[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 785 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 785

  To amend the Food Security Act of 1985 to require the Secretary of 
   Agriculture to establish a carbon sequestration program to permit 
   owners and operators of land to enroll the land in the program to 
     increase the sequestration of carbon, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 26, 2001

Mr. Brownback (for himself, Mr. Murkowski, and Mr. Johnson) introduced 
the following bill; which was read twice and referred to the Committee 
                on Agriculture, Nutrition, and Forestry

_______________________________________________________________________

                                 A BILL


 
  To amend the Food Security Act of 1985 to require the Secretary of 
   Agriculture to establish a carbon sequestration program to permit 
   owners and operators of land to enroll the land in the program to 
     increase the sequestration of carbon, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Carbon Conservation Incentive Act''.

SEC. 2. ESTABLISHMENT.

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

               ``CHAPTER 2--CARBON SEQUESTRATION PROGRAM

``SEC. 1238. CARBON SEQUESTRATION PROGRAM.

    ``(a) In General.--Effective beginning with the 2002 calendar year, 
the Secretary, acting through the Chief of the Natural Resources 
Conservation Service, shall establish a carbon sequestration program to 
permit owners and operators of land located in the United States to 
enroll the land in the program to increase the sequestration of carbon.
    ``(b) Eligible Land.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        Secretary may include in the program established under this 
        chapter any land, as determined by the Secretary.
            ``(2) Conservation reserve land and wetlands reserve 
        land.--The Secretary may include in the carbon sequestration 
        program land that is enrolled in the conservation reserve 
        program or the wetlands reserve program established under 
        subchapters B and C, respectively, of chapter 1, if the owner 
        or operator of the land has not received any payments under the 
        program for the implementation of carbon sequestration measures 
        on the land.
    ``(c) Maximum Enrollment.--The Secretary may maintain up to 
20,000,000 acres of land in the United States in the carbon 
sequestration program at any 1 time during a calendar year.
    ``(d) Duration of Contract.--
            ``(1) In general.--For the purpose of carrying out this 
        chapter, the Secretary shall enter into contracts of not less 
        than 10 years.
            ``(2) Certain land.--In the case of land devoted to 
        hardwood trees, shelterbelts, windbreaks, or wildlife corridors 
        under a contract entered into under this chapter, the owner or 
        operator of the land may, within the limitations prescribed 
        under this section, specify the duration of the contract.

``SEC. 1238A. CARBON SEQUESTRATION PRACTICES.

