[Congressional Record Volume 154, Number 78 (Tuesday, May 13, 2008)]
[House]
[Pages H3409-H3700]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 CONFERENCE REPORT ON H.R. 2419, FOOD, CONSERVATION, AND ENERGY ACT OF 
                                  2008

  Mr. PETERSON of Minnesota submitted the following conference report 
and statement on the bill (H.R. 2419) to provide for the continuation 
of agricultural programs through fiscal year 2012, and for other 
purposes:

                  Conference Report (H. Rept. 110-627)

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to the bill (H. R. 
     2419), to provide for the continuation of agricultural 
     programs through fiscal year 2012,

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     and for other purposes, having met, after full and free 
     conference, have agreed to recommend and do recommend to 
     their respective Houses as follows:
       That the House recede from its disagreement to the 
     amendment of the Senate and agree to the same with an 
     amendment as follows:
       In lieu of the matter proposed to be inserted by the Senate 
     amendment, insert the following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Food, 
     Conservation, and Energy Act of 2008''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definition of Secretary.

                      TITLE I--COMMODITY PROGRAMS

Sec. 1001. Definitions.

       Subtitle A--Direct Payments and Counter-Cyclical Payments

Sec. 1101. Base acres.
Sec. 1102. Payment yields.
Sec. 1103. Availability of direct payments.
Sec. 1104. Availability of counter-cyclical payments.
Sec. 1105. Average crop revenue election program.
Sec. 1106. Producer agreement required as condition of provision of 
              payments.
Sec. 1107. Planting flexibility.
Sec. 1108. Special rule for long grain and medium grain rice.
Sec. 1109. Period of effectiveness.

  Subtitle B--Marketing Assistance Loans and Loan Deficiency Payments

Sec. 1201. Availability of nonrecourse marketing assistance loans for 
              loan commodities.
Sec. 1202. Loan rates for nonrecourse marketing assistance loans.
Sec. 1203. Term of loans.
Sec. 1204. Repayment of loans.
Sec. 1205. Loan deficiency payments.
Sec. 1206. Payments in lieu of loan deficiency payments for grazed 
              acreage.
Sec. 1207. Special marketing loan provisions for upland cotton.
Sec. 1208. Special competitive provisions for extra long staple cotton.
Sec. 1209. Availability of recourse loans for high moisture feed grains 
              and seed cotton.
Sec. 1210. Adjustments of loans.

                          Subtitle C--Peanuts

Sec. 1301. Definitions.
Sec. 1302. Base acres for peanuts for a farm.
Sec. 1303. Availability of direct payments for peanuts.
Sec. 1304. Availability of counter-cyclical payments for peanuts.
Sec. 1305. Producer agreement required as condition on provision of 
              payments.
Sec. 1306. Planting flexibility.
Sec. 1307. Marketing assistance loans and loan deficiency payments for 
              peanuts.
Sec. 1308. Adjustments of loans.

                           Subtitle D--Sugar

Sec. 1401. Sugar program.
Sec. 1402. United States membership in the International Sugar 
              Organization.
Sec. 1403. Flexible marketing allotments for sugar.
Sec. 1404. Storage facility loans.
Sec. 1405. Commodity Credit Corporation storage payments.

                           Subtitle E--Dairy

Sec. 1501. Dairy product price support program.
Sec. 1502. Dairy forward pricing program.
Sec. 1503. Dairy export incentive program.
Sec. 1504. Revision of Federal marketing order amendment procedures.
Sec. 1505. Dairy indemnity program.
Sec. 1506. Milk income loss contract program.
Sec. 1507. Dairy promotion and research program.
Sec. 1508. Report on Department of Agriculture reporting procedures for 
              nonfat dry milk.
Sec. 1509. Federal Milk Marketing Order Review Commission.
Sec. 1510. Mandatory reporting of dairy commodities.

                       Subtitle F--Administration

Sec. 1601. Administration generally.
Sec. 1602. Suspension of permanent price support authority.
Sec. 1603. Payment limitations.
Sec. 1604. Adjusted gross income limitation.
Sec. 1605. Availability of quality incentive payments for covered 
              oilseed producers.
Sec. 1606. Personal liability of producers for deficiencies.
Sec. 1607. Extension of existing administrative authority regarding 
              loans.
Sec. 1608. Assignment of payments.
Sec. 1609. Tracking of benefits.
Sec. 1610. Government publication of cotton price forecasts.
Sec. 1611. Prevention of deceased individuals receiving payments under 
              farm commodity programs.
Sec. 1612. Hard white wheat development program.
Sec. 1613. Durum wheat quality program.
Sec. 1614. Storage facility loans.
Sec. 1615. State, county, and area committees.
Sec. 1616. Prohibition on charging certain fees.
Sec. 1617. Signature authority.
Sec. 1618. Modernization of Farm Service Agency.
Sec. 1619. Information gathering.
Sec. 1620. Leasing of office space.
Sec. 1621. Geographically disadvantaged farmers and ranchers.
Sec. 1622. Implementation.
Sec. 1623. Repeals.

                         TITLE II--CONSERVATION

     Subtitle A--Definitions and Highly Erodible Land and Wetland 
                              Conservation

Sec. 2001. Definitions relating to conservation title of Food Security 
              Act of 1985.
Sec. 2002. Review of good faith determinations related to highly 
              erodible land conservation.
Sec. 2003. Review of good faith determinations related to wetland 
              conservation.

                Subtitle B--Conservation Reserve Program

Sec. 2101. Extension of conservation reserve program.
Sec. 2102. Land eligible for enrollment in conservation reserve.
Sec. 2103. Maximum enrollment of acreage in conservation reserve.
Sec. 2104. Designation of conservation priority areas.
Sec. 2105. Treatment of multi-year grasses and legumes.
Sec. 2106. Revised pilot program for enrollment of wetland and buffer 
              acreage in conservation reserve.
Sec. 2107. Additional duty of participants under conservation reserve 
              contracts.
Sec. 2108. Managed haying, grazing, or other commercial use of forage 
              on enrolled land and installation of wind turbines.
Sec. 2109. Cost sharing payments relating to trees, windbreaks, 
              shelterbelts, and wildlife corridors.
Sec. 2110. Evaluation and acceptance of contract offers, annual rental 
              payments, and payment limitations.
Sec. 2111. Conservation reserve program transition incentives for 
              beginning farmers or ranchers and socially disadvantaged 
              farmers or ranchers.

                  Subtitle C--Wetlands Reserve Program

Sec. 2201. Establishment and purpose of wetlands reserve program.
Sec. 2202. Maximum enrollment and enrollment methods.
Sec. 2203. Duration of wetlands reserve program and lands eligible for 
              enrollment.
Sec. 2204. Terms of wetlands reserve program easements.
Sec. 2205. Compensation for easements under wetlands reserve program.
Sec. 2206. Wetlands reserve enhancement program and reserved rights 
              pilot program.
Sec. 2207. Duties of Secretary of Agriculture under wetlands reserve 
              program.
Sec. 2208. Payment limitations under wetlands reserve contracts and 
              agreements.
Sec. 2209. Repeal of payment limitations exception for State agreements 
              for wetlands reserve enhancement.
Sec. 2210. Report on implications of long-term nature of conservation 
              easements.

              Subtitle D--Conservation Stewardship Program

Sec. 2301. Conservation stewardship program.

         Subtitle E--Farmland Protection and Grassland Reserve

Sec. 2401. Farmland protection program.
Sec. 2402. Farm viability program.
Sec. 2403. Grassland reserve program.

          Subtitle F--Environmental Quality Incentives Program

Sec. 2501. Purposes of environmental quality incentives program.
Sec. 2502. Definitions.
Sec. 2503. Establishment and administration of environmental quality 
              incentives program.
Sec. 2504. Evaluation of applications.
Sec. 2505. Duties of producers under environmental quality incentives 
              program.
Sec. 2506. Environmental quality incentives program plan.
Sec. 2507. Duties of the Secretary.
Sec. 2508. Limitation on environmental quality incentives program 
              payments.
Sec. 2509. Conservation innovation grants and payments.
Sec. 2510. Agricultural water enhancement program.

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

Sec. 2601. Conservation of private grazing land.
Sec. 2602. Wildlife habitat incentive program.
Sec. 2603. Grassroots source water protection program.
Sec. 2604. Great Lakes Basin Program for soil erosion and sediment 
              control.
Sec. 2605. Chesapeake Bay watershed program.
Sec. 2606. Voluntary public access and habitat incentive program.

    Subtitle H--Funding and Administration of Conservation Programs

Sec. 2701. Funding of conservation programs under Food Security Act of 
              1985.
Sec. 2702. Authority to accept contributions to support conservation 
              programs.
Sec. 2703. Regional equity and flexibility.
Sec. 2704. Assistance to certain farmers and ranchers to improve their 
              access to conservation programs.
Sec. 2705. Report regarding enrollments and assistance under 
              conservation programs.
Sec. 2706. Delivery of conservation technical assistance.
Sec. 2707. Cooperative conservation partnership initiative.
Sec. 2708. Administrative requirements for conservation programs.
Sec. 2709. Environmental services markets.
Sec. 2710. Agriculture conservation experienced services program.
Sec. 2711. Establishment of State technical committees and their 
              responsibilities.

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           Subtitle I--Conservation Programs Under Other Laws

Sec. 2801. Agricultural management assistance program.
Sec. 2802. Technical assistance under Soil Conservation and Domestic 
              Allotment Act.
Sec. 2803. Small watershed rehabilitation program.
Sec. 2804. Amendments to Soil and Water Resources Conservation Act of 
              1977.
Sec. 2805. Resource Conservation and Development Program.
Sec. 2806. Use of funds in Basin Funds for salinity control activities 
              upstream of Imperial Dam.
Sec. 2807. Desert terminal lakes.

           Subtitle J--Miscellaneous Conservation Provisions

Sec. 2901. High Plains water study.
Sec. 2902. Naming of National Plant Materials Center at Beltsville, 
              Maryland, in honor of Norman A. Berg.
Sec. 2903. Transition.
Sec. 2904. Regulations.

                            TITLE III--TRADE

                     Subtitle A--Food for Peace Act

Sec. 3001. Short title.
Sec. 3002. United States policy.
Sec. 3003. Food aid to developing countries.
Sec. 3004. Trade and development assistance.
Sec. 3005. Agreements regarding eligible countries and private 
              entities.
Sec. 3006. Use of local currency payments.
Sec. 3007. General authority.
Sec. 3008. Provision of agricultural commodities.
Sec. 3009. Generation and use of currencies by private voluntary 
              organizations and cooperatives.
Sec. 3010. Levels of assistance.
Sec. 3011. Food Aid Consultative Group.
Sec. 3012. Administration.
Sec. 3013. Assistance for stockpiling and rapid transportation, 
              delivery, and distribution of shelf-stable prepackaged 
              foods.
Sec. 3014. General authorities and requirements.
Sec. 3015. Definitions.
Sec. 3016. Use of Commodity Credit Corporation.
Sec. 3017. Administrative provisions.
Sec. 3018. Consolidation and modification of annual reports regarding 
              agricultural trade issues.
Sec. 3019. Expiration of assistance.
Sec. 3020. Authorization of appropriations.
Sec. 3021. Minimum level of nonemergency food assistance.
Sec. 3022. Coordination of foreign assistance programs.
Sec. 3023. Micronutrient fortification programs.
Sec. 3024. John Ogonowski and Doug Bereuter Farmer-to-Farmer Program.

    Subtitle B--Agricultural Trade Act of 1978 and Related Statutes

Sec. 3101. Export credit guarantee program.
Sec. 3102. Market access program.
Sec. 3103. Export enhancement program.
Sec. 3104. Foreign market development cooperator program.
Sec. 3105. Food for Progress Act of 1985.
Sec. 3106. McGovern-Dole International Food for Education and Child 
              Nutrition Program.

                       Subtitle C--Miscellaneous

Sec. 3201. Bill Emerson Humanitarian Trust.
Sec. 3202. Global Crop Diversity Trust.
Sec. 3203. Technical assistance for specialty crops.
Sec. 3204. Emerging markets and facility guarantee loan program.
Sec. 3205. Consultative Group to Eliminate the Use of Child Labor and 
              Forced Labor in Imported Agricultural Products.
Sec. 3206. Local and regional food aid procurement projects.

                      Subtitle D--Softwood Lumber

Sec. 3301. Softwood lumber.

                          TITLE IV--NUTRITION

                     Subtitle A--Food Stamp Program

             PART I--Renaming of Food Stamp Act and Program

Sec. 4001. Renaming of Food Stamp Act and program.
Sec. 4002. Conforming amendments.

                     PART II--Benefit Improvements

Sec. 4101. Exclusion of certain military payments from income.
Sec. 4102. Strengthening the food purchasing power of low-income 
              Americans.
Sec. 4103. Supporting working families with child care expenses.
Sec. 4104. Asset indexation, education, and retirement accounts.
Sec. 4105. Facilitating simplified reporting.
Sec. 4106. Transitional benefits option.
Sec. 4107. Increasing the minimum benefit.
Sec. 4108. Employment, training, and job retention.

                      PART III--Program Operations

Sec. 4111. Nutrition education.
Sec. 4112. Technical clarification regarding eligibility.
Sec. 4113. Clarification of split issuance.
Sec. 4114. Accrual of benefits.
Sec. 4115. Issuance and use of program benefits.
Sec. 4116. Review of major changes in program design.
Sec. 4117. Civil rights compliance.
Sec. 4118. Codification of access rules.
Sec. 4119. State option for telephonic signature.
Sec. 4120. Privacy protections.
Sec. 4121. Preservation of access and payment accuracy.
Sec. 4122. Funding of employment and training programs.

                       PART IV--Program Integrity

Sec. 4131. Eligibility disqualification.
Sec. 4132. Civil penalties and disqualification of retail food stores 
              and wholesale food concerns.
Sec. 4133. Major systems failures.

                         PART V--Miscellaneous

Sec. 4141. Pilot projects to evaluate health and nutrition promotion in 
              the supplemental nutrition assistance program.
Sec. 4142. Study on comparable access to supplemental nutrition 
              assistance for Puerto Rico.

                 Subtitle B--Food Distribution Programs

               PART I--Emergency Food Assistance Program

Sec. 4201. Emergency food assistance.
Sec. 4202. Emergency food program infrastructure grants.

       PART II--Food Distribution Program on Indian Reservations

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

             PART III--Commodity Supplemental Food Program

Sec. 4221. Commodity supplemental food program.

           PART IV--Senior Farmers' Market Nutrition Program

Sec. 4231. Seniors farmers' market nutrition program.

            Subtitle C--Child Nutrition and Related Programs

Sec. 4301. State performance on enrolling children receiving program 
              benefits for free school meals.
Sec. 4302. Purchases of locally produced foods.
Sec. 4303. Healthy food education and program replicability.
Sec. 4304. Fresh fruit and vegetable program.
Sec. 4305. Whole grain products.
Sec. 4306. Buy American requirements.
Sec. 4307. Survey of foods purchased by school food authorities.

                       Subtitle D--Miscellaneous

Sec. 4401. Bill Emerson National Hunger Fellows and Mickey Leland 
              International Hunger Fellows.
Sec. 4402. Assistance for community food projects.
Sec. 4403. Joint nutrition monitoring and related research activities.
Sec. 4404. Section 32 funds for purchase of fruits, vegetables, and 
              nuts to support domestic nutrition assistance programs.
Sec. 4405. Hunger-free communities.
Sec. 4406. Reauthorization of Federal food assistance programs.
Sec. 4407. Effective and implementation dates.

                            TITLE V--CREDIT

                    Subtitle A--Farm Ownership Loans

Sec. 5001. Direct loans.
Sec. 5002. Conservation loan and loan guarantee program.
Sec. 5003. Limitations on amount of farm ownership loans.
Sec. 5004. Down payment loan program.
Sec. 5005. Beginning farmer or rancher and socially disadvantaged 
              farmer or rancher contract land sales program.

                      Subtitle B--Operating Loans

Sec. 5101. Farming experience as eligibility requirement.
Sec. 5102. Limitations on amount of operating loans.
Sec. 5103. Suspension of limitation on period for which borrowers are 
              eligible for guaranteed assistance.

                      Subtitle C--Emergency Loans

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

                 Subtitle D--Administrative Provisions

Sec. 5301. Beginning farmer and rancher individual development accounts 
              pilot program.
Sec. 5302. Inventory sales preferences; loan fund set-asides.
Sec. 5303. Loan authorization levels.
Sec. 5304. Transition to private commercial or other sources of credit.
Sec. 5305. Extension of the right of first refusal to reacquire 
              homestead property to immediate family members of 
              borrower-owner.
Sec. 5306. Rural development and farm loan program activities.

                        Subtitle E--Farm Credit

Sec. 5401. Farm Credit System Insurance Corporation.
Sec. 5402. Technical correction.
Sec. 5403. Bank for cooperatives voting stock.
Sec. 5404. Premiums.
Sec. 5405. Certification of premiums.
Sec. 5406. Rural utility loans.
Sec. 5407. Equalization of loan-making powers of certain district 
              associations.

                       Subtitle F--Miscellaneous

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

                      TITLE VI--RURAL DEVELOPMENT

        Subtitle A--Consolidated Farm and Rural Development Act

Sec. 6001. Water, waste disposal, and wastewater facility grants.
Sec. 6002. SEARCH grants.
Sec. 6003. Rural business opportunity grants.
Sec. 6004. Child day care facility grants, loans, and loan guarantees.
Sec. 6005. Community facility grants to advance broadband.

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Sec. 6006. Rural water and wastewater circuit rider program.
Sec. 6007. Tribal College and University essential community 
              facilities.
Sec. 6008. Emergency and imminent community water assistance grant 
              program.
Sec. 6009. Water systems for rural and native villages in Alaska.
Sec. 6010. Grants to nonprofit organizations to finance the 
              construction, refurbishing, and servicing of 
              individually-owned household water well systems in rural 
              areas for individuals with low or moderate incomes.
Sec. 6011. Interest rates for water and waste disposal facilities 
              loans.
Sec. 6012. Cooperative equity security guarantee.
Sec. 6013. Rural cooperative development grants.
Sec. 6014. Grants to broadcasting systems.
Sec. 6015. Locally or regionally produced agricultural food products.
Sec. 6016. Appropriate technology transfer for rural areas.
Sec. 6017. Rural economic area partnership zones.
Sec. 6018. Definitions.
Sec. 6019. National rural development partnership.
Sec. 6020. Historic barn preservation.
Sec. 6021. Grants for NOAA weather radio transmitters.
Sec. 6022. Rural microentrepreneur assistance program.
Sec. 6023. Grants for expansion of employment opportunities for 
              individuals with disabilities in rural areas.
Sec. 6024. Health care services.
Sec. 6025. Delta Regional Authority.
Sec. 6026. Northern Great Plains Regional Authority.
Sec. 6027. Rural Business Investment Program.
Sec. 6028. Rural Collaborative Investment Program.
Sec. 6029. Funding of pending rural development loan and grant 
              applications.

             Subtitle B--Rural Electrification Act of 1936

Sec. 6101. Energy efficiency programs.
Sec. 6102. Reinstatement of Rural Utility Services direct lending.
Sec. 6103. Deferment of payments to allows loans for improved energy 
              efficiency and demand reduction and for energy efficiency 
              and use audits.
Sec. 6104. Rural electrification assistance.
Sec. 6105. Substantially underserved trust areas.
Sec. 6106. Guarantees for bonds and notes issued for electrification or 
              telephone purposes.
Sec. 6107. Expansion of 911 access.
Sec. 6108. Electric loans for renewable energy.
Sec. 6109. Bonding requirements.
Sec. 6110. Access to broadband telecommunications services in rural 
              areas.
Sec. 6111. National Center for Rural Telecommunications Assessment.
Sec. 6112. Comprehensive rural broadband strategy.
Sec. 6113. Study on rural electric power generation.

                       Subtitle C--Miscellaneous

Sec. 6201. Distance learning and telemedicine.
Sec. 6202. Value-added agricultural market development program grants.
Sec. 6203. Agriculture innovation center demonstration program.
Sec. 6204. Rural firefighters and emergency medical service assistance 
              program.
Sec. 6205. Insurance of loans for housing and related facilities for 
              domestic farm labor.
Sec. 6206. Study of rural transportation issues.

                 Subtitle D--Housing Assistance Council

Sec. 6301. Short title.
Sec. 6302. Assistance to Housing Assistance Council.
Sec. 6303. Audits and reports.
Sec. 6304. Persons not lawfully present in the United States.
Sec. 6305. Limitation on use of authorized amounts.

                TITLE VII--RESEARCH AND RELATED MATTERS

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

Sec. 7101. Definitions.
Sec. 7102. National Agricultural Research, Extension, Education, and 
              Economics Advisory Board.
Sec. 7103. Specialty crop committee report.
Sec. 7104. Renewable energy committee.
Sec. 7105. Veterinary medicine loan repayment.
Sec. 7106. Eligibility of University of the District of Columbia for 
              grants and fellowships for food and agricultural sciences 
              education.
Sec. 7107. Grants to 1890 schools to expand extension capacity.
Sec. 7108. Expansion of food and agricultural sciences awards.
Sec. 7109. Grants and fellowships for food and agricultural sciences 
              education.
Sec. 7110. Grants for research on production and marketing of alcohols 
              and industrial hydrocarbons from agricultural commodities 
              and forest products.
Sec. 7111. Policy research centers.
Sec. 7112. Education grants to Alaska Native-serving institutions and 
              Native Hawaiian-serving institutions.
Sec. 7113. Emphasis of human nutrition initiative.
Sec. 7114. Human nutrition intervention and health promotion research 
              program.
Sec. 7115. Pilot research program to combine medical and agricultural 
              research.
Sec. 7116. Nutrition education program.
Sec. 7117. Continuing animal health and disease research programs.
Sec. 7118. Cooperation among eligible institutions.
Sec. 7119. Appropriations for research on national or regional 
              problems.
Sec. 7120. Animal health and disease research program.
Sec. 7121. Authorization level for extension at 1890 land-grant 
              colleges.
Sec. 7122. Authorization level for agricultural research at 1890 land-
              grant colleges.
Sec. 7123. Grants to upgrade agricultural and food sciences facilities 
              at 1890 land-grant colleges, including Tuskegee 
              University.
Sec. 7124. Grants to upgrade agriculture and food sciences facilities 
              at the District of Columbia land-grant university.
Sec. 7125. Grants to upgrade agriculture and food sciences facilities 
              and equipment at insular area land-grant institutions.
Sec. 7126. National research and training virtual centers.
Sec. 7127. Matching funds requirement for research and extension 
              activities of 1890 institutions.
Sec. 7128. Hispanic-serving institutions.
Sec. 7129. Hispanic-serving agricultural colleges and universities.
Sec. 7130. International agricultural research, extension, and 
              education.
Sec. 7131. Competitive grants for international agricultural science 
              and education programs.
Sec. 7132. Administration.
Sec. 7133. Research equipment grants.
Sec. 7134. University research.
Sec. 7135. Extension Service.
Sec. 7136. Supplemental and alternative crops.
Sec. 7137. New Era Rural Technology Program.
Sec. 7138. Capacity building grants for NLGCA Institutions.
Sec. 7139. Borlaug international agricultural science and technology 
              fellowship program.
Sec. 7140. Aquaculture assistance programs.
Sec. 7141. Rangeland research grants.
Sec. 7142. Special authorization for biosecurity planning and response.
Sec. 7143. Resident instruction and distance education grants program 
              for insular area institutions of higher education.

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

Sec. 7201. National genetics resources program.
Sec. 7202. National Agricultural Weather Information System.
Sec. 7203. Partnerships.
Sec. 7204. High-priority research and extension areas.
Sec. 7205. Nutrient management research and extension initiative.
Sec. 7206. Organic Agriculture Research and Extension Initiative.
Sec. 7207. Agricultural bioenergy feedstock and energy efficiency 
              research and extension initiative.
Sec. 7208. Farm business management and benchmarking.
Sec. 7209. Agricultural telecommunications program.
Sec. 7210. Assistive technology program for farmers with disabilities.
Sec. 7211. Research on honey bee diseases.
Sec. 7212. National Rural Information Center Clearinghouse.

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

Sec. 7301. Peer and merit review.
Sec. 7302. Partnerships for high-value agricultural product quality 
              research.
Sec. 7303. Precision agriculture.
Sec. 7304. Biobased products.
Sec. 7305. Thomas Jefferson Initiative for Crop Diversification.
Sec. 7306. Integrated research, education, and extension competitive 
              grants program.
Sec. 7307. Fusarium graminearum grants.
Sec. 7308. Bovine Johne's disease control program.
Sec. 7309. Grants for youth organizations.
Sec. 7310. Agricultural biotechnology research and development for 
              developing countries.
Sec. 7311. Specialty crop research initiative.
Sec. 7312. Food animal residue avoidance database program.
Sec. 7313. Office of pest management policy.

                         Subtitle D--Other Laws

Sec. 7401. Critical Agricultural Materials Act.
Sec. 7402. Equity in Educational Land-Grant Status Act of 1994.
Sec. 7403. Smith-Lever Act.
Sec. 7404. Hatch Act of 1887.
Sec. 7405. Agricultural Experiment Station Research Facilities Act.
Sec. 7406. Agriculture and food research initiative.
Sec. 7407. Agricultural Risk Protection Act of 2000.
Sec. 7408. Exchange or sale authority.
Sec. 7409. Enhanced use lease authority pilot program.
Sec. 7410. Beginning farmer and rancher development program.
Sec. 7411. Public education regarding use of biotechnology in producing 
              food for human consumption.
Sec. 7412. McIntire-Stennis Cooperative Forestry Act.

[[Page H3413]]

Sec. 7413. Renewable Resources Extension Act of 1978.
Sec. 7414. National Aquaculture Act of 1980.
Sec. 7415. Construction of Chinese Garden at the National Arboretum.
Sec. 7416. National Agricultural Research, Extension, and Teaching 
              Policy Act Amendments of 1985.
Sec. 7417. Eligibility of University of the District of Columbia for 
              certain land-grant university assistance.

                       Subtitle E--Miscellaneous

                       PART I--General Provisions

Sec. 7501. Definitions.
Sec. 7502. Grazinglands research laboratory.
Sec. 7503. Fort Reno Science Park Research Facility.
Sec. 7504. Roadmap.
Sec. 7505. Review of plan of work requirements.
Sec. 7506. Budget submission and funding.

              PART II--Research, Education, and Economics

Sec. 7511. Research, education, and economics.

               PART III--New Grant and Research Programs

Sec. 7521. Research and education grants for the study of antibiotic-
              resistant bacteria.
Sec. 7522. Farm and ranch stress assistance network.
Sec. 7523. Seed distribution.
Sec. 7524. Live virus foot and mouth disease research.
Sec. 7525. Natural products research program.
Sec. 7526. Sun grant program.
Sec. 7527. Study and report on food deserts.
Sec. 7528. Demonstration project authority for temporary positions.
Sec. 7529. Agricultural and rural transportation research and 
              education.

                          TITLE VIII--FORESTRY

 Subtitle A--Amendments to Cooperative Forestry Assistance Act of 1978

Sec. 8001. National priorities for private forest conservation.
Sec. 8002. Long-term State-wide assessments and strategies for forest 
              resources.
Sec. 8003. Community forest and open space conservation program.
Sec. 8004. Assistance to the Federated States of Micronesia, the 
              Republic of the Marshall Islands, and the Republic of 
              Palau.
Sec. 8005. Changes to Forest Resource Coordinating Committee.
Sec. 8006. Changes to State Forest Stewardship Coordinating Committees.
Sec. 8007. Competition in programs under Cooperative Forestry 
              Assistance Act of 1978.
Sec. 8008. Competitive allocation of funds for cooperative forest 
              innovation partnership projects.

        Subtitle B--Cultural and Heritage Cooperation Authority

Sec. 8101. Purposes.
Sec. 8102. Definitions.
Sec. 8103. Reburial of human remains and cultural items.
Sec. 8104. Temporary closure for traditional and cultural purposes.
Sec. 8105. Forest products for traditional and cultural purposes.
Sec. 8106. Prohibition on disclosure.
Sec. 8107. Severability and savings provisions.

         Subtitle C--Amendments to Other Forestry-Related Laws

Sec. 8201. Rural revitalization technologies.
Sec. 8202. Office of International Forestry.
Sec. 8203. Emergency forest restoration program.
Sec. 8204. Prevention of illegal logging practices.
Sec. 8205. Healthy forests reserve program.

    Subtitle D--Boundary Adjustments and Land Conveyance Provisions

Sec. 8301. Green Mountain National Forest boundary adjustment.
Sec. 8302. Land conveyances, Chihuahuan Desert Nature Park, New Mexico, 
              and George Washington National Forest, Virginia.
Sec. 8303. Sale and exchange of National Forest System land, Vermont.

                  Subtitle E--Miscellaneous Provisions

Sec. 8401. Qualifying timber contract options.
Sec. 8402. Hispanic-serving institution agricultural land national 
              resources leadership program.

                            TITLE IX--ENERGY

Sec. 9001. Energy.
Sec. 9002. Biofuels infrastructure study.
Sec. 9003. Renewable fertilizer study.

             TITLE X--HORTICULTURE AND ORGANIC AGRICULTURE

Sec. 10001. Definitions.

           Subtitle A--Horticulture Marketing and Information

Sec. 10101. Independent evaluation of Department of Agriculture 
              commodity purchase process.
Sec. 10102. Quality requirements for clementines.
Sec. 10103. Inclusion of specialty crops in census of agriculture.
Sec. 10104. Mushroom promotion, research, and consumer information.
Sec. 10105. Food safety education initiatives.
Sec. 10106. Farmers' market promotion program.
Sec. 10107. Specialty crops market news allocation.
Sec. 10108. Expedited marketing order for Hass avocados for grades and 
              standards and other purposes.
Sec. 10109. Specialty crop block grants.

                Subtitle B--Pest and Disease Management

Sec. 10201. Plant pest and disease management and disaster prevention.
Sec. 10202. National Clean Plant Network.
Sec. 10203. Plant protection.
Sec. 10204. Regulations to improve management and oversight of certain 
              regulated articles.
Sec. 10205. Pest and Disease Revolving Loan Fund.
Sec. 10206. Cooperative agreements relating to plant pest and disease 
              prevention activities.

                    Subtitle C--Organic Agriculture

Sec. 10301. National organic certification cost-share program.
Sec. 10302. Organic production and market data initiatives.
Sec. 10303. National Organic Program.

                       Subtitle D--Miscellaneous

Sec. 10401. National Honey Board.
Sec. 10402. Identification of honey.
Sec. 10403. Grant program to improve movement of specialty crops.
Sec. 10404. Market loss assistance for asparagus producers.

                          TITLE XI--LIVESTOCK

Sec. 11001. Livestock mandatory reporting.
Sec. 11002. Country of origin labeling.
Sec. 11003. Agricultural Fair Practices Act of 1967 definitions.
Sec. 11004. Annual report.
Sec. 11005. Production contracts.
Sec. 11006. Regulations.
Sec. 11007. Sense of Congress regarding pseudorabies eradication 
              program.
Sec. 11008. Sense of Congress regarding the cattle fever tick 
              eradication program.
Sec. 11009. National Sheep Industry Improvement Center.
Sec. 11010. Trichinae certification program.
Sec. 11011. Low pathogenic diseases.
Sec. 11012. Animal protection.
Sec. 11013. National Aquatic Animal Health Plan.
Sec. 11014. Study on bioenergy operations.
Sec. 11015. Interstate shipment of meat and poultry inspected by 
              Federal and State agencies for certain small 
              establishments.
Sec. 11016. Inspection and grading.
Sec. 11017. Food safety improvement.

       TITLE XII--CROP INSURANCE AND DISASTER ASSISTANCE PROGRAMS

           Subtitle A--Crop Insurance and Disaster Assistance

Sec. 12001. Definition of organic crop.
Sec. 12002. General powers.
Sec. 12003. Reduction in loss ratio.
Sec. 12004. Premiums adjustments.
Sec. 12005. Controlled business insurance.
Sec. 12006. Administrative fee.
Sec. 12007. Time for payment.
Sec. 12008. Catastrophic coverage reimbursement rate.
Sec. 12009. Grain sorghum price election.
Sec. 12010. Premium reduction authority.
Sec. 12011. Enterprise and whole farm units.
Sec. 12012. Payment of portion of premium for area revenue plans.
Sec. 12013. Denial of claims.
Sec. 12014. Settlement of crop insurance claims on farm-stored 
              production.
Sec. 12015. Time for reimbursement.
Sec. 12016. Reimbursement rate.
Sec. 12017. Renegotiation of Standard Reinsurance Agreement.
Sec. 12018. Change in due date for Corporation payments for 
              underwriting gains.
Sec. 12019. Malting barley.
Sec. 12020. Crop production on native sod.
Sec. 12021. Information management.
Sec. 12022. Research and development.
Sec. 12023. Contracts for additional policies and studies.
Sec. 12024. Funding from insurance fund.
Sec. 12025. Pilot programs.
Sec. 12026. Risk management education for beginning farmers or 
              ranchers.
Sec. 12027. Coverage for aquaculture under noninsured crop assistance 
              program.
Sec. 12028. Increase in service fees for noninsured crop assistance 
              program.
Sec. 12029. Determination of certain sweet potato production.
Sec. 12030. Declining yield report.
Sec. 12031. Definition of basic unit.
Sec. 12032. Crop insurance mediation.
Sec. 12033. Supplemental agricultural disaster assistance.
Sec. 12034. Fisheries disaster assistance.

            Subtitle B--Small Business Disaster Loan Program

Sec. 12051. Short title.
Sec. 12052. Definitions.

                 PART I--Disaster Planning and Response

Sec. 12061. Economic injury disaster loans to nonprofits.
Sec. 12062. Coordination of disaster assistance programs with FEMA.
Sec. 12063. Public awareness of disaster declaration and application 
              periods.
Sec. 12064. Consistency between administration regulations and standard 
              operating procedures.
Sec. 12065. Increasing collateral requirements.
Sec. 12066. Processing disaster loans.
Sec. 12067. Information tracking and follow-up system.
Sec. 12068. Increased deferment period.
Sec. 12069. Disaster processing redundancy.
Sec. 12070. Net earnings clauses prohibited.
Sec. 12071. Economic injury disaster loans in cases of ice storms and 
              blizzards.
Sec. 12072. Development and implementation of major disaster response 
              plan.
Sec. 12073. Disaster planning responsibilities.

[[Page H3414]]

Sec. 12074. Assignment of employees of the office of disaster 
              assistance and disaster cadre.
Sec. 12075. Comprehensive disaster response plan.
Sec. 12076. Plans to secure sufficient office space.
Sec. 12077. Applicants that have become a major source of employment 
              due to changed economic circumstances.
Sec. 12078. Disaster loan amounts.
Sec. 12079. Small business bonding threshold.

                       PART II--Disaster Lending

Sec. 12081. Eligibility for additional disaster assistance.
Sec. 12082. Additional economic injury disaster loan assistance.
Sec. 12083. Private disaster loans.
Sec. 12084. Immediate Disaster Assistance program.
Sec. 12085. Expedited disaster assistance loan program.
Sec. 12086. Gulf Coast Disaster Loan Refinancing Program.

                        PART III--Miscellaneous

Sec. 12091. Reports on disaster assistance.

                     TITLE XIII--COMMODITY FUTURES

Sec. 13001. Short title.

                     Subtitle A--General Provisions

Sec. 13101. Commission authority over agreements, contracts or 
              transactions in foreign currency.
Sec. 13102. Anti-fraud authority over principal-to-principal 
              transactions.
Sec. 13103. Criminal and civil penalties.
Sec. 13104. Authorization of appropriations.
Sec. 13105. Technical and conforming amendments.
Sec. 13106. Portfolio margining and security index issues.

Subtitle B--Significant Price Discovery Contracts on Exempt Commercial 
                                Markets

Sec. 13201. Significant price discovery contracts.
Sec. 13202. Large trader reporting.
Sec. 13203. Conforming amendments.
Sec. 13204. Effective date.

                        TITLE XIV--MISCELLANEOUS

   Subtitle A--Socially Disadvantaged Producers and Limited Resource 
                               Producers

Sec. 14001. Improved program delivery by Department of Agriculture on 
              Indian reservations.
Sec. 14002. Foreclosure.
Sec. 14003. Receipt for service or denial of service from certain 
              Department of Agriculture agencies.
Sec. 14004. Outreach and technical assistance for socially 
              disadvantaged farmers or ranchers.
Sec. 14005. Accurate documentation in the Census of Agriculture and 
              certain studies.
Sec. 14006. Transparency and accountability for socially disadvantaged 
              farmers or ranchers.
Sec. 14007. Oversight and compliance.
Sec. 14008. Minority Farmer Advisory Committee.
Sec. 14009. National Appeals Division.
Sec. 14010. Report of civil rights complaints, resolutions, and 
              actions.
Sec. 14011. Sense of Congress relating to claims brought by socially 
              disadvantaged farmers or ranchers.
Sec. 14012. Determination on merits of Pigford claims.
Sec. 14013. Office of Advocacy and Outreach.

                   Subtitle B--Agricultural Security

Sec. 14101. Short title.
Sec. 14102. Definitions.

                    Chapter 1--Agricultural Security

Sec. 14111. Office of Homeland Security.
Sec. 14112. Agricultural biosecurity communication center.
Sec. 14113. Assistance to build local capacity in agricultural 
              biosecurity planning, preparedness, and response.

                      Chapter 2--Other Provisions

Sec. 14121. Research and development of agricultural countermeasures.
Sec. 14122. Agricultural biosecurity grant program.

               Subtitle C--Other Miscellaneous Provisions

Sec. 14201. Cotton classification services.
Sec. 14202. Designation of States for cotton research and promotion.
Sec. 14203. Grants to reduce production of methamphetamines from 
              anhydrous ammonia.
Sec. 14204. Grants to improve supply, stability, safety, and training 
              of agricultural labor force.
Sec. 14205. Amendment to the Right to Financial Privacy Act of 1978.
Sec. 14206. Report on stored quantities of propane.
Sec. 14207. Prohibitions on dog fighting ventures.
Sec. 14208. Department of Agriculture conference transparency.
Sec. 14209. Federal Insecticide, Fungicide, and Rodenticide Act 
              amendments.
Sec. 14210. Importation of live dogs.
Sec. 14211. Permanent debarment from participation in Department of 
              Agriculture programs for fraud.
Sec. 14212. Prohibition on closure or relocation of county offices for 
              the Farm Service Agency.
Sec. 14213. USDA Graduate School.
Sec. 14214. Fines for violations of the Animal Welfare Act.
Sec. 14215. Definition of central filing system.
Sec. 14216. Consideration of proposed recommendations of study on use 
              of cats and dogs in Federal research.
Sec. 14217. Regional economic and infrastructure development.
Sec. 14218. Coordinator for chronically underserved rural areas.
Sec. 14219. Elimination of statute of limitations applicable to 
              collection of debt by administrative offset.
Sec. 14220. Availability of excess and surplus computers in rural 
              areas.
Sec. 14221. Repeal of section 3068 of the Water Resources Development 
              Act of 2007.
Sec. 14222. Domestic food assistance programs.
Sec. 14223. Technical correction.

                   TITLE XV--TRADE AND TAX PROVISIONS

Sec. 15001. Short title; etc.

  Subtitle A--Supplemental Agricultural Disaster Assistance From the 
                Agricultural Disaster Relief Trust Fund

Sec. 15101. Supplemental agricultural disaster assistance.

        Subtitle B--Revenue Provisions for Agriculture Programs

Sec. 15201. Customs User Fees.
Sec. 15202. Time for payment of corporate estimated taxes.

                       Subtitle C--Tax Provisions

                          PART I--Conservation

          subpart a--land and species preservation provisions

Sec. 15301. Exclusion of conservation reserve program payments from 
              SECA tax for certain individuals.
Sec. 15302. Two-year extension of special rule encouraging 
              contributions of capital gain real property for 
              conservation purposes.
Sec. 15303. Deduction for endangered species recovery expenditures.

                      subpart b--timber provisions

Sec. 15311. Temporary reduction in rate of tax on qualified timber gain 
              of corporations.
Sec. 15312. Timber REIT modernization.
Sec. 15313. Mineral royalty income qualifying income for timber REITs.
Sec. 15314. Modification of taxable REIT subsidiary asset test for 
              timber REITs.
Sec. 15315. Safe harbor for timber property.
Sec. 15316. Qualified forestry conservation bonds.

                       PART II--Energy Provisions

                     subpart a--cellulosic biofuel

Sec. 15321. Credit for production of cellulosic biofuel.
Sec. 15322. Comprehensive study of biofuels.

                     subpart b--revenue provisions

Sec. 15331. Modification of alcohol credit.
Sec. 15332. Calculation of volume of alcohol for fuel credits.
Sec. 15333. Ethanol tariff extension.
Sec. 15334. Limitations on duty drawback on certain imported ethanol.

                   PART III--Agricultural Provisions

Sec. 15341. Increase in loan limits on agricultural bonds.
Sec. 15342. Allowance of section 1031 treatment for exchanges involving 
              certain mutual ditch, reservoir, or irrigation company 
              stock.
Sec. 15343. Agricultural chemicals security credit.
Sec. 15344. 3-year depreciation for race horses that are 2-years old or 
              younger.
Sec. 15345. Temporary tax relief for Kiowa County, Kansas and 
              surrounding area.
Sec. 15346. Competitive certification awards modification authority.

                   PART IV--Other Revenue Provisions

Sec. 15351. Limitation on excess farm losses of certain taxpayers.
Sec. 15352. Modification to optional method of computing net earnings 
              from self-employment.
Sec. 15353. Information reporting for Commodity Credit Corporation 
              transactions.

                 PART V--Protection of Social Security

Sec. 15361. Protection of social security.

                      Subtitle D--Trade Provisions

              PART I--Extension of Certain Trade Benefits

Sec. 15401. Short title.
Sec. 15402. Benefits for apparel and other textile articles.
Sec. 15403. Labor Ombudsman and technical assistance improvement and 
              compliance needs assessment and remediation program.
Sec. 15404. Petition process.
Sec. 15405. Conditions regarding enforcement of circumvention.
Sec. 15406. Presidential proclamation authority.
Sec. 15407. Regulations and procedures.
Sec. 15408. Extension of CBTPA.
Sec. 15409. Sense of Congress on interpretation of textile and apparel 
              provisions for Haiti.
Sec. 15410. Sense of Congress on trade mission to Haiti.
Sec. 15411. Sense of Congress on visa systems.
Sec. 15412. Effective date.

                PART II--Miscellaneous Trade Provisions

Sec. 15421. Unused merchandise drawback.
Sec. 15422. Requirements relating to determination of transaction value 
              of imported merchandise.

     SEC. 2. DEFINITION OF SECRETARY.

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

                      TITLE I--COMMODITY PROGRAMS

     SEC. 1001. DEFINITIONS.

       In this title (other than subtitle C):
       (1) Average crop revenue election payment.--The term 
     ``average crop revenue election

[[Page H3415]]

     payment'' means a payment made to producers on a farm under 
     section 1105.
       (2) Base acres.--
       (A) In general.--The term ``base acres'', with respect to a 
     covered commodity on a farm, means the number of acres 
     established under section 1101 of the Farm Security and Rural 
     Investment Act of 2002 (7 U.S.C. 7911) as in effect on 
     September 30, 2007, subject to any adjustment under section 
     1101 of this Act.
       (B) Peanuts.--The term ``base acres for peanuts'' has the 
     meaning given the term in section 1301.
       (3) Counter-cyclical payment.--The term ``counter-cyclical 
     payment'' means a payment made to producers on a farm under 
     section 1104.
       (4) Covered commodity.--The term ``covered commodity'' 
     means wheat, corn, grain sorghum, barley, oats, upland 
     cotton, long grain rice, medium grain rice, pulse crops, 
     soybeans, and other oilseeds.
       (5) Direct payment.--The term ``direct payment'' means a 
     payment made to producers on a farm under section 1103.
       (6) Effective price.--The term ``effective price'', with 
     respect to a covered commodity for a crop year, means the 
     price calculated by the Secretary under section 1104 to 
     determine whether counter-cyclical payments are required to 
     be made for that crop year.
       (7) Extra long staple cotton.--The term ``extra long staple 
     cotton'' means cotton that--
       (A) is produced from pure strain varieties of the 
     Barbadense species or any hybrid of the species, or other 
     similar types of extra long staple cotton, designated by the 
     Secretary, having characteristics needed for various end uses 
     for which United States upland cotton is not suitable and 
     grown in irrigated cotton-growing regions of the United 
     States designated by the Secretary or other areas designated 
     by the Secretary as suitable for the production of the 
     varieties or types; and
       (B) is ginned on a roller-type gin or, if authorized by the 
     Secretary, ginned on another type gin for experimental 
     purposes.
       (8) Loan commodity.--The term ``loan commodity'' means 
     wheat, corn, grain sorghum, barley, oats, upland cotton, 
     extra long staple cotton, long grain rice, medium grain rice, 
     soybeans, other oilseeds, graded wool, nongraded wool, 
     mohair, honey, dry peas, lentils, small chickpeas, and large 
     chickpeas.
       (9) Medium grain rice.--The term ``medium grain rice'' 
     includes short grain rice.
       (10) Other oilseed.--The term ``other oilseed'' means a 
     crop of sunflower seed, rapeseed, canola, safflower, 
     flaxseed, mustard seed, crambe, sesame seed, or any oilseed 
     designated by the Secretary.
       (11) Payment acres.--The term ``payment acres'' means, in 
     the case of direct payments and counter-cyclical payments--
       (A) except as provided in subparagraph (B), 85 percent of 
     the base acres of a covered commodity on a farm on which 
     direct payments or counter-cyclical payments are made; and
       (B) in the case of direct payments for each of the 2009 
     through 2011 crop years, 83.3 percent of the base acres for 
     the covered commodity on a farm on which direct payments are 
     made.
       (12) Payment yield.--The term ``payment yield'' means the 
     yield established for direct payments and the yield 
     established for counter-cyclical payments under section 1102 
     of the Farm Security and Rural Investment Act of 2002 (7 
     U.S.C. 7912) as in effect on September 30, 2007, or under 
     section 1102 of this Act, for a farm for a covered commodity.
       (13) Producer.--
       (A) In general.--The term ``producer'' means an owner, 
     operator, landlord, tenant, or sharecropper that shares in 
     the risk of producing a crop and is entitled to share in the 
     crop available for marketing from the farm, or would have 
     shared had the crop been produced.
       (B) Hybrid seed.--In determining whether a grower of hybrid 
     seed is a producer, the Secretary shall--
       (i) not take into consideration the existence of a hybrid 
     seed contract; and
       (ii) ensure that program requirements do not adversely 
     affect the ability of the grower to receive a payment under 
     this title.
       (14) Pulse crop.--The term ``pulse crop'' means dry peas, 
     lentils, small chickpeas, and large chickpeas.
       (15) State.--The term ``State'' means--
       (A) a State;
       (B) the District of Columbia;
       (C) the Commonwealth of Puerto Rico; and
       (D) any other territory or possession of the United States.
       (16) Target price.--The term ``target price'' means the 
     price per bushel, pound, or hundredweight (or other 
     appropriate unit) of a covered commodity used to determine 
     the payment rate for counter-cyclical payments.
       (17) United states.--The term ``United States'', when used 
     in a geographical sense, means all of the States.
       (18) United states premium factor.--The term ``United 
     States Premium Factor'' means the percentage by which the 
     difference in the United States loan schedule premiums for 
     Strict Middling (SM) 1\1/8\-inch upland cotton and for 
     Middling (M) 1\3/32\-inch upland cotton exceeds the 
     difference in the applicable premiums for comparable 
     international qualities.

       Subtitle A--Direct Payments and Counter-Cyclical Payments

     SEC. 1101. BASE ACRES.

       (a) Adjustment of Base Acres.--
       (1) In general.--The Secretary shall provide for an 
     adjustment, as appropriate, in the base acres for covered 
     commodities for a farm whenever any of the following 
     circumstances occurs:
       (A) A conservation reserve contract entered into under 
     section 1231 of the Food Security Act of 1985 (16 U.S.C. 
     3831) with respect to the farm expires or is voluntarily 
     terminated, or was terminated or expired during the period 
     beginning on October 1, 2007, and ending on the date of 
     enactment of this Act.
       (B) Cropland is released from coverage under a conservation 
     reserve contract by the Secretary, or was released during the 
     period beginning on October 1, 2007, and ending on the date 
     of enactment of this Act.
       (C) The producer has eligible pulse crop acreage, which 
     shall be determined in the same manner as eligible oilseed 
     acreage under section 1101(a)(2) of the Farm Security and 
     Rural Investment Act of 2002 (7 U.S.C. 7911(a)(2)).
       (D) The producer has eligible oilseed acreage as the result 
     of the Secretary designating additional oilseeds, which shall 
     be determined in the same manner as eligible oilseed acreage 
     under section 1101(a)(2) of the Farm Security and Rural 
     Investment Act of 2002 (7 U.S.C. 7911(a)(2)).
       (2) Special conservation reserve acreage payment rules.--
     For the crop year in which a base acres adjustment under 
     subparagraph (A) or (B) of paragraph (1) is first made, the 
     owner of the farm shall elect to receive either direct 
     payments and counter-cyclical payments with respect to the 
     acreage added to the farm under this subsection or a prorated 
     payment under the conservation reserve contract, but not 
     both.
       (b) Prevention of Excess Base Acres.--
       (1) Required reduction.--If the sum of the base acres for a 
     farm, together with the acreage described in paragraph (2) 
     exceeds the actual cropland acreage of the farm, the 
     Secretary shall reduce the base acres for 1 or more covered 
     commodities for the farm or the base acres for peanuts for 
     the farm so that the sum of the base acres and acreage 
     described in paragraph (2) does not exceed the actual 
     cropland acreage of the farm.
       (2) Other acreage.--For purposes of paragraph (1), the 
     Secretary shall include the following:
       (A) Any base acres for peanuts for the farm.
       (B) Any acreage on the farm enrolled in the conservation 
     reserve program or wetlands reserve program under chapter 1 
     of subtitle D of title XII of the Food Security Act of 1985 
     (16 U.S.C. 3830 et seq.).
       (C) Any other acreage on the farm enrolled in a Federal 
     conservation program for which payments are made in exchange 
     for not producing an agricultural commodity on the acreage.
       (D) Any eligible pulse crop acreage, which shall be 
     determined in the same manner as eligible oilseed acreage 
     under section 1101(a)(2) of the Farm Security and Rural 
     Investment Act of 2002 (7 U.S.C. 7911(a)(2)).
       (E) If the Secretary designates additional oilseeds, any 
     eligible oilseed acreage, which shall be determined in the 
     same manner as eligible oilseed acreage under section 
     1101(a)(2) of the Farm Security and Rural Investment Act of 
     2002 (7 U.S.C. 7911(a)(2)).
       (3) Selection of acres.--The Secretary shall give the owner 
     of the farm the opportunity to select the base acres for a 
     covered commodity or the base acres for peanuts for the farm 
     against which the reduction required by paragraph (1) will be 
     made.
       (4) Exception for double-cropped acreage.--In applying 
     paragraph (1), the Secretary shall make an exception in the 
     case of double cropping, as determined by the Secretary.
       (5) Coordinated application of requirements.--The Secretary 
     shall take into account section 1302(b) when applying the 
     requirements of this subsection.
       (c) Reduction in Base Acres.--
       (1) Reduction at option of owner.--
       (A) In general.--The owner of a farm may reduce, at any 
     time, the base acres for any covered commodity for the farm.
       (B) Effect of reduction.--A reduction under subparagraph 
     (A) shall be permanent and made in a manner prescribed by the 
     Secretary.
       (2) Required action by secretary.--
       (A) In general.--The Secretary shall proportionately reduce 
     base acres on a farm for covered commodities for land that 
     has been subdivided and developed for multiple residential 
     units or other nonfarming uses if the size of the tracts and 
     the density of the subdivision is such that the land is 
     unlikely to return to the previous agricultural use, unless 
     the producers on the farm demonstrate that the land--
       (i) remains devoted to commercial agricultural production; 
     or
       (ii) is likely to be returned to the previous agricultural 
     use.
       (B) Requirement.--The Secretary shall establish procedures 
     to identify land described in subparagraph (A).
       (3) Review and report.--Each year, to ensure, to the 
     maximum extent practicable, that payments are received only 
     by producers, the Secretary shall submit to Congress a report 
     that describes the results of the actions taken under 
     paragraph (2).
       (d) Treatment of Farms With Limited Base Acres.--
       (1) Prohibition on payments.--Except as provided in 
     paragraph (2) and notwithstanding any other provision of this 
     title, a producer on a farm may not receive direct payments, 
     counter-cyclical payments, or average crop revenue election 
     payments if the sum of the base acres of the farm is 10 acres 
     or less, as determined by the Secretary.
       (2) Exceptions.--Paragraph (1) shall not apply to a farm 
     owned by--
       (A) a socially disadvantaged farmer or rancher (as defined 
     in section 355(e) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 2003(e)); or
       (B) a limited resource farmer or rancher, as defined by the 
     Secretary.
       (3) Data collection and publication.--The Secretary shall--
       (A) collect and publish segregated data and survey 
     information about the farm profiles, utilization of land, and 
     crop production; and
       (B) perform an evaluation on the supply and price of fruits 
     and vegetables based on the effects of suspension of base 
     acres under this section.

[[Page H3416]]

     SEC. 1102. PAYMENT YIELDS.

       (a) Establishment and Purpose.--For the purpose of making 
     direct payments and counter-cyclical payments under this 
     subtitle, the Secretary shall provide for the establishment 
     of a yield for each farm for any designated oilseed or 
     eligible pulse crop for which a payment yield was not 
     established under section 1102 of the Farm Security and Rural 
     Investment Act of 2002 (7 U.S.C. 7912) in accordance with 
     this section.
       (b) Payment Yields for Designated Oilseeds and Eligible 
     Pulse Crops.--
       (1) Determination of average yield.--In the case of 
     designated oilseeds and eligible pulse crops, the Secretary 
     shall determine the average yield per planted acre for the 
     designated oilseed or pulse crop on a farm for the 1998 
     through 2001 crop years, excluding any crop year in which the 
     acreage planted to the designated oilseed or pulse crop was 
     zero.
       (2) Adjustment for payment yield.--
       (A) In general.--The payment yield for a farm for a 
     designated oilseed or eligible pulse crop shall be equal to 
     the product of the following:
       (i) The average yield for the designated oilseed or pulse 
     crop determined under paragraph (1).
       (ii) The ratio resulting from dividing the national average 
     yield for the designated oilseed or pulse crop for the 1981 
     through 1985 crops by the national average yield for the 
     designated oilseed or pulse crop for the 1998 through 2001 
     crops.
       (B) No national average yield information available.--To 
     the extent that national average yield information for a 
     designated oilseed or pulse crop is not available, the 
     Secretary shall use such information as the Secretary 
     determines to be fair and equitable to establish a national 
     average yield under this section.
       (3) Use of partial county average yield.--If the yield per 
     planted acre for a crop of a designated oilseed or pulse crop 
     for a farm for any of the 1998 through 2001 crop years was 
     less than 75 percent of the county yield for that designated 
     oilseed or pulse crop, the Secretary shall assign a yield for 
     that crop year equal to 75 percent of the county yield for 
     the purpose of determining the average under paragraph (1).
       (4) No historic yield data available.--In the case of 
     establishing yields for designated oilseeds and eligible 
     pulse crops, if historic yield data is not available, the 
     Secretary shall use the ratio for dry peas calculated under 
     paragraph (2)(A)(ii) in determining the yields for designated 
     oilseeds and eligible pulse crops, as determined to be fair 
     and equitable by the Secretary.

     SEC. 1103. AVAILABILITY OF DIRECT PAYMENTS.

       (a) Payment Required.--For each of the 2008 through 2012 
     crop years of each covered commodity (other than pulse 
     crops), the Secretary shall make direct payments to producers 
     on farms for which base acres and payment yields are 
     established.
       (b) Payment Rate.--Except as provided in section 1105, the 
     payment rates used to make direct payments with respect to 
     covered commodities for a crop year shall be as follows:
       (1) Wheat, $0.52 per bushel.
       (2) Corn, $0.28 per bushel.
       (3) Grain sorghum, $0.35 per bushel.
       (4) Barley, $0.24 per bushel.
       (5) Oats, $0.024 per bushel.
       (6) Upland cotton, $0.0667 per pound.
       (7) Long grain rice, $2.35 per hundredweight.
       (8) Medium grain rice, $2.35 per hundredweight.
       (9) Soybeans, $0.44 per bushel.
       (10) Other oilseeds, $0.80 per hundredweight.
       (c) Payment Amount.--The amount of the direct payment to be 
     paid to the producers on a farm for a covered commodity for a 
     crop year shall be equal to the product of the following:
       (1) The payment rate specified in subsection (b).
       (2) The payment acres of the covered commodity on the farm.
       (3) The payment yield for the covered commodity for the 
     farm.
       (d) Time for Payment.--
       (1) In general.--Except as provided in paragraph (2), in 
     the case of each of the 2008 through 2012 crop years, the 
     Secretary may not make direct payments before October 1 of 
     the calendar year in which the crop of the covered commodity 
     is harvested.
       (2) Advance payments.--
       (A) Option.--
       (i) In general.--At the option of the producers on a farm, 
     the Secretary shall pay in advance up to 22 percent of the 
     direct payment for a covered commodity for any of the 2008 
     through 2011 crop years to the producers on a farm.
       (ii) 2008 crop year.--If the producers on a farm elect to 
     receive advance direct payments under clause (i) for a 
     covered commodity for the 2008 crop year, as soon as 
     practicable after the election, the Secretary shall make the 
     advance direct payment to the producers on the farm.
       (B) Month.--
       (i) Selection.--Subject to clauses (ii) and (iii), the 
     producers on a farm shall select the month during which the 
     advance payment for a crop year will be made.
       (ii) Options.--The month selected may be any month during 
     the period--

       (I) beginning on December 1 of the calendar year before the 
     calendar year in which the crop of the covered commodity is 
     harvested; and
       (II) ending during the month within which the direct 
     payment would otherwise be made.

       (iii) Change.--The producers on a farm may change the 
     selected month for a subsequent advance payment by providing 
     advance notice to the Secretary.
       (3) Repayment of advance payments.--If a producer on a farm 
     that receives an advance direct payment for a crop year 
     ceases to be a producer on that farm, or the extent to which 
     the producer shares in the risk of producing a crop changes, 
     before the date the remainder of the direct payment is made, 
     the producer shall be responsible for repaying the Secretary 
     the applicable amount of the advance payment, as determined 
     by the Secretary.

     SEC. 1104. AVAILABILITY OF COUNTER-CYCLICAL PAYMENTS.

       (a) Payment Required.--Except as provided in section 1105, 
     for each of the 2008 through 2012 crop years for each covered 
     commodity, the Secretary shall make counter-cyclical payments 
     to producers on farms for which payment yields and base acres 
     are established with respect to the covered commodity if the 
     Secretary determines that the effective price for the covered 
     commodity is less than the target price for the covered 
     commodity.
       (b) Effective Price.--
       (1) Covered commodities other than rice.--Except as 
     provided in paragraph (2), for purposes of subsection (a), 
     the effective price for a covered commodity is equal to the 
     sum of the following:
       (A) The higher of the following:
       (i) The national average market price received by producers 
     during the 12-month marketing year for the covered commodity, 
     as determined by the Secretary.
       (ii) The national average loan rate for a marketing 
     assistance loan for the covered commodity in effect for the 
     applicable period under subtitle B.
       (B) The payment rate in effect for the covered commodity 
     under section 1103 for the purpose of making direct payments 
     with respect to the covered commodity.
       (2) Rice.--In the case of long grain rice and medium grain 
     rice, for purposes of subsection (a), the effective price for 
     each type or class of rice is equal to the sum of the 
     following:
       (A) The higher of the following:
       (i) The national average market price received by producers 
     during the 12-month marketing year for the type or class of 
     rice, as determined by the Secretary.
       (ii) The national average loan rate for a marketing 
     assistance loan for the type or class of rice in effect for 
     the applicable period under subtitle B.
       (B) The payment rate in effect for the type or class of 
     rice under section 1103 for the purpose of making direct 
     payments with respect to the type or class of rice.
       (c) Target Price.--
       (1) 2008 crop year.--For purposes of the 2008 crop year, 
     the target prices for covered commodities shall be as 
     follows:
       (A) Wheat, $3.92 per bushel.
       (B) Corn, $2.63 per bushel.
       (C) Grain sorghum, $2.57 per bushel.
       (D) Barley, $2.24 per bushel.
       (E) Oats, $1.44 per bushel.
       (F) Upland cotton, $0.7125 per pound.
       (G) Long grain rice, $10.50 per hundredweight.
       (H) Medium grain rice, $10.50 per hundredweight.
       (I) Soybeans, $5.80 per bushel.
       (J) Other oilseeds, $10.10 per hundredweight.
       (2) 2009 crop year.--For purposes of the 2009 crop year, 
     the target prices for covered commodities shall be as 
     follows:
       (A) Wheat, $3.92 per bushel.
       (B) Corn, $2.63 per bushel.
       (C) Grain sorghum, $2.57 per bushel.
       (D) Barley, $2.24 per bushel.
       (E) Oats, $1.44 per bushel.
       (F) Upland cotton, $0.7125 per pound.
       (G) Long grain rice, $10.50 per hundredweight.
       (H) Medium grain rice, $10.50 per hundredweight.
       (I) Soybeans, $5.80 per bushel.
       (J) Other oilseeds, $10.10 per hundredweight.
       (K) Dry peas, $8.32 per hundredweight.
       (L) Lentils, $12.81 per hundredweight.
       (M) Small chickpeas, $10.36 per hundredweight.
       (N) Large chickpeas, $12.81 per hundredweight.
       (3) Subsequent crop years.--For purposes of each of the 
     2010 through 2012 crop years, the target prices for covered 
     commodities shall be as follows:
       (A) Wheat, $4.17 per bushel.
       (B) Corn, $2.63 per bushel.
       (C) Grain sorghum, $2.63 per bushel.
       (D) Barley, $2.63 per bushel.
       (E) Oats, $1.79 per bushel.
       (F) Upland cotton, $0.7125 per pound.
       (G) Long grain rice, $10.50 per hundredweight.
       (H) Medium grain rice, $10.50 per hundredweight.
       (I) Soybeans, $6.00 per bushel.
       (J) Other oilseeds, $12.68 per hundredweight.
       (K) Dry peas, $8.32 per hundredweight.
       (L) Lentils, $12.81 per hundredweight.
       (M) Small chickpeas, $10.36 per hundredweight.
       (N) Large chickpeas, $12.81 per hundredweight.
       (d) Payment Rate.--The payment rate used to make counter-
     cyclical payments with respect to a covered commodity for a 
     crop year shall be equal to the difference between--
       (1) the target price for the covered commodity; and
       (2) the effective price determined under subsection (b) for 
     the covered commodity.
       (e) Payment Amount.--If counter-cyclical payments are 
     required to be paid under this section for any of the 2008 
     through 2012 crop years of a covered commodity, the amount of 
     the counter-cyclical payment to be paid to the producers on a 
     farm for that crop year shall be equal to the product of the 
     following:
       (1) The payment rate specified in subsection (d).
       (2) The payment acres of the covered commodity on the farm.
       (3) The payment yield for the covered commodity for the 
     farm.
       (f) Time for Payments.--
       (1) General rule.--Except as provided in paragraph (2), if 
     the Secretary determines under

[[Page H3417]]

     subsection (a) that counter-cyclical payments are required to 
     be made under this section for the crop of a covered 
     commodity, beginning October 1, or as soon as practicable 
     thereafter, after the end of the marketing year for the 
     covered commodity, the Secretary shall make the counter-
     cyclical payments for the crop.
       (2) Availability of partial payments.--
       (A) In general.--If, before the end of the 12-month 
     marketing year for a covered commodity, the Secretary 
     estimates that counter-cyclical payments will be required for 
     the crop of the covered commodity, the Secretary shall give 
     producers on a farm the option to receive partial payments of 
     the counter-cyclical payment projected to be made for that 
     crop of the covered commodity.
       (B) Election.--
       (i) In general.--The Secretary shall allow producers on a 
     farm to make an election to receive partial payments for a 
     covered commodity under subparagraph (A) at any time but not 
     later than 60 days prior to the end of the marketing year for 
     that covered commodity.
       (ii) Date of issuance.--The Secretary shall issue the 
     partial payment after the date of an announcement by the 
     Secretary but not later than 30 days prior to the end of the 
     marketing year.
       (3) Time for partial payments.--When the Secretary makes 
     partial payments for a covered commodity for any of the 2008 
     through 2010 crop years--
       (A) the first partial payment shall be made after 
     completion of the first 180 days of the marketing year for 
     the covered commodity; and
       (B) the final partial payment shall be made beginning 
     October 1, or as soon as practicable thereafter, after the 
     end of the applicable marketing year for the covered 
     commodity.
       (4) Amount of partial payment.--
       (A) First partial payment.--For each of the 2008 through 
     2010 crops of a covered commodity, the first partial payment 
     under paragraph (3) to the producers on a farm may not exceed 
     40 percent of the projected counter-cyclical payment for the 
     covered commodity for the crop year, as determined by the 
     Secretary.
       (B) Final payment.--The final payment for a covered 
     commodity for a crop year shall be equal to the difference 
     between--
       (i) the actual counter-cyclical payment to be made to the 
     producers for the covered commodity for that crop year; and
       (ii) the amount of the partial payment made to the 
     producers under subparagraph (A).
       (5) Repayment.--The producers on a farm that receive a 
     partial payment under this subsection for a crop year shall 
     repay to the Secretary the amount, if any, by which the total 
     of the partial payments exceed the actual counter-cyclical 
     payment to be made for the covered commodity for that crop 
     year.

     SEC. 1105. AVERAGE CROP REVENUE ELECTION PROGRAM.

       (a) Availability and Election of Alternative Approach.--
       (1) Availability of average crop revenue election 
     payments.--As an alternative to receiving counter-cyclical 
     payments under section 1104 or 1304 and in exchange for a 20-
     percent reduction in direct payments under section 1103 or 
     1303 and a 30-percent reduction in marketing assistance loan 
     rates under section 1202 or 1307, with respect to all covered 
     commodities and peanuts on a farm, during each of the 2009, 
     2010, 2011, and 2012 crop years, the Secretary shall give the 
     producers on the farm an opportunity to make an irrevocable 
     election to instead receive average crop revenue election 
     (referred to in this section as ``ACRE'') payments under this 
     section for the initial crop year for which the election is 
     made through the 2012 crop year.
       (2) Limitation.--
       (A) In general.--The total number of planted acres for 
     which the producers on a farm may receive ACRE payments under 
     this section may not exceed the total base acreage for all 
     covered commodities and peanuts on the farm.
       (B) Election.--If the total number of planted acres to all 
     covered commodities and peanuts of the producers on a farm 
     exceeds the total base acreage of the farm, the producers on 
     the farm may choose which planted acres to enroll in the 
     program under this section.
       (3) Election; time for election.--
       (A) In general.--The Secretary shall provide notice to 
     producers regarding the opportunity to make each of the 
     elections described in paragraph (1).
       (B) Notice requirements.--The notice shall include--
       (i) notice of the opportunity of the producers on a farm to 
     make the election; and
       (ii) information regarding the manner in which the election 
     must be made and the time periods and manner in which notice 
     of the election must be submitted to the Secretary.
       (4) Election deadline.--Within the time period and in the 
     manner prescribed pursuant to paragraph (3), all of the 
     producers on a farm shall submit to the Secretary notice of 
     an election made under paragraph (1).
       (5) Effect of failure to make election.--If all of the 
     producers on a farm fail to make an election under paragraph 
     (1), make different elections under paragraph (1), or fail to 
     timely notify the Secretary of the election made, as required 
     by paragraph (4), all of the producers on the farm shall be 
     deemed to have made the election to receive counter-cyclical 
     payments under section 1104 or 1304 for all covered 
     commodities and peanuts on the farm, and to otherwise not 
     have made the election described in paragraph (1), for the 
     applicable crop years.
       (b) Payments Required.--
       (1) In general.--In the case of producers on a farm who 
     make an election under subsection (a) to receive ACRE 
     payments for any of the 2009 through 2012 crop years for all 
     covered commodities and peanuts, the Secretary shall make 
     ACRE payments available to the producers on a farm in 
     accordance with this subsection.
       (2) ACRE payment.--
       (A) In general.--Subject to paragraph (3), in the case of 
     producers on a farm described in paragraph (1), the Secretary 
     shall make ACRE payments available to the producers on a farm 
     for each crop year if--
       (i) the actual State revenue for the crop year for the 
     covered commodity or peanuts in the State determined under 
     subsection (c); is less than
       (ii) the ACRE program guarantee for the crop year for the 
     covered commodity or peanuts in the State determined under 
     subsection (d).
       (B) Individual loss.--The Secretary shall make ACRE 
     payments available to the producers on a farm in a State for 
     a crop year only if (as determined by the Secretary)--
       (i) the actual farm revenue for the crop year for the 
     covered commodity or peanuts, as determined under subsection 
     (e); is less than
       (ii) the farm ACRE benchmark revenue for the crop year for 
     the covered commodity or peanuts, as determined under 
     subsection (f).
       (3) Time for payments.--In the case of each of the 2009 
     through 2012 crop years, the Secretary shall make ACRE 
     payments beginning October 1, or as soon as practicable 
     thereafter, after the end of the applicable marketing year 
     for the covered commodity or peanuts.
       (c) Actual State Revenue.--
       (1) In general.--For purposes of subsection (b)(2)(A), the 
     amount of the actual State revenue for a crop year of a 
     covered commodity or peanuts shall equal the product obtained 
     by multiplying--
       (A) the actual State yield for each planted acre for the 
     crop year for the covered commodity or peanuts determined 
     under paragraph (2); and
       (B) the national average market price for the crop year for 
     the covered commodity or peanuts determined under paragraph 
     (3).
       (2) Actual state yield.--For purposes of paragraph (1)(A), 
     the actual State yield for each planted acre for a crop year 
     for a covered commodity or peanuts in a State shall equal (as 
     determined by the Secretary)--
       (A) the quantity of the covered commodity or peanuts that 
     is produced in the State during the crop year; divided by
       (B) the number of acres that are planted to the covered 
     commodity or peanuts in the State during the crop year.
       (3) National average market price.--For purposes of 
     paragraph (1)(B), the national average market price for a 
     crop year for a covered commodity or peanuts in a State shall 
     equal the greater of--
       (A) the national average market price received by producers 
     during the 12-month marketing year for the covered commodity 
     or peanuts, as determined by the Secretary; or
       (B) the marketing assistance loan rate for the covered 
     commodity or peanuts under section 1202 or 1307, as reduced 
     under subsection (a)(1).
       (d) ACRE Program Guarantee.--
       (1) Amount.--
       (A) In general.--For purposes of subsection (b)(2)(A) and 
     subject to subparagraph (B), the ACRE program guarantee for a 
     crop year for a covered commodity or peanuts in a State shall 
     equal 90 percent of the product obtained by multiplying--
       (i) the benchmark State yield for each planted acre for the 
     crop year for the covered commodity or peanuts in a State 
     determined under paragraph (2); and
       (ii) the ACRE program guarantee price for the crop year for 
     the covered commodity or peanuts determined under paragraph 
     (3).
       (B) Minimum and maximum guarantee.--In the case of each of 
     the 2010 through 2012 crop years, the ACRE program guarantee 
     for a crop year for a covered commodity or peanuts under 
     subparagraph (A) shall not decrease or increase more than 10 
     percent from the guarantee for the preceding crop year.
       (2) Benchmark state yield.--
       (A) In general.--For purposes of paragraph (1)(A)(i), 
     subject to subparagraph (B), the benchmark State yield for 
     each planted acre for a crop year for a covered commodity or 
     peanuts in a State shall equal the average yield per planted 
     acre for the covered commodity or peanuts in the State for 
     the most recent 5 crop year yields, excluding each of the 
     crop years with the highest and lowest yields, using National 
     Agricultural Statistics Service data.
       (B) Assigned yield.--If the Secretary cannot establish the 
     benchmark State yield for each planted acre for a crop year 
     for a covered commodity or peanuts in a State in accordance 
     with subparagraph (A) or if the yield determined under 
     subparagraph (A) is an unrepresentative average yield for the 
     State (as determined by the Secretary), the Secretary shall 
     assign a benchmark State yield for each planted acre for the 
     crop year for the covered commodity or peanuts in the State 
     on the basis of--
       (i) previous average yields for a period of 5 crop years, 
     excluding each of the crop years with the highest and lowest 
     yields; or
       (ii) benchmark State yields for planted acres for the crop 
     year for the covered commodity or peanuts in similar States.
       (3) ACRE program guarantee price.--For purposes of 
     paragraph (1)(A)(ii), the ACRE program guarantee price for a 
     crop year for a covered commodity or peanuts in a State shall 
     be the simple average of the national average market price 
     received by producers of the covered commodity or peanuts for 
     the most recent 2 crop years, as determined by the Secretary.
       (4) States with irrigated and nonirrigated land.--In the 
     case of a State in which at least 25 percent of the acreage 
     planted to a covered commodity or peanuts in the State is 
     irrigated and at least 25 percent of the acreage planted to 
     the covered commodity or peanuts in the State is not 
     irrigated, the Secretary shall calculate a separate ACRE 
     program guarantee for the irrigated and nonirrigated areas of 
     the State for the covered commodity or peanuts.

[[Page H3418]]

       (e) Actual Farm Revenue.--For purposes of subsection 
     (b)(2)(B)(i), the amount of the actual farm revenue for a 
     crop year for a covered commodity or peanuts shall equal the 
     amount determined by multiplying--
       (1) the actual yield for the covered commodity or peanuts 
     of the producers on the farm; and
       (2) the national average market price for the crop year for 
     the covered commodity or peanuts determined under subsection 
     (c)(3).
       (f) Farm ACRE Benchmark Revenue.--For purposes of 
     subsection (b)(2)(B)(ii), the farm ACRE benchmark revenue for 
     the crop year for a covered commodity or peanuts shall equal 
     the sum obtained by adding--
       (1) the amount determined by multiplying--
       (A) the average yield per planted acre for the covered 
     commodity or peanuts of the producers on the farm for the 
     most recent 5 crop years, excluding each of the crop years 
     with the highest and lowest yields; and
       (B) the ACRE program guarantee price for the applicable 
     crop year for the covered commodity or peanuts in a State 
     determined under subsection (d)(3); and
       (2) the amount of the per acre crop insurance premium 
     required to be paid by the producers on the farm for the 
     applicable crop year for the covered commodity or peanuts on 
     the farm.
       (g) Payment Amount.--If ACRE payments are required to be 
     paid for any of the 2009 through 2012 crop years of a covered 
     commodity or peanuts under this section, the amount of the 
     ACRE payment to be paid to the producers on the farm for the 
     crop year under this section shall be equal to the product 
     obtained by multiplying--
       (1) the lesser of--
       (A) the difference between--
       (i) the ACRE program guarantee for the crop year for the 
     covered commodity or peanuts in the State determined under 
     subsection (d); and
       (ii) the actual State revenue from the crop year for the 
     covered commodity or peanuts in the State determined under 
     subsection (c); and
       (B) 25 percent of the ACRE program guarantee for the crop 
     year for the covered commodity or peanuts in the State 
     determined under subsection (d);
       (2)(A) for each of the 2009 through 2011 crop years, 83.3 
     percent of the acreage planted or considered planted to the 
     covered commodity or peanuts for harvest on the farm in the 
     crop year; and
       (B) for the 2012 crop year, 85 percent of the acreage 
     planted or considered planted to the covered commodity or 
     peanuts for harvest on the farm in the crop year; and
       (3) the quotient obtained by dividing--
       (A) the average yield per planted acre for the covered 
     commodity or peanuts of the producers on the farm for the 
     most recent 5 crop years, excluding each of the crop years 
     with the highest and lowest yields; by
       (B) the benchmark State yield for the crop year, as 
     determined under subsection (d)(2).

     SEC. 1106. PRODUCER AGREEMENT REQUIRED AS CONDITION OF 
                   PROVISION OF PAYMENTS.

       (a) Compliance With Certain Requirements.--
       (1) Requirements.--Before the producers on a farm may 
     receive direct payments, counter-cyclical payments, or 
     average crop revenue election payments with respect to the 
     farm, the producers shall agree, during the crop year for 
     which the payments are made and in exchange for the 
     payments--
       (A) to comply with applicable conservation requirements 
     under subtitle B of title XII of the Food Security Act of 
     1985 (16 U.S.C. 3811 et seq.);
       (B) to comply with applicable wetland protection 
     requirements under subtitle C of title XII of that Act (16 
     U.S.C. 3821 et seq.);
       (C) to comply with the planting flexibility requirements of 
     section 1107;
       (D) to use the land on the farm, in a quantity equal to the 
     attributable base acres for the farm and any base acres for 
     peanuts for the farm under subtitle C, for an agricultural or 
     conserving use, and not for a nonagricultural commercial, 
     industrial, or residential use, as determined by the 
     Secretary; and
       (E) to effectively control noxious weeds and otherwise 
     maintain the land in accordance with sound agricultural 
     practices, as determined by the Secretary, if the 
     agricultural or conserving use involves the noncultivation of 
     any portion of the land referred to in subparagraph (D).
       (2) Compliance.--The Secretary may issue such rules as the 
     Secretary considers necessary to ensure producer compliance 
     with the requirements of paragraph (1).
       (3) Modification.--At the request of the transferee or 
     owner, the Secretary may modify the requirements of this 
     subsection if the modifications are consistent with the 
     objectives of this subsection, as determined by the 
     Secretary.
       (b) Transfer or Change of Interest in Farm.--
       (1) Termination.--
       (A) In general.--Except as provided in paragraph (2), a 
     transfer of (or change in) the interest of the producers on a 
     farm in base acres for which direct payments or counter-
     cyclical payments are made, or on which average crop revenue 
     election payments are based, shall result in the termination 
     of the direct payments, counter-cyclical payments, or average 
     crop revenue election payments to the extent the payments are 
     made or based on the base acres, unless the transferee or 
     owner of the acreage agrees to assume all obligations under 
     subsection (a).
       (B) Effective date.--The termination shall take effect on 
     the date determined by the Secretary.
       (2) Exception.--If a producer entitled to a direct payment, 
     counter-cyclical payment, or average crop revenue election 
     payment dies, becomes incompetent, or is otherwise unable to 
     receive the payment, the Secretary shall make the payment, in 
     accordance with rules issued by the Secretary.
       (c) Reports.--
       (1) Acreage reports.--As a condition on the receipt of any 
     benefits under this subtitle or subtitle B, the Secretary 
     shall require producers on a farm to submit to the Secretary 
     annual acreage reports with respect to all cropland on the 
     farm.
       (2) Production reports.--As a condition on the receipt of 
     any benefits under this subtitle or subtitle B, the Secretary 
     shall require producers on a farm that receive payments under 
     section 1105 to submit to the Secretary annual production 
     reports with respect to all covered commodities and peanuts 
     produced on the farm.
       (3) Penalties.--No penalty with respect to benefits under 
     this subtitle or subtitle B shall be assessed against the 
     producers on a farm for an inaccurate acreage or production 
     report unless the producers on the farm knowingly and 
     willfully falsified the acreage or production report.
       (d) Tenants and Sharecroppers.--In carrying out this 
     subtitle, the Secretary shall provide adequate safeguards to 
     protect the interests of tenants and sharecroppers.
       (e) Sharing of Payments.--The Secretary shall provide for 
     the sharing of direct payments, counter-cyclical payments, or 
     average crop revenue election payments among the producers on 
     a farm on a fair and equitable basis.

     SEC. 1107. PLANTING FLEXIBILITY.

       (a) Permitted Crops.--Subject to subsection (b), any 
     commodity or crop may be planted on base acres on a farm.
       (b) Limitations Regarding Certain Commodities.--
       (1) General limitation.--The planting of an agricultural 
     commodity specified in paragraph (3) shall be prohibited on 
     base acres unless the commodity, if planted, is destroyed 
     before harvest.
       (2) Treatment of trees and other perennials.--The planting 
     of an agricultural commodity specified in paragraph (3) that 
     is produced on a tree or other perennial plant shall be 
     prohibited on base acres.
       (3) Covered agricultural commodities.--Paragraphs (1) and 
     (2) apply to the following agricultural commodities:
       (A) Fruits.
       (B) Vegetables (other than mung beans and pulse crops).
       (C) Wild rice.
       (c) Exceptions.--Paragraphs (1) and (2) of subsection (b) 
     shall not limit the planting of an agricultural commodity 
     specified in paragraph (3) of that subsection--
       (1) in any region in which there is a history of double-
     cropping of covered commodities with agricultural commodities 
     specified in subsection (b)(3), as determined by the 
     Secretary, in which case the double-cropping shall be 
     permitted;
       (2) on a farm that the Secretary determines has a history 
     of planting agricultural commodities specified in subsection 
     (b)(3) on base acres, except that direct payments and 
     counter-cyclical payments shall be reduced by an acre for 
     each acre planted to such an agricultural commodity; or
       (3) by the producers on a farm that the Secretary 
     determines has an established planting history of a specific 
     agricultural commodity specified in subsection (b)(3), except 
     that--
       (A) the quantity planted may not exceed the average annual 
     planting history of such agricultural commodity by the 
     producers on the farm in the 1991 through 1995 or 1998 
     through 2001 crop years (excluding any crop year in which no 
     plantings were made), as determined by the Secretary; and
       (B) direct payments and counter-cyclical payments shall be 
     reduced by an acre for each acre planted to such agricultural 
     commodity.
       (d) Planting Transferability Pilot Project.--
       (1) Pilot project authorized.--Notwithstanding paragraphs 
     (1) and (2) of subsection (b) and in addition to the 
     exceptions provided in subsection (c), the Secretary shall 
     carry out a pilot project to permit the planting of 
     cucumbers, green peas, lima beans, pumpkins, snap beans, 
     sweet corn, and tomatoes grown for processing on base acres 
     during each of the 2009 through 2012 crop years.
       (2) Pilot project states and acres.--The number of base 
     acres eligible during each crop year for the pilot project 
     under paragraph (1) shall be--
       (A) 9,000 acres in the State of Illinois;
       (B) 9,000 acres in the State of Indiana;
       (C) 1,000 acres in the State of Iowa;
       (D) 9,000 acres in the State of Michigan;
       (E) 34,000 acres in the State of Minnesota;
       (F) 4,000 acres in the State of Ohio; and
       (G) 9,000 acres in the State of Wisconsin.
       (3) Contract and management requirements.--To be eligible 
     for selection to participate in the pilot project, the 
     producers on a farm shall--
       (A) demonstrate to the Secretary that the producers on the 
     farm have entered into a contract to produce a crop of a 
     commodity specified in paragraph (1) for processing;
       (B) agree to produce the crop as part of a program of crop 
     rotation on the farm to achieve agronomic and pest and 
     disease management benefits; and
       (C) provide evidence of the disposition of the crop.
       (4) Temporary reduction in base acres.--The base acres on a 
     farm for a crop year shall be reduced by an acre for each 
     acre planted under the pilot program.
       (5) Duration of reductions.--The reduction in the base 
     acres of a farm for a crop year under paragraph (4) shall 
     expire at the end of the crop year.
       (6) Recalculation of base acres.--
       (A) In general.--If the Secretary recalculates base acres 
     for a farm while the farm is included in the pilot project, 
     the planting and production

[[Page H3419]]

     of a crop of a commodity specified in paragraph (1) on base 
     acres for which a temporary reduction was made under this 
     section shall be considered to be the same as the planting 
     and production of a covered commodity.
       (B) Prohibition.--Nothing in this paragraph provides 
     authority for the Secretary to recalculate base acres for a 
     farm.
       (7) Pilot impact evaluation.--
       (A) In general.--The Secretary shall periodically evaluate 
     the pilot project conducted under this subsection to 
     determine the effects of the pilot project on the supply and 
     price of--
       (i) fresh fruits and vegetables; and
       (ii) fruits and vegetables for processing.
       (B) Determination.--An evaluation under subparagraph (A) 
     shall include a determination as to whether--
       (i) producers of fresh fruits and vegetables are being 
     negatively impacted; and
       (ii) existing production capacities are being supplanted.
       (C) Report.--As soon as practicable after conducting an 
     evaluation under subparagraph (A), the Secretary shall submit 
     to the Committee on Agriculture of the House of 
     Representatives and the Committee on Agriculture, Nutrition, 
     and Forestry of the Senate a report that describes the 
     results of the evaluation.

     SEC. 1108. SPECIAL RULE FOR LONG GRAIN AND MEDIUM GRAIN RICE.

       (a) Calculation Method.--Subject to subsections (b) and 
     (c), for the purposes of determining the amount of the 
     counter-cyclical payments to be paid to the producers on a 
     farm for long grain rice and medium grain rice under section 
     1104, the base acres of rice on the farm shall be apportioned 
     using the 4-year average of the percentages of acreage 
     planted in the applicable State to long grain rice and medium 
     grain rice during the 2003 through 2006 crop years, as 
     determined by the Secretary.
       (b) Producer Election.--As an alternative to the 
     calculation method described in subsection (a), the Secretary 
     shall provide producers on a farm the opportunity to elect to 
     apportion rice base acres on the farm using the 4-year 
     average of--
       (1) the percentages of acreage planted on the farm to long 
     grain rice and medium grain rice during the 2003 through 2006 
     crop years;
       (2) the percentages of any acreage on the farm that the 
     producers were prevented from planting to long grain rice and 
     medium grain rice during the 2003 through 2006 crop years 
     because of drought, flood, other natural disaster, or other 
     condition beyond the control of the producers, as determined 
     by the Secretary; and
       (3) in the case of a crop year for which a producer on a 
     farm elected not to plant to long grain and medium grain rice 
     during the 2003 through 2006 crop years, the percentages of 
     acreage planted in the applicable State to long grain rice 
     and medium grain rice, as determined by the Secretary.
       (c) Limitation.--In carrying out this section, the 
     Secretary shall use the same total base acres, payment acres, 
     and payment yields established with respect to rice under 
     sections 1101 and 1102 of the Farm Security and Rural 
     Investment Act of 2002 (7 U.S.C. 7911, 7912), as in effect on 
     September 30, 2007, subject to any adjustment under section 
     1101 of this Act.

     SEC. 1109. PERIOD OF EFFECTIVENESS.

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

  Subtitle B--Marketing Assistance Loans and Loan Deficiency Payments

     SEC. 1201. AVAILABILITY OF NONRECOURSE MARKETING ASSISTANCE 
                   LOANS FOR LOAN COMMODITIES.

       (a) Nonrecourse Loans Available.--
       (1) Availability.--For each of the 2008 through 2012 crops 
     of each loan commodity, the Secretary shall make available to 
     producers on a farm nonrecourse marketing assistance loans 
     for loan commodities produced on the farm.
       (2) Terms and conditions.--The marketing assistance loans 
     shall be made under terms and conditions that are prescribed 
     by the Secretary and at the loan rate established under 
     section 1202 for the loan commodity.
       (b) Eligible Production.--The producers on a farm shall be 
     eligible for a marketing assistance loan under subsection (a) 
     for any quantity of a loan commodity produced on the farm.
       (c) Compliance With Conservation and Wetlands 
     Requirements.--As a condition of the receipt of a marketing 
     assistance loan under subsection (a), the producer shall 
     comply with applicable conservation requirements under 
     subtitle B of title XII of the Food Security Act of 1985 (16 
     U.S.C. 3811 et seq.) and applicable wetland protection 
     requirements under subtitle C of title XII of that Act (16 
     U.S.C. 3821 et seq.) during the term of the loan.

     SEC. 1202. LOAN RATES FOR NONRECOURSE MARKETING ASSISTANCE 
                   LOANS.

       (a) 2008 Crop Year.--For purposes of the 2008 crop year, 
     the loan rate for a marketing assistance loan under section 
     1201 for a loan commodity shall be equal to the following:
       (1) In the case of wheat, $2.75 per bushel.
       (2) In the case of corn, $1.95 per bushel.
       (3) In the case of grain sorghum, $1.95 per bushel.
       (4) In the case of barley, $1.85 per bushel.
       (5) In the case of oats, $1.33 per bushel.
       (6) In the case of base quality of upland cotton, $0.52 per 
     pound.
       (7) In the case of extra long staple cotton, $0.7977 per 
     pound.
       (8) In the case of long grain rice, $6.50 per 
     hundredweight.
       (9) In the case of medium grain rice, $6.50 per 
     hundredweight.
       (10) In the case of soybeans, $5.00 per bushel.
       (11) In the case of other oilseeds, $9.30 per hundredweight 
     for each of the following kinds of oilseeds:
       (A) Sunflower seed.
       (B) Rapeseed.
       (C) Canola.
       (D) Safflower.
       (E) Flaxseed.
       (F) Mustard seed.
       (G) Crambe.
       (H) Sesame seed.
       (I) Other oilseeds designated by the Secretary.
       (12) In the case of dry peas, $6.22 per hundredweight.
       (13) In the case of lentils, $11.72 per hundredweight.
       (14) In the case of small chickpeas, $7.43 per 
     hundredweight.
       (15) In the case of graded wool, $1.00 per pound.
       (16) In the case of nongraded wool, $0.40 per pound.
       (17) In the case of mohair, $4.20 per pound.
       (18) In the case of honey, $0.60 per pound.
       (b) 2009 Crop Year.--Except as provided in section 1105, 
     for purposes of the 2009 crop year, the loan rate for a 
     marketing assistance loan under section 1201 for a loan 
     commodity shall be equal to the following:
       (1) In the case of wheat, $2.75 per bushel.
       (2) In the case of corn, $1.95 per bushel.
       (3) In the case of grain sorghum, $1.95 per bushel.
       (4) In the case of barley, $1.85 per bushel.
       (5) In the case of oats, $1.33 per bushel.
       (6) In the case of base quality of upland cotton, $0.52 per 
     pound.
       (7) In the case of extra long staple cotton, $0.7977 per 
     pound.
       (8) In the case of long grain rice, $6.50 per 
     hundredweight.
       (9) In the case of medium grain rice, $6.50 per 
     hundredweight.
       (10) In the case of soybeans, $5.00 per bushel.
       (11) In the case of other oilseeds, $9.30 per hundredweight 
     for each of the following kinds of oilseeds:
       (A) Sunflower seed.
       (B) Rapeseed.
       (C) Canola.
       (D) Safflower.
       (E) Flaxseed.
       (F) Mustard seed.
       (G) Crambe.
       (H) Sesame seed.
       (I) Other oilseeds designated by the Secretary.
       (12) In the case of dry peas, $5.40 per hundredweight.
       (13) In the case of lentils, $11.28 per hundredweight.
       (14) In the case of small chickpeas, $7.43 per 
     hundredweight.
       (15) In the case of large chickpeas, $11.28 per 
     hundredweight.
       (16) In the case of graded wool, $1.00 per pound.
       (17) In the case of nongraded wool, $0.40 per pound.
       (18) In the case of mohair, $4.20 per pound.
       (19) In the case of honey, $0.60 per pound.
       (c) 2010 Through 2012 Crop Years.--Except as provided in 
     section 1105, for purposes of each of the 2010 through 2012 
     crop years, the loan rate for a marketing assistance loan 
     under section 1201 for a loan commodity shall be equal to the 
     following:
       (1) In the case of wheat, $2.94 per bushel.
       (2) In the case of corn, $1.95 per bushel.
       (3) In the case of grain sorghum, $1.95 per bushel.
       (4) In the case of barley, $1.95 per bushel.
       (5) In the case of oats, $1.39 per bushel.
       (6) In the case of base quality of upland cotton, $0.52 per 
     pound.
       (7) In the case of extra long staple cotton, $0.7977 per 
     pound.
       (8) In the case of long grain rice, $6.50 per 
     hundredweight.
       (9) In the case of medium grain rice, $6.50 per 
     hundredweight.
       (10) In the case of soybeans, $5.00 per bushel.
       (11) In the case of other oilseeds, $10.09 per 
     hundredweight for each of the following kinds of oilseeds:
       (A) Sunflower seed.
       (B) Rapeseed.
       (C) Canola.
       (D) Safflower.
       (E) Flaxseed.
       (F) Mustard seed.
       (G) Crambe.
       (H) Sesame seed.
       (I) Other oilseeds designated by the Secretary.
       (12) In the case of dry peas, $5.40 per hundredweight.
       (13) In the case of lentils, $11.28 per hundredweight.
       (14) In the case of small chickpeas, $7.43 per 
     hundredweight.
       (15) In the case of large chickpeas, $11.28 per 
     hundredweight.
       (16) In the case of graded wool, $1.15 per pound.
       (17) In the case of nongraded wool, $0.40 per pound.
       (18) In the case of mohair, $4.20 per pound.
       (19) In the case of honey, $0.69 per pound.
       (d) Single County Loan Rate for Other Oilseeds.--The 
     Secretary shall establish a single loan rate in each county 
     for each kind of other oilseeds described in subsections 
     (a)(11), (b)(11), and (c)(11).

     SEC. 1203. TERM OF LOANS.

       (a) Term of Loan.--In the case of each loan commodity, a 
     marketing assistance loan under section 1201 shall have a 
     term of 9 months beginning on the first day of the first 
     month after the month in which the loan is made.
       (b) Extensions Prohibited.--The Secretary may not extend 
     the term of a marketing assistance loan for any loan 
     commodity.

     SEC. 1204. REPAYMENT OF LOANS.

       (a) General Rule.--The Secretary shall permit the producers 
     on a farm to repay a marketing assistance loan under section 
     1201 for a

[[Page H3420]]

     loan commodity (other than upland cotton, long grain rice, 
     medium grain rice, extra long staple cotton, and 
     confectionery and each other kind of sunflower seed (other 
     than oil sunflower seed)) at a rate that is the lesser of--
       (1) the loan rate established for the commodity under 
     section 1202, plus interest (determined in accordance with 
     section 163 of the Federal Agriculture Improvement and Reform 
     Act of 1996 (7 U.S.C. 7283));
       (2) a rate (as determined by the Secretary) that--
       (A) is calculated based on average market prices for the 
     loan commodity during the preceding 30-day period; and
       (B) will minimize discrepancies in marketing loan benefits 
     across State boundaries and across county boundaries; or
       (3) a rate that the Secretary may develop using alternative 
     methods for calculating a repayment rate for a loan commodity 
     that the Secretary determines will--
       (A) minimize potential loan forfeitures;
       (B) minimize the accumulation of stocks of the commodity by 
     the Federal Government;
       (C) minimize the cost incurred by the Federal Government in 
     storing the commodity;
       (D) allow the commodity produced in the United States to be 
     marketed freely and competitively, both domestically and 
     internationally; and
       (E) minimize discrepancies in marketing loan benefits 
     across State boundaries and across county boundaries.
       (b) Repayment Rates for Upland Cotton, Long Grain Rice, and 
     Medium Grain Rice.--The Secretary shall permit producers to 
     repay a marketing assistance loan under section 1201 for 
     upland cotton, long grain rice, and medium grain rice at a 
     rate that is the lesser of--
       (1) the loan rate established for the commodity under 
     section 1202, plus interest (determined in accordance with 
     section 163 of the Federal Agriculture Improvement and Reform 
     Act of 1996 (7 U.S.C. 7283)); or
       (2) the prevailing world market price for the commodity, as 
     determined and adjusted by the Secretary in accordance with 
     this section.
       (c) Repayment Rates for Extra Long Staple Cotton.--
     Repayment of a marketing assistance loan for extra long 
     staple cotton shall be at the loan rate established for the 
     commodity under section 1202, plus interest (determined in 
     accordance with section 163 of the Federal Agriculture 
     Improvement and Reform Act of 1996 (7 U.S.C. 7283)).
       (d) Prevailing World Market Price.--For purposes of this 
     section and section 1207, the Secretary shall prescribe by 
     regulation--
       (1) a formula to determine the prevailing world market 
     price for each of upland cotton, long grain rice, and medium 
     grain rice; and
       (2) a mechanism by which the Secretary shall announce 
     periodically those prevailing world market prices.
       (e) Adjustment of Prevailing World Market Price for Upland 
     Cotton, Long Grain Rice, and Medium Grain Rice.--
       (1) Rice.--The prevailing world market price for long grain 
     rice and medium grain rice determined under subsection (d) 
     shall be adjusted to United States quality and location.
       (2) Cotton.--The prevailing world market price for upland 
     cotton determined under subsection (d)--
       (A) shall be adjusted to United States quality and 
     location, with the adjustment to include--
       (i) a reduction equal to any United States Premium Factor 
     for upland cotton of a quality higher than Middling (M) 1\3/
     32\-inch; and
       (ii) the average costs to market the commodity, including 
     average transportation costs, as determined by the Secretary; 
     and
       (B) may be further adjusted, during the period beginning on 
     the date of enactment of this Act and ending on July 31, 
     2013, if the Secretary determines the adjustment is necessary 
     to--
       (i) minimize potential loan forfeitures;
       (ii) minimize the accumulation of stocks of upland cotton 
     by the Federal Government;
       (iii) ensure that upland cotton produced in the United 
     States can be marketed freely and competitively, both 
     domestically and internationally; and
       (iv) ensure an appropriate transition between current-crop 
     and forward-crop price quotations, except that the Secretary 
     may use forward-crop price quotations prior to July 31 of a 
     marketing year only if--

       (I) there are insufficient current-crop price quotations; 
     and
       (II) the forward-crop price quotation is the lowest such 
     quotation available.

       (3) Guidelines for additional adjustments.--In making 
     adjustments under this subsection, the Secretary shall 
     establish a mechanism for determining and announcing the 
     adjustments in order to avoid undue disruption in the United 
     States market.
       (f) Repayment Rates for Confectionery and Other Kinds of 
     Sunflower Seeds.--The Secretary shall permit the producers on 
     a farm to repay a marketing assistance loan under section 
     1201 for confectionery and each other kind of sunflower seed 
     (other than oil sunflower seed) at a rate that is the lesser 
     of--
       (1) the loan rate established for the commodity under 
     section 1202, plus interest (determined in accordance with 
     section 163 of the Federal Agriculture Improvement and Reform 
     Act of 1996 (7 U.S.C. 7283)); or
       (2) the repayment rate established for oil sunflower seed.
       (g) Payment of Cotton Storage Costs.--
       (1) 2008 through 2011 crop years.--Effective for each of 
     the 2008 through 2011 crop years, the Secretary shall provide 
     cotton storage payments in the same manner, and at the same 
     rates as the Secretary provided storage payments for the 2006 
     crop of cotton, except that the rates shall be reduced by 10 
     percent.
       (2) Subsequent crop years.--Beginning with the 2012 crop 
     year, the Secretary shall provide cotton storage payments in 
     the same manner, and at the same rates as the Secretary 
     provided storage payments for the 2006 crop of cotton, except 
     that the rates shall be reduced by 20 percent.
       (h) Authority to Temporarily Adjust Repayment Rates.--
       (1) Adjustment authority.--In the event of a severe 
     disruption to marketing, transportation, or related 
     infrastructure, the Secretary may modify the repayment rate 
     otherwise applicable under this section for marketing 
     assistance loans under section 1201 for a loan commodity.
       (2) Duration.--Any adjustment made under paragraph (1) in 
     the repayment rate for marketing assistance loans for a loan 
     commodity shall be in effect on a short-term and temporary 
     basis, as determined by the Secretary.

     SEC. 1205. LOAN DEFICIENCY PAYMENTS.

       (a) Availability of Loan Deficiency Payments.--
       (1) In general.--Except as provided in subsection (d), the 
     Secretary may make loan deficiency payments available to 
     producers on a farm that, although eligible to obtain a 
     marketing assistance loan under section 1201 with respect to 
     a loan commodity, agree to forgo obtaining the loan for the 
     commodity in return for loan deficiency payments under this 
     section.
       (2) Unshorn pelts, hay, and silage.--
       (A) Marketing assistance loans.--Subject to subparagraph 
     (B), nongraded wool in the form of unshorn pelts and hay and 
     silage derived from a loan commodity are not eligible for a 
     marketing assistance loan under section 1201.
       (B) Loan deficiency payment.--Effective for the 2008 
     through 2012 crop years, the Secretary may make loan 
     deficiency payments available under this section to producers 
     on a farm that produce unshorn pelts or hay and silage 
     derived from a loan commodity.
       (b) Computation.--A loan deficiency payment for a loan 
     commodity or commodity referred to in subsection (a)(2) shall 
     be computed by multiplying--
       (1) the payment rate determined under subsection (c) for 
     the commodity; by
       (2) the quantity of the commodity produced by the eligible 
     producers, excluding any quantity for which the producers 
     obtain a marketing assistance loan under section 1201.
       (c) Payment Rate.--
       (1) In general.--In the case of a loan commodity, the 
     payment rate shall be the amount by which--
       (A) the loan rate established under section 1202 for the 
     loan commodity; exceeds
       (B) the rate at which a marketing assistance loan for the 
     loan commodity may be repaid under section 1204.
       (2) Unshorn pelts.--In the case of unshorn pelts, the 
     payment rate shall be the amount by which--
       (A) the loan rate established under section 1202 for 
     ungraded wool; exceeds
       (B) the rate at which a marketing assistance loan for 
     ungraded wool may be repaid under section 1204.
       (3) Hay and silage.--In the case of hay or silage derived 
     from a loan commodity, the payment rate shall be the amount 
     by which--
       (A) the loan rate established under section 1202 for the 
     loan commodity from which the hay or silage is derived; 
     exceeds
       (B) the rate at which a marketing assistance loan for the 
     loan commodity may be repaid under section 1204.
       (d) Exception for Extra Long Staple Cotton.--This section 
     shall not apply with respect to extra long staple cotton.
       (e) Effective Date for Payment Rate Determination.--The 
     Secretary shall determine the amount of the loan deficiency 
     payment to be made under this section to the producers on a 
     farm with respect to a quantity of a loan commodity or 
     commodity referred to in subsection (a)(2) using the payment 
     rate in effect under subsection (c) as of the date the 
     producers request the payment.

     SEC. 1206. PAYMENTS IN LIEU OF LOAN DEFICIENCY PAYMENTS FOR 
                   GRAZED ACREAGE.

       (a) Eligible Producers.--
       (1) In general.--Effective for the 2008 through 2012 crop 
     years, in the case of a producer that would be eligible for a 
     loan deficiency payment under section 1205 for wheat, barley, 
     or oats, but that elects to use acreage planted to the wheat, 
     barley, or oats for the grazing of livestock, the Secretary 
     shall make a payment to the producer under this section if 
     the producer enters into an agreement with the Secretary to 
     forgo any other harvesting of the wheat, barley, or oats on 
     that acreage.
       (2) Grazing of triticale acreage.--Effective for the 2008 
     through 2012 crop years, with respect to a producer on a farm 
     that uses acreage planted to triticale for the grazing of 
     livestock, the Secretary shall make a payment to the producer 
     under this section if the producer enters into an agreement 
     with the Secretary to forgo any other harvesting of triticale 
     on that acreage.
       (b) Payment Amount.--
       (1) In general.--The amount of a payment made under this 
     section to a producer on a farm described in subsection 
     (a)(1) shall be equal to the amount determined by 
     multiplying--
       (A) the loan deficiency payment rate determined under 
     section 1205(c) in effect, as of the date of the agreement, 
     for the county in which the farm is located; by
       (B) the payment quantity determined by multiplying--
       (i) the quantity of the grazed acreage on the farm with 
     respect to which the producer elects to forgo harvesting of 
     wheat, barley, or oats; and
       (ii) the payment yield in effect for the calculation of 
     direct payments under subtitle A with respect to that loan 
     commodity on the farm or, in

[[Page H3421]]

     the case of a farm without a payment yield for that loan 
     commodity, an appropriate yield established by the Secretary 
     in a manner consistent with section 1102 of the Farm Security 
     and Rural Investment Act of 2002 (7 U.S.C. 7912).
       (2) Grazing of triticale acreage.--The amount of a payment 
     made under this section to a producer on a farm described in 
     subsection (a)(2) shall be equal to the amount determined by 
     multiplying--
       (A) the loan deficiency payment rate determined under 
     section 1205(c) in effect for wheat, as of the date of the 
     agreement, for the county in which the farm is located; by
       (B) the payment quantity determined by multiplying--
       (i) the quantity of the grazed acreage on the farm with 
     respect to which the producer elects to forgo harvesting of 
     triticale; and
       (ii) the payment yield in effect for the calculation of 
     direct payments under subtitle A with respect to wheat on the 
     farm or, in the case of a farm without a payment yield for 
     wheat, an appropriate yield established by the Secretary in a 
     manner consistent with section 1102 of the Farm Security and 
     Rural Investment Act of 2002 (7 U.S.C. 7912).
       (c) Time, Manner, and Availability of Payment.--
       (1) Time and manner.--A payment under this section shall be 
     made at the same time and in the same manner as loan 
     deficiency payments are made under section 1205.
       (2) Availability.--
       (A) In general.--The Secretary shall establish an 
     availability period for the payments authorized by this 
     section.
       (B) Certain commodities.--In the case of wheat, barley, and 
     oats, the availability period shall be consistent with the 
     availability period for the commodity established by the 
     Secretary for marketing assistance loans authorized by this 
     subtitle.
       (d) Prohibition on Crop Insurance Indemnity or Noninsured 
     Crop Assistance.--A 2008 through 2012 crop of wheat, barley, 
     oats, or triticale planted on acreage that a producer elects, 
     in the agreement required by subsection (a), to use for the 
     grazing of livestock in lieu of any other harvesting of the 
     crop shall not be eligible for an indemnity under a policy or 
     plan of insurance authorized under the Federal Crop Insurance 
     Act (7 U.S.C. 1501 et seq.) or noninsured crop assistance 
     under section 196 of the Federal Agriculture Improvement and 
     Reform Act of 1996 (7 U.S.C. 7333).

     SEC. 1207. SPECIAL MARKETING LOAN PROVISIONS FOR UPLAND 
                   COTTON.

       (a) Special Import Quota.--
       (1) Definition of special import quota.--In this 
     subsection, the term ``special import quota'' means a 
     quantity of imports that is not subject to the over-quota 
     tariff rate of a tariff-rate quota.
       (2) Establishment.--
       (A) In general.--The President shall carry out an import 
     quota program during the period beginning on the date of 
     enactment of this Act through July 31, 2013, as provided in 
     this subsection.
       (B) Program requirements.--Whenever the Secretary 
     determines and announces that for any consecutive 4-week 
     period, the Friday through Thursday average price quotation 
     for the lowest-priced United States growth, as quoted for 
     Middling (M) 1\3/32\-inch cotton, delivered to a definable 
     and significant international market, as determined by the 
     Secretary, exceeds the prevailing world market price, there 
     shall immediately be in effect a special import quota.
       (3) Quantity.--The quota shall be equal to 1 week's 
     consumption of cotton by domestic mills at the seasonally 
     adjusted average rate of the most recent 3 months for which 
     data are available.
       (4) Application.--The quota shall apply to upland cotton 
     purchased not later than 90 days after the date of the 
     Secretary's announcement under paragraph (2) and entered into 
     the United States not later than 180 days after that date.
       (5) Overlap.--A special quota period may be established 
     that overlaps any existing quota period if required by 
     paragraph (2), except that a special quota period may not be 
     established under this subsection if a quota period has been 
     established under subsection (b).
       (6) Preferential tariff treatment.--The quantity under a 
     special import quota shall be considered to be an in-quota 
     quantity for purposes of--
       (A) section 213(d) of the Caribbean Basin Economic Recovery 
     Act (19 U.S.C. 2703(d));
       (B) section 204 of the Andean Trade Preference Act (19 
     U.S.C. 3203);
       (C) section 503(d) of the Trade Act of 1974 (19 U.S.C. 
     2463(d)); and
       (D) General Note 3(a)(iv) to the Harmonized Tariff 
     Schedule.
       (7) Limitation.--The quantity of cotton entered into the 
     United States during any marketing year under the special 
     import quota established under this subsection may not exceed 
     the equivalent of 10 week's consumption of upland cotton by 
     domestic mills at the seasonally adjusted average rate of the 
     3 months immediately preceding the first special import quota 
     established in any marketing year.
       (b) Limited Global Import Quota for Upland Cotton.--
       (1) Definitions.--In this subsection:
       (A) Supply.--The term ``supply'' means, using the latest 
     official data of the Bureau of the Census, the Department of 
     Agriculture, and the Department of the Treasury--
       (i) the carry-over of upland cotton at the beginning of the 
     marketing year (adjusted to 480-pound bales) in which the 
     quota is established;
       (ii) production of the current crop; and
       (iii) imports to the latest date available during the 
     marketing year.
       (B) Demand.--The term ``demand'' means--
       (i) the average seasonally adjusted annual rate of domestic 
     mill consumption of cotton during the most recent 3 months 
     for which data are available; and
       (ii) the larger of--

       (I) average exports of upland cotton during the preceding 6 
     marketing years; or
       (II) cumulative exports of upland cotton plus outstanding 
     export sales for the marketing year in which the quota is 
     established.

       (C) Limited global import quota.--The term ``limited global 
     import quota'' means a quantity of imports that is not 
     subject to the over-quota tariff rate of a tariff-rate quota.
       (2) Program.--The President shall carry out an import quota 
     program that provides that whenever the Secretary determines 
     and announces that the average price of the base quality of 
     upland cotton, as determined by the Secretary, in the 
     designated spot markets for a month exceeded 130 percent of 
     the average price of the quality of cotton in the markets for 
     the preceding 36 months, notwithstanding any other provision 
     of law, there shall immediately be in effect a limited global 
     import quota subject to the following conditions:
       (A) Quantity.--The quantity of the quota shall be equal to 
     21 days of domestic mill consumption of upland cotton at the 
     seasonally adjusted average rate of the most recent 3 months 
     for which data are available or as estimated by the 
     Secretary.
       (B) Quantity if prior quota.--If a quota has been 
     established under this subsection during the preceding 12 
     months, the quantity of the quota next established under this 
     subsection shall be the smaller of 21 days of domestic mill 
     consumption calculated under subparagraph (A) or the quantity 
     required to increase the supply to 130 percent of the demand.
       (C) Preferential tariff treatment.--The quantity under a 
     limited global import quota shall be considered to be an in-
     quota quantity for purposes of--
       (i) section 213(d) of the Caribbean Basin Economic Recovery 
     Act (19 U.S.C. 2703(d));
       (ii) section 204 of the Andean Trade Preference Act (19 
     U.S.C. 3203);
       (iii) section 503(d) of the Trade Act of 1974 (19 U.S.C. 
     2463(d)); and
       (iv) General Note 3(a)(iv) to the Harmonized Tariff 
     Schedule.
       (D) Quota entry period.--When a quota is established under 
     this subsection, cotton may be entered under the quota during 
     the 90-day period beginning on the date the quota is 
     established by the Secretary.
       (3) No overlap.--Notwithstanding paragraph (2), a quota 
     period may not be established that overlaps an existing quota 
     period or a special quota period established under subsection 
     (a).
       (c) Economic Adjustment Assistance to Users of Upland 
     Cotton.--
       (1) In general.--Subject to paragraph (2), the Secretary 
     shall, on a monthly basis, provide economic adjustment 
     assistance to domestic users of upland cotton in the form of 
     payments for all documented use of that upland cotton during 
     the previous monthly period regardless of the origin of the 
     upland cotton.
       (2) Value of assistance.--
       (A) Beginning period.--During the period beginning on 
     August 1, 2008, and ending on July 31, 2012, the value of the 
     assistance provided under paragraph (1) shall be 4 cents per 
     pound.
       (B) Subsequent period.--Effective beginning on August 1, 
     2012, the value of the assistance provided under paragraph 
     (1) shall be 3 cents per pound.
       (3) Allowable purposes.--Economic adjustment assistance 
     under this subsection shall be made available only to 
     domestic users of upland cotton that certify that the 
     assistance shall be used only to acquire, construct, install, 
     modernize, develop, convert, or expand land, plant, 
     buildings, equipment, facilities, or machinery.
       (4) Review or audit.--The Secretary may conduct such review 
     or audit of the records of a domestic user under this 
     subsection as the Secretary determines necessary to carry out 
     this subsection.
       (5) Improper use of assistance.--If the Secretary 
     determines, after a review or audit of the records of the 
     domestic user, that economic adjustment assistance under this 
     subsection was not used for the purposes specified in 
     paragraph (3), the domestic user shall be--
       (A) liable to repay the assistance to the Secretary, plus 
     interest, as determined by the Secretary; and
       (B) ineligible to receive assistance under this subsection 
     for a period of 1 year following the determination of the 
     Secretary.

     SEC. 1208. SPECIAL COMPETITIVE PROVISIONS FOR EXTRA LONG 
                   STAPLE COTTON.

       (a) Competitiveness Program.--Notwithstanding any other 
     provision of law, during the period beginning on the date of 
     enactment of this Act through July 31, 2013, the Secretary 
     shall carry out a program--
       (1) to maintain and expand the domestic use of extra long 
     staple cotton produced in the United States;
       (2) to increase exports of extra long staple cotton 
     produced in the United States; and
       (3) to ensure that extra long staple cotton produced in the 
     United States remains competitive in world markets.
       (b) Payments Under Program; Trigger.--Under the program, 
     the Secretary shall make payments available under this 
     section whenever--
       (1) for a consecutive 4-week period, the world market price 
     for the lowest priced competing growth of extra long staple 
     cotton (adjusted to United States quality and location and 
     for other factors affecting the competitiveness of such 
     cotton), as determined by the Secretary, is below the 
     prevailing United States price for a competing growth of 
     extra long staple cotton; and
       (2) the lowest priced competing growth of extra long staple 
     cotton (adjusted to United

[[Page H3422]]

     States quality and location and for other factors affecting 
     the competitiveness of such cotton), as determined by the 
     Secretary, is less than 134 percent of the loan rate for 
     extra long staple cotton.
       (c) Eligible Recipients.--The Secretary shall make payments 
     available under this section to domestic users of extra long 
     staple cotton produced in the United States and exporters of 
     extra long staple cotton produced in the United States that 
     enter into an agreement with the Commodity Credit Corporation 
     to participate in the program under this section.
       (d) Payment Amount.--Payments under this section shall be 
     based on the amount of the difference in the prices referred 
     to in subsection (b)(1) during the fourth week of the 
     consecutive 4-week period multiplied by the amount of 
     documented purchases by domestic users and sales for export 
     by exporters made in the week following such a consecutive 4-
     week period.

     SEC. 1209. AVAILABILITY OF RECOURSE LOANS FOR HIGH MOISTURE 
                   FEED GRAINS AND SEED COTTON.

       (a) High Moisture Feed Grains.--
       (1) Definition of high moisture state.--In this subsection, 
     the term ``high moisture state'' means corn or grain sorghum 
     having a moisture content in excess of Commodity Credit 
     Corporation standards for marketing assistance loans made by 
     the Secretary under section 1201.
       (2) Recourse loans available.--For each of the 2008 through 
     2012 crops of corn and grain sorghum, the Secretary shall 
     make available recourse loans, as determined by the 
     Secretary, to producers on a farm that--
       (A) normally harvest all or a portion of their crop of corn 
     or grain sorghum in a high moisture state;
       (B) present--
       (i) certified scale tickets from an inspected, certified 
     commercial scale, including a licensed warehouse, feedlot, 
     feed mill, distillery, or other similar entity approved by 
     the Secretary, pursuant to regulations issued by the 
     Secretary; or
       (ii) field or other physical measurements of the standing 
     or stored crop in regions of the United States, as determined 
     by the Secretary, that do not have certified commercial 
     scales from which certified scale tickets may be obtained 
     within reasonable proximity of harvest operation;
       (C) certify that they were the owners of the feed grain at 
     the time of delivery to, and that the quantity to be placed 
     under loan under this subsection was in fact harvested on the 
     farm and delivered to, a feedlot, feed mill, or commercial or 
     on-farm high-moisture storage facility, or to a facility 
     maintained by the users of corn and grain sorghum in a high 
     moisture state; and
       (D) comply with deadlines established by the Secretary for 
     harvesting the corn or grain sorghum and submit applications 
     for loans under this subsection within deadlines established 
     by the Secretary.
       (3) Eligibility of acquired feed grains.--A loan under this 
     subsection shall be made on a quantity of corn or grain 
     sorghum of the same crop acquired by the producer equivalent 
     to a quantity determined by multiplying--
       (A) the acreage of the corn or grain sorghum in a high 
     moisture state harvested on the producer's farm; by
       (B) the lower of the farm program payment yield used to 
     make counter-cyclical payments under subtitle A or the actual 
     yield on a field, as determined by the Secretary, that is 
     similar to the field from which the corn or grain sorghum was 
     obtained.
       (b) Recourse Loans Available for Seed Cotton.--For each of 
     the 2008 through 2012 crops of upland cotton and extra long 
     staple cotton, the Secretary shall make available recourse 
     seed cotton loans, as determined by the Secretary, on any 
     production.
       (c) Repayment Rates.--Repayment of a recourse loan made 
     under this section shall be at the loan rate established for 
     the commodity by the Secretary, plus interest (determined in 
     accordance with section 163 of the Federal Agriculture 
     Improvement and Reform Act of 1996 (7 U.S.C. 7283)).

     SEC. 1210. ADJUSTMENTS OF LOANS.

       (a) Adjustment Authority.--Subject to subsection (e), the 
     Secretary may make appropriate adjustments in the loan rates 
     for any loan commodity (other than cotton) for differences in 
     grade, type, quality, location, and other factors.
       (b) Manner of Adjustment.--The adjustments under subsection 
     (a) shall, to the maximum extent practicable, be made in such 
     a manner that the average loan level for the commodity will, 
     on the basis of the anticipated incidence of the factors, be 
     equal to the level of support determined in accordance with 
     this subtitle and subtitles B through E.
       (c) Adjustment on County Basis.--
       (1) In general.--The Secretary may establish loan rates for 
     a crop for producers in individual counties in a manner that 
     results in the lowest loan rate being 95 percent of the 
     national average loan rate, if those loan rates do not result 
     in an increase in outlays.
       (2) Prohibition.--Adjustments under this subsection shall 
     not result in an increase in the national average loan rate 
     for any year.
       (d) Adjustment in Loan Rate for Cotton.--
       (1) In general.--The Secretary may make appropriate 
     adjustments in the loan rate for cotton for differences in 
     quality factors.
       (2) Revisions to quality adjustments for upland cotton.--
       (A) In general.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary shall implement 
     revisions in the administration of the marketing assistance 
     loan program for upland cotton to more accurately and 
     efficiently reflect market values for upland cotton.
       (B) Mandatory revisions.--Revisions under subparagraph (A) 
     shall include--
       (i) the elimination of warehouse location differentials;
       (ii) the establishment of differentials for the various 
     quality factors and staple lengths of cotton based on a 3-
     year, weighted moving average of the weighted designated spot 
     market regions, as determined by regional production;
       (iii) the elimination of any artificial split in the 
     premium or discount between upland cotton with a 32 or 33 
     staple length due to micronaire; and
       (iv) a mechanism to ensure that no premium or discount is 
     established that exceeds the premium or discount associated 
     with a leaf grade that is 1 better than the applicable color 
     grade.
       (C) Discretionary revisions.--Revisions under subparagraph 
     (A) may include--
       (i) the use of non-spot market price data, in addition to 
     spot market price data, that would enhance the accuracy of 
     the price information used in determining quality adjustments 
     under this subsection;
       (ii) adjustments in the premiums or discounts associated 
     with upland cotton with a staple length of 33 or above due to 
     micronaire with the goal of eliminating any unnecessary 
     artificial splits in the calculations of the premiums or 
     discounts; and
       (iii) such other adjustments as the Secretary determines 
     appropriate, after consultations conducted in accordance with 
     paragraph (3).
       (3) Consultation with private sector.--
       (A) Prior to revision.--In making adjustments to the loan 
     rate for cotton (including any review of the adjustments) as 
     provided in this subsection, the Secretary shall consult with 
     representatives of the United States cotton industry.
       (B) Inapplicability of federal advisory committee act.--The 
     Federal Advisory Committee Act (5 U.S.C. App.) shall not 
     apply to consultations under this subsection.
       (4) Review of adjustments.--The Secretary may review the 
     operation of the upland cotton quality adjustments 
     implemented pursuant to this subsection and may make further 
     revisions to the administration of the loan program for 
     upland cotton, by--
       (A) revoking or revising any actions taken under paragraph 
     (2)(B); or
       (B) revoking or revising any actions taken or authorized to 
     be taken under paragraph (2)(C).
       (e) Rice.--The Secretary shall not make adjustments in the 
     loan rates for long grain rice and medium grain rice, except 
     for differences in grade and quality (including milling 
     yields).

                          Subtitle C--Peanuts

     SEC. 1301. DEFINITIONS.

       In this subtitle:
       (1) Base acres for peanuts.--
       (A) In general.--The term ``base acres for peanuts'' means 
     the number of acres assigned to a farm pursuant to section 
     1302 of the Farm Security and Rural Investment Act of 2002 (7 
     U.S.C. 7952), as in effect on September 30, 2007, subject to 
     any adjustment under section 1302 of this Act.
       (B) Covered commodities.--The term ``base acres'', with 
     respect to a covered commodity, has the meaning given the 
     term in section 1101.
       (2) Counter-cyclical payment.--The term ``counter-cyclical 
     payment'' means a payment made to producers on a farm under 
     section 1304.
       (3) Direct payment.--The term ``direct payment'' means a 
     direct payment made to producers on a farm under section 
     1303.
       (4) Effective price.--The term ``effective price'' means 
     the price calculated by the Secretary under section 1304 for 
     peanuts to determine whether counter-cyclical payments are 
     required to be made under that section for a crop year.
       (5) Payment acres.--The term ``payment acres'' means, in 
     the case of direct payments and counter-cyclical payments--
       (A) except as provided in subparagraph (B), 85 percent of 
     the base acres of peanuts on a farm on which direct payments 
     or counter-cyclical payments are made; and
       (B) in the case of direct payments for each of the 2009 
     through 2011 crop years, 83.3 percent of the base acres for 
     peanuts on a farm on which direct payments are made.
       (6) Payment yield.--The term ``payment yield'' means the 
     yield established for direct payments and the yield 
     established for counter-cyclical payments under section 1302 
     of the Farm Security and Rural Investment Act of 2002 (7 
     U.S.C. 7952), as in effect on September 30, 2007, for a farm 
     for peanuts.
       (7) Producer.--
       (A) In general.--The term ``producer'' means an owner, 
     operator, landlord, tenant, or sharecropper that shares in 
     the risk of producing a crop on a farm and is entitled to 
     share in the crop available for marketing from the farm, or 
     would have shared had the crop been produced.
       (B) Hybrid seed.--In determining whether a grower of hybrid 
     seed is a producer, the Secretary shall--
       (i) not take into consideration the existence of a hybrid 
     seed contract; and
       (ii) ensure that program requirements do not adversely 
     affect the ability of the grower to receive a payment under 
     this subtitle.
       (8) State.--The term ``State'' means--
       (A) a State;
       (B) the District of Columbia;
       (C) the Commonwealth of Puerto Rico; and
       (D) any other territory or possession of the United States.
       (9) Target price.--The term ``target price'' means the 
     price per ton of peanuts used to determine the payment rate 
     for counter-cyclical payments.
       (10) United states.--The term ``United States'', when used 
     in a geographical sense, means all of the States.

     SEC. 1302. BASE ACRES FOR PEANUTS FOR A FARM.

       (a) Adjustment of Base Acreage for Peanuts.--

[[Page H3423]]

       (1) In general.--The Secretary shall provide for an 
     adjustment, as appropriate, in the base acres for peanuts for 
     a farm whenever any of the following circumstances occur:
       (A) A conservation reserve contract entered into under 
     section 1231 of the Food Security Act of 1985 (16 U.S.C. 
     3831) with respect to the farm expires or is voluntarily 
     terminated, or was terminated or expired during the period 
     beginning on October 1, 2007, and ending on the date of 
     enactment of this Act.
       (B) Cropland is released from coverage under a conservation 
     reserve contract by the Secretary, or was released during the 
     period beginning on October 1, 2007, and ending on the date 
     of enactment of this Act.
       (C) The producer has eligible pulse crop acreage, which 
     shall be determined in the same manner as eligible oilseed 
     acreage under section 1101(a)(2) of the Farm Security and 
     Rural Investment Act of 2002 (7 U.S.C. 7911(a)(2)).
       (D) The producer has eligible oilseed acreage as the result 
     of the Secretary designating additional oilseeds, which shall 
     be determined in the same manner as eligible oilseed acreage 
     under section 1101(a)(2) of the Farm Security and Rural 
     Investment Act of 2002 (7 U.S.C. 7911(a)(2)).
       (2) Special conservation reserve acreage payment rules.--
     For the crop year in which a base acres for peanuts 
     adjustment under subparagraph (A) or (B) of paragraph (1) is 
     first made, the owner of the farm shall elect to receive 
     either direct payments and counter-cyclical payments with 
     respect to the acreage added to the farm under this 
     subsection or a prorated payment under the conservation 
     reserve contract, but not both.
       (b) Prevention of Excess Base Acres for Peanuts.--
       (1) Required reduction.--If the sum of the base acres for 
     peanuts for a farm, together with the acreage described in 
     paragraph (2), exceeds the actual cropland acreage of the 
     farm, the Secretary shall reduce the base acres for peanuts 
     for the farm or the base acres for 1 or more covered 
     commodities for the farm so that the sum of the base acres 
     for peanuts and acreage described in paragraph (2) does not 
     exceed the actual cropland acreage of the farm.
       (2) Other acreage.--For purposes of paragraph (1), the 
     Secretary shall include the following:
       (A) Any base acres for the farm for a covered commodity.
       (B) Any acreage on the farm enrolled in the conservation 
     reserve program or wetlands reserve program under chapter 1 
     of subtitle D of title XII of the Food Security Act of 1985 
     (16 U.S.C. 3830 et seq.).
       (C) Any other acreage on the farm enrolled in a Federal 
     conservation program for which payments are made in exchange 
     for not producing an agricultural commodity on the acreage.
       (D) Any eligible pulse crop acreage, which shall be 
     determined in the same manner as eligible oilseed acreage 
     under section 1101(a)(2) of the Farm Security and Rural 
     Investment Act of 2002 (7 U.S.C. 7911(a)(2)).
       (E) If the Secretary designates additional oilseeds, any 
     eligible oilseed acreage, which shall be determined in the 
     same manner as eligible oilseed acreage under section 
     1101(a)(2) of the Farm Security and Rural Investment Act of 
     2002 (7 U.S.C. 7911(a)(2)).
       (3) Selection of acres.--The Secretary shall give the owner 
     of the farm the opportunity to select the base acres for 
     peanuts or the base acres for covered commodities against 
     which the reduction required by paragraph (1) will be made.
       (4) Exception for double-cropped acreage.--In applying 
     paragraph (1), the Secretary shall make an exception in the 
     case of double cropping, as determined by the Secretary.
       (5) Coordinated application of requirements.--The Secretary 
     shall take into account section 1101(b) when applying the 
     requirements of this subsection.
       (c) Reduction in Base Acres.--
       (1) Reduction at option of owner.--
       (A) In general.--The owner of a farm may reduce, at any 
     time, the base acres for peanuts for the farm.
       (B) Effect of reduction.--A reduction under subparagraph 
     (A) shall be permanent and made in a manner prescribed by the 
     Secretary.
       (2) Required action by secretary.--
       (A) In general.--The Secretary shall proportionately reduce 
     base acres on a farm for peanuts for land that has been 
     subdivided and developed for multiple residential units or 
     other nonfarming uses if the size of the tracts and the 
     density of the subdivision is such that the land is unlikely 
     to return to the previous agricultural use, unless the 
     producers on the farm demonstrate that the land--
       (i) remains devoted to commercial agricultural production; 
     or
       (ii) is likely to be returned to the previous agricultural 
     use.
       (B) Requirement.--The Secretary shall establish procedures 
     to identify land described in subparagraph (A).
       (3) Review and report.--Each year, to ensure, to the 
     maximum extent practicable, that payments are received only 
     by producers, the Secretary shall submit to Congress a report 
     that describes the results of the actions taken under 
     paragraph (2).
       (d) Treatment of Farms With Limited Base Acres.--
       (1) Prohibition on payments.--Except as provided in 
     paragraph (2) and notwithstanding any other provision of this 
     title, a producer on a farm may not receive direct payments, 
     counter-cyclical payments, or average crop revenue election 
     payments if the sum of the base acres of the farm is 10 acres 
     or less, as determined by the Secretary.
       (2) Exceptions.--Paragraph (1) shall not apply to a farm 
     owned by--
       (A) a socially disadvantaged farmer or rancher (as defined 
     in section 355(e) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 2003(e)); or
       (B) a limited resource farmer or rancher, as defined by the 
     Secretary.
       (3) Data collection and publication.--The Secretary shall--
       (A) collect and publish segregated data and survey 
     information about the farm profiles, utilization of land, and 
     crop production; and
       (B) perform an evaluation on the supply and price of fruits 
     and vegetables based on the effects of suspension of base 
     acres under this section.

     SEC. 1303. AVAILABILITY OF DIRECT PAYMENTS FOR PEANUTS.

       (a) Payment Required.--For each of the 2008 through 2012 
     crop years for peanuts, the Secretary shall make direct 
     payments to the producers on a farm for which a payment yield 
     and base acres for peanuts are established.
       (b) Payment Rate.--Except as provided in section 1105, the 
     payment rate used to make direct payments with respect to 
     peanuts for a crop year shall be equal to $36 per ton.
       (c) Payment Amount.--The amount of the direct payment to be 
     paid to the producers on a farm for peanuts for a crop year 
     shall be equal to the product of the following:
       (1) The payment rate specified in subsection (b).
       (2) The payment acres on the farm.
       (3) The payment yield for the farm.
       (d) Time for Payment.--
       (1) In general.--Except as provided in paragraph (2), in 
     the case of each of the 2008 through 2012 crop years, the 
     Secretary may not make direct payments under this section 
     before October 1 of the calendar year in which the crop is 
     harvested.
       (2) Advance payments.--
       (A) Option.--
       (i) In general.--At the option of the producers on a farm, 
     the Secretary shall pay in advance up to 22 percent of the 
     direct payment for peanuts for any of the 2008 through 2011 
     crop years to the producers on a farm.
       (ii) 2008 crop year.--If the producers on a farm elect to 
     receive advance direct payments under clause (i) for peanuts 
     for the 2008 crop year, as soon as practicable after the 
     election, the Secretary shall make the advance direct payment 
     to the producers on the farm.
       (B) Month.--
       (i) Selection.--Subject to clauses (ii) and (iii), the 
     producers on a farm shall select the month during which the 
     advance payment for a crop year will be made.
       (ii) Options.--The month selected may be any month during 
     the period--

       (I) beginning on December 1 of the calendar year before the 
     calendar year in which the crop of peanuts is harvested; and
       (II) ending during the month within which the direct 
     payment would otherwise be made.

       (iii) Change.--The producers on a farm may change the 
     selected month for a subsequent advance payment by providing 
     advance notice to the Secretary.
       (3) Repayment of advance payments.--If a producer on a farm 
     that receives an advance direct payment for a crop year 
     ceases to be a producer on that farm, or the extent to which 
     the producer shares in the risk of producing a crop changes, 
     before the date the remainder of the direct payment is made, 
     the producer shall be responsible for repaying the Secretary 
     the applicable amount of the advance payment, as determined 
     by the Secretary.

     SEC. 1304. AVAILABILITY OF COUNTER-CYCLICAL PAYMENTS FOR 
                   PEANUTS.

       (a) Payment Required.--Except as provided in section 1105, 
     for each of the 2008 through 2012 crop years for peanuts, the 
     Secretary shall make counter-cyclical payments to producers 
     on farms for which payment yields and base acres for peanuts 
     are established if the Secretary determines that the 
     effective price for peanuts is less than the target price for 
     peanuts.
       (b) Effective Price.--For purposes of subsection (a), the 
     effective price for peanuts is equal to the sum of the 
     following:
       (1) The higher of the following:
       (A) The national average market price for peanuts received 
     by producers during the 12-month marketing year for peanuts, 
     as determined by the Secretary.
       (B) The national average loan rate for a marketing 
     assistance loan for peanuts in effect for the applicable 
     period under this subtitle.
       (2) The payment rate in effect for peanuts under section 
     1303 for the purpose of making direct payments.
       (c) Target Price.--For purposes of subsection (a), the 
     target price for peanuts shall be equal to $495 per ton.
       (d) Payment Rate.--The payment rate used to make counter-
     cyclical payments for a crop year shall be equal to the 
     difference between--
       (1) the target price for peanuts; and
       (2) the effective price determined under subsection (b) for 
     peanuts.
       (e) Payment Amount.--If counter-cyclical payments are 
     required to be paid for any of the 2008 through 2012 crops of 
     peanuts, the amount of the counter-cyclical payment to be 
     paid to the producers on a farm for that crop year shall be 
     equal to the product of the following:
       (1) The payment rate specified in subsection (d).
       (2) The payment acres on the farm.
       (3) The payment yield for the farm.
       (f) Time for Payments.--
       (1) General rule.--Except as provided in paragraph (2), if 
     the Secretary determines under subsection (a) that counter-
     cyclical payments are required to be made under this section 
     for a crop of peanuts, beginning October 1, or as soon as 
     practicable after the end of the marketing year, the 
     Secretary shall make the counter-cyclical payments for the 
     crop.
       (2) Availability of partial payments.--

[[Page H3424]]

       (A) In general.--If, before the end of the 12-month 
     marketing year, the Secretary estimates that counter-cyclical 
     payments will be required under this section for a crop year, 
     the Secretary shall give producers on a farm the option to 
     receive partial payments of the counter-cyclical payment 
     projected to be made for the crop.
       (B) Election.--
       (i) In general.--The Secretary shall allow producers on a 
     farm to make an election to receive partial payments under 
     subparagraph (A) at any time but not later than 60 days prior 
     to the end of the marketing year for the crop.
       (ii) Date of issuance.--The Secretary shall issue the 
     partial payment after the date of an announcement by the 
     Secretary but not later than 30 days prior to the end of the 
     marketing year.
       (3) Time for partial payments.--When the Secretary makes 
     partial payments for any of the 2008 through 2010 crop 
     years--
       (A) the first partial payment shall be made after 
     completion of the first 180 days of the marketing year for 
     that crop; and
       (B) the final partial payment shall be made beginning 
     October 1, or as soon as practicable thereafter, after the 
     end of the applicable marketing year for that crop.
       (4) Amount of partial payments.--
       (A) First partial payment.--For each of the 2008 through 
     2010 crop years, the first partial payment under paragraph 
     (3) to the producers on a farm may not exceed 40 percent of 
     the projected counter-cyclical payment for the crop year, as 
     determined by the Secretary.
       (B) Final payment.--The final payment for a crop year shall 
     be equal to the difference between--
       (i) the actual counter-cyclical payment to be made to the 
     producers for that crop year; and
       (ii) the amount of the partial payment made to the 
     producers under subparagraph (A).
       (5) Repayment.--The producers on a farm that receive a 
     partial payment under this subsection for a crop year shall 
     repay to the Secretary the amount, if any, by which the total 
     of the partial payments exceed the actual counter-cyclical 
     payment to be made for that crop year.

     SEC. 1305. PRODUCER AGREEMENT REQUIRED AS CONDITION ON 
                   PROVISION OF PAYMENTS.

       (a) Compliance With Certain Requirements.--
       (1) Requirements.--Before the producers on a farm may 
     receive direct payments or counter-cyclical payments under 
     this subtitle, or average crop revenue election payments 
     under section 1105, with respect to the farm, the producers 
     shall agree, during the crop year for which the payments are 
     made and in exchange for the payments--
       (A) to comply with applicable conservation requirements 
     under subtitle B of title XII of the Food Security Act of 
     1985 (16 U.S.C. 3811 et seq.);
       (B) to comply with applicable wetland protection 
     requirements under subtitle C of title XII of that Act (16 
     U.S.C. 3821 et seq.);
       (C) to comply with the planting flexibility requirements of 
     section 1306;
       (D) to use the land on the farm, in a quantity equal to the 
     attributable base acres for peanuts and any base acres for 
     the farm under subtitle A, for an agricultural or conserving 
     use, and not for a nonagricultural commercial, industrial, or 
     residential use, as determined by the Secretary; and
       (E) to effectively control noxious weeds and otherwise 
     maintain the land in accordance with sound agricultural 
     practices, as determined by the Secretary, if the 
     agricultural or conserving use involves the noncultivation of 
     any portion of the land referred to in subparagraph (D).
       (2) Compliance.--The Secretary may issue such rules as the 
     Secretary considers necessary to ensure producer compliance 
     with the requirements of paragraph (1).
       (3) Modification.--At the request of the transferee or 
     owner, the Secretary may modify the requirements of this 
     subsection if the modifications are consistent with the 
     objectives of this subsection, as determined by the 
     Secretary.
       (b) Transfer or Change of Interest in Farm.--
       (1) Termination.--
       (A) In general.--Except as provided in paragraph (2), a 
     transfer of (or change in) the interest of the producers on a 
     farm in the base acres for peanuts for which direct payments 
     or counter-cyclical payments are made, or on which average 
     crop revenue election payments are based, shall result in the 
     termination of the direct payments, counter-cyclical 
     payments, or average crop revenue election payments to the 
     extent the payments are made or based on the base acres, 
     unless the transferee or owner of the acreage agrees to 
     assume all obligations under subsection (a).
       (B) Effective date.--The termination shall take effect on 
     the date determined by the Secretary.
       (2) Exception.--If a producer entitled to a direct payment, 
     counter-cyclical payment, or average crop revenue election 
     payment dies, becomes incompetent, or is otherwise unable to 
     receive the payment, the Secretary shall make the payment, in 
     accordance with rules issued by the Secretary.
       (c) Acreage Reports.--
       (1) In general.--As a condition on the receipt of any 
     benefits under this subtitle, the Secretary shall require 
     producers on a farm to submit to the Secretary annual acreage 
     reports with respect to all cropland on the farm.
       (2) Penalties.--No penalty with respect to benefits under 
     this subtitle shall be assessed against the producers on a 
     farm for an inaccurate acreage report unless the producers on 
     the farm knowingly and willfully falsified the acreage 
     report.
       (d) Tenants and Sharecroppers.--In carrying out this 
     subtitle, the Secretary shall provide adequate safeguards to 
     protect the interests of tenants and sharecroppers.
       (e) Sharing of Payments.--The Secretary shall provide for 
     the sharing of direct payments, counter-cyclical payments, or 
     average crop revenue election payments under section 1105 
     among the producers on a farm on a fair and equitable basis.

     SEC. 1306. PLANTING FLEXIBILITY.

