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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 Feb 14, 2002 (Public Print).

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 …


HR 2646 EAS/PP

In the Senate of the United States,

February 13, 2002.

Resolved, That the bill from the House of Representatives (H.R. 2646) entitled ‘An Act to provide for the continuation of agricultural programs through fiscal year 2011.’, do pass with the following

AMENDMENT:

Strike out all after the enacting clause and insert:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) SHORT TITLE- This Act may be cited as the ‘Agriculture, Conservation, and Rural Enhancement Act of 2002’.

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

TITLE I--COMMODITY PROGRAMS

      Sec. 101. Definitions.

Subtitle A--Direct and Counter-Cyclical Payments

      Sec. 111. Direct and counter-cyclical payments.

      Sec. 112. Violations of contracts.

      Sec. 113. Planting flexibility.

      Sec. 114. Pilot program for farm counter-cyclical savings accounts.

Subtitle B--Nonrecourse Marketing Assistance Loans and Loan Deficiency Payments

      Sec. 121. Nonrecourse marketing assistance loans and loan deficiency payments.

      Sec. 122. Eligible production.

      Sec. 123. Loan rates.

      Sec. 124. Term of loans.

      Sec. 125. Repayment of loans.

      Sec. 126. Loan deficiency payments.

      Sec. 127. Payments in lieu of loan deficiency payments for grazed acreage.

      Sec. 128. Special marketing loan provisions for upland cotton.

Subtitle C--Other Commodities

Chapter 1--Dairy

      Sec. 131. Milk price support program.

      Sec. 132. National dairy program.

      Sec. 133. Dairy export incentive and dairy indemnity programs.

      Sec. 134. Fluid milk promotion.

      Sec. 135. Dairy product mandatory reporting.

      Sec. 136. Funding of dairy promotion and research program.

      Sec. 137. Dairy studies.

Chapter 2--Sugar

      Sec. 141. Sugar program.

      Sec. 142. Storage facility loans.

      Sec. 143. Flexible marketing allotments for sugar.

      Sec. 144. Reallocation of sugar quota.

Chapter 3--Peanuts

      Sec. 151. Peanut program.

      Sec. 152. Termination of marketing quotas for peanuts and compensation to peanut quota holders.

Subtitle D--Administration

      Sec. 161. Marketing orders for caneberries.

      Sec. 162. Reserve stock level.

      Sec. 163. Farm reconstitutions.

      Sec. 164. Adjustment authority related to Uruguay Round compliance.

      Sec. 165. Suspension of permanent price support authority.

      Sec. 166. Commodity purchases.

      Sec. 167. Hard white wheat incentive payments.

      Sec. 168. Livestock assistance program.

      Sec. 169. Payment limitations; nutrition and commodity programs.

      Sec. 170. Restriction of commodity and crop insurance payments, loans, and benefits to previously cropped land; food stamp program for certain qualified aliens.

      Sec. 171. Reduction of commodity benefits to improve nutrition assistance.

      Sec. 172. Reports on equitable relief and misaction-misinformation requests.

      Sec. 173. Estimates of net farm income.

      Sec. 174. Commodity Credit Corporation inventory.

      Sec. 175. Agricultural producers supplemental payments and assistance.

Subtitle E--Payment Limitation Commission

      Sec. 181. Establishment of Commission.

      Sec. 182. Duties.

      Sec. 183. Powers.

      Sec. 184. Commission personnel matters.

      Sec. 185. Federal Advisory Committee Act.

      Sec. 186. Funding.

      Sec. 187. Termination of Commission.

Subtitle F--Emergency Agriculture Assistance

      Sec. 191. Income loss assistance.

      Sec. 192. Livestock assistance program.

      Sec. 193. Market loss assistance for apple producers.

      Sec. 194. Commodity Credit Corporation.

      Sec. 195. Administrative expenses.

      Sec. 196. Regulations.

      Sec. 197. Emergency requirement.

TITLE II--CONSERVATION

Subtitle A--Conservation Security

      Sec. 201. Conservation security program.

      Sec. 202. Funding.

      Sec. 203. Partnerships and cooperation.

      Sec. 204. Administrative requirements for conservation programs.

      Sec. 205. Reform and assessment of conservation programs.

      Sec. 206. Conservation security program regulations.

      Sec. 207. Conforming amendments.

Subtitle B--Program Extensions

      Sec. 211. Comprehensive conservation enhancement program.

      Sec. 212. Conservation reserve program.

      Sec. 213. Environmental quality incentives program.

      Sec. 214. Wetlands reserve program.

      Sec. 215. Water conservation.

      Sec. 216. Resource conservation and development program.

      Sec. 217. Wildlife habitat incentive program.

      Sec. 218. Farmland protection program.

      Sec. 219. Grassland reserve program.

      Sec. 220. State technical committees.

      Sec. 221. Use of symbols, slogans, and logos.

Subtitle C--Organic Farming

      Sec. 231. Organic Agriculture Research Trust Fund.

      Sec. 232. Establishment of National Organic Research Endowment Institute.

Subtitle D--Regional Equity

      Sec. 241. Allocation of conservation funds by State.

Subtitle E--Miscellaneous

      Sec. 261. Cranberry acreage reserve program.

      Sec. 262. Klamath Basin.

TITLE III--TRADE

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

      Sec. 301. United States policy.

      Sec. 302. Provision of agricultural commodities.

      Sec. 303. Generation and use of currencies by private voluntary organizations and cooperatives.

      Sec. 304. Levels of assistance.

      Sec. 305. Food Aid Consultative Group.

      Sec. 306. Maximum level of expenditures.

      Sec. 307. Administration.

      Sec. 308. Assistance for stockpiling and rapid transportation, delivery, and distribution of shelf-stable prepackaged foods.

      Sec. 309. Pilot emergency relief program to provide live lamb to Afghanistan.

      Sec. 310. Sale procedure.

      Sec. 311. Prepositioning.

      Sec. 312. Expiration date.

      Sec. 313. Micronutrient fortification program.

      Sec. 314. John Ogonowski Farmer-to-Farmer Program.

Subtitle B--Agricultural Trade Act of 1978

      Sec. 321. Export credit guarantee program.

      Sec. 322. Market access program.

      Sec. 323. Export enhancement program.

      Sec. 324. Foreign market development cooperator program.

      Sec. 325. Food for progress and education programs.

      Sec. 326. Exporter assistance initiative.

Subtitle C--Miscellaneous Agricultural Trade Provisions

      Sec. 331. Bill Emerson Humanitarian Trust.

      Sec. 332. Emerging markets.

      Sec. 333. Biotechnology and agricultural trade program.

      Sec. 334. Surplus commodities for developing or friendly countries.

      Sec. 335. Agricultural trade with Cuba.

      Sec. 336. Sense of Congress concerning agricultural trade.

      Sec. 337. Report on use of perishable commodities.

      Sec. 338. Sense of Senate concerning foreign assistance programs.

TITLE IV--NUTRITION PROGRAMS

      Sec. 401. Short title.

Subtitle A--Food Stamp Program

      Sec. 411. Encouragement of payment of child support.

      Sec. 412. Simplified definition of income.

      Sec. 413. Increase in benefits to households with children.

      Sec. 414. Simplified determination of housing costs.

      Sec. 415. Simplified utility allowance.

      Sec. 416. Simplified procedure for determination of earned income.

      Sec. 417. Simplified determination of deductions.

      Sec. 418. Simplified definition of resources.

      Sec. 419. Alternative issuance systems in disasters.

      Sec. 420. State option to reduce reporting requirements.

      Sec. 421. Benefits for adults without dependents.

      Sec. 422. Preservation of access to electronic benefits.

      Sec. 423. Cost neutrality for electronic benefit transfer systems.

      Sec. 424. Alternative procedures for residents of certain group facilities.

      Sec. 425. Redemption of benefits through group living arrangements.

      Sec. 426. Availability of food stamp program applications on the Internet.

      Sec. 427. Simplified determinations of continuing eligibility.

      Sec. 428. Clearinghouse for successful nutrition education efforts.

      Sec. 429. Transitional food stamps for families moving from welfare.

      Sec. 430. Delivery to retailers of notices of adverse action.

      Sec. 431. Reform of quality control system.

      Sec. 432. Improvement of calculation of State performance measures.

      Sec. 433. Bonuses for States that demonstrate high performance.

      Sec. 434. Employment and training program.

      Sec. 435. Reauthorization of food stamp program and food distribution program on Indian reservations.

      Sec. 436. Coordination of program information efforts.

      Sec. 437. Expanded grant authority.

      Sec. 438. Access and outreach pilot projects.

      Sec. 439. Consolidated block grants and administrative funds.

      Sec. 440. Assistance for community food projects.

      Sec. 441. Availability of commodities for the emergency food assistance program.

      Sec. 442. Use of approved food safety technology.

      Sec. 443. Innovative programs for addressing common community problems.

      Sec. 444. Report on use of electronic benefit transfer systems.

      Sec. 445. Vitamin and mineral supplements.

Subtitle B--Miscellaneous Provisions

      Sec. 451. Reauthorization of commodity programs.

      Sec. 452. Partial restoration of benefits to legal immigrants.

      Sec. 453. Commodities for school lunch programs.

      Sec. 454. Eligibility for free and reduced price meals.

      Sec. 455. Eligibility for assistance under the special supplemental nutrition program for women, infants, and children.

      Sec. 456. Report on conversion of WIC program into an individual entitlement program.

      Sec. 457. Commodity donations.

      Sec. 458. Purchases of locally produced foods.

      Sec. 459. Seniors farmers’ market nutrition program.

      Sec. 460. Farmers’ market nutrition program.

      Sec. 461. Fruit and vegetable pilot program.

      Sec. 462. Congressional Hunger Fellows Program.

      Sec. 463. Nutrition information and awareness pilot program.

      Sec. 464. Effective date.

TITLE V--CREDIT

Subtitle A--Farm Ownership Loans

      Sec. 501. Direct loans.

      Sec. 502. Financing of bridge loans.

      Sec. 503. Limitations on amount of farm ownership loans.

      Sec. 504. Joint financing arrangements.

      Sec. 505. Guarantee percentage for beginning farmers and ranchers.

      Sec. 506. Guarantee of loans made under State beginning farmer or rancher programs.

      Sec. 507. Down payment loan program.

      Sec. 508. Beginning farmer and rancher contract land sales program.

Subtitle B--Operating Loans

      Sec. 511. Direct loans.

      Sec. 512. Amount of guarantee of loans for tribal farm operations; waiver of limitations for tribal farm operations and other farm operations.

Subtitle C--Administrative Provisions

      Sec. 521. Eligibility of limited liability companies for farm ownership loans, farm operating loans, and emergency loans.

      Sec. 522. Debt settlement.

      Sec. 523. Temporary authority to enter into contracts; private collection agencies.

      Sec. 524. Interest rate options for loans in servicing.

      Sec. 525. Annual review of borrowers.

      Sec. 526. Simplified loan applications.

      Sec. 527. Inventory property.

      Sec. 528. Definitions.

      Sec. 529. Loan authorization levels.

      Sec. 530. Interest rate reduction program.

      Sec. 531. Options for satisfaction of obligation to pay recapture amount for shared appreciation agreements.

      Sec. 532. Waiver of borrower training certification requirement.

      Sec. 533. Annual review of borrowers.

Subtitle D--Farm Credit

      Sec. 541. Repeal of burdensome approval requirements.

      Sec. 542. Banks for cooperatives.

      Sec. 543. Insurance Corporation premiums.

      Sec. 544. Board of Directors of the Federal Agricultural Mortgage Corporation.

Subtitle E--General Provisions

      Sec. 551. Inapplicability of finality rule.

      Sec. 552. Technical amendments.

      Sec. 553. Effective date.

TITLE VI--RURAL DEVELOPMENT

Subtitle A--Empowerment of Rural America

      Sec. 601. National Rural Cooperative and Business Equity Fund.

      Sec. 602. Rural business investment program.

      Sec. 603. Full funding of pending rural development loan and grant applications.

      Sec. 604. Rural Endowment Program.

      Sec. 605. Enhancement of access to broadband service in rural areas.

      Sec. 606. Value-added agricultural product market development grants.

      Sec. 607. National Rural Development Information Clearinghouse.

Subtitle B--National Rural Development Partnership

      Sec. 611. Short title.

      Sec. 612. National Rural Development Partnership.

Subtitle C--Consolidated Farm and Rural Development Act

      Sec. 621. Water or waste disposal grants.

      Sec. 622. Rural business opportunity grants.

      Sec. 623. Rural water and wastewater circuit rider program.

      Sec. 624. Multijurisdictional regional planning organizations.

      Sec. 625. Certified nonprofit organizations sharing expertise.

      Sec. 626. Loan guarantees for certain rural development loans.

      Sec. 627. Rural firefighters and emergency personnel grant program.

      Sec. 628. Tribal college and university essential community facilities.

      Sec. 629. Emergency community water assistance grant program.

      Sec. 630. Water and waste facility grants for Native American tribes.

      Sec. 631. Water systems for rural and native villages in Alaska.

      Sec. 632. Rural business enterprise grants.

      Sec. 633. Rural cooperative development grants.

      Sec. 634. Grants to broadcasting systems.

      Sec. 635. Business and industry loan modifications.

      Sec. 636. Value-added intermediary relending program.

      Sec. 637. Use of rural development loans and grants for other purposes.

      Sec. 638. Simplified application forms for loan guarantees.

      Sec. 639. Definition of rural and rural area.

      Sec. 640. Rural entrepreneurs and microenterprise assistance program.

      Sec. 641. Rural seniors.

      Sec. 642. Children’s day care facilities.

      Sec. 643. Rural telework.

      Sec. 644. Historic barn preservation.

      Sec. 645. Grants for emergency weather radio transmitters.

      Sec. 646. Grants for training farm workers.

      Sec. 647. Delta Regional Authority.

      Sec. 648. SEARCH grants for small communities.

      Sec. 649. Northern Great Plains Regional Authority.

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

      Sec. 651. Alternative Agricultural Research and Commercialization Corporation.

      Sec. 652. Telemedicine and distance learning services in rural areas.

Subtitle E--Rural Electrification Act of 1936

      Sec. 661. Guarantees for bonds and notes issued for electrification or telephone purposes.

      Sec. 662. Expansion of 911 access.

TITLE VII--AGRICULTURAL RESEARCH, EDUCATION, AND EXTENSION AND RELATED MATTERS

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

      Sec. 701. Definitions.

      Sec. 702. National Agricultural Research, Extension, Education, and Economics Advisory Board.

      Sec. 703. Grants and fellowships for food and agricultural sciences education.

      Sec. 704. Competitive research facilities grant program.

      Sec. 705. Grants for research on the production and marketing of alcohols and industrial hydrocarbons from agricultural commodities and forest products.

      Sec. 706. Policy research centers.

      Sec. 707. Human nutrition intervention and health promotion research program.

      Sec. 708. Pilot research program to combine medical and agricultural research.

      Sec. 709. Nutrition education program.

      Sec. 710. Animal health and disease research programs.

      Sec. 711. Research on national or regional problems.

      Sec. 712. Education grants programs for Hispanic-serving institutions.

      Sec. 713. Competitive grants for international agricultural science and education programs.

      Sec. 714. Indirect costs.

      Sec. 715. Research equipment grants.

      Sec. 716. Agricultural research programs.

      Sec. 717. Extension education.

      Sec. 718. Availability of competitive grant funds.

      Sec. 719. Joint requests for proposals.

      Sec. 720. Supplemental and alternative crops.

      Sec. 721. Aquaculture.

      Sec. 722. Rangeland research.

      Sec. 723. Biosecurity planning and response programs.

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

      Sec. 731. National genetic resources program.

      Sec. 732. Biotechnology risk assessment research.

      Sec. 733. Rural electronic commerce extension program.

      Sec. 734. High-priority research and extension initiatives.

      Sec. 735. Nutrient management research and extension initiative.

      Sec. 736. Organic agriculture research and extension initiative.

      Sec. 737. Agricultural telecommunications program.

      Sec. 738. Assistive technology program for farmers with disabilities.

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

      Sec. 741. Initiative for Future Agriculture and Food Systems.

      Sec. 742. Partnerships for high-value agricultural product quality research.

      Sec. 743. Precision agriculture.

      Sec. 744. Biobased products.

      Sec. 745. Thomas Jefferson Initiative for Crop Diversification.

      Sec. 746. Integrated research, education, and extension competitive grants program.

      Sec. 747. Support for research regarding diseases of wheat and barley caused by fusarium graminearum.

      Sec. 748. Bovine Johne’s disease control program.

      Sec. 749. Grants for youth organizations.

      Sec. 750. Agricultural biotechnology research and development for developing countries.

      Sec. 750A. Office of Pest Management Policy.

      Sec. 750B. Senior Scientific Research Service.

Subtitle D--Land-Grant Funding

Chapter 1--1862 Institutions

      Sec. 751. Carryover.

      Sec. 752. Reporting of technology transfer activities.

      Sec. 753. Compliance with multistate and integration requirements.

Chapter 2--1994 Institutions

      Sec. 754. Extension at 1994 institutions.

      Sec. 755. Equity in Educational Land-Grant Status Act of 1994.

      Sec. 756. Eligibility for integrated grants program.

Chapter 3--1890 Institutions

      Sec. 757. Authorization percentages for research and extension formula funds.

      Sec. 758. Carryover.

      Sec. 759. Reporting of technology transfer activities.

      Sec. 760. Grants to upgrade agricultural and food sciences facilities at 1890 land-grant colleges, including Tuskegee University.

      Sec. 761. National research and training virtual centers.

      Sec. 762. Matching funds requirement for research and extension activities.

Chapter 4--Land-grant Institutions

SUBCHAPTER A--GENERAL

      Sec. 771. Priority-setting process.

      Sec. 772. Termination of certain schedule A appointments.

SUBCHAPTER B--LAND-GRANT INSTITUTIONS IN INSULAR AREAS

      Sec. 775. Distance education grants program for insular area land-grant institutions.

      Sec. 776. Matching requirements for research and extension formula funds for insular area land-grant institutions.

Subtitle E--Other Laws

      Sec. 781. Critical agricultural materials.

      Sec. 782. Research facilities.

      Sec. 783. Federal agricultural research facilities.

      Sec. 784. Competitive, special, and facilities research grants.

      Sec. 785. Risk management education for beginning farmers and ranchers.

      Sec. 786. Aquaculture.

      Sec. 787. Carbon cycle research.

Subtitle F--New Authorities

      Sec. 791. Definitions.

      Sec. 792. Regulatory and inspection research.

      Sec. 793. Emergency research transfer authority.

      Sec. 794. Review of Agricultural Research Service.

      Sec. 795. Technology transfer for rural development.

      Sec. 796. Beginning farmer and rancher development program.

      Sec. 797. Sense of Congress regarding doubling of funding for agricultural research.

      Sec. 798. Rural policy research.

      Sec. 798A. Priority for farmers and ranchers participating in conservation programs.

      Sec. 798B. Organic production and market data initiatives.

      Sec. 798C. Organically produced product research and education.

      Sec. 798D. International organic research collaboration.

      Sec. 798E. Report on producers and handlers of organic agricultural products.

TITLE VIII--FORESTRY

      Sec. 801. Office of International Forestry.

      Sec. 802. McIntire-Stennis cooperative forestry research program.

      Sec. 803. Sustainable forestry outreach initiative; renewable resources extension activities.

      Sec. 804. Forestry incentives program.

      Sec. 805. Sustainable forestry cooperative program.

      Sec. 806. Sustainable forest management program.

      Sec. 807. Forest Legacy Program.

      Sec. 808. Forest fire research centers.

      Sec. 809. Wildfire prevention and hazardous fuel purchase program.

      Sec. 810. Chesapeake Bay Watershed Forestry Program.

      Sec. 811. Enhanced community fire protection.

      Sec. 812. Watershed forestry assistance program.

      Sec. 813. Suburban and Community Forestry and Open Space Initiative.

      Sec. 814. General provisions.

      Sec. 815. State forest stewardship coordinating committees.

      Sec. 816. USDA National Agroforestry Center.

      Sec. 817. Office of Tribal Relations.

      Sec. 818. Assistance to tribal governments.

      Sec. 819. Sudden oak death syndrome.

      Sec. 820. Independent investigation of firefighter

      Sec. 821. Adaptive ecosystem restoration of Arizona and New Mexico forests and woodlands.

TITLE IX--ENERGY

      Sec. 901. Findings.

      Sec. 902. Consolidated Farm and Rural Development Act.

      Sec. 903. Biomass Research and Development Act of 2000.

      Sec. 904. Rural Electrification Act of 1936.

      Sec. 905. Carbon sequestration demonstration program.

      Sec. 906. Sense of Congress concerning national renewable fuels standard.

      Sec. 907. Sense of Congress concerning the bioenergy program of the Department of Agriculture.

TITLE X--MISCELLANEOUS

Subtitle A--Country of Origin and Quality Grade Labeling

      Sec. 1001. Country of origin labeling.

      Sec. 1002. Quality grade labeling of imported meat and meat food products.

Subtitle B--Crop Insurance

      Sec. 1011. Equal crop insurance treatment of potatoes and sweet potatoes.

      Sec. 1012. Continuous coverage.

      Sec. 1013. Quality loss adjustment procedures.

      Sec. 1014. Conservation requirements.

Subtitle C--Animal Health Protection

      Sec. 1021. Short title.

      Sec. 1022. Findings.

      Sec. 1023. Definitions.

      Sec. 1024. Restriction on importation or entry.

      Sec. 1025. Exportation.

      Sec. 1026. Interstate movement.

      Sec. 1027. Seizure, quarantine, and disposal.

      Sec. 1028. Inspections, seizures, and warrants.

      Sec. 1029. Detection, control, and eradication of diseases and pests.

      Sec. 1030. Veterinary accreditation program.

      Sec. 1031. Cooperation.

      Sec. 1032. Reimbursable agreements.

      Sec. 1033. Administration and claims.

      Sec. 1034. Penalties.

      Sec. 1035. Enforcement.

      Sec. 1036. Regulations and orders.

      Sec. 1037. Authorization of appropriations.

      Sec. 1038. Repeals and conforming amendments.

Subtitle D--General Provisions

      Sec. 1041. Fees for pesticides.

      Sec. 1042. Pest management in schools.

      Sec. 1043. Prohibition on packers owning, feeding, or controlling livestock.

      Sec. 1044. Packers and stockyards.

      Sec. 1045. Unlawful stockyard practices involving nonambulatory livestock.

      Sec. 1046. Arbitration clauses.

      Sec. 1047. Cotton classification services.

      Sec. 1048. Protection for purchasers of farm products.

      Sec. 1049. Improved standards for the care and treatment of certain animals.

      Sec. 1050. Expansion of State marketing programs.

      Sec. 1051. Definition of animal under the Animal Welfare Act.

      Sec. 1052. Penalties and foreign commerce provisions of the Animal Welfare Act.

      Sec. 1053. Prohibition on interstate movement of animals for animal fighting.

      Sec. 1054. Outreach and assistance for socially disadvantaged farmers and ranchers.

      Sec. 1055. Wild fish and wild shellfish.

      Sec. 1056. Assistant Secretary of Agriculture for Civil Rights.

      Sec. 1057. Transparency and accountability for socially disadvantaged farmers and ranchers; public disclosure requirements for county committee elections.

      Sec. 1058. Animal enterprise terrorism.

      Sec. 1059. Pseudorabies eradication program.

      Sec. 1060. Transportation of poultry and other animals.

      Sec. 1061. Emergency grants to assist low-income migrant and seasonal farmworkers.

      Sec. 1062. Tree assistance program.

      Sec. 1063. Preclearance quarantine inspections.

      Sec. 1064. Emergency loans for seed producers.

      Sec. 1065. National organic certification cost-share program.

      Sec. 1066. Food Safety Commission.

      Sec. 1067. Humane methods of animal slaughter.

      Sec. 1068. Penalties for violations of Plant Protection Act.

      Sec. 1069. Connecticut River Atlantic Salmon Commission.

      Sec. 1070. Bear protection.

      Sec. 1071. Reenactment of family farmer bankruptcy provisions.

      Sec. 1072. Prohibition on packers owning, feeding, or controlling livestock.

      Sec. 1073. Equity and fairness for the promotion of imported Hass avocados.

      Sec. 1074. Sense of the Senate regarding social security surplus funds.

      Sec. 1075. Sense of the Senate on permanent repeal of estate taxes.

      Sec. 1076. Commercial fisheries failure.

      Sec. 1077. Review of state meat inspection programs.

      Sec. 1078. Agricultural research and technology.

      Sec. 1079. Office of Science Technology Policy.

      Sec. 1079A. Operation of agricultural and natural resource programs on tribal trust land.

      Sec. 1079B. Assistance for geographically disadvantaged farmers and ranchers.

      Sec. 1079C. Sense of Senate regarding use of the name ginseng.

      Sec. 1079D. Adjusted gross revenue insurance pilot program.

      Sec. 1079E. Pasteurization.

Subtitle E--Studies and Reports

      Sec. 1081. Report on pouched and canned salmon.

      Sec. 1082. Settlement agreement report.

      Sec. 1083. Report on genetically modified pest-protected plants.

      Sec. 1084. Study of creation of litter bank by University of Arkansas.

      Sec. 1085. Study of feasibility of producer indemnification from Government-caused disasters.

      Sec. 1086. Report on sale and use of pesticides for agricultural uses.

      Sec. 1087. Report on rats, mice, and birds.

      Sec. 1088. Task Force on National Institutes for Plant and Agricultural Sciences.

Subtitle F--Organic Products Promotion

      Sec. 1091. Short title.

      Sec. 1092. Definitions.

      Sec. 1093. Issuance of orders.

      Sec. 1094. Required terms in order.

      Sec. 1095. Permissive terms in order.

      Sec. 1096. Assessments.

      Sec. 1097. Referenda.

      Sec. 1098. Petition and review of orders.

      Sec. 1098A. Enforcement.

      Sec. 1098B. Investigations and power to subpoena.

      Sec. 1098C. Suspension or termination.

      Sec. 1098D. Amendments to orders.

      Sec. 1098E. Effect on other laws.

      Sec. 1098F. Regulations.

      Sec. 1098G. Authorization of appropriations.

Subtitle G--Administration

      Sec. 1099. Regulations.

      Sec. 1099A. Effect of amendments.

      Sec. 1099B. Commodity Credit Corporation funding.

TITLE I--COMMODITY PROGRAMS

SEC. 101. DEFINITIONS.

    Section 102 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7202) is amended to read as follows:

‘SEC. 102. DEFINITIONS.

    ‘In this title:

      ‘(1) AGRICULTURAL ACT OF 1949- Except in section 171, 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(b)(1).

      ‘(2) CONSIDERED PLANTED- The term ‘considered planted’ means any acreage on the farm that--

        ‘(A) producers on a farm were prevented from planting to a crop because of drought, flood, or other natural disaster, or other condition beyond the control of the eligible owners and producers on the farm, as determined by the Secretary; and

        ‘(B) was not planted to another contract commodity (other than a contract commodity produced under an established practice of double cropping).

      ‘(3) CONTRACT- The term ‘contract’ means a contract entered into under subtitle B.

      ‘(4) CONTRACT ACREAGE- The term ‘contract acreage’ means the contract acreage determined under section 111(f).

      ‘(5) CONTRACT COMMODITY- The term ‘contract commodity’ means wheat, corn, grain sorghum, barley, oats, upland cotton, rice, and oilseeds.

      ‘(6) CONTRACT PAYMENT- The term ‘contract payment’ means a payment made under subtitle B pursuant to a contract.

      ‘(7) DEPARTMENT- The term ‘Department’ means the Department of Agriculture.

      ‘(8) 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.

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

      ‘(10) OILSEED- The term ‘oilseed’ means a crop of soybeans, sunflower seed, rapeseed, canola, safflower, flaxseed, mustard seed, and, if designated by the Secretary, other oilseeds.

      ‘(11) PAYMENT YIELD- The term ‘payment yield’ means a payment yield determined under section 111(g).

      ‘(12) PRODUCER-

        ‘(A) IN GENERAL- The term ‘producer’ means an owner, operator, landlord, tenant, or sharecropper that--

          ‘(i) shares in the risk of producing a crop; and

          ‘(ii) is entitled to share in the crop available for marketing from the farm, or would have shared had the crop been produced.

        ‘(B) HYBRID SEED- In determining whether a grower of hybrid seed is a producer, the Secretary shall not take into consideration the existence of a hybrid seed contract.

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

      ‘(14) STATE- The term ‘State’ means--

        ‘(A) a State;

        ‘(B) the District of Columbia;

        ‘(C) the Commonwealth of Puerto Rico; and

        ‘(D) any other territory or possession of the United States.

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

Subtitle A--Direct and Counter-Cyclical Payments

SEC. 111. DIRECT AND COUNTER-CYCLICAL PAYMENTS.

    Sections 111 through 114 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7211 through 7214) are amended to read as follows:

‘SEC. 111. AUTHORIZATION FOR CONTRACTS.

    ‘(a) IN GENERAL- The Secretary shall offer to enter into a contract with an eligible owner or producer described in subsection (b) on a farm containing eligible cropland under which the eligible owner or producer will receive direct payments and counter-cyclical payments under sections 113 and 114, respectively.

    ‘(b) ELIGIBLE OWNERS AND PRODUCERS-

      ‘(1) IN GENERAL- Subject to paragraphs (2) and (3), an owner or producer on a farm shall be eligible to enter into a contract.

      ‘(2) TENANTS-

        ‘(A) SHARE-RENT TENANTS- A producer on eligible cropland that is a tenant with a share-rent lease of the eligible cropland, regardless of the length of the lease, shall be eligible to enter into a contract, if the owner of the eligible cropland enters into the same contract.

        ‘(B) CASH-RENT TENANTS-

          ‘(i) CONTRACTS WITH LONG-TERM LEASES- A producer on eligible cropland that cash rents the eligible cropland under a lease expiring on or after the termination of the contract shall be eligible to enter into a contract.

          ‘(ii) CONTRACTS WITH SHORT-TERM LEASES-

            ‘(I) IN GENERAL- A producer that cash rents the eligible cropland under a lease expiring before the termination of the contract shall be eligible to enter into a contract.

            ‘(II) OWNER’S CONTRACT INTEREST- The owner of the eligible cropland may also enter into the same contract.

            ‘(III) CONSENT OF OWNER- If the producer elects to enroll less than 100 percent of the eligible cropland in the contract, the consent of the owner shall be required for a valid contract.

      ‘(3) CASH-RENT OWNERS-

        ‘(A) IN GENERAL- An owner of eligible cropland that cash rents the eligible cropland under a lease term that expires before the end of 2006 crop year shall be eligible to enter into a contract if the tenant declines to enter into the contract.

        ‘(B) CONTRACT PAYMENTS- In the case of an owner covered by subparagraph (A), the Secretary shall not make contract payments to the owner under the contract until the lease held by the tenant terminates.

    ‘(c) COMPLIANCE WITH CERTAIN REQUIREMENTS- Under the terms of a contract, the owner or producer shall agree, in exchange for annual contract payments--

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

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

      ‘(3) to comply with the planting flexibility requirements of section 118; and

      ‘(4) to use a quantity of land on the farm equal to the contract acreage, for an agricultural or conserving use or related activity, and not for a nonagricultural commercial or industrial use, as determined by the Secretary.

    ‘(d) PROTECTION OF INTERESTS OF CERTAIN PRODUCERS-

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

      ‘(2) SHARING OF PAYMENTS- The Secretary shall provide for the sharing of contract payments among the eligible producers on a farm on a fair and equitable basis.

    ‘(e) ELIGIBLE CROPLAND-

      ‘(1) IN GENERAL- Land shall be considered to be cropland eligible for coverage under a contract only if the land--

        ‘(A) has with respect to a contract commodity--

          ‘(i) contract acreage attributable to the land; and

          ‘(ii) a payment yield; or

        ‘(B) was subject to a conservation reserve contract under section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831) with a term that expired, or was voluntarily terminated, on or after the date of enactment of this paragraph.

      ‘(2) QUANTITY OF ELIGIBLE CROPLAND COVERED BY CONTRACT- An eligible owner or producer may enroll as contract acreage under this subtitle all or a portion of the eligible cropland on the farm.

      ‘(3) VOLUNTARY REDUCTION IN CONTRACT ACREAGE- An eligible owner or producer that enters into a contract may subsequently reduce the quantity of contract acreage covered by the contract.

    ‘(f) CONTRACT ACREAGE-

      ‘(1) IN GENERAL- Subject to subsection (h), for the purpose of making direct payments and counter-cyclical payments to eligible owners and producers on a farm, the Secretary shall provide the eligible owners and producers on the farm with an opportunity to elect 1 of the following methods as the method by which the contract acreages for the 2002 through 2006 crops of all contract commodities for a farm are determined:

        ‘(A) The 4-year average of acreage planted or considered planted to a contract commodity for harvest, grazing, haying, silage, or other similar purposes during each of the 1998 through 2001 crop years.

        ‘(B) The total of--

          ‘(i) the contract acreage (as defined in section 102 (as in effect before the amendment made by section 101 of the Agriculture, Conservation, and Rural Enhancement Act of 2002)) that would have been used by the Secretary to calculate the payment for fiscal year 2002 under such section 102 for the contract commodity on the farm; and

          ‘(ii) the 4-year average determined under subparagraph (A) for each oilseed produced on the farm.

        ‘(C) In the case of land described in section 112(a)(3), land with eligible base, as determined by the Secretary.

      ‘(2) PREVENTION OF EXCESS CONTRACT ACREAGES-

        ‘(A) REQUIRED REDUCTION- If the total of the contract acreages for a farm, together with the acreage described in subparagraph (C), exceeds the actual cropland acreage of the farm, the Secretary shall reduce the quantity of contract acreages for 1 or more contract commodities for the farm or peanut acres as necessary so that the total of the contract acreages and acreage described in subparagraph (C) does not exceed the actual cropland acreage of the farm.

        ‘(B) SELECTION OF ACRES- The Secretary shall give the eligible owners and producers on the farm the opportunity to select the contract acreages or peanut acres against which the reduction will be made.

        ‘(C) OTHER ACREAGE- For purposes of subparagraph (A), the Secretary shall include--

          ‘(i) any peanut acres for the farm under chapter 3 of subtitle D;

          ‘(ii) 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.); and

          ‘(iii) any other acreage on the farm enrolled in a voluntary Federal conservation program under which production of any agricultural commodity is prohibited.

        ‘(D) DOUBLE-CROPPED ACREAGE- In applying subparagraph (A), the Secretary shall take into account additional acreage as a result of an established double-cropping history on a farm, as determined by the Secretary.

    ‘(g) PAYMENT YIELDS-

      ‘(1) IN GENERAL- Subject to paragraph (2) and subsection (h), an eligible owner or producer that has entered into a contract under this subtitle may make a 1-time election to have the payment yield for a payment for each of the 2002 through 2006 crops of all contract commodities for a farm be equal to--

        ‘(A) an amount that is the greater of--

          ‘(i) the average of the yield per harvested acre for the crop of the contract commodity for the farm for the 1998 through 2001 crop years, excluding--

            ‘(I) any crop year for which the producers on the farm did not plant the contract commodity; and

            ‘(II) at the option of the producers on the farm, 1 additional crop year; or

          ‘(ii) the farm program payment yield described in subparagraph (B); or

        ‘(B) the farm program payment yield established for the 1995 crop of a contract 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.

      ‘(2) ASSIGNED YIELDS- In the case of a farm for which yield records are unavailable for a contract commodity (including land of a farm that is devoted to an oilseed under a former conservation reserve contract described in section 112(a)(3)), the Secretary shall establish an appropriate payment yield for the contract commodity on the farm taking in consideration the payment yields applicable to the contract commodity under paragraph (1) for similar farms in the area, taking into consideration the yield election for the farm under subsection (h).

    ‘(h) ELIGIBLE OWNER AND PRODUCER ELECTION OPTIONS-

      ‘(1) IN GENERAL- In making elections under subsections (f) and (g), eligible owners and producers on a farm shall elect to have--

        ‘(A)(i) contract acreage for the farm determined under subsection (f)(1)(A); and

        ‘(ii) payment yields determined under subsection (g)(1)(A); or

        ‘(B)(i) contract acreage for the farm determined under subsection (f)(1)(B); and

        ‘(ii) payment yields determined under--

          ‘(I) in the case of contract commodities other than oilseeds, subsection (g)(1)(B); and

          ‘(II) in the case of oilseeds, subsection (g)(1)(A).

      ‘(2) SINGLE ELECTION; TIME FOR ELECTION-

        ‘(A) SINGLE ELECTION- The eligible owners and producers on a farm shall have 1 opportunity to make the election described in paragraph (1).

        ‘(B) TIME FOR ELECTION- Subject to section 112(a)(3), not later than 180 days after the date of enactment of this subsection, the eligible owners and producers on a farm shall notify the Secretary of the election made by the eligible owners and producers on the farm under paragraph (1).

      ‘(3) EFFECT OF FAILURE TO MAKE ELECTION- If the producers on a farm fail to make the election under paragraph (1), or fail to timely notify the Secretary of the selected option as required by paragraph (2), the eligible owners and producers on the farm shall be deemed to have made the election described in paragraph (1)(B) for the purpose of determining the contract acreages for all contract commodities on the farm.

      ‘(4) APPLICATION OF ELECTION TO ALL CONTRACT COMMODITIES- The election made under paragraph (1) or deemed to be made under paragraph (3) with respect to a farm shall apply to all of the contract commodities produced on the farm.

‘SEC. 112. ELEMENTS OF CONTRACTS.

    ‘(a) TIME FOR CONTRACTING-

      ‘(1) COMMENCEMENT- To the extent practicable, the Secretary shall commence entering into contracts not later than 45 days after the date of enactment of the Agriculture, Conservation, and Rural Enhancement Act of 2002.

      ‘(2) DEADLINE- Except as provided in paragraph (3), the Secretary may not enter into a contract after the date that is 180 days after the date of enactment of that Act.

      ‘(3) CONSERVATION RESERVE LAND-

        ‘(A) IN GENERAL- At the beginning of each fiscal year, the Secretary shall allow an eligible owner or producer on a farm covered by a conservation reserve contract entered into under section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831) that terminated after the date specified in paragraph (2) to enter into or expand a contract to cover the eligible cropland of the farm that was subject to the former conservation reserve contract.

        ‘(B) ELECTION- For the fiscal year and crop year for which a contract acreage adjustment under subparagraph (A) is first made, the eligible owners and producers on the farm shall elect to receive--

          ‘(i) direct payments and counter-cyclical payments under sections 113 and 114, respectively, with respect to the acreage added to the farm under this paragraph; or

          ‘(ii) a prorated payment under the conservation reserve contract.

    ‘(b) DURATION OF CONTRACT-

      ‘(1) BEGINNING DATE- The term of a contract shall begin with--

        ‘(A) the 2002 crop of a contract commodity; or

        ‘(B) in the case of acreage that was subject to a conservation reserve contract described in subsection (a)(3), the date the contract was entered into or expanded to cover the acreage.

      ‘(2) ENDING DATE- Subject to sections 116 and 117, the term of a contract shall extend through the 2006 crop, unless earlier terminated by the eligible owners or producers on a farm.

‘SEC. 113. DIRECT PAYMENTS.

    ‘(a) IN GENERAL- For each of the 2002 through 2006 fiscal years, the Secretary shall make direct payments available to eligible owners and producers on a farm that have entered into a contract to receive payments under this section.

    ‘(b) PAYMENT AMOUNT- The amount of a direct payment to be paid to the eligible owners and producers on a farm for a contract commodity for a fiscal year under this section shall be obtained by multiplying--

      ‘(1) the payment rate for the contract commodity specified in subsection (c);

      ‘(2) the contract acreage attributable to the contract commodity for the farm; and

      ‘(3) the payment yield for the contract commodity for the farm.

    ‘(c) PAYMENT RATE- The payment rates used to make direct payments with respect to contract commodities for a fiscal year under this section are as follows:

      ‘(1) WHEAT- In the case of wheat:

        ‘(A) For each of fiscal years 2002 and 2003, $0.450 per bushel.

        ‘(B) For each of fiscal years 2004 and 2005, $0.225 per bushel.

        ‘(C) For fiscal year 2006, $0.113 per bushel.

      ‘(2) CORN- In the case of corn:

        ‘(A) For each of fiscal years 2002 and 2003, $0.270 per bushel.

        ‘(B) For each of fiscal years 2004 and 2005, $0.135 per bushel.

        ‘(C) For fiscal year 2006, $0.068 per bushel.

      ‘(3) GRAIN SORGHUM- In the case of grain sorghum:

        ‘(A) For the 2002 fiscal year, $0.310 per bushel.

        ‘(B) For the 2003 fiscal year, $0.270 per bushel.

        ‘(C) For each of fiscal years 2004 and 2005, $0.135 per bushel.

        ‘(D) For fiscal year 2006, $0.068 per bushel.

      ‘(4) BARLEY- In the case of barley:

        ‘(A) For each of fiscal years 2002 and 2003, $0.200 per bushel.

        ‘(B) For each of fiscal years 2004 and 2005, $0.100 per bushel.

        ‘(C) For fiscal year 2006, $0.050 per bushel.

      ‘(5) OATS- In the case of oats:

        ‘(A) For each of fiscal years 2002 and 2003, $0.050 per bushel.

        ‘(B) For each of fiscal years 2004 and 2005, $0.025 per bushel.

        ‘(C) For fiscal year 2006, $0.013 per bushel.

      ‘(6) UPLAND COTTON- In the case of upland cotton:

        ‘(A) For each of fiscal years 2002 and 2003, $0.130 per pound.

        ‘(B) For each of fiscal years 2004 and 2005, $0.065 per pound.

        ‘(C) For fiscal year 2006, $0.0325 per pound.

      ‘(7) RICE- In the case of rice:

        ‘(A) For each of fiscal years 2002 and 2003, $2.450 per hundredweight.

        ‘(B) For each of fiscal years 2004 and 2006, $2.40 per hundredweight.

      ‘(8) SOYBEANS- In the case of soybeans:

        ‘(A) For each of fiscal years 2002 and 2003, $0.550 per bushel.

        ‘(B) For each of fiscal years 2004 and 2005, $0.275 per bushel.

        ‘(C) For fiscal year 2006, $0.138 per bushel.

      ‘(9) OILSEEDS (OTHER THAN SOYBEANS)- In the case of oilseeds (other than soybeans):

        ‘(A) For each of fiscal years 2002 and 2003, $0.010 per pound.

        ‘(B) For each of fiscal years 2004 and 2005, $0.005 per pound.

        ‘(C) For fiscal year 2006, $0.0025 per pound.

    ‘(d) TIME FOR PAYMENTS-

      ‘(1) INITIAL PAYMENT- At the option of the eligible owners and producers on a farm, the Secretary shall pay 50 percent of the direct payment for a crop of a contract commodity for the eligible owners and producers on the farm on or after December 1 of the fiscal year, as determined by the Secretary.

      ‘(2) FINAL PAYMENT- The Secretary shall pay the final amount of the direct payment that is payable to the eligible owners and producers on a farm for a contract commodity under subsection (a) (less the amount of any initial payment made to the producers on the farm of the contract commodity under paragraph (1)) not later than September 30 of the fiscal year, as determined by the Secretary.

‘SEC. 114. COUNTER-CYCLICAL PAYMENTS.

    ‘(a) IN GENERAL- For each of the 2002 through 2006 crop years, the Secretary shall make counter-cyclical payments to eligible owners and producers on a farm of each contract commodity that have entered into a contract to receive payments under this section.

    ‘(b) PAYMENT AMOUNT- The amount of the payments made to eligible owners and producers on a farm for a crop of a contract commodity under this section shall equal the amount obtained by multiplying--

      ‘(1) the payment rate for the contract commodity specified in subsection (c);

      ‘(2) the contract acreage attributable to the contract commodity for the farm; and

      ‘(3) the payment yield for the contract commodity for the farm.

    ‘(c) PAYMENT RATES-

      ‘(1) IN GENERAL- The payment rate for a crop of a contract commodity under subsection (b)(1) shall equal the difference between--

        ‘(A) the income protection price for the contract commodity established under paragraph (2); and

        ‘(B) the total of--

          ‘(i) the higher of--

            ‘(I) the average price of the contract commodity during the first 5 months of the marketing year of the contract commodity, as determined by the Secretary; and

            ‘(II) the loan rate for the crop of the contract commodity under section 132; and

          ‘(ii) the direct payment for the contract commodity under section 113 for the fiscal year that precedes the date of a payment under this section.

      ‘(2) INCOME PROTECTION PRICES- The income protection prices for contract commodities under paragraph (1)(A) are as follows:

        ‘(A) Wheat, $3.45 per bushel.

        ‘(B) Corn, $2.35 per bushel.

        ‘(C) Grain sorghum, $2.35 per bushel.

        ‘(D) Barley, $2.20 per bushel.

        ‘(E) Oats, $1.55 per bushel.

        ‘(F) Upland cotton, $0.680 per pound.

        ‘(G) Rice, $9.30 per hundredweight.

        ‘(H) Soybeans, $5.75 per bushel.

        ‘(I) Oilseeds (other than soybeans), $0.105 per pound.

    ‘(d) TIME FOR PAYMENT- The Secretary shall make counter-cyclical payments for each of the 2002 through 2006 crop years not later than 190 days after the beginning of marketing year for the crop of the contract commodity.’.

SEC. 112. VIOLATIONS OF CONTRACTS.

    Section 116 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7216) is amended--

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

        (A) by striking ‘subsection (b)’ and inserting ‘subsections (b) and (e)’; and

        (B) by striking ‘section 111(a)’ and inserting ‘this subtitle’;

      (2) in subsection (b), by striking ‘If’ and inserting ‘Except as provided in subsection (e), if’; and

      (3) by adding at the end the following:

    ‘(e) PLANTING FLEXIBILITY- In the case of a first violation of section 118(b) by an eligible owner or producer that has entered into a contract and that acted in good faith, in lieu of terminating the contract under subsection (a), the Secretary shall require a refund or reduce a future contract payment under subsection (b) in an amount that does not exceed twice the amount otherwise payable under the contract on the number of acres involved in the violation.’.

SEC. 113. PLANTING FLEXIBILITY.

    Section 118(b) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7218(b)) is amended--

      (1) by striking paragraph (1) and inserting the following:

      ‘(1) LIMITATIONS- The planting of the following agricultural commodities shall be prohibited on contract acreage:

        ‘(A) Fruits.

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

        ‘(C) In the case of the 2003 and subsequent crops of an agricultural commodity, wild rice.’; and

      (2) in paragraph (2)(C), by striking ‘1991 through 1995’ and inserting ‘1996 through 2001’.

SEC. 114. PILOT PROGRAM FOR FARM COUNTER-CYCLICAL SAVINGS ACCOUNTS.

    Subtitle B of title I of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7211 et seq.) is amended by adding at the end the following:

‘SEC. 119. PILOT PROGRAM FOR FARM COUNTER-CYCLICAL SAVINGS ACCOUNTS.

    ‘(a) DEFINITIONS- In this section:

      ‘(1) ADJUSTED GROSS REVENUE- The term ‘adjusted gross revenue’ means the adjusted gross income for all agricultural enterprises of a producer in a year, excluding revenue earned from nonagricultural sources, as determined by the Secretary--

        ‘(A) by taking into account gross receipts from the sale of crops and livestock on all agricultural enterprises of the producer, including insurance indemnities resulting from losses in the agricultural enterprises;

        ‘(B) by including all farm payments paid by the Secretary for all agricultural enterprises of the producer, including any marketing loan gains described in section 1001(3)(A) of the Food Security Act of 1985 (7 U.S.C. 1308(3)(A));

        ‘(C) by deducting the cost or basis of livestock or other items purchased for resale, such as feeder livestock, on all agricultural enterprises of the producer; and

        ‘(D) as represented on--

          ‘(i) a schedule F of the Federal income tax returns of the producer; or

          ‘(ii) a comparable tax form related to the agricultural enterprises of the producer, as approved by the Secretary.

      ‘(2) AGRICULTURAL ENTERPRISE- The term ‘agricultural enterprise’ means the production and marketing of all agricultural commodities (including livestock but excluding tobacco) on a farm or ranch.

      ‘(3) AVERAGE ADJUSTED GROSS REVENUE- The term ‘average adjusted gross revenue’ means--

        ‘(A) the average of the adjusted gross revenue of a producer for each of the preceding 5 taxable years; or

        ‘(B) in the case of a beginning farmer or rancher or other producer that does not have adjusted gross revenue for each of the preceding 5 taxable years, the estimated income of the producer that will be earned from all agricultural enterprises for the applicable year, as determined by the Secretary.

      ‘(4) PRODUCER- The term ‘producer’ means an individual or entity, as determined by the Secretary for an applicable year, that--

        ‘(A) shares in the risk of producing, or provides a material contribution in producing, an agricultural commodity for the applicable year;

        ‘(B) has a substantial beneficial interest in the agricultural enterprise in which the agricultural commodity is produced;

        ‘(C)(i) during each of the preceding 5 taxable years, has filed--

          ‘(I) a schedule F of the Federal income tax returns; or

          ‘(II) a comparable tax form related to the agricultural enterprises of the individual or entity, as approved by the Secretary; or

        ‘(ii) is a beginning farmer or rancher or other producer that does not have adjusted gross revenue for each of the preceding 5 taxable years, as determined by the Secretary; and

        ‘(D)(i) has earned at least $50,000 in average adjusted gross revenue over the preceding 5 taxable years;

        ‘(ii) is a limited resource farmer or rancher, as determined by the Secretary; or

        ‘(iii) in the case of a beginning farmer or rancher or other producer that does not have average adjusted gross revenue for the preceding 5 taxable years, has at least $50,000 in estimated income from all agricultural enterprises for the applicable year, as determined by the Secretary.

    ‘(b) ESTABLISHMENT- For each of fiscal years 2003 through 2005, the Secretary shall establish a pilot program in 3 States (as determined by the Secretary) under which a producer may establish a farm counter-cyclical savings account in the name of the producer in a bank or financial institution selected by the producer and approved by the Secretary.

    ‘(c) CONTENT OF ACCOUNT- A farm counter-cyclical savings account shall consist of--

      ‘(1) contributions of the producer; and

      ‘(2) matching contributions of the Secretary.

    ‘(d) PRODUCER CONTRIBUTIONS- A producer may deposit such amounts in the account of the producer as the producer considers appropriate.

    ‘(e) MATCHING CONTRIBUTIONS-

      ‘(1) IN GENERAL- Subject to paragraphs (2) through (5), the Secretary shall provide a matching contribution on the amount deposited by the producer into the account.

      ‘(2) AMOUNT- Subject to paragraph (3), the amount of a matching contribution that the Secretary shall provide under paragraph (1) shall be equal to 2 percent of the average adjusted gross revenue of the producer.

      ‘(3) MAXIMUM CONTRIBUTIONS FOR INDIVIDUAL PRODUCER- The amount of matching contributions that may be provided by the Secretary for an individual producer under this subsection shall not exceed $5,000 for any applicable fiscal year.

      ‘(4) MAXIMUM CONTRIBUTIONS FOR ALL PRODUCERS IN A STATE- The total amount of matching contributions that may be provided by the Secretary for all producers in a State under this subsection shall not exceed $4,000,000 for each of fiscal years 2003 through 2005.

      ‘(5) DATE FOR MATCHING CONTRIBUTIONS- The Secretary shall provide the matching contributions required for a producer under paragraph (1) as of the date that a majority of the covered commodities grown by the producer are harvested.

    ‘(f) INTEREST- Funds deposited into the account may earn interest at the commercial rates provided by the bank or financial institution in which the Account is established.

    ‘(g) USE- Funds credited to the account--

      ‘(1) shall be available for withdrawal by a producer, in accordance with subsection (h); and

      ‘(2) may be used for purposes determined by the producer.

    ‘(h) WITHDRAWAL-

      ‘(1) IN GENERAL- Subject to paragraph (2), in any year, a producer may withdraw funds from the account in an amount that is equal to--

        ‘(A) 90 percent of average adjusted gross revenue of the producer for the previous 5 years; minus

        ‘(B) the adjusted gross revenue of the producer in that year.

      ‘(2) RETIREMENT- A producer that ceases to be actively engaged in farming, as determined by the Secretary--

        ‘(A) may withdraw the full balance from, and close, the account; and

        ‘(B) may not establish another account.

    ‘(i) ADMINISTRATION- The Secretary shall administer this section through the Farm Service Agency and local, county, and area offices of the Department of Agriculture.’.

Subtitle B--Nonrecourse Marketing Assistance Loans and Loan Deficiency Payments

SEC. 121. NONRECOURSE MARKETING ASSISTANCE LOANS AND LOAN DEFICIENCY PAYMENTS.

    (a) IN GENERAL- Sections 131(a) and 137 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7231(a), 7237) are amended by striking ‘2002’ each place it appears and inserting ‘2006’.

    (b) UPLAND COTTON- Sections 134(e)(1), 136, and 136A(a) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7234(e)(1), 7236, 7236a(a)) are amended by striking ‘2003’ each place it appears and inserting ‘2007’.

SEC. 122. ELIGIBLE PRODUCTION.

    Section 131 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7231) is amended by striking subsection (b) and inserting the following:

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

SEC. 123. LOAN RATES.

    (a) IN GENERAL- Section 132 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7232) is amended to read as follows:

‘SEC. 132. LOAN RATES.

    ‘(a) IN GENERAL- Subject to subsection (b), the loan rate for a marketing assistance loan under section 131 for a loan commodity shall be--

      ‘(1) in the case of wheat, $3.00 per bushel;

      ‘(2) in the case of corn, $2.08 per bushel;

      ‘(3) in the case of grain sorghum, $2.08 per bushel;

      ‘(4) in the case of barley, $2.00 per bushel;

      ‘(5) in the case of oats, $1.50 per bushel;

      ‘(6) in the case of upland cotton, $0.55 per pound;

      ‘(7) in the case of extra long staple cotton, $0.7965 per pound;

      ‘(8) in the case of rice, $6.50 per hundredweight;

      ‘(9) in the case of soybeans, $5.20 per bushel;

      ‘(10) in the case of oilseeds (other than soybeans), $0.095 per pound;

      ‘(11) in the case of graded wool, $1.00 per pound;

      ‘(12) in the case of nongraded wool (including unshorn pelts), $0.40 per pound;

      ‘(13) in the case of honey, $0.60 per pound;

      ‘(14) in the case of dry peas, $6.78 per hundredweight;

      ‘(15) in the case of lentils, $12.79 per hundredweight;

      ‘(16) in the case of large chickpeas, $17.44 per hundredweight; and

      ‘(17) in the case of small chickpeas, $8.10 per hundredweight.

    ‘(b) ADJUSTMENTS-

      ‘(1) IN GENERAL- The Secretary may make appropriate adjustments in the loan rates for any loan commodity for differences in grade, type, quality, location, and other factors.

      ‘(2) MANNER- The adjustments under this subsection shall, to the maximum extent practicable, be made in such manner that the average loan rate for the loan commodity will, on the basis of the anticipated incidence of the factors described in paragraph (1), be equal to the loan rate provided under this section.’.

    (b) CONFORMING AMENDMENT- Section 162 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7282) is repealed.

SEC. 124. TERM OF LOANS.

    Section 133 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7233) is amended to read as follows:

‘SEC. 133. TERM OF LOANS.

    ‘In the case of each loan commodity, a marketing loan under section 131 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.’.

SEC. 125. REPAYMENT OF LOANS.

    Section 134(a) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7234(a)) is amended--

      (1) by striking ‘wheat, corn, grain sorghum, barley, oats, and oilseeds’ and inserting ‘a loan commodity (other than upland cotton, rice, and extra long staple cotton)’; and

      (2) in paragraph (2)--

        (A) in subparagraph (C), by striking ‘and’ at the end;

        (B) in subparagraph (D), by striking the period and inserting ‘; and’; and

        (C) by adding at the end the following:

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

SEC. 126. LOAN DEFICIENCY PAYMENTS.

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

      (1) by striking subsection (a) and inserting the following:

    ‘(a) IN GENERAL- The Secretary may make loan deficiency payments available to producers on a farm that, although eligible to obtain a marketing assistance loan under section 131 with respect to a loan commodity, agree to forgo obtaining the loan for the loan commodity in return for payments under this section.’; and

      (2) by striking subsections (e) and (f) and inserting the following:

    ‘(e) BENEFICIAL INTEREST-

      ‘(1) IN GENERAL- A producer shall be eligible for a payment for a loan commodity under this section only if the producer has a beneficial interest in the loan commodity, as determined by the Secretary.

      ‘(2) APPLICATION- The Secretary shall make a payment under this section to the producers on a farm with respect to a quantity of a loan commodity as of the earlier of--

        ‘(A) the date on which the producers on the farm marketed or otherwise lost beneficial interest in the loan commodity, as determined by the Secretary; or

        ‘(B) the date the producers on the farm request the payment.

      ‘(3) 2001 CROP- Notwithstanding paragraphs (1) and (2), effective for the 2001 crop only, if a producer eligible for a payment under this section loses beneficial interest in the covered commodity, the producer shall be eligible for the payment determined as of the date the producer lost beneficial interest in the covered commodity, as determined by the Secretary.’.

SEC. 127. PAYMENTS IN LIEU OF LOAN DEFICIENCY PAYMENTS FOR GRAZED ACREAGE.

    (a) IN GENERAL- Subtitle C of title I of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7231 et seq.) is amended by adding at the end the following:

‘SEC. 138. PAYMENTS IN LIEU OF LOAN DEFICIENCY PAYMENTS FOR GRAZED ACREAGE.

    ‘(a) IN GENERAL- For each crop of wheat, grain sorghum, barley, and oats, in the case of the producers on a farm that would be eligible for a loan deficiency payment under section 135 for wheat, grain sorghum, barley, or oats, but that elects to use acreage planted to the wheat, grain sorghum, barley, or oats for the grazing of livestock, the Secretary shall make a payment to the producers on the farm under this section if the producers on the farm enter into an agreement with the Secretary to forgo any other harvesting of the wheat, grain sorghum, barley, or oats on the acreage.

    ‘(b) PAYMENT AMOUNT- The amount of a payment made to the producers on a farm under this section shall be equal to the amount obtained by multiplying--

      ‘(1) the loan deficiency payment rate determined under section 135(c) in effect, as of the date of the agreement, for the county in which the farm is located; by

      ‘(2) the payment quantity obtained by multiplying--

        ‘(A) the quantity of the grazed acreage on the farm with respect to which the producers on the farm elect to forgo harvesting of wheat, grain sorghum, barley, or oats; and

        ‘(B) the payment yield for that contract commodity on the farm.

    ‘(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 135.

      ‘(2) AVAILABILITY- The Secretary shall establish an availability period for the payment authorized by this section that is consistent with the availability period for wheat, grain sorghum, barley, and oats established by the Secretary for marketing assistance loans authorized by this subtitle.

    ‘(d) PROHIBITION ON CROP INSURANCE OR NONINSURED CROP ASSISTANCE- The producers on a farm shall not be eligible for insurance under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) or noninsured crop assistance under section 196 with respect to a crop of wheat, grain sorghum, barley, or oats planted on acreage that the producers on the farm elect, in the agreement required by subsection (a), to use for the grazing of livestock in lieu of any other harvesting of the crop.’.

SEC. 128. SPECIAL MARKETING LOAN PROVISIONS FOR UPLAND COTTON.

    Section 136(a) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7236(a)) is amended by adding at the end the following:

      ‘(4) APPLICATION OF THRESHOLD- During the period beginning on the date of this paragraph and ending on July 31, 2003, the Secretary shall make the calculations under paragraphs (1)(A) and (2) and subsection (b)(1)(B) without regard to the 1.25 cent threshold provided under those paragraphs and subsection.’.

Subtitle C--Other Commodities

CHAPTER 1--DAIRY

SEC. 131. MILK PRICE SUPPORT PROGRAM.

    Section 141 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7251) (as amended by section 772(a) of Public Law 107-76) is amended in subsections (b)(5) and (h) by striking ‘May 31, 2002’ each place it appears and inserting ‘December 31, 2006’.

SEC. 132. NATIONAL DAIRY PROGRAM.

    The Federal Agriculture Improvement and Reform Act of 1996 (as amended by section 772(b) of Public Law 107-76) is amended by inserting after section 141 (7 U.S.C. 7251) the following:

‘SEC. 142. NATIONAL DAIRY PROGRAM.

    ‘(a) DAIRY MARKET LOSS ASSISTANCE PROGRAM-

      ‘(1) DEFINITIONS- In this subsection:

        ‘(A) AVERAGE PRICE OF MILK- The term ‘average price of milk’ means the blending of the prices of milk for use as fluid milk and in cheese, ice cream, butter, and nonfat dry milk in the marketing area where the milk was marketed, as determined by the Secretary.

        ‘(B) PRODUCER- The term ‘producer’ means an individual or entity that directly or indirectly (as determined by the Secretary) shares in the risk of producing milk.

      ‘(2) PROGRAM- Subject to paragraph (8), the Secretary shall provide market loss assistance payments to producers on a dairy farm with respect to the production of milk in a State other than a participating State (as defined in subsection (b)(1)) that is marketed during the period beginning on December 1, 2001, and ending on September 30, 2005.

      ‘(3) AMOUNT- Subject to paragraph (8), payments to a producer under this subsection shall be calculated by multiplying--

        ‘(A) the payment quantity for the producer during the applicable quarter established under paragraph (4); by

        ‘(B) the payment rate established under paragraph (5).

      ‘(4) PAYMENT QUANTITY-

        ‘(A) IN GENERAL- Subject to subparagraph (B), the payment quantity for a producer during the applicable quarter under this subsection shall be equal to the quantity of milk produced and marketed by the producer during the quarter.

        ‘(B) LIMITATION- The payment quantity for a producer during the applicable fiscal year under this subsection shall not exceed the milk marketing base for the producer established under subsection (c).

      ‘(5) PAYMENT RATE- The payment rate for a payment under this subsection shall be calculated by multiplying (as determined by the Secretary)--

        ‘(A) 40 percent; by

        ‘(B) the amount by which--

          ‘(i) the average price of milk during the applicable quarter; is less than

          ‘(ii) the average price of milk for the same quarter during each of the previous 5 years.

      ‘(6) REPORTING OF PRODUCTION- The Secretary may require producers that receive payments under this subsection to report the quantity of milk produced and marketed by the producer on the dairy farm of the producer, in a manner determined by the Secretary.

      ‘(7) TIMING OF PAYMENTS-

        ‘(A) IN GENERAL- Except as provided in subparagraph (B), payments made under this subsection shall be made on a quarterly basis.

        ‘(B) PAYMENTS FOR FISCAL YEAR 2002- Payments under this subsection for fiscal year 2002 shall not be made before October 1, 2002.

      ‘(8) FUNDING- The Secretary shall use not more than $1,500,000,000 of funds of the Commodity Credit Corporation to carry out this subsection.

    ‘(b) NORTHEAST DAIRY MARKET LOSS PAYMENTS-

      ‘(1) DEFINITIONS- In this subsection:

        ‘(A) CLASS I MILK- The term ‘Class I milk’ means milk (including milk components) classified as Class I milk under a Federal milk marketing order.

        ‘(B) ELIGIBLE PRODUCTION- The term ‘eligible production’ means milk produced by a producer in a participating State.

        ‘(C) 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.

        ‘(D) PARTICIPATING STATE- The term ‘participating State’ means Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, and West Virginia.

        ‘(E) PRODUCER- The term ‘producer’ means an individual or entity that directly or indirectly (as determined by the Secretary)--

          ‘(i) shares in the risk of producing milk; and

          ‘(ii) 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.

      ‘(2) PAYMENTS- Subject to paragraph (9), 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 in exchange for compliance on the farm with--

        ‘(A) applicable highly erodible land conservation requirements under subtitle B of title XII of the Food Security Act of 1985 (16 U.S.C. 3811 et seq.); and

        ‘(B) applicable wetland conservation requirements under subtitle C of title XII of that Act (16 U.S.C. 3821 et seq.).

      ‘(3) AMOUNT- Payments to a producer under this subsection shall be calculated by multiplying (as determined by the Secretary)--

        ‘(A) the payment quantity for the producer during the applicable month established under paragraph (4);

        ‘(B) the amount equal to--

          ‘(i) $16.94 per hundredweight; less

          ‘(ii) the Class I milk price per hundredweight in Boston under the applicable Federal milk marketing order; by

        ‘(C) 45 percent.