    ``(a) Advisory Panel.--
            ``(1) Establishment.--The Secretary shall establish an 
        advisory panel to assist the Secretary in carrying out this 
        chapter.
            ``(2) Composition.--The advisory panel shall consist of--
                    ``(A) the Chief of the Forest Service;
                    ``(B) the Secretary of State;
                    ``(C) the Secretary of Energy; and
                    ``(D) representatives of nongovernmental 
                organizations who have an expertise and experience in 
                carbon sequestration practices, appointed by the 
                Secretary.
    ``(b) Criteria for Evaluating Carbon Sequestration Practices.--
            ``(1) In general.--The advisory panel shall develop, and 
        propose to the Secretary, criteria for determining the 
        acceptability of, and evaluating, practices by owners and 
        operators that will increase the sequestration of carbon for 
        the purposes of determining the acceptability of contract 
        offers made by the owners and operators.
            ``(2) Content.--The criteria shall address--
                    ``(A) forest preservation and restoration and 
                afforestation;
                    ``(B) biodiversity enhancement;
                    ``(C) the use of acreage to produce high-storage 
                crops;
                    ``(D) soil erosion management;
                    ``(E) soil fertility restoration;
                    ``(F) wetland restoration;
                    ``(G) no-till farming practices;
                    ``(H) conservation buffers;
                    ``(I) improved cropping systems with winter cover 
                crops; and
                    ``(J) any other conservation practices that the 
                Secretary determines to be appropriate for increasing 
                carbon sequestration.
            ``(3) Regulations.--The Secretary, acting through the Chief 
        of the Natural Resources Conservation Service and the Chief of 
        the Forest Service, by regulation, shall establish criteria 
        described in paragraphs (1) and (2).
    ``(c) Estimates of Carbon Sequestration Rates.--
            ``(1) In general.--The advisory panel shall develop, and 
        propose to the Secretary, estimates of the rates of carbon 
        sequestration for various plants, agricultural commodities, and 
        agricultural practices for the purposes of determining the 
        acceptability of contract offers made by owners and operators.
            ``(2) Basis.--In developing the estimates, the advisory 
        panel shall--
                    ``(A) consult with representatives of the 
                Consortium for Agricultural Soils Mitigation of 
                Greenhouse Gases; and
                    ``(B) use information reported to the Secretary of 
                Energy from projects carried out under the voluntary 
reporting program of the Energy Information Administration under 
section 1605 of the Energy Policy Act of 1992 (42 U.S.C. 13385).
    ``(d) Acceptability of Carbon Sequestration Practices.--
            ``(1) In general.--As part of a contract offer accepted 
        under this chapter, the owner or operator shall agree to carry 
        out on land enrolled in the program established under this 
        chapter carbon sequestration practices proposed by the owner or 
        operator that (as determined by the Secretary)--
                    ``(A) provide for additional sequestration beyond 
                that which would be provided in the absence of 
                enrollment of the land in the program; and
                    ``(B) contribute to a positive reduction of 
                greenhouse gases in the atmosphere through 
                sequestration over at least a 10-year period.
            ``(2) Maximum sequestration benefits.--In determining the 
        acceptability of contract offers, the Secretary shall take into 
        consideration the extent to which enrollment of the land that 
        is the subject of the contract offer would provide the maximum 
        sequestration benefits under the criteria developed under 
        subsection (b).
    ``(e) Compliance With Carbon Sequestration Contracts.--
            ``(1) In general.--As part of a contract offer accepted 
        under this chapter, an owner or operator of land shall permit 
        the Secretary to verify that the owner or operator is 
        implementing practices that sequester carbon in accordance with 
        the contract, including an actual verification of the practices 
        at least once every 5 years and such random inspections as are 
        necessary.
            ``(2) Fraud or false statements.--Section 1001 of title 18, 
        United States Code, shall apply to a statement, representation, 
        writing, or document provided by an owner or operator under 
        this subsection.
            ``(3) Confidentiality.--Information provided by an owner or 
        operator under this subsection shall be considered to be 
        confidential information for the purposes of section 552(b)(4) 
        of title 5, United States Code.
    ``(f) Reporting.--
            ``(1) Advisory panel.--The advisory panel established under 
        subsection (a) shall periodically report to the Administrator 
        of the Energy Information Administration on--
                    ``(A) sequestration improvements made as a result 
                of this chapter; and
                    ``(B) sequestration practices carried out under 
                this chapter.
            ``(2) Secretary.--The Secretary, in consultation with the 
        Administrator of the Energy Information Administration, shall--
                    ``(A) develop forms to monitor sequestration 
                improvements made as a result of the program 
                established this chapter and distribute the forms to 
                owners and operators of land enrolled in the program; 
                and
                    ``(B) at least once every 5 years, report to 
                Congress and the public on the program, including--
                            ``(i) sequestration improvements made as a 
                        result of the program;
                            ``(ii) sequestration practices on land 
                        enrolled in the program; and
                            ``(iii) compliance with contracts entered 
                        into under this chapter.
    ``(g) Educational Outreach.--In consultation with the Consortium 
for Agricultural Soils Mitigation of Greenhouse Gases, the Secretary, 
acting through the Extension Service, shall conduct an educational 
outreach program to collect and disseminate to owners and operators of 
land research-based information on agricultural practices that will 
increase the sequestration of carbon, while preserving the social and 
economic well-being of the owners and operators.