       (a) Permitted Crops.--Subject to subsection (b), any 
     commodity or crop may be planted on the base acres for 
     peanuts on a farm.
       (b) Limitations Regarding Certain Commodities.--
       (1) General limitation.--The planting of an agricultural 
     commodity specified in paragraph (3) shall be prohibited on 
     base acres for peanuts unless the commodity, if planted, is 
     destroyed before harvest.
       (2) Treatment of trees and other perennials.--The planting 
     of an agricultural commodity specified in paragraph (3) that 
     is produced on a tree or other perennial plant shall be 
     prohibited on base acres for peanuts.
       (3) Covered agricultural commodities.--Paragraphs (1) and 
     (2) apply to the following agricultural commodities:
       (A) Fruits.
       (B) Vegetables (other than mung beans and pulse crops).
       (C) Wild rice.
       (c) Exceptions.--Paragraphs (1) and (2) of subsection (b) 
     shall not limit the planting of an agricultural commodity 
     specified in paragraph (3) of that subsection--
       (1) in any region in which there is a history of double-
     cropping of peanuts with agricultural commodities specified 
     in subsection (b)(3), as determined by the Secretary, in 
     which case the double-cropping shall be permitted;
       (2) on a farm that the Secretary determines has a history 
     of planting agricultural commodities specified in subsection 
     (b)(3) on the base acres for peanuts, except that direct 
     payments and counter-cyclical payments shall be reduced by an 
     acre for each acre planted to such an agricultural commodity; 
     or
       (3) by the producers on a farm that the Secretary 
     determines has an established planting history of a specific 
     agricultural commodity specified in subsection (b)(3), except 
     that--
       (A) the quantity planted may not exceed the average annual 
     planting history of such agricultural commodity by the 
     producers on the farm in the 1991 through 1995 or 1998 
     through 2001 crop years (excluding any crop year in which no 
     plantings were made), as determined by the Secretary; and
       (B) direct payments and counter-cyclical payments shall be 
     reduced by an acre for each acre planted to such agricultural 
     commodity.

     SEC. 1307. MARKETING ASSISTANCE LOANS AND LOAN DEFICIENCY 
                   PAYMENTS FOR PEANUTS.

       (a) Nonrecourse Loans Available.--
       (1) Availability.--For each of the 2008 through 2012 crops 
     of peanuts, the Secretary shall make available to producers 
     on a farm nonrecourse marketing assistance loans for peanuts 
     produced on the farm.
       (2) Terms and conditions.--The loans shall be made under 
     terms and conditions that are prescribed by the Secretary and 
     at the loan rate established under subsection (b).
       (3) Eligible production.--The producers on a farm shall be 
     eligible for a marketing assistance loan under this 
     subsection for any quantity of peanuts produced on the farm.
       (4) Options for obtaining loan.--A marketing assistance 
     loan under this subsection, and loan deficiency payments 
     under subsection (e), may be obtained at the option of the 
     producers on a farm through--
       (A) a designated marketing association or marketing 
     cooperative of producers that is approved by the Secretary; 
     or
       (B) the Farm Service Agency.
       (5) Storage of loan peanuts.--As a condition on the 
     Secretary's approval of an individual or entity to provide 
     storage for peanuts for which a marketing assistance loan is 
     made under this section, the individual or entity shall 
     agree--
       (A) to provide such storage on a nondiscriminatory basis; 
     and
       (B) to comply with such additional requirements as the 
     Secretary considers appropriate to accomplish the purposes of 
     this section and promote fairness in the administration of 
     the benefits of this section.
       (6) Storage, handling, and associated costs.--
       (A) In general.--Beginning with the 2008 crop of peanuts, 
     to ensure proper storage of peanuts for which a loan is made 
     under this section, the Secretary shall pay handling and 
     other associated costs (other than storage costs) incurred at 
     the time at which the peanuts are placed under loan, as 
     determined by the Secretary.
       (B) Redemption and forfeiture.--The Secretary shall--
       (i) require the repayment of handling and other associated 
     costs paid under subparagraph (A) for all peanuts pledged as 
     collateral for a loan that is redeemed under this section; 
     and
       (ii) pay storage, handling, and other associated costs for 
     all peanuts pledged as collateral that are forfeited under 
     this section.
       (7) Marketing.--A marketing association or cooperative may 
     market peanuts for which a loan is made under this section in 
     any manner that conforms to consumer needs, including the 
     separation of peanuts by type and quality.
       (b) Loan Rate.--Except as provided in section 1105, the 
     loan rate for a marketing assistance loan for peanuts under 
     subsection (a) shall be equal to $355 per ton.
       (c) Term of Loan.--
       (1) In general.--A marketing assistance loan for peanuts 
     under subsection (a) shall have a term of 9 months beginning 
     on the first day of

[[Page H3425]]

     the first month after the month in which the loan is made.
       (2) Extensions prohibited.--The Secretary may not extend 
     the term of a marketing assistance loan for peanuts under 
     subsection (a).
       (d) Repayment Rate.--
       (1) In general.--The Secretary shall permit producers on a 
     farm to repay a marketing assistance loan for peanuts under 
     subsection (a) at a rate that is the lesser of--
       (A) the loan rate established for peanuts under subsection 
     (b), plus interest (determined in accordance with section 163 
     of the Federal Agriculture Improvement and Reform Act of 1996 
     (7 U.S.C. 7283)); or
       (B) a rate that the Secretary determines will--
       (i) minimize potential loan forfeitures;
       (ii) minimize the accumulation of stocks of peanuts by the 
     Federal Government;
       (iii) minimize the cost incurred by the Federal Government 
     in storing peanuts; and
       (iv) allow peanuts produced in the United States to be 
     marketed freely and competitively, both domestically and 
     internationally.
       (2) Authority to temporarily adjust repayment rates.--
       (A) Adjustment authority.--In the event of a severe 
     disruption to marketing, transportation, or related 
     infrastructure, the Secretary may modify the repayment rate 
     otherwise applicable under this subsection for marketing 
     assistance loans for peanuts under subsection (a).
       (B) Duration.--An adjustment made under subparagraph (A) in 
     the repayment rate for marketing assistance loans for peanuts 
     shall be in effect on a short-term and temporary basis, as 
     determined by the Secretary.
       (e) Loan Deficiency Payments.--
       (1) Availability.--The Secretary may make loan deficiency 
     payments available to producers on a farm that, although 
     eligible to obtain a marketing assistance loan for peanuts 
     under subsection (a), agree to forgo obtaining the loan for 
     the peanuts in return for loan deficiency payments under this 
     subsection.
       (2) Computation.--A loan deficiency payment under this 
     subsection shall be computed by multiplying--
       (A) the payment rate determined under paragraph (3) for 
     peanuts; by
       (B) the quantity of the peanuts produced by the producers, 
     excluding any quantity for which the producers obtain a 
     marketing assistance loan under subsection (a).
       (3) Payment rate.--For purposes of this subsection, the 
     payment rate shall be the amount by which--
       (A) the loan rate established under subsection (b); exceeds
       (B) the rate at which a loan may be repaid under subsection 
     (d).
       (4) Effective date for payment rate determination.--The 
     Secretary shall determine the amount of the loan deficiency 
     payment to be made under this subsection to the producers on 
     a farm with respect to a quantity of peanuts using the 
     payment rate in effect under paragraph (3) as of the date the 
     producers request the payment.
       (f) Compliance With Conservation and Wetlands 
     Requirements.--As a condition of the receipt of a marketing 
     assistance loan under subsection (a), the producer shall 
     comply with applicable conservation requirements under 
     subtitle B of title XII of the Food Security Act of 1985 (16 
     U.S.C. 3811 et seq.) and applicable wetland protection 
     requirements under subtitle C of title XII of that Act (16 
     U.S.C. 3821 et seq.) during the term of the loan.
       (g) Reimbursable Agreements and Payment of Administrative 
     Expenses.--The Secretary may implement any reimbursable 
     agreements or provide for the payment of administrative 
     expenses under this subtitle only in a manner that is 
     consistent with such activities in regard to other 
     commodities.

     SEC. 1308. ADJUSTMENTS OF LOANS.

       (a) Adjustment Authority.--The Secretary may make 
     appropriate adjustments in the loan rates for peanuts for 
     differences in grade, type, quality, location, and other 
     factors.
       (b) Manner of Adjustment.--The adjustments under subsection 
     (a) shall, to the maximum extent practicable, be made in such 
     a manner that the average loan level for peanuts will, on the 
     basis of the anticipated incidence of the factors, be equal 
     to the level of support determined in accordance with this 
     subtitle and subtitles B, D, and E.
       (c) Adjustment on County Basis.--
       (1) In general.--Subject to paragraph (2), the Secretary 
     may establish loan rates for a crop of peanuts for producers 
     in individual counties in a manner that results in the lowest 
     loan rate being 95 percent of the national average loan rate, 
     if those loan rates do not result in an increase in outlays.
       (2) Prohibition.--Adjustments under this subsection shall 
     not result in an increase in the national average loan rate 
     for any year.

                           Subtitle D--Sugar

     SEC. 1401. SUGAR PROGRAM.

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

     ``SEC. 156. SUGAR PROGRAM.

       ``(a) Sugarcane.--The Secretary shall make loans available 
     to processors of domestically grown sugarcane at a rate equal 
     to--
       ``(1) 18.00 cents per pound for raw cane sugar for the 2008 
     crop year;
       ``(2) 18.25 cents per pound for raw cane sugar for the 2009 
     crop year;
       ``(3) 18.50 cents per pound for raw cane sugar for the 2010 
     crop year;
       ``(4) 18.75 cents per pound for raw cane sugar for the 2011 
     crop year; and
       ``(5) 18.75 cents per pound for raw cane sugar for the 2012 
     crop year.
       ``(b) Sugar Beets.--The Secretary shall make loans 
     available to processors of domestically grown sugar beets at 
     a rate equal to--
       ``(1) 22.9 cents per pound for refined beet sugar for the 
     2008 crop year; and
       ``(2) a rate that is equal to 128.5 percent of the loan 
     rate per pound of raw cane sugar for the applicable crop year 
     under subsection (a) for each of the 2009 through 2012 crop 
     years.
       ``(c) Term of Loans.--
       ``(1) In general.--A loan under this section during any 
     fiscal year shall be made available not earlier than the 
     beginning of the fiscal year and shall mature at the earlier 
     of--
       ``(A) the end of the 9-month period beginning on the first 
     day of the first month after the month in which the loan is 
     made; or
       ``(B) the end of the fiscal year in which the loan is made.
       ``(2) Supplemental loans.--In the case of a loan made under 
     this section in the last 3 months of a fiscal year, the 
     processor may repledge the sugar as collateral for a second 
     loan in the subsequent fiscal year, except that the second 
     loan shall--
       ``(A) be made at the loan rate in effect at the time the 
     first loan was made; and
       ``(B) mature in 9 months less the quantity of time that the 
     first loan was in effect.
       ``(d) Loan Type; Processor Assurances.--
       ``(1) Nonrecourse loans.--The Secretary shall carry out 
     this section through the use of nonrecourse loans.
       ``(2) Processor assurances.--
       ``(A) In general.--The Secretary shall obtain from each 
     processor that receives a loan under this section such 
     assurances as the Secretary considers adequate to ensure that 
     the processor will provide payments to producers that are 
     proportional to the value of the loan received by the 
     processor for the sugar beets and sugarcane delivered by 
     producers to the processor.
       ``(B) Minimum payments.--
       ``(i) In general.--Subject to clause (ii), the Secretary 
     may establish appropriate minimum payments for purposes of 
     this paragraph.
       ``(ii) Limitation.--In the case of sugar beets, the minimum 
     payment established under clause (i) shall not exceed the 
     rate of payment provided for under the applicable contract 
     between a sugar beet producer and a sugar beet processor.
       ``(3) Administration.--The Secretary may not impose or 
     enforce any prenotification requirement, or similar 
     administrative requirement not otherwise in effect on May 13, 
     2002, that has the effect of preventing a processor from 
     electing to forfeit the loan collateral (of an acceptable 
     grade and quality) on the maturity of the loan.
       ``(e) Loans for In-Process Sugar.--
       ``(1) Definition of in-process sugars and syrups.--In this 
     subsection, the term `in-process sugars and syrups' does not 
     include raw sugar, liquid sugar, invert sugar, invert syrup, 
     or other finished product that is otherwise eligible for a 
     loan under subsection (a) or (b).
       ``(2) Availability.--The Secretary shall make nonrecourse 
     loans available to processors of a crop of domestically grown 
     sugarcane and sugar beets for in-process sugars and syrups 
     derived from the crop.
       ``(3) Loan rate.--The loan rate shall be equal to 80 
     percent of the loan rate applicable to raw cane sugar or 
     refined beet sugar, as determined by the Secretary on the 
     basis of the source material for the in-process sugars and 
     syrups.
       ``(4) Further processing on forfeiture.--
       ``(A) In general.--As a condition of the forfeiture of in-
     process sugars and syrups serving as collateral for a loan 
     under paragraph (2), the processor shall, within such 
     reasonable time period as the Secretary may prescribe and at 
     no cost to the Commodity Credit Corporation, convert the in-
     process sugars and syrups into raw cane sugar or refined beet 
     sugar of acceptable grade and quality for sugars eligible for 
     loans under subsection (a) or (b).
       ``(B) Transfer to corporation.--Once the in-process sugars 
     and syrups are fully processed into raw cane sugar or refined 
     beet sugar, the processor shall transfer the sugar to the 
     Commodity Credit Corporation.
       ``(C) Payment to processor.--On transfer of the sugar, the 
     Secretary shall make a payment to the processor in an amount 
     equal to the amount obtained by multiplying--
       ``(i) the difference between--

       ``(I) the loan rate for raw cane sugar or refined beet 
     sugar, as appropriate; and
       ``(II) the loan rate the processor received under paragraph 
     (3); by

       ``(ii) the quantity of sugar transferred to the Secretary.
       ``(5) Loan conversion.--If the processor does not forfeit 
     the collateral as described in paragraph (4), but instead 
     further processes the in-process sugars and syrups into raw 
     cane sugar or refined beet sugar and repays the loan on the 
     in-process sugars and syrups, the processor may obtain a loan 
     under subsection (a) or (b) for the raw cane sugar or refined 
     beet sugar, as appropriate.
       ``(6) Term of loan.--The term of a loan made under this 
     subsection for a quantity of in-process sugars and syrups, 
     when combined with the term of a loan made with respect to 
     the raw cane sugar or refined beet sugar derived from the in-
     process sugars and syrups, may not exceed 9 months, 
     consistent with subsection (c).
       ``(f) Avoiding Forfeitures; Corporation Inventory 
     Disposition.--
       ``(1) In general.--Subject to subsection (d)(3), to the 
     maximum extent practicable, the Secretary shall operate the 
     program established under this section at no cost to the 
     Federal Government by avoiding the forfeiture of sugar to the 
     Commodity Credit Corporation.
       ``(2) Inventory disposition.--
       ``(A) In general.--To carry out paragraph (1), the 
     Commodity Credit Corporation may accept bids to obtain raw 
     cane sugar or refined beet sugar in the inventory of the 
     Commodity Credit Corporation from (or otherwise make 
     available such commodities, on appropriate terms and 
     conditions, to) processors of sugarcane and processors of 
     sugar beets (acting in

[[Page H3426]]

     conjunction with the producers of the sugarcane or sugar 
     beets processed by the processors) in return for the 
     reduction of production of raw cane sugar or refined beet 
     sugar, as appropriate.
       ``(B) Bioenergy feedstock.--If a reduction in the quantity 
     of production accepted under subparagraph (A) involves sugar 
     beets or sugarcane that has already been planted, the sugar 
     beets or sugarcane so planted may not be used for any 
     commercial purpose other than as a bioenergy feedstock.
       ``(C) Additional authority.--The authority provided under 
     this paragraph is in addition to any authority of the 
     Commodity Credit Corporation under any other law.
       ``(g) Information Reporting.--
       ``(1) Duty of processors and refiners to report.--A 
     sugarcane processor, cane sugar refiner, and sugar beet 
     processor shall furnish the Secretary, on a monthly basis, 
     such information as the Secretary may require to administer 
     sugar programs, including the quantity of purchases of 
     sugarcane, sugar beets, and sugar, and production, 
     importation, distribution, and stock levels of sugar.
       ``(2) Duty of producers to report.--
       ``(A) Proportionate share states.--As a condition of a loan 
     made to a processor for the benefit of a producer, the 
     Secretary shall require each producer of sugarcane located in 
     a State (other than the Commonwealth of Puerto Rico) in which 
     there are in excess of 250 producers of sugarcane to report, 
     in the manner prescribed by the Secretary, the sugarcane 
     yields and acres planted to sugarcane of the producer.
       ``(B) Other states.--The Secretary may require each 
     producer of sugarcane or sugar beets not covered by 
     subparagraph (A) to report, in a manner prescribed by the 
     Secretary, the yields of, and acres planted to, sugarcane or 
     sugar beets, respectively, of the producer.
       ``(3) Duty of importers to report.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the Secretary shall require an importer of sugars, syrups, or 
     molasses to be used for human consumption or to be used for 
     the extraction of sugar for human consumption to report, in 
     the manner prescribed by the Secretary, the quantities of the 
     products imported by the importer and the sugar content or 
     equivalent of the products.
       ``(B) Tariff-rate quotas.--Subparagraph (A) shall not apply 
     to sugars, syrups, or molasses that are within the quantities 
     of tariff-rate quotas that are subject to the lower rate of 
     duties.
       ``(4) Collection of information on mexico.--
       ``(A) Collection.--The Secretary shall collect--
       ``(i) information on the production, consumption, stocks, 
     and trade of sugar in Mexico, including United States exports 
     of sugar to Mexico; and
       ``(ii) publicly available information on Mexican 
     production, consumption, and trade of high fructose corn 
     syrups.
       ``(B) Publication.--The data collected under subparagraph 
     (A) shall be published in each edition of the World 
     Agricultural Supply and Demand Estimates.
       ``(5) Penalty.--Any person willfully failing or refusing to 
     furnish the information required to be reported by paragraph 
     (1), (2), or (3), or furnishing willfully false information, 
     shall be subject to a civil penalty of not more than $10,000 
     for each such violation.
       ``(6) Monthly reports.--Taking into consideration the 
     information received under this subsection, the Secretary 
     shall publish on a monthly basis composite data on 
     production, imports, distribution, and stock levels of sugar.
       ``(h) Substitution of Refined Sugar.--For purposes of 
     Additional U.S. Note 6 to chapter 17 of the Harmonized Tariff 
     Schedule of the United States and the reexport programs and 
     polyhydric alcohol program administered by the Secretary, all 
     refined sugars (whether derived from sugar beets or 
     sugarcane) produced by cane sugar refineries and beet sugar 
     processors shall be fully substitutable for the export of 
     sugar and sugar-containing products under those programs.
       ``(i) Effective Period.--This section shall be effective 
     only for the 2008 through 2012 crops of sugar beets and 
     sugarcane.''.
       (b) Transition.--The Secretary shall make loans for raw 
     cane sugar and refined beet sugar available for the 2007 crop 
     year on the terms and conditions provided in section 156 of 
     the Federal Agriculture Improvement and Reform Act of 1996 (7 
     U.S.C. 7272), as in effect on the day before the date of 
     enactment of this Act.

     SEC. 1402. UNITED STATES MEMBERSHIP IN THE INTERNATIONAL 
                   SUGAR ORGANIZATION.

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

     SEC. 1403. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR.

       (a) Definitions.--Section 359a of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1359aa) is amended--
       (1) by redesignating paragraphs (1), (2), (3), and (4) as 
     paragraphs (2), (4), (5), and (6), respectively;
       (2) by inserting before paragraph (2) (as so redesignated) 
     the following:
       ``(1) Human consumption.--The term `human consumption', 
     when used in the context of a reference to sugar (whether in 
     the form of sugar, in-process sugar, syrup, molasses, or in 
     some other form) for human consumption, includes sugar for 
     use in human food, beverages, or similar products.''; and
       (3) by inserting after paragraph (2) (as so redesignated) 
     the following:
       ``(3) Market.--
       ``(A) In general.--The term `market' means to sell or 
     otherwise dispose of in commerce in the United States.
       ``(B) Inclusions.--The term `market' includes--
       ``(i) the forfeiture of sugar under the loan program for 
     sugar established under section 156 of the Federal 
     Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 
     7272);
       ``(ii) with respect to any integrated processor and 
     refiner, the movement of raw cane sugar into the refining 
     process; and
       ``(iii) the sale of sugar for the production of ethanol or 
     other bioenergy product, if the disposition of the sugar is 
     administered by the Secretary under section 9010 of the Farm 
     Security and Rural Investment Act of 2002.
       ``(C) Marketing year.--Forfeited sugar described in 
     subparagraph (B)(i) shall be considered to have been marketed 
     during the crop year for which a loan is made under the loan 
     program described in that subparagraph.''.
       (b) Flexible Marketing Allotments for Sugar.--Section 359b 
     of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359bb) 
     is amended to read as follows:

     ``SEC. 359B. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR.

       ``(a) Sugar Estimates.--
       ``(1) In general.--Not later than August 1 before the 
     beginning of each of the 2008 through 2012 crop years for 
     sugarcane and sugar beets, the Secretary shall estimate--
       ``(A) the quantity of sugar that will be subject to human 
     consumption in the United States during the crop year;
       ``(B) the quantity of sugar that would provide for 
     reasonable carryover stocks;
       ``(C) the quantity of sugar that will be available from 
     carry-in stocks for human consumption in the United States 
     during the crop year;
       ``(D) the quantity of sugar that will be available from the 
     domestic processing of sugarcane, sugar beets, and in-process 
     beet sugar; and
       ``(E) the quantity of sugars, syrups, and molasses that 
     will be imported for human consumption or to be used for the 
     extraction of sugar for human consumption in the United 
     States during the crop year, whether the articles are under a 
     tariff-rate quota or are in excess or outside of a tariff-
     rate quota.
       ``(2) Exclusion.--The estimates under this subsection shall 
     not apply to sugar imported for the production of polyhydric 
     alcohol or to any sugar refined and reexported in refined 
     form or in products containing sugar.
       ``(3) Reestimates.--The Secretary shall make reestimates of 
     sugar consumption, stocks, production, and imports for a crop 
     year as necessary, but not later than the beginning of each 
     of the second through fourth quarters of the crop year.
       ``(b) Sugar Allotments.--
       ``(1) Establishment.--By the beginning of each crop year, 
     the Secretary shall establish for that crop year appropriate 
     allotments under section 359c for the marketing by processors 
     of sugar processed from sugar cane or sugar beets or in-
     process beet sugar (whether the sugar beets or in-process 
     beet sugar was produced domestically or imported) at a level 
     that is--
       ``(A) sufficient to maintain raw and refined sugar prices 
     above forfeiture levels so that there will be no forfeitures 
     of sugar to the Commodity Credit Corporation under the loan 
     program for sugar established under section 156 of the 
     Federal Agriculture Improvement and Reform Act of 1996 (7 
     U.S.C. 7272); but
       ``(B) not less than 85 percent of the estimated quantity of 
     sugar for domestic human consumption for the crop year.
       ``(2) Products.--The Secretary may include sugar products, 
     the majority content of which is sucrose for human 
     consumption, derived from sugar cane, sugar beets, molasses, 
     or sugar in the allotments established under paragraph (1) if 
     the Secretary determines it to be appropriate for purposes of 
     this part.
       ``(c) Coverage of Allotments.--
       ``(1) In general.--The marketing allotments under this part 
     shall apply to the marketing by processors of sugar intended 
     for domestic human consumption that has been processed from 
     sugar cane, sugar beets, or in-process beet sugar, whether 
     such sugar beets or in-process beet sugar was produced 
     domestically or imported.
       ``(2) Exceptions.--Consistent with the administration of 
     marketing allotments for each of the 2002 through 2007 crop 
     years, the marketing allotments shall not apply to sugar 
     sold--
       ``(A) to facilitate the exportation of the sugar to a 
     foreign country, except that the exports of sugar shall not 
     be eligible to receive credits under reexport programs for 
     refined sugar or sugar containing products administered by 
     the Secretary;
       ``(B) to enable another processor to fulfill an allocation 
     established for that processor; or
       ``(C) for uses other than domestic human consumption, 
     except for the sale of sugar for the production of ethanol or 
     other bioenergy if the disposition of the sugar is 
     administered by the Secretary under section 9010 of the Farm 
     Security and Rural Investment Act of 2002.
       ``(3) Requirement.--The sale of sugar described in 
     paragraph (2)(B) shall be--
       ``(A) made prior to May 1; and
       ``(B) reported to the Secretary.
       ``(d) Prohibitions.--
       ``(1) In general.--During all or part of any crop year for 
     which marketing allotments have been established, no 
     processor of sugar beets or sugarcane shall market for 
     domestic human consumption a quantity of sugar in excess of 
     the allocation established for the processor, except--
       ``(A) to enable another processor to fulfill an allocation 
     established for that other processor; or
       ``(B) to facilitate the exportation of the sugar.
       ``(2) Civil penalty.--Any processor who knowingly violates 
     paragraph (1) shall be liable to the Commodity Credit 
     Corporation for a civil

[[Page H3427]]

     penalty in an amount equal to 3 times the United States 
     market value, at the time of the commission of the violation, 
     of that quantity of sugar involved in the violation.''.
       (c) Establishment of Flexible Marketing Allotments.--
     Section 359c of the Agricultural Adjustment Act of 1938 (7 
     U.S.C. 1359cc) is amended--
       (1) by striking subsection (b) and inserting the following:
       ``(b) Overall Allotment Quantity.--
       ``(1) In general.--The Secretary shall establish the 
     overall quantity of sugar to be allotted for the crop year 
     (referred to in this part as the `overall allotment 
     quantity') at a level that is--
       ``(A) sufficient to maintain raw and refined sugar prices 
     above forfeiture levels to avoid forfeiture of sugar to the 
     Commodity Credit Corporation; but
       ``(B) not less than a quantity equal to 85 percent of the 
     estimated quantity of sugar for domestic human consumption 
     for the crop year.
       ``(2) Adjustment.--Subject to paragraph (1), the Secretary 
     shall adjust the overall allotment quantity to maintain--
       ``(A) raw and refined sugar prices above forfeiture levels 
     to avoid the forfeiture of sugar to the Commodity Credit 
     Corporation; and
       ``(B) adequate supplies of raw and refined sugar in the 
     domestic market.'';
       (2) in subsection (d)(2), by inserting ``or in-process beet 
     sugar'' before the period at the end;
       (3) in subsection (g)(1)--
       (A) by striking ``(1) in general.--The Secretary'' and 
     inserting the following:
       ``(1) Adjustments.--
       ``(A) In general.--Subject to subparagraph (B), the 
     Secretary''; and
       (B) by adding at the end the following:
       ``(B) Limitation.--In carrying out subparagraph (A), the 
     Secretary may not reduce the overall allotment quantity to a 
     quantity of less than 85 percent of the estimated quantity of 
     sugar for domestic human consumption for the crop year.''; 
     and
       (4) by striking subsection (h).
       (d) Allocation of Marketing Allotments.--Section 359d(b) of 
     the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359dd(b)) 
     is amended--
       (1) in paragraph (1)(F), by striking ``Except as otherwise 
     provided in section 359f(c)(8), if'' and inserting ``If''; 
     and
       (2) in paragraph (2), by striking subparagraphs (G), (H), 
     and (I) and inserting the following:
       ``(G) Sale of factories of a processor to another 
     processor.--
       ``(i) Effect of sale.--Subject to subparagraphs (E) and 
     (F), if 1 or more factories of a processor of beet sugar (but 
     not all of the assets of the processor) are sold to another 
     processor of beet sugar during a crop year, the Secretary 
     shall assign a pro rata portion of the allocation of the 
     seller to the allocation of the buyer to reflect the 
     historical contribution of the production of the sold 1 or 
     more factories to the total allocation of the seller, unless 
     the buyer and the seller have agreed upon the transfer of a 
     different portion of the allocation of the seller, in which 
     case, the Secretary shall transfer that portion agreed upon 
     by the buyer and seller.
       ``(ii) Application of allocation.--The assignment of the 
     allocation under clause (i) shall apply--

       ``(I) during the remainder of the crop year for which the 
     sale described in clause (i) occurs; and
       ``(II) during each subsequent crop year.

       ``(iii) Use of other factories to fill allocation.--If the 
     assignment of the allocation under clause (i) to the buyer 
     for the 1 or more purchased factories cannot be filled by the 
     production of the 1 or more purchased factories, the 
     remainder of the allocation may be filled by beet sugar 
     produced by the buyer from other factories of the buyer.
       ``(H) New entrants starting production, reopening, or 
     acquiring an existing factory with production history.--
       ``(i) Definition of new entrant.--

       ``(I) In general.--In this subparagraph, the term `new 
     entrant' means an individual, corporation, or other entity 
     that--

       ``(aa) does not have an allocation of the beet sugar 
     allotment under this part;
       ``(bb) is not affiliated with any other individual, 
     corporation, or entity that has an allocation of beet sugar 
     under this part (referred to in this clause as a `third 
     party'); and
       ``(cc) will process sugar beets produced by sugar beet 
     growers under contract with the new entrant for the 
     production of sugar at the new or re-opened factory that is 
     the basis for the new entrant allocation.

       ``(II) Affiliation.--For purposes of subclause (I)(bb), a 
     new entrant and a third party shall be considered to be 
     affiliated if--

       ``(aa) the third party has an ownership interest in the new 
     entrant;
       ``(bb) the new entrant and the third party have owners in 
     common;
       ``(cc) the third party has the ability to exercise control 
     over the new entrant by organizational rights, contractual 
     rights, or any other means;
       ``(dd) the third party has a contractual relationship with 
     the new entrant by which the new entrant will make use of the 
     facilities or assets of the third party; or
       ``(ee) there are any other similar circumstances by which 
     the Secretary determines that the new entrant and the third 
     party are affiliated.
       ``(ii) Allocation for a new entrant that has constructed a 
     new factory or reopened a factory that was not operated since 
     before 1998.--If a new entrant constructs a new sugar beet 
     processing factory, or acquires and reopens a sugar beet 
     processing factory that last processed sugar beets prior to 
     the 1998 crop year and there is no allocation currently 
     associated with the factory, the Secretary shall--

       ``(I) assign an allocation for beet sugar to the new 
     entrant that provides a fair and equitable distribution of 
     the allocations for beet sugar so as to enable the new 
     entrant to achieve a factory utilization rate comparable to 
     the factory utilization rates of other similarly-situated 
     processors; and
       ``(II) reduce the allocations for beet sugar of all other 
     processors on a pro rata basis to reflect the allocation to 
     the new entrant.

       ``(iii) Allocation for a new entrant that has acquired an 
     existing factory with a production history.--

       ``(I) In general.--If a new entrant acquires an existing 
     factory that has processed sugar beets from the 1998 or 
     subsequent crop year and has a production history, on the 
     mutual agreement of the new entrant and the company currently 
     holding the allocation associated with the factory, the 
     Secretary shall transfer to the new entrant a portion of the 
     allocation of the current allocation holder to reflect the 
     historical contribution of the production of the 1 or more 
     sold factories to the total allocation of the current 
     allocation holder, unless the new entrant and current 
     allocation holder have agreed upon the transfer of a 
     different portion of the allocation of the current allocation 
     holder, in which case, the Secretary shall transfer that 
     portion agreed upon by the new entrant and the current 
     allocation holder.
       ``(II) Prohibition.--In the absence of a mutual agreement 
     described in subclause (I), the new entrant shall be 
     ineligible for a beet sugar allocation.

       ``(iv) Appeals.--Any decision made under this subsection 
     may be appealed to the Secretary in accordance with section 
     359i.''.
       (e) Reassignment of Deficits.--Section 359e(b) of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 1359ee(b)) is 
     amended in paragraphs (1)(D) and (2)(C), by inserting ``of 
     raw cane sugar'' after ``imports'' each place it appears.
       (f) Provisions Applicable to Producers.--Section 359f(c) of 
     the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359ff(c)) 
     is amended--
       (1) by striking paragraph (8);
       (2) by redesignating paragraphs (1) through (7) as 
     paragraphs (2) through (8), respectively;
       (3) by inserting before paragraph (2) (as so redesignated) 
     the following:
       ``(1) Definition of seed.--
       ``(A) In general.--In this subsection, the term `seed' 
     means only those varieties of seed that are dedicated to the 
     production of sugarcane from which is produced sugar for 
     human consumption.
       ``(B) Exclusion.--The term `seed' does not include seed of 
     a high-fiber cane variety dedicated to other uses, as 
     determined by the Secretary'';
       (4) in paragraph (3) (as so redesignated)--
       (A) in the first sentence--
       (i) by striking ``paragraph (1)'' and inserting ``paragraph 
     (2)''; and
       (ii) by inserting ``sugar produced from'' after ``quantity 
     of''; and
       (B) in the second sentence, by striking ``paragraph (7)'' 
     and inserting ``paragraph (8)'';
       (5) in the first sentence of paragraph (6)(C) (as so 
     redesignated), by inserting ``for sugar'' before ``in excess 
     of the farm's proportionate share''; and
       (6) in paragraph (8) (as so redesignated), by inserting 
     ``sugar from'' after ``the amount of''.
       (g) Special Rules.--Section 359g of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1359gg) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Transfer of Acreage Base History.--
       ``(1) Transfer authorized.--For the purpose of establishing 
     proportionate shares for sugarcane farms under section 
     359f(c), the Secretary, on application of any producer, with 
     the written consent of all owners of a farm, may transfer the 
     acreage base history of the farm to any other parcels of land 
     of the applicant.
       ``(2) Converted acreage base.--
       ``(A) In general.--Sugarcane acreage base established under 
     section 359f(c) that has been or is converted to 
     nonagricultural use on or after May 13, 2002, may be 
     transferred to other land suitable for the production of 
     sugarcane that can be delivered to a processor in a 
     proportionate share State in accordance with this paragraph.
       ``(B) Notification.--Not later than 90 days after the 
     Secretary becomes aware of a conversion of any sugarcane 
     acreage base to a nonagricultural use, the Secretary shall 
     notify the 1 or more affected landowners of the 
     transferability of the applicable sugarcane acreage base.
       ``(C) Initial transfer period.--The owner of the base 
     attributable to the acreage at the time of the conversion 
     shall be afforded 90 days from the date of the receipt of the 
     notification under subparagraph (B) to transfer the base to 1 
     or more farms owned by the owner.
       ``(D) Grower of record.--If a transfer under subparagraph 
     (C) cannot be accomplished during the period specified in 
     that subparagraph, the grower of record with regard to the 
     acreage base on the date on which the acreage was converted 
     to nonagricultural use shall--
       ``(i) be notified; and
       ``(ii) have 90 days from the date of the receipt of the 
     notification to transfer the base to 1 or more farms operated 
     by the grower.
       ``(E) Pool distribution.--
       ``(i) In general.--If transfers under subparagraphs (B) and 
     (C) cannot be accomplished during the periods specified in 
     those subparagraphs, the county committee of the Farm Service 
     Agency for the applicable county shall place the acreage base 
     in a pool for possible assignment to other farms.
       ``(ii) Acceptance of requests.--After providing reasonable 
     notice to farm owners, operators, and growers of record in 
     the county, the county committee shall accept requests from 
     owners, operators, and growers of record in the county.
       ``(iii) Assignment.--The county committee shall assign the 
     acreage base to other farms in

[[Page H3428]]

     the county that are eligible and capable of accepting the 
     acreage base, based on a random drawing from among the 
     requests received under clause (ii).
       ``(F) Statewide reallocation.--
       ``(i) In general.--Any acreage base remaining unassigned 
     after the transfers and processes described in subparagraphs 
     (A) through (E) shall be made available to the State 
     committee of the Farm Service Agency for allocation among the 
     remaining county committees in the State representing 
     counties with farms eligible for assignment of the base, 
     based on a random drawing.
       ``(ii) Allocation.--Any county committee receiving acreage 
     base under this subparagraph shall allocate the acreage base 
     to eligible farms using the process described in subparagraph 
     (E).
       ``(G) Status of reassigned base.--After acreage base has 
     been reassigned in accordance with this subparagraph, the 
     acreage base shall--
       ``(i) remain on the farm; and
       ``(ii) be subject to the transfer provisions of paragraph 
     (1).''; and
       (2) in subsection (d)--
       (A) in paragraph (1)--
       (i) by inserting ``affected'' before ``crop-share owners'' 
     each place it appears; and
       (ii) by striking ``, and from the processing company 
     holding the applicable allocation for such shares,''; and
       (B) in paragraph (2), by striking ``based on'' and all that 
     follows through the end of subparagraph (B) and inserting 
     ``based on--
       ``(A) the number of acres of sugarcane base being 
     transferred; and
       ``(B) the pro rata amount of allocation at the processing 
     company holding the applicable allocation that equals the 
     contribution of the grower to allocation of the processing 
     company for the sugarcane acreage base being transferred.''.
       (h) Appeals.--Section 359i of the Agricultural Adjustment 
     Act of 1938 (7 U.S.C. 1359ii) is amended--
       (1) in subsection (a), by inserting ``or 359g(d)'' after 
     ``359f''; and
       (2) by striking subsection (c).
       (i) Reallocating Sugar Quota Import Shortfalls.--Section 
     359k of the Agricultural Adjustment Act of 1938 (7 U.S.C. 
     1359kk) is repealed.
       (j) Administration of Tariff Rate Quotas.--Part VII of 
     subtitle B of title III of the Agricultural Adjustment Act of 
     1938 (7 U.S.C. 1359aa) (as amended by subsection (i)) is 
     amended by adding at the end the following:

     ``SEC. 359K. ADMINISTRATION OF TARIFF RATE QUOTAS.

       ``(a) Establishment.--
       ``(1) In general.--Except as provided in paragraph (2) and 
     notwithstanding any other provision of law, at the beginning 
     of the quota year, the Secretary shall establish the tariff-
     rate quotas for raw cane sugar and refined sugars at the 
     minimum level necessary to comply with obligations under 
     international trade agreements that have been approved by 
     Congress.
       ``(2) Exception.--Paragraph (1) shall not apply to 
     specialty sugar.
       ``(b) Adjustment.--
       ``(1) Before april 1.--Before April 1 of each fiscal year, 
     if there is an emergency shortage of sugar in the United 
     States market that is caused by a war, flood, hurricane, or 
     other natural disaster, or other similar event as determined 
     by the Secretary--
       ``(A) the Secretary shall take action to increase the 
     supply of sugar in accordance with sections 359c(b)(2) and 
     359e(b), including an increase in the tariff-rate quota for 
     raw cane sugar to accommodate the reassignment to imports; 
     and
       ``(B) if there is still a shortage of sugar in the United 
     States market, and marketing of domestic sugar has been 
     maximized, and domestic raw cane sugar refining capacity has 
     been maximized, the Secretary may increase the tariff-rate 
     quota for refined sugars sufficient to accommodate the supply 
     increase, if the further increase will not threaten to result 
     in the forfeiture of sugar pledged as collateral for a loan 
     under section 156 of the Federal Agriculture Improvement and 
     Reform Act of 1996 (7 U.S.C. 7272).
       ``(2) On or after april 1.--On or after April 1 of each 
     fiscal year--
       ``(A) the Secretary may take action to increase the supply 
     of sugar in accordance with sections 359c(b)(2) and 359e(b), 
     including an increase in the tariff-rate quota for raw cane 
     sugar to accommodate the reassignment to imports; and
       ``(B) if there is still a shortage of sugar in the United 
     States market, and marketing of domestic sugar has been 
     maximized, the Secretary may increase the tariff-rate quota 
     for raw cane sugar if the further increase will not threaten 
     to result in the forfeiture of sugar pledged as collateral 
     for a loan under section 156 of the Federal Agriculture 
     Improvement and Reform Act of 1996 (7 U.S.C. 7272).''.
       (k) Period of Effectiveness.--Part VII of subtitle B of 
     title III of the Agricultural Adjustment Act of 1938 (7 
     U.S.C. 1359aa) (as amended by subsection (j)) is amended by 
     adding at the end the following:

     ``SEC. 359L. PERIOD OF EFFECTIVENESS.

       ``(a) In General.--This part shall be effective only for 
     the 2008 through 2012 crop years for sugar.
       ``(b) Transition.--The Secretary shall administer flexible 
     marketing allotments for sugar for the 2007 crop year for 
     sugar on the terms and conditions provided in this part as in 
     effect on the day before the date of enactment of this 
     section.''.

     SEC. 1404. STORAGE FACILITY LOANS.

       Section 1402(c) of the Farm Security and Rural Investment 
     Act of 2002 (7 U.S.C. 7971(c)) is amended--
       (1) in paragraph (1), by striking ``and'' at the end;
       (2) by redesignating paragraph (2) as paragraph (3);
       (3) by inserting after paragraph (1) the following:
       ``(2) not include any penalty for prepayment; and''; and
       (4) in paragraph (3) (as redesignated by paragraph (2)), by 
     inserting ``other'' after ``on such''.

     SEC. 1405. COMMODITY CREDIT CORPORATION STORAGE PAYMENTS.

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

     ``SEC. 167. COMMODITY CREDIT CORPORATION STORAGE PAYMENTS.

       ``(a) Initial Crop Years.--Notwithstanding any other 
     provision of law, for each of the 2008 through 2011 crop 
     years, the Commodity Credit Corporation shall establish rates 
     for the storage of forfeited sugar in an amount that is not 
     less than--
       ``(1) in the case of refined sugar, 15 cents per 
     hundredweight of refined sugar per month; and
       ``(2) in the case of raw cane sugar, 10 cents per 
     hundredweight of raw cane sugar per month.
       ``(b) Subsequent Crop Years.--For each of the 2012 and 
     subsequent crop years, the Commodity Credit Corporation shall 
     establish rates for the storage of forfeited sugar in the 
     same manner as was used on the day before the date of 
     enactment of this section.''.

                           Subtitle E--Dairy

     SEC. 1501. DAIRY PRODUCT PRICE SUPPORT PROGRAM.

       (a) Definition of Net Removals.--In this section, the term 
     ``net removals'' means--
       (1) the sum of--
       (A) the quantity of a product described in subsection (b) 
     purchased by the Commodity Credit Corporation under this 
     section; and
       (B) the quantity of the product exported under section 153 
     of the Food Security Act of 1985 (15 U.S.C. 713a-14); less
       (2) the quantity of the product sold for unrestricted use 
     by the Commodity Credit Corporation.
       (b) Support Activities.--During the period beginning on 
     January 1, 2008, and ending December 31, 2012, the Secretary 
     shall support the price of cheddar cheese, butter, and nonfat 
     dry milk through the purchase of such products made from milk 
     produced in the United States.
       (c) Purchase Price.--To carry out subsection (b) during the 
     period specified in that subsection, the Secretary shall 
     purchase--
       (1) cheddar cheese in blocks at not less than $1.13 per 
     pound;
       (2) cheddar cheese in barrels at not less than $1.10 per 
     pound;
       (3) butter at not less than $1.05 per pound; and
       (4) nonfat dry milk at not less than $0.80 per pound.
       (d) Temporary Price Adjustment to Avoid Excess 
     Inventories.--
       (1) Adjustments authorized.--The Secretary may adjust the 
     minimum purchase prices established under subsection (c) only 
     as permitted under this subsection.
       (2) Cheese inventories in excess of 200,000,000 pounds.--If 
     net removals for a period of 12 consecutive months exceed 
     200,000,000 pounds of cheese, but do not exceed 400,000,000 
     pounds, the Secretary may reduce the purchase prices under 
     paragraphs (1) and (2) of subsection (c) during the 
     immediately following month by not more than 10 cents per 
     pound.
       (3) Cheese inventories in excess of 400,000,000 pounds.--If 
     net removals for a period of 12 consecutive months exceed 
     400,000,000 pounds of cheese, the Secretary may reduce the 
     purchase prices under paragraphs (1) and (2) of subsection 
     (c) during the immediately following month by not more than 
     20 cents per pound.
       (4) Butter inventories in excess of 450,000,000 pounds.--If 
     net removals for a period of 12 consecutive months exceed 
     450,000,000 pounds of butter, but do not exceed 650,000,000 
     pounds, the Secretary may reduce the purchase price under 
     subsection (c)(3) during the immediately following month by 
     not more than 10 cents per pound.
       (5) Butter inventories in excess of 650,000,000 pounds.--If 
     net removals for a period of 12 consecutive months exceed 
     650,000,000 pounds of butter, the Secretary may reduce the 
     purchase price under subsection (c)(3) during the immediately 
     following month by not more than 20 cents per pound.
       (6) Nonfat dry milk inventories in excess of 600,000,000 
     pounds.--If net removals for a period of 12 consecutive 
     months exceed 600,000,000 pounds of nonfat dry milk, but do 
     not exceed 800,000,000 pounds, the Secretary may reduce the 
     purchase price under subsection (c)(4) during the immediately 
     following month by not more than 5 cents per pound.
       (7) Nonfat dry milk inventories in excess of 800,000,000 
     pounds.--If net removals for a period of 12 consecutive 
     months exceed 800,000,000 pounds of nonfat dry milk, the 
     Secretary may reduce the purchase price under subsection 
     (c)(4) during the immediately following month by not more 
     than 10 cents per pound.
       (e) Uniform Purchase Price.--The prices that the Secretary 
     pays for cheese, butter, or nonfat dry milk, respectively, 
     under subsection (b) shall be uniform for all regions of the 
     United States.
       (f) Sales From Inventories.--In the case of each commodity 
     specified in subsection (c) that is available for 
     unrestricted use in the inventory of the Commodity Credit 
     Corporation, the Secretary may sell the commodity at the 
     market prices prevailing for that commodity at the time of 
     sale, except that the sale price may not be less than 110 
     percent of the minimum purchase price specified in subsection 
     (c) for that commodity.

     SEC. 1502. DAIRY FORWARD PRICING PROGRAM.

       (a) Program Required.--The Secretary shall establish a 
     program under which milk producers

[[Page H3429]]

     and cooperative associations of producers are authorized to 
     voluntarily enter into forward price contracts with milk 
     handlers.
       (b) Minimum Milk Price Requirements.--Payments made by milk 
     handlers to milk producers and cooperative associations of 
     producers, and prices received by milk producers and 
     cooperative associations, in accordance with the terms of a 
     forward price contract authorized by subsection (a), shall be 
     treated as satisfying--
       (1) all uniform and minimum milk price requirements of 
     subparagraphs (B) and (F) of paragraph (5) of section 8c of 
     the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted 
     with amendments by the Agricultural Marketing Agreement Act 
     of 1937; and
       (2) the total payment requirement of subparagraph (C) of 
     that paragraph.
       (c) Milk Covered by Program.--
       (1) Covered milk.--The program shall apply only with 
     respect to the marketing of federally regulated milk that--
       (A) is not classified as Class I milk or otherwise intended 
     for fluid use; and
       (B) is in the current of interstate or foreign commerce or 
     directly burdens, obstructs, or affects interstate or foreign 
     commerce in federally regulated milk.
       (2) Relation to class i milk.--To assist milk handlers in 
     complying with paragraph (1)(A) without having to segregate 
     or otherwise individually track the source and disposition of 
     milk, a milk handler may allocate milk receipts from 
     producers, cooperatives, and other sources that are not 
     subject to a forward contract to satisfy the obligations of 
     the handler with regard to Class I milk usage.
       (d) Voluntary Program.--
       (1) In general.--A milk handler may not require 
     participation in a forward pricing contract as a condition of 
     the handler receiving milk from a producer or cooperative 
     association of producers.
       (2) Pricing.--A producer or cooperative association 
     described in paragraph (1) may continue to have their milk 
     priced in accordance with the minimum payment provisions of 
     the Federal milk marketing order.
       (3) Complaints.--
       (A) In general.--The Secretary shall investigate complaints 
     made by producers or cooperative associations of coercion by 
     handlers to enter into forward contracts.
       (B) Action.--If the Secretary finds evidence of coercion, 
     the Secretary shall take appropriate action.
       (e) Duration.--
       (1) New contracts.--No forward price contract may be 
     entered into under the program established under this section 
     after September 30, 2012.
       (2) Application.--No forward contract entered into under 
     the program may extend beyond September 30, 2015.

     SEC. 1503. DAIRY EXPORT INCENTIVE PROGRAM.

       (a) Extension.--Section 153(a) of the Food Security Act of 
     1985 (15 U.S.C. 713a-14(a)) is amended by striking ``2007'' 
     and inserting ``2012''.
       (b) Compliance With Trade Agreements.--Section 153 of the 
     Food Security Act of 1985 (15 U.S.C. 713a-14) is amended--
       (1) in subsection (c), by striking paragraph (3) and 
     inserting the following:
       ``(3) the maximum volume of dairy product exports allowable 
     consistent with the obligations of the United States under 
     the Uruguay Round Agreements approved under section 101 of 
     the Uruguay Round Agreements Act (19 U.S.C. 3511) is exported 
     under the program each year (minus the volume sold under 
     section 1163 of this Act during that year), except to the 
     extent that the export of such a volume under the program 
     would, in the judgment of the Secretary, exceed the 
     limitations on the value permitted under subsection (f); 
     and''; and.
       (2) in subsection (f), by striking paragraph (1) and 
     inserting the following:
       ``(1) Funds and commodities.--Except as provided in 
     paragraph (2), the Commodity Credit Corporation shall in each 
     year use money and commodities for the program under this 
     section in the maximum amount consistent with the obligations 
     of the United States under the Uruguay Round Agreements 
     approved under section 101 of the Uruguay Round Agreements 
     Act (19 U.S.C. 3511), minus the amount expended under section 
     1163 of this Act during that year.''.

     SEC. 1504. REVISION OF FEDERAL MARKETING ORDER AMENDMENT 
                   PROCEDURES.

       Section 8c of the Agricultural Adjustment Act (7 U.S.C. 
     608c), reenacted with amendments by the Agricultural 
     Marketing Agreement Act of 1937, is amended by striking 
     subsection (17) and inserting the following:
       ``(17) Provisions applicable to amendments.--
       ``(A) Applicability to amendments.--The provisions of this 
     section and section 8d applicable to orders shall be 
     applicable to amendments to orders.
       ``(B) Supplemental rules of practice.--
       ``(i) In general.--Not later than 60 days after the date of 
     enactment of this subparagraph, the Secretary shall issue, 
     using informal rulemaking, supplemental rules of practice to 
     define guidelines and timeframes for the rulemaking process 
     relating to amendments to orders.
       ``(ii) Issues.--At a minimum, the supplemental rules of 
     practice shall establish--

       ``(I) proposal submission requirements;
       ``(II) pre-hearing information session specifications;
       ``(III) written testimony and data request requirements;
       ``(IV) public participation timeframes; and
       ``(V) electronic document submission standards.

       ``(iii) Effective date.--The supplemental rules of practice 
     shall take effect not later than 120 days after the date of 
     enactment of this subparagraph, as determined by the 
     Secretary.
       ``(C) Hearing timeframes.--
       ``(i) In general.--Not more than 30 days after the receipt 
     of a proposal for an amendment hearing regarding a milk 
     marketing order, the Secretary shall--

       ``(I) issue a notice providing an action plan and expected 
     timeframes for completion of the hearing not more than 120 
     days after the date of the issuance of the notice;
       ``(II)(aa) issue a request for additional information to be 
     used by the Secretary in making a determination regarding the 
     proposal; and
       ``(bb) if the additional information is not provided to the 
     Secretary within the timeframe requested by the Secretary, 
     issue a denial of the request; or
       ``(III) issue a denial of the request.

       ``(ii) Requirement.--A post-hearing brief may be filed 
     under this paragraph not later than 60 days after the date of 
     an amendment hearing regarding a milk marketing order.
       ``(iii) Recommended decisions.--A recommended decision on a 
     proposed amendment to an order shall be issued not later than 
     90 days after the deadline for the submission of post-hearing 
     briefs.
       ``(iv) Final decisions.--A final decision on a proposed 
     amendment to an order shall be issued not later than 60 days 
     after the deadline for submission of comments and exceptions 
     to the recommended decision issued under clause (iii).
       ``(D) Industry assessments.--If the Secretary determines it 
     is necessary to improve or expedite rulemaking under this 
     subsection, the Secretary may impose an assessment on the 
     affected industry to supplement appropriated funds for the 
     procurement of service providers, such as court reporters.
       ``(E) Use of informal rulemaking.--The Secretary may use 
     rulemaking under section 553 of title 5, United States Code, 
     to amend orders, other than provisions of orders that 
     directly affect milk prices.
       ``(F) Avoiding duplication.--The Secretary shall not be 
     required to hold a hearing on any amendment proposed to be 
     made to a milk marketing order in response to an application 
     for a hearing on the proposed amendment if--
       ``(i) the application requesting the hearing is received by 
     the Secretary not later than 90 days after the date on which 
     the Secretary has announced the decision on a previously 
     proposed amendment to that order; and
       ``(ii) the 2 proposed amendments are essentially the same, 
     as determined by the Secretary.
       ``(G) Monthly feed and fuel costs for make allowances.--As 
     part of any hearing to adjust make allowances under marketing 
     orders commencing prior to September 30, 2012, the Secretary 
     shall--
       ``(i) determine the average monthly prices of feed and fuel 
     incurred by dairy producers in the relevant marketing area;
       ``(ii) consider the most recent monthly feed and fuel price 
     data available; and
       ``(iii) consider those prices in determining whether or not 
     to adjust make allowances.''.

     SEC. 1505. DAIRY INDEMNITY PROGRAM.

       Section 3 of Public Law 90-484 (7 U.S.C. 450l) is amended 
     by striking ``2007'' and inserting ``2012''.

     SEC. 1506. MILK INCOME LOSS CONTRACT PROGRAM.

       (a) Definitions.--In this section:
       (1) Class i milk.--The term ``Class I milk'' means milk 
     (including milk components) classified as Class I milk under 
     a Federal milk marketing order.
       (2) Eligible production.--The term ``eligible production'' 
     means milk produced by a producer in a participating State.
       (3) Federal milk marketing order.--The term ``Federal milk 
     marketing order'' means an order issued under section 8c of 
     the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted 
     with amendments by the Agricultural Marketing Agreement Act 
     of 1937.
       (4) Participating state.--The term ``participating State'' 
     means each State.
       (5) Producer.--The term ``producer'' means an individual or 
     entity that directly or indirectly (as determined by the 
     Secretary)--
       (A) shares in the risk of producing milk; and
       (B) makes contributions (including land, labor, management, 
     equipment, or capital) to the dairy farming operation of the 
     individual or entity that are at least commensurate with the 
     share of the individual or entity of the proceeds of the 
     operation.
       (b) Payments.--The Secretary shall offer to enter into 
     contracts with producers on a dairy farm located in a 
     participating State under which the producers receive 
     payments on eligible production.
       (c) Amount.--Payments to a producer under this section 
     shall be calculated by multiplying (as determined by the 
     Secretary)--
       (1) the payment quantity for the producer during the 
     applicable month established under subsection (e);
       (2) the amount equal to--
       (A) $16.94 per hundredweight, as adjusted under subsection 
     (d); less
       (B) the Class I milk price per hundredweight in Boston 
     under the applicable Federal milk marketing order; by
       (3)(A) for the period beginning October 1, 2007, and ending 
     September 30, 2008, 34 percent;
       (B) for the period beginning October 1, 2008, and ending 
     August 31, 2012, 45 percent; and
       (C) for the period beginning September 1, 2012, and 
     thereafter, 34 percent.
       (d) Payment Rate Adjustment for Feed Prices.--
       (1) Initial adjustment authority.--During the period 
     beginning on January 1, 2008, and ending on August 31, 2012, 
     if the National Average Dairy Feed Ration Cost for a month 
     during that period is greater than $7.35 per hundredweight, 
     the amount specified in subsection

[[Page H3430]]

     (c)(2)(A) used to determine the payment rate for that month 
     shall be increased by 45 percent of the percentage by which 
     the National Average Dairy Feed Ration Cost exceeds $7.35 per 
     hundredweight.
       (2) Subsequent adjustment authority.--For any month 
     beginning on or after September 1, 2012, if the National 
     Average Dairy Feed Ration Cost for the month is greater than 
     $9.50 per hundredweight, the amount specified in subsection 
     (c)(2)(A) used to determine the payment rate for that month 
     shall be increased by 45 percent of the percentage by which 
     the National Average Dairy Feed Ration Cost exceeds $9.50 per 
     hundredweight.
       (3) National average dairy feed ration cost.--For each 
     month, the Secretary shall calculate a National Average Dairy 
     Feed Ration Cost per hundredweight using the same procedures 
     (adjusted to a hundredweight basis) used to calculate the 
     feed components of the estimated price of 16% Mixed Dairy 
     Feed per pound noted on page 33 of the USDA March 2008 
     Agricultural Prices publication (including the data and 
     factors noted in footnote 4).
       (e) Payment Quantity.--
       (1) In general.--Subject to paragraph (2), the payment 
     quantity for a producer during the applicable month under 
     this section shall be equal to the quantity of eligible 
     production marketed by the producer during the month.
       (2) Limitation.--
       (A) In general.--The payment quantity for all producers on 
     a single dairy operation for which the producers receive 
     payments under subsection (b) shall not exceed--
       (i) for the period beginning October 1, 2007, and ending 
     September 30, 2008, 2,400,000 pounds;
       (ii) for the period beginning October 1, 2008, and ending 
     August 31, 2012, 2,985,000 pounds for each fiscal year; and
       (iii) effective beginning September 1, 2012, 2,400,000 
     pounds per fiscal year.
       (B) Standards.--For purposes of determining whether 
     producers are producers on separate dairy operations or a 
     single dairy operation, the Secretary shall apply the same 
     standards as were applied in implementing the dairy program 
     under section 805 of the Agriculture, Rural Development, Food 
     and Drug Administration, and Related Agencies Appropriations 
     Act, 2001 (as enacted into law by Public Law 106-387; 114 
     Stat. 1549A-50).
       (3) Reconstitution.--The Secretary shall ensure that a 
     producer does not reconstitute a dairy operation for the sole 
     purpose of receiving additional payments under this section.
       (f) Payments.--A payment under a contract under this 
     section shall be made on a monthly basis not later than 60 
     days after the last day of the month for which the payment is 
     made.
       (g) Signup.--The Secretary shall offer to enter into 
     contracts under this section during the period beginning on 
     the date that is 90 days after the date of enactment of this 
     Act and ending on September 30, 2012.
       (h) Duration of Contract.--
       (1) In general.--Except as provided in paragraph (2), any 
     contract entered into by producers on a dairy farm under this 
     section shall cover eligible production marketed by the 
     producers on the dairy farm during the period starting with 
     the first day of month the producers on the dairy farm enter 
     into the contract and ending on September 30, 2012.
       (2) Violations.--If a producer violates the contract, the 
     Secretary may--
       (A) terminate the contract and allow the producer to retain 
     any payments received under the contract; or
       (B) allow the contract to remain in effect and require the 
     producer to repay a portion of the payments received under 
     the contract based on the severity of the violation.

     SEC. 1507. DAIRY PROMOTION AND RESEARCH PROGRAM.

       (a) Extension of Dairy Promotion and Research Authority.--
     Section 113(e)(2) of the Dairy Production Stabilization Act 
     of 1983 (7 U.S.C. 4504(e)(2)) is amended by striking ``2007'' 
     and inserting ``2012''.
       (b) Definition of United States for Promotion Program.--
     Section 111 of the Dairy Production Stabilization Act of 1983 
     (7 U.S.C. 4502) is amended--
       (1) by striking subsection (l) and inserting the following:
       ``(l) the term `United States', when used in a geographical 
     sense, means all of the States, the District of Columbia, and 
     the Commonwealth of Puerto Rico;''; and
       (2) in subsection (m), by striking ``(as defined in 
     subsection (l))''.
       (c) Definition of United States for Research Program.--
     Section 130 of the Dairy Production Stabilization Act of 1983 
     (7 U.S.C. 4531)) is amended by striking paragraph (12) and 
     inserting the following:
       ``(12) the term `United States', when used in a 
     geographical sense, means all of the States, the District of 
     Columbia, and the Commonwealth of Puerto Rico.''.
       (d) Assessment Rate for Imported Dairy Products.--Section 
     113(g) of the Dairy Production Stabilization Act of 1983 (7 
     U.S.C. 4504(g)) is amended by striking paragraph (3) and 
     inserting the following:
       ``(3) Rate.--
       ``(A) In general.--The rate of assessment for milk produced 
     in the United States prescribed by the order shall be 15 
     cents per hundredweight of milk for commercial use or the 
     equivalent thereof, as determined by the Secretary.
       ``(B) Imported dairy products.--The rate of assessment for 
     imported dairy products prescribed by the order shall be 7.5 
     cents per hundredweight of milk for commercial use or the 
     equivalent thereof, as determined by the Secretary.''.
       (e) Time and Method of Importer Payments.--Section 
     113(g)(6) of the Dairy Production Stabilization Act of 1983 
     (7 U.S.C. 4504(g)(6)) is amended--
       (1) by striking subparagraph (B); and
       (2) by redesignating subparagraph (C) as subparagraph (B).
       (f) Refund of Assessments on Certain Imported Dairy 
     Products.--Section 113(g) of the Dairy Production 
     Stabilization Act of 1983 (7 U.S.C. 4504(g)) is amended by 
     adding at the end the following:
       ``(7) Refund of assessments on certain imported products.--
       ``(A) In general.--An importer shall be entitled to a 
     refund of any assessment paid under this subsection on 
     imported dairy products imported under a contract entered 
     into prior to the date of enactment of the Food, 
     Conservation, and Energy Act of 2008.
       ``(B) Expiration.--Refunds under subparagraph (A) shall 
     expire 1 year after the date of enactment of the Food, 
     Conservation, and Energy Act of 2008.''.

     SEC. 1508. REPORT ON DEPARTMENT OF AGRICULTURE REPORTING 
                   PROCEDURES FOR NONFAT DRY MILK.

       Not later than 90 days after the date of enactment of this 
     Act, the Secretary shall submit to the Committee on 
     Agriculture of the House of Representatives and the Committee 
     on Agriculture, Nutrition, and Forestry of the Senate a 
     report regarding Department of Agriculture reporting 
     procedures for nonfat dry milk and the impact of the 
     procedures on Federal milk marketing order minimum prices 
     during the period beginning on July 1, 2006, and ending on 
     the date of enactment of this Act.

     SEC. 1509. FEDERAL MILK MARKETING ORDER REVIEW COMMISSION.

       (a) Establishment.--Subject to the availability of 
     appropriations to carry out this section, the Secretary shall 
     establish a commission to be known as the ``Federal Milk 
     Marketing Order Review Commission'' (referred to in this 
     section as the ``commission''), which shall conduct a 
     comprehensive review and evaluation of--
       (1) the Federal milk marketing order system in effect on 
     the date of establishment of the commission; and
       (2) non-Federal milk marketing order systems.
       (b) Elements of Review and Evaluation.--As part of the 
     review and evaluation under subsection (a), the commission 
     shall consider legislative and regulatory options for--
       (1) ensuring that the competitiveness of dairy products 
     with other competing products in the marketplace is preserved 
     and enhanced;
       (2) enhancing the competitiveness of American dairy 
     producers in world markets;
       (3) ensuring the competitiveness and transparency in dairy 
     pricing;
       (4) streamlining and expediting the process by which 
     amendments to Federal milk market orders are adopted;
       (5) simplifying the Federal milk marketing order system;
       (6) evaluating whether the Federal milk marketing order 
     system serves the interests of dairy producers, consumers, 
     and dairy processors; and
       (7) evaluating the nutritional composition of milk, 
     including the potential benefits and costs of adjusting the 
     milk content standards.
       (c) Membership.--
       (1) Composition.--The commission shall consist of 14 
     members.
       (2) Members.--As soon as practicable after the date on 
     which funds are first made available to carry out this 
     section, the Secretary shall appoint members to the 
     commission according to the following requirements:
       (A) At least 1 member shall represent a national consumer 
     organization.
       (B) At least 4 members shall represent land-grant 
     universities or NLGCA Institutions (as defined in section 
     1404 of the National Agricultural Research, Extension, and 
     Teaching Policy Act of 1977 (7 U.S.C. 3103)) with accredited 
     dairy economic programs, with at least 2 of those members 
     being experts in the field of economics.
       (C) At least 1 member shall represent the food and beverage 
     retail sector.
       (D) 4 dairy producers and 4 dairy processors, appointed so 
     as to balance geographical distribution of milk production 
     and dairy processing, reflect all segments of dairy 
     processing, and represent all regions of the United States 
     equitably, including States that operate outside of a Federal 
     milk marketing order.
       (3) Chair.--The commission shall elect 1 of the appointed 
     members of the commission to serve as chairperson for the 
     duration of the proceedings of the commission.
       (4) Vacancy.--Any vacancy occurring before the termination 
     of the commission shall be filled in the same manner as the 
     original appointment.
       (5) Compensation.--Members of the commission shall serve 
     without compensation, but shall be reimbursed by the 
     Secretary from existing budget authority for necessary and 
     reasonable expenses incurred in the performance of the duties 
     of the commission.
       (d) Report.--
       (1) In general.--Not later than 2 years after the date of 
     the first meeting of the commission, the commission shall 
     submit to Congress and the Secretary a report describing the 
     results of the review and evaluation conducted under this 
     section, including such recommendations regarding the 
     legislative and regulatory options considered under 
     subsection (b) as the commission considers to be appropriate.
       (2) Opinions.--The report findings shall reflect, to the 
     maximum extent practicable, a consensus opinion of the 
     commission members, but the report may include majority and 
     minority findings regarding those matters for which consensus 
     was not reached.
       (e) Advisory Nature.--The commission is wholly advisory in 
     nature, and the recommendations of the commission are 
     nonbinding.
       (f) No Effect on Existing Programs.--The Secretary shall 
     not allow the existence of the commission to impede, delay, 
     or otherwise affect

[[Page H3431]]

     any decisionmaking process of the Department of Agriculture, 
     including any rulemaking procedures planned, proposed, or 
     near completion.
       (g) Administrative Assistance.--The Secretary shall provide 
     administrative support to the commission, and expend to carry 
     out this section such funds as necessary from budget 
     authority available to the Secretary.
       (h) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.
       (i) Termination.--The commission shall terminate effective 
     on the date of the submission of the report under subsection 
     (d).

     SEC. 1510. MANDATORY REPORTING OF DAIRY COMMODITIES.

       (a) Electronic Reporting.--Section 273 of the Agricultural 
     Marketing Act of 1946 (7 U.S.C. 1637b) is amended--
       (1) by redesignating subsection (d) as subsection (e); and
       (2) by inserting after subsection (c) the following:
       ``(d) Electronic Reporting.--
       ``(1) In general.--Subject to the availability of funds 
     under paragraph (3), the Secretary shall establish an 
     electronic reporting system to carry out this section.
       ``(2) Frequency of reports.--After the establishment of the 
     electronic reporting system in accordance with paragraph (1), 
     the Secretary shall increase the frequency of the reports 
     required under this section.
       ``(3) Authorization of appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     carry out this subsection.''.
       (b) Quarterly Audits.--Section 273(c) of the Agricultural 
     Marketing Act of 1946 (7 U.S.C. 1637b(c)) is amended by 
     striking paragraph (3) and inserting the following:
       ``(3) Verification.--
       ``(A) In general.--The Secretary shall take such actions as 
     the Secretary considers necessary to verify the accuracy of 
     the information submitted or reported under this subtitle.
       ``(B) Quarterly audits.--The Secretary shall quarterly 
     conduct an audit of information submitted or reported under 
     this subtitle and compare such information with other related 
     dairy market statistics.''.

                       Subtitle F--Administration

     SEC. 1601. ADMINISTRATION GENERALLY.

       (a) Use of Commodity Credit Corporation.--Except as 
     otherwise provided in this title, the Secretary shall use the 
     funds, facilities, and authorities of the Commodity Credit 
     Corporation to carry out this title.
       (b) Determinations by Secretary.--A determination made by 
     the Secretary under this title shall be final and conclusive.
       (c) Regulations.--
       (1) In general.--Except as otherwise provided in this 
     subsection, not later than 90 days after the date of 
     enactment of this Act, the Secretary and the Commodity Credit 
     Corporation, as appropriate, shall promulgate such 
     regulations as are necessary to implement this title and the 
     amendments made by this title.
       (2) Procedure.--The promulgation of the regulations and 
     administration of this title and the amendments made by this 
     title shall be made without regard to--
       (A) chapter 35 of title 44, United States Code (commonly 
     known as the ``Paperwork Reduction Act'');
       (B) the Statement of Policy of the Secretary of Agriculture 
     effective July 24, 1971 (36 Fed. Reg. 13804), relating to 
     notices of proposed rulemaking and public participation in 
     rulemaking; and
       (C) the notice and comment provisions of section 553 of 
     title 5, United States Code.
       (3) Congressional review of agency rulemaking.--In carrying 
     out this subsection, the Secretary shall use the authority 
     provided under section 808 of title 5, United States Code.
       (4) Interim regulations.--Notwithstanding paragraphs (1) 
     and (2), the Secretary shall implement the amendments made by 
     sections 1603 and 1604 for the 2009 crop, fiscal, or program 
     year, as appropriate, through the promulgation of an interim 
     rule.
       (d) Adjustment Authority Related to Trade Agreements 
     Compliance.--
       (1) Required determination; adjustment.--If the Secretary 
     determines that expenditures under this title that are 
     subject to the total allowable domestic support levels under 
     the Uruguay Round Agreements (as defined in section 2 of the 
     Uruguay Round Agreements Act (19 U.S.C. 3501)) will exceed 
     such allowable levels for any applicable reporting period, 
     the Secretary shall, to the maximum extent practicable, make 
     adjustments in the amount of such expenditures during that 
     period to ensure that such expenditures do not exceed such 
     allowable levels.
       (2) Congressional notification.--Before making any 
     adjustment under paragraph (1), the Secretary shall submit to 
     the Committee on Agriculture of the House of Representatives 
     or the Committee on Agriculture, Nutrition, and Forestry of 
     the Senate a report describing the determination made under 
     that paragraph and the extent of the adjustment to be made.
       (e) Treatment of Advance Payment Option.--Section 1601(d) 
     of the Farm Security and Rural Investment Act of 2002 (7 
     U.S.C. 7991(d)) is amended--
       (1) in paragraph (1), by striking ``and'' at the end;
       (2) in paragraph (2), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(3) the advance payment of direct payments and counter-
     cyclical payments under title I of the Food, Conservation, 
     and Energy Act of 2008.''.

     SEC. 1602. SUSPENSION OF PERMANENT PRICE SUPPORT AUTHORITY.

       (a) Agricultural Adjustment Act of 1938.--The following 
     provisions of the Agricultural Adjustment Act of 1938 shall 
     not be applicable to the 2008 through 2012 crops of covered 
     commodities, peanuts, and sugar and shall not be applicable 
     to milk during the period beginning on the date of enactment 
     of this Act through December 31, 2012:
       (1) Parts II through V of subtitle B of title III (7 U.S.C. 
     1326 et seq.).
       (2) In the case of upland cotton, section 377 (7 U.S.C. 
     1377).
       (3) Subtitle D of title III (7 U.S.C. 1379a et seq.).
       (4) Title IV (7 U.S.C. 1401 et seq.).
       (b) Agricultural Act of 1949.--The following provisions of 
     the Agricultural Act of 1949 shall not be applicable to the 
     2008 through 2012 crops of covered commodities, peanuts, and 
     sugar and shall not be applicable to milk during the period 
     beginning on the date of enactment of this Act and through 
     December 31, 2012:
       (1) Section 101 (7 U.S.C. 1441).
       (2) Section 103(a) (7 U.S.C. 1444(a)).
       (3) Section 105 (7 U.S.C. 1444b).
       (4) Section 107 (7 U.S.C. 1445a).
       (5) Section 110 (7 U.S.C. 1445e).
       (6) Section 112 (7 U.S.C. 1445g).
       (7) Section 115 (7 U.S.C. 1445k).
       (8) Section 201 (7 U.S.C. 1446).
       (9) Title III (7 U.S.C. 1447 et seq.).
       (10) Title IV (7 U.S.C. 1421 et seq.), other than sections 
     404, 412, and 416 (7 U.S.C. 1424, 1429, and 1431).
       (11) Title V (7 U.S.C. 1461 et seq.).
       (12) Title VI (7 U.S.C. 1471 et seq.).
       (c) Suspension of Certain Quota Provisions.--The joint 
     resolution entitled ``A joint resolution relating to corn and 
     wheat marketing quotas under the Agricultural Adjustment Act 
     of 1938, as amended'', approved May 26, 1941 (7 U.S.C. 1330 
     and 1340), shall not be applicable to the crops of wheat 
     planted for harvest in the calendar years 2008 through 2012.

     SEC. 1603. PAYMENT LIMITATIONS.

       (a) Extension of Limitations.--Sections 1001 and 1001C(a) 
     of the Food Security Act of 1985 (7 U.S.C. 1308, 1308-3(a)) 
     are amended by striking ``Farm Security and Rural Investment 
     Act of 2002'' each place it appears and inserting ``Food, 
     Conservation, and Energy Act of 2008''.
       (b) Revision of Limitations.--
       (1) Definitions.--Section 1001(a) of the Food Security Act 
     of 1985 (7 U.S.C. 1308(a)) is amended--
       (A) in the matter preceding paragraph (1), by inserting 
     ``through section 1001F''after ``section'';
       (B) by striking paragraph (2) and redesignating paragraph 
     (3) as paragraph (5); and
       (C) by inserting after paragraph (1) the following:
       ``(2) Family member.--The term `family member' means a 
     person to whom a member in the farming operation is related 
     as lineal ancestor, lineal descendant, sibling, spouse, or 
     otherwise by marriage.
       ``(3) Legal entity.--The term `legal entity' means an 
     entity that is created under Federal or State law and that--
       ``(A) owns land or an agricultural commodity; or
       ``(B) produces an agricultural commodity.
       ``(4) Person.--The term `person' means a natural person, 
     and does not include a legal entity.''.
       (2) Limitation on direct payments and counter-cyclical 
     payments.--Section 1001 of the Food Security Act of 1985 (7 
     U.S.C. 1308) is amended by striking subsections (b), (c), and 
     (d) and inserting the following:
       ``(b) Limitation on Direct Payments, Counter-Cyclical 
     Payments, and ACRE Payments for Covered Commodities (other 
     Than Peanuts).--
       ``(1) Direct payments.--The total amount of direct payments 
     received, directly or indirectly, by a person or legal entity 
     (except a joint venture or a general partnership) for any 
     crop year under subtitle A of title I of the Food, 
     Conservation, and Energy Act of 2008 for 1 or more covered 
     commodities (except for peanuts) may not exceed--
       ``(A) in the case of a person or legal entity that does not 
     participate in the average crop revenue election program 
     under section 1105 of that Act, $40,000; or
       ``(B) in the case of a person or legal entity that 
     participates in the average crop revenue election program 
     under section 1105 of that Act, an amount equal to--
       ``(i) the payment limit specified in subparagraph (A); less
       ``(ii) the amount of the reduction in direct payments under 
     section 1105(a)(1) of that Act.
       ``(2) Counter-cyclical payments.--In the case of a person 
     or legal entity (except a joint venture or a general 
     partnership) that does not participate in the average crop 
     revenue election program under section 1105 of the Food, 
     Conservation, and Energy Act of 2008, the total amount of 
     counter-cyclical payments received, directly or indirectly, 
     by the person or legal entity for any crop year under 
     subtitle A of title I of that Act for 1 or more covered 
     commodities (except for peanuts) may not exceed $65,000.
       ``(3) ACRE and counter-cyclical payments.--In the case of a 
     person or legal entity (except a joint venture or a general 
     partnership) that participates in the average crop revenue 
     election program under section 1105 of the Food, 
     Conservation, and Energy Act of 2008, the total amount of 
     average crop revenue election payments and counter-cyclical 
     payments received, directly or indirectly, by the person or 
     legal entity for any crop year for 1 or more covered 
     commodities (except for peanuts) may not exceed the sum of--
       ``(A) $65,000; and
       ``(B) the amount by which the direct payment limitation is 
     reduced under paragraph (1)(B).
       ``(c) Limitation on Direct Payments, Counter-Cyclical 
     Payments, and ACRE Payments for Peanuts.--

[[Page H3432]]

       ``(1) Direct payments.--The total amount of direct payments 
     received, directly or indirectly, by a person or legal entity 
     (except a joint venture or a general partnership) for any 
     crop year under subtitle C of title I of the Food, 
     Conservation, and Energy Act of 2008 for peanuts may not 
     exceed--
       ``(A) in the case of a person or legal entity that does not 
     participate in the average crop revenue election program 
     under section 1105 of that Act, $40,000; or
       ``(B) in the case of a person or legal entity that 
     participates in the average crop revenue election program 
     under section 1105 of that Act, an amount equal to--
       ``(i) the payment limit specified in subparagraph (A); less
       ``(ii) the amount of the reduction in direct payments under 
     section 1105(a)(1) of that Act.
       ``(2) Counter-cyclical payments.--In the case of a person 
     or legal entity (except a joint venture or a general 
     partnership) that does not participate in the average crop 
     revenue election program under section 1105 of the Food, 
     Conservation, and Energy Act of 2008, the total amount of 
     counter-cyclical payments received, directly or indirectly, 
     by the person or legal entity for any crop year under 
     subtitle C of title I of that Act for peanuts may not exceed 
     $65,000.
       ``(3) ACRE and counter-cyclical payments.--In the case of a 
     person or legal entity (except a joint venture or a general 
     partnership) that participates in the average crop revenue 
     election program under section 1105 of the Food, 
     Conservation, and Energy Act of 2008, the total amount of 
     average crop revenue election payments received, directly or 
     indirectly, by the person or legal entity for any crop year 
     for peanuts may not exceed the sum of--
       ``(A) $65,000; and
       ``(B) the amount by which the direct payment limitation is 
     reduced under paragraph (1)(B).
       ``(d) Limitation on Applicability.--Nothing in this section 
     authorizes any limitation on any benefit associated with the 
     marketing assistance loan program or the loan deficiency 
     payment program under title I of the Food, Conservation, and 
     Energy Act of 2008.''.
       (3) Direct attribution.--Section 1001 of the Food Security 
     Act of 1985 (7 U.S.C. 1308) is amended--
       (A) by striking subsections (e) and (f) and redesignating 
     subsection (g) as subsection (h); and
       (B) by inserting after subsection (d) the following:
       ``(e) Attribution of Payments.--
       ``(1) In general.--In implementing subsections (b) and (c) 
     and a program described in paragraphs (1)(C) and (2)(B) of 
     section 1001D(b), the Secretary shall issue such regulations 
     as are necessary to ensure that the total amount of payments 
     are attributed to a person by taking into account the direct 
     and indirect ownership interests of the person in a legal 
     entity that is eligible to receive the payments.
       ``(2) Payments to a person.--Each payment made directly to 
     a person shall be combined with the pro rata interest of the 
     person in payments received by a legal entity in which the 
     person has a direct or indirect ownership interest unless the 
     payments of the legal entity have been reduced by the pro 
     rata share of the person.
       ``(3) Payments to a legal entity.--
       ``(A) In general.--Each payment made to a legal entity 
     shall be attributed to those persons who have a direct or 
     indirect ownership interest in the legal entity unless the 
     payment to the legal entity has been reduced by the pro rata 
     share of the person.
       ``(B) Attribution of payments.--
       ``(i) Payment limits.--Except as provided in clause (ii), 
     payments made to a legal entity shall not exceed the amounts 
     specified in subsections (b) and (c).
       ``(ii) Exception for joint ventures and general 
     partnerships.--Payments made to a joint venture or a general 
     partnership shall not exceed, for each payment specified in 
     subsections (b) and (c), the amount determined by multiplying 
     the maximum payment amount specified in subsections (b) and 
     (c) by the number of persons and legal entities (other than 
     joint ventures and general partnerships) that comprise the 
     ownership of the joint venture or general partnership.
       ``(iii) Reduction.--Payments made to a legal entity shall 
     be reduced proportionately by an amount that represents the 
     direct or indirect ownership in the legal entity by any 
     person or legal entity that has otherwise exceeded the 
     applicable maximum payment limitation.
       ``(4) 4 levels of attribution for embedded legal 
     entities.--
       ``(A) In general.--Attribution of payments made to legal 
     entities shall be traced through 4 levels of ownership in 
     legal entities.
       ``(B) First level.--Any payments made to a legal entity (a 
     first-tier legal entity) that is owned in whole or in part by 
     a person shall be attributed to the person in an amount that 
     represents the direct ownership in the first-tier legal 
     entity by the person.
       ``(C) Second level.--
       ``(i) In general.--Any payments made to a first-tier legal 
     entity that is owned (in whole or in part) by another legal 
     entity (a second-tier legal entity) shall be attributed to 
     the second-tier legal entity in proportion to the ownership 
     of the second-tier legal entity in the first-tier legal 
     entity.
       ``(ii) Ownership by a person.--If the second-tier legal 
     entity is owned (in whole or in part) by a person, the amount 
     of the payment made to the first-tier legal entity shall be 
     attributed to the person in the amount that represents the 
     indirect ownership in the first-tier legal entity by the 
     person.
       ``(D) Third and fourth levels.--
       ``(i) In general.--Except as provided in clause (ii), the 
     Secretary shall attribute payments at the third and fourth 
     tiers of ownership in the same manner as specified in 
     subparagraph (C).
       ``(ii) Fourth-tier ownership.--If the fourth-tier of 
     ownership is that of a fourth-tier legal entity and not that 
     of a person, the Secretary shall reduce the amount of the 
     payment to be made to the first-tier legal entity in the 
     amount that represents the indirect ownership in the first-
     tier legal entity by the fourth-tier legal entity.
       ``(f) Special Rules.--
       ``(1) Minor children.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     payments received by a child under the age of 18 shall be 
     attributed to the parents of the child.
       ``(B) Regulations.--The Secretary shall issue regulations 
     specifying the conditions under which payments received by a 
     child under the age of 18 will not be attributed to the 
     parents of the child.
       ``(2) Marketing cooperatives.--Subsections (b) and (c) 
     shall not apply to a cooperative association of producers 
     with respect to commodities produced by the members of the 
     association that are marketed by the association on behalf of 
     the members of the association but shall apply to the 
     producers as persons.
       ``(3) Trusts and estates.--
       ``(A) In general.--With respect to irrevocable trusts and 
     estates, the Secretary shall administer this section through 
     section 1001F in such manner as the Secretary determines will 
     ensure the fair and equitable treatment of the beneficiaries 
     of the trusts and estates.
       ``(B) Irrevocable trust.--
       ``(i) In general.--In order for a trust to be considered an 
     irrevocable trust, the terms of the trust agreement shall 
     not--

       ``(I) allow for modification or termination of the trust by 
     the grantor;
       ``(II) allow for the grantor to have any future, 
     contingent, or remainder interest in the corpus of the trust; 
     or
       ``(III) except as provided in clause (ii), provide for the 
     transfer of the corpus of the trust to the remainder 
     beneficiary in less than 20 years beginning on the date the 
     trust is established.

       ``(ii) Exception.--Clause (i)(III) shall not apply in a 
     case in which the transfer is--

       ``(I) contingent on the remainder beneficiary achieving at 
     least the age of majority; or
       ``(II) contingent on the death of the grantor or income 
     beneficiary.

       ``(C) Revocable trust.--For the purposes of this section 
     through section 1001F, a revocable trust shall be considered 
     to be the same person as the grantor of the trust.
       ``(4) Cash rent tenants.--
       ``(A) Definition.--In this paragraph, the term `cash rent 
     tenant' means a person or legal entity that rents land--
       ``(i) for cash; or
       ``(ii) for a crop share guaranteed as to the amount of the 
     commodity to be paid in rent.
       ``(B) Restriction.--A cash rent tenant who makes a 
     significant contribution of active personal management, but 
     not of personal labor, with respect to a farming operation 
     shall be eligible to receive a payment described in 
     subsection (b) or (c) only if the tenant makes a significant 
     contribution of equipment to the farming operation.
       ``(5) Federal agencies.--
       ``(A) In general.--Notwithstanding subsection (d), a 
     Federal agency shall not be eligible to receive any payment, 
     benefit, or loan under title I of the Food, Conservation, and 
     Energy Act of 2008 or title XII of this Act.
       ``(B) Land rental.--A lessee of land owned by a Federal 
     agency may receive a payment described in subsection (b), 
     (c), or (d) if the lessee otherwise meets all applicable 
     criteria.
       ``(6) State and local governments.--
       ``(A) In general.--Notwithstanding subsection (d), except 
     as provided in subsection (g), a State or local government, 
     or political subdivision or agency of the government, shall 
     not be eligible to receive any payment, benefit, or loan 
     under title I of the Food, Conservation, and Energy Act of 
     2008 or title XII of this Act.
       ``(B) Tenants.--A lessee of land owned by a State or local 
     government, or political subdivision or agency of the 
     government, may receive payments described in subsections 
     (b), (c), and (d) if the lessee otherwise meets all 
     applicable criteria.
       ``(7) Changes in farming operations.--
       ``(A) In general.--In the administration of this section 
     through section 1001F, the Secretary may not approve any 
     change in a farming operation that otherwise will increase 
     the number of persons to which the limitations under this 
     section are applied unless the Secretary determines that the 
     change is bona fide and substantive.
       ``(B) Family members.--The addition of a family member to a 
     farming operation under the criteria set out in section 1001A 
     shall be considered a bona fide and substantive change in the 
     farming operation.
       ``(8) Death of owner.--
       ``(A) In general.--If any ownership interest in land or a 
     commodity is transferred as the result of the death of a 
     program participant, the new owner of the land or commodity 
     may, if the person is otherwise eligible to participate in 
     the applicable program, succeed to the contract of the prior 
     owner and receive payments subject to this section without 
     regard to the amount of payments received by the new owner.
       ``(B) Limitations on prior owner.--Payments made under this 
     paragraph shall not exceed the amount to which the previous 
     owner was entitled to receive under the terms of the contract 
     at the time of the death of the prior owner.
       ``(g) Public Schools.--
       ``(1) In general.--Notwithstanding subsection (f)(6)(A), a 
     State or local government, or political subdivision or agency 
     of the government, shall be eligible, subject to the 
     limitation in paragraph (2), to receive a payment described 
     in subsection (b) or (c) for land owned by the State or local 
     government, or political subdivision or

[[Page H3433]]

     agency of the government, that is used to maintain a public 
     school.
       ``(2) Limitation.--
       ``(A) In general.--For each State, the total amount of 
     payments described in subsections (b) and (c) that are 
     received collectively by the State and local government and 
     all political subdivisions or agencies of those governments 
     shall not exceed $500,000.
       ``(B) Exception.--The limitation in subparagraph (A) shall 
     not apply to States with a population of less than 
     1,500,000.''.
       (c) Repeal of 3-Entity Rule.--Section 1001A of the Food 
     Security Act of 1985 (7 U.S.C. 1308-1) is amended--
       (1) in the section heading, by striking ``PREVENTION OF 
     CREATION OF ENTITIES TO QUALIFY AS SEPARATE PERSONS'' and 
     inserting ``NOTIFICATION OF INTERESTS''; and
       (2) by striking subsection (a) and inserting the following:
       ``(a) Notification of Interests.--To facilitate 
     administration of section 1001 and this section, each person 
     or legal entity receiving payments described in subsections 
     (b) and (c) of section 1001 as a separate person or legal 
     entity shall separately provide to the Secretary, at such 
     times and in such manner as prescribed by the Secretary--
       ``(1) the name and social security number of each person, 
     or the name and taxpayer identification number of each legal 
     entity, that holds or acquires an ownership interest in the 
     separate person or legal entity; and
       ``(2) the name and taxpayer identification number of each 
     legal entity in which the person or legal entity holds an 
     ownership interest.''.
       (d) Amendment for Consistency.--Section 1001A of the Food 
     Security Act of 1985 (7 U.S.C. 1308-1) is amended by striking 
     subsection (b) and inserting the following:
       ``(b) Actively Engaged.--
       ``(1) In general.--To be eligible to receive a payment 
     described in subsection (b) or (c) of section 1001, a person 
     or legal entity shall be actively engaged in farming with 
     respect to a farming operation as provided in this subsection 
     or subsection (c).
       ``(2) Classes actively engaged.--Except as provided in 
     subsections (c) and (d)--
       ``(A) a person (including a person participating in a 
     farming operation as a partner in a general partnership, a 
     participant in a joint venture, a grantor of a revocable 
     trust, or a participant in a similar entity, as determined by 
     the Secretary) shall be considered to be actively engaged in 
     farming with respect to a farming operation if--
       ``(i) the person makes a significant contribution (based on 
     the total value of the farming operation) to the farming 
     operation of--

       ``(I) capital, equipment, or land; and
       ``(II) personal labor or active personal management;

       ``(ii) the person's share of the profits or losses from the 
     farming operation is commensurate with the contributions of 
     the person to the farming operation; and
       ``(iii) the contributions of the person are at risk;
       ``(B) a legal entity that is a corporation, joint stock 
     company, association, limited partnership, charitable 
     organization, or other similar entity determined by the 
     Secretary (including any such legal entity participating in 
     the farming operation as a partner in a general partnership, 
     a participant in a joint venture, a grantor of a revocable 
     trust, or as a participant in a similar legal entity as 
     determined by the Secretary) shall be considered as actively 
     engaged in farming with respect to a farming operation if--
       ``(i) the legal entity separately makes a significant 
     contribution (based on the total value of the farming 
     operation) of capital, equipment, or land;
       ``(ii) the stockholders or members collectively make a 
     significant contribution of personal labor or active personal 
     management to the operation; and
       ``(iii) the standards provided in clauses (ii) and (iii) of 
     subparagraph (A), as applied to the legal entity, are met by 
     the legal entity;
       ``(C) if a legal entity that is a general partnership, 
     joint venture, or similar entity, as determined by the 
     Secretary, separately makes a significant contribution (based 
     on the total value of the farming operation involved) of 
     capital, equipment, or land, and the standards provided in 
     clauses (ii) and (iii) of subparagraph (A), as applied to the 
     legal entity, are met by the legal entity, the partners or 
     members making a significant contribution of personal labor 
     or active personal management shall be considered to be 
     actively engaged in farming with respect to the farming 
     operation involved; and
       ``(D) in making determinations under this subsection 
     regarding equipment and personal labor, the Secretary shall 
     take into consideration the equipment and personal labor 
     normally and customarily provided by farm operators in the 
     area involved to produce program crops.
       ``(c) Special Classes Actively Engaged.--
       ``(1) Landowner.--A person or legal entity that is a 
     landowner contributing the owned land to a farming operation 
     shall be considered to be actively engaged in farming with 
     respect to the farming operation if--
       ``(A) the landowner receives rent or income for the use of 
     the land based on the production on the land or the operating 
     results of the operation; and
       ``(B) the person or legal entity meets the standards 
     provided in clauses (ii) and (iii) of subsection (b)(2)(A).
       ``(2) Adult family member.--If a majority of the 
     participants in a farming operation are family members, an 
     adult family member shall be considered to be actively 
     engaged in farming with respect to the farming operation if 
     the person--
       ``(A) makes a significant contribution, based on the total 
     value of the farming operation, of active personal management 
     or personal labor; and
       ``(B) with respect to such contribution, meets the 
     standards provided in clauses (ii) and (iii) of subsection 
     (b)(2)(A).
       ``(3) Sharecropper.--A sharecropper who makes a significant 
     contribution of personal labor to a farming operation shall 
     be considered to be actively engaged in farming with respect 
     to the farming operation if the contribution meets the 
     standards provided in clauses (ii) and (iii) of subsection 
     (b)(2)(A).
       ``(4) Growers of hybrid seed.--In determining whether a 
     person or legal entity growing hybrid seed under contract 
     shall be considered to be actively engaged in farming, the 
     Secretary shall not take into consideration the existence of 
     a hybrid seed contract.
       ``(5) Custom farming services.--
       ``(A) In general.--A person or legal entity receiving 
     custom farming services shall be considered separately 
     eligible for payment limitation purposes if the person or 
     legal entity is actively engaged in farming based on 
     subsection (b)(2) or paragraphs (1) through (4) of this 
     subsection.
       ``(B) Prohibition.--No other rules with respect to custom 
     farming shall apply.
       ``(6) Spouse.--If 1 spouse (or estate of a deceased spouse) 
     is determined to be actively engaged, the other spouse shall 
     be determined to have met the requirements of subsection 
     (b)(2)(A)(i)(II).
       ``(d) Classes Not Actively Engaged.--
       ``(1) Cash rent landlord.--A landlord contributing land to 
     a farming operation shall not be considered to be actively 
     engaged in farming with respect to the farming operation if 
     the landlord receives cash rent, or a crop share guaranteed 
     as to the amount of the commodity to be paid in rent, for the 
     use of the land.
       ``(2) Other persons and legal entities.--Any other person 
     or legal entity that the Secretary determines does not meet 
     the standards described in subsections (b)(2) and (c) shall 
     not be considered to be actively engaged in farming with 
     respect to a farming operation.''.
       (e) Denial of Program Benefits.--Section 1001B of the Food 
     Security Act of 1985 (7 U.S.C. 1308-2) is amended to read as 
     follows:

     ``SEC. 1001B. DENIAL OF PROGRAM BENEFITS.

       ``(a) 2-Year Denial of Program Benefits.--A person or legal 
     entity shall be ineligible to receive payments specified in 
     subsections (b) and (c) of section 1001 for the crop year, 
     and the succeeding crop year, in which the Secretary 
     determines that the person or legal entity--
       ``(1) failed to comply with section 1001A(b) and adopted or 
     participated in adopting a scheme or device to evade the 
     application of section 1001, 1001A, or 1001C; or
       ``(2) intentionally concealed the interest of the person or 
     legal entity in any farm or legal entity engaged in farming.
       ``(b) Extended Ineligibility.--If the Secretary determines 
     that a person or legal entity, for the benefit of the person 
     or legal entity or the benefit of any other person or legal 
     entity, has knowingly engaged in, or aided in the creation of 
     a fraudulent document, failed to disclose material 
     information relevant to the administration of sections 1001 
     through 1001F, or committed other equally serious actions (as 
     identified in regulations issued by the Secretary), the 
     Secretary may for a period not to exceed 5 crop years deny 
     the issuance of payments to the person or legal entity.
       ``(c) Pro Rata Denial.--
       ``(1) In general.--Payments otherwise owed to a person or 
     legal entity described in subsections (a) or (b) shall be 
     denied in a pro rata manner based on the ownership interest 
     of the person or legal entity in a farm.
       ``(2) Cash rent tenant.--Payments otherwise payable to a 
     person or legal entity shall be denied in a pro rata manner 
     if the person or legal entity is a cash rent tenant on a farm 
     owned or under the control of a person or legal entity with 
     respect to which a determination has been made under 
     subsection (a) or (b).
       ``(d) Joint and Several Liability.--Any legal entity 
     (including partnerships and joint ventures) and any member of 
     any legal entity determined to have knowingly participated in 
     a scheme or device to evade, or that has the purpose of 
     evading, sections 1001, 1001A, or 1001C shall be jointly and 
     severally liable for any amounts that are payable to the 
     Secretary as the result of the scheme or device (including 
     amounts necessary to recover those amounts).
       ``(e) Release.--The Secretary may partially or fully 
     release from liability any person or legal entity who 
     cooperates with the Secretary in enforcing sections 1001, 
     1001A, and 1001C, and this section.''.
       (f) Conforming Amendment to Apply Direct Attribution to 
     NAP.--
       (1) In general.--Section 196(i) of the Federal Agriculture 
     Improvement and Reform Act of 1996 (7 U.S.C. 7333(i)) is 
     amended--
       (A) by striking paragraphs (1) and (2) and inserting the 
     following:
       ``(1) Definitions.--In this subsection, the terms `legal 
     entity' and `person' have the meanings given those terms in 
     section 1001(a) of the Food Security Act of 1985 (7 U.S.C. 
     1308(a)).
       ``(2) Payment limitation.--The total amount of payments 
     received, directly or indirectly, by a person or legal entity 
     (excluding a joint venture or general partnership) for any 
     crop year may not exceed $100,000.'';
       (B) by striking paragraph (4) and inserting the following:
       ``(4) Adjusted gross income limitation.--A person or legal 
     entity that has an average adjusted gross income in excess of 
     the average adjusted gross income limitation applicable under 
     section 1001D(b)(1)(A) of the Food Security Act of 1985 (7 
     U.S.C. 1308-3a(b)(1)(A)), or a successor provision, shall not 
     be eligible to receive

[[Page H3434]]

     noninsured crop disaster assistance under this section.''; 
     and
       (C) in paragraph (5)--
       (i) by striking ``necessary to ensure'' and inserting 
     ``necessary--
       ``(A) to ensure''; and
       (ii) by striking ``this subsection.'' and inserting the 
     following: ``this subsection; and
       ``(B) to ensure that payments under this section are 
     attributed to a person or legal entity (excluding a joint 
     venture or general partnership) in accordance with the terms 
     and conditions of sections 1001 through 1001D of the Food 
     Security Act of 1985 (7 U.S.C. 1308 et seq.), as determined 
     by the Secretary.''.
       (2) Transition.--Section 196(i) of the Federal Agriculture 
     Improvement and Reform Act of 1996 (7 U.S.C. 7333(i)), as in 
     effect on September 30, 2007, shall apply with respect to the 
     2007 and 2008 crops of any eligible crop.
       (g) Conforming Amendments.--
       (1) Section 1009(e) of the Food Security Act of 1985 (7 
     U.S.C. 1308a(e)) is amended in the second sentence by 
     striking ``of $50,000''.
       (2) Section 609(b)(1) of the Emergency Livestock Feed 
     Assistance Act of 1988 (7 U.S.C. 1471g(b)(1)) is amended by 
     inserting ``(before the amendment made by section 1703(a) of 
     the Food, Conservation, and Energy Act of 2008)'' after 
     ``1985''.
       (3) Section 524(b)(3) of the Federal Crop Insurance Act (7 
     U.S.C. 1524(b)(3)) is amended by inserting ``(before the 
     amendment made by section 1703(a) of the Food, Conservation, 
     and Energy Act of 2008)'' after ``1308(5)))''.
       (4) Section 10204(c)(1) of the Farm Security and Rural 
     Investment Act of 2002 (7 U.S.C. 8204(c)(1)) is amended by 
     inserting ``(before the amendment made by section 1703(a) of 
     the Food, Conservation, and Energy Act of 2008)'' after 
     ``1308)''.
       (5) Section 1271(c)(3)(A) of the Food, Agriculture, 
     Conservation, and Trade Act of 1990 (16 U.S.C. 
     2106a(c)(3)(A)) is amended by inserting ``(before the 
     amendment made by section 1703(a) of the Food, Conservation, 
     and Energy Act of 2008)'' after ``1308)''.
       (6) Section 291(2) of the Trade Act of 1974 (19 U.S.C. 
     2401(2)) is amended by inserting ``(before the amendment made 
     by section 1703(a) of the Food, Conservation, and Energy Act 
     of 2008)'' before the period at the end.
       (h) Transition.--Section 1001, 1001A, and 1001B of the Food 
     Security Act of 1985 (7 U.S.C. 1308, 1308-1, 1308-2), as in 
     effect on September 30, 2007, shall continue to apply with 
     respect to the 2007 and 2008 crops of any covered commodity 
     or peanuts.

     SEC. 1604. ADJUSTED GROSS INCOME LIMITATION.

       (a) In General.--Section 1001D of the Food Security Act of 
     1985 (7 U.S.C. 1308-3a(e)) is amended to read as follows:

     ``SEC. 1001D. ADJUSTED GROSS INCOME LIMITATION.

       ``(a) Definitions.--
       ``(1) In general.--In this section:
       ``(A) Average adjusted gross income.--The term `average 
     adjusted gross income', with respect to a person or legal 
     entity, means the average of the adjusted gross income or 
     comparable measure of the person or legal entity over the 3 
     taxable years preceding the most immediately preceding 
     complete taxable year, as determined by the Secretary.
       ``(B) Average adjusted gross farm income.--The term 
     `average adjusted gross farm income', with respect to a 
     person or legal entity, means the average of the portion of 
     adjusted gross income of the person or legal entity that is 
     attributable to activities related to farming, ranching, or 
     forestry for the 3 taxable years described in subparagraph 
     (A), as determined by the Secretary in accordance with 
     subsection (c).
       ``(C) Average adjusted gross nonfarm income.--The term 
     `average adjusted gross nonfarm income', with respect to a 
     person or legal entity, means the difference between--
       ``(i) the average adjusted gross income of the person or 
     legal entity; and
       ``(ii) the average adjusted gross farm income of the person 
     or legal entity.
       ``(2) Special rules for certain persons and legal 
     entities.--In the case of a legal entity that is not required 
     to file a Federal income tax return or a person or legal 
     entity that did not have taxable income in 1 or more of the 
     taxable years used to determine the average under 
     subparagraph (A) or (B) of paragraph (1), the Secretary shall 
     provide, by regulation, a method for determining the average 
     adjusted gross income, the average adjusted gross farm 
     income, and the average adjusted gross nonfarm income of the 
     person or legal entity for purposes of this section.
       ``(3) Allocation of income.--On the request of any person 
     filing a joint tax return, the Secretary shall provide for 
     the allocation of average adjusted gross income, average 
     adjusted gross farm income, and average adjusted gross 
     nonfarm income among the persons filing the return if--
       ``(A) the person provides a certified statement by a 
     certified public accountant or attorney that specifies the 
     method by which the average adjusted gross income, average 
     adjusted gross farm income, and average adjusted gross 
     nonfarm income would have been declared and reported had the 
     persons filed 2 separate returns; and
       ``(B) the Secretary determines that the method described in 
     the statement is consistent with the information supporting 
     the filed joint tax return.
       ``(b) Limitations.--
       ``(1) Commodity programs.--
       ``(A) Nonfarm limitation.--Notwithstanding any other 
     provision of law, a person or legal entity shall not be 
     eligible to receive any benefit described in subparagraph (C) 
     during a crop, fiscal, or program year, as appropriate, if 
     the average adjusted gross nonfarm income of the person or 
     legal entity exceeds $500,000.
       ``(B) Farm limitation.--Notwithstanding any other provision 
     of law, a person or legal entity shall not be eligible to 
     receive a direct payment under subtitle A or C of title I of 
     the Food, Conservation, and Energy Act of 2008 during a crop 
     year, if the average adjusted gross farm income of the person 
     or legal entity exceeds $750,000.
       ``(C) Covered benefits.--Subparagraph (A) applies with 
     respect to the following:
       ``(i) A direct payment or counter-cyclical payment under 
     subtitle A or C of title I of the Food, Conservation, and 
     Energy Act of 2008 or an average crop revenue election 
     payment under subtitle A of title I of that Act.
       ``(ii) A marketing loan gain or loan deficiency payment 
     under subtitle B or C of title I of the Food, Conservation, 
     and Energy Act of 2008.
       ``(iii) A payment or benefit under section 196 of the 
     Federal Agriculture Improvement and Reform Act of 1996 (7 
     U.S.C. 7333).
       ``(iv) A payment or benefit under section 1506 of the Food, 
     Conservation, and Energy Act of 2008.
       ``(v) A payment or benefit under title IX of the Trade Act 
     of 1974 or subtitle B of the Federal Crop Insurance Act.
       ``(2) Conservation programs.--
       ``(A) Limits.--
       ``(i) In general.--Notwithstanding any other provision of 
     law, except as provided in clause (ii), a person or legal 
     entity shall not be eligible to receive any benefit described 
     in subparagraph (B) during a crop, fiscal, or program year, 
     as appropriate, if the average adjusted gross nonfarm income 
     of the person or legal entity exceeds $1,000,000, unless not 
     less than 66.66 percent of the average adjusted gross income 
     of the person or legal entity is average adjusted gross farm 
     income.
       ``(ii) Exception.--The Secretary may waive the limitation 
     established under clause (i) on a case-by-case basis if the 
     Secretary determines that environmentally sensitive land of 
     special significance would be protected.
       ``(B) Covered benefits.--Subparagraph (A) applies with 
     respect to the following:
       ``(i) A payment or benefit under title XII of this Act.
       ``(ii) A payment or benefit under title II of the Farm 
     Security and Rural Investment Act of 2002 (Public Law 107-
     171; 116 Stat. 223) or title II of the Food, Conservation, 
     and Energy Act of 2008.
       ``(iii) A payment or benefit under section 524(b) of the 
     Federal Crop Insurance Act (7 U.S.C. 1524(b)).
       ``(c) Income Determination.--
       ``(1) In general.--In determining the average adjusted 
     gross farm income of a person or legal entity, the Secretary 
     shall include income or benefits derived from or related to--
       ``(A) the production of crops, including specialty crops 
     (as defined in section 3 of the Specialty Crops 
     Competitiveness Act of 2004 (7 U.S.C. 1621 note; Public Law 
     108-465)) and unfinished raw forestry products;
       ``(B) the production of livestock (including cattle, elk, 
     reindeer, bison, horses, deer, sheep, goats, swine, poultry, 
     fish, and other aquacultural products used for food, 
     honeybees, and other animals designated by the Secretary) and 
     products produced by, or derived from, livestock;
       ``(C) the production of farm-based renewable energy (as 
     defined in section 9001 of the Farm Security and Rural 
     Investment Act of 2002 (7 U.S.C. 8101));
       ``(D) the sale, including the sale of easements and 
     development rights, of farm, ranch, or forestry land, water 
     or hunting rights, or environmental benefits;
       ``(E) the rental or lease of land or equipment used for 
     farming, ranching, or forestry operations, including water or 
     hunting rights;
       ``(F) the processing (including packing), storing 
     (including shedding), and transporting of farm, ranch, and 
     forestry commodities, including renewable energy;
       ``(G) the feeding, rearing, or finishing of livestock;
       ``(H) the sale of land that has been used for agriculture;
       ``(I) payments or other benefits received under any program 
     authorized under title I of the Farm Security and Rural 
     Investment Act of 2002 (7 U.S.C. 7901 et seq.) or title I of 
     the Food, Conservation, and Energy Act of 2008;
       ``(J) payments or other benefits received under any program 
     authorized under title XII of this Act, title II of the Farm 
     Security and Rural Investment Act of 2002 (Public Law 107-
     171; 116 Stat. 223), or title II of the Food, Conservation, 
     and Energy Act of 2008;
       ``(K) payments or other benefits received under section 196 
     of the Federal Agriculture Improvement and Reform Act of 1996 
     (7 U.S.C. 7333);
       ``(L) payments or other benefits received under title IX of 
     the Trade Act of 1974 or subtitle B of the Federal Crop 
     Insurance Act;
       ``(M) risk management practices, including benefits 
     received under a program authorized under the Federal Crop 
     Insurance Act (7 U.S.C. 1501 et seq.) (including a 
     catastrophic risk protection plan offered under section 
     508(b) of that Act (7 U.S.C. 1508(b))); and
       ``(N) any other activity related to farming, ranching, or 
     forestry, as determined by the Secretary.
       ``(2) Income derived from farming, ranching, or forestry.--
     In determining the average adjusted gross farm income of a 
     person or legal entity, in addition to the inclusions 
     described in paragraph (1), the Secretary shall include any 
     income reported on the Schedule F or other schedule used by 
     the person or legal entity to report income from farming, 
     ranching, or forestry operations to the Internal Revenue 
     Service, to the extent such income is not already included 
     under paragraph (1).
       ``(3) Special rule.--If not less than 66.66 percent of the 
     average adjusted gross income of a person or legal entity is 
     derived from farming,

[[Page H3435]]

     ranching, or forestry operations described in paragraphs (1) 
     and (2), in determining the average adjusted gross farm 
     income of the person or legal entity, the Secretary shall 
     also include--
       ``(A) the sale of equipment to conduct farm, ranch, or 
     forestry operations; and
       ``(B) the provision of production inputs and services to 
     farmers, ranchers, foresters, and farm operations.
       ``(d) Enforcement.--
       ``(1) In general.--To comply with subsection (b), at least 
     once every 3 years a person or legal entity shall provide to 
     the Secretary--
       ``(A) a certification by a certified public accountant or 
     another third party that is acceptable to the Secretary that 
     the average adjusted gross income, average adjusted gross 
     farm income, and average adjusted gross nonfarm income of the 
     person or legal entity does not exceed the applicable 
     limitation specified in that subsection; or
       ``(B) information and documentation regarding the average 
     adjusted gross income, average adjusted gross farm income, 
     and average adjusted gross nonfarm income of the person or 
     legal entity through other procedures established by the 
     Secretary.
       ``(2) Denial of program benefits.--If the Secretary 
     determines that a person or legal entity has failed to comply 
     with this section, the Secretary shall deny the issuance of 
     applicable payments and benefits specified in paragraphs 
     (1)(C) and (2)(B) of subsection (b) to the person or legal 
     entity, under similar terms and conditions as described in 
     section 1001B.
       ``(3) Audit.--The Secretary shall establish statistically 
     valid procedures under which the Secretary shall conduct 
     targeted audits of such persons or legal entities as the 
     Secretary determines are most likely to exceed the 
     limitations under subsection (b).
       ``(e) Commensurate Reduction.--In the case of a payment or 
     benefit described in paragraphs (1)(C) and (2)(B) of 
     subsection (b) made in a crop, program, or fiscal year, as 
     appropriate, to an entity, general partnership, or joint 
     venture, the amount of the payment or benefit shall be 
     reduced by an amount that is commensurate with the direct and 
     indirect ownership interest in the entity, general 
     partnership, or joint venture of each person who has an 
     average adjusted gross income, average adjusted gross farm 
     income, or average adjusted gross nonfarm income in excess of 
     the applicable limitation specified in subsection (b).
       ``(f) Effective Period.--This section shall apply only 
     during the 2009 through 2012 crop, program, or fiscal years, 
     as appropriate.''.
       (b) Transition.--Section 1001D of the Food Security Act of 
     1985 (7 U.S.C. 1308-3a), as in effect on September 30, 2007, 
     shall apply with respect to the 2007 and 2008 crop, fiscal, 
     or program year, as appropriate, for each program described 
     in paragraphs (1)(C) and (2)(B) of subsection (b) of that 
     section (as amended by subsection (a)).

     SEC. 1605. AVAILABILITY OF QUALITY INCENTIVE PAYMENTS FOR 
                   COVERED OILSEED PRODUCERS.

       (a) Incentive Payments Required.--Subject to subsection (b) 
     and the availability of appropriations under subsection (h), 
     the Secretary shall use funds made available under subsection 
     (h) to provide quality incentive payments for the production 
     of oilseeds with specialized traits that enhance human 
     health, as determined by the Secretary.
       (b) Covered Oilseeds.--The Secretary shall make payments 
     under this section only for the production of an oilseed 
     variety that has, as determined by the Secretary--
       (1) been demonstrated to improve the health profile of the 
     oilseed for use in human consumption by--
       (A) reducing or eliminating the need to partially 
     hydrogenate the oil derived from the oilseed for use in human 
     consumption; or
       (B) adopting new technology traits; and
       (2) 1 or more impediments to commercialization.
       (c) Request for Proposals.--
       (1) Issuance.--If funds are made available to carry out 
     this section for a crop year, the Secretary shall issue a 
     request for proposals for payments under this section.
       (2) Multiyear proposals.--A proponent may submit a 
     multiyear proposal for payments under this section.
       (3) Content of proposals.--A proposal for payments under 
     this section shall include a description of--
       (A) how use of the oilseed enhances human health;
       (B) the impediments to commercial use of the oilseed;
       (C) each oilseed variety described in subsection (b) and 
     the value of the oilseed variety as a matter of public 
     policy;
       (D) a range for the base price and premiums per bushel or 
     hundredweight to be paid to producers;
       (E) a per bushel or hundredweight amount of incentive 
     payments requested for each year under this section that does 
     not exceed \1/3\ of the total premium offered for any year;
       (F) the period of time, not to exceed 4 years, during which 
     incentive payments are to be provided to producers; and
       (G) the targeted total quantity of production and estimated 
     acres needed to produce the targeted quantity for each year 
     under this section.
       (d) Contracts for Production.--
       (1) In general.--The Secretary shall approve successful 
     proposals submitted under subsection (c) on a timely basis.
       (2) Timing of payments.--The Secretary shall make payments 
     to producers under this section after the Secretary receives 
     documentation that the premium required under a contract has 
     been paid to covered producers.
       (e) Administration.--
       (1) In general.--If funding provided for a crop year is not 
     fully allocated under the initial request for proposals under 
     subsection (c), the Secretary shall issue additional requests 
     for proposals for subsequent crop years under this section.
       (2) Prorated payments.--If funding provided for a crop year 
     is less than the amount otherwise approved by the Secretary 
     or for which approval is sought, the Secretary shall prorate 
     the payments or approvals in a manner determined by the 
     Secretary so that the total payments do not exceed the 
     funding level.
       (f) Proprietary Information.--The Secretary shall protect 
     proprietary information provided to the Secretary for the 
     purpose of administering this section.
       (g) Program Compliance and Penalties.--
       (1) Guarantee.--The proponent, if approved, shall be 
     required to guarantee that the oilseed on which a payment is 
     made by the Secretary under this section is used for human 
     consumption as described in the proposal, as approved by the 
     Secretary.
       (2) Noncompliance.--If oilseeds on which a payment is made 
     by the Secretary under this section are not actually used for 
     the purpose the payment is made, the proponent shall be 
     required to pay to the Secretary an amount equal to, as 
     determined by the Secretary--
       (A) in the case of an inadvertent failure, twice the amount 
     of the payment made by the Secretary under this section to 
     the producer of the oilseeds; and
       (B) in any other case, up to twice the full value of the 
     oilseeds involved.
       (3) Documentation.--The Secretary may require such 
     assurances and documentation as may be needed to enforce the 
     guarantee.
       (4) Additional penalties.--
       (A) In general.--In addition to payments required under 
     paragraph (2), the Secretary may impose penalties on 
     additional persons that use oilseeds the use of which is 
     restricted under this section for a purpose other than the 
     intended use.
       (B) Amount.--The amount of a penalty under this paragraph 
     shall--
       (i) be in an amount determined appropriated by the 
     Secretary; but
       (ii) not to exceed twice the full value of the oilseeds.
       (h) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section for each of fiscal years 2009 through 2012.

     SEC. 1606. PERSONAL LIABILITY OF PRODUCERS FOR DEFICIENCIES.

       Section 164 of the Federal Agriculture Improvement and 
     Reform Act of 1996 (7 U.S.C. 7284) is amended by striking 
     ``and title I of the Farm Security and Rural Investment Act 
     of 2002'' each place it appears and inserting ``title I of 
     the Farm Security and Rural Investment Act of 2002, and title 
     I of the Food, Conservation, and Energy Act of 2008''.

     SEC. 1607. EXTENSION OF EXISTING ADMINISTRATIVE AUTHORITY 
                   REGARDING LOANS.

       Section 166 of the Federal Agriculture Improvement and 
     Reform Act of 1996 (7 U.S.C. 7286) is amended--
       (1) by striking ``and subtitle B and C of title I of the 
     Farm Security and Rural Investment Act of 2002'' each place 
     it appears and inserting ``, title I of the Farm Security and 
     Rural Investment Act of 2002, and title I of the Food, 
     Conservation, and Energy Act of 2008''; and
       (2) in subsection (c), by adding at the end the following:
       ``(3) Termination of authority.--The authority to carry out 
     paragraph (1) terminates effective ending with the 2009 crop 
     year.''.

     SEC. 1608. ASSIGNMENT OF PAYMENTS.

       (a) In General.--The provisions of section 8(g) of the Soil 
     Conservation and Domestic Allotment Act (16 U.S.C. 590h(g)), 
     relating to assignment of payments, shall apply to payments 
     made under this title.
       (b) Notice.--The producer making the assignment, or the 
     assignee, shall provide the Secretary with notice, in such 
     manner as the Secretary may require, of any assignment made 
     under this section.

     SEC. 1609. TRACKING OF BENEFITS.

       As soon as practicable after the date of enactment of this 
     Act, the Secretary may track the benefits provided, directly 
     or indirectly, to individuals and entities under titles I and 
     II and the amendments made by those titles.

     SEC. 1610. GOVERNMENT PUBLICATION OF COTTON PRICE FORECASTS.

       Section 15 of the Agricultural Marketing Act (12 U.S.C. 
     1141j) is amended--
       (1) by striking subsection (d); and
       (2) by redesignating subsections (e) through (g) as 
     subsections (d) through (f), respectively.

     SEC. 1611. PREVENTION OF DECEASED INDIVIDUALS RECEIVING 
                   PAYMENTS UNDER FARM COMMODITY PROGRAMS.

       (a) Regulations.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary shall promulgate 
     regulations that--
       (1) describe the circumstances under which, in order to 
     allow for the settlement of estates and for related purposes, 
     payments may be issued in the name of a deceased individual; 
     and
       (2) preclude the issuance of payments to, and on behalf of, 
     deceased individuals that were not eligible for the payments.
       (b) Coordination.--At least twice each year, the Secretary 
     shall reconcile the social security numbers of all 
     individuals who receive payments under this title, whether 
     directly or indirectly, with the Social Security 
     Administration to determine if the individuals are alive.

     SEC. 1612. HARD WHITE WHEAT DEVELOPMENT PROGRAM.

       (a) Definitions.--In this section:
       (1) Eligible hard white wheat seed.--The term ``eligible 
     hard white wheat seed'' means hard white wheat seed that, as 
     determined by the Secretary, is--

[[Page H3436]]

       (A) certified;
       (B) of a variety that is suitable for the State in which 
     the seed will be planted;
       (C) rated at least superior with respect to quality; and
       (D) specifically approved under a seed establishment 
     program established by the State Department of Agriculture 
     and the State Wheat Commission of the 1 or more States in 
     which the seed will be planted.
       (2) Program.--The term ``program'' means the hard white 
     wheat development program established under subsection 
     (b)(1).
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of Agriculture, in consultation with the State Departments of 
     Agriculture and the State Wheat Commissions of the States in 
     regions in which hard white wheat is produced, as determined 
     by the Secretary.
       (b) Establishment.--
       (1) In general.--Subject to the availability of 
     appropriations, the Secretary shall establish a hard white 
     wheat development program in accordance with paragraph (2) to 
     promote the establishment of hard white wheat as a viable 
     market class of wheat in the United States by encouraging 
     production of at least 240,000,000 bushels of hard white 
     wheat by 2012.
       (2) Payments.--
       (A) In general.--Subject to subparagraphs (B) and (C) and 
     subsection (c), if funds are made available for any of the 
     2009 through 2012 crops of hard white wheat, the Secretary 
     shall make available incentive payments to producers of those 
     crops.
       (B) Acreage limitation.--The Secretary shall carry out 
     subparagraph (A) subject to a regional limitation determined 
     by the Secretary on the number of acres for which payments 
     may be received that takes into account planting history and 
     potential planting, but does not exceed a total of 2,900,000 
     acres or the equivalent volume of production based on a yield 
     of 50 bushels per acre.
       (C) Payment limitations.--Payments to producers on a farm 
     described in subparagraph (A) shall be--
       (i) in an amount that is not less than $0.20 per bushel; 
     and
       (ii) in an amount that is not less than $2.00 per acre for 
     planting eligible hard white wheat seed.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section $35,000,000 for 
     the period of fiscal years 2009 through 2012.

     SEC. 1613. DURUM WHEAT QUALITY PROGRAM.

       (a) In General.--Subject to the availability of funds under 
     subsection (c), the Secretary shall provide compensation to 
     producers of durum wheat in an amount not to exceed 50 
     percent of the actual cost of fungicides applied to a crop of 
     durum wheat of the producers to control Fusarium head blight 
     (wheat scab) on acres certified to have been planted to Durum 
     wheat in a crop year.
       (b) Insufficient Funds.--If the total amount of funds 
     appropriated for a fiscal year under subsection (c) are 
     insufficient to fulfill all eligible requests for 
     compensation under this section, the Secretary shall prorate 
     the compensation payments in a manner determined by the 
     Secretary to be equitable.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $10,000,000 for 
     each of fiscal years 2009 through 2012.

     SEC. 1614. STORAGE FACILITY LOANS.

       (a) In General.--As soon as practicable after the date of 
     enactment of this Act, the Secretary shall establish a 
     storage facility loan program to provide funds for producers 
     of grains, oilseeds, pulse crops, hay, renewable biomass, and 
     other storable commodities (other than sugar), as determined 
     by the Secretary, to construct or upgrade storage and 
     handling facilities for the commodities.
       (b) Eligible Producers.--A storage facility loan under this 
     section shall be made available to any producer described in 
     subsection (a) that, as determined by the Secretary--
       (1) has a satisfactory credit history;
       (2) has a need for increased storage capacity; and
       (3) demonstrates an ability to repay the loan.
       (c) Term of Loans.--A storage facility loan under this 
     section shall have a maximum term of 12 years.
       (d) Loan Amount.--The maximum principal amount of a storage 
     facility loan under this section shall be $500,000.
       (e) Loan Disbursements.--The Secretary shall provide for 1 
     partial disbursement of loan principal and 1 final 
     disbursement of loan principal, as determined to be 
     appropriate and subject to acceptable documentation, to 
     facilitate the purchase and construction of eligible 
     facilities.
       (f) Loan Security.--Approval of a storage facility loan 
     under this section shall--
       (1) require the borrower to provide loan security to the 
     Secretary, in the form of--
       (A) a lien on the real estate parcel on which the storage 
     facility is located; or
       (B) such other security as is acceptable to the Secretary;
       (2) under such rules and regulations as the Secretary may 
     prescribe, not require a severance agreement from the holder 
     of any prior lien on the real estate parcel on which the 
     storage facility is located, if the borrower--
       (A) agrees to increase the down payment on the storage 
     facility by an amount determined appropriate by the 
     Secretary; or
       (B) provides other security acceptable to the Secretary; 
     and
       (3) allow a borrower, upon the approval of the Secretary, 
     to define a subparcel of real estate as security for the 
     storage facility loan if the subparcel is--
       (A) of adequate size and value to adequately secure the 
     loan; and
       (B) not subject to any other liens or mortgages that are 
     superior to the lien interest of the Commodity Credit 
     Corporation.

     SEC. 1615. STATE, COUNTY, AND AREA COMMITTEES.

       Section 8(b)(5)(B)(ii) of the Soil Conservation and 
     Domestic Allotment Act (16 U.S.C. 590h(b)(5)(B)(ii)) is 
     amended--
       (1) by redesignating subclauses (I) and (II) as items (aa) 
     and (bb), respectively, and indenting appropriately;
       (2) in the matter preceding item (aa) (as redesignated by 
     paragraph (1)), by striking ``A committee established'' and 
     inserting the following:

       ``(I) In general.--Except as provided in subclause (II), a 
     committee established''; and

       (3) by adding at the end the following:

       ``(II) Combination or consolidation of areas.--A committee 
     established by combining or consolidating 2 or more county or 
     area committees shall consist of not fewer than 3 nor more 
     than 11 members that--

       ``(aa) are fairly representative of the agricultural 
     producers within the area covered by the county, area, or 
     local committee; and
       ``(bb) are elected by the agricultural producers that 
     participate or cooperate in programs administered within the 
     area under the jurisdiction of the county, area, or local 
     committee.

       ``(III) Representation of socially disadvantaged farmers 
     and ranchers.--The Secretary shall develop procedures to 
     maintain representation of socially disadvantaged farmers and 
     ranchers on combined or consolidated committees.
       ``(IV) Eligibility for membership.--Notwithstanding any 
     other producer eligibility requirements for service on county 
     or area committees, if a county or area is consolidated or 
     combined, a producer shall be eligible to serve only as a 
     member of the county or area committee that the producer 
     elects to administer the farm records of the producer.''.

     SEC. 1616. PROHIBITION ON CHARGING CERTAIN FEES.

       Public Law 108-470 (7 U.S.C. 7416a) is amended--
       (1) in subsection (a), by striking ``may'' and inserting 
     ``shall''; and
       (2) by adding at the end the following:
       ``(c) Prohibition on Charging Certain Fees.--The Secretary 
     may not charge any fees or related costs for the collection 
     of commodity assessments pursuant to this Act.''.

     SEC. 1617. SIGNATURE AUTHORITY.

       (a) In General.--In carrying out this title and title II 
     and amendments made by those titles, if the Secretary 
     approves a document, the Secretary shall not subsequently 
     determine the document is inadequate or invalid because of 
     the lack of authority of any person signing the document on 
     behalf of the applicant or any other individual, entity, 
     general partnership, or joint venture, or the documents 
     relied upon were determined inadequate or invalid, unless the 
     person signing the program document knowingly and willfully 
     falsified the evidence of signature authority or a signature.
       (b) Affirmation.--
       (1) In general.--Nothing in this section prohibits the 
     Secretary from asking a proper party to affirm any document 
     that otherwise would be considered approved under subsection 
     (a).
       (2) No retroactive effect.--A denial of benefits based on a 
     lack of affirmation under paragraph (1) shall not be 
     retroactive with respect to third-party producers who were 
     not the subject of the erroneous representation of authority, 
     if the third-party producers--
       (A) relied on the prior approval by the Secretary of the 
     documents in good faith; and
       (B) substantively complied with all program requirements.

     SEC. 1618. MODERNIZATION OF FARM SERVICE AGENCY.

       Not later than 180 days after the date of enactment of this 
     Act, the Secretary shall transmit to the Committee on 
     Agriculture and the Committee on Appropriations of the House 
     of Representatives and the Committee on Agriculture, 
     Nutrition, and Forestry and the Committee on Appropriations 
     of the Senate a report prepared by a third party that 
     describes--
       (1) the data processing and information technology 
     challenges experienced in local offices of the Farm Service 
     Agency;
       (2) the impact of those challenges on service to producers, 
     on efficiency of personnel, and on implementation of this 
     Act;
       (3) the need for information technology system upgrades of 
     the Farm Service Agency relative to other agencies of the 
     Department of Agriculture;
       (4) the detailed plan needed to fulfill the needs of the 
     Department that are identified in paragraph (3), including 
     hardware, software, and infrastructure requirements;
       (5) the estimated cost and timeframe for long-term 
     modernization and stabilization of Farm Service Agency 
     information technology systems;
       (6) the benefits associated with such modernization and 
     stabilization; and
       (7) an evaluation of the existence of appropriate oversight 
     within the Department to ensure that funds needed for systems 
     upgrades can be appropriately managed.

     SEC. 1619. INFORMATION GATHERING.

       (a) Geospatial Systems.--The Secretary shall ensure that 
     all the geospatial data of the agencies of the Department of 
     Agriculture are portable and standardized.
       (b) Limitation on Disclosures.--
       (1) Definition of agricultural operation.--In this 
     subsection, the term ``agricultural operation'' includes the 
     production and marketing of agricultural commodities and 
     livestock.
       (2) Prohibition.--Except as provided in paragraphs (3) and 
     (4), the Secretary, any officer or employee of the Department 
     of Agriculture, or any contractor or cooperator of the 
     Department, shall not disclose--

[[Page H3437]]

       (A) information provided by an agricultural producer or 
     owner of agricultural land concerning the agricultural 
     operation, farming or conservation practices, or the land 
     itself, in order to participate in programs of the 
     Department; or
       (B) geospatial information otherwise maintained by the 
     Secretary about agricultural land or operations for which 
     information described in subparagraph (A) is provided.
       (3) Authorized disclosures.--
       (A) Limited release of information.--If the Secretary 
     determines that the information described in paragraph (2) 
     will not be subsequently disclosed except in accordance with 
     paragraph (4), the Secretary may release or disclose the 
     information to a person or Federal, State, local, or tribal 
     agency working in cooperation with the Secretary in any 
     Department program--
       (i) when providing technical or financial assistance with 
     respect to the agricultural operation, agricultural land, or 
     farming or conservation practices; or
       (ii) when responding to a disease or pest threat to 
     agricultural operations, if the Secretary determines that a 
     threat to agricultural operations exists and the disclosure 
     of information to a person or cooperating government entity 
     is necessary to assist the Secretary in responding to the 
     disease or pest threat as authorized by law.
       (4) Exceptions.--Nothing in this subsection affects--
       (A) the disclosure of payment information (including 
     payment information and the names and addresses of recipients 
     of payments) under any Department program that is otherwise 
     authorized by law;
       (B) the disclosure of information described in paragraph 
     (2) if the information has been transformed into a 
     statistical or aggregate form without naming any--
       (i) individual owner, operator, or producer; or
       (ii) specific data gathering site; or
       (C) the disclosure of information described in paragraph 
     (2) pursuant to the consent of the agricultural producer or 
     owner of agricultural land.
       (5) Condition of other programs.--The participation of the 
     agricultural producer or owner of agricultural land in, or 
     receipt of any benefit under, any program administered by the 
     Secretary may not be conditioned on the consent of the 
     agricultural producer or owner of agricultural land under 
     paragraph (4)(C).
       (6) Waiver of privilege or protection.--The disclosure of 
     information under paragraph (2) shall not constitute a waiver 
     of any applicable privilege or protection under Federal law, 
     including trade secret protection.

     SEC. 1620. LEASING OF OFFICE SPACE.

       Not later than 1 year after the date of enactment of this 
     Act, the Secretary shall submit to the Committee on 
     Agriculture and the Committee on Appropriations of the House 
     of Representatives and the Committee on Agriculture, 
     Nutrition, and Forestry and the Committee on Appropriations 
     of the Senate a report that describes--
       (1) the costs and time associated with complying with 
     leasing procedures of the General Services Administration 
     relative to the previous independent leasing procedures of 
     the Department of Agriculture;
       (2) the additional staffing needs associated with complying 
     with those procedures; and
       (3) the value added to the leasing process and the ability 
     of the Department to secure best-value leases by complying 
     with the General Services Administration leasing procedures.

     SEC. 1621. GEOGRAPHICALLY DISADVANTAGED FARMERS AND RANCHERS.

       (a) Definitions.--In this section:
       (1) Agricultural commodity.--The term ``agricultural 
     commodity'' has the meaning given the term in section 102 of 
     the Agricultural Trade Act of 1978 (7 U.S.C. 5602).
       (2) Geographically disadvantaged farmer or rancher.--The 
     term ``geographically disadvantaged farmer or rancher'' has 
     the meaning given the term in section 10906(a) of the Farm 
     Security and Rural Investment Act of 2002 (7 U.S.C. 2204 
     note; Public Law 107-171).
       (b) Authorization.--Subject to the availability of funds 
     under subsection (d), the Secretary may provide 
     geographically disadvantaged farmers or ranchers direct 
     reimbursement payments for activities described in subsection 
     (c).
       (c) Transportation.--
       (1) In general.--Subject to paragraphs (2) and (3), the 
     Secretary may provide direct reimbursement payments to a 
     geographically disadvantaged farmer or rancher to transport 
     an agricultural commodity, or inputs used to produce an 
     agricultural commodity, during a fiscal year.
       (2) Proof of eligibility.--To be eligible to receive 
     assistance under paragraph (1), a geographically 
     disadvantaged farmer or rancher shall demonstrate to the 
     Secretary that transportation of the agricultural commodity 
     or inputs occurred over a distance of more than 30 miles, as 
     determined by the Secretary.
       (3) Amount.--
       (A) In general.--Subject to paragraph (2), the amount of 
     direct reimbursement payments made to a geographically 
     disadvantaged farmer or rancher under this section for a 
     fiscal year shall equal the product obtained by multiplying--
       (i) the amount of costs incurred by the geographically 
     disadvantaged farmer or rancher for transportation of the 
     agricultural commodity or inputs during the fiscal year; and
       (ii)(I) the percentage of the allowance for that fiscal 
     year under section 5941 of title 5, United States Code, for 
     Federal employees stationed in Alaska and Hawaii; or
       (II) in the case of an insular area (as defined in section 
     1404 of the National Agricultural Research, Extension, and 
     Teaching Policy Act of 1977 (7 U.S.C. 3103)), a comparable 
     percentage of the allowance for the fiscal year, as 
     determined by the Secretary.
       (B) Limitation.--The total amount of direct reimbursement 
     payments provided by the Secretary under this section shall 
     not exceed $15,000,000 for a fiscal year.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section for each of fiscal years 2009 through 2012.

     SEC. 1622. IMPLEMENTATION.

       The Secretary shall make available to the Farm Service 
     Agency to carry out this title $50,000,000.

     SEC. 1623. REPEALS.

       (a) Commission on Application of Payment Limitations.--
     Section 1605 of the Farm Security and Rural Investment Act of 
     2002 (7 U.S.C. 7993) is repealed.
       (b) Renewed Availability of Market Loss Assistance and 
     Certain Emergency Assistance to Persons That Failed To 
     Receive Assistance Under Earlier Authorities.--Section 1617 
     of the Farm Security and Rural Investment Act of 2002 (7 
     U.S.C. 8000) is repealed.

                         TITLE II--CONSERVATION

     Subtitle A--Definitions and Highly Erodible Land and Wetland 
                              Conservation

     SEC. 2001. DEFINITIONS RELATING TO CONSERVATION TITLE OF FOOD 
                   SECURITY ACT OF 1985.

       (a) Beginning Farmer or Rancher.--Section 1201(a) of the 
     Food Security Act of 1985 (16 U.S.C. 3801(a)) is amended--
       (1) by redesignating paragraphs (2) through (6), (7) 
     through (11), (12), (13) through (15), (16), (17), and (18) 
     as paragraphs (3) through (7), (9) through (13), (15), (20) 
     through (22), (24), (26), and (27), respectively; and
       (2) by inserting after paragraph (1) the following new 
     paragraph:
       ``(2) Beginning farmer or rancher.--The term `beginning 
     farmer or rancher' has the meaning given the term in section 
     343(a)(8) of the Consolidated Farm and Rural Development Act 
     (7 U.S.C. 1991(a)(8)).''.
       (b) Farm.--Section 1201(a) of the Food Security Act of 1985 
     (16 U.S.C. 3801(a)) is amended by inserting after paragraph 
     (7), as redesignated by subsection (a)(1), the following new 
     paragraph:
       ``(8) Farm.--The term `farm' means a farm that--
       ``(A) is under the general control of one operator;
       ``(B) has one or more owners;
       ``(C) consists of one or more tracts of land, whether or 
     not contiguous;
       ``(D) is located within a county or region, as determined 
     by the Secretary; and
       ``(E) may contain lands that are incidental to the 
     production of perennial crops, including conserving uses, 
     forestry, and livestock, as determined by the Secretary.''.
       (c) Indian Tribe.--Section 1201(a) of the Food Security Act 
     of 1985 (16 U.S.C. 3801(a)) is amended by inserting after 
     paragraph (13), as redesignated by subsection (a)(1), the 
     following new paragraph:
       ``(14) Indian tribe.--The term `Indian tribe' has the 
     meaning given the term in section 4(e) of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 
     450b(e)).''.
       (d) Integrated Pest Management; Livestock; Nonindustrial 
     Private Forest Land; Person and Legal Entity.--Section 
     1201(a) of the Food Security Act of 1985 (16 U.S.C. 3801(a)) 
     is amended by inserting after paragraph (15), as redesignated 
     by subsection (a)(1), the following new paragraphs:
       ``(16) Integrated pest management.--The term `integrated 
     pest management' means a sustainable approach to managing 
     pests by combining biological, cultural, physical, and 
     chemical tools in a way that minimizes economic, health, and 
     environmental risks.
       ``(17) Livestock.--The term `livestock' means all animals 
     raised on farms, as determined by the Secretary.
       ``(18) Nonindustrial private forest land.--The term 
     `nonindustrial private forest land' means rural land, as 
     determined by the Secretary, that--
       ``(A) has existing tree cover or is suitable for growing 
     trees; and
       ``(B) is owned by any nonindustrial private individual, 
     group, association, corporation, Indian tribe, or other 
     private legal entity that has definitive decisionmaking 
     authority over the land.
       ``(19) Person and legal entity.--For purposes of applying 
     payment limitations under subtitle D, the terms `person' and 
     `legal entity' have the meanings given those terms in section 
     1001(a) of this Act (7 U.S.C. 1308(a)).''.
       (e) Socially Disadvantaged Farmer or Rancher.--Section 
     1201(a) of the Food Security Act of 1985 (16 U.S.C. 3801(a)) 
     is amended by inserting after paragraph (22), as redesignated 
     by subsection (a)(1), the following new paragraph:
       ``(23) Socially disadvantaged farmer or rancher.--The term 
     `socially disadvantaged farmer or rancher' has the meaning 
     given the term in section 2501(e)(2) of the Food, 
     Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 
     2279(e)(2)).''.
       (f) Technical Assistance.--Section 1201(a) of the Food 
     Security Act of 1985 (16 U.S.C. 3801(a)) is amended by 
     inserting after paragraph (24), as redesignated by subsection 
     (a)(1), the following new paragraph:
       ``(25) Technical assistance.--The term `technical 
     assistance' means technical expertise, information, and tools 
     necessary for the conservation of natural resources on land 
     active in agricultural, forestry, or related uses. The term 
     includes the following:
       ``(A) Technical services provided directly to farmers, 
     ranchers, and other eligible entities,

[[Page H3438]]

     such as conservation planning, technical consultation, and 
     assistance with design and implementation of conservation 
     practices.
       ``(B) Technical infrastructure, including activities, 
     processes, tools, and agency functions needed to support 
     delivery of technical services, such as technical standards, 
     resource inventories, training, data, technology, monitoring, 
     and effects analyses.''.

     SEC. 2002. REVIEW OF GOOD FAITH DETERMINATIONS RELATED TO 
                   HIGHLY ERODIBLE LAND CONSERVATION.

       Section 1212 of the Food Security Act of 1985 (16 U.S.C. 
     3812) is amended by striking subsection (f) and inserting the 
     following new subsection:
       ``(f) Graduated Penalties.--
       ``(1) Ineligibility.--No person shall become ineligible 
     under section 1211 for program loans, payments, and benefits 
     as a result of the failure of the person to actively apply a 
     conservation plan, if the Secretary determines that the 
     person has acted in good faith and without an intent to 
     violate this subtitle.
       ``(2) Eligible reviewers.--A determination of the 
     Secretary, or a designee of the Secretary, under paragraph 
     (1) shall be reviewed by the applicable--
       ``(A) State Executive Director, with the technical 
     concurrence of the State Conservationist; or
       ``(B) district director, with the technical concurrence of 
     the area conservationist.
       ``(3) Period for implementation.--A person who meets the 
     requirements of paragraph (1) shall be allowed a reasonable 
     period of time, as determined by the Secretary, but not to 
     exceed 1 year, during which to implement the measures and 
     practices necessary to be considered to be actively applying 
     the conservation plan of the person.
       ``(4) Penalties.--
       ``(A) Application.--This paragraph applies if the Secretary 
     determines that--
       ``(i) a person has failed to comply with section 1211 with 
     respect to highly erodible cropland, and has acted in good 
     faith and without an intent to violate section 1211; or
       ``(ii) the violation--

       ``(I) is technical and minor in nature; and
       ``(II) has a minimal effect on the erosion control purposes 
     of the conservation plan applicable to the land on which the 
     violation has occurred.

       ``(B) Reduction.--If this paragraph applies under 
     subparagraph (A), the Secretary shall, in lieu of applying 
     the ineligibility provisions of section 1211, reduce program 
     benefits described in section 1211 that the producer would 
     otherwise be eligible to receive in a crop year by an amount 
     commensurate with the seriousness of the violation, as 
     determined by the Secretary.
       ``(5) Subsequent crop years.--Any person whose benefits are 
     reduced for any crop year under this subsection shall 
     continue to be eligible for all of the benefits described in 
     section 1211 for any subsequent crop year if, prior to the 
     beginning of the subsequent crop year, the Secretary 
     determines that the person is actively applying a 
     conservation plan according to the schedule specified in the 
     plan.''.

     SEC. 2003. REVIEW OF GOOD FAITH DETERMINATIONS RELATED TO 
                   WETLAND CONSERVATION.

       Section 1222(h) of the Food Security Act of 1985 (16 U.S.C. 
     3822(h)) is amended--
       (1) by redesignating paragraph (2) as paragraph (3);
       (2) by inserting after paragraph (1) the following new 
     paragraph:
       ``(2) Eligible reviewers.--A determination of the 
     Secretary, or a designee of the Secretary, under paragraph 
     (1) shall be reviewed by the applicable--
       ``(A) State Executive Director, with the technical 
     concurrence of the State Conservationist; or
       ``(B) district director, with the technical concurrence of 
     the area conservationist.''; and
       (3) in paragraph (3) (as redesignated by paragraph (1)), by 
     inserting ``be'' before ``actively''.

