[Congressional Record Volume 147, Number 7 (Monday, January 22, 2001)]
[Senate]
[Pages S249-S260]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DASCHLE (for himself, Mr. Harkin, Mr. Leahy, Mr. Johnson, 
        Mr. Baucus, Mr. Rockefeller, Mr. Kohl, Mr. Sarbanes, Mr. 
        Wellstone, Mr. Dorgan, Mr. Durbin, Mr. Conrad, Mr. Kerry, Mrs. 
        Carnahan, Mr. Dayton, Mr. Kennedy, and Mr. Akaka):
  S. 20. A bill to enhance fair and open competition in the production 
and sale of agricultural commodities, and for other purposes; to the 
Committee on Agriculture, Nutrition, and Forestry.


       securing a future for independent agriculture act of 2001

  Mr. DASCHLE. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Securing a 
     Future for Independent Agriculture Act of 2001''.
       (b) Table of Contents.--The table of contents is as 
     follows:

Sec. 1. Short title; table of contents.

 TITLE I--PROTECTION FROM ANTICOMPETITIVE PRACTICES; CONTRACT FAIRNESS

                        Subtitle A--Definitions

Sec. 101. Definitions.

         Subtitle B--Protection from Anticompetitive Practices

Sec. 111. Prohibitions against unfair practices in transactions 
              involving agricultural commodities.
Sec. 112. Reports of the Secretary on potential unfair practices.
Sec. 113. Report on corporate structure.
Sec. 114. Mandatory funding for staff.
Sec. 115. General Accounting Office study.

                     Subtitle C--Contract Fairness

Sec. 121. Obligation of good faith.
Sec. 122. Disclosure of risks and readability requirements under 
              agricultural contracts.
Sec. 123. Right of contract producers to cancel production contracts.
Sec. 124. Prohibition of confidentiality provisions.
Sec. 125. Production contract liens.
Sec. 126. Production contracts involving investment requirements.
Sec. 127. Producer rights.
Sec. 128. Mediation.

                Subtitle D--Agricultural Fair Practices

Sec. 131. Agricultural fair practices.

                       Subtitle E--Implementation

Sec. 141. Relationship to State law.
Sec. 142. Regulations.
Sec. 143. Implementation plan.
Sec. 144. Effective date.

     TITLE II--NATIONAL RURAL COOPERATIVE AND BUSINESS EQUITY FUND

Sec. 201. National Rural Cooperative and Business Equity Fund.

                 TITLE III--COUNTRY OF ORIGIN LABELING

Sec. 301. Country of origin labeling.

         TITLE IV--MARKETING ASSISTANCE LOAN RATE EQUALIZATION

Sec. 401. Loan rates for marketing assistance loans.
Sec. 402. Term of loans.
Sec. 403. Application.

                      TITLE V--FARMLAND PROTECTION

Sec. 501. Farmland protection program.

                         TITLE VI--CIVIL RIGHTS

Sec. 601. Sense of Congress on participation of socially disadvantaged 
              groups in Department of Agriculture programs.

 TITLE I--PROTECTION FROM ANTICOMPETITIVE PRACTICES; CONTRACT FAIRNESS

                        Subtitle A--Definitions

     SEC. 101. DEFINITIONS.

       In this title:
       (1) Active contractor.--The term ``active contractor'' 
     means a person (including a processor) that (in accordance 
     with a production contract) owns, or will own, an 
     agricultural commodity that is produced by a contract 
     producer.
       (2) 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).
       (3) Agricultural contract.--The term ``agricultural 
     contract'' means a marketing contract or a production 
     contract.
       (4) Agricultural cooperative.--The term ``agricultural 
     cooperative'' means an association of persons engaged in the 
     production, marketing, or processing of an agricultural 
     commodity that meets the requirements of the Act entitled 
     ``An Act to authorize association of producers of 
     agricultural products'' (commonly known as the ``Capper-
     Volstead Act'') (7 U.S.C. 291 et seq).
       (5) Broker.--The term ``broker'' means any person engaged 
     in the business of negotiating sales and purchases of any 
     agricultural commodity in interstate or foreign commerce for 
     or on behalf of the vendor or the purchaser, except that no 
     person shall be considered a broker if the person's sales of 
     such agricultural commodities are not in excess of $1,000,000 
     per year.
       (6) Capital investment.--The term ``capital investment'' 
     means an investment in--
       (A) a structure, such as a building or manure storage 
     structure; or
       (B) machinery or equipment associated with producing an 
     agricultural commodity that has a useful life of more than 1 
     year.
       (7) Commission merchant.--The term ``commission merchant'' 
     means any person engaged in the business of receiving in 
     interstate or foreign commerce any agricultural commodity for 
     sale, on commission, or for or on behalf of another person, 
     except that no person shall be considered a commission 
     merchant if the person's sales of such agricultural 
     commodities are not in excess of $1,000,000 per year.
       (8) Contract input.--
       (A) In general.--The term ``contract input'' means an 
     agricultural commodity or an organic or synthetic substance 
     or compound that is used to produce an agricultural 
     commodity.
       (B) Inclusions.--The term ``contract input'' includes 
     livestock, plants, agricultural seeds, semen or eggs for 
     breeding stock, fertilizers, soil conditioners, and 
     pesticides.
       (9) Contract livestock facility.--The term ``contract 
     livestock facility'' means a facility in which livestock or a 
     product of live livestock is produced under a production 
     contract by a contract producer.
       (10) Contract producer.--The term ``contract producer'' 
     means a producer that produces an agricultural commodity 
     under a production contract.

[[Page S250]]

       (11) Contractor.--The term ``contractor'' means a person 
     that is an active contractor or a passive contractor.
       (12) Covered person.--The term ``covered person'' means a 
     dealer, processor, commission merchant, and broker.
       (13) Crop.--The term ``crop'' means an agricultural 
     commodity produced from a plant.
       (14) Dealer.--The term ``dealer'' means--
       (A) any person (except an agricultural cooperative) engaged 
     in the business of buying, selling, or marketing agricultural 
     commodities in wholesale or jobbing quantities, as determined 
     by the Secretary, in interstate or foreign commerce, except 
     that--
       (i) no person shall be considered a dealer with respect to 
     sales or marketing of any agricultural commodity of that 
     person's own production if the sales or marketing of such 
     agricultural commodities do not exceed $10,000,000 per year; 
     and
       (ii) no person shall be considered a dealer who buys, 
     sells, or markets less than $1,000,000 per year of such 
     agricultural commodities; and
       (B) an agricultural cooperative that sells or markets 
     agricultural commodities of its members' own production if 
     the agricultural cooperative sells or markets more than 
     $1,000,000 of its members' production per year of such 
     agricultural commodities.
       (15) Investment requirement.--The term ``investment 
     requirement'' means a provision in a production contract that 
     requires a contract producer to make a capital investment 
     associated with producing an agricultural commodity subject 
     to the production contract.
       (16) Livestock.--The term ``livestock'' means beef cattle, 
     dairy cattle, swine, sheep, or poultry.
       (17) Marketing contract.--The term ``marketing contract'' 
     means a written agreement between a processor and a producer 
     for the purchase of an agricultural commodity grown or raised 
     by the producer.
       (18) Passive contractor.--The term ``passive contractor'' 
     means a person that--
       (A) provides a management service to a contract producer; 
     and
       (B) does not own an agricultural commodity that is produced 
     by the contract producer under a production contract.
       (19) Processor.--
       (A) In general.--The term ``processor'' means--
       (i) any person (other than an agricultural cooperative) 
     engaged in the business of handling, preparing, or 
     manufacturing (including slaughtering) an agricultural 
     commodity or the products of an agricultural commodity for 
     sale or marketing in interstate or foreign commerce for human 
     consumption; and
       (ii) an agricultural cooperative that handles, prepares, or 
     manufactures (including slaughtering) agricultural 
     commodities of its members' own production.
       (B) Exclusions.--The term ``processor'' does not include--
       (i) any person (other than an agricultural cooperative) 
     with respect to the handling, preparing, or manufacturing 
     (including slaughtering) of an agricultural commodity that 
     was produced by the person if the gross revenue derived by 
     the person from the sales or marketing of the agricultural 
     commodity is less than $10,000,000 per year; and
       (ii) any agricultural cooperative that handles, prepares, 
     or manufactures (including slaughtering) an agricultural 
     commodity if the gross revenue derived by the person from the 
     sales or marketing of the agricultural commodity is less than 
     $1,000,000 per year.
       (20) Produce.--The term ``produce'' means--
       (A) to provide feed or services relating to the care and 
     feeding of livestock, including milking dairy cattle and 
     storing raw milk; and
       (B) to provide for planting, raising, harvesting, and 
     storing a crop, including preparing soil for planting and 
     applying a fertilizer, soil conditioner, or pesticide to a 
     crop.
       (21) Producer.--
       (A) In general.--The term ``producer'' means a person that 
     produces an agricultural commodity.
       (B) Exclusions.--The term ``producer'' does not include--
       (i) a commercial fertilizer or pesticide applicator;
       (ii) a feed supplier; or
       (iii) a veterinarian.
       (22) Production contract.--
       (A) In general.--The term ``production contract'' means a 
     written agreement that provides for--
       (i) the production of an agricultural commodity by a 
     contract producer; or
       (ii) the provision of a management service relating to the 
     production of an agricultural commodity by a contract 
     producer.
       (B) Inclusions.--The term ``production contract'' 
     includes--
       (i) a contract between an active contractor and a contract 
     producer for the production of an agricultural commodity;
       (ii) a contract between an active contractor and a passive 
     contractor for the provision of a management service to a 
     contract producer in the production of an agricultural 
     commodity; and
       (iii) a contract between a passive contractor and a 
     contract producer if--

       (I) the production contract provides for a management 
     service furnished by the passive contractor to the contract 
     producer in the production of an agricultural commodity; and
       (II) the passive contractor has a contractual relationship 
     with the active contractor involving the production of the 
     agricultural commodity.

       (23) Secretary.--The term ``Secretary'' means the Secretary 
     of Agriculture.

         Subtitle B--Protection from Anticompetitive Practices

     SEC. 111. PROHIBITIONS AGAINST UNFAIR PRACTICES IN 
                   TRANSACTIONS INVOLVING AGRICULTURAL 
                   COMMODITIES.