``SEC. 1238B. DUTIES OF OWNERS AND OPERATORS.

    ``(a) In General.--Under the terms of a contract entered into under 
this chapter, during the term of the contract, an owner or operator of 
a farm or ranch shall agree--
            ``(1) to implement a plan approved by the Secretary for 
        carrying out on land subject to the contract practices that 
        will increase the sequestration of carbon, substantially in 
        accordance with a schedule, covering a period of not less than 
        10 years, that is outlined in the plan;
            ``(2) to place land subject to the contract in the carbon 
        sequestration program established under this chapter;
            ``(3) in addition to the remedies provided under section 
        1238F(d), on the violation of a term or condition of the 
        contract at any time at which the owner or operator has control 
        of the land--
                    ``(A) to forfeit all rights to receive rental 
                payments and cost-sharing payments under the contract 
and to refund to the Secretary any rental payments and cost-sharing 
payments received by the owner or operator under the contract, and 
interest on the payments as determined by the Secretary, if the 
Secretary determines that the violation is of such nature as to warrant 
termination of the contract; or
                    ``(B) to refund to the Secretary, or accept 
                adjustments to, the rental payments and cost-sharing 
                payments provided to the owner or operator, as the 
                Secretary considers appropriate, if the Secretary 
                determines that the violation does not warrant 
                termination of the contract;
            ``(4) on the transfer of the right and interest of the 
        owner or operator in land subject to the contract--
                    ``(A)(i) to forfeit all rights to rental payments 
                and cost-sharing payments under the contract; and
                    ``(ii) to refund to the United States all rental 
                payments and cost-sharing payments received by the 
                owner or operator, or accept such payment adjustments 
                or make such refunds as the Secretary considers 
appropriate and consistent with the objectives of this chapter; unless
                    ``(B)(i) the transferee of the land agrees with the 
                Secretary to assume all obligations of the contract;
                    ``(ii) the land is purchased by or for the United 
                States Fish and Wildlife Service; or
                    ``(iii) the transferee and the Secretary agree to 
                modifications to the contract that are consistent with 
                the objectives of the program, as determined by the 
                Secretary;
            ``(5) not to adopt any practice specified by the Secretary 
        in the contract as a practice that would tend to defeat the 
        purposes of this chapter; and
            ``(6) to comply with such additional provisions as the 
        Secretary determines are desirable and are included in the 
        contract to carry out this chapter or to facilitate the 
        practical administration of this chapter.
    ``(b) Plan.--The plan referred to in subsection (a)(1)--
            ``(1) shall specify the carbon sequestration practices to 
        be carried out by the owner or operator during the term of the 
        contract; and
            ``(2) may provide for the permanent retirement of any 
        existing cropland base and allotment history for the land.
    ``(c) Foreclosure.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, an owner or operator that is a party to a contract entered 
        into under this chapter may not be required to make repayments 
        to the Secretary of amounts received under the contract if--
                    ``(A) the land that is subject to the contract has 
                been foreclosed on; and
                    ``(B) the Secretary determines that forgiving the 
                repayments is appropriate in order to provide fair and 
                equitable treatment.
            ``(2) Resumption of control.--
                    ``(A) In general.--This subsection shall not void 
                the responsibilities of such an owner or operator under 
                the contract if the owner or operator resumes control 
                over the land that is subject to the contract within 
                the period specified in the contract.
                    ``(B) Contract applicability.--On the resumption of 
                the control over the land by the owner or operator, the 
                provisions of the contract in effect on the date of the 
                foreclosure shall apply.

``SEC. 1238C. DUTIES OF THE SECRETARY.

