UNDER PROGRAM; TRIGGER- Under the program, the Secretary shall make payments available under this section whenever--

      (1) for a consecutive 4-week period, the world market price for the lowest priced competing growth of extra long staple cotton (adjusted to United States quality and location and for other factors affecting the competitiveness of such cotton), as determined by the Secretary, is below the prevailing United States price for a competing growth of extra long staple cotton; and

      (2) the lowest priced competing growth of extra long staple cotton (adjusted to United States quality and location and for other factors affecting the competitiveness of such cotton), as determined by the Secretary, is less than 134 percent of the loan rate for extra long staple cotton.

    (c) ELIGIBLE RECIPIENTS- The Secretary shall make payments available under this section to domestic users of extra long staple cotton produced in the United States and exporters of extra long staple cotton produced in the United States that enter into an agreement with the Commodity Credit Corporation to participate in the program under this section.

    (d) PAYMENT AMOUNT- Payments under this section shall be based on the amount of the difference in the prices referred to in subsection (b)(1) during the fourth week of the consecutive 4-week period multiplied by the amount of documented purchases by domestic users and sales for export by exporters made in the week following such a consecutive 4-week period.

    (e) FORM OF PAYMENT- Payments under this section shall be made through the issuance of cash or marketing certificates, at the option of eligible recipients of the payments.

SEC. 1209. AVAILABILITY OF RECOURSE LOANS FOR HIGH MOISTURE FEED GRAINS AND SEED COTTON.

    (a) HIGH MOISTURE FEED GRAINS-

      (1) RECOURSE LOANS AVAILABLE- For each of the 2002 through 2007 crops of corn and grain sorghum, the Secretary shall make available recourse loans, as determined by the Secretary, to producers on a farm that--

        (A) normally harvest all or a portion of their crop of corn or grain sorghum in a high moisture state;

        (B) present--

          (i) certified scale tickets from an inspected, certified commercial scale, including a licensed warehouse, feedlot, feed mill, distillery, or other similar entity approved by the Secretary, pursuant to regulations issued by the Secretary; or

          (ii) field or other physical measurements of the standing or stored crop in regions of the United States, as determined by the Secretary, that do not have certified commercial scales from which certified scale tickets may be obtained within reasonable proximity of harvest operation;

        (C) certify that they were the owners of the feed grain at the time of delivery to, and that the quantity to be placed under loan under this subsection was in fact harvested on the farm and delivered to, a feedlot, feed mill, or commercial or on-farm high-moisture storage facility, or to a facility maintained by the users of corn and grain sorghum in a high moisture state; and

        (D) comply with deadlines established by the Secretary for harvesting the corn or grain sorghum and submit applications for loans under this subsection within deadlines established by the Secretary.

      (2) ELIGIBILITY OF ACQUIRED FEED GRAINS- A loan under this subsection shall be made on a quantity of corn or grain sorghum of the same crop acquired by the producer equivalent to a quantity determined by multiplying--

        (A) the acreage of the corn or grain sorghum in a high moisture state harvested on the producer’s farm; by

        (B) the lower of the farm program payment yield used to make counter-cyclical payments under subtitle A or the actual yield on a field, as determined by the Secretary, that is similar to the field from which the corn or grain sorghum was obtained.

      (3) HIGH MOISTURE STATE DEFINED- In this subsection, the term ‘high moisture state’ means corn or grain sorghum having a moisture content in excess of Commodity Credit Corporation standards for marketing assistance loans made by the Secretary under section 1201.

    (b) RECOURSE LOANS AVAILABLE FOR SEED COTTON- For each of the 2002 through 2007 crops of upland cotton and extra long staple cotton, the Secretary shall make available recourse seed cotton loans, as determined by the Secretary, on any production.

    (c) REPAYMENT RATES- Repayment of a recourse loan made under this section shall be at the loan rate established for the commodity by the Secretary, plus interest (determined in accordance with section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283)).

    (d) TERMINATION OF SUPERSEDED LOAN AUTHORITY- Notwithstanding section 137 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7237), recourse loans shall not be made for the 2002 crop of corn, grain sorghum, and seed cotton under such section.

Subtitle C--Peanuts

SEC. 1301. DEFINITIONS.

    In this subtitle:

      (1) BASE ACRES FOR PEANUTS- The term ‘base acres for peanuts’ means the number of acres assigned to a farm by historic peanut producers pursuant to section 1302(b).

      (2) COUNTER-CYCLICAL PAYMENT- The term ‘counter-cyclical payment’ means a payment made under section 1304.

      (3) EFFECTIVE PRICE- The term ‘effective price’ means the price calculated by the Secretary under section 1304 for peanuts to determine whether counter-cyclical payments are required to be made under that section for a crop year.

      (4) DIRECT PAYMENT- The term ‘direct payment’ means a payment made under section 1303.

      (5) HISTORIC PEANUT PRODUCER- The term ‘historic peanut producer’ means a producer on a farm in the United States that produced or was prevented from planting peanuts during any or all of the 1998 through 2001 crop years.

      (6) PAYMENT ACRES- The term ‘payment acres’ means--

        (A) for the 2002 crop of peanuts, 85 percent of the average acreage determined under section 1302(a)(2) for an historic peanut producer; and

        (B) for the 2003 through 2007 crops of peanuts, 85 percent of the base acres for peanuts assigned to a farm under section 1302(b).

      (7) PAYMENT YIELD- The term ‘payment yield’ means the yield assigned to a farm by historic peanut producers pursuant to section 1302(b).

      (8) PRODUCER- The term ‘producer’ means an owner, operator, landlord, tenant, or sharecropper that shares in the risk of producing a crop on a farm and is entitled to share in the crop available for marketing from the farm, or would have shared had the crop been produced. In determining whether a grower of hybrid seed is a producer, the Secretary shall not take into consideration the existence of a hybrid seed contract and shall ensure that program requirements do not adversely affect the ability of the grower to receive a payment under this subtitle.

      (9) SECRETARY- The term ‘Secretary’ means the Secretary of Agriculture.

      (10) STATE- The term ‘State’ means each of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any other territory or possession of the United States.

      (11) TARGET PRICE- The term ‘target price’ means the price per ton of peanuts used to determine the payment rate for counter-cyclical payments.

      (12) UNITED STATES- The term ‘United States’, when used in a geographical sense, means all of the States.

SEC. 1302. ESTABLISHMENT OF PAYMENT YIELD AND BASE ACRES FOR PEANUTS FOR A FARM.

    (a) AVERAGE YIELD AND ACREAGE AVERAGE FOR HISTORIC PEANUT PRODUCERS-

      (1) DETERMINATION OF AVERAGE YIELD-

        (A) IN GENERAL- The Secretary shall determine, for each historic peanut producer, the average yield for peanuts on each farm on which the historic peanut producer planted peanuts for harvest for the 1998 through 2001 crop years, excluding any crop year in which the producer did not plant or was prevented from planting peanuts.

        (B) ASSIGNED YIELDS- For the purposes of determining the 4-year average yield for an historic peanut producer under this paragraph, the historic peanut producer may elect to substitute for a farm, for not more than 3 of the 1998 through 2001 crop years in which the producer planted peanuts on the farm, the average yield for peanuts produced in the county in which the farm is located for the 1990 through 1997 crop years.

      (2) DETERMINATION OF ACREAGE AVERAGE-

        (A) IN GENERAL- The Secretary shall determine, for each historic peanut producer, the 4-year average of the following:

          (i) Acreage planted to peanuts on each farm on which the historic peanut producer planted peanuts for harvest for the 1998 through 2001 crop years.

          (ii) Any acreage on each farm that the historic peanut producer was prevented from planting to peanuts during the 1998 through 2001 crop years because of drought, flood, or other natural disaster, or other condition beyond the control of the historic peanut producer, as determined by the Secretary.

        (B) INCLUSION OF ALL 4 YEARS IN AVERAGE- For the purposes of determining the 4-year acreage average for an historic peanut producer under this paragraph, the Secretary shall not exclude any crop year in which the producer did not plant peanuts.

        (C) PROPORTIONAL SHARES- If more than 1 historic peanut producer shared in the risk of producing the crop on a farm, the historic peanut producers shall receive their proportional share of the number of acres planted (or prevented from being planted) to peanuts for harvest on the farm based on the sharing arrangement that was in effect among the producers for the crop.

      (3) TIME FOR DETERMINATIONS- The Secretary shall make the determinations required by this subsection as soon as practicable after the date of enactment of this Act.

      (4) SPECIAL CONSIDERATIONS- In making the determinations required by this subsection, the Secretary shall take into account changes in the number, identity, or interest of producers sharing in the risk of producing a peanut crop since the 1998 crop year, including providing a method for the assignment of average acres and average yield to a farm--

        (A) when an historic peanut producer is no longer living;

        (B) when an entity composed of historic peanut producers has been dissolved; or

        (C) in other appropriate situations, as determined by the Secretary.

    (b) ASSIGNMENT OF AVERAGE YIELDS AND AVERAGE ACREAGE TO FARMS-

      (1) ASSIGNMENT BY HISTORIC PEANUT PRODUCERS- The Secretary shall give each historic peanut producer an opportunity to assign the average peanut yield and average acreage determined under subsection (a) for each farm of the historic peanut producer to cropland on that farm or another farm in the same State or a contiguous State.

      (2) LIMITATION ON ACREAGE ASSIGNMENT- Notwithstanding paragraph (1), the average acreage determined under subsection (a)(2) for a farm may not be assigned to a farm in a contiguous State unless--

        (A) the historic peanut producer making the assignment produced peanuts in that State during at least 1 of the 1998 through 2001 crop years; or

        (B) as of March 31, 2003, the historic peanut producer is a producer on a farm in that State.

      (3) NOTICE OF ASSIGNMENT OPPORTUNITY- The Secretary shall provide notice to historic peanut producers regarding their opportunity to assign average peanut yields and average acreages to farms under paragraph (1). The notice shall include the following:

        (A) Notice that the opportunity to make the assignments is being provided only once.

        (B) A description of the limitation in paragraph (2) on their ability to make the assignments.

        (C) Information regarding the manner in which the assignments must be made and the time periods and manner in which notice of the assignments must be submitted to the Secretary.

      (4) ASSIGNMENT DEADLINES- Not later than March 31, 2003, an historic peanut producer shall submit to the Secretary notice of the assignments made by the producer under this subsection. If an historic peanut producer fails to submit the notice by that date, the notice shall be submitted in such other manner as the Secretary may prescribe.

    (c) PAYMENT YIELD- The average of all of the yields assigned by historic peanut producers under subsection (b) to a farm shall be considered to be the payment yield for that farm for the purpose of making direct payments and counter-cyclical payments under this subtitle.

    (d) BASE ACRES FOR PEANUTS- Subject to subsection (e), the total number of acres assigned by historic peanut producers under subsection (b) to a farm shall be considered to be the farm’s base acres for peanuts for the purpose of making direct payments and counter-cyclical payments under this subtitle.

    (e) TREATMENT OF CONSERVATION RESERVE CONTRACT ACREAGE-

      (1) IN GENERAL- The Secretary shall provide for an adjustment, as appropriate, in the base acres for peanuts for a farm whenever either of the following circumstances occur:

        (A) A conservation reserve contract entered into under section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831) with respect to the farm expires or is voluntarily terminated.

        (B) Cropland is released from coverage under a conservation reserve contract by the Secretary.

      (2) SPECIAL PAYMENT RULES- For the crop year in which a base acres for peanuts adjustment under paragraph (1) is first made, the owner of the farm shall elect to receive either direct payments and counter-cyclical payments with respect to the acreage added to the farm under this subsection or a prorated payment under the conservation reserve contract, but not both.

    (f) PREVENTION OF EXCESS BASE ACRES FOR PEANUTS-

      (1) REQUIRED REDUCTION- If the sum of the base acres for peanuts for a farm, together with the acreage described in paragraph (2), exceeds the actual cropland acreage of the farm, the Secretary shall reduce the base acres for peanuts for the farm or the base acres for 1 or more covered commodities under subtitle A for the farm so that the sum of the base acres for peanuts and acreage described in paragraph (2) does not exceed the actual cropland acreage of the farm.

      (2) OTHER ACREAGE- For purposes of paragraph (1), the Secretary shall include the following:

        (A) Any base acres for the farm under subtitle A.

        (B) Any acreage on the farm enrolled in the conservation reserve program or wetlands reserve program under chapter 1 of subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3830 et seq.).

        (C) Any other acreage on the farm enrolled in a conservation program for which payments are made in exchange for not producing an agricultural commodity on the acreage.

      (3) SELECTION OF ACRES- The Secretary shall give the owner of the farm the opportunity to select the base acres for peanuts or the subtitle A base acres against which the reduction required by paragraph (1) will be made.

      (4) EXCEPTION FOR DOUBLE-CROPPED ACREAGE- In applying paragraph (1), the Secretary shall make an exception in the case of double cropping, as determined by the Secretary.

      (5) COORDINATED APPLICATION OF REQUIREMENTS- The Secretary shall take into account section 1101(g) when applying the requirements of this subsection.

    (g) PERMANENT REDUCTION IN BASE ACRES FOR PEANUTS- The owner of a farm may reduce, at any time, the base acres for peanuts assigned to the farm. The reduction shall be permanent and made in the manner prescribed by the Secretary.

SEC. 1303. AVAILABILITY OF DIRECT PAYMENTS FOR PEANUTS.

    (a) PAYMENT REQUIRED-

      (1) 2002 CROP YEAR- For the 2002 crop year, the Secretary shall make direct payments under this section to historic peanut producers.

      (2) SUBSEQUENT CROP YEARS- For each of the 2003 through 2007 crop years for peanuts, the Secretary shall make direct payments to the producers on a farm to which a payment yield and base acres for peanuts are assigned under section 1302.

    (b) PAYMENT RATE- The payment rate used to make direct payments with respect to peanuts for a crop year shall be equal to $36 per ton.

    (c) PAYMENT AMOUNT FOR 2002 CROP YEAR- The amount of the direct payment to be paid to an historic peanut producer for the 2002 crop of peanuts shall be equal to the product of the following:

      (1) The payment rate specified in subsection (b).

      (2) The payment acres of the historic peanut producer.

      (3) The average peanut yield determined under section 1302(a)(1) for the historic peanut producer.

    (d) PAYMENT AMOUNT FOR SUBSEQUENT CROP YEARS- The amount of the direct payment to be paid to the producers on a farm for the 2003 through 2007 crops of peanuts shall be equal to the product of the following:

      (1) The payment rate specified in subsection (b).

      (2) The payment acres on the farm.

      (3) The payment yield for the farm.

    (e) TIME FOR PAYMENT-

      (1) IN GENERAL- The Secretary shall make direct payments--

        (A) in the case of the 2002 crop year, as soon as practicable after the date of enactment of this Act; and

        (B) in the case of each of the 2003 through 2007 crop years, not later than September 30 of the calendar year in which the crop is harvested.

      (2) ADVANCE PAYMENTS- At the option of the producers on a farm, up to 50 percent of the direct payment for any of the 2003 through 2007 crop years shall be paid to the producers in advance. The producers shall select the month within which the advance payment for a crop year will be made. The month selected may be any month during the period beginning on December 1 of the calendar year before the calendar year in which the crop is harvested through the month within which the direct payment would otherwise be made. The producers may change the selected month for a subsequent advance payment by providing advance notice to the Secretary.

      (3) REPAYMENT OF ADVANCE PAYMENTS- If a producer on a farm that receives an advance direct payment for a crop year ceases to be a producer on that farm, or the extent to which the producer shares in the risk of producing a crop changes, before the date the remainder of the direct payment is made, the producer shall be responsible for repaying the Secretary the applicable amount of the advance payment, as determined by the Secretary.

SEC. 1304. AVAILABILITY OF COUNTER-CYCLICAL PAYMENTS FOR PEANUTS.

    (a) PAYMENT REQUIRED-

      (1) IN GENERAL- During the 2002 through 2007 crop years for peanuts, the Secretary shall make counter-cyclical payments under this section with respect to peanuts if the Secretary determines that the effective price for peanuts is less than the target price for peanuts.

      (2) 2002 CROP YEAR- If counter-cyclical payments are required for the 2002 crop year, the Secretary shall make the payments to historic peanut producers.

      (3) SUBSEQUENT CROP YEARS- If counter-cyclical payments are required for any of the 2003 through 2007 crop years for peanuts, the Secretary shall make the payments to the producers on a farm to which a payment yield and base acres for peanuts are assigned under section 1302.

    (b) EFFECTIVE PRICE- For purposes of subsection (a), the effective price for peanuts is equal to the sum of the following:

      (1) The higher of the following:

        (A) The national average market price for peanuts received by producers during the 12-month marketing year for peanuts, as determined by the Secretary.

        (B) The national average loan rate for a marketing assistance loan for peanuts in effect for the applicable period under this subtitle.

      (2) The payment rate in effect under section 1303 for the purpose of making direct payments.

    (c) TARGET PRICE- For purposes of subsection (a), the target price for peanuts shall be equal to $495 per ton.

    (d) PAYMENT RATE- The payment rate used to make counter-cyclical payments for a crop year shall be equal to the difference between--

      (1) the target price; and

      (2) the effective price determined under subsection (b).

    (e) PAYMENT AMOUNT FOR 2002 CROP YEAR- If counter-cyclical payments are required to be paid for the 2002 crop of peanuts, the amount of the counter-cyclical payment to be paid to an historic peanut producer for that crop year shall be equal to the product of the following:

      (1) The payment rate specified in subsection (d).

      (2) The payment acres of the historic peanut producer.

      (3) The average peanut yield determined under section 1302(a)(1) for the historic peanut producer.

    (f) PAYMENT AMOUNT FOR SUBSEQUENT CROP YEARS- If counter-cyclical payments are required to be paid for any of the 2003 through 2007 crops of peanuts, the amount of the counter-cyclical payment to be paid to the producers on a farm for that crop year shall be equal to the product of the following:

      (1) The payment rate specified in subsection (d).

      (2) The payment acres on the farm.

      (3) The payment yield for the farm.

    (g) TIME FOR PAYMENTS-

      (1) GENERAL RULE- If the Secretary determines under subsection (a) that counter-cyclical payments are required to be made under this section for a crop year, the Secretary shall make the counter-cyclical payments as soon as practicable after the end of the 12-month marketing year for the crop.

      (2) AVAILABILITY OF PARTIAL PAYMENTS- If, before the end of the 12-month marketing year, the Secretary estimates that counter-cyclical payments will be required under this section for a crop year, the Secretary shall give producers on a farm (or, in the case of the 2002 crop year, historic peanut producers) the option to receive partial payments of the counter-cyclical payment projected to be made for that crop.

      (3) TIME FOR PARTIAL PAYMENTS-

        (A) 2002 THROUGH 2006 CROP YEARS- When the Secretary makes partial payments available under paragraph (2) for any of the 2002 through 2006 crop years--

          (i) the first partial payment for the crop year shall be made not earlier than October 1, and, to the maximum extent practicable, not later than October 31, of the calendar year in which the crop is harvested;

          (ii) the second partial payment shall be made not earlier than February 1 of the next calendar year; and

          (iii) the final partial payment shall be made as soon as practicable after the end of the 12-month marketing year for that crop.

        (B) 2007 CROP YEAR- When the Secretary makes partial payments available for the 2007 crop year--

          (i) the first partial payment shall be made after completion of the first 6 months of the marketing year for that crop; and

          (ii) the final partial payment shall be made as soon as practicable after the end of the 12-month marketing year for that crop.

      (4) AMOUNT OF PARTIAL PAYMENTS-

        (A) 2002 CROP YEAR-

          (i) FIRST PARTIAL PAYMENT- In the case of the 2002 crop year, the first partial payment under paragraph (3) to an historic peanut producer may not exceed 35 percent of the projected counter-cyclical payment for the crop year, as determined by the Secretary.

          (ii) SECOND PARTIAL PAYMENT- The second partial payment may not exceed the difference between--

            (I) 70 percent of the projected counter-cyclical payment (including any revision thereof) for the 2002 crop year; and

            (II) the amount of the payment made under clause (i).

          (iii) FINAL PAYMENT- The final payment shall be equal to the difference between--

            (I) the actual counter-cyclical payment to be made to the historic peanut producer; and

            (II) the amount of the partial payments made to the historic peanut producer under clauses (i) and (ii).

        (B) 2003 THROUGH 2006 CROP YEARS-

          (i) FIRST PARTIAL PAYMENT- For each of the 2003 through 2006 crop years, the first partial payment under paragraph (3) to the producers on a farm may not exceed 35 percent of the projected counter-cyclical payment for the crop year, as determined by the Secretary.

          (ii) SECOND PARTIAL PAYMENT- The second partial payment for a crop year may not exceed the difference between--

            (I) 70 percent of the projected counter-cyclical payment (including any revision thereof) for the crop year; and

            (II) the amount of the payment made under clause (i).

          (iii) FINAL PAYMENT- The final payment for a crop year shall be equal to the difference between--

            (I) the actual counter-cyclical payment to be made to the producers for that crop year; and

            (II) the amount of the partial payments made to the producers under clauses (i) and (ii) for that crop year.

        (C) 2007 CROP YEAR-

          (i) FIRST PARTIAL PAYMENT- For the 2007 crop year, the first partial payment under paragraph (3) to the producers on a farm may not exceed 40 percent of the projected counter-cyclical payment for the crop year, as determined by the Secretary.

          (ii) FINAL PAYMENT- The final payment for the 2007 crop year shall be equal to the difference between--

            (I) the actual counter-cyclical payment to be made to the producers for that crop year; and

            (II) the amount of the partial payment made to the producers under clause (i).

      (5) REPAYMENT- The producers on a farm (or, in the case of the 2002 crop year, historic peanut producers) that receive a partial payment under this subsection for a crop year shall repay to the Secretary the amount, if any, by which the total of the partial payments exceed the actual counter-cyclical payment to be made for that crop year.

SEC. 1305. PRODUCER AGREEMENT REQUIRED AS CONDITION ON PROVISION OF DIRECT PAYMENTS AND COUNTER-CYCLICAL PAYMENTS.

    (a) COMPLIANCE WITH CERTAIN REQUIREMENTS-

      (1) REQUIREMENTS- Before the producers on a farm may receive direct payments or counter-cyclical payments under this subtitle with respect to the farm, the producers shall agree, during the crop year for which the payments are made and in exchange for the payments--

        (A) to comply with applicable conservation requirements under subtitle B of title XII of the Food Security Act of 1985 (16 U.S.C. 3811 et seq.);

        (B) to comply with applicable wetland protection requirements under subtitle C of title XII of that Act (16 U.S.C. 3821 et seq.);

        (C) to comply with the planting flexibility requirements of section 1306;

        (D) to use the land on the farm, in a quantity equal to the attributable base acres for peanuts and any base acres for the farm under subtitle A, for an agricultural or conserving use, and not for a nonagricultural commercial or industrial use, as determined by the Secretary; and

        (E) to effectively control noxious weeds and otherwise maintain the land in accordance with sound agricultural practices, as determined by the Secretary, if the agricultural or conserving use involves the noncultivation of any portion of the land referred to in subparagraph (D).

      (2) COMPLIANCE- The Secretary may issue such rules as the Secretary considers necessary to ensure producer compliance with the requirements of paragraph (1).

      (3) MODIFICATION- At the request of the transferee or owner, the Secretary may modify the requirements of this subsection if the modifications are consistent with the objectives of this subsection, as determined by the Secretary.

    (b) TRANSFER OR CHANGE OF INTEREST IN FARM-

      (1) TERMINATION- Except as provided in paragraph (2), a transfer of (or change in) the interest of the producers on a farm in the base acres for peanuts for which direct payments or counter-cyclical payments are made shall result in the termination of the payments with respect to those acres, unless the transferee or owner of the acreage agrees to assume all obligations under subsection (a). The termination shall take effect on the date determined by the Secretary.

      (2) EXCEPTION- If a producer entitled to a direct payment or counter-cyclical payment dies, becomes incompetent, or is otherwise unable to receive the payment, the Secretary shall make the payment, in accordance with rules issued by the Secretary.

    (c) ACREAGE REPORTS- As a condition on the receipt of direct payments, counter-cyclical payments, marketing assistance loans, or loan deficiency payments under this subtitle, the Secretary shall require the producers on a farm to which a payment yield and base acres for peanuts are assigned under section 1302 to submit to the Secretary annual acreage reports with respect to all cropland on the farm.

    (d) TENANTS AND SHARECROPPERS- In carrying out this subtitle, the Secretary shall provide adequate safeguards to protect the interests of tenants and sharecroppers.

    (e) SHARING OF PAYMENTS- The Secretary shall provide for the sharing of direct payments and counter-cyclical payments among the producers on a farm on a fair and equitable basis.

SEC. 1306. PLANTING FLEXIBILITY.

    (a) PERMITTED CROPS- Subject to subsection (b), any commodity or crop may be planted on the base acres for peanuts on a farm.

    (b) LIMITATIONS REGARDING CERTAIN COMMODITIES-

      (1) GENERAL LIMITATION- The planting of an agricultural commodity specified in paragraph (2) shall be prohibited on base acres for peanuts unless the commodity, if planted, is destroyed before harvest.

      (2) TREATMENT OF TREES AND OTHER PERENNIALS- The planting of an agricultural commodity specified in paragraph (3) that is produced on a tree or other perennial plant shall be prohibited on base acres for peanuts.

      (3) COVERED AGRICULTURAL COMMODITIES- Paragraphs (1) and (2) apply to the following agricultural commodities:

        (A) Fruits.

        (B) Vegetables (other than lentils, mung beans, and dry peas).

        (C) Wild rice.

    (c) EXCEPTIONS- Paragraphs (1) and (2) of subsection (b) shall not limit the planting of an agricultural commodity specified in paragraph (3) of that subsection--

      (1) in any region in which there is a history of double-cropping of peanuts with agricultural commodities specified in subsection (b)(3), as determined by the Secretary, in which case the double-cropping shall be permitted;

      (2) on a farm that the Secretary determines has a history of planting agricultural commodities specified in subsection (b)(3) on the base acres for peanuts, except that direct payments and counter-cyclical payments shall be reduced by an acre for each acre planted to such an agricultural commodity; or

      (3) by the producers on a farm that the Secretary determines has an established planting history of a specific agricultural commodity specified in subsection (b)(3), except that--

        (A) the quantity planted may not exceed the average annual planting history of such agricultural commodity by the producers on the farm in the 1991 through 1995 or 1998 through 2001 crop years (excluding any crop year in which no plantings were made), as determined by the Secretary; and

        (B) direct payments and counter-cyclical payments shall be reduced by an acre for each acre planted to such agricultural commodity.

SEC. 1307. MARKETING ASSISTANCE LOANS AND LOAN DEFICIENCY PAYMENTS FOR PEANUTS.

    (a) NONRECOURSE LOANS AVAILABLE-

      (1) AVAILABILITY- For each of the 2002 through 2007 crops of peanuts, the Secretary shall make available to producers on a farm nonrecourse marketing assistance loans for peanuts produced on the farm. The loans shall be made under terms and conditions that are prescribed by the Secretary and at the loan rate established under subsection (b).

      (2) ELIGIBLE PRODUCTION- The producers on a farm shall be eligible for a marketing assistance loan under this subsection for any quantity of peanuts produced on the farm.

      (3) TREATMENT OF CERTAIN COMMINGLED COMMODITIES- In carrying out this subsection, the Secretary shall make loans to producers on a farm that would be eligible to obtain a marketing assistance loan, but for the fact the peanuts owned by the producers on the farm are commingled with other peanuts in facilities unlicensed for the storage of agricultural commodities by the Secretary or a State licensing authority, if the producers obtaining the loan agree to immediately redeem the loan collateral in accordance with section 166 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7286).

      (4) OPTIONS FOR OBTAINING LOAN- A marketing assistance loan under this subsection, and loan deficiency payments under subsection (e), may be obtained at the option of the producers on a farm through--

        (A) a designated marketing association or marketing cooperative of producers that is approved by the Secretary; or

        (B) the Farm Service Agency.

      (5) STORAGE OF LOAN PEANUTS- As a condition on the Secretary’s approval of an individual or entity to provide storage for peanuts for which a marketing assistance loan is made under this section, the individual or entity shall agree--

        (A) to provide such storage on a nondiscriminatory basis; and

        (B) to comply with such additional requirements as the Secretary considers appropriate to accomplish the purposes of this section and promote fairness in the administration of the benefits of this section.

      (6) PAYMENT OF PEANUT STORAGE COSTS- Effective for the 2002 through 2006 crops of peanuts, to ensure proper storage of peanuts for which a loan is made under this section, the Secretary shall use the funds of the Commodity Credit Corporation to pay storage, handling, and other associated costs. This authority terminates beginning with the 2007 crop of peanuts.

      (7) MARKETING- A marketing association or cooperative may market peanuts for which a loan is made under this section in any manner that conforms to consumer needs, including the separation of peanuts by type and quality.

    (b) LOAN RATE- The loan rate for a marketing assistance loan under for peanuts subsection (a) shall be equal to $355 per ton.

    (c) TERM OF LOAN-

      (1) IN GENERAL- A marketing assistance loan for peanuts under subsection (a) shall have a term of 9 months beginning on the first day of the first month after the month in which the loan is made.

      (2) EXTENSIONS PROHIBITED- The Secretary may not extend the term of a marketing assistance loan for peanuts under subsection (a).

    (d) REPAYMENT RATE-

      (1) IN GENERAL- The Secretary shall permit producers on a farm to repay a marketing assistance loan for peanuts under subsection (a) at a rate that is the lesser of--

        (A) the loan rate established for peanuts under subsection (b), plus interest (determined in accordance with section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283)); or

        (B) a rate that the Secretary determines will--

          (i) minimize potential loan forfeitures;

          (ii) minimize the accumulation of stocks of peanuts by the Federal Government;

          (iii) minimize the cost incurred by the Federal Government in storing peanuts; and

          (iv) allow peanuts produced in the United States to be marketed freely and competitively, both domestically and internationally.

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

    (e) LOAN DEFICIENCY PAYMENTS-

      (1) AVAILABILITY- The Secretary may make loan deficiency payments available to producers on a farm that, although eligible to obtain a marketing assistance loan for peanuts under subsection (a), agree to forgo obtaining the loan for the peanuts in return for loan deficiency payments under this subsection.

      (2) COMPUTATION- A loan deficiency payment under this subsection shall be computed by multiplying--

        (A) the payment rate determined under paragraph (3) for peanuts; by

        (B) the quantity of the peanuts produced by the producers, excluding any quantity for which the producers obtain a marketing assistance loan under subsection (a).

      (3) PAYMENT RATE- For purposes of this subsection, the payment rate shall be the amount by which--

        (A) the loan rate established under subsection (b); exceeds

        (B) the rate at which a loan may be repaid under subsection (d).

      (4) EFFECTIVE DATE FOR PAYMENT RATE DETERMINATION-

        (A) IN GENERAL- The Secretary shall determine the amount of the loan deficiency payment to be made under this subsection to the producers on a farm with respect to a quantity of peanuts using the payment rate in effect under paragraph (3) as of the date the producers request the payment.

        (B) SPECIAL RULE FOR 2002 CROP YEAR- For the 2002 crop year only, the Secretary shall determine the amount of the loan deficiency payment to be made under this subsection to the producers on a farm with respect to a quantity of peanuts using the payment rate in effect under paragraph (3) as of the earlier of the following:

          (i) The date on which the producers marketed or otherwise lost beneficial interest in the crop, as determined by the Secretary.

          (ii) The date the producers request the payment.

    (f) COMPLIANCE WITH CONSERVATION AND WETLANDS REQUIREMENTS- As a condition of the receipt of a marketing assistance loan under subsection (a), the producer shall comply with applicable conservation requirements under subtitle B of title XII of the Food Security Act of 1985 (16 U.S.C. 3811 et seq.) and applicable wetland protection requirements under subtitle C of title XII of that Act (16 U.S.C. 3821 et seq.) during the term of the loan.

    (g) REIMBURSABLE AGREEMENTS AND PAYMENT OF ADMINISTRATIVE EXPENSES- The Secretary may implement any reimbursable agreements or provide for the payment of administrative expenses under this subtitle only in a manner that is consistent with such activities in regard to other commodities.

SEC. 1308. MISCELLANEOUS PROVISIONS.

    (a) MANDATORY INSPECTION- All peanuts marketed in the United States shall be officially inspected and graded by Federal or Federal-State inspectors.

    (b) TERMINATION OF PEANUT ADMINISTRATIVE COMMITTEE- The Peanut Administrative Committee established under Marketing Agreement No. 146 issued pursuant to the Agricultural Adjustment Act (7 U.S.C. 601 et seq.), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, is terminated.

    (c) PEANUT STANDARDS BOARD-

      (1) ESTABLISHMENT AND PURPOSE- The Secretary shall establish a Peanut Standards Board for the purpose of advising the Secretary regarding the establishment of quality and handling standards for domestically produced and imported peanuts.

      (2) MEMBERSHIP AND APPOINTMENT-

        (A) TOTAL MEMBERS- The Board shall consist of 18 members, with representation equally divided between peanut producers and peanut industry representatives.

        (B) APPOINTMENT PROCESS FOR PRODUCERS- The Secretary shall appoint--

          (i) 3 producers from the Southeast (Alabama, Georgia, and Florida) peanut producing region;

          (ii) 3 producers from the Southwest (Texas, Oklahoma, and New Mexico) peanut producing region; and

          (iii) 3 producers from the Virginia/Carolina (Virginia and North Carolina) peanut producing region.

        (C) APPOINTMENT PROCESS FOR INDUSTRY REPRESENTATIVES- The Secretary shall appoint 3 peanut industry representatives from each of the 3 peanut producing regions in the United States.

      (3) TERMS-

        (A) IN GENERAL- A member of the Board shall serve a 3-year term.

        (B) INITIAL APPOINTMENT- In making the initial appointments to the Board, the Secretary shall stagger the terms of the members so that--

          (i) 1 producer member and peanut industry member from each peanut producing region serves a 1-year term;

          (ii) 1 producer member and peanut industry member from each peanut producing region serves a 2-year term; and

          (iii) 1 producer member and peanut industry member from each peanut producing region serves a 3-year term.

      (4) CONSULTATION REQUIRED- The Secretary shall consult with the Board in advance whenever the Secretary establishes or changes, or considers the establishment of or a change to, quality and handling standards for peanuts.

      (5) FEDERAL ADVISORY COMMITTEE ACT- The Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to the Board.

    (d) PRIORITY- The Secretary shall make identifying and combating the presence of all quality concerns related to peanuts a priority in the development of quality and handling standards for peanuts and in the inspection of domestically produced and imported peanuts. The Secretary shall consult with appropriate Federal and State agencies to provide adequate safeguards against all quality concerns related to peanuts.

    (e) CONSISTENT STANDARDS- Imported peanuts shall be subject to the same quality and handling standards as apply to domestically produced peanuts.

    (f) AUTHORIZATION OF APPROPRIATIONS-

      (1) IN GENERAL- In addition to other funds that are available to carry out this section, there is authorized to be appropriated such sums as are necessary to carry out this section.

      (2) TREATMENT OF BOARD EXPENSES- The expenses of the Peanut Standards Board shall not be counted toward any general limitation on the expenses of advisory committees, panels, commissions, and task forces of the Department of Agriculture, whether enacted before, on, or after the date of enactment of this Act, unless the limitation specifically refers to this paragraph and specifically includes the Peanut Standards Board within the general limitation.

    (g) TRANSITION RULE-

      (1) TEMPORARY DESIGNATION OF PEANUT ADMINISTRATIVE COMMITTEE MEMBERS- Notwithstanding the appointment process specified in subsection (c) for the Peanut Standards Board, during the transition period, the Secretary may designate persons serving as members of the Peanut Administrative Committee on the day before the date of enactment of this Act to serve as members of the Peanut Standards Board for the purpose of carrying out the duties of the Board described in this section.

      (2) FUNDS- The Secretary may transfer any funds available to carry out the activities of the Peanut Administrative Committee to the Peanut Standards Board to carry out the duties of the Board described in this section.

      (3) TRANSITION PERIOD- In paragraph (1), the term ‘transition period’ means the period beginning on the date of enactment of this Act and ending on the earlier of--

        (A) the date the Secretary appoints the members of the Peanut Standards Board pursuant to subsection (c); or

        (B) 180 days after the date of enactment of this Act.

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

SEC. 1309. TERMINATION OF MARKETING QUOTA PROGRAMS FOR PEANUTS AND COMPENSATION TO PEANUT QUOTA HOLDERS FOR LOSS OF QUOTA ASSET VALUE.

    (a) REPEAL OF MARKETING QUOTA-

      (1) REPEAL- Part VI of subtitle B of title III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1357-1359a), relating to peanuts, is repealed.

      (2) TREATMENT OF 2001 CROP- Part VI of subtitle B of title III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1357-1359a), as in effect on the day before the date of enactment of this Act, shall continue to apply with respect to the 2001 crop of peanuts notwithstanding the amendment made by paragraph (1). Section 1308(g)(2) shall also apply to the 2001 crop of peanuts.

    (b) COMPENSATION CONTRACT REQUIRED-

      (1) IN GENERAL- The Secretary shall offer to enter into a contract with each person that the Secretary determines is an eligible peanut quota holder under subsection (f) for the purpose of providing compensation for the lost value of the quota on account of the repeal of the marketing quota program for peanuts under subsection (a).

      (2) PAYMENT PERIOD- The Secretary shall make payments under the contracts during fiscal years 2002 through 2006.

    (c) TIME FOR PAYMENT-

      (1) PAYMENT IN INSTALLMENTS- The payments required under the contracts shall be provided in 5 equal installments not later than September 30 of each of fiscal years 2002 through 2006.

      (2) SINGLE PAYMENT- At the request of an eligible peanut quota holder entitled to payments under a contract, the Secretary shall provide the entire payment amount determined under subsection (d) with respect to the eligible peanut quota holder for the 5 fiscal years in a single lump sum during the fiscal year specified by the eligible peanut quota holder.

    (d) PAYMENT AMOUNT- The amount of the payment for a fiscal year to an eligible peanut quota holder under a contract shall be equal to the product obtained by multiplying--

      (1) $0.11 per pound; by

      (2) the number of pounds of quota with respect to which the person qualifies as a peanut quota holder under subsection (f).

    (e) ASSIGNMENT OF PAYMENTS- The provisions of section 8(g) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(g)), relating to assignment of payments, shall apply to the payments made under the contracts. A person making an assignment of the payment, or the assignee, shall provide the Secretary with notice, in such manner as the Secretary may require, of any assignment made under this subsection.

    (f) ELIGIBLE PEANUT QUOTA HOLDER-

      (1) IN GENERAL- Except as otherwise provided in this subsection, the Secretary shall consider a person to be an eligible peanut quota holder for the purposes of this section if the person, as of the date of enactment of this Act, owned a farm that, also as of that date, was eligible for a permanent peanut quota under section 358-1(b) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1358-1(b)), irrespective of temporary leases, transfers of quotas for seed, or quotas for experimental purposes.

      (2) EFFECT OF PURCHASE CONTRACT- If there was a written contract for the purchase of all or a portion of a farm described in paragraph (1) as of the date of enactment of this Act and the parties to the sale are unable to agree to the disposition of eligibility for payments under this section, the Secretary, taking into account any incomplete permanent transfer of quota that has otherwise been agreed to, shall provide for the equitable division of the payments among the parties by adjusting the determination of who is the eligible peanut quota holder with respect to particular pounds of the quota.

      (3) EFFECT OF AGREEMENT FOR PERMANENT QUOTA TRANSFER- If the Secretary determines that there was in existence, as of the date of enactment of this Act, an agreement for the permanent transfer of quota, but that the transfer was not completed by that date, the Secretary shall consider the peanut quota holder to be the party to the agreement who, as of that date, was the owner of the farm to which the quota was to be transferred.

      (4) PROTECTED BASES- A person that owns a farm with a peanut poundage quota which is protected under a conservation reserve program contract entered into under section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831) shall be considered to be an eligible quota holder with respect to the protected poundage.

      (5) SECRETARIAL DISCRETION- Notwithstanding the preceding paragraphs, the Secretary may declare a person to be the eligible peanut quota holder with respect to certain pounds of quota or otherwise for purposes of this section if the Secretary considers the declaration is needed to insure a fair and equitable administration of the payments provided for in this section, so long as the Secretary does not, in exercising this authority, effectively increase the total quota in excess of the quota that was available to all producers for the 2001 crop year for other than seed or experimental use.

      (6) LIMITATION ON QUANTITY OF QUOTA HELD- A person shall be considered an eligible peanut quota holder for purposes of this section only with respect to that number of permanent pounds that qualifies the person as a peanut quota holder under one of the preceding paragraphs. The determination of the peanut poundage amount for which the person qualifies shall be made based on the 2001 crop quota levels and shall take into account sales of the farm that occurred before the date of enactment of this Act and any permanent transfers of quota that took place before that date, consistent with the preceding paragraphs. The Secretary shall not take into account, or allow eligibility for, quotas for seed, granted as experimental quotas, or obtained by temporary lease or transfer.

    (g) SUCCESSIONS IN PAYMENT ELIGIBILITY AND ATTACHMENT OF ELIGIBILITY TO PERSONS-

      (1) ELIGIBILITY ATTACHES TO PERSONS- Once a person is eligible for payments under this section, as determined under subsection (f), the continued eligibility of the person for the payments does not run with a farm, but shall remain with the person for the term of this section irrespective of whether the person sells, or continues to have an interest in, the farm that had the quota that qualified the person as an eligible peanut quota holder under subsection (f) and irrespective of whether the person has a continuing interest in the production of peanuts.

      (2) SUCCESSION- If a person eligible for payments under this section dies, in the case of an individual, or ceases to exist, in the case of other persons, the payment eligibility of the person shall pass to the person’s personal or organizational successor, as determined by the Secretary.

    (h) CONFORMING AMENDMENTS-

      (1) ADMINISTRATIVE PROVISIONS- Section 361 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1361) is amended by striking ‘peanuts,’.

      (2) ADJUSTMENT OF QUOTAS- Section 371 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1371) is amended--

        (A) in the first sentence of subsection (a), by striking ‘peanuts,’; and

        (B) in the first sentence of subsection (b), by striking ‘peanuts’.

      (3) REPORTS AND RECORDS- Section 373 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1373) is amended--

        (A) in the first sentence of subsection (a)--

          (i) by striking ‘peanuts,’ each place it appears;

          (ii) by inserting ‘and’ after ‘from producers,’; and

          (iii) by striking ‘for producers, all’ and all that follows through the period at the end of the sentence and inserting ‘for producers.’; and

        (B) in subsection (b), by striking ‘peanuts,’.

      (4) EMINENT DOMAIN- Section 378(c) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1378(c)) is amended in the first sentence--

        (A) by striking ‘cotton,’ and inserting ‘cotton and’; and

        (B) by striking ‘and peanuts,’.

SEC. 1310. REPEAL OF SUPERSEDED PRICE SUPPORT AUTHORITY AND EFFECT OF REPEAL.

    (a) REPEAL OF PRICE SUPPORT AUTHORITY-

      (1) IN GENERAL- Section 155 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7271) is repealed.

      (2) CONFORMING AMENDMENTS- The Agricultural Act of 1949 (7 U.S.C. 1441 et seq.) is amended--

        (A) in section 101(b) (7 U.S.C. 1441(b)), by striking ‘and peanuts’; and

        (B) in section 408(c) (7 U.S.C. 1428(c)), by striking ‘peanuts,’.

      (3) TECHNICAL AMENDMENT- The chapter heading of chapter 2 of subtitle D of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. prec. 7271) is amended by striking ‘PEANUTS AND’.

    (b) DISPOSAL- Notwithstanding any other provision of law or previous declaration made by the Secretary, the Secretary shall ensure that the disposal of all peanuts for which a loan for the 2001 crop of peanuts was made under section 155 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7271) before the date of enactment of this Act is carried out in a manner that prevents price disruptions in the domestic and international markets for peanuts.

    (c) TREATMENT OF CROP INSURANCE POLICIES FOR 2002 CROP YEAR-

      (1) APPLICABILITY- This subsection shall apply for the 2002 crop year only notwithstanding any other provision of law or crop insurance policy.

      (2) PRICE ELECTION- The nonquota price election for segregation I, II, and III peanuts shall be 17.75 cents per pound and shall be used for all aspects of the policy relating to the calculations of premium, liability, and indemnities.

      (3) QUALITY ADJUSTMENT- For the purposes of quality adjustment only, the average support price per pound of peanuts shall be a price equal to 17.75 cents per pound. Quality under the crop insurance policy for peanuts shall be adjusted under procedures issued by the Federal Crop Insurance Corporation.

Subtitle D--Sugar

SEC. 1401. SUGAR PROGRAM.

    (a) EXTENSION AND MODIFICATION OF EXISTING SUGAR PROGRAM- Section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272) is amended to read as follows:

‘SEC. 156. SUGAR PROGRAM.

    ‘(a) SUGARCANE- The Secretary shall make loans available to processors of domestically grown sugarcane at a rate equal to 18 cents per pound for raw cane sugar.

    ‘(b) SUGAR BEETS- The Secretary shall make loans available to processors of domestically grown sugar beets at a rate equal to 22.9 cents per pound for refined beet sugar.

    ‘(c) LOAN RATE ADJUSTMENTS-

      ‘(1) IN GENERAL- The Secretary may reduce the loan rate specified in subsection (a) for domestically grown sugarcane and subsection (b) for domestically grown sugar beets if the Secretary determines that negotiated reductions in export subsidies and domestic subsidies provided for sugar of other major sugar growing, producing, and exporting countries in the aggregate exceed the commitments made as part of the Agreement on Agriculture.

      ‘(2) EXTENT OF REDUCTION- The Secretary shall not reduce the loan rate under subsection (a) or (b) below a rate that provides an equal measure of support to that provided by other major sugar growing, producing, and exporting countries, based on an examination of both domestic and export subsidies subject to reduction in the Agreement on Agriculture.

      ‘(3) ANNOUNCEMENT OF REDUCTION- The Secretary shall announce any loan rate reduction to be made under this subsection as far in advance as is practicable.

      ‘(4) DEFINITIONS- In this subsection:

        ‘(A) AGREEMENT ON AGRICULTURE- The term ‘Agreement on Agriculture’ means the Agreement on Agriculture referred to in section 101(d)(2) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(2)), or any amendatory or successor agreement.

        ‘(B) MAJOR SUGAR COUNTRIES- The term ‘major sugar growing, producing, and exporting countries’ means--

          ‘(i) the countries of the European Union; and

          ‘(ii) the 10 foreign countries not covered by subparagraph (A) that the Secretary determines produce the greatest quantity of sugar.

    ‘(d) TERM OF LOANS-

      ‘(1) IN GENERAL- A loan under this section during any fiscal year shall be made available not earlier than the beginning of the fiscal year and shall mature at the earlier of--

        ‘(A) the end of the 9-month period beginning on the first day of the first month after the month in which the loan is made; or

        ‘(B) the end of the fiscal year in which the loan is made.

      ‘(2) SUPPLEMENTAL LOANS- In the case of a loan made under this section in the last 3 months of a fiscal year, the processor may repledge the sugar as collateral for a second loan in the subsequent fiscal year, except that the second loan shall--

        ‘(A) be made at the loan rate in effect at the time the second loan is made; and

        ‘(B) mature in 9 months less the quantity of time that the first loan was in effect.

    ‘(e) LOAN TYPE; PROCESSOR ASSURANCES-

      ‘(1) NONRECOURSE LOANS- The Secretary shall carry out this section through the use of nonrecourse loans.

      ‘(2) PROCESSOR ASSURANCES-

        ‘(A) IN GENERAL- The Secretary shall obtain from each processor that receives a loan under this section such assurances as the Secretary considers adequate to ensure that the processor will provide payments to producers that are proportional to the value of the loan received by the processor for the sugar beets and sugarcane delivered by producers to the processor.

        ‘(B) MINIMUM PAYMENTS-

          ‘(i) IN GENERAL- Subject to clause (ii), the Secretary may establish appropriate minimum payments for purposes of this paragraph.

          ‘(ii) LIMITATION- In the case of sugar beets, the minimum payment established under clause (i) shall not exceed the rate of payment provided for under the applicable contract between a sugar beet producer and a sugar beet processor.

          ‘(iii) EFFECT OF DISASTER- The Secretary may not bar a beet sugar processor from eligibility to obtain a loan under this section because of the failure of the processor to provide the appropriate minimum payment established under this subsection if the failure--

            ‘(I) occurred during a crop year prior to the date of enactment of the Farm Security and Rural Investment Act of 2002; and

            ‘(II) was related, at least in part, to the effects of a natural disaster, including damage from freeze.

      ‘(3) ADMINISTRATION- The Secretary may not impose or enforce any prenotification requirement, or similar administrative requirement not otherwise in effect on the date of enactment of the Farm Security and Rural Investment Act of 2002, that has the effect of preventing a processor from electing to forfeit the loan collateral (of an acceptable grade and quality) on the maturity of the loan.

    ‘(f) LOANS FOR IN-PROCESS SUGAR-

      ‘(1) DEFINITION OF IN-PROCESS SUGARS AND SYRUPS- In this subsection, the term ‘in-process sugars and syrups’ does not include raw sugar, liquid sugar, invert sugar, invert syrup, or other finished product that is otherwise eligible for a loan under subsection (a) or (b).

      ‘(2) AVAILABILITY- The Secretary shall make nonrecourse loans available to processors of a crop of domestically grown sugarcane and sugar beets for in-process sugars and syrups derived from the crop.

      ‘(3) LOAN RATE- The loan rate shall be equal to 80 percent of the loan rate applicable to raw cane sugar or refined beet sugar, as determined by the Secretary on the basis of the source material for the in-process sugars and syrups.

      ‘(4) FURTHER PROCESSING ON FORFEITURE-

        ‘(A) IN GENERAL- As a condition of the forfeiture of in-process sugars and syrups serving as collateral for a loan under paragraph (2), the processor shall, within such reasonable time period as the Secretary may prescribe and at no cost to the Commodity Credit Corporation, convert the in-process sugars and syrups into raw cane sugar or refined beet sugar of acceptable grade and quality for sugars eligible for loans under subsection (a) or (b).

        ‘(B) TRANSFER TO CORPORATION- Once the in-process sugars and syrups are fully processed into raw cane sugar or refined beet sugar, the processor shall transfer the sugar to the Commodity Credit Corporation.

        ‘(C) PAYMENT TO PROCESSOR- On transfer of the sugar, the Secretary shall make a payment to the processor in an amount equal to the amount obtained by multiplying--

          ‘(i) the difference between--

            ‘(I) the loan rate for raw cane sugar or refined beet sugar, as appropriate; and

            ‘(II) the loan rate the processor received under paragraph (3); by

          ‘(ii) the quantity of sugar transferred to the Secretary.

      ‘(5) LOAN CONVERSION- If the processor does not forfeit the collateral as described in paragraph (4), but instead further processes the in-process sugars and syrups into raw cane sugar or refined beet sugar and repays the loan on the in-process sugars and syrups, the processor may obtain a loan under subsection (a) or (b) for the raw cane sugar or refined beet sugar, as appropriate.

      ‘(6) TERM OF LOAN- The term of a loan made under this subsection for a quantity of in-process sugars and syrups, when combined with the term of a loan made with respect to the raw cane sugar or refined beet sugar derived from the in-process sugars and syrups, may not exceed 9 months, consistent with subsection (d).

    ‘(g) AVOIDING FORFEITURES; CORPORATION INVENTORY DISPOSITION-

      ‘(1) IN GENERAL- Subject to subsection (e)(3), to the maximum extent practicable, the Secretary shall operate the program established under this section at no cost to the Federal Government by avoiding the forfeiture of sugar to the Commodity Credit Corporation.

      ‘(2) INVENTORY DISPOSITION-

        ‘(A) IN GENERAL- To carry out paragraph (1), the Commodity Credit Corporation may accept bids to obtain raw cane sugar or refined beet sugar in the inventory of the Commodity Credit Corporation from (or otherwise make available such commodities, on appropriate terms and conditions, to) processors of sugarcane and processors of sugar beets (acting in conjunction with the producers of the sugarcane or sugar beets processed by the processors) in return for the reduction of production of raw cane sugar or refined beet sugar, as appropriate.

        ‘(B) ADDITIONAL AUTHORITY- The authority provided under this paragraph is in addition to any authority of the Commodity Credit Corporation under any other law.

    ‘(h) INFORMATION REPORTING-

      ‘(1) DUTY OF PROCESSORS AND REFINERS TO REPORT- A sugarcane processor, cane sugar refiner, and sugar beet processor shall furnish the Secretary, on a monthly basis, such information as the Secretary may require to administer sugar programs, including the quantity of purchases of sugarcane, sugar beets, and sugar, and production, importation, distribution, and stock levels of sugar.

      ‘(2) DUTY OF PRODUCERS TO REPORT-

        ‘(A) PROPORTIONATE SHARE STATES- As a condition of a loan made to a processor for the benefit of a producer, the Secretary shall require each producer of sugarcane located in a State (other than the Commonwealth of Puerto Rico) in which there are in excess of 250 producers of sugarcane to report, in the manner prescribed by the Secretary, the sugarcane yields and acres planted to sugarcane of the producer.

        ‘(B) OTHER STATES- The Secretary may require each producer of sugarcane or sugar beets not covered by subparagraph (A) to report, in a manner prescribed by the Secretary, the yields of, and acres planted to, sugarcane or sugar beets, respectively, of the producer.

      ‘(3) DUTY OF IMPORTERS TO REPORT-

        ‘(A) IN GENERAL- Except as provided in subparagraph (B), the Secretary shall require an importer of sugars, syrups, or molasses to be used for human consumption or to be used for the extraction of sugar for human consumption to report, in the manner prescribed by the Secretary, the quantities of the products imported by the importer and the sugar content or equivalent of the products.

        ‘(B) TARIFF-RATE QUOTAS- Subparagraph (A) shall not apply to sugars, syrups, or molasses that are within the quantities of tariff-rate quotas that are subject to the lower rate of duties.

      ‘(4) PENALTY- Any person willfully failing or refusing to furnish the information, or furnishing willfully any false information, shall be subject to a civil penalty of not more than $10,000 for each such violation.

      ‘(5) MONTHLY REPORTS- Taking into consideration the information received under this subsection, the Secretary shall publish on a monthly basis composite data on production, imports, distribution, and stock levels of sugar.

    ‘(i) SUBSTITUTION OF REFINED SUGAR- For purposes of Additional U.S. Note 6 to chapter 17 of the Harmonized Tariff Schedule of the United States and the reexport programs and polyhydric alcohol program administered by the Secretary, all refined sugars (whether derived from sugar beets or sugarcane) produced by cane sugar refineries and beet sugar processors shall be fully substitutable for the export of sugar and sugar-containing products under those programs.

    ‘(j) EFFECTIVE PERIOD- This section shall be effective only for the 1996 through 2007 crops of sugar beets and sugarcane.’.

    (b) EFFECTIVE DATE OF ASSESSMENT TERMINATION- Subsection (f) of section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272(f)), as in effect immediately before the enactment of the Farm Security and Rural Investment Act of 2002, is deemed to have been repealed effective as of October 1, 2001.

    (c) INTEREST RATE- Section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283) is amended--

      (1) by inserting ‘(a) IN GENERAL- ’ before ‘Notwithstanding’; and

      (2) by adding at the end the following:

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

SEC. 1402. STORAGE FACILITY LOANS.

    (a) IN GENERAL- Notwithstanding any other provision of law and as soon as practicable after the date of enactment of this Act, the Commodity Credit Corporation shall amend part 1436 of title 7, Code of Federal Regulations, to establish a sugar storage facility loan program to provide financing for processors of domestically-produced sugarcane and sugar beets to construct or upgrade storage and handling facilities for raw sugars and refined sugars.

    (b) ELIGIBLE PROCESSORS- A storage facility loan described in subsection (a) shall be made available to any processor of domestically produced sugarcane or sugar beets that (as determined by the Secretary)--

      (1) has a satisfactory credit history;

      (2) has a need for increased storage capacity, taking into account the effects of marketing allotments; and

      (3) demonstrates an ability to repay the loan.

    (c) TERM OF LOANS- A storage facility loan described in subsection (a) shall--

      (1) have a minimum term of 7 years; and

      (2) be in such amounts and on such terms and conditions (including terms and conditions relating to downpayments, collateral, and eligible facilities) as are normal, customary, and appropriate for the size and commercial nature of the borrower.

SEC. 1403. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR.

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

‘PART VII--FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR

‘SEC. 359a. DEFINITIONS.

    ‘In this part:

      ‘(1) MAINLAND STATE- The term ‘mainland State’ means a State other than an offshore State.

      ‘(2) OFFSHORE STATE- The term ‘offshore State’ means a sugarcane producing State located outside of the continental United States.

      ‘(3) STATE- Notwithstanding section 301, the term ‘State’ means--

        ‘(A) a State;

        ‘(B) the District of Columbia; and

        ‘(C) the Commonwealth of Puerto Rico.

      ‘(4) UNITED STATES- The term ‘United States’, when used in a geographical sense, means all of the States.

‘SEC. 359b. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR.

    ‘(a) SUGAR ESTIMATES-

      ‘(1) IN GENERAL- Not later than August 1 before the beginning of each of the 2002 through 2007 crop years, the Secretary shall estimate--

        ‘(A) the quantity of sugar that will be consumed in the United States during the crop year;

        ‘(B) the quantity of sugar that would provide for reasonable carryover stocks;

        ‘(C) the quantity of sugar that will be available from carry-in stocks for consumption in the United States during the crop year;

        ‘(D) the quantity of sugar that will be available from the domestic processing of sugarcane and sugar beets; and

        ‘(E) the quantity of sugars, syrups, and molasses that will be imported for human consumption or to be used for the extraction of sugar for human consumption in the United States during the crop year, whether such articles are under a tariff-rate quota or are in excess or outside of a tariff-rate quota.

      ‘(2) EXCLUSION- The estimates under this subsection shall not apply to sugar imported for the production of polyhydric alcohol or to any sugar refined and reexported in refined form or in products containing sugar.

      ‘(3) REESTIMATES- The Secretary shall make reestimates of sugar consumption, stocks, production, and imports for a crop year as necessary, but no later than the beginning of each of the second through fourth quarters of the crop year.

    ‘(b) SUGAR ALLOTMENTS-

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

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

    ‘(c) PROHIBITIONS-

      ‘(1) IN GENERAL- During any crop year or portion thereof for which marketing allotments have been established, no processor of sugar beets or sugarcane shall market a quantity of sugar in excess of the allocation established for such processor, except to enable another processor to fulfill an allocation established for such other processor or to facilitate the exportation of such sugar.

      ‘(2) CIVIL PENALTY- Any processor who knowingly violates paragraph (1) shall be liable to the Commodity Credit Corporation for a civil penalty in an amount equal to 3 times the United States market value, at the time of the commission of the violation, of that quantity of sugar involved in the violation.

      ‘(3) DEFINITION OF MARKET- For purposes of this part, the term ‘market’ shall mean to sell or otherwise dispose of in commerce in the United States (including the forfeiture of sugar under the loan program for sugar under section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272) and, with respect to any integrated processor and refiner, the movement of raw cane sugar into the refining process).

‘SEC. 359c. ESTABLISHMENT OF FLEXIBLE MARKETING ALLOTMENTS.

    ‘(a) IN GENERAL- The Secretary shall establish flexible marketing allotments for sugar for any crop year in which the allotments are required under section 359b(b) in accordance with this section.

    ‘(b) OVERALL ALLOTMENT QUANTITY-

      ‘(1) IN GENERAL- The Secretary shall establish the overall quantity of sugar to be allotted for the crop year (in this part referred to as the ‘overall allotment quantity’) by deducting from the sum of the estimated sugar consumption and reasonable carryover stocks (at the end of the crop year) for the crop year, as determined under section 359b(a)--

        ‘(A) 1,532,000 short tons, raw value; and

        ‘(B) carry-in stocks of sugar, including sugar in Commodity Credit Corporation inventory.

      ‘(2) ADJUSTMENT- The Secretary shall adjust the overall allotment quantity to avoid the forfeiture of sugar to the Commodity Credit Corporation.

    ‘(c) MARKETING ALLOTMENT FOR SUGAR DERIVED FROM SUGAR BEETS AND SUGAR DERIVED FROM SUGARCANE- The overall allotment quantity for the crop year shall be allotted between--

      ‘(1) sugar derived from sugar beets by establishing a marketing allotment for a crop year at a quantity equal to the product of multiplying the overall allotment quantity for the crop year by 54.35 percent; and

      ‘(2) sugar derived from sugarcane by establishing a marketing allotment for a crop year at a quantity equal to the product of multiplying the overall allotment quantity for the crop year by 45.65 percent.

    ‘(d) FILLING CANE SUGAR AND BEET SUGAR ALLOTMENTS-

      ‘(1) CANE SUGAR- Each marketing allotment for cane sugar established under this section may only be filled with sugar processed from domestically grown sugarcane.

      ‘(2) BEET SUGAR- Each marketing allotment for beet sugar established under this section may only be filled with sugar domestically processed from sugar beets.

    ‘(e) STATE CANE SUGAR ALLOTMENTS-

      ‘(1) IN GENERAL- The allotment for sugar derived from sugarcane shall be further allotted, among the States in the United States in which sugarcane is produced, after a hearing (if requested by the affected sugarcane processors and growers) and on such notice as the Secretary by regulation may prescribe, in a fair and equitable manner as provided in this subsection and section 359d(b)(1)(D).

      ‘(2) OFFSHORE ALLOTMENT-

        ‘(A) COLLECTIVELY- Prior to the allotment of sugar derived from sugarcane to any other State, 325,000 short tons, raw value shall be allotted to the offshore States.

        ‘(B) INDIVIDUALLY- The collective offshore State allotment provided for under subparagraph (A) shall be further allotted among the offshore States in which sugarcane is produced, after a hearing (if requested by the affected sugarcane processors and growers) and on such notice as the Secretary by regulation may prescribe, in a fair and equitable manner on the basis of--

          ‘(i) past marketings of sugar, based on the average of the 2 highest years of production of raw cane sugar from the 1996 through 2000 crops;

          ‘(ii) the ability of processors to market the sugar covered under the allotments for the crop year; and

          ‘(iii) past processings of sugar from sugarcane, based on the 3-year average of the 1998 through 2000 crop years.

      ‘(3) MAINLAND ALLOTMENT- The allotment for sugar derived from sugarcane, less the amount provided for under paragraph (2), shall be allotted among the mainland States in the United States in which sugarcane is produced, after a hearing (if requested by the affected sugarcane processors and growers) and on such notice as the Secretary by regulation may prescribe, in a fair and equitable manner on the basis of--

        ‘(A) past marketings of sugar, based on the average of the 2 highest years of production of raw cane sugar from the 1996 through 2000 crops;

        ‘(B) the ability of processors to market the sugar covered under the allotments for the crop year; and

        ‘(C) past processings of sugar from sugarcane, based on the 3 crop years with the greatest processings (in the mainland States collectively) during the 1991 through 2000 crop years.

    ‘(f) FILLING CANE SUGAR ALLOTMENTS- Except as provided in section 359e, a State cane sugar allotment established under subsection (e) for a crop year may be filled only with sugar processed from sugarcane grown in the State covered by the allotment.

    ‘(g) ADJUSTMENT OF MARKETING ALLOTMENTS-

      ‘(1) IN GENERAL- The Secretary shall, based on reestimates under section 359b(a)(3), adjust upward or downward marketing allotments in a fair and equitable manner, as the Secretary determines appropriate, to reflect changes in estimated sugar consumption, stocks, production, or imports.

      ‘(2) ALLOCATION TO PROCESSORS- In the case of any increase or decrease in an allotment, each allocation to a processor of the allotment under section 359d, and each proportionate share established with respect to the allotment under section 359f(c), shall be increased or decreased by the same percentage that the allotment is increased or decreased.

      ‘(3) CARRY-OVER OF REDUCTIONS- Whenever a marketing allotment for a crop year is required to be reduced during the crop year under this subsection, if, at the time of the reduction, the quantity of sugar marketed exceeds the processor’s reduced allocation, the allocation of an allotment next established for the processor shall be reduced by the quantity of the excess sugar marketed.

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

‘SEC. 359d. ALLOCATION OF MARKETING ALLOTMENTS.

    ‘(a) ALLOCATION TO PROCESSORS- Whenever marketing allotments are established for a crop year under section 359c, in order to afford all interested persons an equitable opportunity to market sugar under an allotment, the Secretary shall allocate each such allotment among the processors covered by the allotment.

    ‘(b) HEARING AND NOTICE-

      ‘(1) CANE SUGAR-

        ‘(A) IN GENERAL- The Secretary shall make allocations for cane sugar after a hearing, if requested by the affected sugarcane processors and growers, and on such notice as the Secretary by regulation may prescribe, in such manner and in such quantities as to provide a fair, efficient, and equitable distribution of the allocations under this paragraph. Each such allocation shall be subject to adjustment under section 359c(g).

        ‘(B) MULTIPLE PROCESSOR STATES- Except as provided in subparagraphs (C) and (D), the Secretary shall allocate the allotment for cane sugar among multiple cane sugar processors in a single State based on--

          ‘(i) past marketings of sugar, based on the average of the 2 highest years of production of raw cane sugar from among the 1996 through 2000 crops;

          ‘(ii) the ability of processors to market sugar covered by that portion of the allotment allocated for the crop year; and

          ‘(iii) past processings of sugar from sugarcane, based on the average of the 3 highest years of production during the 1996 through 2000 crop years.

        ‘(C) TALISMAN PROCESSING FACILITY- In the case of allotments under subparagraph (B) attributable to the operations of the Talisman processing facility before the date of enactment of this subparagraph, the Secretary shall allocate the allotment among processors in the State under subparagraph (A) in accordance with the agreements of March 25 and 26, 1999, between the affected processors and the Secretary of the Interior.

        ‘(D) PROPORTIONATE SHARE STATES- In the case of States subject to section 359f(c), the Secretary shall allocate the allotment for cane sugar among multiple cane sugar processors in a single State based on--

          ‘(i) past marketings of sugar, based on the average of the 2 highest years of production of raw cane sugar from among the 1997 through 2001 crop years;

          ‘(ii) the ability of processors to market sugar covered by that portion of the allotments allocated for the crop year; and

          ‘(iii) past processings of sugar from sugarcane, based on the average of the 2 highest crop years of crop production during the 1997 through 2001 crop years.

        ‘(E) NEW ENTRANTS-

          ‘(i) IN GENERAL- Notwithstanding subparagraphs (B) and (D), the Secretary, on application of any processor that begins processing sugarcane on or after the date of enactment of this subparagraph, and after a hearing (if requested by the affected sugarcane processors and growers) and on such notice as the Secretary by regulation may prescribe, may provide the processor with an allocation that provides a fair, efficient and equitable distribution of the allocations from the allotment for the State in which the processor is located.

          ‘(ii) PROPORTIONATE SHARE STATES- In the case of proportionate share States, the Secretary shall establish proportionate shares in a quantity sufficient to produce the sugarcane required to satisfy the allocations.

          ‘(iii) LIMITATIONS- The allotment for a new processor under this subparagraph shall not exceed--

            ‘(I) in the case of the first crop year of operation of a new processor, 50,000 short tons (raw value); and

            ‘(II) in the case of each subsequent crop year of operation of the new processor, a quantity established by the Secretary in accordance with this subparagraph and the criteria described in subparagraph (B) or (D), as applicable.

          ‘(iv) NEW ENTRANT STATES-

            ‘(I) IN GENERAL- Notwithstanding subparagraphs (A) and (C) of section 359c(e)(3), to accommodate an allocation under clause (i) to a new processor located in a new entrant mainland State, the Secretary shall provide the new entrant mainland State with an allotment.

            ‘(II) EFFECT ON OTHER ALLOTMENTS- The allotment to any new entrant mainland State shall be subtracted, on a pro rata basis, from the allotments otherwise allotted to each mainland State under section 359c(e)(3).

          ‘(v) ADVERSE EFFECTS- Before providing an initial processor allocation or State allotment to a new entrant processor or a new entrant State under this subparagraph, the Secretary shall take into consideration any adverse effects that the provision of the allocation or allotment may have on existing cane processors and producers in mainland States.

          ‘(vi) ABILITY TO MARKET- Consistent with section 359c and this section, any processor allocation or State allotment made to a new entrant processor or to a new entrant State under this subparagraph shall be provided only after the applicant processor, or the applicable processors in the State, have demonstrated the ability to process, produce, and market (including the transfer or delivery of the raw cane sugar to a refinery for further processing or marketing) raw cane sugar for the crop year for which the allotment is applicable.

          ‘(vii) PROHIBITION- Not more than 1 processor allocation provided under this subparagraph may be applicable to any individual sugar processing facility.

        ‘(F) TRANSFER OF OWNERSHIP- Except as otherwise provided in section 359f(c)(8), if a sugarcane processor is sold or otherwise transferred to another owner or is closed as part of an affiliated corporate group processing consolidation, the Secretary shall transfer the allotment allocation for the processor to the purchaser, new owner, successor in interest, or any remaining processor of an affiliated entity, as applicable, of the processor.

      ‘(2) BEET SUGAR-

        ‘(A) IN GENERAL- Except as otherwise provided in this paragraph and sections 359c(g), 359e(b), and 359f(b), the Secretary shall make allocations for beet sugar among beet sugar processors for each crop year that allotments are in effect on the basis of the adjusted weighted average quantity of beet sugar produced by the processors for each of the 1998 through 2000 crop years, as determined under this paragraph.

        ‘(B) QUANTITY- The quantity of an allocation made for a beet sugar processor for a crop year under subparagraph (A) shall bear the same ratio to the quantity of allocations made for all beet sugar processors for the crop year as the adjusted weighted average quantity of beet sugar produced by the processor (as determined under subparagraphs (C) and (D)) bears to the total of the adjusted weighted average quantities of beet sugar produced by all processors (as so determined).

        ‘(C) WEIGHTED AVERAGE QUANTITY- Subject to subparagraph (D), the weighted quantity of beet sugar produced by a beet sugar processor during each of the 1998 through 2000 crop years shall be (as determined by the Secretary)--

          ‘(i) in the case of the 1998 crop year, 25 percent of the quantity of beet sugar produced by the processor during the crop year;

          ‘(ii) in the case of the 1999 crop year, 35 percent of the quantity of beet sugar produced by the processor during the crop year; and

          ‘(iii) in the case of the 2000 crop year, 40 percent of the quantity of beet sugar produced by the processor (including any quantity of sugar received from the Commodity Credit Corporation) during the crop year.

        ‘(D) ADJUSTMENTS-

          ‘(i) IN GENERAL- The Secretary shall adjust the weighted average quantity of beet sugar produced by a beet sugar processor during the 1998 through 2000 crop years under subparagraph (C) if the Secretary determines that the processor--

            ‘(I) during the 1996 through 2000 crop years, opened a sugar beet processing factory;

            ‘(II) during the 1998 through 2000 crop years, closed a sugar beet processing factory;

            ‘(III) during the 1998 through 2000 crop years, constructed a molasses desugarization facility; or

            ‘(IV) during the 1998 through 2000 crop years, suffered substantial quality losses on sugar beets stored during any such crop year.

          ‘(ii) QUANTITY- The quantity of beet sugar produced by a beet sugar processor under subparagraph (C) shall be--

            ‘(I) in the case of a processor that opened a sugar beet processing factory, increased by 1.25 percent of the total of the adjusted weighted average quantities of beet sugar produced by all processors during the 1998 through 2000 crop years (without consideration of any adjustment under this subparagraph) for each sugar beet processing factory that is opened by the processor;

            ‘(II) in the case of a processor that closed a sugar beet processing factory, decreased by 1.25 percent of the total of the adjusted weighted average quantities of beet sugar produced by all processors during the 1998 through 2000 crop years (without consideration of any adjustment under this subparagraph) for each sugar beet processing factory that is closed by the processor;

            ‘(III) in the case of a processor that constructed a molasses desugarization facility, increased by 0.25 percent of the total of the adjusted weighted average quantities of beet sugar produced by all processors during the 1998 through 2000 crop years (without consideration of any adjustment under this subparagraph) for each molasses desugarization facility that is constructed by the processor; and

            ‘(IV) in the case of a processor that suffered substantial quality losses on stored sugar beets, increased by 1.25 percent of the total of the adjusted weighted average quantities of beet sugar produced by all processors during the 1998 through 2000 crop years (without consideration of any adjustment under this subparagraph).

        ‘(E) PERMANENT TERMINATION OF OPERATIONS OF A PROCESSOR- If a processor of beet sugar has been dissolved, liquidated in a bankruptcy proceeding, or otherwise has permanently terminated operations (other than in conjunction with a sale or other disposition of the processor or the assets of the processor), the Secretary shall--

          ‘(i) eliminate the allocation of the processor provided under this section; and

          ‘(ii) distribute the allocation to other beet sugar processors on a pro rata basis.

        ‘(F) SALE OF ALL ASSETS OF A PROCESSOR TO ANOTHER PROCESSOR- If a processor of beet sugar (or all of the assets of the processor) is sold to another processor of beet sugar, the Secretary shall transfer the allocation of the seller to the buyer unless the allocation has been distributed to other sugar beet processors under subparagraph (E).

        ‘(G) SALE OF FACTORIES OF A PROCESSOR TO ANOTHER PROCESSOR-

          ‘(i) IN GENERAL- Subject to subparagraphs (E) and (F), if 1 or more factories of a processor of beet sugar (but not all of the assets of the processor) are sold to another processor of beet sugar during a crop year, the Secretary shall assign a pro rata portion of the allocation of the seller to the allocation of the buyer to reflect the historical contribution of the production of the sold factory or factories to the total allocation of the seller.

          ‘(ii) APPLICATION OF ALLOCATION- The assignment of the allocation under clause (i) shall apply--

            ‘(I) during the remainder of the crop year during which the sale described in clause (i) occurs (referred to in this subparagraph as the ‘initial crop year’); and

            ‘(II) each subsequent crop year (referred in this subparagraph as a ‘subsequent crop year’), subject to clause (iii).

          ‘(iii) SUBSEQUENT CROP YEARS-

            ‘(I) IN GENERAL- The assignment of the allocation under clause (i) shall apply during each subsequent crop year unless the acquired factory or factories continue in operation for less than the initial crop year and the first subsequent crop year.

            ‘(II) REASSIGNMENT- If the acquired factory or factories do not continue in operation for the complete initial crop year and the first subsequent crop year, the Secretary shall reassign the temporary allocation to other processors of beet sugar on a pro rata basis.

          ‘(iv) USE OF OTHER FACTORIES TO FILL ALLOCATION- If the transferred allocation to the buyer for the purchased factory or factories cannot be filled by the production of the purchased factory or factories for the initial crop year or a subsequent crop year, the remainder of the transferred allocation may be filled by beet sugar produced by the buyer from other factories of the buyer.

        ‘(H) NEW ENTRANTS STARTING PRODUCTION OR REOPENING FACTORIES-

          ‘(i) IN GENERAL- Except as provided by clause (ii), if an individual or entity that does not have an allocation of beet sugar under this part (referred to in this paragraph as a ‘new entrant’) starts processing sugar beets after the date of enactment of this subparagraph, or acquires and reopens a factory that produced beet sugar during previous crop years that (at the time of acquisition) has no allocation associated with the factory under this part, the Secretary shall--

            ‘(I) assign an allocation for beet sugar to the new entrant that provides a fair and equitable distribution of the allocations for beet sugar; and

            ‘(II) reduce the allocations for beet sugar of all other processors on a pro rata basis to reflect the new allocation.

          ‘(ii) EXCEPTION- If a new entrant acquires and reopens a factory that previously produced beet sugar from sugar beets and from sugar beet molasses but the factory last processed sugar beets during the 1997 crop year and the new entrant starts to process sugar beets at such factory after the date of enactment of this clause, the Secretary shall--

            ‘(I) assign an allocation for beet sugar to the new entrant that is not less than the greater of 1.67 percent of the total of the adjusted weighted average quantities of beet sugar produced by all processors during the 1998 through 2000 crop years as determined under subsection (b)(2)(C), or 1,500,000 hundredweights; and

            ‘(II) reduce the allocations for beet sugar of all other processors on a pro rata basis to reflect the new allocation.

        ‘(I) NEW ENTRANTS ACQUIRING ONGOING FACTORIES WITH PRODUCTION HISTORY- If a new entrant acquires a factory that has production history during the period of the 1998 through 2000 crop years and that is producing beet sugar at the time the allocations are made from a processor that has an allocation of beet sugar, the Secretary shall transfer a portion of the allocation of the seller to the new entrant to reflect the historical contribution of the production of the sold factory to the total allocation of the seller.

‘SEC. 359e. REASSIGNMENT OF DEFICITS.

    ‘(a) ESTIMATES OF DEFICITS- At any time allotments are in effect under this part, the Secretary, from time to time, shall determine whether (in view of then-current inventories of sugar, the estimated production of sugar and expected marketings, and other pertinent factors) any processor of sugarcane will be unable to market the sugar covered by the portion of the State cane sugar allotment allocated to the processor and whether any processor of sugar beets will be unable to market sugar covered by the portion of the beet sugar allotment allocated to the processor.

    ‘(b) REASSIGNMENT OF DEFICITS-

      ‘(1) CANE SUGAR- If the Secretary determines that any sugarcane processor who has been allocated a share of a State cane sugar allotment will be unable to market the processor’s allocation of the State’s allotment for the crop year--

        ‘(A) the Secretary first shall reassign the estimated quantity of the deficit to the allocations for other processors within that State, depending on the capacity of each other processor to fill the portion of the deficit to be assigned to it and taking into account the interests of producers served by the processors;

        ‘(B) if after the reassignments the deficit cannot be completely eliminated, the Secretary shall reassign the estimated quantity of the deficit proportionately to the allotments for other cane sugar States, depending on the capacity of each other State to fill the portion of the deficit to be assigned to it, with the reassigned quantity to each State to be allocated among processors in that State in proportion to the allocations of the processors;

        ‘(C) if after the reassignments the deficit cannot be completely eliminated, the Secretary shall reassign the estimated quantity of the deficit to the Commodity Credit Corporation and shall sell such quantity of sugar from inventories of the Corporation unless the Secretary determines that such sales would have a significant effect on the price of sugar; and

        ‘(D) if after the reassignments and sales, the deficit cannot be completely eliminated, the Secretary shall reassign the remainder to imports.

      ‘(2) BEET SUGAR- If the Secretary determines that a sugar beet processor who has been allocated a share of the beet sugar allotment will be unable to market that allocation--

        ‘(A) the Secretary first shall reassign the estimated quantity of the deficit to the allotments for other sugar beet processors, depending on the capacity of each other processor to fill the portion of the deficit to be assigned to it and taking into account the interests of producers served by the processors;

        ‘(B) if after the reassignments the deficit cannot be completely eliminated, the Secretary shall reassign the estimated quantity of the deficit to the Commodity Credit Corporation and shall sell such quantity of sugar from inventories of the Corporation unless the Secretary determines that such sales would have a significant effect on the price of sugar; and

        ‘(C) if after the reassignments and sales, the deficit cannot be completely eliminated, the Secretary shall reassign the remainder to imports.

      ‘(3) CORRESPONDING INCREASE- The allocation of each processor receiving a reassigned quantity of an allotment under this subsection for a crop year shall be increased to reflect the reassignment.

‘SEC. 359f. PROVISIONS APPLICABLE TO PRODUCERS.

    ‘(a) PROCESSOR ASSURANCES-

      ‘(1) IN GENERAL- If allotments for a crop year are allocated to processors under section 359d, the Secretary shall obtain from the processors such assurances as the Secretary considers adequate that the allocation will be shared among producers served by the processor in a fair and equitable manner that adequately reflects producers’ production histories.

      ‘(2) ARBITRATION-

        ‘(A) IN GENERAL- Any dispute between a processor and a producer, or group of producers, with respect to the sharing of the allocation to the processor shall be resolved through arbitration by the Secretary on the request of either party.

        ‘(B) PERIOD- The arbitration shall, to the maximum extent practicable, be--

          ‘(i) commenced not more than 45 days after the request; and

          ‘(ii) completed not more than 60 days after the request.

    ‘(b) SUGAR BEET PROCESSING FACILITY CLOSURES-

      ‘(1) IN GENERAL- If a sugar beet processing facility is closed and the sugar beet growers that previously delivered beets to the facility elect to deliver their beets to another processing company, the growers may petition the Secretary to modify allocations under this part to allow the delivery.

      ‘(2) INCREASED ALLOCATION FOR PROCESSING COMPANY- The Secretary may increase the allocation to the processing company to which the growers elect to deliver their sugar beets, with the approval of the processing company, to a level that does not exceed the processing capacity of the processing company, to accommodate the change in deliveries.

      ‘(3) DECREASED ALLOCATION FOR CLOSED COMPANY- The increased allocation shall be deducted from the allocation to the company that owned the processing facility that has been closed and the remaining allocation shall be unaffected.

      ‘(4) TIMING- The determinations of the Secretary on the issues raised by the petition shall be made within 60 days after the filing of the petition.

    ‘(c) PROPORTIONATE SHARES OF CERTAIN ALLOTMENTS-

      ‘(1) IN GENERAL-

        ‘(A) STATES AFFECTED- In any case in which a State allotment is established under section 359c(f) and there are in excess of 250 sugarcane producers in the State (other than Puerto Rico), the Secretary shall make a determination under subparagraph (B).

        ‘(B) DETERMINATION- The Secretary shall determine, for each State allotment described in subparagraph (A), whether the production of sugarcane, in the absence of proportionate shares, will be greater than the quantity needed to enable processors to fill the allotment and provide a normal carryover inventory of sugar.

      ‘(2) ESTABLISHMENT OF PROPORTIONATE SHARES- If the Secretary determines under paragraph (1) that the quantity of sugarcane produced by producers in the area covered by a State allotment for a crop year will be in excess of the quantity needed to enable processors to fill the allotment for the crop year and provide a normal carryover inventory of sugar, the Secretary shall establish a proportionate share for each sugarcane-producing farm that limits the acreage of sugarcane that may be harvested on the farm for sugar or seed during the crop year the allotment is in effect as provided in this subsection. Each such proportionate share shall be subject to adjustment under paragraph (7) and section 359c(g).

      ‘(3) METHOD OF DETERMINING- For purposes of determining proportionate shares for any crop of sugarcane:

        ‘(A) The Secretary shall establish the State’s per-acre yield goal for a crop of sugarcane at a level (not less than the average per-acre yield in the State for the 2 highest years from among the 1999, 2000, and 2001 crop years, as determined by the Secretary) that will ensure an adequate net return per pound to producers in the State, taking into consideration any available production research data that the Secretary considers relevant.

        ‘(B) The Secretary shall adjust the per-acre yield goal by the average recovery rate of sugar produced from sugarcane by processors in the State.

        ‘(C) The Secretary shall convert the State allotment for the crop year involved into a State acreage allotment for the crop by dividing the State allotment by the per-acre yield goal for the State, as established under subparagraph (A) and as further adjusted under subparagraph (B).

        ‘(D) The Secretary shall establish a uniform reduction percentage for the crop by dividing the State acreage allotment, as determined for the crop under subparagraph (C), by the sum of all adjusted acreage bases in the State, as determined by the Secretary.

        ‘(E) The uniform reduction percentage for the crop, as determined under subparagraph (D), shall be applied to the acreage base for each sugarcane-producing farm in the State to determine the farm’s proportionate share of sugarcane acreage that may be harvested for sugar or seed.

      ‘(4) ACREAGE BASE- For purposes of this subsection, the acreage base for each sugarcane-producing farm shall be determined by the Secretary, as follows:

        ‘(A) The acreage base for any farm shall be the number of acres that is equal to the average of the acreage planted and considered planted for harvest for sugar or seed on the farm in the 2 highest of the 1999, 2000, and 2001 crop years.

        ‘(B) Acreage planted to sugarcane that producers on a farm were unable to harvest to sugarcane for sugar or seed because of drought, flood, other natural disaster, or other condition beyond the control of the producers may be considered as harvested for the production of sugar or seed for purposes of this paragraph.

      ‘(5) VIOLATION-

        ‘(A) IN GENERAL- Whenever proportionate shares are in effect in a State for a crop of sugarcane, producers on a farm shall not knowingly harvest, or allow to be harvested, for sugar or seed an acreage of sugarcane in excess of the farm’s proportionate share for the crop year, or otherwise violate proportionate share regulations issued by the Secretary under section 359h(a).

        ‘(B) DETERMINATION OF VIOLATION- No producer shall be considered to have violated subparagraph (A) unless the processor of the sugarcane harvested by such producer from acreage in excess of the proportionate share of the farm markets an amount of sugar that exceeds the allocation of such processor for a crop year.

        ‘(C) CIVIL PENALTY- Any producer on a farm who violates subparagraph (A) by knowingly harvesting, or allowing to be harvested, an acreage of sugarcane in excess of the farm’s proportionate share shall be liable to the Commodity Credit Corporation for a civil penalty equal to one and one-half times the United States market value of the quantity of sugar that is marketed by the processor of such sugarcane in excess of the allocation of such processor for the crop year. The Secretary shall prorate penalties imposed under this subparagraph in a fair and equitable manner among all the producers of sugarcane harvested from excess acreage that is acquired by such processor.

      ‘(6) WAIVER- Notwithstanding the preceding subparagraph, the Secretary may authorize the county and State committees established under section 8(b) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)) to waive or modify deadlines and other proportionate share requirements in cases in which lateness or failure to meet the other requirements does not affect adversely the operation of proportionate shares.

      ‘(7) ADJUSTMENTS- Whenever the Secretary determines that, because of a natural disaster or other condition beyond the control of producers that adversely affects a crop of sugarcane subject to proportionate shares, the amount of sugarcane produced by producers subject to the proportionate shares will not be sufficient to enable processors in the State to meet the State’s cane sugar allotment and provide a normal carryover inventory of sugar, the Secretary may uniformly allow producers to harvest an amount of sugarcane in excess of their proportionate share, or suspend proportionate shares entirely, as necessary to enable processors to meet the State allotment and provide a normal carryover inventory of sugar.

      ‘(8) PROCESSING FACILITY CLOSURES-

        ‘(A) IN GENERAL- If a sugarcane processing facility subject to this subsection is closed and the sugarcane growers that delivered sugarcane to the facility prior to closure elect to deliver their sugarcane to another processing company, the growers may petition the Secretary to modify allocations under this part to allow the delivery.

        ‘(B) INCREASED ALLOCATION FOR PROCESSING COMPANY- The Secretary may increase the allocation to the processing company to which the growers elect to deliver the sugarcane, with the approval of the processing company, to a level that does not exceed the processing capacity of the processing company, to accommodate the change in deliveries.

        ‘(C) DECREASED ALLOCATION FOR CLOSED COMPANY- The increased allocation shall be deducted from the allocation to the company that owned the processing facility that has been closed and the remaining allocation shall be unaffected.

        ‘(D) TIMING- The determinations of the Secretary on the issues raised by the petition shall be made within 60 days after the filing of the petition.

‘SEC. 359g. SPECIAL RULES.

