H.R. 6124 (110th): Food, Conservation, and Energy Act of 2008

110th Congress, 2007–2009. Text as of Jun 12, 2008 (Passed Congress/Enrolled Bill).

Status & Summary | PDF | Source: GPO

I

One Hundred Tenth Congress of the United States of America

At the Second Session

H. R. 6124

AN ACT

To provide for the continuation of agricultural and other programs of the Department of Agriculture through fiscal year 2012, and for other purposes.

1.

Short title; table of contents

(a)

Short Title

This Act may be cited as the Food, Conservation, and Energy Act of 2008.

(b)

Table of contents

The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Definition of Secretary.

Sec. 3. Explanatory Statement.

Sec. 4. Repeal of duplicative enactment.

TITLE I—Commodity programs

Sec. 1001. Definitions.

Subtitle A—Direct Payments and Counter-Cyclical Payments

Sec. 1101. Base acres.

Sec. 1102. Payment yields.

Sec. 1103. Availability of direct payments.

Sec. 1104. Availability of counter-cyclical payments.

Sec. 1105. Average crop revenue election program.

Sec. 1106. Producer agreement required as condition of provision of payments.

Sec. 1107. Planting flexibility.

Sec. 1108. Special rule for long grain and medium grain rice.

Sec. 1109. Period of effectiveness.

Subtitle B—Marketing assistance loans and loan deficiency payments

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

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

Sec. 1203. Term of loans.

Sec. 1204. Repayment of loans.

Sec. 1205. Loan deficiency payments.

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

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

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

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

Sec. 1210. Adjustments of loans.

Subtitle C—Peanuts

Sec. 1301. Definitions.

Sec. 1302. Base acres for peanuts for a farm.

Sec. 1303. Availability of direct payments for peanuts.

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

Sec. 1305. Producer agreement required as condition on provision of payments.

Sec. 1306. Planting flexibility.

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

Sec. 1308. Adjustments of loans.

Subtitle D—Sugar

Sec. 1401. Sugar program.

Sec. 1402. United States membership in the International Sugar Organization.

Sec. 1403. Flexible marketing allotments for sugar.

Sec. 1404. Storage facility loans.

Sec. 1405. Commodity Credit Corporation storage payments.

Subtitle E—Dairy

Sec. 1501. Dairy product price support program.

Sec. 1502. Dairy forward pricing program.

Sec. 1503. Dairy export incentive program.

Sec. 1504. Revision of Federal marketing order amendment procedures.

Sec. 1505. Dairy indemnity program.

Sec. 1506. Milk income loss contract program.

Sec. 1507. Dairy promotion and research program.

Sec. 1508. Report on Department of Agriculture reporting procedures for nonfat dry milk.

Sec. 1509. Federal Milk Marketing Order Review Commission.

Sec. 1510. Mandatory reporting of dairy commodities.

Subtitle F—Administration

Sec. 1601. Administration generally.

Sec. 1602. Suspension of permanent price support authority.

Sec. 1603. Payment limitations.

Sec. 1604. Adjusted gross income limitation.

Sec. 1605. Availability of quality incentive payments for covered oilseed producers.

Sec. 1606. Personal liability of producers for deficiencies.

Sec. 1607. Extension of existing administrative authority regarding loans.

Sec. 1608. Assignment of payments.

Sec. 1609. Tracking of benefits.

Sec. 1610. Government publication of cotton price forecasts.

Sec. 1611. Prevention of deceased individuals receiving payments under farm commodity programs.

Sec. 1612. Hard white wheat development program.

Sec. 1613. Durum wheat quality program.

Sec. 1614. Storage facility loans.

Sec. 1615. State, county, and area committees.

Sec. 1616. Prohibition on charging certain fees.

Sec. 1617. Signature authority.

Sec. 1618. Modernization of Farm Service Agency.

Sec. 1619. Information gathering.

Sec. 1620. Leasing of office space.

Sec. 1621. Geographically disadvantaged farmers and ranchers.

Sec. 1622. Implementation.

Sec. 1623. Repeals.

TITLE II—Conservation

Subtitle A—Definitions and Highly Erodible Land and Wetland Conservation

Sec. 2001. Definitions relating to conservation title of Food Security Act of 1985.

Sec. 2002. Review of good faith determinations related to highly erodible land conservation.

Sec. 2003. Review of good faith determinations related to wetland conservation.

Subtitle B—Conservation Reserve Program

Sec. 2101. Extension of conservation reserve program.

Sec. 2102. Land eligible for enrollment in conservation reserve.

Sec. 2103. Maximum enrollment of acreage in conservation reserve.

Sec. 2104. Designation of conservation priority areas.

Sec. 2105. Treatment of multi-year grasses and legumes.

Sec. 2106. Revised pilot program for enrollment of wetland and buffer acreage in conservation reserve.

Sec. 2107. Additional duty of participants under conservation reserve contracts.

Sec. 2108. Managed haying, grazing, or other commercial use of forage on enrolled land and installation of wind turbines.

Sec. 2109. Cost sharing payments relating to trees, windbreaks, shelterbelts, and wildlife corridors.

Sec. 2110. Evaluation and acceptance of contract offers, annual rental payments, and payment limitations.

Sec. 2111. Conservation reserve program transition incentives for beginning farmers or ranchers and socially disadvantaged farmers or ranchers.

Subtitle C—Wetlands Reserve Program

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

Sec. 2202. Maximum enrollment and enrollment methods.

Sec. 2203. Duration of wetlands reserve program and lands eligible for enrollment.

Sec. 2204. Terms of wetlands reserve program easements.

Sec. 2205. Compensation for easements under wetlands reserve program.

Sec. 2206. Wetlands reserve enhancement program and reserved rights pilot program.

Sec. 2207. Duties of Secretary of Agriculture under wetlands reserve program.

Sec. 2208. Payment limitations under wetlands reserve contracts and agreements.

Sec. 2209. Repeal of payment limitations exception for State agreements for wetlands reserve enhancement.

Sec. 2210. Report on implications of long-term nature of conservation easements.

Subtitle D—Conservation Stewardship Program

Sec. 2301. Conservation stewardship program.

Subtitle E—Farmland Protection and Grassland Reserve

Sec. 2401. Farmland protection program.

Sec. 2402. Farm viability program.

Sec. 2403. Grassland reserve program.

Subtitle F—Environmental Quality Incentives Program

Sec. 2501. Purposes of environmental quality incentives program.

Sec. 2502. Definitions.

Sec. 2503. Establishment and administration of environmental quality incentives program.

Sec. 2504. Evaluation of applications.

Sec. 2505. Duties of producers under environmental quality incentives program.

Sec. 2506. Environmental quality incentives program plan.

Sec. 2507. Duties of the Secretary.

Sec. 2508. Limitation on environmental quality incentives program payments.

Sec. 2509. Conservation innovation grants and payments.

Sec. 2510. Agricultural water enhancement program.

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

Sec. 2601. Conservation of private grazing land.

Sec. 2602. Wildlife habitat incentive program.

Sec. 2603. Grassroots source water protection program.

Sec. 2604. Great Lakes Basin Program for soil erosion and sediment control.

Sec. 2605. Chesapeake Bay watershed program.

Sec. 2606. Voluntary public access and habitat incentive program.

Subtitle H—Funding and Administration of Conservation Programs

Sec. 2701. Funding of conservation programs under Food Security Act of 1985.

Sec. 2702. Authority to accept contributions to support conservation programs.

Sec. 2703. Regional equity and flexibility.

Sec. 2704. Assistance to certain farmers and ranchers to improve their access to conservation programs.

Sec. 2705. Report regarding enrollments and assistance under conservation programs.

Sec. 2706. Delivery of conservation technical assistance.

Sec. 2707. Cooperative conservation partnership initiative.

Sec. 2708. Administrative requirements for conservation programs.

Sec. 2709. Environmental services markets.

Sec. 2710. Agriculture conservation experienced services program.

Sec. 2711. Establishment of State technical committees and their responsibilities.

Subtitle I—Conservation Programs Under Other Laws

Sec. 2801. Agricultural management assistance program.

Sec. 2802. Technical assistance under Soil Conservation and Domestic Allotment Act.

Sec. 2803. Small watershed rehabilitation program.

Sec. 2804. Amendments to Soil and Water Resources Conservation Act of 1977.

Sec. 2805. Resource Conservation and Development Program.

Sec. 2806. Use of funds in Basin Funds for salinity control activities upstream of Imperial Dam.

Sec. 2807. Desert terminal lakes.

Subtitle J—Miscellaneous Conservation Provisions

Sec. 2901. High Plains water study.

Sec. 2902. Naming of National Plant Materials Center at Beltsville, Maryland, in honor of Norman A. Berg.

Sec. 2903. Transition.

Sec. 2904. Regulations.

TITLE III—Trade

Subtitle A—Food for Peace Act

Sec. 3001. Short title.

Sec. 3002. United States policy.

Sec. 3003. Food aid to developing countries.

Sec. 3004. Trade and development assistance.

Sec. 3005. Agreements regarding eligible countries and private entities.

Sec. 3006. Use of local currency payments.

Sec. 3007. General authority.

Sec. 3008. Provision of agricultural commodities.

Sec. 3009. Generation and use of currencies by private voluntary organizations and cooperatives.

Sec. 3010. Levels of assistance.

Sec. 3011. Food Aid Consultative Group.

Sec. 3012. Administration.

Sec. 3013. Assistance for stockpiling and rapid transportation, delivery, and distribution of shelf-stable prepackaged foods.

Sec. 3014. General authorities and requirements.

Sec. 3015. Definitions.

Sec. 3016. Use of Commodity Credit Corporation.

Sec. 3017. Administrative provisions.

Sec. 3018. Consolidation and modification of annual reports regarding agricultural trade issues.

Sec. 3019. Expiration of assistance.

Sec. 3020. Authorization of appropriations.

Sec. 3021. Minimum level of nonemergency food assistance.

Sec. 3022. Coordination of foreign assistance programs.

Sec. 3023. Micronutrient fortification programs.

Sec. 3024. John Ogonowski and Doug Bereuter Farmer-to-Farmer Program.

Subtitle B—Agricultural Trade Act of 1978 and Related Statutes

Sec. 3101. Export credit guarantee program.

Sec. 3102. Market access program.

Sec. 3103. Export enhancement program.

Sec. 3104. Foreign market development cooperator program.

Sec. 3105. Food for Progress Act of 1985.

Sec. 3106. McGovern-Dole International Food for Education and Child Nutrition Program.

Subtitle C—Miscellaneous

Sec. 3201. Bill Emerson Humanitarian Trust.

Sec. 3202. Global Crop Diversity Trust.

Sec. 3203. Technical assistance for specialty crops.

Sec. 3204. Emerging markets and facility guarantee loan program.

Sec. 3205. Consultative Group to Eliminate the Use of Child Labor and Forced Labor in Imported Agricultural Products.

Sec. 3206. Local and regional food aid procurement projects.

Subtitle D—Softwood lumber

Sec. 3301. Softwood lumber.

TITLE IV—Nutrition

Subtitle A—Food stamp program

PART I—Renaming of Food Stamp Act and program

Sec. 4001. Renaming of Food Stamp Act and program.

Sec. 4002. Conforming amendments.

PART II—Benefit improvements

Sec. 4101. Exclusion of certain military payments from income.

Sec. 4102. Strengthening the food purchasing power of low-income Americans.

Sec. 4103. Supporting working families with child care expenses.

Sec. 4104. Asset indexation, education, and retirement accounts.

Sec. 4105. Facilitating simplified reporting.

Sec. 4106. Transitional benefits option.

Sec. 4107. Increasing the minimum benefit.

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

PART III—Program operations

Sec. 4111. Nutrition education.

Sec. 4112. Technical clarification regarding eligibility.

Sec. 4113. Clarification of split issuance.

Sec. 4114. Accrual of benefits.

Sec. 4115. Issuance and use of program benefits.

Sec. 4116. Review of major changes in program design.

Sec. 4117. Civil rights compliance.

Sec. 4118. Codification of access rules.

Sec. 4119. State option for telephonic signature.

Sec. 4120. Privacy protections.

Sec. 4121. Preservation of access and payment accuracy.

Sec. 4122. Funding of employment and training programs.

PART IV—Program integrity

Sec. 4131. Eligibility disqualification.

Sec. 4132. Civil penalties and disqualification of retail food stores and wholesale food concerns.

Sec. 4133. Major systems failures.

PART V—Miscellaneous

Sec. 4141. Pilot projects to evaluate health and nutrition promotion in the supplemental nutrition assistance program.

Sec. 4142. Study on comparable access to supplemental nutrition assistance for Puerto Rico.

Subtitle B—Food distribution programs

PART I—Emergency food assistance program

Sec. 4201. Emergency food assistance.

Sec. 4202. Emergency food program infrastructure grants.

PART II—Food distribution program on Indian reservations

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

PART III—Commodity supplemental food program

Sec. 4221. Commodity supplemental food program.

PART IV—Senior farmers’ market nutrition program

Sec. 4231. Seniors farmers’ market nutrition program.

Subtitle C—Child nutrition and related programs

Sec. 4301. State performance on enrolling children receiving program benefits for free school meals.

Sec. 4302. Purchases of locally produced foods.

Sec. 4303. Healthy food education and program replicability.

Sec. 4304. Fresh fruit and vegetable program.

Sec. 4305. Whole grain products.

Sec. 4306. Buy American requirements.

Sec. 4307. Survey of foods purchased by school food authorities.

Subtitle D—Miscellaneous

Sec. 4401. Bill Emerson National Hunger Fellows and Mickey Leland International Hunger Fellows.

Sec. 4402. Assistance for community food projects.

Sec. 4403. Joint nutrition monitoring and related research activities.

Sec. 4404. Section 32 funds for purchase of fruits, vegetables, and nuts to support domestic nutrition assistance programs.

Sec. 4405. Hunger-free communities.

Sec. 4406. Reauthorization of Federal food assistance programs.

Sec. 4407. Effective and implementation dates.

TITLE V—Credit

Subtitle A—Farm Ownership Loans

Sec. 5001. Direct loans.

Sec. 5002. Conservation loan and loan guarantee program.

Sec. 5003. Limitations on amount of farm ownership loans.

Sec. 5004. Down payment loan program.

Sec. 5005. Beginning farmer or rancher and socially disadvantaged farmer or rancher contract land sales program.

Subtitle B—Operating loans

Sec. 5101. Farming experience as eligibility requirement.

Sec. 5102. Limitations on amount of operating loans.

Sec. 5103. Suspension of limitation on period for which borrowers are eligible for guaranteed assistance.

Subtitle C—Emergency loans

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

Subtitle D—Administrative provisions

Sec. 5301. Beginning farmer and rancher individual development accounts pilot program.

Sec. 5302. Inventory sales preferences; loan fund set-asides.

Sec. 5303. Loan authorization levels.

Sec. 5304. Transition to private commercial or other sources of credit.

Sec. 5305. Extension of the right of first refusal to reacquire homestead property to immediate family members of borrower-owner.

Sec. 5306. Rural development and farm loan program activities.

Subtitle E—Farm credit

Sec. 5401. Farm Credit System Insurance Corporation.

Sec. 5402. Technical correction.

Sec. 5403. Bank for cooperatives voting stock.

Sec. 5404. Premiums.

Sec. 5405. Certification of premiums.

Sec. 5406. Rural utility loans.

Sec. 5407. Equalization of loan-making powers of certain district associations.

Subtitle F—Miscellaneous

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

TITLE VI—Rural development

Subtitle A—Consolidated Farm and Rural Development Act

Sec. 6001. Water, waste disposal, and wastewater facility grants.

Sec. 6002. SEARCH grants.

Sec. 6003. Rural business opportunity grants.

Sec. 6004. Child day care facility grants, loans, and loan guarantees.

Sec. 6005. Community facility grants to advance broadband.

Sec. 6006. Rural water and wastewater circuit rider program.

Sec. 6007. Tribal College and University essential community facilities.

Sec. 6008. Emergency and imminent community water assistance grant program.

Sec. 6009. Water systems for rural and native villages in Alaska.

Sec. 6010. Grants to nonprofit organizations to finance the construction, refurbishing, and servicing of individually-owned household water well systems in rural areas for individuals with low or moderate incomes.

Sec. 6011. Interest rates for water and waste disposal facilities loans.

Sec. 6012. Cooperative equity security guarantee.

Sec. 6013. Rural cooperative development grants.

Sec. 6014. Grants to broadcasting systems.

Sec. 6015. Locally or regionally produced agricultural food products.

Sec. 6016. Appropriate technology transfer for rural areas.

Sec. 6017. Rural economic area partnership zones.

Sec. 6018. Definitions.

Sec. 6019. National rural development partnership.

Sec. 6020. Historic barn preservation.

Sec. 6021. Grants for NOAA weather radio transmitters.

Sec. 6022. Rural microentrepreneur assistance program.

Sec. 6023. Grants for expansion of employment opportunities for individuals with disabilities in rural areas.

Sec. 6024. Health care services.

Sec. 6025. Delta Regional Authority.

Sec. 6026. Northern Great Plains Regional Authority.

Sec. 6027. Rural Business Investment Program.

Sec. 6028. Rural Collaborative Investment Program.

Sec. 6029. Funding of pending rural development loan and grant applications.

Subtitle B—Rural Electrification Act of 1936

Sec. 6101. Energy efficiency programs.

Sec. 6102. Reinstatement of Rural Utility Services direct lending.

Sec. 6103. Deferment of payments to allows loans for improved energy efficiency and demand reduction and for energy efficiency and use audits.

Sec. 6104. Rural electrification assistance.

Sec. 6105. Substantially underserved trust areas.

Sec. 6106. Guarantees for bonds and notes issued for electrification or telephone purposes.

Sec. 6107. Expansion of 911 access.

Sec. 6108. Electric loans for renewable energy.

Sec. 6109. Bonding requirements.

Sec. 6110. Access to broadband telecommunications services in rural areas.

Sec. 6111. National Center for Rural Telecommunications Assessment.

Sec. 6112. Comprehensive rural broadband strategy.

Sec. 6113. Study on rural electric power generation.

Subtitle C—Miscellaneous

Sec. 6201. Distance learning and telemedicine.

Sec. 6202. Value-added agricultural market development program grants.

Sec. 6203. Agriculture innovation center demonstration program.

Sec. 6204. Rural firefighters and emergency medical service assistance program.

Sec. 6205. Insurance of loans for housing and related facilities for domestic farm labor.

Sec. 6206. Study of rural transportation issues.

Subtitle D—Housing Assistance Council

Sec. 6301. Short title.

Sec. 6302. Assistance to Housing Assistance Council.

Sec. 6303. Audits and reports.

Sec. 6304. Persons not lawfully present in the United States.

Sec. 6305. Limitation on use of authorized amounts.

TITLE VII—Research and Related Matters

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

Sec. 7101. Definitions.

Sec. 7102. National Agricultural Research, Extension, Education, and Economics Advisory Board.

Sec. 7103. Specialty crop committee report.

Sec. 7104. Renewable energy committee.

Sec. 7105. Veterinary medicine loan repayment.

Sec. 7106. Eligibility of University of the District of Columbia for grants and fellowships for food and agricultural sciences education.

Sec. 7107. Grants to 1890 schools to expand extension capacity.

Sec. 7108. Expansion of food and agricultural sciences awards.

Sec. 7109. Grants and fellowships for food and agricultural sciences education.

Sec. 7110. Grants for research on production and marketing of alcohols and industrial hydrocarbons from agricultural commodities and forest products.

Sec. 7111. Policy research centers.

Sec. 7112. Education grants to Alaska Native-serving institutions and Native Hawaiian-serving institutions.

Sec. 7113. Emphasis of human nutrition initiative.

Sec. 7114. Human nutrition intervention and health promotion research program.

Sec. 7115. Pilot research program to combine medical and agricultural research.

Sec. 7116. Nutrition education program.

Sec. 7117. Continuing animal health and disease research programs.

Sec. 7118. Cooperation among eligible institutions.

Sec. 7119. Appropriations for research on national or regional problems.

Sec. 7120. Animal health and disease research program.

Sec. 7121. Authorization level for extension at 1890 land-grant colleges.

Sec. 7122. Authorization level for agricultural research at 1890 land-grant colleges.

Sec. 7123. Grants to upgrade agricultural and food sciences facilities at 1890 land-grant colleges, including Tuskegee University.

Sec. 7124. Grants to upgrade agriculture and food sciences facilities at the District of Columbia land-grant university.

Sec. 7125. Grants to upgrade agriculture and food sciences facilities and equipment at insular area land-grant institutions.

Sec. 7126. National research and training virtual centers.

Sec. 7127. Matching funds requirement for research and extension activities of 1890 institutions.

Sec. 7128. Hispanic-serving institutions.

Sec. 7129. Hispanic-serving agricultural colleges and universities.

Sec. 7130. International agricultural research, extension, and education.

Sec. 7131. Competitive grants for international agricultural science and education programs.

Sec. 7132. Administration.

Sec. 7133. Research equipment grants.

Sec. 7134. University research.

Sec. 7135. Extension Service.

Sec. 7136. Supplemental and alternative crops.

Sec. 7137. New Era Rural Technology Program.

Sec. 7138. Capacity building grants for NLGCA Institutions.

Sec. 7139. Borlaug international agricultural science and technology fellowship program.

Sec. 7140. Aquaculture assistance programs.

Sec. 7141. Rangeland research grants.

Sec. 7142. Special authorization for biosecurity planning and response.

Sec. 7143. Resident instruction and distance education grants program for insular area institutions of higher education.

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

Sec. 7201. National genetics resources program.

Sec. 7202. National Agricultural Weather Information System.

Sec. 7203. Partnerships.

Sec. 7204. High-priority research and extension areas.

Sec. 7205. Nutrient management research and extension initiative.

Sec. 7206. Organic Agriculture Research and Extension Initiative.

Sec. 7207. Agricultural bioenergy feedstock and energy efficiency research and extension initiative.

Sec. 7208. Farm business management and benchmarking.

Sec. 7209. Agricultural telecommunications program.

Sec. 7210. Assistive technology program for farmers with disabilities.

Sec. 7211. Research on honey bee diseases.

Sec. 7212. National Rural Information Center Clearinghouse.

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

Sec. 7301. Peer and merit review.

Sec. 7302. Partnerships for high-value agricultural product quality research.

Sec. 7303. Precision agriculture.

Sec. 7304. Biobased products.

Sec. 7305. Thomas Jefferson Initiative for Crop Diversification.

Sec. 7306. Integrated research, education, and extension competitive grants program.

Sec. 7307. Fusarium graminearum grants.

Sec. 7308. Bovine Johne's disease control program.

Sec. 7309. Grants for youth organizations.

Sec. 7310. Agricultural biotechnology research and development for developing countries.

Sec. 7311. Specialty crop research initiative.

Sec. 7312. Food animal residue avoidance database program.

Sec. 7313. Office of pest management policy.

Subtitle D—Other Laws

Sec. 7401. Critical Agricultural Materials Act.

Sec. 7402. Equity in Educational Land-Grant Status Act of 1994.

Sec. 7403. Smith-Lever Act.

Sec. 7404. Hatch Act of 1887.

Sec. 7405. Agricultural Experiment Station Research Facilities Act.

Sec. 7406. Agriculture and food research initiative.

Sec. 7407. Agricultural Risk Protection Act of 2000.

Sec. 7408. Exchange or sale authority.

Sec. 7409. Enhanced use lease authority pilot program.

Sec. 7410. Beginning farmer and rancher development program.

Sec. 7411. Public education regarding use of biotechnology in producing food for human consumption.

Sec. 7412. McIntire-Stennis Cooperative Forestry Act.

Sec. 7413. Renewable Resources Extension Act of 1978.

Sec. 7414. National Aquaculture Act of 1980.

Sec. 7415. Construction of Chinese Garden at the National Arboretum.

Sec. 7416. National Agricultural Research, Extension, and Teaching Policy Act Amendments of 1985.

Sec. 7417. Eligibility of University of the District of Columbia for certain land-grant university assistance.

Subtitle E—Miscellaneous

PART I—General Provisions

Sec. 7501. Definitions.

Sec. 7502. Grazinglands research laboratory.

Sec. 7503. Fort Reno Science Park Research Facility.

Sec. 7504. Roadmap.

Sec. 7505. Review of plan of work requirements.

Sec. 7506. Budget submission and funding.

PART II—Research, education, and economics

Sec. 7511. Research, education, and economics.

PART III—New grant and research programs

Sec. 7521. Research and education grants for the study of antibiotic-resistant bacteria.

Sec. 7522. Farm and ranch stress assistance network.

Sec. 7523. Seed distribution.

Sec. 7524. Live virus foot and mouth disease research.

Sec. 7525. Natural products research program.

Sec. 7526. Sun grant program.

Sec. 7527. Study and report on food deserts.

Sec. 7528. Demonstration project authority for temporary positions.

Sec. 7529. Agricultural and rural transportation research and education.

TITLE VIII—Forestry

Subtitle A—Amendments to Cooperative Forestry Assistance Act of 1978

Sec. 8001. National priorities for private forest conservation.

Sec. 8002. Long-term State-wide assessments and strategies for forest resources.

Sec. 8003. Community forest and open space conservation program.

Sec. 8004. Assistance to the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau.

Sec. 8005. Changes to Forest Resource Coordinating Committee.

Sec. 8006. Changes to State Forest Stewardship Coordinating Committees.

Sec. 8007. Competition in programs under Cooperative Forestry Assistance Act of 1978.

Sec. 8008. Competitive allocation of funds for cooperative forest innovation partnership projects.

Subtitle B—Cultural and Heritage Cooperation Authority

Sec. 8101. Purposes.

Sec. 8102. Definitions.

Sec. 8103. Reburial of human remains and cultural items.

Sec. 8104. Temporary closure for traditional and cultural purposes.

Sec. 8105. Forest products for traditional and cultural purposes.

Sec. 8106. Prohibition on disclosure.

Sec. 8107. Severability and savings provisions.

Subtitle C—Amendments to Other Forestry-Related Laws

Sec. 8201. Rural revitalization technologies.

Sec. 8202. Office of International Forestry.

Sec. 8203. Emergency forest restoration program.

Sec. 8204. Prevention of illegal logging practices.

Sec. 8205. Healthy forests reserve program.

Subtitle D—Boundary Adjustments and Land Conveyance Provisions

Sec. 8301. Green Mountain National Forest boundary adjustment.

Sec. 8302. Land conveyances, Chihuahuan Desert Nature Park, New Mexico, and George Washington National Forest, Virginia.

Sec. 8303. Sale and exchange of National Forest System land, Vermont.

Subtitle E—Miscellaneous Provisions

Sec. 8401. Qualifying timber contract options.

Sec. 8402. Hispanic-serving institution agricultural land national resources leadership program.

TITLE IX—Energy

Sec. 9001. Energy.

Sec. 9002. Biofuels infrastructure study.

Sec. 9003. Renewable fertilizer study.

TITLE X—Horticulture and organic agriculture

Sec. 10001. Definitions.

Subtitle A—Horticulture marketing and information

Sec. 10101. Independent evaluation of Department of Agriculture commodity purchase process.

Sec. 10102. Quality requirements for clementines.

Sec. 10103. Inclusion of specialty crops in census of agriculture.

Sec. 10104. Mushroom promotion, research, and consumer information.

Sec. 10105. Food safety education initiatives.

Sec. 10106. Farmers' market promotion program.

Sec. 10107. Specialty crops market news allocation.

Sec. 10108. Expedited marketing order for Hass avocados for grades and standards and other purposes.

Sec. 10109. Specialty crop block grants.

Subtitle B—Pest and disease management

Sec. 10201. Plant pest and disease management and disaster prevention.

Sec. 10202. National Clean Plant Network.

Sec. 10203. Plant protection.

Sec. 10204. Regulations to improve management and oversight of certain regulated articles.

Sec. 10205. Pest and Disease Revolving Loan Fund.

Sec. 10206. Cooperative agreements relating to plant pest and disease prevention activities.

Subtitle C—Organic agriculture

Sec. 10301. National organic certification cost-share program.

Sec. 10302. Organic production and market data initiatives.

Sec. 10303. National Organic Program.

Subtitle D—Miscellaneous

Sec. 10401. National Honey Board.

Sec. 10402. Identification of honey.

Sec. 10403. Grant program to improve movement of specialty crops.

Sec. 10404. Market loss assistance for asparagus producers.

TITLE XI—Livestock

Sec. 11001. Livestock mandatory reporting.

Sec. 11002. Country of origin labeling.

Sec. 11003. Agricultural Fair Practices Act of 1967 definitions.

Sec. 11004. Annual report.

Sec. 11005. Production contracts.

Sec. 11006. Regulations.

Sec. 11007. Sense of Congress regarding pseudorabies eradication program.

Sec. 11008. Sense of Congress regarding the cattle fever tick eradication program.

Sec. 11009. National Sheep Industry Improvement Center.

Sec. 11010. Trichinae certification program.

Sec. 11011. Low pathogenic diseases.

Sec. 11012. Animal protection.

Sec. 11013. National Aquatic Animal Health Plan.

Sec. 11014. Study on bioenergy operations.

Sec. 11015. Interstate shipment of meat and poultry inspected by Federal and State agencies for certain small establishments.

Sec. 11016. Inspection and grading.

Sec. 11017. Food safety improvement.

TITLE XII—Crop Insurance and Disaster Assistance Programs

Subtitle A—Crop insurance and disaster assistance

Sec. 12001. Definition of organic crop.

Sec. 12002. General powers.

Sec. 12003. Reduction in loss ratio.

Sec. 12004. Premiums adjustments.

Sec. 12005. Controlled business insurance.

Sec. 12006. Administrative fee.

Sec. 12007. Time for payment.

Sec. 12008. Catastrophic coverage reimbursement rate.

Sec. 12009. Grain sorghum price election.

Sec. 12010. Premium reduction authority.

Sec. 12011. Enterprise and whole farm units.

Sec. 12012. Payment of portion of premium for area revenue plans.

Sec. 12013. Denial of claims.

Sec. 12014. Settlement of crop insurance claims on farm-stored production.

Sec. 12015. Time for reimbursement.

Sec. 12016. Reimbursement rate.

Sec. 12017. Renegotiation of Standard Reinsurance Agreement.

Sec. 12018. Change in due date for Corporation payments for underwriting gains.

Sec. 12019. Malting barley.

Sec. 12020. Crop production on native sod.

Sec. 12021. Information management.

Sec. 12022. Research and development.

Sec. 12023. Contracts for additional policies and studies.

Sec. 12024. Funding from insurance fund.

Sec. 12025. Pilot programs.

Sec. 12026. Risk management education for beginning farmers or ranchers.

Sec. 12027. Coverage for aquaculture under noninsured crop assistance program.

Sec. 12028. Increase in service fees for noninsured crop assistance program.

Sec. 12029. Determination of certain sweet potato production.

Sec. 12030. Declining yield report.

Sec. 12031. Definition of basic unit.

Sec. 12032. Crop insurance mediation.

Sec. 12033. Supplemental agricultural disaster assistance.

Sec. 12034. Fisheries disaster assistance.

Subtitle B—Small Business Disaster Loan Program

Sec. 12051. Short title.

Sec. 12052. Definitions.

PART I—Disaster planning and response

Sec. 12061. Economic injury disaster loans to nonprofits.

Sec. 12062. Coordination of disaster assistance programs with FEMA.

Sec. 12063. Public awareness of disaster declaration and application periods.

Sec. 12064. Consistency between administration regulations and standard operating procedures.

Sec. 12065. Increasing collateral requirements.

Sec. 12066. Processing disaster loans.

Sec. 12067. Information tracking and follow-up system.

Sec. 12068. Increased deferment period.

Sec. 12069. Disaster processing redundancy.

Sec. 12070. Net earnings clauses prohibited.

Sec. 12071. Economic injury disaster loans in cases of ice storms and blizzards.

Sec. 12072. Development and implementation of major disaster response plan.

Sec. 12073. Disaster planning responsibilities.

Sec. 12074. Assignment of employees of the office of disaster assistance and disaster cadre.

Sec. 12075. Comprehensive disaster response plan.

Sec. 12076. Plans to secure sufficient office space.

Sec. 12077. Applicants that have become a major source of employment due to changed economic circumstances.

Sec. 12078. Disaster loan amounts.

Sec. 12079. Small business bonding threshold.

PART II—Disaster lending

Sec. 12081. Eligibility for additional disaster assistance.

Sec. 12082. Additional economic injury disaster loan assistance.

Sec. 12083. Private disaster loans.

Sec. 12084. Immediate Disaster Assistance program.

Sec. 12085. Expedited disaster assistance loan program.

Sec. 12086. Gulf Coast Disaster Loan Refinancing Program.

PART III—Miscellaneous

Sec. 12091. Reports on disaster assistance.

TITLE XIII—Commodity Futures

Sec. 13001. Short title.

Subtitle A—General provisions

Sec. 13101. Commission authority over agreements, contracts or transactions in foreign currency.

Sec. 13102. Anti-fraud authority over principal-to-principal transactions.

Sec. 13103. Criminal and civil penalties.

Sec. 13104. Authorization of appropriations.

Sec. 13105. Technical and conforming amendments.

Sec. 13106. Portfolio margining and security index issues.

Subtitle B—Significant Price Discovery Contracts on Exempt Commercial Markets

Sec. 13201. Significant price discovery contracts.

Sec. 13202. Large trader reporting.

Sec. 13203. Conforming amendments.

Sec. 13204. Effective date.

TITLE XIV—Miscellaneous

Subtitle A—Socially disadvantaged producers and limited resource producers

Sec. 14001. Improved program delivery by Department of Agriculture on Indian reservations.

Sec. 14002. Foreclosure.

Sec. 14003. Receipt for service or denial of service from certain Department of Agriculture agencies.

Sec. 14004. Outreach and technical assistance for socially disadvantaged farmers or ranchers.

Sec. 14005. Accurate documentation in the Census of Agriculture and certain studies.

Sec. 14006. Transparency and accountability for socially disadvantaged farmers or ranchers.

Sec. 14007. Oversight and compliance.

Sec. 14008. Minority Farmer Advisory Committee.

Sec. 14009. National Appeals Division.

Sec. 14010. Report of civil rights complaints, resolutions, and actions.

Sec. 14011. Sense of Congress relating to claims brought by socially disadvantaged farmers or ranchers.

Sec. 14012. Determination on merits of Pigford claims.

Sec. 14013. Office of Advocacy and Outreach.

Subtitle B—Agricultural security

Sec. 14101. Short title.

Sec. 14102. Definitions.

Chapter 1—Agricultural security

Sec. 14111. Office of Homeland Security.

Sec. 14112. Agricultural biosecurity communication center.

Sec. 14113. Assistance to build local capacity in agricultural biosecurity planning, preparedness, and response.

Chapter 2—Other provisions

Sec. 14121. Research and development of agricultural countermeasures.

Sec. 14122. Agricultural biosecurity grant program.

Subtitle C—Other miscellaneous provisions

Sec. 14201. Cotton classification services.

Sec. 14202. Designation of States for cotton research and promotion.

Sec. 14203. Grants to reduce production of methamphetamines from anhydrous ammonia.

Sec. 14204. Grants to improve supply, stability, safety, and training of agricultural labor force.

Sec. 14205. Amendment to the Right to Financial Privacy Act of 1978.

Sec. 14206. Report on stored quantities of propane.

Sec. 14207. Prohibitions on dog fighting ventures.

Sec. 14208. Department of Agriculture conference transparency.

Sec. 14209. Federal Insecticide, Fungicide, and Rodenticide Act amendments.

Sec. 14210. Importation of live dogs.

Sec. 14211. Permanent debarment from participation in Department of Agriculture programs for fraud.

Sec. 14212. Prohibition on closure or relocation of county offices for the Farm Service Agency.

Sec. 14213. USDA Graduate School.

Sec. 14214. Fines for violations of the Animal Welfare Act.

Sec. 14215. Definition of central filing system.

Sec. 14216. Consideration of proposed recommendations of study on use of cats and dogs in Federal research.

Sec. 14217. Regional economic and infrastructure development.

Sec. 14218. Coordinator for chronically underserved rural areas.

Sec. 14219. Elimination of statute of limitations applicable to collection of debt by administrative offset.

Sec. 14220. Availability of excess and surplus computers in rural areas.

Sec. 14221. Repeal of section 3068 of the Water Resources Development Act of 2007.

Sec. 14222. Domestic food assistance programs.

Sec. 14223. Technical correction.

TITLE XV—Trade and tax provisions

Sec. 15001. Short title; etc.

Subtitle A—Supplemental agricultural disaster assistance from the Agricultural Disaster Relief Trust Fund

Sec. 15101. Supplemental agricultural disaster assistance.

Subtitle B—Revenue provisions for agriculture programs

Sec. 15201. Customs User Fees.

Sec. 15202. Time for payment of corporate estimated taxes.

Subtitle C—Tax provisions

PART I—Conservation

SUBPART A—Land and species preservation provisions

Sec. 15301. Exclusion of conservation reserve program payments from SECA tax for certain individuals.

Sec. 15302. Two-year extension of special rule encouraging contributions of capital gain real property for conservation purposes.

Sec. 15303. Deduction for endangered species recovery expenditures.

SUBPART B—Timber provisions

Sec. 15311. Temporary reduction in rate of tax on qualified timber gain of corporations.

Sec. 15312. Timber REIT modernization.

Sec. 15313. Mineral royalty income qualifying income for timber REITs.

Sec. 15314. Modification of taxable REIT subsidiary asset test for timber REITs.

Sec. 15315. Safe harbor for timber property.

Sec. 15316. Qualified forestry conservation bonds.

PART II—Energy provisions

SUBPART A—Cellulosic biofuel

Sec. 15321. Credit for production of cellulosic biofuel.

Sec. 15322. Comprehensive study of biofuels.

SUBPART B—Revenue provisions

Sec. 15331. Modification of alcohol credit.

Sec. 15332. Calculation of volume of alcohol for fuel credits.

Sec. 15333. Ethanol tariff extension.

Sec. 15334. Limitations on duty drawback on certain imported ethanol.

PART III—Agricultural provisions

Sec. 15341. Increase in loan limits on agricultural bonds.