                Subtitle B--Conservation Reserve Program

     SEC. 2101. EXTENSION OF CONSERVATION RESERVE PROGRAM.

       Section 1231(a) of the Food Security Act of 1985 (16 U.S.C. 
     3831(a)) is amended--
       (1) by striking ``2007 calendar year'' and inserting ``2012 
     fiscal year''; and
       (2) by inserting before the period the following: ``and to 
     address issues raised by State, regional, and national 
     conservation initiatives''; and

     SEC. 2102. LAND ELIGIBLE FOR ENROLLMENT IN CONSERVATION 
                   RESERVE.

       Section 1231(b) of the Food Security Act of 1985 (16 U.S.C. 
     3831(b)) is amended--
       (1) in paragraph (1)(B)--
       (A) by striking ``Farm Security and Rural Investment Act of 
     2002'' and inserting ``Food, Conservation, and Energy Act of 
     2008''; and
       (B) by striking the period at the end and inserting a 
     semicolon; and
       (2) in paragraph (4)--
       (A) in subparagraph (C), by striking ``; or'' and inserting 
     a semicolon;
       (B) in subparagraph (D), by striking ``and'' at the end and 
     inserting ``or''; and
       (C) in subparagraph (E), by inserting ``or'' after the 
     semicolon at the end.

     SEC. 2103. MAXIMUM ENROLLMENT OF ACREAGE IN CONSERVATION 
                   RESERVE.

       Section 1231(d) of the Food Security Act of 1985 (16 U.S.C. 
     3831(d)) is amended--
       (1) by striking ``2007 calendar years'' and inserting 
     ``2009 fiscal years'';
       (2) by striking ``( 16 U.S.C.'' and inserting ``(16 
     U.S.C.''; and
       (3) by adding at the end the following new sentence: 
     ``During fiscal years 2010, 2011, and 2012, the Secretary may 
     maintain up to 32,000,000 acres in the conservation reserve 
     at any 1 time.''.

     SEC. 2104. DESIGNATION OF CONSERVATION PRIORITY AREAS.

       Section 1231(f) of the Food Security Act of 1985 (16 U.S.C. 
     3831(f)) is amended by striking ``the Chesapeake Bay Region 
     (Pennsylvania, Maryland, and Virginia)'' and inserting ``the 
     Chesapeake Bay Region''.

     SEC. 2105. TREATMENT OF MULTI-YEAR GRASSES AND LEGUMES.

       Subsection (g) of section 1231 of the Food Security Act of 
     1985 (16 U.S.C. 3831) is amended to read as follows:
       ``(g) Multi-Year Grasses and Legumes.--
       ``(1) In general.--For purposes of this subchapter, alfalfa 
     and other multi-year grasses and legumes in a rotation 
     practice, approved by the Secretary, shall be considered 
     agricultural commodities.
       ``(2) Cropping history.--Alfalfa, when grown as part of a 
     rotation practice, as determined by the Secretary, is an 
     agricultural commodity subject to the cropping history 
     criteria under subsection (b)(1)(B) for the purpose of 
     determining whether highly erodible cropland has been planted 
     or considered planted for 4 of the 6 years referred to in 
     such subsection.''.

     SEC. 2106. REVISED PILOT PROGRAM FOR ENROLLMENT OF WETLAND 
                   AND BUFFER ACREAGE IN CONSERVATION RESERVE.

       (a) Revised Program.--
       (1) In general.--Title XII of the Food Security Act of 1985 
     is amended by inserting after section 1231 (16 U.S.C. 3831) 
     the following new section:

     ``SEC. 1231B. PILOT PROGRAM FOR ENROLLMENT OF WETLAND AND 
                   BUFFER ACREAGE IN CONSERVATION RESERVE.

       ``(a) Program Required.--
       ``(1) In general.--During the 2008 through 2012 fiscal 
     years, the Secretary shall carry out a program in each State 
     under which the Secretary shall enroll eligible acreage 
     described in subsection (b).
       ``(2) Participation among states.--The Secretary shall 
     ensure, to the maximum extent practicable, that owners and 
     operators in each State have an equitable opportunity to 
     participate in the program established under this section.
       ``(b) Eligible Acreage.--
       ``(1) Wetland and related land.--Subject to subsections (c) 
     and (d), an owner or operator may enroll in the conservation 
     reserve, pursuant to the program established under this 
     section, land--
       ``(A) that is wetland (including a converted wetland 
     described in section 1222(b)(1)(A)) that had a cropping 
     history during at least 3 of the immediately preceding 10 
     crop years;
       ``(B) on which a constructed wetland is to be developed 
     that will receive flow from a row crop agriculture drainage 
     system and is designed to provide nitrogen removal in 
     addition to other wetland functions;
       ``(C) that was devoted to commercial pond-raised 
     aquaculture in any year during the period of calendar years 
     2002 through 2007; or
       ``(D) that, after January 1, 1990, and before December 31, 
     2002, was--
       ``(i) cropped during at least 3 of 10 crop years; and
       ``(ii) subject to the natural overflow of a prairie 
     wetland.
       ``(2) Buffer acreage.--Subject to subsections (c) and (d), 
     an owner or operator may enroll in the conservation reserve, 
     pursuant to the program established under this section, 
     buffer acreage that--
       ``(A) with respect to land described in subparagraph (A), 
     (B), or (C) of paragraph (1)--
       ``(i) is contiguous to such land
       ``(ii) is used to protect such land; and
       ``(iii) is of such width as the Secretary determines is 
     necessary to protect such land, taking into consideration and 
     accommodating the farming practices (including the 
     straightening of boundaries to accommodate machinery) used 
     with respect to the cropland that surrounds such land; and
       ``(B) with respect to land described in subparagraph (D) of 
     paragraph (1), enhances a wildlife benefit to the extent 
     practicable in terms of upland to wetland ratios, as 
     determined by the Secretary.
       ``(c) Program Limitations.--
       ``(1) Acreage limitation.--The Secretary may enroll in the 
     conservation reserve, pursuant to the program established 
     under this section, not more than--
       ``(A) 100,000 acres in any State; and
       ``(B) a total of 1,000,000 acres.
       ``(2) Relationship to maximum enrollment.--Subject to 
     paragraph (3), any acreage enrolled in the conservation 
     reserve under this section shall be considered acres 
     maintained in the conservation reserve.
       ``(3) Relationship to other enrolled acreage.--Acreage 
     enrolled in the conservation reserve under this section shall 
     not affect for any fiscal year the quantity of--
       ``(A) acreage enrolled to establish conservation buffers as 
     part of the program announced on March 24, 1998 (63 Fed. Reg. 
     14109); or
       ``(B) acreage enrolled into the conservation reserve 
     enhancement program announced on May 27, 1998 (63 Fed. Reg. 
     28965).
       ``(4) Review; potential increase in enrollment acreage.--
     The Secretary shall conduct a review of the program 
     established under this section with respect to each State 
     that has enrolled land in the conservation reserve pursuant 
     to the program. As a result of the review, the Secretary may 
     increase the number of acres that may be enrolled in a State 
     under the program to not more than 200,000 acres, 
     notwithstanding paragraph (1)(A).
       ``(d) Owner or Operator Enrollment Limitations.--
       ``(1) Wetland and related land.--
       ``(A) Wetlands and constructed wetlands.--The maximum size 
     of any land described in subparagraph (A) or (B) of 
     subsection

[[Page H3439]]

     (b)(1) that an owner or operator may enroll in the 
     conservation reserve, pursuant to the program established 
     under this section, shall be 40 contiguous acres.
       ``(B) Flooded farmland.--The maximum size of any land 
     described in subparagraph (D) of subsection (b)(1) that an 
     owner or operator may enroll in the conservation reserve, 
     pursuant to the program established under this section, shall 
     be 20 contiguous acres.
       ``(C) Coverage.--All acres described in subparagraph (A) or 
     (B), including acres that are ineligible for payment, shall 
     be covered by the conservation contract.
       ``(2) Buffer acreage.--The maximum size of any buffer 
     acreage described in subsection (b)(2) that an owner or 
     operator may enroll in the conservation reserve under this 
     section shall be determined by the Secretary in consultation 
     with the State Technical Committee.
       ``(3) Tracts.--Except for land described in subsection 
     (b)(1)(C) and buffer acreage related to such land, the 
     maximum size of any eligible acreage described in subsection 
     (b)(1) in a tract of an owner or operator enrolled in the 
     conservation reserve under this section shall be 40 acres.
       ``(e) Duties of Owners and Operators.--During the term of a 
     contract entered into under the program established under 
     this section, an owner or operator shall agree--
       ``(1) to restore the hydrology of the wetland within the 
     eligible acreage to the maximum extent practicable, as 
     determined by the Secretary;
       ``(2) to establish vegetative cover (which may include 
     emerging vegetation in water and bottomland hardwoods, 
     cypress, and other appropriate tree species) on the eligible 
     acreage, as determined by the Secretary;
       ``(3) to a general prohibition of commercial use of the 
     enrolled land; and
       ``(4) to carry out other duties described in section 1232.
       ``(f) Duties of the Secretary.--
       ``(1) In general.--Except as provided in paragraphs (2) and 
     (3), in return for a contract entered into under this 
     section, the Secretary shall--
       ``(A) make payments to the owner or operator based on 
     rental rates for cropland; and
       ``(B) provide assistance to the owner or operator in 
     accordance with sections 1233 and 1234.
       ``(2) Contract offers and payments.--The Secretary shall 
     use the method of determination described in section 
     1234(c)(2)(B) to determine the acceptability of contract 
     offers and the amount of rental payments under this section.
       ``(3) Incentives.--The amounts payable to owners and 
     operators in the form of rental payments under contracts 
     entered into under this section shall reflect incentives that 
     are provided to owners and operators to enroll filterstrips 
     in the conservation reserve under section 1234.''.
       (2) Repeal of superseded program.--Section 1231 of the Food 
     Security Act of 1985 (16 U.S.C. 3831) is amended--
       (A) by striking subsection (h); and
       (B) by redesignating subsections (i) and (j) as subsections 
     (h) and (i), respectively.
       (b) Conforming Changes to Emergency Forestry Conservation 
     Reserve Program.--Subsection (k) of section 1231 of the Food 
     Security Act of 1985 (16 U.S.C. 3831) is amended--
       (1) by striking ``(k) Emergency Forestry Conservation 
     Reserve Program.--'' and inserting the following:

     ``SEC. 1231A. EMERGENCY FORESTRY CONSERVATION RESERVE 
                   PROGRAM.'';

       (2) by striking ``subsection'' each place it appears (other 
     than paragraph (3)(C)(ii)) and inserting ``section'';
       (3) by redesignating paragraphs (1), (2), and (3) as 
     subsections (a), (b), and (c), respectively;
       (4) in subsection (a), as so redesignated, by redesignating 
     subparagraphs (A) and (B) as paragraphs (1) and (2), 
     respectively; and
       (5) in subsection (c), as so redesignated--
       (A) by redesignating subparagraphs (A) through (I) as 
     paragraphs (1) through (9), respectively;
       (B) in paragraph (1), as so redesignated, by striking 
     ``subparagraph (B)'' and ``subparagraph (G)'' and inserting 
     ``paragraph (2)'' and ``paragraph (7)'', respectively;
       (C) in paragraph (3), as so redesignated--
       (i) by redesignating clauses (i) and (ii) as subparagraphs 
     (A) and (B), respectively; and
       (ii) by striking ``subsection (d)'' and inserting ``section 
     1231(d)'';
       (D) in paragraph (4), as so redesignated, by redesignating 
     clauses (i) and (ii) as subparagraphs (A) and (B), 
     respectively;
       (E) in paragraph (5), as so redesignated--
       (i) by redesignating clauses (i) through (v) as 
     subparagraphs (A) through (E), respectively, and subclauses 
     (I) and (II) as clauses (i) and (ii), respectively;
       (ii) in subparagraph (B), as so redesignated, by striking 
     ``clause (i)(I)'' and inserting ``subparagraph (A)(i)''; and
       (iii) in subparagraph (C), as so redesignated, by striking 
     ``clause (i)(II)'' and inserting ``subparagraph (A)(ii)''; 
     and
       (F) in paragraph (9), as so redesignated, by redesignating 
     clauses (i) through (iii) as subparagraphs (A) through (C), 
     respectively, and subclauses (I) through (III) as clauses (i) 
     through (iii), respectively.

     SEC. 2107. ADDITIONAL DUTY OF PARTICIPANTS UNDER CONSERVATION 
                   RESERVE CONTRACTS.

       Section 1232(a) of the Food Security Act of 1985 (16 U.S.C. 
     3832(a)) is amended--
       (1) by redesignating paragraphs (5) through (10) as 
     paragraphs (6) through (11), respectively; and
       (2) by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) to undertake management on the land as needed 
     throughout the term of the contract to implement the 
     conservation plan;''.

     SEC. 2108. MANAGED HAYING, GRAZING, OR OTHER COMMERCIAL USE 
                   OF FORAGE ON ENROLLED LAND AND INSTALLATION OF 
                   WIND TURBINES.

       (a) General Prohibition; Exceptions.--Section 1232(a) of 
     the Food Security Act of 1985 (16 U.S.C. 3832(a)) is amended 
     by striking paragraph (8), as redesignated by section 2107, 
     and inserting the following new paragraph:
       ``(8) not to conduct any harvesting or grazing, nor 
     otherwise make commercial use of the forage, on land that is 
     subject to the contract, nor adopt any similar practice 
     specified in the contract by the Secretary as a practice that 
     would tend to defeat the purposes of the contract, except 
     that the Secretary may permit, consistent with the 
     conservation of soil, water quality, and wildlife habitat 
     (including habitat during nesting seasons for birds in the 
     area)--
       ``(A) managed harvesting (including the managed harvesting 
     of biomass), except that in permitting managed harvesting, 
     the Secretary, in coordination with the State technical 
     committee--
       ``(i) shall develop appropriate vegetation management 
     requirements; and
       ``(ii) shall identify periods during which managed 
     harvesting may be conducted;
       ``(B) harvesting and grazing or other commercial use of the 
     forage on the land that is subject to the contract in 
     response to a drought or other emergency;
       ``(C) routine grazing or prescribed grazing for the control 
     of invasive species, except that in permitting such routine 
     grazing or prescribed grazing, the Secretary, in coordination 
     with the State technical committee--
       ``(i) shall develop appropriate vegetation management 
     requirements and stocking rates for the land that are 
     suitable for continued routine grazing; and
       ``(ii) shall establish the frequency during which routine 
     grazing may be conducted, taking into consideration regional 
     differences such as--

       ``(I) climate, soil type, and natural resources;
       ``(II) the number of years that should be required between 
     routine grazing activities; and
       ``(III) how often during a year in which routine grazing is 
     permitted that routine grazing should be allowed to occur; 
     and

       ``(D) the installation of wind turbines, except that in 
     permitting the installation of wind turbines, the Secretary 
     shall determine the number and location of wind turbines that 
     may be installed, taking into account--
       ``(i) the location, size, and other physical 
     characteristics of the land;
       ``(ii) the extent to which the land contains wildlife and 
     wildlife habitat; and
       ``(iii) the purposes of the conservation reserve program 
     under this subchapter;''.
       (b) Rental Payment Reduction.--Section 1232 of the Food 
     Security Act of 1985 (16 U.S.C. 3832) is amended by adding at 
     the end the following new subsection:
       ``(d) Rental Payment Reduction for Certain Authorized Uses 
     of Enrolled Land.--In the case of an authorized activity 
     under subsection (a)(8) on land that is subject to a contract 
     under this subchapter, the Secretary shall reduce the rental 
     payment otherwise payable under the contract by an amount 
     commensurate with the economic value of the authorized 
     activity.''.

     SEC. 2109. COST SHARING PAYMENTS RELATING TO TREES, 
                   WINDBREAKS, SHELTERBELTS, AND WILDLIFE 
                   CORRIDORS.

       Section 1234(b) of the Food Security Act of 1985 (16 U.S.C. 
     3834(b)) is amended by striking paragraph (3) and inserting 
     the following new paragraph:
       ``(3) Trees, windbreaks, shelterbelts, and wildlife 
     corridors.--
       ``(A) Applicability.--This paragraph applies to--
       ``(i) land devoted to the production of hardwood trees, 
     windbreaks, shelterbelts, or wildlife corridors under a 
     contract entered into under this subchapter after November 
     28, 1990;
       ``(ii) land converted to such production under section 
     1235A; and
       ``(iii) land on which an owner or operator agrees to 
     conduct thinning authorized by section 1232(a)(9), if the 
     thinning is necessary to improve the condition of resources 
     on the land.
       ``(B) Payments.--
       ``(i) Percentage.--In making cost share payments to an 
     owner or operator of land described in subparagraph (A), the 
     Secretary shall pay 50 percent of the reasonable and 
     necessary costs incurred by the owner or operator for 
     maintaining trees or shrubs, including the cost of replanting 
     (if the trees or shrubs were lost due to conditions beyond 
     the control of the owner or operator) or thinning.
       ``(ii) Duration.--The Secretary shall make payments as 
     described in clause (i) for a period of not less than 2 
     years, but not more than 4 years, beginning on the date of--

       ``(I) the planting of the trees or shrubs; or
       ``(II) the thinning of existing stands to improve the 
     condition of resources on the land.''.

     SEC. 2110. EVALUATION AND ACCEPTANCE OF CONTRACT OFFERS, 
                   ANNUAL RENTAL PAYMENTS, AND PAYMENT 
                   LIMITATIONS.

       (a) Evaluation and Acceptance of Contract Offers.--Section 
     1234(c) of the Food Security Act of 1985 (16 U.S.C. 3834(c)) 
     is amended by striking paragraph (3) and inserting the 
     following new paragraph:
       ``(3) Acceptance of contract offers.--
       ``(A) Evaluation of offers.--In determining the 
     acceptability of contract offers, the Secretary may take into 
     consideration the extent to which enrollment of the land that 
     is the subject of the contract offer would improve soil 
     resources, water quality, or wildlife habitat or provide 
     other environmental benefits.
       ``(B) Establishment of different criteria in various states 
     and regions.--The Secretary may establish different criteria 
     for determining the acceptability of contract offers in 
     various States and regions of the United States based on

[[Page H3440]]

     the extent to which water quality or wildlife habitat may be 
     improved or erosion may be abated.
       ``(C) Local preference.--In determining the acceptability 
     of contract offers for new enrollments, the Secretary shall 
     accept, to the maximum extent practicable, an offer from an 
     owner or operator that is a resident of the county in which 
     the land is located or of a contiguous county if, as 
     determined by the Secretary, the land would provide at least 
     equivalent conservation benefits to land under competing 
     offers.''.
       (b) Annual Survey of Dryland and Irrigated Cash Rental 
     Rates.--
       (1) Annual estimates required.--Section 1234(c) of the Food 
     Security Act of 1985 (16 U.S.C. 3834(c)) is amended by adding 
     at the end the following new paragraph:
       ``(5) Rental rates.--
       ``(A) Annual estimates.--The Secretary (acting through the 
     National Agricultural Statistics Service) shall conduct an 
     annual survey of per acre estimates of county average market 
     dryland and irrigated cash rental rates for cropland and 
     pastureland in all counties or equivalent subdivisions within 
     each State that have 20,000 acres or more of cropland and 
     pastureland.
       ``(B) Public availability of estimates.--The estimates 
     derived from the annual survey conducted under subparagraph 
     (A) shall be maintained on a website of the Department of 
     Agriculture for use by the general public.''.
       (2) First survey.--The first survey required by paragraph 
     (5) of section 1234(c) of the Food Security Act of 1985 (16 
     U.S.C. 3834(c)), as added by subsection (a), shall be 
     conducted not later than 1 year after the date of enactment 
     of this Act.
       (c) Payment Limitations.--Section 1234(f) of the Food 
     Security Act of 1985 (16 U.S.C. 3834(f)) is amended--
       (1) in paragraph (1), by striking ``made to a person'' and 
     inserting ``received by a person or legal entity, directly or 
     indirectly,'';
       (2) by striking paragraph (2); and
       (3) in paragraph (4), by striking ``any person'' and 
     inserting ``any person or legal entity''.

     SEC. 2111. CONSERVATION RESERVE PROGRAM TRANSITION INCENTIVES 
                   FOR BEGINNING FARMERS OR RANCHERS AND SOCIALLY 
                   DISADVANTAGED FARMERS OR RANCHERS.

       (a) Contract Modification Authority.--Section 1235(c)(1)(B) 
     of the Food Security Act of 1985 (16 U.S.C. 3835(c)(1)(B)) is 
     amended--
       (1) in clause (ii), by striking ``or'' at the end;
       (2) by redesignating clause (iii) as clause (iv); and
       (3) by inserting after clause (ii) the following new 
     clause:
       ``(iii) to facilitate a transition of land subject to the 
     contract from a retired or retiring owner or operator to a 
     beginning farmer or rancher or socially disadvantaged farmer 
     or rancher for the purpose of returning some or all of the 
     land into production using sustainable grazing or crop 
     production methods; or''.
       (b) Transition Option.--Section 1235 of the Food Security 
     Act of 1985 (16 U.S.C. 3835) is amended by adding at the end 
     the following new subsection:
       ``(f) Transition Option for Certain Farmers or Ranchers.--
       ``(1) Duties of the secretary.--In the case of a contract 
     modification approved in order to facilitate the transfer, as 
     described in subsection (c)(1)(B)(iii), of land to a 
     beginning farmer or rancher or socially disadvantaged farmer 
     or rancher (in this subsection referred to as a `covered 
     farmer or rancher'), the Secretary shall--
       ``(A) beginning on the date that is 1 year before the date 
     of termination of the contract--
       ``(i) allow the covered farmer or rancher, in conjunction 
     with the retired or retiring owner or operator, to make 
     conservation and land improvements; and
       ``(ii) allow the covered farmer or rancher to begin the 
     certification process under the Organic Foods Production Act 
     of 1990 (7 U.S.C. 6501 et seq.);
       ``(B) beginning on the date of termination of the contract, 
     require the retired or retiring owner or operator to sell or 
     lease (under a long-term lease or a lease with an option to 
     purchase) to the covered farmer or rancher the land subject 
     to the contract for production purposes;
       ``(C) require the covered farmer or rancher to develop and 
     implement a conservation plan;
       ``(D) provide to the covered farmer or rancher an 
     opportunity to enroll in the conservation stewardship program 
     or the environmental quality incentives program by not later 
     than the date on which the farmer or rancher takes possession 
     of the land through ownership or lease; and
       ``(E) continue to make annual payments to the retired or 
     retiring owner or operator for not more than an additional 2 
     years after the date of termination of the contract, if the 
     retired or retiring owner or operator is not a family member 
     (as defined in section 1001A(b)(3)(B) of this Act) of the 
     covered farmer or rancher.
       ``(2) Reenrollment.--The Secretary shall provide a covered 
     farmer or rancher with the option to reenroll any applicable 
     partial field conservation practice that--
       ``(A) is eligible for enrollment under the continuous 
     signup requirement of section 1231(h)(4)(B); and
       ``(B) is part of an approved conservation plan.''.

                  Subtitle C--Wetlands Reserve Program

     SEC. 2201. ESTABLISHMENT AND PURPOSE OF WETLANDS RESERVE 
                   PROGRAM.

       Subsection (a) of section 1237 of the Food Security Act of 
     1985 (16 U.S.C. 3837) is amended to read as follows:
       ``(a) Establishment and Purposes.--
       ``(1) Establishment.--The Secretary shall establish a 
     wetlands reserve program to assist owners of eligible lands 
     in restoring and protecting wetlands.
       ``(2) Purposes.--The purposes of the wetlands reserve 
     program are to restore, protect, or enhance wetlands on 
     private or tribal lands that are eligible under subsections 
     (c) and (d).''.

     SEC. 2202. MAXIMUM ENROLLMENT AND ENROLLMENT METHODS.

       Section 1237(b) of the Food Security Act of 1985 (16 U.S.C. 
     3837(b)) is amended--
       (1) by striking paragraph (1) and inserting the following 
     new paragraph:
       ``(1) Maximum enrollment.--The total number of acres 
     enrolled in the wetlands reserve program shall not exceed 
     3,041,200 acres.'';
       (2) in paragraph (2), by striking ``The Secretary'' and 
     inserting ``Subject to paragraph (3), the Secretary''; and
       (3) by adding at the end the following new paragraph:
       ``(3) Acreage owned by indian tribes.--In the case of 
     acreage owned by an Indian tribe, the Secretary shall enroll 
     acreage into the wetlands reserve program through the use 
     of--
       ``(A) a 30-year contract (the value of which shall be 
     equivalent to the value of a 30-year easement);
       ``(B) restoration cost-share agreements; or
       ``(C) any combination of the options described in 
     subparagraphs (A) and (B).''.

     SEC. 2203. DURATION OF WETLANDS RESERVE PROGRAM AND LANDS 
                   ELIGIBLE FOR ENROLLMENT.

       (a) In General.--Section 1237(c) of the Food Security Act 
     of 1985 (16 U.S.C. 3837(c)) is amended--
       (1) in the matter preceding paragraph (1)--
       (A) by striking ``2007 calendar'' and inserting ``2012 
     fiscal''; and
       (B) by inserting ``private or tribal'' before ``land'' the 
     second place it appears;
       (2) by striking paragraph (2) and inserting the following 
     new paragraph:
       ``(2) such land is--
       ``(A) farmed wetland or converted wetland, together with 
     the adjacent land that is functionally dependent on the 
     wetlands, except that converted wetland with respect to which 
     the conversion was not commenced prior to December 23, 1985, 
     shall not be eligible to be enrolled in the program under 
     this section; or
       ``(B) cropland or grassland that was used for agricultural 
     production prior to flooding from the natural overflow of a 
     closed basin lake or pothole, as determined by the Secretary, 
     together (where practicable) with the adjacent land that is 
     functionally dependent on the cropland or grassland; and''.
       (b) Change of Ownership.--Section 1237E(a) of the Food 
     Security Act of 1985 (16 U.S.C. 3837e(a)) is amended by 
     striking ``in the preceding 12 months'' and inserting 
     ``during the preceding 7-year period''.
       (c) Annual Survey and Reallocation.--Section 1237F of the 
     Food Security Act of 1985 (16 U.S.C. 3837f) is amended by 
     adding at the end the following new subsection:
       ``(c) Prairie Pothole Region Survey and Reallocation.--
       ``(1) Survey.--The Secretary shall conduct a survey during 
     fiscal year 2008 and each subsequent fiscal year for the 
     purpose of determining interest and allocations for the 
     Prairie Pothole Region to enroll eligible land described in 
     section 1237(c)(2)(B).
       ``(2) Annual adjustment.--The Secretary shall make an 
     adjustment to the allocation for an interested State for a 
     fiscal year, based on the results of the survey conducted 
     under paragraph (1) for the State during the previous fiscal 
     year.''.

     SEC. 2204. TERMS OF WETLANDS RESERVE PROGRAM EASEMENTS.

       Section 1237A(b)(2)(B) of the Food Security Act of 1985 (16 
     U.S.C. 3837a(b)(2)(B)) is amended--
       (1) in clause (i), by striking ``or'' at the end;
       (2) in clause (ii), by striking ``; and'' and inserting ``; 
     or''; and
       (3) by adding at the end the following new clause:
       ``(iii) to meet habitat needs of specific wildlife species; 
     and''.

     SEC. 2205. COMPENSATION FOR EASEMENTS UNDER WETLANDS RESERVE 
                   PROGRAM.

       Subsection (f) of section 1237A of the Food Security Act of 
     1985 (16 U.S.C. 3837a) is amended to read as follows:
       ``(f) Compensation.--
       ``(1) Determination.--Effective on the date of the 
     enactment of the Food, Conservation, and Energy Act of 2008, 
     the Secretary shall pay as compensation for a conservation 
     easement acquired under this subchapter the lowest of--
       ``(A) the fair market value of the land, as determined by 
     the Secretary, using the Uniform Standards of Professional 
     Appraisal Practices or an area-wide market analysis or 
     survey;
       ``(B) the amount corresponding to a geographical cap, as 
     determined by the Secretary in regulations; or
       ``(C) the offer made by the landowner.
       ``(2) Form of payment.--Compensation for an easement shall 
     be provided by the Secretary in the form of a cash payment, 
     in an amount determined under paragraph (1) and specified in 
     the easement agreement.
       ``(3) Payment schedule for easements.--
       ``(A) Easements valued at $500,000 or less.--For easements 
     valued at $500,000 or less, the Secretary may provide 
     easement payments in not more than 30 annual payments.
       ``(B) Easements in excess of $500,000.--For easements 
     valued at more than $500,000, the Secretary may provide 
     easement payments in at least 5, but not more than 30 annual 
     payments, except that, if the Secretary determines it would 
     further the purposes of the program, the Secretary may make a 
     lump sum payment for such an easement.
       ``(4) Restoration agreement payment limitation.--Payments 
     made to a person or legal

[[Page H3441]]

     entity, directly or indirectly, pursuant to a restoration 
     cost-share agreement under this subchapter may not exceed, in 
     the aggregate, $50,000 per year.
       ``(5) Enrollment procedure.--Lands may be enrolled under 
     this subchapter through the submission of bids under a 
     procedure established by the Secretary.''.

     SEC. 2206. WETLANDS RESERVE ENHANCEMENT PROGRAM AND RESERVED 
                   RIGHTS PILOT PROGRAM.

       Section 1237A of the Food Security Act of 1985 (16 U.S.C. 
     3837a) is amended by adding at the end the following new 
     subsection:
       ``(h) Wetlands Reserve Enhancement Program.--
       ``(1) Program authorized.--The Secretary may enter into 1 
     or more agreements with a State (including a political 
     subdivision or agency of a State), nongovernmental 
     organization, or Indian tribe to carry out a special wetlands 
     reserve enhancement program that the Secretary determines 
     would advance the purposes of this subchapter.
       ``(2) Reserved rights pilot program.--
       ``(A) Reservation of grazing rights.--As part of the 
     wetlands reserve enhancement program, the Secretary shall 
     carry out a pilot program for land in which a landowner may 
     reserve grazing rights in the warranty easement deed 
     restriction if the Secretary determines that the reservation 
     and use of the grazing rights--
       ``(i) is compatible with the land subject to the easement;
       ``(ii) is consistent with the long-term wetland protection 
     and enhancement goals for which the easement was established; 
     and
       ``(iii) complies with a conservation plan.
       ``(B) Duration.--The pilot program established under this 
     paragraph shall terminate on September 30, 2012.''.

     SEC. 2207. DUTIES OF SECRETARY OF AGRICULTURE UNDER WETLANDS 
                   RESERVE PROGRAM.

       Section 1237C of the Food Security Act of 1985 (16 U.S.C. 
     3837c) is amended--
       (1) in subsection (a)(1), by inserting ``including 
     necessary maintenance activities,'' after ``values,''; and
       (2) by striking subsection (c) and inserting the following 
     new subsection:
       ``(c) Ranking of Offers.--
       ``(1) Conservation benefits and funding considerations.--
     When evaluating offers from landowners, the Secretary may 
     consider--
       ``(A) the conservation benefits of obtaining an easement or 
     other interest in the land;
       ``(B) the cost-effectiveness of each easement or other 
     interest in eligible land, so as to maximize the 
     environmental benefits per dollar expended; and
       ``(C) whether the landowner or another person is offering 
     to contribute financially to the cost of the easement or 
     other interest in the land to leverage Federal funds.
       ``(2) Additional considerations.--In determining the 
     acceptability of easement offers, the Secretary may take into 
     consideration--
       ``(A) the extent to which the purposes of the easement 
     program would be achieved on the land;
       ``(B) the productivity of the land; and
       ``(C) the on-farm and off-farm environmental threats if the 
     land is used for the production of agricultural 
     commodities.''.

     SEC. 2208. PAYMENT LIMITATIONS UNDER WETLANDS RESERVE 
                   CONTRACTS AND AGREEMENTS.

       Section 1237D(c)(1) of the Food Security Act of 1985 (16 
     U.S.C. 3837d(c)(1)) is amended--
       (1) by striking ``The total amount of easement payments 
     made to a person'' and inserting ``The total amount of 
     payments that a person or legal entity may receive, directly 
     or indirectly,''; and
       (2) by inserting ``or under 30-year contracts'' before the 
     period at the end.

     SEC. 2209. REPEAL OF PAYMENT LIMITATIONS EXCEPTION FOR STATE 
                   AGREEMENTS FOR WETLANDS RESERVE ENHANCEMENT.

       Section 1237D(c) of the Food Security Act of 1985 (16 
     U.S.C. 3837d(c)) is amended by striking paragraph (4).

     SEC. 2210. REPORT ON IMPLICATIONS OF LONG-TERM NATURE OF 
                   CONSERVATION EASEMENTS.

       (a) Report Required.--Not later than January 1, 2010, the 
     Secretary of Agriculture shall submit to the Committee on 
     Agriculture of the House of Representatives and the Committee 
     on Agriculture, Nutrition, and Forestry of the Senate a 
     report that evaluates the implications of the long-term 
     nature of conservation easements granted under section 1237A 
     of the Food Security Act of 1985 (16 U.S.C. 3837a) on 
     resources of the Department of Agriculture.
       (b) Inclusions.--The report required by subsection (a) 
     shall include the following:
       (1) Data relating to the number and location of 
     conservation easements granted under that section that the 
     Secretary holds or has a significant role in monitoring or 
     managing.
       (2) An assessment of the extent to which the oversight of 
     the conservation easement agreements impacts the availability 
     of resources, including technical assistance.
       (3) An assessment of the uses and value of agreements with 
     partner organizations.
       (4) Any other relevant information relating to costs or 
     other effects that would be helpful to the Committees 
     referred to in subsection (a).

              Subtitle D--Conservation Stewardship Program

     SEC. 2301. CONSERVATION STEWARDSHIP PROGRAM.

       (a) Establishment of Program.--Chapter 2 of subtitle D of 
     title XII of the Food Security Act of 1985 is amended--
       (1) by redesignating subchapters B (farmland protection 
     program) and C (grassland reserve program) as subchapters C 
     and D, respectively; and
       (2) by inserting after subchapter A the following new 
     subchapter:

            ``Subchapter B--Conservation Stewardship Program

     ``SEC. 1238D. DEFINITIONS.

       ``In this subchapter:
       ``(1) Conservation activities.--
       ``(A) In general.--The term `conservation activities' means 
     conservation systems, practices, or management measures that 
     are designed to address a resource concern.
       ``(B) Inclusions.--The term `conservation activities' 
     includes--
       ``(i) structural measures, vegetative measures, and land 
     management measures, including agriculture drainage 
     management systems, as determined by the Secretary; and
       ``(ii) planning needed to address a resource concern.
       ``(2) Conservation measurement tools.--The term 
     `conservation measurement tools' means procedures to estimate 
     the level of environmental benefit to be achieved by a 
     producer in implementing conservation activities, including 
     indices or other measures developed by the Secretary.
       ``(3) Conservation stewardship plan.--The term 
     `conservation stewardship plan' means a plan that--
       ``(A) identifies and inventories resource concerns;
       ``(B) establishes benchmark data and conservation 
     objectives;
       ``(C) describes conservation activities to be implemented, 
     managed, or improved; and
       ``(D) includes a schedule and evaluation plan for the 
     planning, installation, and management of the new and 
     existing conservation activities.
       ``(4) Priority resource concern.--The term `priority 
     resource concern' means a resource concern that is identified 
     at the State level, in consultation with the State Technical 
     Committee, as a priority for a particular watershed or area 
     of the State.
       ``(5) Program.--The term `program' means the conservation 
     stewardship program established by this subchapter.
       ``(6) Resource concern.--The term `resource concern' means 
     a specific natural resource impairment or problem, as 
     determined by the Secretary, that--
       ``(A) represents a significant concern in a State or 
     region; and
       ``(B) is likely to be addressed successfully through the 
     implementation of conservation activities by producers on 
     land eligible for enrollment in the program.
       ``(7) Stewardship threshold.--The term `stewardship 
     threshold' means the level of natural resource conservation 
     and environmental management required, as determined by the 
     Secretary using conservation measurement tools, to improve 
     and conserve the quality and condition of a resource concern.

     ``SEC. 1238E. CONSERVATION STEWARDSHIP PROGRAM.

       ``(a) Establishment and Purpose.--During each of fiscal 
     years 2009 through 2012, the Secretary shall carry out a 
     conservation stewardship program to encourage producers to 
     address resource concerns in a comprehensive manner--
       ``(1) by undertaking additional conservation activities; 
     and
       ``(2) by improving, maintaining and managing existing 
     conservation activities.
       ``(b) Eligible Land.--
       ``(1) In general.--Except as provided in subsection (c), 
     the following land is eligible for enrollment in the program:
       ``(A) Private agricultural land (including cropland, 
     grassland, prairie land, improved pastureland, rangeland, and 
     land used for agro-forestry).
       ``(B) Agricultural land under the jurisdiction of an Indian 
     tribe.
       ``(C) Forested land that is an incidental part of an 
     agricultural operation.
       ``(D) Other private agricultural land (including cropped 
     woodland, marshes, and agricultural land used for the 
     production of livestock) on which resource concerns related 
     to agricultural production could be addressed by enrolling 
     the land in the program, as determined by the Secretary.
       ``(2) Special rule for nonindustrial private forest land.--
     Nonindustrial private forest land is eligible for enrollment 
     in the program, except that not more than 10 percent of the 
     annual acres enrolled nationally in any fiscal year may be 
     nonindustrial private forest land.
       ``(3) Agricultural operation.--Eligible land shall include 
     all acres of an agricultural operation of a producer, whether 
     or not contiguous, that are under the effective control of 
     the producer at the time the producer enters into a 
     stewardship contract, and is operated by the producer with 
     equipment, labor, management, and production or cultivation 
     practices that are substantially separate from other 
     agricultural operations, as determined by the Secretary.
       ``(c) Exclusions.--
       ``(1) Land enrolled in other conservation programs.--
     Subject to paragraph (2), the following land is not be 
     eligible for enrollment in the program:
       ``(A) Land enrolled in the conservation reserve program.
       ``(B) Land enrolled in the wetlands reserve program.
       ``(C) Land enrolled in the grassland reserve program.
       ``(2) Conversion to cropland.--Land used for crop 
     production after the date of enactment of the Food, 
     Conservation, and Energy Act of 2008 that had not been 
     planted, considered to be planted, or devoted to crop 
     production for at least 4 of the 6 years preceding that date 
     shall not be the basis for any payment under the program, 
     unless the land does not meet the requirement because--

[[Page H3442]]

       ``(A) the land had previously been enrolled in the 
     conservation reserve program;
       ``(B) the land has been maintained using long-term crop 
     rotation practices, as determined by the Secretary; or
       ``(C) the land is incidental land needed for efficient 
     operation of the farm or ranch, as determined by the 
     Secretary.

     ``SEC. 1238F. STEWARDSHIP CONTRACTS.

       ``(a) Submission of Contract Offers.--To be eligible to 
     participate in the conservation stewardship program, a 
     producer shall submit to the Secretary for approval a 
     contract offer that--
       ``(1) demonstrates to the satisfaction of the Secretary 
     that the producer, at the time of the contract offer, is 
     meeting the stewardship threshold for at least one resource 
     concern; and
       ``(2) would, at a minimum, meet or exceed the stewardship 
     threshold for at least 1 priority resource concern by the end 
     of the stewardship contract by--
       ``(A) installing and adopting additional conservation 
     activities; and
       ``(B) improving, maintaining, and managing conservation 
     activities in place at the operation of the producer at the 
     time the contract offer is accepted by the Secretary.
       ``(b) Evaluation of Contract Offers.--
       ``(1) Ranking of applications.--In evaluating contract 
     offers made by producers to enter into contracts under the 
     program, the Secretary shall rank applications based on--
       ``(A) the level of conservation treatment on all applicable 
     priority resource concerns at the time of application, based 
     to the maximum extent practicable on conservation measurement 
     tools;
       ``(B) the degree to which the proposed conservation 
     treatment on applicable priority resource concerns 
     effectively increases conservation performance, based to the 
     maximum extent possible on conservation measurement tools;
       ``(C) the number of applicable priority resource concerns 
     proposed to be treated to meet or exceed the stewardship 
     threshold by the end of the contract;
       ``(D) the extent to which other resource concerns, in 
     addition to priority resource concerns, will be addressed to 
     meet or exceed the stewardship threshold by the end of the 
     contract period; and
       ``(E) the extent to which the actual and anticipated 
     environmental benefits from the contract are provided at the 
     least cost relative to other similarly beneficial contract 
     offers.
       ``(2) Prohibition.--The Secretary may not assign a higher 
     priority to any application because the applicant is willing 
     to accept a lower payment than the applicant would otherwise 
     be eligible to receive.
       ``(3) Additional criteria.--The Secretary may develop and 
     use such additional criteria for evaluating applications to 
     enroll in the program that the Secretary determines are 
     necessary to ensure that national, State, and local 
     conservation priorities are effectively addressed.
       ``(c) Entering Into Contracts.--After a determination that 
     a producer is eligible for the program under subsection (a), 
     and a determination that the contract offer ranks 
     sufficiently high under the evaluation criteria under 
     subsection (b), the Secretary shall enter into a conservation 
     stewardship contract with the producer to enroll the land to 
     be covered by the contract.
       ``(d) Contract Provisions.--
       ``(1) Term.--A conservation stewardship contract shall be 
     for a term of 5 years.
       ``(2) Provisions.--The conservation stewardship contract of 
     a producer shall--
       ``(A) state the amount of the payment the Secretary agrees 
     to make to the producer for each year of the conservation 
     stewardship contract under section 1238G(e);
       ``(B) require the producer--
       ``(i) to implement during the term of the conservation 
     stewardship contract the conservation stewardship plan 
     approved by the Secretary;
       ``(ii) to maintain, and make available to the Secretary at 
     such times as the Secretary may request, appropriate records 
     showing the effective and timely implementation of the 
     conservation stewardship contract; and
       ``(iii) not to engage in any activity during the term of 
     the conservation stewardship contract on the eligible land 
     covered by the contract that would interfere with the 
     purposes of the conservation stewardship contract;
       ``(C) permit all economic uses of the land that--
       ``(i) maintain the agricultural nature of the land; and
       ``(ii) are consistent with the conservation purposes of the 
     conservation stewardship contract;
       ``(D) include a provision to ensure that a producer shall 
     not be considered in violation of the contract for failure to 
     comply with the contract due to circumstances beyond the 
     control of the producer, including a disaster or related 
     condition, as determined by the Secretary; and
       ``(E) include such other provisions as the Secretary 
     determines necessary to ensure the purposes of the program 
     are achieved.
       ``(e) Contract Renewal.--At the end of an initial 
     conservation stewardship contract of a producer, the 
     Secretary may allow the producer to renew the contract for 
     one additional five-year period if the producer--
       ``(1) demonstrates compliance with the terms of the 
     existing contract; and
       ``(2) agrees to adopt new conservation activities, as 
     determined by the Secretary.
       ``(f) Modification.--The Secretary may allow a producer to 
     modify a stewardship contract if the Secretary determines 
     that the modification is consistent with achieving the 
     purposes of the program.
       ``(g) Contract Termination.--
       ``(1) Voluntary termination.--A producer may terminate a 
     conservation stewardship contract if the Secretary determines 
     that termination would not defeat the purposes of the 
     program.
       ``(2) Involuntary termination.--The Secretary may terminate 
     a contract under this subchapter if the Secretary determines 
     that the producer violated the contract.
       ``(3) Repayment.--If a contract is terminated, the 
     Secretary may, consistent with the purposes of the program--
       ``(A) allow the producer to retain payments already 
     received under the contract; or
       ``(B) require repayment, in whole or in part, of payments 
     already received and assess liquidated damages.
       ``(4) Change of interest in land subject to a contract.--
       ``(A) In general.--Except as provided in paragraph (B), a 
     change in the interest of a producer in land covered by a 
     contract under this chapter shall result in the termination 
     of the contract with regard to that land.
       ``(B) Transfer of duties and rights.--Subparagraph (A) 
     shall not apply if--
       ``(i) within a reasonable period of time (as determined by 
     the Secretary) after the date of the change in the interest 
     in land covered by a contract under the program, the 
     transferee of the land provides written notice to the 
     Secretary that all duties and rights under the contract have 
     been transferred to, and assumed by, the transferee; and
       ``(ii) the transferee meets the eligibility requirements of 
     the program.
       ``(h) Coordination With Organic Certification.--The 
     Secretary shall establish a transparent means by which 
     producers may initiate organic certification under the 
     Organic Foods Production Act of 1990 (7 U.S.C. 6501 et. seq.) 
     while participating in a contract under this subchapter.
       ``(i) On-Farm Research and Demonstration or Pilot 
     Testing.--The Secretary may approve a contract offer under 
     this subchapter that includes--
       ``(1) on-farm conservation research and demonstration 
     activities; and
       ``(2) pilot testing of new technologies or innovative 
     conservation practices.

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

       ``(a) In General.--To achieve the conservation goals of a 
     contract under the conservation stewardship program, the 
     Secretary shall--
       ``(1) make the program available to eligible producers on a 
     continuous enrollment basis with 1 or more ranking periods, 
     one of which shall occur in the first quarter of each fiscal 
     year;
       ``(2) identify not less than 3 nor more than 5 priority 
     resource concerns in a particular watershed or other 
     appropriate region or area within a State; and
       ``(3) develop reliable conservation measurement tools for 
     purposes of carrying out the program.
       ``(b) Allocation to States.--The Secretary shall allocate 
     acres to States for enrollment, based--
       ``(1) primarily on each State's proportion of eligible 
     acres under section 1238E(b)(1) to the total number of 
     eligible acres in all States; and
       ``(2) also on consideration of--
       ``(A) the extent and magnitude of the conservation needs 
     associated with agricultural production in each State;
       ``(B) the degree to which implementation of the program in 
     the State is, or will be, effective in helping producers 
     address those needs; and
       ``(C) other considerations to achieve equitable geographic 
     distribution of funds, as determined by the Secretary.
       ``(c) Specialty Crop and Organic Producers.--The Secretary 
     shall ensure that outreach and technical assistance are 
     available, and program specifications are appropriate to 
     enable specialty crop and organic producers to participate in 
     the program.
       ``(d) Acreage Enrollment Limitation.--During the period 
     beginning on October 1, 2008, and ending on September 30, 
     2017, the Secretary shall, to the maximum extent 
     practicable--
       ``(1) enroll in the program an additional 12,769,000 acres 
     for each fiscal year; and
       ``(2) manage the program to achieve a national average rate 
     of $18 per acre, which shall include the costs of all 
     financial assistance, technical assistance, and any other 
     expenses associated with enrollment or participation in the 
     program.
       ``(e) Conservation Stewardship Payments.--
       ``(1) Availability of payments.--The Secretary shall 
     provide a payment under the program to compensate the 
     producer for--
       ``(A) installing and adopting additional conservation 
     activities; and
       ``(B) improving, maintaining, and managing conservation 
     activities in place at the operation of the producer at the 
     time the contract offer is accepted by the Secretary.
       ``(2) Payment amount.--The amount of the conservation 
     stewardship payment shall be determined by the Secretary and 
     based, to the maximum extent practicable, on the following 
     factors:
       ``(A) Costs incurred by the producer associated with 
     planning, design, materials, installation, labor, management, 
     maintenance, or training.
       ``(B) Income forgone by the producer.
       ``(C) Expected environmental benefits as determined by 
     conservation measurement tools.
       ``(3) Exclusions.--A payment to a producer under this 
     subsection shall not be provided for--
       ``(A) the design, construction, or maintenance of animal 
     waste storage or treatment facilities or associated waste 
     transport or transfer devices for animal feeding operations; 
     or
       ``(B) conservation activities for which there is no cost 
     incurred or income forgone to the producer.
       ``(4) Timing of payments.--
       ``(A) In general.--The Secretary shall make payments as 
     soon as practicable after October 1 of each fiscal year for 
     activities carried out in the previous fiscal year.

[[Page H3443]]

       ``(B) Additional activities.--The Secretary shall make 
     payments to compensate producers for installation of 
     additional practices at the time at which the practices are 
     installed and adopted.
       ``(f) Supplemental Payments for Resource-Conserving Crop 
     Rotations.--
       ``(1) Availability of payments.--The Secretary shall 
     provide additional payments to producers that, in 
     participating in the program, agree to adopt resource-
     conserving crop rotations to achieve beneficial crop 
     rotations as appropriate for the land of the producers.
       ``(2) Beneficial crop rotations.--The Secretary shall 
     determine whether a resource-conserving crop rotation is a 
     beneficial crop rotation eligible for additional payments 
     under paragraph (1), based on whether the resource-conserving 
     crop rotation is designed to provide natural resource 
     conservation and production benefits.
       ``(3) Eligibility.--To be eligible to receive a payment 
     described in paragraph (1), a producer shall agree to adopt 
     and maintain beneficial resource-conserving crop rotations 
     for the term of the contract.
       ``(4) Resource-conserving crop rotation.--In this 
     subsection, the term `resource-conserving crop rotation' 
     means a crop rotation that--
       ``(A) includes at least 1 resource conserving crop (as 
     defined by the Secretary);
       ``(B) reduces erosion;
       ``(C) improves soil fertility and tilth;
       ``(D) interrupts pest cycles; and
       ``(E) in applicable areas, reduces depletion of soil 
     moisture or otherwise reduces the need for irrigation.
       ``(g) Payment Limitations.--A person or legal entity may 
     not receive, directly or indirectly, payments under this 
     subchapter that, in the aggregate, exceed $200,000 for all 
     contracts entered into during any 5-year period, excluding 
     funding arrangements with federally recognized Indian tribes 
     or Alaska Native corporations, regardless of the number of 
     contracts entered into under the program by the person or 
     entity.
       ``(h) Regulations.--The Secretary shall promulgate 
     regulations that--
       ``(1) prescribe such other rules as the Secretary 
     determines to be necessary to ensure a fair and reasonable 
     application of the limitations established under subsection 
     (g); and
       ``(2) otherwise enable the Secretary to carry out the 
     program.
       ``(i) Data.--The Secretary shall maintain detailed and 
     segmented data on contracts and payments under the program to 
     allow for quantification of the amount of payments made for--
       ``(1) the installation and adoption of additional 
     conservation activities and improvements to conservation 
     activities in place on the operation of a producer at the 
     time the conservation stewardship offer is accepted by the 
     Secretary;
       ``(2) participation in research, demonstration, and pilot 
     projects; and
       ``(3) the development and periodic assessment and 
     evaluation of conservation plans developed under this 
     subchapter.''.
       (b) Termination of Conservation Security Program Authority; 
     Effect on Existing Contracts.--Section 1238A of the Food 
     Security Act of 1985 (16 U.S.C. 3838a) is amended by adding 
     at the end the following new subsection:
       ``(g) Prohibition on Conservation Security Program 
     Contracts; Effect on Existing Contracts.--
       ``(1) Prohibition.--A conservation security contract may 
     not be entered into or renewed under this subchapter after 
     September 30, 2008.
       ``(2) Exception.--This subchapter, and the terms and 
     conditions of the conservation security program, shall 
     continue to apply to--
       ``(A) conservation security contracts entered into on or 
     before September 30, 2008; and
       ``(B) any conservation security contract entered into after 
     that date, but for which the application for the contract was 
     received during the 2008 sign-up period.
       ``(3) Effect on payments.--The Secretary shall make 
     payments under this subchapter with respect to conservation 
     security contracts described in paragraph (2) during the 
     remaining term of the contracts.
       ``(4) Regulations.--A contract described in paragraph (2) 
     may not be administered under the regulations issued to carry 
     out the conservation stewardship program.''.
       (c) Reference to Redesignated Subchapter.--Section 
     1238A(b)(3)(C) of title XII of the Food Security Act of 1985 
     (16 U.S.C. 3838a(b)(3)(C)) is amended by striking 
     ``subchapter C'' and inserting ``subchapter D''.

         Subtitle E--Farmland Protection and Grassland Reserve

     SEC. 2401. FARMLAND PROTECTION PROGRAM.

       (a) Definitions.--Section 1238H of the Food Security Act of 
     1985 (16 U.S.C. 3838h) is amended--
       (1) by striking paragraph (1) and inserting the following 
     new paragraph:
       ``(1) Eligible entity.--The term `eligible entity' means--
       ``(A) any agency of any State or local government or an 
     Indian tribe (including a farmland protection board or land 
     resource council established under State law); or
       ``(B) any organization that--
       ``(i) is organized for, and at all times since the 
     formation of the organization has been operated principally 
     for, 1 or more of the conservation purposes specified in 
     clause (i), (ii), (iii), or (iv) of section 170(h)(4)(A) of 
     the Internal Revenue Code of 1986;
       ``(ii) is an organization described in section 501(c)(3) of 
     that Code that is exempt from taxation under section 501(a) 
     of that Code; and
       ``(iii) is--

       ``(I) described in paragraph (1) or (2) of section 509(a) 
     of that Code; or
       ``(II) described in section 509(a)(3), and is controlled by 
     an organization described in section 509(a)(2), of that 
     Code.''; and

       (2) in paragraph (2)--
       (A) in subparagraph (A)--
       (i) by striking ``that--'' and inserting ``that is subject 
     to a pending offer for purchase from an eligible entity and--
     ''; and
       (ii) by striking clauses (i) and (ii) and inserting the 
     following new clauses:
       ``(i) has prime, unique, or other productive soil;
       ``(ii) contains historical or archaeological resources; or
       ``(iii) the protection of which will further a State or 
     local policy consistent with the purposes of the program.''; 
     and
       (B) in subparagraph (B)--
       (i) in clause (iv), by striking ``and'' at the end; and
       (ii) by striking clause (v) and inserting the following new 
     clauses:
       ``(v) forest land that--

       ``(I) contributes to the economic viability of an 
     agricultural operation; or
       ``(II) serves as a buffer to protect an agricultural 
     operation from development; and

       ``(vi) land that is incidental to land described in clauses 
     (i) through (v), if such land is necessary for the efficient 
     administration of a conservation easement, as determined by 
     the Secretary.''.
       (b) Farmland Protection.--Section 1238I of the Food 
     Security Act of 1985 (16 U.S.C. 3838i) is amended to read as 
     follows:

     ``SEC. 1238I. FARMLAND PROTECTION PROGRAM.

       ``(a) Establishment.--The Secretary shall establish and 
     carry out a farmland protection program under which the 
     Secretary shall facilitate and provide funding for the 
     purchase of conservation easements or other interests in 
     eligible land.
       ``(b) Purpose.--The purpose of the program is to protect 
     the agricultural use and related conservation values of 
     eligible land by limiting nonagricultural uses of that land.
       ``(c) Cost-Share Assistance.--
       ``(1) Provision of assistance.--The Secretary shall provide 
     cost-share assistance to eligible entities for purchasing a 
     conservation easement or other interest in eligible land.
       ``(2) Federal share.--The share of the cost provided by the 
     Secretary for purchasing a conservation easement or other 
     interest in eligible land shall not exceed 50 percent of the 
     appraised fair market value of the conservation easement or 
     other interest in eligible land.
       ``(3) Non-federal share.--
       ``(A) Share provided by eligible entity.--The eligible 
     entity shall provide a share of the cost of purchasing a 
     conservation easement or other interest in eligible land in 
     an amount that is not less than 25 percent of the acquisition 
     purchase price.
       ``(B) Landowner contribution.--As part of the non-Federal 
     share of the cost of purchasing a conservation easement or 
     other interest in eligible land, an eligible entity may 
     include a charitable donation or qualified conservation 
     contribution (as defined by section 170(h) of the Internal 
     Revenue Code of 1986) from the private landowner from which 
     the conservation easement or other interest in land will be 
     purchased.
       ``(d) Determination of Fair Market Value.--Effective on the 
     date of enactment of the Food, Conservation, and Energy Act 
     of 2008, the fair market value of the conservation easement 
     or other interest in eligible land shall be determined on the 
     basis of an appraisal using an industry approved method, 
     selected by the eligible entity and approved by the 
     Secretary.
       ``(e) Bidding Down Prohibited.--If the Secretary determines 
     that 2 or more applications for cost-share assistance are 
     comparable in achieving the purpose of the program, the 
     Secretary shall not assign a higher priority to any 1 of 
     those applications solely on the basis of lesser cost to the 
     program.
       ``(f) Condition on Assistance.--
       ``(1) Conservation plan.--Any highly erodible cropland for 
     which a conservation easement or other interest is purchased 
     using cost-share assistance provided under the program shall 
     be subject to a conservation plan that requires, at the 
     option of the Secretary, the conversion of the cropland to 
     less intensive uses.
       ``(2) Contingent right of enforcement.--The Secretary shall 
     require the inclusion of a contingent right of enforcement 
     for the Secretary in the terms of a conservation easement or 
     other interest in eligible land that is purchased using cost-
     share assistance provided under the program.
       ``(g) Agreements With Eligible Entities.--
       ``(1) In general.--The Secretary shall enter into 
     agreements with eligible entities to stipulate the terms and 
     conditions under which the eligible entity is permitted to 
     use cost-share assistance provided under subsection (c).
       ``(2) Length of agreements.--An agreement under this 
     subsection shall be for a term that is--
       ``(A) in the case of an eligible entity certified under the 
     process described in subsection (h), a minimum of five years; 
     and
       ``(B) for all other eligible entities, at least three, but 
     not more than five years.
       ``(3) Substitution of qualified projects.--An agreement 
     shall allow, upon mutual agreement of the parties, 
     substitution of qualified projects that are identified at the 
     time of the proposed substitution.
       ``(4) Minimum requirements.--An eligible entity shall be 
     authorized to use its own terms and conditions, as approved 
     by the Secretary, for conservation easements and other 
     purchases of interests in land, so long as such terms and 
     conditions--
       ``(A) are consistent with the purposes of the program;
       ``(B) permit effective enforcement of the conservation 
     purposes of such easements or other interests; and
       ``(C) include a limit on the impervious surfaces to be 
     allowed that is consistent with the agricultural activities 
     to be conducted.

[[Page H3444]]

       ``(5) Effect of violation.--If a violation occurs of a term 
     or condition of an agreement entered into under this 
     subsection--
       ``(A) the agreement shall remain in force; and
       ``(B) the Secretary may require the eligible entity to 
     refund all or part of any payments received by the entity 
     under the program, with interest on the payments as 
     determined appropriate by the Secretary.
       ``(h) Certification of Eligible Entities.--
       ``(1) Certification process.--The Secretary shall establish 
     a process under which the Secretary may--
       ``(A) directly certify eligible entities that meet 
     established criteria;
       ``(B) enter into long-term agreements with certified 
     entities, as authorized by subsection (g)(2)(A); and
       ``(C) accept proposals for cost-share assistance to 
     certified entities for the purchase of conservation easements 
     or other interests in eligible land throughout the duration 
     of such agreements.
       ``(2) Certification criteria.--In order to be certified, an 
     eligible entity shall demonstrate to the Secretary that the 
     entity will maintain, at a minimum, for the duration of the 
     agreement--
       ``(A) a plan for administering easements that is consistent 
     with the purpose of this subchapter;
       ``(B) the capacity and resources to monitor and enforce 
     conservation easements or other interests in land; and
       ``(C) policies and procedures to ensure--
       ``(i) the long-term integrity of conservation easements or 
     other interests in eligible land;
       ``(ii) timely completion of acquisitions of easements or 
     other interests in eligible land; and
       ``(iii) timely and complete evaluation and reporting to the 
     Secretary on the use of funds provided by the Secretary under 
     the program.
       ``(3) Review and revision.--
       ``(A) Review.--The Secretary shall conduct a review of 
     eligible entities certified under paragraph (1) every three 
     years to ensure that such entities are meeting the criteria 
     established under paragraph (2).
       ``(B) Revocation.--If the Secretary finds that the 
     certified entity no longer meets the criteria established 
     under paragraph (2), the Secretary may--
       ``(i) allow the certified entity a specified period of 
     time, at a minimum 180 days, in which to take such actions as 
     may be necessary to meet the criteria; and
       ``(ii) revoke the certification of the entity, if after the 
     specified period of time, the certified entity does not meet 
     the criteria established in paragraph (2).''.

     SEC. 2402. FARM VIABILITY PROGRAM.

       Section 1238J(b) of the Food Security Act of 1985 (16 
     U.S.C. 3838j(b)) is amended by striking ``2007'' and 
     inserting ``2012''.

     SEC. 2403. GRASSLAND RESERVE PROGRAM.

       Subchapter D of chapter 2 of subtitle D of title XII of the 
     Food Security Act of 1985 (16 U.S.C. 3838n et seq.), as 
     redesignated by section 2301(a)(1), is amended to read as 
     follows:

               ``Subchapter D--Grassland Reserve Program

     ``SEC. 1238N. GRASSLAND RESERVE PROGRAM.

       ``(a) Establishment and Purpose.--The Secretary shall 
     establish a grassland reserve program (referred to in this 
     subchapter as the `program') for the purpose of assisting 
     owners and operators in protecting grazing uses and related 
     conservation values by restoring and conserving eligible land 
     through rental contracts, easements, and restoration 
     agreements.
       ``(b) Enrollment of Acreage.--
       ``(1) Acreage enrolled.--The Secretary shall enroll an 
     additional 1,220,000 acres of eligible land in the program 
     during fiscal years 2009 through 2012.
       ``(2) Methods of enrollment.--The Secretary shall enroll 
     eligible land in the program through the use of;
       ``(A) a 10-year, 15-year, or 20-year rental contract;
       ``(B) a permanent easement; or
       ``(C) in a State that imposes a maximum duration for 
     easements, an easement for the maximum duration allowed under 
     the law of that State.
       ``(3) Limitation.--Of the total amount of funds expended 
     under the program to acquire rental contracts and easements 
     described in paragraph (2), the Secretary shall use, to the 
     extent practicable--
       ``(A) 40 percent for rental contacts; and
       ``(B) 60 percent for easements.
       ``(4) Enrollment of conservation reserve land.--
       ``(A) Priority.--Upon expiration of a contract under 
     subchapter B of chapter 1 of this subtitle, the Secretary 
     shall give priority for enrollment in the program to land 
     previously enrolled in the conservation reserve program if--
       ``(i) the land is eligible land, as defined in subsection 
     (c); and
       ``(ii) the Secretary determines that the land is of high 
     ecological value and under significant threat of conversion 
     to uses other than grazing.
       ``(B) Maximum enrollment.--The number of acres of land 
     enrolled under the priority described in subparagraph (A) in 
     a calendar year shall not exceed 10 percent of the total 
     number of acres enrolled in the program in that calendar 
     year.
       ``(c) Eligible Land Defined.--For purposes of the program, 
     the term `eligible land' means private or tribal land that--
       ``(1) is grassland, land that contains forbs, or shrubland 
     (including improved rangeland and pastureland) for which 
     grazing is the predominant use;
       ``(2) is located in an area that has been historically 
     dominated by grassland, forbs, or shrubland, and the land--
       ``(A) could provide habitat for animal or plant populations 
     of significant ecological value if the land--
       ``(i) is retained in its current use; or
       ``(ii) is restored to a natural condition;
       ``(B) contains historical or archaeological resources; or
       ``(C) would address issues raised by State, regional, and 
     national conservation priorities; or
       ``(3) is incidental to land described in paragraph (1) or 
     (2), if the incidental land is determined by the Secretary to 
     be necessary for the efficient administration of a rental 
     contract or easement under the program.

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

       ``(a) Rental Contracts.--To be eligible to enroll eligible 
     land in the program under a rental contract, the owner or 
     operator of the land shall agree--
       ``(1) to comply with the terms of the contract and, when 
     applicable, a restoration agreement;
       ``(2) to suspend any existing cropland base and allotment 
     history for the land under another program administered by 
     the Secretary; and
       ``(3) to implement a grazing management plan, as approved 
     by the Secretary, which may be modified upon mutual agreement 
     of the parties.
       ``(b) Easements.--To be eligible to enroll eligible land in 
     the program through an easement, the owner of the land shall 
     agree--
       ``(1) to grant an easement to the Secretary or to an 
     eligible entity described in section 1238Q;
       ``(2) to create and record an appropriate deed restriction 
     in accordance with applicable State law to reflect the 
     easement;
       ``(3) to provide a written statement of consent to the 
     easement signed by persons holding a security interest or any 
     vested interest in the land;
       ``(4) to provide proof of unencumbered title to the 
     underlying fee interest in the land that is the subject of 
     the easement;
       ``(5) to comply with the terms of the easement and, when 
     applicable, a restoration agreement;
       ``(6) to implement a grazing management plan, as approved 
     by the Secretary, which may be modified upon mutual agreement 
     of the parties; and
       ``(7) to eliminate any existing cropland base and allotment 
     history for the land under another program administered by 
     the Secretary.
       ``(c) Restoration Agreements.--
       ``(1) When applicable.--To be eligible for cost-share 
     assistance to restore eligible land subject to a rental 
     contract or an easement under the program, the owner or 
     operator of the land shall agree to comply with the terms of 
     a restoration agreement.
       ``(2) Terms and conditions.--The Secretary shall prescribe 
     the terms and conditions of a restoration agreement by which 
     eligible land that is subject to a rental contract or 
     easement under the program shall be restored.
       ``(3) Duties.--The restoration agreement shall describe the 
     respective duties of the owner or operator and the Secretary, 
     including the Federal share of restoration payments and 
     technical assistance.
       ``(d) Terms and Conditions Applicable to Rental Contracts 
     and Easements.--
       ``(1) Permissible activities.--The terms and conditions of 
     a rental contract or easement under the program shall 
     permit--
       ``(A) common grazing practices, including maintenance and 
     necessary cultural practices, on the land in a manner that is 
     consistent with maintaining the viability of grassland, forb, 
     and shrub species appropriate to that locality;
       ``(B) haying, mowing, or harvesting for seed production, 
     subject to appropriate restrictions during the nesting season 
     for birds in the local area that are in significant decline 
     or are conserved in accordance with Federal or State law, as 
     determined by the State Conservationist;
       ``(C) fire presuppression, rehabilitation, and construction 
     of fire breaks; and
       ``(D) grazing related activities, such as fencing and 
     livestock watering.
       ``(2) Prohibitions.--The terms and conditions of a rental 
     contract or easement under the program shall prohibit--
       ``(A) the production of crops (other than hay), fruit 
     trees, vineyards, or any other agricultural commodity that is 
     inconsistent with maintaining grazing land; and
       ``(B) except as permitted under a restoration plan, the 
     conduct of any other activity that would be inconsistent with 
     maintaining grazing land enrolled in the program.
       ``(3) Additional terms and conditions.--A rental contract 
     or easement under the program shall include such additional 
     provisions as the Secretary determines are appropriate to 
     carry out or facilitate the purposes and administration of 
     the program.
       ``(e) Violations.--On a violation of the terms or 
     conditions of a rental contract, easement, or restoration 
     agreement entered into under this section--
       ``(1) the contract or easement shall remain in force; and
       ``(2) the Secretary may require the owner or operator to 
     refund all or part of any payments received under the 
     program, with interest on the payments as determined 
     appropriate by the Secretary.

     ``SEC. 1238P. DUTIES OF SECRETARY.

       ``(a) Evaluation and Ranking of Applications.--
       ``(1) Criteria.--The Secretary shall establish criteria to 
     evaluate and rank applications for rental contracts and 
     easements under the program.
       ``(2) Considerations.--In establishing the criteria, the 
     Secretary shall emphasize support for--
       ``(A) grazing operations;
       ``(B) plant and animal biodiversity; and
       ``(C) grassland, land that contains forbs, and shrubland 
     under the greatest threat of conversion to uses other than 
     grazing.
       ``(b) Payments.--
       ``(1) In general.--In return for the execution of a rental 
     contract or the granting of an easement by an owner or 
     operator under the program, the Secretary shall--

[[Page H3445]]

       ``(A) make rental contract or easement payments to the 
     owner or operator in accordance with paragraphs (2) and (3); 
     and
       ``(B) make payments to the owner or operator under a 
     restoration agreement for the Federal share of the cost of 
     restoration in accordance with paragraph (4).
       ``(2) Rental contract payments.--
       ``(A) Percentage of grazing value of land.--In return for 
     the execution of a rental contract by an owner or operator 
     under the program, the Secretary shall make annual payments 
     during the term of the contract in an amount, subject to 
     subparagraph (B), that is not more than 75 percent of the 
     grazing value of the land covered by the contract.
       ``(B) Payment limitation.--Payments made under 1 or more 
     rental contracts to a person or legal entity, directly or 
     indirectly, may not exceed, in the aggregate, $50,000 per 
     year.
       ``(3) Easement payments.--
       ``(A) In general.--Subject to subparagraph (B), in return 
     for the granting of an easement by an owner under the 
     program, the Secretary shall make easement payments in an 
     amount not to exceed the fair market value of the land less 
     the grazing value of the land encumbered by the easement.
       ``(B) Method for determination of compensation.--In making 
     a determination under subparagraph (A), the Secretary shall 
     pay as compensation for an easement acquired under the 
     program the lowest of--
       ``(i) the fair market value of the land encumbered by the 
     easement, as determined by the Secretary, using--

       ``(I) the Uniform Standards of Professional Appraisal 
     Practices; or
       ``(II) an area-wide market analysis or survey;

       ``(ii) the amount corresponding to a geographical cap, as 
     determined by the Secretary in regulations; or
       ``(iii) the offer made by the landowner.
       ``(C) Schedule.--Easement payments may be provided in up to 
     10 annual payments of equal or unequal amount, as agreed to 
     by the Secretary and the owner.
       ``(4) Restoration agreement payments.--
       ``(A) Federal share of restoration.--The Secretary shall 
     make payments to an owner or operator under a restoration 
     agreement of not more than 50 percent of the costs of 
     carrying out measures and practices necessary to restore 
     functions and values of that land.
       ``(B) Payment limitation.--Payments made under 1 or more 
     restoration agreements to a person or legal entity, directly 
     or indirectly, may not exceed, in the aggregate, $50,000 per 
     year.
       ``(5) Payments to others.--If an owner or operator who is 
     entitled to a payment under the program dies, becomes 
     incompetent, is otherwise unable to receive the payment, or 
     is succeeded by another person who renders or completes the 
     required performance, the Secretary shall make the payment, 
     in accordance with regulations promulgated by the Secretary 
     and without regard to any other provision of law, in such 
     manner as the Secretary determines is fair and reasonable in 
     light of all the circumstances.

     ``SEC. 1238Q. DELEGATION OF DUTY.

       ``(a) Authority to Delegate.--The Secretary may delegate a 
     duty under the program--
       ``(1) by transferring title of ownership to an easement to 
     an eligible entity to hold and enforce; or
       ``(2) by entering into a cooperative agreement with an 
     eligible entity for the eligible entity to own, write, and 
     enforce an easement.
       ``(b) Eligible Entity Defined.--In this section, the term 
     `eligible entity' means--
       ``(1) an agency of State or local government or an Indian 
     tribe; or
       ``(2) an organization that--
       ``(A) is organized for, and at all times since the 
     formation of the organization has been operated principally 
     for, one or more of the conservation purposes specified in 
     clause (i), (ii), (iii), or (iv) of section 170(h)(4)(A) of 
     the Internal Revenue Code of 1986;
       ``(B) is an organization described in section 501(c)(3) of 
     that Code that is exempt from taxation under section 501(a) 
     of that Code; and
       ``(C) is described in--
       ``(i) paragraph (1) or (2) of section 509(a) of that Code; 
     or
       ``(ii) in section 509(a)(3) of that Code, and is controlled 
     by an organization described in section 509(a)(2) of that 
     Code.
       ``(c) Transfer of Title of Ownership.--
       ``(1) Transfer.--The Secretary may transfer title of 
     ownership to an easement to an eligible entity to hold and 
     enforce, in lieu of the Secretary, subject to the right of 
     the Secretary to conduct periodic inspections and enforce the 
     easement, if--
       ``(A) the Secretary determines that the transfer will 
     promote protection of grassland, land that contains forbs, or 
     shrubland;
       ``(B) the owner authorizes the eligible entity to hold or 
     enforce the easement; and
       ``(C) the eligible entity agrees to assume the costs 
     incurred in administering and enforcing the easement, 
     including the costs of restoration or rehabilitation of the 
     land as specified by the owner and the eligible entity.
       ``(2) Application.--An eligible entity that seeks to hold 
     and enforce an easement shall apply to the Secretary for 
     approval.
       ``(3) Approval by secretary.--The Secretary may approve an 
     application described in paragraph (2) if the eligible 
     entity--
       ``(A) has the relevant experience necessary, as appropriate 
     for the application, to administer an easement on grassland, 
     land that contains forbs, or shrubland;
       ``(B) has a charter that describes a commitment to 
     conserving ranchland, agricultural land, or grassland for 
     grazing and conservation purposes; and
       ``(C) has the resources necessary to effectuate the 
     purposes of the charter.
       ``(d) Cooperative Agreements.--
       ``(1) Authorized; terms and conditions.--The Secretary 
     shall establish the terms and conditions of a cooperative 
     agreement under which an eligible entity shall use funds 
     provided by the Secretary to own, write, and enforce an 
     easement, in lieu of the Secretary.
       ``(2) Minimum requirements.--At a minimum, the cooperative 
     agreement shall--
       ``(A) specify the qualification of the eligible entity to 
     carry out the entity's responsibilities under the program, 
     including acquisition, monitoring, enforcement, and 
     implementation of management policies and procedures that 
     ensure the long-term integrity of the easement protections;
       ``(B) require the eligible entity to assume the costs 
     incurred in administering and enforcing the easement, 
     including the costs of restoration or rehabilitation of the 
     land as specified by the owner and the eligible entity;
       ``(C) specify the right of the Secretary to conduct 
     periodic inspections to verify the eligible entity's 
     enforcement of the easement;
       ``(D) subject to subparagraph (E), identify a specific 
     project or a range of projects to be funded under the 
     agreement;
       ``(E) allow, upon mutual agreement of the parties, 
     substitution of qualified projects that are identified at the 
     time of substitution;
       ``(F) specify the manner in which the eligible entity will 
     evaluate and report the use of funds to the Secretary;
       ``(G) allow the eligible entity flexibility to develop and 
     use terms and conditions for easements, if the Secretary 
     finds the terms and conditions consistent with the purposes 
     of the program and adequate to enable effective enforcement 
     of the easements;
       ``(H) if applicable, allow an eligible entity to include a 
     charitable donation or qualified conservation contribution 
     (as defined by section 170(h) of the Internal Revenue Code of 
     1986) from the landowner from which the easement will be 
     purchased as part of the entity's share of the cost to 
     purchase an easement; and
       ``(I) provide for a schedule of payments to an eligible 
     entity, as agreed to by the Secretary and the eligible 
     entity.
       ``(3) Cost sharing.--
       ``(A) In general.--As part of a cooperative agreement with 
     an eligible entity under this subsection, the Secretary may 
     provide a share of the purchase price of an easement under 
     the program.
       ``(B) Minimum share by eligible entity.--The eligible 
     entity shall be required to provide a share of the purchase 
     price at least equivalent to that provided by the Secretary.
       ``(C) Priority.--The Secretary may accord a higher priority 
     to proposals from eligible entities that leverage a greater 
     share of the purchase price of the easement.
       ``(4) Violation.--If an eligible entity violates the terms 
     or conditions of a cooperative agreement entered into under 
     this subsection--
       ``(A) the cooperative agreement shall remain in force; and
       ``(B) the Secretary may require the eligible entity to 
     refund all or part of any payments received by the eligible 
     entity under the program, with interest on the payments as 
     determined appropriate by the Secretary.
       ``(e) Protection of Federal Investment.--When delegating a 
     duty under this section, the Secretary shall ensure that the 
     terms of an easement include a contingent right of 
     enforcement for the Department.''.

          Subtitle F--Environmental Quality Incentives Program

     SEC. 2501. PURPOSES OF ENVIRONMENTAL QUALITY INCENTIVES 
                   PROGRAM.

       (a) Revised Purposes.--Section 1240 of the Food Security 
     Act of 1985 (16 U.S.C. 3839aa) is amended--
       (1) in the matter preceding paragraph (1), by inserting ``, 
     forest management,'' after ``agricultural production''; and
       (2) by striking paragraphs (3) and (4) and inserting the 
     following new paragraphs:
       ``(3) providing flexible assistance to producers to install 
     and maintain conservation practices that sustain food and 
     fiber production while--
       ``(A) enhancing soil, water, and related natural resources, 
     including grazing land, forestland, wetland, and wildlife; 
     and
       ``(B) conserving energy;
       ``(4) assisting producers to make beneficial, cost 
     effective changes to production systems (including 
     conservation practices related to organic production), 
     grazing management, fuels management, forest management, 
     nutrient management associated with livestock, pest or 
     irrigation management, or other practices on agricultural and 
     forested land; and''.
       (b) Technical Correction.--The Food Security Act of 1985 is 
     amended by inserting immediately before section 1240 (16 
     U.S.C. 3839aa) the following:

        ``CHAPTER 4--ENVIRONMENTAL QUALITY INCENTIVES PROGRAM''.

     SEC. 2502. DEFINITIONS.

       Section 1240A of the Food Security Act of 1985 (16 U.S.C. 
     3839aa-1) is amended to read as follows:

     ``SEC. 1240A. DEFINITIONS.

       ``In this chapter:
       ``(1) Eligible land.--
       ``(A) In general.--The term `eligible land' means land on 
     which agricultural commodities, livestock, or forest-related 
     products are produced.
       ``(B) Inclusions.--The term `eligible land' includes the 
     following:
       ``(i) Cropland.
       ``(ii) Grassland.
       ``(iii) Rangeland.
       ``(iv) Pasture land.
       ``(v) Nonindustrial private forest land.
       ``(vi) Other agricultural land (including cropped woodland, 
     marshes, and agricultural

[[Page H3446]]

     land used for the production of livestock) on which resource 
     concerns related to agricultural production could be 
     addressed through a contract under the program, as determined 
     by the Secretary.
       ``(2) National organic program.--The term `national organic 
     program' means the national organic program established under 
     the Organic Foods Production Act of 1990 (7 U.S.C. 6501 et 
     seq.).
       ``(3) Organic system plan.--The term `organic system plan' 
     means an organic plan approved under the national organic 
     program.
       ``(4) Payment.--The term `payment' means financial 
     assistance provided to a producer for performing practices 
     under this chapter, including compensation for--
       ``(A) incurred costs associated with planning, design, 
     materials, equipment, installation, labor, management, 
     maintenance, or training; and
       ``(B) income forgone by the producer.
       ``(5) Practice.--The term `practice' means 1 or more 
     improvements and conservation activities that are consistent 
     with the purposes of the program under this chapter, as 
     determined by the Secretary, including--
       ``(A) improvements to eligible land of the producer, 
     including--
       ``(i) structural practices;
       ``(ii) land management practices;
       ``(iii) vegetative practices;
       ``(iv) forest management; and
       ``(v) other practices that the Secretary determines would 
     further the purposes of the program; and
       ``(B) conservation activities involving the development of 
     plans appropriate for the eligible land of the producer, 
     including--
       ``(i) comprehensive nutrient management planning; and
       ``(ii) other plans that the Secretary determines would 
     further the purposes of the program under this chapter.
       ``(6) Program.--The term `program' means the environmental 
     quality incentives program established by this chapter.''.

     SEC. 2503. ESTABLISHMENT AND ADMINISTRATION OF ENVIRONMENTAL 
                   QUALITY INCENTIVES PROGRAM.

       Section 1240B of the Food Security Act of 1985 (16 U.S.C. 
     3839aa-2) is amended to read as follows:

     ``SEC. 1240B. ESTABLISHMENT AND ADMINISTRATION.

       ``(a) Establishment.--During each of the 2002 through 2012 
     fiscal years, the Secretary shall provide payments to 
     producers that enter into contracts with the Secretary under 
     the program.
       ``(b) Practices and Term.--
       ``(1) Practices.--A contract under the program may apply to 
     the performance of one or more practices.
       ``(2) Term.--A contract under the program shall have a term 
     that--
       ``(A) at a minimum, is equal to the period beginning on the 
     date on which the contract is entered into and ending on the 
     date that is one year after the date on which all practices 
     under the contract have been implemented; but
       ``(B) not to exceed 10 years.
       ``(c) Bidding Down.--If the Secretary determines that the 
     environmental values of two or more applications for payments 
     are comparable, the Secretary shall not assign a higher 
     priority to the application only because it would present the 
     least cost to the program.
       ``(d) Payments.--
       ``(1) Availability of payments.--Payments are provided to a 
     producer to implement one or more practices under the 
     program.
       ``(2) Limitation on payment amounts.--A payment to a 
     producer for performing a practice may not exceed, as 
     determined by the Secretary--
       ``(A) 75 percent of the costs associated with planning, 
     design, materials, equipment, installation, labor, 
     management, maintenance, or training;
       ``(B) 100 percent of income foregone by the producer; or
       ``(C) in the case of a practice consisting of elements 
     covered under subparagraphs (A) and (B)--
       ``(i) 75 percent of the costs incurred for those elements 
     covered under subparagraph (A); and
       ``(ii) 100 percent of income foregone for those elements 
     covered under subparagraph (B).
       ``(3) Special rule involving payments for foregone 
     income.--In determining the amount and rate of payments under 
     paragraph (2)(B), the Secretary may accord great significance 
     to a practice that, as determined by the Secretary, 
     promotes--
       ``(A) residue management;
       ``(B) nutrient management;
       ``(C) air quality management;
       ``(D) invasive species management;
       ``(E) pollinator habitat;
       ``(F) animal carcass management technology; or
       ``(G) pest management.
       ``(4) Increased payments for certain producers.--
       ``(A) In general.--Notwithstanding paragraph (2), in the 
     case of a producer that is a limited resource, socially 
     disadvantaged farmer or rancher or a beginning farmer or 
     rancher, the Secretary shall increase the amount that would 
     otherwise be provided to a producer under this subsection--
       ``(i) to not more than 90 percent of the costs associated 
     with planning, design, materials, equipment, installation, 
     labor, management, maintenance, or training; and
       ``(ii) to not less than 25 percent above the otherwise 
     applicable rate.
       ``(B) Advance payments.--Not more than 30 percent of the 
     amount determined under subparagraph (A) may be provided in 
     advance for the purpose of purchasing materials or 
     contracting.
       ``(5) Financial assistance from other sources.--Except as 
     provided in paragraph (6), any payments received by a 
     producer from a State or private organization or person for 
     the implementation of one or more practices on eligible land 
     of the producer shall be in addition to the payments provided 
     to the producer under this subsection.
       ``(6) Other payments.--A producer shall not be eligible for 
     payments for practices on eligible land under the program if 
     the producer receives payments or other benefits for the same 
     practice on the same land under another program under this 
     subtitle.
       ``(e) Modification or Termination of Contracts.--
       ``(1) Voluntary modification or termination.--The Secretary 
     may modify or terminate a contract entered into with a 
     producer under the program if--
       ``(A) the producer agrees to the modification or 
     termination; and
       ``(B) the Secretary determines that the modification or 
     termination is in the public interest.
       ``(2) Involuntary termination.--The Secretary may terminate 
     a contract under the program if the Secretary determines that 
     the producer violated the contract.
       ``(f) Allocation of Funding.--For each of fiscal years 2002 
     through 2012, 60 percent of the funds made available for 
     payments under the program shall be targeted at practices 
     relating to livestock production.
       ``(g) Funding for Federally Recognized Native American 
     Indian Tribes and Alaska Native Corporations.--The Secretary 
     may enter into alternative funding arrangements with 
     federally recognized Native American Indian Tribes and Alaska 
     Native Corporations (including their affiliated membership 
     organizations) if the Secretary determines that the goals and 
     objectives of the program will be met by such arrangements, 
     and that statutory limitations regarding contracts with 
     individual producers will not be exceeded by any Tribal or 
     Native Corporation member.
       ``(h) Water Conservation or Irrigation Efficiency 
     Practice.--
       ``(1) Availability of payments.--The Secretary may provide 
     payments under this subsection to a producer for a water 
     conservation or irrigation practice.
       ``(2) Priority.--In providing payments to a producer for a 
     water conservation or irrigation practice, the Secretary 
     shall give priority to applications in which--
       ``(A) consistent with the law of the State in which the 
     eligible land of the producer is located, there is a 
     reduction in water use in the operation of the producer; or
       ``(B) the producer agrees not to use any associated water 
     savings to bring new land, other than incidental land needed 
     for efficient operations, under irrigated production, unless 
     the producer is participating in a watershed-wide project 
     that will effectively conserve water, as determined by the 
     Secretary.
       ``(i) Payments for Conservation Practices Related to 
     Organic Production.--
       ``(1) Payments authorized.--The Secretary shall provide 
     payments under this subsection for conservation practices, on 
     some or all of the operations of a producer, related--
       ``(A) to organic production; and
       ``(B) to the transition to organic production.
       ``(2) Eligibility requirements.--As a condition for 
     receiving payments under this subsection, a producer shall 
     agree--
       ``(A) to develop and carry out an organic system plan; or
       ``(B) to develop and implement conservation practices for 
     certified organic production that are consistent with an 
     organic system plan and the purposes of this chapter.
       ``(3) Payment limitations.--Payments under this subsection 
     to a person or legal entity, directly or indirectly, may not 
     exceed, in the aggregate, $20,000 per year or $80,000 during 
     any 6-year period. In applying these limitations, the 
     Secretary shall not take into account payments received for 
     technical assistance.
       ``(4) Exclusion of certain organic certification costs.--
     Payments may not be made under this subsection to cover the 
     costs associated with organic certification that are eligible 
     for cost-share payments under section 10606 of the Farm 
     Security and Rural Investment Act of 2002 (7 U.S.C. 6523).
       ``(5) Termination of contracts.--The Secretary may cancel 
     or otherwise nullify a contract to provide payments under 
     this subsection if the Secretary determines that the 
     producer--
       ``(A) is not pursuing organic certification; or
       ``(B) is not in compliance with the Organic Foods 
     Production Act of 1990 (7 U.S.C. 6501 et seq.).''.

     SEC. 2504. EVALUATION OF APPLICATIONS.

       Section 1240C of the Food Security Act of 1985 (16 U.S.C. 
     3839aa-3) is amended to read as follows:

     ``SEC. 1240C. EVALUATION OF APPLICATIONS.

       ``(a) Evaluation Criteria.--The Secretary shall develop 
     criteria for evaluating applications that will ensure that 
     national, State, and local conservation priorities are 
     effectively addressed.
       ``(b) Prioritization of Applications.--In evaluating 
     applications under this chapter, the Secretary shall 
     prioritize applications--
       ``(1) based on their overall level of cost-effectiveness to 
     ensure that the conservation practices and approaches 
     proposed are the most efficient means of achieving the 
     anticipated environmental benefits of the project;
       ``(2) based on how effectively and comprehensively the 
     project addresses the designated resource concern or resource 
     concerns;
       ``(3) that best fulfill the purpose of the environmental 
     quality incentives program specified in section 1240(1); and
       ``(4) that improve conservation practices or systems in 
     place on the operation at the time the contract offer is 
     accepted or that will complete a conservation system.

[[Page H3447]]

       ``(c) Grouping of Applications.--To the greatest extent 
     practicable, the Secretary shall group applications of 
     similar crop or livestock operations for evaluation purposes 
     or otherwise evaluate applications relative to other 
     applications for similar farming operations.''.

     SEC. 2505. DUTIES OF PRODUCERS UNDER ENVIRONMENTAL QUALITY 
                   INCENTIVES PROGRAM.

       Section 1240D of the Food Security Act of 1985 (16 U.S.C. 
     3839aa-4) is amended--
       (1) in the matter preceding paragraph (1), by striking 
     ``technical assistance, cost-share payments, or incentive'';
       (2) in paragraph (2), by striking ``farm or ranch'' and 
     inserting ``farm, ranch, or forest land''; and
       (3) in paragraph (4), by striking ``cost-share payments and 
     incentive''.

     SEC. 2506. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM PLAN.

       (a) Plan of Operations.--Section 1240E(a) of the Food 
     Security Act of 1985 (16 U.S.C. 3839aa-5(a)) is amended--
       (1) in the subsection heading, by striking ``In General'' 
     and inserting ``Plan of Operations'';
       (2) in matter preceding paragraph (1), by striking ``cost-
     share payments or incentive'';
       (3) in paragraph (2), by striking ``and'' after the 
     semicolon at the end;
       (4) in paragraph (3), by striking the period at the end and 
     inserting ``; and''; and
       (5) by adding at the end the following new paragraph:
       ``(4) in the case of forest land, is consistent with the 
     provisions of a forest management plan that is approved by 
     the Secretary, which may include--
       ``(A) a forest stewardship plan described in section 5 of 
     the Cooperative Forestry Assistance Act of 1978 (16 U.S.C. 
     2103a);
       ``(B) another practice plan approved by the State forester; 
     or
       ``(C) another plan determined appropriate by the 
     Secretary.''.
       (b) Avoidance of Duplication.--Subsection (b) of section 
     1240E of the Food Security Act of 1985 (16 U.S.C. 3839aa-5) 
     is amended to read as follows:
       ``(b) Avoidance of Duplication.--The Secretary shall--
       ``(1) consider a plan developed in order to acquire a 
     permit under a water or air quality regulatory program as the 
     equivalent of a plan of operations under subsection (a), if 
     the plan contains elements equivalent to those elements 
     required by a plan of operations; and
       ``(2) to the maximum extent practicable, eliminate 
     duplication of planning activities under the program under 
     this chapter and comparable conservation programs.''.

     SEC. 2507. DUTIES OF THE SECRETARY.

       Section 1240F(1) of the Food Security Act of 1985 (16 
     U.S.C. 3839aa-6(1)) is amended by striking ``cost-share 
     payments or incentive''.

     SEC. 2508. LIMITATION ON ENVIRONMENTAL QUALITY INCENTIVES 
                   PROGRAM PAYMENTS.

       Section 1240G of the Food Security Act of 1985 (16 U.S.C. 
     3839aa-7) is amended--
       (1) by striking ``An individual or entity'' and inserting 
     ``(a) LIMITATION.--Subject to subsection (b), a person or 
     legal entity'';
       (2) by striking ``$450,000'' and inserting ``$300,000'';
       (3) by striking ``the individual'' both places it appears 
     and inserting ``the person''; and
       (4) by adding at the end the following new subsection:
       ``(b) Waiver Authority.--In the case of contracts under 
     this chapter for projects of special environmental 
     significance (including projects involving methane 
     digesters), as determined by the Secretary, the Secretary 
     may--
       ``(1) waive the limitation otherwise applicable under 
     subsection (a); and
       ``(2) raise the limitation to not more than $450,000 during 
     any six-year period.''.

     SEC. 2509. CONSERVATION INNOVATION GRANTS AND PAYMENTS.

       Section 1240H of the Food Security Act of 1985 (16 U.S.C. 
     3839aa-8) is amended to read as follows:

     ``SEC. 1240H. CONSERVATION INNOVATION GRANTS AND PAYMENTS.

       ``(a) Competitive Grants for Innovative Conservation 
     Approaches.--
       ``(1) Grants.--Out of the funds made available to carry out 
     this chapter, the Secretary may pay the cost of competitive 
     grants that are intended to stimulate innovative approaches 
     to leveraging the Federal investment in environmental 
     enhancement and protection, in conjunction with agricultural 
     production or forest resource management, through the 
     program.
       ``(2) Use.--The Secretary may provide grants under this 
     subsection to governmental and non-governmental organizations 
     and persons, on a competitive basis, to carry out projects 
     that--
       ``(A) involve producers who are eligible for payments or 
     technical assistance under the program;
       ``(B) leverage Federal funds made available to carry out 
     the program under this chapter with matching funds provided 
     by State and local governments and private organizations to 
     promote environmental enhancement and protection in 
     conjunction with agricultural production;
       ``(C) ensure efficient and effective transfer of innovative 
     technologies and approaches demonstrated through projects 
     that receive funding under this section, such as market 
     systems for pollution reduction and practices for the storage 
     of carbon in soil; and
       ``(D) provide environmental and resource conservation 
     benefits through increased participation by producers of 
     specialty crops.
       ``(b) Air Quality Concerns From Agricultural Operations.--
       ``(1) Implementation assistance.--The Secretary shall 
     provide payments under this subsection to producers to 
     implement practices to address air quality concerns from 
     agricultural operations and to meet Federal, State, and local 
     regulatory requirements. The funds shall be made available on 
     the basis of air quality concerns in a State and shall be 
     used to provide payments to producers that are cost effective 
     and reflect innovative technologies.
       ``(2) Funding.--Of the funds made available to carry out 
     this chapter, the Secretary shall carry out this subsection 
     using $37,500,000 for each of fiscal years 2009 through 
     2012.''.

     SEC. 2510. AGRICULTURAL WATER ENHANCEMENT PROGRAM.

       Section 1240I of the Food Security Act of 1985 (16 U.S.C. 
     3839aa-9) is amended to read as follows:

     ``SEC. 1240I. AGRICULTURAL WATER ENHANCEMENT PROGRAM.

       ``(a) Definitions.--In this section:
       ``(1) Agricultural water enhancement activity.--The term 
     `agricultural water enhancement activity' includes the 
     following activities carried out with respect to agricultural 
     land:
       ``(A) Water quality or water conservation plan development, 
     including resource condition assessment and modeling.
       ``(B) Water conservation restoration or enhancement 
     projects, including conversion to the production of less 
     water-intensive agricultural commodities or dryland farming.
       ``(C) Water quality or quantity restoration or enhancement 
     projects.
       ``(D) Irrigation system improvement and irrigation 
     efficiency enhancement.
       ``(E) Activities designed to mitigate the effects of 
     drought.
       ``(F) Related activities that the Secretary determines will 
     help achieve water quality or water conservation benefits on 
     agricultural land.
       ``(2) Partner.--The term `partner' means an entity that 
     enters into a partnership agreement with the Secretary to 
     carry out agricultural water enhancement activities on a 
     regional basis, including--
       ``(A) an agricultural or silvicultural producer association 
     or other group of such producers;
       ``(B) a State or unit of local government; or
       ``(C) a federally recognized Indian tribe.
       ``(3) Partnership agreement.--The term `partnership 
     agreement' means an agreement between the Secretary and a 
     partner.
       ``(4) Program.--The term `program' means the agricultural 
     water enhancement program established under subsection (b).
       ``(b) Establishment of Program.--Beginning in fiscal year 
     2009, the Secretary shall carry out, in accordance with this 
     section and using such procedures as the Secretary determines 
     to be appropriate, an agricultural water enhancement program 
     as part of the environmental quality incentives program to 
     promote ground and surface water conservation and improve 
     water quality on agricultural lands--
       ``(1) by entering into contracts with, and making payments 
     to, producers to carry out agricultural water enhancement 
     activities; or
       ``(2) by entering into partnership agreements with 
     partners, in accordance with subsection (c), on a regional 
     level to benefit working agricultural land.
       ``(c) Partnership Agreements.--
       ``(1) Agreements authorized.--The Secretary may enter into 
     partnership agreements to meet the objectives of the program 
     described in subsection (b).
       ``(2) Applications.--An application to the Secretary to 
     enter into a partnership agreement under paragraph (1) shall 
     include the following:
       ``(A) A description of the geographical area to be covered 
     by the partnership agreement.
       ``(B) A description of the agricultural water quality or 
     water conservation issues to be addressed by the partnership 
     agreement.
       ``(C) A description of the agricultural water enhancement 
     objectives to be achieved through the partnership.
       ``(D) A description of the partners collaborating to 
     achieve the project objectives and the roles, 
     responsibilities, and capabilities of each partner.
       ``(E) A description of the program resources, including 
     payments the Secretary is requested to make.
       ``(F) Such other such elements as the Secretary considers 
     necessary to adequately evaluate and competitively select 
     applications for partnership agreements.
       ``(3) Duties of partners.--A partner under a partnership 
     agreement shall--
       ``(A) identify producers participating in the project and 
     act on their behalf in applying for the program;
       ``(B) leverage funds provided by the Secretary with 
     additional funds to help achieve project objectives;
       ``(C) conduct monitoring and evaluation of project effects; 
     and
       ``(D) at the conclusion of the project, report to the 
     Secretary on project results.
       ``(d) Agricultural Water Enhancement Activities by 
     Producers.--The Secretary shall select agricultural water 
     enhancement activities proposed by producers according to 
     applicable requirements under the environmental quality 
     incentives program.
       ``(e) Agricultural Water Enhancement Activities by 
     Partners.--
       ``(1) Competitive process.--The Secretary shall conduct a 
     competitive process to select partners. In carrying out the 
     process, the Secretary shall make public the criteria used in 
     evaluating applications.
       ``(2) Authority to give priority to certain proposals.--The 
     Secretary may give a higher priority to proposals from 
     partners that--
       ``(A) include high percentages of agricultural land and 
     producers in a region or other appropriate area;
       ``(B) result in high levels of applied agricultural water 
     quality and water conservation activities;

[[Page H3448]]

       ``(C) significantly enhance agricultural activity;
       ``(D) allow for monitoring and evaluation; and
       ``(E) assist producers in meeting a regulatory requirement 
     that reduces the economic scope of the producer's operation.
       ``(3) Priority to proposals from states with water quantity 
     concerns.--The Secretary shall give a higher priority to 
     proposals from partners that--
       ``(A) include the conversion of agricultural land from 
     irrigated farming to dryland farming;
       ``(B) leverage Federal funds provided under the program 
     with funds provided by partners; and
       ``(C) assist producers in States with water quantity 
     concerns, as determined by the Secretary.
       ``(4) Administration.--In carrying out this subsection, the 
     Secretary shall--
       ``(A) accept qualified applications--
       ``(i) directly from partners applying on behalf of 
     producers; or
       ``(ii) from producers applying through a partner as part of 
     a regional agricultural water enhancement project; and
       ``(B) ensure that resources made available for regional 
     agricultural water enhancement activities are delivered in 
     accordance with applicable program rules.
       ``(f) Areas Experiencing Exceptional Drought.--
     Notwithstanding the purposes described in section 1240, the 
     Secretary shall consider as an eligible agricultural water 
     enhancement activity the use of a water impoundment to 
     capture surface water runoff on agricultural land if the 
     agricultural water enhancement activity--
       ``(1) is located in an area that is experiencing or has 
     experienced exceptional drought conditions during the 
     previous two calendar years; and
       ``(2) will capture surface water runoff through the 
     construction, improvement, or maintenance of irrigation ponds 
     or small, on-farm reservoirs.
       ``(g) Waiver Authority.--To assist in the implementation of 
     agricultural water enhancement activities under the program, 
     the Secretary shall waive the applicability of the limitation 
     in section 1001D(b)(2)(B) of this Act for participating 
     producers if the Secretary determines that the waiver is 
     necessary to fulfill the objectives of the program.
       ``(h) Payments Under Program.--
       ``(1) In general.--The Secretary shall provide appropriate 
     payments to producers participating in agricultural water 
     enhancement activities in an amount determined by the 
     secretary to be necessary to achieve the purposes of the 
     program described in subsection (b).
       ``(2) Payments to producers in states with water quantity 
     concerns.--The Secretary shall provide payments for a period 
     of five years to producers participating in agricultural 
     water enhancement activities under proposals described in 
     subsection (e)(3) in an amount sufficient to encourage 
     producers to convert from irrigated farming to dryland 
     farming.
       ``(i) Consistency With State Law.--Any agricultural water 
     enhancement activity conducted under the program shall be 
     conducted in a manner consistent with State water law.
       ``(j) Funding.--
       ``(1) Availability of funds.--In addition to funds made 
     available to carry out this chapter under section 1241(a), 
     the Secretary shall carry out the program using, of the funds 
     of the Commodity Credit Corporation--
       ``(A) $73,000,000 for each of fiscal years 2009 and 2010;
       ``(B) $74,000,000 for fiscal year 2011; and
       ``(C) $60,000,000 for fiscal year 2012 and each fiscal year 
     thereafter.
       ``(2) Limitation on administrative expenses.--None of the 
     funds made available for regional agricultural water 
     conservation activities under the program may be used to pay 
     for the administrative expenses of partners.''.

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

     SEC. 2601. CONSERVATION OF PRIVATE GRAZING LAND.

       Section 1240M(e) of the Food Security Act of 1985 (16 
     U.S.C. 3839bb(e)) is amended by striking ``2007'' and 
     inserting ``2012''.

     SEC. 2602. WILDLIFE HABITAT INCENTIVE PROGRAM.

       (a) Eligibility.--Section 1240N of the Food Security Act of 
     1985 (16 U.S.C. 3839bb-1) is amended--
       (1) in subsection (a), by inserting before the period at 
     the end the following: ``for the development of wildlife 
     habitat on private agricultural land, nonindustrial private 
     forest land, and tribal lands''.
       (2) in subsection (b)(1), by striking ``landowners'' and 
     inserting ``owners of lands referred to in subsection (a)''.
       (b) Inclusion of Pivot Corners and Irregular Areas.--
     Section 1240N(b)(1)(E) of the Food Security Act of 1985 (16 
     U.S.C. 3839bb-1(b)(1)(E)) is amended by inserting before the 
     period at the end the following: ``, including habitat 
     developed on pivot corners and irregular areas''.
       (c) Cost Share for Long-Term Agreements.--Section 
     1240N(b)(2)(B) of the Food Security Act of 1985 (16 U.S.C. 
     3839bb-1(b)(2)(B)) is amended by striking ``15 percent'' and 
     inserting ``25 percent''.
       (d) Priority for Certain Conservation Initiatives; Payment 
     Limitation.--Section 1240N of the Food Security Act of 1985 
     (16 U.S.C. 3839bb-1) is amended by adding at the end the 
     following new subsections:
       ``(d) Priority for Certain Conservation Initiatives.--In 
     carrying out this section, the Secretary may give priority to 
     projects that would address issues raised by State, regional, 
     and national conservation initiatives.
       ``(e) Payment Limitation.--Payments made to a person or 
     legal entity, directly or indirectly, under the program may 
     not exceed, in the aggregate, $50,000 per year.''.

     SEC. 2603. GRASSROOTS SOURCE WATER PROTECTION PROGRAM.

       Section 1240O(b) of the Food Security Act of 1985 (16 
     U.S.C. 3839bb-2(b)) is amended by striking ``$5,000,000 for 
     each of fiscal years 2002 through 2007'' and inserting 
     ``$20,000,000 for each of fiscal years 2008 through 2012''.

     SEC. 2604. GREAT LAKES BASIN PROGRAM FOR SOIL EROSION AND 
                   SEDIMENT CONTROL.

       Section 1240P of the Food Security Act of 1985 (16 U.S.C. 
     3839bb-3) is amended to read as follows:

     ``SEC. 1240P. GREAT LAKES BASIN PROGRAM FOR SOIL EROSION AND 
                   SEDIMENT CONTROL.

       ``(a) Program Authorized.--The Secretary may carry out the 
     Great Lakes basin program for soil erosion and sediment 
     control (referred to in this section as the `program'), 
     including providing assistance to implement the 
     recommendations of the Great Lakes Regional Collaboration 
     Strategy to Restore and Protect the Great Lakes.
       ``(b) Consultation and Cooperation.--The Secretary shall 
     carry out the program in consultation with the Great Lakes 
     Commission created by Article IV of the Great Lakes Basin 
     Compact (82 Stat. 415) and in cooperation with the 
     Administrator of the Environmental Protection Agency and the 
     Secretary of the Army.
       ``(c) Assistance.--In carrying out the program, the 
     Secretary may--
       ``(1) provide project demonstration grants, provide 
     technical assistance, and carry out information and 
     educational programs to improve water quality in the Great 
     Lakes basin by reducing soil erosion and improving sediment 
     control; and
       ``(2) establish a priority for projects and activities 
     that--
       ``(A) directly reduce soil erosion or improve sediment 
     control;
       ``(B) reduce soil loss in degraded rural watersheds; or
       ``(C) improve water quality for downstream watersheds.
       ``(d) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Secretary to carry out the program 
     $5,000,000 for each of fiscal years 2008 through 2012.''.

     SEC. 2605. CHESAPEAKE BAY WATERSHED PROGRAM.

       Chapter 5 of subtitle D of title XII of the Food Security 
     Act of 1985 is amended by inserting after section 1240P (16 
     U.S.C. 3839bb-3) the following new section:

     ``SEC. 1240Q. CHESAPEAKE BAY WATERSHED.

       ``(a) Chesapeake Bay Watershed Defined.--In this section, 
     the term `Chesapeake Bay watershed' means all tributaries, 
     backwaters, and side channels, including their watersheds, 
     draining into the Chesapeake Bay.
       ``(b) Establishment and Purpose.--The Secretary shall 
     assist producers in implementing conservation activities on 
     agricultural lands in the Chesapeake Bay watershed for the 
     purposes of--
       ``(1) improving water quality and quantity in the 
     Chesapeake Bay watershed; and
       ``(2) restoring, enhancing, and preserving soil, air, and 
     related resources in the Chesapeake Bay watershed.
       ``(c) Conservation Activities.--The Secretary shall deliver 
     the funds made available to carry out this section through 
     applicable programs under this subtitle to assist producers 
     in enhancing land and water resources--
       ``(1) by controlling erosion and reducing sediment and 
     nutrient levels in ground and surface water; and
       ``(2) by planning, designing, implementing, and evaluating 
     habitat conservation, restoration, and enhancement measures 
     where there is significant ecological value if the lands 
     are--
       ``(A) retained in their current use; or
       ``(B) restored to their natural condition.
       ``(d) Agreements.--
       ``(1) In general.--The Secretary shall--
       ``(A) enter into agreements with producers to carry out the 
     purposes of this section; and
       ``(B) use the funds made available to carry out this 
     section to cover the costs of the program involved with each 
     agreement.
       ``(2) Special considerations.--In entering into agreements 
     under this subsection, the Secretary shall give special 
     consideration to, and begin evaluating, applications with 
     producers in the following river basins:
       ``(A) The Susquehanna River.
       ``(B) The Shenandoah River.
       ``(C) The Potomac River (including North and South 
     Potomac).
       ``(D) The Patuxent River.
       ``(e) Duties of the Secretary.--In carrying out the 
     purposes in this section, the Secretary shall--
       ``(1) where available, use existing plans, models, and 
     assessments to assist producers in implementing conservation 
     activities; and
       ``(2) proceed expeditiously with the implementation of any 
     agreement with a producer that is consistent with State 
     strategies for the restoration of the Chesapeake Bay 
     watershed.
       ``(f) Consultation.--The Secretary, in consultation with 
     appropriate Federal agencies, shall ensure conservation 
     activities carried out under this section complement Federal 
     and State programs, including programs that address water 
     quality, in the Chesapeake Bay watershed.
       ``(g) Sense of Congress Regarding Chesapeake Bay Executive 
     Council.--It is the sense of Congress that the Secretary 
     should be a member of the Chesapeake Bay Executive Council, 
     and is authorized to do so under section 1(3) of the Soil 
     Conservation and Domestic Allotment Act (16 U.S.C. 590a(3)).

[[Page H3449]]

       ``(h) Funding.--
       ``(1) Availability.--Of the funds of the Commodity Credit 
     Corporation, the Secretary shall use, to the maximum extent 
     practicable--
       ``(A) $23,000,000 for fiscal year 2009;
       ``(B) $43,000,000 for fiscal year 2010;
       ``(C) $72,000,000 for fiscal year 2011; and
       ``(D) $50,000,000 for fiscal year 2012.
       ``(2) Duration of availability.--Funds made available under 
     paragraph (1) shall remain available until expended.''

     SEC. 2606. VOLUNTARY PUBLIC ACCESS AND HABITAT INCENTIVE 
                   PROGRAM.

       Chapter 5 of subtitle D of title XII of the Food Security 
     Act of 1985 (16 U.S.C. 3839bb et seq.) is amended by 
     inserting after section 1240Q, as added by section 2605, the 
     following new section:

     ``SEC. 1240R. VOLUNTARY PUBLIC ACCESS AND HABITAT INCENTIVE 
                   PROGRAM.

       ``(a) Establishment.--The Secretary shall establish a 
     voluntary public access program under which States and tribal 
     governments may apply for grants to encourage owners and 
     operators of privately-held farm, ranch, and forest land to 
     voluntarily make that land available for access by the public 
     for wildlife-dependent recreation, including hunting or 
     fishing under programs administered by the States and tribal 
     governments.
       ``(b) Applications.--In submitting applications for a grant 
     under the program, a State or tribal government shall 
     describe--
       ``(1) the benefits that the State or tribal government 
     intends to achieve by encouraging public access to private 
     farm and ranch land for--
       ``(A) hunting and fishing; and
       ``(B) to the maximum extent practicable, other recreational 
     purposes; and
       ``(2) the methods that will be used to achieve those 
     benefits.
       ``(c) Priority.--In approving applications and awarding 
     grants under the program, the Secretary shall give priority 
     to States and tribal governments that propose--
       ``(1) to maximize participation by offering a program the 
     terms of which are likely to meet with widespread acceptance 
     among landowners;
       ``(2) to ensure that land enrolled under the State or 
     tribal government program has appropriate wildlife habitat;
       ``(3) to strengthen wildlife habitat improvement efforts on 
     land enrolled in a special conservation reserve enhancement 
     program described in section 1234(f)(4) by providing 
     incentives to increase public hunting and other recreational 
     access on that land;
       ``(4) to use additional Federal, State, tribal government, 
     or private resources in carrying out the program; and
       ``(5) to make available to the public the location of land 
     enrolled.
       ``(d) Relationship to Other Laws.--
       ``(1) No preemption.--Nothing in this section preempts a 
     State or tribal government law, including any State or tribal 
     government liability law.
       ``(2) Effect of inconsistent opening dates for migratory 
     bird hunting.--The Secretary shall reduce by 25 percent the 
     amount of a grant otherwise determined for a State under the 
     program if the opening dates for migratory bird hunting in 
     the State are not consistent for residents and non-residents.
       ``(e) Regulations.--The Secretary shall promulgate such 
     regulations as are necessary to carry out this section.
       ``(f) Funding.--Of the funds of the Commodity Credit 
     Corporation, the Secretary shall use, to the maximum extent 
     practicable, $50,000,000 for the period of fiscal years 2009 
     through 2012.''.

    Subtitle H--Funding and Administration of Conservation Programs

     SEC. 2701. FUNDING OF CONSERVATION PROGRAMS UNDER FOOD 
                   SECURITY ACT OF 1985.

       (a) In General.--Section 1241(a) of the Food Security Act 
     of 1985 (16 U.S.C. 3841(a)) is amended in the matter 
     preceding paragraph (1), by striking ``2007'' and inserting 
     ``2012''.
       (b) Conservation Reserve Program.--Paragraph (1) of section 
     1241(a) of the Food Security Act of 1985 (16 U.S.C. 3841(a)) 
     is amended by striking the period at the end and inserting 
     the following: ``, including to the maximum extent 
     practicable--
       ``(A) $100,000,000 for the period of fiscal years 2009 
     through 2012 to provide cost share payments under paragraph 
     (3) of section 1234(b) in connection with thinning activities 
     conducted on land described in subparagraph (A)(iii) of such 
     paragraph; and
       ``(B) $25,000,000 for the period of fiscal years 2009 
     through 2012 to carry out section 1235(f) to facilitate the 
     transfer of land subject to contracts from retired or 
     retiring owners and operators to beginning farmers or 
     ranchers and socially disadvantaged farmers or ranchers.''.
       (c) Conservation Security and Conservation Stewardship 
     Programs.--Paragraph (3) of section 1241(a) of the Food 
     Security Act of 1985 (16 U.S.C. 3841(a)) is amended to read 
     as follows:
       ``(3)(A) Conservation security program.--The conservation 
     security program under subchapter A of chapter 2, using such 
     sums as are necessary to administer contracts entered into 
     before September 30, 2008.
       ``(B) Conservation stewardship program.--The conservation 
     stewardship program under subchapter B of chapter 2.''.
       (d) Farmland Protection Program.--Paragraph (4) of section 
     1241(a) of the Food Security Act of 1985 (16 U.S.C. 3841(a)) 
     is amended to read as follows:
       ``(4) The farmland protection program under subchapter C of 
     chapter 2, using, to the maximum extent practicable--
       ``(A) $97,000,000 in fiscal year 2008;
       ``(B) $121,000,000 in fiscal year 2009;
       ``(C) $150,000,000 in fiscal year 2010;
       ``(D) $175,000,000 in fiscal year 2011; and
       ``(E) $200,000,000 in fiscal year 2012.''.
       (e) Grassland Reserve Program.--Paragraph (5) of section 
     1241(a) of the Food Security Act of 1985 (16 U.S.C. 3841(a)) 
     is amended to read as follows:
       ``(5) The grassland reserve program under subchapter D of 
     chapter 2.''.
       (f) Environmental Quality Incentives Program.--Paragraph 
     (6) of section 1241(a) of the Food Security Act of 1985 (16 
     U.S.C. 3841(a)) is amended to read as follows:
       ``(6) The environmental quality incentives program under 
     chapter 4, using, to the maximum extent practicable--
       ``(A) $1,200,000,000 in fiscal year 2008;
       ``(B) $1,337,000,000 in fiscal year 2009;
       ``(C) $1,450,000,000 in fiscal year 2010;
       ``(D) $1,588,000,000 in fiscal year 2011; and
       ``(E) $1,750,000,000 in fiscal year 2012.''.
       (g) Wildlife Habitat Incentives Program.--Paragraph (7)(D) 
     of section 1241(a) of the Food Security Act of 1985 (16 
     U.S.C. 3841(a)) is amended by striking ``2007'' and inserting 
     ``2012''.

     SEC. 2702. AUTHORITY TO ACCEPT CONTRIBUTIONS TO SUPPORT 
                   CONSERVATION PROGRAMS.

       Section 1241 of the Food Security Act of 1985 (16 U.S.C. 
     3841) is amended by adding at the end the following new 
     subsection:
       ``(e) Acceptance and Use of Contributions.--
       ``(1) Authority to establish contribution accounts.--
     Subject to paragraph (2), the Secretary may establish a sub-
     account for each conservation program administered by the 
     Secretary under subtitle D to accept contributions of non-
     Federal funds to support the purposes of the program.
       ``(2) Deposit and use of contributions.--Contributions of 
     non-Federal funds received for a conservation program 
     administered by the Secretary under subtitle D shall be 
     deposited into the sub-account established under this 
     subsection for the program and shall be available to the 
     Secretary, without further appropriation and until expended, 
     to carry out the program.''.

     SEC. 2703. REGIONAL EQUITY AND FLEXIBILITY.

       (a) Regional Equity and Flexibility.--Section 1241(d) of 
     the Food Security Act of 1985 (16 U.S.C. 3841(d)) is 
     amended--
       (1) by striking ``Before April 1'' and inserting the 
     following:
       ``(1) Priority funding to promote equity.--Before April 
     1'';
       (2) by striking ``$12,000,000'' and inserting 
     ``$15,000,000''; and
       (3) by adding at the end the following new paragraph:
       ``(2) Specific funding allocations.--In determining the 
     specific funding allocations for States under paragraph (1), 
     the Secretary shall consider the respective demand in each 
     State for each program covered by such paragraph.''.
       (b) Allocations Review and Update.--Section 1241 of the 
     Food Security Act of 1985 (16 U.S.C. 3841) is amended by 
     inserting after subsection (e), as added by section 2702, the 
     following new subsection:
       ``(f) Allocations Review and Update.--
       ``(1) Review.--Not later than January 1, 2012, the 
     Secretary shall conduct a review of conservation programs and 
     authorities under this title that utilize allocation formulas 
     to determine the sufficiency of the formulas in accounting 
     for State-level economic factors, level of agricultural 
     infrastructure, or related factors that affect conservation 
     program costs.
       ``(2) Update.--The Secretary shall improve conservation 
     program allocation formulas as necessary to ensure that the 
     formulas adequately reflect the costs of carrying out the 
     conservation programs.''.

     SEC. 2704. ASSISTANCE TO CERTAIN FARMERS AND RANCHERS TO 
                   IMPROVE THEIR ACCESS TO CONSERVATION PROGRAMS.

       Section 1241 of the Food Security Act of 1985 (16 U.S.C. 
     3841) is amended by inserting after subsection (f), as added 
     by section 2703(b), the following new subsection:
       ``(g) Assistance to Certain Farmers or Ranchers for 
     Conservation Access.--
       ``(1) Assistance.--Of the funds made available for each of 
     fiscal years 2009 through 2012 to carry out the environmental 
     quality incentives program and the acres made available for 
     each of such fiscal years to carry out the conservation 
     stewardship program, the Secretary shall use, to the maximum 
     extent practicable--
       ``(A) 5 percent to assist beginning farmers or ranchers; 
     and
       ``(B) 5 percent to assist socially disadvantaged farmers or 
     ranchers.
       ``(2) Repooling of funds.--In any fiscal year, amounts not 
     obligated under paragraph (1) by a date determined by the 
     Secretary shall be available for payments and technical 
     assistance to all persons eligible for payments or technical 
     assistance in that fiscal year under the environmental 
     quality incentives program.
       ``(3) Repooling of acres.--In any fiscal year, acres not 
     obligated under paragraph (1) by a date determined by the 
     Secretary shall be available for use in that fiscal year 
     under the conservation stewardship program.''.

     SEC. 2705. REPORT REGARDING ENROLLMENTS AND ASSISTANCE UNDER 
                   CONSERVATION PROGRAMS.

       Section 1241 of the Food Security Act of 1985 (16 U.S.C. 
     3841) is amended by inserting after subsection (g), as added 
     by section 2704, the following new subsection:
       ``(h) Report on Program Enrollments and Assistance.--
     Beginning in calendar year 2009, and each year thereafter, 
     the Secretary shall submit to the Committee on Agriculture of 
     the House of Representatives and the Committee on 
     Agriculture, Nutrition, and Forestry of the Senate a 
     semiannual report containing statistics by State related to 
     enrollments in conservation programs under this subtitle, as 
     follows:

[[Page H3450]]

       ``(1) Payments made under the wetlands reserve program for 
     easements valued at $250,000 or greater.
       ``(2) Payments made under the farmland protection program 
     for easements in which the Federal share is $250,000 or 
     greater.
       ``(3) Payments made under the grassland reserve program 
     valued at $250,000 or greater.
       ``(4) Payments made under the environmental quality 
     incentives program for land determined to have special 
     environmental significance pursuant to section 1240G(b).
       ``(5) Payments made under the agricultural water 
     enhancement program subject to the waiver of adjusted gross 
     income limitations pursuant to section 1240I(g).
       ``(6) Waivers granted by the Secretary under section 
     1001D(b)(2) of this Act in order to protect environmentally 
     sensitive land of special significance.''.

     SEC. 2706. DELIVERY OF CONSERVATION TECHNICAL ASSISTANCE.

       Section 1242 of the Food Security Act of 1985 (16 U.S.C. 
     3842) is amended to read as follows:

     ``SEC. 1242. DELIVERY OF TECHNICAL ASSISTANCE.

       ``(a) Definition of Eligible Participant.--In this section, 
     the term `eligible participant' means a producer, landowner, 
     or entity that is participating in, or seeking to participate 
     in, programs for which the producer, landowner, or entity is 
     otherwise eligible to participate in under this title or the 
     agricultural management assistance program under section 524 
     of the Federal Crop Insurance Act (7 U.S.C. 1524).
       ``(b) Purpose of Technical Assistance.--The purpose of 
     technical assistance authorized by this section is to provide 
     eligible participants with consistent, science-based, site-
     specific practices designed to achieve conservation 
     objectives on land active in agricultural, forestry, or 
     related uses.
       ``(c) Provision of Technical Assistance.--The Secretary 
     shall provide technical assistance under this title to an 
     eligible participant--
       ``(1) directly;
       ``(2) through an agreement with a third-party provider; or
       ``(3) at the option of the eligible participant, through a 
     payment, as determined by the Secretary, to the eligible 
     participant for an approved third-party provider, if 
     available.
       ``(d) Non-Federal Assistance.--The Secretary may request 
     the services of, and enter into cooperative agreements or 
     contracts with, other agencies within the Department or non-
     Federal entities to assist the Secretary in providing 
     technical assistance necessary to assist in implementing 
     conservation programs under this title.
       ``(e) Certification of Third-Party Providers.--
       ``(1) Purpose.--The purpose of the third-party provider 
     program is to increase the availability and range of 
     technical expertise available to eligible participants to 
     plan and implement conservation measures.
       ``(2) Regulations.--Not later than 180 days after the date 
     of the enactment of the Food, Conservation, and Energy Act of 
     2008, the Secretary shall promulgate such regulations as are 
     necessary to carry out this section.
       ``(3) Expertise.--In promulgating such regulations, the 
     Secretary, to the maximum extent practicable, shall--
       ``(A) ensure that persons with expertise in the technical 
     aspects of conservation planning, watershed planning, and 
     environmental engineering, including commercial entities, 
     nonprofit entities, State or local governments or agencies, 
     and other Federal agencies, are eligible to become approved 
     providers of the technical assistance;
       ``(B) provide national criteria for the certification of 
     third party providers; and
       ``(C) approve any unique certification standards 
     established at the State level.
       ``(f) Administration.--
       ``(1) Funding.--Effective for fiscal year 2008 and each 
     subsequent fiscal year, funds of the Commodity Credit 
     Corporation made available to carry out technical assistance 
     for each of the programs specified in section 1241 shall be 
     available for the provision of technical assistance from 
     third-party providers under this section.
       ``(2) Term of agreement.--An agreement with a third-party 
     provider under this section shall have a term that--
       ``(A) at a minimum, is equal to the period beginning on the 
     date on which the agreement is entered into and ending on the 
     date that is 1 year after the date on which all activities 
     performed pursuant to the agreement have been completed;
       ``(B) does not exceed 3 years; and
       ``(C) can be renewed, as determined by the Secretary.
       ``(3) Review of certification requirements.--Not later than 
     1 year after the date of enactment of the Food, Conservation, 
     and Energy Act of 2008, the Secretary shall--
       ``(A) review certification requirements for third-party 
     providers; and
       ``(B) make any adjustments considered necessary by the 
     Secretary to improve participation.
       ``(4) Eligible activities.--
       ``(A) Inclusion of activities.--The Secretary may include 
     as activities eligible for payments to a third party 
     provider--
       ``(i) technical services provided directly to eligible 
     participants, such as conservation planning, education and 
     outreach, and assistance with design and implementation of 
     conservation practices; and
       ``(ii) related technical assistance services that 
     accelerate conservation program delivery.
       ``(B) Exclusions.--The Secretary shall not designate as an 
     activity eligible for payments to a third party provider any 
     service that is provided by a business, or equivalent, in 
     connection with conducting business and that is customarily 
     provided at no cost.
       ``(5) Payment amounts.--The Secretary shall establish fair 
     and reasonable amounts of payments for technical services 
     provided by third-party providers.
       ``(g) Availability of Technical Services.--
       ``(1) In general.--In carrying out the programs under this 
     title and the agricultural management assistance program 
     under section 524 of the Federal Crop Insurance Act (7 U.S.C. 
     1524), the Secretary shall make technical services available 
     to all eligible participants who are installing an eligible 
     practice.
       ``(2) Technical service contracts.--In any case in which 
     financial assistance is not provided under a program referred 
     to in paragraph (1), the Secretary may enter into a technical 
     service contract with the eligible participant for the 
     purposes of assisting in the planning, design, or 
     installation of an eligible practice.
       ``(h) Review of Conservation Practice Standards.--
       ``(1) Review required.--The Secretary shall--
       ``(A) review conservation practice standards, including 
     engineering design specifications, in effect on the date of 
     the enactment of the Food, Conservation, and Energy Act of 
     2008;
       ``(B) ensure, to the maximum extent practicable, the 
     completeness and relevance of the standards to local 
     agricultural, forestry, and natural resource needs, including 
     specialty crops, native and managed pollinators, bioenergy 
     crop production, forestry, and such other needs as are 
     determined by the Secretary; and
       ``(C) ensure that the standards provide for the optimal 
     balance between meeting site-specific conservation needs and 
     minimizing risks of design failure and associated costs of 
     construction and installation.
       ``(2) Consultation.--In conducting the review under 
     paragraph (1), the Secretary shall consult with eligible 
     participants, crop consultants, cooperative extension and 
     land grant universities, nongovernmental organizations, and 
     other qualified entities.
       ``(3) Expedited revision of standards.--If the Secretary 
     determines under paragraph (1) that revisions to the 
     conservation practice standards, including engineering design 
     specifications, are necessary, the Secretary shall establish 
     an administrative process for expediting the revisions.
       ``(i) Addressing Concerns of Speciality Crop, Organic, and 
     Precision Agriculture Producers.--
       ``(1) In general.--The Secretary shall--
       ``(A) to the maximum extent practicable, fully incorporate 
     specialty crop production, organic crop production, and 
     precision agriculture into the conservation practice 
     standards; and
       ``(B) provide for the appropriate range of conservation 
     practices and resource mitigation measures available to 
     producers involved with organic or specialty crop production 
     or precision agriculture.
       ``(2) Availability of adequate technical assistance.--
       ``(A) In general.--The Secretary shall ensure that adequate 
     technical assistance is available for the implementation of 
     conservation practices by producers involved with organic, 
     specialty crop production, or precision agriculture through 
     Federal conservation programs.
       ``(B) Requirements.--In carrying out subparagraph (A), the 
     Secretary shall develop--
       ``(i) programs that meet specific needs of producers 
     involved with organic, specialty crop production or precision 
     agriculture through cooperative agreements with other 
     agencies and nongovernmental organizations; and
       ``(ii) program specifications that allow for innovative 
     approaches to engage local resources in providing technical 
     assistance for planning and implementation of conservation 
     practices.''.

     SEC. 2707. COOPERATIVE CONSERVATION PARTNERSHIP INITIATIVE.

       (a) Transfer of Existing Provisions.--Subsections (a), (c), 
     and (d) of section 1243 of the Food Security Act of 1985 (16 
     U.S.C. 3843) are--
       (1) redesignated as subsections (c), (d), and (e), 
     respectively; and
       (2) transferred to appear at the end of section 1244 of 
     such Act (16 U.S.C. 3844).
       (b) Establishment of Partnership Initiative.--Section 1243 
     of the Food Security Act of 1985 (16 U.S.C. 3843), as amended 
     by subsection (a), is amended to read as follows:

     ``SEC. 1243. COOPERATIVE CONSERVATION PARTNERSHIP INITIATIVE.

       ``(a) Establishment of Initiative.--The Secretary shall 
     establish a cooperative conservation partnership initiative 
     (in this section referred to as the `Initiative') to work 
     with eligible partners to provide assistance to producers 
     enrolled in a program described in subsection (c)(1) that 
     will enhance conservation outcomes on agricultural and 
     nonindustrial private forest land.
       ``(b) Purposes.--The purposes of a partnership entered into 
     under the Initiative shall be--
       ``(1) to address conservation priorities involving 
     agriculture and nonindustrial private forest land on a local, 
     State, multi-State, or regional level;
       ``(2) to encourage producers to cooperate in meeting 
     applicable Federal, State, and local regulatory requirements 
     related to production involving agriculture and nonindustrial 
     private forest land;
       ``(3) to encourage producers to cooperate in the 
     installation and maintenance of conservation practices that 
     affect multiple agricultural or nonindustrial private forest 
     operations; or
       ``(4) to promote the development and demonstration of 
     innovative conservation practices and delivery methods, 
     including those for specialty crop and organic production and 
     precision agriculture producers.
       ``(c) Initiative Programs.--
       ``(1) Covered programs.--Except as provided in paragraph 
     (2), the Initiative applies to all conservation programs 
     under subtitle D.

[[Page H3451]]

       ``(2) Excluded programs.--The Initiative shall not include 
     the following programs:
       ``(A) Conservation reserve program.
       ``(B) Wetlands reserve program.
       ``(C) Farmland protection program
       ``(D) Grassland reserve program.
       ``(d) Eligible Partners.--The Secretary may enter into a 
     partnership under the Initiative with one or more of the 
     following:
       ``(1) States and local governments.
       ``(2) Indian tribes.
       ``(3) Producer associations.
       ``(4) Farmer cooperatives.
       ``(5) Institutions of higher education.
       ``(6) Nongovernmental organizations with a history of 
     working cooperatively with producers to effectively address 
     conservation priorities related to agricultural production 
     and nonindustrial private forest land.
       ``(e) Implementation Agreements.--The Secretary shall carry 
     out the Initiative--
       ``(1) by selecting, through a competitive process, eligible 
     partners from among applications submitted under subsection 
     (f); and
       ``(2) by entering into multi-year agreements with eligible 
     partners so selected for a period not to exceed 5 years.
       ``(f) Applications.--
       ``(1) Required information.--An application to enter into a 
     partnership agreement under the Initiative shall include the 
     following:
       ``(A) A description of the area covered by the agreement, 
     conservation priorities in the area, conservation objectives 
     to be achieved, and the expected level of participation by 
     agricultural producers and nonindustrial private forest 
     landowners.
       ``(B) A description of the partner, or partners, 
     collaborating to achieve the objectives of the agreement, and 
     the roles, responsibilities, and capabilities of the partner.
       ``(C) A description of the resources that are requested 
     from the Secretary, and the non-Federal resources that will 
     be leveraged by the Federal contribution.
       ``(D) A description of the plan for monitoring, evaluating, 
     and reporting on progress made towards achieving the 
     objectives of the agreement.
       ``(E) Such other information that may be required by the 
     Secretary.
       ``(2) Priorities.--The Secretary shall give priority to 
     applications for agreements that--
       ``(A) have a high percentage of producers involved and 
     working agricultural or nonindustrial private forest land 
     included in the area covered by the agreement;
       ``(B) significantly leverage non-Federal financial and 
     technical resources and coordinate with other local, State, 
     or Federal efforts;
       ``(C) deliver high percentages of applied conservation to 
     address water quality, water conservation, or State, 
     regional, or national conservation initiatives;
       ``(D) provide innovation in conservation methods and 
     delivery, including outcome-based performance measures and 
     methods; or
       ``(E) meet other factors, as determined by the Secretary.
       ``(g) Relationship to Covered Programs.--
       ``(1) Compliance with program rules.--Except as provided in 
     paragraph (2), the Secretary shall ensure that resources made 
     available under the Initiative are delivered in accordance 
     with the applicable rules of programs specified in subsection 
     (c)(1) through normal program mechanisms relating to program 
     functions, including rules governing appeals, payment 
     limitations, and conservation compliance.
       ``(2) Adjustment.--The Secretary may adjust the elements of 
     any program specified in subsection (c)(1)--
       ``(A) to better reflect unique local circumstances and 
     purposes if the Secretary determines such adjustments are 
     necessary to achieve the purposes of the Initiative; and
       ``(B) to provide preferential enrollment to producers who 
     are eligible for the applicable program and to participate in 
     the Initiative.
       ``(h) Technical and Financial Assistance.--The Secretary 
     shall provide appropriate technical and financial assistance 
     to producers participating in the Initiative in an amount 
     determined to be necessary to achieve the purposes of the 
     Initiative.
       ``(i) Funding.--
       ``(1) Reservation.--Of the funds and acres made available 
     for each of fiscal years 2009 through 2012 to implement the 
     programs described in subsection (c)(1), the Secretary shall 
     reserve 6 percent of the funds and acres to ensure an 
     adequate source of funds and acres for the Initiative.
       ``(2) Allocation requirements.--Of the funds and acres 
     reserved for the Initiative for a fiscal year, the Secretary 
     shall allocate--
       ``(A) 90 percent of the funds and acres to projects based 
     on the direction of State conservationists, with the advice 
     of State technical committees; and
       ``(B) 10 percent of the funds and acres to projects based 
     on a national competitive process established by the 
     Secretary.
       ``(3) Unused funding.--Any funds and acres reserved for a 
     fiscal year under paragraph (1) that are not obligated by 
     April 1 of that fiscal year may be used to carry out other 
     activities under the program that is the source of the funds 
     or acres during the remainder of that fiscal year.
       ``(4) Administrative costs of partners.--Overhead or 
     administrative costs of partners may not be covered by funds 
     provided through the Initiative.''.

     SEC. 2708. ADMINISTRATIVE REQUIREMENTS FOR CONSERVATION 
                   PROGRAMS.

       Section 1244 of the Food Security Act of 1985 (16 U.S.C. 
     3844), as amended by section 2707, is further amended--
       (1) by striking subsection (a) and inserting the following 
     new subsection:
       ``(a) Incentives for Certain Farmers and Ranchers and 
     Indian Tribes.--
       ``(1) Incentives authorized.--In carrying out any 
     conservation program administered by the Secretary, the 
     Secretary may provide to a person or entity specified in 
     paragraph (2) incentives to participate in the conservation 
     program--
       ``(A) to foster new farming and ranching opportunities; and
       ``(B) to enhance long-term environmental goals.
       ``(2) Covered persons.--Incentives authorized by paragraph 
     (1) may be provided to the following:
       ``(A) Beginning farmers or ranchers.
       ``(B) Socially disadvantaged farmers or ranchers.
       ``(C) Limited resource farmers or ranchers.
       ``(D) Indian tribes.''; and
       (2) by adding at the end the following new subsections:
       ``(f) Acreage Limitations.--
       ``(1) Limitations.--
       ``(A) Enrollments.--The Secretary shall not enroll more 
     than 25 percent of the cropland in any county in the programs 
     administered under subchapters B and C of chapter 1 of 
     subtitle D.
       ``(B) Easements.--Not more than 10 percent of the cropland 
     in a country may be subject to an easement acquired under 
     subchapter C of chapter 1 of subtitle D.
       ``(2) Exceptions.--The Secretary may exceed the limitation 
     in paragraph (1)(A), if the Secretary determines that--
       ``(A) the action would not adversely affect the local 
     economy of a county; and
       ``(B) operators in the county are having difficulties 
     complying with conservation plans implemented under section 
     1212.
       ``(3) Waiver to exclude certain acreage.--The Secretary may 
     grant a waiver to exclude acreage enrolled under subsection 
     (c)(2)(B) or (f)(4) of section 1234 from the limitations in 
     paragraph (1)(A) with the concurrence of the county 
     government of the county involved.
       ``(4) Shelterbelts and windbreaks.--The limitations 
     established under paragraph (1) shall not apply to cropland 
     that is subject to an easement under subchapter C of chapter 
     1 that is used for the establishment of shelterbelts and 
     windbreaks.
       ``(g) Compliance and Performance.--For each conservation 
     program under subtitle D, the Secretary shall develop 
     procedures--
       ``(1) to monitor compliance with program requirements;
       ``(2) to measure program performance;
       ``(3) to demonstrate whether the long-term conservation 
     benefits of the program are being achieved;
       ``(4) to track participation by crop and livestock types; 
     and
       ``(5) to coordinate activities described in this subsection 
     with the national conservation program authorized under 
     section 5 of the Soil and Water Resources Conservation Act of 
     1977 (16 U.S.C. 2004).
       ``(h) Encouragement of Pollinator Habitat Development and 
     Protection.--In carrying out any conservation program 
     administered by the Secretary, the Secretary may, as 
     appropriate, encourage--
       ``(1) the development of habitat for native and managed 
     pollinators; and
       ``(2) the use of conservation practices that benefit native 
     and managed pollinators.
       ``(i) Streamlined Application Process.--
       ``(1) In general.--In carrying out each conservation 
     program under this title, the Secretary shall ensure that the 
     application process used by producers and landowners is 
     streamlined to minimize complexity and eliminate redundancy.
       ``(2) Review and streamlining.--
       ``(A) Review.--The Secretary shall carry out a review of 
     the application forms and processes for each conservation 
     program covered by this subsection.
       ``(B) Streamlining.--On completion of the review the 
     Secretary shall revise application forms and processes, as 
     necessary, to ensure that--
       ``(i) all required application information is essential for 
     the efficient, effective, and accountable implementation of 
     conservation programs;
       ``(ii) conservation program applicants are not required to 
     provide information that is readily available to the 
     Secretary through existing information systems of the 
     Department of Agriculture;
       ``(iii) information provided by the applicant is managed 
     and delivered efficiently for use in all stages of the 
     application process, or for multiple applications; and
       ``(iv) information technology is used effectively to 
     minimize data and information input requirements.
       ``(3) Implementation and notification.--Not later than 1 
     year after the date of enactment of the Food, Conservation, 
     and Energy Act of 2008, the Secretary shall submit to 
     Congress a written notification of completion of the 
     requirements of this subsection.''.

     SEC. 2709. ENVIRONMENTAL SERVICES MARKETS.

       Subtitle E of title XII of the Food Security Act of 1985 is 
     amended by inserting after section 1244 (16 U.S.C. 3844) the 
     following new section:

     ``SEC. 1245. ENVIRONMENTAL SERVICES MARKETS.

       ``(a) Technical Guidelines Required.--The Secretary shall 
     establish technical guidelines that outline science-based 
     methods to measure the environmental services benefits from 
     conservation and land management activities in order to 
     facilitate the participation of farmers, ranchers, and forest 
     landowners in emerging environmental services markets. The 
     Secretary shall give priority to the establishment of 
     guidelines related to farmer, rancher, and forest landowner 
     participation in carbon markets.
       ``(b) Establishment.--The Secretary shall establish 
     guidelines under subsection (a) for use in developing the 
     following:
       ``(1) A procedure to measure environmental services 
     benefits.

[[Page H3452]]

       ``(2) A protocol to report environmental services benefits.
       ``(3) A registry to collect, record and maintain the 
     benefits measured.
       ``(c) Verification Requirements.--
       ``(1) Verification of reports.--The Secretary shall 
     establish guidelines for a process to verify that a farmer, 
     rancher, or forest landowner who reports an environmental 
     services benefit pursuant to the protocol required by 
     paragraph (2) of subsection (b) for inclusion in the registry 
     required by paragraph (3) of such subsection has implemented 
     the conservation or land management activity covered by the 
     report.
       ``(2) Role of third parties.--In establishing the 
     verification guidelines required by paragraph (1), the 
     Secretary shall consider the role of third-parties in 
     conducting independent verification of benefits produced for 
     environmental services markets and other functions, as 
     determined by the Secretary.
       ``(d) Use of Existing Information.--In carrying out 
     subsection (b), the Secretary shall build on activities or 
     information in existence on the date of the enactment of the 
     Food, Conservation, and Energy Act of 2008 regarding 
     environmental services markets.
       ``(e) Consultation.--In carrying out this section, the 
     Secretary shall consult with the following:
       ``(1) Federal and State government agencies.
       ``(2) Nongovernmental interests including--
       ``(A) farm, ranch, and forestry producers;
       ``(B) financial institutions involved in environmental 
     services trading;
       ``(C) institutions of higher education with relevant 
     expertise or experience;
       ``(D) nongovernmental organizations with relevant expertise 
     or experience; and
       ``(E) private sector representatives with relevant 
     expertise or experience.
       ``(3) Other interested persons, as determined by the 
     Secretary.''.

     SEC. 2710. AGRICULTURE CONSERVATION EXPERIENCED SERVICES 
                   PROGRAM.

       Subtitle F of title XII of the Food Security Act of 1985 is 
     amended by inserting after section 1251 (16 U.S.C. 2005a) the 
     following new section:

     ``SEC. 1252. AGRICULTURE CONSERVATION EXPERIENCED SERVICES 
                   PROGRAM.