    ``In return for a contract entered into by an owner or operator 
under section 1238B, the Secretary shall--
            ``(1) share the cost of carrying out on the land carbon 
        sequestration practices specified in the contract for which the 
        Secretary determines that cost sharing is appropriate and in 
        the public interest;
            ``(2) for a period of years not in excess of the term of 
        the contract, pay an annual rental payment in an amount 
        necessary to compensate for--
                    ``(A) the use of carbon sequestration practices on 
                the land; and
                    ``(B) the retirement of any cropland base and 
                allotment history that the owner or operator agrees to 
                retire permanently; and
            ``(3) provide conservation technical assistance to assist 
        the owner or operator in carrying out the contract.

``SEC. 1238D. PAYMENTS.

    ``(a) Time of Payment.--The Secretary shall provide payment for 
obligations incurred by the Secretary under a contract entered into 
under this chapter--
            ``(1) with respect to any cost-sharing payment obligation 
        incurred by the Secretary, as soon as practicable after the 
        obligation is incurred; and
            ``(2) with respect to any annual rental payment obligation 
        incurred by the Secretary--
                    ``(A) as soon as practicable after October 1 of 
                each calendar year; or
                    ``(B) at the option of the Secretary, at any time 
                before that date during the year in which the 
                obligation is incurred.
    ``(b) Cost-Sharing Payments.--
            ``(1) In general.--In making cost-sharing payments to an 
        owner or operator under a contract entered into under this 
        chapter, the Secretary shall pay not more than 50 percent of 
        the cost of carrying out carbon sequestration practices 
        required under the contract for which the Secretary determines 
        that cost-sharing is appropriate and in the public interest.
            ``(2) Maximum amount.--The Secretary shall not make any 
        payment under this chapter to the extent that the total amount 
        of cost-sharing payments provided to an owner or operator for 
        carbon sequestration practices from all sources would exceed 
        100 percent of the total cost of carrying out the practices.
            ``(3) Other federal assistance.--An owner or operator shall 
        not be eligible to receive or retain cost-share assistance for 
        land under this subsection if the owner or operator receives 
        any other Federal cost-share assistance under this Act with 
        respect to the land under any other provision of law.
    ``(c) Rental Payments.--
            ``(1) In general.--In determining the amount of annual 
        rental payments to be paid to owners and operators for carrying 
        out carbon sequestration practices, the Secretary may consider, 
        among other factors, the amount necessary to encourage owners 
        or operators of land to participate in the program established 
        by this chapter.
            ``(2) Bids or other means.--The amounts payable to owners 
        or operators in the form of rental payments under contracts 
        entered into under this chapter may be determined through--
                    ``(A) the submission of bids for such contracts by 
                owners and operators in such manner as the Secretary 
                may prescribe; or
                    ``(B) such other means as the Secretary determines 
                are appropriate.
            ``(3) Factors.--In determining the acceptability of 
        contract offers, the Secretary--
                    ``(A) shall take into consideration the extent to 
                which enrollment of the land that is the subject of the 
                contract offer would increase the sequestration of 
                carbon in accordance with section 1238A;
                    ``(B) 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; and
                    ``(C) may establish different criteria in various 
                States and regions of the United States based on the 
                extent to which the sequestration of carbon, water 
                quality, or wildlife habitat may be improved or erosion 
                may be abated.
    ``(d) Form of Payment.--
            ``(1) In general.--Except as otherwise provided in this 
        section, payments under this chapter--
                    ``(A) shall be made in cash or in the form of in-
                kind commodities in such amount and on such time 
                schedule as is agreed on by the owner or operator and 
                specified in the contract; and
                    ``(B) may be made in advance of determination of 
                performance.
            ``(2) In-kind commodities.--If the payment is made with in-
        kind commodities, the payment shall be made by the Commodity 
        Credit Corporation--
                    ``(A) by delivery of the commodity involved to the 
                owner or operator at a warehouse or other similar 
                facility located in the county in which the land 
                subject to the contract is located or at such other 