Sec. 15342. Allowance of section 1031 treatment for exchanges involving certain mutual ditch, reservoir, or irrigation company stock.

Sec. 15343. Agricultural chemicals security credit.

Sec. 15344. 3-year depreciation for race horses that are 2-years old or younger.

Sec. 15345. Temporary tax relief for Kiowa County, Kansas and surrounding area.

Sec. 15346. Competitive certification awards modification authority.

PART IV—Other revenue provisions

Sec. 15351. Limitation on excess farm losses of certain taxpayers.

Sec. 15352. Modification to optional method of computing net earnings from self-employment.

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

PART V—Protection of Social Security

Sec. 15361. Protection of social security.

Subtitle D—Trade provisions

PART I—Extension of Certain Trade Benefits

Sec. 15401. Short title.

Sec. 15402. Benefits for apparel and other textile articles.

Sec. 15403. Labor Ombudsman and technical assistance improvement and compliance needs assessment and remediation program.

Sec. 15404. Petition process.

Sec. 15405. Conditions regarding enforcement of circumvention.

Sec. 15406. Presidential proclamation authority.

Sec. 15407. Regulations and procedures.

Sec. 15408. Extension of CBTPA.

Sec. 15409. Sense of Congress on interpretation of textile and apparel provisions for Haiti.

Sec. 15410. Sense of Congress on trade mission to Haiti.

Sec. 15411. Sense of Congress on visa systems.

Sec. 15412. Effective date.

PART II—Miscellaneous trade provisions

Sec. 15421. Unused merchandise drawback.

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

2.

Definition of Secretary

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

3.

Explanatory statement

The Joint Explanatory Statement submitted by the Committee of Conference for the conference report to accompany H.R. 2419 of the 110th Congress (House Report 110-627) shall be deemed to be part of the legislative history of this Act and shall have the same effect with respect to the implementation of this Act as it would have had with respect to the implementation of H.R. 2419.

4.

Repeal of duplicative enactment

(a)

In general

The Act entitled An Act to provide for the continuation of agricultural programs through fiscal year 2012, and for other purposes (H.R. 2419 of the 110th Congress), and the amendments made by that Act, are repealed, effective on the date of enactment of that Act.

(b)

Effective date

Except as otherwise provided in this Act, this Act and the amendments made by this Act shall take effect on the earlier of—

(1)

the date of enactment of this Act; or

(2)

the date of the enactment of the Act entitled An Act to provide for the continuation of agricultural programs through fiscal year 2012, and for other purposes (H.R. 2419 of the 110th Congress).

I

Commodity programs

1001.

Definitions

In this title (other than subtitle C):

(1)

Average crop revenue election payment

The term average crop revenue election payment means a payment made to producers on a farm under section 1105.

(2)

Base acres

(A)

In general

The term base acres, with respect to a covered commodity on a farm, means the number of acres established under section 1101 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7911) as in effect on September 30, 2007, subject to any adjustment under section 1101 of this Act.

(B)

Peanuts

The term base acres for peanuts has the meaning given the term in section 1301.

(3)

Counter-cyclical payment

The term counter-cyclical payment means a payment made to producers on a farm under section 1104.

(4)

Covered commodity

The term covered commodity means wheat, corn, grain sorghum, barley, oats, upland cotton, long grain rice, medium grain rice, pulse crops, soybeans, and other oilseeds.

(5)

Direct payment

The term direct payment means a payment made to producers on a farm under section 1103.

(6)

Effective price

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

(7)

Extra long staple cotton

The term extra long staple cotton means cotton that—

(A)

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

(B)

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

(8)

Loan commodity

The term loan commodity means wheat, corn, grain sorghum, barley, oats, upland cotton, extra long staple cotton, long grain rice, medium grain rice, soybeans, other oilseeds, graded wool, nongraded wool, mohair, honey, dry peas, lentils, small chickpeas, and large chickpeas.

(9)

Medium grain rice

The term medium grain rice includes short grain rice.

(10)

Other oilseed

The term other oilseed means a crop of sunflower seed, rapeseed, canola, safflower, flaxseed, mustard seed, crambe, sesame seed, or any oilseed designated by the Secretary.

(11)

Payment acres

The term payment acres means, in the case of direct payments and counter-cyclical payments—

(A)

except as provided in subparagraph (B), 85 percent of the base acres of a covered commodity on a farm on which direct payments or counter-cyclical payments are made; and

(B)

in the case of direct payments for each of the 2009 through 2011 crop years, 83.3 percent of the base acres for the covered commodity on a farm on which direct payments are made.

(12)

Payment yield

The term payment yield means the yield established for direct payments and the yield established for counter-cyclical payments under section 1102 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7912) as in effect on September 30, 2007, or under section 1102 of this Act, for a farm for a covered commodity.

(13)

Producer

(A)

In general

The term producer means an owner, operator, landlord, tenant, or sharecropper that shares in the risk of producing a crop and is entitled to share in the crop available for marketing from the farm, or would have shared had the crop been produced.

(B)

Hybrid seed

In determining whether a grower of hybrid seed is a producer, the Secretary shall—

(i)

not take into consideration the existence of a hybrid seed contract; and

(ii)

ensure that program requirements do not adversely affect the ability of the grower to receive a payment under this title.

(14)

Pulse crop

The term pulse crop means dry peas, lentils, small chickpeas, and large chickpeas.

(15)

State

The term State means—

(A)

a State;

(B)

the District of Columbia;

(C)

the Commonwealth of Puerto Rico; and

(D)

any other territory or possession of the United States.

(16)

Target price

The term target price means the price per bushel, pound, or hundredweight (or other appropriate unit) of a covered commodity used to determine the payment rate for counter-cyclical payments.

(17)

United States

The term United States, when used in a geographical sense, means all of the States.

(18)

United States premium factor

The term United States Premium Factor means the percentage by which the difference in the United States loan schedule premiums for Strict Middling (SM) 11/8-inch upland cotton and for Middling (M) 13/32-inch upland cotton exceeds the difference in the applicable premiums for comparable international qualities.

A

Direct Payments and Counter-Cyclical Payments

1101.

Base acres

(a)

Adjustment of Base Acres

(1)

In general

The Secretary shall provide for an adjustment, as appropriate, in the base acres for covered commodities for a farm whenever any of the following circumstances occurs:

(A)

A conservation reserve contract entered into under section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831) with respect to the farm expires or is voluntarily terminated, or was terminated or expired during the period beginning on October 1, 2007, and ending on the date of enactment of this Act.

(B)

Cropland is released from coverage under a conservation reserve contract by the Secretary, or was released during the period beginning on October 1, 2007, and ending on the date of enactment of this Act.

(C)

The producer has eligible pulse crop acreage, which shall be determined in the same manner as eligible oilseed acreage under section 1101(a)(2) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7911(a)(2)).

(D)

The producer has eligible oilseed acreage as the result of the Secretary designating additional oilseeds, which shall be determined in the same manner as eligible oilseed acreage under section 1101(a)(2) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7911(a)(2)).

(2)

Special conservation reserve acreage payment rules

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

(b)

Prevention of Excess Base Acres

(1)

Required reduction

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

(2)

Other acreage

For purposes of paragraph (1), the Secretary shall include the following:

(A)

Any base acres for peanuts for the farm.

(B)

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

(C)

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

(D)

Any eligible pulse crop acreage, which shall be determined in the same manner as eligible oilseed acreage under section 1101(a)(2) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7911(a)(2)).

(E)

If the Secretary designates additional oilseeds, any eligible oilseed acreage, which shall be determined in the same manner as eligible oilseed acreage under section 1101(a)(2) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7911(a)(2)).

(3)

Selection of acres

The Secretary shall give the owner of the farm the opportunity to select the base acres for a covered commodity or the base acres for peanuts for the farm against which the reduction required by paragraph (1) will be made.

(4)

Exception for double-cropped acreage

In applying paragraph (1), the Secretary shall make an exception in the case of double cropping, as determined by the Secretary.

(5)

Coordinated application of requirements

The Secretary shall take into account section 1302(b) when applying the requirements of this subsection.

(c)

Reduction in Base Acres

(1)

Reduction at option of owner

(A)

In general

The owner of a farm may reduce, at any time, the base acres for any covered commodity for the farm.

(B)

Effect of reduction

A reduction under subparagraph (A) shall be permanent and made in a manner prescribed by the Secretary.

(2)

Required action by Secretary

(A)

In general

The Secretary shall proportionately reduce base acres on a farm for covered commodities for land that has been subdivided and developed for multiple residential units or other nonfarming uses if the size of the tracts and the density of the subdivision is such that the land is unlikely to return to the previous agricultural use, unless the producers on the farm demonstrate that the land—

(i)

remains devoted to commercial agricultural production; or

(ii)

is likely to be returned to the previous agricultural use.

(B)

Requirement

The Secretary shall establish procedures to identify land described in subparagraph (A).

(3)

Review and report

Each year, to ensure, to the maximum extent practicable, that payments are received only by producers, the Secretary shall submit to Congress a report that describes the results of the actions taken under paragraph (2).

(d)

Treatment of farms with limited base acres

(1)

Prohibition on payments

Except as provided in paragraph (2) and notwithstanding any other provision of this title, a producer on a farm may not receive direct payments, counter-cyclical payments, or average crop revenue election payments if the sum of the base acres of the farm is 10 acres or less, as determined by the Secretary.

(2)

Exceptions

Paragraph (1) shall not apply to a farm owned by—

(A)

a socially disadvantaged farmer or rancher (as defined in section 355(e) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2003(e)); or

(B)

a limited resource farmer or rancher, as defined by the Secretary.

(3)

Data collection and publication

The Secretary shall—

(A)

collect and publish segregated data and survey information about the farm profiles, utilization of land, and crop production; and

(B)

perform an evaluation on the supply and price of fruits and vegetables based on the effects of suspension of base acres under this section.

1102.

Payment yields

(a)

Establishment and Purpose

For the purpose of making direct payments and counter-cyclical payments under this subtitle, the Secretary shall provide for the establishment of a yield for each farm for any designated oilseed or eligible pulse crop for which a payment yield was not established under section 1102 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7912) in accordance with this section.

(b)

Payment Yields for Designated Oilseeds and Eligible Pulse Crops

(1)

Determination of average yield

In the case of designated oilseeds and eligible pulse crops, the Secretary shall determine the average yield per planted acre for the designated oilseed or pulse crop on a farm for the 1998 through 2001 crop years, excluding any crop year in which the acreage planted to the designated oilseed or pulse crop was zero.

(2)

Adjustment for payment yield

(A)

In general

The payment yield for a farm for a designated oilseed or eligible pulse crop shall be equal to the product of the following:

(i)

The average yield for the designated oilseed or pulse crop determined under paragraph (1).

(ii)

The ratio resulting from dividing the national average yield for the designated oilseed or pulse crop for the 1981 through 1985 crops by the national average yield for the designated oilseed or pulse crop for the 1998 through 2001 crops.

(B)

No national average yield information available

To the extent that national average yield information for a designated oilseed or pulse crop is not available, the Secretary shall use such information as the Secretary determines to be fair and equitable to establish a national average yield under this section.

(3)

Use of partial county average yield

If the yield per planted acre for a crop of a designated oilseed or pulse crop for a farm for any of the 1998 through 2001 crop years was less than 75 percent of the county yield for that designated oilseed or pulse crop, the Secretary shall assign a yield for that crop year equal to 75 percent of the county yield for the purpose of determining the average under paragraph (1).

(4)

No historic yield data available

In the case of establishing yields for designated oilseeds and eligible pulse crops, if historic yield data is not available, the Secretary shall use the ratio for dry peas calculated under paragraph (2)(A)(ii) in determining the yields for designated oilseeds and eligible pulse crops, as determined to be fair and equitable by the Secretary.

1103.

Availability of direct payments

(a)

Payment required

For each of the 2008 through 2012 crop years of each covered commodity (other than pulse crops), the Secretary shall make direct payments to producers on farms for which base acres and payment yields are established.

(b)

Payment Rate

Except as provided in section 1105, the payment rates used to make direct payments with respect to covered commodities for a crop year shall be as follows:

(1)

Wheat, $0.52 per bushel.

(2)

Corn, $0.28 per bushel.

(3)

Grain sorghum, $0.35 per bushel.

(4)

Barley, $0.24 per bushel.

(5)

Oats, $0.024 per bushel.

(6)

Upland cotton, $0.0667 per pound.

(7)

Long grain rice, $2.35 per hundredweight.

(8)

Medium grain rice, $2.35 per hundredweight.

(9)

Soybeans, $0.44 per bushel.

(10)

Other oilseeds, $0.80 per hundredweight.

(c)

Payment amount

The amount of the direct payment to be paid to the producers on a farm for a covered commodity for a crop year shall be equal to the product of the following:

(1)

The payment rate specified in subsection (b).

(2)

The payment acres of the covered commodity on the farm.

(3)

The payment yield for the covered commodity for the farm.

(d)

Time for payment

(1)

In general

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

(2)

Advance payments

(A)

Option

(i)

In general

At the option of the producers on a farm, the Secretary shall pay in advance up to 22 percent of the direct payment for a covered commodity for any of the 2008 through 2011 crop years to the producers on a farm.

(ii)

2008 crop year

If the producers on a farm elect to receive advance direct payments under clause (i) for a covered commodity for the 2008 crop year, as soon as practicable after the election, the Secretary shall make the advance direct payment to the producers on the farm.

(B)

Month

(i)

Selection

Subject to clauses (ii) and (iii), the producers on a farm shall select the month during which the advance payment for a crop year will be made.

(ii)

Options

The month selected may be any month during the period—

(I)

beginning on December 1 of the calendar year before the calendar year in which the crop of the covered commodity is harvested; and

(II)

ending during the month within which the direct payment would otherwise be made.

(iii)

Change

The producers on a farm may change the selected month for a subsequent advance payment by providing advance notice to the Secretary.

(3)

Repayment of advance payments

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

1104.

Availability of counter-cyclical payments

(a)

Payment required

Except as provided in section 1105, for each of the 2008 through 2012 crop years for each covered commodity, the Secretary shall make counter-cyclical payments to producers on farms for which payment yields and base acres are established with respect to the covered commodity if the Secretary determines that the effective price for the covered commodity is less than the target price for the covered commodity.

(b)

Effective Price

(1)

Covered commodities other than rice

Except as provided in paragraph (2), for purposes of subsection (a), the effective price for a covered commodity is equal to the sum of the following:

(A)

The higher of the following:

(i)

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

(ii)

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

(B)

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

(2)

Rice

In the case of long grain rice and medium grain rice, for purposes of subsection (a), the effective price for each type or class of rice is equal to the sum of the following:

(A)

The higher of the following:

(i)

The national average market price received by producers during the 12-month marketing year for the type or class of rice, as determined by the Secretary.

(ii)

The national average loan rate for a marketing assistance loan for the type or class of rice in effect for the applicable period under subtitle B.

(B)

The payment rate in effect for the type or class of rice under section 1103 for the purpose of making direct payments with respect to the type or class of rice.

(c)

Target Price

(1)

2008 Crop year

For purposes of the 2008 crop year, the target prices for covered commodities shall be as follows:

(A)

Wheat, $3.92 per bushel.

(B)

Corn, $2.63 per bushel.

(C)

Grain sorghum, $2.57 per bushel.

(D)

Barley, $2.24 per bushel.

(E)

Oats, $1.44 per bushel.

(F)

Upland cotton, $0.7125 per pound.

(G)

Long grain rice, $10.50 per hundredweight.

(H)

Medium grain rice, $10.50 per hundredweight.

(I)

Soybeans, $5.80 per bushel.

(J)

Other oilseeds, $10.10 per hundredweight.

(2)

2009 Crop year

For purposes of the 2009 crop year, the target prices for covered commodities shall be as follows:

(A)

Wheat, $3.92 per bushel.

(B)

Corn, $2.63 per bushel.

(C)

Grain sorghum, $2.57 per bushel.

(D)

Barley, $2.24 per bushel.

(E)

Oats, $1.44 per bushel.

(F)

Upland cotton, $0.7125 per pound.

(G)

Long grain rice, $10.50 per hundredweight.

(H)

Medium grain rice, $10.50 per hundredweight.

(I)

Soybeans, $5.80 per bushel.

(J)

Other oilseeds, $10.10 per hundredweight.

(K)

Dry peas, $8.32 per hundredweight.

(L)

Lentils, $12.81 per hundredweight.

(M)

Small chickpeas, $10.36 per hundredweight.

(N)

Large chickpeas, $12.81 per hundredweight.

(3)

Subsequent crop years

For purposes of each of the 2010 through 2012 crop years, the target prices for covered commodities shall be as follows:

(A)

Wheat, $4.17 per bushel.

(B)

Corn, $2.63 per bushel.

(C)

Grain sorghum, $2.63 per bushel.

(D)

Barley, $2.63 per bushel.

(E)

Oats, $1.79 per bushel.

(F)

Upland cotton, $0.7125 per pound.

(G)

Long grain rice, $10.50 per hundredweight.

(H)

Medium grain rice, $10.50 per hundredweight.

(I)

Soybeans, $6.00 per bushel.

(J)

Other oilseeds, $12.68 per hundredweight.

(K)

Dry peas, $8.32 per hundredweight.

(L)

Lentils, $12.81 per hundredweight.

(M)

Small chickpeas, $10.36 per hundredweight.

(N)

Large chickpeas, $12.81 per hundredweight.

(d)

Payment rate

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

(1)

the target price for the covered commodity; and

(2)

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

(e)

Payment amount

If counter-cyclical payments are required to be paid under this section for any of the 2008 through 2012 crop years of a covered commodity, the amount of the counter-cyclical payment to be paid to the producers on a farm for that crop year shall be equal to the product of the following:

(1)

The payment rate specified in subsection (d).

(2)

The payment acres of the covered commodity on the farm.

(3)

The payment yield for the covered commodity for the farm.

(f)

Time for Payments

(1)

General rule

Except as provided in paragraph (2), if the Secretary determines under subsection (a) that counter-cyclical payments are required to be made under this section for the crop of a covered commodity, beginning October 1, or as soon as practicable thereafter, after the end of the marketing year for the covered commodity, the Secretary shall make the counter-cyclical payments for the crop.

(2)

Availability of partial payments

(A)

In general

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

(B)

Election

(i)

In general

The Secretary shall allow producers on a farm to make an election to receive partial payments for a covered commodity under subparagraph (A) at any time but not later than 60 days prior to the end of the marketing year for that covered commodity.

(ii)

Date of issuance

The Secretary shall issue the partial payment after the date of an announcement by the Secretary but not later than 30 days prior to the end of the marketing year.

(3)

Time for partial payments

When the Secretary makes partial payments for a covered commodity for any of the 2008 through 2010 crop years—

(A)

the first partial payment shall be made after completion of the first 180 days of the marketing year for the covered commodity; and

(B)

the final partial payment shall be made beginning October 1, or as soon as practicable thereafter, after the end of the applicable marketing year for the covered commodity.

(4)

Amount of partial payment

(A)

First partial payment

For each of the 2008 through 2010 crops of a covered commodity, the first partial payment under paragraph (3) to the producers on a farm may not exceed 40 percent of the projected counter-cyclical payment for the covered commodity for the crop year, as determined by the Secretary.

(B)

Final payment

The final payment for a covered commodity for a crop year shall be equal to the difference between—

(i)

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

(ii)

the amount of the partial payment made to the producers under subparagraph (A).

(5)

Repayment

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

1105.

Average crop revenue election program

(a)

Availability and election of alternative approach

(1)

Availability of average crop revenue election payments

As an alternative to receiving counter-cyclical payments under section 1104 or 1304 and in exchange for a 20-percent reduction in direct payments under section 1103 or 1303 and a 30-percent reduction in marketing assistance loan rates under section 1202 or 1307, with respect to all covered commodities and peanuts on a farm, during each of the 2009, 2010, 2011, and 2012 crop years, the Secretary shall give the producers on the farm an opportunity to make an irrevocable election to instead receive average crop revenue election (referred to in this section as ACRE) payments under this section for the initial crop year for which the election is made through the 2012 crop year.

(2)

Limitation

(A)

In general

The total number of planted acres for which the producers on a farm may receive ACRE payments under this section may not exceed the total base acreage for all covered commodities and peanuts on the farm.

(B)

Election

If the total number of planted acres to all covered commodities and peanuts of the producers on a farm exceeds the total base acreage of the farm, the producers on the farm may choose which planted acres to enroll in the program under this section.

(3)

Election; time for election

(A)

In general

The Secretary shall provide notice to producers regarding the opportunity to make each of the elections described in paragraph (1).

(B)

Notice requirements

The notice shall include—

(i)

notice of the opportunity of the producers on a farm to make the election; and

(ii)

information regarding the manner in which the election must be made and the time periods and manner in which notice of the election must be submitted to the Secretary.

(4)

Election deadline

Within the time period and in the manner prescribed pursuant to paragraph (3), all of the producers on a farm shall submit to the Secretary notice of an election made under paragraph (1).

(5)

Effect of failure to make election

If all of the producers on a farm fail to make an election under paragraph (1), make different elections under paragraph (1), or fail to timely notify the Secretary of the election made, as required by paragraph (4), all of the producers on the farm shall be deemed to have made the election to receive counter-cyclical payments under section 1104 or 1304 for all covered commodities and peanuts on the farm, and to otherwise not have made the election described in paragraph (1), for the applicable crop years.

(b)

Payments required

(1)

In general

In the case of producers on a farm who make an election under subsection (a) to receive ACRE payments for any of the 2009 through 2012 crop years for all covered commodities and peanuts, the Secretary shall make ACRE payments available to the producers on a farm in accordance with this subsection.

(2)

ACRE payment

(A)

In general

Subject to paragraph (3), in the case of producers on a farm described in paragraph (1), the Secretary shall make ACRE payments available to the producers on a farm for each crop year if—

(i)

the actual State revenue for the crop year for the covered commodity or peanuts in the State determined under subsection (c); is less than

(ii)

the ACRE program guarantee for the crop year for the covered commodity or peanuts in the State determined under subsection (d).

(B)

Individual loss

The Secretary shall make ACRE payments available to the producers on a farm in a State for a crop year only if (as determined by the Secretary)—

(i)

the actual farm revenue for the crop year for the covered commodity or peanuts, as determined under subsection (e); is less than

(ii)

the farm ACRE benchmark revenue for the crop year for the covered commodity or peanuts, as determined under subsection (f).

(3)

Time for payments

In the case of each of the 2009 through 2012 crop years, the Secretary shall make ACRE payments beginning October 1, or as soon as practicable thereafter, after the end of the applicable marketing year for the covered commodity or peanuts.

(c)

Actual State revenue

(1)

In general

For purposes of subsection (b)(2)(A), the amount of the actual State revenue for a crop year of a covered commodity or peanuts shall equal the product obtained by multiplying—

(A)

the actual State yield for each planted acre for the crop year for the covered commodity or peanuts determined under paragraph (2); and

(B)

the national average market price for the crop year for the covered commodity or peanuts determined under paragraph (3).

(2)

Actual State yield

For purposes of paragraph (1)(A), the actual State yield for each planted acre for a crop year for a covered commodity or peanuts in a State shall equal (as determined by the Secretary)—

(A)

the quantity of the covered commodity or peanuts that is produced in the State during the crop year; divided by

(B)

the number of acres that are planted to the covered commodity or peanuts in the State during the crop year.

(3)

National average market price

For purposes of paragraph (1)(B), the national average market price for a crop year for a covered commodity or peanuts in a State shall equal the greater of—

(A)

the national average market price received by producers during the 12-month marketing year for the covered commodity or peanuts, as determined by the Secretary; or

(B)

the marketing assistance loan rate for the covered commodity or peanuts under section 1202 or 1307, as reduced under subsection (a)(1).

(d)

ACRE program guarantee

(1)

Amount

(A)

In general

For purposes of subsection (b)(2)(A) and subject to subparagraph (B), the ACRE program guarantee for a crop year for a covered commodity or peanuts in a State shall equal 90 percent of the product obtained by multiplying—

(i)

the benchmark State yield for each planted acre for the crop year for the covered commodity or peanuts in a State determined under paragraph (2); and

(ii)

the ACRE program guarantee price for the crop year for the covered commodity or peanuts determined under paragraph (3).

(B)

Minimum and maximum guarantee

In the case of each of the 2010 through 2012 crop years, the ACRE program guarantee for a crop year for a covered commodity or peanuts under subparagraph (A) shall not decrease or increase more than 10 percent from the guarantee for the preceding crop year.

(2)

Benchmark State yield

(A)

In general

For purposes of paragraph (1)(A)(i), subject to subparagraph (B), the benchmark State yield for each planted acre for a crop year for a covered commodity or peanuts in a State shall equal the average yield per planted acre for the covered commodity or peanuts in the State for the most recent 5 crop year yields, excluding each of the crop years with the highest and lowest yields, using National Agricultural Statistics Service data.

(B)

Assigned yield

If the Secretary cannot establish the benchmark State yield for each planted acre for a crop year for a covered commodity or peanuts in a State in accordance with subparagraph (A) or if the yield determined under subparagraph (A) is an unrepresentative average yield for the State (as determined by the Secretary), the Secretary shall assign a benchmark State yield for each planted acre for the crop year for the covered commodity or peanuts in the State on the basis of—

(i)

previous average yields for a period of 5 crop years, excluding each of the crop years with the highest and lowest yields; or

(ii)

benchmark State yields for planted acres for the crop year for the covered commodity or peanuts in similar States.

(3)

ACRE program guarantee price

For purposes of paragraph (1)(A)(ii), the ACRE program guarantee price for a crop year for a covered commodity or peanuts in a State shall be the simple average of the national average market price received by producers of the covered commodity or peanuts for the most recent 2 crop years, as determined by the Secretary.

(4)

States with irrigated and nonirrigated land

In the case of a State in which at least 25 percent of the acreage planted to a covered commodity or peanuts in the State is irrigated and at least 25 percent of the acreage planted to the covered commodity or peanuts in the State is not irrigated, the Secretary shall calculate a separate ACRE program guarantee for the irrigated and nonirrigated areas of the State for the covered commodity or peanuts.

(e)

Actual farm revenue

For purposes of subsection (b)(2)(B)(i), the amount of the actual farm revenue for a crop year for a covered commodity or peanuts shall equal the amount determined by multiplying—

(1)

the actual yield for the covered commodity or peanuts of the producers on the farm; and

(2)

the national average market price for the crop year for the covered commodity or peanuts determined under subsection (c)(3).

(f)

Farm ACRE benchmark revenue

For purposes of subsection (b)(2)(B)(ii), the farm ACRE benchmark revenue for the crop year for a covered commodity or peanuts shall equal the sum obtained by adding—

(1)

the amount determined by multiplying—

(A)

the average yield per planted acre for the covered commodity or peanuts of the producers on the farm for the most recent 5 crop years, excluding each of the crop years with the highest and lowest yields; and

(B)

the ACRE program guarantee price for the applicable crop year for the covered commodity or peanuts in a State determined under subsection (d)(3); and

(2)

the amount of the per acre crop insurance premium required to be paid by the producers on the farm for the applicable crop year for the covered commodity or peanuts on the farm.

(g)

Payment amount

If ACRE payments are required to be paid for any of the 2009 through 2012 crop years of a covered commodity or peanuts under this section, the amount of the ACRE payment to be paid to the producers on the farm for the crop year under this section shall be equal to the product obtained by multiplying—

(1)

the lesser of—

(A)

the difference between—

(i)

the ACRE program guarantee for the crop year for the covered commodity or peanuts in the State determined under subsection (d); and

(ii)

the actual State revenue from the crop year for the covered commodity or peanuts in the State determined under subsection (c); and

(B)

25 percent of the ACRE program guarantee for the crop year for the covered commodity or peanuts in the State determined under subsection (d);

(2)
(A)

for each of the 2009 through 2011 crop years, 83.3 percent of the acreage planted or considered planted to the covered commodity or peanuts for harvest on the farm in the crop year; and

(B)

for the 2012 crop year, 85 percent of the acreage planted or considered planted to the covered commodity or peanuts for harvest on the farm in the crop year; and

(3)

the quotient obtained by dividing—

(A)

the average yield per planted acre for the covered commodity or peanuts of the producers on the farm for the most recent 5 crop years, excluding each of the crop years with the highest and lowest yields; by

(B)

the benchmark State yield for the crop year, as determined under subsection (d)(2).

1106.

Producer agreement required as condition of provision of payments

(a)

Compliance With Certain Requirements

(1)

Requirements

Before the producers on a farm may receive direct payments, counter-cyclical payments, or average crop revenue election payments with respect to the farm, the producers shall agree, during the crop year for which the payments are made and in exchange for the payments—

(A)

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

(B)

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

(C)

to comply with the planting flexibility requirements of section 1107;

(D)

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

(E)

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

(2)

Compliance

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

(3)

Modification

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

(b)

Transfer or Change of Interest in Farm

(1)

Termination

(A)

In general

Except as provided in paragraph (2), a transfer of (or change in) the interest of the producers on a farm in base acres for which direct payments or counter-cyclical payments are made, or on which average crop revenue election payments are based, shall result in the termination of the direct payments, counter-cyclical payments, or average crop revenue election payments to the extent the payments are made or based on the base acres, unless the transferee or owner of the acreage agrees to assume all obligations under subsection (a).

(B)

Effective date

The termination shall take effect on the date determined by the Secretary.

(2)

Exception

If a producer entitled to a direct payment, counter-cyclical payment, or average crop revenue election payment dies, becomes incompetent, or is otherwise unable to receive the payment, the Secretary shall make the payment, in accordance with rules issued by the Secretary.

(c)

Reports

(1)

Acreage reports

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

(2)

Production reports

As a condition on the receipt of any benefits under this subtitle or subtitle B, the Secretary shall require producers on a farm that receive payments under section 1105 to submit to the Secretary annual production reports with respect to all covered commodities and peanuts produced on the farm.

(3)

Penalties

No penalty with respect to benefits under this subtitle or subtitle B shall be assessed against the producers on a farm for an inaccurate acreage or production report unless the producers on the farm knowingly and willfully falsified the acreage or production report.

(d)

Tenants and Sharecroppers

In carrying out this subtitle, the Secretary shall provide adequate safeguards to protect the interests of tenants and sharecroppers.

(e)

Sharing of Payments

The Secretary shall provide for the sharing of direct payments, counter-cyclical payments, or average crop revenue election payments among the producers on a farm on a fair and equitable basis.

1107.

Planting flexibility

(a)

Permitted Crops

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

(b)

Limitations Regarding Certain Commodities

(1)

General limitation

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

(2)

Treatment of trees and other perennials

The planting of an agricultural commodity specified in paragraph (3) that is produced on a tree or other perennial plant shall be prohibited on base acres.

(3)

Covered agricultural commodities

Paragraphs (1) and (2) apply to the following agricultural commodities:

(A)

Fruits.

(B)

Vegetables (other than mung beans and pulse crops).

(C)

Wild rice.

(c)

Exceptions

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

(1)

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

(2)

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

(3)

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

(A)

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

(B)

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

(d)

Planting Transferability Pilot Project

(1)

Pilot project authorized

Notwithstanding paragraphs (1) and (2) of subsection (b) and in addition to the exceptions provided in subsection (c), the Secretary shall carry out a pilot project to permit the planting of cucumbers, green peas, lima beans, pumpkins, snap beans, sweet corn, and tomatoes grown for processing on base acres during each of the 2009 through 2012 crop years.

(2)

Pilot project States and acres

The number of base acres eligible during each crop year for the pilot project under paragraph (1) shall be—

(A)

9,000 acres in the State of Illinois;

(B)

9,000 acres in the State of Indiana;

(C)

1,000 acres in the State of Iowa;

(D)

9,000 acres in the State of Michigan;

(E)

34,000 acres in the State of Minnesota;

(F)

4,000 acres in the State of Ohio; and

(G)

9,000 acres in the State of Wisconsin.

(3)

Contract and management requirements

To be eligible for selection to participate in the pilot project, the producers on a farm shall—

(A)

demonstrate to the Secretary that the producers on the farm have entered into a contract to produce a crop of a commodity specified in paragraph (1) for processing;

(B)

agree to produce the crop as part of a program of crop rotation on the farm to achieve agronomic and pest and disease management benefits; and

(C)

provide evidence of the disposition of the crop.

(4)

Temporary reduction in base acres

The base acres on a farm for a crop year shall be reduced by an acre for each acre planted under the pilot program.

(5)

Duration of reductions

The reduction in the base acres of a farm for a crop year under paragraph (4) shall expire at the end of the crop year.

(6)

Recalculation of base acres

(A)

In general

If the Secretary recalculates base acres for a farm while the farm is included in the pilot project, the planting and production of a crop of a commodity specified in paragraph (1) on base acres for which a temporary reduction was made under this section shall be considered to be the same as the planting and production of a covered commodity.

(B)

Prohibition

Nothing in this paragraph provides authority for the Secretary to recalculate base acres for a farm.

(7)

Pilot impact evaluation

(A)

In general

The Secretary shall periodically evaluate the pilot project conducted under this subsection to determine the effects of the pilot project on the supply and price of—

(i)

fresh fruits and vegetables; and

(ii)

fruits and vegetables for processing.

(B)

Determination

An evaluation under subparagraph (A) shall include a determination as to whether—

(i)

producers of fresh fruits and vegetables are being negatively impacted; and

(ii)

existing production capacities are being supplanted.

(C)

Report

As soon as practicable after conducting an evaluation under subparagraph (A), the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes the results of the evaluation.

1108.

Special rule for long grain and medium grain rice

(a)

Calculation Method

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

(b)

Producer Election

As an alternative to the calculation method described in subsection (a), the Secretary shall provide producers on a farm the opportunity to elect to apportion rice base acres on the farm using the 4-year average of—

(1)

the percentages of acreage planted on the farm to long grain rice and medium grain rice during the 2003 through 2006 crop years;

(2)

the percentages of any acreage on the farm that the producers were prevented from planting to long grain rice and medium grain rice during the 2003 through 2006 crop years because of drought, flood, other natural disaster, or other condition beyond the control of the producers, as determined by the Secretary; and

(3)

in the case of a crop year for which a producer on a farm elected not to plant to long grain and medium grain rice during the 2003 through 2006 crop years, the percentages of acreage planted in the applicable State to long grain rice and medium grain rice, as determined by the Secretary.

(c)

Limitation

In carrying out this section, the Secretary shall use the same total base acres, payment acres, and payment yields established with respect to rice under sections 1101 and 1102 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7911, 7912), as in effect on September 30, 2007, subject to any adjustment under section 1101 of this Act.

1109.

Period of effectiveness

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

B

Marketing assistance loans and loan deficiency payments

1201.

Availability of nonrecourse marketing assistance loans for loan commodities

(a)

Nonrecourse Loans Available

(1)

Availability

For each of the 2008 through 2012 crops of each loan commodity, the Secretary shall make available to producers on a farm nonrecourse marketing assistance loans for loan commodities produced on the farm.

(2)

Terms and conditions

The marketing assistance loans shall be made under terms and conditions that are prescribed by the Secretary and at the loan rate established under section 1202 for the loan commodity.

(b)

Eligible Production

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

(c)

Compliance With Conservation and Wetlands Requirements

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

1202.

Loan rates for nonrecourse marketing assistance loans

(a)

2008 crop year

For purposes of the 2008 crop year, the loan rate for a marketing assistance loan under section 1201 for a loan commodity shall be equal to the following:

(1)

In the case of wheat, $2.75 per bushel.

(2)

In the case of corn, $1.95 per bushel.

(3)

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

(4)

In the case of barley, $1.85 per bushel.

(5)

In the case of oats, $1.33 per bushel.

(6)

In the case of base quality of upland cotton, $0.52 per pound.

(7)

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

(8)

In the case of long grain rice, $6.50 per hundredweight.

(9)

In the case of medium grain rice, $6.50 per hundredweight.

(10)

In the case of soybeans, $5.00 per bushel.

(11)

In the case of other oilseeds, $9.30 per hundredweight for each of the following kinds of oilseeds:

(A)

Sunflower seed.

(B)

Rapeseed.

(C)

Canola.

(D)

Safflower.

(E)

Flaxseed.

(F)

Mustard seed.

(G)

Crambe.

(H)

Sesame seed.

(I)

Other oilseeds designated by the Secretary.

(12)

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

(13)

In the case of lentils, $11.72 per hundredweight.

(14)

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

(15)

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

(16)

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

(17)

In the case of mohair, $4.20 per pound.

(18)

In the case of honey, $0.60 per pound.

(b)

2009 Crop year

Except as provided in section 1105, for purposes of the 2009 crop year, the loan rate for a marketing assistance loan under section 1201 for a loan commodity shall be equal to the following:

(1)

In the case of wheat, $2.75 per bushel.

(2)

In the case of corn, $1.95 per bushel.

(3)

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

(4)

In the case of barley, $1.85 per bushel.

(5)

In the case of oats, $1.33 per bushel.

(6)

In the case of base quality of upland cotton, $0.52 per pound.

(7)

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

(8)

In the case of long grain rice, $6.50 per hundredweight.

(9)

In the case of medium grain rice, $6.50 per hundredweight.

(10)

In the case of soybeans, $5.00 per bushel.

(11)

In the case of other oilseeds, $9.30 per hundredweight for each of the following kinds of oilseeds:

(A)

Sunflower seed.

(B)

Rapeseed.

(C)

Canola.

(D)

Safflower.

(E)

Flaxseed.

(F)

Mustard seed.

(G)

Crambe.

(H)

Sesame seed.

(I)

Other oilseeds designated by the Secretary.

(12)

In the case of dry peas, $5.40 per hundredweight.

(13)

In the case of lentils, $11.28 per hundredweight.

(14)

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

(15)

In the case of large chickpeas, $11.28 per hundredweight.

(16)

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

(17)

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

(18)

In the case of mohair, $4.20 per pound.

(19)

In the case of honey, $0.60 per pound.

(c)

2010 Through 2012 crop years

Except as provided in section 1105, for purposes of each of the 2010 through 2012 crop years, the loan rate for a marketing assistance loan under section 1201 for a loan commodity shall be equal to the following:

(1)

In the case of wheat, $2.94 per bushel.

(2)

In the case of corn, $1.95 per bushel.