       (a) Prohibitions.--It shall be unlawful in, or in 
     connection with, any transaction in interstate or foreign 
     commerce for any covered person or contractor--
       (1) to engage in or use any unfair, unreasonable, unjustly 
     discriminatory, or deceptive practice or device in the 
     marketing, receiving, purchasing, sale, or contracting for 
     the production of any agricultural commodity;
       (2) to make or give any undue or unreasonable preference or 
     advantage to any particular person or locality or subject any 
     particular person or locality to any undue or unreasonable 
     disadvantage in connection with any transaction involving any 
     agricultural commodity;
       (3) to make any false or misleading statement in connection 
     with any transaction involving any agricultural commodity 
     that is purchased or received in interstate or foreign 
     commerce, or involving any production contract, or to fail, 
     without reasonable cause, to perform any specification or 
     duty, express or implied, arising out of any undertaking in 
     connection with any such transaction or production contract;
       (4) to retaliate against or disadvantage, or to conspire to 
     retaliate against or disadvantage, any person because of 
     statements or information lawfully provided by the person to 
     any person (including to the Secretary or to a law 
     enforcement agency) regarding alleged improper actions or 
     violations of law by the covered person or contractor (unless 
     the statements or information are determined to be libelous 
     or slanderous under applicable State law) involving any 
     agricultural commodity;
       (5) to include as part of any new or renewed agreement or 
     contract a right of first refusal, or to make any sale or 
     transaction contingent on the granting of a right of first 
     refusal, involving any agricultural commodity, before the 
     date that is 180 days after the study required under section 
     115 is complete; or
       (6) to offer different prices contemporaneously for 
     agricultural commodities of like grade and quality (except 
     agricultural commodities covered by the Perishable 
     Agricultural Commodities Act, 1930 (7 U.S.C. 499a et seq.)), 
     unless--
       (A) the agricultural commodity is purchased in a public 
     market through a competitive bidding process or under similar 
     conditions that provide opportunities for multiple 
     competitors to seek to acquire the agricultural commodity;
       (B) the premium or discount reflects the actual cost of 
     acquiring an agricultural commodity prior to processing; or
       (C) the Secretary has determined that such types of offers 
     do not have a discriminatory impact against small volume 
     producers of agricultural commodities.
       (b) Violations.--
       (1) Complaints.--Whenever the Secretary has reason to 
     believe that any covered person or contractor has violated 
     subsection (a), the Secretary shall cause a complaint in 
     writing to be served on the covered person or contractor, 
     stating the charges in that respect, and requiring the 
     covered person or contractor to attend and testify at a 
     hearing to be held not earlier than 30 days after the service 
     of the complaint.
       (2) Hearing.--
       (A) In general.--The Secretary may hold hearings, sign and 
     issue subpoenas, administer oaths, examine witnesses, receive 
     evidence, and require the attendance and testimony of 
     witnesses and the production of such accounts, records, and 
     memoranda, as the Secretary considers necessary, for the 
     determination of the existence of any violation of this 
     section.
       (B) Right to hearing.--A covered person or contractor may 
     request a hearing if the covered person or contractor is 
     subject to penalty for unfair conduct under this section.
       (C) Respondents rights.--During a hearing, the covered 
     person or contractor shall be given, pursuant to regulations 
     promulgated by the Secretary, the opportunity--
       (i) to be informed of the evidence against the covered 
     person or contractor;
       (ii) to cross-examine witnesses; and
       (iii) to present evidence.
       (D) Hearing limitation.--The issues of any hearing held or 
     requested under this section shall be limited in scope to 
     matters directly related to the purpose for which the hearing 
     was held or requested.
       (3) Report of finding and penalties.--
       (A) In general.--If, after a hearing, the Secretary finds 
     that the covered person or contractor has violated subsection 
     (a), the Secretary shall make a report in writing that states 
     the findings of fact and includes an order requiring the 
     covered person or contractor to cease and desist from 
     continuing the violation.
       (B) Civil penalty.--The Secretary may assess a civil 
     penalty in an amount not to exceed $100,000 for each 
     violation of subsection (a).
       (4) Temporary injunction and finality and appealability of 
     an order.--

[[Page S251]]

       (A) Temporary injunction.--At any time after a complaint is 
     filed under paragraph (1), the court, on application of the 
     Secretary, may issue a temporary injunction, restraining to 
     the extent the court considers proper, the covered person or 
     contractor and the officers, directors, agents, and employees 
     of the covered person or contractor from violating subsection 
     (a).
       (B) Appealability of an order.--An order issued pursuant to 
     this subsection shall be final and conclusive unless within 
     30 days after service of the order, the covered person or 
     contractor petitions to appeal the order to the court of 
     appeals for the circuit in which the covered person or 
     contractor resides or has its principal place of business or 
     the District of Columbia Circuit Court of Appeals.
       (C) Delivery of petition.--
       (i) In general.--The clerk of the court shall immediately 
     cause a copy of the petition filed under subparagraph (B) to 
     be delivered to the Secretary.
       (ii) Record.--On receipt of the petition, the Secretary 
     shall file in the court the record of the proceedings under 
     this subsection.
       (D) Penalty for failure to obey an order.--
       (i) In general.--Any covered person or contractor that 
     fails to obey any order of the Secretary issued under this 
     section after the order, or the order as modified, has been 
     sustained by the court or has otherwise become final, shall 
     be fined not less than $5,000 and not more than $100,000 for 
     each offense.
       (ii) Separate offenses.--Each day during which the failure 
     continues shall be considered a separate offense.
       (5) Records.--
       (A) In general.--Each covered person or contractor shall 
     maintain for a period of not less than 5 years accounts, 
     records, and memoranda (including marketing agreements, 
     forward contracts, and formula pricing arrangements) that 
     fully and correctly disclose all transactions involved in the 
     business of the covered person or contractor, including the 
     true ownership of the business.
       (B) Failure to keep records or allow the secretary to 
     inspect records.--Failure to keep, or allow the Secretary to 
     inspect records as required by this paragraph shall 
     constitute an unfair practice in violation of subsection 
     (a)(1).
       (C) Inspection of records.--The Secretary shall have the 
     right to inspect such accounts, records, and memoranda 
     (including marketing agreements, forward contracts, and 
     formula pricing arrangements) of any covered person or 
     contractor as may be material to the investigation of any 
     alleged violation of this section or for the purpose of 
     investigating the business conduct or practices of an 
     organization with respect to the covered person or 
     contractor.
       (c) Compensation for Injury.--
       (1) Establishment of the family farmer and rancher claims 
     commission.--
       (A) In general.--The Secretary shall appoint 3 individuals 
     to a commission to be known as the ``Family Farmer and 
     Rancher Claims Commission'' (referred to in this subsection 
     as the ``Commission'') to review claims of family farmers and 
     ranchers that have suffered financial damages as a result of 
     any violation of this section as determined by the Secretary 
     pursuant to subsection (b)(3).
       (B) Term of service.--
       (i) In general.--Each member of the Commission shall serve 
     3-year terms which may be renewed.
       (ii) Initial members.--The initial members of the 
     Commission may be appointed for a period of less than 3 
     years, as determined by the Secretary.
       (2) Review of claims.--
       (A) Submission of claims.--A family farmer or rancher 
     damaged as a result of a violation of this section, as 
     determined by the Secretary pursuant to subsection (b)(3), 
     may preserve the right to claim financial damages under this 
     section by filing a claim pursuant to regulations promulgated 
     by the Secretary.
       (B) Determination.--Based on a review of the claim, the 
     Commission shall determine the amount of damages to be paid, 
     if any, as a result of the violation.
       (C) Review.--The decisions of the Commission under this 
     paragraph shall not be subject to judicial review except to 
     determine that the amount of damages to be paid is consistent 
     with the published regulations of the Secretary that 
     establish the criteria for implementing this subsection.
       (3) Funding.--
       (A) In general.--Funds collected from civil penalties 
     pursuant to this section shall--
       (i) be transferred to a special fund in the Treasury;
       (ii) be made available to the Secretary without further Act 
     of appropriation; and
       (iii) remain available until expended to pay the expenses 
     of the Commission and claims described in this subsection.
       (B) Authorization of appropriation.--In addition to the 
     funds described in subparagraph (A), there are authorized to 
     be appropriated such sums as may be necessary to carry out 
     this section.

     SEC. 112. REPORTS OF THE SECRETARY ON POTENTIAL UNFAIR 
                   PRACTICES.

       (a) Filing Premerger Notices With the Secretary.--No 
     covered person, operator of a warehouse used to store 
     agricultural commodities, or other agriculture-related 
     business shall merge or acquire, directly or indirectly, any 
     voting securities or assets of any other covered person, 
     operator of a warehouse used to store agricultural 
     commodities, or other agriculture-related business unless 
     both persons (or in the case of a tender offer, the acquiring 
     person) file notification pursuant to rules promulgated by 
     the Secretary, if--
       (1) any voting securities or assets of the covered person, 
     operator of a warehouse used to store agricultural 
     commodities, or other agriculture-related business with 
     annual net sales or total assets of $10,000,000 or more are 
     being acquired by a covered person, operator of a warehouse 
     used to store agricultural commodities, or other agriculture-
     related business that has total assets or annual net sales of 
     $100,000,000 or more; or
       (2) any voting securities or assets of a covered person, 
     operator of a warehouse used to store agricultural 
     commodities, or other agriculture-related business with 
     annual net sales, or total assets, of $100,000,000 or more 
     are being acquired by any covered person, operator of a 
     warehouse used to store agricultural commodities, or 
     agriculture-related business with annual net sales or total 
     assets of $10,000,000 or more, if, as a result of the 
     acquisition, the acquiring person would hold an aggregate 
     total amount of the voting securities and assets of the 
     acquired person in excess of $50,000,000.
       (b) Review by the Secretary.--
       (1) In general.--Except as provided in paragraph (2), the 
     Secretary may conduct a review of any merger or acquisition 
     described in subsection (a).
       (2) Exception.--The Secretary shall conduct a review of any 
     merger or acquisition described in subsection (a) on a 
     request from a member of Congress.
       (c) Access to Records.--The Secretary may request any 
     information, including any testimony, documentary material, 
     or related information, from a covered person, operator of a 
     warehouse used to store agricultural commodities, or other 
     agriculture-related business, pertaining to any merger or 
     acquisition of any covered person, operator of a warehouse 
     used to store agricultural commodities, or other agriculture-
     related business.
       (d) Purpose of Review.--
       (1) Findings.--In conducting the review under subsection 
     (a), the Secretary shall make findings concerning whether the 
     merger or acquisition could--
       (A) be significantly detrimental to the present or future 
     viability of family farms or ranches or rural communities in 
     the areas affected by the merger or acquisition, pursuant to 
     standards established by the Secretary; or
       (B) lead to a violation of section 111(a).
       (2) Remedies.--The review may include a determination of 
     possible remedies regarding how the parties of the merger or 
     acquisition may take steps to modify their operations to 
     address the findings described in paragraph (1).
       (e) Report of Review.--
       (1) Preliminary report.--After conducting the review 
     required under subsection (b), the Secretary shall issue a 
     preliminary report to the parties of the merger or 
     acquisition and the Attorney General or the Federal Trade 
     Commission, as appropriate, which shall include findings and 
     a description of any remedies described in subsection (d)(2).
       (2) Final report.--After affording the parties described in 
     paragraph (1) an opportunity for a hearing regarding the 
     findings and any proposed remedies in the preliminary report, 
     the Secretary shall issue a final report to the President and 
     the Attorney General or the Federal Trade Commission, as 
     appropriate, with respect to the merger or acquisition.
       (f) Implementation of the Report.--Not later than 120 days 
     after the issuance of a final report described in subsection 
     (e)(2), the parties to the merger or acquisition affected by 
     the report shall--
       (1) make changes to their operations or structure to comply 
     with the findings and implement any suggested remedy or any 
     agreed-on alternative remedy; and
       (2) file a response demonstrating the compliance or 
     implementation.
       (g) Confidentiality of Information.--
       (1) In general.--Subject to paragraph (2), information used 
     by the Secretary to conduct the review required under this 
     section provided by a party to the merger or acquisition 
     under review or by a government agency shall be treated by 
     the Secretary as confidential information pursuant to section 
     1770 of the Food Security Act of 1985 (7 U.S.C. 2276).
       (2) Party to hearing.--The Secretary may share any such 
     information with the Attorney General, the Federal Trade 
     Commission, and a party seeking a hearing pursuant to 
     subsection (e)(2) with respect to information relating to the 
     party.
       (3) Report.--Subject to paragraph (1), the report issued 
     under subsection (e) shall be available to the public.
       (h) Civil Penalties.--
       (1) Original penalty.--
       (A) In general.--After affording the parties an opportunity 
     for a hearing, the Secretary may assess a civil penalty in an 
     amount not to exceed $300,000 for the failure of a person to 
     comply with the requirements of subsection (a) or (f).
       (B) Issue.--Any such hearing shall be limited to the issue 
     of the amount of the civil penalty.
       (2) Additional penalty.--
       (A) In general.--If after being assessed a civil penalty 
     under paragraph (1) a person continues to fail to meet the 
     requirements of subsection (a) or (f), the Secretary may,

[[Page S252]]

     after affording the parties an opportunity for a hearing, 
     assess a further civil penalty in an amount not to exceed 
     $100,000 for each day the person continues the violation.
       (B) Issue.--Any such hearing shall be limited to the issue 
     of the additional civil penalty assessed under this 
     paragraph.

     SEC. 113. REPORT ON CORPORATE STRUCTURE.