    ‘(a) TRANSFER OF ACREAGE BASE HISTORY- For the purpose of establishing proportionate shares for sugarcane farms under section 359f(c), the Secretary, on application of any producer, with the written consent of all owners of a farm, may transfer the acreage base history of the farm to any other parcels of land of the applicant.

    ‘(b) PRESERVATION OF ACREAGE BASE HISTORY- If for reasons beyond the control of a producer on a farm, the producer is unable to harvest an acreage of sugarcane for sugar or seed with respect to all or a portion of the proportionate share established for the farm under section 359f(c), the Secretary, on the application of the producer and with the written consent of all owners of the farm, may preserve for a period of not more than 5 consecutive years the acreage base history of the farm to the extent of the proportionate share involved. The Secretary may permit the proportionate share to be redistributed to other farms, but no acreage base history for purposes of establishing acreage bases shall accrue to the other farms by virtue of the redistribution of the proportionate share.

    ‘(c) REVISIONS OF ALLOCATIONS AND PROPORTIONATE SHARES- The Secretary, after such notice as the Secretary by regulation may prescribe, may revise or amend any allocation of a marketing allotment under section 359d, or any proportionate share established or adjusted for a farm under section 359f(c), on the same basis as the initial allocation or proportionate share was required to be established.

    ‘(d) TRANSFERS OF MILL ALLOCATIONS-

      ‘(1) TRANSFER AUTHORIZED- A producer in a proportionate share State, upon written consent from all crop-share owners (or the representative of the crop-share owners) of a farm, and from the processing company holding the applicable allocation for such shares, may deliver sugarcane to another processing company if the additional delivery, when combined with such other processing company’s existing deliveries, does not exceed the processing capacity of the company.

      ‘(2) ALLOCATION ADJUSTMENT- Notwithstanding section 359d, the Secretary shall adjust the allocations of each of such processing companies affected by a transfer under paragraph (1) to reflect the change in deliveries, based on the product of--

        ‘(A) the number of acres of proportionate shares being transferred; and

        ‘(B) the State’s per acre yield goal established under section 359f(c)(3).

‘SEC. 359h. REGULATIONS; VIOLATIONS; PUBLICATION OF SECRETARY’S DETERMINATIONS; JURISDICTION OF THE COURTS; UNITED STATES ATTORNEYS.

    ‘(a) REGULATIONS- The Secretary or the Commodity Credit Corporation, as appropriate, shall issue such regulations as may be necessary to carry out the authority vested in the Secretary in administering this part.

    ‘(b) VIOLATION- Any person knowingly violating any regulation of the Secretary issued under subsection (a) shall be subject to a civil penalty of not more than $5,000 for each violation.

    ‘(c) PUBLICATION IN FEDERAL REGISTER- Each determination issued by the Secretary to establish, adjust, or suspend allotments under this part shall be promptly published in the Federal Register and shall be accompanied by a statement of the reasons for the determination.

    ‘(d) JURISDICTION OF COURTS; UNITED STATES ATTORNEYS-

      ‘(1) JURISDICTION OF COURTS- The several district courts of the United States are vested with jurisdiction specifically to enforce, and to prevent and restrain any person from violating, this part or any regulation issued thereunder.

      ‘(2) UNITED STATES ATTORNEYS- Whenever the Secretary shall so request, it shall be the duty of the several United States attorneys, in their respective districts, to institute proceedings to enforce the remedies and to collect the penalties provided for in this part. The Secretary may elect not to refer to a United States attorney any violation of this part or regulation when the Secretary determines that the administration and enforcement of this part would be adequately served by written notice or warning to any person committing the violation.

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

‘SEC. 359i. APPEALS.

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

    ‘(b) PROCEDURE-

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

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

    ‘(c) SPECIAL APPEAL PROCESS REGARDING BEET SUGAR ALLOCATIONS-

      ‘(1) APPEAL AUTHORIZED- Beginning after the 2006 crop year, a processor that has an allocation of the beet sugar allotment under this part (referred to in this subsection as a ‘petitioner’) may file a notice of appeal with the Secretary regarding the petitioner’s beet sugar allocation. Except as provided in paragraph (2), the Secretary shall consider the appeal if the notice alleges that any processor that has a beet sugar allocation has failed to fill at least 82.5 percent of its allocation of the beet sugar allotment with sugar produced by it or received from the Commodity Credit Corporation in 2 out of the 3 crop years preceding the crop year in which the appeal is filed. A processor that is alleged to have failed to fill at least 82.5 percent of its allocation shall be allowed to fully participate in the appeal.

      ‘(2) EXCEPTIONS- An appeal under paragraph (1) shall not be based on the failure of a processor to fill at least 82.5 percent of its allocation because of drought, flood, hail, or other weather disaster, as determined by the Secretary. The determination by the Secretary shall not require a formal disaster declaration.

      ‘(3) RESPONSE TO APPEAL- Upon the petitioner making an appeal to the Secretary, and upon a review by the Secretary of how processors have filled their allocations, the Secretary may--

        ‘(A) assign an increased allocation for beet sugar to the petitioner that provides a fair and equitable distribution of the allocations for beet sugar, taking into account--

          ‘(i) production history during the period beginning on April 4, 1996, and through the date of enactment of the Farm Security and Rural Investment Act of 2002;

          ‘(ii) capital investment during that period;

          ‘(iii) increases in United States sugar consumption; and

          ‘(iv) the ability or inability of processors to fill the allocations they have received under this part; and

        ‘(B) reduce, correspondingly, the allocation for beet sugar of each processor determined to have failed to fill at least 82.5 percent of its allocation of the beet sugar allotment as described in paragraph (1).

      ‘(4) FILING DEADLINE- For purposes of the filing deadline specified in subsection (b)(1), the 20-day period shall commence on the date on which the Secretary announces the allocations for the subsequent crop year or October 1, whichever is earlier.

‘SEC. 359j. ADMINISTRATION.

    ‘(a) USE OF CERTAIN AGENCIES- In carrying out this part, the Secretary may use the services of local committees of sugar beet or sugarcane producers, sugarcane processors, or sugar beet processors, State and county committees established under section 8(b) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)), and the departments and agencies of the United States Government.

    ‘(b) USE OF COMMODITY CREDIT CORPORATION- The Secretary shall use the services, facilities, funds, and authorities of the Commodity Credit Corporation to carry out this part.

‘SEC. 359k. REALLOCATING SUGAR QUOTA IMPORT SHORTFALLS.

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

    ‘(b) QUALIFIED SUPPLYING COUNTRY DEFINED- In this section, the term ‘qualified supplying country’ means one of the following foreign countries that is allowed to export cane sugar to the United States under an agreement or any other country with which the United States has an agreement relating to the importation of cane sugar:

xl Argentina

xl Australia

xl Barbados

xl Belize

xl Bolivia

xl Brazil

xl Colombia

xl Republic of the Congo

xl Costa Rica

xl Dominican Republic

xl Ecuador

xl El Salvador

xl Fiji

xl Gabon

xl Guatemala

xl Guyana

xl Haiti

xl Honduras

xl India

xl Cote D’Ivoire, formerly known as the Ivory Coast

xl Jamaica

xl Madagascar

xl Malawi

xl Mauritius

xl Mexico

xl Mozambique

xl Nicaragua

xl Panama

xl Papua New Guinea

xl Paraguay

xl Peru

xl Philippines

xl St. Kitts and Nevis

xl South Africa

xl Swaziland

xl Taiwan

xl Thailand

xl Trinidad-Tobago

xl Uruguay

xl Zimbabwe.’.

Subtitle E--Dairy

SEC. 1501. MILK PRICE SUPPORT PROGRAM.

    (a) SUPPORT ACTIVITIES- During the period beginning on June 1, 2002, and ending on December 31, 2007, the Secretary of Agriculture shall support the price of milk produced in the 48 contiguous States through the purchase of cheese, butter, and nonfat dry milk produced from the milk.

    (b) RATE- During the period specified in subsection (a), the price of milk shall be supported at a rate equal to $9.90 per hundredweight for milk containing 3.67 percent butterfat.

    (c) PURCHASE PRICES-

      (1) UNIFORM PRICES- The support purchase prices under this section for each of the products of milk (butter, cheese, and nonfat dry milk) announced by the Secretary shall be the same for all of that product sold by persons offering to sell the product to the Secretary.

      (2) SUFFICIENT PRICES- The purchase prices shall be sufficient to enable plants of average efficiency to pay producers, on average, a price that is not less than the rate of price support for milk in effect under subsection (b).

    (d) SPECIAL RULE FOR BUTTER AND NONFAT DRY MILK PURCHASE PRICES-

      (1) ALLOCATION OF PURCHASE PRICES- The Secretary may allocate the rate of price support between the purchase prices for nonfat dry milk and butter in a manner that will result in the lowest level of expenditures by the Commodity Credit Corporation or achieve such other objectives as the Secretary considers appropriate. Not later than 10 days after making or changing an allocation, the Secretary shall notify the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate of the allocation. Section 553 of title 5, United States Code, shall not apply with respect to the implementation of this section.

      (2) TIMING OF PURCHASE PRICE ADJUSTMENTS- The Secretary may make any such adjustments in the purchase prices for nonfat dry milk and butter the Secretary considers to be necessary not more than twice in each calendar year.

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

SEC. 1502. NATIONAL DAIRY MARKET LOSS PAYMENTS.

    (a) DEFINITIONS- In this section:

      (1) CLASS I MILK- The term ‘Class I milk’ means milk (including milk components) classified as Class I milk under a Federal milk marketing order.

      (2) ELIGIBLE PRODUCTION- The term ‘eligible production’ means milk produced by a producer in a participating State.

      (3) FEDERAL MILK MARKETING ORDER- The term ‘Federal milk marketing order’ means an order issued under section 8c of the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937.

      (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 Secretary shall offer to enter into contracts with producers on a dairy farm located in a participating State under which the producers receive payments on eligible production.

    (c) AMOUNT- Payments to a producer under this section shall be calculated by multiplying (as determined by the Secretary)--

      (1) the payment quantity for the producer during the applicable month established under subsection (d);

      (2) the amount equal to--

        (A) $16.94 per hundredweight; less

        (B) the Class I milk price per hundredweight in Boston under the applicable Federal milk marketing order; by

      (3) 45 percent.

    (d) PAYMENT QUANTITY-

      (1) IN GENERAL- Subject to paragraph (2), the payment quantity for a producer during the applicable month under this section shall be equal to the quantity of eligible production marketed by the producer during the month.

      (2) LIMITATION- The payment quantity for all producers on a single dairy operation during the months of the applicable fiscal year for which the producers receive payments under subsection (b) shall not exceed 2,400,000 pounds. For purposes of determining whether producers are producers on separate dairy operations or a single dairy operation, the Secretary shall apply the same standards as were applied in implementing the dairy program under section 805 of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2001 (as enacted into law by Public Law 106-387; 114 Stat. 1549A-50).

      (3) RECONSTITUTION- The Secretary shall promulgate regulations to ensure that a producer does not reconstitute a dairy operation for the sole purpose of receiving additional payments under this section.

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

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

    (g) DURATION OF CONTRACT-

      (1) IN GENERAL- Except as provided in paragraph (2) and subsection (h), any contract entered into by producers on a dairy farm under this section shall cover eligible production marketed by the producers on the dairy farm during the period starting with the first day of month the producers on the dairy farm enter into the contract and ending on September 30, 2005.

      (2) VIOLATIONS- If a producer violates the contract, the Secretary may--

        (A) terminate the contract and allow the producer to retain any payments received under the contract; or

        (B) allow the contract to remain in effect and require the producer to repay a portion of the payments received under the contract based on the severity of the violation.

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

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

    (a) DAIRY EXPORT INCENTIVE PROGRAM- Section 153(a) of the Food Security Act of 1985 (15 U.S.C. 713a-14(a)) is amended by striking ‘2002’ and inserting ‘2007’.

    (b) DAIRY INDEMNITY PROGRAM- Section 3 of Public Law 90-484 (7 U.S.C. 450l) is amended by striking ‘1995’ and inserting ‘2007’.

SEC. 1504. DAIRY PRODUCT MANDATORY REPORTING.

    Section 272(1) of the Agricultural Marketing Act of 1946 (7 U.S.C. 1637a(1)) is amended--

      (1) by striking ‘means manufactured dairy products’ and inserting ‘means--

        ‘(A) manufactured dairy products’;

      (2) by striking the period at the end and inserting ‘; and’; and

      (3) by adding at the end the following:

        ‘(B) substantially identical products designated by the Secretary.’.

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

    (a) DEFINITIONS- Section 111 of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4502) is amended--

      (1) in subsection (k), by striking ‘and’ at the end;

      (2) in subsection (l), by striking the period at the end and inserting a semicolon; and

      (3) by adding at the end the following:

      ‘(m) the term ‘imported dairy product’ means any dairy product that is imported into the United States (as defined in subsection (l)), including dairy products imported into the United States in the form of--

        ‘(1) milk, cream, and fresh and dried dairy products;

        ‘(2) butter and butterfat mixtures;

        ‘(3) cheese; and

        ‘(4) casein and mixtures;

      ‘(n) the term ‘importer’ means a person that imports an imported dairy product into the United States; and

      ‘(o) the term ‘Customs’ means the United States Customs Service.’.

    (b) REPRESENTATION OF IMPORTERS ON BOARD- Section 113(b) of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4504(b)) is amended--

      (1) by inserting ‘NATIONAL DAIRY PROMOTION AND RESEARCH BOARD- ’ after ‘(b)’;

      (2) by designating the first through ninth sentences as paragraphs (1) through (5) and paragraphs (7) through (10), respectively, and indenting the paragraphs appropriately;

      (3) in paragraph (2) (as so designated), by striking ‘Members’ and inserting ‘Except as provided in paragraph (6), the members’;

      (4) by inserting after paragraph (5) (as so designated) the following:

      ‘(6) IMPORTERS-

        ‘(A) INITIAL REPRESENTATION- In making initial appointments to the Board of importer representatives, the Secretary shall appoint 2 members who represent importers of dairy products and are subject to assessments under the order.

        ‘(B) SUBSEQUENT REPRESENTATION- At least once every 3 years after the initial appointment of importer representatives under subparagraph (A), the Secretary shall review the average volume of domestic production of dairy products compared to the average volume of imports of dairy products into the United States during the previous 3 years and, on the basis of that review, shall reapportion importer representation on the Board to reflect the proportional share of the United States market by domestic production and imported dairy products.

        ‘(C) ADDITIONAL MEMBERS; NOMINATIONS- The members appointed under this paragraph--

          ‘(i) shall be in addition to the total number of members appointed under paragraph (2); and

          ‘(ii) shall be appointed from nominations submitted by importers under such procedures as the Secretary determines to be appropriate.’; and

      (5) in paragraph (8) (as so designated), by striking ‘is produced’ and inserting ‘is produced as well as importers of dairy products’.

    (c) BUDGETS- Section 113(e) of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4504(e)) is amended--

      (1) by striking ‘(e)’ and inserting:

    ‘(e) BUDGETS-

      ‘(1) PREPARATION AND SUBMISSION- ’;

      (2) by striking the last sentence; and

      (3) by adding at the end the following:

      ‘(2) FOREIGN MARKET EFFORTS- The order shall authorize the Board to expend in the maintenance and expansion of foreign markets an amount not to exceed the amount collected from United States producers for a fiscal year. Of those funds, for each of the 2002 through 2007 fiscal years, the Board’s budget may provide for the expenditure of revenues available to the Board to develop international markets for, and to promote within such markets, the consumption of dairy products produced or manufactured in the United States.’.

    (d) IMPORTER ASSESSMENT- Section 113(g) of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4504(g)) is amended--

      (1) by inserting ‘ASSESSMENTS- ’ after ‘(g)’;

      (2) by designating the first through fifth sentences as paragraphs (1) through (5), respectively, and indenting appropriately;

      (3) in paragraph (3) (as so designated)--

        (A) by inserting ‘for milk produced in the United States and imported dairy products’ after ‘The rate of assessment’; and

        (B) by inserting before the period at the end the following: ‘, as determined by the Secretary’; and

      (4) by adding at the end the following:

      ‘(6) IMPORTERS-

        ‘(A) IN GENERAL- The order shall provide that each importer of imported dairy products shall pay an assessment to the Board in the manner prescribed by the order.

        ‘(B) TIME FOR PAYMENT- The assessment on imported dairy products shall be paid by the importer to Customs at the time the entry documents are filed with Customs. Customs shall remit the assessments to the Board. For purposes of this subparagraph, the term ‘importer’ includes persons who hold title to foreign-produced dairy products immediately upon release by Customs, as well as persons who act on behalf of others, as agents, brokers, or consignees, to secure the release of dairy products from Customs.

        ‘(C) USE OF ASSESSMENTS ON IMPORTED DAIRY PRODUCTS- Assessments collected on imported dairy products shall not be used for foreign market promotion.’.

    (e) RECORDS- Section 113(k) of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4504(k)) is amended in the first sentence by striking ‘person receiving’ and inserting ‘importer of imported dairy products, each person receiving’.

    (f) IMPORTER ELIGIBILITY TO VOTE IN REFERENDUM- Section 116(b) of the Dairy Promotion Stabilization Act of 1983 (7 U.S.C. 4507(b)) is amended--

      (1) in the first sentence--

        (A) by inserting after ‘of producers’ the following: ‘and importers’; and

        (B) by inserting after ‘the producers’ the following: ‘and importers’; and

      (2) in the second sentence, by inserting after ‘commercial use’ the following: ‘and importers voting in the referendum (who have been engaged in the importation of dairy products during the same representative period, as determined by the Secretary)’.

    (g) ORDER IMPLEMENTATION AND INTERNATIONAL TRADE OBLIGATIONS- Section 112 of the Dairy Promotion Stabilization Act of 1983 (7 U.S.C. 4503) is amended by adding at the end the following:

    ‘(d) ORDER IMPLEMENTATION AND INTERNATIONAL TRADE OBLIGATIONS- The Secretary, in consultation with the United States Trade Representative, shall ensure that the order is implemented in a manner consistent with the international trade obligations of the Federal Government.’.

    (h) CONFORMING AMENDMENTS TO REFLECT ADDITION OF IMPORTERS- The Dairy Production Stabilization Act of 1983 is amended--

      (1) in section 110(b) (7 U.S.C. 4501(b))--

        (A) in the first sentence--

          (i) by inserting after ‘commercial use’ the following: ‘and on imported dairy products’; and

          (ii) by striking ‘products produced in the United States.’ and inserting ‘products.’; and

        (B) in the second sentence, by inserting after ‘produce milk’ the following: ‘or the right of any person to import dairy products’; and

      (2) in section 111(d) (7 U.S.C. 4502(d)), by striking ‘produced in the United States’.

SEC. 1506. FLUID MILK PROMOTION.

    (a) DEFINITION OF FLUID MILK PRODUCT- Section 1999C of the Fluid Milk Promotion Act of 1990 (7 U.S.C. 6402) is amended by striking paragraph (3) and inserting the following:

      ‘(3) FLUID MILK PRODUCT- The term ‘fluid milk product’ has the meaning given the term in--

        ‘(A) section 1000.15 of title 7, Code of Federal Regulations, subject to such amendments as may be made by the Secretary; or

        ‘(B) any successor regulation.’.

    (b) DEFINITION OF FLUID MILK PROCESSOR- Section 1999C(4) of the Fluid Milk Promotion Act of 1990 (7 U.S.C. 6402(4)) is amended by striking ‘500,000 pounds of fluid milk products in consumer-type packages per month’ and inserting ‘3,000,000 pounds of fluid milk products in consumer-type packages per month (excluding products delivered directly to the place of residence of a consumer)’.

    (c) ELIMINATION OF ORDER TERMINATION DATE- Section 1999O of the Fluid Milk Promotion Act of 1990 (7 U.S.C. 6414) is amended--

      (1) by striking subsection (a); and

      (2) by redesignating subsections (b) and (c) as subsections (a) and (b), respectively.

SEC. 1507. STUDY OF NATIONAL DAIRY POLICY.

    (a) STUDY REQUIRED- The Secretary of Agriculture shall conduct a comprehensive economic evaluation of the potential direct and indirect effects of the various elements of the national dairy policy, including an examination of the effect of the national dairy policy on--

      (1) farm price stability, farm profitability and viability, and local rural economies in the United States;

      (2) child, senior, and low-income nutrition programs, including impacts on schools and institutions participating in the programs, on program recipients, and other factors; and

      (3) the wholesale and retail cost of fluid milk, dairy farms, and milk utilization.

    (b) REPORT- Not later than 1 year after the date of enactment of this Act, the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report describing the results of the study required by this section.

    (c) NATIONAL DAIRY POLICY DEFINED- In this section, the term ‘national dairy policy’ means the dairy policy of the United States as evidenced by the following policies and programs:

      (1) Federal milk marketing orders issued under section 8c of the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with amendments by the Agricultural Marketing Act of 1937.

      (2) Interstate dairy compacts (including proposed compacts described in H.R. 1827 and S. 1157, as introduced in the 107th Congress).

      (3) Over-order premiums and State pricing programs.

      (4) Direct payments to milk producers.

      (5) Federal milk price support program established under section 1401.

      (6) Export programs regarding milk and dairy products, such as the dairy export incentive program established under section 153 of the Food Security Act of 1985 (15 U.S.C. 713a-14).

SEC. 1508. STUDIES OF EFFECTS OF CHANGES IN APPROACH TO NATIONAL DAIRY POLICY AND FLUID MILK IDENTITY STANDARDS.

    (a) FEDERAL DAIRY POLICY CHANGES- The Secretary of Agriculture shall conduct a study of the effects of--

      (1) terminating all Federal programs relating to price support and supply management for milk; and

      (2) granting the consent of Congress to cooperative efforts by States to manage milk prices and supply.

    (b) FLUID MILK IDENTITY STANDARDS- The Secretary shall conduct a study of the effects of including in the standard of identity for fluid milk a required minimum protein content that is commensurate with the average nonfat solids content of bovine milk produced in the United States.

    (c) REPORTS- Not later than 1 year after the date of enactment of this Act, the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report describing the results of the studies required by this section.

Subtitle F--Administration

SEC. 1601. ADMINISTRATION GENERALLY.

    (a) USE OF COMMODITY CREDIT CORPORATION- The Secretary shall use the funds, facilities, and authorities of the Commodity Credit Corporation to carry out this title.

    (b) DETERMINATIONS BY SECRETARY- A determination made by the Secretary under this title shall be final and conclusive.

    (c) REGULATIONS-

      (1) IN GENERAL- Not later than 90 days after the date of the enactment of this Act, the Secretary and the Commodity Credit Corporation, as appropriate, shall promulgate such regulations as are necessary to implement this title.

      (2) PROCEDURE- The promulgation of the regulations and administration of this title shall be made without regard to--

        (A) chapter 35 of title 44, United States Code (commonly know 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.

    (d) TREATMENT OF ADVANCE PAYMENT OPTION- The protection that was afforded producers that had an option to elect to accelerate the receipt of any payment under a production flexibility contract payable under the Federal Agriculture Improvement and Reform Act of 1996, as provided by section 525 of Public 106-170 (113 Stat. 1928; 7 U.S.C. 7212 note), shall also apply to the option to receive--

      (1) the advance payment of direct payments and counter-cyclical payments under subtitle A and subtitle C; and

      (2) the single payment of compensation for eligible peanut quota holders under section 1310.

    (e) ADJUSTMENT AUTHORITY RELATED TO URUGUAY ROUND COMPLIANCE-

      (1) REQUIRED DETERMINATION; ADJUSTMENT- If the Secretary determines that expenditures under subtitles A through E that are subject to the total allowable domestic support levels under the Uruguay Round Agreements (as defined in section 2 of the Uruguay Round Agreements Act (19 U.S.C. 3501)), as in effect on the date of enactment of this Act, will exceed such allowable levels for any applicable reporting period, the Secretary shall, to the maximum extent practicable, make adjustments in the amount of such expenditures during that period to ensure that such expenditures do not exceed such allowable levels.

      (2) CONGRESSIONAL NOTIFICATION- Before making any adjustment under paragraph (1), the Secretary shall submit to the Committee on Agriculture, Nutrition, and Forestry of the Senate and the Committee on Agriculture of the House of Representatives a report describing the determination made under that paragraph and the extent of the adjustment to be made.

SEC. 1602. SUSPENSION OF PERMANENT PRICE SUPPORT AUTHORITY.

    (a) AGRICULTURAL ADJUSTMENT ACT OF 1938- The following provisions of the Agricultural Adjustment Act of 1938 shall not be applicable to the 2002 through 2007 crops of covered commodities, peanuts, and sugar and shall not be applicable to milk during the period beginning on the date of enactment of this Act through December 31, 2007:

      (1) Parts II through V of subtitle B of title III (7 U.S.C. 1326-1351).

      (2) In the case of upland cotton, section 377 (7 U.S.C. 1377).

      (3) Subtitle D of title III (7 U.S.C. 1379a-1379j).

      (4) Title IV (7 U.S.C. 1401-1407).

    (b) AGRICULTURAL ACT OF 1949- The following provisions of the Agricultural Act of 1949 shall not be applicable to the 2002 through 2007 crops of covered commodities, peanuts, and sugar and shall not be applicable to milk during the period beginning on the date of enactment of this Act and through December 31, 2007:

      (1) Section 101 (7 U.S.C. 1441).

      (2) Section 103(a) (7 U.S.C. 1444(a)).

      (3) Section 105 (7 U.S.C. 1444b).

      (4) Section 107 (7 U.S.C. 1445a).

      (5) Section 110 (7 U.S.C. 1445e).

      (6) Section 112 (7 U.S.C. 1445g).

      (7) Section 115 (7 U.S.C. 1445k).

      (8) Section 201 (7 U.S.C. 1446).

      (9) Title III (7 U.S.C. 1447-1449).

      (10) Title IV (7 U.S.C. 1421-1433d), other than sections 404, 412, and 416 (7 U.S.C. 1424, 1429, and 1431).

      (11) Title V (7 U.S.C. 1461-1469).

      (12) Title VI (7 U.S.C. 1471-1471j).

    (c) SUSPENSION OF CERTAIN QUOTA PROVISIONS- The joint resolution entitled ‘A joint resolution relating to corn and wheat marketing quotas under the Agricultural Adjustment Act of 1938, as amended’, approved May 26, 1941 (7 U.S.C. 1330 and 1340), shall not be applicable to the crops of wheat planted for harvest in the calendar years 2002 through 2007.

    (d) CONFORMING AMENDMENT- Section 171(a)(1) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7301(a)(1)) is amended by striking ‘2002’ the first place appears and inserting ‘2001’.

SEC. 1603. PAYMENT LIMITATIONS.

    (a) LIMITATION ON AMOUNTS RECEIVED- Section 1001 of the Food Security Act of 1985 (7 U.S.C. 1308) is amended by striking the section heading, ‘SEC. 1001.’, and all that follows through the end of paragraph (4) and inserting the following:

‘SEC. 1001. PAYMENT LIMITATIONS.

    ‘(a) DEFINITIONS- In this section:

      ‘(1) COVERED COMMODITY- The term ‘covered commodity’ has the meaning given that term in section 1001 of the Farm Security and Rural Investment Act of 2002.

      ‘(2) LOAN COMMODITY- The term ‘loan commodity’ has the meaning given that term in section 1001 of the Farm Security and Rural Investment Act of 2002, except that the term does not include wool, mohair, or honey.

      ‘(3) SECRETARY- The term ‘Secretary’ means the Secretary of Agriculture.

    ‘(b) LIMITATION ON DIRECT PAYMENTS-

      ‘(1) COVERED COMMODITIES- The total amount of direct payments made to a person during any crop year under subtitle A of title I of the Farm Security and Rural Investment Act of 2002 for 1 or more covered commodities may not exceed $40,000.

      ‘(2) PEANUTS- The total amount of direct payments made to a person during any crop year under subtitle C of title I of the Farm Security and Rural Investment Act of 2002 may not exceed $40,000.

    ‘(c) LIMITATION ON COUNTER-CYCLICAL PAYMENTS-

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

      ‘(2) PEANUTS- The total amount of counter-cyclical payments made to a person during any crop year under subtitle C of title I of the Farm Security and Rural Investment Act of 2002 may not exceed $65,000.

    ‘(d) LIMITATION ON MARKETING LOAN GAINS AND LOAN DEFICIENCY PAYMENTS-

      ‘(1) LOAN COMMODITIES- The total amount of the following gains and payments that a person may receive during any crop year may not exceed $75,000:

        ‘(A) Any gain realized by a producer from repaying a marketing assistance loan for 1 or more loan commodities under subtitle B of title I of the Farm Security and Rural Investment Act of 2002 at a lower level than the original loan rate established for the loan commodity under that subtitle.

        ‘(B) Any loan deficiency payments received for 1 or more loan commodities under that subtitle.

      ‘(2) OTHER COMMODITIES- The total amount of the following gains and payments that a person may receive during any crop year may not exceed $75,000:

        ‘(A) Any gain realized by a producer from repaying a marketing assistance loan for peanuts, wool, mohair, or honey under subtitle B or C of title I of the Farm Security and Rural Investment Act of 2002 at a lower level than the original loan rate established for the commodity under those subtitles.

        ‘(B) Any loan deficiency payments received for peanuts, wool, mohair, and honey under those subtitles.’.

    (b) CLERICAL AND CONFORMING AMENDMENTS TO SECTION 1001- Section 1001 of the Food Security Act of 1985 (7 U.S.C. 1308) is amended--

      (1) in paragraph (5)--

        (A) by striking ‘(5)’ and inserting ‘(e) DEFINITION OF PERSON- ’

        (B) by redesignating subparagraphs (A) through (E) as paragraphs (1) through (5), respectively;

        (C) in paragraph (1), as so redesignated--

          (i) by redesignating clauses (i) and (ii) as subparagraphs (A) and (B), respectively; and

          (ii) by striking the second sentence; and

        (D) in paragraph (2), as so redesignated--

          (i) by redesignating clause (i) as subparagraph (A) and, in such subparagraph (as so redesignated)--

            (I) by striking ‘subparagraph (A), subject to clause (ii)’ and inserting ‘paragraph (1), subject to subparagraph (B)’; and

            (II) by redesignating subclauses (I), (II), and (III), as clauses (i), (ii), and (iii), respectively;

          (ii) by redesignating clause (ii) as subparagraph (B) and, in such subparagraph (as so redesignated), by redesignating subclauses (I), (II), and (III), as clauses (i), (ii), and (iii), respectively; and

          (iii) by redesignating clause (iii) as subparagraph (C) and, in such subparagraph (as so redesignated)--

            (I) by striking ‘as described in paragraphs (1) and (2)’ and inserting ‘as described in subsections (b), (c), and (d)’; and

            (II) by redesignating subclauses (I) and (II) as clauses (i) and (ii), respectively;

      (2) in paragraph (6), by striking ‘(6)’ and inserting ‘(f) PUBLIC SCHOOLS- ’; and

      (3) in paragraph (7), by striking ‘(7)’ and inserting ‘(g) TIME LIMITS; RELIANCE- ’.

    (c) CONFORMING AMENDMENTS TO OTHER LAWS-

      (1) Section 1001A of the Food Security Act of 1985 (7 U.S.C. 1308-1) is amended--

        (A) in subsections (a)(1) and (b)(2)(B), by striking ‘section 1001(5)(B)(i)(II)’ and inserting ‘section 1001(e)(2)(A)(ii)’; and

        (B) in subsections (a)(1) and (b)(1), by striking ‘section 1001(5)(B)(i)’ and inserting ‘section 1001(e)(2)(A)’; and

      (2) Section 1001B of the Food Security Act of 1985 (7 U.S.C. 1308-2) is amended by striking ‘as described in paragraphs (1) and (2)’ and inserting ‘as described in subsections (b), (c), and (d)’.

      (3) Section 1001C(a) of the Food Security Act of 1985 (7 U.S.C. 1308-3(a)) is amended by inserting ‘title I of the Farm Security and Rural Investment Act of 2002,’ after ‘made available under’.

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

SEC. 1604. ADJUSTED GROSS INCOME LIMITATION.

    The Food Security Act of 1985 is amended--

      (1) by redesignating section 1001D (7 U.S.C. 1308-4) and section 1001E (7 U.S.C. 1308-5) as sections 1001E and 1001F, respectively; and

      (2) by inserting after section 1001C (7 U.S.C. 1308-3) the following:

‘SEC. 1001D. ADJUSTED GROSS INCOME LIMITATION.

    ‘(a) DEFINITION OF AVERAGE ADJUSTED GROSS INCOME-

      ‘(1) IN GENERAL- In this section, the term ‘average adjusted gross income’, with respect to an individual or entity (for purposes of this section, as defined in section 1001(e)(2)(A)(ii)), means the 3-year average of the adjusted gross income or comparable measure of the individual or entity over the 3 preceding tax years, as determined by the Secretary.

      ‘(2) SPECIAL RULES FOR CERTAIN INDIVIDUALS AND ENTITIES- In the case of an entity that is not required to file a Federal income tax return or an individual or entity that did not have taxable income in 1 or more of the tax years used to determine the average under paragraph (1), the Secretary shall provide, by regulation, a method for determining the average adjusted gross income of the individual or entity for purposes of this section.

    ‘(b) LIMITATION-

      ‘(1) IN GENERAL- Notwithstanding any other provision of law, an individual or entity shall not be eligible to receive any benefit described in paragraph (2) during a crop year if the average adjusted gross income of the individual or entity exceeds $2,500,000, unless not less than 75 percent of the average adjusted gross income of the individual or entity is derived from farming, ranching, or forestry operations, as determined by the Secretary.

      ‘(2) COVERED BENEFITS- Paragraph (1) applies with respect to the following:

        ‘(A) A direct payment or counter-cyclical payment under subtitle A or C of title I of the Farm Security and Rural Investment Act of 2002.

        ‘(B) A marketing loan gain or payment described in section 1001(d) of this Act.

        ‘(C) A payment under any program under title XII of this Act or title II of the Farm Security and Rural Investment Act of 2002.

    ‘(c) CERTIFICATION- To comply with the limitation under subsection (b), an individual or entity shall provide to the Secretary--

      ‘(1) a certification by a certified public accountant or another third party that is acceptable to the Secretary that the average adjusted gross income of the individual or entity does not exceed the limitation specified in that subsection; or

      ‘(2) information and documentation regarding the adjusted gross income of the individual or entity through other procedures established by the Secretary.

    ‘(d) COMMENSURATE REDUCTION- In the case of a benefit described in subsection (b)(2) made in a crop year to an entity, general partnership, or joint venture, the amount of the benefit shall be reduced by an amount that is commensurate with the direct and indirect ownership interest in the entity, general partnership, or joint venture of each individual who has an average adjusted gross income in excess of the limitation specified in subsection (b) for the average of the 3 preceding crop years.

    ‘(e) EFFECTIVE PERIOD- This section shall apply only during the 2003 through 2007 crop years.’.

SEC. 1605. COMMISSION ON APPLICATION OF PAYMENT LIMITATIONS.

    (a) ESTABLISHMENT- There is established a commission to be known as the ‘Commission on the Application of Payment Limitations for Agriculture’ (referred to in this section as the ‘Commission’).

    (b) DUTIES- The Commission shall conduct a study on the potential impacts of further payment limitations on the receipt of direct payments, counter-cyclical payments, and marketing loan gains and loan deficiency payments on--

      (1) farm income;

      (2) land values;

      (3) rural communities;

      (4) agribusiness infrastructure;

      (5) planting decisions of producers affected; and

      (6) supply and prices of covered commodities, loan commodities, specialty crops (including fruits and vegetables), and other agricultural commodities.

    (c) MEMBERSHIP-

      (1) COMPOSITION- The Commission shall be composed of 10 members as follows:

        (A) 3 members appointed by the Secretary.

        (B) 3 members appointed by the Committee on Agriculture, Nutrition, and Forestry of the Senate.

        (C) 3 members appointed by the Committee on Agriculture of the House of Representatives.

        (D) The Chief Economist of the Department of Agriculture.

      (2) FEDERAL GOVERNMENT EMPLOYMENT- The membership of the Commission may include 1 or more employees of the Department of Agriculture or other Federal agencies.

      (3) DATE OF APPOINTMENTS- The appointment of a member of the Commission shall be made not later than 60 days after the date of enactment of this Act.

      (4) TERM; VACANCIES-

        (A) TERM- A member shall be appointed for the life of the Commission.

        (B) VACANCIES- A vacancy on the Commission--

          (i) shall not affect the powers of the Commission; and

          (ii) shall be filled in the same manner as the original appointment was made.

      (5) INITIAL MEETING- Not later than 30 days after the date on which all members of the Commission have been appointed, the Commission shall hold the initial meeting of the Commission.

    (d) QUORUM- A majority of the members of the Commission shall constitute a quorum for the transaction of business, but a lesser number of members may hold hearings.

    (e) CHAIRPERSON- The Secretary shall appoint 1 of the members of the Commission to serve as Chairperson of the Commission.

    (f) REPORT- Not later than 1 year after the date of enactment of this Act, the Commission shall submit to the President, the Committee on Agriculture of the House of Representatives, and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report containing the results of the study required by subsection (b), including such recommendations as the Commission considers appropriate.

    (g) HEARINGS- The Commission may hold such hearings, meet and act at such times and places, take such testimony, and receive such evidence as the Commission considers advisable to carry out this section.

    (h) INFORMATION FROM FEDERAL AGENCIES- The Commission may secure directly from a Federal agency such information as the Commission considers necessary to carry out this section. On request of the Chairperson of the Commission, the head of the agency shall provide the information to the Commission.

    (i) POSTAL SERVICES- The Commission may use the United States mails in the same manner and under the same conditions as other agencies of the Federal Government.

    (j) ASSISTANCE FROM SECRETARY- The Secretary may provide to the Commission appropriate office space and such reasonable administrative and support services as the Commission may request.

    (k) COMPENSATION OF MEMBERS-

      (1) NON-FEDERAL EMPLOYEES- A member of the Commission who is not an officer or employee of the Federal Government shall be compensated at a rate equal to the daily equivalent of the annual rate of basic pay prescribed for level IV of the Executive Schedule under section 5315 of title 5, United States Code, for each day (including travel time) during which the member is engaged in the performance of the duties of the Commission.

      (2) FEDERAL EMPLOYEES- A member of the Commission who is an officer or employee of the Federal Government shall serve without compensation in addition to the compensation received for the services of the member as an officer or employee of the Federal Government.

      (3) TRAVEL EXPENSES- A member of the Commission shall be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for an employee of an agency under subchapter I of chapter 57 of title 5, United States Code, while away from the home or regular place of business of the member in the performance of the duties of the Commission.

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

SEC. 1606. ADJUSTMENTS OF LOANS.

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

SEC. 1607. PERSONAL LIABILITY OF PRODUCERS FOR DEFICIENCIES.

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

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

    Section 166 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7286) is amended--

      (1) in subsection (a), by striking ‘subtitle C’ and inserting ‘subtitle C of this title and subtitle B and C of title I of the Farm Security and Rural Investment Act of 2002’; and

      (2) in subsection (c)(1), by striking ‘subtitle C’ and inserting ‘subtitle C of this title and subtitle B and C of title I of the Farm Security and Rural Investment Act of 2002’.

SEC. 1609. COMMODITY CREDIT CORPORATION INVENTORY.

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

SEC. 1610. RESERVE STOCK LEVEL.

    Section 301(b)(14)(C) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1301(b)(14)(C)) is amended--

      (1) in clause (i), by striking ‘100,000,000’ and inserting ‘60,000,000’; and

      (2) in clause (ii), by striking ‘15 percent’ and inserting ‘10 percent’.

SEC. 1611. FARM RECONSTITUTIONS.

    (a) IN GENERAL- Section 316(a)(1)(A)(ii) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1314b(a)(1)(A)(ii)) is amended by adding at the end the following: ‘Notwithstanding any other provision of law, for the 2002 crop only, the Secretary shall allow special farm reconstitutions, in lieu of lease and transfer of allotments and quotas, under this section, in accordance with such conditions as are established by the Secretary.’.

    (b) STUDY-

      (1) IN GENERAL- The Secretary shall conduct a study on the effects on the limitation on producers to move quota to a farm other than the farm to which the quota was initially assigned under part I of subtitle B of title III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1311 et seq.).

      (2) REPORT- Not later than 90 days after the date of enactment of this Act, the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report on the results of the study.

SEC. 1612. ASSIGNMENT OF PAYMENTS.

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

SEC. 1613. EQUITABLE RELIEF FROM INELIGIBILITY FOR LOANS, PAYMENTS, OR OTHER BENEFITS.

    (a) DEFINITIONS- In this section:

      (1) AGRICULTURAL COMMODITY- The term ‘agricultural commodity’ means any agricultural commodity, food, feed, fiber, or livestock that is subject to a covered program.

      (2) COVERED PROGRAM-

        (A) IN GENERAL- The term ‘covered program’ means--

          (i) a program administered by the Secretary under which price or income support, or production or market loss assistance, is provided to producers of agricultural commodities; and

          (ii) a conservation program administered by the Secretary.

        (B) EXCLUSIONS- The term ‘covered program’ does not include--

          (i) an agricultural credit program carried out under the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.); or

          (ii) the crop insurance program carried out under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).

      (3) PARTICIPANT- The term ‘participant’ means a participant in a covered program.

      (4) STATE CONSERVATIONIST- The term ‘State Conservationist’ means the State Conservationist with respect to a program administered by the Natural Resources Conservation Service.

      (5) STATE DIRECTOR- The term ‘State Director’ means the State Executive Director of the Farm Service Agency with respect to a program administered by the Farm Service Agency.

    (b) EQUITABLE RELIEF- The Secretary may provide relief to any participant that is determined to be not in compliance with the requirements of a covered program, and therefore ineligible for a loan, payment, or other benefit under the covered program, if the participant--

      (1) acting in good faith, relied on the action or advice of the Secretary (including any authorized representative of the Secretary) to the detriment of the participant; or

      (2) failed to comply fully with the requirements of the covered program, but made a good faith effort to comply with the requirements.

    (c) FORMS OF RELIEF- The Secretary may authorize a participant in a covered program to--

      (1) retain loans, payments, or other benefits received under the covered program;

      (2) continue to receive loans, payments, and other benefits under the covered program;

      (3) continue to participate, in whole or in part, under any contract executed under the covered program;

      (4) in the case of a conservation program, reenroll all or part of the land covered by the program; and

      (5) receive such other equitable relief as the Secretary determines to be appropriate.

    (d) REMEDIAL ACTION- As a condition of receiving relief under this section, the Secretary may require the participant to take actions designed to remedy any failure to comply with the covered program.

    (e) EQUITABLE RELIEF BY STATE DIRECTORS AND STATE CONSERVATIONISTS-

      (1) IN GENERAL- A State Director, in the case of programs administered by the State Director, and the State Conservationist, in the case of programs administered by the State Conservationist, may grant relief to a participant in accordance with subsections (b) through (d) if--

        (A) the amount of loans, payments, and benefits for which relief will be provided to the participant under this subsection is less than $20,000;

        (B) the total amount of loans, payments, and benefits for which relief has been previously provided to the participant under this subsection is not more than $5,000; and

        (C) the total amount of loans, payments, and benefits for which relief is provided to similarly situated participants under this subsection is not more than $1,000,000, as determined by the Secretary.

      (2) CONSULTATION, APPROVAL, AND REVERSAL- The decision by a State Director or State Conservationist to grant relief under this subsection--

        (A) shall not require prior approval by the Administrator of the Farm Service Agency, the Chief of the Natural Resources Conservation Service, or any other officer or employee of the Agency or Service;

        (B) shall be made only after consultation with, and the approval of, the Office of General Counsel of the Department of Agriculture; and

        (C) is subject to reversal only by the Secretary (who may not delegate the reversal authority).

      (3) NONAPPLICABILITY- The authority of a State Director or State Conservationist under this subsection does not apply to the administration of--

        (A) payment limitations under--

          (i) sections 1001 through 1001F of the Food Security Act of 1985 (7 U.S.C. 1308 et seq.); or

          (ii) a conservation program administered by the Secretary.

        (B) highly erodible land and wetland conservation requirements under subtitle B or C of title XII of the Food Security Act of 1985 (16 U.S.C. 3811 et seq.).

      (4) OTHER AUTHORITY- The authority provided to a State Director and State Conservationist under this subsection is in addition to any other applicable authority and does not limit other authority provided by law or the Secretary.

    (f) JUDICIAL REVIEW- A discretionary decision by the Secretary, the State Director, or the State Conservationist under this section shall be final, and shall not be subject to review under chapter 7 of title 5, United States Code.

    (g) REPORTS- Not later than February 1 of each year, the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes for the previous calendar year--

      (1) the number of requests for equitable relief under subsections (b) and (e) and the disposition of the requests; and

      (2) the number of requests for equitable relief under section 278(d) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6998(d)) and the disposition of the requests.

    (h) RELATIONSHIP TO OTHER LAW- The authority provided in this section is in addition to any other authority provided in this or any other Act.

    (i) FINALITY RULE- Section 281(a) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 7001(a)) is amended--

      (1) by striking ‘Consolidated Farm Service Agency’ each place it appears and inserting ‘Farm Service Agency’;

      (2) in paragraph (1)--

        (A) by striking ‘This subsection’ and inserting the following:

        ‘(A) IN GENERAL- Except as provided in subparagraph (B), this subsection’; and

        (B) by adding at the end the following:

        ‘(B) NONAPPLICABILITY- This subsection does not apply to--

          ‘(i) a function performed under section 376 of the Consolidated Farm and Rural Development Act; or

          ‘(ii) a function performed under a conservation program administered by the Natural Resources Conservation Service.’; and

      (3) in paragraph (2), by inserting ‘, before the end of the 90-day period,’ after ‘unless the decision’.

    (j) CONFORMING AMENDMENTS-

      (1) Section 326 of the Food and Agriculture Act of 1962 (7 U.S.C. 1339a) is repealed.

      (2) Section 278(d) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6998(d)) is amended in the first sentence by striking ‘section 326 of the Food and Agriculture Act of 1962 (7 U.S.C. 1339a)’ and inserting ‘section 1613 of the Farm Security and Rural Investment Act of 2002’.

      (3) Section 1230A of the Food Security Act of 1985 (16 U.S.C. 3830a) is repealed.

SEC. 1614. TRACKING OF BENEFITS.

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

SEC. 1615. ESTIMATES OF NET FARM INCOME.

    In each issuance of projections of net farm income, the Secretary shall include (as determined by the Secretary)--

      (1) an estimate of the net farm income earned by commercial producers in the United States; and

      (2) an estimate of the net farm income attributable to commercial producers of each of the following:

        (A) Livestock.

        (B) Loan commodities.

        (C) Agricultural commodities other than loan commodities.

SEC. 1616. AVAILABILITY OF INCENTIVE PAYMENTS FOR CERTAIN PRODUCERS.

    (a) INCENTIVE PAYMENTS REQUIRED- Subject to subsection (b), the Secretary shall make available a total of $20,000,000 of funds of the Commodity Credit Corporation during the 2003 through 2005 crop years to provide incentive payments to producers of hard white wheat.

    (b) CONDITIONS ON IMPLEMENTATION- The Secretary shall implement subsection (a)--

      (1) only with regard to production that meets minimum quality criteria; and

      (2) on not more than 2,000,000 acres or the equivalent volume of production.

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

SEC. 1617. RENEWED AVAILABILITY OF MARKET LOSS ASSISTANCE AND CERTAIN EMERGENCY ASSISTANCE TO PERSONS THAT FAILED TO RECEIVE ASSISTANCE UNDER EARLIER AUTHORITIES.

    (a) AUTHORITY TO PROVIDE ASSISTANCE- The Secretary of Agriculture may use such funds of the Commodity Credit Corporation as are necessary to provide market loss assistance and other emergency assistance under a provision of law specified in subsection (c) to persons that, as determined by the Secretary)--

      (1) were eligible to receive the assistance under the provision of law; but

      (2) did not receive the assistance before October 1, 2001.

    (b) LIMITATION- The amount of assistance provided under a provision of law specified in subsection (c) and this section to a person shall not exceed the amount of assistance the person would have been eligible to receive under the provision had the claim of the producer under the provision been timely resolved.

    (c) COVERED MARKET LOSS ASSISTANCE AUTHORITIES- The following provisions of law are covered by this section:

      (1) Sections 1, 2, 3, 4, and 5 of Public Law 107-25 (115 Stat. 201).

      (2) Sections 805, 806, and 814 of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2001 (as enacted into law by Public Law 106-387; 114 Stat. 1549).

      (3) Sections 201, 202, 204(a), 204(d), 257, and 259 of the Agricultural Risk Protection Act of 2000 (Public Law 106-224; 7 U.S.C. 1421 note).

      (4) Sections 802, 803(a), 804, and 805 of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2000 (Public Law 106-78; 113 Stat. 1135).

      (5) The livestock indemnity program under the heading ‘COMMODITY CREDIT CORPORATION FUND’ in chapter 1 of title I of the 1999 Emergency Supplemental Appropriations Act (Public 106-31; 113 Stat. 59).

      (6) Section 1111(a) of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 1999 (as contained in section 101(a) of division A of Public Law 105-277; 112 Stat. 2681-44).

SEC. 1618. PRODUCER RETENTION OF ERRONEOUSLY PAID LOAN DEFICIENCY PAYMENTS AND MARKETING LOAN GAINS.

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

TITLE II--CONSERVATION

Subtitle A--Conservation Security

SEC. 2001. CONSERVATION SECURITY PROGRAM.

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

‘CHAPTER 2--CONSERVATION SECURITY AND FARMLAND PROTECTION

‘Subchapter A--Conservation Security Program

‘SEC. 1238. DEFINITIONS.

    ‘In this subchapter:

      ‘(1) BASE PAYMENT- The term ‘base payment’ means an amount that is--

        ‘(A) determined in accordance with the rate described in section 1238C(b)(1)(A); and

        ‘(B) paid to a producer under a conservation security contract in accordance with clause (i) of subparagraph (C), (D), or (E) of section 1238C(b)(1), as appropriate.

      ‘(2) BEGINNING FARMER OR RANCHER- The term ‘beginning farmer or rancher’ has the meaning given the term under section 343(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1991(a)).

      ‘(3) CONSERVATION PRACTICE- The term ‘conservation practice’ means a conservation farming practice described in section 1238A(d)(4) that--

        ‘(A) requires planning, implementation, management, and maintenance; and

        ‘(B) promotes 1 or more of the purposes described in section 1238A(a).

      ‘(4) CONSERVATION SECURITY CONTRACT- The term ‘conservation security contract’ means a contract described in section 1238A(e).

      ‘(5) CONSERVATION SECURITY PLAN- The term ‘conservation security plan’ means a plan described in section 1238A(c).

      ‘(6) CONSERVATION SECURITY PROGRAM- The term ‘conservation security program’ means the program established under section 1238A(a).

      ‘(7) ENHANCED PAYMENT- The term ‘enhanced payment’ means the amount paid to a producer under a conservation security contract that is equal to the amount described in section 1238C(b)(1)(C)(iii).

      ‘(8) NONDEGRADATION STANDARD- The term ‘nondegradation standard’ means the level of measures required to adequately protect, and prevent degradation of, 1 or more natural resources, as determined by the Secretary in accordance with the quality criteria described in handbooks of the Natural Resources Conservation Service.

      ‘(9) PRODUCER-

        ‘(A) IN GENERAL- The term ‘producer’ means an owner, operator, landlord, tenant, or sharecropper that--

          ‘(i) shares in the risk of producing any crop or livestock; and

          ‘(ii) is entitled to share in the crop or livestock available for marketing from a farm (or would have shared had the crop or livestock been produced).

        ‘(B) HYBRID SEED GROWERS- In determining whether a grower of hybrid seed is a producer, the Secretary shall not take into consideration the existence of a hybrid seed contract.

      ‘(10) RESOURCE-CONSERVING CROP ROTATION- The term ‘resource-conserving crop rotation’ means a crop rotation that--

        ‘(A) includes at least 1 resource-conserving crop (as defined by the Secretary);

        ‘(B) reduces erosion;

        ‘(C) improves soil fertility and tilth;

        ‘(D) interrupts pest cycles; and

        ‘(E) in applicable areas, reduces depletion of soil moisture (or otherwise reduces the need for irrigation).

      ‘(11) RESOURCE MANAGEMENT SYSTEM- The term ‘resource management system’ means a system of conservation practices and management relating to land or water use that is designed to prevent resource degradation and permit sustained use of land, water, and other natural resources, as defined in accordance with the technical guide of the Natural Resources Conservation Service.

      ‘(12) SECRETARY- The term ‘Secretary’ means the Secretary of Agriculture, acting through the Chief of the Natural Resources Conservation Service.

      ‘(13) TIER I CONSERVATION SECURITY CONTRACT- The term ‘Tier I conservation security contract’ means a contract described in section 1238A(d)(5)(A).

      ‘(14) TIER II CONSERVATION SECURITY CONTRACT- The term ‘Tier II conservation security contract’ means a contract described in section 1238A(d)(5)(B).

      ‘(15) TIER III CONSERVATION SECURITY CONTRACT- The term ‘Tier III conservation security contract’ means a contract described in section 1238A(d)(5)(C).

‘SEC. 1238A. CONSERVATION SECURITY PROGRAM.

    ‘(a) IN GENERAL- The Secretary shall establish and, for each of fiscal years 2003 through 2007, carry out a conservation security program to assist producers of agricultural operations in promoting, as is applicable with respect to land to be enrolled in the program, conservation and improvement of the quality of soil, water, air, energy, plant and animal life, and any other conservation purposes, as determined by the Secretary.

    ‘(b) ELIGIBILITY-

      ‘(1) ELIGIBLE PRODUCERS- To be eligible to participate in the conservation security program (other than to receive technical assistance under section 1238C(g) for the development of conservation security contracts), a producer shall--

        ‘(A) develop and submit to the Secretary, and obtain the approval of the Secretary of, a conservation security plan that meets the requirements of subsection (c)(1); and

        ‘(B) enter into a conservation security contract with the Secretary to carry out the conservation security plan.

      ‘(2) ELIGIBLE LAND- Except as provided in paragraph (3), private agricultural land (including cropland, grassland, prairie land, improved pasture land, and rangeland), land under the jurisdiction of an Indian tribe (as defined by the Secretary), and forested land that is an incidental part of an agricultural operation shall be eligible for enrollment in the conservation security program.

      ‘(3) EXCLUSIONS-

        ‘(A) CONSERVATION RESERVE PROGRAM- Land enrolled in the conservation reserve program under subchapter B of chapter 1 shall not be eligible for enrollment in the conservation security program.

        ‘(B) WETLANDS RESERVE PROGRAM- Land enrolled in the wetlands reserve program established under subchapter C of chapter 1 shall not be eligible for enrollment in the conservation security program.

        ‘(C) GRASSLAND RESERVE PROGRAM- Land enrolled in the grassland reserve program established under subchapter C of chapter 2 shall not be eligible for enrollment in the conservation security program.

        ‘(D) CONVERSION TO CROPLAND- Land that is used for crop production after the date of enactment of this subchapter that had not been planted, considered to be planted, or devoted to crop production for at least 4 of the 6 years preceding that date (except for land enrolled in the conservation reserve program under subchapter B of chapter 1) or that has been maintained using long-term crop rotation practices, as determined by the Secretary, shall not be the basis for any payment under the conservation security program.

      ‘(4) ECONOMIC USES- The Secretary shall permit a producer to implement, with respect to all eligible land covered by a conservation security plan, economic uses that--

        ‘(A) maintain the agricultural nature of the land; and

        ‘(B) are consistent with the natural resource and conservation objectives of the conservation security program.

    ‘(c) CONSERVATION SECURITY PLANS-

      ‘(1) IN GENERAL- A conservation security plan shall--

        ‘(A) identify the designated land and resources to be conserved under the conservation security plan;

        ‘(B) describe the tier of conservation security contract, and the particular conservation practices to be implemented, maintained, or improved, in accordance with subsection (d) on the land covered by the conservation security contract for the specified term; and

        ‘(C) contain a schedule for the implementation, maintenance, or improvement of the conservation practices described in the conservation security plan during the term of the conservation security contract.

      ‘(2) RESOURCE PLANNING- The Secretary may assist producers that enter into conservation security contracts in developing a comprehensive, long-term strategy for improving and maintaining all natural resources of the agricultural operation of the producer.

    ‘(d) CONSERVATION CONTRACTS AND PRACTICES-

      ‘(1) IN GENERAL-

        ‘(A) ESTABLISHMENT OF TIERS- The Secretary shall establish, and offer to eligible producers, 3 tiers of conservation contracts under which a payment under this subchapter may be received.

        ‘(B) ELIGIBLE CONSERVATION PRACTICES-

          ‘(i) IN GENERAL- The Secretary shall make eligible for payment under a conservation security contract land management, vegetative, and structural practices.

          ‘(ii) DETERMINATION- In determining the eligibility of a practice described in clause (i), the Secretary shall require, to the maximum extent practicable, that the lowest cost alternatives be used to fulfill the purposes of the conservation security plan, as determined by the Secretary.

      ‘(2) ON-FARM RESEARCH AND DEMONSTRATION OR PILOT TESTING- With respect to land enrolled in the conservation security program, the Secretary may approve a conservation security plan that includes--

        ‘(A) on-farm conservation research and demonstration activities; and

        ‘(B) pilot testing of new technologies or innovative conservation practices.

      ‘(3) USE OF HANDBOOK AND GUIDES; STATE AND LOCAL CONSERVATION CONCERNS-

        ‘(A) USE OF HANDBOOK AND GUIDES- In determining eligible conservation practices and the criteria for implementing or maintaining the conservation practices under the conservation security program, the Secretary shall use the National Handbook of Conservation Practices of the Natural Resources Conservation Service.

        ‘(B) STATE AND LOCAL CONSERVATION PRIORITIES- The conservation priorities of a State or locality in which an agricultural operation is situated shall be determined by the State Conservationist, in consultation with--

          ‘(i) the State technical committee established under subtitle G; and

          ‘(ii) local agricultural producers and conservation working groups.

      ‘(4) CONSERVATION PRACTICES- Conservation practices that may be implemented by a producer under a conservation security contract (as appropriate for the agricultural operation of a producer) include--

        ‘(A) nutrient management;

        ‘(B) integrated pest management;

        ‘(C) water conservation (including through irrigation) and water quality management;

        ‘(D) grazing, pasture, and rangeland management;

        ‘(E) soil conservation, quality, and residue management;

        ‘(F) invasive species management;

        ‘(G) fish and wildlife habitat conservation, restoration, and management;

        ‘(H) air quality management;

        ‘(I) energy conservation measures;

        ‘(J) biological resource conservation and regeneration;

        ‘(K) contour farming;

        ‘(L) strip cropping;

        ‘(M) cover cropping;

        ‘(N) controlled rotational grazing;

        ‘(O) resource-conserving crop rotation;

        ‘(P) conversion of portions of cropland from a soil-depleting use to a soil-conserving use, including production of cover crops;

        ‘(Q) partial field conservation practices;

        ‘(R) native grassland and prairie protection and restoration; and

        ‘(S) any other conservation practices that the Secretary determines to be appropriate and comparable to other conservation practices described in this paragraph.

      ‘(5) TIERS- Subject to paragraph (6), to carry out this subsection, the Secretary shall establish the following 3 tiers of conservation contracts:

        ‘(A) TIER I CONSERVATION SECURITY CONTRACTS- A conservation security plan for land enrolled under a Tier I conservation security contract shall--

          ‘(i) be for a period of 5 years; and

          ‘(ii) include conservation practices appropriate for the agricultural operation, that, at a minimum (as determined by the Secretary)--

            ‘(I) address at least 1 significant resource of concern for the enrolled portion of the agricultural operation at a level that meets the appropriate nondegradation standard; and

            ‘(II) cover active management of conservation practices that are implemented or maintained under the conservation security contract.

        ‘(B) TIER II CONSERVATION SECURITY CONTRACTS- A conservation security plan for land enrolled under a Tier II conservation security contract shall--

          ‘(i) be for a period of not less than 5 nor more than 10 years, as determined by the producer;

          ‘(ii) include conservation practices appropriate for the agricultural operation, that, at a minimum--

            ‘(I) address at least 1 significant resource of concern for the entire agricultural operation, as determined by the Secretary, at a level that meets the appropriate nondegradation standard; and

            ‘(II) cover active management of conservation practices that are implemented or maintained under the conservation security contract.

        ‘(C) TIER III CONSERVATION SECURITY CONTRACTS- A conservation security plan for land enrolled under a Tier III conservation security contract shall--

          ‘(i) be for a period of not less than 5 nor more than 10 years, as determined by the producer; and

          ‘(ii) include conservation practices appropriate for the agricultural operation that, at a minimum--

            ‘(I) apply a resource management system that meets the appropriate nondegradation standard for all resources of concern of the entire agricultural operation, as determined by the Secretary; and

            ‘(II) cover active management of conservation practices that are implemented or maintained under the conservation security contract.

      ‘(6) MINIMUM REQUIREMENTS- The minimum requirements for each tier of conservation contracts implemented under paragraph (5) shall be determined and approved by the Secretary.

    ‘(e) CONSERVATION SECURITY CONTRACTS-

      ‘(1) IN GENERAL- On approval of a conservation security plan of a producer, the Secretary shall enter into a conservation security contract with the producer to enroll the land covered by the conservation security plan in the conservation security program.

      ‘(2) MODIFICATION-

        ‘(A) OPTIONAL MODIFICATIONS- A producer may apply to the Secretary for a modification of the conservation security contract of the producer that is consistent with the purposes of the conservation security program.

        ‘(B) OTHER MODIFICATIONS-

          ‘(i) IN GENERAL- The Secretary may, in writing, require a producer to modify a conservation security contract before the expiration of the conservation security contract if the Secretary determines that a change made to the type, size, management, or other aspect of the agricultural operation of the producer would, without the modification of the contract, significantly interfere with achieving the purposes of the conservation security program.

          ‘(ii) PARTICIPATION IN OTHER PROGRAMS- If appropriate payment reductions and other adjustments (as determined by the Secretary) are made to the conservation security contract of a producer, the producer may--

            ‘(I) simultaneously participate in--

‘(aa) the conservation security program;

‘(bb) the conservation reserve program under subchapter B of chapter 1; and

‘(cc) the wetlands reserve program under subchapter C of chapter 1; and

            ‘(II) may remove land enrolled in the conservation security program for enrollment in a program described in item (bb) or (cc) of subclause (I).

      ‘(3) TERMINATION-

        ‘(A) OPTIONAL TERMINATION- A producer may terminate a conservation security contract and retain payments received under the conservation security contract, if--

          ‘(i) the producer is in full compliance with the terms and conditions (including any maintenance requirements) of the conservation security contract as of the date of the termination; and

          ‘(ii) the Secretary determines that termination of the contract would not defeat the purposes of the conservation security plan of the producer.

        ‘(B) OTHER TERMINATION- A producer that is required to modify a conservation security contract under paragraph (2)(B)(i) may, in lieu of modifying the contract--

          ‘(i) terminate the conservation security contract; and

          ‘(ii) retain payments received under the conservation security contract, if the producer has fully complied with the terms and conditions of the conservation security contract before termination of the contract, as determined by the Secretary.

      ‘(4) RENEWAL-

        ‘(A) IN GENERAL- Except as provided in subparagraph (B), at the option of a producer, the conservation security contract of the producer may be renewed for an additional period of not less than 5 nor more than 10 years.

        ‘(B) TIER I RENEWALS- In the case of a Tier I conservation security contract of a producer, the producer may renew the contract only if the producer agrees--

          ‘(i) to apply additional conservation practices that meet the nondegradation standard on land already enrolled in the conservation security program; or

          ‘(ii) to adopt new conservation practices with respect to another portion of the agricultural operation that address resource concerns and meet the nondegradation standard under the terms of the Tier I conservation security contract.

    ‘(f) NONCOMPLIANCE DUE TO CIRCUMSTANCES BEYOND THE CONTROL OF PRODUCERS- The Secretary shall include in the conservation security contract a provision, and may permit modification of a conservation security contract under subsection (e)(1), to ensure that a producer shall not be considered in violation of a conservation security contract for failure to comply with the conservation security contract due to circumstances beyond the control of the producer, including a disaster or related condition, as determined by the Secretary.

‘SEC. 1238B. DUTIES OF PRODUCERS.

    ‘Under a conservation security contract, a producer shall agree, during the term of the conservation security contract--

      ‘(1) to implement the applicable conservation security plan approved by the Secretary;

      ‘(2) to maintain, and make available to the Secretary at such times as the Secretary may request, appropriate records showing the effective and timely implementation of the conservation security plan;

      ‘(3) not to engage in any activity that would interfere with the purposes of the conservation security program; and

      ‘(4) on the violation of a term or condition of the conservation security contract--

        ‘(A) if the Secretary determines that the violation warrants termination of the conservation security contract--

          ‘(i) to forfeit all rights to receive payments under the conservation security contract; and

          ‘(ii) to refund to the Secretary all or a portion of the payments received by the producer under the conservation security contract, including any advance payments and interest on the payments, as determined by the Secretary; or

        ‘(B) if the Secretary determines that the violation does not warrant termination of the conservation security contract, to refund to the Secretary, or accept adjustments to, the payments provided to the producer, as the Secretary determines to be appropriate.

‘SEC. 1238C. DUTIES OF THE SECRETARY.

    ‘(a) TIMING OF PAYMENTS- The Secretary shall make payments under a conservation security contract as soon as practicable after October 1 of each fiscal year.

    ‘(b) ANNUAL PAYMENTS-

      ‘(1) CRITERIA FOR DETERMINING AMOUNT OF PAYMENTS-

        ‘(A) BASE PAYMENT- A base payment under this paragraph shall be (as determined by the Secretary)--

          ‘(i) the average national per-acre rental rate for a specific land use during the 2001 crop year; or

          ‘(ii) another appropriate rate for the 2001 crop year that ensures regional equity.

        ‘(B) PAYMENTS- A payment for a conservation practice under this paragraph shall be determined in accordance with subparagraphs (C) through (E).

        ‘(C) TIER I CONSERVATION SECURITY CONTRACTS- The payment for a Tier I conservation security contract shall consist of the total of the following amounts:

          ‘(i) An amount equal to 5 percent of the applicable base payment for land covered by the contract.

          ‘(ii) An amount that does not exceed 75 percent (or, in the case of a beginning farmer or rancher, 90 percent) of the average county costs of practices for the 2001 crop year that are included in the conservation security contract, as determined by the Secretary, including the costs of--

            ‘(I) the adoption of new management, vegetative, and land-based structural practices;

            ‘(II) the maintenance of existing land management and vegetative practices; and

            ‘(III) the maintenance of existing land-based structural practices that are approved by the Secretary but not already covered by a Federal or State maintenance requirement.

          ‘(iii) An enhanced payment that is determined by the Secretary in a manner that ensures equity across regions of the United States, if the producer--

            ‘(I) implements or maintains multiple conservation practices that exceed minimum requirements for the applicable tier of participation (including practices that involve a change in land use, such as resource-conserving crop rotation, managed rotational grazing, or conservation buffer practices);

            ‘(II) addresses local conservation priorities in addition to resources of concern for the agricultural operation;

            ‘(III) participates in an on-farm conservation research, demonstration, or pilot project;

            ‘(IV) participates in a watershed or regional resource conservation plan that involves at least 75 percent of producers in a targeted area; or

            ‘(V) carries out assessment and evaluation activities relating to practices included in a conservation security plan.

        ‘(D) TIER II CONSERVATION SECURITY CONTRACTS- The payment for a Tier II conservation security contract shall consist of the total of the following amounts:

          ‘(i) An amount equal to 10 percent of the applicable base payment for land covered by the conservation security contract.

          ‘(ii) An amount that does not exceed 75 percent (or, in the case of a beginning farmer or rancher, 90 percent) of the average county cost of adopting or maintaining practices for the 2001 crop year that are included in the conservation security contract, as described in subparagraph (C)(ii).

          ‘(iii) An enhanced payment that is determined in accordance with subparagraph (C)(iii).

        ‘(E) TIER III CONSERVATION SECURITY CONTRACTS- The payment for a Tier III conservation security contract shall consist of the total of the following amounts:

          ‘(i) An amount equal to 15 percent of the base payment for land covered by the conservation security contract.

          ‘(ii) An amount that does not exceed 75 percent (or, in the case of a beginning farmer or rancher, 90 percent) of the average county cost of adopting or maintaining practices for the 2001 crop year that are included in the conservation security contract, as described in subparagraph (C)(ii).

          ‘(iii) An enhanced payment that is determined in accordance with subparagraph (C)(iii).

      ‘(2) LIMITATION ON PAYMENTS-

        ‘(A) IN GENERAL- Subject to paragraphs (1) and (3), the Secretary shall make an annual payment, directly or indirectly, to an individual or entity covered by a conservation security contract in an amount not to exceed--

          ‘(i) in the case of a Tier I conservation security contract, $20,000;

          ‘(ii) in the case of a Tier II conservation security contract, $35,000; or

          ‘(iii) in the case of a Tier III conservation security contract, $45,000.

        ‘(B) LIMITATION ON BASE PAYMENTS- In applying the payment limitation under each of clauses (i), (ii), and (iii) of subparagraph (A), an individual or entity may not receive, directly or indirectly, payments described in clause (i) of paragraph (1)(C), (1)(D), or (1)(E), as appropriate, in an amount that exceeds--

          ‘(i) in the case of Tier I contracts, 25 percent of the applicable payment limitation; or

          ‘(ii) in the case of Tier II contracts and Tier III contracts, 30 percent of the applicable payment limitation.

        ‘(C) OTHER USDA PAYMENTS- A producer shall not receive payments under the conservation security program and any other conservation program administered by the Secretary for the same practices on the same land.

        ‘(D) COMMENSURATE SHARE- To be eligible to receive a payment under this subchapter, an individual or entity shall make contributions (including contributions of land, labor, management, equipment, or capital) to the operation of the farm that are at least commensurate with the share of the proceeds of the operation of the individual or entity.

      ‘(3) EQUIPMENT OR FACILITIES- A payment to a producer under this subchapter shall not be provided for--

        ‘(A) construction or maintenance of animal waste storage or treatment facilities or associated waste transport or transfer devices for animal feeding operations; or

        ‘(B) the purchase or maintenance of equipment or a non-land based structure that is not integral to a land-based practice, as determined by the Secretary.

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

    ‘(d) REGULATIONS- The Secretary shall promulgate regulations that--

      ‘(1) provide for adequate safeguards to protect the interests of tenants and sharecroppers, including provision for sharing payments, on a fair and equitable basis; and

      ‘(2) prescribe such other rules as the Secretary determines to be necessary to ensure a fair and reasonable application of the limitations established under subsection (b).

    ‘(e) TRANSFER OR CHANGE OF INTEREST IN LAND SUBJECT TO CONSERVATION SECURITY CONTRACT-

      ‘(1) IN GENERAL- Except as provided in paragraph (2), the transfer, or change in the interest, of a producer in land subject to a conservation security contract shall result in the termination of the conservation security contract.

      ‘(2) TRANSFER OF DUTIES AND RIGHTS- Paragraph (1) shall not apply if, not later than 60 days after the date of the transfer or change in the interest in land, the transferee of the land provides written notice to the Secretary that all duties and rights under the conservation security contract have been transferred to, and assumed by, the transferee.

    ‘(f) ENROLLMENT PROCEDURE- In entering into conservation security contracts with producers under this subchapter, the Secretary shall not use competitive bidding or any similar procedure.

    ‘(g) TECHNICAL ASSISTANCE- For each of fiscal years 2003 through 2007, the Secretary shall provide technical assistance to producers for the development and implementation of conservation security contracts, in an amount not to exceed 15 percent of amounts expended for the fiscal year.’.

    (b) REGULATIONS- Not later than 270 days after the date of enactment of this Act, the Secretary of Agriculture shall promulgate regulations implementing the amendment made by subsection (a).

SEC. 2002. CONSERVATION COMPLIANCE.

    (a) HIGHLY ERODIBLE LAND- Section 1211 of the Food Security Act of 1985 (16 U.S.C. 3811) is amended--

      (1) by striking the section heading and all that follows through ‘Except as provided in’ and inserting the following:

‘SEC. 1211. PROGRAM INELIGIBILITY.

    ‘(a) IN GENERAL- Except as provided in’; and

      (2) by adding at the end the following:

    ‘(b) HIGHLY ERODIBLE LAND- The Secretary shall have, and shall not delegate to any private person or entity, authority to determine whether a person has complied with this subtitle.’.

    (b) WETLAND- Section 1221 of the Food Security Act of 1985 (16 U.S.C. 3821) is amended by adding at the end the following:

    ‘(e) WETLAND- The Secretary shall have, and shall not delegate to any private person or entity, authority to determine whether a person has complied with this subtitle.’.

SEC. 2003. PARTNERSHIPS AND COOPERATION.

    Section 1243 of the Food Security Act of 1985 (16 U.S.C. 3843) is amended by adding at the end the following:

    ‘(f) PARTNERSHIPS AND COOPERATION-

      ‘(1) IN GENERAL- In carrying out any program under subtitle D, the Secretary may use resources provided under that subtitle to enter into stewardship agreements with State and local agencies, Indian tribes, and nongovernmental organizations and to designate special projects, as recommended by the State Conservationist, after consultation with the State technical committee, to enhance technical and financial assistance provided to owners, operators, and producers to address natural resource issues related to agricultural production.

      ‘(2) CRITERIA FOR SPECIAL PROJECTS- The purposes of special projects carried out under this subsection shall be to encourage--

        ‘(A) producers to cooperate in the installation and maintenance of conservation practices that affect multiple agricultural operations;

        ‘(B) the sharing of information and technical and financial resources among producers;

        ‘(C) cumulative conservation benefits in geographic areas; and

        ‘(D) the development and demonstration of innovative conservation methods.

      ‘(3) INCENTIVES- To realize the purposes of the special projects under paragraph (1), the Secretary may provide special incentives to owners, operators, and producers participating in the special projects to encourage partnerships and enrollments of optimal conservation value.

      ‘(4) FLEXIBILITY-

        ‘(A) IN GENERAL- The Secretary may enter into stewardship agreements with States (including State agencies and units of local government), Indian tribes, and nongovernmental organizations that have a history of working with agricultural producers to allow greater flexibility to adjust the application of eligibility criteria, approved practices, innovative conservation practices, and other elements of the programs under this title to better reflect unique local circumstances and purposes in a manner that is consistent with--

          ‘(i) conservation enhancement and long-term productivity of the natural resource base; and

          ‘(ii) the purposes and requirements of this title.

        ‘(B) PLAN- Each party to a stewardship agreement under subparagraph (A) shall submit to the Secretary, for approval by the Secretary, a special project area plan for each program to be carried out by the party that includes--

          ‘(i) a description of the requested resources and adjustments to program implementation (including a description of how those adjustments will accelerate the achievement of conservation benefits);

          ‘(ii) an analysis of the contribution those adjustments will make to the effectiveness of programs in achieving the purposes of the special project;

          ‘(iii) a timetable for reevaluating the need for or performance of the proposed adjustments;

          ‘(iv) a description of non-Federal programs and resources that will contribute to achieving the purposes of the special project; and

          ‘(v) a plan for the evaluation of progress toward the purposes of the special project.

      ‘(5) FUNDING-

        ‘(A) IN GENERAL- In addition to resources from programs under subtitle D, subject to subparagraph (B), the Secretary shall use not more than 5 percent of the funds made available for each fiscal year under section 1241(a) to carry out activities that are authorized under conservation programs under subtitle D.

        ‘(B) UNUSED FUNDING- Any funds made available for a fiscal year under subparagraph (A) that are not obligated by April 1 of the fiscal year may be used to carry out other activities under conservation programs under subtitle D during the fiscal year in which the funding becomes available.’.

SEC. 2004. ADMINISTRATIVE REQUIREMENTS FOR CONSERVATION PROGRAMS.

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

‘SEC. 1244. ADMINISTRATIVE REQUIREMENTS FOR CONSERVATION PROGRAMS.

    ‘(a) BEGINNING FARMERS AND RANCHERS AND INDIAN TRIBES- In carrying out any conservation program administered by the Secretary, the Secretary may provide to beginning farmers and ranchers and Indian tribes (as those terms are defined in section 1238) and limited resource agricultural producers incentives to participate in the conservation program to--

      ‘(1) foster new farming and ranching opportunities; and

      ‘(2) enhance environmental stewardship over the long term.

    ‘(b) PRIVACY OF PERSONAL INFORMATION RELATING TO NATURAL RESOURCES CONSERVATION PROGRAMS-

      ‘(1) INFORMATION RECEIVED FOR TECHNICAL AND FINANCIAL ASSISTANCE-

        ‘(A) IN GENERAL- In accordance with section 552(b)(3) of title 5, United States Code, except as provided in subparagraph (C) and paragraph (2), information described in subparagraph (B)--

          ‘(i) shall not be considered to be public information; and

          ‘(ii) shall not be released to any person or Federal, State, local agency or Indian tribe (as defined by the Secretary) outside the Department of Agriculture.

        ‘(B) INFORMATION- The information referred to in subparagraph (A) is information--

          ‘(i) provided to the Secretary or a contractor of the Secretary (including information provided under subtitle D) for the purpose of providing technical or financial assistance to an owner, operator, or producer with respect to any natural resources conservation program administered by the Natural Resources Conservation Service or the Farm Service Agency; and

          ‘(ii) that is proprietary (within the meaning of section 552(b)(4) of title 5, United States Code) to the agricultural operation or land that is a part of an agricultural operation of the owner, operator, or producer.

        ‘(C) EXCEPTION- Nothing in this section affects the availability of payment information (including payment amounts and the names and addresses of recipients of payments) under section 552 of title 5, United States Code.

      ‘(2) EXCEPTIONS-

        ‘(A) RELEASE AND DISCLOSURE FOR ENFORCEMENT- The Secretary may release or disclose to the Attorney General information covered by paragraph (1) to the extent necessary to enforce the natural resources conservation programs referred to in paragraph (1)(B)(i).

        ‘(B) DISCLOSURE TO COOPERATING PERSONS AND AGENCIES-

          ‘(i) IN GENERAL- The Secretary may release or disclose information covered by paragraph (1) to a person or Federal, State, local, or tribal agency working in cooperation with the Secretary in providing technical and financial assistance described in paragraph (1)(B)(i) or collecting information from data gathering sites.

          ‘(ii) USE OF INFORMATION- The person or Federal, State, local, or tribal agency that receives information described in clause (i) may release the information only for the purpose of assisting the Secretary--

            ‘(I) in providing the requested technical or financial assistance; or

            ‘(II) in collecting information from data gathering sites.

        ‘(C) STATISTICAL AND AGGREGATE INFORMATION- Information covered by paragraph (1) may be disclosed to the public if the information has been transformed into a statistical or aggregate form without naming any--

          ‘(i) individual owner, operator, or producer; or

          ‘(ii) specific data gathering site.

        ‘(D) CONSENT OF OWNER, OPERATOR, OR PRODUCER-

          ‘(i) IN GENERAL- An owner, operator, or producer may consent to the disclosure of information described in paragraph (1).

          ‘(ii) CONDITION OF OTHER PROGRAMS- The participation of the owner, operator, or producer in, and the receipt of any benefit by the owner, operator, or producer under, this title or any other program administered by the Secretary may not be conditioned on the owner, operator, or producer providing consent under this paragraph.

      ‘(3) VIOLATIONS; PENALTIES- Section 1770(c) shall apply with respect to the release of information collected in any manner or for any purpose prohibited by this subsection.

      ‘(4) DATA COLLECTION, DISCLOSURE, AND REVIEW- Nothing in this subsection--

        ‘(A) affects any procedure for data collection or disclosure through the National Resources Inventory; or

        ‘(B) limits the authority of Congress or the General Accounting Office to review information collected or disclosed under this subsection.’.

    (b) NATIONAL RESOURCES INVENTORY- Section 1770 of the Food Security Act of 1985 (7 U.S.C. 2276) is amended--

      (1) in subsection (a)--

        (A) in paragraph (1), by striking ‘or’ at the end;

        (B) in paragraph (2), by striking the period and inserting ‘; or’; and

        (C) by adding at the end the following:

      ‘(3) in the case of information collected under the authority described in subsection (d)(12), disclose the information to any person or any Federal, State, local, or tribal agency outside the Department of Agriculture, unless the information has been converted into a statistical or aggregate form that does not allow the identification of the person that supplied particular information.’; and

      (2) in subsection (d)--

        (A) in paragraph (9), by striking ‘or’ at the end;

        (B) in paragraph (11), by striking the period and inserting ‘; or’; and

        (C) by adding at the end the following:

      ‘(12) section 302 of the Rural Development Act of 1972 (7 U.S.C. 1010a) regarding the authority to collect data for the National Resources Inventory.’.

SEC. 2005. REFORM AND ASSESSMENT OF CONSERVATION PROGRAMS.

    (a) IN GENERAL- The Secretary of Agriculture shall develop a plan to coordinate land retirement and agricultural working land conservation programs that are administered by the Secretary to achieve the goals of--

      (1) eliminating redundancy;

      (2) streamlining program delivery; and

      (3) improving services provided to agricultural producers (including the reevaluation of the provision of technical assistance).

    (b) REPORT- Not later than December 31, 2005, the Secretary of Agriculture shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate, a report that describes--

      (1) the plan developed under subsection (a); and

      (2) the means by which the Secretary intends to achieve the goals described in subsection (a).

SEC. 2006. CONFORMING AMENDMENTS.

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

‘CHAPTER 1--COMPREHENSIVE CONSERVATION ENHANCEMENT PROGRAM’.

    (b) Section 1230 of the Food Security Act of 1985 (16 U.S.C. 3830) is amended--

      (1) in the section heading, by striking ‘environmental conservation acreage reserve program’ and inserting ‘comprehensive conservation enhancement program’;

      (2) in subsection (a)(1), by striking ‘an environmental conservation acreage reserve program’ and inserting ‘a comprehensive conservation enhancement program’;

      (3) by striking subsection (c); and

      (4) by striking ‘ECARP’ each place it appears and inserting ‘CCEP’.

    (c) Section 1230A of the Food Security Act of 1985 (16 U.S.C. 3830a) is repealed.

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

‘SEC. 1243. ADMINISTRATION OF CCEP.’.

Subtitle B--Conservation Reserve

SEC. 2101. CONSERVATION RESERVE PROGRAM.

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

‘Subchapter B--Conservation Reserve

‘SEC. 1231. CONSERVATION RESERVE.

    ‘(a) IN GENERAL- Through the 2007 calendar year, the Secretary shall formulate and carry out a conservation reserve program under which land is enrolled through the use of contracts to assist owners and operators of land specified in subsection (b) to conserve and improve the soil, water, and wildlife resources of such land.

    ‘(b) ELIGIBLE LAND- The Secretary may include in the program established under this subchapter--

      ‘(1) highly erodible cropland that--

        ‘(A)(i) if permitted to remain untreated could substantially reduce the agricultural production capability for future generations; or

        ‘(ii) cannot be farmed in accordance with a plan that complies with the requirements of subtitle B; and

        ‘(B) the Secretary determines had a cropping history or was considered to be planted for 4 of the 6 years preceding the date of enactment of the Farm Security and Rural Investment Act of 2002 (except for land enrolled in the conservation reserve program as of that date).

      ‘(2) marginal pasture land converted to wetland or established as wildlife habitat prior to November 28, 1990;

      ‘(3) marginal pasture land to be devoted to appropriate vegetation, including trees, in or near riparian areas, or devoted to similar water quality purposes (including marginal pastureland converted to wetland or established as wildlife habitat);

      ‘(4) cropland that is otherwise ineligible if the Secretary determines that--

        ‘(A) if permitted to remain in agricultural production, the land would--

          ‘(i) contribute to the degradation of soil, water, or air quality; or

          ‘(ii) pose an on-site or off-site environmental threat to soil, water, or air quality;

        ‘(B) the land is a--

          ‘(i) newly-created, permanent grass sod waterway; or

          ‘(ii) a contour grass sod strip established and maintained as part of an approved conservation plan;

        ‘(C) the land will be devoted to newly established living snow fences, permanent wildlife habitat, windbreaks, shelterbelts, or filterstrips devoted to trees or shrubs; or

        ‘(D) the land poses an off-farm environmental threat, or a threat of continued degradation of productivity due to soil salinity, if permitted to remain in production; and

        ‘(E) enrollment of the land would facilitate a net savings in groundwater or surface water resources of the agricultural operation of the producer;

      ‘(5) the portion of land in a field not enrolled in the conservation reserve in a case in which more than 50 percent of the land in the field is enrolled as a buffer, if--

        ‘(A) the land is enrolled as part of the buffer; and

        ‘(B) the remainder of the field is--

          ‘(i) infeasible to farm; and

          ‘(ii) enrolled at regular rental rates.

    ‘(c) PLANTING STATUS OF CERTAIN LAND- For purposes of determining the eligibility of land to be placed in the conservation reserve established under this subchapter, land shall be considered to be planted to an agricultural commodity during a crop year if--

      ‘(1) during the crop year, the land was devoted to a conserving use; or

      ‘(2)(A) during the crop year or during any of the 2 years preceding the crop year, the land was enrolled in the water bank program; and

      ‘(B) the contract of the owner or operator of the cropland expired or will expire in calendar year 2000, 2001, or 2002.

    ‘(d) MAXIMUM ENROLLMENT- The Secretary may maintain up to 39,200,000 acres in the conservation reserve at any 1 time during the 2002 through 2007 calendar years (including contracts extended by the Secretary pursuant to section 1437(c) of the Food, Agriculture, Conservation, and Trade Act of 1990 ( 16 U.S.C. 3831 note; Public Law 101-624)).

    ‘(e) DURATION OF CONTRACT-

      ‘(1) IN GENERAL- For the purpose of carrying out this subchapter, the Secretary shall enter into contracts of not less than 10, nor more than 15, years.

      ‘(2) CERTAIN LAND-

        ‘(A) IN GENERAL- In the case of land devoted to hardwood trees, shelterbelts, windbreaks, or wildlife corridors under a contract entered into under this subchapter after October 1, 1990, and land devoted to such uses under contracts modified under section 1235A, the owner or operator of the land may, within the limitations prescribed under this section, specify the duration of the contract.

        ‘(B) HARDWOOD TREES- In the case of land that is devoted to hardwood trees under a contract entered into under this subchapter prior to October 1, 1990, the Secretary may extend the contract for a term of not to exceed 5 years, as agreed to by the owner or operator of such land and the Secretary.

      ‘(3) 1-YEAR EXTENSION- In the case of a contract described in paragraph (1) the term of which expires during calendar year 2002, an owner or operator of land enrolled under the contract may extend the contract for 1 additional year.

    ‘(f) CONSERVATION PRIORITY AREAS-

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

      ‘(2) ELIGIBLE WATERSHEDS- Watersheds eligible for designation under this subsection shall include areas with actual and significant adverse water quality or habitat impacts related to agricultural production activities.

      ‘(3) EXPIRATION- Conservation priority area designation under this subsection shall expire after 5 years, subject to redesignation, except that the Secretary may withdraw a watershed’s designation--

        ‘(A) on application by the appropriate State agency; or

        ‘(B) in the case of an area covered by this subsection, if the Secretary finds that the area no longer contains actual and significant adverse water quality or habitat impacts related to agricultural production activities.