(3)

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

(4)

In the case of barley, $1.95 per bushel.

(5)

In the case of oats, $1.39 per bushel.

(6)

In the case of base quality of upland cotton, $0.52 per pound.

(7)

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

(8)

In the case of long grain rice, $6.50 per hundredweight.

(9)

In the case of medium grain rice, $6.50 per hundredweight.

(10)

In the case of soybeans, $5.00 per bushel.

(11)

In the case of other oilseeds, $10.09 per hundredweight for each of the following kinds of oilseeds:

(A)

Sunflower seed.

(B)

Rapeseed.

(C)

Canola.

(D)

Safflower.

(E)

Flaxseed.

(F)

Mustard seed.

(G)

Crambe.

(H)

Sesame seed.

(I)

Other oilseeds designated by the Secretary.

(12)

In the case of dry peas, $5.40 per hundredweight.

(13)

In the case of lentils, $11.28 per hundredweight.

(14)

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

(15)

In the case of large chickpeas, $11.28 per hundredweight.

(16)

In the case of graded wool, $1.15 per pound.

(17)

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

(18)

In the case of mohair, $4.20 per pound.

(19)

In the case of honey, $0.69 per pound.

(d)

Single county loan rate for other oilseeds

The Secretary shall establish a single loan rate in each county for each kind of other oilseeds described in subsections (a)(11), (b)(11), and (c)(11).

1203.

Term of loans

(a)

Term of loan

In the case of each loan commodity, a marketing assistance loan under section 1201 shall have a term of 9 months beginning on the first day of the first month after the month in which the loan is made.

(b)

Extensions prohibited

The Secretary may not extend the term of a marketing assistance loan for any loan commodity.

1204.

Repayment of loans

(a)

General Rule

The Secretary shall permit the producers on a farm to repay a marketing assistance loan under section 1201 for a loan commodity (other than upland cotton, long grain rice, medium grain rice, extra long staple cotton, and confectionery and each other kind of sunflower seed (other than oil sunflower seed)) at a rate that is the lesser of—

(1)

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

(2)

a rate (as determined by the Secretary) that—

(A)

is calculated based on average market prices for the loan commodity during the preceding 30-day period; and

(B)

will minimize discrepancies in marketing loan benefits across State boundaries and across county boundaries; or

(3)

a rate that the Secretary may develop using alternative methods for calculating a repayment rate for a loan commodity that the Secretary determines will—

(A)

minimize potential loan forfeitures;

(B)

minimize the accumulation of stocks of the commodity by the Federal Government;

(C)

minimize the cost incurred by the Federal Government in storing the commodity;

(D)

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

(E)

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

(b)

Repayment Rates for Upland Cotton, Long Grain Rice, and Medium Grain Rice

The Secretary shall permit producers to repay a marketing assistance loan under section 1201 for upland cotton, long grain rice, and medium grain rice at a rate that is the lesser of—

(1)

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

(2)

the prevailing world market price for the commodity, as determined and adjusted by the Secretary in accordance with this section.

(c)

Repayment Rates for Extra Long Staple Cotton

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

(d)

Prevailing World Market Price

For purposes of this section and section 1207, the Secretary shall prescribe by regulation—

(1)

a formula to determine the prevailing world market price for each of upland cotton, long grain rice, and medium grain rice; and

(2)

a mechanism by which the Secretary shall announce periodically those prevailing world market prices.

(e)

Adjustment of prevailing world market price for upland cotton, long grain rice, and medium grain rice

(1)

Rice

The prevailing world market price for long grain rice and medium grain rice determined under subsection (d) shall be adjusted to United States quality and location.

(2)

Cotton

The prevailing world market price for upland cotton determined under subsection (d)—

(A)

shall be adjusted to United States quality and location, with the adjustment to include—

(i)

a reduction equal to any United States Premium Factor for upland cotton of a quality higher than Middling (M) 13/32-inch; and

(ii)

the average costs to market the commodity, including average transportation costs, as determined by the Secretary; and

(B)

may be further adjusted, during the period beginning on the date of enactment of this Act and ending on July 31, 2013, if the Secretary determines the adjustment is necessary to—

(i)

minimize potential loan forfeitures;

(ii)

minimize the accumulation of stocks of upland cotton by the Federal Government;

(iii)

ensure that upland cotton produced in the United States can be marketed freely and competitively, both domestically and internationally; and

(iv)

ensure an appropriate transition between current-crop and forward-crop price quotations, except that the Secretary may use forward-crop price quotations prior to July 31 of a marketing year only if—

(I)

there are insufficient current-crop price quotations; and

(II)

the forward-crop price quotation is the lowest such quotation available.

(3)

Guidelines for additional adjustments

In making adjustments under this subsection, the Secretary shall establish a mechanism for determining and announcing the adjustments in order to avoid undue disruption in the United States market.

(f)

Repayment Rates for Confectionery and Other Kinds of Sunflower Seeds

The Secretary shall permit the producers on a farm to repay a marketing assistance loan under section 1201 for confectionery and each other kind of sunflower seed (other than oil sunflower seed) at a rate that is the lesser of—

(1)

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

(2)

the repayment rate established for oil sunflower seed.

(g)

Payment of Cotton Storage Costs

(1)

2008 through 2011 crop years

Effective for each of the 2008 through 2011 crop years, the Secretary shall provide cotton storage payments in the same manner, and at the same rates as the Secretary provided storage payments for the 2006 crop of cotton, except that the rates shall be reduced by 10 percent.

(2)

Subsequent crop years

Beginning with the 2012 crop year, the Secretary shall provide cotton storage payments in the same manner, and at the same rates as the Secretary provided storage payments for the 2006 crop of cotton, except that the rates shall be reduced by 20 percent.

(h)

Authority to temporarily adjust repayment rates

(1)

Adjustment authority

In the event of a severe disruption to marketing, transportation, or related infrastructure, the Secretary may modify the repayment rate otherwise applicable under this section for marketing assistance loans under section 1201 for a loan commodity.

(2)

Duration

Any adjustment made under paragraph (1) in the repayment rate for marketing assistance loans for a loan commodity shall be in effect on a short-term and temporary basis, as determined by the Secretary.

1205.

Loan deficiency payments

(a)

Availability of loan deficiency payments

(1)

In general

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

(2)

Unshorn pelts, hay, and silage

(A)

Marketing assistance loans

Subject to subparagraph (B), nongraded wool in the form of unshorn pelts and hay and silage derived from a loan commodity are not eligible for a marketing assistance loan under section 1201.

(B)

Loan deficiency payment

Effective for the 2008 through 2012 crop years, the Secretary may make loan deficiency payments available under this section to producers on a farm that produce unshorn pelts or hay and silage derived from a loan commodity.

(b)

Computation

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

(1)

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

(2)

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

(c)

Payment rate

(1)

In general

In the case of a loan commodity, the payment rate shall be the amount by which—

(A)

the loan rate established under section 1202 for the loan commodity; exceeds

(B)

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

(2)

Unshorn pelts

In the case of unshorn pelts, the payment rate shall be the amount by which—

(A)

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

(B)

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

(3)

Hay and silage

In the case of hay or silage derived from a loan commodity, the payment rate shall be the amount by which—

(A)

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

(B)

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

(d)

Exception for extra long staple cotton

This section shall not apply with respect to extra long staple cotton.

(e)

Effective date for payment rate determination

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

1206.

Payments in lieu of loan deficiency payments for grazed acreage

(a)

Eligible producers

(1)

In general

Effective for the 2008 through 2012 crop years, in the case of a producer that would be eligible for a loan deficiency payment under section 1205 for wheat, barley, or oats, but that elects to use acreage planted to the wheat, barley, or oats for the grazing of livestock, the Secretary shall make a payment to the producer under this section if the producer enters into an agreement with the Secretary to forgo any other harvesting of the wheat, barley, or oats on that acreage.

(2)

Grazing of triticale acreage

Effective for the 2008 through 2012 crop years, with respect to a producer on a farm that uses acreage planted to triticale for the grazing of livestock, the Secretary shall make a payment to the producer under this section if the producer enters into an agreement with the Secretary to forgo any other harvesting of triticale on that acreage.

(b)

Payment amount

(1)

In general

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

(A)

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

(B)

the payment quantity determined by multiplying—

(i)

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

(ii)

the payment yield in effect for the calculation of direct payments under subtitle A with respect to that loan commodity on the farm or, in the case of a farm without a payment yield for that loan commodity, an appropriate yield established by the Secretary in a manner consistent with section 1102 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7912).

(2)

Grazing of triticale acreage

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

(A)

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

(B)

the payment quantity determined by multiplying—

(i)

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

(ii)

the payment yield in effect for the calculation of direct payments under subtitle A with respect to wheat on the farm or, in the case of a farm without a payment yield for wheat, an appropriate yield established by the Secretary in a manner consistent with section 1102 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7912).

(c)

Time, manner, and availability of payment

(1)

Time and manner

A payment under this section shall be made at the same time and in the same manner as loan deficiency payments are made under section 1205.

(2)

Availability

(A)

In general

The Secretary shall establish an availability period for the payments authorized by this section.

(B)

Certain commodities

In the case of wheat, barley, and oats, the availability period shall be consistent with the availability period for the commodity established by the Secretary for marketing assistance loans authorized by this subtitle.

(d)

Prohibition on crop insurance indemnity or noninsured crop assistance

A 2008 through 2012 crop of wheat, barley, oats, or triticale planted on acreage that a producer elects, in the agreement required by subsection (a), to use for the grazing of livestock in lieu of any other harvesting of the crop shall not be eligible for an indemnity under a policy or plan of insurance authorized under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) or noninsured crop assistance under section 196 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333).

1207.

Special marketing loan provisions for upland cotton

(a)

Special Import Quota

(1)

Definition of special import quota

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

(2)

Establishment

(A)

In general

The President shall carry out an import quota program during the period beginning on the date of enactment of this Act through July 31, 2013, as provided in this subsection.

(B)

Program requirements

Whenever the Secretary determines and announces that for any consecutive 4-week period, the Friday through Thursday average price quotation for the lowest-priced United States growth, as quoted for Middling (M) 13/32-inch cotton, delivered to a definable and significant international market, as determined by the Secretary, exceeds the prevailing world market price, there shall immediately be in effect a special import quota.

(3)

Quantity

The quota shall be equal to 1 week's consumption of cotton by domestic mills at the seasonally adjusted average rate of the most recent 3 months for which data are available.

(4)

Application

The quota shall apply to upland cotton purchased not later than 90 days after the date of the Secretary's announcement under paragraph (2) and entered into the United States not later than 180 days after that date.

(5)

Overlap

A special quota period may be established that overlaps any existing quota period if required by paragraph (2), except that a special quota period may not be established under this subsection if a quota period has been established under subsection (b).

(6)

Preferential tariff treatment

The quantity under a special import quota shall be considered to be an in-quota quantity for purposes of—

(A)

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

(B)

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

(C)

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

(D)

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

(7)

Limitation

The quantity of cotton entered into the United States during any marketing year under the special import quota established under this subsection may not exceed the equivalent of 10 week's consumption of upland cotton by domestic mills at the seasonally adjusted average rate of the 3 months immediately preceding the first special import quota established in any marketing year.

(b)

Limited Global Import Quota for Upland Cotton

(1)

Definitions

In this subsection:

(A)

Supply

The term supply means, using the latest official data of the Bureau of the Census, the Department of Agriculture, and the Department of the Treasury—

(i)

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

(ii)

production of the current crop; and

(iii)

imports to the latest date available during the marketing year.

(B)

Demand

The term demand means—

(i)

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

(ii)

the larger of—

(I)

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

(II)

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

(C)

Limited global import quota

The term limited global import quota means a quantity of imports that is not subject to the over-quota tariff rate of a tariff-rate quota.

(2)

Program

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

(A)

Quantity

The quantity of the quota shall be equal to 21 days of domestic mill consumption of upland cotton at the seasonally adjusted average rate of the most recent 3 months for which data are available or as estimated by the Secretary.

(B)

Quantity if prior quota

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

(C)

Preferential tariff treatment

The quantity under a limited global import quota shall be considered to be an in-quota quantity for purposes of—

(i)

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

(ii)

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

(iii)

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

(iv)

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

(D)

Quota entry period

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

(3)

No overlap

Notwithstanding paragraph (2), a quota period may not be established that overlaps an existing quota period or a special quota period established under subsection (a).

(c)

Economic Adjustment Assistance to Users of Upland Cotton

(1)

In general

Subject to paragraph (2), the Secretary shall, on a monthly basis, provide economic adjustment assistance to domestic users of upland cotton in the form of payments for all documented use of that upland cotton during the previous monthly period regardless of the origin of the upland cotton.

(2)

Value of assistance

(A)

Beginning period

During the period beginning on August 1, 2008, and ending on July 31, 2012, the value of the assistance provided under paragraph (1) shall be 4 cents per pound.

(B)

Subsequent period

Effective beginning on August 1, 2012, the value of the assistance provided under paragraph (1) shall be 3 cents per pound.

(3)

Allowable purposes

Economic adjustment assistance under this subsection shall be made available only to domestic users of upland cotton that certify that the assistance shall be used only to acquire, construct, install, modernize, develop, convert, or expand land, plant, buildings, equipment, facilities, or machinery.

(4)

Review or audit

The Secretary may conduct such review or audit of the records of a domestic user under this subsection as the Secretary determines necessary to carry out this subsection.

(5)

Improper use of assistance

If the Secretary determines, after a review or audit of the records of the domestic user, that economic adjustment assistance under this subsection was not used for the purposes specified in paragraph (3), the domestic user shall be—

(A)

liable to repay the assistance to the Secretary, plus interest, as determined by the Secretary; and

(B)

ineligible to receive assistance under this subsection for a period of 1 year following the determination of the Secretary.

1208.

Special competitive provisions for extra long staple cotton

(a)

Competitiveness Program

Notwithstanding any other provision of law, during the period beginning on the date of enactment of this Act through July 31, 2013, the Secretary shall carry out a program—

(1)

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

(2)

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

(3)

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

(b)

Payments Under Program; Trigger

Under the program, the Secretary shall make payments available under this section whenever—

(1)

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

(2)

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

(c)

Eligible Recipients

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

(d)

Payment Amount

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

1209.

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

(a)

High Moisture Feed Grains

(1)

Definition of high moisture state

In this subsection, the term high moisture state means corn or grain sorghum having a moisture content in excess of Commodity Credit Corporation standards for marketing assistance loans made by the Secretary under section 1201.

(2)

Recourse loans available

For each of the 2008 through 2012 crops of corn and grain sorghum, the Secretary shall make available recourse loans, as determined by the Secretary, to producers on a farm that—

(A)

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

(B)

present—

(i)

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

(ii)

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

(C)

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

(D)

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

(3)

Eligibility of acquired feed grains

A loan under this subsection shall be made on a quantity of corn or grain sorghum of the same crop acquired by the producer equivalent to a quantity determined by multiplying—

(A)

the acreage of the corn or grain sorghum in a high moisture state harvested on the producer's farm; by

(B)

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

(b)

Recourse Loans Available for Seed Cotton

For each of the 2008 through 2012 crops of upland cotton and extra long staple cotton, the Secretary shall make available recourse seed cotton loans, as determined by the Secretary, on any production.

(c)

Repayment Rates

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

1210.

Adjustments of loans

(a)

Adjustment Authority

Subject to subsection (e), the Secretary may make appropriate adjustments in the loan rates for any loan commodity (other than cotton) for differences in grade, type, quality, location, and other factors.

(b)

Manner of Adjustment

The adjustments under subsection (a) shall, to the maximum extent practicable, be made in such a manner that the average loan level for the commodity will, on the basis of the anticipated incidence of the factors, be equal to the level of support determined in accordance with this subtitle and subtitles B through E.

(c)

Adjustment on County Basis

(1)

In general

The Secretary may establish loan rates for a crop for producers in individual counties in a manner that results in the lowest loan rate being 95 percent of the national average loan rate, if those loan rates do not result in an increase in outlays.

(2)

Prohibition

Adjustments under this subsection shall not result in an increase in the national average loan rate for any year.

(d)

Adjustment in Loan Rate for Cotton

(1)

In general

The Secretary may make appropriate adjustments in the loan rate for cotton for differences in quality factors.

(2)

Revisions to quality adjustments for upland cotton

(A)

In general

Not later than 180 days after the date of enactment of this Act, the Secretary shall implement revisions in the administration of the marketing assistance loan program for upland cotton to more accurately and efficiently reflect market values for upland cotton.

(B)

Mandatory revisions

Revisions under subparagraph (A) shall include—

(i)

the elimination of warehouse location differentials;

(ii)

the establishment of differentials for the various quality factors and staple lengths of cotton based on a 3-year, weighted moving average of the weighted designated spot market regions, as determined by regional production;

(iii)

the elimination of any artificial split in the premium or discount between upland cotton with a 32 or 33 staple length due to micronaire; and

(iv)

a mechanism to ensure that no premium or discount is established that exceeds the premium or discount associated with a leaf grade that is 1 better than the applicable color grade.

(C)

Discretionary revisions

Revisions under subparagraph (A) may include—

(i)

the use of non-spot market price data, in addition to spot market price data, that would enhance the accuracy of the price information used in determining quality adjustments under this subsection;

(ii)

adjustments in the premiums or discounts associated with upland cotton with a staple length of 33 or above due to micronaire with the goal of eliminating any unnecessary artificial splits in the calculations of the premiums or discounts; and

(iii)

such other adjustments as the Secretary determines appropriate, after consultations conducted in accordance with paragraph (3).

(3)

Consultation with private sector

(A)

Prior to revision

In making adjustments to the loan rate for cotton (including any review of the adjustments) as provided in this subsection, the Secretary shall consult with representatives of the United States cotton industry.

(B)

Inapplicability of federal advisory committee act

The Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to consultations under this subsection.

(4)

Review of adjustments

The Secretary may review the operation of the upland cotton quality adjustments implemented pursuant to this subsection and may make further revisions to the administration of the loan program for upland cotton, by—

(A)

revoking or revising any actions taken under paragraph (2)(B); or

(B)

revoking or revising any actions taken or authorized to be taken under paragraph (2)(C).

(e)

Rice

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

C

Peanuts

1301.

Definitions

In this subtitle:

(1)

Base acres for peanuts

(A)

In general

The term base acres for peanuts means the number of acres assigned to a farm pursuant to section 1302 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7952), as in effect on September 30, 2007, subject to any adjustment under section 1302 of this Act.

(B)

Covered commodities

The term base acres, with respect to a covered commodity, has the meaning given the term in section 1101.

(2)

Counter-cyclical payment

The term counter-cyclical payment means a payment made to producers on a farm under section 1304.

(3)

Direct payment

The term direct payment means a direct payment made to producers on a farm under section 1303.

(4)

Effective price

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

(5)

Payment acres

The term payment acres means, in the case of direct payments and counter-cyclical payments—

(A)

except as provided in subparagraph (B), 85 percent of the base acres of peanuts on a farm on which direct payments or counter-cyclical payments are made; and

(B)

in the case of direct payments for each of the 2009 through 2011 crop years, 83.3 percent of the base acres for peanuts on a farm on which direct payments are made.

(6)

Payment yield

The term payment yield means the yield established for direct payments and the yield established for counter-cyclical payments under section 1302 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7952), as in effect on September 30, 2007, for a farm for peanuts.

(7)

Producer

(A)

In general

The term producer means an owner, operator, landlord, tenant, or sharecropper that shares in the risk of producing a crop on a farm and is entitled to share in the crop available for marketing from the farm, or would have shared had the crop been produced.

(B)

Hybrid seed

In determining whether a grower of hybrid seed is a producer, the Secretary shall—

(i)

not take into consideration the existence of a hybrid seed contract; and

(ii)

ensure that program requirements do not adversely affect the ability of the grower to receive a payment under this subtitle.

(8)

State

The term State means—

(A)

a State;

(B)

the District of Columbia;

(C)

the Commonwealth of Puerto Rico; and

(D)

any other territory or possession of the United States.

(9)

Target price

The term target price means the price per ton of peanuts used to determine the payment rate for counter-cyclical payments.

(10)

United States

The term United States, when used in a geographical sense, means all of the States.

1302.

Base acres for peanuts for a farm

(a)

Adjustment of Base Acreage for Peanuts

(1)

In general

The Secretary shall provide for an adjustment, as appropriate, in the base acres for peanuts for a farm whenever any of the following circumstances occur:

(A)

A conservation reserve contract entered into under section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831) with respect to the farm expires or is voluntarily terminated, or was terminated or expired during the period beginning on October 1, 2007, and ending on the date of enactment of this Act.

(B)

Cropland is released from coverage under a conservation reserve contract by the Secretary, or was released during the period beginning on October 1, 2007, and ending on the date of enactment of this Act.

(C)

The producer has eligible pulse crop acreage, which shall be determined in the same manner as eligible oilseed acreage under section 1101(a)(2) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7911(a)(2)).

(D)

The producer has eligible oilseed acreage as the result of the Secretary designating additional oilseeds, which shall be determined in the same manner as eligible oilseed acreage under section 1101(a)(2) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7911(a)(2)).

(2)

Special conservation reserve acreage payment rules

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

(b)

Prevention of Excess Base Acres for Peanuts

(1)

Required reduction

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

(2)

Other acreage

For purposes of paragraph (1), the Secretary shall include the following:

(A)

Any base acres for the farm for a covered commodity.

(B)

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

(C)

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

(D)

Any eligible pulse crop acreage, which shall be determined in the same manner as eligible oilseed acreage under section 1101(a)(2) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7911(a)(2)).

(E)

If the Secretary designates additional oilseeds, any eligible oilseed acreage, which shall be determined in the same manner as eligible oilseed acreage under section 1101(a)(2) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7911(a)(2)).

(3)

Selection of acres

The Secretary shall give the owner of the farm the opportunity to select the base acres for peanuts or the base acres for covered commodities against which the reduction required by paragraph (1) will be made.

(4)

Exception for double-cropped acreage

In applying paragraph (1), the Secretary shall make an exception in the case of double cropping, as determined by the Secretary.

(5)

Coordinated application of requirements

The Secretary shall take into account section 1101(b) when applying the requirements of this subsection.

(c)

Reduction in Base Acres

(1)

Reduction at option of owner

(A)

In general

The owner of a farm may reduce, at any time, the base acres for peanuts for the farm.

(B)

Effect of reduction

A reduction under subparagraph (A) shall be permanent and made in a manner prescribed by the Secretary.

(2)

Required action by Secretary

(A)

In general

The Secretary shall proportionately reduce base acres on a farm for peanuts for land that has been subdivided and developed for multiple residential units or other nonfarming uses if the size of the tracts and the density of the subdivision is such that the land is unlikely to return to the previous agricultural use, unless the producers on the farm demonstrate that the land—

(i)

remains devoted to commercial agricultural production; or

(ii)

is likely to be returned to the previous agricultural use.

(B)

Requirement

The Secretary shall establish procedures to identify land described in subparagraph (A).

(3)

Review and report

Each year, to ensure, to the maximum extent practicable, that payments are received only by producers, the Secretary shall submit to Congress a report that describes the results of the actions taken under paragraph (2).

(d)

Treatment of farms with limited base acres

(1)

Prohibition on payments

Except as provided in paragraph (2) and notwithstanding any other provision of this title, a producer on a farm may not receive direct payments, counter-cyclical payments, or average crop revenue election payments if the sum of the base acres of the farm is 10 acres or less, as determined by the Secretary.

(2)

Exceptions

Paragraph (1) shall not apply to a farm owned by—

(A)

a socially disadvantaged farmer or rancher (as defined in section 355(e) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2003(e)); or

(B)

a limited resource farmer or rancher, as defined by the Secretary.

(3)

Data collection and publication

The Secretary shall—

(A)

collect and publish segregated data and survey information about the farm profiles, utilization of land, and crop production; and

(B)

perform an evaluation on the supply and price of fruits and vegetables based on the effects of suspension of base acres under this section.

1303.

Availability of direct payments for peanuts

(a)

Payment required

For each of the 2008 through 2012 crop years for peanuts, the Secretary shall make direct payments to the producers on a farm for which a payment yield and base acres for peanuts are established.

(b)

Payment Rate

Except as provided in section 1105, the payment rate used to make direct payments with respect to peanuts for a crop year shall be equal to $36 per ton.

(c)

Payment amount

The amount of the direct payment to be paid to the producers on a farm for peanuts for a crop year shall be equal to the product of the following:

(1)

The payment rate specified in subsection (b).

(2)

The payment acres on the farm.

(3)

The payment yield for the farm.

(d)

Time for payment

(1)

In general

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

(2)

Advance payments

(A)

Option

(i)

In general

At the option of the producers on a farm, the Secretary shall pay in advance up to 22 percent of the direct payment for peanuts for any of the 2008 through 2011 crop years to the producers on a farm.

(ii)

2008 crop year

If the producers on a farm elect to receive advance direct payments under clause (i) for peanuts for the 2008 crop year, as soon as practicable after the election, the Secretary shall make the advance direct payment to the producers on the farm.

(B)

Month

(i)

Selection

Subject to clauses (ii) and (iii), the producers on a farm shall select the month during which the advance payment for a crop year will be made.

(ii)

Options

The month selected may be any month during the period—

(I)

beginning on December 1 of the calendar year before the calendar year in which the crop of peanuts is harvested; and

(II)

ending during the month within which the direct payment would otherwise be made.

(iii)

Change

The producers on a farm may change the selected month for a subsequent advance payment by providing advance notice to the Secretary.

(3)

Repayment of advance payments

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

1304.

Availability of counter-cyclical payments for peanuts

(a)

Payment required

Except as provided in section 1105, for each of the 2008 through 2012 crop years for peanuts, the Secretary shall make counter-cyclical payments to producers on farms for which payment yields and base acres for peanuts are established if the Secretary determines that the effective price for peanuts is less than the target price for peanuts.

(b)

Effective Price

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

(1)

The higher of the following:

(A)

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

(B)

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

(2)

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

(c)

Target Price

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

(d)

Payment rate

The payment rate used to make counter-cyclical payments for a crop year shall be equal to the difference between—

(1)

the target price for peanuts; and

(2)

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

(e)

Payment amount

If counter-cyclical payments are required to be paid for any of the 2008 through 2012 crops of peanuts, the amount of the counter-cyclical payment to be paid to the producers on a farm for that crop year shall be equal to the product of the following:

(1)

The payment rate specified in subsection (d).

(2)

The payment acres on the farm.

(3)

The payment yield for the farm.

(f)

Time for Payments

(1)

General rule

Except as provided in paragraph (2), if the Secretary determines under subsection (a) that counter-cyclical payments are required to be made under this section for a crop of peanuts, beginning October 1, or as soon as practicable after the end of the marketing year, the Secretary shall make the counter-cyclical payments for the crop.

(2)

Availability of partial payments

(A)

In general

If, before the end of the 12-month marketing year, the Secretary estimates that counter-cyclical payments will be required under this section for a crop year, the Secretary shall give producers on a farm the option to receive partial payments of the counter-cyclical payment projected to be made for the crop.

(B)

Election

(i)

In general

The Secretary shall allow producers on a farm to make an election to receive partial payments under subparagraph (A) at any time but not later than 60 days prior to the end of the marketing year for the crop.

(ii)

Date of issuance

The Secretary shall issue the partial payment after the date of an announcement by the Secretary but not later than 30 days prior to the end of the marketing year.

(3)

Time for partial payments

When the Secretary makes partial payments for any of the 2008 through 2010 crop years—

(A)

the first partial payment shall be made after completion of the first 180 days of the marketing year for that crop; and

(B)

the final partial payment shall be made beginning October 1, or as soon as practicable thereafter, after the end of the applicable marketing year for that crop.

(4)

Amount of partial payments

(A)

First partial payment

For each of the 2008 through 2010 crop years, the first partial payment under paragraph (3) to the producers on a farm may not exceed 40 percent of the projected counter-cyclical payment for the crop year, as determined by the Secretary.

(B)

Final payment

The final payment for a crop year shall be equal to the difference between—

(i)

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

(ii)

the amount of the partial payment made to the producers under subparagraph (A).

(5)

Repayment

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

1305.

Producer agreement required as condition on provision of payments

(a)

Compliance With Certain Requirements

(1)

Requirements

Before the producers on a farm may receive direct payments or counter-cyclical payments under this subtitle, or average crop revenue election payments under section 1105, with respect to the farm, the producers shall agree, during the crop year for which the payments are made and in exchange for the payments—

(A)

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

(B)

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

(C)

to comply with the planting flexibility requirements of section 1306;

(D)

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

(E)

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

(2)

Compliance

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

(3)

Modification

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

(b)

Transfer or Change of Interest in Farm

(1)

Termination

(A)

In general

Except as provided in paragraph (2), a transfer of (or change in) the interest of the producers on a farm in the base acres for peanuts for which direct payments or counter-cyclical payments are made, or on which average crop revenue election payments are based, shall result in the termination of the direct payments, counter-cyclical payments, or average crop revenue election payments to the extent the payments are made or based on the base acres, unless the transferee or owner of the acreage agrees to assume all obligations under subsection (a).

(B)

Effective date

The termination shall take effect on the date determined by the Secretary.

(2)

Exception

If a producer entitled to a direct payment, counter-cyclical payment, or average crop revenue election payment dies, becomes incompetent, or is otherwise unable to receive the payment, the Secretary shall make the payment, in accordance with rules issued by the Secretary.

(c)

Acreage Reports

(1)

In general

As a condition on the receipt of any benefits under this subtitle, the Secretary shall require producers on a farm to submit to the Secretary annual acreage reports with respect to all cropland on the farm.

(2)

Penalties

No penalty with respect to benefits under this subtitle shall be assessed against the producers on a farm for an inaccurate acreage report unless the producers on the farm knowingly and willfully falsified the acreage report.

(d)

Tenants and Sharecroppers

In carrying out this subtitle, the Secretary shall provide adequate safeguards to protect the interests of tenants and sharecroppers.

(e)

Sharing of Payments

The Secretary shall provide for the sharing of direct payments, counter-cyclical payments, or average crop revenue election payments under section 1105 among the producers on a farm on a fair and equitable basis.

1306.

Planting flexibility

(a)

Permitted Crops

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

(b)

Limitations Regarding Certain Commodities

(1)

General limitation

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

(2)

Treatment of trees and other perennials

The planting of an agricultural commodity specified in paragraph (3) that is produced on a tree or other perennial plant shall be prohibited on base acres for peanuts.

(3)

Covered agricultural commodities

Paragraphs (1) and (2) apply to the following agricultural commodities:

(A)

Fruits.

(B)

Vegetables (other than mung beans and pulse crops).

(C)

Wild rice.

(c)

Exceptions

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

(1)

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

(2)

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

(3)

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

(A)

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

(B)

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

1307.

Marketing assistance loans and loan deficiency payments for peanuts

(a)

Nonrecourse Loans Available

(1)

Availability

For each of the 2008 through 2012 crops of peanuts, the Secretary shall make available to producers on a farm nonrecourse marketing assistance loans for peanuts produced on the farm.

(2)

Terms and conditions

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

(3)

Eligible production

The producers on a farm shall be eligible for a marketing assistance loan under this subsection for any quantity of peanuts produced on the farm.

(4)

Options for obtaining loan

A marketing assistance loan under this subsection, and loan deficiency payments under subsection (e), may be obtained at the option of the producers on a farm through—

(A)

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

(B)

the Farm Service Agency.

(5)

Storage of loan peanuts

As a condition on the Secretary's approval of an individual or entity to provide storage for peanuts for which a marketing assistance loan is made under this section, the individual or entity shall agree—

(A)

to provide such storage on a nondiscriminatory basis; and

(B)

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

(6)

Storage, handling, and associated costs

(A)

In general

Beginning with the 2008 crop of peanuts, to ensure proper storage of peanuts for which a loan is made under this section, the Secretary shall pay handling and other associated costs (other than storage costs) incurred at the time at which the peanuts are placed under loan, as determined by the Secretary.

(B)

Redemption and forfeiture

The Secretary shall—

(i)

require the repayment of handling and other associated costs paid under subparagraph (A) for all peanuts pledged as collateral for a loan that is redeemed under this section; and

(ii)

pay storage, handling, and other associated costs for all peanuts pledged as collateral that are forfeited under this section.

(7)

Marketing

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

(b)

Loan Rate

Except as provided in section 1105, the loan rate for a marketing assistance loan for peanuts under subsection (a) shall be equal to $355 per ton.

(c)

Term of Loan

(1)

In general

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

(2)

Extensions prohibited

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

(d)

Repayment Rate

(1)

In general

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

(A)

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

(B)

a rate that the Secretary determines will—

(i)

minimize potential loan forfeitures;

(ii)

minimize the accumulation of stocks of peanuts by the Federal Government;

(iii)

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

(iv)

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

(2)

Authority to temporarily adjust repayment rates

(A)

Adjustment authority

In the event of a severe disruption to marketing, transportation, or related infrastructure, the Secretary may modify the repayment rate otherwise applicable under this subsection for marketing assistance loans for peanuts under subsection (a).

(B)

Duration

An adjustment made under subparagraph (A) in the repayment rate for marketing assistance loans for peanuts shall be in effect on a short-term and temporary basis, as determined by the Secretary.

(e)

Loan Deficiency Payments

(1)

Availability

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

(2)

Computation

A loan deficiency payment under this subsection shall be computed by multiplying—

(A)

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

(B)

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

(3)

Payment rate

For purposes of this subsection, the payment rate shall be the amount by which—

(A)

the loan rate established under subsection (b); exceeds

(B)

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

(4)

Effective date for payment rate determination

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

(f)

Compliance With Conservation and Wetlands Requirements

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

(g)

Reimbursable Agreements and Payment of Administrative Expenses

The Secretary may implement any reimbursable agreements or provide for the payment of administrative expenses under this subtitle only in a manner that is consistent with such activities in regard to other commodities.

1308.

Adjustments of loans

(a)

Adjustment Authority

The Secretary may make appropriate adjustments in the loan rates for peanuts for differences in grade, type, quality, location, and other factors.

(b)

Manner of Adjustment

The adjustments under subsection (a) shall, to the maximum extent practicable, be made in such a manner that the average loan level for peanuts will, on the basis of the anticipated incidence of the factors, be equal to the level of support determined in accordance with this subtitle and subtitles B, D, and E.

(c)

Adjustment on County Basis

(1)

In general

Subject to paragraph (2), the Secretary may establish loan rates for a crop of peanuts for producers in individual counties in a manner that results in the lowest loan rate being 95 percent of the national average loan rate, if those loan rates do not result in an increase in outlays.

(2)

Prohibition

Adjustments under this subsection shall not result in an increase in the national average loan rate for any year.

D

Sugar

1401.

Sugar program

(a)

In general

Section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272) is amended to read as follows:

156.

Sugar program

(a)

Sugarcane

The Secretary shall make loans available to processors of domestically grown sugarcane at a rate equal to—

(1)

18.00 cents per pound for raw cane sugar for the 2008 crop year;

(2)

18.25 cents per pound for raw cane sugar for the 2009 crop year;

(3)

18.50 cents per pound for raw cane sugar for the 2010 crop year;

(4)

18.75 cents per pound for raw cane sugar for the 2011 crop year; and

(5)

18.75 cents per pound for raw cane sugar for the 2012 crop year.

(b)

Sugar beets

The Secretary shall make loans available to processors of domestically grown sugar beets at a rate equal to—

(1)

22.9 cents per pound for refined beet sugar for the 2008 crop year; and

(2)

a rate that is equal to 128.5 percent of the loan rate per pound of raw cane sugar for the applicable crop year under subsection (a) for each of the 2009 through 2012 crop years.

(c)

Term of loans

(1)

In general

A loan under this section during any fiscal year shall be made available not earlier than the beginning of the fiscal year and shall mature at the earlier of—

(A)

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

(B)

the end of the fiscal year in which the loan is made.

(2)

Supplemental loans

In the case of a loan made under this section in the last 3 months of a fiscal year, the processor may repledge the sugar as collateral for a second loan in the subsequent fiscal year, except that the second loan shall—

(A)

be made at the loan rate in effect at the time the first loan was made; and

(B)

mature in 9 months less the quantity of time that the first loan was in effect.

(d)

Loan type; processor assurances

(1)

Nonrecourse loans

The Secretary shall carry out this section through the use of nonrecourse loans.

(2)

Processor assurances

(A)

In general

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

(B)

Minimum payments

(i)

In general

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

(ii)

Limitation

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

(3)

Administration

The Secretary may not impose or enforce any prenotification requirement, or similar administrative requirement not otherwise in effect on May 13, 2002, that has the effect of preventing a processor from electing to forfeit the loan collateral (of an acceptable grade and quality) on the maturity of the loan.

(e)

Loans for in-process sugar

(1)

Definition of in-process sugars and syrups

In this subsection, the term in-process sugars and syrups does not include raw sugar, liquid sugar, invert sugar, invert syrup, or other finished product that is otherwise eligible for a loan under subsection (a) or (b).

(2)

Availability

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

(3)

Loan rate

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

(4)

Further processing on forfeiture

(A)

In general

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

(B)

Transfer to corporation

Once the in-process sugars and syrups are fully processed into raw cane sugar or refined beet sugar, the processor shall transfer the sugar to the Commodity Credit Corporation.

(C)

Payment to processor

On transfer of the sugar, the Secretary shall make a payment to the processor in an amount equal to the amount obtained by multiplying—

(i)

the difference between—

(I)

the loan rate for raw cane sugar or refined beet sugar, as appropriate; and

(II)

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

(ii)

the quantity of sugar transferred to the Secretary.

(5)

Loan conversion

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

(6)

Term of loan

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

(f)

Avoiding forfeitures; corporation inventory disposition

(1)

In general

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

(2)

Inventory disposition

(A)

In general

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

(B)

Bioenergy feedstock

If a reduction in the quantity of production accepted under subparagraph (A) involves sugar beets or sugarcane that has already been planted, the sugar beets or sugarcane so planted may not be used for any commercial purpose other than as a bioenergy feedstock.

(C)

Additional authority

The authority provided under this paragraph is in addition to any authority of the Commodity Credit Corporation under any other law.