       ``(a) Establishment and Purpose.--The Secretary shall 
     establish a conservation experienced services program (in 
     this section referred to as the `ACES Program') for the 
     purpose of utilizing the talents of individuals who are age 
     55 or older, but who are not employees of the Department of 
     Agriculture or a State agriculture department, to provide 
     technical services in support of the conservation-related 
     programs and authorities carried out by the Secretary. Such 
     technical services may include conservation planning 
     assistance, technical consultation, and assistance with 
     design and implementation of conservation practices.
       ``(b) Program Agreements.--
       ``(1) Relation to older american community service 
     employment program.--Notwithstanding any other provision of 
     law relating to Federal grants, cooperative agreements, or 
     contracts, to carry out the ACES program during a fiscal 
     year, the Secretary may enter into agreements with nonprofit 
     private agencies and organizations eligible to receive grants 
     for that fiscal year under the Community Service Senior 
     Opportunities Act (42 U.S.C. 3056 et seq.) to secure 
     participants for the ACES program who will provide technical 
     services under the ACES program.
       ``(2) Required determination.--Before entering into an 
     agreement under paragraph (1), the Secretary shall ensure 
     that the agreement would not--
       ``(A) result in the displacement of individuals employed by 
     the Department, including partial displacement through 
     reduction of non-overtime hours, wages, or employment 
     benefits;
       ``(B) result in the use of an individual under the ACES 
     program for a job or function in a case in which a Federal 
     employee is in a layoff status from the same or a 
     substantially-equivalent job or function with the Department; 
     or
       ``(C) affect existing contracts for services.
       ``(c) Funding Source.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     Secretary may carry out the ACES program using funds made 
     available to carry out each program under this title.
       ``(2) Exclusions.--Funds made available to carry out the 
     following programs may not be used to carry out the ACES 
     program:
       ``(A) The conservation reserve program.
       ``(B) The wetlands reserve program.
       ``(C) The grassland reserve program.
       ``(D) The conservation stewardship program.
       ``(d) Liability.--An individual providing technical 
     services under the ACES program is deemed to be an employee 
     of the United States Government for purposes of chapter 171 
     of title 28, United States Code, if the individual--
       ``(1) is providing technical services pursuant to an 
     agreement entered into under subsection (b); and
       ``(2) is acting within the scope of the agreement.''.

     SEC. 2711. ESTABLISHMENT OF STATE TECHNICAL COMMITTEES AND 
                   THEIR RESPONSIBILITIES.

       Subtitle G of title XII of the Farm Security Act of 1985 
     (16 U.S.C. 3861, 3862) is amended to read as follows:

                ``Subtitle G--State Technical Committees

     ``SEC. 1261. ESTABLISHMENT OF STATE TECHNICAL COMMITTEES.

       ``(a) Establishment.--The Secretary shall establish a 
     technical committee in each State to assist the Secretary in 
     the considerations relating to implementation and technical 
     aspects of the conservation programs under this title.
       ``(b) Standards.--Not later than 180 days after the date of 
     enactment of the Food, Conservation, and Energy Act of 2008, 
     the Secretary shall develop--
       ``(1) standard operating procedures to standardize the 
     operations of State technical committees; and
       ``(2) standards to be used by State technical committees in 
     the development of technical guidelines under section 1262(b) 
     for the implementation of the conservation provisions of this 
     title.
       ``(c) Composition.--Each State technical committee shall be 
     composed of agricultural producers and other professionals 
     that represent a variety of disciplines in the soil, water, 
     wetland, and wildlife sciences. The technical committee for a 
     State shall include representatives from among the following:
       ``(1) The Natural Resources Conservation Service.
       ``(2) The Farm Service Agency.
       ``(3) The Forest Service.
       ``(4) The National Institute of Food and Agriculture.
       ``(5) The State fish and wildlife agency.
       ``(6) The State forester or equivalent State official.
       ``(7) The State water resources agency.
       ``(8) The State department of agriculture.
       ``(9) The State association of soil and water conservation 
     districts.
       ``(10) Agricultural producers representing the variety of 
     crops and livestock or poultry raised within the State.
       ``(11) Owners of nonindustrial private forest land.
       ``(12) Nonprofit organizations within the meaning of 
     section 501(c)(3) of the Internal Revenue Code of 1986 with 
     demonstrable conservation expertise and experience working 
     with agriculture producers in the State.
       ``(13) Agribusiness.

     ``SEC. 1262. RESPONSIBILITIES.

       ``(a) In General.--Each State technical committee 
     established under section 1261 shall meet regularly to 
     provide information, analysis, and recommendations to 
     appropriate officials of the Department of Agriculture who 
     are charged with implementing the conservation provisions of 
     this title.
       ``(b) Public Notice and Attendance.--Each State technical 
     committee shall provide public notice of, and permit public 
     attendance at, meetings considering issues of concern related 
     to carrying out this title.
       ``(c) Role.--
       ``(1) In general.--The role of State technical committees 
     is advisory in nature, and such committees shall have no 
     implementation or enforcement authority. However, the 
     Secretary shall give strong consideration to the 
     recommendations of such committees in administering the 
     programs under this title.
       ``(2) Advisory role in establishing program priorities and 
     criteria.--Each State technical committee shall advise the 
     Secretary in establishing priorities and criteria for the 
     programs in this title, including the review of whether local 
     working groups are addressing those priorities.
       ``(d) FACA Requirements.--
       ``(1) Exemption.--Each State technical committee shall be 
     exempt from the Federal Advisory Committee Act (5 U.S.C. 
     App.).
       ``(2) Local working groups.--For purposes of the Federal 
     Advisory Committee Act (5 U.S.C. App.), any local working 
     group established under this subtitle shall be considered to 
     be a subcommittee of the applicable State technical 
     committee.''.

           Subtitle I--Conservation Programs Under Other Laws

     SEC. 2801. AGRICULTURAL MANAGEMENT ASSISTANCE PROGRAM.

       (a) Eligible States.--Section 524(b)(1) of the Federal Crop 
     Insurance Act (7 U.S.C. 1524(b)(1)) is amended by inserting 
     ``Hawaii,'' after ``Delaware,''.
       (b) Funding.--Section 524(b)(4)(B) of the Federal Crop 
     Insurance Act (7 U.S.C. 1524(b)(4)(B)) is amended--
       (1) in clause (i), by striking ``Except as provided in 
     clauses (ii) and (iii)'' and inserting ``Except as provided 
     in clause (ii)''; and
       (2) by striking clauses (ii) and (iii) and inserting the 
     following new clause:
       ``(ii) Exception for fiscal years 2008 through 2012.--For 
     each of fiscal years 2008 through 2012, the Commodity Credit 
     Corporation shall make available to carry out this subsection 
     $15,000,000.''.
       (c) Certain Uses.--Section 524(b)(4) of the Federal Crop 
     Insurance Act (7 U.S.C. 1524(b)(4)) is amended by adding at 
     the end the following new subparagraph:
       ``(C) Certain uses.--Of the amounts made available to carry 
     out this subsection for a fiscal year, the Commodity Credit 
     Corporation shall use not less than--
       ``(i) 50 percent to carry out subparagraphs (A), (B), and 
     (C) of paragraph (2) through the Natural Resources 
     Conservation Service;
       ``(ii) 10 percent to provide organic certification cost 
     share assistance through the Agricultural Marketing Service; 
     and
       ``(iii) 40 percent to conduct activities to carry out 
     subparagraph (F) of paragraph (2) through the Risk Management 
     Agency.''.

     SEC. 2802. TECHNICAL ASSISTANCE UNDER SOIL CONSERVATION AND 
                   DOMESTIC ALLOTMENT ACT.

       (a) Prevention of Soil Erosion.--
       (1) In general.--The first section of the Soil Conservation 
     and Domestic Allotment Act (16 U.S.C. 590a) is amended--
       (A) by striking ``That it'' and inserting the following:

     ``SECTION 1. PURPOSE.

       ``It''; and
       (B) in the matter preceding paragraph (1), by striking 
     ``and thereby to preserve natural resources,'' and inserting 
     ``to preserve soil, water, and related resources, promote 
     soil and water quality,''.

[[Page H3453]]

       (2) Policies and purposes.--Section 7(a)(1) of the Soil 
     Conservation and Domestic Allotment Act (16 U.S.C. 
     590g(a)(1)) is amended by striking ``fertility'' and 
     inserting ``and water quality and related resources''.
       (b) Definitions.--Section 10 of the Soil Conservation and 
     Domestic Allotment Act (16 U.S.C. 590j) is amended to read as 
     follows:

     ``SEC. 10. DEFINITIONS.

       ``In this Act:
       ``(1) Agricultural commodity.--The term `agricultural 
     commodity' means--
       ``(A) an agricultural commodity; and
       ``(B) any regional or market classification, type, or grade 
     of an agricultural commodity.
       ``(2) Technical assistance.--
       ``(A) In general.--The term `technical assistance' means 
     technical expertise, information, and tools necessary for the 
     conservation of natural resources on land active in 
     agricultural, forestry, or related uses.
       ``(B) Inclusions.--The term `technical assistance' 
     includes--
       ``(i) technical services provided directly to farmers, 
     ranchers, and other eligible entities, such as conservation 
     planning, technical consultation, and assistance with design 
     and implementation of conservation practices; and
       ``(ii) technical infrastructure, including activities, 
     processes, tools, and agency functions needed to support 
     delivery of technical services, such as technical standards, 
     resource inventories, training, data, technology, monitoring, 
     and effects analyses.''.

     SEC. 2803. SMALL WATERSHED REHABILITATION PROGRAM.

       (a) Availability of Funds.--Section 14(h)(1) of the 
     Watershed Protection and Flood Prevention Act (16 U.S.C. 
     1012(h)(1)) is amended by adding at the end the following new 
     subparagraph:
       ``(G) $100,000,000 for fiscal year 2009, to be available 
     until expended.''.
       (b) Authorization of Appropriations.--Section 14(h)(2)(E) 
     of the Watershed Protection and Flood Prevention Act (16 
     U.S.C. 1012(h)(2)(E)) is amended by striking ``fiscal year 
     2007'' and inserting ``each of fiscal years 2008 through 
     2012''.

     SEC. 2804. AMENDMENTS TO SOIL AND WATER RESOURCES 
                   CONSERVATION ACT OF 1977.

       (a) Congressional Findings.--Section 2 of the Soil and 
     Water Resources Conservation Act of 1977 (16 U.S.C. 2001) is 
     amended--
       (1) in paragraph (2), by striking ``base, of the'' and 
     inserting ``base of the''; and
       (2) in paragraph (3), by striking ``(3)'' and all that 
     follows through ``Since individual'' and inserting the 
     following:
       ``(3) Appraisal and inventory of resources, assessment and 
     inventory of conservation needs, evaluation of the effects of 
     conservation practices, and analyses of alternative 
     approaches to existing conservation programs are basic to 
     effective soil, water, and related natural resource 
     conservation.
       ``(4) Since individual''.
       (b) Continuing Appraisal of Soil, Water, and Related 
     Resources.--Section 5 of the Soil and Water Resources 
     Conservation Act of 1977 (16 U.S.C. 2004) is amended--
       (1) in subsection (a)--
       (A) in paragraph (5), by striking ``and'' at the end;
       (B) in paragraph (6), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following new paragraph:
       ``(7) data on conservation plans, conservation practices 
     planned or implemented, environmental outcomes, economic 
     costs, and related matters under conservation programs 
     administered by the Secretary.'';
       (2) by redesignating subsection (d) as subsection (e);
       (3) by inserting after subsection (c) the following new 
     subsection:
       ``(d) Evaluation of Appraisal.--In conducting the appraisal 
     described in subsection (a), the Secretary shall concurrently 
     solicit and evaluate recommendations for improving the 
     appraisal, including the content, scope, process, 
     participation in, and other elements of the appraisal, as 
     determined by the Secretary.''; and
       (4) in subsection (e), as redesignated by paragraph (2), by 
     striking the first sentence and inserting the following: 
     ``The Secretary shall conduct comprehensive appraisals under 
     this section, to be completed by December 31, 2010, and 
     December 31, 2015.''.
       (c) Soil and Water Conservation Program.--Section 6 of the 
     Soil and Water Resources Conservation Act of 1977 (16 U.S.C. 
     2005) is amended--
       (1) by redesignating subsection (b) as subsection (d);
       (2) by inserting after subsection (a) the following new 
     subsections:
       ``(b) Evaluation of Existing Conservation Programs.--In 
     evaluating existing conservation programs, the Secretary 
     shall emphasize demonstration, innovation, and monitoring of 
     specific program components in order to encourage further 
     development and adoption of practices and performance-based 
     standards.
       ``(c) Improvement to Program.--In developing a national 
     soil and water conservation program under subsection (a), the 
     Secretary shall solicit and evaluate recommendations for 
     improving the program, including the content, scope, process, 
     participation in, and other elements of the program, as 
     determined by the Secretary.''; and
       (3) in subsection (d), as redesignated by paragraph (1), by 
     striking ``December 31, 1979'' and all that follows through 
     ``December 31, 2007'' and inserting ``December 31, 2011, and 
     December 31, 2016''.
       (d) Reports to Congress.--Section 7 of the Soil and Water 
     Resources Conservation Act of 1977 (16 U.S.C. 2006) is 
     amended to read as follows:

     ``SEC. 7. REPORTS TO CONGRESS.

       ``(a) Appraisal.--Not later than the date on which Congress 
     convenes in 2011 and 2016, the President shall transmit to 
     the Committee on Agriculture of the House of Representatives 
     and the Committee on Agriculture, Nutrition, and Forestry of 
     the Senate the appraisal developed under section 5 and 
     completed before the end of the previous year.
       ``(b) Program and Statement of Policy.--Not later than the 
     date on which Congress convenes in 2012 and 2017, the 
     President shall transmit to the Committee on Agriculture of 
     the House of Representatives and the Committee on 
     Agriculture, Nutrition, and Forestry of the Senate--
       ``(1) the initial program or updated program developed 
     under section 6 and completed before the end of the previous 
     year;
       ``(2) a detailed statement of policy regarding soil and 
     water conservation activities of the Department of 
     Agriculture; and
       ``(3) a special evaluation of the status, conditions, and 
     trends of soil quality on cropland in the United States that 
     addresses the challenges and opportunities for reducing soil 
     erosion to tolerance levels.
       ``(c) Improvements to Appraisal and Program.--Not later 
     than the date on which Congress convenes in 2012, the 
     Secretary shall submit to the Committee on Agriculture of the 
     House of Representatives and the Committee on Agriculture, 
     Nutrition, and Forestry of the Senate a report describing the 
     plans of the Department of Agriculture for improving the 
     resource appraisal and national conservation program required 
     under this Act, based on the recommendations received under 
     sections 5(d) and 6(c).''.
       (e) Termination of Program.--Section 10 of the Soil and 
     Water Resources Conservation Act of 1977 (16 U.S.C. 2009) is 
     amended by striking ``2008'' and inserting ``2018''.

     SEC. 2805. RESOURCE CONSERVATION AND DEVELOPMENT PROGRAM.

       (a) Locally Led Planning Process.--Section 1528 of the 
     Agriculture and Food Act of 1981 (16 U.S.C. 3451) is 
     amended--
       (1) in paragraph (1), in the matter preceding subparagraph 
     (A), by striking ``PLANNING PROCESS'' and inserting ``locally 
     led planning process'';
       (2) by redesignating paragraphs (8) and (9) as paragraphs 
     (9) and (8), respectively, and moving those paragraphs so as 
     to appear in numerical order;
       (3) in paragraph (8) (as so redesignated)--
       (A) by striking ``PLANNING PROCESS'' and inserting 
     ``Locally led planning process''; and
       (B) by striking ``council'' and inserting ``locally led 
     council''.
       (b) Authorized Technical Assistance.--Section 1528(13) of 
     the Agriculture and Food Act of 1981 (16 U.S.C. 3451(13)) is 
     amended by striking subparagraphs (C) and (D) and inserting 
     the following new subparagraphs:
       ``(C) providing assistance for the implementation of area 
     plans and projects; and
       ``(D) providing services that involve the resources of 
     Department of Agriculture programs in a local community, as 
     defined in the locally led planning process.''.
       (c) Improved Provision of Technical Assistance.--Section 
     1531 of the Agriculture and Food Act of 1981 (16 U.S.C. 3454) 
     is amended--
       (1) by inserting ``(a) In General.--'' before ``In 
     carrying''; and
       (2) by adding at the end the following new subsection:
       ``(b) Coordinator.--
       ``(1) In general.--To improve the provision of technical 
     assistance to councils under this subtitle, the Secretary 
     shall designate for each council an individual to be the 
     coordinator for the council.
       ``(2) Responsibility.--A coordinator for a council shall be 
     directly responsible for the provision of technical 
     assistance to the council.''.
       (d) Program Evaluation.--Section 1534 of the Agriculture 
     and Food Act of 1981 (16 U.S.C. 3457) is repealed.

     SEC. 2806. USE OF FUNDS IN BASIN FUNDS FOR SALINITY CONTROL 
                   ACTIVITIES UPSTREAM OF IMPERIAL DAM.

       (a) In General.--Section 202(a) of the Colorado River Basin 
     Salinity Control Act (43 U.S.C. 1592(a)) is amended by adding 
     at the end the following new paragraph:
       ``(7) Basin states program.--
       ``(A) In general.--A Basin States Program that the 
     Secretary, acting through the Bureau of Reclamation, shall 
     implement to carry out salinity control activities in the 
     Colorado River Basin using funds made available under section 
     205(f).
       ``(B) Assistance.--The Secretary, in consultation with the 
     Colorado River Basin Salinity Control Advisory Council, shall 
     carry out this paragraph using funds described in 
     subparagraph (A) directly or by providing grants, grant 
     commitments, or advance funds to Federal or non-Federal 
     entities under such terms and conditions as the Secretary may 
     require.
       ``(C) Activities.--Funds described in subparagraph (A) 
     shall be used to carry out, as determined by the Secretary--
       ``(i) cost-effective measures and associated works to 
     reduce salinity from saline springs, leaking wells, 
     irrigation sources, industrial sources, erosion of public and 
     private land, or other sources;
       ``(ii) operation and maintenance of salinity control 
     features constructed under the Colorado River Basin salinity 
     control program; and
       ``(iii) studies, planning, and administration of salinity 
     control activities.
       ``(D) Report.--
       ``(i) In general.--Not later than 30 days before 
     implementing the program established under this paragraph, 
     the Secretary shall submit to the appropriate committees of 
     Congress a

[[Page H3454]]

     planning report that describes the proposed implementation of 
     the program.
       ``(ii) Implementation.--The Secretary may not expend funds 
     to implement the program established under this paragraph 
     before the expiration of the 30-day period beginning on the 
     date on which the Secretary submits the report, or any 
     revision to the report, under clause (i).''.
       (b) Conforming Amendments.--
       (1) Section 202 of the Colorado River Basin Salinity 
     Control Act (43 U.S.C. 1592) is amended--
       (A) in subsection (a), in the matter preceding paragraph 
     (1), by striking ``program'' and inserting ``programs''; and
       (B) in subsection (b)(4)--
       (i) by striking ``program'' and inserting ``programs''; and
       (ii) by striking ``and (6)'' and inserting ``(6), and 
     (7)''.
       (2) Section 205 of the Colorado River Basin Salinity 
     Control Act (43 U.S.C. 1595) is amended by striking 
     subsection (f) and inserting the following new subsection:
       ``(f) Up-Front Cost Share.--
       ``(1) In general.--Effective beginning on the date of 
     enactment of this paragraph, subject to paragraph (3), the 
     cost share obligations required by this section shall be met 
     through an up-front cost share from the Basin Funds, in the 
     same proportions as the cost allocations required under 
     subsection (a), as provided in paragraph (2).
       ``(2) Basin states program.--The Secretary shall expend the 
     required cost share funds described in paragraph (1) through 
     the Basin States Program for salinity control activities 
     established under section 202(a)(7).
       ``(3) Existing salinity control activities.--The cost share 
     contribution required by this section shall continue to be 
     met through repayment in a manner consistent with this 
     section for all salinity control activities for which 
     repayment was commenced prior to the date of enactment of 
     this paragraph.''.

     SEC. 2807. DESERT TERMINAL LAKES.

       Section 2507 of the Farm Security and Rural Investment Act 
     of 2002 (43 U.S.C. 2211 note; Public Law 107-171) is 
     amended--
       (1) in subsection (a)--
       (A) by striking ``(a)'' and all that follows through 
     ``$200,000,000'' and inserting ``(a) Transfer.--Subject to 
     subsection (b) and paragraph (1) of section 207(a) of Public 
     Law 108-7 (117 Stat. 146), notwithstanding paragraph (3) of 
     that section, on the date of enactment of the Food, 
     Conservation, and Energy Act of 2008, the Secretary of 
     Agriculture shall transfer $175,000,000''; and
       (B) by striking the quotation marks at the beginning of 
     paragraphs (1) and (2); and
       (2) by striking subsection (b) and inserting the following 
     new subsection:
       ``(b) Permitted Uses.--In any case in which there are 
     willing sellers, the funds described in subsection (a) may be 
     used--
       ``(1) to lease water; or
       ``(2) to purchase land, water appurtenant to the land, and 
     related interests in the Walker River Basin in accordance 
     with section 208(a)(1)(A) of the Energy and Water Development 
     Appropriations Act, 2006 (Public Law 109-103; 119 Stat. 
     2268).''.

           Subtitle J--Miscellaneous Conservation Provisions

     SEC. 2901. HIGH PLAINS WATER STUDY.

       Notwithstanding any other provision of this Act, no person 
     shall become ineligible for any program benefits under this 
     Act or an amendment made by this Act solely as a result of 
     participating in a 1-time study of recharge potential for the 
     Ogallala Aquifer in the High Plains of the State of Texas.

     SEC. 2902. NAMING OF NATIONAL PLANT MATERIALS CENTER AT 
                   BELTSVILLE, MARYLAND, IN HONOR OF NORMAN A. 
                   BERG.

       The National Plant Materials Center at Beltsville, 
     Maryland, referenced in section 613.5(a) of title 7, Code of 
     Federal Regulations, shall be known and designated as the 
     ``Norman A. Berg National Plant Materials Center''. Any 
     reference in a law, map, regulation, document, paper, or 
     other record of the United States to such National Plant 
     Materials Center shall be deemed to be a reference to the 
     Norman A. Berg National Plant Materials Center.

     SEC. 2903. TRANSITION.

       (a) Continuation of Programs in Fiscal Year 2008.--Except 
     as otherwise provided by an amendment made by this title, the 
     Secretary of Agriculture shall continue to carry out any 
     program or activity covered by title XII of the Food Security 
     Act (16 U.S.C. 3801 et seq.) until September 30, 2008, using 
     the provisions of law applicable to the program or activity 
     as they existed on the day before the date of the enactment 
     of this Act and using funds made available under such title 
     for fiscal year 2008 for the program or activity.
       (b) Ground and Surface Water Conservation Program.--During 
     the period beginning on the date of the enactment of this Act 
     and ending on September 30, 2008, the Secretary of 
     Agriculture shall continue to carry out the ground and 
     surface water conservation program under section 1240I of the 
     Food Security Act of 1985 (16 U.S.C. 3839aa-9), as in effect 
     before the amendment made by section 2510, using the terms, 
     conditions, and funds available to the Secretary to carry out 
     such program on the day before the date of the enactment of 
     this Act.

     SEC. 2904. REGULATIONS.

       (a) Issuance.--Except as otherwise provided in this title 
     or an amendment made by this title, not later than 90 days 
     after the date of enactment of this Act, the Secretary of 
     Agriculture, in consultation with the Commodity Credit 
     Corporation, shall promulgate such regulations as are 
     necessary to implement this title.
       (b) Applicable Authority.--The promulgation of regulations 
     under subsection (a) and administration of this title--
       (1) shall be carried out without regard to--
       (A) chapter 35 of title 44, United States Code (commonly 
     known as the Paperwork Reduction Act); and
       (B) the Statement of Policy of the Secretary of Agriculture 
     effective July 24, 1971 (36 Fed. Reg. 13804) relating to 
     notices of proposed rulemaking and public participation in 
     rulemaking; and
       (2) may--
       (A) be promulgated with an opportunity for notice and 
     comment; or
       (B) if determined to be appropriate by the Secretary of 
     Agriculture or the Commodity Credit Corporation, as an 
     interim rule effective on publication with an opportunity for 
     notice and comment.
       (c) Congressional Review of Agency Rulemaking.--In carrying 
     out this section, the Secretary shall use the authority 
     provided under section 808(2) of title 5, United States Code.

                            TITLE III--TRADE

                     Subtitle A--Food for Peace Act

     SEC. 3001. SHORT TITLE.

       (a) In General.--Section 1 of the Agricultural Trade 
     Development and Assistance Act of 1954 (7 U.S.C. 1691 note; 
     104 Stat. 3633) is amended by striking ``AGRICULTURAL TRADE 
     DEVELOPMENT AND ASSISTANCE ACT OF 1954'' and inserting ``Food 
     for Peace Act''.
       (b) Conforming Amendments.--
       (1) In general.--Each provision of law described in 
     paragraph (2) is amended--
       (A) by striking ``Agricultural Trade Development and 
     Assistance Act of 1954'' each place it appears and inserting 
     ``Food for Peace Act''; and
       (B) in each section heading, by striking ``AGRICULTURAL 
     TRADE DEVELOPMENT AND ASSISTANCE ACT OF 1954'' each place it 
     appears and inserting ``FOOD FOR PEACE ACT''.
       (2) Provisions of law.--The provisions of law referred to 
     in paragraph (1) are the following:
       (A) The Agriculture and Food Act of 1981 (Public Law 97-98; 
     95 Stat. 1213).
       (B) The Agricultural Act of 1949 (7 U.S.C. 1421 et seq.).
       (C) Section 9(a) of the Military Construction Codification 
     Act (7 U.S.C. 1704c).
       (D) Section 201 of the Africa: Seeds of Hope Act of 1998 (7 
     U.S.C. 1721 note; Public Law 105-385).
       (E) The Bill Emerson Humanitarian Trust Act (7 U.S.C. 
     1736f-1 et seq.).
       (F) The Food for Progress Act of 1985 (7 U.S.C. 1736o).
       (G) Section 3107 of the Farm Security and Rural Investment 
     Act of 2002 (7 U.S.C. 1736o-1).
       (H) Sections 605B and 606C of the Act of August 28, 1954 
     (commonly known as the ``Agricultural Act of 1954'') (7 
     U.S.C. 1765b, 1766b).
       (I) Section 206 of the Agricultural Act of 1956 (7 U.S.C. 
     1856).
       (J) The Agricultural Competitiveness and Trade Act of 1988 
     (7 U.S.C. 5201 et seq.).
       (K) The Agricultural Trade Act of 1978 (7 U.S.C. 5601 et 
     seq.).
       (L) The Export-Import Bank Act of 1945 (12 U.S.C. 635 et 
     seq.).
       (M) Section 301 of title 13, United States Code.
       (N) Section 8 of the Endangered Species Act of 1973 (16 
     U.S.C. 1537).
       (O) Section 604 of the Enterprise for the Americas Act of 
     1992 (22 U.S.C. 2077).
       (P) Section 5 of the International Health Research Act of 
     1960 (22 U.S.C. 2103).
       (Q) The Foreign Assistance Act of 1961 (22 U.S.C. 2151 et 
     seq.).
       (R) The Horn of Africa Recovery and Food Security Act (22 
     U.S.C. 2151 note; Public Law 102-274).
       (S) Section 105 of the Mutual Educational and Cultural 
     Exchange Act of 1961 (22 U.S.C. 2455).
       (T) Section 35 of the Foreign Military Sales Act (22 U.S.C. 
     2775).
       (U) The Support for East European Democracy (SEED) Act of 
     1989 (22 U.S.C. 5401 et seq.).
       (V) Section 1707 of the Cuban Democracy Act of 1992 (22 
     U.S.C. 6006).
       (W) The Cuban Liberty and Democratic Solidarity (LIBERTAD) 
     Act of 1996 (22 U.S.C. 6021 et seq.).
       (X) Section 902 of the Trade Sanctions Reform and Export 
     Enhancement Act of 2000 (22 U.S.C. 7201).
       (Y) Chapter 553 of title 46, United State Code.
       (Z) Section 4 of the Strategic and Critical Materials Stock 
     Piling Act (50 U.S.C. 98c).
       (AA) The Food, Agriculture, Conservation, and Trade Act of 
     1990 (Public Law 101-624; 104 Stat. 3359).
       (BB) Section 738 of the Agriculture, Rural Development, 
     Food and Drug Administration, and Related Agencies 
     Appropriations Act, 2001 (Public Law 106-387; 114 Stat 1549A-
     34).
       (c) References.--Any reference in any Federal, State, 
     tribal, or local law (including regulations) to the 
     ``Agricultural Trade Development and Assistance Act of 1954'' 
     shall be considered to be a reference to the ``Food for Peace 
     Act''.

     SEC. 3002. UNITED STATES POLICY.

       Section 2 of the Food for Peace Act (7 U.S.C. 1691) is 
     amended--
       (1) by striking paragraph (4); and
       (2) by redesignating paragraphs (5) and (6) as paragraphs 
     (4) and (5), respectively.

     SEC. 3003. FOOD AID TO DEVELOPING COUNTRIES.

       Section 3(b) of the Food for Peace Act (7 U.S.C. 1691a(b)) 
     is amended by striking ``(b)'' and all that follows through 
     paragraph (1) and inserting the following:
       ``(b) Sense of Congress.--It is the sense of Congress 
     that--
       ``(1) in negotiations at the Food Aid Convention, the World 
     Trade Organization, the United Nations Food and Agriculture 
     Organization, and other appropriate venues, the President 
     shall--
       ``(A) seek commitments of higher levels of food aid by 
     donors in order to meet the legitimate needs of developing 
     countries;

[[Page H3455]]

       ``(B) ensure, to the maximum extent practicable, that 
     humanitarian nongovernmental organizations, recipient country 
     governments, charitable bodies, and international 
     organizations shall continue--
       ``(i) to be eligible to receive resources based on 
     assessments of need conducted by those organizations and 
     entities; and
       ``(ii) to implement food aid programs in agreements with 
     donor countries; and
       ``(C) ensure, to the maximum extent practicable, that 
     options for providing food aid for emergency and nonemergency 
     needs shall not be subject to limitation, including in-kind 
     commodities, provision of funds for agricultural commodity 
     procurement, and monetization of commodities, on the 
     condition that the provision of those commodities or funds--
       ``(i) is based on assessments of need and intended to 
     benefit the food security of, or otherwise assist, 
     recipients, and
       ``(ii) is provided in a manner that avoids disincentives to 
     local agricultural production and marketing and with minimal 
     potential for disruption of commercial markets; and''.

     SEC. 3004. TRADE AND DEVELOPMENT ASSISTANCE.

       (a) Title I of the Food for Peace Act (7 U.S.C. 1701 et 
     seq.) is amended in the title heading, by striking ``TRADE 
     AND DEVELOPMENT ASSISTANCE'' and inserting ``ECONOMIC 
     ASSISTANCE AND FOOD SECURITY''.
       (b) Section 101 of the Food for Peace Act (7 U.S.C. 1701) 
     is amended in the section heading, by striking ``TRADE AND 
     DEVELOPMENT ASSISTANCE'' and inserting ``ECONOMIC ASSISTANCE 
     AND FOOD SECURITY''.

     SEC. 3005. AGREEMENTS REGARDING ELIGIBLE COUNTRIES AND 
                   PRIVATE ENTITIES.

       Section 102 of the Food for Peace Act (7 U.S.C. 1702) is 
     amended--
       (1) in subsection (a)--
       (A) by striking paragraph (1); and
       (B) by redesignating paragraphs (2) and (3) as paragraphs 
     (1) and (2), respectively; and
       (2) by striking subsection (c).

     SEC. 3006. USE OF LOCAL CURRENCY PAYMENTS.

       Section 104(c) of the Food for Peace Act (7 U.S.C. 1704(c)) 
     is amended--
       (1) in the matter preceding paragraph (1), by inserting ``, 
     through agreements with recipient governments, private 
     voluntary organizations, and cooperatives,'' after 
     ``developing country'';
       (2) by striking paragraph (1);
       (3) in paragraph (2)--
       (A) in subparagraph (C), by striking ``and'' at the end;
       (B) in subparagraph (D), by striking the period at the end 
     and inserting ``; and''; and
       (C) by adding at the end the following:
       ``(E) the improvement of the trade capacity of the 
     recipient country.'';
       (4) in paragraph (3), by striking ``agricultural business 
     development and agricultural trade expansion'' and inserting 
     ``development of agricultural businesses and agricultural 
     trade capacity'';
       (5) in paragraph (4), by striking ``, or otherwise'' and 
     all that follows through ``United States'';
       (6) in paragraph (5), by inserting ``to promote 
     agricultural products produced in appropriate developing 
     countries'' after ``trade fairs''; and
       (7) by redesignating paragraphs (2) through (9) as 
     paragraphs (1) through (8), respectively.

     SEC. 3007. GENERAL AUTHORITY.

       Section 201 of the Food for Peace Act (7 U.S.C. 1721) is 
     amended--
       (1) by striking paragraph (1) and inserting the following:
       ``(1) address famine and food crises, and respond to 
     emergency food needs, arising from man-made and natural 
     disasters;'';
       (2) in paragraph (5)--
       (A) by inserting ``food security and support'' after 
     ``promote''; and
       (B) by striking ``; and'' and inserting a semicolon;
       (3) in paragraph (6), by striking the period at the end and 
     inserting ``; and''; and
       (4) by adding at the end the following:
       ``(7) promote economic and nutritional security by 
     increasing educational, training, and other productive 
     activities.''.

     SEC. 3008. PROVISION OF AGRICULTURAL COMMODITIES.

       Section 202 of the Food for Peace Act (7 U.S.C. 1722) is 
     amended--
       (1) in subsection (b)(2), by striking ``may not deny a 
     request for funds'' and inserting ``may not use as a sole 
     rationale for denying a request for funds'';
       (2) in subsection (e)(1)--
       (A) in the matter preceding subparagraph (A), by striking 
     ``not less than 5 percent nor more than 10 percent'' and 
     inserting ``not less than 7.5 percent nor more than 13 
     percent'';
       (B) in subparagraph (A), by striking ``; and'' and 
     inserting a semicolon;
       (C) in subparagraph (B), by striking the period at the end 
     and inserting ``; and''; and
       (D) by adding at the end the following:
       ``(C) improving and implementing methodologies for food aid 
     programs, including needs assessments (upon the request of 
     the Administrator), monitoring, and evaluation.''; and
       (3) by striking subsection (h) and inserting the following:
       ``(h) Food Aid Quality.--
       ``(1) In general.--The Administrator shall use funds made 
     available for fiscal year 2009 and subsequent fiscal years to 
     carry out this title--
       ``(A) to assess the types and quality of agricultural 
     commodities and products donated for food aid;
       ``(B) to adjust products and formulations (including the 
     potential introduction of new fortificants and products) as 
     necessary to cost-effectively meet nutrient needs of target 
     populations; and
       ``(C) to test prototypes.
       ``(2) Administration.--The Administrator--
       ``(A) shall carry out this subsection in consultation with 
     and through independent entities with proven expertise in 
     food aid commodity quality enhancements;
       ``(B) may enter into contracts to obtain the services of 
     such entities; and
       ``(C) shall consult with the Food Aid Consultative Group on 
     how to carry out this subsection.
       ``(3) Funding limitation.--Of the funds made available 
     under section 207(f), for fiscal years 2009 through 2011, not 
     more than $4,500,000 may be used to carry out this 
     subsection.''.

     SEC. 3009. GENERATION AND USE OF CURRENCIES BY PRIVATE 
                   VOLUNTARY ORGANIZATIONS AND COOPERATIVES.

       Section 203(b) of the Food for Peace Act (7 U.S.C. 1723(b)) 
     is amended by striking ``1 or more recipient countries'' and 
     inserting ``in 1 or more recipient countries''.

     SEC. 3010. LEVELS OF ASSISTANCE.

       Section 204(a) of the Food for Peace Act (7 U.S.C. 1724(a)) 
     is amended--
       (1) in paragraph (1), by striking ``2002 through 2007'' and 
     inserting ``2008 through 2012''; and
       (2) in paragraph (2), by striking ``2002 through 2007'' and 
     inserting ``2008 through 2012''.

     SEC. 3011. FOOD AID CONSULTATIVE GROUP.

       Section 205 of the Food for Peace Act (7 U.S.C. 1725) is 
     amended--
       (1) in subsection (b)--
       (A) in paragraph (5), by striking ``and'' at the end;
       (B) in paragraph (6), by striking the period and inserting 
     ``; and''; and
       (C) by inserting at the end the following:
       ``(7) representatives from the maritime transportation 
     sector involved in transporting agricultural commodities 
     overseas for programs under this Act.''; and
       (2) in subsection (f), by striking ``2007'' and inserting 
     ``2012''.

     SEC. 3012. ADMINISTRATION.

       Section 207 of the Food for Peace Act (7 U.S.C. 1726a) is 
     amended--
       (1) in subsection (a)(3), by striking ``and the conditions 
     that must be met for the approval of such proposal'';
       (2) in subsection (c), by striking paragraph (3);
       (3) by striking subsection (d) and inserting the following:
       ``(d) Timely Provision of Commodities.--The Administrator, 
     in consultation with the Secretary, shall develop procedures 
     that ensure expedited processing of commodity call forwards 
     in order to provide commodities overseas in a timely manner 
     and to the extent feasible, according to planned delivery 
     schedules.''; and
       (4) by adding at the end the following:
       ``(f) Program Oversight, Monitoring, and Evaluation.--
       ``(1) Duties of administrator.--The Administrator, in 
     consultation with the Secretary, shall establish systems and 
     carry out activities--
       ``(A) to determine the need for assistance provided under 
     this title; and
       ``(B) to improve, monitor, and evaluate the effectiveness 
     and efficiency of the assistance provided under this title to 
     maximize the impact of the assistance.
       ``(2) Requirements of systems and activities.--The systems 
     and activities described in paragraph (1) shall include--
       ``(A) program monitors in countries that receive assistance 
     under this title;
       ``(B) country and regional food aid impact evaluations;
       ``(C) the identification and implementation of best 
     practices for food aid programs;
       ``(D) the evaluation of monetization programs;
       ``(E) early warning assessments and systems to help prevent 
     famines; and
       ``(F) upgraded information technology systems.
       ``(3) Implementation report.--Not later than 180 days after 
     the date of enactment of the Food, Conservation, and Energy 
     Act of 2008, the Administrator shall submit to the 
     appropriate committees of Congress a report on efforts 
     undertaken by the Administrator to conduct oversight of 
     nonemergency programs under this title.
       ``(4) Government accountability office report.--Not later 
     than 270 days after the date of submission of the report 
     under paragraph (3), the Comptroller General of the United 
     States shall submit to the appropriate committees of Congress 
     a report that contains--
       ``(A) a review of, and comments addressing, the report 
     described in paragraph (3); and
       ``(B) recommendations relating to any additional actions 
     that the Comptroller General of the United States determines 
     to be necessary to improve the monitoring and evaluation of 
     assistance provided under this title.
       ``(5) Contract authority.--
       ``(A) In general.--Subject to subparagraphs (B) and (C), in 
     carrying out administrative and management activities 
     relating to each activity carried out by the Administrator 
     under paragraph (1), the Administrator may enter into 
     contracts with 1 or more individuals for personal service to 
     be performed in recipient countries or neighboring countries.
       ``(B) Prohibition.--An individual who enters into a 
     contract with the Administrator under subparagraph (A) shall 
     not be considered to be an employee of the Federal Government 
     for the purpose of any law (including regulations) 
     administered by the Office of Personnel Management.
       ``(C) Personal service.--Subparagraph (A) does not limit 
     the ability of the Administrator to enter into a contract 
     with any individual for personal service under section 
     202(a).
       ``(6) Funding.--

[[Page H3456]]

       ``(A) In general.--Subject to section 202(h)(3), in 
     addition to other funds made available to the Administrator 
     to carry out the monitoring of emergency food assistance, the 
     Administrator may implement this subsection using up to 
     $22,000,000 of the funds made available under this title for 
     each of fiscal years 2009 through 2012, except for paragraph 
     (2)(F), for which only $2,500,000 shall be made available 
     during fiscal year 2009.
       ``(B) Limitations.--
       ``(i) In general.--Subject to clause (ii), of the funds 
     made available under subparagraph (A), for each of fiscal 
     years 2009 through 2012, not more than $8,000,000 may be used 
     by the Administrator to carry out paragraph (2)(E).
       ``(ii) Condition.--No funds shall be made available under 
     subparagraph (A), in accordance with clause (i), unless not 
     less than $8,000,000 is made available under chapter 1 of 
     part I of the Foreign Assistance Act of 1961 (22 U.S.C. 2151 
     et seq.) for such purposes for such fiscal year.
       ``(g) Project Reporting.--
       ``(1) In general.--In submitting project reports to the 
     Administrator, a private voluntary organization or 
     cooperative shall provide a copy of the report in such form 
     as is necessary for the report to be displayed for public use 
     on the website of the United States Agency for International 
     Development.
       ``(2) Confidential information.--An organization or 
     cooperative described in paragraph (1) may omit any 
     confidential information from the copy of the report 
     submitted for public display under that paragraph.''.

     SEC. 3013. ASSISTANCE FOR STOCKPILING AND RAPID 
                   TRANSPORTATION, DELIVERY, AND DISTRIBUTION OF 
                   SHELF-STABLE PREPACKAGED FOODS.

       Section 208(f) of the Food for Peace Act (7 U.S.C. 
     1726b(f)) is amended--
       (1) by striking ``$3,000,000'' and inserting 
     ``$8,000,000''; and
       (2) by striking ``2007'' and inserting ``2012''.

     SEC. 3014. GENERAL AUTHORITIES AND REQUIREMENTS.

       (a) In General.--Section 401 of the Food for Peace Act (7 
     U.S.C. 1731) is amended--
       (1) by striking subsection (a);
       (2) by redesignating subsections (b) and (c) as subsections 
     (a) and (b), respectively; and
       (3) in subsection (b) (as so redesignated), by striking 
     ``(b)(1)'' and inserting ``(a)(1)''.
       (b) Conforming Amendments.--
       (1) Section 406(a) of the Food for Peace Act (7 U.S.C. 
     1736(a)) is amended by striking ``(that have been determined 
     to be available under section 401(a))''.
       (2) Subsection (e)(1) of the Food for Progress Act of 1985 
     (7 U.S.C. 1736o(e)(1)) is amended by striking ``determined to 
     be available under section 401 of the Food for Peace Act''.

     SEC. 3015. DEFINITIONS.

       Section 402 of the Food for Peace Act (7 U.S.C. 1732) is 
     amended--
       (1) by redesignating paragraphs (3) through (8) as 
     paragraphs (4) through (9), respectively; and
       (2) by inserting after paragraph (2) the following:
       ``(3) Appropriate committee of congress.--The term 
     `appropriate committee of Congress' means--
       ``(A) the Committee on Agriculture, Nutrition, and Forestry 
     of the Senate;
       ``(B) the Committee on Agriculture of the House of 
     Representatives; and
       ``(C) the Committee on Foreign Affairs of the House of 
     Representatives.''.

     SEC. 3016. USE OF COMMODITY CREDIT CORPORATION.

       Section 406(b)(2) of the Food for Peace Act (7 U.S.C. 
     1736(b)(2)) is amended by inserting ``, including the costs 
     of carrying out section 415'' before the semicolon.

     SEC. 3017. ADMINISTRATIVE PROVISIONS.

       Section 407(c) of the Food for Peace Act (7 U.S.C. 
     1736a(c)) is amended--
       (1) in paragraph (4)--
       (A) by striking ``Funds made'' and inserting the following:
       ``(A) In general.--Funds made'';
       (B) in subparagraph (A) (as so designated)--
       (i) by striking ``2007'' and inserting ``2012''; and
       (ii) by striking ``$2,000,000'' and inserting 
     ``$10,000,000''; and
       (C) by adding at the end the following:
       ``(B) Additional prepositioning sites.--
       ``(i) Feasibility assessments.--The Administrator may carry 
     out assessments for the establishment of not less than 2 
     sites to determine the feasibility of, and costs associated 
     with, using the sites to store and handle agricultural 
     commodities for prepositioning in foreign countries.
       ``(ii) Establishment of sites.--Based on the results of 
     each assessment carried out under clause (i), the 
     Administrator may establish additional sites for 
     prepositioning in foreign countries.''; and
       (2) by adding at the end the following:
       ``(5) Nonemergency or multiyear agreements.--Annual 
     resource requests for ongoing nonemergency or ongoing 
     multiyear agreements under title II shall be finalized not 
     later than October 1 of the fiscal year in which the 
     agricultural commodities will be shipped under the 
     agreement.''.

     SEC. 3018. CONSOLIDATION AND MODIFICATION OF ANNUAL REPORTS 
                   REGARDING AGRICULTURAL TRADE ISSUES.

       (a) Annual Reports.--Section 407 of the Food for Peace Act 
     (7 U.S.C. 1736a) is amended by striking subsection (f) and 
     inserting the following:
       ``(f) Annual Reports.--
       ``(1) Annual report regarding agricultural trade programs 
     and activities.--
       ``(A) Annual report.--Not later than April 1 of each fiscal 
     year, the Administrator and the Secretary shall jointly 
     prepare and submit to the appropriate committees of Congress 
     a report regarding each program and activity carried out 
     under this Act during the prior fiscal year.
       ``(B) Contents.--An annual report described in subparagraph 
     (A) shall include, with respect to the prior fiscal year--
       ``(i) a list that contains a description of each country 
     and organization that receives food and other assistance 
     under this Act (including the quantity of food and assistance 
     provided to each country and organization);
       ``(ii) a general description of each project and activity 
     implemented under this Act (including each activity funded 
     through the use of local currencies);
       ``(iii) a statement describing the quantity of agricultural 
     commodities made available to each country pursuant to--

       ``(I) section 416(b) of the Agricultural Act of 1949 (7 
     U.S.C. 1431(b)); and
       ``(II) the Food for Progress Act of 1985 (7 U.S.C. 1736o);

       ``(iv) an assessment of the progress made through programs 
     under this Act towards reducing food insecurity in the 
     populations receiving food assistance from the United States;
       ``(v) a description of efforts undertaken by the Food Aid 
     Consultative Group under section 205 to achieve an integrated 
     and effective food assistance program;
       ``(vi) an assessment of--

       ``(I) each program oversight, monitoring, and evaluation 
     system implemented under section 207(f); and
       ``(II) the impact of each program oversight, monitoring, 
     and evaluation system on the effectiveness and efficiency of 
     assistance provided under this title; and

       ``(vii) an assessment of the progress made by the 
     Administrator in addressing issues relating to quality with 
     respect to the provision of food assistance.
       ``(2) Annual report regarding the provision of agricultural 
     commodities to foreign countries.--
       ``(A) Annual report.--Not later than February 1 of each 
     fiscal year, the Administrator shall prepare and submit to 
     the appropriate committees of Congress a report regarding the 
     administration of food assistance programs under title II to 
     benefit foreign countries during the prior fiscal year.
       ``(B) Contents.--An annual report described in subparagraph 
     (A) shall include, with respect to the prior fiscal year--
       ``(i) a list that contains a description of each program, 
     country, and commodity approved for assistance under section 
     207; and
       ``(ii) a statement that contains a description of the total 
     amount of funds approved for transportation and 
     administrative costs under section 207.''.
       (b) Conforming Amendment.--Section 207(e) of the Food for 
     Peace Act (7 U.S.C. 1726a(e)) is amended--
       (1) by striking ``Timely Approval.'' and all that follows 
     through ``The Administrator'' and inserting ``Timely 
     Approval.--The Administrator''; and
       (2) by striking paragraph (2).

     SEC. 3019. EXPIRATION OF ASSISTANCE.

       Section 408 of the Food for Peace Act (7 U.S.C. 1736b) is 
     amended by striking ``2007'' and inserting ``2012''.

     SEC. 3020. AUTHORIZATION OF APPROPRIATIONS.

       Section 412 of the Food for Peace Act (7 U.S.C. 1736f) is 
     amended by striking subsection (a) and inserting the 
     following:
       ``(a) Authorization of Appropriations.--There are 
     authorized to be appropriated--
       ``(1) for fiscal year 2008 and each fiscal year thereafter, 
     $2,500,000,000 to carry out the emergency and nonemergency 
     food assistance programs under title II; and
       ``(2) such sums as are necessary--
       ``(A) to carry out the concessional credit sales program 
     established under title I;
       ``(B) to carry out the grant program established under 
     title III; and
       ``(C) to make payments to the Commodity Credit Corporation 
     to the extent the Commodity Credit Corporation is not 
     reimbursed under the programs under this Act for the actual 
     costs incurred or to be incurred by the Commodity Credit 
     Corporation in carrying out such programs.''.

     SEC. 3021. MINIMUM LEVEL OF NONEMERGENCY FOOD ASSISTANCE.

       Section 412 of the Food for Peace Act (7 U.S.C. 1736f) is 
     amended by adding at the end the following:
       ``(e) Minimum Level of Nonemergency Food Assistance.--
       ``(1) Funds and commodities.--Of the amounts made available 
     to carry out emergency and nonemergency food assistance 
     programs under title II, not less than $375,000,000 for 
     fiscal year 2009, $400,000,000 for fiscal year 2010, 
     $425,000,000 for fiscal year 2011, and $450,000,000 for 
     fiscal year 2012 shall be expended for nonemergency food 
     assistance programs under title II.
       ``(2) Exception.--The President may use less than the 
     amount specified in paragraph (1) in a fiscal year for 
     nonemergency food assistance programs under title II only 
     if--
       ``(A) the President has made a determination that there is 
     an urgent need for additional emergency food assistance;
       ``(B) the funds and commodities held in the Bill Emerson 
     Humanitarian Trust have been exhausted; and
       ``(C) the President has submitted to Congress a 
     supplemental appropriations request for a sum equal to the 
     amount needed to reach the required spending level for 
     nonemergency food assistance under paragraph (1) and the 
     amount exhausted under paragraph (2)(B).
       ``(3) Notification to congress.--If the President makes the 
     determination described in paragraph (2)(A), the President 
     shall submit to Congress written notification that the 
     determination has been made.''.

[[Page H3457]]

     SEC. 3022. COORDINATION OF FOREIGN ASSISTANCE PROGRAMS.

       Section 413 of the Food for Peace Act (7 U.S.C. 1736g) is 
     amended--
       (1) by striking ``To the maximum'' and inserting the 
     following:
       ``(a) In General.--To the maximum''; and
       (2) by adding at the end the following:
       ``(b) Report Regarding Efforts to Improve Procurement 
     Planning.--
       ``(1) Report required.--Not later than 90 days after the 
     date of enactment of the Food, Conservation, and Energy Act 
     of 2008, the Administrator and the Secretary shall submit to 
     each appropriate committee of Congress a report that contains 
     a description of each effort taken by the Administrator and 
     the Secretary to improve planning for food and transportation 
     procurement (including efforts to eliminate bunching of food 
     purchases).
       ``(2) Contents.--A report required under paragraph (1) 
     should include a description of each effort taken by the 
     Administrator and the Secretary--
       ``(A) to improve the coordination of food purchases made 
     by--
       ``(i) the United States Agency for International 
     Development; and
       ``(ii) the Department of Agriculture;
       ``(B) to increase flexibility with respect to procurement 
     schedules;
       ``(C) to increase the use of historical analyses and 
     forecasting; and
       ``(D) to improve and streamline legal claims processes for 
     resolving transportation disputes.''.

     SEC. 3023. MICRONUTRIENT FORTIFICATION PROGRAMS.

       Section 415 of the Food for Peace Act (7 U.S.C. 1736g-2) is 
     amended--
       (1) in subsection (a)--
       (A) in paragraph (1), by striking ``Not later than 
     September 30, 2003, the Administrator, in consultation with 
     the Secretary'' and inserting ``Not later than September 30, 
     2008, the Administrator, in consultation with the 
     Secretary''; and
       (B) in paragraph (2)--
       (i) in subparagraph (A), by adding ``and'' after the 
     semicolon at the end; and
       (ii) by striking subparagraphs (B) and (C) and inserting 
     the following:
       ``(B) assess and apply technologies and systems to improve 
     and ensure the quality, shelf life, bioavailability, and 
     safety of fortified food aid agricultural commodities, and 
     products of those agricultural commodities, using 
     recommendations included in the report entitled 
     `Micronutrient Compliance Review of Fortified Public Law 480 
     Commodities', published in October 2001, with implementation 
     by independent entities with proven experience and expertise 
     in food aid commodity quality enhancements.'';
       (2) by striking subsection (b) and redesignating 
     subsections (c) and (d) as subsections (b) and (c), 
     respectively; and
       (3) in subsection (c) (as redesignated by paragraph (2)), 
     by striking ``2007'' and inserting ``2012''.

     SEC. 3024. JOHN OGONOWSKI AND DOUG BEREUTER FARMER-TO-FARMER 
                   PROGRAM.

       (a) Minimum Funding.--Section 501(d) of the Food for Peace 
     Act (7 U.S.C. 1737(d)) is amended in the matter preceding 
     paragraph (1)--
       (1) by striking ``not less than'' and inserting ``not less 
     than the greater of $10,000,000 or''; and
       (2) by striking ``2002 through 2007'' and inserting ``2008 
     through 2012''.
       (b) Authorization of Appropriations.--Section 501(e) of the 
     Food for Peace Act (7 U.S.C. 1737(e)) is amended by striking 
     paragraph (1) and inserting the following:
       ``(1) In general.--There are authorized to be appropriated 
     for each of fiscal years 2008 through 2012 to carry out the 
     programs under this section--
       ``(A) $10,000,000 for sub-Saharan African and Caribbean 
     Basin countries; and
       ``(B) $5,000,000 for other developing or middle-income 
     countries or emerging markets not described in subparagraph 
     (A).''.

    Subtitle B--Agricultural Trade Act of 1978 and Related Statutes

     SEC. 3101. EXPORT CREDIT GUARANTEE PROGRAM.

       (a) Repeal of Supplier Credit Guarantee Program and 
     Intermediate Export Credit Guarantee Program.--Section 202 of 
     the Agricultural Trade Act of 1978 (7 U.S.C. 5622) is 
     amended--
       (1) in subsection (a)--
       (A) by striking ``Guarantees.--'' and all that follows 
     through ``The Commodity'' in paragraph (1) and inserting 
     ``Guarantees.--The Commodity''; and
       (B) by striking paragraphs (2) and (3);
       (2) by striking subsections (b) and (c);
       (3) by redesignating subsections (d) through (l) as 
     subsections (b) through (j), respectively; and
       (4) by adding at the end the following:
       ``(k) Administration.--
       ``(1) Definition of long term.--In this subsection, the 
     term `long term' means a period of 10 or more years.
       ``(2) Guarantees.--In administering the export credit 
     guarantees authorized under this section, the Secretary 
     shall--
       ``(A) maximize the export sales of agricultural 
     commodities;
       ``(B) maximize the export credit guarantees that are made 
     available and used during the course of a fiscal year;
       ``(C) develop an approach to risk evaluation that 
     facilitates accurate country risk designations and timely 
     adjustments to the designations (on an ongoing basis) in 
     response to material changes in country risk conditions, with 
     ongoing opportunity for input and evaluation from the private 
     sector;
       ``(D) adjust risk-based guarantees as necessary to ensure 
     program effectiveness and United States competitiveness; and
       ``(E) work with industry to ensure, to the maximum extent 
     practicable, that risk-based fees associated with the 
     guarantees cover, but do not exceed, the operating costs and 
     losses over the long term.''.
       (b) Funding Levels.--Section 211 of the Agricultural Trade 
     Act of 1978 (7 U.S.C. 5641) is amended by striking subsection 
     (b) and inserting the following:
       ``(b) Export Credit Guarantee Programs.--The Commodity 
     Credit Corporation shall make available for each of fiscal 
     years 1996 through 2012 credit guarantees under section 
     202(a) in an amount equal to but not more than the lesser 
     of--
       ``(1) $5,500,000,000 in credit guarantees; or
       ``(2) the sum of--
       ``(A) the amount of credit guarantees that the Commodity 
     Credit Corporation can make available using budget authority 
     of $40,000,000 for each fiscal year for the costs of the 
     credit guarantees; and
       ``(B) the amount of credit guarantees that the Commodity 
     Credit Corporation can make available using unobligated 
     budget authority for prior fiscal years.''.
       (c) Conforming Amendments.--Section 202 of the Agricultural 
     Trade Act of 1978 (7 U.S.C. 5622) is amended--
       (1) in subsection (b)(4) (as redesignated by subsection 
     (a)(3)), by striking ``, consistent with the provisions of 
     subsection (c)'';
       (2) in subsection (d) (as redesignated by subsection 
     (a)(3))--
       (A) by striking ``(1)'' and all that follows through ``The 
     Commodity'' and inserting ``The Commodity''; and
       (B) by striking paragraph (2); and
       (3) in subsection (g)(2) (as redesignated by subsection 
     (a)(3)), by striking ``subsections (a) and (b)'' and 
     inserting ``subsection (a)''.

     SEC. 3102. MARKET ACCESS PROGRAM.

       (a) Organic Commodities.--Section 203(a) of the 
     Agricultural Trade Act of 1978 (7 U.S.C. 5623(a)) is amended 
     by inserting after ``agricultural commodities'' the 
     following: ``(including commodities that are organically 
     produced (as defined in section 2103 of the Organic Foods 
     Production Act of 1990 (7 U.S.C. 6502)))''.
       (b) Funding.--Section 211(c)(1)(A) of the Agricultural 
     Trade Act of 1978 (7 U.S.C. 5641(c)(1)(A)) is amended by 
     striking ``$200,000,000 for each of fiscal years 2006 and 
     2007'' and inserting ``$200,000,000 for each of fiscal years 
     2008 through 2012''.

     SEC. 3103. EXPORT ENHANCEMENT PROGRAM.

       (a) In General.--Section 301 of the Agricultural Trade Act 
     of 1978 (7 U.S.C. 5651) is repealed.
       (b) Conforming Amendments.--The Agricultural Trade Act of 
     1978 is amended--
       (1) in title III, by striking the title heading and 
     inserting the following:

                  ``TITLE III--BARRIERS TO EXPORTS'';

       (2) by redesignating sections 302 and 303 (7 U.S.C. 5652 
     and 5653) as sections 301 and 302, respectively;
       (3) in section 302 (as redesignated by paragraph (2)), by 
     striking ``, such as that established under section 301,'';
       (4) in section 401 (7 U.S.C. 5661)--
       (A) in subsection (a), by striking ``section 201, 202, or 
     301'' and inserting ``section 201 or 202''; and
       (B) in subsection (b), by striking ``sections 201, 202, and 
     301'' and inserting ``sections 201 and 202''; and
       (5) in section 402(a)(1) (7 U.S.C. 5662(a)(1)), by striking 
     ``sections 201, 202, 203, and 301'' and inserting ``sections 
     201, 202, and 203''.

     SEC. 3104. FOREIGN MARKET DEVELOPMENT COOPERATOR PROGRAM.

       (a) Report to Congress.--Section 702(c) of the Agricultural 
     Trade Act of 1978 (7 U.S.C. 5722(c)) is amended by striking 
     ``Committee on International Relations'' and inserting 
     ``Committee on Foreign Affairs''.
       (b) Funding.--Section 703(a) of the Agricultural Trade Act 
     of 1978 (7 U.S.C. 5723(a)) is amended by striking ``2002 
     through 2007'' and inserting ``2008 through 2012''.

     SEC. 3105. FOOD FOR PROGRESS ACT OF 1985.

       (a) In General.--The Food for Progress Act of 1985 (7 
     U.S.C. 1736o) is amended by striking ``2007'' each place it 
     appears and inserting ``2012''.
       (b) Designation of Project in Sub-Saharan Africa.--The Food 
     for Progress Act of 1985 (7 U.S.C. 1736o) is amended in 
     subsection (f) by adding at the end the following:
       ``(6) Project in malawi.--
       ``(A) In general.--In carrying out this section during 
     fiscal year 2009, the President shall approve not less than 1 
     multiyear project for Malawi--
       ``(i) to promote sustainable agriculture; and
       ``(ii) to increase the number of women in leadership 
     positions.
       ``(B) Use of eligible commodities.--Of the eligible 
     commodities used to carry out this section during the period 
     in which the project described in subparagraph (A) is carried 
     out, the President shall carry out the project using eligible 
     commodities with a total value of not less than $3,000,000 
     during the course of the project.''.

     SEC. 3106. MCGOVERN-DOLE INTERNATIONAL FOOD FOR EDUCATION AND 
                   CHILD NUTRITION PROGRAM.

       Section 3107 of the Farm Security and Rural Investment Act 
     of 2002 (7 U.S.C. 1736o-1) is amended--
       (1) in subsections (b), (c)(2)(B), (f)(1), (h), (i), and 
     (l)(1), by striking ``President'' each place it appears and 
     inserting ``Secretary'';
       (2) in subsection (d), by striking ``The President shall 
     designate 1 or more Federal agencies'' and inserting ``The 
     Secretary shall'';
       (3) in paragraph (f)(2), by striking ``implementing 
     agency'' and inserting ``Secretary''; and

[[Page H3458]]

       (4) in subsection (l)--
       (A) by striking paragraph (1) and inserting the following:
       ``(1) Use of commodity credit corporation funds.--Of the 
     funds of the Commodity Credit Corporation, the Secretary 
     shall use to carry out this section $84,000,000 for fiscal 
     year 2009, to remain available until expended.'';
       (B) in paragraph (2), by striking ``2004 through 2007'' and 
     inserting ``2008 through 2012''; and
       (C) in paragraph (3), by striking ``any Federal agency 
     implementing or assisting'' and inserting ``the Department of 
     Agriculture or any other Federal agency assisting''.

                       Subtitle C--Miscellaneous

     SEC. 3201. BILL EMERSON HUMANITARIAN TRUST.

       Section 302 of the Bill Emerson Humanitarian Trust Act (7 
     U.S.C. 1736f-1) is amended--
       (1) in subsection (a)--
       (A) by striking ``establish a trust stock'' and inserting 
     ``establish and maintain a trust''; and
       (B) by striking ``or any combination of the commodities, 
     totaling not more than 4,000,000 metric tons'' and inserting 
     ``any combination of the commodities, or funds'';
       (2) in subsection (b)--
       (A) in paragraph (1), by striking subparagraph (D) and 
     inserting the following:
       ``(D) funds made available--
       ``(i) under paragraph (2)(B);
       ``(ii) as a result of an exchange of any commodity held in 
     the trust for an equivalent amount of funds from the market, 
     if the Secretary determines that such a sale of the commodity 
     on the market will not unduly disrupt domestic markets; or
       ``(iii) to maximize the value of the trust, in accordance 
     with subsection (d)(3).''; and
       (B) in paragraph (2)(B)--
       (i) in clause (i)--

       (I) by striking ``2007'' each place it appears and 
     inserting ``2012'';
       (II) by striking ``(c)(2)'' and inserting ``(c)(1)''; and
       (III) by striking ``and'' at the end;

       (ii) in clause (ii), by striking the period at the end and 
     inserting ``; or''; and
       (iii) by adding at the end the following:
       ``(iii) from funds accrued through the management of the 
     trust under subsection (d).'';
       (3) in subsection (c)--
       (A) by striking paragraphs (1) and (2) and inserting the 
     following:
       ``(1) Releases for emergency assistance.--
       ``(A) Definition of emergency.--
       ``(i) In general.--In this paragraph, the term `emergency' 
     means an urgent situation--

       ``(I) in which there is clear evidence that an event or 
     series of events described in clause (ii) has occurred--

       ``(aa) that causes human suffering; and
       ``(bb) for which a government concerned has not chosen, or 
     has not the means, to remedy; or

       ``(II) created by a demonstrably abnormal event or series 
     of events that produces dislocation in the lives of residents 
     of a country or region of a country on an exceptional scale.

       ``(ii) Event or series of events.--An event or series of 
     events referred to in clause (i) includes 1 or more of--

       ``(I) a sudden calamity, such as an earthquake, flood, 
     locust infestation, or similar unforeseen disaster;
       ``(II) a human-made emergency resulting in--

       ``(aa) a significant influx of refugees;
       ``(bb) the internal displacement of populations; or
       ``(cc) the suffering of otherwise affected populations;

       ``(III) food scarcity conditions caused by slow-onset 
     events, such as drought, crop failure, pest infestation, and 
     disease, that result in an erosion of the ability of 
     communities and vulnerable populations to meet food needs; 
     and
       ``(IV) severe food access or availability conditions 
     resulting from sudden economic shocks, market failure, or 
     economic collapse, that result in an erosion of the ability 
     of communities and vulnerable populations to meet food needs.

       ``(B) Releases.--
       ``(i) In general.--Any funds or commodities held in the 
     trust may be released to provide food, and cover any 
     associated costs, under title II of the Food for Peace Act (7 
     U.S.C. 1721 et seq.)--

       ``(I) to assist in averting an emergency, including during 
     the period immediately preceding the emergency;
       ``(II) to respond to an emergency; or
       ``(III) for recovery and rehabilitation after an emergency.

       ``(ii) Procedure.--A release under clause (i) shall be 
     carried out in the same manner, and pursuant to the same 
     authority as provided in title II of that Act.
       ``(C) Insufficiency of other funds.--The funds and 
     commodities held in the trust shall be made immediately 
     available on a determination by the Administrator that funds 
     available for emergency needs under title II of that Act (7 
     U.S.C. 1721 et seq.) for a fiscal year are insufficient to 
     meet emergency needs during the fiscal year.
       ``(D) Waiver relating to minimum tonnage requirements.--
     Nothing in this paragraph requires a waiver by the 
     Administrator of the Agency for International Development 
     under section 204(a)(3) of the Food for Peace Act (7 U.S.C. 
     1724(a)(3)) as a condition for a release of funds or 
     commodities under subparagraph (B).''; and
       (B) by redesignating paragraphs (3) through (5) as 
     paragraphs (2) through (4), respectively;
       (4) in subsection (d)--
       (A) by redesignating paragraphs (1) through (3) as 
     subparagraphs (A) through (C), respectively, and indenting 
     the subparagraphs appropriately;
       (B) by striking the subsection designation and heading and 
     all that follows through ``provide--'' and inserting the 
     following:
       ``(d) Management of Trust.--
       ``(1) In general.--The Secretary shall provide for the 
     management of eligible commodities and funds held in the 
     trust in a manner that is consistent with maximizing the 
     value of the trust, as determined by the Secretary.
       ``(2) Eligible commodities.--The Secretary shall provide--
     '';
       (C) in paragraph (2) (as redesignated by subparagraph 
     (B))--
       (i) in subparagraph (B) (as redesignated by subparagraph 
     (A)), by striking ``and'' at the end; and
       (ii) in subparagraph (C) (as redesignated by subparagraph 
     (A)), by striking the period at the end and inserting ``; 
     and''; and
       (D) by adding at the end the following:
       ``(3) Funds.--
       ``(A) Exchanges.--If any commodity held in the trust is 
     exchanged for funds under subsection (b)(1)(D)(ii), the funds 
     shall be held in the trust until the date on which the funds 
     are released in the case of an emergency under subsection 
     (c).
       ``(B) Investment.--The Secretary may invest funds held in 
     the trust in any short-term obligation of the United States 
     or any other low-risk short-term instrument or security 
     insured by the Federal Government in which a regulated 
     insurance company may invest under the laws of the District 
     of Columbia.''; and
       (5) in subsection (h), in each of paragraphs (1) and (2), 
     by striking ``2007'' each place it appears and inserting 
     ``2012''.

     SEC. 3202. GLOBAL CROP DIVERSITY TRUST.

       (a) Contribution.--The Administrator of the United States 
     Agency for International Development shall contribute funds 
     to endow the Global Crop Diversity Trust (referred to in this 
     section as the ``Trust'') to assist in the conservation of 
     genetic diversity in food crops through the collection and 
     storage of the germplasm of food crops in a manner that 
     provides for--
       (1) the maintenance and storage of seed collections;
       (2) the documentation and cataloguing of the genetics and 
     characteristics of conserved seeds to ensure efficient 
     reference for researchers, plant breeders, and the public;
       (3) building the capacity of seed collection in developing 
     countries;
       (4) making information regarding crop genetic data publicly 
     available for researchers, plant breeders, and the public 
     (including through the provision of an accessible Internet 
     website);
       (5) the operation and maintenance of a back-up facility in 
     which are stored duplicate samples of seeds, in the case of 
     natural or man-made disasters; and
       (6) oversight designed to ensure international coordination 
     of those actions and efficient, public accessibility to that 
     diversity through a cost-effective system.
       (b) United States Contribution Limit.--The aggregate 
     contributions of funds of the Federal Government provided to 
     the Trust shall not exceed 25 percent of the total amount of 
     funds contributed to the Trust from all sources.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $60,000,000 for 
     the period of fiscal years 2008 through 2012.

     SEC. 3203. TECHNICAL ASSISTANCE FOR SPECIALTY CROPS.

       Section 3205 of the Farm Security and Rural Investment Act 
     of 2002 (7 U.S.C. 5680) is amended by striking subsection (d) 
     and inserting the following:
       ``(d) Annual Report.--Not later than 180 days after the 
     date of enactment of the Food, Conservation, and Energy Act 
     of 2008 and annually thereafter, the Secretary shall submit 
     to the appropriate committees of Congress a report that 
     contains, for the period covered by the report, a description 
     of each factor that affects the export of specialty crops, 
     including each factor relating to any--
       ``(1) significant sanitary or phytosanitary issue; or
       ``(2) trade barrier.
       ``(e) Funding.--
       ``(1) Commodity credit corporation.--The Secretary shall 
     use the funds, facilities, and authorities of the Commodity 
     Credit Corporation to carry out this section.
       ``(2) Funding amounts.--Of the funds of the Commodity 
     Credit Corporation, the Secretary shall use to carry out this 
     section--
       ``(A) $4,000,000 for fiscal year 2008;
       ``(B) $7,000,000 for fiscal year 2009;
       ``(C) $8,000,000 for fiscal year 2010;
       ``(D) $9,000,000 for fiscal year 2011; and
       ``(E) $9,000,000 for fiscal year 2012.''.

     SEC. 3204. EMERGING MARKETS AND FACILITY GUARANTEE LOAN 
                   PROGRAM.

       Section 1542 of the Food, Agriculture, Conservation, and 
     Trade Act of 1990 (7 U.S.C. 5622 note; Public Law 101-624) is 
     amended--
       (1) in subsection (a), by striking ``2007'' and inserting 
     ``2012'';
       (2) in subsection (b)--
       (A) in the first sentence, by redesignating paragraphs (1) 
     and (2) as subparagraphs (A) and (B), respectively, and 
     indenting appropriately;
       (B) by striking ``A portion'' and inserting the following:
       ``(1) In general.--A portion'';
       (C) in the second sentence, by striking ``The Commodity 
     Credit Corporation'' and inserting the following:
       ``(2) Priority.--The Commodity Credit Corporation''; and
       (D) by adding at the end the following:
       ``(3) Construction waiver.--The Secretary may waive any 
     applicable requirements relating to the use of United States 
     goods in the construction of a proposed facility, if the 
     Secretary determines that--
       ``(A) goods from the United States are not available; or

[[Page H3459]]

       ``(B) the use of goods from the United States is not 
     practicable.
       ``(4) Term of guarantee.--A facility payment guarantee 
     under this subsection shall be for a term that is not more 
     than the lesser of--
       ``(A) the term of the depreciation schedule of the facility 
     assisted; or
       ``(B) 20 years.''; and
       (3) in subsection (d)(1)(A)(i) by striking ``2007'' and 
     inserting ``2012''.

     SEC. 3205. CONSULTATIVE GROUP TO ELIMINATE THE USE OF CHILD 
                   LABOR AND FORCED LABOR IN IMPORTED AGRICULTURAL 
                   PRODUCTS.

       (a) Definitions.--In this section:
       (1) Child labor.--The term ``child labor'' means the worst 
     forms of child labor as defined in International Labor 
     Convention 182, the Convention Concerning the Prohibition and 
     Immediate Action for the Elimination of the Worst Forms of 
     Child Labor, done at Geneva on June 17, 1999.
       (2) Consultative group.--The term ``Consultative Group'' 
     means the Consultative Group to Eliminate the Use of Child 
     Labor and Forced Labor in Imported Agricultural Products 
     established under subsection (b).
       (3) Forced labor.--The term ``forced labor'' means all work 
     or service--
       (A) that is exacted from any individual under menace of any 
     penalty for nonperformance of the work or service, and for 
     which--
       (i) the work or service is not offered voluntarily; or
       (ii) the work or service is performed as a result of 
     coercion, debt bondage, or involuntary servitude (as those 
     terms are defined in section 103 of the Trafficking Victims 
     Protection Act of 2000 (22 U.S.C. 7102)); and
       (B) by 1 or more individuals who, at the time of performing 
     the work or service, were being subjected to a severe form of 
     trafficking in persons (as that term is defined in that 
     section).
       (b) Establishment.--There is established a group to be 
     known as the ``Consultative Group to Eliminate the Use of 
     Child Labor and Forced Labor in Imported Agricultural 
     Products'' to develop recommendations relating to guidelines 
     to reduce the likelihood that agricultural products or 
     commodities imported into the United States are produced with 
     the use of forced labor and child labor.
       (c) Duties.--
       (1) In general.--Not later than 2 years after the date of 
     enactment of this Act and in accordance with section 105(d) 
     of the Trafficking Victims Protection Act of 2000 (22 U.S.C. 
     7103(d)), as applicable to the importation of agricultural 
     products made with the use of child labor or forced labor, 
     the Consultative Group shall develop, and submit to the 
     Secretary, recommendations relating to a standard set of 
     practices for independent, third-party monitoring and 
     verification for the production, processing, and distribution 
     of agricultural products or commodities to reduce the 
     likelihood that agricultural products or commodities imported 
     into the United States are produced with the use of forced 
     labor or child labor.
       (2) Guidelines.--
       (A) In general.--Not later than 1 year after the date on 
     which the Secretary receives recommendations under paragraph 
     (1), the Secretary shall release guidelines for a voluntary 
     initiative to enable entities to address issues raised by the 
     Trafficking Victims Protection Act of 2000 (22 U.S.C. 7101 et 
     seq.).
       (B) Requirements.--Guidelines released under subparagraph 
     (A) shall be published in the Federal Register and made 
     available for public comment for a period of 90 days.
       (d) Membership.--The Consultative Group shall be composed 
     of not more than 13 individuals, of whom--
       (1) 2 members shall represent the Department of 
     Agriculture, as determined by the Secretary;
       (2) 1 member shall be the Deputy Under Secretary for 
     International Affairs of the Department of Labor;
       (3) 1 member shall represent the Department of State, as 
     determined by the Secretary of State;
       (4) 3 members shall represent private agriculture-related 
     enterprises, which may include retailers, food processors, 
     importers, and producers, of whom at least 1 member shall be 
     an importer, food processor, or retailer who utilizes 
     independent, third-party supply chain monitoring for forced 
     labor or child labor;
       (5) 2 members shall represent institutions of higher 
     education and research institutions, as determined 
     appropriate by the Bureau of International Labor Affairs of 
     the Department of Labor;
       (6) 1 member shall represent an organization that provides 
     independent, third-party certification services for labor 
     standards for producers or importers of agricultural 
     commodities or products; and
       (7) 3 members shall represent organizations described in 
     section 501(c)(3) of the Internal Revenue Code of 1986 that 
     have expertise on the issues of international child labor and 
     do not possess a conflict of interest associated with 
     establishment of the guidelines issued under subsection 
     (c)(2), as determined by the Bureau of International Labor 
     Affairs of the Department of Labor, including representatives 
     from consumer organizations and trade unions, if appropriate.
       (e) Chairperson.--A representative of the Department of 
     Agriculture appointed under subsection (d)(1), as determined 
     by the Secretary, shall serve as the chairperson of the 
     Consultative Group.
       (f) Requirements.--Not less than 4 times per year, the 
     Consultative Group shall meet at the call of the Chairperson, 
     after reasonable notice to all members, to develop 
     recommendations described in subsection (c)(1).
       (g) Nonapplicability of FACA.--The Federal Advisory 
     Committee Act (5 U.S.C. App.) shall not apply to the 
     Consultative Group.
       (h) Annual Reports.--Not later than 1 year after the date 
     of enactment of this Act, and annually thereafter through 
     December 31, 2012, the Secretary shall submit to the 
     Committees on Agriculture and Foreign Affairs of the House of 
     Representatives and the Committee on Agriculture, Nutrition, 
     and Forestry of the Senate a report describing the activities 
     and recommendations of the Consultative Group.
       (i) Termination of Authority.--The Consultative Group shall 
     terminate on December 31, 2012.

     SEC. 3206. LOCAL AND REGIONAL FOOD AID PROCUREMENT PROJECTS.

       (a) Definitions.--In this section:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Agency for International Development.
       (2) Appropriate committee of congress.--The term 
     ``appropriate committee of Congress'' means--
       (A) the Committee on Agriculture, Nutrition, and Forestry 
     of the Senate;
       (B) the Committee on Agriculture of the House of 
     Representatives; and
       (C) the Committee on Foreign Affairs of the House of 
     Representatives.
       (3) Eligible commodity.--The term ``eligible commodity'' 
     means an agricultural commodity (or the product of an 
     agricultural commodity) that--
       (A) is produced in, and procured from, a developing 
     country; and
       (B) at a minimum, meets each nutritional, quality, and 
     labeling standard of the country that receives the 
     agricultural commodity, as determined by the Secretary.
       (4) Eligible organization.--The term ``eligible 
     organization'' means an organization that is--
       (A) described in section 202(d) of the Food for Peace Act 
     (7 U.S.C. 1722(d)); and
       (B) with respect to nongovernmental organizations, subject 
     to regulations promulgated or guidelines issued to carry out 
     this section, including United States audit requirements that 
     are applicable to nongovernmental organizations.
       (b) Study; Field-Based Projects.--
       (1) Study.--
       (A) In general.--Not later than 30 days after the date of 
     enactment of this Act, the Secretary shall initiate a study 
     of prior local and regional procurements for food aid 
     programs conducted by--
       (i) other donor countries;
       (ii) private voluntary organizations; and
       (iii) the World Food Program of the United Nations.
       (B) Report.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary shall submit to the 
     appropriate committees of Congress a report containing the 
     results of the study conducted under subparagraph (A).
       (2) Field-based projects.--
       (A) In general.--In accordance with subparagraph (B), the 
     Secretary shall provide grants to, or enter into cooperative 
     agreements with, eligible organizations to carry out field-
     based projects that consist of local or regional procurements 
     of eligible commodities to respond to food crises and 
     disasters in accordance with this section.
       (B) Consultation with administrator.--In carrying out the 
     development and implementation of field-based projects under 
     subparagraph (A), the Secretary shall consult with the 
     Administrator.
       (c) Procurement.--
       (1) In general.--Any eligible commodity that is procured 
     for a field-based project carried out under subsection (b)(2) 
     shall be procured through any approach or methodology that 
     the Secretary considers to be an effective approach or 
     methodology to provide adequate information regarding the 
     manner by which to expedite, to the maximum extent 
     practicable, the provision of food aid to affected 
     populations without significantly increasing commodity costs 
     for low-income consumers who procure commodities sourced from 
     the same markets at which the eligible commodity is procured.
       (2) Requirements.--
       (A) Impact on local farmers and countries.--The Secretary 
     shall ensure that the local or regional procurement of any 
     eligible commodity under this section will not have a 
     disruptive impact on farmers located in, or the economy of--
       (i) the recipient country of the eligible commodity; or
       (ii) any country in the region in which the eligible 
     commodity may be procured.
       (B) Transshipment.--The Secretary shall, in accordance with 
     such terms and conditions as the Secretary considers to be 
     appropriate, require from each eligible organization 
     commitments designed to prevent or restrict--
       (i) the resale or transshipment of any eligible commodity 
     procured under this section to any country other than the 
     recipient country; and
       (ii) the use of the eligible commodity for any purpose 
     other than food aid.
       (C) World prices.--
       (i) In general.--In carrying out this section, the 
     Secretary shall take any precaution that the Secretary 
     considers to be reasonable to ensure that the procurement of 
     eligible commodities will not unduly disrupt--

       (I) world prices for agricultural commodities; or
       (II) normal patterns of commercial trade with foreign 
     countries.

       (ii) Procurement price.--The procurement of any eligible 
     commodity shall be made at a reasonable market price with 
     respect to the economy of the country in which the eligible 
     commodity is procured, as determined by the Secretary.
       (d) Regulations; Guidelines.--
       (1) In general.--In accordance with paragraph (2), not 
     later than 180 days after the date

[[Page H3460]]

     of completion of the study under subsection (b)(1), the 
     Secretary shall promulgate regulations or issue guidelines to 
     carry out field-based projects under this section.
       (2) Requirements.--
       (A) Use of study.--In promulgating regulations or issuing 
     guidelines under paragraph (1), the Secretary shall take into 
     consideration the results of the study described in 
     subsection (b)(1).
       (B) Public review and comment.--In promulgating regulations 
     or issuing guidelines under paragraph (1), the Secretary 
     shall provide an opportunity for public review and comment.
       (3) Availability.--The Secretary shall not approve the 
     procurement of any eligible commodity under this section 
     until the date on which the Secretary promulgates regulations 
     or issues guidelines under paragraph (1).
       (e) Field-Based Project Grants or Cooperative Agreements.--
       (1) In general.--The Secretary shall award grants to, or 
     enter into cooperative agreements with, eligible 
     organizations to carry out field-based projects.
       (2) Requirements of eligible organizations.--
       (A) Application.--
       (i) In general.--To be eligible to receive a grant from, or 
     enter into a cooperative agreement with, the Secretary under 
     this subsection, an eligible organization shall submit to the 
     Secretary an application by such date, in such manner, and 
     containing such information as the Secretary may require.
       (ii) Other applicable requirements.--Any other applicable 
     requirement relating to the submission of proposals for 
     consideration shall apply to the submission of an application 
     required under clause (i), as determined by the Secretary.
       (B) Completion requirement.--To be eligible to receive a 
     grant from, or enter into a cooperative agreement with, the 
     Secretary under this subsection, an eligible organization 
     shall agree--
       (i) to collect by September 30, 2011, data containing the 
     information required under subsection (f)(1)(B) relating to 
     the field-based project funded through the grant; and
       (ii) to provide to the Secretary the data collected under 
     clause (i).
       (3) Requirements of secretary.--
       (A) Project diversity.--
       (i) In general.--Subject to clause (ii) and subparagraph 
     (B), in selecting proposals for field-based projects to fund 
     under this section, the Secretary shall select a diversity of 
     projects, including projects located in--

       (I) food surplus regions;
       (II) food deficit regions (that are carried out using 
     regional procurement methods); and
       (III) multiple geographical regions.

       (ii) Priority.--In selecting proposals for field-based 
     projects under clause (i), the Secretary shall ensure that 
     the majority of selected proposals are for field-based 
     projects that--

       (I) are located in Africa; and
       (II) procure eligible commodities that are produced in 
     Africa.

       (B) Development assistance.--A portion of the funds 
     provided under this subsection shall be made available for 
     field-based projects that provide development assistance for 
     a period of not less than 1 year.
       (4) Availability.--The Secretary shall not award a grant to 
     any eligible organization under paragraph (1) until the date 
     on which the Secretary promulgates regulations or issues 
     guidelines under subsection (d)(1).
       (f) Independent Evaluations; Report.--
       (1) Independent evaluations.--
       (A) In general.--Not later than November 1, 2011, the 
     Secretary shall ensure that an independent third party 
     conducts an independent evaluation of all field-based 
     projects that--
       (i) addresses each factor described in subparagraph (B); 
     and
       (ii) is conducted in accordance with this section.
       (B) Required factors.--The Secretary shall require the 
     independent third party to develop--
       (i) with respect to each relevant market in which an 
     eligible commodity was procured under this section, a 
     description of--

       (I) the prevailing and historic supply, demand, and price 
     movements of the market (including the extent of competition 
     for procurement bids);
       (II) the impact of the procurement of the eligible 
     commodity on producer and consumer prices in the market;
       (III) each government market interference or other activity 
     of the donor country that might have significantly affected 
     the supply or demand of the eligible commodity in the area at 
     which the local or regional procurement occurred;
       (IV) the quantities and types of eligible commodities 
     procured in the market;
       (V) the time frame for procurement of each eligible 
     commodity; and
       (VI) the total cost of the procurement of each eligible 
     commodity (including storage, handling, transportation, and 
     administrative costs);

       (ii) an assessment regarding--

       (I) whether the requirements of this section have been met;
       (II) the impact of different methodologies and approaches 
     on--

       (aa) local and regional agricultural producers (including 
     large and small agricultural producers);
       (bb) markets;
       (cc) low-income consumers; and
       (dd) program recipients; and

       (III) the length of the period beginning on the date on 
     which the Secretary initiated the procurement process and 
     ending on the date of delivery of eligible commodities;

       (iii) a comparison of different methodologies used to carry 
     out this section, with respect to--

       (I) the benefits to local agriculture;
       (II) the impact on markets and consumers;
       (III) the period of time required for procurement and 
     delivery;
       (IV) quality and safety assurances; and
       (V) implementation costs; and

       (iv) to the extent adequate information is available 
     (including the results of the report required under 
     subsection (b)(1)(B)), a comparison of the different 
     methodologies used by other donor countries to make local and 
     regional procurements.
       (C) Independent third party access to records and 
     reports.--The Secretary shall provide to the independent 
     third party access to each record and report that the 
     independent third party determines to be necessary to 
     complete the independent evaluation.
       (D) Public access to records and reports.--Not later than 
     180 days after the date described in paragraph (2), the 
     Secretary shall provide public access to each record and 
     report described in subparagraph (C).
       (2) Report.--Not later than 4 years after the date of 
     enactment of this Act, the Secretary shall submit to the 
     appropriate committees of Congress a report that contains the 
     analysis and findings of the independent evaluation conducted 
     under paragraph (1)(A).
       (g) Funding.--
       (1) Commodity credit corporation.--The Secretary shall use 
     the funds, facilities, and authorities of the Commodity 
     Credit Corporation to carry out this section.
       (2) Funding amounts.--Of the funds of the Commodity Credit 
     Corporation, the Secretary shall use to carry out this 
     section--
       (A) $5,000,000 for fiscal year 2009;
       (B) $25,000,000 for fiscal year 2010;
       (C) $25,000,000 for fiscal year 2011; and
       (D) $5,000,000 for fiscal year 2012.

                      Subtitle D--Softwood Lumber

     SEC. 3301. SOFTWOOD LUMBER.

       (a) In General.--The Tariff Act of 1930 (19 U.S.C. 1202 et 
     seq.) is amended by adding at the end the following new 
     title:

                     ``TITLE VIII--SOFTWOOD LUMBER

     ``SEC. 801. SHORT TITLE; TABLE OF CONTENTS.

       ``(a) Short Title.--This title may be cited as the 
     `Softwood Lumber Act of 2008'.
       ``(b) Table of Contents.--The table of contents for this 
     title is as follows:

                     ``TITLE VIII--SOFTWOOD LUMBER

``Sec. 801. Short title; table of contents.
``Sec. 802. Definitions.
``Sec. 803. Establishment of softwood lumber importer declaration 
              program.
``Sec. 804. Scope of softwood lumber importer declaration program.
``Sec. 805. Export charge determination and publication.
``Sec. 806. Reconciliation.
``Sec. 807. Verification.
``Sec. 808. Penalties.
``Sec. 809. Reports.

     ``SEC. 802. DEFINITIONS.

       ``In this title:
       ``(1) Appropriate congressional committees.--The term 
     `appropriate congressional committees' means the Committee on 
     Finance of the Senate and the Committee on Ways and Means of 
     the House of Representatives.
       ``(2) Country of export.--The term `country of export' 
     means the country (including any political subdivision of the 
     country) from which softwood lumber or a softwood lumber 
     product is exported before entering the United States.
       ``(3) Customs laws of the united states.--The term `customs 
     laws of the United States' means any law or regulation 
     enforced or administered by U.S. Customs and Border 
     Protection.
       ``(4) Export charges.--The term `export charges' means any 
     tax, charge, or other fee collected by the country from which 
     softwood lumber or a softwood lumber product, described in 
     section 804(a), is exported pursuant to an international 
     agreement entered into by that country and the United States.
       ``(5) Export price.--
       ``(A) In general.--The term `export price' means one of the 
     following:
       ``(i) In the case of softwood lumber or a softwood lumber 
     product that has undergone only primary processing, the value 
     that would be determined F.O.B. at the facility where the 
     product underwent the last primary processing before export.
       ``(ii)(I) In the case of softwood lumber or a softwood 
     lumber product described in subclause (II), the value that 
     would be determined F.O.B. at the facility where the lumber 
     or product underwent the last primary processing.
       ``(II) Softwood lumber or a softwood lumber product 
     described in this subclause is lumber or a product that 
     underwent the last remanufacturing before export by a 
     manufacturer who--

       ``(aa) does not hold tenure rights provided by the country 
     of export;
       ``(bb) did not acquire standing timber directly from the 
     country of export; and
       ``(cc) is not related to the person who holds tenure rights 
     or acquired standing timber directly from the country of 
     export.

       ``(iii)(I) In the case of softwood lumber or a softwood 
     lumber product described in subclause (II), the value that 
     would be determined F.O.B. at the facility where the product 
     underwent the last processing before export.
       ``(II) Softwood lumber or a softwood lumber product 
     described in this subclause is lumber or a product that 
     undergoes the last remanufacturing before export by a 
     manufacturer who--

       ``(aa) holds tenure rights provided by the country of 
     export;
       ``(bb) acquired standing timber directly from the country 
     of export; or
       ``(cc) is related to a person who holds tenure rights or 
     acquired standing timber directly from the country of export.

       ``(B) Related persons.--For purposes of this paragraph, a 
     person is related to another person if--
       ``(i) the person bears a relationship to such other person 
     described in section 152(a) of the Internal Revenue Code of 
     1986;

[[Page H3461]]

       ``(ii) the person bears a relationship to such other person 
     described in section 267(b) of such Code, except that `5 
     percent' shall be substituted for `50 percent' each place it 
     appears;
       ``(iii) the person and such other person are part of a 
     controlled group of corporations, as that term is defined in 
     section 1563(a) of such Code, except that `5 percent' shall 
     be substituted for `80 percent' each place it appears;
       ``(iv) the person is an officer or director of such other 
     person; or
       ``(v) the person is the employer of such other person.
       ``(C) Tenure rights.--For purposes of this paragraph, the 
     term `tenure rights' means rights to harvest timber from 
     public land granted by the country of export.
       ``(D) Export price where f.o.b. value cannot be 
     determined.--
       ``(i) In general.--In the case of softwood lumber or a 
     softwood lumber product described in clause (i), (ii), or 
     (iii) of subparagraph (A) for which an F.O.B. value cannot be 
     determined, the export price shall be the market price for 
     the identical lumber or product sold in an arm's-length 
     transaction in the country of export at approximately the 
     same time as the exported lumber or product. The market price 
     shall be determined in the following order of preference:

       ``(I) The market price for the lumber or a product sold at 
     substantially the same level of trade as the exported lumber 
     or product but in different quantities.
       ``(II) The market price for the lumber or a product sold at 
     a different level of trade than the exported lumber or 
     product but in similar quantities.
       ``(III) The market price for the lumber or a product sold 
     at a different level of trade than the exported lumber or 
     product and in different quantities.

       ``(ii) Level of trade.--For purposes of clause (i), `level 
     of trade' shall be determined in the same manner as provided 
     under section 351.412(c) of title 19, Code of Federal 
     Regulations (as in effect on January 1, 2008).
       ``(6) F.O.B.--The term `F.O.B.' means a value consisting of 
     all charges payable by a purchaser, including those charges 
     incurred in the placement of merchandise on board of a 
     conveyance for shipment, but does not include the actual 
     shipping charges or any applicable export charges.
       ``(7) HTS.--The term `HTS' means the Harmonized Tariff 
     Schedule of the United States (19 U.S.C. 1202) (as in effect 
     on January 1, 2008).
       ``(8) Person.--The term `person' includes any individual, 
     partnership, corporation, association, organization, business 
     trust, government entity, or other entity subject to the 
     jurisdiction of the United States.
       ``(9) United states.--The term `United States' means the 
     customs territory of the United States, as defined in General 
     Note 2 of the HTS.

     ``SEC. 803. ESTABLISHMENT OF SOFTWOOD LUMBER IMPORTER 
                   DECLARATION PROGRAM.

       ``(a) Establishment of Program.--
       ``(1) In general.--The President shall establish and 
     maintain an importer declaration program with respect to the 
     importation of softwood lumber and softwood lumber products 
     described in section 804(a). The importer declaration program 
     shall require importers of softwood lumber and softwood 
     lumber products described in section 804(a) to provide the 
     information required under subsection (b) and declare the 
     information required by subsection (c), and require that such 
     information accompany the entry summary documentation.
       ``(2) Electronic record.--The President shall establish an 
     electronic record that includes the importer information 
     required under subsection (b) and the declarations required 
     under subsection (c).
       ``(b) Required Information.--The President shall require 
     the following information to be submitted by any person 
     seeking to import softwood lumber or softwood lumber products 
     described in section 804(a):
       ``(1) The export price for each shipment of softwood lumber 
     or softwood lumber products.
       ``(2) The estimated export charge, if any, applicable to 
     each shipment of softwood lumber or softwood lumber products 
     as calculated by applying the percentage determined and 
     published by the Under Secretary for International Trade of 
     the Department of Commerce pursuant to section 805 to the 
     export price provided in subsection (b)(1).
       ``(c) Importer Declarations.--Pursuant to procedures 
     prescribed by the President, any person seeking to import 
     softwood lumber or softwood lumber products described in 
     section 804(a) shall declare that--
       ``(1) the person has made appropriate inquiry, including 
     seeking appropriate documentation from the exporter and 
     consulting the determinations published by the Under 
     Secretary for International Trade of the Department of 
     Commerce pursuant to section 805(b); and
       ``(2) to the best of the person's knowledge and belief--
       ``(A) the export price provided pursuant to subsection 
     (b)(1) is determined in accordance with the definition 
     provided in section 802(5);
       ``(B) the export price provided pursuant to subsection 
     (b)(1) is consistent with the export price provided on the 
     export permit, if any, granted by the country of export; and
       ``(C) the exporter has paid, or committed to pay, all 
     export charges due--
       ``(i) in accordance with the volume, export price, and 
     export charge rate or rates, if any, as calculated under an 
     international agreement entered into by the country of export 
     and the United States; and
       ``(ii) consistent with the export charge determinations 
     published by the Under Secretary for International Trade 
     pursuant to section 805(b).

     ``SEC. 804. SCOPE OF SOFTWOOD LUMBER IMPORTER DECLARATION 
                   PROGRAM.

       ``(a) Products Included in Program.--The following products 
     shall be subject to the importer declaration program 
     established under section 803:
       ``(1) In general.--All softwood lumber and softwood lumber 
     products classified under subheading 4407.10.00, 4409.10.10, 
     4409.10.20, or 4409.10.90 of the HTS, including the following 
     softwood lumber, flooring, and siding:
       ``(A) Coniferous wood, sawn or chipped lengthwise, sliced 
     or peeled, whether or not planed, sanded, or finger-jointed, 
     of a thickness exceeding 6 millimeters.
       ``(B) Coniferous wood siding (including strips and friezes 
     for parquet flooring, not assembled) continuously shaped 
     (tongued, grooved, rabbeted, chamfered, v-jointed, beaded, 
     molded, rounded, or the like) along any of its edges or 
     faces, whether or not planed, sanded, or finger-jointed.
       ``(C) Other coniferous wood (including strips and friezes 
     for parquet flooring, not assembled) continuously shaped 
     (tongued, grooved, rabbeted, chamfered, v-jointed, beaded, 
     molded, rounded, or the like) along any of its edges or faces 
     (other than wood moldings and wood dowel rods) whether or not 
     planed, sanded, or finger-jointed.
       ``(D) Coniferous wood flooring (including strips and 
     friezes for parquet flooring, not assembled) continuously 
     shaped (tongued, grooved, rabbeted, chamfered, v-jointed, 
     beaded, molded, rounded, or the like) along any of its edges 
     or faces, whether or not planed, sanded, or finger-jointed.
       ``(E) Coniferous drilled and notched lumber and angle cut 
     lumber.
       ``(2) Products continually shaped.--Any product classified 
     under subheading 4409.10.05 of the HTS that is continually 
     shaped along its end or side edges.
       ``(3) Other lumber products.--Except as otherwise provided 
     in subsection (b) or (c), softwood lumber products that are 
     stringers, radius-cut box-spring frame components, fence 
     pickets, truss components, pallet components, and door and 
     window frame parts classified under subheading 4418.90.46.95, 
     4421.90.70.40, or 4421.90.97.40 of the HTS.
       ``(b) Products Excluded From Program.--The following 
     products shall be excluded from the importer declaration 
     program established under section 803:
       ``(1) Trusses and truss kits, properly classified under 
     subheading 4418.90 of the HTS.
       ``(2) I-joist beams.
       ``(3) Assembled box-spring frames.
       ``(4) Pallets and pallet kits, properly classified under 
     subheading 4415.20 of HTS.
       ``(5) Garage doors.
       ``(6) Edge-glued wood, properly classified under subheading 
     4421.90.97.40 of the HTS.
       ``(7) Complete door frames.
       ``(8) Complete window frames.
       ``(9) Furniture.
       ``(10) Articles brought into the United States temporarily 
     and for which an exemption from duty is claimed under 
     subchapter XIII of chapter 98 of the HTS.
       ``(11) Household and personal effects.
       ``(c) Exceptions for Certain Products.--The following 
     softwood lumber products shall not be subject to the importer 
     declaration program established under section 803:
       ``(1) Stringers.--Stringers (pallet components used for 
     runners), if the stringers--
       ``(A) have at least 2 notches on the side, positioned at 
     equal distance from the center, to properly accommodate 
     forklift blades; and
       ``(B) are properly classified under subheading 
     4421.90.97.40 of the HTS.
       ``(2) Box-spring frame kits.--
       ``(A) In general.--Box-spring frame kits, if--
       ``(i) the kits contain--

       ``(I) 2 wooden side rails;
       ``(II) 2 wooden end (or top) rails; and
       ``(III) varying numbers of wooden slats; and

       ``(ii) the side rails and the end rails are radius-cut at 
     both ends.
       ``(B) Packaging.--Any kit described in subparagraph (A) 
     shall be individually packaged, and contain the exact number 
     of wooden components needed to make the box-spring frame 
     described on the entry documents, with no further processing 
     required. None of the components contained in the package may 
     exceed 1 inch in actual thickness or 83 inches in length.
       ``(3) Radius-cut box-spring frame components.--Radius-cut 
     box-spring frame components, not exceeding 1 inch in actual 
     thickness or 83 inches in length, ready for assembly without 
     further processing, if radius cuts are present on both ends 
     of the boards and are substantial cuts so as to completely 
     round 1 corner.
       ``(4) Fence pickets.--Fence pickets requiring no further 
     processing and properly classified under subheading 
     4421.90.70 of the HTS, 1 inch or less in actual thickness, up 
     to 8 inches wide, and 6 feet or less in length, and having 
     finials or decorative cuttings that clearly identify them as 
     fence pickets. In the case of dog-eared fence pickets, the 
     corners of the boards shall be cut off so as to remove pieces 
     of wood in the shape of isosceles right angle triangles with 
     sides measuring \3/4\ of an inch or more.
       ``(5) United states-origin lumber.--Lumber originating in 
     the United States that is exported to another country for 
     minor processing and imported into the United States if--
       ``(A) the processing occurring in another country is 
     limited to kiln drying, planing to create smooth-to-size 
     board, and sanding; and
       ``(B) the importer establishes to the satisfaction of U.S. 
     Customs and Border Protection upon entry that the lumber 
     originated in the United States.
       ``(6) Softwood lumber.--Any softwood lumber or softwood 
     lumber product that originated in the United States, if the 
     importer, exporter, foreign processor, or original United 
     States producer establishes to the satisfaction of U.S. 
     Customs and Border Protection upon entry that the

[[Page H3462]]

     softwood lumber entered and documented as originating in the 
     United States was first produced in the United States.
       ``(7) Home packages or kits.--
       ``(A) In general.--Softwood lumber or softwood lumber 
     products contained in a single family home package or kit, 
     regardless of the classification under the HTS, if the 
     importer declares that the following requirements have been 
     met:
       ``(i) The package or kit constitutes a full package of the 
     number of wooden pieces specified in the plan, design, or 
     blueprint necessary to produce a home of at least 700 square 
     feet produced to a specified plan, design, or blueprint.
       ``(ii) The package or kit contains--

       ``(I) all necessary internal and external doors and 
     windows, nails, screws, glue, subfloor, sheathing, beams, 
     posts, and connectors; and
       ``(II) if included in the purchase contract, the decking, 
     trim, drywall, and roof shingles specified in the plan, 
     design, or blueprint.

       ``(iii) Prior to importation, the package or kit is sold to 
     a United States retailer that sells complete home packages or 
     kits pursuant to a valid purchase contract referencing the 
     particular home design, plan, or blueprint, and the contract 
     is signed by a customer not affiliated with the importer.
       ``(iv) Softwood lumber products entered as part of the 
     package or kit, whether in a single entry or multiple entries 
     on multiple days, are to be used solely for the construction 
     of the single family home specified by the home design, plan, 
     or blueprint matching the U.S. Customs and Border Protection 
     import entry.
       ``(B) Additional documentation required for home packages 
     and kits.--In the case of each entry of products described in 
     clauses (i) through (iv) of subparagraph (A) the following 
     documentation shall be retained by the importer and made 
     available to U.S. Customs and Border Protection upon request:
       ``(i) A copy of the appropriate home design, plan, or 
     blueprint matching the customs entry in the United States.
       ``(ii) A purchase contract from a retailer of home kits or 
     packages signed by a customer not affiliated with the 
     importer.
       ``(iii) A listing of all parts in the package or kit being 
     entered into the United States that conforms to the home 
     design, plan, or blueprint for which such parts are being 
     imported.
       ``(iv) If a single contract involves multiple entries, an 
     identification of all the items required to be listed under 
     clause (iii) that are included in each individual shipment.
       ``(d) Products Covered.--For purposes of determining if a 
     product is covered by the importer declaration program, the 
     President shall be guided by the article descriptions 
     provided in this section.

     ``SEC. 805. EXPORT CHARGE DETERMINATION AND PUBLICATION.

       ``(a) Determination.--The Under Secretary for International 
     Trade of the Department of Commerce shall determine, on a 
     monthly basis, any export charges (expressed as a percentage 
     of export price) to be collected by a country of export from 
     exporters of softwood lumber or softwood lumber products 
     described in section 804(a) in order to ensure compliance 
     with any international agreement entered into by that country 
     and the United States.
       ``(b) Publication.--The Under Secretary for International 
     Trade shall immediately publish any determination made under 
     subsection (a) on the website of the International Trade 
     Administration of the Department of Commerce, and in any 
     other manner the Under Secretary considers appropriate.

     ``SEC. 806. RECONCILIATION.

       ``The Secretary of the Treasury shall conduct 
     reconciliations to ensure the proper implementation and 
     operation of international agreements entered into between a 
     country of export of softwood lumber or softwood lumber 
     products described in section 804(a) and the United States. 
     The Secretary of Treasury shall reconcile the following:
       ``(1) The export price declared by a United States importer 
     pursuant to section 803(b)(1) with the export price reported 
     to the United States by the country of export, if any.
       ``(2) The export price declared by a United States importer 
     pursuant to section 803(b)(1) with the revised export price 
     reported to the United States by the country of export, if 
     any.

     ``SEC. 807. VERIFICATION.

       ``(a) In General.--The Secretary of Treasury shall 
     periodically verify the declarations made by a United States 
     importer pursuant to section 803(c), including by determining 
     whether--
       ``(1) the export price declared by a United States importer 
     pursuant to section 803(b)(1) is the same as the export price 
     provided on the export permit, if any, issued by the country 
     of export; and
       ``(2) the estimated export charge declared by a United 
     States importer pursuant to section 803(b)(2) is consistent 
     with the determination published by the Under Secretary for 
     International Trade pursuant to section 805(b).
       ``(b) Examination of Books and Records.--
       ``(1) In general.--Any record relating to the importer 
     declaration program required under section 803 shall be 
     treated as a record required to be maintained and produced 
     under title V of this Act.
       ``(2) Examination of records.--The Secretary of the 
     Treasury is authorized to take such action, and examine such 
     records, under section 509 of this Act, as the Secretary 
     determines necessary to verify the declarations made pursuant 
     to section 803(c) are true and accurate.

     ``SEC. 808. PENALTIES.

       ``(a) In General.--It shall be unlawful for any person to 
     import into the United States softwood lumber or softwood 
     lumber products in knowing violation of this title.
       ``(b) Civil Penalties.--Any person who commits an unlawful 
     act as set forth in subsection (a) shall be liable for a 
     civil penalty not to exceed $10,000 for each knowing 
     violation.
       ``(c) Other Penalties.--In addition to the penalties 
     provided for in subsection (b), any violation of this title 
     that violates any other customs law of the United States 
     shall be subject to any applicable civil and criminal 
     penalty, including seizure and forfeiture, that may be 
     imposed under such custom law or title 18, United States 
     Code, with respect to the importation of softwood lumber and 
     softwood lumber products described in section 804(a).
       ``(d) Factors To Consider in Assessing Penalties.--In 
     determining the amount of civil penalties to be assessed 
     under this section, consideration shall be given to any 
     history of prior violations of this title by the person, the 
     ability of the person to pay the penalty, the seriousness of 
     the violation, and such other matters as fairness may 
     require.
       ``(e) Notice.--No penalty may be assessed under this 
     section against a person for violating a provision of this 
     title unless the person is given notice and opportunity to 
     make statements, both oral and written, with respect to such 
     violation.
       ``(f) Exception.--Notwithstanding any other provision of 
     this title, and without limitation, an importer shall not be 
     found to have violated subsection 803(c) if--
       ``(1) the importer made an appropriate inquiry in 
     accordance with section 803(c)(1) with respect to the 
     declaration;
       ``(2) the importer produces records maintained pursuant to 
     section 807(b) that substantiate the declaration; and
       ``(3) there is not substantial evidence indicating that the 
     importer knew that the fact to which the importer made the 
     declaration was false.

     ``SEC. 809. REPORTS.

       ``(a) Semiannual Reports.--Not later than 180 days after 
     the effective date of this title, and every 180 days 
     thereafter, the President shall submit to the appropriate 
     congressional committees a report--
       ``(1) describing the reconciliations conducted under 
     section 806, and the verifications conducted under section 
     807;
       ``(2) identifying the manner in which the United States 
     importers subject to reconciliations conducted under section 
     806 and verifications conducted under section 807 were 
     chosen;
       ``(3) identifying any penalties imposed under section 808;
       ``(4) identifying any patterns of noncompliance with this 
     title; and
       ``(5) identifying any problems or obstacles encountered in 
     the implementation and enforcement of this title.
       ``(b) Subsidies Reports.--Not later than 180 days after the 
     date of the enactment of this title, and every 180 days 
     thereafter, the Secretary of Commerce shall provide to the 
     appropriate congressional committees a report on any 
     subsidies on softwood lumber or softwood lumber products, 
     including stumpage subsidies, provided by countries of 
     export.
       ``(c) GAO Reports.--The Comptroller General of the United 
     States shall submit the following reports to the appropriate 
     congressional committees:
       ``(1) Not later than 18 months after the date of the 
     enactment of this title, a report on the effectiveness of the 
     reconciliations conducted under section 806, and 
     verifications conducted under section 807.
       ``(2) Not later than 12 months after the date of the 
     enactment of this title, a report on whether countries that 
     export softwood lumber or softwood lumber products to the 
     United States are complying with any international agreements 
     entered into by those countries and the United States.''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on the date that is 60 days after the date 
     of the enactment of this Act.

                          TITLE IV--NUTRITION

                     Subtitle A--Food Stamp Program

             PART I--RENAMING OF FOOD STAMP ACT AND PROGRAM

     SEC. 4001. RENAMING OF FOOD STAMP ACT AND PROGRAM.

       (a) Short Title.--The first section of the Food Stamp Act 
     of 1977 (7 U.S.C. 2011 note; Public Law 88-525) is amended by 
     striking ``Food Stamp Act of 1977'' and inserting ``Food and 
     Nutrition Act of 2008''.
       (b) Program.--The Food and Nutrition Act of 2008 (7 U.S.C. 
     2011 et seq.) (as amended by subsection (a)) is amended by 
     striking ``food stamp program'' each place it appears and 
     inserting ``supplemental nutrition assistance program''.

     SEC. 4002. CONFORMING AMENDMENTS.

       (a) In General.--
       (1) Section 4 of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2013) is amended in the section heading by striking 
     ``FOOD STAMP PROGRAM'' and inserting ``SUPPLEMENTAL NUTRITION 
     ASSISTANCE PROGRAM''.
       (2) Section 5(h)(2)(A) of the Food and Nutrition Act of 
     2008 (7 U.S.C. 2014(h)(2)(A)) is amended by striking ``Food 
     Stamp Disaster Task Force'' and inserting ``Disaster Task 
     Force''.
       (3) Section 6 of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2015) is amended--
       (A) in subsection (d)(3), by striking ``for food stamps'';
       (B) in subsection (j), in the subsection heading, by 
     striking ``Food Stamp''; and
       (C) in subsection (o)--
       (i) in paragraph (2), by striking ``food stamp benefits'' 
     and inserting ``supplemental nutrition assistance program 
     benefits''; and

[[Page H3463]]

       (ii) in paragraph (6)--

       (I) in subparagraph (A)--

       (aa) in clause (i), by striking ``food stamps'' and 
     inserting ``supplemental nutrition assistance program 
     benefits''; and
       (bb) in clause (ii)--
       (AA) in the matter preceding subclause (I), by striking ``a 
     food stamp recipient'' and inserting ``a member of a 
     household that receives supplemental nutrition assistance 
     program benefits''; and
       (BB) by striking ``food stamp benefits'' each place it 
     appears and inserting ``supplemental nutrition assistance 
     program benefits''; and

       (II) in subparagraphs (D) and (E), by striking ``food stamp 
     recipients'' each place it appears and inserting ``members of 
     households that receive supplemental nutrition assistance 
     program benefits''.

       (4) Section 7 of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2016) is amended--
       (A) in subsection (i)--
       (i) in paragraph (3)(B)(ii), by striking ``food stamp 
     households'' and inserting ``households receiving 
     supplemental nutrition assistance program benefits''; and
       (ii) in paragraph (7), by striking ``food stamp issuance'' 
     and inserting ``supplemental nutrition assistance issuance''; 
     and
       (B) in subsection (k)--
       (i) in paragraph (2), by striking ``food stamp benefits'' 
     and inserting ``supplemental nutrition assistance program 
     benefits''; and
       (ii) in paragraph (3), by striking ``food stamp retail'' 
     and inserting ``retail''.
       (5) Section 9(b)(1) of that Food and Nutrition Act of 2008 
     (7 U.S.C. 2018(b)(1)) is amended by striking ``food stamp 
     households'' and inserting ``households that receive 
     supplemental nutrition assistance program benefits''.
       (6) Section 11 of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2020) is amended--
       (A) in subsection (e)--
       (i) by striking ``food stamps'' each place it appears and 
     inserting ``supplemental nutrition assistance program 
     benefits'';
       (ii) by striking ``food stamp offices'' each place it 
     appears and inserting ``supplemental nutrition assistance 
     program offices'';
       (iii) by striking ``food stamp office'' each place it 
     appears and inserting ``supplemental nutrition assistance 
     program office''; and
       (iv) in paragraph (25)--

       (I) in the matter preceding subparagraph (A), by striking 
     ``Simplified Food Stamp Program'' and inserting ``Simplified 
     Supplemental Nutrition Assistance Program''; and
       (II) in subparagraph (A), by striking ``food stamp 
     benefits'' and inserting ``supplemental nutrition assistance 
     program benefits'';

       (B) in subsection (k), by striking ``may issue, upon 
     request by the State agency, food stamps'' and inserting 
     ``may provide, on request by the State agency, supplemental 
     nutrition assistance program benefits'';
       (C) in subsection (l), by striking ``food stamp 
     participation'' and inserting ``supplemental nutrition 
     assistance program participation'';
       (D) in subsections (q) and (r), in the subsection headings, 
     by striking ``Food Stamps'' each place it appears and 
     inserting ``Benefits'';
       (E) in subsection (s), by striking ``food stamp benefits'' 
     each place it appears and inserting ``supplemental nutrition 
     assistance program benefits''; and
       (F) in subsection (t)(1)--
       (i) in subparagraph (A), by striking ``food stamp 
     application'' and inserting ``supplemental nutrition 
     assistance program application''; and
       (ii) in subparagraph (B), by striking ``food stamp 
     benefits'' and inserting ``supplemental nutrition assistance 
     program benefits''.
       (7) Section 14(b) of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2023(b)) is amended by striking ``food stamp''.
       (8) Section 16 of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2025) is amended--
       (A) in subsection (a)(4), by striking ``food stamp 
     informational activities'' and inserting ``informational 
     activities relating to the supplemental nutrition assistance 
     program'';
       (B) in subsection (c)(9)(C), by striking ``food stamp 
     caseload'' and inserting ``the caseload under the 
     supplemental nutrition assistance program''; and
       (C) in subsection (h)(1)(E)(i), by striking ``food stamp 
     recipients'' and inserting ``members of households receiving 
     supplemental nutrition assistance program benefits''.
       (9) Section 17 of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2026) is amended--
       (A) in subsection (a)(2), by striking ``food stamp 
     benefits'' each place it appears and inserting ``supplemental 
     nutrition assistance program benefits'';
       (B) in subsection (b)--
       (i) in paragraph (1)--

       (I) in subparagraph (A), by striking ``food stamp 
     benefits'' and inserting ``supplemental nutrition assistance 
     program benefits''; and
       (II) in subparagraph (B)--

       (aa) in clause (ii)(II), by striking ``food stamp 
     recipients'' and inserting ``supplemental nutrition 
     assistance program recipients'';
       (bb) in clause (iii)(I), by striking ``the State's food 
     stamp households'' and inserting ``the number of households 
     in the State receiving supplemental nutrition assistance 
     program benefits''; and
       (cc) in clause (iv)(IV)(bb), by striking ``food stamp 
     deductions'' and inserting ``supplemental nutrition 
     assistance program deductions'';
       (ii) in paragraph (2), by striking ``food stamp benefits'' 
     and inserting ``supplemental nutrition assistance program 
     benefits''; and
       (iii) in paragraph (3)--

       (I) in subparagraph (A), by striking ``food stamp 
     employment'' and inserting ``supplemental nutrition 
     assistance program employment'';
       (II) in subparagraph (B), by striking ``food stamp 
     recipients'' and inserting ``supplemental nutrition 
     assistance program recipients'';
       (III) in subparagraph (C), by striking ``food stamps'' and 
     inserting ``supplemental nutrition assistance program 
     benefits''; and
       (IV) in subparagraph (D), by striking ``food stamp 
     benefits'' and inserting ``supplemental nutrition assistance 
     program benefits'';

       (C) in subsection (c), by striking ``food stamps'' and 
     inserting ``supplemental nutrition assistance'';
       (D) in subsection (d)--
       (i) in paragraph (1)(B), by striking ``food stamp 
     benefits'' and inserting ``supplemental nutrition assistance 
     program benefits'';
       (ii) in paragraph (2)--

       (I) in subparagraph (A), by striking ``food stamp 
     allotments'' each place it appears and inserting 
     ``allotments''; and
       (II) in subparagraph (C)(ii), by striking ``food stamp 
     benefit'' and inserting ``supplemental nutrition assistance 
     program benefits''; and

       (iii) in paragraph (3)(E), by striking ``food stamp 
     benefits'' and inserting ``supplemental nutrition assistance 
     program benefits'';
       (E) in subsections (e) and (f), by striking ``food stamp 
     benefits'' each place it appears and inserting ``supplemental 
     nutrition assistance program benefits'';
       (F) in subsection (g), in the first sentence, by striking 
     ``receipt of food stamp'' and inserting ``receipt of 
     supplemental nutrition assistance program''; and
       (G) in subsection (j), by striking ``food stamp agencies'' 
     and inserting ``supplemental nutrition assistance program 
     agencies''.
       (10) Section 18(a)(3)(A)(ii) of the Food and Nutrition Act 
     of 2008 (7 U.S.C. 2027(a)(3)(A)(ii)) is amended by striking 
     ``food stamps'' and inserting ``supplemental nutrition 
     assistance program benefits''.
       (11) Section 22 of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2031) is amended--
       (A) in the section heading, by striking ``FOOD STAMP 
     PORTION OF MINNESOTA FAMILY INVESTMENT PLAN'' and inserting 
     ``MINNESOTA FAMILY INVESTMENT PROJECT'';
       (B) in subsections (b)(12) and (d)(3), by striking ``the 
     Food Stamp Act, as amended,'' each place it appears and 
     inserting ``this Act''; and
       (C) in subsection (g)(1), by striking ``the Food Stamp Act 
     of 1977 (7 U.S.C. 2011 et seq.)'' and inserting ``this Act''.
       (12) Section 26 of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2035) is amended--
       (A) in the section heading, by striking ``SIMPLIFIED FOOD 
     STAMP PROGRAM'' and inserting ``SIMPLIFIED SUPPLEMENTAL 
     NUTRITION ASSISTANCE PROGRAM''; and
       (B) in subsection (b), by striking ``simplified food stamp 
     program'' and inserting ``simplified supplemental nutrition 
     assistance program''.
       (b) Conforming Cross-References.--
       (1) In general.--Each provision of law described in 
     paragraph (2) is amended (as applicable)--
       (A) by striking ``food stamp program'' each place it 
     appears and inserting ``supplemental nutrition assistance 
     program'';
       (B) by striking ``Food Stamp Act of 1977'' each place it 
     appears and inserting ``Food and Nutrition Act of 2008'';
       (C) by striking ``Food Stamp Act'' each place it appears 
     and inserting ``Food and Nutrition Act of 2008'';
       (D) by striking ``food stamp'' each place it appears and 
     inserting ``supplemental nutrition assistance program 
     benefits'';
       (E) by striking ``food stamps'' each place it appears and 
     inserting ``supplemental nutrition assistance program 
     benefits'';
       (F) in each applicable title, subtitle, chapter, 
     subchapter, and section heading, by striking ``FOOD STAMP 
     ACT'' each place it appears and inserting ``FOOD AND 
     NUTRITION ACT OF 2008'';
       (G) in each applicable subsection and appropriations 
     heading, by striking ``Food Stamp Act'' each place it appears 
     and inserting ``Food and Nutrition Act of 2008'';
       (H) in each applicable heading other than a title, 
     subtitle, chapter, subchapter, section, subsection, or 
     appropriations heading, by striking ``FOOD STAMP ACT'' each 
     place it appears and inserting ``FOOD AND NUTRITION ACT OF 
     2008'';
       (I) in each applicable title, subtitle, chapter, 
     subchapter, and section heading, by striking ``FOOD STAMP 
     PROGRAM'' each place it appears and inserting ``SUPPLEMENTAL 
     NUTRITION ASSISTANCE PROGRAM'';
       (J) in each applicable subsection and appropriations 
     heading, by striking ``Food Stamp Program'' each place it 
     appears and inserting ``Supplemental Nutrition Assistance 
     Program'';
       (K) in each applicable heading other than a title, 
     subtitle, chapter, subchapter, section, subsection, or 
     appropriations heading, by striking ``FOOD STAMP PROGRAM'' 
     each place it appears and inserting ``SUPPLEMENTAL NUTRITION 
     ASSISTANCE PROGRAM'';
       (L) in each applicable title, subtitle, chapter, 
     subchapter, and section heading, by striking ``FOOD STAMPS'' 
     each place it appears and inserting ``SUPPLEMENTAL NUTRITION 
     ASSISTANCE PROGRAM BENEFITS'';
       (M) in each applicable subsection and appropriations 
     heading, by striking ``Food Stamps'' each place it appears 
     and inserting ``Supplemental Nutrition Assistance Program 
     Benefits''; and
       (N) in each applicable heading other than a title, 
     subtitle, chapter, subchapter, section, subsection, or 
     appropriations heading, by striking ``FOOD STAMPS'' each 
     place it appears and inserting ``SUPPLEMENTAL NUTRITION 
     ASSISTANCE PROGRAM BENEFITS''.
       (2) Provisions of law.--The provisions of law referred to 
     in paragraph (1) are the following:
       (A) The Hunger Prevention Act of 1988 (Public Law 100-435; 
     102 Stat. 1645).
       (B) The Food Stamp Program Improvements Act of 1994 (Public 
     Law 103-225; 108 Stat. 106).

[[Page H3464]]

       (C) Title IV of the Farm Security and Rural Investment Act 
     of 2002 (Public Law 107-171; 116 Stat. 305).
       (D) Section 2 of Public Law 103-205 (7 U.S.C. 2012 note).
       (E) Section 807(b) of the Stewart B. McKinney Homeless 
     Assistance Act (7 U.S.C. 2014 note; Public Law 100-77).
       (F) The Electronic Benefit Transfer Interoperability and 
     Portability Act of 2000 (Public Law 106-171; 114 Stat. 3).
       (G) Section 502(b) of the Agricultural Research, Extension, 
     and Education Reform Act of 1998 (7 U.S.C. 2025 note; Public 
     Law 105-185).
       (H) The National Agricultural Research, Extension, and 
     Teaching Policy Act of 1977 (7 U.S.C. 3101 et seq.).
       (I) The Emergency Food Assistance Act of 1983 (7 U.S.C. 
     7501 et seq.).
       (J) The Immigration and Nationality Act (8 U.S.C. 1101 et 
     seq.).
       (K) Section 8119 of the Department of Defense 
     Appropriations Act, 1999 (10 U.S.C. 113 note; Public Law 105-
     262).
       (L) The Armored Car Industry Reciprocity Act of 1993 (15 
     U.S.C. 5901 et seq.).
       (M) Title 18, United States Code.
       (N) The Higher Education Act of 1965 (20 U.S.C. 1001 et 
     seq.).
       (O) The Internal Revenue Code of 1986.
       (P) Section 650 of the Treasury and General Government 
     Appropriations Act, 2000 (26 U.S.C. 7801 note; Public Law 
     106-58).
       (Q) The Wagner-Peysner Act (29 U.S.C. 49 et seq.).
       (R) The Workforce Investment Act of 1998 (29 U.S.C. 2801 et 
     seq.).
       (S) Title 31, United States Code.
       (T) Title 37, United States Code.
       (U) The Public Health Service Act (42 U.S.C. 201 et seq.).
       (V) Titles II through XIX of the Social Security Act (42 
     U.S.C. 401 et seq.).
       (W) Section 406 of the Family Support Act of 1988 (Public 
     Law 100-485; 102 Stat. 2400).
       (X) Section 232 of the Social Security Act Amendments of 
     1994 (42 U.S.C. 1314a).
       (Y) The United States Housing Act of 1937 (42 U.S.C. 1437 
     et seq.).
       (Z) The Richard B. Russell National School Lunch Act (42 
     U.S.C. 1751 et seq.).
       (AA) The Child Nutrition Act of 1966 (42 U.S.C. 1771 et 
     seq.).
       (BB) The Older Americans Act of 1965 (42 U.S.C. 3001 et 
     seq.).
       (CC) Section 208 of the Intergovernmental Personnel Act of 
     1970 (42 U.S.C. 4728).
       (DD) The Robert T. Stafford Disaster Relief and Emergency 
     Assistance Act (42 U.S.C. 5121 et seq.).
       (EE) The Low-Income Home Energy Assistance Act of 1981 (42 
     U.S.C. 8621 et seq.).
       (FF) Section 658K of the Child Care and Development Block 
     Grant Act of 1990 (42 U.S.C. 9858i).
       (GG) The Alaska Native Claims Settlement Act (43 U.S.C. 
     1601 et seq.).
       (HH) Public Law 95-348 (92 Stat. 487).
       (II) The Agriculture and Food Act of 1981 (Public Law 97-
     98; 95 Stat. 1213).
       (JJ) The Disaster Assistance Act of 1988 (Public Law 100-
     387; 102 Stat. 924).
       (KK) The Food, Agriculture, Conservation, and Trade Act of 
     1990 (Public Law 101-624; 104 Stat. 3359).
       (LL) The Cranston-Gonzalez National Affordable Housing Act 
     (Public Law 101-625; 104 Stat. 4079).
       (MM) Section 388 of the Persian Gulf Conflict Supplemental 
     Authorization and Personnel Benefits Act of 1991 (Public Law 
     102-25; 105 Stat. 98).
       (NN) The Food, Agriculture, Conservation, and Trade Act 
     Amendments of 1991 (Public Law 102-237; 105 Stat. 1818).
       (OO) The Act of March 26, 1992 (Public Law 102-265; 106 
     Stat. 90).
       (PP) Public Law 105-379 (112 Stat. 3399).
       (QQ) Section 101(c) of the Emergency Supplemental Act, 2000 
     (Public Law 106-246; 114 Stat. 528).
       (c) References.--Any reference in any Federal, State, 
     tribal, or local law (including regulations) to the ``food 
     stamp program'' established under the Food and Nutrition Act 
     of 2008 (7 U.S.C. 2011 et seq.) shall be considered to be a 
     reference to the ``supplemental nutrition assistance 
     program'' established under that Act.

                     PART II--BENEFIT IMPROVEMENTS

     SEC. 4101. EXCLUSION OF CERTAIN MILITARY PAYMENTS FROM 
                   INCOME.

       Section 5(d) of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2014(d)) is amended--
       (1) by striking ``(d) Household'' and inserting ``(d) 
     Exclusions From Income.--Household'';
       (2) by striking ``only (1) any'' and inserting ``only--
       ``(1) any'';
       (3) by indenting each of paragraphs (2) through (18) so as 
     to align with the margin of paragraph (1) (as amended by 
     paragraph (2));
       (4) by striking the comma at the end of each of paragraphs 
     (1) through (16) and inserting a semicolon;
       (5) in paragraph (3)--
       (A) by striking ``like (A) awarded'' and inserting ``like--
       ``(A) awarded'';
       (B) by striking ``thereof, (B) to'' and inserting 
     ``thereof;
       ``(B) to''; and
       (C) by striking ``program, and (C) to'' and inserting 
     ``program; and
       ``(C) to'';
       (6) in paragraph (11), by striking ``)), or (B) a'' and 
     inserting ``)); or
       ``(B) a'';
       (7) in paragraph (17), by striking ``, and'' at the end and 
     inserting a semicolon;
       (8) in paragraph (18), by striking the period at the end 
     and inserting ``; and''; and
       (9) by adding at the end the following:
       ``(19) any additional payment under chapter 5 of title 37, 
     United States Code, or otherwise designated by the Secretary 
     to be appropriate for exclusion under this paragraph, that is 
     received by or from a member of the United States Armed 
     Forces deployed to a designated combat zone, if the 
     additional pay--
       ``(A) is the result of deployment to or service in a combat 
     zone; and
       ``(B) was not received immediately prior to serving in a 
     combat zone.''.

     SEC. 4102. STRENGTHENING THE FOOD PURCHASING POWER OF LOW-
                   INCOME AMERICANS.

       Section 5(e)(1) of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2014(e)(1)) is amended--
       (1) in subparagraph (A)(ii), by striking ``not less than 
     $134'' and all that follows through the end of the clause and 
     inserting the following: ``not less than--

       ``(I) for fiscal year 2009, $144, $246, $203, and $127, 
     respectively; and
       ``(II) for fiscal year 2010 and each fiscal year 
     thereafter, an amount that is equal to the amount from the 
     previous fiscal year adjusted to the nearest lower dollar 
     increment to reflect changes for the 12-month period ending 
     on the preceding June 30 in the Consumer Price Index for All 
     Urban Consumers published by the Bureau of Labor Statistics 
     of the Department of Labor, for items other than food.'';

       (2) in subparagraph (B)(ii), by striking ``not less than 
     $269'' and all that follows through the end of the clause and 
     inserting the following: ``not less than--

       ``(I) for fiscal year 2009, $289; and
       ``(II) for fiscal year 2010 and each fiscal year 
     thereafter, an amount that is equal to the amount from the 
     previous fiscal year adjusted to the nearest lower dollar 
     increment to reflect changes for the 12-month period ending 
     on the preceding June 30 in the Consumer Price Index for All 
     Urban Consumers published by the Bureau of Labor Statistics 
     of the Department of Labor, for items other than food.''; and

       (3) by adding at the end the following:
       ``(C) Requirement.--Each adjustment under subparagraphs 
     (A)(ii)(II) and (B)(ii)(II) shall be based on the unrounded 
     amount for the prior 12-month period.''.

     SEC. 4103. SUPPORTING WORKING FAMILIES WITH CHILD CARE 
                   EXPENSES.

       Section 5(e)(3)(A) of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2014(e)(3)(A)) is amended by striking ``, the maximum 
     allowable level of which shall be $200 per month for each 
     dependent child under 2 years of age and $175 per month for 
     each other dependent,''.

     SEC. 4104. ASSET INDEXATION, EDUCATION, AND RETIREMENT 
                   ACCOUNTS.

       (a) Adjusting Countable Resources for Inflation.--Section 
     (5)(g) of the Food and Nutrition Act of 2008 (7 U.S.C. 
     2014(g)) is amended--
       (1) by striking ``(g)(1) The Secretary'' and inserting the 
     following:
       ``(g) Allowable Financial Resources.--
       ``(1) Total amount.--
       ``(A) In general.--The Secretary''.
       (2) in subparagraph (A) (as so designated by paragraph 
     (1))--
       (A) by inserting ``(as adjusted in accordance with 
     subparagraph (B))'' after ``$2,000''; and
       (B) by inserting ``(as adjusted in accordance with 
     subparagraph (B))'' after ``$3,000''; and
       (3) by adding at the end the following:
       ``(B) Adjustment for inflation.--
       ``(i) In general.--Beginning on October 1, 2008, and each 
     October 1 thereafter, the amounts specified in subparagraph 
     (A) shall be adjusted and rounded down to the nearest $250 
     increment to reflect changes for the 12-month period ending 
     the preceding June in the Consumer Price Index for All Urban 
     Consumers published by the Bureau of Labor Statistics of the 
     Department of Labor.
       ``(ii) Requirement.--Each adjustment under clause (i) shall 
     be based on the unrounded amount for the prior 12-month 
     period.''.
       (b) Exclusion of Retirement Accounts From Allowable 
     Financial Resources.--
       (1) In general.--Section 5(g)(2)(B)(v) of the Food and 
     Nutrition Act of 2008 (7 U.S.C. 2014(g)(2)(B)(v)) is amended 
     by striking ``or retirement account (including an individual 
     account)'' and inserting ``account''.
       (2) Mandatory and discretionary exclusions.--Section 5(g) 
     of the Food and Nutrition Act of 2008 (7 U.S.C. 2014(g)) is 
     amended by adding at the end the following:
       ``(7) Exclusion of retirement accounts from allowable 
     financial resources.--
       ``(A) Mandatory exclusions.--The Secretary shall exclude 
     from financial resources under this subsection the value of--
       ``(i) any funds in a plan, contract, or account, described 
     in sections 401(a), 403(a), 403(b), 408, 408A, 457(b), and 
     501(c)(18) of the Internal Revenue Code of 1986 and the value 
     of funds in a Federal Thrift Savings Plan account as provided 
     in section 8439 of title 5, United States Code; and
       ``(ii) any retirement program or account included in any 
     successor or similar provision that may be enacted and 
     determined to be exempt from tax under the Internal Revenue 
     Code of 1986.
       ``(B) Discretionary exclusions.--The Secretary may exclude 
     from financial resources under this subsection the value of 
     any other retirement plans, contracts, or accounts (as 
     determined by the Secretary).''.
       (c) Exclusion of Education Accounts From Allowable 
     Financial Resources.--Section 5(g) of the Food and Nutrition 
     Act of 2008 (7 U.S.C. 2014(g)) (as amended by subsection (b)) 
     is amended by adding at the end the following:
       ``(8) Exclusion of education accounts from allowable 
     financial resources.--
       ``(A) Mandatory exclusions.--The Secretary shall exclude 
     from financial resources under this

[[Page H3465]]

     subsection the value of any funds in a qualified tuition 
     program described in section 529 of the Internal Revenue Code 
     of 1986 or in a Coverdell education savings account under 
     section 530 of that Code.
       ``(B) Discretionary exclusions.--The Secretary may exclude 
     from financial resources under this subsection the value of 
     any other education programs, contracts, or accounts (as 
     determined by the Secretary).''.

     SEC. 4105. FACILITATING SIMPLIFIED REPORTING.

       Section 6(c)(1)(A) of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2015(c)(1)(A)) is amended--
       (1) by striking ``reporting by'' and inserting 
     ``reporting'';
       (2) in clause (i), by inserting ``for periods shorter than 
     4 months by'' before ``migrant'';
       (3) in clause (ii), by inserting ``for periods shorter than 
     4 months by'' before ``households''; and
       (4) in clause (iii), by inserting ``for periods shorter 
     than 1 year by'' before ``households''.

     SEC. 4106. TRANSITIONAL BENEFITS OPTION.

       Section 11(s)(1) of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2020(s)(1)) is amended--
       (1) by striking ``benefits to a household''; and inserting 
     ``benefits--
       ``(A) to a household'';
       (2) by striking the period at the end and inserting ``; 
     or''; and
       (3) by adding at the end the following:
       ``(B) at the option of the State, to a household with 
     children that ceases to receive cash assistance under a 
     State-funded public assistance program.''.

     SEC. 4107. INCREASING THE MINIMUM BENEFIT.

       Section 8(a) of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2017(a)) is amended by striking ``$10 per month'' and 
     inserting ``8 percent of the cost of the thrifty food plan 
     for a household containing 1 member, as determined by the 
     Secretary under section 3, rounded to the nearest whole 
     dollar increment''.

     SEC. 4108. EMPLOYMENT, TRAINING, AND JOB RETENTION.

       Section 6(d)(4) of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2015(d)(4)) is amended--
       (1) in subparagraph (B)--
       (A) by redesignating clause (vii) as clause (viii); and
       (B) by inserting after clause (vi) the following:
       ``(vii) Programs intended to ensure job retention by 
     providing job retention services, if the job retention 
     services are provided for a period of not more than 90 days 
     after an individual who received employment and training 
     services under this paragraph gains employment.''; and
       (2) in subparagraph (F), by adding at the end the 
     following:
       ``(iii) Any individual voluntarily electing to participate 
     in a program under this paragraph shall not be subject to the 
     limitations described in clauses (i) and (ii).''.

                      PART III--PROGRAM OPERATIONS

     SEC. 4111. NUTRITION EDUCATION.

       (a) Authority to Provide Nutrition Education.--Section 4(a) 
     of the Food and Nutrition Act of 2008 (7 U.S.C. 2013(a)) is 
     amended in the first sentence by inserting ``and, through an 
     approved State plan, nutrition education'' after ``an 
     allotment''.
       (b) Implementation.--Section 11 of the Food and Nutrition 
     Act of 2008 (7 U.S.C. 2020) is amended by striking subsection 
     (f) and inserting the following:
       ``(f) Nutrition Education.--
       ``(1) In general.--State agencies may implement a nutrition 
     education program for individuals eligible for program 
     benefits that promotes healthy food choices consistent with 
     the most recent Dietary Guidelines for Americans published 
     under section 301 of the National Nutrition Monitoring and 
     Related Research Act of 1990 (7 U.S.C. 5341).
       ``(2) Delivery of nutrition education.--State agencies may 
     deliver nutrition education directly to eligible persons or 
     through agreements with the National Institute of Food and 
     Agriculture, including through the expanded food and 
     nutrition education program under section 3(d) of the Act of 
     May 8, 1914 (7 U.S.C. 343(d)), and other State and community 
     health and nutrition providers and organizations.
       ``(3) Nutrition education state plans.--
       ``(A) In general.--A State agency that elects to provide 
     nutrition education under this subsection shall submit a 
     nutrition education State plan to the Secretary for approval.
       ``(B) Requirements.--The plan shall--
       ``(i) identify the uses of the funding for local projects; 
     and
       ``(ii) conform to standards established by the Secretary 
     through regulations or guidance.
       ``(C) Reimbursement.--State costs for providing nutrition 
     education under this subsection shall be reimbursed pursuant 
     to section 16(a).
       ``(4) Notification.--To the maximum extent practicable, 
     State agencies shall notify applicants, participants, and 
     eligible program participants of the availability of 
     nutrition education under this subsection.''.

     SEC. 4112. TECHNICAL CLARIFICATION REGARDING ELIGIBILITY.

       Section 6(k) of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2015(k)) is amended--
       (1) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively, and indenting 
     appropriately;
       (2) by striking ``No member'' and inserting the following:
       ``(1) In general.--No member''; and
       (3) by adding at the end the following:
       ``(2) Procedures.--The Secretary shall--
       ``(A) define the terms `fleeing' and `actively seeking' for 
     purposes of this subsection; and
       ``(B) ensure that State agencies use consistent procedures 
     established by the Secretary that disqualify individuals whom 
     law enforcement authorities are actively seeking for the 
     purpose of holding criminal proceedings against the 
     individual.''.

     SEC. 4113. CLARIFICATION OF SPLIT ISSUANCE.

       Section 7(h) of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2016(h)) is amended by striking paragraph (2) and 
     inserting the following:
       ``(2) Requirements.--
       ``(A) In general.--Any procedure established under 
     paragraph (1) shall--
       ``(i) not reduce the allotment of any household for any 
     period; and
       ``(ii) ensure that no household experiences an interval 
     between issuances of more than 40 days.
       ``(B) Multiple issuances.--The procedure may include 
     issuing benefits to a household in more than 1 issuance 
     during a month only when a benefit correction is 
     necessary.''.

     SEC. 4114. ACCRUAL OF BENEFITS.

       Section 7(i) of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2016(i)) is amended by adding at the end the 
     following:
       ``(12) Recovering electronic benefits.--
       ``(A) In general.--A State agency shall establish a 
     procedure for recovering electronic benefits from the account 
     of a household due to inactivity.
       ``(B) Benefit storage.--A State agency may store recovered 
     electronic benefits off-line in accordance with subparagraph 
     (D), if the household has not accessed the account after 6 
     months.
       ``(C) Benefit expunging.--A State agency shall expunge 
     benefits that have not been accessed by a household after a 
     period of 12 months.
       ``(D) Notice.--A State agency shall--
       ``(i) send notice to a household the benefits of which are 
     stored under subparagraph (B); and
       ``(ii) not later than 48 hours after request by the 
     household, make the stored benefits available to the 
     household.''.

     SEC. 4115. ISSUANCE AND USE OF PROGRAM BENEFITS.

       (a) In General.--Section 7 of the Food and Nutrition Act of 
     2008 (7 U.S.C. 2016) is amended--
       (1) by striking the section designation and heading and all 
     that follows through ``subsection (j)) shall be'' and 
     inserting the following:

     ``SEC. 7. ISSUANCE AND USE OF PROGRAM BENEFITS.