      ‘(4) DUTY OF SECRETARY- In carrying out this subsection, the Secretary shall attempt to maximize water quality and habitat benefits in the watersheds described in paragraph (1) by promoting a significant level of enrollment of land within the watersheds in the program under this subchapter by whatever means the Secretary determines are appropriate and consistent with the purposes of this subchapter.

    ‘(g) MULTI-YEAR GRASSES AND LEGUMES- For purposes of this subchapter, alfalfa and other multi-year grasses and legumes in a rotation practice, approved by the Secretary, shall be considered agricultural commodities.

    ‘(h) PILOT PROGRAM FOR ENROLLMENT OF WETLAND AND BUFFER ACREAGE IN CONSERVATION RESERVE-

      ‘(1) PROGRAM-

        ‘(A) IN GENERAL- During the 2002 through 2007 calendar years, the Secretary shall carry out a program in each State under which the Secretary shall include eligible acreage described in paragraph (2) in the program established under this subchapter.

        ‘(B) PARTICIPATION AMONG STATES.-The Secretary shall ensure, to the maximum extent practicable, that owners and operators in each State have an equitable opportunity to participate in the pilot program established under this subsection.

      ‘(2) ELIGIBLE ACREAGE-

        ‘(A) IN GENERAL- Subject to subparagraphs (B) through (D), an owner or operator may enroll in the conservation reserve under this subsection--

          ‘(i) a wetland (including a converted wetland described in section 1222(b)(1)(A)) that was cropped during at least 3 of the immediately preceding 10 crop years; and

          ‘(ii) buffer acreage that--

            ‘(I) is contiguous to the wetland described in clause (i);

            ‘(II) is used to protect the wetland; and

            ‘(III) is of such width as the Secretary determines is necessary to protect the wetland, taking into consideration and accommodating the farming practices (including the straightening of boundaries to accommodate machinery) used with respect to the cropland that surrounds the wetland.

        ‘(B) EXCLUSIONS- An owner or operator may not enroll in the conservation reserve under this subsection--

          ‘(i) any wetland, or land on a floodplain, that is, or is adjacent to, a perennial riverine system wetland identified on the final national wetland inventory map of the Secretary of the Interior; or

          ‘(ii) in the case of an area that is not covered by the final national inventory map, any wetland, or land on a floodplain, that is adjacent to a perennial stream identified on a 1-24,000 scale map of the United States Geological Survey.

        ‘(C) PROGRAM LIMITATIONS-

          ‘(i) IN GENERAL- The Secretary may enroll in the conservation reserve under this subsection not more than--

            ‘(I) 100,000 acres in any 1 State referred to in paragraph (1); and

            ‘(II) not more than a total of 1,000,000 acres.

          ‘(ii) RELATIONSHIP TO PROGRAM MAXIMUM- Subject to clause (iii), for the purposes of subsection (d), any acreage enrolled in the conservation reserve under this subsection shall be considered acres maintained in the conservation reserve.

          ‘(iii) RELATIONSHIP TO OTHER ENROLLED ACREAGE- Acreage enrolled under this subsection shall not affect for any fiscal year the quantity of--

            ‘(I) acreage enrolled to establish conservation buffers as part of the program announced on March 24, 1998 (63 Fed. Reg. 14109); or

            ‘(II) acreage enrolled into the conservation reserve enhancement program announced on May 27, 1998 (63 Fed. Reg. 28965).

          ‘(iv) REVIEW; POTENTIAL INCREASE IN ENROLLMENT ACREAGE- Not later than 3 years after the date of enactment of this clause, the Secretary shall--

            ‘(I) conduct a review of the program under this subsection with respect to each State that has enrolled land in the program; and

            ‘(II) notwithstanding clause (i)(I), increase the number of acres that may be enrolled by a State under clause (i)(I) to not more than 150,000 acres, as determined by the Secretary.

        ‘(D) OWNER OR OPERATOR LIMITATIONS-

          ‘(i) WETLAND-

            ‘(I) IN GENERAL- The maximum size of any wetland described in subparagraph (A)(i) of an owner or operator enrolled in the conservation reserve under this subsection shall be 10 contiguous acres, of which not more than 5 acres shall be eligible for payment.

            ‘(II) COVERAGE- All acres described in subclause (I) (including acres that are ineligible for payment) shall be covered by the conservation contract.

          ‘(ii) BUFFER ACREAGE- The maximum size of any buffer acreage described in subparagraph (A)(ii) of an owner or operator enrolled in the conservation reserve under this subsection shall be the greater of--

            ‘(I) 3 times the size of any wetland described in subparagraph (A)(i) to which the buffer acreage is contiguous; or

            ‘(II) 150 feet on either side of the wetland.

          ‘(iii) TRACTS- The maximum size of any eligible acreage described in subparagraph (A) in a tract (as determined by the Secretary) of an owner or operator enrolled in the conservation reserve under this subsection shall be 40 acres.

      ‘(3) DUTIES OF OWNERS AND OPERATORS- Under a contract entered into under this subsection, during the term of the contract, an owner or operator of a farm or ranch shall agree--

        ‘(A) to restore the hydrology of the wetland within the eligible acreage to the maximum extent practicable, as determined by the Secretary;

        ‘(B) to establish vegetative cover (which may include emerging vegetation in water) on the eligible acreage, as determined by the Secretary; and

        ‘(C) to carry out other duties described in section 1232.

      ‘(4) DUTIES OF THE SECRETARY-

        ‘(A) IN GENERAL- Except as provided in subparagraphs (B) and (C), in return for a contract entered into by an owner or operator under this subsection, the Secretary shall make payments and provide assistance to the owner or operator in accordance with sections 1233 and 1234.

        ‘(B) CONTINUOUS SIGNUP- The Secretary shall use continuous signup under section 1234(c)(2)(B) to determine the acceptability of contract offers and the amount of rental payments under this subsection.

        ‘(C) INCENTIVES- The amounts payable to owners and operators in the form of rental payments under contracts entered into under this subsection shall reflect incentives that are provided to owners and operators to enroll filterstrips in the conservation reserve under section 1234.

    ‘(i) ELIGIBILITY FOR CONSIDERATION- On the expiration of a contract entered into under this subchapter, the land subject to the contract shall be eligible to be considered for reenrollment in the conservation reserve.

    ‘(j) BALANCE OF NATURAL RESOURCE PURPOSES- In determining the acceptability of contract offers under this subchapter, the Secretary shall ensure, to the maximum extent practicable, an equitable balance among the conservation purposes of soil erosion, water quality, and wildlife habitat.

‘SEC. 1232. DUTIES OF OWNERS AND OPERATORS.

    ‘(a) IN GENERAL- Under the terms of a contract entered into under this subchapter, during the term of the contract, an owner or operator of a farm or ranch shall agree--

      ‘(1) to implement a plan approved by the local conservation district (or in an area not located within a conservation district, a plan approved by the Secretary) for converting eligible land normally devoted to the production of an agricultural commodity on the farm or ranch to a less intensive use (as defined by the Secretary), such as pasture, permanent grass, legumes, forbs, shrubs, or trees, substantially in accordance with a schedule outlined in the plan;

      ‘(2) to place highly erodible cropland subject to the contract in the conservation reserve established under this subchapter;

      ‘(3) not to use the land for agricultural purposes, except as permitted by the Secretary;

      ‘(4) to establish approved vegetative cover (which may include emerging vegetation in water), water cover for the enhancement of wildlife, or, where practicable, maintain existing cover on the land, except that--

        ‘(A) the water cover shall not include ponds for the purpose of watering livestock, irrigating crops, or raising fish for commercial purposes; and

        ‘(B) the Secretary shall not terminate the contract for failure to establish approved vegetative or water cover on the land if--

          ‘(i) the failure to plant the cover was due to excessive rainfall or flooding;

          ‘(ii) the land subject to the contract that could practicably be planted to the cover is planted to the cover; and

          ‘(iii) the land on which the owner or operator was unable to plant the cover is planted to the cover after the wet conditions that prevented the planting subsides;

      ‘(5) on a violation of a term or condition of the contract at any time the owner or operator has control of the land--

        ‘(A) to forfeit all rights to receive rental payments and cost sharing payments under the contract and to refund to the Secretary any rental payments and cost sharing payments received by the owner or operator under the contract, together with interest on the payments as determined by the Secretary, if the Secretary, after considering the recommendations of the soil conservation district and the Natural Resources Conservation Service, determines that the violation is of such nature as to warrant termination of the contract; or

        ‘(B) to refund to the Secretary, or accept adjustments to, the rental payments and cost sharing payments provided to the owner or operator, as the Secretary considers appropriate, if the Secretary determines that the violation does not warrant termination of the contract;

      ‘(6) on the transfer of the right and interest of the owner or operator in land subject to the contract--

        ‘(A) to forfeit all rights to rental payments and cost sharing payments under the contract; and

        ‘(B) to refund to the United States all rental payments and cost sharing payments received by the owner or operator, or accept such payment adjustments or make such refunds as the Secretary considers appropriate and consistent with the objectives of this subchapter;

      unless the transferee of the land agrees with the Secretary to assume all obligations of the contract, except that no refund of rental payments and cost sharing payments shall be required if the land is purchased by or for the United States Fish and Wildlife Service, or the transferee and the Secretary agree to modifications to the contract, in a case in which the modifications are consistent with the objectives of the program, as determined by the Secretary;

      ‘(7) not to conduct any harvesting or grazing, nor otherwise make commercial use of the forage, on land that is subject to the contract, nor adopt any similar practice specified in the contract by the Secretary as a practice that would tend to defeat the purposes of the contract, except that the Secretary may permit, consistent with the conservation of soil, water quality, and wildlife habitat (including habitat during nesting seasons for birds in the area)--

        ‘(A) managed harvesting and grazing (including the managed harvesting of biomass), except that in permitting managed harvesting and grazing, the Secretary--

          ‘(i) shall, in coordination with the State technical committee--

            ‘(I) develop appropriate vegetation management requirements; and

            ‘(II) identify periods during which harvesting and grazing under this paragraph may be conducted;

          ‘(ii) may permit harvesting and grazing or other commercial use of the forage on the land that is subject to the contract in response to a drought or other emergency; and

          ‘(iii) shall, in the case of routine managed harvesting or grazing or harvesting or grazing conducted in response to a drought or other emergency, reduce the rental payment otherwise payable under the contract by an amount commensurate with the economic value of the activity; and

        ‘(B) the installation of wind turbines, except that in permitting the installation of wind turbines, the Secretary shall determine the number and location of wind turbines that may be installed, taking into account--

          ‘(i) the location, size, and other physical characteristics of the land;

          ‘(ii) the extent to which the land contains wildlife and wildlife habitat; and

          ‘(iii) the purposes of the conservation reserve program under this subchapter;

      ‘(8) not to conduct any planting of trees on land that is subject to the contract unless the contract specifies that the harvesting and commercial sale of trees such as Christmas trees are prohibited, nor otherwise make commercial use of trees on land that is subject to the contract unless it is expressly permitted in the contract, nor adopt any similar practice specified in the contract by the Secretary as a practice that would tend to defeat the purposes of the contract, except that no contract shall prohibit activities consistent with customary forestry practice, such as pruning, thinning, or stand improvement of trees, on land converted to forestry use;

      ‘(9) not to adopt any practice specified by the Secretary in the contract as a practice that would tend to defeat the purposes of this subchapter; and

      ‘(10) to comply with such additional provisions as the Secretary determines are desirable and are included in the contract to carry out this subchapter or to facilitate the practical administration of this subchapter.

    ‘(b) CONSERVATION PLANS- The plan referred to in subsection (a)(1)--

      ‘(1) shall set forth--

        ‘(A) the conservation measures and practices to be carried out by the owner or operator during the term of the contract; and

        ‘(B) the commercial use, if any, to be permitted on the land during the term; and

      ‘(2) may provide for the permanent retirement of any existing cropland base and allotment history for the land.

    ‘(c) FORECLOSURE-

      ‘(1) IN GENERAL- Notwithstanding any other provision of law, an owner or operator who is a party to a contract entered into under this subchapter may not be required to make repayments to the Secretary of amounts received under the contract if the land that is subject to the contract has been foreclosed on and the Secretary determines that forgiving the repayments is appropriate in order to provide fair and equitable treatment.

      ‘(2) RESUMPTION OF CONTROL-

        ‘(A) IN GENERAL- This subsection shall not void the responsibilities of an owner or operator under the contract if the owner or operator resumes control over the land that is subject to the contract within the period specified in the contract.

        ‘(B) CONTRACT- On the resumption of the control over the land by the owner or operator, the provisions of the contract in effect on the date of the foreclosure shall apply.

‘SEC. 1233. DUTIES OF THE SECRETARY.

    ‘In return for a contract entered into by an owner or operator under section 1232, the Secretary shall--

      ‘(1) share the cost of carrying out the conservation measures and practices set forth in the contract for which the Secretary determines that cost sharing is appropriate and in the public interest; and

      ‘(2) for a period of years not in excess of the term of the contract, pay an annual rental payment in an amount necessary to compensate for--

        ‘(A) the conversion of highly erodible cropland normally devoted to the production of an agricultural commodity on a farm or ranch to a less intensive use; and

        ‘(B) the retirement of any cropland base and allotment history that the owner or operator agrees to retire permanently.

‘SEC. 1234. PAYMENTS.

    ‘(a) TIMING- The Secretary shall provide payment for obligations incurred by the Secretary under a contract entered into under this subchapter--

      ‘(1) with respect to any cost-sharing payment obligation incurred by the Secretary, as soon as practicable after the obligation is incurred; and

      ‘(2) with respect to any annual rental payment obligation incurred by the Secretary--

        ‘(A) as soon as practicable after October 1 of each calendar year; or

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

    ‘(b) FEDERAL PERCENTAGE OF COST SHARING PAYMENTS-

      ‘(1) IN GENERAL- In making cost sharing payments to an owner or operator under a contract entered into under this subchapter, the Secretary shall pay 50 percent of the cost of establishing water quality and conservation measures and practices required under each contract for which the Secretary determines that cost sharing is appropriate and in the public interest.

      ‘(2) LIMITATION- The Secretary shall not make any payment to an owner or operator under this subchapter to the extent that the total amount of cost sharing payments provided to the owner or operator from all sources would exceed 100 percent of the total cost of establishing measures and practices described in paragraph (1).

      ‘(3) HARDWOOD TREES, WINDBREAKS, SHELTERBELTS, AND WILDLIFE CORRIDORS-

        ‘(A) APPLICABILITY- This paragraph applies to--

          ‘(i) land devoted to the production of hardwood trees, windbreaks, shelterbelts, or wildlife corridors under a contract entered into under this subchapter after November 28, 1990; and

          ‘(ii) land converted to such production under section 1235A.

        ‘(B) PAYMENTS- In making cost share payments to an owner or operator of land described in subparagraph (A), the Secretary shall pay 50 percent of the reasonable and necessary costs, as determined by the Secretary, incurred by the owner or operator for maintaining trees or shrubs, including the cost of replanting (if the trees or shrubs were lost due to conditions beyond the control of the owner or operator), during not less than the 2-year, and not more than the 4-year, period beginning on the date of the planting of the trees or shrubs, as determined appropriate by the Secretary.

      ‘(4) HARDWOOD TREE PLANTING- The Secretary may permit owners or operators that contract to devote at least 10 acres of land to the production of hardwood trees under this subchapter to extend the planting of the trees over a 3-year period if at least 1/3 of the trees are planted in each of the first 2 years.

      ‘(5) OTHER FEDERAL COST SHARE ASSISTANCE- An owner or operator shall not be eligible to receive or retain cost share assistance under this subsection if the owner or operator receives any other Federal cost share assistance with respect to the land under any other provision of law.

    ‘(c) ANNUAL RENTAL PAYMENTS-

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

      ‘(2) METHOD OF DETERMINATION- The amounts payable to owners or operators in the form of rental payments under contracts entered into under this subchapter may be determined through--

        ‘(A) the submission of bids for such contracts by owners and operators in such manner as the Secretary may prescribe; or

        ‘(B) such other means as the Secretary determines are appropriate.

      ‘(3) ACCEPTANCE OF CONTRACT OFFERS- In determining the acceptability of contract offers, the Secretary may--

        ‘(A) take into consideration the extent to which enrollment of the land that is the subject of the contract offer would improve soil resources, water quality, wildlife habitat, or provide other environmental benefits; and

        ‘(B) establish different criteria in various States and regions of the United States based on the extent to which water quality or wildlife habitat may be improved or erosion may be abated.

      ‘(4) HARDWOOD TREE ACREAGE- In the case of acreage enrolled in the conservation reserve established under this subchapter that is to be devoted to hardwood trees, the Secretary may consider bids for contracts under this subsection on a continuous basis.

    ‘(d) CASH OR IN-KIND PAYMENTS-

      ‘(1) IN GENERAL- Except as otherwise provided in this section, payments under this subchapter--

        ‘(A) shall be made in cash or in commodities in such amount and on such time schedule as is agreed on and specified in the contract; and

        ‘(B) may be made in advance of determination of performance.

      ‘(2) METHOD OF PROVIDING IN-KIND PAYMENTS- If the payment to an owner or operator is made with in-kind commodities, the payment shall be made by the Commodity Credit Corporation--

        ‘(A) by delivery of the commodity involved to the owner or operator at a warehouse or other similar facility located in the county in which the highly erodible cropland is located or at such other location as is agreed to by the Secretary and the owner or operator;

        ‘(B) by the transfer of negotiable warehouse receipts; or

        ‘(C) by such other method, including the sale of the commodity in commercial markets, as is determined by the Secretary to be appropriate to enable the owner or operator to receive efficient and expeditious possession of the commodity.

      ‘(3) CASH PAYMENTS-

        ‘(A) COMMODITY CREDIT CORPORATION STOCKS- If stocks of a commodity acquired by the Commodity Credit Corporation are not readily available to make full payment in kind to the owner or operator, the Secretary may substitute full or partial payment in cash for payment in kind.

        ‘(B) SPECIAL CONSERVATION RESERVE ENHANCEMENT PROGRAM- Payments to an owner or operator under a special conservation reserve enhancement program described in subsection (f)(4) shall be in the form of cash only.

    ‘(e) PAYMENTS ON DEATH, DISABILITY, OR SUCCESSION- If an owner or operator that is entitled to a payment under a contract entered into under this subchapter dies, becomes incompetent, is otherwise unable to receive the payment, or is succeeded by another person that renders or completes the required performance, the Secretary shall make the payment, in accordance with regulations prescribed by the Secretary and without regard to any other provision of law, in such manner as the Secretary determines is fair and reasonable in light of all of the circumstances.

    ‘(f) PAYMENT LIMITATION FOR RENTAL PAYMENTS-

      ‘(1) IN GENERAL- The total amount of rental payments, including rental payments made in the form of in-kind commodities, made to a person under this subchapter for any fiscal year may not exceed $50,000.

      ‘(2) REGULATIONS-

        ‘(A) IN GENERAL- The Secretary shall promulgate regulations--

          ‘(i) defining the term ‘person’ as used in this subsection; and

          ‘(ii) providing such terms and conditions as the Secretary determines necessary to ensure a fair and reasonable application of the limitation established by this subsection.

        ‘(B) CORPORATIONS AND STOCKHOLDERS- The regulations promulgated by the Secretary on December 18, 1970, under section 101 of the Agricultural Act of 1970 (7 U.S.C. 1307), shall be used to determine whether corporations and their stockholders may be considered as separate persons under this subsection.

      ‘(3) OTHER PAYMENTS- Rental payments received by an owner or operator shall be in addition to, and not affect, the total amount of payments that the owner or operator is otherwise eligible to receive under the Farm Security and Rural Investment Act of 2002.

      ‘(4) SPECIAL CONSERVATION RESERVE ENHANCEMENT PROGRAM-

        ‘(A) IN GENERAL- The provisions of this subsection that limit payments to any person, and section 1305(d) of the Agricultural Reconciliation Act of 1987 (7 U.S.C. 1308 note; Public Law 100-203), shall not be applicable to payments received by a State, political subdivision, or agency thereof in connection with agreements entered into under a special conservation reserve enhancement program carried out by that entity that has been approved by the Secretary.

        ‘(B) AGREEMENTS- The Secretary may enter into such agreements for payments to States (including political subdivisions and agencies of States) that the Secretary determines will advance the purposes of this subchapter.

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

‘SEC. 1235. CONTRACTS.

    ‘(a) OWNERSHIP OR OPERATION REQUIREMENTS-

      ‘(1) IN GENERAL- Except as provided in paragraph (2), no contract shall be entered into under this subchapter concerning land with respect to which the ownership has changed in the 1-year period preceding the first year of the contract period unless--

        ‘(A) the new ownership was acquired by will or succession as a result of the death of the previous owner;

        ‘(B) the new ownership was acquired before January 1, 1985;

        ‘(C) the Secretary determines that the land was acquired under circumstances that give adequate assurance that the land was not acquired for the purpose of placing the land in the program established by this subchapter; or

        ‘(D) the ownership change occurred due to foreclosure on the land and the owner of the land immediately before the foreclosure exercises a right of redemption from the mortgage holder in accordance with State law.

      ‘(2) EXCEPTIONS- Paragraph (1) shall not--

        ‘(A) prohibit the continuation of an agreement by a new owner after an agreement has been entered into under this subchapter; or

        ‘(B) require a person to own the land as a condition of eligibility for entering into the contract if the person--

          ‘(i) has operated the land to be covered by a contract under this section for at least 1 year preceding the date of the contract or since January 1, 1985, whichever is later; and

          ‘(ii) controls the land for the contract period.

    ‘(b) SALES OR TRANSFERS- If, during the term of a contract entered into under this subchapter, an owner or operator of land subject to the contract sells or otherwise transfers the ownership or right of occupancy of the land, the new owner or operator of the land may--

      ‘(1) continue the contract under the same terms or conditions;

      ‘(2) enter into a new contract in accordance with this subchapter; or

      ‘(3) elect not to participate in the program established by this subchapter.

    ‘(c) MODIFICATIONS-

      ‘(1) IN GENERAL- The Secretary may modify a contract entered into with an owner or operator under this subchapter if--

        ‘(A) the owner or operator agrees to the modification; and

        ‘(B) the Secretary determines that the modification is desirable--

          ‘(i) to carry out this subchapter;

          ‘(ii) to facilitate the practical administration of this subchapter; or

          ‘(iii) to achieve such other goals as the Secretary determines are appropriate, consistent with this subchapter.

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

    ‘(d) TERMINATION-

      ‘(1) IN GENERAL- The Secretary may terminate a contract entered into with an owner or operator under this subchapter if--

        ‘(A) the owner or operator agrees to the termination; and

        ‘(B) the Secretary determines that the termination would be in the public interest.

      ‘(2) NOTICE TO CONGRESSIONAL COMMITTEES- At least 90 days before taking any action to terminate under paragraph (1) all conservation reserve contracts entered into under this subchapter, the Secretary shall provide to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate written notice of the action.

    ‘(e) EARLY TERMINATION BY OWNER OR OPERATOR-

      ‘(1) EARLY TERMINATION-

        ‘(A) IN GENERAL- The Secretary shall allow a participant that entered into a contract under this subchapter before January 1, 1995, to terminate the contract at any time if the contract has been in effect for at least 5 years.

        ‘(B) LIABILITY FOR CONTRACT VIOLATION- The termination shall not relieve the participant of liability for a contract violation occurring before the date of the termination.

        ‘(C) NOTICE TO SECRETARY- The participant shall provide the Secretary with reasonable notice of the desire of the participant to terminate the contract.

      ‘(2) CERTAIN LAND EXCEPTED- The following land shall not be subject to an early termination of contract under this subsection:

        ‘(A) Filterstrips, waterways, strips adjacent to riparian areas, windbreaks, and shelterbelts.

        ‘(B) Land with an erodibility index of more than 15.

        ‘(C) Other land of high environmental value (including wetland), as determined by the Secretary.

      ‘(3) EFFECTIVE DATE- The contract termination shall become effective 60 days after the date on which the owner or operator submits the notice required under paragraph (1)(C).

      ‘(4) PRORATED RENTAL PAYMENT- If a contract entered into under this subchapter is terminated under this subsection before the end of the fiscal year for which a rental payment is due, the Secretary shall provide a prorated rental payment covering the portion of the fiscal year during which the contract was in effect.

      ‘(5) RENEWED ENROLLMENT- The termination of a contract entered into under this subchapter shall not affect the ability of the owner or operator that requested the termination to submit a subsequent bid to enroll the land that was subject to the contract into the conservation reserve.

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

‘SEC. 1235A. CONVERSION OF LAND SUBJECT TO CONTRACT TO OTHER CONSERVING USES.

    ‘(a) CONVERSION TO TREES-

      ‘(1) IN GENERAL- The Secretary shall permit an owner or operator that has entered into a contract under this subchapter that is in effect on November 28, 1990, to convert areas of highly erodible cropland that are subject to the contract, and that are devoted to vegetative cover, from that use to hardwood trees, windbreaks, shelterbelts, or wildlife corridors.

      ‘(2) TERMS-

        ‘(A) EXTENSION OF CONTRACT- With respect to a contract that is modified under this section that provides for the planting of hardwood trees, windbreaks, shelterbelts, or wildlife corridors, if the original term of the contract was less than 15 years, the owner or operator may extend the contract to a term of not to exceed 15 years.

        ‘(B) COST SHARE ASSISTANCE- The Secretary shall pay 50 percent of the cost of establishing conservation measures and practices authorized under this subsection for which the Secretary determines the cost sharing is appropriate and in the public interest.

    ‘(b) CONVERSION TO WETLAND- The Secretary shall permit an owner or operator that has entered into a contract under this subchapter that is in effect on November 28, 1990, to restore areas of highly erodible cropland that are devoted to vegetative cover under the contract to wetland if--

      ‘(1) the areas are prior converted wetland;

      ‘(2) the owner or operator of the areas enters into an agreement to provide the Secretary with a long-term or permanent easement under subchapter C covering the areas;

      ‘(3) there is a high probability that the prior converted area can be successfully restored to wetland status; and

      ‘(4) the restoration of the areas otherwise meets the requirements of subchapter C.

    ‘(c) LIMITATION- The Secretary shall not incur, through a conversion under this section, any additional expense on the acres, including the expense involved in the original establishment of the vegetative cover, that would result in cost share for costs under this section in excess of the costs that would have been subject to cost share for the new practice had that practice been the original practice.

    ‘(d) CONDITION OF CONTRACT- An owner or operator shall as a condition of entering into a contract under subsection (a) participate in the Forest Stewardship Program established under section 5 of the Cooperative Forestry Assistance Act of 1978 (16 U.S.C. 2103a).’.

    (b) STUDY ON ECONOMIC EFFECTS-

      (1) IN GENERAL- Not later than 18 months after the date of enactment of this Act, the Secretary of Agriculture shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes the economic and social effects on rural communities resulting from the conservation reserve program established under subchapter B of chapter 1 of subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3831 et seq.).

      (2) COMPONENTS- The study under paragraph (1) shall include analyses of--

        (A) the impact that enrollments in the conservation reserve program have on rural businesses, civic organizations, and community services (such as schools, public safety, and infrastructure), particularly in communities with a large percentage of whole farm enrollments;

        (B) the effect that those enrollments have on rural population and beginning farmers (including a description of any connection between the rate of enrollment and the incidence of absentee ownership);

        (C)(i) the manner in which differential per acre payment rates potentially impact the types of land (by productivity) enrolled;

        (ii) changes to the per acre payment rates that may affect that impact; and

        (iii) the manner in which differential per acre payment rates could facilitate retention of productive agricultural land in agriculture; and

        (D) the effect of enrollment on opportunities for recreational activities (including hunting and fishing).

Subtitle C--Wetlands Reserve Program

SEC. 2201. REAUTHORIZATION.

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

SEC. 2202. ENROLLMENT.

    Section 1237 of the Food Security Act of 1985 (16 U.S.C. 3837) is amended--

      (1) by striking subsection (b) and inserting the following:

    ‘(b) ENROLLMENT CONDITIONS-

      ‘(1) MAXIMUM ENROLLMENT- The total number of acres enrolled in the wetlands reserve program shall not exceed 2,275,000 acres, of which, to the maximum extent practicable, the Secretary shall enroll 250,000 acres in each calendar year.

      ‘(2) METHODS OF ENROLLMENT- The Secretary shall enroll acreage into the wetlands reserve program through the use of permanent easements, 30-year easements, restoration cost share agreements, or any combination of those options.’; and

      (2) by striking subsection (g).

SEC. 2203. EASEMENTS AND AGREEMENTS.

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

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

    Section 1237E(a) of the Food Security Act of 1985 (16 U.S.C. 3837e(a)) is amended by striking paragraph (2) and inserting the following:

      ‘(2)(A) the ownership change occurred because of foreclosure on the land; and

      ‘(B) immediately before the foreclosure, the owner of the land exercises a right of redemption from the mortgage holder in accordance with State law; or’.

Subtitle D--Environmental Quality Incentives

SEC. 2301. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.

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

‘SEC. 1240. PURPOSES.

    ‘The purposes of the environmental quality incentives program established by this chapter are to promote agricultural production and environmental quality as compatible goals, and to optimize environmental benefits, by--

      ‘(1) assisting producers in complying with local, State, and national regulatory requirements concerning--

        ‘(A) soil, water, and air quality;

        ‘(B) wildlife habitat; and

        ‘(C) surface and ground water conservation;

      ‘(2) avoiding, to the maximum extent practicable, the need for resource and regulatory programs by assisting producers in protecting soil, water, air, and related natural resources and meeting environmental quality criteria established by Federal, State, tribal, and local agencies;

      ‘(3) providing flexible assistance to producers to install and maintain conservation practices that enhance soil, water, related natural resources (including grazing land and wetland), and wildlife while sustaining production of food and fiber;

      ‘(4) assisting producers to make beneficial, cost effective changes to cropping systems, grazing management, nutrient management associated with livestock, pest or irrigation management, or other practices on agricultural land; and

      ‘(5) consolidating and streamlining conservation planning and regulatory compliance processes to reduce administrative burdens on producers and the cost of achieving environmental goals.

‘SEC. 1240A. DEFINITIONS.

    ‘In this chapter:

      ‘(1) BEGINNING FARMER OR RANCHER- The term ‘beginning farmer or rancher’ has the meaning provided under section 343(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1999(a)).

      ‘(2) ELIGIBLE LAND-

        ‘(A) IN GENERAL- The term ‘eligible land’ means land on which agricultural commodities or livestock are produced.

        ‘(B) INCLUSIONS- The term ‘eligible land’ includes--

          ‘(i) cropland;

          ‘(ii) grassland;

          ‘(iii) rangeland;

          ‘(iv) pasture land;

          ‘(v) private, nonindustrial forest land; and

          ‘(vi) other agricultural land that the Secretary determines poses a serious threat to soil, air, water, or related resources.

      ‘(3) LAND MANAGEMENT PRACTICE- The term ‘land management practice’ means a site-specific nutrient or manure management, integrated pest management, irrigation management, tillage or residue management, grazing management, air quality management, or other land management practice carried out on eligible land that the Secretary determines is needed to protect from degradation, in the most cost-effective manner, water, soil, or related resources.

      ‘(4) LIVESTOCK- The term ‘livestock’ means dairy cattle, beef cattle, laying hens, broilers, turkeys, swine, sheep, and other such animals as are determined by the Secretary.

      ‘(5) PRACTICE- The term ‘practice’ means 1 or more structural practices, land management practices, and comprehensive nutrient management planning practices.

      ‘(6) STRUCTURAL PRACTICE- The term ‘structural practice’ means--

        ‘(A) the establishment on eligible land of a site-specific animal waste management facility, terrace, grassed waterway, contour grass strip, filterstrip, tailwater pit, permanent wildlife habitat, constructed wetland, or other structural practice that the Secretary determines is needed to protect, in the most cost effective manner, water, soil, or related resources from degradation; and

        ‘(B) the capping of abandoned wells on eligible land.

‘SEC. 1240B. ESTABLISHMENT AND ADMINISTRATION OF ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.

    ‘(a) ESTABLISHMENT-

      ‘(1) IN GENERAL- During each of the 2002 through 2007 fiscal years, the Secretary shall provide cost-share payments and incentive payments to producers that enter into contracts with the Secretary under the program.

      ‘(2) ELIGIBLE PRACTICES- With respect to practices implemented under this chapter--

        ‘(A) a producer that implements a structural practice in accordance with this chapter shall be eligible to receive cost-share payments; and

        ‘(B) a producer that implements a land management practice, or develops a comprehensive nutrient management plan, in accordance with this chapter shall be eligible to receive incentive payments.

    ‘(b) PRACTICES AND TERM-

      ‘(1) PRACTICES- A contract under this chapter may apply to 1 or more structural practices, land management practices, and comprehensive nutrient management practices.

      ‘(2) TERM- A contract under this chapter shall have a term that--

        ‘(A) at a minimum, is equal to the period beginning on the date on which the contract is entered into and ending on the date that is 1 year after the date on which all practices under the contract have been implemented; but

        ‘(B) not to exceed 10 years.

    ‘(c) BIDDING DOWN- If the Secretary determines that the environmental values of 2 or more applications for cost-share payments or incentive payments are comparable, the Secretary shall not assign a higher priority to the application only because it would present the least cost to the program established under the program.

    ‘(d) COST-SHARE PAYMENTS-

      ‘(1) IN GENERAL- Except as provided in paragraph (2), the cost-share payments provided to a producer proposing to implement 1 or more practices under the program shall be not more than 75 percent of the cost of the practice, as determined by the Secretary.

      ‘(2) EXCEPTIONS-

        ‘(A) LIMITED RESOURCE AND BEGINNING FARMERS- The Secretary may increase the amount provided to a producer under paragraph (1) to not more than 90 percent if the producer is a limited resource or beginning farmer or rancher, as determined by the Secretary.

        ‘(B) COST-SHARE ASSISTANCE FROM OTHER SOURCES- Except as provided in paragraph (3), any cost-share payments received by a producer from a State or private organization or person for the implementation of 1 or more practices on eligible land of the producer shall be in addition to the payments provided to the producer under paragraph (1).

      ‘(3) OTHER PAYMENTS- A producer shall not be eligible for cost-share payments for practices on eligible land under the program if the producer receives cost-share payments or other benefits for the same practice on the same land under chapter 1 and the program.

    ‘(e) INCENTIVE PAYMENTS-

      ‘(1) IN GENERAL- The Secretary shall make incentive payments in an amount and at a rate determined by the Secretary to be necessary to encourage a producer to perform 1 or more land management practices.

      ‘(2) SPECIAL RULE- In determining the amount and rate of incentive payments, the Secretary may accord great significance to a practice that promotes residue, nutrient, pest, invasive species, or air quality management.

    ‘(f) MODIFICATION OR TERMINATION OF CONTRACTS-

      ‘(1) VOLUNTARY MODIFICATION OR TERMINATION- The Secretary may modify or terminate a contract entered into with a producer under this chapter if--

        ‘(A) the producer agrees to the modification or termination; and

        ‘(B) the Secretary determines that the modification or termination is in the public interest.

      ‘(2) INVOLUNTARY TERMINATION- The Secretary may terminate a contract under this chapter if the Secretary determines that the producer violated the contract.

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

‘SEC. 1240C. EVALUATION OF OFFERS AND PAYMENTS.

    ‘In evaluating applications for cost-share payments and incentive payments, the Secretary shall accord a higher priority to assistance and payments that--

      ‘(1) encourage the use by producers of cost-effective conservation practices; and

      ‘(2) address national conservation priorities.

‘SEC. 1240D. DUTIES OF PRODUCERS.

    ‘To receive technical assistance, cost-share payments, or incentive payments under the program, a producer shall agree--

      ‘(1) to implement an environmental quality incentives program plan (including a comprehensive nutrient management plan, if applicable) that describes conservation and environmental purposes to be achieved through 1 or more practices that are approved by the Secretary;

      ‘(2) not to conduct any practices on the farm or ranch that would tend to defeat the purposes of the program;

      ‘(3) on the violation of a term or condition of the contract at anytime the producer has control of the land--

        ‘(A) if the Secretary determines that the violation warrants termination of the contract--

          ‘(i) to forfeit all rights to receive payments under the contract; and

          ‘(ii) to refund to the Secretary all or a portion of the payments received by the owner or operator under the contract, including any interest on the payments, as determined by the Secretary; or

        ‘(B) if the Secretary determines that the violation does not warrant termination of the contract, to refund to the Secretary, or accept adjustments to, the payments provided to the owner or operator, as the Secretary determines to be appropriate;

      ‘(4) on the transfer of the right and interest of the producer in land subject to the contract, unless the transferee of the right and interest agrees with the Secretary to assume all obligations of the contract, to refund all cost-share payments and incentive payments received under the program, as determined by the Secretary;

      ‘(5) to supply information as required by the Secretary to determine compliance with the program plan and requirements of the program; and

      ‘(6) to comply with such additional provisions as the Secretary determines are necessary to carry out the program plan.

‘SEC. 1240E. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM PLAN.

    ‘(a) IN GENERAL- To be eligible to receive cost-share payments or incentive payments under the program, a producer shall submit to the Secretary for approval a plan of operations that--

      ‘(1) specifies practices covered under the program;

      ‘(2) includes such terms and conditions as the Secretary considers necessary to carry out the program, including a description of the purposes to be met by the implementation of the plan; and

      ‘(3) in the case of a confined livestock feeding operation, provides for development and implementation of a comprehensive nutrient management plan, if applicable.

    ‘(b) AVOIDANCE OF DUPLICATION- The Secretary shall, to the maximum extent practicable, eliminate duplication of planning activities under the program under this chapter and comparable conservation programs.

‘SEC. 1240F. DUTIES OF THE SECRETARY.

    ‘To the extent appropriate, the Secretary shall assist a producer in achieving the conservation and environmental goals of a program plan by--

      ‘(1) providing cost-share payments or incentive payments for developing and implementing 1 or more practices, as appropriate; and

      ‘(2) providing the producer with information and training to aid in implementation of the plan.

‘SEC. 1240G. LIMITATION ON PAYMENTS.

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

‘SEC. 1240H. CONSERVATION INNOVATION GRANTS.

    ‘(a) IN GENERAL- The Secretary may pay the cost of competitive grants that are intended to stimulate innovative approaches to leveraging Federal investment in environmental enhancement and protection, in conjunction with agricultural production, through the program.

    ‘(b) USE- The Secretary may provide grants under this section to governmental and nongovernmental organizations and persons, on a competitive basis, to carry out projects that--

      ‘(1) involve producers that are eligible for payments or technical assistance under the program;

      ‘(2) implement projects, such as--

        ‘(A) market systems for pollution reduction; and

        ‘(B) innovative conservation practices, including the storing of carbon in the soil; and

      ‘(3) leverage funds made available to carry out the program under this chapter with matching funds provided by State and local governments and private organizations to promote environmental enhancement and protection in conjunction with agricultural production.

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

‘SEC. 1240I. GROUND AND SURFACE WATER CONSERVATION.

    ‘(a) ESTABLISHMENT- In carrying out the program under this chapter, subject to subsection (b), the Secretary shall promote ground and surface water conservation by providing cost-share payments, incentive payments, and loans to producers to carry out eligible water conservation activities with respect to the agricultural operations of producers, to--

      ‘(1) improve irrigation systems;

      ‘(2) enhance irrigation efficiencies;

      ‘(3) convert to--

        ‘(A) the production of less water-intensive agricultural commodities; or

        ‘(B) dryland farming;

      ‘(4) improve the storage of water through measures such as water banking and groundwater recharge;

      ‘(5) mitigate the effects of drought; or

      ‘(6) institute other measures that improve groundwater and surface water conservation, as determined by the Secretary, in the agricultural operations of producers.

    ‘(b) NET SAVINGS- The Secretary may provide assistance to a producer under this section only if the Secretary determines that the assistance will facilitate a conservation measure that results in a net savings in groundwater or surface water resources in the agricultural operation of the producer.

    ‘(c) FUNDING- Of the funds of the Commodity Credit Corporation, in addition to amounts made available under section 1241(a)(6) to carry out this chapter, the Secretary shall use--

      ‘(1) to carry out this section--

        ‘(A) $25,000,000 for fiscal year 2002;

        ‘(B) $45,000,000 for fiscal year 2003; and

        ‘(C) $60,000,000 for each of fiscal years 2004 through 2007; and

      ‘(2) $50,000,000 to carry out water conservation activities in Klamath Basin, California and Oregon, to be made available as soon as practicable after the date of enactment of this section.’.

Subtitle E--Grassland Reserve

SEC. 2401. GRASSLAND RESERVE PROGRAM.

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

‘Subchapter C--Grassland Reserve Program

‘SEC. 1238N. GRASSLAND RESERVE PROGRAM.

    ‘(a) ESTABLISHMENT- The Secretary shall establish a grassland reserve program (referred to in this subchapter as the ‘program’) to assist owners in restoring and conserving eligible land described in subsection (c).

    ‘(b) ENROLLMENT CONDITIONS-

      ‘(1) MAXIMUM ENROLLMENT- The total number of acres enrolled in the program shall not exceed 2,000,000 acres of restored or improved grassland, rangeland, and pastureland.

      ‘(2) METHODS OF ENROLLMENT-

        ‘(A) IN GENERAL- Except as provided in subparagraph (B), the Secretary shall enroll in the program from a willing owner not less than 40 contiguous acres of land through the use of--

          ‘(i) a 10-year, 15-year, or 20-year rental agreement;

          ‘(ii)(I) a 30-year rental agreement or permanent or 30-year easement; or

          ‘(II) in a State that imposes a maximum duration for easements, an easement for the maximum duration allowed under State law.

        ‘(B) WAIVER- The Secretary may enroll in the program such parcels of land that are less than 40 acres as the Secretary determines are appropriate to achieve the purposes of the program.

      ‘(3) LIMITATION ON USE OF EASEMENTS AND RENTAL AGREEMENTS- Of the total amount of funds expended under the program to acquire easements and rental agreements described in paragraph (2)(A)--

        ‘(A) not more than 40 percent shall be used for rental agreements described in paragraph (2)(A)(i); and

        ‘(B) not more than 60 percent shall be used for easements and rental agreements described in paragraph (2)(A)(ii).

    ‘(c) ELIGIBLE LAND- Land shall be eligible to be enrolled in the program if the Secretary determines that the land is private land that is--

      ‘(1) grassland, land that contains forbs, or shrubland (including improved rangeland and pastureland); or

      ‘(2) land that--

        ‘(A) is located in an area that has been historically dominated by grassland, forbs, or shrubland; and

        ‘(B) has potential to serve as habitat for animal or plant populations of significant ecological value if the land is--

          ‘(i) retained in the current use of the land; or

          ‘(ii) restored to a natural condition; or

      ‘(3) land that is incidental to land described in paragraph (1) or (2), if the incidental land is determined by the Secretary to be necessary for the efficient administration of an agreement or easement.

‘SEC. 1238O. REQUIREMENTS RELATING TO EASEMENTS AND AGREEMENTS.

    ‘(a) REQUIREMENTS OF LANDOWNER-

      ‘(1) IN GENERAL- To be eligible to enroll land in the program through the grant of an easement, the owner of the land shall enter into an agreement with the Secretary--

        ‘(A) to grant an easement that applies to the land to the Secretary;

        ‘(B) to create and record an appropriate deed restriction in accordance with applicable State law to reflect the easement;

        ‘(C) to provide a written statement of consent to the easement signed by persons holding a security interest or any vested interest in the land;

        ‘(D) to provide proof of unencumbered title to the underlying fee interest in the land that is the subject of the easement; and

        ‘(E) to comply with the terms of the easement and restoration agreement.

      ‘(2) AGREEMENTS- To be eligible to enroll land in the program under an agreement, the owner or operator of the land shall agree--

        ‘(A) to comply with the terms of the agreement (including any related restoration agreements); and

        ‘(B) to the suspension of any existing cropland base and allotment history for the land under a program administered by the Secretary.

    ‘(b) TERMS OF EASEMENT OR RENTAL AGREEMENT- An easement or rental agreement under subsection (a) shall--

      ‘(1) permit--

        ‘(A) common grazing practices, including maintenance and necessary cultural practices, on the land in a manner that is consistent with maintaining the viability of grassland, forb, and shrub species common to that locality;

        ‘(B) subject to appropriate restrictions during the nesting season for birds in the local area that are in significant decline or are conserved in accordance with Federal or State law, as determined by the Natural Resources Conservation Service State conservationist, haying, mowing, or harvesting for seed production; and

        ‘(C) fire rehabilitation and construction of fire breaks and fences (including placement of the posts necessary for fences);

      ‘(2) prohibit--

        ‘(A) the production of crops (other than hay), fruit trees, vineyards, or any other agricultural commodity that requires breaking the soil surface; and

        ‘(B) except as permitted under this subsection or subsection (d), the conduct of any other activity that would disturb the surface of the land covered by the easement or rental agreement; and

      ‘(3) include such additional provisions as the Secretary determines are appropriate to carry out or facilitate the administration of this subchapter.

    ‘(c) EVALUATION AND RANKING OF EASEMENT AND RENTAL AGREEMENT APPLICATIONS-

      ‘(1) IN GENERAL- The Secretary shall establish criteria to evaluate and rank applications for easements and rental agreements under this subchapter.

      ‘(2) CONSIDERATIONS- In establishing the criteria, the Secretary shall emphasize support for--

        ‘(A) grazing operations;

        ‘(B) plant and animal biodiversity; and

        ‘(C) grassland, land that contains forbs, and shrubland under the greatest threat of conversion.

    ‘(d) RESTORATION AGREEMENTS-

      ‘(1) IN GENERAL- The Secretary shall prescribe the terms of a restoration agreement by which grassland, land that contains forbs, or shrubland that is subject to an easement or rental agreement entered into under the program shall be restored.

      ‘(2) REQUIREMENTS- The restoration agreement shall describe the respective duties of the owner and the Secretary (including the Federal share of restoration payments and technical assistance).

    ‘(e) VIOLATIONS- On a violation of the terms or conditions of an easement, rental agreement, or restoration agreement entered into under this section--

      ‘(1) the easement or rental agreement shall remain in force; and

      ‘(2) the Secretary may require the owner to refund all or part of any payments received by the owner under this subchapter, with interest on the payments as determined appropriate by the Secretary.

‘SEC. 1238P. DUTIES OF SECRETARY.

    ‘(a) IN GENERAL- In return for the granting of an easement, or the execution of a rental agreement, by an owner under this subchapter, the Secretary shall, in accordance with this section--

      ‘(1) make easement or rental agreement payments to the owner in accordance with subsection (b); and

      ‘(2) make payments to the owner for the Federal share of the cost of restoration in accordance with subsection (c).

    ‘(b) PAYMENTS-

      ‘(1) EASEMENT PAYMENTS-

        ‘(A) AMOUNT- In return for the granting of an easement by an owner under this subchapter, the Secretary shall make easement payments to the owner in an amount equal to--

          ‘(i) in the case of a permanent easement, the fair market value of the land less the grazing value of the land encumbered by the easement; and

          ‘(ii) in the case of a 30-year easement or an easement for the maximum duration allowed under applicable State law, 30 percent of the fair market value of the land less the grazing value of the land for the period during which the land is encumbered by the easement.

        ‘(B) SCHEDULE- Easement payments may be provided in not less than 1 payment nor more than 10 annual payments of equal or unequal amount, as agreed to by the Secretary and the owner.

      ‘(2) RENTAL AGREEMENT PAYMENTS- In return for entering into a rental agreement by an owner under this subchapter, the Secretary shall make annual payments to the owner during the term of the rental agreement in an amount that is not more than 75 percent of the grazing value of the land covered by the contract.

    ‘(c) FEDERAL SHARE OF RESTORATION- The Secretary shall make payments to an owner under this section of not more than--

      ‘(1) in the case of grassland, land that contains forbs, or shrubland that has never been cultivated, 90 percent of the costs of carrying out measures and practices necessary to restore functions and values of that land; or

      ‘(2) in the case of restored grassland, land that contains forbs, or shrubland, 75 percent of those costs.

    ‘(d) PAYMENTS TO OTHERS- If an owner that is entitled to a payment under this subchapter dies, becomes incompetent, is otherwise unable to receive the payment, or is succeeded by another person who renders or completes the required performance, the Secretary shall make the payment, in accordance with regulations promulgated by the Secretary and without regard to any other provision of law, in such manner as the Secretary determines is fair and reasonable in light of all the circumstances.

‘SEC. 1238Q. DELEGATION TO PRIVATE ORGANIZATIONS.

    ‘(a) IN GENERAL- The Secretary may permit a private conservation or land trust organization (referred to in this section as a ‘private organization’) or a State agency to hold and enforce an easement under this subchapter, in lieu of the Secretary, subject to the right of the Secretary to conduct periodic inspections and enforce the easement, if--

      ‘(1) the Secretary determines that granting the permission will promote protection of grassland, land that contains forbs, and shrubland;

      ‘(2) the owner authorizes the private organization or State agency to hold and enforce the easement; and

      ‘(3) the private organization or State agency agrees to assume the costs incurred in administering and enforcing the easement, including the costs of restoration or rehabilitation of the land as specified by the owner and the private organization or State agency.

    ‘(b) APPLICATION- A private organization or State agency that seeks to hold and enforce an easement under this subchapter shall apply to the Secretary for approval.

    ‘(c) APPROVAL BY SECRETARY- The Secretary may approve a private organization to hold and enforce an easement under this subchapter if (as determined by the Secretary) the private organization--

      ‘(1)(A) is an organization described in section 501(c)(3) of the Internal Revenue Code of 1986 that is exempt from taxation under section 501(a) of that Code; or

      ‘(B) is described in section 509(a)(3), and is controlled by an organization described in section 509(a)(2), of that Code;

      ‘(2) has the relevant experience necessary to administer grassland and shrubland easements;

      ‘(3) has a charter that describes the commitment of the private organization to conserving ranchland, agricultural land, or grassland for grazing and conservation purposes; and

      ‘(4) has the resources necessary to effectuate the purposes of the charter.

    ‘(d) REASSIGNMENT-

      ‘(1) IN GENERAL- If a private organization holding an easement on land under this subchapter terminates, not later than 30 days after termination of the private organization, the owner of the land shall reassign the easement to--

        ‘(A) a new private organization that is approved by the Secretary; or

        ‘(B) the Secretary.

      ‘(2) NOTIFICATION OF SECRETARY-

        ‘(A) IN GENERAL- If the easement is reassigned to a new private organization, not later than 60 days after the date of reassignment, the owner and the new organization shall notify the Secretary in writing that a reassignment for termination has been made.

        ‘(B) FAILURE TO NOTIFY- If the owner and the new organization fail to notify the Secretary of the reassignment in accordance with subparagraph (A), the easement shall revert to the control of the Secretary.’.

Subtitle F--Other Conservation Programs

SEC. 2501. AGRICULTURAL MANAGEMENT ASSISTANCE.

    Section 524 of the Federal Crop Insurance Act (7 U.S.C. 1524) is amended by striking subsection (b) and inserting the following:

    ‘(b) AGRICULTURAL MANAGEMENT ASSISTANCE-

      ‘(1) AUTHORITY- The Secretary shall provide financial assistance to producers in the States of Connecticut, Delaware, Maryland, Massachusetts, Maine, Nevada, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Utah, Vermont, West Virginia, and Wyoming.

      ‘(2) USES- A producer may use financial assistance provided under this subsection to--

        ‘(A) construct or improve--

          ‘(i) watershed management structures; or

          ‘(ii) irrigation structures;

        ‘(B) plant trees to form windbreaks or to improve water quality;

        ‘(C) mitigate financial risk through production or marketing diversification or resource conservation practices, including--

          ‘(i) soil erosion control;

          ‘(ii) integrated pest management;

          ‘(iii) organic farming; or

          ‘(iv) to develop and implement a plan to create marketing opportunities for the producer, including through value-added processing;

        ‘(D) enter into futures, hedging, or options contracts in a manner designed to help reduce production, price, or revenue risk;

        ‘(E) enter into agricultural trade options as a hedging transaction to reduce production, price, or revenue risk; or

        ‘(F) conduct any other activity relating to an activity described in subparagraphs (A) through (E), as determined by the Secretary.

      ‘(3) PAYMENT LIMITATION- The total amount of payments made to a person (as defined in section 1001(5) of the Food Security Act (7 U.S.C. 1308(5))) under this subsection for any year may not exceed $50,000.

      ‘(4) COMMODITY CREDIT CORPORATION-

        ‘(A) IN GENERAL- The Secretary shall carry out this subsection through the Commodity Credit Corporation.

        ‘(B) FUNDING-

          ‘(i) IN GENERAL- Except as provided in clause (ii), the Commodity Credit Corporation shall make available to carry out this subsection not less than $10,000,000 for each fiscal year.

          ‘(ii) EXCEPTION- For each of fiscal years 2003 through 2007, the Commodity Credit Corporation shall make available to carry out this subsection $20,000,000.’.

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

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

‘CHAPTER 5--OTHER CONSERVATION PROGRAMS

‘SEC. 1240M. CONSERVATION OF PRIVATE GRAZING LAND.

    ‘(a) PURPOSE- It is the purpose of this section to authorize the Secretary to provide a coordinated technical, educational, and related assistance program to conserve and enhance private grazing land resources and provide related benefits to all citizens of the United States by--

      ‘(1) establishing a coordinated and cooperative Federal, State, and local grazing conservation program for management of private grazing land;

      ‘(2) strengthening technical, educational, and related assistance programs that provide assistance to owners and managers of private grazing land;

      ‘(3) conserving and improving wildlife habitat on private grazing land;

      ‘(4) conserving and improving fish habitat and aquatic systems through grazing land conservation treatment;

      ‘(5) protecting and improving water quality;

      ‘(6) improving the dependability and consistency of water supplies;

      ‘(7) identifying and managing weed, noxious weed, and brush encroachment problems on private grazing land; and

      ‘(8) integrating conservation planning and management decisions by owners and managers of private grazing land, on a voluntary basis.

    ‘(b) DEFINITIONS- In this section:

      ‘(1) DEPARTMENT- The term ‘Department’ means the Department of Agriculture.

      ‘(2) PRIVATE GRAZING LAND- The term ‘private grazing land’ means private, State-owned, tribally-owned, and any other non-federally owned rangeland, pastureland, grazed forest land, and hay land.

      ‘(3) SECRETARY- The term ‘Secretary’ means the Secretary of Agriculture.

    ‘(c) PRIVATE GRAZING LAND CONSERVATION ASSISTANCE-

      ‘(1) ASSISTANCE TO GRAZING LANDOWNERS AND OTHERS- Subject to the availability of appropriations for this section, the Secretary shall establish a voluntary program to provide technical, educational, and related assistance to owners and managers of private grazing land and public agencies, through local conservation districts, to enable the landowners, managers, and public agencies to voluntarily carry out activities that are consistent with this section, including--

        ‘(A) maintaining and improving private grazing land and the multiple values and uses that depend on private grazing land;

        ‘(B) implementing grazing land management technologies;

        ‘(C) managing resources on private grazing land, including--

          ‘(i) planning, managing, and treating private grazing land resources;

          ‘(ii) ensuring the long-term sustainability of private grazing land resources;

          ‘(iii) harvesting, processing, and marketing private grazing land resources; and

          ‘(iv) identifying and managing weed, noxious weed, and brush encroachment problems;

        ‘(D) protecting and improving the quality and quantity of water yields from private grazing land;

        ‘(E) maintaining and improving wildlife and fish habitat on private grazing land;

        ‘(F) enhancing recreational opportunities on private grazing land;

        ‘(G) maintaining and improving the aesthetic character of private grazing land;

        ‘(H) identifying the opportunities and encouraging the diversification of private grazing land enterprises; and

        ‘(I) encouraging the use of sustainable grazing systems, such as year-round, rotational, or managed grazing.

      ‘(2) PROGRAM ELEMENTS-

        ‘(A) FUNDING- If funding is provided to carry out this section, it shall be provided through a specific line-item in the annual appropriations for the Natural Resources Conservation Service.

        ‘(B) TECHNICAL ASSISTANCE AND EDUCATION- Personnel of the Department trained in pasture and range management shall be made available under the program to deliver and coordinate technical assistance and education to owners and managers of private grazing land, at the request of the owners and managers.

    ‘(d) GRAZING TECHNICAL ASSISTANCE SELF-HELP-

      ‘(1) FINDINGS- Congress finds that--

        ‘(A) there is a severe lack of technical assistance for farmers and ranchers that graze livestock;

        ‘(B) Federal budgetary constraints preclude any significant expansion, and may force a reduction of, current levels of technical support; and

        ‘(C) farmers and ranchers have a history of cooperatively working together to address common needs in the promotion of their products and in the drainage of wet areas through drainage districts.

      ‘(2) ESTABLISHMENT OF GRAZING DEMONSTRATION- In accordance with paragraph (3), the Secretary may establish 2 grazing management demonstration districts at the recommendation of the grazing land conservation initiative steering committee.

      ‘(3) PROCEDURE-

        ‘(A) PROPOSAL- Within a reasonable time after the submission of a request of an organization of farmers or ranchers engaged in grazing, the Secretary shall propose that a grazing management district be established.

        ‘(B) FUNDING- The terms and conditions of the funding and operation of the grazing management district shall be proposed by the producers.

        ‘(C) APPROVAL- The Secretary shall approve the proposal if the Secretary determines that the proposal--

          ‘(i) is reasonable;

          ‘(ii) will promote sound grazing practices; and

          ‘(iii) contains provisions similar to the provisions contained in the beef promotion and research order issued under section 4 of the Beef Research and Information Act (7 U.S.C. 2903) in effect on April 4, 1996.

        ‘(D) AREA INCLUDED- The area proposed to be included in a grazing management district shall be determined by the Secretary on the basis of an application by farmers or ranchers.

        ‘(E) AUTHORIZATION- The Secretary may use authority under the Agricultural Adjustment Act (7 U.S.C. 601 et seq.), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, to operate, on a demonstration basis, a grazing management district.

        ‘(F) ACTIVITIES- The activities of a grazing management district shall be scientifically sound activities, as determined by the Secretary in consultation with a technical advisory committee composed of ranchers, farmers, and technical experts.

    ‘(e) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this section $60,000,000 for each of fiscal years 2002 through 2007.

‘SEC. 1240N. WILDLIFE HABITAT INCENTIVE PROGRAM.

    ‘(a) IN GENERAL- The Secretary, in consultation with the State technical committees established under section 1261, shall establish within the Natural Resources Conservation Service a program to be known as the wildlife habitat incentive program (referred to in this section as the ‘program’).

    ‘(b) COST-SHARE PAYMENTS-

      ‘(1) IN GENERAL- Under the program, the Secretary shall make cost-share payments to landowners to develop--

        ‘(A) upland wildlife habitat;

        ‘(B) wetland wildlife habitat;

        ‘(C) habitat for threatened and endangered species;

        ‘(D) fish habitat; and

        ‘(E) other types of wildlife habitat approved by the Secretary.

      ‘(2) INCREASED COST SHARE FOR LONG-TERM AGREEMENTS-

        ‘(A) IN GENERAL- In a case in which the Secretary enters into an agreement or contract to protect and restore plant and animal habitat that has a term of at least 15 years, the Secretary may provide cost-share payments in addition to amounts provided under paragraph (1).

        ‘(B) FUNDING LIMITATION- The Secretary may use, for a fiscal year, not more than 15 percent of funds made available under section 1241(a)(7) for the fiscal year to carry out contracts and agreements described in subparagraph (A).

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

‘SEC. 1240O. GRASSROOTS SOURCE WATER PROTECTION PROGRAM.

    ‘(a) IN GENERAL- The Secretary shall establish a national grassroots water protection program to more effectively use onsite technical assistance capabilities of each State rural water association that, as of the date of enactment of this section, operates a wellhead or groundwater protection program in the State.

    ‘(b) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this section $5,000,000 for each of fiscal years 2002 through 2007.

‘SEC. 1240P. GREAT LAKES BASIN PROGRAM FOR SOIL EROSION AND SEDIMENT CONTROL.

    ‘(a) IN GENERAL- The Secretary, in consultation with the Great Lakes Commission created by Article IV of the Great Lakes Basin Compact (82 Stat. 415) and in cooperation with the Administrator of the Environmental Protection Agency and the Secretary of the Army, may carry out the Great Lakes basin program for soil erosion and sediment control (referred to in this section as the ‘program’).

    ‘(b) ASSISTANCE- In carrying out the program, the Secretary may--

      ‘(1) provide project demonstration grants, provide technical assistance, and carry out information and education programs to improve water quality in the Great Lakes basin by reducing soil erosion and improving sediment control; and

      ‘(2) provide a priority for projects and activities that directly reduce soil erosion or improve sediment control.

    ‘(c) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this section $5,000,000 for each of fiscal years 2002 through 2007.’.

    (b) CONFORMING AMENDMENT- Sections 386 and 387 of the Federal Agriculture Improvement and Reform Act of 1996 (16 U.S.C. 2005b, 3836a) are repealed.

SEC. 2503. FARMLAND PROTECTION PROGRAM.

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

‘Subchapter B--Farmland Protection Program

‘SEC. 1238H. DEFINITIONS.

    ‘In this subchapter:

      ‘(1) ELIGIBLE ENTITY- The term ‘eligible entity’ means--

        ‘(A) any agency of any State or local government or an Indian tribe (including a farmland protection board or land resource council established under State law); or

        ‘(B) any organization that--

          ‘(i) is organized for, and at all times since the formation of the organization has been operated principally for, 1 or more of the conservation purposes specified in clause (i), (ii), (iii), or (iv) of section 170(h)(4)(A) of the Internal Revenue Code of 1986;

          ‘(ii) is an organization described in section 501(c)(3) of that Code that is exempt from taxation under section 501(a) of that Code;

          ‘(iii) is described in section 509(a)(2) of that Code; or

          ‘(iv) is described in section 509(a)(3), and is controlled by an organization described in section 509(a)(2), of that Code.

      ‘(2) ELIGIBLE LAND-

        ‘(A) IN GENERAL- The term ‘eligible land’ means land on a farm or ranch that--

          ‘(i)(I) has prime, unique, or other productive soil; or

          ‘(II) contains historical or archaeological resources; and

          ‘(ii) is subject to a pending offer for purchase from an eligible entity.

        ‘(B) INCLUSIONS- The term ‘eligible land’ includes, on a farm or ranch--

          ‘(i) cropland;

          ‘(ii) rangeland;

          ‘(iii) grassland;

          ‘(iv) pasture land; and

          ‘(v) forest land that is an incidental part of an agricultural operation, as determined by the Secretary.

      ‘(3) INDIAN TRIBE- The term ‘Indian tribe’ has the meaning given the term in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b).

      ‘(4) PROGRAM- The term ‘program’ means the farmland protection program established under section 1238I(a).

‘SEC. 1238I. FARMLAND PROTECTION.

    ‘(a) IN GENERAL- The Secretary, acting through the Natural Resources Conservation Service, shall establish and carry out a farmland protection program under which the Secretary shall purchase conservation easements or other interests in eligible land that is subject to a pending offer from an eligible entity for the purpose of protecting topsoil by limiting nonagricultural uses of the land.

    ‘(b) CONSERVATION PLAN- Any highly erodible cropland for which a conservation easement or other interest is purchased under this subchapter shall be subject to the requirements of a conservation plan that requires, at the option of the Secretary, the conversion of the cropland to less intensive uses.

    ‘(c) COST SHARING-

      ‘(1) FARMLAND PROTECTION-

        ‘(A) SHARE PROVIDED UNDER THIS SUBSECTION- The share of the cost of purchasing a conservation easement or other interest in eligible land described in subsection (a) provided under section 1241(d) shall not exceed 50 percent of the appraised fair market value of the conservation easement or other interest in eligible land.

        ‘(B) SHARE NOT PROVIDED UNDER THIS SUBSECTION- As part of the share of the cost of purchasing a conservation easement or other interest in eligible land described in subsection (a) that is not provided under section 1241(d), an eligible entity may include a charitable donation by the private landowner from which the eligible land is to be purchased of not more than 25 percent of the fair market value of the conservation easement or other interest in eligible land.

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

‘SEC. 1238J. FARM VIABILITY PROGRAM.

    ‘(a) IN GENERAL- The Secretary may provide to eligible entities identified by the Secretary grants for use in carrying out farm viability programs developed by the eligible entities and approved by the Secretary.

    ‘(b) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to the Secretary to carry out this section such sums as are necessary for each of fiscal years 2002 through 2007.’.

    (b) CONFORMING AMENDMENTS-

      (1) IN GENERAL-

        (A) Section 388 of the Federal Agriculture Improvement and Reform Act of 1996 (16 U.S.C. 3830 note; Public Law 104-127) is repealed.

        (B) Section 211 of the Agriculture Risk Protection Act of 2000 (16 U.S.C. 3830 note; Public Law 106-224) is amended--

          (i) by striking subsection (a); and

          (ii) in subsection (b)--

            (I) by striking the subsection designation and the subsection heading;

            (II) by redesignating paragraphs (1), (2), and (3) as subsections (a), (b), and (c), respectively, and indenting appropriately;

            (III) in subsection (a) (as so redesignated), by redesignating subparagraphs (A), (B), and (C) as paragraphs (1), (2), and (3), respectively, and indenting appropriately;

            (IV) in subsection (b) (as so redesignated), by striking ‘ASSISTANCE’ and inserting ‘ASSISTANCE’; and

            (V) by striking ‘subsection’ each place it appears and inserting ‘section’.

      (2) EFFECT ON CONTRACTS- The amendment made by paragraph (1)(A) shall have no effect on any contract entered into under section 388 of the Federal Agriculture Improvement and Reform Act of 1996 (16 U.S.C. 3830 note) that is in effect as of the date of enactment of this Act.

SEC. 2504. RESOURCE CONSERVATION AND DEVELOPMENT PROGRAM.

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

‘Subtitle H--Resource Conservation and Development Program

‘SEC. 1528. DEFINITIONS.

    ‘In this subtitle:

      ‘(1) AREA PLAN- The term ‘area plan’ means a resource conservation and use plan developed through a planning process by a council for a designated area of 1 or more States, or of land under the jurisdiction of an Indian tribe, that includes 1 or more of the following elements:

        ‘(A) A land conservation element, the purpose of which is to control erosion and sedimentation.

        ‘(B) A water management element that provides 1 or more clear environmental or conservation benefits, the purpose of which is to provide for--

          ‘(i) the conservation, use, and quality of water, including irrigation and rural water supplies;

          ‘(ii) the mitigation of floods and high water tables;

          ‘(iii) the repair and improvement of reservoirs;

          ‘(iv) the improvement of agricultural water management; and

          ‘(v) the improvement of water quality.

        ‘(C) A community development element, the purpose of which is to improve--

          ‘(i) the development of resources-based industries;

          ‘(ii) the protection of rural industries from natural resource hazards;

          ‘(iii) the development of adequate rural water and waste disposal systems;

          ‘(iv) the improvement of recreation facilities;

          ‘(v) the improvement in the quality of rural housing;

          ‘(vi) the provision of adequate health and education facilities;

          ‘(vii) the satisfaction of essential transportation and communication needs; and

          ‘(viii) the promotion of food security, economic development, and education.

        ‘(D) A land management element, the purpose of which is--

          ‘(i) energy conservation, including the production of energy crops;

          ‘(ii) the protection of agricultural land, as appropriate, from conversion to other uses;

          ‘(iii) farmland protection; and

          ‘(iv) the protection of fish and wildlife habitats.

      ‘(2) BOARD- The term ‘Board’ means the Resource Conservation and Development Policy Advisory Board established under section 1533(a).

      ‘(3) COUNCIL- The term ‘council’ means a nonprofit entity (including an affiliate of the entity) operating in a State that is--

        ‘(A) established by volunteers or representatives of States, local units of government, Indian tribes, or local nonprofit organizations to carry out an area plan in a designated area; and

        ‘(B) designated by the chief executive officer or legislature of the State to receive technical assistance and financial assistance under this subtitle.

      ‘(4) DESIGNATED AREA- The term ‘designated area’ means a geographic area designated by the Secretary to receive technical assistance and financial assistance under this subtitle.

      ‘(5) FINANCIAL ASSISTANCE- The term ‘financial assistance’ means a grant or loan provided by the Secretary (or the Secretary and other Federal agencies) to, or a cooperative agreement entered into by the Secretary (or the Secretary and other Federal agencies) with, a council, or association of councils, to carry out an area plan in a designated area, including assistance provided for planning, analysis, feasibility studies, training, education, and other activities necessary to carry out the area plan.

      ‘(6) INDIAN TRIBE- The term ‘Indian tribe’ has the meaning given the term in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b).

      ‘(7) LOCAL UNIT OF GOVERNMENT- The term ‘local unit of government’ means--

        ‘(A) any county, city, town, township, parish, village, or other general-purpose subdivision of a State; and

        ‘(B) any local or regional special district or other limited political subdivision of a State, including any soil conservation district, school district, park authority, and water or sanitary district.

      ‘(8) NONPROFIT ORGANIZATION- The term ‘nonprofit organization’ means any organization that is--

        ‘(A) described in section 501(c) of the Internal Revenue Code of 1986; and

        ‘(B) exempt from taxation under section 501(a) of the Internal Revenue Code of 1986.

      ‘(9) PLANNING PROCESS- The term ‘planning process’ means actions taken by a council to develop and carry out an effective area plan in a designated area, including development of the area plan, goals, purposes, policies, implementation activities, evaluations and reviews, and the opportunity for public participation in the actions.

      ‘(10) PROJECT- The term ‘project’ means a project that is carried out by a council to achieve any of the elements of an area plan.

      ‘(11) SECRETARY- The term ‘Secretary’ means the Secretary of Agriculture.

      ‘(12) STATE- The term ‘State’ means--

        ‘(A) any State;

        ‘(B) the District of Columbia; or

        ‘(C) any territory or possession of the United States.

      ‘(13) TECHNICAL ASSISTANCE- The term ‘technical assistance’ means any service provided by the Secretary or agent of the Secretary, including--

        ‘(A) inventorying, evaluating, planning, designing, supervising, laying out, and inspecting projects;

        ‘(B) providing maps, reports, and other documents associated with the services provided;

        ‘(C) providing assistance for the long-term implementation of area plans; and

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

‘SEC. 1529. RESOURCE CONSERVATION AND DEVELOPMENT PROGRAM.

    ‘The Secretary shall establish a resource conservation and development program under which the Secretary shall provide technical assistance and financial assistance to councils to develop and carry out area plans and projects in designated areas--

      ‘(1) to conserve and improve the use of land, develop natural resources, and improve and enhance the social, economic, and environmental conditions in primarily rural areas of the United States; and

      ‘(2) to encourage and improve the capability of State, units of government, Indian tribes, nonprofit organizations, and councils to carry out the purposes described in paragraph (1).

‘SEC. 1530. SELECTION OF DESIGNATED AREAS.

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

‘SEC. 1531. POWERS OF THE SECRETARY.

    ‘In carrying out this subtitle, the Secretary may--

      ‘(1) provide technical assistance to any council to assist in developing and implementing an area plan for a designated area;

      ‘(2) cooperate with other departments and agencies of the Federal Government, States, local units of government, local Indian tribes, and local nonprofit organizations in conducting surveys and inventories, disseminating information, and developing area plans;

      ‘(3) assist in carrying out an area plan approved by the Secretary for any designated area by providing technical assistance and financial assistance to any council; and

      ‘(4) enter into agreements with councils in accordance with section 1532.

‘SEC. 1532. ELIGIBILITY; TERMS AND CONDITIONS.

    ‘(a) ELIGIBILITY- Technical assistance and financial assistance may be provided by the Secretary under this subtitle to any council to assist in carrying out a project specified in an area plan approved by the Secretary only if--

      ‘(1) the council agrees in writing--

        ‘(A) to carry out the project; and

        ‘(B) to finance or arrange for financing of any portion of the cost of carrying out the project for which financial assistance is not provided by the Secretary under this subtitle;

      ‘(2) the project is included in an area plan and is approved by the council;

      ‘(3) the Secretary determines that assistance is necessary to carry out the area plan;

      ‘(4) the project provided for in the area plan is consistent with any comprehensive plan for the area;

      ‘(5) the cost of the land or an interest in the land acquired or to be acquired under the plan by any State, local unit of government, Indian tribe, or local nonprofit organization is borne by the State, local unit of government, Indian tribe, or local nonprofit organization, respectively; and

      ‘(6) the State, local unit of government, Indian tribe, or local nonprofit organization participating in the area plan agrees to maintain and operate the project.

    ‘(b) LOANS-

      ‘(1) IN GENERAL- Subject to paragraphs (2) and (3), a loan made under this subtitle shall be made on such terms and conditions as the Secretary may prescribe.

      ‘(2) TERM- A loan for a project made under this subtitle shall have a term of not more than 30 years after the date of completion of the project.

      ‘(3) INTEREST RATE- A loan made under this subtitle shall bear interest at the average rate of interest paid by the United States on obligations of a comparable term, as determined by the Secretary of the Treasury.

    ‘(c) APPROVAL BY SECRETARY- Technical assistance and financial assistance under this subtitle may not be made available to a council to carry out an area plan unless the area plan has been submitted to and approved by the Secretary.

    ‘(d) WITHDRAWAL- The Secretary may withdraw technical assistance and financial assistance with respect to any area plan if the Secretary determines that the assistance is no longer necessary or that sufficient progress has not been made toward developing or implementing the elements of the area plan.

‘SEC. 1533. RESOURCE CONSERVATION AND DEVELOPMENT POLICY ADVISORY BOARD.

    ‘(a) ESTABLISHMENT- The Secretary shall establish within the Department of Agriculture a Resource Conservation and Development Policy Advisory Board.

    ‘(b) COMPOSITION-

      ‘(1) IN GENERAL- The Board shall be composed of at least 7 employees of the Department of Agriculture selected by the Secretary.

      ‘(2) CHAIRPERSON- A member of the Board shall be designated by the Secretary to serve as chairperson of the Board.

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

‘SEC. 1534. EVALUATION OF PROGRAM.

    ‘(a) IN GENERAL- The Secretary, in consultation with councils, shall evaluate the program established under this subtitle to determine whether the program is effectively meeting the needs of, and the purposes identified by, States, units of government, Indian tribes, nonprofit organizations, and councils participating in, or served by, the program.

    ‘(b) REPORT- Not later than June 30, 2005, the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report describing the results of the evaluation, together with any recommendations of the Secretary for continuing, terminating, or modifying the program.

‘SEC. 1535. LIMITATION ON ASSISTANCE.

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

‘SEC. 1536. SUPPLEMENTAL AUTHORITY OF THE SECRETARY.

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

‘SEC. 1537. AUTHORIZATION OF APPROPRIATIONS.

    ‘(a) IN GENERAL- There are authorized to be such sums as are necessary to carry out this subtitle.

    ‘(b) LOANS- The Secretary shall not use more than $15,000,000 of any funds made available for a fiscal year to make loans under this subtitle.

    ‘(c) AVAILABILITY- Funds appropriated to carry out this subtitle shall remain available until expended.’.

SEC. 2505. SMALL WATERSHED REHABILITATION PROGRAM.

    Section 14 of the Watershed Protection and Flood Prevention Act (16 U.S.C. 1012) is amended by striking subsection (h) and inserting the following:

    ‘(h) FUNDING-

      ‘(1) FUNDS OF COMMODITY CREDIT CORPORATION- In carrying out this section, of the funds of the Commodity Credit Corporation, the Secretary shall make available, to remain available until expended--

        ‘(A) $45,000,000 for fiscal year 2003;

        ‘(B) $50,000,000 for fiscal year 2004;

        ‘(C) $55,000,000 for fiscal year 2005;

        ‘(D) $60,000,000 for fiscal year 2006;

        ‘(E) $65,000,000 for fiscal year 2007; and

        ‘(F) $0 for fiscal year 2008.

      ‘(2) AUTHORIZATION OF APPROPRIATIONS- In addition to amounts made available under paragraph (1), there are authorized to be appropriated to the Secretary to carry out this section, to remain available until expended--

        ‘(A) $45,000,000 for fiscal year 2003;

        ‘(B) $55,000,000 for fiscal year 2004;

        ‘(C) $65,000,000 for fiscal year 2005;

        ‘(D) $75,000,000 for fiscal year 2006; and

        ‘(E) $85,000,000 for fiscal year 2007.’.

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

    Section 356 of the Federal Agriculture Improvement Act of 1996 (16 U.S.C. 5801 et seq.) is amended--

      (1) in subsection (c)--

        (A) by redesignating paragraphs (4) through (7) as paragraphs (5) through (8), respectively; and

        (B) by inserting after paragraph (3) the following:

      ‘(4) on the written approval of the Secretary, to use, license, or transfer symbols, slogans, and logos of the Foundation (exclusive of any symbol or logo of a governmental entity);’; and

      (2) in subsection (d), by adding at the end the following:

      ‘(3) USE OF SYMBOLS, SLOGANS, AND LOGOS OF THE FOUNDATION-

        ‘(A) IN GENERAL- The Secretary may authorize the Foundation to use, license, or transfer symbols, slogans, and logos of the Foundation.

        ‘(B) INCOME-

          ‘(i) IN GENERAL- All revenue received by the Foundation from the use, licensing, or transfer of symbols, slogans, and logos of the Foundation shall be transferred to the Secretary.

          ‘(ii) CONSERVATION OPERATIONS- The Secretary shall transfer all revenue received under clause (i) to the account within the Natural Resources Conservation Service that is used to carry out conservation operations.’.

SEC. 2507. DESERT TERMINAL LAKES.

    ‘(a) IN GENERAL- Subject to subsection (b), as soon as practicable after the date of enactment of this Act, the Secretary of Agriculture shall transfer $200,000,000 of the funds of the Commodity Credit Corporation to the Bureau of Reclamation Water and Related Resources Account, which funds shall--

      ‘(1) be used by the Secretary of the Interior, acting through the Commissioner of Reclamation, to provide water to at-risk natural desert terminal lakes; and

      ‘(2) remain available until expended.

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

Subtitle G--Conservation Corridor Demonstration Program

SEC. 2601. DEFINITIONS.

    In this subtitle:

      (1) DELMARVA PENINSULA- The term ‘Delmarva Peninsula’ means land in the States of Delaware, Maryland, and Virginia located on the east side of the Chesapeake Bay.

      (2) DEMONSTRATION PROGRAM- The term ‘demonstration program’ means the Conservation Corridor Demonstration Program established under this subtitle.

      (3) CONSERVATION CORRIDOR PLAN; PLAN- The terms ‘conservation corridor plan’ and ‘plan’ mean a conservation corridor plan required to be submitted and approved as a condition for participation in the demonstration program.

      (4) SECRETARY- The term ‘Secretary’ means the Secretary of Agriculture.

SEC. 2602. CONSERVATION CORRIDOR DEMONSTRATION PROGRAM.

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

    (b) SUBMISSION OF CONSERVATION CORRIDOR PLAN-

      (1) SUBMISSION AND PROPOSAL- To be eligible to participate in the demonstration program, a State, local government, or combination of States referred to in subsection (a) shall--

        (A) submit to the Secretary a conservation corridor plan that--

          (i) proposes specific criteria and commitment of resources in the geographic region designated in the plan; and

          (ii) describes how the linkage of Federal, State, and local resources will improve--

            (I) the economic viability of agriculture; and

            (II) the environmental integrity of the watersheds in the Delmarva Peninsula; and

        (B) demonstrate to the Secretary that, in developing the plan, the State, local government, or combination of States has solicited and taken into account the views of local residents.

      (2) DRAFT MEMORANDUM OF AGREEMENT- If the conservation corridor plan is submitted by more than 1 State, the plan shall provide a draft memorandum of agreement among entities in each submitting State.

    (c) REVIEW OF PLAN- Not later than 90 days after the date of receipt of a conservation corridor plan, the Secretary--

      (1) shall review the plan; and

      (2) may approve the plan for implementation under this subtitle if the Secretary determines that the plan meets the requirements specified in subsection (d).

    (d) CRITERIA FOR APPROVAL- The Secretary may approve a conservation corridor plan only if, as determined by the Secretary, the plan provides for each of the following:

      (1) VOLUNTARY ACTIONS- Actions taken under the plan--

        (A) are voluntary;

        (B) require the consent of willing landowners; and

        (C) provide a mechanism by which the landowner may withdraw such consent without adverse consequences other than the loss of any payments to the landowner conditioned on continued enrollment of the land.

      (2) LAND OF HIGH CONSERVATION VALUE- Criteria specified in the plan ensure that land enrolled in each conservation program incorporated through the plan are of exceptionally high conservation value, as determined by the Secretary.

      (3) NO EFFECT ON UNENROLLED LAND- The enrollment of land in a conservation program incorporated through the plan will neither--

        (A) adversely affect any adjacent land not so enrolled; nor

        (B) create any buffer zone on such unenrolled land.

      (4) GREATER BENEFITS- The conservation programs incorporated through the plan provide benefits greater than the benefits that would likely be achieved through individual application of the conservation programs.

      (5) SUFFICIENT STAFFING- Staffing, considering both Federal and non-Federal resources, is sufficient to ensure success of the plan.

SEC. 2603. IMPLEMENTATION OF CONSERVATION CORRIDOR PLAN.

    (a) MEMORANDUM OF AGREEMENT- On approval of a conservation corridor plan, the Secretary may enter into a memorandum of agreement with the State, local government, or combination of States that submitted the plan to--

      (1) guarantee specific program resources for implementation of the plan;

      (2) establish various compensation rates to the extent that the parties to the agreement consider justified; and

      (3) provide streamlined and integrated paperwork requirements.

    (b) CONTINUED COMPLIANCE WITH PLAN APPROVAL CRITERIA- The Secretary shall terminate the memorandum of agreement entered into under subsection (a) with respect to an approved conservation corridor plan and cease the provision of resources for implementation of the plan if the Secretary determines that, in the implementation of the plan--

      (1) the State, local government, or combination of States that submitted the plan has deviated from--

        (A) the plan;

        (B) the criteria specified in section 2602(d) on which approval of the plan was conditioned; or

        (C) the cost-sharing requirements of section 2604(a) or any other condition of the plan; or

      (2) the economic viability of agriculture in the geographic region designated in the plan is being hindered.

    (c) PROGRESS REPORT- At the end of the 3-year period that begins on the date on which funds are first provided with respect to a conservation corridor plan under the demonstration program, the State, local government, or combination of States that submitted the plan shall submit to the Secretary--

      (1) a report on the effectiveness of the activities carried out under the plan; and

      (2) an evaluation of the economic viability of agriculture in the geographic region designated in the plan.

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

SEC. 2604. FUNDING REQUIREMENTS.

    (a) COST SHARING-

      (1) REQUIRED NON-FEDERAL SHARE- Subject to paragraph (2), as a condition on the approval of a conservation corridor plan, the Secretary shall require the State and local participants to contribute financial resources sufficient to cover at least 50 percent of the total cost of the activities carried out under the plan.

      (2) EXCEPTION- The Secretary may reduce the cost-sharing requirement in the case of a specific project or activity under the demonstration program on good cause and on demonstration that the project or activity is likely to achieve extraordinary natural resource benefits.

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

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

Subtitle H--Funding and Administration

SEC. 2701. FUNDING AND ADMINISTRATION.

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

‘SEC. 1241. COMMODITY CREDIT CORPORATION.

    ‘(a) IN GENERAL- For each of fiscal years 2002 through 2007, the Secretary shall use the funds, facilities, and authorities of the Commodity Credit Corporation to carry out the following programs under subtitle D (including the provision of technical assistance):

      ‘(1) The conservation reserve program under subchapter B of chapter 1.

      ‘(2) The wetlands reserve program under subchapter C of chapter 1.

      ‘(3) The conservation security program under subchapter A of chapter 2.

      ‘(4) The farmland protection program under subchapter B of chapter 2, using, to the maximum extent practicable--

        ‘(A) $50,000,000 in fiscal year 2002;

        ‘(B) $100,000,000 in fiscal year 2003;

        ‘(C) $125,000,000 in each of fiscal years 2004 and 2005;

        ‘(D) $100,000,000 in fiscal year 2006; and

        ‘(E) $97,000,000 in fiscal year 2007.

      ‘(5) The grassland reserve program under subchapter C of chapter 2, using, to the maximum extent practicable $254,000,000 for the period of fiscal years 2003 through 2007.

      ‘(6) The environmental quality incentives program under chapter 4, using, to the maximum extent practicable--

        ‘(A) $400,000,000 in fiscal year 2002;

        ‘(B) $700,000,000 in fiscal year 2003;

        ‘(C) $1,000,000,000 in fiscal year 2004;

        ‘(D) $1,200,000,000 in each of fiscal years 2005 and 2006; and

        ‘(E) $1,300,000,000 in fiscal year 2007.

      ‘(7) The wildlife habitat incentives program under section 1240N, using, to the maximum extent practicable--

        ‘(A) $15,000,000 in fiscal year 2002;

        ‘(B) $30,000,000 in fiscal year 2003;

        ‘(C) $60,000,000 in fiscal year 2004; and

        ‘(D) $85,000,000 in each of fiscal years 2005 through 2007.

    ‘(b) SECTION 11- Nothing in this section affects the limit on expenditures for technical assistance imposed by section 11 of the Commodity Credit Corporation Charter Act (15 U.S.C. 714i).

    ‘(c) REGIONAL EQUITY- Before April 1 of each fiscal year, the Secretary shall give priority for funding under the conservation programs under subtitle D (excluding the conservation reserve program under subchapter B of chapter 1, the wetlands reserve program under subchapter C of chapter 1, and the conservation security program under subchapter A of chapter 2) to approved applications in any State that has not received, for the fiscal year, an aggregate amount of at least $12,000,000 for those conservation programs.

‘SEC. 1242. DELIVERY OF TECHNICAL ASSISTANCE.

    ‘(a) IN GENERAL- The Secretary shall provide technical assistance under this title to a producer eligible for that assistance--

      ‘(1) directly; or

      ‘(2) at the option of the producer, through a payment, as determined by the Secretary, to the producer for an approved third party, if available.

    ‘(b) CERTIFICATION OF THIRD-PARTY PROVIDERS-

      ‘(1) IN GENERAL- Not later than 180 days after the date of enactment of the Farm Security and Rural Investment Act of 2002, the Secretary shall, by regulation, establish a system for--

        ‘(A) approving individuals and entities to provide technical assistance to carry out programs under this title (including criteria for the evaluation of providers or potential providers of technical assistance); and

        ‘(B) establishing the amounts and methods for payments for that assistance.

      ‘(2) EXPERTISE- In promulgating regulations to carry out this subsection the Secretary shall ensure that persons with expertise in the technical aspects of conservation planning, watershed planning, environmental engineering (including commercial entities, nonprofit entities, State or local governments or agencies, and other Federal agencies), are eligible to become approved providers of the technical assistance.

      ‘(3) INTERIM ASSISTANCE-

        ‘(A) IN GENERAL- A person that has provided technical assistance in accordance with an agreement between the person and the Secretary before the date of enactment of the Farm Security and Rural Investment Act of 2002 may continue to provide technical assistance under this section until the date on which the Secretary establishes the system described in paragraph (1).

        ‘(B) EVALUATION- If a person described in subparagraph (A) seeks to continue to provide technical assistance after the date referred to in subparagraph (A), the Secretary shall evaluate the person using criteria referred to in paragraph (1).