       (a) In General.--
       (1) Report.--A covered person with annual sales in excess 
     of $100,000,000 shall annually file with the Secretary a 
     report that describes, with respect to both domestic and 
     foreign activities, the strategic alliances, ownership in 
     other agribusiness firms or agribusiness-related firms, joint 
     ventures, subsidiaries, brand names, and interlocking boards 
     of directors with other corporations, representatives, and 
     agents that lobby Congress on behalf of the covered person, 
     as determined by the Secretary.
       (2) Contracts.--Paragraph (1) shall not apply to a 
     contract.
       (b) Civil Penalties.--
       (1) Original penalty.--
       (A) In general.--After affording the parties an opportunity 
     for a hearing, the Secretary may assess a civil penalty in an 
     amount not to exceed $100,000 for the failure of a person to 
     comply with this section.
       (B) Issue.--Any such hearing shall be limited to the issue 
     of the amount of the civil penalty
       (2) Additional penalty.--
       (A) In general.--If after being assessed a civil penalty in 
     accordance with paragraph (1) a person continues to fail to 
     meet the requirements of this section, the Secretary may, 
     after affording the parties an opportunity for a hearing, 
     assess a further civil penalty in an amount not to exceed 
     $100,000 for each day the person continues the violation.
       (B) Issue.--Any such hearing shall be limited to the amount 
     of the additional civil penalty assessed under this 
     paragraph.

     SEC. 114. MANDATORY FUNDING FOR STAFF.

       (a) In General.--Out of the funds in the Treasury not 
     otherwise appropriated, the Secretary of Treasury shall 
     provide to the Secretary of Agriculture $7,000,000 for each 
     of fiscal years 2002 through 2006, to hire, train, and 
     provide for additional staff to carry out additional 
     responsibilities under this subtitle, including a Special 
     Counsel on Fair Markets and Rural Opportunity, additional 
     attorneys for the Office of General Counsel, investigators, 
     economists, and support staff.
       (b) Availability.--The sums shall be--
       (1) made available to the Secretary without further Act of 
     appropriation; and
       (2) in addition to funds otherwise made available to the 
     Secretary for the purposes described in subsection (a).

     SEC. 115. GENERAL ACCOUNTING OFFICE STUDY.

       Not later than 1 year after the date of enactment of this 
     Act, the Comptroller General of the United States, in 
     consultation with the Attorney General, the Secretary, the 
     Federal Trade Commission, the National Association of 
     Attorney's General, and other persons, shall--
       (1) study competition in the domestic farm economy with a 
     special focus on--
       (A) protecting family farms and ranches and rural 
     communities; and
       (B) the potential for monopsony and oligopsony nationally 
     and regionally; and
       (2) provide a report to the appropriate committees of 
     Congress on--
       (A) the correlation between increases in the gap between--
       (i) retail consumer food prices;
       (ii) the prices paid to farmers and ranchers; and
       (iii) any increases in concentration among processors, 
     manufacturers, or other firms that buy from farmers and 
     ranchers;
       (B) the extent to which the use of formula pricing, 
     marketing agreements, forward contracting, and production 
     contracts tend to give processors, agribusinesses, and other 
     buyers of agricultural commodities unreasonable market power 
     over producers or suppliers in local markets;
       (C) whether the granting of process patents relating to 
     biotechnology research affecting agriculture during the past 
     20 years has tended to overly restrict related biotechnology 
     research or has tended to overly limit competition in the 
     biotechnology industries that affect agriculture in a manner 
     that is contrary to the public interest, or could do so in 
     the future;
       (D) whether acquisitions of companies that own 
     biotechnology patents and seed patents by multinational 
     companies have the potential for reducing competition in the 
     United States and unduly increasing the market power of the 
     multinational companies;
       (E) whether existing processors or agribusinesses have 
     disproportionate market power and if competition could be 
     increased if the processors or agribusinesses were required 
     to divest assets to ensure that they do not exert the 
     disproportionate market power over local markets;
       (F) the extent of increase in concentration in milk 
     processing, procurement and handling, and the potential risks 
     from that increase in concentration on--
       (i) the economic well-being of dairy farmers;
       (ii) the school lunch program; and
       (iii) other Federal nutrition programs;
       (G) the impact of mergers, acquisitions, and joint ventures 
     among dairy cooperatives on dairy farmers, including impacts 
     on both members and nonmembers of the merging cooperatives;
       (H) the impact of the significant increase in the use of 
     stock as the primary means of effectuating mergers and 
     acquisitions by large companies;
       (I) the increase in the number and size of mergers or 
     acquisitions in the United States and whether some of the 
     mergers or acquisitions would have taken place if the merger 
     or acquisition had to be consummated primarily with cash, 
     other assets, or borrowing; and
       (J) whether agricultural producers typically appear to 
     derive any benefits (such as higher prices for their products 
     or any other advantages) from right-of-first-refusal 
     provisions contained in purchase contracts or other deals 
     with agribusiness purchasers of the products.

                     Subtitle C--Contract Fairness

     SEC. 121. OBLIGATION OF GOOD FAITH.

       An agricultural contract shall carry an obligation of good 
     faith (as defined in applicable State law provisions of the 
     Uniform Commercial Code) on all parties to the agricultural 
     contract with respect to the performance and enforcement of 
     the agricultural contract.

     SEC. 122. DISCLOSURE OF RISKS AND READABILITY REQUIREMENTS 
                   UNDER AGRICULTURAL CONTRACTS.

       (a) Readability and Understandability.--
       (1) In general.--An agricultural contract shall be readable 
     and understandable, in that the agricultural contract--
       (A) shall be printed in legible type;
       (B) shall be appropriately divided into captioned sections; 
     and
       (C) shall be written in clear and coherent language using 
     words and grammar that are understandable by a person of 
     average intelligence, education, and experience within the 
     agricultural industry.
       (2) Effect.--Paragraph (1) does not preclude the use of--
       (A) a particular word, phrase, provision, or form of 
     agreement that is specifically required, recommended, or 
     endorsed by a Federal or State law (including a regulation); 
     or
       (B) a technical term that is used to describe the service 
     or property that is the subject of the agricultural contract, 
     if the term is customarily used by producers in the ordinary 
     course of business in connection with the service or property 
     described.
       (b) Disclosure Statement Requirement.--An agricultural 
     contract shall--
       (1) be accompanied by a clear written disclosure statement 
     describing the material risks faced by the producer if the 
     producer enters into the agricultural contract; and
       (2) disclose (in a manner consistent with subsection (a)), 
     provisions of the agricultural contract relating to--
       (A) duration;
       (B) termination;
       (C) renegotiation standards;
       (D) responsibility for environmental damage;
       (E) factors to be used in determining payment;
       (F) responsibility for obtaining and complying with 
     Federal, State, and local permits;
       (G) in the case of a production contract, the right of the 
     producer to cancel the production contract in accordance with 
     section 123; and
       (H) any other terms that the Secretary determines are 
     appropriate for disclosure.
       (c) Cover Sheet Requirement.--An agricultural contract 
     entered into, amended, or renewed after the date of enactment 
     of this Act shall contain as the first page, or first page of 
     text if it is preceded by a title page, a cover sheet that 
     complies with subsection (a) and contains the following:
       (1) A brief statement that the agricultural contract is a 
     legal contract between the parties to the agricultural 
     contract.
       (2) The following statement: ``READ YOUR CONTRACT 
     CAREFULLY. This cover sheet provides only a brief summary of 
     your contract. This cover sheet is not the contract, and only 
     the terms of the actual contract are legally binding. The 
     contract itself sets forth, in detail, the rights and 
     obligations of both you and the contractor or processor. IT 
     IS THEREFORE IMPORTANT THAT YOU READ YOUR CONTRACT 
     CAREFULLY.''.
       (3) A written disclosure of risks in accordance with 
     subsection (b).
       (4) In the case of a production contract, a statement 
     describing, in plain language, the right of the producer to 
     cancel the production contract in accordance with section 
     123.
       (5) An index of the major provisions of the agricultural 
     contract and the pages on which the provisions appear, 
     including--
       (A) the name of each party to the agricultural contract;
       (B) the definitions section of the agricultural contract;
       (C) the provisions governing termination, cancellation, 
     renewal, and amendment of the agricultural contract by either 
     party;
       (D) the duties and obligations of each party; and
       (E) provisions subject to change in the agricultural 
     contract.
       (d) Review by Secretary.--
       (1) Submission to secretary.--A contractor may submit an 
     agricultural contract to the Secretary for review to 
     determine whether the agricultural contract complies with 
     this section.
       (2) Action by secretary.--The Secretary shall--
       (A) in determining whether an agricultural contract or 
     cover sheet is readable, in accordance with subsection (a), 
     consider--
       (i) the simplicity of the sentence structure;

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       (ii) the extent to which commonly used and understood words 
     are employed;
       (iii) the extent to which esoteric legal terms are avoided;
       (iv) the extent to which references to other sections or 
     provisions of the agricultural contract are minimized;
       (v) the extent to which clear definitions are used; and
       (vi) any additional factors relevant to the readability or 
     understandability of the agricultural contract; and
       (B) after reviewing the agricultural contract--
       (i) certify that the agricultural contract complies with 
     this section;
       (ii) decline to certify that the agricultural contract 
     complies with this section and provide specific reasons for 
     declining to certify the agricultural contract; or
       (iii) decline to review the agricultural contract because--

       (I) the compliance of the agricultural contract with this 
     section is subject to pending litigation; or
       (II) the agricultural contract is not subject to this 
     section.

       (3) Judicial review.--An action of the Secretary under this 
     subsection shall not be subject to judicial review.
       (4) Certification.--
       (A) In general.--An agricultural contract certified under 
     this subsection shall be considered to comply with 
     subsections (a), (b), and (c).
       (B) No approval of legality or legal effect.--Certification 
     of an agricultural contract under this subsection shall not 
     constitute an approval of the legality or legal effect of the 
     agricultural contract.
       (C) Effect of approval; constructive approval.--If the 
     Secretary certifies an agricultural contract under this 
     subsection--
       (i) the agricultural contract shall be considered to be in 
     compliance with subsections (a), (b), and (c); and
       (ii) the remedies provided under subsection (e) shall not 
     be available.
       (D) Timing.--To the maximum extent practicable, the 
     Secretary shall make a decision on the certification of an 
     agricultural contract not later than 30 days after receipt of 
     the agricultural contract.
       (5) Effect of disapproval.--If the Secretary disapproves 
     the certification of an agricultural contract, the 
     agricultural contract shall be void.
       (6) Effect of failure to submit agricultural contract.--The 
     failure to submit an agricultural contract to the Secretary 
     for review under this subsection shall not be considered to 
     be a lack of good faith or to raise a presumption that the 
     agricultural contract violates this section.
       (e) Remedies for Violations.--In addition to applicable 
     remedies provided under State law, a court reviewing an 
     agricultural contract that is not certified under subsection 
     (d) may change the terms of the agricultural contract, or 
     limit a provision of the agricultural contract, to avoid an 
     unfair result if--
       (1) the court finds--
       (A) a material provision of the agricultural contract 
     violates subsection (a), (b), or (c);
       (B) the violation reasonably caused the producer to be 
     substantially confused about any of the rights, obligations, 
     or remedies of any party to the agricultural contract; and
       (C) the violation has caused or is likely to cause 
     financial detriment to the producer; and
       (2) the claim is brought before the obligations of any 
     party to the agricultural contract have been fully performed.
       (f) Limitations on Producer Actions.--
       (1) In general.--A violation of this section--
       (A) shall not entitle a producer to withhold performance of 
     an otherwise valid contractual obligation when bringing a 
     claim for relief under this section; and
       (B) is not a defense to a claim arising from the breach of 
     an agricultural contract by a producer.
       (2) Actual damages.--A producer may recover actual damages 
     caused by a violation of this section only if the violation 
     reasonably caused the producer to fail to understand a right, 
     obligation, or remedy under the agricultural contract.
       (g) Statute of Limitations.--A claim that an agricultural 
     contract violates this section shall be made not later than 6 
     years after the date on which the agricultural contract is 
     executed by the producer.