       ``(a) In General.--Except as provided in subsection (i), 
     EBT cards shall be'';
       (2) in subsection (b)--
       (A) by striking ``(b) Coupons'' and inserting the 
     following:
       ``(b) Use.--Benefits''; and
       (B) by striking the second proviso;
       (3) in subsection (c)--
       (A) by striking ``(c) Coupons'' and inserting the 
     following:
       ``(c) Design.--
       ``(1) In general.--EBT cards'';
       (B) in the first sentence, by striking ``and define their 
     denomination''; and
       (C) by striking the second sentence and inserting the 
     following:
       ``(2) Prohibition.--The name of any public official shall 
     not appear on any EBT card.'';
       (4) by striking subsection (d);
       (5) in subsection (e)--
       (A) by striking ``coupons'' each place it appears and 
     inserting ``benefits''; and
       (B) by striking ``coupon issuers'' each place it appears 
     and inserting ``benefit issuers'';
       (6) in subsection (f)--
       (A) by striking ``coupons'' each place it appears and 
     inserting ``benefits'';
       (B) by striking ``coupon issuer'' and inserting ``benefit 
     issuers'';
       (C) by striking ``including any losses'' and all that 
     follows through ``section 11(e)(20),''; and
       (D) by striking ``and allotments'';
       (7) by striking subsection (g) and inserting the following:
       ``(g) Alternative Benefit Delivery.--
       ``(1) In general.--If the Secretary determines, in 
     consultation with the Inspector General of the Department of 
     Agriculture, that it would improve the integrity of the 
     supplemental nutrition assistance program, the Secretary 
     shall require a State agency to issue or deliver benefits 
     using alternative methods.
       ``(2) No imposition of costs.--The cost of documents or 
     systems that may be required by this subsection may not be 
     imposed upon a retail food store participating in the 
     supplemental nutrition assistance program.
       ``(3) Devaluation and termination of issuance of paper 
     coupons.--
       ``(A) Coupon issuance.--Effective on the date of enactment 
     of the Food, Conservation, and Energy Act of 2008, no State 
     shall issue any coupon, stamp, certificate, or authorization 
     card to a household that receives supplemental nutrition 
     assistance under this Act.
       ``(B) EBT cards.--Effective beginning on the date that is 1 
     year after the date of enactment of the Food, Conservation, 
     and Energy Act of 2008, only an EBT card issued under 
     subsection (i) shall be eligible for exchange at any retail 
     food store.
       ``(C) De-obligation of coupons.--Coupons not redeemed 
     during the 1-year period beginning on the date of enactment 
     of the Food, Conservation, and Energy Act of 2008 shall--
       ``(i) no longer be an obligation of the Federal Government; 
     and
       ``(ii) not be redeemable.'';
       (8) in subsection (h)(1), by striking ``coupons'' and 
     inserting ``benefits'';
       (9) in subsection (i), by adding at the end the following:
       ``(12) Interchange fees.--No interchange fees shall apply 
     to electronic benefit transfer transactions under this 
     subsection.'';
       (10) in subsection (j)--
       (A) in paragraph (2)(A)(ii), by striking ``printing, 
     shipping, and redeeming coupons'' and inserting ``issuing and 
     redeeming benefits''; and
       (B) in paragraph (5), by striking ``coupon'' and inserting 
     ``benefit'';
       (11) in subsection (k)--

[[Page H3466]]

       (A) by striking ``coupons in the form of'' each place it 
     appears and inserting ``program benefits in the form of'';
       (B) by striking ``a coupon issued in the form of'' each 
     place it appears and inserting ``program benefits in the form 
     of''; and
       (C) in subparagraph (A), by striking ``subsection 
     (i)(11)(A)'' and inserting ``subsection (h)(11)(A)''; and
       (12) by redesignating subsections (e) through (k) as 
     subsections (d) through (j), respectively.
       (b) Conforming Amendments.--
       (1) Section 3 of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2012) is amended--
       (A) in subsection (a), by striking ``coupons'' and 
     inserting ``benefits'';
       (B) by striking subsection (b) and inserting the following:
       ``(b) Benefit.--The term `benefit' means the value of 
     supplemental nutrition assistance provided to a household by 
     means of--
       ``(1) an electronic benefit transfer under section 7(i); or
       ``(2) other means of providing assistance, as determined by 
     the Secretary.'';
       (C) in subsection (c), in the first sentence, by striking 
     ``authorization cards'' and inserting ``benefits'';
       (D) in subsection (d), by striking ``or access device'' and 
     all that follows through the end of the subsection and 
     inserting a period;
       (E) in subsection (e)--
       (i) by striking ``(e) `Coupon issuer' means'' and inserting 
     the following:
       ``(e) Benefit Issuer.--The term `benefit issuer' means''; 
     and
       (ii) by striking ``coupons'' and inserting ``benefits'';
       (F) in subsection (g)(7), by striking ``subsection (r)'' 
     and inserting ``subsection (j)'';
       (G) in subsection (i)(5)--
       (i) in subparagraph (B), by striking ``subsection (r)'' and 
     inserting ``subsection (j)''; and
       (ii) in subparagraph (D), by striking ``coupons'' and 
     inserting ``benefits'';
       (H) in subsection (j), by striking ``(as that term is 
     defined in subsection (p))'';
       (I) in subsection (k)--
       (i) in paragraph (1)(A), by striking ``subsection (u)(1)'' 
     and inserting ``subsection (r)(1)'';
       (ii) in paragraph (2), by striking ``subsections (g)(3), 
     (4), (5), (7), (8), and (9) of this section'' and inserting 
     ``paragraphs (3), (4), (5), (7), (8), and (9) of subsection 
     (k)''; and
       (iii) in paragraph (3), by striking ``subsection (g)(6) of 
     this section'' and inserting ``subsection (k)(6)'';
       (J) in subsection (t), by inserting ``, including point of 
     sale devices,'' after ``other means of access'';
       (K) in subsection (u), by striking ``(as defined in 
     subsection (g))'';
       (L) by adding at the end the following:
       ``(v) EBT Card.--The term `EBT card' means an electronic 
     benefit transfer card issued under section 7(i).''; and
       (M) by redesignating subsections (a) through (v) as 
     subsections (b), (d), (f), (g), (e), (h), (k), (l), (n), (o), 
     (p), (q), (s), (t), (u), (v), (c), (j), (m), (a), (r), and 
     (i), respectively, and moving the subsections so as to appear 
     in alphabetical order.
       (2) Section 4(a) of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2013(a)) is amended--
       (A) by striking ``coupons'' each place it appears and 
     inserting ``benefits''; and
       (B) by striking ``Coupons issued'' and inserting ``benefits 
     issued''.
       (3) Section 5 of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2014) is amended--
       (A) in subsection (a), by striking ``section 3(i)(4)'' and 
     inserting ``section 3(n)(4)'';
       (B) in subsection (h)(3)(B), in the second sentence, by 
     striking ``section 7(i)'' and inserting ``section 7(h)''; and
       (C) in subsection (i)(2)(E), by striking ``, as defined in 
     section 3(i) of this Act,''.
       (4) Section 6 of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2015) is amended--
       (A) in subsection (b)(1)--
       (i) in subparagraph (B), by striking ``coupons or 
     authorization cards'' and inserting ``program benefits''; and
       (ii) by striking ``coupons'' each place it appears and 
     inserting ``benefits''; and
       (B) in subsection (d)(4)(L), by striking ``section 
     11(e)(22)'' and inserting ``section 11(e)(19)''.
       (5) Section 8 of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2017) is amended--
       (A) in subsection (b), by striking ``, whether through 
     coupons, access devices, or otherwise''; and
       (B) in subsections (e)(1) and (f), by striking ``section 
     3(i)(5)'' each place it appears and inserting ``section 
     3(n)(5)''.
       (6) Section 9 of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2018) is amended--
       (A) by striking ``coupons'' each place it appears and 
     inserting ``benefits'';
       (B) in subsection (a)--
       (i) in paragraph (1), by striking ``coupon business'' and 
     inserting ``benefit transactions''; and
       (ii) by striking paragraph (3) and inserting the following:
       ``(3) Authorization periods.--The Secretary shall establish 
     specific time periods during which authorization to accept 
     and redeem benefits shall be valid under the supplemental 
     nutrition assistance program.''; and
       (C) in subsection (g), by striking ``section 3(g)(9)'' and 
     inserting ``section 3(k)(9)''.
       (7) Section 10 of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2019) is amended--
       (A) by striking the section designation and heading and all 
     that follows through ``Regulations'' and inserting the 
     following:

     ``SEC. 10. REDEMPTION OF PROGRAM BENEFITS.

       ``Regulations'';
       (B) by striking ``section 3(k)(4) of this Act'' and 
     inserting ``section 3(p)(4)'';
       (C) by striking ``section 7(i)'' and inserting ``section 
     7(h)''; and
       (D) by striking ``coupons'' each place it appears and 
     inserting ``benefits''.
       (8) Section 11 of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2020) is amended--
       (A) in subsection (d)--
       (i) by striking ``section 3(n)(1) of this Act'' each place 
     it appears and inserting ``section 3(t)(1)''; and
       (ii) by striking ``section 3(n)(2) of this Act'' each place 
     it appears and inserting ``section 3(t)(2)'';
       (B) in subsection (e)--
       (i) in paragraph (8)(E), by striking ``paragraph (16) or 
     (20)(B)'' and inserting ``paragraph (15) or (18)(B)'';
       (ii) by striking paragraphs (15) and (19);
       (iii) by redesignating paragraphs (16) through (18) and 
     (20) through (25) as paragraphs (15) through (17) and (18) 
     through (23), respectively; and
       (iv) in paragraph (17) (as so redesignated), by striking 
     ``(described in section 3(n)(1) of this Act)'' and inserting 
     ``described in section 3(t)(1)'';
       (C) in subsection (h), by striking ``coupon or coupons'' 
     and inserting ``benefits'';
       (D) by striking ``coupon'' each place it appears and 
     inserting ``benefit'';
       (E) by striking ``coupons'' each place it appears and 
     inserting ``benefits''; and
       (F) in subsection (q), by striking ``section 11(e)(20)(B)'' 
     and inserting ``subsection (e)(18)(B)''.
       (9) Section 13 of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2022) is amended by striking ``coupons'' each place it 
     appears and inserting ``benefits''.
       (10) Section 15 of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2024) is amended--
       (A) in subsection (a), by striking ``coupons'' and 
     inserting ``benefits'';
       (B) in subsection (b)(1)--
       (i) by striking ``coupons, authorization cards, or access 
     devices'' each place it appears and inserting ``benefits'';
       (ii) by striking ``coupons or authorization cards'' and 
     inserting ``benefits''; and
       (iii) by striking ``access device'' each place it appears 
     and inserting ``benefit'';
       (C) in subsection (c), by striking ``coupons'' each place 
     it appears and inserting ``benefits'';
       (D) in subsection (d), by striking ``Coupons'' and 
     inserting ``Benefits'';
       (E) by striking subsections (e) and (f);
       (F) by redesignating subsections (g) and (h) as subsections 
     (e) and (f), respectively; and
       (G) in subsection (e) (as so redesignated), by striking 
     ``coupon, authorization cards or access devices'' and 
     inserting ``benefits''.
       (11) Section 16(a) of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2025(a)) is amended by striking ``coupons'' each place 
     it appears and inserting ``benefits''.
       (12) Section 17 of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2026) is amended--
       (A) in subsection (a)(2), by striking ``coupon'' and 
     inserting ``benefit'';
       (B) in subsection (b)(1)--
       (i) in subparagraph (B)--

       (I) in clause (iv)--

       (aa) in subclause (I), inserting ``or otherwise providing 
     benefits in a form not restricted to the purchase of food'' 
     after ``of cash'';
       (bb) in subclause (III)(aa), by striking ``section 3(i)'' 
     and inserting ``section 3(n)''; and
       (cc) in subclause (VII), by striking ``section 7(j)'' and 
     inserting ``section 7(i)''; and

       (II) in clause (v)--

       (aa) by striking ``countersigned food coupons or similar''; 
     and
       (bb) by striking ``food coupons'' and inserting ``EBT 
     cards''; and
       (ii) in subparagraph (C)(i)(I), by striking ``coupons'' and 
     inserting ``EBT cards'';
       (C) in subsection (f), by striking ``section 7(g)(2)'' and 
     inserting ``section 7(f)(2)''; and
       (D) in subsection (j), by striking ``coupon'' and inserting 
     ``benefit''.
       (13) Section 19(a)(2)(A)(ii) of the Food and Nutrition Act 
     of 2008 (7 U.S.C. 2028(a)(2)(A)(ii)) is amended by striking 
     ``section 3(o)(4)'' and inserting ``section 3(u)(4)''.
       (14) Section 21 of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2030) is repealed.
       (15) Section 22 of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2031) is amended--
       (A) by striking ``food coupons'' each place it appears and 
     inserting ``benefits'';
       (B) by striking ``coupons'' each place it appears and 
     inserting ``benefits''; and
       (C) in subsection (g)(1)(A), by striking ``coupon'' and 
     inserting ``benefits''.
       (16) Section 26(f)(3) of the Food and Nutrition Act of 2008 
     (7 U.S.C. 2035(f)(3)) is amended--
       (A) in subparagraph (A), by striking ``subsections (a) 
     through (g)'' and inserting ``subsections (a) through (f)''; 
     and
       (B) in subparagraph (E), by striking ``(16), (18), (20), 
     (24), and (25)'' and inserting ``(15), (17), (18), (22), and 
     (23)''.
       (c) Conforming Cross-References.--
       (1) In general.--
       (A) Use of terms.--Each provision of law described in 
     subparagraph (B) is amended (as applicable)--
       (i) by striking ``coupons'' each place it appears and 
     inserting ``benefits'';
       (ii) by striking ``coupon'' each place it appears and 
     inserting ``benefit'';
       (iii) by striking ``food coupons'' each place it appears 
     and inserting ``benefits'';
       (iv) in each section heading, by striking ``FOOD COUPONS'' 
     each place it appears and inserting ``BENEFITS'';
       (v) by striking ``food stamp coupon'' each place it appears 
     and inserting ``benefit''; and
       (vi) by striking ``food stamps'' each place it appears and 
     inserting ``benefits''.
       (B) Provisions of law.--The provisions of law referred to 
     in subparagraph (A) are the following:
       (i) Section 2 of Public Law 103-205 (7 U.S.C. 2012 note; 
     107 Stat. 2418).

[[Page H3467]]

       (ii) Section 1956(c)(7)(D) of title 18, United States Code.
       (iii) Titles II through XIX of the Social Security Act (42 
     U.S.C. 401 et seq.).
       (iv) Section 401(b)(3) of the Social Security Amendments of 
     1972 (42 U.S.C. 1382e note; Public Law 92-603).
       (v) The Robert T. Stafford Disaster Relief and Emergency 
     Assistance Act (42 U.S.C. 5121 et seq.).
       (vi) Section 802(d)(2)(A)(i)(II) of the Cranston-Gonzalez 
     National Affordable Housing Act (42 U.S.C. 
     8011(d)(2)(A)(i)(II)).
       (2) Definition references.--
       (A) Section 2 of Public Law 103-205 (7 U.S.C. 2012 note; 
     107 Stat. 2418) is amended by striking ``section 3(k)(1)'' 
     and inserting ``section 3(p)(1)''.
       (B) Section 205 of the Food Stamp Program Improvements Act 
     of 1994 (7 U.S.C. 2012 note; Public Law 103-225) is amended 
     by striking ``section 3(k) of such Act (as amended by section 
     201)'' and inserting ``section 3(p) of that Act''.
       (C) Section 115 of the Personal Responsibility and Work 
     Opportunity Reconciliation Act of 1996 (21 U.S.C. 862a) is 
     amended--
       (i) by striking ``section 3(h)'' each place it appears and 
     inserting ``section 3(l)''; and
       (ii) in subsection (e)(2), by striking ``section 3(m)'' and 
     inserting ``section 3(s)''.
       (D) Section 402(a) of the Personal Responsibility and Work 
     Opportunity Reconciliation Act of 1996 (8 U.S.C. 1612(a)) is 
     amended--
       (i) in paragraph (2)(F)(ii), by striking ``section 3(r)'' 
     and inserting ``section 3(j)''; and
       (ii) in paragraph (3)(B), by striking ``section 3(h)'' and 
     inserting ``section 3(l)''.
       (E) Section 3803(c)(2)(C)(vii) of title 31, United States 
     Code, is amended by striking ``section 3(h)'' and inserting 
     ``section 3(l)''.
       (F) Section 303(d)(4) of the Social Security Act (42 U.S.C. 
     503(d)(4)) is amended by striking ``section 3(n)(1)'' and 
     inserting ``section 3(t)(1)''.
       (G) Section 404 of the Social Security Act (42 U.S.C. 604) 
     is amended by striking ``section 3(h)'' each place it appears 
     and inserting ``section 3(l)''.
       (H) Section 531 of the Social Security Act (42 U.S.C. 654) 
     is amended by striking ``section 3(h)'' each place it appears 
     and inserting ``section 3(l)''.
       (I) Section 802(d)(2)(A)(i)(II) of the Cranston-Gonzalez 
     National Affordable Housing Act (42 U.S.C. 
     8011(d)(2)(A)(i)(II)) is amended by striking ``(as defined in 
     section 3(e) of such Act)''.
       (d) References.--Any reference in any Federal, State, 
     tribal, or local law (including regulations) to a ``coupon'', 
     ``authorization card'', or other access device provided under 
     the Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.) 
     shall be considered to be a reference to a ``benefit'' 
     provided under that Act.

     SEC. 4116. REVIEW OF MAJOR CHANGES IN PROGRAM DESIGN.

       Section 11 of the Food and Nutrition Act of 2008 (7 U.S.C. 
     2020) is amended by striking the section enumerator and 
     heading and subsection (a) and inserting the following:

     ``SEC. 11. ADMINISTRATION.

       ``(a) State Responsibility.--
       ``(1) In general.--The State agency of each participating 
     State shall have responsibility for certifying applicant 
     households and issuing EBT cards.
       ``(2) Local administration.--The responsibility of the 
     agency of the State government shall not be affected by 
     whether the program is operated on a State-administered or 
     county-administered basis, as provided under section 3(t)(1).
       ``(3) Records.--
       ``(A) In general.--Each State agency shall keep such 
     records as may be necessary to determine whether the program 
     is being conducted in compliance with this Act (including 
     regulations issued under this Act).
       ``(B) Inspection and audit.--Records described in 
     subparagraph (A) shall--
       ``(i) be available for inspection and audit at any 
     reasonable time;
       ``(ii) subject to subsection (e)(8), be available for 
     review in any action filed by a household to enforce any 
     provision of this Act (including regulations issued under 
     this Act); and
       ``(iii) be preserved for such period of not less than 3 
     years as may be specified in regulations.
       ``(4) Review of major changes in program design.--
       ``(A) In general.--The Secretary shall develop standards 
     for identifying major changes in the operations of a State 
     agency, including--
       ``(i) large or substantially-increased numbers of low-
     income households that do not live in reasonable proximity to 
     an office performing the major functions described in 
     subsection (e);
       ``(ii) substantial increases in reliance on automated 
     systems for the performance of responsibilities previously 
     performed by personnel described in subsection (e)(6)(B);
       ``(iii) changes that potentially increase the difficulty of 
     reporting information under subsection (e) or section 6(c); 
     and
       ``(iv) changes that may disproportionately increase the 
     burdens on any of the types of households described in 
     subsection (e)(2)(A).
       ``(B) Notification.--If a State agency implements a major 
     change in operations, the State agency shall--
       ``(i) notify the Secretary; and
       ``(ii) collect such information as the Secretary shall 
     require to identify and correct any adverse effects on 
     program integrity or access, including access by any of the 
     types of households described in subsection (e)(2)(A).''.

     SEC. 4117. CIVIL RIGHTS COMPLIANCE.

       Section 11 of the Food and Nutrition Act of 2008 (7 U.S.C. 
     2020) is amended by striking subsection (c) and inserting the 
     following:
       ``(c) Civil Rights Compliance.--
       ``(1) In general.--In the certification of applicant 
     households for the supplemental nutrition assistance program, 
     there shall be no discrimination by reason of race, sex, 
     religious creed, national origin, or political affiliation.
       ``(2) Relation to other laws.--The administration of the 
     program by a State agency shall be consistent with the rights 
     of households under the following laws (including 
     implementing regulations):
       ``(A) The Age Discrimination Act of 1975 (42 U.S.C. 6101 et 
     seq.).
       ``(B) Section 504 of the Rehabilitation Act of 1973 (29 
     U.S.C. 794).
       ``(C) The Americans with Disabilities Act of 1990 (42 
     U.S.C. 12101 et seq.).
       ``(D) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 
     2000d et seq.).''.

     SEC. 4118. CODIFICATION OF ACCESS RULES.

       Section 11(e)(1) of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2020(e)(1)) is amended--
       (1) by striking ``shall (A) at'' and inserting ``shall--
       ``(A) at''; and
       (2) by striking ``and (B) use'' and inserting ``and
       ``(B) comply with regulations of the Secretary requiring 
     the use of''.

     SEC. 4119. STATE OPTION FOR TELEPHONIC SIGNATURE.

       Section 11(e)(2)(C) of the Food and Nutrition Act of 2008 
     (7 U.S.C. 2020(e)(2)(C)) is amended--
       (1) by striking ``(C) Nothing in this Act'' and inserting 
     the following:
       ``(C) Electronic and automated systems.--
       ``(i) In general.--Nothing in this Act''; and
       (2) by adding at the end the following:
       ``(ii) State option for telephonic signature.--A State 
     agency may establish a system by which an applicant household 
     may sign an application through a recorded verbal assent over 
     the telephone.
       ``(iii) Requirements.--A system established under clause 
     (ii) shall--

       ``(I) record for future reference the verbal assent of the 
     household member and the information to which assent was 
     given;
       ``(II) include effective safeguards against impersonation, 
     identity theft, and invasions of privacy;
       ``(III) not deny or interfere with the right of the 
     household to apply in writing;
       ``(IV) promptly provide to the household member a written 
     copy of the completed application, with instructions for a 
     simple procedure for correcting any errors or omissions;
       ``(V) comply with paragraph (1)(B);
       ``(VI) satisfy all requirements for a signature on an 
     application under this Act and other laws applicable to the 
     supplemental nutrition assistance program, with the date on 
     which the household member provides verbal assent considered 
     as the date of application for all purposes; and
       ``(VII) comply with such other standards as the Secretary 
     may establish.''.

     SEC. 4120. PRIVACY PROTECTIONS.

       Section 11(e)(8) of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2020(e)(8)) is amended--
       (1) in the matter preceding subparagraph (A)--
       (A) by striking ``limit'' and inserting ``prohibit''; and
       (B) by striking ``to persons'' and all that follows through 
     ``State programs'';
       (2) by redesignating subparagraphs (A) through (E) as 
     subparagraphs (B) through (F), respectively;
       (3) by inserting before subparagraph (B) (as so 
     redesignated) the following:
       ``(A) the safeguards shall permit--
       ``(i) the disclosure of such information to persons 
     directly connected with the administration or enforcement of 
     the provisions of this Act, regulations issued pursuant to 
     this Act, Federal assistance programs, or federally-assisted 
     State programs; and
       ``(ii) the subsequent use of the information by persons 
     described in clause (i) only for such administration or 
     enforcement;''; and
       (4) in subparagraph (F) (as so redesignated) by inserting 
     ``or subsection (u)'' before the semicolon at the end.

     SEC. 4121. PRESERVATION OF ACCESS AND PAYMENT ACCURACY.

       Section 16 of the Food and Nutrition Act of 2008 (7 U.S.C. 
     2025) is amended by striking subsection (g) and inserting the 
     following:
       ``(g) Cost Sharing for Computerization.--
       ``(1) In general.--Except as provided in paragraphs (2) and 
     (3), the Secretary is authorized to pay to each State agency 
     the amount provided under subsection (a)(6) for the costs 
     incurred by the State agency in the planning, design, 
     development, or installation of 1 or more automatic data 
     processing and information retrieval systems that the 
     Secretary determines--
       ``(A) would assist in meeting the requirements of this Act;
       ``(B) meet such conditions as the Secretary prescribes;
       ``(C) are likely to provide more efficient and effective 
     administration of the supplemental nutrition assistance 
     program;
       ``(D) would be compatible with other systems used in the 
     administration of State programs, including the program 
     funded under part A of title IV of the Social Security Act 
     (42 U.S.C. 601 et seq.);
       ``(E) would be tested adequately before and after 
     implementation, including through pilot projects in limited 
     areas for major systems changes as determined under rules 
     promulgated by the Secretary, data from which shall be 
     thoroughly evaluated before the Secretary approves the system 
     to be implemented more broadly; and
       ``(F) would be operated in accordance with an adequate plan 
     for--
       ``(i) continuous updating to reflect changed policy and 
     circumstances; and
       ``(ii) testing the effect of the system on access for 
     eligible households and on payment accuracy.
       ``(2) Limitation.--The Secretary shall not make payments to 
     a State agency under paragraph (1) to the extent that the 
     State agency--

[[Page H3468]]

       ``(A) is reimbursed for the costs under any other Federal 
     program; or
       ``(B) uses the systems for purposes not connected with the 
     supplemental nutrition assistance program.''.

     SEC. 4122. FUNDING OF EMPLOYMENT AND TRAINING PROGRAMS.

       Section 16(h)(1)(A) of the Food and Nutrition Act of 2008 
     (7 U.S.C. 2025(h)(1)(A)) is amended in subparagraph (A), by 
     striking ``to remain available until expended'' and inserting 
     ``to remain available for 15 months''.

                       PART IV--PROGRAM INTEGRITY

     SEC. 4131. ELIGIBILITY DISQUALIFICATION.

       Section 6 of the Food and Nutrition Act of 2008 (7 U.S.C. 
     2015) is amended by adding at the end the following:
       ``(p) Disqualification for Obtaining Cash by Destroying 
     Food and Collecting Deposits.--Subject to any requirements 
     established by the Secretary, any person who has been found 
     by a State or Federal court or administrative agency in a 
     hearing under subsection (b) to have intentionally obtained 
     cash by purchasing products with supplemental nutrition 
     assistance program benefits that have containers that require 
     return deposits, discarding the product, and returning the 
     container for the deposit amount shall be ineligible for 
     benefits under this Act for such period of time as the 
     Secretary shall prescribe by regulation.
       ``(q) Disqualification for Sale of Food Purchased With 
     Supplemental Nutrition Assistance Program Benefits.--Subject 
     to any requirements established by the Secretary, any person 
     who has been found by a State or Federal court or 
     administrative agency in a hearing under subsection (b) to 
     have intentionally sold any food that was purchased using 
     supplemental nutrition assistance program benefits shall be 
     ineligible for benefits under this Act for such period of 
     time as the Secretary shall prescribe by regulation.''.

     SEC. 4132. CIVIL PENALTIES AND DISQUALIFICATION OF RETAIL 
                   FOOD STORES AND WHOLESALE FOOD CONCERNS.

       Section 12 of the Food and Nutrition Act of 2008 (7 U.S.C. 
     2021) is amended--
       (1) by striking the section designation and heading and all 
     that follows through the end of subsection (a) and inserting 
     the following:

     ``SEC. 12. CIVIL PENALTIES AND DISQUALIFICATION OF RETAIL 
                   FOOD STORES AND WHOLESALE FOOD CONCERNS.

       ``(a) Disqualification.--
       ``(1) In general.--An approved retail food store or 
     wholesale food concern that violates a provision of this Act 
     or a regulation under this Act may be--
       ``(A) disqualified for a specified period of time from 
     further participation in the supplemental nutrition 
     assistance program;
       ``(B) assessed a civil penalty of up to $100,000 for each 
     violation; or
       ``(C) both.
       ``(2) Regulations.--Regulations promulgated under this Act 
     shall provide criteria for the finding of a violation of, the 
     suspension or disqualification of and the assessment of a 
     civil penalty against a retail food store or wholesale food 
     concern on the basis of evidence that may include facts 
     established through on-site investigations, inconsistent 
     redemption data, or evidence obtained through a transaction 
     report under an electronic benefit transfer system.'';
       (2) in subsection (b)--
       (A) by striking ``(b) Disqualification'' and inserting the 
     following:
       ``(b) Period of Disqualification.--Subject to subsection 
     (c), a disqualification'';
       (B) in paragraph (1), by striking ``of no less than six 
     months nor more than five years'' and inserting ``not to 
     exceed 5 years'';
       (C) in paragraph (2), by striking ``of no less than twelve 
     months nor more than ten years'' and inserting ``not to 
     exceed 10 years'';
       (D) in paragraph (3)(B)--
       (i) by inserting ``or a finding of the unauthorized 
     redemption, use, transfer, acquisition, alteration, or 
     possession of EBT cards'' after ``concern'' the first place 
     it appears; and
       (ii) by striking ``civil money penalties'' and inserting 
     ``civil penalties''; and
       (E) by striking ``civil money penalty'' each place it 
     appears and inserting ``civil penalty'';
       (3) in subsection (c)--
       (A) by striking ``(c) The action'' and inserting the 
     following:
       ``(c) Civil Penalty and Review of Disqualification and 
     Penalty Determinations.--
       ``(1) Civil penalty.--In addition to a disqualification 
     under this section, the Secretary may assess a civil penalty 
     in an amount not to exceed $100,000 for each violation.
       ``(2) Review.--The action''; and
       (B) in paragraph (2) (as designated by subparagraph (A)), 
     by striking ``civil money penalty'' and inserting ``civil 
     penalty'';
       (4) in subsection (d)--
       (A) by striking ``(d)'' and all that follows through ``. 
     The Secretary shall'' and inserting the following:
       ``(d) Conditions of Authorization.--
       ``(1) In general.--As a condition of authorization to 
     accept and redeem benefits, the Secretary may require a 
     retail food store or wholesale food concern that, pursuant to 
     subsection (a), has been disqualified for more than 180 days, 
     or has been subjected to a civil penalty in lieu of a 
     disqualification period of more than 180 days, to furnish a 
     collateral bond or irrevocable letter of credit for a period 
     of not more than 5 years to cover the value of benefits that 
     the store or concern may in the future accept and redeem in 
     violation of this Act.
       ``(2) Collateral.--The Secretary also may require a retail 
     food store or wholesale food concern that has been sanctioned 
     for a violation and incurs a subsequent sanction regardless 
     of the length of the disqualification period to submit a 
     collateral bond or irrevocable letter of credit.
       ``(3) Bond requirements.--The Secretary shall'';
       (B) by striking ``If the Secretary finds'' and inserting 
     the following
       ``(4) Forfeiture.--If the Secretary finds''; and
       (C) by striking ``Such store or concern'' and inserting the 
     following:
       ``(5) Hearing.--A store or concern described in paragraph 
     (4)'';
       (5) in subsection (e), by striking ``civil money penalty'' 
     each place it appears and inserting ``civil penalty''; and
       (6) by adding at the end the following:
       ``(h) Flagrant Violations.--
       ``(1) In general.--The Secretary, in consultation with the 
     Inspector General of the Department of Agriculture, shall 
     establish procedures under which the processing of program 
     benefit redemptions for a retail food store or wholesale food 
     concern may be immediately suspended pending administrative 
     action to disqualify the retail food store or wholesale food 
     concern.
       ``(2) Requirements.--Under the procedures described in 
     paragraph (1), if the Secretary, in consultation with the 
     Inspector General, determines that a retail food store or 
     wholesale food concern is engaged in flagrant violations of 
     this Act (including regulations promulgated under this Act), 
     unsettled program benefits that have been redeemed by the 
     retail food store or wholesale food concern--
       ``(A) may be suspended; and
       ``(B)(i) if the program disqualification is upheld, may be 
     subject to forfeiture pursuant to section 15(g); or
       ``(ii) if the program disqualification is not upheld, shall 
     be released to the retail food store or wholesale food 
     concern.
       ``(3) No liability for interest.--The Secretary shall not 
     be liable for the value of any interest on funds suspended 
     under this subsection.''.

     SEC. 4133. MAJOR SYSTEMS FAILURES.

       Section 13(b) of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2022(b)) is amended by adding at the end the 
     following:
       ``(5) Overissuances caused by systemic state errors.--
       ``(A) In general.--If the Secretary determines that a State 
     agency overissued benefits to a substantial number of 
     households in a fiscal year as a result of a major systemic 
     error by the State agency, as defined by the Secretary, the 
     Secretary may prohibit the State agency from collecting these 
     overissuances from some or all households.
       ``(B) Procedures.--
       ``(i) Information reporting by states.--Every State agency 
     shall provide to the Secretary all information requested by 
     the Secretary concerning the issuance of benefits to 
     households by the State agency in the applicable fiscal year.
       ``(ii) Final determination.--After reviewing relevant 
     information provided by a State agency, the Secretary shall 
     make a final determination--

       ``(I) whether the State agency overissued benefits to a 
     substantial number of households as a result of a systemic 
     error in the applicable fiscal year; and
       ``(II) as to the amount of the overissuance in the 
     applicable fiscal year for which the State agency is liable.

       ``(iii) Establishing a claim.--Upon determining under 
     clause (ii) that a State agency has overissued benefits to 
     households due to a major systemic error determined under 
     subparagraph (A), the Secretary shall establish a claim 
     against the State agency equal to the value of the 
     overissuance caused by the systemic error.
       ``(iv) Administrative and judicial review.--Administrative 
     and judicial review, as provided in section 14, shall apply 
     to the final determinations by the Secretary under clause 
     (ii).
       ``(v) Remission to the secretary.--

       ``(I) Determination not appealed.--If the determination of 
     the Secretary under clause (ii) is not appealed, the State 
     agency shall, as soon as practicable, remit to the Secretary 
     the dollar amount specified in the claim under clause (iii).
       ``(II) Determination appealed.--If the determination of the 
     Secretary under clause (ii) is appealed, upon completion of 
     administrative and judicial review under clause (iv), and a 
     finding of liability on the part of the State, the appealing 
     State agency shall, as soon as practicable, remit to the 
     Secretary a dollar amount subject to the finding made in the 
     administrative and judicial review.

       ``(vi) Alternative method of collection.--

       ``(I) In general.--If a State agency fails to make a 
     payment under clause (v) within a reasonable period of time, 
     as determined by the Secretary, the Secretary may reduce any 
     amount due to the State agency under any other provision of 
     this Act by the amount due.
       ``(II) Accrual of interest.--During the period of time 
     determined by the Secretary to be reasonable under subclause 
     (I), interest in the amount owed shall not accrue.

       ``(vii) Limitation.--Any liability amount established under 
     section 16(c)(1)(C) shall be reduced by the amount of the 
     claim established under this subparagraph.''.

                         PART V--MISCELLANEOUS

     SEC. 4141. PILOT PROJECTS TO EVALUATE HEALTH AND NUTRITION 
                   PROMOTION IN THE SUPPLEMENTAL NUTRITION 
                   ASSISTANCE PROGRAM.

       Section 17 of the Food and Nutrition Act of 2008 (7 U.S.C. 
     2026) is amended by adding at the end the following:
       ``(k) Pilot Projects to Evaluate Health and Nutrition 
     Promotion in the Supplemental Nutrition Assistance Program.--
       ``(1) In general.--The Secretary shall carry out, under 
     such terms and conditions as the Secretary considers to be 
     appropriate, pilot projects to develop and test methods--

[[Page H3469]]

       ``(A) of using the supplemental nutrition assistance 
     program to improve the dietary and health status of 
     households eligible for or participating in the supplemental 
     nutrition assistance program; and
       ``(B) to reduce overweight, obesity (including childhood 
     obesity), and associated co-morbidities in the United States.
       ``(2) Grants.--
       ``(A) In general.--In carrying out this subsection, the 
     Secretary may enter into competitively awarded contracts or 
     cooperative agreements with, or provide grants to, public or 
     private organizations or agencies (as defined by the 
     Secretary), for use in accordance with projects that meet the 
     strategy goals of this subsection.
       ``(B) Application.--To be eligible to receive a contract, 
     cooperative agreement, or grant under this paragraph, an 
     organization shall submit to the Secretary an application at 
     such time, in such manner, and containing such information as 
     the Secretary may require.
       ``(C) Selection criteria.--Pilot projects shall be 
     evaluated against publicly disseminated criteria that may 
     include--
       ``(i) identification of a low-income target audience that 
     corresponds to individuals living in households with incomes 
     at or below 185 percent of the poverty level;
       ``(ii) incorporation of a scientifically based strategy 
     that is designed to improve diet quality through more 
     healthful food purchases, preparation, or consumption;
       ``(iii) a commitment to a pilot project that allows for a 
     rigorous outcome evaluation, including data collection;
       ``(iv) strategies to improve the nutritional value of food 
     served during school hours and during after-school hours;
       ``(v) innovative ways to provide significant improvement to 
     the health and wellness of children;
       ``(vi) other criteria, as determined by the Secretary.
       ``(D) Use of funds.--Funds provided under this paragraph 
     shall not be used for any project that limits the use of 
     benefits under this Act.
       ``(3) Projects.--Pilot projects carried out under paragraph 
     (1) may include projects to determine whether healthier food 
     purchases by and healthier diets among households 
     participating in the supplemental nutrition assistance 
     program result from projects that--
       ``(A) increase the supplemental nutrition assistance 
     purchasing power of the participating households by providing 
     increased supplemental nutrition assistance program benefit 
     allotments to the participating households;
       ``(B) increase access to farmers markets by participating 
     households through the electronic redemption of supplemental 
     nutrition assistance program benefits at farmers' markets;
       ``(C) provide incentives to authorized supplemental 
     nutrition assistance program retailers to increase the 
     availability of healthy foods to participating households;
       ``(D) subject authorized supplemental nutrition assistance 
     program retailers to stricter retailer requirements with 
     respect to carrying and stocking healthful foods;
       ``(E) provide incentives at the point of purchase to 
     encourage households participating in the supplemental 
     nutrition assistance program to purchase fruits, vegetables, 
     or other healthful foods; or
       ``(F) provide to participating households integrated 
     communication and education programs, including the provision 
     of funding for a portion of a school-based nutrition 
     coordinator to implement a broad nutrition action plan and 
     parent nutrition education programs in elementary schools, 
     separately or in combination with pilot projects carried out 
     under subparagraphs (A) through (E).
       ``(4) Evaluation and reporting.--
       ``(A) Evaluation.--
       ``(i) Independent evaluation.--

       ``(I) In general.--The Secretary shall provide for an 
     independent evaluation of projects selected under this 
     subsection that measures the impact of the pilot program on 
     health and nutrition as described in paragraph (1).
       ``(II) Requirement.--The independent evaluation under 
     subclause (I) shall use rigorous methodologies, particularly 
     random assignment or other methods that are capable of 
     producing scientifically valid information regarding which 
     activities are effective.

       ``(ii) Costs.--The Secretary may use funds provided to 
     carry out this section to pay costs associated with 
     monitoring and evaluating each pilot project.
       ``(B) Reporting.--Not later than 90 days after the last day 
     of fiscal year 2009 and each fiscal year thereafter until the 
     completion of the last evaluation under subparagraph (A), the 
     Secretary shall submit to the Committee on Agriculture of the 
     House of Representatives and the Committee on Agriculture, 
     Nutrition, and Forestry of the Senate a report that includes 
     a description of--
       ``(i) the status of each pilot project;
       ``(ii) the results of the evaluation completed during the 
     previous fiscal year; and
       ``(iii) to the maximum extent practicable--

       ``(I) the impact of the pilot project on appropriate 
     health, nutrition, and associated behavioral outcomes among 
     households participating in the pilot project;
       ``(II) baseline information relevant to the stated goals 
     and desired outcomes of the pilot project; and
       ``(III) equivalent information about similar or identical 
     measures among control or comparison groups that did not 
     participate in the pilot project.

       ``(C) Public dissemination.--In addition to the reporting 
     requirements under subparagraph (B), evaluation results shall 
     be shared broadly to inform policy makers, service providers, 
     other partners, and the public in order to promote wide use 
     of successful strategies.
       ``(5) Funding.--
       ``(A) Authorization of appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     carry out this section for each of fiscal years 2008 through 
     2012.
       ``(B) Mandatory funding.--Out of any funds made available 
     under section 18, on October 1, 2008, the Secretary shall 
     make available $20,000,000 to carry out a project described 
     in paragraph (3)(E), to remain available until expended.''.

     SEC. 4142. STUDY ON COMPARABLE ACCESS TO SUPPLEMENTAL 
                   NUTRITION ASSISTANCE FOR PUERTO RICO.

       (a) In General.--The Secretary shall carry out a study of 
     the feasibility and effects of including the Commonwealth of 
     Puerto Rico in the definition of the term ``State'' under 
     section 3 of the Food and Nutrition Act of 2008 (7 U.S.C. 
     2012), in lieu of providing block grants under section 19 of 
     that Act (7 U.S.C. 2028).
       (b) Inclusions.--The study shall include--
       (1) an assessment of the administrative, financial 
     management, and other changes that would be necessary for the 
     Commonwealth to establish a comparable supplemental nutrition 
     assistance program, including compliance with appropriate 
     program rules under the Food and Nutrition Act of 2008 (7 
     U.S.C. 2011 et seq.), such as--
       (A) benefit levels under section 3(u) of that Act (7 U.S.C. 
     2012(u));
       (B) income eligibility standards under sections 5(c) and 6 
     of that Act (7 U.S.C. 2014(c), 2015); and
       (C) deduction levels under section 5(e) of that Act (7 
     U.S.C. 2014(e));
       (2) an estimate of the impact on Federal and Commonwealth 
     benefit and administrative costs;
       (3) an assessment of the impact of the program on low-
     income Puerto Ricans, as compared to the program under 
     section 19 of that Act (7 U.S.C. 2028); and
       (4) such other matters as the Secretary considers to be 
     appropriate.
       (c) Report.--Not later than 2 years after the date of 
     enactment of this Act, the Secretary shall submit to the 
     Committee on Agriculture of the House of Representatives and 
     the Committee on Agriculture, Nutrition, and Forestry of the 
     Senate a report that describes the results of the study 
     conducted under this section.
       (d) Funding.--
       (1) In general.--On October 1, 2008, out of any funds in 
     the Treasury not otherwise appropriated, the Secretary of the 
     Treasury shall transfer to the Secretary to carry out this 
     section $1,000,000, to remain available until expended.
       (2) Receipt and acceptance.--The Secretary shall be 
     entitled to receive, shall accept, and shall use to carry out 
     this section the funds transferred under paragraph (1), 
     without further appropriation.

                 Subtitle B--Food Distribution Programs

               PART I--EMERGENCY FOOD ASSISTANCE PROGRAM

     SEC. 4201. EMERGENCY FOOD ASSISTANCE.

       (a) Purchase of Commodities.--Section 27(a) of the Food and 
     Nutrition Act of 2008 (7 U.S.C. 2036(a)) is amended by -
       (1) by striking ``(a) Purchase of Commodities'' and all 
     that follows through ``$140,000,000 of'' and inserting the 
     following:
       ``(a) Purchase of Commodities.--
       ``(1) In general.--From amounts made available to carry out 
     this Act, for each of the fiscal years 2008 through 2012, the 
     Secretary shall purchase a dollar amount described in 
     paragraph (2) of''; and
       (2) by adding at the end the following:
       ``(2) Amounts.--The Secretary shall use to carry out 
     paragraph (1)--
       ``(A) for fiscal year 2008, $190,000,000;
       ``(B) for fiscal year 2009, $250,000,000; and
       ``(C) for each of fiscal years 2010 through 2012, the 
     dollar amount of commodities specified in subparagraph (B) 
     adjusted by the percentage by which the thrifty food plan has 
     been adjusted under section 3(u)(4) between June 30, 2008, 
     and June 30 of the immediately preceding fiscal year.''.
       (b) State Plans.--Section 202A of the Emergency Food 
     Assistance Act of 1983 (7 U.S.C. 7503) is amended by striking 
     subsection (a) and inserting the following:
       ``(a) Plans.--
       ``(1) In general.--To receive commodities under this Act, a 
     State shall submit to the Secretary an operation and 
     administration plan for the provision of benefits under this 
     Act.
       ``(2) Updates.--A State shall submit to the Secretary for 
     approval any amendment to a plan submitted under paragraph 
     (1) in any case in which the State proposes to make a change 
     to the operation or administration of a program described in 
     the plan.''.
       (c) Authorization and Appropriations.--Section 204(a)(1) of 
     the Emergency Food Assistance Act of 1983 (7 U.S.C. 
     7508(a)(1)) is amended in the first sentence--
       (1) by striking ``$60,000,000'' and inserting 
     ``$100,000,000''; and
       (2) by inserting ``and donated wild game'' before the 
     period at the end.

     SEC. 4202. EMERGENCY FOOD PROGRAM INFRASTRUCTURE GRANTS.

       The Emergency Food Assistance Act of 1983 is amended by 
     inserting after section 208 (7 U.S.C. 7511) the following:

     ``SEC. 209. EMERGENCY FOOD PROGRAM INFRASTRUCTURE GRANTS.

       ``(a) Definition of Eligible Entity.--In this section, the 
     term `eligible entity' means an emergency feeding 
     organization.
       ``(b) Program Authorized.--
       ``(1) In general.--The Secretary shall use funds made 
     available under subsection (d) to make grants to eligible 
     entities to pay the costs of an activity described in 
     subsection (c).
       ``(2) Rural preference.--The Secretary shall use not less 
     than 50 percent of the funds described in paragraph (1) for a 
     fiscal year to

[[Page H3470]]

     make grants to eligible entities that serve predominantly 
     rural communities for the purposes of--
       ``(A) expanding the capacity and infrastructure of food 
     banks, State-wide food bank associations, and food bank 
     collaboratives that operate in rural areas; and
       ``(B) improving the capacity of the food banks to procure, 
     receive, store, distribute, track, and deliver time-sensitive 
     or perishable food products.
       ``(c) Use of Funds.--An eligible entity shall use a grant 
     received under this section for any fiscal year to carry out 
     activities of the eligible entity, including--
       ``(1) the development and maintenance of a computerized 
     system for the tracking of time-sensitive food products;
       ``(2) capital, infrastructure, and operating costs 
     associated with the collection, storage, distribution, and 
     transportation of time-sensitive and perishable food 
     products;
       ``(3) improving the security and diversity of the emergency 
     food distribution and recovery systems of the United States 
     through the support of small or mid-size farms and ranches, 
     fisheries, and aquaculture, and donations from local food 
     producers and manufacturers to persons in need;
       ``(4) providing recovered foods to food banks and similar 
     nonprofit emergency food providers to reduce hunger in the 
     United States;
       ``(5) improving the identification of--
       ``(A) potential providers of donated foods;
       ``(B) potential nonprofit emergency food providers; and
       ``(C) persons in need of emergency food assistance in rural 
     areas; and
       ``(6) constructing, expanding, or repairing a facility or 
     equipment to support hunger relief agencies in the community.
       ``(d) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $15,000,000 for 
     each of fiscal years 2008 through 2012.''.

       PART II--FOOD DISTRIBUTION PROGRAM ON INDIAN RESERVATIONS

     SEC. 4211. ASSESSING THE NUTRITIONAL VALUE OF THE FDPIR FOOD 
                   PACKAGE.

       (a) In General.--Section 4 of the Food and Nutrition Act of 
     2008 (7 U.S.C. 2013) is amended by striking subsection (b) 
     and inserting the following:
       ``(b) Food Distribution Program on Indian Reservations.--
       ``(1) In general.--Distribution of commodities, with or 
     without the supplemental nutrition assistance program, shall 
     be made whenever a request for concurrent or separate food 
     program operations, respectively, is made by a tribal 
     organization.
       ``(2) Administration.--
       ``(A) In general.--Subject to subparagraphs (B) and (C), in 
     the event of distribution on all or part of an Indian 
     reservation, the appropriate agency of the State government 
     in the area involved shall be responsible for the 
     distribution.
       ``(B) Administration by tribal organization.--If the 
     Secretary determines that a tribal organization is capable of 
     effectively and efficiently administering a distribution 
     described in paragraph (1), then the tribal organization 
     shall administer the distribution.
       ``(C) Prohibition.--The Secretary shall not approve any 
     plan for a distribution described in paragraph (1) that 
     permits any household on any Indian reservation to 
     participate simultaneously in the supplemental nutrition 
     assistance program and the program established under this 
     subsection.
       ``(3) Disqualified participants.--An individual who is 
     disqualified from participation in the food distribution 
     program on Indian reservations under this subsection is not 
     eligible to participate in the supplemental nutrition 
     assistance program under this Act for a period of time to be 
     determined by the Secretary.
       ``(4) Administrative costs.--The Secretary is authorized to 
     pay such amounts for administrative costs and distribution 
     costs on Indian reservations as the Secretary finds necessary 
     for effective administration of such distribution by a State 
     agency or tribal organization.
       ``(5) Bison meat.--Subject to the availability of 
     appropriations to carry out this paragraph, the Secretary may 
     purchase bison meat for recipients of food distributed under 
     this subsection, including bison meat from--
       ``(A) Native American bison producers; and
       ``(B) producer-owned cooperatives of bison ranchers.
       ``(6) Traditional and locally-grown food fund.--
       ``(A) In general.--Subject to the availability of 
     appropriations, the Secretary shall establish a fund for use 
     in purchasing traditional and locally-grown foods for 
     recipients of food distributed under this subsection.
       ``(B) Native american producers.--Where practicable, of the 
     food provided under subparagraph (A), at least 50 percent 
     shall be produced by Native American farmers, ranchers, and 
     producers.
       ``(C) Definition of traditional and locally grown.--The 
     Secretary shall determine the definition of the term 
     `traditional and locally-grown' with respect to food 
     distributed under this paragraph.
       ``(D) Survey.--In carrying out this paragraph, the 
     Secretary shall--
       ``(i) survey participants of the food distribution program 
     on Indian reservations established under this subsection to 
     determine which traditional foods are most desired by those 
     participants; and
       ``(ii) purchase or offer to purchase those traditional 
     foods that may be procured cost-effectively.
       ``(E) Report.--Not later than 1 year after the date of 
     enactment of this paragraph, and annually thereafter, the 
     Secretary shall submit to the Committee on Agriculture of the 
     House of Representatives and the Committee on Agriculture, 
     Nutrition, and Forestry of the Senate a report describing the 
     activities carried out under this paragraph during the 
     preceding calendar year.
       ``(F) Authorization of appropriations.--There is authorized 
     to be appropriated to the Secretary to carry out this 
     paragraph $5,000,000 for each of fiscal years 2008 through 
     2012.''.
       (b) FDPIR Food Package.--Not later than 180 days after the 
     date of enactment of this Act, the Secretary shall submit to 
     the Committee on Agriculture of the House of Representatives 
     and the Committee on Agriculture, Nutrition, and Forestry of 
     the Senate a report that describes--
       (1) how the Secretary derives the process for determining 
     the food package under the food distribution program on 
     Indian reservations established under section 4(b) of the 
     Food and Nutrition Act of 2008 (7 U.S.C. 2013(b)) (referred 
     to in this subsection as the ``food package'');
       (2) the extent to which the food package--
       (A) addresses the nutritional needs of low-income Native 
     Americans compared to the supplemental nutrition assistance 
     program, particularly for very low-income households;
       (B) conforms (or fails to conform) to the 2005 Dietary 
     Guidelines for Americans published under section 301 of the 
     National Nutrition Monitoring and Related Research Act of 
     1990 (7 U.S.C. 5341);
       (C) addresses (or fails to address) the nutritional and 
     health challenges that are specific to Native Americans; and
       (D) is limited by distribution costs or challenges in 
     infrastructure; and
       (3)(A) any plans of the Secretary to revise and update the 
     food package to conform with the most recent Dietary 
     Guidelines for Americans, including any costs associated with 
     the planned changes; or
       (B) if the Secretary does not plan changes to the food 
     package, the rationale of the Secretary for retaining the 
     food package.

             PART III--COMMODITY SUPPLEMENTAL FOOD PROGRAM

     SEC. 4221. COMMODITY SUPPLEMENTAL FOOD PROGRAM.

       Section 5 of the Agriculture and Consumer Protection Act of 
     1973 (7 U.S.C. 612c note; Public Law 93-86) is amended by 
     striking subsection (g) and inserting the following:
       ``(g) Prohibition.--Notwithstanding any other provision of 
     law (including regulations), the Secretary may not require a 
     State or local agency to prioritize assistance to a 
     particular group of individuals that are--
       ``(1) low-income persons aged 60 and older; or
       ``(2) women, infants, and children.''.

           PART IV--SENIOR FARMERS' MARKET NUTRITION PROGRAM

     SEC. 4231. SENIORS FARMERS' MARKET NUTRITION PROGRAM.

       Section 4402 of the Farm Security and Rural Investment Act 
     of 2002 (7 U.S.C. 3007) is amended--
       (1) in subsection (b)(1), by inserting ``honey,'' after 
     ``vegetables,'';
       (2) by striking subsection (c) and inserting the following:
       ``(c) Exclusion of Benefits in Determining Eligibility for 
     Other Programs.--The value of any benefit provided to any 
     eligible seniors farmers' market nutrition program recipient 
     under this section shall not be considered to be income or 
     resources for any purposes under any Federal, State, or local 
     law.''; and
       (3) by adding at the end the following:
       ``(d) Prohibition on Collection of Sales Tax.--Each State 
     shall ensure that no State or local tax is collected within 
     the State on a purchase of food with a benefit distributed 
     under the seniors farmers' market nutrition program.
       ``(e) Regulations.--The Secretary may promulgate such 
     regulations as the Secretary considers to be necessary to 
     carry out the seniors farmers' market nutrition program.''.

            Subtitle C--Child Nutrition and Related Programs

     SEC. 4301. STATE PERFORMANCE ON ENROLLING CHILDREN RECEIVING 
                   PROGRAM BENEFITS FOR FREE SCHOOL MEALS.

       (a) In General.--Not later than December 31, 2008 and June 
     30 of each year thereafter, the Secretary shall submit to the 
     Committees on Agriculture and Education and Labor of the 
     House of Representatives and the Committee on Agriculture, 
     Nutrition, and Forestry of the Senate a report that assesses 
     the effectiveness of each State in enrolling school-aged 
     children in households receiving program benefits under the 
     Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.) 
     (referred to in this section as ``program benefits'') for 
     free school meals using direct certification.
       (b) Specific Measures.--The assessment of the Secretary of 
     the performance of each State shall include--
       (1) an estimate of the number of school-aged children, by 
     State, who were members of a household receiving program 
     benefits at any time in July, August, or September of the 
     prior year;
       (2) an estimate of the number of school-aged children, by 
     State, who were directly certified as eligible for free 
     lunches under the Richard B. Russell National School Lunch 
     Act (42 U.S.C. 1751 et seq.), based on receipt of program 
     benefits, as of October 1 of the prior year; and
       (3) an estimate of the number of school-aged children, by 
     State, who were members of a household receiving program 
     benefits at any time in July, August, or September of the 
     prior year who were not candidates for direct certification 
     because on October 1 of the prior year the children attended 
     a school operating under the special assistance provisions of 
     section 11(a)(1) of the Richard B. Russell National School 
     Lunch Act (42 U.S.C. 1759a(a)(1)) that is not operating in a 
     base year.

[[Page H3471]]

       (c) Performance Innovations.--The report of the Secretary 
     shall describe best practices from States with the best 
     performance or the most improved performance from the 
     previous year.

     SEC. 4302. PURCHASES OF LOCALLY PRODUCED FOODS.

       Section 9(j) of the Richard B. Russell National School 
     Lunch Act (42 U.S.C. 1758(j)) is amended to read as follows:
       ``(j) Purchases of Locally Produced Foods.--The Secretary 
     shall--
       ``(1) encourage institutions receiving funds under this Act 
     and the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.) 
     to purchase unprocessed agricultural products, both locally 
     grown and locally raised, to the maximum extent practicable 
     and appropriate;
       ``(2) advise institutions participating in a program 
     described in paragraph (1) of the policy described in that 
     paragraph and paragraph (3) and post information concerning 
     the policy on the website maintained by the Secretary; and
       ``(3) allow institutions receiving funds under this Act and 
     the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.), 
     including the Department of Defense Fresh Fruit and Vegetable 
     Program, to use a geographic preference for the procurement 
     of unprocessed agricultural products, both locally grown and 
     locally raised.''.

     SEC. 4303. HEALTHY FOOD EDUCATION AND PROGRAM REPLICABILITY.

       Section 18(h) of the Richard B. Russell National School 
     Lunch Act (42 U.S.C. 1769(h)) is amended--
       (1) in paragraph (1)(C), by inserting ``promotes healthy 
     food education in the school curriculum and'' before 
     ``incorporates'';
       (2) by redesignating paragraph (2) as paragraph (4); and
       (3) by inserting after paragraph (1) the following:
       ``(2) Administration.--In providing grants under paragraph 
     (1), the Secretary shall give priority to projects that can 
     be replicated in schools.
       ``(3) Pilot program for high-poverty schools.--
       ``(A) Definitions.--In this paragraph:
       ``(i) Eligible program.--The term `eligible program' 
     means--

       ``(I) a school-based program with hands-on vegetable 
     gardening and nutrition education that is incorporated into 
     the curriculum for 1 or more grades at 2 or more eligible 
     schools; or
       ``(II) a community-based summer program with hands-on 
     vegetable gardening and nutrition education that is part of, 
     or coordinated with, a summer enrichment program at 2 or more 
     eligible schools.

       ``(ii) Eligible school.--The term `eligible school' means a 
     public school, at least 50 percent of the students of which 
     are eligible for free or reduced price meals under this Act.
       ``(B) Establishment.--The Secretary shall carry out a pilot 
     program under which the Secretary shall provide to nonprofit 
     organizations or public entities in not more than 5 States 
     grants to develop and run, through eligible programs, 
     community gardens at eligible schools in the States that 
     would--
       ``(i) be planted, cared for, and harvested by students at 
     the eligible schools; and
       ``(ii) teach the students participating in the community 
     gardens about agriculture production practices and diet.
       ``(C) Priority states.--Of the States in which grantees 
     under this paragraph are located--
       ``(i) at least 1 State shall be among the 15 largest 
     States, as determined by the Secretary;
       ``(ii) at least 1 State shall be among the 16th to 30th 
     largest States, as determined by the Secretary; and
       ``(iii) at least 1 State shall be a State that is not 
     described in clause (i) or (ii).
       ``(D) Use of produce.--Produce from a community garden 
     provided a grant under this paragraph may be--
       ``(i) used to supplement food provided at the eligible 
     school;
       ``(ii) distributed to students to bring home to the 
     families of the students; or
       ``(iii) donated to a local food bank or senior center 
     nutrition program.
       ``(E) No cost-sharing requirement.--A nonprofit 
     organization or public entity that receives a grant under 
     this paragraph shall not be required to share the cost of 
     carrying out the activities assisted under this paragraph.
       ``(F) Evaluation.--A nonprofit organization or public 
     entity that receives a grant under this paragraph shall be 
     required to cooperate in an evaluation in accordance with 
     paragraph (1)(H).''.

     SEC. 4304. FRESH FRUIT AND VEGETABLE PROGRAM.

       (a) Program.--
       (1) In general.--The Richard B. Russell National School 
     Lunch Act is amended by inserting after section 18 (42 U.S.C. 
     1769) the following:

     ``SEC. 19. FRESH FRUIT AND VEGETABLE PROGRAM.

       ``(a) In General.--For the school year beginning July 2008 
     and each subsequent school year, the Secretary shall provide 
     grants to States to carry out a program to make free fresh 
     fruits and vegetables available in elementary schools 
     (referred to in this section as the `program').
       ``(b) Program.--A school participating in the program shall 
     make free fresh fruits and vegetables available to students 
     throughout the school day (or at such other times as are 
     considered appropriate by the Secretary) in 1 or more areas 
     designated by the school.
       ``(c) Funding to States.--
       ``(1) Minimum grant.--Except as provided in subsection 
     (i)(2), the Secretary shall provide to each of the 50 States 
     and the District of Columbia an annual grant in an amount 
     equal to 1 percent of the funds made available for a year to 
     carry out the program.
       ``(2) Additional funding.--Of the funds remaining after 
     grants are made under paragraph (1), the Secretary shall 
     allocate additional funds to each State that is operating a 
     school lunch program under section 4 based on the proportion 
     that--
       ``(A) the population of the State; bears to
       ``(B) the population of the United States.
       ``(d) Selection of Schools.--
       ``(1) In general.--Except as provided in paragraph (2) of 
     this subsection and section 4304(a)(2) of the Food, 
     Conservation, and Energy Act of 2008, each year, in selecting 
     schools to participate in the program, each State shall--
       ``(A) ensure that each school chosen to participate in the 
     program is a school--
       ``(i) in which not less than 50 percent of the students are 
     eligible for free or reduced price meals under this Act; and
       ``(ii) that submits an application in accordance with 
     subparagraph (D);
       ``(B) to the maximum extent practicable, give the highest 
     priority to schools with the highest proportion of children 
     who are eligible for free or reduced price meals under this 
     Act;
       ``(C) ensure that each school selected is an elementary 
     school (as defined in section 9101 of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 7801));
       ``(D) solicit applications from interested schools that 
     include--
       ``(i) information pertaining to the percentage of students 
     enrolled in the school submitting the application who are 
     eligible for free or reduced price school lunches under this 
     Act;
       ``(ii) a certification of support for participation in the 
     program signed by the school food manager, the school 
     principal, and the district superintendent (or equivalent 
     positions, as determined by the school);
       ``(iii) a plan for implementation of the program, including 
     efforts to integrate activities carried out under this 
     section with other efforts to promote sound health and 
     nutrition, reduce overweight and obesity, or promote physical 
     activity; and
       ``(iv) such other information as may be requested by the 
     Secretary; and
       ``(E) encourage applicants to submit a plan for 
     implementation of the program that includes a partnership 
     with 1 or more entities that will provide non-Federal 
     resources (including entities representing the fruit and 
     vegetable industry).
       ``(2) Exception.--Clause (i) of paragraph (1)(A) shall not 
     apply to a State if all schools that meet the requirements of 
     that clause have been selected and the State does not have a 
     sufficient number of additional schools that meet the 
     requirement of that clause.
       ``(3) Outreach to low-income schools.--
       ``(A) In general.--Prior to making decisions regarding 
     school participation in the program, a State agency shall 
     inform the schools within the State with the highest 
     proportion of free and reduced price meal eligibility, 
     including Native American schools, of the eligibility of the 
     schools for the program with respect to priority granted to 
     schools with the highest proportion of free and reduced price 
     eligibility under paragraph (1)(B).
       ``(B) Requirement.--In providing information to schools in 
     accordance with subparagraph (A), a State agency shall inform 
     the schools that would likely be chosen to participate in the 
     program under paragraph (1)(B).
       ``(e) Notice of Availability.--If selected to participate 
     in the program, a school shall widely publicize within the 
     school the availability of free fresh fruits and vegetables 
     under the program.
       ``(f) Per-Student Grant.--The per-student grant provided to 
     a school under this section shall be--
       ``(1) determined by a State agency; and
       ``(2) not less than $50, nor more than $75.
       ``(g) Limitation.--To the maximum extent practicable, each 
     State agency shall ensure that in making the fruits and 
     vegetables provided under this section available to students, 
     schools offer the fruits and vegetables separately from meals 
     otherwise provided at the school under this Act or the Child 
     Nutrition Act of 1966 (42 U.S.C. 1771 et seq.).
       ``(h) Evaluation and Reports.--
       ``(1) In general.--The Secretary shall conduct an 
     evaluation of the program, including a determination as to 
     whether children experienced, as a result of participating in 
     the program--
       ``(A) increased consumption of fruits and vegetables;
       ``(B) other dietary changes, such as decreased consumption 
     of less nutritious foods; and
       ``(C) such other outcomes as are considered appropriate by 
     the Secretary.
       ``(2) Report.--Not later than September 30, 2011, the 
     Secretary shall submit to the Committee on Education and 
     Labor of the House of Representatives and the Committee on 
     Agriculture, Nutrition, and Forestry of the Senate a report 
     that describes the results of the evaluation under paragraph 
     (1).
       ``(i) Funding.--
       ``(1) In general.--Out of the funds made available under 
     subsection (b)(2)(A) of section 14222 of the Food, 
     Conservation, and Energy Act of 2008, the Secretary shall use 
     the following amounts to carry out this section:
       ``(A) On October 1, 2008, $40,000,000.
       ``(B) On July 1, 2009, $65,000,000.
       ``(C) On July 1, 2010, $101,000,000.
       ``(D) On July 1, 2011, $150,000,000.
       ``(E) On July 1, 2012, and each July 1 thereafter, the 
     amount made available for the preceding fiscal year, as 
     adjusted to reflect changes for the 12-month period ending 
     the preceding April 30 in the Consumer Price Index for All 
     Urban Consumers published by the Bureau of Labor Statistics 
     of the Department of Labor, for items other than food.

[[Page H3472]]

       ``(2) Maintenance of existing funding.--In allocating 
     funding made available under paragraph (1) among the States 
     in accordance with subsection (c), the Secretary shall ensure 
     that each State that received funding under section 18(f) on 
     the day before the date of enactment of the Food, 
     Conservation, and Energy Act of 2008 shall continue to 
     receive sufficient funding under this section to maintain the 
     caseload level of the State under that section as in effect 
     on that date.
       ``(3) Evaluation funding.--On October 1, 2008, out of any 
     funds made available under subsection (b)(2)(A) of section 
     14222 of the Food, Conservation, and Energy Act of 2008, the 
     Secretary shall use to carry out the evaluation required 
     under subsection (h), $3,000,000, to remain available for 
     obligation until September 30, 2010.
       ``(4) Receipt and acceptance.--The Secretary shall be 
     entitled to receive, shall accept, and shall use to carry out 
     this section any funds transferred for that purpose, without 
     further appropriation.
       ``(5) Authorization of appropriations.--In addition to any 
     other amounts made available to carry out this section, there 
     are authorized to be appropriated such sums as are necessary 
     to expand the program established under this section.
       ``(6) Administrative costs.--
       ``(A) In general.--Of funds made available to carry out 
     this section for a fiscal year, the Secretary may use not 
     more than $500,000 for the administrative costs of carrying 
     out the program.
       ``(B) Reservation of funds.--The Secretary shall allow each 
     State to reserve such funding as the Secretary determines to 
     be necessary to administer the program in the State (with 
     adjustments for the size of the State and the grant amount), 
     but not to exceed the amount required to pay the costs of 1 
     full-time coordinator for the program in the State.
       ``(7) Reallocation.--
       ``(A) Among states.--The Secretary may reallocate any 
     amounts made available to carry out this section that are not 
     obligated or expended by a date determined by the Secretary.
       ``(B) Within states.--A State that receives a grant under 
     this section may reallocate any amounts made available under 
     the grant that are not obligated or expended by a date 
     determined by the Secretary.''.
       (2) Transition of existing schools.--
       (A) Existing secondary schools.--Section 19(d)(1)(C) of the 
     Richard B. Russell National School Lunch Act (as amended by 
     paragraph (1)) may be waived by a State until July 1, 2010, 
     for each secondary school in the State that has been awarded 
     funding under section 18(f) of that Act (42 U.S.C. 1769(f)) 
     for the school year beginning July 1, 2008.
       (B) School year beginning july 1, 2008.--To facilitate 
     transition from the program authorized under section 18(f) of 
     the Richard B. Russell National School Lunch Act (42 U.S.C. 
     1769(f)) (as in effect on the day before the date of 
     enactment of this Act) to the program established under 
     section 19 of that Act (as amended by paragraph (1))--
       (i) for the school year beginning July 1, 2008, the 
     Secretary may permit any school selected for participation 
     under section 18(f) of that Act (42 U.S.C. 1769(f)) for that 
     school year to continue to participate under section 19 of 
     that Act until the end of that school year; and
       (ii) funds made available under that Act for fiscal year 
     2009 may be used to support the participation of any schools 
     selected to participate in the program authorized under 
     section 18(f) of that Act (42 U.S.C. 1769(f)) (as in effect 
     on the day before the date of enactment of this Act).
       (b) Conforming Amendments.--Section 18 of the Richard B. 
     Russell National School Lunch Act (42 U.S.C. 1769) is 
     amended--
       (1) by striking subsection (f); and
       (2) by redesignating subsections (g) through (j) as 
     subsections (f) through (i), respectively.

     SEC. 4305. WHOLE GRAIN PRODUCTS.

       (a) Purpose.--The purpose of this section is to encourage 
     greater awareness and interest in the number and variety of 
     whole grain products available to schoolchildren, as 
     recommended by the 2005 Dietary Guidelines for Americans.
       (b) Definition of Eligible Whole Grains and Whole Grain 
     Products.--In this section, the terms ``whole grains'' and 
     ``whole grain products'' have the meaning given the terms by 
     the Food and Nutrition Service in the HealthierUS School 
     Challenge.
       (c) Purchase of Whole Grains and Whole Grain Products.--In 
     addition to the commodities delivered under section 6 of the 
     Richard B. Russell National School Lunch Act (42 U.S.C. 
     1755), the Secretary shall purchase whole grains and whole 
     grain products for use in--
       (1) the school lunch program established under the Richard 
     B. Russell National School Lunch Act (42 U.S.C. 1751 et 
     seq.); and
       (2) the school breakfast program established by section 4 
     of the Child Nutrition Act of 1966 (42 U.S.C. 1773).
       (d) Evaluation.--Not later than September 30, 2011, the 
     Secretary shall conduct an evaluation of the activities 
     conducted under subsection (c) that includes--
       (1) an evaluation of whether children participating in the 
     school lunch and breakfast programs increased their 
     consumption of whole grains;
       (2) an evaluation of which whole grains and whole grain 
     products are most acceptable for use in the school lunch and 
     breakfast programs;
       (3) any recommendations of the Secretary regarding the 
     integration of whole grain products in the school lunch and 
     breakfast programs; and
       (4) an evaluation of any other outcomes determined to be 
     appropriate by the Secretary.
       (e) Report.--As soon as practicable after the completion of 
     the evaluation under subsection (d), the Secretary shall 
     submit to the Committee on Agriculture, Nutrition, and 
     Forestry of the Senate and the Committee on Education and 
     Labor of the House of Representative a report describing the 
     results of the evaluation.

     SEC. 4306. BUY AMERICAN REQUIREMENTS.

       (a) Findings.--The Congress finds the following:
       (1) Federal law requires that commodities and products 
     purchased with Federal funds be, to the extent practicable, 
     of domestic origin.
       (2) Federal Buy American statutory requirements seek to 
     ensure that purchases made with Federal funds benefit 
     domestic producers.
       (3) The Richard B. Russell National School Lunch Act (42 
     U.S.C. 1751 et seq.) requires the use of domestic food 
     products for all meals served under the program, including 
     food products purchased with local funds.
       (b) Buy American Statutory Requirements.--The Department of 
     Agriculture should undertake training, guidance, and 
     enforcement of the various current Buy American statutory 
     requirements and regulations, including those of the Richard 
     B. Russell National School Lunch Act (42 U.S.C. 1751 et 
     seq.).

     SEC. 4307. SURVEY OF FOODS PURCHASED BY SCHOOL FOOD 
                   AUTHORITIES.

       (a) In General.--For fiscal year 2009, the Secretary shall 
     carry out a nationally representative survey of the foods 
     purchased during the most recent school year for which data 
     is available by school authorities participating in the 
     school lunch program established under the Richard B. Russell 
     National School Lunch Act (42 U.S.C. 1751 et seq.).
       (b) Report.--
       (1) In general.--On completion of the survey, the Secretary 
     shall submit to the Committees on Agriculture and Education 
     and Labor of the House of Representatives and the Committee 
     on Agriculture, Nutrition, and Forestry of the Senate a 
     report that describes the results of the survey.
       (2) Interim requirement.--If the initial report required 
     under paragraph (1) is not submitted to the Committees 
     referred to in that paragraph by June 30, 2009, the Secretary 
     shall submit to the Committees an interim report that 
     describes the relevant survey data, or a sample of such data, 
     available to the Secretary as of that date.
       (c) Funding.--Of the funds of the Commodity Credit 
     Corporation, the Secretary shall use to carry out this 
     section not more than $3,000,000.

                       Subtitle D--Miscellaneous

     SEC. 4401. BILL EMERSON NATIONAL HUNGER FELLOWS AND MICKEY 
                   LELAND INTERNATIONAL HUNGER FELLOWS.

       Section 4404 of the Farm Security and Rural Investment Act 
     of 2002 (2 U.S.C. 1161) is amended to read as follows:

     ``SEC. 4404. BILL EMERSON NATIONAL HUNGER FELLOWS AND MICKEY 
                   LELAND INTERNATIONAL HUNGER FELLOWS.

       ``(a) Short Title.--This section may be cited as the `Bill 
     Emerson National Hunger Fellows and Mickey Leland 
     International Hunger Fellows Program Act of 2008'.
       ``(b) Definitions.--In this subsection:
       ``(1) Director.--The term `Director' means the head of the 
     Congressional Hunger Center.
       ``(2) Fellow.--The term `fellow' means--
       ``(A) a Bill Emerson Hunger Fellow; or
       ``(B) Mickey Leland Hunger Fellow.
       ``(3) Fellowship programs.--The term `Fellowship Programs' 
     means the Bill Emerson National Hunger Fellowship Program and 
     the Mickey Leland International Hunger Fellowship Program 
     established under subsection (c)(1).
       ``(c) Fellowship Programs.--
       ``(1) In general.--There is established the Bill Emerson 
     National Hunger Fellowship Program and the Mickey Leland 
     International Hunger Fellowship Program.
       ``(2) Purposes.--
       ``(A) In general.--The purposes of the Fellowship Programs 
     are--
       ``(i) to encourage future leaders of the United States--

       ``(I) to pursue careers in humanitarian and public service;
       ``(II) to recognize the needs of low-income people and 
     hungry people;
       ``(III) to provide assistance to people in need; and
       ``(IV) to seek public policy solutions to the challenges of 
     hunger and poverty;

       ``(ii) to provide training and development opportunities 
     for such leaders through placement in programs operated by 
     appropriate organizations or entities; and
       ``(iii) to increase awareness of the importance of public 
     service.
       ``(B) Bill emerson hunger fellowship program.--The purpose 
     of the Bill Emerson Hunger Fellowship Program is to address 
     hunger and poverty in the United States.
       ``(C) Mickey leland hunger fellowship program.--The purpose 
     of the Mickey Leland Hunger Fellowship Program is to address 
     international hunger and other humanitarian needs.
       ``(3) Administration.--
       ``(A) In general.--Subject to subparagraph (B), the 
     Secretary shall offer to provide a grant to the Congressional 
     Hunger Center to administer the Fellowship Programs.
       ``(B) Terms of grant.--The terms of the grant provided 
     under subparagraph (A), including the length of the grant and 
     provisions for the alteration or termination of the grant, 
     shall be determined by the Secretary in accordance with this 
     section.
       ``(d) Fellowships.--
       ``(1) In general.--The Director shall make available Bill 
     Emerson Hunger Fellowships and Mickey Leland Hunger 
     Fellowships in accordance with this subsection.
       ``(2) Curriculum.--
       ``(A) In general.--The Fellowship Programs shall provide 
     experience and training to develop

[[Page H3473]]

     the skills necessary to train fellows to carry out the 
     purposes described in subsection (c)(2), including--
       ``(i) training in direct service programs for the hungry 
     and other anti-hunger programs in conjunction with community-
     based organizations through a program of field placement; and
       ``(ii) providing experience in policy development through 
     placement in a governmental entity or nongovernmental, 
     nonprofit, or private sector organization.
       ``(B) Work plan.--To carry out subparagraph (A) and assist 
     in the evaluation of the fellowships under paragraph (6), the 
     Director shall, for each fellow, approve a work plan that 
     identifies the target objectives for the fellow in the 
     fellowship, including specific duties and responsibilities 
     relating to those objectives.
       ``(3) Period of fellowship.--
       ``(A) Bill emerson hunger fellow.--A Bill Emerson Hunger 
     Fellowship awarded under this section shall be for not more 
     than 15 months.
       ``(B) Mickey leland hunger fellow.--A Mickey Leland Hunger 
     Fellowship awarded under this section shall be for not more 
     than 2 years.
       ``(4) Selection of fellows.--
       ``(A) In general.--Fellowships shall be awarded pursuant to 
     a nationwide competition established by the Director.
       ``(B) Qualifications.--A successful program applicant shall 
     be an individual who has demonstrated--
       ``(i) an intent to pursue a career in humanitarian services 
     and outstanding potential for such a career;
       ``(ii) leadership potential or actual leadership 
     experience;
       ``(iii) diverse life experience;
       ``(iv) proficient writing and speaking skills;
       ``(v) an ability to live in poor or diverse communities; 
     and
       ``(vi) such other attributes as are considered to be 
     appropriate by the Director.
       ``(5) Amount of award.--
       ``(A) In general.--A fellow shall receive--
       ``(i) a living allowance during the term of the Fellowship; 
     and
       ``(ii) subject to subparagraph (B), an end-of-service 
     award.
       ``(B) Requirement for successful completion of 
     fellowship.--Each fellow shall be entitled to receive an end-
     of-service award at an appropriate rate for each month of 
     satisfactory service completed, as determined by the 
     Director.
       ``(C) Terms of fellowship.--A fellow shall not be 
     considered an employee of--
       ``(i) the Department of Agriculture;
       ``(ii) the Congressional Hunger Center; or
       ``(iii) a host agency in the field or policy placement of 
     the fellow.
       ``(D) Recognition of fellowship award.--
       ``(i) Emerson fellow.--An individual awarded a fellowship 
     from the Bill Emerson Hunger Fellowship shall be known as an 
     `Emerson Fellow'.
       ``(ii) Leland fellow.--An individual awarded a fellowship 
     from the Mickey Leland Hunger Fellowship shall be known as a 
     `Leland Fellow'.
       ``(6) Evaluations and audits.--Under terms stipulated in 
     the contract entered into under subsection (c)(3), the 
     Director shall--
       ``(A) conduct periodic evaluations of the Fellowship 
     Programs; and
       ``(B) arrange for annual independent financial audits of 
     expenditures under the Fellowship Programs.
       ``(e) Authority.--
       ``(1) In general.--Subject to paragraph (2), in carrying 
     out this section, the Director may solicit, accept, use, and 
     dispose of gifts, bequests, or devises of services or 
     property, both real and personal, for the purpose of 
     facilitating the work of the Fellowship Programs.
       ``(2) Limitation.--Gifts, bequests, or devises of money and 
     proceeds from sales of other property received as gifts, 
     bequests, or devises shall be used exclusively for the 
     purposes of the Fellowship Programs.
       ``(f) Report.--The Director shall annually submit to the 
     Secretary of Agriculture, the Committee on Agriculture of the 
     House of Representatives, and the Committee on Agriculture, 
     Nutrition, and Forestry of the Senate a report that--
       ``(1) describes the activities and expenditures of the 
     Fellowship Programs during the preceding fiscal year, 
     including expenditures made from funds made available under 
     subsection (g); and
       ``(2) includes the results of evaluations and audits 
     required by subsection (d).
       ``(g) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Secretary such sums as 
     are necessary to carry out this section, to remain available 
     until expended.''.

     SEC. 4402. ASSISTANCE FOR COMMUNITY FOOD PROJECTS.

       Section 25 of the Food and Nutrition Act of 2008 (7 U.S.C. 
     2034) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Definitions.--In this section:
       ``(1) Community food project.--In this section, the term 
     `community food project' means a community-based project 
     that--
       ``(A) requires a 1-time contribution of Federal assistance 
     to become self-sustaining; and
       ``(B) is designed--
       ``(i)(I) to meet the food needs of low-income individuals;
       ``(II) to increase the self-reliance of communities in 
     providing for the food needs of the communities; and
       ``(III) to promote comprehensive responses to local food, 
     farm, and nutrition issues; or
       ``(ii) to meet specific State, local, or neighborhood food 
     and agricultural needs, including needs relating to--

       ``(I) infrastructure improvement and development;
       ``(II) planning for long-term solutions; or
       ``(III) the creation of innovative marketing activities 
     that mutually benefit agricultural producers and low-income 
     consumers.

       ``(2) Center.--The term `Center' means the healthy urban 
     food enterprise development center established under 
     subsection (h).
       ``(3) Underserved community.--The term `underserved 
     community' means a community (including an urban or rural 
     community or an Indian tribe) that, as determined by the 
     Secretary, has--
       ``(A) limited access to affordable, healthy foods, 
     including fresh fruits and vegetables;
       ``(B) a high incidence of a diet-related disease (including 
     obesity) as compared to the national average;
       ``(C) a high rate of hunger or food insecurity; or
       ``(D) severe or persistent poverty.'';
       (2) by redesignating subsection (h) as subsection (i); and
       (3) by inserting after subsection (g) the following:
       ``(h) Healthy Urban Food Enterprise Development Center.--
       ``(1) Definition of eligible entity.--In this subsection, 
     the term `eligible entity' means--
       ``(A) a nonprofit organization;
       ``(B) a cooperative;
       ``(C) a commercial entity;
       ``(D) an agricultural producer;
       ``(E) an academic institution;
       ``(F) an individual; and
       ``(G) such other entities as the Secretary may designate.
       ``(2) Establishment.--The Secretary shall offer to provide 
     a grant to a nonprofit organization to establish and support 
     a healthy urban food enterprise development center to carry 
     out the purpose described in paragraph (3).
       ``(3) Purpose.--The purpose of the Center is to increase 
     access to healthy affordable foods, including locally 
     produced agricultural products, to underserved communities.
       ``(4) Activities.--
       ``(A) Technical assistance and information.--The Center 
     shall collect, develop, and provide technical assistance and 
     information to small and medium-sized agricultural producers, 
     food wholesalers and retailers, schools, and other 
     individuals and entities regarding best practices and the 
     availability of assistance for aggregating, storing, 
     processing, and marketing locally produced agricultural 
     products and increasing the availability of such products in 
     underserved communities.
       ``(B) Authority to subgrant.--The Center may provide 
     subgrants to eligible entities--
       ``(i) to carry out feasibility studies to establish 
     businesses for the purpose described in paragraph (3); and
       ``(ii) to establish and otherwise assist enterprises that 
     process, distribute, aggregate, store, and market healthy 
     affordable foods.
       ``(5) Priority.--In providing technical assistance and 
     grants under paragraph (4), the Center shall give priority to 
     applications that include projects--
       ``(A) to benefit underserved communities; and
       ``(B) to develop market opportunities for small and mid-
     sized farm and ranch operations.
       ``(6) Report.--For each fiscal year for which the nonprofit 
     organization described in paragraph (2) receives funds, the 
     organization shall submit to the Secretary a report 
     describing the activities carried out in the preceding fiscal 
     year, including--
       ``(A) a description of technical assistance provided by the 
     Center;
       ``(B) the total number and a description of the subgrants 
     provided under paragraph (4)(B);
       ``(C) a complete listing of cases in which the activities 
     of the Center have resulted in increased access to healthy, 
     affordable foods, such as fresh fruit and vegetables, 
     particularly for school-aged children and individuals in low-
     income communities; and
       ``(D) a determination of whether the activities identified 
     in subparagraph (C) are sustained during the years following 
     the initial provision of technical assistance and subgrants 
     under this section.
       ``(7) Competitive award process.--The Secretary shall use a 
     competitive process to award funds to establish the Center.
       ``(8) Limitation on administrative expenses.--Not more than 
     10 percent of the total amount allocated for this subsection 
     in a given fiscal year may be used for administrative 
     expenses.
       ``(9) Funding.--
       ``(A) In general.--Out of any funds in the Treasury not 
     otherwise appropriated, the Secretary of the Treasury shall 
     transfer to the Secretary to carry out this subsection 
     $1,000,000 for each of fiscal years 2009 through 2011.
       ``(B) Additional funding.--There is authorized to be 
     appropriated $2,000,000 to carry out this subsection for 
     fiscal year 2012.''.

     SEC. 4403. JOINT NUTRITION MONITORING AND RELATED RESEARCH 
                   ACTIVITIES.

       The Secretary and the Secretary of Health and Human 
     Services shall continue to provide jointly for national 
     nutrition monitoring and related research activities carried 
     out as of the date of enactment of this Act--
       (1) to collect continuous dietary, health, physical 
     activity, and diet and health knowledge data on a nationally 
     representative sample;
       (2) to periodically collect data on special at-risk 
     populations, as identified by the Secretaries;
       (3) to distribute information on health, nutrition, the 
     environment, and physical activity to the public in a timely 
     fashion;
       (4) to analyze new data that becomes available;
       (5) to continuously update food composition tables; and
       (6) to research and develop data collection methods and 
     standards.

[[Page H3474]]

     SEC. 4404. SECTION 32 FUNDS FOR PURCHASE OF FRUITS, 
                   VEGETABLES, AND NUTS TO SUPPORT DOMESTIC 
                   NUTRITION ASSISTANCE PROGRAMS.

       (a) Funding for Additional Purchases of Fruits, Vegetables, 
     and Nuts.--In addition to the purchases of fruits, 
     vegetables, and nuts required by section 10603 of the Farm 
     Security and Rural Investment Act of 2002 (7 U.S.C. 612c-4), 
     the Secretary of Agriculture shall purchase fruits, 
     vegetables, and nuts for the purpose of providing nutritious 
     foods for use in domestic nutrition assistance programs, 
     using, of the funds made available under section 32 of the 
     Act of August 24, 1935 (7 U.S.C. 612c), the following 
     amounts:
       (1) $190,000,000 for fiscal year 2008.
       (2) $193,000,000 for fiscal year 2009.
       (3) $199,000,000 for fiscal year 2010.
       (4) $203,000,000 for fiscal year 2011.
       (5) $206,000,000 for fiscal year 2012 and each fiscal year 
     thereafter.
       (b) Form of Purchases.--Fruits, vegetables, and nuts may be 
     purchased under this section in the form of frozen, canned, 
     dried, or fresh fruits, vegetables, and nuts.
       (c) Purchase of Fresh Fruits and Vegetables for 
     Distribution to Schools and Service Institutions.--Section 
     10603 of the Farm Security and Rural Investment Act of 2002 
     (7 U.S.C. 612c-4) is amended by striking subsection (b) and 
     inserting the following:
       ``(b) Purchase of Fresh Fruits and Vegetables for 
     Distribution to Schools and Service Institutions.--The 
     Secretary of Agriculture shall purchase fresh fruits and 
     vegetables for distribution to schools and service 
     institutions in accordance with section 6(a) of the Richard 
     B. Russell National School Lunch Act (42 U.S.C. 1755(a)) 
     using, of the amount specified in subsection (a), not less 
     than $50,000,000 for each of fiscal years 2008 through 
     2012.''.

     SEC. 4405. HUNGER-FREE COMMUNITIES.

       (a) Definitions.--In this section:
       (1) Eligible entity.--The term ``eligible entity'' means a 
     public food program service provider or nonprofit 
     organization, including an emergency feeding organization, 
     that has collaborated, or will collaborate, with 1 or more 
     local partner organizations to achieve at least 1 hunger-free 
     communities goal.
       (2) Emergency feeding organization.--The term ``emergency 
     feeding organization'' has the meaning given the term in 
     section 201A of the Emergency Food Assistance Act of 1983 (7 
     U.S.C. 7501).
       (3) Hunger-free communities goal.--The term ``hunger-free 
     communities goal'' means any of the 14 goals described in the 
     H. Con. Res. 302 (102nd Congress).
       (b) Hunger-Free Communities Collaborative Grants.--
       (1) Program.--
       (A) In general.--The Secretary shall use not more than 50 
     percent of any funds made available under subsection (e) to 
     make grants to eligible entities to pay the Federal share of 
     the costs of an activity described in paragraph (2).
       (B) Federal share.--The Federal share of the cost of 
     carrying out an activity under this subsection shall not 
     exceed 80 percent.
       (C) Non-federal share.--
       (i) Calculation.--The non-Federal share of the cost of an 
     activity under this subsection may be provided in cash or 
     fairly evaluated in-kind contributions, including facilities, 
     equipment, or services.
       (ii) Sources.--Any entity may provide the non-Federal share 
     of the cost of an activity under this subsection through a 
     State government, a local government, or a private source.
       (2) Use of funds.--An eligible entity in a community shall 
     use a grant received under this subsection for any fiscal 
     year for hunger relief activities, including--
       (A) meeting the immediate needs of people who experience 
     hunger in the community served by the eligible entity by--
       (i) distributing food;
       (ii) providing community outreach to assist in 
     participation in federally assisted nutrition programs, 
     including--

       (I) the school breakfast program established by section 4 
     of the Child Nutrition Act of 1966 (42 U.S.C. 1773);
       (II) the school lunch program established under the Richard 
     B. Russell National School Lunch Act (42 U.S.C. 1751 et 
     seq.);
       (III) the summer food service program for children 
     established under section 13 of that Act; and
       (IV) other Federal programs that provide food for children 
     in child care facilities and homeless and older individuals; 
     or

       (iii) improving access to food as part of a comprehensive 
     service; and
       (B) developing new resources and strategies to help reduce 
     hunger in the community and prevent hunger in the future by--
       (i) developing creative food resources, such as community 
     gardens, buying clubs, food cooperatives, community-owned and 
     operated grocery stores, and farmers' markets;
       (ii) coordinating food services with park and recreation 
     programs and other community-based outlets to reduce barriers 
     to access; or
       (iii) creating nutrition education programs for at-risk 
     populations to enhance food-purchasing and food-preparation 
     skills and to heighten awareness of the connection between 
     diet and health.
       (c) Hunger-Free Communities Infrastructure Grants.--
       (1) Program authorized.--
       (A) In general.--The Secretary shall use not more than 50 
     percent of any funds made available for a fiscal year under 
     subsection (e) to make grants to eligible entities to pay the 
     Federal share of the costs of an activity described in 
     paragraph (2).
       (B) Federal share.--The Federal share of the cost of 
     carrying out an activity under this subsection shall not 
     exceed 80 percent.
       (2) Application.--
       (A) In general.--To receive a grant under this subsection, 
     an eligible entity shall submit an application at such time, 
     in such form, and containing such information as the 
     Secretary may prescribe.
       (B) Contents.--Each application submitted under 
     subparagraph (A) shall--
       (i) identify any activity described in paragraph (3) that 
     the grant will be used to fund; and
       (ii) describe the means by which an activity identified 
     under clause (i) will reduce hunger in the community of the 
     eligible entity.
       (C) Priority.--In making grants under this subsection, the 
     Secretary shall give priority to eligible entities that 
     demonstrate 2 or more of the following:
       (i) The eligible entity serves a community in which the 
     rates of food insecurity, hunger, poverty, or unemployment 
     are demonstrably higher than national average rates.
       (ii) The eligible entity serves a community that has 
     successfully carried out long-term efforts to reduce hunger 
     in the community.
       (iii) The eligible entity serves a community that provides 
     public support for the efforts of the eligible entity.
       (iv) The eligible entity is committed to achieving more 
     than 1 hunger-free communities goal.
       (3) Use of funds.--An eligible entity shall use a grant 
     received under this subsection to construct, expand, or 
     repair a facility or equipment to support hunger relief 
     efforts in the community.
       (d) Report.--If funds are made available under subsection 
     (e) to carry out this section, not later than September 30, 
     2012, the Secretary shall submit to Congress a report that 
     describes--
       (1) each grant made under this section, including--
       (A) a description of any activity funded; and
       (B) the degree of success of each activity funded in 
     achieving hunger free-communities goals; and
       (2) the degree of success of all activities funded under 
     this section in achieving domestic hunger goals.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section for each of fiscal years 2008 through 2012.

     SEC. 4406. REAUTHORIZATION OF FEDERAL FOOD ASSISTANCE 
                   PROGRAMS.

       (a) Supplemental Nutrition Assistance Program.--
       (1) Authorization of appropriations.--Section 18(a)(1) of 
     the Food and Nutrition Act of 2008 (7 U.S.C. 2027(a)(1)) is 
     amended in the first sentence by striking ``for each of the 
     fiscal years 2003 through 2007'' and inserting ``for each of 
     fiscal years 2008 through 2012''.
       (2) Grants for simple application and eligibility 
     determination systems and improved access to benefits.--
     Section 11(t)(1) of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2020(t)(1)) is amended by striking ``For each of 
     fiscal years 2003 through 2007'' and inserting ``Subject to 
     the availability of appropriations under section 18(a), for 
     each fiscal year''.
       (3) Funding of employment and training programs.--Section 
     16(h)(1) of the Food and Nutrition Act of 2008 (7 U.S.C. 
     2025(h)(1)) is amended--
       (A) in subparagraph (A), by striking ``the amount of--'' 
     and all that follows through the end of the subparagraph and 
     inserting ``, $90,000,000 for each fiscal year.''; and
       (B) in subparagraph (E)(i), by striking ``for each of 
     fiscal years 2002 through 2007'' and inserting ``for each 
     fiscal year''.
       (4) Reductions in payments for administrative costs.--
     Section 16(k)(3) of the Food and Nutrition Act of 2008 (7 
     U.S.C. 2025(k)(3)) is amended--
       (A) in the first sentence of subparagraph (A), by striking 
     ``effective for each of fiscal years 1999 through 2007,''; 
     and
       (B) in subparagraph (B)(ii), by striking ``through fiscal 
     year 2007''.
       (5) Cash payment pilot projects.--Section 17(b)(1)(B)(vi) 
     of the Food and Nutrition Act of 2008 (7 U.S.C. 
     2026(b)(1)(B)(vi)) is amended--
       (A) by striking ``Any pilot'' and inserting ``Subject to 
     the availability of appropriations under section 18(a), any 
     pilot''; and
       (B) by striking ``through October 1, 2007,''.
       (6) Consolidated block grants for puerto rico and american 
     samoa.--Section 19(a)(2)(A)(ii) of the Food and Nutrition Act 
     of 2008 (7 U.S.C. 2028(a)(2)(A)(ii)) is amended by striking 
     ``for each of fiscal years 2004 through 2007'' and inserting 
     ``subject to the availability of appropriations under section 
     18(a), for each fiscal year thereafter''.
       (7) Assistance for community food projects.--Section 25 of 
     the Food and Nutrition Act of 2008 (7 U.S.C. 2034) is 
     amended--
       (A) in subsection (b)(2)(B), by striking ``for each of 
     fiscal years 1997 through 2007'' and inserting ``for fiscal 
     year 2008 and each fiscal year thereafter''; and
       (B) in subsection (i)(4) (as redesignated by section 4402), 
     by striking ``of fiscal years 2003 through 2007'' and 
     inserting ``fiscal year thereafter''.
       (b) Commodity Distribution.--
       (1) Emergency food assistance.--Section 204(a)(1) of the 
     Emergency Food Assistance Act of 1983 (7 U.S.C. 7508(a)(1)) 
     is amended in the first sentence by striking ``for each of 
     the fiscal years 2003 through 2007'' and inserting ``for 
     fiscal year 2008 and each fiscal year thereafter''.
       (2) Commodity distribution program.--Section 4(a) of the 
     Agriculture and Consumer Protection Act of 1973 (7 U.S.C. 
     612c note; Public Law 93-86) is amended in the first sentence 
     by striking ``years 1991 through 2007'' and inserting ``years 
     2008 through 2012''.

[[Page H3475]]

       (3) Commodity supplemental food program.--Section 5 of the 
     Agriculture and Consumer Protection Act of 1973 (7 U.S.C. 
     612c note; Public Law 93-86) is amended--
       (A) in subsection (a)--
       (i) in paragraph (1), by striking ``each of fiscal years 
     2003 through 2007'' and inserting ``each of fiscal years 2008 
     through 2012''; and
       (ii) in paragraph (2)(B), by striking the subparagraph 
     designation and heading and all that follows through ``2007'' 
     and inserting the following:
       ``(B) Subsequent fiscal years.--For each of fiscal years 
     2004 through 2012''; and
       (B) in subsection (d)(2), by striking ``each of the fiscal 
     years 1991 through 2007'' and inserting ``each of fiscal 
     years 2008 through 2012''.
       (4) Distribution of surplus commodities to special 
     nutrition projects.--Section 1114(a)(2)(A) of the Agriculture 
     and Food Act of 1981 (7 U.S.C. 1431e(2)(A)) is amended in the 
     first sentence by striking ``Effective through September 30, 
     2007'' and inserting ``For each of fiscal years 2008 through 
     2012''.
       (c) Farm Security and Rural Investment.--
       (1) Seniors farmers' market nutrition program.--Section 
     4402 of the Farm Security and Rural Investment Act of 2002 (7 
     U.S.C. 3007) is amended by striking by striking subsection 
     (a) and inserting the following:
       ``(a) Funding.--Of the funds of the Commodity Credit 
     Corporation, the Secretary of Agriculture shall use to carry 
     out and expand the seniors farmers' market nutrition program 
     $20,600,000 for each of fiscal years 2008 through 2012.''.
       (2) Nutrition information and awareness pilot program.--
     Section 4403(f) of the Farm Security and Rural Investment Act 
     of 2002 (7 U.S.C. 3171 note; Public Law 107-171) is amended 
     by striking ``2007'' and inserting ``2012''.

     SEC. 4407. EFFECTIVE AND IMPLEMENTATION DATES.

       Except as otherwise provided in this title, this title and 
     the amendments made by this title take effect on October 1, 
     2008.

                            TITLE V--CREDIT

                    Subtitle A--Farm Ownership Loans

     SEC. 5001. DIRECT LOANS.

       Section 302 of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 1922) is amended--
       (1) by striking the section designation and heading and all 
     that follows through ``(a) The Secretary is authorized to'' 
     and inserting the following:

     ``SEC. 302. PERSONS ELIGIBLE FOR REAL ESTATE LOANS.

       ``(a) In General.--The Secretary may''; and
       (2) in subsection (a)(2), by inserting ``, taking into 
     consideration all farming experience of the applicant, 
     without regard to any lapse between farming experiences'' 
     after ``farming operations''.

     SEC. 5002. CONSERVATION LOAN AND LOAN GUARANTEE PROGRAM.

       Section 304 of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 1924) is amended to read as follows:

     ``SEC. 304. CONSERVATION LOAN AND LOAN GUARANTEE PROGRAM.

       ``(a) In General.--The Secretary may make or guarantee 
     qualified conservation loans to eligible borrowers under this 
     section.
       ``(b) Definitions.--In this section:
       ``(1) Qualified conservation loan.--The term `qualified 
     conservation loan' means a loan, the proceeds of which are 
     used to cover the costs to the borrower of carrying out a 
     qualified conservation project.
       ``(2) Qualified conservation project.--The term `qualified 
     conservation project' means conservation measures that 
     address provisions of a conservation plan of the eligible 
     borrower.
       ``(3) Conservation plan.--The term `conservation plan' 
     means a plan, approved by the Secretary, that, for a farming 
     or ranching operation, identifies the conservation activities 
     that will be addressed with loan funds provided under this 
     section, including--
       ``(A) the installation of conservation structures to 
     address soil, water, and related resources;
       ``(B) the establishment of forest cover for sustained yield 
     timber management, erosion control, or shelter belt purposes;
       ``(C) the installation of water conservation measures;
       ``(D) the installation of waste management systems;
       ``(E) the establishment or improvement of permanent 
     pasture;
       ``(F) compliance with section 1212 of the Food Security Act 
     of 1985; and
       ``(G) other purposes consistent with the plan, including 
     the adoption of any other emerging or existing conservation 
     practices, techniques, or technologies approved by the 
     Secretary.
       ``(c) Eligibility.--
       ``(1) In general.--The Secretary may make or guarantee 
     loans to farmers or ranchers in the United States, farm 
     cooperatives, private domestic corporations, partnerships, 
     joint operations, trusts, or limited liability companies that 
     are controlled by farmers or ranchers and engaged primarily 
     and directly in agricultural production in the United States.
       ``(2) Requirements.--To be eligible for a loan under this 
     section, applicants shall meet the requirements in paragraphs 
     (1) and (2) of section 302(a).
       ``(d) Priority.--In making or guaranteeing loans under this 
     section, the Secretary shall give priority to--
       ``(1) qualified beginning farmers or ranchers and socially 
     disadvantaged farmers or ranchers;
       ``(2) owners or tenants who use the loans to convert to 
     sustainable or organic agricultural production systems; and
       ``(3) producers who use the loans to build conservation 
     structures or establish conservation practices to comply with 
     section 1212 of the Food Security Act of 1985.
       ``(e) Limitations Applicable to Loan Guarantees.--The 
     portion of a loan that the Secretary may guarantee under this 
     section shall be 75 percent of the principal amount of the 
     loan.
       ``(f) Administrative Provisions.--The Secretary shall 
     ensure, to the maximum extent practicable, that loans made or 
     guaranteed under this section are distributed across diverse 
     geographic regions.
       ``(g) Credit Eligibility.--The provisions of paragraphs (1) 
     and (3) of section 333 shall not apply to loans made or 
     guaranteed under this section.
       ``(h) Authorization of Appropriations.--For each of fiscal 
     years 2008 through 2012, there are authorized to be 
     appropriated to the Secretary such funds as are necessary to 
     carry out this section.''.

     SEC. 5003. LIMITATIONS ON AMOUNT OF FARM OWNERSHIP LOANS.

       Section 305(a)(2) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 1925(a)(2)) is amended by striking 
     ``$200,000'' and inserting ``$300,000''.

     SEC. 5004. DOWN PAYMENT LOAN PROGRAM.

       Section 310E of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 1935) is amended--
       (1) in subsection (a)(1), by striking ``and ranchers'' and 
     inserting ``or ranchers and socially disadvantaged farmers or 
     ranchers'';
       (2) in subsection (b)--
       (A) by striking paragraph (1) and inserting the following;
       ``(1) Principal.--Each loan made under this section shall 
     be in an amount that does not exceed 45 percent of the least 
     of--
       ``(A) the purchase price of the farm or ranch to be 
     acquired;
       ``(B) the appraised value of the farm or ranch to be 
     acquired; or
       ``(C) $500,000.
       ``(2) Interest rate.--The interest rate on any loan made by 
     the Secretary under this section shall be a rate equal to the 
     greater of--
       ``(A) the difference obtained by subtracting 4 percent from 
     the interest rate for farm ownership loans under this 
     subtitle; or
       ``(B) 1.5 percent.''; and
       (B) in paragraph (3), by striking ``15'' and inserting 
     ``20'';
       (3) in subsection (c)--
       (A) in paragraph (1), by striking ``10'' and inserting 
     ``5'';
       (B) by striking paragraph (2) and redesignating paragraph 
     (3) as paragraph (2); and
       (C) in paragraph (2)(B) (as so redesignated), by striking 
     ``15-year'' and inserting ``20-year'';
       (4) in subsection (d)--
       (A) in paragraph (3)--
       (i) by inserting ``and socially disadvantaged farmers or 
     ranchers'' after ``ranchers''; and
       (ii) by striking ``and'' at the end;
       (B) in paragraph (4), by striking ``and ranchers.'' and 
     inserting `` or ranchers or socially disadvantaged farmers or 
     ranchers; and''; and
       (C) by adding at the end the following:
       ``(5) establish annual performance goals to promote the use 
     of the down payment loan program and other joint financing 
     arrangements as the preferred choice for direct real estate 
     loans made by any lender to a qualified beginning farmer or 
     rancher or socially disadvantaged farmer or rancher.''; and
       (5) by adding at the end the following:
       ``(e) Socially Disadvantaged Farmer or Rancher Defined.--In 
     this section, the term `socially disadvantaged farmer or 
     rancher' has the meaning given that term in section 
     355(e)(2).''.

     SEC. 5005. BEGINNING FARMER OR RANCHER AND SOCIALLY 
                   DISADVANTAGED FARMER OR RANCHER CONTRACT LAND 
                   SALES PROGRAM.

       Section 310F of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 1936) is amended to read as follows:

     ``SEC. 310F. BEGINNING FARMER OR RANCHER AND SOCIALLY 
                   DISADVANTAGED FARMER OR RANCHER CONTRACT LAND 
                   SALES PROGRAM.

       ``(a) In General.--The Secretary shall, in accordance with 
     this section, guarantee a loan made by a private seller of a 
     farm or ranch to a qualified beginning farmer or rancher or 
     socially disadvantaged farmer or rancher (as defined in 
     section 355(e)(2)) on a contract land sales basis.
       ``(b) Eligibility.--In order to be eligible for a loan 
     guarantee under subsection (a)--
       ``(1) the qualified beginning farmer or rancher or socially 
     disadvantaged farmer or rancher shall--
       ``(A) on the date the contract land sale that is subject of 
     the loan is complete, own and operate the farm or ranch that 
     is the subject of the contract land sale;
       ``(B) have a credit history that--
       ``(i) includes a record of satisfactory debt repayment, as 
     determined by the Secretary; and
       ``(ii) is acceptable to the Secretary; and
       ``(C) demonstrate to the Secretary that the farmer or 
     rancher, as the case may be, is unable to obtain sufficient 
     credit without a guarantee to finance any actual need of the 
     farmer or rancher, as the case may be, at a reasonable rate 
     or term; and
       ``(2) the loan shall meet applicable underwriting criteria, 
     as determined by the Secretary.
       ``(c) Limitations.--
       ``(1) Down payment.--The Secretary shall not provide a loan 
     guarantee under subsection (a) if the contribution of the 
     qualified beginning farmer or rancher or socially 
     disadvantaged farmer or rancher to the down payment for the 
     farm or ranch that is the subject of the contract land sale 
     would be less than 5 percent of the purchase price of the 
     farm or ranch.
       ``(2) Maximum purchase price.--The Secretary shall not 
     provide a loan guarantee under

[[Page H3476]]

     subsection (a) if the purchase price or the appraisal value 
     of the farm or ranch that is the subject of the contract land 
     sale is greater than $500,000.
       ``(d) Period of Guarantee.--The period during which a loan 
     guarantee under this section is in effect shall be the 10-
     year period beginning with the date the guarantee is 
     provided.
       ``(e) Guarantee Plan.--
       ``(1) Selection of plan.--A private seller of a farm or 
     ranch who makes a loan that is guaranteed by the Secretary 
     under subsection (a) may select--
       ``(A) a prompt payment guarantee plan, which shall cover--
       ``(i) 3 amortized annual installments; or
       ``(ii) an amount equal to 3 annual installments (including 
     an amount equal to the total cost of any tax and insurance 
     incurred during the period covered by the annual 
     installments); or
       ``(B) a standard guarantee plan, which shall cover an 
     amount equal to 90 percent of the outstanding principal of 
     the loan.
       ``(2) Eligiblity for standard guarantee plan.--In order for 
     a private seller to be eligible for a standard guarantee plan 
     referred to in paragraph (1)(B), the private seller shall--
       ``(A) secure a commercial lending institution or similar 
     entity, as determined by the Secretary, to serve as an escrow 
     agent; or
       ``(B) in cooperation with the farmer or rancher, use an 
     appropriate alternate arrangement, as determined by the 
     Secretary.
       ``(f) Transition From Pilot Program.--
       ``(1) In general.--The Secretary may phase-in the 
     implementation of the changes to the Beginning Farmer and 
     Rancher and Socially Disadvantaged Farmer or Rancher Contract 
     Land Sales Program provided for in this section.
       ``(2) Limitation.--All changes to the Beginning Farmer and 
     Rancher and Socially Disadvantaged Farmer or Rancher Contract 
     Land Sales Program must be implemented for the 2011 Fiscal 
     Year.''.

                      Subtitle B--Operating Loans

     SEC. 5101. FARMING EXPERIENCE AS ELIGIBILITY REQUIREMENT.

       Section 311 of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 1941) is amended--
       (1) by striking the section designation and all that 
     follows through ``(a) The Secretary is authorized to'' and 
     inserting the following:

     ``SEC. 311. PERSONS ELIGIBLE FOR LOANS.

       ``(a) In General.--The Secretary may'';
       (2) in subsection (a)(2), by inserting ``, taking into 
     consideration all farming experience of the applicant, 
     without regard to any lapse between farming experiences'' 
     after ``farming operations''.

     SEC. 5102. LIMITATIONS ON AMOUNT OF OPERATING LOANS.

       Section 313(a)(1) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 1943(a)(1)) is amended by striking 
     ``$200,000'' and inserting ``$300,000''.

     SEC. 5103. SUSPENSION OF LIMITATION ON PERIOD FOR WHICH 
                   BORROWERS ARE ELIGIBLE FOR GUARANTEED 
                   ASSISTANCE.

       Section 5102 of the Farm Security And Rural Investment Act 
     of 2002 (7 U.S.C. 1949 note; Public Law 107-171) is amended 
     by striking ``September 30, 2007'' and inserting ``December 
     31, 2010''.

                      Subtitle C--Emergency Loans

     SEC. 5201. ELIGIBILITY OF EQUINE FARMERS AND RANCHERS FOR 
                   EMERGENCY LOANS.

       Section 321(a) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 1961(a)) is amended--
       (1) in paragraph (1), by striking ``farmers, ranchers'' and 
     inserting ``farmers or ranchers (including equine farmers or 
     ranchers)''; and
       (2) in paragraph (2)(A), by striking ``farming, ranching,'' 
     and inserting ``farming or ranching (including equine farming 
     or ranching)''.

                 Subtitle D--Administrative Provisions

     SEC. 5301. BEGINNING FARMER AND RANCHER INDIVIDUAL 
                   DEVELOPMENT ACCOUNTS PILOT PROGRAM.

       Subtitle D of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 1981-2008r) is amended by inserting after 
     section 333A the following:

     ``SEC. 333B. BEGINNING FARMER AND RANCHER INDIVIDUAL 
                   DEVELOPMENT ACCOUNTS PILOT PROGRAM.

       ``(a) Definitions.--In this section:
       ``(1) Demonstration program.--The term `demonstration 
     program' means a demonstration program carried out by a 
     qualified entity under the pilot program established in 
     subsection (b)(1).
       ``(2) Eligible participant.--The term `eligible 
     participant' means a qualified beginning farmer or rancher 
     that--
       ``(A) lacks significant financial resources or assets; and
       ``(B) has an income that is less than--
       ``(i) 80 percent of the median income of the State in which 
     the farmer or rancher resides; or
       ``(ii) 200 percent of the most recent annual Federal 
     Poverty Income Guidelines published by the Department of 
     Health and Human Services for the State.
       ``(3) Individual development account.--The term `individual 
     development account' means a savings account described in 
     subsection (b)(4)(A).
       ``(4) Qualified entity.--
       ``(A) In general.--The term `qualified entity' means--
       ``(i) 1 or more organizations--

       ``(I) described in section 501(c)(3) of the Internal 
     Revenue Code of 1986; and
       ``(II) exempt from taxation under section 501(a) of such 
     Code; or

       ``(ii) a State, local, or tribal government submitting an 
     application jointly with an organization described in clause 
     (i).
       ``(B) No prohibition on collaboration.--An organization 
     described in subparagraph (A)(i) may collaborate with a 
     financial institution or for-profit community development 
     corporation to carry out the purposes of this section.
       ``(b) Pilot Program.--
       ``(1) In general.--The Secretary shall establish a pilot 
     program to be known as the `New Farmer Individual Development 
     Accounts Pilot Program' under which the Secretary shall work 
     through qualified entities to establish demonstration 
     programs--
       ``(A) of at least 5 years in duration; and
       ``(B) in at least 15 States.
       ``(2) Coordination.--The Secretary shall operate the pilot 
     program through, and in coordination with the farm loan 
     programs of, the Farm Service Agency.
       ``(3) Reserve funds.--
       ``(A) In general.--A qualified entity carrying out a 
     demonstration program under this section shall establish a 
     reserve fund consisting of a non-Federal match of 50 percent 
     of the total amount of the grant awarded to the demonstration 
     program under this section.
       ``(B) Federal funds.--After the qualified entity has 
     deposited the non-Federal matching funds described in 
     subparagraph (A) in the reserve fund, the Secretary shall 
     provide the total amount of the grant awarded under this 
     section to the demonstration program for deposit in the 
     reserve fund.
       ``(C) Use of funds.--Of the funds deposited under 
     subparagraph (B) in the reserve fund established for a 
     demonstration program, the qualified entity carrying out the 
     demonstration program--
       ``(i) may use up to 10 percent for administrative expenses; 
     and
       ``(ii) shall use the remainder in making matching awards 
     described in paragraph (4)(B)(ii)(I).
       ``(D) Interest.--Any interest earned on amounts in a 
     reserve fund established under subparagraph (A) may be used 
     by the qualified entity as additional matching funds for, or 
     to administer, the demonstration program.
       ``(E) Guidance.--The Secretary shall issue guidance 
     regarding the investment requirements of reserve funds 
     established under this paragraph.
       ``(F) Reversion.--On the date on which all funds remaining 
     in any individual development account established by a 
     qualified entity have reverted under paragraph (5)(B)(ii) to 
     the reserve fund established by the qualified entity, there 
     shall revert to the Treasury of the United States a 
     percentage of the amount (if any) in the reserve fund equal 
     to--
       ``(i) the amount of Federal funds deposited in the reserve 
     fund under subparagraph (B) that were not used for 
     administrative expenses; divided by
       ``(ii) the total amount of funds deposited in the reserve 
     fund.
       ``(4) Individual development accounts.--
       ``(A) In general.--A qualified entity receiving a grant 
     under this section shall establish and administer individual 
     development accounts for eligible participants.
       ``(B) Contract requirements.--To be eligible to receive 
     funds under this section from a qualified entity, an eligible 
     participant shall enter into a contract with only 1 qualified 
     entity under which--
       ``(i) the eligible participant agrees--

       ``(I) to deposit a certain amount of funds of the eligible 
     participant in a personal savings account, as prescribed by 
     the contractual agreement between the eligible participant 
     and the qualified entity;
       ``(II) to use the funds described in subclause (I) only for 
     1 or more eligible expenditures described in paragraph 
     (5)(A); and
       ``(III) to complete financial training; and

       ``(ii) the qualified entity agrees--

       ``(I) to deposit, not later than 1 month after an amount is 
     deposited pursuant to clause (i)(I), at least a 100-percent, 
     and up to a 200-percent, match of that amount into the 
     individual development account established for the eligible 
     participant; and
       ``(II) with uses of funds proposed by the eligible 
     participant.

       ``(C) Limitation.--
       ``(i) In general.--A qualified entity administering a 
     demonstration program under this section may provide not more 
     than $6,000 for each fiscal year in matching funds to the 
     individual development account established by the qualified 
     entity for an eligible participant.
       ``(ii) Treatment of amount.--An amount provided under 
     clause (i) shall not be considered to be a gift or loan for 
     mortgage purposes.
       ``(5) Eligible expenditures.--
       ``(A) In general.--An eligible expenditure described in 
     this subparagraph is an expenditure--
       ``(i) to purchase farmland or make a down payment on an 
     accepted purchase offer for farmland;
       ``(ii) to make mortgage payments on farmland purchased 
     pursuant to clause (i), for up to 180 days after the date of 
     the purchase;
       ``(iii) to purchase breeding stock, fruit or nut trees, or 
     trees to harvest for timber; and
       ``(iv) for other similar expenditures, as determined by the 
     Secretary.
       ``(B) Timing.--
       ``(i) In general.--An eligible participant may make an 
     eligible expenditure at any time during the 2-year period 
     beginning on the date on which the last matching funds are 
     provided under paragraph (4)(B)(ii)(I) to the individual 
     development account established for the eligible participant.
       ``(ii) Unexpended funds.--At the end of the period 
     described in clause (i), any funds remaining in an individual 
     development account established for an eligible participant 
     shall revert to the reserve fund of the demonstration program 
     under which the account was established.
       ``(c) Applications.--
       ``(1) In general.--A qualified entity that seeks to carry 
     out a demonstration program

[[Page H3477]]

     under this section may submit to the Secretary an application 
     at such time, in such form, and containing such information 
     as the Secretary may prescribe.
       ``(2) Criteria.--In considering whether to approve an 
     application to carry out a demonstration program under this 
     section, the Secretary shall assess--
       ``(A) the degree to which the demonstration program 
     described in the application is likely to aid eligible 
     participants in successfully pursuing new farming 
     opportunities;
       ``(B) the experience and ability of the qualified entity to 
     responsibly administer the demonstration program;
       ``(C) the experience and ability of the qualified entity in 
     recruiting, educating, and assisting eligible participants to 
     increase economic independence and pursue or advance farming 
     opportunities;
       ``(D) the aggregate amount of direct funds from non-Federal 
     public sector and private sources that are formally committed 
     to the demonstration program as matching contributions;
       ``(E) the adequacy of the plan of the qualified entity to 
     provide information relevant to an evaluation of the 
     demonstration program; and
       ``(F) such other factors as the Secretary considers to be 
     appropriate.
       ``(3) Preferences.--In considering an application to 
     conduct a demonstration program under this section, the 
     Secretary shall give preference to an application from a 
     qualified entity that demonstrates--
       ``(A) a track record of serving clients targeted by the 
     program, including, as appropriate, socially disadvantaged 
     farmers or ranchers (as defined in section 355(e)(2)); and
       ``(B) expertise in dealing with financial management 
     aspects of farming.
       ``(4) Approval.--Not later than 1 year after the date of 
     enactment of this section, in accordance with this section, 
     the Secretary shall, on a competitive basis, approve such 
     applications to conduct demonstration programs as the 
     Secretary considers appropriate.
       ``(5) Term of authority.--If the Secretary approves an 
     application to carry out a demonstration program, the 
     Secretary shall authorize the applicant to carry out the 
     project for a period of 5 years, plus an additional 2 years 
     to make eligible expenditures in accordance with subsection 
     (b)(5)(B).
       ``(d) Grant Authority.--
       ``(1) In general.--The Secretary shall make a grant to a 
     qualified entity authorized to carry out a demonstration 
     program under this section.
       ``(2) Maximum amount of grants.--The aggregate amount of 
     grant funds provided to a demonstration program carried out 
     under this section shall not exceed $250,000.
       ``(3) Timing of grant payments.--The Secretary shall pay 
     the amounts awarded under a grant made under this section--
       ``(A) on the awarding of the grant; or
       ``(B) pursuant to such payment plan as the qualified entity 
     may specify.
       ``(e) Reports.--
       ``(1) Annual progress reports.--
       ``(A) In general.--Not later than 60 days after the end of 
     the calendar year in which the Secretary authorizes a 
     qualified entity to carry out a demonstration program under 
     this section, and annually thereafter until the conclusion of 
     the demonstration program, the qualified entity shall prepare 
     an annual report that includes, for the period covered by the 
     report--
       ``(i) an evaluation of the progress of the demonstration 
     program;
       ``(ii) information about the demonstration program, 
     including the eligible participants and the individual 
     development accounts that have been established; and
       ``(iii) such other information as the Secretary may 
     require.
       ``(B) Submission of reports.--A qualified entity shall 
     submit each report required under subparagraph (A) to the 
     Secretary.
       ``(2) Reports by the secretary.--Not later than 1 year 
     after the date on which all demonstration programs under this 
     section are concluded, the Secretary shall submit to Congress 
     a final report that describes the results and findings of all 
     reports and evaluations carried out under this section.
       ``(f) Annual Review.--The Secretary may conduct an annual 
     review of the financial records of a qualified entity--
       ``(1) to assess the financial soundness of the qualified 
     entity; and
       ``(2) to determine the use of grant funds made available to 
     the qualified entity under this section.
       ``(g) Regulations.--In carrying out this section, the 
     Secretary may promulgate regulations to ensure that the 
     program includes provisions for--
       ``(1) the termination of demonstration programs;
       ``(2) control of the reserve funds in the case of such a 
     termination;
       ``(3) transfer of demonstration programs to other qualified 
     entities; and
       ``(4) remissions from a reserve fund to the Secretary in a 
     case in which a demonstration program is terminated without 
     transfer to a new qualified entity.
       ``(h) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $5,000,000 for 
     each of fiscal years 2008 through 2012.''.

     SEC. 5302. INVENTORY SALES PREFERENCES; LOAN FUND SET-ASIDES.

       (a) Inventory Sales Preferences.--Section 335(c) of the 
     Consolidated Farm and Rural Development Act (7 U.S.C. 
     1985(c)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (B)--
       (i) in the subparagraph heading, by inserting ``; socially 
     disadvantaged farmer or rancher'' after ``or rancher'';
       (ii) in clause (i), by inserting `` or a socially 
     disadvantaged farmer or rancher'' after ``or rancher'';
       (iii) in clause (ii), by inserting ``or socially 
     disadvantaged farmer or rancher'' after ``or rancher'';
       (iv) in clause (iii), by inserting ``or a socially 
     disadvantaged farmer or rancher'' after ``or rancher''; and
       (v) in clause (iv), by striking ``and ranchers'' and 
     inserting ``or ranchers and socially disadvantaged farmers or 
     ranchers''; and
       (B) in subparagraph (C), by inserting ``or a socially 
     disadvantaged farmer or rancher'' after ``or rancher'';
       (2) in paragraph (5)(B)--
       (A) in clause (i)--
       (i) in the clause heading, by inserting ``; socially 
     disadvantaged farmer or rancher'' after ``or rancher'';
       (ii) by inserting ``or a socially disadvantaged farmer or 
     rancher'' after ``a beginning farmer or rancher''; and
       (iii) by inserting ``or the socially disadvantaged farmer 
     or rancher'' after ``the beginning farmer or rancher''; and
       (B) in clause (ii)--
       (i) in the matter preceding subclause (I), by inserting 
     ``or a socially disadvantaged farmer or rancher'' after ``or 
     rancher''; and
       (ii) in subclause (II), by inserting ``or the socially 
     disadvantaged farmer or rancher'' after ``or rancher''; and
       (3) in paragraph (6)--
       (A) in subparagraph (A), by inserting ``or a socially 
     disadvantaged farmer or rancher'' after ``or rancher''; and
       (B) in subparagraph (C)--
       (i) in clause (i)(I), by striking ``and ranchers'' and 
     inserting ``or ranchers and socially disadvantaged farmers or 
     ranchers''; and
       (ii) in clause (ii), by inserting ``or socially 
     disadvantaged farmers or ranchers'' after ``or ranchers''.
       (b) Loan Fund Set-Asides.--Section 346(b)(2) of such Act (7 
     U.S.C. 1994(b)(2)) is amended--
       (1) in subparagraph (A)--
       (A) in clause (i)--
       (i) in subclause (I), by striking ``70 percent'' and 
     inserting ``an amount that is not less than 75 percent of the 
     total amount''; and
       (ii) in subclause (II)--

       (I) in the subclause heading, by inserting ``; joint 
     financing arrangements'' after ``payment loans'';
       (II) by striking ``60 percent'' and inserting ``an amount 
     not less than \2/3\ of the amount''; and
       (III) by inserting ``and joint financing arrangements under 
     section 307(a)(3)(D)'' after ``section 310E''; and

       (B) in clause (ii)(III), by striking ``2003 through 2007, 
     35 percent'' and inserting ``2008 through 2012, an amount 
     that is not less than 50 percent of the total amount''; and
       (2) in subparagraph (B)(i), by striking ``25 percent'' and 
     inserting ``an amount that is not less than 40 percent of the 
     total amount''.

     SEC. 5303. LOAN AUTHORIZATION LEVELS.

       Section 346(b)(1) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 1994(b)(1)) is amended--
       (1) in the matter preceding subparagraph (A), by striking 
     ``$3,796,000,000 for each of fiscal years 2003 through 2007'' 
     and inserting ``$4,226,000,000 for each of fiscal years 2008 
     through 2012''; and
       (2) in subparagraph (A)--
       (A) in the matter preceding clause (i), by striking 
     ``$770,000,000'' and inserting ``$1,200,000,000'';
       (B) in clause (i), by striking ``$205,000,000'' and 
     inserting ``$350,000,000''; and
       (C) in clause (ii), by striking ``$565,000,000'' and 
     inserting ``$850,000,000''.

     SEC. 5304. TRANSITION TO PRIVATE COMMERCIAL OR OTHER SOURCES 
                   OF CREDIT.

       Subtitle D of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 1981-2008r) is amended by inserting after 
     section 344 the following:

     ``SEC. 345. TRANSITION TO PRIVATE COMMERCIAL OR OTHER SOURCES 
                   OF CREDIT.

       ``(a) In General.--In making or insuring a farm loan under 
     subtitle A or B, the Secretary shall establish a plan and 
     promulgate regulations (including performance criteria) that 
     promote the goal of transitioning borrowers to private 
     commercial credit and other sources of credit in the shortest 
     period of time practicable.
       ``(b) Coordination.--In carrying out this section, the 
     Secretary shall integrate and coordinate the transition 
     policy described in subsection (a) with--
       ``(1) the borrower training program established by section 
     359;
       ``(2) the loan assessment process established by section 
     360;
       ``(3) the supervised credit requirement established by 
     section 361;
       ``(4) the market placement program established by section 
     362; and
       ``(5) other appropriate programs and authorities, as 
     determined by the Secretary.''.

     SEC. 5305. EXTENSION OF THE RIGHT OF FIRST REFUSAL TO 
                   REACQUIRE HOMESTEAD PROPERTY TO IMMEDIATE 
                   FAMILY MEMBERS OF BORROWER-OWNER.

       Section 352(c)(4)(B) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 2000(c)(4)(B)) is amended--
       (1) in the 1st sentence, by striking ``, the borrower-
     owner'' inserting ``of a borrower-owner who is a socially 
     disadvantaged farmer or rancher (as defined in section 
     355(e)(2)), the borrower-owner or a member of the immediate 
     family of the borrower-owner''; and
       (2) in the 2nd sentence, by inserting ``or immediate family 
     member, as the case may be,'' before ``from''.

     SEC. 5306. RURAL DEVELOPMENT AND FARM LOAN PROGRAM 
                   ACTIVITIES.

       Subtitle D of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 1981-2008r) is

[[Page H3478]]

     amended by inserting after section 364 the following:

     ``SEC. 365. RURAL DEVELOPMENT AND FARM LOAN PROGRAM 
                   ACTIVITIES.

       ``The Secretary may not complete a study of, or enter into 
     a contract with a private party to carry out, without 
     specific authorization in a subsequent Act of Congress, a 
     competitive sourcing activity of the Secretary, including 
     support personnel of the Department of Agriculture, relating 
     to rural development or farm loan programs.''.

                        Subtitle E--Farm Credit

     SEC. 5401. FARM CREDIT SYSTEM INSURANCE CORPORATION.

       (a) In General.--Section 1.12(b) of the Farm Credit Act of 
     1971 (12 U.S.C. 2020(b)) is amended--
       (1) in the first sentence, by striking ``Each Farm'' and 
     inserting the following;
       ``(1) In general.--Each Farm''; and
       (2) by striking the second sentence and inserting the 
     following:
       ``(2) Computation.--The assessment on any association or 
     other financing institution described in paragraph (1) for 
     any period shall be computed in an equitable manner, as 
     determined by the Corporation.''.
       (b) Rules and Regulations.--Section 5.58(10) of such Act 
     (12 U.S.C. 2277a-7(10)) is amended by inserting ``and section 
     1.12(b)'' after ``part''.

     SEC. 5402. TECHNICAL CORRECTION.

       Section 3.3(b) of the Farm Credit Act of 1971 (12 U.S.C. 
     2124(b)) is amended in the first sentence by striking ``per'' 
     and inserting ``par''.

     SEC. 5403. BANK FOR COOPERATIVES VOTING STOCK.

       (a) In General.--Section 3.3(c) of the Farm Credit Act of 
     1971 (12 U.S.C. 2124(c)) is amended by striking ``and (ii)'' 
     and inserting ``(ii) other categories of persons and entities 
     described in sections 3.7 and 3.8 eligible to borrow from the 
     bank, as determined by the bank's board of directors; and 
     (iii)''.
       (b) Conforming Amendments.--Section 4.3A(c)(1)(D) of such 
     Act (12 U.S.C. 2154a(c)(1)(D)) is amended by redesignating 
     clauses (ii) and (iii) as clauses (iii) and (iv), 
     respectively, and inserting after clause (i) the following:
       ``(ii) persons and entities eligible to borrow from the 
     banks for cooperatives, as described in section 
     3.3(c)(ii);''.

     SEC. 5404. PREMIUMS.

       (a) Amount in Fund Not Exceeding Secure Base Amount.--
     Section 5.55(a) of the Farm Credit Act of 1971 (12 U.S.C. 
     2277a-4(a)) is amended--
       (1) in paragraph (1)--
       (A) in the matter preceding subparagraph (A)--
       (i) by striking ``paragraph (2)'' and inserting ``paragraph 
     (3)''; and
       (ii) by striking ``annual'' ; and
       (B) by striking subparagraphs (A) through (D) and inserting 
     the following:
       ``(A) the average outstanding insured obligations issued by 
     the bank for the calendar year, after deducting from the 
     obligations the percentages of the guaranteed portions of 
     loans and investments described in paragraph (2), multiplied 
     by 0.0020; and
       ``(B) the product obtained by multiplying--
       ``(i) the sum of--

       ``(I) the average principal outstanding for the calendar 
     year on loans made by the bank that are in nonaccrual status; 
     and
       ``(II) the average amount outstanding for the calendar year 
     of other-than-temporarily impaired investments made by the 
     bank; by

       ``(ii) 0.0010.'';
       (2) by striking paragraph (4);
       (3) by redesignating paragraphs (2) and (3) as paragraphs 
     (3) and (4), respectively;
       (4) by inserting after paragraph (1) the following:
       ``(2) Deductions from average outstanding insured 
     obligations.--The average outstanding insured obligations 
     issued by the bank for the calendar year referred to in 
     paragraph (1)(A) shall be reduced by deducting from the 
     obligations the sum of (as determined by the Corporation)--
       ``(A) 90 percent of each of--
       ``(i) the average principal outstanding for the calendar 
     year on the guaranteed portions of Federal government-
     guaranteed loans made by the bank that are in accrual status; 
     and
       ``(ii) the average amount outstanding for the calendar year 
     of the guaranteed portions of Federal government-guaranteed 
     investments made by the bank that are not permanently 
     impaired; and
       ``(B) 80 percent of each of--
       ``(i) the average principal outstanding for the calendar 
     year on the guaranteed portions of State government-
     guaranteed loans made by the bank that are in accrual status; 
     and
       ``(ii) the average amount outstanding for the calendar year 
     of the guaranteed portions of State government-guaranteed 
     investments made by the bank that are not permanently 
     impaired.'';
       (5) in paragraph (3) (as so redesignated by paragraph (3) 
     of this subsection), by striking ``annual''; and
       (6) in paragraph (4) (as so redesignated by paragraph (3) 
     of this subsection)--
       (A) in the paragraph heading, by inserting ``or 
     investments'' after ``loans'' ; and
       (B) in the matter preceding subparagraph (A), by striking 
     ``As used'' and all that follows through ``guaranteed--'' and 
     inserting ``In this section, the term `government-
     guaranteed', when applied to a loan or an investment, means a 
     loan, credit, or investment, or portion of a loan, credit, or 
     investment, that is guaranteed--''.
       (b) Amount in Fund Exceeding Secure Base Amount.--Section 
     5.55(b) of such Act (12 U.S.C. 2277a-4(b)) is amended by 
     striking ``annual''.
       (c) Secure Base Amount.--Section 5.55(c) of such Act (12 
     U.S.C. 2277a-4(c)) is amended--
       (1) by striking ``For purposes'' and inserting the 
     following:
       ``(1) In general.--For purposes'';
       (2) by striking ``(adjusted downward'' and all that follows 
     through ``by the Corporation)'' and inserting ``(as adjusted 
     under paragraph (2))''; and
       (3) by adding at the end the following:
       ``(2) Adjustment.--The aggregate outstanding insured 
     obligations of all insured System banks under paragraph (1) 
     shall be adjusted downward to exclude an amount equal to the 
     sum of (as determined by the corporation)--
       ``(A) 90 percent of each of--
       ``(i) the guaranteed portions of principal outstanding on 
     Federal government-guaranteed loans in accrual status made by 
     the banks; and
       ``(ii) the guaranteed portions of the amount of Federal 
     government-guaranteed investments made by the banks that are 
     not permanently impaired; and
       ``(B) 80 percent of each of--
       ``(i) the guaranteed portions of principal outstanding on 
     State government-guaranteed loans in accrual status made by 
     the banks; and
       ``(ii) the guaranteed portions of the amount of State 
     government-guaranteed investments made by the banks that are 
     not permanently impaired.''.
       (d) Determination of Loan and Investment Amounts.--Section 
     5.55(d) of such Act (12 U.S.C. 2277a-4(d)) is amended--
       (1) in the subsection heading, by striking ``Principal 
     Outstanding'' and inserting ``Loan and Investment Amounts'';
       (2) in the matter preceding paragraph (1), by striking 
     ``For the purpose'' and all that follows through ``made--'' 
     and inserting ``For the purpose of subsections (a) and (c), 
     the principal outstanding on all loans made by an insured 
     System bank, and the amount outstanding on all investments 
     made by an insured System bank, shall be determined based 
     on--'';
       (3) in each of paragraphs (1), (2), and (3), by inserting 
     ``all loans or investments made'' before ``by'' the first 
     place it appears; and
       (4) in each of paragraphs (1) and (2), by inserting ``or 
     investments'' after ``that is able to make such loans'' each 
     place it appears.
       (e) Allocation to System Institutions of Excess Reserves.--
     Section 5.55(e) of such Act (12 U.S.C. 2277a-4(e)) is 
     amended--
       (1) in paragraph (3), by striking ``the average secure base 
     amount for the calendar year (as calculated on an average 
     daily balance basis)'' and inserting ``the secure base 
     amount'';
       (2) in paragraph (4), by striking subparagraph (B) and 
     inserting the following:
       ``(B) there shall be credited to the allocated insurance 
     reserves account of each insured system bank an amount that 
     bears the same ratio to the total amount (less any amount 
     credited under subparagraph (A)) as--
       ``(i) the average principal outstanding for the calendar 
     year on insured obligations issued by the bank (after 
     deducting from the principal the percentages of the 
     guaranteed portions of loans and investments described in 
     subsection (a)(2)); bears to
       ``(ii) the average principal outstanding for the calendar 
     year on insured obligations issued by all insured System 
     banks (after deducting from the principal the percentages of 
     the guaranteed portions of loans and investments described in 
     subsection (a)(2)).''; and
       (3) in paragraph (6)--
       (A) in subparagraph (A)--
       (i) in the matter preceding clause (i), by striking 
     ``beginning more'' and all that follows through ``January 1, 
     2005'';
       (ii) by striking clause (i) and inserting the following:
       ``(i) subject to subparagraph (D), pay to each insured 
     System bank, in a manner determined by the Corporation, an 
     amount equal to the balance in the Allocated Insurance 
     Reserves Account of the System bank; and''; and
       (iii) in clause (ii)--

       (I) by striking ``subparagraphs (C), (E), and (F)'' and 
     inserting ``subparagraphs (C) and (E)''; and
       (II) by striking ``, of the lesser of--'' and all that 
     follows through the end of subclause (II) and inserting ``at 
     the time of the termination of the Financial Assistance 
     Corporation, of the balance in the Allocated Insurance 
     Reserves Account established under paragraph (1)(B).'';

       (B) in subparagraph (C)--
       (i) in clause (i), by striking ``(in addition to the 
     amounts described in subparagraph (F)(ii))''; and
       (ii) by striking clause (ii) and inserting the following:
       ``(ii) Termination of account.--On disbursement of an 
     amount equal to $56,000,000, the Corporation shall--

       ``(I) close the account established under paragraph (1)(B); 
     and
       ``(II) transfer any remaining funds in the Account to the 
     remaining Allocated Insurance Reserves Accounts in accordance 
     with paragraph (4)(B) for the calendar year in which the 
     transfer occurs.''; and

       (C) by striking subparagraph (F).

     SEC. 5405. CERTIFICATION OF PREMIUMS.

       (a) Filing Certified Statement.--Section 5.56 of the Farm 
     Credit Act of 1971 (12 U.S.C. 2277a-5) is amended by striking 
     subsection (a) and inserting the following:
       ``(a) Filing Certified Statement.--On a date to be 
     determined in the sole discretion of the Board of Directors 
     of the Corporation, each insured System bank that became 
     insured before the beginning of the period for which premiums 
     are being assessed (referred to in this section as the 
     `period') shall file with the Corporation a certified 
     statement showing--
       ``(1) the average outstanding insured obligations for the 
     period issued by the bank;

[[Page H3479]]

       ``(2)(A) the average principal outstanding for the period 
     on the guaranteed portion of Federal government-guaranteed 
     loans that are in accrual status; and
       ``(B) the average amount outstanding for the period of 
     Federal government-guaranteed investments that are not 
     permanently impaired (as defined in section 5.55(a)(4));
       ``(3)(A) the average principal outstanding for the period 
     on State government-guaranteed loans that are in accrual 
     status; and
       ``(B) the average amount outstanding for the period of 
     State government-guaranteed investments that are not 
     permanently impaired (as defined in section 5.55(a)(4));
       ``(4)(A) the average principal outstanding for the period 
     on loans that are in nonaccrual status; and
       ``(B) the average amount outstanding for the period of 
     other-than-temporarily impaired investments; and
       ``(5) the amount of the premium due the Corporation from 
     the bank for the period.''.
       (b) Premium Payments.--Section 5.56 of such Act (12 U.S.C. 
     2277a-5) is amended by striking subsection (c) and inserting 
     the following:
       ``(c) Premium Payments.--
       ``(1) In general.--Except as provided in paragraph (2), 
     each insured System bank shall pay to the Corporation the 
     premium payments required under subsection (a), not more 
     frequently than once in each calendar quarter, in such manner 
     and at such 1 or more times as the Board of Directors shall 
     prescribe.
       ``(2) Premium amount.--The amount of the premium shall be 
     established not later than 60 days after filing the certified 
     statement specifying the amount of the premium.''.
       (c) Subsequent Premium Payments.--Section 5.56 of such Act 
     (12 U.S.C. 2277a-5) is amended--
       (1) by striking subsection (d); and
       (2) by redesignating subsection (e) as subsection (d).

     SEC. 5406. RURAL UTILITY LOANS.

       (a) Definition of Qualified Loan.--Section 8.0(9) of the 
     Farm Credit Act of 1971 (12 U.S.C. 2279aa(9)) is amended--
       (1) in subparagraph (A)(iii), by striking ``or'' at the 
     end;
       (2) in subparagraph (B)(ii), by striking the period at the 
     end and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(C) that is a loan, or an interest in a loan, for an 
     electric or telephone facility by a cooperative lender to a 
     borrower that has received, or is eligible to receive, a loan 
     under the Rural Electrification Act of 1936 (7 U.S.C. 901 et 
     seq.).''.
       (b) Guarantee of Qualified Loans.--Section 8.6(a)(1) of 
     such Act (12 U.S.C. 2279aa-6(a)(1)) is amended by inserting 
     ``applicable'' before ``standards'' each place it appears in 
     subparagraphs (A) and (B)(i).
       (c) Standards for Qualified Loans.--Section 8.8 of such Act 
     (12 U.S.C. 2279aa-8) is amended--
       (1) in subsection (a)--
       (A) by striking the first sentence and inserting the 
     following:
       ``(1) In general.--The Corporation shall establish 
     underwriting, security appraisal, and repayment standards for 
     qualified loans taking into account the nature, risk profile, 
     and other differences between different categories of 
     qualified loans.
       ``(2) Supervision, examination, and report of condition.--
     The standards shall be subject to the authorities of the Farm 
     Credit Administration under section 8.11.''; and
       (B) in the last sentence, by striking ``In establishing'' 
     and inserting the following:
       ``(3) Mortgage loans.--In establishing'';
       (2) in subsection (b)--
       (A) in the matter preceding paragraph (1), by inserting 
     ``with respect to loans secured by agricultural real estate'' 
     after ``subsection (a)''; and
       (B) in paragraph (5)--
       (i) by striking ``borrower'' the first place it appears and 
     inserting ``farmer or rancher''; and
       (ii) by striking ``site'' and inserting ``farm or ranch'';
       (3) in subsection (c)(1), by inserting ``secured by 
     agricultural real estate'' after ``A loan'';
       (4) by striking subsection (d); and
       (5) by redesignating subsection (e) as subsection (d).
       (d) Risk-Based Capital Levels.--Section 8.32(a)(1) of such 
     Act (12 U.S.C. 2279bb-1(a)(1)) is amended--
       (1) by striking ``With respect'' and inserting the 
     following:
       ``(A) In general.--With respect''; and
       (2) by adding at the end the following:
       ``(B) Rural utility loans.--With respect to securities 
     representing an interest in, or obligation backed by, a pool 
     of qualified loans described in section 8.0(9)(C) owned or 
     guaranteed by the Corporation, losses occur at a rate of 
     default and severity reasonably related to risks in electric 
     and telephone facility loans (as applicable), as determined 
     by the Director.''.

