[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. Res. 127 Introduced in Senate (IS)]







108th CONGRESS
  1st Session
S. RES. 127

 Expressing the sense of the Senate that the Secretary of Agriculture 
 should reduce the interest rate on loans to processors of sugar beets 
and sugarcane by 1 percent to a rate equal to the cost of borrowing to 
                   conform to the intent of Congress.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 30, 2003

 Mr. Coleman submitted the following resolution; which was referred to 
         the Committee on Agriculture, Nutrition, and Forestry

_______________________________________________________________________

                               RESOLUTION


 
 Expressing the sense of the Senate that the Secretary of Agriculture 
 should reduce the interest rate on loans to processors of sugar beets 
and sugarcane by 1 percent to a rate equal to the cost of borrowing to 
                   conform to the intent of Congress.

Whereas section 163 of the Federal Agriculture Improvement and Reform Act of 
        1996 (7 U.S.C. 7283) established the monthly Commodity Credit 
        Corporation interest rate applicable to loans provided for agricultural 
        commodities by the Corporation at 100 basis points greater than the rate 
        determined under the applicable interest rate formula in effect on 
        October 1, 1995;
Whereas the interest rate formula in effect on October 1, 1995, for agricultural 
        commodity loans reflected the interest rate charged to the Commodity 
        Credit Corporation by the Treasury for the applicable month;
Whereas the interest rate charged to the Commodity Credit Corporation by the 
        Treasury for a month is based on the 4- to 5-week average price of 1-
        year constant maturity securities sold on the market by the Treasury in 
        the previous month;
Whereas the Commodity Credit Corporation had used such cost of borrowing 
        interest rates for all commodity loans since January 1, 1982, and this 
        practice was understood by Congress when enacting section 163 of the 
        Federal Agriculture Improvement and Reform Act of 1996;
Whereas section 1401(c)(2) of the Farm Security and Rural Investment Act of 2002 
        (Public Law 107-171) amended section 163 of the Federal Agriculture 
        Improvement and Reform Act of 1996 to provide that raw cane sugar, 
        refined beet sugar, and in-process sugar eligible for a loan under 
        section 156 of that Act (7 U.S.C. 7272) shall not be considered an 
        agricultural commodity for the purposes of section 163 of that Act;
Whereas Congress intended that loans to processors of sugar be exempted from the 
        100-basis point surcharge and that the loans should be subject to 
        interest at the rate that is charged to the Commodity Credit Corporation 
        by the Treasury for the applicable month;
Whereas, during deliberations on the Farm Security and Rural Investment Act of 
        2002, the Congressional Budget Office estimated the cost of eliminating 
        the interest rate surcharge on loans to processors of sugar at 
        $5,000,000 per year in reduced revenues and Congress enacted the 
        amendment to section 163 of the Federal Agriculture Improvement and 
        Reform Act of 1996 with this understanding of its purpose and effect;
Whereas the final regulations of the Commodity Credit Corporation to implement 
        the sugar loan program recognized that the amendment of section 163 of 
        the Federal Agriculture Improvement and Reform Act of 1996 by section 
        1401(c)(2) of the Farm Security and Rural Investment Act of 2002 
        eliminated the requirement that the Commodity Credit Corporation add 1 
        percentage point to the interest rate as calculated by the procedure in 
        place prior to October 1, 1995; and
Whereas the Commodity Credit Corporation regulations require that a loan to a 
        processor of sugar beets or sugarcane be subject to interest at rates 
        equal to those applicable to all other agricultural commodities, 
        including the 100-basis point surcharge, notwithstanding the clear 
        intent of Congress in enacting section 1401(c)(2) of the Farm Security 
        and Rural Investment Act of 2002: Now, therefore, be it
    Resolved, That it is the sense of the Senate that the Secretary of 
Agriculture should reduce the interest rate on loans to processors of 
sugar beets and sugarcane by 100 basis points to a rate equal to the 
cost of borrowing from the Treasury to conform to the intent of 
Congress in enacting the Farm Security and Rural Investment Act of 2002 
(Public Law 107-171).
                                 <all>