     SEC. 123. RIGHT OF CONTRACT PRODUCERS TO CANCEL PRODUCTION 
                   CONTRACTS.

       (a) In General.--A contract producer may cancel a 
     production contract by mailing a cancellation notice to the 
     contractor not later than the later of--
       (1) the date that is 3 business days after the date on 
     which the production contract is executed; or
       (2) any cancellation date specified in the production 
     contract.
       (b) Disclosure.--A production contract shall clearly 
     disclose--
       (1) the right of the contract producer to cancel the 
     production contract;
       (2) the method by which the contract producer may cancel 
     the production contract; and
       (3) the deadline for canceling the production contract.

     SEC. 124. PROHIBITION OF CONFIDENTIALITY PROVISIONS.

       (a) Prohibition.--Any provision of an agricultural contract 
     that provides that information contained in the agricultural 
     contract (other than a trade secret to which section 552 of 
     title 5, United States Code, applies) is confidential shall 
     be void.
       (b) Form.--A confidentiality provision described in 
     subsection (a) shall be void regardless of whether the 
     provision is--
       (1) express or implied;
       (2) oral or written;
       (3) required or conditional; or
       (4) contained in the agricultural contract, another 
     agricultural contract, or in a related document, policy, or 
     agreement.
       (c) Other Provisions.--This section shall not affect other 
     provisions of an agricultural contract or a related document, 
     policy, or agreement that can be given effect without the 
     voided provision.
       (d) Disclosure of Information.--This subsection does not 
     require a party to an agricultural contract to disclose 
     information in the agricultural contract to any other person.

     SEC. 125. PRODUCTION CONTRACT LIENS.

       (a) Definition of Lien Starting Date.--In this section, the 
     term ``lien starting date'' means--
       (1) in the case of an annual crop, the date on which the 
     annual crop is planted;
       (2) in the case of a perennial crop, the starting date on 
     which the perennial crop is subject to a production contract;
       (3) in the case of livestock, the date on which the 
     livestock arrive at the contract livestock facility; and
       (4) in the case of milk or any other product of live 
     livestock, the date on which the milk or other product is 
     produced.
       (b) Liens.--In the case of a production contract that 
     provides for producing an agricultural commodity by a 
     contract producer, the contract producer shall have a lien in 
     the amount owed to the contract producer under the production 
     contract on--
       (1)(A) the agricultural commodity until the agricultural 
     commodity is sold or processed (including slaughtered) by the 
     contractor; and
       (B) the cash proceeds of the sale of the agricultural 
     commodity, including any cash provided as part of the sale; 
     and
       (2) any property of the contractor that may be subject to a 
     security interest as provided in applicable State law 
     provisions based on Article 9 of the Uniform Commercial Code.
       (c) Lien Period.--A lien for the production of an 
     agricultural commodity under this section shall apply during 
     the period--
       (1) beginning on the lien starting date; and
       (2) ending 1 year after the agricultural commodity is no 
     longer under the control of the contract producer.
       (d) Central Filing System.--The Secretary shall establish a 
     central filing system for the purposes of perfecting liens 
     under this section and providing notice of the liens to the 
     public.
       (e) Perfecting Liens.--To perfect a lien for the production 
     of an agricultural commodity under this section, a contract 
     producer shall--
       (1) not later than 45 days after the lien starting date, 
     file with the Secretary a lien statement on a form prescribed 
     by the Secretary that includes--
       (A) an estimate of the amount owed under the production 
     contract;
       (B) the lien starting date;
       (C) the estimated duration of the period during which the 
     agricultural commodity will be under the control of the 
     contract producer;
       (D) the name of the party to the production contract whose 
     agricultural commodity is produced under the production 
     contract;
       (E) a description of the location of the contract 
     operation, by State, county, and township; and
       (F) the printed name and signature of the person filing the 
     form; and
       (2) pay a filing fee in an amount determined by the 
     Secretary, not to exceed $10.00.
       (f) Priority of Lien.--A lien created under this section 
     shall be superior to, and have priority over, any conflicting 
     lien or security interest in the agricultural commodity, 
     including a lien or security interest that was perfected 
     prior to the creation of the lien under this section.
       (g) Enforcement.--
       (1) Control.--Before an agricultural commodity leaves the 
     control of a contract producer, the contract producer may 
     foreclose a lien created under this section in the manner 
     provided for the foreclosure of a secured transaction under 
     applicable State law provisions based on Article 9 of the 
     Uniform Commercial Code.
       (2) Post-control.--After an agricultural commodity leaves 
     the control of the contract producer, the contract producer 
     may enforce the lien in the manner provided under applicable 
     State law provisions based Article 9 of the Uniform 
     Commercial Code.
       (h) Election of Other Remedies.--In lieu of obtaining a 
     lien under this section, a contract producer described in 
     subsection (b) may seek to collect funds due under a 
     production contract in accordance with--
       (1) the Packers and Stockyards Act, 1921 (7 U.S.C. 181 et 
     seq.); or
       (2) the Perishable Agricultural Commodities Act, 1930 (7 
     U.S.C. 499a et seq.).

     SEC. 126. PRODUCTION CONTRACTS INVOLVING INVESTMENT 
                   REQUIREMENTS.

       (a) Applicability.--This section applies only to a 
     production contract between a contract producer and a 
     contractor if the production contract requires the contract 
     producer, together with any other production contract between 
     the same parties, to make a capital investment of $100,000 or 
     more.
       (b) Restrictions on Contract Termination.--Except as 
     provided in subsection

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     (d), a contractor shall not terminate or fail to renew a 
     production contract until the contractor--
       (1) provides the contract producer with written notice of 
     the intention of the contractor to terminate or not renew the 
     production contract at least 90 days before the effective 
     date of the termination or nonrenewal; and
       (2) reimburses the contract producer for damages (based on 
     the value of the remaining useful life of the structures, 
     machinery, equipment, or other capital investment items) 
     incurred due to the termination, cancellation, or nonrenewal 
     of the production contract.
       (c) Breach of Investment Requirements.--
       (1) In general.--Except as provided in subsection (d), a 
     contractor shall not terminate or fail to renew a production 
     contract with a contract producer that materially breaches a 
     production contract, including the investment requirements of 
     a production contract, until--
       (A) the contractor provides the contract producer with a 
     written notice of termination or nonrenewal, including a list 
     of complaints alleging causes for the breach, at least 45 
     days before the effective date of the termination or 
     nonrenewal; and
       (B) the contract producer fails to remedy each cause of the 
     breach alleged in the list of complaints provided in the 
     notice not later than 30 days after receipt of the notice.
       (2) Civil actions.--An effort by a contract producer to 
     remedy a cause of an alleged breach shall not be considered 
     to be an admission of a breach in a civil action.
       (d) Exceptions.--A contractor may terminate or decline to 
     renew a production contract in accordance with applicable law 
     without notice or remedy as required in subsections (b) and 
     (c) if the basis for the termination or nonrenewal is--
       (1) a voluntary abandonment of the contractual relationship 
     by the contract producer, such as a complete failure of the 
     performance of a contract producer under the production 
     contract; or
       (2) the conviction of a contract producer of an offense of 
     fraud or theft committed against the contractor.
       (e) Penalty.--If a contractor terminates or fails to renew 
     a production contract other than as provided in this section, 
     the contractor shall pay the contract producer the value of 
     the remaining useful life of the structures, machinery, 
     equipment, or other capital investment items.

     SEC. 127. PRODUCER RIGHTS.

       (a) In General.--It shall be unlawful, in or in connection 
     with any transaction in interstate or foreign commerce, for 
     any covered person or contractor to take an action to coerce, 
     intimidate, disadvantage, retaliate against, or discriminate 
     against any producer because the producer exercises, or 
     attempts to exercise, the right of the producer--
       (1)(A) to enter into a membership agreement or marketing 
     contract with an agricultural cooperative, a processor, or 
     another producer; and
       (B) to exercise contractual rights under the membership 
     agreement or marketing contract;
       (2) to lawfully provide statements or information to the 
     Secretary, a Federal or State law enforcement agency, or any 
     other entity or person regarding improper actions or 
     violations of law by a covered person or contractor under 
     this subtitle, unless the statements or information are 
     determined to be libelous or slanderous under applicable 
     State law;
       (3) to cancel a production contract in accordance with 
     section 123;
       (4) to disclose the terms of an agricultural contract under 
     section 124;
       (5) to file, continue, terminate, or enforce a lien under 
     section 125; and
       (6) to enforce other protections provided by this subtitle 
     or other Federal or State law (including regulations).
       (b) Waivers.--Any provision of an agricultural contract 
     that waives a producer right described in subsection (a), or 
     an obligation of a covered person or contractor established 
     by this subtitle, shall be void and unenforceable.
       (c) Violations.--Section 111(b) shall apply to a violation 
     of this section.

     SEC. 128. MEDIATION.

       (a) Mediation.--
       (1) In general.--An agricultural contract shall provide for 
     resolution of disputes concerning the agricultural contract 
     by mediation.
       (2) Mediation by secretary or state mediation service.--If 
     there is a dispute involving an agricultural contract, either 
     party to the agricultural contract may make a written request 
     to the Secretary for mediation services by the Secretary or 
     by a designated State mediation service to facilitate 
     resolution of the dispute.
       (3) Hearing.--The parties to the agricultural contract 
     shall receive a release from the mediation services described 
     in paragraph (2) before the dispute may be heard by a court.
       (b) No Arbitration of Future Controversy.--A provision in 
     an agricultural contract submitting to arbitration a future 
     controversy arising between a producer and a covered person 
     or contractor shall be void.

                Subtitle D--Agricultural Fair Practices

     SEC. 131. AGRICULTURAL FAIR PRACTICES.

       The Agricultural Fair Practices Act of 1967 (7 U.S.C. 2301 
     et seq.) is amended to read as follows:

     ``SECTION 1. SHORT TITLE.

       ``This Act may be cited as the `Agricultural Fair Practices 
     Act of 1967'.

     ``SEC. 2. FINDINGS AND PURPOSE.

       ``(a) Findings.--Congress finds that--
       ``(1) agricultural products are produced in the United 
     States by many individual farmers and ranchers scattered 
     throughout the various States of the United States;
       ``(2) agricultural products in fresh or processed form move 
     in large part in the channels of interstate and foreign 
     commerce, and agricultural products that do not move in the 
     channels directly burden or affect interstate commerce;
       ``(3) the efficient production and marketing of 
     agricultural products by farmers and ranchers is of vital 
     concern to the welfare of farmers and ranchers and to the 
     general economy of the United States;
       ``(4) because agricultural products are produced by 
     numerous individual farmers and ranchers, the marketing and 
     bargaining position of individual farmers and ranchers will 
     be adversely affected unless farmers and ranchers are free to 
     join together voluntarily in cooperative organizations as 
     authorized by law; and
       ``(5) interference with the right described in paragraph 
     (4) is contrary to the public interest and adversely affects 
     the free and orderly flow of goods in interstate and foreign 
     commerce.
       ``(b) Purpose.--The purpose of this Act is to establish 
     standards of fair practices required of handlers for dealings 
     in agricultural products.

     ``SEC. 3. DEFINITIONS.