                location as is agreed to by the Secretary and the owner 
                or operator;
                    ``(B) by the transfer of negotiable warehouse 
                receipts; or
                    ``(C) by such other method, including the sale of 
                the commodity in commercial markets, as is determined 
                by the Secretary to be appropriate to enable the owner 
                or operator to receive efficient and expeditious 
                possession of the commodity.
            ``(3) Substitution in cash.--If stocks of a commodity 
        acquired by the Commodity Credit Corporation are not readily 
        available to make full payment in kind to the owner or 
        operator, the Secretary may substitute full or partial payment 
        in cash for payment in kind.
            ``(4) State carbon sequestration program.--Payments to an 
        owner or operator under a special carbon sequestration program 
        described in subsection (f)(4) shall be in the form of cash 
        only.
    ``(e) Payment to Others.--If an owner or operator that is entitled 
to a payment under a contract entered into under this chapter dies, 
becomes incompetent, is otherwise unable to receive a payment under 
this chapter, or is succeeded by another person that renders or 
completes the required performance, the Secretary shall make the 
payment, in accordance with regulations promulgated by the Secretary 
and without regard to any other provision of law, in such manner as the 
Secretary determines is fair and reasonable in light of all the 
circumstances.
    ``(f) Payment Limitations.--
            ``(1) Total amount.--The total amount of rental payments, 
        including rental payments made in the form of in-kind 
        commodities, made to a person under this chapter for any fiscal 
        year may not exceed $50,000.
            ``(2) Amount per acre.--The amount of rental payments made 
        to a person under this chapter for any fiscal year may not 
        exceed $20 per acre.
            ``(3) Regulations.--
                    ``(A) In general.--The Secretary shall issue 
                regulations--
                            ``(i) defining the term `person' as used in 
                        this subsection; and
                            ``(ii) prescribing such rules as the 
                        Secretary determines are necessary to ensure a 
                        fair and reasonable application of the 
                        limitation contained in this subsection.
                    ``(B) Corporations.--The regulations issued by the 
                Secretary on December 18, 1970, under section 101 of 
                the Agricultural Act of 1970 (7 U.S.C. 1307) shall be 
                used to determine whether corporations and their 
                stockholders may be considered to be separate persons 
                under this subsection.
            ``(4) Other payments.--Rental payments received by an owner 
        or operator shall be in addition to, and shall not affect, the 
        total amount of payments that the owner or operator is 
        otherwise eligible to receive under--
                    ``(A) the Federal Agriculture Improvement and 
                Reform Act of 1996 (Public Law 104-127), including the 
                Agricultural Market Transition Act (7 U.S.C. 7201 et 
                seq.);
                    ``(B) the Food, Agriculture, Conservation, and 
                Trade Act of 1990 (Public Law 101-624); or
                    ``(C) the Agricultural Act of 1949 (7 U.S.C. 1421 
                et seq.).
            ``(5) State carbon sequestration program.--
                    ``(A) In general.--This subsection and section 
                1305(f) of the Agricultural Reconciliation Act of 1987 
                (7 U.S.C. 1308 note; Public Law 100-203) shall not be 
                applicable to payments received by a State, political 
                subdivision, or agency of a State or political 
                subdivision in connection with agreements entered into 
                under a special carbon sequestration program carried 
                out by that entity that has been approved by the 
                Secretary.
                    ``(B) Payments to states and political 
                subdivisions.--The Secretary may enter into such 
                agreements for payments to States, political 
                subdivisions, or agencies of States or political 
                subdivisions as the Secretary determines will advance 
                the purposes of this chapter.
    ``(g) Exemption From Automatic Sequester.--Notwithstanding any 
other provision of law, no order issued for any fiscal year under 
section 252 of the Balanced Budget and Emergency Deficit Control Act of 
1985 (2 U.S.C. 902) shall affect any payment under this chapter.
    ``(h) Other Assistance.--In addition to any payment under this 
chapter, an owner or operator may receive cost-share assistance, rental 
payments, or tax benefits from a State or political subdivision of a 
State for enrolling land in the carbon sequestration program.
    ``(i) Treatment of Payments.--Payments received by an owner or 
operator under this chapter shall be considered rentals from real 
estate for the purposes of section 1402(a)(1) of the Internal Revenue 
Code of 1986.