      ‘(4) NON-FEDERAL ASSISTANCE- The Secretary may request the services of, and enter into cooperative agreements or contracts with, non-Federal entities to assist the Secretary in providing technical assistance necessary to develop and implement conservation programs under this title.’.

SEC. 2702. REGULATIONS.

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

    (b) APPLICABLE AUTHORITY- The promulgation of regulations under subsection (a) and administration of this title--

      (1) shall--

        (A) be carried out without regard to chapter 35 of title 44, United States Code (commonly known as the Paperwork Reduction Act); and

        (B) the Statement of Policy of the Secretary of Agriculture effective July 24, 1971 (36 Fed. Reg. 13804) relating to notices of proposed rulemaking and public participation in rulemaking; and

      (2) may--

        (A) be promulgated with an opportunity for notice and comment; or

        (B) if determined to be appropriate by the Secretary of Agriculture or the Commodity Credit Corporation, as an interim rule effective on publication with an opportunity for notice and comment.

    (c) CONGRESSIONAL REVIEW OF AGENCY RULEMAKING- In carrying out this section, the Secretary shall use the authority provided under section 808(2) of title 5, United States Code.

TITLE III--TRADE

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

SEC. 3001. UNITED STATES POLICY.

    Section 2 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1691) is amended--

      (1) in paragraph (4), by striking ‘and’ at the end;

      (2) in paragraph (5), by striking the period at the end and inserting ‘; and’; and

      (3) by adding at the end the following:

      ‘(6) prevent conflicts.’.

SEC. 3002. PROVISION OF AGRICULTURAL COMMODITIES.

    Section 202 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1722) is amended--

      (1) in subsection (b), by adding at the end the following:

      ‘(3) PROGRAM DIVERSITY- The Administrator shall--

        ‘(A) encourage eligible organizations to propose and implement program plans to address 1 or more aspects of the program under section 201; and

        ‘(B) consider proposals that incorporate a variety of program objectives and strategic plans based on the identification by eligible organizations of appropriate activities, consistent with section 201, to assist development of foreign countries.’;

      (2) in subsection (e)(1), by striking ‘not less than $10,000,000, and not more than $28,000,000,’ and inserting ‘not less than 5 percent nor more than 10 percent of the funds’; and

      (3) by adding at the end the following:

    ‘(h) STREAMLINED PROGRAM MANAGEMENT-

      ‘(1) IMPROVEMENTS- Not later than 1 year after the date of enactment of this subsection, the Administrator shall--

        ‘(A) streamline program procedures and guidelines under this title for agreements with eligible organizations for programs in 1 or more countries; and

        ‘(B) effective beginning with fiscal year 2004, to the maximum extent practicable, incorporate the changes into the procedures and guidelines for programs and the guidelines for resource requests.

      ‘(2) STREAMLINED PROCEDURES AND GUIDELINES- In carrying out paragraph (1), the Administrator shall make improvements in the Office of Food for Peace management systems that include--

        ‘(A) expedition of and greater consistency in the program review and approval process under this title;

        ‘(B) streamlining of information collection and reporting systems by identifying the critical information that needs to be monitored and reported on by eligible organizations; and

        ‘(C) for approved programs, provision of greater flexibility for an eligible organization to make modifications in program activities to achieve program results with streamlined procedures for reporting such modifications.

      ‘(3) CONSULTATION-

        ‘(A) IN GENERAL- Paragraphs (1) and (2) shall be carried out in accordance with section 205 and subsections (b) and (c) of section 207.

        ‘(B) CONSULTATION WITH CONGRESSIONAL COMMITTEES- Not later than 180 days after the date of enactment of this subsection, the Administrator shall consult with the Committee on Agriculture and the Committee on International Relations of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate on progress made in carrying out this subsection.

      ‘(4) REPORT- Not later than 270 days after the date of enactment of this subsection, the Administrator shall submit to the Committee on Agriculture and the Committee on International Relations of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report on the improvements made and planned upgrades in the information management, procurement, and financial management systems to administer this title.’.

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

    Section 203 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1723) is amended--

      (1) in the section heading, by striking ‘foreign’;

      (2) in subsection (a), by striking ‘the recipient country, or in a country’ and inserting ‘1 or more recipient countries, or 1 or more countries’;

      (3) in subsection (b)--

        (A) by striking ‘in recipient countries, or in countries’ and inserting ‘1 or more recipient countries, or in 1 or more countries’; and

        (B) by striking ‘foreign currency’;

      (4) in subsection (c)--

        (A) by striking ‘foreign currency’; and

        (B) by striking ‘the recipient country, or in a country’ and inserting ‘1 or more recipient countries, or in 1 or more countries’; and

      (5) in subsection (d)--

        (A) by striking ‘Foreign currencies’ and inserting ‘Proceeds’;

        (B) in paragraph (2)--

          (i) by striking ‘income generating’ and inserting ‘income-generating’; and

          (ii) by striking ‘the recipient country or within a country’ and inserting ‘1 or more recipient countries or within 1 or more countries’; and

        (C) in paragraph (3)--

          (i) by inserting a comma after ‘invested’; and

          (ii) by inserting a comma after ‘used’.

SEC. 3004. LEVELS OF ASSISTANCE.

    Section 204(a) of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1724(a)) is amended--

      (1) by striking ‘1996 through 2002’ each place it appears and inserting ‘2002 through 2007’;

      (2) in paragraph (1), by striking ‘2,025,000’ and inserting ‘2,500,000’; and

      (3) in paragraph (2), by striking ‘1,550,000 metric tons’ and inserting ‘1,875,000 metric tons’.

SEC. 3005. FOOD AID CONSULTATIVE GROUP.

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

SEC. 3006. MAXIMUM LEVEL OF EXPENDITURES.

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

SEC. 3007. ADMINISTRATION.

    Section 207 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1726a) is amended--

      (1) in subsection (a)--

        (A) by redesignating paragraph (2) as paragraph (3); and

        (B) by striking paragraph (1) and inserting the following:

      ‘(1) RECIPIENT COUNTRIES- A proposal to enter into a nonemergency food assistance agreement under this title shall identify the recipient country or countries that are the subject of the agreement.

      ‘(2) TIMING- Not later than 120 days after the date of receipt by the Administrator of a proposal submitted by an eligible organization under this title, the Administrator shall determine whether to accept the proposal.’;

      (2) in subsection (b), by striking ‘guideline’ each place it appears and inserting ‘guideline or annual policy guidance’; and

      (3) by adding at the end the following:

    ‘(e) TIMELY APPROVAL-

      ‘(1) IN GENERAL- The Administrator is encouraged to finalize program agreements and resource requests for programs under this section before the beginning of each fiscal year.

      ‘(2) REPORT- Not later than December 1 of each year, the Administrator shall submit to the Committee on Agriculture and the Committee on International Relations of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that contains--

        ‘(A) a list of programs, countries, and commodities approved to date for assistance under this section; and

        ‘(B) a statement of the total amount of funds approved to date for transportation and administrative costs under this section.’.

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

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

SEC. 3009. SALE PROCEDURE.

    (a) IN GENERAL- Section 403 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1733) is amended--

      (1) in subsection (e)--

        (A) by striking ‘In carrying’ and inserting the following:

      ‘(1) IN GENERAL- In carrying’; and

        (B) by adding at the end the following:

      ‘(2) SALE PRICE- Sales of agricultural commodities described in paragraph (1) shall be made at a reasonable market price in the economy where the agricultural commodity is to be sold, as determined by the Secretary or the Administrator, as appropriate.’; and

      (2) by adding at the end the following:

    ‘(l) SALE PROCEDURE-

      ‘(1) IN GENERAL- Subsections (b) and (h) shall apply to sales of commodities in recipient countries to generate proceeds to carry out projects under--

        ‘(A) titles I and II;

        ‘(B) section 416(b) of the Agricultural Act of 1949 (7 U.S.C. 1431(b)); and

        ‘(C) the Food for Progress Act of 1985 (7 U.S.C. 1736o).

      ‘(2) CURRENCY- A sale described in paragraph (1) may be made in United States dollars or other currencies.’.

    (b) CONFORMING AMENDMENTS-

      (1) Section 416(b) of the Agricultural Act of 1949 (7 U.S.C. 1431(b)) is amended by adding at the end the following:

      ‘(10) SALE PROCEDURE- In approving sales of commodities under this subsection, the Secretary shall follow the sale procedure described in section 403(l) of the Agricultural Trade Development and Assistance Act of 1954.’.

      (2) Subsection (f) of the Food for Progress Act of 1985 (7 U.S.C. 1736o(f)) is amended by adding at the end the following:

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

SEC. 3010. PREPOSITIONING.

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

SEC. 3011. TRANSPORTATION AND RELATED COSTS.

    Section 407(c)(1) of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1736a(c)(1)) is amended--

      (1) by striking ‘The Administrator’ and inserting the following:

        ‘(A) IN GENERAL- The Administrator’; and

      (2) by adding at the end the following:

      ‘(B) CERTAIN COMMODITIES MADE AVAILABLE FOR NONEMERGENCY ASSISTANCE- In the case of agricultural commodities made available for nonemergency assistance under title II for least developed countries that meet the poverty and other eligibility criteria established by the International Bank for Reconstruction and Development for financing under the International Development Association, the Administrator may pay the transportation costs incurred in moving the agricultural commodities from designated points of entry or ports of entry abroad to storage and distribution sites and associated storage and distribution costs.’.

SEC. 3012. EXPIRATION DATE.

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

SEC. 3013. MICRONUTRIENT FORTIFICATION PROGRAMS.

    Section 415 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1736g-2) is amended--

      (1) in the section heading, by striking ‘pilot program.’ and inserting ‘programs.’;

      (2) in subsection (a)--

        (A) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively, and adjusting the margins appropriately;

        (B) by striking the first sentence and inserting the following:

      ‘(1) PROGRAMS- Not later than September 30, 2003, the Administrator, in consultation with the Secretary, shall establish micronutrient fortification programs.’; and

        (C) in the second sentence, by striking ‘The purpose of the program’ and inserting the following:

      ‘(2) PURPOSE- The purpose of a program’; and

        (D) in paragraph (2) (as designated by subparagraph (C))--

          (i) in subparagraph (A), by striking ‘and’ at the end;

          (ii) in subparagraph (B)--

            (I) by striking ‘whole’; and

            (II) by striking the period at the end and inserting ‘; and’; and

          (iii) by adding at the end the following:

        ‘(C) assess and apply technologies and systems to improve and ensure the quality, shelf life, bioavailability, and safety of fortified food aid commodities, and products of those commodities, that are provided to developing countries, by using the same mechanism that was used to assess the micronutrient fortification program in the report entitled ‘Micronutrient Compliance Review of Fortified P.L. 480 Commodities’, published October 2001 with funds from the Bureau for Humanitarian Response of the United States Agency for International Development.’;

      (3) in subsection (b), by striking ‘the pilot program’ and inserting ‘a program under this section’;

      (4) in the first sentence of subsection (c)--

        (A) by striking ‘the pilot program, whole’ and inserting ‘a program,’;

        (B) by striking ‘the pilot program may’ and inserting ‘a program may’;

        (C) by striking ‘including’ and inserting ‘such as’; and

        (D) by striking ‘and iodine’ and inserting ‘iodine, and folic acid’; and

      (5) in subsection (d)--

        (A) by striking ‘the pilot program’ and inserting ‘programs’; and

        (B) by striking ‘2002’ and inserting ‘2007’.

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

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

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

    ‘(a) DEFINITIONS- In this section:

      ‘(1) CARIBBEAN BASIN COUNTRY- The term ‘Caribbean Basin country’ means a country eligible for designation as a beneficiary country under section 212 of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2702).

      ‘(2) EMERGING MARKET- The term ‘emerging market’ means a country that the Secretary determines--

        ‘(A) is taking steps toward a market-oriented economy through the food, agriculture, or rural business sectors of the economy of the country; and

        ‘(B) has the potential to provide a viable and significant market for United States agricultural commodities or products of United States agricultural commodities.

      ‘(3) MIDDLE INCOME COUNTRY- The term ‘middle income country’ means a country that has developed economically to the point at which the country does not receive bilateral development assistance from the United States.

      ‘(4) SUB-SAHARAN AFRICAN COUNTRY- The term ‘sub-Saharan African country’ has the meaning given the term in section 107 of the Trade and Development Act of 2000 (19 U.S.C. 3706).

    ‘(b) PROVISION- Notwithstanding any other provision of law, to further assist developing countries, middle-income countries, emerging markets, sub-Saharan African countries, and Caribbean Basin countries to increase farm production and farmer incomes, the President may--

      ‘(1) establish and administer a program, to be known as the ‘John Ogonowski Farmer-to-Farmer Program’, of farmer-to-farmer assistance between the United States and such countries to assist in--

        ‘(A) increasing food production and distribution; and

        ‘(B) improving the effectiveness of the farming and marketing operations of agricultural producers in those countries;

      ‘(2) use United States agricultural producers, agriculturalists, colleges and universities (including historically black colleges and universities, land grant colleges or universities, and foundations maintained by colleges or universities), private agribusinesses, private organizations (including grassroots organizations with an established and demonstrated capacity to carry out such a bilateral exchange program), private corporations, and nonprofit farm organizations to work in conjunction with agricultural producers and farm organizations in those countries, on a voluntary basis--

        ‘(A) to improve agricultural and agribusiness operations and agricultural systems in those countries, including improving--

          ‘(i) animal care and health;

          ‘(ii) field crop cultivation;

          ‘(iii) fruit and vegetable growing;

          ‘(iv) livestock operations;

          ‘(v) food processing and packaging;

          ‘(vi) farm credit;

          ‘(vii) marketing;

          ‘(viii) inputs; and

          ‘(ix) agricultural extension; and

        ‘(B) to strengthen cooperatives and other agricultural groups in those countries;

      ‘(3) transfer the knowledge and expertise of United States agricultural producers and businesses, on an individual basis, to those countries while enhancing the democratic process by supporting private and public agriculturally related organizations that request and support technical assistance activities through cash and in-kind services;

      ‘(4) to the maximum extent practicable, make grants to or enter into contracts or other cooperative agreements with private voluntary organizations, cooperatives, land grant universities, private agribusiness, or nonprofit farm organizations to carry out this section (except that any such contract or other agreement may obligate the United States to make outlays only to the extent that the budget authority for such outlays is available under subsection (d) or has otherwise been provided in advance in appropriation Acts);

      ‘(5) coordinate programs established under this section with other foreign assistance programs and activities carried out by the United States; and

      ‘(6) to the extent that local currencies can be used to meet the costs of a program established under this section, augment funds of the United States that are available for such a program through the use, within the country in which the program is being conducted, of--

        ‘(A) foreign currencies that accrue from the sale of agricultural commodities and products under this Act; and

        ‘(B) local currencies generated from other types of foreign assistance activities.

    ‘(c) SPECIAL EMPHASIS ON SUB-SAHARAN AFRICAN AND CARIBBEAN BASIN COUNTRIES-

      ‘(1) FINDINGS- Congress finds that--

        ‘(A) agricultural producers in sub-Saharan African and Caribbean Basin countries need training in agricultural techniques that are appropriate for the majority of eligible agricultural producers in those countries, including training in--

          ‘(i) standard growing practices;

          ‘(ii) insecticide and sanitation procedures; and

          ‘(iii) other agricultural methods that will produce increased yields of more nutritious and healthful crops;

        ‘(B) agricultural producers in the United States (including African-American agricultural producers) and banking and insurance professionals have agribusiness expertise that would be invaluable for agricultural producers in sub-Saharan African and Caribbean Basin countries;

        ‘(C) a commitment by the United States is appropriate to support the development of a comprehensive agricultural skills training program for those agricultural producers that focuses on--

          ‘(i) improving knowledge of insecticide and sanitation procedures to prevent crop destruction;

          ‘(ii) teaching modern agricultural techniques that would facilitate a continual analysis of crop production, including--

            ‘(I) the identification and development of standard growing practices; and

            ‘(II) the establishment of systems for recordkeeping;

          ‘(iii) the use and maintenance of agricultural equipment that is appropriate for the majority of eligible agricultural producers in sub-Saharan African or Caribbean Basin countries;

          ‘(iv) the expansion of small agricultural operations into agribusiness enterprises by increasing access to credit for agricultural producers through--

            ‘(I) the development and use of village banking systems; and

            ‘(II) the use of agricultural risk insurance pilot products; and

          ‘(v) marketing crop yields to prospective purchasers (including businesses and individuals) for local needs and export; and

        ‘(D) programs that promote the exchange of agricultural knowledge and expertise through the exchange of American and foreign agricultural producers have been effective in promoting improved agricultural techniques and food security and the extension of additional resources to such farmer-to-farmer exchanges is warranted.

      ‘(2) GOALS FOR PROGRAMS CARRIED OUT IN SUB-SAHARAN AFRICAN AND CARIBBEAN COUNTRIES- The goals of programs carried out under this section in sub-Saharan African and Caribbean Basin countries shall be--

        ‘(A) to expand small agricultural operations in those countries into agribusiness enterprises by increasing access to credit for agricultural producers through--

          ‘(i) the development and use of village banking systems; and

          ‘(ii) the use of agricultural risk insurance pilot products;

        ‘(B) to provide training to agricultural producers in those countries that will--

          ‘(i) enhance local food security; and

          ‘(ii) help mitigate and alleviate hunger;

        ‘(C) to provide training to agricultural producers in those countries in groups to encourage participants to share and pass on to other agricultural producers in the home communities of the participants, the information and skills obtained from the training, rather than merely retaining the information and skills for the personal enrichment of the participants; and

        ‘(D) to maximize the number of beneficiaries of the programs in sub-Saharan African and Caribbean Basin countries.

    ‘(d) MINIMUM FUNDING- Notwithstanding any other provision of law, in addition to any funds that may be specifically appropriated to carry out this section, not less than 0.5 percent of the amounts made available for each of fiscal years 2002 through 2007 to carry out this Act shall be used to carry out programs under this section, with--

      ‘(1) not less than 0.2 percent to be used for programs in developing countries; and

      ‘(2) not less than 0.1 percent to be used for programs in sub-Saharan African and Caribbean Basin countries.

    ‘(e) AUTHORIZATION OF APPROPRIATIONS-

      ‘(1) IN GENERAL- There is authorized to be appropriated to carry out programs under this section in sub-Saharan African and Caribbean Basin countries $10,000,000 for each of fiscal years 2002 through 2007.

      ‘(2) ADMINISTRATIVE COSTS- Not more than 5 percent of the funds made available for a fiscal year under paragraph (1) may be used to pay administrative costs incurred in carrying out programs in sub-Saharan African and Caribbean Basin countries.’.

Subtitle B--Agricultural Trade Act of 1978

SEC. 3101. EXPORTER ASSISTANCE INITIATIVE.

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

‘SEC. 107. EXPORTER ASSISTANCE INITIATIVE.

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

SEC. 3102. EXPORT CREDIT GUARANTEE PROGRAM.

    (a) TERMS OF SUPPLIER CREDIT PROGRAM- Section 202(a) of the Agricultural Trade Act of 1978 (7 U.S.C. 5622(a)) is amended by adding at the end the following:

      ‘(3) EXTENDED SUPPLIER CREDITS-

        ‘(A) IN GENERAL- Subject to the appropriation of funds under subparagraph (B), in carrying out this section, the Commodity Credit Corporation may issue guarantees for the repayment of credit made available for a period of more than 180 days, but not more than 360 days, by a United States exporter to a buyer in a foreign country.

        ‘(B) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated such sums as are necessary to fund the additional costs attributable to the portion of any guarantee issued under this paragraph to cover the repayment of credit beyond the initial 180-day period.’.

    (b) PROCESSED AND HIGH-VALUE PRODUCTS- Section 202(k)(1) of the Agricultural Trade Act of 1978 (7 U.S.C. 5622(k)(1)) is amended by striking ‘, 2001, and 2002’ and inserting ‘through 2007’.

    (c) REPORT- Section 202 of the Agricultural Trade Act of 1978 (7 U.S.C. 5622) is amended by adding at the end the following:

    ‘(l) CONSULTATION ON AGRICULTURAL EXPORT CREDIT PROGRAMS- The Secretary and the United States Trade Representative shall consult on a regular basis with the Committee on Agriculture, and the Committee on International Relations, of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate on the status of multilateral negotiations regarding agricultural export credit programs.’.

    (d) REAUTHORIZATION- Section 211(b)(1) of the Agricultural Trade Act of 1978 (7 U.S.C. 5641(b)(1)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 3103. MARKET ACCESS PROGRAM.

    Section 211(c) of the Agricultural Trade Act of 1978 (7 U.S.C. 5641(c)) is amended--

      (1) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively, and indenting appropriately;

      (2) by striking ‘The Commodity’ and inserting the following:

      ‘(1) IN GENERAL- The Commodity’;

      (3) by striking subparagraph (A) (as so redesignated) and inserting the following:

        ‘(A) in addition to any funds that may be specifically appropriated to implement a market access program, not more than $90,000,000 for fiscal year 2001, $100,000,000 for fiscal year 2002, $110,000,000 for fiscal year 2003, $125,000,000 for fiscal year 2004, $140,000,000 for fiscal year 2005, and $200,000,000 for each of fiscal years 2006 and 2007, of the funds of, or an equal value of commodities owned by, the Commodity Credit Corporation; and’; and

      (4) by adding at the end the following:

      ‘(2) PROGRAM PRIORITIES- In providing any amount of funds made available under paragraph (1)(A) for any fiscal year that is in excess of the amount made available under paragraph (1)(A) for fiscal year 2001, the Secretary shall, to the maximum extent practicable--

        ‘(A) give equal consideration to--

          ‘(i) proposals submitted by organizations that were participating organizations in prior fiscal years; and

          ‘(ii) proposals submitted by eligible trade organizations that have not previously participated in the program established under this title; and

        ‘(B) give equal consideration to--

          ‘(i) proposals submitted for activities in emerging markets; and

          ‘(ii) proposals submitted for activities in markets other than emerging markets.’.

SEC. 3104. EXPORT ENHANCEMENT PROGRAM.

    (a) IN GENERAL- Section 301(e)(1)(G) of the Agricultural Trade Act of 1978 (7 U.S.C. 5651(e)(1)(G)) is amended by striking ‘fiscal year 2002’ and inserting ‘each of fiscal years 2002 through 2007’.

    (b) UNFAIR TRADE PRACTICES- Section 102(5)(A) of the Agricultural Trade Act of 1978 (7 U.S.C. 5602(5)(A)) is amended--

      (1) in clause (i), by striking ‘or’ at the end; and

      (2) by striking clause (ii) and inserting the following:

          ‘(ii) in the case of a monopolistic state trading enterprise engaged in the export sale of an agricultural commodity, implements a pricing practice that is inconsistent with sound commercial practice;

          ‘(iii) provides a subsidy that--

            ‘(I) decreases market opportunities for United States exports; or

            ‘(II) unfairly distorts an agricultural market to the detriment of United States exporters;

          ‘(iv) imposes an unfair technical barrier to trade, including--

            ‘(I) a trade restriction or commercial requirement (such as a labeling requirement) that adversely affects a new technology (including biotechnology); and

            ‘(II) an unjustified sanitary or phytosanitary restriction (including any restriction that, in violation of the Uruguay Round Agreements, is not based on scientific principles;

          ‘(v) imposes a rule that unfairly restricts imports of United States agricultural commodities in the administration of tariff rate quotas; or

          ‘(vi) fails to adhere to, or circumvents any obligation under, any provision of a trade agreement with the United States.’.

SEC. 3105. FOREIGN MARKET DEVELOPMENT COOPERATOR PROGRAM.

    (a) VALUE-ADDED PRODUCTS-

      (1) IN GENERAL- Section 702(a) of the Agricultural Trade Act of 1978 (7 U.S.C. 5722(a)) is amended by inserting ‘, with a continued significant emphasis on the importance of the export of value-added United States agricultural products into emerging markets’ after ‘products’.

      (2) REPORT TO CONGRESS- Section 702 of the Agricultural Trade Act of 1978 (7 U.S.C. 5722) is amended by adding at the end the following:

    ‘(c) REPORT TO CONGRESS- The Secretary shall annually submit to the Committee on Agriculture and the Committee on International Relations of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report on activities under this section describing the amount of funding provided, the types of programs funded, the value-added products that have been targeted, and the foreign markets for those products that have been developed.’.

    (b) FUNDING- Section 703 of the Agricultural Trade Act of 1978 (7 U.S.C. 5723) is amended to read as follows:

‘SEC. 703. FUNDING.

    ‘(a) IN GENERAL- To carry out this title, the Secretary shall use funds of the Commodity Credit Corporation, or commodities of the Commodity Credit Corporation of a comparable value, in the amount of $34,500,000 for each of fiscal years 2002 through 2007.

    ‘(b) PROGRAM PRIORITIES- In providing any amount of funds or commodities made available under subsection (a) for any fiscal year that is in excess of the amount made available under this section for fiscal year 2001, the Secretary shall, to the maximum extent practicable--

      ‘(1) give equal consideration to--

        ‘(A) proposals submitted by organizations that were participating organizations in prior fiscal years; and

        ‘(B) proposals submitted by eligible trade organizations that have not previously participated in the program established under this title; and

      ‘(2) give equal consideration to--

        ‘(A) proposals submitted for activities in emerging markets; and

        ‘(B) proposals submitted for activities in markets other than emerging markets.’.

SEC. 3106. FOOD FOR PROGRESS.

    (a) IN GENERAL- Subsections (f)(3), (k), and (l)(1) of the Food for Progress Act of 1985 (7 U.S.C. 1736o) are each amended by striking ‘2002’ and inserting ‘2007’.

    (b) DEFINITIONS; PROGRAM-

      (1) IN GENERAL- The Food for Progress Act of 1985 (7 U.S.C. 1736o) is amended by striking subsections (b) and (c) and inserting the following:

    ‘(b) DEFINITIONS- In this section:

      ‘(1) COOPERATIVE- The term ‘cooperative’ has the meaning given the term in section 402 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1732).

      ‘(2) CORPORATION- The term ‘Corporation’ means the Commodity Credit Corporation.

      ‘(3) DEVELOPING COUNTRY- The term ‘developing country’ has the meaning given the term in section 402 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1732).

      ‘(4) ELIGIBLE COMMODITY- The term ‘eligible commodity’ means an agricultural commodity, or a product of an agricultural commodity, in inventories of the Corporation or acquired by the President or the Corporation for disposition through commercial purchases under a program authorized under this section.

      ‘(5) ELIGIBLE ENTITY- The term ‘eligible entity’ means--

        ‘(A) the government of an emerging agricultural country;

        ‘(B) an intergovernmental organization;

        ‘(C) a private voluntary organization;

        ‘(D) a nonprofit agricultural organization or cooperative;

        ‘(E) a nongovernmental organization; and

        ‘(F) any other private entity.

      ‘(6) FOOD SECURITY- The term ‘food security’ means access by all people at all times to sufficient food and nutrition for a healthy and productive life.

      ‘(7) NONGOVERNMENTAL ORGANIZATION- The term ‘nongovernmental organization’ has the meaning given the term in section 402 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1732).

      ‘(8) PRIVATE VOLUNTARY ORGANIZATION- The term ‘private voluntary organization’ has the meaning given the term in section 402 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1732).

      ‘(9) PROGRAM- The term ‘program’ means a food assistance or development initiative proposed by an eligible entity and approved by the President under this section.

    ‘(c) PROGRAM- In order to use the food resources of the United States more effectively in support of developing countries, and countries that are emerging democracies that have made commitments to introduce or expand free enterprise elements in their agricultural economies through changes in commodity pricing, marketing, input availability, distribution, and private sector involvement, the President may enter into agreements with eligible entities to furnish to the countries eligible commodities made available under subsections (e) and (f).’.

      (2) CONFORMING AMENDMENTS- The Food for Progress Act of 1985 (7 U.S.C. 136o) is amended--

        (A) in the first sentence of subsection (d), by striking ‘food’;

        (B) in subsection (l)(2), by striking ‘agricultural’;

        (C) in subsection (m)(1), by striking ‘these’;

        (D) in subsections (d), (e), (f), (h), (j), (l), and (m), by striking ‘commodities’ each place it appears and inserting ‘eligible commodities’;

        (E) in subsections (e), (f), and (l), by striking ‘Commodity Credit Corporation’ each place it appears and inserting ‘Corporation’; and

        (F) by striking subsection (o).

    (c) CONSIDERATION FOR AGREEMENTS- Subsection (d) of the Food for Progress Act of 1985 (7 U.S.C. 1736o(d)) is amended by striking ‘(d) In determining’ and inserting ‘(d) CONSIDERATION FOR AGREEMENTS- In determining’.

    (d) FUNDING OF ELIGIBLE COMMODITIES- Subsection (e) of the Food for Progress Act of 1985 (7 U.S.C. 1736o(e)) is amended--

      (1) by striking ‘(e)’ and inserting ‘(e) FUNDING OF ELIGIBLE COMMODITIES- ’;

      (2) in paragraph (2), by inserting ‘, and subsection (g) does not apply to eligible commodities furnished on a grant basis or on credit terms under that title’ before the period at the end; and

      (3) by adding at the end the following:

      ‘(5) NO EFFECT ON DOMESTIC PROGRAMS- The President shall not make an eligible commodity available for disposition under this section in any amount that will reduce the amount of the eligible commodity that is traditionally made available through donations to domestic feeding programs or agencies, as determined by the President.’.

    (e) PROVISION OF ELIGIBLE COMMODITIES TO DEVELOPING COUNTRIES- Subsection (f) of the Food for Progress Act of 1985 (7 U.S.C. 1736o(f)) is amended--

      (1) by striking ‘(f)’ and inserting ‘(f) PROVISION OF ELIGIBLE COMMODITIES TO DEVELOPING COUNTRIES- ’; and

      (2) in paragraph (3), by striking ‘$30,000,000 (or in the case of fiscal year 1999, $35,000,000)’ and inserting ‘$40,000,000’.

    (f) MINIMUM TONNAGE- The Food for Progress Act of 1985 is amended by striking subsection (g) (7 U.S.C. 1736o(g)) and inserting the following:

    ‘(g) MINIMUM TONNAGE- Subject to subsection (f)(3), not less than 400,000 metric tons of eligible commodities may be provided under this section for the program for each of fiscal years 2002 through 2007.’.

    (g) PROHIBITION ON RESALE OR TRANSSHIPMENT OF ELIGIBLE COMMODITIES- Subsection (h) of the Food for Progress Act of 1985 (7 U.S.C. 1736o(h)) is amended by striking ‘(h) An agreement’ and inserting ‘(h) PROHIBITION ON RESALE OR TRANSSHIPMENT OF ELIGIBLE COMMODITIES- An agreement’.

    (h) DISPLACEMENT OF UNITED STATES COMMERCIAL SALES- Subsection (i) of the Food for Progress Act of 1985 (7 U.S.C. 1736o(i)) is amended by striking ‘(i) In entering’ and inserting ‘(i) DISPLACEMENT OF UNITED STATES COMMERCIAL SALES- In entering’.

    (i) MULTICOUNTRY OR MULTIYEAR BASIS- Subsection (j) of the Food for Progress Act of 1985 (7 U.S.C. 1736o(j)) is amended--

      (1) by striking ‘(j) In carrying out this section, the President may,’ and inserting the following: ‘(j) MULTICOUNTRY OR MULTIYEAR BASIS-

      ‘(1) IN GENERAL- In carrying out this section, the President,’;

      (2) by striking ‘approve’ and inserting ‘is encouraged to approve’;

      (3) by striking ‘multiyear’ and inserting ‘multicountry or multiyear’; and

      (4) by adding at the end the following:

      ‘(2) DEADLINE FOR PROGRAM ANNOUNCEMENTS- Before the beginning of any fiscal year, the President shall, to the maximum extent practicable--

        ‘(A) make all determinations concerning program agreements and resource requests for programs under this section; and

        ‘(B) announce those determinations.

      ‘(3) REPORT- Not later than December 1 of each fiscal year, the President shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a list of programs, countries, and eligible commodities, and the total amount of funds for transportation and administrative costs, approved to date for the fiscal year under this section.’.

    (j) EFFECTIVE AND TERMINATION DATES- Subsection (k) of the Food for Progress Act of 1985 (7 U.S.C. 1736o(k)) is amended by striking ‘(k) This section’ and inserting ‘(k) EFFECTIVE AND TERMINATION DATES- This section’.

    (k) ADMINISTRATIVE EXPENSES- Subsection (l) of the Food for Progress Act of 1985 (7 U.S.C. 1736o(l)) is amended--

      (1) by striking ‘(l)’ and inserting ‘(l) ADMINISTRATIVE EXPENSES- ’;

      (2) in paragraph (1), by striking ‘$10,000,000’ and inserting ‘$15,000,000’;

      (3) in paragraph (3), by striking ‘local currencies’ and inserting ‘proceeds’; and

      (4) by adding at the end the following:

      ‘(4) HUMANITARIAN OR DEVELOPMENT PURPOSES- The Secretary may authorize the use of proceeds to pay the costs incurred by an eligible entity under this section for--

        ‘(A)(i) programs targeted at hunger and malnutrition; or

        ‘(ii) development programs involving food security;

        ‘(B) transportation, storage, and distribution of eligible commodities provided under this section; and

        ‘(C) administration, sales, monitoring, and technical assistance.’.

    (l) PRESIDENTIAL APPROVAL- Subsection (m) of the Food for Progress Act of 1985 (7 U.S.C. 1736o(m)) is amended by striking ‘(m) In carrying’ and inserting ‘(m) PRESIDENTIAL APPROVAL- In carrying’.

    (m) PROGRAM MANAGEMENT- The Food for Progress Act of 1985 is amended by striking subsection (n) (7 U.S.C. 1736o(n)) and inserting the following:

    ‘(n) PROGRAM MANAGEMENT-

      ‘(1) IN GENERAL- The President shall ensure, to the maximum extent practicable, that each eligible entity participating in 1 or more programs under this section--

        ‘(A) uses eligible commodities made available under this section--

          ‘(i) in an effective manner;

          ‘(ii) in the areas of greatest need; and

          ‘(iii) in a manner that promotes the purposes of this section;

        ‘(B) in using eligible commodities, assesses and takes into account the needs of recipient countries and the target populations of the recipient countries;

        ‘(C) works with recipient countries, and indigenous institutions or groups in recipient countries, to design and carry out mutually acceptable programs authorized under this section; and

        ‘(D) monitors and reports on the distribution or sale of eligible commodities provided under this section using methods that, as determined by the President, facilitate accurate and timely reporting.

      ‘(2) REQUIREMENTS-

        ‘(A) IN GENERAL- Not later than 270 days after the date of enactment of this paragraph, the President shall review and, as necessary, make changes in regulations and internal procedures designed to streamline, improve, and clarify the application, approval, and implementation processes pertaining to agreements under this section.

        ‘(B) CONSIDERATIONS- In conducting the review, the President shall consider--

          ‘(i) revising procedures for submitting proposals;

          ‘(ii) developing criteria for program approval that separately address the objectives of the program;

          ‘(iii) pre-screening organizations and proposals to ensure that the minimum qualifications are met;

          ‘(iv) implementing e-government initiatives and otherwise improving the efficiency of the proposal submission and approval processes;

          ‘(v) upgrading information management systems;

          ‘(vi) improving commodity and transportation procurement processes; and

          ‘(vii) ensuring that evaluation and monitoring methods are sufficient.

        ‘(C) CONSULTATIONS- Not later than 1 year after the date of enactment of this paragraph, the President shall consult with the Committee on Agriculture, and the Committee on International Relations, of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate on changes made in regulations and procedures.

      ‘(3) REPORTS- Each eligible entity that enters into an agreement under this section shall submit to the President, at such time as the President may request, a report containing such information as the President may request relating to the use of eligible commodities and funds furnished to the eligible entity under this section.’.

SEC. 3107. MCGOVERN-DOLE INTERNATIONAL FOOD FOR EDUCATION AND CHILD NUTRITION PROGRAM.

    (a) DEFINITION OF AGRICULTURAL COMMODITY- In this section, the term ‘agricultural commodity’ means an agricultural commodity, or a product of an agricultural commodity, that is produced in the United States.

    (b) PROGRAM- Subject to subsection (l), the President may establish a program, to be known as ‘McGovern-Dole International Food for Education and Child Nutrition Program’, requiring the procurement of agricultural commodities and the provision of financial and technical assistance to carry out--

      (1) preschool and school food for education programs in foreign countries to improve food security, reduce the incidence of hunger, and improve literacy and primary education, particularly with respect to girls; and

      (2) maternal, infant, and child nutrition programs for pregnant women, nursing mothers, infants, and children who are 5 years of age or younger.

    (c) ELIGIBLE COMMODITIES AND COST ITEMS- Notwithstanding any other provision of law--

      (1) any agricultural commodity is eligible to be provided under this section;

      (2) as necessary to achieve the purposes of this section, funds appropriated under this section may be used to pay--

        (A)(i) the cost of acquiring agricultural commodities;

        (ii) the costs associated with packaging, enrichment, preservation, and fortification of agricultural commodities;

        (iii) the processing, transportation, handling, and other incidental costs up to the time of the delivery of agricultural commodities free on board vessels in United States ports;

        (iv) the vessel freight charges from United States ports or designated Canadian transshipment ports, as determined by the Secretary, to designated ports of entry abroad;

        (v) the costs associated with transporting agricultural commodities from United States ports to designated points of entry abroad in the case--

          (I) of landlocked countries;

          (II) of ports that cannot be used effectively because of natural or other disturbances;

          (III) of the unavailability of carriers to a specific country; or

          (IV) of substantial savings in costs or time that may be effected by the utilization of points of entry other than ports; and

        (vi) the charges for general average contributions arising out of the ocean transport of agricultural commodities transferred pursuant thereto;

        (B) all or any part of the internal transportation, storage, and handling costs incurred in moving the eligible commodity, if the President determines that--

          (i) payment of the costs is appropriate; and

          (ii) the recipient country is a low income, net food-importing country that--

            (I) meets the poverty criteria established by the International Bank for Reconstruction and Development for Civil Works Preference; and

            (II) has a national government that is committed to or is working toward, through a national action plan, the goals of the World Declaration on Education for All convened in 1990 in Jomtien, Thailand, and the followup Dakar Framework for Action of the World Education Forum, convened in 2000;

        (C) the costs of activities conducted in the recipient countries by a nonprofit voluntary organization, cooperative, or intergovernmental agency or organization that would enhance the effectiveness of the activities implemented by such entities under this section; and

        (D) the costs of meeting the allowable administrative expenses of private voluntary organizations, cooperatives, or intergovernmental organizations that are implementing activities under this section.

    (d) GENERAL AUTHORITIES- The President shall designate 1 or more Federal agencies to--

      (1) implement the program established under this section;

      (2) ensure that the program established under this section is consistent with the foreign policy and development assistance objectives of the United States; and

      (3) consider, in determining whether a country should receive assistance under this section, whether the government of the country is taking concrete steps to improve the preschool and school systems in the country.

    (e) ELIGIBLE ENTITIES- Assistance may be provided under this section to private voluntary organizations, cooperatives, intergovernmental organizations, governments of developing countries and their agencies, and other organizations.

    (f) PROCEDURES-

      (1) IN GENERAL- In carrying out subsection (b), the President shall ensure that procedures are established that--

        (A) provide for the submission of proposals by eligible entities, each of which may include 1 or more recipient countries, for commodities and other assistance under this section;

        (B) provide for eligible commodities and assistance on a multiyear basis;

        (C) ensure that eligible entities demonstrate the organizational capacity and the ability to develop, implement, monitor, report on, and provide accountability for activities conducted under this section;

        (D) provide for the expedited development, review, and approval of proposals submitted in accordance with this section;

        (E) ensure monitoring and reporting by eligible entities on the use of commodities and other assistance provided under this section; and

        (F) allow for the sale or barter of commodities by eligible entities to acquire funds to implement activities that improve the food security of women and children or otherwise enhance the effectiveness of programs and activities authorized under this section.

      (2) PRIORITIES FOR PROGRAM FUNDING- In carrying out paragraph (1) with respect to criteria for determining the use of commodities and other assistance provided for programs and activities authorized under this section, the implementing agency may consider the ability of eligible entities to--

        (A) identify and assess the needs of beneficiaries, especially malnourished or undernourished mothers and their children who are 5 years of age or younger, and school-age children who are malnourished, undernourished, or do not regularly attend school;

        (B)(i) in the case of preschool and school-age children, target low-income areas where children’s enrollment and attendance in school is low or girls’ enrollment and participation in preschool or school is low, and incorporate developmental objectives for improving literacy and primary education, particularly with respect to girls; and

        (ii) in the case of programs to benefit mothers and children who are 5 years of age or younger, coordinate supplementary feeding and nutrition programs with existing or newly-established maternal, infant, and children programs that provide health-needs interventions, including maternal, prenatal, and postnatal and newborn care;

        (C) involve indigenous institutions as well as local communities and governments in the development and implementation of the programs and activities to foster local capacity building and leadership; and

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

    (g) USE OF FOOD AND NUTRITION SERVICE- The Food and Nutrition Service of the Department of Agriculture may provide technical advice on the establishment of programs under subsection (b)(1) and on implementation of the programs in the field in recipient countries.

    (h) MULTILATERAL INVOLVEMENT-

      (1) IN GENERAL- The President is urged to engage existing international food aid coordinating mechanisms to ensure multilateral commitments to, and participation in, programs similar to programs supported under this section.

      (2) REPORTS- The President shall annually submit to the Committee on International Relations and the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report on the commitments and activities of governments, including the United States government, in the global effort to reduce child hunger and increase school attendance.

    (i) PRIVATE SECTOR INVOLVEMENT- The President is urged to encourage the support and active involvement of the private sector, foundations, and other individuals and organizations in programs assisted under this section.

    (j) GRADUATION- An agreement with an eligible organization under this section shall include provisions--

      (1) to--

        (A) sustain the benefits to the education, enrollment, and attendance of children in schools in the targeted communities when the provision of commodities and assistance to a recipient country under a program under this section terminates; and

        (B) estimate the period of time required until the recipient country or eligible organization is able to provide sufficient assistance without additional assistance under this section; or

      (2) to provide other long-term benefits to targeted populations of the recipient country.

    (k) REQUIREMENT TO SAFEGUARD LOCAL PRODUCTION AND USUAL MARKETING- The requirement of section 403(a) of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1733(a)) applies with respect to the availability of commodities under this section.

    (l) FUNDING-

      (1) IN GENERAL- Of the funds of the Commodity Credit Corporation, the President shall use $100,000,000 for fiscal year 2003 to carry out this section.

      (2) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated such sums as are necessary to carry out this section for each of fiscal years 2004 through 2007.

      (3) ADMINISTRATIVE EXPENSES- Funds made available to carry out this section may be used to pay the administrative expenses of any Federal agency implementing or assisting in the implementation of this section.

Subtitle C--Miscellaneous

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

    (a) USE OF CURRENCIES- Section 416(b)(7)(D) of the Agricultural Act of 1949 (7 U.S.C. 1431(b)(7)(D)) is amended--

      (1) in clauses (i) and (iii), by striking ‘foreign currency’ each place it appears;

      (2) in clause (ii)--

        (A) by striking ‘Foreign currencies’ and inserting ‘Proceeds’; and

        (B) by striking ‘foreign currency’; and

      (3) in clause (iv)--

        (A) by striking ‘Foreign currency proceeds’ and inserting ‘Proceeds’;

        (B) by striking ‘country of origin’ the second place it appears and all that follows through ‘as necessary to expedite’ and inserting ‘country of origin as necessary to expedite’;

        (C) by striking ‘; or’ and inserting a period; and

        (D) by striking subclause (II).

    (b) IMPLEMENTATION OF AGREEMENTS- Section 416(b) of the Agricultural Act of 1949 (7 U.S.C. 1431(b)) (as amended by section 3009(b)) is amended--

      (1) in paragraph (8), by striking ‘(8)(A)’ and all that follows through ‘(B) The Secretary’ and inserting the following:

      ‘(8) ADMINISTRATIVE PROVISIONS-

        ‘(A) EXPEDITED PROCEDURES- To the maximum extent practicable, expedited procedures shall be used in the implementation of this subsection.

        ‘(B) ESTIMATE OF COMMODITIES- The Secretary shall publish in the Federal Register, not later than October 31 of each fiscal year, an estimate of the types and quantities of commodities and products that will be available under this section for the fiscal year.

        ‘(C) FINALIZATION OF AGREEMENTS- The Secretary is encouraged to finalize program agreements under this section not later than December 31 of each fiscal year.

        ‘(D) REGULATIONS- The Secretary’; and

      (2) by adding at the end the following:

      ‘(11) REQUIREMENTS-

        ‘(A) IN GENERAL- Not later than 270 days after the date of enactment of this subparagraph, the Secretary shall review and, as necessary, make changes in regulations and internal procedures designed to streamline, improve, and clarify the application, approval, and implementation processes pertaining to agreements under this section.

        ‘(B) CONSIDERATIONS- In conducting the review, the Secretary shall consider--

          ‘(i) revising procedures for submitting proposals;

          ‘(ii) developing criteria for program approval that separately address the objectives of the program;

          ‘(iii) pre-screening organizations and proposals to ensure that the minimum qualifications are met;

          ‘(iv) implementing e-government initiatives and otherwise improving the efficiency of the proposal submission and approval processes;

          ‘(v) upgrading information management systems;

          ‘(vi) improving commodity and transportation procurement processes; and

          ‘(vii) ensuring that evaluation and monitoring methods are sufficient.

        ‘(C) CONSULTATIONS- Not later than 1 year after the date of enactment of this subparagraph, the Secretary shall consult with the Committee on Agriculture, and the Committee on International Relations, of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate on changes made in regulations and procedures under this paragraph.’.

SEC. 3202. BILL EMERSON HUMANITARIAN TRUST.

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

SEC. 3203. EMERGING MARKETS.

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

SEC. 3204. BIOTECHNOLOGY AND AGRICULTURAL TRADE PROGRAM.

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

‘SEC. 1543A. BIOTECHNOLOGY AND AGRICULTURAL TRADE PROGRAM.

    ‘(a) ESTABLISHMENT- There is established in the Department the biotechnology and agricultural trade program.

    ‘(b) PURPOSE- The purpose of the program shall be to remove, resolve, or mitigate significant regulatory nontariff barriers to the export of United States agricultural commodities (as defined in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602)) into foreign markets through public and private sector projects funded by grants that address--

      ‘(1) quick response intervention regarding nontariff barriers to United States exports involving--

        ‘(A) United States agricultural commodities produced through biotechnology;

        ‘(B) food safety;

        ‘(C) disease; or

        ‘(D) other sanitary or phytosanitary concerns; or

      ‘(2) developing protocols as part of bilateral negotiations with other countries on issues such as animal health, grain quality, and genetically modified commodities.

    ‘(c) ELIGIBLE PROGRAMS- Depending on need, as determined by the Secretary, activities authorized under this section may be carried out through--

      ‘(1) this section;

      ‘(2) the emerging markets program under section 1542; or

      ‘(3) the Cochran Fellowship Program under section 1543.

    ‘(d) FUNDING- There is authorized to be appropriated $6,000,000 for each of fiscal years 2002 through 2007.’.

SEC. 3205. TECHNICAL ASSISTANCE FOR SPECIALTY CROPS.

    (a) ESTABLISHMENT- The Secretary of Agriculture shall establish an export assistance program (referred to in this section as the ‘program’) to address unique barriers that prohibit or threaten the export of United States specialty crops.

    (b) PURPOSE- The program shall provide direct assistance through public and private sector projects and technical assistance to remove, resolve, or mitigate sanitary and phytosanitary and related barriers to trade.

    (c) PRIORITY- The program shall address time sensitive and strategic market access projects based on--

      (1) trade effect on market retention, market access, and market expansion; and

      (2) trade impact.

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

SEC. 3206. GLOBAL MARKET STRATEGY.

    (a) IN GENERAL- Not later than 180 days after the date of enactment of this Act, and biennially thereafter, the Secretary of Agriculture shall consult with the Committee on Agriculture, and the Committee on International Relations, of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate on the formulation and implementation of a global market strategy for the Department of Agriculture that, to the maximum extent practicable--

      (1) identifies opportunities for the growth of agricultural exports to overseas markets;

      (2) ensures that the resources, programs, and policies of the Department are coordinated with those of other agencies; and

      (3) remove barriers to agricultural trade in overseas markets.

    (b) REVIEW- The consultations under subsection (a) shall include a review of--

      (1) the strategic goals of the Department; and

      (2) the progress of the Department in implementing the strategic goals through the global market strategy.

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

    Not later than 120 days after the date of enactment of this Act, the Secretary of Agriculture shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report on international food aid programs of the United States that evaluates--

      (1) the implications of storage and transportation capacity and funding for the use of perishable agricultural commodities and semiperishable agricultural commodities; and

      (2) the feasibility of the transport of lambs and other live animals under the program.

SEC. 3208. STUDY ON FEE FOR SERVICES.

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

    (b) PURPOSE OF PROGRAM- The purpose of a program described in subsection (a) would be to supplement and not replace any services currently offered overseas by the Foreign Agricultural Service.

    (c) MARKET DEVELOPMENT STRATEGY- A program under subsection (b) would be part of an overall market development strategy for a particular country or region.

    (d) PILOT PROGRAM- A program under subsection (a) would be established on a pilot basis to ensure that the program does not disadvantage small- and medium-sized companies, including companies that have never engaged in exporting.

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

    (a) FINDINGS- Congress finds that--

      (1) the international community faces a continuing epidemic of ethnic, sectarian, and criminal violence;

      (2) poverty, hunger, political uncertainty, and social instability are the principal causes of violence and conflict around the world;

      (3) broad-based, equitable economic growth and agriculture development facilitates political stability, food security, democracy, and the rule of law;

      (4) democratic governments are more likely to advocate and observe international laws, protect civil and human rights, pursue free market economies, and avoid external conflicts;

      (5) the United States Agency for International Development has provided critical democracy and governance assistance to a majority of the nations that successfully made the transition to democratic governments during the past 2 decades;

      (6) 43 of the top 50 consumer nations of American agricultural products were once United States foreign aid recipients;

      (7) in the past 50 years, infant child death rates in the developing world have been reduced by 50 percent, and health conditions around the world have improved more during this period than in any other period;

      (8) the United States Agency for International Development child survival programs have significantly contributed to a 10 percent reduction in infant mortality rates worldwide in just the past 8 years;

      (9) in providing assistance by the United States and other donors in better seeds and teaching more efficient agricultural techniques over the past 2 decades have helped make it possible to feed an additional 1,000,000,000 people in the world;

      (10) despite this progress, approximately 1,200,000,000 people, one-quarter of the world’s population, live on less that $1 per day, and approximately 3,000,000,000 people live on only $2 per day;

      (11) 95 percent of new births occur in developing countries, including the world’s poorest countries; and

      (12) only 1/2 percent of the Federal budget is dedicated to international economic and humanitarian assistance.

    (b) SENSE OF CONGRESS- It is the sense of Congress that--

      (1) United States foreign assistance programs should play an increased role in the global fight against terrorism to complement the national security objectives of the United States;

      (2) the United States should lead coordinated international efforts to provide increased financial assistance to countries with impoverished and disadvantaged populations that are the breeding grounds for terrorism; and

      (3) the United States Agency for International Development and the Department of Agriculture should substantially increase humanitarian, economic development, and agricultural assistance to foster international peace and stability and the promotion of human rights.

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

    (a) AGRICULTURE TRADE NEGOTIATING OBJECTIVES- It is the sense of the Senate that the principal negotiating objective of the United States with respect to agricultural trade in all multilateral, regional, and bilateral negotiations is to obtain competitive opportunities for the export of United States agricultural commodities in foreign markets substantially equivalent to the competitive opportunities afforded foreign exports in United States markets and to achieve fairer and more open conditions of agricultural trade in bulk and value-added commodities by--

      (1) reducing or eliminating, by a date certain, tariffs or other charges that decrease market opportunities for the export of United States agricultural commodities, giving priority to United States agricultural commodities that are subject to significantly higher tariffs or subsidy regimes of major producing countries;

      (2) immediately eliminating all export subsidies on agricultural commodities worldwide while maintaining bona fide food aid and preserving United States agricultural market development and export credit programs that allow the United States to compete with other foreign export promotion efforts;

      (3) leveling the playing field for United States agricultural producers by disciplining domestic supports such that no other country can provide greater support, measured as a percentage of total agricultural production value, than the United States does while preserving existing green box category to support conservation activities, family farms, and rural communities;

      (4) developing, strengthening, and clarifying rules and effective dispute settlement mechanisms to eliminate practices that unfairly decrease United States market access opportunities for United States agricultural commodities or distort agricultural markets to the detriment of the United States, including--

        (A) unfair or trade-distorting activities of state trading enterprises and other administrative mechanisms, with emphasis on--

          (i) requiring price transparency in the operation of state trading enterprises and such other mechanisms; and

          (ii) ending discriminatory pricing practices for agricultural commodities that amount to de facto export subsidies so that the enterprises or other mechanisms do not (except in cases of bona fide food aid) sell agricultural commodities in foreign markets at prices below domestic market prices or prices below the full costs of acquiring and delivering agricultural commodities to the foreign markets;

        (B) unjustified trade restrictions or commercial requirements affecting new agricultural technologies, including biotechnology;

        (C) unjustified sanitary or phytosanitary restrictions, including restrictions that are not based on scientific principles, in contravention of the Agreement on the Application of Sanitary and Phytosanitary Measures (as described in section 101(d)(3) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(3)));

        (D) other unjustified technical barriers to agricultural trade; and

        (E) restrictive and nontransparent rules in the administration of tariff rate quotas;

      (5) improving import relief mechanisms to recognize the unique characteristics of perishable agricultural commodities;

      (6) taking into account whether a party to negotiations with respect to trading in an agricultural commodity has--

        (A) failed to adhere to the provisions of an existing bilateral trade agreement with the United States;

        (B) circumvented obligations under a multilateral trade agreement to which the United States is a signatory; or

        (C) manipulated its currency value to the detriment of United States agricultural producers or exporters; and

      (7) otherwise ensuring that countries that accede to the World Trade Organization--

        (A) have made meaningful market liberalization commitments in agriculture; and

        (B) make progress in fulfilling those commitments over time.

    (b) PRIORITY FOR AGRICULTURE TRADE- It is the sense of the Senate that--

      (1) reaching a successful agreement on agriculture should be the top priority of United States negotiators in World Trade Organization talks; and

      (2) if the primary export competitors of the United States fail to reduce their trade distorting domestic supports and eliminate export subsidies in accordance with the negotiating objectives expressed in this section, the United States should take steps to increase the leverage of United States negotiators and level the playing field for United States producers, within existing World Trade Organization commitments.

    (c) CONSULTATION WITH CONGRESSIONAL COMMITTEES- It is the sense of the Senate that--

      (1) before the United States Trade Representative negotiates a trade agreement that would reduce tariffs on agricultural commodities or require a change in United States agricultural law, the United States Trade Representative should consult with the Committee on Agriculture and the Committee on Ways and Means of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry and the Committee on Finance of the Senate;

      (2) not less than 48 hours before initialing an agreement relating to agricultural trade negotiated under the auspices of the World Trade Organization, the United States Trade Representative should consult closely with the committees referred to in paragraph (1) regarding--

        (A) the details of the agreement;

        (B) the potential impact of the agreement on United States agricultural producers; and

        (C) any changes in United States law necessary to implement the agreement; and

      (3) any agreement or other understanding (whether verbal or in writing) that relates to agricultural trade that is not disclosed to Congress before legislation implementing a trade agreement is introduced in either the Senate or the House of Representatives should not be considered to be part of the agreement approved by Congress and should have no force and effect under Unites States law or in any dispute settlement body.

TITLE IV--NUTRITION PROGRAMS

SEC. 4001. SHORT TITLE.

    This title may be cited as the ‘Food Stamp Reauthorization Act of 2002’.

Subtitle A--Food Stamp Program

SEC. 4101. ENCOURAGEMENT OF PAYMENT OF CHILD SUPPORT.

    (a) EXCLUSION- Section 5(d)(6) of the Food Stamp Act of 1977 (7 U.S.C. 2014(d)(6)) is amended by adding at the end the following: ‘and child support payments made by a household member to or for an individual who is not a member of the household if the household member is legally obligated to make the payments,’.

    (b) SIMPLIFIED PROCEDURE- Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014) is amended--

      (1) in subsection (e), by striking paragraph (4) and inserting the following:

      ‘(4) DEDUCTION FOR CHILD SUPPORT PAYMENTS-

        ‘(A) IN GENERAL- In lieu of providing an exclusion for legally obligated child support payments made by a household member under subsection (d)(6), a State agency may elect to provide a deduction for the amount of the payments.

        ‘(B) ORDER OF DETERMINING DEDUCTIONS- A deduction under this paragraph shall be determined before the computation of the excess shelter expense deduction under paragraph (6).’; and

      (2) by adding at the end the following:

    ‘(n) STATE OPTIONS TO SIMPLIFY DETERMINATION OF CHILD SUPPORT PAYMENTS- Regardless of whether a State agency elects to provide a deduction under subsection (e)(4), the Secretary shall establish simplified procedures to allow State agencies, at the option of the State agencies, to determine the amount of any legally obligated child support payments made, including procedures to allow the State agency to rely on information from the agency responsible for implementing the program under part D of title IV of the Social Security Act (42 U.S.C. 651 et seq.) concerning payments made in prior months in lieu of obtaining current information from the households.’.

SEC. 4102. SIMPLIFIED DEFINITION OF INCOME.

    Section 5(d) of the Food Stamp Act of 1977 (7 U.S.C. 2014(d)) is amended--

      (1) by striking ‘and (15)’ and inserting ‘(15)’; and

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

SEC. 4103. STANDARD DEDUCTION.

    Section 5(e) of the Food Stamp Act of 1977 (7 U.S.C. 2014(e)) is amended by striking paragraph (1) and inserting the following:

      ‘(1) STANDARD DEDUCTION-

        ‘(A) IN GENERAL-

          ‘(i) DEDUCTION- The Secretary shall allow a standard deduction for each household in the 48 contiguous States and the District of Columbia, Alaska, Hawaii, and the Virgin Islands of the United States in an amount that is--

            ‘(I) equal to 8.31 percent of the income standard of eligibility established under subsection (c)(1); but

            ‘(II) not more than 8.31 percent of the income standard of eligibility established under subsection (c)(1) for a household of 6 members.

          ‘(ii) MINIMUM AMOUNT- Notwithstanding clause (i), the standard deduction for each household in the 48 contiguous States and the District of Columbia, Alaska, Hawaii, and the Virgin Islands of the United States shall be not less than $134, $229, $189, and $118, respectively.

        ‘(B) GUAM-

          ‘(i) IN GENERAL- The Secretary shall allow a standard deduction for each household in Guam in an amount that is--

            ‘(I) equal to 8.31 percent of twice the income standard of eligibility established under subsection (c)(1) for the 48 contiguous States and the District of Columbia; but

            ‘(II) not more than 8.31 percent of twice the income standard of eligibility established under subsection (c)(1) for the 48 contiguous States and the District of Columbia for a household of 6 members.

          ‘(ii) MINIMUM AMOUNT- Notwithstanding clause (i), the standard deduction for each household in Guam shall be not less than $269.’.

SEC. 4104. SIMPLIFIED UTILITY ALLOWANCE.

    Section 5(e)(7)(C)(iii) of the Food Stamp Act of 1977 (7 U.S.C. 2014(e)(7)(C)(iii)) is amended--

      (1) in subclause (I)(bb), by inserting ‘(without regard to subclause (III))’ after ‘Secretary finds’; and

      (2) by adding at the end the following:

            ‘(III) INAPPLICABILITY OF CERTAIN RESTRICTIONS- Clauses (ii)(II) and (ii)(III) shall not apply in the case of a State agency that has made the use of a standard utility allowance mandatory under subclause (I).’.

SEC. 4105. SIMPLIFIED DETERMINATION OF HOUSING COSTS.

    (a) IN GENERAL- Section 5(e)(7) of the Food Stamp Act of 1977 (7 U.S.C. 2014(e)(7)) is amended by adding at the end the following:

        ‘(D) HOMELESS HOUSEHOLDS-

          ‘(i) ALTERNATIVE DEDUCTION- In lieu of the deduction provided under subparagraph (A), a State agency may elect to allow a household in which all members are homeless individuals, but that is not receiving free shelter throughout the month, to receive a deduction of $143 per month.

          ‘(ii) INELIGIBILITY- The State agency may make a household with extremely low shelter costs ineligible for the alternative deduction under clause (i).’.

    (b) CONFORMING AMENDMENTS- Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014) is amended--

      (1) in subsection (e)--

        (A) by striking paragraph (5); and

        (B) by redesignating paragraphs (6) and (7) as paragraphs (5) and (6), respectively; and

      (2) in subsection (k)(4)(B), by striking ‘subsection (e)(7)’ and inserting ‘subsection (e)(6)’.

SEC. 4106. SIMPLIFIED DETERMINATION OF DEDUCTIONS.

    Section 5(f)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2014(f)(1)) is amended by adding at the end the following:

        ‘(C) SIMPLIFIED DETERMINATION OF DEDUCTIONS-

          ‘(i) IN GENERAL- Except as provided in clause (ii), for the purposes of subsection (e), a State agency may elect to disregard until the next recertification of eligibility under section 11(e)(4) 1 or more types of changes in the circumstances of a household that affect the amount of deductions the household may claim under subsection (e).

          ‘(ii) CHANGES THAT MAY NOT BE DISREGARDED- Under clause (i), a State agency may not disregard--

            ‘(I) any reported change of residence; or

            ‘(II) under standards prescribed by the Secretary, any change in earned income.’.

SEC. 4107. SIMPLIFIED DEFINITION OF RESOURCES.

    Section 5(g) of the Food Stamp Act of 1977 (7 U.S.C. 2014(g)) is amended--

      (1) in paragraph (1), by striking ‘a member who is 60 years of age or older’ and inserting ‘an elderly or disabled member’; and

      (2) by adding at the end the following:

      ‘(6) EXCLUSION OF TYPES OF FINANCIAL RESOURCES NOT CONSIDERED UNDER CERTAIN OTHER FEDERAL PROGRAMS-

        ‘(A) IN GENERAL- Subject to subparagraph (B), a State agency may, at the option of the State agency, exclude from financial resources under this subsection any types of financial resources that the State agency does not consider when determining eligibility for--

          ‘(i) cash assistance under a program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.); or

          ‘(ii) medical assistance under section 1931 of the Social Security Act (42 U.S.C. 1396u-1).

        ‘(B) LIMITATIONS- Except to the extent that any of the types of resources specified in clauses (i) through (iv) are excluded under another paragraph of this subsection, subparagraph (A) does not authorize a State agency to exclude--

          ‘(i) cash;

          ‘(ii) licensed vehicles;

          ‘(iii) amounts in any account in a financial institution that are readily available to the household; or

          ‘(iv) any other similar type of resource the inclusion in financial resources of which the Secretary determines by regulation to be essential to equitable determinations of eligibility under the food stamp program.’.

SEC. 4108. ALTERNATIVE ISSUANCE SYSTEMS IN DISASTERS.

    (a) IN GENERAL- Section 5(h)(3)(B) of the Food Stamp Act of 1977 (7 U.S.C. 2014(h)(3)(B)) is amended--

      (1) in the first sentence, by inserting ‘issuance methods and’ after ‘shall adjust’; and

      (2) in the second sentence, by inserting ‘, any conditions that make reliance on electronic benefit transfer systems described in section 7(i) impracticable,’ after ‘personnel’.

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

SEC. 4109. STATE OPTION TO REDUCE REPORTING REQUIREMENTS.

    Section 6(c)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2015(c)(1)) is amended--

      (1) in subparagraph (B), by striking ‘on a monthly basis’; and

      (2) by adding at the end the following:

        ‘(D) FREQUENCY OF REPORTING-

          ‘(i) IN GENERAL- Except as provided in subparagraphs (A) and (C), a State agency may require households that report on a periodic basis to submit reports--

            ‘(I) not less often than once each 6 months; but

            ‘(II) not more often than once each month.

          ‘(ii) REPORTING BY HOUSEHOLDS WITH EXCESS INCOME- A household required to report less often than once each 3 months shall, notwithstanding subparagraph (B), report in a manner prescribed by the Secretary if the income of the household for any month exceeds the income standard of eligibility established under section 5(c)(2).’.

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

    Section 7(i)(2) of the Food Stamp Act of 1977 (7 U.S.C. 2016(i)(2)) is amended--

      (1) by striking subparagraph (A); and

      (2) by redesignating subparagraphs (B) through (I) as subparagraphs (A) through (H), respectively.

SEC. 4111. REPORT ON ELECTRONIC BENEFIT TRANSFER SYSTEMS.

    (a) DEFINITION OF EBT SYSTEM- In this section, the term ‘EBT system’ means an electronic benefit transfer system used in issuance of benefits under the food stamp program under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.).

    (b) REPORT- Not later than October 1, 2003, the Secretary of Agriculture shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that--

      (1) describes the status of use by each State agency of EBT systems;

      (2) specifies the number of vendors that have entered into a contract for an EBT system with a State agency;

      (3)(A) specifies the number of State agencies that have entered into an EBT-system contract with multiple EBT-system vendors; and

      (B) describes, for each State agency described in subparagraph (A), how responsibilities are divided among the various vendors;

      (4) with respect to any State in which an EBT system is not operational throughout the State as of October 1, 2002--

        (A) provides an explanation of the reasons why an EBT system is not operational throughout the State;

        (B) describes how the reasons are being addressed; and

        (C) specifies the expected date of operation of an EBT system throughout the State;

      (5) provides a description of--

        (A) the issues faced by any State agency that has awarded a second EBT-system contract in the 2-year period preceding the date of the report; and

        (B) the steps that the State agency has taken to address those issues;

      (6) provides a description of--

        (A) the issues faced by any State agency that will award a second EBT-system contract within the 2-year period beginning on the date of the report; and

        (B) strategies that the State agency is considering to address those issues;

      (7) describes initiatives being considered or taken by the Department of Agriculture, food retailers, EBT-system vendors, and client advocates to address any outstanding issues with respect to EBT systems; and

      (8) examines areas of potential advances in electronic benefit delivery in the 5- to 10-year period beginning on the date of the report, including--

        (A) access to EBT systems at farmers’ markets;

        (B) increased use of transaction data from EBT systems to identify and prosecute fraud; and

        (C) fostering of increased competition among EBT-system vendors to ensure cost containment and optimal service.

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

    (a) IN GENERAL- Section 8 of the Food Stamp Act of 1977 (7 U.S.C. 2017) is amended by adding at the end the following:

    ‘(f) ALTERNATIVE PROCEDURES FOR RESIDENTS OF CERTAIN GROUP FACILITIES-

      ‘(1) IN GENERAL-

        ‘(A) APPLICABILITY-

          ‘(i) IN GENERAL- Subject to clause (ii), at the option of the State agency, allotments for residents of any facility described in subparagraph (B), (C), (D), or (E) of section 3(i)(5) (referred to in this subsection as a ‘covered facility’) may be determined and issued under this paragraph in lieu of subsection (a).

          ‘(ii) LIMITATION- Unless the Secretary authorizes implementation of this paragraph in all States under paragraph (3), clause (i) shall apply only to residents of covered facilities participating in a pilot project under paragraph (2).

        ‘(B) AMOUNT OF ALLOTMENT- The allotment for each eligible resident described in subparagraph (A) shall be calculated in accordance with standardized procedures established by the Secretary that take into account the allotments typically received by residents of covered facilities.

        ‘(C) ISSUANCE OF ALLOTMENT-

          ‘(i) IN GENERAL- The State agency shall issue an allotment determined under this paragraph to a covered facility as the authorized representative of the residents of the covered facility.

          ‘(ii) ADJUSTMENT- The Secretary shall establish procedures to ensure that a covered facility does not receive a greater proportion of a resident’s monthly allotment than the proportion of the month during which the resident lived in the covered facility.

        ‘(D) DEPARTURES OF RESIDENTS OF COVERED FACILITIES-

          ‘(i) NOTIFICATION- Any covered facility that receives an allotment for a resident under this paragraph shall--

            ‘(I) notify the State agency promptly on the departure of the resident; and

            ‘(II) notify the resident, before the departure of the resident, that the resident--

‘(aa) is eligible for continued benefits under the food stamp program; and

‘(bb) should contact the State agency concerning continuation of the benefits.

          ‘(ii) ISSUANCE TO DEPARTED RESIDENTS- On receiving a notification under clause (i)(I) concerning the departure of a resident, the State agency--

            ‘(I) shall promptly issue the departed resident an allotment for the days of the month after the departure of the resident (calculated in a manner prescribed by the Secretary) unless the departed resident reapplies to participate in the food stamp program; and

            ‘(II) may issue an allotment for the month following the month of the departure (but not any subsequent month) based on this paragraph unless the departed resident reapplies to participate in the food stamp program.

          ‘(iii) STATE OPTION- The State agency may elect not to issue an allotment under clause (ii)(I) if the State agency lacks sufficient information on the location of the departed resident to provide the allotment.

          ‘(iv) EFFECT OF REAPPLICATION- If the departed resident reapplies to participate in the food stamp program, the allotment of the departed resident shall be determined without regard to this paragraph.

      ‘(2) PILOT PROJECTS-

        ‘(A) IN GENERAL- Before the Secretary authorizes implementation of paragraph (1) in all States, the Secretary shall carry out, at the request of 1 or more State agencies and in 1 or more areas of the United States, such number of pilot projects as the Secretary determines to be sufficient to test the feasibility of determining and issuing allotments to residents of covered facilities under paragraph (1) in lieu of subsection (a).

        ‘(B) PROJECT PLAN- To be eligible to participate in a pilot project under subparagraph (A), a State agency shall submit to the Secretary for approval a project plan that includes--

          ‘(i) a specification of the covered facilities in the State that will participate in the pilot project;

          ‘(ii) a schedule for reports to be submitted to the Secretary on the pilot project;

          ‘(iii) procedures for standardizing allotment amounts that takes into account the allotments typically received by residents of covered facilities; and

          ‘(iv) a commitment to carry out the pilot project in compliance with the requirements of this subsection other than paragraph (1)(B).

      ‘(3) AUTHORIZATION OF IMPLEMENTATION IN ALL STATES-

        ‘(A) IN GENERAL- The Secretary shall--

          ‘(i) determine whether to authorize implementation of paragraph (1) in all States; and

          ‘(ii) notify the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate of the determination.

        ‘(B) DETERMINATION NOT TO AUTHORIZE IMPLEMENTATION IN ALL STATES-

          ‘(i) IN GENERAL- If the Secretary makes a finding described in clause (ii), the Secretary--

            ‘(I) shall not authorize implementation of paragraph (1) in all States; and

            ‘(II) shall terminate all pilot projects under paragraph (2) within a reasonable period of time (as determined by the Secretary).

          ‘(ii) FINDING- The finding referred to in clause (i) is that--

            ‘(I) an insufficient number of project plans that the Secretary determines to be eligible for approval are submitted by State agencies under paragraph (2)(B); or

            ‘(II)(aa) a sufficient number of pilot projects have been carried out under paragraph (2)(A); and

            ‘(bb) authorization of implementation of paragraph (1) in all States is not in the best interest of the food stamp program.’.

    (b) CONFORMING AMENDMENTS-

      (1) Section 3(i) of the Food Stamp Act of 1977 (7 U.S.C. 2012(i)) is amended--

        (A) by striking ‘(i) ‘Household’ means (1) an’ and inserting the following:

    ‘(i)(1) ‘Household’ means--

      ‘(A) an’;

        (B) in the first sentence, by striking ‘others, or (2) a group’ and inserting the following: ‘others; or

      ‘(B) a group’;

        (C) in the second sentence, by striking ‘Spouses’ and inserting the following:

    ‘(2) Spouses’;

        (D) in the third sentence, by striking ‘Notwithstanding’ and inserting the following:

    ‘(3) Notwithstanding’;

        (E) in paragraph (3) (as designated by subparagraph (D)), by striking ‘the preceding sentences’ and inserting ‘paragraphs (1) and (2)’;

        (F) in the fourth sentence, by striking ‘In no event’ and inserting the following:

    ‘(4) In no event’;

        (G) in the fifth sentence, by striking ‘For the purposes of this subsection, residents’ and inserting the following:

    ‘(5) For the purposes of this subsection, the following persons shall not be considered to be residents of institutions and shall be considered to be individual households:

      ‘(A) Residents’; and

        (H) in paragraph (5) (as designated by subparagraph (G))--

          (i) by striking ‘Act, or are individuals’ and inserting the following: ‘Act.

      ‘(B) Individuals’;

          (ii) by striking ‘such section, temporary’ and inserting the following: ‘that section.

      ‘(C) Temporary’;

          (iii) by striking ‘children, residents’ and inserting the following: ‘children.

      ‘(D) Residents’;

          (iv) by striking ‘coupons, and narcotics’ and inserting the following: ‘coupons.

      ‘(E) Narcotics’; and

          (v) by striking ‘shall not’ and all that follows and inserting a period.

      (2) Section 5(a) of the Food Stamp Act of 1977 (7 U.S.C. 2014(a)) is amended by striking ‘the third sentence of section 3(i)’ each place it appears and inserting ‘section 3(i)(4)’.

      (3) Section 8(e)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2017(e)(1)) is amended by striking ‘the last sentence of section 3(i)’ and inserting ‘section 3(i)(5)’.

      (4) Section 17(b)(1)(B)(iv)(III)(aa) of the Food Stamp Act of 1977 (7 U.S.C. 2026(b)(1)(B)(iv)(III)(aa)) is amended by striking ‘the last 2 sentences of section 3(i)’ and inserting ‘paragraphs (4) and (5) of section 3(i)’.

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

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

    (b) EFFECTIVE DATE- The amendment made by this section takes effect on the date of enactment of this Act.

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

    (a) IN GENERAL- Section 11(e)(2)(B)(ii) of the Food Stamp Act of 1977 (7 U.S.C. 2020(e)(2)(B)(ii)) is amended--

      (1) by inserting ‘(I)’ after ‘(ii)’;

      (2) in subclause (I) (as designated by paragraph (1)), by adding ‘and’ at the end; and

      (3) by adding at the end the following:

        ‘(II) if the State agency maintains a website for the State agency, shall make the application available on the website in each language in which the State agency makes a printed application available;’.

    (b) EFFECTIVE DATE- The amendments made by this section take effect 18 months after the date of enactment of this Act.

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

    (a) IN GENERAL- Section 11 of the Food Stamp Act of 1977 (7 U.S.C. 2020) is amended by adding at the end the following:

    ‘(s) TRANSITIONAL BENEFITS OPTION-

      ‘(1) IN GENERAL- A State agency may provide transitional food stamp benefits to a household that ceases to receive cash assistance under a State program funded under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.).

      ‘(2) TRANSITIONAL BENEFITS PERIOD- Under paragraph (1), a household may receive transitional food stamp benefits for a period of not more than 5 months after the date on which cash assistance is terminated.

      ‘(3) AMOUNT OF BENEFITS- During the transitional benefits period under paragraph (2), a household shall receive an amount of food stamp benefits equal to the allotment received in the month immediately preceding the date on which cash assistance was terminated, adjusted for the change in household income as a result of--

        ‘(A) the termination of cash assistance; and

        ‘(B) at the option of the State agency, information from another program in which the household participates.

      ‘(4) DETERMINATION OF FUTURE ELIGIBILITY- In the final month of the transitional benefits period under paragraph (2), the State agency may--

        ‘(A) require the household to cooperate in a recertification of eligibility; and

        ‘(B) initiate a new certification period for the household without regard to whether the preceding certification period has expired.

      ‘(5) LIMITATION- A household shall not be eligible for transitional benefits under this subsection if the household--

        ‘(A) loses eligibility under section 6;

        ‘(B) is sanctioned for a failure to perform an action required by Federal, State, or local law relating to a cash assistance program described in paragraph (1); or

        ‘(C) is a member of any other category of households designated by the State agency as ineligible for transitional benefits.

      ‘(6) APPLICATIONS FOR RECERTIFICATION-

        ‘(A) IN GENERAL- A household receiving transitional benefits under this subsection may apply for recertification at any time during the transitional benefits period under paragraph (2).

        ‘(B) DETERMINATION OF ALLOTMENT- If a household applies for recertification under subparagraph (A), the allotment of the household for all subsequent months shall be determined without regard to this subsection.’.

    (b) CONFORMING AMENDMENTS-

      (1) Section 3(c) of the Food Stamp Act of 1977 (7 U.S.C. 2012(c)) is amended by adding at the end the following: ‘The limits specified in this subsection may be extended until the end of any transitional benefit period established under section 11(s).’.

      (2) Section 6(c) of the Food Stamp Act of 1977 (7 U.S.C. 2015(c)) is amended by striking ‘No household’ and inserting ‘Except in a case in which a household is receiving transitional benefits during the transitional benefits period under section 11(s), no household’.

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

    (a) IN GENERAL- Section 11 of the Food Stamp Act of 1977 (7 U.S.C. 2020) (as amended by section 4115(a)) is amended by adding at the end the following:

    ‘(t) GRANTS FOR SIMPLE APPLICATION AND ELIGIBILITY DETERMINATION SYSTEMS AND IMPROVED ACCESS TO BENEFITS-

      ‘(1) IN GENERAL- For each of fiscal years 2003 through 2007, the Secretary shall use not more than $5,000,000 of funds made available under section 18(a)(1) to make grants to pay 100 percent of the costs of eligible entities approved by the Secretary to carry out projects to develop and implement--

        ‘(A) simple food stamp application and eligibility determination systems; or

        ‘(B) measures to improve access to food stamp benefits by eligible households.

      ‘(2) TYPES OF PROJECTS- A project under paragraph (1) may consist of--

        ‘(A) coordinating application and eligibility determination processes, including verification practices, under the food stamp program and other Federal, State, and local assistance programs;

        ‘(B) establishing methods for applying for benefits and determining eligibility that--

          ‘(i) more extensively use--

            ‘(I) communications by telephone; and

            ‘(II) electronic alternatives such as the Internet; or

          ‘(ii) otherwise improve the administrative infrastructure used in processing applications and determining eligibility;

        ‘(C) developing procedures, training materials, and other resources aimed at reducing barriers to participation and reaching eligible households;

        ‘(D) improving methods for informing and enrolling eligible households; or

        ‘(E) carrying out such other activities as the Secretary determines to be appropriate.

      ‘(3) LIMITATION- A grant under this subsection shall not be made for the ongoing cost of carrying out any project.

      ‘(4) ELIGIBLE ENTITIES- To be eligible to receive a grant under this subsection, an entity shall be--

        ‘(A) a State agency administering the food stamp program;

        ‘(B) a State or local government;

        ‘(C) an agency providing health or welfare services;

        ‘(D) a public health or educational entity; or

        ‘(E) a private nonprofit entity such as a community-based organization, food bank, or other emergency feeding organization.

      ‘(5) SELECTION OF ELIGIBLE ENTITIES- The Secretary--

        ‘(A) shall develop criteria for the selection of eligible entities to receive grants under this subsection; and

        ‘(B) may give preference to any eligible entity that consists of a partnership between a governmental entity and a nongovernmental entity.’.

    (b) CONFORMING AMENDMENTS- Section 17 of the Food Stamp Act of 1977 (7 U.S.C. 2026) is amended--

      (1) by striking subsection (i); and

      (2) by redesignating subsections (j) and (k) as subsections (i) and (j), respectively.

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

    (a) IN GENERAL- Section 14(a) of the Food Stamp Act of 1977 (7 U.S.C. 2023(a)) is amended by striking paragraph (2) and inserting the following:

      ‘(2) DELIVERY OF NOTICES- A notice under paragraph (1) shall be delivered by any form of delivery that the Secretary determines will provide evidence of the delivery.’.

    (b) EFFECTIVE DATE- The amendment made by this section takes effect on the date of enactment of this Act.

SEC. 4118. REFORM OF QUALITY CONTROL SYSTEM.

    (a) IN GENERAL- Section 16(c) of the Food Stamp Act of 1977 (7 U.S.C. 2025(c)) is amended--

      (1) by striking ‘(c)(1) The program’ and all that follows through the end of paragraph (1) and inserting the following:

    ‘(c) QUALITY CONTROL SYSTEM-

      ‘(1) IN GENERAL-

        ‘(A) SYSTEM- In carrying out the food stamp program, the Secretary shall carry out a system that enhances payment accuracy and improves administration by establishing fiscal incentives that require State agencies with high payment error rates to share in the cost of payment error.

        ‘(B) ADJUSTMENT OF FEDERAL SHARE OF ADMINISTRATIVE COSTS FOR FISCAL YEARS BEFORE FISCAL YEAR 2003-

          ‘(i) IN GENERAL- Subject to clause (ii), with respect to any fiscal year before fiscal year 2003, the Secretary shall adjust a State agency’s federally funded share of administrative costs under subsection (a), other than the costs already shared in excess of 50 percent under the proviso in the first sentence of subsection (a) or under subsection (g), by increasing that share of all such administrative costs by 1 percentage point to a maximum of 60 percent of all such administrative costs for each full 1/10 of a percentage point by which the payment error rate is less than 6 percent.

          ‘(ii) LIMITATION- Only States with a rate of invalid decisions in denying eligibility that is less than a nationwide percentage that the Secretary determines to be reasonable shall be entitled to the adjustment under clause (i).

        ‘(C) ESTABLISHMENT OF LIABILITY AMOUNT FOR FISCAL YEAR 2003 AND THEREAFTER- With respect to fiscal year 2004 and any fiscal year thereafter for which the Secretary determines that, for the second or subsequent consecutive fiscal year, a 95 percent statistical probability exists that the payment error rate of a State agency exceeds 105 percent of the national performance measure for payment error rates announced under paragraph (6), the Secretary shall establish an amount for which the State agency may be liable (referred to in this paragraph as the ‘liability amount’) that is equal to the product obtained by multiplying--

          ‘(i) the value of all allotments issued by the State agency in the fiscal year;

          ‘(ii) the difference between--

            ‘(I) the payment error rate of the State agency; and

            ‘(II) 6 percent; and

          ‘(iii) 10 percent.

        ‘(D) AUTHORITY OF SECRETARY WITH RESPECT TO LIABILITY AMOUNT- With respect to the liability amount established for a State agency under subparagraph (C) for any fiscal year, the Secretary shall--

          ‘(i)(I) waive the responsibility of the State agency to pay all or any portion of the liability amount established for the fiscal year (referred to in this paragraph as the ‘waiver amount’);

          ‘(II) require that a portion, not to exceed 50 percent, of the liability amount established for the fiscal year be used by the State agency for new investment, approved by the Secretary, to improve administration by the State agency of the food stamp program (referred to in this paragraph as the ‘new investment amount’), which new investment amount shall not be matched by Federal funds;

          ‘(III) designate a portion, not to exceed 50 percent, of the amount established for the fiscal year for payment to the Secretary in accordance with subparagraph (E) (referred to in this paragraph as the ‘at-risk amount’); or

          ‘(IV) take any combination of the actions described in subclauses (I) through (III); or

          ‘(ii) make the determinations described in clause (i) and enter into a settlement with the State agency, only with respect to any waiver amount or new investment amount, before the end of the fiscal year in which the liability amount is determined under subparagraph (C).

        ‘(E) PAYMENT OF AT-RISK AMOUNT FOR CERTAIN STATES-

          ‘(i) IN GENERAL- A State agency shall pay to the Secretary the at-risk amount designated under subparagraph (D)(i)(III) for any fiscal year in accordance with clause (ii), if, with respect to the immediately following fiscal year, a liability amount has been established for the State agency under subparagraph (C).

          ‘(ii) METHOD OF PAYMENT OF AT-RISK AMOUNT-

            ‘(I) REMISSION TO THE SECRETARY- In the case of a State agency required to pay an at-risk amount under clause (i), as soon as practicable after completion of all administrative and judicial reviews with respect to that requirement to pay, the chief executive officer of the State shall remit to the Secretary the at-risk amount required to be paid.

            ‘(II) ALTERNATIVE METHOD OF COLLECTION-

‘(aa) IN GENERAL- If the chief executive officer of the State fails to make the payment under subclause (I) within a reasonable period of time determined by the Secretary, the Secretary may reduce any amount due to the State agency under any other provision of this section by the amount required to be paid under clause (i).

‘(bb) ACCRUAL OF INTEREST- During any period of time determined by the Secretary under item (aa), interest on the payment under subclause (I) shall not accrue under section 13(a)(2).

        ‘(F) USE OF PORTION OF LIABILITY AMOUNT FOR NEW INVESTMENT-

          ‘(i) REDUCTION OF OTHER AMOUNTS DUE TO STATE AGENCY- In the case of a State agency that fails to comply with a requirement for new investment under subparagraph (D)(i)(II) or clause (iii)(I), the Secretary may reduce any amount due to the State agency under any other provision of this section by the portion of the liability amount that has not been used in accordance with that requirement.

          ‘(ii) EFFECT OF STATE AGENCY’S WHOLLY PREVAILING ON APPEAL- If a State agency begins required new investment under subparagraph (D)(i)(II), the State agency appeals the liability amount of the State agency, and the determination by the Secretary of the liability amount is reduced to $0 on administrative or judicial review, the Secretary shall pay to the State agency an amount equal to 50 percent of the new investment amount that was included in the liability amount subject to the appeal.

          ‘(iii) EFFECT OF SECRETARY’S WHOLLY PREVAILING ON APPEAL- If a State agency does not begin required new investment under subparagraph (D)(i)(II), the State agency appeals the liability amount of the State agency, and the determination by the Secretary of the liability amount is wholly upheld on administrative or judicial review, the Secretary shall--

            ‘(I) require all or any portion of the new investment amount to be used by the State agency for new investment, approved by the Secretary, to improve administration by the State agency of the food stamp program, which amount shall not be matched by Federal funds; and

            ‘(II) require payment of any remaining portion of the new investment amount in accordance with subparagraph (E)(ii).

          ‘(iv) EFFECT OF NEITHER PARTY’S WHOLLY PREVAILING ON APPEAL- The Secretary shall promulgate regulations regarding obligations of the Secretary and the State agency in a case in which the State agency appeals the liability amount of the State agency and neither the Secretary nor the State agency wholly prevails.