       ``In this Act:
       ``(1) Accredited association.--The term `accredited 
     association' means an association of producers accredited by 
     the Secretary in accordance with section 6.
       ``(2) Association of producers.--
       ``(A) In general.--The term `association of producers' 
     means an association of producers of agricultural products 
     that engages in the marketing of agricultural products or of 
     agricultural services described in paragraph (6)(B).
       ``(B) Inclusions.--The term `association of producers' 
     includes--
       ``(i) a cooperative association (as defined in section 
     15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)); 
     and
       ``(ii) an association described in the first section of the 
     Act entitled `An Act to authorize association of producers of 
     agricultural products' (commonly known as the `Capper-
     Volstead Act') (7 U.S.C. 291).
       ``(3) Bargain; bargaining.--The terms `bargain' and 
     `bargaining' refers to the performance of the mutual 
     obligation of a handler and an accredited association to meet 
     at reasonable times and for reasonable periods of time for 
     the purpose of negotiating in good faith with respect to the 
     price, terms of sale, compensation for products produced or 
     services rendered under contract, or other provisions 
     relating to the products marketed, or the services rendered, 
     by the members of the accredited association or by the 
     accredited association as agent for the members.
       ``(4) Designated handler.--The term `designated handler' 
     means a handler that is designated in accordance with section 
     6.
       ``(5) Handler.--
       ``(A) In general.--The term `handler' means any person 
     engaged in the business or practice of--
       ``(i) acquiring agricultural products from producers or 
     associations of producers for processing or sale;
       ``(ii) grading, packaging, handling, storing, or processing 
     agricultural products received from producers or associations 
     of producers;
       ``(iii) contracting or negotiating contracts or other 
     arrangements, written or oral, with or on behalf of producers 
     or associations of producers with respect to the production 
     or marketing of any agricultural product; or
       ``(iv) acting as an agent or broker for a handler in the 
     performance of any function or act described in clause (i), 
     (ii), or (iii).
       ``(B) Exclusions.--The term ``handler'' does not include--
       ``(i) any person (other than an agricultural cooperative) 
     engaged in a business or practice described in subparagraph 
     (A) if the gross revenue derived by the person from the 
     business or activity is less than $10,000,000 per year; or
       ``(ii) any agricultural cooperative engaged in a business 
     or practice described in subparagraph (A) if the gross 
     revenue derived by the person from the business or activity 
     is less than $1,000,000 per year.
       ``(6) Producer.--
       ``(A) In general.--The term `producer' means a person 
     engaged in the production of agricultural products as a 
     farmer, planter, rancher, dairyman, poultryman, or fruit, 
     vegetable, or nut grower.
       ``(B) Inclusions.--The term `producer' includes a person 
     that contributes labor, production management, facilities, or 
     other services for the production of an agricultural product.
       ``(7) Person.--The term `person' includes an individual, 
     partnership, corporation, and association.
       ``(8) Secretary.--The term `Secretary' means the Secretary 
     of Agriculture.

     ``SEC. 4. PROHIBITED PRACTICES.

       ``It shall be unlawful for any handler knowingly to, or 
     knowingly to permit any employee or agent to--
       ``(1) interfere with, restrain, or coerce any producer in 
     the exercise of the right of the producer to join and belong 
     to, or to refrain

[[Page S255]]

     from joining or belonging to, an association of producers, or 
     to refuse to deal with any producer because of the exercise 
     of the right of the producer to join and belong to the 
     association;
       ``(2) discriminate against any producer with respect to 
     price, quantity, quality, or other terms of purchase, 
     acquisition, or other handling of an agricultural product 
     because of the membership of the producer in, or the contract 
     of the producer with, an association of producers;
       ``(3) coerce or intimidate any producer to enter into, 
     maintain, breach, cancel, or terminate a membership agreement 
     or marketing contract with an association of producers or a 
     contract with a handler;
       ``(4) pay or loan money, give any thing of value, or offer 
     any other inducement or reward to a producer for refusing to 
     or ceasing to belong to an association of producers;
       ``(5) make false reports about the finances, management, or 
     activities of an association of producers or handlers;
       ``(6) conspire, combine, agree, or arrange with any other 
     person to do, or aid or abet the performance of, any act made 
     unlawful by this Act;
       ``(7) refuse to bargain in good faith with an accredited 
     association, if the handler is a designated handler; or
       ``(8) dominate or interfere with the formation or 
     administration of any association of producers or to 
     contribute financial or other support to an association of 
     producers.

     ``SEC. 5. BARGAINING IN GOOD FAITH.

       ``(a) Clarification of Obligation.--
       ``(1) In general.--The obligation of a designated handler 
     to bargain in good faith shall apply with respect to an 
     accredited association and the products or services for which 
     the accredited association is accredited to bargain.
       ``(2) Agreements or concessions.--The good faith bargaining 
     required between a handler and an accredited association 
     shall not require either party to agree to a proposal or to 
     make a concession.
       ``(b) Extension of Same Terms to Accredited Association.--
       ``(1) In general.--If a designated handler purchases a 
     product or service from producers under terms more favorable 
     to the producers than the terms negotiated with an accredited 
     association for the same type of product or service, the 
     handler shall offer the same terms to the accredited 
     association.
       ``(2) Violations.--Failure to extend the same terms to the 
     accredited association shall be considered to be a violation 
     of section 4(g).
       ``(3) Factors.--In comparing terms, the Secretary shall 
     consider--
       ``(A) the stipulated purchase price;
       ``(B) any bonuses, premiums, hauling, or loading 
     allowances;
       ``(C) reimbursement of expenses;
       ``(D) payment for special services of any character that 
     may be paid by the handler; and
       ``(E) any amounts paid or agreed to be paid by the handler 
     for any designated purpose other than payment of the purchase 
     price.
       ``(c) Mediation.--The Secretary may provide mediation 
     services with respect to bargaining between an accredited 
     association and a designated handler at the request of the 
     accredited association or designated handler.

     ``SEC. 6. ACCREDITATION OF ASSOCIATIONS AND DESIGNATION OF 
                   HANDLERS.

       ``(a) Accreditation Petition.--
       ``(1) In general.--An association of producers seeking 
     accreditation to bargain on behalf of producers of an 
     agricultural product or service shall submit to the Secretary 
     a petition for accreditation.
       ``(2) Content.--The petition shall--
       ``(A) specify each agricultural product or service for 
     which the association seeks accreditation to bargain on 
     behalf of producers;
       ``(B) designate the handlers, individually, by production 
     or marketing area, or by some other appropriate general 
     classification, with whom the association seeks to be 
     accredited to bargain; and
       ``(C) contain such other information and documents as may 
     be required by the Secretary.
       ``(b) Notice of Petition; Proceedings.--
       ``(1) In general.--On receiving a petition under subsection 
     (a) and any supporting material, the Secretary shall provide 
     notice of the petition to all handlers designated in the 
     petition under subsection (a)(2)(B).
       ``(2) Individual handlers.--The Secretary shall provide 
     personal notice under this subsection to a handler that has 
     been designated individually.
       ``(3) General classifications.--The Secretary shall provide 
     notice through the Federal Register to handlers that have 
     been designated by production or marketing area or by some 
     other general classification.
       ``(4) Opportunity to respond.--The association of producers 
     seeking accreditation and the handlers shall have an 
     opportunity to submit written evidence, views, and arguments 
     to the Secretary.
       ``(5) Proceedings.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the Secretary may conduct an informal proceeding on the 
     petition.
       ``(B) Formal hearings.--The Secretary shall hold a formal 
     hearing for the reception of testimony and evidence if the 
     Secretary finds that there are substantial unresolved issues 
     of material fact.
       ``(c) Issuance of Accreditation Order.--On the petition of 
     an association of producers, the Secretary may issue an order 
     designating the association of producers as an accredited 
     association for the purposes of this Act if the Secretary 
     determines that--
       ``(1) under the charter documents or bylaws of the 
     association, the accredited association is owned and 
     controlled by producers;
       ``(2) the association has contracts, binding under State 
     law, with the members of the association empowering the 
     association to sell or negotiate terms of sale of the 
     products or services of the members;
       ``(3) the association represents a sufficient number of 
     producers, or the members of the association produce a 
     sufficient quantity of agricultural products or render a 
     sufficient level of services, to enable the association to 
     function as an effective agent for producers in bargaining 
     with designated handlers;
       ``(4) the functions of the association include acting as 
     principal or agent for the members of the association in 
     negotiations with handlers for prices and other terms of 
     trade with respect to the production, sale, and marketing of 
     products or services of the members; and
       ``(5) the association is acting in good faith with respect 
     to the members of the association and is complying with this 
     Act.
       ``(d) Notification of Accreditation Order.--
       ``(1) In general.--The Secretary shall notify the 
     petitioning association of producers, and each handler to be 
     designated as part of the petition, of the decision of the 
     Secretary regarding the petition and provide a concise 
     statement of the basis for the decision.
       ``(2) Other associations.--The Secretary shall provide 
     notice of an accreditation of an association to all other 
     associations that have been accredited to bargain with 
     respect to the product or service with any of the designated 
     handlers of the association.
       ``(e) Annual Report.--Each accredited association shall 
     submit to the Secretary an annual report in such form and 
     including such information as the Secretary by regulation may 
     require to enable the Secretary to determine whether the 
     association is meeting the standards for accreditation.
       ``(f) Loss of Accreditation.--
       ``(1) In general.--If the Secretary determines that an 
     accredited association has ceased to meet the standards for 
     accreditation under subsection (c), the Secretary shall--
       ``(A) notify the association of the manner in which the 
     association is deficient in maintaining the standards for 
     accreditation; and
       ``(B) allow the association a reasonable period of time to 
     answer or correct the deficiencies.
       ``(2) Hearing.--After providing notice and a corrective 
     period in accordance with paragraph (1), if the Secretary is 
     not satisfied that the association is in compliance with 
     subsection (c), the Secretary shall--
       ``(A) notify the association of the continued deficiencies; 
     and
       ``(B) hold a hearing to consider the revocation of 
     accreditation.
       ``(3) Revocation.--If, based on the evidence submitted at 
     the hearing, the Secretary finds that the association has 
     ceased to maintain the standards for accreditation, the 
     Secretary shall revoke the accreditation of the association.
       ``(g) Amendment.--
       ``(1) In general.--At the option of the Secretary or on the 
     petition of an accredited association or a designated 
     handler, the Secretary may amend an accreditation order with 
     respect to the product or service specified in the 
     accreditation order.
       ``(2) Notice.--The Secretary shall provide--
       ``(A) notice of any proposed amendment and the reasons for 
     the amendment to all accredited associations and handlers 
     that would be directly affected by the amendment; and
       ``(B) an opportunity for a public hearing.
       ``(3) Authority.--After providing notice and an opportunity 
     for a hearing in accordance with paragraph (2), the Secretary 
     may amend the accreditation order if the Secretary finds that 
     the amendment will be conducive to more effective bargaining 
     and orderly marketing by the accredited association of the 
     product or services of the members of the accredited 
     association.

     ``SEC. 7. ASSIGNMENT OF ASSOCIATION DUES AND FEES.

       ``(a) In General.--A producer of an agricultural product or 
     service may execute, as a clause in a sales contract or in 
     another written instrument, an assignment of dues or fees to, 
     or the deduction of a sum to be retained by, an association 
     of producers authorized by contract to represent the 
     producer, under which assignment a handler shall--
       ``(1) deduct a portion of the amount to be paid for 
     products or services of the producer under a growing 
     contract; and
       ``(2) pay, on behalf of the producer, the portion over to 
     the association as dues or fees or a sum to be retained by 
     the association.
       ``(b) Duty of Handler.--After a handler receives notice 
     from a producer of an assignment under subsection (a), the 
     handler shall--
       ``(1) deduct the amount authorized by the assignment from 
     the amount paid for any agricultural product sold by the 
     producer or for any service rendered under any growing 
     contract; and
       ``(2) on payment to producers for the product or service, 
     pay the amount over to the association or the assignee of the 
     association.

[[Page S256]]

     ``SEC. 8. POWERS OF SECRETARY.