      ‘(4) PAYMENT QUANTITY-

        ‘(A) IN GENERAL- Subject to subparagraph (B), the payment quantity for a producer during the applicable month under this subsection shall be equal to the quantity of milk produced and marketed by the producer during the month.

        ‘(B) LIMITATION- The payment quantity for a producer during the applicable fiscal year under this subsection shall not exceed the milk marketing base for the producer established under subsection (c).

      ‘(5) PAYMENTS- A payment under a contract under this subsection 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.

      ‘(6) SIGNUP- The Secretary shall offer to enter into contracts under this subsection during the period beginning on December 1, 2001, and ending on September 30, 2005.

      ‘(7) DURATION OF CONTRACT-

        ‘(A) IN GENERAL- Except as provided in subparagraph (B) and paragraph (8), any contract entered into by producers on a dairy farm under this subsection 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.

        ‘(B) VIOLATIONS- If a producer violates the contract, the Secretary may--

          ‘(i) terminate the contract and allow the producer to retain any payments received under the contract; or

          ‘(ii) 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.

      ‘(8) TRANSITION RULE- In addition to any payment that is otherwise available under this subsection, if the producers on a dairy farm enter into a contract under this subsection by March 1, 2002, the Secretary shall make a payment under this subsection on the quantity of eligible production of the producer marketed during the period beginning on December 1, 2001, and ending on January 1, 2002.

      ‘(9) FUNDING- The Secretary shall use not more than $500,000,000 of funds of the Commodity Credit Corporation to carry out this subsection.

    ‘(c) MILK MARKETING BASE-

      ‘(1) DEFINITION OF NEW PRODUCER- In this subsection, the term ‘new producer’ means a producer of milk that did not have an interest in the production of milk during any of 1999 through 2001 fiscal years.

      ‘(2) ESTABLISHED PRODUCERS- In the case of a producer of milk other than a new producer, the milk marketing base of a producer for a fiscal year under this section shall be equal to the lesser of--

        ‘(A) the average quantity of milk marketed for commercial use in which the producer has had a direct or indirect interest during each of the 1999 through 2001 fiscal years; or

        ‘(B) 8,000,000 pounds.

      ‘(3) NEW PRODUCERS- In the case of a new producer, the milk marketing base of the new producer under this section shall be equal to--

        ‘(A) during each of the first 3 fiscal years of milk production by the new producer, 1,500,000 pounds; and

        ‘(B) during each subsequent year of milk production, the lesser of--

          ‘(i) the average quantity of milk marketed for commercial use in which the producer has had a direct or indirect interest during the first 3 years of milk production by the new producer; or

          ‘(ii) 8,000,000 pounds.

      ‘(4) ADJUSTMENTS- The Secretary may provide for the adjustment of any milk marketing base of a producer under this subsection--

        ‘(A) if the production of milk used to determine the milk marketing base of the producer has been adversely affected by damaging weather or a related condition (as determined by the Secretary); or

        ‘(B) if the adjustment is necessary to provide fair and equitable treatment to tenants and sharecroppers.

      ‘(5) TRANSFERS-

        ‘(A) IN GENERAL- Except as provided in subparagraph (B), a producer that is assigned a milk marketing base under this subsection may not transfer the base to any person.

        ‘(B) FAMILY MEMBERS- A producer that is assigned a milk marketing base under this subsection may irrevocably transfer all or part of the base to a family member of the producer.

      ‘(6) SCHEMES OR DEVICES- If the Secretary determines that any producer has adopted a scheme or device to increase the milk marketing base of the producer under this subsection, the producer shall become ineligible for any milk marketing base under this subsection.’.

SEC. 133. 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 ‘2006’.

    (b) DAIRY INDEMNITY PROGRAM- Section 3 of Public Law 90-484 (7 U.S.C. 450l) is amended by striking ‘1995’ and inserting ‘2006’.

SEC. 134. 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. 135. 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. 136. 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, including a dairy product 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’; and

      (4) by inserting after paragraph (5) (as so designated) the following:

      ‘(6) IMPORTERS-

        ‘(A) REPRESENTATION- The Secretary shall appoint not more than 2 members who represent importers of dairy products and are subject to assessments under the order, to reflect the proportion of domestic production and imports supplying the United States market, as determined by the Secretary on the basis of the average volume of domestic production of dairy products in proportion to the average volume of imports of dairy products in the United States during the immediately preceding 3 years.

        ‘(B) 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.’.

    (c) 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; and

      (3) 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-

          ‘(i) IN GENERAL- The assessment on imported dairy products shall be--

            ‘(I) paid by the importer to Customs at the time of the entry of the products into the United States; and

            ‘(II) remitted by Customs to the Board.

          ‘(ii) TIME OF ENTRY- For purposes of this subparagraph, entry of the products into the United States shall be considered to have occurred when a dairy product is released from custody of Customs and introduced into the stream of commerce within the United States.

          ‘(iii) IMPORTERS- For purposes of this subparagraph, an importer includes--

            ‘(I) a person that holds title to a dairy product produced outside the United States immediately on release by Customs; and

            ‘(II) a person that acts on behalf of other persons, as an agent, broker, or consignee, to secure the release of a dairy product from Customs and introduce the released dairy product into the stream of commerce.

        ‘(C) RATE- The rate of assessment on imported dairy products shall be determined in the same manner as the rate of assessment per hundredweight or the equivalent of milk.

        ‘(D) VALUE OF PRODUCTS- For the purpose of determining the assessment on imported dairy products under subparagraph (C), the value to be placed on imported dairy products shall be established by the Secretary in a fair and equitable manner.

        ‘(E) USE OF ASSESSMENTS ON IMPORTED DAIRY PRODUCTS- Assessments collected on imported dairy products shall not be used for foreign market promotion of United States dairy products.’.

    (d) 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’.

    (e) IMPORTER ELIGIBILITY TO VOTE IN REFERENDUM- Section 116(b) of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4507(b)) is amended--

      (1) in the first sentence, by inserting ‘and importers’ after ‘producers’ each place it appears; and

      (2) in the second sentence, by inserting after ‘commercial use’ the following: ‘and importers voting in the referendum (that have been engaged in the importation of dairy products into the United States during the applicable period, as determined by the Secretary)’.

    (f) CONFORMING AMENDMENTS- Section 110(b) of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4501(b)) is amended--

      (1) in the first sentence--

        (A) by inserting after ‘commercial use’ the following: ‘and on imported dairy products’; and

        (B) by striking ‘products produced in the United States.’ and inserting ‘products.’; and

      (2) in the second sentence, by inserting after ‘produce milk’ the following: ‘or the right of any person to import dairy products’.

SEC. 137. DAIRY STUDIES.

    (a) IN GENERAL- The Secretary of Agriculture shall conduct--

      (1) a study of the effects of terminating all Federal programs relating to price support and supply management for milk and granting the consent of Congress to cooperative efforts by States to manage milk prices and supply; and

      (2) 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.

    (b) REPORTS- Not later than September 30, 2002, the Secretary shall submit to the Committee on Agriculture of House of Representatives and the Committee on Agriculture, Nutrition, and Forestry a report describing the results of each of the studies required under subsection (a).

CHAPTER 2--SUGAR

SEC. 141. SUGAR PROGRAM.

    (a) LOAN RATE ADJUSTMENTS- Section 156(c) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272(c)) is amended--

      (1) by striking ‘REDUCTION IN LOAN RATES’ and inserting ‘LOAN RATE ADJUSTMENTS’; and

      (2) in paragraph (1)--

        (A) by striking ‘REDUCTION REQUIRED’ and inserting ‘IN GENERAL’; and

        (B) by striking ‘shall’ and inserting ‘may’.

    (b) LOAN TYPE; PROCESSOR ASSURANCES- Section 156(e) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272(e)) is amended--

      (1) by striking paragraph (2) and inserting the following:

      ‘(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.

        ‘(C) BANKRUPTCY OR INSOLVENCY OF PROCESSORS-

          ‘(i) IN GENERAL- The Secretary shall use funds of the Commodity Credit Corporation to pay a producer of sugar beets or sugarcane loan benefits described in clause (ii) if--

            ‘(I) a processor that has entered into a contract with the producer has filed for bankruptcy protection or is otherwise insolvent;

            ‘(II) the assurances under subparagraph (A) are not adequate to ensure compliance with subparagraph (A), as determined by the Secretary;

            ‘(III) the producer demands payments of loan benefits required under this section from the processor; and

            ‘(IV) the Secretary determines that the processor is unable to provide the loan benefits required under this section.

          ‘(ii) AMOUNT- The amount of loan benefits provided to a producer under clause (i) shall be equal to--

            ‘(I) the maximum amount of loan benefits the producer would have been entitled to receive under this section during the 30-day period beginning on the final settlement date provided for in the contract between the producer and processor; less

            ‘(II) any such benefits received by the producer from the processor.

          ‘(iii) ADMINISTRATION- On payment to a producer under clause (i), the Secretary shall--

            ‘(I) be subrogated to all claims of the producer against the processor and other persons responsible for nonpayment; and

            ‘(II) have authority to pursue such claims as are necessary to recover the benefits not paid to the producer by the processor.’; and

      (2) by adding at the end the following:

      ‘(3) ADMINISTRATION- The Secretary may not impose or enforce any prenotification or similar administrative requirement that has the effect of preventing a processor from electing to forfeit the loan collateral on the maturity of the loan.’.

    (c) TERMINATION OF MARKETING ASSESSMENT- Effective October 1, 2001, section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272) is amended by striking subsection (f).

    (d) TERMINATION OF FORFEITURE PENALTY- Section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272) is amended by striking subsection (g).

    (e) IN-PROCESS SUGAR- Section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272) (as amended by subsections (c) and (d)) is amended by inserting after subsection (e) the following:

    ‘(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.’.

    (f) ADMINISTRATION OF PROGRAM- Section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272) (as amended by subsection (e)) is amended by inserting after subsection (f) the following:

    ‘(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.’.

    (g) INFORMATION REPORTING- Section 156(h) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272(h)) is amended--

      (1) by redesignating paragraphs (2) and (3) as paragraphs (4) and (5), respectively;

      (2) by inserting after paragraph (1) the following:

      ‘(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 paragraph (1) 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.’; and

      (3) in paragraph (5) (as redesignated by paragraph (1)), by striking ‘paragraph (1)’ and inserting ‘this subsection’.

    (h) SUBSTITUTABILITY OF SUGAR- Section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272) is amended--

      (1) by redesignating subsection (i) as subsection (j); and

      (2) by inserting after subsection (h) the following:

    ‘(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 Foreign Agricultural Service of the Department of Agriculture, 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 under those programs.’.

    (i) CROPS- Subsection (j) of section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272) (as redesignated by subsection (h)(1)) is amended--

      (1) by striking ‘(other than subsection (f))’; and

      (2) by striking ‘2002’ and inserting ‘2006’.

    (j) 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. 142. STORAGE FACILITY LOANS.

    Chapter 2 of subtitle D of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7271 et seq.) is amended by adding at the end the following:

‘SEC. 157. STORAGE FACILITY LOANS.

    ‘(a) IN GENERAL- Notwithstanding any other provision of law and as soon as practicable after the date of enactment of this section, 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 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 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. 143. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR.

    (a) INFORMATION REPORTING- Section 359a of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359aa) is repealed.

    (b) ESTIMATES- Section 359b of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359bb) is amended--

      (1) in the section heading--

        (A) by inserting ‘flexible’ before ‘marketing’; and

        (B) by striking ‘and crystalline fructose’;

      (2) in subsection (a)--

        (A) in paragraph (1)--

          (i) by striking ‘Before’ and inserting ‘Not later than August 1 before’;

          (ii) by striking ‘1992 through 1998’ and inserting ‘2002 through 2006’;

          (iii) in subparagraph (A), by striking ‘(other than sugar’ and all that follows through ‘stocks’;

          (iv) by redesignating subparagraphs (B) and (C) as subparagraphs (C) and (E), respectively;

          (v) by inserting after subparagraph (A) the following:

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

          (vi) in subparagraph (C) (as so redesignated)--

            (I) by striking ‘or’ and all that follows through ‘beets’; and

            (II) by striking ‘and’ following the semicolon;

          (vii) by inserting after subparagraph (C) (as so redesignated) the following:

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

          (viii) in subparagraph (E) (as so redesignated)--

            (I) by striking ‘quantity of sugar’ and inserting ‘quantity of sugars, syrups, and molasses’;

            (II) by inserting ‘human’ after ‘imported for’ the first place it appears;

            (III) by inserting after ‘consumption’ the first place it appears the following: ‘or to be used for the extraction of sugar for human consumption’;

            (IV) by striking ‘year’ and inserting ‘year, whether such articles are under a tariff-rate quota or are in excess or outside of a tariff-rate quota’; and

            (V) by striking ‘(other than sugar’ and all that follows through ‘carry-in stocks’;

        (B) by redesignating paragraph (2) as paragraph (3);

        (C) by inserting after paragraph (1) the following:

      ‘(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.’; and

        (D) in paragraph (3) (as so redesignated)--

          (i) in the paragraph heading, by striking ‘QUARTERLY REESTIMATES’ and inserting ‘REESTIMATES’; and

          (ii) by inserting ‘as necessary, but’ after ‘a fiscal year’;

      (3) in subsection (b)--

        (A) by striking paragraph (1) and inserting the following:

      ‘(1) IN GENERAL- By the beginning of each fiscal year, the Secretary shall establish for that fiscal 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).’; and

        (B) in paragraph (2), by striking ‘or crystalline fructose’;

      (4) by striking subsection (c);

      (5) by redesignating subsection (d) as subsection (c); and

      (6) in subsection (c) (as so redesignated)--

        (A) by striking paragraph (2);

        (B) by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively; and

        (C) in paragraph (2) (as so redesignated)--

          (i) by striking ‘or manufacturer’ and all that follows through ‘(2)’; and

          (ii) by striking ‘or crystalline fructose’.

    (c) ESTABLISHMENT- Section 359c of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359cc) is amended--

      (1) in the section heading, by inserting ‘flexible’ after ‘of’;

      (2) in subsection (a), by inserting ‘flexible’ after ‘establish’;

      (3) in subsection (b)--

        (A) in paragraph (1)(A), by striking ‘1,250,000’ and inserting ‘1,532,000’; and

        (B) in paragraph (2), by striking ‘to the maximum extent practicable’;

      (4) by striking subsection (c) and inserting the following:

    ‘(c) MARKETING ALLOTMENT FOR SUGAR DERIVED FROM SUGAR BEETS AND SUGAR DERIVED FROM SUGARCANE- The overall allotment quantity for the fiscal year shall be allotted between--

      ‘(1) sugar derived from sugar beets by establishing a marketing allotment for a fiscal year at a quantity equal to the product of multiplying the overall allotment quantity for the fiscal year by 54.35 percent; and

      ‘(2) sugar derived from sugarcane by establishing a marketing allotment for a fiscal year at a quantity equal to the product of multiplying the overall allotment quantity for the fiscal year by 45.65 percent.’;

      (5) by striking subsection (d) and inserting the following:

    ‘(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.’;

      (6) by striking subsection (e);

      (7) by redesignating subsection (f) as subsection (e);

      (8) in subsection (e) (as so redesignated)--

        (A) by striking ‘The allotment’ and inserting the following:

      ‘(1) IN GENERAL- The allotment’;

        (B) in paragraph (1) (as so redesignated)--

          (i) by striking ‘the 5’ and inserting ‘the’;

          (ii) by inserting after ‘sugarcane is produced,’ the following: ‘after a hearing (if requested by the affected sugarcane processors and growers) and on such notice as the Secretary by regulation may prescribe,’; and

          (iii) by striking ‘on the basis of past marketings’ and all that follows through ‘allotments’ and inserting ‘as provided in this subsection and section 359d(a)(2)(A)(iv)’; and

        (C) by inserting after paragraph (1) (as so designated) the following:

      ‘(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.’;

      (9) by inserting after subsection (e) (as so redesignated) the following:

    ‘(f) FILLING CANE SUGAR ALLOTMENTS- Except as provided in section 359e, a State cane sugar allotment established under subsection (e) for a fiscal year may be filled only with sugar processed from sugarcane grown in the State covered by the allotment.’;

      (10) in subsection (g)--

        (A) in paragraph (1), by striking ‘359b(a)(2)--’ and all that follows through the comma at the end of subparagraph (C) and inserting ‘359b(a)(3), adjust upward or downward marketing allotments in a fair and equitable manner’;

        (B) in paragraph (2), by striking ‘359f(b)’ and inserting ‘359f(c)’; and

        (C) in paragraph (3)--

          (i) in the paragraph heading, by striking ‘REDUCTIONS’ and inserting ‘CARRY-OVER OF REDUCTIONS’;

          (ii) by inserting after ‘this subsection, if’ the following: ‘at the time of the reduction’;

          (iii) by striking ‘price support’ and inserting ‘nonrecourse’;

          (iv) by striking ‘206’ and all that follows through ‘the allotment’ and inserting ‘156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272),’; and

          (v) by striking ‘, if any,’; and

      (11) by striking subsection (h) and inserting the following:

    ‘(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), 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).’.

    (d) ALLOCATION- Section 359d(a)(2) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359dd(a)(2)) is amended--

      (1) in subparagraph (A)--

        (A) by striking ‘The Secretary’ and inserting the following:

          ‘(i) IN GENERAL- The Secretary’;

        (B) in the first sentence of clause (i) (as so designated)--

          (i) by striking ‘interested parties’ and inserting ‘the affected sugarcane processors and growers’; and

          (ii) by striking ‘by taking’ and all that follows through ‘allotment allocated.’ and inserting ‘under this subparagraph.’; and

        (C) by inserting after clause (i) the following:

          ‘(ii) MULTIPLE PROCESSOR STATES- Except as provided in clauses (iii) and (iv), 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.

          ‘(iii) TALISMAN PROCESSING FACILITY- In the case of allotments under clause (ii) attributable to the operations of the Talisman processing facility before the date of enactment of this clause, the Secretary shall allocate the allotment among processors in the State under clause (i) in accordance with the agreements of March 25 and 26, 1999, between the affected processors and the Secretary of the Interior.

          ‘(iv) 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.

          ‘(v) NEW ENTRANTS-

            ‘(I) IN GENERAL- Notwithstanding clauses (ii) and (iv), the Secretary, on application of any processor that begins processing sugarcane on or after the date of enactment of this clause, 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 clause shall not exceed--

‘(aa) in the case of the first fiscal year of operation of a new processor, 50,000 short tons (raw value); and

‘(bb) in the case of each subsequent fiscal year of operation of the new processor, a quantity established by the Secretary in accordance with this clause and the criteria described in clause (ii) or (iii), as applicable.

            ‘(IV) NEW ENTRANT STATES-

‘(aa) IN GENERAL- Notwithstanding subparagraphs (A) and (C) of section 359c(e)(3), to accommodate an allocation under subclause (I) to a new processor located in a new entrant mainland State, the Secretary shall provide the new entrant mainland State with an allotment.

‘(bb) 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 clause, 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 clause 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 clause may be applicable to any individual sugar processing facility.

          ‘(vi) 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 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.’; and

      (2) by striking subparagraph (B) and inserting the following:

        ‘(B) BEET SUGAR-

          ‘(i) IN GENERAL- Except as otherwise provided in this subparagraph 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 subparagraph.

          ‘(ii) QUANTITY- The quantity of an allocation made for a beet sugar processor for a crop year under clause (i) 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 clauses (iii) and (iv)) bears to the total of the adjusted weighted average quantities of beet sugar produced by all processors (as so determined).

          ‘(iii) WEIGHTED AVERAGE QUANTITY- Subject to clause (iv), 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.

          ‘(iv) 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 clause (iii) if the Secretary determines that, during any such crop year, the processor--

‘(aa) opened or closed a sugar beet processing factory;

‘(bb) constructed a molasses desugarization facility; or

‘(cc) 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 clause (iii) shall be--

‘(aa) 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 clause) for each sugar beet processing factory that is opened by the processor;

‘(bb) 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 clause) for each sugar beet processing factory that is closed by the processor;

‘(cc) 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 clause) for each molasses desugarization facility that is constructed by the processor; and

‘(dd) 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 clause).

          ‘(v) 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.

          ‘(vi) 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 clause (v).

          ‘(vii) SALE OF FACTORIES OF A PROCESSOR TO ANOTHER PROCESSOR-

            ‘(I) IN GENERAL- Subject to clauses (v) and (vi), 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 fiscal 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 subclause (I) shall apply--

‘(aa) during the remainder of the fiscal year during which the sale described in subclause (I) occurs (referred to in this clause as the ‘initial fiscal year’); and

‘(bb) each subsequent fiscal year (referred in this clause as a ‘subsequent fiscal year’), subject to subclause (III).

            ‘(III) SUBSEQUENT FISCAL YEARS-

‘(aa) IN GENERAL- The assignment of the allocation under subclause (I) shall apply during each subsequent fiscal year unless the acquired factory or factories continue in operation for less than the initial fiscal year and the first subsequent fiscal year.

‘(bb) REASSIGNMENT- If the acquired factory or factories do not continue in operation for the complete initial fiscal year and the first subsequent fiscal 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 by the purchased factory or factories for the initial fiscal year or a subsequent fiscal year, the remainder of the transferred allocation may be filled by beet sugar produced by the buyer from other factories of the buyer.

          ‘(viii) NEW ENTRANTS STARTING PRODUCTION OR REOPENING FACTORIES- If an individual or entity that does not have an allocation of beet sugar under this part (referred to in this subparagraph as a ‘new entrant’) starts processing sugar beets after the date of enactment of this clause, or acquires and reopens a factory that produced beet sugar during the period of the 1998 through 2000 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.

          ‘(ix) 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.’.

    (e) REASSIGNMENT- Section 359e(b) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359ee(b)) is amended--

      (1) in paragraph (1)--

        (A) in subparagraph (B), by striking the ‘and’ after the semicolon;

        (B) by redesignating subparagraph (C) as subparagraph (D);

        (C) by inserting after subparagraph (B) the following:

        ‘(C) if after the reassignments, the deficit cannot be completely eliminated, the Secretary shall reassign the estimated quantity of the deficit to the sale of any inventories of sugar held by the Commodity Credit Corporation; and’; and

        (D) in subparagraph (D) (as so redesignated), by inserting ‘and sales’ after ‘reassignments’; and

      (2) in paragraph (2)--

        (A) in subparagraph (A), by striking the ‘and’ after the semicolon;

        (B) in subparagraph (B), by striking ‘reassign the remainder to imports.’ and inserting ‘use the estimated quantity of the deficit for the sale of any inventories of sugar held by the Commodity Credit Corporation; and’; and

        (C) by inserting after subparagraph (B) the following:

        ‘(C) if after the reassignments and sales, the deficit cannot be completely eliminated, the Secretary shall reassign the remainder to imports.’.

    (f) PRODUCER PROVISIONS- Section 359f of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359ff) is amended--

      (1) in subsection (a)--

        (A) by striking ‘Whenever’ and inserting the following:

      ‘(1) IN GENERAL- If’;

        (B) in the second sentence, by striking ‘processor’s allocation’ and inserting ‘allocation to the processor’;

        (C) by striking ‘Any dispute’ and inserting the following:

      ‘(2) ARBITRATION-

        ‘(A) IN GENERAL- Any dispute’; and

        (D) by adding at the end the following:

        ‘(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.’;

      (2) by redesignating subsection (b) as subsection (c);

      (3) by inserting after subsection (a) the following:

    ‘(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.’; and

      (4) in subsection (c) (as so redesignated)--

        (A) in paragraph (3)(A), by striking ‘the preceding 5 years’ and inserting ‘the 2 highest years from among the 1999, 2000, and 2001 crop years’;

        (B) in paragraph (4)(A), by striking ‘each’ and all that follows through ‘in effect’ and inserting ‘the 2 highest of the 1999, 2000, and 2001 crop years’; and

        (C) by inserting after paragraph (7) the following:

      ‘(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.’.

    (g) CONFORMING AMENDMENTS-

      (1) Part VII of subtitle B of title III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 359aa et seq.) is amended by striking the part heading and inserting the following:

‘PART VII--FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR’.

      (2) Part VII of subtitle B of title III of the Agricultural Adjustment Act of 1938 (as amended by subsection (a)) is amended by inserting before section 359b (7 U.S.C. 1359bb) the following:

‘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.’.

      (3) Section 359g of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359gg) is amended--

        (A) by striking ‘359f’ each place it appears and inserting ‘359f(c)’;

        (B) in the first sentence of subsection (b), by striking ‘3 consecutive’ and inserting ‘5 consecutive’; and

        (C) in subsection (c), by inserting ‘or adjusted’ after ‘share established’.

      (4) Section 359j of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359jj) is amended--

        (A) in subsection (b), by striking ‘sections 359a through 359i’ and inserting ‘this part’; and

        (B) by striking subsection (c).

SEC. 144. REALLOCATION OF SUGAR QUOTA.

    Subtitle B of title III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1311 et seq.) is amended by adding at the end the following:

‘PART VIII--REALLOCATING SUGAR QUOTA IMPORT SHORTFALLS

‘SEC. 360. REALLOCATING CERTAIN SUGAR QUOTAS.

    ‘(a) IN GENERAL- Notwithstanding any other provision of law, on or after June 1 of each year, 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 fiscal year, and may reallocate the unused quota for that fiscal year among qualified supplying countries.

    ‘(b) DEFINITIONS- In this section:

      ‘(1) QUALIFIED SUPPLYING COUNTRY- The term ‘qualified supplying country’ means one of the following 40 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 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 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.

      ‘(2) CANE SUGAR- The term ‘cane sugar’ has the same meaning as the term has under part VII.’.

CHAPTER 3--PEANUTS

SEC. 151. PEANUT PROGRAM.

    (a) IN GENERAL- Subtitle D of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7251 et seq.) is amended by adding at the end the following:

‘CHAPTER 3--PEANUTS

‘SEC. 158A. DEFINITIONS.

    ‘In this chapter:

      ‘(1) COUNTER-CYCLICAL PAYMENT- The term ‘counter-cyclical payment’ means a payment made to peanut producers on a farm under section 158D.

      ‘(2) DIRECT PAYMENT- The term ‘direct payment’ means a payment made to peanut producers on a farm under section 158C.

      ‘(3) EFFECTIVE PRICE- The term ‘effective price’ means the price calculated by the Secretary under section 158D for peanuts to determine whether counter-cyclical payments are required to be made under section 158D for a crop year.

      ‘(4) HISTORICAL PEANUT PRODUCERS ON A FARM- The term ‘historical peanut producers on a farm’ means the peanut producers on a farm in the United States that produced or were prevented from planting peanuts during any of the 1998 through 2001 crop years.

      ‘(5) INCOME PROTECTION PRICE- The term ‘income protection price’ means the price per ton of peanuts used to determine the payment rate for counter-cyclical payments.

      ‘(6) PAYMENT ACRES- The term ‘payment acres’ means 85 percent of the peanut acres on a farm, as established under section 158B, on which direct payments and counter-cyclical payments are made.

      ‘(7) PEANUT ACRES- The term ‘peanut acres’ means the number of acres assigned to a particular farm for historical peanut producers on a farm pursuant to section 158B(b).

      ‘(8) PAYMENT YIELD- The term ‘payment yield’ means the yield assigned to a farm by historical peanut producers on the farm pursuant to section 158B(b).

      ‘(9) PEANUT PRODUCER- The term ‘peanut producer’ means an owner, operator, landlord, tenant, or sharecropper that--

        ‘(A) shares in the risk of producing a crop of peanuts in the United States; and

        ‘(B) is entitled to share in the crop available for marketing from the farm or would have shared in the crop had the crop been produced.

‘SEC. 158B. PAYMENT YIELDS, PEANUT ACRES, AND PAYMENT ACRES FOR FARMS.

    ‘(a) PAYMENT YIELDS AND PAYMENT ACRES-

      ‘(1) AVERAGE YIELD-

        ‘(A) IN GENERAL- The Secretary shall determine, for each historical peanut producer, the average yield for peanuts on all farms of the historical peanut producer for the 1998 through 2001 crop years, excluding any crop year during which the producers did not produce peanuts.

        ‘(B) ASSIGNED YIELDS- Except as provided in subparagraph (C), if, for any of the crop years referred to in subparagraph (A) in which peanuts were planted on a farm by the historical peanut producer, the historical peanut producer has satisfied the eligibility criteria established to carry out section 1102 of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 1999 (7 U.S.C. 1421 note; Public Law 105-277), the Secretary shall assign to the historical peanut producer a yield for the farm for the crop year equal to 65 percent of the average yield for peanuts for the previous 5 crop years.

        ‘(C) SELECTION BY PRODUCER- If a county in which a historical peanut producer described in subparagraph (A) is located is declared a disaster area during 1 or more of the 4 crop years described in subparagraph (A), for the purposes of determining the 4-year average yield for the historical peanut producer, the historical peanut producer may elect to substitute, for not more than 1 of the crop years during which a disaster is declared--

          ‘(i) the State 4-year average yield of peanuts produced in the State; or

          ‘(ii) the average yield for the historical peanut producer determined by the Secretary under subparagraph (A).

      ‘(2) ACREAGE AVERAGE- The Secretary shall determine, for the historical peanut producer, the 4-year average of--

        ‘(A) acreage planted to peanuts on all farms for harvest during the 1998 through 2001 crop years; and

        ‘(B) any acreage that was prevented from being planting to peanuts during the crop years because of drought, flood, or other natural disaster, or other condition beyond the control of the historical peanut producer, as determined by the Secretary.

      ‘(3) TIME FOR DETERMINATIONS; FACTORS-

        ‘(A) TIMING- The Secretary shall make the determinations required by this subsection not later than 90 days after the date of enactment of this section.

        ‘(B) FACTORS- In making the determinations, the Secretary shall take into account changes in the number and identity of historical peanut 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 when a historical peanut producer is no longer living or an entity composed of historical peanut producers has been dissolved.

    ‘(b) ASSIGNMENT OF YIELD AND ACRES TO FARMS-

      ‘(1) ASSIGNMENT BY HISTORICAL PEANUT PRODUCERS- For the first crop year that begins after the date of enactment of this section, the Secretary shall provide each historical peanut producer in a State that produced a contract commodity, or another agricultural commodity for which a production adjustment program is carried out under the Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et seq.), or was prevented from planting a contract commodity, or another such agricultural commodity, during the 2001 crop year with an opportunity to assign the average peanut yield and average acreage determined under subsection (a) for the historical peanut producer to cropland on a farm in the State.

      ‘(2) ASSIGNMENT TO CROPLAND- In the case of a historical peanut producer on a farm that did not produce a contract commodity, or another such agricultural commodity, and was not prevented from planting a contract commodity or another such agricultural commodity during the 2001 crop year, the average peanut yield and average acreage determined under subsection (a) shall be assigned to the cropland on the farm.

      ‘(3) PAYMENT YIELD- The average of all of the yields assigned by historical peanut producers to a farm shall be considered to be the payment yield for the farm for the purpose of making direct payments and counter-cyclical payments under this chapter.

      ‘(4) PEANUT ACRES- Subject to subsection (e), the total number of acres assigned by historical peanut producers to a farm shall be considered to be the peanut acres for the farm for the purpose of making direct payments and counter-cyclical payments under this chapter.

    ‘(c) ELECTION- In the case of the first crop year that begins after the date of enactment of this subsection, a historical peanut producer shall notify the Secretary of the assignments described in subsection (b)(1) not later than 180 days after the date of enactment of this section.

    ‘(d) PAYMENT ACRES- The payment acres for peanuts on a farm shall be equal to 85 percent of the peanut acres assigned to the farm.

    ‘(e) PREVENTION OF EXCESS PEANUT ACRES-

      ‘(1) REQUIRED REDUCTION- If the total of the peanut acres for a farm, together with the acreage described in paragraph (3), exceeds the actual cropland acreage of the farm, the Secretary shall reduce the quantity of peanut acres for the farm or contract acreage for 1 or more covered commodities for the farm as necessary so that the total of the peanut acres and acreage described in paragraph (3) does not exceed the actual cropland acreage of the farm.

      ‘(2) SELECTION OF ACRES- The Secretary shall give the peanut producers on the farm the opportunity to select the peanut acres or contract acreage against which the reduction will be made.

      ‘(3) OTHER ACREAGE- For purposes of paragraph (1), the Secretary shall include--

        ‘(A) any contract acreage for the farm under subtitle B;

        ‘(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.); and

        ‘(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) DOUBLE-CROPPED ACREAGE- In applying paragraph (1), the Secretary shall take into account additional acreage as a result of an established double-cropping history on a farm, as determined by the Secretary.

‘SEC. 158C. DIRECT PAYMENTS FOR PEANUTS.

    ‘(a) IN GENERAL- For each of the 2002 through 2006 fiscal years, the Secretary shall make direct payments to peanut producers on a farm with peanut acres under section 158B and a payment yield for peanuts under section 158B.

    ‘(b) PAYMENT RATE- The payment rate used to make direct payments with respect to peanuts for a fiscal year shall be equal to $0.018 per pound.

    ‘(c) PAYMENT AMOUNT- The amount of the direct payment to be paid to the peanut producers on a farm for peanuts for a fiscal year shall be equal to the product obtained by multiplying--

      ‘(1) the payment rate specified in subsection (b);

      ‘(2) the payment acres on the farm; by

      ‘(3) the payment yield for the farm.

    ‘(d) TIME FOR PAYMENT-

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

        ‘(A) in the case of the 2002 fiscal year, during the period beginning December 1, 2001, and ending September 30, 2002; and

        ‘(B) in the case of each of the 2003 through 2006 fiscal years, not later than September 30 of the fiscal year.

      ‘(2) ADVANCE PAYMENTS-

        ‘(A) IN GENERAL- At the option of the peanut producers on a farm, the Secretary shall pay 50 percent of the direct payment for a fiscal year for the producers on the farm on a date selected by the peanut producers on the farm.

        ‘(B) SELECTED DATE- The selected date for a fiscal year shall be on or after December 1 of the fiscal year.

        ‘(C) SUBSEQUENT FISCAL YEARS- The peanut producers on a farm may change the selected date for a subsequent fiscal year by providing advance notice to the Secretary.

      ‘(3) REPAYMENT OF ADVANCE PAYMENTS- If any peanut producer on a farm that receives an advance direct payment for a fiscal year ceases to be eligible for a direct payment before the date the direct payment would have been made by the Secretary under paragraph (1), the peanut producer shall be responsible for repaying the Secretary the full amount of the advance payment.

‘SEC. 158D. COUNTER-CYCLICAL PAYMENTS FOR PEANUTS.

    ‘(a) IN GENERAL- For each of the 2002 through 2006 crops of peanuts, the Secretary shall make counter-cyclical payments with respect to peanuts if the Secretary determines that the effective price for peanuts is less than the income protection price for peanuts.

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

      ‘(1) the greater of--

        ‘(A) the national average market price received by peanut producers during the marketing season for peanuts, as determined by the Secretary; or

        ‘(B) the national average loan rate for a marketing assistance loan for peanuts under section 158G in effect for the marketing season for peanuts under this chapter; and

      ‘(2) the payment rate in effect for peanuts under section 158C for the purpose of making direct payments with respect to peanuts.

    ‘(c) INCOME PROTECTION PRICE- For purposes of subsection (a), the income protection price for peanuts shall be equal to $520 per ton.

    ‘(d) PAYMENT AMOUNT- The amount of the counter-cyclical payment to be paid to the peanut producers on a farm for a crop year shall be equal to the product obtained by multiplying--

      ‘(1) the payment rate specified in subsection (e);

      ‘(2) the payment acres on the farm; by

      ‘(3) the payment yield for the farm.

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

      ‘(1) the income protection price for peanuts; and

      ‘(2) the effective price determined under subsection (b) for peanuts.

    ‘(f) TIME FOR PAYMENTS-

      ‘(1) IN GENERAL- The Secretary shall make counter-cyclical payments to peanut producers on a farm under this section for a crop of peanuts as soon as practicable after determining under subsection (a) that the payments are required for the crop year.

      ‘(2) PARTIAL PAYMENT-

        ‘(A) IN GENERAL- At the option of the Secretary, the peanut producers on a farm may elect to receive up to 40 percent of the projected counter-cyclical payment to be made under this section for a crop of peanuts on completion of the first 2 months of the marketing season for the crop, as determined by the Secretary.

        ‘(B) REPAYMENT- The peanut producers on a farm shall repay to the Secretary the amount, if any, by which the payment received by producers on the farm (including any partial payments) exceeds the counter-cyclical payment the producers on the farm are eligible for under this section.

‘SEC. 158E. PRODUCER AGREEMENTS.

    ‘(a) COMPLIANCE WITH CERTAIN REQUIREMENTS-

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

        ‘(A) to comply with applicable highly erodible land 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 conservation 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 158F; and

        ‘(D) to use a quantity of the land on the farm equal to the peanut acres, for an agricultural or conserving use, and not for a nonagricultural commercial or industrial use, as determined by the Secretary.

      ‘(2) COMPLIANCE- The Secretary may promulgate such regulations as the Secretary considers necessary to ensure peanut producer compliance with paragraph (1).

    ‘(b) FORECLOSURE-

      ‘(1) IN GENERAL- The Secretary shall not require the peanut producers on a farm to repay a direct payment or counter-cyclical payment if a foreclosure has occurred with respect to the farm and the Secretary determines that forgiving the repayment is appropriate to provide fair and equitable treatment.

      ‘(2) COMPLIANCE WITH REQUIREMENTS-

        ‘(A) IN GENERAL- This subsection shall not void the responsibilities of the peanut producers on a farm under subsection (a) if the peanut producers on the farm continue or resume operation, or control, of the farm.

        ‘(B) APPLICABLE REQUIREMENTS- On the resumption of operation or control over the farm by the peanut producers on the farm, the requirements of subsection (a) in effect on the date of the foreclosure shall apply.

    ‘(c) TRANSFER OR CHANGE OF INTEREST IN FARM-

      ‘(1) TERMINATION- Except as provided in paragraph (5), a transfer of (or change in) the interest of the peanut producers on a farm in peanut acres for which direct payments or counter-cyclical payments are made shall result in the termination of the payments with respect to the peanut acres, unless the transferee or owner of the acreage agrees to assume all obligations under subsection (a).

      ‘(2) EFFECTIVE DATE- The termination takes effect on the date of the transfer or change.

      ‘(3) TRANSFER OF PAYMENT BASE AND YIELD- The Secretary shall not impose any restriction on the transfer of the peanut acres or payment yield of a farm as part of a transfer or change described in paragraph (1).

      ‘(4) MODIFICATION- At the request of the transferee or owner, the Secretary may modify the requirements of subsection (a) if the modifications are consistent with the purposes of subsection (a), as determined by the Secretary.

      ‘(5) EXCEPTION- If a peanut 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 regulations promulgated by the Secretary.

    ‘(d) ACREAGE REPORTS- As a condition on the receipt of any benefits under this chapter, the Secretary shall require the peanut producers on a farm to submit to the Secretary acreage reports for the farm.

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

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

‘SEC. 158F. PLANTING FLEXIBILITY.

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

    ‘(b) LIMITATIONS AND EXCEPTIONS REGARDING CERTAIN COMMODITIES-

      ‘(1) LIMITATIONS- The planting of the following agricultural commodities shall be prohibited on peanut acres:

        ‘(A) Fruits.

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

        ‘(C) In the case of the 2003 and subsequent crops of an agricultural commodity, wild rice.

      ‘(2) EXCEPTIONS- Paragraph (1) shall not limit the planting of an agricultural commodity specified in paragraph (1)--

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

        ‘(B) on a farm that the Secretary determines has a history of planting agricultural commodities specified in paragraph (1) on peanut acres, except that direct payments and counter-cyclical payments shall be reduced by an acre for each acre planted to the agricultural commodity; or

        ‘(C) by the peanut producers on a farm that the Secretary determines has an established planting history of a specific agricultural commodity specified in paragraph (1), except that--

          ‘(i) the quantity planted may not exceed the average annual planting history of the agricultural commodity by the peanut producers on the farm during the 1996 through 2001 crop years (excluding any crop year in which no plantings were made), as determined by the Secretary; and

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

‘SEC. 158G. MARKETING ASSISTANCE LOANS AND LOAN DEFICIENCY PAYMENTS FOR PEANUTS.

    ‘(a) NONRECOURSE LOANS AVAILABLE-

      ‘(1) AVAILABILITY- For each of the 2002 through 2006 crops of peanuts, the Secretary shall make available to peanut producers on a farm nonrecourse marketing assistance loans for peanuts produced on the farm.

      ‘(2) TERMS AND CONDITIONS- The loans shall be made under terms and conditions that are prescribed by the Secretary and at the loan rate established under subsection (b).

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

      ‘(4) TREATMENT OF CERTAIN COMMINGLED COMMODITIES- In carrying out this section, the Secretary shall make loans to peanut producers on a farm that would be eligible to obtain a marketing assistance loan but for the fact the peanuts owned by the peanut producers on the farm are commingled with other peanuts of other producers in facilities unlicensed for the storage of agricultural commodities by the Secretary or a State licensing authority, if the peanut producers on a farm obtaining the loan agree to immediately redeem the loan collateral in accordance with section 158E.

      ‘(5) 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 peanut producers on a farm through--

        ‘(A) a designated marketing association of peanut producers that is approved by the Secretary, which may own or construct necessary storage facilities. In the Southeast and Southwest areas such designated marketing association shall be operated primarily on behalf of peanut producers. The designated area marketing association shall be allowed to form marketing pools for peanuts by type and quality, including the creation of a separate pool for Valencia peanuts in New Mexico;

        ‘(B) the Farm Service Agency; or

        ‘(C) a loan servicing agent approved by the Secretary.

      ‘(6) LOAN SERVICING AGENT- If approved by a majority of historical peanut producers in a State voting in a referendum conducted by the Secretary, as a condition of the Secretary’s approval of an entity to serve as a loan servicing agent or to handle or store peanuts for producers that receive any marketing loan benefits in the State, the entity shall agree to provide adequate storage (if available) and handling of peanuts at the commercial rate to other approved loan servicing agents and marketing associations.

    ‘(b) LOAN RATE- The loan rate for a marketing assistance loan for peanuts under subsection (a) shall be equal to $400 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- The Secretary shall permit peanut producers on a farm to repay a marketing assistance loan for peanuts under subsection (a) at a rate that is the lesser of--

      ‘(1) the loan rate established for peanuts under subsection (b), plus interest (as determined by the Secretary); or

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

        ‘(A) minimize potential loan forfeitures;

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

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

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

    ‘(e) LOAN DEFICIENCY PAYMENTS-

      ‘(1) AVAILABILITY- The Secretary may make loan deficiency payments available to the peanut 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 payments under this subsection.

      ‘(2) AMOUNT- A loan deficiency payment under this subsection shall be obtained by multiplying--

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

        ‘(B) the quantity of the peanuts produced by the peanut producers on the farm, excluding any quantity for which the producers on the farm obtain a loan under subsection (a).

      ‘(3) LOAN PAYMENT RATE- For purposes of this subsection, the loan 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) TIME FOR PAYMENT- The Secretary shall make a payment under this subsection to the peanut producers on a farm with respect to a quantity of peanuts as of the earlier of--

        ‘(A) the date on which the peanut producers on the farm marketed or otherwise lost beneficial interest in the peanuts, as determined by the Secretary; or

        ‘(B) the date the peanut producers on the farm request the payment.

    ‘(f) COMPLIANCE WITH CONSERVATION REQUIREMENTS- As a condition of the receipt of a marketing assistance loan under subsection (a), the peanut producers on a farm shall comply during the term of the loan with--

      ‘(1) applicable highly erodible land conservation requirements under subtitle B of title XII of the Food Security Act of 1985 (16 U.S.C. 3811 et seq.); and

      ‘(2) applicable wetland conservation requirements under subtitle C of title XII of that Act (16 U.S.C. 3821 et seq.).

    ‘(g) REIMBURSABLE AGREEMENTS AND PAYMENT OF EXPENSES- To the maximum extent practicable, the Secretary shall implement any reimbursable agreements or provide for the payment of expenses under this chapter in a manner that is consistent with the implementation of the agreements or payment of the expenses for other commodities.

    ‘(h) AREA MARKETING ASSOCIATION COSTS- If approved by a majority of historical peanut producers in a State voting in a referendum conducted by the Secretary, the Secretary shall deduct in a marketing assistance loan made to an area marketing association in a marketing area in the State, such costs as the area marketing association may reasonably incur in carrying out the responsibilities, operations, and activities of the association and Commodity Credit Corporation under this section.

    ‘(i) DEFINITION OF COMMINGLE- In this section and section 158H, the term ‘commingle’, with respect to peanuts, means--

      ‘(1) the mixing of peanuts produced on different farms by the same or different producers; or

      ‘(2) the mixing of peanuts pledged for marketing assistance loans with peanuts that are not pledged for marketing assistance loans, to facilitate storage.

‘SEC. 158H. QUALITY IMPROVEMENT.

    ‘(a) OFFICIAL INSPECTION-

      ‘(1) IN GENERAL- All peanuts placed under a marketing assistance loan under section 158G or otherwise sold or marketed shall be officially inspected and graded by a Federal or State inspector.

      ‘(2) ACCOUNTING FOR COMMINGLED PEANUTS- If approved by a majority of historical peanut producers in a State voting in a referendum conducted by the Secretary, all peanuts stored commingled with peanuts covered by a marketing assistance loan in the State shall be graded and exchanged on a dollar value basis, unless the Secretary determines that the beneficial interest in the peanuts covered by the marketing assistance loan have been transferred to other parties prior to demand for delivery.

    ‘(b) TERMINATION OF PEANUT ADMINISTRATIVE COMMITTEE- The Peanut Administrative Committee established under Marketing Agreement No. 1436, which regulates the quality of domestically produced peanuts under 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) ESTABLISHMENT OF PEANUT STANDARDS BOARD-

      ‘(1) IN GENERAL- The Secretary shall establish a Peanut Standards Board for the purpose of assisting in the establishment of quality standards with respect to peanuts.

      ‘(2) COMPOSITION- The Secretary shall appoint members to the Board that, to the maximum extent practicable, reflect all regions and segments of the peanut industry.

      ‘(3) DUTIES- The Board shall assist the Secretary in establishing quality standards for peanuts.

    ‘(d) CROPS- This section shall apply beginning with the 2002 crop of peanuts.’.

    (b) CONFORMING AMENDMENTS-

      (1) 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’.

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

SEC. 152. TERMINATION OF MARKETING QUOTAS FOR PEANUTS AND COMPENSATION TO PEANUT QUOTA HOLDERS.

    (a) REPEAL OF MARKETING QUOTAS FOR PEANUTS- Effective beginning with the 2002 crop of peanuts, part VI of subtitle B of title III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1357 et seq.) is repealed.

    (b) COMPENSATION OF QUOTA HOLDERS-

      (1) DEFINITIONS- In this subsection:

        (A) PEANUT QUOTA HOLDER-

          (i) IN GENERAL- The term ‘peanut quota holder’ means a person or entity that owns a farm that--

            (I) held a peanut quota established for the farm for the 2001 crop of peanuts under part VI of subtitle B of title III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1357 et seq.) (as in effect before the amendment made by subsection (a));

            (II) if there was not such a quota established for the farm for the 2001 crop of peanuts, would be eligible to have such a quota established for the farm for the 2002 crop of peanuts, in the absence of the amendment made by subsection (a); or

            (III) is otherwise a farm that was eligible for such a quota as of the effective date of the amendments made by this section.

          (ii) SEED OR EXPERIMENTAL PURPOSES- The Secretary shall apply the definition of ‘peanut quota holder’ without regard to temporary leases, transfers, or quotas for seed or experimental purposes.

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

      (2) CONTRACTS- The Secretary shall offer to enter into a contract with peanut quota holders for the purpose of providing compensation for the lost value of quota as a result of the repeal of the marketing quota program for peanuts under the amendment made by subsection (a).

      (3) PAYMENT PERIOD- Under a contract, the Secretary shall make payments to an eligible peanut quota holder for each of fiscal years 2002 through 2006.

      (4) TIME FOR PAYMENT- 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.

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

        (A) $0.11 per pound; by

        (B) the actual farm poundage quota (excluding any quantity for seed and experimental peanuts) established for the farm of a peanut quota holder under section 358-1(b) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1358-1(b)) (as in effect prior to the amendment made by subsection (a)) for the 2001 marketing year.

      (6) ASSIGNMENT OF PAYMENTS-

        (A) IN GENERAL- 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 to peanut quota holders under the contracts.

        (B) NOTICE- The peanut quota holder 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 subsection.

    (c) 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,’.

    (d) CROPS- This section and the amendments made by this section apply beginning with the 2002 crop of peanuts.

Subtitle D--Administration

SEC. 161. MARKETING ORDERS FOR CANEBERRIES.

    (a) IN GENERAL- Section 8c of the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, is amended--

      (1) in subsection (2)(A), by inserting ‘caneberries (including raspberries, blackberries, and loganberries),’ after ‘other than pears, olives, grapefruit, cherries,’; and

      (2) in subsection (6)(I), by striking ‘tomatoes,,’ and inserting ‘tomatoes, caneberries (including raspberries, blackberries, and loganberries),’.

    (b) CONFORMING AMENDMENT- Section 8e(a) of the Agricultural Adjustment Act (7 U.S.C. 608e-l(a)), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, is amended in the first sentence by striking ‘or apples’ and inserting ‘apples, or caneberries (including raspberries, blackberries, and loganberries)’.

SEC. 162. 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 ‘75,000,000’; and

      (2) in clause (ii), by striking ‘15 percent’ and inserting ‘10 percent’.

SEC. 163. 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 of Agriculture 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. 164. ADJUSTMENT AUTHORITY RELATED TO URUGUAY ROUND COMPLIANCE.

    Section 161 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7281) is amended by adding at the end the following:

    ‘(e) ADJUSTMENT AUTHORITY RELATED TO URUGUAY ROUND COMPLIANCE- If the Secretary determines that expenditures under subtitles A through D 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 subsection, will exceed the allowable levels for any applicable reporting period, the Secretary may make adjustments in the amount of the expenditures to ensure that the expenditures do not exceed, but are not less than, the allowable levels.

    ‘(f) EXPENDITURE LIMITATION- If the Secretary makes a determination under subsection (e) that expenditures will exceed allowable levels for any applicable reporting period and notifies Congress of the Secretary’s intent to make adjustments to ensure that expenditures do not exceed allowable levels, no expenditures under any program proposed to be adjusted by the Secretary may be made after the date that is 18 months after the date of the determination, unless a joint resolution disapproving the adjustments is enacted by both Houses of Congress within 60 days of the date of the notification.

    ‘(g) ANNUAL REPORT ON DOMESTIC SUPPORT- Not later than April 30 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--

      ‘(1) estimated levels of domestic support for agricultural commodities during the current marketing year and the following marketing year;

      ‘(2) the manner in which the Secretary intends to notify the World Trade Organization of the estimated levels; and

      ‘(3) proposed changes to domestic support programs subject to reduction commitments made in the context of WTO trade negotiations.’.

SEC. 165. SUSPENSION OF PERMANENT PRICE SUPPORT AUTHORITY.

    Section 171 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7301) is amended--

      (1) by striking ‘2002’ each place it appears and inserting ‘2006’; and

      (2) in subsection (a)(1)--

        (A) by striking subparagraph (E); and

        (B) by redesignating subparagraphs (F) through (I) as subparagraphs (E) through (H), respectively.

SEC. 166. COMMODITY PURCHASES.

    (a) IN GENERAL- Section 191 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7331 et seq.) is amended to read as follows:

‘SEC. 191. COMMODITY PURCHASES.

    ‘(a) IN GENERAL- To purchase agricultural commodities under this section, the Secretary shall use funds of the Commodity Credit Corporation in an amount equal to--

      ‘(1) for each of fiscal years 2002 and 2003, $130,000,000, of which not less than $100,000,000 shall be used for the purchase of specialty crops;

      ‘(2) for fiscal year 2004, $150,000,000, of which not less than $120,000,000 shall be used for the purchase of specialty crops;

      ‘(3) for fiscal year 2005, $170,000,000, of which not less than $140,000,000 shall be used for the purchase of specialty crops;

      ‘(4) for fiscal year 2006, $200,000,000, of which not less than $170,000,000 shall be used for the purchase of specialty crops; and

      ‘(5) for fiscal year 2007, $0.

    ‘(b) OTHER PURCHASES- The Secretary shall ensure that purchases of agricultural commodities under this section are in addition to purchases by the Secretary under any other law.

    ‘(c) PURCHASES BY DEPARTMENT OF DEFENSE FOR SCHOOL LUNCH PROGRAM- The Secretary shall provide not less than $50,000,000 for each fiscal year of the funds made available under subsection (a) to the Secretary of Defense to purchase fresh fruits and vegetables for distribution to schools and service institutions in accordance with section 6(a) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1755(a)) in a manner prescribed by the Secretary of Agriculture.

    ‘(d) PURCHASES FOR EMERGENCY FOOD ASSISTANCE PROGRAM- The Secretary shall use not less than $40,000,000 for each fiscal year of the funds made available under subsection (a) to purchase agricultural commodities for distribution under the Emergency Food Assistance Act of 1983 (7 U.S.C. 7501 et seq.).’.

    (b) SENSE OF THE SENATE CONCERNING PURCHASES OF CRANBERRIES-

      (1) FINDINGS- Congress finds that--

        (A) the price per hundred pounds of cranberries has dropped from approximately $70 to approximately $10;

        (B) the cost of producing cranberries is between $30 and $35 per hundred pounds, which is much more than the price per hundred pounds of cranberries for each of the past 2 years;

        (C) there is a serious economic crisis among cranberry growers in the United States, especially in the States of Wisconsin, Massachusetts, and New Jersey;

        (D) the Cranberry Marketing Committee has issued 2 marketing orders, but the marketing orders have not led to higher prices;

        (E) although Congress directed the Secretary of Agriculture to use $30,000,000 to purchase cranberries in fiscal year 2001, the price of cranberries has not risen significantly; and

        (F) the cranberry industry faces a surplus of cranberries and continuing low prices for cranberries.

      (2) SENSE OF THE SENATE- It is the sense of the Senate that the Secretary of Agriculture should attempt to alleviate the economic crisis among cranberry growers by continuing to expend for each fiscal year for the purchase of cranberries the same amount as the Secretary expended for fiscal year 2001.

SEC. 167. HARD WHITE WHEAT INCENTIVE PAYMENTS.

    Section 193 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 1508) is amended to read as follows:

‘SEC. 193. HARD WHITE WHEAT INCENTIVE PAYMENTS.

    ‘(a) IN GENERAL- For the period of crop years 2003 through 2005, the Secretary shall use $40,000,000 of funds of the Commodity Credit Corporation to provide incentive payments to producers of hard white wheat to ensure that hard white wheat, produced on a total of not more than 2,000,000 acres, meets minimum quality standards established by the Secretary.

    ‘(b) APPLICATION- The amounts payable to producers in the form of payments under this section shall be determined through the submission of bids by producers in such manner as the Secretary may prescribe.

    ‘(c) DEMAND FOR WHEAT- To be eligible to obtain a payment under this section, a producer shall demonstrate to the Secretary the availability of buyers and end-users for the wheat that is the covered by the payment.’.

SEC. 168. LIVESTOCK ASSISTANCE PROGRAM.

    Section 194 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 6933) is amended to read as follows:

‘SEC. 194. LIVESTOCK ASSISTANCE PROGRAM.

    ‘(a) IN GENERAL- The Secretary shall carry out a program to provide livestock feed assistance to livestock producers affected by disasters.

    ‘(b) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this section $500,000,000 for each of fiscal years 2003 through 2008.’.

SEC. 169. PAYMENT LIMITATIONS; NUTRITION AND COMMODITY PROGRAMS.

    (a) PAYMENT LIMITATIONS-

      (1) IN GENERAL- Section 1001 of the Food Security Act of 1985 (7 U.S.C. 1308) is amended to read as follows:

‘SEC. 1001. PAYMENT LIMITATIONS.

    ‘(a) DEFINITIONS- In this section and sections 1001A through 1001F:

      ‘(1) BENEFICIAL INTEREST- The term ‘beneficial interest’ means an interest in an entity that is at least--

        ‘(A) 10 percent; or

        ‘(B) a lower percentage, which the Secretary shall establish, on a case-by-case basis, as needed to achieve the purposes of this section and sections 1001A through 1001F, including effective implementation of section 1001A(b).

      ‘(2) COUNTER-CYCLICAL PAYMENT- The term ‘counter-cyclical payment’ means a payment made under section 114 or 158D of the Federal Agriculture Improvement and Reform Act of 1996.

      ‘(3) DIRECT PAYMENT- The term ‘direct payment’ means a payment made under section 113 or 158C of the Federal Agriculture Improvement and Reform Act of 1996.

      ‘(4) ENTITY-

        ‘(A) IN GENERAL- The term ‘entity’ means--

          ‘(i) an entity that (subject to the requirements of this section and section 1001A) is eligible to receive a payment under subsection (b) or (c);

          ‘(ii) a corporation, joint stock company, association, limited partnership, charitable organization, a grantor of a revocable trust, or other similar entity (as determined by the Secretary); and

          ‘(iii) an entity that is participating in a farming operation as a partner in a general partnership or as a participant in a joint venture.

        ‘(B) EXCLUSION- Except in section 1001F, the term ‘entity’ does not include an entity that is a general partnership or joint venture.

      ‘(5) INDIVIDUAL- The term ‘individual’ means--

        ‘(A) a natural person, and minor children of the natural person (as determined by the Secretary), that (subject to the requirements of this section and section 1001A) is eligible to receive a payment under subsection (b) or (c); and

        ‘(B) an individual participating in a farming operation as a partner in a general partnership, a participant in a joint venture, a grantor of a revocable trust, or a participant in a similar entity (as determined by the Secretary).

      ‘(6) LOAN COMMODITY- The term ‘loan commodity’ has the meaning given the term in section 102 of the Federal Agriculture Improvement and Reform Act of 1996.

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

    ‘(b) LIMITATIONS ON DIRECT AND COUNTER-CYCLICAL PAYMENTS- Subject to subsections (d) through (i), the total amount of direct payments and counter-cyclical payments that an individual or entity may receive, directly or indirectly, during any fiscal year shall not exceed $75,000.

    ‘(c) LIMITATIONS ON MARKETING LOAN GAINS, LOAN DEFICIENCY PAYMENTS, AND COMMODITY CERTIFICATE TRANSACTIONS-

      ‘(1) IN GENERAL- Subject to subsections (d) through (i), the total amount of the payments and benefits described in paragraph (2) that an individual or entity may receive, directly or indirectly, during any crop year shall not exceed $150,000.

      ‘(2) PAYMENTS AND BENEFITS- Paragraph (1) shall apply to the following payments and benefits:

        ‘(A) MARKETING LOAN GAINS-

          ‘(i) REPAYMENT GAINS- Any gain realized by a producer from repaying a marketing assistance loan under section 131 or 158G(a) of the Federal Agriculture Improvement and Reform Act of 1996 for a crop of any loan commodity or peanuts, respectively, at a lower level than the original loan rate established for the loan commodity or peanuts under section 132 or 158G(d) of that Act, respectively.

          ‘(ii) FORFEITURE GAINS- In the case of settlement of a marketing assistance loan under section 131 or 158G(a) of that Act for a crop of any loan commodity or peanuts, respectively, by forfeiture, the amount by which the loan amount exceeds the repayment amount for the loan if the loan had been settled by repayment instead of forfeiture.

        ‘(B) LOAN DEFICIENCY PAYMENTS- Any loan deficiency payment received for a loan commodity or peanuts under section 135 or 158G(e) of that Act, respectively.

        ‘(C) COMMODITY CERTIFICATES- Any gain realized from the use of a commodity certificate issued by the Commodity Credit Corporation, as determined by the Secretary, including the use of a certificate for the settlement of a marketing assistance loan made under section 131 or 158G(a) of that Act.

    ‘(d) SETTLEMENT OF CERTAIN LOANS- Notwithstanding subtitle C and section 158G of the Federal Agriculture Improvement and Reform Act of 1996, if the amount of payments and benefits described in subsection (c)(2) attributed directly or indirectly to an individual or entity for a crop year reaches the limitation described in subsection (c)(1)--

      ‘(1) the portion of any unsettled marketing assistance loan made under section 131 or 158G(a) of that Act attributed directly or indirectly to the individual or entity shall be settled through the repayment of the total loan principal, plus applicable interest; and

      ‘(2) the Secretary may refuse to provide to the producer for the crop year any additional marketing assistance loans under section 131 or 158G(a) of that Act.

    ‘(e) PAYMENTS TO INDIVIDUALS AND ENTITIES-

      ‘(1) INTERESTS WITHIN THE SAME ENTITY- All individuals or entities that are owners of an entity, including shareholders, may not collectively receive payments directly or indirectly that are attributable to the ownership interests in the entity for a fiscal or corresponding crop year that exceed the limitations established under subsections (b) and (c).

      ‘(2) ALL INTERESTS OF AN INDIVIDUAL OR ENTITY- An individual or entity may not receive, directly or indirectly, through all ownership interests of the individual or entity from all sources, payments for a fiscal or corresponding crop year that exceed the limitations established under subsections (b) and (c).

    ‘(f) MARRIED COUPLES- During a fiscal and corresponding crop year, the total amount of payments and benefits described in subsections (b) and (c) that a married couple may receive directly or indirectly may not exceed--

      ‘(1) the limits described in subsections (b) and (c); plus

      ‘(2) if each spouse meets the other requirements established under this section and section 1001A, a combined total of an additional $50,000.

    ‘(g) PUBLIC SCHOOLS- The provisions of this section that limit payments to any individual or entity shall not be applicable to land owned by a public school district or land owned by a State that is used to maintain a public school.

    ‘(h) TIME LIMITS- The Secretary shall promulgate regulations that establish time limits for the various steps involved with notice, hearing, decision, and the appeals procedure in order to ensure expeditious handling and settlement of payment limitation disputes.

    ‘(i) GOOD FAITH RELIANCE- Notwithstanding any other provision of law, an action taken by an individual or other entity in good faith on action or advice of an authorized representative of the Secretary may be accepted as meeting the requirements of this section or section 1001A, to the extent the Secretary determines it is desirable in order to provide fair and equitable treatment.’.

      (2) SUBSTANTIVE CHANGE- Section 1001A(a) of the Food Security Act of 1985 (7 U.S.C. 1308-1(a)) is amended--

        (A) in the section heading, by striking ‘prevention of creation of entities to qualify as separate persons;’ and inserting ‘substantive change;’;

        (B) by striking ‘(a) PREVENTION’ and all that follows through the end of paragraph (2) and inserting the following:

    ‘(a) SUBSTANTIVE CHANGE-

      ‘(1) IN GENERAL- The Secretary may not approve (for purposes of the application of the limitations under this section) any change in a farming operation that otherwise will increase the number of individuals or entities to which the limitations under this section are applied unless the Secretary determines that the change is bona fide and substantive.

      ‘(2) FAMILY MEMBERS- For the purpose of paragraph (1), the addition of a family member to a farming operation under the criteria established under subsection (b)(3)(B) shall be considered a bona fide and substantive change in the farming operation.’;

        (C) in the first sentence of paragraph (3)--

          (i) by striking ‘as a separate person’; and

          (ii) by inserting ‘, as determined by the Secretary’ before the period at the end; and

        (D) by striking paragraph (4).

      (3) ACTIVELY ENGAGED IN FARMING- Section 1001A(b) of the Food Security Act of 1985 (7 U.S.C. 1308-1(b)) is amended--

        (A) by striking paragraph (1) and inserting the following:

      ‘(1) IN GENERAL- To be eligible to receive, directly or indirectly, payments or benefits (as described in subsections (b) and (c) of section 1001 as being subject to limitation) with respect to a particular farming operation an individual or entity shall be actively engaged in farming with respect to the operation, as provided under paragraphs (2), (3), and (4).’;

        (B) in paragraph (2)--

          (i) in subparagraph (A)(i), by striking subclause (II) and inserting the following:

            ‘(II) personal labor and active personal management (in accordance with subparagraph (F));’;

          (ii) by striking subparagraph (B) and inserting the following:

        ‘(B) ENTITIES- An entity (as defined in section 1001(a)) shall be considered as actively engaged in farming with respect to a farming operation if--

          ‘(i) the entity separately makes a significant contribution (based on the total value of the farming operation) of capital, equipment, or land;

          ‘(ii)(I) the stockholders or members that collectively own at least 50 percent of the combined beneficial interest in the entity make a significant contribution of personal labor or active personal management to the operation; or

          ‘(II) in the case of a corporation or entity in which all of the beneficial interests are held by family members (as defined in paragraph (3)(B))--

            ‘(aa) any stockholder (or household comprised of a stockholder and the spouse of the stockholder) who owns at least 10 percent of the beneficial interest and makes a significant contribution of personal labor or active personal management; or

            ‘(bb) any combination of stockholders who collectively own at least 10 percent of the beneficial interest and makes a significant contribution of personal labor or active personal management; and

          ‘(iii) the standards provided in clauses (ii) and (iii) of subparagraph (A), as applied to the entity, are met by the entity.’; and

          (iii) by adding at the end the following:

        ‘(E) ACTIVE PERSONAL MANAGEMENT- For an individual to be considered to be providing active personal management under this paragraph on behalf of the individual or entity, the management provided by the individual shall be personally provided on a regular, substantial, and continuous basis through the direct supervision and direction of--

          ‘(i) activities and labor involved in the farming operation; and

          ‘(ii) onsite services that are directly related and necessary to the farming operation.