        ‘(G) CORRECTIVE ACTION PLANS- The Secretary shall foster management improvements by the States by requiring State agencies, other than State agencies with payment error rates of less than 6 percent, to develop and implement corrective action plans to reduce payment errors.’;

      (2) in paragraph (4), by striking ‘(4)’ and all that follows through the end of the first sentence and inserting the following:

      ‘(4) REPORTING REQUIREMENTS- The Secretary may require a State agency to report any factors that the Secretary considers necessary to determine a State agency’s payment error rate, liability amount or new investment amount under paragraph (1), or performance under the performance measures under subsection (d).’;

      (3) in paragraph (5)--

        (A) by striking ‘(5)’ and all that follows through the end of the second sentence and inserting the following:

      ‘(5) PROCEDURES- To facilitate the implementation of this subsection, each State agency shall expeditiously submit to the Secretary data concerning the operations of the State agency in each fiscal year sufficient for the Secretary to establish the State agency’s payment error rate, liability amount or new investment amount under paragraph (1), or performance under the performance measures under subsection (d).’; and

        (B) in the last sentence, by striking ‘paragraph (1)(C)’ and inserting ‘paragraph (1)’;

      (4) in paragraph (6)--

        (A) by striking ‘(6) At’ and inserting the following:

      ‘(6) NATIONAL PERFORMANCE MEASURE FOR PAYMENT ERROR RATES-

        ‘(A) ANNOUNCEMENT- At’;

        (B) in subparagraph (A) (as designated by subparagraph (A)), by striking ‘and incentive payments or claims pursuant to paragraphs (1)(A) and (1)(C)’;

        (C) in the first and third sentences, by striking ‘paragraph (5)’ each place it appears and inserting ‘paragraph (8)’;

        (D) by striking ‘Where a State’ and inserting the following:

        ‘(B) USE OF ALTERNATIVE MEASURE OF STATE ERROR- Where a State’;

        (E) by striking ‘The announced’ and inserting the following:

        ‘(C) USE OF NATIONAL PERFORMANCE MEASURE- The announced’;

        (F) in subparagraph (C) (as designated by subparagraph (E)), by striking ‘the State share of the cost of payment error under paragraph (1)(C)’ and inserting ‘the liability amount of a State under paragraph (1)(C)’; and

        (G) by adding at the end the following:

        ‘(D) NO ADMINISTRATIVE OR JUDICIAL REVIEW- The national performance measure announced under this paragraph shall not be subject to administrative or judicial review.’;

      (5) in paragraph (7)--

        (A) by striking ‘(7) If the Secretary asserts a financial claim against’ and inserting the following:

      ‘(7) ADMINISTRATIVE AND JUDICIAL REVIEW-

        ‘(A) IN GENERAL- Except as provided in subparagraphs (B) and (C), if the Secretary asserts a financial claim against or establishes a liability amount with respect to’;

        (B) in subparagraph (A) (as designated by subparagraph (A)), by striking ‘paragraph (1)(C)’ and inserting ‘paragraph (1)’; and

        (C) by adding at the end the following:

        ‘(B) DETERMINATION OF PAYMENT ERROR RATE- With respect to any fiscal year, a determination of the payment error rate of a State agency or a determination whether the payment error rate exceeds 105 percent of the national performance measure for payment error rates shall be subject to administrative or judicial review only if the Secretary establishes a liability amount with respect to the fiscal year under paragraph (1)(C).

        ‘(C) AUTHORITY OF SECRETARY WITH RESPECT TO LIABILITY AMOUNT- An action by the Secretary under subparagraph (D) or (F)(iii) of paragraph (1) shall not be subject to administrative or judicial review.’; and

      (6) in paragraph (8)--

        (A) in subparagraph (A), by striking ‘paragraph (1)(C)’ and inserting ‘paragraph (1)’;

        (B) in subparagraph (C)--

          (i) in clause (i), by striking ‘payment claimed against State agencies; and’ and inserting ‘payment claimed against State agencies or liability amount established with respect to State agencies;’;

          (ii) in clause (ii), by striking ‘claims.’ and inserting ‘claims or liability amounts; and’; and

          (iii) by adding at the end the following:

      ‘(iii) provide a copy of the document providing notification under clause (ii) to the chief executive officer and the legislature of the State.’; and

        (C) in subparagraphs (D) and (H), by inserting ‘or liability amount’ after ‘claim’ each place it appears.

    (b) AUTHORITY TO SETTLE CLAIMS CONCERNING AT-RISK AMOUNTS- Section 13(a) of the Food Stamp Act of 1977 (7 U.S.C. 2022(a)) is amended--

      (1) by striking ‘(a)(1) The’ and inserting the following:

    ‘(a) GENERAL AUTHORITY OF THE SECRETARY-

      ‘(1) DETERMINATION OF CLAIMS- Except in the case of an at-risk amount required under section 16(c)(1)(D)(i)(III), the’;

      (2) by striking the fourth sentence;

      (3) by striking ‘To the extent’ and inserting the following:

      ‘(2) CLAIMS ESTABLISHED UNDER QUALITY CONTROL SYSTEM- To the extent’;

      (4) in paragraph (2) (as designated by paragraph (3)), by striking ‘section 16(c)(1)(C)’ and inserting ‘section 16(c)(1)’;

      (5) by striking ‘Any interest’ and inserting the following:

      ‘(3) COMPUTATION OF INTEREST- Any interest’; and

      (6) by striking ‘(2) Each adult’ and inserting the following:

      ‘(4) JOINT AND SEVERAL LIABILITY OF HOUSEHOLD MEMBERS- Each adult’.

    (c) CREDITING OF PAYMENTS TO FOOD STAMP APPROPRIATIONS ACCOUNT- Section 18(e) of the Food Stamp Act of 1977 (7 U.S.C. 2027(e)) is amended in the first sentence--

      (1) by striking ‘11(g) and (h), and’ and inserting ‘subsections (g) and (h) of section 11,’; and

      (2) by inserting ‘and section 16(c)(1),’ after ‘section 13,’.

    (d) CONFORMING AMENDMENTS- Section 22(h) of the Food Stamp Act of 1977 (7 U.S.C. 2031(h)) is amended--

      (1) in the second sentence, by striking ‘section 16(c)(1)(C)’ and inserting ‘section 16(c)(1)’; and

      (2) by striking the third sentence.

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

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

    (a) IN GENERAL- Section 16(c)(8) of the Food Stamp Act of 1977 (7 U.S.C. 2025(c)(8)) is amended--

      (1) in subparagraph (B), by striking ‘180 days after the end of the fiscal year’ and inserting ‘the first May 31 after the end of the fiscal year referred to in subparagraph (A)’; and

      (2) in subparagraph (C), by striking ‘30 days thereafter’ and inserting ‘the first June 30 after the end of the fiscal year referred to in subparagraph (A)’.

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

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

    (a) IN GENERAL- Section 16 of the Food Stamp Act of 1977 (7 U.S.C. 2025) is amended by striking subsection (d) and inserting the following:

    ‘(d) BONUSES FOR STATES THAT DEMONSTRATE HIGH OR MOST IMPROVED PERFORMANCE-

      ‘(1) FISCAL YEARS 2003 AND 2004-

        ‘(A) GUIDANCE- With respect to fiscal years 2003 and 2004, the Secretary shall establish, in guidance issued to State agencies not later than October 1, 2002--

          ‘(i) performance criteria relating to--

            ‘(I) actions taken to correct errors, reduce rates of error, and improve eligibility determinations; and

            ‘(II) other indicators of effective administration determined by the Secretary; and

          ‘(ii) standards for high and most improved performance to be used in awarding performance bonus payments under subparagraph (B)(ii).

        ‘(B) PERFORMANCE BONUS PAYMENTS- With respect to each of fiscal years 2003 and 2004, the Secretary shall--

          ‘(i) measure the performance of each State agency with respect to the criteria established under subparagraph (A)(i); and

          ‘(ii) subject to paragraph (3), award performance bonus payments in the following fiscal year, in a total amount of $48,000,000 for each fiscal year, to State agencies that meet standards for high or most improved performance established by the Secretary under subparagraph (A)(ii).

      ‘(2) FISCAL YEARS 2005 AND THEREAFTER-

        ‘(A) REGULATIONS- With respect to fiscal year 2005 and each fiscal year thereafter, the Secretary shall--

          ‘(i) establish, by regulation, performance criteria relating to--

            ‘(I) actions taken to correct errors, reduce rates of error, and improve eligibility determinations; and

            ‘(II) other indicators of effective administration determined by the Secretary;

          ‘(ii) establish, by regulation, standards for high and most improved performance to be used in awarding performance bonus payments under subparagraph (B)(ii); and

          ‘(iii) before issuing proposed regulations to carry out clauses (i) and (ii), solicit ideas for performance criteria and standards for high and most improved performance from State agencies and organizations that represent State interests.

        ‘(B) PERFORMANCE BONUS PAYMENTS- With respect to fiscal year 2005 and each fiscal year thereafter, the Secretary shall--

          ‘(i) measure the performance of each State agency with respect to the criteria established under subparagraph (A)(i); and

          ‘(ii) subject to paragraph (3), award performance bonus payments in the following fiscal year, in a total amount of $48,000,000 for each fiscal year, to State agencies that meet standards for high or most improved performance established by the Secretary under subparagraph (A)(ii).

      ‘(3) PROHIBITION ON RECEIPT OF PERFORMANCE BONUS PAYMENTS- A State agency shall not be eligible for a performance bonus payment with respect to any fiscal year for which the State agency has a liability amount established under subsection (c)(1)(C).

      ‘(4) PAYMENTS NOT SUBJECT TO JUDICIAL REVIEW- A determination by the Secretary whether, and in what amount, to award a performance bonus payment under this subsection shall not be subject to administrative or judicial review.’.

    (b) EFFECTIVE DATE- The amendment made by this section takes effect on the date of enactment of this Act.

SEC. 4121. EMPLOYMENT AND TRAINING PROGRAM.

    (a) LEVELS OF FUNDING- Section 16(h)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2025(h)(1)) is amended--

      (1) in subparagraph (A), by striking clause (vii) and inserting the following:

          ‘(vii) for each of fiscal years 2002 through 2007, $90,000,000.’;

      (2) by striking subparagraph (B) and inserting the following:

        ‘(B) ALLOCATION- Funds made available under subparagraph (A) shall be made available to and reallocated among State agencies under a reasonable formula that--

          ‘(i) is determined and adjusted by the Secretary; and

          ‘(ii) takes into account the number of individuals who are not exempt from the work requirement under section 6(o).’; and

      (3) by striking subparagraphs (E) through (G) and inserting the following:

        ‘(E) ADDITIONAL ALLOCATIONS FOR STATES THAT ENSURE AVAILABILITY OF WORK OPPORTUNITIES-

          ‘(i) IN GENERAL- In addition to the allocations under subparagraph (A), from funds made available under section 18(a)(1), the Secretary shall allocate not more than $20,000,000 for each of fiscal years 2002 through 2007 to reimburse a State agency that is eligible under clause (ii) for the costs incurred in serving food stamp recipients who--

            ‘(I) are not eligible for an exception under section 6(o)(3); and

            ‘(II) are placed in and comply with a program described in subparagraph (B) or (C) of section 6(o)(2).

          ‘(ii) ELIGIBILITY- To be eligible for an additional allocation under clause (i), a State agency shall make and comply with a commitment to offer a position in a program described in subparagraph (B) or (C) of section 6(o)(2) to each applicant or recipient who--

            ‘(I) is in the last month of the 3-month period described in section 6(o)(2);

            ‘(II) is not eligible for an exception under section 6(o)(3);

            ‘(III) is not eligible for a waiver under section 6(o)(4); and

            ‘(IV) is not exempt under section 6(o)(6).’.

    (b) CARRYOVER FUNDS- Notwithstanding any other provision of law, funds provided under section 16(h)(1)(A) of the Food Stamp Act of 1977 (7 U.S.C. 2025(h)(1)(A)) for any fiscal year before fiscal year 2002 shall be rescinded on the date of enactment of this Act, unless obligated by a State agency before that date.

    (c) PARTICIPANT EXPENSES- Section 6(d)(4)(I)(i)(I) of the Food Stamp Act of 1977 (7 U.S.C. 2015(d)(4)(I)(i)(I)) is amended by striking ‘, except that the State agency may limit such reimbursement to each participant to $25 per month’.

    (d) FEDERAL REIMBURSEMENT- Section 16(h)(3) of the Food Stamp Act of 1977 (7 U.S.C. 2025(h)(3)) is amended by striking ‘such total amount shall not exceed an amount representing $25 per participant per month for costs of transportation and other actual costs (other than dependent care costs) and’ and inserting ‘the amount of the reimbursement for dependent care expenses shall not exceed’.

    (e) EFFECTIVE DATE- The amendments made by this section take effect on the date of enactment of this Act.

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

    (a) REDUCTIONS IN PAYMENTS FOR ADMINISTRATIVE COSTS- Section 16(k)(3) of the Food Stamp Act of 1977 (7 U.S.C. 2025(k)(3)) is amended--

      (1) in the first sentence of subparagraph (A), by striking ‘2002’ and inserting ‘2007’; and

      (2) in subparagraph (B)(ii), by striking ‘2002’ and inserting ‘2007’.

    (b) CASH PAYMENT PILOT PROJECTS- Section 17(b)(1)(B)(vi) of the Food Stamp Act of 1977 (7 U.S.C. 2026(b)(1)(B)(vi)) is amended by striking ‘2002’ and inserting ‘2007’.

    (c) AUTHORIZATION OF APPROPRIATIONS- Section 18(a)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2027(a)(1)) is amended in the first sentence by striking ‘1996 through 2002’ and inserting ‘2003 through 2007’.

SEC. 4123. EXPANDED GRANT AUTHORITY.

    (a) IN GENERAL- Section 17(a)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2026(a)(1)) is amended--

      (1) by striking ‘, by way of making contracts with or grants to public or private organizations or agencies,’ and inserting ‘enter into contracts with or make grants to public or private organizations or agencies under this section to’; and

      (2) by adding at the end the following: ‘The waiver authority of the Secretary under subsection (b) shall extend to all contracts and grants under this section.’.

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

SEC. 4124. CONSOLIDATED BLOCK GRANTS FOR PUERTO RICO AND AMERICAN SAMOA.

    (a) CONSOLIDATED FUNDING- Section 19 of the Food Stamp Act of 1977 (7 U.S.C. 2028) is amended--

      (1) by striking the section heading and ‘(a)(1)(A) From’ and all that follows through ‘(2) The’ and inserting the following:

‘SEC. 19. CONSOLIDATED BLOCK GRANTS FOR PUERTO RICO AND AMERICAN SAMOA.

    ‘(a) PAYMENTS TO GOVERNMENTAL ENTITIES-

      ‘(1) DEFINITION OF GOVERNMENTAL ENTITY- In this subsection, the term ‘governmental entity’ means--

        ‘(A) the Commonwealth of Puerto Rico; and

        ‘(B) American Samoa.

      ‘(2) BLOCK GRANTS-

        ‘(A) AMOUNT OF BLOCK GRANTS- From the sums appropriated under this Act, the Secretary shall, subject to this section, pay to governmental entities to pay the expenditures for nutrition assistance programs for needy persons as described in subparagraphs (B) and (C)--

          ‘(i) for fiscal year 2003, $1,401,000,000; and

          ‘(ii) for each of fiscal years 2004 through 2007, the amount specified in clause (i), as adjusted by the percentage by which the thrifty food plan has been adjusted under section 3(o)(4) between June 30, 2002, and June 30 of the immediately preceding fiscal year.

        ‘(B) PAYMENTS TO COMMONWEALTH OF PUERTO RICO-

          ‘(i) IN GENERAL- For fiscal year 2003 and each fiscal year thereafter, the Secretary shall use 99.6 percent of the funds made available under subparagraph (A) for payment to the Commonwealth of Puerto Rico to pay--

            ‘(I) 100 percent of the expenditures by the Commonwealth for the fiscal year for the provision of nutrition assistance included in the plan of the Commonwealth approved under subsection (b); and

            ‘(II) 50 percent of the related administrative expenses.

          ‘(ii) EXCEPTION FOR EXPENDITURES FOR CERTAIN SYSTEMS- Notwithstanding clause (i), the Commonwealth of Puerto Rico may spend in fiscal year 2002 or 2003 not more than $6,000,000 of the amount required to be paid to the Commonwealth for fiscal year 2002 under this paragraph (as in effect on the day before the date of enactment of this clause) to pay 100 percent of the costs of--

            ‘(I) upgrading and modernizing the electronic data processing system used to carry out nutrition assistance programs for needy persons;

            ‘(II) implementing systems to simplify the determination of eligibility to receive the nutrition assistance; and

            ‘(III) operating systems to deliver the nutrition assistance through electronic benefit transfers.

        ‘(C) PAYMENTS TO AMERICAN SAMOA- For fiscal year 2003 and each fiscal year thereafter, the Secretary shall use 0.4 percent of the funds made available under subparagraph (A) for payment to American Samoa to pay 100 percent of the expenditures by American Samoa for a nutrition assistance program extended under section 601(c) of Public Law 96-597 (48 U.S.C. 1469d(c)).

        ‘(D) CARRYOVER OF FUNDS- For fiscal year 2002 and each fiscal year thereafter, not more than 2 percent of the funds made available under this paragraph for the fiscal year to each governmental entity may be carried over to the following fiscal year.

      ‘(3) TIME AND MANNER OF PAYMENTS TO COMMONWEALTH OF PUERTO RICO- The’;

      (2) in subsection (b), by striking ‘subsection (a)(1)(A)’ each place it appears and inserting ‘subsection (a)(2)(B)’; and

      (3) in subsection (c), by striking ‘subsection (a)(1)(A)’ each place it appears and inserting ‘subsection (a)(2)(A)’.

    (b) CONFORMING AMENDMENT- Section 24 of the Food Stamp Act of 1977 (7 U.S.C. 2033) is repealed.

    (c) APPLICABILITY-

      (1) IN GENERAL- Except as provided in paragraph (2), the amendments made by this section apply beginning on October 1, 2002.

      (2) EXCEPTIONS- Subparagraphs (B)(ii) and (D) of section 19(a)(2) of the Food Stamp Act of 1977 (as amended by subsection (a)(1)) apply beginning on the date of enactment of this Act.

    (d) EFFECTIVE DATE- The amendments made by this section take effect on the date of enactment of this Act.

SEC. 4125. ASSISTANCE FOR COMMUNITY FOOD PROJECTS.

    (a) IN GENERAL- Section 25 of the Food Stamp Act of 1977 (7 U.S.C. 2034) is amended--

      (1) in subsection (a)--

        (A) by striking ‘(1)’ and inserting ‘(1)(A)’;

        (B) by redesignating paragraphs (2) and (3) as subparagraphs (B) and (C), respectively, of paragraph (1);

        (C) in paragraph (1)(C) (as redesignated by subparagraph (B)), by striking the period at the end and inserting ‘; or’; and

        (D) by adding at the end the following:

      ‘(2) meet specific State, local, or neighborhood food and agricultural needs, including needs for--

        ‘(A) infrastructure improvement and development;

        ‘(B) planning for long-term solutions; or

        ‘(C) the creation of innovative marketing activities that mutually benefit agricultural producers and low-income consumers.’;

      (2) in subsection (b)(2)(B)--

        (A) by striking ‘$2,500,000’ and inserting ‘$5,000,000’; and

        (B) by striking ‘2002’ and inserting ‘2007’;

      (3) in subsection (d), by striking paragraph (4) and inserting the following:

      ‘(4) encourage long-term planning activities, and multisystem, interagency approaches with multistakeholder collaborations, that build the long-term capacity of communities to address the food and agricultural problems of the communities, such as food policy councils and food planning associations.’; and

      (4) by striking subsection (h) and inserting the following:

    ‘(h) INNOVATIVE PROGRAMS FOR ADDRESSING COMMON COMMUNITY PROBLEMS-

      ‘(1) IN GENERAL- The Secretary shall offer to enter into a contract with, or make a grant to, 1 nongovernmental organization that meets the requirements of paragraph (2) to coordinate with Federal agencies, States, political subdivisions, and nongovernmental organizations (collectively referred to in this subsection as ‘targeted entities’) to gather information, and recommend to the targeted entities, innovative programs for addressing common community problems, including--

        ‘(A) loss of farms and ranches;

        ‘(B) rural poverty;

        ‘(C) welfare dependency;

        ‘(D) hunger;

        ‘(E) the need for job training; and

        ‘(F) the need for self-sufficiency by individuals and communities.

      ‘(2) NONGOVERNMENTAL ORGANIZATION- The nongovernmental organization referred to in paragraph (1) shall--

        ‘(A) be selected by the Secretary on a competitive basis;

        ‘(B) be experienced in working with other targeted entities and in organizing workshops that demonstrate programs to other targeted entities;

        ‘(C) be experienced in identifying programs that effectively address community problems described in paragraph (1) that can be implemented by other targeted entities;

        ‘(D) be experienced in, and capable of, receiving information from and communicating with other targeted entities throughout the United States;

        ‘(E) be experienced in operating a national information clearinghouse that addresses 1 or more of the community problems described in paragraph (1); and

        ‘(F) as a condition of entering into the contract or receiving the grant referred to in paragraph (1), agree--

          ‘(i) to contribute in-kind resources toward implementation of the contract or grant;

          ‘(ii) to provide to other targeted entities information and guidance on the innovative programs referred to in paragraph (1); and

          ‘(iii) to operate a national information clearinghouse on innovative means for addressing community problems described in paragraph (1) that--

            ‘(I) is easily usable by--

‘(aa) Federal, State, and local government agencies;

‘(bb) local community leaders;

‘(cc) nongovernmental organizations; and

‘(dd) the public; and

            ‘(II) includes information on approved community food projects.

      ‘(3) AUDITS; EFFECTIVE USE OF FUNDS- The Secretary shall establish auditing procedures and otherwise ensure the effective use of funds made available to carry out this subsection.

      ‘(4) FUNDING- Not later than 90 days after the date of enactment of this paragraph, and on October 1 of each of fiscal years 2003 through 2007, the Secretary shall allocate to carry out this subsection $200,000 of the funds made available under subsection (b), to remain available until expended.’.

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

SEC. 4126. AVAILABILITY OF COMMODITIES FOR THE EMERGENCY FOOD ASSISTANCE PROGRAM.

    (a) IN GENERAL- Section 27(a) of the Food Stamp Act of 1977 (7 U.S.C. 2036(a)) is amended--

      (1) by striking ‘1997 through 2002’ and inserting ‘2002 through 2007’; and

      (2) by striking ‘$100,000,000’ and inserting ‘$140,000,000’.

    (b) EFFECTIVE DATE- The amendments made by this section take effect on October 1, 2001.

Subtitle B--Commodity Distribution

SEC. 4201. COMMODITY SUPPLEMENTAL FOOD PROGRAM.

    (a) COMMODITY DISTRIBUTION PROGRAM- Section 4(a) of the Agriculture and Consumer Protection Act of 1973 (7 U.S.C. 612c note; Public Law 93-86) is amended in the first sentence by striking ‘2002’ and inserting ‘2007’.

    (b) COMMODITY SUPPLEMENTAL FOOD PROGRAM- Section 5 of the Agriculture and Consumer Protection Act of 1973 (7 U.S.C. 612c note; Public Law 93-86) is amended--

      (1) by striking subsection (a) and inserting the following:

    ‘(a) GRANTS PER ASSIGNED CASELOAD SLOT-

      ‘(1) IN GENERAL- In carrying out the program under section 4 (referred to in this section as the ‘commodity supplemental food program’), for each of fiscal years 2003 through 2007, the Secretary shall provide to each State agency from funds made available to carry out that section (including any such funds remaining available from the preceding fiscal year), a grant per assigned caseload slot for administrative costs incurred by the State agency and local agencies in the State in operating the commodity supplemental food program.

      ‘(2) AMOUNT OF GRANTS-

        ‘(A) FISCAL YEAR 2003- For fiscal year 2003, the amount of each grant per assigned caseload slot shall be equal to the amount of the grant per assigned caseload slot for administrative costs in 2001, adjusted by the percentage change between--

          ‘(i) the value of the State and local government price index, as published by the Bureau of Economic Analysis of the Department of Commerce, for the 12-month period ending June 30, 2001; and

          ‘(ii) the value of that index for the 12-month period ending June 30, 2002.

        ‘(B) FISCAL YEARS 2004 THROUGH 2007- For each of fiscal years 2004 through 2007, the amount of each grant per assigned caseload slot shall be equal to the amount of the grant per assigned caseload slot for the preceding fiscal year, adjusted by the percentage change between--

          ‘(i) the value of the State and local government price index, as published by the Bureau of Economic Analysis of the Department of Commerce, for the 12-month period ending June 30 of the second preceding fiscal year; and

          ‘(ii) the value of that index for the 12-month period ending June 30 of the preceding fiscal year.’;

      (2) in subsection (d)(2), by striking ‘2002’ each place it appears and inserting ‘2007’; and

      (3) by striking subsection (l) and inserting the following:

    ‘(l) USE OF APPROVED FOOD SAFETY TECHNOLOGY-

      ‘(1) IN GENERAL- In acquiring commodities for distribution through a program specified in paragraph (2), the Secretary shall not prohibit the use of any technology to improve food safety that--

        ‘(A) has been approved by the Secretary; or

        ‘(B) has been approved or is otherwise allowed by the Secretary of Health and Human Services.

      ‘(2) PROGRAMS- A program referred to in paragraph (1) is a program authorized under--

        ‘(A) this Act;

        ‘(B) the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.);

        ‘(C) the Emergency Food Assistance Act of 1983 (7 U.S.C. 7501 et seq.);

        ‘(D) the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et seq.); or

        ‘(E) the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.).’.

    (c) ADDITIONAL FUNDING FOR CERTAIN STATES-

      (1) IN GENERAL- Not later than 30 days after the date of enactment of this Act, of the funds of the Commodity Credit Corporation, the Secretary of Agriculture shall make available an amount equal to the amount that the Secretary of Agriculture determines to be necessary to permit each State that began administering the commodity supplemental food program under the Agriculture and Consumer Protection Act of 1973 (7 U.S.C. 612c note; Public Law 93-86) in the 2000 caseload cycle to administer the program, through the 2002 caseload cycle, at a caseload level that is not less than the originally assigned caseload level of the State.

      (2) PROVISION TO STATES- The Secretary shall provide to each State described in paragraph (1) for the purpose described in that paragraph the funds made available under that paragraph.

    (d) EFFECTIVE DATE- The amendment made by subsection (b)(3) takes effect on the date of enactment of this Act.

SEC. 4202. COMMODITY DONATIONS.

    (a) IN GENERAL- The Commodity Distribution Reform Act and WIC Amendments of 1987 (7 U.S.C. 612c note; Public Law 100-237) is amended--

      (1) by redesignating sections 17 and 18 as sections 18 and 19, respectively; and

      (2) by inserting after section 16 the following:

‘SEC. 17. COMMODITY DONATIONS.

    ‘(a) IN GENERAL- Notwithstanding any other provision of law concerning commodity donations, any commodities acquired in the conduct of the operations of the Commodity Credit Corporation and any commodities acquired under section 32 of the Act of August 24, 1935 (7 U.S.C. 612c), to the extent that the commodities are in excess of the quantities of commodities that are essential to carry out other authorized activities of the Commodity Credit Corporation and the Secretary (including any quantity specifically reserved for a specific purpose), may be used for any program authorized to be carried out by the Secretary that involves the acquisition of commodities for use in a domestic feeding program, including any program conducted by the Secretary that provides commodities to individuals in cases of hardship.

    ‘(b) PROGRAMS- A program described in subsection (a) includes a program authorized by--

      ‘(1) the Emergency Food Assistance Act of 1983 (7 U.S.C. 7501 et seq.);

      ‘(2) the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et seq.);

      ‘(3) the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.);

      ‘(4) the Older Americans Act of 1965 (42 U.S.C. 3001 et seq.); or

      ‘(5) such other laws as the Secretary determines to be appropriate.’.

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

SEC. 4203. DISTRIBUTION OF SURPLUS COMMODITIES TO SPECIAL NUTRITION PROJECTS.

    Section 1114(a)(2)(A) of the Agriculture and Food Act of 1981 (7 U.S.C. 1431e(2)(A)) is amended in the first sentence by striking ‘2002’ and inserting ‘2007’.

SEC. 4204. EMERGENCY FOOD ASSISTANCE.

    Section 204(a)(1) of the Emergency Food Assistance Act of 1983 (7 U.S.C. 7508(a)(1)) is amended in the first sentence--

      (1) by striking ‘$50,000,000’ and inserting ‘$60,000,000’;

      (2) by striking ‘1991 through 2002’ and inserting ‘2003 through 2007’;

      (3) by striking ‘administrative’;

      (4) by inserting ‘storage,’ after ‘processing,’; and

      (5) by inserting ‘, including commodities secured by gleaning (as defined in section 111(a) of the Hunger Prevention Act of 1988 (7 U.S.C. 612c note; Public Law 100-435))’ after ‘sources’.

Subtitle C--Child Nutrition and Related Programs

SEC. 4301. COMMODITIES FOR SCHOOL LUNCH PROGRAM.

    (a) IN GENERAL- Section 6(e)(1)(B) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1755(e)(1)(B)) is amended by striking ‘2001’ and inserting ‘2003’.

    (b) EFFECTIVE DATE- The amendment made by this section takes effect on the date of enactment of this Act.

SEC. 4302. ELIGIBILITY FOR FREE AND REDUCED PRICE MEALS.

    (a) IN GENERAL- Section 9(b) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1758(b)) is amended by adding at the end the following:

      ‘(7) EXCLUSION OF CERTAIN MILITARY HOUSING ALLOWANCES- For each of fiscal years 2002 and 2003, the amount of a basic allowance provided under section 403 of title 37, United States Code, on behalf of a member of a uniformed service for housing that is acquired or constructed under subchapter IV of chapter 169 of title 10, United States Code, or any related provision of law, shall not be considered to be income for the purpose of determining the eligibility of a child who is a member of the household of the member of a uniformed service for free or reduced price lunches under this Act.’.

    (b) EFFECTIVE DATE- The amendment made by this section takes effect on the date of enactment of this Act.

SEC. 4303. PURCHASES OF LOCALLY PRODUCED FOODS.

    Section 9 of the Richard B. Russell National School Lunch Act (42 U.S.C. 1758) is amended by adding at the end the following:

    ‘(j) PURCHASES OF LOCALLY PRODUCED FOODS-

      ‘(1) IN GENERAL- The Secretary shall--

        ‘(A) encourage institutions participating in the school lunch program under this Act and the school breakfast program established by section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773) to purchase, in addition to other food purchases, locally produced foods for school meal programs, to the maximum extent practicable and appropriate;

        ‘(B) advise institutions participating in a program described in subparagraph (A) of the policy described in that subparagraph and post information concerning the policy on the website maintained by the Secretary; and

        ‘(C) in accordance with requirements established by the Secretary, provide startup grants to not more than 200 institutions to defray the initial costs of equipment, materials, and storage facilities, and similar costs, incurred in carrying out the policy described in subparagraph (A).

      ‘(2) AUTHORIZATION OF APPROPRIATIONS-

        ‘(A) IN GENERAL- There is authorized to be appropriated to carry out this subsection $400,000 for each of fiscal years 2003 through 2007, to remain available until expended.

        ‘(B) LIMITATION- No amounts may be made available to carry out this subsection unless specifically provided by an appropriation Act.’.

SEC. 4304. APPLICABILITY OF BUY-AMERICAN REQUIREMENT TO PUERTO RICO.

    Section 12(n) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1760(n)) is amended by adding at the end the following:

      ‘(4) APPLICABILITY TO PUERTO RICO- Paragraph (2)(A) shall apply to a school food authority in the Commonwealth of Puerto Rico with respect to domestic commodities or products that are produced in the Commonwealth of Puerto Rico in sufficient quantities to meet the needs of meals provided under the school lunch program under this Act or the school breakfast program under section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773).’.

SEC. 4305. FRUIT AND VEGETABLE PILOT PROGRAM.

    (a) IN GENERAL- Section 18 of the Richard B. Russell National School Lunch Act (42 U.S.C. 1769) is amended by adding at the end the following:

    ‘(g) FRUIT AND VEGETABLE PILOT PROGRAM-

      ‘(1) IN GENERAL- In the school year beginning July 2002, the Secretary shall carry out a pilot program to make available to students in 25 elementary or secondary schools in each of 4 States, and in elementary or secondary schools on 1 Indian reservation, free fresh and dried fruits and fresh vegetables throughout the school day in 1 or more areas designated by the school.

      ‘(2) PUBLICITY- A school that participates in the pilot program shall widely publicize within the school the availability of free fruits and vegetables under the pilot program.

      ‘(3) REPORT- Not later than May 1, 2003, the Secretary, acting through the Administrator of the Economic Research Service, shall report to the Committee on Education and the Workforce of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate on the results of the pilot program.

      ‘(4) FUNDING- The Secretary shall use not more than $6,000,000 of funds made available under section 32 of the Act of August 24, 1935 (7 U.S.C. 612c), to carry out this subsection (other than paragraph (3)).’.

    (b) EFFECTIVE DATE- The amendment made by this section takes effect on the date of enactment of this Act.

SEC. 4306. ELIGIBILITY FOR ASSISTANCE UNDER THE SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN.

    (a) IN GENERAL- Section 17(d)(2)(B)(i) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(d)(2)(B)(i)) is amended--

      (1) by striking ‘basic allowance for housing’ and inserting the following: ‘basic allowance--

        ‘(I) for housing’;

      (2) by striking ‘and’ at the end and inserting ‘or’; and

      (3) by adding at the end the following:

        ‘(II) provided under section 403 of title 37, United States Code, for housing that is acquired or constructed under subchapter IV of chapter 169 of title 10, United States Code, or any related provision of law; and’.

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

SEC. 4307. WIC FARMERS’ MARKET NUTRITION PROGRAM.

    (a) IN GENERAL- Section 17(m)(9) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(m)(9)) is amended--

      (1) by striking ‘(9)(A) There’ and inserting the following:

      ‘(9) FUNDING-

        ‘(A) IN GENERAL-

          ‘(i) AUTHORIZATION OF APPROPRIATIONS- There’; and

      (2) in subparagraph (A), by adding at the end the following:

          ‘(ii) MANDATORY FUNDING- Not later than 30 days after the date of enactment of the Food Stamp Reauthorization Act of 2002, of the funds of the Commodity Credit Corporation, the Secretary shall make available to carry out this subsection $15,000,000, to remain available until expended.’.

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

Subtitle D--Miscellaneous

SEC. 4401. PARTIAL RESTORATION OF BENEFITS TO LEGAL IMMIGRANTS.

    (a) RESTORATION OF BENEFITS TO DISABLED ALIENS- Section 402(a)(2)(F) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2)(F)) is amended by striking ‘(i) was’ and all that follows through ‘(II) in the case’ and inserting the following:

          ‘(i) in the case of the specified Federal program described in paragraph (3)(A)--

            ‘(I) was lawfully residing in the United States on August 22, 1996; and

            ‘(II) is blind or disabled (as defined in paragraph (2) or (3) of section 1614(a) of the Social Security Act (42 U.S.C. 1382c(a))); and

          ‘(ii) in the case’.

    (b) RESTORATION OF BENEFITS TO ALL QUALIFIED ALIEN CHILDREN-

      (1) IN GENERAL- Section 402(a)(2)(J) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2)(J)) is amended by striking ‘who’ and all that follows through ‘is under’ and inserting ‘who is under’.

      (2) CONFORMING AMENDMENTS-

        (A) Section 403(c)(2) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1613(c)(2)) is amended by adding at the end the following:

        ‘(L) Assistance or benefits provided to individuals under the age of 18 under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.).’.

        (B) Section 421(d) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1631(d)) is amended by adding at the end the following:

      ‘(3) This section shall not apply to assistance or benefits under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) to the extent that a qualified alien is eligible under section 402(a)(2)(J).’.

        (C) Section 5(i)(2)(E) of the Food Stamp Act of 1977 (7 U.S.C. 2014(i)(2)(E)) is amended by inserting before the period at the end the following: ‘, or to any alien who is under 18 years of age’.

      (3) EFFECTIVE DATE- The amendments made by this subsection take effect on October 1, 2003.

    (c) FOOD STAMP EXCEPTION FOR CERTAIN QUALIFIED ALIENS-

      (1) IN GENERAL- Section 402(a)(2) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2)) is amended by adding at the end the following:

        ‘(L) FOOD STAMP EXCEPTION FOR CERTAIN QUALIFIED ALIENS- With respect to eligibility for benefits for the specified Federal program described in paragraph (3)(B), paragraph (1) shall not apply to any qualified alien who has resided in the United States with a status within the meaning of the term ‘qualified alien’ for a period of 5 years or more beginning on the date of the alien’s entry into the United States.’.

      (2) EFFECTIVE DATE- The amendment made by paragraph (1) takes effect on April 1, 2003.

SEC. 4402. SENIORS FARMERS’ MARKET NUTRITION PROGRAM.

    (a) ESTABLISHMENT- The Secretary of Agriculture shall use $5,000,000 for fiscal year 2002, and $15,000,000 for each of fiscal years 2003 through 2007, of the funds available to the Commodity Credit Corporation to carry out and expand a seniors farmers’ market nutrition program.

    (b) PROGRAM PURPOSES- The purposes of the seniors farmers’ market nutrition program are--

      (1) to provide resources in the form of fresh, nutritious, unprepared, locally grown fruits, vegetables, and herbs from farmers’ markets, roadside stands, and community supported agriculture programs to low-income seniors;

      (2) to increase the domestic consumption of agricultural commodities by expanding or aiding in the expansion of domestic farmers’ markets, roadside stands, and community supported agriculture programs; and

      (3) to develop or aid in the development of new and additional farmers’ markets, roadside stands, and community supported agriculture programs.

    (c) REGULATIONS- The Secretary may issue such regulations as the Secretary considers necessary to carry out the seniors farmers’ market nutrition program.

SEC. 4403. NUTRITION INFORMATION AND AWARENESS PILOT PROGRAM.

    (a) ESTABLISHMENT- The Secretary of Agriculture may establish, in not more than 5 States, for a period not to exceed 4 years for each participating State, a pilot program to increase the domestic consumption of fresh fruits and vegetables.

    (b) PURPOSE-

      (1) IN GENERAL- Subject to paragraph (2), the purpose of the program shall be to provide funds to States solely for the purpose of assisting eligible public and private sector entities with cost-share assistance to carry out demonstration projects--

        (A) to increase fruit and vegetable consumption; and

        (B) to convey related health promotion messages.

      (2) LIMITATION- Funds made available to a State under the program shall not be used to disparage any agricultural commodity.

    (c) SELECTION OF STATES-

      (1) IN GENERAL- In selecting States to participate in the program, the Secretary shall take into consideration, with respect to projects and activities proposed to be carried out under the program--

        (A) experience in carrying out similar projects or activities;

        (B) innovative approaches; and

        (C) the ability of the State to promote and track increases in levels of fruit and vegetable consumption.

      (2) ENHANCEMENT OF EXISTING STATE PROGRAMS- The Secretary may use the pilot program to enhance existing State programs that are consistent with the purpose of the pilot program specified in subsection (b).

    (d) ELIGIBLE PUBLIC AND PRIVATE SECTOR ENTITIES-

      (1) IN GENERAL- A participating State shall establish eligibility criteria under which the State may select public and private sector entities to carry out demonstration projects under the program.

      (2) LIMITATION- No funds made available to States under the program shall be provided by a State to any foreign for-profit corporation.

    (e) FEDERAL SHARE- The Federal share of the cost of any project or activity carried out using funds provided under this section shall be 50 percent.

    (f) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this section $10,000,000 for each of fiscal years 2002 through 2007.

SEC. 4404. HUNGER FELLOWSHIP PROGRAM.

    (a) SHORT TITLE; FINDINGS-

      (1) SHORT TITLE- This section may be cited as the ‘Congressional Hunger Fellows Act of 2002’.

      (2) FINDINGS- The Congress finds as follows:

        (A) There is a critical need for compassionate individuals who are committed to assisting people who suffer from hunger as well as a need for such individuals to initiate and administer solutions to the hunger problem.

        (B) Bill Emerson, the distinguished late Representative from the 8th District of Missouri, demonstrated his commitment to solving the problem of hunger in a bipartisan manner, his commitment to public service, and his great affection for the institution and the ideals of the United States Congress.

        (C) George T. (Mickey) Leland, the distinguished late Representative from the 18th District of Texas, demonstrated his compassion for those in need, his high regard for public service, and his lively exercise of political talents.

        (D) The special concern that Mr. Emerson and Mr. Leland demonstrated during their lives for the hungry and poor was an inspiration for others to work toward the goals of equality and justice for all.

        (E) These two outstanding leaders maintained a special bond of friendship regardless of political affiliation and worked together to encourage future leaders to recognize and provide service to others, and therefore it is especially appropriate to honor the memory of Mr. Emerson and Mr. Leland by creating a fellowship program to develop and train the future leaders of the United States to pursue careers in humanitarian service.

    (b) ESTABLISHMENT- There is established as an independent entity of the legislative branch of the United States Government the Congressional Hunger Fellows Program (hereinafter in this section referred to as the ‘Program’).

    (c) BOARD OF TRUSTEES-

      (1) IN GENERAL- The Program shall be subject to the supervision and direction of a Board of Trustees.

      (2) MEMBERS OF THE BOARD OF TRUSTEES-

        (A) APPOINTMENT- The Board shall be composed of 6 voting members appointed under clause (i) and one nonvoting ex officio member designated in clause (ii) as follows:

          (i) VOTING MEMBERS- (I) The Speaker of the House of Representatives shall appoint two members.

          (II) The minority leader of the House of Representatives shall appoint one member.

          (III) The majority leader of the Senate shall appoint two members.

          (IV) The minority leader of the Senate shall appoint one member.

          (ii) NONVOTING MEMBER- The Executive Director of the program shall serve as a nonvoting ex officio member of the Board.

        (B) TERMS- Members of the Board shall serve a term of 4 years.

        (C) VACANCY-

          (i) AUTHORITY OF BOARD- A vacancy in the membership of the Board does not affect the power of the remaining members to carry out this section.

          (ii) APPOINTMENT OF SUCCESSORS- A vacancy in the membership of the Board shall be filled in the same manner in which the original appointment was made.

          (iii) INCOMPLETE TERM- If a member of the Board does not serve the full term applicable to the member, the individual appointed to fill the resulting vacancy shall be appointed for the remainder of the term of the predecessor of the individual.

        (D) CHAIRPERSON- As the first order of business of the first meeting of the Board, the members shall elect a Chairperson.

        (E) COMPENSATION-

          (i) IN GENERAL- Subject to clause (ii), members of the Board may not receive compensation for service on the Board.

          (ii) TRAVEL- Members of the Board may be reimbursed for travel, subsistence, and other necessary expenses incurred in carrying out the duties of the program.

      (3) DUTIES-

        (A) BYLAWS-

          (i) ESTABLISHMENT- The Board shall establish such bylaws and other regulations as may be appropriate to enable the Board to carry out this section, including the duties described in this paragraph.

          (ii) CONTENTS- Such bylaws and other regulations shall include provisions--

            (I) for appropriate fiscal control, funds accountability, and operating principles;

            (II) to prevent any conflict of interest, or the appearance of any conflict of interest, in the procurement and employment actions taken by the Board or by any officer or employee of the Board and in the selection and placement of individuals in the fellowships developed under the program;

            (III) for the resolution of a tie vote of the members of the Board; and

            (IV) for authorization of travel for members of the Board.

          (iii) TRANSMITTAL TO CONGRESS- Not later than 90 days after the date of the first meeting of the Board, the Chairperson of the Board shall transmit to the appropriate congressional committees a copy of such bylaws.

        (B) BUDGET- For each fiscal year the program is in operation, the Board shall determine a budget for the program for that fiscal year. All spending by the program shall be pursuant to such budget unless a change is approved by the Board.

        (C) PROCESS FOR SELECTION AND PLACEMENT OF FELLOWS- The Board shall review and approve the process established by the Executive Director for the selection and placement of individuals in the fellowships developed under the program.

        (D) ALLOCATION OF FUNDS TO FELLOWSHIPS- The Board of Trustees shall determine the priority of the programs to be carried out under this section and the amount of funds to be allocated for the Emerson and Leland fellowships.

    (d) PURPOSES; AUTHORITY OF PROGRAM-

      (1) PURPOSES- The purposes of the program are--

        (A) to encourage future leaders of the United States to pursue careers in humanitarian service, to recognize the needs of people who are hungry and poor, and to provide assistance and compassion for those in need;

        (B) to increase awareness of the importance of public service; and

        (C) to provide training and development opportunities for such leaders through placement in programs operated by appropriate organizations or entities.

      (2) AUTHORITY- The program is authorized to develop such fellowships to carry out the purposes of this section, including the fellowships described in paragraph (3).

      (3) FELLOWSHIPS-

        (A) IN GENERAL- The program shall establish and carry out the Bill Emerson Hunger Fellowship and the Mickey Leland Hunger Fellowship.

        (B) CURRICULUM-

          (i) IN GENERAL- The fellowships established under subparagraph (A) shall provide experience and training to develop the skills and understanding necessary to improve the humanitarian conditions and the lives of individuals who suffer from hunger, including--

            (I) training in direct service to the hungry in conjunction with community-based organizations through a program of field placement; and

            (II) experience in policy development through placement in a governmental entity or nonprofit organization.

          (ii) FOCUS OF BILL EMERSON HUNGER FELLOWSHIP- The Bill Emerson Hunger Fellowship shall address hunger and other humanitarian needs in the United States.

          (iii) FOCUS OF MICKEY LELAND HUNGER FELLOWSHIP- The Mickey Leland Hunger Fellowship shall address international hunger and other humanitarian needs.

          (iv) WORKPLAN- To carry out clause (i) and to assist in the evaluation of the fellowships under paragraph (4), the program shall, for each fellow, approve a work plan that identifies the target objectives for the fellow in the fellowship, including specific duties and responsibilities related to those objectives.

        (C) PERIOD OF FELLOWSHIP-

          (i) EMERSON FELLOW- A Bill Emerson Hunger Fellowship awarded under this paragraph shall be for no more than 1 year.

          (ii) LELAND FELLOW- A Mickey Leland Hunger Fellowship awarded under this paragraph shall be for no more than 2 years. Not less than 1 year of the fellowship shall be dedicated to fulfilling the requirement of subparagraph (B)(i)(I).

        (D) SELECTION OF FELLOWS-

          (i) IN GENERAL- A fellowship shall be awarded pursuant to a nationwide competition established by the program.

          (ii) QUALIFICATION- A successful applicant shall be an individual who has demonstrated--

            (I) an intent to pursue a career in humanitarian service and outstanding potential for such a career;

            (II) leadership potential or actual leadership experience;

            (III) diverse life experience;

            (IV) proficient writing and speaking skills;

            (V) an ability to live in poor or diverse communities; and

            (VI) such other attributes as determined to be appropriate by the Board.

          (iii) AMOUNT OF AWARD-

            (I) IN GENERAL- Each individual awarded a fellowship under this paragraph shall receive a living allowance and, subject to subclause (II), an end-of-service award as determined by the program.

            (II) REQUIREMENT FOR SUCCESSFUL COMPLETION OF FELLOWSHIP- Each individual awarded a fellowship under this paragraph shall be entitled to receive an end-of-service award at an appropriate rate for each month of satisfactory service as determined by the Executive Director.

          (iv) RECOGNITION OF FELLOWSHIP AWARD-

            (I) EMERSON FELLOW- An individual awarded a fellowship from the Bill Emerson Hunger Fellowship shall be known as an ‘Emerson Fellow’.

            (II) LELAND FELLOW- An individual awarded a fellowship from the Mickey Leland Hunger Fellowship shall be known as a ‘Leland Fellow’.

      (4) EVALUATION- The program shall conduct periodic evaluations of the Bill Emerson and Mickey Leland Hunger Fellowships. Such evaluations shall include the following:

        (A) An assessment of the successful completion of the work plan of the fellow.

        (B) An assessment of the impact of the fellowship on the fellows.

        (C) An assessment of the accomplishment of the purposes of the program.

        (D) An assessment of the impact of the fellow on the community.

    (e) TRUST FUND-

      (1) ESTABLISHMENT- There is established the Congressional Hunger Fellows Trust Fund (hereinafter in this section referred to as the ‘Fund’) in the Treasury of the United States, consisting of amounts appropriated to the Fund under subsection (i), amounts credited to it under paragraph (3), and amounts received under subsection (g)(3)(A).

      (2) INVESTMENT OF FUNDS- The Secretary of the Treasury shall invest the full amount of the Fund. Each investment shall be made in an interest bearing obligation of the United States or an obligation guaranteed as to principal and interest by the United States that, as determined by the Secretary in consultation with the Board, has a maturity suitable for the Fund.

      (3) RETURN ON INVESTMENT- Except as provided in subsection (f)(2), the Secretary of the Treasury shall credit to the Fund the interest on, and the proceeds from the sale or redemption of, obligations held in the Fund.

    (f) EXPENDITURES; AUDITS-

      (1) IN GENERAL- The Secretary of the Treasury shall transfer to the program from the amounts described in subsection (e)(3) and subsection (g)(3)(A) such sums as the Board determines are necessary to enable the program to carry out the provisions of this section.

      (2) LIMITATION- The Secretary may not transfer to the program the amounts appropriated to the Fund under subsection (i).

      (3) USE OF FUNDS- Funds transferred to the program under paragraph (1) shall be used for the following purposes:

        (A) STIPENDS FOR FELLOWS- To provide for a living allowance for the fellows.

        (B) TRAVEL OF FELLOWS- To defray the costs of transportation of the fellows to the fellowship placement sites.

        (C) INSURANCE- To defray the costs of appropriate insurance of the fellows, the program, and the Board.

        (D) TRAINING OF FELLOWS- To defray the costs of preservice and midservice education and training of fellows.

        (E) SUPPORT STAFF- Staff described in subsection (g).

        (F) AWARDS- End-of-service awards under subsection (d)(3)(D)(iii)(II).

        (G) ADDITIONAL APPROVED USES- For such other purposes that the Board determines appropriate to carry out the program.

      (4) AUDIT BY GAO-

        (A) IN GENERAL- The Comptroller General of the United States shall conduct an annual audit of the accounts of the program.

        (B) BOOKS- The program shall make available to the Comptroller General all books, accounts, financial records (including records of salaries of the Executive Director and other personnel), reports, files, and all other papers, things, or property belonging to or in use by the program and necessary to facilitate such audit.

        (C) REPORT TO CONGRESS- The Comptroller General shall submit a copy of the results of each such audit to the appropriate congressional committees.

    (g) STAFF; POWERS OF PROGRAM-

      (1) EXECUTIVE DIRECTOR-

        (A) IN GENERAL- The Board shall appoint an Executive Director of the program who shall administer the program. The Executive Director shall carry out such other functions consistent with the provisions of this section as the Board shall prescribe.

        (B) RESTRICTION- The Executive Director may not serve as Chairperson of the Board.

        (C) COMPENSATION- The Executive Director shall be paid at a rate not to exceed the rate of basic pay payable for level V of the Executive Schedule under section 5316 of title 5, United States Code.

      (2) STAFF-

        (A) IN GENERAL- With the approval of a majority of the Board, the Executive Director may appoint and fix the pay of additional personnel as the Executive Director considers necessary and appropriate to carry out the functions of the provisions of this section.

        (B) COMPENSATION- An individual appointed under subparagraph (A) shall be paid at a rate not to exceed the rate of basic pay payable for level GS-15 of the General Schedule.

      (3) POWERS- In order to carry out the provisions of this section, the program may perform the following functions:

        (A) GIFTS- The program may solicit, accept, use, and dispose of gifts, bequests, or devises of services or property, both real and personal, for the purpose of aiding or facilitating the work of the program. Gifts, bequests, or devises of money and proceeds from sales of other property received as gifts, bequests, or devises shall be deposited in the Fund and shall be available for disbursement upon order of the Board.

        (B) EXPERTS AND CONSULTANTS- The program may procure temporary and intermittent services under section 3109 of title 5, United States Code, but at rates for individuals not to exceed the daily equivalent of the maximum annual rate of basic pay payable for GS-15 of the General Schedule.

        (C) CONTRACT AUTHORITY- The program may contract, with the approval of a majority of the members of the Board, with and compensate Government and private agencies or persons without regard to section 3709 of the Revised Statutes (41 U.S.C. 5).

        (D) OTHER NECESSARY EXPENDITURES- The program shall make such other expenditures which the program considers necessary to carry out the provisions of this section, but excluding project development.

    (h) REPORT- Not later than December 31 of each year, the Board shall submit to the appropriate congressional committees a report on the activities of the program carried out during the previous fiscal year, and shall include the following:

      (1) An analysis of the evaluations conducted under subsection (d)(4) (relating to evaluations of the Emerson and Leland fellowships and accomplishment of the program purposes) during that fiscal year.

      (2) A statement of the total amount of funds attributable to gifts received by the program in that fiscal year (as authorized under subsection (g)(3)(A)), and the total amount of such funds that were expended to carry out the program that fiscal year.

    (i) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated $18,000,000 to carry out the provisions of this section.

    (j) DEFINITION- In this section, the term ‘appropriate congressional committees’ means--

      (1) the Committee on Agriculture and the Committee on International Relations of the House of Representatives; and

      (2) the Committee on Agriculture, Nutrition, and Forestry and the Committee on Foreign Relations of the Senate.

SEC. 4405. GENERAL EFFECTIVE DATE.

    Except as otherwise provided in this title, the amendments made by this title take effect on October 1, 2002.

TITLE V--CREDIT

Subtitle A--Farm Ownership Loans

SEC. 5001. DIRECT LOANS.

    Section 302(b)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1922(b)(1)) is amended by striking ‘operated’ and inserting ‘participated in the business operations of’.

SEC. 5002. FINANCING OF BRIDGE LOANS.

    Section 303(a)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1923(a)(1)) is amended--

      (1) in subparagraph (C), by striking ‘or’ at the end;

      (2) in subparagraph (D), by striking the period at the end and inserting ‘; or’; and

      (3) by adding at the end the following:

        ‘(E) refinancing a temporary bridge loan made by a commercial or cooperative lender to a farmer or rancher for the acquisition of land for a farm or ranch, if--

          ‘(i) the Secretary approved an application for a direct farm ownership loan to the farmer or rancher for acquisition of the land; and

          ‘(ii) funds for direct farm ownership loans under section 346(b) were not available at the time at which the application was approved.’.

SEC. 5003. AMOUNT OF GUARANTEE OF LOANS FOR FARM OPERATIONS ON TRIBAL LANDS.

    Section 309(h) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1929(h)) is amended--

      (1) in paragraph (4), by striking ‘paragraphs (5) and (6)’ and inserting ‘paragraphs (5), (6), and (7)’; and

      (2) by adding at the end the following:

      ‘(7) AMOUNT OF GUARANTEE OF LOANS FOR FARM OPERATIONS ON TRIBAL LANDS- In the case of an operating loan made to a farmer or rancher whose farm or ranch land is subject to the jurisdiction of an Indian tribe and whose loan is secured by 1 or more security instruments that are subject to the jurisdiction of an Indian tribe, the Secretary shall guarantee 95 percent of the loan.’.

SEC. 5004. GUARANTEE OF LOANS MADE UNDER STATE BEGINNING FARMER OR RANCHER PROGRAMS.

    Section 309 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1929) is amended by adding at the end the following:

    ‘(j) GUARANTEE OF LOANS MADE UNDER STATE BEGINNING FARMER OR RANCHER PROGRAMS- The Secretary may guarantee under this title a loan made under a State beginning farmer or rancher program, including a loan financed by the net proceeds of a qualified small issue agricultural bond for land or property described in section 144(a)(12)(B)(ii) of the Internal Revenue Code of 1986.’.

SEC. 5005. DOWN PAYMENT LOAN PROGRAM.

    Section 310E of the Consolidated Farm and Rural Development Act (7 U.S.C. 1935) is amended--

      (1) in subsection (b)--

        (A) in paragraph (1), by striking ‘30 percent’ and inserting ‘40 percent’; and

        (B) in paragraph (3), by striking ‘10 years’ and inserting ‘15 years’; and

      (2) in subsection (c)(3)(B), by striking ‘10-year’ and inserting ‘15-year’.

SEC. 5006. BEGINNING FARMER AND RANCHER CONTRACT LAND SALES PROGRAM.

    Subtitle A of the Consolidated Farm and Rural Development Act (7 U.S.C. 1922 et seq.) is amended by adding at the end the following:

‘SEC. 310F. BEGINNING FARMER AND RANCHER CONTRACT LAND SALES PROGRAM.

    ‘(a) IN GENERAL- If the Secretary makes a determination that the risk is comparable under subsection (b), the Secretary shall carry out a pilot program in not fewer than 5 States, as determined by the Secretary, to guarantee up to 5 loans per State in each of fiscal years 2003 through 2007 made by a private seller of a farm or ranch to a qualified beginning farmer or rancher on a contract land sale basis, if the loan meets applicable underwriting criteria and a commercial lending institution agrees to serve as escrow agent.

    ‘(b) DATE OF COMMENCEMENT OF PROGRAM- Not later than October 1, 2002, the Secretary shall make a determination on whether guarantees of contract land sales present a risk that is comparable with the risk presented in the case of guarantees to commercial lenders.’.

Subtitle B--Operating Loans

SEC. 5101. DIRECT LOANS.

    Section 311(c) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1941(c)) is amended--

      (1) in paragraph (1)--

        (A) in the matter that precedes subparagraph (A), by striking ‘paragraph (3)’ and inserting ‘paragraphs (3) and (4)’; and

        (B) in subparagraph (A), by striking ‘who has not’ and all that follows through ‘5 years’; and

      (2) by adding at the end the following:

      ‘(4) WAIVERS-

        ‘(A) FARM AND RANCH OPERATIONS ON TRIBAL LANDS- The Secretary shall waive the limitation under paragraph (1)(C) or (3) for a direct loan made under this subtitle to a farmer or rancher whose farm or ranch land is subject to the jurisdiction of an Indian tribe and whose loan is secured by 1 or more security instruments that are subject to the jurisdiction of an Indian tribe if the Secretary determines that commercial credit is not generally available for such farm or ranch operations.

        ‘(B) OTHER FARM AND RANCH OPERATIONS- On a case-by-case determination not subject to administrative appeal, the Secretary may grant a borrower a waiver, 1 time only for a period of 2 years, of the limitation under paragraph (1)(C) or (3) for a direct operating loan if the borrower demonstrates to the satisfaction of the Secretary that--

          ‘(i) the borrower has a viable farm or ranch operation;

          ‘(ii) the borrower applied for commercial credit from at least 2 commercial lenders;

          ‘(iii) the borrower was unable to obtain a commercial loan (including a loan guaranteed by the Secretary); and

          ‘(iv) the borrower successfully has completed, or will complete within 1 year, borrower training under section 359 (from which requirement the Secretary shall not grant a waiver under section 359(f)).’.

SEC. 5102. SUSPENSION OF LIMITATION ON PERIOD FOR WHICH BORROWERS ARE ELIGIBLE FOR GUARANTEED ASSISTANCE.

    During the period beginning January 1, 2002, and ending December 31, 2006, section 319(b) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1949(b)) shall have no force or effect.

Subtitle C--Emergency Loans

SEC. 5201. EMERGENCY LOANS IN RESPONSE TO AN EMERGENCY RESULTING FROM QUARANTINES.

    (a) LOAN AUTHORITY- Section 321(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1961(a)) is amended--

      (1) in each of the 1st and 3rd sentences, by striking ‘a natural disaster in the United States or by’ and inserting ‘a quarantine imposed by the Secretary under the Plant Protection Act or the animal quarantine laws (as defined in section 2509 of the Food, Agriculture, Conservation, and Trade Act of 1990), a natural disaster in the United States, or’; and

      (2) in the 4th sentence--

        (A) by striking ‘a natural disaster’ and inserting ‘such a quarantine or natural disaster’; and

        (B) by striking ‘by such natural disaster’ and inserting ‘by such quarantine or natural disaster’.

    (b) CONFORMING AMENDMENT- Section 323 of such Act (7 U.S.C. 1963) is amended by inserting ‘quarantine,’ before ‘natural disaster’.

Subtitle D--Administrative Provisions

SEC. 5301. EVALUATIONS OF DIRECT AND GUARANTEED LOAN PROGRAMS.

    (a) STUDIES- The Secretary of Agriculture shall conduct 2 studies of the direct and guaranteed loan progams under sections 302 and 311 of the Consolidated Farm and Rural Development Act, each of which shall include an examination of the number, average principal amount, and delinquency and default rates of loans provided or guaranteed during the period covered by the study.

    (b) PERIODS COVERED-

      (1) FIRST STUDY- One study under subsection (a) shall cover the 1-year period that begins 1 year after the date of the enactment of this section.

      (2) SECOND STUDY- One study under subsection (a) shall cover the 1-year period that begins 3 years after such date of enactment.

    (c) REPORTS TO THE CONGRESS- At the end of the period covered by each study under this section, the Secretary of Agriculture shall submit to the Congress a report that contains an evaluation of the results of the study, including an analysis of the effectiveness of loan programs referred to in subsection (a) in meeting the credit needs of agricultural producers in an efficient and fiscally responsible manner.

SEC. 5302. ELIGIBILITY OF TRUSTS AND LIMITED LIABILITY COMPANIES FOR FARM OWNERSHIP LOANS, FARM OPERATING LOANS, AND EMERGENCY LOANS.

    (a) IN GENERAL- Sections 302(a), 311(a), and 321(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1922(a), 1941(a), and 1961(a)) are each amended by striking ‘and joint operations’ each place it appears and inserting ‘joint operations, trusts, and limited liability companies’.

    (b) CONFORMING AMENDMENT- Section 321(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1961(a)) is amended by striking ‘or joint operations’ each place it appears and inserting ‘joint operations, trusts, or limited liability companies’.

SEC. 5303. DEBT SETTLEMENT.

    Section 331(b)(4) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981(b)(4)) is amended--

      (1) by striking ‘The Secretary may release’ and inserting ‘After consultation with a local or area county committee, the Secretary may release’; and

      (2) by striking ‘carried out--’ and all that follows through ‘(B) after’ and inserting ‘carried out after’.

SEC. 5304. TEMPORARY AUTHORITY TO ENTER INTO CONTRACTS; PRIVATE COLLECTION AGENCIES.

    (a) IN GENERAL- Section 331 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981) is amended by striking subsections (d) and (e).

    (b) APPLICATION- The amendment made by subsection (a) shall not apply to a contract entered into before the effective date of this Act.

SEC. 5305. INTEREST RATE OPTIONS FOR LOANS IN SERVICING.

    Section 331B of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981b) is amended--

      (1) by striking ‘lower of (1) the’ and inserting the following: ‘lowest of--

      ‘(1) the’; and

      (2) by striking ‘original loan or (2) the’ and inserting the following: ‘original loan;

      ‘(2) the rate being charged by the Secretary for loans, other than guaranteed loans, of the same type at the time at which the borrower applies for a deferral, consolidation, rescheduling, or reamortization; or

      ‘(3) the’.

SEC. 5306. ELIMINATION OF REQUIREMENT THAT SECRETARY REQUIRE COUNTY COMMITTEES TO CERTIFY IN WRITING THAT CERTAIN LOAN REVIEWS HAVE BEEN CONDUCTED.

    Section 333(2) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1983(2)) is amended to read as follows:

      ‘(2) except with respect to a loan under section 306, 310B, or 314--

        ‘(A) an annual review of the credit history and business operation of the borrower; and

        ‘(B) an annual review of the continued eligibility of the borrower for the loan;’.

SEC. 5307. SIMPLIFIED LOAN GUARANTEE APPLICATION AVAILABLE FOR LOANS OF GREATER AMOUNTS.

    Section 333A(g)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1983a(g)(1)) is amended by striking ‘$50,000’ and inserting ‘$125,000’.

SEC. 5308. INVENTORY PROPERTY.

    Section 335(c) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1985(c)) is amended--

      (1) in paragraph (1)--

        (A) in subparagraph (B)--

          (i) in clause (i), by striking ‘75 days’ and inserting ‘135 days’; and

          (ii) by adding at the end the following:

          ‘(iv) COMBINING AND DIVIDING OF PROPERTY- To the maximum extent practicable, the Secretary shall maximize the opportunity for beginning farmers and ranchers to purchase real property acquired by the Secretary under this title by combining or dividing inventory parcels of the property in such manner as the Secretary determines to be appropriate.’; and

        (B) in subparagraph (C)--

          (i) by striking ‘75 days’ and inserting ‘135 days’; and

          (ii) by striking ‘75-day period’ and inserting ‘135-day period’; and

      (2) by striking paragraph (2) and inserting the following:

      ‘(2) PREVIOUS LEASE- In the case of real property acquired before April 4, 1996, that the Secretary leased before April 4, 1996, not later than 60 days after the lease expires, the Secretary shall offer to sell the property in accordance with paragraph (1).’.

SEC. 5309. ADMINISTRATION OF CERTIFIED LENDERS AND PREFERRED CERTIFIED LENDERS PROGRAMS.

    Section 339 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1989) is amended by adding at the end the following:

    ‘(e) ADMINISTRATION OF CERTIFIED LENDERS AND PREFERRED CERTIFIED LENDERS PROGRAMS- The Secretary may administer the loan guarantee programs under subsections (c) and (d) through central offices established in States or in multi-State areas.’.

SEC. 5310. DEFINITIONS.

    (a) QUALIFIED BEGINNING FARMER OR RANCHER- Section 343(a)(11)(F) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1991(a)(11)(F)) is amended by striking ‘25 percent’ and inserting ‘30 percent’.

    (b) DEBT FORGIVENESS- Section 343(a)(12)(B) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1991(a)(12)(B)) is amended to read as follows:

        ‘(B) EXCEPTIONS- The term ‘debt forgiveness’ does not include--

          ‘(i) consolidation, rescheduling, reamortization, or deferral of a loan; or

          ‘(ii) any write-down provided as part of a resolution of a discrimination complaint against the Secretary.’.

SEC. 5311. LOAN AUTHORIZATION LEVELS.

    Section 346(b)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1994(b)(1)) is amended to read as follows:

      ‘(1) IN GENERAL- The Secretary may make or guarantee loans under subtitles A and B from the Agricultural Credit Insurance Fund provided for in section 309 for not more than $3,796,000,000 for each of fiscal years 2003 through 2007, of which, for each fiscal year--

        ‘(A) $770,000,000 shall be for direct loans, of which--

          ‘(i) $205,000,000 shall be for farm ownership loans under subtitle A; and

          ‘(ii) $565,000,000 shall be for operating loans under subtitle B; and

        ‘(B) $3,026,000,000 shall be for guaranteed loans, of which--

          ‘(i) $1,000,000,000 shall be for guarantees of farm ownership loans under subtitle A; and

          ‘(ii) $2,026,000,000 shall be for guarantees of operating loans under subtitle B.’.

SEC. 5312. RESERVATION OF FUNDS FOR DIRECT OPERATING LOANS FOR BEGINNING FARMERS AND RANCHERS.

    Section 346(b)(2)(A)(ii)(III) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1994(b)(2)(A)(ii)(III)) is amended by striking ‘2000 through 2002’ and inserting ‘2003 through 2007’.

SEC. 5313. INTEREST RATE REDUCTION PROGRAM.

    Section 351 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1999) is amended--

      (1) in subsection (a)--

        (A) by striking ‘PROGRAM- ’ and all that follows through ‘The Secretary’ and inserting ‘PROGRAM- The Secretary’; and

        (B) by striking paragraph (2); and

      (2) in subsection (e), by striking paragraph (2) and inserting the following:

      ‘(2) MAXIMUM AMOUNT OF FUNDS-

        ‘(A) IN GENERAL- The total amount of funds used by the Secretary to carry out this section for a fiscal year shall not exceed $750,000,000.

        ‘(B) BEGINNING FARMERS AND RANCHERS-

          ‘(i) IN GENERAL- The Secretary shall reserve not less than 15 percent of the funds used by the Secretary under subparagraph (A) to make payments for guaranteed loans made to beginning farmers and ranchers.

          ‘(ii) DURATION OF RESERVATION OF FUNDS- Funds reserved for beginning farmers or ranchers under clause (i) for a fiscal year shall be reserved only until March 1 of the fiscal year.’.

SEC. 5314. REAMORTIZATION OF RECAPTURE PAYMENTS.

    Section 353(e)(7) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2001(e)(7)) is amended by adding at the end the following:

        ‘(D) REAMORTIZATION-

          ‘(i) IN GENERAL- The Secretary may modify the amortization of a recapture payment referred to in subparagraph (A) of this paragraph on which a payment has become delinquent by using loan service tools under section 343(b)(3) if--

            ‘(I) the default is due to circumstances beyond the control of the borrower; and

            ‘(II) the borrower acted in good faith (as determined by the Secretary) in attempting to repay the recapture amount.

          ‘(ii) LIMITATIONS-

            ‘(I) TERM OF REAMORTIZATION- The term of a reamortization under this subparagraph may not exceed 25 years from the date of the original amortization agreement.

            ‘(II) NO REDUCTION OR PRINCIPAL OR UNPAID INTEREST DUE- A reamortization of a recapture payment under this subparagraph may not provide for reducing the outstanding principal or unpaid interest due on the recapture payment.

SEC. 5315. ALLOCATION OF CERTAIN FUNDS FOR SOCIALLY DISADVANTAGED FARMERS AND RANCHERS.

    The last sentence of section 355(c)(2) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2003(c)(2)) is amended to read as follows: ‘Any funds reserved and allocated under this paragraph but not used within a State shall, to the extent necessary to satisfy pending applications under this title, be available for use by socially disadvantaged farmers and ranchers in other States, as determined by the Secretary, and any remaining funds shall be reallocated within the State.’.

SEC. 5316. WAIVER OF BORROWER TRAINING CERTIFICATION REQUIREMENT.

    Section 359 of the Consolidated Farm and Rural Development Act (7 U.S.C. 2006a) is amended by striking subsection (f) and inserting the following:

    ‘(f) WAIVERS-

      ‘(1) IN GENERAL- The Secretary may waive the requirements of this section for an individual borrower if the Secretary determines that the borrower demonstrates adequate knowledge in areas described in this section.

      ‘(2) CRITERIA- The Secretary shall establish criteria providing for the application of paragraph (1) consistently in all counties nationwide.’.

SEC. 5317. TIMING OF LOAN ASSESSMENTS.

    Section 360(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2006b(a)) is amended by striking ‘After an applicant is determined eligible for assistance under this title by the appropriate county committee established pursuant to section 332, the’ and inserting ‘The’.

SEC. 5318. ANNUAL REVIEW OF BORROWERS.

    Section 360(d)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2006b(d)(1)) is amended by striking ‘biannual’ and inserting ‘annual’.

SEC. 5319. LOAN ELIGIBILITY FOR BORROWERS WITH PRIOR DEBT FORGIVENESS.

    Section 373(b)(2)(A) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2008h(b)(2)(A)) is amended--

      (1) in clause (i), by striking ‘or’;

      (2) in clause (ii), by striking the period and inserting ‘; or’; and

      (3) by adding at the end the following:

          ‘(iii) received debt forgiveness on not more than 1 occasion resulting directly and primarily from a major disaster or emergency designated by the President on or after April 4, 1996, under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.).’.

SEC. 5320. MAKING AND SERVICING OF LOANS BY PERSONNEL OF STATE, COUNTY, OR AREA COMMITTEES.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981-2008j) is amended by adding at the end the following:

‘SEC. 376. MAKING AND SERVICING OF LOANS BY PERSONNEL OF STATE, COUNTY, OR AREA COMMITTEES.

    ‘The Secretary shall use personnel of a State, county or area committee established under section 8(b)(5) of the Soil Conservation and Domestic Allotment Act (16 U.S.C 590h(b)(5)) to make and service loans under this title to the extent the personnel have been trained to do so.’.

SEC. 5321. ELIGIBILITY OF EMPLOYEES OF STATE, COUNTY, OR AREA COMMITTEE FOR LOANS AND LOAN GUARANTEES.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981-2008j) is further amended by adding at the end the following:

‘SEC. 377. ELIGIBILITY OF EMPLOYEES OF STATE, COUNTY, OR AREA COMMITTEE FOR LOANS AND LOAN GUARANTEES.

    ‘(a) IN GENERAL- The Secretary shall not prohibit an employee of a State, county or area committee established under section 8(b)(5) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)(5)) or an employee of the Department of Agriculture from obtaining a loan or loan guarantee under subtitle A, B or C of this title.

    ‘(b) APPROVALS-

      ‘(1) COUNTY OR AREA OFFICE- In the case of a loan application from an employee in a county or area office, the Farm Service Agency State office shall be responsible for reviewing and approving the application.

      ‘(2) STATE OFFICE- In the case of a loan application from an employee of a State office, the Farm Service Agency national office shall be responsible for reviewing and approving the application.’.

Subtitle E--Farm Credit

SEC. 5401. REPEAL OF BURDENSOME APPROVAL REQUIREMENTS.

    (a) BANKS FOR COOPERATIVES- Section 3.1(11)(B) of the Farm Credit Act of 1971 (12 U.S.C. 2122(11)(B)) is amended--

      (1) by striking clause (iii); and

      (2) by redesignating clause (iv) as clause (iii).

    (b) OTHER SYSTEM BANKS; ASSOCIATIONS- Section 4.18A of the Farm Credit Act of 1971 (12 U.S.C. 2206a) is amended--

      (1) in subsection (a)(1), by striking ‘3.1(11)(B)(iv)’ and inserting ‘3.1(11)(B)(iii)’; and

      (2) by striking subsection (c).

SEC. 5402. BANKS FOR COOPERATIVES.

    Section 3.7(b) of the Farm Credit Act of 1971 (12 U.S.C. 2128(b)) is amended--

      (1) in paragraphs (1) and (2)(A)(i), by striking ‘farm supplies’ each place it appears and inserting ‘agricultural supplies’; and

      (2) by adding at the end the following:

      ‘(4) DEFINITION OF AGRICULTURAL SUPPLY- In this subsection, the term ‘agricultural supply’ includes--

        ‘(A) a farm supply; and

        ‘(B)(i) agriculture-related processing equipment;

        ‘(ii) agriculture-related machinery; and

        ‘(iii) other capital goods related to the storage or handling of agricultural commodities or products.’.

SEC. 5403. INSURANCE CORPORATION PREMIUMS.

    (a) REDUCTION IN PREMIUMS FOR GSE-GUARANTEED LOANS-

      (1) IN GENERAL- Section 5.55 of the Farm Credit Act of 1971 (12 U.S.C. 2277a-4) is amended--

        (A) in subsection (a)--

          (i) in paragraph (1)--

            (I) in subparagraph (A), by striking ‘government-guaranteed loans provided for in subparagraph (C)’ and inserting ‘loans provided for in subparagraphs (C) and (D)’;

            (II) in subparagraph (B), by striking ‘and’ at the end;

            (III) in subparagraph (C), by striking the period at the end and inserting ‘; and’; and

            (IV) by adding at the end the following:

        ‘(D) the annual average principal outstanding for such year on the guaranteed portions of Government Sponsored Enterprise-guaranteed loans made by the bank that are in accrual status, multiplied by a factor, not to exceed 0.0015, determined by the Corporation at the sole discretion of the Corporation.’; and

          (ii) by adding at the end the following:

      ‘(4) DEFINITION OF GOVERNMENT SPONSORED ENTERPRISE-GUARANTEED LOAN- In this section and sections 1.12(b) and 5.56(a), the term ‘Government Sponsored Enterprise-guaranteed loan’ means a loan or credit, or portion of a loan or credit, that is guaranteed by an entity that is chartered by Congress to serve a public purpose and the debt obligations of which are not explicitly guaranteed by the United States, including the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Federal Home Loan Bank System, and the Federal Agricultural Mortgage Corporation, but not including any other institution of the Farm Credit System.’; and

        (B) in subsection (e)(4)(B), by striking ‘government-guaranteed loans described in subsection (a)(1)(C)’ and inserting ‘loans described in subparagraph (C) or (D) of subsection (a)(1)’.

      (2) CONFORMING AMENDMENTS-

        (A) Section 1.12(b) of the Farm Credit Act of 1971 (12 U.S.C. 2020(b)) is amended--

          (i) in paragraph (1), by inserting ‘and Government Sponsored Enterprise-guaranteed loans (as defined in section 5.55(a)(4)) provided for in paragraph (4)’ after ‘government-guaranteed loans (as defined in section 5.55(a)(3)) provided for in paragraph (3)’;

          (ii) in paragraph (2), by striking ‘and’ at the end;

          (iii) in paragraph (3), by striking the period at the end and inserting ‘; and’; and

          (iv) by adding at the end the following:

      ‘(4) the annual average principal outstanding for such year on the guaranteed portions of Government Sponsored Enterprise-guaranteed loans (as so defined) made by the association, or by the other financing institution and funded by or discounted with the Farm Credit Bank, that are in accrual status, multiplied by a factor, not to exceed 0.0015, determined by the Corporation for the purpose of setting the premium for such guaranteed portions of loans under section 5.55(a)(1)(D).’.

        (B) Section 5.56(a) of the Farm Credit Act of 1971 (12 U.S.C. 2277a-5(a)) is amended--

          (i) in paragraph (1), by inserting ‘and Government Sponsored Enterprise-guaranteed loans (as defined in section 5.55(a)(4))’ after ‘government-guaranteed loans’;

          (ii) by redesignating paragraphs (4) and (5) as paragraphs (5) and (6), respectively; and

          (iii) by inserting after paragraph (3) the following:

      ‘(4) the annual average principal outstanding on the guaranteed portions of Government Sponsored Enterprise-guaranteed loans (as defined in section 5.55(a)(4)) that are in accrual status;’.

    (b) APPLICABILITY- The amendments made by this section shall apply with respect to determinations of premiums for calendar year 2002 and for any succeeding calendar year, and to certified statements with respect to such premiums.

Subtitle F--General Provisions

SEC. 5501. TECHNICAL AMENDMENTS.

    (a) Section 321(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1961(a)) is amended by striking ‘Disaster Relief and Emergency Assistance Act’ each place it appears and inserting ‘Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.)’.

    (b) Section 336(b) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1986(b)) is amended in the second sentence by striking ‘provided for in section 332 of this title’.

    (c) Section 359(c)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2006a(c)(1)) is amended by striking ‘established pursuant to section 332,’.

TITLE VI--RURAL DEVELOPMENT

Subtitle A--Consolidated Farm and Rural Development Act

SEC. 6001. ELIGIBILITY OF RURAL EMPOWERMENT ZONES AND RURAL ENTERPRISE COMMUNITIES FOR DIRECT AND GUARANTEED LOANS FOR ESSENTIAL COMMUNITY FACILITIES.

    Section 306(a)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)(1)) is amended by inserting after the first sentence the following: ‘The Secretary may also make or insure loans to communities that have been designated as rural empowerment zones or rural enterprise communities pursuant to part I of subchapter U of chapter 1 of the Internal Revenue Code of 1986, or as rural enterprise communities pursuant to section 766 of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 1999 (Public Law 105-277; 112 Stat. 2681, 2681-37), to provide for the installation or improvement of essential community facilities including necessary related equipment, and to furnish financial assistance or other aid in planning projects for such purposes.’.

SEC. 6002. WATER OR WASTE DISPOSAL GRANTS.

    Section 306(a)(2) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)(2)) is amended--

      (1) by striking ‘(2) The’ and inserting the following:

      ‘(2) WATER, WASTE DISPOSAL, AND WASTEWATER FACILITY GRANTS-

        ‘(A) AUTHORITY-

          ‘(i) IN GENERAL- The’;

      (2) by striking ‘aggregating not to exceed $590,000,000 in any fiscal year’;

      (3) by striking ‘The amount’ and inserting the following:

          ‘(ii) AMOUNT- The amount’;

      (4) by striking ‘paragraph’ and inserting ‘subparagraph’;

      (5) by striking ‘The Secretary shall’ and inserting the following:

          ‘(iii) GRANT RATE- The Secretary shall’; and

      (6) by adding at the end the following:

        ‘(B) REVOLVING FUNDS FOR FINANCING WATER AND WASTEWATER PROJECTS-

          ‘(i) IN GENERAL- The Secretary may make grants to qualified private, nonprofit entities to capitalize revolving funds for the purpose of providing financing to eligible entities for--

            ‘(I) predevelopment costs associated with proposed water and wastewater projects or with existing water and wastewater systems; and

            ‘(II) short-term costs incurred for replacement equipment, small-scale extension services, or other small capital projects that are not part of the regular operations and maintenance activities of existing water and wastewater systems.

          ‘(ii) ELIGIBLE ENTITIES- To be eligible to obtain financing from a revolving fund under clause (i), an eligible entity must be eligible to obtain a loan, loan guarantee, or grant under paragraph (1) or this paragraph.

          ‘(iii) MAXIMUM AMOUNT OF FINANCING- The amount of financing made to an eligible entity under this subparagraph shall not exceed--

            ‘(I) $100,000 for costs described in clause (i)(I); and

            ‘(II) $100,000 for costs described in clause (i)(II).

          ‘(iv) TERM- The term of financing provided to an eligible entity under this subparagraph shall not exceed 10 years.

          ‘(v) ADMINISTRATION- The Secretary shall limit the amount of grant funds that may be used by a grant recipient for administrative costs incurred under this subparagraph.

          ‘(vi) ANNUAL REPORT- A nonprofit entity receiving a grant under this subparagraph shall submit to the Secretary an annual report that describes the number and size of communities served and the type of financing provided.

          ‘(vii) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this subparagraph $30,000,000 for each of fiscal years 2002 through 2007.’.

SEC. 6003. RURAL BUSINESS OPPORTUNITY GRANTS.

    Section 306(a)(11)(D) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)(11)(D)) is amended--

      (1) by striking ‘$7,500,000’ and inserting ‘$15,000,000’; and

      (2) by striking ‘2002’ and inserting ‘2007’.

SEC. 6004. CHILD DAY CARE FACILITIES.

    Section 306(a)(19) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)(19)) is amended by adding at the end the following:

        ‘(C) RESERVATION OF FUNDS FOR CHILD DAY CARE FACILITIES-

          ‘(i) IN GENERAL- For each fiscal year, not less than 10 percent of the funds made available to carry out this paragraph shall be reserved for grants to pay the Federal share of the cost of developing and constructing day care facilities for children in rural areas.

          ‘(ii) RELEASE- Funds reserved under clause (i) for a fiscal year shall be reserved only until April 1 of the fiscal year.’.

SEC. 6005. RURAL WATER AND WASTEWATER CIRCUIT RIDER PROGRAM.

    Section 306(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)) is amended by adding at the end the following:

      ‘(22) RURAL WATER AND WASTEWATER CIRCUIT RIDER PROGRAM-

        ‘(A) IN GENERAL- The Secretary shall establish a national rural water and wastewater circuit rider program that is based on the rural water circuit rider program of the National Rural Water Association that (as of the date of enactment of this paragraph) receives funding from the Secretary, acting through the Rural Utilities Service.

        ‘(B) RELATIONSHIP TO EXISTING PROGRAM- The program established under subparagraph (A) shall not affect the authority of the Secretary to carry out the circuit rider program for which funds are made available under the heading ‘RURAL COMMUNITY ADVANCEMENT PROGRAM’ in title III of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2002 (115 Stat. 719).

        ‘(C) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this paragraph $15,000,000 for fiscal year 2003 and each fiscal year thereafter.’.

SEC. 6006. MULTIJURISDICTIONAL REGIONAL PLANNING ORGANIZATIONS.

    Section 306(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)) (as amended by section 6005) is amended by adding at the end the following:

      ‘(23) MULTIJURISDICTIONAL REGIONAL PLANNING ORGANIZATIONS-

        ‘(A) GRANTS- The Secretary shall provide grants to multijurisdictional regional planning and development organizations to pay the Federal share of the cost of providing assistance to local governments to improve the infrastructure, services, and business development capabilities of local governments and local economic development organizations.

        ‘(B) PRIORITY- In determining which organizations will receive a grant under this paragraph, the Secretary shall give priority to an organization that--

          ‘(i) serves a rural area that, during the most recent 5-year period--

            ‘(I) had a net out-migration of inhabitants, or other population loss, from the rural area that equals or exceeds 5 percent of the population of the rural area; or

            ‘(II) had a median household income that is less than the nonmetropolitan median household income of the applicable State; and

          ‘(ii) has a history of providing substantive assistance to local governments and economic development organizations.

        ‘(C) FEDERAL SHARE- A grant provided under this paragraph shall be for not more than 75 percent of the cost of providing assistance described in subparagraph (A).

        ‘(D) MAXIMUM AMOUNT OF GRANTS- The amount of a grant provided to an organization under this paragraph shall not exceed $100,000.

        ‘(E) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this paragraph $30,000,000 for each of fiscal years 2003 through 2007.’.

SEC. 6007. LOAN GUARANTEES FOR CERTAIN RURAL DEVELOPMENT LOANS.

    (a) LOAN GUARANTEES FOR WATER, WASTEWATER, AND ESSENTIAL COMMUNITY FACILITIES LOANS- Section 306(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1925(a)) (as amended by section 6006) is amended by adding at the end the following:

      ‘(24) LOAN GUARANTEES FOR WATER, WASTEWATER, AND ESSENTIAL COMMUNITY FACILITIES LOANS-

        ‘(A) IN GENERAL- The Secretary may guarantee a loan made to finance a community facility or water or waste facility project in a rural area, including a loan financed by the net proceeds of a bond described in section 142(a) of the Internal Revenue Code of 1986.

        ‘(B) REQUIREMENTS- To be eligible for a loan guarantee under subparagraph (A), an individual or entity offering to purchase the loan shall demonstrate to the Secretary that the person has--

          ‘(i) the capabilities and resources necessary to service the loan in a manner that ensures the continued performance of the loan, as determined by the Secretary; and

          ‘(ii) the ability to generate capital to provide borrowers of the loan with the additional credit necessary to properly service the loan.’.

    (b) LOAN GUARANTEES FOR CERTAIN LOANS- Section 310B of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932) is amended by adding at the end the following:

    ‘(h) LOAN GUARANTEES FOR CERTAIN LOANS- The Secretary may guarantee loans made under subsection (a) to finance the issuance of bonds for the projects described in section 306(a)(24).’.

SEC. 6008. TRIBAL COLLEGE AND UNIVERSITY ESSENTIAL COMMUNITY FACILITIES.

    Section 306(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)) (as amended by section 6007(a)) is amended by adding at the end the following:

      ‘(25) TRIBAL COLLEGE AND UNIVERSITY ESSENTIAL COMMUNITY FACILITIES-

        ‘(A) IN GENERAL- The Secretary may make grants to tribal colleges and universities (as defined in section 316 of the Higher Education Act of 1965 (20 U.S.C. 1059c)) to provide the Federal share of the cost of developing specific tribal college or university essential community facilities in rural areas.

        ‘(B) FEDERAL SHARE-

          ‘(i) IN GENERAL- Except as provided in clauses (ii) and (iii), the Secretary shall, by regulation, establish the maximum percentage of the cost of the facility that may be covered by a grant under this paragraph.

          ‘(ii) MAXIMUM AMOUNT- The amount of a grant provided under this paragraph for a facility shall not exceed 75 percent of the cost of developing the facility.

          ‘(iii) GRADUATED SCALE- The Secretary shall provide for a graduated scale of the percentages of the cost covered by a grant made under this paragraph that provides higher percentages for facilities in communities that have lower community population and income levels, as determined by the Secretary.

        ‘(C) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this paragraph $10,000,000 for each of fiscal years 2003 through 2007.’.

SEC. 6009. EMERGENCY AND IMMINENT COMMUNITY WATER ASSISTANCE GRANT PROGRAM.