       ``(a) Records and Information.--
       ``(1) Maintenance.--The Secretary may require any person 
     covered by this Act to establish and maintain such records, 
     make such reports, and provide such other information as the 
     Secretary may reasonably require to carry out this Act.
       ``(2) Access.--The Secretary and any officer or employee of 
     the Department of Agriculture, on presentation of credentials 
     and a warrant or such other order of a court--
       ``(A) shall have a right of entry to, on, or through any 
     premises in which records required to be maintained under 
     paragraph (1) are located; and
       ``(B) may at reasonable times have access to and copy any 
     records that any person is required to maintain or that 
     relate to any matter under this Act under investigation or in 
     question.
       ``(b) Complaints.--If the Secretary has reason to believe 
     (whether through investigation or petition by any person) 
     that any person has violated this Act, the Secretary shall 
     cause a complaint to be served on the person--
       ``(1) stating the reasons for the alleged violation of this 
     Act; and
       ``(2) requiring the person to attend and testify at a 
     hearing to be held not earlier than 30 days after the date of 
     service of the complaint.
       ``(c) Hearing.--
       ``(1) In general.--The Secretary may hold hearings, sign 
     and issue subpoenas, administer oaths, examine witnesses, 
     receive evidence, and require the attendance and testimony of 
     witnesses and the production of such accounts, records, and 
     memoranda, as the Secretary considers necessary to determine 
     whether a violation of this Act has occurred.
       ``(2) Right to hearing.--A person may request a hearing if 
     the person is subject to a penalty under this Act.
       ``(3) Respondents' rights.--During a hearing, the person 
     complained of shall be given, in accordance with regulations 
     promulgated by the Secretary, the opportunity--
       ``(A) to be informed of the evidence against the person;
       ``(B) to cross-examine witnesses; and
       ``(C) to present evidence.
       ``(4) Hearing limitation.--The issues at any hearing held 
     or requested under this section shall be limited in scope to 
     matters directly related to the purpose for which the hearing 
     was held or requested.
       ``(d) Report of Finding and Penalties.--
       ``(1) In general.--If, after a hearing, the Secretary finds 
     that a person has violated this Act, the Secretary shall 
     make, and provide to the person, a written report that states 
     the findings of fact and includes an order requiring the 
     person to cease and desist from committing the violation.
       ``(2) Civil penalty.--The Secretary may assess a civil 
     penalty not to exceed $100,000 for each violation of this 
     Act.
       ``(e) Injunctions; Finality and Appealability of an 
     Order.--
       ``(1) Injunctions.--At any time after a complaint is served 
     on a person under subsection (b), the court, on application 
     of the Secretary, may issue an injunction, restraining to the 
     extent the court determines to be appropriate, the person and 
     the officers, directors, agents, and employees of the person 
     from violating this Act.
       ``(2) Appealability of an order.--An order issued under 
     this section shall be final and conclusive unless, within 30 
     days after service of the order, the affected handler 
     petitions to appeal the order to the United States court of 
     appeals for the circuit in which the handler resides or has 
     its principal place of business or the United States Court of 
     Appeals for the District of Columbia Circuit.
       ``(3) Delivery of petition.--
       ``(A) In general.--The clerk of the court shall immediately 
     cause a copy of any petition filed under paragraph (2) to be 
     delivered to the Secretary.
       ``(B) Record.--On receipt of the petition, the Secretary 
     shall file in the court the record of the proceedings under 
     this section.
       ``(4) Penalty for failure to obey an order.--
       ``(A) In general.--Any person that fails to obey an order 
     of the Secretary issued under this section after the order 
     becomes final shall be fined not less than $5,000 and not 
     more than $100,000 for each offense.
       ``(B) Separate offenses.--Each day during which the failure 
     continues shall be considered to be a separate offense.

     ``SEC. 9. ENFORCEMENT.

       ``(a) Civil Actions by Aggrieved Persons.--
       ``(1) Preventive relief.--Whenever any handler has engaged 
     or there are reasonable grounds to believe that any handler 
     is about to engage in any act or practice prohibited by this 
     Act, a civil action for preventive relief, including an 
     application for a permanent or temporary injunction, 
     restraining order, or other order, may be instituted by the 
     person aggrieved.
       ``(2) Attorney's fees.--In any action commenced under 
     paragraph (1), the court may allow the prevailing party a 
     reasonable attorney's fee as part of the costs.
       ``(3) Security.--The court may provide that no restraining 
     order or preliminary injunction shall issue unless security 
     is provided by the applicant, in such sum as the court 
     determines to be appropriate, for the payment of such costs 
     and damages as may be incurred or suffered by any party that 
     is found to have been wrongfully enjoined or restrained.
       ``(b) Civil Actions by Injured Persons.--
       ``(1) In general.--Any person injured in the business or 
     property of the person by reason of any violation of, or 
     combination or conspiracy to violate, this Act may--
       ``(A) sue for the violation in the appropriate United 
     States district court without respect to the amount in 
     controversy; and
       ``(B) recover damages sustained.
       ``(2) Attorney's fees.--In any action commenced under 
     paragraph (1), the court may allow the prevailing party a 
     reasonable attorney's fee as part of the costs.
       ``(3) Limitation on actions.--Any action to enforce any 
     cause of action under this subsection shall be barred unless 
     commenced within 2 years after the cause of action occurred.
       ``(c) Jurisdiction of District Courts.--
       ``(1) In general.--A United States district court shall 
     have jurisdiction over an action brought under this section.
       ``(2) Limitations.--No action may be commenced under 
     subsection (a) or (b)--
       ``(A) prior to 60 days after the plaintiff has given notice 
     of the alleged violation to the Secretary through a petition 
     under section 8(b); or
       ``(B) if the Secretary has commenced and is diligently 
     prosecuting an action (administrative or judicial) dealing 
     with the same violation to require compliance with the Act.
       ``(d) Judicial Review.--An order of the Secretary with 
     respect to which review could have been obtained under 
     section 8(e)(2) shall not be subject to judicial review in 
     any proceeding for enforcement under this section.

     ``SEC. 10. PREEMPTION.

       ``(a) In General.--Except as expressly provided in this 
     Act, this Act does not invalidate the provisions of any State 
     law dealing with the same subject as this Act.
       ``(b) State Courts.--This Act shall not deprive a State 
     court of jurisdiction under a State law dealing with the same 
     subject as this Act.''.

                       Subtitle E--Implementation

     SEC. 141. RELATIONSHIP TO STATE LAW.

       (a) In General.--Except as expressly provided in this 
     title, this title does not invalidate any provision of State 
     law dealing with the same subject as this title.
       (b) State Courts.--This title does not deprive a State 
     court of jurisdiction under a State law dealing with the same 
     subject as this title.

     SEC. 142. REGULATIONS.

       The Secretary shall promulgate such regulations as are 
     appropriate to carry out this title and the amendments made 
     by this title.

     SEC. 143. IMPLEMENTATION PLAN.

       Not later than 180 days after the date of enactment of this 
     Act, the Secretary and the Attorney General shall develop and 
     implement a plan to enable the Secretary, where appropriate, 
     to file civil actions, including temporary injunctions, to 
     enforce orders issued by the Secretary under this title and 
     the Agricultural Fair Practices Act of 1967 (as amended by 
     section 131).

     SEC. 144. EFFECTIVE DATE.

       (a) In General.--Except as provided in subsection (b), this 
     title and the amendments made by this title take effect on 
     the date of enactment of this Act.
       (b) Agricultural Contracts.--
       (1) In general.--Except as provided in paragraph (2), 
     subtitle C applies to an agricultural contract in force on or 
     after the date of enactment of this Act, regardless of the 
     date on which the agricultural contract is executed.
       (2) Exceptions.--Sections 122, 123, 126, 127(a)(5), and 
     128(a) shall apply only to an agricultural contract that is 
     executed or substantively amended after the date of enactment 
     of this Act.
     TITLE II--NATIONAL RURAL COOPERATIVE AND BUSINESS EQUITY FUND

     SEC. 201. NATIONAL RURAL COOPERATIVE AND BUSINESS EQUITY 
                   FUND.

       The Consolidated Farm and Rural Development Act (7 U.S.C. 
     1921 et seq.) is amended by adding at the end the following:
   ``Subtitle F--National Rural Cooperative and Business Equity Fund

     ``SEC. 391A. SHORT TITLE.

       ``This subtitle may be cited as the `National Rural 
     Cooperative and Business Equity Fund Act'.

     ``SEC. 391B. PURPOSE.

       ``The purpose of this subtitle is to revitalize rural 
     communities and enhance farm income through sustainable rural 
     business development by providing Federal funds and credit 
     enhancements to a private equity fund in order to encourage 
     investments by institutional and noninstitutional investors 
     for the benefit of rural America.

     ``SEC. 391C. DEFINITIONS.

       ``In this subtitle:
       ``(1) Authorized private investor.--The term `authorized 
     private investor' means an individual, legal entity, or 
     affiliate or subsidiary of an individual or legal entity 
     that--
       ``(A) is eligible to receive a loan guarantee under this 
     title;
       ``(B) is eligible to receive a loan guarantee under the 
     Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.);
       ``(C) is created under the National Consumer Cooperative 
     Bank Act (12 U.S.C. 3011 et seq.);
       ``(D) is an insured depository institution; or
       ``(E) is determined by the Fund to be an appropriate 
     investor in the Fund.

[[Page S257]]

       ``(2) Board.--The term `Board' means the board of directors 
     of the Fund established under section 391G.
       ``(3) Fund.--The term `Fund' means the National Rural 
     Cooperative and Business Equity Fund established under 
     section 391D.
       ``(4) Group of similar investors.--The term `group of 
     similar investors' means any 1 of the following:
       ``(A) Insured depository institutions with total assets of 
     more than $250,000,000.
       ``(B) Insured depository institutions with total assets 
     equal to or less than $250,000,000.
       ``(C) Farm Credit System institutions under the Farm Credit 
     Act of 1971 (12 U.S.C. 2001 et seq.).
       ``(D) Cooperative financial institutions (other than Farm 
     Credit System institutions).
       ``(E) Authorized private investors, other than those 
     described in subparagraphs (A) through (D).
       ``(F) Other nonprofit organizations, including credit 
     unions.
       ``(5) Insured depository institution.--The term `insured 
     depository institution' means any bank or savings association 
     the deposits of which are insured under the Federal Deposit 
     Insurance Act (12 U.S.C. 1811 et seq.).
       ``(6) Rural area.--The term `rural area' means an area that 
     is located--
       ``(A) outside a standard metropolitan statistical area; or
       ``(B) within a community that has a population of 50,000 
     individuals or fewer.
       ``(7) Rural business.--The term `rural business' means a 
     rural cooperative, a value-added agricultural enterprise, or 
     any other business located or locating in a rural area.

     ``SEC. 391D. ESTABLISHMENT OF THE FUND.

       ``(a) In General.--
       ``(1) Authority to establish.--A group of authorized 
     private investors may establish, as a non-Federal entity 
     under State law, and manage a fund to be known as the 
     `National Rural Cooperative and Business Equity Fund', to 
     raise and provide equity capital to rural businesses.
       ``(2) Composition of group.--The group of authorized 
     private investors referred to in paragraph (1) shall be 
     composed, to the maximum extent practicable, of 
     representatives of a majority of groups of similar investors.
       ``(b) Purposes.--The purposes of the Fund shall be--
       ``(1) to strengthen the economy of rural areas;
       ``(2) to further sustainable rural business development;
       ``(3) to encourage start-up rural businesses, increased 
     opportunities for small and minority-owned rural businesses, 
     and the formation of new rural businesses;
       ``(4) to enhance rural employment opportunities;
       ``(5) to provide equity capital to rural businesses that 
     have been unable to obtain equity capital; and
       ``(6) to leverage non-Federal funds for rural businesses.
       ``(c) Articles of Incorporation and By-Laws.--The articles 
     of incorporation and by-laws of the Fund shall set forth 
     purposes of the Fund that are consistent with subsection (b).

     ``SEC. 391E. INVESTMENT IN THE FUND.