        ‘(F) SIGNIFICANT CONTRIBUTION OF PERSONAL LABOR OR ACTIVE PERSONAL MANAGEMENT-

          ‘(i) IN GENERAL- For an individual to be considered to be providing a significant contribution of personal labor or active personal management under this paragraph on behalf of the individual or entity, the total contribution of personal labor and active personal management shall be at least equal to the lesser of--

            ‘(I) 1,000 hours annually; or

            ‘(II) 50 percent of the commensurate share of the total number of hours of personal labor and active personal management required to conduct the farming operation.

          ‘(ii) MINIMUM NUMBER OF LABOR HOURS- For the purpose of clause (i), the minimum number of labor hours required to produce each commodity shall be equal to the number of hours that would be necessary to conduct a farming operation for the production of each commodity that is comparable in size to an individual or entity’s commensurate share in the farming operation for the production of the commodity, based on the minimum number of hours per acre required to produce the commodity in the State where the farming operation is located, as determined by the Secretary.’;

        (C) in paragraph (3)--

          (i) by striking subparagraph (A) and inserting the following:

        ‘(A) LANDOWNERS- An individual or entity that is a landowner contributing the owned land and that meets the standard provided in clauses (ii) and (iii) of paragraph (2)(A), if--

          ‘(i) the landowner share rents the land;

          ‘(ii) the tenant is actively engaged in farming; and

          ‘(iii) the share received by the landowner is commensurate with the share of the crop or income received as rent; or

          ‘(iv)(I) the landowner makes a significant contribution of active personal management;

          ‘(II) the landowner formerly made a significant contribution of personal labor or active personal management on the land for which payments are received and ceased to make the contribution as a result of a disability, as determined by the Secretary; or

          ‘(III) the landowner or spouse of the landowner formerly made a significant contribution of personal labor or active personal management on the land for which payments are received and ceased to make the contribution as a result of death or retirement, and 1 or more family members of the landowner currently make a significant contribution of personal labor or active personal management on the land.’; and

          (ii) in subparagraph (B), by striking ‘persons’ and inserting ‘individuals and entities’; and

        (D) in paragraph (4)--

          (i) in the paragraph heading, by striking ‘PERSONS’ and inserting ‘INDIVIDUALS AND ENTITIES’;

          (ii) in the matter preceding subparagraph (A), by striking ‘persons’ and inserting ‘individuals and entities’; and

          (iii) in subparagraph (B)--

            (I) in the subparagraph heading, by striking ‘PERSONS’ and inserting ‘INDIVIDUALS AND ENTITIES’; and

            (II) by striking ‘person, or class of persons’ and inserting ‘individual or entity, or class of individuals or entities’;

        (E) in paragraph (5)--

          (i) by striking ‘A person’ and inserting ‘An individual or entity’; and

          (ii) by striking ‘such person’ and inserting ‘the individual or entity’; and

        (F) in paragraph (6), by striking ‘a person’ and inserting ‘an individual or entity’.

      (4) ADMINISTRATION- Section 1001A of the Food Security Act of 1985 (7 U.S.C. 1308-1) is amended by adding at the end the following:

    ‘(c) ADMINISTRATION-

      ‘(1) REVIEWS-

        ‘(A) IN GENERAL- During each of fiscal years 2002 through 2006, the Office of Inspector General for the Department of Agriculture shall conduct a review of the administration of the requirements of this section and sections 1001, 1001B, 1001C, and 1001E in at least 6 States.

        ‘(B) MINIMUM NUMBER OF COUNTIES- Each State review described in subparagraph (A) shall cover at least 5 counties in the State.

        ‘(C) REPORT- Not later than 90 days after completing a review described in subparagraph (A), the Inspector General for the Department of Agriculture shall issue a final report to the Secretary of the findings of the Inspector General.

      ‘(2) EFFECT OF REPORT- If a report issued under paragraph (1) reveals that significant problems exist in the implementation of payment limitation requirements of this section and sections 1001, 1001B, 1001C, and 1001E in a State and the Secretary agrees that the problems exist, the Secretary--

        ‘(A) shall initiate a training program regarding the payment limitation requirements; and

        ‘(B) may require that all payment limitation determinations regarding farming operations in the State be issued from the headquarters of the Farm Service Agency.’.

      (5) SCHEME OR DEVICE- Section 1001B of the Food Security Act of 1985 (7 U.S.C. 1308-2) is amended--

        (A) by striking ‘person’ each place it appears and inserting ‘individual or entity’; and

        (B) by striking ‘paragraphs (1) and (2)’ and inserting ‘subsections (b) and (c)’.

      (6) FOREIGN INDIVIDUALS AND ENTITIES- Section 1001C(b) of the Food Security Act of 1985 (7 U.S.C. 1308-3(b)) is amended in the first sentence by striking ‘considered a person that is’.

      (7) EDUCATION PROGRAM- Section 1001D(c) of the Food Security Act of 1985 (7 U.S.C. 1308-4(c)) is amended by striking ‘5 persons’ and inserting ‘5 individuals or entities’.

      (8) REPORT TO CONGRESS- No later than 180 days after the date of enactment of this Act, the Secretary of Agriculture shall provide a report to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate that describes--

        (A) how State and county office employees are trained regarding the payment limitation requirements of section 1001 through 1001E of the Food Security Act of 1985 (7 U.S.C. 1308 through 1308-5);

        (B) the general procedures used by State and county office employees to identify potential violations of the payment limitation requirements;

        (C) the requirements for State and county office employees to report serious violations of the payment limitation requirements, including violations of section 1001B of that Act to the county committee, higher level officials of the Farm Service Agency, and to the Office of Inspector General; and

        (D) the sanctions imposed against State and county office employees who fail to report or investigate potential violations of the payment limitation requirements.

    (b) ADJUSTED GROSS INCOME LIMITATION- The Food Security Act of 1985 is amended by inserting after section 1001E (7 U.S.C. 1308-5) the following:

‘SEC. 1001F. ADJUSTED GROSS INCOME LIMITATION.

    ‘(a) DEFINITIONS- In this section:

      ‘(1) ADJUSTED GROSS INCOME- The term ‘adjusted gross income’ means adjusted gross income of an individual or entity--

        ‘(A) as defined in section 62 of the Internal Revenue Code of 1986 and implemented in accordance with procedures established by the Secretary; and

        ‘(B) that is earned directly or indirectly from all agricultural and nonagricultural sources of an individual or entity for a fiscal or corresponding crop year.

      ‘(2) AVERAGE ADJUSTED GROSS INCOME-

        ‘(A) IN GENERAL- The term ‘average adjusted gross income’ means the average adjusted gross income of an individual or entity for each of the 3 preceding taxable years.

        ‘(B) EFFECTIVE ADJUSTED GROSS INCOME- In the case of an individual or entity that does not have an adjusted gross income for each of the 3 preceding taxable years, the Secretary shall establish rules that provide the individual or entity with an effective adjusted gross income for the applicable year.

    ‘(b) LIMITATION- Notwithstanding any other provision of title I of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7201 et seq.), an individual or entity shall not be eligible for a payment or benefit described in subsection (b) or (c) of section 1001 if the average adjusted gross income of the individual or entity exceeds $2,500,000.

    ‘(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 $2,500,000; 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 payment or benefit made in a fiscal year or corresponding crop year to an entity that has an average adjusted gross income of $2,500,000 or less, the payment shall be reduced by an amount that is commensurate with the direct and indirect ownership interest in the entity of each individual who has an average adjusted gross income in excess of $2,500,000 for that fiscal year or corresponding crop year.

    ‘(e) GENERAL PARTNERSHIPS AND JOINT VENTURES- For purposes of this section, a general partnership or joint venture shall be considered an entity.’.

    (c) FOOD STAMP PROGRAM-

      (1) INCREASE IN BENEFITS TO HOUSEHOLDS WITH CHILDREN- 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- Subject to the other provisions of this paragraph, the Secretary shall allow for each household a standard deduction that is equal to the greater of--

          ‘(i) the applicable percentage specified in subparagraph (D) of the applicable income standard of eligibility established under subsection (c)(1); or

          ‘(ii) the minimum deduction specified in subparagraph (E).

        ‘(B) GUAM- The Secretary shall allow for each household in Guam a standard deduction that is--

          ‘(i) equal to the applicable percentage specified in subparagraph (D) 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 less than the minimum deduction for Guam specified in subparagraph (E).

        ‘(C) HOUSEHOLDS OF 6 OR MORE MEMBERS- The income standard of eligibility established under subsection (c)(1) for a household of 6 members shall be used to calculate the standard deduction for each household of 6 or more members.

        ‘(D) APPLICABLE PERCENTAGE- For the purpose of subparagraph (A), the applicable percentage shall be--

          ‘(i) 8 percent for each of fiscal years 2002 through 2004;

          ‘(ii) 8.25 percent for each of fiscal years 2005 and 2006;

          ‘(iii) 8.5 percent for each of fiscal years 2007 and 2008;

          ‘(iv) 8.75 percent for fiscal year 2009; and

          ‘(v) 9 percent for each of fiscal years 2010 and 2011.

        ‘(E) MINIMUM DEDUCTION- The minimum deduction shall be $134, $229, $189, $269, and $118 for the 48 contiguous States and the District of Columbia, Alaska, Hawaii, Guam, and the Virgin Islands of the United States, respectively.’.

      (2) EXCESS SHELTER EXPENSE DEDUCTION-

        (A) IN GENERAL- Section 5(e)(7)(B) of the Food Stamp Act of 1977 (7 U.S.C. 2014(e)(7)(B)) is amended--

          (i) in clause (v), by striking ‘and’ at the end; and

          (ii) by striking clause (vi) and inserting the following:

          ‘(vi) for fiscal year 2002, $354, $566, $477, $416, and $279 per month, respectively;

          ‘(vii) for fiscal year 2003, $390, $624, $526, $458, and $307 per month, respectively; and

          ‘(viii) for fiscal years 2004 and each fiscal year thereafter, the applicable amount for the preceding fiscal year, as adjusted to reflect changes for the 12-month period ending the preceding November 30 in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor.’.

        (B) PROSPECTIVE AMENDMENTS- Effective October 1, 2009, section 5(e)(7) of the Food Stamp Act of 1977 (7 U.S.C. 2014(e)(7)) is amended--

          (i) by striking subparagraph (B); and

          (ii) by redesignating subparagraph (C) as subparagraph (B).

      (3) 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’.

      (4) 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’.

      (5) EFFECTIVENESS OF CERTAIN PROVISIONS- Section 413 and subsections (c) and (d) of section 434, and the amendments made by section 413 and subsections (c) and (d) of section 434, shall have no effect.

    (d) LOAN DEFICIENCY PAYMENTS-

      (1) ELIGIBILITY- Section 135 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7235) (as amended by section 126(1)) is amended by striking subsection (a) and inserting the following:

    ‘(a) IN GENERAL- The Secretary may make loan deficiency payments available to--

      ‘(1) producers on a farm that, although eligible to obtain a marketing assistance loan under section 131 with respect to a loan commodity, agree to forgo obtaining the loan for the covered commodity in return for payments under this section; and

      ‘(2) effective only for the 2000 and 2001 crop years, producers that, although not eligible to obtain such a marketing assistance loan under section 131, produce a loan commodity.’.

      (2) BENEFICIAL INTEREST- Section 135(e)(1) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7235(e)) (as amended by section 126(2)) is amended by striking ‘A producer’ and inserting ‘Effective for the 2001 through 2006 crops, a producer’.

    (e) LOAN AUTHORIZATION LEVELS- Section 346(b) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1994(b)) (as amended by section 529(1)(A)) is amended by striking paragraph (1) and inserting the following:

      ‘(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 2002 through 2006, 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.’.

    (f) BEGINNING FARMER AND RANCHER DEVELOPMENT PROGRAM- In addition to funds made available under the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2002 (Public Law 107-76), the Secretary of Agriculture shall use $5,000,000 of funds of the Commodity Credit Corporation for fiscal year 2002 to make loans described in section 346(b)(2)(A)(i) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1994(b)(2)(A)(i)).

    (g) INITIATIVE FOR FUTURE AGRICULTURE AND FOOD SYSTEMS- Section 401(b)(1) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7621(b)(1)) (as amended by section 741) is amended--

      (1) in subparagraph (A), by striking ‘$120,000,000’ and inserting ‘$130,000,000’; and

      (2) in subparagraph (B), by striking ‘$145,000,000’ and inserting ‘$225,000,000’.

    (h) SPECIALTY CROP INSURANCE INITIATIVE-

      (1) RESEARCH AND DEVELOPMENT FUNDING- Section 522(e) of the Federal Crop Insurance Act (7 U.S.C. 1522(e)) is amended by striking paragraph (1) and inserting the following:

      ‘(1) REIMBURSEMENTS- Of the amounts made available from the insurance fund established under section 516(c), the Corporation may use to provide reimbursements under subsection (b) not more than--

        ‘(A) $32,000,000 for fiscal year 2002;

        ‘(B) $27,500,000 for each of fiscal years 2003 and 2004;

        ‘(C) $25,000,000 for each of fiscal years 2005 and 2006; and

        ‘(D) $15,000,000 for fiscal year 2007 and each subsequent fiscal year.’.

      (2) EDUCATION AND INFORMATION FUNDING- Section 524(a)(4) of the Federal Crop Insurance Act (7 U.S.C. 1524(a)(4)) is amended by striking subparagraph (A) and inserting the following:

        ‘(A) for the education and information program established under paragraph (2)--

          ‘(i) $10,000,000 for fiscal year 2003;

          ‘(ii) $13,000,000 for fiscal year 2004;

          ‘(iii) $15,000,000 for each of fiscal years 2005 and 2006; and

          ‘(iv) $5,000,000 for fiscal year 2007 and each subsequent fiscal year; and’.

      (3) REPORTS- Not later than September 30, 2002, 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--

        (A) the progress made by the Corporation in research and development of innovative risk management products to include cost of production insurance that provides coverage for specialty crops, paying special attention to apples, asparagus, blueberries (wild and domestic), cabbage, canola, carrots, cherries, Christmas trees, citrus fruits, cucumbers, dry beans, eggplants, floriculture, grapes, greenhouse and nursery agricultural commodities, green peas, green peppers, hay, lettuce, maple, mushrooms, pears, potatoes, pumpkins, snap beans, spinach, squash, strawberries, sugar beets, and tomatoes;

        (B) the progress made by the Corporation in increasing the use of risk management products offered through the Corporation by producers of specialty crops, by small- and moderate-sized farms, and in areas that are underserved, as determined by the Secretary; and

        (C) how the additional funding provided under the amendments made by this section has been used.

    (i) EFFECTIVE DATE- This section and the amendments made by this section take effect 1 day after the date of enactment of this Act.

SEC. 170. RESTRICTION OF COMMODITY AND CROP INSURANCE PAYMENTS, LOANS, AND BENEFITS TO PREVIOUSLY CROPPED LAND; FOOD STAMP PROGRAM FOR CERTAIN QUALIFIED ALIENS.

    (a) RESTRICTION OF COMMODITY AND CROP INSURANCE PAYMENTS, LOANS, AND BENEFITS TO PREVIOUSLY CROPPED LAND- Section 194 of the Federal Agriculture Improvement and Reform Act of 1996 (Public Law 104-127; 110 Stat. 945) is amended to read as follows:

‘SEC. 194. RESTRICTION OF COMMODITY AND CROP INSURANCE PAYMENTS, LOANS, AND BENEFITS TO PREVIOUSLY CROPPED LAND.

    ‘(a) DEFINITIONS- In this section:

      ‘(1) AGRICULTURAL COMMODITY- The term ‘agricultural commodity’ has the meaning given the term in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602).

      ‘(2) EXCLUSIONS- The term ‘agricultural commodity’ does not include forage, livestock, timber, forest products, or hay.

      ‘(3) IN GENERAL- The term ‘considered planted’ shall include cropland that has been prevented from being planted at least 8 out of the past 10 years due to disaster related conditions as determined by the Secretary.

    ‘(b) COMMODITIES-

      ‘(1) IN GENERAL- Notwithstanding any other provision of this title, except as provided in paragraph (2), the Secretary shall not provide a crop payment, crop loan, or other crop benefit under this title to an owner or producer, with respect to an agricultural commodity produced on land during a crop year unless the land has been planted, considered planted, or devoted to an agricultural commodity during --

        ‘(A) at least 1 of the 5 crop years preceding the 2002 crop year; or

        ‘(B) at least 3 of the 10 crop years preceding the 2002 crop year.

      ‘(2) CROP ROTATION- Paragraph (1) shall not apply to an owner or producer, with respect to any agricultural commodity planted or considered planted, on land if the land--

        ‘(A) has been planted, considered planted, or devoted to an agricultural commodity during at least 1 of the 20 crop years preceding the 2002 crop year; and

        ‘(B) has been maintained, and will continue to be maintained, using long-term crop rotation practices, as determined by the Secretary.

    ‘(c) CROP INSURANCE- Notwithstanding any provision of the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.), the Federal Crop Insurance Corporation shall not pay premium subsidies or administrative costs of a reinsured company for insurance regarding a crop insurance policy of a producer under that Act unless the land that is covered by the insurance policy for an agricultural commodity--

      ‘(1) has been planted, considered planted, or devoted to an agricultural commodity during--

        ‘(A) at least 1 of the 5 crop years preceding the 2002 crop year; or

        ‘(B) at least 3 of the 10 crop years preceding the 2002 crop year; or

      ‘(2)(A) has been planted, considered planted, or devoted to an agricultural commodity during at least 1 of the 20 crop years preceding the 2002 crop year; and

      ‘(B) has been maintained, and will continue to be maintained, using long-term crop rotation practices, as determined by the Secretary.

    ‘(d) CONSERVATION RESERVE LAND- For purposes of this section, land that is enrolled in 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.) shall be considered planted to an agricultural commodity.

    ‘(e) LAND UNDER THE JURISDICTION OF AN INDIAN TRIBE- For purposes of this section, land that is under the jurisdiction of an Indian tribe (as defined in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b)) shall be considered planted to an agricultural commodity if--

      ‘(1) the land is planted to an agricultural commodity after the date of enactment of this subsection as part of an irrigation project that--

        ‘(A) is authorized by the Bureau of Reclamation or the Bureau of Indian Affairs; and

        ‘(B) is under construction prior to the date of enactment of this subsection; or

      ‘(2) the land becomes available for planting because of a settlement or statutory authorization of a water rights claim by an Indian tribe after the date of enactment of this subsection.’.

    (b) PARTIAL RESTORATION OF BENEFITS TO LEGAL IMMIGRANTS- Section 403(c)(2)(L) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1613(c)(2)(L)) (as amended by section 452(a)(2)(A)) is amended by inserting ‘provided to individuals under the age of 18’ after ‘benefits’.

    (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)) (as amended by section 452(c)(2)) is amended by adding at the end the following:

        ‘(M) FOOD STAMP EXCEPTION FOR CERTAIN QUALIFIED ALIENS-

          ‘(i) With respect to eligibility for benefits for the specified Federal program described in paragraph (3)(B), paragraph (1) shall not apply, subject to the exclusion in clause (ii), to any individual who has continuously resided in the United States as a qualified alien for a period of 5 years or more beginning on the date on which the qualified alien entered the United States.

          ‘(ii) No alien who enters the country illegally and remains in the United States illegally for a period of one year or longer or has been in the United States as an illegal alien for a period of one year or longer, regardless of their status upon entering the country or their current status as a qualified alien, shall be eligible under clause (i) for benefits for the specified Federal program described in paragraph (3)(B).

          ‘(iii) Clause (ii) shall not apply to a qualified alien who has continuously resided in the United States for a period of 5 years or more as of the date of enactment of this Act.’.

      (2) EFFECTIVE DATE- The amendment made by paragraph (1) takes effect on April 1, 2003.

SEC. 171. REDUCTION OF COMMODITY BENEFITS TO IMPROVE NUTRITION ASSISTANCE.

    (a) INCOME PROTECTION PRICES FOR COUNTER-CYCLICAL PAYMENTS- Section 114(c) of the Federal Agriculture Improvement and Reform Act of 1996 (as amended by section 111) is amended by striking paragraph (2) and inserting the following:

      ‘(2) INCOME PROTECTION PRICES- The income protection prices for contract commodities under paragraph (1)(A) are as follows:

        ‘(A) Wheat, $3.4460 per bushel.

        ‘(B) Corn, $2.3472 per bushel.

        ‘(C) Grain sorghum, $2.3472 per bushel.

        ‘(D) Barley, $2.1973 per bushel.

        ‘(E) Oats, $1.5480 per bushel.

        ‘(F) Upland cotton, $0.6793 per pound.

        ‘(G) Rice, $9.2914 per hundredweight.

        ‘(H) Soybeans, $5.7431 per bushel.

        ‘(I) Oilseeds (other than soybeans), $0.1049 per pound.’.

    (b) LOAN RATES FOR MARKETING ASSISTANCE LOANS-

      (1) IN GENERAL- Section 132 of the Federal Agriculture Improvement and Reform Act of 1996 (as amended by section 123(a)) is amended to read as follows:

‘SEC. 132. LOAN RATES.

    ‘The loan rate for a marketing assistance loan under section 131 for a loan commodity shall be--

      ‘(1) in the case of wheat, $2.9960 per bushel;

      ‘(2) in the case of corn, $2.0772 per bushel;

      ‘(3) in the case of grain sorghum, $2.0772 per bushel;

      ‘(4) in the case of barley, $1.9973 per bushel;

      ‘(5) in the case of oats, $1.4980 per bushel;

      ‘(6) in the case of upland cotton, $0.5493 per pound;

      ‘(7) in the case of extra long staple cotton, $0.7965 per pound;

      ‘(8) in the case of rice, $6.4914 per hundredweight;

      ‘(9) in the case of soybeans, $5.1931 per bushel;

      ‘(10) in the case of oilseeds (other than soybeans), $0.0949 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, $2.00 per pound;

      ‘(14) in the case of honey, $0.60 per pound;

      ‘(15) in the case of dry peas, $6.78 per hundredweight;

      ‘(16) in the case of lentils, $12.79 per hundredweight;

      ‘(17) in the case of large chickpeas, $17.44 per hundredweight; and

      ‘(18) in the case of small chickpeas, $8.10 per hundredweight.’.

      (2) ADJUSTMENT OF LOANS-

        (A) IN GENERAL- The amendment made by section 123(b) is repealed.

        (B) APPLICABILITY- Section 162 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7282) shall be applied and administered as if the amendment made by section 123(b) had not been enacted.

    (c) FOOD STAMP PROGRAM-

      (1) SIMPLIFIED RESOURCE ELIGIBILITY LIMIT- Section 5(g)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2014(g)(1)) is amended by striking ‘a member who is 60 years of age or older’ and inserting ‘an elderly or disabled member’.

      (2) INCREASE IN BENEFITS TO HOUSEHOLDS WITH CHILDREN- 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- Subject to the other provisions of this paragraph, the Secretary shall allow a standard deduction for each household that is--

          ‘(i) equal to the applicable percentage specified in subparagraph (D) of the income standard of eligibility established under subsection (c)(1); but

          ‘(ii) not less than the minimum deduction specified in subparagraph (E).

        ‘(B) GUAM- The Secretary shall allow a standard deduction for each household in Guam that is--

          ‘(i) equal to the applicable percentage specified in subparagraph (D) 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 less than the minimum deduction for Guam specified in subparagraph (E).

        ‘(C) HOUSEHOLDS OF 6 OR MORE MEMBERS- The income standard of eligibility established under subsection (c)(1) for a household of 6 members shall be used to calculate the standard deduction for each household of 6 or more members.

        ‘(D) APPLICABLE PERCENTAGE- For the purpose of subparagraph (A), the applicable percentage shall be--

          ‘(i) 8 percent for each of fiscal years 2002 through 2004;

          ‘(ii) 8.5 percent for each of fiscal years 2005 through 2007;

          ‘(iii) 9 percent for each of fiscal years 2008 through 2010; and

          ‘(iv) 10 percent for each fiscal year thereafter.

        ‘(E) MINIMUM DEDUCTION- The minimum deduction shall be $134, $229, $189, $269, and $118 for the 48 contiguous States and the District of Columbia, Alaska, Hawaii, Guam, and the Virgin Islands of the United States, respectively.’.

      (3) EFFECTIVENESS OF CERTAIN PROVISIONS- Sections 413 and 165(c)(1) shall have no effect.

SEC. 172. REPORTS ON EQUITABLE RELIEF AND MISACTION-MISINFORMATION REQUESTS.

    Section 195 of the Federal Agriculture Improvement and Reform Act of 1996 (Public Law 104-127; 110 Stat. 946) is amended to read as follows:

‘SEC. 195. REPORTS ON EQUITABLE RELIEF AND MISACTION-MISINFORMATION REQUESTS.

    ‘(a) IN GENERAL- Not later than 90 days after the date of enactment of the Agriculture, Conservation, and Rural Enhancement Act of 2002 and not later than December 1 of fiscal year 2003 and each subsequent fiscal 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--

      ‘(1) the number of requests received by the Secretary during the preceding fiscal year for equitable relief under programs carried out by the Farm Service Agency and the Natural Resources Conservation Service, including a description (by program) of--

        ‘(A) the number of requests received;

        ‘(B) the number of requests approved by the Secretary; and

        ‘(C) the basis for the approval or denial of the requests; and

      ‘(2) the number of requests received by the Secretary during the preceding fiscal year for relief described in section 326 of the Food and Agriculture Act of 1962 (7 U.S.C. 1339a) with respect to programs carried out under this title, including a description (by program) of--

        ‘(A) the number of requests received;

        ‘(B) the number of requests approved by the Secretary; and

        ‘(C) the basis for the approval or denial of the requests.

    ‘(b) APPEALS- The Secretary, acting through the Director of the National Appeals Division, shall include in each report submitted under subsection (a) a description of actions taken by the Division taken during the preceding fiscal year with respect to requests for relief described in subsection (a).’.

SEC. 173. ESTIMATES OF NET FARM INCOME.

    Title I of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7201 et seq.) is amended by adding at the end the following:

‘SEC. 197. 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--

        ‘(A) livestock;

        ‘(B) loan commodities; and

        ‘(C) agricultural commodities other than loan commodities.’.

SEC. 174. 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. 175. AGRICULTURAL PRODUCERS SUPPLEMENTAL PAYMENTS AND ASSISTANCE.

    (a) IN GENERAL- The Secretary of Agriculture may use such funds of the Commodity Credit Corporation as are necessary to provide payments and assistance under Public Law 107-25 (115 Stat. 201) to persons that (as determined by the Secretary)--

      (1) are eligible to receive the payments or assistance; but

      (2) did not receive the payments or assistance prior to October 1, 2001.

    (b) LIMITATION- The amount of payments or assistance provided under Public Law 107-25 and this section to an eligible person described in subsection (a) shall not exceed the amount of payments or assistance the person would have been eligible to receive under Public Law 107-25.

Subtitle E--Payment Limitation Commission

SEC. 181. ESTABLISHMENT OF COMMISSION.

    (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 subtitle as the ‘Commission’).

    (b) MEMBERSHIP-

      (1) COMPOSITION-

        (A) IN GENERAL- The Commission shall be composed of 11 members appointed as follows:

          (i) 3 members shall be appointed by the President, of whom 2 shall be from land grant colleges or universities and have expertise in agricultural economics.

          (ii) 1 member shall be appointed by the Majority Leader of the Senate.

          (iii) 1 member shall be appointed by the Minority Leader of the Senate.

          (iv) 1 member shall be appointed by the Speaker of the House of Representatives.

          (v) 1 member shall be appointed by the Minority Leader of the House of Representatives.

          (vi) 1 member shall be appointed by the Chairman of the Committee on Agriculture, Nutrition, and Forestry of the Senate.

          (vii) 1 member shall be appointed by the ranking minority member of the Committee on Agriculture, Nutrition, and Forestry of the Senate.

          (viii) 1 member shall be appointed by the Chairman of the Committee on Agriculture of the House of Representatives.

          (ix) 1 member shall be appointed by the ranking minority member of the Committee on Agriculture of the House of Representatives.

        (B) DIVERSITY OF VIEWS- The appointing authorities under subparagraph (A) shall seek to ensure that the membership of the Commission has a diversity of experiences and expertise on the issues to be studied by the Commission, such as agricultural production, agricultural lending, farmland appraisal, agricultural accounting and finance, and other relevant areas.

      (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.

    (c) TERM; VACANCIES-

      (1) TERM- A member shall be appointed for the life of the Commission.

      (2) VACANCIES- A vacancy on the Commission--

        (A) shall not affect the powers of the Commission; and

        (B) shall be filled in the same manner as the original appointment was made.

    (d) 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.

    (e) MEETINGS- The Commission shall meet--

      (1) on a regular basis, as determined by the Chairperson; and

      (2) at the call of the Chairperson or a majority of the members of the Commission.

    (f) 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.

    (g) CHAIRPERSON- The Secretary shall appoint 1 of the members of the Commission to serve as Chairperson of the Commission.

SEC. 182. DUTIES.

    (a) COMPREHENSIVE REVIEW- The Commission shall conduct a comprehensive review of--

      (1) the laws (including regulations) that apply or fail to apply payment limitations to agricultural commodity and conservation programs administered by the Secretary;

      (2) the impact that failing to apply effective payment limitations has on--

        (A) the agricultural producers that participate in the programs;

        (B) overproduction of agricultural commodities;

        (C) the prices that agricultural producers receive for agricultural commodities in the marketplace; and

        (D) land prices and rental rates;

      (3) the feasibility of improving the application and effectiveness of payment limitation requirements, including the use of commodity certificates and the forfeiture of loan collateral; and

      (4) alternatives to payment limitation requirements in effect on the date of enactment of this Act that would apply meaningful limitations to improve the effectiveness and integrity of the requirements.

    (b) RECOMMENDATIONS- In carrying out the review under subsection (a), the Commission shall develop specific recommendations for modifications to applicable legislation and regulations that would improve payment limitation requirements.

    (c) 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 review conducted, and any recommendations developed, under this section.

SEC. 183. POWERS.

    (a) 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 subtitle.

    (b) INFORMATION FROM FEDERAL AGENCIES-

      (1) IN GENERAL- The Commission may secure directly from a Federal agency such information as the Commission considers necessary to carry out this subtitle.

      (2) PROVISION OF INFORMATION- On request of the Chairperson of the Commission, the head of the agency shall provide the information to the Commission.

    (c) 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.

    (d) 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.

SEC. 184. COMMISSION PERSONNEL MATTERS.

    (a) 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.

    (b) 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.

SEC. 185. 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. 186. FUNDING.

    Of the funds of the Commodity Credit Corporation, the Secretary shall use not more than $100,000 to carry out this subtitle.

SEC. 187. TERMINATION OF COMMISSION.

    The Commission shall terminate on the day after the date on which the Commission submits the report of the Commission under section 182(c).

Subtitle F--Emergency Agriculture Assistance

SEC. 191. INCOME LOSS ASSISTANCE.

    (a) IN GENERAL- The Secretary of Agriculture (referred to in this subtitle as the ‘Secretary’) shall use $1,800,000,000 of funds of the Commodity Credit Corporation to make emergency financial assistance available to producers on a farm that have incurred qualifying income losses in calendar year 2001, including losses due to army worms.

    (b) ADMINISTRATION- The Secretary shall make assistance available under this section in the same manner as provided under section 815 of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2001 (Public Law 106-387; 114 Stat. 1549A-55), including using the same loss thresholds for the quantity and economic losses as were used in administering that section.

    (c) USE OF FUNDS FOR CASH PAYMENTS- The Secretary may use funds made available under this section to make, in a manner consistent with this section, cash payments not for crop disasters, but for income loss to carry out the purposes of this section.

SEC. 192. LIVESTOCK ASSISTANCE PROGRAM.

    (a) IN GENERAL- The Secretary shall use $500,000,000 of the funds of the Commodity Credit Corporation to make and administer payments for livestock losses to producers for 2001 losses in a county that has received an emergency designation by the President or the Secretary after January 1, 2001, of which $12,000,000 shall be made available for the American Indian livestock program under section 806 of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2001 (Public Law 106-387; 114 Stat. 1549A-51).

    (b) ADMINISTRATION- The Secretary shall make assistance available under this section in the same manner as provided under section 806 of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2001 (Public Law 105-277; 114 Stat. 1549A-51).

SEC. 193. MARKET LOSS ASSISTANCE FOR APPLE PRODUCERS.

    (a) IN GENERAL- The Secretary of Agriculture shall use $100,000,000 of funds of the Commodity Credit Corporation for fiscal year 2002 to make payments to apple producers, as soon as practicable after the date of enactment of this Act, for the loss of markets during the 2000 crop year.

    (b) PAYMENT QUANTITY- A payment to the producers on a farm for the 2000 crop year under this section shall be made on the lesser of--

      (1) the quantity of apples produced by the producers on the farm during the 2000 crop year; or

      (2) 5,000,000 pounds of apples.

    (c) LIMITATIONS- The Secretary shall not establish a payment limitation, or income eligibility limitation, with respect to payments made under this section.

SEC. 194. COMMODITY CREDIT CORPORATION.

    The Secretary shall use the funds, facilities, and authorities of the Commodity Credit Corporation to carry out this subtitle.

SEC. 195. ADMINISTRATIVE EXPENSES.

    (a) IN GENERAL- In addition to funds otherwise available, not later than 30 days after the date of enactment of this Act, out of any funds in the Treasury not otherwise appropriated, the Secretary of the Treasury shall transfer to the Secretary of Agriculture to pay the salaries and expenses of the Department of Agriculture in carrying out this subtitle $50,000,000, to remain available until expended.

    (b) RECEIPT AND ACCEPTANCE- The Secretary shall be entitled to receive, shall accept, and shall use to carry out this section the funds transferred under subsection (a), without further appropriation.

SEC. 196. REGULATIONS.

    (a) IN GENERAL- The Secretary may promulgate such regulations as are necessary to implement this subtitle.

    (b) PROCEDURE- The promulgation of the regulations and administration of this subtitle shall be made without regard to--

      (1) the notice and comment provisions of section 553 of title 5, United States Code;

      (2) 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

      (3) chapter 35 of title 44, United States Code (commonly known as the ‘Paperwork Reduction Act’).

    (c) CONGRESSIONAL REVIEW OF AGENCY RULEMAKING- In carrying out this section, the Secretary shall use the authority provided under section 808 of title 5, United States Code.

SEC. 197. EMERGENCY REQUIREMENT.

    The entire amount necessary to carry out this subtitle is designated by Congress as an emergency requirement pursuant to section 252(e) of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 901(e)).

TITLE II--CONSERVATION

Subtitle A--Conservation Security

SEC. 201. CONSERVATION SECURITY PROGRAM.

    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 the amount paid to a producer under a conservation security contract that is equal to the total of the amounts described in clauses (i) and (ii) of subparagraphs (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 provided under section 343(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1999(a)).

      ‘(3) BONUS AMOUNT- The term ‘bonus amount’ means the amount paid to a producer under a conservation security contract that is equal to the total of the amounts described in clauses (iii) and (iv) of subparagraph (C), and of clause (iii) of subparagraph (D) or (E), of section 1238C(b)(1), as appropriate.

      ‘(4) CONSERVATION PRACTICE- The term ‘conservation practice’ means a land-based farming technique that--

        ‘(A) requires planning, implementation, management, and maintenance; and

        ‘(B) promotes 1 or more of the purposes described in section 1238A(a).

      ‘(5) CONSERVATION SECURITY CONTRACT- The term ‘conservation security contract’ means a contract described in section 1238A(e).

      ‘(6) CONSERVATION SECURITY PLAN- The term ‘conservation security plan’ means a plan described in section 1238A(c).

      ‘(7) CONSERVATION SECURITY PROGRAM- The term ‘conservation security program’ means the program established under section 1238A(a).

      ‘(8) 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).

      ‘(9) NUTRIENT MANAGEMENT- The term ‘nutrient management’ means management of the quantity, source, placement, form, and timing of the land application of nutrients and other additions to soil on land enrolled in the conservation security program--

        ‘(A) to achieve or maintain adequate soil fertility for agricultural production;

        ‘(B) to minimize the potential for loss of environmental quality, including soil, water, fish and wildlife habitat, and air and water quality; and

        ‘(C) to reduce energy consumption.

      ‘(10) 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.

      ‘(11) RESOURCE OF CONCERN- The term ‘resource of concern’ means a conservation priority of a State and locality under section 1238A(c)(3).

      ‘(12) RESOURCE-CONSERVING CROP- The term ‘resource-conserving crop’ means--

        ‘(A) a perennial grass;

        ‘(B) a legume grown for use as--

          ‘(i) forage;

          ‘(ii) seed for planting; or

          ‘(iii) green manure;

        ‘(C) a legume-grass mixture;

        ‘(D) a small grain grown in combination with a grass or legume, whether interseeded or planted in succession; and

        ‘(E) such other plantings, including trees and annual grasses, as the Secretary considers appropriate for a particular area.

      ‘(13) RESOURCE-CONSERVING CROP ROTATION- The term ‘resource-conserving crop rotation’ means a crop rotation that--

        ‘(A) includes at least 1 resource-conserving crop;

        ‘(B) reduces erosion;

        ‘(C) improves soil fertility and tilth; and

        ‘(D) interrupts pest cycles.

      ‘(14) 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.

      ‘(15) SECRETARY- The term ‘Secretary’ means the Secretary of Agriculture, acting through the Natural Resources Conservation Service.

      ‘(16) TIER I CONSERVATION PRACTICE- The term ‘Tier I conservation practice’ means a conservation practice described in section 1238A(d)(4)(A)(ii).

      ‘(17) TIER I CONSERVATION SECURITY CONTRACT- The term ‘Tier I conservation security contract’ means a contract described in section 1238A(d)(4)(A).

      ‘(18) TIER II CONSERVATION PRACTICE- The term ‘Tier II conservation practice’ means a conservation practice described in section 1238A(d)(4)(B)(ii).

      ‘(19) TIER II CONSERVATION SECURITY CONTRACT- The term ‘Tier II conservation security contract’ means a contract described in section 1238A(d)(4)(B).

      ‘(20) TIER III CONSERVATION PRACTICE- The term ‘Tier III conservation practice’ means a conservation practice described in section 1238A(d)(4)(C)(ii).

      ‘(21) TIER III CONSERVATION SECURITY CONTRACT- The term ‘Tier III conservation security contract’ means a contract described in section 1238A(d)(4)(C).

‘SEC. 1238A. CONSERVATION SECURITY PROGRAM.

    ‘(a) IN GENERAL- For each of fiscal years 2003 through 2006, the Secretary shall establish a conservation security program to assist owners and operators of agricultural operations to promote, as is applicable for each operation--

      ‘(1) conservation of soil, water, energy, and other related resources;

      ‘(2) soil quality protection and improvement;

      ‘(3) water quality protection and improvement;

      ‘(4) air quality protection and improvement;

      ‘(5) soil, plant, or animal health and well-being;

      ‘(6) diversity of flora and fauna;

      ‘(7) on-farm conservation and regeneration of biological resources, including plant and animal germplasm;

      ‘(8) wetland restoration, conservation, and enhancement;

      ‘(9) wildlife habitat management, with special emphasis on species identified by any natural heritage program of the applicable State;

      ‘(10) reduction of greenhouse gas emissions and enhancement of carbon sequestration;

      ‘(11) environmentally sound management of invasive species; or

      ‘(12) any similar conservation purpose (as determined by the Secretary).

    ‘(b) ELIGIBILITY-

      ‘(1) ELIGIBLE OWNERS AND OPERATORS- 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-

        ‘(A) IN GENERAL- Except as provided in subparagraph (C)(iii), private agricultural land (including cropland, grassland, prairie land, pasture land, and rangeland) and land under the jurisdiction of an Indian tribe shall be eligible for enrollment in the conservation security program.

        ‘(B) FORESTED LAND- Private forested land shall be eligible for enrollment in the conservation security program if the forested land is part of the agricultural land described in subparagraph (A), including land that is used for--

          ‘(i) alley cropping;

          ‘(ii) forest farming;

          ‘(iii) forest buffers;

          ‘(iv) windbreaks;

          ‘(v) silvopasture systems; and

          ‘(vi) such other integrated agroforestry uses as the Secretary may determine to be appropriate.

        ‘(C) EXCLUSIONS-

          ‘(i) 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 except for land described in section 1231(b)(6).

          ‘(ii) 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.

          ‘(iii) CONVERSION TO CROPLAND- Land that is used for crop production after the date of enactment of this subchapter that had not been in crop production for at least 3 of the 10 years preceding that date (except for land enrolled in the conservation reserve program under subchapter B of chapter 1) shall not be eligible for enrollment in the conservation security program.

      ‘(3) SUSTAINABLE ECONOMIC USES- The Secretary shall permit a producer to implement, with respect to all eligible land covered by a conservation security plan, sustainable economic uses (including Tier II conservation practices) that--

        ‘(A) maintain the agricultural nature of the land; and

        ‘(B) are consistent with the natural resource and environmental benefits of the conservation security plan.

    ‘(c) CONSERVATION SECURITY PLANS-

      ‘(1) IN GENERAL- A conservation security plan shall--

        ‘(A) identify the resources and designated land to be conserved under the conservation security plan;

        ‘(B) describe--

          ‘(i) the tier of conservation security contracts, 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

          ‘(ii) as appropriate for the land covered by the conservation security contract, the minimum number, type, extent, and scope of conservation practices described in clause (i) that are required to be carried out on the land before the producer is eligible to receive--

            ‘(I) a base payment; and

            ‘(II) a bonus amount;

        ‘(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;

        ‘(D) meet the highly erodible land and wetland conservation requirements of subtitles B and C; and

        ‘(E) identify, and authorize the implementation of, sustainable economic uses described in subsection (b)(3).

      ‘(2) COMPREHENSIVE PLANNING- The Secretary shall encourage owners and operators that enter into conservation security contracts--

        ‘(A) to undertake a comprehensive examination of the opportunities for conserving natural resources and improving the profitability, environmental health, and quality of life in relation to their entire agricultural operation;

        ‘(B) to develop a long-term strategy for implementing, monitoring, and evaluating conservation practices and environmental results in the entire agricultural operation;

        ‘(C) to participate in other Federal, State, local, or private conservation programs;

        ‘(D) to maintain the agricultural integrity of the land; and

        ‘(E) to adopt innovative conservation technologies and management practices or update existing technologies and practices.

      ‘(3) STATE, TRIBAL, AND LOCAL CONSERVATION PRIORITIES-

        ‘(A) IN GENERAL- To the maximum extent practicable and in a manner consistent with the conservation security program, each conservation security plan shall address, at least, the conservation priorities of the State or Indian tribe, and locality in which the agricultural operation is located.

        ‘(B) ADMINISTRATION- The conservation priorities of the State, Indian tribe, and locality in which the agricultural operation is located shall be--

          ‘(i)(I) determined by the State conservationist, in consultation with the State technical committee established under subtitle G and the local subcommittee of the State technical committee; and

          ‘(II) approved by the Secretary; and

          ‘(ii) in the case of land under the jurisdiction of an Indian tribe--

            ‘(I) determined by the Indian tribe, after consultation with the Secretary; and

            ‘(II) approved by the Secretary.

      ‘(4) SUBMISSION OF PLAN-

        ‘(A) IN GENERAL- During the development of a conservation security plan by a producer, at the request of the producer, the Secretary shall supply to the producer a statement of the minimum number, type, and scope of conservation practices described in paragraph (1)(B)(ii).

        ‘(B) APPROVAL FOR BASE PAYMENTS- If a conservation security plan submitted to the Secretary contains, in addition to paragraph (1)(C), the conservation practices referred to in paragraph (1)(B)(ii)--

          ‘(i) the Secretary shall approve the conservation security plan; and

          ‘(ii) the producer of the conservation security plan, on approval of and compliance with the plan, as determined by the Secretary, shall be eligible to receive a base payment.

        ‘(C) APPROVAL FOR BONUS AMOUNTS- If a conservation security plan submitted to the Secretary contains a proposal for the implementation, maintenance, or improvement of a conservation practice that qualifies for a bonus amount under section 1238C(b)(1)(C)(iii), the Secretary may increase the payment of the producer by such bonus amount as the Secretary determines is appropriate.

    ‘(d) CONSERVATION CONTRACTS AND PRACTICES-

      ‘(1) IN GENERAL-

        ‘(A) ESTABLISHMENT OF TIERS- The Secretary shall establish 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 that--

            ‘(I) are necessary to achieve the purposes of the conservation security plan; and

            ‘(II) primarily provide for, and have as a primary purpose, resource protection and environmental improvement.

          ‘(ii) DETERMINATION-

            ‘(I) IN GENERAL- Subject to subclause (II), in determining the eligibility of a practice described in clause (i), the Secretary shall require, to the maximum extent practicable, the lowest cost alternatives be used to fulfill the purposes of the conservation security plan, as determined by the Secretary.

            ‘(II) INNOVATIVE TECHNOLOGIES- Subclause (I) shall not apply, to the maximum extent practicable, to the adoption of innovative technologies.

      ‘(2) ON-FARM RESEARCH AND DEMONSTRATION- With respect to land enrolled in the conservation security program that will be maintained using a Tier II conservation practice or a Tier III conservation practice, the Secretary may approve a conservation security plan that includes on-farm conservation research and demonstration activities, including--

        ‘(A) total farm planning;

        ‘(B) total resource management;

        ‘(C) integrated farming systems;

        ‘(D) germplasm conservation and regeneration;

        ‘(E) greenhouse gas reduction and carbon sequestration;

        ‘(F) agroecological restoration and wildlife habitat restoration;

        ‘(G) agroforestry;

        ‘(H) invasive species control;

        ‘(I) energy conservation and management;

        ‘(J) farm and environmental results monitoring and evaluation; or

        ‘(K) participation in research projects relating to water conservation and management through--

          ‘(i) recycling or reuse of water; or

          ‘(ii) more efficient irrigation of farmland.

      ‘(3) USE OF HANDBOOK AND GUIDES-

        ‘(A) IN GENERAL- In determining eligible conservation practices under the conservation security program, the Secretary shall use the National Handbook of Conservation Practices of the Natural Resources Conservation Service.

        ‘(B) CONSERVATION PRACTICE STANDARDS- To the maximum extent practicable, the Secretary shall establish guidance standards for implementation of eligible conservation practices that shall include measurable goals for enhancing and preventing degradation of resources.

        ‘(C) ADJUSTMENTS-

          ‘(i) IN GENERAL- After providing notice and an opportunity for public participation, the Secretary shall make such adjustments to the National Handbook of Conservation Practices, and the field office technical guides, of the Natural Resources Conservation Service as are necessary to carry out this chapter.

          ‘(ii) EFFECT ON PLAN- If the Secretary makes an adjustment to a practice under clause (i), the Secretary may require an adjustment to a conservation security plan in effect as of the date of the adjustment if the Secretary determines that the plan, without the adjustment, would significantly interfere with achieving the purposes of the conservation security program.

        ‘(D) PILOT TESTING-

          ‘(i) IN GENERAL- Under any of the 3 tiers of conservation practices established under paragraph (4), the Secretary may approve requests by a producer for pilot testing of new technologies and innovative conservation practices and systems.

          ‘(ii) INCORPORATION INTO STANDARDS-

            ‘(I) IN GENERAL- After evaluation by the Secretary and provision of notice and an opportunity for public participation, the Secretary may, as expeditiously as practicable, approve new technologies and innovative conservation practices and systems.

            ‘(II) INCORPORATION- If the Secretary approves a new technology or innovative conservation practice under subclause (I), the Secretary shall, as expeditiously as practicable, incorporate the technology or practice into the standards for implementation of conservation practices established under paragraph (3).

      ‘(4) TIERS- Subject to paragraph (5), to carry out this subsection, the Secretary shall establish the following 3 tiers of conservation contracts:

        ‘(A) TIER I CONSERVATION CONTRACTS-

          ‘(i) IN GENERAL- A conservation security plan for land enrolled in the conservation security program under a Tier I conservation security contract shall be maintained using Tier I conservation practices and shall, at a minimum--

            ‘(I) if applicable to the particular agricultural operation, address at least 1 resource of concern;

            ‘(II) apply to the total agricultural operation or to a particular unit of the agricultural operation;

            ‘(III) cover--

‘(aa) management of conservation practices that are being implemented as of the date on which the conservation security contract is entered into; and

‘(bb) conservation practices that are implemented after the date on which the conservation security contract is entered into; and

            ‘(IV) meet applicable standards for implementation of conservation practices established under paragraph (3).

          ‘(ii) CONSERVATION PRACTICES- Tier I conservation practices shall consist of, as appropriate for the agricultural operation of a producer, 1 or more of the following basic conservation activities:

            ‘(I) Nutrient management.

            ‘(II) Integrated pest management.

            ‘(III) Irrigation, water conservation, and water quality management.

            ‘(IV) Grazing pasture and rangeland management.

            ‘(V) Soil conservation, quality, and residue management.

            ‘(VI) Invasive species management.

            ‘(VII) Fish and wildlife habitat management, with special emphasis on species identified by any natural heritage program of the applicable State or the appropriate State agency.

            ‘(VIII) Fish and wildlife conservation and enhancement.

            ‘(IX) Air quality management.

            ‘(X) Energy conservation measures.

            ‘(XI) Biological resource conservation and regeneration.

            ‘(XII) Animal health management.

            ‘(XIII) Plant and animal germplasm conservation, evaluation, and development.

            ‘(XIV) Contour farming.

            ‘(XV) Strip cropping.

            ‘(XVI) Cover cropping.

            ‘(XVII) Sediment dams.

            ‘(XVIII) Any other conservation practice that the Secretary determines to be appropriate and comparable to other conservation practices described in this clause.

          ‘(iii) TIER II CONSERVATION CONTRACTS- A conservation security plan for land enrolled in the conservation security program that will be maintained using Tier I conservation contracts may include Tier II conservation practices.

        ‘(B) TIER II CONSERVATION PRACTICES-

          ‘(i) IN GENERAL- A conservation security plan for land enrolled in the conservation security program under a Tier II conservation security contract shall be maintained using Tier II conservation practices and shall, at a minimum--

            ‘(I) as applicable to the particular agricultural operation, address at least 1 resource of concern for the entire agricultural operation;

            ‘(II) cover--

‘(aa) management of conservation practices that are being implemented as of the date on which the conservation security contract is entered into; and

‘(bb) conservation practices that are implemented after the date on which the conservation security contract is entered into; and

            ‘(III) meet applicable resource management system criteria for 1 or more resources of concern of the agricultural operation, as specified in the conservation security contract.

          ‘(ii) CONSERVATION PRACTICES AND REQUIREMENTS- Tier II conservation practices and requirements shall consist of, as appropriate for the agricultural operation of a producer, any of the Tier I conservation practices and 1 or more of the following land use adjustment or protection practices:

            ‘(I) Resource-conserving crop rotations.

            ‘(II) Controlled, rotational grazing.

            ‘(III) Conversion of portions of cropland from a soil-depleting use to a soil-conserving use, including production of cover crops.

            ‘(IV) Partial field conservation practices (including windbreaks, grass waterways, shelter belts, filter strips, riparian buffers, wetland buffers, contour buffer strips, living snow fences, crosswind trap strips, field borders, grass terraces, wildlife corridors, and critical area planting appropriate to the agricultural operation).

            ‘(V) Fish and wildlife habitat conservation and restoration.

            ‘(VI) Native grassland and prairie protection and restoration.

            ‘(VII) Wetland protection and restoration.

            ‘(VIII) Agroforestry practices and systems as described in subsection (b)(2)(B).

            ‘(IX) Any other conservation practice involving modification of the use of land that the Secretary determines to be appropriate and comparable to other conservation practices described in this clause.

        ‘(C) TIER III CONSERVATION CONTRACTS-

          ‘(i) IN GENERAL- A conservation security plan for land enrolled in the conservation security program under a Tier III conservation security contract shall be maintained using Tier III conservation contracts and shall, at a minimum--

            ‘(I) address all applicable resources of concern in the total agricultural operation;

            ‘(II) cover--

‘(aa) management of conservation practices that are being implemented as of the date on which the conservation security contract is entered into; and

‘(bb) conservation practices that are implemented after the date on which the conservation security contract is entered into; and

            ‘(III) meet applicable resource management system criteria for 1 or more resources of concern of the agricultural operation, as specified in the conservation security contract.

          ‘(ii) CONSERVATION PRACTICES- Tier III conservation practices shall consist of, as appropriate for the agricultural operation of a producer (in addition to appropriate Tier I conservation practices and Tier II conservation practices), development, implementation, and maintenance of a conservation security plan that, over the term of the conservation security contract--

            ‘(I) integrates all necessary conservation practices to foster environmental enhancement and the long-term sustainability of the natural resource base of an agricultural operation; and

            ‘(II) improves profitability and sustainability associated with the agricultural operation.

      ‘(5) MINIMUM REQUIREMENTS- The minimum requirements for each tier of conservation practices described in paragraph (4) shall be--

        ‘(A)(i) determined by the State conservationist, in consultation with the State technical committee established under subtitle G and the local subcommittee of the State technical committee; and

        ‘(ii) approved by the Secretary; and

        ‘(B) in the case of land under the jurisdiction of an Indian tribe--

          ‘(i) determined by the Indian tribe, after consultation with the Secretary; and

          ‘(ii) approved by the Secretary.

    ‘(e) CONSERVATION SECURITY CONTRACTS-

      ‘(1) CONTRACTS-

        ‘(A) 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.

        ‘(B) REQUIRED COMPONENTS- A conservation security contract shall specifically describe the practices that are required under subsection (c)(1)(B).

      ‘(2) TERM- Subject to paragraphs (3) and (4)--

        ‘(A) a conservation security contract for land enrolled in the conservation security program of a producer that will be maintained using 1 or more Tier I conservation contracts shall have a term of 5 years; and

        ‘(B) a conservation security contract for land enrolled in the conservation security program that will be maintained using a Tier II conservation contract or Tier III conservation contract shall have a 5-year to 10-year term, as determined by the producer.

      ‘(3) MODIFICATIONS-

        ‘(A) OPTIONAL MODIFICATIONS-

          ‘(i) IN GENERAL- An owner or operator may apply to the Secretary to modify the conservation security plan to effectuate the purposes of the conservation security program.

          ‘(ii) APPROVAL BY THE SECRETARY- To be effective, any modification under clause (i)--

            ‘(I) shall be approved by the Secretary; and

            ‘(II) shall authorize the Secretary to redetermine, if necessary, the amount and timing of the payments under the conservation security contract and subsections (a) and (b) of section 1238C.

        ‘(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--

            ‘(I) 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; or

            ‘(II) the Secretary makes a change to the National Handbook of Conservation Practices of the Natural Resource Conservation Service under subsection (d)(3)(C).

          ‘(ii) PAYMENTS- The Secretary may adjust the amount and timing of the payment schedule under the conservation security contract to reflect any modifications made under this subparagraph.

          ‘(iii) DEADLINE- The Secretary may terminate a conservation security contract if a modification required under this subparagraph is not submitted to the Secretary in the form of an amended conservation security contract by the date that is 90 days after the date on which the Secretary issues a written request for the modification.

          ‘(iv) TERMINATION- a producer that is required to modify a conservation security contract under this subparagraph 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 fully complied with the terms and conditions of the conservation security contract before termination of the contract.

      ‘(4) RENEWAL-

        ‘(A) IN GENERAL- At the option of a producer, the conservation security contract of the producer may be renewed, for a term described in subparagraph (B), if--

          ‘(i) the producer agrees to any modification of the applicable conservation security contract that the Secretary determines to be necessary to achieve the purposes of the conservation security program;

          ‘(ii) the Secretary determines that the producer has complied with the terms and conditions of the conservation security contract, including the conservation security plan; and

          ‘(iii) in the case of a Tier I conservation security contract, the producer agrees to increase the conservation practices on land enrolled in the conservation security program by--

            ‘(I) adopting new conservation practices; or

            ‘(II) expanding existing practices to meet applicable resource management systems criteria.

        ‘(B) TERMS OF RENEWAL- Under subparagraph (A)--

          ‘(i) a conservation security contract for land enrolled in the conservation security program that will be maintained using Tier I conservation contracts may be renewed for 5-year terms;

          ‘(ii) in the case of a Tier II conservation security contract or a Tier III conservation security contract, the contract shall be renewed for 5-year to 10-year terms, at the option of the producer; and

          ‘(iii) participation in the conservation security program prior to the renewal of the conservation security contract shall not bar renewal more than once.

    ‘(f) NONCOMPLIANCE DUE TO CIRCUMSTANCES BEYOND THE CONTROL OF PRODUCERS- The Secretary shall include in the conservation security contract a provision, and may modify a conservation security contract under subsection (e)(3)(B), 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 plan; 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 payment 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) ADVANCE PAYMENT- At the time at which a producer enters into a conservation security contract, the Secretary shall, at the option of the producer, make an advance payment to the producer in an amount not to exceed--

      ‘(1) in the case of a Tier I conservation security contract, the greater of--

        ‘(A) $1,000; or

        ‘(B) 20 percent of the value of the annual payment under the contract, as determined by the Secretary;

      ‘(2) in the case of a Tier II conservation security contract, the greater of--

        ‘(A) $2,000; or

        ‘(B) 20 percent of the value of the annual payment under the contract, as determined by the Secretary; and

      ‘(3) in the case of a Tier III conservation security contract, the greater of--

        ‘(A) $3,000; or

        ‘(B) 20 percent of the value of the annual payment under the contract, as determined by the Secretary.

    ‘(b) ANNUAL PAYMENTS-

      ‘(1) CRITERIA FOR DETERMINING AMOUNT OF PAYMENTS-

        ‘(A) BASE RATE- In this paragraph, the term ‘base rate’ means the average county rental rate for the specific land use during the 2001 crop year, or another appropriate average county rate for the 2001 crop year, that ensures regional equity, as determined by the Secretary.

        ‘(B) PAYMENTS- A payment for a conservation practice under this paragraph shall be determined in accordance with subparagraphs (C) through (F).

        ‘(C) TIER I CONSERVATION CONTRACTS- The payment for a Tier I conservation security contract shall be comprised of the total of the following amounts:

          ‘(i) An amount equal to 6 percent of the base rate for land covered by the contract.

          ‘(ii) An amount equal to the following costs of practices covered by the conservation security contract, based on the average county costs for such practices for the 2001 crop year, as determined by the Secretary:

            ‘(I) 100 percent of the cost of--

‘(aa) the adoption of new management practices; and

‘(bb) the maintenance of new and existing land management and vegetative practices.

            ‘(II) 100 percent of the cost of maintenance of existing land-based structural practices approved by the Secretary.

            ‘(III)(aa) 75 percent (or, in the case of a limited resource producer (as determined by the Secretary) or a beginning farmer or rancher, 90 percent) of the cost of adoption of new land-based structural practices; or

            ‘(bb) 75 percent (or, in the case of a limited resource producer (as determined by the Secretary) or a beginning farmer or rancher, 90 percent) of the cost of the adoption of a structural practice for which a similar structural practice under the environmental quality incentives program established under chapter 4 would require maintenance, if the producer agrees to provide, without reimbursement, substantially equivalent maintenance.

          ‘(iii) A bonus amount determined by the Secretary for implementing or adopting 1 or more of the following practices:

            ‘(I) A practice adopted or maintained that, because of the extent and scope of the practice, maximizes the objectives of the conservation security program beyond the minimum requirements of the practices adopted or maintained.

            ‘(II) A practice adopted or maintained to address resources of concern and local conservation concerns beyond those identified as State or local conservation priorities.

            ‘(III) A practice adopted or maintained to address national priority concerns, as determined by the Secretary.

            ‘(IV) Participation by the producer in an on-farm conservation research, demonstration, or pilot project.

            ‘(V) Participation by the producer in a watershed or regional resource conservation plan that involves at least 75 percent of producers in a targeted area.

            ‘(VI) Recordkeeping, monitoring, and evaluation carried out by the producer that furthers the purposes of the conservation security program.

          ‘(iv) A bonus amount determined by the Secretary that reflects the status of a producer as a beginning farmer or rancher.

        ‘(D) TIER II CONSERVATION CONTRACTS- The payment for a Tier II conservation security contract shall be comprised of the total of the following amounts:

          ‘(i) An amount equal to 11 percent of the base rate for land covered by the conservation security contract.

          ‘(ii) An amount equal to the cost of practices covered by the conservation security contract, based on the average county costs for practices for the 2001 crop year, described in subparagraph (C)(ii).

          ‘(iii) A bonus amount determined by the Secretary in accordance with clauses (iii) and (iv) of subparagraph (C), except that the bonus amount under this clause may include any amount for the adoption or maintenance by the producer of any practice that exceeds resource management system standards.

        ‘(E) TIER III CONSERVATION CONTRACTS- The payment for a Tier III conservation security contract shall be comprised of the total of the following amounts:

          ‘(i) An amount equal to 20 percent of the base rate for land covered by the conservation security contract.

          ‘(ii) An amount equal to the cost of practices covered by the conservation security contract, based on the average county costs for practices for the 2001 crop year, described in subparagraph (C)(ii).

          ‘(iii) A bonus amount determined by the Secretary in accordance with subparagraph (D)(iii).

        ‘(F) EXCLUSION OF COSTS FOR PURCHASE OR MAINTENANCE OF EQUIPMENT OR NON-LAND BASED STRUCTURES- A payment under this subchapter shall not include any amount for the purchase or maintenance of equipment or a non-land based structure.

      ‘(2) TIME OF PAYMENT- The Secretary shall provide payments under a conservation security contract as soon as practicable after October 1 of each fiscal year.

      ‘(3) LIMITATION ON PAYMENTS-

        ‘(A) IN GENERAL- Subject to paragraphs (1), (2), (4), and (5), the Secretary shall, in amounts and for a term specified in a conservation security contract and taking into account any advance payments, make an annual payment, directly or indirectly, to the individual or entity covered by the 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, $50,000.

        ‘(B) LIMITATION ON NONBONUS 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 clauses (i) and (ii) of paragraph (1)(C), (1)(D), or (1)(E), as appropriate, in an amount that exceeds 75 percent of the applicable payment limitation.

        ‘(C) OTHER USDA PAYMENTS- If a producer has the same practices on the same land enrolled in the conservation security program and 1 or more other conservation programs administered by the Secretary, the Secretary shall include all payments from the conservation security program and the other conservation programs, other than payments for conservation easements, in applying the annual payment limitations under this paragraph.

        ‘(D) NON-USDA PAYMENTS-

          ‘(i) IN GENERAL- A payment described in clause (ii) shall not be considered an annual payment for purposes of the annual payment limitations under this paragraph.

          ‘(ii) PAYMENT- A payment referred to in clause (i) is a payment that--

            ‘(I) is for the same practice on the same land enrolled in the conservation security program; and

            ‘(II) is received from a Federal program that is not administered by the Secretary, or that is administered by any State, local, or private agricultural agency or organization.

        ‘(E) COMMENSURATE SHARE- To be eligible to receive a payment under this chapter, 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.

      ‘(4) LAND ENROLLED IN OTHER CONSERVATION PROGRAMS- Notwithstanding any other provision of law, if a producer has land enrolled in another conservation program administered by the Secretary and has applied to enroll the same land in the conservation security program, the producer may elect to--

        ‘(A) convert the contract under the other conservation program to a conservation security contract, without penalty, except that this subparagraph shall not apply to a contract entered into under--

          ‘(i) the conservation reserve program under subchapter B of chapter 1; or

          ‘(ii) the wetlands reserve program under subchapter C of chapter 1; or

        ‘(B) have each annual payment to the producer under this subsection reduced to reflect payment for practices the producer receives under the other conservation program, except that the annual payment under this subsection shall not be reduced by the amount of any incentive received under a program referred to in section 1231(b)(6) for qualified practices that enhance or extend the conservation benefit achieved under the other conservation program.