(g)

Information reporting

(1)

Duty of processors and refiners to report

A sugarcane processor, cane sugar refiner, and sugar beet processor shall furnish the Secretary, on a monthly basis, such information as the Secretary may require to administer sugar programs, including the quantity of purchases of sugarcane, sugar beets, and sugar, and production, importation, distribution, and stock levels of sugar.

(2)

Duty of producers to report

(A)

Proportionate share states

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

(B)

Other states

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

(3)

Duty of importers to report

(A)

In general

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

(B)

Tariff-rate quotas

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

(4)

Collection of information on mexico

(A)

Collection

The Secretary shall collect—

(i)

information on the production, consumption, stocks, and trade of sugar in Mexico, including United States exports of sugar to Mexico; and

(ii)

publicly available information on Mexican production, consumption, and trade of high fructose corn syrups.

(B)

Publication

The data collected under subparagraph (A) shall be published in each edition of the World Agricultural Supply and Demand Estimates.

(5)

Penalty

Any person willfully failing or refusing to furnish the information required to be reported by paragraph (1), (2), or (3), or furnishing willfully false information, shall be subject to a civil penalty of not more than $10,000 for each such violation.

(6)

Monthly reports

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

(h)

Substitution of refined sugar

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

(i)

Effective period

This section shall be effective only for the 2008 through 2012 crops of sugar beets and sugarcane.

.

(b)

Transition

The Secretary shall make loans for raw cane sugar and refined beet sugar available for the 2007 crop year on the terms and conditions provided in section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272), as in effect on the day before the date of enactment of this Act.

1402.

United States membership in the International Sugar Organization

The Secretary shall work with the Secretary of State to restore United States membership in the International Sugar Organization not later than 1 year after the date of enactment of this Act.

1403.

Flexible marketing allotments for sugar

(a)

Definitions

Section 359a of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359aa) is amended—

(1)

by redesignating paragraphs (1), (2), (3), and (4) as paragraphs (2), (4), (5), and (6), respectively;

(2)

by inserting before paragraph (2) (as so redesignated) the following:

(1)

Human consumption

The term human consumption, when used in the context of a reference to sugar (whether in the form of sugar, in-process sugar, syrup, molasses, or in some other form) for human consumption, includes sugar for use in human food, beverages, or similar products.

; and

(3)

by inserting after paragraph (2) (as so redesignated) the following:

(3)

Market

(A)

In general

The term market means to sell or otherwise dispose of in commerce in the United States.

(B)

Inclusions

The term market includes—

(i)

the forfeiture of sugar under the loan program for sugar established under section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272);

(ii)

with respect to any integrated processor and refiner, the movement of raw cane sugar into the refining process; and

(iii)

the sale of sugar for the production of ethanol or other bioenergy product, if the disposition of the sugar is administered by the Secretary under section 9010 of the Farm Security and Rural Investment Act of 2002.

(C)

Marketing year

Forfeited sugar described in subparagraph (B)(i) shall be considered to have been marketed during the crop year for which a loan is made under the loan program described in that subparagraph.

.

(b)

Flexible Marketing Allotments for Sugar

Section 359b of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359bb) is amended to read as follows:

359b.

Flexible marketing allotments for sugar

(a)

Sugar Estimates

(1)

In general

Not later than August 1 before the beginning of each of the 2008 through 2012 crop years for sugarcane and sugar beets, the Secretary shall estimate—

(A)

the quantity of sugar that will be subject to human consumption in the United States during the crop year;

(B)

the quantity of sugar that would provide for reasonable carryover stocks;

(C)

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

(D)

the quantity of sugar that will be available from the domestic processing of sugarcane, sugar beets, and in-process beet sugar; and

(E)

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

(2)

Exclusion

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

(3)

Reestimates

The Secretary shall make reestimates of sugar consumption, stocks, production, and imports for a crop year as necessary, but not later than the beginning of each of the second through fourth quarters of the crop year.

(b)

Sugar Allotments

(1)

Establishment

By the beginning of each crop year, the Secretary shall establish for that crop year appropriate allotments under section 359c for the marketing by processors of sugar processed from sugar cane or sugar beets or in-process beet sugar (whether the sugar beets or in-process beet sugar was produced domestically or imported) at a level that is—

(A)

sufficient to maintain raw and refined sugar prices above forfeiture levels so that there will be no forfeitures of sugar to the Commodity Credit Corporation under the loan program for sugar established under section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272); but

(B)

not less than 85 percent of the estimated quantity of sugar for domestic human consumption for the crop year.

(2)

Products

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

(c)

Coverage of Allotments

(1)

In general

The marketing allotments under this part shall apply to the marketing by processors of sugar intended for domestic human consumption that has been processed from sugar cane, sugar beets, or in-process beet sugar, whether such sugar beets or in-process beet sugar was produced domestically or imported.

(2)

Exceptions

Consistent with the administration of marketing allotments for each of the 2002 through 2007 crop years, the marketing allotments shall not apply to sugar sold—

(A)

to facilitate the exportation of the sugar to a foreign country, except that the exports of sugar shall not be eligible to receive credits under reexport programs for refined sugar or sugar containing products administered by the Secretary;

(B)

to enable another processor to fulfill an allocation established for that processor; or

(C)

for uses other than domestic human consumption, except for the sale of sugar for the production of ethanol or other bioenergy if the disposition of the sugar is administered by the Secretary under section 9010 of the Farm Security and Rural Investment Act of 2002.

(3)

Requirement

The sale of sugar described in paragraph (2)(B) shall be—

(A)

made prior to May 1; and

(B)

reported to the Secretary.

(d)

Prohibitions

(1)

In general

During all or part of any crop year for which marketing allotments have been established, no processor of sugar beets or sugarcane shall market for domestic human consumption a quantity of sugar in excess of the allocation established for the processor, except—

(A)

to enable another processor to fulfill an allocation established for that other processor; or

(B)

to facilitate the exportation of the sugar.

(2)

Civil penalty

Any processor who knowingly violates paragraph (1) shall be liable to the Commodity Credit Corporation for a civil penalty in an amount equal to 3 times the United States market value, at the time of the commission of the violation, of that quantity of sugar involved in the violation.

.

(c)

Establishment of Flexible Marketing Allotments

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

(1)

by striking subsection (b) and inserting the following:

(b)

Overall Allotment Quantity

(1)

In general

The Secretary shall establish the overall quantity of sugar to be allotted for the crop year (referred to in this part as the overall allotment quantity) at a level that is—

(A)

sufficient to maintain raw and refined sugar prices above forfeiture levels to avoid forfeiture of sugar to the Commodity Credit Corporation; but

(B)

not less than a quantity equal to 85 percent of the estimated quantity of sugar for domestic human consumption for the crop year.

(2)

Adjustment

Subject to paragraph (1), the Secretary shall adjust the overall allotment quantity to maintain—

(A)

raw and refined sugar prices above forfeiture levels to avoid the forfeiture of sugar to the Commodity Credit Corporation; and

(B)

adequate supplies of raw and refined sugar in the domestic market.

;

(2)

in subsection (d)(2), by inserting or in-process beet sugar before the period at the end;

(3)

in subsection (g)(1)—

(A)

by striking (1) in general.—The Secretary and inserting the following:

(1)

Adjustments

(A)

In general

Subject to subparagraph (B), the Secretary

; and

(B)

by adding at the end the following:

(B)

Limitation

In carrying out subparagraph (A), the Secretary may not reduce the overall allotment quantity to a quantity of less than 85 percent of the estimated quantity of sugar for domestic human consumption for the crop year.

; and

(4)

by striking subsection (h).

(d)

Allocation of Marketing Allotments

Section 359d(b) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359dd(b)) is amended—

(1)

in paragraph (1)(F), by striking Except as otherwise provided in section 359f(c)(8), if and inserting If; and

(2)

in paragraph (2), by striking subparagraphs (G), (H), and (I) and inserting the following:

(G)

Sale of factories of a processor to another processor

(i)

Effect of sale

Subject to subparagraphs (E) and (F), if 1 or more factories of a processor of beet sugar (but not all of the assets of the processor) are sold to another processor of beet sugar during a crop year, the Secretary shall assign a pro rata portion of the allocation of the seller to the allocation of the buyer to reflect the historical contribution of the production of the sold 1 or more factories to the total allocation of the seller, unless the buyer and the seller have agreed upon the transfer of a different portion of the allocation of the seller, in which case, the Secretary shall transfer that portion agreed upon by the buyer and seller.

(ii)

Application of allocation

The assignment of the allocation under clause (i) shall apply—

(I)

during the remainder of the crop year for which the sale described in clause (i) occurs; and

(II)

during each subsequent crop year.

(iii)

Use of other factories to fill allocation

If the assignment of the allocation under clause (i) to the buyer for the 1 or more purchased factories cannot be filled by the production of the 1 or more purchased factories, the remainder of the allocation may be filled by beet sugar produced by the buyer from other factories of the buyer.

(H)

New entrants starting production, reopening, or acquiring an existing factory with production history

(i)

Definition of new entrant

(I)

In general

In this subparagraph, the term new entrant means an individual, corporation, or other entity that—

(aa)

does not have an allocation of the beet sugar allotment under this part;

(bb)

is not affiliated with any other individual, corporation, or entity that has an allocation of beet sugar under this part (referred to in this clause as a third party); and

(cc)

will process sugar beets produced by sugar beet growers under contract with the new entrant for the production of sugar at the new or re-opened factory that is the basis for the new entrant allocation.

(II)

Affiliation

For purposes of subclause (I)(bb), a new entrant and a third party shall be considered to be affiliated if—

(aa)

the third party has an ownership interest in the new entrant;

(bb)

the new entrant and the third party have owners in common;

(cc)

the third party has the ability to exercise control over the new entrant by organizational rights, contractual rights, or any other means;

(dd)

the third party has a contractual relationship with the new entrant by which the new entrant will make use of the facilities or assets of the third party; or

(ee)

there are any other similar circumstances by which the Secretary determines that the new entrant and the third party are affiliated.

(ii)

Allocation for a new entrant that has constructed a new factory or reopened a factory that was not operated since before 1998

If a new entrant constructs a new sugar beet processing factory, or acquires and reopens a sugar beet processing factory that last processed sugar beets prior to the 1998 crop year and there is no allocation currently associated with the factory, the Secretary shall—

(I)

assign an allocation for beet sugar to the new entrant that provides a fair and equitable distribution of the allocations for beet sugar so as to enable the new entrant to achieve a factory utilization rate comparable to the factory utilization rates of other similarly-situated processors; and

(II)

reduce the allocations for beet sugar of all other processors on a pro rata basis to reflect the allocation to the new entrant.

(iii)

Allocation for a new entrant that has acquired an existing factory with a production history

(I)

In general

If a new entrant acquires an existing factory that has processed sugar beets from the 1998 or subsequent crop year and has a production history, on the mutual agreement of the new entrant and the company currently holding the allocation associated with the factory, the Secretary shall transfer to the new entrant a portion of the allocation of the current allocation holder to reflect the historical contribution of the production of the 1 or more sold factories to the total allocation of the current allocation holder, unless the new entrant and current allocation holder have agreed upon the transfer of a different portion of the allocation of the current allocation holder, in which case, the Secretary shall transfer that portion agreed upon by the new entrant and the current allocation holder.

(II)

Prohibition

In the absence of a mutual agreement described in subclause (I), the new entrant shall be ineligible for a beet sugar allocation.

(iv)

Appeals

Any decision made under this subsection may be appealed to the Secretary in accordance with section 359i.

.

(e)

Reassignment of Deficits

Section 359e(b) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359ee(b)) is amended in paragraphs (1)(D) and (2)(C), by inserting of raw cane sugar after imports each place it appears.

(f)

Provisions Applicable to Producers

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

(1)

by striking paragraph (8);

(2)

by redesignating paragraphs (1) through (7) as paragraphs (2) through (8), respectively;

(3)

by inserting before paragraph (2) (as so redesignated) the following:

(1)

Definition of seed

(A)

In general

In this subsection, the term seed means only those varieties of seed that are dedicated to the production of sugarcane from which is produced sugar for human consumption.

(B)

Exclusion

The term seed does not include seed of a high-fiber cane variety dedicated to other uses, as determined by the Secretary

;

(4)

in paragraph (3) (as so redesignated)—

(A)

in the first sentence—

(i)

by striking paragraph (1) and inserting paragraph (2); and

(ii)

by inserting sugar produced from after quantity of; and

(B)

in the second sentence, by striking paragraph (7) and inserting paragraph (8);

(5)

in the first sentence of paragraph (6)(C) (as so redesignated), by inserting for sugar before in excess of the farm's proportionate share; and

(6)

in paragraph (8) (as so redesignated), by inserting sugar from after the amount of.

(g)

Special Rules

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

(1)

by striking subsection (a) and inserting the following:

(a)

Transfer of Acreage Base History

(1)

Transfer authorized

For the purpose of establishing proportionate shares for sugarcane farms under section 359f(c), the Secretary, on application of any producer, with the written consent of all owners of a farm, may transfer the acreage base history of the farm to any other parcels of land of the applicant.

(2)

Converted acreage base

(A)

In general

Sugarcane acreage base established under section 359f(c) that has been or is converted to nonagricultural use on or after May 13, 2002, may be transferred to other land suitable for the production of sugarcane that can be delivered to a processor in a proportionate share State in accordance with this paragraph.

(B)

Notification

Not later than 90 days after the Secretary becomes aware of a conversion of any sugarcane acreage base to a nonagricultural use, the Secretary shall notify the 1 or more affected landowners of the transferability of the applicable sugarcane acreage base.

(C)

Initial transfer period

The owner of the base attributable to the acreage at the time of the conversion shall be afforded 90 days from the date of the receipt of the notification under subparagraph (B) to transfer the base to 1 or more farms owned by the owner.

(D)

Grower of record

If a transfer under subparagraph (C) cannot be accomplished during the period specified in that subparagraph, the grower of record with regard to the acreage base on the date on which the acreage was converted to nonagricultural use shall—

(i)

be notified; and

(ii)

have 90 days from the date of the receipt of the notification to transfer the base to 1 or more farms operated by the grower.

(E)

Pool distribution

(i)

In general

If transfers under subparagraphs (B) and (C) cannot be accomplished during the periods specified in those subparagraphs, the county committee of the Farm Service Agency for the applicable county shall place the acreage base in a pool for possible assignment to other farms.

(ii)

Acceptance of requests

After providing reasonable notice to farm owners, operators, and growers of record in the county, the county committee shall accept requests from owners, operators, and growers of record in the county.

(iii)

Assignment

The county committee shall assign the acreage base to other farms in the county that are eligible and capable of accepting the acreage base, based on a random drawing from among the requests received under clause (ii).

(F)

Statewide reallocation

(i)

In general

Any acreage base remaining unassigned after the transfers and processes described in subparagraphs (A) through (E) shall be made available to the State committee of the Farm Service Agency for allocation among the remaining county committees in the State representing counties with farms eligible for assignment of the base, based on a random drawing.

(ii)

Allocation

Any county committee receiving acreage base under this subparagraph shall allocate the acreage base to eligible farms using the process described in subparagraph (E).

(G)

Status of reassigned base

After acreage base has been reassigned in accordance with this subparagraph, the acreage base shall—

(i)

remain on the farm; and

(ii)

be subject to the transfer provisions of paragraph (1).

; and

(2)

in subsection (d)—

(A)

in paragraph (1)—

(i)

by inserting affected before crop-share owners each place it appears; and

(ii)

by striking , and from the processing company holding the applicable allocation for such shares,; and

(B)

in paragraph (2), by striking based on and all that follows through the end of subparagraph (B) and inserting

based on—

(A)

the number of acres of sugarcane base being transferred; and

(B)

the pro rata amount of allocation at the processing company holding the applicable allocation that equals the contribution of the grower to allocation of the processing company for the sugarcane acreage base being transferred.

.

(h)

Appeals

Section 359i of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359ii) is amended—

(1)

in subsection (a), by inserting or 359g(d) after 359f; and

(2)

by striking subsection (c).

(i)

Reallocating Sugar Quota Import Shortfalls

Section 359k of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359kk) is repealed.

(j)

Administration of Tariff Rate Quotas

Part VII of subtitle B of title III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359aa) (as amended by subsection (i)) is amended by adding at the end the following:

359k.

Administration of tariff rate quotas

(a)

Establishment

(1)

In general

Except as provided in paragraph (2) and notwithstanding any other provision of law, at the beginning of the quota year, the Secretary shall establish the tariff-rate quotas for raw cane sugar and refined sugars at the minimum level necessary to comply with obligations under international trade agreements that have been approved by Congress.

(2)

Exception

Paragraph (1) shall not apply to specialty sugar.

(b)

Adjustment

(1)

Before April 1

Before April 1 of each fiscal year, if there is an emergency shortage of sugar in the United States market that is caused by a war, flood, hurricane, or other natural disaster, or other similar event as determined by the Secretary—

(A)

the Secretary shall take action to increase the supply of sugar in accordance with sections 359c(b)(2) and 359e(b), including an increase in the tariff-rate quota for raw cane sugar to accommodate the reassignment to imports; and

(B)

if there is still a shortage of sugar in the United States market, and marketing of domestic sugar has been maximized, and domestic raw cane sugar refining capacity has been maximized, the Secretary may increase the tariff-rate quota for refined sugars sufficient to accommodate the supply increase, if the further increase will not threaten to result in the forfeiture of sugar pledged as collateral for a loan under section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272).

(2)

On or after April 1

On or after April 1 of each fiscal year—

(A)

the Secretary may take action to increase the supply of sugar in accordance with sections 359c(b)(2) and 359e(b), including an increase in the tariff-rate quota for raw cane sugar to accommodate the reassignment to imports; and

(B)

if there is still a shortage of sugar in the United States market, and marketing of domestic sugar has been maximized, the Secretary may increase the tariff-rate quota for raw cane sugar if the further increase will not threaten to result in the forfeiture of sugar pledged as collateral for a loan under section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272).

.

(k)

Period of Effectiveness

Part VII of subtitle B of title III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359aa) (as amended by subsection (j)) is amended by adding at the end the following:

359l.

Period of effectiveness

(a)

In General

This part shall be effective only for the 2008 through 2012 crop years for sugar.

(b)

Transition

The Secretary shall administer flexible marketing allotments for sugar for the 2007 crop year for sugar on the terms and conditions provided in this part as in effect on the day before the date of enactment of this section.

.

1404.

Storage facility loans

Section 1402(c) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7971(c)) is amended—

(1)

in paragraph (1), by striking and at the end;

(2)

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

(3)

by inserting after paragraph (1) the following:

(2)

not include any penalty for prepayment; and

; and

(4)

in paragraph (3) (as redesignated by paragraph (2)), by inserting other after on such.

1405.

Commodity Credit Corporation storage payments

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

167.

Commodity Credit Corporation storage payments

(a)

Initial Crop Years

Notwithstanding any other provision of law, for each of the 2008 through 2011 crop years, the Commodity Credit Corporation shall establish rates for the storage of forfeited sugar in an amount that is not less than—

(1)

in the case of refined sugar, 15 cents per hundredweight of refined sugar per month; and

(2)

in the case of raw cane sugar, 10 cents per hundredweight of raw cane sugar per month.

(b)

Subsequent Crop Years

For each of the 2012 and subsequent crop years, the Commodity Credit Corporation shall establish rates for the storage of forfeited sugar in the same manner as was used on the day before the date of enactment of this section.

.

E

Dairy

1501.

Dairy product price support program

(a)

Definition of net removals

In this section, the term net removals means—

(1)

the sum of—

(A)

the quantity of a product described in subsection (b) purchased by the Commodity Credit Corporation under this section; and

(B)

the quantity of the product exported under section 153 of the Food Security Act of 1985 (15 U.S.C. 713a–14); less

(2)

the quantity of the product sold for unrestricted use by the Commodity Credit Corporation.

(b)

Support activities

During the period beginning on January 1, 2008, and ending December 31, 2012, the Secretary shall support the price of cheddar cheese, butter, and nonfat dry milk through the purchase of such products made from milk produced in the United States.

(c)

Purchase price

To carry out subsection (b) during the period specified in that subsection, the Secretary shall purchase—

(1)

cheddar cheese in blocks at not less than $1.13 per pound;

(2)

cheddar cheese in barrels at not less than $1.10 per pound;

(3)

butter at not less than $1.05 per pound; and

(4)

nonfat dry milk at not less than $0.80 per pound.

(d)

Temporary price adjustment to avoid excess inventories

(1)

Adjustments authorized

The Secretary may adjust the minimum purchase prices established under subsection (c) only as permitted under this subsection.

(2)

Cheese inventories in excess of 200,000,000 pounds

If net removals for a period of 12 consecutive months exceed 200,000,000 pounds of cheese, but do not exceed 400,000,000 pounds, the Secretary may reduce the purchase prices under paragraphs (1) and (2) of subsection (c) during the immediately following month by not more than 10 cents per pound.

(3)

Cheese inventories in excess of 400,000,000 pounds

If net removals for a period of 12 consecutive months exceed 400,000,000 pounds of cheese, the Secretary may reduce the purchase prices under paragraphs (1) and (2) of subsection (c) during the immediately following month by not more than 20 cents per pound.

(4)

Butter inventories in excess of 450,000,000 pounds

If net removals for a period of 12 consecutive months exceed 450,000,000 pounds of butter, but do not exceed 650,000,000 pounds, the Secretary may reduce the purchase price under subsection (c)(3) during the immediately following month by not more than 10 cents per pound.

(5)

Butter inventories in excess of 650,000,000 pounds

If net removals for a period of 12 consecutive months exceed 650,000,000 pounds of butter, the Secretary may reduce the purchase price under subsection (c)(3) during the immediately following month by not more than 20 cents per pound.

(6)

Nonfat dry milk inventories in excess of 600,000,000 pounds

If net removals for a period of 12 consecutive months exceed 600,000,000 pounds of nonfat dry milk, but do not exceed 800,000,000 pounds, the Secretary may reduce the purchase price under subsection (c)(4) during the immediately following month by not more than 5 cents per pound.

(7)

Nonfat dry milk inventories in excess of 800,000,000 pounds

If net removals for a period of 12 consecutive months exceed 800,000,000 pounds of nonfat dry milk, the Secretary may reduce the purchase price under subsection (c)(4) during the immediately following month by not more than 10 cents per pound.

(e)

Uniform purchase price

The prices that the Secretary pays for cheese, butter, or nonfat dry milk, respectively, under subsection (b) shall be uniform for all regions of the United States.

(f)

Sales from inventories

In the case of each commodity specified in subsection (c) that is available for unrestricted use in the inventory of the Commodity Credit Corporation, the Secretary may sell the commodity at the market prices prevailing for that commodity at the time of sale, except that the sale price may not be less than 110 percent of the minimum purchase price specified in subsection (c) for that commodity.

1502.

Dairy forward pricing program

(a)

Program required

The Secretary shall establish a program under which milk producers and cooperative associations of producers are authorized to voluntarily enter into forward price contracts with milk handlers.

(b)

Minimum milk price requirements

Payments made by milk handlers to milk producers and cooperative associations of producers, and prices received by milk producers and cooperative associations, in accordance with the terms of a forward price contract authorized by subsection (a), shall be treated as satisfying—

(1)

all uniform and minimum milk price requirements of subparagraphs (B) and (F) of paragraph (5) of section 8c of the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937; and

(2)

the total payment requirement of subparagraph (C) of that paragraph.

(c)

Milk covered by program

(1)

Covered milk

The program shall apply only with respect to the marketing of federally regulated milk that—

(A)

is not classified as Class I milk or otherwise intended for fluid use; and

(B)

is in the current of interstate or foreign commerce or directly burdens, obstructs, or affects interstate or foreign commerce in federally regulated milk.

(2)

Relation to class I milk

To assist milk handlers in complying with paragraph (1)(A) without having to segregate or otherwise individually track the source and disposition of milk, a milk handler may allocate milk receipts from producers, cooperatives, and other sources that are not subject to a forward contract to satisfy the obligations of the handler with regard to Class I milk usage.

(d)

Voluntary program

(1)

In general

A milk handler may not require participation in a forward pricing contract as a condition of the handler receiving milk from a producer or cooperative association of producers.

(2)

Pricing

A producer or cooperative association described in paragraph (1) may continue to have their milk priced in accordance with the minimum payment provisions of the Federal milk marketing order.

(3)

Complaints

(A)

In general

The Secretary shall investigate complaints made by producers or cooperative associations of coercion by handlers to enter into forward contracts.

(B)

Action

If the Secretary finds evidence of coercion, the Secretary shall take appropriate action.

(e)

Duration

(1)

New contracts

No forward price contract may be entered into under the program established under this section after September 30, 2012.

(2)

Application

No forward contract entered into under the program may extend beyond September 30, 2015.

1503.

Dairy export incentive program

(a)

Extension

Section 153(a) of the Food Security Act of 1985 (15 U.S.C. 713a–14(a)) is amended by striking 2007 and inserting 2012.

(b)

Compliance with trade agreements

Section 153 of the Food Security Act of 1985 (15 U.S.C. 713a–14) is amended—

(1)

in subsection (c), by striking paragraph (3) and inserting the following:

(3)

the maximum volume of dairy product exports allowable consistent with the obligations of the United States under the Uruguay Round Agreements approved under section 101 of the Uruguay Round Agreements Act (19 U.S.C. 3511) is exported under the program each year (minus the volume sold under section 1163 of this Act during that year), except to the extent that the export of such a volume under the program would, in the judgment of the Secretary, exceed the limitations on the value permitted under subsection (f); and

; and.

(2)

in subsection (f), by striking paragraph (1) and inserting the following:

(1)

Funds and commodities

Except as provided in paragraph (2), the Commodity Credit Corporation shall in each year use money and commodities for the program under this section in the maximum amount consistent with the obligations of the United States under the Uruguay Round Agreements approved under section 101 of the Uruguay Round Agreements Act (19 U.S.C. 3511), minus the amount expended under section 1163 of this Act during that year.

.

1504.

Revision of Federal marketing order amendment procedures

Section 8c of the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, is amended by striking subsection (17) and inserting the following:

(17)

Provisions applicable to amendments

(A)

Applicability to amendments

The provisions of this section and section 8d applicable to orders shall be applicable to amendments to orders.

(B)

Supplemental rules of practice

(i)

In general

Not later than 60 days after the date of enactment of this subparagraph, the Secretary shall issue, using informal rulemaking, supplemental rules of practice to define guidelines and timeframes for the rulemaking process relating to amendments to orders.

(ii)

Issues

At a minimum, the supplemental rules of practice shall establish—

(I)

proposal submission requirements;

(II)

pre-hearing information session specifications;

(III)

written testimony and data request requirements;

(IV)

public participation timeframes; and

(V)

electronic document submission standards.

(iii)

Effective date

The supplemental rules of practice shall take effect not later than 120 days after the date of enactment of this subparagraph, as determined by the Secretary.

(C)

Hearing timeframes

(i)

In general

Not more than 30 days after the receipt of a proposal for an amendment hearing regarding a milk marketing order, the Secretary shall—

(I)

issue a notice providing an action plan and expected timeframes for completion of the hearing not more than 120 days after the date of the issuance of the notice;

(II)
(aa)

issue a request for additional information to be used by the Secretary in making a determination regarding the proposal; and

(bb)

if the additional information is not provided to the Secretary within the timeframe requested by the Secretary, issue a denial of the request; or

(III)

issue a denial of the request.

(ii)

Requirement

A post-hearing brief may be filed under this paragraph not later than 60 days after the date of an amendment hearing regarding a milk marketing order.

(iii)

Recommended decisions

A recommended decision on a proposed amendment to an order shall be issued not later than 90 days after the deadline for the submission of post-hearing briefs.

(iv)

Final decisions

A final decision on a proposed amendment to an order shall be issued not later than 60 days after the deadline for submission of comments and exceptions to the recommended decision issued under clause (iii).

(D)

Industry assessments

If the Secretary determines it is necessary to improve or expedite rulemaking under this subsection, the Secretary may impose an assessment on the affected industry to supplement appropriated funds for the procurement of service providers, such as court reporters.

(E)

Use of informal rulemaking

The Secretary may use rulemaking under section 553 of title 5, United States Code, to amend orders, other than provisions of orders that directly affect milk prices.

(F)

Avoiding duplication

The Secretary shall not be required to hold a hearing on any amendment proposed to be made to a milk marketing order in response to an application for a hearing on the proposed amendment if—

(i)

the application requesting the hearing is received by the Secretary not later than 90 days after the date on which the Secretary has announced the decision on a previously proposed amendment to that order; and

(ii)

the 2 proposed amendments are essentially the same, as determined by the Secretary.

(G)

Monthly feed and fuel costs for make allowances

As part of any hearing to adjust make allowances under marketing orders commencing prior to September 30, 2012, the Secretary shall—

(i)

determine the average monthly prices of feed and fuel incurred by dairy producers in the relevant marketing area;

(ii)

consider the most recent monthly feed and fuel price data available; and

(iii)

consider those prices in determining whether or not to adjust make allowances.

.

1505.

Dairy indemnity program

Section 3 of Public Law 90–484 (7 U.S.C. 450l) is amended by striking 2007 and inserting 2012.

1506.

Milk income loss contract program

(a)

Definitions

In this section:

(1)

Class i milk

The term Class I milk means milk (including milk components) classified as Class I milk under a Federal milk marketing order.

(2)

Eligible production

The term eligible production means milk produced by a producer in a participating State.

(3)

Federal milk marketing order

The term Federal milk marketing order means an order issued under section 8c of the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937.

(4)

Participating state

The term participating State means each State.

(5)

Producer

The term producer means an individual or entity that directly or indirectly (as determined by the Secretary)—

(A)

shares in the risk of producing milk; and

(B)

makes contributions (including land, labor, management, equipment, or capital) to the dairy farming operation of the individual or entity that are at least commensurate with the share of the individual or entity of the proceeds of the operation.

(b)

Payments

The Secretary shall offer to enter into contracts with producers on a dairy farm located in a participating State under which the producers receive payments on eligible production.

(c)

Amount

Payments to a producer under this section shall be calculated by multiplying (as determined by the Secretary)—

(1)

the payment quantity for the producer during the applicable month established under subsection (e);

(2)

the amount equal to—

(A)

$16.94 per hundredweight, as adjusted under subsection (d); less

(B)

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

(3)
(A)

for the period beginning October 1, 2007, and ending September 30, 2008, 34 percent;

(B)

for the period beginning October 1, 2008, and ending August 31, 2012, 45 percent; and

(C)

for the period beginning September 1, 2012, and thereafter, 34 percent.

(d)

Payment rate adjustment for feed prices

(1)

Initial adjustment authority

During the period beginning on January 1, 2008, and ending on August 31, 2012, if the National Average Dairy Feed Ration Cost for a month during that period is greater than $7.35 per hundredweight, the amount specified in subsection (c)(2)(A) used to determine the payment rate for that month shall be increased by 45 percent of the percentage by which the National Average Dairy Feed Ration Cost exceeds $7.35 per hundredweight.

(2)

Subsequent adjustment authority

For any month beginning on or after September 1, 2012, if the National Average Dairy Feed Ration Cost for the month is greater than $9.50 per hundredweight, the amount specified in subsection (c)(2)(A) used to determine the payment rate for that month shall be increased by 45 percent of the percentage by which the National Average Dairy Feed Ration Cost exceeds $9.50 per hundredweight.

(3)

National Average Dairy Feed Ration Cost

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

(e)

Payment Quantity

(1)

In general

Subject to paragraph (2), the payment quantity for a producer during the applicable month under this section shall be equal to the quantity of eligible production marketed by the producer during the month.

(2)

Limitation

(A)

In general

The payment quantity for all producers on a single dairy operation for which the producers receive payments under subsection (b) shall not exceed—

(i)

for the period beginning October 1, 2007, and ending September 30, 2008, 2,400,000 pounds;

(ii)

for the period beginning October 1, 2008, and ending August 31, 2012, 2,985,000 pounds for each fiscal year; and

(iii)

effective beginning September 1, 2012, 2,400,000 pounds per fiscal year.

(B)

Standards

For purposes of determining whether producers are producers on separate dairy operations or a single dairy operation, the Secretary shall apply the same standards as were applied in implementing the dairy program under section 805 of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2001 (as enacted into law by Public Law 106–387; 114 Stat. 1549A–50).

(3)

Reconstitution

The Secretary shall ensure that a producer does not reconstitute a dairy operation for the sole purpose of receiving additional payments under this section.

(f)

Payments

A payment under a contract under this section shall be made on a monthly basis not later than 60 days after the last day of the month for which the payment is made.

(g)

Signup

The Secretary shall offer to enter into contracts under this section during the period beginning on the date that is 90 days after the date of enactment of this Act and ending on September 30, 2012.

(h)

Duration of Contract

(1)

In general

Except as provided in paragraph (2), any contract entered into by producers on a dairy farm under this section shall cover eligible production marketed by the producers on the dairy farm during the period starting with the first day of month the producers on the dairy farm enter into the contract and ending on September 30, 2012.

(2)

Violations

If a producer violates the contract, the Secretary may—

(A)

terminate the contract and allow the producer to retain any payments received under the contract; or

(B)

allow the contract to remain in effect and require the producer to repay a portion of the payments received under the contract based on the severity of the violation.

1507.

Dairy promotion and research program

(a)

Extension of dairy promotion and research authority

Section 113(e)(2) of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4504(e)(2)) is amended by striking 2007 and inserting 2012.

(b)

Definition of united states for promotion program

Section 111 of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4502) is amended—

(1)

by striking subsection (l) and inserting the following:

(l)

the term United States, when used in a geographical sense, means all of the States, the District of Columbia, and the Commonwealth of Puerto Rico;

; and

(2)

in subsection (m), by striking (as defined in subsection (l)).

(c)

Definition of united states for research program

Section 130 of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4531)) is amended by striking paragraph (12) and inserting the following:

(12)

the term United States, when used in a geographical sense, means all of the States, the District of Columbia, and the Commonwealth of Puerto Rico.

.

(d)

Assessment rate for imported dairy products

Section 113(g) of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4504(g)) is amended by striking paragraph (3) and inserting the following:

(3)

Rate

(A)

In general

The rate of assessment for milk produced in the United States prescribed by the order shall be 15 cents per hundredweight of milk for commercial use or the equivalent thereof, as determined by the Secretary.

(B)

Imported dairy products

The rate of assessment for imported dairy products prescribed by the order shall be 7.5 cents per hundredweight of milk for commercial use or the equivalent thereof, as determined by the Secretary.

.

(e)

Time and method of importer payments

Section 113(g)(6) of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4504(g)(6)) is amended—

(1)

by striking subparagraph (B); and

(2)

by redesignating subparagraph (C) as subparagraph (B).

(f)

Refund of assessments on certain imported dairy products

Section 113(g) of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4504(g)) is amended by adding at the end the following:

(7)

Refund of assessments on certain imported products

(A)

In general

An importer shall be entitled to a refund of any assessment paid under this subsection on imported dairy products imported under a contract entered into prior to the date of enactment of the Food, Conservation, and Energy Act of 2008.

(B)

Expiration

Refunds under subparagraph (A) shall expire 1 year after the date of enactment of the Food, Conservation, and Energy Act of 2008.

.

1508.

Report on Department of Agriculture reporting procedures for nonfat dry milk

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

1509.

Federal Milk Marketing Order Review Commission

(a)

Establishment

Subject to the availability of appropriations to carry out this section, the Secretary shall establish a commission to be known as the Federal Milk Marketing Order Review Commission (referred to in this section as the commission), which shall conduct a comprehensive review and evaluation of—

(1)

the Federal milk marketing order system in effect on the date of establishment of the commission; and

(2)

non-Federal milk marketing order systems.

(b)

Elements of review and evaluation

As part of the review and evaluation under subsection (a), the commission shall consider legislative and regulatory options for—

(1)

ensuring that the competitiveness of dairy products with other competing products in the marketplace is preserved and enhanced;

(2)

enhancing the competitiveness of American dairy producers in world markets;

(3)

ensuring the competitiveness and transparency in dairy pricing;

(4)

streamlining and expediting the process by which amendments to Federal milk market orders are adopted;

(5)

simplifying the Federal milk marketing order system;

(6)

evaluating whether the Federal milk marketing order system serves the interests of dairy producers, consumers, and dairy processors; and

(7)

evaluating the nutritional composition of milk, including the potential benefits and costs of adjusting the milk content standards.

(c)

Membership

(1)

Composition

The commission shall consist of 14 members.

(2)

Members

As soon as practicable after the date on which funds are first made available to carry out this section, the Secretary shall appoint members to the commission according to the following requirements:

(A)

At least 1 member shall represent a national consumer organization.

(B)

At least 4 members shall represent land-grant universities or NLGCA Institutions (as defined in section 1404 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103)) with accredited dairy economic programs, with at least 2 of those members being experts in the field of economics.

(C)

At least 1 member shall represent the food and beverage retail sector.

(D)

4 dairy producers and 4 dairy processors, appointed so as to balance geographical distribution of milk production and dairy processing, reflect all segments of dairy processing, and represent all regions of the United States equitably, including States that operate outside of a Federal milk marketing order.

(3)

Chair

The commission shall elect 1 of the appointed members of the commission to serve as chairperson for the duration of the proceedings of the commission.

(4)

Vacancy

Any vacancy occurring before the termination of the commission shall be filled in the same manner as the original appointment.

(5)

Compensation

Members of the commission shall serve without compensation, but shall be reimbursed by the Secretary from existing budget authority for necessary and reasonable expenses incurred in the performance of the duties of the commission.

(d)

Report

(1)

In general

Not later than 2 years after the date of the first meeting of the commission, the commission shall submit to Congress and the Secretary a report describing the results of the review and evaluation conducted under this section, including such recommendations regarding the legislative and regulatory options considered under subsection (b) as the commission considers to be appropriate.

(2)

Opinions

The report findings shall reflect, to the maximum extent practicable, a consensus opinion of the commission members, but the report may include majority and minority findings regarding those matters for which consensus was not reached.

(e)

Advisory nature

The commission is wholly advisory in nature, and the recommendations of the commission are nonbinding.

(f)

No effect on existing programs

The Secretary shall not allow the existence of the commission to impede, delay, or otherwise affect any decisionmaking process of the Department of Agriculture, including any rulemaking procedures planned, proposed, or near completion.