    Section 306A of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926a) is amended--

      (1) in the section heading, by inserting ‘and imminent’ after ‘emergency’;

      (2) in subsection (a)--

        (A) in paragraph (1), by inserting ‘, or when such a decline is imminent’ before the semicolon at the end; and

        (B) in paragraph (2)--

          (i) in subparagraph (A), by striking ‘acute’ and inserting ‘acute, or imminent,’; and

          (ii) in subparagraph (B), by striking ‘decline’ and inserting ‘decline, or imminent decline,’;

      (3) in subsection (c)(2), by striking ‘occurred’ and inserting ‘occurred, or will occur,’;

      (4) in subsection (d), by striking paragraph (1) and inserting the following:

      ‘(1) IN GENERAL- Grants made under this section may be used--

        ‘(A) for waterline extensions from existing systems, laying of new waterlines, repairs, significant maintenance, digging of new wells, equipment replacement, and hook and tap fees;

        ‘(B) for any other appropriate purpose associated with developing sources of, treating, storing, or distributing water;

        ‘(C) to assist communities in complying with the requirements of the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.) or the Safe Drinking Water Act (42 U.S.C. 300f et seq.); and

        ‘(D) to provide potable water to communities through other means.’;

      (5) in subsection (f)(2), by striking ‘$75,000’ and inserting ‘$150,000’;

      (6) in subsection (h)--

        (A) in the second sentence of paragraph (1), by striking ‘decline’ and inserting ‘decline, or imminent decline,’; and

        (B) by striking paragraph (2) and inserting the following:

      ‘(2) TIMING OF REVIEW OF APPLICATIONS-

        ‘(A) SIMPLIFIED APPLICATION- The application process developed by the Secretary under paragraph (1) shall include a simplified application form that will permit expedited consideration of an application for a grant filed under this section.

        ‘(B) PRIORITY REVIEW- In processing applications for any water or waste grant or loan authorized under this title, the Secretary shall afford priority processing to an application for a grant under this section to the extent funds will be available for an award on the application at the conclusion of priority processing.

        ‘(C) TIMING- The Secretary shall, to the maximum extent practicable, review and act on an application under this section within 60 days after the date on which the application is submitted to the Secretary.’; and

      (7) by striking subsection (i) and inserting the following:

    ‘(i) FUNDING-

      ‘(1) RESERVATION-

        ‘(A) IN GENERAL- For each fiscal year, not less than 3 nor more than 5 percent of the total amount made available to carry out section 306(a)(2) for the fiscal year shall be reserved for grants under this section.

        ‘(B) RELEASE- Funds reserved under subparagraph (A) for a fiscal year shall be reserved only until July 1 of the fiscal year.

      ‘(2) AUTHORIZATION OF APPROPRIATIONS- In addition to funds made available under paragraph (1), there is authorized to be appropriated to carry out this section $35,000,000 for each of fiscal years 2003 through 2007.’.

SEC. 6010. WATER AND WASTE FACILITY GRANTS FOR NATIVE AMERICAN TRIBES.

    Section 306C of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926c) is amended by striking subsection (e) and inserting the following:

    ‘(e) AUTHORIZATION OF APPROPRIATIONS-

      ‘(1) IN GENERAL- Subject to paragraph (2), there are authorized to be appropriated--

        ‘(A) for grants under this section, $30,000,000 for each fiscal year;

        ‘(B) for loans under this section, $30,000,000 for each fiscal year; and

        ‘(C) in addition to grants provided under subparagraph (A), for grants under this section to benefit Indian tribes (as defined in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b)), $20,000,000 for each fiscal year.

      ‘(2) EXCEPTION- An entity eligible to receive funding through a grant made under section 306D shall not be eligible for a grant from funds made available under paragraph (1)(C).’.

SEC. 6011. GRANTS FOR WATER SYSTEMS FOR RURAL AND NATIVE VILLAGES IN ALASKA.

    Section 306D(d)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926d(d)(1)) is amended by striking ‘and 2002’ and inserting ‘through 2007’.

SEC. 6012. GRANTS TO NONPROFIT ORGANIZATIONS TO FINANCE THE CONSTRUCTION, REFURBISHING, AND SERVICING OF INDIVIDUALLY-OWNED HOUSEHOLD WATER WELL SYSTEMS IN RURAL AREAS FOR INDIVIDUALS WITH LOW OR MODERATE INCOMES.

    (a) IN GENERAL- The Consolidated Farm and Rural Development Act is amended by inserting after section 306D (7 U.S.C. 1926d) the following:

‘SEC. 306E. GRANTS TO NONPROFIT ORGANIZATIONS TO FINANCE THE CONSTRUCTION, REFURBISHING, AND SERVICING OF INDIVIDUALLY-OWNED HOUSEHOLD WATER WELL SYSTEMS IN RURAL AREAS FOR INDIVIDUALS WITH LOW OR MODERATE INCOMES.

    ‘(a) DEFINITION OF ELIGIBLE INDIVIDUAL- In this section, the term ‘eligible individual’ means an individual who is a member of a household the members of which have a combined income (for the most recent 12-month period for which the information is available) that is not more than 100 percent of the median nonmetropolitan household income for the State or territory in which the individual resides, according to the most recent decennial census of the United States.

    ‘(b) GRANTS-

      ‘(1) IN GENERAL- The Secretary may make grants to private nonprofit organizations for the purpose of providing loans to eligible individuals for the construction, refurbishing, and servicing of individual household water well systems in rural areas that are or will be owned by the eligible individuals.

      ‘(2) TERMS OF LOANS- A loan made with grant funds under this section--

        ‘(A) shall have an interest rate of 1 percent;

        ‘(B) shall have a term not to exceed 20 years; and

        ‘(C) shall not exceed $8,000 for each water well system described in paragraph (1).

      ‘(3) ADMINISTRATIVE EXPENSES- A recipient of a grant made under this section may use grant funds to pay administrative expenses associated with providing the assistance described in paragraph (1), as determined by the Secretary.

    ‘(c) PRIORITY IN AWARDING GRANTS- In awarding grants under this section, the Secretary shall give priority to an applicant that has substantial expertise and experience in promoting the safe and productive use of individually-owned household water well systems and ground water.

    ‘(d) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this section $10,000,000 for each of fiscal years 2003 through 2007.’.

    (b) EFFECTIVE DATE- The amendment made by subsection (a) takes effect on October 1, 2002.

SEC. 6013. LOANS AND LOAN GUARANTEES FOR RENEWABLE ENERGY SYSTEMS.

    Section 310B(a)(3) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932(a)(3)) is amended by inserting ‘and other renewable energy systems (including wind energy systems and anaerobic digestors for the purpose of energy generation)’ after ‘solar energy systems’.

SEC. 6014. RURAL BUSINESS ENTERPRISE GRANTS.

    Section 310B(c)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932(c)(1)) is amended--

      (1) by striking ‘(1) IN GENERAL- The Secretary’ and inserting the following:

      ‘(1) GRANTS-

        ‘(A) IN GENERAL- The Secretary’; and

      (2) by adding at the end the following:

        ‘(B) SMALL AND EMERGING PRIVATE BUSINESS ENTERPRISES-

          ‘(i) IN GENERAL- For the purpose of subparagraph (A), a small and emerging private business enterprise shall include (regardless of the number of employees or operating capital of the enterprise) an eligible nonprofit entity, or other tax-exempt organization, with a principal office in an area that is located--

            ‘(I) on land of an existing or former Native American reservation; and

            ‘(II) in a city, town, or unincorporated area that has a population of not more than 5,000 inhabitants.

          ‘(ii) USE OF GRANT- An eligible nonprofit entity, or other tax exempt organization, described in clause (i) may use assistance provided under this paragraph to create, expand, or operate value-added processing in an area described in clause (i) in connection with production agriculture.

          ‘(iii) PRIORITY- In making grants under this paragraph, the Secretary shall give priority to grants that will be used to provide assistance to eligible nonprofit entities and other tax exempt organizations described in clause (i).’.

SEC. 6015. RURAL COOPERATIVE DEVELOPMENT GRANTS.

    Section 310B(e) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932(e)) is amended--

      (1) in paragraph (5)(F), before the period at the end the following: ‘, except that the Secretary shall not require non-Federal financial support in an amount that is greater than 5 percent in the case of a 1994 institution (as defined in section 532 of the Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note; Public Law 103-382))’; and

      (2) in paragraph (9), by striking ‘2002’ and inserting ‘2007’.

SEC. 6016. GRANTS TO BROADCASTING SYSTEMS.

    Section 310B(f) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932(f)) is amended by adding at the end the following:

      ‘(3) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this subsection $5,000,000 for each of fiscal years 2002 through 2007.’.

SEC. 6017. BUSINESS AND INDUSTRY LOAN MODIFICATIONS.

    Section 310B of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932) is amended by striking subsection (g) and inserting the following:

    ‘(g) BUSINESS AND INDUSTRY DIRECT AND GUARANTEED LOANS-

      ‘(1) DEFINITION OF BUSINESS AND INDUSTRY LOAN- In this subsection, the term ‘business and industry loan’ means a business and industry direct or guaranteed loan that is made or guaranteed by the Secretary under subsection (a)(1).

      ‘(2) LOAN GUARANTEES FOR THE PURCHASE OF COOPERATIVE STOCK-

        ‘(A) IN GENERAL- The Secretary may guarantee a business and industry loan to individual farmers or ranchers for the purpose of purchasing capital stock of a farmer or rancher cooperative established for the purpose of processing an agricultural commodity.

        ‘(B) PROCESSING CONTRACTS DURING INITIAL PERIOD- A cooperative described in subparagraph (A) for which a farmer or rancher receives a guarantee to purchase stock under subparagraph (A) may contract for services to process agricultural commodities, or otherwise process value-added agricultural products, during the 5-year period beginning on the date of the startup of the cooperative in order to provide adequate time for the planning and construction of the processing facility of the cooperative.

        ‘(C) FINANCIAL INFORMATION- Financial information required by the Secretary from a farmer or rancher as a condition of making a business and industry loan guarantee under this paragraph shall be provided in the manner generally required by commercial agricultural lenders in the area.

      ‘(3) LOANS TO COOPERATIVES-

        ‘(A) IN GENERAL- The Secretary may make or guarantee a business and industry loan to a cooperative organization that is headquartered in a metropolitan area if the loan is used for a project or venture described in subsection (a) that is located in a rural area or a loan guarantee that meets the requirements of paragraph (6).

        ‘(B) REFINANCING- A cooperative organization that is eligible for a business and industry loan shall be eligible to refinance an existing business and industry loan with a lender if--

          ‘(i) the cooperative organization--

            ‘(I) is current and performing with respect to the existing loan; and

            ‘(II) is not, and has not been, in payment default, or the collateral of which has not been converted, with respect to the existing loan; and

          ‘(ii) there is adequate security or full collateral for the refinanced loan.

      ‘(4) LOAN APPRAISALS- The Secretary may require that any appraisal made in connection with a business and industry loan be conducted by a specialized appraiser that uses standards that are similar to standards used for similar purposes in the private sector, as determined by the Secretary.

      ‘(5) FEES- The Secretary may assess a 1-time fee for any guaranteed business and industry loan in an amount that does not exceed 2 percent of the guaranteed principal portion of the loan.

      ‘(6) LOAN GUARANTEES IN NONRURAL AREAS-

        ‘(A) IN GENERAL- The Secretary may guarantee a business and industry loan to a cooperative organization for a facility that is not located in a rural area if--

          ‘(i) the primary purpose of the loan guarantee is for a facility to provide value-added processing for agricultural producers that are located within 80 miles of the facility;

          ‘(ii) the applicant demonstrates to the Secretary that the primary benefit of the loan guarantee will be to provide employment for residents of a rural area; and

          ‘(iii) the total amount of business and industry loans guaranteed for a fiscal year under this paragraph does not exceed 10 percent of the business and industry loans guaranteed for the fiscal year under subsection (a)(1).

        ‘(B) PRINCIPAL AMOUNTS- The principal amount of a business and industry loan guaranteed under this paragraph may not exceed $25,000,000.

      ‘(7) INTANGIBLE ASSETS- In determining whether a cooperative organization is eligible for a guaranteed business and industry loan, the Secretary may consider the market value of a properly appraised brand name, patent, or trademark of the cooperative.

      ‘(8) Limitations on loan guarantees for cooperative organizations-

        ‘(A) PRINCIPAL AMOUNT-

          ‘(i) IN GENERAL- Subject to clause (ii), the principal amount of a business and industry loan made to a cooperative organization and guaranteed under this subsection shall not exceed $40,000,000.

          ‘(ii) USE- To be eligible for a guarantee under this subsection for a business and industry loan made to a cooperative organization, the principal amount of the any such loan in excess of $25,000,000 shall be used to carry out a project--

            ‘(I) in a rural area; and

            ‘(II) that provides for the value-added processing of agricultural commodities.

        ‘(B) APPLICATIONS- If a cooperative organization submits an application for a guarantee under this subsection of a business and industry loan with a principal amount that is in excess of $25,000,000, the Secretary--

          ‘(i) shall review and, if appropriate, approve the application; and

          ‘(ii) may not delegate the approval authority.

        ‘(C) MAXIMUM AMOUNT- The total amount of business and industry loans made to cooperative organizations and guaranteed for a fiscal year under this subsection with principal amounts that are in excess of $25,000,000 may not exceed 10 percent of the business and industry loans guaranteed for the fiscal year under subsection (a)(1).’.

SEC. 6018. USE OF RURAL DEVELOPMENT LOANS AND GRANTS FOR OTHER PURPOSES.

    Subtitle A of the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.) (as amended by section 5006) is amended by adding at the end the following:

‘SEC. 310G. USE OF RURAL DEVELOPMENT LOANS AND GRANTS FOR OTHER PURPOSES.

    ‘If, after making a loan or a grant described in section 381E(d), the Secretary determines that the circumstances under which the loan or grant was made have sufficiently changed to make the project or activity for which the loan or grant was made available no longer appropriate, the Secretary may allow the loan borrower or grant recipient to use property (real and personal) purchased or improved with the loan or grant funds, or proceeds from the sale of property (real and personal) purchased with such funds, for another project or activity that (as determined by the Secretary)--

      ‘(1) will be carried out in the same area as the original project or activity;

      ‘(2) meets the criteria for a loan or a grant described in section 381E(d); and

      ‘(3) satisfies such additional requirements as are established by the Secretary.’.

SEC. 6019. SIMPLIFIED APPLICATION FORMS FOR LOAN GUARANTEES.

    Section 333A of the Consolidated Farm and Rural Development Act (7 U.S.C. 1983a) (as amended by section 5307) is amended by striking subsection (g) and inserting the following:

    ‘(g) SIMPLIFIED APPLICATION FORMS FOR LOAN GUARANTEES-

      ‘(1) IN GENERAL- The Secretary shall provide to lenders a short, simplified application form for guarantees under this title of--

        ‘(A) farmer program loans the principal amount of which is $125,000 or less; and

        ‘(B) business and industry guaranteed loans under section 310B(a)(1) the principal amount of which is--

          ‘(i) in the case of a loan guarantee made during fiscal year 2002 or 2003, $400,000 or less; and

          ‘(ii) in the case of a loan guarantee made during any subsequent fiscal year--

            ‘(I) $400,000 or less; or

            ‘(II) if the Secretary determines that there is not a significant increased risk of a default on the loan, $600,000 or less.

      ‘(2) WATER AND WASTE DISPOSAL GRANTS AND LOANS- The Secretary shall develop an application process that accelerates, to the maximum extent practicable, the processing of applications for water and waste disposal grants or direct or guaranteed loans under paragraph (1) or (2) of section 306(a) the grant award amount or principal loan amount, respectively, of which is $300,000 or less.

      ‘(3) ADMINISTRATION- In developing an application under this subsection, the Secretary shall--

        ‘(A) consult with commercial and cooperative lenders; and

        ‘(B) ensure that--

          ‘(i) the form can be completed manually or electronically, at the option of the lender;

          ‘(ii) the form minimizes the documentation required to accompany the form;

          ‘(iii) the cost of completing and processing the form is minimal; and

          ‘(iv) the form can be completed and processed in an expeditious manner.’.

SEC. 6020. DEFINITION OF RURAL AND RURAL AREA.

    (a) IN GENERAL- Section 343(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1991(a)) is amended by adding at the end the following:

      ‘(13) RURAL AND RURAL AREA-

        ‘(A) IN GENERAL- Except as otherwise provided in this paragraph, the terms ‘rural’ and ‘rural area’ mean any area other than--

          ‘(i) a city or town that has a population of greater than 50,000 inhabitants; and

          ‘(ii) the urbanized area contiguous and adjacent to such a city or town.

        ‘(B) WATER AND WASTE DISPOSAL GRANTS AND DIRECT AND GUARANTEED LOANS- For the purpose of water and waste disposal grants and direct and guaranteed loans provided under paragraphs (1), (2), and (24) of section 306(a), the terms ‘rural’ and ‘rural area’ mean a city, town, or unincorporated area that has a population of no more than 10,000 inhabitants.

        ‘(C) COMMUNITY FACILITY LOANS AND GRANTS- For the purpose of community facility direct and guaranteed loans and grants under paragraphs (1), (19), (20), (21), and (24) of section 306(a), the terms ‘rural’ and ‘rural area’ mean a city, town, or unincorporated area that has a population of not more than 20,000 inhabitants.

        ‘(D) MULTIJURISDICTIONAL REGIONAL PLANNING ORGANIZATIONS; NATIONAL RURAL DEVELOPMENT PARTNERSHIP- In sections 306(a)(23) and 378, the term ‘rural area’ means--

          ‘(i) all the territory of a State that is not within the boundary of any standard metropolitan statistical area; and

          ‘(ii) all territory within any standard metropolitan statistical area within a census tract having a population density of less than 20 persons per square mile, as determined by the Secretary according to the most recent census of the United States as of any date.

        ‘(E) RURAL BUSINESS INVESTMENT PROGRAM- In subtitle H, the term ‘rural area’ means an area that is located--

          ‘(i) outside a standard metropolitan statistical area; or

          ‘(ii) within a community that has a population of 50,000 inhabitants or less.’.

    (b) CONFORMING AMENDMENTS-

      (1) Section 306(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)) is amended by striking paragraph (7).

      (2) Section 381A of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009) is amended--

        (A) by striking paragraph (1); and

        (B) by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively.

      (3) Section 735 of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 1999 (112 Stat. 2681-29) is repealed.

SEC. 6021. NATIONAL RURAL DEVELOPMENT PARTNERSHIP.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981 et seq.) (as amended by section 5321) is amended by adding at the end the following:

‘SEC. 378. NATIONAL RURAL DEVELOPMENT PARTNERSHIP.

    ‘(a) DEFINITIONS- In this section:

      ‘(1) AGENCY WITH RURAL RESPONSIBILITIES- The term ‘agency with rural responsibilities’ means any executive agency (as defined in section 105 of title 5, United States Code) that implements a Federal law, or administers a program, targeted at or having a significant impact on rural areas.

      ‘(2) COORDINATING COMMITTEE- The term ‘Coordinating Committee’ means the National Rural Development Coordinating Committee established by subsection (c).

      ‘(3) PARTNERSHIP- The term ‘Partnership’ means the National Rural Development Partnership continued by subsection (b).

      ‘(4) STATE RURAL DEVELOPMENT COUNCIL- The term ‘State rural development council’ means a State rural development council that meets the requirements of subsection (d).

    ‘(b) PARTNERSHIP-

      ‘(1) IN GENERAL- The Secretary shall continue the National Rural Development Partnership composed of--

        ‘(A) the Coordinating Committee; and

        ‘(B) State rural development councils.

      ‘(2) PURPOSES- The purposes of the Partnership are to empower and build the capacity of States and rural communities to design flexible and innovative responses to their own special rural development needs, with local determinations of progress and selection of projects and activities.

      ‘(3) GOVERNING PANEL-

        ‘(A) IN GENERAL- A panel consisting of representatives of the Coordinating Committee and State rural development councils shall be established to lead and coordinate the strategic operation, policies, and practices of the Partnership.

        ‘(B) ANNUAL REPORTS- In conjunction with the Coordinating Committee and State rural development councils, the panel shall prepare and submit to Congress an annual report on the activities of the Partnership.

      ‘(4) ROLE OF FEDERAL GOVERNMENT- The role of the Federal Government in the Partnership may be that of a partner and facilitator, with Federal agencies authorized--

        ‘(A) to cooperate with States to implement the Partnership;

        ‘(B) to provide States with the technical and administrative support necessary to plan and implement tailored rural development strategies to meet local needs;

        ‘(C) to ensure that the head of each agency with rural responsibilities designates a senior-level agency official to represent the agency on the Coordinating Committee and directs appropriate field staff to participate fully with the State rural development council within the jurisdiction of the field staff; and

        ‘(D) to enter into cooperative agreements with, and to provide grants and other assistance to, the Coordinating Committee and State rural development councils.

    ‘(c) NATIONAL RURAL DEVELOPMENT COORDINATING COMMITTEE-

      ‘(1) ESTABLISHMENT- The Secretary shall establish a National Rural Development Coordinating Committee within the Department of Agriculture.

      ‘(2) COMPOSITION- The Coordinating Committee shall be composed of--

        ‘(A) 1 representative of each agency with rural responsibilities; and

        ‘(B) representatives, approved by the Secretary, of--

          ‘(i) national associations of State, regional, local, and tribal governments and intergovernmental and multijurisdictional agencies and organizations;

          ‘(ii) national public interest groups;

          ‘(iii) other national nonprofit organizations that elect to participate in the activities of the Coordinating Committee; and

          ‘(iv) the private sector.

      ‘(3) DUTIES- The Coordinating Committee shall--

        ‘(A) support the work of the State rural development councils;

        ‘(B) facilitate coordination of rural development policies, programs, and activities among Federal agencies and with those of State, local, and tribal governments, the private sector, and nonprofit organizations;

        ‘(C) review and comment on policies, regulations, and proposed legislation that affect or would affect rural areas and gather and provide related information;

        ‘(D) develop and facilitate strategies to reduce or eliminate administrative and regulatory impediments; and

        ‘(E) require each State rural development council receiving funds under this section to submit an annual report on the use of the funds, including a description of strategic plans, goals, performance measures, and outcomes for the State rural development council of the State.

      ‘(4) FEDERAL PARTICIPATION IN COORDINATING COMMITTEE-

        ‘(A) IN GENERAL- A Federal employee shall fully participate in the governance and operations of the Coordinating Committee, including activities related to grants, contracts, and other agreements, in accordance with this section.

        ‘(B) CONFLICTS- Participation by a Federal employee in the Coordinating Committee in accordance with this paragraph shall not constitute a violation of section 205 or 208 of title 18, United States Code.

      ‘(5) ADMINISTRATIVE SUPPORT- The Secretary may provide such administrative support for the Coordinating Committee as the Secretary determines is necessary to carry out the duties of the Coordinating Committee.

      ‘(6) PROCEDURES- The Secretary may prescribe such regulations, bylaws, or other procedures as are necessary for the operation of the Coordinating Committee.

    ‘(d) STATE RURAL DEVELOPMENT COUNCILS-

      ‘(1) ESTABLISHMENT- Notwithstanding chapter 63 of title 31, United States Code, each State may elect to participate in the Partnership by entering into an agreement with the Secretary to recognize a State rural development council.

      ‘(2) COMPOSITION- A State rural development council shall--

        ‘(A) be composed of representatives of Federal, State, local, and tribal governments, nonprofit organizations, regional organizations, the private sector, and other entities committed to rural advancement; and

        ‘(B) have a nonpartisan and nondiscriminatory membership that--

          ‘(i) is broad and representative of the economic, social, and political diversity of the State; and

          ‘(ii) shall be responsible for the governance and operations of the State rural development council.

      ‘(3) DUTIES- A State rural development council shall--

        ‘(A) facilitate collaboration among Federal, State, local, and tribal governments and the private and nonprofit sectors in the planning and implementation of programs and policies that have an impact on rural areas of the State;

        ‘(B) monitor, report, and comment on policies and programs that address, or fail to address, the needs of the rural areas of the State;

        ‘(C) as part of the Partnership, in conjunction with the Coordinating Committee, facilitate the development of strategies to reduce or eliminate conflicting or duplicative administrative or regulatory requirements of Federal, State, local, and tribal governments; and

        ‘(D)(i) provide to the Coordinating Committee an annual plan with goals and performance measures; and

        ‘(ii) submit to the Coordinating Committee an annual report on the progress of the State rural development council in meeting the goals and measures.

      ‘(4) FEDERAL PARTICIPATION IN STATE RURAL DEVELOPMENT COUNCILS-

        ‘(A) IN GENERAL- A State Director for Rural Development of the Department of Agriculture, other employees of the Department, and employees of other Federal agencies with rural responsibilities shall fully participate as voting members in the governance and operations of State rural development councils (including activities related to grants, contracts, and other agreements in accordance with this section) on an equal basis with other members of the State rural development councils.

        ‘(B) CONFLICTS- Participation by a Federal employee in a State rural development council in accordance with this paragraph shall not constitute a violation of section 205 or 208 of title 18, United States Code.

    ‘(e) ADMINISTRATIVE SUPPORT OF THE PARTNERSHIP-

      ‘(1) DETAIL OF EMPLOYEES-

        ‘(A) IN GENERAL- In order to provide experience in intergovernmental collaboration, the head of an agency with rural responsibilities that elects to participate in the Partnership may, and is encouraged to, detail to the Secretary for the support of the Partnership 1 or more employees of the agency with rural responsibilities without reimbursement for a period of up to 1 year.

        ‘(B) CIVIL SERVICE STATUS- The detail shall be without interruption or loss of civil service status or privilege.

      ‘(2) ADDITIONAL SUPPORT- The Secretary may provide for any additional support staff to the Partnership as the Secretary determines to be necessary to carry out the duties of the Partnership.

      ‘(3) INTERMEDIARIES- The Secretary may enter into a contract with a qualified intermediary under which the intermediary shall be responsible for providing administrative and technical assistance to a State rural development council, including administering the financial assistance available to the State rural development council.

    ‘(f) MATCHING REQUIREMENTS FOR STATE RURAL DEVELOPMENT COUNCILS-

      ‘(1) IN GENERAL- Except as provided in paragraph (2), a State rural development council shall provide matching funds, or in-kind goods or services, to support the activities of the State rural development council in an amount that is not less than 33 percent of the amount of Federal funds received from a Federal agency under subsection (g)(2).

      ‘(2) EXCEPTIONS TO MATCHING REQUIREMENT FOR CERTAIN FEDERAL FUNDS- Paragraph (1) shall not apply to funds, grants, funds provided under contracts or cooperative agreements, gifts, contributions, or technical assistance received by a State rural development council from a Federal agency that are used--

        ‘(A) to support 1 or more specific program or project activities; or

        ‘(B) to reimburse the State rural development council for services provided to the Federal agency providing the funds, grants, funds provided under contracts or cooperative agreements, gifts, contributions, or technical assistance.

      ‘(3) DEPARTMENT’S SHARE- The Secretary shall develop a plan to decrease, over time, the share of the Department of Agriculture of the cost of the core operations of State rural development councils.

    ‘(g) FUNDING-

      ‘(1) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this section $10,000,000 for each of fiscal years 2003 through 2007.

      ‘(2) FEDERAL AGENCIES-

        ‘(A) IN GENERAL- Notwithstanding any other provision of law limiting the ability of an agency, along with other agencies, to provide funds to the Coordinating Committee or a State rural development council in order to carry out the purposes of this section, a Federal agency may make grants, gifts, or contributions to, provide technical assistance to, or enter into contracts or cooperative agreements with, the Coordinating Committee or a State rural development council.

        ‘(B) ASSISTANCE- Federal agencies are encouraged to use funds made available for programs that have an impact on rural areas to provide assistance to, and enter into contracts with, the Coordinating Committee or a State rural development council, as described in subparagraph (A).

      ‘(3) CONTRIBUTIONS- The Coordinating Committee and a State rural development council may accept private contributions.

    ‘(h) TERMINATION- The authority provided under this section shall terminate on the date that is 5 years after the date of enactment of this section.’.

SEC. 6022. RURAL TELEWORK.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981 et seq.) (as amended by section 6021) is amended by adding at the end the following:

‘SEC. 379. RURAL TELEWORK.

    ‘(a) DEFINITIONS- In this section:

      ‘(1) ELIGIBLE ORGANIZATION- The term ‘eligible organization’ means a nonprofit entity, an educational institution, an Indian tribe (as defined in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b)), or any other organization, in a rural area (except for the institute), that meets the requirements of this section and such other requirements as are established by the Secretary.

      ‘(2) INSTITUTE- The term ‘institute’ means a rural telework institute established using a grant under subsection (b).

      ‘(3) TELEWORK- The term ‘telework’ means the use of telecommunications to perform work functions at a rural work center located outside the place of business of an employer.

    ‘(b) RURAL TELEWORK INSTITUTE-

      ‘(1) IN GENERAL- The Secretary shall make 1 or more grants to an eligible organization to pay the Federal share of the cost of establishing and operating a national rural telework institute to carry out projects described in paragraph (2).

      ‘(2) PROJECTS- The institute shall use grant funds received under this subsection to carry out a 5-year project--

        ‘(A) to serve as a clearinghouse for telework research and development;

        ‘(B) to conduct outreach to rural communities and rural workers;

        ‘(C) to develop and share best practices in rural telework throughout the United States;

        ‘(D) to develop innovative, market-driven telework projects and joint ventures with the private sector that employ workers in rural areas in jobs that promote economic self-sufficiency;

        ‘(E) to share information about the design and implementation of telework arrangements;

        ‘(F) to support private sector businesses that are transitioning to telework;

        ‘(G) to support and assist telework projects and individuals at the State and local level; and

        ‘(H) to perform such other functions as the Secretary considers appropriate.

      ‘(3) NON-FEDERAL SHARE-

        ‘(A) IN GENERAL- As a condition of receiving a grant under this subsection, an eligible organization shall agree to obtain, after the application of the eligible organization has been approved and notice of award has been issued, contributions from non-Federal sources that are equal to--

          ‘(i) during each of the first, second, and third years of a project, 30 percent of the amount of the grant; and

          ‘(ii) during each of the fourth and fifth years of the project, 50 percent of the amount of the grant.

        ‘(B) INDIAN TRIBES- Notwithstanding subparagraph (A), an Indian tribe may use any Federal funds made available to the Indian tribe for self-governance to pay the non-Federal contributions required under subparagraph (A).

        ‘(C) FORM- The non-Federal contributions required under subparagraph (A) may be in the form of in-kind contributions, including office equipment, office space, computer software, consultant services, computer networking equipment, and related services.

    ‘(c) TELEWORK GRANTS-

      ‘(1) IN GENERAL- Subject to paragraphs (2) through (5), the Secretary shall make grants to eligible organizations to pay the Federal share of the cost of--

        ‘(A) obtaining equipment and facilities to establish or expand telework locations in rural areas; and

        ‘(B) operating telework locations in rural areas.

      ‘(2) APPLICATIONS- To be eligible to receive a grant under this subsection, an eligible organization shall submit to the Secretary, and receive the approval of the Secretary of, an application for the grant that demonstrates that the eligible organization has adequate resources and capabilities to establish or expand a telework location in a rural area.

      ‘(3) NON-FEDERAL SHARE-

        ‘(A) IN GENERAL- As a condition of receiving a grant under this subsection, an eligible organization shall agree to obtain, after the application of the eligible organization has been approved and notice of award has been issued, contributions from non-Federal sources that are equal to 50 percent of the amount of the grant.

        ‘(B) INDIAN TRIBES- Notwithstanding subparagraph (A), an Indian tribe may use Federal funds made available to the tribe for self-governance to pay the non-Federal contributions required under subparagraph (A).

        ‘(C) SOURCES- The non-Federal contributions required under subparagraph (A)--

          ‘(i) may be in the form of in-kind contributions, including office equipment, office space, computer software, consultant services, computer networking equipment, and related services; and

          ‘(ii) may not be made from funds made available for community development block grants under title I of the Housing and Community Development Act of 1974 (42 U.S.C. 5301 et seq.).

      ‘(4) DURATION- The Secretary may not provide a grant under this subsection to expand or operate a telework location in a rural area after the date that is 3 years after the establishment of the telework location.

      ‘(5) AMOUNT- The amount of a grant provided to an eligible organization under this subsection shall be not less than $1,000,000 and not more than $2,000,000.

    ‘(d) APPLICABILITY OF CERTAIN FEDERAL LAW- An eligible organization that receives funds under this section shall be subject to the provisions of Federal law (including regulations) administered by the Secretary of Labor or the Equal Employment Opportunity Commission that govern the responsibilities of employers to employees.

    ‘(e) REGULATIONS- Not later than 180 days after the date of enactment of this section, the Secretary shall promulgate regulations to carry out this section.

    ‘(f) AUTHORIZATION OF APPROPRIATION- There is authorized to be appropriated to carry out this section $30,000,000 for each of fiscal years 2002 through 2007, of which $5,000,000 shall be provided to establish and support an institute under subsection (b).’.

SEC. 6023. HISTORIC BARN PRESERVATION.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981 et seq.) (as amended by section 6022) is amended by adding at the end the following:

‘SEC. 379A. HISTORIC BARN PRESERVATION.

    ‘(a) DEFINITIONS- In this section:

      ‘(1) BARN- The term ‘barn’ means a building (other than a dwelling) on a farm, ranch, or other agricultural operation for--

        ‘(A) housing animals;

        ‘(B) storing or processing crops;

        ‘(C) storing and maintaining agricultural equipment; or

        ‘(D) serving an essential or useful purpose related to agricultural activities conducted on the adjacent land.

      ‘(2) ELIGIBLE APPLICANT- The term ‘eligible applicant’ means--

        ‘(A) a State department of agriculture (or a designee);

        ‘(B) a national or State nonprofit organization that--

          ‘(i) is described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code; and

          ‘(ii) has experience or expertise, as determined by the Secretary, in the identification, evaluation, rehabilitation, preservation, or protection of historic barns; and

        ‘(C) a State historic preservation office.

      ‘(3) HISTORIC BARN- The term ‘historic barn’ means a barn that--

        ‘(A) is at least 50 years old;

        ‘(B) retains sufficient integrity of design, materials, and construction to clearly identify the barn as an agricultural building; and

        ‘(C) meets the criteria for listing on National, State, or local registers or inventories of historic structures.

      ‘(4) SECRETARY- The term ‘Secretary’ means the Secretary, acting through the Under Secretary of Rural Development.

    ‘(b) PROGRAM- The Secretary shall establish a historic barn preservation program--

      ‘(1) to assist States in developing a list of historic barns;

      ‘(2) to collect and disseminate information on historic barns;

      ‘(3) to foster educational programs relating to the history, construction techniques, rehabilitation, and contribution to society of historic barns; and

      ‘(4) to sponsor and conduct research on--

        ‘(A) the history of barns; and

        ‘(B) best practices to protect and rehabilitate historic barns from the effects of decay, fire, arson, and natural disasters.

    ‘(c) GRANTS-

      ‘(1) IN GENERAL- The Secretary may make grants to, or enter into contracts or cooperative agreements with, eligible applicants to carry out an eligible project under paragraph (2).

      ‘(2) ELIGIBLE PROJECTS- A grant under this subsection may be made to an eligible applicant for a project--

        ‘(A) to rehabilitate or repair a historic barn;

        ‘(B) to preserve a historic barn through--

          ‘(i) the installation of a fire protection system, including fireproofing or fire detection system and sprinklers; and

          ‘(ii) the installation of a system to prevent vandalism; and

        ‘(C) to identify, document, and conduct research on a historic barn to develop and evaluate appropriate techniques or best practices for protecting historic barns.

      ‘(3) REQUIREMENTS- An eligible applicant that receives a grant for a project under this subsection shall comply with any standards established by the Secretary of the Interior for historic preservation projects.

      ‘(4) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated such sums as are necessary to carry out this section for each of fiscal years 2002 through 2007.’.

SEC. 6024. GRANTS FOR NOAA WEATHER RADIO TRANSMITTERS.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981 et seq.) (as amended by section 6023)) is amended by adding at the end the following:

‘SEC. 379B. GRANTS FOR NOAA WEATHER RADIO TRANSMITTERS.

    ‘(a) IN GENERAL- The Secretary, acting through the Administrator of the Rural Utilities Service, may make grants to public and nonprofit entities, and borrowers of loans made by the Rural Utilities Service, for the Federal share of the cost of acquiring radio transmitters to increase coverage of rural areas by the all hazards weather radio broadcast system of the National Oceanic and Atmospheric Administration.

    ‘(b) ELIGIBILITY- To be eligible for a grant under this section, an applicant shall provide to the Secretary--

      ‘(1) a binding commitment from a tower owner to place the transmitter on a tower; and

      ‘(2) a description of how the tower placement will increase coverage of a rural area by the all hazards weather radio broadcast system of the National Oceanic and Atmospheric Administration.

    ‘(c) FEDERAL SHARE- A grant provided under this section shall be not more than 75 percent of the total cost of acquiring a radio transmitter, as described in subsection (a).

    ‘(d) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated such sums as are necessary to carry out this section for each of fiscal years 2002 through 2007.’.

SEC. 6025. GRANTS TO TRAIN FARM WORKERS IN NEW TECHNOLOGIES AND TO TRAIN FARM WORKERS IN SPECIALIZED SKILLS NECESSARY FOR HIGHER VALUE CROPS.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981 et seq.) (as amended by section 6024) is amended by adding at the end the following:

‘SEC. 379C. GRANTS TO TRAIN FARM WORKERS IN NEW TECHNOLOGIES AND TO TRAIN FARM WORKERS IN SPECIALIZED SKILLS NECESSARY FOR HIGHER VALUE CROPS.

    ‘(a) IN GENERAL- The Secretary shall make grants to nonprofit organizations, or to a consortium of nonprofit organizations, agribusinesses, State and local governments, agricultural labor organizations, farmer or rancher cooperatives, and community-based organizations with the capacity to train farm workers.

    ‘(b) USE OF FUNDS- An entity to which a grant is made under this section shall use the grant to train farm workers to use new technologies and develop specialized skills for agricultural development.

    ‘(c) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this section $10,000,000 for each of fiscal years 2002 through 2007.’.

SEC. 6026. RURAL COMMUNITY ADVANCEMENT PROGRAM.

    (a) NATIONAL RESERVE PROGRAM- Section 381E of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009d) is amended--

      (1) in subsection (b)--

        (A) by striking paragraph (4); and

        (B) by redesignating paragraph (5) as paragraph (4);

      (2) by striking subsection (e);

      (3) by redesignating subsections (f) through (h) as subsections (e) through (g), respectively; and

      (4) in subsection (g) (as so redesignated), by striking ‘subsection (g) of this section’ and inserting ‘subsection (f)’.

    (b) RURAL VENTURE CAPITAL DEMONSTRATION PROGRAM- Section 381O of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009n) is repealed.

    (c) CONFORMING AMENDMENTS- Section 381G of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009f(a)) is amended--

      (1) in subsection (a), by striking ‘section 381E(g)’ each place it appears and inserting ‘section 381E(f)’; and

      (2) in subsection (b)(1), by striking ‘section 381E(h)’ and inserting ‘section 381E(g)’.

SEC. 6027. DELTA REGIONAL AUTHORITY.

    (a) VOTING- Section 382B(c) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-1(c)) is amended by striking paragraph (1) and inserting the following:

      ‘(1) IN GENERAL-

        ‘(A) TEMPORARY METHOD- During the period beginning on the date of enactment of this subparagraph and ending on December 31, 2004, a decision by the Authority shall require the affirmative vote of the Federal cochairperson and a majority of the State members (not including any member representing a State that is delinquent under subsection (g)(2)(C)) to be effective.

        ‘(B) PERMANENT METHOD- Effective beginning on January 1, 2005, a decision by the Authority shall require a majority vote of the Authority (not including any member representing a State that is delinquent under subsection (g)(2)(C)) to be effective.’.

    (b) AUTHORITY TO ISSUE REGULATIONS- Section 382B(e)(4) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-1(e)(4)) is amended by striking ‘and rules’ and inserting ‘, rules, and regulations’.

    (c) ECONOMIC AND COMMUNITY DEVELOPMENT GRANTS- Section 382C(b) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-2(b)) is amended by striking paragraph (3).

    (d) SUPPLEMENTS TO FEDERAL GRANT PROGRAMS- Section 382D of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-3) is amended to read as follows:

‘SEC. 382D. SUPPLEMENTS TO FEDERAL GRANT PROGRAMS.

    ‘(a) FINDING- Congress finds that certain States and local communities of the region, including local development districts, may be unable to take maximum advantage of Federal grant programs for which the States and communities are eligible because--

      ‘(1) the States or communities lack the economic resources to provide the required matching share; or

      ‘(2) there are insufficient funds available under the applicable Federal law authorizing the Federal grant program to meet pressing needs of the region.

    ‘(b) FEDERAL GRANT PROGRAM FUNDING- Notwithstanding any provision of law limiting the Federal share, the areas eligible for assistance, or the authorizations of appropriations of any Federal grant program, and in accordance with subsection (c), the Authority, with the approval of the Federal cochairperson and with respect to a project to be carried out in the region--

      ‘(1) may increase the Federal share of the costs of a project under the Federal grant program to not more than 90 percent (except as provided in section 382F(b)); and

      ‘(2) shall use amounts made available to carry out this subtitle to pay the increased Federal share.

    ‘(c) CERTIFICATIONS-

      ‘(1) IN GENERAL- In the case of any project for which all or any portion of the basic Federal share of the costs of the project is proposed to be paid under this section, no Federal contribution shall be made until the Federal official administering the Federal law that authorizes the Federal grant program certifies that the project--

        ‘(A) meets (except as provided in subsection (b)) the applicable requirements of the applicable Federal grant program; and

        ‘(B) could be approved for Federal contribution under the Federal grant program if funds were available under the law for the project.

      ‘(2) CERTIFICATION BY AUTHORITY-

        ‘(A) IN GENERAL- The certifications and determinations required to be made by the Authority for approval of projects under this Act in accordance with section 382I--

          ‘(i) shall be controlling; and

          ‘(ii) shall be accepted by the Federal agencies.

        ‘(B) ACCEPTANCE BY FEDERAL COCHAIRPERSON- In the case of any project described in paragraph (1), any finding, report, certification, or documentation required to be submitted with respect to the project to the head of the department, agency, or instrumentality of the Federal Government responsible for the administration of the Federal grant program under which the project is carried out shall be accepted by the Federal cochairperson.’.

    (e) GRANTS TO LOCAL DEVELOPMENT AGENCIES- Section 382E(b)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-4(b)(1)) is amended by striking ‘may’ and inserting ‘shall’.

    (f) APPROVAL OF DEVELOPMENT PLANS AND PROJECTS- Section 382I of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-8) is amended--

      (1) in subsection (a), by inserting ‘and approved’ after ‘reviewed’; and

      (2) in subsection (d), by striking ‘VOTES FOR DECISIONS- ’ and inserting ‘APPROVAL OF GRANT APPLICATIONS- ’.

    (g) AUTHORIZATION OF APPROPRIATIONS- Section 382M(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-12(a)) is amended by striking ‘2002’ and inserting ‘2007’.

    (h) TERMINATION OF AUTHORITY- Section 382N of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-13) is amended by striking ‘2002’ and inserting ‘2007’.

    (i) DELTA REGION AGRICULTURAL ECONOMIC DEVELOPMENT- Subtitle D of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981 et seq.) (as amended by section 6025) is amended by adding at the end the following:

‘SEC. 379D. DELTA REGION AGRICULTURAL ECONOMIC DEVELOPMENT.

    ‘(a) IN GENERAL- The Secretary may make grants to assist in the development of state-of-the-art technology in animal nutrition (including research and development of the technology) and value-added manufacturing to promote an economic platform for the Delta region (as defined in section 382A) to relieve severe economic conditions.

    ‘(b) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this section $7,000,000 for each of fiscal years 2002 through 2007.’.

    (j) DEFINITION OF LOWER MISSISSIPPI- Section 4(2)(I) of the Delta Development Act (42 U.S.C. 3121 note; Public Law 100-460) is amended by inserting ‘Butler, Conecuh, Escambia, Monroe,’ after ‘Russell,’.

SEC. 6028. NORTHERN GREAT PLAINS REGIONAL AUTHORITY.

    The Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.) is amended by adding at the end the following:

‘Subtitle G--Northern Great Plains Regional Authority

‘SEC. 383A. DEFINITIONS.

    ‘In this subtitle:

      ‘(1) AUTHORITY- The term ‘Authority’ means the Northern Great Plains Regional Authority established by section 383B.

      ‘(2) FEDERAL GRANT PROGRAM- The term ‘Federal grant program’ means a Federal grant program to provide assistance in--

        ‘(A) implementing the recommendations of the Northern Great Plains Rural Development Commission established by the Northern Great Plains Rural Development Act (7 U.S.C. 2661 note; Public Law 103-318);

        ‘(B) acquiring or developing land;

        ‘(C) constructing or equipping a highway, road, bridge, or facility;

        ‘(D) carrying out other economic development activities; or

        ‘(E) conducting research activities related to the activities described in subparagraphs (A) through (D).

      ‘(3) INDIAN TRIBE- The term ‘Indian tribe’ has the meaning given the term in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b).

      ‘(4) REGION- The term ‘region’ means the States of Iowa, Minnesota, Nebraska, North Dakota, and South Dakota.

‘SEC. 383B. NORTHERN GREAT PLAINS REGIONAL AUTHORITY.

    ‘(a) ESTABLISHMENT-

      ‘(1) IN GENERAL- There is established the Northern Great Plains Regional Authority.

      ‘(2) COMPOSITION- The Authority shall be composed of--

        ‘(A) a Federal member, to be appointed by the President, by and with the advice and consent of the Senate;

        ‘(B) the Governor (or a designee of the Governor) of each State in the region that elects to participate in the Authority; and

        ‘(C) a member of an Indian tribe, who shall be a chairperson of an Indian tribe in the region or a designee of such a chairperson, to be appointed by the President, by and with the advice and consent of the Senate.

      ‘(3) COCHAIRPERSONS- The Authority shall be headed by--

        ‘(A) the Federal member, who shall serve--

          ‘(i) as the Federal cochairperson; and

          ‘(ii) as a liaison between the Federal Government and the Authority;

        ‘(B) a State cochairperson, who--

          ‘(i) shall be a Governor of a participating State in the region; and

          ‘(ii) shall be elected by the State members for a term of not less than 1 year; and

        ‘(C) the member of an Indian tribe, who shall serve--

          ‘(i) as the tribal cochairperson; and

          ‘(ii) as a liaison between the governments of Indian tribes in the region and the Authority.

    ‘(b) ALTERNATE MEMBERS-

      ‘(1) ALTERNATE FEDERAL COCHAIRPERSON- The President shall appoint an alternate Federal cochairperson.

      ‘(2) STATE ALTERNATES-

        ‘(A) IN GENERAL- The State member of a participating State may have a single alternate, who shall be--

          ‘(i) a resident of that State; and

          ‘(ii) appointed by the Governor of the State.

        ‘(B) QUORUM- A State alternate member shall not be counted toward the establishment of a quorum of the members of the Authority in any case in which a quorum of the State members is required to be present.

      ‘(3) ALTERNATE TRIBAL COCHAIRPERSON- The President shall appoint an alternate tribal cochairperson, by and with the advice and consent of the Senate.

      ‘(4) DELEGATION OF POWER- No power or responsibility of the Authority specified in paragraphs (2) and (3) of subsection (c), and no voting right of any member of the Authority, shall be delegated to any person who is not--

        ‘(A) a member of the Authority; or

        ‘(B) entitled to vote in Authority meetings.

    ‘(c) VOTING-

      ‘(1) IN GENERAL- A decision by the Authority shall require a majority vote of the Authority (not including any member representing a State that is delinquent under subsection (g)(2)(D)) to be effective.

      ‘(2) QUORUM- A quorum of State members shall be required to be present for the Authority to make any policy decision, including--

        ‘(A) a modification or revision of an Authority policy decision;

        ‘(B) approval of a State or regional development plan; and

        ‘(C) any allocation of funds among the States.

      ‘(3) PROJECT AND GRANT PROPOSALS- The approval of project and grant proposals shall be--

        ‘(A) a responsibility of the Authority; and

        ‘(B) conducted in accordance with section 383I.

      ‘(4) VOTING BY ALTERNATE MEMBERS- An alternate member shall vote in the case of the absence, death, disability, removal, or resignation of the Federal, State, or Indian tribe member for whom the alternate member is an alternate.

    ‘(d) DUTIES- The Authority shall--

      ‘(1) develop, on a continuing basis, comprehensive and coordinated plans and programs to establish priorities and approve grants for the economic development of the region, giving due consideration to other Federal, State, tribal, and local planning and development activities in the region;

      ‘(2) not later than 220 days after the date of enactment of this subtitle, establish priorities in a development plan for the region (including 5-year regional outcome targets);

      ‘(3) assess the needs and assets of the region based on available research, demonstrations, investigations, assessments, and evaluations of the region prepared by Federal, State, tribal, and local agencies, universities, local development districts, and other nonprofit groups;

      ‘(4) formulate and recommend to the Governors and legislatures of States that participate in the Authority forms of interstate cooperation;

      ‘(5) work with State, tribal, and local agencies in developing appropriate model legislation;

      ‘(6)(A) enhance the capacity of, and provide support for, local development districts in the region; or

      ‘(B) if no local development district exists in an area in a participating State in the region, foster the creation of a local development district;

      ‘(7) encourage private investment in industrial, commercial, and other economic development projects in the region; and

      ‘(8) cooperate with and assist State governments with economic development programs of participating States.

    ‘(e) ADMINISTRATION- In carrying out subsection (d), the Authority may--

      ‘(1) hold such hearings, sit and act at such times and places, take such testimony, receive such evidence, and print or otherwise reproduce and distribute a description of the proceedings and reports on actions by the Authority as the Authority considers appropriate;

      ‘(2) authorize, through the Federal, State, or tribal cochairperson or any other member of the Authority designated by the Authority, the administration of oaths if the Authority determines that testimony should be taken or evidence received under oath;

      ‘(3) request from any Federal, State, tribal, or local agency such information as may be available to or procurable by the agency that may be of use to the Authority in carrying out the duties of the Authority;

      ‘(4) adopt, amend, and repeal bylaws and rules governing the conduct of business and the performance of duties of the Authority;

      ‘(5) request the head of any Federal agency to detail to the Authority such personnel as the Authority requires to carry out duties of the Authority, each such detail to be without loss of seniority, pay, or other employee status;

      ‘(6) request the head of any State agency, tribal government, or local government to detail to the Authority such personnel as the Authority requires to carry out duties of the Authority, each such detail to be without loss of seniority, pay, or other employee status;

      ‘(7) provide for coverage of Authority employees in a suitable retirement and employee benefit system by--

        ‘(A) making arrangements or entering into contracts with any participating State government or tribal government; or

        ‘(B) otherwise providing retirement and other employee benefit coverage;

      ‘(8) accept, use, and dispose of gifts or donations of services or real, personal, tangible, or intangible property;

      ‘(9) enter into and perform such contracts, leases, cooperative agreements, or other transactions as are necessary to carry out Authority duties, including any contracts, leases, or cooperative agreements with--

        ‘(A) any department, agency, or instrumentality of the United States;

        ‘(B) any State (including a political subdivision, agency, or instrumentality of the State);

        ‘(C) any Indian tribe in the region; or

        ‘(D) any person, firm, association, or corporation; and

      ‘(10) establish and maintain a central office and field offices at such locations as the Authority may select.

    ‘(f) FEDERAL AGENCY COOPERATION- A Federal agency shall--

      ‘(1) cooperate with the Authority; and

      ‘(2) provide, on request of the Federal cochairperson, appropriate assistance in carrying out this subtitle, in accordance with applicable Federal laws (including regulations).

    ‘(g) ADMINISTRATIVE EXPENSES-

      ‘(1) FEDERAL SHARE- The Federal share of the administrative expenses of the Authority shall be--

        ‘(A) for fiscal year 2002, 100 percent;

        ‘(B) for fiscal year 2003, 75 percent; and

        ‘(C) for fiscal year 2004 and each fiscal year thereafter, 50 percent.

      ‘(2) NON-FEDERAL SHARE-

        ‘(A) IN GENERAL- The non-Federal share of the administrative expenses of the Authority shall be paid by non-Federal sources in the States that participate in the Authority.

        ‘(B) SHARE PAID BY EACH STATE- The share of administrative expenses of the Authority to be paid by non-Federal sources in each State shall be determined by the Authority.

        ‘(C) NO FEDERAL PARTICIPATION- The Federal cochairperson shall not participate or vote in any decision under subparagraph (B).

        ‘(D) DELINQUENT STATES- If a State is delinquent in payment of the State’s share of administrative expenses of the Authority under this subsection--

          ‘(i) no assistance under this subtitle shall be provided to the State (including assistance to a political subdivision or a resident of the State); and

          ‘(ii) no member of the Authority from the State shall participate or vote in any action by the Authority.

    ‘(h) COMPENSATION-

      ‘(1) FEDERAL AND TRIBAL COCHAIRPERSONS- The Federal cochairperson and the tribal cochairperson shall be compensated by the Federal Government at the annual rate of basic pay prescribed for level III of the Executive Schedule in subchapter II of chapter 53 of title 5, United States Code.

      ‘(2) ALTERNATE FEDERAL AND TRIBAL COCHAIRPERSONS- The alternate Federal cochairperson and the alternate tribal cochairperson--

        ‘(A) shall be compensated by the Federal Government at the annual rate of basic pay prescribed for level V of the Executive Schedule described in paragraph (1); and

        ‘(B) when not actively serving as an alternate, shall perform such functions and duties as are delegated by the Federal cochairperson or the tribal cochairperson, respectively.

      ‘(3) STATE MEMBERS AND ALTERNATES-

        ‘(A) IN GENERAL- A State shall compensate each member and alternate representing the State on the Authority at the rate established by State law.

        ‘(B) NO ADDITIONAL COMPENSATION- No State member or alternate member shall receive any salary, or any contribution to or supplementation of salary from any source other than the State for services provided by the member or alternate member to the Authority.

      ‘(4) DETAILED EMPLOYEES-

        ‘(A) IN GENERAL- No person detailed to serve the Authority under subsection (e)(6) shall receive any salary or any contribution to or supplementation of salary for services provided to the Authority from--

          ‘(i) any source other than the State, tribal, local, or intergovernmental agency from which the person was detailed; or

          ‘(ii) the Authority.

        ‘(B) VIOLATION- Any person that violates this paragraph shall be fined not more than $5,000, imprisoned not more than 1 year, or both.

        ‘(C) APPLICABLE LAW- The Federal cochairperson, the alternate Federal cochairperson, and any Federal officer or employee detailed to duty on the Authority under subsection (e)(5) shall not be subject to subparagraph (A), but shall remain subject to sections 202 through 209 of title 18, United States Code.

      ‘(5) ADDITIONAL PERSONNEL-

        ‘(A) COMPENSATION-

          ‘(i) IN GENERAL- The Authority may appoint and fix the compensation of an executive director and such other personnel as are necessary to enable the Authority to carry out the duties of the Authority.

          ‘(ii) EXCEPTION- Compensation under clause (i) shall not exceed the maximum rate for the Senior Executive Service under section 5382 of title 5, United States Code, including any applicable locality-based comparability payment that may be authorized under section 5304(h)(2)(C) of that title.

        ‘(B) EXECUTIVE DIRECTOR- The executive director shall be responsible for--

          ‘(i) the carrying out of the administrative duties of the Authority;

          ‘(ii) direction of the Authority staff; and

          ‘(iii) such other duties as the Authority may assign.

        ‘(C) NO FEDERAL EMPLOYEE STATUS- No member, alternate, officer, or employee of the Authority (except the Federal cochairperson of the Authority, the alternate and staff for the Federal cochairperson, and any Federal employee detailed to the Authority under subsection (e)(5)) shall be considered to be a Federal employee for any purpose.

    ‘(i) CONFLICTS OF INTEREST-

      ‘(1) IN GENERAL- Except as provided under paragraph (2), no State member, Indian tribe member, State alternate, officer, or employee of the Authority shall participate personally and substantially as a member, alternate, officer, or employee of the Authority, through decision, approval, disapproval, recommendation, the rendering of advice, investigation, or otherwise, in any proceeding, application, request for a ruling or other determination, contract, claim, controversy, or other matter in which, to knowledge of the member, alternate, officer, or employee--

        ‘(A) the member, alternate, officer, or employee;

        ‘(B) the spouse, minor child, partner, or organization (other than a State or political subdivision of the State or the Indian tribe) of the member, alternate, officer, or employee, in which the member, alternate, officer, or employee is serving as officer, director, trustee, partner, or employee; or

        ‘(C) any person or organization with whom the member, alternate, officer, or employee is negotiating or has any arrangement concerning prospective employment;

      has a financial interest.

      ‘(2) DISCLOSURE- Paragraph (1) shall not apply if the State member, Indian tribe member, alternate, officer, or employee--

        ‘(A) immediately advises the Authority of the nature and circumstances of the proceeding, application, request for a ruling or other determination, contract, claim, controversy, or other particular matter presenting a potential conflict of interest;

        ‘(B) makes full disclosure of the financial interest; and

        ‘(C) before the proceeding concerning the matter presenting the conflict of interest, receives a written determination by the Authority that the interest is not so substantial as to be likely to affect the integrity of the services that the Authority may expect from the State member, Indian tribe member, alternate, officer, or employee.

      ‘(3) VIOLATION- Any person that violates this subsection shall be fined not more than $10,000, imprisoned not more than 2 years, or both.

    ‘(j) VALIDITY OF CONTRACTS, LOANS, AND GRANTS- The Authority may declare void any contract, loan, or grant of or by the Authority in relation to which the Authority determines that there has been a violation of any provision under subsection (h)(4) or subsection (i) of this subtitle, or sections 202 through 209 of title 18, United States Code.

‘SEC. 383C. ECONOMIC AND COMMUNITY DEVELOPMENT GRANTS.

    ‘(a) IN GENERAL- The Authority may approve grants to States, Indian tribes, local governments, and public and nonprofit organizations for projects, approved in accordance with section 383I--

      ‘(1) to develop the transportation and telecommunication infrastructure of the region for the purpose of facilitating economic development in the region (except that grants for this purpose may be made only to States, Indian tribes, local governments, and nonprofit organizations);

      ‘(2) to assist the region in obtaining the job training, employment-related education, and business development (with an emphasis on entrepreneurship) that are needed to build and maintain strong local economies;

      ‘(3) to provide assistance to severely distressed and underdeveloped areas that lack financial resources for improving basic public services;

      ‘(4) to provide assistance to severely distressed and underdeveloped areas that lack financial resources for equipping industrial parks and related facilities; and

      ‘(5) to otherwise achieve the purposes of this subtitle.

    ‘(b) FUNDING-

      ‘(1) IN GENERAL- Funds for grants under subsection (a) may be provided--

        ‘(A) entirely from appropriations to carry out this section;

        ‘(B) in combination with funds available under another Federal grant program; or

        ‘(C) from any other source.

      ‘(2) PRIORITY OF FUNDING- To best build the foundations for long-term economic development and to complement other Federal, State, and tribal resources in the region, Federal funds available under this subtitle shall be focused on the activities in the following order or priority:

        ‘(A) Basic public infrastructure in distressed counties and isolated areas of distress.

        ‘(B) Transportation and telecommunication infrastructure for the purpose of facilitating economic development in the region.

        ‘(C) Business development, with emphasis on entrepreneurship.

        ‘(D) Job training or employment-related education, with emphasis on use of existing public educational institutions located in the region.

‘SEC. 383D. SUPPLEMENTS TO FEDERAL GRANT PROGRAMS.

    ‘(a) FINDING- Congress finds that certain States and local communities of the region, including local development districts, may be unable to take maximum advantage of Federal grant programs for which the States and communities are eligible because--

      ‘(1) they lack the economic resources to provide the required matching share; or

      ‘(2) there are insufficient funds available under the applicable Federal law authorizing the Federal grant program to meet pressing needs of the region.

    ‘(b) FEDERAL GRANT PROGRAM FUNDING- Notwithstanding any provision of law limiting the Federal share, the areas eligible for assistance, or the authorizations of appropriations, under any Federal grant program, and in accordance with subsection (c), the Authority, with the approval of the Federal cochairperson and with respect to a project to be carried out in the region--

      ‘(1) may increase the Federal share of the costs of a project under any Federal grant program to not more than 90 percent (except as provided in section 383F(b)); and

      ‘(2) shall use amounts made available to carry out this subtitle to pay the increased Federal share.

    ‘(c) CERTIFICATIONS-

      ‘(1) IN GENERAL- In the case of any project for which all or any portion of the basic Federal share of the costs of the project is proposed to be paid under this section, no Federal contribution shall be made until the Federal official administering the Federal law that authorizes the Federal grant program certifies that the project--

        ‘(A) meets (except as provided in subsection (b)) the applicable requirements of the applicable Federal grant program; and

        ‘(B) could be approved for Federal contribution under the Federal grant program if funds were available under the law for the project.

      ‘(2) CERTIFICATION BY AUTHORITY-

        ‘(A) IN GENERAL- The certifications and determinations required to be made by the Authority for approval of projects under this Act in accordance with section 383I--

          ‘(i) shall be controlling; and

          ‘(ii) shall be accepted by the Federal agencies.

        ‘(B) ACCEPTANCE BY FEDERAL COCHAIRPERSON- In the case of any project described in paragraph (1), any finding, report, certification, or documentation required to be submitted with respect to the project to the head of the department, agency, or instrumentality of the Federal Government responsible for the administration of the Federal grant program under which the project is carried out shall be accepted by the Federal cochairperson.

‘SEC. 383E. LOCAL DEVELOPMENT DISTRICTS AND ORGANIZATIONS AND NORTHERN GREAT PLAINS INC.

    ‘(a) DEFINITION OF LOCAL DEVELOPMENT DISTRICT- In this section, the term ‘local development district’ means an entity--

      ‘(1) that--

        ‘(A) is a planning district in existence on the date of enactment of this subtitle that is recognized by the Economic Development Administration of the Department of Commerce; or

        ‘(B) is--

          ‘(i) organized and operated in a manner that ensures broad-based community participation and an effective opportunity for other nonprofit groups to contribute to the development and implementation of programs in the region;

          ‘(ii) governed by a policy board with at least a simple majority of members consisting of--

            ‘(I) elected officials or employees of a general purpose unit of local government who have been appointed to represent the government; or

            ‘(II) individuals appointed by the general purpose unit of local government to represent the government;

          ‘(iii) certified to the Authority as having a charter or authority that includes the economic development of counties or parts of counties or other political subdivisions within the region--

            ‘(I) by the Governor of each State in which the entity is located; or

            ‘(II) by the State officer designated by the appropriate State law to make the certification; and

          ‘(iv)(I) a nonprofit incorporated body organized or chartered under the law of the State in which the entity is located;

          ‘(II) a nonprofit agency or instrumentality of a State or local government;

          ‘(III) a public organization established before the date of enactment of this subtitle under State law for creation of multi-jurisdictional, area-wide planning organizations; or

          ‘(IV) a nonprofit association or combination of bodies, agencies, and instrumentalities described in subclauses (I) through (III); and

      ‘(2) that has not, as certified by the Federal cochairperson--

        ‘(A) inappropriately used Federal grant funds from any Federal source; or

        ‘(B) appointed an officer who, during the period in which another entity inappropriately used Federal grant funds from any Federal source, was an officer of the other entity.

    ‘(b) GRANTS TO LOCAL DEVELOPMENT DISTRICTS-

      ‘(1) IN GENERAL- The Authority may make grants for administrative expenses under this section.

      ‘(2) CONDITIONS FOR GRANTS-

        ‘(A) MAXIMUM AMOUNT- The amount of any grant awarded under paragraph (1) shall not exceed 80 percent of the administrative expenses of the local development district receiving the grant.

        ‘(B) MAXIMUM PERIOD- No grant described in paragraph (1) shall be awarded to a State agency certified as a local development district for a period greater than 3 years.

        ‘(C) LOCAL SHARE- The contributions of a local development district for administrative expenses may be in cash or in kind, fairly evaluated, including space, equipment, and services.

    ‘(c) DUTIES OF LOCAL DEVELOPMENT DISTRICTS- A local development district shall--

      ‘(1) operate as a lead organization serving multicounty areas in the region at the local level; and

      ‘(2) serve as a liaison between State, tribal, and local governments, nonprofit organizations (including community-based groups and educational institutions), the business community, and citizens that--

        ‘(A) are involved in multijurisdictional planning;

        ‘(B) provide technical assistance to local jurisdictions and potential grantees; and

        ‘(C) provide leadership and civic development assistance.

    ‘(d) NORTHERN GREAT PLAINS INC- Northern Great Plains Inc., a nonprofit corporation incorporated in the State of Minnesota to implement the recommendations of the Northern Great Plains Rural Development Commission established by the Northern Great Plains Rural Development Act (7 U.S.C. 2661 note; Public Law 103-318)--

      ‘(1) shall serve as an independent, primary resource for the Authority on issues of concern to the region;

      ‘(2) shall advise the Authority on development of international trade;

      ‘(3) may provide research, education, training, and other support to the Authority; and

      ‘(4) may carry out other activities on its own behalf or on behalf of other entities.

‘SEC. 383F. DISTRESSED COUNTIES AND AREAS AND NONDISTRESSED COUNTIES.

    ‘(a) DESIGNATIONS- Not later than 90 days after the date of enactment of this subtitle, and annually thereafter, the Authority, in accordance with such criteria as the Authority may establish, shall designate--

      ‘(1) as distressed counties, counties in the region that are the most severely and persistently distressed and underdeveloped and have high rates of poverty, unemployment, or outmigration;

      ‘(2) as nondistressed counties, counties in the region that are not designated as distressed counties under paragraph (1); and

      ‘(3) as isolated areas of distress, areas located in nondistressed counties (as designated under paragraph (2)) that have high rates of poverty, unemployment, or outmigration.

    ‘(b) DISTRESSED COUNTIES-

      ‘(1) IN GENERAL- The Authority shall allocate at least 75 percent of the appropriations made available under section 383M for programs and projects designed to serve the needs of distressed counties and isolated areas of distress in the region.

      ‘(2) FUNDING LIMITATIONS- The funding limitations under section 383D(b) shall not apply to a project to provide transportation or telecommunication or basic public services to residents of 1 or more distressed counties or isolated areas of distress in the region.

    ‘(c) NONDISTRESSED COUNTIES-

      ‘(1) IN GENERAL- Except as provided in paragraph (2), no funds shall be provided under this subtitle for a project located in a county designated as a nondistressed county under subsection (a)(2).

      ‘(2) EXCEPTIONS-

        ‘(A) IN GENERAL- The funding prohibition under paragraph (1) shall not apply to grants to fund the administrative expenses of local development districts under section 383E(b).

        ‘(B) MULTICOUNTY PROJECTS- The Authority may waive the application of the funding prohibition under paragraph (1) to--

          ‘(i) a multicounty project that includes participation by a nondistressed county; or

          ‘(ii) any other type of project;

        if the Authority determines that the project could bring significant benefits to areas of the region outside a nondistressed county.

        ‘(C) ISOLATED AREAS OF DISTRESS- For a designation of an isolated area of distress for assistance to be effective, the designation shall be supported--

          ‘(i) by the most recent Federal data available; or

          ‘(ii) if no recent Federal data are available, by the most recent data available through the government of the State in which the isolated area of distress is located.

    ‘(d) TRANSPORTATION, TELECOMMUNICATION, AND BASIC PUBLIC INFRASTRUCTURE- The Authority shall allocate at least 50 percent of any funds made available under section 383M for transportation, telecommunication, and basic public infrastructure projects authorized under paragraphs (1) and (3) of section 383C(a).

‘SEC. 383G. DEVELOPMENT PLANNING PROCESS.

    ‘(a) STATE DEVELOPMENT PLAN- In accordance with policies established by the Authority, each State member shall submit a development plan for the area of the region represented by the State member.

    ‘(b) CONTENT OF PLAN- A State development plan submitted under subsection (a) shall reflect the goals, objectives, and priorities identified in the regional development plan developed under section 383B(d)(2).

    ‘(c) CONSULTATION WITH INTERESTED LOCAL PARTIES- In carrying out the development planning process (including the selection of programs and projects for assistance), a State may--

      ‘(1) consult with--

        ‘(A) local development districts; and

        ‘(B) local units of government; and

      ‘(2) take into consideration the goals, objectives, priorities, and recommendations of the entities described in paragraph (1).

    ‘(d) PUBLIC PARTICIPATION-

      ‘(1) IN GENERAL- The Authority and applicable State and local development districts shall encourage and assist, to the maximum extent practicable, public participation in the development, revision, and implementation of all plans and programs under this subtitle.

      ‘(2) REGULATIONS- The Authority shall develop guidelines for providing public participation described in paragraph (1), including public hearings.

‘SEC. 383H. PROGRAM DEVELOPMENT CRITERIA.

    ‘(a) IN GENERAL- In considering programs and projects to be provided assistance under this subtitle, and in establishing a priority ranking of the requests for assistance provided to the Authority, the Authority shall follow procedures that ensure, to the maximum extent practicable, consideration of--

      ‘(1) the relationship of the project or class of projects to overall regional development;

      ‘(2) the per capita income and poverty and unemployment and outmigration rates in an area;

      ‘(3) the financial resources available to the applicants for assistance seeking to carry out the project, with emphasis on ensuring that projects are adequately financed to maximize the probability of successful economic development;

      ‘(4) the importance of the project or class of projects in relation to other projects or classes of projects that may be in competition for the same funds;

      ‘(5) the prospects that the project for which assistance is sought will improve, on a continuing rather than a temporary basis, the opportunities for employment, the average level of income, or the economic development of the area to be served by the project; and

      ‘(6) the extent to which the project design provides for detailed outcome measurements by which grant expenditures and the results of the expenditures may be evaluated.

    ‘(b) NO RELOCATION ASSISTANCE- No financial assistance authorized by this subtitle shall be used to assist a person or entity in relocating from one area to another, except that financial assistance may be used as otherwise authorized by this title to attract businesses from outside the region to the region.

    ‘(c) MAINTENANCE OF EFFORT- Funds may be provided for a program or project in a State under this subtitle only if the Authority determines that the level of Federal or State financial assistance provided under a law other than this subtitle, for the same type of program or project in the same area of the State within the region, will not be reduced as a result of funds made available by this subtitle.

‘SEC. 383I. APPROVAL OF DEVELOPMENT PLANS AND PROJECTS.

    ‘(a) IN GENERAL- A State or regional development plan or any multistate subregional plan that is proposed for development under this subtitle shall be reviewed by the Authority.

    ‘(b) EVALUATION BY STATE MEMBER- An application for a grant or any other assistance for a project under this subtitle shall be made through and evaluated for approval by the State member of the Authority representing the applicant.

    ‘(c) CERTIFICATION- An application for a grant or other assistance for a project shall be approved only on certification by the State member that the application for the project--

      ‘(1) describes ways in which the project complies with any applicable State development plan;

      ‘(2) meets applicable criteria under section 383H;

      ‘(3) provides adequate assurance that the proposed project will be properly administered, operated, and maintained; and

      ‘(4) otherwise meets the requirements of this subtitle.

    ‘(d) VOTES FOR DECISIONS- On certification by a State member of the Authority of an application for a grant or other assistance for a specific project under this section, an affirmative vote of the Authority under section 383B(c) shall be required for approval of the application.

‘SEC. 383J. CONSENT OF STATES.

    ‘Nothing in this subtitle requires any State to engage in or accept any program under this subtitle without the consent of the State.

‘SEC. 383K. RECORDS.

    ‘(a) RECORDS OF THE AUTHORITY-

      ‘(1) IN GENERAL- The Authority shall maintain accurate and complete records of all transactions and activities of the Authority.

      ‘(2) AVAILABILITY- All records of the Authority shall be available for audit and examination by the Comptroller General of the United States and the Inspector General of the Department of Agriculture (including authorized representatives of the Comptroller General and the Inspector General of the Department of Agriculture).

    ‘(b) RECORDS OF RECIPIENTS OF FEDERAL ASSISTANCE-

      ‘(1) IN GENERAL- A recipient of Federal funds under this subtitle shall, as required by the Authority, maintain accurate and complete records of transactions and activities financed with Federal funds and report to the Authority on the transactions and activities to the Authority.

      ‘(2) AVAILABILITY- All records required under paragraph (1) shall be available for audit by the Comptroller General of the United States, the Inspector General of the Department of Agriculture, and the Authority (including authorized representatives of the Comptroller General, the Inspector General of the Department of Agriculture, and the Authority).

    ‘(c) ANNUAL AUDIT- The Inspector General of the Department of Agriculture shall audit the activities, transactions, and records of the Authority on an annual basis.

‘SEC. 383L. ANNUAL REPORT.

    ‘Not later than 180 days after the end of each fiscal year, the Authority shall submit to the President and to Congress a report describing the activities carried out under this subtitle.

‘SEC. 383M. AUTHORIZATION OF APPROPRIATIONS.

    ‘(a) IN GENERAL- There is authorized to be appropriated to the Authority to carry out this subtitle $30,000,000 for each of fiscal years 2002 through 2007, to remain available until expended.

    ‘(b) ADMINISTRATIVE EXPENSES- Not more than 5 percent of the amount appropriated under subsection (a) for a fiscal year shall be used for administrative expenses of the Authority.

    ‘(c) MINIMUM STATE SHARE OF GRANTS- Notwithstanding any other provision of this subtitle, for any fiscal year, the aggregate amount of grants received by a State and all persons or entities in the State under this subtitle shall be not less than 1/3 of the product obtained by multiplying--

      ‘(1) the aggregate amount of grants under this subtitle for the fiscal year; and

      ‘(2) the ratio that--

        ‘(A) the population of the State (as determined by the Secretary of Commerce based on the most recent decennial census for which data are available); bears to

        ‘(B) the population of the region (as so determined).

‘SEC. 383N. TERMINATION OF AUTHORITY.

    ‘The authority provided by this subtitle terminates effective October 1, 2007.’.

SEC. 6029. RURAL BUSINESS INVESTMENT PROGRAM.

    The Consolidated Farm and Rural Development Act (as amended by section 6028) is amended by adding at the end the following:

‘Subtitle H--Rural Business Investment Program

‘SEC. 384A. DEFINITIONS.

    ‘In this subtitle:

      ‘(1) ARTICLES- The term ‘articles’ means articles of incorporation for an incorporated body or the functional equivalent or other similar documents specified by the Secretary for other business entities.

      ‘(2) DEVELOPMENTAL VENTURE CAPITAL- The term ‘developmental venture capital’ means capital in the form of equity capital investments in rural business investment companies with an objective of fostering economic development in rural areas.

      ‘(3) EMPLOYEE WELFARE BENEFIT PLAN; PENSION PLAN-

        ‘(A) IN GENERAL- The terms ‘employee welfare benefit plan’ and ‘pension plan’ have the meanings given the terms in section 3 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002).

        ‘(B) INCLUSIONS- The terms ‘employee welfare benefit plan’ and ‘pension plan’ include--

          ‘(i) public and private pension or retirement plans subject to this subtitle; and

          ‘(ii) similar plans not covered by this subtitle that have been established, and that are maintained, by the Federal Government or any State (including by a political subdivision, agency, or instrumentality of the Federal Government or a State) for the benefit of employees.

      ‘(4) EQUITY CAPITAL- The term ‘equity capital’ means common or preferred stock or a similar instrument, including subordinated debt with equity features.

      ‘(5) LEVERAGE- The term ‘leverage’ includes--

        ‘(A) debentures purchased or guaranteed by the Secretary;

        ‘(B) participating securities purchased or guaranteed by the Secretary; and

        ‘(C) preferred securities outstanding as of the date of enactment of this subtitle.

      ‘(6) LICENSE- The term ‘license’ means a license issued by the Secretary as provided in section 384D(e).

      ‘(7) LIMITED LIABILITY COMPANY- The term ‘limited liability company’ means a business entity that is organized and operating in accordance with a State limited liability company law approved by the Secretary.

      ‘(8) MEMBER- The term ‘member’ means, with respect to a rural business investment company that is a limited liability company, a holder of an ownership interest or a person otherwise admitted to membership in the limited liability company.

      ‘(9) OPERATIONAL ASSISTANCE- The term ‘operational assistance’ means management, marketing, and other technical assistance that assists a rural business concern with business development.

      ‘(10) PARTICIPATION AGREEMENT- The term ‘participation agreement’ means an agreement, between the Secretary and a rural business investment company granted final approval under section 384D(e), that requires the rural business investment company to make investments in smaller enterprises in rural areas.

      ‘(11) PRIVATE CAPITAL-

        ‘(A) IN GENERAL- The term ‘private capital’ means the total of--

          ‘(i)(I) the paid-in capital and paid-in surplus of a corporate rural business investment company;

          ‘(II) the contributed capital of the partners of a partnership rural business investment company; or

          ‘(III) the equity investment of the members of a limited liability company rural business investment company; and

          ‘(ii) unfunded binding commitments from investors that meet criteria established by the Secretary to contribute capital to the rural business investment company, except that--

            ‘(I) unfunded commitments may be counted as private capital for purposes of approval by the Secretary of any request for leverage; but

            ‘(II) leverage shall not be funded based on the commitments.

        ‘(B) EXCLUSIONS- The term ‘private capital’ does not include--

          ‘(i) any funds borrowed by a rural business investment company from any source;

          ‘(ii) any funds obtained through the issuance of leverage; or

          ‘(iii) any funds obtained directly or indirectly from the Federal Government or any State (including by a political subdivision, agency, or instrumentality of the Federal Government or a State), except for--

            ‘(I) funds obtained from the business revenues (excluding any governmental appropriation) of any federally chartered or government-sponsored enterprise established prior to the date of enactment of this subtitle;

            ‘(II) funds invested by an employee welfare benefit plan or pension plan; and

            ‘(III) any qualified nonprivate funds (if the investors of the qualified nonprivate funds do not control, directly or indirectly, the management, board of directors, general partners, or members of the rural business investment company).

      ‘(12) QUALIFIED NONPRIVATE FUNDS- The term ‘qualified nonprivate funds’ means any--

        ‘(A) funds directly or indirectly invested in any applicant or rural business investment company on or before the date of enactment of this subtitle, by any Federal agency, other than the Department of Agriculture, under a provision of law explicitly mandating the inclusion of those funds in the definition of the term ‘private capital’; and

        ‘(B) funds invested in any applicant or rural business investment company by 1 or more entities of any State (including by a political subdivision, agency, or instrumentality of the State and including any guarantee extended by those entities) in an aggregate amount that does not exceed 33 percent of the private capital of the applicant or rural business investment company.

      ‘(13) RURAL BUSINESS CONCERN- The term ‘rural business concern’ means--

        ‘(A) a public, private, or cooperative for-profit or nonprofit organization;

        ‘(B) a for-profit or nonprofit business controlled by an Indian tribe on a Federal or State reservation or other federally recognized Indian tribal group; or

        ‘(C) any other person or entity;

      that primarily operates in a rural area, as determined by the Secretary.

      ‘(14) RURAL BUSINESS INVESTMENT COMPANY- The term ‘rural business investment company’ means a company that--

        ‘(A) has been granted final approval by the Secretary under section 384D(e); and

        ‘(B) has entered into a participation agreement with the Secretary.

      ‘(15) SMALLER ENTERPRISE- The term ‘smaller enterprise’ means any rural business concern that, together with its affiliates--

        ‘(A) has--

          ‘(i) a net financial worth of not more than $6,000,000, as of the date on which assistance is provided under this subtitle to the rural business concern; and

          ‘(ii) an average net income for the 2-year period preceding the date on which assistance is provided under this subtitle to the rural business concern, of not more than $2,000,000, after Federal income taxes (excluding any carryover losses), except that, for purposes of this clause, if the rural business concern is not required by law to pay Federal income taxes at the enterprise level, but is required to pass income through to the shareholders, partners, beneficiaries, or other equitable owners of the business concern, the net income of the business concern shall be determined by allowing a deduction in an amount equal to the total of--

            ‘(I) if the rural business concern is not required by law to pay State (and local, if any) income taxes at the enterprise level, the net income (determined without regard to this clause), multiplied by the marginal State income tax rate (or by the combined State and local income tax rates, as applicable) that would have applied if the business concern were a corporation; and

            ‘(II) the net income (so determined) less any deduction for State (and local) income taxes calculated under subclause (I), multiplied by the marginal Federal income tax rate that would have applied if the rural business concern were a corporation; or

        ‘(B) satisfies the standard industrial classification size standards established by the Administrator of the Small Business Administration for the industry in which the rural business concern is primarily engaged.

‘SEC. 384B. PURPOSES.

    ‘The purposes of the Rural Business Investment Program established under this subtitle are--

      ‘(1) to promote economic development and the creation of wealth and job opportunities in rural areas and among individuals living in those areas by encouraging developmental venture capital investments in smaller enterprises primarily located in rural areas; and

      ‘(2) to establish a developmental venture capital program, with the mission of addressing the unmet equity investment needs of small enterprises located in rural areas, by authorizing the Secretary--

        ‘(A) to enter into participation agreements with rural business investment companies;

        ‘(B) to guarantee debentures of rural business investment companies to enable each rural business investment company to make developmental venture capital investments in smaller enterprises in rural areas; and

        ‘(C) to make grants to rural business investment companies, and to other entities, for the purpose of providing operational assistance to smaller enterprises financed, or expected to be financed, by rural business investment companies.

‘SEC. 384C. ESTABLISHMENT.

    ‘In accordance with this subtitle, the Secretary shall establish a Rural Business Investment Program, under which the Secretary may--

      ‘(1) enter into participation agreements with companies granted final approval under section 384D(e) for the purposes set forth in section 384B;

      ‘(2) guarantee the debentures issued by rural business investment companies as provided in section 384E; and

      ‘(3) make grants to rural business investment companies, and to other entities, under section 384H.

‘SEC. 384D. SELECTION OF RURAL BUSINESS INVESTMENT COMPANIES.

    ‘(a) ELIGIBILITY- A company shall be eligible to apply to participate, as a rural business investment company, in the program established under this subtitle if--

      ‘(1) the company is a newly formed for-profit entity or a newly formed for-profit subsidiary of such an entity;

      ‘(2) the company has a management team with experience in community development financing or relevant venture capital financing; and

      ‘(3) the company will invest in enterprises that will create wealth and job opportunities in rural areas, with an emphasis on smaller enterprises.

    ‘(b) APPLICATION- To participate, as a rural business investment company, in the program established under this subtitle, a company meeting the eligibility requirements of subsection (a) shall submit an application to the Secretary that includes--

      ‘(1) a business plan describing how the company intends to make successful developmental venture capital investments in identified rural areas;

      ‘(2) information regarding the community development finance or relevant venture capital qualifications and general reputation of the management of the company;

      ‘(3) a description of how the company intends to work with community-based organizations and local entities (including local economic development companies, local lenders, and local investors) and to seek to address the unmet equity capital needs of the communities served;

      ‘(4) a proposal describing how the company intends to use the grant funds provided under this subtitle to provide operational assistance to smaller enterprises financed by the company, including information regarding whether the company intends to use licensed professionals, as necessary, on the staff of the company or from an outside entity;

      ‘(5) with respect to binding commitments to be made to the company under this subtitle, an estimate of the ratio of cash to in-kind contributions;

      ‘(6) a description of the criteria to be used to evaluate whether and to what extent the company meets the purposes of the program established under this subtitle;

      ‘(7) information regarding the management and financial strength of any parent firm, affiliated firm, or any other firm essential to the success of the business plan of the company; and

      ‘(8) such other information as the Secretary may require.

    ‘(c) STATUS- Not later than 90 days after the initial receipt by the Secretary of an application under this section, the Secretary shall provide to the applicant a written report describing the status of the application and any requirements remaining for completion of the application.

    ‘(d) MATTERS CONSIDERED- In reviewing and processing any application under this section, the Secretary--

      ‘(1) shall determine whether--

        ‘(A) the applicant meets the requirements of subsection (e); and

        ‘(B) the management of the applicant is qualified and has the knowledge, experience, and capability necessary to comply with this subtitle;

      ‘(2) shall take into consideration--

        ‘(A) the need for and availability of financing for rural business concerns in the geographic area in which the applicant is to commence business;

        ‘(B) the general business reputation of the owners and management of the applicant; and

        ‘(C) the probability of successful operations of the applicant, including adequate profitability and financial soundness; and

      ‘(3) shall not take into consideration any projected shortage or unavailability of grant funds or leverage.

    ‘(e) APPROVAL; LICENSE-

      ‘(1) IN GENERAL- Except as provided in paragraph (2), the Secretary may approve an applicant to operate as a rural business investment company under this subtitle and license the applicant as a rural business investment company, if--

        ‘(A) the Secretary determines that the application satisfies the requirements of subsection (b);

        ‘(B) the area in which the rural business investment company is to conduct its operations, and establishment of branch offices or agencies (if authorized by the articles), are approved by the Secretary; and

        ‘(C) the applicant enters into a participation agreement with the Secretary.

      ‘(2) CAPITAL REQUIREMENTS-

        ‘(A) IN GENERAL- Notwithstanding any other provision of this subtitle, the Secretary may approve an applicant to operate as a rural business investment company under this subtitle and designate the applicant as a rural business investment company, if the Secretary determines that the applicant--

          ‘(i) has private capital of more than $2,500,000;

          ‘(ii) would otherwise be approved under this subtitle, except that the applicant does not satisfy the requirements of section 384I(c); and

          ‘(iii) has a viable business plan that--

            ‘(I) reasonably projects profitable operations; and

            ‘(II) has a reasonable timetable for achieving a level of private capital that satisfies the requirements of section 384I(c).

        ‘(B) LEVERAGE- An applicant approved under subparagraph (A) shall not be eligible to receive leverage under this subtitle until the applicant satisfies the requirements of section 384I(c).

        ‘(C) GRANTS- An applicant approved under subparagraph (A) shall be eligible for grants under section 384H in proportion to the private capital of the applicant, as determined by the Secretary.

‘SEC. 384E. DEBENTURES.

    ‘(a) IN GENERAL- The Secretary may guarantee the timely payment of principal and interest, as scheduled, on debentures issued by any rural business investment company.

    ‘(b) TERMS AND CONDITIONS- The Secretary may make guarantees under this section on such terms and conditions as the Secretary considers appropriate, except that the term of any debenture guaranteed under this section shall not exceed 15 years.

    ‘(c) FULL FAITH AND CREDIT OF THE UNITED STATES- Section 381H(i) shall apply to any guarantee under this section.

    ‘(d) MAXIMUM GUARANTEE- Under this section, the Secretary may--

      ‘(1) guarantee the debentures issued by a rural business investment company only to the extent that the total face amount of outstanding guaranteed debentures of the rural business investment company does not exceed the lesser of--

        ‘(A) 300 percent of the private capital of the rural business investment company; or

        ‘(B) $105,000,000; and

      ‘(2) provide for the use of discounted debentures.

‘SEC. 384F. ISSUANCE AND GUARANTEE OF TRUST CERTIFICATES.

    ‘(a) ISSUANCE- The Secretary may issue trust certificates representing ownership of all or a fractional part of debentures issued by a rural business investment company and guaranteed by the Secretary under this subtitle, if the certificates are based on and backed by a trust or pool approved by the Secretary and composed solely of guaranteed debentures.