      ‘(5) WASTE STORAGE OR TREATMENT FACILITIES- A payment to a producer under this subchapter shall not be provided for the purpose of construction or maintenance of animal waste storage or treatment facilities or associated waste transport or transfer devices for animal feeding operations.

    ‘(c) MINIMUM PRACTICE REQUIREMENT- In determining a payment under subsection (a) or (b) for an owner, operator, or producer that receives a payment under another program administered by the Secretary that is contingent on complying with requirements under subtitle B or C of title XII of the Food Security Act of 1985 (16 U.S.C. 3811 et seq.) relating to the use of highly erodible land or wetland, a payment under this chapter for 1 or more practices on land subject to those requirements shall be for practices that exceed minimum requirements for the owner, operator, or producer under those subtitles, as determined by the Secretary.

    ‘(d) REGULATIONS-

      ‘(1) IN GENERAL- The Secretary shall promulgate regulations that--

        ‘(A) provide for adequate safeguards to protect the interests of tenants and sharecroppers, including provision for sharing payments, on a fair and equitable basis; and

        ‘(B) prescribe such other rules as the Secretary determines to be necessary to ensure a fair and reasonable application of the limitations established under subsections (a) and (b).

      ‘(2) PENALTIES FOR SCHEMES OR DEVICES-

        ‘(A) IN GENERAL- If the Secretary determines that an individual or entity has adopted a scheme or device to evade, or that has the purpose of evading, the regulations promulgated under paragraph (1), the individual or entity shall be ineligible to participate in the conservation security program for--

          ‘(i) the year for which the scheme or device was adopted; and

          ‘(ii) each of the following 5 years.

        ‘(B) FRAUD- If the Secretary determines that fraud was committed in connection with the scheme or device, the individual or entity shall be ineligible to participate in the conservation security program for--

          ‘(i) the year for which the scheme or device was adopted; and

          ‘(ii) each of the following 10 years.

    ‘(e) TERMINATION-

      ‘(1) IN GENERAL- Subject to section 1238B, the Secretary shall allow a producer to terminate the conservation security contract.

      ‘(2) PAYMENTS- the producer may retain any or all payments received under a terminated conservation security contract if--

        ‘(A) 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

        ‘(B) the Secretary determines that termination of the contract will not defeat the purposes of the conservation security plan of the producer.

    ‘(f) 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 the transferee.

    ‘(g) TECHNICAL ASSISTANCE-

      ‘(1) IN GENERAL- For each of fiscal years 2003 through 2006, the Secretary shall provide technical assistance to producers for the development and implementation of conservation security contracts, in an amount not to exceed 20 percent of amounts expended for the fiscal year.

      ‘(2) COORDINATION BY THE SECRETARY- The Secretary shall provide overall technical coordination and leadership for the conservation security program, including final approval of all conservation security plans.

    ‘(h) CONSERVATION SECURITY STATE PROGRAM-

      ‘(1) IN GENERAL- Effective October 1, 2004, the Secretary, in cooperation with appropriate State agencies, may permit 1 State to jointly implement a conservation security program with the Secretary.

      ‘(2) ELIGIBLE STATE- The State referred to in paragraph (1) shall be a State selected by the Secretary--

        ‘(A) in consultation with--

          ‘(i) the Committee on Agriculture of the House of Representatives; and

          ‘(ii) the Committee on Agriculture, Nutrition, and Forestry of the Senate; and

        ‘(B) after taking into consideration--

          ‘(i) the percentage of private land in agricultural production in the State; and

          ‘(ii) infrastructure in the State that is available to implement the pilot program under paragraph (1).’.

SEC. 202. FUNDING.

    Section 1241 of the Food Security Act of 1985 (16 U.S.C. 3841) is amended by adding at the end the following:

    ‘(c) CONSERVATION SECURITY PROGRAM- Of the funds of the Commodity Credit Corporation, the Corporation shall make available for each of fiscal years 2002 through 2006 such sums as are necessary to carry out subchapter A of chapter 2 (including the provision of technical assistance, education and outreach, and monitoring and evaluation).’.

SEC. 203. 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 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 environmental issues affected by agricultural production with respect to--

        ‘(A) meeting the purposes of--

          ‘(i) the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.) or comparable State or tribal laws in impaired or threatened watersheds;

          ‘(ii) the Safe Drinking Water Act (42 U.S.C. 300f et seq.) or comparable State or tribal laws in watersheds providing water for drinking water supplies;

          ‘(iii) the Clean Air Act (42 U.S.C. 7401 et seq.) or comparable State laws; or

          ‘(iv) other Federal, State, tribal, or local laws; or

        ‘(B) watersheds of special significance, conservation priority areas described in section 1230(c), or other geographic areas of environmental sensitivity, such as wetland, including State, multi-State, or tribal projects--

          ‘(i) to facilitate surface and ground water conservation;

          ‘(ii) to protect water quality;

          ‘(iii) to protect endangered or threatened species or habitat, such as conservation corridors;

          ‘(iv) to improve methods of irrigation;

          ‘(v) to convert acreage from irrigated production; or

          ‘(vi) to reduce nutrient loads of watersheds.’.

      ‘(2) 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, enrollments of exceptional environmental value, and sharing of technical and financial resources among owners, operators, and producers and among owners, operators, and producers and governmental and nongovernmental organizations.

      ‘(3) FLEXIBILITY-

        ‘(A) IN GENERAL- The Secretary may enter into agreements with States (including State agencies and units of local government), Indian tribes, and nongovernmental organizations 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) environmental enhancement and long-term sustainability of the natural resource base; and

          ‘(ii) the purposes and requirements of this title.

        ‘(B) PLAN- Each party to an agreement under subparagraph (A) shall submit to the Secretary, for approval by the Secretary, a special project area or priority area program 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 environmental benefits);

          ‘(ii) an analysis of the contribution those adjustments will make to the effectiveness of programs in achieving the purposes of the special project or priority area program;

          ‘(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 or priority area program; and

          ‘(v) a plan for regular monitoring, evaluation, and reporting of progress toward the purposes of the special project or priority area program.

      ‘(4) PURPOSES OF SPECIAL PROJECTS- The purposes of special projects carried out under this section shall be to encourage--

        ‘(A) producers to cooperate in the installation and maintenance of conservation systems that affect multiple agricultural operations;

        ‘(B) the sharing of information and technical and financial resources;

        ‘(C) cumulative environmental benefits across operations of producers; and

        ‘(D) the development and demonstration of innovative conservation methods.

      ‘(5) FUNDING-

        ‘(A) IN GENERAL- In addition to resources from programs under subtitle D, subject to subparagraph (B), the Secretary shall use 5 percent of the funds made available for each fiscal year under section 1241(b) to carry out activities that are authorized under the environmental quality incentives program established under chapter 4 of 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 the environmental quality incentives program during the fiscal year in which the funding becomes available.’.

SEC. 204. ADMINISTRATIVE REQUIREMENTS FOR CONSERVATION PROGRAMS.

    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) GOOD FAITH RELIANCE-

      ‘(1) IN GENERAL- Notwithstanding any other provision of law, except as provided in paragraph (4), the Secretary shall provide equitable relief to an owner, operator, or producer that has entered into a contract under a conservation program administered by the Secretary, and that is subsequently determined to be in violation of the contract, if the owner, operator, or producer, in attempting to comply with the terms of the contract and enrollment requirements--

        ‘(A) took actions in good faith reliance on the action or advice of an employee of the Secretary; and

        ‘(B) had no knowledge that the actions taken were in violation of the contract.

      ‘(2) TYPES OF RELIEF- The Secretary shall--

        ‘(A) to the extent the Secretary determines that an owner, operator, or producer has been injured by good faith reliance described in paragraph (1), allow the owner, operator, or producer--

          ‘(i) to retain payments received under the contract;

          ‘(ii) to continue to receive payments under the contract;

          ‘(iii) to keep all or part of the land covered by the contract enrolled in the applicable program;

          ‘(iv) to reenroll all or part of the land covered by the contract in the applicable program; or

          ‘(v) to receive any other equitable relief the Secretary considers appropriate; and

        ‘(B) require the owner, operator, or producer to take such actions as are necessary to remedy any failure to comply with the contract.

      ‘(3) RELATIONSHIP TO OTHER LAW- The authority to provide relief under this subsection shall be in addition to any other authority provided in this or any other Act.

      ‘(4) EXCEPTIONS- This section shall not apply to--

        ‘(A) any pattern of conduct in which an employee of the Secretary takes actions or provides advice with respect to an owner, operator, or producer that the employee and the owner, operator, or producer know are inconsistent with applicable law (including regulations); or

        ‘(B) an owner, operator, or producer takes any action, independent of any advice or authorization provided by an employee of the Secretary, that the owner, operator, or producer knows or should have known to be inconsistent with applicable law (including regulations).

      ‘(5) APPLICABILITY OF RELIEF- Relief under this section shall be available for contracts in effect on or after the date of enactment of this section.

    ‘(b) EDUCATION, OUTREACH, MONITORING, AND EVALUATION- In carrying out any conservation program administered by the Secretary, the Secretary--

      ‘(1) shall provide education, outreach, training, monitoring, evaluation, technical assistance, and related services to agricultural producers (socially disadvantaged agricultural producers, beginning farmers and ranchers, Indian tribes (as those terms are defined in section 1238), and limited resource agricultural producers);

      ‘(2) may enter into contracts with States (including State agencies and units of local government), private nonprofit, community-based organizations, and educational institutions with demonstrated experience in providing the services described in paragraph (1), to provide those services; and

      ‘(3) shall use such sums as are necessary from funds of the Commodity Credit Corporation to carry out activities described in paragraphs (1) and (2).

    ‘(c) 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 opportunities; and

      ‘(2) enhance environmental stewardship over the long term.

    ‘(d) PROGRAM EVALUATION- The Secretary shall maintain data concerning conservation security plans, conservation practices planned or implemented, environmental outcomes, economic costs, and related matters under conservation programs administered by the Secretary.

    ‘(e) MEDIATION AND INFORMAL HEARINGS- If the Secretary makes a decision under a conservation program administered by the Secretary that is adverse to an owner, operator, or producer, at the request of the owner, operator, or producer, the Secretary shall provide the owner, operator, or producer with mediation services or an informal hearing on the decision.

    ‘(f) TECHNICAL ASSISTANCE-

      ‘(1) IN GENERAL- Under any conservation program administered by the Secretary, subject to paragraph (2), technical assistance provided by persons certified under paragraph (3) (including farmers and ranchers) may include--

        ‘(A) conservation planning;

        ‘(B) design, installation, and certification of conservation practices;

        ‘(C) conservation training for producers; and

        ‘(D) such other conservation activities as the Secretary determines to be appropriate.

      ‘(2) OUTSIDE ASSISTANCE-

        ‘(A) IN GENERAL- The Secretary may contract directly with qualified persons not employed by the Department to provide conservation technical assistance.

        ‘(B) PAYMENT BY SECRETARY- Subject to subparagraph (C), the Secretary may provide a payment to an owner, operator, or producer enrolled in a conservation program administered by the Secretary if the owner, operator, or producer elects to obtain technical assistance from a person certified to provide technical assistance under this subsection.

        ‘(C) NONPRIVATE PROVIDERS- In determining whether to provide a payment under subparagraph (B) to a nonprivate provider, the Secretary shall provide a payment if the provision of the payment would result in an increase in the total amount of technical assistance available to producers, as determined by the Secretary.

      ‘(3) CERTIFICATION OF PROVIDERS OF TECHNICAL ASSISTANCE-

        ‘(A) PROCEDURES-

          ‘(i) IN GENERAL- The Secretary shall establish procedures for certifying persons not employed by the Department to provide technical assistance in planning, designing, or certifying activities to participate in any conservation program administered by the Secretary to agricultural producers and landowners participating, or seeking to participate, in conservation programs administered by the Secretary.

          ‘(ii) NON-FEDERAL ASSISTANCE- The Secretary may request the services of, and enter into a cooperative agreement with, a State water quality agency, State fish and wildlife agency, State forestry agency, State conservation agency or conservation district, or any other governmental or nongovernmental organization or person considered appropriate by the Secretary to assist in providing the technical assistance necessary to develop and implement conservation plans under this title.

        ‘(B) EQUIVALENCE- The Secretary shall ensure that new certification programs of the Department for providers of technical assistance meet or exceed the testing and continuing education standards of any certification program that establishes nationally recognized and accepted standards for training, testing, and other professional qualifications.

        ‘(C) STANDARDS- The Secretary shall establish standards for the conduct of--

          ‘(i) the certification process conducted by the Secretary; and

          ‘(ii) periodic recertification by the Secretary of providers.

        ‘(D) CERTIFICATION REQUIRED-

          ‘(i) IN GENERAL- A provider may not provide to any producer technical assistance described in paragraph (3)(A)(i) unless the provider is certified by the Secretary.

          ‘(ii) WAIVER- The Secretary may exempt a provider from any requirement of this subparagraph if the Secretary determines that the provider has been certified or recertified to provide technical assistance through a program the standards of which meet or exceed standards established by the Secretary under subparagraph (C).

        ‘(E) FEE-

          ‘(i) IN GENERAL- In exchange for certification or recertification, a provider shall pay a fee to the Secretary in an amount determined by the Secretary.

          ‘(ii) ACCOUNT- A fee paid to the Secretary under clause (i) shall be--

            ‘(I) credited to the account in the Treasury that incurs costs relating to implementing this subsection; and

            ‘(II) made available to the Secretary for use for conservation programs administered by the Secretary, without further appropriation, until expended.

          ‘(iii) WAIVER- The Secretary may waive any requirement of any provider to pay a fee under this subparagraph if the provider qualifies for a waiver under subparagraph (D)(ii).

        ‘(F) TECHNICAL ASSISTANCE ADVISORY COUNCIL-

          ‘(i) PURPOSE- The Secretary shall establish a technical assistance advisory council (referred to in this subparagraph as the ‘advisory council’) to advise the Secretary with respect to the management of certification programs for the provision of technical assistance for third party providers.

          ‘(ii) MEMBERSHIP- The membership of the advisory council shall include--

            ‘(I) representatives of the Federal Government and appropriate State and local governments; and

            ‘(II) not more than 20 additional members that represent 2 or more of the following:

‘(aa) Agricultural producers.

‘(bb) Agricultural industries.

‘(cc) Wildlife and environmental entities.

‘(dd) A minimum of 6 professional societies and organizations.

‘(ee) Such other entities (the representation of which on the advisory council shall not exceed 4 members) as the Secretary determines would contribute to the work of the advisory council.

          ‘(iii) RESPONSIBILITIES- The advisory council shall advise the Secretary with respect to--

            ‘(I) appropriate standards for certification;

            ‘(II) the status of third party certification programs;

            ‘(III) cases in which waivers for certification, recertification and payment of fees should be allowed;

            ‘(IV) periodic reviews of certification program; and

            ‘(V) guidelines for penalties and disciplinary actions for violation of certification requirements.

          ‘(iv) MEETINGS-

            ‘(I) INITIAL MEETING- Not later than 30 days after the date on which all members of the advisory council have been appointed, the advisory council shall hold the initial meeting of advisory council.

            ‘(II) SUBSEQUENT MEETINGS- The Secretary shall require the advisory council to meet as needed.

          ‘(v) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this subparagraph such sums as are necessary for each of fiscal years 2002 through 2006.

      ‘(4) EFFECT ON IMPLEMENTATION- Nothing in this subsection shall prohibit or impede the expeditious implementation of the provision of third-party technical assistance under this title.

      ‘(5) OTHER REQUIREMENTS- The Secretary may establish such other requirements as the Secretary determines are necessary to carry out this subsection.

    ‘(g) 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 (3), 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 in section 1238) 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- Information regarding owners, operators, or producers that have received payments from the Secretary and the amounts received, shall be--

          ‘(i) considered to be public information; and

          ‘(ii) may be released to any--

            ‘(I) person;

            ‘(II) Indian tribe (as defined in section 1238); or

            ‘(III) Federal, State, local agency outside the Department of Agriculture.

      ‘(2) INVENTORY, MONITORING, AND SITE SPECIFIC INFORMATION- Except as provided in paragraph (3) and notwithstanding any other provision of law, in order to maintain the personal privacy, confidentiality, and cooperation of owners, operators, and producers, and to maintain the integrity of each unit at which primary sampling for data gathering is carried out by the National Resources Inventory (referred to in this subsection as a ‘data gathering site’), the specific geographic locations of data gathering sites, and the information generated by the data gathering sites--

        ‘(A) shall not be considered to be public information; and

        ‘(B) shall not be released to any person or Federal, State, local, or tribal agency outside the Department.

      ‘(3) EXCEPTIONS-

        ‘(A) RELEASE AND DISCLOSURE FOR ENFORCEMENT- The Secretary may release or disclose to the Attorney General information covered by paragraph (1) or (2) 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) or (2) 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) or (2) 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) or (2).

          ‘(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.

      ‘(4) 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.

      ‘(5) 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.

    ‘(h) INDIAN TRIBES- In carrying out any conservation program administered by the Secretary on land under the jurisdiction of an Indian tribe (as defined in section 1238), the Secretary shall cooperate with the tribal government of the Indian tribe to ensure, to the maximum extent practicable, that the program is administered in a fair and equitable manner.’.

SEC. 205. REFORM AND ASSESSMENT OF CONSERVATION PROGRAMS.

    (a) IN GENERAL- The Secretary of Agriculture shall develop a plan for--

      (1) coordinating conservation programs administered by the Secretary that are targeted at agricultural land to--

        (A) eliminate redundancy; and

        (B) improve delivery;

      (2) to the maximum extent practicable--

        (A) designing forms that are applicable to all conservation programs administered by the Secretary;

        (B) reducing and consolidating paperwork requirements for the programs;

        (C) developing universal classification systems for all information obtained on the forms that can be used by other agencies of the Department of Agriculture;

        (D) ensuring that the information and classification systems developed under this paragraph can be shared with other agencies of the Department through computer technologies used by agencies; and

        (E) developing 1 format for a conservation plan that can be applied to all conservation programs targeted at agricultural land;

      (3) to the maximum extent practicable, improving the delivery of conservation programs to Indian tribes (as defined in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b)), including programs for the delivery of conservation programs to Indian tribes under plans carried out in conjunction with the Secretary of the Interior; and

      (4) improving the regional distribution of program funds and resources to ensure, to the maximum extent practicable, that--

        (A) the highest conservation priorities of the United States receive funding; and

        (B) regional variations in conservation costs are taken into account.

    (b) REPORT- Not later than 180 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 that describes the plan developed under subsection (a), including any recommendations for implementation of the plan.

    (c) NATIONAL CONSERVATION PLAN-

      (1) IN GENERAL- Not later than 180 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 plan and estimated budget for implementing the appraisal of the soil, water, and related resources of the United States contained in the national conservation program under sections 5 and 6 of the Soil and Water Resources Conservation Act of 1977 (16 U.S.C. 2004, 2005) as the primary vehicle for managing conservation on agricultural land in the United States.

      (2) REPORT ON IMPLEMENTATION- Not later than April 30, 2005, the Secretary shall submit to the Committee on Agriculture of the House of Representatives and Committee on Agriculture, Nutrition, and Forestry of the Senate a report that--

        (A) describes the status of the implementation of the plan described in paragraph (1);

        (B) contains an evaluation of the scope, quality, and outcomes of the conservation practices carried out under the plan; and

        (C) makes recommendations for achieving specific and quantifiable improvements for the purposes of programs covered by the plan.

    (d) CONSERVATION PRACTICE STANDARDS- The Secretary of Agriculture shall--

      (1) revise standards and, if necessary, establish standards, for eligible conservation practices to include measurable goals for enhancing natural resources, including innovative practices;

      (2) not later than 180 days after the date of enactment of this Act, revise the National Handbook of Conservation Practices and field office technical guides of the Natural Resources Conservation Service; and

      (3) not less frequently than once every 5 years, update the Handbook and technical guides.

SEC. 206. CONSERVATION SECURITY PROGRAM REGULATIONS.

    Beginning on the date of enactment of this Act, the Secretary of Agriculture may promulgate regulations and carry out other actions relating to the implementation of the conservation security program under subchapter A of chapter 2 of subtitle D of title XII of the Food Security Act of 1985 (as added by section 201).

SEC. 207. 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 in the chapter heading by striking ‘ENVIRONMENTAL CONSERVATION ACREAGE RESERVE PROGRAM’ and inserting ‘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’; and

      (3) 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--Program Extensions

SEC. 211. COMPREHENSIVE CONSERVATION ENHANCEMENT PROGRAM.

    (a) IN GENERAL- Section 1230(a) of the Food Security Act of 1985 (16 U.S.C. 3830(a)) is amended--

      (1) in paragraph (1), by striking ‘2002’ and inserting ‘2006’; and

      (2) in paragraph (3)--

        (A) in subparagraph (B), by striking ‘and’ at the end; and

        (B) by striking subparagraph (C) and inserting the following:

        ‘(C) the grassland reserve program established under subchapter C of chapter 2;

        ‘(D) the environmental quality incentives program established under chapter 4;

        ‘(E) the wildlife habitat incentive program established under section 1240M; and

        ‘(F) the program for conservation of private grazing land established under section 1240P.’.

    (b) PRIORITY- Section 1230(c) of the Food Security Act of 1985 (16 U.S.C. 3830(c)) is amended by adding at the end the following:

      ‘(4) PRIORITY- In designating conservation priority areas under paragraph (1), the Secretary shall give priority to areas in which designated land would facilitate the most rapid completion of projects that--

        ‘(A) are ongoing as of the date of the application; and

        ‘(B) meet the purposes of a program established under this title.’.

    (c) FUNDING- Section 1241(a) of the Food Security Act of 1985 (16 U.S.C. 3841(a)) is amended--

      (1) by striking ‘2002’ and inserting ‘2006’;

      (2) by inserting ‘(including the provision of technical assistance)’ after ‘the programs’;

      (3) in paragraph (2)--

        (A) by striking ‘subchapter C’ and inserting ‘subchapters C and D’; and

        (B) by striking ‘and’ at the end;

      (4) in paragraph (3), by striking the period at the end and inserting ‘; and’; and

      (5) by adding at the end the following:

      ‘(4) chapter 6 of subtitle D.’.

SEC. 212. CONSERVATION RESERVE PROGRAM.

    (a) REAUTHORIZATION-

      (1) IN GENERAL- Section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831) is amended in subsections (a), (b)(3), and (d), by striking ‘2002’ each place it appears and inserting ‘2006’.

      (2) DUTIES OF OWNERS AND OPERATORS- Section 1232(c) of the Food Security Act of 1985 (16 U.S.C. 3832(c)) is amended by striking ‘2002’ and inserting ‘2006’.

    (b) CONSERVATION PRIORITY AREAS-

      (1) ELIGIBILITY- Section 1231(b) of the Food Security Act of 1985 (16 U.S.C. 3831(b)) is amended--

        (A) by striking paragraph (1) and inserting the following:

      ‘(1) highly erodible cropland that--

        ‘(A)(i) if permitted to remain untreated could substantially reduce the production capability for future generations; or

        ‘(ii) cannot be farmed in accordance with a conservation 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 3 of the 6 years preceding the date of enactment of the Agriculture, Conservation, and Rural Enhancement Act of 2002 (except for land enrolled in the conservation reserve program as of that date);’; and

        (B) by adding at the end the following:

      ‘(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 under a program described in paragraph (6)(A), if the land is enrolled as part of the buffer; and

      ‘(6) land (including land that is not cropland) enrolled through continuous signup--

        ‘(A) to establish conservation buffers as part of the program described in a notice issued on March 24, 1998 (63 Fed. Reg. 14109) or a successor program; or

        ‘(B) into the conservation reserve enhancement program described in a notice issued on May 27, 1998 (63 Fed. Reg. 28965) or a successor program.’.

      (2) CRP PRIORITY AREAS- Section 1231(f) of the Food Security Act of 1985 (16 U.S.C. 3831(f)) is amended by adding at the end the following:

      ‘(5) PRIORITY- In designating conservation priority areas under paragraph (1), the Secretary shall give priority to areas in which designated land would facilitate the most rapid completion of projects that--

        ‘(A) are ongoing as of the date of the application; and

        ‘(B) meet the purposes of the program established under this subchapter.’.

    (c) MAXIMUM ENROLLMENT- Section 1231(d) of the Food Security Act of 1985 (16 U.S.C. 3831(d)) is amended by striking ‘36,400,000’ and inserting ‘41,100,000’.

    (d) DURATION OF CONTRACTS; HARDWOOD TREES- Section 1231(e) of the Food Security Act of 1985 (16 U.S.C. 3831(e)) is amended--

      (1) in paragraph (1), by striking ‘For the purpose: and inserting ‘Except as provided in paragraph (2)(D), for the purpose’;

      (2) in paragraph (2)--

        (A) by striking ‘In the’ and inserting the following:

        ‘(A) IN GENERAL- In the’;

        (B) by striking ‘The Secretary’ and inserting the following:

        ‘(B) EXISTING HARDWOOD TREE CONTRACTS- The Secretary’; and

        (C) by adding at the end the following:

        ‘(C) EXTENSION OF HARDWOOD TREE CONTRACTS-

          ‘(i) IN GENERAL- In the case of land devoted to hardwood trees under a contract entered into under this subchapter before the date of enactment of this subparagraph, the Secretary may extend the contract for a term of not more than 15 years.

          ‘(ii) RENTAL PAYMENTS- The amount of a rental payment for a contract extended under clause (i)--

            ‘(I) shall be determined by the Secretary; but

            ‘(II) shall not exceed 50 percent of the rental payment that was applicable to the contract before the contract was extended.

        ‘(D) NEW HARDWOOD TREE CONTRACTS-

          ‘(i) IN GENERAL- The Secretary may enter into contracts of not less than 10, nor more than 30, years with owners of land intended to be devoted to hardwood trees after the date of enactment of this paragraph.

          ‘(ii) PAYMENTS- The Secretary shall make payments under a contract described in clause (i)--

            ‘(I) on an annual basis; and

            ‘(II) at such an appropriate rate and in such appropriate amounts as the Secretary shall determine in accordance with subparagraph (C)(ii).

        ‘(E) HARDWOOD PLANNING GOAL- The Secretary shall take such steps as the Secretary determines are necessary to ensure, to the maximum extent practicable, that all hardwood tree sites annually enrolled in the conservation reserve program are reforested with appropriate species.’; and

      (3) by adding at the end the following:

      ‘(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.’.

    (e) PILOT PROGRAM FOR ENROLLMENT OF WETLAND AND BUFFER ACREAGE IN CONSERVATION RESERVE- Section 1231(h) of the Food Security Act of 1985 (16 U.S.C. 3831(h)) is amended--

      (1) in the subsection heading, by striking ‘PILOT’;

      (2) in paragraph (1), by striking ‘During the 2001 and 2002 calendar years, the Secretary shall carry out a pilot program’ and inserting ‘During the 2002 through 2006 calendar years, the Secretary shall carry out a program’;

      (3) in paragraph (2), by striking ‘pilot’; and

      (4) in paragraph (3)(D)(i), by striking ‘5 contiguous acres.’ and inserting ‘10 contiguous acres, of which--

            ‘(I) not more than 5 acres shall be eligible for payment; and

            ‘(II) all acres (including acres that are ineligible for payment) shall be covered by the conservation contract.’.

    (f) IRRIGATED LAND- Section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831) is amended by adding at the end the following:

    ‘(i) IRRIGATED LAND- Irrigated land shall be enrolled in the programs described in subsection (b)(6) at irrigated land rates unless the Secretary determines that other compensation is appropriate.’.

    (g) VEGETATIVE COVER; HAYING AND GRAZING; WIND TURBINES- Section 1232(a) of the Food Security Act of 1985 (16 U.S.C. 3832(a)) is amended--

      (1) in paragraph (4)--

        (A) in subparagraph (A), by striking ‘and’ at the end;

        (B) in subparagraph (B), by inserting ‘and’ after the semicolon at the end; and

        (C) by adding at the end the following:

        ‘(C) in the case of marginal pasture land, an owner or operator shall not be required to plant trees if the land is to be restored--

          ‘(i) as wetland; or

          ‘(ii) with appropriate native riparian vegetation;’;

      (2) in paragraph (7)--

        (A) by striking ‘except that the Secretary--’ and inserting ‘except that--’;

        (B) in subparagraph (A)--

          (i) by striking ‘(A) may’ and inserting ‘(A) the Secretary may’; and

          (ii) by striking ‘and’ at the end;

        (C) in subparagraph (B)--

          (i) by striking ‘(B) shall’ and inserting ‘(B) the Secretary shall’; and

          (ii) by striking the period at the end and inserting a semicolon;

        (D) in subparagraph (C), by striking the period at the end and inserting ‘; and’; and

        (E) by adding at the end the following:

        ‘(D) for maintenance purposes, the Secretary may permit harvesting or grazing or other commercial uses of forage, in a manner that is consistent with the purposes of this subchapter and a conservation plan approved by the Secretary, on acres enrolled--

          ‘(i) to establish conservation buffers as part of the program described in a notice issued on March 24, 1998 (63 Fed. Reg. 14109) or a successor program; and

          ‘(ii) into the conservation reserve enhancement program described in a notice issued on May 27, 1998 (63 Fed. Reg. 28965) or a successor program.’;

      (3) in paragraph (9), by striking ‘and’ at the end;

      (4) by redesignating paragraph (10) as paragraph (11); and

      (5) by inserting after paragraph (9) the following:

      ‘(10) with respect to any contract entered into after the date of enactment of the Agriculture, Conservation, and Rural Enhancement Act of 2002--

        ‘(A) not to produce a crop for the duration of the contract on any other highly erodible land that the owner or operator owns unless the highly erodible land--

          ‘(i) has a history of being used to produce a crop other than a forage crop, as determined by the Secretary; or

          ‘(ii) is being used as a homestead or building site at the time of purchase; and

        ‘(B) on a violation of a contract described in subparagraph (A), to be subject to the requirements of paragraph (5); and’.

    (h) WIND TURBINES- Section 1232 of the Food Security Act of 1985 (8906 U.S.C. 3832) is amended by adding at the end the following:

    ‘(f) WIND TURBINES-

      ‘(1) IN GENERAL- Subject to paragraph (2), the Secretary may permit an owner or operator of land that is enrolled in the conservation reserve program, but that is not enrolled under continuous signup (as described in section 1231(b)(6)), to install wind turbines on the land.

      ‘(2) NUMBER; LOCATION- The Secretary shall determine the number and location of wind turbines that may be installed on a tract of land under paragraph (1), taking into account--

        ‘(A) the location, size, and other physical characteristics of the land;

        ‘(B) the extent to which the land contains wildlife and wildlife habitat; and

        ‘(C) the purposes of the conservation reserve program.

      ‘(3) PAYMENT LIMITATION- Notwithstanding the amount of a rental payment limited by section 1234(c)(2) and specified in a contract entered into under this chapter, the Secretary shall reduce the amount of the rental payment paid to an owner or operator of land on which 1 or more wind turbines are installed under this subsection by an amount determined by the Secretary to be commensurate with the value of the reduction of benefit gained by enrollment of the land in the conservation reserve program.’.

    (i) ADDITIONAL ELIGIBLE PRACTICES- Section 1234 of the Food Security Act of 1985 (16 U.S.C. 3834) is amended by adding at the end the following:

    ‘(i) PAYMENTS-

      ‘(1) IN GENERAL- Subject to paragraph (2), the Secretary shall provide signing and practice incentive payments under the conservation reserve program to owners and operators that implement a practice under--

        ‘(A) the program to establish conservation buffers described in a notice issued on March 24, 1998 (63 Fed. Reg. 14109) or a successor program; or

        ‘(B) the conservation reserve enhancement program described in a notice issued on May 27, 1998 (63 Fed. Reg. 28965) or a successor program.

      ‘(2) OTHER PRACTICES- The Secretary shall administer paragraph (1) in a manner that does not reduce the amount of payments made by the Secretary for other practices under the conservation reserve program.’.

    (j) PAYMENTS- Section 1239C(f) of the Food Security Act of 1985 (16 U.S.C. 3839c(f)) is amended by adding at the end the following:

      ‘(5) EXCEPTION- Paragraph (1) shall not apply to any land enrolled in--

        ‘(A) the program to establish conservation buffers described in a notice issued on March 24, 1998 (63 Fed. Reg. 14109) or a successor program; or

        ‘(B) the conservation reserve enhancement program described in a notice issued on May 27, 1998 (63 Fed. Reg. 28965) or a successor program.’.

    (k) COUNTY PARTICIPATION- Section 1243(b)(1) of the Food Security Act of 1985 (16 U.S.C. 3843(b)(1)) is amended by striking ‘The Secretary’ and inserting ‘Except for land enrolled under continuous signup (as described in section 1231(b)(6)), the Secretary’.

    (l) STUDY ON ECONOMIC EFFECTS-

      (1) IN GENERAL- Not later than 270 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 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 described in that paragraph 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); and

        (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.

SEC. 213. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.

    (a) IN GENERAL- 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 national goals, and to maximize environmental benefits per dollar expended, by--

      ‘(1) assisting producers in complying with--

        ‘(A) this title;

        ‘(B) the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.);

        ‘(C) the Safe Drinking Water Act (42 U.S.C. 300f et seq.);

        ‘(D) the Clean Air Act (42 U.S.C. 7401 et seq.); and

        ‘(E) other Federal, State, tribal, and local environmental laws (including regulations);

      ‘(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 technical and financial assistance to producers to install and maintain conservation systems 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;

      ‘(5) facilitating partnerships and joint efforts among producers and governmental and nongovernmental organizations; and

      ‘(6) 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) COMPREHENSIVE NUTRIENT MANAGEMENT-

        ‘(A) IN GENERAL- The term ‘comprehensive nutrient management’ means any combination of structural practices, land management practices, and management activities associated with crop or livestock production described in subparagraph (B) that collectively ensure that the purposes of crop or livestock production and preservation of natural resources (especially the preservation and enhancement of water quality) are compatible.

        ‘(B) ELEMENTS- For the purpose of subparagraph (A), structural practices, land management practices, and management activities associated with livestock production are--

          ‘(i) manure and wastewater handling and storage;

          ‘(ii) manure processing, composting, or digestion for purposes of capturing emissions, concentrating nutrients for transport, destroying pathogens or otherwise improving the environmental safety and beneficial uses of manure;

          ‘(iii) land treatment practices;

          ‘(iv) nutrient management;

          ‘(v) recordkeeping;

          ‘(vi) feed management; and

          ‘(vii) other waste utilization options.

        ‘(C) PRACTICE-

          ‘(i) PLANNING- The development of a comprehensive nutrient management plan shall be a practice that is eligible for incentive payments and technical assistance under this chapter.

          ‘(ii) IMPLEMENTATION- The implementation of a comprehensive nutrient plan shall be accomplished through structural and land management practices identified in the plan.

          ‘(iii) REQUIREMENT- A comprehensive nutrient management plan shall meet all Federal, State, and local water quality and public health goals and regulations, and in the case of a large confined livestock operation (as defined by the Secretary), shall include all necessary and essential land treatment practices as determined by the Secretary.

      ‘(3) ELIGIBLE LAND- The term ‘eligible land’ means agriculture land (including cropland, grassland, rangeland, pasture, private nonindustrial forest land and other land on which crops or livestock are produced), including agricultural land that the Secretary determines poses a serious threat to soil, water, or related resources by reason of the soil types, terrain, climatic, soil, topographic, flood, or saline characteristics, or other factors or natural hazards.

      ‘(4) INNOVATIVE TECHNOLOGY- The term ‘innovative technology’ means a new conservation technology that, as determined by the Secretary--

        ‘(A) maximizes environmental benefits;

        ‘(B) complements agricultural production; and

        ‘(C) may be adopted in a practical manner.

      ‘(5) LAND MANAGEMENT PRACTICES- 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 resource.

      ‘(6) 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.

      ‘(7) MANAGED GRAZING- The term ‘managed grazing’ means the application of 1 or more practices that involve the frequent rotation of animals on grazing land to--

        ‘(A) enhance plant health;

        ‘(B) limit soil erosion;

        ‘(C) protect ground and surface water quality; or

        ‘(D) benefit wildlife.

      ‘(8) MAXIMIZE ENVIRONMENTAL BENEFITS PER DOLLAR EXPENDED-

        ‘(A) IN GENERAL- The term ‘maximize environmental benefits per dollar expended’ means to maximize environmental benefits to the extent the Secretary determines is practicable and appropriate, taking into account the amount of funding made available to carry out this chapter.

        ‘(B) LIMATATION- The term ‘maximize environmental benefits per dollar expended’ does not require the Secretary--

          ‘(i) to require the adoption of the least cost practice or technical assistance; or

          ‘(ii) to require the development of a plan under section 1240E as part of an application for payments or technical assistance.

      ‘(9) PRACTICE- The term ‘practice’ means 1 or more structural practices, land management practices, and comprehensive nutrient management planning practices.

      ‘(10) 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.

      ‘(11) PROGRAM- The term ‘program’ means the environmental quality incentives program comprised of sections 1240 through 1240J.

      ‘(12) 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 2006 fiscal years, the Secretary shall provide technical assistance, cost-share payments, and incentive payments to producers that enter into contracts with the Secretary under the program.

      ‘(2) ELIGIBLE PRACTICES-

        ‘(A) STRUCTURAL PRACTICES- A producer that implements a structural practice shall be eligible for any combination of technical assistance, cost-share payments, and education.

        ‘(B) LAND MANAGEMENT PRACTICES- A producer that performs a land management practice shall be eligible for any combination of technical assistance, incentive payments, and education.

        ‘(C) COMPREHENSIVE NUTRIENT MANAGEMENT PLANNING- A producer that develops a comprehensive nutrient management plan shall be eligible for any combination of technical assistance, incentive payments, and education.

      ‘(3) EDUCATION- The Secretary may provide conservation education at national, State, and local levels consistent with the purposes of the program to--

        ‘(A) any producer that is eligible for assistance under the program; or

        ‘(B) any producer that is engaged in the production of an agricultural commodity.

    ‘(b) APPLICATION AND TERM- With respect to practices implemented under this program--

      ‘(1) a contract between a producer and the Secretary may--

        ‘(A) apply to 1 or more structural practices, land management practices, and comprehensive nutrient management planning practices; and

        ‘(B) have a term of not less that 3, or more than 10 years, as determined appropriate by the Secretary, depending on the practice or practices that are the basis of the contract;

      ‘(2) a producer may not enter into more than 1 contract for structural practices involving livestock nutrient management during the period of fiscal years 2002 through 2006; and

      ‘(3) a producer that has an interest in more than 1 large confined livestock operation, as defined by the Secretary, may not enter into more than 1 contract for cost-share payments for a storage or treatment facility, or associated waste transport or transfer device, to manage manure, process wastewater, or other animal waste generated by the large confined livestock feeding operation.

    ‘(c) APPLICATION AND EVALUATION-

      ‘(1) IN GENERAL- The Secretary shall establish an application and evaluation process for awarding technical assistance, cost-share payments and incentive payments to a producer in exchange for the performance of 1 or more practices that maximize environmental benefits per dollar expended.

      ‘(2) COMPARABLE ENVIRONMENTAL VALUE-

        ‘(A) IN GENERAL- The Secretary shall establish a process for selecting applications for technical assistance, cost-share payments, and incentive payments in any case in which there are numerous applications for assistance for practices that would provide substantially the same level of environmental benefits.

        ‘(B) CRITERIA- The process under subparagraph (A) shall be based on--

          ‘(i) a reasonable estimate of the projected cost of the proposals described in the applications; and

          ‘(ii) the priorities established under the program, and other factors, that maximize environmental benefits per dollar expended.

      ‘(3) CONSENT OF OWNER- If the producer making an offer to implement a structural practice is a tenant of the land involved in agricultural production, for the offer to be acceptable, the producer shall obtain the consent of the owner of the land with respect to the offer.

      ‘(4) BIDDING DOWN- If the Secretary determines that the environmental values of 2 or more applications for technical assistance, 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- 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 practices.

    ‘(f) TECHNICAL ASSISTANCE-

      ‘(1) IN GENERAL- The Secretary shall allocate funding under the program for the provision of technical assistance according to the purpose and projected cost for which the technical assistance is provided for a fiscal year.

      ‘(2) AMOUNT- The allocated amount may vary according to--

        ‘(A) the type of expertise required;

        ‘(B) the quantity of time involved; and

        ‘(C) other factors as determined appropriate by the Secretary.

      ‘(3) LIMITATION- Funding for technical assistance under the program shall not exceed the projected cost to the Secretary of the technical assistance provided for a fiscal year.

      ‘(4) OTHER AUTHORITIES- The receipt of technical assistance under the program shall not affect the eligibility of the producer to receive technical assistance under other authorities of law available to the Secretary.

      ‘(5) INCENTIVE PAYMENTS FOR TECHNICAL ASSISTANCE-

        ‘(A) IN GENERAL- A producer that is eligible to receive technical assistance for a practice involving the development of a comprehensive nutrient management plan may obtain an incentive payment that can be used to obtain technical assistance associated with the development of any component of the comprehensive nutrient management plan.

        ‘(B) PURPOSE- The purpose of the payment shall be to provide a producer the option of obtaining technical assistance for developing any component of a comprehensive nutrient management plan from a certified provider.

        ‘(C) PAYMENT- The incentive payment shall be--

          ‘(i) in addition to cost-share or incentive payments that a producer would otherwise receive for structural practices and land management practices;

          ‘(ii) used only to procure technical assistance from a certified provider that is necessary to develop any component of a comprehensive nutrient management plan; and

          ‘(iii) in an amount determined appropriate by the Secretary, taking into account--

            ‘(I) the extent and complexity of the technical assistance provided;

            ‘(II) the costs that the Secretary would have incurred in providing the technical assistance; and

            ‘(III) the costs incurred by the private provider in providing the technical assistance.

        ‘(D) ELIGIBLE PRACTICES- The Secretary may determine, on a case by case basis, whether the development of a comprehensive nutrient management plan is eligible for an incentive payment under this paragraph.

        ‘(E) CERTIFICATION BY SECRETARY-

          ‘(i) IN GENERAL- Only persons that have been certified by the Secretary under section 1244(f)(3) shall be eligible to provide technical assistance under this subsection.

          ‘(ii) QUALITY ASSURANCE- The Secretary shall ensure that certified providers are capable of providing technical assistance regarding comprehensive nutrient management in a manner that meets the specifications and guidelines of the Secretary and that meets the needs of producers under the program.

        ‘(F) ADVANCE PAYMENT- On the determination of the Secretary that the proposed comprehensive nutrient management of a producer is eligible for an incentive payment, the producer may receive a partial advance of the incentive payment in order to procure the services of a certified provider.

        ‘(G) FINAL PAYMENT- The final installment of the incentive payment shall be payable to a producer on presentation to the Secretary of documentation that is satisfactory to the Secretary and that demonstrates--

          ‘(i) completion of the technical assistance; and

          ‘(ii) the actual cost of the technical assistance.

    ‘(g) 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.

‘SEC. 1240C. EVALUATION OF OFFERS AND PAYMENTS.

    ‘(a) IN GENERAL- In evaluating applications for technical assistance, cost-share payments, and incentive payments, the Secretary shall accord a higher priority to assistance and payments that--

      ‘(1) maximize environmental benefits per dollar expended; and

      ‘(2)(A) address national conservation priorities, including--

        ‘(i) meeting Federal, State, and local environmental purposes focused on protecting air and water quality, including assistance to production systems and practices that avoid subjecting an operation to Federal, State, or local environmental regulatory systems;

        ‘(ii) applications from livestock producers using managed grazing systems and other pasture and forage based systems;

        ‘(iii) comprehensive nutrient management;

        ‘(iv) water quality, particularly in impaired watersheds;

        ‘(v) soil erosion;

        ‘(vi) air quality; or

        ‘(vii) pesticide and herbicide management or reduction;

      ‘(B) are provided in conservation priority areas established under section 1230(c);

      ‘(C) are provided in special projects under section 1243(f)(4) with respect to which State or local governments have provided, or will provide, financial or technical assistance to producers for the same conservation or environmental purposes; or

      ‘(D) an innovative technology in connection with a structural practice or land management practice.

‘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 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;

      ‘(6) to comply with such additional provisions as the Secretary determines are necessary to carry out the program plan; and

      ‘(7) to submit a list of all confined livestock feeding operations wholly or partially owned or operated by the applicant.

‘SEC. 1240E. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM PLAN.

    ‘(a) IN GENERAL- To be eligible to receive technical assistance, cost-share payments, or incentive payments under the program, a producer of a livestock or agricultural operation shall submit to the Secretary for approval a plan of operations that specifies practices covered under the program, and is based on such terms and conditions, as the Secretary considers necessary to carry out the program, including a description of the practices to be implemented and the purposes to be met by the implementation of the plan, and in the case of confined livestock feeding operations, development and implementation of a comprehensive nutrient management plan, and in the case of confined livestock feeding operations, development and implementation of a comprehensive nutrient management plan.

    ‘(b) AVOIDANCE OF DUPLICATION- The Secretary shall, to the maximum extent practicable, eliminate duplication of planning activities under the program 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 technical assistance in developing and implementing the plan;

      ‘(2) providing technical assistance, cost-share payments, or incentive payments for developing and implementing 1 or more practices, as appropriate;

      ‘(3) providing the producer with information, education, and training to aid in implementation of the plan; and

      ‘(4) encouraging the producer to obtain technical assistance, cost-share payments, or grants from other Federal, State, local, or private sources.

‘SEC. 1240G. LIMITATION ON PAYMENTS.

    ‘(a) IN GENERAL- Subject to subsection (b), the total amount of cost-share and incentive payments paid to a producer under this chapter shall not exceed--

      ‘(1) $30,000 for any fiscal year, regardless of whether the producer has more than 1 contract under this chapter for the fiscal year;

      ‘(2) $90,000 for a contract with a term of 3 years;

      ‘(3) $120,000 for a contract with a term of 4 years; or

      ‘(4) $150,000 for a contract with a term of more than 4 years.

    ‘(b) ATTRIBUTION- An individual or entity shall not receive, directly or indirectly, total payments from single or multiple contracts under this chapter that exceed $30,000 for any fiscal year.

    ‘(c) EXCEPTION TO ANNUAL LIMIT- The Secretary may exceed the limitation on the annual amount of a payment to a producer under subsection (a)(1) if the Secretary determines that a larger payment is--

      ‘(1) essential to accomplish the land management practice or structural practice for which the payment is made to the producer; and

      ‘(2) consistent with the maximization of environmental benefits per dollar expended and the purposes of this chapter.

    ‘(d) VERIFICATION- The Secretary shall identify individuals and entities that are eligible for a payment under the program using social security numbers and taxpayer identification numbers, respectively.

‘SEC. 1240H. CONSERVATION INNOVATION GRANTS.

    ‘(a) IN GENERAL- From funds made available to carry out the program, for each of the 2003 through 2006 fiscal years, the Secretary shall use not more than $100,000,000 for each fiscal year to 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 award 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 innovative projects, such as--

        ‘(A) market systems for pollution reduction;

        ‘(B) promoting agricultural best management practices, including the storing of carbon in the soil;

        ‘(C) protection of source water for human consumption; and

        ‘(D) reducing negative effects on watersheds, including through the significant reduction in nutrient applications, as determined by the Secretary; and

      ‘(3) leverage funds made available to carry out the program 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.

    ‘(d) UNUSED FUNDING- Any funds made available for a fiscal year under this section that are not obligated by April 1 of the fiscal year may be used to carry out other activities under this chapter during the fiscal year in which the funding becomes available.

‘SEC. 1240I. SOUTHERN HIGH PLAINS AQUIFER GROUNDWATER CONSERVATION.

    ‘(a) DEFINITIONS- In this section:

      ‘(1) ELIGIBLE ACTIVITY-

        ‘(A) IN GENERAL- The term ‘eligible activity’ means an activity carried out to conserve groundwater.

        ‘(B) INCLUSIONS- The term ‘eligible activity’ includes an activity to--

          ‘(i) improve an irrigation system;

          ‘(ii) reduce the use of water for irrigation (including changing from high-water intensity crops to low-water intensity crops); or

          ‘(iii) convert from farming that uses irrigation to dryland farming.

      ‘(2) SOUTHERN HIGH PLAINS AQUIFER- The term ‘Southern High Plains Aquifer’ means the portion of the groundwater reserve under Kansas, New Mexico, Oklahoma, and Texas depicted as Figure 1 in the United States Geological Survey Professional Paper 1400-B, entitled ‘Geohydrology of the High Plains Aquifer in Parts of Colorado, Kansas, Nebraska, New Mexico, Oklahoma, South Dakota, Texas, and Wyoming’.

    ‘(b) CONSERVATION MEASURES-

      ‘(1) IN GENERAL- Subject to paragraph (2), the Secretary shall provide cost-share payments, incentive payments, and groundwater education assistance to producers that draw water from the Southern High Plains Aquifer to carry out eligible activities.

      ‘(2) LIMITATIONS- The Secretary shall provide a payment to a producer under this section only if the Secretary determines that the payment will result in a net savings in groundwater resources on the land of the producer.

      ‘(3) COOPERATION- In accordance with this subtitle, in providing groundwater education under this subsection, the Secretary shall cooperate with--

        ‘(A) States;

        ‘(B) land-grant colleges and universities;

        ‘(C) other educational institutions;

        ‘(D) State cooperative extension services; and

        ‘(E) private organizations.

    ‘(c) FUNDING-

      ‘(1) IN GENERAL- Of the funds made available under section 1241(b) to carry out the program, the Secretary shall use to carry out this section--

        ‘(A) $15,000,000 for fiscal year 2003;

        ‘(B) $25,000,000 for each of fiscal years 2004 and 2005;

        ‘(C) $35,000,000 for fiscal year 2006; and

        ‘(D) $0 for fiscal year 2007.

      ‘(2) OTHER FUNDS- Subject to paragraph (3), the funds made available under this subsection shall be in addition to any other funds provided under the program.

      ‘(3) UNUSED FUNDING- Any funds made available for a fiscal year under paragraph (1) that are not obligated by April 1 of the fiscal year shall be used to carry out other activities in other States under the program.

‘SEC. 1240J. PILOT PROGRAMS.

    ‘(a) DRINKING WATER SUPPLIERS PILOT PROGRAM-

      ‘(1) IN GENERAL- For each fiscal year, the Secretary may carry out, in watersheds selected by the Secretary, in cooperation with local water utilities, a pilot program to improve water quality.

      ‘(2) IMPLEMENTATION- The Secretary may select the watersheds referred to in paragraph (1), and make available funds (including funds for the provision of incentive payments) to be allocated to producers in partnership with drinking water utilities in the watersheds, if the drinking water utilities agree to measure water quality at such intervals and in such a manner as may be determined by the Secretary.

    ‘(b) NUTRIENT REDUCTION PILOT PROGRAM-

      ‘(1) DEFINITION OF CHESAPEAKE EXECUTIVE COUNCIL- In this subsection, the term ‘Chesapeake Executive Council’ means the Federal-State council--

        ‘(A) comprised of--

          ‘(i) the mayor of the District of Columbia;

          ‘(ii) the Governors of the States of Maryland, Pennsylvania, and Virginia;

          ‘(iii) the Administrator of the Environmental Protection Agency; and

          ‘(iv) the Chair of the Chesapeake Bay Commission; and

        ‘(B) charged with the policy leadership, coordination, and implementation of the region-wide Chesapeake Bay Program restoration effort.

      ‘(2) PROGRAM- For each of fiscal years 2003 through 2006, the Secretary shall use funds made available to carry out the program, in the amounts specified in paragraph (5), in the Chesapeake Bay watershed to provide incentive payments to producers to--

        ‘(A) reduce nutrient loads to the Chesapeake Bay; and

        ‘(B) achieve the goals of the Chesapeake Executive Council.

      ‘(3) PRIORITY; MEASUREMENT; PAYMENTS- In carrying out paragraph (2), the Secretary shall--

        ‘(A) give priority to nutrient reduction techniques that reduce nutrient applications rates to a level that is substantially below the level recommended in a best management practice (as identified by the Secretary);

        ‘(B) measure any reduction in nutrient application rates by an appropriate indicator of actual performance (such as the level of nutrients applied or fixed in excess of crop removal); and

        ‘(C) increase the amount of an incentive payment to a producer to reflect superior performance by the producer.

      ‘(4) PARTNERSHIPS- The Secretary shall carry out this subsection in partnership with--

        ‘(A) State governments;

        ‘(B) nonprofit organizations approved by the Secretary; and

        ‘(C) State colleges and universities.

      ‘(5) FUNDING-

        ‘(A) IN GENERAL- Of the amounts made available under section 1241(b) to carry out the program, the Secretary shall use to carry out this subsection--

          ‘(i) $10,000,000 for fiscal year 2003;

          ‘(ii) $15,000,000 for fiscal year 2004;

          ‘(iii) $20,000,000 for fiscal year 2005;

          ‘(iv) $25,000,000 for fiscal year 2006; and

          ‘(v) $0 for fiscal year 2007.

        ‘(B) UNEXPENDED FUNDS- Any funds made available for a fiscal year under subparagraph (A) that are not obligated by April 1 of the fiscal year shall be used to carry out other activities under this chapter.

    ‘(c) CONSISTENCY WITH WATERSHED PLAN- In allocating funds for the pilot programs under subsections (a) and (b) and any other pilot programs carried out under the program, the Secretary shall take into consideration the extent to which an application for the funds is consistent with--

      ‘(1) any applicable locally developed watershed plan; and

      ‘(2) the factors established by section 1240C.

    ‘(d) CONTRACTS-

      ‘(1) IN GENERAL- In carrying out this section, in addition to other requirements under the program, the Secretary shall enter into contracts in accordance with this section with producers the activities of which affect water quality (including the quality of public drinking water supplies) to implement and maintain--

        ‘(A) nutrient management;

        ‘(B) pest management;

        ‘(C) soil erosion practices; and

        ‘(D) other conservation activities that protect water quality and human health.

      ‘(2) REQUIREMENTS- A contract described in paragraph (1) shall--

        ‘(A) describe the specific nutrient management, pest management, soil erosion, or other practices to be implemented, maintained, or improved;

        ‘(B) contain a schedule of implementation for those practices;

        ‘(C) to the maximum extent practicable, address water quality priorities of the watershed in which the operation is located; and

        ‘(D) contain such other terms as the Secretary determines to be appropriate.’.

    (b) FUNDING- Section 1241 of the Food Security Act of 1985 (16 U.S.C. 3841) is amended by striking subsection (b) and inserting the following:

    ‘(b) ENVIRONMENTAL QUALITY INCENTIVES PROGRAM- Subject to section 241 of the Agriculture, Conservation, and Rural Enhancement Act of 2002, of the funds of the Commodity Credit Corporation, the Secretary shall make available to provide technical assistance, cost-share payments, incentive payments, bonus payments, grants, and education under the environmental quality incentives program under chapter 4 of subtitle D, to remain available until expended--

      ‘(1) $500,000,000 for fiscal year 2002;

      ‘(2) $1,300,000,000 for fiscal year 2003;

      ‘(3) $1,450,000,000 for each of fiscal years 2004 and 2005;

      ‘(4) $1,500,000,000 for fiscal year 2006; and

      ‘(5) $850,000,000 for fiscal year 2007.’.

    (c) REIMBURSEMENTS- Section 11 of the Commodity Credit Corporation Charter Act (15 U.S.C. 714i) is amended in the last sentence by inserting ‘but excluding transfers and allotments for conservation technical assistance’ after ‘activities’.

SEC. 214. WETLANDS RESERVE PROGRAM.

    (a) TECHNICAL ASSISTANCE- Section 1237(a) of the Food Security Act of 1985 (16 U.S.C. 3837(a)) is amended by inserting ‘(including the provision of technical assistance)’ before the period at the end.

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

      ‘(1) MAXIMUM ENROLLMENT-

        ‘(A) IN GENERAL- The total number of acres enrolled in the wetlands reserve program shall not exceed 2,225,000 acres, of which, to the maximum extent practicable subject to subparagraph (B), the Secretary shall enroll 250,000 acres in each calendar year.

        ‘(B) WETLANDS RESERVE ENHANCEMENT ACREAGE- Of the acreage enrolled under subparagraph (A) for a calendar year, not more than 25,000 acres may be enrolled in the wetlands reserve enhancement program described in subsection (h).’.

    (c) REAUTHORIZATION- Section 1237(c) of the Food Security Act of 1985 (16 U.S.C. 3837(c)) is amended by striking ‘2002’ and inserting ‘2006’.

    (d) WETLANDS RESERVE ENHANCEMENT PROGRAM- Section 1237 of the Food Security Act of 1985 (16 U.S.C. 3837) is amended by adding at the end the following:

    ‘(h) WETLANDS RESERVE ENHANCEMENT PROGRAM-

      ‘(1) IN GENERAL- Notwithstanding the Federal Grant and Cooperative Agreement Act of 1977 (41 U.S.C. 501 et seq.), the Secretary may enter into cooperative agreements with State or local governments, and with private organizations, to develop, on land that is enrolled, or is eligible to be enrolled, in the wetland reserve established under this subchapter, wetland restoration activities in watershed areas.

      ‘(2) PURPOSE- The purpose of the agreements shall be to address critical environmental issues.

      ‘(3) RELATIONSHIP TO OTHER AUTHORITIES- Nothing in this subsection limits the authority of the Secretary to enter into a cooperative agreement with a party under which agreement the Secretary and the party--

        ‘(A) share a mutual interest in the program under this subchapter; and

        ‘(B) contribute resources to accomplish the purposes of that program.’.

    (e) MONITORING AND MAINTENANCE- Section 1237C(a)(2) of the Food Security Act of 1985 (16 U.S.C. 3837c(a)(2)) is amended by striking ‘assistance’ and inserting ‘assistance (including monitoring and maintenance)’.

SEC. 215. WATER CONSERVATION.

    (a) IN GENERAL- Section 1231(d) of the Food Security Act of 1985 (16 U.S.C. 3831(d)) (as amended by section 212(c)) is amended by striking ‘41,100,000’ and inserting ‘40,000,000’.

    (b) ADDITIONAL WATER CONSERVATION ACREAGE UNDER CONSERVATION RESERVE ENHANCEMENT PROGRAM- Section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831) (as amended by section 212(f)) is amended by adding at the end the following:

    ‘(j) ADDITIONAL WATER CONSERVATION ACREAGE UNDER CONSERVATION RESERVE ENHANCEMENT PROGRAM-

      ‘(1) DEFINITIONS- In this subsection:

        ‘(A) ELIGIBLE ENTITY-

          ‘(i) IN GENERAL- The term ‘eligible entity’ means--

            ‘(I)(aa) an owner or operator of agricultural land; or

            ‘(bb) a person or entity that holds water rights in accordance with or recognized by State law (including a beneficial owner of water rights in accordance with State law through direct contract with the individual or entity having legal title to the water rights); and

            ‘(II) any other landowner.

          ‘(ii) INCLUSIONS- The term ‘eligible entity’ includes an irrigation district, water district, or similar governmental entity in the State of California.

        ‘(B) PROGRAM- The term ‘program’ means the conservation reserve enhancement program described in a notice issued on May 27, 1998 (63 Fed. Reg. 28965).

      ‘(2) PROTECTION OF PRIVATE PROPERTY RIGHTS-

        ‘(A) WILLING SELLERS AND LESSORS- An agreement may be executed under this subsection only if each eligible entity that is a party to the agreement is a willing seller or willing lessor.

        ‘(B) PROPERTY RIGHTS- Nothing in this subsection authorizes the Federal Government or any State government to condemn private property.

      ‘(3) ENROLLMENT- In addition to the acreage authorized to be enrolled under subsection (d), in carrying out the program, the Secretary, in consultation with eligible States, shall enroll not more than 500,000 acres in eligible States to promote water conservation.

      ‘(4) ELIGIBLE STATES- To be eligible to participate in the program, a State--

        ‘(A) shall submit to the Secretary, for review and approval, a proposal that meets the requirements of the program; and

        ‘(B) shall--

          ‘(i) have established a program or system to protect in-stream flows or uses; and

          ‘(ii) agree to hold water rights leased or purchased under a proposal submitted under subparagraph (A).

      ‘(5) ELIGIBLE ACREAGE- An eligible entity may enroll in the program land in an eligible State that is adjacent to a watercourse or lake, or land that would contribute to the restoration of a watercourse or lake (as determined by the Secretary), if--

        ‘(A)(i) the land can be restored as a wetland, grassland, or other habitat, as determined by the Secretary in accordance with the field office technical guides and handbooks of the Natural Resources Conservation Service; and

        ‘(ii) the restoration would significantly improve riparian functions, as determined by the Secretary; or

        ‘(B) water or water rights appurtenant to the land are leased or sold to an appropriate State agency or State-designated water trust, as determined by the Secretary.

      ‘(6) RELATIONSHIP TO OTHER ACREAGE- For any fiscal year, acreage enrolled under this subsection shall not affect the quantity of--

        ‘(A) acreage enrolled to establish conservation buffers as part of the program described in a notice issued on March 24, 1998 (63 Fed. Reg. 14109);

        ‘(B) acreage enrolled in the program before the date of enactment of this subsection; or

        ‘(C) acreage that, as of the date of enactment of this subsection, is committed by the Secretary for enrollment in the program in any State.

      ‘(7) DUTIES OF ELIGIBLE ENTITIES- Under a contract entered into with respect to enrolled land under the program, during the term of the contract, an eligible entity shall agree--

        ‘(A)(i) to restore the hydrology of the enrolled land to the maximum extent practicable, as determined by the Secretary; and

        ‘(ii) to establish on the enrolled land wetland, grassland, vegetative cover, or other habitat, as determined by the Secretary; or

        ‘(B) to transfer to the State, or a designee of the State, water rights appurtenant to the enrolled land.

      ‘(8) RENTAL RATES-

        ‘(A) IRRIGATED LAND- With respect to irrigated land enrolled in the program, the rental rate shall be established by the Secretary--

          ‘(i) on a watershed basis;

          ‘(ii) using data available as of the date on which the rental rate is established; and

          ‘(iii) at a level sufficient to ensure, to the maximum extent practicable, that the eligible entity is fairly compensated for the irrigated land value of the enrolled land.

        ‘(B) NONIRRIGATED LAND- With respect to nonirrigated land enrolled in the program, the rental rate shall be calculated by the Secretary, in accordance with the conservation reserve program manual of the Department.

        ‘(C) APPLICABILITY- An eligible entity that enters into a contract to enroll land into the program shall receive, in exchange for the enrollment, payments that are based on--

          ‘(i) the irrigated rental rate described in subparagraph (A), if the owner or operator agrees to enter into an agreement with the State and approved by the Secretary under which the State leases, for in-stream flow purposes or uses, surface water appurtenant to the enrolled land; or

          ‘(ii) the nonirrigated rental rate described in subparagraph (B), if an owner or operator does not enter into an agreement described in clause (i).

      ‘(9) PRIORITY- In carrying out this subsection, the Secretary shall give priority consideration to any State proposal that--

        ‘(A) provides a State or non-Federal share of 20 percent or more of the cost of the proposal; and

        ‘(B) significantly advances the goals of Federal, State, tribal, and local fish, wildlife, and plant conservation plans, including--

          ‘(i) plans that address--

            ‘(I) multiple endangered species or threatened species (as defined in section 3 of the Endangered Species Act of 1973 (16 U.S.C. 1532)); or

            ‘(II) species that may become threatened or endangered if conservation measures are not carried out;

          ‘(ii) agreements entered into, or conservation plans submitted, under section 6 or 10(a)(2)(A), respectively, of the Endangered Species Act of 1973 (16 U.S.C. 1535, 1539(a)(2)(A)); or

          ‘(iii) plans that provide benefits to the fish, wildlife, or plants located in 1 or more--

            ‘(I) refuges within the National Wildlife Refuge System; or

            ‘(II) State wildlife management areas.

      ‘(10) CONSULTATION- In carrying out this subsection, the Secretary shall consult with--

        ‘(A) the Secretary of the Interior;

        ‘(B) eligible States;

        ‘(C) affected Indian tribes; and

        ‘(D) any affected irrigation districts established or recognized under State law.