(g)

Administrative assistance

The Secretary shall provide administrative support to the commission, and expend to carry out this section such funds as necessary from budget authority available to the Secretary.

(h)

Authorization of appropriations

There are authorized to be appropriated such sums as are necessary to carry out this section.

(i)

Termination

The commission shall terminate effective on the date of the submission of the report under subsection (d).

1510.

Mandatory reporting of dairy commodities

(a)

Electronic reporting

Section 273 of the Agricultural Marketing Act of 1946 (7 U.S.C. 1637b) is amended—

(1)

by redesignating subsection (d) as subsection (e); and

(2)

by inserting after subsection (c) the following:

(d)

Electronic reporting

(1)

In general

Subject to the availability of funds under paragraph (3), the Secretary shall establish an electronic reporting system to carry out this section.

(2)

Frequency of reports

After the establishment of the electronic reporting system in accordance with paragraph (1), the Secretary shall increase the frequency of the reports required under this section.

(3)

Authorization of appropriations

There are authorized to be appropriated such sums as are necessary to carry out this subsection.

.

(b)

Quarterly audits

Section 273(c) of the Agricultural Marketing Act of 1946 (7 U.S.C. 1637b(c)) is amended by striking paragraph (3) and inserting the following:

(3)

Verification

(A)

In general

The Secretary shall take such actions as the Secretary considers necessary to verify the accuracy of the information submitted or reported under this subtitle.

(B)

Quarterly audits

The Secretary shall quarterly conduct an audit of information submitted or reported under this subtitle and compare such information with other related dairy market statistics.

.

F

Administration

1601.

Administration generally

(a)

Use of Commodity Credit Corporation

Except as otherwise provided in this title, the Secretary shall use the funds, facilities, and authorities of the Commodity Credit Corporation to carry out this title.

(b)

Determinations by Secretary

A determination made by the Secretary under this title shall be final and conclusive.

(c)

Regulations

(1)

In general

Except as otherwise provided in this subsection, not later than 90 days after the date of enactment of this Act, the Secretary and the Commodity Credit Corporation, as appropriate, shall promulgate such regulations as are necessary to implement this title and the amendments made by this title.

(2)

Procedure

The promulgation of the regulations and administration of this title and the amendments made by this title shall be made without regard to—

(A)

chapter 35 of title 44, United States Code (commonly known as the Paperwork Reduction Act);

(B)

the Statement of Policy of the Secretary of Agriculture effective July 24, 1971 (36 Fed. Reg. 13804), relating to notices of proposed rulemaking and public participation in rulemaking; and

(C)

the notice and comment provisions of section 553 of title 5, United States Code.

(3)

Congressional review of agency rulemaking

In carrying out this subsection, the Secretary shall use the authority provided under section 808 of title 5, United States Code.

(4)

Interim regulations

Notwithstanding paragraphs (1) and (2), the Secretary shall implement the amendments made by sections 1603 and 1604 for the 2009 crop, fiscal, or program year, as appropriate, through the promulgation of an interim rule.

(d)

Adjustment Authority Related to Trade Agreements Compliance

(1)

Required determination; adjustment

If the Secretary determines that expenditures under this title that are subject to the total allowable domestic support levels under the Uruguay Round Agreements (as defined in section 2 of the Uruguay Round Agreements Act (19 U.S.C. 3501)) will exceed such allowable levels for any applicable reporting period, the Secretary shall, to the maximum extent practicable, make adjustments in the amount of such expenditures during that period to ensure that such expenditures do not exceed such allowable levels.

(2)

Congressional notification

Before making any adjustment under paragraph (1), the Secretary shall submit to the Committee on Agriculture of the House of Representatives or the Committee on Agriculture, Nutrition, and Forestry of the Senate a report describing the determination made under that paragraph and the extent of the adjustment to be made.

(e)

Treatment of Advance Payment Option

Section 1601(d) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7991(d)) is amended—

(1)

in paragraph (1), by striking and at the end;

(2)

in paragraph (2), by striking the period at the end and inserting ; and; and

(3)

by adding at the end the following:

(3)

the advance payment of direct payments and counter-cyclical payments under title I of the Food, Conservation, and Energy Act of 2008.

.

1602.

Suspension of permanent price support authority

(a)

Agricultural Adjustment Act of 1938

The following provisions of the Agricultural Adjustment Act of 1938 shall not be applicable to the 2008 through 2012 crops of covered commodities, peanuts, and sugar and shall not be applicable to milk during the period beginning on the date of enactment of this Act through December 31, 2012:

(1)

Parts II through V of subtitle B of title III (7 U.S.C. 1326 et seq.).

(2)

In the case of upland cotton, section 377 (7 U.S.C. 1377).

(3)

Subtitle D of title III (7 U.S.C. 1379a et seq.).

(4)

Title IV (7 U.S.C. 1401 et seq.).

(b)

Agricultural Act of 1949

The following provisions of the Agricultural Act of 1949 shall not be applicable to the 2008 through 2012 crops of covered commodities, peanuts, and sugar and shall not be applicable to milk during the period beginning on the date of enactment of this Act and through December 31, 2012:

(1)

Section 101 (7 U.S.C. 1441).

(2)

Section 103(a) (7 U.S.C. 1444(a)).

(3)

Section 105 (7 U.S.C. 1444b).

(4)

Section 107 (7 U.S.C. 1445a).

(5)

Section 110 (7 U.S.C. 1445e).

(6)

Section 112 (7 U.S.C. 1445g).

(7)

Section 115 (7 U.S.C. 1445k).

(8)

Section 201 (7 U.S.C. 1446).

(9)

Title III (7 U.S.C. 1447 et seq.).

(10)

Title IV (7 U.S.C. 1421 et seq.), other than sections 404, 412, and 416 (7 U.S.C. 1424, 1429, and 1431).

(11)

Title V (7 U.S.C. 1461 et seq.).

(12)

Title VI (7 U.S.C. 1471 et seq.).

(c)

Suspension of certain quota provisions

The joint resolution entitled A joint resolution relating to corn and wheat marketing quotas under the Agricultural Adjustment Act of 1938, as amended, approved May 26, 1941 (7 U.S.C. 1330 and 1340), shall not be applicable to the crops of wheat planted for harvest in the calendar years 2008 through 2012.

1603.

Payment limitations

(a)

Extension of Limitations

Sections 1001 and 1001C(a) of the Food Security Act of 1985 (7 U.S.C. 1308, 1308–3(a)) are amended by striking Farm Security and Rural Investment Act of 2002 each place it appears and inserting Food, Conservation, and Energy Act of 2008.

(b)

Revision of Limitations

(1)

Definitions

Section 1001(a) of the Food Security Act of 1985 (7 U.S.C. 1308(a)) is amended—

(A)

in the matter preceding paragraph (1), by inserting through section 1001Fafter section;

(B)

by striking paragraph (2) and redesignating paragraph (3) as paragraph (5); and

(C)

by inserting after paragraph (1) the following:

(2)

Family member

The term family member means a person to whom a member in the farming operation is related as lineal ancestor, lineal descendant, sibling, spouse, or otherwise by marriage.

(3)

Legal entity

The term legal entity means an entity that is created under Federal or State law and that—

(A)

owns land or an agricultural commodity; or

(B)

produces an agricultural commodity.

(4)

Person

The term person means a natural person, and does not include a legal entity.

.

(2)

Limitation on direct payments and counter-cyclical payments

Section 1001 of the Food Security Act of 1985 (7 U.S.C. 1308) is amended by striking subsections (b), (c), and (d) and inserting the following:

(b)

Limitation on direct payments, counter-cyclical payments, and ACRE payments for covered commodities (other than peanuts)

(1)

Direct payments

The total amount of direct payments received, directly or indirectly, by a person or legal entity (except a joint venture or a general partnership) for any crop year under subtitle A of title I of the Food, Conservation, and Energy Act of 2008 for 1 or more covered commodities (except for peanuts) may not exceed—

(A)

in the case of a person or legal entity that does not participate in the average crop revenue election program under section 1105 of that Act, $40,000; or

(B)

in the case of a person or legal entity that participates in the average crop revenue election program under section 1105 of that Act, an amount equal to—

(i)

the payment limit specified in subparagraph (A); less

(ii)

the amount of the reduction in direct payments under section 1105(a)(1) of that Act.

(2)

Counter-cyclical payments

In the case of a person or legal entity (except a joint venture or a general partnership) that does not participate in the average crop revenue election program under section 1105 of the Food, Conservation, and Energy Act of 2008, the total amount of counter-cyclical payments received, directly or indirectly, by the person or legal entity for any crop year under subtitle A of title I of that Act for 1 or more covered commodities (except for peanuts) may not exceed $65,000.

(3)

ACRE and counter-cyclical payments

In the case of a person or legal entity (except a joint venture or a general partnership) that participates in the average crop revenue election program under section 1105 of the Food, Conservation, and Energy Act of 2008, the total amount of average crop revenue election payments and counter-cyclical payments received, directly or indirectly, by the person or legal entity for any crop year for 1 or more covered commodities (except for peanuts) may not exceed the sum of—

(A)

$65,000; and

(B)

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

(c)

Limitation on direct payments, counter-cyclical payments, and ACRE payments for peanuts

(1)

Direct payments

The total amount of direct payments received, directly or indirectly, by a person or legal entity (except a joint venture or a general partnership) for any crop year under subtitle C of title I of the Food, Conservation, and Energy Act of 2008 for peanuts may not exceed—

(A)

in the case of a person or legal entity that does not participate in the average crop revenue election program under section 1105 of that Act, $40,000; or

(B)

in the case of a person or legal entity that participates in the average crop revenue election program under section 1105 of that Act, an amount equal to—

(i)

the payment limit specified in subparagraph (A); less

(ii)

the amount of the reduction in direct payments under section 1105(a)(1) of that Act.

(2)

Counter-cyclical payments

In the case of a person or legal entity (except a joint venture or a general partnership) that does not participate in the average crop revenue election program under section 1105 of the Food, Conservation, and Energy Act of 2008, the total amount of counter-cyclical payments received, directly or indirectly, by the person or legal entity for any crop year under subtitle C of title I of that Act for peanuts may not exceed $65,000.

(3)

ACRE and counter-cyclical payments

In the case of a person or legal entity (except a joint venture or a general partnership) that participates in the average crop revenue election program under section 1105 of the Food, Conservation, and Energy Act of 2008, the total amount of average crop revenue election payments received, directly or indirectly, by the person or legal entity for any crop year for peanuts may not exceed the sum of—

(A)

$65,000; and

(B)

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

(d)

Limitation on applicability

Nothing in this section authorizes any limitation on any benefit associated with the marketing assistance loan program or the loan deficiency payment program under title I of the Food, Conservation, and Energy Act of 2008.

.

(3)

Direct attribution

Section 1001 of the Food Security Act of 1985 (7 U.S.C. 1308) is amended—

(A)

by striking subsections (e) and (f) and redesignating subsection (g) as subsection (h); and

(B)

by inserting after subsection (d) the following:

(e)

Attribution of Payments

(1)

In general

In implementing subsections (b) and (c) and a program described in paragraphs (1)(C) and (2)(B) of section 1001D(b), the Secretary shall issue such regulations as are necessary to ensure that the total amount of payments are attributed to a person by taking into account the direct and indirect ownership interests of the person in a legal entity that is eligible to receive the payments.

(2)

Payments to a person

Each payment made directly to a person shall be combined with the pro rata interest of the person in payments received by a legal entity in which the person has a direct or indirect ownership interest unless the payments of the legal entity have been reduced by the pro rata share of the person.

(3)

Payments to a legal entity

(A)

In general

Each payment made to a legal entity shall be attributed to those persons who have a direct or indirect ownership interest in the legal entity unless the payment to the legal entity has been reduced by the pro rata share of the person.

(B)

Attribution of payments

(i)

Payment limits

Except as provided in clause (ii), payments made to a legal entity shall not exceed the amounts specified in subsections (b) and (c).

(ii)

Exception for joint ventures and general partnerships

Payments made to a joint venture or a general partnership shall not exceed, for each payment specified in subsections (b) and (c), the amount determined by multiplying the maximum payment amount specified in subsections (b) and (c) by the number of persons and legal entities (other than joint ventures and general partnerships) that comprise the ownership of the joint venture or general partnership.

(iii)

Reduction

Payments made to a legal entity shall be reduced proportionately by an amount that represents the direct or indirect ownership in the legal entity by any person or legal entity that has otherwise exceeded the applicable maximum payment limitation.

(4)

4 levels of attribution for embedded legal entities

(A)

In general

Attribution of payments made to legal entities shall be traced through 4 levels of ownership in legal entities.

(B)

First level

Any payments made to a legal entity (a first-tier legal entity) that is owned in whole or in part by a person shall be attributed to the person in an amount that represents the direct ownership in the first-tier legal entity by the person.

(C)

Second level

(i)

In general

Any payments made to a first-tier legal entity that is owned (in whole or in part) by another legal entity (a second-tier legal entity) shall be attributed to the second-tier legal entity in proportion to the ownership of the second-tier legal entity in the first-tier legal entity.

(ii)

Ownership by a person

If the second-tier legal entity is owned (in whole or in part) by a person, the amount of the payment made to the first-tier legal entity shall be attributed to the person in the amount that represents the indirect ownership in the first-tier legal entity by the person.

(D)

Third and fourth levels

(i)

In general

Except as provided in clause (ii), the Secretary shall attribute payments at the third and fourth tiers of ownership in the same manner as specified in subparagraph (C).

(ii)

Fourth-tier ownership

If the fourth-tier of ownership is that of a fourth-tier legal entity and not that of a person, the Secretary shall reduce the amount of the payment to be made to the first-tier legal entity in the amount that represents the indirect ownership in the first-tier legal entity by the fourth-tier legal entity.

(f)

Special Rules

(1)

Minor children

(A)

In general

Except as provided in subparagraph (B), payments received by a child under the age of 18 shall be attributed to the parents of the child.

(B)

Regulations

The Secretary shall issue regulations specifying the conditions under which payments received by a child under the age of 18 will not be attributed to the parents of the child.

(2)

Marketing cooperatives

Subsections (b) and (c) shall not apply to a cooperative association of producers with respect to commodities produced by the members of the association that are marketed by the association on behalf of the members of the association but shall apply to the producers as persons.

(3)

Trusts and estates

(A)

In general

With respect to irrevocable trusts and estates, the Secretary shall administer this section through section 1001F in such manner as the Secretary determines will ensure the fair and equitable treatment of the beneficiaries of the trusts and estates.

(B)

Irrevocable trust

(i)

In general

In order for a trust to be considered an irrevocable trust, the terms of the trust agreement shall not—

(I)

allow for modification or termination of the trust by the grantor;

(II)

allow for the grantor to have any future, contingent, or remainder interest in the corpus of the trust; or

(III)

except as provided in clause (ii), provide for the transfer of the corpus of the trust to the remainder beneficiary in less than 20 years beginning on the date the trust is established.

(ii)

Exception

Clause (i)(III) shall not apply in a case in which the transfer is—

(I)

contingent on the remainder beneficiary achieving at least the age of majority; or

(II)

contingent on the death of the grantor or income beneficiary.

(C)

Revocable trust

For the purposes of this section through section 1001F, a revocable trust shall be considered to be the same person as the grantor of the trust.

(4)

Cash rent tenants

(A)

Definition

In this paragraph, the term cash rent tenant means a person or legal entity that rents land—

(i)

for cash; or

(ii)

for a crop share guaranteed as to the amount of the commodity to be paid in rent.

(B)

Restriction

A cash rent tenant who makes a significant contribution of active personal management, but not of personal labor, with respect to a farming operation shall be eligible to receive a payment described in subsection (b) or (c) only if the tenant makes a significant contribution of equipment to the farming operation.

(5)

Federal agencies

(A)

In general

Notwithstanding subsection (d), a Federal agency shall not be eligible to receive any payment, benefit, or loan under title I of the Food, Conservation, and Energy Act of 2008 or title XII of this Act.

(B)

Land rental

A lessee of land owned by a Federal agency may receive a payment described in subsection (b), (c), or (d) if the lessee otherwise meets all applicable criteria.

(6)

State and local governments

(A)

In general

Notwithstanding subsection (d), except as provided in subsection (g), a State or local government, or political subdivision or agency of the government, shall not be eligible to receive any payment, benefit, or loan under title I of the Food, Conservation, and Energy Act of 2008 or title XII of this Act.

(B)

Tenants

A lessee of land owned by a State or local government, or political subdivision or agency of the government, may receive payments described in subsections (b), (c), and (d) if the lessee otherwise meets all applicable criteria.

(7)

Changes in farming operations

(A)

In general

In the administration of this section through section 1001F, the Secretary may not approve any change in a farming operation that otherwise will increase the number of persons to which the limitations under this section are applied unless the Secretary determines that the change is bona fide and substantive.

(B)

Family members

The addition of a family member to a farming operation under the criteria set out in section 1001A shall be considered a bona fide and substantive change in the farming operation.

(8)

Death of owner

(A)

In general

If any ownership interest in land or a commodity is transferred as the result of the death of a program participant, the new owner of the land or commodity may, if the person is otherwise eligible to participate in the applicable program, succeed to the contract of the prior owner and receive payments subject to this section without regard to the amount of payments received by the new owner.

(B)

Limitations on prior owner

Payments made under this paragraph shall not exceed the amount to which the previous owner was entitled to receive under the terms of the contract at the time of the death of the prior owner.

(g)

Public schools

(1)

In general

Notwithstanding subsection (f)(6)(A), a State or local government, or political subdivision or agency of the government, shall be eligible, subject to the limitation in paragraph (2), to receive a payment described in subsection (b) or (c) for land owned by the State or local government, or political subdivision or agency of the government, that is used to maintain a public school.

(2)

Limitation

(A)

In general

For each State, the total amount of payments described in subsections (b) and (c) that are received collectively by the State and local government and all political subdivisions or agencies of those governments shall not exceed $500,000.

(B)

Exception

The limitation in subparagraph (A) shall not apply to States with a population of less than 1,500,000.

.

(c)

Repeal of 3-Entity Rule

Section 1001A of the Food Security Act of 1985 (7 U.S.C. 1308–1) is amended—

(1)

in the section heading, by striking prevention of creation of entities to qualify as separate persons and inserting notification of interests; and

(2)

by striking subsection (a) and inserting the following:

(a)

Notification of Interests

To facilitate administration of section 1001 and this section, each person or legal entity receiving payments described in subsections (b) and (c) of section 1001 as a separate person or legal entity shall separately provide to the Secretary, at such times and in such manner as prescribed by the Secretary—

(1)

the name and social security number of each person, or the name and taxpayer identification number of each legal entity, that holds or acquires an ownership interest in the separate person or legal entity; and

(2)

the name and taxpayer identification number of each legal entity in which the person or legal entity holds an ownership interest.

.

(d)

Amendment for Consistency

Section 1001A of the Food Security Act of 1985 (7 U.S.C. 1308–1) is amended by striking subsection (b) and inserting the following:

(b)

Actively Engaged

(1)

In general

To be eligible to receive a payment described in subsection (b) or (c) of section 1001, a person or legal entity shall be actively engaged in farming with respect to a farming operation as provided in this subsection or subsection (c).

(2)

Classes actively engaged

Except as provided in subsections (c) and (d)—

(A)

a person (including a person participating in a farming operation as a partner in a general partnership, a participant in a joint venture, a grantor of a revocable trust, or a participant in a similar entity, as determined by the Secretary) shall be considered to be actively engaged in farming with respect to a farming operation if—

(i)

the person makes a significant contribution (based on the total value of the farming operation) to the farming operation of—

(I)

capital, equipment, or land; and

(II)

personal labor or active personal management;

(ii)

the person's share of the profits or losses from the farming operation is commensurate with the contributions of the person to the farming operation; and

(iii)

the contributions of the person are at risk;

(B)

a legal entity that is a corporation, joint stock company, association, limited partnership, charitable organization, or other similar entity determined by the Secretary (including any such legal entity participating in the farming operation as a partner in a general partnership, a participant in a joint venture, a grantor of a revocable trust, or as a participant in a similar legal entity as determined by the Secretary) shall be considered as actively engaged in farming with respect to a farming operation if—

(i)

the legal entity separately makes a significant contribution (based on the total value of the farming operation) of capital, equipment, or land;

(ii)

the stockholders or members collectively make a significant contribution of personal labor or active personal management to the operation; and

(iii)

the standards provided in clauses (ii) and (iii) of subparagraph (A), as applied to the legal entity, are met by the legal entity;

(C)

if a legal entity that is a general partnership, joint venture, or similar entity, as determined by the Secretary, separately makes a significant contribution (based on the total value of the farming operation involved) of capital, equipment, or land, and the standards provided in clauses (ii) and (iii) of subparagraph (A), as applied to the legal entity, are met by the legal entity, the partners or members making a significant contribution of personal labor or active personal management shall be considered to be actively engaged in farming with respect to the farming operation involved; and

(D)

in making determinations under this subsection regarding equipment and personal labor, the Secretary shall take into consideration the equipment and personal labor normally and customarily provided by farm operators in the area involved to produce program crops.

(c)

Special Classes Actively Engaged

(1)

Landowner

A person or legal entity that is a landowner contributing the owned land to a farming operation shall be considered to be actively engaged in farming with respect to the farming operation if—

(A)

the landowner receives rent or income for the use of the land based on the production on the land or the operating results of the operation; and

(B)

the person or legal entity meets the standards provided in clauses (ii) and (iii) of subsection (b)(2)(A).

(2)

Adult family member

If a majority of the participants in a farming operation are family members, an adult family member shall be considered to be actively engaged in farming with respect to the farming operation if the person—

(A)

makes a significant contribution, based on the total value of the farming operation, of active personal management or personal labor; and

(B)

with respect to such contribution, meets the standards provided in clauses (ii) and (iii) of subsection (b)(2)(A).

(3)

Sharecropper

A sharecropper who makes a significant contribution of personal labor to a farming operation shall be considered to be actively engaged in farming with respect to the farming operation if the contribution meets the standards provided in clauses (ii) and (iii) of subsection (b)(2)(A).

(4)

Growers of hybrid seed

In determining whether a person or legal entity growing hybrid seed under contract shall be considered to be actively engaged in farming, the Secretary shall not take into consideration the existence of a hybrid seed contract.

(5)

Custom farming services

(A)

In general

A person or legal entity receiving custom farming services shall be considered separately eligible for payment limitation purposes if the person or legal entity is actively engaged in farming based on subsection (b)(2) or paragraphs (1) through (4) of this subsection.

(B)

Prohibition

No other rules with respect to custom farming shall apply.

(6)

Spouse

If 1 spouse (or estate of a deceased spouse) is determined to be actively engaged, the other spouse shall be determined to have met the requirements of subsection (b)(2)(A)(i)(II).

(d)

Classes Not Actively Engaged

(1)

Cash rent landlord

A landlord contributing land to a farming operation shall not be considered to be actively engaged in farming with respect to the farming operation if the landlord receives cash rent, or a crop share guaranteed as to the amount of the commodity to be paid in rent, for the use of the land.

(2)

Other persons and legal entities

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

.

(e)

Denial of Program Benefits

Section 1001B of the Food Security Act of 1985 (7 U.S.C. 1308–2) is amended to read as follows:

1001B.

Denial of Program benefits

(a)

2-Year Denial of Program Benefits

A person or legal entity shall be ineligible to receive payments specified in subsections (b) and (c) of section 1001 for the crop year, and the succeeding crop year, in which the Secretary determines that the person or legal entity—

(1)

failed to comply with section 1001A(b) and adopted or participated in adopting a scheme or device to evade the application of section 1001, 1001A, or 1001C; or

(2)

intentionally concealed the interest of the person or legal entity in any farm or legal entity engaged in farming.

(b)

Extended Ineligibility

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

(c)

Pro Rata Denial

(1)

In general

Payments otherwise owed to a person or legal entity described in subsections (a) or (b) shall be denied in a pro rata manner based on the ownership interest of the person or legal entity in a farm.

(2)

Cash rent tenant

Payments otherwise payable to a person or legal entity shall be denied in a pro rata manner if the person or legal entity is a cash rent tenant on a farm owned or under the control of a person or legal entity with respect to which a determination has been made under subsection (a) or (b).

(d)

Joint and Several Liability

Any legal entity (including partnerships and joint ventures) and any member of any legal entity determined to have knowingly participated in a scheme or device to evade, or that has the purpose of evading, sections 1001, 1001A, or 1001C shall be jointly and severally liable for any amounts that are payable to the Secretary as the result of the scheme or device (including amounts necessary to recover those amounts).

(e)

Release

The Secretary may partially or fully release from liability any person or legal entity who cooperates with the Secretary in enforcing sections 1001, 1001A, and 1001C, and this section.

.

(f)

Conforming amendment to apply direct attribution to NAP

(1)

In general

Section 196(i) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333(i)) is amended—

(A)

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

(1)

Definitions

In this subsection, the terms legal entity and person have the meanings given those terms in section 1001(a) of the Food Security Act of 1985 (7 U.S.C. 1308(a)).

(2)

Payment limitation

The total amount of payments received, directly or indirectly, by a person or legal entity (excluding a joint venture or general partnership) for any crop year may not exceed $100,000.

;

(B)

by striking paragraph (4) and inserting the following:

(4)

Adjusted gross income limitation

A person or legal entity that has an average adjusted gross income in excess of the average adjusted gross income limitation applicable under section 1001D(b)(1)(A) of the Food Security Act of 1985 (7 U.S.C. 1308–3a(b)(1)(A)), or a successor provision, shall not be eligible to receive noninsured crop disaster assistance under this section.

; and

(C)

in paragraph (5)—

(i)

by striking necessary to ensure and inserting “necessary—

(A)

to ensure

; and

(ii)

by striking this subsection. and inserting the following: “this subsection; and

(B)

to ensure that payments under this section are attributed to a person or legal entity (excluding a joint venture or general partnership) in accordance with the terms and conditions of sections 1001 through 1001D of the Food Security Act of 1985 (7 U.S.C. 1308 et seq.), as determined by the Secretary.

.

(2)

Transition

Section 196(i) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333(i)), as in effect on September 30, 2007, shall apply with respect to the 2007 and 2008 crops of any eligible crop.

(g)

Conforming Amendments

(1)

Section 1009(e) of the Food Security Act of 1985 (7 U.S.C. 1308a(e)) is amended in the second sentence by striking of $50,000.

(2)

Section 609(b)(1) of the Emergency Livestock Feed Assistance Act of 1988 (7 U.S.C. 1471g(b)(1)) is amended by inserting (before the amendment made by section 1703(a) of the Food, Conservation, and Energy Act of 2008) after 1985.

(3)

Section 524(b)(3) of the Federal Crop Insurance Act (7 U.S.C. 1524(b)(3)) is amended by inserting (before the amendment made by section 1703(a) of the Food, Conservation, and Energy Act of 2008) after 1308(5))).

(4)

Section 10204(c)(1) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8204(c)(1)) is amended by inserting (before the amendment made by section 1703(a) of the Food, Conservation, and Energy Act of 2008) after 1308).

(5)

Section 1271(c)(3)(A) of the Food, Agriculture, Conservation, and Trade Act of 1990 (16 U.S.C. 2106a(c)(3)(A)) is amended by inserting (before the amendment made by section 1703(a) of the Food, Conservation, and Energy Act of 2008) after 1308).

(6)

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

(h)

Transition

Section 1001, 1001A, and 1001B of the Food Security Act of 1985 (7 U.S.C. 1308, 1308–1, 1308–2), as in effect on September 30, 2007, shall continue to apply with respect to the 2007 and 2008 crops of any covered commodity or peanuts.

1604.

Adjusted gross income limitation

(a)

In general

Section 1001D of the Food Security Act of 1985 (7 U.S.C. 1308–3a(e)) is amended to read as follows:

1001D.

Adjusted gross income limitation

(a)

Definitions

(1)

In general

In this section:

(A)

Average adjusted gross income

The term average adjusted gross income, with respect to a person or legal entity, means the average of the adjusted gross income or comparable measure of the person or legal entity over the 3 taxable years preceding the most immediately preceding complete taxable year, as determined by the Secretary.

(B)

Average adjusted gross farm income

The term average adjusted gross farm income, with respect to a person or legal entity, means the average of the portion of adjusted gross income of the person or legal entity that is attributable to activities related to farming, ranching, or forestry for the 3 taxable years described in subparagraph (A), as determined by the Secretary in accordance with subsection (c).

(C)

Average adjusted gross nonfarm income

The term average adjusted gross nonfarm income, with respect to a person or legal entity, means the difference between—

(i)

the average adjusted gross income of the person or legal entity; and

(ii)

the average adjusted gross farm income of the person or legal entity.

(2)

Special rules for certain persons and legal entities

In the case of a legal entity that is not required to file a Federal income tax return or a person or legal entity that did not have taxable income in 1 or more of the taxable years used to determine the average under subparagraph (A) or (B) of paragraph (1), the Secretary shall provide, by regulation, a method for determining the average adjusted gross income, the average adjusted gross farm income, and the average adjusted gross nonfarm income of the person or legal entity for purposes of this section.

(3)

Allocation of income

On the request of any person filing a joint tax return, the Secretary shall provide for the allocation of average adjusted gross income, average adjusted gross farm income, and average adjusted gross nonfarm income among the persons filing the return if—

(A)

the person provides a certified statement by a certified public accountant or attorney that specifies the method by which the average adjusted gross income, average adjusted gross farm income, and average adjusted gross nonfarm income would have been declared and reported had the persons filed 2 separate returns; and

(B)

the Secretary determines that the method described in the statement is consistent with the information supporting the filed joint tax return.

(b)

Limitations

(1)

Commodity programs

(A)

Nonfarm limitation

Notwithstanding any other provision of law, a person or legal entity shall not be eligible to receive any benefit described in subparagraph (C) during a crop, fiscal, or program year, as appropriate, if the average adjusted gross nonfarm income of the person or legal entity exceeds $500,000.

(B)

Farm limitation

Notwithstanding any other provision of law, a person or legal entity shall not be eligible to receive a direct payment under subtitle A or C of title I of the Food, Conservation, and Energy Act of 2008 during a crop year, if the average adjusted gross farm income of the person or legal entity exceeds $750,000.

(C)

Covered benefits

Subparagraph (A) applies with respect to the following:

(i)

A direct payment or counter-cyclical payment under subtitle A or C of title I of the Food, Conservation, and Energy Act of 2008 or an average crop revenue election payment under subtitle A of title I of that Act.

(ii)

A marketing loan gain or loan deficiency payment under subtitle B or C of title I of the Food, Conservation, and Energy Act of 2008.

(iii)

A payment or benefit under section 196 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333).

(iv)

A payment or benefit under section 1506 of the Food, Conservation, and Energy Act of 2008.

(v)

A payment or benefit under title IX of the Trade Act of 1974 or subtitle B of the Federal Crop Insurance Act.

(2)

Conservation programs

(A)

Limits

(i)

In general

Notwithstanding any other provision of law, except as provided in clause (ii), a person or legal entity shall not be eligible to receive any benefit described in subparagraph (B) during a crop, fiscal, or program year, as appropriate, if the average adjusted gross nonfarm income of the person or legal entity exceeds $1,000,000, unless not less than 66.66 percent of the average adjusted gross income of the person or legal entity is average adjusted gross farm income.

(ii)

Exception

The Secretary may waive the limitation established under clause (i) on a case-by-case basis if the Secretary determines that environmentally sensitive land of special significance would be protected.

(B)

Covered benefits

Subparagraph (A) applies with respect to the following:

(i)

A payment or benefit under title XII of this Act.

(ii)

A payment or benefit under title II of the Farm Security and Rural Investment Act of 2002 (Public Law 107–171; 116 Stat. 223) or title II of the Food, Conservation, and Energy Act of 2008.

(iii)

A payment or benefit under section 524(b) of the Federal Crop Insurance Act (7 U.S.C. 1524(b)).

(c)

Income determination

(1)

In general

In determining the average adjusted gross farm income of a person or legal entity, the Secretary shall include income or benefits derived from or related to—

(A)

the production of crops, including specialty crops (as defined in section 3 of the Specialty Crops Competitiveness Act of 2004 (7 U.S.C. 1621 note; Public Law 108–465)) and unfinished raw forestry products;

(B)

the production of livestock (including cattle, elk, reindeer, bison, horses, deer, sheep, goats, swine, poultry, fish, and other aquacultural products used for food, honeybees, and other animals designated by the Secretary) and products produced by, or derived from, livestock;

(C)

the production of farm-based renewable energy (as defined in section 9001 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8101));

(D)

the sale, including the sale of easements and development rights, of farm, ranch, or forestry land, water or hunting rights, or environmental benefits;

(E)

the rental or lease of land or equipment used for farming, ranching, or forestry operations, including water or hunting rights;

(F)

the processing (including packing), storing (including shedding), and transporting of farm, ranch, and forestry commodities, including renewable energy;

(G)

the feeding, rearing, or finishing of livestock;

(H)

the sale of land that has been used for agriculture;

(I)

payments or other benefits received under any program authorized under title I of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7901 et seq.) or title I of the Food, Conservation, and Energy Act of 2008;

(J)

payments or other benefits received under any program authorized under title XII of this Act, title II of the Farm Security and Rural Investment Act of 2002 (Public Law 107–171; 116 Stat. 223), or title II of the Food, Conservation, and Energy Act of 2008;

(K)

payments or other benefits received under section 196 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333);

(L)

payments or other benefits received under title IX of the Trade Act of 1974 or subtitle B of the Federal Crop Insurance Act;

(M)

risk management practices, including benefits received under a program authorized under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) (including a catastrophic risk protection plan offered under section 508(b) of that Act (7 U.S.C. 1508(b))); and

(N)

any other activity related to farming, ranching, or forestry, as determined by the Secretary.

(2)

Income derived from farming, ranching, or forestry

In determining the average adjusted gross farm income of a person or legal entity, in addition to the inclusions described in paragraph (1), the Secretary shall include any income reported on the Schedule F or other schedule used by the person or legal entity to report income from farming, ranching, or forestry operations to the Internal Revenue Service, to the extent such income is not already included under paragraph (1).

(3)

Special rule

If not less than 66.66 percent of the average adjusted gross income of a person or legal entity is derived from farming, ranching, or forestry operations described in paragraphs (1) and (2), in determining the average adjusted gross farm income of the person or legal entity, the Secretary shall also include—

(A)

the sale of equipment to conduct farm, ranch, or forestry operations; and

(B)

the provision of production inputs and services to farmers, ranchers, foresters, and farm operations.

(d)

Enforcement

(1)

In general

To comply with subsection (b), at least once every 3 years a person or legal entity shall provide to the Secretary—

(A)

a certification by a certified public accountant or another third party that is acceptable to the Secretary that the average adjusted gross income, average adjusted gross farm income, and average adjusted gross nonfarm income of the person or legal entity does not exceed the applicable limitation specified in that subsection; or

(B)

information and documentation regarding the average adjusted gross income, average adjusted gross farm income, and average adjusted gross nonfarm income of the person or legal entity through other procedures established by the Secretary.

(2)

Denial of program benefits

If the Secretary determines that a person or legal entity has failed to comply with this section, the Secretary shall deny the issuance of applicable payments and benefits specified in paragraphs (1)(C) and (2)(B) of subsection (b) to the person or legal entity, under similar terms and conditions as described in section 1001B.

(3)

Audit

The Secretary shall establish statistically valid procedures under which the Secretary shall conduct targeted audits of such persons or legal entities as the Secretary determines are most likely to exceed the limitations under subsection (b).

(e)

Commensurate reduction

In the case of a payment or benefit described in paragraphs (1)(C) and (2)(B) of subsection (b) made in a crop, program, or fiscal year, as appropriate, to an entity, general partnership, or joint venture, the amount of the payment or benefit shall be reduced by an amount that is commensurate with the direct and indirect ownership interest in the entity, general partnership, or joint venture of each person who has an average adjusted gross income, average adjusted gross farm income, or average adjusted gross nonfarm income in excess of the applicable limitation specified in subsection (b).

(f)

Effective period

This section shall apply only during the 2009 through 2012 crop, program, or fiscal years, as appropriate.

.

(b)

Transition

Section 1001D of the Food Security Act of 1985 (7 U.S.C. 1308–3a), as in effect on September 30, 2007, shall apply with respect to the 2007 and 2008 crop, fiscal, or program year, as appropriate, for each program described in paragraphs (1)(C) and (2)(B) of subsection (b) of that section (as amended by subsection (a)).

1605.

Availability of quality incentive payments for covered oilseed producers

(a)

Incentive Payments Required

Subject to subsection (b) and the availability of appropriations under subsection (h), the Secretary shall use funds made available under subsection (h) to provide quality incentive payments for the production of oilseeds with specialized traits that enhance human health, as determined by the Secretary.

(b)

Covered Oilseeds

The Secretary shall make payments under this section only for the production of an oilseed variety that has, as determined by the Secretary—

(1)

been demonstrated to improve the health profile of the oilseed for use in human consumption by—

(A)

reducing or eliminating the need to partially hydrogenate the oil derived from the oilseed for use in human consumption; or

(B)

adopting new technology traits; and

(2)

1 or more impediments to commercialization.

(c)

Request for Proposals

(1)

Issuance

If funds are made available to carry out this section for a crop year, the Secretary shall issue a request for proposals for payments under this section.

(2)

Multiyear proposals

A proponent may submit a multiyear proposal for payments under this section.

(3)

Content of proposals

A proposal for payments under this section shall include a description of—

(A)

how use of the oilseed enhances human health;

(B)

the impediments to commercial use of the oilseed;

(C)

each oilseed variety described in subsection (b) and the value of the oilseed variety as a matter of public policy;

(D)

a range for the base price and premiums per bushel or hundredweight to be paid to producers;

(E)

a per bushel or hundredweight amount of incentive payments requested for each year under this section that does not exceed 1/3 of the total premium offered for any year;

(F)

the period of time, not to exceed 4 years, during which incentive payments are to be provided to producers; and

(G)

the targeted total quantity of production and estimated acres needed to produce the targeted quantity for each year under this section.

(d)

Contracts for Production

(1)

In general

The Secretary shall approve successful proposals submitted under subsection (c) on a timely basis.