``SEC. 1238E. CHANGES IN OWNERSHIP; MODIFICATION OR TERMINATION OF 
              CONTRACTS.

    ``(a) Changes in Ownership.--
            ``(1) In general.--Subject to paragraphs (2) and (3), no 
        contract shall be entered into under this chapter concerning 
        land with respect to which the ownership has changed in the 1-
        year period preceding the first year of the contract period 
        unless--
                    ``(A) the new ownership was acquired by will or 
                succession as a result of the death of the previous 
                owner;
                    ``(B) the new ownership was acquired before April 
                1, 2001;
                    ``(C) the Secretary determines that the land was 
                acquired under circumstances that give adequate 
                assurances that the land was not acquired for the 
                purpose of enrolling the land in the carbon 
                sequestration program; or
                    ``(D) the ownership change occurred because of 
                foreclosure on the land and the owner of the land 
                immediately before the foreclosure exercises a right of 
                redemption from the mortgage holder in accordance with 
                State law.
            ``(2) Limitations.--Paragraph (1) shall not--
                    ``(A) prohibit the continuation of an agreement by 
                a new owner after an agreement has been entered into 
                under this chapter; or
                    ``(B) require a person to own the land as a 
                condition of eligibility for entering into the contract 
                if the person--
                            ``(i) has operated the land to be covered 
                        by a contract under this section for at least 1 
                        year preceding the later of--
                                    ``(I) the date of the contract; or
                                    ``(II) April 1, 2001; and
                            ``(ii) controls the land for the contract 
                        period.
            ``(3) Options for new owner or operator.--If, during the 
        term of a contract entered into under this chapter, an owner or 
        operator of land subject to the contract sells or otherwise 
        transfers the ownership or right of occupancy of the land, the 
        new owner or operator of the land may--
                    ``(A) continue the contract under the same terms or 
                conditions;
                    ``(B) enter into a new contract in accordance with 
                this chapter; or
                    ``(C) elect not to participate in the program 
                established by this chapter.
    ``(b) Modification of Contracts.--The Secretary may modify a 
contract entered into with an owner or operator under this chapter if--
            ``(1) the owner or operator agrees to the modification; and
            ``(2) the Secretary determines that the modification is 
        desirable--
                    ``(A) to carry out this chapter;
                    ``(B) to facilitate the practical administration of 
                this chapter; or
                    ``(C) to achieve such other goals as the Secretary 
                determines are appropriate, consistent with this 
                chapter.
    ``(c) Termination of Contracts.--
            ``(1) In general.--The Secretary may terminate a contract 
        entered into with an owner or operator under this chapter if--
                    ``(A) the owner or operator agrees to the 
                termination; and
                    ``(B) the Secretary determines that the termination 
                would be in the public interest.
            ``(2) Congressional notice.--Not later than 90 days before 
        taking any action to terminate under paragraph (1) a contract 
        entered into under this chapter, the Secretary shall provide to 
        the Committee on Agriculture of the House of Representatives 
        and the Committee on Agriculture, Nutrition, and Forestry of 
        the Senate written notice of the action.

``SEC. 1238F. BASE HISTORY.