      ‘(11) STATE WATER LAW- Nothing in this subsection--

        ‘(A) preempts any State water law;

        ‘(B) affects any litigation concerning the right or entitlement to, or lack of right or entitlement to, water that is pending as of the date of enactment of this subsection;

        ‘(C) expands, alters, or otherwise affects the existence or scope of any water right of any individual (except to the extent that the individual agrees otherwise under the program); or

        ‘(D) authorizes or entitles the Federal Government to hold or purchase any water right.

      ‘(12) IMPLEMENTATION- In carrying out this subsection, the Secretary shall comply with--

        ‘(A) all interstate compacts, court decrees, and Federal and State laws (including regulations) that may affect water or water rights; and

        ‘(B) all procedural and substantive State water law.

      ‘(13) CALIFORNIA WATER LAW-

        ‘(A) IN GENERAL- Nothing in this subsection authorizes the Secretary to enter into an agreement, in accordance with this subsection, with a landowner for water obtained from an irrigation district, water district, or other similar governmental entity in the State of California.

        ‘(B) DISTRICT PROGRAMS- All landowners participating in the program through membership in a district or entity described in subparagraph (A) shall be willing participants in the program.

      ‘(14) GROUNDWATER- A right to groundwater shall not be subject to any provision of this subsection unless the right is granted--

        ‘(A) under applicable State law; and

        ‘(B) through a groundwater water rights process that is fully integrated with the surface water rights process of the applicable affected State.

      ‘(15) PROHIBITION ON FEDERAL PURCHASE, LEASE, AND RETENTION OF WATER RIGHTS- No water rights under this subsection shall be purchased, leased, or held by the Secretary or any other officer or agent of the Federal Government.

      ‘(16) STATE FLEXIBILITY- With respect to State participation in the program--

        ‘(A) nothing in this subsection limits any State application to participate in the program; and

        ‘(B) the Secretary shall accord States full flexibility to carry out projects and activities under the program.

      ‘(17) ELIGIBLE STATES- Eligible States under this program shall include only Nevada, California, New Mexico, Washington, Oregon, Maine and New Hampshire.’.

    (c) WATER BENEFITS PROGRAM- Subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3831 et seq.) is amended by adding at the end the following:

‘CHAPTER 6--WATER CONSERVATION

‘SEC. 1240R. WATER BENEFITS PROGRAM.

    ‘(a) DEFINITIONS- In this section:

      ‘(1) ELIGIBLE ENTITY-

        ‘(A) IN GENERAL- The term ‘eligible entity’ means--

          ‘(i)(I) an owner or operator of agricultural land; or

          ‘(II) a person or entity that holds water rights in accordance with or recognized by State law (including a beneficial owner of water rights in accordance with State law through direct contract with the individual or entity having legal title to the water rights); and

          ‘(ii) any other landowner.

        ‘(B) INCLUSIONS- The term ‘eligible entity’ includes an irrigation district, water district, or similar governmental entity in the State of California.

      ‘(2) PROGRAM- The term ‘program’ means the water benefits program established under subsection (b).

    ‘(b) ESTABLISHMENT- The Secretary, in consultation with eligible States, shall establish a program to promote water conservation, to be known as the ‘water benefits program’, under which the Secretary shall, through the Natural Resources Conservation Service, in consultation with eligible States, provide cost-share payments to willing eligible entities for--

      ‘(1) in accordance with subsection (f), irrigation efficiency infrastructure or measures that provide in-stream flows for fish and wildlife and other environmental purposes or uses;

      ‘(2) converting from production of a water-intensive crop to a crop that requires less water; or

      ‘(3)(A) the lease, purchase, dry-year optioning, transfer, or dedication of water or water rights to provide, directly or indirectly through mechanisms consistent with State water law, in-stream flows for fish and wildlife and other environmental purposes or uses (including wetland restoration); or

      ‘(B) the conservation, provision, and protection of water to benefit fish and wildlife under a State plan approved by the Secretary for those purposes.

    ‘(c) PROTECTION OF PRIVATE PROPERTY RIGHTS-

      ‘(1) WILLING SELLERS AND LESSORS- An agreement may be executed under this section only if each eligible entity that is a party to the agreement is a willing seller or willing lessor.

      ‘(2) PROPERTY RIGHTS- Nothing in this section authorizes the Federal Government or any State government to condemn private property.

    ‘(d) ELIGIBLE STATES- An eligible entity may receive a payment under the program if the State in which the eligible entity is located--

      ‘(1)(A) submits to the Secretary a State plan under which the State holds and enforces water rights leased, purchased, dry-year optioned, transferred, or dedicated to provide for in-stream flows or other uses that benefit fish and wildlife; or

      ‘(B) otherwise establishes a State program to conserve, provide, and protect water to benefit fish and wildlife approved by the Secretary;

      ‘(2)(A) submits to the Secretary a State plan to protect in-stream flows or uses; and

      ‘(B) obtains approval of the State programs and plans by the Secretary;

      ‘(3) designates a State agency to administer the State programs and plans;

      ‘(4) subjects each lease, purchase, dry-year optioning, transfer, and dedication of water and water rights to any review and approval required under State law, such as review and approval by a water board, water court, or water engineer of the State; and

      ‘(5) ensure that each lease, purchase, dry-year optioning, transfer, and dedication of water and water rights is consistent with State water law.

    ‘(e) ROLE OF SECRETARY- In carrying out this section, the Secretary shall--

      ‘(1) establish guidelines for participating States to pay a portion of the cost of assisting the conversion from production of water-intensive crops to crops that require less water;

      ‘(2) establish guidelines, in accordance with the field office and technical guides and handbooks of the Natural Resources Conservation Service, for assisting with the cost of on-farm and off-farm irrigation efficiency infrastructure and measures described in subsection (f)(2);

      ‘(3) establish guidelines for participating States for--

        ‘(A) the lease, purchase, dry-year optioning, transfer, and dedication of water and water rights under State plans; or

        ‘(B) the conservation, provision, and protection of water to benefit fish and wildlife under a program described in subsection (b)(3)(B);

      ‘(4) establish a program within the Agricultural Research Service, in collaboration with the United States Geological Survey, to monitor State efforts under the program, including the construction and maintenance of stream gauging stations; and

      ‘(5) consult with eligible States, the Secretary of the Interior, affected Indian tribes, and each affected irrigation district established under or recognized by State law that makes water available to a participating eligible entity, particularly with respect to the establishment and implementation of the program.

    ‘(f) IRRIGATION EFFICIENCY INFRASTRUCTURE AND MEASURES-

      ‘(1) IN GENERAL- The Secretary may pay--

        ‘(A) not more than 75 percent of the cost of converting from production of a water-intensive crop to a crop that requires less water, as described in subsection (e)(2); and

        ‘(B) the share determined under subsection (g) of the cost of on-farm and, in cases in which an irrigation ditch crosses more than 1 farm, off-farm irrigation efficiency infrastructure and measures described in paragraph (2) if not less than 75 percent of the water conserved as a result of the infrastructure and measures is permanently allocated, directly or indirectly, to in-stream flows or uses.

      ‘(2) ELIGIBLE IRRIGATION EFFICIENCY INFRASTRUCTURE AND MEASURES- Eligible irrigation efficiency land-based and fixed infrastructure and measures referred to in paragraph (1) are--

        ‘(A) lining of ditches, insulation or installation of piping, and installation of ditch portals or gates;

        ‘(B) tail water return systems;

        ‘(C) low-energy precision applications;

        ‘(D) low-flow irrigation systems, including drip and trickle systems and micro-sprinkler systems;

        ‘(E) surge valves;

        ‘(F) off-stream storage ponds inundating less than 5 acres that the Secretary, in consultation with the State, the Secretary of the Interior, and the Secretary of Commerce, determines to be appropriate to carry out the program;

        ‘(G) conversion from gravity or flood irrigation to low-flow sprinkler or drip irrigation systems;

        ‘(H) intake screens, fish passages, and conversion of diversions to pumps;

        ‘(I) alternate furrow wetting, irrigation scheduling, and similar measures; and

        ‘(J) such other land-based irrigation efficiency infrastructure and measures as the Secretary determines to be appropriate to carry out the program.

    ‘(g) COST SHARING-

      ‘(1) IN GENERAL- The share of the cost of converting from production of a water-intensive crop to a crop that requires less water, or of an irrigation efficiency infrastructure or measure assisted under subsection (f), that is not provided by this section--

        ‘(A) shall be not less than 25 percent; and

        ‘(B) shall be paid by--

          ‘(i) a State;

          ‘(ii) an owner or operator of a farm or ranch (including an Indian tribe); or

          ‘(iii) a nonprofit organization;

        except that at least 10 percent of the share shall be paid by the eligible entity.

      ‘(2) INCREASED SHARE- If an owner or operator of a farm or ranch pays 50 percent or more of the cost of converting from production of a water-intensive crop to a crop that requires less water, or of an irrigation efficiency infrastructure or measure, the owner or operator shall retain the right to use 50 percent of the water conserved by the conversion, infrastructure, or measure.

      ‘(3) LEASING OF CONSERVED WATER- A State shall give an eligible entity with respect to land enrolled in the program the option of leasing, or providing a dry-year option on, conserved water for 30 years.

      ‘(4) WATER LEASE AND PURCHASE- The cost of water or water rights that are directly leased, purchased, subject to a dry-year option, or dedicated under this section shall not be subject to the cost-sharing requirement of this subsection.

    ‘(h) STATE PLAN APPROVAL- In determining whether to approve a State plan under subsection (d)(3), the Secretary shall consider the extent to which the State plan significantly advances the goals of Federal, State, tribal, and local fish, wildlife, and plant conservation plans, including--

      ‘(1) plans that address--

        ‘(A) multiple endangered species or threatened species (as defined in section 3 of the Endangered Species Act of 1973 (16 U.S.C. 1532)); or

        ‘(B) species that may become threatened or endangered if conservation measures are not carried out;

      ‘(2) agreements entered into, or conservation plans submitted, under section 6 or 10(a)(2)(A), respectively, of the Endangered Species Act of 1973 (16 U.S.C. 1535, 1539(a)(2)(A)); and

      ‘(3) plans that provide benefits to the fish, wildlife, or plants located in 1 or more--

        ‘(A) refuges within the National Wildlife Refuge System; or

        ‘(B) State wildlife management areas.

    ‘(i) STATE WATER LAW- Nothing in this section--

      ‘(1) preempts any State water law;

      ‘(2) affects any litigation concerning the right or entitlement to, or lack of right or entitlement to, water that is pending as of the date of enactment of this section;

      ‘(3) expands, alters, or otherwise affects the existence or scope of any water right of any individual (except to the extent that the individual agrees otherwise under the program); or

      ‘(4) authorizes or entitles the Federal Government to hold or purchase any water right.

    ‘(j) IMPLEMENTATION- In carrying out this section, the Secretary shall comply with--

      ‘(1) all interstate compacts, court decrees, and Federal and State laws (including regulations) that may affect water or water rights; and

      ‘(2) all procedural and substantive State water law.

    ‘(k) CALIFORNIA WATER LAW-

      ‘(1) IN GENERAL- Nothing in this section authorizes the Secretary to enter into an agreement, in accordance with this section, with a landowner for water obtained from an irrigation district, water district, or other similar governmental entity in the State of California.

      ‘(2) DISTRICT PROGRAMS- All landowners participating in the program through membership in a district or entity described in paragraph (1) shall be willing participants in the program.

    ‘(l) GROUNDWATER- A right to groundwater shall not be subject to any provision of this section unless the right is granted--

      ‘(1) under applicable State law; and

      ‘(2) through a groundwater water rights process that is fully integrated with the surface water rights process of the applicable affected State.

    ‘(m) PROHIBITION ON FEDERAL PURCHASE, LEASE, AND RETENTION OF WATER RIGHTS- No water rights under this section shall be purchased, leased, or held by the Secretary or any other officer or agent of the Federal Government.

    ‘(n) EXEMPTION FOR CERTAIN STATES- This section shall not apply to the States of Nebraska and North Dakota.

    ‘(o) FUNDING-

      ‘(1) IN GENERAL- Of the funds of the Commodity Credit Corporation, the Secretary shall make available to carry out this section--

        ‘(A) $25,000,000 for fiscal year 2002;

        ‘(B) $52,000,000 for fiscal year 2003; and

        ‘(C) $100,000,000 for each of fiscal years 2004 through 2006.

      ‘(2) LIMITATION ON EXPENDITURES- For any fiscal year, a State may expend not more than 75 percent of the funds made available to the State under the program to pay--

        ‘(A) the cost of converting from production of a water-intensive crop to a crop that requires less water; or

        ‘(B) the cost of irrigation efficiency infrastructure and measures under subsection (f)(1).

      ‘(3) MONITORING PROGRAM- For each fiscal year, of the funds made available under paragraph (1), the Secretary shall use not more than $5,000,000 to carry out the monitoring program under subsection (e)(5).

      ‘(4) ADMINISTRATION-

        ‘(A) FEDERAL- For each fiscal year, of the funds made available under paragraph (1), the Secretary shall such sums as are necessary for administration and technical assistance.

        ‘(B) STATE- For each fiscal year, of the funds made available under paragraph (1), not more than 3 percent shall be made available to States for administration of the program.

      ‘(5) ELIGIBLE STATES- Eligible States under this program shall include only Nevada, California, New Mexico, Oregon, Washington, Maine and New Hampshire.’.

    (d) CONFORMING AMENDMENT- Section 1231(b)(6) of the Food Security Act of 1985 (16 U.S.C. 3831(b)(6)) (as amended by section 212(b)(1)) is amended by striking subparagraph (B) and inserting the following:

        ‘(B)(i) into the conservation reserve enhancement program described in a notice issued on May 27, 1998 (63 Fed. Reg. 28965) (or a successor program); or

        ‘(ii) under subsection (j).’.

SEC. 216. 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 by 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.

    ‘(e) USE OF OTHER ENTITIES AND PERSONS- A council may use another person or entity to assist in developing and implementing an area plan and otherwise carrying out this subtitle.

‘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. 217. WILDLIFE HABITAT INCENTIVE PROGRAM.

    (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. WILDLIFE HABITAT INCENTIVE PROGRAM.

    ‘(a) DEFINITIONS- In this section:

      ‘(1) ENDANGERED SPECIES- The term ‘endangered species’ has the meaning given the term in section 3 of the Endangered Species Act of 1973 (16 U.S.C. 1532).

      ‘(2) PROGRAM- The term ‘program’ means the wildlife habitat incentive program established under subsection (b).

      ‘(3) SENSITIVE SPECIES- The term ‘sensitive species’ has the meaning given the term ‘candidate species’ within the meaning of section 424.02(b) of title 50, Code of Federal Regulations (or a successor regulation) or a species which may become threatened or endangered if conservation actions are not taken to conserve that species.

      ‘(4) THREATENED SPECIES- The term ‘threatened species’ has the meaning given the term in section 3 of the Endangered Species Act of 1973 (16 U.S.C. 1532).

    ‘(b) ESTABLISHMENT- In consultation with the State technical committees established under section 1261 of the Food Security Act of 1985 (16 U.S.C. 3861), the Secretary shall establish the wildlife habitat incentive program.

    ‘(c) COST-SHARE PAYMENTS-

      ‘(1) IN GENERAL- Under the program, the Secretary shall make cost-share payments, and provide technical assistance, to landowners of eligible land to develop and enhance wildlife habitat (including aquatic habitat) approved by the Secretary.

      ‘(2) ENDANGERED AND THREATENED SPECIES- Of the funds made available to carry out this subsection, the Secretary shall use at least 15 percent to make cost-share payments to carry out projects and activities relating to endangered species, threatened species, and sensitive species.

    ‘(d) PILOT PROGRAM FOR ESSENTIAL PLANT AND ANIMAL HABITAT- Under the program, the Secretary may establish procedures to use not more than 15 percent of funds made available to acquire and enroll eligible land for periods of at least 15 years to protect and restore essential (as determined by the Secretary) plant and animal habitat.

    ‘(e) ELIGIBLE PARTIES- After consulting, to the maximum extent practicable, with State wildlife officials, the Secretary may provide grants under this section to individuals and nonprofit organizations that lease public land.

    ‘(f) NEXUS TO PRIVATE LAND- Funds from a grant provided under subsection (e) may be used, as determined by the Secretary, for a purpose on public land if the purpose benefits private land.

    ‘(g) FUNDING- Of the funds of the Commodity Credit Corporation, the Secretary shall use to carry out this section (including the provision of technical assistance), to remain available until expended--

      ‘(1) $50,000,000 for fiscal year 2002;

      ‘(2) $225,000,000 for fiscal year 2003;

      ‘(3) $275,000,000 for fiscal year 2004;

      ‘(4) $325,000,000 for fiscal years 2005;

      ‘(5) $355,000,000 for fiscal year 2006; and

      ‘(6) $50,000,000 for fiscal year 2007.’.

‘SEC. 1240N. WATERSHED RISK REDUCTION.

    ‘(a) IN GENERAL- The Secretary, acting through the Natural Resources Conservation Service (referred to in this section as the ‘Secretary’), in cooperation with landowners and land users, may carry out such projects and activities (including the purchase of floodplain easements for runoff retardation and soil erosion prevention) as the Secretary determines to be necessary to safeguard lives and property from floods, drought, and the products of erosion on any watershed in any case in which fire, flood, or any other natural occurrence has caused, is causing, or may cause a sudden impairment of that watershed.

    ‘(b) PRIORITY- In carrying out this section, the Secretary shall give priority to any project or activity described in subsection (a) that is carried out on a floodplain adjacent to a major river, as determined by the Secretary.

    ‘(c) PROHIBITION ON DUPLICATIVE FUNDS- No project or activity under subsection (a) that is carried out using funds made available under this section may be carried out using funds made available under any Federal disaster relief program administered by the Secretary relating to floods.

    ‘(d) FUNDING- There is authorized to be appropriated to carry out this section $15,000,000 for each of fiscal years 2002 through 2006.

‘SEC. 1240O. 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 2006.

‘SEC. 1240P. CONSERVATION OF PRIVATE GRAZING LAND.

    ‘(a) FINDINGS- Congress finds that--

      ‘(1) private grazing land constitutes nearly 1/2 of the non-Federal land of the United States and is basic to the environmental, social, and economic stability of rural communities;

      ‘(2) private grazing land contains a complex set of interactions among soil, water, air, plants, and animals;

      ‘(3) grazing land constitutes the single largest watershed cover type in the United States and contributes significantly to the quality and quantity of water available for all of the many uses of the land;

      ‘(4) private grazing land constitutes the most extensive wildlife habitat in the United States;

      ‘(5) private grazing land can provide opportunities for improved nutrient management from land application of animal manures and other by-product nutrient resources;

      ‘(6) landowners and managers of private grazing land need to continue to recognize conservation problems when the problems arise and receive sound technical assistance to improve or conserve grazing land resources to meet ecological and economic demands;

      ‘(7) new science and technology must continually be made available in a practical manner so owners and managers of private grazing land may make informed decisions concerning vital grazing land resources;

      ‘(8) agencies of the Department with private grazing land responsibilities are the agencies that have the expertise and experience to provide technical assistance, education, and research to owners and managers of private grazing land for the long-term productivity and ecological health of grazing land;

      ‘(9) although competing demands on private grazing land resources are greater than ever before, assistance to private owners and managers of private grazing land is limited and does not meet the demand and basic need for adequately sustaining or enhancing the private grazing land resources; and

      ‘(10) private grazing land can be enhanced to provide many benefits to all citizens of the United States through voluntary cooperation among owners and managers of the land, local conservation districts, and the agencies of the Department responsible for providing assistance to owners and managers of land and to conservation districts.

    ‘(b) PURPOSE- The purpose of this section is 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, tribal, 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.

    ‘(c) DEFINITION OF PRIVATE GRAZING LAND- In this section, the term ‘private grazing land land’ means rangeland, pastureland, grazed forest land, hay land, and any other non-federally owned land that is--

      ‘(1) private;

      ‘(2) owned by a State; or

      ‘(3) under the jurisdiction of an Indian tribe .

    ‘(d) PRIVATE GRAZING LAND CONSERVATION ASSISTANCE-

      ‘(1) IN GENERAL- 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; and

        ‘(H) identifying the opportunities and encouraging the diversification of private grazing land enterprises.

      ‘(2) PROGRAM ELEMENTS-

        ‘(A) FUNDING- Funds may be used to carry out this section only if the funds are 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 of Agriculture 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.

    ‘(e) 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, 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 DISTRICTS- In accordance with paragraph (3), the Secretary may establish 2 grazing management demonstration districts on the recommendation of the grazing land conservation initiative steering committee.

      ‘(3) PROCEDURE-

        ‘(A) PROPOSAL- Within a reasonable time after the submission of a proposal of an organization of farmers or ranchers engaged in grazing in a district, subject to subparagraphs (B) through (F), the Secretary establish a grazing management district in accordance with the proposal.

        ‘(B) FUNDING- The terms and conditions of the funding and operation of the grazing management district shall be proposed by the farmers and ranchers engaged in grazing in the district.

        ‘(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 the proposal submitted by farmers or ranchers under subparagraph (A).

        ‘(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 farmers, ranchers, and technical experts.

    ‘(f) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this section $60,000,000 for each of fiscal years 2002 through 2006.

‘SEC. 1240Q. 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 2006.’.

    (b) CONFORMING AMENDMENT- Section 386 of the Federal Agriculture Improvement and Reform Act of 1996 (16 U.S.C. 2005b) is repealed.

SEC. 218. FARMLAND PROTECTION PROGRAM.

    (a) IN GENERAL- Chapter 2 of the Food Security Act of 1985 (as added by section 201) 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), or (iii) 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 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.

‘SEC. 1238J. MARKET VIABILITY PROGRAM.

    ‘For each year for which funds are made available to carry out this subchapter, the Secretary may use not more than $10,000,000 to provide matching market viability grants and technical assistance to farm and ranch operators that participate in the program.’.

    (b) FUNDING- Section 1241 of the Food Security Act of 1985 (16 U.S.C. 3841) (as amended by section 202) is amended by adding at the end the following:

    ‘(d) FARMLAND PROTECTION PROGRAM-

      ‘(1) IN GENERAL- Of the funds of the Commodity Credit Corporation, the Secretary shall use to carry out subchapter B of chapter 2 (including the provision of technical assistance), to remain available until expended--

        ‘(A) $150,000,000 in fiscal year 2002;

        ‘(B) $250,000,000 in fiscal year 2003;

        ‘(C) $400,000,000 in fiscal year 2004;

        ‘(D) $450,000,000 in fiscal year 2005;

        ‘(E) $500,000,000 in fiscal year 2006; and

        ‘(F) $100,000,000 in fiscal year 2007.

      ‘(2) COST SHARING-

        ‘(A) FARMLAND PROTECTION-

          ‘(i) SHARE PROVIDED UNDER THIS SUBSECTION- The share of the cost of purchasing a conservation easement or other interest in eligible land described in section 1238I(a) provided under this subsection shall not exceed 50 percent of the appraised fair market value of the conservation easement or other interest in eligible land.

          ‘(ii) 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 section 1238I(a) that is not provided under this subsection, 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.

          ‘(iii) 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 section 1238I(a) are comparable in achieving the purposes of section 1238I, 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 section 1238I(a).

        ‘(B) MARKET VIABILITY CONTRIBUTIONS- As a condition of receiving a grant under section 1238J, a grantee shall provide funds in an amount equal to the amount of the grant.’.

    (c) CONFORMING AMENDMENT-

      (1) IN GENERAL- Section 388 of the Federal Agriculture Improvement and Reform Act of 1996 (16 U.S.C. 3830 note) is repealed.

      (2) EFFECT ON CONTRACTS- The amendment made by paragraph (1) 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. 219. GRASSLAND RESERVE PROGRAM.

    Chapter 2 of the Food Security Act of 1985 (as amended by section 218) is amended by adding at the end the following:

‘Subchapter C--Grassland Reserve Program

‘SEC. 1238N. GRASSLAND RESERVE PROGRAM.

    ‘(a) ESTABLISHMENT- The Secretary, acting through the Natural Resource Conservation Service, shall establish a grassland reserve program (referred to in this subchapter as the ‘program’) to assist owners in restoring and protecting eligible land described in subsection (c).

    ‘(b) ENROLLMENT CONDITIONS-

      ‘(1) IN GENERAL- The Secretary shall enroll in the program, from willing owners, not less than--

        ‘(A) 100 contiguous acres of land west of the 98th meridian; or

        ‘(B) except as provided in paragraph (2), 40 contiguous acres of land east of the 98th meridian.

      ‘(2) MAXIMUM ENROLLMENT- The total number of acres enrolled in the program shall not exceed 2,000,000 acres, of which not more than 500,000 acres shall be available for enrollment of tracts of native grassland of 40 acres or less that are located east of the 98th meridian.

      ‘(3) METHODS OF ENROLLMENT- The Secretary shall enroll land in the program through--

        ‘(A) permanent easements or 30-year easements;

        ‘(B) in a State that imposes a maximum duration for such an easement, an easement for the maximum duration allowed under State law; or

        ‘(C) a 30-year rental agreement.

    ‘(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) natural grassland (including prairie and land that contains shrubs or forb) that is indigenous to the locality;

      ‘(2) land that--

        ‘(A) is located in an area that has been historically dominated by natural grassland; and

        ‘(B) has potential to serve as habitat for animal or plant populations of significant ecological value if the land is 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 easement.

‘SEC. 1238O. EASEMENTS AND AGREEMENTS.

    ‘(a) IN GENERAL- To be eligible to enroll land in the program, the owner of the land shall enter into an agreement with the Secretary--

      ‘(1) if the agreement is for an easement--

        ‘(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; and

      ‘(2) if the agreement is for a rental agreement described in section 1238N(b)(3)(C), that specifies the terms and conditions applicable to--

        ‘(A) the Secretary; and

        ‘(B) the owner of the land.

    ‘(b) TERMS OF EASEMENT OF RENTAL AGREEMENT- An easement or rental agreement under subsection (a) shall--

      ‘(1) permit--

        ‘(A) grazing on the land in a manner that is consistent with maintaining the viability of natural grass, shrub, forb, and wildlife species indigenous to that locality;

        ‘(B) haying (including haying for seed production) or mowing, except during the nesting and brood-rearing seasons for birds in the area that are in significant decline, as determined by the Natural Resources Conservation Service State conservationist, or are protected Federal or State law; and

        ‘(C) fire rehabilitation, construction of fire breaks, and fences (including placement of the posts necessary for fences);

      ‘(2) prohibit--

        ‘(A) the production of row crops, fruit trees, vineyards, or any other agricultural commodity that requires breaking the soil surface; and

        ‘(B) except as permitted under paragraph (1)(C), the conduct of any other activities that would disturb the surface of the land covered by the easement, including--

          ‘(i) plowing; and

          ‘(ii) disking; and

      ‘(3) include such additional provisions as the Secretary determines are appropriate to carry out this subchapter or to facilitate the administration of this subchapter.

    ‘(c) EVALUATION AND RANKING OF EASEMENT AND RENTAL AGREEMENT APPLICATIONS-

      ‘(1) IN GENERAL- The Secretary, in conjunction with State technical committees, shall establish criteria to evaluate and rank applications for easements and rental agreements under this subchapter.

      ‘(2) CRITERIA- In establishing the criteria, the Secretary shall emphasize support for grazing operations, plant and animal biodiversity, and grassland and land containing shrubs or forb 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 and shrubland 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 paying the share of the cost of restoration provided by the Secretary and the provision of technical assistance).

    ‘(e) VIOLATIONS-

      ‘(1) IN GENERAL- On the violation of the terms or conditions of an easement, rental agreement, or restoration agreement entered into under this section--

        ‘(A) the easement or rental agreement shall remain in force; and

        ‘(B) 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.

      ‘(2) PERIODIC INSPECTIONS-

        ‘(A) IN GENERAL- After providing notice to the owner, the Secretary shall conduct periodic inspections of land subject to easements and rental agreements under this subchapter to ensure compliance with the terms of the easement, rental agreement, and applicable restoration agreement.

        ‘(B) LIMITATION- The Secretary may not prohibit the owner, or a representative of the owner, from being present during a periodic inspection.

‘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;

      ‘(2) pay a share of the cost of restoration; and

      ‘(3) provide technical assistance to the owner.

    ‘(b) PAYMENT SCHEDULE-

      ‘(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-

        ‘(A) AMOUNT- If an owner enters into a 30-year rental agreement authorized under section 1238N(b)(3)(C), the Secretary shall make 30 annual rental payments to the owner in an amount that equals, to the maximum extent practicable, the 30-year easement payment amount under paragraph (1)(A)(ii).

        ‘(B) ASSESSMENT- Not less than once every 5 years throughout the 30-year rental period, the Secretary shall assess whether the value of the rental payments under subparagraph (A) equals, to the maximum extent practicable, the total amount of 30-year easement payments as of the date of the assessment.

        ‘(C) ADJUSTMENT- If on completion of the assessment under subparagraph (B), the Secretary determines that the rental payments do not equal, to the maximum extent practicable, the value of payments under a 30-year easement, the Secretary shall adjust the amount of the remaining payments to equal, to the maximum extent practicable, the value of a 30-year easement over the entire 30-year rental period.

    ‘(c) COST OF RESTORATION- The Secretary shall make payments to the owner of not more than 75 percent of the cost of carrying out measures and practices necessary to restore grassland and shrubland functions and values.

    ‘(d) TECHNICAL ASSISTANCE- The Secretary shall provide owners with technical assistance to execute easement documents and restore the grassland and shrubland.

    ‘(e) 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.

    ‘(f) OTHER PAYMENTS- Easement or rental agreement payments received by an owner under this subchapter shall be in addition to, and not affect, the total amount of payments that the owner is otherwise eligible to receive under other Federal laws (except for funds provided to achieve similar purposes).

    ‘(g) REGULATIONS- Not later than 180 days after the date of enactment of this subchapter, the Secretary shall promulgate such regulations as are necessary to carry out this subchapter.

‘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 grassland and shrubland protection;

      ‘(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.’.

    (b) FUNDING- Section 1241 of the Food Security Act of 1985 (16 U.S.C. 3841) (as amended by section 218(b)) is amended by adding at the end the following:

    ‘(e) GRASSLAND RESERVE PROGRAM- The Secretary shall use such sums of the Commodity Credit Corporation as are necessary to carry out subchapter C of chapter 2 (including the provision of technical assistance).’.

SEC. 220. STATE TECHNICAL COMMITTEES.

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

‘Subtitle G--State Technical Committees

‘SEC. 1261. ESTABLISHMENT.

    ‘(a) IN GENERAL- The Secretary shall establish in each State a technical committee to assist the Secretary in the technical considerations relating to implementation of any private land conservation program administered by the Secretary.

    ‘(b) STANDARDS- Not later than 180 days after the date of enactment of the Agriculture, Conservation, and Rural Enhancement Act of 2002, the Secretary shall develop standards to be used by each State technical committee in the development of technical guidelines under section 1262(b) for the implementation of the conservation programs under this title.

    ‘(c) COMPOSITION- Each State technical committee established under subsection (a) shall be composed of professional resource managers that represent a variety of disciplines in the soil, water, wetland, forest, and wildlife sciences, including representatives from among--

      ‘(1) the Natural Resources Conservation Service (a representative of which shall serve as Chair of the Committee);

      ‘(2) the Farm Service Agency;

      ‘(3) the Forest Service;

      ‘(4) the Extension Service;

      ‘(5) the Fish and Wildlife Service;

      ‘(6) such State departments and agencies as the Secretary determines to be appropriate, including--

        ‘(A) a State fish and wildlife agency;

        ‘(B) a State forester or equivalent State official;

        ‘(C) a State water resources agency;

        ‘(D) a State department of agriculture;

        ‘(E) a State soil conservation agency;

        ‘(F) a State association of soil and water conservation districts; and

        ‘(G) land grant colleges and universities;

      ‘(7) other individuals or agency personnel with expertise in soil, water, wetland, and wildlife or forest management as the Secretary determines to be appropriate;

      ‘(8) agricultural producers with demonstrable conservation expertise;

      ‘(9) nonprofit organizations with demonstrable conservation or forestry expertise;

      ‘(10) persons knowledgeable about conservation or forestry techniques; and

      ‘(11) agribusinesses.

‘SEC. 1262. RESPONSIBILITIES.

    ‘(a) INFORMATION-

      ‘(1) PROVISION-

        ‘(A) IN GENERAL- Each State technical committee established under section 1261 shall meet regularly to provide information, analyses, and recommendations to the Secretary.

        ‘(B) MANNER; FORM- Information, analyses, and recommendations described in subparagraph (A) shall--

          ‘(i) be provided in writing, in a manner that assists the Secretary in determining matters of fact, technical merit, or scientific question; and

          ‘(ii) reflect the best professional information and judgment of the committee.

      ‘(2) COORDINATION- The Secretary shall coordinate activities conducted under this section with activities conducted under section 1628 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5831).

      ‘(3) PUBLIC PARTICIPATION- Each State technical committee shall--

        ‘(A) provide public notice of, and permit public attendance at, meetings considering issues of concern related to any program under this title; and

        ‘(B) distribute meeting minutes to each person attending a meeting described in subparagraph (A).

      ‘(4) COMMUNICATION- Each State conservationist shall communicate regularly with members of the State technical committee concerning status of action on recommendations of the committee.

    ‘(b) OTHER DUTIES- Each State technical committee shall provide assistance and offer recommendations with respect to the technical aspects of--

      ‘(1) wetland protection, restoration, and mitigation requirements;

      ‘(2) criteria to be used in evaluating bids for enrollment of environmentally-sensitive land in the conservation reserve program established under subchapter B of chapter 1;

      ‘(3) guidelines for haying or grazing and the control of weeds to protect nesting wildlife on designated acreage relating to--

        ‘(A) highly erodible land conservation under subtitle B;

        ‘(B) wetland conservation under subtitle C; or

        ‘(C) other conservation requirements

      ‘(4) addressing common weed and pest problems and programs to control weeds and pests found on acreage enrolled in the conservation reserve program;

      ‘(5) guidelines for planting perennial cover for water quality and wildlife habitat improvement on designated land;

      ‘(6) establishing criteria and priorities for State initiatives under the environmental quality incentives program under chapter 4 of subtitle D;

      ‘(7) establishing State and local conservation priorities under the conservation security program under subchapter A of chapter 2 of subtitle D;

      ‘(8) establishing and maintaining natural resource indicators and conservation program monitoring and evaluation systems;

      ‘(9) developing conservation program education and outreach activities;

      ‘(10) evaluating innovative practices and systems under consideration for inclusion in the field office technical guides; and

      ‘(11) other matters, as determined to be appropriate by the Secretary.

    ‘(c) AUTHORITY-

      ‘(1) IN GENERAL- Each State technical committee established under section 1261 shall--

        ‘(A) serve in an advisory capacity; and

        ‘(B) have no implementation or enforcement authority.

      ‘(2) CONSIDERATION BY SECRETARY- In carrying out any program under this title, the Secretary shall give strong consideration to the recommendations of a State technical committee (including factual, technical, or scientific findings and recommendations relating to areas in which the State technical committee bears responsibility).

    ‘(d) FACA REQUIREMENTS- A State technical committee established under section 1261 shall be exempt from the Federal Advisory Committee Act (5 U.S.C. App.).

    ‘(e) ADVISORY SUBCOMMITTEES-

      ‘(1) IN GENERAL- Any State or local work group, task force, or other advisory body authorized by any Federal law (including a regulation) to advise the Secretary on issues that are within the areas of responsibility of a State technical committee established under section 1261 shall be considered to be a subcommittee of the State technical committee.

      ‘(2) COMPOSITION- A person eligible to serve on a State technical committee under section 1261(c) shall also be eligible to serve on 1 or more subcommittees of a State technical committee.

      ‘(3) LOCAL WORKING GROUPS- A local working group shall be considered to be a subcommittee of a State technical committee established under section 1261.’.

SEC. 221. 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 Department;’; and

      (2) in subsection (d), by adding at the end the following:

      ‘(3) USE OF SYMBOLS, SLOGANS, AND LOGOS-

        ‘(A) IN GENERAL- The Secretary may authorize the Foundation to use, license, or transfer symbols, slogans, and logos of the Department.

        ‘(B) INCOME-

          ‘(i) IN GENERAL- All revenue received by the Foundation from the use, licensing, or transfer of symbols, slogans, and logos of the Department 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.’.

Subtitle C--Organic Farming

SEC. 231. ORGANIC AGRICULTURE RESEARCH TRUST FUND.

    (a) ESTABLISHMENT- There is established in the Treasury of the United States a fund to be known as the ‘Organic Agriculture Research Trust Fund’ (referred to in this section as the ‘Fund’), consisting of--

      (1) such amounts as are transferred to the Fund under subsection (b); and

      (2) any interest earned on investment of amounts in the Fund under subsection (d).

    (b) TRANSFER TO FUND- During fiscal year 2003, the Commodity Credit Corporation shall transfer $45,000,000 to the Fund, which shall remain available until expended.

    (c) EXPENDITURES FROM FUND- On request by the Secretary of Agriculture, the Secretary of the Treasury shall transfer from the Fund to the Secretary of Agriculture such amounts as the Secretary of Agriculture determines are necessary--

      (1) to carry out section 1672B of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5925b); and

      (2) for the board of trustees of the National Organic Research Endowment Institute established under section 232(a) (referred to in this subtitle as the ‘Institute’) to implement a program of organic products research designed by the Institute and approved by the Secretary.

    (d) INVESTMENT OF AMOUNTS-

      (1) IN GENERAL-

        (A) INVESTMENT- The Secretary of the Treasury shall invest such portion of the Fund as is not, in the judgment of the Secretary of the Treasury, required to meet current withdrawals.

        (B) TYPES OF INVESTMENTS- Investments may be made only in--

          (i) an obligation of the United States or an agency of the United States;

          (ii) a general obligation of a State or a political subdivision of a State;

          (iii) an interest-bearing account or certificate of deposit of a bank that is a member of the Federal Reserve System; or

          (iv) an obligation fully guaranteed as to principal and interest by the United States.

      (2) ACQUISITION OF OBLIGATIONS- For the purpose of investments under paragraph (1), obligations may be acquired--

        (A) on original issue at the issue price; or

        (B) by purchase of outstanding obligations at the market price.

      (3) SALE OF OBLIGATIONS- Any obligation acquired by the Fund may be sold by the Secretary of the Treasury at the market price.

      (4) CREDITS TO FUND- The interest and dividends on, and the proceeds from the sale or redemption of, any obligations, interest-bearing accounts, or certificates of deposit held in the Fund shall be credited to and form a part of the Fund.

SEC. 232. ESTABLISHMENT OF NATIONAL ORGANIC RESEARCH ENDOWMENT INSTITUTE.

    (a) IN GENERAL- The Secretary of Agriculture, in consultation with the National Organic Standards Board, shall establish in the Department of Agriculture an institute to be known as the ‘National Organic Research Endowment Institute’ (referred to in this section as the ‘Institute’).

    (b) BOARD OF TRUSTEES-

      (1) IN GENERAL- The Institute shall be headed by a board of trustees composed of producers and handlers of organically grown and processed agricultural commodities appointed by the Secretary.

      (2) GEOGRAPHIC REPRESENTATION- The membership of the Board of Trustees shall reflect equally each of the various regions in the United States in which organically grown and processed agricultural commodities are produced.

    (c) DUTIES- The duties of the Institute shall be to aid the organically grown and processed agricultural commodities industry through the development and implementation of a plan for organic products research described in subsection (d)(1).

    (d) IMPLEMENTATION OF PLAN-

      (1) IN GENERAL- The board of trustees of the Institute shall implement a plan for organic products research, to be carried out using funds made available to the board of trustees of the Institute from the Organic Agriculture Research Trust Fund established by section 231.

      (2) EXPANSION OF MARKETS- In implementing the plan described in paragraph (1), the board of trustees of the Institute shall provide a permanent system for funding research activities (as defined in section 1672B of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5925b).

    (e) COMPENSATION OF MEMBERS- A member of the board of trustees of the Institute shall serve without compensation.

    (f) TRAVEL EXPENSES- To the extent recommended by the board of trustees of the Institute and approved by the Secretary of Agriculture, a member of the board 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 Institute.

Subtitle D--Regional Equity

SEC. 241. ALLOCATION OF CONSERVATION FUNDS BY STATE.

    (a) STATE ALLOCATION-

      (1) IN GENERAL- To the maximum extent practicable, in each of fiscal years 2002 through 2006, the Secretary of Agriculture (referred to in this section as the ‘Secretary’), subject to requirements of the conservation programs administered by the Secretary, shall ensure that each State receives, at a minimum, the share of the funds made available under this title (and amendments made by this title) that equals, at a minimum, $12,000,000 for each State, for use in accordance with paragraph (2), for purposes consistent with this title.

      (2) USE OF FUNDS- Of the minimum amount made available to each State under paragraph (1)--

        (A) $5,000,000 shall be used in accordance with the environmental quality incentives program under chapter 4 of subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3839aa et seq.); and

        (B) $7,000,000 shall be used in accordance with other conservation programs administered by the Secretary.

      (3) UNUSED FUNDING- Any funds made available for a fiscal year under paragraph (1) that are not obligated by April 1 of the fiscal year may be used to carry out other activities under subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3801 et seq.).

Subtitle E--Miscellaneous

SEC. 261. CRANBERRY ACREAGE RESERVE PROGRAM.

    (a) DEFINITIONS- In this section:

      (1) ELIGIBLE AREA- The term ‘eligible area’ means a wetland or buffer strip adjacent to a wetland that, as determined by the Secretary--

        (A)(i) is used, and has a history of being used, for the cultivation of cranberries; or

        (ii) is an integral component of a cranberry-growing operation;

        (B) is located in an environmentally sensitive area.

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

    (b) PROGRAM- The Secretary shall establish a program to purchase permanent easements in eligible areas from willing sellers.

    (c) PURCHASE PRICE- The Secretary shall ensure, to the maximum extent practicable, that each easement purchased under this section is for an amount that appropriately reflects the range of values for agricultural and nonagricultural land in the region in which the eligible area subject to the easement is located (including whether that land is located in 1 or more environmentally sensitive areas, as determined by the Secretary).

    (d) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this section $10,000,000.

SEC. 262. KLAMATH BASIN.

    (a) DEFINITIONS- In this section:

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

      (2) TASK FORCE- The term ‘Task Force’ means the Klamath Basin Interagency Task Force established under subsection (b).

    (b) INTERAGENCY TASK FORCE-

      (1) ESTABLISHMENT-

        (A) IN GENERAL- The Secretary of Agriculture, in conjunction with the Secretary of the Interior, shall establish the Klamath Basin Interagency Task Force.

        (B) APPROVAL OF MEMBER- A decision of the Task Force that affects any area under the jurisdiction of a member of the Task Force described in paragraph (2) shall not be implemented without the consent of the member.

      (2) MEMBERSHIP- The Task Force shall include representatives of--

        (A) the Department of Agriculture, including--

          (i) the Natural Resources Conservation Service; and

          (ii) the Farm Service Agency;

        (B) the Department of the Interior, including--

          (i) the United States Fish and Wildlife Service;

          (ii) the Bureau of Reclamation; and

          (iii) the Bureau of Indian Affairs;

        (C) the Department of Commerce, including the National Marine Fisheries Service;

        (D) the Council on Environmental Quality;

        (E) the Federal Energy Regulatory Commission;

        (F) the Environmental Protection Agency; and

        (G) the United States Geological Survey.

      (3) DUTIES- The Task Force shall use conservation programs of the Department of Agriculture and other Federal programs in the Klamath Basin in Oregon and California for the purposes of--

        (A) promoting agricultural production and environmental quality as compatible Klamath Basin goals;

        (B) water conservation and improved agricultural practices;

        (C) aquatic ecosystem restoration;

        (D) improvement of water quality and quantity;

        (E) recovery and enhancement of endangered species, including anadromous fish species and resident fish species; and

        (F) restoration of the national wildlife refuges.

      (4) COOPERATIVE AGREEMENT- The Secretary of Agriculture, Secretary of the Interior, and Secretary of Commerce shall enter into a cooperative agreement to--

        (A) provide funding to the Task Force; and

        (B) use conservation programs administered by the Secretary of Agriculture and other Federal programs administered by the Secretary of the Interior and Secretary of Commerce in carrying out the purposes described in paragraph (3).

      (5) GRANT PROGRAM-

        (A) IN GENERAL- The Task Force shall establish a grant program (including appropriate cost-sharing, monitoring, and enforcement requirements) under which the Secretary of Agriculture, the Secretary of the Interior, or the Secretary of Commerce may enter into 1 or more agreements or contracts with non-Federal entities, Indian tribes (as defined in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b)), environmental organizations, and water districts in the Klamath Basin to carry out the purposes described in paragraph (3).

        (B) CONTRACT TERMS- An agreement or contract under subparagraph (A) shall--

          (i) specify the responsibilities of the entity and the Secretary under the agreement or contract;

          (ii) provide for such cost-sharing as the Secretary considers appropriate; and

          (iii) include mechanisms for monitoring and enforcement requirements.

    (c) REPORT AND PLAN-

      (1) DEVELOPMENT-

        (A) REPORT- Not later than 180 days after the date of enactment of this Act, the Task Force, after soliciting input from the States of California and Oregon, local public agencies, Indian tribes, Klamath Project districts, environmental organizations, and the stakeholder community, shall issue a report that--

          (i) considers the impacts of the biological assessment, the biological opinion, activities of the Upper Klamath Basin Working Group, activities of the Pacific Fisheries Restoration Task Force, State water adjudications, and the resolution of tribal rights, that may affect actions of the Task Force; and

          (ii) includes a description of Federal spending in the Klamath Basin for fiscal years 2000, 2001, and 2002.

        (B) DRAFT PLAN- Not later than 60 days after completion of the report under subparagraph (A), the Task Force shall develop, and provide public notice of and an opportunity for comment on, a draft 5-year plan to perform the duties of the Task Force under subsection (b)(3).

        (C) FINAL PLAN- Not later than 1 year after the date of enactment of this Act, the Task Force shall finalize the plan described in subparagraph (B).

      (2) MATTERS TO BE CONSIDERED- In developing the plan under paragraph (1), the Task Force shall consider--

        (A) the use of water conservation easements by voluntary participants;

        (B) purchase of agricultural land from willing sellers, with priority given to land that will enhance natural water storage capabilities;

        (C) benefits to the agricultural economy through incentives for the use of irrigation efficiency, water conservation, or other agricultural practices;

        (D) wetland restoration;

        (E) feasibility studies for alternative water storage, water conservation, demand reduction, and restoration of endangered species;

        (F) improvement of upper Klamath Basin watershed and water quality;

        (G) improvement of habitat in the Tule Lake National Wildlife Refuge, the Lower Klamath National Wildlife Refuge, and the Upper Klamath Lake National Wildlife Refuge; and

        (H) fish screening and water metering.

    (d) COOPERATION WITH NON-FEDERAL ENTITIES- In carrying out the duties of the Task Force under this section, the Task Force shall--

      (1) consult with--

        (A) environmental, fishing, and agricultural interests; and

        (B) on a government-to-government basis, the Klamath, Hoopa, Yurok, and Karuk Tribes;

      (2) provide appropriate opportunities for public participation; and

      (3) hold meetings at least once every 3 months in the Klamath Basin with opportunities for stakeholder participation.

    (e) FUNDING-

      (1) IN GENERAL- To carry out the purposes described in subsection (b)(3), the Secretary shall use $175,000,000 of the funds of the Commodity Credit Corporation for the period of fiscal years 2003 through 2006, of which--

        (A) $15,000,000 shall be made available to the Klamath, Hoopa, Yurok, and Karuk Tribes for use in the State of California; and

        (B) $15,000,000 shall be made available to those Tribes for use in the State of Oregon.

      (2) FUNDS MADE AVAILABLE TO THE TRIBES-

        (A) IN GENERAL- The funds made available to the Tribes under paragraph (1) shall be for projects for specific habitat improvement related to the recovery of threatened and endangered species to be carried out by the appropriate tribal natural resources department, consistent with the purposes of this section.

        (B) REPORTS- The Tribes shall provide a biennial report to the Task Force on expenditures of funds during the period covered by the report.

      (3) OTHER FUNDS- The funds made available under paragraph (1) shall be in addition to funds available to the States of California and Oregon under other provisions of this Act (including amendments made by this Act).

      (4) UNUSED FUNDING- Any funds made available for a fiscal year under paragraph (1) that are not obligated by April 1, 2006, may be used to carry out other activities under subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3801 et seq.).

      (5) EXPIRATION OF AUTHORITY TO OBLIGATE FUNDS- The Secretary may not obligate funds made available under this subsection after September 30, 2006.

    (f) SAVINGS PROVISION- Nothing in this section regarding the Klamath Basin affects any right or obligation of any party under any treaty or any other provision of Federal or State law.

    (g) COOPERATIVE AGREEMENTS- Notwithstanding the Federal Grant and Cooperative Agreement Act of 1977 (41 U.S.C. 501 et seq.), the Secretary may enter into cooperative agreements under this section.

TITLE III--TRADE

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

SEC. 301. UNITED STATES POLICY.

    Section 2(2) of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1691(2)) is amended by inserting before the semicolon at the end the following: ‘and conflict prevention’.

SEC. 302. 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 to assist development in 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) CERTIFIED INSTITUTIONAL PARTNERS-

      ‘(1) IN GENERAL- The Administrator or the Secretary, as applicable, shall promulgate regulations and issue guidelines to permit private voluntary organizations and cooperatives to be certified as institutional partners.

      ‘(2) REQUIREMENTS- To become a certified institutional partner, a private voluntary organization or cooperative shall submit to the Administrator evidence of organizational capacity that describes--

        ‘(A) the financial, programmatic, commodity management, and auditing abilities and practices of the organization or cooperative; and

        ‘(B) the capacity of the organization or cooperative to carry out projects in particular countries.

      ‘(3) MULTI-COUNTRY PROPOSALS- A certified institutional partner shall be eligible to--

        ‘(A) submit a single proposal for 1 or more countries in which the certified institutional partner has already demonstrated organizational capacity; and

        ‘(B) receive expedited review of the proposal.’.

SEC. 303. 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. 304. LEVELS OF ASSISTANCE.

    Section 204 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1724) is amended--

      (1) in subsection (a)--

        (A) in paragraph (1), by striking ‘that for each of fiscal years 1996 through 2002 is not less than 2,025,000 metric tons.’ and inserting ‘that is not less than--

        ‘(A) 2,100,000 metric tons for fiscal year 2002;

        ‘(B) 2,200,000 metric tons for fiscal year 2003;

        ‘(C) 2,300,000 metric tons for fiscal year 2004;

        ‘(D) 2,400,000 metric tons for fiscal year 2005; and

        ‘(E) 2,500,000 metric tons for fiscal year 2006.’; and

        (B) in paragraph (2), by striking ‘1996 through 2002’ and inserting ‘2002 through 2006’; and

      (2) in subsection (b)(1), by inserting ‘(including crude degummed soybean oil)’ after ‘bagged commodities’.

SEC. 305. 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 ‘2006’.

SEC. 306. MAXIMUM LEVEL OF EXPENDITURES.

    Section 206(a) of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1726(a)) is amended by striking ‘$1,000,000,000’ and inserting ‘$2,000,000,000’.

SEC. 307. 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 submission to 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 policy determination’; and

      (3) by adding at the end the following:

    ‘(e) TIMELY APPROVAL-

      ‘(1) IN GENERAL- The Administrator shall 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.

    ‘(f) DIRECT DELIVERY- In addition to practices in effect on the date of enactment of this subsection, the Secretary may approve an agreement that provides for direct delivery of agricultural commodities to milling or processing facilities more than 50 percent of the interest in which is owned by United States citizens in foreign countries, with the proceeds of transactions transferred in cash to eligible organizations described in section 202(d) to carry out approved projects.’.

SEC. 308. 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 2006’.

SEC. 309. PILOT EMERGENCY RELIEF PROGRAM TO PROVIDE LIVE LAMB TO AFGHANISTAN.

    Title II of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1721 et seq.) is amended by adding at the end the following:

‘SEC. 209. PILOT EMERGENCY RELIEF PROGRAM TO PROVIDE LIVE LAMB TO AFGHANISTAN.

    ‘(a) IN GENERAL- The President may establish a pilot emergency relief program under this title to provide live lamb to Afghanistan on behalf of the people of the United States.

    ‘(b) REPORT- Not later than January 1, 2004, the Secretary shall submit to Congress a report that--

      ‘(1)(A) evaluates the success of the program under subsection (a); or

      ‘(B) if the program has not succeeded or has not been implemented, explains in detail why the program has not succeeded or has not been implemented; and

      ‘(2) discusses the feasibility and desirability of providing assistance in the form of live animals.’.

SEC. 310. SALE PROCEDURE.

    Section 403 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1733) is amended--

      (1) in subsection (b)--

        (A) by striking ‘The Secretary’ and inserting the following:

      ‘(1) IN GENERAL- In carrying out this Act, the Secretary’; and

        (B) by adding at the end the following:

      ‘(2) CURRENCIES- Sales of commodities described in paragraph (1) may be in United States dollars or in a different currency.’;

      (2) 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 commodities described in paragraph (1) shall be made at a reasonable market price in the economy where the commodity is to be sold, as determined by the Secretary or the Administrator, as appropriate.’; and

      (3) by adding at the end the following:

    ‘(l) SALE PROCEDURE- Subsections (b)(2) and (e)(2) shall apply to sales of commodities in recipient countries to generate proceeds to carry out projects under--

      ‘(1) section 416(b) of the Agricultural Act of 1949 (7 U.S.C. 1431(b)); and

      ‘(2) title VIII of the Agricultural Trade Act of 1978.’.

SEC. 311. 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 2006’.

SEC. 312. 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 ‘2006’.

SEC. 313. MICRONUTRIENT FORTIFICATION PROGRAM.

    Section 415 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1736g-2) is amended--

      (1) in subsection (a)--

        (A) in the first sentence, by striking ‘a micronutrient fortification pilot program’ and inserting ‘micronutrient fortification programs’; and

        (B) in the second sentence--

          (i) by striking ‘the program’ and inserting ‘a program’;

          (ii) in paragraph (1), by striking ‘and’ at the end;

          (iii) in paragraph (2)--

            (I) by striking ‘whole’; and

            (II) by striking the period at the end and inserting ‘; and’; and

          (iv) by adding at the end the following:

      ‘(3) encourage technologies and systems for the improved quality and safety of fortified grains and other commodities that are readily transferable to developing countries.’;

      (2) 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’; and

        (C) by striking ‘including’ and inserting ‘such as’; and

      (3) in subsection (d), by striking ‘2002’ and inserting ‘2006’.

SEC. 314. JOHN OGONOWSKI FARMER-TO-FARMER PROGRAM.

    Section 501(c) of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1737(c)) is amended--

      (1) by striking ‘0.4’ and inserting ‘0.5,’; and

      (2) by striking ‘2002’ and inserting ‘2006’.

Subtitle B--Agricultural Trade Act of 1978

SEC. 321. EXPORT CREDIT GUARANTEE PROGRAM.

    (a) TERM OF SUPPLIER CREDIT PROGRAM- Section 202(a)(2) of the Agricultural Trade Act of 1978 (7 U.S.C. 5622(a)(2)) is amended by striking ‘180 days’ and inserting ‘12 months’.

    (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 2006’.

    (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) REPORT ON AGRICULTURAL EXPORT CREDIT PROGRAMS-

      ‘(1) IN GENERAL- Not later than 1 year after the date of enactment of this subsection, and annually thereafter, the Secretary 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 status of multilateral negotiations regarding agricultural export credit programs at the World Trade Organization and the Organization of Economic Cooperation and Development in fulfillment of Article 10.2 of the Agreement on Agriculture (as described in section 101(d)(2) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(2))).

      ‘(2) CLASSIFIED INFORMATION- The report under paragraph (1) shall be submitted in unclassified form, but may contain a classified annex.’.

    (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 ‘2006’.

SEC. 322. MARKET ACCESS PROGRAM.

    (a) IN GENERAL- 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 $100,000,000 for fiscal year 2002, $120,000,000 for fiscal year 2003, $140,000,000 for fiscal year 2004, $180,000,000 for fiscal year 2005, and $200,000,000 for fiscal year 2006, of the funds of, or an equal value of commodities owned by, the Commodity Credit Corporation, except that this paragraph shall not apply to section 203(h); and’; and

      (4) by adding at the end the following:

      ‘(2) PROGRAM PRIORITIES- Of funds made available under paragraph (1)(A) in excess of $90,000,000 for any fiscal year, priority shall be given to proposals--

        ‘(A) made by eligible trade organizations that have never participated in the market access program under this title; or

        ‘(B) for market access programs in emerging markets.’.

    (b) UNITED STATES QUALITY EXPORT INITIATIVE-

      (1) FINDINGS- Congress finds that--

        (A) the market access program established under section 203 of the Agricultural Trade Act of 1978 (7 U.S.C. 5623) and foreign market development cooperator program established under title VII of that Act (7 U.S.C. 5721 et seq.) target generic and value-added agricultural products, with little emphasis on the high quality of United States agricultural products; and

        (B) new promotional tools are needed to enable United States agricultural products to compete in higher margin, international markets on the basis of quality.

      (2) INITIATIVE- Section 203 of the Agricultural Trade Act of 1978 (7 U.S.C. 5623) is amended by adding at the end the following:

    ‘(h) UNITED STATES QUALITY EXPORT INITIATIVE-

      ‘(1) IN GENERAL- Subject to the availability of appropriations, using the authorities under this section, the Secretary shall establish a program under which, on a competitive basis, using practical and objective criteria, several agricultural products are selected to carry the ‘U.S. Quality’ seal.

      ‘(2) PROMOTIONAL ACTIVITIES- Agricultural products selected under paragraph (1) shall be promoted using the ‘U.S. Quality’ seal at trade fairs in key markets through electronic and print media.

      ‘(3) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated such sums as are necessary to carry out this subsection.’.

SEC. 323. 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 2006’.

    (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;

      (2) in clause (ii), by striking the period at the end and inserting ‘, including, in the case of a state trading enterprise engaged in the export of an agricultural commodity, pricing practices that are not consistent with sound commercial practices conducted in the ordinary course of trade; or’; and

      (3) by adding at the end the following:

          ‘(iii) changes United States export terms of trade through a deliberate change in the dollar exchange rate of a competing exporter.’.

SEC. 324. FOREIGN MARKET DEVELOPMENT COOPERATOR PROGRAM.

    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 following amounts:

      ‘(1) For fiscal year 2002, $37,500,000.

      ‘(2) For fiscal year 2003, $40,000,000.

      ‘(3) For fiscal year 2004 and each subsequent fiscal year, $42,500,000.

    ‘(b) PROGRAM PRIORITIES- Of funds or commodities provided under subsection (a) in excess of $35,000,000 for any fiscal year, priority shall be given to proposals--

      ‘(1) made by eligible trade organizations that have never participated in the program established under this title; or

      ‘(2) for programs established under this title in emerging markets.’.

SEC. 325. FOOD FOR PROGRESS AND EDUCATION PROGRAMS.

    (a) IN GENERAL- The Agricultural Trade Act of 1978 (7 U.S.C. 5601 et seq.) is amended by adding at the end the following:

‘TITLE VIII--FOOD FOR PROGRESS AND EDUCATION PROGRAMS

‘SEC. 801. DEFINITIONS.

    ‘In this title:

      ‘(1) COOPERATIVE- The term ‘cooperative’ means a private sector organization the members of which--

        ‘(A) own and control the organization;

        ‘(B) share in the profits of the organization; and

        ‘(C) are provided services (such as business services and outreach in cooperative development) by the organization.

      ‘(2) CORPORATION- The term ‘Corporation’ means the Commodity Credit Corporation.

      ‘(3) DEVELOPING COUNTRY- The term ‘developing country’ means a foreign country that has--

        ‘(A) a shortage of foreign exchange earnings; and

        ‘(B) difficulty meeting all of the food needs of the country through commercial channels and domestic production.

      ‘(4) ELIGIBLE COMMODITY- The term ‘eligible commodity’ means an agricultural commodity (including vitamins and minerals) acquired by the Secretary or the Corporation for disposition in a program authorized under this title through--

        ‘(A) commercial purchases; or

        ‘(B) inventories of the Corporation.

      ‘(5) ELIGIBLE ORGANIZATION- The term ‘eligible organization’ means a private voluntary organization, cooperative, nongovernmental organization, or foreign country, as determined by the Secretary.

      ‘(6) EMERGING AGRICULTURAL COUNTRY- The term ‘emerging agricultural country’ means a foreign country that--

        ‘(A) is an emerging democracy; and

        ‘(B) has made a commitment to introduce or expand free enterprise elements in the agricultural economy of the country.

      ‘(7) 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.

      ‘(8) NONGOVERNMENTAL ORGANIZATION-

        ‘(A) IN GENERAL- The term ‘nongovernmental organization’ means an organization that operates on a local level to solve development problems in a foreign country in which the organization is located.

        ‘(B) EXCLUSION- The term ‘nongovernmental organization’ does not include an organization that is primarily an agency or instrumentality of the government of a foreign country.

      ‘(9) PRIVATE VOLUNTARY ORGANIZATION- The term ‘private voluntary organization’ means a nonprofit, nongovernmental organization that--

        ‘(A) receives--

          ‘(i) funds from private sources; and

          ‘(ii) voluntary contributions of funds, staff time, or in-kind support from the public;

        ‘(B) is engaged in or is planning to engage in nonreligious voluntary, charitable, or development assistance activities; and

        ‘(C) in the case of an organization that is organized under the laws of the United States or a State, 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.

      ‘(10) PROGRAM- The term ‘program’ means a food or nutrition assistance or development initiative proposed by an eligible organization and approved by the Secretary under this title.

      ‘(11) RECIPIENT COUNTRY- The term ‘recipient country’ means an emerging agricultural country that receives assistance under a program.

‘SEC. 802. FOOD FOR PROGRESS AND EDUCATION PROGRAMS.

    ‘(a) IN GENERAL- There are established the Food for Progress Program and the International Food for Education and Nutrition Program through which eligible commodities are made available to eligible organizations to carry out programs of assistance in developing countries.

    ‘(b) FOOD FOR PROGRESS PROGRAM-

      ‘(1) IN GENERAL- To provide agricultural commodities to support the introduction or expansion of free trade enterprises in national economies and to promote food security in recipient countries, the Secretary shall establish the Food for Progress Program, under which the Secretary may enter into agreements (including multiyear agreements and agreements for programs in more than 1 country) with entities described in paragraph (2).

      ‘(2) ENTITIES- The Secretary may enter into agreements under paragraph (1) with--

        ‘(A) the governments of emerging agricultural countries;

        ‘(B) private voluntary organizations;

        ‘(C) nonprofit agricultural organizations and cooperatives;

        ‘(D) nongovernmental organizations; and

        ‘(E) other private entities.

      ‘(3) CONSIDERATIONS- In determining whether to enter into an agreement to establish a program under paragraph (1), the Secretary shall take into consideration whether an emerging agricultural country is committed to carrying out, or is carrying out, policies that promote--

        ‘(A) economic freedom;

        ‘(B) private production of food commodities for domestic consumption; and

        ‘(C) the creation and expansion of efficient domestic markets for the purchase and sale of those commodities.

    ‘(c) INTERNATIONAL FOOD FOR EDUCATION AND NUTRITION PROGRAM-

      ‘(1) IN GENERAL- In cooperation with other countries, the Secretary shall establish an initiative under this title to be known as the ‘International Food for Education and Nutrition Program’, through which the Secretary may provide to eligible organizations agricultural commodities and technical and nutritional assistance in connection with education programs to improve food security and enhance educational opportunities for preschool age and primary school age children in recipient countries.

      ‘(2) AGREEMENTS- In carrying out this subsection, the Secretary--

        ‘(A) shall administer the programs under this subsection in manner that is consistent with this title; and

        ‘(B) may enter into agreements with eligible organizations--

          ‘(i) to purchase, acquire, and donate eligible commodities to eligible organizations to carry out agreements in recipient countries; and

          ‘(ii) to provide technical and nutritional assistance to carry out agreements in recipient countries.

      ‘(3) OTHER DONOR COUNTRIES- The Secretary shall encourage other donor countries, directly or through eligible organizations--

        ‘(A) to donate goods and funds to recipient countries; and

        ‘(B) to provide technical and nutritional assistance to recipient countries.

      ‘(4) PRIVATE SECTOR- The President and the Secretary are urged to encourage the support and active involvement of the private sector, foundations, and other individuals and organizations in programs and activities assisted under this subsection.