(2)

Timing of payments

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

(e)

Administration

(1)

In general

If funding provided for a crop year is not fully allocated under the initial request for proposals under subsection (c), the Secretary shall issue additional requests for proposals for subsequent crop years under this section.

(2)

Prorated payments

If funding provided for a crop year is less than the amount otherwise approved by the Secretary or for which approval is sought, the Secretary shall prorate the payments or approvals in a manner determined by the Secretary so that the total payments do not exceed the funding level.

(f)

Proprietary Information

The Secretary shall protect proprietary information provided to the Secretary for the purpose of administering this section.

(g)

Program Compliance and Penalties

(1)

Guarantee

The proponent, if approved, shall be required to guarantee that the oilseed on which a payment is made by the Secretary under this section is used for human consumption as described in the proposal, as approved by the Secretary.

(2)

Noncompliance

If oilseeds on which a payment is made by the Secretary under this section are not actually used for the purpose the payment is made, the proponent shall be required to pay to the Secretary an amount equal to, as determined by the Secretary—

(A)

in the case of an inadvertent failure, twice the amount of the payment made by the Secretary under this section to the producer of the oilseeds; and

(B)

in any other case, up to twice the full value of the oilseeds involved.

(3)

Documentation

The Secretary may require such assurances and documentation as may be needed to enforce the guarantee.

(4)

Additional penalties

(A)

In general

In addition to payments required under paragraph (2), the Secretary may impose penalties on additional persons that use oilseeds the use of which is restricted under this section for a purpose other than the intended use.

(B)

Amount

The amount of a penalty under this paragraph shall—

(i)

be in an amount determined appropriated by the Secretary; but

(ii)

not to exceed twice the full value of the oilseeds.

(h)

Authorization of Appropriations

There are authorized to be appropriated such sums as are necessary to carry out this section for each of fiscal years 2009 through 2012.

1606.

Personal liability of producers for deficiencies

Section 164 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7284) is amended by striking and title I of the Farm Security and Rural Investment Act of 2002 each place it appears and inserting title I of the Farm Security and Rural Investment Act of 2002, and title I of the Food, Conservation, and Energy Act of 2008.

1607.

Extension of existing administrative authority regarding loans

Section 166 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7286) is amended—

(1)

by striking and subtitle B and C of title I of the Farm Security and Rural Investment Act of 2002 each place it appears and inserting , title I of the Farm Security and Rural Investment Act of 2002, and title I of the Food, Conservation, and Energy Act of 2008; and

(2)

in subsection (c), by adding at the end the following:

(3)

Termination of authority

The authority to carry out paragraph (1) terminates effective ending with the 2009 crop year.

.

1608.

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 payments made under this title.

(b)

Notice

The producer making the assignment, or the assignee, shall provide the Secretary with notice, in such manner as the Secretary may require, of any assignment made under this section.

1609.

Tracking of benefits

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

1610.

Government publication of cotton price forecasts

Section 15 of the Agricultural Marketing Act (12 U.S.C. 1141j) is amended—

(1)

by striking subsection (d); and

(2)

by redesignating subsections (e) through (g) as subsections (d) through (f), respectively.

1611.

Prevention of deceased individuals receiving payments under farm commodity programs

(a)

Regulations

Not later than 180 days after the date of enactment of this Act, the Secretary shall promulgate regulations that—

(1)

describe the circumstances under which, in order to allow for the settlement of estates and for related purposes, payments may be issued in the name of a deceased individual; and

(2)

preclude the issuance of payments to, and on behalf of, deceased individuals that were not eligible for the payments.

(b)

Coordination

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

1612.

Hard white wheat development program

(a)

Definitions

In this section:

(1)

Eligible hard white wheat seed

The term eligible hard white wheat seed means hard white wheat seed that, as determined by the Secretary, is—

(A)

certified;

(B)

of a variety that is suitable for the State in which the seed will be planted;

(C)

rated at least superior with respect to quality; and

(D)

specifically approved under a seed establishment program established by the State Department of Agriculture and the State Wheat Commission of the 1 or more States in which the seed will be planted.

(2)

Program

The term program means the hard white wheat development program established under subsection (b)(1).

(3)

Secretary

The term Secretary means the Secretary of Agriculture, in consultation with the State Departments of Agriculture and the State Wheat Commissions of the States in regions in which hard white wheat is produced, as determined by the Secretary.

(b)

Establishment

(1)

In general

Subject to the availability of appropriations, the Secretary shall establish a hard white wheat development program in accordance with paragraph (2) to promote the establishment of hard white wheat as a viable market class of wheat in the United States by encouraging production of at least 240,000,000 bushels of hard white wheat by 2012.

(2)

Payments

(A)

In general

Subject to subparagraphs (B) and (C) and subsection (c), if funds are made available for any of the 2009 through 2012 crops of hard white wheat, the Secretary shall make available incentive payments to producers of those crops.

(B)

Acreage limitation

The Secretary shall carry out subparagraph (A) subject to a regional limitation determined by the Secretary on the number of acres for which payments may be received that takes into account planting history and potential planting, but does not exceed a total of 2,900,000 acres or the equivalent volume of production based on a yield of 50 bushels per acre.

(C)

Payment limitations

Payments to producers on a farm described in subparagraph (A) shall be—

(i)

in an amount that is not less than $0.20 per bushel; and

(ii)

in an amount that is not less than $2.00 per acre for planting eligible hard white wheat seed.

(c)

Authorization of appropriations

There are authorized to be appropriated to carry out this section $35,000,000 for the period of fiscal years 2009 through 2012.

1613.

Durum wheat quality program

(a)

In General

Subject to the availability of funds under subsection (c), the Secretary shall provide compensation to producers of durum wheat in an amount not to exceed 50 percent of the actual cost of fungicides applied to a crop of durum wheat of the producers to control Fusarium head blight (wheat scab) on acres certified to have been planted to Durum wheat in a crop year.

(b)

Insufficient Funds

If the total amount of funds appropriated for a fiscal year under subsection (c) are insufficient to fulfill all eligible requests for compensation under this section, the Secretary shall prorate the compensation payments in a manner determined by the Secretary to be equitable.

(c)

Authorization of Appropriations

There is authorized to be appropriated to carry out this section $10,000,000 for each of fiscal years 2009 through 2012.

1614.

Storage facility loans

(a)

In general

As soon as practicable after the date of enactment of this Act, the Secretary shall establish a storage facility loan program to provide funds for producers of grains, oilseeds, pulse crops, hay, renewable biomass, and other storable commodities (other than sugar), as determined by the Secretary, to construct or upgrade storage and handling facilities for the commodities.

(b)

Eligible producers

A storage facility loan under this section shall be made available to any producer described in subsection (a) that, as determined by the Secretary—

(1)

has a satisfactory credit history;

(2)

has a need for increased storage capacity; and

(3)

demonstrates an ability to repay the loan.

(c)

Term of loans

A storage facility loan under this section shall have a maximum term of 12 years.

(d)

Loan amount

The maximum principal amount of a storage facility loan under this section shall be $500,000.

(e)

Loan disbursements

The Secretary shall provide for 1 partial disbursement of loan principal and 1 final disbursement of loan principal, as determined to be appropriate and subject to acceptable documentation, to facilitate the purchase and construction of eligible facilities.

(f)

Loan security

Approval of a storage facility loan under this section shall—

(1)

require the borrower to provide loan security to the Secretary, in the form of—

(A)

a lien on the real estate parcel on which the storage facility is located; or

(B)

such other security as is acceptable to the Secretary;

(2)

under such rules and regulations as the Secretary may prescribe, not require a severance agreement from the holder of any prior lien on the real estate parcel on which the storage facility is located, if the borrower—

(A)

agrees to increase the down payment on the storage facility by an amount determined appropriate by the Secretary; or

(B)

provides other security acceptable to the Secretary; and

(3)

allow a borrower, upon the approval of the Secretary, to define a subparcel of real estate as security for the storage facility loan if the subparcel is—

(A)

of adequate size and value to adequately secure the loan; and

(B)

not subject to any other liens or mortgages that are superior to the lien interest of the Commodity Credit Corporation.

1615.

State, county, and area committees

Section 8(b)(5)(B)(ii) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)(5)(B)(ii)) is amended—

(1)

by redesignating subclauses (I) and (II) as items (aa) and (bb), respectively, and indenting appropriately;

(2)

in the matter preceding item (aa) (as redesignated by paragraph (1)), by striking A committee established and inserting the following:

(I)

In general

Except as provided in subclause (II), a committee established

; and

(3)

by adding at the end the following:

(II)

Combination or consolidation of areas

A committee established by combining or consolidating 2 or more county or area committees shall consist of not fewer than 3 nor more than 11 members that—

(aa)

are fairly representative of the agricultural producers within the area covered by the county, area, or local committee; and

(bb)

are elected by the agricultural producers that participate or cooperate in programs administered within the area under the jurisdiction of the county, area, or local committee.

(III)

Representation of socially disadvantaged farmers and ranchers

The Secretary shall develop procedures to maintain representation of socially disadvantaged farmers and ranchers on combined or consolidated committees.

(IV)

Eligibility for membership

Notwithstanding any other producer eligibility requirements for service on county or area committees, if a county or area is consolidated or combined, a producer shall be eligible to serve only as a member of the county or area committee that the producer elects to administer the farm records of the producer.

.

1616.

Prohibition on charging certain fees

Public Law 108–470 (7 U.S.C. 7416a) is amended—

(1)

in subsection (a), by striking may and inserting shall; and

(2)

by adding at the end the following:

(c)

Prohibition on Charging Certain Fees

The Secretary may not charge any fees or related costs for the collection of commodity assessments pursuant to this Act.

.

1617.

Signature authority

(a)

In general

In carrying out this title and title II and amendments made by those titles, if the Secretary approves a document, the Secretary shall not subsequently determine the document is inadequate or invalid because of the lack of authority of any person signing the document on behalf of the applicant or any other individual, entity, general partnership, or joint venture, or the documents relied upon were determined inadequate or invalid, unless the person signing the program document knowingly and willfully falsified the evidence of signature authority or a signature.

(b)

Affirmation

(1)

In general

Nothing in this section prohibits the Secretary from asking a proper party to affirm any document that otherwise would be considered approved under subsection (a).

(2)

No retroactive effect

A denial of benefits based on a lack of affirmation under paragraph (1) shall not be retroactive with respect to third-party producers who were not the subject of the erroneous representation of authority, if the third-party producers—

(A)

relied on the prior approval by the Secretary of the documents in good faith; and

(B)

substantively complied with all program requirements

1618.

Modernization of Farm Service Agency

Not later than 180 days after the date of enactment of this Act, the Secretary shall transmit to the Committee on Agriculture and the Committee on Appropriations of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry and the Committee on Appropriations of the Senate a report prepared by a third party that describes—

(1)

the data processing and information technology challenges experienced in local offices of the Farm Service Agency;

(2)

the impact of those challenges on service to producers, on efficiency of personnel, and on implementation of this Act;

(3)

the need for information technology system upgrades of the Farm Service Agency relative to other agencies of the Department of Agriculture;

(4)

the detailed plan needed to fulfill the needs of the Department that are identified in paragraph (3), including hardware, software, and infrastructure requirements;

(5)

the estimated cost and timeframe for long-term modernization and stabilization of Farm Service Agency information technology systems;

(6)

the benefits associated with such modernization and stabilization; and

(7)

an evaluation of the existence of appropriate oversight within the Department to ensure that funds needed for systems upgrades can be appropriately managed.

1619.

Information gathering

(a)

Geospatial systems

The Secretary shall ensure that all the geospatial data of the agencies of the Department of Agriculture are portable and standardized.

(b)

Limitation on disclosures

(1)

Definition of agricultural operation

In this subsection, the term agricultural operation includes the production and marketing of agricultural commodities and livestock.

(2)

Prohibition

Except as provided in paragraphs (3) and (4), the Secretary, any officer or employee of the Department of Agriculture, or any contractor or cooperator of the Department, shall not disclose—

(A)

information provided by an agricultural producer or owner of agricultural land concerning the agricultural operation, farming or conservation practices, or the land itself, in order to participate in programs of the Department; or

(B)

geospatial information otherwise maintained by the Secretary about agricultural land or operations for which information described in subparagraph (A) is provided.

(3)

Authorized disclosures

(A)

Limited release of information

If the Secretary determines that the information described in paragraph (2) will not be subsequently disclosed except in accordance with paragraph (4), the Secretary may release or disclose the information to a person or Federal, State, local, or tribal agency working in cooperation with the Secretary in any Department program—

(i)

when providing technical or financial assistance with respect to the agricultural operation, agricultural land, or farming or conservation practices; or

(ii)

when responding to a disease or pest threat to agricultural operations, if the Secretary determines that a threat to agricultural operations exists and the disclosure of information to a person or cooperating government entity is necessary to assist the Secretary in responding to the disease or pest threat as authorized by law.

(4)

Exceptions

Nothing in this subsection affects—

(A)

the disclosure of payment information (including payment information and the names and addresses of recipients of payments) under any Department program that is otherwise authorized by law;

(B)

the disclosure of information described in paragraph (2) if the information has been transformed into a statistical or aggregate form without naming any—

(i)

individual owner, operator, or producer; or

(ii)

specific data gathering site; or

(C)

the disclosure of information described in paragraph (2) pursuant to the consent of the agricultural producer or owner of agricultural land.

(5)

Condition of other programs

The participation of the agricultural producer or owner of agricultural land in, or receipt of any benefit under, any program administered by the Secretary may not be conditioned on the consent of the agricultural producer or owner of agricultural land under paragraph (4)(C).

(6)

Waiver of privilege or protection

The disclosure of information under paragraph (2) shall not constitute a waiver of any applicable privilege or protection under Federal law, including trade secret protection.

1620.

Leasing of office space

Not later than 1 year after the date of enactment of this Act, the Secretary shall submit to the Committee on Agriculture and the Committee on Appropriations of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry and the Committee on Appropriations of the Senate a report that describes—

(1)

the costs and time associated with complying with leasing procedures of the General Services Administration relative to the previous independent leasing procedures of the Department of Agriculture;

(2)

the additional staffing needs associated with complying with those procedures; and

(3)

the value added to the leasing process and the ability of the Department to secure best-value leases by complying with the General Services Administration leasing procedures.

1621.

Geographically disadvantaged farmers and ranchers

(a)

Definitions

In this section:

(1)

Agricultural commodity

The term agricultural commodity has the meaning given the term in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602).

(2)

Geographically disadvantaged farmer or rancher

The term geographically disadvantaged farmer or rancher has the meaning given the term in section 10906(a) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 2204 note; Public Law 107–171).

(b)

Authorization

Subject to the availability of funds under subsection (d), the Secretary may provide geographically disadvantaged farmers or ranchers direct reimbursement payments for activities described in subsection (c).

(c)

Transportation

(1)

In general

Subject to paragraphs (2) and (3), the Secretary may provide direct reimbursement payments to a geographically disadvantaged farmer or rancher to transport an agricultural commodity, or inputs used to produce an agricultural commodity, during a fiscal year.

(2)

Proof of eligibility

To be eligible to receive assistance under paragraph (1), a geographically disadvantaged farmer or rancher shall demonstrate to the Secretary that transportation of the agricultural commodity or inputs occurred over a distance of more than 30 miles, as determined by the Secretary.

(3)

Amount

(A)

In general

Subject to paragraph (2), the amount of direct reimbursement payments made to a geographically disadvantaged farmer or rancher under this section for a fiscal year shall equal the product obtained by multiplying—

(i)

the amount of costs incurred by the geographically disadvantaged farmer or rancher for transportation of the agricultural commodity or inputs during the fiscal year; and

(ii)
(I)

the percentage of the allowance for that fiscal year under section 5941 of title 5, United States Code, for Federal employees stationed in Alaska and Hawaii; or

(II)

in the case of an insular area (as defined in section 1404 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103)), a comparable percentage of the allowance for the fiscal year, as determined by the Secretary.

(B)

Limitation

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

(d)

Authorization of Appropriations

There are authorized to be appropriated such sums as are necessary to carry out this section for each of fiscal years 2009 through 2012.

1622.

Implementation

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

1623.

Repeals

(a)

Commission on Application of Payment Limitations

Section 1605 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7993) is repealed.

(b)

Renewed Availability of Market Loss Assistance and Certain Emergency Assistance to Persons That Failed To Receive Assistance Under Earlier Authorities

Section 1617 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8000) is repealed.

II

Conservation

A

Definitions and Highly Erodible Land and Wetland Conservation

2001.

Definitions relating to conservation title of Food Security Act of 1985

(a)

Beginning farmer or rancher

Section 1201(a) of the Food Security Act of 1985 (16 U.S.C. 3801(a)) is amended—

(1)

by redesignating paragraphs (2) through (6), (7) through (11), (12), (13) through (15), (16), (17), and (18) as paragraphs (3) through (7), (9) through (13), (15), (20) through (22), (24), (26), and (27), respectively; and

(2)

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

(2)

Beginning farmer or rancher

The term beginning farmer or rancher has the meaning given the term in section 343(a)(8) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1991(a)(8)).

.

(b)

Farm

Section 1201(a) of the Food Security Act of 1985 (16 U.S.C. 3801(a)) is amended by inserting after paragraph (7), as redesignated by subsection (a)(1), the following new paragraph:

(8)

Farm

The term farm means a farm that—

(A)

is under the general control of one operator;

(B)

has one or more owners;

(C)

consists of one or more tracts of land, whether or not contiguous;

(D)

is located within a county or region, as determined by the Secretary; and

(E)

may contain lands that are incidental to the production of perennial crops, including conserving uses, forestry, and livestock, as determined by the Secretary.

.

(c)

Indian tribe

Section 1201(a) of the Food Security Act of 1985 (16 U.S.C. 3801(a)) is amended by inserting after paragraph (13), as redesignated by subsection (a)(1), the following new paragraph:

(14)

Indian tribe

The term Indian tribe has the meaning given the term in section 4(e) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b(e)).

.

(d)

Integrated pest management; livestock; nonindustrial private forest land; person and legal entity

Section 1201(a) of the Food Security Act of 1985 (16 U.S.C. 3801(a)) is amended by inserting after paragraph (15), as redesignated by subsection (a)(1), the following new paragraphs:

(16)

Integrated pest management

The term integrated pest management means a sustainable approach to managing pests by combining biological, cultural, physical, and chemical tools in a way that minimizes economic, health, and environmental risks.

(17)

Livestock

The term livestock means all animals raised on farms, as determined by the Secretary.

(18)

Nonindustrial private forest land

The term nonindustrial private forest land means rural land, as determined by the Secretary, that—

(A)

has existing tree cover or is suitable for growing trees; and

(B)

is owned by any nonindustrial private individual, group, association, corporation, Indian tribe, or other private legal entity that has definitive decisionmaking authority over the land.

(19)

Person and legal entity

For purposes of applying payment limitations under subtitle D, the terms person and legal entity have the meanings given those terms in section 1001(a) of this Act (7 U.S.C. 1308(a)).

.

(e)

Socially disadvantaged farmer or rancher

Section 1201(a) of the Food Security Act of 1985 (16 U.S.C. 3801(a)) is amended by inserting after paragraph (22), as redesignated by subsection (a)(1), the following new paragraph:

(23)

Socially disadvantaged farmer or rancher

The term socially disadvantaged farmer or rancher has the meaning given the term in section 2501(e)(2) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 2279(e)(2)).

.

(f)

Technical assistance

Section 1201(a) of the Food Security Act of 1985 (16 U.S.C. 3801(a)) is amended by inserting after paragraph (24), as redesignated by subsection (a)(1), the following new paragraph:

(25)

Technical assistance

The term technical assistance means technical expertise, information, and tools necessary for the conservation of natural resources on land active in agricultural, forestry, or related uses. The term includes the following:

(A)

Technical services provided directly to farmers, ranchers, and other eligible entities, such as conservation planning, technical consultation, and assistance with design and implementation of conservation practices.

(B)

Technical infrastructure, including activities, processes, tools, and agency functions needed to support delivery of technical services, such as technical standards, resource inventories, training, data, technology, monitoring, and effects analyses.

.

2002.

Review of good faith determinations related to highly erodible land conservation

Section 1212 of the Food Security Act of 1985 (16 U.S.C. 3812) is amended by striking subsection (f) and inserting the following new subsection:

(f)

Graduated Penalties

(1)

Ineligibility

No person shall become ineligible under section 1211 for program loans, payments, and benefits as a result of the failure of the person to actively apply a conservation plan, if the Secretary determines that the person has acted in good faith and without an intent to violate this subtitle.

(2)

Eligible reviewers

A determination of the Secretary, or a designee of the Secretary, under paragraph (1) shall be reviewed by the applicable—

(A)

State Executive Director, with the technical concurrence of the State Conservationist; or

(B)

district director, with the technical concurrence of the area conservationist.

(3)

Period for implementation

A person who meets the requirements of paragraph (1) shall be allowed a reasonable period of time, as determined by the Secretary, but not to exceed 1 year, during which to implement the measures and practices necessary to be considered to be actively applying the conservation plan of the person.

(4)

Penalties

(A)

Application

This paragraph applies if the Secretary determines that—

(i)

a person has failed to comply with section 1211 with respect to highly erodible cropland, and has acted in good faith and without an intent to violate section 1211; or

(ii)

the violation—

(I)

is technical and minor in nature; and

(II)

has a minimal effect on the erosion control purposes of the conservation plan applicable to the land on which the violation has occurred.

(B)

Reduction

If this paragraph applies under subparagraph (A), the Secretary shall, in lieu of applying the ineligibility provisions of section 1211, reduce program benefits described in section 1211 that the producer would otherwise be eligible to receive in a crop year by an amount commensurate with the seriousness of the violation, as determined by the Secretary.

(5)

Subsequent crop years

Any person whose benefits are reduced for any crop year under this subsection shall continue to be eligible for all of the benefits described in section 1211 for any subsequent crop year if, prior to the beginning of the subsequent crop year, the Secretary determines that the person is actively applying a conservation plan according to the schedule specified in the plan.

.

2003.

Review of good faith determinations related to wetland conservation

Section 1222(h) of the Food Security Act of 1985 (16 U.S.C. 3822(h)) is amended—

(1)

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

(2)

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

(2)

Eligible reviewers

A determination of the Secretary, or a designee of the Secretary, under paragraph (1) shall be reviewed by the applicable—

(A)

State Executive Director, with the technical concurrence of the State Conservationist; or

(B)

district director, with the technical concurrence of the area conservationist.

; and

(3)

in paragraph (3) (as redesignated by paragraph (1)), by inserting be before actively.

B

Conservation Reserve Program

2101.

Extension of conservation reserve program

Section 1231(a) of the Food Security Act of 1985 (16 U.S.C. 3831(a)) is amended—

(1)

by striking 2007 calendar year and inserting 2012 fiscal year; and

(2)

by inserting before the period the following: and to address issues raised by State, regional, and national conservation initiatives; and

2102.

Land eligible for enrollment in conservation reserve

Section 1231(b) of the Food Security Act of 1985 (16 U.S.C. 3831(b)) is amended—

(1)

in paragraph (1)(B)—

(A)

by striking Farm Security and Rural Investment Act of 2002 and inserting Food, Conservation, and Energy Act of 2008; and

(B)

by striking the period at the end and inserting a semicolon; and

(2)

in paragraph (4)—

(A)

in subparagraph (C), by striking ; or and inserting a semicolon;

(B)

in subparagraph (D), by striking and at the end and inserting or; and

(C)

in subparagraph (E), by inserting or after the semicolon at the end.

2103.

Maximum enrollment of acreage in conservation reserve

Section 1231(d) of the Food Security Act of 1985 (16 U.S.C. 3831(d)) is amended—

(1)

by striking 2007 calendar years and inserting 2009 fiscal years;

(2)

by striking ( 16 U.S.C. and inserting (16 U.S.C.; and

(3)

by adding at the end the following new sentence: During fiscal years 2010, 2011, and 2012, the Secretary may maintain up to 32,000,000 acres in the conservation reserve at any 1 time..

2104.

Designation of conservation priority areas

Section 1231(f) of the Food Security Act of 1985 (16 U.S.C. 3831(f)) is amended by striking the Chesapeake Bay Region (Pennsylvania, Maryland, and Virginia) and inserting the Chesapeake Bay Region.

2105.

Treatment of multi-year grasses and legumes

Subsection (g) of section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831) is amended to read as follows:

(g)

Multi-year grasses and legumes

(1)

In general

For purposes of this subchapter, alfalfa and other multi-year grasses and legumes in a rotation practice, approved by the Secretary, shall be considered agricultural commodities.

(2)

Cropping history

Alfalfa, when grown as part of a rotation practice, as determined by the Secretary, is an agricultural commodity subject to the cropping history criteria under subsection (b)(1)(B) for the purpose of determining whether highly erodible cropland has been planted or considered planted for 4 of the 6 years referred to in such subsection.

.

2106.

Revised pilot program for enrollment of wetland and buffer acreage in conservation reserve

(a)

Revised Program

(1)

In general

Title XII of the Food Security Act of 1985 is amended by inserting after section 1231 (16 U.S.C. 3831) the following new section:

1231B.

Pilot program for enrollment of wetland and buffer acreage in conservation reserve

(a)

Program required

(1)

In general

During the 2008 through 2012 fiscal years, the Secretary shall carry out a program in each State under which the Secretary shall enroll eligible acreage described in subsection (b).

(2)

Participation among states

The Secretary shall ensure, to the maximum extent practicable, that owners and operators in each State have an equitable opportunity to participate in the program established under this section.

(b)

Eligible acreage

(1)

Wetland and related land

Subject to subsections (c) and (d), an owner or operator may enroll in the conservation reserve, pursuant to the program established under this section, land—

(A)

that is wetland (including a converted wetland described in section 1222(b)(1)(A)) that had a cropping history during at least 3 of the immediately preceding 10 crop years;

(B)

on which a constructed wetland is to be developed that will receive flow from a row crop agriculture drainage system and is designed to provide nitrogen removal in addition to other wetland functions;

(C)

that was devoted to commercial pond-raised aquaculture in any year during the period of calendar years 2002 through 2007; or

(D)

that, after January 1, 1990, and before December 31, 2002, was—

(i)

cropped during at least 3 of 10 crop years; and

(ii)

subject to the natural overflow of a prairie wetland.

(2)

Buffer acreage

Subject to subsections (c) and (d), an owner or operator may enroll in the conservation reserve, pursuant to the program established under this section, buffer acreage that—

(A)

with respect to land described in subparagraph (A), (B), or (C) of paragraph (1)—

(i)

is contiguous to such land

(ii)

is used to protect such land; and

(iii)

is of such width as the Secretary determines is necessary to protect such land, taking into consideration and accommodating the farming practices (including the straightening of boundaries to accommodate machinery) used with respect to the cropland that surrounds such land; and

(B)

with respect to land described in subparagraph (D) of paragraph (1), enhances a wildlife benefit to the extent practicable in terms of upland to wetland ratios, as determined by the Secretary.

(c)

Program limitations

(1)

Acreage limitation

The Secretary may enroll in the conservation reserve, pursuant to the program established under this section, not more than—

(A)

100,000 acres in any State; and

(B)

a total of 1,000,000 acres.

(2)

Relationship to maximum enrollment

Subject to paragraph (3), any acreage enrolled in the conservation reserve under this section shall be considered acres maintained in the conservation reserve.

(3)

Relationship to other enrolled acreage

Acreage enrolled in the conservation reserve under this section shall not affect for any fiscal year the quantity of—

(A)

acreage enrolled to establish conservation buffers as part of the program announced on March 24, 1998 (63 Fed. Reg. 14109); or

(B)

acreage enrolled into the conservation reserve enhancement program announced on May 27, 1998 (63 Fed. Reg. 28965).

(4)

Review; potential increase in enrollment acreage

The Secretary shall conduct a review of the program established under this section with respect to each State that has enrolled land in the conservation reserve pursuant to the program. As a result of the review, the Secretary may increase the number of acres that may be enrolled in a State under the program to not more than 200,000 acres, notwithstanding paragraph (1)(A).

(d)

Owner or operator enrollment limitations

(1)

Wetland and related land

(A)

Wetlands and constructed wetlands

The maximum size of any land described in subparagraph (A) or (B) of subsection (b)(1) that an owner or operator may enroll in the conservation reserve, pursuant to the program established under this section, shall be 40 contiguous acres.

(B)

Flooded farmland

The maximum size of any land described in subparagraph (D) of subsection (b)(1) that an owner or operator may enroll in the conservation reserve, pursuant to the program established under this section, shall be 20 contiguous acres.

(C)

Coverage

All acres described in subparagraph (A) or (B), including acres that are ineligible for payment, shall be covered by the conservation contract.

(2)

Buffer acreage

The maximum size of any buffer acreage described in subsection (b)(2) that an owner or operator may enroll in the conservation reserve under this section shall be determined by the Secretary in consultation with the State Technical Committee.

(3)

Tracts

Except for land described in subsection (b)(1)(C) and buffer acreage related to such land, the maximum size of any eligible acreage described in subsection (b)(1) in a tract of an owner or operator enrolled in the conservation reserve under this section shall be 40 acres.

(e)

Duties of owners and operators

During the term of a contract entered into under the program established under this section, an owner or operator shall agree—

(1)

to restore the hydrology of the wetland within the eligible acreage to the maximum extent practicable, as determined by the Secretary;

(2)

to establish vegetative cover (which may include emerging vegetation in water and bottomland hardwoods, cypress, and other appropriate tree species) on the eligible acreage, as determined by the Secretary;

(3)

to a general prohibition of commercial use of the enrolled land; and

(4)

to carry out other duties described in section 1232.

(f)

Duties of the secretary

(1)

In general

Except as provided in paragraphs (2) and (3), in return for a contract entered into under this section, the Secretary shall—

(A)

make payments to the owner or operator based on rental rates for cropland; and

(B)

provide assistance to the owner or operator in accordance with sections 1233 and 1234.

(2)

Contract offers and payments

The Secretary shall use the method of determination described in section 1234(c)(2)(B) to determine the acceptability of contract offers and the amount of rental payments under this section.

(3)

Incentives

The amounts payable to owners and operators in the form of rental payments under contracts entered into under this section shall reflect incentives that are provided to owners and operators to enroll filterstrips in the conservation reserve under section 1234.

.

(2)

Repeal of superceded program

Section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831) is amended—

(A)

by striking subsection (h); and

(B)

by redesignating subsections (i) and (j) as subsections (h) and (i), respectively.

(b)

Conforming changes to emergency forestry conservation reserve program

Subsection (k) of section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831) is amended—

(1)

by striking (k) Emergency Forestry Conservation Reserve Program.— and inserting the following:

1231A.

Emergency forestry conservation reserve program

;

(2)

by striking subsection each place it appears (other than paragraph (3)(C)(ii)) and inserting section;

(3)

by redesignating paragraphs (1), (2), and (3) as subsections (a), (b), and (c), respectively;

(4)

in subsection (a), as so redesignated, by redesignating subparagraphs (A) and (B) as paragraphs (1) and (2), respectively; and

(5)

in subsection (c), as so redesignated—

(A)

by redesignating subparagraphs (A) through (I) as paragraphs (1) through (9), respectively;

(B)

in paragraph (1), as so redesignated, by striking subparagraph (B) and subparagraph (G) and inserting paragraph (2) and paragraph (7), respectively;

(C)

in paragraph (3), as so redesignated—

(i)

by redesignating clauses (i) and (ii) as subparagraphs (A) and (B), respectively; and

(ii)

by striking subsection (d) and inserting section 1231(d);

(D)

in paragraph (4), as so redesignated, by redesignating clauses (i) and (ii) as subparagraphs (A) and (B), respectively;

(E)

in paragraph (5), as so redesignated—

(i)

by redesignating clauses (i) through (v) as subparagraphs (A) through (E), respectively, and subclauses (I) and (II) as clauses (i) and (ii), respectively;

(ii)

in subparagraph (B), as so redesignated, by striking clause (i)(I) and inserting subparagraph (A)(i); and

(iii)

in subparagraph (C), as so redesignated, by striking clause (i)(II) and inserting subparagraph (A)(ii); and

(F)

in paragraph (9), as so redesignated, by redesignating clauses (i) through (iii) as subparagraphs (A) through (C), respectively, and subclauses (I) through (III) as clauses (i) through (iii), respectively.

2107.

Additional duty of participants under conservation reserve contracts

Section 1232(a) of the Food Security Act of 1985 (16 U.S.C. 3832(a)) is amended—

(1)

by redesignating paragraphs (5) through (10) as paragraphs (6) through (11), respectively; and

(2)

by inserting after paragraph (4) the following new paragraph:

(5)

to undertake management on the land as needed throughout the term of the contract to implement the conservation plan;

.

2108.

Managed haying, grazing, or other commercial use of forage on enrolled land and installation of wind turbines

(a)

General prohibition; exceptions

Section 1232(a) of the Food Security Act of 1985 (16 U.S.C. 3832(a)) is amended by striking paragraph (8), as redesignated by section 2107, and inserting the following new paragraph:

(8)

not to conduct any harvesting or grazing, nor otherwise make commercial use of the forage, on land that is subject to the contract, nor adopt any similar practice specified in the contract by the Secretary as a practice that would tend to defeat the purposes of the contract, except that the Secretary may permit, consistent with the conservation of soil, water quality, and wildlife habitat (including habitat during nesting seasons for birds in the area)—

(A)

managed harvesting (including the managed harvesting of biomass), except that in permitting managed harvesting, the Secretary, in coordination with the State technical committee—

(i)

shall develop appropriate vegetation management requirements; and

(ii)

shall identify periods during which managed harvesting may be conducted;

(B)

harvesting and grazing or other commercial use of the forage on the land that is subject to the contract in response to a drought or other emergency;

(C)

routine grazing or prescribed grazing for the control of invasive species, except that in permitting such routine grazing or prescribed grazing, the Secretary, in coordination with the State technical committee—

(i)

shall develop appropriate vegetation management requirements and stocking rates for the land that are suitable for continued routine grazing; and

(ii)

shall establish the frequency during which routine grazing may be conducted, taking into consideration regional differences such as—

(I)

climate, soil type, and natural resources;

(II)

the number of years that should be required between routine grazing activities; and

(III)

how often during a year in which routine grazing is permitted that routine grazing should be allowed to occur; and

(D)

the installation of wind turbines, except that in permitting the installation of wind turbines, the Secretary shall determine the number and location of wind turbines that may be installed, taking into account—

(i)

the location, size, and other physical characteristics of the land;

(ii)

the extent to which the land contains wildlife and wildlife habitat; and

(iii)

the purposes of the conservation reserve program under this subchapter;

.

(b)

Rental payment reduction

Section 1232 of the Food Security Act of 1985 (16 U.S.C. 3832) is amended by adding at the end the following new subsection:

(d)

Rental payment reduction for certain authorized uses of enrolled land

In the case of an authorized activity under subsection (a)(8) on land that is subject to a contract under this subchapter, the Secretary shall reduce the rental payment otherwise payable under the contract by an amount commensurate with the economic value of the authorized activity.

.

2109.

Cost sharing payments relating to trees, windbreaks, shelterbelts, and wildlife corridors

Section 1234(b) of the Food Security Act of 1985 (16 U.S.C. 3834(b)) is amended by striking paragraph (3) and inserting the following new paragraph:

(3)

Trees, windbreaks, shelterbelts, and wildlife corridors

(A)

Applicability

This paragraph applies to—

(i)

land devoted to the production of hardwood trees, windbreaks, shelterbelts, or wildlife corridors under a contract entered into under this subchapter after November 28, 1990;

(ii)

land converted to such production under section 1235A; and

(iii)

land on which an owner or operator agrees to conduct thinning authorized by section 1232(a)(9), if the thinning is necessary to improve the condition of resources on the land.

(B)

Payments

(i)

Percentage

In making cost share payments to an owner or operator of land described in subparagraph (A), the Secretary shall pay 50 percent of the reasonable and necessary costs incurred by the owner or operator for maintaining trees or shrubs, including the cost of replanting (if the trees or shrubs were lost due to conditions beyond the control of the owner or operator) or thinning.

(ii)

Duration

The Secretary shall make payments as described in clause (i) for a period of not less than 2 years, but not more than 4 years, beginning on the date of—

(I)

the planting of the trees or shrubs; or

(II)

the thinning of existing stands to improve the condition of resources on the land.

.

2110.

Evaluation and acceptance of contract offers, annual rental payments, and payment limitations

(a)

Evaluation and acceptance of contract offers

Section 1234(c) of the Food Security Act of 1985 (16 U.S.C. 3834(c)) is amended by striking paragraph (3) and inserting the following new paragraph:

(3)

Acceptance of contract offers

(A)

Evaluation of offers

In determining the acceptability of contract offers, the Secretary may take into consideration the extent to which enrollment of the land that is the subject of the contract offer would improve soil resources, water quality, or wildlife habitat or provide other environmental benefits.

(B)

Establishment of different criteria in various States and regions

The Secretary may establish different criteria for determining the acceptability of contract offers in various States and regions of the United States based on the extent to which water quality or wildlife habitat may be improved or erosion may be abated.

(C)

Local preference

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

.

(b)

Annual survey of dryland and irrigated cash rental rates

(1)

Annual estimates required

Section 1234(c) of the Food Security Act of 1985 (16 U.S.C. 3834(c)) is amended by adding at the end the following new paragraph:

(5)

Rental rates

(A)

Annual estimates

The Secretary (acting through the National Agricultural Statistics Service) shall conduct an annual survey of per acre estimates of county average market dryland and irrigated cash rental rates for cropland and pastureland in all counties or equivalent subdivisions within each State that have 20,000 acres or more of cropland and pastureland.

(B)

Public availability of estimates

The estimates derived from the annual survey conducted under subparagraph (A) shall be maintained on a website of the Department of Agriculture for use by the general public.

.

(2)

First survey

The first survey required by paragraph (5) of section 1234(c) of the Food Security Act of 1985 (16 U.S.C. 3834(c)), as added by subsection (a), shall be conducted not later than 1 year after the date of enactment of this Act.