     SEC. 5407. EQUALIZATION OF LOAN-MAKING POWERS OF CERTAIN 
                   DISTRICT ASSOCIATIONS.

       (a) In General.--The Farm Credit Act of 1971 is amended by 
     inserting after section 7.6 (12 U.S.C. 2279b) the following:

     ``SEC. 7.7. EQUALIZATION OF LOAN-MAKING POWERS OF CERTAIN 
                   DISTRICT ASSOCIATIONS.

       ``(a) Equalization of Loan-Making Powers.--
       ``(1) In general.--
       ``(A) Federal land bank associations.--Subject to paragraph 
     (2), any association that owns a Federal land bank 
     association authorized as of January 1, 2007, to make long-
     term loans under title I in its chartered territory within 
     the geographic area described in subsection (b) may make 
     short- and intermediate-term loans and otherwise operate as a 
     production credit association under title II within that same 
     chartered territory.
       ``(B) Production credit associations.--Subject to paragraph 
     (2), any association that under its charter has title I 
     lending authority and that owns a production credit 
     association authorized as of January 1, 2007, to make short- 
     and intermediate-term loans under title II in the geographic 
     area described in subsection (b) may make long-term loans and 
     otherwise operate, directly or through a subsidiary 
     association, as a Federal land bank association or Federal 
     land credit association under title I in the geographic area.
       ``(C) Farm credit bank.--Notwithstanding section 5.17(a), 
     the Farm Credit Bank with which any association had a written 
     financing agreement as of January 1, 2007, may make loans and 
     extend other comparable financial assistance with respect to, 
     and may purchase, any loans made under the new authority 
     provided under subparagraph (A) or (B) by an association 
     exercising such authority.
       ``(2) Required approvals.--An association may exercise the 
     additional authority provided for in paragraph (1) only after 
     the exercise of the authority is approved by--
       ``(A) the board of directors of the association; and
       ``(B) a majority of the voting stockholders of the 
     association (or, if the association is a subsidiary of 
     another association, the voting stockholders of the parent 
     association) voting, in person or by proxy, at a duly 
     authorized meeting of stockholders in accordance with the 
     process described in section 7.11.
       ``(b) Applicability.--This section applies only to 
     associations the chartered territory of which was within the 
     geographic area served by the Federal intermediate credit 
     bank immediately prior to its merger with a Farm Credit Bank 
     under section 410(e)(1) of the Agricultural Credit Act of 
     1987 (12 U.S.C. 2011 note; Public Law 100-233).''.
       (b) Charter Amendments.--Section 5.17(a) of the Farm Credit 
     Act of 1971 (12 U.S.C. 2252(a)) is amended by adding at the 
     end the following:
       ``(15)(A) Approve amendments to the charters of 
     institutions of the Farm Credit System to implement the 
     equalization of loan-making powers of a Farm Credit System 
     association under section 7.7.
       ``(B) Amendments described in subparagraph (A) to the 
     charters of an association and the related Farm Credit Bank 
     shall be approved by the Farm Credit Administration, subject 
     to any conditions of approval imposed, by not later than 30 
     days after the date on which the Farm Credit Administration 
     receives all approvals required by section 7.7(a)(2).''.
       (c) Conforming Amendments.--
       (1) Section 5.17(a)(2) of the Farm Credit Act of 1971 (12 
     U.S.C. 2252(a)(2)) is amended--
       (A) by striking ``(2)(A)'' and inserting ``(2)''; and
       (B) by striking subparagraphs (B) and (C).
       (2) Section 410 of the 1987 act.--Section 410(e)(1)(A)(iii) 
     of the Agricultural Credit Act of 1987 (12 U.S.C. 2011 note; 
     Public Law 100-233) is amended by inserting ``(except section 
     7.7 of that Act)'' after ``(12 U.S.C. 2001 et seq.)''.
       (3) Section 401 of the 1992 act.--Section 401(b) of the 
     Farm Credit Banks and Associations Safety and Soundness Act 
     of 1992 (12 U.S.C. 2011 note; Public Law 102-552) is 
     amended--
       (A) by inserting ``(except section 7.7 of the Farm Credit 
     Act of 1971)'' after ``provision of law''; and
       (B) by striking ``, subject to such limitations'' and all 
     that follows through the end of the paragraph and inserting a 
     period.
       (d) Effective Date.--The amendments made by this section 
     take effect on January 1, 2010.

                       Subtitle F--Miscellaneous

     SEC. 5501. LOANS TO PURCHASERS OF HIGHLY FRACTIONED LAND.

       The first section of Public Law 91-229 (25 U.S.C. 488) is 
     amended--
       (1) by striking ``That the Secretary'' and inserting the 
     following:

     ``SECTION 1. LOANS TO PURCHASERS OF HIGHLY FRACTIONED LAND.

       ``(a) In General.--The Secretary''; and
       (2) by adding at the end the following:
       ``(b) Highly Fractionated Land.--
       ``(1) In general.--Subject to paragraph (2), the Secretary 
     of Agriculture may make and insure loans in accordance with 
     section 309 of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 1929) to eligible purchasers of highly 
     fractionated land pursuant to section 205(c) of the Indian 
     Land Consolidation Act (25 U.S.C. 2204(c)).
       ``(2) Exclusion.--Section 4 shall not apply to trust land, 
     restricted tribal land, or tribal corporation land that is 
     mortgaged in accordance with paragraph (1).''.

                      TITLE VI--RURAL DEVELOPMENT

        Subtitle A--Consolidated Farm and Rural Development Act

     SEC. 6001. WATER, WASTE DISPOSAL, AND WASTEWATER FACILITY 
                   GRANTS.

       Section 306(a)(2)(B)(vii) of the Consolidated Farm and 
     Rural Development Act (7 U.S.C. 1926(a)(2)(B)(vii)) is 
     amended by striking ``2002 through 2007'' and inserting 
     ``2008 through 2012''.

     SEC. 6002. SEARCH GRANTS.

       (a) In General.--Section 306(a)(2) of the Consolidated Farm 
     and Rural Development Act (7 U.S.C. 1926(a)(2)) is amended by 
     adding at the end the following:
       ``(C) Special evaluation assistance for rural communities 
     and households program.--
       ``(i) In general.--The Secretary may establish the Special 
     Evaluation Assistance for Rural Communities and Households 
     (SEARCH) program, to make predevelopment planning grants

[[Page H3480]]

     for feasibility studies, design assistance, and technical 
     assistance, to financially distressed communities in rural 
     areas with populations of 2,500 or fewer inhabitants for 
     water and waste disposal projects described in paragraph (1), 
     this paragraph, and paragraph (24).
       ``(ii) Terms.--

       ``(I) Documentation.--With respect to grants made under 
     this subparagraph, the Secretary shall require the lowest 
     amount of documentation practicable.
       ``(II) Matching.--Notwithstanding any other provisions in 
     this subsection, the Secretary may fund up to 100 percent of 
     the eligible costs of grants provided under this 
     subparagraph, as determined by the Secretary.

       ``(iii) Funding.--The Secretary may use not more than 4 
     percent of the total amount of funds made available for a 
     fiscal year for water, waste disposal, and essential 
     community facility activities under this title to carry out 
     this subparagraph.
       ``(iv) Relationship to other authority.--The funds and 
     authorities provided under this subparagraph are in addition 
     to any other funds or authorities the Secretary may have to 
     carry out activities described in clause (i).''.
       (b) Conforming Amendment.--Subtitle D of title VI of the 
     Farm Security and Rural Investment Act of 2002 (7 U.S.C. 
     2009ee et seq.) is repealed.

     SEC. 6003. RURAL BUSINESS OPPORTUNITY GRANTS.

       Section 306(a)(11)(D) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 1926(a)(11)(D)) is amended by 
     striking ``1996 through 2007'' and inserting ``2008 through 
     2012''.

     SEC. 6004. CHILD DAY CARE FACILITY GRANTS, LOANS, AND LOAN 
                   GUARANTEES.

       Section 306(a)(19)(C)(ii) of the Consolidated Farm and 
     Rural Development Act (7 U.S.C. 1926(a)(19)(C)(ii)) is 
     amended by striking ``April'' and inserting ``June''.

     SEC. 6005. COMMUNITY FACILITY GRANTS TO ADVANCE BROADBAND.

       Section 306(a)(20)(E) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 1926(a)(20)(E)) is amended--
       (1) by striking ``state'' and inserting ``State''; and
       (2) by striking ``dial-up Internet access or''.

     SEC. 6006. RURAL WATER AND WASTEWATER CIRCUIT RIDER PROGRAM.

       Section 306(a)(22)(C) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 1926(a)(22)(C)) is amended by 
     striking ``$15,000,000 for fiscal year 2003'' and inserting 
     ``$25,000,000 for fiscal year 2008''.

     SEC. 6007. TRIBAL COLLEGE AND UNIVERSITY ESSENTIAL COMMUNITY 
                   FACILITIES.

       Section 306(a)(25) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 1926(a)(25)) is amended--
       (1) in subparagraph (A)--
       (A) by striking ``tribal colleges and universities'' and 
     inserting ``an entity that is a Tribal College or 
     University''; and
       (B) by striking ``tribal college or university'' and 
     inserting ``Tribal College or University'';
       (2) by striking subparagraph (B) and inserting the 
     following:
       ``(B) Federal share.--The Secretary shall establish the 
     maximum percentage of the cost of the facility that may be 
     covered by a grant under this paragraph, except that the 
     Secretary may not require non-Federal financial support in an 
     amount that is greater than 5 percent of the total cost of 
     the facility.''; and
       (3) in subparagraph (C), by striking ``2003 through 2007'' 
     and inserting ``2008 through 2012''.

     SEC. 6008. EMERGENCY AND IMMINENT COMMUNITY WATER ASSISTANCE 
                   GRANT PROGRAM.

       Section 306A(i)(2) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 1926a(i)(2)) is amended by striking 
     ``2003 through 2007'' and inserting ``2008 through 2012''.

     SEC. 6009. WATER SYSTEMS FOR RURAL AND NATIVE VILLAGES IN 
                   ALASKA.

       (a) In General.--Section 306D(d)(1) of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1926d(d)(1)) is 
     amended by striking ``2001 through 2007'' and inserting 
     ``2008 through 2012''.
       (b) Rural Communities Assistance.--Section 4009 of the 
     Solid Waste Disposal Act (42 U.S.C. 6949) is amended by 
     adding at the end the following:
       ``(e) Additional Appropriations.--
       ``(1) In general.--There are authorized to be appropriated 
     to carry out this section for the Denali Commission to 
     provide assistance to municipalities in the State of Alaska 
     $1,500,000 for each of fiscal years 2008 through 2012.
       ``(2) Administration.--For the purpose of carrying out this 
     subsection, the Denali Commission shall--
       ``(A) be considered a State; and
       ``(B) comply with all other requirements and limitations of 
     this section.''.

     SEC. 6010. GRANTS TO NONPROFIT ORGANIZATIONS TO FINANCE THE 
                   CONSTRUCTION, REFURBISHING, AND SERVICING OF 
                   INDIVIDUALLY-OWNED HOUSEHOLD WATER WELL SYSTEMS 
                   IN RURAL AREAS FOR INDIVIDUALS WITH LOW OR 
                   MODERATE INCOMES.

       Section 306E of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 1926e) is amended--
       (1) in subsection (b)(2)(C), by striking ``$8,000'' and 
     inserting ``$11,000''; and
       (2) in subsection (d), by striking ``2003 through 2007'' 
     and inserting ``2008 through 2012''.

     SEC. 6011. INTEREST RATES FOR WATER AND WASTE DISPOSAL 
                   FACILITIES LOANS.

       Section 307(a)(3) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 1927(a)(3)) is amended by adding at 
     the end the following:
       ``(E) Interest rates for water and waste disposal 
     facilities loans.--
       ``(i) In general.--Except as provided in clause (ii) and 
     notwithstanding subparagraph (A), in the case of a direct 
     loan for a water or waste disposal facility--

       ``(I) in the case of a loan that would be subject to the 5 
     percent interest rate limitation under subparagraph (A), the 
     Secretary shall establish the interest rate at a rate that is 
     equal to 60 percent of the current market yield for 
     outstanding municipal obligations with remaining periods to 
     maturity comparable to the average maturity of the loan, 
     adjusted to the nearest \1/8\ of 1 percent; and
       ``(II) in the case of a loan that would be subject to the 7 
     percent limitation under subparagraph (A), the Secretary 
     shall establish the interest rate at a rate that is equal to 
     80 percent of the current market yield for outstanding 
     municipal obligations with remaining periods to maturity 
     comparable to the average maturity of the loan, adjusted to 
     the nearest \1/8\ of 1 percent.

       ``(ii) Exception.--Clause (i) does not apply to a loan for 
     a specific project that is the subject of a loan that has 
     been approved, but not closed, as of the date of enactment of 
     this subparagraph.''.

     SEC. 6012. COOPERATIVE EQUITY SECURITY GUARANTEE.

       (a) In General.--Section 310B of the Consolidated Farm and 
     Rural Development Act (7 U.S.C. 1932) is amended--
       (1) by striking ``sec. 310B. (a)'' and inserting the 
     following:

     ``SEC. 310B. ASSISTANCE FOR RURAL ENTITIES.

       ``(a) Loans to Private Business Enterprises.--
       ``(1) Definitions.--In this subsection:'';
       (2) in subsection (a)--
       (A) by moving the second and fourth sentences so as to 
     appear as the second and first sentences, respectively;
       (B) in the sentence beginning ``As used in this subsection, 
     the'' (as moved by subparagraph (A)), by striking ``As used 
     in this subsection, the'' and inserting the following:
       ``(A) Aquaculture.--The'';
       (C) in the sentence beginning ``For the purposes of this 
     subsection, the'', by striking ``For the purposes of this 
     subsection, the'' and inserting the following:
       ``(B) Solar energy.--The'';
       (D) in the sentence beginning ``The Secretary may also''--
       (i) by striking ``The Secretary may also'' and inserting 
     the following:
       ``(2) Loan purposes.--The Secretary may'';
       (ii) by inserting ``and private investment funds that 
     invest primarily in cooperative organizations'' after ``or 
     nonprofit'';
       (iii) by striking ``of (1) improving'' and inserting ``of--
       ``(A) improving'';
       (iv) by striking ``control, (2) the'' and inserting 
     ``control;
       ``(B) the'';
       (v) by striking ``areas, (3) reducing'' and inserting 
     ``areas;
       ``(C) reducing'';
       (vi) by striking ``areas, and (4) to'' and inserting 
     ``areas; and
       ``(D) to'';
       (E) in the sentence beginning ``Such loans,'', by striking 
     ``Such loans,'' and inserting the following:
       ``(3) Loan guarantees.--Loans described in paragraph 
     (2),''; and
       (F) in the last sentence, by striking ``No loan'' and 
     inserting the following:
       ``(4) Maximum amount of principal.--No loan''; and
       (3) in subsection (g)--
       (A) in paragraph (1), by inserting ``, including guarantees 
     described in paragraph (3)(A)(ii)'' before the period at the 
     end;
       (B) in paragraph (3)(A)--
       (i) by striking ``(A) In general.--The Secretary'' and 
     inserting the following:
       ``(A) Eligibility.--
       ``(i) In general.--The Secretary''; and
       (ii) by adding at the end the following:
       ``(ii) Equity.--The Secretary may guarantee a loan made for 
     the purchase of preferred stock or similar equity issued by a 
     cooperative organization or a fund that invests primarily in 
     cooperative organizations, if the guarantee significantly 
     benefits 1 or more entities eligible for assistance for the 
     purposes described in subsection (a)(1), as determined by the 
     Secretary.''; and
       (C) in paragraph (8)(A)(ii), by striking ``a project--'' 
     and all that follows through the end of subclause (II) and 
     inserting ``a project that--

       ``(I)(aa) is in a rural area; and
       ``(bb) provides for the value-added processing of 
     agricultural commodities; or
       ``(II) significantly benefits 1 or more entities eligible 
     for assistance for the purposes described in subsection 
     (a)(1), as determined by the Secretary.''.

       (b) Conforming Amendments.--
       (1) Section 307(a)(6)(B) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 1927(a)(6)(B)) is amended by 
     striking clause (ii) and inserting the following:
       ``(ii) section 310B(a)(2)(A); and''.
       (2) Section 310B(g) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 1932(g)) is amended by striking 
     ``subsection (a)(1)'' each place it appears in paragraphs 
     (1), (6)(A)(iii), and (8)(C) and inserting ``subsection 
     (a)(2)(A)''.
       (3) Section 333A(g)(1)(B) of the Consolidated Farm and 
     Rural Development Act (7 U.S.C. 1983a(g)(1)(B)) is amended by 
     striking ``section 310B(a)(1)'' and inserting ``section 
     310B(a)(2)(A)''.
       (4) Section 381E(d)(3)(B) of the Consolidated Farm and 
     Rural Development Act (7 U.S.C. 2009d(d)(3)(B)) is amended by 
     striking ``section 310B(a)(1)'' and inserting ``section 
     310B(a)(2)(A)''.

[[Page H3481]]

     SEC. 6013. RURAL COOPERATIVE DEVELOPMENT GRANTS.

       (a) Eligibility.--Section 310B(e)(5) of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1932(e)(5)) is 
     amended--
       (1) in subparagraph (A), by striking ``administering a 
     nationally coordinated, regionally or State-wide operated 
     project'' and inserting ``carrying out activities to promote 
     and assist the development of cooperatively and mutually 
     owned businesses'';
       (2) in subparagraph (B), by inserting ``to promote and 
     assist the development of cooperatively and mutually owned 
     businesses'' before the semicolon;
       (3) by striking subparagraph (D);
       (4) by redesignating subparagraph (E) as subparagraph (D);
       (5) in subparagraph (D) (as so redesignated), by striking 
     ``and'' at the end;
       (6) by inserting after subparagraph (D) (as so 
     redesignated) the following:
       ``(E) demonstrate a commitment to--
       ``(i) networking with and sharing the results of the 
     efforts of the center with other cooperative development 
     centers and other organizations involved in rural economic 
     development efforts; and
       ``(ii) developing multiorganization and multistate 
     approaches to addressing the economic development and 
     cooperative needs of rural areas; and''; and
       (7) in subparagraph (F), by striking ``providing greater 
     than'' and inserting ``providing''.
       (b) Authority to Award Multiyear Grants.--Section 310B(e) 
     of the Consolidated Farm and Rural Development Act (7 U.S.C. 
     1932(e)) is amended by striking paragraph (6) and inserting 
     the following:
       ``(6) Grant period.--
       ``(A) In general.--A grant awarded to a center that has 
     received no prior funding under this subsection shall be made 
     for a period of 1 year.
       ``(B) Multiyear grants.--If the Secretary determines it to 
     be in the best interest of the program, the Secretary shall 
     award grants for a period of more than 1 year, but not more 
     than 3 years, to a center that has successfully met the 
     parameters described in paragraph (5), as determined by the 
     Secretary.''.
       (c) Authority to Extend Grant Period.--Section 310B(e) of 
     the Consolidated Farm and Rural Development Act (7 U.S.C. 
     1932(e)) is amended--
       (1) by redesignating paragraphs (7), (8), and (9) as 
     paragraphs (8), (9), and (12), respectively; and
       (2) by inserting after paragraph (6) the following:
       ``(7) Authority to extend grant period.--The Secretary may 
     extend for 1 additional 12-month period the period in which a 
     grantee may use a grant made under this subsection.''.
       (d) Cooperative Research Program.--Section 310B(e) of the 
     Consolidated Farm and Rural Development Act (7 U.S.C. 
     1932(e)) is amended by inserting after paragraph (9) (as 
     redesignated by subsection (c)(1)) the following:
       ``(10) Cooperative research program.--The Secretary shall 
     enter into a cooperative research agreement with 1 or more 
     qualified academic institutions in each fiscal year to 
     conduct research on the effects of all types of cooperatives 
     on the national economy.''.
       (e) Addressing Needs of Minority Communities.--Section 
     310B(e) of the Consolidated Farm and Rural Development Act (7 
     U.S.C. 1932(e)) is amended by inserting after paragraph (10) 
     (as added by subsection (d)) the following:
       ``(11) Addressing needs of minority communities.--
       ``(A) Definition of socially disadvantaged group.--In this 
     paragraph, the term `socially disadvantaged group' has the 
     meaning given the term in section 355(e).
       ``(B) Reservation of funds.--
       ``(i) In general.--If the total amount appropriated under 
     paragraph (12) for a fiscal year exceeds $7,500,000, the 
     Secretary shall reserve an amount equal to 20 percent of the 
     total amount appropriated for grants for cooperative 
     development centers, individual cooperatives, or groups of 
     cooperatives--

       ``(I) that serve socially disadvantaged groups; and
       ``(II) a majority of the boards of directors or governing 
     boards of which are comprised of individuals who are members 
     of socially disadvantaged groups.

       ``(ii) Insufficient applications.--To the extent there are 
     insufficient applications to carry out clause (i), the 
     Secretary shall use the funds as otherwise authorized by this 
     subsection.''.
       (f) Authorization of Appropriations.--Paragraph (12) of 
     section 310B(e) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 1932(e)) (as redesignated by 
     subsection (c)(1)) is amended by striking ``1996 through 
     2007'' and inserting ``2008 through 2012''.

     SEC. 6014. GRANTS TO BROADCASTING SYSTEMS.

       Section 310B(f)(3) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 1932(f)(3)) is amended by striking 
     ``2002 through 2007'' and inserting ``2008 through 2012''.

     SEC. 6015. LOCALLY OR REGIONALLY PRODUCED AGRICULTURAL FOOD 
                   PRODUCTS.

       Section 310B(g) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 1932(g)) is amended by adding at 
     the end the following:
       ``(9) Locally or regionally produced agricultural food 
     products.--
       ``(A) Definitions.--In this paragraph:
       ``(i) Locally or regionally produced agricultural food 
     product.--The term `locally or regionally produced 
     agricultural food product' means any agricultural food 
     product that is raised, produced, and distributed in--

       ``(I) the locality or region in which the final product is 
     marketed, so that the total distance that the product is 
     transported is less than 400 miles from the origin of the 
     product; or
       ``(II) the State in which the product is produced.

       ``(ii) Underserved community.--The term `underserved 
     community' means a community (including an urban or rural 
     community and an Indian tribal community) that has, as 
     determined by the Secretary--

       ``(I) limited access to affordable, healthy foods, 
     including fresh fruits and vegetables, in grocery retail 
     stores or farmer-to-consumer direct markets; and
       ``(II) a high rate of hunger or food insecurity or a high 
     poverty rate.

       ``(B) Loan and loan guarantee program.--
       ``(i) In general.--The Secretary shall make or guarantee 
     loans to individuals, cooperatives, cooperative 
     organizations, businesses, and other entities to establish 
     and facilitate enterprises that process, distribute, 
     aggregate, store, and market locally or regionally produced 
     agricultural food products to support community development 
     and farm and ranch income.
       ``(ii) Requirement.--The recipient of a loan or loan 
     guarantee under clause (i) shall include in an appropriate 
     agreement with retail and institutional facilities to which 
     the recipient sells locally or regionally produced 
     agricultural food products a requirement to inform consumers 
     of the retail or institutional facilities that the consumers 
     are purchasing or consuming locally or regionally produced 
     agricultural food products.
       ``(iii) Priority.--In making or guaranteeing a loan under 
     clause (i), the Secretary shall give priority to projects 
     that have components benefitting underserved communities.
       ``(iv) Reports.--Not later than 2 years after the date of 
     enactment of this paragraph and annually thereafter, the 
     Secretary shall submit to the Committee on Agriculture of the 
     House of Representatives and the Committee on Agriculture, 
     Nutrition, and Forestry of the Senate a report that describes 
     projects carried out using loans or loan guarantees made 
     under clause (i), including--

       ``(I) the characteristics of the communities served; and
       ``(II) resulting benefits.

       ``(v) Reservation of funds.--

       ``(I) In general.--For each of fiscal years 2008 through 
     2012, the Secretary shall reserve not less than 5 percent of 
     the funds made available to carry out this subsection to 
     carry out this subparagraph.
       ``(II) Availability of funds.--Funds reserved under 
     subclause (I) for a fiscal year shall be reserved until April 
     1 of the fiscal year.''.

     SEC. 6016. APPROPRIATE TECHNOLOGY TRANSFER FOR RURAL AREAS.

       Section 310B of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 1932) is amended by adding at the end the 
     following:
       ``(i) Appropriate Technology Transfer for Rural Areas 
     Program.--
       ``(1) Definition of national nonprofit agricultural 
     assistance institution.--In this subsection, the term 
     `national nonprofit agricultural assistance institution' 
     means an organization that--
       ``(A) is described in section 501(c)(3) of the Internal 
     Revenue Code of 1986 and exempt from taxation under 501(a) of 
     that Code;
       ``(B) has staff and offices in multiple regions of the 
     United States;
       ``(C) has experience and expertise in operating national 
     agriculture technical assistance programs;
       ``(D) expands markets for the agricultural commodities 
     produced by producers through the use of practices that 
     enhance the environment, natural resource base, and quality 
     of life; and
       ``(E) improves the economic viability of agricultural 
     operations.
       ``(2) Establishment.--The Secretary shall establish a 
     national appropriate technology transfer for rural areas 
     program to assist agricultural producers that are seeking 
     information to--
       ``(A) reduce input costs;
       ``(B) conserve energy resources;
       ``(C) diversify operations through new energy crops and 
     energy generation facilities; and
       ``(D) expand markets for agricultural commodities produced 
     by the producers by using practices that enhance the 
     environment, natural resource base, and quality of life.
       ``(3) Implementation.--
       ``(A) In general.--The Secretary shall carry out the 
     program under this subsection by making a grant to, or 
     offering to enter into a cooperative agreement with, a 
     national nonprofit agricultural assistance institution.
       ``(B) Grant amount.--A grant made, or cooperative agreement 
     entered into, under subparagraph (A) shall provide 100 
     percent of the cost of providing information described in 
     paragraph (2).
       ``(4) Authorization of appropriations.--There are 
     authorized to be appropriated to carry out this subsection 
     $5,000,000 for each of fiscal years 2008 through 2012.''.

     SEC. 6017. RURAL ECONOMIC AREA PARTNERSHIP ZONES.

       Section 310B of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 1932) (as amended by section 6016) is amended 
     by adding at the end the following:
       ``(j) Rural Economic Area Partnership Zones.--Effective 
     beginning on the date of enactment of this subsection through 
     September 30, 2012, the Secretary shall carry out those rural 
     economic area partnership zones administratively in effect on 
     the date of enactment of this subsection in accordance with 
     the terms and conditions contained in the memorandums of 
     agreement entered into by the Secretary for the rural 
     economic area partnership zones, except as otherwise provided 
     in this subsection.''.

     SEC. 6018. DEFINITIONS.

       (a) Rural Area.--Section 343(a) of the Consolidated Farm 
     and Rural Development Act (7 U.S.C. 1991(a)) is amended by 
     striking paragraph (13) and inserting the following:

[[Page H3482]]

       ``(13) Rural and rural area.--
       ``(A) In general.--Subject to subparagraphs (B) through 
     (G), the terms `rural' and `rural area' mean any area other 
     than--
       ``(i) a city or town that has a population of greater than 
     50,000 inhabitants; and
       ``(ii) any urbanized area contiguous and adjacent to a city 
     or town described in clause (i).
       ``(B) Water and waste disposal grants and direct and 
     guaranteed loans.--For the purpose of water and waste 
     disposal grants and direct and guaranteed loans provided 
     under paragraphs (1), (2), and (24) of section 306(a), the 
     terms `rural' and `rural area' mean a city, town, or 
     unincorporated area that has a population of no more than 
     10,000 inhabitants.
       ``(C) Community facility loans and grants.--For the purpose 
     of community facility direct and guaranteed loans and grants 
     under paragraphs (1), (19), (20), (21), and (24) of section 
     306(a), the terms `rural' and `rural area' mean any area 
     other than a city, town, or unincorporated area that has a 
     population of greater than 20,000 inhabitants.
       ``(D) Areas rural in character.--
       ``(i) Application.--This subparagraph applies to--

       ``(I) an urbanized area described in subparagraphs (A)(ii) 
     and (F) that--

       ``(aa) has 2 points on its boundary that are at least 40 
     miles apart; and
       ``(bb) is not contiguous or adjacent to a city or town that 
     has a population of greater than 150,000 inhabitants or an 
     urbanized area of such city or town; and

       ``(II) an area within an urbanized area described in 
     subparagraphs (A)(ii) and (F) that is within \1/4\-mile of a 
     rural area described in subparagraph (A).

       ``(ii) Determination.--Notwithstanding any other provision 
     of this paragraph, on the petition of a unit of local 
     government in an area described in clause (i) or on the 
     initiative of the Under Secretary for Rural Development, the 
     Under Secretary may determine that a part of an area 
     described in clause (i) is a rural area for the purposes of 
     this paragraph, if the Under Secretary finds that the part is 
     rural in character, as determined by the Under Secretary.
       ``(iii) Administration.--In carrying out this subparagraph, 
     the Under Secretary for Rural Development shall--

       ``(I) not delegate the authority to carry out this 
     subparagraph;
       ``(II) consult with the applicable rural development State 
     or regional director of the Department of Agriculture and the 
     governor of the respective State;
       ``(III) provide to the petitioner an opportunity to appeal 
     to the Under Secretary a determination made under this 
     subparagraph;
       ``(IV) release to the public notice of a petition filed or 
     initiative of the Under Secretary under this subparagraph not 
     later than 30 days after receipt of the petition or the 
     commencement of the initiative, as appropriate;
       ``(V) make a determination under this subparagraph not less 
     than 15 days, and not more than 60 days, after the release of 
     the notice under subclause (IV);
       ``(VI) submit to the Committee on Agriculture of the House 
     of Representatives and the Committee on Agriculture, 
     Nutrition, and Forestry of the Senate an annual report on 
     actions taken to carry out this subparagraph; and
       ``(VII) terminate a determination under this subparagraph 
     that part of an area is a rural area on the date that data is 
     available for the next decennial census conducted under 
     section 141(a) of title 13, United States Code.

       ``(E) Exclusions.--Notwithstanding any other provision of 
     this paragraph, in determining which census blocks in an 
     urbanized area are not in a rural area (as defined in this 
     paragraph), the Secretary shall exclude any cluster of census 
     blocks that would otherwise be considered not in a rural area 
     only because the cluster is adjacent to not more than 2 
     census blocks that are otherwise considered not in a rural 
     area under this paragraph.
       ``(F) Urban area growth.--
       ``(i) Application.--This subparagraph applies to--

       ``(I) any area that--

       ``(aa) is a collection of census blocks that are contiguous 
     to each other;
       ``(bb) has a housing density that the Secretary estimates 
     is greater than 200 housing units per square mile; and
       ``(cc) is contiguous or adjacent to an existing boundary of 
     a rural area; and

       ``(II) any urbanized area contiguous and adjacent to a city 
     or town described in subparagraph (A)(i).

       ``(ii) Adjustments.--The Secretary may, by regulation only, 
     consider--

       ``(I) an area described in clause (i)(I) not to be a rural 
     area for purposes of subparagraphs (A) and (C); and
       ``(II) an area described in clause (i)(II) not to be a 
     rural area for purposes of subparagraph (C).

       ``(iii) Appeals.--A program applicant may appeal an 
     estimate made under clause (i)(I) based on appropriate data 
     for an area, as determined by the Secretary.
       ``(G) Hawaii and puerto rico.--Notwithstanding any other 
     provision of this paragraph, within the areas of the County 
     of Honolulu, Hawaii, and the Commonwealth of Puerto Rico, the 
     Secretary may designate any part of the areas as a rural area 
     if the Secretary determines that the part is not urban in 
     character, other than any area included in the Honolulu 
     Census Designated Place or the San Juan Census Designated 
     Place.''.
       (b) Report.--Not later than 2 years after the date of 
     enactment of this Act, the Secretary shall prepare and submit 
     to the Committee on Agriculture of the House of 
     Representatives and the Committee on Agriculture, Nutrition, 
     and Forestry of the Senate a report that--
       (1) assesses the various definitions of the term ``rural'' 
     and ``rural area'' that are used with respect to programs 
     administered by the Secretary;
       (2) describes the effects that the variations in those 
     definitions have on those programs;
       (3) make recommendations for ways to better target funds 
     provided through rural development programs; and
       (4) determines the effect of the amendment made by 
     subsection (a) on the level of rural development funding and 
     participation in those programs in each State.

     SEC. 6019. NATIONAL RURAL DEVELOPMENT PARTNERSHIP.

       Section 378 of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 2008m) is amended--
       (1) in subsection (g)(1), by striking ``2003 through 2007'' 
     and inserting ``2008 through 2012''; and
       (2) in subsection (h), by striking ``the date that is 5 
     years after the date of enactment of this section'' and 
     inserting ``September 30, 2012''.

     SEC. 6020. HISTORIC BARN PRESERVATION.

       (a) Grant Priority.--Section 379A(c) of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 2008o(c)) is 
     amended--
       (1) in paragraph (2)--
       (A) in subparagraphs (A) and (B), by striking ``a historic 
     barn'' each place it appears and inserting ``historic 
     barns''; and
       (B) in subparagraph (C), by striking ``on a historic barn'' 
     and inserting ``on historic barns (including surveys)'';
       (2) by redesignating paragraphs (3) and (4) as paragraphs 
     (4) and (5), respectively; and
       (3) by inserting after paragraph (2) the following:
       ``(3) Priority.--In making grants under this subsection, 
     the Secretary shall give the highest priority to funding 
     projects described in paragraph (2)(C).''.
       (b) Authorization of Appropriations.--Section 379A(c)(5) of 
     the Consolidated Farm and Rural Development Act (7 U.S.C. 
     2008o(c)(5)) (as redesignated by subsection (a)(2)) is 
     amended by striking ``2002 through 2007'' and inserting 
     ``2008 through 2012''.

     SEC. 6021. GRANTS FOR NOAA WEATHER RADIO TRANSMITTERS.

       Section 379B(d) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 2008p(d)) is amended by striking 
     ``2002 through 2007'' and inserting ``2008 through 2012''.

     SEC. 6022. RURAL MICROENTREPRENEUR ASSISTANCE PROGRAM.

       Subtitle D of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 1981 et seq.) is amended by adding at the end 
     the following:

     ``SEC. 379E. RURAL MICROENTREPRENEUR ASSISTANCE PROGRAM.

       ``(a) Definitions.--In this section:
       ``(1) Indian tribe.--The term `Indian tribe' has the 
     meaning given the term in section 4 of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 450b).
       ``(2) Microentrepreneur.--The term `microentrepreneur' 
     means an owner and operator, or prospective owner and 
     operator, of a rural microenterprise who is unable to obtain 
     sufficient training, technical assistance, or credit other 
     than under this section, as determined by the Secretary.
       ``(3) Microenterprise development organization.--The term 
     `microenterprise development organization' means an 
     organization that--
       ``(A) is--
       ``(i) a nonprofit entity;
       ``(ii) an Indian tribe, the tribal government of which 
     certifies to the Secretary that--

       ``(I) no microenterprise development organization serves 
     the Indian tribe; and
       ``(II) no rural microentrepreneur assistance program exists 
     under the jurisdiction of the Indian tribe; or

       ``(iii) a public institution of higher education;
       ``(B) provides training and technical assistance to rural 
     microentrepreneurs;
       ``(C) facilitates access to capital or another service 
     described in subsection (b) for rural microenterprises; and
       ``(D) has a demonstrated record of delivering services to 
     rural microentrepreneurs, or an effective plan to develop a 
     program to deliver services to rural microentrepreneurs, as 
     determined by the Secretary.
       ``(4) Microloan.--The term `microloan' means a business 
     loan of not more than $50,000 that is provided to a rural 
     microenterprise.
       ``(5) Program.--The term `program' means the rural 
     microentrepreneur assistance program established under 
     subsection (b).
       ``(6) Rural microenterprise.--The term `rural 
     microenterprise' means--
       ``(A) a sole proprietorship located in a rural area; or
       ``(B) a business entity with not more than 10 full-time-
     equivalent employees located in a rural area.
       ``(b) Rural Microentrepreneur Assistance Program.--
       ``(1) Establishment.--The Secretary shall establish a rural 
     microentrepreneur assistance program to provide loans and 
     grants to support microentrepreneurs in the development and 
     ongoing success of rural microenterprises.
       ``(2) Purpose.--The purpose of the program is to provide 
     microentrepreneurs with--
       ``(A) the skills necessary to establish new rural 
     microenterprises; and
       ``(B) continuing technical and financial assistance related 
     to the successful operation of rural microenterprises.
       ``(3) Loans.--
       ``(A) In general.--The Secretary shall make loans to 
     microenterprise development organizations for the purpose of 
     providing fixed interest rate microloans to 
     microentrepreneurs for startup and growing rural 
     microenterprises.

[[Page H3483]]

       ``(B) Loan terms.--A loan made by the Secretary to a 
     microenterprise development organization under this paragraph 
     shall--
       ``(i) be for a term not to exceed 20 years; and
       ``(ii) bear an annual interest rate of at least 1 percent.
       ``(C) Loan loss reserve fund.--The Secretary shall require 
     each microenterprise development organization that receives a 
     loan under this paragraph to--
       ``(i) establish a loan loss reserve fund; and
       ``(ii) maintain the reserve fund in an amount equal to at 
     least 5 percent of the outstanding balance of such loans owed 
     by the microenterprise development organization, until all 
     obligations owed to the Secretary under this paragraph are 
     repaid.
       ``(D) Deferral of interest and principal.--The Secretary 
     may permit the deferral of payments on principal and interest 
     due on a loan to a microenterprise development organization 
     made under this paragraph for a 2-year period beginning on 
     the date the loan is made.
       ``(4) Grants.--
       ``(A) Grants to support rural microenterprise 
     development.--
       ``(i) In general.--The Secretary shall make grants to 
     microenterprise development organizations to--

       ``(I) provide training, operational support, business 
     planning, and market development assistance, and other 
     related services to rural microentrepreneurs; and
       ``(II) carry out such other projects and activities as the 
     Secretary determines appropriate to further the purposes of 
     the program.

       ``(ii) Selection.--In making grants under clause (i), the 
     Secretary shall--

       ``(I) place an emphasis on microenterprise development 
     organizations that serve microentrepreneurs that are located 
     in rural areas that have suffered significant outward 
     migration, as determined by the Secretary; and
       ``(II) ensure, to the maximum extent practicable, that 
     grant recipients include microenterprise development 
     organizations--

       ``(aa) of varying sizes; and
       ``(bb) that serve racially and ethnically diverse 
     populations.
       ``(B) Grants to assist microentrepreneurs.--
       ``(i) In general.--The Secretary shall make grants to 
     microenterprise development organizations to provide 
     marketing, management, and other technical assistance to 
     microentrepreneurs that--

       ``(I) received a loan from the microenterprise development 
     organization under paragraph (3); or
       ``(II) are seeking a loan from the microenterprise 
     development organization under paragraph (3).

       ``(ii) Maximum amount of grant.--A microenterprise 
     development organization shall be eligible to receive an 
     annual grant under this subparagraph in an amount equal to 
     not more than 25 percent of the total outstanding balance of 
     microloans made by the microenterprise development 
     organization under paragraph (3), as of the date the grant is 
     awarded.
       ``(C) Administrative expenses.--Not more than 10 percent of 
     a grant received by a microenterprise development 
     organization for a fiscal year under this paragraph may be 
     used to pay administrative expenses.
       ``(c) Administration.--
       ``(1) Cost share.--
       ``(A) Federal share.--Subject to subparagraph (B), the 
     Federal share of the cost of a project funded under this 
     section shall not exceed 75 percent.
       ``(B) Matching requirement.--As a condition of any grant 
     made under this subparagraph, the Secretary shall require the 
     microenterprise development organization to match not less 
     than 15 percent of the total amount of the grant in the form 
     of matching funds, indirect costs, or in-kind goods or 
     services.
       ``(C) Form of non-federal share.--The non-Federal share of 
     the cost of a project funded under this section may be 
     provided--
       ``(i) in cash (including through fees, grants (including 
     community development block grants), and gifts); or
       ``(ii) in the form of in-kind contributions.
       ``(2) Oversight.--At a minimum, not later than December 1 
     of each fiscal year, a microenterprise development 
     organization that receives a loan or grant under this section 
     shall provide to the Secretary such information as the 
     Secretary may require to ensure that assistance provided 
     under this section is used for the purposes for which the 
     loan or grant was made.
       ``(d) Funding.--
       ``(1) Mandatory funding.--Of the funds of the Commodity 
     Credit Corporation, the Secretary shall use to carry out this 
     section, to remain available until expended--
       ``(A) $4,000,000 for each of fiscal years 2009 through 
     2011; and
       ``(B) $3,000,000 for fiscal year 2012.
       ``(2) Discretionary funding.--In addition to amounts made 
     available under paragraph (1), there are authorized to be 
     appropriated to carry out this section $40,000,000 for each 
     of fiscal years 2009 through 2012.''.

     SEC. 6023. GRANTS FOR EXPANSION OF EMPLOYMENT OPPORTUNITIES 
                   FOR INDIVIDUALS WITH DISABILITIES IN RURAL 
                   AREAS.

       Subtitle D of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 1981 et seq.) (as amended by section 6022) is 
     amended by adding at the end the following:

     ``SEC. 379F. GRANTS FOR EXPANSION OF EMPLOYMENT OPPORTUNITIES 
                   FOR INDIVIDUALS WITH DISABILITIES IN RURAL 
                   AREAS.

       ``(a) Definitions.--In this section:
       ``(1) Individual with a disability.--The term `individual 
     with a disability' means an individual with a disability (as 
     defined in section 3 of the Americans with Disabilities Act 
     of 1990 (42 U.S.C. 12102)).
       ``(2) Individuals with disabilities.--The term `individuals 
     with disabilities' means more than 1 individual with a 
     disability.
       ``(b) Grants.--The Secretary shall make grants to nonprofit 
     organizations, or to a consortium of nonprofit organizations, 
     to expand and enhance employment opportunities for 
     individuals with disabilities in rural areas.
       ``(c) Eligibility.--To be eligible to receive a grant under 
     this section, a nonprofit organization or consortium of 
     nonprofit organizations shall have--
       ``(1) a significant focus on serving the needs of 
     individuals with disabilities;
       ``(2) demonstrated knowledge and expertise in--
       ``(A) employment of individuals with disabilities; and
       ``(B) advising private entities on accessibility issues 
     involving individuals with disabilities;
       ``(3) expertise in removing barriers to employment for 
     individuals with disabilities, including access to 
     transportation, assistive technology, and other 
     accommodations; and
       ``(4) existing relationships with national organizations 
     focused primarily on the needs of rural areas.
       ``(d) Uses.--A grant received under this section may be 
     used only to expand or enhance--
       ``(1) employment opportunities for individuals with 
     disabilities in rural areas by developing national technical 
     assistance and education resources to assist small businesses 
     in a rural area to recruit, hire, accommodate, and employ 
     individuals with disabilities; and
       ``(2) self-employment and entrepreneurship opportunities 
     for individuals with disabilities in a rural area.
       ``(e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $2,000,000 for 
     each of fiscal years 2008 through 2012.''.

     SEC. 6024. HEALTH CARE SERVICES.

       Subtitle D of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 1981 et seq.) (as amended by section 6023) is 
     amended by adding at the end the following:

     ``SEC. 379G. HEALTH CARE SERVICES.

       ``(a) Purpose.--The purpose of this section is to address 
     the continued unmet health needs in the Delta region through 
     cooperation among health care professionals, institutions of 
     higher education, research institutions, and other 
     individuals and entities in the region.
       ``(b) Definition of Eligible Entity.--In this section, the 
     term `eligible entity' means a consortium of regional 
     institutions of higher education, academic health and 
     research institutes, and economic development entities 
     located in the Delta region that have experience in 
     addressing the health care issues in the region.
       ``(c) Grants.--To carry out the purpose described in 
     subsection (a), the Secretary may award a grant to an 
     eligible entity for -
       ``(1) the development of -
       ``(A) health care services;
       ``(B) health education programs; and
       ``(C) health care job training programs; and
       ``(2) the development and expansion of public health-
     related facilities in the Delta region to address 
     longstanding and unmet health needs of the region.
       ``(d) Use.--As a condition of the receipt of the grant, the 
     eligible entity shall use the grant to fund projects and 
     activities described in subsection (c), based on input 
     solicited from local governments, public health care 
     providers, and other entities in the Delta region.
       ``(e) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Secretary to carry out this 
     section, $3,000,000 for each of fiscal years 2008 through 
     2012.''.

     SEC. 6025. DELTA REGIONAL AUTHORITY.

       (a) Authorization of Appropriations.--Section 382M(a) of 
     the Consolidated Farm and Rural Development Act (7 U.S.C. 
     2009aa-12(a)) is amended by striking ``2001 through 2007'' 
     and inserting ``2008 through 2012''.
       (b) Termination of Authority.--Section 382N of the 
     Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-
     13) is amended by striking ``2007'' and inserting ``2012''.
       (c) Expansion.--Section 4(2) of the Delta Development Act 
     (42 U.S.C. 3121 note; Public Law 100-460) is amended--
       (1) in subparagraph (D), by inserting ``Beauregard, 
     Bienville, Cameron, Claiborne, DeSoto, Jefferson Davis, Red 
     River, St. Mary, Vermillion, Webster,'' after ``St. James,''; 
     and
       (2) in subparagraph (E)--
       (A) by inserting ``Jasper,'' after ``Copiah,''; and
       (B) by inserting ``Smith,'' after ``Simpson,''.

     SEC. 6026. NORTHERN GREAT PLAINS REGIONAL AUTHORITY.

       (a) Definition of Region.--Section 383A(4) of the 
     Consolidated Farm and Rural Development Act (7 U.S.C. 
     2009bb(4)) is amended by inserting ``Missouri (other than 
     counties included in the Delta Regional Authority),'' after 
     ``Minnesota,''.
       (b) Establishment.--Section 383B of the Consolidated Farm 
     and Rural Development Act (7 U.S.C. 2009bb-1) is amended--
       (1) in subsection (a), by adding at the end the following:
       ``(4) Failure to confirm.--
       ``(A) Federal member.--Notwithstanding any other provision 
     of this section, if a Federal member described in paragraph 
     (2)(A) has not been confirmed by the Senate by not later than 
     180 days after the date of enactment of this paragraph, the 
     Authority may organize and operate without the Federal 
     member.
       ``(B) Indian chairperson.--In the case of the Indian 
     Chairperson, if no Indian Chairperson is confirmed by the 
     Senate, the regional authority shall consult and coordinate 
     with the leaders of Indian tribes in the region concerning 
     the activities of the Authority, as appropriate.'';

[[Page H3484]]

       (2) in subsection (d)--
       (A) in paragraph (1), by striking ``to establish priorities 
     and'' and inserting ``for multistate cooperation to advance 
     the economic and social well-being of the region and to'';
       (B) in paragraph (3), by striking ``local development 
     districts,'' and inserting ``regional and local development 
     districts or organizations, regional boards established under 
     subtitle I,'';
       (C) in paragraph (4), by striking ``cooperation;'' and 
     inserting ``cooperation for--
       ``(i) renewable energy development and transmission;
       ``(ii) transportation planning and economic development;
       ``(iii) information technology;
       ``(iv) movement of freight and individuals within the 
     region;
       ``(v) federally-funded research at institutions of higher 
     education; and
       ``(vi) conservation land management;'';
       (D) by striking paragraph (6) and inserting the following:
       ``(6) enhance the capacity of, and provide support for, 
     multistate development and research organizations, local 
     development organizations and districts, and resource 
     conservation districts in the region;''; and
       (E) in paragraph (7), by inserting ``renewable energy,'' 
     after ``commercial,''.
       (3) in subsection (f)(2), by striking ``the Federal 
     cochairperson'' and inserting ``a cochairperson'';
       (4) in subsection (g)(1), by striking subparagraphs (A) 
     through (C) and inserting the following:
       ``(A) for each of fiscal years 2008 and 2009, 100 percent;
       ``(B) for fiscal year 2010, 75 percent; and
       ``(C) for fiscal year 2011 and each fiscal year thereafter, 
     50 percent.''.
       (c) Interstate Cooperation for Economic Opportunity and 
     Efficiency.--
       (1) In general.--Subtitle G of the Consolidated Farm and 
     Rural Development Act is amended--
       (A) by redesignating sections 383C through 383N (7 U.S.C. 
     2009bb-2 through 2009bb-13) as sections 383D through 383O, 
     respectively; and
       (B) by inserting after section 383B (7 U.S.C. 2009bb-1) the 
     following:

     ``SEC. 383C. INTERSTATE COOPERATION FOR ECONOMIC OPPORTUNITY 
                   AND EFFICIENCY.

       ``(a) In General.--The Authority shall provide assistance 
     to States in developing regional plans to address multistate 
     economic issues, including plans--
       ``(1) to develop a regional transmission system for 
     movement of renewable energy to markets outside the region;
       ``(2) to address regional transportation concerns, 
     including the establishment of a Northern Great Plains 
     Regional Transportation Working Group;
       ``(3) to encourage and support interstate collaboration on 
     federally-funded research that is in the national interest; 
     and
       ``(4) to establish a Regional Working Group on Agriculture 
     Development and Transportation.
       ``(b) Economic Issues.--The multistate economic issues 
     referred to in subsection (a) shall include--
       ``(1) renewable energy development and transmission;
       ``(2) transportation planning and economic development;
       ``(3) information technology;
       ``(4) movement of freight and individuals within the 
     region;
       ``(5) federally-funded research at institutions of higher 
     education; and
       ``(6) conservation land management.''.
       (2) Conforming amendments.--
       (A) Section 383B(c)(3)(B) of the Consolidated Farm and 
     Rural Development Act (7 U.S.C. 2009bb-1(c)(3)(B)) is amended 
     by striking ``383I'' and inserting ``383J''.
       (B) Section 383D(a) of the Consolidated Farm and Rural 
     Development Act (as redesignated by paragraph (1)(A)) is 
     amended by striking ``383I'' and inserting ``383J''.
       (C) Section 383E of the Consolidated Farm and Rural 
     Development Act (as so redesignated) is amended--
       (i) in subsection (b)(1), by striking ``383F(b)'' and 
     inserting ``383G(b)''; and
       (ii) in subsection (c)(2)(A), by striking ``383I'' and 
     inserting ``383J''.
       (D) Section 383G of the Consolidated Farm and Rural 
     Development Act (as so redesignated) is amended--
       (i) in subsection (b)--

       (I) in paragraph (1), by striking ``383M'' and inserting 
     ``383N''; and
       (II) in paragraph (2), by striking ``383D(b)'' and 
     inserting ``383E(b)'';

       (ii) in subsection (c)(2)(A), by striking ``383E(b)'' and 
     inserting ``383F(b)''; and
       (iii) in subsection (d)--

       (I) by striking ``383M'' and inserting ``383N''; and
       (II) by striking ``383C(a)'' and inserting ``383D(a)''.

       (E) Section 383J(c)(2) of the Consolidated Farm and Rural 
     Development Act (as so redesignated) is amended by striking 
     ``383H'' and inserting ``383I''.
       (d) Economic and Community Development Grants.--Section 
     383D of the Consolidated Farm and Rural Development Act (as 
     redesignated by subsection (c)(1)(A)) is amended--
       (1) in subsection (a)--
       (A) in paragraph (1), by striking ``transportation and 
     telecommunication'' and inserting ``transportation, renewable 
     energy transmission, and telecommunication''; and
       (B) by redesignating paragraphs (1) and (2) as paragraphs 
     (2) and (1), respectively, and moving those paragraphs so as 
     to appear in numerical order; and
       (2) in subsection (b)(2), by striking ``the activities in 
     the following order or priority'' and inserting ``the 
     following activities''.
       (e) Supplements to Federal Grant Programs.--Section 383E(a) 
     of the Consolidated Farm and Rural Development Act (as 
     redesignated by subsection (c)(1)(A)) is amended by striking 
     ``, including local development districts,''.
       (f) Multistate and Local Development Districts and 
     Organizations and Northern Great Plains Inc.--Section 383F of 
     the Consolidated Farm and Rural Development Act (as 
     redesignated by subsection (c)(1)(A)) is amended--
       (1) by striking the section heading and inserting 
     ``MULTISTATE AND LOCAL DEVELOPMENT DISTRICTS AND 
     ORGANIZATIONS AND NORTHERN GREAT PLAINS INC.''; and
       (2) by striking subsections (a) through (c) and inserting 
     the following:
       ``(a) Definition of Multistate and Local Development 
     District or Organization.--In this section, the term 
     `multistate and local development district or organization' 
     means an entity--
       ``(1) that--
       ``(A) is a planning district in existence on the date of 
     enactment of this subtitle that is recognized by the Economic 
     Development Administration of the Department of Commerce; or
       ``(B) is--
       ``(i) organized and operated in a manner that ensures 
     broad-based community participation and an effective 
     opportunity for other nonprofit groups to contribute to the 
     development and implementation of programs in the region;
       ``(ii) a nonprofit incorporated body organized or chartered 
     under the law of the State in which the entity is located;
       ``(iii) a nonprofit agency or instrumentality of a State or 
     local government;
       ``(iv) a public organization established before the date of 
     enactment of this subtitle under State law for creation of 
     multijurisdictional, area-wide planning organizations;
       ``(v) a nonprofit agency or instrumentality of a State that 
     was established for the purpose of assisting with multistate 
     cooperation; or
       ``(vi) a nonprofit association or combination of bodies, 
     agencies, and instrumentalities described in clauses (ii) 
     through (v); and
       ``(2) that has not, as certified by the Authority (in 
     consultation with the Federal cochairperson or Secretary, as 
     appropriate)--
       ``(A) inappropriately used Federal grant funds from any 
     Federal source; or
       ``(B) appointed an officer who, during the period in which 
     another entity inappropriately used Federal grant funds from 
     any Federal source, was an officer of the other entity.
       ``(b) Grants to Multistate, Local, or Regional Development 
     Districts and Organizations.--
       ``(1) In general.--The Authority may make grants for 
     administrative expenses under this section to multistate, 
     local, and regional development districts and organizations.
       ``(2) Conditions for grants.--
       ``(A) Maximum amount.--The amount of any grant awarded 
     under paragraph (1) shall not exceed 80 percent of the 
     administrative expenses of the multistate, local, or regional 
     development district or organization receiving the grant.
       ``(B) Maximum period.--No grant described in paragraph (1) 
     shall be awarded for a period greater than 3 years.
       ``(3) Local share.--The contributions of a multistate, 
     local, or regional development district or organization for 
     administrative expenses may be in cash or in kind, fairly 
     evaluated, including space, equipment, and services.
       ``(c) Duties.--
       ``(1) In general.--Except as provided in paragraph (2), a 
     local development district shall operate as a lead 
     organization serving multicounty areas in the region at the 
     local level.
       ``(2) Designation.--The Federal cochairperson may designate 
     an Indian tribe or multijurisdictional organization to serve 
     as a lead organization in such cases as the Federal 
     cochairperson or Secretary, as appropriate, determines 
     appropriate.''.
       (g) Distressed Counties and Areas and Nondistressed 
     Counties.--Section 383G of the Consolidated Farm and Rural 
     Development Act (as redesignated by subsection (c)(1)(A)) is 
     amended--
       (1) in subsection (b)(1), by striking ``75'' and inserting 
     ``50'';
       (2) by striking subsection (c);
       (3) by redesignating subsection (d) as subsection (c); and
       (4) in subsection (c) (as so redesignated)--
       (A) in the subsection heading, by inserting ``Renewable 
     Energy,'' after``Telecommunication''; and
       (B) by inserting ``, renewable energy,'' after 
     ``telecommunication,''.
       (h) Development Planning Process.--Section 383H of the 
     Consolidated Farm and Rural Development Act (as redesignated 
     by subsection (c)(1)(A)) is amended--
       (1) in subsection (c)(1), by striking subparagraph (A) and 
     inserting the following:
       ``(A) multistate, regional, and local development districts 
     and organizations; and''; and
       (2) in subsection (d)(1), by striking ``State and local 
     development districts'' and inserting ``multistate, regional, 
     and local development districts and organizations''.
       (i) Program Development Criteria.--Section 383I(a)(1) of 
     the Consolidated Farm and Rural Development Act (as 
     redesignated by subsection (c)(1)(A)) is amended by inserting 
     ``multistate or'' before ``regional''.
       (j) Authorization of Appropriations.--Section 383N(a) of 
     the Consolidated Farm and Rural Development Act (as 
     redesignated by subsection (c)(1)(A)) is amended by striking 
     ``2002 through 2007'' and inserting ``2008 through 2012''.
       (k) Termination of Authority.--Section 383O of the 
     Consolidated Farm and Rural Development Act (as redesignated 
     by subsection

[[Page H3485]]

     (c)(1)(A)) is amended by striking ``2007'' and inserting 
     ``2012''.

     SEC. 6027. RURAL BUSINESS INVESTMENT PROGRAM.

       (a) Issuance and Guarantee of Trust Certificates.--Section 
     384F(b)(3)(A) of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 2009cc-5(b)(3)(A)) is amended by striking ``In 
     the event'' and inserting the following:
       ``(i) Authority to prepay.--A debenture may be prepaid at 
     any time without penalty.
       ``(ii) Reduction of guarantee.--Subject to clause (i), 
     if''.
       (b) Fees.--Section 384G of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 2009cc-6) is amended--
       (1) in subsection (a), by striking ``such fees as the 
     Secretary considers appropriate'' and inserting ``a fee that 
     does not exceed $500'';
       (2) in subsection (b), by striking ``approved by the 
     Secretary'' and inserting ``that does not exceed $500''; and
       (3) in subsection (c)--
       (A) in paragraph (1), by striking ``The'' and inserting 
     ``Except as provided in paragraph (3), the'';
       (B) in paragraph (2)--
       (i) in subparagraph (A), by striking ``and'' at the end;
       (ii) in subparagraph (B), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(C) shall not exceed $500 for any fee collected under 
     this subsection.''; and
       (C) by adding at the end the following:
       ``(3) Prohibition on collection of certain fees.--In the 
     case of a license described in paragraph (1) that was 
     approved before July 1, 2007, the Secretary shall not collect 
     any fees due on or after the date of enactment of this 
     paragraph.''.
       (c) Rural Business Investment Companies.--Section 384I(c) 
     of the Consolidated Farm and Rural Development Act (7 U.S.C. 
     2009cc-8(c)) is amended--
       (1) by redesignating paragraph (3) as paragraph (4); and
       (2) by inserting after paragraph (2) the following:
       ``(3) Time frame.--Each rural business investment company 
     shall have a period of 2 years to meet the capital 
     requirements of this subsection.''.
       (d) Financial Institution Investments.--Section 384J of the 
     Consolidated Farm and Rural Development Act (7 U.S.C. 2009cc-
     9) is amended--
       (1) in subsection (a)(1), by inserting ``, including an 
     investment pool created entirely by such bank or savings 
     association'' before the period at the end; and
       (2) in subsection (c), by striking ``15'' and inserting 
     ``25''.
       (e) Contracting of Functions.--Section 384Q of the 
     Consolidated Farm and Rural Development Act (7 U.S.C. 2009cc-
     16) is repealed.
       (f) Funding.--The Consolidated Farm and Rural Development 
     Act is amended by striking section 384S (7 U.S.C. 2009cc-18) 
     and inserting the following:

     ``SEC. 384S. AUTHORIZATION OF APPROPRIATIONS.

       ``There is authorized to be appropriated to carry out this 
     subtitle $50,000,000 for the period of fiscal years 2008 
     through 2012.''.

     SEC. 6028. RURAL COLLABORATIVE INVESTMENT PROGRAM.

       Subtitle I of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 2009dd et seq.) is amended to read as follows:

          ``Subtitle I--Rural Collaborative Investment Program

     ``SEC. 385A. PURPOSE.

       ``The purpose of this subtitle is to establish a regional 
     rural collaborative investment program--
       ``(1) to provide rural regions with a flexible investment 
     vehicle, allowing for local control with Federal oversight, 
     assistance, and accountability;
       ``(2) to provide rural regions with incentives and 
     resources to develop and implement comprehensive strategies 
     for achieving regional competitiveness, innovation, and 
     prosperity;
       ``(3) to foster multisector community and economic 
     development collaborations that will optimize the asset-based 
     competitive advantages of rural regions with particular 
     emphasis on innovation, entrepreneurship, and the creation of 
     quality jobs;
       ``(4) to foster collaborations necessary to provide the 
     professional technical expertise, institutional capacity, and 
     economies of scale that are essential for the long-term 
     competitiveness of rural regions; and
       ``(5) to better use Department of Agriculture and other 
     Federal, State, and local governmental resources, and to 
     leverage those resources with private, nonprofit, and 
     philanthropic investments, in order to achieve measurable 
     community and economic prosperity, growth, and 
     sustainability.

     ``SEC. 385B. DEFINITIONS.

       ``In this subtitle:
       ``(1) Benchmark.--The term `benchmark' means an annual set 
     of goals and performance measures established for the purpose 
     of assessing performance in meeting a regional investment 
     strategy of a Regional Board.
       ``(2) Indian tribe.--The term `Indian tribe' has the 
     meaning given the term in section 4 of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 450b).
       ``(3) National board.--The term `National Board' means the 
     National Rural Investment Board established under section 
     385C(c).
       ``(4) National institute.--The term `National Institute' 
     means the National Institute on Regional Rural 
     Competitiveness and Entrepreneurship established under 
     section 385C(b)(2).
       ``(5) Regional board.--The term `Regional Board' means a 
     Regional Rural Investment Board described in section 385D(a).
       ``(6) Regional innovation grant.--The term `regional 
     innovation grant' means a grant made by the Secretary to a 
     certified Regional Board under section 385F.
       ``(7) Regional investment strategy grant.--The term 
     `regional investment strategy grant' means a grant made by 
     the Secretary to a certified Regional Board under section 
     385E.
       ``(8) Rural heritage.--
       ``(A) In general.--The term `rural heritage' means historic 
     sites, structures, and districts.
       ``(B) Inclusions.--The term `rural heritage' includes 
     historic rural downtown areas and main streets, 
     neighborhoods, farmsteads, scenic and historic trails, 
     heritage areas, and historic landscapes.

     ``SEC. 385C. ESTABLISHMENT AND ADMINISTRATION OF RURAL 
                   COLLABORATIVE INVESTMENT PROGRAM.

       ``(a) Establishment.--The Secretary shall establish a Rural 
     Collaborative Investment Program to support comprehensive 
     regional investment strategies for achieving rural 
     competitiveness.
       ``(b) Duties of Secretary.--In carrying out this subtitle, 
     the Secretary shall--
       ``(1) appoint and provide administrative and program 
     support to the National Board;
       ``(2) establish a national institute, to be known as the 
     `National Institute on Regional Rural Competitiveness and 
     Entrepreneurship', to provide technical assistance to the 
     Secretary and the National Board regarding regional 
     competitiveness and rural entrepreneurship, including 
     technical assistance for--
       ``(A) the development of rigorous analytic programs to 
     assist Regional Boards in determining the challenges and 
     opportunities that need to be addressed to receive the 
     greatest regional competitive advantage;
       ``(B) the provision of support for best practices developed 
     by the Regional Boards;
       ``(C) the establishment of programs to support the 
     development of appropriate governance and leadership skills 
     in the applicable regions; and
       ``(D) the evaluation of the progress and performance of the 
     Regional Boards in achieving benchmarks established in a 
     regional investment strategy;
       ``(3) work with the National Board to develop a national 
     rural investment plan that shall--
       ``(A) create a framework to encourage and support a more 
     collaborative and targeted rural investment portfolio in the 
     United States;
       ``(B) establish a Rural Philanthropic Initiative, to work 
     with rural communities to create and enhance the pool of 
     permanent philanthropic resources committed to rural 
     community and economic development;
       ``(C) cooperate with the Regional Boards and State and 
     local governments, organizations, and entities to ensure 
     investment strategies are developed that take into 
     consideration existing rural assets; and
       ``(D) encourage the organization of Regional Boards;
       ``(4) certify the eligibility of Regional Boards to receive 
     regional investment strategy grants and regional innovation 
     grants;
       ``(5) provide grants for Regional Boards to develop and 
     implement regional investment strategies;
       ``(6) provide technical assistance to Regional Boards on 
     issues, best practices, and emerging trends relating to rural 
     development, in cooperation with the National Rural 
     Investment Board; and
       ``(7) provide analytic and programmatic support for 
     regional rural competitiveness through the National 
     Institute, including--
       ``(A) programs to assist Regional Boards in determining the 
     challenges and opportunities that must be addressed to 
     receive the greatest regional competitive advantage;
       ``(B) support for best practices development by the 
     regional investment boards;
       ``(C) programs to support the development of appropriate 
     governance and leadership skills in the region; and
       ``(D) a review and evaluation of the performance of the 
     Regional Boards (including progress in achieving benchmarks 
     established in a regional investment strategy) in an annual 
     report submitted to--
       ``(i) the Committee on Agriculture of the House of 
     Representatives; and
       ``(ii) the Committee on Agriculture, Nutrition, and 
     Forestry of the Senate.
       ``(c) National Rural Investment Board.--The Secretary shall 
     establish within the Department of Agriculture a board to be 
     known as the `National Rural Investment Board'.
       ``(d) Duties of National Board.--The National Board shall--
       ``(1) not later than 180 days after the date of 
     establishment of the National Board, develop rules relating 
     to the operation of the National Board; and
       ``(2) provide advice to--
       ``(A) the Secretary and subsequently review the design, 
     development, and execution of the National Rural Investment 
     Plan;
       ``(B) Regional Boards on issues, best practices, and 
     emerging trends relating to rural development; and
       ``(C) the Secretary and the National Institute on the 
     development and execution of the program under this subtitle.
       ``(e) Membership.--
       ``(1) In general.--The National Board shall consist of 14 
     members appointed by the Secretary not later than 180 days 
     after the date of enactment of the Food, Conservation, and 
     Energy Act of 2008.
       ``(2) Supervision.--The National Board shall be subject to 
     the general supervision and direction of the Secretary.
       ``(3) Sectors represented.--The National Board shall 
     consist of representatives from each of--

[[Page H3486]]

       ``(A) nationally recognized entrepreneurship organizations;
       ``(B) regional strategy and development organizations;
       ``(C) community-based organizations;
       ``(D) elected members of local governments;
       ``(E) members of State legislatures;
       ``(F) primary, secondary, and higher education, job skills 
     training, and workforce development institutions;
       ``(G) the rural philanthropic community;
       ``(H) financial, lending, venture capital, 
     entrepreneurship, and other related institutions;
       ``(I) private sector business organizations, including 
     chambers of commerce and other for-profit business interests;
       ``(J) Indian tribes; and
       ``(K) cooperative organizations.
       ``(4) Selection of members.--
       ``(A) In general.--In selecting members of the National 
     Board, the Secretary shall consider recommendations made by--
       ``(i) the chairman and ranking member of each of the 
     Committee on Agriculture of the House of Representatives and 
     the Committee on Agriculture, Nutrition, and Forestry of the 
     Senate;
       ``(ii) the Majority Leader and Minority Leader of the 
     Senate; and
       ``(iii) the Speaker and Minority Leader of the House of 
     Representatives.
       ``(B) Ex-officio members.--In consultation with the 
     chairman and ranking member of each of the Committee on 
     Agriculture of the House of Representatives and the Committee 
     on Agriculture, Nutrition, and Forestry of the Senate, the 
     Secretary may appoint not more than 3 other officers or 
     employees of the Executive Branch to serve as ex-officio, 
     nonvoting members of the National Board.
       ``(5) Term of office.--
       ``(A) In general.--Subject to subparagraph (B), the term of 
     office of a member of the National Board appointed under 
     paragraph (1)(A) shall be for a period of not more than 4 
     years.
       ``(B) Staggered terms.--The members of the National Board 
     shall be appointed to serve staggered terms.
       ``(6) Initial appointments.--Not later than 1 year after 
     the date of enactment of the Food, Conservation, and Energy 
     Act of 2008, the Secretary shall appoint the initial members 
     of the National Board.
       ``(7) Vacancies.--A vacancy on the National Board shall be 
     filled in the same manner as the original appointment.
       ``(8) Compensation.--A member of the National Board shall 
     receive no compensation for service on the National Board, 
     but shall be reimbursed for related travel and other expenses 
     incurred in carrying out the duties of the member of the 
     National Board in accordance with section 5702 and 5703 of 
     title 5, United States Code.
       ``(9) Chairperson.--The National Board shall select a 
     chairperson from among the members of the National Board.
       ``(10) Federal status.--For purposes of Federal law, a 
     member of the National Board shall be considered a special 
     Government employee (as defined in section 202(a) of title 
     18, United States Code).
       ``(f) Administrative Support.--The Secretary, on a 
     reimbursable basis from funds made available under section 
     385H, may provide such administrative support to the National 
     Board as the Secretary determines is necessary.

     ``SEC. 385D. REGIONAL RURAL INVESTMENT BOARDS.

       ``(a) In General.--A Regional Rural Investment Board shall 
     be a multijurisdictional and multisectoral group that--
       ``(1) represents the long-term economic, community, and 
     cultural interests of a region;
       ``(2) is certified by the Secretary to establish a rural 
     investment strategy and compete for regional innovation 
     grants;
       ``(3) is composed of residents of a region that are broadly 
     representative of diverse public, nonprofit, and private 
     sector interests in investment in the region, including (to 
     the maximum extent practicable) representatives of--
       ``(A) units of local, multijurisdictional, or State 
     government, including not more than 1 representative from 
     each State in the region;
       ``(B) nonprofit community-based development organizations, 
     including community development financial institutions and 
     community development corporations;
       ``(C) agricultural, natural resource, and other asset-based 
     related industries;
       ``(D) in the case of regions with federally recognized 
     Indian tribes, Indian tribes;
       ``(E) regional development organizations;
       ``(F) private business organizations, including chambers of 
     commerce;
       ``(G)(i) institutions of higher education (as defined in 
     section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 
     1001(a)));
       ``(ii) tribally controlled colleges or universities (as 
     defined in section 2(a) of Tribally Controlled College or 
     University Assistance Act of 1978 (25 U.S.C. 1801(a))); and
       ``(iii) tribal technical institutions;
       ``(H) workforce and job training organizations;
       ``(I) other entities and organizations, as determined by 
     the Regional Board;
       ``(J) cooperatives; and
       ``(K) consortia of entities and organizations described in 
     subparagraphs (A) through (J);
       ``(4) represents a region inhabited by--
       ``(A) more than 25,000 individuals, as determined in the 
     latest available decennial census conducted under section 
     141(a) of title 13, United States Code; or
       ``(B) in the case of a region with a population density of 
     less than 2 individuals per square mile, at least 10,000 
     individuals, as determined in that latest available decennial 
     census;
       ``(5) has a membership of which not less than 25 percent, 
     nor more than 40 percent, represents--
       ``(A) units of local government and Indian tribes described 
     in subparagraphs (A) and (D) of paragraph (3);
       ``(B) nonprofit community and economic development 
     organizations and institutions of higher education described 
     in subparagraphs (B) and (G) of paragraph (3); or
       ``(C) private business (including chambers of commerce and 
     cooperatives) and agricultural, natural resource, and other 
     asset-based related industries described in subparagraphs (C) 
     and (F) of paragraph (3);
       ``(6) has a membership that may include an officer or 
     employee of a Federal agency, serving as an ex-officio, 
     nonvoting member of the Regional Board to represent the 
     agency; and
       ``(7) has organizational documents that demonstrate that 
     the Regional Board will--
       ``(A) create a collaborative public-private strategy 
     process;
       ``(B) develop, and submit to the Secretary for approval, a 
     regional investment strategy that meets the requirements of 
     section 385E, with benchmarks--
       ``(i) to promote investment in rural areas through the use 
     of grants made available under this subtitle; and
       ``(ii) to provide financial and technical assistance to 
     promote a broad-based regional development program aimed at 
     increasing and diversifying economic growth, improved 
     community facilities, and improved quality of life;
       ``(C) implement the approved regional investment strategy;
       ``(D) provide annual reports to the Secretary and the 
     National Board on progress made in achieving the benchmarks 
     of the regional investment strategy, including an annual 
     financial statement; and
       ``(E) select a non-Federal organization (such as a regional 
     development organization) in the local area served by the 
     Regional Board that has previous experience in the management 
     of Federal funds to serve as fiscal manager of any funds of 
     the Regional Board.
       ``(b) Urban Areas.--A resident of an urban area may serve 
     as an ex-officio member of a Regional Board.
       ``(c) Duties.--A Regional Board shall--
       ``(1) create a collaborative planning process for public-
     private investment within a region;
       ``(2) develop, and submit to the Secretary for approval, a 
     regional investment strategy;
       ``(3) develop approaches that will create permanent 
     resources for philanthropic giving in the region, to the 
     maximum extent practicable;
       ``(4) implement an approved strategy; and
       ``(5) provide annual reports to the Secretary and the 
     National Board on progress made in achieving the strategy, 
     including an annual financial statement.

     ``SEC. 385E. REGIONAL INVESTMENT STRATEGY GRANTS.

       ``(a) In General.--The Secretary shall make regional 
     investment strategy grants available to Regional Boards for 
     use in developing, implementing, and maintaining regional 
     investment strategies.
       ``(b) Regional Investment Strategy.--A regional investment 
     strategy shall provide--
       ``(1) an assessment of the competitive advantage of a 
     region, including--
       ``(A) an analysis of the economic conditions of the region;
       ``(B) an assessment of the current economic performance of 
     the region;
       ``(C) an overview of the population, geography, workforce, 
     transportation system, resources, environment, and 
     infrastructure needs of the region; and
       ``(D) such other pertinent information as the Secretary may 
     request;
       ``(2) an analysis of regional economic and community 
     development challenges and opportunities, including--
       ``(A) incorporation of relevant material from other 
     government-sponsored or supported plans and consistency with 
     applicable State, regional, and local workforce investment 
     strategies or comprehensive economic development plans; and
       ``(B) an identification of past, present, and projected 
     Federal and State economic and community development 
     investments in the region;
       ``(3) a section describing goals and objectives necessary 
     to solve regional competitiveness challenges and meet the 
     potential of the region;
       ``(4) an overview of resources available in the region for 
     use in--
       ``(A) establishing regional goals and objectives;
       ``(B) developing and implementing a regional action 
     strategy;
       ``(C) identifying investment priorities and funding 
     sources; and
       ``(D) identifying lead organizations to execute portions of 
     the strategy;
       ``(5) an analysis of the current state of collaborative 
     public, private, and nonprofit participation and investment, 
     and of the strategic roles of public, private, and nonprofit 
     entities in the development and implementation of the 
     regional investment strategy;
       ``(6) a section identifying and prioritizing vital 
     projects, programs, and activities for consideration by the 
     Secretary, including--
       ``(A) other potential funding sources; and
       ``(B) recommendations for leveraging past and potential 
     investments;
       ``(7) a plan of action to implement the goals and 
     objectives of the regional investment strategy;
       ``(8) a list of performance measures to be used to evaluate 
     implementation of the regional investment strategy, 
     including--
       ``(A) the number and quality of jobs, including self-
     employment, created during implementation of the regional 
     rural investment strategy;
       ``(B) the number and types of investments made in the 
     region;
       ``(C) the growth in public, private, and nonprofit 
     investment in the human, community, and economic assets of 
     the region;
       ``(D) changes in per capita income and the rate of 
     unemployment; and

[[Page H3487]]

       ``(E) other changes in the economic environment of the 
     region;
       ``(9) a section outlining the methodology for use in 
     integrating the regional investment strategy with the 
     economic priorities of the State; and
       ``(10) such other information as the Secretary determines 
     to be appropriate.
       ``(c) Maximum Amount of Grant.--A regional investment 
     strategy grant shall not exceed $150,000.
       ``(d) Cost Sharing.--
       ``(1) In general.--Subject to paragraph (2), of the share 
     of the costs of developing, maintaining, evaluating, 
     implementing, and reporting with respect to a regional 
     investment strategy funded by a grant under this section--
       ``(A) not more than 40 percent may be paid using funds from 
     the grant; and
       ``(B) the remaining share shall be provided by the 
     applicable Regional Board or other eligible grantee.
       ``(2) Form.--A Regional Board or other eligible grantee 
     shall pay the share described in paragraph (1)(B) in the form 
     of cash, services, materials, or other in-kind contributions, 
     on the condition that not more than 50 percent of that share 
     is provided in the form of services, materials, and other in-
     kind contributions.

     ``SEC. 385F. REGIONAL INNOVATION GRANTS PROGRAM.

       ``(a) Grants.--
       ``(1) In general.--The Secretary shall provide, on a 
     competitive basis, regional innovation grants to Regional 
     Boards for use in implementing projects and initiatives that 
     are identified in a regional rural investment strategy 
     approved under section 385E.
       ``(2) Timing.--After October 1, 2008, the Secretary shall 
     provide awards under this section on a quarterly funding 
     cycle.
       ``(b) Eligibility.--To be eligible to receive a regional 
     innovation grant, a Regional Board shall demonstrate to the 
     Secretary that--
       ``(1) the regional rural investment strategy of a Regional 
     Board has been reviewed by the National Board prior to 
     approval by the Secretary;
       ``(2) the management and organizational structure of the 
     Regional Board is sufficient to oversee grant projects, 
     including management of Federal funds; and
       ``(3) the Regional Board has a plan to achieve, to the 
     maximum extent practicable, the performance-based benchmarks 
     of the project in the regional rural investment strategy.
       ``(c) Limitations.--
       ``(1) Amount received.--A Regional Board may not receive 
     more than $6,000,000 in regional innovation grants under this 
     section during any 5-year period.
       ``(2) Determination of amount.--The Secretary shall 
     determine the amount of a regional innovation grant based 
     on--
       ``(A) the needs of the region being addressed by the 
     applicable regional rural investment strategy consistent with 
     the purposes described in subsection (f)(2); and
       ``(B) the size of the geographical area of the region.
       ``(3) Geographic diversity.--The Secretary shall ensure 
     that not more than 10 percent of funding made available under 
     this section is provided to Regional Boards in any State.
       ``(d) Cost-Sharing.--
       ``(1) Limitation.--Subject to paragraph (2), the amount of 
     a grant made under this section shall not exceed 50 percent 
     of the cost of the project.
       ``(2) Waiver of grantee share.--The Secretary may waive the 
     limitation in paragraph (1) under special circumstances, as 
     determined by the Secretary, including--
       ``(A) a sudden or severe economic dislocation;
       ``(B) significant chronic unemployment or poverty;
       ``(C) a natural disaster; or
       ``(D) other severe economic, social, or cultural duress.
       ``(3) Other federal assistance.--For the purpose of 
     determining cost-share limitations for any other Federal 
     program, funds provided under this section shall be 
     considered to be non-Federal funds.
       ``(e) Preferences.--In providing regional innovation grants 
     under this section, the Secretary shall give--
       ``(1) a high priority to strategies that demonstrate 
     significant leverage of capital and quality job creation; and
       ``(2) a preference to an application proposing projects and 
     initiatives that would--
       ``(A) advance the overall regional competitiveness of a 
     region;
       ``(B) address the priorities of a regional rural investment 
     strategy, including priorities that--
       ``(i) promote cross-sector collaboration, public-private 
     partnerships, or the provision of interim financing or seed 
     capital for program implementation;
       ``(ii) exhibit collaborative innovation and 
     entrepreneurship, particularly within a public-private 
     partnership; and
       ``(iii) represent a broad coalition of interests described 
     in section 385D(a);
       ``(C) include a strategy to leverage public non-Federal and 
     private funds and existing assets, including agricultural, 
     natural resource, and public infrastructure assets, with 
     substantial emphasis placed on the existence of real 
     financial commitments to leverage available funds;
       ``(D) create quality jobs;
       ``(E) enhance the role, relevance, and leveraging potential 
     of community and regional foundations in support of regional 
     investment strategies;
       ``(F) demonstrate a history, or involve organizations with 
     a history, of successful leveraging of capital for economic 
     development and public purposes;
       ``(G) address gaps in existing basic services, including 
     technology, within a region;
       ``(H) address economic diversification, including 
     agricultural and non-agriculturally based economies, within a 
     regional framework;
       ``(I) improve the overall quality of life in the region;
       ``(J) enhance the potential to expand economic development 
     successes across diverse stakeholder groups within the 
     region;
       ``(K) include an effective working relationship with 1 or 
     more institutions of higher education, tribally controlled 
     colleges or universities, or tribal technical institutions;
       ``(L) help to meet the other regional competitiveness needs 
     identified by a Regional Board; or
       ``(M) protect and promote rural heritage.
       ``(f) Uses.--
       ``(1) Leverage.--A Regional Board shall prioritize projects 
     and initiatives carried out using funds from a regional 
     innovation grant provided under this section, based in part 
     on the degree to which members of the Regional Board are able 
     to leverage additional funds for the implementation of the 
     projects.
       ``(2) Purposes.--A Regional Board may use a regional 
     innovation grant--
       ``(A) to support the development of critical infrastructure 
     (including technology deployment and services) necessary to 
     facilitate the competitiveness of a region;
       ``(B) to provide assistance to entities within the region 
     that provide essential public and community services;
       ``(C) to enhance the value-added production, marketing, and 
     use of agricultural and natural resources within the region, 
     including activities relating to renewable and alternative 
     energy production and usage;
       ``(D) to assist with entrepreneurship, job training, 
     workforce development, housing, educational, or other quality 
     of life services or needs, relating to the development and 
     maintenance of strong local and regional economies;
       ``(E) to assist in the development of unique new 
     collaborations that link public, private, and philanthropic 
     resources, including community foundations;
       ``(F) to provide support for business and entrepreneurial 
     investment, strategy, expansion, and development, including 
     feasibility strategies, technical assistance, peer networks, 
     business development funds, and other activities to 
     strengthen the economic competitiveness of the region;
       ``(G) to provide matching funds to enable community 
     foundations located within the region to build endowments 
     which provide permanent philanthropic resources to implement 
     a regional investment strategy; and
       ``(H) to preserve and promote rural heritage.
       ``(3) Availability of funds.--The funds made available to a 
     Regional Board or any other eligible grantee through a 
     regional innovation grant shall remain available for the 7-
     year period beginning on the date on which the award is 
     provided, on the condition that the Regional Board or other 
     grantee continues to be certified by the Secretary as making 
     adequate progress toward achieving established benchmarks.
       ``(g) Cost Sharing.--
       ``(1) Waiver of grantee share.--The Secretary may waive the 
     share of a grantee of the costs of a project funded by a 
     regional innovation grant under this section if the Secretary 
     determines that such a waiver is appropriate, including with 
     respect to special circumstances within tribal regions, in 
     the event an area experiences--
       ``(A) a sudden or severe economic dislocation;
       ``(B) significant chronic unemployment or poverty;
       ``(C) a natural disaster; or
       ``(D) other severe economic, social, or cultural duress.
       ``(2) Other federal programs.--For the purpose of 
     determining cost-sharing requirements for any other Federal 
     program, funds provided as a regional innovation grant under 
     this section shall be considered to be non-Federal funds.
       ``(h) Noncompliance.--If a Regional Board or other eligible 
     grantee fails to comply with any requirement relating to the 
     use of funds provided under this section, the Secretary may--
       ``(1) take such actions as are necessary to obtain 
     reimbursement of unused grant funds; and
       ``(2) reprogram the recaptured funds for purposes relating 
     to implementation of this subtitle.
       ``(i) Priority to Areas With Awards and Approved 
     Strategies.--
       ``(1) In general.--Subject to paragraph (3), in providing 
     rural development assistance under other programs, the 
     Secretary shall give a high priority to areas that receive 
     innovation grants under this section.
       ``(2) Consultation.--The Secretary shall consult with the 
     heads of other Federal agencies to promote the development of 
     priorities similar to those described in paragraph (1).
       ``(3) Exclusion of certain programs.--Paragraph (1) shall 
     not apply to the provision of rural development assistance 
     under any program relating to basic health, safety, or 
     infrastructure, including broadband deployment or minimum 
     environmental needs.

     ``SEC. 385G. RURAL ENDOWMENT LOANS PROGRAM.

       ``(a) In General.--The Secretary may provide long-term 
     loans to eligible community foundations to assist in the 
     implementation of regional investment strategies.
       ``(b) Eligible Community Foundations.--To be eligible to 
     receive a loan under this section, a community foundation 
     shall--
       ``(1) be located in an area that is covered by a regional 
     investment strategy;
       ``(2) match the amount of the loan with an amount that is 
     at least 250 percent of the amount of the loan; and
       ``(3) use the loan and the matching amount to carry out the 
     regional investment strategy in a

[[Page H3488]]

     manner that is targeted to community and economic 
     development, including through the development of community 
     foundation endowments.
       ``(c) Terms.--A loan made under this section shall--
       ``(1) have a term of not less than 10, nor more than 20, 
     years;
       ``(2) bear an interest rate of 1 percent per annum; and
       ``(3) be subject to such other terms and conditions as are 
     determined appropriate by the Secretary.

     ``SEC. 385H. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     subtitle $135,000,000 for the period of fiscal years 2009 
     through 2012.''.

     SEC. 6029. FUNDING OF PENDING RURAL DEVELOPMENT LOAN AND 
                   GRANT APPLICATIONS.

       (a) Definition of Application.--In this section, the term 
     ``application'' does not include an application for a loan or 
     grant that, as of the date of enactment of this Act, is in 
     the preapplication phase of consideration under regulations 
     of the Secretary in effect on the date of enactment of this 
     Act.
       (b) Use of Funds.--Subject to subsection (c), the Secretary 
     shall use funds made available under subsection (d) to 
     provide funds for applications that are pending on the date 
     of enactment of this Act for--
       (1) water or waste disposal grants or direct loans under 
     paragraph (1) or (2) of section 306(a) of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1926(a)); and
       (2) emergency community water assistance grants under 
     section 306A of that Act (7 U.S.C. 1926a).
       (c) Limitations.--
       (1) Appropriated amounts.--Funds made available under this 
     section shall be available to the Secretary to provide funds 
     for applications for loans and grants described in subsection 
     (b) that are pending on the date of enactment of this Act 
     only to the extent that funds for the loans and grants 
     appropriated in the annual appropriations Act for fiscal year 
     2007 have been exhausted.
       (2) Program requirements.--The Secretary may use funds made 
     available under this section to provide funds for a pending 
     application for a loan or grant described in subsection (b) 
     only if the Secretary processes, reviews, and approves the 
     application in accordance with regulations in effect on the 
     date of enactment of this Act.
       (3) Priority.--In providing funding under this section for 
     pending applications for loans or grants described in 
     subsection (b), the Secretary shall provide funding in the 
     following order of priority (until funds made available under 
     this section are exhausted):
       (A) Pending applications for water systems.
       (B) Pending applications for waste disposal systems.
       (d) Funding.--Notwithstanding any other provision of law, 
     of the funds of the Commodity Credit Corporation, the 
     Secretary shall use to carry out this section $120,000,000, 
     to remain available until expended.

             Subtitle B--Rural Electrification Act of 1936

     SEC. 6101. ENERGY EFFICIENCY PROGRAMS.

       Sections 2(a) and 4 of the Rural Electrification Act of 
     1936 (7 U.S.C. 902(a), 904) are amended by inserting 
     ``efficiency and'' before ``conservation'' each place it 
     appears.

     SEC. 6102. REINSTATEMENT OF RURAL UTILITY SERVICES DIRECT 
                   LENDING.

       (a) In General.--Section 4 of the Rural Electrification Act 
     of 1936 (7 U.S.C. 904) is amended--
       (1) by designating the first, second, and third sentences 
     as subsections (a), (b), and (d), respectively; and
       (2) by inserting after subsection (b) (as so designated) 
     the following:
       ``(c) Direct Loans.--
       ``(1) Direct hardship loans.--Direct hardship loans under 
     this section shall be for the same purposes and on the same 
     terms and conditions as hardship loans made under section 
     305(c)(1).
       ``(2) Other direct loans.--All other direct loans under 
     this section shall bear interest at a rate equal to the then 
     current cost of money to the Government of the United States 
     for loans of similar maturity, plus \1/8\ of 1 percent.''.
       (b) Elimination of Federal Financing Bank Guaranteed 
     Loans.--Section 306 of the Rural Electrification Act of 1936 
     (7 U.S.C. 936) is amended--
       (1) in the third sentence, by striking ``guarantee, 
     accommodation, or subordination'' and inserting 
     ``accommodation or subordination''; and
       (2) by striking the fourth sentence.

     SEC. 6103. DEFERMENT OF PAYMENTS TO ALLOWS LOANS FOR IMPROVED 
                   ENERGY EFFICIENCY AND DEMAND REDUCTION AND FOR 
                   ENERGY EFFICIENCY AND USE AUDITS.

       Section 12 of the Rural Electrification Act of 1936 (7 
     U.S.C. 912) is amended by adding at the end the following:
       ``(c) Deferment of Payments on Loans.--
       ``(1) In general.--The Secretary shall allow borrowers to 
     defer payment of principal and interest on any direct loan 
     made under this Act to enable the borrower to make loans to 
     residential, commercial, and industrial consumers--
       ``(A) to conduct energy efficiency and use audits; and
       ``(B) to install energy efficient measures or devices that 
     reduce the demand on electric systems.
       ``(2) Amount.--The total amount of a deferment under this 
     subsection shall not exceed the sum of the principal and 
     interest on the loans made to a customer of the borrower, as 
     determined by the Secretary.
       ``(3) Term.--The term of a deferment under this subsection 
     shall not exceed 60 months.''.

     SEC. 6104. RURAL ELECTRIFICATION ASSISTANCE.

       Section 13 of the Rural Electrification Act of 1936 (7 
     U.S.C. 913) is amended to read as follows:

     ``SEC. 13. DEFINITIONS.

       ``In this Act:
       ``(1) Farm.--The term `farm' means a farm, as defined by 
     the Bureau of the Census.
       ``(2) Indian tribe.--The term `Indian tribe' has the 
     meaning given the term in section 4 of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 450b).
       ``(3) Rural area.--Except as provided otherwise in this 
     Act, the term `rural area' means the farm and nonfarm 
     population of--
       ``(A) any area described in section 343(a)(13)(C) of the 
     Consolidated Farm and Rural Development Act (7 U.S.C. 
     1991(a)(13)(C)); and
       ``(B) any area within a service area of a borrower for 
     which a borrower has an outstanding loan made under titles I 
     through V as of the date of enactment of this paragraph.
       ``(4) Territory.--The term `territory' includes any insular 
     possession of the United States.
       ``(5) Secretary.--The term `Secretary' means the Secretary 
     of Agriculture.''.

     SEC. 6105. SUBSTANTIALLY UNDERSERVED TRUST AREAS.

       The Rural Electrification Act of 1936 is amended by 
     inserting after section 306E (7 U.S.C. 936e) the following:

     ``SEC. 306F. SUBSTANTIALLY UNDERSERVED TRUST AREAS.

       ``(a) Definitions.--In this section:
       ``(1) Eligible program.--The term `eligible program' means 
     a program administered by the Rural Utilities Service and 
     authorized in--
       ``(A) this Act; or
       ``(B) paragraph (1), (2), (14), (22), or (24) of section 
     306(a) or section 306A, 306C, 306D, or 306E of the 
     Consolidated Farm and Rural Development Act (7 U.S.C. 
     1926(a), 1926a, 1926c, 1926d, 1926e).
       ``(2) Substantially underserved trust area.--The term 
     `substantially underserved trust area' means a community in 
     `trust land' (as defined in section 3765 of title 38, United 
     States Code) with respect to which the Secretary determines 
     has a high need for the benefits of an eligible program.
       ``(b) Initiative.--The Secretary, in consultation with 
     local governments and Federal agencies, may implement an 
     initiative to identify and improve the availability of 
     eligible programs in communities in substantially underserved 
     trust areas.
       ``(c) Authority of Secretary.--In carrying out subsection 
     (b), the Secretary--
       ``(1) may make available from loan or loan guarantee 
     programs administered by the Rural Utilities Service to 
     qualified utilities or applicants financing with an interest 
     rate as low as 2 percent, and with extended repayment terms;
       ``(2) may waive nonduplication restrictions, matching fund 
     requirements, or credit support requirements from any loan or 
     grant program administered by the Rural Utilities Service to 
     facilitate the construction, acquisition, or improvement of 
     infrastructure;
       ``(3) may give the highest funding priority to designated 
     projects in substantially underserved trust areas; and
       ``(4) shall only make loans or loan guarantees that are 
     found to be financially feasible and that provide eligible 
     program benefits to substantially underserved trust areas.
       ``(d) Report.--Not later than 1 year after the date of 
     enactment of this section and annually thereafter, the 
     Secretary shall submit to Congress a report that describes--
       ``(1) the progress of the initiative implemented under 
     subsection (b); and
       ``(2) recommendations for any regulatory or legislative 
     changes that would be appropriate to improve services to 
     substantially underserved trust areas.''.

     SEC. 6106. GUARANTEES FOR BONDS AND NOTES ISSUED FOR 
                   ELECTRIFICATION OR TELEPHONE PURPOSES.

       (a) In General.--Section 313A of the Rural Electrification 
     Act of 1936 (7 U.S.C. 940c-1) is amended--
       (1) in subsection (b)--
       (A) in paragraph (1), by striking ``for electrification'' 
     and all that follows through the end and inserting ``for 
     eligible electrification or telephone purposes consistent 
     with this Act.''; and
       (B) by striking paragraph (4) and inserting the following:
       ``(4) Annual amount.--The total amount of guarantees 
     provided by the Secretary under this section during a fiscal 
     year shall not exceed $1,000,000,000, subject to the 
     availability of funds under subsection (e).'';
       (2) in subsection (c), by striking paragraphs (2) and (3) 
     and inserting the following:
       ``(2) Amount.--
       ``(A) In general.--The amount of the annual fee paid for 
     the guarantee of a bond or note under this section shall be 
     equal to 30 basis points of the amount of the unpaid 
     principal of the bond or note guaranteed under this section.
       ``(B) Prohibition.--Except as otherwise provided in this 
     subsection and subsection (e)(2), no other fees shall be 
     assessed.
       ``(3) Payment.--
       ``(A) In general.--A lender shall pay the fees required 
     under this subsection on a semiannual basis.
       ``(B) Structured schedule.--The Secretary shall, with the 
     consent of the lender, structure the schedule for payment of 
     the fee to ensure that sufficient funds are available to pay 
     the subsidy costs for note or bond guarantees as provided for 
     in subsection (e)(2).''; and
       (3) in subsection (f), by striking ``2007'' and inserting 
     ``2012''.
       (b) Administration.--The Secretary shall continue to carry 
     out section 313A of the Rural

[[Page H3489]]

     Electrification Act of 1936 (7 U.S.C. 940c-1) in the same 
     manner as on the day before the date of enactment of this 
     Act, except without regard to the limitations prescribed in 
     subsection (b)(1) of that section, until such time as any 
     regulations necessary to carry out the amendments made by 
     this section are fully implemented.

     SEC. 6107. EXPANSION OF 911 ACCESS.

       Section 315 of the Rural Electrification Act of 1936 (7 
     U.S.C. 940e) is amended to read as follows:

     ``SEC. 315. EXPANSION OF 911 ACCESS.

       ``(a) In General.--Subject to subsection (c) and such terms 
     and conditions as the Secretary may prescribe, the Secretary 
     may make loans under this title to entities eligible to 
     borrow from the Rural Utilities Service, State or local 
     governments, Indian tribes (as defined in section 4 of the 
     Indian Self-Determination and Education Assistance Act (25 
     U.S.C. 450b)), or other public entities for facilities and 
     equipment to expand or improve in rural areas--
       ``(1) 911 access;
       ``(2) integrated interoperable emergency communications, 
     including multiuse networks that provide commercial or 
     transportation information services in addition to emergency 
     communications services;
       ``(3) homeland security communications;
       ``(4) transportation safety communications; or
       ``(5) location technologies used outside an urbanized area.
       ``(b) Loan Security.--Government-imposed fees related to 
     emergency communications (including State or local 911 fees) 
     may be considered to be security for a loan under this 
     section.
       ``(c) Emergency Communications Equipment Providers.--The 
     Secretary may make a loan under this section to an emergency 
     communication equipment provider to expand or improve 911 
     access or other communications or technologies described in 
     subsection (a) if the local government that has jurisdiction 
     over the project is not allowed to acquire the debt resulting 
     from the loan.
       ``(d) Authorization of Appropriations.--The Secretary shall 
     use to make loans under this section any funds otherwise made 
     available for telephone loans for each of fiscal years 2008 
     through 2012.''.

     SEC. 6108. ELECTRIC LOANS FOR RENEWABLE ENERGY.

       Title III of the Rural Electrification Act of 1936 is 
     amended by inserting after section 316 (7 U.S.C. 940f) the 
     following:

     ``SEC. 317. ELECTRIC LOANS FOR RENEWABLE ENERGY.

       ``(a) Definition of Renewable Energy Source.--In this 
     section, the term `renewable energy source' means an energy 
     conversion system fueled from a solar, wind, hydropower, 
     biomass, or geothermal source of energy.
       ``(b) Loans.--In addition to any other funds or authorities 
     otherwise made available under this Act, the Secretary may 
     make electric loans under this title for electric generation 
     from renewable energy resources for resale to rural and 
     nonrural residents.
       ``(c) Rate.--The rate of a loan under this section shall be 
     equal to the average tax-exempt municipal bond rate of 
     similar maturities.''.

     SEC. 6109. BONDING REQUIREMENTS.

       Title III of the Rural Electrification Act of 1936 is 
     amended by inserting after section 317 (as added by section 
     6108) the following:

     ``SEC. 318. BONDING REQUIREMENTS.

       ``The Secretary shall review the bonding requirements for 
     all programs administered by the Rural Utilities Service 
     under this Act to ensure that bonds are not required if--
       ``(1) the interests of the Secretary are adequately 
     protected by product warranties; or
       ``(2) the costs or conditions associated with a bond exceed 
     the benefit of the bond.''.

     SEC. 6110. ACCESS TO BROADBAND TELECOMMUNICATIONS SERVICES IN 
                   RURAL AREAS.

       (a) In General.--Section 601 of the Rural Electrification 
     Act of 1936 (7 U.S.C. 950bb) is amended to read as follows:

     ``SEC. 601. ACCESS TO BROADBAND TELECOMMUNICATIONS SERVICES 
                   IN RURAL AREAS.

       ``(a) Purpose.--The purpose of this section is to provide 
     loans and loan guarantees to provide funds for the costs of 
     the construction, improvement, and acquisition of facilities 
     and equipment for broadband service in rural areas.
       ``(b) Definitions.--In this section:
       ``(1) Broadband service.--The term `broadband service' 
     means any technology identified by the Secretary as having 
     the capacity to transmit data to enable a subscriber to the 
     service to originate and receive high-quality voice, data, 
     graphics, and video.
       ``(2) Incumbent service provider.--The term `incumbent 
     service provider', with respect to an application submitted 
     under this section, means an entity that, as of the date of 
     submission of the application, is providing broadband service 
     to not less than 5 percent of the households in the service 
     territory proposed in the application.
       ``(3) Rural area.--
       ``(A) In general.--The term `rural area' means any area 
     other than--
       ``(i) an area described in clause (i) or (ii) of section 
     343(a)(13)(A) of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 1991(a)(13)(A)); and
       ``(ii) a city, town, or incorporated area that has a 
     population of greater than 20,000 inhabitants.
       ``(B) Urban area growth.--The Secretary may, by regulation 
     only, consider an area described in section 
     343(a)(13)(F)(i)(I) of that Act to not be a rural area for 
     purposes of this section.
       ``(c) Loans and Loan Guarantees.--
       ``(1) In general.--The Secretary shall make or guarantee 
     loans to eligible entities described in subsection (d) to 
     provide funds for the construction, improvement, or 
     acquisition of facilities and equipment for the provision of 
     broadband service in rural areas.
       ``(2) Priority.--In making or guaranteeing loans under 
     paragraph (1), the Secretary shall give the highest priority 
     to applicants that offer to provide broadband service to the 
     greatest proportion of households that, prior to the 
     provision of the broadband service, had no incumbent service 
     provider.
       ``(d) Eligibility.--
       ``(1) Eligible entities.--
       ``(A) In general.--To be eligible to obtain a loan or loan 
     guarantee under this section, an entity shall--
       ``(i) demonstrate the ability to furnish, improve, or 
     extend a broadband service to a rural area;
       ``(ii) submit to the Secretary a loan application at such 
     time, in such manner, and containing such information as the 
     Secretary may require; and
       ``(iii) agree to complete buildout of the broadband service 
     described in the loan application by not later than 3 years 
     after the initial date on which proceeds from the loan made 
     or guaranteed under this section are made available.
       ``(B) Limitation.--An eligible entity that provides 
     telecommunications or broadband service to at least 20 
     percent of the households in the United States may not 
     receive an amount of funds under this section for a fiscal 
     year in excess of 15 percent of the funds authorized and 
     appropriated under subsection (k) for the fiscal year.
       ``(2) Eligible projects.--
       ``(A) In general.--Except as provided in subparagraphs (B) 
     and (C), the proceeds of a loan made or guaranteed under this 
     section may be used to carry out a project in a proposed 
     service territory only if, as of the date on which the 
     application for the loan or loan guarantee is submitted--
       ``(i) not less than 25 percent of the households in the 
     proposed service territory is offered broadband service by 
     not more than 1 incumbent service provider; and
       ``(ii) broadband service is not provided in any part of the 
     proposed service territory by 3 or more incumbent service 
     providers.
       ``(B) Exception to 25 percent requirement.--Subparagraph 
     (A)(i) shall not apply to the proposed service territory of a 
     project if a loan or loan guarantee has been made under this 
     section to the applicant to provide broadband service in the 
     proposed service territory.
       ``(C) Exception to 3 or more incumbent service provider 
     requirement.--
       ``(i) In general.--Except as provided in clause (ii), 
     subparagraph (A)(ii) shall not apply to an incumbent service 
     provider that is upgrading broadband service to the existing 
     territory of the incumbent service provider.
       ``(ii) Exception.--Clause (i) shall not apply if the 
     applicant is eligible for funding under another title of this 
     Act.
       ``(3) Equity and market survey requirements.--
       ``(A) In general.--The Secretary may require an entity to 
     provide a cost share in an amount not to exceed 10 percent of 
     the amount of the loan or loan guarantee requested in the 
     application of the entity, unless the Secretary determines 
     that a higher percentage is required for financial 
     feasibility.
       ``(B) Market survey.--
       ``(i) In general.--The Secretary may require an entity that 
     proposes to have a subscriber projection of more than 20 
     percent of the broadband service market in a rural area to 
     submit to the Secretary a market survey.
       ``(ii) Less than 20 percent.--The Secretary may not require 
     an entity that proposes to have a subscriber projection of 
     less than 20 percent of the broadband service market in a 
     rural area to submit to the Secretary a market survey.
       ``(4) State and local governments and indian tribes.--
     Subject to paragraph (1), a State or local government 
     (including any agency, subdivision, or instrumentality 
     thereof (including consortia thereof)) and an Indian tribe 
     shall be eligible for a loan or loan guarantee under this 
     section to provide broadband services to a rural area.
       ``(5) Notice requirement.--The Secretary shall publish a 
     notice of each application for a loan or loan guarantee under 
     this section describing the application, including--
       ``(A) the identity of the applicant;
       ``(B) each area proposed to be served by the applicant; and
       ``(C) the estimated number of households without 
     terrestrial-based broadband service in those areas.
       ``(6) Paperwork reduction.--The Secretary shall take steps 
     to reduce, to the maximum extent practicable, the cost and 
     paperwork associated with applying for a loan or loan 
     guarantee under this section by first-time applicants 
     (particularly first-time applicants who are small and start-
     up broadband service providers), including by providing for a 
     new application that maintains the ability of the Secretary 
     to make an analysis of the risk associated with the loan 
     involved.
       ``(7) Preapplication process.--The Secretary shall 
     establish a process under which a prospective applicant may 
     seek a determination of area eligibility prior to preparing a 
     loan application under this section.
       ``(e) Broadband Service.--
       ``(1) In general.--The Secretary shall, from time to time 
     as advances in technology warrant, review and recommend 
     modifications of rate-of-data transmission criteria for 
     purposes of the identification of broadband service 
     technologies under subsection (b)(1).

[[Page H3490]]

       ``(2) Prohibition.--The Secretary shall not establish 
     requirements for bandwidth or speed that have the effect of 
     precluding the use of evolving technologies appropriate for 
     rural areas.
       ``(f) Technological Neutrality.--For purposes of 
     determining whether to make a loan or loan guarantee for a 
     project under this section, the Secretary shall use criteria 
     that are technologically neutral.
       ``(g) Terms and Conditions for Loans and Loan Guarantees.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, a loan or loan guarantee under this section shall--
       ``(A) bear interest at an annual rate of, as determined by 
     the Secretary--
       ``(i) in the case of a direct loan, a rate equivalent to--

       ``(I) the cost of borrowing to the Department of the 
     Treasury for obligations of comparable maturity; or
       ``(II) 4 percent; and

       ``(ii) in the case of a guaranteed loan, the current 
     applicable market rate for a loan of comparable maturity; and
       ``(B) have a term of such length, not exceeding 35 years, 
     as the borrower may request, if the Secretary determines that 
     the loan is adequately secured.
       ``(2) Term.--In determining the term of a loan or loan 
     guarantee, the Secretary shall consider whether the recipient 
     is or would be serving an area that is not receiving 
     broadband services.
       ``(3) Recurring revenue.--The Secretary shall consider the 
     existing recurring revenues of the entity at the time of 
     application in determining an adequate level of credit 
     support.
       ``(h) Adequacy of Security.--
       ``(1) In general.--The Secretary shall ensure that the type 
     and amount of, and method of security used to secure, any 
     loan or loan guarantee under this section is commensurate to 
     the risk involved with the loan or loan guarantee, 
     particularly in any case in which the loan or loan guarantee 
     is issued to a financially strong and stable entity, as 
     determined by the Secretary.
       ``(2) Determination of amount and method of security.--In 
     determining the amount of, and method of security used to 
     secure, a loan or loan guarantee under this section, the 
     Secretary shall consider reducing the security in a rural 
     area that does not have broadband service.
       ``(i) Use of Loan Proceeds to Refinance Loans for 
     Deployment of Broadband Service.--Notwithstanding any other 
     provision of this Act, the proceeds of any loan made or 
     guaranteed by the Secretary under this Act may be used by the 
     recipient of the loan for the purpose of refinancing an 
     outstanding obligation of the recipient on another 
     telecommunications loan made under this Act if the use of the 
     proceeds for that purpose will support the construction, 
     improvement, or acquisition of facilities and equipment for 
     the provision of broadband service in rural areas.
       ``(j) Reports.--Not later than 1 year after the date of 
     enactment of the Food, Conservation, and Energy Act of 2008, 
     and annually thereafter, the Administrator shall submit to 
     Congress a report that describes the extent of participation 
     in the loan and loan guarantee program under this section for 
     the preceding fiscal year, including a description of --
       ``(1) the number of loans applied for and provided under 
     this section;
       ``(2)(A) the communities proposed to be served in each loan 
     application submitted for the fiscal year; and
       ``(B) the communities served by projects funded by loans 
     and loan guarantees provided under this section;
       ``(3) the period of time required to approve each loan 
     application under this section;
       ``(4) any outreach activities carried out by the Secretary 
     to encourage entities in rural areas without broadband 
     service to submit applications under this section;
       ``(5) the method by which the Secretary determines that a 
     service enables a subscriber to originate and receive high-
     quality voice, data, graphics, and video for purposes of 
     subsection (b)(1); and
       ``(6) each broadband service, including the type and speed 
     of broadband service, for which assistance was sought, and 
     each broadband service for which assistance was provided, 
     under this section.
       ``(k) Funding.--
       ``(1) Authorization of appropriations.--There is authorized 
     to be appropriated to the Secretary to carry out this section 
     $25,000,000 for each of fiscal years 2008 through 2012, to 
     remain available until expended.
       ``(2) Allocation of funds.--
       ``(A) In general.--From amounts made available for each 
     fiscal year under this subsection, the Secretary shall--
       ``(i) establish a national reserve for loans and loan 
     guarantees to eligible entities in States under this section; 
     and
       ``(ii) allocate amounts in the reserve to each State for 
     each fiscal year for loans and loan guarantees to eligible 
     entities in the State.
       ``(B) Amount.--The amount of an allocation made to a State 
     for a fiscal year under subparagraph (A) shall bear the same 
     ratio to the amount of allocations made for all States for 
     the fiscal year as--
       ``(i) the number of communities with a population of 2,500 
     inhabitants or less in the State; bears to
       ``(ii) the number of communities with a population of 2,500 
     inhabitants or less in all States.
       ``(C) Unobligated amounts.--Any amounts in the reserve 
     established for a State for a fiscal year under subparagraph 
     (B) that are not obligated by April 1 of the fiscal year 
     shall be available to the Secretary to make loans and loan 
     guarantees under this section to eligible entities in any 
     State, as determined by the Secretary.
       ``(l) Termination of Authority.--No loan or loan guarantee 
     may be made under this section after September 30, 2012.''.
       (b) Regulations.--The Secretary may implement the amendment 
     made by subsection (a) through the promulgation of an interim 
     regulation.
       (c) Application.--The amendment made by subsection (a) 
     shall not apply to--
       (1) an application submitted under section 601 of the Rural 
     Electrification Act of 1936 (7 U.S.C. 950bb) (as it existed 
     before the amendment made by subsection (a)) that--
       (A) was pending on the date that is 45 days prior to the 
     date of enactment of this Act; and
       (B) is pending on the date of enactment of this Act; or
       (2) a petition for reconsideration of a decision on an 
     application described in paragraph (1).

     SEC. 6111. NATIONAL CENTER FOR RURAL TELECOMMUNICATIONS 
                   ASSESSMENT.

       Title VI of the Rural Electrification Act of 1936 (7 U.S.C. 
     950bb et seq.) is amended by adding at the end the following:

     ``SEC. 602. NATIONAL CENTER FOR RURAL TELECOMMUNICATIONS 
                   ASSESSMENT.

       ``(a) Designation of Center.--The Secretary shall designate 
     an entity to serve as the National Center for Rural 
     Telecommunications Assessment (referred to in this section as 
     the `Center').
       ``(b) Criteria.--In designating the Center under subsection 
     (a), the Secretary shall take into consideration the 
     following criteria:
       ``(1) The Center shall be an entity that demonstrates to 
     the Secretary--
       ``(A) a focus on rural policy research; and
       ``(B) a minimum of 5 years of experience relating to rural 
     telecommunications research and assessment.
       ``(2) The Center shall be capable of assessing broadband 
     services in rural areas.
       ``(3) The Center shall have significant experience 
     involving other rural economic development centers and 
     organizations with respect to the assessment of rural 
     policies and the formulation of policy solutions at the 
     Federal, State, and local levels.
       ``(c) Board of Directors.--The Center shall be managed by a 
     board of directors, which shall be responsible for the duties 
     of the Center described in subsection (d).
       ``(d) Duties.--The Center shall--
       ``(1) assess the effectiveness of programs carried out 
     under this title in increasing broadband penetration and 
     purchase in rural areas, especially in rural communities 
     identified by the Secretary as having no broadband service 
     before the provision of a loan or loan guarantee under this 
     title;
       ``(2) work with existing rural development centers selected 
     by the Center to identify policies and initiatives at the 
     Federal, State, and local levels that have increased 
     broadband penetration and purchase in rural areas and provide 
     recommendations to Federal, State, and local policymakers on 
     effective strategies to bring affordable broadband services 
     to residents of rural areas, particularly residents located 
     outside of the municipal boundaries of a rural city or town; 
     and
       ``(3) develop and publish reports describing the activities 
     carried out by the Center under this section.
       ``(e) Reporting Requirements.--Not later than December 1 of 
     each applicable fiscal year, the board of directors of the 
     Center shall submit to Congress and the Secretary a report 
     describing the activities carried out by the Center during 
     the preceding fiscal year and the results of any research 
     conducted by the Center during that fiscal year, including--
       ``(1) an assessment of each program carried out under this 
     title; and
       ``(2) an assessment of the effects of the policy 
     initiatives identified under subsection (d)(2).
       ``(f) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Secretary to carry out this section 
     $1,000,000 for each of fiscal years 2008 through 2012.''.

     SEC. 6112. COMPREHENSIVE RURAL BROADBAND STRATEGY.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the Chairman of the Federal 
     Communications Commission, in coordination with the 
     Secretary, shall submit to Congress a report describing a 
     comprehensive rural broadband strategy that includes--
       (1) recommendations--
       (A) to promote interagency coordination of Federal agencies 
     in regards to policies, procedures, and targeted resources, 
     and to streamline or otherwise improve and streamline the 
     policies, programs, and services;
       (B) to coordinate existing Federal rural broadband or rural 
     initiatives;
       (C) to address both short- and long-term needs assessments 
     and solutions for a rapid build-out of rural broadband 
     solutions and application of the recommendations for Federal, 
     State, regional, and local government policymakers; and
       (D) to identify how specific Federal agency programs and 
     resources can best respond to rural broadband requirements 
     and overcome obstacles that currently impede rural broadband 
     deployment; and
       (2) a description of goals and timeframes to achieve the 
     purposes of the report.
       (b) Updates.--The Chairman of the Federal Communications 
     Commission, in coordination with the Secretary, shall update 
     and evaluate the report described in subsection (a) during 
     the third year after the date of enactment of this Act.

     SEC. 6113. STUDY ON RURAL ELECTRIC POWER GENERATION.

       (a) In General.--The Secretary shall conduct a study on the 
     electric power generation needs in rural areas of the United 
     States.
       (b) Components.--The study shall include an examination 
     of--

[[Page H3491]]

       (1) generation in various areas in rural areas of the 
     United States, particularly by rural electric cooperatives;;
       (2) financing available for capacity, including financing 
     available through programs authorized under the Rural 
     Electrification Act of 1936 (7 U.S.C. 901 et seq.);
       (3) the impact of electricity costs on consumers and local 
     economic development;
       (4) the ability of fuel feedstock technology to meet 
     regulatory requirements, such as carbon capture and 
     sequestration; and
       (5) any other factors that the Secretary considers 
     appropriate.
       (c) Report.--Not later than 60 days after the date of 
     enactment of this Act, the Secretary shall submit to the 
     Committee on Agriculture of the House of Representatives and 
     the Committee on Agriculture, Nutrition, and Forestry of the 
     Senate a report containing the findings of the study under 
     this section.

                       Subtitle C--Miscellaneous

     SEC. 6201. DISTANCE LEARNING AND TELEMEDICINE.

       (a) In General.--Section 2333(c)(1) of the Food, 
     Agriculture, Conservation and Trade Act of 1990 (7 U.S.C. 
     Sec. 950aaa-2(a)(1)) is amended--
       (1) in subparagraph (A), by striking ``and'' at the end;
       (2) in subparagraph (B), by striking the period at the end 
     and inserting a semicolon; and
       (3) by adding at the end the following:
       ``(C) libraries.''.
       (b) Authorization of Appropriations.--Section 2335A of the 
     Food, Agriculture, Conservation, and Trade Act of 1990 (7 
     U.S.C. 950aaa-5) is amended by striking ``2007'' and 
     inserting ``2012''.
       (c) Conforming Amendment.--Section 1(b) of Public Law 102-
     551 (7 U.S.C. 950aaa note; Public Law 102-551) is amended by 
     striking ``2007'' and inserting ``2012''.

     SEC. 6202. VALUE-ADDED AGRICULTURAL MARKET DEVELOPMENT 
                   PROGRAM GRANTS.

       (a) Definitions.--Section 231 of the Agricultural Risk 
     Protection Act of 2000 (7 U.S.C. 1621 note; Public Law 106-
     224) is amended by striking subsection (a) and inserting the 
     following:
       ``(a) Definitions.--In this section:
       ``(1) Beginning farmer or rancher.--The term `beginning 
     farmer or rancher' has the meaning given the term in section 
     343(a) of the Consolidated Farm and Rural Development Act (7 
     U.S.C. 1991(a)).
       ``(2) Family farm.--The term `family farm' has the meaning 
     given the term in section 761.2 of title 7, Code of Federal 
     Regulations (as in effect on December 30, 2007).
       ``(3) Mid-tier value chain.--The term `mid-tier value 
     chain' means local and regional supply networks that link 
     independent producers with businesses and cooperatives that 
     market value-added agricultural products in a manner that--
       ``(A) targets and strengthens the profitability and 
     competitiveness of small and medium-sized farms and ranches 
     that are structured as a family farm; and
       ``(B) obtains agreement from an eligible agricultural 
     producer group, farmer or rancher cooperative, or majority-
     controlled producer-based business venture that is engaged in 
     the value chain on a marketing strategy.
       ``(4) Socially disadvantaged farmer or rancher.--The term 
     `socially disadvantaged farmer or rancher' has the meaning 
     given the term in section 355(e) of the Consolidated Farm and 
     Rural Development Act (7 U.S.C. 2003(e)).
       ``(5) Value-added agricultural product.--The term `value-
     added agricultural product' means any agricultural commodity 
     or product that--
       ``(A)(i) has undergone a change in physical state;
       ``(ii) was produced in a manner that enhances the value of 
     the agricultural commodity or product, as demonstrated 
     through a business plan that shows the enhanced value, as 
     determined by the Secretary;
       ``(iii) is physically segregated in a manner that results 
     in the enhancement of the value of the agricultural commodity 
     or product;
       ``(iv) is a source of farm- or ranch-based renewable 
     energy, including E-85 fuel; or
       ``(v) is aggregated and marketed as a locally-produced 
     agricultural food product; and
       ``(B) as a result of the change in physical state or the 
     manner in which the agricultural commodity or product was 
     produced, marketed, or segregated--
       ``(i) the customer base for the agricultural commodity or 
     product is expanded; and
       ``(ii) a greater portion of the revenue derived from the 
     marketing, processing, or physical segregation of the 
     agricultural commodity or product is available to the 
     producer of the commodity or product.''.
       (b) Grant Program.--Section 231(b) of the Agricultural Risk 
     Protection Act of 2000 (7 U.S.C. 1621 note; Public Law 106-
     224) is amended--
       (1) in paragraph (1), by striking ``paragraph (4)'' and 
     inserting ``paragraph (7)''; and
       (2) by striking paragraph (4) and inserting the following:
       ``(4) Term.--A grant under this subsection shall have a 
     term that does not exceed 3 years.
       ``(5) Simplified application.--The Secretary shall offer a 
     simplified application form and process for project proposals 
     requesting less than $50,000.
       ``(6) Priority.--In awarding grants under this subsection, 
     the Secretary shall give priority to projects that contribute 
     to increasing opportunities for--
       ``(A) beginning farmers or ranchers;
       ``(B) socially disadvantaged farmers or ranchers; and
       ``(C) operators of small- and medium-sized farms and 
     ranches that are structured as a family farm.
       ``(7) Funding.--
       ``(A) Mandatory funding.--On October 1, 2008, of the funds 
     of the Commodity Credit Corporation, the Secretary shall make 
     available to carry out this subsection $15,000,000, to remain 
     available until expended.
       ``(B) Discretionary funding.--There is authorized to be 
     appropriated to carry out this subsection $40,000,000 for 
     each of fiscal years 2008 through 2012.
       ``(C) Reservation of funds for projects to benefit 
     beginning farmers or ranchers, socially disadvantaged farmers 
     or ranchers, and mid-tier value chains.--
       ``(i) In general.--The Secretary shall reserve 10 percent 
     of the amounts made available for each fiscal year under this 
     paragraph to fund projects that benefit beginning farmers or 
     ranchers or socially disadvantaged farmers or ranchers.
       ``(ii) Mid-tier value chains.--The Secretary shall reserve 
     10 percent of the amounts made available for each fiscal year 
     under this paragraph to fund applications of eligible 
     entities described in paragraph (1) that propose to develop 
     mid-tier value chains.
       ``(iii) Unobligated amounts.--Any amounts in the reserves 
     for a fiscal year established under clauses (i) and (ii) that 
     are not obligated by June 30 of the fiscal year shall be 
     available to the Secretary to make grants under this 
     subsection to eligible entities in any State, as determined 
     by the Secretary.''.

     SEC. 6203. AGRICULTURE INNOVATION CENTER DEMONSTRATION 
                   PROGRAM.

       Section 6402 of the Farm Security and Rural Investment Act 
     of 2002 (7 U.S.C. 1621 note; Public Law 107-171) is amended 
     by striking subsection (i) and inserting the following:
       ``(i) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Secretary to carry out this section 
     $6,000,000 for each of fiscal years 2008 through 2012.''.

     SEC. 6204. RURAL FIREFIGHTERS AND EMERGENCY MEDICAL SERVICE 
                   ASSISTANCE PROGRAM.

       Section 6405 of the Farm Security and Rural Investment Act 
     of 2002 (7 U.S.C. 2655) is amended to read as follows:

     ``SEC. 6405. RURAL FIREFIGHTERS AND EMERGENCY MEDICAL SERVICE 
                   ASSISTANCE PROGRAM.

       ``(a) Definition of Emergency Medical Services.--In this 
     section:
       ``(1) In general.--The term `emergency medical services' 
     means resources used by a public or nonprofit entity to 
     deliver medical care outside of a medical facility under 
     emergency conditions that occur as a result of--
       ``(A) the condition of a patient; or
       ``(B) a natural disaster or related condition.
       ``(2) Inclusion.--The term `emergency medical services' 
     includes services (whether compensated or volunteer) 
     delivered by an emergency medical services provider or other 
     provider recognized by the State involved that is licensed or 
     certified by the State as--
       ``(A) an emergency medical technician or the equivalent (as 
     determined by the State);
       ``(B) a registered nurse;
       ``(C) a physician assistant; or
       ``(D) a physician that provides services similar to 
     services provided by such an emergency medical services 
     provider.
       ``(b) Grants.--The Secretary shall award grants to eligible 
     entities--
       ``(1) to enable the entities to provide for improved 
     emergency medical services in rural areas; and
       ``(2) to pay the cost of training firefighters and 
     emergency medical personnel in firefighting, emergency 
     medical practices, and responding to hazardous materials and 
     bioagents in rural areas.
       ``(c) Eligibility.--To be eligible to receive a grant under 
     this section, an entity shall--
       ``(1) be--
       ``(A) a State emergency medical services office;
       ``(B) a State emergency medical services association;
       ``(C) a State office of rural health or an equivalent 
     agency;
       ``(D) a local government entity;
       ``(E) an Indian tribe (as defined in section 4 of the 
     Indian Self-Determination and Education Assistance Act (25 
     U.S.C. 450b));
       ``(F) a State or local ambulance provider; or
       ``(G) any other public or nonprofit entity determined 
     appropriate by the Secretary; and
       ``(2) prepare and submit to the Secretary an application at 
     such time, in such manner, and containing such information as 
     the Secretary may require, that includes--
       ``(A) a description of the activities to be carried out 
     under the grant; and
       ``(B) an assurance that the applicant will comply with the 
     matching requirement of subsection (f).
       ``(d) Use of Funds.--An entity shall use amounts received 
     under a grant made under subsection (b) only in a rural 
     area--
       ``(1) to hire or recruit emergency medical service 
     personnel;
       ``(2) to recruit or retain volunteer emergency medical 
     service personnel;
       ``(3) to train emergency medical service personnel in 
     emergency response, injury prevention, safety awareness, or 
     other topics relevant to the delivery of emergency medical 
     services;
       ``(4) to fund training to meet State or Federal 
     certification requirements;
       ``(5) to provide training for firefighters or emergency 
     medical personnel for improvements to the training facility, 
     equipment, curricula, or personnel;
       ``(6) to develop new ways to educate emergency health care 
     providers through the use of technology-enhanced educational 
     methods (such as distance learning);
       ``(7) to acquire emergency medical services vehicles, 
     including ambulances;

[[Page H3492]]

       ``(8) to acquire emergency medical services equipment, 
     including cardiac defibrillators;
       ``(9) to acquire personal protective equipment for 
     emergency medical services personnel as required by the 
     Occupational Safety and Health Administration; or
       ``(10) to educate the public concerning cardiopulmonary 
     resuscitation (CPR), first aid, injury prevention, safety 
     awareness, illness prevention, or other related emergency 
     preparedness topics.
       ``(e) Preference.--In awarding grants under this section, 
     the Secretary shall give preference to--
       ``(1) applications that reflect a collaborative effort by 2 
     or more of the entities described in subparagraphs (A) 
     through (G) of subsection (c)(1); and
       ``(2) applications submitted by entities that intend to use 
     amounts provided under the grant to fund activities described 
     in any of paragraphs (1) through (5) of subsection (d).
       ``(f) Matching Requirement.--The Secretary may not make a 
     grant under this section to an entity unless the entity makes 
     available (directly or through contributions from other 
     public or private entities) non-Federal contributions toward 
     the activities to be carried out under the grant in an amount 
     equal to at least 5 percent of the amount received under the 
     grant.
       ``(g) Authorization of Appropriations.--
       ``(1) In general.--There is authorized to be appropriated 
     to the Secretary to carry out this section not more than 
     $30,000,000 for each of fiscal years 2008 through 2012.
       ``(2) Administrative costs.--Not more than 5 percent of the 
     amount appropriated under paragraph (1) for a fiscal year may 
     be used for administrative expenses incurred in carrying out 
     this section.''.

     SEC. 6205. INSURANCE OF LOANS FOR HOUSING AND RELATED 
                   FACILITIES FOR DOMESTIC FARM LABOR.

       Section 514(f)(3) of the Housing Act of 1949 (42 U.S.C. 
     1484(f)(3)) is amended by striking ``or the handling of such 
     commodities in the unprocessed stage'' and inserting ``, the 
     handling of agricultural or aquacultural commodities in the 
     unprocessed stage, or the processing of agricultural or 
     aquacultural commodities''.

     SEC. 6206. STUDY OF RURAL TRANSPORTATION ISSUES.

       (a) In General.--The Secretary of Agriculture and the 
     Secretary of Transportation shall jointly conduct a study of 
     transportation issues regarding the movement of agricultural 
     products, domestically produced renewable fuels, and 
     domestically produced resources for the production of 
     electricity for rural areas of the United States, and 
     economic development in those areas.
       (b) Inclusions.--The study shall include an examination 
     of--
       (1) the importance of freight transportation, including 
     rail, truck, and barge, to--
       (A) the delivery of equipment, seed, fertilizer, and other 
     such products important to the development of agricultural 
     commodities and products;
       (B) the movement of agricultural commodities and products 
     to market;
       (C) the delivery of ethanol and other renewable fuels;
       (D) the delivery of domestically produced resources for use 
     in the generation of electricity for rural areas;
       (E) the location of grain elevators, ethanol plants, and 
     other facilities;
       (F) the development of manufacturing facilities in rural 
     areas; and
       (G) the vitality and economic development of rural 
     communities;
       (2) the sufficiency in rural areas of transportation 
     capacity, the sufficiency of competition in the 
     transportation system, the reliability of transportation 
     services, and the reasonableness of transportation rates;
       (3) the sufficiency of facility investment in rural areas 
     necessary for efficient and cost-effective transportation; 
     and
       (4) the accessibility to shippers in rural areas of Federal 
     processes for the resolution of grievances arising within 
     various transportation modes.
       (c) Report to Congress.--Not later than 1 year after the 
     date of enactment of this Act, the Secretary and the 
     Secretary of Transportation shall submit to Congress a report 
     that contains the results of the study required by subsection 
     (a).

                 Subtitle D--Housing Assistance Council

     SEC. 6301. SHORT TITLE.

       This subtitle may be cited as the ``Housing Assistance 
     Council Authorization Act of 2008''.

     SEC. 6302. ASSISTANCE TO HOUSING ASSISTANCE COUNCIL.

       (a) Use.--The Secretary of Housing and Urban Development 
     may provide financial assistance to the Housing Assistance 
     Council for use by the Council to develop the ability and 
     capacity of community-based housing development organizations 
     to undertake community development and affordable housing 
     projects and programs in rural areas. Assistance provided by 
     the Secretary under this section may be used by the Housing 
     Assistance Council for--
       (1) technical assistance, training, support, research, and 
     advice to develop the business and administrative 
     capabilities of rural community-based housing development 
     organizations;
       (2) loans, grants, or other financial assistance to rural 
     community-based housing development organizations to carry 
     out community development and affordable housing activities 
     for low- and moderate-income families; and
       (3) such other activities as may be determined by the 
     Secretary of Housing and Urban Development and the Housing 
     Assistance Council.
       (b) Authorization of Appropriations.--There is authorized 
     to be appropriated for financial assistance under this 
     section for the Housing Assistance Council $10,000,000 for 
     each of fiscal years 2009 through 2011.

     SEC. 6303. AUDITS AND REPORTS.

       (a) Audit.--
       (1) In general.--The financial transactions and activities 
     of the Housing Assistance Council shall be audited annually 
     by an independent certified public accountant or an 
     independent licensed public accountant certified or licensed 
     by a regulatory authority of a State or other political 
     subdivision of the United States.
       (2) Requirements of audits.--The Comptroller General of the 
     United States may rely on any audit completed under paragraph 
     (1), if the audit complies with--
       (A) the annual programmatic and financial examination 
     requirements established in OMB Circular A-133; and
       (B) generally accepted government auditing standards.
       (3) Report to congress.--The Comptroller General shall 
     submit to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Financial Services 
     of the House of Representative a report detailing each audit 
     completed under paragraph (1).
       (b) GAO Report.--The Comptroller General of the United 
     States shall conduct a study and submit a report to the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate and the Committee on Financial Services of the House 
     of Representative on the use of any funds appropriated to the 
     Housing Assistance Council over the past 7 years.

     SEC. 6304. PERSONS NOT LAWFULLY PRESENT IN THE UNITED STATES.

       Aliens who are not lawfully present in the United States 
     shall be ineligible for financial assistance under this 
     subtitle, as provided and defined by section 214 of the 
     Housing and Community Development Act of 1980 (42 U.S.C. 
     1436a). Nothing in this subtitle shall be construed to alter 
     the restrictions or definitions in such section 214.

     SEC. 6305. LIMITATION ON USE OF AUTHORIZED AMOUNTS.

       None of the amounts authorized by this subtitle may be used 
     to lobby or retain a lobbyist for the purpose of influencing 
     a Federal, State, or local governmental entity or officer.

                TITLE VII--RESEARCH AND RELATED MATTERS

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

     SEC. 7101. DEFINITIONS.

       (a) In General.--Section 1404 of the National Agricultural 
     Research, Extension, and Teaching Policy Act of 1977 (7 
     U.S.C. 3103) is amended--
       (1) in paragraph (4)--
       (A) by redesignating subparagraphs (A) through (E) as 
     clauses (i) through (v), respectively;
       (B) by striking ``(4) The terms'' and inserting the 
     following:
       ``(4) College and university.--
       ``(A) In general.--The terms''; and
       (C) by adding at the end the following:
       ``(B) Inclusions.--The terms `college' and `university' 
     include a research foundation maintained by a college or 
     university described in subparagraph (A).'';
       (2) by redesignating paragraphs (5) through (8), (9) 
     through (11), (12) through (14), (15), (16), (17), and (18) 
     as paragraphs (6) through (9), (11) through (13), (15) 
     through (17), (20), (5), (18), and (19), respectively, and 
     moving the paragraphs so as to appear in alphabetical and 
     numerical order;
       (3) in paragraph (9) (as redesignated by paragraph (2))--
       (A) by striking ``renewable natural resources'' and 
     inserting ``renewable energy and natural resources''; and
       (B) by striking subparagraph (F) and inserting the 
     following:
       ``(F) Soil, water, and related resource conservation and 
     improvement.'';
       (4) by inserting after paragraph (9) (as so redesignated) 
     the following:
       ``(10) Hispanic-serving agricultural colleges and 
     universities.--
       ``(A) In general.--The term `Hispanic-serving agricultural 
     colleges and universities' means colleges or universities 
     that--
       ``(i) qualify as Hispanic-serving institutions; and
       ``(ii) offer associate, bachelors, or other accredited 
     degree programs in agriculture-related fields.
       ``(B) Exception.--The term `Hispanic-serving agricultural 
     colleges and universities' does not include 1862 institutions 
     (as defined in section 2 of the Agricultural Research, 
     Extension, and Education Reform Act of 1998 (7 U.S.C. 
     7601)).'';
       (5) by striking paragraph (11) (as so redesignated) and 
     inserting the following:
       ``(11) Hispanic-serving institution.--The term `Hispanic-
     serving institution' has the meaning given the term in 
     section 502 of the Higher Education Act of 1965 (20 U.S.C. 
     1101a).''; and
       (6) by inserting after paragraph (13) (as so redesignated) 
     the following:
       ``(14) NLGCA institution; non-land-grant college of 
     agriculture.--
       ``(A) In general.--The terms `NLGCA Institution' and `non-
     land-grant college of agriculture' mean a public college or 
     university offering a baccalaureate or higher degree in the 
     study of agriculture or forestry.
       ``(B) Exclusions.--The terms `NLGCA Institution' and `non-
     land-grant college of agriculture' do not include--
       ``(i) Hispanic-serving agricultural colleges and 
     universities; or
       ``(ii) any institution designated under--

       ``(I) the Act of July 2, 1862 (commonly known as the `First 
     Morrill Act'; 7 U.S.C. 301 et seq.);
       ``(II) the Act of August 30, 1890 (commonly known as the 
     `Second Morrill Act') (7 U.S.C. 321 et seq.);
       ``(III) the Equity in Educational Land-Grant Status Act of 
     1994 (Public Law 103-382; 7 U.S.C. 301 note); or
       ``(IV) Public Law 87-788 (commonly known as the `McIntire-
     Stennis Cooperative Forestry Act') (16 U.S.C. 582a et 
     seq.).''.

[[Page H3493]]

       (b) Conforming Amendments.--
       (1) Section 2(3) of the Research Facilities Act (7 U.S.C. 
     390(3)) is amended by striking ``section 1404(8) of the 
     National Agricultural Research, Extension, and Teaching 
     Policy Act of 1977 (7 U.S.C. 3103(8))'' and inserting 
     ``section 1404 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103)''.
       (2) Section 2(k) of the Competitive, Special, and 
     Facilities Research Grant Act (7 U.S.C. 450i(k)) is amended 
     in the second sentence by striking ``section 1404(17) of the 
     National Agricultural Research, Extension, and Teaching 
     Policy Act of 1977 (7 U.S.C. 3103(17))'' and inserting 
     ``section 1404 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103)''.
       (3) Section 18(a)(3)(B) of the Food and Nutrition Act of 
     2008 (7 U.S.C. 2027(a)(3)(B)) is amended by striking 
     ``section 1404(5) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 
     3103(5)))'' and inserting ``section 1404 of the National 
     Agricultural Research, Extension, and Teaching Policy Act of 
     1977 (7 U.S.C. 3103))''.
       (4) Section 1473 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3319) is 
     amended in the first sentence by striking ``section 1404(16) 
     of this title'' and inserting ``section 1404(18)''.
       (5) Section 1619(b) of the Food, Agriculture, Conservation, 
     and Trade Act of 1990 (7 U.S.C. 5801(b)) is amended--
       (A) in paragraph (1), by striking ``section 1404(17) of the 
     National Agricultural Research, Extension, and Teaching 
     Policy Act of 1977 (7 U.S.C. 3103(17))'' and inserting 
     ``section 1404 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103)'';
       (B) in paragraph (5), by striking ``section 1404(7) of the 
     National Agricultural Research, Extension, and Teaching 
     Policy Act of 1977 (7 U.S.C. 3103(7))'' and inserting 
     ``section 1404 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103)''; 
     and
       (C) in paragraph (8), by striking ``section 1404(13) of the 
     National Agricultural Research, Extension, and Teaching 
     Policy Act of 1977 (7 U.S.C. 3103(13))'' and inserting 
     ``section 1404 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103)''.
       (6) Section 125(c)(1)(C) of Public Law 100-238 (5 U.S.C. 
     8432 note) is amended by striking ``section 1404(5) of the 
     National Agricultural Research, Extension, and Teaching 
     Policy Act of 1977 (7 U.S.C. 3103(5))'' and inserting 
     ``section 1404 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103)''.

     SEC. 7102. NATIONAL AGRICULTURAL RESEARCH, EXTENSION, 
                   EDUCATION, AND ECONOMICS ADVISORY BOARD.

       (a) In General.--Section 1408 of the National Agricultural 
     Research, Extension, and Teaching Policy Act of 1977 (7 
     U.S.C. 3123) is amended--
       (1) in subsection (b)--
       (A) in paragraph (1), by striking ``31'' and inserting 
     ``25''; and
       (B) by striking paragraph (3) and inserting the following:
       ``(3) Membership categories.--The Advisory Board shall 
     consist of members from each of the following categories:
       ``(A) 1 member representing a national farm organization.
       ``(B) 1 member representing farm cooperatives.
       ``(C) 1 member actively engaged in the production of a food 
     animal commodity, recommended by a coalition of national 
     livestock organizations.
       ``(D) 1 member actively engaged in the production of a 
     plant commodity, recommended by a coalition of national crop 
     organizations.
       ``(E) 1 member actively engaged in aquaculture, recommended 
     by a coalition of national aquacultural organizations.
       ``(F) 1 member representing a national food animal science 
     society.
       ``(G) 1 member representing a national crop, soil, 
     agronomy, horticulture, plant pathology, or weed science 
     society.
       ``(H) 1 member representing a national food science 
     organization.
       ``(I) 1 member representing a national human health 
     association.
       ``(J) 1 member representing a national nutritional science 
     society.
       ``(K) 1 member representing the land-grant colleges and 
     universities eligible to receive funds under the Act of July 
     2, 1862 (7 U.S.C. 301 et seq.).
       ``(L) 1 member representing the land-grant colleges and 
     universities eligible to receive funds under the Act of 
     August 30, 1890 (7 U.S.C. 321 et seq.), including Tuskegee 
     University.
       ``(M) 1 member representing the 1994 Institutions (as 
     defined in section 532 of the Equity in Educational Land-
     Grant Status Act of 1994 (7 U.S.C. 301 note; Public Law 103-
     382)).
       ``(N) 1 member representing NLGCA Institutions.
       ``(O) 1 member representing Hispanic-serving institutions.
       ``(P) 1 member representing the American Colleges of 
     Veterinary Medicine.
       ``(Q) 1 member engaged in the transportation of food and 
     agricultural products to domestic and foreign markets.
       ``(R) 1 member representing food retailing and marketing 
     interests.
       ``(S) 1 member representing food and fiber processors.
       ``(T) 1 member actively engaged in rural economic 
     development.
       ``(U) 1 member representing a national consumer interest 
     group.
       ``(V) 1 member representing a national forestry group.
       ``(W) 1 member representing a national conservation or 
     natural resource group.
       ``(X) 1 member representing private sector organizations 
     involved in international development.
       ``(Y) 1 member representing a national social science 
     association.'';
       (2) in subsection (g)(1), by striking ``$350,000'' and 
     inserting ``$500,000''; and
       (3) in subsection (h), by striking ``2007'' and inserting 
     ``2012''.
       (b) No Effect on Terms.--Nothing in this section or any 
     amendment made by this section affects the term of any member 
     of the National Agricultural Research, Extension, Education, 
     and Economics Advisory Board serving as of the date of 
     enactment of this Act.