    ‘(b) GUARANTEE-

      ‘(1) IN GENERAL- The Secretary may, under such terms and conditions as the Secretary considers appropriate, guarantee the timely payment of the principal of and interest on trust certificates issued by the Secretary or agents of the Secretary for purposes of this section.

      ‘(2) LIMITATION- Each guarantee under this subsection shall be limited to the extent of principal and interest on the guaranteed debentures that compose the trust or pool.

      ‘(3) PREPAYMENT OR DEFAULT-

        ‘(A) IN GENERAL- In the event a debenture in a trust or pool is prepaid, or in the event of default of such a debenture, the guarantee of timely payment of principal and interest on the trust certificates shall be reduced in proportion to the amount of principal and interest the prepaid debenture represents in the trust or pool.

        ‘(B) INTEREST- Interest on prepaid or defaulted debentures shall accrue and be guaranteed by the Secretary only through the date of payment of the guarantee.

        ‘(C) REDEMPTION- At any time during its term, a trust certificate may be called for redemption due to prepayment or default of all debentures.

    ‘(c) FULL FAITH AND CREDIT OF THE UNITED STATES- Section 381H(i) shall apply to any guarantee of a trust certificate issued by the Secretary under this section.

    ‘(d) SUBROGATION AND OWNERSHIP RIGHTS-

      ‘(1) SUBROGATION- If the Secretary pays a claim under a guarantee issued under this section, the claim shall be subrogated fully to the rights satisfied by the payment.

      ‘(2) OWNERSHIP RIGHTS- No Federal, State, or local law shall preclude or limit the exercise by the Secretary of the ownership rights of the Secretary in a debenture residing in a trust or pool against which 1 or more trust certificates are issued under this section.

    ‘(e) MANAGEMENT AND ADMINISTRATION-

      ‘(1) REGISTRATION- The Secretary shall provide for a central registration of all trust certificates issued under this section.

      ‘(2) CREATION OF POOLS- The Secretary may--

        ‘(A) maintain such commercial bank accounts or investments in obligations of the United States as may be necessary to facilitate the creation of trusts or pools backed by debentures guaranteed under this subtitle; and

        ‘(B) issue trust certificates to facilitate the creation of those trusts or pools.

      ‘(3) FIDELITY BOND OR INSURANCE REQUIREMENT- Any agent performing functions on behalf of the Secretary under this paragraph shall provide a fidelity bond or insurance in such amount as the Secretary considers to be necessary to fully protect the interests of the United States.

      ‘(4) REGULATION OF BROKERS AND DEALERS- The Secretary may regulate brokers and dealers in trust certificates issued under this section.

      ‘(5) ELECTRONIC REGISTRATION- Nothing in this subsection prohibits the use of a book-entry or other electronic form of registration for trust certificates issued under this section.

‘SEC. 384G. FEES.

    ‘(a) IN GENERAL- The Secretary may charge such fees as the Secretary considers appropriate with respect to any guarantee or grant issued under this subtitle.

    ‘(b) TRUST CERTIFICATE- Notwithstanding subsection (a), the Secretary shall not collect a fee for any guarantee of a trust certificate under section 384F, except that any agent of the Secretary may collect a fee approved by the Secretary for the functions described in section 384F(e)(2).

    ‘(c) LICENSE-

      ‘(1) IN GENERAL- The Secretary may prescribe fees to be paid by each applicant for a license to operate as a rural business investment company under this subtitle.

      ‘(2) USE OF AMOUNTS- Fees collected under this subsection--

        ‘(A) shall be deposited in the account for salaries and expenses of the Secretary; and

        ‘(B) are authorized to be appropriated solely to cover the costs of licensing examinations.

‘SEC. 384H. OPERATIONAL ASSISTANCE GRANTS.

    ‘(a) IN GENERAL- In accordance with this section, the Secretary may make grants to rural business investment companies and to other entities, as authorized by this subtitle, to provide operational assistance to smaller enterprises financed, or expected to be financed, by the entities.

    ‘(b) TERMS- Grants made under this section shall be made over a multiyear period (not to exceed 10 years) under such terms as the Secretary may require.

    ‘(c) USE OF FUNDS- The proceeds of a grant made under this section may be used by the rural business investment company receiving the grant only to provide operational assistance in connection with an equity or prospective equity investment in a business located in a rural area.

    ‘(d) SUBMISSION OF PLANS- A rural business investment company shall be eligible for a grant under this section only if the rural business investment company submits to the Secretary, in such form and manner as the Secretary may require, a plan for use of the grant.

    ‘(e) GRANT AMOUNT-

      ‘(1) RURAL BUSINESS INVESTMENT COMPANIES- The amount of a grant made under this section to a rural business investment company shall be equal to the lesser of--

        ‘(A) 10 percent of the private capital raised by the rural business investment company; or

        ‘(B) $1,000,000.

      ‘(2) OTHER ENTITIES- The amount of a grant made under this section to any entity other than a rural business investment company shall be equal to the resources (in cash or in kind) raised by the entity in accordance with the requirements applicable to rural business investment companies under this subtitle.

‘SEC. 384I. RURAL BUSINESS INVESTMENT COMPANIES.

    ‘(a) ORGANIZATION- For the purpose of this subtitle, a rural business investment company shall--

      ‘(1) be an incorporated body, a limited liability company, or a limited partnership organized and chartered or otherwise existing under State law solely for the purpose of performing the functions and conducting the activities authorized by this subtitle;

      ‘(2)(A) if incorporated, have succession for a period of not less than 30 years unless earlier dissolved by the shareholders of the rural business investment company; and

      ‘(B) if a limited partnership or a limited liability company, have succession for a period of not less than 10 years; and

      ‘(3) possess the powers reasonably necessary to perform the functions and conduct the activities.

    ‘(b) ARTICLES- The articles of any rural business investment company--

      ‘(1) shall specify in general terms--

        ‘(A) the purposes for which the rural business investment company is formed;

        ‘(B) the name of the rural business investment company;

        ‘(C) the area or areas in which the operations of the rural business investment company are to be carried out;

        ‘(D) the place where the principal office of the rural business investment company is to be located; and

        ‘(E) the amount and classes of the shares of capital stock of the rural business investment company;

      ‘(2) may contain any other provisions consistent with this subtitle that the rural business investment company may determine appropriate to adopt for the regulation of the business of the rural business investment company and the conduct of the affairs of the rural business investment company; and

      ‘(3) shall be subject to the approval of the Secretary.

    ‘(c) CAPITAL REQUIREMENTS-

      ‘(1) IN GENERAL- Except as provided in paragraph (2), the private capital of each rural business investment company shall be not less than--

        ‘(A) $5,000,000; or

        ‘(B) $10,000,000, with respect to each rural business investment company authorized or seeking authority to issue participating securities to be purchased or guaranteed by the Secretary under this subtitle.

      ‘(2) EXCEPTION- The Secretary may, in the discretion of the Secretary and based on a showing of special circumstances and good cause, permit the private capital of a rural business investment company described in paragraph (1)(B) to be less than $10,000,000, but not less than $5,000,000, if the Secretary determines that the action would not create or otherwise contribute to an unreasonable risk of default or loss to the Federal Government.

      ‘(3) ADEQUACY- In addition to the requirements of paragraph (1), the Secretary shall--

        ‘(A) determine whether the private capital of each rural business investment company is adequate to ensure a reasonable prospect that the rural business investment company will be operated soundly and profitably, and managed actively and prudently in accordance with the articles of the rural business investment company;

        ‘(B) determine that the rural business investment company will be able to comply with the requirements of this subtitle;

        ‘(C) require that at least 75 percent of the capital of each rural business investment company is invested in rural business concerns and not more than 10 percent of the investments shall be made in an area containing a city of over 150,000 in the last decennial census and the Census Bureau defined urbanized area containing or adjacent to that city;

        ‘(D) ensure that the rural business investment company is designed primarily to meet equity capital needs of the businesses in which the rural business investment company invests and not to compete with traditional small business financing by commercial lenders; and

        ‘(E) require that the rural business investment company makes short-term non-equity investments of less than 5 years only to the extent necessary to preserve an existing investment.

    ‘(d) DIVERSIFICATION OF OWNERSHIP- The Secretary shall ensure that the management of each rural business investment company licensed after the date of enactment of this subtitle is sufficiently diversified from and unaffiliated with the ownership of the rural business investment company so as to ensure independence and objectivity in the financial management and oversight of the investments and operations of the rural business investment company.

‘SEC. 384J. FINANCIAL INSTITUTION INVESTMENTS.

    ‘(a) IN GENERAL- Except as otherwise provided in this section and notwithstanding any other provision of law, the following banks, associations, and institutions are eligible both to establish and invest in any rural business investment company or in any entity established to invest solely in rural business investment companies:

      ‘(1) Any bank or savings association the deposits of which are insured under the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.).

      ‘(2) Any Farm Credit System institution described in section 1.2(a) of the Farm Credit Act of 1971 (12 U.S.C. 2002(a)).

    ‘(b) LIMITATION- No bank, association, or institution described in subsection (a) may make investments described in subsection (a) that are greater than 5 percent of the capital and surplus of the bank, association, or institution.

    ‘(c) LIMITATION ON RURAL BUSINESS INVESTMENT COMPANIES CONTROLLED BY FARM CREDIT SYSTEM INSTITUTIONS- If a Farm Credit System institution described in section 1.2(a) of the Farm Credit Act of 1971 (12 U.S.C. 2002(a)) holds more than 15 percent of the shares of a rural business investment company, either alone or in conjunction with other System institutions (or affiliates), the rural business investment company shall not provide equity investments in, or provide other financial assistance to, entities that are not otherwise eligible to receive financing from the Farm Credit System under that Act (12 U.S.C. 2001 et seq.).

‘SEC. 384K. REPORTING REQUIREMENTS.

    ‘(a) RURAL BUSINESS INVESTMENT COMPANIES- Each rural business investment company that participates in the program established under this subtitle shall provide to the Secretary such information as the Secretary may require, including--

      ‘(1) information relating to the measurement criteria that the rural business investment company proposed in the program application of the rural business investment company; and

      ‘(2) in each case in which the rural business investment company under this subtitle makes an investment in, or a loan or grant to, a business that is not located in a rural area, a report on the number and percentage of employees of the business who reside in those areas.

    ‘(b) PUBLIC REPORTS-

      ‘(1) IN GENERAL- The Secretary shall prepare and make available to the public an annual report on the program established under this subtitle, including detailed information on--

        ‘(A) the number of rural business investment companies licensed by the Secretary during the previous fiscal year;

        ‘(B) the aggregate amount of leverage that rural business investment companies have received from the Federal Government during the previous fiscal year;

        ‘(C) the aggregate number of each type of leveraged instruments used by rural business investment companies during the previous fiscal year and how each number compares to previous fiscal years;

        ‘(D) the number of rural business investment company licenses surrendered and the number of rural business investment companies placed in liquidation during the previous fiscal year, identifying the amount of leverage each rural business investment company has received from the Federal Government and the type of leverage instruments each rural business investment company has used;

        ‘(E) the amount of losses sustained by the Federal Government as a result of operations under this subtitle during the previous fiscal year and an estimate of the total losses that the Federal Government can reasonably expect to incur as a result of the operations during the current fiscal year;

        ‘(F) actions taken by the Secretary to maximize recoupment of funds of the Federal Government expended to implement and administer the Rural Business Investment Program under this subtitle during the previous fiscal year and to ensure compliance with the requirements of this subtitle (including regulations);

        ‘(G) the amount of Federal Government leverage that each licensee received in the previous fiscal year and the types of leverage instruments each licensee used;

        ‘(H) for each type of financing instrument, the sizes, types of geographic locations, and other characteristics of the small business investment companies using the instrument during the previous fiscal year, including the extent to which the investment companies have used the leverage from each instrument to make loans or equity investments in rural areas; and

        ‘(I) the actions of the Secretary to carry out this subtitle.

      ‘(2) PROHIBITION- In compiling the report required under paragraph (1), the Secretary may not--

        ‘(A) compile the report in a manner that permits identification of any particular type of investment by an individual rural business investment company or small business concern in which a rural business investment company invests; and

        ‘(B) may not release any information that is prohibited under section 1905 of title 18, United States Code.

‘SEC. 384L. EXAMINATIONS.

    ‘(a) IN GENERAL- Each rural business investment company that participates in the program established under this subtitle shall be subject to examinations made at the direction of the Secretary in accordance with this section.

    ‘(b) ASSISTANCE OF PRIVATE SECTOR ENTITIES- An examination under this section may be conducted with the assistance of a private sector entity that has the qualifications and the expertise necessary to conduct such an examination.

    ‘(c) COSTS-

      ‘(1) IN GENERAL- The Secretary may assess the cost of an examination under this section, including compensation of the examiners, against the rural business investment company examined.

      ‘(2) PAYMENT- Any rural business investment company against which the Secretary assesses costs under this paragraph shall pay the costs.

    ‘(d) DEPOSIT OF FUNDS- Funds collected under this section shall--

      ‘(1) be deposited in the account that incurred the costs for carrying out this section;

      ‘(2) be made available to the Secretary to carry out this section, without further appropriation; and

      ‘(3) remain available until expended.

‘SEC. 384M. INJUNCTIONS AND OTHER ORDERS.

    ‘(a) IN GENERAL-

      ‘(1) APPLICATION BY SECRETARY- Whenever, in the judgment of the Secretary, a rural business investment company or any other person has engaged or is about to engage in any act or practice that constitutes or will constitute a violation of a provision of this subtitle (including any rule, regulation, order, or participation agreement under this subtitle), the Secretary may apply to the appropriate district court of the United States for an order enjoining the act or practice, or for an order enforcing compliance with the provision, rule, regulation, order, or participation agreement.

      ‘(2) JURISDICTION; RELIEF- The court shall have jurisdiction over the action and, on a showing by the Secretary that the rural business investment company or other person has engaged or is about to engage in an act or practice described in paragraph (1), a permanent or temporary injunction, restraining order, or other order, shall be granted without bond.

    ‘(b) JURISDICTION-

      ‘(1) IN GENERAL- In any proceeding under subsection (a), the court as a court of equity may, to such extent as the court considers necessary, take exclusive jurisdiction over the rural business investment company and the assets of the rural business investment company, wherever located.

      ‘(2) TRUSTEE OR RECEIVER- The court shall have jurisdiction in any proceeding described in paragraph (1) to appoint a trustee or receiver to hold or administer the assets.

    ‘(c) SECRETARY AS TRUSTEE OR RECEIVER-

      ‘(1) AUTHORITY- The Secretary may act as trustee or receiver of a rural business investment company.

      ‘(2) APPOINTMENT- On the request of the Secretary, the court shall appoint the Secretary to act as a trustee or receiver of a rural business investment company unless the court considers the appointment inequitable or otherwise inappropriate by reason of any special circumstances involved.

‘SEC. 384N. ADDITIONAL PENALTIES FOR NONCOMPLIANCE.

    ‘(a) IN GENERAL- With respect to any rural business investment company that violates or fails to comply with this subtitle (including any rule, regulation, order, or participation agreement under this subtitle), the Secretary may, in accordance with this section--

      ‘(1) void the participation agreement between the Secretary and the rural business investment company; and

      ‘(2) cause the rural business investment company to forfeit all of the rights and privileges derived by the rural business investment company under this subtitle.

    ‘(b) ADJUDICATION OF NONCOMPLIANCE-

      ‘(1) IN GENERAL- Before the Secretary may cause a rural business investment company to forfeit rights or privileges under subsection (a), a court of the United States of competent jurisdiction must find that the rural business investment company committed a violation, or failed to comply, in a cause of action brought for that purpose in the district, territory, or other place subject to the jurisdiction of the United States, in which the principal office of the rural business investment company is located.

      ‘(2) PARTIES AUTHORIZED TO FILE CAUSES OF ACTION- Each cause of action brought by the United States under this subsection shall be brought by the Secretary or by the Attorney General.

‘SEC. 384O. UNLAWFUL ACTS AND OMISSIONS; BREACH OF FIDUCIARY DUTY.

    ‘(a) PARTIES DEEMED TO COMMIT A VIOLATION- Whenever any rural business investment company violates this subtitle (including any rule, regulation, order, or participation agreement under this subtitle), by reason of the failure of the rural business investment company to comply with this subtitle or by reason of its engaging in any act or practice that constitutes or will constitute a violation of this subtitle, the violation shall also be deemed to be a violation and an unlawful act committed by any person that, directly or indirectly, authorizes, orders, participates in, causes, brings about, counsels, aids, or abets in the commission of any acts, practices, or transactions that constitute or will constitute, in whole or in part, the violation.

    ‘(b) FIDUCIARY DUTIES- It shall be unlawful for any officer, director, employee, agent, or other participant in the management or conduct of the affairs of a rural business investment company to engage in any act or practice, or to omit any act or practice, in breach of the fiduciary duty of the officer, director, employee, agent, or participant if, as a result of the act or practice, the rural business investment company suffers or is in imminent danger of suffering financial loss or other damage.

    ‘(c) UNLAWFUL ACTS- Except with the written consent of the Secretary, it shall be unlawful--

      ‘(1) for any person to take office as an officer, director, or employee of any rural business investment company, or to become an agent or participant in the conduct of the affairs or management of a rural business investment company, if the person--

        ‘(A) has been convicted of a felony, or any other criminal offense involving dishonesty or breach of trust; or

        ‘(B) has been found liable in a civil action for damages, or has been permanently or temporarily enjoined by an order, judgment, or decree of a court of competent jurisdiction, by reason of any act or practice involving fraud or breach of trust; and

      ‘(2) for any person to continue to serve in any of the capacities described in paragraph (1), if--

        ‘(A) the person is convicted of a felony or any other criminal offense involving dishonesty or breach of trust; or

        ‘(B) the person is found liable in a civil action for damages, or is permanently or temporarily enjoined by an order, judgment, or decree of a court of competent jurisdiction, by reason of any act or practice involving fraud or breach of trust.

‘SEC. 384P. REMOVAL OR SUSPENSION OF DIRECTORS OR OFFICERS.

    ‘Using the procedures established by the Secretary for removing or suspending a director or an officer of a rural business investment company, the Secretary may remove or suspend any director or officer of any rural business investment company.

‘SEC. 384Q. CONTRACTING OF FUNCTIONS.

    ‘(a) IN GENERAL- Notwithstanding any other provision of law, to carry out the day-to-day management and operation of the program authorized by this subtitle on behalf of the Secretary, the Secretary shall enter into an interagency agreement under section 1535 of title 31, United States Code, with another Federal agency that has considerable expertise in operating a program under which capital is provided for equity investments in private sector companies.

    ‘(b) FUNDING- The costs incurred by a Federal agency entering into an agreement under subsection (a) shall be reimbursed in accordance with section 1535 of title 31, United States Code, from amounts made available under section 384S(a)(2).

‘SEC. 384R. REGULATIONS.

    ‘The Secretary may promulgate such regulations as the Secretary considers necessary to carry out this subtitle.

‘SEC. 384S. FUNDING.

    ‘(a) IN GENERAL- Notwithstanding any other provision of law, of the funds of the Commodity Credit Corporation, the Secretary shall make available--

      ‘(1) such sums as may be necessary for the cost of guaranteeing $280,000,000 of debentures under this subtitle; and

      ‘(2) $44,000,000 to make grants under this subtitle.

    ‘(b) AVAILABILITY OF FUNDS- Funds transferred under subsection (a) shall remain available until expended.’.

SEC. 6030. RURAL STRATEGIC INVESTMENT PROGRAM.

    The Consolidated Farm and Rural Development Act (as amended by section 6029) is amended by adding at the end the following:

‘Subtitle I--Rural Strategic Investment Program

‘SEC. 385A. PURPOSE.

    ‘The purpose of this subtitle is to establish a rural strategic investment program--

      ‘(1) to provide rural communities with flexible resources to develop comprehensive, collaborative, and locally-based strategic planning processes; and

      ‘(2) to implement innovative community and economic development strategies that optimize regional competitive advantages.

‘SEC. 385B. DEFINITIONS.

    ‘In this subtitle:

      ‘(1) BENCHMARK- The term ‘benchmark’ means an annual set of strategies and goals of a Regional Board established for the purpose of measuring performance in meeting the regional plan of the Regional Board.

      ‘(2) CONFERENCE- The term ‘Conference’ means the National Conference on Rural America conducted under section 385H.

      ‘(3) ELIGIBLE AREA-

        ‘(A) IN GENERAL- The term ‘eligible area’ means a nonmetropolitan county (as defined by the Secretary) that has a population of 50,000 inhabitants or less.

        ‘(B) INCLUSION-

          ‘(i) IN GENERAL- Subject to clause (ii), the term ‘eligible area’ includes an unincorporated or other area of a county that has a population of more than 50,000 inhabitants if the unincorporated area or other area is adjacent to an eligible rural area described in subparagraph (A).

          ‘(ii) PARTICIPATION- An area described in clause (i) may be represented on a Regional Board.

        ‘(C) EXCLUSION- The term ‘eligible area’ does not include any area designated by the Secretary as a rural empowerment zone or rural enterprise community.

      ‘(4) INNOVATION GRANT- The term ‘innovation grant’ means an innovation grant made by the National Board to a Regional Board under section 385G.

      ‘(5) NATIONAL BOARD- The term ‘National Board’ means the National Board on Rural America established under section 385D(a).

      ‘(6) NATIONAL PLAN- The term ‘national plan’ means a national strategic investment plan of the National Board developed under section 385D(d)(3).

      ‘(7) PLANNING GRANT- The term ‘planning grant’ means a regional strategic investment planning grant made by the National Board to a Regional Board under section 385F.

      ‘(8) PROGRAM- The term ‘program’ means the rural strategic investment program established under this subtitle.

      ‘(9) REGION- The term ‘region’ means the eligible areas that--

        ‘(A) are under the jurisdiction of a Regional Board; and

        ‘(B) meet criteria established by the National Board not later than 1 year after the date of enactment of this subtitle.

      ‘(10) REGIONAL BOARD- The term ‘Regional Board’ means a Regional Investment Board certified under section 385C(a).

      ‘(11) REGIONAL PLAN- The term ‘regional plan’ means a regional strategic investment plan of a Regional Board developed under section 385C(b)(3)(B).

‘SEC. 385C. REGIONAL INVESTMENT BOARDS.

    ‘(a) IN GENERAL- The National Board may certify a group representing the interests described in subsection (b)(2)(A) as a Regional Investment Board created to develop and implement a regional strategic investment plan for grants made under this subtitle to promote investment in eligible areas.

    ‘(b) REQUIREMENTS FOR CERTIFICATION-

      ‘(1) IN GENERAL- A Regional Board shall meet the requirements of this subsection for certification.

      ‘(2) COMPOSITION-

        ‘(A) IN GENERAL- A Regional Board shall be composed of residents of the region that broadly represent diverse public, nonprofit, and private sector interests in investment in the region, including (to the maximum extent practicable) representatives of--

          ‘(i) units of local government (including multijurisdictional units of local government);

          ‘(ii) in the case of regions with Indian populations, Indian tribes (as defined in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b));

          ‘(iii) private nonprofit community-based development organizations;

          ‘(iv) regional development organizations;

          ‘(v) private business organizations;

          ‘(vi) other entities and organizations, as determined by the Regional Board; and

          ‘(vii) consortia of entities and organizations described in clauses (i) through (vii).

        ‘(B) LOCAL PUBLIC-PRIVATE REPRESENTATION- Of the members of a Regional Board, to the maximum extent practicable--

          ‘(i) 1/2 of the members shall be representatives of units of local government and Indian tribes described in subparagraph (A); and

          ‘(ii) 1/2 of the members shall be representatives of nonprofit, regional, private, and other entities and organizations described in subparagraph (A).

        ‘(C) EX-OFFICIO MEMBERS-

          ‘(i) IN GENERAL- An officer or employee of a Federal or State agency may serve as an ex-officio, non-voting member of a Regional Board representing the agency.

          ‘(ii) CONFLICTS- Participation by a Federal officer or employee in activities of the Regional Board shall not constitute a violation of section 205 or 208 of title 18, United States Code.

        ‘(D) CERTIFICATION- To be certified by the National Board, a Regional Board shall demonstrate to the National Board that the Regional Board is broadly representative of the interests described in subparagraph (A).

        ‘(E) APPEALS-

          ‘(i) IN GENERAL- Prior to certification of the Regional Board by the National Board, representatives of interests described in subparagraph (A) that participated in the development of a Regional Board may appeal the composition of the Regional Board to the National Board on the ground that--

            ‘(I) the composition of the Regional Board does not adequately reflect the purposes of the program; or

            ‘(II) the selection process for the Regional Board unfairly disadvantaged those interests.

          ‘(ii) ACTION BY NATIONAL BOARD- The National Board shall act on any appeal of the composition of a Regional Board before taking action on the certification of the Regional Board.

      ‘(3) DUTIES AND PURPOSE- The organizational documents of the proposed Regional Board shall demonstrate that, on certification, the Regional Board shall--

        ‘(A) create a collaborative, inclusive public-private planning process;

        ‘(B) develop, and submit to the National Board for approval, a regional strategic investment plan that meets the requirements of section 385F, with benchmarks, to promote investment in eligible areas through the use of grants made available under this subtitle;

        ‘(C) implement the approved regional plan;

        ‘(D) provide annual reports to the Secretary and the National Board on progress made in achieving the benchmarks of the regional plan, including an annual financial statement; and

        ‘(E) select a non-Federal organization (such as a regional development organization) in the local area served by the Regional Board that has previous experience in the management of Federal funds to serve as fiscal manager of any funds of the Regional Board.

‘SEC. 385D. NATIONAL BOARD ON RURAL AMERICA.

    ‘(a) ESTABLISHMENT-

      ‘(1) IN GENERAL- The Secretary shall establish a National Board on Rural America to carry out the rural strategic investment program established under this subtitle.

      ‘(2) SUPERVISION AND DIRECTION- Except as otherwise provided in this subtitle, the National Board shall be subject to the general supervision and direction of the Secretary.

    ‘(b) COMPOSITION-

      ‘(1) IN GENERAL-

        ‘(A) APPOINTMENT- In addition to the Secretary or the designee of the Secretary, the National Board shall consist of 14 members appointed by the Secretary from among--

          ‘(i) representatives of nationally recognized entrepreneurship organizations;

          ‘(ii) representatives of regional planning and development organizations;

          ‘(iii) representatives of community-based organizations;

          ‘(iv) elected members of county governments;

          ‘(v) elected members of State legislatures;

          ‘(vi) representatives of the rural philanthropic community; and

          ‘(vii) representatives of Indian tribes (as defined in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b)).

        ‘(B) RECOMMENDATIONS- In appointing the members of the National Board under subparagraph (A), the Secretary shall consider recommendations made by--

          ‘(i) the chairman and ranking member of each of the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate;

          ‘(ii) the Majority Leader of the Senate; and

          ‘(iii) the Speaker of the House of Representatives.

      ‘(3) TERM OF OFFICE-

        ‘(A) IN GENERAL- Subject to subparagraph (B), the term of office of a member of the National Board appointed under paragraph (1)(A) shall be 4 years.

        ‘(B) STAGGERED INITIAL TERMS- Of the initial members of the National Board appointed under paragraph (1)(A), the term of office of--

          ‘(i) 5 members shall be 4 years;

          ‘(ii) 5 members shall be 3 years; and

          ‘(iii) 4 members shall be 2 years.

      ‘(4) INITIAL APPOINTMENTS- Not later than 90 days after the date of enactment of this subtitle, the Secretary shall appoint the initial members of the National Board under paragraph (1)(A).

      ‘(5) EX-OFFICIO MEMBERS-

        ‘(A) SPECIAL ASSISTANT TO THE PRESIDENT FOR RURAL POLICY- If appointed by the President under section 6406(1) of the Farm Security and Rural Investment Act of 2002, the Special Assistant to the President for Rural Policy shall serve as an ex-officio, non-voting member of the National Board.

        ‘(B) OTHER MEMBERS- In consultation with the chairman and ranking member of each of the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate, the Secretary may appoint not more than 3 other officers or employees of the Executive Branch to serve as ex-officio, non-voting members of the National Board.

      ‘(6) VACANCIES- A vacancy on the National Board shall be filled in the same manner as the original appointment.

      ‘(7) COMPENSATION- A member of the National Board shall receive no compensation for service on the National Board, but shall be reimbursed for travel and other expenses incurred in carrying out the duties of the member of the National Board in accordance with section 5702 and 5703 of title 5, United States Code.

      ‘(8) CHAIRPERSON- The National Board shall select a chairperson from among the members of the National Board.

      ‘(9) MEETINGS-

        ‘(A) TIME AND PLACE- The National Board shall meet at the call of the chairperson.

        ‘(B) QUORUM- A quorum of the National Board shall consist of a majority of the members.

        ‘(C) MAJORITY VOTE- A decision of the National Board shall be made by majority vote.

      ‘(10) FEDERAL STATUS- For purposes of Federal law, a member of the National Board shall be considered a special Government employee (as defined in section 202(a) of title 18, United States Code).

      ‘(11) CONFLICT OF INTEREST-

        ‘(A) IN GENERAL- Except as provided in subparagraph (C), no member of the National Board shall vote on any matter respecting any application for a grant or other particular matter pending before the National Board in which, to the knowledge of the member, the member, spouse, or child of the member, partner, or organization in which the member is serving as officer, director, trustee, partner, or employee, or any person or organization with whom the member is negotiating or has any arrangement concerning prospective employment, has a financial interest.

        ‘(B) VIOLATIONS- A violation of subparagraph (A) by a member of the National Board shall be cause for removal of the member, but shall not impair or otherwise affect the validity of any otherwise lawful action by the National Board in which the member participated.

        ‘(C) EXCEPTION- Subparagraph (A) shall not apply to the extent a member of the National Board advises the National Board of the nature of the particular matter in which the member proposes to participate, if--

          ‘(i) the member makes a full disclosure of the financial interest; and

          ‘(ii) prior to any participation by the member, the National Board determines, by majority vote of the other members of the National Board, that the financial interest is too remote or too inconsequential to affect the integrity of the services of the member to the National Board in that matter.

    ‘(c) ADMINISTRATIVE SUPPORT- The Secretary, on a reimbursable basis, may provide such administrative support to the National Board as the Secretary determines is necessary to carry out the duties of the National Board.

    ‘(d) DUTIES- The National Board shall--

      ‘(1) certify Regional Boards in accordance with section 385C, with the initial certification of Regional Boards occurring not later than 540 days after the date of enactment of this subtitle;

      ‘(2) approve, negotiate, or disapprove each regional plan that is submitted by a Regional Board to the National Board under section 385C;

      ‘(3) develop, and submit to the Secretary for approval, a national strategic investment plan;

      ‘(4) use the amount received from the Secretary under section 385E to make planning grants and innovation grants to Regional Boards and to otherwise carry out the program;

      ‘(5) provide leadership and advice to Regional Boards on issues, best practices, and emerging trends relating to rural development;

      ‘(6) evaluate the progress of each Regional Board in achieving the benchmarks of the regional plan using annual reports submitted under section 385C(b)(3)(D) and any other information that is available to the Regional Board; and

      ‘(7) submit an annual report on the performance of Regional Boards and the program to--

        ‘(A) the Committee on Agriculture of the House of Representatives;

        ‘(B) the Committee on Agriculture, Nutrition, and Forestry of the Senate; and

        ‘(C) the Secretary.

‘SEC. 385E. RURAL STRATEGIC INVESTMENT PROGRAM.

    ‘(a) IN GENERAL- If the Secretary approves a national strategic investment plan submitted by the National Board, of the funds of the Commodity Credit Corporation, the Secretary shall transfer to the National Board $100,000,000, to remain available until expended, for the Board to use to make planning grants and innovation grants to Regional Boards and to otherwise carry out this subtitle.

    ‘(b) USE BY NATIONAL BOARD- Of the amount transferred by the Secretary to the National Board under subsection (a), the National Board shall use--

      ‘(1) not less than $8,000,000 to make planning grants to Regional Boards under section 385F;

      ‘(2) not less than $87,000,000 to make innovation grants to Regional Boards under section 385G; and

      ‘(3) the remainder of the funds to carry out section 385H and administer this subtitle (other than section 385H).

‘SEC. 385F. REGIONAL STRATEGIC INVESTMENT PLANNING GRANTS.

    ‘(a) IN GENERAL- The National Board shall use amounts made available under section 385E(b)(1) to make not fewer than 80 planning grants, on a competitive basis, to applicant Regional Boards to develop, maintain, evaluate, and report progress on regional strategic investment plans in accordance with section 385C and this section.

    ‘(b) REGIONAL PLANS- A regional plan for a region covered by a Regional Board shall, to the maximum extent practicable, cover--

      ‘(1) basic infrastructure needs of the region;

      ‘(2) basic services within the region;

      ‘(3) opportunities for economic diversification and innovation within the region, with particular attention to entrepreneurial support and innovation;

      ‘(4) the current and future human resource capacity of the region;

      ‘(5) access to market-based financing and venture and equity capital in the region;

      ‘(6) the development of innovative public and private collaborations for investments in the region; and

      ‘(7) other appropriate matters, as determined by the National Board and the Secretary.

    ‘(c) PREFERENCES- In awarding planning grants, the National Board shall give a preference to planning grants that will be used to address community capacity building and community sustainability.

    ‘(d) AMOUNT- The total amount of a planning grant made to a Regional Board shall not exceed $100,000.

    ‘(e) COST SHARING-

      ‘(1) IN GENERAL- Subject to paragraphs (2) and (3), the share of the costs of developing, maintaining, evaluating, and reporting on a regional plan funded by a grant under this section shall not exceed 50 percent.

      ‘(2) FORM-

        ‘(A) IN GENERAL. Except as provided in subparagraph (B), a Regional Board shall pay the grantee share of the costs described in paragraph (1) in the form of cash, services, materials, or other in-kind contributions.

        ‘(B) LIMITATION- A grantee shall not pay more than 50 percent of the grantee share in the form of services, materials, or other in-kind contributions.

      ‘(3) INCREASED SHARE- The National Board may increase the share of the costs covered by a planning grant made to a Regional Board under this section if a limited ability of the Regional Board to pay would otherwise create a barrier to full participation in the program.

‘SEC. 385G. INNOVATION GRANTS.

    ‘(a) IN GENERAL- The National Board shall use amounts made available under section 385E(b)(2) to make innovation grants, on a competitive basis, to Regional Boards to implement projects that are identified in the regional plans of the Regional Boards.

    ‘(b) ELIGIBILITY-

      ‘(1) IN GENERAL- For a Regional Board to be eligible to receive an innovation grant, the National Board shall determine that--

        ‘(A) the regional plan of a Regional Board meets the requirements of this subtitle;

        ‘(B) the management and organizational structure of the Regional Board is sufficient to oversee grant projects;

        ‘(C) the Regional Board will be able to provide the grantee share required under this section; and

        ‘(D) the Regional Board agrees to achieve, to the maximum extent practicable, the performance-based benchmarks of the regional plan.

      ‘(2) RELATIONSHIP TO PLANNING GRANTS- A Regional Board that meets the requirements of paragraph (1) shall be eligible to receive an innovation grant, regardless of whether the Regional Board receives a planning grant.

    ‘(c) SELECTION- Subject to subsection (d), of the applications submitted by Regional Boards for innovation grants, the National Board shall, to the maximum extent practicable, select not fewer than 30 regional boards to receive innovation grants.

    ‘(d) PREFERENCES- In awarding innovation grants, the National Board shall give a preference (in order of priority) to Regional Boards that--

      ‘(1) exhibit collaborative innovation and entrepreneurship, particularly within a public-private partnership;

      ‘(2) represent a broad coalition of interests described in section 385C(b)(2)(A);

      ‘(3) demonstrate a plan to leverage public (Federal and non-federal) and private funds and existing assets, including natural assets and public infrastructure;

      ‘(4) address gaps in existing basic services within a region;

      ‘(5) address economic diversification, including agricultural and non-agriculturally based economies, within a regional framework;

      ‘(6) demonstrate a plan to achieve multijurisdictional regional planning and development, with particular evidence of economic development successes within diverse stakeholder frameworks; or

      ‘(7) meet other community development needs identified by a Regional Board.

    ‘(e) USES-

      ‘(1) LEVERAGE- A Regional Board shall prioritize projects, in part, on the degree to which the Regional Board is able to leverage additional funds for the implementation of the projects.

      ‘(2) PURPOSES- A Regional Board may use an innovation grant provided for a region--

        ‘(A) to support the development of critical infrastructure necessary to facilitate economic development in the region;

        ‘(B) to provide assistance to entities within the region that provide basic public services;

        ‘(C) to assist with job training, workforce development, or other needs related to the development and maintenance of strong local and regional economies;

        ‘(D) to assist in the development of unique new collaborations that link public, private, and philanthropic resources to achieve collaboratively designed regional advancement; and

        ‘(E) to provide support to business investment.

      ‘(3) OTHER DEPARTMENT PROGRAMS- A Regional Board may not use an innovation grant provided for a region for any purpose for which funding may be obtained under any other rural development program of the Department of Agriculture unless--

        ‘(A) the Regional Board--

          ‘(i) has submitted an application for the funding under the other program; and

          ‘(ii) withdraws the application; and

        ‘(B) the National Board approves use of the innovation grant for that purpose.

      ‘(4) OPERATING EXPENSES- A Regional Board may use for administrative costs in carrying out programs and activities related to the grant the greater of--

        ‘(A) $100,000; or

        ‘(B) 5 percent of the amount of an innovation grant provided.

    ‘(f) AMOUNT-

      ‘(1) IN GENERAL- The amount of an innovation grant made to a Regional Board shall not exceed $3,000,000.

      ‘(2) AVAILABILITY- The amount of an innovation grant made to a Regional Board shall remain available until expended.

    ‘(g) COST SHARING-

      ‘(1) IN GENERAL- Subject to paragraphs (2) and (3), the share of the costs of projects covered by an innovation grant made to a Regional Board under this section shall not exceed 75 percent, as determined by the National Board.

      ‘(2) FORM- A Regional Board may pay the grantee share of the costs of projects covered by an innovation grant in the form of cash or services, materials, or other in-kind contributions.

      ‘(3) WAIVER OF GRANTEE SHARE- The National Board may waive the grantee share of the costs of projects covered by an innovation grant made to a Regional Board under this section if the National Board determines that such a waiver is appropriate.

      ‘(4) OTHER FEDERAL PROGRAMS- For the purpose of determining grantee share requirements for any other Federal programs, funds provided for innovation grants shall be considered to be non-Federal funds.

    ‘(h) NEGOTIATION- The National Board may--

      ‘(1) negotiate with a Regional Board on the substance, size, and scope of a regional plan; and

      ‘(2) approve an innovation grant for an amount that is lower than the amount requested by the Regional Board.

    ‘(i) NONCOMPLIANCE- If a Regional Board fails to comply with the requirements of this section, the National Board may take such actions as are necessary to obtain reimbursement of unused grant funds.

    ‘(j) OTHER USES- The National Board may use not more than 5 percent of the amounts made available for innovation grants--

      ‘(1) to provide assistance to interests described in section 385C(b)(2)(A) to obtain certification of a Regional Board;

      ‘(2) to provide assistance for emergent innovative opportunities that are not covered by existing regional plans;

      ‘(3) to provide technical assistance, research, organizational support, and other capacity building infrastructure to support existing Regional Boards;

      ‘(4) to provide assistance for other entrepreneurial opportunities to advance the goals of the program; or

      ‘(5) to advance a more integrative rural policy framework for the United States.

    ‘(k) TRANSFERS- To ensure maximum use of funds provided under this subtitle, the National Board may transfer not more than 10 percent of the amount of funds made available between planning grants and innovation grants.

‘SEC. 385H. NATIONAL CONFERENCE ON RURAL AMERICA.

    ‘(a) IN GENERAL- The President shall call and conduct a National Conference on Rural America, which shall be held not earlier than November 1, 2002, and not later than October 30, 2004.

    ‘(b) PURPOSE- The purpose of the Conference shall be to bring together the resources of governmental agencies and the private and nonprofit sectors to develop--

      ‘(1) policy recommendations and integrative strategies for addressing the unique challenges facing rural areas of the United States; and

      ‘(2) an implementation plan, with outcome-based measurements, for addressing the challenges.

    ‘(c) COMPOSITION-

      ‘(1) IN GENERAL- The Conference shall be comprised of--

        ‘(A) representatives of organizations devoted to rural development;

        ‘(B) Members of Congress, including the chairman and ranking member of each of the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate;

        ‘(C) representatives of the Department of Agriculture and other Federal agencies;

        ‘(D) State, local, and tribal elected officials and representatives;

        ‘(E) representatives of colleges and universities, State and tribal extension services, and State rural development councils; and

        ‘(F) individuals with specialized knowledge of and expertise in rural and community development, cooperative business, agricultural credit, venture capital, health care, and rural demography.

      ‘(2) SELECTION- Of the participants in the Conference described in paragraph (1)--

        ‘(A) 1/3 of the members shall be selected by the President;

        ‘(B) 1/3 of the members shall be selected by the Chairman and the ranking member of the Committee on Agriculture of the House of Representatives; and

        ‘(C) 1/3 of the members shall be selected by the Chairman and the ranking member of the Committee on Agriculture, Nutrition, and Forestry of the Senate.

      ‘(3) REPRESENTATION- In selecting the participants of the Conference, the President and the Chairman of each Committee referred to in paragraph (2) shall ensure, to the maximum extent practicable, that the participants are representative of the ethnic, racial, and linguistic diversity of rural areas of the United States.

    ‘(d) REPORT-

      ‘(1) REPORT TO PRESIDENT- Not later than 120 days after the termination of the Conference, the Conference shall submit to the President a report that contains the findings and recommendations of the Conference, including findings and recommendations to address needs related to--

        ‘(A) telecommunications;

        ‘(B) rural health issues;

        ‘(C) transportation;

        ‘(D) opportunities for economic diversification and innovation within rural America, with particular attention to entrepreneurial support and innovation;

        ‘(E) the current and future human resource capacity of rural America;

        ‘(F) access to market-based financing and venture and equity capital in rural America; and

        ‘(G) the development of innovative public and private collaborations for investments in rural America.

      ‘(2) REPORT MADE PUBLIC AND TO CONGRESS- Not later than 90 days after receipt by the President, the President shall--

        ‘(A) make the report public; and

        ‘(B) transmit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a copy of the report and a statement of the President containing recommendations for implementing the report.

      ‘(3) PUBLICATION AND DISTRIBUTION-

        ‘(A) IN GENERAL- The Conference shall publish and distribute the report described in paragraph (1).

        ‘(B) MANDATORY DISTRIBUTION- The Conference shall provide a copy of a report published under subparagraph (A), at no cost, to--

          ‘(i) each Federal depository library; and

          ‘(ii) on request, each State, tribal, and local elected official in a rural area of the United States.

    ‘(e) FUNDING- Not later than 180 days after the establishment of the National Board, the National Board shall transfer not more than $2,000,000 to the Office of the President to carry out this section, to remain available until expended.’.

SEC. 6031. FUNDING OF PENDING RURAL DEVELOPMENT LOAN AND GRANT APPLICATIONS.

    (a) DEFINITION OF APPLICATION- In this section, the term ‘application’ does not include an application for a loan or grant that, as of the date of enactment of this Act, is in the preapplication phase of consideration under regulations of the Secretary of Agriculture in effect on the date of enactment of this Act.

    (b) USE OF FUNDS- Subject to subsection (c), the Secretary of Agriculture shall use funds made available under subsection (d) to provide funds for applications that are pending on the date of enactment of this Act for--

      (1) water or waste disposal grants or direct loans under paragraph (1) or (2) of section 306(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)); and

      (2) emergency community water assistance grants under section 306A of that Act (7 U.S.C. 1926a).

    (c) LIMITATIONS-

      (1) APPROPRIATED AMOUNTS- Funds made available under this section shall be available to the Secretary to provide funds for applications for loans and grants described in subsection (b) that are pending on the date of enactment of this Act only to the extent that funds for the loans and grants appropriated in the annual appropriations Act for fiscal year 2002 have been exhausted.

      (2) PROGRAM REQUIREMENTS- The Secretary may use funds made available under this section to provide funds for a pending application for a loan or grant described in subsection (b) only if the Secretary processes, reviews, and approves the application in accordance with regulations in effect on the date of enactment of this Act.

      (3) PRIORITY- In providing funding under this section for pending applications for loans or grants described in subsection (b), the Secretary shall provide funding in the following order of priority (until funds made available under this section are exhausted):

        (A) Pending applications for water systems.

        (B) Pending applications for waste disposal systems.

    (d) FUNDING- Notwithstanding any other provision of law, of the funds of the Commodity Credit Corporation, the Secretary shall use $360,000,000 to carry out this section, to remain available until expended.

Subtitle B--Rural Electrification Act of 1936

SEC. 6101. GUARANTEES FOR BONDS AND NOTES ISSUED FOR ELECTRIFICATION OR TELEPHONE PURPOSES.

    (a) IN GENERAL- The Rural Electrification Act of 1936 is amended by inserting after section 313 (7 U.S.C. 940c) the following:

‘SEC. 313A. GUARANTEES FOR BONDS AND NOTES ISSUED FOR ELECTRIFICATION OR TELEPHONE PURPOSES.

    ‘(a) IN GENERAL- Subject to subsection (b), the Secretary shall guarantee payments on bonds or notes issued by cooperative or other lenders organized on a not-for-profit basis if the proceeds of the bonds or notes are used to make loans for any electrification or telephone purpose eligible for assistance under this Act, including section 4 or 201 or to refinance bonds or notes issued for such purposes.

    ‘(b) LIMITATIONS-

      ‘(1) OUTSTANDING LOANS- A lender shall not receive a guarantee under this section for a bond or note if, at the time of the guarantee, the total principal amount of such guaranteed bonds or notes outstanding of the lender would exceed the principal amount of outstanding loans of the lender for electrification or telephone purposes that have been made concurrently with loans approved for such purposes under this Act.

      ‘(2) GENERATION OF ELECTRICITY- The Secretary shall not guarantee payment on a bond or note issued by a lender, the proceeds of which are used for the generation of electricity.

      ‘(3) QUALIFICATIONS- The Secretary may deny the request of a lender for the guarantee of a bond or note under this section if the Secretary determines that--

        ‘(A) the lender does not have appropriate expertise or experience or is otherwise not qualified to make loans for electrification or telephone purposes;

        ‘(B) the bond or note issued by the lender would not be investment grade quality without a guarantee; or

        ‘(C) the lender has not provided to the Secretary a list of loan amounts approved by the lender that the lender certifies are for eligible purposes described in subsection (a).

      ‘(4) INTEREST RATE REDUCTION-

        ‘(A) IN GENERAL- Except as provided in subparagraph (B), a lender may not use any amount obtained from the reduction in funding costs as a result of the guarantee of a bond or note under this section to reduce the interest rate on a new or outstanding loan.

        ‘(B) CONCURRENT LOANS- A lender may use any amount described in subparagraph (A) to reduce the interest rate on a loan if the loan is--

          ‘(i) made by the lender for electrification or telephone projects that are eligible for assistance under this Act; and

          ‘(ii) made concurrently with a loan approved by the Secretary under this Act for such a project, as provided in section 307.

    ‘(c) FEES-

      ‘(1) IN GENERAL- A lender that receives a guarantee issued under this section on a bond or note shall pay a fee to the Secretary.

      ‘(2) AMOUNT- The amount of an annual fee paid for the guarantee of a bond or note under this section shall be equal to 30 basis points of the amount of the unpaid principal of the bond or note guaranteed under this section.

      ‘(3) PAYMENT- A lender shall pay the fees required under this subsection on a semiannual basis.

      ‘(4) RURAL ECONOMIC DEVELOPMENT SUBACCOUNT- Subject to subsection (e)(2), fees collected under this subsection shall be--

        ‘(A) deposited into the rural economic development subaccount maintained under section 313(b)(2)(A), to remain available until expended; and

        ‘(B) used for the purposes described in section 313(b)(2)(B).

    ‘(d) GUARANTEES-

      ‘(1) IN GENERAL- A guarantee issued under this section shall--

        ‘(A) be for the full amount of a bond or note, including the amount of principal, interest, and call premiums;

        ‘(B) be fully assignable and transferable; and

        ‘(C) represent the full faith and credit of the United States.

      ‘(2) LIMITATION- To ensure that the Secretary has the resources necessary to properly examine the proposed guarantees, the Secretary may limit the number of guarantees issued under this section to 5 per year.

      ‘(3) DEPARTMENT OPINION- On the timely request of a lender, the General Counsel of the Department of Agriculture shall provide the Secretary with an opinion regarding the validity and authority of a guarantee issued to the lender under this section.

    ‘(e) AUTHORIZATION OF APPROPRIATIONS-

      ‘(1) IN GENERAL- There are authorized to be appropriated such sums as are necessary to carry out this section.

      ‘(2) FEES- To the extent that the amount of funds appropriated for a fiscal year under paragraph (1) are not sufficient to carry out this section, the Secretary may use up to 1/3 of the fees collected under subsection (c) for the cost of providing guarantees of bonds and notes under this section before depositing the remainder of the fees into the rural economic development subaccount maintained under section 313(b)(2)(A).

    ‘(f) TERMINATION- The authority provided under this section shall terminate on September 30, 2007.’.

    (b) ADMINISTRATION-

      (1) REGULATIONS- Not later than 180 days after the date of enactment of this Act, the Secretary of Agriculture shall promulgate regulations to carry out the amendments made by this section.

      (2) IMPLEMENTATION- Not later than 240 days after the date of enactment of this Act, the Secretary shall implement the amendment made by this section.

SEC. 6102. EXPANSION OF 911 ACCESS.

    Title III of the Rural Electrification Act of 1936 (7 U.S.C. 931 et seq.) is amended by adding at the end the following:

‘SEC. 315. EXPANSION OF 911 ACCESS.

    ‘(a) IN GENERAL- Subject to such terms and conditions as the Secretary may prescribe, the Secretary may make telephone loans under this title to borrowers of loans made by the Rural Utilities Service, State or local governments, Indian tribes (as defined in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b)), or other public entities for facilities and equipment to expand or improve 911 access and integrated emergency communications systems in rural areas.

    ‘(b) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated such sums as are necessary to carry out this section for each of fiscal years 2002 through 2007.’.

SEC. 6103. ENHANCEMENT OF ACCESS TO BROADBAND SERVICE IN RURAL AREAS.

    (a) IN GENERAL- The Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.) is amended by adding at the end the following:

‘TITLE VI--RURAL BROADBAND ACCESS

‘SEC. 601. ACCESS TO BROADBAND TELECOMMUNICATIONS SERVICES IN RURAL AREAS.

    ‘(a) PURPOSE- The purpose of this section is to provide loans and loan guarantees to provide funds for the costs of the construction, improvement, and acquisition of facilities and equipment for broadband service in eligible rural communities.

    ‘(b) DEFINITIONS- In this section:

      ‘(1) BROADBAND SERVICE- The term ‘broadband service’ means any technology identified by the Secretary as having the capacity to transmit data to enable a subscriber to the service to originate and receive high-quality voice, data, graphics, and video.

      ‘(2) ELIGIBLE RURAL COMMUNITY- The term ‘eligible rural community’ means any incorporated or unincorporated place that--

        ‘(A) has not more than 20,000 inhabitants, based on the most recent available population statistics of the Bureau of the Census; and

        ‘(B) is not located in an area designated as a standard metropolitan statistical area.

    ‘(c) LOANS AND LOAN GUARANTEES-

      ‘(1) IN GENERAL- The Secretary shall make or guarantee loans to eligible entities described in subsection (d) to provide funds for the construction, improvement, or acquisition of facilities and equipment for the provision of broadband service in eligible rural communities.

      ‘(2) PRIORITY- In making or guaranteeing loans under paragraph (1), the Secretary shall give priority to eligible rural communities in which broadband service is not available to residential customers.

    ‘(d) ELIGIBLE ENTITIES-

      ‘(1) IN GENERAL- To be eligible to obtain a loan or loan guarantee under this section, an entity shall--

        ‘(A) have the ability to furnish, improve, or extend a broadband service to an eligible rural community; and

        ‘(B) submit to the Secretary a proposal for a project that meets the requirements of this section.

      ‘(2) STATE AND LOCAL GOVERNMENTS- A State or local government (including any agency, subdivision, or instrumentality thereof (including consortia thereof)) shall be eligible for a loan or loan guarantee under this section to provide broadband services to an eligible rural community only if, not later than 90 days after the Administrator has promulgated regulations to carry out this section, no other eligible entity is already offering, or has committed to offer, broadband services to the eligible rural community.

      ‘(3) SUBSCRIBER LINES- An entity shall not be eligible to obtain a loan or loan guarantee under this section if the entity serves more than 2 percent of the telephone subscriber lines installed in the aggregate in the United States.

    ‘(e) BROADBAND SERVICE- The Secretary shall, from time to time as advances in technology warrant, review and recommend modifications of rate-of-data transmission criteria for purposes of the identification of broadband service technologies under subsection (b)(1).

    ‘(f) TECHNOLOGICAL NEUTRALITY- For purposes of determining whether or not to make a loan or loan guarantee for a project under this section, the Secretary shall use criteria that are technologically neutral.

    ‘(g) TERMS AND CONDITIONS FOR LOANS AND LOAN GUARANTEES- Notwithstanding any other provision of law, a loan or loan guarantee under subsection (c) shall--

      ‘(1) bear interest at an annual rate of, as determined by the Secretary--

        ‘(A) in the case of a direct loan--

          ‘(i) the cost of borrowing to the Department of the Treasury for obligations of comparable maturity; or

          ‘(ii) 4 percent; and

        ‘(B) in the case of a guaranteed loan, the current applicable market rate for a loan of comparable maturity; and

      ‘(2) have a term not to exceed the useful life of the assets constructed, improved, or acquired with the proceeds of the loan or extension of credit.

    ‘(h) USE OF LOAN PROCEEDS TO REFINANCE LOANS FOR DEPLOYMENT OF BROADBAND SERVICE- Notwithstanding any other provision of this Act, the proceeds of any loan made or guaranteed by the Secretary under this Act may be used by the recipient of the loan for the purpose of refinancing an outstanding obligation of the recipient on another telecommunications loan made under this Act if the use of the proceeds for that purpose will further the construction, improvement, or acquisition of facilities and equipment for the provision of broadband service in eligible rural communities.

    ‘(i) REPORTS- Not later than 1 year after the date of enactment of this section, and biennially thereafter, the Administrator shall submit to Congress a report that--

      ‘(1) describes how the Administrator determines under subsection (a)(1) that a service enables a subscriber to originate and receive high-quality voice, data, graphics, and video; and

      ‘(2) provides a detailed list of services that have been granted assistance under this section.

    ‘(j) FUNDING-

      ‘(1) IN GENERAL- Notwithstanding any other provision of law, of the funds of the Commodity Credit Corporation, the Secretary shall make available to carry out this section--

        ‘(A) $20,000,000 for each of fiscal years 2002 through 2005, to remain available until expended; and

        ‘(B) $10,000,000 for each of fiscal years 2006 and 2007, to remain available until expended.

      ‘(2) TELEVISION FUNDS-

        ‘(A) IN GENERAL- The Secretary shall be entitled to receive, shall accept, and shall use to carry out this section, without further appropriation any funds made available under section 1011(a)(2)(B) of the Launching Our Communities’ Access to Local Television Act of 2000 (47 U.S.C. 1109(a)(2)(B)).

        ‘(B) USE OF TELEVISION FUNDS- The Secretary shall use any funds received under subparagraph (A) in equal amounts for each remaining fiscal year on receipt of the funds (including the fiscal year of receipt) through fiscal year 2007.

      ‘(3) AUTHORIZATION OF APPROPRIATIONS- In addition to funds otherwise made available under this subsection, there are authorized to be appropriated such sums as necessary to carry out this section for each of fiscal years 2003 through 2007.

      ‘(4) ALLOCATION OF FUNDS-

        ‘(A) IN GENERAL- From amounts made available for each fiscal year under this subsection, the Secretary shall--

          ‘(i) establish a national reserve for loans and loan guarantees to eligible entities in States under this section; and

          ‘(ii) allocate amounts in the reserve to each State for each fiscal year for loans and loan guarantees to eligible entities in the State.

        ‘(B) AMOUNT- The amount of an allocation made to a State for a fiscal year under subparagraph (A) shall bear the same ratio to the amount of allocations made for all States for the fiscal year as the number of communities with a population of 2,500 inhabitants or less in the State bears to the number of communities with a population of 2,500 inhabitants or less in all States, as determined on the basis of the latest available census.

        ‘(C) UNOBLIGATED AMOUNTS- Any amounts in the reserve established for a State for a fiscal year under subparagraph (B) that are not obligated by April 1 of the fiscal year shall be available to the Secretary to make loans and loan guarantees under this section to eligible entities in any State, as determined by the Secretary.

    ‘(k) TERMINATION OF AUTHORITY- No loan or loan guarantee may be made under this section after September 30, 2007.’.

    (b) REGULATIONS-

      (1) IN GENERAL- Not later than 180 days after the date of enactment of this Act, the Secretary of Agriculture shall promulgate such regulations as are necessary to implement the amendment made by subsection (a).

      (2) PROCEDURE- The promulgation of the regulations shall be made without regard to--

        (A) the notice and comment provisions of section 553 of title 5, United States Code;

        (B) the Statement of Policy of the Secretary of Agriculture effective July 24, 1971 (36 Fed. Reg. 13804), relating to notices of proposed rulemaking and public participation in rulemaking; and

        (C) chapter 35 of title 44, United States Code (commonly known as the ‘Paperwork Reduction Act’).

      (3) CONGRESSIONAL REVIEW OF AGENCY RULEMAKING- In carrying out this subsection, the Secretary shall use the authority provided under section 808 of title 5, United States Code.

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

SEC. 6201. ALTERNATIVE AGRICULTURAL RESEARCH AND COMMERCIALIZATION CORPORATION.

    (a) REPEAL OF CORPORATION AUTHORIZATION- Subtitle G of title XVI of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5901 et seq.) is repealed.

    (b) DISPOSITION OF ASSETS- On the date of enactment of this Act--

      (1) the assets, both tangible and intangible, of the Alternative Agricultural Research and Commercialization Corporation (referred to in this section as the ‘Corporation’), including the funds in the Alternative Agricultural Research and Commercialization Revolving Fund as of the date of enactment of this Act, are transferred to the Secretary of Agriculture; and

      (2) notwithstanding the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 471 et seq.) and any other law that prescribes procedures for procurement, use, and disposal of property by a Federal agency, the Secretary shall have authority to manage and dispose of the assets transferred under paragraph (1) in a manner that, to the maximum extent practicable, provides the best value to the Federal Government.

    (c) USE OF ASSETS-

      (1) IN GENERAL- Funds transferred under subsection (b), and any income from assets or proceeds from the sale of assets transferred under subsection (b), shall be deposited in an account in the Treasury, and shall remain available to the Secretary until expended, without further appropriation, to pay--

        (A) any claims against, or obligations of, the Corporation; and

        (B) the costs incurred by the Secretary in carrying out this section.

      (2) FINAL DISPOSITION- On final disposition of all assets transferred under subsection (b), any funds remaining in the account described in paragraph (1) shall be transferred into miscellaneous receipts in the Treasury.

    (d) CONFORMING AMENDMENTS-

      (1) Section 5315 of title 5, United States Code, is amended by striking ‘Executive Director of the Alternative Agricultural Research and Commercialization Corporation’.

      (2) Section 730 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 5902 note; Public Law 104-127) is repealed.

      (3) Section 211(b) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6911(b)) is amended by striking paragraph (5).

      (4) Section 404(d) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7624(d)) is amended--

        (A) by striking paragraph (2); and

        (B) by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively.

      (5) The Herger-Feinstein Quincy Library Group Forest Recovery Act (16 U.S.C. 2104; Public Law 105-277; 112 Stat. 2681-305) is amended by striking subsection (m).

      (6) Section 9101(3) of title 31, United States Code, is amended by striking subparagraph (Q).

SEC. 6202. RURAL ELECTRONIC COMMERCE EXTENSION PROGRAM.

    Subtitle H of title XVI of the Food, Agriculture, Conservation, and Trade Act of 1990 is amended by inserting after section 1669 (7 U.S.C. 5922) the following:

‘SEC. 1670. RURAL ELECTRONIC COMMERCE EXTENSION PROGRAM.

    ‘(a) DEFINITIONS- In this section:

      ‘(1) DEVELOPMENT CENTER- The term ‘development center’ means--

        ‘(A) the North Central Regional Center for Rural Development;

        ‘(B) the Northeast Regional Center for Rural Development or its designee;

        ‘(C) the Southern Rural Development Center; and

        ‘(D) the Western Rural Development Center or its designee.

      ‘(2) EXTENSION PROGRAM- The term ‘extension program’ means the rural electronic commerce extension program established under subsection (b).

      ‘(3) MICROENTERPRISE- The term ‘microenterprise’ means a commercial enterprise that has 5 or fewer employees, 1 or more of whom own the enterprise.

      ‘(4) SECRETARY- The term ‘Secretary’ means the Secretary of Agriculture, acting through the Administrator of the Cooperative State Research, Education, and Extension Service.

      ‘(5) SMALL BUSINESS- The term ‘small business’ has the meaning given the term ‘small-business concern’ by section 3(a) of the Small Business Act (15 U.S.C. 632(a)).

    ‘(b) ESTABLISHMENT- The Secretary shall establish a rural electronic commerce extension program to expand and enhance electronic commerce practices and technology to be used by small businesses and microenterprises in rural areas.

    ‘(c) GRANTS-

      ‘(1) IN GENERAL- The Secretary shall carry out the program established under subsection (b) by making--

        ‘(A) grants to each of the development centers; and

        ‘(B) competitive grants to land-grant colleges and universities (or consortia of land-grant colleges and universities) and to colleges and universities (including community colleges) with agricultural or rural development programs--

          ‘(i) to develop and facilitate innovative rural electronic commerce business strategies; and

          ‘(ii) to assist small businesses and microenterprises in identifying, adapting, implementing, and using electronic commerce business practices and technologies.

      ‘(2) ELIGIBILITY- The selection criteria established for grants awarded under paragraph (1)(B) shall include--

        ‘(A) the ability of an applicant to provide training and education on best practices, technology transfer, adoption, and use of electronic commerce in rural communities by small businesses and microenterprises;

        ‘(B) the extent and geographic diversity of the area served by the proposed project or activity under the extension program;

        ‘(C) in the case of a land-grant college or university, the extent of participation of the land-grant college or university in the extension program (including any economic benefits that would result from that participation);

        ‘(D) the percentage of funding and in-kind commitments from non-Federal sources that would be needed by and available for a proposed project or activity under the extension program; and

        ‘(E) the extent of participation of low-income and minority businesses or microenterprises in a proposed project or activity under the extension program.

      ‘(3) NON-FEDERAL SHARE-

        ‘(A) IN GENERAL- As a condition of the receipt of funds under this section, a development center or grant applicant shall agree to obtain from non-Federal sources (including State, local, nonprofit, or private sector sources) contributions of an amount equal to 50 percent of the grant amount.

        ‘(B) FORM- The non-Federal share required under subparagraph (A) may be provided in the form of in-kind contributions.

        ‘(C) EXCEPTION- The non-Federal share required under subparagraph (A) may be reduced to 25 percent if the grant recipient serves low-income or minority-owned businesses or microenterprises, as determined by the Secretary.

    ‘(d) REPORT- Not later than 2 years after the date of enactment of this section, the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes--

      ‘(1) the policies, practices, and procedures used to assist rural communities in efforts to adopt and use electronic commerce techniques; and

    ‘(e) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this section $60,000,000 for each of fiscal years 2002 through 2007, of which not less than 1/3 of the amount made available for each fiscal year shall be used to carry out activities under subsection (c)(1)(A).’.

SEC. 6203. TELEMEDICINE AND DISTANCE LEARNING SERVICES IN RURAL AREAS.

    (a) IN GENERAL- Section 2335A of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 950aaa-5) is amended by striking ‘2002’ and inserting ‘2007’.

    (b) CONFORMING AMENDMENT- Section 1(b) of Public Law 102-551 (7 U.S.C. 950aaa note) is amended by striking ‘1997’ and inserting ‘2007’.

Subtitle D--SEARCH Grants for Small Communities

SEC. 6301. DEFINITIONS.

    In this subtitle:

      (1) COUNCIL- The term ‘council’ means an independent citizens’ council established by a State rural development director under section 6302(c).

      (2) ENVIRONMENTAL PROJECT-

        (A) IN GENERAL- The term ‘environmental project’ means a project that--

          (i) improves environmental quality; and

          (ii) is necessary to comply with an applicable environmental law (including a regulation).

        (B) INCLUSION- The term ‘environmental project’ includes an initial feasibility study of a project.

      (3) REGION- The term ‘region’ means a geographic area of a State, as determined by the State rural development director, in coordination with the environmental protection director of the State.

      (4) SEARCH GRANT- The term ‘SEARCH grant’ means a grant awarded under section 6302(f).

      (5) SECRETARY- The term ‘Secretary’ means the Secretary of Agriculture.

      (6) SMALL COMMUNITY- The term ‘small community’ means an incorporated or unincorporated rural community with a population of 2,500 inhabitants or less.

      (7) STATE- The term ‘State’ has the meaning given the term in section 381A of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009).

SEC. 6302. SEARCH GRANT PROGRAM.

    (a) IN GENERAL- The Secretary, in coordination with the Administrator of the Environmental Protection Agency, may establish the SEARCH grant program.

    (b) ALLOCATION TO STATE RURAL DEVELOPMENT DIRECTORS-

      (1) IN GENERAL- Subject to paragraph (2) and section 6304(a)(2), not later than 60 days after the date on which the Director of the Office of Management and Budget apportions any amounts made available under this subtitle for any of fiscal years 2002 through 2007, the Secretary, on request of a State rural development director (in coordination with the environmental protection director of the State), shall allocate to the State rural development director an amount not to exceed $1,000,000, to be used by the State rural development director to award SEARCH grants under subsection (d).

      (2) GRANTS TO STATES- The total amount of funds allocated to State rural development directors in all States other than Alaska, Hawaii, or the 48 contiguous States for a fiscal year under this subsection shall not exceed $1,000,000.

    (c) INDEPENDENT CITIZENS’ COUNCIL-

      (1) ESTABLISHMENT- The State rural development director of a State shall establish an independent citizens’ council to carry out the duties described in this section.

      (2) COMPOSITION-

        (A) IN GENERAL- A council shall be composed of 9 members, appointed by the State rural development director, in coordination with the environmental protection director of the State.

        (B) REPRESENTATION; RESIDENCE- Each member of a council shall--

          (i) represent an individual region of the State, as determined by the State rural development director; and

          (ii) reside in a small community in the State.

    (d) ELIGIBILITY- A SEARCH grant shall be awarded under this section only to a small community for 1 or more environmental projects for which the small community--

      (1) needs funds to carry out initial feasibility or environmental studies as required by Federal or State law before applying to traditional funding sources; and

      (2) demonstrates that the small community has been unable to obtain sufficient funding from traditional funding sources.

    (e) APPLICATIONS- To be eligible to receive a SEARCH grant, a small community in a State shall submit to the State rural development director of the State an application that includes--

      (1) a description of the proposed environmental project (including an explanation of how the project would assist the small community in complying with a Federal or State environmental law (including a regulation);

      (2) an explanation of why the project is important to the small community;

      (3) a description of all actions taken with respect to the project as of the date of the application, including any attempt to secure funding; and

      (4) a description of demonstrated need for funding for the project.

    (f) AWARDS-

      (1) IN GENERAL- Not later than May 1 of each fiscal year, a State rural development director, in coordination with the council and the environmental protection director of the State, shall--

        (A) review all applications received by the State rural development director under subsection (e); and

        (B) award SEARCH grants to small communities based on--

          (i) an evaluation of whether the proposed project meets the eligibility criteria under subsection (d); and

          (ii) the content of the application.

      (2) ADMINISTRATION- In awarding a SEARCH grant, a State rural development director--

        (A) shall award the funds for any recommended environmental project in a timely and expeditious manner; and

        (B) shall not award a SEARCH grant to a grantee or project in violation of any Federal or State law (including a regulation).

      (3) MATCHING REQUIREMENT- A small community that receives a SEARCH grant under this section may be required to provide matching funds.

    (g) UNEXPENDED FUNDS-

      (1) IN GENERAL- If, for any fiscal year, any unexpended funds remain after SEARCH grants are awarded by a State rural development director under subsection (f), the State rural development director, in coordination with the environmental protection director of the State, may repeat the application and review process so that any remaining funds are recommended for award, and awarded, not later than July 30 of the fiscal year.

      (2) RETENTION OF FUNDS-

        (A) IN GENERAL- Any unexpended funds that are not awarded under subsection (f) or paragraph (1) shall be retained by the State rural development director for award during the following fiscal year.

        (B) LIMITATION- A State SEARCH account that accumulates a balance of unexpended funds described in subparagraph (A) in excess of $2,000,000 shall be ineligible to receive additional funds for SEARCH grants until such time as the State rural development director awards grants in the amount of the excess.

SEC. 6303. REPORT.

    Not later than 30 days after the end of the first fiscal year for which SEARCH grants are awarded, and annually thereafter, the Secretary shall submit to the Committee on Energy and Commerce and the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that--

      (1) describes the number of SEARCH grants awarded during the fiscal year;

      (2) identifies each small community that received a SEARCH grant during the fiscal year;

      (3) describes the project or purpose for which each SEARCH grant was awarded, including a statement of the benefit to public health or the environment of the environmental project receiving the grant funds; and

      (4) describes the status of each project or portion of a project for which a SEARCH grant was awarded, including a project or portion of a project for which a SEARCH grant was awarded for any previous fiscal year.

SEC. 6304. FUNDING.

    (a) ALLOCATION TO STATE RURAL DEVELOPMENT DIRECTORS-

      (1) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out section 6302(b) $51,000,000 for each of fiscal years 2002 through 2007, of which not to exceed $1,000,000 shall be used to make grants under section 6302(b)(2).

      (2) ACTUAL APPROPRIATION- If funds to carry out section 6302(b) are made available for a fiscal year in an amount that is less than the amount authorized under paragraph (1) for the fiscal year, the Secretary shall divide the appropriated funds for the fiscal year equally among the 50 States.

    (b) OTHER EXPENSES- There are authorized to be appropriated such sums as are necessary to carry out this subtitle (other than section 6302(b)).

Subtitle E--Miscellaneous

SEC. 6401. VALUE-ADDED AGRICULTURAL PRODUCT MARKET DEVELOPMENT GRANTS.

    (a) IN GENERAL- Section 231 of the Agricultural Risk Protection Act of 2000 (7 U.S.C. 1621 note; Public Law 106-224) is amended--

      (1) by redesignating subsections (b) through (d) as subsections (c) through (e), respectively;

      (2) by striking subsection (a) and inserting the following:

    ‘(a) DEFINITION OF VALUE-ADDED AGRICULTURAL PRODUCT-

      ‘(1) IN GENERAL- The term ‘value-added agricultural product’ means any agricultural commodity or product that--

        ‘(A)(i) has undergone a change in physical state;

        ‘(ii) was produced in a manner that enhances the value of the agricultural commodity or product, as demonstrated through a business plan that shows the enhanced value, as determined by the Secretary; or

        ‘(iii) is physically segregated in a manner that results in the enhancement of the value of the agricultural commodity or product; and

        ‘(B) as a result of the change in physical state or the manner in which the agricultural commodity or product was produced or segregated--

          ‘(i) the customer base for the agricultural commodity or product has been expanded; and

          ‘(ii) a greater portion of the revenue derived from the marketing, processing, or physical segregation of the agricultural commodity or product is available to the producer of the commodity or product.

      ‘(2) INCLUSION- The term ‘value-added agricultural product’ includes farm- or ranch-based renewable energy.

    ‘(b) GRANT PROGRAM-

      ‘(1) IN GENERAL- From amounts made available under paragraph (4), the Secretary shall award competitive grants--

        ‘(A) to an eligible independent producer (as determined by the Secretary) of a value-added agricultural product to assist the producer--

          ‘(i) in developing a business plan for viable marketing opportunities for the value-added agricultural product; or

          ‘(ii) in developing strategies that are intended to create marketing opportunities for the producer; and

        ‘(B) to an eligible agricultural producer group, farmer or rancher cooperative, or majority-controlled producer-based business venture (as determined by the Secretary) to assist the entity--

          ‘(i) in developing a business plan for viable marketing opportunities in emerging markets for a value-added agricultural product; or

          ‘(ii) in developing strategies that are intended to create marketing opportunities in emerging markets for the value-added agricultural product.

      ‘(2) AMOUNT OF GRANT-

        ‘(A) IN GENERAL- The total amount provided under this subsection to a grant recipient shall not exceed $500,000.

        ‘(B) MAJORITY-CONTROLLED PRODUCER-BASED BUSINESS VENTURES- The amount of grants provided to majority-controlled producer-based business ventures under paragraph (1)(B) for a fiscal year may not exceed 10 percent of the amount of funds that are used to make grants for the fiscal year under this subsection.

      ‘(3) GRANTEE STRATEGIES- A grantee under paragraph (1) shall use the grant--

        ‘(A) to develop a business plan or perform a feasibility study to establish a viable marketing opportunity for a value-added agricultural product; or

        ‘(B) to provide capital to establish alliances or business ventures that allow the producer of the value-added agricultural product to better compete in domestic or international markets.

      ‘(4) FUNDING- Not later than 30 days after the date of enactment of this paragraph, on October 1, 2002, and on each October 1 thereafter through October 1, 2006, of the funds of the Commodity Credit Corporation, the Secretary shall make available to carry out this subsection $40,000,000, to remain available until expended.’;

      (3) in subsection (c)(1) (as redesignated by paragraph (1))--

        (A) by striking ‘subsection (a)(2)’ and inserting ‘subsection (b)(2)’;

        (B) by striking ‘$5,000,000’ and inserting ‘5 percent’; and

        (C) by striking ‘subsection (a)’ and inserting ‘subsection (b)’; and

      (4) in subsection (d) (as redesignated by paragraph (1)), by striking ‘subsections (a) and (b)’ and inserting ‘subsections (b) and (c)’.

    (b) APPLICABILITY-

      (1) IN GENERAL- Except as provided in paragraph (2), the amendments made by subsection (a) apply beginning on October 1, 2002.

      (2) FUNDING- Funds made available under section 231(b)(4)(A)(i) of the Agricultural Risk Protection Act of 2000 (as amended by subsection (a)(2)) shall be made available not later than 30 days after the date of enactment of this Act.

SEC. 6402. AGRICULTURE INNOVATION CENTER DEMONSTRATION PROGRAM.

    (a) PURPOSE- The purpose of this section is to direct the Secretary of Agriculture to establish a demonstration program under which agricultural producers are provided--

      (1) technical assistance, consisting of engineering services, applied research, scale production, and similar services, to enable the agricultural producers to establish businesses to produce value-added agricultural commodities or products;

      (2) assistance in marketing, market development, and business planning; and

      (3) organizational, outreach, and development assistance to increase the viability, growth, and sustainability of businesses that produce value-added agricultural commodities or products.

    (b) DEFINITIONS- In this section:

      (1) PROGRAM- The term ‘Program’ means the Agriculture Innovation Center Demonstration Program established under subsection (c).

      (2) SECRETARY- The term ‘Secretary’ means the Secretary of Agriculture.

    (c) ESTABLISHMENT OF PROGRAM- The Secretary shall establish a demonstration program, to be known as the ‘Agriculture Innovation Center Demonstration Program’ under which the Secretary shall--

      (1) make grants to assist eligible entities in establishing Agriculture Innovation Centers to enable agricultural producers to obtain the assistance described in subsection (a); and

      (2) provide assistance to eligible entities in establishing Agriculture Innovation Centers through the research and technical services of the Department of Agriculture.

    (d) ELIGIBILITY REQUIREMENTS-

      (1) IN GENERAL- An entity shall be eligible for a grant and assistance described in subsection (c) to establish an Agriculture Innovation Center if--

        (A) the entity--

          (i) has provided services similar to the services described in subsection (a); or

          (ii) demonstrates the capability of providing such services;

        (B) the application of the entity for the grant and assistance includes a plan, in accordance with regulations promulgated by the Secretary, that outlines--

          (i) the support for the entity in the agricultural community;

          (ii) the technical and other expertise of the entity; and

          (iii) the goals of the entity for increasing and improving the ability of local agricultural producers to develop markets and processes for value-added agricultural commodities or products;

        (C) the entity demonstrates that adequate resources (in cash or in kind) are available, or have been committed to be made available, to the entity, to increase and improve the ability of local agricultural producers to develop markets and processes for value-added agricultural commodities or products; and

        (D) the Agriculture Innovation Center of the entity has a board of directors established in accordance with paragraph (2).

      (2) BOARD OF DIRECTORS- Each Agriculture Innovation Center of an eligible entity shall have a board of directors composed of representatives of each of the following groups:

        (A) The 2 general agricultural organizations with the greatest number of members in the State in which the eligible entity is located.

        (B) The department of agriculture, or similar State department or agency, of the State in which the eligible entity is located.

        (C) Entities representing the 4 highest grossing commodities produced in the State, determined on the basis of annual gross cash sales.

    (e) GRANTS AND ASSISTANCE-

      (1) IN GENERAL- Subject to subsection (i), under the Program, the Secretary shall make, on a competitive basis, annual grants to eligible entities.

      (2) MAXIMUM AMOUNT OF GRANTS- A grant under paragraph (1) shall be in an amount that does not exceed the lesser of--

        (A) $1,000,000; or

        (B) twice the dollar amount of the resources (in cash or in kind) that the eligible entity demonstrates are available, or have been committed to be made available, to the eligible entity in accordance with subsection (d)(1)(C).

      (3) MAXIMUM NUMBER OF GRANTS-

        (A) FIRST FISCAL YEAR OF PROGRAM- In the first fiscal year of the Program, the Secretary shall make grants to not more than 5 eligible entities.

        (B) SECOND FISCAL YEAR OF PROGRAM- In the second fiscal year of the Program, the Secretary may make grants to--

          (i) the eligible entities to which grants were made under subparagraph (A); and

          (ii) not more than 10 additional eligible entities.

      (4) STATE LIMITATION-

        (A) IN GENERAL- Subject to subparagraph (B), in the first 3 fiscal years of the Program, the Secretary shall not make a grant under the Program to more than 1 entity in any 1 State.

        (B) COLLABORATION- Nothing in subparagraph (A) precludes a recipient of a grant under the Program from collaborating with any other institution with respect to activities conducted using the grant.

    (f) USE OF FUNDS- An eligible entity to which a grant is made under the Program may use the grant only for the following purposes (but only to the extent that the use is not described in section 231(d) of the Agricultural Risk Protection Act of 2000 (7 U.S.C. 1621 note; Public Law 106-224)):

      (1) Applied research.

      (2) Consulting services.

      (3) Hiring of employees, at the discretion of the board of directors of the Agriculture Innovation Center of the eligible entity.

      (4) The making of matching grants, each of which shall be in an amount not to exceed $5,000, to agricultural producers, except that the aggregate amount of all such matching grants made by the eligible entity shall be not more than $50,000.

      (5) Legal services.

      (6) Any other related cost, as determined by the Secretary.

    (g) RESEARCH ON EFFECTS ON THE AGRICULTURAL SECTOR-

      (1) IN GENERAL- Of the amount made available under subsection (i) for each fiscal year, the Secretary shall use $300,000 to support research at a university concerning the effects of projects for value-added agricultural commodities or products on agricultural producers and the commodity markets.

      (2) RESEARCH ELEMENTS- Research under paragraph (1) shall systematically examine, using linked, long-term, global projections of the agricultural sector, the potential effects of projects described in subparagraph (A) on--

        (A) demand for agricultural commodities;

        (B) market prices;

        (C) farm income; and

        (D) Federal outlays on commodity programs.

    (h) REPORT TO CONGRESS-

      (1) IN GENERAL- Not later than 3 years after the date on which the last of the first 10 grants is made under the Program, the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report on--

        (A) the effectiveness of the Program in improving and expanding the production of value-added agricultural commodities or products; and

        (B) the effects of the Program on the economic viability of agricultural producers.

      (2) REQUIRED ELEMENTS- The report under paragraph (1) shall--

        (A) include a description of the best practices and innovations found at each of the Agriculture Innovation Centers established under the Program; and

        (B) specify the number and type of activities assisted, and the type of assistance provided, under the Program.

    (i) FUNDING- Of the amount made available under section 231(a)(1) of the Agricultural Risk Protection Act of 2000 (7 U.S.C. 1621 note; Public Law 106-224) for each fiscal year, the Secretary shall use to carry out this section--

      (1) not less than $3,000,000 for fiscal year 2002; and

      (2) not less than $6,000,000 for each of fiscal years 2003 and 2004.

SEC. 6403. FUND FOR RURAL AMERICA.

    (a) IN GENERAL- Section 793 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 2204f) is repealed.

    (b) CONFORMING AMENDMENT- Section 2(b)(8)(B) of the Competitive, Special, and Facilities Research Grant Act (7 U.S.C. 450i(b)(8)(B)) is amended in the second sentence by striking ‘smaller college or university (as described in section 793(c)(2)(ii) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 2204f(c)(2)(ii))’ and inserting ‘college, university, or research foundation maintained by a college or university that ranks in the lowest 1/3 of such colleges, universities, and research foundations on the basis of Federal research funds received’.

SEC. 6404. RURAL LOCAL TELEVISION BROADCAST SIGNAL LOAN GUARANTEES.

    (a) IN GENERAL- Section 1011(a) of the Launching Our Communities’ Access to Local Television Act of 2000 (47 U.S.C. 1109(a)) is amended--

      (1) by striking ‘For’ and inserting the following:

      ‘(1) AUTHORIZATION OF APPROPRIATIONS- For’; and

      (2) by adding at the end the following:

      ‘(2) COMMODITY CREDIT CORPORATION FUNDS-

        ‘(A) IN GENERAL- Notwithstanding any other provision of law, subject to subparagraph (B), in addition to amounts made available under paragraph (1), of the funds of the Commodity Credit Corporation, the Secretary of Agriculture shall make available for loan guarantees to carry out this title $80,000,000 for the period beginning on the date of enactment of this paragraph and ending on December 31, 2006, to remain available until expended.

        ‘(B) BROADBAND LOANS AND LOAN GUARANTEES-

          ‘(i) IN GENERAL- Amounts made available under subparagraph (A) that are not obligated as of the release date described in clause (ii) shall be available to the Secretary to make loans and loan guarantees under section 601 of the Rural Electrification Act of 1936.

          ‘(ii) RELEASE DATE- For purposes of clause (i), the release date is the date that is the earlier of--

            ‘(I) the date the Secretary determines that at least 75 percent of the designated market areas (as defined in section 122(j) of title 17, United States Code) not in the top 40 designated market areas described in section 1004(e)(1)(C)(i) of the Launching Our Communities’ Access to Local Television Act of 2000 (47 U.S.C. 1103(e)(1)(C)(i)) have access to local television broadcast signals for virtually all households (as determined by the Secretary); or

            ‘(II) December 31, 2006.

        ‘(C) ADVANCED APPROPRIATIONS- Subsections (c) and (h)(1)(B) of section 1004 and section 1005(n)(3)(B) shall not apply to amounts made available under this paragraph.’.

    (b) TECHNICAL AND CONFORMING AMENDMENTS-

      (1) APPROVAL OF LOAN GUARANTEES- Section 1004 of the Launching Our Communities’ Access to Local Television Act of 2000 (47 U.S.C. 1103) is amended--

        (A) in subsection (b)(1)--

          (i) by striking ‘section 5’ and inserting ‘section 1005’; and

          (ii) by striking ‘section 11’ and inserting ‘section 1011’;

        (B) in subsection (d)(1), by striking ‘section 3’ and inserting ‘section 1003’; and

        (C) in the first sentence of subsection (h)(2)(D), by striking ‘section 5’ and inserting ‘section 1005’.

      (2) ADMINISTRATION OF LOAN GUARANTEES- Section 1005 of the Launching Our Communities’ Access to Local Television Act of 2000 (47 U.S.C. 1104) is amended--

        (A) in subsection (a), by striking ‘sections 3 and 4’ and inserting ‘sections 1003 and 1004’;

        (B) in subsection (b)--

          (i) in paragraph (1)(D), by striking ‘section 6(a)(2)’ and inserting ‘section 1006(a)(2)’; and

          (ii) in paragraph (3), by striking ‘section 4(d)(3)(B)(iii)’ and inserting ‘section 1004(d)(3)(B)(iii)’; and

        (C) in subsection (e)(3), by striking ‘section 4(g)’ and inserting ‘section 1004(g)’.

SEC. 6405. RURAL FIREFIGHTERS AND EMERGENCY PERSONNEL GRANT PROGRAM.

    (a) IN GENERAL- The Secretary of Agriculture may make grants to units of general local government and Indian tribes (as defined in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b)) to pay the cost of training firefighters and emergency medical personnel in firefighting, emergency medical practices, and responding to hazardous materials and bioagents in rural areas.

    (b) USE OF FUNDS-

      (1) SCHOLARSHIPS-

        (A) IN GENERAL- Not less than 60 percent of the amounts made available for competitively-awarded grants under this section shall be used to provide grants to fund partial scholarships for training of individuals at training centers approved by the Secretary.

        (B) PRIORITY- In awarding grants under this paragraph, the Secretary shall give priority to grant applicants that provide for training within the region (or locality) of the applicant.

      (2) GRANTS FOR TRAINING CENTERS-

        (A) IN GENERAL- A grant under subsection (a) may be used to provide financial assistance to State and regional centers that provide training for firefighters and emergency medical personnel for improvements to the training facility, equipment, curricula, and personnel.

        (B) LIMITATION- Not more than $750,000 shall be provided to any single training center for any fiscal year under this paragraph.

    (c) FUNDING- Of the funds of the Commodity Credit Corporation, the Secretary shall make available to carry out this section $10,000,000 for each of fiscal years 2003 through 2007, to remain available until expended.

SEC. 6406. SENSE OF CONGRESS ON RURAL POLICY COORDINATION.

    It is the sense of Congress that the President should--

      (1) appoint a Special Assistant to the President for Rural Policy;

      (2) designate within each Federal agency with jurisdiction over rural programs or activities 1 or more senior officers or employees to provide rural policy leadership for the agency; and

      (3) create an intergovernmental rural policy working group comprised of--

        (A) the Special Assistant to the President for Rural Policy, who should serve as Chairperson; and

        (B) the senior officers and employees designated under paragraph (2).

TITLE VII--RESEARCH AND RELATED MATTERS

Subtitle A--Extensions

SEC. 7101. NATIONAL RURAL INFORMATION CENTER CLEARINGHOUSE.