(c)

Payment limitations

Section 1234(f) of the Food Security Act of 1985 (16 U.S.C. 3834(f)) is amended—

(1)

in paragraph (1), by striking made to a person and inserting received by a person or legal entity, directly or indirectly,;

(2)

by striking paragraph (2); and

(3)

in paragraph (4), by striking any person and inserting any person or legal entity.

2111.

Conservation reserve program transition incentives for beginning farmers or ranchers and socially disadvantaged farmers or ranchers

(a)

Contract modification authority

Section 1235(c)(1)(B) of the Food Security Act of 1985 (16 U.S.C. 3835(c)(1)(B)) is amended—

(1)

in clause (ii), by striking or at the end;

(2)

by redesignating clause (iii) as clause (iv); and

(3)

by inserting after clause (ii) the following new clause:

(iii)

to facilitate a transition of land subject to the contract from a retired or retiring owner or operator to a beginning farmer or rancher or socially disadvantaged farmer or rancher for the purpose of returning some or all of the land into production using sustainable grazing or crop production methods; or

.

(b)

Transition option

Section 1235 of the Food Security Act of 1985 (16 U.S.C. 3835) is amended by adding at the end the following new subsection:

(f)

Transition option for certain farmers or ranchers

(1)

Duties of the secretary

In the case of a contract modification approved in order to facilitate the transfer, as described in subsection (c)(1)(B)(iii), of land to a beginning farmer or rancher or socially disadvantaged farmer or rancher (in this subsection referred to as a covered farmer or rancher), the Secretary shall—

(A)

beginning on the date that is 1 year before the date of termination of the contract—

(i)

allow the covered farmer or rancher, in conjunction with the retired or retiring owner or operator, to make conservation and land improvements; and

(ii)

allow the covered farmer or rancher to begin the certification process under the Organic Foods Production Act of 1990 (7 U.S.C. 6501 et seq.);

(B)

beginning on the date of termination of the contract, require the retired or retiring owner or operator to sell or lease (under a long-term lease or a lease with an option to purchase) to the covered farmer or rancher the land subject to the contract for production purposes;

(C)

require the covered farmer or rancher to develop and implement a conservation plan;

(D)

provide to the covered farmer or rancher an opportunity to enroll in the conservation stewardship program or the environmental quality incentives program by not later than the date on which the farmer or rancher takes possession of the land through ownership or lease; and

(E)

continue to make annual payments to the retired or retiring owner or operator for not more than an additional 2 years after the date of termination of the contract, if the retired or retiring owner or operator is not a family member (as defined in section 1001A(b)(3)(B) of this Act) of the covered farmer or rancher.

(2)

Reenrollment

The Secretary shall provide a covered farmer or rancher with the option to reenroll any applicable partial field conservation practice that—

(A)

is eligible for enrollment under the continuous signup requirement of section 1231(h)(4)(B); and

(B)

is part of an approved conservation plan.

.

C

Wetlands Reserve Program

2201.

Establishment and purpose of wetlands reserve program

Subsection (a) of section 1237 of the Food Security Act of 1985 (16 U.S.C. 3837) is amended to read as follows:

(a)

Establishment and purposes

(1)

Establishment

The Secretary shall establish a wetlands reserve program to assist owners of eligible lands in restoring and protecting wetlands.

(2)

Purposes

The purposes of the wetlands reserve program are to restore, protect, or enhance wetlands on private or tribal lands that are eligible under subsections (c) and (d).

.

2202.

Maximum enrollment and enrollment methods

Section 1237(b) of the Food Security Act of 1985 (16 U.S.C. 3837(b)) is amended—

(1)

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

(1)

Maximum enrollment

The total number of acres enrolled in the wetlands reserve program shall not exceed 3,041,200 acres.

;

(2)

in paragraph (2), by striking The Secretary and inserting Subject to paragraph (3), the Secretary; and

(3)

by adding at the end the following new paragraph:

(3)

Acreage owned by indian tribes

In the case of acreage owned by an Indian tribe, the Secretary shall enroll acreage into the wetlands reserve program through the use of—

(A)

a 30-year contract (the value of which shall be equivalent to the value of a 30-year easement);

(B)

restoration cost-share agreements; or

(C)

any combination of the options described in subparagraphs (A) and (B).

.

2203.

Duration of wetlands reserve program and lands eligible for enrollment

(a)

In general

Section 1237(c) of the Food Security Act of 1985 (16 U.S.C. 3837(c)) is amended—

(1)

in the matter preceding paragraph (1)—

(A)

by striking 2007 calendar and inserting 2012 fiscal; and

(B)

by inserting private or tribal before land the second place it appears;

(2)

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

(2)

such land is—

(A)

farmed wetland or converted wetland, together with the adjacent land that is functionally dependent on the wetlands, except that converted wetland with respect to which the conversion was not commenced prior to December 23, 1985, shall not be eligible to be enrolled in the program under this section; or

(B)

cropland or grassland that was used for agricultural production prior to flooding from the natural overflow of a closed basin lake or pothole, as determined by the Secretary, together (where practicable) with the adjacent land that is functionally dependent on the cropland or grassland; and

.

(b)

Change of ownership

Section 1237E(a) of the Food Security Act of 1985 (16 U.S.C. 3837e(a)) is amended by striking in the preceding 12 months and inserting during the preceding 7-year period.

(c)

Annual survey and reallocation

Section 1237F of the Food Security Act of 1985 (16 U.S.C. 3837f) is amended by adding at the end the following new subsection:

(c)

Prairie Pothole Region survey and reallocation

(1)

Survey

The Secretary shall conduct a survey during fiscal year 2008 and each subsequent fiscal year for the purpose of determining interest and allocations for the Prairie Pothole Region to enroll eligible land described in section 1237(c)(2)(B).

(2)

Annual Adjustment

The Secretary shall make an adjustment to the allocation for an interested State for a fiscal year, based on the results of the survey conducted under paragraph (1) for the State during the previous fiscal year.

.

2204.

Terms of wetlands reserve program easements

Section 1237A(b)(2)(B) of the Food Security Act of 1985 (16 U.S.C. 3837a(b)(2)(B)) is amended—

(1)

in clause (i), by striking or at the end;

(2)

in clause (ii), by striking ; and and inserting ; or; and

(3)

by adding at the end the following new clause:

(iii)

to meet habitat needs of specific wildlife species; and

.

2205.

Compensation for easements under wetlands reserve program

Subsection (f) of section 1237A of the Food Security Act of 1985 (16 U.S.C. 3837a) is amended to read as follows:

(f)

Compensation

(1)

Determination

Effective on the date of the enactment of the Food, Conservation, and Energy Act of 2008, the Secretary shall pay as compensation for a conservation easement acquired under this subchapter the lowest of—

(A)

the fair market value of the land, as determined by the Secretary, using the Uniform Standards of Professional Appraisal Practices or an area-wide market analysis or survey;

(B)

the amount corresponding to a geographical cap, as determined by the Secretary in regulations; or

(C)

the offer made by the landowner.

(2)

Form of payment

Compensation for an easement shall be provided by the Secretary in the form of a cash payment, in an amount determined under paragraph (1) and specified in the easement agreement.

(3)

Payment schedule for easements

(A)

Easements valued at $500,000 or less

For easements valued at $500,000 or less, the Secretary may provide easement payments in not more than 30 annual payments.

(B)

Easements in excess of $500,000

For easements valued at more than $500,000, the Secretary may provide easement payments in at least 5, but not more than 30 annual payments, except that, if the Secretary determines it would further the purposes of the program, the Secretary may make a lump sum payment for such an easement.

(4)

Restoration agreement payment limitation

Payments made to a person or legal entity, directly or indirectly, pursuant to a restoration cost-share agreement under this subchapter may not exceed, in the aggregate, $50,000 per year.

(5)

Enrollment procedure

Lands may be enrolled under this subchapter through the submission of bids under a procedure established by the Secretary.

.

2206.

Wetlands reserve enhancement program and reserved rights pilot program

Section 1237A of the Food Security Act of 1985 (16 U.S.C. 3837a) is amended by adding at the end the following new subsection:

(h)

Wetlands Reserve Enhancement Program

(1)

Program authorized

The Secretary may enter into 1 or more agreements with a State (including a political subdivision or agency of a State), nongovernmental organization, or Indian tribe to carry out a special wetlands reserve enhancement program that the Secretary determines would advance the purposes of this subchapter.

(2)

Reserved rights pilot program

(A)

Reservation of grazing rights

As part of the wetlands reserve enhancement program, the Secretary shall carry out a pilot program for land in which a landowner may reserve grazing rights in the warranty easement deed restriction if the Secretary determines that the reservation and use of the grazing rights—

(i)

is compatible with the land subject to the easement;

(ii)

is consistent with the long-term wetland protection and enhancement goals for which the easement was established; and

(iii)

complies with a conservation plan.

(B)

Duration

The pilot program established under this paragraph shall terminate on September 30, 2012.

.

2207.

Duties of Secretary of Agriculture under wetlands reserve program

Section 1237C of the Food Security Act of 1985 (16 U.S.C. 3837c) is amended—

(1)

in subsection (a)(1), by inserting including necessary maintenance activities, after values,; and

(2)

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

(c)

Ranking of offers

(1)

Conservation benefits and funding considerations

When evaluating offers from landowners, the Secretary may consider—

(A)

the conservation benefits of obtaining an easement or other interest in the land;

(B)

the cost-effectiveness of each easement or other interest in eligible land, so as to maximize the environmental benefits per dollar expended; and

(C)

whether the landowner or another person is offering to contribute financially to the cost of the easement or other interest in the land to leverage Federal funds.

(2)

Additional considerations

In determining the acceptability of easement offers, the Secretary may take into consideration—

(A)

the extent to which the purposes of the easement program would be achieved on the land;

(B)

the productivity of the land; and

(C)

the on-farm and off-farm environmental threats if the land is used for the production of agricultural commodities.

.

2208.

Payment limitations under wetlands reserve contracts and agreements

Section 1237D(c)(1) of the Food Security Act of 1985 (16 U.S.C. 3837d(c)(1)) is amended—

(1)

by striking The total amount of easement payments made to a person and inserting The total amount of payments that a person or legal entity may receive, directly or indirectly,; and

(2)

by inserting or under 30-year contracts before the period at the end.

2209.

Repeal of payment limitations exception for State agreements for wetlands reserve enhancement

Section 1237D(c) of the Food Security Act of 1985 (16 U.S.C. 3837d(c)) is amended by striking paragraph (4).

2210.

Report on implications of long-term nature of conservation easements

(a)

Report required

Not later than January 1, 2010, the Secretary of Agriculture shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that evaluates the implications of the long-term nature of conservation easements granted under section 1237A of the Food Security Act of 1985 (16 U.S.C. 3837a) on resources of the Department of Agriculture.

(b)

Inclusions

The report required by subsection (a) shall include the following:

(1)

Data relating to the number and location of conservation easements granted under that section that the Secretary holds or has a significant role in monitoring or managing.

(2)

An assessment of the extent to which the oversight of the conservation easement agreements impacts the availability of resources, including technical assistance.

(3)

An assessment of the uses and value of agreements with partner organizations.

(4)

Any other relevant information relating to costs or other effects that would be helpful to the Committees referred to in subsection (a).

D

Conservation Stewardship Program

2301.

Conservation stewardship program

(a)

Establishment of program

Chapter 2 of subtitle D of title XII of the Food Security Act of 1985 is amended—

(1)

by redesignating subchapters B (farmland protection program) and C (grassland reserve program) as subchapters C and D, respectively; and

(2)

by inserting after subchapter A the following new subchapter:

B

Conservation stewardship program

1238D.

Definitions

In this subchapter:

(1)

Conservation activities

(A)

In general

The term conservation activities means conservation systems, practices, or management measures that are designed to address a resource concern.

(B)

Inclusions

The term conservation activities includes—

(i)

structural measures, vegetative measures, and land management measures, including agriculture drainage management systems, as determined by the Secretary; and

(ii)

planning needed to address a resource concern.

(2)

Conservation measurement tools

The term conservation measurement tools means procedures to estimate the level of environmental benefit to be achieved by a producer in implementing conservation activities, including indices or other measures developed by the Secretary.

(3)

Conservation stewardship plan

The term conservation stewardship plan means a plan that—

(A)

identifies and inventories resource concerns;

(B)

establishes benchmark data and conservation objectives;

(C)

describes conservation activities to be implemented, managed, or improved; and

(D)

includes a schedule and evaluation plan for the planning, installation, and management of the new and existing conservation activities.

(4)

Priority resource concern

The term priority resource concern means a resource concern that is identified at the State level, in consultation with the State Technical Committee, as a priority for a particular watershed or area of the State.

(5)

Program

The term program means the conservation stewardship program established by this subchapter.

(6)

Resource concern

The term resource concern means a specific natural resource impairment or problem, as determined by the Secretary, that—

(A)

represents a significant concern in a State or region; and

(B)

is likely to be addressed successfully through the implementation of conservation activities by producers on land eligible for enrollment in the program.

(7)

Stewardship threshold

The term stewardship threshold means the level of natural resource conservation and environmental management required, as determined by the Secretary using conservation measurement tools, to improve and conserve the quality and condition of a resource concern.

1238E.

Conservation stewardship program

(a)

Establishment and purpose

During each of fiscal years 2009 through 2012, the Secretary shall carry out a conservation stewardship program to encourage producers to address resource concerns in a comprehensive manner—

(1)

by undertaking additional conservation activities; and

(2)

by improving, maintaining and managing existing conservation activities.

(b)

Eligible land

(1)

In general

Except as provided in subsection (c), the following land is eligible for enrollment in the program:

(A)

Private agricultural land (including cropland, grassland, prairie land, improved pastureland, rangeland, and land used for agro-forestry).

(B)

Agricultural land under the jurisdiction of an Indian tribe.

(C)

Forested land that is an incidental part of an agricultural operation.

(D)

Other private agricultural land (including cropped woodland, marshes, and agricultural land used for the production of livestock) on which resource concerns related to agricultural production could be addressed by enrolling the land in the program, as determined by the Secretary.

(2)

Special rule for nonindustrial private forest land

Nonindustrial private forest land is eligible for enrollment in the program, except that not more than 10 percent of the annual acres enrolled nationally in any fiscal year may be nonindustrial private forest land.

(3)

Agricultural operation

Eligible land shall include all acres of an agricultural operation of a producer, whether or not contiguous, that are under the effective control of the producer at the time the producer enters into a stewardship contract, and is operated by the producer with equipment, labor, management, and production or cultivation practices that are substantially separate from other agricultural operations, as determined by the Secretary.

(c)

Exclusions

(1)

Land enrolled in other conservation programs

Subject to paragraph (2), the following land is not be eligible for enrollment in the program:

(A)

Land enrolled in the conservation reserve program.

(B)

Land enrolled in the wetlands reserve program.

(C)

Land enrolled in the grassland reserve program.

(2)

Conversion to cropland

Land used for crop production after the date of enactment of the Food, Conservation, and Energy Act of 2008 that had not been planted, considered to be planted, or devoted to crop production for at least 4 of the 6 years preceding that date shall not be the basis for any payment under the program, unless the land does not meet the requirement because—

(A)

the land had previously been enrolled in the conservation reserve program;

(B)

the land has been maintained using long-term crop rotation practices, as determined by the Secretary; or

(C)

the land is incidental land needed for efficient operation of the farm or ranch, as determined by the Secretary.

1238F.

Stewardship contracts

(a)

Submission of contract offers

To be eligible to participate in the conservation stewardship program, a producer shall submit to the Secretary for approval a contract offer that—

(1)

demonstrates to the satisfaction of the Secretary that the producer, at the time of the contract offer, is meeting the stewardship threshold for at least one resource concern; and

(2)

would, at a minimum, meet or exceed the stewardship threshold for at least 1 priority resource concern by the end of the stewardship contract by—

(A)

installing and adopting additional conservation activities; and

(B)

improving, maintaining, and managing conservation activities in place at the operation of the producer at the time the contract offer is accepted by the Secretary.

(b)

Evaluation of contract offers

(1)

Ranking of applications

In evaluating contract offers made by producers to enter into contracts under the program, the Secretary shall rank applications based on—

(A)

the level of conservation treatment on all applicable priority resource concerns at the time of application, based to the maximum extent practicable on conservation measurement tools;

(B)

the degree to which the proposed conservation treatment on applicable priority resource concerns effectively increases conservation performance, based to the maximum extent possible on conservation measurement tools;

(C)

the number of applicable priority resource concerns proposed to be treated to meet or exceed the stewardship threshold by the end of the contract;

(D)

the extent to which other resource concerns, in addition to priority resource concerns, will be addressed to meet or exceed the stewardship threshold by the end of the contract period; and

(E)

the extent to which the actual and anticipated environmental benefits from the contract are provided at the least cost relative to other similarly beneficial contract offers.

(2)

Prohibition

The Secretary may not assign a higher priority to any application because the applicant is willing to accept a lower payment than the applicant would otherwise be eligible to receive.

(3)

Additional criteria

The Secretary may develop and use such additional criteria for evaluating applications to enroll in the program that the Secretary determines are necessary to ensure that national, State, and local conservation priorities are effectively addressed.

(c)

Entering into contracts

After a determination that a producer is eligible for the program under subsection (a), and a determination that the contract offer ranks sufficiently high under the evaluation criteria under subsection (b), the Secretary shall enter into a conservation stewardship contract with the producer to enroll the land to be covered by the contract.

(d)

Contract provisions

(1)

Term

A conservation stewardship contract shall be for a term of 5 years.

(2)

Provisions

The conservation stewardship contract of a producer shall—

(A)

state the amount of the payment the Secretary agrees to make to the producer for each year of the conservation stewardship contract under section 1238G(e);

(B)

require the producer—

(i)

to implement during the term of the conservation stewardship contract the conservation stewardship plan approved by the Secretary;

(ii)

to maintain, and make available to the Secretary at such times as the Secretary may request, appropriate records showing the effective and timely implementation of the conservation stewardship contract; and

(iii)

not to engage in any activity during the term of the conservation stewardship contract on the eligible land covered by the contract that would interfere with the purposes of the conservation stewardship contract;

(C)

permit all economic uses of the land that—

(i)

maintain the agricultural nature of the land; and

(ii)

are consistent with the conservation purposes of the conservation stewardship contract;

(D)

include a provision to ensure that a producer shall not be considered in violation of the contract for failure to comply with the contract due to circumstances beyond the control of the producer, including a disaster or related condition, as determined by the Secretary; and

(E)

include such other provisions as the Secretary determines necessary to ensure the purposes of the program are achieved.

(e)

Contract renewal

At the end of an initial conservation stewardship contract of a producer, the Secretary may allow the producer to renew the contract for one additional five-year period if the producer—

(1)

demonstrates compliance with the terms of the existing contract; and

(2)

agrees to adopt new conservation activities, as determined by the Secretary.

(f)

Modification

The Secretary may allow a producer to modify a stewardship contract if the Secretary determines that the modification is consistent with achieving the purposes of the program.

(g)

Contract termination

(1)

Voluntary termination

A producer may terminate a conservation stewardship contract if the Secretary determines that termination would not defeat the purposes of the program.

(2)

Involuntary termination

The Secretary may terminate a contract under this subchapter if the Secretary determines that the producer violated the contract.

(3)

Repayment

If a contract is terminated, the Secretary may, consistent with the purposes of the program—

(A)

allow the producer to retain payments already received under the contract; or

(B)

require repayment, in whole or in part, of payments already received and assess liquidated damages.

(4)

Change of interest in land subject to a contract

(A)

In general

Except as provided in paragraph (B), a change in the interest of a producer in land covered by a contract under this chapter shall result in the termination of the contract with regard to that land.

(B)

Transfer of duties and rights

Subparagraph (A) shall not apply if—

(i)

within a reasonable period of time (as determined by the Secretary) after the date of the change in the interest in land covered by a contract under the program, the transferee of the land provides written notice to the Secretary that all duties and rights under the contract have been transferred to, and assumed by, the transferee; and

(ii)

the transferee meets the eligibility requirements of the program.

(h)

Coordination with organic certification

The Secretary shall establish a transparent means by which producers may initiate organic certification under the Organic Foods Production Act of 1990 (7 U.S.C. 6501 et. seq.) while participating in a contract under this subchapter.

(i)

On-farm research and demonstration or pilot testing

The Secretary may approve a contract offer under this subchapter that includes—

(1)

on-farm conservation research and demonstration activities; and

(2)

pilot testing of new technologies or innovative conservation practices.

1238G.

Duties of the Secretary

(a)

In general

To achieve the conservation goals of a contract under the conservation stewardship program, the Secretary shall—

(1)

make the program available to eligible producers on a continuous enrollment basis with 1 or more ranking periods, one of which shall occur in the first quarter of each fiscal year;

(2)

identify not less than 3 nor more than 5 priority resource concerns in a particular watershed or other appropriate region or area within a State; and

(3)

develop reliable conservation measurement tools for purposes of carrying out the program.

(b)

Allocation to States

The Secretary shall allocate acres to States for enrollment, based—

(1)

primarily on each State’s proportion of eligible acres under section 1238E(b)(1) to the total number of eligible acres in all States; and

(2)

also on consideration of—

(A)

the extent and magnitude of the conservation needs associated with agricultural production in each State;

(B)

the degree to which implementation of the program in the State is, or will be, effective in helping producers address those needs; and

(C)

other considerations to achieve equitable geographic distribution of funds, as determined by the Secretary.

(c)

Specialty crop and organic producers

The Secretary shall ensure that outreach and technical assistance are available, and program specifications are appropriate to enable specialty crop and organic producers to participate in the program.

(d)

Acreage enrollment limitation

During the period beginning on October 1, 2008, and ending on September 30, 2017, the Secretary shall, to the maximum extent practicable—

(1)

enroll in the program an additional 12,769,000 acres for each fiscal year; and

(2)

manage the program to achieve a national average rate of $18 per acre, which shall include the costs of all financial assistance, technical assistance, and any other expenses associated with enrollment or participation in the program.

(e)

Conservation stewardship payments

(1)

Availability of payments

The Secretary shall provide a payment under the program to compensate the producer for—

(A)

installing and adopting additional conservation activities; and

(B)

improving, maintaining, and managing conservation activities in place at the operation of the producer at the time the contract offer is accepted by the Secretary.

(2)

Payment amount

The amount of the conservation stewardship payment shall be determined by the Secretary and based, to the maximum extent practicable, on the following factors:

(A)

Costs incurred by the producer associated with planning, design, materials, installation, labor, management, maintenance, or training.

(B)

Income forgone by the producer.

(C)

Expected environmental benefits as determined by conservation measurement tools.

(3)

Exclusions

A payment to a producer under this subsection shall not be provided for—

(A)

the design, construction, or maintenance of animal waste storage or treatment facilities or associated waste transport or transfer devices for animal feeding operations; or

(B)

conservation activities for which there is no cost incurred or income forgone to the producer.

(4)

Timing of payments

(A)

In general

The Secretary shall make payments as soon as practicable after October 1 of each fiscal year for activities carried out in the previous fiscal year.

(B)

Additional activities

The Secretary shall make payments to compensate producers for installation of additional practices at the time at which the practices are installed and adopted.

(f)

Supplemental payments for resource-conserving crop rotations

(1)

Availability of payments

The Secretary shall provide additional payments to producers that, in participating in the program, agree to adopt resource-conserving crop rotations to achieve beneficial crop rotations as appropriate for the land of the producers.

(2)

Beneficial crop rotations

The Secretary shall determine whether a resource-conserving crop rotation is a beneficial crop rotation eligible for additional payments under paragraph (1), based on whether the resource-conserving crop rotation is designed to provide natural resource conservation and production benefits.

(3)

Eligibility

To be eligible to receive a payment described in paragraph (1), a producer shall agree to adopt and maintain beneficial resource-conserving crop rotations for the term of the contract.

(4)

Resource-conserving crop rotation

In this subsection, the term resource-conserving crop rotation means a crop rotation that—

(A)

includes at least 1 resource conserving crop (as defined by the Secretary);

(B)

reduces erosion;

(C)

improves soil fertility and tilth;

(D)

interrupts pest cycles; and

(E)

in applicable areas, reduces depletion of soil moisture or otherwise reduces the need for irrigation.

(g)

Payment limitations

A person or legal entity may not receive, directly or indirectly, payments under this subchapter that, in the aggregate, exceed $200,000 for all contracts entered into during any 5-year period, excluding funding arrangements with federally recognized Indian tribes or Alaska Native corporations, regardless of the number of contracts entered into under the program by the person or entity.

(h)

Regulations

The Secretary shall promulgate regulations that—

(1)

prescribe such other rules as the Secretary determines to be necessary to ensure a fair and reasonable application of the limitations established under subsection (g); and

(2)

otherwise enable the Secretary to carry out the program.

(i)

Data

The Secretary shall maintain detailed and segmented data on contracts and payments under the program to allow for quantification of the amount of payments made for—

(1)

the installation and adoption of additional conservation activities and improvements to conservation activities in place on the operation of a producer at the time the conservation stewardship offer is accepted by the Secretary;

(2)

participation in research, demonstration, and pilot projects; and

(3)

the development and periodic assessment and evaluation of conservation plans developed under this subchapter.

.

(b)

Termination of conservation security program authority; effect on existing contracts

Section 1238A of the Food Security Act of 1985 (16 U.S.C. 3838a) is amended by adding at the end the following new subsection:

(g)

Prohibition on conservation security program contracts; effect on existing contracts

(1)

Prohibition

A conservation security contract may not be entered into or renewed under this subchapter after September 30, 2008.

(2)

Exception

This subchapter, and the terms and conditions of the conservation security program, shall continue to apply to—

(A)

conservation security contracts entered into on or before September 30, 2008; and

(B)

any conservation security contract entered into after that date, but for which the application for the contract was received during the 2008 sign-up period.

(3)

Effect on payments

The Secretary shall make payments under this subchapter with respect to conservation security contracts described in paragraph (2) during the remaining term of the contracts.

(4)

Regulations

A contract described in paragraph (2) may not be administered under the regulations issued to carry out the conservation stewardship program.

.

(c)

Reference to redesignated subchapter

Section 1238A(b)(3)(C) of title XII of the Food Security Act of 1985 (16 U.S.C. 3838a(b)(3)(C)) is amended by striking subchapter C and inserting subchapter D.

E

Farmland Protection and Grassland Reserve

2401.

Farmland protection program

(a)

Definitions

Section 1238H of the Food Security Act of 1985 (16 U.S.C. 3838h) is amended—

(1)

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

(1)

Eligible entity

The term eligible entity means—

(A)

any agency of any State or local government or an Indian tribe (including a farmland protection board or land resource council established under State law); or

(B)

any organization that—

(i)

is organized for, and at all times since the formation of the organization has been operated principally for, 1 or more of the conservation purposes specified in clause (i), (ii), (iii), or (iv) of section 170(h)(4)(A) of the Internal Revenue Code of 1986;

(ii)

is an organization described in section 501(c)(3) of that Code that is exempt from taxation under section 501(a) of that Code; and

(iii)

is—

(I)

described in paragraph (1) or (2) of section 509(a) of that Code; or

(II)

described in section 509(a)(3), and is controlled by an organization described in section 509(a)(2), of that Code.

; and

(2)

in paragraph (2)—

(A)

in subparagraph (A)—

(i)

by striking that— and inserting that is subject to a pending offer for purchase from an eligible entity and—; and

(ii)

by striking clauses (i) and (ii) and inserting the following new clauses:

(i)

has prime, unique, or other productive soil;

(ii)

contains historical or archaeological resources; or

(iii)

the protection of which will further a State or local policy consistent with the purposes of the program.

; and

(B)

in subparagraph (B)—

(i)

in clause (iv), by striking and at the end; and

(ii)

by striking clause (v) and inserting the following new clauses:

(v)

forest land that—

(I)

contributes to the economic viability of an agricultural operation; or

(II)

serves as a buffer to protect an agricultural operation from development; and

(vi)

land that is incidental to land described in clauses (i) through (v), if such land is necessary for the efficient administration of a conservation easement, as determined by the Secretary.

.

(b)

Farmland protection

Section 1238I of the Food Security Act of 1985 (16 U.S.C. 3838i) is amended to read as follows:

1238I.

Farmland protection program

(a)

Establishment

The Secretary shall establish and carry out a farmland protection program under which the Secretary shall facilitate and provide funding for the purchase of conservation easements or other interests in eligible land.

(b)

Purpose

The purpose of the program is to protect the agricultural use and related conservation values of eligible land by limiting nonagricultural uses of that land.

(c)

Cost-share assistance

(1)

Provision of assistance

The Secretary shall provide cost-share assistance to eligible entities for purchasing a conservation easement or other interest in eligible land.

(2)

Federal share

The share of the cost provided by the Secretary for purchasing a conservation easement or other interest in eligible land shall not exceed 50 percent of the appraised fair market value of the conservation easement or other interest in eligible land.

(3)

Non-federal share

(A)

Share provided by eligible entity

The eligible entity shall provide a share of the cost of purchasing a conservation easement or other interest in eligible land in an amount that is not less than 25 percent of the acquisition purchase price.

(B)

Landowner contribution

As part of the non-Federal share of the cost of purchasing a conservation easement or other interest in eligible land, an eligible entity may include a charitable donation or qualified conservation contribution (as defined by section 170(h) of the Internal Revenue Code of 1986) from the private landowner from which the conservation easement or other interest in land will be purchased.

(d)

Determination of fair market value

Effective on the date of enactment of the Food, Conservation, and Energy Act of 2008, the fair market value of the conservation easement or other interest in eligible land shall be determined on the basis of an appraisal using an industry approved method, selected by the eligible entity and approved by the Secretary.

(e)

Bidding down prohibited

If the Secretary determines that 2 or more applications for cost-share assistance are comparable in achieving the purpose of the program, the Secretary shall not assign a higher priority to any 1 of those applications solely on the basis of lesser cost to the program.

(f)

Condition on assistance

(1)

Conservation plan

Any highly erodible cropland for which a conservation easement or other interest is purchased using cost-share assistance provided under the program shall be subject to a conservation plan that requires, at the option of the Secretary, the conversion of the cropland to less intensive uses.

(2)

Contingent right of enforcement

The Secretary shall require the inclusion of a contingent right of enforcement for the Secretary in the terms of a conservation easement or other interest in eligible land that is purchased using cost-share assistance provided under the program.

(g)

Agreements with eligible entities

(1)

In general

The Secretary shall enter into agreements with eligible entities to stipulate the terms and conditions under which the eligible entity is permitted to use cost-share assistance provided under subsection (c).

(2)

Length of agreements

An agreement under this subsection shall be for a term that is—

(A)

in the case of an eligible entity certified under the process described in subsection (h), a minimum of five years; and

(B)

for all other eligible entities, at least three, but not more than five years.

(3)

Substitution of qualified projects

An agreement shall allow, upon mutual agreement of the parties, substitution of qualified projects that are identified at the time of the proposed substitution.

(4)

Minimum requirements

An eligible entity shall be authorized to use its own terms and conditions, as approved by the Secretary, for conservation easements and other purchases of interests in land, so long as such terms and conditions—

(A)

are consistent with the purposes of the program;

(B)

permit effective enforcement of the conservation purposes of such easements or other interests; and

(C)

include a limit on the impervious surfaces to be allowed that is consistent with the agricultural activities to be conducted.

(5)

Effect of violation

If a violation occurs of a term or condition of an agreement entered into under this subsection—

(A)

the agreement shall remain in force; and

(B)

the Secretary may require the eligible entity to refund all or part of any payments received by the entity under the program, with interest on the payments as determined appropriate by the Secretary.

(h)

Certification of eligible entities

(1)

Certification process

The Secretary shall establish a process under which the Secretary may—

(A)

directly certify eligible entities that meet established criteria;

(B)

enter into long-term agreements with certified entities, as authorized by subsection (g)(2)(A); and

(C)

accept proposals for cost-share assistance to certified entities for the purchase of conservation easements or other interests in eligible land throughout the duration of such agreements.

(2)

Certification criteria

In order to be certified, an eligible entity shall demonstrate to the Secretary that the entity will maintain, at a minimum, for the duration of the agreement—

(A)

a plan for administering easements that is consistent with the purpose of this subchapter;

(B)

the capacity and resources to monitor and enforce conservation easements or other interests in land; and

(C)

policies and procedures to ensure—

(i)

the long-term integrity of conservation easements or other interests in eligible land;

(ii)

timely completion of acquisitions of easements or other interests in eligible land; and

(iii)

timely and complete evaluation and reporting to the Secretary on the use of funds provided by the Secretary under the program.

(3)

Review and revision

(A)

Review

The Secretary shall conduct a review of eligible entities certified under paragraph (1) every three years to ensure that such entities are meeting the criteria established under paragraph (2).

(B)

Revocation

If the Secretary finds that the certified entity no longer meets the criteria established under paragraph (2), the Secretary may—

(i)

allow the certified entity a specified period of time, at a minimum 180 days, in which to take such actions as may be necessary to meet the criteria; and

(ii)

revoke the certification of the entity, if after the specified period of time, the certified entity does not meet the criteria established in paragraph (2).

.

2402.

Farm viability program

Section 1238J(b) of the Food Security Act of 1985 (16 U.S.C. 3838j(b)) is amended by striking 2007 and inserting 2012.

2403.

Grassland reserve program

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

D

Grassland Reserve Program

1238N.

Grassland reserve program

(a)

Establishment and purpose

The Secretary shall establish a grassland reserve program (referred to in this subchapter as the program) for the purpose of assisting owners and operators in protecting grazing uses and related conservation values by restoring and conserving eligible land through rental contracts, easements, and restoration agreements.

(b)

Enrollment of acreage

(1)

Acreage enrolled

The Secretary shall enroll an additional 1,220,000 acres of eligible land in the program during fiscal years 2009 through 2012.

(2)

Methods of enrollment

The Secretary shall enroll eligible land in the program through the use of;

(A)

a 10-year, 15-year, or 20-year rental contract;

(B)

a permanent easement; or

(C)

in a State that imposes a maximum duration for easements, an easement for the maximum duration allowed under the law of that State.

(3)

Limitation

Of the total amount of funds expended under the program to acquire rental contracts and easements described in paragraph (2), the Secretary shall use, to the extent practicable—

(A)

40 percent for rental contacts; and

(B)

60 percent for easements.

(4)

Enrollment of conservation reserve land

(A)

Priority

Upon expiration of a contract under subchapter B of chapter 1 of this subtitle, the Secretary shall give priority for enrollment in the program to land previously enrolled in the conservation reserve program if—

(i)

the land is eligible land, as defined in subsection (c); and

(ii)

the Secretary determines that the land is of high ecological value and under significant threat of conversion to uses other than grazing.

(B)

Maximum enrollment

The number of acres of land enrolled under the priority described in subparagraph (A) in a calendar year shall not exceed 10 percent of the total number of acres enrolled in the program in that calendar year.

(c)

Eligible land defined

For purposes of the program, the term eligible land means private or tribal land that—

(1)

is grassland, land that contains forbs, or shrubland (including improved rangeland and pastureland) for which grazing is the predominant use;

(2)

is located in an area that has been historically dominated by grassland, forbs, or shrubland, and the land—

(A)

could provide habitat for animal or plant populations of significant ecological value if the land—

(i)

is retained in its current use; or

(ii)

is restored to a natural condition;

(B)

contains historical or archaeological resources; or

(C)

would address issues raised by State, regional, and national conservation priorities; or

(3)

is incidental to land described in paragraph (1) or (2), if the incidental land is determined by the Secretary to be necessary for the efficient administration of a rental contract or easement under the program.

1238O.

Duties of owners and operators

(a)

Rental contracts

To be eligible to enroll eligible land in the program under a rental contract, the owner or operator of the land shall agree—

(1)

to comply with the terms of the contract and, when applicable, a restoration agreement;

(2)

to suspend any existing cropland base and allotment history for the land under another program administered by the Secretary; and

(3)

to implement a grazing management plan, as approved by the Secretary, which may be modified upon mutual agreement of the parties.

(b)

Easements

To be eligible to enroll eligible land in the program through an easement, the owner of the land shall agree—

(1)

to grant an easement to the Secretary or to an eligible entity described in section 1238Q;

(2)

to create and record an appropriate deed restriction in accordance with applicable State law to reflect the easement;

(3)

to provide a written statement of consent to the easement signed by persons holding a security interest or any vested interest in the land;

(4)

to provide proof of unencumbered title to the underlying fee interest in the land that is the subject of the easement;

(5)

to comply with the terms of the easement and, when applicable, a restoration agreement;

(6)

to implement a grazing management plan, as approved by the Secretary, which may be modified upon mutual agreement of the parties; and

(7)

to eliminate any existing cropland base and allotment history for the land under another program administered by the Secretary.

(c)

Restoration agreements

(1)

When applicable

To be eligible for cost-share assistance to restore eligible land subject to a rental contract or an easement under the program, the owner or operator of the land shall agree to comply with the terms of a restoration agreement.

(2)

Terms and conditions

The Secretary shall prescribe the terms and conditions of a restoration agreement by which eligible land that is subject to a rental contract or easement under the program shall be restored.

(3)

Duties

The restoration agreement shall describe the respective duties of the owner or operator and the Secretary, including the Federal share of restoration payments and technical assistance.

(d)

Terms and conditions applicable to rental contracts and easements

(1)

Permissible activities

The terms and conditions of a rental contract or easement under the program shall permit—

(A)

common grazing practices, including maintenance and necessary cultural practices, on the land in a manner that is consistent with maintaining the viability of grassland, forb, and shrub species appropriate to that locality;

(B)

haying, mowing, or harvesting for seed production, subject to appropriate restrictions during the nesting season for birds in the local area that are in significant decline or are conserved in accordance with Federal or State law, as determined by the State Conservationist;

(C)

fire presuppression, rehabilitation, and construction of fire breaks; and

(D)

grazing related activities, such as fencing and livestock watering.

(2)

Prohibitions

The terms and conditions of a rental contract or easement under the program shall prohibit—

(A)

the production of crops (other than hay), fruit trees, vineyards, or any other agricultural commodity that is inconsistent with maintaining grazing land; and

(B)

except as permitted under a restoration plan, the conduct of any other activity that would be inconsistent with maintaining grazing land enrolled in the program.