     SEC. 7103. SPECIALTY CROP COMMITTEE REPORT.

       Section 1408A(c) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 
     3123a(c)) is amended by adding at the end the following:
       ``(4) Analyses of changes in macroeconomic conditions, 
     technologies, and policies on specialty crop production and 
     consumption, with particular focus on the effect of those 
     changes on the financial stability of producers.
       ``(5) Development of data that provide applied information 
     useful to specialty crop growers, their associations, and 
     other interested beneficiaries in evaluating that industry 
     from a regional and national perspective.''.

     SEC. 7104. RENEWABLE ENERGY COMMITTEE.

       The National Agricultural Research, Extension, and Teaching 
     Policy Act of 1977 is amended by inserting after section 
     1408A (7 U.S.C. 3123a) the following:

     ``SEC. 1408B. RENEWABLE ENERGY COMMITTEE.

       ``(a) Initial Members.--Not later than 90 days after the 
     date of enactment of this section, the executive committee of 
     the Advisory Board shall establish and appoint the initial 
     members of a permanent renewable energy committee.
       ``(b) Duties.--The permanent renewable energy committee 
     shall study the scope and effectiveness of research, 
     extension, and economics programs affecting the renewable 
     energy industry.
       ``(c) Nonadvisory Board Members.--
       ``(1) In general.--An individual who is not a member of the 
     Advisory Board may be appointed as a member of the renewable 
     energy committee.
       ``(2) Service.--A member of the renewable energy committee 
     shall serve at the discretion of the executive committee.
       ``(d) Report by Renewable Energy Committee.--Not later than 
     180 days after the date of establishment of the renewable 
     energy committee, and annually thereafter, the renewable 
     energy committee shall submit to the Advisory Board a report 
     that contains the findings and any recommendations of the 
     renewable energy committee with respect to the study 
     conducted under subsection (b).
       ``(e) Consultation.--In carrying out the duties described 
     in subsection (b), the renewable energy committee shall 
     consult with the Biomass Research and Development Technical 
     Advisory Committee established under section 9008(d) of the 
     Biomass Research and Development Act of 2000 (7 U.S.C. 8605).
       ``(f) Matters To Be Considered in Budget Recommendation.--
     In preparing the annual budget recommendations for the 
     Department, the Secretary shall take into consideration those 
     findings and recommendations contained in the most recent 
     report of the renewable energy committee under subsection (d) 
     that are developed by the Advisory Committee.
       ``(g) Report by the Secretary.--In the budget material 
     submitted to Congress by the Secretary in connection with the 
     budget submitted pursuant to section 1105 of title 31, United 
     States Code, for a fiscal year, the Secretary shall include a 
     report that describes the ways in which the Secretary 
     addressed each recommendation of the renewable energy 
     committee described in subsection (f).''.

     SEC. 7105. VETERINARY MEDICINE LOAN REPAYMENT.

       (a) In General.--Section 1415A of the National Agricultural 
     Research, Extension, and Teaching Policy Act of 1977 (7 
     U.S.C. 3151a) is amended--
       (1) by striking subsection (b) and inserting the following:
       ``(b) Determination of Veterinarian Shortage Situations.--
     In determining `veterinarian shortage situations', the 
     Secretary may consider--
       ``(1) geographical areas that the Secretary determines have 
     a shortage of veterinarians; and
       ``(2) areas of veterinary practice that the Secretary 
     determines have a shortage of veterinarians, such as food 
     animal medicine, public health, epidemiology, and food 
     safety.'';
       (2) in subsection (c), by adding at the end the following:
       ``(8) Priority.--In administering the program, the 
     Secretary shall give priority to agreements with 
     veterinarians for the practice of food animal medicine in 
     veterinarian shortage situations.'';
       (3) by redesignating subsection (d) as subsection (f); and
       (4) by inserting after subsection (c) the following:
       ``(d) Use of Funds.--None of the funds appropriated to the 
     Secretary under subsection (f) may be used to carry out 
     section 5379 of title 5, United States Code.
       ``(e) Regulations.--Notwithstanding subchapter II of 
     chapter 5 of title 5, United States Code, not later than 270 
     days after the date of enactment of this subsection, the 
     Secretary shall promulgate regulations to carry out this 
     section.''.
       (b) Disapproval of Transfer of Funds.--Congress disapproves 
     the transfer of funds from the Cooperative State Research, 
     Education, and Extension Service to the Food Safety and 
     Inspection Service described in the notice of use of funds 
     for implementation of the veterinary medicine loan repayment 
     program authorized by the

[[Page H3494]]

     National Veterinary Medical Service Act (72 Fed. Reg. 48609 
     (August 24, 2007)), and such funds shall be rescinded on the 
     date of enactment of this Act and made available to the 
     Secretary, without further appropriation or fiscal year 
     limitation, for use only in accordance with section 1415A of 
     the National Agricultural Research, Extension, and Teaching 
     Policy Act of 1977 (7 U.S.C. 3151a) (as amended by subsection 
     (a)).

     SEC. 7106. ELIGIBILITY OF UNIVERSITY OF THE DISTRICT OF 
                   COLUMBIA FOR GRANTS AND FELLOWSHIPS FOR FOOD 
                   AND AGRICULTURAL SCIENCES EDUCATION.

       Section 1417 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3152) is 
     amended--
       (1) in the matter preceding paragraph (1) of subsection 
     (b), by inserting ``(including the University of the District 
     of Columbia)'' after ``land-grant colleges and 
     universities''; and
       (2) in subsection (d)(2), by inserting ``(including the 
     University of the District of Columbia)'' after 
     ``universities''.

     SEC. 7107. GRANTS TO 1890 SCHOOLS TO EXPAND EXTENSION 
                   CAPACITY.

       Section 1417(b)(4) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 
     3152(b)(4)) is amended by striking ``teaching and research'' 
     and inserting ``teaching, research, and extension''.

     SEC. 7108. EXPANSION OF FOOD AND AGRICULTURAL SCIENCES 
                   AWARDS.

       Section 1417(i) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3152(i)) 
     is amended--
       (1) in the subsection heading, by striking ``Teaching 
     Awards'' and inserting ``Teaching, Extension, and Research 
     Awards''; and
       (2) by striking paragraph (1) and inserting the following:
       ``(1) Establishment.--
       ``(A) In general.--The Secretary shall establish a National 
     Food and Agricultural Sciences Teaching, Extension, and 
     Research Awards program to recognize and promote excellence 
     in teaching, extension, and research in the food and 
     agricultural sciences at a college or university.
       ``(B) Minimum requirement.--The Secretary shall make at 
     least 1 cash award in each fiscal year to a nominee selected 
     by the Secretary for excellence in each of the areas of 
     teaching, extension, and research of food and agricultural 
     science at a college or university.''.

     SEC. 7109. GRANTS AND FELLOWSHIPS FOR FOOD AND AGRICULTURAL 
                   SCIENCES EDUCATION.

       (a) Education Teaching Programs.--Section 1417(j) of the 
     National Agricultural Research, Extension, and Teaching 
     Policy Act of 1977 (7 U.S.C. 3152(j)) is amended--
       (1) in the subsection heading, by striking ``Secondary 
     Education and 2-Year Postsecondary Education Teaching 
     Programs'' and inserting ``Secondary Education, 2-Year 
     Postsecondary Education, and Agriculture in the K-12 
     Classroom''; and
       (2) in paragraph (3)--
       (A) by striking ``secondary schools, and institutions of 
     higher education that award an associate's degree'' and 
     inserting ``secondary schools, institutions of higher 
     education that award an associate's degree, other 
     institutions of higher education, and nonprofit 
     organizations'';
       (B) in subparagraph (E), by striking ``and'' at the end;
       (C) in subparagraph (F), by striking the period at the end 
     and inserting ``; and''; and
       (D) by adding at the end the following:
       ``(G) to support current agriculture in the classroom 
     programs for grades K-12.''.
       (b) Report.--Section 1417 of the National Agricultural 
     Research, Extension, and Teaching Policy Act of 1977 (7 
     U.S.C. 3152) is amended--
       (1) by redesignating subsection (l) as subsection (m); and
       (2) by inserting after subsection (k) the following:
       ``(l) Report.--The Secretary shall submit to the Committee 
     on Agriculture of the House of Representatives and the 
     Committee on Agriculture, Nutrition, and Forestry of the 
     Senate a biennial report detailing the distribution of funds 
     used to implement the teaching programs under subsection 
     (j).''.
       (c) Authorization of Appropriations.--Section 1417(m) of 
     the National Agricultural Research, Extension, and Teaching 
     Policy Act of 1977 (as redesignated by subsection (b)(1)) is 
     amended by striking ``2007'' and inserting ``2012''.
       (d) Effective Date.--The amendments made by subsection (a) 
     take effect on October 1, 2008.

     SEC. 7110. GRANTS FOR RESEARCH ON PRODUCTION AND MARKETING OF 
                   ALCOHOLS AND INDUSTRIAL HYDROCARBONS FROM 
                   AGRICULTURAL COMMODITIES AND FOREST PRODUCTS.

       (a) In General.--Section 1419 of the National Agricultural 
     Research, Extension, and Teaching Policy Act of 1977 (7 
     U.S.C. 3154) is repealed.
       (b) Conforming Amendment.--Section 1463(a) of the National 
     Agricultural Research, Extension, and Teaching Policy Act of 
     1977 (7 U.S.C. 3311(a)) is amended by striking ``1419,''.

     SEC. 7111. POLICY RESEARCH CENTERS.

       Section 1419A of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3155) is 
     amended--
       (1) in subsection (a)(1), by inserting ``(including 
     commodities, livestock, dairy, and specialty crops)'' after 
     ``agricultural sectors'';
       (2) in subsection (b), by inserting ``(including the Food 
     Agricultural Policy Research Institute, the Agricultural and 
     Food Policy Center, the Rural Policy Research Institute, and 
     the National Drought Mitigation Center)'' after ``research 
     institutions and organizations''; and
       (3) in subsection (d), by striking ``2007'' and inserting 
     ``2012''.

     SEC. 7112. EDUCATION GRANTS TO ALASKA NATIVE-SERVING 
                   INSTITUTIONS AND NATIVE HAWAIIAN-SERVING 
                   INSTITUTIONS.

       Section 759 of the Agriculture, Rural Development, Food and 
     Drug Administration, and Related Agencies Appropriations Act, 
     2000 (7 U.S.C. 3242)--
       (1) is amended--
       (A) in subsection (a)(3), by striking ``2006'' and 
     inserting ``2012''; and
       (B) in subsection (b)--
       (i) in paragraph (2)(A), by inserting before the semicolon 
     at the end the following: ``, including permitting consortia 
     to designate fiscal agents for the members of the consortia 
     and to allocate among the members funds made available under 
     this section''; and
       (ii) in paragraph (3), by striking ``2006'' and inserting 
     ``2012'';
       (2) is redesignated as section 1419B of the National 
     Agricultural Research, Extension, and Teaching Policy Act of 
     1977; and
       (3) is moved so as to appear after section 1419A of that 
     Act (7 U.S.C. 3155).

     SEC. 7113. EMPHASIS OF HUMAN NUTRITION INITIATIVE.

       Section 1424(b) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3174(b)) 
     is amended--
       (1) in paragraph (1), by striking ``and,'';
       (2) in paragraph (2), by striking the comma at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(3) proposals that examine the efficacy of current 
     agriculture policies in promoting the health and welfare of 
     economically disadvantaged populations;''.

     SEC. 7114. HUMAN NUTRITION INTERVENTION AND HEALTH PROMOTION 
                   RESEARCH PROGRAM.

       Section 1424(d) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3174(d)) 
     is amended by striking ``2007'' and inserting ``2012''.

     SEC. 7115. PILOT RESEARCH PROGRAM TO COMBINE MEDICAL AND 
                   AGRICULTURAL RESEARCH.

       Section 1424A(d) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 
     3174a(d)) is amended by striking ``2007'' and inserting 
     ``2012''.

     SEC. 7116. NUTRITION EDUCATION PROGRAM.

       (a) In General.--Section 1425 of the National Agricultural 
     Research, Extension, and Teaching Policy Act of 1977 (7 
     U.S.C. 3175) is amended--
       (1) by redesignating subsections (a) through (c) as 
     subsections (b) through (d), respectively;
       (2) by striking the section heading and designation and 
     inserting the following:

     ``SEC. 1425. NUTRITION EDUCATION PROGRAM.

       ``(a) Definition of 1862 Institution and 1890 
     Institution.--In this section, the terms `1862 Institution' 
     and `1890 Institution' have the meaning given those terms in 
     section 2 of the Agricultural Research, Extension, and 
     Education Reform Act of 1998 (7 U.S.C. 7601).'';
       (3) in subsection (b) (as redesignated by paragraph (1)), 
     by striking ``(b) The Secretary'' and inserting the 
     following:
       ``(b) Establishment.--The Secretary'';
       (4) in subsection (c) (as so redesignated), by striking 
     ``(c) In order to enable'' and inserting the following:
       ``(c) Employment and Training.--To enable'';
       (5) in subsection (d) (as redesignated by paragraph (1))--
       (A) by striking ``(d) Beginning'' and inserting the 
     following:
       ``(d) Allocation of Funding.--Beginning'';
       (B) in paragraph (2), by striking subparagraph (B) and 
     inserting the following:
       ``(B) Notwithstanding section 3(d) of the Act of May 8, 
     1914 (7 U.S.C. 343(d)), the remainder shall be allocated 
     among the States as follows:
       ``(i) $100,000 shall be distributed to each 1862 
     Institution and 1890 Institution.
       ``(ii) Subject to clause (iii), the remainder shall be 
     allocated to each State in an amount that bears the same 
     ratio to the total amount to be allocated under this clause 
     as--

       ``(I) the population living at or below 125 percent of the 
     income poverty guidelines (as prescribed by the Office of 
     Management and Budget and as adjusted pursuant to section 
     673(2) of the Community Services Block Grant Act (42 U.S.C. 
     9902(2))) in the State; bears to
       ``(II) the total population living at or below 125 percent 
     of those income poverty guidelines in all States;

     as determined by the most recent decennial census at the time 
     at which each such additional amount is first appropriated.
       ``(iii)(I) Before any allocation of funds under clause 
     (ii), for any fiscal year for which the amount of funds 
     appropriated for the conduct of the expanded food and 
     nutrition education program exceeds the amount of funds 
     appropriated for the program for fiscal year 2007, the 
     following percentage of such excess funds for the fiscal year 
     shall be allocated to the 1890 Institutions in accordance 
     with subclause (II):

       ``(aa) 10 percent for fiscal year 2009.
       ``(bb) 11 percent for fiscal year 2010.
       ``(cc) 12 percent for fiscal year 2011.
       ``(dd) 13 percent for fiscal year 2012.
       ``(ee) 14 percent for fiscal year 2013.
       ``(ff) 15 percent for fiscal year 2014 and for each fiscal 
     year thereafter.

       ``(II) Funds made available under subclause (I) shall be 
     allocated to each 1890 Institution in an amount that bears 
     the same ratio to the total amount to be allocated under this 
     clause as--

       ``(aa) the population living at or below 125 percent of the 
     income poverty guidelines (as prescribed by the Office of 
     Management and Budget and as adjusted pursuant to section 
     673(2) of the Community Services Block Grant Act (42 U.S.C. 
     9902(2))) in the State in which the 1890 Institution is 
     located; bears to

[[Page H3495]]

       ``(bb) the total population living at or below 125 percent 
     of those income poverty guidelines in all States in which 
     1890 Institutions are located;

     as determined by the most recent decennial census at the time 
     at which each such additional amount is first appropriated.
       ``(iv) Nothing in this subparagraph precludes the Secretary 
     from developing educational materials and programs for 
     persons in income ranges above the level designated in this 
     subparagraph.''; and
       (C) by striking paragraph (3); and
       (6) by adding at the end the following:
       ``(e) Complementary Administration.--The Secretary shall 
     ensure the complementary administration of the expanded food 
     and nutrition education program by 1862 Institutions and 1890 
     Institutions in a State.
       ``(f) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out the expanded food and 
     nutrition education program established under section 3(d) of 
     the Act of May 8, 1914 (7 U.S.C. 343(d)), and this section 
     $90,000,000 for each of fiscal years 2009 through 2012.''.
       (b) Conforming Amendment.--Section 1588(b) of the Food 
     Security Act of 1985 (7 U.S.C. 3175e(b)) is amended by 
     striking ``section 1425(c)(2)'' and inserting ``section 
     1425(d)(2)''.
       (c) Effective Date.--The amendments made by this section 
     take effect on October 1, 2008.

     SEC. 7117. CONTINUING ANIMAL HEALTH AND DISEASE RESEARCH 
                   PROGRAMS.

       Section 1433(a) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3195(a)) 
     is amended in the first sentence by striking ``2007'' and 
     inserting ``2012''.

     SEC. 7118. COOPERATION AMONG ELIGIBLE INSTITUTIONS.

       Section 1433 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3195) is 
     amended by adding at the end the following:
       ``(g) Cooperation Among Eligible Institutions.--The 
     Secretary, to the maximum extent practicable, shall encourage 
     eligible institutions to cooperate in setting research 
     priorities under this section through the conduct of regular 
     regional and national meetings.''.

     SEC. 7119. APPROPRIATIONS FOR RESEARCH ON NATIONAL OR 
                   REGIONAL PROBLEMS.

       Section 1434(a) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3196(a)) 
     is amended by striking ``2007'' and inserting ``2012''.

     SEC. 7120. ANIMAL HEALTH AND DISEASE RESEARCH PROGRAM.

       Section 1434(b) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3196(b)) 
     is amended by inserting after ``universities'' the following: 
     ``(including 1890 Institutions (as defined in section 2 of 
     the Agricultural Research, Extension, and Education Reform 
     Act of 1998 (7 U.S.C. 7601)))''.

     SEC. 7121. AUTHORIZATION LEVEL FOR EXTENSION AT 1890 LAND-
                   GRANT COLLEGES.

       Section 1444(a)(2) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 
     3221(a)(2)) is amended by striking ``15 percent'' and 
     inserting ``20 percent''.

     SEC. 7122. AUTHORIZATION LEVEL FOR AGRICULTURAL RESEARCH AT 
                   1890 LAND-GRANT COLLEGES.

       Section 1445(a)(2) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 
     3222(a)(2)) is amended by striking ``25 percent'' and 
     inserting ``30 percent''.

     SEC. 7123. GRANTS TO UPGRADE AGRICULTURAL AND FOOD SCIENCES 
                   FACILITIES AT 1890 LAND-GRANT COLLEGES, 
                   INCLUDING TUSKEGEE UNIVERSITY.

       Section 1447(b) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 
     3222b(b)) is amended by striking ``2007'' and inserting 
     ``2012''.

     SEC. 7124. GRANTS TO UPGRADE AGRICULTURE AND FOOD SCIENCES 
                   FACILITIES AT THE DISTRICT OF COLUMBIA LAND-
                   GRANT UNIVERSITY.

       The National Agricultural Research, Extension, and Teaching 
     Policy Act of 1977 is amended by inserting after section 1447 
     (7 U.S.C. 3222b) the following:

     ``SEC. 1447A. GRANTS TO UPGRADE AGRICULTURE AND FOOD SCIENCES 
                   FACILITIES AT THE DISTRICT OF COLUMBIA LAND-
                   GRANT UNIVERSITY.

       ``(a) Purpose.--It is the intent of Congress to assist the 
     land-grant university in the District of Columbia established 
     under section 208 of the District of Columbia Public 
     Postsecondary Education Reorganization Act (Public Law 93-
     471; 88 Stat. 1428) in efforts to acquire, alter, or repair 
     facilities or relevant equipment necessary for conducting 
     agricultural research.
       ``(b) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $750,000 for each of fiscal years 2008 through 2012.''.

     SEC. 7125. GRANTS TO UPGRADE AGRICULTURE AND FOOD SCIENCES 
                   FACILITIES AND EQUIPMENT AT INSULAR AREA LAND-
                   GRANT INSTITUTIONS.

       The National Agricultural Research, Extension, and Teaching 
     Policy Act of 1977 (7 U.S.C. 3101 et seq.) is amended by 
     inserting after section 1447A (as added by section 7124) the 
     following:

     ``SEC. 1447B. GRANTS TO UPGRADE AGRICULTURE AND FOOD SCIENCES 
                   FACILITIES AND EQUIPMENT AT INSULAR AREA LAND-
                   GRANT INSTITUTIONS.

       ``(a) Purpose.--It is the intent of Congress to assist the 
     land-grant institutions in the insular areas in efforts to 
     acquire, alter, or repair facilities or relevant equipment 
     necessary for conducting agricultural research.
       ``(b) Method of Awarding Grants.--Grants awarded pursuant 
     to this section shall be made in such amounts and under such 
     terms and conditions as the Secretary determines necessary to 
     carry out the purposes of this section.
       ``(c) Regulations.--The Secretary may promulgate such rules 
     and regulations as the Secretary considers to be necessary to 
     carry out this section.
       ``(d) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $8,000,000 for 
     each of fiscal years 2008 through 2012.''.

     SEC. 7126. NATIONAL RESEARCH AND TRAINING VIRTUAL CENTERS.

       Section 1448 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3222c) 
     is amended by striking ``2007'' each place it appears in 
     subsections (a)(1) and (f) and inserting ``2012''.

     SEC. 7127. MATCHING FUNDS REQUIREMENT FOR RESEARCH AND 
                   EXTENSION ACTIVITIES OF 1890 INSTITUTIONS.

       Section 1449(c) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 
     3222d(c)) is amended--
       (1) in the first sentence--
       (A) by striking ``for each of fiscal years 2003 through 
     2007,''; and
       (B) by inserting ``equal'' before ``matching''; and
       (2) by striking the second sentence and all that follows 
     through paragraph (5).

     SEC. 7128. HISPANIC-SERVING INSTITUTIONS.

       Section 1455 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3241) is 
     amended--
       (1) in subsection (a) by striking ``(or grants without 
     regard to any requirement for competition)'';
       (2) in subsection (b)(1), by striking ``of consortia''; and
       (3) in subsection (c)--
       (A) by striking ``$20,000,000'' and inserting 
     ``$40,000,000''; and
       (B) by striking ``2007'' and inserting ``2012''.

     SEC. 7129. HISPANIC-SERVING AGRICULTURAL COLLEGES AND 
                   UNIVERSITIES.

       (a) In General.--The National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 is amended by 
     inserting after section 1455 (7 U.S.C. 3241) the following:

     ``SEC. 1456. HISPANIC-SERVING AGRICULTURAL COLLEGES AND 
                   UNIVERSITIES.

       ``(a) Definition of Endowment Fund.--In this section, the 
     term `endowment fund' means the Hispanic-Serving Agricultural 
     Colleges and Universities Fund established under subsection 
     (b).
       ``(b) Endowment.--
       ``(1) In general.--The Secretary of the Treasury shall 
     establish in accordance with this subsection a Hispanic-
     Serving Agricultural Colleges and Universities Fund.
       ``(2) Agreements.--The Secretary of the Treasury may enter 
     into such agreements as are necessary to carry out this 
     subsection.
       ``(3) Deposit to the endowment fund.--The Secretary of the 
     Treasury shall deposit in the endowment fund any--
       ``(A) amounts made available through Acts of 
     appropriations, which shall be the endowment fund corpus; and
       ``(B) interest earned on the endowment fund corpus.
       ``(4) Investments.--The Secretary of the Treasury shall 
     invest the endowment fund corpus and income in interest-
     bearing obligations of the United States.
       ``(5) Withdrawals and expenditures.--
       ``(A) Corpus.--The Secretary of the Treasury may not make a 
     withdrawal or expenditure from the endowment fund corpus.
       ``(B) Withdrawals.--On September 30, 2008, and each 
     September 30 thereafter, the Secretary of the Treasury shall 
     withdraw the amount of the income from the endowment fund for 
     the fiscal year and warrant the funds to the Secretary of 
     Agriculture who, after making adjustments for the cost of 
     administering the endowment fund, shall distribute the 
     adjusted income as follows:
       ``(i) 60 percent shall be distributed among the Hispanic-
     serving agricultural colleges and universities on a pro rata 
     basis based on the Hispanic enrollment count of each 
     institution.
       ``(ii) 40 percent shall be distributed in equal shares to 
     the Hispanic-serving agricultural colleges and universities.
       ``(6) Endowments.--Amounts made available under this 
     subsection shall be held and considered to be granted to 
     Hispanic-serving agricultural colleges and universities to 
     establish an endowment in accordance with this subsection.
       ``(7) Authorization of appropriations.--There are 
     authorized to be appropriated to the Secretary such sums as 
     are necessary to carry out this subsection for fiscal year 
     2008 and each fiscal year thereafter.
       ``(c) Authorization for Annual Payments.--
       ``(1) In general.--For fiscal year 2008 and each fiscal 
     year thereafter, there are authorized to be appropriated to 
     the Department of Agriculture to carry out this subsection an 
     amount equal to the product obtained by multiplying--
       ``(A) $80,000; by
       ``(B) the number of Hispanic-serving agricultural colleges 
     and universities.
       ``(2) Payments.--For fiscal year 2008 and each fiscal year 
     thereafter, the Secretary of the Treasury shall pay to the 
     treasurer of each Hispanic-serving agricultural college and 
     university an amount equal to--
       ``(A) the total amount made available by appropriations 
     under paragraph (1); divided by
       ``(B) the number of Hispanic-serving agricultural colleges 
     and universities.
       ``(3) Use of funds.--
       ``(A) In general.--Amounts authorized to be appropriated 
     under this subsection shall be used in the same manner as is 
     prescribed for colleges under the Act of August 30, 1890 
     (commonly known as the `Second Morrill Act') (7 U.S.C. 321 et 
     seq.).

[[Page H3496]]

       ``(B) Relationship to other law.--Except as otherwise 
     provided in this subsection, the requirements of that Act 
     shall apply to Hispanic-serving agricultural colleges and 
     universities under this section.
       ``(d) Institutional Capacity-Building Grants.--
       ``(1) In general.--For fiscal year 2008 and each fiscal 
     year thereafter, the Secretary shall make grants to assist 
     Hispanic-serving agricultural colleges and universities in 
     institutional capacity building (not including alteration, 
     repair, renovation, or construction of buildings).
       ``(2) Criteria for institutional capacity-building 
     grants.--
       ``(A) Requirements for grants.--The Secretary shall make 
     grants under this subsection on the basis of a competitive 
     application process under which Hispanic-serving agricultural 
     colleges and universities may submit applications to the 
     Secretary at such time, in such manner, and containing such 
     information as the Secretary may require.
       ``(B) Demonstration of need.--
       ``(i) In general.--As part of an application for a grant 
     under this subsection, the Secretary shall require the 
     applicant to demonstrate need for the grant, as determined by 
     the Secretary.
       ``(ii) Other sources of funding.--The Secretary may award a 
     grant under this subsection only to an applicant that 
     demonstrates a failure to obtain funding for a project after 
     making a reasonable effort to otherwise obtain the funding.
       ``(C) Payment of non-federal share.--A grant awarded under 
     this subsection shall be made only if the recipient of the 
     grant pays a non-Federal share in an amount that is specified 
     by the Secretary and based on assessed institutional needs.
       ``(3) Authorization of appropriations.--There are 
     authorized to be appropriated to the Secretary such sums as 
     are necessary to carry out this subsection for fiscal year 
     2008 and each fiscal year thereafter.
       ``(e) Competitive Grants Program.--
       ``(1) In general.--The Secretary shall establish a 
     competitive grants program to fund fundamental and applied 
     research at Hispanic-serving agricultural colleges and 
     universities in agriculture, human nutrition, food science, 
     bioenergy, and environmental science.
       ``(2) Authorization of appropriations.--There are 
     authorized to be appropriated to the Secretary such sums as 
     are necessary to carry out this subsection for fiscal year 
     2008 and each fiscal year thereafter.''.
       (b) Extension.--Section 3 of the Smith-Lever Act (7 U.S.C. 
     343) is amended--
       (1) in subsection (b), by adding at the end the following:
       ``(4) Annual appropriation for hispanic-serving 
     agricultural colleges and universities.--
       ``(A) Authorization of appropriations.--There are 
     authorized to be appropriated to the Secretary for payments 
     to Hispanic-serving agricultural colleges and universities 
     (as defined in section 1404 of the National Agricultural 
     Research, Extension, and Teaching Policy Act of 1977 (7 
     U.S.C. 3103)) such sums as are necessary to carry out this 
     paragraph for fiscal year 2008 and each fiscal year 
     thereafter, to remain available until expended.
       ``(B) Additional amount.--Amounts made available under this 
     paragraph shall be in addition to any other amounts made 
     available under this section to States, the Commonwealth of 
     Puerto Rico, Guam, or the United States Virgin Islands.
       ``(C) Administration.--Amounts made available under this 
     paragraph shall be--
       ``(i) distributed on the basis of a competitive application 
     process to be developed and implemented by the Secretary;
       ``(ii) paid by the Secretary to the State institutions 
     established in accordance with the Act of July 2, 1862 
     (commonly known as the `First Morrill Act') (7 U.S.C. 301 et 
     seq.); and
       ``(iii) administered by State institutions through 
     cooperative agreements with the Hispanic-serving agricultural 
     colleges and universities in the State in accordance with 
     regulations promulgated by the Secretary.''; and
       (2) in subsection (f)--
       (A) in the subsection heading, by inserting ``and Hispanic-
     Serving Agricultural Colleges and Universities'' after ``1994 
     Institutions''; and
       (B) by striking ``pursuant to subsection (b)(3)'' and 
     inserting ``or Hispanic-serving agricultural colleges and 
     universities in accordance with paragraphs (3) and (4) of 
     subsection (b)''.
       (c) Conforming Amendments.--
       (1) Section 2 of the Agricultural Research, Extension, and 
     Education Reform Act of 1998 (7 U.S.C. 7601) is amended--
       (A) by redesignating paragraph (6) as paragraph (7); and
       (B) by inserting after paragraph (5) the following:
       ``(6) Hispanic-serving agricultural colleges and 
     universities.--The term `Hispanic-serving agricultural 
     colleges and universities' has the meaning given the term in 
     section 1404 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 
     3103).''.
       (2) Section 102(c) of the Agricultural Research, Extension, 
     and Education Reform Act of 1998 (7 U.S.C. 7612(c)) is 
     amended--
       (A) in the subsection heading, by inserting ``and Hispanic-
     Serving Agricultural Colleges and Universities'' after 
     ``Institutions''; and
       (B) in paragraph (1), by striking `` and 1994 Institution'' 
     and inserting ``1994 Institution, and Hispanic-serving 
     agricultural college and university''.
       (3) Section 103(e) of the Agricultural Research, Extension, 
     and Education Reform Act of 1998 (7 U.S.C. 7613(e)) is 
     amended by adding at the end the following:
       ``(3) Hispanic-serving agricultural colleges and 
     universities.--To be eligible to obtain agricultural 
     extension funds from the Secretary for an activity, each 
     Hispanic-serving agricultural college and university shall--
       ``(A) establish a process for merit review of the activity; 
     and
       ``(B) review the activity in accordance with such 
     process.''.
       (4) Section 406(b) of the Agricultural Research, Extension, 
     and Education Reform Act of 1998 (7 U.S.C. 7626(b)) is 
     amended by striking ``and 1994 Institutions'' and inserting 
     ``, 1994 Institutions, and Hispanic-serving agricultural 
     colleges and universities''.

     SEC. 7130. INTERNATIONAL AGRICULTURAL RESEARCH, EXTENSION, 
                   AND EDUCATION.

       Section 1458(a) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3291(a)) 
     is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A), by striking ``and'' after the 
     semicolon;
       (B) in subparagraph (B), by adding ``and'' at the end; and
       (C) by adding at the end the following:
       ``(C) giving priority to those institutions with existing 
     memoranda of understanding, agreements, or other formal ties 
     to United States institutions, or Federal or State 
     agencies;'';
       (2) by striking paragraph (3) and inserting the following:
       ``(3) enter into agreements with land-grant colleges and 
     universities, Hispanic-serving agricultural colleges and 
     universities, the Agency for International Development, and 
     international organizations (such as the United Nations, the 
     World Bank, regional development banks, international 
     agricultural research centers), or other organizations, 
     institutions, or individuals with comparable goals, to 
     promote and support--
       ``(A) the development of a viable and sustainable global 
     agricultural system;
       ``(B) antihunger and improved international nutrition 
     efforts; and
       ``(C) increased quantity, quality, and availability of 
     food;'';
       (3) in paragraph (7)(A), by striking ``and land-grant 
     colleges and universities'' and inserting ``, land-grant 
     colleges and universities, and Hispanic-serving agricultural 
     colleges and universities'';
       (4) in paragraph (9)--
       (A) in subparagraph (A), by striking ``or other colleges 
     and universities'' and inserting ``, Hispanic-serving 
     agricultural colleges and universities, or other colleges and 
     universities''; and
       (B) in subparagraph (D), by striking ``and'' at the end;
       (5) in paragraph (10), by striking the period at the end 
     and inserting ``; and''; and
       (6) by adding at the end the following:
       ``(11) establish a program for the purpose of providing 
     fellowships to United States or foreign students to study at 
     foreign agricultural colleges and universities working under 
     agreements provided for under paragraph (3).''.

     SEC. 7131. COMPETITIVE GRANTS FOR INTERNATIONAL AGRICULTURAL 
                   SCIENCE AND EDUCATION PROGRAMS.

       Section 1459A(c) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 
     3292b(c)) is amended by striking ``2007'' and inserting 
     ``2012''.

     SEC. 7132. ADMINISTRATION.

       (a) Limitation on Indirect Costs for Agricultural Research, 
     Education, and Extension Programs.--Section 1462(a) of the 
     National Agriculture Research, Extension, and Teaching Policy 
     Act of 1977 (7 U.S.C. 3310(a)) is amended--
       (1) by striking ``a competitive'' and inserting ``any''; 
     and
       (2) by striking ``19 percent'' and inserting ``22 
     percent''.
       (b) Auditing, Reporting, Bookkeeping, and Administrative 
     Requirements.--Section 1469(a)(3) of the National 
     Agricultural Research, Extension, and Teaching Policy Act of 
     1977 (7 U.S.C. 3315(a)(3)) is amended by striking 
     ``appropriated'' and inserting ``made available''.

     SEC. 7133. RESEARCH EQUIPMENT GRANTS.

       Section 1462A(e) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 
     3310a(e)) is amended by striking ``2007'' and inserting 
     ``2012''.

     SEC. 7134. UNIVERSITY RESEARCH.

       Section 1463 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3311) is 
     amended by striking ``2007'' each place it appears in 
     subsections (a) and (b) and inserting ``2012''.

     SEC. 7135. EXTENSION SERVICE.

       Section 1464 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3312) is 
     amended by striking ``2007'' and inserting ``2012''.

     SEC. 7136. SUPPLEMENTAL AND ALTERNATIVE CROPS.

       Section 1473D(a) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 
     3319d(a)) is amended by striking ``2007'' and inserting 
     ``2012''.

     SEC. 7137. NEW ERA RURAL TECHNOLOGY PROGRAM.

       Subtitle K of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3310 et 
     seq.) is amended by adding at the end the following:

     ``SEC. 1473E. NEW ERA RURAL TECHNOLOGY PROGRAM.

       ``(a) Definition of Community College.--In this section, 
     the term `community college' means an institution of higher 
     education (as defined in section 101 of the Higher Education 
     Act of 1965 (20 U.S.C. 1001))--
       ``(1) that admits as regular students individuals who--
       ``(A) are beyond the age of compulsory school attendance in 
     the State in which the institution is located; and

[[Page H3497]]

       ``(B) have the ability to benefit from the training offered 
     by the institution;
       ``(2) that does not provide an educational program for 
     which the institution awards a bachelor's degree or an 
     equivalent degree; and
       ``(3) that--
       ``(A) provides an educational program of not less than 2 
     years that is acceptable for full credit toward such a 
     degree; or
       ``(B) offers a 2-year program in engineering, technology, 
     mathematics, or the physical, chemical, or biological 
     sciences, designed to prepare a student to work as a 
     technician or at the semiprofessional level in engineering, 
     scientific, or other technological fields requiring the 
     understanding and application of basic engineering, 
     scientific, or mathematical principles of knowledge.
       ``(b) Functions.--
       ``(1) Establishment.--
       ``(A) In general.--The Secretary shall establish a program 
     to be known as the `New Era Rural Technology Program', to 
     make grants available for technology development, applied 
     research, and training to aid in the development of an 
     agriculture-based renewable energy workforce.
       ``(B) Support.--The initiative under this section shall 
     support the fields of--
       ``(i) bioenergy;
       ``(ii) pulp and paper manufacturing; and
       ``(iii) agriculture-based renewable energy resources.
       ``(2) Requirements for funding.--To receive funding under 
     this section, an entity shall--
       ``(A) be a community college or advanced technological 
     center, located in a rural area and in existence on the date 
     of the enactment of this section, that participates in 
     agricultural or bioenergy research and applied research;
       ``(B) have a proven record of development and 
     implementation of programs to meet the needs of students, 
     educators, and business and industry to supply the 
     agriculture-based, renewable energy or pulp and paper 
     manufacturing fields with certified technicians, as 
     determined by the Secretary; and
       ``(C) have the ability to leverage existing partnerships 
     and occupational outreach and training programs for secondary 
     schools, 4-year institutions, and relevant nonprofit 
     organizations.
       ``(c) Grant Priority.--In providing grants under this 
     section, the Secretary shall give preference to eligible 
     entities working in partnership--
       ``(1) to improve information-sharing capacity; and
       ``(2) to maximize the ability to meet the requirements of 
     this section.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as are necessary for each of fiscal years 2008 through 
     2012.''.

     SEC. 7138. CAPACITY BUILDING GRANTS FOR NLGCA INSTITUTIONS.

       Subtitle K of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3310 et 
     seq.) (as amended by section 7137) is amended by adding at 
     the end the following:

     ``SEC. 1473F. CAPACITY BUILDING GRANTS FOR NLGCA 
                   INSTITUTIONS.

       ``(a) Grant Program.--
       ``(1) In general.--The Secretary shall make competitive 
     grants to NLGCA Institutions to assist the NLGCA Institutions 
     in maintaining and expanding the capacity of the NLGCA 
     Institutions to conduct education, research, and outreach 
     activities relating to--
       ``(A) agriculture;
       ``(B) renewable resources; and
       ``(C) other similar disciplines.
       ``(2) Use of funds.--An NLGCA Institution that receives a 
     grant under paragraph (1) may use the funds made available 
     through the grant to maintain and expand the capacity of the 
     NLGCA Institution--
       ``(A) to successfully compete for funds from Federal grants 
     and other sources to carry out educational, research, and 
     outreach activities that address priority concerns of 
     national, regional, State, and local interest;
       ``(B) to disseminate information relating to priority 
     concerns to--
       ``(i) interested members of the agriculture, renewable 
     resources, and other relevant communities;
       ``(ii) the public; and
       ``(iii) any other interested entity;
       ``(C) to encourage members of the agriculture, renewable 
     resources, and other relevant communities to participate in 
     priority education, research, and outreach activities by 
     providing matching funding to leverage grant funds; and
       ``(D) through--
       ``(i) the purchase or other acquisition of equipment and 
     other infrastructure (not including alteration, repair, 
     renovation, or construction of buildings);
       ``(ii) the professional growth and development of the 
     faculty of the NLGCA Institution; and
       ``(iii) the development of graduate assistantships.
       ``(b) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as are necessary for each of fiscal years 2008 through 
     2012.''.

     SEC. 7139. BORLAUG INTERNATIONAL AGRICULTURAL SCIENCE AND 
                   TECHNOLOGY FELLOWSHIP PROGRAM.

       Subtitle K of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3310 et 
     seq.) (as amended by section 7138) is amended by adding at 
     the end the following:

     ``SEC. 1473G. BORLAUG INTERNATIONAL AGRICULTURAL SCIENCE AND 
                   TECHNOLOGY FELLOWSHIP PROGRAM.

       ``(a) Fellowship Program.--
       ``(1) In general.--The Secretary shall establish a 
     fellowship program, to be known as the `Borlaug International 
     Agricultural Science and Technology Fellowship Program,' to 
     provide fellowships for scientific training and study in the 
     United States to individuals from eligible countries (as 
     described in subsection (b)) who specialize in agricultural 
     education, research, and extension.
       ``(2) Programs.--The Secretary shall carry out the 
     fellowship program by implementing 3 programs designed to 
     assist individual fellowship recipients, including--
       ``(A) a graduate studies program in agriculture to assist 
     individuals who participate in graduate agricultural degree 
     training at a United States institution;
       ``(B) an individual career improvement program to assist 
     agricultural scientists from developing countries in 
     upgrading skills and understanding in agricultural science 
     and technology; and
       ``(C) a Borlaug agricultural policy executive leadership 
     course to assist senior agricultural policy makers from 
     eligible countries, with an initial focus on individuals from 
     sub-Saharan Africa and the independent states of the former 
     Soviet Union.
       ``(b) Eligible Countries.--An eligible country is a 
     developing country, as determined by the Secretary using a 
     gross national income per capita test selected by the 
     Secretary.
       ``(c) Purpose of Fellowships.--A fellowship provided under 
     this section shall--
       ``(1) promote food security and economic growth in eligible 
     countries by--
       ``(A) educating a new generation of agricultural 
     scientists;
       ``(B) increasing scientific knowledge and collaborative 
     research to improve agricultural productivity; and
       ``(C) extending that knowledge to users and intermediaries 
     in the marketplace; and
       ``(2) shall support--
       ``(A) training and collaborative research opportunities 
     through exchanges for entry level international agricultural 
     research scientists, faculty, and policymakers from eligible 
     countries;
       ``(B) collaborative research to improve agricultural 
     productivity;
       ``(C) the transfer of new science and agricultural 
     technologies to strengthen agricultural practice; and
       ``(D) the reduction of barriers to technology adoption.
       ``(d) Fellowship Recipients.--
       ``(1) Eligible candidates.--The Secretary may provide 
     fellowships under this section to individuals from eligible 
     countries who specialize or have experience in agricultural 
     education, research, extension, or related fields, 
     including--
       ``(A) individuals from the public and private sectors; and
       ``(B) private agricultural producers.
       ``(2) Candidate identification.--The Secretary shall use 
     the expertise of United States land-grant colleges and 
     universities and similar universities, international 
     organizations working in agricultural research and outreach, 
     and national agricultural research organizations to help 
     identify program candidates for fellowships under this 
     section from the public and private sectors of eligible 
     countries.
       ``(e) Use of Fellowships.--A fellowship provided under this 
     section shall be used--
       ``(1) to promote collaborative programs among agricultural 
     professionals of eligible countries, agricultural 
     professionals of the United States, the international 
     agricultural research system, and, as appropriate, United 
     States entities conducting research; and
       ``(2) to support fellowship recipients through programs 
     described in subsection (a)(2).
       ``(f) Program Implementation.--The Secretary shall provide 
     for the management, coordination, evaluation, and monitoring 
     of the Borlaug International Agricultural Science and 
     Technology Fellowship Program and for the individual programs 
     described in subsection (a)(2), except that the Secretary may 
     contract out to 1 or more collaborating universities the 
     management of 1 or more of the fellowship programs.
       ``(g) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     carry out this section, to remain available until 
     expended.''.

     SEC. 7140. AQUACULTURE ASSISTANCE PROGRAMS.

       Section 1477 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3324) is 
     amended by striking ``2007'' and inserting ``2012''.

     SEC. 7141. RANGELAND RESEARCH GRANTS.

       Section 1483(a) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3336(a)) 
     is amended by striking ``2007'' and inserting ``2012''.

     SEC. 7142. SPECIAL AUTHORIZATION FOR BIOSECURITY PLANNING AND 
                   RESPONSE.

       Section 1484(a) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3351(a)) 
     is amended by striking ``2007'' and inserting ``2012''.

     SEC. 7143. RESIDENT INSTRUCTION AND DISTANCE EDUCATION GRANTS 
                   PROGRAM FOR INSULAR AREA INSTITUTIONS OF HIGHER 
                   EDUCATION.

       (a) Distance Education Grants for Insular Areas.--Section 
     1490(f) of the National Agricultural Research, Extension, and 
     Teaching Policy Act of 1977 (7 U.S.C. 3362(f)) is amended by 
     striking ``2007'' and inserting ``2012''.
       (b) Resident Instruction Grants for Insular Areas.--Section 
     1491 of the National Agricultural Research, Extension, and 
     Teaching Policy Act of 1977 (7 U.S.C. 3363) is amended--
       (1) by redesignating subsection (e) as subsection (c); and
       (2) in subsection (c) (as so redesignated), by striking 
     ``2007'' and inserting ``2012''.

[[Page H3498]]

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

     SEC. 7201. NATIONAL GENETICS RESOURCES PROGRAM.

       Section 1635(b) of the Food, Agriculture, Conservation, and 
     Trade Act of 1990 (7 U.S.C. 5844(b)) is amended by striking 
     ``2007'' and inserting ``2012''.

     SEC. 7202. NATIONAL AGRICULTURAL WEATHER INFORMATION SYSTEM.

       Section 1641(c) of the Food, Agriculture, Conservation, and 
     Trade Act of 1990 (7 U.S.C. 5855(c)) is amended by striking 
     ``1991 through 1997'' and inserting ``2008 through 2012''.

     SEC. 7203. PARTNERSHIPS.

       Section 1672(d) of the Food, Agriculture, Conservation, and 
     Trade Act of 1990 (7 U.S.C. 5925(d)) is amended by striking 
     ``may'' and inserting ``shall''.

     SEC. 7204. HIGH-PRIORITY RESEARCH AND EXTENSION AREAS.

       (a) In General.--Section 1672 of the Food, Agriculture, 
     Conservation, and Trade Act of 1990 (7 U.S.C. 5925) is 
     amended--
       (1) in subsection (e)--
       (A) in paragraph (3), by striking ``and controlling 
     aflatoxin in the food and feed chains.'' and inserting ``, 
     improving, and eventually commercializing, alfatoxin controls 
     in corn and other affected agricultural products and 
     crops.'';
       (B) by striking paragraphs (1), (4), (7), (8), (15), (17), 
     (21), (23), (26), (27), (32), (34), (41), (42), (43), and 
     (45);
       (C) by redesignating paragraphs (2), (3), (5), (6), (9) 
     through (14), (16), (18) through (20), (22), (24), (25), (28) 
     through (31), (33), (35) through (40), and (44) as paragraphs 
     (1) through (29), respectively; and
       (D) by adding at the end the following:
       ``(30) Air emissions from livestock operations.--Research 
     and extension grants may be made under this section for the 
     purpose of conducting field verification tests and developing 
     mitigation options for air emissions from animal feeding 
     operations.
       ``(31) Swine genome project.--Research grants may be made 
     under this section to conduct swine genome research, 
     including the mapping of the swine genome.
       ``(32) Cattle fever tick program.--Research and extension 
     grants may be made under this section to study cattle fever 
     ticks to facilitate understanding of the role of wildlife in 
     the persistence and spread of cattle fever ticks, to develop 
     advanced methods for eradication of cattle fever ticks, and 
     to improve management of diseases relating to cattle fever 
     ticks that are associated with wildlife, livestock, and human 
     health.
       ``(33) Synthetic gypsum.--Research and extension grants may 
     be made under this section to study the uses of synthetic 
     gypsum from electric power plants to remediate soil and 
     nutrient losses.
       ``(34) Cranberry research program.--Research and extension 
     grants may be made under this section to study new 
     technologies to assist cranberry growers in complying with 
     Federal and State environmental regulations, increase 
     production, develop new growing techniques, establish more 
     efficient growing methodologies, and educate cranberry 
     producers about sustainable growth practices.
       ``(35) Sorghum research initiative.--Research and extension 
     grants may be made under this section to study the use of 
     sorghum as a bioenergy feedstock, promote diversification in, 
     and the environmental benefits of sorghum production, and 
     promote water conservation through the use of sorghum.
       ``(36) Marine shrimp farming program.--Research and 
     extension grants may be made under this section to establish 
     a research program to advance and maintain a domestic shrimp 
     farming industry in the United States.
       ``(37) Turfgrass research initiative.--Research and 
     extension grants may be made under this section to study the 
     production of turfgrass (including the use of water, 
     fertilizer, pesticides, fossil fuels, and machinery for turf 
     establishment and maintenance) and environmental protection 
     and enhancement relating to turfgrass production.
       ``(38) Agricultural worker safety research initiative.--
     Research and extension grants may be made under this 
     section--
       ``(A) to study and demonstrate methods to minimize exposure 
     of farm and ranch owners and operators, pesticide handlers, 
     and agricultural workers to pesticides, including research 
     addressing the unique concerns of farm workers resulting from 
     long-term exposure to pesticides; and
       ``(B) to develop rapid tests for on-farm use to better 
     inform and educate farmers, ranchers, and farm and ranch 
     workers regarding safe field re-entry intervals.
       ``(39) High plains aquifer region.--Research and extension 
     grants may be made under this section to carry out 
     interdisciplinary research relating to diminishing water 
     levels and increased demand for water in the High Plains 
     aquifer region.
       ``(40) Deer initiative.--Research and extension grants may 
     be made under this section to support collaborative research 
     focusing on the development of viable strategies for the 
     prevention, diagnosis, and treatment of infectious, 
     parasitic, and toxic diseases of farmed deer and the mapping 
     of the deer genome.
       ``(41) Pasture-based beef systems research initiative.--
     Research and extension grants may be made under this section 
     to study the development of forage sequences and combinations 
     for cow-calf, heifer development, stocker, and finishing 
     systems, to deliver optimal nutritive value for efficient 
     production of cattle for pasture finishing, to optimize 
     forage systems to improve marketability of pasture-finished 
     beef, and to assess the effect of forage quality on 
     reproductive fitness.
       ``(42) Agricultural practices relating to climate change.--
     Research and extension grants may be made under this section 
     for field and laboratory studies that examine the ecosystem 
     from gross to minute scales and for projects that explore the 
     relationship of agricultural practices to climate change.
       ``(43) Brucellosis control and eradication.--Research and 
     extension grants may be made under this section to conduct 
     research relating to the development of vaccines and vaccine 
     delivery systems to effectively control and eliminate 
     brucellosis in wildlife, and to assist with the controlling 
     of the spread of brucellosis from wildlife to domestic 
     animals.
       ``(44) Bighorn and domestic sheep disease mechanisms.--
     Research and extension grants may be made under this section 
     to conduct research relating to the health status of 
     (including the presence of infectious diseases in) bighorn 
     and domestic sheep under range conditions.
       ``(45) Agricultural development in the american-pacific 
     region.--Research and extension grants may be made under this 
     section to support food and agricultural science at a 
     consortium of land-grant institutions in the American-Pacific 
     region.
       ``(46) Tropical and subtropical agricultural research.--
     Research grants may be made under this section, in equal 
     dollar amounts to the Caribbean and Pacific Basins, to 
     support tropical and subtropical agricultural research, 
     including pest and disease research, at the land-grant 
     institutions in the Caribbean and Pacific regions.
       ``(47) Viral hemorrhagic septicemia.--Research and 
     extension grants may be made under this section to study--
       ``(A) the effects of viral hemorrhagic septicemia (referred 
     to in this paragraph as `VHS') on freshwater fish throughout 
     the natural and expanding range of VHS; and
       ``(B) methods for transmission and human-mediated transport 
     of VHS among waterbodies.
       ``(48) Farm and ranch safety.--Research and extension 
     grants may be made under this section to carry out projects 
     to decrease the incidence of injury and death on farms and 
     ranches, including--
       ``(A) on-site farm or ranch safety reviews;
       ``(B) outreach and dissemination of farm safety research 
     and interventions to agricultural employers, employees, 
     youth, farm and ranch families, seasonal workers, or other 
     individuals; and
       ``(C) agricultural safety education and training.
       ``(49) Women and minorities in stem fields.--Research and 
     extension grants may be made under this section to increase 
     participation by women and underrepresented minorities from 
     rural areas in the fields of science, technology, 
     engineering, and mathematics, with priority given to eligible 
     institutions that carry out continuing programs funded by the 
     Secretary.
       ``(50) Alfalfa and forage research program.--Research and 
     extension grants may be made under this section for the 
     purpose of studying improvements in alfalfa and forage 
     yields, biomass and persistence, pest pressures, the 
     bioenergy potential of alfalfa and other forages, and systems 
     to reduce losses during harvest and storage.
       ``(51) Food systems veterinary medicine.--Research grants 
     may be made under this section to address health issues that 
     affect food-producing animals, food safety, and the 
     environment, and to improve information resources, 
     curriculum, and clinical education of students with respect 
     to food animal veterinary medicine and food safety.
       ``(52) Biochar research.--Grants may be made under this 
     section for research, extension, and integrated activities 
     relating to the study of biochar production and use, 
     including considerations of agronomic and economic impacts, 
     synergies of coproduction with bioenergy, and the value of 
     soil enhancements and soil carbon sequestration.'';
       (2) by redesignating subsection (h) as subsection (j);
       (3) by inserting after subsection (g) the following:
       ``(h) Pollinator Protection.--
       ``(1) Research and extension.--
       ``(A) Grants.--Research and extension grants may be made 
     under this section--
       ``(i) to survey and collect data on bee colony production 
     and health;
       ``(ii) to investigate pollinator biology, immunology, 
     ecology, genomics, and bioinformatics;
       ``(iii) to conduct research on various factors that may be 
     contributing to or associated with colony collapse disorder, 
     and other serious threats to the health of honey bees and 
     other pollinators, including--

       ``(I) parasites and pathogens of pollinators; and
       ``(II) the sublethal effects of insecticides, herbicides, 
     and fungicides on honey bees and native and managed 
     pollinators;

       ``(iv) to develop mitigative and preventative measures to 
     improve native and managed pollinator health; and
       ``(v) to promote the health of honey bees and native 
     pollinators through habitat conservation and best management 
     practices.
       ``(B) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this paragraph $10,000,000 
     for each of fiscal years 2008 through 2012.
       ``(2) Department of agriculture capacity and 
     infrastructure.--
       ``(A) In general.--The Secretary shall, to the maximum 
     extent practicable, increase the capacity and infrastructure 
     of the Department--
       ``(i) to address colony collapse disorder and other long-
     term threats to pollinator health, including the hiring of 
     additional personnel; and
       ``(ii) to conduct research on colony collapse disorder and 
     other pollinator issues at the facilities of the Department.

[[Page H3499]]

       ``(B) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this paragraph $7,250,000 for 
     each of fiscal years 2008 through 2012.
       ``(3) Honey bee pest and pathogen surveillance.--There is 
     authorized to be appropriated to conduct a nationwide honey 
     bee pest and pathogen surveillance program $2,750,000 for 
     each of fiscal years 2008 through 2012.
       ``(4) Annual report on response to honey bee colony 
     collapse disorder.--The Secretary shall submit to the 
     Committee on Agriculture of the House of Representatives and 
     the Committee on Agriculture, Nutrition, and Forestry of the 
     Senate an annual report describing the progress made by the 
     Department of Agriculture in--
       ``(A) investigating the cause or causes of honey bee colony 
     collapse; and
       ``(B) finding appropriate strategies to reduce colony loss.
       ``(i) Regional Centers of Excellence.--
       ``(1) Establishment.--The Secretary shall prioritize 
     regional centers of excellence established for specific 
     agricultural commodities for the receipt of funding under 
     this section.
       ``(2) Composition.--A regional center of excellence shall 
     be composed of 1 or more colleges and universities (including 
     land-grant institutions, schools of forestry, schools of 
     veterinary medicine, or NLGCA Institutions (as defined in 
     section 1404 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103))) 
     that provide financial support to the regional center of 
     excellence.
       ``(3) Criteria for regional centers of excellence.--The 
     criteria for consideration to be a regional center of 
     excellence shall include efforts--
       ``(A) to ensure coordination and cost-effectiveness by 
     reducing unnecessarily duplicative efforts regarding 
     research, teaching, and extension;
       ``(B) to leverage available resources by using public/
     private partnerships among agricultural industry groups, 
     institutions of higher education, and the Federal Government;
       ``(C) to implement teaching initiatives to increase 
     awareness and effectively disseminate solutions to target 
     audiences through extension activities;
       ``(D) to increase the economic returns to rural communities 
     by identifying, attracting, and directing funds to high-
     priority agricultural issues; and
       ``(E) to improve teaching capacity and infrastructure at 
     colleges and universities (including land-grant institutions, 
     schools of forestry, and schools of veterinary medicine).''; 
     and
       (4) in subsection (j) (as redesignated by paragraph (2)), 
     by striking ``2007'' and inserting ``2012''.
       (b) Conforming Amendments.--Section 1672 of the Food, 
     Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 
     5925) is amended--
       (1) in the first sentence of subsection (a), by striking 
     ``(e), (f), and (g)'' and inserting ``(e) through (i)''; and
       (2) in subsection (b)--
       (A) in paragraph (1), by striking ``paragraphs (1), (6), 
     (7), and (11)'' and inserting ``paragraphs (4), (7), (8), and 
     (11)(B)''; and
       (B) in paragraph (2), by striking ``subsection (e)'' and 
     inserting ``subsections (e) through (i)''.

     SEC. 7205. NUTRIENT MANAGEMENT RESEARCH AND EXTENSION 
                   INITIATIVE.

       Section 1672A of the Food, Agriculture, Conservation, and 
     Trade Act of 1990 (7 U.S.C. 5925a) is amended--
       (1) in subsection (b), by striking paragraph (1) and 
     inserting the following:
       ``(1) In general.--Paragraphs (4), (7), (8), and (11)(B) of 
     subsection (b) of the Competitive, Special, and Facilities 
     Research Grant Act (7 U.S.C. 450i) shall apply with respect 
     to the making of grants under this section.'';
       (2) by striking subsection (d) and inserting the following:
       ``(d) Priority.--Following the completion of a peer review 
     process for grant proposals received under this section, the 
     Secretary shall give priority to those grant proposals that 
     involve--
       ``(1) the cooperation of multiple entities; and
       ``(2) States or regions with a high concentration of 
     livestock, dairy, or poultry operations.'';
       (3) in subsection (e)--
       (A) in paragraph (1)(B), by inserting ``and dairy and beef 
     cattle waste'' after ``swine waste''; and
       (B) by striking paragraph (5) and inserting the following:
       ``(5) Alternative uses and renewable energy.--Research and 
     extension grants may be made under this section for the 
     purpose of finding innovative methods and technologies to 
     allow agricultural operators to make use of animal waste, 
     such as use as fertilizer, methane digestion, composting, and 
     other useful byproducts.'';
       (4) by redesignating subsection (g) as subsection (f); and
       (5) in subsection (f) (as so redesignated), by striking 
     ``2007'' and inserting ``2012''.

     SEC. 7206. ORGANIC AGRICULTURE RESEARCH AND EXTENSION 
                   INITIATIVE.

       (a) In General.--Section 1672B of the Food, Agriculture, 
     Conservation, and Trade Act of 1990 (7 U.S.C. 5925b) 
     (commonly known as the ``Organic Agriculture Research and 
     Extension Initiative'') is amended--
       (1) in subsection (a)--
       (A) in paragraph (5), by striking ``and'' after the 
     semicolon;
       (B) in paragraph (6), by striking the period at the end and 
     inserting a semicolon; and
       (C) by adding at the end the following:
       ``(7) examining optimal conservation and environmental 
     outcomes relating to organically produced agricultural 
     products; and
       ``(8) developing new and improved seed varieties that are 
     particularly suited for organic agriculture.''; and
       (2) by adding at the end the following:
       ``(f) Funding.--
       ``(1) In general.--Of the funds of the Commodity Credit 
     Corporation, the Secretary shall make available to carry out 
     this section--
       ``(A) $18,000,000 for fiscal year 2009; and
       ``(B) $20,000,000 for each of fiscal years 2010 through 
     2012.
       ``(2) Additional funding.--In addition to amounts made 
     available under paragraph (1), there is authorized to be 
     appropriated to carry out this section $25,000,000 for each 
     of fiscal years 2009 through 2012.''.
       (b) Coordination.--In carrying out the amendment made by 
     this section, the Secretary shall ensure that the Division 
     Chief of the applicable Research, Education, and Extension 
     Office established under section 251 of the Department of 
     Agriculture Reorganization Act of 1994 (7 U.S.C. 6971) 
     coordinates projects and activities under this section to 
     ensure, to the maximum extent practicable, that unnecessary 
     duplication of effort is eliminated or minimized.

     SEC. 7207. AGRICULTURAL BIOENERGY FEEDSTOCK AND ENERGY 
                   EFFICIENCY RESEARCH AND EXTENSION INITIATIVE.

       Title XVI of the Food, Agriculture, Conservation, and Trade 
     Act of 1990 (7 U.S.C. 5801 et seq.) is amended by inserting 
     after section 1672B (7 U.S.C. 5925b) the following:

     ``SEC. 1672C. AGRICULTURAL BIOENERGY FEEDSTOCK AND ENERGY 
                   EFFICIENCY RESEARCH AND EXTENSION INITIATIVE.

       ``(a) Establishment and Purpose.--There is established 
     within the Department of Agriculture an agricultural 
     bioenergy feedstock and energy efficiency research and 
     extension initiative (referred to in this section as the 
     `Initiative') for the purpose of enhancing the production of 
     biomass energy crops and the energy efficiency of 
     agricultural operations.
       ``(b) Competitive Research and Extension Grants 
     Authorized.--In carrying out this section, the Secretary 
     shall make competitive grants to support research and 
     extension activities specified in subsections (c) and (d).
       ``(c) Agricultural Bioenergy Feedstock Research and 
     Extension Areas.--
       ``(1) In general.--Agricultural bioenergy feedstock 
     research and extension activities funded under the Initiative 
     shall focus on improving agricultural biomass production, 
     biomass conversion in biorefineries, and biomass use by--
       ``(A) supporting on-farm research on crop species, nutrient 
     requirements, management practices, environmental impacts, 
     and economics;
       ``(B) supporting the development and operation of on-farm, 
     integrated biomass feedstock production systems;
       ``(C) leveraging the broad scientific capabilities of the 
     Department of Agriculture and other entities in--
       ``(i) plant genetics and breeding;
       ``(ii) crop production;
       ``(iii) soil and water science;
       ``(iv) use of agricultural waste; and
       ``(v) carbohydrate, lipid, protein, and lignin chemistry, 
     enzyme development, and biochemistry; and
       ``(D) supporting the dissemination of any of the research 
     conducted under this subsection that will assist in achieving 
     the goals of this section.
       ``(2) Selection criteria.--In selecting grant recipients 
     for projects under paragraph (1), the Secretary shall 
     consider--
       ``(A) the capabilities and experiences of the applicant, 
     including--
       ``(i) research in actual field conditions; and
       ``(ii) engineering and research knowledge relating to 
     biofuels or the production of inputs for biofuel production;
       ``(B) the range of species types and cropping practices 
     proposed for study (including species types and practices 
     studied using side-by-side comparisons of those types and 
     practices);
       ``(C) the need for regional diversity among feedstocks;
       ``(D) the importance of developing multiyear data relevant 
     to the production of biomass feedstock crops;
       ``(E) the extent to which the project involves direct 
     participation of agricultural producers;
       ``(F) the extent to which the project proposal includes a 
     plan or commitment to use the biomass produced as part of the 
     project in commercial channels; and
       ``(G) such other factors as the Secretary may determine.
       ``(d) Energy-Efficiency Research and Extension Areas.--On-
     farm energy-efficiency research and extension activities 
     funded under the Initiative shall focus on developing and 
     demonstrating technologies and production practices relating 
     to--
       ``(1) improving on-farm renewable energy production;
       ``(2) encouraging efficient on-farm energy use;
       ``(3) promoting on-farm energy conservation;
       ``(4) making a farm or ranch energy-neutral; and
       ``(5) enhancing on-farm usage of advanced technologies to 
     promote energy efficiency.
       ``(e) Best Practices Database.--The Secretary shall develop 
     a best-practices database that includes information, to be 
     available to the public, on--
       ``(1) the production potential of a variety of biomass 
     crops; and
       ``(2) best practices for production, collection, 
     harvesting, storage, and transportation of biomass crops to 
     be used as a source of bioenergy.
       ``(f) Administration.--
       ``(1) In general.--Paragraphs (4), (7), (8), and (11)(B) of 
     subsection (b) of the Competitive, Special, and Facilities 
     Research Grant Act (7 U.S.C. 450i(b)) shall apply with 
     respect to making grants under this section.
       ``(2) Consultation and coordination.--The Secretary shall--
       ``(A) make the grants in consultation with the National 
     Agricultural Research, Extension, Education, and Economics 
     Advisory Board; and

[[Page H3500]]

       ``(B) coordinate projects and activities carried out under 
     the Initiative with projects and activities under section 
     9008 of the Farm Security and Rural Investment Act of 2002 to 
     ensure, to the maximum extent practicable, that--
       ``(i) unnecessary duplication of effort is eliminated or 
     minimized; and
       ``(ii) the respective strengths of the Department of 
     Agriculture and the Department of Energy are appropriately 
     used.
       ``(3) Grant priority.--The Secretary shall give priority to 
     grant applications that integrate research and extension 
     activities established under subsections (c) and (d), 
     respectively.
       ``(4) Matching funds required.--As a condition of receiving 
     a grant under this section, the Secretary shall require the 
     recipient of the grant to provide funds or in-kind support 
     from non-Federal sources in an amount that is at least equal 
     to the amount provided by the Federal Government.
       ``(5) Partnerships encouraged.--Following the completion of 
     a peer review process for grant proposals received under this 
     section, the Secretary may provide a priority to those grant 
     proposals found as a result of the peer review process--
       ``(A) to be scientifically meritorious; and
       ``(B) that involve cooperation--
       ``(i) among multiple entities; and
       ``(ii) with agricultural producers.
       ``(g) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $50,000,000 for 
     each of fiscal years 2008 through 2012.''.

     SEC. 7208. FARM BUSINESS MANAGEMENT AND BENCHMARKING.

       The Food, Agriculture, Conservation and Trade Act of 1990 
     is amended by inserting after section 1672C (as added by 
     section 7207) the following:

     ``SEC. 1672D. FARM BUSINESS MANAGEMENT.

       ``(a) In General.--The Secretary may make competitive 
     research and extension grants for the purpose of--
       ``(1) improving the farm management knowledge and skills of 
     agricultural producers; and
       ``(2) establishing and maintaining a national, publicly 
     available farm financial management database to support 
     improved farm management.
       ``(b) Selection Criteria.--In allocating funds made 
     available to carry out this section, the Secretary may give 
     priority to grants that--
       ``(1) demonstrate an ability to work directly with 
     agricultural producers;
       ``(2) collaborate with farm management and producer 
     associations;
       ``(3) address the farm management needs of a variety of 
     crops and regions of the United States; and
       ``(4) use and support the national farm financial 
     management database.
       ``(c) Administration.--Paragraphs (4), (7), (8), and 
     (11)(B) of subsection (b) of the Competitive, Special, and 
     Facilities Research Grant Act (7 U.S.C. 450i(b)) shall apply 
     with respect to the making of grants under this section.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     carry out this section.''.

     SEC. 7209. AGRICULTURAL TELECOMMUNICATIONS PROGRAM.

       Section 1673 of the Food, Agriculture, Conservation, and 
     Trade Act of 1990 (7 U.S.C. 5926) is repealed.

     SEC. 7210. ASSISTIVE TECHNOLOGY PROGRAM FOR FARMERS WITH 
                   DISABILITIES.

       Section 1680(c)(1) of the Food, Agriculture, Conservation, 
     and Trade Act of 1990 (7 U.S.C. 5933(c)(1)) is amended by 
     striking ``2007'' and inserting ``2012''.

     SEC. 7211. RESEARCH ON HONEY BEE DISEASES.

       Section 1681 of the Food, Agriculture, Conservation, and 
     Trade Act of 1990 (7 U.S.C. 5934) is repealed.

     SEC. 7212. NATIONAL RURAL INFORMATION CENTER CLEARINGHOUSE.

       Section 2381(e) of the Food, Agriculture, Conservation, and 
     Trade Act of 1990 (7 U.S.C. 3125b(e)) is amended by striking 
     ``2007'' and inserting ``2012''.

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

     SEC. 7301. PEER AND MERIT REVIEW.

       Section 103(a) of the Agricultural Research, Extension, and 
     Education Reform Act of 1998 (7 U.S.C. 7613(a)) is amended by 
     adding at the end the following:
       ``(3) Consideration.--Peer and merit review procedures 
     established under paragraphs (1) and (2) shall not take the 
     offer or availability of matching funds into 
     consideration.''.

     SEC. 7302. PARTNERSHIPS FOR HIGH-VALUE AGRICULTURAL PRODUCT 
                   QUALITY RESEARCH.

       Section 402 of the Agricultural Research, Extension, and 
     Education Reform Act of 1998 (7 U.S.C. 7622) is repealed.

     SEC. 7303. PRECISION AGRICULTURE.

       Section 403 of the Agricultural Research, Extension, and 
     Education Reform Act of 1998 (7 U.S.C. 7623) is repealed.

     SEC. 7304. BIOBASED PRODUCTS.

       (a) Pilot Project.--Section 404(e)(2) of the Agricultural 
     Research, Extension, and Education Reform Act of 1998 (7 
     U.S.C. 7624(e)(2)) is amended by striking ``2007'' and 
     inserting ``2012''.
       (b) Authorization of Appropriations.--Section 404(h) of the 
     Agricultural Research, Extension, and Education Reform Act of 
     1998 (7 U.S.C. 7624(h)) is amended by striking ``2007'' and 
     inserting ``2012''.

     SEC. 7305. THOMAS JEFFERSON INITIATIVE FOR CROP 
                   DIVERSIFICATION.

       Section 405 of the Agricultural Research, Extension, and 
     Education Reform Act of 1998 (7 U.S.C. 7625) is repealed.

     SEC. 7306. INTEGRATED RESEARCH, EDUCATION, AND EXTENSION 
                   COMPETITIVE GRANTS PROGRAM.

       Section 406(f) of the Agricultural Research, Extension, and 
     Education Reform Act of 1998 (7 U.S.C. 7626(f)) is amended by 
     striking ``2007'' and inserting ``2012''.

     SEC. 7307. FUSARIUM GRAMINEARUM GRANTS.

       Section 408 of the Agricultural Research, Extension, and 
     Education Reform Act of 1998 (7 U.S.C. 7628) is amended--
       (1) in subsection (a), in the subsection heading, by 
     striking ``Grant'' and inserting ``Grants''; and
       (2) in subsection (e), by striking ``2007'' and inserting 
     ``2012''.

     SEC. 7308. BOVINE JOHNE'S DISEASE CONTROL PROGRAM.

       Section 409(b) of the Agricultural Research, Extension, and 
     Education Reform Act of 1998 (7 U.S.C. 7629(b)) is amended by 
     striking ``2007'' and inserting ``2012''.

     SEC. 7309. GRANTS FOR YOUTH ORGANIZATIONS.

       Section 410 of the Agricultural Research, Extension, and 
     Education Reform Act of 1998 (7 U.S.C. 7630) is amended by 
     striking subsections (b) and (c) and inserting the following:
       ``(b) Flexibility.--The Secretary shall provide maximum 
     flexibility in content delivery to each organization 
     receiving funds under this section so as to ensure that the 
     unique goals of each organization, as well as the local 
     community needs, are fully met.
       ``(c) Redistribution of Funding Within Organizations 
     Authorized.--Recipients of funds under this section may 
     redistribute all or part of the funds received to individual 
     councils or local chapters within the councils without 
     further need of approval from the Secretary.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as are necessary for each of fiscal years 2008 through 
     2012.''.

     SEC. 7310. AGRICULTURAL BIOTECHNOLOGY RESEARCH AND 
                   DEVELOPMENT FOR DEVELOPING COUNTRIES.

       Section 411(c) of the Agricultural Research, Extension, and 
     Education Reform Act of 1998 (7 U.S.C. 7631(c)) is amended by 
     striking ``2007'' and inserting ``2012''.

     SEC. 7311. SPECIALTY CROP RESEARCH INITIATIVE.

       (a) In General.--Title IV of the Agricultural Research, 
     Extension, and Education Reform Act of 1998 (7 U.S.C. 7621 et 
     seq.) is amended by adding at the end the following:

     ``SEC. 412. SPECIALTY CROP RESEARCH INITIATIVE.

       ``(a) Definitions.--In this section:
       ``(1) Initiative.--The term `Initiative' means the 
     specialty crop research and extension initiative established 
     by subsection (b).
       ``(2) Specialty crop.--The term `specialty crop' has the 
     meaning given that term in section 3 of the Specialty Crops 
     Competitiveness Act of 2004 (7 U.S.C. 1621 note; Public Law 
     108-465).
       ``(b) Establishment.--There is established within the 
     Department a specialty crop research and extension initiative 
     to address the critical needs of the specialty crop industry 
     by developing and disseminating science-based tools to 
     address needs of specific crops and their regions, 
     including--
       ``(1) research in plant breeding, genetics, and genomics to 
     improve crop characteristics, such as--
       ``(A) product, taste, quality, and appearance;
       ``(B) environmental responses and tolerances;
       ``(C) nutrient management, including plant nutrient uptake 
     efficiency;
       ``(D) pest and disease management, including resistance to 
     pests and diseases resulting in reduced application 
     management strategies; and
       ``(E) enhanced phytonutrient content;
       ``(2) efforts to identify and address threats from pests 
     and diseases, including threats to specialty crop 
     pollinators;
       ``(3) efforts to improve production efficiency, 
     productivity, and profitability over the long term (including 
     specialty crop policy and marketing);
       ``(4) new innovations and technology, including improved 
     mechanization and technologies that delay or inhibit 
     ripening; and
       ``(5) methods to prevent, detect, monitor, control, and 
     respond to potential food safety hazards in the production 
     and processing of specialty crops, including fresh produce.
       ``(c) Eligible Entities.--The Secretary may carry out the 
     Initiative through--
       ``(1) Federal agencies;
       ``(2) national laboratories;
       ``(3) colleges and universities;
       ``(4) research institutions and organizations;
       ``(5) private organizations or corporations;
       ``(6) State agricultural experiment stations;
       ``(7) individuals; or
       ``(8) groups consisting of 2 or more entities described in 
     paragraphs (1) through (7).
       ``(d) Research Projects.--In carrying out this section, the 
     Secretary shall award grants on a competitive basis.
       ``(e) Administration.--
       ``(1) In general.--With respect to grants awarded under 
     subsection (d), the Secretary shall--
       ``(A) seek and accept proposals for grants;
       ``(B) determine the relevance and merit of proposals 
     through a system of peer and merit review in accordance with 
     section 103; and
       ``(C) award grants on the basis of merit, quality, and 
     relevance.
       ``(2) Term.--The term of a grant under this section may not 
     exceed 10 years.
       ``(3) Matching funds required.--The Secretary shall require 
     the recipient of a grant under this section to provide funds 
     or in-kind support from non-Federal sources in an amount that 
     is at least equal to the amount provided by the Federal 
     Government.
       ``(4) Other conditions.--The Secretary may set such other 
     conditions on the award of a grant under this section as the 
     Secretary determines to be appropriate.
       ``(f) Priorities.--In making grants under this section, the 
     Secretary shall provide a higher priority to projects that--

[[Page H3501]]

       ``(1) are multistate, multi-institutional, or 
     multidisciplinary; and
       ``(2) include explicit mechanisms to communicate results to 
     producers and the public.
       ``(g) Buildings and Facilities.--Funds made available under 
     this section shall not be used for the construction of a new 
     building or facility or the acquisition, expansion, 
     remodeling, or alteration of an existing building or facility 
     (including site grading and improvement, and architect fees).
       ``(h) Funding.--
       ``(1) In general.--Of the funds of the Commodity Credit 
     Corporation, the Secretary shall make available to carry out 
     this section $30,000,000 for fiscal year 2008 and $50,000,000 
     for each of fiscal years 2009 through 2012, from which 
     activities under each of paragraphs (1) through (5) of 
     subsection (b) shall be allocated not less than 10 percent.
       ``(2) Authorization of appropriations.--In addition to 
     funds made available under paragraph (1), there is authorized 
     to be appropriated to carry out this section $100,000,000 for 
     each of fiscal years 2008 through 2012.
       ``(3) Transfer.--Of the funds made available to the 
     Secretary under paragraph (1) for fiscal year 2008 and 
     authorized for use for payment of administrative expenses 
     under section 1469(a)(3) of the National Agricultural 
     Research, Extension, and Teaching Policy Act of 1977 (7 
     U.S.C. 3315(a)(3)), the Secretary shall transfer, upon the 
     date of enactment of this section, $200,000 to the Office of 
     Prevention, Pesticides, and Toxic Substances of the 
     Environmental Protection Agency for use in conducting a meta-
     analysis relating to methyl bromide.
       ``(4) Availability.--Funds made available pursuant to this 
     subsection for a fiscal year shall remain available until 
     expended to pay for obligations incurred in that fiscal 
     year.''.
       (b) Coordination.--In carrying out the amendment made by 
     this section, the Secretary shall ensure that the Division 
     Chief of the applicable Research, Education, and Extension 
     Office established under section 251 of the Department of 
     Agriculture Reorganization Act of 1994 (7 U.S.C. 6971) 
     coordinates projects and activities under this section to 
     ensure, to the maximum extent practicable, that unnecessary 
     duplication of effort is eliminated or minimized.

     SEC. 7312. FOOD ANIMAL RESIDUE AVOIDANCE DATABASE PROGRAM.

       Section 604 of the Agricultural Research, Extension, and 
     Education Reform Act of 1998 (7 U.S.C. 7642) is amended by 
     adding at the end the following:
       ``(e) Authorization of Appropriations.--In addition to any 
     other funds available to carry out subsection (c), there is 
     authorized to be appropriated to carry out this section 
     $2,500,000 for each of fiscal years 2008 through 2012.''.

     SEC. 7313. OFFICE OF PEST MANAGEMENT POLICY.

       Section 614(f) of the Agricultural Research, Extension, and 
     Education Reform Act of 1998 (7 U.S.C. 7653(f)) is amended by 
     striking ``2007'' and inserting ``2012''.

                         Subtitle D--Other Laws

     SEC. 7401. CRITICAL AGRICULTURAL MATERIALS ACT.

       Section 16(a) of the Critical Agricultural Materials Act (7 
     U.S.C. 178n(a)) is amended by striking ``2007'' and inserting 
     ``2012''.

     SEC. 7402. EQUITY IN EDUCATIONAL LAND-GRANT STATUS ACT OF 
                   1994.

       (a) Definition of 1994 Institutions.--Section 532 of the 
     Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 
     301 note; Public Law 103-382) is amended by adding at the end 
     the following:
       ``(34) Ilisagvik College.''.
       (b) Endowment for 1994 Institutions.--Section 533 of the 
     Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 
     301 note; Public Law 103-382) is amended--
       (1) in subsection (a)(3), in the matter preceding 
     subparagraph (A), by inserting ``this section and'' before 
     ``sections 534,''; and
       (2) in the first sentence of subsection (b), by striking 
     ``2007'' and inserting ``2012''.
       (c) Redistribution.--Section 534(a)(3) of the Equity in 
     Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note; 
     Public Law 103-382) is amended--
       (1) by striking ``The amounts'' and inserting the 
     following:
       ``(A) In general.--Except as provided in subparagraph (B), 
     the amounts''; and
       (2) by adding at the end the following:
       ``(B) Redistribution.--Funds that would be paid to a 1994 
     Institution under paragraph (2) shall be withheld from that 
     1994 Institution and redistributed among the other 1994 
     Institutions if that 1994 Institution--
       ``(i) declines to accept funds under paragraph (2); or
       ``(ii) fails to meet the accreditation requirements under 
     section 533(a)(3).''.
       (d) Institutional Capacity Building Grants.--Section 535 of 
     the Equity in Educational Land-Grant Status Act of 1994 (7 
     U.S.C. 301 note; Public Law 103-382) is amended by striking 
     ``2007'' each place it appears and inserting ``2012''.
       (e) Research Grants.--Section 536(c) of the Equity in 
     Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note; 
     Public Law 103-382) is amended in the first sentence by 
     striking ``2007'' and inserting ``2012''.
       (f) Effective Date.--The amendment made by subsection (a) 
     takes effect on October 1, 2008.

     SEC. 7403. SMITH-LEVER ACT.

       (a) Program.--Section 3(d) of the Smith-Lever Act (7 U.S.C. 
     343(d)) is amended in the second sentence by striking ``apply 
     for and receive'' and all that follows through paragraph (2) 
     and inserting ``compete for and receive funds directly from 
     the Secretary of Agriculture.''.
       (b) Elimination of the Governor's Report Requirement for 
     Extension Activities.--Section 5 of the Smith-Lever Act (7 
     U.S.C. 345) is amended by striking the third sentence.
       (c) Conforming Amendment.--Section 1444(a)(2) of the 
     National Agricultural Research, Extension, and Teaching 
     Policy Act of 1977 (7 U.S.C. 3221(a)(2)) is amended by 
     striking ``after September 30, 1995, under section 3(d) of 
     that Act (7 U.S.C. 343(d))'' and all that follows through the 
     end of the sentence and inserting ``under section 3(d) of 
     that Act (7 U.S.C. 343(d)).''.

     SEC. 7404. HATCH ACT OF 1887.

       (a) District of Columbia.--Section 3(d)(4) of the Hatch Act 
     of 1887 (7 U.S.C. 361c(d)(4)) is amended--
       (1) in the paragraph heading, by inserting ``and the 
     district of columbia'' after ``areas'';
       (2) in subparagraph (A)--
       (A) by inserting ``and the District of Columbia'' after 
     ``United States''; and
       (B) by inserting ``and the District of Columbia'' after 
     ``respectively,''; and
       (3) in subparagraph (B), by inserting ``or the District of 
     Columbia'' after ``area''.
       (b) Elimination of Penalty Mail Authorities.--
       (1) In general.--Section 6 of the Hatch Act of 1887 (7 
     U.S.C. 361f) is amended in the first sentence by striking 
     ``under penalty indicia:'' and all that follows through the 
     end of the sentence and inserting a period.
       (2) Conforming amendments in other laws.--
       (A) National agricultural research, extension, and teaching 
     policy act of 1977.--
       (i) Section 1444(f) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3221(f)) 
     is amended by striking ``under penalty indicia:'' and all 
     that follows through the end of the sentence and inserting a 
     period.
       (ii) Section 1445(e) of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3222(e)) 
     is amended by striking ``under penalty indicia:'' and all 
     that follows through the end of the sentence and inserting a 
     period.
       (B) Other provisions.--Section 3202(a) of title 39, United 
     States Code, is amended--
       (i) in paragraph (1)--

       (I) in subparagraph (D), by adding ``and'' at the end;
       (II) in subparagraph (E), by striking ``sections; and'' and 
     inserting ``sections.''; and
       (III) by striking subparagraph (F);

       (ii) in paragraph (2), by adding ``and'' at the end;
       (iii) in paragraph (3) by striking ``thereof; and'' and 
     inserting ``thereof.''; and
       (iv) by striking paragraph (4).

     SEC. 7405. AGRICULTURAL EXPERIMENT STATION RESEARCH 
                   FACILITIES ACT.

       Section 6(a) of the Research Facilities Act (7 U.S.C. 
     390d(a)) is amended by striking ``2007'' and inserting 
     ``2012''.

     SEC. 7406. AGRICULTURE AND FOOD RESEARCH INITIATIVE.

       (a) In General.--Subsection (b) of the Competitive, 
     Special, and Facilities Research Grant Act (7 U.S.C. 450i(b)) 
     is amended to read as follows:
       ``(b) Agriculture and Food Research Initiative.--
       ``(1) Establishment.--There is established in the 
     Department of Agriculture an Agriculture and Food Research 
     Initiative under which the Secretary of Agriculture (referred 
     to in this subsection as `the Secretary') may make 
     competitive grants for fundamental and applied research, 
     extension, and education to address food and agricultural 
     sciences (as defined under section 1404 of the National 
     Agricultural Research, Extension, and Teaching Policy Act of 
     1977 (7 U.S.C. 3103)).
       ``(2) Priority areas.--The competitive grants program 
     established under this subsection shall address the following 
     areas:
       ``(A) Plant health and production and plant products.--
     Plant systems, including--
       ``(i) plant genome structure and function;
       ``(ii) molecular and cellular genetics and plant 
     biotechnology;
       ``(iii) conventional breeding, including cultivar and breed 
     development, selection theory, applied quantitative genetics, 
     breeding for improved food quality, breeding for improved 
     local adaptation to biotic stress and abiotic stress, and 
     participatory breeding;
       ``(iv) plant-pest interactions and biocontrol systems;
       ``(v) crop plant response to environmental stresses;
       ``(vi) unproved nutrient qualities of plant products; and
       ``(vii) new food and industrial uses of plant products.
       ``(B) Animal health and production and animal products.--
     Animal systems, including--
       ``(i) aquaculture;
       ``(ii) cellular and molecular basis of animal reproduction, 
     growth, disease, and health;
       ``(iii) animal biotechnology;
       ``(iv) conventional breeding, including breed development, 
     selection theory, applied quantitative genetics, breeding for 
     improved food quality, breeding for improved local adaptation 
     to biotic stress and abiotic stress, and participatory 
     breeding;
       ``(v) identification of genes responsible for improved 
     production traits and resistance to disease;
       ``(vi) improved nutritional performance of animals;
       ``(vii) improved nutrient qualities of animal products and 
     uses; and
       ``(viii) the development of new and improved animal 
     husbandry and production systems that take into account 
     production efficiency, animal well-being, and animal systems 
     applicable to aquaculture.

[[Page H3502]]

       ``(C) Food safety, nutrition, and health.--Nutrition, food 
     safety and quality, and health, including--
       ``(i) microbial contaminants and pesticides residue 
     relating to human health;
       ``(ii) links between diet and health;
       ``(iii) bioavailability of nutrients;
       ``(iv) postharvest physiology and practices; and
       ``(v) improved processing technologies.
       ``(D) Renewable energy, natural resources, and 
     environment.--Natural resources and the environment, 
     including--
       ``(i) fundamental structures and functions of ecosystems;
       ``(ii) biological and physical bases of sustainable 
     production systems;
       ``(iii) minimizing soil and water losses and sustaining 
     surface water and ground water quality;
       ``(iv) global climate effects on agriculture;
       ``(v) forestry; and
       ``(vi) biological diversity.
       ``(E) Agriculture systems and technology.--Engineering, 
     products, and processes, including--
       ``(i) new uses and new products from traditional and 
     nontraditional crops, animals, byproducts, and natural 
     resources;
       ``(ii) robotics, energy efficiency, computing, and expert 
     systems;
       ``(iii) new hazard and risk assessment and mitigation 
     measures; and
       ``(iv) water quality and management.
       ``(F) Agriculture economics and rural communities.--
     Markets, trade, and policy, including--
       ``(i) strategies for entering into and being competitive in 
     domestic and overseas markets;
       ``(ii) farm efficiency and profitability, including the 
     viability and competitiveness of small and medium-sized 
     dairy, livestock, crop and other commodity operations;
       ``(iii) new decision tools for farm and market systems;
       ``(iv) choices and applications of technology;
       ``(v) technology assessment; and
       ``(vi) new approaches to rural development, including rural 
     entrepreneurship.
       ``(3) Term.--The term of a competitive grant made under 
     this subsection may not exceed 10 years.
       ``(4) General administration.--In making grants under this 
     subsection, the Secretary shall--
       ``(A) seek and accept proposals for grants;
       ``(B) determine the relevance and merit of proposals 
     through a system of peer and merit review in accordance with 
     section 103 of the Agricultural Research, Extension, and 
     Education Reform Act of 1998 (7 U.S.C. 7613);
       ``(C) award grants on the basis of merit, quality, and 
     relevance;
       ``(D) solicit and consider input from persons who conduct 
     or use agricultural research, extension, or education in 
     accordance with section 102(b) of the Agricultural Research, 
     Extension, and Education Reform Act of 1998 (7 U.S.C. 
     7612(b)); and
       ``(E) in seeking proposals for grants under this subsection 
     and in performing peer review evaluations of such proposals, 
     seek the widest participation of qualified individuals in the 
     Federal Government, colleges and universities, State 
     agricultural experiment stations, and the private sector.
       ``(5) Allocation of funds.--In making grants under this 
     subsection, the Secretary shall allocate funds to the 
     Agriculture and Food Research Initiative to ensure that, of 
     funds allocated for research activities--
       ``(A) not less than 60 percent is made available to make 
     grants for fundamental research (as defined in subsection 
     (f)(1) of section 251 of the Department of Agriculture 
     Reorganization Act of 1994 (7 U.S.C. 6971)), of which--
       ``(i) not less than 30 percent is made available to make 
     grants for research to be conducted by multidisciplinary 
     teams; and
       ``(ii) not more than 2 percent is used for equipment grants 
     under paragraph (6)(A); and
       ``(B) not less than 40 percent is made available to make 
     grants for applied research (as defined in subsection (f)(1) 
     of section 251 of the Department of Agriculture 
     Reorganization Act of 1994 (7 U.S.C. 6971)).
       ``(6) Special considerations.--In making grants under this 
     subsection, the Secretary may assist in the development of 
     capabilities in the agricultural, food, and environmental 
     sciences by providing grants--
       ``(A) to an institution to allow for the improvement of the 
     research, development, technology transfer, and education 
     capacity of the institution through the acquisition of 
     special research equipment and the improvement of 
     agricultural education and teaching, except that the 
     Secretary shall use not less than 25 percent of the funds 
     made available for grants under this subparagraph to provide 
     fellowships to outstanding pre- and post-doctoral students 
     for research in the agricultural sciences;
       ``(B) to a single investigator or coinvestigators who are 
     beginning research careers and do not have an extensive 
     research publication record, except that, to be eligible for 
     a grant under this subparagraph, an individual shall be 
     within 5 years of the beginning of the initial career track 
     position of the individual;
       ``(C) to ensure that the faculty of small, mid-sized, and 
     minority-serving institutions who have not previously been 
     successful in obtaining competitive grants under this 
     subsection receive a portion of the grants; and
       ``(D) to improve research, extension, and education 
     capabilities in States (as defined in section 1404 of the 
     National Agricultural Research, Extension, and Teaching 
     Policy Act of 1977 (7 U.S.C. 3103)) in which institutions 
     have been less successful in receiving funding under this 
     subsection, based on a 3-year rolling average of funding 
     levels.
       ``(7) Eligible entities.--The Secretary may make grants to 
     carry out research, extension, and education under this 
     subsection to--
       ``(A) State agricultural experiment stations;
       ``(B) colleges and universities;
       ``(C) university research foundations;
       ``(D) other research institutions and organizations;
       ``(E) Federal agencies;
       ``(F) national laboratories;
       ``(G) private organizations or corporations;
       ``(H) individuals; or
       ``(I) any group consisting of 2 or more of the entities 
     described in subparagraphs (A) through (H).
       ``(8) Construction prohibited.--Funds made available for 
     grants under this subsection shall not be used for the 
     construction of a new building or facility or the 
     acquisition, expansion, remodeling, or alteration of an 
     existing building or facility (including site grading and 
     improvement, and architect fees).
       ``(9) Matching funds.--
       ``(A) Equipment grants.--
       ``(i) In general.--Except as provided in clause (ii), in 
     the case of a grant made under paragraph (6)(A), the amount 
     provided under this subsection may not exceed 50 percent of 
     the cost of the special research equipment or other equipment 
     acquired using funds from the grant.
       ``(ii) Waiver.--The Secretary may waive all or part of the 
     matching requirement under clause (i) in the case of a 
     college, university, or research foundation maintained by a 
     college or university that ranks in the lowest \1/3\ of such 
     colleges, universities, and research foundations on the basis 
     of Federal research funds received, if the equipment to be 
     acquired using funds from the grant costs not more than 
     $25,000 and has multiple uses within a single research 
     project or is usable in more than 1 research project.
       ``(B) Applied research.--As a condition of making a grant 
     under paragraph (5)(B), the Secretary shall require the 
     funding of the grant to be matched with equal matching funds 
     from a non-Federal source if the grant is for applied 
     research that is--
       ``(i) commodity-specific; and
       ``(ii) not of national scope.
       ``(10) Program administration.--To the maximum extent 
     practicable, the Director of the National Institute of Food 
     and Agriculture, in coordination with the Under Secretary for 
     Research, Education, and Economics, shall allocate grants 
     under this subsection to high-priority research, taking into 
     consideration, when available, the determinations made by the 
     National Agricultural Research, Extension, Education, and 
     Economics Advisory Board (as established under section 1408 
     of the National Agricultural Research, Extension, and 
     Teaching Policy Act of 1977 (7 U.S.C. 3123)).
       ``(11) Authorization of appropriations.--
       ``(A) In general.--There is authorized to be appropriated 
     to carry out this subsection $700,000,000 for each of fiscal 
     years 2008 through 2012, of which--
       ``(i) not less than 30 percent shall be made available for 
     integrated research pursuant to section 406 of the 
     Agricultural Research, Extension, and Education Reform Act of 
     1998 (7 U.S.C. 7626); and
       ``(ii) not more than 4 percent may be retained by the 
     Secretary to pay administrative costs incurred by the 
     Secretary in carrying out this subsection.
       ``(B) Availability.--Funds made available under this 
     paragraph shall--
       ``(i) be available for obligation for a 2-year period 
     beginning on October 1 of the fiscal year for which the funds 
     are first made available; and
       ``(ii) remain available until expended to pay for 
     obligations incurred during that 2-year period.''.
       (b) Repeals.--
       (1) Section 401 of the Agricultural Research, Extension, 
     and Education Reform Act of 1998 (7 U.S.C. 7621) is repealed.
       (2) Subsection (d) of the Competitive, Special, and 
     Facilities Research Grant Act (7 U.S.C. 450i(d)) is repealed.
       (c) Effect on Current Solicitations.--The amendments made 
     by this section shall not apply to any solicitation for grant 
     applications issued by the Cooperative State Research, 
     Education, and Extension Service before the date of enactment 
     of this Act.
       (d) Conforming Amendments.--
       (1) Section 1473 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3319) is 
     amended in the first sentence by striking ``and subsection 
     (d)''.
       (2) Section 1671(d) of the Food, Agriculture, Conservation, 
     and Trade Act of 1990 (7 U.S.C. 5924(d) is amended by 
     striking ``Paragraphs (1), (6), (7), and (11)'' and inserting 
     ``Paragraphs (4), (7), (8), and (11)(B)''.
       (3) Section 1672B(b) of the Food, Agriculture, 
     Conservation, and Trade Act of 1990 (7 U.S.C. 5925b(b)) is 
     amended by striking ``Paragraphs (1), (6), (7), and (11)'' 
     and inserting ``Paragraphs (4), (7), (8), and (11)(B)''.

     SEC. 7407. AGRICULTURAL RISK PROTECTION ACT OF 2000.

       Section 221 of the Agricultural Risk Protection Act of 2000 
     (7 U.S.C. 6711(g)) is amended by striking subsection (g) and 
     inserting the following:
       ``(g) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $15,000,000 for 
     each of fiscal years 2007 through 2012.''.

     SEC. 7408. EXCHANGE OR SALE AUTHORITY.

       Title III of the Department of Agriculture Reorganization 
     Act of 1994 (Public Law 103-354; 108 Stat. 3238) is amended 
     by adding at the end the following:

     ``SEC. 307. EXCHANGE OR SALE AUTHORITY.

       ``(a) Definition of Qualified Item of Personal Property.--
     In this section, the term `qualified item of personal 
     property' means--

[[Page H3503]]

       ``(1) an animal;
       ``(2) an animal product;
       ``(3) a plant; or
       ``(4) a plant product.
       ``(b) General Authority.--Except as provided in subsection 
     (c), notwithstanding chapter 5 of subtitle I of title 40, 
     United States Code, the Secretary, acting through the Under 
     Secretary for Research, Education, and Economics, in managing 
     personal property for the purpose of carrying out the 
     research functions of the Department, may exchange, sell, or 
     otherwise dispose of any qualified item of personal property, 
     including by way of public auction, and may retain and apply 
     the sale or other proceeds, without further appropriation and 
     without fiscal year limitation, in whole or in partial 
     payment--
       ``(1) to acquire any qualified item of personal property; 
     or
       ``(2) to offset costs related to the maintenance, care, or 
     feeding of any qualified item of personal property.
       ``(c) Exception.--Subsection (b) does not apply to the free 
     dissemination of new varieties of seeds and germplasm in 
     accordance with section 520 of the Revised Statutes (commonly 
     known as the `Department of Agriculture Organic Act') (7 
     U.S.C. 2201).''.

     SEC. 7409. ENHANCED USE LEASE AUTHORITY PILOT PROGRAM.

       Title III of the Department of Agriculture Reorganization 
     Act of 1994 (Public Law 103-354; 108 Stat. 3238) (as amended 
     by section 7408) is amended by adding at the end the 
     following:

     ``SEC. 308. ENHANCED USE LEASE AUTHORITY PILOT PROGRAM.

       ``(a) Establishment.--To enhance the use of real property 
     administered by agencies of the Department, the Secretary may 
     establish a pilot program, in accordance with this section, 
     at the Beltsville Agricultural Research Center of the 
     Agricultural Research Service and the National Agricultural 
     Library to lease nonexcess property of the Center or the 
     Library to any individual or entity, including agencies or 
     instrumentalities of State or local governments.
       ``(b) Requirements.--
       ``(1) In general.--Notwithstanding chapter 5 of subtitle I 
     of title 40, United States Code, the Secretary may lease real 
     property at the Beltsville Agricultural Research Center or 
     the National Agricultural Library in accordance with such 
     terms and conditions as the Secretary may prescribe, if the 
     Secretary determines that the lease--
       ``(A) is consistent with, and will not adversely affect, 
     the mission of the Department agency administering the 
     property;
       ``(B) will enhance the use of the property;
       ``(C) will not permit any portion of Department agency 
     property or any facility of the Department to be used for the 
     public retail or wholesale sale of merchandise or residential 
     development;
       ``(D) will not permit the construction or modification of 
     facilities financed by non-Federal sources to be used by an 
     agency, except for incidental use; and
       ``(E) will not include any property or facility required 
     for any Department agency purpose without prior consideration 
     of the needs of the agency.
       ``(2) Term.--The term of a lease under this section shall 
     not exceed 30 years.
       ``(3) Consideration.--
       ``(A) In general.--Consideration provided for a lease under 
     this section shall be--
       ``(i) in an amount equal to fair market value, as 
     determined by the Secretary; and
       ``(ii) in the form of cash.
       ``(B) Use of funds.--
       ``(i) In general.--Consideration provided for a lease under 
     this section shall be--

       ``(I) deposited in a capital asset account to be 
     established by the Secretary; and
       ``(II) available until expended, without further 
     appropriation, for maintenance, capital revitalization, and 
     improvements of the Department properties and facilities at 
     the Beltsville Agricultural Research Center and National 
     Agricultural Library.

       ``(ii) Budgetary treatment.--For purposes of the budget, 
     the amounts described in clause (i) shall not be treated as a 
     receipt of any Department agency or any other agency leasing 
     property under this section.
       ``(4) Costs.--The lessee shall cover all costs associated 
     with a lease under this section, including the cost of--
       ``(A) the project to be carried out on property or at a 
     facility covered by the lease;
       ``(B) provision and administration of the lease;
       ``(C) construction of any needed facilities;
       ``(D) provision of applicable utilities; and
       ``(E) any other facility cost normally associated with the 
     operation of a leased facility.
       ``(5) Prohibition of use of appropriations.--The Secretary 
     shall not use any funds made available to the Secretary in an 
     appropriations Act for the construction or operating costs of 
     any space covered by a lease under this section.
       ``(6) Termination of authority.--This section and the 
     authority provided by this section terminate--
       ``(A) on the date that is 5 years after the date of 
     enactment of this section; or
       ``(B) with respect to any particular leased property, on 
     the date of termination of the lease.
       ``(c) Effect of Other Laws.--
       ``(1) Utilization.--Property that is leased pursuant to 
     this section shall not be considered to be unutilized or 
     underutilized for purposes of section 501 of the Stewart B. 
     McKinney Homeless Assistance Act (42 U.S.C. 11411).
       ``(2) Disposal.--Property at the Beltsville Agricultural 
     Research Center or the National Agricultural Library that is 
     leased pursuant to this section shall not be considered to be 
     disposed of by sale, lease, rental, excessing, or surplusing 
     for purposes of section 523 of Public Law 100-202 (101 Stat. 
     1329-417).
       ``(d) Administration.--
       ``(1) In general.--Not later than 90 days after the date of 
     enactment of this section, the Secretary shall submit to the 
     Committee on Agriculture of the House of Representatives and 
     the Committee on Agriculture, Nutrition, and Forestry of the 
     Senate a report that describes detailed management objectives 
     and performance measurements by which the Secretary intends 
     to evaluate the success of the program under this section.
       ``(2) Reports.--Not later than 1, 3, and 5 years after the 
     date of enactment of this section, the Secretary shall submit 
     to the Committee on Agriculture of the House of 
     Representatives and the Committee on Agriculture, Nutrition, 
     and Forestry of the Senate a report describing the 
     implementation of the program under this section, including--
       ``(A) a copy of each lease entered into pursuant to this 
     section; and
       ``(B) an assessment by the Secretary of the success of the 
     program using the management objectives and performance 
     measurements developed by the Secretary.''.

     SEC. 7410. BEGINNING FARMER AND RANCHER DEVELOPMENT PROGRAM.

       (a) Grants.--Section 7405(c) of the Farm Security and Rural 
     Investment Act of 2002 (7 U.S.C. 3319f(c)) is amended--
       (1) by striking paragraph (3) and inserting the following:
       ``(3) Maximum term and size of grant.--
       ``(A) In general.--A grant under this subsection shall--
       ``(i) have a term that is not more than 3 years; and
       ``(ii) be in an amount that is not more than $250,000 for 
     each year.
       ``(B) Consecutive grants.--An eligible recipient may 
     receive consecutive grants under this subsection.'';
       (2) by redesignating paragraphs (5) through (7) as 
     paragraphs (8) through (10), respectively;
       (3) by inserting after paragraph (4) the following:
       ``(5) Evaluation criteria.--In making grants under this 
     subsection, the Secretary shall evaluate--
       ``(A) relevancy;
       ``(B) technical merit;
       ``(C) achievability;
       ``(D) the expertise and track record of 1 or more 
     applicants;
       ``(E) the adequacy of plans for the participatory 
     evaluation process, outcome-based reporting, and the 
     communication of findings and results beyond the immediate 
     target audience; and
       ``(F) other appropriate factors, as determined by the 
     Secretary.
       ``(6) Regional balance.--In making grants under this 
     subsection, the Secretary shall, to the maximum extent 
     practicable, ensure geographical diversity.
       ``(7) Priority.--In making grants under this subsection, 
     the Secretary shall give priority to partnerships and 
     collaborations that are led by or include nongovernmental and 
     community-based organizations with expertise in new 
     agricultural producer training and outreach.''.
       (b) Funding.--Section 7405 of the Farm Security and Rural 
     Investment Act of 2002 (7 U.S.C. 3319f) is amended by 
     striking subsection (h) and inserting the following:
       ``(h) Funding.--
       ``(1) In general.--Of the funds of the Commodity Credit 
     Corporation, the Secretary shall make available to carry out 
     this section--
       ``(A) $18,000,000 for fiscal year 2009; and
       ``(B) $19,000,000 for each of fiscal years 2010 through 
     2012.
       ``(2) Authorization of appropriations.--In addition to 
     funds provided under paragraph (1), there is authorized to be 
     appropriated to carry out this section $30,000,000 for each 
     of fiscal years 2008 through 2012.''.

     SEC. 7411. PUBLIC EDUCATION REGARDING USE OF BIOTECHNOLOGY IN 
                   PRODUCING FOOD FOR HUMAN CONSUMPTION.

       Section 10802 of the Farm Security and Rural Investment Act 
     of 2002 (7 U.S.C. 5921a) is repealed.

     SEC. 7412. MCINTIRE-STENNIS COOPERATIVE FORESTRY ACT.

       (a) In General.--Section 2 of Public Law 87-788 (commonly 
     known as the ``McIntire-Stennis Cooperative Forestry Act'') 
     (16 U.S.C. 582a-1) is amended by inserting ``and 1890 
     Institutions (as defined in section 2 of the Agricultural 
     Research, Extension, and Education Reform Act of 1998 (7 
     U.S.C. 7601)),'' before ``and (b)''.
       (b) Effective Date.--The amendment made by subsection (a) 
     takes effect on October 1, 2008.

     SEC. 7413. RENEWABLE RESOURCES EXTENSION ACT OF 1978.

       (a) Authorization of Appropriations.--Section 6 of the 
     Renewable Resources Extension Act of 1978 (16 U.S.C. 1675) is 
     amended in the first sentence by striking ``2007'' and 
     inserting ``2012''.
       (b) Termination Date.--Section 8 of the Renewable Resources 
     Extension Act of 1978 (16 U.S.C. 1671 note; Public Law 95-
     306) is amended by striking ``2007'' and inserting ``2012''.

     SEC. 7414. NATIONAL AQUACULTURE ACT OF 1980.

       Section 10 of the National Aquaculture Act of 1980 (16 
     U.S.C. 2809) is amended by striking ``2007'' each place it 
     appears and inserting ``2012''.

     SEC. 7415. CONSTRUCTION OF CHINESE GARDEN AT THE NATIONAL 
                   ARBORETUM.

       The Act of March 4, 1927 (20 U.S.C. 191 et seq.), is 
     amended by adding at the end the following:

     ``SEC. 7. CONSTRUCTION OF CHINESE GARDEN AT THE NATIONAL 
                   ARBORETUM.

       ``A Chinese Garden may be constructed at the National 
     Arboretum established under this Act with--

[[Page H3504]]

       ``(1) funds accepted under section 5;
       ``(2) authorities provided to the Secretary of Agriculture 
     under section 6; and
       ``(3) appropriations provided for this purpose.''.

     SEC. 7416. NATIONAL AGRICULTURAL RESEARCH, EXTENSION, AND 
                   TEACHING POLICY ACT AMENDMENTS OF 1985.

       Section 1431 of the National Agricultural Research, 
     Extension, and Teaching Policy Act Amendments of 1985 (Public 
     Law 99-198; 99 Stat. 1556) is amended by striking ``2007'' 
     and inserting ``2012''.

     SEC. 7417. ELIGIBILITY OF UNIVERSITY OF THE DISTRICT OF 
                   COLUMBIA FOR CERTAIN LAND-GRANT UNIVERSITY 
                   ASSISTANCE.

       (a) In General.--Section 208 of the District of Columbia 
     Public Postsecondary Education Reorganization Act (Public Law 
     93-471; 88 Stat. 1428) is amended--
       (1) in subsection (b)(2), by striking ``, except'' and all 
     that follows through the period and inserting a period; and
       (2) in subsection (c)--
       (A) by striking ``section 3'' each place it appears and 
     inserting ``section 3(c)''; and
       (B) by striking ``Such sums may be used to pay'' and all 
     that follows through ``work.''.
       (b) Effective Date.--The amendments made by this section 
     take effect on October 1, 2008.

                       Subtitle E--Miscellaneous

                       PART I--GENERAL PROVISIONS

     SEC. 7501. DEFINITIONS.

       Except as otherwise provided in this subtitle, in this 
     subtitle:
       (1) Capacity and infrastructure program.--The term 
     ``capacity and infrastructure program'' has the meaning given 
     the term in subsection (f)(1) of section 251 of the 
     Department of Agriculture Reorganization Act of 1994 (7 
     U.S.C. 6971) (as added by section 7511(a)(4)).
       (2) Capacity and infrastructure program critical base 
     funding.--The term ``capacity and infrastructure program 
     critical base funding'' means the aggregate amount of Federal 
     funds made available for capacity and infrastructure programs 
     for fiscal year 2006, as appropriate.
       (3) Competitive program.--The term ``competitive program'' 
     has the meaning given the term in subsection (f)(1) of 
     section 251 of the Department of Agriculture Reorganization 
     Act of 1994 (7 U.S.C. 6971) (as added by section 7511(a)(4)).
       (4) Competitive program critical base funding.--The term 
     ``competitive program critical base funding'' means the 
     aggregate amount of Federal funds made available for 
     competitive programs for fiscal year 2006, as appropriate.
       (5) Hispanic-serving agricultural colleges and 
     universities.--The term ``Hispanic-serving agricultural 
     colleges and universities'' has the meaning given the term in 
     section 1404 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103).
       (6) NLGCA institution.--The term ``NLGCA Institution'' has 
     the meaning given the term in section 1404 of the National 
     Agricultural Research, Extension, and Teaching Policy Act of 
     1977 (7 U.S.C. 3103).
       (7) 1862 institution; 1890 institution; 1994 institution.--
     The terms ``1862 Institution'', ``1890 Institution'', and 
     ``1994 Institution'' have the meanings given the terms in 
     section 2 of the Agricultural Research, Extension, and 
     Education Reform Act of 1998 (7 U.S.C. 7601).

     SEC. 7502. GRAZINGLANDS RESEARCH LABORATORY.

       Except as otherwise specifically authorized by law and 
     notwithstanding any other provision of law, the Federal land 
     and facilities at El Reno, Oklahoma, administered by the 
     Secretary (as of the date of enactment of this Act) as the 
     Grazinglands Research Laboratory, shall not at any time, in 
     whole or in part, be declared to be excess or surplus Federal 
     property under chapter 5 of subtitle I of title 40, United 
     States Code, or otherwise be conveyed or transferred in whole 
     or in part, for the 5-year period beginning on the date of 
     enactment of this Act.

     SEC. 7503. FORT RENO SCIENCE PARK RESEARCH FACILITY.

       The Secretary may lease land to the University of Oklahoma 
     at the Grazinglands Research Laboratory at El Reno, Oklahoma, 
     on such terms and conditions as the University and the 
     Secretary may agree in furtherance of cooperative research 
     and existing easement arrangements.

     SEC. 7504. ROADMAP.

       (a) In General.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary, acting through the 
     Under Secretary of Research, Education, and Economics 
     (referred to in this section as the ``Under Secretary''), 
     shall commence preparation of a roadmap for agricultural 
     research, education, and extension that--
       (1) identifies current trends and constraints;
       (2) identifies major opportunities and gaps that no single 
     entity within the Department of Agriculture would be able to 
     address individually;
       (3) involves--
       (A) interested parties from the Federal Government and 
     nongovernmental entities; and
       (B) the National Agricultural Research, Extension, 
     Education, and Economics Advisory Board established under 
     section 1408 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3123);
       (4) incorporates roadmaps for agricultural research, 
     education, and extension made publicly available by other 
     Federal entities, agencies, or offices; and
       (5) describes recommended funding levels for areas of 
     agricultural research, education, and extension, including--
       (A) competitive programs;
       (B) capacity and infrastructure programs, with attention to 
     the future growth needs of--
       (i) small 1862 Institutions, 1890 Institutions, and 1994 
     Institutions;
       (ii) Hispanic-serving agricultural colleges and 
     universities;
       (iii) NLGCA Institutions; and
       (iv) colleges of veterinary medicine; and
       (C) intramural programs at agencies within the research, 
     education, and economics mission area; and
       (6) describes how organizational changes enacted by this 
     Act have impacted agricultural research, extension, and 
     education across the Department of Agriculture, including 
     minimization of unnecessary programmatic and administrative 
     duplication.
       (b) Reviewability.--The roadmap described in this section 
     shall not be subject to review by any officer or employee of 
     the Federal Government other than the Secretary (or a 
     designee of the Secretary).
       (c) Roadmap Implementation and Report.--Not later than 1 
     year after the date on which the Secretary commences 
     preparation of the roadmap under this section, the Secretary 
     shall--
       (1) implement and use the roadmap to set the research, 
     education, and extension agenda of the Department of 
     Agriculture; and
       (2) make the roadmap available to the public.

     SEC. 7505. REVIEW OF PLAN OF WORK REQUIREMENTS.

       (a) Review.--The Secretary shall work with university 
     partners in extension and research to review and identify 
     measures to streamline the submission, reporting under, and 
     implementation of plan of work requirements, including those 
     requirements under--
       (1) sections 1444(d) and 1445(c) of the National 
     Agricultural Research, Extension, and Teaching Policy Act of 
     1977 (7 U.S.C. 3221(d) and 3222(c), respectively);
       (2) section 7 of the Hatch Act of 1887 (7 U.S.C. 361g); and
       (3) section 4 of the Smith-Lever Act (7 U.S.C. 344).
       (b) Consultation.--In carrying out the review and 
     formulating and compiling the recommendations, the Secretary 
     shall consult with the land-grant institutions.

     SEC. 7506. BUDGET SUBMISSION AND FUNDING.

       (a) Definition of Competitive Programs.--In this section, 
     the term ``competitive programs'' includes only competitive 
     programs for which annual appropriations are requested in the 
     annual budget submission of the President.
       (b) Budget Request.--The President shall submit to 
     Congress, together with the annual budget submission of the 
     President, a single budget line item reflecting the total 
     amount requested by the President for funding for research, 
     education, and extension activities of the Research, 
     Education, and Economics mission area of the Department for 
     that fiscal year and for the preceding 5 fiscal years.
       (c) Capacity and Infrastructure Program Request.--Of the 
     funds requested for capacity and infrastructure programs in 
     excess of the capacity and infrastructure program critical 
     base funding level, budgetary emphasis should be placed on 
     enhancing funding for--
       (1) 1890 Institutions;
       (2) 1994 Institutions;
       (3) NLGCA Institutions;
       (4) Hispanic-serving agricultural colleges and 
     universities; and
       (5) small 1862 Institutions.
       (d) Competitive Program Request.--Of the funds requested 
     for competitive programs in excess of the competitive program 
     critical base funding level, budgetary emphasis should be 
     placed on--
       (1) enhancing funding for emerging problems; and
       (2) finding solutions for those problems.

              PART II--RESEARCH, EDUCATION, AND ECONOMICS

     SEC. 7511. RESEARCH, EDUCATION, AND ECONOMICS.

       (a) In General.--Section 251 of the Department of 
     Agriculture Reorganization Act of 1994 (7 U.S.C. 6971) is 
     amended--
       (1) in subsection (a), by inserting ``(referred to in this 
     section as the `Under Secretary')'' before the period at the 
     end;
       (2) by striking subsections (b) through (d);
       (3) by redesignating subsection (e) as subsection (g); and
       (4) by inserting after subsection (a) the following:
       ``(b) Confirmation Required.--The Under Secretary shall be 
     appointed by the President, by and with the advice and 
     consent of the Senate, from among distinguished scientists 
     with specialized training or significant experience in 
     agricultural research, education, and economics.
       ``(c) Chief Scientist.--The Under Secretary shall--
       ``(1) hold the title of Chief Scientist of the Department; 
     and
       ``(2) be responsible for the coordination of the research, 
     education, and extension activities of the Department.
       ``(d) Functions of Under Secretary.--
       ``(1) Principal function.--The Secretary shall delegate to 
     the Under Secretary those functions and duties under the 
     jurisdiction of the Department that relate to research, 
     education, and economics.
       ``(2) Specific functions and duties.--The Under Secretary 
     shall--
       ``(A) identify, address, and prioritize current and 
     emerging agricultural research, education, and extension 
     needs (including funding);
       ``(B) ensure that agricultural research, education, and 
     extension programs are effectively coordinated and 
     integrated--
       ``(i) across disciplines, agencies, and institutions; and
       ``(ii) among applicable participants, grantees, and 
     beneficiaries;

[[Page H3505]]

       ``(C) promote the collaborative use of all agricultural 
     research, education, and extension resources from the local, 
     State, tribal, regional, national, and international levels 
     to address priority needs; and
       ``(D) foster communication among agricultural research, 
     education, and extension beneficiaries, including the public, 
     to ensure the delivery of agricultural research, education, 
     and extension knowledge.
       ``(3) Additional functions.--The Under Secretary shall 
     perform such other functions and duties as may be required by 
     law or prescribed by the Secretary.
       ``(e) Research, Education, and Extension Office.--
       ``(1) Establishment.--The Under Secretary shall organize 
     within the office of the Under Secretary 6 Divisions, to be 
     known collectively as the `Research, Education, and Extension 
     Office', which shall coordinate the research programs and 
     activities of the Department.
       ``(2) Division designations.--The Divisions within the 
     Research, Education, and Extension Office shall be as 
     follows:
       ``(A) Renewable energy, natural resources, and environment.
       ``(B) Food safety, nutrition, and health.
       ``(C) Plant health and production and plant products.
       ``(D) Animal health and production and animal products.
       ``(E) Agricultural systems and technology.
       ``(F) Agricultural economics and rural communities.
       ``(3) Division chiefs.--
       ``(A) Selection.--The Under Secretary shall select a 
     Division Chief for each Division using available personnel 
     authority under title 5, United States Code, including--
       ``(i) by term, temporary, or other appointment, without 
     regard to--

       ``(I) the provisions of title 5, United States Code, 
     governing appointments in the competitive service;
       ``(II) the provisions of subchapter I of chapter 35 of 
     title 5, United States Code, relating to retention 
     preference; and
       ``(III) the provisions of chapter 51 and subchapter III of 
     chapter 53 of title 5, United States Code, relating to 
     classification and General Schedule pay rates;

       ``(ii) by detail, notwithstanding any Act making 
     appropriations for the Department of Agriculture, whether 
     enacted before, on, or after the date of enactment of this 
     paragraph, requiring reimbursement for those details unless 
     the appropriation Act specifically refers to this subsection 
     and specifically includes these details;
       ``(iii) by reassignment or transfer from any other civil 
     service position; and
       ``(iv) by an assignment under subchapter VI of chapter 33 
     of title 5, United States Code.
       ``(B) Selection guidelines.--To the maximum extent 
     practicable, the Under Secretary shall select Division Chiefs 
     under subparagraph (A) in a manner that--
       ``(i) promotes leadership and professional development;
       ``(ii) enables personnel to interact with other agencies of 
     the Department; and
       ``(iii) maximizes the ability of the Under Secretary to 
     allow for rotations of Department personnel into the position 
     of Division Chief.
       ``(C) Term of service.--Notwithstanding title 5, United 
     States Code, the maximum length of service for an individual 
     selected as a Division Chief under subparagraph (A) shall not 
     exceed 4 years.
       ``(D) Qualifications.--To be eligible for selection as a 
     Division Chief, an individual shall have--
       ``(i) conducted exemplary research, education, or extension 
     in the field of agriculture or forestry; and
       ``(ii) earned an advanced degree at an institution of 
     higher education (as defined in section 101 of the Higher 
     Education Act of 1965 (20 U.S.C. 1001)).
       ``(E) Duties of division chiefs.--Except as otherwise 
     provided in this Act, each Division Chief shall--
       ``(i) assist the Under Secretary in identifying and 
     addressing emerging agricultural research, education, and 
     extension needs;
       ``(ii) assist the Under Secretary in identifying and 
     prioritizing Department-wide agricultural research, 
     education, and extension needs, including funding;
       ``(iii) assess the strategic workforce needs of the 
     research, education, and extension functions of the 
     Department, and develop strategic workforce plans to ensure 
     that existing and future workforce needs are met;
       ``(iv) communicate with research, education, and extension 
     beneficiaries, including the public, and representatives of 
     the research, education, and extension system, including the 
     National Agricultural Research, Extension, Education, and 
     Economics Advisory Board, to promote the benefits of 
     agricultural research, education, and extension;
       ``(v) assist the Under Secretary in preparing and 
     implementing the roadmap for agricultural research, 
     education, and extension, as described in section 7504 of the 
     Food, Conservation, and Energy Act of 2008; and
       ``(vi) perform such other duties as the Under Secretary may 
     determine.
       ``(4) General administration.--
       ``(A) Funding.--Notwithstanding any Act making 
     appropriations for the Department of Agriculture, whether 
     enacted before, on, or after the date of enactment of this 
     paragraph unless the appropriation Act specifically refers to 
     this subsection and specifically includes the administration 
     of funds under this section, the Secretary may transfer funds 
     made available to an agency in the research, education, and 
     economics mission area to fund the costs of Division 
     personnel.
       ``(B) Limitation.--To the maximum extent practicable--
       ``(i) the Under Secretary shall minimize the number of 
     full-time equivalent positions in the Divisions; and
       ``(ii) at no time shall the aggregate number of staff for 
     all Divisions exceed 30 full-time equivalent positions.
       ``(C) Rotation of personnel.--To the maximum extent 
     practicable, and using the authority described in paragraph 
     (3)(A), the Under Secretary shall rotate personnel among the 
     Divisions, and between the Divisions and agencies of the 
     Department, in a manner that--
       ``(i) promotes leadership and professional development; and
       ``(ii) enables personnel to interact with other agencies of 
     the Department.
       ``(5) Organization.--The Under Secretary shall integrate 
     leadership functions of the national program staff of the 
     research agencies into the Research, Education and Extension 
     Office in such form as is required to ensure that 
     administrative duplication does not occur.
       ``(f) National Institute of Food and Agriculture.--
       ``(1) Definitions.--In this subsection:
       ``(A) Advisory board.--The term `Advisory Board' means the 
     National Agricultural Research, Extension, Education, and 
     Economics Advisory Board established under section 1408 of 
     the National Agricultural Research, Extension, and Teaching 
     Policy Act of 1977 (7 U.S.C. 3123).
       ``(B) Applied research.--The term `applied research' means 
     research that includes expansion of the findings of 
     fundamental research to uncover practical ways in which new 
     knowledge can be advanced to benefit individuals and society.
       ``(C) Capacity and infrastructure program.--The term 
     `capacity and infrastructure program' means each of the 
     following agricultural research, extension, education, and 
     related programs for which the Secretary has administrative 
     or other authority as of the day before the date of enactment 
     of the Food, Conservation, and Energy Act of 2008:
       ``(i) Each program providing funding to any of the 1994 
     Institutions under sections 533, 534(a), and 535 of the 
     Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 
     301 note; Public Law 103-382).
       ``(ii) The program established under section 536 of the 
     Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 
     301 note; Public Law 103-382) providing research grants for 
     1994 Institutions.
       ``(iii) Each program established under subsections (b) and 
     (c) of section 3 of the Smith-Lever Act (7 U.S.C. 343).
       ``(iv) Each program established under the Hatch Act of 1887 
     (7 U.S.C. 361a et seq.).
       ``(v) Each program established under section 1417(b) of the 
     National Agricultural Research, Extension, and Teaching 
     Policy Act of 1977 (7 U.S.C. 3152(b)).
       ``(vi) The animal health and disease research program 
     established under subtitle E of the National Agricultural 
     Research, Extension, and Teaching Policy Act of 1977 (7 
     U.S.C. 3191 et seq.).
       ``(vii) Each extension program available to 1890 
     Institutions established under section 1444 of the National 
     Agricultural Research, Extension, and Teaching Policy Act of 
     1977 (7 U.S.C. 3221).
       ``(viii) The program established under section 1445 of the 
     National Agricultural Research, Extension, and Teaching 
     Policy Act of 1977 (7 U.S.C. 3222).
       ``(ix) The program providing grants to upgrade agricultural 
     and food sciences facilities at 1890 Institutions established 
     under section 1447 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3222b).
       ``(x) The program providing distance education grants for 
     insular areas established under section 1490 of the National 
     Agricultural Research, Extension, and Teaching Policy Act of 
     1977 (7 U.S.C. 3362).
       ``(xi) The program providing resident instruction grants 
     for insular areas established under section 1491 of the 
     National Agricultural Research, Extension, and Teaching 
     Policy Act of 1977 (7 U.S.C. 3363).
       ``(xii) Each research and development and related program 
     established under Public Law 87-788 (commonly known as the 
     `McIntire-Stennis Cooperative Forestry Act') (16 U.S.C. 582a 
     et seq.).
       ``(xiii) Each program established under the Renewable 
     Resources Extension Act of 1978 (16 U.S.C. 1671 et seq.).
       ``(xiv) Each program providing funding to Hispanic-serving 
     agricultural colleges and universities under section 1456 of 
     the National Agricultural Research, Extension, and Teaching 
     Policy Act of 1977.
       ``(xv) The program providing capacity grants to NLGCA 
     Institutions under section 1473F of the National Agricultural 
     Research, Extension, and Teaching Policy Act of 1977.
       ``(xvi) Other programs that are capacity and infrastructure 
     programs, as determined by the Secretary.
       ``(D) Competitive program.--The term `competitive program' 
     means each of the following agricultural research, extension, 
     education, and related programs for which the Secretary has 
     administrative or other authority as of the day before the 
     date of enactment of the Food, Conservation, and Energy Act 
     of 2008:
       ``(i) The Agriculture and Food Research Initiative 
     established under section 2(b) of the Competitive, Special, 
     and Facilities Research Grant Act (7 U.S.C. 450i(b)).
       ``(ii) The program providing competitive grants for risk 
     management education established under section 524(a)(3) of 
     the Federal Crop Insurance Act (7 U.S.C. 1524(a)(3)).
       ``(iii) The program providing community food project 
     competitive grants established under section 25 of the Food 
     and Nutrition Act of 2008 (7 U.S.C. 2034).

[[Page H3506]]

       ``(iv) The program providing grants for beginning farmer 
     and rancher development established under section 7405 of the 
     Farm Security and Rural Investment Act of 2002 (7 U.S.C. 
     3319f).
       ``(v) The program providing grants under section 1417(j) of 
     the National Agricultural Research, Extension, and Teaching 
     Policy Act of 1977 (7 U.S.C. 3152(j)).
       ``(vi) The program providing grants for Hispanic-serving 
     institutions established under section 1455 of the National 
     Agricultural Research, Extension, and Teaching Policy Act of 
     1977 (7 U.S.C. 3241).
       ``(vii) The program providing competitive grants for 
     international agricultural science and education programs 
     under section 1459A of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3292b).
       ``(viii) The research and extension projects carried out 
     under section 1621 of the Food, Agriculture, Conservation, 
     and Trade Act of 1990 (7 U.S.C. 5811).
       ``(ix) The organic agriculture research and extension 
     initiative established under section 1672B of the Food, 
     Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 
     5925b).
       ``(x) The specialty crop research initiative under section 
     412 of the Agricultural Research, Extension, and Education 
     Reform Act of 1998.
       ``(xi) The administration and management of the 
     Agricultural Bioenergy Feedstock and Energy Efficiency 
     Research and Extension Initiative carried out under section 
     1672C of the Food, Agriculture, Conservation, and Trade Act 
     of 1990.
       ``(xii) The research, extension, and education programs 
     authorized by section 407 of the Agricultural Research, 
     Extension, and Education Reform Act of 1998 (7 U.S.C. 7627) 
     relating to the competitiveness, viability and sustainability 
     of small- and medium-sized dairy, livestock, and poultry 
     operations.
       ``(xiii) Other programs that are competitive programs, as 
     determined by the Secretary.
       ``(E) Director.--The term `Director' means the Director of 
     the Institute.
       ``(F) Fundamental research.--The term `fundamental 
     research' means research that--
       ``(i) increases knowledge or understanding of the 
     fundamental aspects of phenomena and has the potential for 
     broad application; and
       ``(ii) has an effect on agriculture, food, nutrition, or 
     the environment.
       ``(G) Institute.--The term `Institute' means the National 
     Institute of Food and Agriculture established by paragraph 
     (2)(A).
       ``(2) Establishment of national institute of food and 
     agriculture.--
       ``(A) Establishment.--The Secretary shall establish within 
     the Department an agency to be known as the `National 
     Institute of Food and Agriculture'.
       ``(B) Transfer of authorities.--The Secretary shall 
     transfer to the Institute, effective not later than October 
     1, 2009, the authorities (including all budget authorities, 
     available appropriations, and personnel), duties, 
     obligations, and related legal and administrative functions 
     prescribed by law or otherwise granted to the Secretary, the 
     Department, or any other agency or official of the Department 
     under--
       ``(i) the capacity and infrastructure programs;
       ``(ii) the competitive programs;
       ``(iii) the research, education, economic, cooperative 
     State research programs, cooperative extension and education 
     programs, international programs, and other functions and 
     authorities delegated by the Under Secretary to the 
     Administrator of the Cooperative State Research, Education, 
     and Extension Service pursuant to section 2.66 of title 7, 
     Code of Federal Regulations (or successor regulations); and
       ``(iv) any and all other authorities administered by the 
     Administrator of the Cooperative State Research, Education, 
     and Extension Service.
       ``(3) Director.--
       ``(A) In general.--The Institute shall be headed by a 
     Director, who shall be an individual who is--
       ``(i) a distinguished scientist; and
       ``(ii) appointed by the President.
       ``(B) Supervision.--The Director shall report directly to 
     the Secretary, or the designee of the Secretary.
       ``(C) Functions of the director.--The Director shall--
       ``(i) serve for a 6-year term, subject to reappointment for 
     an additional 6-year term;
       ``(ii) periodically report to the Secretary, or the 
     designee of the Secretary, with respect to activities carried 
     out by the Institute; and
       ``(iii) consult regularly with the Secretary, or the 
     designee of the Secretary, to ensure, to the maximum extent 
     practicable, that--

       ``(I) research of the Institute is relevant to agriculture 
     in the United States and otherwise serves the national 
     interest; and
       ``(II) the research of the Institute supplements and 
     enhances, and does not supplant, research conducted or funded 
     by other Federal agencies.

       ``(D) Compensation.--The Director shall receive basic pay 
     at a rate not to exceed the maximum amount of compensation 
     payable to a member of the Senior Executive Service under 
     subsection (b) of section 5382 of title 5, United States 
     Code, except that the certification requirement in that 
     subsection shall not apply to the compensation of the 
     Director.
       ``(E) Authority and responsibilities of director.--Except 
     as otherwise specifically provided in this subsection, the 
     Director shall--
       ``(i) exercise all of the authority provided to the 
     Institute by this subsection;
       ``(ii) formulate and administer programs in accordance with 
     policies adopted by the Institute, in coordination with the 
     Under Secretary;
       ``(iii) establish offices within the Institute;
       ``(iv) establish procedures for the provision and 
     administration of grants by the Institute; and
       ``(v) consult regularly with the Advisory Board.
       ``(4) Regulations.--The Institute shall have such authority 
     as is necessary to carry out this subsection, including the 
     authority to promulgate such regulations as the Institute 
     considers to be necessary for governance of operations, 
     organization, and personnel.
       ``(5) Administration.--
       ``(A) In general.--The Director shall organize offices and 
     functions within the Institute to administer fundamental and 
     applied research and extension and education programs.
       ``(B) Research priorities.--The Director shall ensure the 
     research priorities established by the Under Secretary 
     through the Research, Education and Extension Office are 
     carried out by the offices and functions of the Institute, 
     where applicable.
       ``(C) Fundamental and applied research.--The Director 
     shall--
       ``(i) determine an appropriate balance between fundamental 
     and applied research programs and functions to ensure future 
     research needs are met; and
       ``(ii) designate staff, as appropriate, to assist in 
     carrying out this subparagraph.
       ``(D) Competitively funded awards.--The Director shall--
       ``(i) promote the use and growth of grants awarded through 
     a competitive process; and
       ``(ii) designate staff, as appropriate, to assist in 
     carrying out this subparagraph.
       ``(E) Coordination.--The Director shall ensure that the 
     offices and functions established under subparagraph (A) are 
     effectively coordinated for maximum efficiency.
       ``(6) Funding.--
       ``(A) In general.--In addition to funds otherwise 
     appropriated to carry out each program administered by the 
     Institute, there are authorized to be appropriated such sums 
     as are necessary to carry out this subsection for each fiscal 
     year.
       ``(B) Allocation.--Funding made available under 
     subparagraph (A) shall be allocated according to 
     recommendations contained in the roadmap described in section 
     7504 of the Food, Conservation, and Energy Act of 2008.''.
       (b) Functions.--Section 296(b) of the Department of 
     Agriculture Reorganization Act of 1994 (7 U.S.C. 7014(b)) is 
     amended--
       (1) in paragraph (4), by striking ``or'' at the end;
       (2) in paragraph (5), by striking the period at the end and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(6) the authority of the Secretary to establish in the 
     Department, under section 251--
       ``(A) the position of Under Secretary of Agriculture for 
     Research, Education, and Economics;
       ``(B) the Research, Education, and Extension Office; and
       ``(C) the National Institute of Food and Agriculture.''.
       (c) Conforming Amendments.--The following conforming 
     amendments shall take effect on October 1, 2009:
       (1) Section 522(d)(2) of the Federal Crop Insurance Act (7 
     U.S.C. 1522(d)(2)) is amended by striking ``the Cooperative 
     State Research, Education, and Extension Service'' and 
     inserting ``the National Institute of Food and Agriculture''.
       (2) Section 524(a) of the Federal Crop Insurance Act (7 
     U.S.C. 1524(a)) is amended in each of paragraphs (1)(B) and 
     (3)(A) by striking ``the Cooperative State Research, 
     Education, and Extension Service'' each place it appears and 
     inserting ``the National Institute of Food and Agriculture''.
       (3) Section 306(a)(11)(C) of the Consolidated Farm and 
     Rural Development Act (7 U.S.C. 1926(a)(11)(C)) is amended by 
     striking ``the Cooperative State Research, Education, and 
     Extension Service'' and inserting ``the National Institute of 
     Food and Agriculture''.
       (4) Section 5(b)(2)(E) of the Agricultural Credit 
     Improvement Act of 1992 (7 U.S.C. 1929 note; Public Law 102-
     554) is amended by striking ``Cooperative Extension Service'' 
     and inserting ``National Institute of Food and Agriculture''.
       (5) Section 11(f)(1) of the Food and Nutrition Act of 2008 
     (7 U.S.C. 2020(f)(1)) is amended by striking ``Cooperative 
     Extension Service'' and inserting ``National Institute of 
     Food and Agriculture''.
       (6) Section 502(h) of the Rural Development Act of 1972 (7 
     U.S.C. 2662(h)) is amended--
       (A) in paragraph (1), by striking ``Extension Service'' and 
     inserting ``National Institute of Food and Agriculture''; and
       (B) in paragraph (4), by striking ``Extension Service 
     staff'' and inserting ``National Institute of Food and 
     Agriculture staff''.
       (7) Section 7404(b)(1)(B) of the Farm Security and Rural 
     Investment Act of 2002 (7 U.S.C. 3101 note; Public Law 107-
     171) is amended by striking clause (vi) and inserting the 
     following:
       ``(vi) the National Institute of Food and Agriculture.''.
       (8) Section 1408(b)(4) of the National Agricultural 
     Research, Extension, and Teaching Policy Act of 1977 (7 
     U.S.C. 3123(b)(4)) is amended by striking ``the Administrator 
     of the Cooperative State Research, Education, and Extension 
     Service'' and inserting ``the Director of the National 
     Institute of Food and Agriculture''.
       (9) Section 2381(a) of the Food, Agriculture, Conservation, 
     and Trade Act of 1990 (7 U.S.C. 3125b(a)) is amended by 
     striking ``Extension Service'' and inserting ``National 
     Institute of Food and Agriculture''.
       (10) The National Agricultural Research, Extension, and 
     Teaching Policy Act of 1977 is amended--
       (A) in section 1424A(b) (7 U.S.C. 3174a(b)), by striking 
     ``the Cooperative State Research, Education, and Extension 
     Service'' and inserting ``the National Institute of Food and 
     Agriculture''; and
       (B) in section 1458(a)(10) (7 U.S.C. 3291(a)(10)), by 
     striking ``the Cooperative State

[[Page H3507]]

     Research, Education, and Extension Service'' and inserting 
     ``the National Institute of Food and Agriculture''.
       (11) Section 1587(a) of the Food Security Act of 1985 (7 
     U.S.C. 3175d(a)) is amended by striking ``Extension Service'' 
     each place it appears and inserting ``National Institute of 
     Food and Agriculture''.
       (12) Section 1444(b)(2)(A) of the National Agricultural 
     Research, Extension, and Teaching Policy Act of 1977 (7 
     U.S.C. 3221(b)(2)(A)) is amended by striking ``Extension 
     Service'' and inserting ``National Institute of Food and 
     Agriculture''.
       (13) Section 1473D(d) of the National Agricultural 
     Research, Extension, and Teaching Policy Act of 1977 (7 
     U.S.C. 3319d(d)) is amended by striking ``the Cooperative 
     State Research Service, the Extension Service'' and inserting 
     ``the National Institute of Food and Agriculture''.
       (14) Section 1499(c) of the Food, Agriculture, 
     Conservation, and Trade Act of 1990 (7 U.S.C. 5506(c)) is 
     amended by striking ``the Cooperative State Research 
     Service'' and all that follows through ``extension 
     services;'' and inserting ``the National Institute of Food 
     and Agriculture, in conjunction with the system of State 
     agricultural experiment stations and State and county 
     cooperative extension services; the Economic Research 
     Service;''.
       (15) Section 1622 of the Food, Agriculture, Conservation, 
     and Trade Act of 1990 (7 U.S.C. 5812) is amended--
       (A) in subsection (a)(1), by striking ``the Cooperative 
     State Research Service in close cooperation with the 
     Extension Service'' and inserting ``the National Institute of 
     Food and Agriculture'';
       (B) in subsection (b)(1)--
       (i) by striking subparagraphs (B) and (C) and inserting the 
     following:
       ``(B) the National Institute of Food and Agriculture;''; 
     and
       (ii) by redesignating subparagraphs (D) through (L) as 
     subparagraphs (C) through (K), respectively.
       (16) Section 1627(d) of the Food, Agriculture, 
     Conservation, and Trade Act of 1990 (7 U.S.C. 5821(d)) is 
     amended by striking ``Extension Service'' and inserting 
     ``National Institute of Food and Agriculture''.
       (17) Section 1629 of the Food, Agriculture, Conservation, 
     and Trade Act of 1990 (7 U.S.C. 5832) is amended--
       (A) in subsection (b), in the first sentence, by striking 
     ``the Extension Service'' and inserting ``the National 
     Institute of Food and Agriculture''; and
       (B) in subsection (h), by striking ``Extension Service'' 
     and inserting ``National Institute of Food and Agriculture''.
       (18) Section 1638(b) of the Food, Agriculture, 
     Conservation, and Trade Act of 1990 (7 U.S.C. 5852(b)) is 
     amended--
       (A) in paragraph (3), by striking ``Cooperative State 
     Research Service'' and inserting ``National Institute of Food 
     and Agriculture''; and
       (B) in paragraph (5), by striking ``Cooperative State 
     Research Service'' and inserting ``National Institute of Food 
     and Agriculture''.
       (19) Section 1640(a)(2) of the Food, Agriculture, 
     Conservation, and Trade Act of 1990 (7 U.S.C. 5854(a)(2)) is 
     amended by striking ``the Administrator of the Extension 
     Service, the Administrator of the Cooperative State Research 
     Service'' and inserting ``the Director of the National 
     Institute of Food and Agriculture''.
       (20) Section 1641(a) of the Food, Agriculture, 
     Conservation, and Trade Act of 1990 (7 U.S.C. 5855(a)) is 
     amended--
       (A) in paragraph (2), by striking ``Cooperative State 
     Research Service'' and inserting ``National Institute of Food 
     and Agriculture''; and
       (B) in paragraph (4,) by striking ``Extension Service'' and 
     inserting ``National Institute of Food and Agriculture''.
       (21) Section 1668(b) of the Food, Agriculture, 
     Conservation, and Trade Act of 1990 (7 U.S.C. 5921(b)) is 
     amended by striking ``Cooperative State Research, Education, 
     and Extension Service'' and inserting ``National Institute of 
     Food and Agriculture''.
       (22) Section 1670(a)(4) of the Food, Agriculture, 
     Conservation, and Trade Act of 1990 (7 U.S.C. 5923(a)(4)) is 
     amended by striking ``the Administrator of the Cooperative 
     State Research, Education, and Extension Service'' and 
     inserting ``the Director of the National Institute of Food 
     and Agriculture''.
       (23) Section 1677(a) of the Food, Agriculture, 
     Conservation, and Trade Act of 1990 (7 U.S.C. 5930(a)) is 
     amended by striking ``Extension Service'' and inserting 
     ``National Institute of Food and Agriculture''.
       (24) Section 2122(b)(1) of the Food, Agriculture, 
     Conservation, and Trade Act of 1990 (7 U.S.C. 6521(b)(1)) is 
     amended by striking ``Extension Service'' and inserting 
     ``National Institute of Food and Agriculture''.
       (25) Section 2371 of the Food, Agriculture, Conservation, 
     and Trade Act of 1990 (7 U.S.C. 6601) is amended--
       (A) in subsection (a), by striking ``Extension Service'' 
     and inserting ``National Institute of Food and Agriculture''; 
     and
       (B) in subsection (c)(3), by striking ``Service'' and 
     inserting ``System''.
       (26) Section 2377(a) of the Food, Agriculture, 
     Conservation, and Trade Act of 1990 (7 U.S.C. 6615(a)) is 
     amended by striking ``Extension Service'' and inserting 
     ``National Institute of Food and Agriculture''.
       (27) Section 212(a)(2)(A) of the Department of Agriculture 
     Reorganization Act of 1994 (7 U.S.C. 6912(a)(2)(A)) is 
     amended by striking ``251(d),'' and inserting ``251(f),''.
       (28) Section 537 of the Federal Agriculture Improvement and 
     Reform Act of 1996 (7 U.S.C. 7446) is amended in each of 
     subsections (a)(2) and (b)(3)(B)(i) by striking ``Cooperative 
     State Research, Education, and Extension Service'' and 
     inserting ``cooperative extension''.
       (29) Section 101(b)(2) of the Agricultural Research, 
     Extension, and Education Reform Act of 1998 (7 U.S.C. 
     7611(b)(2)) is amended by striking ``Cooperative State 
     Research, Education, and Extension Service'' and inserting 
     ``National Institute of Food and Agriculture''.
       (30) Section 103(a) of the Agricultural Research, 
     Extension, and Education Reform Act of 1998 (7 U.S.C. 
     7613(a)) is amended--
       (A) in the subsection heading, by striking ``Cooperative 
     State Research, Education, and Extension Service'' and 
     inserting ``National Institute of Food and Agriculture''; and
       (B) in each of paragraphs (1) and (2)(A), by striking ``the 
     Cooperative State Research, Education, and Extension 
     Service'' and inserting ``the National Institute of Food and 
     Agriculture''.
       (31) Section 407(c) of the Agricultural Research, 
     Extension, and Education Reform Act of 1998 (7 U.S.C. 
     7627(c)) is amended by striking ``the Cooperative State 
     Research, Education, and Extension Service'' and inserting 
     ``the National Institute of Food and Agriculture''.
       (32) Section 410(a) of the Agricultural Research, 
     Extension, and Education Reform Act of 1998 (7 U.S.C. 
     7630(a)) is amended by striking ``the Administrator of the 
     Cooperative State Research, Education, and Extension 
     Service'' and inserting ``the Director of the National 
     Institute of Food and Agriculture''.
       (33) Section 307(g)(5) of the Agricultural Risk Protection 
     Act of 2000 (7 U.S.C. 8606(g)(5)) is amended by striking 
     ``Administrator of the Cooperative State Research, Education, 
     and Extension Service'' and inserting ``Director of the 
     National Institute of Food and Agriculture''.
       (34) Section 5(a) of the Renewable Resources Extension Act 
     of 1978 (16 U.S.C. 1674a(a)) is amended by striking 
     ``Extension Service'' and inserting ``National Institute of 
     Food and Agriculture''.
       (35) Section 6(b) of the Cooperative Forestry Assistance 
     Act of 1978 (16 U.S.C. 2103b(b)) is amended by striking ``the 
     Cooperative State Research, Education, and Extension Service, 
     may provide technical, financial, and related assistance to 
     State foresters, equivalent State officials, or Cooperative 
     Extension officials'' and inserting ``the National Institute 
     of Food and Agriculture, may provide technical, financial, 
     and related assistance to State foresters, equivalent State 
     officials, or cooperative extension officials''.
       (36) Section 9(g)(2)(A)(viii) of the Cooperative Forestry 
     Assistance Act of 1978 (16 U.S.C. 2105(g)(2)(A)(viii)) is 
     amended by striking ``Extension Service'' and inserting 
     ``National Institute of Food and Agriculture''.
       (37) Section 19(b)(1)(B)(i) of the Cooperative Forestry 
     Assistance Act of 1978 (16 U.S.C. 2113(b)(1)(B)(i)) is 
     amended by striking ``Extension Service'' and inserting 
     ``National Institute of Food and Agriculture''.
       (38) Section 1261(c)(4) of the Food Security Act of 1985 
     (16 U.S.C. 3861(c)(4)) is amended by striking ``Extension 
     Service'' and inserting ``National Institute of Food and 
     Agriculture''.
       (39) Section 105(a) of the Africa: Seeds of Hope Act of 
     1998 (22 U.S.C. 2293 note; Public Law 105-385) is amended by 
     striking ``the Cooperative State, Research, Education, and 
     Extension Service (CSREES)'' and inserting ``the National 
     Institute of Food and Agriculture''.
       (40) Section 307(a)(4) of the National Aeronautic and Space 
     Administration Authorization Act of 2005 (42 U.S.C. 
     16657(a)(4)) is amended by striking subparagraph (B) and 
     inserting the following:
       ``(B) the program and structure of, peer review process of, 
     management of conflicts of interest by, compensation of 
     reviewers of, and the effects of compensation on reviewer 
     efficiency and quality within, the National Institute of Food 
     and Agriculture of the Department of Agriculture;''.