    Section 2381(e) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 3125b(e)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7102. 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 subsection (a)--

        (A) by striking ‘and’ after ‘economics,’; and

        (B) by inserting ‘, and rural economic, community, and business development’ before the period;

      (2) in subsection (b)--

        (A) in paragraph (1), by inserting ‘, or in rural economic, community, and business development’ before the semicolon;

        (B) in paragraph (2), by inserting ‘, or in rural economic, community, and business development’ before the semicolon;

        (C) in paragraph (3), by inserting ‘, or teaching programs emphasizing rural economic, community, and business development’ before the semicolon;

        (D) in paragraph (4), by inserting ‘, or programs emphasizing rural economic, community, and business development,’ after ‘programs’; and

        (E) in paragraph (5), by inserting ‘, or professionals in rural economic, community, and business development’ before the semicolon;

      (3) in subsection (d)--

        (A) in paragraph (1), by inserting ‘, or in rural economic, community, and business development,’ after ‘sciences’; and

        (B) in paragraph (2), by inserting ‘, or in the rural economic, community, and business development workforce,’ after ‘workforce’; and

      (4) in subsection (l), by striking ‘2002’ and inserting ‘2007’.

SEC. 7103. POLICY RESEARCH CENTERS.

    Section 1419A(d) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3155(d)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7104. HUMAN NUTRITION INTERVENTION AND HEALTH PROMOTION RESEARCH PROGRAM.

    Section 1424(d) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3174(d)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7105. PILOT RESEARCH PROGRAM TO COMBINE MEDICAL AND AGRICULTURAL RESEARCH.

    Section 1424A(d) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3174a(d)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7106. NUTRITION EDUCATION PROGRAM.

    Section 1425(c)(3) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3175(c)(3)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7107. CONTINUING ANIMAL HEALTH AND DISEASE RESEARCH PROGRAMS.

    Section 1433(a) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3195(a)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7108. APPROPRIATIONS FOR RESEARCH ON NATIONAL OR REGIONAL PROBLEMS.

    Section 1434(a) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3196(a)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7109. GRANTS TO UPGRADE AGRICULTURAL AND FOOD SCIENCES FACILITIES AT 1890 LAND-GRANT COLLEGES, INCLUDING TUSKEGEE UNIVERSITY.

    Section 1447(b) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3222b(b)) is amended by striking ‘$15,000,000 for each of fiscal years 1996 through 2002’ and inserting ‘$25,000,000 for each of fiscal years 2002 through 2007’.

SEC. 7110. NATIONAL RESEARCH AND TRAINING VIRTUAL CENTERS.

    (a) AUTHORIZATION- Section 1448 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3222c) is amended by striking ‘2002’ each place it appears in subsections (a)(1) and (f) and inserting ‘2007’.

    (b) REDESIGNATION- Section 1448 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3222c) is amended--

      (1) in the section heading, by striking ‘centennial’ and inserting ‘virtual’; and

      (2) by striking ‘centennial’ each place it appears and inserting ‘virtual’.

SEC. 7111. HISPANIC-SERVING INSTITUTIONS.

    Section 1455(c) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3241(c)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7112. COMPETITIVE GRANTS FOR INTERNATIONAL AGRICULTURAL SCIENCE AND EDUCATION PROGRAMS.

    Section 1459A(c) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3292b(c)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7113. UNIVERSITY RESEARCH.

    Section 1463 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3311) is amended--

      (1) in subsection (a), by striking ‘$850,000,000 for each of the fiscal years 1991 through 2002’ and inserting ‘such sums as may be necessary for each of fiscal years 1991 through 2007’; and

      (2) in subsection (b), by striking ‘$310,000,000 for each of the fiscal years 1991 through 2002’ and inserting ‘such sums as may be necessary for each of fiscal years 1991 through 2007’.

SEC. 7114. EXTENSION SERVICE.

    Section 1464 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3312) is amended by striking ‘$420,000,000 for fiscal year 1991, $430,000,000 for fiscal year 1992, $440,000,000 for fiscal year 1993, $450,000,000 for fiscal year 1994, and $460,000,000 for each of fiscal years 1995 through 2002’ and inserting ‘such sums as may be necessary for each of fiscal years 1991 through 2007’.

SEC. 7115. SUPPLEMENTAL AND ALTERNATIVE CROPS.

    Section 1473D(a) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3319d(a)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7116. AQUACULTURE RESEARCH FACILITIES.

    The first sentence of section 1477 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3324) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7117. RANGELAND RESEARCH.

    Section 1483(a) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3336(a)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7118. NATIONAL GENETICS RESOURCES PROGRAM.

    Section 1635(b) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5844(b)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7119. HIGH-PRIORITY RESEARCH AND EXTENSION INITIATIVES.

    Section 1672(h) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5925(h)) is amended by striking ‘2002’ and inserting ‘2007.

SEC. 7120. NUTRIENT MANAGEMENT RESEARCH AND EXTENSION INITIATIVE.

    Section 1672A(g) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5925a(g)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7121. AGRICULTURAL TELECOMMUNICATIONS PROGRAM.

    Section 1673(h) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5926(h)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7122. ASSISTIVE TECHNOLOGY PROGRAM FOR FARMERS WITH DISABILITIES.

    Section 1680(c)(1) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5933(c)(1)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7123. PARTNERSHIPS FOR HIGH-VALUE AGRICULTURAL PRODUCT QUALITY RESEARCH.

    Section 402(g) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7622(g)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7124. BIOBASED PRODUCTS.

    (a) PILOT PROJECT- Section 404(e)(2) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7624(e)(2)) is amended by striking ‘2001’ and inserting ‘2007’.

    (b) AUTHORIZATION OF APPROPRIATIONS- Section 404(h) of such Act (7 U.S.C. 7624(h)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7125. INTEGRATED RESEARCH, EDUCATION, AND EXTENSION COMPETITIVE GRANTS PROGRAM.

    Section 406 of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7626) is amended--

      (1) by redesignating subsection (e) as subsection (f);

      (2) by inserting after subsection (d) the following:

    ‘(e) TERM OF GRANT- A grant under this section shall have a term of not more than 5 years.’; and

      (3) in subsection (f) (as so redesignated), by striking ‘2002’ and inserting ‘2007’.

SEC. 7126. EQUITY IN EDUCATIONAL LAND-GRANT STATUS ACT OF 1994.

    (f) INSTITUTIONAL CAPACITY BUILDING GRANTS- Section 535 of the Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note; Public Law 103-382) is amended--

      (1) in subsection (b)(1), by striking ‘2002’ and inserting ‘2007’; and

      (2) in subsection (c), by striking ‘$1,700,000 for each of fiscal years 1996 through 2002’ and inserting ‘such sums as are necessary for each of fiscal years 2002 through 2007’.

SEC. 7127. 1994 INSTITUTION RESEARCH GRANTS.

    Section 536(c) of the Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7128. ENDOWMENT FOR 1994 INSTITUTIONS.

    The first sentence of section 533(b) of the Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note) is amended by striking ‘$4,600,000’ and all that follows through the period and inserting ‘such sums as are necessary to carry out this section for each of fiscal years 1996 through 2007.’.

SEC. 7129. PRECISION AGRICULTURE.

    Section 403(i) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7623(i)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7130. THOMAS JEFFERSON INITIATIVE FOR CROP DIVERSIFICATION.

    Section 405(h) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7625(h)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7131. SUPPORT FOR RESEARCH REGARDING DISEASES OF WHEAT, TRITICALE, AND BARLEY CAUSED BY FUSARIUM GRAMINEARUM OR BY TILLETIA INDICA.

    Section 408(e) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7628(e)) is amended--

      (1) by striking ‘$5,200,000’ and inserting ‘such sums as may be necessary’; and

      (2) by striking ‘2002’ and inserting ‘2007’.

SEC. 7132. OFFICE OF PEST MANAGEMENT POLICY.

    Section 614(f) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7653(f)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7133. NATIONAL AGRICULTURAL RESEARCH, EXTENSION, EDUCATION, AND ECONOMICS ADVISORY BOARD.

    Section 1408(h) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3123(h)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7134. GRANTS FOR RESEARCH ON PRODUCTION AND MARKETING OF ALCOHOLS AND INDUSTRIAL HYDROCARBONS FROM AGRICULTURAL COMMODITIES AND FOREST PRODUCTS.

    Section 1419(d) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3154(d)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7135. AGRICULTURAL EXPERIMENT STATIONS RESEARCH FACILITIES.

    Section 6(a) of the Research Facilities Act (7 U.S.C. 390d(a)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7136. COMPETITIVE, SPECIAL, AND FACILITIES RESEARCH GRANTS NATIONAL RESEARCH INITIATIVE.

    Section 2(b)(10) of the Competitive, Special, and Facilities Research Grant Act (7 U.S.C. 450i(b)(10)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7137. FEDERAL AGRICULTURAL RESEARCH FACILITIES AUTHORIZATION OF APPROPRIATIONS.

    Section 1431 of the National Agricultural Research, Extension, and Teaching Policy Act Amendments of 1985 (Public Law 99-198; 99 Stat. 1556) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7138. CRITICAL AGRICULTURAL MATERIALS RESEARCH.

    Section 16(a) of the Critical Agricultural Materials Act (7 U.S.C. 178n(a)) is amended by striking ‘2002’ and inserting ‘2007’.

SEC. 7139. AQUACULTURE.

    Section 10 of the National Aquaculture Act of 1980 (16 U.S.C. 2809) is amended by striking ‘2002’ each place it appears and inserting ‘2007’.

Subtitle B--Modifications

SEC. 7201. EQUITY IN EDUCATIONAL LAND-GRANT STATUS ACT OF 1994.

    (a) AUTHORIZATION OF APPROPRIATIONS- Section 534(a)(1)(A) of the Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note) is amended by striking ‘$50,000’ and inserting ‘$100,000’.

    (b) CHANGE OF INDIAN STUDENT COUNT FORMULA- Section 533(c)(4)(A) of the Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note; Public Law 103-382) is amended by striking ‘(as defined in section 390(3) of the Carl D. Perkins Vocational and Applied Technology Education Act, as such section was in effect on the day preceding the date of enactment of the Carl. D. Perkins Vocational and Applied Technology Education Amendments of 1998 (Oct. 31, 1998)) for each 1994 Institution for the fiscal year’ and inserting ‘(as defined in section 2(a) of the Tribally Controlled College or University Assistance Act of 1978 (25 U.S.C. 1801(a)))’.

    (c) ACCREDITATION REQUIREMENT FOR RESEARCH GRANTS- Section 533(a)(3) of the Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note; Public Law 103-382) is amended by striking ‘sections 534 and 535’ and inserting ‘sections 534, 535, and 536’.

    (d) TECHNICAL AMENDMENT TO REFLECT NAME CHANGES- Section 532 of the Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note; Public Law 103-382) is amended by striking paragraphs (1) through (30) and inserting the following:

      ‘(1) Bay Mills Community College.

      ‘(2) Blackfeet Community College.

      ‘(3) Cankdeska Cikana Community College.

      ‘(4) College of Menominee Nation.

      ‘(5) Crownpoint Institute of Technology.

      ‘(6) D-Q University.

      ‘(7) Dine College.

      ‘(8) Chief Dull Knife Memorial College.

      ‘(9) Fond du Lac Tribal and Community College.

      ‘(10) Fort Belknap College.

      ‘(11) Fort Berthold Community College.

      ‘(12) Fort Peck Community College.

      ‘(13) Haskell Indian Nations University.

      ‘(14) Institute of American Indian and Alaska Native Culture and Arts Development.

      ‘(15) Lac Courte Oreilles Ojibwa Community College.

      ‘(16) Leech Lake Tribal College.

      ‘(17) Little Big Horn College.

      ‘(18) Little Priest Tribal College.

      ‘(19) Nebraska Indian Community College.

      ‘(20) Northwest Indian College.

      ‘(21) Oglala Lakota College.

      ‘(22) Salish Kootenai College.

      ‘(23) Sinte Gleska University.

      ‘(24) Sisseton Wahpeton Community College.

      ‘(25) Si Tanka/Huron University.

      ‘(26) Sitting Bull College.

      ‘(27) Southwestern Indian Polytechnic Institute.

      ‘(28) Stone Child College.

      ‘(29) Turtle Mountain Community College.

      ‘(30) United Tribes Technical College.

      ‘(31) White Earth Tribal and Community College.’.

    (e) REPORT RECOMMENDING CRITERIA FOR ADDITIONAL ELIGIBLE ENTITIES- Not later than 1 year after the date of enactment of this Act, the Secretary of Agriculture shall submit a report containing recommended criteria for designating additional 1994 Institutions to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate.

SEC. 7202. CARRYOVER FOR EXPERIMENT STATIONS.

    Section 7 of the Hatch Act of 1887 (7 U.S.C. 361g) is amended by striking subsection (c) and inserting the following:

    ‘(c) CARRYOVER-

      ‘(1) IN GENERAL- The balance of any annual funds provided under this Act to a State agricultural experiment station for a fiscal year that remains unexpended at the end of the fiscal year may be carried over for use during the following fiscal year.

      ‘(2) FAILURE TO EXPEND FULL ALLOTMENT-

        ‘(A) IN GENERAL- If any unexpended balance carried over by a State is not expended by the end of the second fiscal year, an amount equal to the unexpended balance shall be deducted from the next succeeding annual allotment to the State.

        ‘(B) REDISTRIBUTION- Federal funds that are deducted under subparagraph (A) for a fiscal year shall be redistributed by the Secretary in accordance with the formula set forth in section 3(c) to those States for which no deduction under subparagraph (A) has been taken for that fiscal year.’.

SEC. 7203. AUTHORIZATION PERCENTAGES FOR RESEARCH AND EXTENSION FORMULA FUNDS.

    (a) EXTENSION- Section 1444(a) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3221(a)) is amended--

      (1) by striking ‘(a) There’ and inserting the following:

    ‘(a) AUTHORIZATION OF APPROPRIATIONS-

      ‘(1) IN GENERAL- There’;

      (2) by striking the second sentence; and

      (3) in the third sentence, by striking ‘Beginning’ through ‘6 per centum’ and inserting the following:

      ‘(2) MINIMUM AMOUNT- Beginning with fiscal year 2003, there shall be appropriated under this section for each fiscal year an amount that is not less than 15 percent’;

      (3) by striking ‘Funds appropriated’ and inserting the following:

      ‘(3) USES- Funds appropriated’; and

      (4) by striking ‘No more’ and inserting the following:

      ‘(4) CARRYOVER- No more’.

    (b) RESEARCH- Section 1445(a) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3222(a)) is amended--

      (1) by striking ‘(a) There’ and inserting the following:

    ‘(a) AUTHORIZATION OF APPROPRIATIONS-

      ‘(1) IN GENERAL- There’;

      (2) by striking the second sentence and inserting the following:

      ‘(2) MINIMUM AMOUNT- Beginning with fiscal year 2003, there shall be appropriated under this section for each fiscal year an amount that is not less than 25 percent of the total appropriations for the fiscal year under section 3 of the Hatch Act of 1887 (7 U.S.C. 361c).’;

      (3) by striking ‘Funds appropriated’ and inserting the following:

      ‘(3) USES- Funds appropriated’;

      (4) by striking ‘The eligible’ and inserting the following:

      ‘(4) COORDINATION- The eligible’; and

      (5) by striking ‘No more’ and inserting the following:

      ‘(5) CARRYOVER- No more’.

SEC. 7204. CARRYOVER FOR ELIGIBLE INSTITUTIONS.

    Section 1445(a) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3222(a)) (as amended by section 7203 of this Act) is further amended by striking paragraph (5) and inserting the following:

      ‘(5) CARRYOVER-

        ‘(A) IN GENERAL- The balance of any annual funds provided to an eligible institution for a fiscal year under this section that remains unexpended at the end of the fiscal year may be carried over for use during the following fiscal year.

        ‘(B) FAILURE TO EXPEND FULL AMOUNT-

          ‘(i) IN GENERAL- If any unexpended balance carried over by an eligible institution is not expended by the end of the second fiscal year, an amount equal to the unexpended balance shall be deducted from the next succeeding annual allotment to the eligible institution.

          ‘(ii) REDISTRIBUTION- Federal funds that are deducted under clause (i) for a fiscal year shall be redistributed by the Secretary in accordance with the formula set forth in subsection (b)(2)(B) to those eligible institutions for which no deduction under clause (i) has been taken for that fiscal year.’.

SEC. 7205. INITIATIVE FOR FUTURE AGRICULTURE AND FOOD SYSTEMS.

    (a) FUNDING- Section 401(b) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7621(b)) is amended--

      (1) in paragraph (1), by striking ‘2002’ and inserting ‘2001’; and

      (2) by adding at the end the following:

      ‘(3) OTHER FUNDING- Out of funds in the Commodity Credit Corporation, the Secretary shall transfer to the Account--

        ‘(A) on October 1, 2003, $120,000,000;

        ‘(B) on October 1, 2004, $140,000,000;

        ‘(C) on October 1, 2005, $160,000,000; and

        ‘(D) on October 1, 2006, and each October 1 thereafter, $200,000,000.’.

      (2) by amending subsection (c)(1) to read as follows:

      ‘(1) CRITICAL EMERGING AGRICULTURAL AND RURAL ISSUES- The Secretary shall use the funds in the Account for research, extension, and education grants (referred to in this section as ‘grants’) to address critical emerging agricultural and rural issues related to--

        ‘(A) future food production;

        ‘(B) environmental quality and natural resource management;

        ‘(C) farm income; or

        ‘(D) rural economic and business and community development policy.’; and

      (3) in subsection (e)(1), by striking ‘small and mid-sized’ and inserting ‘small, mid-sized, and minority-serving’.

SEC. 7206. ELIGIBILITY FOR INTEGRATED GRANTS PROGRAM.

    Section 406(b) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7626(b)) is amended by inserting ‘and 1994 Institutions’ before ‘on a competitive basis’.

SEC. 7207. AGRICULTURAL RESEARCH, EXTENSION, AND EDUCATION REFORM ACT OF 1998.

    (a) PRECISION AGRICULTURE- Section 403 of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7623) is amended--

      (1) in subsection (a)--

        (A) in paragraph (3)--

          (i) in subparagraph (A), inserting ‘, horticultural,’ following ‘agronomic’ the second place it appears; and

          (ii) in subparagraph (C), by striking ‘or’ at the end;

          (iii) in subparagraph (D), by striking the period at the end and inserting ‘; or’; and

          (iv) by adding at the end the following:

        ‘(E) using such information to enable intelligent mechanized harvesting and sorting systems for horticultural crops.’;

        (B) in paragraph (4)--

          (i) in subparagraph (C), by striking ‘or’ at the end;

          (ii) in subparagraph (D), by striking the period at the end and inserting ‘; or’; and

          (iii) by adding at the end the following:

        ‘(E) robotic and other intelligent machines for use in horticultural cropping systems.’; and

        (C) in paragraph (5)(F), by inserting ‘(including improved use of energy inputs)’ after ‘farm production efficiencies’;

      (2) in subsection (c)(2)--

        (A) by inserting ‘or horticultural’ after ‘agronomic’; and

        (B) by striking ‘and meteorological variability’ and inserting ‘product variability, and meteorological variability’;

      (3) in subsection (d)--

        (A) by redesignating paragraphs (4) and (5) as paragraphs (5) and (6), respectively; and

        (B) by inserting after paragraph (3) the following:

      ‘(4) Improve farm energy use efficiencies.’.

    (b) THOMAS JEFFERSON INITIATIVE FOR CROP DIVERSIFICATION- Section 405(a) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7625(a)) is amended by striking ‘and marketing’ and inserting ‘, marketing, and efficient use’.

    (c) COORDINATED PROGRAM OF RESEARCH, EXTENSION, AND EDUCATION TO IMPROVE VIABILITY OF SMALL- AND MEDIUM-SIZE DAIRY, LIVESTOCK, AND POULTRY OPERATIONS- Section 407(b)(3) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7627(b)(3)) is amended by inserting ‘(including improved use of energy inputs)’ after ‘poultry systems that increase efficiencies’.

    (d) SUPPORT FOR RESEARCH REGARDING DISEASES OF WHEAT, TRITICALE, AND BARLEY CAUSED BY FUSARIUM GRAMINEARUM OR BY TILLETIA INDICA-

      (1) RESEARCH GRANT AUTHORIZED- Section 408(a) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7628(a)) is amended to read as follows:

    ‘(a) RESEARCH GRANT AUTHORIZED- The Secretary of Agriculture may make grants to consortia of land-grant colleges and universities to enhance the ability of the consortia to carry out multi-State research projects aimed at understanding and combating diseases of wheat, triticale, and barley caused by Fusarium graminearum and related fungi (referred to in this section as ‘wheat scab’) or by Tilletia indica and related fungi (referred to in this section as ‘Karnal bunt’).’.

      (2) RESEARCH COMPONENTS- Section 408(b) of such Act (7 U.S.C. 7628(b)) is amended--

        (A) in paragraph (1), by inserting ‘or of Karnal bunt,’ after ‘epidemiology of wheat scab’;

        (B) in paragraph (1), by inserting ‘, triticale,’ after ‘occurring in wheat’;

        (C) in paragraph (2), by inserting ‘or Karnal bunt’ after ‘wheat scab’;

        (D) in paragraph (3)(A), by striking ‘and barley for the presence of’ and inserting ‘, triticale, and barley for the presence of Karnal bunt or of’;

        (E) in paragraph (3)(B), by striking ‘and barley infected with wheat scab’ and inserting ‘, triticale, and barley infected with wheat scab or with Karnal bunt’;

        (F) in paragraph (3)(C), by inserting ‘wheat scab’ after ‘to render’;

        (G) in paragraph (4), by striking ‘and barley to wheat scab’ and inserting ‘, triticale, and barley to wheat scab and to Karnal bunt’; and

        (H) in paragraph (5)--

          (i) by inserting ‘and Karnal bunt’ after ‘wheat scab’; and

          (ii) by inserting ‘, triticale,’ after ‘resistant wheat’.

      (3) COMMUNICATIONS NETWORKS- Section 408(c) of such Act (7 U.S.C. 7628(c)) is amended by inserting ‘or Karnal bunt’ after ‘wheat scab’.

      (4) TECHNICAL AMENDMENTS- (A) The section heading for section 408 of such Act is amended by striking ‘and barley caused by fusarium graminearum’ and inserting ‘, triticale, and barley caused by fusarium graminearum or by tilletia indica’.

      (B) The table of sections for such Act is amended by striking ‘and barley caused by fusarium graminearum’ in the item relating to section 408 and inserting ‘, triticale, and barley caused by Fusarium graminearum or by Tilletia indica’.

    (e) PROGRAM TO CONTROL JOHNE’S DISEASE- Title IV of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7621 et seq.) is amended by adding at the end the following new section:

‘SEC. 409. BOVINE JOHNE’S DISEASE CONTROL PROGRAM.

    ‘(a) ESTABLISHMENT- The Secretary of Agriculture, in coordination with State veterinarians and other appropriate State animal health professionals, may establish a program to conduct research, testing, and evaluation of programs for the control and management of Johne’s disease in livestock.

    ‘(b) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to the Secretary such sums as may be necessary to carry out this section for each of fiscal years 2003 through 2007.’.

SEC. 7208. FOOD, AGRICULTURE, CONSERVATION, AND TRADE ACT OF 1990.

    (a) AGRICULTURAL GENOME INITIATIVE- Section 1671(b) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5924(b)) is amended--

      (1) in paragraph (3), by inserting ‘pathogens and’ before ‘diseases causing economic hardship’;

      (2) in paragraph (6), by striking ‘and’ at the end;

      (3) by redesignating paragraph (7) as paragraph (8); and

      (4) by inserting after paragraph (6) the following new paragraph:

      ‘(7) reducing the economic impact of plant pathogens on commercially important crop plants; and’.

    (b) HIGH-PRIORITY RESEARCH AND EXTENSION INITIATIVES- Section 1672(e) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5925) is amended by adding at the end the following new paragraphs:

      ‘(25) GENETICALLY MODIFIED AGRICULTURE PRODUCTS (GMAP) RESEARCH- Research grants may be made under this section for the purposes of providing unbiased, science-based evaluation of the risks and benefits to the public and the environment of specific genetically modified plant and animal products. Grants may be used to form interdisciplinary teams to review and conduct research on scientific, social, economic, and ethical issues during the review process, to answer questions raised by the release of new genetically modified agriculture products, to conduct fundamental studies on the health and environmental safety of genetically modified agriculture products (including quantitative risk assessment, the effect of specific genetically modified agriculture products on human health, and gene flow studies), to communicate the risk of genetically modified agriculture products through extension and education programs, and to engage the public and industry in relevant issues.

      ‘(26) WIND EROSION RESEARCH AND EXTENSION- Research and extension grants may be made under this section for the purpose of validating wind erosion models.

      ‘(27) CROP LOSS RESEARCH AND EXTENSION- Research and extension grants may be made under this section for the purpose of validating crop loss models.

      ‘(28) LAND USE MANAGEMENT RESEARCH AND EXTENSION- Research and extension grants may be made under this section for the purposes of evaluating the environmental benefits of land use management tools such as those provided in the Farmland Protection Program.

      ‘(29) WATER AND AIR QUALITY RESEARCH AND EXTENSION- Research and extension grants may be made under this section for the purpose of better understanding agricultural impacts to air and water quality and means to address them.

      ‘(30) REVENUE AND INSURANCE TOOLS RESEARCH AND EXTENSION- Research and extension grants may be made under this section for the purposes of better understanding the impact of revenue and insurance tools on farm income.

      ‘(31) AGROTOURISM RESEARCH AND EXTENSION- Research and extension grants may be made under this section for the purpose of better understanding the economic, environmental, and food systems impacts of agrotourism.

      ‘(32) HARVESTING PRODUCTIVITY FOR FRUITS AND VEGETABLES- Research and extension grants may be made under this section for the purpose of improving harvesting productivity for fruits and vegetables (including citrus), including the development of mechanical harvesting technologies and effective, economical, and safe abscission compounds.

      ‘(33) NITROGEN-FIXATION BY PLANTS- Research and extension grants may be made under this section for the purpose of enhancing the nitrogen-fixing ability and efficiency of legumes, developing new varieties of legumes that fix nitrogen more efficiently, and developing new varieties of other commercially important crops that potentially are able to fix nitrogen.

      ‘(34) AGRICULTURAL MARKETING- Extension grants may be made under this section for the purpose of providing education materials, information, and outreach programs regarding commodity and livestock marketing strategies for agricultural producers and for cooperatives and other marketers of any agricultural commodity, including livestock.

      ‘(35) ENVIRONMENT AND PRIVATE LANDS RESEARCH AND EXTENSION- Research and extension grants may be made under this section for the purpose of researching the use of computer models to aid in assessment of best management practices on a watershed basis, working with government, industry, and private landowners to help craft industry-led solutions to identified environmental issues, researching and monitoring water, air, or soil environmental quality to aid in the development of new approaches to local environmental concerns, and working with local, State, and federal officials to help craft effective environmental solutions that respect private property rights and agricultural production realities.

      ‘(36) LIVESTOCK DISEASE RESEARCH AND EXTENSION- Research and extension grants may be made under this section for the purpose of identifying possible livestock disease threats, educating the public regarding livestock disease threats, training persons to deal with such threats, and conducting related research.

      ‘(37) PLANT GENE EXPRESSION- Research grants may be made under this section for the purpose of plant gene expression research to accelerate the application of basic plant genomic science to the development and testing of new varieties of enhanced food crops, crops that can be used as renewable energy sources, and other alternative uses of agricultural crops.

      ‘(38) ANIMAL INFECTIOUS DISEASES RESEARCH- Research and extension grants may be made under this section for the purpose of developing prevention and control methodologies for animal infectious diseases (including evaluation under field conditions in countries in which an animal disease occurs) such as laboratory tests for quicker detection of infected animals and presence of disease, prevention strategies (including vaccination programs), and rapid diagnostic techniques for animal disease agents considered to be risks for agricultural bioterrorism attack.

      ‘(39) PROGRAM TO COMBAT CHILDHOOD OBESITY- Research and extension grants may be made under this section to institutions of higher education with demonstrated capacity in basic and clinical obesity research, nutrition research, and community health education research to develop and evaluate community-wide strategies that catalyze partnerships between families and health care, education, recreation, mass media, and other community resources to reduce the incidence of childhood obesity.

      ‘(40) INTEGRATED PEST MANAGEMENT- Research and extension grants may be made under this section to coordinate and improve research, education, and outreach on, and implementation on farms of, integrated pest management.

      ‘(41) BEEF CATTLE GENETICS- Research and extension grants for beef cattle genetics evaluation research may be made under this section to consortia of institutions of higher education that have expertise in beef cattle genetic evaluation research and technology and that have been actively involved for at least 20 years in the estimation and prediction of progeny differences for publication and use by seed stock producer breed associations.

      ‘(42) DAIRY PIPELINE CLEANER- Research and extension grants may be made under this section for the purpose of preventing and eliminating the dangers of dairy pipeline cleaner, including development of safer packaging and transfer mechanisms, outlining accident causes and potential prevention measures, and other means of improving efforts to prevent ingestion of dairy pipeline cleaner.

      ‘(43) DEVELOPMENT OF PUBLICLY HELD PLANTS AND ANIMAL VARIETIES- Research and extension grants may be made under this section for the purpose of development of publicly held plants and animal varieties (including germplasm for identity-preserved markets) and genetic resource conservation activities.

      ‘(44) SUGARCANE GENETICS- Research grants may be made under this section for the purpose of maintaining acceptable yields under reduced production inputs, implementing marker-assisted breeding strategies and other basic plant genomic technologies to screen for improved plant resistance to diseases, weeds, and insects toward minimizing pesticide use, enhancing food, fiber and energy production, and developing varieties for maximum performance under prevailing conditions, including management for improved soil and water conservation.’.

    (c) ASSISTIVE TECHNOLOGY PROGRAM FOR FARMERS WITH DISABILITIES- Section 1680(a) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5933(a)) is amended by adding at the end the following new paragraph:

      ‘(6) CONSIDERATION FOR GRANTS FOR NEW PROGRAMS- For each fiscal year that amounts are made available for grants under this subsection, the Secretary may make grants in a manner that ensures that eligible entities who apply for grants, but have not previously received a grant under this subsection, are given full consideration.’.

SEC. 7209. NATIONAL AGRICULTURAL RESEARCH, EXTENSION, AND TEACHING POLICY ACT OF 1977.

    (a) NATIONAL AGRICULTURAL RESEARCH, EXTENSION, EDUCATION, AND ECONOMIC ADVISORY BOARD- 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)(1), by striking ‘30 members’ and inserting ‘31 members’;

      (2) in subsection (b)(3)--

        (A) by redesignating subparagraphs (R) through (DD) as subparagraphs (S) through (EE), respectively; and

        (B) by inserting after subparagraph (Q) the following new subparagraph:

        ‘(R) 1 member representing a non-land grant college or university with a historic commitment to research in the food and agricultural sciences.’;

      (3) in subsection (c)(1), by striking ‘and land-grant colleges and universities’ and inserting ‘, land-grant colleges and universities, and the Committee on Agriculture of the House of Representatives, the Committee on Agriculture, Nutrition, and Forestry of the Senate, the Subcommittee on Agriculture, Rural Development, Food and Drug Administration and Related Agencies of the Committee on Appropriations of the House of Representatives, and the Subcommittee on Agriculture, Rural Development and Related Agencies of the Committee on Appropriations of the Senate’; and

      (4) in subsection (d)(1), inserting ‘consult with any appropriate agencies of the Department of Agriculture and’ after ‘the Advisory Board shall’.

    (b) GRANTS FOR RESEARCH ON PRODUCTION AND MARKETING OF ALCOHOLS AND INDUSTRIAL HYDROCARBONS FROM AGRICULTURAL COMMODITIES AND FOREST PRODUCTS- Section 1419 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3154) is amended--

      (1) in subsection (a)(2), by inserting ‘and animal fats and oils’ after ‘industrial oilseed crops’; and

      (2) in subsection (a)(4), by inserting ‘or triglycerides’ after ‘other industrial hydrocarbons’.

    (c) FAS OVERSEAS INTERN PROGRAM- Section 1458(a) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3291(a)) is amended--

      (1) by striking ‘and’ at the end of paragraph (8);

      (2) by striking the period at the end of paragraph (9) and inserting ‘; and’; and

      (3) by adding at the end the following new paragraph:

      ‘(10) establish a program, to be coordinated by the Cooperative State Research, Education, and Extension Service and the Foreign Agricultural Service, to place interns from United States colleges and universities at Foreign Agricultural Service field offices overseas.’.

    (d) RANGELAND RESEARCH GRANTS- Section 1480 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3333) is amended to read as follows:

‘SEC. 1480. RANGELAND RESEARCH GRANTS.

    ‘(a) IN GENERAL- The Secretary may make grants to--

      ‘(1) land-grant colleges and universities, State agricultural experiment stations, and colleges, universities, and Federal laboratories having a demonstrable capacity in rangeland research, as determined by the Secretary, to carry out rangeland research; and

      ‘(2) the Joe Skeen Institute for Rangeland Restoration for the purposes of facilitating and expanding ongoing State-Federal range management, animal husbandry, and agricultural research, education, and extension programs to meet the targeted, emerging, and future needs of western United States rangelands and associated natural resources.

    ‘(b) MATCHING REQUIREMENTS-

      ‘(1) IN GENERAL- Except as provided in paragraph (2), this grant program shall be based on a matching formula of 50 percent Federal and 50 percent non-Federal funding.

      ‘(2) EXCEPTION- Paragraph (1) shall not apply to a grant to a Federal laboratory or a grant under subsection (a)(2).’.

SEC. 7210. BIOTECHNOLOGY RISK ASSESSMENT RESEARCH.

    Section 1668 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5921) is amended to read as follows:

‘SEC. 1668. BIOTECHNOLOGY RISK ASSESSMENT RESEARCH.

    ‘(a) PURPOSE- It is the purpose of this section--

      ‘(1) to authorize and support environmental assessment research to help identify and analyze environmental effects of biotechnology; and

      ‘(2) to authorize research to help regulators develop long-term policies concerning the introduction of such technology.

    ‘(b) GRANT PROGRAM- The Secretary of Agriculture shall establish a grant program within the Cooperative State Research, Education, and Extension Service and the Agricultural Research Service to provide the necessary funding for environmental assessment research concerning the introduction of genetically engineered animals, plants, and microorganisms into the environment.

    ‘(c) RESEARCH PRIORITIES- The following types of research shall be given priority for funding:

      ‘(1) Research designed to identify and develop appropriate management practices to minimize physical and biological risks associated with genetically engineered animals, plants, and microorganisms.

      ‘(2) Research designed to develop methods to monitor the dispersal of genetically engineered animals, plants, and microorganisms.

      ‘(3) Research designed to further existing knowledge with respect to the characteristics, rates, and methods of gene transfer that may occur between genetically engineered animals, plants, and microorganisms and related wild and agricultural organisms.

      ‘(4) Environmental assessment research designed to provide analysis which compares the relative impacts of animals, plants, and microorganisms modified through genetic engineering to other types of production systems.

      ‘(5) Other areas of research designed to further the purposes of this section.

    ‘(d) ELIGIBILITY REQUIREMENTS- Grants under this section shall be--

      ‘(1) made on the basis of the quality of the proposed research project; and

      ‘(2) available to any public or private research or educational institution or organization.

    ‘(e) CONSULTATION- In considering specific areas of research for funding under this section, the Secretary of Agriculture shall consult with the Administrator of the Animal and Plant Health Inspection Service and the National Agricultural Research, Extension, Education, and Economics Advisory Board.

    ‘(f) PROGRAM COORDINATION- The Secretary of Agriculture shall coordinate research funded under this section with the Office of Research and Development of the Environmental Protection Agency in order to avoid duplication of research activities.

    ‘(g) AUTHORIZATION OF APPROPRIATIONS-

      ‘(1) IN GENERAL- There are authorized to be appropriated such sums as necessary to carry out this section.

      ‘(2) WITHHOLDINGS FROM BIOTECHNOLOGY OUTLAYS- The Secretary of Agriculture shall withhold from outlays of the Department of Agriculture for research on biotechnology, as defined and determined by the Secretary, at least 2 percent of such amount for the purpose of making grants under this section for research on biotechnology risk assessment.

      ‘(3) APPLICATION OF FUNDS- Funds made available under this subsection shall be applied, to the maximum extent practicable, to risk assessment research on all categories identified in subsection (c).’.

SEC. 7211. COMPETITIVE, SPECIAL, AND FACILITIES RESEARCH GRANTS.

    Section 2(b)(2) of the Competitive, Special, and Facilities Research Grant Act (7 U.S.C. 450i(b)(2)) is amended by striking ‘in--’ and inserting the following: ‘in the areas described in subparagraphs (A) through (F). Such needs shall be determined by the Secretary, in consultation with the National Agricultural Research, Extension, Education, and Economics Advisory Board, not later than July 1 of each fiscal year for the purposes of the following fiscal year.’.

SEC. 7212. MATCHING FUNDS REQUIREMENT FOR RESEARCH AND EXTENSION ACTIVITIES OF 1890 INSTITUTIONS.

    Section 1449 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3222d) is amended--

      (1) by amending subsection (c) to read as follows:

    ‘(c) MATCHING FORMULA- Notwithstanding any other provision of this subtitle, for each of fiscal years 2003 through 2007, the State shall provide matching funds from non-Federal sources. Such matching funds shall be for an amount equal to not less than--

      ‘(1) 60 percent of the formula funds to be distributed to the eligible institution for fiscal year 2003;

      ‘(2) 70 percent of the formula funds to be distributed to the eligible institution for fiscal year 2004;

      ‘(3) 80 percent of the formula funds to be distributed to the eligible institution for fiscal year 2005;

      ‘(4) 90 percent of the formula funds to be distributed to the eligible institution for fiscal year 2006; and

      ‘(5) 100 percent of the formula funds to be distributed to the eligible institution for fiscal year 2007 and each fiscal year thereafter.’; and

      (2) by amending subsection (d) to read as follows:

    ‘(d) WAIVER AUTHORITY- Notwithstanding subsection (f), the Secretary may waive the matching funds requirement under subsection (c) above the 50 percent level for any fiscal year for an eligible institution of a State if the Secretary determines that the State will be unlikely to satisfy the matching requirement.’.

SEC. 7213. MATCHING REQUIREMENTS FOR RESEARCH AND EXTENSION FORMULA FUNDS FOR INSULAR AREA LAND-GRANT INSTITUTIONS.

    (a) EXPERIMENT STATIONS- Section 3(d) of the Hatch Act of 1887 (7 U.S.C. 361c(d)) is amended by striking paragraph (4) and inserting the following:

      ‘(4) EXCEPTION FOR INSULAR AREAS-

        ‘(A) IN GENERAL- Effective beginning for fiscal year 2003, in lieu of the matching funds requirement of paragraph (1), the insular areas of the Commonwealth of Puerto Rico, Guam, and the Virgin Islands of the United States shall provide matching funds from non-Federal sources in an amount equal to not less than 50 percent of the formula funds distributed by the Secretary to each of the insular areas, respectively, under this section.

        ‘(B) WAIVERS- The Secretary may waive the matching fund requirement of subparagraph (A) for any fiscal year if the Secretary determines that the government of the insular area will be unlikely to meet the matching requirement for the fiscal year.’.

    (b) COOPERATIVE AGRICULTURAL EXTENSION- Section 3(e) of the Smith-Lever Act (7 U.S.C. 343(e)) is amended by striking paragraph (4) and inserting the following:

      ‘(4) EXCEPTION FOR INSULAR AREAS-

        ‘(A) IN GENERAL- Effective beginning for fiscal year 2003, in lieu of the matching funds requirement of paragraph (1), the insular areas of the Commonwealth of Puerto Rico, Guam, and the Virgin Islands of the United States shall provide matching funds from non-Federal sources in an amount equal to not less than 50 percent of the formula funds distributed by the Secretary to each of the insular areas, respectively, under this section.

        ‘(B) WAIVERS- The Secretary may waive the matching fund requirement of subparagraph (A) for any fiscal year if the Secretary determines that the government of the insular area will be unlikely to meet the matching requirement for the fiscal year.’.

SEC. 7214. DEFINITION OF FOOD AND AGRICULTURAL SCIENCES.

    Section 2(3) of the Research Facilities Act (7 U.S.C. 390(2)(3)) is amended to read as follows:

      ‘(3) FOOD AND AGRICULTURAL SCIENCES- The term ‘food and agricultural sciences’ has the meaning given that term in section 1404(8) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103(8)).’.

SEC. 7215. FEDERAL EXTENSION SERVICE.

    Section 3(b)(3) of the Smith-Lever Act (7 U.S.C. 343(b)(3)) is amended--

      (1) by striking ‘$5,000,000’ and inserting ‘such sums as are necessary’; and

      (2) by adding after the first sentence the following new sentence: ‘The balance of any annual funds provided under the preceding sentence for a fiscal year that remains unexpended at the end of that fiscal year shall remain available without fiscal year limitation.’.

SEC. 7216. POLICY RESEARCH CENTERS.

    Section 1419A(c)(3) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3155(c)(3)) is amended by striking ‘collect and analyze’ and inserting ‘collect, analyze, and disseminate’.

SEC. 7217. AVAILABILITY OF COMPETITIVE GRANT FUNDS.

    The National Agricultural Research, Extension, and Teaching Policy Act of 1977 is amended by inserting after section 1469 (7 U.S.C. 3315) the following:

‘SEC. 1469A. AVAILABILITY OF COMPETITIVE GRANT FUNDS.

    ‘Except as otherwise provided by law, funds made available to the Secretary to carry out a competitive agricultural research, education, or extension grant program under this or any other Act shall be available for obligation for a 2-year period beginning on October 1 of the fiscal year for which the funds are made available.’.

SEC. 7218. ORGANIC AGRICULTURE RESEARCH AND EXTENSION INITIATIVE.

    Section 1672B of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5925b) is amended--

      (1) in subsection (a)--

        (A) in paragraph (1), by inserting ‘, breeding,’ after ‘production’;

        (B) in paragraph (2), by striking ‘and’ at the end;

        (C) in paragraph (3), by striking the period at the end and inserting a semicolon; and

        (D) by adding at the end the following:

      ‘(4) determining desirable traits for organic commodities;

      ‘(5) identifying marketing and policy constraints on the expansion of organic agriculture; and

      ‘(6) conducting advanced on-farm research and development that emphasizes observation of, experimentation with, and innovation for working organic farms, including research relating to production and marketing and to socioeconomic conditions.’; and

      (2) by amending subsection (e) to read as follows:

    ‘(e) FUNDING- On October 1, 2003, and each October 1 thereafter through October 1, 2007, out of any funds in the Treasury not otherwise appropriated, the Secretary of the Treasury shall transfer $3,000,000 to the Secretary of Agriculture for this section.’.

SEC. 7219. SENIOR SCIENTIFIC RESEARCH SERVICE.

    Subtitle B of title VI of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7651 et seq.) is amended by adding at the end the following:

‘SEC. 620. SENIOR SCIENTIFIC RESEARCH SERVICE.

    ‘(a) IN GENERAL- There is established in the Department of Agriculture the Senior Scientific Research Service (referred to in this section as the ‘Service’).

    ‘(b) MEMBERS-

      ‘(1) IN GENERAL- Subject to paragraphs (2) through (4), the Secretary shall appoint the members of the Service.

      ‘(2) QUALIFICATIONS- To be eligible for appointment to the Service, an individual shall--

        ‘(A) have conducted outstanding research in the field of agriculture or forestry;

        ‘(B) have earned a doctoral level degree at an institution of higher education (as defined in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001)); and

        ‘(C) meet qualification standards prescribed by the Director of the Office of Personnel Management for appointment to a position at level GS-15 of the General Schedule.

      ‘(3) NUMBER- Not more than 100 individuals may serve as members of the Service at any 1 time.

      ‘(4) OTHER REQUIREMENTS-

        ‘(A) IN GENERAL- Subject to subparagraph (B) and subsection (d)(2), the Secretary may appoint and employ a member of the Service without regard to--

          ‘(i) the provisions of title 5, United States Code, governing appointments in the competitive service;

          ‘(ii) the provisions of subchapter I of chapter 35 of title 5, United States Code, relating to retention preference;

          ‘(iii) the provisions of chapter 43 of title 5, United States Code, relating to performance appraisal and performance actions;

          ‘(iv) the provisions of chapter 51 and subchapter III of chapter 53 of title 5, United States Code, relating to classification and General Schedule pay rates; and

          ‘(v) the provisions of chapter 75 of title 5, United States Code, relating to adverse actions.

        ‘(B) EXCEPTION- A member of the Service appointed and employed by the Secretary under subparagraph (A) shall have the same right of appeal to the Merit Systems Protection Board and the same right to file a complaint with the Office of Special Counsel as an employee appointed to a position at level GS-15 of the General Schedule.

    ‘(c) PERFORMANCE APPRAISAL SYSTEM- The Secretary shall develop a performance appraisal system for members of the Service that is designed to--

      ‘(1) provide for the systematic appraisal of the employment performance of the members; and

      ‘(2) encourage excellence in employment performance by the members.

    ‘(d) COMPENSATION-

      ‘(1) IN GENERAL- Subject to paragraph (2), the Secretary shall determine the compensation of members of the Service.

      ‘(2) LIMITATIONS- The rate of pay for a member of the Service shall--

        ‘(A) not be less than the minimum rate payable for a position at level GS-15 of the General Schedule; and

        ‘(B) not be more than the rate payable for a position at level I of the Executive Schedule, unless the rate is approved by the President under section 5377(d)(2) of title 5, United States Code.

    ‘(e) RETIREMENT CONTRIBUTIONS-

      ‘(1) IN GENERAL- On the request of a member of the Service who was an employee of an institution of higher education (as defined in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001)) immediately prior to appointment as a member of the Service and who retains the right to continue to make contributions to the retirement system of the institution, the Secretary may contribute an amount not to exceed 10 percent of the basic pay of the member to the retirement system of the institution on behalf of the member.

      ‘(2) FEDERAL RETIREMENT SYSTEM-

        ‘(A) IN GENERAL- Subject to subparagraph (B), a member for whom a contribution is made under paragraph (1) shall not, as a result of serving as a member of the Service, be covered by, or earn service credit under, chapter 83 or 84 of title 5, United States Code.

        ‘(B) ANNUAL LEAVE- Service of a member of the Service described in subparagraph (A) shall be creditable for determining years of service under section 6303(a) of title 5, United States Code.

    ‘(f) INVOLUNTARY SEPARATION-

      ‘(1) IN GENERAL- Subject to paragraph (2) and notwithstanding the provisions of title 5, United States Code, governing appointment in the competitive service, in the case of an individual who is separated from the Service involuntarily and without cause--

        ‘(A) the Secretary may appoint the individual to a position in the competitive civil service at level GS-15 of the General Schedule; and

        ‘(B) the appointment shall be a career appointment.

      ‘(2) EXCEPTED CIVIL SERVICE- In the case of an individual described in paragraph (1) who immediately prior to appointment as a member of the Service was not a career appointee in the civil service or the Senior Executive Service, the appointment of the individual under paragraph (1)--

        ‘(A) shall be to the excepted civil service; and

        ‘(B) may not exceed a period of 2 years.’.

SEC. 7220. TERMINATION OF CERTAIN SCHEDULE A APPOINTMENTS.

    (a) TERMINATION- Not later than January 31, 2003, the Secretary of Agriculture shall terminate each appointment listed as an excepted position under schedule A of the General Schedule made by the Secretary to the Federal civil service of an individual who holds dual government appointments, and who carries out agricultural extension work in a program at a college or university eligible to receive funds, under--

      (1) the Smith-Lever Act (7 U.S.C. 341 et seq.);

      (2) section 1444 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3221); or

      (3) section 208(e) of the District of Columbia Public Postsecondary Education Reorganization Act (88 Stat. 1428).

    (b) CONTINUATION OF CERTAIN FEDERAL BENEFITS-

      (1) IN GENERAL- Notwithstanding title 5, United States Code, and subject to paragraph (2), an individual described in subsection (a), during the period the individual is employed in an agricultural extension program described in subsection (a) without a break in service, shall continue to--

        (A) be eligible to participate, to the same extent that the individual was eligible to participate (on the day before the date of enactment of this Act), in--

          (i) the Federal Employee Health Benefits Program;

          (ii) the Federal Employee Group Life Insurance Program;

          (iii) the Civil Service Retirement System;

          (iv) the Federal Employee Retirement System;

          (v) the Thrift Savings Plan; and

          (vi) the Federal Long Term Care Insurance Program; and

        (B) receive Federal Civil Service employment credit to the same extent that the individual was receiving such credit on the day before the date of enactment of this Act.

      (2) LIMITATIONS- An individual may continue to be eligible for the benefits described in paragraph (1) if--

        (A) in the case of an individual who remains employed in the agricultural extension program described in subsection (a) on the date of enactment of this Act, the employing college or university continues to fulfill the administrative and financial responsibilities (including making agency contributions) associated with providing those benefits, as determined by the Secretary of Agriculture; and

        (B) in the case of an individual who changes employment to a second college or university described in subsection (a)--

          (i) the individual continues to work in an agricultural extension program described in subsection (a), as determined by the Secretary of Agriculture;

          (ii) the second college or university--

            (I) fulfills the administrative and financial responsibilities (including making agency contributions) associated with providing those benefits, as determined by the Secretary of Agriculture; and

            (II) within 1 year before the date of the employment of the individual, had employed a different individual described in subsection (a) who had performed the same duties of employment; and

          (iii) the individual was eligible for those benefits on the day before the date of enactment of this Act.

SEC. 7221. BIOSECURITY PLANNING AND RESPONSE PROGRAMS.

    (a) BIOSECURITY- The National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3101 et seq.) is amended by adding at the end the following:

‘Subtitle N--Biosecurity

‘SEC. 1484. SPECIAL AUTHORIZATION FOR BIOSECURITY PLANNING AND RESPONSE.

    ‘(a) AUTHORIZATION OF APPROPRIATIONS- In addition to amounts for agricultural research, extension, and education under this Act, there are authorized to be appropriated for agricultural research, education, and extension activities for biosecurity planning and response such sums as are necessary for each of fiscal years 2002 through 2007.

    ‘(b) USE OF FUNDS- Using any authority available to the Secretary, the Secretary shall use funds made available under this section to carry out agricultural research, education, and extension activities (including through competitive grants) for the following:

      ‘(1) To reduce the vulnerability of the United States food and agricultural system to chemical or biological attack.

      ‘(2) To continue partnerships with institutions of higher education and other institutions to help form stable, long-term programs to enhance the biosecurity of the United States, including the coordination of the development, implementation, and enhancement of diverse capabilities for addressing threats to the Nation’s agricultural economy and food supply with special emphasis on planning, training, outreach, and research activities related to vulnerability analyses, incident response, and detection and prevention technologies.

      ‘(3) To make competitive grants to universities and qualified research institutions for research on counterbioterrorism.

      ‘(4) To counter or otherwise respond to chemical or biological attack.

‘SEC. 1485. AGRICULTURE RESEARCH FACILITY EXPANSION AND SECURITY UPGRADES.

    ‘(a) IN GENERAL- To enhance the security of agriculture in the United States against threats posed by bioterrorism, the Secretary shall make expansion or security upgrade grants on a competitive basis to colleges and universities (as defined in section 1404(4)).

    ‘(b) LIMITATION ON GRANTS- Grants to a recipient under this section shall not exceed $10,000,000 in any fiscal year.

    ‘(c) REQUIREMENTS FOR GRANTS- The Secretary shall make a grant under this section only if the grant applicant provides satisfactory assurances to the Secretary that--

      ‘(1) sufficient funds are available to pay the non-Federal share of the cost of the proposed expansion or security upgrades; and

      ‘(2) the proposed expansion or security upgrades meet such reasonable qualifications as may be established by the Secretary with respect to biosafety and biosecurity requirements necessary to protect facility staff, members of the public, and the food supply.

    ‘(d) ADDITIONAL REQUIREMENTS FOR GRANTS FOR FACILITY EXPANSION- The Secretary shall make a grant under this section for the expansion, renovation, remodeling, or alteration (collectively referred to in this section as ‘expansion’) of a facility only if the grant applicant provides such assurances as the Secretary determines to be satisfactory to ensure the following:

      ‘(1) For not less than 20 years after the grant is awarded, the facility shall be used for the purposes of the research for which the facility was expanded, as described in the grant application.

      ‘(2) Sufficient funds will be available, as of the date of completion of the expansion, for the effective use of the facility for the purposes of the research for which the facility was expanded.

      ‘(3) The proposed expansion--

        ‘(A) will increase the capability of the applicant to conduct research for which the facility was expanded; or

        ‘(B) is necessary to improve the quality of the research of the applicant.

    ‘(e) AMOUNT OF GRANT- The amount of a grant awarded under this section shall be determined by the Secretary.

    ‘(f) FEDERAL SHARE- The Federal share of the cost of any expansion or security upgrade carried out using funds from a grant provided under this section shall not exceed 50 percent.

    ‘(g) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this section such sums as are necessary for each fiscal year.’.

    (b) SENSE OF CONGRESS ON INCREASING CAPACITY FOR RESEARCH ON BIOSECURITY AND ANIMAL AND PLANT HEALTH DISEASES- It is the sense of Congress that funding for the Agricultural Research Service, the Animal and Plant Health Inspection Service, and other agencies of the Department of Agriculture with responsibilities for biosecurity should be increased as necessary to improve the capacity of the agencies to conduct research and analysis of, and respond to, bioterrorism and animal and plant diseases.

SEC. 7222. INDIRECT COSTS FOR SMALL BUSINESS INNOVATION RESEARCH GRANTS.

    Section 1462 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3310) is amended--

      (1) by inserting ‘(a) IN GENERAL- ’ before ‘Except’; and

      (2) by adding at the end the following:

    ‘(b) EXCEPTION- Subsection (a) shall not apply to a grant awarded competitively under section 9 of the Small Business Act (15 U.S.C. 638).’.

SEC. 7223. CARBON CYCLE RESEARCH.

    Section 221 of the Agricultural Risk Protection Act of 2000 (Public Law 106-224; 114 Stat. 407), as amended by section 9009 of this Act, is amended--

      (1) in subsection (a), by striking ‘Of the amount’ and all that follows through ‘to provide’ and inserting ‘To the extent funds are made available for this purpose, the Secretary shall provide’;

      (2) in subsection (f), by striking ‘under subsection (a)’ and inserting ‘for this section’; and

      (3) by adding at the end the following new subsection:

    ‘(g) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated for fiscal years 2002 through 2007 such sums as may be necessary to carry out this section.’.

Subtitle C--Repeal of Certain Activities and Authorities

SEC. 7301. FOOD SAFETY RESEARCH INFORMATION OFFICE AND NATIONAL CONFERENCE.

    (a) REPEAL- Subsections (b) and (c) of section 615 of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7654(b) and (c)) are repealed.

    (b) CONFORMING AMENDMENTS-

      (1) GENERALLY- Section 615 of such Act is amended--

        (A) in the section heading, by striking ‘and national conference’;

        (B) by striking ‘(a) FOOD SAFETY RESEARCH INFORMATION OFFICE- ’;

        (C) by redesignating paragraphs (1), (2), and (3) as subsections (a), (b), and (c), respectively, and moving the margins 2 ems to the left;

        (D) in subsection (b) (as so redesignated), by redesignating subparagraphs (A) and (B) as paragraphs (1) and (2), respectively, and moving the margins 2 ems to the left; and

        (E) in subsection (c) (as so redesignated), by striking ‘this subsection’ and inserting ‘this section’.

      (2) TABLE OF SECTIONS- The table of sections for such Act is amended by striking ‘and National Conference’ in the item relating to section 615.

SEC. 7302. REIMBURSEMENT OF EXPENSES UNDER SHEEP PROMOTION, RESEARCH, AND INFORMATION ACT OF 1994.

    Section 617 of the Agricultural Research, Extension, and Education Reform Act of 1998 (Public Law 105-185; 112 Stat. 607) is repealed.

SEC. 7303. MARKET EXPANSION RESEARCH.

    Section 1436 of the Food Security Act of 1985 (7 U.S.C. 1632) is repealed.

SEC. 7304. NATIONAL ADVISORY BOARD ON AGRICULTURAL WEATHER.

    (a) REPEAL- Section 1639 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5853) is repealed.

    (b) CONFORMING AMENDMENT- Section 1640(b) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5854(b)) is amended by striking ‘take into’ and all that follows through ‘Weather and’.

SEC. 7305. AGRICULTURAL INFORMATION EXCHANGE WITH IRELAND.

    Section 1420 of the National Agricultural Research, Extension and Teaching Policy Act Amendments of 1985 (Public Law 99-198; 99 Stat. 1551) is repealed.

SEC. 7306. PESTICIDE RESISTANCE STUDY.

    Section 1437 of the National Agricultural Research, Extension, and Teaching Policy Act Amendments of 1985 (Public Law 99-198; 99 Stat. 1558) is repealed.

SEC. 7307. EXPANSION OF EDUCATION STUDY.

    Section 1438 of the National Agricultural Research, Extension, and Teaching Policy Act Amendments of 1985 (Public Law 99-198; 99 Stat. 1559) is repealed.

SEC. 7308. TASK FORCE ON 10-YEAR STRATEGIC PLAN FOR AGRICULTURAL RESEARCH FACILITIES.

    (a) REPEAL- Section 4 of the Research Facilities Act (7 U.S.C. 390b) is repealed.

    (b) CONFORMING AMENDMENT- Section 2 of such Act (7 U.S.C. 390) is amended by striking paragraph (5).

Subtitle D--New Authorities

SEC. 7401. SUBTITLE DEFINITIONS.

    In this subtitle:

      (1) DEPARTMENT- The term ‘Department’ means the Department of Agriculture.

      (2) SECRETARY- The term ‘Secretary’ means the Secretary of Agriculture.

SEC. 7402. RESEARCH EQUIPMENT GRANTS.

    The National Agricultural Research, Extension, and Teaching Policy Act of 1977 is amended by inserting after section 1462 (7 U.S.C. 3310) the following:

‘SEC. 1462A. RESEARCH EQUIPMENT GRANTS.

    ‘(a) IN GENERAL- The Secretary may make competitive grants for the acquisition of special purpose scientific research equipment for use in the food and agricultural sciences programs of eligible institutions described in subsection (b).

    ‘(b) ELIGIBLE INSTITUTIONS- The Secretary may make a grant under this section to--

      ‘(1) a college or university; or

      ‘(2) a State cooperative institution.

    ‘(c) MAXIMUM AMOUNT- The amount of a grant made to an eligible institution under this section may not exceed $500,000.

    ‘(d) PROHIBITION ON CHARGE OF EQUIPMENT AS INDIRECT COSTS- The cost of acquisition or depreciation of equipment purchased with a grant under this section shall not be--

      ‘(1) charged as an indirect cost against another Federal grant; or

      ‘(2) included as part of the indirect cost pool for purposes of calculating the indirect cost rate of an eligible institution.

    ‘(e) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this section such sums as may be necessary for each of fiscal years 2002 through 2007.’.

SEC. 7403. JOINT REQUESTS FOR PROPOSALS.

    (a) PURPOSES- The purposes of this section are--

      (1) to reduce the duplication of administrative functions relating to grant awards and administration among Federal agencies conducting similar types of research, education, and extension programs;

      (2) to maximize the use of peer review resources in research, education, and extension programs; and

      (3) to reduce the burden on potential recipients that may offer similar proposals to receive competitive grants under different Federal programs in overlapping subject areas.

    (b) AUTHORITY- The National Agricultural Research, Extension, and Teaching Policy Act of 1977 is amended by inserting after section 1473A (7 U.S.C. 3319a) the following:

‘SEC. 1473B. JOINT REQUESTS FOR PROPOSALS.

    ‘(a) IN GENERAL- In carrying out any competitive agricultural research, education, or extension grant program authorized under this or any other Act, the Secretary may cooperate with 1 or more other Federal agencies (including the National Science Foundation) in issuing joint requests for proposals, awarding grants, and administering grants, for similar or related research, education, or extension projects or activities.

    ‘(b) ADMINISTRATION-

      ‘(1) SECRETARY- The Secretary may delegate authority to issue requests for proposals, make grant awards, or administer grants, in whole or in part, to a cooperating Federal agency.

      ‘(2) COOPERATING FEDERAL AGENCY- The cooperating Federal agency may delegate to the Secretary authority to issue requests for proposals, make grant awards, or administer grants, in whole or in part.

    ‘(c) REGULATIONS- The Secretary and a cooperating Federal agency may agree to make applicable to recipients of grants--

      ‘(1) the post-award grant administration regulations applicable to recipients of grants from the Secretary; or

      ‘(2) the post-award grant administration regulations applicable to recipients of grants from the cooperating Federal agency.

    ‘(d) JOINT PEER REVIEW PANELS- Subject to section 1413B, the Secretary and a cooperating Federal agency may establish joint peer review panels for the purpose of evaluating grant proposals.’.

SEC. 7404. REVIEW OF AGRICULTURAL RESEARCH SERVICE.

    (a) IN GENERAL- Not later than 90 days after the date of enactment of this Act, the Secretary shall establish a task force to--

      (1) conduct a review of the Agricultural Research Service; and

      (2) evaluate the merits of establishing one or more National Institutes focused on disciplines important to the progress of food and agricultural science.

    (b) MEMBERSHIP-

      (1) IN GENERAL- The Task Force shall consist of 8 members, appointed by the Secretary, that--

        (A) have a broad-based background in plant, animal, and agricultural sciences research, food, nutrition, biotechnology, crop production methods, environmental science, or related disciplines; and

        (B) are familiar with the role and infrastructure used to conduct Federal and private research, including--

          (i) the Agricultural Research Service;

          (ii) the National Institutes of Health;

          (iii) the National Science Foundation;

          (iv) the National Aeronautics and Space Administration;

          (v) the Department of Energy laboratory system; or

          (vi) the Cooperative State Research, Education, and Extension Service.

      (2) PRIVATE SECTOR- Of the members appointed under paragraph (1), the Secretary shall appoint at least 6 members that are members of the private sector or come from institutions of higher education.

      (3) PLANT AND AGRICULTURAL SCIENCES RESEARCH- Of the members appointed under paragraph (1), the Secretary shall appoint at least 3 members that have an extensive background and preeminence in the field of plant, animal, and agricultural sciences research.

      (4) CHAIRPERSON- Of the members appointed under paragraph (1), the Secretary shall designate a Chairperson that has significant leadership experience in educational and research institutions and indepth knowledge of the research enterprises of the United States.

      (5) CONSULTATION- Before appointing members of the Task Force under this subsection, the Secretary shall consult with the National Academy of Sciences and the Office of Science and Technology Policy.

    (c) DUTIES- The Task Force shall--

      (1) conduct a review of the purpose, efficiency, effectiveness, and impact on agricultural research of the Agricultural Research Service;

      (2) conduct a review and evaluation of the merits of establishing one or more National Institutes (such as National Institutes for Plant and Agricultural Sciences) focused on disciplines important to the progress of food and agricultural sciences, and, if establishment of one or more National Institutes is recommended, provide further recommendations to the Secretary, including the structure for establishing each Institute, the multistate area location of each Institute, and the amount of funding necessary to establish each Institute; and

      (3) submit the reports required by subsection (d).

    (d) REPORTS- Not later than 12 months after the date of enactment of this Act, the Task Force shall submit to the Committee on Agriculture of the House of Representatives, the Committee on Agriculture, Nutrition, and Forestry of the Senate, and the Secretary--

      (1) a report on the review and evaluation required under subsection (c)(1); and

      (2) a report on the review and evaluation required under subsection (c)(2).

    (e) FUNDING- The Secretary shall use to carry out this section not more than 0.1 percent of the amount of appropriations available to the Agricultural Research Service for fiscal year 2003.

SEC. 7405. BEGINNING FARMER AND RANCHER DEVELOPMENT PROGRAM.

    (a) DEFINITION OF BEGINNING FARMER OR RANCHER- In this section, the term ‘beginning farmer or rancher’ means a person that--

      (1)(A) has not operated a farm or ranch; or

      (B) has operated a farm or ranch for not more than 10 years; and

      (2) meets such other criteria as the Secretary may establish.

    (b) PROGRAM- The Secretary shall establish a beginning farmer and rancher development program to provide training, education, outreach, and technical assistance initiatives for beginning farmers or ranchers.

    (c) GRANTS-

      (1) IN GENERAL- In carrying out this section, the Secretary shall make competitive grants to support new and established local and regional training, education, outreach, and technical assistance initiatives for beginning farmers or ranchers, including programs and services (as appropriate) relating to--

        (A) mentoring, apprenticeships, and internships;

        (B) resources and referral;

        (C) assisting beginning farmers or ranchers in acquiring land from retiring farmers and ranchers;

        (D) innovative farm and ranch transfer strategies;

        (E) entrepreneurship and business training;

        (F) model land leasing contracts;

        (G) financial management training;

        (H) whole farm planning;

        (I) conservation assistance;

        (J) risk management education;

        (K) diversification and marketing strategies;

        (L) curriculum development;

        (M) understanding the impact of concentration and globalization;

        (N) basic livestock and crop farming practices;

        (O) the acquisition and management of agricultural credit;

        (P) environmental compliance;

        (Q) information processing; and

        (R) other similar subject areas of use to beginning farmers or ranchers.

      (2) ELIGIBILITY- To be eligible to receive a grant under this subsection, the recipient shall be a collaborative State, tribal, local, or regionally-based network or partnership of public or private entities, which may include--

        (A) a State cooperative extension service;

        (B) a Federal, State, or tribal agency;

        (C) a community-based and nongovernmental organization;

        (D) a college or university (including an institution awarding an associate’s degree) or foundation maintained by a college or university; or

        (E) any other appropriate partner, as determined by the Secretary.

      (3) TERM OF GRANT- The term of a grant under this subsection shall not exceed 3 years.

      (4) MATCHING REQUIREMENT- To be eligible to receive a grant under this subsection, a recipient shall provide a match in the form of cash or in-kind contributions in an amount equal to 25 percent of the funds provided by the grant.

      (5) SET-ASIDE- Not less than 25 percent of funds used to carry out this subsection for a fiscal year shall be used to support programs and services that address the needs of--

        (A) limited resource beginning farmers or ranchers (as defined by the Secretary);

        (B) socially disadvantaged beginning farmers or ranchers (as defined in section 355(e) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2003(e)); and

        (C) farmworkers desiring to become farmers or ranchers.

      (6) PROHIBITION- A grant made under this subsection may not be used for the planning, repair, rehabilitation, acquisition, or construction of a building or facility.

      (7) ADMINISTRATIVE COSTS- The Secretary shall use not more than 4 percent of the funds made available to carry out this subsection for administrative costs incurred by the Secretary in carrying out this section.

    (d) EDUCATION TEAMS-

      (1) IN GENERAL- In carrying out this section, the Secretary shall establish beginning farmer and rancher education teams to develop curricula and conduct educational programs and workshops for beginning farmers or ranchers in diverse geographical areas of the United States.

      (2) CURRICULUM- In promoting the development of curricula, the Secretary shall, to the maximum extent practicable, include modules tailored to specific audiences of beginning farmers or ranchers, based on crop or regional diversity.

      (3) COMPOSITION- In establishing an education team for a specific program or workshop, the Secretary shall, to the maximum extent practicable--

        (A) obtain the short-term services of specialists with knowledge and expertise in programs serving beginning farmers or ranchers; and

        (B) use officers and employees of the Department with direct experience in programs of the Department that may be taught as part of the curriculum for the program or workshop.

      (4) COOPERATION-

        (A) IN GENERAL- In carrying out this subsection, the Secretary shall cooperate, to the maximum extent practicable, with--

          (i) State cooperative extension services;

          (ii) Federal and State agencies;

          (iii) community-based and nongovernmental organizations;

          (iv) colleges and universities (including an institution awarding an associate’s degree) or foundations maintained by a college or university; and

          (v) other appropriate partners, as determined by the Secretary.

        (B) COOPERATIVE AGREEMENT- Notwithstanding chapter 63 of title 31, United States Code, the Secretary may enter into a cooperative agreement to reflect the terms of any cooperation under subparagraph (A).

    (e) CURRICULUM AND TRAINING CLEARINGHOUSE- The Secretary shall establish an online clearinghouse that makes available to beginning farmers or ranchers education curricula and training materials and programs, which may include online courses for direct use by beginning farmers or ranchers.

    (f) STAKEHOLDER INPUT- In carrying out this section, the Secretary shall seek stakeholder input from--

      (1) beginning farmers and ranchers;

      (2) national, State, tribal, and local organizations and other persons with expertise in operating beginning farmer and rancher programs; and

      (3) the Advisory Committee on Beginning Farmers and Ranchers established under section 5 of the Agricultural Credit Improvement Act of 1992 (7 U.S.C. 1929 note; Public Law 102-554).

    (g) PARTICIPATION BY OTHER FARMERS AND RANCHERS- Nothing in this section prohibits the Secretary from allowing farmers and ranchers who are not beginning farmers or ranchers from participating in programs authorized under this section to the extent that the Secretary determines that such participation is appropriate and will not detract from the primary purpose of educating beginning farmers and ranchers.

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

SEC. 7406. SENSE OF CONGRESS REGARDING DOUBLING OF FUNDING FOR AGRICULTURAL RESEARCH.

    It is the sense of Congress that--

      (1) Federal funding for food and agricultural research has been essentially constant for 2 decades, putting at risk the scientific base on which food and agricultural advances have been made;

      (2) the resulting increase in the relative proportion of private sector, industry investments in food and agricultural research has led to questions about the independence and objectivity of research and outreach conducted by the Federal and university research sectors; and

      (3) funding for food and agricultural research should be at least doubled over the next 5 fiscal years--

        (A) to restore the balance between public and private sector funding for food and agricultural research; and

        (B) to maintain the scientific base on which food and agricultural advances are made.

SEC. 7407. ORGANIC PRODUCTION AND MARKET DATA INITIATIVES.

    The Secretary shall ensure that segregated data on the production and marketing of organic agricultural products is included in the ongoing baseline of data collection regarding agricultural production and marketing.

SEC. 7408. INTERNATIONAL ORGANIC RESEARCH COLLABORATION.

    The Secretary, acting through the Agricultural Research Service (including the National Agricultural Library) and the Economic Research Service, shall facilitate access by research and extension professionals, farmers, and other interested persons in the United States to, and the use by those persons of, organic research conducted outside the United States.

SEC. 7409. REPORT ON PRODUCERS AND HANDLERS OF ORGANIC AGRICULTURAL PRODUCTS.

    Not later than 1 year after funds are made available to carry out this section, the Secretary shall submit to Congress a report that--

      (1) describes--

        (A) the extent to which producers and handlers of organic agricultural products are contributing to research and promotion programs of the Department;

        (B) the extent to which producers and handlers of organic agricultural products are surveyed for ideas for research and promotion;

        (C) ways in which the programs reflect the contributions made by producers and handlers of organic agricultural products and directly benefit the producers and handlers; and

        (D) the implementation of initiatives that directly benefit organic producers and handlers; and

      (2) evaluates industry and other proposals for improving the treatment of certified organic agricultural products under Federal marketing orders, including proposals to target additional resources for research and promotion of organic products and to differentiate between certified organic and other products in new or existing volume limitations or other orderly marketing requirements.

SEC. 7410. REPORT ON GENETICALLY MODIFIED PEST-PROTECTED PLANTS.

    It is the sense of Congress that, not later than 1 year after the date of enactment of this Act, the Secretary should--

      (1) review the recommendations of the Committee on Genetically Modified Pest-Protected Plants of the Board on Agriculture and Natural Resources of the National Research Council made during 2000 and the Committee on Environmental Impacts Associated with Commercialization of Transgenic Plants made during 2002, concerning food safety, ecological research, monitoring needs for transgenic crops with plant incorporated protectants, and the environmental effects of transgenic plants; and

      (2) 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 actions taken to implement those recommendations by agencies within the Department, including agencies that develop or implement programs or objectives relating to marketing, regulation, food safety, research, education, or economics.

SEC. 7411. STUDY OF NUTRIENT BANKING.

    (a) IN GENERAL- The Secretary may conduct a study to evaluate nutrient banking for the purpose of enhancing the health and viability of watersheds in areas with large concentrations of animal producing units.

    (b) COMPONENTS- In conducting any study under subsection (a), the Secretary shall evaluate the costs, needs, and means by which litter may be collected and distributed outside the applicable watershed to reduce potential point source and nonpoint source phosphorous pollution.

    (c) REPORT- 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 any study conducted under subsection (a).

SEC. 7412. GRANTS FOR YOUTH ORGANIZATIONS.

    Title IV of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7621 et seq.) (as amended by section 7206(e)) is amended by adding at the end the following:

‘SEC. 410. GRANTS FOR YOUTH ORGANIZATIONS.

    ‘(a) IN GENERAL- The Secretary, acting through the Administrator of the Cooperative State Research, Education, and Extension Service, shall make grants to the Girl Scouts of the United States of America, the Boy Scouts of America, the National 4-H Council, and the National FFA Organization to establish pilot projects to expand the programs carried out by the organizations in rural areas and small towns (including, with respect to the National 4-H Council, activities provided for in Public Law 107-19 (115 Stat. 153)).

    ‘(b) FUNDING- Of the funds of the Commodity Credit Corporation, the Secretary shall make available $8,000,000 for fiscal year 2002, which shall remain available until expended.

    ‘(c) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this section such sums as are necessary for each of fiscal years 2003 through 2007.’.

Subtitle E--Miscellaneous

SEC. 7501. RESIDENT INSTRUCTION AND DISTANCE EDUCATION AT INSTITUTIONS OF HIGHER EDUCATION IN UNITED STATES INSULAR AREAS.

    (a) PURPOSE- It is the purpose of this subtitle to promote and strengthen higher education in the food and agricultural sciences at institutions of higher education (as defined in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a))) that have demonstrable capacity to carry out teaching and extension programs in food and agricultural sciences and that are located in the insular areas of the Commonwealth of Puerto Rico, the Virgin Islands of the United States, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Federated States of Micronesia, the Republic of the Marshall Islands, or the Republic of Palau by formulating and administering programs to enhance teaching programs in agriculture, natural resources, forestry, veterinary medicine, home economics, and disciplines closely allied to the food and agriculture production and delivery systems.

SEC. 7502. 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) by redesignating paragraphs (10) through (17) as paragraphs (11) through (18), respectively;

      (2) by inserting after paragraph (9) the following:

      ‘(10) INSULAR AREA- The term ‘insular area’ means--

        ‘(A) the Commonwealth of Puerto Rico;

        ‘(B) Guam;

        ‘(C) American Samoa;

        ‘(D) the Commonwealth of the Northern Mariana Islands;

        ‘(E) the Federated States of Micronesia;

        ‘(F) the Republic of the Marshall Islands;

        ‘(G) the Republic of Palau; and

        ‘(H) the Virgin Islands of the United States.’; and

      (3) by striking paragraph (13) (as so redesignated) and inserting the following:

      ‘(13) STATE- The term ‘State’ means--

        ‘(A) a State;

        ‘(B) the District of Columbia; and

        ‘(C) any insular area.’.

    (b) EFFECT OF AMENDMENTS- The amendments made by subsection (a) shall not affect any basis for distribution of funds by formula (in effect on the date of enactment of this Act) to--

      (1) the Federated States of Micronesia;

      (2) the Republic of the Marshall Islands; or

      (3) the Republic of Palau.

SEC. 7503. RESIDENT INSTRUCTION AND DISTANCE EDUCATION GRANTS PROGRAM FOR INSULAR AREA INSTITUTIONS OF HIGHER EDUCATION.

    The National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3101 et seq.) is amended by adding at the end the following:

‘Subtitle O--Institutions of Higher Education in Insular Areas

‘SEC. 1489. DEFINITION.

    ‘For the purposes of this subtitle, the term ‘eligible institution’ means an institution of higher education (as defined in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)) in an insular area that has demonstrable capacity to carry out teaching and extension programs in the food and agricultural sciences.

‘SEC. 1490. DISTANCE EDUCATION GRANTS FOR INSULAR AREAS.

    ‘(a) IN GENERAL- The Secretary may make competitive or noncompetitive grants to eligible institutions in insular areas to strengthen the capacity of such institutions to carry out distance food and agricultural education programs using digital network technologies.

    ‘(b) USE- Grants made under this section shall be used--

      ‘(1) to acquire the equipment, instrumentation, networking capability, hardware and software, digital network technology, and infrastructure necessary to teach students and teachers about technology in the classroom;

      ‘(2) to develop and provide educational services (including faculty development) to prepare students or faculty seeking a degree or certificate that is approved by the State or a regional accrediting body recognized by the Secretary of Education;

      ‘(3) to provide teacher education, library and media specialist training, and preschool and teacher aid certification to individuals who seek to acquire or enhance technology skills in order to use technology in the classroom or instructional process;

      ‘(4) to implement a joint project to provide education regarding technology in the classroom with a local educational agency, community-based organization, national nonprofit organization, or business; or

      ‘(5) to provide leadership development to administrators, board members, and faculty of eligible institutions with institutional responsibility for technology education.

    ‘(c) LIMITATION ON USE OF GRANT FUNDS- Funds provided under this section shall not be used for the planning, acquisition, construction, rehabilitation, or repair of a building or facility.

    ‘(d) ADMINISTRATION OF PROGRAM- The Secretary may carry out this section in a manner that recognizes the different needs and opportunities for eligible institutions in the Atlantic and Pacific Oceans.

    ‘(e) MATCHING REQUIREMENT-

      ‘(1) IN GENERAL- The Secretary may establish a requirement that an eligible institution receiving a grant under this section shall provide matching funds from non-Federal sources in an amount equal to not less than 50 percent of the grant.

      ‘(2) WAIVERS- If the Secretary establishes a matching requirement under paragraph (1), the Secretary shall retain an option to waive the requirement for an eligible institution for any fiscal year if the Secretary determines that the institution will be unlikely to meet the matching requirement for the fiscal year.

    ‘(f) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this section such sums as may be necessary for each of fiscal years 2002 through 2007.

‘SEC. 1491. RESIDENT INSTRUCTION GRANTS FOR INSULAR AREAS.

    ‘(a) IN GENERAL- The Secretary of Agriculture shall make competitive grants to eligible institutions to--

      ‘(1) strengthen institutional educational capacities, including libraries, curriculum, faculty, scientific instrumentation, instruction delivery systems, and student recruitment and retention, in order to respond to identified State, regional, national, or international education needs in the food and agricultural sciences;

      ‘(2) attract and support undergraduate and graduate students in order to educate them in identified areas of national need in the food and agriculture sciences;

      ‘(3) facilitate cooperative initiatives between two or more insular area eligible institutions, or between those institutions and units of State Government or organizations in the private sector, to maximize the development and use of resources such as faculty, facilities, and equipment to improve food and agricultural sciences teaching programs; and

      ‘(4) conduct undergraduate scholarship programs to assist in meeting national needs for training food and agricultural scientists.

    ‘(b) GRANT REQUIREMENTS-

      ‘(1) The Secretary of Agriculture shall ensure that each eligible institution, prior to receiving grant funds under subsection (a), shall have a significant demonstrable commitment to higher education programs in the food and agricultural sciences and to each specific subject area for which grant funds under this section are to be used.

      ‘(2) The Secretary of Agriculture may require that any grant awarded under this section contain provisions that require funds to be targeted to meet the needs identified in section 1402.

    ‘(e) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated such sums as are necessary for each of the fiscal years 2002 through 2007 to carry out this section.’.

SEC. 7504. DECLARATION OF EXTRAORDINARY EMERGENCY AND RESULTING AUTHORITIES.

    (a) REVIEW OF PAYMENT OF COMPENSATION- Section 415(e) of the Plant Protection Act (7 U.S.C. 7715(e)) is amended by inserting before the final period the following: ‘or a review of longer than 60 days by any officer or employee of the Federal Government other than the Secretary or the designee of the Secretary’.

    (b) REVIEW OF CERTAIN DECISIONS- Section 442 of the Plant Protection Act (7 U.S.C. 7772) is amended by adding at the end the following new subsection:

    ‘(c) SECRETARIAL DISCRETION- The action of any officer, employee, or agent of the Secretary in carrying out this Act, including determining the amount of and making any payment authorized to be made under this title, shall not be subject to a review of longer than 60 days by any officer or employee of the Federal Government other than the Secretary or the designee of the Secretary.’.

    (c) METHYL BROMIDE- The Plant Protection Act (7 U.S.C. 7701 et seq.) is amended by inserting after section 418 the following new section:

‘SEC. 419. METHYL BROMIDE.

    ‘(a) IN GENERAL- The Secretary, upon request of State, local, or tribal authorities, shall determine whether methyl bromide treatments or applications required by State, local, or tribal authorities to prevent the introduction, establishment, or spread of plant pests (including diseases) or noxious weeds should be authorized as an official control or official requirement. The Secretary shall not authorize such treatments or applications unless the Secretary finds there is no other registered, effective, and economically feasible alternative available.

    ‘(b) METHYL BROMIDE ALTERNATIVE- The Secretary, in consultation with State, local and tribal authorities, shall establish a program to identify alternatives to methyl bromide for treatment and control of plant pests and weeds. For uses where no registered, effective, economically feasible alternatives available can currently be identified, the Secretary shall initiate research programs to develop alternative methods of control and treatment.

    ‘(c) REGISTRY- Not later than 180 days after the date of enactment of this section, the Secretary shall publish, and thereafter maintain, a registry of State, local, and tribal requirements authorized by the Secretary under this section.

    ‘(d) ADMINISTRATION-

      ‘(1) TIMELINE FOR DETERMINATION- Upon the promulgation of regulations to carry out this section, the Secretary shall make the determination required by subsection (a) not later than 90 days after receiving the request for such a determination.

      ‘(2) CONSTRUCTION- Nothing in this section shall be construed to alter or modify the authority of the Administrator of the Environmental Protection Agency or to provide any authority to the Secretary of Agriculture under the Clean Air Act or regulations promulgated under the Clean Air Act.’.

SEC. 7505. AGRICULTURAL BIOTECHNOLOGY RESEARCH AND DEVELOPMENT FOR DEVELOPING COUNTRIES.

    Title IV of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7621 et seq.) is amended by adding at the end the following:

‘SEC. 411. AGRICULTURAL BIOTECHNOLOGY RESEARCH AND DEVELOPMENT FOR DEVELOPING COUNTRIES.

    ‘(a) ELIGIBLE ENTITY- In this section, the term ‘eligible entity’ means--

        ‘(A) an institution of higher education that offers a curriculum in agriculture or the biosciences;

        ‘(B) a nonprofit organization; or

        ‘(C) a consortium of for-profit institutions and agricultural research institutions.

    ‘(b) GRANT PROGRAM-

      ‘(1) IN GENERAL- The Secretary (acting through the Foreign Agricultural Service) shall establish and administer a program to make competitive grants to eligible entities to develop agricultural biotechnology for developing countries.

      ‘(2) USE OF FUNDS- Funds provided to an eligible entity under this section may be used for projects that use biotechnology to--

        ‘(A) enhance the nutritional content of agricultural products that can be grown in developing countries;

        ‘(B) increase the yield and safety of agricultural products that can be grown in developing countries;

        ‘(C) increase the yield of agricultural products that are drought- and stress-resistant and that can be grown in developing countries;

        ‘(D) extend the growing range of crops that can be grown in developing countries;

        ‘(E) enhance the shelf-life of fruits and vegetables grown in developing countries;

        ‘(F) develop environmentally sustainable agricultural products that can be grown in developing countries; and

        ‘(G) develop vaccines to immunize against life-threatening illnesses and other medications that can be administered by consuming genetically-engineered agricultural products.

    ‘(c) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated such sums as may be necessary to carry out this section for each of fiscal years 2002 through 2007.’.

SEC. 7506. LAND ACQUISITION AUTHORITY, NATIONAL PEANUT RESEARCH LABORATORY, DAWSON, GEORGIA.

    The limitation on the authority of the Agricultural Research Service to acquire lands by purchase using funds appropriated under the heading AGRICULTURAL RESEARCH SERVICE-SALARIES AND EXPENSES in the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2002 (Public Law 107-76; 115 Stat. 708), shall not apply to the purchase of land for a research farm for the National Peanut Research Laboratory in Dawson, Georgia, for which a lease with an option to purchase has been entered into before the date of enactment of this Act.

TITLE VIII--FORESTRY

Subtitle A--Cooperative Forestry Assistance Act of 1978

SEC. 8001. REPEAL OF FORESTRY INCENTIVES PROGRAM AND STEWARDSHIP INCENTIVE PROGRAM.

    (a) REPEAL- The Cooperative Forestry Assistance Act of 1978 is amended by striking section 4 (16 U.S.C. 2103) and section 6 (16 U.S.C. 2103b).

    (b) USE OF REMAINING FUNDS- Notwithstanding the amendment made by subsection (a), the Secretary of Agriculture may use funds appropriated for fiscal year 2002 for the forestry incentives program or the stewardship incentive program, but not expended before the date of enactment of this Act, to carry out sections 4 and 6 of the Cooperative Forestry Assistance Act of 1978, as in effect on the date before the date of enactment of this Act.

SEC. 8002. ESTABLISHMENT OF FOREST LAND ENHANCEMENT PROGRAM.

    (a) PURPOSES- The purposes of this section are--

      (1) to strengthen the commitment of the Secretary of Agriculture to sustainable forest management to enhance the productivity of timber, fish and wildlife habitat, soil and water quality, wetland, recreational resources, and aesthetic values of forest land; and

      (2) to establish a coordinated and cooperative Federal, State, and local sustainable forestry program for the establishment, management, maintenance, enhancement, and restoration of forests on nonindustrial private forest land.

    (b) FOREST LAND ENHANCEMENT PROGRAM- The Cooperative Forestry Assistance Act of 1978 is amended by inserting after section 3 (16 U.S.C. 2102) the following:

‘SEC. 4. FOREST LAND ENHANCEMENT PROGRAM.

    ‘(a) ESTABLISHMENT-

      ‘(1) IN GENERAL- The Secretary of Agriculture shall establish a forest land enhancement program--

        ‘(A) to provide financial assistance to State foresters; and

        ‘(B) to encourage the long-term sustainability of nonindustrial private forest lands in the United States by assisting the owners of nonindustrial private forest lands, through State foresters, in more actively managing the nonindustrial private forest lands and related resources of those owners through the use of State, Federal, and private sector resource management expertise, financial assistance, and educational programs.

      ‘(2) COORDINATION AND CONSULTATION- The Secretary, acting through State foresters, shall implement the program--

        ‘(A) in coordination with the State Forest Stewardship Coordinating Committees; and

        ‘(B) in consultation with other Federal, State, and local natural resource management agencies, institutions of higher education, and a broad range of private sector interests.

    ‘(b) PROGRAM OBJECTIVES- In implementing the program, the Secretary shall target resources to achieve the following objectives:

      ‘(1) Investing in practices to establish, restore, protect, manage, maintain, and enhance the health and productivity of the nonindustrial private forest lands in the United States for timber, habitat for flora and fauna, soil, water, and air quality, wetlands, and riparian buffers.

      ‘(2) Ensuring that afforestation, reforestation, improvement of poorly stocked stands, timber stand improvement, practices necessary to improve seedling growth and survival, and growth enhancement practices occur where needed to enhance and sustain the long-term productivity of timber and nontimber forest resources to help meet future public demand for all forest resources and provide environmental benefits.

      ‘(3) Reducing the risks and helping restore, recover, and mitigate the damage to forests caused by fire, insects, invasive species, disease, and damaging weather.

      ‘(4) Increasing and enhancing carbon sequestration opportunities.

      ‘(5) Enhancing implementation of agroforestry practices.

      ‘(6) Maintaining and enhancing the forest landbase and leverage