       ``(a) In General.--The Secretary, using funds of the 
     Commodity Credit Corporation, shall--
       ``(1) subject to subsection (b)(1), make available to the 
     Fund $50,000,000 for each of fiscal years 2001 through 2003;
       ``(2) subject to subsection (c), guarantee 50 percent of 
     each investment made by an authorized private investor in the 
     Fund; and
       ``(3) subject to subsection (d), guarantee the repayment of 
     principal to authorized private investors in debentures 
     issued by the Fund.
       ``(b) Private Investment.--
       ``(1) Matching requirement.--Under subsection (a)(1), the 
     Secretary shall make an amount available to the Fund only 
     after an equal amount has been invested in the Fund by 
     authorized private investors in accordance with this subtitle 
     and the terms and conditions set forth in the by-laws of the 
     Fund.
       ``(2) Investments by insured depository institutions.--
     Investments in the Fund by an insured depository institution 
     shall be considered part of the record of the insured 
     depository institution for meeting the credit needs of its 
     entire community for the purposes of Federal law.
       ``(c) Guarantee of Private Investments.--
       ``(1) In general.--The Secretary shall guarantee, under 
     terms and conditions determined by the Secretary, 50 percent 
     of any loss of the principal of an investment made in the 
     Fund by an authorized private investor.
       ``(2) Maximum total guarantee.--The aggregate liability of 
     the Secretary with respect to all guarantees under paragraph 
     (1) shall not apply to more than $300,000,000 in private 
     investments.
       ``(3) Redemption of guarantee.--
       ``(A) Date.--An authorized private investor in the Fund may 
     redeem a guarantee under paragraph (1), with respect to the 
     total investments in the Fund and the total losses of the 
     authorized private investor as of the date of redemption--
       ``(i) on the date that is 5 years after the date of 
     incorporation of the Fund; or
       ``(ii) annually thereafter.
       ``(B) Effect of redemption.--On redemption of a guarantee 
     under subparagraph (A)--
       ``(i) the shares in the Fund of the authorized private 
     investor shall be redeemed; and
       ``(ii) the authorized private investor shall be prohibited 
     from making any future investment in the Fund.
       ``(d) Debt.--
       ``(1) In general.--The Fund may, at the discretion of the 
     Board, raise additional capital through the issuance of 
     debentures and through other means determined to be 
     appropriate by the Board.
       ``(2) Guarantee of debt by secretary.--
       ``(A) In general.--The Secretary may guarantee 100 percent 
     of the principal of, and accrued interest on, debentures 
     issued by the Fund that are approved by the Secretary.
       ``(B) Maximum debt guaranteed by secretary.--The 
     outstanding value of debentures issued by the Fund and 
     guaranteed by the Secretary shall not exceed the lesser of--
       ``(i) the amount equal to twice the value of the assets 
     held by the Fund; or
       ``(ii) $500,000,000.
       ``(C) Recapture of guarantee payments.--If the Secretary 
     makes a payment on a debenture issued by the Fund as a result 
     of a guarantee of the Secretary under this paragraph, the 
     Secretary shall have priority over other creditors for 
     repayment of the debenture.
       ``(3) Authorized private investors.--An authorized private 
     investor may purchase debentures and other securities issued 
     by the Fund.

     ``SEC. 391F. INVESTMENTS AND OTHER ACTIVITIES OF THE FUND.

       ``(a) Investments.--
       ``(1) In general.--
       ``(A) Types.--Subject to subparagraphs (B) and (C), the 
     Fund may--
       ``(i) make equity investments in an entity that meets the 
     requirements of paragraph (6) and such other requirements as 
     the Board may establish; and
       ``(ii) extend credit to such an entity in--

       ``(I) the form of mezzanine debt or subordinated debt; or
       ``(II) any other form of quasi-equity.

       ``(B) Limitation on equity investments.--After the initial 
     equity investment in an entity described in subparagraph 
     (A)(i), the Fund may not make additional equity investments 
     in the entity if the additional equity investments would 
     result in the Fund owning more than 30 percent of the equity 
     of the entity.
       ``(C) Limitation on nonequity investments.--Except in the 
     case of a project to assist a rural cooperative, the total 
     amount of nonequity investments described in subparagraph 
     (A)(ii) that may be provided by the Fund shall not exceed 20 
     percent of the total investments of the Fund in the project.
       ``(2) Procedures.--The Fund shall implement procedures to 
     ensure that--
       ``(A) the financing arrangements of the Fund meet the 
     Fund's primary focus of providing equity capital; and
       ``(B) the Fund does not compete with conventional sources 
     of credit.
       ``(3) Diversity of projects.--The Fund--
       ``(A) shall seek to make equity investments in a variety of 
     viable projects, with a significant share of investments--
       ``(i) in smaller projects in rural communities of diverse 
     sizes; and
       ``(ii) in cooperative and noncooperative enterprises; and
       ``(B) shall be managed in such a way as to diversify the 
     risks to the Fund among a variety of projects.
       ``(4) Limitation on rural businesses assisted.--The Fund 
     shall not invest in any rural business that is primarily 
     retail in nature (as determined by the Board), other than a 
     purchasing cooperative.
       ``(5) Interest rate limitations.--Returns on investments in 
     and by the Fund and returns on the extension of credit by 
     participants in projects assisted by the Fund, shall not be 
     subject to any State or Federal law establishing a maximum 
     allowable interest rate.
       ``(6) Requirements for recipients.--
       ``(A) Other investments.--Any recipient of amounts from the 
     Fund shall make or obtain a significant investment from a 
     source of capital other than the Fund.
       ``(B) Sponsorship.--Rural business investment projects to 
     be considered for an equity investment from the Fund shall be 
     sponsored by a regional, State, or local sponsoring or 
     endorsing organization such as--
       ``(i) a financial institution;
       ``(ii) a development organization; or
       ``(iii) any other established entity engaging or assisting 
     in rural business development, including a rural cooperative.
       ``(b) Technical Assistance.--The Board shall use not less 
     than 1 percent of the net earnings of the Fund to provide 
     technical assistance to rural businesses seeking an equity 
     investment from the Fund.
       ``(c) Annual Audit.--
       ``(1) In general.--The Board shall authorize an annual 
     audit of the financial statements of the Fund by a nationally 
     recognized auditing firm using generally accepted auditing 
     procedures.
       ``(2) Availability of audit results.--The results of the 
     audit required by paragraph (1) shall be made available to 
     investors in the Fund.
       ``(d) Annual Report.--The Board shall prepare and make 
     available to the public an annual report that--
       ``(1) describes the projects funded with amounts from the 
     Fund;
       ``(2) specifies the recipients of amounts from the Fund;
       ``(3) specifies the co-investors in all projects that 
     receive amounts from the Fund; and

[[Page S258]]

       ``(4) meets the reporting requirements, if any, of the 
     State under the law of which the Fund is established.
       ``(e) Other Authorities.--The Board may exercise such other 
     authorities as are necessary to carry out this subtitle.

     ``SEC. 391G. GOVERNANCE OF THE FUND.

       ``(a) In General.--The Fund shall be governed by a board of 
     directors that represents all of the authorized private 
     investors in the Fund and the Federal Government and that 
     consists of--
       ``(1) the Secretary or a designee;
       ``(2) 2 members who are appointed by the Secretary and are 
     not Federal employees, including--
       ``(A) 1 member with expertise in venture capital 
     investment; and
       ``(B) 1 member with expertise in cooperative development;
       ``(3) 8 members who are elected by the authorized private 
     investors with investments in the Fund; and
       ``(4) 1 member who is appointed by the Board and who is a 
     community banker from an insured depository institution with 
     total assets equal to or less than $250,000,000.
       ``(b) Limitation on Voting Control.--No individual investor 
     or group of similar investors may control more than 25 
     percent of the votes on the Board.''.
                 TITLE III--COUNTRY OF ORIGIN LABELING

     SEC. 301. COUNTRY OF ORIGIN LABELING.

       The Agricultural Marketing Act of 1946 (7 U.S.C. 1621 et 
     seq.) is amended by adding at the end the following:
                ``Subtitle C--Country of Origin Labeling

     ``SEC. 271. DEFINITIONS.

       ``In this subtitle:
       ``(1) Beef.--The term `beef' means meat produced from 
     cattle (including veal).
       ``(2) Covered commodity.--The term `covered commodity' 
     means--
       ``(A) muscle cuts of beef, lamb, and pork;
       ``(B) ground beef, ground lamb, and ground pork; and
       ``(C) a perishable agricultural commodity.
       ``(3) Food service establishment.--The term `food service 
     establishment' means a restaurant, cafeteria, lunch room, 
     food stand, saloon, tavern, bar, lounge, or other similar 
     facility operated as an enterprise engaged in the business of 
     selling food to the public.
       ``(4) Lamb.--The term `lamb' means meat, other than mutton, 
     produced from sheep.
       ``(5) Packer.--The term `packer' has the meaning given the 
     term in section 201 of the Packers and Stockyards Act, 1921 
     (7 U.S.C. 191).
       ``(6) Perishable agricultural commodity; retailer.--The 
     terms `perishable agricultural commodity' and `retailer' have 
     the meanings given the terms in section 1(b) of the 
     Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 
     499a(b)).
       ``(7) Pork.--The term `pork' means meat produced from hogs.
       ``(8) Secretary.--The term `Secretary' means the Secretary 
     of Agriculture, acting through the Agricultural Marketing 
     Service.

     ``SEC. 272. NOTICE OF COUNTRY OF ORIGIN.

       ``(a) In General.--
       ``(1) Requirement.--Except as provided in subsection (b), a 
     retailer of a covered commodity shall inform consumers, at 
     the final point of sale of the covered commodity to 
     consumers, of the country of origin of the covered commodity.
       ``(2) United states country of origin.--A retailer of a 
     covered commodity (other than a perishable agricultural 
     commodity) may designate the covered commodity as having a 
     United States country of origin only if the covered commodity 
     is exclusively from an animal that is exclusively born, 
     raised, and slaughtered in the United States.
       ``(b) Exemption for Food Service Establishments.--
     Subsection (a) shall not apply to a covered commodity if the 
     covered commodity is--
       ``(1) prepared or served in a food service establishment; 
     and
       ``(2)(A) offered for sale or sold at the food service 
     establishment in normal retail quantities; or
       ``(B) served to consumers at the food service 
     establishment.
       ``(c) Method of Notification.--
       ``(1) In general.--The information required by subsection 
     (a) may be provided to consumers by means of a label, stamp, 
     mark, placard, or other clear and visible sign on the covered 
     commodity or on the package, display, holding unit, or bin 
     containing the commodity at the final point of sale to 
     consumers.
       ``(2) Labeled commodities.--If the covered commodity is 
     already individually labeled for retail sale regarding 
     country of origin by the packer, importer, or another person, 
     the retailer shall not be required to provide any additional 
     information to comply with this section.
       ``(d) Audit Verification System.--The Secretary may require 
     by regulation that any person that prepares, stores, handles, 
     or distributes a covered commodity for retail sale maintain a 
     verifiable recordkeeping audit trail that will permit the 
     Secretary to ensure compliance with the regulations 
     promulgated under section 274.
       ``(e) Information.--A packer and any other person engaged 
     in the business of supplying a covered commodity to a 
     retailer shall provide information to the retailer indicating 
     the country of origin of the covered commodity.

     ``SEC. 273. ENFORCEMENT.

       ``Section 253 shall apply to a violation of this subtitle.

     ``SEC. 274. REGULATIONS.

       ``(a) In General.--The Secretary shall promulgate such 
     regulations as are necessary to carry out this subtitle.
       ``(b) Partnerships With States.--In promulgating the 
     regulations, the Secretary shall, to the maximum extent 
     practicable, enter into partnerships with States with 
     enforcement infrastructure to carry out this subtitle.

     ``SEC. 275. APPLICATION.

       ``This subtitle shall apply to the retail sale of a covered 
     commodity beginning on the date that is 180 days after the 
     date of the enactment of this subtitle.''.
         TITLE IV--MARKETING ASSISTANCE LOAN RATE EQUALIZATION

     SEC. 401. LOAN RATES FOR MARKETING ASSISTANCE LOANS.