      ‘(5) GRADUATION- An agreement with an eligible organization under this subsection shall include provisions--

        ‘(A)(i) to 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 the program under this subsection terminates; and

        ‘(ii) to estimate the period of time required until the recipient country or eligible organization is able to provide sufficient assistance without additional assistance under this subsection; or

        ‘(B) to provide other long-term benefits to targeted populations of the recipient country.

      ‘(6) ELIGIBLE COSTS- Subject to paragraphs (2) and (7), the Secretary shall pay all or part of--

        ‘(A) the costs and charges described in paragraphs (1) through (5) and (7) of section 406(b) of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1736(b)) with respect to an eligible commodity;

        ‘(B) the internal transportation, storage, and handling costs incurred in moving the eligible commodity, if the Secretary 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 World Declaration on Education for All convened in 1990 in Jomtien, Thailand, and the followup Dakar Framework for Action of the World Education Forum in 2000; and

        ‘(C) the projected costs of an eligible organization for administration, sales, monitoring, and technical assistance under an agreement under paragraph (2) (including an itemized budget), taking into consideration, as determined by the Secretary--

          ‘(i) the projected amount of such costs itemized by category; and

          ‘(ii) the projected amount of assistance to be received from other donors.

      ‘(7) FUNDING-

        ‘(A) COMMODITY CREDIT CORPORATION-

          ‘(i) IN GENERAL- Subject to clause (ii), the Secretary may use the funds, facilities, and authorities of the Corporation to carry out this subsection.

          ‘(ii) LIMITATION- Not more than $150,000,000 for each of fiscal years 2002 through 2005 shall be used to carry out this subsection.

        ‘(B) USE LIMITATIONS- Of the funds made available under subparagraph (A), the Secretary may use to carry out paragraph (6)(C) not more than $20,000,000 for each of fiscal years 2002 through 2005.

        ‘(C) REALLOCATION- Funds not allocated under this subsection by April 30 of a fiscal year shall be made available for proposals submitted under the Food for Progress Program under subsection (b).

      ‘(8) ANNUAL 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 an annual report that describes--

        ‘(A) the results of the implementation of this subsection during the year covered by the report, including the impact on the enrollment, attendance, and performance of children in preschools and primary schools targeted under the program under this subsection; and

        ‘(B) the level of commitments by, and the potential for obtaining additional goods and assistance from, other countries for subsequent years.

    ‘(d) TERMS-

      ‘(1) IN GENERAL- The Secretary may provide agricultural commodities under this title on--

        ‘(A) a grant basis; or

        ‘(B) subject to paragraph (2), credit terms.

      ‘(2) CREDIT TERMS- Payment for agricultural commodities made available under this title that are purchased on credit terms shall be made on the same basis as payments made under section 103 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1703).

      ‘(3) NO EFFECT ON DOMESTIC PROGRAMS- The Secretary shall not make an agricultural commodity available for disposition under this section in any amount that will reduce the amount of the commodity that is traditionally made available through donations to domestic feeding programs or agencies, as determined by the Secretary.

      ‘(4) MULTIYEAR AGREEMENTS- In carrying out this title, on request and subject to the availability of commodities, the Secretary is encouraged to approve agreements that provide for commodities to be made available for distribution on a multiyear basis, if the agreements otherwise meet the requirements of this title.

    ‘(e) REPORTS- Each eligible organization that enters into an agreement under this title shall submit to the Secretary, at such time as the Secretary may request, a report containing such information as the Secretary may request relating to the use of agricultural commodities and funds provided to the eligible organization under this title.

    ‘(f) COORDINATION- To ensure that the provision of commodities under this section is coordinated with and complements other foreign assistance provided by the United States, assistance under this section shall be coordinated through the mechanism designated by the President to coordinate assistance under the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1691 et seq.).

    ‘(g) QUALITY ASSURANCE-

      ‘(1) IN GENERAL- The Secretary shall ensure, to the maximum extent practicable, that each eligible organization participating in 1 or more programs under this section--

        ‘(A) uses eligible commodities made available under this title--

          ‘(i) in an effective manner;

          ‘(ii) in the areas of greatest need; and

          ‘(iii) in a manner that promotes the purposes of this title;

        ‘(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 title;

        ‘(D) monitors and reports on the distribution or sale of eligible commodities provided under this title using methods that, as determined by the Secretary, facilitate accurate and timely reporting;

        ‘(E) periodically evaluates the effectiveness of the program of the eligible organization, including, as applicable, an evaluation of whether the development or food and nutrition purposes of the program can be sustained in a recipient country if the assistance provided to the recipient country is reduced and eventually terminated; and

        ‘(F) considers means of improving the operation of the program of the eligible organization.

      ‘(2) CERTIFIED INSTITUTIONAL PARTNERS-

        ‘(A) IN GENERAL- The Secretary shall promulgate regulations and guidelines to permit private voluntary organizations and cooperatives to be certified as institutional partners.

        ‘(B) REQUIREMENTS- To become a certified institutional partner, a private voluntary organization or cooperative shall submit to the Secretary evidence of organizational capacity that describes--

          ‘(i) the financial, programmatic, commodity management, and auditing abilities and practices of the organization or cooperative; and

          ‘(ii) the capacity of the organization or cooperative to carry out projects in particular countries.

        ‘(C) MULTICOUNTRY PROPOSALS- A certified institutional partner shall be eligible to--

          ‘(i) submit a single proposal for 1 or more countries in which the certified institutional partner has already demonstrated organizational capacity; and

          ‘(ii) receive expedited review of the proposal.

    ‘(h) TRANSSHIPMENT AND RESALE-

      ‘(1) IN GENERAL- The transshipment or resale of an eligible commodity to a country other than a recipient country shall be prohibited unless the transshipment or resale is approved by the Secretary.

      ‘(2) MONETIZATION-

        ‘(A) IN GENERAL- Subject to subparagraphs (B) through (D), an eligible commodity provided under this section may be sold for foreign currency or United States dollars or bartered, with the approval of the Secretary.

        ‘(B) SALE OR BARTER OF FOOD ASSISTANCE- The sale or barter of eligible commodities under this title may be conducted only within (as determined by the Secretary)--

          ‘(i) a recipient country or country near the recipient country; or

          ‘(ii) another country, if--

            ‘(I) the sale or barter within the recipient country or nearby country is not practicable; and

            ‘(II) the sale or barter within countries other than the recipient country or nearby country will not disrupt commercial markets for the agricultural commodity involved.

        ‘(C) HUMANITARIAN OR DEVELOPMENT PURPOSES- The Secretary may authorize the use of proceeds or exchanges to pay the costs incurred by an eligible organization under this title for--

          ‘(i)(I) programs targeted at hunger and malnutrition; or

          ‘(II) development programs involving food security or education;

          ‘(ii) transportation, storage, and distribution of eligible commodities provided under this title; and

          ‘(iii) administration, sales, monitoring, and technical assistance.

        ‘(D) EXCEPTION- The Secretary shall not approve the use of proceeds described in subparagraph (C) to fund any administrative expenses of a foreign government.

        ‘(E) PRIVATE SECTOR ENHANCEMENT- As appropriate, the Secretary may provide eligible commodities under this title in a manner that uses commodity transactions as a means of developing in the recipient countries a competitive private sector that can provide for the importation, transportation, storage, marketing, and distribution of commodities.

    ‘(i) DISPLACEMENT OF COMMERCIAL SALES- In carrying out this title, the Secretary shall, to the maximum extent practicable consistent with the purposes of this title, avoid--

      ‘(1) displacing any commercial export sale of United States agricultural commodities that would otherwise be made;

      ‘(2) disrupting world prices of agricultural commodities; or

      ‘(3) disrupting normal patterns of commercial trade of agricultural commodities with foreign countries.

    ‘(j) DEADLINE FOR PROGRAM ANNOUNCEMENTS-

      ‘(1) IN GENERAL- Before the beginning of the applicable fiscal year, the Secretary shall, to the maximum extent practicable--

        ‘(A) make all determinations concerning program agreements and resource requests for programs under this title; and

        ‘(B) announce those determinations.

      ‘(2) REPORT- Not later than November 1 of the applicable fiscal 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 list of programs, countries, and commodities, and the total amount of funds for transportation and administrative costs, approved to date under this title.

    ‘(k) MILITARY DISTRIBUTION OF ASSISTANCE-

      ‘(1) IN GENERAL- The Secretary shall ensure, to the maximum extent practicable, that agricultural commodities made available under this title are provided without regard to--

        ‘(A) the political affiliation, geographic location, ethnic, tribal, or religious identity of the recipient; or

        ‘(B) any other extraneous factors, as determined by the Secretary.

      ‘(2) PROHIBITION ON HANDLING OF COMMODITIES BY THE MILITARY-

        ‘(A) IN GENERAL- Except as provided in subparagraph (B), the Secretary shall not enter into an agreement under this title to provide agricultural commodities if the agreement requires or permits the distribution, handling, or allocation of agricultural commodities by the military forces of any foreign government or insurgent group.

        ‘(B) EXCEPTION- The Secretary may authorize the distribution, handling, or allocation of commodities by the military forces of a country in exceptional circumstances in which--

          ‘(i) nonmilitary channels are not available for distribution, handling, or allocation;

          ‘(ii) the distribution, handling, or allocation is consistent with paragraph (1); and

          ‘(iii) the Secretary determines that the distribution, handling, or allocation is necessary to meet the emergency health, safety, or nutritional requirements of the population of a recipient country.

      ‘(3) ENCOURAGEMENT OF SAFE PASSAGE- In entering into an agreement under this title that involves 1 or more areas within a recipient country that is experiencing protracted warfare or civil unrest, the Secretary shall, to the maximum extent practicable, encourage all parties to the conflict to--

        ‘(A) permit safe passage of the commodities and other relief supplies; and

        ‘(B) establish safe zones for--

          ‘(i) medical and humanitarian treatment; and

          ‘(ii) evacuation of injured persons.

    ‘(l) LEVEL OF ASSISTANCE- The cost of commodities made available under this title, and the expenses incurred in connection with the provision of those commodities shall be in addition to the level of assistance provided under the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1691 et seq.).

    ‘(m) COMMODITY CREDIT CORPORATION-

      ‘(1) IN GENERAL- Subject to paragraphs (5) through (7), the Secretary may use the funds, facilities, and authorities of the Corporation to carry out this title.

      ‘(2) MINIMUM TONNAGE- Subject to paragraph (6)(B), not less than 400,000 metric tons of commodities may be provided under this title for the program established under subsection (b) for each of fiscal years 2002 through 2006.

      ‘(3) AUTHORIZATION OF APPROPRIATIONS- In addition to tonnage authorized under paragraph (2), there are authorized to be appropriated such sums as are necessary to carry out the program established under subsection (b).

      ‘(4) TITLE I FUNDS- In addition to tonnage and funds authorized under paragraphs (2), (3), and (6)(B), the Corporation may use funds appropriated to carry out title I of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1701 et seq.)) in carrying out the program established under subsection (b).

      ‘(5) LIMITATION ON PURCHASES OF COMMODITIES- The Corporation may purchase agricultural commodities for disposition under this title only if Corporation inventories are insufficient to satisfy commitments made in agreements entered into under this title.

      ‘(6) ELIGIBLE COSTS AND EXPENSES-

        ‘(A) IN GENERAL- Subject to subparagraph (B), with respect to an eligible commodity made available under the program established under subsection (b), the Corporation may pay--

          ‘(i) the costs of acquiring the eligible commodity;

          ‘(ii) the costs associated with packaging, enriching, preserving, and fortifying of the eligible commodity;

          ‘(iii) the processing, transportation, handling, and other incidental costs incurred before the date on which the commodity is delivered 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 the eligible commodity from United States ports to designated points of entry abroad in a case in which--

            ‘(I) a recipient country is landlocked;

            ‘(II) ports of a recipient country cannot be used effectively because of natural or other disturbances;

            ‘(III) carriers to a specific country are unavailable; or

            ‘(IV) substantial savings in costs or time may be gained by the use of points of entry other than ports;

          ‘(vi) the charges for general average contributions arising out of the ocean transport of commodities transferred; and

          ‘(vii) the costs, in addition to costs authorized by clauses (i) through (vi), of providing--

            ‘(I) assistance in the administration, sale, and monitoring of food assistance activities under this title; and

            ‘(II) technical assistance for monetization programs.

        ‘(B) FUNDING- Except for costs described in clauses (i) through (iii) of subparagraph (A), unless authorized in advance in an appropriations Act or reallocated under subsection (c)(7)(C)--

          ‘(i) not more than $55,000,000 of funds that would be available to carry out paragraph (2) may be used to cover costs under clauses (iv) through (vii) of subparagraph (A); and

          ‘(ii) of the amount provided under clause (i), not more than $12,000,000 shall be made available to cover costs under clauses (vi) and (vii) of subparagraph (A).

      ‘(7) PAYMENT OF ADMINISTRATIVE COSTS- An eligible organization that receives payment for administrative costs through monetization of the eligible commodity under subsection (h)(2) shall not be eligible to receive payment for the same administrative costs through direct payments under paragraph (6)(A)(vii)(I).’.

    (b) CONFORMING AMENDMENTS-

      (1) Section 416(b)(7)(D)(iii) of the Agricultural Act of 1949 (7 U.S.C. 1431(b)(7)(D)(iii)) is amended by striking ‘the Food for Progress Act of 1985’ and inserting ‘title VIII of the Agricultural Trade Act of 1978’.

      (2) The Act of August 19, 1958 (7 U.S.C. 1431 note; Public Law 85-683) is amended by striking ‘the Food for Progress Act of 1985’ and inserting ‘title VIII of the Agricultural Trade Act of 1978’.

      (3) Section 1110 of the Food Security Act of 1985 (7 U.S.C. 1736o) is repealed.

SEC. 326. EXPORTER ASSISTANCE INITIATIVE.

    (a) FINDINGS- Congress find that--

      (1) information in the possession of Federal agencies other than the Department of Agriculture that is necessary for the export of agricultural commodities and products is available only from multiple disparate sources; and

      (2) because exporters often need access to information quickly, exporters lack the time to search multiple sources to access necessary information, and exporters often are unaware of where the necessary information can be located.

    (b) 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.

    ‘(a) IN GENERAL- In order to create a single source of information for exports of United States agricultural commodities, the Secretary shall develop a website on the Internet that collates onto a single website all information from all agencies of the Federal Government that is relevant to the export of United States agricultural commodities.

    ‘(b) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out subsection (a)--

      ‘(1) $1,000,000 for each of fiscal years 2002 through 2004; and

      ‘(2) $500,000 for each of fiscal years 2005 and 2006.’.

Subtitle C--Miscellaneous Agricultural Trade Provisions

SEC. 331. 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 ‘2006’.

SEC. 332. EMERGING MARKETS.

    Section 1542 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5622 note; Public Law 101-624) is amended by striking ‘2002’ each place it appears in subsections (a) and (d)(1)(A)(i) and inserting ‘2006’.

SEC. 333. BIOTECHNOLOGY AND AGRICULTURAL TRADE PROGRAM.

    Section 1542 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5622 note; Public Law 101-624) is amended by adding at the end the following:

    ‘(g) BIOTECHNOLOGY AND AGRICULTURAL TRADE PROGRAM-

      ‘(1) IN GENERAL- The Secretary of Agriculture shall establish a program to enhance foreign acceptance of agricultural biotechnology and United States agricultural products developed through biotechnology.

      ‘(2) FOCUS- The program shall address the continuing and increasing market access, regulatory, and marketing issues relating to export commerce of United States agricultural biotechnology products.

      ‘(3) EDUCATION AND OUTREACH-

        ‘(A) FOREIGN MARKETS- Support for United States agricultural market development organizations to carry out education and other outreach efforts concerning biotechnology shall target such educational initiatives directed toward--

          ‘(i) producers, buyers, consumers, and media in foreign markets through initiatives in foreign markets; and

          ‘(ii) government officials, scientists, and trade officials from foreign countries through exchange programs.

        ‘(B) FUNDING FOR EDUCATION AND OUTREACH- Funding for activities under subparagraph (A) may be--

          ‘(i) used through--

            ‘(I) the emerging markets program under this section; or

            ‘(II) the Cochran Fellowship Program under section 1543; or

          ‘(ii) applied directly to foreign market development cooperators through the foreign market development cooperator program established under section 702.

      ‘(4) RAPID RESPONSE-

        ‘(A) IN GENERAL- The Secretary shall assist exporters of United States agricultural commodities in cases in which the exporters are harmed by unwarranted and arbitrary barriers to trade due to--

          ‘(i) marketing of biotechnology products;

          ‘(ii) food safety;

          ‘(iii) disease; or

          ‘(iv) other sanitary or phytosanitary concerns.

        ‘(B) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this paragraph $1,000,000 for each of fiscal years 2002 through 2006.

      ‘(5) FUNDING-

        ‘(A) COMMODITY CREDIT CORPORATION- The Secretary shall use the funds, facilities, and authorities of the Commodity Credit Corporation to carry out this subsection (other than paragraph (4)).

        ‘(B) FUNDING AMOUNT- Of the funds of the Commodity Credit Corporation, the Secretary shall make available to carry out this subsection (other than paragraph (4)) $15,000,000 for each of fiscal years 2002 through 2006.’.

SEC. 334. 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) in the first sentence, by striking ‘Foreign currencies’ and inserting ‘Proceeds’; and

        (B) in the second sentence, by striking ‘foreign currency’; and

      (3) in clause (iv)--

        (A) by striking ‘Foreign currency proceeds’ and inserting ‘Proceeds’; and

        (B) by striking ‘other than the country of origin--’ and all that follows and inserting ‘other than the country of origin, for the purpose of carrying out programs under this subsection.’.

    (b) IMPLEMENTATION OF AGREEMENTS- Section 416(b)(8) of the Agricultural Act of 1949 (7 U.S.C. 1431(b)(8)) is amended by striking ‘(8)(A)’ and all that follows through ‘(B) The Secretary’ and inserting the following:

      ‘(8) ADMINISTRATIVE PROVISIONS-

        ‘(A) DIRECT DELIVERY- In addition to practices in effect on the date of enactment of this subparagraph, the Secretary may approve an agreement that provides for direct delivery of eligible commodities to milling or processing facilities more than 50 percent of the interest in which is owned by United States citizens in recipient countries, with the proceeds of transactions transferred in cash to eligible organizations to carry out approved projects.

        ‘(B) REGULATIONS- The Secretary’.

    (c) CERTIFIED INSTITUTIONAL PARTNERS- Section 416 of the Agricultural Act of 1949 (7 U.S.C. 1431) is amended by adding at the end the following:

    ‘(c) CERTIFIED INSTITUTIONAL PARTNERS-

      ‘(1) IN GENERAL- The Secretary shall promulgate regulations and guidelines to permit private voluntary organizations and cooperatives to be certified as institutional partners.

      ‘(2) REQUIREMENTS- To become a certified institutional partner, a private voluntary organization or cooperative shall submit to the Secretary evidence of organizational capacity that describes--

        ‘(A) the financial, programmatic, commodity management, and auditing abilities and practices of the organization or cooperative; and

        ‘(B) the capacity of the organization or cooperative to carry out projects in particular countries.

      ‘(3) MULTI-COUNTRY PROPOSALS- A certified institutional partner shall be eligible to--

        ‘(A) submit a single proposal for 1 or more countries in which the certified institutional partner has already demonstrated organizational capacity; and

        ‘(B) receive expedited review of the proposal.’.

SEC. 335. AGRICULTURAL TRADE WITH CUBA.

    (a) IN GENERAL- Section 908 of the Agriculture, Rural Development, Food and Drug Administration and Related Agencies Appropriations Act, 2001 (22 U.S.C. 7207), is amended by striking subsection (b).

    (b) CONFORMING AMENDMENTS- Section 908(a) of the Agriculture, Rural Development, Food and Drug Administration and Related Agencies Appropriations Act, 2001 (22 U.S.C. 7207(a)) (as amended by subsection (a)), is amended--

      (1) by striking ‘(a)’ and all that follows through ‘Notwithstanding’ and inserting the following:

    ‘(a) IN GENERAL- Notwithstanding’;

      (2) by striking ‘(2) RULE OF CONSTRUCTION- Nothing in paragraph (1)’ and inserting the following:

    ‘(b) RULE OF CONSTRUCTION- Nothing in subsection (a)’; and

      (3) by striking ‘(3) WAIVER- The President may waive the application of paragraph (1)’ and inserting the following:

    ‘(c) WAIVER- The President may waive the application of subsection (a)’.

SEC. 336. SENSE OF CONGRESS CONCERNING AGRICULTURAL TRADE.

    (a) AGRICULTURE TRADE NEGOTIATING OBJECTIVES- It is the sense of Congress 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 Congress 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 Congress 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.

SEC. 337. REPORT ON USE OF PERISHABLE COMMODITIES.

    Not later than 120 days after the date of enactment of this Act, the Secretary of Agriculture shall develop and submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report on deficiencies in transportation and storage infrastructure and deficiencies in funding that have limited the use, and expansion of use, of highly perishable and semiperishable commodities in international food aid programs of the Department of Agriculture.

SEC. 338. SENSE OF SENATE 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 THE SENATE- It is the sense of the Senate 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.

TITLE IV--NUTRITION PROGRAMS

SEC. 401. SHORT TITLE.

    This title may be cited as the ‘Food Stamp Reauthorization Act of 2002’.

Subtitle A--Food Stamp Program

SEC. 411. 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 MADE BY HOUSEHOLD MEMBERS-

      ‘(1) IN GENERAL- 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 the 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. 661 et seq.) concerning payments made in prior months in lieu of obtaining current information from the household.

      ‘(2) DURATION OF DETERMINATION OF AMOUNT OF SUPPORT PAYMENTS- If a State agency makes a determination of the amount of support payments of a household under paragraph (1), the State agency may provide that the amount of the exclusion or deduction for the household shall not change until the eligibility of the household is next redetermined under section 11(e)(4).’.

SEC. 412. 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. 1381 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. 413. INCREASE IN BENEFITS TO HOUSEHOLDS WITH CHILDREN.

    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- Subject to the other provisions of this paragraph, the Secretary shall allow for each household a standard deduction that is equal to the greater of--

          ‘(i) the applicable percentage specified in subparagraph (D) of the applicable income standard of eligibility established under subsection (c)(1); or

          ‘(ii) the minimum deduction specified in subparagraph (E).

        ‘(B) GUAM- The Secretary shall allow for each household in Guam a standard deduction that is--

          ‘(i) equal to the applicable percentage specified in subparagraph (D) 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 less than the minimum deduction for Guam specified in subparagraph (E).

        ‘(C) HOUSEHOLDS OF 6 OR MORE MEMBERS- The income standard of eligibility established under subsection (c)(1) for a household of 6 members shall be used to calculate the standard deduction for each household of 6 or more members.

        ‘(D) APPLICABLE PERCENTAGE- For the purpose of subparagraph (A), the applicable percentage shall be--

          ‘(i) 8 percent for each of fiscal years 2002 through 2007;

          ‘(ii) 8.25 percent for fiscal year 2008;

          ‘(iii) 8.5 percent for each of fiscal years 2009 and 2010; and

          ‘(iv) 9 percent for fiscal year 2011 and each fiscal year thereafter.

        ‘(E) MINIMUM DEDUCTION- The minimum deduction shall be $134, $229, $189, $269, and $118 for the 48 contiguous States and the District of Columbia, Alaska, Hawaii, Guam, and the Virgin Islands of the United States, respectively.’.

SEC. 414. 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--

      (1) in subparagraph (A)--

        (A) by striking ‘A household’ and inserting the following:

          ‘(i) IN GENERAL- A household’; and

        (B) by adding at the end the following:

          ‘(ii) INCLUSION OF CERTAIN PAYMENTS- In determining the shelter expenses of a household under this paragraph, the State agency shall include any required payment to the landlord of the household without regard to whether the required payment is designated to pay specific charges.’; and

      (2) 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. 415. SIMPLIFIED UTILITY ALLOWANCE.

    Section 5(e)(6)(C)(iii) of the Food Stamp Act of 1977 (as amended by section 414(b)(1)(B)) 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. 416. SIMPLIFIED PROCEDURE FOR DETERMINATION OF EARNED INCOME.

    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 EARNED INCOME-

          ‘(i) IN GENERAL- A State agency may elect to determine monthly earned income by multiplying weekly income by 4 and biweekly income by 2.

          ‘(ii) ADJUSTMENT OF EARNED INCOME DEDUCTION- A State agency that makes an election described in clause (i) shall adjust the earned income deduction under subsection (e)(2)(B) to the extent necessary to prevent the election from resulting in increased costs to the food stamp program, as determined consistent with standards promulgated by the Secretary.’.

SEC. 417. SIMPLIFIED DETERMINATION OF DEDUCTIONS.

    Section 5(f)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2014(f)(1)) (as amended by section 416) is amended by adding at the end the following:

        ‘(D) 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 redetermination 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. 418. SIMPLIFIED DEFINITION OF RESOURCES.

    Section 5(g) of the Food Stamp Act of 1977 (7 U.S.C. 2014(g)) is amended 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), the Secretary shall promulgate regulations under which 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- 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, except to the extent that any of those types of resources are excluded under another paragraph of this subsection.’.

SEC. 419. ALTERNATIVE ISSUANCE SYSTEMS IN DISASTERS.

    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’.

SEC. 420. 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 standard established under section 5(c)(2).’.

SEC. 421. BENEFITS FOR ADULTS WITHOUT DEPENDENTS.

    (a) IN GENERAL- Section 6(o) of the Food Stamp Act of 1977 (7 U.S.C. 2015(o)) is amended--

      (1) in paragraph (1)--

        (A) in subparagraph (B), by striking ‘and’ at the end;

        (B) in subparagraph (C)--

          (i) by striking ‘subsection (d)(4),’ and inserting ‘subsection (d)(4)’; and

          (ii) by striking the period at the end and inserting ‘; and’; and

        (C) by adding at the end the following:

        ‘(D) a job search program or job search training program if--

          ‘(i) the program meets standards established by the Secretary to ensure that the participant is continuously and actively seeking employment in the private sector; and

          ‘(ii) no position is currently available for the participant in an employment or training program that meets the requirements of subparagraph (C).’;

      (2) in paragraph (2)--

        (A) by striking ‘36-month’ and inserting ‘24-month’; and

        (B) by striking ‘3’ and inserting ‘6’;

      (3) by striking paragraph (5) and inserting the following:

      ‘(5) ELIGIBILITY OF INDIVIDUALS WHILE MEETING WORK REQUIREMENT- Notwithstanding paragraph (2), an individual who would otherwise be ineligible under that paragraph shall be eligible to participate in the food stamp program during any period in which the individual meets the work requirement of subparagraph (A), (B), or (C) of that paragraph.’; and

      (4) in paragraph (6)(A)(ii)--

        (A) in subclause (III), by adding ‘and’ at the end;

        (B) in subclause (IV)--

          (i) by striking ‘3’ and inserting ‘6’; and

          (ii) by striking ‘; and’ and inserting a period; and

        (C) by striking subclause (V).

    (b) IMPLEMENTATION OF AMENDMENTS- For the purpose of implementing the amendments made by subsection (a), a State agency shall disregard any period during which an individual received food stamp benefits before the effective date of this title.

SEC. 422. PRESERVATION OF ACCESS TO ELECTRONIC BENEFITS.

    (a) IN GENERAL- Section 7(i)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2016(i)(1)) is amended by adding at the end the following:

        ‘(E) ACCESS TO EBT SYSTEMS-

          ‘(i) IN GENERAL- No benefits shall be taken off-line or otherwise made inaccessible because of inactivity until at least 180 days have elapsed since a household last accessed the account of the household.

          ‘(ii) NOTICE TO HOUSEHOLD- In a case in which benefits are taken off-line or otherwise made inaccessible, the household shall be sent a notice that--

            ‘(I) explains how to reactivate the benefits; and

            ‘(II) offers assistance if the household is having difficulty accessing the benefits of the household.’.

    (b) APPLICABILITY- The amendment made by subsection (a) shall apply with respect to each State agency beginning on the date on which the State agency, after the date of enactment of this Act, enters into a contract to operate an electronic benefit transfer system.

SEC. 423. 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. 424. 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) SIMPLIFIED PROCEDURES FOR RESIDENTS OF CERTAIN GROUP FACILITIES-

      ‘(1) IN GENERAL- At the option of the State agency, allotments for residents of facilities described in subparagraph (B), (C), (D), or (E) of section 3(i)(5) may be determined and issued under this subsection in lieu of subsection (a).

      ‘(2) AMOUNT OF ALLOTMENT- The allotment for each eligible resident described in paragraph (1) shall be calculated in accordance with standardized procedures established by the Secretary that take into account the allotments typically received by residents of facilities described in paragraph (1).

      ‘(3) ISSUANCE OF ALLOTMENT-

        ‘(A) IN GENERAL- The State agency shall issue an allotment determined under this subsection to the administration of a facility described in paragraph (1) as the authorized representative of the residents of the facility.

        ‘(B) ADJUSTMENT- The Secretary shall establish procedures to ensure that a facility described in paragraph (1) 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 facility.

      ‘(4) DEPARTURES OF COVERED RESIDENTS-

        ‘(A) NOTIFICATION- Any facility described in paragraph (1) that receives an allotment for a resident under this subsection 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--

            ‘(I) is eligible for continued benefits under the food stamp program; and

            ‘(II) should contact the State agency concerning continuation of the benefits.

        ‘(B) ISSUANCE TO DEPARTED RESIDENTS- On receiving a notification under subparagraph (A)(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 subsection unless the departed resident reapplies to participate in the food stamp program.

        ‘(C) STATE OPTION- The State agency may elect not to issue an allotment under subparagraph (B)(i) if the State agency lacks sufficient information on the location of the departed resident to provide the allotment.

        ‘(D) 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 subsection.’.

    (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. 425. REDEMPTION OF BENEFITS THROUGH GROUP LIVING ARRANGEMENTS.

    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.’.

SEC. 426. AVAILABILITY OF FOOD STAMP PROGRAM APPLICATIONS ON THE INTERNET.

    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;’.

SEC. 427. SIMPLIFIED DETERMINATIONS OF CONTINUING ELIGIBILITY.

    (a) IN GENERAL- Section 11(e) of the Food Stamp Act of 1977 (7 U.S.C. 2020(e)) is amended--

      (1) by striking paragraph (4) and inserting the following:

      ‘(4)(A) that the State agency shall periodically require each household to cooperate in a redetermination of the eligibility of the household.

      ‘(B) A redetermination under subparagraph (A) shall--

        ‘(i) be based on information supplied by the household; and

        ‘(ii) conform to standards established by the Secretary.

      ‘(C) The interval between redeterminations of eligibility under subparagraph (A) shall not exceed the eligibility review period;’ and

      (2) in paragraph (10)--

        (A) by striking ‘within the household’s certification period’; and

        (B) by striking ‘or until’ and all that follows through ‘occurs earlier’.

    (b) CONFORMING AMENDMENTS-

      (1) Section 3(c) of the Food Stamp Act of 1977 (7 U.S.C. 2012(c)) is amended--

        (A) by striking ‘Certification period’ and inserting ‘Eligibility review period’; and

        (B) by striking ‘certification period’ each place it appears and inserting ‘eligibility review period’.

      (2) Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014) is amended--

        (A) in subsection (d)(2), by striking ‘in the certification period which’ and inserting ‘that’; and

        (B) in subsection (e) (as amended by section 414(b)(1)(B))--

          (i) in paragraph (5)(B)(ii)--

            (I) in subclause (II), by striking ‘certification period’ and inserting ‘eligibility review period’; and

            (II) in subclause (III), by striking ‘has been anticipated for the certification period’ and inserting ‘was anticipated when the household applied or at the most recent redetermination of eligibility for the household’; and

          (ii) in paragraph (6)(C)(iii)(II), by striking ‘the end of a certification period’ and inserting ‘each redetermination of the eligibility of the household’.

      (3) Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015) is amended--

        (A) in subsection (c)(1)(C)(iv), by striking ‘certification period’ each place it appears and inserting ‘interval between required redeterminations of eligibility’; and

        (B) in subsection (d)(1)(D)(v)(II), by striking ‘a certification period’ and inserting ‘an eligibility review period’.

      (4) Section 8(c) of the Food Stamp Act of 1977 (7 U.S.C. 2017(c)) is amended--

        (A) in the second sentence of paragraph (1), by striking ‘within a certification period’; and

        (B) in paragraph (2)(B), by striking ‘expiration of’ and all that follows through ‘during a certification period,’ and inserting ‘termination of benefits to the household,’.

      (5) Section 11(e)(16) of the Food Stamp Act of 1977 (7 U.S.C. 2020(e)(16)) is amended by striking ‘the certification or recertification’ and inserting ‘determining the eligibility’.

SEC. 428. CLEARINGHOUSE FOR SUCCESSFUL NUTRITION EDUCATION EFFORTS.

    Section 11(f) of the Food Stamp Act of 1977 (7 U.S.C. 2020(f)) is amended by striking paragraph (2) and inserting the following:

      ‘(2) NUTRITION EDUCATION CLEARINGHOUSE- The Secretary shall--

        ‘(A) request State agencies to submit to the Secretary descriptions of successful nutrition education programs designed for use in the food stamp program and other nutrition assistance programs;

        ‘(B) make the descriptions submitted under subparagraph (A) available on the website of the Department of Agriculture; and

        ‘(C) inform State agencies of the availability of the descriptions on the website.’.

SEC. 429. 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 continue to receive food stamp benefits for a period of not more than 6 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--

        ‘(A) the change in household income as a result of the termination of cash assistance; and

        ‘(B) any changes in circumstances that may result in an increase in the food stamp allotment of the household and that the household elects to report.

      ‘(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 redetermination of eligibility; and

        ‘(B) initiate a new eligibility review period for the household without regard to whether the preceding eligibility review 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.’.

    (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 section 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. 430. DELIVERY TO RETAILERS OF NOTICES OF ADVERSE ACTION.

    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.’.

SEC. 431. 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) in paragraph (1)--

        (A) by striking ‘enhances payment accuracy’ and all that follows through ‘(A) the Secretary’ and inserting the following: ‘enhances payment accuracy and that has the following elements:

        ‘(A) ENHANCED ADMINISTRATIVE FUNDING- With respect to fiscal year 2001, the Secretary’;

        (B) in subparagraph (A)--

          (i) by striking ‘one percentage point to a maximum of 60’ and inserting ‘ 1/2 of 1 percentage point to a maximum of 55’; and

          (ii) by striking the semicolon at the end and inserting a period; and

        (C) by striking subparagraph (B) and all that follows and inserting the following:

        ‘(B) INVESTIGATION AND INITIAL SANCTIONS-

          ‘(i) INVESTIGATION- Except as provided under subparagraph (C), for any fiscal year in which the Secretary determines that a 95 percent statistical probability exists that the payment error rate of a State agency exceeds the national performance measure for payment error rates announced under paragraph (6) by more than 1 percentage point, other than for good cause shown, the Secretary shall investigate the administration by the State agency of the food stamp program unless the Secretary determines that sufficient information is already available to review the administration by the State agency.

          ‘(ii) INITIAL SANCTIONS- If an investigation under clause (i) results in a determination that the State agency has been seriously negligent (as determined under standards promulgated by the Secretary), the State agency shall pay the Secretary an amount that reflects the extent of such negligence (as determined under standards promulgated by the Secretary), not to exceed 5 percent of the amount provided to the State agency under subsection (a) for the fiscal year.

        ‘(C) ADDITIONAL SANCTIONS- If, for any fiscal year, the Secretary determines that a 95 percent statistical probability exists that the payment error rate of a State agency exceeds the national performance measure for payment error rates announced under paragraph (6) by more than 1 percentage point, other than for good cause shown, and that the State agency was sanctioned under this paragraph or was the subject of an investigation or review under subparagraph (B)(i) for each of the 2 immediately preceding fiscal years, the State agency shall pay to the Secretary an amount equal to the product obtained by multiplying--

          ‘(i) the value of all allotments issued by the State agency in the fiscal year;

          ‘(ii) the lesser of--

            ‘(I) the ratio that--

‘(aa) the amount by which the payment error rate of the State agency for the fiscal year exceeds by more than 1 percentage point the national performance measure for the fiscal year; bears to

‘(bb) 10 percent; or

            ‘(II) 1; and

          ‘(iii) the amount by which the payment error rate of the State agency for the fiscal year exceeds by more than 1 percentage point the national performance measure for the fiscal year.

        ‘(D) CORRECTIVE ACTION PLANS- The Secretary shall foster management improvements by the States by requiring State agencies to develop and implement corrective action plans to reduce payment errors.’;

      (2) in paragraph (2)(A), by inserting before the semicolon the following: ‘, as adjusted downward as appropriate under paragraph (10)’;

      (3) 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, enhanced administrative funding, claim for payment error under paragraph (1), or performance under the performance measures under paragraph (11).’;

      (4) in paragraph (5), 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 payment error rate for the State agency for the fiscal year, to comply with paragraph (10), and to determine the amount of enhanced administrative funding under paragraph (1)(A), high performance bonus payments under paragraph (11), or claims under subparagraph (B) or (C) of paragraph (1).’;

      (5) in paragraph (6)--

        (A) in the first and third sentences, by striking ‘paragraph (5)’ each place it appears and inserting ‘paragraph (8)’; and

        (B) in the first sentence, by inserting ‘(but determined without regard to paragraph (10))’ before ‘times that’; and

      (6) by adding at the end the following:

      ‘(10) ADJUSTMENTS OF PAYMENT ERROR RATE-

        ‘(A) IN GENERAL-

          ‘(i) ADJUSTMENT FOR HIGHER PERCENTAGE OF HOUSEHOLDS WITH EARNED INCOME- With respect to fiscal year 2002 and each fiscal year thereafter, in applying paragraph (1), the Secretary shall adjust the payment error rate determined under paragraph (2)(A) as necessary to take into account any increases in errors that result from the State agency’s having a higher percentage of participating households that have earned income than the lesser of--

            ‘(I) the percentage of participating households in all States that have earned income; or

            ‘(II) the percentage of participating households in the State in fiscal year 1992 that had earned income.

          ‘(ii) ADJUSTMENT FOR HIGHER PERCENTAGE OF HOUSEHOLDS WITH NONCITIZEN MEMBERS- With respect to fiscal year 2002 and each fiscal year thereafter, in applying paragraph (1), the Secretary shall adjust the payment error rate determined under paragraph (2)(A) as necessary to take into account any increases in errors that result from the State agency’s having a higher percentage of participating households that have 1 or more members who are not United States citizens than the lesser of--

            ‘(I) the percentage of participating households in all States that have 1 or more members who are not United States citizens; or

            ‘(II) the percentage of participating households in the State in fiscal year 1998 that had 1 or more members who were not United States citizens.

        ‘(B) ADDITIONAL ADJUSTMENTS- For fiscal year 2003 and each fiscal year thereafter, the Secretary may make such additional adjustments to the payment error rate determined under paragraph (2)(A) as the Secretary determines to be consistent with achieving the purposes of this Act.’.

    (b) APPLICABILITY- Except as otherwise provided in the amendments made by subsection (a), the amendments made by subsection (a) shall apply to fiscal year 2001 and each fiscal year thereafter.

SEC. 432. 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. 433. BONUSES FOR STATES THAT DEMONSTRATE HIGH PERFORMANCE.

    (a) IN GENERAL- Section 16(c) of the Food Stamp Act of 1977 (7 U.S.C. 2025(c)) (as amended by section 431(a)(6)) is amended by adding at the end the following:

      ‘(11) HIGH PERFORMANCE BONUS PAYMENTS-

        ‘(A) IN GENERAL- The Secretary shall--

          ‘(i) with respect to fiscal year 2002 and each fiscal year thereafter, measure the performance of each State agency with respect to each of the performance measures specified in subparagraph (B); and

          ‘(ii) in fiscal year 2003 and each fiscal year thereafter, subject to subparagraphs (C) and (D), make high performance bonus payments to the State agencies with the highest or most improved performance with respect to those performance measures.

        ‘(B) PERFORMANCE MEASURES- The performance measures specified in this subparagraph are--

          ‘(i) the ratio, expressed as a percentage, that--

            ‘(I) the number of households in the State that--

‘(aa) receive food stamps;

‘(bb) have incomes less than 130 percent of the poverty line (as defined in section 673 of the Community Services Block Grant Act (42 U.S.C. 9902));

‘(cc) have annual earnings equal to at least 1000 times the Federal minimum hourly rate under the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.); and

‘(dd) have children under age 18; bears to

            ‘(II) the number of households in the State that meet the criteria specified in items (bb) through (dd) of subclause (I); and

          ‘(ii) 4 additional performance measures, established by the Secretary in consultation with the National Governors Association, the American Public Human Services Association, and the National Conference of State Legislatures not later than 180 days after the date of enactment of this paragraph, of which not less than 1 performance measure shall relate to provision of timely and appropriate services to applicants for and recipients of food stamp benefits.

        ‘(C) HIGH PERFORMANCE BONUS PAYMENTS-

          ‘(i) DEFINITION OF CASELOAD- In this subparagraph, the term ‘caseload’ has the meaning given the term in section 6(o)(6)(A).

          ‘(ii) AMOUNT OF PAYMENTS-

            ‘(I) IN GENERAL- In fiscal year 2003 and each fiscal year thereafter, the Secretary shall--

‘(aa) make 1 high performance bonus payment of $6,000,000 for each of the 5 performance measures under subparagraph (B); and

‘(bb) allocate the high performance bonus payment with respect to each performance measure in accordance with subclauses (II) and (III).

            ‘(II) PAYMENTS FOR PERFORMANCE MEASURES- In fiscal year 2003 and each fiscal year thereafter, the Secretary shall allocate, in accordance with subclause (III), the high performance bonus payment made for each performance measure under subparagraph (B) among the 6 State agencies with, as determined by the Secretary by regulation--

‘(aa) the greatest improvement in the level of performance with respect to the performance measure between the 2 most recent years for which the Secretary determines that reliable data are available;

‘(bb) the highest performance in the performance measure for the most recent year for which the Secretary determines that reliable data are available; or

‘(cc) a combination of the greatest improvement described in item (aa) and the highest performance described in item (bb).

            ‘(III) ALLOCATION AMONG STATE AGENCIES ELIGIBLE FOR PAYMENTS- A high performance bonus payment under subclause (II) made for a performance measure shall be allocated among the 6 State agencies eligible for the payment in the ratio that--

‘(aa) the caseload of each of the 6 State agencies eligible for the payment; bears to

‘(bb) the caseloads of the 6 State agencies eligible for the payment.

        ‘(D) PROHIBITION ON RECEIPT OF HIGH PERFORMANCE BONUS PAYMENTS BY STATE AGENCIES SUBJECT TO SANCTIONS- If, for any fiscal year, a State agency is subject to a sanction under paragraph (1), the State agency shall not be eligible for a high performance bonus payment for the fiscal year.

        ‘(E) PAYMENTS NOT SUBJECT TO JUDICIAL REVIEW- A determination by the Secretary whether, and in what amount, to make a high performance bonus payment under this paragraph shall not be subject to judicial review.’.

    (b) APPLICABILITY- The amendment made by subsection (a) takes effect on the date of enactment of this Act.

SEC. 434. 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)--

        (A) by striking ‘, to remain available until expended,’; and

        (B) by striking clause (vii) and inserting the following:

          ‘(vii) for each of fiscal years 2002 through 2006, $90,000,000, to remain available until expended.’;

      (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 $25,000,000 for each of fiscal years 2002 through 2006 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--

            ‘(I) exhaust the allocation to the State agency under subparagraph (A) (including any reallocation that has been made available under subparagraph (C)); and

            ‘(II) 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--

‘(aa) is in the last month of the 6-month period described in section 6(o)(2);

‘(bb) is not eligible for an exception under section 6(o)(3);

‘(cc) is not eligible for a waiver under section 6(o)(4); and

‘(dd) is not eligible for an exemption under section 6(o)(6).’.

    (b) RESCISSION OF 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 cease to be available 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’ and inserting ‘except that, in the case of each of fiscal years 2002 through 2009, the State agency may limit such reimbursement to each participant to $50 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 ‘except that such total amount shall not exceed an amount representing $25 per participant per month’ and inserting ‘except that, in the case of each of fiscal years 2002 through 2009, such total amount shall not exceed an amount representing $50 per participant per month’.

    (e) EFFECTIVE DATE- The amendments made by this section take effect on the date of enactment of this Act.

SEC. 435. 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 ‘2006’; and

      (2) in subparagraph (B)(ii), by striking ‘2002’ and inserting ‘2006’.

    (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 ‘2006’.

    (c) GRANTS TO IMPROVE FOOD STAMP PARTICIPATION- Section 17(i)(1)(A) of the Food Stamp Act of 1977 (7 U.S.C. 2026(i)(1)(A)) is amended in the first sentence by striking ‘2002’ and inserting ‘2006’.

    (d) 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 ‘2002’ and inserting ‘2006’.

SEC. 436. COORDINATION OF PROGRAM INFORMATION EFFORTS.

    Section 16(k)(5) of the Food Stamp Act of 1977 (7 U.S.C. 2025(k)(5)) is amended--

      (1) in subparagraph (A), by striking ‘No funds’ and inserting ‘Except as provided in subparagraph (C), no funds’; and

      (2) by adding at the end the following:

        ‘(C) FOOD STAMP INFORMATIONAL ACTIVITIES- Subparagraph (A) shall not apply to any funds or expenditures described in clause (i) or (ii) of subparagraph (B) used to pay the costs of any activity that is eligible for reimbursement under subsection (a)(4).’.

SEC. 437. EXPANDED GRANT AUTHORITY.

    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.’.

SEC. 438. ACCESS AND OUTREACH PILOT PROJECTS.

    Section 17 of the Food Stamp Act of 1977 (7 U.S.C. 2026) is amended by striking subsection (h) and inserting the following:

    ‘(h) ACCESS AND OUTREACH PILOT PROJECTS-

      ‘(1) IN GENERAL- The Secretary shall make grants to State agencies and other entities to pay the Federal share of the eligible costs of projects to improve--

        ‘(A) access by eligible individuals to benefits under the food stamp program; or

        ‘(B) outreach to individuals eligible for those benefits.

      ‘(2) FEDERAL SHARE- The Federal share shall be 75 percent.

      ‘(3) TYPES OF PROJECTS- To be eligible for a grant under this subsection, a project may consist of--

        ‘(A) establishing a single site at which individuals may apply for--

          ‘(i) benefits under the food stamp program; and

          ‘(ii)(I) supplemental security income benefits under title XVI of the Social Security Act (42 U.S.C. 1381 et seq.);

          ‘(II) benefits under the medicaid program under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.);

          ‘(III) benefits under the State children’s health insurance program under title XXI of the Social Security Act (42 U.S.C. 1397aa et seq.);

          ‘(IV) benefits under the special supplemental nutrition program for women, infants, and children under section 17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786); or

          ‘(V) benefits under such other programs as the Secretary determines to be appropriate;

        ‘(B) developing forms that allow an individual to apply for more than 1 of the programs referred to in subparagraph (A);

        ‘(C) dispatching State agency personnel to conduct outreach and enroll individuals in the food stamp program and other programs in nontraditional venues (such as shopping malls, schools, community centers, county fairs, clinics, food banks, and job training centers);

        ‘(D) developing systems to enable increased participation in the provision of benefits under the food stamp program through farmers’ markets, roadside stands, and other community-supported agriculture programs, including wireless electronic benefit transfer systems and other systems appropriate to open-air settings where farmers and other vendors sell directly to consumers;

        ‘(E) allowing individuals to submit applications for the food stamp program by means of the telephone or the Internet, in particular individuals who live in rural areas, elderly individuals, and individuals with disabilities;

        ‘(F) encouraging consumption of fruit and vegetables by developing a cost-effective system for providing discounts for purchases of fruit and vegetables made through use of electronic benefit transfer cards;

        ‘(G) reducing barriers to participation by individuals, with emphasis on working families, eligible immigrants, elderly individuals, and individuals with disabilities;

        ‘(H) developing training materials, guidebooks, and other resources to improve access and outreach;

        ‘(I) conforming verification practices under the food stamp program with verification practices under other assistance programs; and

        ‘(J) such other activities as the Secretary determines to be appropriate.

      ‘(4) SELECTION-

        ‘(A) IN GENERAL- The Secretary shall develop criteria for selecting recipients of grants under this subsection that include the consideration of--

          ‘(i) the demonstrated record of a State agency or other entity in serving low-income individuals;

          ‘(ii) the ability of a State agency or other entity to reach hard-to-serve populations;

          ‘(iii) the level of innovative proposals in the application of a State agency or other entity for a grant; and

          ‘(iv) the development of partnerships between public and private sector entities and linkages with the community.

        ‘(B) PREFERENCE- In selecting recipients of grants under paragraph (1), the Secretary shall provide a preference to any applicant that consists of a partnership between a State and a private entity, such as--

          ‘(i) a food bank;

          ‘(ii) a community-based organization;

          ‘(iii) a public school;

          ‘(iv) a publicly-funded health clinic;

          ‘(v) a publicly-funded day care center; and

          ‘(vi) a nonprofit health or welfare agency.

        ‘(C) GEOGRAPHICAL DISTRIBUTION OF RECIPIENTS-

          ‘(i) IN GENERAL- Subject to clause (ii), the Secretary shall select, from all eligible applications received, at least 1 recipient to receive a grant under this subsection from--

            ‘(I) each region of the Department of Agriculture administering the food stamp program; and

            ‘(II) each additional rural or urban area that the Secretary determines to be appropriate.

          ‘(ii) EXCEPTION- The Secretary shall not be required to select grant recipients under clause (i) to the extent that the Secretary determines that an insufficient number of eligible grant applications has been received.

      ‘(5) PROJECT EVALUATIONS-

        ‘(A) IN GENERAL- The Secretary shall conduct evaluations of projects funded by grants under this subsection.

        ‘(B) LIMITATION- Not more than 10 percent of funds made available to carry out this subsection shall be used for project evaluations described in subparagraph (A).

      ‘(6) MAINTENANCE OF EFFORT- A State agency or other entity shall provide assurances to the Secretary that funds provided to the State agency or other entity under this subsection will be used only to supplement, not to supplant, the amount of Federal, State, and local funds otherwise expended to carry out access and outreach activities in the State under this Act.

      ‘(7) FUNDING- There is authorized to be appropriated to carry out this subsection $3,000,000 for the period of fiscal years 2003 through 2005.’.

SEC. 439. CONSOLIDATED BLOCK GRANTS AND ADMINISTRATIVE FUNDS.

    (a) CONSOLIDATED FUNDING- Section 19(a)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2028(a)(1)) is amended--

      (1) in subparagraph (A)--

        (A) by striking ‘the Commonwealth of Puerto Rico’ and inserting ‘governmental entities specified in subparagraph (D)’;

        (B) in clause (ii), by striking ‘and’ at the end; and

        (C) by striking clause (iii) and all that follows and inserting the following:

      ‘(iii) for fiscal year 2002, $1,356,000,000; and

      ‘(iv) for each of fiscal years 2003 through 2006, the amount provided in clause (iii), as adjusted by the percentage by which the thrifty food plan has been adjusted under section 3(o)(4) between June 30, 2001, and June 30 of the immediately preceding fiscal year;

    to pay the expenditures for nutrition assistance programs for needy persons as described in subparagraphs (B) and (C).’;

      (2) in subparagraph (B)--

        (A) by striking ‘(B) The’ and inserting the following:

        ‘(B) MAXIMUM PAYMENTS TO COMMONWEALTH OF PUERTO RICO-

          ‘(i) IN GENERAL- The’;

        (B) by inserting ‘of Puerto Rico’ after ‘Commonwealth’ each place it appears; and

        (C) by adding at the end the following:

          ‘(ii) EXCEPTION FOR EXPENDITURES FOR CERTAIN SYSTEMS- Notwithstanding subparagraph (A) and clause (i), the Commonwealth of Puerto Rico may spend not more than $6,000,000 of the amount required to be paid to the Commonwealth for fiscal year 2002 under subparagraph (A) 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 that nutrition assistance; and

            ‘(III) operating systems to deliver benefits through electronic benefit transfers.’; and

      (3) by adding at the end the following:

        ‘(C) AMERICAN SAMOA- For each fiscal year, the Secretary shall reserve 0.4 percent of the funds made available under subparagraph (A) for payment to American Samoa to pay 100 percent of the expenditures for a nutrition assistance program extended under section 601(c) of Public Law 96-597 (48 U.S.C. 1469d(c)).

        ‘(D) GOVERNMENTAL ENTITY- A governmental entity specified in this subparagraph is--

          ‘(i) the Commonwealth of Puerto Rico; and

          ‘(ii) for fiscal year 2003 and each fiscal year thereafter, American Samoa.’.

    (b) REPORT TO CONGRESS AND INCREASED AUTHORIZATION-

      (1) IN GENERAL- Not later than 270 days after the date of enactment of this Act, the Comptroller General of the United States shall develop and submit to Congress a report that--

        (A) describes the similarities and differences (in terms of program administration, rules, benefits, and requirements) between--

          (i) the food stamp program under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.), other than section 19 of that Act (7 U.S.C. 2028); and

          (ii) the program to provide assistance to Puerto Rico under section 19 of that Act (as in effect on the day before the date of enactment of this Act);

        (B) specifies the costs and savings associated with each similarity and difference; and

        (C) states the recommendation of the Comptroller General as to whether additional funding should be provided to carry out section 19 of that Act.

      (2) INCREASED AUTHORIZATION- Effective on the date of submission to Congress of the report under paragraph (1), there is authorized to be appropriated to carry out section 19 of the Food Stamp Act of 1977 (7 U.S.C. 2028) (in addition to amounts made available to carry out that section under law other than this subsection) $50,000,000 for each fiscal year.

      (3) LIMITATION- No amounts may be made available to carry out paragraph (2) unless specifically provided by an appropriation Act.

    (c) CONFORMING AMENDMENT- Section 24 of the Food Stamp Act of 1977 (7 U.S.C. 2033) is repealed.

    (d) EFFECTIVE DATE-

      (1) IN GENERAL- Except as provided in paragraph (2), the amendments made by this section take effect on October 1, 2002.

      (2) EXCEPTION FOR EXPENDITURES FOR CERTAIN SYSTEMS- The amendments made by subsection (a)(2) take effect on the date of enactment of this Act.

SEC. 440. ASSISTANCE FOR COMMUNITY FOOD PROJECTS.

    Section 25 of the Food Stamp Act of 1977 (7 U.S.C. 2034) is amended--

      (1) in subsection (b)(2)(B), by striking ‘2002’ and inserting ‘2006’;

      (2) in subsection (d)--

        (A) in paragraph (3), by striking ‘or’ at the end; and

        (B) 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 agriculture problems of the communities, such as food policy councils and food planning associations; or

      ‘(5) meet, as soon as practicable through the provision of grants of not to exceed $25,000 each, specific neighborhood, local, or State food and agriculture needs, including needs for--

        ‘(A) infrastructure improvement and development (including the purchase of equipment necessary for the production, handling, or marketing of locally produced food);

        ‘(B) planning for long-term solutions; or

        ‘(C) the creation of innovative marketing activities that mutually benefit farmers and low-income consumers.’; and

      (3) in subsection (e)(1), by striking ‘50’ and inserting ‘75’.

SEC. 441. AVAILABILITY OF COMMODITIES FOR THE EMERGENCY FOOD ASSISTANCE PROGRAM.

    (a) IN GENERAL- Section 27 of the Food Stamp Act of 1977 (7 U.S.C. 2036) is amended--

      (1) in subsection (a)--

        (A) by striking ‘1997 through 2002’ and inserting ‘2002 through 2006’; and

        (B) by striking ‘$100,000,000’ and inserting ‘$110,000,000’; and

      (2) by adding at the end the following:

    ‘(c) USE OF FUNDS FOR RELATED COSTS-

      ‘(1) IN GENERAL- For each of fiscal years 2002 through 2006, the Secretary shall use $10,000,000 of the funds made available under subsection (a) to pay the direct and indirect costs of States relating to the processing, storing, transporting, and distributing to eligible recipient agencies of--

        ‘(A) commodities purchased by the Secretary under subsection (a); and

        ‘(B) commodities acquired from other sources, including commodities acquired 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)).

      ‘(2) ALLOCATION OF FUNDS- The amount required to be used in accordance with paragraph (1) shall be allocated in accordance with section 204(a) of the Emergency Food Assistance Act of 1983 (7 U.S.C. 7508(a)).’.

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

SEC. 442. USE OF APPROVED FOOD SAFETY TECHNOLOGY.

    (a) IN GENERAL- Section 27 of the Food Stamp Act of 1977 (7 U.S.C. 2036) (as amended by section 441) is amended by adding at the end the following:

    ‘(d) 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 has been approved by the Secretary or 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 Agriculture and Consumer Protection Act of 1973 (7 U.S.C. 612c note; Public Law 93-86);

        ‘(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.).’.

    (b) EFFECTIVE DATE- The amendment made by this section takes effect on the date of enactment of this Act.

SEC. 443. INNOVATIVE PROGRAMS FOR ADDRESSING COMMON COMMUNITY PROBLEMS.

    (a) IN GENERAL- The Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) is amended by adding at the end the following:

‘SEC. 28. INNOVATIVE PROGRAMS FOR ADDRESSING COMMON COMMUNITY PROBLEMS.

    ‘(a) IN GENERAL- The Secretary shall offer to enter into a contract with a nongovernmental organization described in subsection (b) to coordinate with Federal agencies, States, political subdivisions, and nongovernmental organizations (referred to in this section as ‘targeted entities’) to develop, and recommend to the targeted entities, innovative programs for addressing common community problems, including loss of farms, rural poverty, welfare dependency, hunger, the need for job training, juvenile crime prevention, and the need for self-sufficiency by individuals and communities.

    ‘(b) NONGOVERNMENTAL ORGANIZATION- The nongovernmental organization referred to in subsection (a)--

      ‘(1) shall be selected on a competitive basis; and

      ‘(2) as a condition of entering into the contract--

        ‘(A) shall be experienced in working with targeted entities, and in organizing workshops that demonstrate programs to targeted entities;

        ‘(B) shall be experienced in identifying programs that effectively address problems described in subsection (a) that can be implemented by other targeted entities;

        ‘(C) shall agree--

          ‘(i) to contribute in-kind resources toward the establishment and maintenance of programs described in subsection (a); and

          ‘(ii) to provide to targeted entities, free of charge, information on the programs;

        ‘(D) shall be experienced in, and capable of, receiving information from, and communicating with, targeted entities throughout the United States; and

        ‘(E) shall be experienced in operating a national information clearinghouse that addresses 1 or more of the problems described in subsection (a).

    ‘(c) AUDITS- The Secretary shall establish auditing procedures and otherwise ensure the effective use of funds made available under this section.

    ‘(d) FUNDING-

      ‘(1) IN GENERAL- Not later than 30 days after the date of enactment of this section, and on October 1, 2002, out of any funds in the Treasury not otherwise appropriated, the Secretary of the Treasury shall transfer to the Secretary of Agriculture to carry out this section $200,000, to remain available until expended.

      ‘(2) RECEIPT AND ACCEPTANCE- The Secretary shall be entitled to receive, shall accept, and shall use to carry out this section the funds transferred under paragraph (1), without further appropriation.’.

    (b) EFFECTIVE DATE- The amendment made by this section takes effect on the date of enactment of this Act.

SEC. 444. REPORT ON USE OF ELECTRONIC BENEFIT TRANSFER SYSTEMS.

    Not later than 1 year after the date of enactment of this Act, the Secretary of Agriculture shall submit to Congress a report on--

      (1) difficulties relating to use of electronic benefit transfer systems in issuance of food stamp benefits under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.);

      (2) the extent to which there exists fraud, and the types of fraud that exist, in use of the electronic benefit transfer systems; and

      (3) the efforts being made by the Secretary of Agriculture, retailers, electronic benefit transfer system contractors, and States to address the problems described in paragraphs (1) and (2).

SEC. 445. VITAMIN AND MINERAL SUPPLEMENTS.

    (a) IN GENERAL- Section 3(g)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2012(g)(1)) is amended by striking ‘or food product’ and inserting ‘, food product, or dietary supplement that provides exclusively 1 or more vitamins or minerals’.

    (b) IMPACT STUDY-

      (1) IN GENERAL- Not later than April 1, 2003, the Secretary of Agriculture shall enter into a contract with a scientific research organization to study and develop a report on the technical issues, economic impacts, and health effects associated with allowing individuals to use benefits under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) to purchase dietary supplements that provide exclusively 1 or more vitamins or minerals (referred to in this subsection as ‘vitamin-mineral supplements’).

      (2) REQUIRED ELEMENTS- At a minimum, the study shall examine--

        (A) the extent to which problems arise in the purchase of vitamin-mineral supplements with electronic benefit transfer cards;

        (B) the extent of any difficulties in distinguishing vitamin-mineral supplements from herbal and botanical supplements for which food stamp benefits may not be used;

        (C) whether participants in the food stamp program spend more on vitamin-mineral supplements than nonparticipants;

        (D) to what extent vitamin-mineral supplements are substituted for other foods purchased with use of food stamp benefits;

        (E) the proportion of the average food stamp allotment that is being used to purchase vitamin-mineral supplements; and

        (F) the extent to which the quality of the diets of participants in the food stamp program has changed as a result of allowing participants to use food stamp benefits to purchase vitamin-mineral supplements.

      (3) REPORT- The report required under paragraph (1) shall be submitted to the Secretary of Agriculture not later than 2 years after the date on which the contract referred to in that paragraph is entered into.

      (4) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated $3,000,000 to carry out this subsection.

Subtitle B--Miscellaneous Provisions

SEC. 451. REAUTHORIZATION OF COMMODITY PROGRAMS.

    (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 ‘2006’.

    (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 2006, 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 caseload slot shall be equal to $50, 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 2006- For each of fiscal years 2004 through 2006, the amount of each grant per caseload slot shall be equal to the amount of the grant per 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 ‘2006’; and

      (3) by striking subsection (l).

    (c) 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 ‘2006’.

    (d) 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 ‘2002’ and inserting ‘2006’;

      (2) by striking ‘administrative’; and

      (3) by inserting ‘storage,’ after ‘processing,’.

SEC. 452. PARTIAL RESTORATION OF BENEFITS TO LEGAL IMMIGRANTS.

    (a) 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 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) APPLICABILITY- The amendments made by this subsection shall apply to fiscal year 2004 and each fiscal year thereafter.

    (b) WORK REQUIREMENT FOR LEGAL IMMIGRANTS-

      (1) WORKING IMMIGRANT FAMILIES- Section 402(a)(2)(B)(ii)(I) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2)(B)(ii)(I)) is amended by striking ‘40’ and inserting ‘40 (or 16, in the case of the specified Federal program described in paragraph (3)(B))’.

      (2) CONFORMING AMENDMENTS-

        (A) Section 213A(a)(3)(A) of the Immigration and Nationality Act (8 U.S.C. 1183a(a)(3)(A)) is amended by striking ‘40’ and inserting ‘40 (or 16, in the case of the specified Federal program described in section 402(a)(3)(B) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1612(a)(3)(B)))’.

        (B) Section 421(b)(2)(A) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1631(b)(2)(A)) is amended by striking ‘40’ and inserting ‘40 (or 16, in the case of the specified Federal program described in section 402(a)(3)(B))’.

    (c) RESTORATION OF BENEFITS TO REFUGEES AND ASYLEES- Section 402(a)(2) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2)) is amended--

      (1) in subparagraph (A), by striking ‘programs described in paragraph (3)’ and inserting ‘program described in paragraph (3)(A)’; and

      (2) by adding at the end the following:

        ‘(L) FOOD STAMP EXCEPTION FOR REFUGEES AND ASYLEES- With respect to eligibility for benefits for the specified Federal program described in paragraph (3)(B), paragraph (1) shall not apply to an alien with respect to which an action described in subparagraph (A) was taken and was not revoked.’.

    (d) 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’.

SEC. 453. COMMODITIES FOR SCHOOL LUNCH PROGRAMS.

    (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. 454. 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. 455. 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. 456. REPORT ON CONVERSION OF WIC PROGRAM INTO AN INDIVIDUAL ENTITLEMENT PROGRAM.