    ``(a) In General.--A reduction, based on a ratio between the total 
cropland acreage on the farm and the acreage placed in the carbon 
sequestration program authorized by this chapter, as determined by the 
Secretary, shall be made during the period of the contract, in the 
aggregate, in crop bases, quotas, and allotments on the farm with 
respect to crops for which there is a production adjustment program.
    ``(b) Preservation of Base and Allotment History.--Notwithstanding 
sections 1211 and 1221, the Secretary, by regulation, may provide for 
preservation of cropland base and allotment history applicable to 
acreage on which carbon sequestration practices are carried out under 
this section, for the purpose of any Federal program under which the 
history is used as a basis for participation in the program or for an 
allotment or other limitation in the program, unless the owner and 
operator agree under the contract to retire permanently that cropland 
base and allotment history.
    ``(c) Extension of Base and Allotment History.--
            ``(1) In general.--The Secretary shall offer the owner or 
        operator of a farm or ranch an opportunity to extend the 
        preservation of cropland base and allotment history under 
        subsection (b) for such time as the Secretary determines is 
        appropriate after the expiration date of a contract under this 
        chapter at the request of the owner or operator.
            ``(2) Conditions.--In return for the extension, the owner 
        or operator shall agree to continue to abide by the terms and 
conditions of the original contract, except that the owner or operator 
shall receive no additional cost share, annual rental, or bonus 
payment.
    ``(d) Violation of Contracts.--In addition to any other remedy 
prescribed by law, the Secretary may reduce or terminate the quantity 
of cropland base and allotment history preserved under this section for 
acreage with respect to which there has occurred a violation of a term 
or condition of a contract entered into under this chapter.

``SEC. 1238G. CARBON MONITORING PILOT PROGRAMS.

    ``(a) Establishment.--
            ``(1) In general.--The Secretary, in cooperation with the 
        Consortium for Agricultural Soils Mitigation of Greenhouse 
        Gases, shall carry out 4 or more pilot programs to develop, 
        demonstrate, and verify the best management practices for 
        carbon monitoring on agricultural land.
            ``(2) Criteria.--The Secretary shall select pilot programs 
        based on--
                    ``(A) the merit of the proposed program; and
                    ``(B) the diversity of soil sequestration types 
                available at the site of the proposed program.
    ``(b) Requirements.--Pilot programs carried out under this section 
shall--
            ``(1) involve agricultural producers in the development and 
        verification of best management practices for carbon monitoring 
        on agricultural land;
            ``(2) involve research and testing of the best management 
        practices in various soil types and climactic zones;
            ``(3) analyze the effects of the adoption of the best 
        management practices on watershed levels; and
            ``(4) use the results of the research conducted under the 
        program to--
                    ``(A) encourage agricultural producers to adopt the 
                best management practices;
                    ``(B) analyze the economic impact of the best 
                management practices; and
                    ``(C) develop the best management practices on a 
                regional basis for watersheds and States not 
                participating in the pilot programs.

``SEC. 1238H. FUNDING.

    ``The Secretary shall use to carry out this chapter (including to 
pay administrative costs incurred by the Natural Resources Conservation 
Service in carrying out this chapter)--
            ``(1) funds of the Commodity Credit Corporation made 
        available under section 1241(a)(3); and
            ``(2) at the option of, and transfer by, another Federal 
        agency, funds of the agency that are available to the agency 
        for climate change initiatives or greenhouse gas emission 
        reductions.''.

SEC. 3. FUNDING.

    Section 1241(a)(3) of the Food Security Act of 1985 (16 U.S.C. 
3841(a)(3)) is amended by striking ``chapter 4'' and inserting 
``chapters 2 and 4''.

SEC. 4. REGULATIONS.

    (a) Proposed Regulations.--Not later than 180 days after the date 
of enactment of this Act, the Secretary of Agriculture shall publish in 
the Federal Register proposed regulations for carrying out this Act and 
the amendments made by this Act.
    (b) Final Regulations.--Not later than 60 days after the date of 
publication of the proposed regulations, the Secretary shall promulgate 
final regulations for carrying out this Act and the amendments made by 
this Act.

SEC. 5. EFFECTIVE DATES.

    (a) In General.--Except as provided in subsection (b), this Act and 
the amendments made by this Act take effect on January 1, 2002.
    (b) Regulations.--Section 4 takes effect on the date of enactment 
of this Act.
                                 <all>