       Section 132 of the Agricultural Market Transition Act (7 
     U.S.C. 7232) is amended to read as follows:

     ``SEC. 132. LOAN RATES FOR MARKETING ASSISTANCE LOANS.

       ``(a) Wheat.--The loan rate for a marketing assistance loan 
     under section 131 for wheat shall be based on 80 percent of 
     the average full economic cost of production per bushel 
     (based on yield per planted acre), as determined by the 
     Secretary, for the immediately preceding 3 crops of wheat.
       ``(b) Feed Grains.--
       ``(1) Corn.--The loan rate for a marketing assistance loan 
     under section 131 for corn shall be based on 80 percent of 
     the average full economic cost of production per bushel 
     (based on yield per planted acre), as determined by the 
     Secretary, for the immediately preceding 3 crops of corn.
       ``(2) Other feed grains.--
       ``(A) In general.--Subject to subparagraph (B), the loan 
     rate for a marketing assistance loan under section 131 for 
     grain sorghum, barley, and oats, individually, shall be 
     established at such level as the Secretary determines is fair 
     and reasonable in relation to the rate that loans are made 
     available for corn, taking into consideration the feeding 
     value of the commodity in relation to corn.
       ``(B) Basis.--The loan rate for a marketing assistance loan 
     under section 131 for grain sorghum, barley, and oats, 
     individually, shall be based on 80 percent of the average 
     full economic cost of production per bushel (based on yield 
     per planted acre), as determined by the Secretary, for the 
     immediately preceding 3 crops of grain sorghum, barley, and 
     oats, respectively.
       ``(c) Upland Cotton.--The loan rate for a marketing 
     assistance loan under section 131 for upland cotton shall be 
     based on 80 percent of the average full economic cost of 
     production per bushel (based on yield per planted acre), as 
     determined by the Secretary, for the immediately preceding 3 
     crops of upland cotton.
       ``(d) Extra Long Staple Cotton.--The loan rate for a 
     marketing assistance loan under section 131 for extra long 
     staple cotton shall be based on 80 percent of the average 
     full economic cost of production per bushel (based on yield 
     per planted acre), as determined by the Secretary, for the 
     immediately preceding 3 crops of extra long staple cotton.
       ``(e) Rice.--The loan rate for a marketing assistance loan 
     under section 131 for rice shall be based on 80 percent of 
     the average full economic cost of production per bushel 
     (based on yield per planted acre), as determined by the 
     Secretary, for the immediately preceding 3 crops of rice.
       ``(f) Oilseeds.--
       ``(1) Soybeans.--The loan rate for a marketing assistance 
     loan under section 131 for soybeans shall be based on 80 
     percent of the average full economic cost of production per 
     bushel (based on yield per planted acre), as determined by 
     the Secretary, for the immediately preceding 3 crops of 
     soybeans.
       ``(2) Sunflower seed, canola, rapeseed, safflower, mustard 
     seed, and flaxseed.--The loan rate for a marketing assistance 
     loan under section 131 for sunflower seed, canola, rapeseed, 
     safflower, mustard seed, and flaxseed, individually, shall be 
     based on 80 percent of the average full economic cost of 
     production per bushel (based on yield per planted acre), as 
     determined by the Secretary, for the immediately preceding 3 
     crops of sunflower seed, canola, rapeseed, safflower, mustard 
     seed, and flaxseed, respectively.
       ``(3) Other oilseeds.--The loan rates for a marketing 
     assistance loan under section 131 for other oilseeds shall be 
     established at such level as the Secretary determines is fair 
     and reasonable in relation to the loan rate available for 
     soybeans, except in no event shall the rate for the oilseeds 
     (other than cottonseed) be less than the rate established for 
     soybeans on a per-pound basis for the same crop.''.

     SEC. 402. TERM OF LOANS.

       Section 133 of the Agriculture Market Transition Act (7 
     U.S.C. 7233) is amended to read as follows:

     ``SEC. 133. TERM OF LOANS.

       ``(a) Term of Loan.--In the case of each loan commodity, a 
     marketing assistance loan under section 131 shall have a term 
     of 20 months beginning on the first day of the first month 
     after the month in which the loan is made.
       ``(b) Extensions Authorized.--The Secretary may extend the 
     term of a marketing assistance loan for any loan 
     commodity.''.

[[Page S259]]

     SEC. 403. APPLICATION.

       This title and the amendments made by this title shall 
     apply to each of the 2001 and 2002 crops of a loan commodity 
     (as defined in section 102 of the Agricultural Market 
     Transition Act (7 U.S.C. 7202).
                      TITLE V--FARMLAND PROTECTION

     SEC. 501. FARMLAND PROTECTION PROGRAM.

       Section 388 of the Federal Agriculture Improvement and 
     Reform Act of 1996 (16 U.S.C. 3830 note; Public Law 104-127) 
     is amended to read as follows:

     ``SEC. 388. FARMLAND PROTECTION PROGRAM.

       ``(a) Definition of Eligible Entity.--In this section, the 
     term `eligible entity' means--
       ``(1) any agency of any State or local government, or 
     federally recognized Indian tribe; and
       ``(2) any organization that--
       ``(A) is organized for, and at all times since its 
     formation has been operated principally for, 1 or more of the 
     conservation purposes specified in clause (i), (ii), or (iii) 
     of section 170(h)(4)(A) of the Internal Revenue Code of 1986;
       ``(B) is an organization described in section 501(c)(3) of 
     the Code that is exempt from taxation under section 501(a) of 
     the Code; and
       ``(C)(i) is described in section 509(a)(2) of the Code of; 
     or
       ``(ii) is described in section 509(a)(3) of the Code and is 
     controlled by an organization described in section 509(a)(2) 
     of the Code.
       ``(b) Authority.--The Secretary of Agriculture shall 
     establish and carry out a farmland protection program under 
     which the Secretary shall provide grants to eligible 
     entities, to provide the Federal share of the cost of 
     purchasing conservation easements or other interests in land 
     with prime, unique, or other productive soil for the purpose 
     of protecting topsoil by limiting nonagricultural uses of the 
     land.
       ``(c) Federal Share.--The Federal share of the cost of 
     purchasing a conservation easement or other interest 
     described in subsection (b) shall be not more than 50 
     percent.
       ``(d) Title; Enforcement.--Title to a conservation easement 
     or other interest described in subsection (b) may be held, 
     and the conservation requirements of the easement or interest 
     enforced, by any eligible entity.
       ``(e) State Certification.--The attorney general of the 
     State in which land is located shall take such actions as are 
     necessary to ensure that a conservation easement or other 
     interest under this section is in a form that is sufficient 
     to achieve the conservation purpose of the farmland 
     protection program established under this section, the law of 
     the State, and the terms and conditions of any grant made by 
     the Secretary under this section.
       ``(f) Conservation Plan.--Any land for which a conservation 
     easement or other interest is purchased under this section 
     shall be subject to the requirements of a conservation plan 
     to the extent that the plan does not negate or adversely 
     affect the restrictions contained in any easement.
       ``(g) Technical Assistance.--The Secretary may use not more 
     than 10 percent of the amount that is made available for a 
     fiscal year under subsection (h) to provide technical 
     assistance to carry out this section.
       ``(h) Funding.--For each fiscal year, the Secretary shall 
     use not more than $250,000,000 of the funds of the Commodity 
     Credit Corporation to carry out this section.''.
                         TITLE VI--CIVIL RIGHTS

     SEC. 601. SENSE OF CONGRESS ON PARTICIPATION OF SOCIALLY 
                   DISADVANTAGED GROUPS IN DEPARTMENT OF 
                   AGRICULTURE PROGRAMS.

       It is the sense of Congress that the Secretary of 
     Agriculture should take such actions as are necessary to 
     ensure, to the maximum extent practicable, that members of 
     socially disadvantaged groups (as defined in section 355(e) 
     of the Consolidated Farm and Rural Development Act (7 U.S.C. 
     2003(e))--
       (1) are informed of the eligibility requirements to 
     participate in programs of the Department of Agriculture; and
       (2) receive technical support and assistance from the 
     Department to participate in the programs.

  Mr. HARKIN. I am pleased to cosponsor this legislation introduced by 
the Democratic leader, Senator Daschle. The bill contains a number of 
important features that constitute a strong start for our work toward a 
new farm bill.
  In particular, I want to call attention to the provisions in this 
bill that will address directly the rapid changes occurring in the 
structure of our food and agriculture industry and the impact those 
changes are having on America's farm and ranch families and rural 
communities. This bill will give USDA new authority to deal with 
economic concentration and consolidation in agriculture: to prevent 
mergers and acquisitions that damage farmers and rural communities and 
to prevent and take enforcement action against anti-competitive and 
unfair practices in dealings by agribusinesses with farmers.
  The legislation also incorporates legislation I introduced in the 
previous Congress to establish new protections for agricultural 
producers who are involved in contracting arrangements with 
agribusiness processors and to establish new protections that will 
enhance the ability of agricultural producers to form associations to 
bargain effectively with processors and buyers of agricultural 
products.
  I am also pleased that this bill incorporates my legislation to 
create a new fund that will spur new equity capital investment in rural 
areas. The legislation has the support of a wide range of the key 
interested parties in providing and boosting financing and business 
investment in rural America. Clearly, if rural America is to grow, and 
if agricultural producers are to develop new value-added businesses, 
there will have to be increased levels of equity capital investment in 
agricultural processing and other businesses. This bill will go a long 
way in putting more investment capital into rural communities.
  This bill also makes a strong start toward improving the shortcomings 
of the commodity program provisions of the current farm bill. We have 
all observed the critical need for emergency assistance packages to 
shore up the Freedom to Farm bill over the past several years. But our 
farm families and rural communities need a predictable and dependable 
system of farm income protection. This bill would provide for loan 
rates that are more realistic in light of current production costs in 
order to improve the farm income protection. It focuses on providing 
better assistance when it is needed, rather than simply making 
additional fixed payments regardless of actual market conditions.
  As I said, I believe the marketing assistance loan rate provisions in 
this bill are a strong start. We recognize that under the current 
formula, even without the existing loan rate caps, the marketing loan 
rates would have declined quite substantially as market prices suffered 
in recent years. That means a less effective system of farm income 
protection. However, further work and discussion on loan rate formulas 
and program details will be necessary as we work further on the next 
farm bill. In particular, it is important that the relative loan rates 
among the various commodities are in balance. Of course, that is the 
main objective of these provisions: to bring other loan rates into 
reasonable equivalence with the loan rates for oilseeds. But we do not 
want to create any new inequality while trying to address what is now 
felt to be an imbalance.
  It is also important for us to contemplate the consequences of any 
changes in loan rates that we may ultimately enact, including any 
impacts on production levels and patterns, and impacts on the relative 
benefits under the program for family-size farms in comparison with 
those for much larger operations. For that reason I believe that there 
must be some restriction or limitation on the quantity of production 
that is eligible for higher loan rates. Otherwise, I am concerned that 
we are providing only a small amount of help to family-size farms, but 
far more to their larger and already better capitalized neighbors 
simply because those larger farms are producing larger quantities of 
loan-eligible commodities. Similarly, if the loan rate is increased for 
every unit of production of a given commodity on every farm, no matter 
how large, we must consider the incentives for higher production that 
will be put into markets that are in surplus.
  The commodity provisions are, of course, only one part of a 
comprehensive approach to a new farm bill. I very strongly believe that 
the next farm bill should include a new program of incentives for farm 
and ranch conservation practices. In this way we will improve farm 
income while also enhancing conservation of natural resources for our 
children and succeeding generations. I am not proposing a substitute 
for existing conservation programs, nor am I proposing to abandon 
commodity and farm income protection programs. But I believe that we 
can accomplish a great deal by adding to our farm policy a new 
conservation incentive program.
  Again, I am pleased to cosponsor this bill and look forward to 
working with my colleagues to work further together on crafting a new 
farm bill.

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