(3)

Additional terms and conditions

A rental contract or easement under the program shall include such additional provisions as the Secretary determines are appropriate to carry out or facilitate the purposes and administration of the program.

(e)

Violations

On a violation of the terms or conditions of a rental contract, easement, or restoration agreement entered into under this section—

(1)

the contract or easement shall remain in force; and

(2)

the Secretary may require the owner or operator to refund all or part of any payments received under the program, with interest on the payments as determined appropriate by the Secretary.

1238P.

Duties of Secretary

(a)

Evaluation and ranking of applications

(1)

Criteria

The Secretary shall establish criteria to evaluate and rank applications for rental contracts and easements under the program .

(2)

Considerations

In establishing the criteria, the Secretary shall emphasize support for—

(A)

grazing operations;

(B)

plant and animal biodiversity; and

(C)

grassland, land that contains forbs, and shrubland under the greatest threat of conversion to uses other than grazing.

(b)

Payments

(1)

In general

In return for the execution of a rental contract or the granting of an easement by an owner or operator under the program, the Secretary shall—

(A)

make rental contract or easement payments to the owner or operator in accordance with paragraphs (2) and (3); and

(B)

make payments to the owner or operator under a restoration agreement for the Federal share of the cost of restoration in accordance with paragraph (4).

(2)

Rental contract payments

(A)

Percentage of grazing value of land

In return for the execution of a rental contract by an owner or operator under the program, the Secretary shall make annual payments during the term of the contract in an amount, subject to subparagraph (B), that is not more than 75 percent of the grazing value of the land covered by the contract.

(B)

Payment limitation

Payments made under 1 or more rental contracts to a person or legal entity, directly or indirectly, may not exceed, in the aggregate, $50,000 per year.

(3)

Easement payments

(A)

In general

Subject to subparagraph (B), in return for the granting of an easement by an owner under the program, the Secretary shall make easement payments in an amount not to exceed the fair market value of the land less the grazing value of the land encumbered by the easement.

(B)

Method for determination of compensation

In making a determination under subparagraph (A), the Secretary shall pay as compensation for a easement acquired under the program the lowest of—

(i)

the fair market value of the land encumbered by the easement, as determined by the Secretary, using—

(I)

the Uniform Standards of Professional Appraisal Practices; or

(II)

an area-wide market analysis or survey;

(ii)

the amount corresponding to a geographical cap, as determined by the Secretary in regulations; or

(iii)

the offer made by the landowner.

(C)

Schedule

Easement payments may be provided in up to 10 annual payments of equal or unequal amount, as agreed to by the Secretary and the owner.

(4)

Restoration agreement payments

(A)

Federal share of restoration

The Secretary shall make payments to an owner or operator under a restoration agreement of not more than 50 percent of the costs of carrying out measures and practices necessary to restore functions and values of that land.

(B)

Payment limitation

Payments made under 1 or more restoration agreements to a person or legal entity, directly or indirectly, may not exceed, in the aggregate, $50,000 per year.

(5)

Payments to others

If an owner or operator who is entitled to a payment under the program dies, becomes incompetent, is otherwise unable to receive the payment, or is succeeded by another person who renders or completes the required performance, the Secretary shall make the payment, in accordance with regulations promulgated by the Secretary and without regard to any other provision of law, in such manner as the Secretary determines is fair and reasonable in light of all the circumstances.

1238Q.

Delegation of duty

(a)

Authority to delegate

The Secretary may delegate a duty under the program—

(1)

by transferring title of ownership to an easement to an eligible entity to hold and enforce; or

(2)

by entering into a cooperative agreement with an eligible entity for the eligible entity to own, write, and enforce an easement.

(b)

Eligible entity defined

In this section, the term eligible entity means—

(1)

an agency of State or local government or an Indian tribe; or

(2)

an organization that—

(A)

is organized for, and at all times since the formation of the organization has been operated principally for, one or more of the conservation purposes specified in clause (i), (ii), (iii), or (iv) of section 170(h)(4)(A) of the Internal Revenue Code of 1986;

(B)

is an organization described in section 501(c)(3) of that Code that is exempt from taxation under section 501(a) of that Code; and

(C)

is described in—

(i)

paragraph (1) or (2) of section 509(a) of that Code; or

(ii)

in section 509(a)(3) of that Code, and is controlled by an organization described in section 509(a)(2) of that Code.

(c)

Transfer of title of ownership

(1)

Transfer

The Secretary may transfer title of ownership to an easement to an eligible entity to hold and enforce, in lieu of the Secretary, subject to the right of the Secretary to conduct periodic inspections and enforce the easement, if—

(A)

the Secretary determines that the transfer will promote protection of grassland, land that contains forbs, or shrubland;

(B)

the owner authorizes the eligible entity to hold or enforce the easement; and

(C)

the eligible entity agrees to assume the costs incurred in administering and enforcing the easement, including the costs of restoration or rehabilitation of the land as specified by the owner and the eligible entity.

(2)

Application

An eligible entity that seeks to hold and enforce an easement shall apply to the Secretary for approval.

(3)

Approval by secretary

The Secretary may approve an application described in paragraph (2) if the eligible entity—

(A)

has the relevant experience necessary, as appropriate for the application, to administer an easement on grassland, land that contains forbs, or shrubland;

(B)

has a charter that describes a commitment to conserving ranchland, agricultural land, or grassland for grazing and conservation purposes; and

(C)

has the resources necessary to effectuate the purposes of the charter.

(d)

Cooperative agreements

(1)

Authorized; terms and conditions

The Secretary shall establish the terms and conditions of a cooperative agreement under which an eligible entity shall use funds provided by the Secretary to own, write, and enforce an easement, in lieu of the Secretary.

(2)

Minimum requirements

At a minimum, the cooperative agreement shall—

(A)

specify the qualification of the eligible entity to carry out the entity’s responsibilities under the program, including acquisition, monitoring, enforcement, and implementation of management policies and procedures that ensure the long-term integrity of the easement protections;

(B)

require the eligible entity to assume the costs incurred in administering and enforcing the easement, including the costs of restoration or rehabilitation of the land as specified by the owner and the eligible entity;

(C)

specify the right of the Secretary to conduct periodic inspections to verify the eligible entity’s enforcement of the easement;

(D)

subject to subparagraph (E), identify a specific project or a range of projects to be funded under the agreement;

(E)

allow, upon mutual agreement of the parties, substitution of qualified projects that are identified at the time of substitution;

(F)

specify the manner in which the eligible entity will evaluate and report the use of funds to the Secretary;

(G)

allow the eligible entity flexibility to develop and use terms and conditions for easements, if the Secretary finds the terms and conditions consistent with the purposes of the program and adequate to enable effective enforcement of the easements;

(H)

if applicable, allow an eligible entity to include a charitable donation or qualified conservation contribution (as defined by section 170(h) of the Internal Revenue Code of 1986) from the landowner from which the easement will be purchased as part of the entity’s share of the cost to purchase an easement; and

(I)

provide for a schedule of payments to an eligible entity, as agreed to by the Secretary and the eligible entity.

(3)

Cost sharing

(A)

In general

As part of a cooperative agreement with an eligible entity under this subsection, the Secretary may provide a share of the purchase price of an easement under the program.

(B)

Minimum share by eligible entity

The eligible entity shall be required to provide a share of the purchase price at least equivalent to that provided by the Secretary.

(C)

Priority

The Secretary may accord a higher priority to proposals from eligible entities that leverage a greater share of the purchase price of the easement.

(4)

Violation

If an eligible entity violates the terms or conditions of a cooperative agreement entered into under this subsection—

(A)

the cooperative agreement shall remain in force; and

(B)

the Secretary may require the eligible entity to refund all or part of any payments received by the eligible entity under the program, with interest on the payments as determined appropriate by the Secretary.

(e)

Protection of Federal investment

When delegating a duty under this section, the Secretary shall ensure that the terms of an easement include a contingent right of enforcement for the Department.

.

F

Environmental Quality Incentives Program

2501.

Purposes of environmental quality incentives program

(a)

Revised purposes

Section 1240 of the Food Security Act of 1985 (16 U.S.C. 3839aa) is amended—

(1)

in the matter preceding paragraph (1), by inserting , forest management, after agricultural production; and

(2)

by striking paragraphs (3) and (4) and inserting the following new paragraphs:

(3)

providing flexible assistance to producers to install and maintain conservation practices that sustain food and fiber production while—

(A)

enhancing soil, water, and related natural resources, including grazing land, forestland, wetland, and wildlife; and

(B)

conserving energy;

(4)

assisting producers to make beneficial, cost effective changes to production systems (including conservation practices related to organic production), grazing management, fuels management, forest management, nutrient management associated with livestock, pest or irrigation management, or other practices on agricultural and forested land; and

.

(b)

Technical correction

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

4

Environmental Quality Incentives Program

.

2502.

Definitions

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

1240A.

Definitions

In this chapter:

(1)

Eligible land

(A)

In general

The term eligible land means land on which agricultural commodities, livestock, or forest-related products are produced.

(B)

Inclusions

The term eligible land includes the following:

(i)

Cropland.

(ii)

Grassland.

(iii)

Rangeland.

(iv)

Pasture land.

(v)

Nonindustrial private forest land.

(vi)

Other agricultural land (including cropped woodland, marshes, and agricultural land used for the production of livestock) on which resource concerns related to agricultural production could be addressed through a contract under the program, as determined by the Secretary.

(2)

National organic program

The term national organic program means the national organic program established under the Organic Foods Production Act of 1990 (7 U.S.C. 6501 et. seq.).

(3)

Organic system plan

The term organic system plan means an organic plan approved under the national organic program.

(4)

Payment

The term payment means financial assistance provided to a producer for performing practices under this chapter, including compensation for—

(A)

incurred costs associated with planning, design, materials, equipment, installation, labor, management, maintenance, or training; and

(B)

income forgone by the producer.

(5)

Practice

The term practice means 1 or more improvements and conservation activities that are consistent with the purposes of the program under this chapter, as determined by the Secretary, including—

(A)

improvements to eligible land of the producer, including—

(i)

structural practices;

(ii)

land management practices;

(iii)

vegetative practices;

(iv)

forest management; and

(v)

other practices that the Secretary determines would further the purposes of the program; and

(B)

conservation activities involving the development of plans appropriate for the eligible land of the producer, including—

(i)

comprehensive nutrient management planning; and

(ii)

other plans that the Secretary determines would further the purposes of the program under this chapter.

(6)

Program

The term program means the environmental quality incentives program established by this chapter.

.

2503.

Establishment and administration of environmental quality incentives program

Section 1240B of the Food Security Act of 1985 (16 U.S.C. 3839aa–2) is amended to read as follows:

1240B.

Establishment and administration

(a)

Establishment

During each of the 2002 through 2012 fiscal years, the Secretary shall provide payments to producers that enter into contracts with the Secretary under the program.

(b)

Practices and Term

(1)

Practices

A contract under the program may apply to the performance of one or more practices.

(2)

Term

A contract under the program shall have a term that—

(A)

at a minimum, is equal to the period beginning on the date on which the contract is entered into and ending on the date that is one year after the date on which all practices under the contract have been implemented; but

(B)

not to exceed 10 years.

(c)

Bidding down

If the Secretary determines that the environmental values of two or more applications for payments are comparable, the Secretary shall not assign a higher priority to the application only because it would present the least cost to the program.

(d)

Payments

(1)

Availability of payments

Payments are provided to a producer to implement one or more practices under the program.

(2)

Limitation on payment amounts

A payment to a producer for performing a practice may not exceed, as determined by the Secretary—

(A)

75 percent of the costs associated with planning, design, materials, equipment, installation, labor, management, maintenance, or training;

(B)

100 percent of income foregone by the producer; or

(C)

in the case of a practice consisting of elements covered under subparagraphs (A) and (B)—

(i)

75 percent of the costs incurred for those elements covered under subparagraph (A); and

(ii)

100 percent of income foregone for those elements covered under subparagraph (B).

(3)

Special rule involving payments for foregone income

In determining the amount and rate of payments under paragraph (2)(B), the Secretary may accord great significance to a practice that, as determined by the Secretary, promotes—

(A)

residue management;

(B)

nutrient management;

(C)

air quality management;

(D)

invasive species management;

(E)

pollinator habitat;

(F)

animal carcass management technology; or

(G)

pest management.

(4)

Increased Payments For Certain Producers

(A)

In general

Notwithstanding paragraph (2), in the case of a producer that is a limited resource, socially disadvantaged farmer or rancher or a beginning farmer or rancher, the Secretary shall increase the amount that would otherwise be provided to a producer under this subsection—

(i)

to not more than 90 percent of the costs associated with planning, design, materials, equipment, installation, labor, management, maintenance, or training; and

(ii)

to not less than 25 percent above the otherwise applicable rate.

(B)

Advance payments

Not more than 30 percent of the amount determined under subparagraph (A) may be provided in advance for the purpose of purchasing materials or contracting.

(5)

Financial assistance from other sources

Except as provided in paragraph (6), any payments received by a producer from a State or private organization or person for the implementation of one or more practices on eligible land of the producer shall be in addition to the payments provided to the producer under this subsection.

(6)

Other payments

A producer shall not be eligible for payments for practices on eligible land under the program if the producer receives payments or other benefits for the same practice on the same land under another program under this subtitle.

(e)

Modification or Termination of Contracts

(1)

Voluntary modification or termination

The Secretary may modify or terminate a contract entered into with a producer under the program if—

(A)

the producer agrees to the modification or termination; and

(B)

the Secretary determines that the modification or termination is in the public interest.

(2)

Involuntary termination

The Secretary may terminate a contract under the program if the Secretary determines that the producer violated the contract.

(f)

Allocation of funding

For each of fiscal years 2002 through 2012, 60 percent of the funds made available for payments under the program shall be targeted at practices relating to livestock production.

(g)

Funding for federally recognized native american indian tribes and alaska native corporations

The Secretary may enter into alternative funding arrangements with federally recognized Native American Indian Tribes and Alaska Native Corporations (including their affiliated membership organizations) if the Secretary determines that the goals and objectives of the program will be met by such arrangements, and that statutory limitations regarding contracts with individual producers will not be exceeded by any Tribal or Native Corporation member.

(h)

Water Conservation or Irrigation Efficiency Practice

(1)

Availability of payments

The Secretary may provide payments under this subsection to a producer for a water conservation or irrigation practice.

(2)

Priority

In providing payments to a producer for a water conservation or irrigation practice, the Secretary shall give priority to applications in which—

(A)

consistent with the law of the State in which the eligible land of the producer is located, there is a reduction in water use in the operation of the producer; or

(B)

the producer agrees not to use any associated water savings to bring new land, other than incidental land needed for efficient operations, under irrigated production, unless the producer is participating in a watershed-wide project that will effectively conserve water, as determined by the Secretary.

(i)

Payments for conservation practices related to organic production

(1)

Payments authorized

The Secretary shall provide payments under this subsection for conservation practices, on some or all of the operations of a producer, related—

(A)

to organic production; and

(B)

to the transition to organic production.

(2)

Eligibility requirements

As a condition for receiving payments under this subsection, a producer shall agree—

(A)

to develop and carry out an organic system plan; or

(B)

to develop and implement conservation practices for certified organic production that are consistent with an organic system plan and the purposes of this chapter.

(3)

Payment limitations

Payments under this subsection to a person or legal entity, directly or indirectly, may not exceed, in the aggregate, $20,000 per year or $80,000 during any 6-year period. In applying these limitations, the Secretary shall not take into account payments received for technical assistance.

(4)

Exclusion of certain organic certification costs

Payments may not be made under this subsection to cover the costs associated with organic certification that are eligible for cost-share payments under section 10606 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 6523).

(5)

Termination of contracts

The Secretary may cancel or otherwise nullify a contract to provide payments under this subsection if the Secretary determines that the producer—

(A)

is not pursuing organic certification; or

(B)

is not in compliance with the Organic Foods Production Act of 1990 (7 U.S.C. 6501 et seq).

.

2504.

Evaluation of applications

Section 1240C of the Food Security Act of 1985 (16 U.S.C. 3839aa–3) is amended to read as follows:

1240C.

Evaluation of applications

(a)

Evaluation criteria

The Secretary shall develop criteria for evaluating applications that will ensure that national, State, and local conservation priorities are effectively addressed.

(b)

Prioritization of applications

In evaluating applications under this chapter, the Secretary shall prioritize applications—

(1)

based on their overall level of cost-effectiveness to ensure that the conservation practices and approaches proposed are the most efficient means of achieving the anticipated environmental benefits of the project;

(2)

based on how effectively and comprehensively the project addresses the designated resource concern or resource concerns;

(3)

that best fulfill the purpose of the environmental quality incentives program specified in section 1240(1); and

(4)

that improve conservation practices or systems in place on the operation at the time the contract offer is accepted or that will complete a conservation system.

(c)

Grouping of applications

To the greatest extent practicable, the Secretary shall group applications of similar crop or livestock operations for evaluation purposes or otherwise evaluate applications relative to other applications for similar farming operations.

.

2505.

Duties of producers under environmental quality incentives program

Section 1240D of the Food Security Act of 1985 (16 U.S.C. 3839aa–4) is amended—

(1)

in the matter preceding paragraph (1), by striking technical assistance, cost-share payments, or incentive;

(2)

in paragraph (2), by striking farm or ranch and inserting farm, ranch, or forest land; and

(3)

in paragraph (4), by striking cost-share payments and incentive.

2506.

Environmental quality incentives program plan

(a)

Plan of operations

Section 1240E(a) of the Food Security Act of 1985 (16 U.S.C. 3839aa–5(a)) is amended—

(1)

in the subsection heading, by striking In general and inserting Plan of operations;

(2)

in matter preceding paragraph (1), by striking cost-share payments or incentive;

(3)

in paragraph (2), by striking and after the semicolon at the end;

(4)

in paragraph (3), by striking the period at the end and inserting ; and; and

(5)

by adding at the end the following new paragraph:

(4)

in the case of forest land, is consistent with the provisions of a forest management plan that is approved by the Secretary, which may include—

(A)

a forest stewardship plan described in section 5 of the Cooperative Forestry Assistance Act of 1978 (16 U.S.C. 2103a);

(B)

another practice plan approved by the State forester; or

(C)

another plan determined appropriate by the Secretary.

.

(b)

Avoidance of Duplication

Subsection (b) of section 1240E of the Food Security Act of 1985 (16 U.S.C. 3839aa–5) is amended to read as follows:

(b)

Avoidance of Duplication

The Secretary shall—

(1)

consider a plan developed in order to acquire a permit under a water or air quality regulatory program as the equivalent of a plan of operations under subsection (a), if the plan contains elements equivalent to those elements required by a plan of operations; and

(2)

to the maximum extent practicable, eliminate duplication of planning activities under the program under this chapter and comparable conservation programs.

.

2507.

Duties of the Secretary

Section 1240F(1) of the Food Security Act of 1985 (16 U.S.C. 3839aa–6(1)) is amended by striking cost-share payments or incentive.

2508.

Limitation on environmental quality incentives program payments

Section 1240G of the Food Security Act of 1985 (16 U.S.C. 3839aa–7) is amended—

(1)

by striking An individual or entity and inserting (a) Limitation.—Subject to subsection (b), a person or legal entity;

(2)

by striking $450,000 and inserting $300,000;

(3)

by striking the individual both places it appears and inserting the person; and

(4)

by adding at the end the following new subsection:

(b)

Waiver authority

In the case of contracts under this chapter for projects of special environmental significance (including projects involving methane digesters), as determined by the Secretary, the Secretary may—

(1)

waive the limitation otherwise applicable under subsection (a); and

(2)

raise the limitation to not more than $450,000 during any six-year period.

.

2509.

Conservation innovation grants and payments

Section 1240H of the Food Security Act of 1985 (16 U.S.C. 3839aa–8) is amended to read as follows:

1240H.

Conservation innovation grants and payments

(a)

Competitive grants for innovative conservation approaches

(1)

Grants

Out of the funds made available to carry out this chapter, the Secretary may pay the cost of competitive grants that are intended to stimulate innovative approaches to leveraging the Federal investment in environmental enhancement and protection, in conjunction with agricultural production or forest resource management, through the program.

(2)

Use

The Secretary may provide grants under this subsection to governmental and non-governmental organizations and persons, on a competitive basis, to carry out projects that—

(A)

involve producers who are eligible for payments or technical assistance under the program;

(B)

leverage Federal funds made available to carry out the program under this chapter with matching funds provided by State and local governments and private organizations to promote environmental enhancement and protection in conjunction with agricultural production;

(C)

ensure efficient and effective transfer of innovative technologies and approaches demonstrated through projects that receive funding under this section, such as market systems for pollution reduction and practices for the storage of carbon in soil; and

(D)

provide environmental and resource conservation benefits through increased participation by producers of specialty crops.

(b)

Air quality concerns from agricultural operations

(1)

Implementation assistance

The Secretary shall provide payments under this subsection to producers to implement practices to address air quality concerns from agricultural operations and to meet Federal, State, and local regulatory requirements. The funds shall be made available on the basis of air quality concerns in a State and shall be used to provide payments to producers that are cost effective and reflect innovative technologies.

(2)

Funding

Of the funds made available to carry out this chapter, the Secretary shall carry out this subsection using $37,500,000 for each of fiscal years 2009 through 2012.

.

2510.

Agricultural water enhancement program

Section 1240I of the Food Security Act of 1985 (16 U.S.C. 3839aa–9) is amended to read as follows:

1240I.

Agricultural water enhancement program

(a)

Definitions

In this section:

(1)

Agricultural water enhancement activity

The term agricultural water enhancement activity includes the following activities carried out with respect to agricultural land:

(A)

Water quality or water conservation plan development, including resource condition assessment and modeling.

(B)

Water conservation restoration or enhancement projects, including conversion to the production of less water-intensive agricultural commodities or dryland farming.

(C)

Water quality or quantity restoration or enhancement projects.

(D)

Irrigation system improvement and irrigation efficiency enhancement.

(E)

Activities designed to mitigate the effects of drought.

(F)

Related activities that the Secretary determines will help achieve water quality or water conservation benefits on agricultural land.

(2)

Partner

The term partner means an entity that enters into a partnership agreement with the Secretary to carry out agricultural water enhancement activities on a regional basis, including—

(A)

an agricultural or silvicultural producer association or other group of such producers;

(B)

a State or unit of local government; or

(C)

a federally recognized Indian tribe.

(3)

Partnership agreement

The term partnership agreement means an agreement between the Secretary and a partner.

(4)

Program

The term program means the agricultural water enhancement program established under subsection (b).

(b)

Establishment of program

Beginning in fiscal year 2009, the Secretary shall carry out, in accordance with this section and using such procedures as the Secretary determines to be appropriate, an agricultural water enhancement program as part of the environmental quality incentives program to promote ground and surface water conservation and improve water quality on agricultural lands—

(1)

by entering into contracts with, and making payments to, producers to carry out agricultural water enhancement activities; or

(2)

by entering into partnership agreements with partners, in accordance with subsection (c), on a regional level to benefit working agricultural land.

(c)

Partnership agreements

(1)

Agreements authorized

The Secretary may enter into partnership agreements to meet the objectives of the program described in subsection (b).

(2)

Applications

An application to the Secretary to enter into a partnership agreement under paragraph (1) shall include the following:

(A)

A description of the geographical area to be covered by the partnership agreement.

(B)

A description of the agricultural water quality or water conservation issues to be addressed by the partnership agreement.

(C)

A description of the agricultural water enhancement objectives to be achieved through the partnership.

(D)

A description of the partners collaborating to achieve the project objectives and the roles, responsibilities, and capabilities of each partner.

(E)

A description of the program resources, including payments the Secretary is requested to make.

(F)

Such other such elements as the Secretary considers necessary to adequately evaluate and competitively select applications for partnership agreements.

(3)

Duties of partners

A partner under a partnership agreement shall—

(A)

identify producers participating in the project and act on their behalf in applying for the program;

(B)

leverage funds provided by the Secretary with additional funds to help achieve project objectives;

(C)

conduct monitoring and evaluation of project effects; and

(D)

at the conclusion of the project, report to the Secretary on project results.

(d)

Agricultural water enhancement activities by producers

The Secretary shall select agricultural water enhancement activities proposed by producers according to applicable requirements under the environmental quality incentives program.

(e)

Agricultural water enhancement activities by partners

(1)

Competitive process

The Secretary shall conduct a competitive process to select partners. In carrying out the process, the Secretary shall make public the criteria used in evaluating applications.

(2)

Authority to give priority to certain proposals

The Secretary may give a higher priority to proposals from partners that—

(A)

include high percentages of agricultural land and producers in a region or other appropriate area;

(B)

result in high levels of applied agricultural water quality and water conservation activities;

(C)

significantly enhance agricultural activity;

(D)

allow for monitoring and evaluation; and

(E)

assist producers in meeting a regulatory requirement that reduces the economic scope of the producer’s operation.

(3)

Priority to proposals from states with water quantity concerns

The Secretary shall give a higher priority to proposals from partners that—

(A)

include the conversion of agricultural land from irrigated farming to dryland farming;

(B)

leverage Federal funds provided under the program with funds provided by partners; and

(C)

assist producers in States with water quantity concerns, as determined by the Secretary.

(4)

Administration

In carrying out this subsection, the Secretary shall—

(A)

accept qualified applications—

(i)

directly from partners applying on behalf of producers; or

(ii)

from producers applying through a partner as part of a regional agricultural water enhancement project; and

(B)

ensure that resources made available for regional agricultural water enhancement activities are delivered in accordance with applicable program rules.

(f)

Areas experiencing exceptional drought

Notwithstanding the purposes described in section 1240, the Secretary shall consider as an eligible agricultural water enhancement activity the use of a water impoundment to capture surface water runoff on agricultural land if the agricultural water enhancement activity—

(1)

is located in an area that is experiencing or has experienced exceptional drought conditions during the previous two calendar years; and

(2)

will capture surface water runoff through the construction, improvement, or maintenance of irrigation ponds or small, on-farm reservoirs.

(g)

Waiver authority

To assist in the implementation of agricultural water enhancement activities under the program, the Secretary shall waive the applicability of the limitation in section 1001D(b)(2)(B) of this Act for participating producers if the Secretary determines that the waiver is necessary to fulfill the objectives of the program.

(h)

Payments under program

(1)

In general

The Secretary shall provide appropriate payments to producers participating in agricultural water enhancement activities in an amount determined by the secretary to be necessary to achieve the purposes of the program described in subsection (b).

(2)

Payments to producers in states with water quantity concerns

The Secretary shall provide payments for a period of five years to producers participating in agricultural water enhancement activities under proposals described in subsection (e)(3) in an amount sufficient to encourage producers to convert from irrigated farming to dryland farming.

(i)

Consistency with state law

Any agricultural water enhancement activity conducted under the program shall be conducted in a manner consistent with State water law.

(j)

Funding

(1)

Availability of funds

In addition to funds made available to carry out this chapter under section 1241(a), the Secretary shall carry out the program using, of the funds of the Commodity Credit Corporation—

(A)

$73,000,000 for each of fiscal years 2009 and 2010;

(B)

$74,000,000 for fiscal year 2011; and

(C)

$60,000,000 for fiscal year 2012 and each fiscal year thereafter.

(2)

Limitation on administrative expenses

None of the funds made available for regional agricultural water conservation activities under the program may be used to pay for the administrative expenses of partners.

.

G

Other Conservation Programs of the Food Security Act of 1985

2601.

Conservation of private grazing land

Section 1240M(e) of the Food Security Act of 1985 (16 U.S.C. 3839bb(e)) is amended by striking 2007 and inserting 2012.

2602.

Wildlife habitat incentive program

(a)

Eligibility

Section 1240N of the Food Security Act of 1985 (16 U.S.C. 3839bb–1) is amended—

(1)

in subsection (a), by inserting before the period at the end the following: for the development of wildlife habitat on private agricultural land, nonindustrial private forest land, and tribal lands.

(2)

in subsection (b)(1), by striking landowners and inserting owners of lands referred to in subsection (a).

(b)

Inclusion of pivot corners and irregular areas

Section 1240N(b)(1)(E) of the Food Security Act of 1985 (16 U.S.C. 3839bb–1(b)(1)(E)) is amended by inserting before the period at the end the following: , including habitat developed on pivot corners and irregular areas.

(c)

Cost share for long-term agreements

Section 1240N(b)(2)(B) of the Food Security Act of 1985 (16 U.S.C. 3839bb–1(b)(2)(B)) is amended by striking 15 percent and inserting 25 percent.

(d)

Priority for certain conservation initiatives; payment limitation

Section 1240N of the Food Security Act of 1985 (16 U.S.C. 3839bb–1) is amended by adding at the end the following new subsections:

(d)

Priority for certain conservation initiatives

In carrying out this section, the Secretary may give priority to projects that would address issues raised by State, regional, and national conservation initiatives.

(e)

Payment limitation

Payments made to a person or legal entity, directly or indirectly, under the program may not exceed, in the aggregate, $50,000 per year.

.

2603.

Grassroots source water protection program

Section 1240O(b) of the Food Security Act of 1985 (16 U.S.C. 3839bb–2(b)) is amended by striking $5,000,000 for each of fiscal years 2002 through 2007 and inserting $20,000,000 for each of fiscal years 2008 through 2012.

2604.

Great Lakes Basin Program for soil erosion and sediment control

Section 1240P of the Food Security Act of 1985 (16 U.S.C. 3839bb–3) is amended to read as follows:

1240P.

Great Lakes Basin Program for soil erosion and sediment control

(a)

Program authorized

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

(b)

Consultation and cooperation

The Secretary shall carry out the program in consultation with the Great Lakes Commission created by Article IV of the Great Lakes Basin Compact (82 Stat. 415) and in cooperation with the Administrator of the Environmental Protection Agency and the Secretary of the Army.

(c)

Assistance

In carrying out the program, the Secretary may—

(1)

provide project demonstration grants, provide technical assistance, and carry out information and educational programs to improve water quality in the Great Lakes basin by reducing soil erosion and improving sediment control; and

(2)

establish a priority for projects and activities that—

(A)

directly reduce soil erosion or improve sediment control;

(B)

reduce soil loss in degraded rural watersheds; or

(C)

improve water quality for downstream watersheds.

(d)

Authorization of Appropriations

There is authorized to be appropriated to the Secretary to carry out the program $5,000,000 for each of fiscal years 2008 through 2012.

.

2605.

Chesapeake Bay watershed program

Chapter 5 of subtitle D of title XII of the Food Security Act of 1985 is amended by inserting after section 1240P (16 U.S.C. 3839bb–3) the following new section:

1240Q.

Chesapeake Bay watershed

(a)

Chesapeake Bay watershed defined

In this section, the term Chesapeake Bay watershed means all tributaries, backwaters, and side channels, including their watersheds, draining into the Chesapeake Bay.

(b)

Establishment and Purpose

The Secretary shall assist producers in implementing conservation activities on agricultural lands in the Chesapeake Bay watershed for the purposes of—

(1)

improving water quality and quantity in the Chesapeake Bay watershed; and

(2)

restoring, enhancing, and preserving soil, air, and related resources in the Chesapeake Bay watershed.

(c)

Conservation activities

The Secretary shall deliver the funds made available to carry out this section through applicable programs under this subtitle to assist producers in enhancing land and water resources—

(1)

by controlling erosion and reducing sediment and nutrient levels in ground and surface water; and

(2)

by planning, designing, implementing, and evaluating habitat conservation, restoration, and enhancement measures where there is significant ecological value if the lands are—

(A)

retained in their current use; or

(B)

restored to their natural condition.

(d)

Agreements

(1)

In general

The Secretary shall—

(A)

enter into agreements with producers to carry out the purposes of this section; and

(B)

use the funds made available to carry out this section to cover the costs of the program involved with each agreement.

(2)

Special considerations

In entering into agreements under this subsection, the Secretary shall give special consideration to, and begin evaluating, applications with producers in the following river basins:

(A)

The Susquehanna River.

(B)

The Shenandoah River.

(C)

The Potomac River (including North and South Potomac).

(D)

The Patuxent River.

(e)

Duties of the Secretary

In carrying out the purposes in this section, the Secretary shall—

(1)

where available, use existing plans, models, and assessments to assist producers in implementing conservation activities; and

(2)

proceed expeditiously with the implementation of any agreement with a producer that is consistent with State strategies for the restoration of the Chesapeake Bay watershed.

(f)

Consultation

The Secretary, in consultation with appropriate Federal agencies, shall ensure conservation activities carried out under this section complement Federal and State programs, including programs that address water quality, in the Chesapeake Bay watershed.

(g)

Sense of Congress Regarding Chesapeake Bay Executive Council

It is the sense of Congress that the Secretary should be a member of the Chesapeake Bay Executive Council, and is authorized to do so under section 1(3) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590a(3)).

(h)

Funding

(1)

Availability

Of the funds of the Commodity Credit Corporation, the Secretary shall use, to the maximum extent practicable—

(A)

$23,000,000 for fiscal year 2009;

(B)

$43,000,000 for fiscal year 2010;

(C)

$72,000,000 for fiscal year 2011; and

(D)

$50,000,000 for fiscal year 2012.

(2)

Duration of availability

Funds made available under paragraph (1) shall remain available until expended.

2606.

Voluntary public access and habitat incentive program

Chapter 5 of subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3839bb et seq.) is amended by inserting after section 1240Q, as added by section 2605, the following new section:

1240R.

Voluntary public access and habitat incentive program

(a)

Establishment

The Secretary shall establish a voluntary public access program under which States and tribal governments may apply for grants to encourage owners and operators of privately-held farm, ranch, and forest land to voluntarily make that land available for access by the public for wildlife-dependent recreation, including hunting or fishing under programs administered by the States and tribal governments.

(b)

Applications

In submitting applications for a grant under the program, a State or tribal government shall describe—

(1)

the benefits that the State or tribal government intends to achieve by encouraging public access to private farm and ranch land for—

(A)

hunting and fishing; and

(B)

to the maximum extent practicable, other recreational purposes; and

(2)

the methods that will be used to achieve those benefits.

(c)

Priority

In approving applications and awarding grants under the program, the Secretary shall give priority to States and tribal governments that propose—

(1)

to maximize participation by offering a program the terms of which are likely to meet with widespread acceptance among landowners;

(2)

to ensure that land enrolled under the State or tribal government program has appropriate wildlife habitat;

(3)

to strengthen wildlife habitat improvement efforts on land enrolled in a special conservation reserve enhancement program described in section 1234(f)(4) by providing incentives to increase public hunting and other recreational access on that land;

(4)

to use additional Federal, State, tribal government, or private resources in carrying out the program; and

(5)

to make available to the public the location of land enrolled.

(d)

Relationship to other laws

(1)

No preemption

Nothing in this section preempts a State or tribal government law, including any State or tribal government liability law.

(2)

Effect of inconsistent opening dates for migratory bird hunting

The Secretary shall reduce by 25 percent the amount of a grant otherwise determined for a State under the program if the opening dates for migratory bird hunting in the State are not consistent for residents and non-residents.

(e)

Regulations

The Secretary shall promulgate such regulations as are necessary to carry out this section.

(f)

Funding

Of the funds of the Commodity Credit Corporation, the Secretary shall use, to the maximum extent practicable, $50,000,000 for the period of fiscal years 2009 through 2012.

.

H

Funding and Administration of Conservation Programs

2701.

Funding of conservation programs under Food Security Act of 1985

(a)

In general

Section 1241(a) of the Food Security Act of 1985 (16 U.S.C. 3841(a)) is amended in the matter preceding paragraph (1), by striking 2007 and inserting 2012.

(b)

Conservation reserve program

Paragraph (1) of section 1241(a) of the Food Security Act of 1985 (16 U.S.C. 3841(a)) is amended by striking the period at the end and inserting the following:

, including to the maximum extent practicable—

(A)

$100,000,000 for the period of fiscal years 2009 through 2012 to provide cost share payments under paragraph (3) of section 1234(b) in connection with thinning activities conducted on land described in subparagraph (A)(iii) of such paragraph; and

(B)

$25,000,000 for the period of fiscal years 2009 through 2012 to carry out section 1235(f) to facilitate the transfer of land subject to contracts from retired or retiring owners and operators to beginning farmers or ranchers and socially disadvantaged farmers or ranchers.

.

(c)

Conservation security and conservation stewardship programs

Paragraph (3) of section 1241(a) of the Food Security Act of 1985 (16 U.S.C. 3841(a)) is amended to read as follows:

(3)
(A)

Conservation security program

The conservation security program under subchapter A of chapter 2, using such sums as are necessary to administer contracts entered into before September 30, 2008.

(B)

Conservation stewardship program

The conservation stewardship program under subchapter B of chapter 2.

.

(d)

Farmland protection program

Paragraph (4) of section 1241(a) of the Food Security Act of 1985 (16 U.S.C. 3841(a)) is amended to read as follows:

(4)

The farmland protection program under subchapter C of chapter 2, using, to the maximum extent practicable—

(A)

$97,000,000 in fiscal year 2008;

(B)

$121,000,000 in fiscal year 2009;

(C)

$150,000,000 in fiscal year 2010;

(D)

$175,000,000 in fiscal year 2011; and

(E)

$200,000,000 in fiscal year 2012.

.

(e)

Grassland reserve program

Paragraph (5) of section 1241(a) of the Food Security Act of 1985 (16 U.S.C. 3841(a)) is amended to read as follows:

(5)

The grassland reserve program under subchapter D of chapter 2.

.

(f)

Environmental quality incentives program

Paragraph (6) of section 1241(a) of the Food Security Act of 1985 (16 U.S.C. 3841(a)) is amended to read as follows:

(6)

The environmental quality incentives program under chapter 4, using, to the maximum extent practicable—

(A)

$1,200,000,000 in fiscal year 2008;

(B)

$1,337,000,000 in fiscal year 2009;

(C)

$1,450,000,000 in fiscal year 2010;

(D)

$1,588,000,000 in fiscal year 2011; and

(E)

$1,750,000,000 in fiscal year 2012.

.

(g)

Wildlife habitat incentives program

Paragraph (7)(D) of section 1241(a) of the Food Security Act of 1985 (16 U.S.C. 3841(a)) is amended by striking 2007 and inserting 2012.

2702.

Authority to accept contributions to support conservation programs

Section 1241 of the Food