    (a) FINDINGS- Congress finds that the special supplemental nutrition program for woman, infants, and children established by section 17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786) (referred to in this section as the ‘WIC program’)--

      (1) safeguards the health of low-income pregnant, postpartum, and breast-feeding women, infants, and children up to 5 years of age who are at nutritional risk through the delivery of individualized food packages, nutrition education, and health referrals;

      (2) is associated with a variety of desirable outcomes, including lower incidence of infant mortality, reduced prevalence of very low birth weights, improved nutrient intake among children, improved cognitive development among children, and lower Medicaid costs for women who participate;

      (3) is recognized generally as a leading national health and nutrition program;

      (4) as a discretionary program, can have inappropriate funding because funding levels must be determined early in the year by the President and the Committees on Appropriations of the House of Representatives and the Senate (referred to in this subsection as the ‘Committees’);

      (5) can have funding shortfalls in some years because the economy worsens between the time that funding levels are established and the fiscal year is underway;

      (6) may have to deny service or reduce benefits to eligible women, infants, and children in some States as a result of these funding shortfalls;

      (7) may be provided with more funding than is required in those years in which the economy improves between the time that funding levels are established and the fiscal year is underway, with the result that the President and the Committees will have committed funds to the WIC program that could have been devoted to other priorities; and

      (8) would not have this funding uncertainty if the WIC program were an entitlement program that provided benefits to every eligible woman, infant, and child seeking benefits.

    (b) REPORT- Not later than December 31, 2002, the Secretary of Agriculture shall submit to the Committee on Education and the Workforce of the House of Representatives and the Committee on Agriculture, Nutrition and Forestry of the Senate a report that analyzes the conversion of the WIC program from a discretionary program into an individual entitlement program.

    (c) CONTENTS- The report shall--

      (1) analyze the conversion of the WIC program into an individual entitlement program, rather than a capped entitlement program for States;

      (2) analyze the conversion using at least 3 separate scenarios, including--

        (A) 1 scenario under which the costs to the Federal Government approximate current projected funding levels;

        (B) 1 scenario under which the costs to the Federal Government approximate current projected funding levels plus 5 percent; and

        (C) 1 scenario under which the costs to the Federal Government approximate current projected funding levels plus 7 percent; and

      (3) address--

        (A) the levels at which, and manner by which, States will be reimbursed for food package costs and administrative costs;

        (B) how current cost containment savings will be preserved;

        (C) how reimbursement rates will be adjusted annually to reflect inflation or other factors affecting food prices;

        (D) how program benefits and services will be affected by the conversion to an individual entitlement program; and

        (E) any other issues that arise from converting the WIC program to an individual entitlement program, as determined by the Secretary of Agriculture.

    (d) CONSULTATION- In preparing the report, the Secretary of Agriculture shall consult with--

      (1) the Committee on Education and the Workforce of the House of Representatives;

      (2) the Committee on Agriculture, Nutrition and Forestry of the Senate;

      (3) membership organizations representing State directors and local agencies administering the WIC program;

      (4) Governors and other State officials;

      (5) research and policy organizations that have a history of carrying out activities on issues affecting the WIC program; and

      (6) advocacy organizations representing the needs of the population that is eligible to participate in the WIC program.

    (e) FUNDING- Notwithstanding any other provision of law, the Secretary shall carry out this section using funds made available for necessary expenses to carry out the WIC program.

SEC. 457. COMMODITY DONATIONS.

    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 needed 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.’.

SEC. 458. PURCHASES OF LOCALLY PRODUCED FOODS.

    (a) IN GENERAL- The Secretary of Agriculture shall--

      (1) encourage institutions participating in the national school lunch program authorized under the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et seq.) 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;

      (2) advise institutions participating in a program described in paragraph (1) of the policy described in that paragraph and post information concerning the policy on the website maintained by the Secretary; and

      (3) in accordance with requirements established by the Secretary, provide start-up 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 paragraph (1).

    (b) AUTHORIZATION OF APPROPRIATIONS-

      (1) IN GENERAL- There is authorized to be appropriated to carry out this section $400,000 for each of fiscal years 2002 through 2006.

      (2) LIMITATION- No amounts may be made available to carry out this section unless specifically provided by an appropriation Act.

SEC. 459. SENIORS FARMERS’ MARKET NUTRITION PROGRAM.

    (a) ESTABLISHMENT- The Secretary of Agriculture shall carry out and expand a seniors farmers’ market nutrition program.

    (b) PROGRAM PURPOSE- The purpose of the seniors farmers’ market nutrition program is to provide to low-income seniors resources in the form of fresh, nutritious, unprepared, locally grown fruits, vegetables, and herbs from farmers’ markets, roadside stands, and community-supported agriculture programs.

    (c) REGULATIONS- The Secretary of Agriculture may promulgate such regulations as the Secretary considers necessary to carry out the seniors farmers’ market nutrition program under this section.

    (d) FUNDING-

      (1) IN GENERAL- Not later than 30 days after the date of enactment of this Act, and on October 1, 2002, and each October 1 thereafter through October 1, 2005, out of any funds in the Treasury not otherwise appropriated, the Secretary of the Treasury shall transfer to the Secretary of Agriculture to carry out this section $15,000,000.

      (2) RECEIPT AND ACCEPTANCE- The Secretary of Agriculture shall be entitled to receive, shall accept, and shall use to carry out this section the funds transferred under paragraph (1), without further appropriation.

    (e) AUTHORITY- The authority provided by this section is in addition to, and not in lieu of, the authority of the Secretary of Agriculture to carry out any similar program under the Commodity Credit Corporation Charter Act (15 U.S.C. 714 et seq.).

SEC. 460. FARMERS’ MARKET NUTRITION PROGRAM.

    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-

            ‘(I) IN GENERAL- Not later than 30 days after the date of enactment of the Agriculture, Conservation, and Rural Enhancement Act of 2001, out of any funds in the Treasury not otherwise appropriated, the Secretary of the Treasury shall transfer to the Secretary to carry out this subsection $15,000,000.

            ‘(II) RECEIPT AND ACCEPTANCE- The Secretary shall be entitled to receive, shall accept, and shall use to carry out this subsection the funds transferred under subclause (I), without further appropriation.’.

SEC. 461. FRUIT AND VEGETABLE PILOT PROGRAM.

    (a) IN GENERAL- In the school year beginning July 2002, the Secretary of Agriculture shall use funds made available under section 32 of the Act of August 24, 1935 (7 U.S.C. 612c), to conduct 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 fruits and vegetables throughout the school day in--

      (1) a cafeteria;

      (2) a student lounge; or

      (3) another designated room of the school.

    (b) 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.

    (c) EVALUATION OF PILOT PROGRAM-

      (1) IN GENERAL- Not later than 1 year after the implementation of the pilot program required by subsection (a), the Secretary (acting through the Economic Research Service) shall submit to the Committee on Education and the Workforce of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate an evaluation of the results of the pilot program to determine--

        (A) whether students took advantage of the pilot program;

        (B) whether interest in the pilot program increased or lessened over time;

        (C) what effect, if any, the pilot program had on vending machine sales; and

        (D) what effect, if any, the pilot program had on the sale of meals served under the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.) and the Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et seq.).

      (2) FUNDING- The Secretary shall use $200,000 of the funds described in subsection (a) to carry out the evaluation under this subsection.

SEC. 462. CONGRESSIONAL HUNGER FELLOWS PROGRAM.

    (a) SHORT TITLE- This section may be cited as the ‘Congressional Hunger Fellows Act of 2002’.

    (b) FINDINGS- Congress finds that--

      (1) there are--

        (A) a critical need for compassionate individuals who are committed to assisting people who suffer from hunger; and

        (B) a need for those individuals to initiate and administer solutions to the hunger problem;

      (2) Bill Emerson, the distinguished late Representative from the 8th District of Missouri, demonstrated--

        (A) his commitment to solving the problem of hunger in a bipartisan manner;

        (B) his commitment to public service; and

        (C) his great affection for the institution and the ideals of Congress;

      (3) George T. (Mickey) Leland, the distinguished late Representative from the 18th District of Texas, demonstrated--

        (A) his compassion for individuals in need;

        (B) his high regard for public service; and

        (C) his lively exercise of political talents;

      (4) 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; and

      (5) since those 2 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, it is especially appropriate to honor the memory of Mr. Emerson and Mr. Leland by establishing a fellowship program to develop and train the future leaders of the United States to pursue careers in humanitarian service.

    (c) DEFINITIONS- In this section:

      (1) APPROPRIATE CONGRESSIONAL COMMITTEES- The term ‘appropriate congressional committees’ means--

        (A) the Committee on Agriculture and the Committee on International Relations of the House of Representatives; and

        (B) the Committee on Agriculture, Nutrition, and Forestry and the Committee on Foreign Relations of the Senate.

      (2) BOARD- The term ‘Board’ means the Board of Trustees of the Program.

      (3) FUND- The term ‘Fund’ means the Congressional Hunger Fellows Trust Fund established by subsection (g).

      (4) PROGRAM- The term ‘Program’ means the Congressional Hunger Fellows Program established by subsection (d).

    (d) ESTABLISHMENT- There is established as an independent entity of the legislative branch of the United States Government an entity to be known as the ‘Congressional Hunger Fellows Program’.

    (e) 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-

        (A) APPOINTMENT-

          (i) IN GENERAL- The Board shall be composed of 6 voting members appointed under clause (ii) and 1 nonvoting ex officio member designated by clause (iii).

          (ii) VOTING MEMBERS- The voting members of the Board shall be the following:

            (I) 2 members appointed by the Speaker of the House of Representatives.

            (II) 1 member appointed by the minority leader of the House of Representatives.

            (III) 2 members appointed by the majority leader of the Senate.

            (IV) 1 member appointed by the minority leader of the Senate.

          (iii) NONVOTING MEMBER- The Executive Director of the Program shall serve as a nonvoting ex officio member of the Board.

        (B) TERMS-

          (i) IN GENERAL- Each member of the Board shall serve for a term of 4 years.

          (ii) INCOMPLETE TERM- If a member of the Board does not serve the full term of 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.

        (C) VACANCY- A vacancy on the Board--

          (i) shall not affect the powers of the Board; and

          (ii) shall be filled in the same manner as the original appointment was made.

        (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), a member of the Board shall not receive compensation for service on the Board.

          (ii) TRAVEL- A member of the Board 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 Board.

      (3) DUTIES-

        (A) BYLAWS-

          (i) ESTABLISHMENT- The Board shall establish such bylaws and other regulations as are appropriate to enable the Board to carry out this section, including the duties described in this paragraph.

          (ii) CONTENTS- Bylaws and other regulations established under clause (i) shall include provisions--

            (I) for appropriate fiscal control, accountability for funds, and operating principles;

            (II) to prevent any conflict of interest, or the appearance of any conflict of interest, in--

(aa) the procurement and employment actions taken by the Board or by any officer or employee of the Board; and

(bb) 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) SUBMISSION TO CONGRESS- Not later than 90 days after the date of the first meeting of the Board, the Chairperson of the Board shall submit to the appropriate congressional committees a copy of the bylaws established by the Board.

        (B) BUDGET- For each fiscal year in which the Program is in operation--

          (i) the Board shall determine a budget for the Program for the fiscal year; and

          (ii) all spending by the Program shall be in accordance with the 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 shall determine--

          (i) the priority of the programs to be carried out under this section; and

          (ii) the amount of funds to be allocated for the fellowships established under subsection (f)(3)(A).

    (f) 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;

        (B) to recognize the needs of people who are hungry and poor;

        (C) to provide assistance and compassion for people in need;

        (D) to increase awareness of the importance of public service; and

        (E) to provide training and development opportunities for the leaders through placement in programs operated by appropriate entities.

      (2) AUTHORITY- The Program may develop fellowships to carry out the purposes of the Program, 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-

            (I) BILL EMERSON HUNGER FELLOWSHIP- The Bill Emerson Hunger Fellowship shall address hunger and other humanitarian needs in the United States.

            (II) MICKEY LELAND HUNGER FELLOWSHIP- The Mickey Leland Hunger Fellowship shall address international hunger and other humanitarian needs.

          (iii) WORK PLAN- 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 the specific duties and responsibilities relating to the objectives.

        (C) PERIOD OF FELLOWSHIP-

          (i) EMERSON FELLOWSHIP- A Bill Emerson Hunger Fellowship awarded under this paragraph shall be for a period of not more than 1 year.

          (ii) LELAND FELLOWSHIP- A Mickey Leland Hunger Fellowship awarded under this paragraph shall be for a period of not more than 2 years, of which not less than 1 year shall be dedicated to fulfilling the requirement of subparagraph (B)(i)(I).

        (D) SELECTION OF FELLOWS-

          (i) IN GENERAL- A fellowship shall be awarded through 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 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 the Board determines to be appropriate.

          (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 Bill Emerson Hunger Fellowship shall be known as an ‘Emerson Fellow’.

            (II) LELAND FELLOW- An individual awarded a Mickey Leland Hunger Fellowship shall be known as a ‘Leland Fellow’.

      (4) EVALUATIONS-

        (A) IN GENERAL- The Program shall conduct periodic evaluations of the Bill Emerson and Mickey Leland Hunger Fellowships.

        (B) REQUIRED ELEMENTS- Each evaluation shall include--

          (i) an assessment of the successful completion of the work plan of each fellow;

          (ii) an assessment of the impact of the fellowship on the fellows;

          (iii) an assessment of the accomplishment of the purposes of the Program; and

          (iv) an assessment of the impact of each fellow on the community.

    (g) TRUST FUND-

      (1) ESTABLISHMENT- There is established in the Treasury of the United States a fund to be known as the ‘Congressional Hunger Fellows Trust Fund’, consisting of--

        (A) amounts appropriated to the Fund under subsection (k);

        (B) any amounts earned on investment of amounts in the Fund under paragraph (2); and

        (C) amounts received under subsection (i)(3)(A).

      (2) INVESTMENT OF AMOUNTS-

        (A) IN GENERAL-

          (i) AUTHORITY TO INVEST- The Secretary of the Treasury shall invest such portion of the Fund as is not, in the judgment of the Secretary of the Treasury, required to meet current withdrawals.

          (ii) TYPES OF INVESTMENTS- Each investment may be made only 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 of the Treasury in consultation with the Board, has a maturity suitable for the Fund.

        (B) ACQUISITION OF OBLIGATIONS- For the purpose of investments under subparagraph (A), obligations may be acquired--

          (i) on original issue at the issue price; or

          (ii) by purchase of outstanding obligations at the market price.

        (C) SALE OF OBLIGATIONS- Any obligation acquired by the Fund may be sold by the Secretary of the Treasury at the market price.

        (D) CREDITS TO FUND- The interest on, and the proceeds from the sale or redemption of, any obligations held in the Fund shall be credited to and form a part of the Fund.

      (3) TRANSFERS OF AMOUNTS-

        (A) IN GENERAL- The amounts required to be transferred to the Fund under this subsection shall be transferred at least monthly from the general fund of the Treasury to the Fund on the basis of estimates made by the Secretary of the Treasury.

        (B) ADJUSTMENTS- Proper adjustment shall be made in amounts subsequently transferred to the extent prior estimates were in excess of or less than the amounts required to be transferred.

    (h) EXPENDITURES; AUDITS-

      (1) IN GENERAL- The Secretary of the Treasury shall transfer to the Program from the amounts described in subsections (g)(2)(D) and (i)(3)(A) such sums as the Board determines to be necessary to enable the Program to carry out this section.

      (2) LIMITATION- The Secretary may not transfer to the Program the amounts appropriated to the Fund under subsection (k).

      (3) USE OF FUNDS- Funds transferred to the Program under paragraph (1) shall be used--

        (A) to provide a living allowance for the fellows;

        (B) to defray the costs of transportation of the fellows to the fellowship placement sites;

        (C) to defray the costs of appropriate insurance of the fellows, the Program, and the Board;

        (D) to defray the costs of preservice and midservice education and training of fellows;

        (E) to pay staff described in subsection (i);

        (F) to make end-of-service awards under subsection (f)(3)(D)(iii)(II); and

        (G) for such other purposes as the Board determines to be appropriate to carry out the Program.

      (4) AUDIT BY COMPTROLLER GENERAL-

        (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, reports, files, and other papers, things, or property belonging to or in use by the Program and necessary to facilitate the audit.

        (C) REPORT TO CONGRESS- The Comptroller General shall submit to the appropriate congressional committees a copy of the results of each audit under subparagraph (A).

    (i) STAFF; POWERS OF PROGRAM-

      (1) EXECUTIVE DIRECTOR-

        (A) IN GENERAL- The Board shall appoint an Executive Director of the Program who shall--

          (i) administer the Program; and

          (ii) carry out such other functions consistent with 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 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 such additional personnel as the Executive Director considers necessary to carry out this section.

        (B) COMPENSATION- An individual appointed under subparagraph (A) shall be paid at a rate not to exceed the rate payable for level GS-15 of the General Schedule.

      (3) POWERS-

        (A) GIFTS-

          (i) IN GENERAL- 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.

          (ii) USE OF GIFTS- Gifts, bequests, or devises of money and proceeds from sales of other property received as gifts, bequests, or devises shall--

            (I) be deposited in the Fund; and

            (II) be available for disbursement on order of the Board.

        (B) PROCUREMENT OF TEMPORARY AND INTERMITTENT SERVICES- To carry out this section, the Program may procure temporary and intermittent services in accordance with section 3109(b) of title 5, United States Code, at rates for individuals that do not exceed the daily equivalent of the annual rate of basic pay payable for level GS-15 of the General Schedule.

        (C) CONTRACT AUTHORITY- To carry out this section, the Program may, with the approval of a majority of the members of the Board, contract 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-

          (i) IN GENERAL- Subject to clause (ii), the Program may make such other expenditures as the Program considers necessary to carry out this section.

          (ii) PROHIBITION- The Program may not expend funds to develop new or expanded projects at which fellows may be placed.

    (j) 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 preceding fiscal year that includes--

      (1) an analysis of the evaluations conducted under subsection (f)(4) during the fiscal year; and

      (2) a statement of--

        (A) the total amount of funds attributable to gifts received by the Program in the fiscal year under subsection (i)(3)(A); and

        (B) the total amount of funds described in subparagraph (A) that were expended to carry out the Program in the fiscal year.

    (k) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this section $18,000,000.

    (l) EFFECTIVE DATE- This section takes effect on October 1, 2002.

SEC. 463. NUTRITION INFORMATION AND AWARENESS PILOT PROGRAM.

    (a) ESTABLISHMENT- The Secretary of Agriculture may establish, in not more than 15 States, a pilot program to increase the domestic consumption of fresh fruits and vegetables.

    (b) PURPOSE- The purpose of the program shall be to provide funds to States to assist eligible public and private sector entities with cost-share assistance to carry out demonstration projects--

      (1) to increase fruit and vegetable consumption; and

      (2) to convey related health promotion messages.

    (c) PRIORITY- To the maximum extent practicable, the Secretary shall--

      (1) establish the program in States in which the production of fruits or vegetables is a significant industry, as determined by the Secretary; and

      (2) base the program on strategic initiatives, including--

        (A) health promotion and education interventions;

        (B) public service and paid advertising or marketing activities;

        (C) health promotion campaigns relating to locally grown fruits and vegetables; and

        (D) social marketing campaigns.

    (d) PARTICIPANT ELIGIBILITY- 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 by the State under the program--

      (1) experience in carrying out similar projects or activities;

      (2) innovation; and

      (3) the ability of the State--

        (A) to conduct marketing campaigns for, promote, and track increases in levels of, produce consumption; and

        (B) to optimize the availability of produce through distribution of produce.

    (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) USE OF FUNDS- Funds made available to carry out this section shall not be made available to any foreign for-profit corporation.

    (g) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this section $25,000,000 for each of fiscal years 2002 through 2006.

SEC. 464. EFFECTIVE DATE.

    Except as otherwise provided in this title, the amendments made by this title take effect on September 1, 2002, except that a State agency may, at the option of the State agency, elect not to implement any or all of the amendments until October 1, 2002.

TITLE V--CREDIT

Subtitle A--Farm Ownership Loans

SEC. 501. 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. 502. 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, during a fiscal year, a short-term, temporary bridge loan made by a commercial or cooperative lender to a beginning 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 beginning 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. 503. LIMITATIONS ON AMOUNT OF FARM OWNERSHIP LOANS.

    Section 305 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1925) is amended by striking subsection (a) and inserting the following:

    ‘(a) IN GENERAL- The Secretary shall not make or insure a loan under section 302, 303, 304, 310D, or 310E that would cause the unpaid indebtedness under those sections of any 1 borrower to exceed the lesser of--

      ‘(1) the value of the farm or other security; or

      ‘(2)(A) in the case of a loan made by the Secretary--

        ‘(i) to a beginning farmer or rancher, $250,000, as adjusted (beginning with fiscal year 2003) by the inflation percentage applicable to the fiscal year in which the loan is made; or

        ‘(ii) to a borrower other than a beginning farmer or rancher, $200,000; or

      ‘(B) in the case of a loan guaranteed by the Secretary, $700,000, as--

        ‘(i) adjusted (beginning with fiscal year 2000) by the inflation percentage applicable to the fiscal year in which the loan is guaranteed; and

        ‘(ii) reduced by the amount of any unpaid indebtedness of the borrower on loans under subtitle B that are guaranteed by the Secretary.’.

SEC. 504. JOINT FINANCING ARRANGEMENTS.

    Section 307(a)(3)(D) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1927(a)(3)(D)) is amended--

      (1) by striking ‘If’ and inserting the following:

          ‘(i) IN GENERAL- Subject to clause (ii), if’; and

      (2) by adding at the end the following:

          ‘(ii) BEGINNING FARMERS AND RANCHERS- The interest rate charged a beginning farmer or rancher for a loan described in clause (i) shall be 50 basis points less than the rate charged farmers and ranchers that are not beginning farmers or ranchers.’.

SEC. 505. GUARANTEE PERCENTAGE FOR BEGINNING FARMERS AND RANCHERS.

    Section 309(h)(6) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1929(h)(6)) is amended by striking ‘GUARANTEED UP’ and all that follows through ‘more than’ and inserting ‘GUARANTEED AT 95 PERCENT- The Secretary shall guarantee’.

SEC. 506. 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. 507. 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 ‘20 years’; and

      (2) in subsection (c)(3)(B), by striking ‘10-year’ and inserting ‘20-year’.

SEC. 508. 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- Not later than October 1, 2002, the Secretary shall carry out a pilot program in not fewer than 10 geographically dispersed States, as determined by the Secretary, to guarantee up to 5 loans per State in each of fiscal years 2003 through 2006 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- The Secretary shall commence the pilot program on making a determination that 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. 511. DIRECT LOANS.

    Section 311(c)(1)(A) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1941(c)(1)(A)) is amended by striking ‘who has not’ and all that follows through ‘5 years’.

SEC. 512. AMOUNT OF GUARANTEE OF LOANS FOR TRIBAL FARM OPERATIONS; WAIVER OF LIMITATIONS FOR TRIBAL OPERATIONS AND OTHER OPERATIONS.

    (a) AMOUNT OF GUARANTEE OF LOANS FOR TRIBAL OPERATIONS- 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 TRIBAL OPERATIONS- In the case of an operating loan made to a farmer or rancher who is a member of an Indian tribe and whose farm or ranch is within an Indian reservation (as defined in section 335(e)(1)(A)(ii)), the Secretary shall guarantee 95 percent of the loan.’.

    (b) WAIVER OF LIMITATIONS- Section 311(c) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1941(c)) is amended--

      (1) in paragraph (1), by striking ‘paragraph (3)’ and inserting ‘paragraphs (3) and (4)’; and

      (2) by adding at the end the following:

      ‘(4) WAIVERS-

        ‘(A) TRIBAL FARM AND RANCH OPERATIONS- 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 who is a member of an Indian tribe and whose farm or ranch is within an Indian reservation (as defined in section 335(e)(1)(A)(ii)) 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)).’.

Subtitle C--Administrative Provisions

SEC. 521. ELIGIBILITY OF 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), 1961(a)) are amended by striking ‘and joint operations’ each place it appears and inserting ‘joint operations, 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, or limited liability companies’.

SEC. 522. DEBT SETTLEMENT.

    Section 331(b)(4) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981(b)(4)) is amended by striking ‘carried out--’ and all that follows through ‘(B) after’ and inserting ‘carried out after’.

SEC. 523. 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. 524. 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. 525. ANNUAL REVIEW OF BORROWERS.

    Section 333 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1983) is amended by striking paragraph (2) and inserting the following:

      ‘(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. 526. SIMPLIFIED LOAN APPLICATIONS.

    Section 333A(g)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1983a(g)(1)) is amended by striking ‘of loans the principal amount of which is $50,000 or less’ and inserting ‘of farmer program loans the principal amount of which is $100,000 or less’.

SEC. 527. 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’;

      (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).’; and

      (3) in paragraph (3)--

        (A) in subparagraph (A), by striking ‘subparagraph (B)’ and inserting ‘subparagraphs (B) and (C)’; and

        (B) by adding at the end the following:

        ‘(C) OFFER TO SELL OR GRANT FOR FARMLAND PRESERVATION- For the purpose of farmland preservation, the Secretary shall--

          ‘(i) in consultation with the State Conservationist of each State in which inventory property is located, identify each parcel of inventory property in the State that should be preserved for agricultural use; and

          ‘(ii) offer to sell or grant an easement, restriction, development right, or similar legal right to each parcel identified under clause (i) to a State, a political subdivision of a State, or a private nonprofit organization separately from the underlying fee or other rights to the property owned by the United States.’.

SEC. 528. 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) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1991(a)(12)) is amended by striking subparagraph (B) and inserting the following:

        ‘(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. 529. LOAN AUTHORIZATION LEVELS.

    Section 346 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1994) is amended--

      (1) in subsection (b)--

        (A) by striking paragraph (1) and inserting the following:

      ‘(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 $3,750,000,000 for each of fiscal years 2002 through 2006, of which, for each fiscal year--

        ‘(A) $750,000,000 shall be for direct loans, of which--

          ‘(i) $200,000,000 shall be for farm ownership loans under subtitle A; and

          ‘(ii) $550,000,000 shall be for operating loans under subtitle B; and

        ‘(B) $3,000,000,000 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) $2,000,000,000 shall be for guarantees of operating loans under subtitle B.’; and

        (B) in paragraph (2)(A)(ii), by striking ‘farmers and ranchers’ and all that follows and inserting ‘farmers and ranchers 35 percent for each of fiscal years 2002 through 2006.’; and

      (2) in subsection (c), by striking the last sentence.

SEC. 530. 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);

      (2) by striking subsection (c) and inserting the following:

    ‘(c) AMOUNT OF INTEREST RATE REDUCTION-

      ‘(1) IN GENERAL- In return for a contract entered into by a lender under subsection (b) for the reduction of the interest rate paid on a loan, the Secretary shall make payments to the lender in an amount equal to not more than 100 percent of the cost of reducing the annual rate of interest payable on the loan, except that such payments shall not exceed the cost of reducing the rate by more than--

        ‘(A) in the case of a borrower other than a beginning farmer or rancher, 3 percent; and

        ‘(B) in the case of a beginning farmer or rancher, 4 percent.

      ‘(2) BEGINNING FARMERS AND RANCHERS- The percentage reduction of the interest rate for which payments are authorized to be made for a beginning farmer or rancher under paragraph (1) shall be 1 percent more than the percentage reduction for farmers and ranchers that are not beginning farmers or ranchers.’; and

      (3) 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 25 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 April 1 of the fiscal year.’.

SEC. 531. OPTIONS FOR SATISFACTION OF OBLIGATION TO PAY RECAPTURE AMOUNT FOR SHARED APPRECIATION AGREEMENTS.

    (a) IN GENERAL- Section 353(e)(7) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2001(e)(7)) is amended--

      (1) in subparagraph (C), by redesignating clauses (i) and (ii) as subclauses (I) and (II), respectively, and adjusting the margins appropriately;

      (2) by redesignating subparagraphs (A) through (C) as clauses (i) through (iii), respectively, and adjusting the margins appropriately;

      (3) by striking the paragraph heading and inserting the following:

      ‘(7) OPTIONS FOR SATISFACTION OF OBLIGATION TO PAY RECAPTURE AMOUNT-

        ‘(A) IN GENERAL- As an alternative to repaying the full recapture amount at the end of the term of the shared appreciation agreement (as determined by the Secretary in accordance with this subsection), a borrower may satisfy the obligation to pay the amount of recapture by--

          ‘(i) financing the recapture payment in accordance with subparagraph (B); or

          ‘(ii) granting the Secretary an agricultural use protection and conservation easement on the property subject to the shared appreciation agreement in accordance with subparagraph (C).

        ‘(B) FINANCING OF RECAPTURE PAYMENT- ’; and

      (4) by adding at the end the following:

        ‘(C) AGRICULTURAL USE PROTECTION AND CONSERVATION EASEMENT-

          ‘(i) IN GENERAL- Subject to clause (iii), the Secretary shall accept an agricultural use protection and conservation easement from the borrower for all of the real security property subject to the shared appreciation agreement in lieu of payment of the recapture amount.

          ‘(ii) TERM- The term of an easement accepted by the Secretary under this subparagraph shall be 25 years.

          ‘(iii) CONDITIONS- The easement shall require that the property subject to the easement shall continue to be used or conserved for agricultural and conservation uses in accordance with sound farming and conservation practices, as determined by the Secretary.

          ‘(iv) REPLACEMENT OF METHOD OF SATISFYING OBLIGATION- A borrower that has begun financing of a recapture payment under subparagraph (B) may replace that financing with an agricultural use protection and conservation easement under this subparagraph.’.

    (b) APPLICABILITY- The amendments made by subsection (a) shall apply to a shared appreciation agreement entered into under section 353(e) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2001(e)) that--

      (1) matures on or after the date of enactment of this Act; or

      (2) matured before the date of enactment of this Act, if--

        (A) the recapture amount was reamortized under section 353(e)(7) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2001(e)(7)) (as in effect on the day before the date of enactment of this Act); or

        (B)(i) the recapture amount had not been paid before the date of enactment of this Act because of 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.

SEC. 532. 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. 533. 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’.

Subtitle D--Farm Credit

SEC. 541. 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. 542. 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. 543. 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) EFFECTIVE DATE- The amendments made by subsection (a) take effect on the date on which Farm Credit System Insurance Corporation premiums are due from insured Farm Credit System banks under section 5.55 of the Farm Credit Act of 1971 (12 U.S.C. 2277a-4) for calendar year 2001.

SEC. 544. BOARD OF DIRECTORS OF THE FEDERAL AGRICULTURAL MORTGAGE CORPORATION.

    Section 8.2(b) of the Farm Credit Act of 1971 (12 U.S.C. 2279aa-2(b)) is amended--

      (1) in paragraph (2)--

        (A) by striking ‘15’ and inserting ‘17’;

        (B) in subparagraph (A), by striking ‘common stock’ and all that follows and inserting ‘Class A voting common stock;’;

        (C) in subparagraph (B), by striking ‘common stock’ and all that follows and inserting ‘Class B voting common stock;’;

        (D) by redesignating subparagraph (C) as subparagraph (D); and

        (E) by inserting after subparagraph (B) the following:

        ‘(C) 2 members shall be elected by holders of Class A voting common stock and Class B voting common stock, 1 of whom shall be the chief executive officer of the Corporation and 1 of whom shall be another executive officer of the Corporation; and’;

      (2) in paragraph (3), by striking ‘(2)(C)’ and inserting ‘(2)(D)’;

      (3) in paragraph (4)--

        (A) in subparagraph (A), by striking ‘(A) or (B)’ and inserting ‘(A), (B), or (C)’; and

        (B) in subparagraph (B), by striking ‘(2)(C)’ and inserting ‘(2)(D)’;

      (4) in paragraph (5)(A)--

        (A) by inserting ‘executive officers of the Corporation or’ after ‘from among persons who are’; and

        (B) by striking ‘such a representative’ and inserting ‘such an executive officer or representative’;

      (5) in paragraph (6)(B), by striking ‘(A) and (B)’ and inserting ‘(A), (B), and (C)’;

      (6) in paragraph (7), by striking ‘8 members’ and inserting ‘Nine members’;

      (7) in paragraph (8)--

        (A) in the paragraph heading, by inserting ‘OR EXECUTIVE OFFICERS OF THE CORPORATION’ after ‘EMPLOYEES’; and

        (B) by inserting ‘or executive officers of the Corporation’ after ‘United States’; and

      (8) by striking paragraph (9) and inserting the following:

      ‘(9) CHAIRPERSON-

        ‘(A) ELECTION- The permanent board shall annually elect a chairperson from among the members of the permanent board.

        ‘(B) TERM- The term of the chairperson shall coincide with the term served by elected members of the permanent board under paragraph (6)(B).’.

Subtitle E--General Provisions

SEC. 551. INAPPLICABILITY OF FINALITY RULE.

    Section 281(a)(1) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 7001(a)(1)) is amended--

      (1) by striking ‘This subsection’ and inserting the following:

        ‘(A) IN GENERAL- Except as provided in subparagraph (B), this subsection’; and

      (2) by adding at the end the following:

        ‘(B) AGRICULTURAL CREDIT DECISIONS- This subsection shall not apply with respect to an agricultural credit decision made by such a State, county, or area committee, or employee of such a committee, under the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.).’.

SEC. 552. 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,’.

    (d) Section 360(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2006b(a)) is amended by striking ‘established pursuant to section 332’.

SEC. 553. EFFECTIVE DATE.

    (a) IN GENERAL- Except as provided in subsection (b) and section 543(b), this title and the amendments made by this title take effect on October 1, 2001.

    (b) BOARD OF DIRECTORS OF THE FEDERAL AGRICULTURAL MORTGAGE CORPORATION- The amendments made by section 544 take effect on the date of enactment of this Act.

TITLE VI--RURAL DEVELOPMENT

Subtitle A--Empowerment of Rural America

SEC. 601. NATIONAL RURAL COOPERATIVE AND BUSINESS EQUITY FUND.

    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--National Rural Cooperative and Business Equity Fund

‘SEC. 383A. SHORT TITLE.

    ‘This subtitle may be cited as the ‘National Rural Cooperative and Business Equity Fund Act’.

‘SEC. 383B. PURPOSE.

    ‘The purpose of this subtitle is to revitalize rural communities and enhance farm income through sustainable rural business development by providing Federal funds and credit enhancements to a private equity fund in order to encourage investments by institutional and noninstitutional investors for the benefit of rural America.

‘SEC. 383C. DEFINITIONS.

    ‘In this subtitle:

      ‘(1) AUTHORIZED PRIVATE INVESTOR- The term ‘authorized private investor’ means an individual, legal entity, or affiliate or subsidiary of an individual or legal entity that--

        ‘(A) is eligible to receive a loan guarantee under this title;

        ‘(B) is eligible to receive a loan guarantee under the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.);

        ‘(C) is created under the National Consumer Cooperative Bank Act (12 U.S.C. 3011 et seq.);

        ‘(D) is an insured depository institution subject to section 383E(b)(2);

        ‘(E) is a Farm Credit System institution described in section 1.2(a) of the Farm Credit Act of 1971 (12 U.S.C. 2002(a)); or

        ‘(F) is determined by the Board to be an appropriate investor in the Fund.

      ‘(2) BOARD- The term ‘Board’ means the board of directors of the Fund established under section 383G.

      ‘(3) FUND- The term ‘Fund’ means the National Rural Cooperative and Business Equity Fund established under section 383D.

      ‘(4) GROUP OF SIMILAR AUTHORIZED PRIVATE INVESTORS- The term ‘group of similar investors’ means any 1 of the following:

        ‘(A) Insured depository institutions with total assets of more than $250,000,000.

        ‘(B) Insured depository institutions with total assets equal to or less than $250,000,000.

        ‘(C) Farm Credit System institutions described in section 1.2(a) of the Farm Credit Act of 1971 (12 U.S.C. 2002(a)).

        ‘(D) Cooperative financial institutions (other than Farm Credit System institutions).

        ‘(E) Private investors, other than those described in subparagraphs (A) through (D), authorized by the Secretary.

        ‘(F) Other nonprofit organizations, including credit unions.

      ‘(5) INSURED DEPOSITORY INSTITUTION- The term ‘insured depository institution’ means any bank or savings association the deposits of which are insured under the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.).

      ‘(6) RURAL BUSINESS- The term ‘rural business’ means a rural cooperative, a value-added agricultural enterprise, or any other business located or locating in a rural area.

‘SEC. 383D. ESTABLISHMENT.

    ‘(a) AUTHORITY-

      ‘(1) IN GENERAL- On certification by the Secretary that, to the maximum extent practicable, the parties proposing to establish a fund provide a broad representation of all of the groups of similar authorized private investors described in subparagraphs (A) through (F) of section 383C(4), the parties may establish a non-Federal entity under State law to purchase shares of, and manage a fund to be known as the ‘National Rural Cooperative and Business Equity Fund’, to generate and provide equity capital to rural businesses.

      ‘(2) OWNERSHIP-

        ‘(A) IN GENERAL- To the maximum extent practicable, equity ownership of the Fund shall be distributed among authorized private investors representing all of the groups of similar authorized private investors described in subparagraphs (A) through (F) of section 383C(4).

        ‘(B) EXCLUSION OF GROUPS- No group of authorized private investors shall be excluded from equity ownership of the Fund during any period during which the Fund is in existence if an authorized private investor representative of the group is able and willing to invest in the Fund.

    ‘(b) PURPOSES- The purposes of the Fund shall be--

      ‘(1) to strengthen the economy of rural areas;

      ‘(2) to further sustainable rural business development;

      ‘(3) to encourage--

        ‘(A) start-up rural businesses;

        ‘(B) increased opportunities for small and minority-owned rural businesses; and

        ‘(C) the formation of new rural businesses;

      ‘(4) to enhance rural employment opportunities;

      ‘(5) to provide equity capital to rural businesses, many of which have difficulty obtaining equity capital; and

      ‘(6) to leverage non-Federal funds for rural businesses.

    ‘(c) ARTICLES OF INCORPORATION AND BYLAWS- The articles of incorporation and bylaws of the Fund shall set forth purposes of the Fund that are consistent with the purposes described in subsection (b).

‘SEC. 383E. INVESTMENT IN THE FUND.

    ‘(a) IN GENERAL- Of the funds made available under section 383H, the Secretary shall--

      ‘(1) subject to subsection (b)(1), make available to the Fund $150,000,000;

      ‘(2) subject to subsection (c), guarantee 50 percent of each investment made by an authorized private investor in the Fund; and

      ‘(3) subject to subsection (d), guarantee the repayment of principal of, and accrued interest on, debentures issued by the Fund to authorized private investors.

    ‘(b) PRIVATE INVESTMENT-

      ‘(1) MATCHING REQUIREMENT- Under subsection (a)(1), the Secretary shall make an amount available to the Fund only after an equal amount has been invested in the Fund by authorized private investors in accordance with this subtitle and the terms and conditions set forth in the bylaws of the Fund.

      ‘(2) INSURED DEPOSITORY INSTITUTIONS-

        ‘(A) IN GENERAL- Subject to subparagraphs (B) and (C)--

          ‘(i) an insured depository institution may be an authorized private investor in the Fund; and

          ‘(ii) an investment in the Fund may be considered to be part of the record of an institution in meeting the credit needs of the community in which the institution is located under any applicable Federal law.

        ‘(B) INVESTMENT LIMIT- The total investment in the Fund of an insured depository institution shall not exceed 5 percent of the capital and surplus of the institution.

        ‘(C) REGULATORY AUTHORITY- An appropriate Federal banking agency may, by regulation or order, impose on any insured depository institution investing in the Fund, any safeguard, limitation, or condition (including an investment limit that is lower than the investment limit under subparagraph (B)) that the Federal banking agency considers to be appropriate to ensure that the institution operates--

          ‘(i) in a financially sound manner; and

          ‘(ii) in compliance with all applicable law.

    ‘(c) GUARANTEE OF PRIVATE INVESTMENTS-

      ‘(1) IN GENERAL- The Secretary shall guarantee, under terms and conditions determined by the Secretary, 50 percent of any loss of the principal of an investment made in the Fund by an authorized private investor.

      ‘(2) MAXIMUM TOTAL GUARANTEE- The aggregate potential liability of the Secretary with respect to all guarantees under paragraph (1) shall not apply to more than $300,000,000 in private investments in the Fund.

      ‘(3) REDEMPTION OF GUARANTEE-

        ‘(A) DATE- An authorized private investor in the Fund may redeem a guarantee under paragraph (1), with respect to the total investments in the Fund and the total losses of the authorized private investor as of the date of redemption--

          ‘(i) on the date that is 5 years after the date of the initial investment by the authorized private investor; or

          ‘(ii) annually thereafter.

        ‘(B) EFFECT OF REDEMPTION- On redemption of a guarantee under subparagraph (A)--

          ‘(i) the shares in the Fund of the authorized private investor shall be redeemed; and

          ‘(ii) the authorized private investor shall be prohibited from making any future investment in the Fund.

    ‘(d) DEBT SECURITIES-

      ‘(1) IN GENERAL- The Fund may, at the discretion of the Board, generate additional capital through--

        ‘(A) the issuance of debt securities; and

        ‘(B) other means determined to be appropriate by the Board.

      ‘(2) GUARANTEE OF DEBT BY SECRETARY-

        ‘(A) IN GENERAL- The Secretary shall guarantee 100 percent of the principal of, and accrued interest on, debentures issued by the Fund that are approved by the Secretary.

        ‘(B) MAXIMUM DEBT GUARANTEED BY SECRETARY- The outstanding value of debentures issued by the Fund and guaranteed by the Secretary shall not exceed the lesser of--

          ‘(i) the amount equal to twice the value of the assets held by the Fund; or

          ‘(ii) $500,000,000.

        ‘(C) RECAPTURE OF GUARANTEE PAYMENTS- If the Secretary makes a payment on a debt security issued by the Fund as a result of a guarantee of the Secretary under this paragraph, the Secretary shall have priority over other creditors for repayment of the debt security.

      ‘(3) AUTHORIZED PRIVATE INVESTORS- An authorized private investor may purchase debt securities issued by the Fund.

‘SEC. 383F. INVESTMENTS AND OTHER ACTIVITIES OF THE FUND.

    ‘(a) INVESTMENTS-

      ‘(1) IN GENERAL-

        ‘(A) TYPES- Subject to subparagraphs (B) and (C), the Fund may--

          ‘(i) make equity investments in a rural business that meets--

            ‘(I) the requirements of paragraph (6); and

            ‘(II) such other requirements as the Board may establish; and

          ‘(ii) extend credit to the rural business in--

            ‘(I) the form of mezzanine debt or subordinated debt; or

            ‘(II) any other form of quasi-equity.

        ‘(B) LIMITATIONS ON INVESTMENTS-

          ‘(i) TOTAL INVESTMENTS BY A SINGLE RURAL BUSINESS- Subject to clause (ii), investment by the Fund in a single rural business shall not exceed the greater of--

            ‘(I) an amount equal to 7 percent of the capital of the Fund; or

            ‘(II) $2,000,000.

          ‘(ii) WAIVER- The Secretary may waive the limitation in clause (i) in any case in which an investment exceeding the limits specified in clause (i) is necessary to preserve prior investments in the rural business.

          ‘(iii) TOTAL NONEQUITY INVESTMENTS- Except in the case of a project to assist a rural cooperative, the total amount of nonequity investments described in subparagraph (A)(ii) that may be provided by the Fund shall not exceed 20 percent of the total investments of the Fund in the project.

        ‘(C) LIMITATION- Notwithstanding subparagraph (B), the amount of any investment by the Fund in a rural business shall not exceed the aggregate amount invested in like securities by other private entities in that rural business.

      ‘(2) PROCEDURES- The Fund shall implement procedures to ensure that--

        ‘(A) the financing arrangements of the Fund meet the Fund’s primary focus of providing equity capital; and

        ‘(B) the Fund does not compete with conventional sources of credit.

      ‘(3) DIVERSITY OF PROJECTS- The Fund--

        ‘(A) shall seek to make equity investments in a variety of viable projects, with a significant share of investments--

          ‘(i) in smaller enterprises (as defined in section 384A) in rural communities of diverse sizes; and

          ‘(ii) in cooperative and noncooperative enterprises; and

        ‘(B) shall be managed in a manner that diversifies the risks to the Fund among a variety of projects.

      ‘(4) LIMITATION ON RURAL BUSINESSES ASSISTED- The Fund shall not invest in any rural business that is primarily retail in nature (as determined by the Board), other than a purchasing cooperative.

      ‘(5) INTEREST RATE LIMITATIONS- Returns on investments in and by the Fund and returns on the extension of credit by participants in projects assisted by the Fund, shall not be subject to any State or Federal law establishing a maximum allowable interest rate.

      ‘(6) REQUIREMENTS FOR RECIPIENTS-

        ‘(A) OTHER INVESTMENTS- Any recipient of amounts from the Fund shall make or obtain a significant investment from a source of capital other than the Fund.

        ‘(B) SPONSORSHIP- To be considered for an equity investment from the Fund, a rural business investment project shall be sponsored by a regional, State, or local sponsoring or endorsing organization such as--

          ‘(i) a financial institution;

          ‘(ii) a development organization; or

          ‘(iii) any other established entity engaging or assisting in rural business development, including a rural cooperative.

    ‘(b) TECHNICAL ASSISTANCE- The Fund, under terms and conditions established by the Board, shall use not less than 2 percent of capital provided by the Federal Government to provide technical assistance to rural businesses seeking an equity investment from the Fund.

    ‘(c) ANNUAL AUDIT-

      ‘(1) IN GENERAL- The Board shall authorize an annual audit of the financial statements of the Fund by a nationally recognized auditing firm using generally accepted accounting principles.

      ‘(2) AVAILABILITY OF AUDIT RESULTS- The results of the audit required by paragraph (1) shall be made available to investors in the Fund.

    ‘(d) ANNUAL REPORT- The Board shall prepare and make available to the public an annual report that--

      ‘(1) describes the projects funded with amounts from the Fund;

      ‘(2) specifies the recipients of amounts from the Fund;

      ‘(3) specifies the coinvestors in all projects that receive amounts from the Fund; and

      ‘(4) meets the reporting requirements, if any, of the State under the law of which the Fund is established.

    ‘(e) OTHER AUTHORITIES-

      ‘(1) IN GENERAL- The Board may exercise such other authorities as are necessary to carry out this subtitle.

      ‘(2) OVERSIGHT- The Secretary shall enter in to a contract with the Administrator of the Small Business Administration under which the Administrator of the Small Business Administration shall be responsible for the routine duties of the Secretary in regard to the Fund.

‘SEC. 383G. GOVERNANCE OF THE FUND.

    ‘(a) IN GENERAL- The Fund shall be governed by a board of directors that represents all of the authorized private investors in the Fund and the Federal Government and that consists of--

      ‘(1) a designee of the Secretary;

      ‘(2) 2 members who are appointed by the Secretary and are not Federal employees, including--

        ‘(A) 1 member with expertise in venture capital investment; and

        ‘(B) 1 member with expertise in cooperative development;

      ‘(3) 8 members who are elected by the authorized private investors with investments in the Fund; and

      ‘(4) 1 member who is appointed by the Board and who is a community banker from an insured depository institution that has--

        ‘(A) total assets equal to or less than $250,000,000; and

        ‘(B) an investment in the Fund.

    ‘(b) LIMITATION ON VOTING CONTROL- No individual investor or group of authorized investors may control more than 25 percent of the votes on the Board.

‘SEC. 383H. AUTHORIZATION OF APPROPRIATIONS.

    ‘There are authorized to be appropriated such sums as are necessary to carry out this subtitle.’.

SEC. 602. RURAL BUSINESS INVESTMENT PROGRAM.

    The Consolidated Farm and Rural Development Act (as amended by section 601) 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(c).

      ‘(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(d), 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) the paid-in capital and paid-in surplus of a corporate Rural Business Investment Company, the contributed capital of the partners of a partnership Rural Business Investment Company, or 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 unfunded commitments may be counted as private capital for purposes of approval by the Secretary of any request for leverage, but 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) 50 percent of funds from the National Rural Cooperative and Business Equity Fund;

            ‘(II) 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;

            ‘(III) funds invested by an employee welfare benefit plan or pension plan; and

            ‘(IV) 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(d); 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(d) 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 businesses.

    ‘(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, when 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) ISSUANCE OF LICENSE-

      ‘(1) SUBMISSION OF APPLICATION- Each applicant for a license to operate as a Rural Business Investment Company under this subtitle shall submit to the Secretary an application, in a form and including such documentation as may be prescribed by the Secretary.

      ‘(2) PROCEDURES-

        ‘(A) STATUS- Not later than 90 days after the initial receipt by the Secretary of an application under this subsection, the Secretary shall provide the applicant with a written report describing the status of the application and any requirements remaining for completion of the application.

        ‘(B) APPROVAL OR DISAPPROVAL- Within a reasonable time after receiving a completed application submitted in accordance with this subsection and in accordance with such requirements as the Secretary may prescribe by regulation, the Secretary shall--

          ‘(i) approve the application and issue a license for the operation to the applicant, if the requirements of this section are satisfied; or

          ‘(ii) disapprove the application and notify the applicant in writing of the disapproval.

      ‘(3) MATTERS CONSIDERED- In reviewing and processing any application under this subsection, the Secretary--

        ‘(A) shall determine whether--

          ‘(i) the applicant meets the requirements of subsection (d); and

          ‘(ii) the management of the applicant is qualified and has the knowledge, experience, and capability necessary to comply with this subtitle;

        ‘(B) shall take into consideration--

          ‘(i) the need for and availability of financing for rural business concerns in the geographic area in which the applicant is to commence business;

          ‘(ii) the general business reputation of the owners and management of the applicant; and

          ‘(iii) the probability of successful operations of the applicant, including adequate profitability and financial soundness; and

        ‘(C) shall not take into consideration any projected shortage or unavailability of grant funds or leverage.

    ‘(d) APPROVAL; DESIGNATION-

      ‘(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 designate 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 less 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 reasonably projects profitable operations and that 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 other 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 100,000 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 incurred 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 civilly liable in 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 civilly liable in 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.

    ‘Notwithstanding any other provision of law, the Secretary shall enter into an interagency agreement with the Administrator of the Small Business Administration to carry out, on behalf of the Secretary, the day-to-day management and operation of the program authorized by this subtitle.

‘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- Not later than 30 days after the date of enactment of this Act, out of any funds in the Treasury not otherwise appropriated, the Secretary of the Treasury shall transfer to the Secretary of Agriculture--

      ‘(1) such sums as may be necessary for the cost of guaranteeing $350,000,000 of debentures under this subtitle; and

      ‘(2) $50,000,000 to make grants under this subtitle.

    ‘(b) RECEIPT AND ACCEPTANCE- The Secretary shall be entitled to receive, shall accept, and shall use to carry out this section the funds transferred under subsection (a), without further appropriation.

    ‘(c) AVAILABILITY OF FUNDS- Funds transferred under subsection (a) shall remain available until expended.’.

SEC. 603. FULL 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, loan guarantee, 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) ACCOUNT- There is established in the Treasury of the United States an account to be known as the ‘Rural America Infrastructure Development Account’ (referred to in this section as the ‘Account’) to fund rural development loans, loan guarantees, and grants described in subsection (d) that are pending on the date of enactment of this Act.

    (c) FUNDING-

      (1) IN GENERAL- Not later than 30 days after the date of enactment of this Act, out of any funds in the Treasury not otherwise appropriated, the Secretary of the Treasury shall transfer to the Secretary of Agriculture such sums as are necessary to carry out this section, to remain available until expended.

      (2) RECEIPT AND ACCEPTANCE- The Secretary shall be entitled to receive, shall accept, and shall use to carry out this section the funds transferred under paragraph (1), without further appropriation.

    (d) USE OF FUNDS-

      (1) ELIGIBLE PROGRAMS- Subject to paragraph (2), the Secretary shall use the funds in the Account to provide funds for applications that are pending on the date of enactment of this Act for--

        (A) community facility direct loans under section 306(a)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)(1));

        (B) community facility grants under paragraph (19), (20), or (21) of section 306(a) of that Act (7 U.S.C. 1926(a));

        (C) water or waste disposal grants or direct loans under paragraph (1) or (2) of section 306(a) of that Act (7 U.S.C. 1926(a));

        (D) rural water or wastewater technical assistance and training grants under section 306(a)(14) of that Act (7 U.S.C. 1926(a)(14));

        (E) emergency community water assistance grants under section 306A of that Act (7 U.S.C. 1926a);

        (F) business and industry guaranteed loans authorized under section 310B(a)(1)(A) of that Act (7 U.S.C. 1932(a)(1)(A)); and

        (G) solid waste management grants under section 310B(b) of that Act (7 U.S.C. 1932(b)).

      (2) LIMITATIONS-

        (A) APPROPRIATED AMOUNTS- Funds in the Account shall be available to the Secretary to provide funds for pending applications for loans, loan guarantees, and grants described in paragraph (1) only to the extent that funds for the loans, loan guarantees, and grants appropriated in the annual appropriations Act for fiscal year 2002 have been exhausted.

        (B) PROGRAM REQUIREMENTS- The Secretary may use the Account to provide funds for a pending application for a loan, loan guarantee, or grant described in paragraph (1) only if the Secretary processes, reviews, and approves the application in accordance with regulations in effect on the date of enactment of this Act.

SEC. 604. RURAL ENDOWMENT PROGRAM.

    (a) IN GENERAL- The Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.) (as amended by section 602) is amended by adding at the end the following:

‘Subtitle I--Rural Endowment Program

‘SEC. 385A. PURPOSE.

    ‘The purpose of this subtitle is to provide rural communities with technical and financial assistance to implement comprehensive community development strategies to reduce the economic and social distress resulting from poverty, high unemployment, outmigration, plant closings, agricultural downturn, declines in the natural resource-based economy, or environmental degradation.

‘SEC. 385B. DEFINITIONS.

    ‘In this subtitle:

      ‘(1) COMPREHENSIVE COMMUNITY DEVELOPMENT STRATEGY- The term ‘comprehensive community development strategy’ means a community development strategy described in section 385C(e).

      ‘(2) ELIGIBLE RURAL AREA-

        ‘(A) IN GENERAL- The term ‘eligible rural area’ means an area with a population of 25,000 inhabitants or less, as determined by the Secretary using the most recent decennial census.

        ‘(B) EXCLUSIONS- The term ‘eligible rural area’ does not include--

          ‘(i) any area designated by the Secretary as a rural empowerment zone or rural enterprise community; or

          ‘(ii) an urbanized area immediately adjacent to an incorporated city or town with a population of more than 25,000 inhabitants.

      ‘(3) ENDOWMENT FUND- The term ‘endowment fund’ means a long-term fund that an approved program entity is required to establish under section 385C(f)(3).

      ‘(4) PERFORMANCE-BASED BENCHMARKS- The term ‘performance-based benchmarks’ means a set of annualized goals and tasks established by a recipient of a grant under the Program, in collaboration with the Secretary, for the purpose of measuring performance in meeting the comprehensive community development strategy of the recipient.

      ‘(5) PROGRAM- The term ‘Program’ means the Rural Endowment Program established under section 385C(a).

      ‘(6) PROGRAM ENTITY- The term ‘program entity’ means--

        ‘(A) a private nonprofit community-based development organization;

        ‘(B) a unit of local government (including a multijurisdictional unit of local government);

        ‘(C) an Indian tribe (as defined in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b));

        ‘(D) a consortium comprised of an organization described in subparagraph (A) and a unit of local government; or

        ‘(E) a consortium of entities specified in subparagraphs (A) through (D);

      that serves an eligible rural area.

      ‘(7) PROGRAM-RELATED INVESTMENT- The term ‘program-related investment’ means--

        ‘(A) a loan, loan guarantee, grant, payment of a technical fee, or other expenditure provided for an affordable housing, community facility, small business, environmental improvement, or other community development project that is part of a comprehensive community development strategy; and

        ‘(B) support services relating to a project described in subparagraph (A).

‘SEC. 385C. RURAL ENDOWMENT PROGRAM.

    ‘(a) ESTABLISHMENT-

      ‘(1) IN GENERAL- The Secretary may establish a program, to be known as the ‘Rural Endowment Program’, to provide approved program entities with assistance in developing and implementing comprehensive community development strategies for eligible rural areas.

      ‘(2) PURPOSES- The purposes of the Program are--

        ‘(A) to enhance the ability of an eligible rural area to engage in comprehensive community development;

        ‘(B) to leverage private and public resources for the benefit of community development efforts in eligible rural areas;

        ‘(C) to make available staff of Federal agencies to directly assist the community development efforts of an approved program entity or eligible rural area; and

        ‘(D) to strengthen the asset base of an eligible rural area to further long-term, ongoing community development.

    ‘(b) APPLICATIONS-

      ‘(1) IN GENERAL- To receive an endowment grant under the Program, the eligible entity shall submit an application at such time, in such form, and containing such information as the Secretary may require.

      ‘(2) REGIONAL APPLICATIONS-

        ‘(A) IN GENERAL- Where appropriate, the Secretary shall encourage regional applications from program entities serving more than 1 eligible rural area.

        ‘(B) CRITERIA FOR APPLICATIONS- To be eligible for an endowment grant for a regional application, the program entities that submit the application shall demonstrate that--

          ‘(i) a comprehensive community development strategy for the eligible rural areas is best accomplished through a regional approach; and

          ‘(ii) the combined population of the eligible rural areas covered by the comprehensive community development strategy is 75,000 inhabitants or less.

        ‘(C) WAIVER FOR INDIAN TRIBES- The Secretary may, at the request of an Indian tribe, waive the requirement under subparagraph (B)(ii) with respect to an application submitted by the Indian tribe for multiple eligible rural areas under the jurisdiction of the Indian tribe.

        ‘(D) AMOUNT OF ENDOWMENT GRANTS- For the purpose of subsection (f)(2), 2 or more program entities that submit a regional application shall be considered to be a single program entity.

      ‘(3) PREFERENCE- The Secretary shall give preference to a joint application submitted by a private, nonprofit community development corporation and a unit of local government or Indian tribe.

    ‘(c) ENTITY APPROVAL- The Secretary shall approve a program entity to receive grants under the Program, if the program entity meets criteria established by the Secretary, including the following:

      ‘(1) DISTRESSED RURAL AREA- The program entity shall serve a rural area that suffers from economic or social distress resulting from poverty, high unemployment, outmigration, plant closings, agricultural downturn, declines in the natural resource-based economy, or environmental degradation.

      ‘(2) CAPACITY TO IMPLEMENT STRATEGY- The program entity shall demonstrate the capacity to implement a comprehensive community development strategy.

      ‘(3) GOALS- The goals described in the application submitted under subsection (b) shall be consistent with this section.

      ‘(4) PARTICIPATION PROCESS- The program entity shall demonstrate the ability to convene and maintain a multi-stakeholder, community-based participation process.

    ‘(d) PLANNING GRANTS TO CONDITIONALLY APPROVED PROGRAM ENTITIES-

      ‘(1) IN GENERAL- The Secretary may award supplemental grants to approved program entities to assist the approved program entities in the development of a comprehensive community development strategy under subsection (e).

      ‘(2) ELIGIBILITY FOR SUPPLEMENTAL GRANTS- In determining whether to award a supplemental grant to an approved program entity, the Secretary shall consider the economic need of the approved program entity.

      ‘(3) LIMITATIONS ON AMOUNT OF GRANTS- Under this subsection, an approved program entity may receive a supplemental grant in an amount of--

        ‘(A) not more than $100,000; or

        ‘(B) in the case of a regional application approved under a waiver by the Secretary under subsection (b)(2)(C), not more than $200,000.

    ‘(e) ENDOWMENT GRANT AWARD-

      ‘(1) IN GENERAL- To be eligible for an endowment grant under the Program, an approved program entity shall develop, and obtain the approval of the Secretary for, a comprehensive community development strategy that--

        ‘(A) is designed to reduce economic or social distress resulting from poverty, high unemployment, outmigration, plant closings, agricultural downturn, declines in the natural resource-based economy, or environmental degradation;

        ‘(B) addresses a broad range of the development needs of a community, including economic, social, and environmental needs, for a period of not less than 10 years;

        ‘(C) is developed with input from a broad array of local governments and business, civic, and community organizations;

        ‘(D) specifies measurable performance-based outcomes for all activities; and

        ‘(E) includes a financial plan for achieving the outcomes and activities of the comprehensive community development strategy that identifies sources for, or a plan to meet, the requirement for a non-Federal share under subsection (f)(4)(B).

      ‘(2) FINAL APPROVAL-

        ‘(A) IN GENERAL- An approved program entity shall receive final approval if the Secretary determines that--

          ‘(i) the comprehensive community development strategy of the approved program entity meets the requirements of this section;

          ‘(ii) the management and organizational structure of the approved program entity is sufficient to oversee fund and development activities;

          ‘(iii) the approved program entity has established an endowment fund; and

          ‘(iv) the approved program entity will be able to provide the non-Federal share required under subsection (f)(4)(B).

        ‘(B) CONDITIONS- As part of the final approval, the approved program entity shall agree to--

          ‘(i) achieve, to the maximum extent practicable, performance-based benchmarks; and

          ‘(ii) comply with the terms of the comprehensive community development strategy for a period of not less than 10 years.

    ‘(f) ENDOWMENT GRANTS-

      ‘(1) IN GENERAL- Under the Program, the Secretary may make endowment grants to approved program entities with final approval to implement an approved comprehensive community development strategy.

      ‘(2) AMOUNT OF GRANTS- An endowment grant to an approved program entity shall be in an amount of not more than $6,000,000, as determined by the Secretary based on--

        ‘(A) the size of the population of the eligible rural area for which the endowment grant is to be used;

        ‘(B) the size of the eligible rural area for which the endowment grant is to be used;

        ‘(C) the extent of the comprehensive community development strategy to be implemented using the endowment grant award; and

        ‘(D) the extent to which the community suffers from economic or social distress resulting from--

          ‘(i) poverty;

          ‘(ii) high unemployment;

          ‘(iii) outmigration;

          ‘(iv) plant closings;

          ‘(v) agricultural downturn;

          ‘(vi) declines in the natural resource-based economy; or

          ‘(vii) environmental degradation.

      ‘(3) ENDOWMENT FUNDS-

        ‘(A) ESTABLISHMENT- On notification from the Secretary that the program entity has been approved under subsection (c), the approved program entity shall establish an endowment fund.

        ‘(B) FUNDING OF ENDOWMENT- Federal funds provided in the form of an endowment grant under the Program shall--

          ‘(i) be deposited in the endowment fund;

          ‘(ii) be the sole property of the approved program entity;

          ‘(iii) be used in a manner consistent with this subtitle; and

          ‘(iv) be subject to oversight by the Secretary for a period of not more than 10 years.

        ‘(C) INTEREST- Interest earned on Federal funds in the endowment fund shall be--

          ‘(i) retained by the grantee; and

          ‘(ii) treated as Federal funds are treated under subparagraph (B).

        ‘(D) LIMITATION- The Secretary shall promulgate regulations on matching funds and returns on program-related investments only to the extent that such funds or proceeds are used in a manner consistent with this subtitle.

      ‘(4) CONDITIONS-

        ‘(A) DISBURSEMENT-

          ‘(i) IN GENERAL- Each endowment grant award shall be disbursed during a period not to exceed 5 years beginning during the fiscal year containing the date of final approval of the approved program entity under subsection (e)(3).

          ‘(ii) MANNER OF DISBURSEMENT- Subject to subparagraph (B), the Secretary may disburse a grant award in 1 lump sum or in incremental disbursements made each fiscal year.

          ‘(iii) INCREMENTAL DISBURSEMENTS- If the Secretary elects to make incremental disbursements, for each fiscal year after the initial disbursement, the Secretary shall make a disbursement under clause (i) only if the approved program entity--

            ‘(I) has met the performance-based benchmarks of the approved program entity for the preceding fiscal year; and

            ‘(II) has provided the non-Federal share required for the preceding fiscal year under subparagraph (B).

          ‘(iv) ADVANCE DISBURSEMENTS- The Secretary may make disbursements under this paragraph notwithstanding any provision of law limiting grant disbursements to amounts necessary to cover expected expenses on a term basis.

        ‘(B) NON-FEDERAL SHARE-

          ‘(i) IN GENERAL- Except as provided in clause (ii), for each disbursement under subparagraph (A), the Secretary shall require the approved program entity to provide a non-Federal share in an amount equal to 50 percent of the amount of funds received by the approved program entity under the disbursement.

          ‘(ii) LOWER NON-FEDERAL SHARE- In the case of an approved program entity that serves a small, poor rural area or poor Indian tribe (as determined by the Secretary), the Secretary may--

            ‘(I) reduce the non-Federal share to not less than 20 percent; and

            ‘(II) allow the non-Federal share to be provided in the form of in-kind contributions.

          ‘(iii) BINDING COMMITMENTS; PLAN- For the purpose of meeting the non-Federal share requirement with respect to the first disbursement of an endowment grant award to the approved program entity under the Program, an approved program entity shall--

            ‘(I) have, at a minimum, binding commitments to provide the non-Federal share required with respect to the first disbursement of the endowment grant award; and

            ‘(II) if the Secretary is making incremental disbursements of a grant, develop a viable plan for providing the remaining amount of the required non-Federal share.

        ‘(C) LIMITATIONS-

          ‘(i) IN GENERAL- Subject to clause (ii), of each disbursement, an approved program entity shall use--

            ‘(I) not more than 10 percent for administrative costs of carrying out program-related investments;

            ‘(II) not more than 20 percent for the purpose of maintaining a loss reserve account; and

            ‘(III) the remainder for program-related investments contained in the comprehensive community development strategy.

          ‘(ii) LOSS RESERVE ACCOUNT- If all disbursed funds available under a grant are expended in accordance with clause (i) and the grant recipient has no expected losses to cover for a fiscal year, the recipient may use funds in the loss reserve account described in clause (i)(II) for program-related investments described in clause (i)(III) for which no reserve for losses is required.

    ‘(g) FEDERAL AGENCY ASSISTANCE- Under the Program, the Secretary shall provide and coordinate technical assistance for grant recipients by designated field staff of Federal agencies.

    ‘(h) PRIVATE TECHNICAL ASSISTANCE-

      ‘(1) IN GENERAL- Under the Program, the Secretary may make grants to qualified intermediaries to provide technical assistance and capacity building to approved program entities under the Program.

      ‘(2) DUTIES- A qualified intermediary that receives a grant under this subsection shall--

        ‘(A) provide assistance to approved program entities in developing, coordinating, and overseeing investment strategy;

        ‘(B) provide technical assistance in all aspects of planning, developing, and managing the Program; and

        ‘(C) facilitate Federal and private sector involvement in rural community development.

      ‘(3) ELIGIBILITY- To be considered a qualified intermediary under this subsection, an intermediary shall--

        ‘(A) be a private, nonprofit community development organization;

        ‘(B) have expertise in Federal or private rural community development policy or programs; and

        ‘(C) have experience in providing technical assistance, planning, and capacity building assistance to rural communities and nonprofit entities in eligible rural areas.

      ‘(4) MAXIMUM AMOUNT OF GRANTS- A qualified intermediary may receive a grant under this subsection of not more than $100,000.

      ‘(5) FUNDING- Of the amounts made available under section 385D, the Secretary may use to carry out this subsection not more than $2,000,000 for each of not more than 2 fiscal years.

‘SEC. 385D. FUNDING.

    ‘(a) FISCAL YEARS 2002 AND 2003-

      ‘(1) IN GENERAL- Not later than 30 days after the date of enactment of this subtitle, out of any funds in the Treasury not otherwise appropriated, the Secretary of the Treasury shall transfer to the Secretary of Agriculture to carry out this subtitle $82,000,000 for the period of fiscal years 2002 and 2003, to remain available until expended.

      ‘(2) SCHEDULE FOR OBLIGATIONS- Of the amounts made available under paragraph (1)--

        ‘(A) not more than $5,000,000 shall be obligated to carry out section 385C(d);

        ‘(B) not less than $75,000,000 shall be obligated to carry out section 385C(f); and

        ‘(C) not less than $2,000,000 shall be obligated to carry out section 385C(h).

      ‘(3) RECEIPT AND ACCEPTANCE- The Secretary shall be entitled to receive, shall accept, and shall use to carry out this subtitle the funds transferred under paragraph (1), without further appropriation.

    ‘(b) FISCAL YEARS 2004 THROUGH 2006- There are authorized to be appropriated such sums as are necessary to carry out this subtitle for each of fiscal years 2004 through 2006.’.

SEC. 605. ENHANCEMENT OF ACCESS TO BROADBAND SERVICE IN RURAL AREAS.

    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 grants, 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, or 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) GRANTS- The Secretary shall make grants to eligible entities described in subsection (e) to provide funds for the construction, improvement, or acquisition of facilities and equipment for the provision of broadband service in eligible rural communities.

    ‘(d) LOANS AND LOAN GUARANTEES- The Secretary shall make or guarantee loans to eligible entities described in subsection (e) to provide funds for the construction, improvement, or acquisition of facilities and equipment for the provision of broadband service in eligible rural communities.

    ‘(e) ELIGIBLE ENTITIES- To be eligible to obtain a grant, loan, or loan guarantee under this section, an entity must--

      ‘(1) be able to furnish, improve, or extend a broadband service to an eligible rural community; and

      ‘(2) submit to the Secretary a proposal for a project that meets the requirements of this section.

    ‘(f) 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).

    ‘(g) TECHNOLOGICAL NEUTRALITY- For purposes of determining whether or not to make a grant, loan, or loan guarantee for a project under this section, the Secretary shall not take into consideration the type of technology proposed to be used under the project.

    ‘(h) TERMS AND CONDITIONS FOR LOANS AND LOAN GUARANTEES- A loan or loan guarantee under subsection (d) shall--

      ‘(1) be made available in accordance with the requirements of the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.);

      ‘(2) bear interest at an annual rate of, as determined by the Secretary--

        ‘(A) 4 percent per annum; or

        ‘(B) the current applicable market rate; and

      ‘(3) 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.

    ‘(i) USE OF LOAN PROCEEDS TO REFINANCE LOANS FOR DEPLOYMENT OF BROADBAND SERVICE- Notwithstanding any other provision of this Act, the proceeds of any loan made 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.

    ‘(j) FUNDING-

      ‘(1) IN GENERAL- Not later than 30 days after the date of enactment of this Act, and on October 1, 2002, and each October 1 thereafter through October 1, 2005, out of any funds in the Treasury not otherwise appropriated, the Secretary of the Treasury shall transfer to the Secretary of Agriculture to carry out this section $100,000,000, to remain available until expended.

      ‘(2) RECEIPT AND ACCEPTANCE- The Secretary shall be entitled to receive, shall accept, and shall use to carry out this section the funds transferred under paragraph (1), without further appropriation.

      ‘(3) ALLOCATION OF FUNDS-

        ‘(A) IN GENERAL- From amounts made available for each fiscal year under paragraph (1), the Secretary shall--

          ‘(i) establish a national reserve for grants, 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 grants, 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 last 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 grants, loans, and loan guarantees under this section to eligible entities in any State, as determined by the Secretary.

    ‘(k) GRANTS FOR PLANNING AND FEASIBILITY STUDIES ON BROADBAND DEPLOYMENT-

      ‘(1) IN GENERAL- In addition to any other grants, loans, or loan guarantees made under this section, the Secretary shall make grants to eligible entities specified in paragraph (2) for planning and feasibility studies carried out by those entities on the deployment of broadband services in the areas served by those entities.

      ‘(2) ELIGIBLE ENTITIES- The entities eligible for grants under this subsection are--

        ‘(A) State governments;

        ‘(B) local governments (including consortia of local governments);

        ‘(C) tribal governments;

        ‘(D) telecommunications cooperatives; and

        ‘(E) appropriate State and regional nonprofit entities (as determined by the Secretary).

      ‘(3) ELIGIBILITY CRITERIA-

        ‘(A) IN GENERAL- The Secretary shall establish criteria for eligibility for grants under this subsection, including criteria for the scope of the planning and feasibility studies to be carried out with grants under this subsection.

        ‘(B) CONTRIBUTION BY GRANTEE- An entity may not be awarded a grant under this subsection unless the entity agrees to contribute (out of funds other than the grant amount) to the planning and feasibility study to be funded by the grant an amount equal to the amount of the grant.

      ‘(4) APPLICATION- An entity seeking a grant under this subsection shall submit to the Secretary an application for the grant that is in such form, and that contains such information, as the Secretary shall require.

      ‘(5) USE OF GRANT AMOUNTS-

        ‘(A) IN GENERAL- Subject to subparagraph (B), an entity that receives a grant under this subsection shall use the grant amount for planning and feasibility studies on the deployment of broadband services in the area of--

          ‘(i) an Indian tribe;

          ‘(ii) a local government;

          ‘(iii) a State;

          ‘(iv) a region of a State; or

          ‘(v) a region of States.

        ‘(B) LIMITATION- Grant amounts under this subsection may not be used for the construction of buildings or other facilities, the acquisition or improvement of existing buildings or facilities, or the leasing of office space.

      ‘(6) LIMITATION ON GRANT AMOUNTS-

        ‘(A) STATEWIDE GRANTS- The amount of the grants made under this subsection in or with respect to any State in any fiscal year may not exceed $250,000.

        ‘(B) LOCAL GOVERNMENT, REGIONAL, OR TRIBAL GRANTS- The amount of the grants made under this subsection in or with respect to any local government, region, or tribal government in any fiscal year may not exceed $100,000.

      ‘(7) RESERVATION OF FUNDS FOR GRANTS-

        ‘(A) IN GENERAL- For each fiscal year, up to 3 percent of the funds made available to carry out this section for the fiscal year shall be reserved for grants under this subsection.

        ‘(B) RELEASE- Funds reserved under subparagraph (A) for a fiscal year shall be reserved only until April 1 of the fiscal year.

      ‘(8) SUPPLEMENT NOT SUPPLANT-

        ‘(A) IN GENERAL- Eligibility for a grant under this subsection shall not affect eligibility for a grant, loan, or loan guarantee under another subsection of this section.

        ‘(B) CONSIDERATIONS- The Secretary shall not take into account the award of a grant under this subsection, or the award of a grant, loan, or loan guarantee under another subsection of this section, in awarding a grant, loan, or loan guarantee under this subsection or another subsection of this section, as the case may be.

    ‘(l) TERMINATION OF AUTHORITY-

      ‘(1) IN GENERAL- No grant, loan, or loan guarantee may be made under this section after September 30, 2006.

      ‘(2) EFFECT ON VALIDITY OF GRANT, LOAN, OR LOAN GUARANTEE- Notwithstanding paragraph (1), any grant, loan, or loan guarantee made under this section before the date specified in paragraph (1) shall be valid.’.

SEC. 606. VALUE-ADDED AGRICULTURAL PRODUCT MARKET DEVELOPMENT GRANTS.

    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- The term ‘value-added agricultural product’ means any agricultural commodity or product that--

      ‘(1)(A) has undergone a change in physical state; or

      ‘(B) 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; and

      ‘(2) as a result of the change in physical state or the manner in which the agricultural commodity or product was produced--

        ‘(A) the customer base for the agricultural commodity or product has been expanded; and

        ‘(B) a greater portion of the revenue derived from the processing of the agricultural commodity or product is available to the producer of the commodity or product.

    ‘(b) GRANT PROGRAM-

      ‘(1) PURPOSES- The purposes of this subsection are--

        ‘(A) to increase the share of the food and agricultural system profit received by agricultural producers;

        ‘(B) to increase the number and quality of rural self-employment opportunities in agriculture and agriculturally-related businesses and the number and quality of jobs in agriculturally-related businesses;

        ‘(C) to help maintain a diversity of size in farms and ranches by stabilizing the number of small and mid-sized farms;

        ‘(D) to increase the diversity of food and other agricultural products available to consumers, including nontraditional crops and products and products grown or raised in a manner that enhances the value of the products to the public; and

        ‘(E) to conserve and enhance the quality of land, water, and energy resources, wildlife habitat, and other landscape values and amenities in rural areas.

      ‘(2) GRANTS- From amounts made available under paragraph (6), the Secretary shall make 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) to develop a business plan for viable marketing opportunities for the value-added agricultural product; or

          ‘(ii) to develop strategies that are intended to create marketing opportunities for the producer; and

        ‘(B) to an eligible nonprofit entity (as determined by the Secretary) to assist the entity--

          ‘(i) to develop a business plan for viable marketing opportunities in emerging markets for a value-added agricultural product;

          ‘(ii) to develop strategies that are intended to create marketing opportunities in emerging markets for the value-added agricultural product; or

          ‘(iii) to create, expand, or operate value-added processing in an area described in paragraph (3)(B)(ii) in connection with production agriculture.

      ‘(3) AMOUNT OF GRANT-

        ‘(A) IN GENERAL- The total amount provided under this subsection to a grant recipient may not exceed $500,000.

        ‘(B) PRIORITY- The Secretary shall give priority to--

          ‘(i) grant proposals for less than $200,000 submitted under this subsection; and

          ‘(ii) grant proposals submitted by an eligible nonprofit entity with a principal office 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 no more than 5,000 inhabitants.

      ‘(4) GRANTEE STRATEGIES- A grantee under paragraph (2) 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.

      ‘(5) GRANTS FOR MARKETING OR PROCESSING CERTIFIED ORGANIC AGRICULTURAL PRODUCTS-

        ‘(A) IN GENERAL- Out of any amount that is made available to the Secretary for a fiscal year under paragraph (2), the Secretary shall use not less than 5 percent of the amount for grants to assist producers of certified organic agricultural products in post-farm marketing or processing of the products through a business or cooperative ventures that--

          ‘(i) expand the customer base of the certified organic agricultural products; and

          ‘(ii) increase the portion of product revenue available to the producers.

        ‘(B) CERTIFIED ORGANIC AGRICULTURAL PRODUCT- For the purposes of this paragraph, a certified organic agricultural product does not have to meet the requirements of the definition of ‘value-added agricultural product’ under subsection (a).

        ‘(C) INSUFFICIENT APPLICATIONS- If, for any fiscal year, the Secretary receives an insufficient quantity of applications for grants described in subparagraph (A) to use the funds reserved under subparagraph (A), the Secretary may use the excess reserved funds to make grants for any other purpose authorized under this subsection.

      ‘(6) FUNDING-

        ‘(A) IN GENERAL- Not later than 30 days after the date of enactment of this paragraph, and on October 1, 2002, and each October 1 thereafter through October 1, 2005, out of any funds in the Treasury not otherwise appropriated, the Secretary of the Treasury shall transfer to the Secretary of Agriculture to carry out this subsection $75,000,000, to remain available until expended.

        ‘(B) RECEIPT AND ACCEPTANCE- The Secretary shall be entitled to receive, shall accept, and shall use to carry out this subsection the funds transferred under subparagraph (A), without further appropriation.’;

      (3) in subsection (c)(1) (as redesignated)--

        (A) by striking ‘subsection (a)(2)’ and inserting ‘subsection (b)(2)’;

        (B) by striking ‘$5,000,000’ and inserting ‘7.5 percent’; and

        (C) by striking ‘subsection (a)’ and inserting ‘subsection (b)’; and

      (4) in subsection (d) (as redesignated), by striking ‘subsections (a) and (b)’ and inserting ‘subsections (b) and (c)’.

SEC. 607. NATIONAL RURAL DEVELOPMENT INFORMATION CLEARINGHOUSE.

    Section 2381 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 3125b) is amended to read as follows:

‘SEC. 2381. NATIONAL RURAL DEVELOPMENT INFORMATION CLEARINGHOUSE.

    ‘(a) ESTABLISHMENT- The Secretary shall establish and maintain, within the rural development mission area of the Department of Agriculture, a National Rural Development Information Clearinghouse (referred to in this section as the ‘Clearinghouse’) to perform the functions specified in subsection (b).

    ‘(b) FUNCTIONS- The Clearinghouse shall collect information and data from, and disseminate information and data to, any person or public or private entity about programs and services provided by Federal, State, local, and tribal agencies, institutions of higher education, and private, for-profit, and nonprofit organizations and institutions under which a person or public or private entity residing or operating in a rural area may be eligible for any kind of financial, technical, or other assistance, including business, venture capital, economic, credit and community development assistance, health care, job training, education, and emotional and financial counseling.

    ‘(c) MODES OF COLLECTION AND DISSEMINATION OF INFORMATION- In addition to other modes for the collection and dissemination of the types of information and data specified under subsection (b), the Secretary shall ensure that the Clearinghouse maintains an Internet website that provides for dissemination and collection, through voluntary submission or posting, of the information and data.

    ‘(d) FEDERAL AGENCIES- On request of the Secretary and to the extent permitted by law, the head of a Federal agency shall provide to the Clearinghouse such information as the Secretary may request to enable the Clearinghouse to carry out this section.

    ‘(e) STATE, LOCAL, AND TRIBAL AGENCIES, INSTITUTIONS OF HIGHER EDUCATION, AND NONPROFIT AND FOR-PROFIT ORGANIZATIONS- The Secretary shall request State, local, and tribal agencies, institutions of higher education, and private, for-profit, and nonprofit organizations and institutions to provide to the Clearinghouse information concerning applicable programs or services described in subsection (b).

    ‘(f) PROMOTION OF CLEARINGHOUSE- The Secretary prominently shall promote the existence and availability of the Clearinghouse in all activities of the Department of Agriculture relating to rural areas of the United States.

    ‘(g) FUNDING-

      ‘(1) IN GENERAL- Subject to paragraph (2), the Secretary shall use to operate and maintain the Clearinghouse not more than $600,000 of the funds available to the Rural Housing Service, the Rural Utilities Service, and the Rural Business-Cooperative Service for each fiscal year.

      ‘(2) LIMITATION- Funds available to the Rural Housing Service, the Rural Utilities Service, and the Rural Business-Cooperative Service for the payment of loan costs (as defined in section 502 of Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) shall not be used to operate and maintain the Clearinghouse.’.

Subtitle B--National Rural Development Partnership

SEC. 611. SHORT TITLE.

    This subtitle may be cited as the ‘National Rural Development Partnership Act of 2002’.

SEC. 612. NATIONAL RURAL DEVELOPMENT PARTNERSHIP.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981 et seq.) is amended by adding at the end the following:

‘SEC. 377. 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--

        ‘(A) implements Federal law targeted at rural areas, including--

          ‘(i) the Act of April 24, 1950 (commonly known as the ‘Granger-Thye Act’) (64 Stat. 82, chapter 9);

          ‘(ii) the Intergovernmental Cooperation Act of 1968 (82 Stat. 1098);

          ‘(iii) section 41742 of title 49, United States Code;

          ‘(iv) the Rural Development Act of 1972 (86 Stat. 657);

          ‘(v) the Rural Development Policy Act of 1980 (94 Stat. 1171);

          ‘(vi) the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.);

          ‘(vii) amendments made to section 334 of the Public Health Service Act (42 U.S.C. 254g) by the Rural Health Clinics Act of 1983 (97 Stat. 1345); and

          ‘(viii) the Rural Housing Amendments of 1983 (97 Stat. 1240) and the amendments made by the Rural Housing Amendments of 1983 to title V of the Housing Act of 1949 (42 U.S.C. 1471 et seq.); or

        ‘(B) administers a program that has a significant impact on rural areas, including--

          ‘(i) the Appalachian Regional Commission;

          ‘(ii) the Department of Agriculture;

          ‘(iii) the Department of Commerce;

          ‘(iv) the Department of Defense;

          ‘(v) the Department of Education;

          ‘(vi) the Department of Energy;

          ‘(vii) the Department of Health and Human Services;

          ‘(viii) the Department of Housing and Urban Development;

          ‘(ix) the Department of the Interior;

          ‘(x) the Department of Justice;

          ‘(xi) the Department of Labor;

          ‘(xii) the Department of Transportation;

          ‘(xiii) the Department of the Treasury;

          ‘(xiv) the Department of Veterans Affairs;

          ‘(xv) the Environmental Protection Agency;

          ‘(xvi) the Federal Emergency Management Administration;

          ‘(xvii) the Small Business Administration;

          ‘(xviii) the Social Security Administration;

          ‘(xix) the Federal Reserve System;

          ‘(xx) the United States Postal Service;

          ‘(xxi) the Corporation for National Service;

          ‘(xxii) the National Endowment for the Arts and the National Endowment for the Humanities; and

          ‘(xxiii) other agencies, commissions, and corporations.

      ‘(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--

        ‘(A) to empower and build the capacity of States and rural communities within States to design unique responses to their own special rural development needs, with local determinations of progress and selection of projects and activities;

        ‘(B) to encourage participants to be flexible and innovative in establishing new partnerships and trying fresh, new approaches to rural development issues, with responses to rural development that use different approaches to fit different situations; and

        ‘(C) to encourage all partners in the Partnership (Federal, State, local, and tribal governments, the private sector, and nonprofit organizations) to be fully engaged and share equally in decisions.

      ‘(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 shall 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 referred to in subsection (a)(1)(B) 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, State rural development councils.

      ‘(5) ROLE OF PRIVATE AND NONPROFIT SECTOR ORGANIZATIONS- Private and nonprofit sector organizations are encouraged--

        ‘(A) to act as full partners in the Partnership and State rural development councils; and

        ‘(B) to cooperate with participating government organizations in developing innovative approaches to the solution of rural development problems.

    ‘(c) NATIONAL RURAL DEVELOPMENT COORDINATING COMMITTEE-

      ‘(1) ESTABLISHMENT- The Secretary shall establish a National Rural Development Coordinating Committee.

      ‘(2) COMPOSITION- The Coordinating Committee shall be composed of--

        ‘(A) 1 representative of each agency with rural responsibilities that elects to participate in the Coordinating Committee; 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) provide support for the work of the State rural development councils;

        ‘(B) facilitate coordination among Federal programs and activities, and with State, local, tribal, and private programs and activities, affecting rural development;

        ‘(C) enhance the effectiveness, responsiveness, and delivery of Federal programs in rural areas;

        ‘(D) gather and provide to Federal authorities information and input for the development and implementation of Federal programs impacting rural economic and community development;

        ‘(E) notwithstanding any other provision of law, review and comment on policies, regulations, and proposed legislation that affect or would affect rural areas;

        ‘(F) provide technical assistance to State rural development councils for the implementation of Federal programs;

        ‘(G) notwithstanding any other provision of law, develop and facilitate strategies to reduce or eliminate administrative and regulatory impediments; and

        ‘(H) require each State receiving funds under this section to submit an annual report on the use of the funds by the State, including a description of strategic plans, goals, performance measures, and outcomes for the State rural development council of the State.

      ‘(4) ELECTION NOT TO PARTICIPATE- An agency with rural responsibilities that elects not to participate in the Partnership and the Coordinating Committee shall submit to Congress a report that describes--

        ‘(A) how the programmatic responsibilities of the Federal agency that target or have an impact on rural areas are better achieved without participation by the agency in the Partnership; and

        ‘(B) a more effective means of partnership-building and collaboration to achieve the programmatic responsibilities of the agency.

    ‘(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 establish a State rural development council.

      ‘(2) STATE DIVERSITY- Each State rural development council shall--

        ‘(A) have a nonpartisan membership that is broad and representative of the economic, social, and political diversity of the State; and

        ‘(B) carry out programs and activities in a manner that reflects the diversity of the State.

      ‘(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 target or have an impact on rural areas of the State;

        ‘(B) enhance the effectiveness, responsiveness, and delivery of Federal and State programs in rural areas of the State;

        ‘(C) gather and provide to the Coordinating Committee and other appropriate organizations information on the condition of rural areas in the State;

        ‘(D) monitor and report on policies and programs that address, or fail to address, the needs of the rural areas of the State;

        ‘(E) provide comments to the Coordinating Committee and other appropriate organizations on policies, regulations, and proposed legislation that affect or would affect the rural areas of the State;

        ‘(F) notwithstanding any other provision of law, 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;

        ‘(G) use grant or cooperative agreement funds provided by the Partnership under an agreement entered into under paragraph (1) to--

          ‘(i) retain an Executive Director and such support staff as are necessary to facilitate and implement the directives of the State rural development council; and

          ‘(ii) pay expenses associated with carrying out subparagraphs (A) through (F); and

        ‘(H)(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) AUTHORITIES- A State rural development council may--

        ‘(A) solicit funds to supplement and match funds provided under paragraph (3)(G); and

        ‘(B) engage in activities, in addition to those specified in paragraph (3), appropriate to accomplish the purposes for which the State rural development council is established.

      ‘(5) COMMENTS OR RECOMMENDATIONS- A State rural development council may provide comments and recommendations to an agency with rural responsibilities related to the activities of the State rural development council within the State.

      ‘(6) ACTIONS OF STATE RURAL DEVELOPMENT COUNCIL MEMBERS- When carrying out a program or activity authorized by a State rural development council or this subtitle, a member of the council shall be regarded as a full-time employee of the Federal Government for purposes of chapter 171 of title 28, United States Code, and the Federal Advisory Committee Act (5 U.S.C. App.).

      ‘(7) FEDERAL PARTICIPATION IN STATE RURAL DEVELOPMENT COUNCILS-

        ‘(A) IN GENERAL- The State Director for Rural Development of a State, other employees of the Department of Agriculture, and employees of other Federal agencies that elect to participate in the Partnership shall fully participate in the governance and operations of State rural development councils on an equal basis with other members of the State rural development councils.

        ‘(B) CONFLICTS- A Federal employee who participates in a State rural development council shall not participate in the making of any council decision if the agency represented by the Federal employee has any financial or other interest in the outcome of the decision.

        ‘(C) FEDERAL GUIDANCE- The Office of Government Ethics, in consultation with the Attorney General, shall issue guidance to all Federal employees that participate in State rural development councils that describes specific decisions that--

          ‘(i) would constitute a conflict of interest for the Federal employee; and

          ‘(ii) from which the Federal employee must recuse himself or herself.

    ‘(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 an employee of the agency with rural responsibilities to the Partnership without reimbursement for a period of up to 12 months.

        ‘(B) CIVIL SERVICE STATUS- The detail shall be without interruption or loss of civil service status or privilege.

      ‘(2) ADDITIONAL SUPPORT- The Secretary shall provide for any additional support staff to the Partnership as the Secretary determines to be necessary to carry out the duties of the Partnership.

    ‘(f) FUNDING-

      ‘(1) AUTHORIZATION OF APPROPRIATIONS-

        ‘(A) IN GENERAL- There are authorized to be appropriated such sums as are necessary to carry out this section.

        ‘(B) AMOUNT OF FINANCIAL ASSISTANCE- In providing financial assistance to State rural development councils, the Secretary and heads of other Federal agencies shall provide assistance that, to the maximum extent practicable, is--

          ‘(i) uniform in amount; and

          ‘(ii) targeted to newly created State rural development councils.

        ‘(C) FEDERAL SHARE- The Secretary shall develop a plan to decrease, over time, the Federal share of the cost of the core operations of State rural development councils.

      ‘(2) FEDERAL AGENCIES-

        ‘(A) IN GENERAL- Notwithstanding any other provision of law limiting the ability of an agency to provide funds to the Partnership with other agencies, in order to carry out the purposes described in subsection (b)(2), the Partnership shall be eligible to receive grants, gifts, contributions, or technical assistance from, or enter into contracts with, any Federal agency.

        ‘(B) ASSISTANCE- Federal agencies are encouraged to use funds made available for programs that target or have an impact on rural areas to provide assistance to, and enter into contracts with, the Partnership, as described in subparagraph (A).

      ‘(3) CONTRIBUTIONS- The Partnership may accept private contributions.

      ‘(4) FEDERAL FINANCIAL SUPPORT FOR STATE RURAL DEVELOPMENT COUNCILS- Notwithstanding any other provision of law, a Federal agency may use funds made available under paragraph (1) or (2) to enter into a cooperative agreement, contract, or other agreement with a State rural development council to support the core operations of the State rural development council, regardless of the legal form of organization of the State rural development council.

    ‘(g) 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 under an agreement under subsection (d)(1).

      ‘(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.

    ‘(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.’.

Subtitle C--Consolidated Farm and Rural Development Act

SEC. 621. 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 ‘$590,000,000’ and inserting ‘$1,500,000,000’;

      (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 shall 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 an annual report to the Secretary that describes the number and size of communities served and the type of financing provided.

          ‘(vii) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this subparagraph $30,000,000 for each of fiscal years 2002 through 2006.’.

SEC. 622. 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 ‘2006’.

SEC. 623. 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 added 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’ of title III of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2002.

        ‘(C) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this paragraph $15,000,000 for each of fiscal years 2003 through 2006.’.

SEC. 624. 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 623) is amended by added 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 provide a 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 2006.’.

SEC. 625. CERTIFIED NONPROFIT ORGANIZATIONS SHARING EXPERTISE.

    Section 306(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)) (as amended by section 624) is amended by added at the end the following:

      ‘(24) CERTIFIED NONPROFIT ORGANIZATIONS SHARING EXPERTISE-

        ‘(A) CERTIFIED ORGANIZATIONS-

          ‘(i) IN GENERAL- To be certified by the Secretary to provide technical assistance in 1 or more rural development fields, an organization shall--

            ‘(I) be a nonprofit organization (which may include an institution of higher education) with experience in providing technical assistance in the applicable rural development field;

            ‘(II) develop a plan, approved by the Secretary, describing the manner in which grant funds will be used and the source of non-Federal funds; and

            ‘(III) meet such other criteria as the Secretary may establish, based on the needs of eligible entities for the technical assistance.

          ‘(iii) LIST- The Secretary shall make available to the public a list of certified organizations in each area that the Secretary determines have substantial experience in providing the assistance described in subparagraph (B).

        ‘(B) GRANTS- The Secretary may provide grants to certified organizations to pay for costs of providing technical assistance to local governments and nonprofit entities to improve the infrastructure, services, and business development capabilities of local governments and local economic development organizations.

        ‘(C) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this paragraph $20,000,000 for each of fiscal years 2003 through 2006.’.

SEC. 626. 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 625) is amended by adding at the end the following:

      ‘(25) LOAN GUARANTEES FOR WATER, WASTEWATER, AND ESSENTIAL COMMUNITY FACILITIES LOANS-

        ‘(A) IN GENERAL- The Secretary may guarantee under this title a loan made to finance a community facility or water or waste facility project, including a loan financed by the net proceeds of a bond described in section 144(a)(12)(B)(ii) 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 must 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 GUARANTEE FOR CERTAIN LOANS- The Secretary may guarantee loans made in subsection (a) to finance the issuance of bonds for the projects described in section 306(a)(25).’.

SEC. 627. RURAL FIREFIGHTERS AND EMERGENCY PERSONNEL GRANT PROGRAM.

    Section 306(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)) (as amended by section 626(a)) is amended by adding at the end the following:

      ‘(26) RURAL FIREFIGHTERS AND EMERGENCY MEDICAL PERSONNEL GRANT PROGRAM-

        ‘(A) IN GENERAL- The Secretary 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-

          ‘(i) SCHOLARSHIPS-

            ‘(I) IN GENERAL- Not less than 60 percent of the amounts made available for competitively awarded grants under this paragraph shall be used to provide grants to fund partial scholarships for training of individuals at training centers approved by the Secretary.

            ‘(II) PRIORITY- In awarding grants under this clause, the Secretary shall give priority to grant applicants with relatively low transportation costs considering the location of the grant applicant and the proposed location of the training.

          ‘(ii) GRANTS FOR TRAINING CENTERS-

            ‘(I) EXISTING CENTERS-

‘(aa) IN GENERAL- A grant under subparagraph (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.

‘(bb) LIMITATION- Not more than $2,000,000 shall be provided to any single training center for any fiscal year under this subclause.

            ‘(II) ESTABLISHMENT OF NEW CENTERS-

‘(aa) IN GENERAL- A grant under subparagraph (A) may be used to provide the Federal share of the costs of establishing a regional training center for firefighters and emergency medical personnel.

‘(bb) FEDERAL SHARE- The amount of a grant under this subclause for a training center shall not exceed 50 percent of the cost of establishing the training center.

        ‘(C) FUNDING-

          ‘(i) IN GENERAL- Out of any funds in the Treasury not otherwise appropriated, the Secretary of the Treasury shall transfer to the Secretary of Agriculture to carry out this paragraph--

            ‘(I) not later than 30 days after the date of enactment of this Act, $10,000,000; and

            ‘(II) on October 1, 2002, and each October 1 thereafter through October 1, 2005, $30,000,000.

          ‘(ii) RECEIPT AND ACCEPTANCE- The Secretary shall be entitled to receive, shall accept, and shall use to carry out this section the funds transferred under clause (i), without further appropriation.

          ‘(iii) AVAILABILITY OF FUNDS- Funds transferred under clause (i) shall remain available until expended.’.

SEC. 628. 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 627) is amended by adding at the end the following:

      ‘(27) 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, with 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 2006.’.

SEC. 629. EMERGENCY COMMUNITY WATER ASSISTANCE GRANT PROGRAM.

    Section 306A(i) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926a(i)) is amended by striking ‘2002’ and inserting ‘2006’.

SEC. 630. WATER AND WASTE FACILITY GRANTS FOR NATIVE AMERICAN TRIBES.

    Section 306C of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926c(e)) is amended by striking subsection (e) and inserting the following:

    ‘(e) AUTHORIZATION OF APPROPRIATIONS-

      ‘(1) IN GENERAL- Subject to paragraph (2), there is 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) 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 subparagraph (1)(C).’.

SEC. 631. 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 2006’.

SEC. 632. 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 ‘The Secretary’ and inserting the following:

        ‘(A) GRANTS- 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 no 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. 633. 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 ‘2006’.

SEC. 634. 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 2006.’.

SEC. 635. BUSINESS AND INDUSTRY LOAN MODIFICATIONS.

    Section 3l0B 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) LOAN GUARANTEES FOR THE PURCHASE OF COOPERATIVE STOCK-

        ‘(A) NEW AND EXPANDING COOPERATIVES-

          ‘(i) IN GENERAL- The Secretary may guarantee a loan under subsection (a) to farmers, ranchers, or cooperatives for the purpose of purchasing start-up capital stock for the expansion or creation of a cooperative venture that will process agricultural commodities or otherwise process value-added agricultural products.

          ‘(ii) FINANCIAL CONDITION- In determining the appropriateness of a loan guarantee under this subparagraph, the Secretary--

            ‘(I) shall fully review the feasibility and other relevant aspects of the cooperative venture to be established;

            ‘(II) may not require a review of the financial condition or statements of any individual farmer or rancher involved in the cooperative, other than the applicant for a guarantee under this subparagraph; and

            ‘(III) shall base any guarantee, to the maximum extent practicable, on the merits of the cooperative venture to be established.

          ‘(iii) COLLATERAL- As a condition of making a loan guarantee under this subparagraph, the Secretary may not require additional collateral by a farmer or rancher, other than stock purchased or issued pursuant to the loan and guarantee of the loan.

          ‘(iv) ELIGIBILITY- To be eligible for a loan guarantee under this subparagraph, a farmer or rancher must produce the agricultural commodity that will be processed by the cooperative.

          ‘(v) PROCESSING CONTRACTS DURING INITIAL PERIOD- The cooperative, for which a farmer or rancher receives a guarantee to purchase stock under this subparagraph, 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.

        ‘(B) EXISTING COOPERATIVES- The Secretary may guarantee a loan under subsection (a) to a farmer or rancher to join a cooperative in order to sell the agricultural commodities or products produced by the farmer or rancher.

        ‘(C) FINANCIAL INFORMATION- Financial information required by the Secretary from a farmer or rancher as a condition of making a loan guarantee under this paragraph shall be provided in the manner generally required by commercial agricultural lenders in the area.

      ‘(2) LOANS TO COOPERATIVES-

        ‘(A) IN GENERAL- The Secretary may make or guarantee a loan under subsection (a) to a cooperative 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.

        ‘(B) REFINANCING- A cooperative organization owned by farmers or ranchers that is eligible for a business and industry loan under made or guaranteed under subsection (a) shall be eligible to refinance an existing 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 has not been converted, with respect to the existing loan; and

          ‘(ii) there is adequate security or full collateral for the refinanced loan.

      ‘(3) BUSINESS AND INDUSTRY LOAN APPRAISALS- The Secretary may require that any appraisal made in connection with a business and industry loan made or guaranteed under subsection (a) 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.

      ‘(4) FEES- The Secretary may assess a 1-time fee for any loan guaranteed under subsection (a) in an amount that does not exceed 2 percent of the guaranteed principal portion of the loan.’.

SEC. 636. VALUE-ADDED INTERMEDIARY RELENDING PROGRAM.

    Section 310B of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932) (as amended by section 626(b)) is amended by adding at the end the following:

    ‘(i) VALUE-ADDED INTERMEDIARY RELENDING PROGRAM-

      ‘(1) IN GENERAL- In accordance with this subsection, the Secretary shall make loans under the terms and conditions of the intermediary relending program established under section 1323(b)(2)(C) of the Food Security Act of 1985 (7 U.S.C. 1932 note; Public Law 99-198).

      ‘(2) LOANS- Using funds made available to carry out this subsection, the Secretary shall make loans to eligible intermediaries to make loans to ultimate recipients, under the terms and conditions of the intermediary relending program, for projects to establish, enlarge, and operate enterprises that add value to agricultural commodities and products of agricultural commodities.

      ‘(3) ELIGIBLE INTERMEDIARIES- Intermediaries that are eligible to receive loans under paragraph (2) shall include State agencies.

      ‘(4) PREFERENCE FOR BIOENERGY PROJECTS- In making loans using loan funds made available under paragraph (2), an eligible intermediary shall give preference to bioenergy projects in accordance with regulations promulgated by the Secretary.

      ‘(5) COMPOSITION OF CAPITAL- The capital for a project carried out by an ultimate recipient and assisted with loan funds made available under paragraph (2) shall be comprised of--

        ‘(A) not more than 15 percent of the total cost of a project; and

        ‘(B) not less than 50 percent of the equity funds provided by agricultural producers.

      ‘(6) LOAN CONDITIONS-

        ‘(A) TERMS OF LOANS- A loan made to an intermediary using loan funds made available under paragraph (2) shall have a term of not to exceed 30 years.

        ‘(B) INTEREST- The interest rate on such a loan shall be--

          ‘(i) in the case of each of the first 2 years of the loan period, 0 percent; and

          ‘(ii) in the case of each of the remaining years of the loan period, 2 percent.

      ‘(7) LIMITATIONS ON AMOUNT OF LOAN FUNDS PROVIDED-

        ‘(A) IN GENERAL- Except as provided in subparagraph (B), an intermediary or ultimate recipient shall be eligible to receive not more than $2,000,000 of the loan funds made available under paragraph (2).

        ‘(B) STATE AGENCIES- Subparagraph (A) shall not apply in the case of a State agency with respect to loan funds provided to the State agency as an intermediary.

      ‘(8) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this subsection $15,000,000 for each of fiscal years 2003 through 2006.’.

SEC. 637. 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 508) 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. 638. 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 526) 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 $100,000 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. 639. 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 a city, town, or unincorporated area that has a population of 50,000 inhabitants or less, other than an urbanized area immediately adjacent to a city, town, or unincorporated area that has a population in excess of 50,000 inhabitants.

        ‘(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) and (2) 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), and (21) 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 50,000 inhabitants.

        ‘(D) BUSINESS AND INDUSTRY DIRECT AND GUARANTEED LOANS- For the purpose of business and industry direct and guaranteed loans under section 310B(a)(1), the terms ‘rural’ and ‘rural area’ mean any area other than a city or town that has a population of greater than 50,000 inhabitants and the immediately adjacent urbanized area of such city or town.

        ‘(E) MULTIJURISDICTIONAL REGIONAL PLANNING ORGANIZATIONS; NATIONAL RURAL DEVELOPMENT PARTNERSHIP- In sections 306(a)(23) and 377, 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.

        ‘(F) RURAL ENTREPRENEURS AND MICROENTERPRISE ASSISTANCE PROGRAM; NATIONAL RURAL COOPERATIVE AND BUSINESS EQUITY FUND; RURAL BUSINESS INVESTMENT PROGRAM- In section 378 and subtitles G and 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. 640. RURAL ENTREPRENEURS AND MICROENTERPRISE ASSISTANCE PROGRAM.

    Subtitle D of the Consolidated Farm and Rural Development Act (as amended by section 612) is amended by adding at the end the following:

‘SEC. 378. RURAL ENTREPRENEURS AND MICROENTERPRISE ASSISTANCE PROGRAM.

    ‘(a) DEFINITIONS- In this section:

      ‘(1) ECONOMICALLY DISADVANTAGED MICROENTREPRENEUR- The term ‘economically disadvantaged microentrepreneur’ means an owner, majority owner, or developer of a microenterprise that has the ability to compete in the private sector but has been impaired due to diminished capital and credit opportunities, as compared to other microentrepreneurs in the industry.

      ‘(2) INDIAN TRIBE- The term ‘Indian tribe’ has the meaning given the term in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b).

      ‘(3) INTERMEDIARY- The term ‘intermediary’ means a private, nonprofit entity that provides assistance--

        ‘(A) to a microenterprise development organization; or

        ‘(B) for a microenterprise development program.

      ‘(4) LOW-INCOME INDIVIDUAL- The term ‘low-income individual’ means an individual with an income (adjusted for family size) of not more than the greater of--

        ‘(A) 80 percent of median income of an area; or

        ‘(B) 80 percent of the statewide nonmetropolitan area median income.

      ‘(5) MICROCREDIT- The term ‘microcredit’ means a business loan or loan guarantee of not more than $35,000 provided to a rural entrepreneur.

      ‘(6) MICROENTERPISE- The term ‘microenterprise’ means a sole proprietorship, joint enterprise, limited liability company, partnership, corporation, or cooperative that--

        ‘(A) has 5 or fewer employees; and

        ‘(B) is unable to obtain sufficient credit, equity, or banking services elsewhere, as determined by the Secretary.

      ‘(7) MICROENTERPRISE DEVELOPMENT ORGANIZATION-

        ‘(A) IN GENERAL- The term ‘microenterprise development organization’ means a nonprofit entity that provides training and technical assistance to rural entrepreneurs and access to capital or another service described in subsection (c) to rural entrepreneurs.

        ‘(B) INCLUSIONS- The term ‘microenterprise development organization’ includes an organization described in subparagraph (A) with a demonstrated record of delivering services to economically disadvantaged microentrepreneurs.

      ‘(8) MICROENTERPRISE DEVELOPMENT PROGRAM- The term ‘microenterprise development organization’ means a program administered by a organization serving a rural area.

      ‘(9) MICROENTREPRENEUR- The term ‘microentrepreneur’ means the owner, operator, or developer of a microenterprise.

      ‘(10) PROGRAM- The term ‘program’ means the rural entrepreneur and microenterprise program established under subsection (b)(1).

      ‘(11) QUALIFIED ORGANIZATION- The term ‘qualified organization’ means--

        ‘(A) a microenterprise development organization or microenterprise development program that has a demonstrated record of delivering microenterprise services to rural entrepreneurs, as demonstrated by the development of an effective plan of action and the possession of necessary resources to deliver microenterprise services to rural entrepreneurs effectively, as determined by the Secretary;

        ‘(B) an intermediary that has a demonstrated record of delivery assistance to microenterprise development organizations or microenterprise development programs;

        ‘(C) a microenterprise development organization or microenterprise development program that--

          ‘(i) serves rural entrepreneurs; and

          ‘(ii) enters into an agreement with a local community, in conjunction with a State or local government or Indian tribe, to provide assistance described in subsection (c);

        ‘(D) an Indian tribe, the tribal government of which certifies to the Secretary that no microenterprise development organization or microenterprise development program exists under the jurisdiction of the Indian tribe; or

        ‘(E) a group of 2 or more organizations or Indian tribes described in subparagraph (A), (B), (C), or (D) that agree to act jointly as a qualified organization under this section.

      ‘(12) RURAL CAPACITY BUILDING SERVICE- The term ‘rural capacity building service’ means a service provided to an organization that--

        ‘(A) is, or is in the process of becoming, a microenterprise development organization or microenterprise development program; and

        ‘(B) serves rural areas for the purpose of enhancing the ability of the organization to provide training, technical assistance, and other related services to rural entrepreneurs.

      ‘(13) RURAL ENTREPRENEUR- The term ‘rural entrepreneur’ means a microentrepreneur, or prospective microentrepreneur--

        ‘(A) the principal place of business of which is in a rural area; and

        ‘(B) that is unable to obtain sufficient training, technical assistance, or microcredit elsewhere, as determined by the Secretary.

      ‘(14) SECRETARY- The term ‘Secretary’ means the Secretary of Agriculture, acting through the Rural Business-Cooperative Service.

      ‘(15) TRAINING AND TECHNICAL ASSISTANCE-

        ‘(A) IN GENERAL- The term ‘training and technical assistance’ means assistance provided to rural entrepreneurs to develop the skills the rural entrepreneurs need to plan, market, and manage their own business.

        ‘(B) INCLUSIONS- The term ‘training and technical assistance’ includes assistance provided for the purpose of--

          ‘(i) enhancing business planning, marketing, management, or financial management skills; and

          ‘(ii) obtaining microcredit.

      ‘(16) TRIBAL GOVERNMENT- The term ‘tribal government’ means the governing body of an Indian tribe.

    ‘(b) ESTABLISHMENT-

      ‘(1) IN GENERAL- From amounts made available under subsection (h), the Secretary shall establish a rural entrepreneur and microenterprise program.

      ‘(2) PURPOSE- The purpose of the program shall be to provide low- and moderate-income individuals with--

        ‘(A) the skills necessary to establish new small businesses in rural areas; and

        ‘(B) continuing technical assistance as the individuals begin operating the small businesses.

    ‘(c) ASSISTANCE-

      ‘(1) IN GENERAL- The Secretary may make a grant under this section to a qualified organization to--

        ‘(A) provide training, technical assistance, or microcredit to a rural entrepreneur;

        ‘(B) provide training, operational support, or a rural capacity building service to a qualified organization to assist the qualified organization in developing microenterprise training, technical assistance, and other related services;

        ‘(C) assist in researching and developing the best practices in delivering training, technical assistance, and microcredit to rural entrepreneurs; and

        ‘(D) to carry out such other projects and activities as the Secretary determines are consistent with the purposes of this section.

      ‘(2) ALLOCATION-

        ‘(A) IN GENERAL- Subject to subparagraphs (B) and (C), of the amount of funds made available for a fiscal year to make grants under this section, the Secretary shall ensure that--

          ‘(i) not less than 75 percent of funds are used to carry out activities described in paragraph (1)(A); and

          ‘(ii) not more than 25 percent of the funds are used to carry out activities described in subparagraphs (B) through (D) of paragraph (1).

        ‘(B) LIMITATION ON GRANT AMOUNT- No single qualified organization may receive more than 10 percent of the total funds that are made available for a fiscal year to carry out this section.

        ‘(C) ADMINISTRATIVE EXPENSES- Not more than 15 percent of assistance received by a qualified organization for a fiscal year under this section may be used for administrative expenses.

    ‘(d) SUBGRANTS- Subject to such regulations as the Secretary may promulgate, a qualified organization that receives a grant under this section may use the grant to provide assistance to other qualified organizations, such as small or emerging qualified organizations.

    ‘(e) LOW-INCOME INDIVIDUALS- The Secretary shall ensure that not less than 50 percent of the grants made under this section is used to benefit low-income individuals identified by the Secretary, including individuals residing on Indian reservations.

    ‘(f) DIVERSITY- In making grants under this section, the Secretary shall ensure, to the maximum extent practicable, that grant recipients include qualified organizations--

      ‘(1) of varying sizes; and

      ‘(2) that serve racially and ethnically diverse populations.

    ‘(g) COST SHARING-

      ‘(1) FEDERAL SHARE- The Federal share of the cost of a project carried out using funds from a grant under this section shall be 75 percent.

      ‘(2) FORM OF NON-FEDERAL SHARE- The non-Federal share of the cost of a project described in paragraph (1) may be provided--

        ‘(A) in cash (including through fees, grants (including community development block grants), and gifts); or

        ‘(B) in kind.

    ‘(h) FUNDING-

      ‘(1) IN GENERAL- Not later than 30 days after the date of enactment of this Act, and on October 1, 2002, and each October 1 thereafter through October 1, 2005, out of any funds in the Treasury not otherwise appropriated, the Secretary of the Treasury shall transfer to the Secretary of Agriculture to carry out this section $10,000,000, to remain available until expended.

      ‘(2) RECEIPT AND ACCEPTANCE- The Secretary shall be entitled to receive, shall accept, and shall use to carry out this section the funds transferred under paragraph (1), without further appropriation.’.

SEC. 641. RURAL SENIORS.

    (a) INTERAGENCY COORDINATING COMMITTEE FOR RURAL SENIORS- Subtitle D of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981 et seq.) (as amended by section 640) is amended by adding at the end the following:

‘SEC. 379. INTERAGENCY COORDINATING COMMITTEE FOR RURAL SENIORS.

    ‘(a) IN GENERAL- The Secretary shall establish an interagency coordinating committee (referred to in this section as the ‘Committee’) to examine the special problems of rural seniors.

    ‘(b) MEMBERSHIP- The Committee shall be comprised of--

      ‘(1) the Undersecretary of Agriculture for Rural Development, who shall serve as chairperson of the Committee;

      ‘(2) 2 representatives of the Secretary of Health and Human Services, of whom--

        ‘(A) 1 shall have expertise in the field of health care; and

        ‘(B) 1 shall have expertise in the field of programs under the Older Americans Act of 1965 (42 U.S.C. 3001 et seq.);

      ‘(3) 1 representative of the Secretary of Housing and Urban Development;

      ‘(4) 1 representative of the Secretary of the Interior;

      ‘(5) 1 representative of the Secretary of Transportation; and

      ‘(6) representatives of such other Federal agencies as the Secretary may designate.

    ‘(c) DUTIES- The Committee shall--

      ‘(1) study health care, transportation, technology, housing, accessibility, and other areas of need of rural seniors;

      ‘(2) identify successful examples of senior care programs in rural communities that could serve as models for other rural communities; and

      ‘(3) not later than 1 year after the date of enactment of this section, submit to the Secretary, the Committee on Agriculture of the House of Representatives, and the Committee on Agriculture, Nutrition, and Forestry of the Senate recommendations for legislative and administrative action.

    ‘(d) FUNDING- Funds available to any Federal agency may be used to carry out interagency activities under this section.’.

    (b) GRANTS FOR PROGRAMS FOR RURAL SENIORS- Subtitle D of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981 et seq.) (as amended by subsection (a)) is amended by adding at the end the following:

‘SEC. 379A. GRANTS FOR PROGRAMS FOR RURAL SENIORS.

    ‘(a) IN GENERAL- The Secretary shall make grants to nonprofit organizations (including cooperatives) to pay the Federal share of the cost of programs that--

      ‘(1) provide facilities, equipment, and technology for seniors in a rural area; and

      ‘(2) may be replicated in other rural areas.

    ‘(b) FEDERAL SHARE- The Federal share of a grant under this section shall be not more than 20 percent of the cost of a program described in subsection (a).

    ‘(c) LEVERAGING- In selecting programs to receive grants under section, the Secretary shall give priority to proposals that leverage resources to meet multiple rural community goals.

    ‘(d) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out this section $25,000,000 for each of fiscal years 2003 through 2006.’.

    (c) RESERVATION OF COMMUNITY FACILITIES PROGRAM FUNDS FOR SENIOR 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 SENIOR FACILITIES-

          ‘(i) IN GENERAL- For each fiscal year, not less than 12.5 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 senior facilities, or carrying out other projects that mainly benefit seniors, 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. 642. CHILDREN’S DAY CARE FACILITIES.

    Section 306(a)(19) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)(19)) (as amended by section 641(c)) is amended by adding at the end the following:

        ‘(D) RESERVATION OF FUNDS FOR CHILDREN’S 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. 643. RURAL TELEWORK.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981 et seq.) (as amended by section 641(b)) is amended by adding at the end the following:

‘SEC. 379B. 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 that meets the requirements of this section and such other requirements as are established by the Secretary.

      ‘(2) INSTITUTE- The term ‘institute’ means a regional 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 a grant 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 (4).

      ‘(2) ELIGIBLE ORGANIZATIONS- The Secretary shall establish criteria that an organization shall meet to be eligible to receive a grant under this subsection.

      ‘(3) DEADLINE FOR INITIAL GRANT- Not later than 1 year after the date on which funds are first made available to carry out this subsection, the Secretary shall make the initial grant under this subsection.

      ‘(4) PROJECTS- The institute shall use grant funds obtained 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.

      ‘(5) 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, 50 percent of the amount of the grant; and

          ‘(ii) during each of the fourth and fifth years of the project, 100 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) FORM- The non-Federal contributions required under subparagraph (A) may be in the form of in-kind contributions, including office equipment, office space, and services.

    ‘(c) TELEWORK GRANTS-

      ‘(1) IN GENERAL- Subject to paragraphs (2) through (5), the Secretary shall make grants to eligible entities 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) ELIGIBLE ORGANIZATIONS- To be eligible to receive a grant under this subsection, an eligible entity shall--

        ‘(A) be a nonprofit organization or educational institution in a rural area; and

        ‘(B) submit to, and receive the approval of, the Secretary of an application for the grant that demonstrates that the eligible entity 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, and 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 establish, expand, or operate a telework location in a rural area after the date that is 2 years after the establishment of the telework location.

      ‘(5) MAXIMUM AMOUNT OF GRANT- The amount of a grant provided to an eligible entity under this subsection shall not exceed $500,000.

    ‘(d) APPLICABILITY OF CERTAIN FEDERAL LAW- An entity 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 2006, of which $5,000,000 shall be provided to establish an institute under subsection (b).’.

SEC. 644. HISTORIC BARN PRESERVATION.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981 et seq.) (as amended by section 643) is amended by adding at the end the following:

‘SEC. 379C. 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 agriculture 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 exempt from tax under section 501(c)(3) of the Internal Revenue Code of 1986; 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 Undersecretary of Rural Development.

    ‘(b) PROGRAM- The Secretary shall establish a historic barn preservation program--

      ‘(1) to assist States in developing a listing 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 entity 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.

    ‘(d) FUNDING- There is authorized to be appropriated to carry out this section, $25,000,000 for the period of fiscal years 2002 through 2006, to remain available until expended.’.

SEC. 645. GRANTS FOR EMERGENCY WEATHER RADIO TRANSMITTERS.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981 et seq.) (as amended by section 644)) is amended by adding at the end the following:

‘SEC. 379D. GRANTS FOR EMERGENCY 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 for the Federal share of the cost of acquiring radio transmitters to increase coverage of rural areas by the emergency 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 emergency 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 cost of acquiring a radio transmitter described in subsection (a).

    ‘(d) AUTHORIZATION- There is authorized to be appropriated to carry out this section $2,000,000 for each of fiscal years 2002 through 2006.’.

SEC. 646. GRANTS FOR TRAINING FARM WORKERS.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981 et seq.) (as amended by section 645) is amended by adding at the end the following:

‘SEC. 379E. GRANTS FOR TRAINING FARM WORKERS.

    ‘(a) DEFINITION OF ELIGIBLE ORGANIZATION- In this section, the term ‘eligible organization’ means--

      ‘(1) a nonprofit organization; or

      ‘(2) a consortium of nonprofit organizations, agribusinesses, State and local governments, agricultural labor organizations, farmer cooperatives, or community-based organizations;

    that has the ability to train farm workers.

    ‘(b) GRANTS- The Secretary shall make grants to eligible organizations to provide training to farm workers--

      ‘(1) on the use of technology in agriculture; and

      ‘(2) to develop the specialized skills necessary to produce higher value crops.

    ‘(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 2006.’.

SEC. 647. DELTA REGIONAL AUTHORITY.

    (a) 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) 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, may--

      ‘(1) 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 382F(b)); and

      ‘(2) use amounts made available to carry out this subtitle to pay all or a portion of 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.’.

    (b) 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 ‘2006’.

    (c) 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 ‘2006’.

    (d) 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 646) is amended by adding at the end the following:

‘SEC. 379F. 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 2006.’.

    (e) 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. 648. SEARCH GRANTS FOR SMALL COMMUNITIES.

    The Consolidated Farm and Rural Development Act (as amended by section 604) is amended by adding at the end the following:

‘Subtitle J--SEARCH Grants for Small Communities

‘SEC. 386A. DEFINITIONS.

    ‘In this subtitle:

      ‘(1) COUNCIL- The term ‘council’ means an independent citizens’ council established by section 386B(d).

      ‘(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 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 Governor of the State.

      ‘(4) SEARCH GRANT- The term ‘SEARCH grant’ means a grant for special environmental assistance for the regulation of communities and habitat awarded under section 386B(e)(3).

      ‘(5) SMALL COMMUNITY- The term ‘small community’ means an incorporated or unincorporated rural community with a population of 2,500 inhabitants or less.

      ‘(6) STATE- The term ‘State’ has the meaning given the term in section 381A(1).

‘SEC. 386B. SEARCH GRANT PROGRAM.

    ‘(a) IN GENERAL- There is established the SEARCH Grant Program.

    ‘(b) APPLICATION-

      ‘(1) IN GENERAL- Not later than October 1 of each fiscal year, a State may submit to the Secretary an application to receive a grant under subsection (c) for the fiscal year.

      ‘(2) REQUIREMENTS- An application under paragraph (1) shall contain--

        ‘(A) a certification by the State that the State has appointed members to the council of the State under subsection (c)(2)(C); and

        ‘(B) such information as the Secretary may reasonably require.

    ‘(c) GRANTS TO STATES-

      ‘(1) IN GENERAL- Not later than 60 days after the date on which the Office of Management and Budget apportions any amounts made available under this subtitle, for each fiscal year after the date of enactment of this subtitle, the Secretary shall, on request by a State--

        ‘(A) determine whether any application submitted by the State under subsection (b) meets the requirements of subsection (b)(2); and

        ‘(B) subject to paragraph (2), subsection (e)(4)(B)(ii), and section 386D(b), if the Secretary determines that the application meets the requirements of subsection (b)(2), award a grant of not to exceed $1,000,000 to the State, to be used by the council of the State to award SEARCH grants under subsection (e).

      ‘(2) GRANTS TO CERTAIN STATES- The aggregate amount of grants awarded to States other than Alaska, Hawaii, or 1 of the 48 contiguous States, under this subsection shall not exceed $1,000,000 for any fiscal year.

    ‘(d) INDEPENDENT CITIZENS’ COUNCIL-

      ‘(1) ESTABLISHMENT- There is established in each State an independent citizens’ council to carry out the duties described in this section.

      ‘(2) COMPOSITION-

        ‘(A) IN GENERAL- Each council shall be composed of 9 members, appointed by the Governor of the State.

        ‘(B) REPRESENTATION; RESIDENCE- Each member of a council shall--

          ‘(i) represent an individual region of the State, as determined by the Governor of the State in which the council is established;

          ‘(ii) reside in a small community of the State; and

          ‘(iii) be representative of the populations of the State.

        ‘(C) APPOINTMENT- Before a State receives funds under this subtitle, the State shall appoint members to the council for the fiscal year, except that not more than 1 member shall be an agent, employee, or official of the State government.

        ‘(D) CHAIRPERSON- Each council shall select a chairperson from among the members of the council, except that a member who is an agent, employee, or official of the State government shall not serve as chairperson.

        ‘(E) FEDERAL REPRESENTATION-

          ‘(i) IN GENERAL- An officer, employee, or agent of the Federal Government may participate in the activities of the council--

            ‘(I) in an advisory capacity; and

            ‘(II) at the invitation of the council.

          ‘(ii) RURAL DEVELOPMENT STATE DIRECTORS- On the request of the council of a State, the State Director for Rural Development of the State shall provide advice and consultation to the council.

      ‘(3) SEARCH GRANTS-

        ‘(A) IN GENERAL- Each council shall review applications for, and recommend awards of, SEARCH grants to small communities that meet the eligibility criteria under subsection (c).

        ‘(B) RECOMMENDATIONS- In awarding a SEARCH grant, a State--

          ‘(i) shall follow the recommendations of the council of the State;

          ‘(ii) shall award the funds for any recommended environmental project in a timely and expeditious manner; and

          ‘(iii) shall not award a SEARCH grant to a grantee or project in violation of any law of the State (including a regulation).

        ‘(C) NO MATCHING REQUIREMENT- A small community that receives a SEARCH grant under this section shall not be required to provide matching funds.

    ‘(e) SEARCH GRANTS FOR SMALL COMMUNITIES-

      ‘(1) 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--

        ‘(A) needs funds to carry out initial feasibility or environmental studies before applying to traditional funding sources; or

        ‘(B) demonstrates, to the satisfaction of the council, that the small community has been unable to obtain sufficient funding from traditional funding sources.

      ‘(2) APPLICATION-

        ‘(A) DATE- The council shall establish such deadline by which small communities shall submit applications for grants under this section as will permit the council adequate time to review and make recommendations relating to the applications.

        ‘(B) LOCATION OF APPLICATION- A small community shall submit an application described in subparagraph (A) to the council in the State in which the small community is located.

        ‘(C) CONTENT OF APPLICATION- An application described in subparagraph (A) shall include--

          ‘(i) a description of the proposed environmental project (including an explanation of how the project would assist the small community in complying with an environmental law (including a regulation));

          ‘(ii) an explanation of why the project is important to the small community;

          ‘(iii) a description of all actions taken with respect to the project, including a description of any attempt to secure funding and a description of demonstrated need for funding for the project, as of the date of the application; and

          ‘(iv) a SEARCH grant application form provided by the council, completed and with all required supporting documentation.

      ‘(3) REVIEW AND RECOMMENDATION-

        ‘(A) IN GENERAL- Except as provided in subparagraph (B), not later than March 5 of each fiscal year, each council shall--

          ‘(i) review all applications received under paragraph (2); and

          ‘(ii) recommend for award SEARCH grants to small communities based on--

            ‘(I) an evaluation of the eligibility criteria under paragraph (1); and

            ‘(II) the content of the application.

        ‘(B) EXTENSION OF DEADLINE- The State may extend the deadline described in subparagraph (A) by not more than 10 days in a case in which the receipt of recommendations from a council under subparagraph (A)(ii) is delayed because of circumstances beyond the control of the council, as determined by the State.

      ‘(4) UNEXPENDED FUNDS-

        ‘(A) IN GENERAL- If, for any fiscal year, any unexpended funds remain after SEARCH grants are awarded under subsection (d)(3)(B), the council may repeat the application and review process so that any remaining funds may be recommended for award, and awarded, not later than July 30 of the fiscal year.

        ‘(B) RETENTION OF FUNDS-

          ‘(i) IN GENERAL- Any unexpended funds that are not awarded under subsection (d)(3)(B) or subparagraph (A) shall be retained by the State for award during the following fiscal year.

          ‘(ii) LIMITATION- A State that accumulates a balance of unexpended funds described in clause (i) of more than $3,000,000 shall be ineligible to apply for additional funds for SEARCH grants until such time as the State expends the portion of the balance that exceeds $3,000,000.

‘SEC. 386C. REPORT.

    ‘Not later than September 1 of the first fiscal year for which a SEARCH grant is awarded by a council, and annually thereafter, the council shall submit to the Secretary 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 fiscal year before the fiscal year in which the report is submitted.

‘SEC. 386D. FUNDING.

    ‘(a) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out section 386B(c) $51,000,000, of which not to exceed $1,000,000 shall be used to make grants under section 386B(c)(2).

    ‘(b) ACTUAL APPROPRIATION- If funds to carry out section 386B(c) are made available for a fiscal year in an amount that is less than the amount authorized under subsection (a) for the fiscal year, the appropriated funds shall be divided equally among the 50 States.

    ‘(c) UNUSED FUNDS- If, for any fiscal year, a State does not apply, or does not qualify, to receive funds under section 386B(b), the funds that would have been made available to the State under section 386B(c) on submission by the State of a successful application under section 386B(b) shall be redistributed for award under this subtitle among States, the councils of which awarded 1 or more SEARCH grants during the preceding fiscal year.

    ‘(d) OTHER EXPENSES- There are authorized to be appropriated such sums as are necessary to carry out the provisions of this subtitle (other than section 386B(c)).’.

SEC. 649. NORTHERN GREAT PLAINS REGIONAL AUTHORITY.

    The Consolidated Farm and Rural Development Act (as amended by section 648) is amended by adding at the end the following:

‘Subtitle K--Northern Great Plains Regional Authority

‘SEC. 387A. DEFINITIONS.

    ‘In this subtitle:

      ‘(1) AUTHORITY- The term ‘Authority’ means the Northern Great Plains Regional Authority established by section 387B.

      ‘(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. 387B. 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 387I.

      ‘(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. 387C. 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 387I--

      ‘(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.

      ‘(3) FEDERAL SHARE IN GRANT PROGRAMS- Notwithstanding any provision of law limiting the Federal share in any grant program, funds appropriated to carry out this section may be used to increase a Federal share in a grant program, as the Authority determines appropriate.

‘SEC. 387D. 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, may--

      ‘(1) 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 387F(b)); and

      ‘(2) use amounts made available to carry out this subtitle to pay all or a portion of 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 387I--

          ‘(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. 387E. 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. 387F. 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 387M 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 387D(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 this subsection, 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 387E(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 387M for transportation, telecommunication, and basic public infrastructure projects authorized under paragraphs (1) and (3) of section 387C(a).

‘SEC. 387G. 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 387B(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. 387H. 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 assis