               PART III--NEW GRANT AND RESEARCH PROGRAMS

     SEC. 7521. RESEARCH AND EDUCATION GRANTS FOR THE STUDY OF 
                   ANTIBIOTIC-RESISTANT BACTERIA.

       (a) In General.--The Secretary shall provide research and 
     education grants, on a competitive basis--
       (1) to study the development of antibiotic-resistant 
     bacteria, including--
       (A) movement of antibiotic-resistant bacteria into 
     groundwater and surface water; and
       (B) the effect on antibiotic resistance from various drug 
     use regimens; and
       (2) to study and ensure the judicious use of antibiotics in 
     veterinary and human medicine, including--
       (A) methods and practices of animal husbandry;
       (B) safe and effective alternatives to antibiotics;
       (C) the development of better veterinary diagnostics to 
     improve decisionmaking; and
       (D) the identification of conditions or factors that affect 
     antibiotic use on farms.
       (b) Administration.--Paragraphs (4), (7), (8), and (11)(B) 
     of subsection (b) of the Competitive, Special, and Facilities 
     Research Grant Act (7 U.S.C. 450i) shall apply with respect 
     to the making of grants under this section.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section for each of fiscal years 2008 through 2012.

     SEC. 7522. FARM AND RANCH STRESS ASSISTANCE NETWORK.

       (a) In General.--The Secretary, in coordination with the 
     Secretary of Health and Human Services, shall make 
     competitive grants to support cooperative programs between 
     State cooperative extension services and nonprofit 
     organizations to establish a Farm and Ranch Stress Assistance 
     Network that provides stress assistance programs to 
     individuals who are engaged in farming, ranching, and other 
     agriculture-related occupations.

[[Page H3508]]

       (b) Eligible Programs.--Grants awarded under subsection (a) 
     may be used to initiate, expand, or sustain programs that 
     provide professional agricultural behavioral health 
     counseling and referral for other forms of assistance as 
     necessary through--
       (1) farm telephone helplines and websites;
       (2) community education;
       (3) support groups;
       (4) outreach services and activities; and
       (5) home delivery of assistance, in a case in which a farm 
     resident is homebound.
       (c) Extension Services.--Grants shall be awarded under this 
     subsection directly to State cooperative extension services 
     to enable the State cooperative extension services to enter 
     into contracts, on a multiyear basis, with nonprofit, 
     community-based, direct-service organizations to initiate, 
     expand, or sustain cooperative programs described in 
     subsections (a) and (b).
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section for each of fiscal years 2008 through 2012.

     SEC. 7523. SEED DISTRIBUTION.

       (a) In General.--The Secretary shall make competitive 
     grants to eligible entities to carry out a seed distribution 
     program to administer and maintain the distribution of 
     vegetable seeds donated by commercial seed companies.
       (b) Purposes.--The purposes of this program include--
       (1) the distribution of seeds donated by commercial seed 
     companies free-of-charge to appropriate--
       (A) individuals;
       (B) groups;
       (C) institutions;
       (D) governmental and nongovernmental organizations; and
       (E) such other entities as the Secretary may designate;
       (2) distribution of seeds to underserved communities, such 
     as communities that experience--
       (A) limited access to affordable fresh vegetables;
       (B) a high rate of hunger or food insecurity; or
       (C) severe or persistent poverty.
       (c) Administration.--Paragraphs (4), (7), (8), and (11)(B) 
     of subsection (b) of the Competitive, Special, and Facilities 
     Research Grant Act (7 U.S.C. 450i) shall apply with respect 
     to the making of grants under this section.
       (d) Selection.--An eligible entity selected to receive a 
     grant under subsection (a) shall have--
       (1) expertise regarding the distribution of vegetable seeds 
     donated by commercial seed companies; and
       (2) the ability to achieve the purpose of the seed 
     distribution program.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section for each of fiscal years 2008 through 2012.

     SEC. 7524. LIVE VIRUS FOOT AND MOUTH DISEASE RESEARCH.

       (a) In General.--The Secretary shall issue a permit 
     required under section 12 of the Act of May 29, 1884 (21 
     U.S.C. 113a) to the Secretary of Homeland Security for work 
     on the live virus of foot and mouth disease at any facility 
     that is a successor to the Plum Island Animal Disease Center 
     and charged with researching high-consequence biological 
     threats involving zoonotic and foreign animal diseases 
     (referred to in this section as the ``successor facility'').
       (b) Limitation to Single Facility.--Not more than 1 
     facility shall be issued a permit under subsection (a).
       (c) Limitation on Validity.--The permit issued under this 
     section shall be valid unless the Secretary determines that 
     the study of live foot and mouth disease virus at the 
     successor facility is not being carried out in accordance 
     with the regulations promulgated by the Secretary pursuant to 
     the Agricultural Bioterrorism Protection Act of 2002 (7 
     U.S.C. 8401 et seq.).
       (d) Authority.--The suspension, revocation, or other 
     impairment of the permit issued under this section--
       (1) shall be made by the Secretary; and
       (2) is a nondelegable function.

     SEC. 7525. NATURAL PRODUCTS RESEARCH PROGRAM.

       (a) In General.--The Secretary shall establish within the 
     Department a natural products research program.
       (b) Duties.--In carrying out the program established under 
     subsection (a), the Secretary shall coordinate research 
     relating to natural products, including--
       (1) research to improve human health and agricultural 
     productivity through the discovery, development, and 
     commercialization of products and agrichemicals from 
     bioactive natural products, including products from plant, 
     marine, and microbial sources;
       (2) research to characterize the botanical sources, 
     production, chemistry, and biological properties of plant-
     derived natural products; and
       (3) other research priorities identified by the Secretary.
       (c) Peer and Merit Review.--The Secretary shall--
       (1) determine the relevance and merit of research under 
     this section through a system of peer review established by 
     the Secretary pursuant to section 103 of the Agricultural 
     Research, Extension, and Education Reform Act of 1998 (7 
     U.S.C. 7613); and
       (2) approve funding for research on the basis of merit, 
     quality, and relevance to advancing the purposes of this 
     section.
       (d) Buildings and Facilities.--Funds made available under 
     this section shall not be used for the construction of a new 
     building or facility or the acquisition, expansion, 
     remodeling, or alteration of an existing building or facility 
     (including site grading and improvement and architect fees).
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section such sums as are 
     necessary for each of fiscal years 2008 through 2012.

     SEC. 7526. SUN GRANT PROGRAM.

       (a) Establishment.--The Secretary shall establish and carry 
     out a program to provide grants to the sun grant centers and 
     subcenter specified in subsection (b)--
       (1) to enhance national energy security through the 
     development, distribution, and implementation of biobased 
     energy technologies;
       (2) to promote diversification in, and the environmental 
     sustainability of, agricultural production in the United 
     States through biobased energy and product technologies;
       (3) to promote economic diversification in rural areas of 
     the United States through biobased energy and product 
     technologies; and
       (4) to enhance the efficiency of bioenergy and biomass 
     research and development programs through improved 
     coordination and collaboration among--
       (A) the Department of Agriculture;
       (B) the Department of Energy; and
       (C) land-grant colleges and universities.
       (b) Grants.--
       (1) In general.--The Secretary shall use amounts made 
     available under subsection (g) to provide grants to each of 
     the following:
       (A) North-central center.--A north-central sun grant center 
     at South Dakota State University for the region composed of 
     the States of Illinois, Indiana, Iowa, Minnesota, Montana, 
     Nebraska, North Dakota, South Dakota, Wisconsin, and Wyoming.
       (B) Southeastern center.--A southeastern sun grant center 
     at the University of Tennessee at Knoxville for the region 
     composed of--
       (i) the States of Alabama, Florida, Georgia, Kentucky, 
     Mississippi, North Carolina, South Carolina, Tennessee, and 
     Virginia;
       (ii) the Commonwealth of Puerto Rico; and
       (iii) the United States Virgin Islands.
       (C) South-central center.--A south-central sun grant center 
     at Oklahoma State University for the region composed of the 
     States of Arkansas, Colorado, Kansas, Louisiana, Missouri, 
     New Mexico, Oklahoma, and Texas.
       (D) Western center.--A western sun grant center at Oregon 
     State University for the region composed of--
       (i) the States of Alaska, Arizona, California, Hawaii, 
     Idaho, Nevada, Oregon, Utah, and Washington; and
       (ii) insular areas (as defined in section 1404 of the 
     National Agricultural Research, Extension, and Teaching 
     Policy Act of 1977 (7 U.S.C. 3103 (other than the insular 
     areas referred to in clauses (ii) and (iii) of subparagraph 
     (B))).
       (E) Northeastern center.--A northeastern sun grant center 
     at Cornell University for the region composed of the States 
     of Connecticut, Delaware, Massachusetts, Maryland, Maine, 
     Michigan, New Hampshire, New Jersey, New York, Ohio, 
     Pennsylvania, Rhode Island, Vermont, and West Virginia.
       (F) Western insular pacific subcenter.--A western insular 
     Pacific sun grant subcenter at the University of Hawaii for 
     the region of Alaska, Hawaii, Guam, American Samoa, the 
     Commonwealth of the Northern Mariana Islands, the Federated 
     States of Micronesia, the Republic of the Marshall Islands, 
     and the Republic of Palau.
       (2) Manner of distribution.--
       (A) Centers.--In providing any funds made available under 
     subsection (g), the Secretary shall distribute the grants in 
     equal amounts to the sun grant centers described in 
     subparagraphs (A) through (E) of paragraph (1).
       (B) Subcenter.--The sun grant center described in paragraph 
     (1)(D) shall allocate a portion of the funds received under 
     paragraph (1) to the subcenter described in paragraph (1)(F) 
     pursuant to guidance issued by the Secretary.
       (3) Failure to comply with requirements.--If the Secretary 
     finds on the basis of a review of the annual report required 
     under subsection (f) or on the basis of an audit of a sun 
     grant center or subcenter conducted by the Secretary that the 
     center or subcenter has not complied with the requirements of 
     this section, the sun grant center or subcenter shall be 
     ineligible to receive further grants under this section for 
     such period of time as may be prescribed by the Secretary.
       (c) Use of Funds.--
       (1) Competitive grants.--
       (A) In general.--A sun grant center or subcenter shall use 
     75 percent of the funds described in subsection (b) to 
     provide competitive grants to entities that are--
       (i) eligible to receive grants under subsection (b)(7) of 
     the Competitive, Special, and Facilities Research Grant Act 
     (7 U.S.C. 450i(b)(7)); and
       (ii) located in the region covered by the sun grant center 
     or subcenter.
       (B) Activities.--Grants described in subparagraph (A) shall 
     be used by the grant recipient to conduct, in a manner 
     consistent with the purposes described in subsection (a), 
     multi-institutional and multistate--
       (i) research, extension, and education programs on 
     technology development; and
       (ii) integrated research, extension, and education programs 
     on technology implementation.
       (C) Funding allocation.--Of the amount of funds that is 
     used to provide grants under subparagraph (A), the sun grant 
     center or subcenter shall use--
       (i) not less than 30 percent of the funds to carry out the 
     programs described in subparagraph (B)(i); and
       (ii) not less than 30 percent of the funds to carry out the 
     programs described in subparagraph (B)(ii).
       (D) Administration.--
       (i) Peer and merit review.--In making grants under this 
     paragraph, a sun grant center or subcenter shall--

[[Page H3509]]

       (I) seek and accept proposals for grants;
       (II) determine the relevance and merit of proposals through 
     a system of peer review similar to that established by the 
     Secretary pursuant to section 103 of the Agricultural 
     Research, Extension, and Education Reform Act of 1998 (7 
     U.S.C. 7613); and
       (III) award grants on the basis of merit, quality, and 
     relevance to advancing the purposes of this section.

       (ii) Priority.--A sun grant center or subcenter shall give 
     a higher priority to programs that are consistent with the 
     plan approved by the Secretary under subsection (d).
       (iii) Term.--A grant awarded by a sun grant center or 
     subcenter shall have a term that does not exceed 5 years.
       (iv) Matching funds required.--

       (I) In general.--Except as provided in subclauses (II) and 
     (III), as a condition of receiving a grant under this 
     paragraph, the sun grant center or subcenter shall require 
     that not less than 20 percent of the cost of an activity 
     described in subparagraph (B) be matched with funds, 
     including in-kind contributions, from a non-Federal source.
       (II) Exclusion.--Subclause (I) shall not apply to 
     fundamental research (as defined in subsection (f)(1) of 
     section 251 of the Department of Agriculture Reorganization 
     Act of 1994 (7 U.S.C. 6971) (as added by section 7511(a)(4)).
       (III) Reduction.--The sun grant center or subcenter may 
     reduce or eliminate the requirement for non-Federal funds 
     under subclause (I) for applied research (as defined in 
     subsection (f)(1) of section 251 of the Department of 
     Agriculture Reorganization Act of 1994 (7 U.S.C. 6971) (as 
     added by section 7511(a)(4)) if the sun grant center or 
     subcenter determines that the reduction is necessary and 
     appropriate pursuant to guidance issued by the Secretary.

       (v) Buildings and facilities.--Funds made available for 
     grants shall not be used for the construction of a new 
     building or facility or the acquisition, expansion, 
     remodeling, or alteration of an existing building or facility 
     (including site grading and improvement and architect fees).
       (vi) Limitation on indirect costs.--A sun grant center or 
     subcenter may not recover the indirect costs of making grants 
     under subparagraph (A).
       (2) Administrative expenses.--A sun grant center or 
     subcenter may use up to 4 percent of the funds described in 
     subsection (b) to pay administrative expenses incurred in 
     carrying out paragraph (1).
       (3) Research, extension and educational activities.--The 
     sun grant centers and subcenter shall use the remainder of 
     the funds described in subsection (b) to conduct, in a manner 
     consistent with the purposes described in subsection (a), 
     multi-institutional and multistate--
       (A) research, extension, and educational programs on 
     technology development; and
       (B) integrated research, extension, and educational 
     programs on technology implementation.
       (d) Plan for Research Activities to Be Funded.--
       (1) In general.--Subject to the availability of funds under 
     subsection (g), and in cooperation with land-grant colleges 
     and universities and private industry in accordance with 
     paragraph (2), the sun grant centers and subcenter shall 
     jointly develop and submit to the Secretary for approval a 
     plan for addressing the bioenergy, biomass, and gasification 
     research priorities of the Department of Agriculture and the 
     Department of Energy at the State and regional levels.
       (2) Gasification coordination.--With respect to 
     gasification research activity, the sun grant centers and 
     subcenter shall coordinate planning with land-grant colleges 
     and universities in their respective regions that have 
     ongoing research activities in that area.
       (3) Funding.--Funds described in subsection (c)(2) shall be 
     available to carry out planning coordination under paragraph 
     (1).
       (4) Use of plan.--The sun grant centers and subcenter shall 
     use the plan described in paragraph (1) in making grants 
     under subsection (c)(1).
       (e) Grant Information Analysis Center.--The sun grant 
     centers and subcenter shall maintain a Sun Grant Information 
     Analysis Center at the sun grant center specified in 
     subsection (b)(1)(A) to provide the sun grant centers and 
     subcenter with analysis and data management support.
       (f) Annual Reports.--Not later than 90 days after the end 
     of each fiscal year, a sun grant center or subcenter 
     receiving a grant under this section shall submit to the 
     Secretary a report that describes the policies, priorities, 
     and operations of the program carried out by the center or 
     subcenter during the fiscal year, including--
       (1) the results of all peer and merit review procedures 
     conducted pursuant to subsection (c)(1)(D)(i); and
       (2) a description of progress made in facilitating the 
     priorities described in subsection (d)(1).
       (g) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $75,000,000 for 
     each of fiscal years 2008 through 2012, of which not more 
     than $4,000,000 for each fiscal year shall be made available 
     to carry out subsection (e).

     SEC. 7527. STUDY AND REPORT ON FOOD DESERTS.

       (a) Definition of Food Desert.--In this section, the term 
     ``food desert'' means an area in the United States with 
     limited access to affordable and nutritious food, 
     particularly such an area composed of predominantly lower-
     income neighborhoods and communities.
       (b) Study and Report.--The Secretary shall carry out a 
     study of, and prepare a report on, food deserts.
       (c) Contents.--The study and report shall--
       (1) assess the incidence and prevalence of food deserts;
       (2) identify--
       (A) characteristics and factors causing and influencing 
     food deserts; and
       (B) the effect on local populations of limited access to 
     affordable and nutritious food; and
       (3) provide recommendations for addressing the causes and 
     effects of food deserts through measures that include--
       (A) community and economic development initiatives;
       (B) incentives for retail food market development, 
     including supermarkets, small grocery stores, and farmers' 
     markets; and
       (C) improvements to Federal food assistance and nutrition 
     education programs.
       (d) Coordination With Other Agencies and Organizations.--
     The Secretary shall conduct the study under this section in 
     coordination and consultation with--
       (1) the Secretary of Health and Human Services;
       (2) the Administrator of the Small Business Administration;
       (3) the Institute of Medicine; and
       (4) representatives of appropriate businesses, academic 
     institutions, and nonprofit and faith-based organizations.
       (e) Submission to Congress.--Not later than 1 year after 
     the date of enactment of this Act, the Secretary shall submit 
     to the Committee on Agriculture of the House of 
     Representatives and the Committee on Agriculture, Nutrition, 
     and Forestry of the Senate the report prepared under this 
     section, including the findings and recommendations described 
     in subsection (c).
       (f) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $500,000.

     SEC. 7528. DEMONSTRATION PROJECT AUTHORITY FOR TEMPORARY 
                   POSITIONS.

       Notwithstanding section 4703(d)(1) of title 5, United 
     States Code, the amendment to the personnel management 
     demonstration project established in the Department of 
     Agriculture (67 Fed. Reg. 70776 (2002)), shall become 
     effective upon the date of enactment of this Act and shall 
     remain in effect unless modified by law.

     SEC. 7529. AGRICULTURAL AND RURAL TRANSPORTATION RESEARCH AND 
                   EDUCATION.

       (a) In General.--The Secretary, in consultation with the 
     Secretary of Transportation, shall make competitive grants to 
     institutions of higher education to carry out agricultural 
     and rural transportation research and education activities.
       (b) Activities.--Research and education grants made under 
     this section shall be used to address rural transportation 
     and logistics needs of agricultural producers and related 
     rural businesses, including--
       (1) the transportation of biofuels; and
       (2) the export of agricultural products.
       (c) Selection Criteria.--
       (1) In general.--The Secretary shall award grants under 
     this section on the basis of the transportation research, 
     education, and outreach expertise of the applicant, as 
     determined by the Secretary.
       (2) Priority.--In awarding grants under this section, the 
     Secretary shall give priority to institutions of higher 
     education for use in coordinating research and education 
     activities with other institutions of higher education with 
     similar agricultural and rural transportation research and 
     education programs.
       (d) Diversification of Research.--The Secretary shall award 
     grants under this section in areas that are regionally 
     diverse and broadly representative of the diversity of 
     agricultural production and related transportation needs in 
     the rural areas of the United States.
       (e) Matching Funds Requirement.--The Secretary shall 
     require each recipient of a grant under this section to 
     provide, from non-Federal sources, in cash or in kind, 50 
     percent of the cost of carrying out activities under the 
     grant.
       (f) Grant Review.--A grant shall be awarded under this 
     section on a competitive, peer- and merit-reviewed basis in 
     accordance with section 103(a) of the Agricultural Research, 
     Extension, and Education Reform Act of 1998 (7 U.S.C. 
     7613(a)).
       (g) No Duplication.--In awarding grants under this section, 
     the Secretary shall ensure that activities funded under this 
     section do not duplicate the efforts of the University 
     Transportation Centers described in sections 5505 and 5506 of 
     title 49, United States Code.
       (h) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $5,000,000 for 
     each of fiscal years 2008 through 2012.

                          TITLE VIII--FORESTRY

 Subtitle A--Amendments to Cooperative Forestry Assistance Act of 1978

     SEC. 8001. NATIONAL PRIORITIES FOR PRIVATE FOREST 
                   CONSERVATION.

       Section 2 of the Cooperative Forestry Assistance Act of 
     1978 (16 U.S.C. 2101) is amended--
       (1) by redesignating subsections (c) and (d) as subsections 
     (e) and (f), respectively; and
       (2) by inserting after subsection (b) the following new 
     subsections:
       ``(c) Priorities.--In allocating funds appropriated or 
     otherwise made available under this Act, the Secretary shall 
     focus on the following national private forest conservation 
     priorities, notwithstanding other priorities specified 
     elsewhere in this Act:
       ``(1) Conserving and managing working forest landscapes for 
     multiple values and uses.
       ``(2) Protecting forests from threats, including 
     catastrophic wildfires, hurricanes, tornados, windstorms, 
     snow or ice storms, flooding, drought, invasive species, 
     insect or disease outbreak, or development, and restoring 
     appropriate forest types in response to such threats.
       ``(3) Enhancing public benefits from private forests, 
     including air and water quality, soil

[[Page H3510]]

     conservation, biological diversity, carbon storage, forest 
     products, forestry-related jobs, production of renewable 
     energy, wildlife, wildlife corridors and wildlife habitat, 
     and recreation.
       ``(d) Reporting Requirement.--Not later than September 30, 
     2011, the Secretary shall submit to Congress a report 
     describing how funds were used under this Act, and through 
     other programs administered by the Secretary, to address the 
     national priorities specified in subsection (c) and the 
     outcomes achieved in meeting the national priorities.''.

     SEC. 8002. LONG-TERM STATE-WIDE ASSESSMENTS AND STRATEGIES 
                   FOR FOREST RESOURCES.

       The Cooperative Forestry Assistance Act of 1978 is amended 
     by inserting after section 2 (16 U.S.C. 2101) the following 
     new section:

     ``SEC. 2A. STATE-WIDE ASSESSMENT AND STRATEGIES FOR FOREST 
                   RESOURCES.

       ``(a) Assessment and Strategies for Forest Resources.--For 
     a State to be eligible to receive funds under the authorities 
     of this Act, the State forester of that State or equivalent 
     State official shall develop and submit to the Secretary, not 
     later than two years after the date of enactment of the Food, 
     Conservation, and Energy Act of 2008, the following:
       ``(1) A State-wide assessment of forest resource 
     conditions, including--
       ``(A) the conditions and trends of forest resources in that 
     State;
       ``(B) the threats to forest lands and resources in that 
     State consistent with the national priorities specified in 
     section 2(c);
       ``(C) any areas or regions of that State that are a 
     priority; and
       ``(D) any multi-State areas that are a regional priority.
       ``(2) A long-term State-wide forest resource strategy, 
     including--
       ``(A) strategies for addressing threats to forest resources 
     in the State outlined in the assessment required by paragraph 
     (1); and
       ``(B) a description of the resources necessary for the 
     State forester or equivalent State official from all sources 
     to address the State-wide strategy.
       ``(b) Updating.--At such times as the Secretary determines 
     to be necessary, the State forester or equivalent State 
     official shall update and resubmit to the Secretary the 
     State-wide assessment and State-wide strategy required by 
     subsection (a).
       ``(c) Coordination.--In developing or updating the State-
     wide assessment and State-wide strategy required by 
     subsection (a), the State Forester or equivalent State 
     official shall coordinate with--
       ``(1) the State Forest Stewardship Coordinating Committee 
     established for the State under section 19(b);
       ``(2) the State wildlife agency, with respect to strategies 
     contained in the State wildlife action plans;
       ``(3) the State Technical Committee;
       ``(4) applicable Federal land management agencies; and
       ``(5) for purposes of the Forest Legacy Program under 
     section 7, the State lead agency designated by the Governor.
       ``(d) Incorporation of Other Plans.--In developing or 
     updating the State-wide assessment and State-wide strategy 
     required by subsection (a), the State forester or equivalent 
     State official shall incorporate any forest management plan 
     of the State, including community wildfire protection plans 
     and State wildlife action plans.
       ``(e) Sufficiency.--Once approved by the Secretary, a 
     State-wide assessment and State-wide strategy developed under 
     subsection (a) shall be deemed to be sufficient to satisfy 
     all relevant State planning and assessment requirements under 
     this Act.
       ``(f) Funding.--
       ``(1) Authorization of appropriations.--There are 
     authorized to be appropriated to carry out this section up to 
     $10,000,000 for each of fiscal years 2008 through 2012.
       ``(2) Additional funding sources.--In addition to the funds 
     appropriated for a fiscal year pursuant to the authorization 
     of appropriations in paragraph (1) to carry out this section, 
     the Secretary may use any other funds made available for 
     planning under this Act to carry out this section, except 
     that the total amount of combined funding used to carry out 
     this section may not exceed $10,000,000 in any fiscal year.
       ``(g) Annual Report on Use of Funds.--The State forester or 
     equivalent State official shall submit to the Secretary an 
     annual report detailing how funds made available to the State 
     under this Act are being used.''.

     SEC. 8003. COMMUNITY FOREST AND OPEN SPACE CONSERVATION 
                   PROGRAM.

       (a) Findings.--Congress finds that--
       (1) the Forest Service projects that, by calendar year 
     2030, approximately 44,000,000 acres of privately-owned 
     forest land will be developed throughout the United States;
       (2) public access to parcels of privately-owned forest land 
     for outdoor recreational activities, including hunting, 
     fishing, and trapping, has declined and, as a result, 
     participation in those activities has also declined in cases 
     in which public access is not secured;
       (3) rising rates of obesity and other public health 
     problems relating to the inactivity of the citizens of the 
     United States have been shown to be ameliorated by improving 
     public access to safe and attractive areas for outdoor 
     recreation;
       (4) in rapidly-growing communities of all sizes throughout 
     the United States, remaining parcels of forest land play an 
     essential role in protecting public water supplies;
       (5) forest parcels owned by local governmental entities and 
     nonprofit organizations are providing important demonstration 
     sites for private landowners to learn forest management 
     techniques;
       (6) throughout the United States, communities of diverse 
     types and sizes are deriving significant financial and 
     community benefits from managing forest land owned by local 
     governmental entities for timber and other forest products; 
     and
       (7) there is an urgent need for local governmental entities 
     to be able to leverage financial resources in order to 
     purchase important parcels of privately-owned forest land as 
     the parcels are offered for sale.
       (b) Community Forest and Open Space Conservation Program.--
     The Cooperative Forestry Assistance Act of 1978 is amended by 
     inserting after section 7 (16 U.S.C. 2103c) the following new 
     section:

     ``SEC. 7A. COMMUNITY FOREST AND OPEN SPACE CONSERVATION 
                   PROGRAM.

       ``(a) Definitions.--In this section:
       ``(1) Eligible entity.--The term `eligible entity' means a 
     local governmental entity, Indian tribe, or nonprofit 
     organization that owns or acquires a parcel under the 
     program.
       ``(2) Indian tribe.--The term `Indian tribe' has the 
     meaning given the term in section 4 of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 450b).
       ``(3) Local governmental entity.--The term `local 
     governmental entity' includes any municipal government, 
     county government, or other local government body with 
     jurisdiction over local land use decisions.
       ``(4) Nonprofit organization.--The term `nonprofit 
     organization' means any organization that--
       ``(A) is described in section 170(h)(3) of the Internal 
     Revenue Code of 1986; and
       ``(B) operates in accordance with 1 or more of the purposes 
     specified in section 170(h)(4)(A) of that Code.
       ``(5) Program.--The term `Program' means the community 
     forest and open space conservation program established under 
     subsection (b).
       ``(6) Secretary.--The term `Secretary' means the Secretary 
     of Agriculture, acting through the Chief of the Forest 
     Service.
       ``(b) Establishment.--The Secretary shall establish a 
     program, to be known as the `community forest and open space 
     conservation program'.
       ``(c) Grant Program.--
       ``(1) In general.--The Secretary may award grants to 
     eligible entities to acquire private forest land, to be owned 
     in fee simple, that--
       ``(A) are threatened by conversion to nonforest uses; and
       ``(B) provide public benefits to communities, including--
       ``(i) economic benefits through sustainable forest 
     management;
       ``(ii) environmental benefits, including clean water and 
     wildlife habitat;
       ``(iii) benefits from forest-based educational programs, 
     including vocational education programs in forestry;
       ``(iv) benefits from serving as models of effective forest 
     stewardship for private landowners; and
       ``(v) recreational benefits, including hunting and fishing.
       ``(2) Federal cost share.--An eligible entity may receive a 
     grant under the Program in an amount equal to not more than 
     50 percent of the cost of acquiring 1 or more parcels, as 
     determined by the Secretary.
       ``(3) Non-federal share.--As a condition of receipt of the 
     grant, an eligible entity that receives a grant under the 
     Program shall provide, in cash, donation, or in kind, a non-
     Federal matching share in an amount that is at least equal to 
     the amount of the grant received.
       ``(4) Appraisal of parcels.--To determine the non-Federal 
     share of the cost of a parcel of privately-owned forest land 
     under paragraph (2), an eligible entity shall require 
     appraisals of the land that comply with the Uniform Appraisal 
     Standards for Federal Land Acquisitions developed by the 
     Interagency Land Acquisition Conference.
       ``(5) Application.--An eligible entity that seeks to 
     receive a grant under the Program shall submit to the State 
     forester or equivalent official (or in the case of an Indian 
     tribe, an equivalent official of the Indian tribe) an 
     application that includes--
       ``(A) a description of the land to be acquired;
       ``(B) a forest plan that provides--
       ``(i) a description of community benefits to be achieved 
     from the acquisition of the private forest land; and
       ``(ii) an explanation of the manner in which any private 
     forest land to be acquired using funds from the grant will be 
     managed; and
       ``(C) such other relevant information as the Secretary may 
     require.
       ``(6) Effect on trust land.--
       ``(A) Ineligibility.--The Secretary shall not provide a 
     grant under the Program for any project on land held in trust 
     by the United States (including Indian reservations and 
     allotment land).
       ``(B) Acquired land.--No land acquired using a grant 
     provided under the Program shall be converted to land held in 
     trust by the United States on behalf of any Indian tribe.
       ``(7) Applications to secretary.--The State forester or 
     equivalent official (or in the case of an Indian tribe, an 
     equivalent official of the Indian tribe) shall submit to the 
     Secretary a list that includes a description of each project 
     submitted by an eligible entity at such times and in such 
     form as the Secretary shall prescribe.
       ``(d) Duties of Eligible Entity.--An eligible entity shall 
     provide public access to, and manage, forest land acquired 
     with a grant under this section in a manner that is 
     consistent with the purposes for which the land was acquired 
     under the Program.
       ``(e) Prohibited Uses.--
       ``(1) In general.--Subject to paragraphs (2) and (3), an 
     eligible entity that acquires a parcel under the Program 
     shall not sell the parcel or convert the parcel to nonforest 
     use.
       ``(2) Reimbursement of funds.--An eligible entity that 
     sells or converts to nonforest use a

[[Page H3511]]

     parcel acquired under the Program shall pay to the Federal 
     Government an amount equal to the greater of the current sale 
     price, or current appraised value, of the parcel.
       ``(3) Loss of eligibility.--An eligible entity that sells 
     or converts a parcel acquired under the Program shall not be 
     eligible for additional grants under the Program.
       ``(f) State Administration and Technical Assistance.--The 
     Secretary may allocate not more than 10 percent of all funds 
     made available to carry out the Program for each fiscal year 
     to State foresters or equivalent officials (including 
     equivalent officials of Indian tribes) for Program 
     administration and technical assistance.
       ``(g) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     carry out this section.''.

     SEC. 8004. ASSISTANCE TO THE FEDERATED STATES OF MICRONESIA, 
                   THE REPUBLIC OF THE MARSHALL ISLANDS, AND THE 
                   REPUBLIC OF PALAU.

       Section 13(d)(1) of the Cooperative Forestry Act of 1978 
     (16 U.S.C. 2109(d)(1)) is amended by striking ``the Trust 
     Territory of the Pacific Islands,'' and inserting ``the 
     Federated States of Micronesia, the Republic of the Marshall 
     Islands, the Republic of Palau,''.

     SEC. 8005. CHANGES TO FOREST RESOURCE COORDINATING COMMITTEE.

       Section 19 of the Cooperative Forestry Assistance Act of 
     1978 (16 U.S.C. 2113) is amended by striking subsection (a) 
     and inserting the following new subsection:
       ``(a) Forest Resource Coordinating Committee.--
       ``(1) Establishment.--The Secretary shall establish a 
     committee, to be known as the `Forest Resource Coordinating 
     Committee' (in this section referred to as the `Coordinating 
     Committee'), to coordinate nonindustrial private forestry 
     activities within the Department of Agriculture and with the 
     private sector.
       ``(2) Composition.--The Coordinating Committee shall be 
     composed of the following:
       ``(A) The Chief of the Forest Service.
       ``(B) The Chief of the Natural Resources Conservation 
     Service.
       ``(C) The Director of the Farm Service Agency.
       ``(D) The Director of the National Institute of Food and 
     Agriculture.
       ``(E) Non-Federal representatives appointed by the 
     Secretary to 3 year terms, although initial appointees shall 
     have staggered terms, including the following persons:
       ``(i) At least three State foresters or equivalent State 
     officials from geographically diverse regions of the United 
     States.
       ``(ii) A representative of a State fish and wildlife 
     agency.
       ``(iii) An owner of nonindustrial private forest land.
       ``(iv) A forest industry representative.
       ``(v) A conservation organization representative.
       ``(vi) A land-grant university or college representative.
       ``(vii) A private forestry consultant.
       ``(viii) A representative from a State Technical Committee 
     established under section 1261 of the Food Security Act of 
     1985 (16 U.S.C. 3861).
       ``(F) Such other persons as determined by the Secretary to 
     be appropriate.
       ``(3) Chairperson.--The Chief of the Forest Service shall 
     serve as chairperson of the Coordinating Committee.
       ``(4) Duties.--The Coordinating Committee shall--
       ``(A) provide direction and coordination of actions within 
     the Department of Agriculture, and coordination with State 
     agencies and the private sector, to effectively address the 
     national priorities specified in section 2(c), with specific 
     focus owners of nonindustrial private forest land;
       ``(B) clarify individual agency responsibilities of each 
     agency represented on the Coordinating Committee concerning 
     the national priorities specified in section 2(c), with 
     specific focus on nonindustrial private forest land;
       ``(C) provide advice on the allocation of funds, including 
     the competitive funds set-aside by sections 13A and 13B; and
       ``(D) assist the Secretary in developing and reviewing the 
     report required by section 2(d).
       ``(5) Meeting.--The Coordinating Committee shall meet 
     annually to discuss progress in addressing the national 
     priorities specified in section 2(c) and issues regarding 
     nonindustrial private forest land.
       ``(6) Compensation.--
       ``(A) Federal members.--Members of the Coordinating 
     Committee who are full-time officers or employees of the 
     United States shall receive no additional pay, allowances, or 
     benefits by reason of their service on the Coordinating 
     Committee.
       ``(B) Non-federal members.--Non-federal members of the 
     Coordinating Committee shall serve without pay, but may be 
     reimbursed for reasonable costs incurred while performing 
     their duties on behalf of the Coordinating Committee.''.

     SEC. 8006. CHANGES TO STATE FOREST STEWARDSHIP COORDINATING 
                   COMMITTEES.

       Section 19(b) of the Cooperative Forestry Assistance Act of 
     1978 (16 U.S.C. 2113(b)) is amended--
       (1) in paragraph (1)(B)(ii)--
       (A) by striking ``and'' at the end of subclause (VII); and
       (B) by adding at the end the following new subclause:

       ``(IX) the State Technical Committee.''.

       (2) in paragraph (2)(C), by striking ``a Forest Stewardship 
     Plan under paragraph (3)'' and inserting ``the State-wide 
     assessment and strategy regarding forest resource conditions 
     under section 2A'';
       (3) by striking paragraphs (3) and (4); and
       (4) by redesignating paragraphs (5) and (6) as paragraphs 
     (3) and (4), respectively.

     SEC. 8007. COMPETITION IN PROGRAMS UNDER COOPERATIVE FORESTRY 
                   ASSISTANCE ACT OF 1978.

       The Cooperative Forestry Assistance Act of 1978 is amended 
     by inserting after section 13 (16 U.S.C. 2109) the following 
     new section:

     ``SEC. 13A. COMPETITIVE ALLOCATION OF FUNDS TO STATE 
                   FORESTERS OR EQUIVALENT STATE OFFICIALS.

       ``(a) Competition.--Beginning not later than 3 years after 
     the date of the enactment of the Food, Conservation, and 
     Energy Act of 2008, the Secretary shall competitively 
     allocate a portion, to be determined by the Secretary, of the 
     funds available under this Act to State foresters or 
     equivalent State officials.
       ``(b) Determination.--In determining the competitive 
     allocation of funds under subsection (a), the Secretary shall 
     consult with the Forest Resource Coordinating Committee 
     established by section 19(a).
       ``(c) Priority.--The Secretary shall give priority for 
     funding to States for which the long-term State-wide forest 
     resource strategies submitted under section 2A(a)(2) will 
     best promote the national priorities specified in section 
     2(c).''.

     SEC. 8008. COMPETITIVE ALLOCATION OF FUNDS FOR COOPERATIVE 
                   FOREST INNOVATION PARTNERSHIP PROJECTS.

       The Cooperative Forestry Assistance Act of 1978 is amended 
     by inserting after section 13A, as added by section 8006, the 
     following new section:

     ``SEC. 13B. COMPETITIVE ALLOCATION OF FUNDS FOR COOPERATIVE 
                   FOREST INNOVATION PARTNERSHIP PROJECTS.

       ``(a) Cooperative Forest Innovation Partnership Projects.--
     The Secretary may competitively allocate not more than 5 
     percent of the funds made available under this Act to support 
     innovative national, regional, or local education, outreach, 
     or technology transfer projects that the Secretary determines 
     would substantially increase the ability of the Department of 
     Agriculture to address the national priorities specified in 
     section 2(c).
       ``(b) Eligibility.--Notwithstanding the eligibility 
     limitations contained in this Act, any State or local 
     government, Indian tribe, land-grant college or university, 
     or private entity shall be eligible to compete for funds to 
     be competitively allocated under subsection (a).
       ``(c) Cost-Share Requirement.--In carrying out subsection 
     (a), the Secretary shall not cover more than 50 percent of 
     the total cost of a project under such subsection. In 
     calculating the total cost of a project and contributions 
     made with regard to the project, the Secretary shall include 
     in-kind contributions.''.

        Subtitle B--Cultural and Heritage Cooperation Authority

     SEC. 8101. PURPOSES.

       The purposes of this subtitle are--
       (1) to authorize the reburial of human remains and cultural 
     items on National Forest System land, including human remains 
     and cultural items repatriated under the Native American 
     Graves Protection and Repatriation Act (25 U.S.C. 3001 et 
     seq.);
       (2) to prevent the unauthorized disclosure of information 
     regarding reburial sites, including the quantity and identity 
     of human remains and cultural items on sites and the location 
     of sites;
       (3) to authorize the Secretary of Agriculture to ensure 
     access to National Forest System land, to the maximum extent 
     practicable, by Indians and Indian tribes for traditional and 
     cultural purposes;
       (4) to authorize the Secretary to provide forest products, 
     without consideration, to Indian tribes for traditional and 
     cultural purposes;
       (5) to authorize the Secretary to protect the 
     confidentiality of certain information, including information 
     that is culturally sensitive to Indian tribes;
       (6) to increase the availability of Forest Service programs 
     and resources to Indian tribes in support of the policy of 
     the United States to promote tribal sovereignty and self-
     determination; and
       (7) to strengthen support for the policy of the United 
     States of protecting and preserving the traditional, 
     cultural, and ceremonial rites and practices of Indian 
     tribes, in accordance with Public Law 95-341 (commonly known 
     as the American Indian Religious Freedom Act; 42 U.S.C. 
     1996).

     SEC. 8102. DEFINITIONS.

       In this subtitle:
       (1) Adjacent site.--The term ``adjacent site'' means a site 
     that borders a boundary line of National Forest System land.
       (2) Cultural items.--The term ``cultural items'' has the 
     meaning given the term in section 2 of the Native American 
     Graves Protection and Repatriation Act (25 U.S.C. 3001), 
     except that the term does not include human remains.
       (3) Human remains.--The term ``human remains'' means the 
     physical remains of the body of a person of Indian ancestry.
       (4) Indian.--The term ``Indian'' means an individual who is 
     a member of an Indian tribe.
       (5) Indian tribe.--The term ``Indian tribe'' means any 
     Indian or Alaska Native tribe, band, nation, pueblo, village, 
     or other community the name of which is included on a list 
     published by the Secretary of the Interior pursuant to 
     section 104 of the Federally Recognized Indian Tribe List Act 
     of 1994 (25 U.S.C. 479a-1).
       (6) Lineal descendant.--The term ``lineal descendant'' 
     means an individual that can trace, directly and without 
     interruption, the ancestry of the individual through the 
     traditional kinship system of an Indian tribe, or through the 
     common law system of descent, to a known Indian, the human 
     remains, funerary objects, or other sacred objects of whom 
     are claimed by the individual.
       (7) National forest system.--The term ``National Forest 
     System'' has the meaning given

[[Page H3512]]

     the term in section 11(a) of the Forest and Rangeland 
     Renewable Resources Planning Act of 1974 (16 U.S.C. 1609(a)).
       (8) Reburial site.--The term ``reburial site'' means a 
     specific physical location at which cultural items or human 
     remains are reburied.
       (9) Traditional and cultural purpose.--The term 
     ``traditional and cultural purpose'', with respect to a 
     definable use, area, or practice, means that the use, area, 
     or practice is identified by an Indian tribe as traditional 
     or cultural because of the long-established significance or 
     ceremonial nature of the use, area, or practice to the Indian 
     tribe.

     SEC. 8103. REBURIAL OF HUMAN REMAINS AND CULTURAL ITEMS.

       (a) Reburial Sites.--In consultation with an affected 
     Indian tribe or lineal descendant, the Secretary may 
     authorize the use of National Forest System land by the 
     Indian tribe or lineal descendant for the reburial of human 
     remains or cultural items in the possession of the Indian 
     tribe or lineal descendant that have been disinterred from 
     National Forest System land or an adjacent site.
       (b) Reburial.--With the consent of the affected Indian 
     tribe or lineal descendent, the Secretary may recover and 
     rebury, at Federal expense or using other available funds, 
     human remains and cultural items described in subsection (a) 
     at the National Forest System land identified under that 
     subsection.
       (c) Authorization of Use.--
       (1) In general.--Subject to paragraph (2), the Secretary 
     may authorize such uses of reburial sites on National Forest 
     System land, or on the National Forest System land 
     immediately surrounding a reburial site, as the Secretary 
     determines to be necessary for management of the National 
     Forest System.
       (2) Avoidance of adverse impacts.--In carrying out 
     paragraph (1), the Secretary shall avoid adverse impacts to 
     cultural items and human remains, to the maximum extent 
     practicable.

     SEC. 8104. TEMPORARY CLOSURE FOR TRADITIONAL AND CULTURAL 
                   PURPOSES.

       (a) Recognition of Historic Use.--To the maximum extent 
     practicable, the Secretary shall ensure access to National 
     Forest System land by Indians for traditional and cultural 
     purposes, in accordance with subsection (b), in recognition 
     of the historic use by Indians of National Forest System 
     land.
       (b) Closing Land From Public Access.--
       (1) Authority to close.--Upon the approval by the Secretary 
     of a request from an Indian tribe, the Secretary may 
     temporarily close from public access specifically identified 
     National Forest System land to protect the privacy of tribal 
     activities for traditional and cultural purposes.
       (2) Limitation.--A closure of National Forest System land 
     under paragraph (1) shall affect the smallest practicable 
     area for the minimum period necessary for activities of the 
     applicable Indian tribe.
       (3) Consistency.--Access by Indian tribes to National 
     Forest System land under this subsection shall be consistent 
     with the purposes of Public Law 95-341 (commonly known as the 
     American Indian Religious Freedom Act; 42 U.S.C. 1996).

     SEC. 8105. FOREST PRODUCTS FOR TRADITIONAL AND CULTURAL 
                   PURPOSES.

       (a) In General.--Notwithstanding section 14 of the National 
     Forest Management Act of 1976 (16 U.S.C. 472a), the Secretary 
     may provide free of charge to Indian tribes any trees, 
     portions of trees, or forest products from National Forest 
     System land for traditional and cultural purposes.
       (b) Prohibition.--Trees, portions of trees, or forest 
     products provided under subsection (a) may not be used for 
     commercial purposes.

     SEC. 8106. PROHIBITION ON DISCLOSURE.

       (a) Nondisclosure of Information.--
       (1) In general.--The Secretary shall not disclose under 
     section 552 of title 5, United States Code (commonly known as 
     the ``Freedom of Information Act''), information relating 
     to--
       (A) subject to subsection (b)(l), human remains or cultural 
     items reburied on National Forest System land under section 
     8103; or
       (B) subject to subsection (b)(2), resources, cultural 
     items, uses, or activities that--
       (i) have a traditional and cultural purpose; and
       (ii) are provided to the Secretary by an Indian or Indian 
     tribe under an express expectation of confidentiality in the 
     context of forest and rangeland research activities carried 
     out under the authority of the Forest Service.
       (2) Limitations on disclosure.--Subject to subsection 
     (b)(2), the Secretary shall not be required to disclose 
     information under section 552 of title 5, United States Code 
     (commonly known as the ``Freedom of Information Act''), 
     concerning the identity, use, or specific location in the 
     National Forest System of--
       (A) a site or resource used for traditional and cultural 
     purposes by an Indian tribe; or
       (B) any cultural items not covered under section 8103.
       (b) Limited Release of Information.--
       (1) Reburial.--The Secretary may disclose information 
     described in subsection (a)(l)(A) if, before the disclosure, 
     the Secretary--
       (A) consults with an affected Indian tribe or lineal 
     descendent;
       (B) determines that disclosure of the information--
       (i) would advance the purposes of this subtitle; and
       (ii) is necessary to protect the human remains or cultural 
     items from harm, theft, or destruction; and
       (C) attempts to mitigate any adverse impacts identified by 
     an Indian tribe or lineal descendant that reasonably could be 
     expected to result from disclosure of the information.
       (2) Other information.--The Secretary, in consultation with 
     appropriate Indian tribes, may disclose information described 
     under paragraph (1)(B) or (2) of subsection (a) if the 
     Secretary determines that disclosure of the information to 
     the public--
       (A) would advance the purposes of this subtitle;
       (B) would not create an unreasonable risk of harm, theft, 
     or destruction of the resource, site, or object, including 
     individual organic or inorganic specimens; and
       (C) would be consistent with other applicable laws.

     SEC. 8107. SEVERABILITY AND SAVINGS PROVISIONS.

       (a) Severability.--If any provision of this subtitle, or 
     the application of any provision of this subtitle to any 
     person or circumstance is held invalid, the application of 
     such provision or circumstance and the remainder of this 
     subtitle shall not be affected thereby.
       (b) Savings.--Nothing in this subtitle--
       (1) diminishes or expands the trust responsibility of the 
     United States to Indian tribes, or any legal obligation or 
     remedy resulting from that responsibility;
       (2) alters, abridges, repeals, or affects any valid 
     agreement between the Forest Service and an Indian tribe;
       (3) alters, abridges, diminishes, repeals, or affects any 
     reserved or other right of an Indian tribe; or
       (4) alters, abridges, diminishes, repeals, or affects any 
     other valid existing right relating to National Forest System 
     land or other public land.

         Subtitle C--Amendments to Other Forestry-Related Laws

     SEC. 8201. RURAL REVITALIZATION TECHNOLOGIES.

       Section 2371(d)(2) of the Food, Agriculture, Conservation, 
     and Trade Act of 1990 (7 U.S.C. 6601(d)(2)) is amended by 
     striking ``2004 through 2008'' and inserting ``2008 through 
     2012''.

     SEC. 8202. OFFICE OF INTERNATIONAL FORESTRY.

       Section 2405(d) of the Global Climate Change Prevention Act 
     of 1990 (7 U.S.C. 6704(d)) is amended by striking ``2007'' 
     and inserting ``2012''.

     SEC. 8203. EMERGENCY FOREST RESTORATION PROGRAM.

       (a) Establishment.--Title IV of the Agricultural Credit Act 
     of 1978 (16 U.S.C. 2201 et seq.) is amended by adding at the 
     end the following new section:

     ``SEC. 407. EMERGENCY FOREST RESTORATION PROGRAM.

       ``(a) Definitions.--In this section:
       ``(1) Emergency measures.--The term `emergency measures' 
     means those measures that--
       ``(A) are necessary to address damage caused by a natural 
     disaster to natural resources on nonindustrial private forest 
     land, and the damage, if not treated--
       ``(i) would impair or endanger the natural resources on the 
     land; and
       ``(ii) would materially affect future use of the land; and
       ``(B) would restore forest health and forest-related 
     resources on the land.
       ``(2) Natural disaster.--The term `natural disaster' 
     includes wildfires, hurricanes or excessive winds, drought, 
     ice storms or blizzards, floods, or other resource-impacting 
     events, as determined by the Secretary.
       ``(3) Nonindustrial private forest land.--The term 
     `nonindustrial private forest land' means rural land, as 
     determined by the Secretary, that--
       ``(A) has existing tree cover (or had tree cover 
     immediately before the natural disaster and is suitable for 
     growing trees); and
       ``(B) is owned by any nonindustrial private individual, 
     group, association, corporation, or other private legal 
     entity, that has definitive decision-making authority over 
     the land.
       ``(4) Secretary.--The term `Secretary' means the Secretary 
     of Agriculture.
       ``(b) Availability of Assistance.--The Secretary may make 
     payments to an owner of nonindustrial private forest land who 
     carries out emergency measures to restore the land after the 
     land is damaged by a natural disaster.
       ``(c) Eligibility.--To be eligible to receive a payment 
     under subsection (b), an owner must demonstrate to the 
     satisfaction of the Secretary that the nonindustrial private 
     forest land on which the emergency measures are carried out 
     had tree cover immediately before the natural disaster.
       ``(d) Cost Share Requirement.--Payments made under 
     subsection (b) shall not exceed 75 percent of the total cost 
     of the emergency measures carried out by an owner of 
     nonindustrial private forest land.
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Secretary such funds as 
     may be necessary to carry out this section. Amounts so 
     appropriated shall remain available until expended.''.
       (b) Regulations.--Not later than one year after the date of 
     the enactment of this Act, the Secretary of Agriculture shall 
     issue regulations to carry out section 407 of the 
     Agricultural Credit Act of 1978, as added by subsection (a).

     SEC. 8204. PREVENTION OF ILLEGAL LOGGING PRACTICES.

       (a) Definitions.--
       (1) Plant.--Subsection (f) of section 2 of the Lacey Act 
     Amendments of 1981 (16 U.S.C. 3371) is amended to read as 
     follows:
       ``(f) Plant.--
       ``(1) In general.--The terms `plant' and `plants' mean any 
     wild member of the plant kingdom, including roots, seeds, 
     parts, or products thereof, and including trees from either 
     natural or planted forest stands.
       ``(2) Exclusions.--The terms `plant' and `plants' exclude--

[[Page H3513]]

       ``(A) common cultivars, except trees, and common food crops 
     (including roots, seeds, parts, or products thereof);
       ``(B) a scientific specimen of plant genetic material 
     (including roots, seeds, germplasm, parts, or products 
     thereof) that is to be used only for laboratory or field 
     research; and
       ``(C) any plant that is to remain planted or to be planted 
     or replanted.
       ``(3) Exceptions to application of exclusions.--The 
     exclusions made by subparagraphs (B) and (C) of paragraph (2) 
     do not apply if the plant is listed--
       ``(A) in an appendix to the Convention on International 
     Trade in Endangered Species of Wild Fauna and Flora (27 UST 
     1087; TIAS 8249);
       ``(B) as an endangered or threatened species under the 
     Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.); or
       ``(C) pursuant to any State law that provides for the 
     conservation of species that are indigenous to the State and 
     are threatened with extinction.''.
       (2) Inclusion of secretary of agriculture.--Section 2(h) of 
     the Lacey Act Amendments of 1981 (16 U.S.C. 3371(h)) is 
     amended by striking ``plants the term means'' and inserting 
     ``plants, the term also means''.
       (3) Taken and taking.--Subsection (j) of section 2 of the 
     Lacey Act Amendments of 1981 (16 U.S.C. 3371) is amended to 
     read as follows:
       ``(j) Taken and Taking.--
       ``(1) Taken.--The term `taken' means captured, killed, or 
     collected and, with respect to a plant, also means harvested, 
     cut, logged, or removed.
       ``(2) Taking.--The term `taking' means the act by which 
     fish, wildlife, or plants are taken.''.
       (b) Prohibited Acts.--
       (1) Offenses other than marking.--Section 3(a) of the Lacey 
     Act Amendments of 1981 (16 U.S.C. 3372(a)) is amended--
       (A) in paragraph (2), by striking subparagraph (B) and 
     inserting the following new subparagraph:
       ``(B) any plant--
       ``(i) taken, possessed, transported, or sold in violation 
     of any law or regulation of any State, or any foreign law, 
     that protects plants or that regulates--

       ``(I) the theft of plants;
       ``(II) the taking of plants from a park, forest reserve, or 
     other officially protected area;
       ``(III) the taking of plants from an officially designated 
     area; or
       ``(IV) the taking of plants without, or contrary to, 
     required authorization;

       ``(ii) taken, possessed, transported, or sold without the 
     payment of appropriate royalties, taxes, or stumpage fees 
     required for the plant by any law or regulation of any State 
     or any foreign law; or
       ``(iii) taken, possessed, transported, or sold in violation 
     of any limitation under any law or regulation of any State, 
     or under any foreign law, governing the export or 
     transshipment of plants; or''; and
       (B) in paragraph (3), by striking subparagraph (B) and 
     inserting the following subparagraph:
       ``(B) to possess any plant--
       ``(i) taken, possessed, transported, or sold in violation 
     of any law or regulation of any State, or any foreign law, 
     that protects plants or that regulates--

       ``(I) the theft of plants;
       ``(II) the taking of plants from a park, forest reserve, or 
     other officially protected area;
       ``(III) the taking of plants from an officially designated 
     area; or
       ``(IV) the taking of plants without, or contrary to, 
     required authorization;

       ``(ii) taken, possessed, transported, or sold without the 
     payment of appropriate royalties, taxes, or stumpage fees 
     required for the plant by any law or regulation of any State 
     or any foreign law; or
       ``(iii) taken, possessed, transported, or sold in violation 
     of any limitation under any law or regulation of any State, 
     or under any foreign law, governing the export or 
     transshipment of plants; or''.
       (2) Plant declarations.--Section 3 of the Lacey Act 
     Amendments of 1981 (16 U.S.C. 3372) is amended by adding at 
     the end the following new subsection:
       ``(f) Plant Declarations.--
       ``(1) Import declaration.--Effective 180 days from the date 
     of enactment of this subsection, and except as provided in 
     paragraph (3), it shall be unlawful for any person to import 
     any plant unless the person files upon importation a 
     declaration that contains--
       ``(A) the scientific name of any plant (including the genus 
     and species of the plant) contained in the importation;
       ``(B) a description of--
       ``(i) the value of the importation; and
       ``(ii) the quantity, including the unit of measure, of the 
     plant; and
       ``(C) the name of the country from which the plant was 
     taken.
       ``(2) Declaration relating to plant products.--Until the 
     date on which the Secretary promulgates a regulation under 
     paragraph (6), a declaration relating to a plant product 
     shall--
       ``(A) in the case in which the species of plant used to 
     produce the plant product that is the subject of the 
     importation varies, and the species used to produce the plant 
     product is unknown, contain the name of each species of plant 
     that may have been used to produce the plant product;
       ``(B) in the case in which the species of plant used to 
     produce the plant product that is the subject of the 
     importation is commonly taken from more than one country, and 
     the country from which the plant was taken and used to 
     produce the plant product is unknown, contain the name of 
     each country from which the plant may have been taken; and
       ``(C) in the case in which a paper or paperboard plant 
     product includes recycled plant product, contain the average 
     percent recycled content without regard for the species or 
     country of origin of the recycled plant product, in addition 
     to the information for the non-recycled plant content 
     otherwise required by this subsection.
       ``(3) Exclusions.--Paragraphs (1) and (2) shall not apply 
     to plants used exclusively as packaging material to support, 
     protect, or carry another item, unless the packaging material 
     itself is the item being imported.
       ``(4) Review.--Not later than two years after the date of 
     enactment of this subsection, the Secretary shall review the 
     implementation of each requirement imposed by paragraphs (1) 
     and (2) and the effect of the exclusion provided by paragraph 
     (3). In conducting the review, the Secretary shall provide 
     public notice and an opportunity for comment.
       ``(5) Report.--Not later than 180 days after the date on 
     which the Secretary completes the review under paragraph (4), 
     the Secretary shall submit to the appropriate committees of 
     Congress a report containing--
       ``(A) an evaluation of--
       ``(i) the effectiveness of each type of information 
     required under paragraphs (1) and (2) in assisting 
     enforcement of this section; and
       ``(ii) the potential to harmonize each requirement imposed 
     by paragraphs (1) and (2) with other applicable import 
     regulations in existence as of the date of the report;
       ``(B) recommendations for such legislation as the Secretary 
     determines to be appropriate to assist in the identification 
     of plants that are imported into the United States in 
     violation of this section; and
       ``(C) an analysis of the effect of subsection (a) and this 
     subsection on--
       ``(i) the cost of legal plant imports; and
       ``(ii) the extent and methodology of illegal logging 
     practices and trafficking.
       ``(6) Promulgation of regulations.--Not later than 180 days 
     after the date on which the Secretary completes the review 
     under paragraph (4), the Secretary may promulgate 
     regulations--
       ``(A) to limit the applicability of any requirement imposed 
     by paragraph (2) to specific plant products;
       ``(B) to make any other necessary modification to any 
     requirement imposed by paragraph (2), as determined by the 
     Secretary based on the review; and
       ``(C) to limit the scope of the exclusion provided by 
     paragraph (3), if the limitations in scope are warranted as a 
     result of the review.''.
       (c) Cross-References to New Requirement.--Section 4 of the 
     Lacey Act Amendments of 1981 (16 U.S.C. 3373) is amended--
       (1) by striking ``subsections (b) and (d)'' each place it 
     appears and inserting ``subsections (b), (d), and (f)'';
       (2) by striking ``section 3(d)'' each place it appears and 
     inserting ``subsection (d) or (f) of section 3''; and
       (3) in subsection (a)(2), by striking ``subsection 3(b)'' 
     and inserting ``subsection (b) or (f) of section 3, except as 
     provided in paragraph (1),''.
       (d) Civil Forfeitures.--Section 5 of the Lacey Act 
     Amendments of 1981 (16 U.S.C. 3374) is amended by adding at 
     the end the following new subsection:
       ``(d) Civil Forfeitures.--Civil forfeitures under this 
     section shall be governed by the provisions of chapter 46 of 
     title 18, United States Code.''.
       (e) Administration.--Section 7 of the Lacey Act Amendments 
     of 1981 (16 U.S.C. 3376) is amended--
       (1) in subsection (a)(1), by striking ``section 4 and 
     section'' and inserting ``sections 3(f), 4, and''; and
       (2) by adding at the end the following new subsection:
       ``(c) Clarification of Exclusions From Definition of 
     Plant.--The Secretary of Agriculture and the Secretary of the 
     Interior, after consultation with the appropriate agencies, 
     shall jointly promulgate regulations to define the terms used 
     in section 2(f)(2)(A) for the purposes of enforcement under 
     this Act.''.
       (f) Technical Correction.--Effective as of November 14, 
     1988, and as if included therein as enacted, section 102(c) 
     of Public Law 100-653 (102 Stat. 3825) is amended--
       (1) by inserting ``of the Lacey Act Amendments of 1981'' 
     after ``Section 4''; and
       (2) by striking ``(other than section 3(b))'' and inserting 
     ``(other than subsection 3(b))''.

     SEC. 8205. HEALTHY FORESTS RESERVE PROGRAM.

       (a) Enrollment.--Section 502 of the Healthy Forests 
     Restoration Act of 2003 (16 U.S.C. 6572(f)(1)) is amended--
       (1) by striking subsections (e) and (f);
       (2) by redesignating subsection (g) as subsection (f); and
       (3) by inserting after subsection (d) the following new 
     subsection:
       ``(e) Methods of Enrollment.--
       ``(1) Authorized methods.--Land may be enrolled in the 
     healthy forests reserve program in accordance with--
       ``(A) a 10-year cost-share agreement;
       ``(B) a 30-year easement; or
       ``(C)(i) a permanent easement; or
       ``(ii) in a State that imposes a maximum duration for 
     easements, an easement for the maximum duration allowed under 
     State law.
       ``(2) Limitation on use of cost-share agreements and 
     easements.--
       ``(A) In general.--Of the total amount of funds expended 
     under the program for a fiscal year to acquire easements and 
     enter into cost-share agreements described in paragraph (1)--
       ``(i) not more than 40 percent shall be used for cost-share 
     agreements described in paragraph (1)(A); and
       ``(ii) not more than 60 percent shall be used for easements 
     described in subparagraphs (B) and (C) of paragraph (1).

[[Page H3514]]

       ``(B) Repooling.--The Secretary may use any funds allocated 
     under clause (i) or (ii) of subparagraph (A) that are not 
     obligated by April 1 of the fiscal year for which the funds 
     are made available to carry out a different method of 
     enrollment during that fiscal year.
       ``(3) Acreage owned by indian tribes.--In the case of 
     acreage owned by an Indian tribe, the Secretary may enroll 
     acreage into the healthy forests reserve program through the 
     use of--
       ``(A) a 30-year contract (the value of which shall be 
     equivalent to the value of a 30-year easement);
       ``(B) a 10-year cost-share agreement; or
       ``(C) any combination of the options described in 
     subparagraphs (A) and (B).''.
       (b) Financial Assistance.--Section 504(a) of the Healthy 
     Forests Restoration Act of 2003 (16 U.S.C. 6574(a)) is 
     amended by striking ``(a) Easements of Not More Than 99 
     Years'' and all that follows through ``502(f)(1)(C)'' and 
     inserting the following:
       ``(a) Permanent Easements.--In the case of land enrolled in 
     the healthy forests reserve program using a permanent 
     easement (or an easement described in section 
     502(f)(1)(C)(ii))''.
       (c) Funding.--Section 508 of the Healthy Forests 
     Restoration Act of 2003 (16 U.S.C. 6578) is amended to read 
     as follows:

     ``SEC. 508. FUNDING.

       ``(a) In General.--Of the funds of the Commodity Credit 
     Corporation, the Secretary of Agriculture shall make 
     available $9,750,000 for each of fiscal years 2009 through 
     2012 to carry out this title.
       ``(b) Duration of Availability.--The funds made available 
     under subsection (a) shall remain available until 
     expended.''.

    Subtitle D--Boundary Adjustments and Land Conveyance Provisions

     SEC. 8301. GREEN MOUNTAIN NATIONAL FOREST BOUNDARY 
                   ADJUSTMENT.

       (a) In General.--The boundary of the Green Mountain 
     National Forest is modified to include the 13 designated 
     expansion units as generally depicted on the forest maps 
     entitled ``Green Mountain Expansion Area Map I'' and ``Green 
     Mountain Expansion Area Map II'' and dated February 20, 2002 
     (copies of which shall be on file and available for public 
     inspection in the Office of the Chief of the Forest Service, 
     Washington, District of Columbia), and more particularly 
     described according to the site specific maps and legal 
     descriptions on file in the office of the Forest Supervisor, 
     Green Mountain National Forest.
       (b) Management.--Federally owned land delineated on the 
     maps acquired for National Forest purposes shall continue to 
     be managed in accordance with the laws (including 
     regulations) applicable to the National Forest System.
       (c) Land and Water Conservation Fund.--For the purposes of 
     section 7 of the Land and Water Conservation Fund Act of 1965 
     (16 U.S.C. 460 l-9), the boundaries of the Green Mountain 
     National Forest, as adjusted by this section, shall be 
     considered to be the boundaries of the national forest as of 
     January 1, 1965.

     SEC. 8302. LAND CONVEYANCES, CHIHUAHUAN DESERT NATURE PARK, 
                   NEW MEXICO, AND GEORGE WASHINGTON NATIONAL 
                   FOREST, VIRGINIA.

       (a) Chihuahuan Desert Nature Park Conveyance.--
       (1) In general.--As soon as practicable after the date of 
     enactment of this Act, subject to valid existing rights and 
     subsection (b), the Secretary of Agriculture shall convey to 
     the Chihuahuan Desert Nature Park, Inc., a nonprofit 
     corporation in the State of New Mexico (in this section 
     referred to as the ``Nature Park''), by quitclaim deed and 
     for no consideration, all right, title, and interest of the 
     United States in and to the land described in paragraph (2)
       (2) Description of land.--
       (A) In general.--The parcel of land referred to in 
     paragraph (1) consists of the approximately 935.62 acres of 
     land in Dona Ana County, New Mexico, which is more 
     particularly described--
       (i) as sections 17, 20, and 21 of T. 21 S., R. 2 E., 
     N.M.P.M.; and
       (ii) in an easement deed dated May 14, 1998, from the 
     Department of Agriculture to the Nature Park.
       (B) Modifications.--The Secretary may modify the 
     description of the land under subparagraph (A) to--
       (i) correct errors in the description; or
       (ii) facilitate management of the land.
       (b) Conditions.--The conveyance of land under subsection 
     (a) shall be subject to--
       (1) the reservation by the United States of all mineral and 
     subsurface rights to the land, including any geothermal 
     resources;
       (2) the condition that the Chihuahuan Desert Nature Park 
     Board pay any costs relating to the conveyance;
       (3) any rights-of-way reserved by the Secretary;
       (4) a covenant or restriction in the deed to the land 
     requiring that--
       (A) the land may be used only for educational or scientific 
     purposes; and
       (B) if the land is no longer used for the purposes 
     described in subparagraph (A), the land may, at the 
     discretion of the Secretary, revert to the United States in 
     accordance with subsection (c); and
       (5) any other terms and conditions that the Secretary 
     determines to be appropriate.
       (c) Reversion.--If the land conveyed under subsection (a) 
     is no longer used for the purposes described in subsection 
     (b)(4)(A), the land may, at the discretion of the Secretary, 
     revert to the United States. If the Secretary chooses to have 
     the land revert to the United States, the Secretary shall--
       (1) determine whether the land is environmentally 
     contaminated, including contamination from hazardous wastes, 
     hazardous substances, pollutants, contaminants, petroleum, or 
     petroleum by-products; and
       (2) if the Secretary determines that the land is 
     environmentally contaminated, the Nature Park, the successor 
     to the Nature Park, or any other person responsible for the 
     contamination shall be required to remediate the 
     contamination.
       (d) Withdrawal.--All federally owned mineral and subsurface 
     rights to the land to be conveyed under subsection (a) are 
     withdrawn from--
       (1) location, entry, and patent under the mining laws; and
       (2) the operation of the mineral leasing laws, including 
     the geothermal leasing laws.
       (e) Water Rights.--Nothing in subsection (a) authorizes the 
     conveyance of water rights to the Nature Park.
       (f) George Washington National Forest Conveyance, 
     Virginia.--
       (1) Conveyance required.--The Secretary of Agriculture 
     shall convey, without consideration, to the Central Advent 
     Christian Church of Alleghany County, Virginia (in this 
     subsection referred to as the ``recipient''), all right, 
     title, and interest of the United States in and to a parcel 
     of real property in the George Washington National Forest, 
     Alleghany County, Virginia, consisting of not more than 8 
     acres, including a cemetery encompassing approximately 6 
     acres designated as an area of special use for the recipient, 
     and depicted on the Forest Service map showing tract G-2032c 
     and dated August 20, 2002, and the Forest Service map showing 
     the area of special use and dated March 14, 2001.
       (2) Condition of conveyance.--The conveyance under this 
     subsection shall be subject to the condition that the 
     recipient accept the real property described in paragraph (1) 
     in its condition at the time of the conveyance, commonly 
     known as conveyance ``as is''.
       (3) Description of property.--The exact acreage and legal 
     description of the real property to be conveyed under this 
     subsection shall be determined by a survey satisfactory to 
     the Secretary. The cost of the survey shall be borne by the 
     recipient.
       (4) Additional terms and conditions.--The Secretary may 
     require such additional terms and conditions in connection 
     with the conveyance under this subsection as the Secretary 
     considers appropriate to protect the interests of the United 
     States.

     SEC. 8303. SALE AND EXCHANGE OF NATIONAL FOREST SYSTEM LAND, 
                   VERMONT.

       (a) Definitions.--In this section:
       (1) Bromley.--The term ``Bromley'' means Bromley Mountain 
     Ski Resort, Inc.
       (2) Map.--The term ``map'' means the map entitled 
     ``Proposed Bromley Land Sale or Exchange'' and dated April 7, 
     2004.
       (3) State.--The term ``State'' means the State of Vermont.
       (b) Sale or Exchange of Green Mountain National Forest 
     Land.--
       (1) In general.--The Secretary of Agriculture may, under 
     any terms and conditions that the Secretary may prescribe, 
     sell or exchange any right, title, and interest of the United 
     States in and to the parcels of National Forest System land 
     described in paragraph (2).
       (2) Description of land.--The parcels of National Forest 
     System land referred to in paragraph (1) are the 5 parcels of 
     land in Bennington County in the State, as generally depicted 
     on the map.
       (3) Map and legal descriptions.--
       (A) In general.--The map shall be on file and available for 
     public inspection in--
       (i) the office of the Chief of the Forest Service; and
       (ii) the office of the Supervisor of the Green Mountain 
     National Forest.
       (B) Modifications.--The Secretary may modify the map and 
     legal descriptions to--
       (i) correct technical errors; or
       (ii) facilitate the conveyance under paragraph (1).
       (4) Consideration.--Consideration for the sale or exchange 
     of land described in paragraph (2)--
       (A) shall be equal to an amount that is not less than the 
     fair market value of the land sold or exchanged; and
       (B) may be in the form of cash, land, or a combination of 
     cash and land.
       (5) Appraisals.--Any appraisal carried out to facilitate 
     the sale or exchange of land under paragraph (1) shall 
     conform with the Uniform Appraisal Standards for Federal Land 
     Acquisitions.
       (6) Methods of sale.--
       (A) Conveyance to bromley.--
       (i) In general.--Before soliciting offers under 
     subparagraph (B), the Secretary shall offer to convey to 
     Bromley the land described in paragraph (2).
       (ii) Contract deadline.--If Bromley accepts the offer under 
     clause (i), the Secretary and Bromley shall have not more 
     than 180 days after the date on which any environmental 
     analyses with respect to the land are completed to enter into 
     a contract for the sale or exchange of the land.
       (B) Public or private sale.--If the Secretary and Bromley 
     do not enter into a contract for the sale or exchange of the 
     land by the date specified in subparagraph (A)(ii), the 
     Secretary may sell or exchange the land at public or private 
     sale (including auction), in accordance with such terms, 
     conditions, and procedures as the Secretary determines to be 
     in the public interest.
       (C) Rejection of offers.--The Secretary may reject any 
     offer received under this paragraph if the Secretary 
     determines that the offer is not adequate or is not in the 
     public interest.
       (D) Brokers.--In any sale or exchange of land under this 
     subsection, the Secretary may--

[[Page H3515]]

       (i) use a real estate broker or other third party; and
       (ii) pay the real estate broker or third party a commission 
     in an amount comparable to the amounts of commission 
     generally paid for real estate transactions in the area.
       (7) Cash equalization.--Notwithstanding section 206(b) of 
     the Federal Land Policy and Management Act of 1976 (43 U.S.C. 
     1716(b)), the Secretary may accept a cash equalization 
     payment in excess of 25 percent of the value of any Federal 
     land exchanged under this section.
       (c) Disposition of Proceeds.--
       (1) In general.--The Secretary shall deposit the net 
     proceeds from a sale or exchange under this section in the 
     fund established under Public Law 90-171 (16 U.S.C. 484a) 
     (commonly known as the ``Sisk Act'').
       (2) Use.--Amounts deposited under paragraph (1) shall be 
     available to the Secretary until expended, without further 
     appropriation, for--
       (A) the location and relocation of the Appalachian National 
     Scenic Trail and the Long National Recreation Trail in the 
     State;
       (B) the acquisition of land and interests in land by the 
     Secretary for National Forest System purposes within the 
     boundary of the Green Mountain National Forest, including 
     land for and adjacent to the Appalachian National Scenic 
     Trail and the Long National Recreation Trail;
       (C) the acquisition of wetland or an interest in wetland 
     within the boundary of the Green Mountain National Forest to 
     offset the loss of wetland from the parcels sold or 
     exchanged; and
       (D) the payment of direct administrative costs incurred in 
     carrying out this section.
       (3) Limitation.--Amounts deposited under paragraph (1) 
     shall not--
       (A) be paid or distributed to the State or counties or 
     towns in the State under any provision of law; or
       (B) be considered to be money received from units of the 
     National Forest System for purposes of--
       (i) the Act of May 23, 1908 (16 U.S.C. 500); or
       (ii) the Act of March 4, 1913 (16 U.S.C. 501).
       (4) Prohibition of transfer or reprogramming.--Amounts 
     deposited under paragraph (1) shall not be subject to 
     transfer or reprogramming for wildfire management or any 
     other emergency purposes.
       (d) Acquisition of Land.--The Secretary may acquire, using 
     funds made available under subsection (c) or otherwise made 
     available for acquisition, land or an interest in land for 
     National Forest System purposes within the boundary of the 
     Green Mountain National Forest.
       (e) Exemption From Certain Laws.--Subtitle I of title 40, 
     United States Code, shall not apply to any sale or exchange 
     of National Forest System land under this section.

                  Subtitle E--Miscellaneous Provisions

     SEC. 8401. QUALIFYING TIMBER CONTRACT OPTIONS.

       (a) Definitions.--In this section:
       (1) Authorized producer price index.--The term ``authorized 
     Producer Price Index'' includes--
       (A) the softwood commodity index (code number WPU 0811);
       (B) the hardwood commodity index (code number WPU 0812);
       (C) the wood chip index (code number PCU 3211133211135); 
     and
       (D) any other subsequent comparable index, as established 
     by the Bureau of Labor Statistics of the Department of Labor 
     and utilized by the Secretary of Agriculture.
       (2) Qualifying contract.--The term ``qualifying contract'' 
     means a contract for the sale of timber on National Forest 
     System land--
       (A) that was awarded during the period beginning on July 1, 
     2004, and ending on December 31, 2006;
       (B) for which there is unharvested volume remaining;
       (C) for which, not later than 90 days after the date of 
     enactment of this Act, the timber purchaser makes a written 
     request to the Secretary for one or more of the options 
     described in subsection (b);
       (D) that is not a salvage sale;
       (E) for which the Secretary determines there is not an 
     urgent need to harvest due to deteriorating timber conditions 
     that developed after the award of the contract; and
       (F) that is not in breach or in default.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of Agriculture, acting through the Chief of the Forest 
     Service.
       (b) Options for Qualifying Contracts.--
       (1) Cancellation or rate redetermination.--Notwithstanding 
     any other provision of law, if the rate at which a qualifying 
     contract would be advertised as of the date of enactment of 
     this Act is at least 50 percent less than the sum of the 
     original bid rates for all of the species of timber that are 
     the subject of the qualifying contract, the Secretary may, at 
     the sole discretion of the Secretary--
       (A) cancel the qualifying contract if the timber 
     purchaser--
       (i) pays 30 percent of the total value of the timber 
     remaining in the qualifying contract based on bid rates;
       (ii) completes each contractual obligation (including the 
     removal of downed timber, the completion of road work, and 
     the completion of erosion control work) of the timber 
     purchaser with respect to each unit on which harvest has 
     begun to a logical stopping point, as determined by the 
     Secretary after consultation with the timber purchaser; and
       (iii) terminates its rights under the qualifying contract; 
     or
       (B) modify the qualifying contract to redetermine the 
     current contract rate of the qualifying contract to equal the 
     sum obtained by adding--
       (i) 25 percent of the bid premium on the qualifying 
     contract; and
       (ii) the rate at which the qualifying contract would be 
     advertised as of the date of enactment of this Act.
       (2) Substitution of index.--
       (A) Substitution.--Notwithstanding any other provision of 
     law, the Secretary may, at the sole discretion of the 
     Secretary, substitute the Producer Price Index specified in 
     the qualifying contract of a timber purchaser if the timber 
     purchaser identifies--
       (i) the products the timber purchaser intends to produce 
     from the timber harvested under the qualifying contract; and
       (ii) a substitute index from an authorized Producer Price 
     Index that more accurately represents the predominant product 
     identified in clause (i) for which there is an index.
       (B) Rate redetermination following substitution of index.--
     If the Secretary substitutes the Producer Price Index of a 
     qualifying contract under subparagraph (A), the Secretary 
     may, at the sole discretion of the Secretary, modify the 
     qualifying contract to provide for--
       (i) an emergency rate redetermination under the terms of 
     the contract; or
       (ii) a rate redetermination under paragraph (1)(B).
       (C) Limitation on market-related contract term addition; 
     periodic payments.--Notwithstanding any other provision of 
     law, if the Secretary substitutes the Producer Price Index of 
     a qualifying contract under subparagraph (A), the Secretary 
     may, at the sole discretion of the Secretary, modify the 
     qualifying contract--
       (i) to adjust the term in accordance with the market-
     related contract term addition provision in the qualifying 
     contract and section 223.52 of title 36, Code of Federal 
     Regulations, as in effect on the date of the adjustment, but 
     only if the drastic reduction criteria in such section are 
     met for 2 or more consecutive calendar year quarters 
     beginning with the calendar quarter in which the Secretary 
     substitutes the Producer Price Index under subparagraph (A); 
     and
       (ii) to adjust the periodic payments required under the 
     contract in accordance with applicable law and policies.
       (3) Contracts using hardwood lumber index.--With respect to 
     a qualifying contract using the hardwood commodity index 
     referred to in subsection (a)(1)(B) for which the Secretary 
     does not substitute the Producer Price Index under paragraph 
     (2), the Secretary may, at the sole discretion of the 
     Secretary--
       (A) extend the contract term for a 1-year period beginning 
     on the current contract termination date; and
       (B) adjust the periodic payments required under the 
     contract in accordance with applicable law and policies.
       (c) Extension of Market-Related Contract Term Addition Time 
     Limit for Certain Contracts.--Notwithstanding any other 
     provision of law, upon the written request of a timber 
     purchaser, the Secretary may, at the sole discretion of the 
     Secretary, modify a timber sale contract (including a 
     qualifying contract) awarded to the purchaser before January 
     1, 2007, to adjust the term of the contract in accordance 
     with the market-related contract term addition provision in 
     the contract and section 223.52 of title 36, Code of Federal 
     Regulations, as in effect on the date of the modification, 
     except that the Secretary may add no more than 4 years to the 
     original contract length.
       (d) Effect of Options.--
       (1) No surrender of claims.--Operation of this section 
     shall not have the effect of surrendering any claim by the 
     United States against any timber purchaser that arose--
       (A) under a qualifying contract before the date on which 
     the Secretary cancels the contract or redetermines the rate 
     under subsection (b)(1), substitutes a Producer Price Index 
     under subsection (b)(2), or modifies the contract under 
     subsection (b)(3); or
       (B) under a timber sale contract, including a qualifying 
     contract, before the date on which the Secretary adjusts the 
     contract term under subsection (c).
       (2) Release of liability.--In the written request for any 
     option provided under subsections (b) and (c), a timber 
     purchaser shall release the United States from all liability, 
     including further consideration or compensation, resulting 
     from--
       (A) the cancellation of a qualifying contract of the 
     purchaser or rate redetermination under subsection (b)(1), 
     the substitution of a Producer Price Index under subsection 
     (b)(2), the modification of the contract under subsection 
     (b)(3) or a determination by the Secretary not to provide the 
     cancellation, redetermination, substitution, or modification; 
     or
       (B) the modification of the term of a timber sale contract 
     (including a qualifying contract) of the purchaser under 
     subsection (c) or a determination by the Secretary not to 
     provide the modification.
       (3) Limitation.--Subject to subsection (b)(1)(A), the 
     cancellation of a qualifying contract by the Secretary under 
     subsection (b)(1) shall release the timber purchaser from 
     further obligation under the canceled contract.

     SEC. 8402. HISPANIC-SERVING INSTITUTION AGRICULTURAL LAND 
                   NATIONAL RESOURCES LEADERSHIP PROGRAM.

       (a) Definition of Hispanic-Serving Institution.--In this 
     section, the term ``Hispanic-serving institution'' has the 
     meaning given that term in section 502(a)(5) of the Higher 
     Education Act of 1965 (20 U.S.C. 1101a(a)(5)).
       (b) Grant Authority.--The Secretary of Agriculture may make 
     grants, on a competitive basis, to Hispanic-serving 
     institutions for the purpose of establishing an undergraduate 
     scholarship program to assist in the recruitment, retention, 
     and training of Hispanics and other under-represented groups 
     in forestry and related fields.
       (c) Use of Grant Funds.--Grants made under this section 
     shall be used to recruit, retain,

[[Page H3516]]

     train, and develop professionals to work in forestry and 
     related fields with Federal agencies, such as the Forest 
     Service, State agencies, and private-sector entities.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary for each of fiscal years 
     2008 through 2012 such sums as may be necessary to carry out 
     this section.

                            TITLE IX--ENERGY

     SEC. 9001. ENERGY.

       (a) In General.--Title IX of the Farm Security and Rural 
     Investment Act of 2002 (7 U.S.C. 8101 et seq.) is amended to 
     read as follows:

                           ``TITLE IX--ENERGY

     ``SEC. 9001. DEFINITIONS.

       ``Except as otherwise provided, in this title:
       ``(1) Administrator.--The term `Administrator' means the 
     Administrator of the Environmental Protection Agency.
       ``(2) Advisory committee.--The term `Advisory Committee' 
     means the Biomass Research and Development Technical Advisory 
     Committee established by section 9008(d)(1).
       ``(3) Advanced biofuel.--
       ``(A) In general.--The term `advanced biofuel' means fuel 
     derived from renewable biomass other than corn kernel starch.
       ``(B) Inclusions.--Subject to subparagraph (A), the term 
     `advanced biofuel' includes--
       ``(i) biofuel derived from cellulose, hemicellulose, or 
     lignin;
       ``(ii) biofuel derived from sugar and starch (other than 
     ethanol derived from corn kernel starch);
       ``(iii) biofuel derived from waste material, including crop 
     residue, other vegetative waste material, animal waste, food 
     waste, and yard waste;
       ``(iv) diesel-equivalent fuel derived from renewable 
     biomass, including vegetable oil and animal fat;
       ``(v) biogas (including landfill gas and sewage waste 
     treatment gas) produced through the conversion of organic 
     matter from renewable biomass;
       ``(vi) butanol or other alcohols produced through the 
     conversion of organic matter from renewable biomass; and
       ``(vii) other fuel derived from cellulosic biomass.
       ``(4) Biobased product.--The term `biobased product' means 
     a product determined by the Secretary to be a commercial or 
     industrial product (other than food or feed) that is--
       ``(A) composed, in whole or in significant part, of 
     biological products, including renewable domestic 
     agricultural materials and forestry materials; or
       ``(B) an intermediate ingredient or feedstock.
       ``(5) Biofuel.--The term `biofuel' means a fuel derived 
     from renewable biomass.
       ``(6) Biomass conversion facility.--The term `biomass 
     conversion facility' means a facility that converts or 
     proposes to convert renewable biomass into--
       ``(A) heat;
       ``(B) power;
       ``(C) biobased products; or
       ``(D) advanced biofuels.
       ``(7) Biorefinery.--The term `biorefinery' means a facility 
     (including equipment and processes) that--
       ``(A) converts renewable biomass into biofuels and biobased 
     products; and
       ``(B) may produce electricity.
       ``(8) Board.--The term `Board' means the Biomass Research 
     and Development Board established by section 9008(c).
       ``(9) Indian tribe.--The term `Indian tribe' has the 
     meaning given the term in section 4 of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 450b).
       ``(10) Institution of higher education.--The term 
     `institution of higher education' has the meaning given the 
     term in section 102(a) of the Higher Education Act of 1965 
     (20 U.S.C. 1002(a)).
       ``(11) Intermediate ingredient or feedstock.--The term 
     `intermediate ingredient or feedstock' means a material or 
     compound made in whole or in significant part from biological 
     products, including renewable agricultural materials 
     (including plant, animal, and marine materials) or forestry 
     materials, that are subsequently used to make a more complex 
     compound or product.
       ``(12) Renewable biomass.--The term `renewable biomass' 
     means--
       ``(A) materials, pre-commercial thinnings, or invasive 
     species from National Forest System land and public lands (as 
     defined in section 103 of the Federal Land Policy and 
     Management Act of 1976 (43 U.S.C. 1702)) that--
       ``(i) are byproducts of preventive treatments that are 
     removed--

       ``(I) to reduce hazardous fuels;
       ``(II) to reduce or contain disease or insect infestation; 
     or
       ``(III) to restore ecosystem health;

       ``(ii) would not otherwise be used for higher-value 
     products; and
       ``(iii) are harvested in accordance with--

       ``(I) applicable law and land management plans; and
       ``(II) the requirements for--

       ``(aa) old-growth maintenance, restoration, and management 
     direction of paragraphs (2), (3), and (4) of subsection (e) 
     of section 102 of the Healthy Forests Restoration Act of 2003 
     (16 U.S.C. 6512); and
       ``(bb) large-tree retention of subsection (f) of that 
     section; or
       ``(B) any organic matter that is available on a renewable 
     or recurring basis from non-Federal land or land belonging to 
     an Indian or Indian tribe that is held in trust by the United 
     States or subject to a restriction against alienation imposed 
     by the United States, including--
       ``(i) renewable plant material, including--

       ``(I) feed grains;
       ``(II) other agricultural commodities;
       ``(III) other plants and trees; and
       ``(IV) algae; and

       ``(ii) waste material, including--

       ``(I) crop residue;
       ``(II) other vegetative waste material (including wood 
     waste and wood residues);
       ``(III) animal waste and byproducts (including fats, oils, 
     greases, and manure); and
       ``(IV) food waste and yard waste.

       ``(13) Renewable energy.--The term `renewable energy' means 
     energy derived from--
       ``(A) a wind, solar, renewable biomass, ocean (including 
     tidal, wave, current, and thermal), geothermal, or 
     hydroelectric source; or
       ``(B) hydrogen derived from renewable biomass or water 
     using an energy source described in subparagraph (A).
       ``(14) Secretary.--The term `Secretary' means the Secretary 
     of Agriculture.

     ``SEC. 9002. BIOBASED MARKETS PROGRAM.

       ``(a) Federal Procurement of Biobased Products.--
       ``(1) Definition of procuring agency.--In this subsection, 
     the term `procuring agency' means--
       ``(A) any Federal agency that is using Federal funds for 
     procurement; or
       ``(B) a person that is a party to a contract with any 
     Federal agency, with respect to work performed under such a 
     contract.
       ``(2) Procurement preference.--
       ``(A) In general.--
       ``(i) Procuring agency duties.--Except as provided in 
     clause (ii) and subparagraph (B), after the date specified in 
     applicable guidelines prepared pursuant to paragraph (3), 
     each procuring agency shall--

       ``(I) establish a procurement program, develop procurement 
     specifications, and procure biobased products identified 
     under the guidelines described in paragraph (3) in accordance 
     with this section; and
       ``(II) with respect to items described in the guidelines, 
     give a procurement preference to those items that--

       ``(aa) are composed of the highest percentage of biobased 
     products practicable; or
       ``(bb) comply with the regulations issued under section 103 
     of Public Law 100-556 (42 U.S.C. 6914b-1).
       ``(ii) Exception.--The requirements of clause (i)(I) to 
     establish a procurement program and develop procurement 
     specifications shall not apply to a person described in 
     paragraph (1)(B).
       ``(B) Flexibility.--Notwithstanding subparagraph (A), a 
     procuring agency may decide not to procure items described in 
     that subparagraph if the procuring agency determines that the 
     items--
       ``(i) are not reasonably available within a reasonable 
     period of time;
       ``(ii) fail to meet--

       ``(I) the performance standards set forth in the applicable 
     specifications; or
       ``(II) the reasonable performance standards of the 
     procuring agencies; or

       ``(iii) are available only at an unreasonable price.
       ``(C) Minimum requirements.--Each procurement program 
     required under this subsection shall, at a minimum--
       ``(i) be consistent with applicable provisions of Federal 
     procurement law;
       ``(ii) ensure that items composed of biobased products will 
     be purchased to the maximum extent practicable;
       ``(iii) include a component to promote the procurement 
     program;
       ``(iv) provide for an annual review and monitoring of the 
     effectiveness of the procurement program; and
       ``(v) adopt 1 of the 2 polices described in subparagraph 
     (D) or (E), or a policy substantially equivalent to either of 
     those policies.
       ``(D) Case-by-case policy.--
       ``(i) In general.--Subject to subparagraph (B) and except 
     as provided in clause (ii), a procuring agency adopting the 
     case-by-case policy shall award a contract to the vendor 
     offering an item composed of the highest percentage of 
     biobased products practicable.
       ``(ii) Exception.--Subject to subparagraph (B), an agency 
     adopting the policy described in clause (i) may make an award 
     to a vendor offering items with less than the maximum 
     biobased products content.
       ``(E) Minimum content standards.--Subject to subparagraph 
     (B), a procuring agency adopting the minimum content 
     standards policy shall establish minimum biobased products 
     content specifications for awarding contracts in a manner 
     that ensures that the biobased products content required is 
     consistent with this subsection.
       ``(F) Certification.--After the date specified in any 
     applicable guidelines prepared pursuant to paragraph (3), 
     contracting offices shall require that vendors certify that 
     the biobased products to be used in the performance of the 
     contract will comply with the applicable specifications or 
     other contractual requirements.
       ``(3) Guidelines.--
       ``(A) In general.--The Secretary, after consultation with 
     the Administrator, the Administrator of General Services, and 
     the Secretary of Commerce (acting through the Director of the 
     National Institute of Standards and Technology), shall 
     prepare, and from time to time revise, guidelines for the use 
     of procuring agencies in complying with the requirements of 
     this subsection.
       ``(B) Requirements.--The guidelines under this paragraph 
     shall--
       ``(i) designate those items (including finished products) 
     that are or can be produced with biobased products (including 
     biobased products for which there is only a single product or 
     manufacturer in the category) that will be subject to the 
     preference described in paragraph (2);
       ``(ii) designate those intermediate ingredients and 
     feedstocks that are or can be used to

[[Page H3517]]

     produce items that will be subject to the preference 
     described in paragraph (2);
       ``(iii) automatically designate items composed of 
     intermediate ingredients and feedstocks designated under 
     clause (ii), if the content of the designated intermediate 
     ingredients and feedstocks exceeds 50 percent of the item 
     (unless the Secretary determines a different composition 
     percentage is appropriate);
       ``(iv) set forth recommended practices with respect to the 
     procurement of biobased products and items containing such 
     materials;
       ``(v) provide information as to the availability, relative 
     price, performance, and environmental and public health 
     benefits of such materials and items; and
       ``(vi) take effect on the date established in the 
     guidelines, which may not exceed 1 year after publication.
       ``(C) Information provided.--Information provided pursuant 
     to subparagraph (B)(v) with respect to a material or item 
     shall be considered to be provided for another item made with 
     the same material or item.
       ``(D) Prohibition.--Guidelines issued under this paragraph 
     may not require a manufacturer or vendor of biobased 
     products, as a condition of the purchase of biobased products 
     from the manufacturer or vendor, to provide to procuring 
     agencies more data than would be required to be provided by 
     other manufacturers or vendors offering products for sale to 
     a procuring agency, other than data confirming the biobased 
     content of a product.
       ``(E) Qualifying purchases.--The guidelines shall apply 
     with respect to any purchase or acquisition of a procurement 
     item for which--
       ``(i) the purchase price of the item exceeds $10,000; or
       ``(ii) the quantity of the items or of functionally-
     equivalent items purchased or acquired during the preceding 
     fiscal year was at least $10,000.
       ``(4) Administration.--
       ``(A) Office of federal procurement policy.--The Office of 
     Federal Procurement Policy, in cooperation with the 
     Secretary, shall--
       ``(i) coordinate the implementation of this subsection with 
     other policies for Federal procurement;
       ``(ii) annually collect the information required to be 
     reported under subparagraph (B) and make the information 
     publicly available;
       ``(iii) take a leading role in informing Federal agencies 
     concerning, and promoting the adoption of and compliance 
     with, procurement requirements for biobased products by 
     Federal agencies; and
       ``(iv) not less than once every 2 years, submit to Congress 
     a report that--

       ``(I) describes the progress made in carrying out this 
     subsection; and
       ``(II) contains a summary of the information reported 
     pursuant to subparagraph (B).

       ``(B) Other agencies.--To assist the Office of Federal 
     Procurement Policy in carrying out subparagraph (A)--
       ``(i) each procuring agency shall submit each year to the 
     Office of Federal Procurement Policy, to the maximum extent 
     practicable, information concerning--

       ``(I) actions taken to implement paragraph (2);
       ``(II) the results of the annual review and monitoring 
     program established under paragraph (2)(C)(iv);
       ``(III) the number and dollar value of contracts entered 
     into during the year that include the direct procurement of 
     biobased products;
       ``(IV) the number of service and construction (including 
     renovations) contracts entered into during the year that 
     include language on the use of biobased products; and
       ``(V) the types and dollar value of biobased products 
     actually used by contractors in carrying out service and 
     construction (including renovations) contracts during the 
     previous year; and

       ``(ii) the General Services Administration and the Defense 
     Logistics Agency shall submit each year to the Office of 
     Federal Procurement Policy information concerning, to the 
     maximum extent practicable, the types and dollar value of 
     biobased products purchased by procuring agencies.
       ``(C) Procurement subject to other law.--Any procurement by 
     any Federal agency that is subject to regulations of the 
     Administrator under section 6002 of the Solid Waste Disposal 
     Act (42 U.S.C. 6962) shall not be subject to the requirements 
     of this section to the extent that the requirements are 
     inconsistent with the regulations.
       ``(b) Labeling.--
       ``(1) In general.--The Secretary, in consultation with the 
     Administrator, shall establish a voluntary program under 
     which the Secretary authorizes producers of biobased products 
     to use the label `USDA Certified Biobased Product'.
       ``(2) Eligibility criteria.--
       ``(A) Criteria.--
       ``(i) In general.--Not later than 90 days after the date of 
     the enactment of the Food, Conservation, and Energy Act of 
     2008 and except as provided in clause (ii), the Secretary, in 
     consultation with the Administrator and representatives from 
     small and large businesses, academia, other Federal agencies, 
     and such other persons as the Secretary considers 
     appropriate, shall issue criteria (as of the date of 
     enactment of that Act) for determining which products may 
     qualify to receive the label under paragraph (1).
       ``(ii) Exception.--Clause (i) shall not apply to final 
     criteria that have been issued (as of the date of enactment 
     of that Act) by the Secretary.
       ``(B) Requirements.--Criteria issued under subparagraph (A) 
     shall--
       ``(i) encourage the purchase of products with the maximum 
     biobased content;
       ``(ii) provide that the Secretary may designate as biobased 
     for the purposes of the voluntary program established under 
     this subsection finished products that contain significant 
     portions of biobased materials or components; and
       ``(iii) to the maximum extent practicable, be consistent 
     with the guidelines issued under subsection (a)(3).
       ``(3) Use of label.--The Secretary shall ensure that the 
     label referred to in paragraph (1) is used only on products 
     that meet the criteria issued pursuant to paragraph (2).
       ``(c) Recognition.--The Secretary shall--
       ``(1) establish a program to recognize Federal agencies and 
     private entities that use a substantial amount of biobased 
     products; and
       ``(2) encourage Federal agencies to establish incentives 
     programs to recognize Federal employees or contractors that 
     make exceptional contributions to the expanded use of 
     biobased products.
       ``(d) Limitation.--Nothing in this section shall apply to 
     the procurement of motor vehicle fuels, heating oil, or 
     electricity.
       ``(e) Inclusion.--Effective beginning on the date that is 
     90 days after the date of enactment of the Food, 
     Conservation, and Energy Act of 2008, the Architect of the 
     Capitol, the Sergeant at Arms of the Senate, and the Chief 
     Administrative Officer of the House of Representatives shall 
     consider the biobased product designations made under this 
     section in making procurement decisions for the Capitol 
     Complex.
       ``(f) National Testing Center Registry.--The Secretary 
     shall establish a national registry of testing centers for 
     biobased products that will serve biobased product 
     manufacturers.
       ``(g) Reports.--
       ``(1) In general.--Not later than 180 days after the date 
     of enactment of the Food, Conservation, and Energy Act of 
     2008 and each year thereafter, the Secretary shall submit to 
     Congress a report on the implementation of this section.
       ``(2) Contents.--The report shall include--
       ``(A) a comprehensive management plan that establishes 
     tasks, milestones, and timelines, organizational roles and 
     responsibilities, and funding allocations for fully 
     implementing this section; and
       ``(B) information on the status of implementation of--
       ``(i) item designations (including designation of 
     intermediate ingredients and feedstocks); and
       ``(ii) the voluntary labeling program established under 
     subsection (b).
       ``(h) Funding.--
       ``(1) Mandatory funding.--Of the funds of the Commodity 
     Credit Corporation, the Secretary shall use to provide 
     mandatory funding for biobased products testing and labeling 
     as required to carry out this section--
       ``(A) $1,000,000 for fiscal year 2008; and
       ``(B) $2,000,000 for each of fiscal years 2009 through 
     2012.
       ``(2) Discretionary funding.--In addition to any other 
     funds made available to carry out this section, there is 
     authorized to be appropriated to carry out this section 
     $2,000,000 for each of fiscal years 2009 through 2012.

     ``SEC. 9003. BIOREFINERY ASSISTANCE.

       ``(a) Purpose.--The purpose of this section is to assist in 
     the development of new and emerging technologies for the 
     development of advanced biofuels, so as to--
       ``(1) increase the energy independence of the United 
     States;
       ``(2) promote resource conservation, public health, and the 
     environment;
       ``(3) diversify markets for agricultural and forestry 
     products and agriculture waste material; and
       ``(4) create jobs and enhance the economic development of 
     the rural economy.
       ``(b) Definitions.--In this section:
       ``(1) Eligible entity.--The term `eligible entity' means an 
     individual, entity, Indian tribe, or unit of State or local 
     government, including a corporation, farm cooperative, farmer 
     cooperative organization, association of agricultural 
     producers, National Laboratory, institution of higher 
     education, rural electric cooperative, public power entity, 
     or consortium of any of those entities.
       ``(2) Eligible technology.--The term `eligible technology' 
     means, as determined by the Secretary--
       ``(A) a technology that is being adopted in a viable 
     commercial-scale operation of a biorefinery that produces an 
     advanced biofuel; and
       ``(B) a technology not described in subparagraph (A) that 
     has been demonstrated to have technical and economic 
     potential for commercial application in a biorefinery that 
     produces an advanced biofuel.
       ``(c) Assistance.--The Secretary shall make available to 
     eligible entities--
       ``(1) grants to assist in paying the costs of the 
     development and construction of demonstration-scale 
     biorefineries to demonstrate the commercial viability of 1 or 
     more processes for converting renewable biomass to advanced 
     biofuels; and
       ``(2) guarantees for loans made to fund the development, 
     construction, and retrofitting of commercial-scale 
     biorefineries using eligible technology.
       ``(d) Grants.--
       ``(1) Competitive basis.--The Secretary shall award grants 
     under subsection (c)(1) on a competitive basis.
       ``(2) Selection criteria.--
       ``(A) In general.--In approving grant applications, the 
     Secretary shall establish a priority scoring system that 
     assigns priority scores to each application and only approve 
     applications that exceed a specified minimum, as determined 
     by the Secretary.
       ``(B) Feasibility.--In approving a grant application, the 
     Secretary shall determine the technical and economic 
     feasibility of the project based on a feasibility study of 
     the project described in the application conducted by an 
     independent third party.
       ``(C) Scoring system.--In determining the priority scoring 
     system, the Secretary shall consider--

[[Page H3518]]

       ``(i) the potential market for the advanced biofuel and the 
     byproducts produced;
       ``(ii) the level of financial participation by the 
     applicant, including support from non-Federal and private 
     sources;
       ``(iii) whether the applicant is proposing to use a 
     feedstock not previously used in the production of advanced 
     biofuels;
       ``(iv) whether the applicant is proposing to work with 
     producer associations or cooperatives;
       ``(v) whether the applicant has established that the 
     adoption of the process proposed in the application will have 
     a positive impact on resource conservation, public health, 
     and the environment;
       ``(vi) the potential for rural economic development;
       ``(vii) whether the area in which the applicant proposes to 
     locate the biorefinery has other similar facilities;
       ``(viii) whether the project can be replicated; and
       ``(ix) scalability for commercial use.
       ``(3) Cost sharing.--
       ``(A) Limits.--The amount of a grant awarded for 
     development and construction of a biorefinery under 
     subsection (c)(1) shall not exceed an amount equal to 30 
     percent of the cost of the project.
       ``(B) Form of grantee share.--
       ``(i) In general.--The grantee share of the cost of a 
     project may be made in the form of cash or material.
       ``(ii) Limitation.--The amount of the grantee share that is 
     made in the form of material shall not exceed 15 percent of 
     the amount of the grantee share determined under subparagraph 
     (A).
       ``(e) Loan Guarantees.--
       ``(1) Selection criteria.--
       ``(A) In general.--In approving loan guarantee 
     applications, the Secretary shall establish a priority 
     scoring system that assigns priority scores to each 
     application and only approve applications that exceed a 
     specified minimum, as determined by the Secretary.
       ``(B) Feasibility.--In approving a loan guarantee 
     application, the Secretary shall determine the technical and 
     economic feasibility of the project based on a feasibility 
     study of the project described in the application conducted 
     by an independent third party.
       ``(C) Scoring system.--In determining the priority scoring 
     system for loan guarantees under subsection (c)(2), the 
     Secretary shall consider--
       ``(i) whether the applicant has established a market for 
     the advanced biofuel and the byproducts produced;
       ``(ii) whether the area in which the applicant proposes to 
     place the biorefinery has other similar facilities;
       ``(iii) whether the applicant is proposing to use a 
     feedstock not previously used in the production of advanced 
     biofuels;
       ``(iv) whether the applicant is proposing to work with 
     producer associations or cooperatives;
       ``(v) the level of financial participation by the 
     applicant, including support from non-Federal and private 
     sources;
       ``(vi) whether the applicant has established that the 
     adoption of the process proposed in the application will have 
     a positive impact on resource conservation, public health, 
     and the environment;
       ``(vii) whether the applicant can establish that if 
     adopted, the biofuels production technology proposed in the 
     application will not have any significant negative impacts on 
     existing manufacturing plants or other facilities that use 
     similar feedstocks;
       ``(viii) the potential for rural economic development;
       ``(ix) the level of local ownership proposed in the 
     application; and
       ``(x) whether the project can be replicated.
       ``(2) Limitations.--
       ``(A) Maximum amount of loan guaranteed.--The principal 
     amount of a loan guaranteed under subsection (c)(2) may not 
     exceed $250,000,000.
       ``(B) Maximum percentage of loan guaranteed.--
       ``(i) In general.--Except as otherwise provided in this 
     subparagraph, a loan guaranteed under subsection (c)(2) shall 
     be in an amount not to exceed 80 percent of the project 
     costs, as determined by the Secretary.
       ``(ii) Other direct federal funding.--The amount of a loan 
     guaranteed for a project under subsection (c)(2) shall be 
     reduced by the amount of other direct Federal funding that 
     the eligible entity receives for the same project.
       ``(iii) Authority to guarantee the loan.--The Secretary may 
     guarantee up to 90 percent of the principal and interest due 
     on a loan guaranteed under subsection (c)(2).
       ``(C) Loan guarantee fund distribution.--Of the funds made 
     available for loan guarantees for a fiscal year under 
     subsection (h), 50 percent of the funds shall be reserved for 
     obligation during the second half of the fiscal year.
       ``(f) Consultation.--In carrying out this section, the 
     Secretary shall consult with the Secretary of Energy.
       ``(g) Condition on Provision of Assistance.--
       ``(1) In general.--As a condition of receiving a grant or 
     loan guarantee under this section, an eligible entity shall 
     ensure that all laborers and mechanics employed by 
     contractors or subcontractors in the performance of 
     construction work financed, in whole or in part, with the 
     grant or loan guarantee, as the case may be, shall be paid 
     wages at rates not less than those prevailing on similar 
     construction in the locality, as determined by the Secretary 
     of Labor in accordance with sections 3141 through 3144, 3146, 
     and 3147 of title 40, United States Code.
       ``(2) Authority and functions.--The Secretary of Labor 
     shall have, with respect to the labor standards described in 
     paragraph (1), the authority and functions set forth in 
     Reorganization Plan Numbered 14 of 1950 (5 U.S.C. App) and 
     section 3145 of title 40, United States Code.
       ``(h) Funding.--
       ``(1) Mandatory funding.--Of the funds of the Commodity 
     Credit Corporation, the Secretary shall use for the cost of 
     loan guarantees under this section, to remain available until 
     expended--
       ``(A) $75,000,000 for fiscal year 2009; and
       ``(B) $245,000,000 for fiscal year 2010.
       ``(2) Discretionary funding.--In addition to any other 
     funds made available to carry out this section, there is 
     authorized to be appropriated to carry out this section 
     $150,000,000 for each of fiscal years 2009 through 2012.

     ``SEC. 9004. REPOWERING ASSISTANCE.

       ``(a) In General.--The Secretary shall carry out a program 
     to encourage biorefineries in existence on the date of 
     enactment of the Food, Conservation, and Energy Act of 2008 
     to replace fossil fuels used to produce heat or power to 
     operate the biorefineries by making payments for--
       ``(1) the installation of new systems that use renewable 
     biomass; or
       ``(2) the new production of energy from renewable biomass.
       ``(b) Payments.--
       ``(1) In general.--The Secretary may make payments under 
     this section to any biorefinery that meets the requirements 
     of this section for a period determined by the Secretary.
       ``(2) Amount.--The Secretary shall determine the amount of 
     payments to be made under this section to a biorefinery after 
     considering--
       ``(A) the quantity of fossil fuels a renewable biomass 
     system is replacing;
       ``(B) the percentage reduction in fossil fuel used by the 
     biorefinery that will result from the installation of the 
     renewable biomass system; and
       ``(C) the cost and cost effectiveness of the renewable 
     biomass system.
       ``(c) Eligibility.--To be eligible to receive a payment 
     under this section, a biorefinery shall demonstrate to the 
     Secretary that the renewable biomass system of the 
     biorefinery is feasible based on an independent feasibility 
     study that takes into account the economic, technical and 
     environmental aspects of the system.
       ``(d) Funding.--
       ``(1) Mandatory funding.--Of the funds of the Commodity 
     Credit Corporation, the Secretary shall use to make payments 
     under this section $35,000,000 for fiscal year 2009, to 
     remain available until expended.
       ``(2) Discretionary funding.--In addition to any other 
     funds made available to carry out this section, there is 
     authorized to be appropriated to carry out this section 
     $15,000,000 for each of fiscal years 2009 through 2012.

     ``SEC. 9005. BIOENERGY PROGRAM FOR ADVANCED BIOFUELS.

       ``(a) Definition of Eligible Producer.--In this section, 
     the term `eligible producer' means a producer of advanced 
     biofuels.
       ``(b) Payments.--The Secretary shall make payments to 
     eligible producers to support and ensure an expanding 
     production of advanced biofuels.
       ``(c) Contracts.--To receive a payment, an eligible 
     producer shall--
       ``(1) enter into a contract with the Secretary for 
     production of advanced biofuels; and
       ``(2) submit to the Secretary such records as the Secretary 
     may require as evidence of the production of advanced 
     biofuels.
       ``(d) Basis for Payments.--The Secretary shall make 
     payments under this section to eligible producers based on--
       ``(1) the quantity and duration of production by the 
     eligible producer of an advanced biofuel;
       ``(2) the net nonrenewable energy content of the advanced 
     biofuel, if sufficient data is available, as determined by 
     the Secretary; and
       ``(3) other appropriate factors, as determined by the 
     Secretary.
       ``(e) Equitable Distribution.--The Secretary may limit the 
     amount of payments that may be received by a single eligible 
     producer under this section in order to distribute the total 
     amount of funding available in an equitable manner.
       ``(f) Other Requirements.--To receive a payment under this 
     section, an eligible producer shall meet any other 
     requirements of Federal and State law (including regulations) 
     applicable to the production of advanced biofuels.
       ``(g) Funding.--
       ``(1) Mandatory funding.--Of the funds of the Commodity 
     Credit Corporation, the Secretary shall use to carry out this 
     section, to remain available until expended--
       ``(A) $55,000,000 for fiscal year 2009;
       ``(B) $55,000,000 for fiscal year 2010;
       ``(C) $85,000,000 for fiscal year 2011; and
       ``(D) $105,000,000 for fiscal year 2012.
       ``(2) Discretionary funding.--In addition to any other 
     funds made available to carry out this section, there is 
     authorized to be appropriated to carry out this section 
     $25,000,000 for each of fiscal years 2009 through 2012.
       ``(3) Limitation.--Of the funds provided for each fiscal 
     year, not more than 5 percent of the funds shall be made 
     available to eligible producers for production at facilities 
     with a total refining capacity exceeding 150,000,000 gallons 
     per year.

     ``SEC. 9006. BIODIESEL FUEL EDUCATION PROGRAM.

       ``(a) Establishment.--The Secretary shall, under such terms 
     and conditions as the Secretary determines to be appropriate, 
     make competitive grants to eligible entities to educate 
     governmental and private entities that operate vehicle 
     fleets, other interested entities (as determined by the 
     Secretary), and the public about the benefits of biodiesel 
     fuel use.
       ``(b) Eligible Entities.--To receive a grant under 
     subsection (b), an entity shall--
       ``(1) be a nonprofit organization or institution of higher 
     education;
       ``(2) have demonstrated knowledge of biodiesel fuel 
     production, use, or distribution; and

[[Page H3519]]

       ``(3) have demonstrated the ability to conduct educational 
     and technical support programs.
       ``(c) Consultation.--In carrying out this section, the 
     Secretary shall consult with the Secretary of Energy.
       ``(d) Funding.--Of the funds of the Commodity Credit 
     Corporation, the Secretary shall use to carry out this 
     section $1,000,000 for each of fiscal years 2008 through 
     2012.

     ``SEC. 9007. RURAL ENERGY FOR AMERICA PROGRAM.

       ``(a) Establishment.--The Secretary, in consultation with 
     the Secretary of Energy, shall establish a Rural Energy for 
     America Program to promote energy efficiency and renewable 
     energy development for agricultural producers and rural small 
     businesses through--
       ``(1) grants for energy audits and renewable energy 
     development assistance; and
       ``(2) financial assistance for energy efficiency 
     improvements and renewable energy systems.
       ``(b) Energy Audits and Renewable Energy Development 
     Assistance.--
       ``(1) In general.--The Secretary shall make competitive 
     grants to eligible entities to provide assistance to 
     agricultural producers and rural small businesses--
       ``(A) to become more energy efficient; and
       ``(B) to use renewable energy technologies and resources.
       ``(2) Eligible entities.--An eligible entity under this 
     subsection is--
       ``(A) a unit of State, tribal, or local government;
       ``(B) a land-grant college or university or other 
     institution of higher education;
       ``(C) a rural electric cooperative or public power entity; 
     and
       ``(D) any other similar entity, as determined by the 
     Secretary.
       ``(3) Selection criteria.--In reviewing applications of 
     eligible entities to receive grants under paragraph (1), the 
     Secretary shall consider--
       ``(A) the ability and expertise of the eligible entity in 
     providing professional energy audits and renewable energy 
     assessments;
       ``(B) the geographic scope of the program proposed by the 
     eligible entity in relation to the identified need;
       ``(C) the number of agricultural producers and rural small 
     businesses to be assisted by the program;
       ``(D) the potential of the proposed program to produce 
     energy savings and environmental benefits;
       ``(E) the plan of the eligible entity for performing 
     outreach and providing information and assistance to 
     agricultural producers and rural small businesses on the 
     benefits of energy efficiency and renewable energy 
     development; and
       ``(F) the ability of the eligible entity to leverage other 
     sources of funding.
       ``(4) Use of grant funds.--A recipient of a grant under 
     paragraph (1) shall use the grant funds to assist 
     agricultural producers and rural small businesses by--
       ``(A) conducting and promoting energy audits; and
       ``(B) providing recommendations and information on how--
       ``(i) to improve the energy efficiency of the operations of 
     the agricultural producers and rural small businesses; and
       ``(ii) to use renewable energy technologies and resources 
     in the operations.
       ``(5) Limitation.--Grant recipients may not use more than 5 
     percent of a grant for administrative expenses.
       ``(6) Cost sharing.--A recipient of a grant under paragraph 
     (1) that conducts an energy audit for an agricultural 
     producer or rural small business under paragraph (4) shall 
     require that, as a condition of the energy audit, the 
     agricultural producer or rural small business pay at least 25 
     percent of the cost of the energy audit, which shall be 
     retained by the eligible entity for the cost of the energy 
     audit.
       ``(c) Financial Assistance for Energy Efficiency 
     Improvements and Renewable Energy Systems.--
       ``(1) In general.--In addition to any similar authority, 
     the Secretary shall provide loan guarantees and grants to 
     agricultural producers and rural small businesses--
       ``(A) to purchase renewable energy systems, including 
     systems that may be used to produce and sell electricity; and
       ``(B) to make energy efficiency improvements.
       ``(2) Award considerations.--In determining the amount of a 
     loan guarantee or grant provided under this section, the 
     Secretary shall take into consideration, as applicable--
       ``(A) the type of renewable energy system to be purchased;
       ``(B) the estimated quantity of energy to be generated by 
     the renewable energy system;
       ``(C) the expected environmental benefits of the renewable 
     energy system;
       ``(D) the quantity of energy savings expected to be derived 
     from the activity, as demonstrated by an energy audit;
       ``(E) the estimated period of time for the energy savings 
     generated by the activity to equal the cost of the activity;
       ``(F) the expected energy efficiency of the renewable 
     energy system; and
       ``(G) other appropriate factors.
       ``(3) Feasibility studies.--
       ``(A) In general.--The Secretary may provide assistance in 
     the form of grants to an agricultural producer or rural small 
     business to conduct a feasibility study for a project for 
     which assistance may be provided under this subsection.
       ``(B) Limitation.--The Secretary shall use not more than 10 
     percent of the funds made available to carry out this 
     subsection to provide assistance described in subparagraph 
     (A).
       ``(C) Avoidance of duplicative assistance.--An entity shall 
     be ineligible to receive assistance to carry out a 
     feasibility study for a project under this paragraph if the 
     entity has received other Federal or State assistance for a 
     feasibility study for the project.
       ``(4) Limits.--
       ``(A) Grants.--The amount of a grant under this subsection 
     shall not exceed 25 percent of the cost of the activity 
     carried out using funds from the grant.
       ``(B) Maximum amount of loan guarantees.--The amount of a 
     loan guaranteed under this subsection shall not exceed 
     $25,000,000.
       ``(C) Maximum amount of combined grant and loan 
     guarantee.--The combined amount of a grant and loan 
     guaranteed under this subsection shall not exceed 75 percent 
     of the cost of the activity funded under this subsection.
       ``(d) Outreach.--The Secretary shall ensure, to the maximum 
     extent practicable, that adequate outreach relating to this 
     section is being conducted at the State and local levels.
       ``(e) Lower-Cost Activities.--
       ``(1) Limitation on use of funds.--Except as provided in 
     paragraph (2), the Secretary shall use not less than 20 
     percent of the funds made available under subsection (g) to 
     provide grants of $20,000 or less.
       ``(2) Exception.--Effective beginning on June 30 of each 
     fiscal year, paragraph (1) shall not apply to funds made 
     available under subsection (g) for the fiscal year.
       ``(f) Report.--Not later than 4 years after the date of 
     enactment of the Food, Conservation, and Energy Act of 2008, 
     the Secretary shall submit to Congress a report on the 
     implementation of this section, including the outcomes 
     achieved by projects funded under this section.
       ``(g) Funding.--
       ``(1) Mandatory funding.--Of the funds of the Commodity 
     Credit Corporation, the Secretary shall use to carry out this 
     section, to remain available until expended--
       ``(A) $55,000,000 for fiscal year 2009;
       ``(B) $60,000,000 for fiscal year 2010;
       ``(C) $70,000,000 for fiscal year 2011; and
       ``(D) $70,000,000 for fiscal year 2012.
       ``(2) Audit and technical assistance funding.--
       ``(A) In general.--Subject to subparagraph (B), of the 
     funds made available for each fiscal year under paragraph 
     (1), 4 percent shall be available to carry out subsection 
     (b).
       ``(B) Other use.--Funds not obligated under subparagraph 
     (A) by April 1 of each fiscal year to carry out subsection 
     (b) shall become available to carry out subsection (c).
       ``(3) Discretionary funding.--In addition to any other 
     funds made available to carry out this section, there is 
     authorized to be appropriated to carry out this section 
     $25,000,000 for each of fiscal years 2009 through 2012.

     ``SEC. 9008. BIOMASS RESEARCH AND DEVELOPMENT.

       ``(a) Definitions.--In this section:
       ``(1) Biobased product.--The term `biobased product' 
     means--
       ``(A) an industrial product (including chemicals, 
     materials, and polymers) produced from biomass; or
       ``(B) a commercial or industrial product (including animal 
     feed and electric power) derived in connection with the 
     conversion of biomass to fuel.
       ``(2) Demonstration.--The term `demonstration' means 
     demonstration of technology in a pilot plant or semi-works 
     scale facility, including a plant or facility located on a 
     farm.
       ``(3) Initiative.--The term `Initiative' means the Biomass 
     Research and Development Initiative established under 
     subsection (e).
       ``(b) Cooperation and Coordination in Biomass Research and 
     Development.--
       ``(1) In general.--The Secretary of Agriculture and the 
     Secretary of Energy shall coordinate policies and procedures 
     that promote research and development regarding the 
     production of biofuels and biobased products.
       ``(2) Points of contact.--To coordinate research and 
     development programs and activities relating to biofuels and 
     biobased products that are carried out by their respective 
     departments--
       ``(A) the Secretary of Agriculture shall designate, as the 
     point of contact for the Department of Agriculture, an 
     officer of the Department of Agriculture appointed by the 
     President to a position in the Department before the date of 
     the designation, by and with the advice and consent of the 
     Senate; and
       ``(B) the Secretary of Energy shall designate, as the point 
     of contact for the Department of Energy, an officer of the 
     Department of Energy appointed by the President to a position 
     in the Department before the date of the designation, by and 
     with the advice and consent of the Senate.
       ``(c) Biomass Research and Development Board.--
       ``(1) Establishment.--There is established the Biomass 
     Research and Development Board to carry out the duties 
     described in paragraph (3).
       ``(2) Membership.--The Board shall consist of--
       ``(A) the point of contacts of the Department of Energy and 
     the Department of Agriculture, who shall serve as 
     cochairpersons of the Board;
       ``(B) a senior officer of each of the Department of the 
     Interior, the Environmental Protection Agency, the National 
     Science Foundation, and the Office of Science and Technology 
     Policy, each of whom shall have a rank that is equivalent to 
     the rank of the points of contact; and
       ``(C) at the option of the Secretary of Agriculture and the 
     Secretary of Energy, other members appointed by the 
     Secretaries (after consultation with the Board).
       ``(3) Duties.--The Board shall--
       ``(A) coordinate research and development activities 
     relating to biofuels and biobased products--
       ``(i) between the Department of Agriculture and the 
     Department of Energy; and
       ``(ii) with other departments and agencies of the Federal 
     Government;

[[Page H3520]]

       ``(B) provide recommendations to the points of contact 
     concerning administration of this title;
       ``(C) ensure that--
       ``(i) solicitations are open and competitive with awards 
     made annually; and
       ``(ii) objectives and evaluation criteria of the 
     solicitations are clearly stated and minimally prescriptive, 
     with no areas of special interest; and
       ``(D) ensure that the panel of scientific and technical 
     peers assembled under subsection (e) to review proposals is 
     composed predominantly of independent experts selected from 
     outside the Departments of Agriculture and Energy.
       ``(4) Funding.--Each agency represented on the Board is 
     encouraged to provide funds for any purpose under this 
     section.
       ``(5) Meetings.--The Board shall meet at least quarterly.
       ``(d) Biomass Research and Development Technical Advisory 
     Committee.--
       ``(1) Establishment.--There is established the Biomass 
     Research and Development Technical Advisory Committee to 
     carry out the duties described in paragraph (3).
       ``(2) Membership.--
       ``(A) In general.--The Advisory Committee shall consist 
     of--
       ``(i) an individual affiliated with the biofuels industry;
       ``(ii) an individual affiliated with the biobased 
     industrial and commercial products industry;
       ``(iii) an individual affiliated with an institution of 
     higher education who has expertise in biofuels and biobased 
     products;
       ``(iv) 2 prominent engineers or scientists from government 
     or academia who have expertise in biofuels and biobased 
     products;
       ``(v) an individual affiliated with a commodity trade 
     association;
       ``(vi) 2 individuals affiliated with environmental or 
     conservation organizations;
       ``(vii) an individual associated with State government who 
     has expertise in biofuels and biobased products;
       ``(viii) an individual with expertise in energy and 
     environmental analysis;
       ``(ix) an individual with expertise in the economics of 
     biofuels and biobased products;
       ``(x) an individual with expertise in agricultural 
     economics;
       ``(xi) an individual with expertise in plant biology and 
     biomass feedstock development;
       ``(xii) an individual with expertise in agronomy, crop 
     science, or soil science; and
       ``(xiii) at the option of the points of contact, other 
     members.
       ``(B) Appointment.--The members of the Advisory Committee 
     shall be appointed by the points of contact.
       ``(3) Duties.--The Advisory Committee shall--
       ``(A) advise the points of contact with respect to the 
     Initiative; and
       ``(B) evaluate and make recommendations in writing to the 
     Board regarding whether--
       ``(i) funds authorized for the Initiative are distributed 
     and used in a manner that is consistent with the objectives, 
     purposes, and considerations of the Initiative;
       ``(ii) solicitations are open and competitive with awards 
     made annually;
       ``(iii) objectives and evaluation criteria of the 
     solicitations are clearly stated and minimally prescriptive, 
     with no areas of special interest;
       ``(iv) the points of contact are funding proposals under 
     this title that are selected on the basis of merit, as 
     determined by an independent panel of scientific and 
     technical peers predominantly from outside the Departments of 
     Agriculture and Energy; and
       ``(v) activities under this title are carried out in 
     accordance with this title.
       ``(4) Coordination.--To avoid duplication of effort, the 
     Advisory Committee shall coordinate its activities with those 
     of other Federal advisory committees working in related 
     areas.
       ``(5) Meetings.--The Advisory Committee shall meet at least 
     quarterly.
       ``(6) Terms.--Members of the Advisory Committee shall be 
     appointed for a term of 3 years.
       ``(e) Biomass Research and Development Initiative.--
       ``(1) In general.--The Secretary of Agriculture and the 
     Secretary of Energy, acting through their respective points 
     of contact and in consultation with the Board, shall 
     establish and carry out a Biomass Research and Development 
     Initiative under which competitively awarded grants, 
     contracts, and financial assistance are provided to, or 
     entered into with, eligible entities to carry out research on 
     and development and demonstration of--
       ``(A) biofuels and biobased products; and
       ``(B) the methods, practices, and technologies, for the 
     production of biofuels and biobased products.
       ``(2) Objectives.--The objectives of the Initiative are to 
     develop--
       ``(A) technologies and processes necessary for abundant 
     commercial production of biofuels at prices competitive with 
     fossil fuels;
       ``(B) high-value biobased products--
       ``(i) to enhance the economic viability of biofuels and 
     power;
       ``(ii) to serve as substitutes for petroleum-based 
     feedstocks and products; and
       ``(iii) to enhance the value of coproducts produced using 
     the technologies and processes; and
       ``(C) a diversity of economically and environmentally 
     sustainable domestic sources of renewable biomass for 
     conversion to biofuels, bioenergy, and biobased products.
       ``(3) Technical areas.--The Secretary of Agriculture and 
     the Secretary of Energy, in consultation with the 
     Administrator of the Environmental Protection Agency and 
     heads of other appropriate departments and agencies (referred 
     to in this subsection as the `Secretaries'), shall direct the 
     Initiative in the 3 following areas:
       ``(A) Feedstocks development.--Research, development, and 
     demonstration activities regarding feedstocks and feedstock 
     logistics (including the harvest, handling, transport, 
     preprocessing, and storage) relevant to production of raw 
     materials for conversion to biofuels and biobased products.
       ``(B) Biofuels and biobased products development.--
     Research, development, and demonstration activities to 
     support--
       ``(i) the development of diverse cost-effective 
     technologies for the use of cellulosic biomass in the 
     production of biofuels and biobased products; and
       ``(ii) product diversification through technologies 
     relevant to production of a range of biobased products 
     (including chemicals, animal feeds, and cogenerated power) 
     that potentially can increase the feasibility of fuel 
     production in a biorefinery.
       ``(C) Biofuels development analysis.--
       ``(i) Strategic guidance.--The development of analysis that 
     provides strategic guidance for the application of renewable 
     biomass technologies to improve sustainability and 
     environmental quality, cost effectiveness, security, and 
     rural economic development.
       ``(ii) Energy and environmental impact.--Development of 
     systematic evaluations of the impact of expanded biofuel 
     production on the environment (including forest land) and on 
     the food supply for humans and animals, including the 
     improvement and development of tools for life cycle analysis 
     of current and potential biofuels.
       ``(iii) Assessment of federal land.--Assessments of the 
     potential of Federal land resources to increase the 
     production of feedstocks for biofuels and biobased products, 
     consistent with the integrity of soil and water resources and 
     with other environmental considerations.
       ``(4) Additional considerations.--Within the technical 
     areas described in paragraph (3), the Secretaries shall 
     support research and development--
       ``(A) to create continuously expanding opportunities for 
     participants in existing biofuels production by seeking 
     synergies and continuity with current technologies and 
     practices;
       ``(B) to maximize the environmental, economic, and social 
     benefits of production of biofuels and derived biobased 
     products on a large scale; and
       ``(C) to facilitate small-scale production and local and 
     on-farm use of biofuels, including the development of small-
     scale gasification technologies for production of biofuel 
     from cellulosic feedstocks.
       ``(5) Eligibility.--To be eligible for a grant, contract, 
     or assistance under this section, an applicant shall be--
       ``(A) an institution of higher education;
       ``(B) a National Laboratory;
       ``(C) a Federal research agency;
       ``(D) a State research agency;
       ``(E) a private sector entity;
       ``(F) a nonprofit organization; or
       ``(G) a consortium of 2 or more entities described in 
     subparagraphs (A) through (F).
       ``(6) Administration.--
       ``(A) In general.--After consultation with the Board, the 
     points of contact shall--
       ``(i) publish annually 1 or more joint requests for 
     proposals for grants, contracts, and assistance under this 
     subsection;
       ``(ii) require that grants, contracts, and assistance under 
     this section be awarded based on a scientific peer review by 
     an independent panel of scientific and technical peers;
       ``(iii) give special consideration to applications that--

       ``(I) involve a consortia of experts from multiple 
     institutions;
       ``(II) encourage the integration of disciplines and 
     application of the best technical resources; and
       ``(III) increase the geographic diversity of demonstration 
     projects; and

       ``(iv) require that the technical areas described in each 
     of subparagraphs (A), (B), and (C) of paragraph (3) receive 
     not less than 15 percent of funds made available to carry out 
     this section.
       ``(B) Cost share.--
       ``(i) Research and development projects.--

       ``(I) In general.--Except as provided in subclause (II), 
     the non-Federal share of the cost of a research or 
     development project under this section shall be not less than 
     20 percent.
       ``(II) Reduction.--The Secretary of Agriculture or the 
     Secretary of Energy, as appropriate, may reduce the non-
     Federal share required under subclause (I) if the appropriate 
     Secretary determines the reduction to be necessary and 
     appropriate.

       ``(ii) Demonstration and commercial projects.--The non-
     Federal share of the cost of a demonstration or commercial 
     project under this section shall be not less than 50 percent.
       ``(C) Technology and information transfer.--The Secretary 
     of Agriculture and the Secretary of Energy shall ensure that 
     applicable research results and technologies from the 
     Initiative are--
       ``(i) adapted, made available, and disseminated, as 
     appropriate; and
       ``(ii) included in the best practices database established 
     under section 1672C(e) of the Food, Agriculture, 
     Conservation, and Trade Act of 1990.
       ``(f) Administrative Support and Funds.--
       ``(1) In general.--The Secretary of Energy and the 
     Secretary of Agriculture may provide such administrative 
     support and funds of the Department of Energy and the 
     Department of Agriculture to the Board and the Advisory 
     Committee as are necessary to enable the Board and the 
     Advisory Committee to carry out their duties under this 
     section.
       ``(2) Other agencies.--The heads of the agencies referred 
     to in subsection (c)(2)(B), and the other members of the 
     Board appointed under subsection (c)(2)(C), are encouraged to 
     provide administrative support and funds of their respective 
     agencies to the Board and the Advisory Committee.

[[Page H3521]]

       ``(3) Limitation.--Not more than 4 percent of the amount 
     made available for each fiscal year under subsection (h) may 
     be used to pay the administrative costs of carrying out this 
     section.
       ``(g) Reports.--For each fiscal year for which funds are 
     made available to carry out this section, the Secretary of 
     Energy and the Secretary of Agriculture shall jointly submit 
     to Congress a detailed report on--
       ``(1) the status and progress of the Initiative, including 
     a report from the Advisory Committee on whether funds 
     appropriated for the Initiative have been distributed and 
     used in a manner that is consistent with the objectives and 
     requirements of this section;
       ``(2) the general status of cooperation and research and 
     development efforts carried out at each agency with respect 
     to biofuels and biobased products; and
       ``(3) the plans of the Secretary of Energy and the 
     Secretary of Agriculture for addressing concerns raised in 
     the report, including concerns raised by the Advisory 
     Committee.
       ``(h) Funding.--
       ``(1) Mandatory funding.--Of the funds of the Commodity 
     Credit Corporation, the Secretary of Agriculture shall use to 
     carry out this section, to remain available until expended--
       ``(A) $20,000,000 for fiscal year 2009;
       ``(B) $28,000,000 for fiscal year 2010;
       ``(C) $30,000,000 for fiscal year 2011; and
       ``(D) $40,000,000 for fiscal year 2012.
       ``(2) Discretionary funding.--In addition to any other 
     funds made available to carry out this section, there is 
     authorized to be appropriated to carry out this section 
     $35,000,000 for each of fiscal years 2009 through 2012.

     ``SEC. 9009. RURAL ENERGY SELF-SUFFICIENCY INITIATIVE.

       ``(a) Definitions.--In this section:
       ``(1) Eligible rural community.--The term `eligible rural 
     community' means a community located in a rural area (as 
     defined in section 343(a)(13)(A) of the Consolidated Farm and 
     Rural Development Act (7 U.S.C. 1991(a)(13)(A))).
       ``(2) Initiative.--The term `Initiative' means the Rural 
     Energy Self-Sufficiency Initiative established under this 
     section.
       ``(3) Integrated renewable energy system.--The term 
     `integrated renewable energy system' means a community-wide 
     energy system that--
       ``(A) reduces conventional energy use; and
       ``(B) increases the use of energy from renewable sources.
       ``(b) Establishment.--The Secretary shall establish a Rural 
     Energy Self-Sufficiency Initiative to provide financial 
     assistance for the purpose of enabling eligible rural 
     communities to substantially increase the energy self-
     sufficiency of the eligible rural communities.
       ``(c) Grant Assistance.--
       ``(1) In general.--The Secretary shall make grants 
     available under the Initiative to eligible rural communities 
     to carry out an activity described in paragraph (2).
       ``(2) Use of grant funds.--An eligible rural community may 
     use a grant--
       ``(A) to conduct an energy assessment that assesses the 
     total energy use of all energy users in the eligible rural 
     community;
       ``(B) to formulate and analyze ideas for reducing energy 
     usage by the eligible rural community from conventional 
     sources; and
       ``(C) to develop and install an integrated renewable energy 
     system.
       ``(3) Grant selection.--
       ``(A) Application.--To be considered for a grant, an 
     eligible rural community shall submit an application to the 
     Secretary that describes the ways in which the community 
     would use the grant to carry out an activity described in 
     paragraph (2).
       ``(B) Preference.--The Secretary shall give preference to 
     those applications that propose to carry out an activity in 
     coordination with--
       ``(i) institutions of higher education or nonprofit 
     foundations of institutions of higher education;
       ``(ii) Federal, State, or local government agencies;
       ``(iii) public or private power generation entities; or
       ``(iv) government entities with responsibility for water or 
     natural resources.
       ``(4) Report.--An eligible rural community receiving a 
     grant under the Initiative shall submit to the Secretary a 
     report on the project of the eligible rural community.
       ``(5) Cost-sharing.--The amount of a grant under the 
     Initiative shall not exceed 50 percent of the cost of the 
     activities described in the application.
       ``(d) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $5,000,000 for 
     each of fiscal years 2009 through 2012.

     ``SEC. 9010. FEEDSTOCK FLEXIBILITY PROGRAM FOR BIOENERGY 
                   PRODUCERS.

       ``(a) Definitions.--In this section:
       ``(1) Bioenergy.--The term `bioenergy' means fuel grade 
     ethanol and other biofuel.
       ``(2) Bioenergy producer.--The term `bioenergy producer' 
     means a producer of bioenergy that uses an eligible commodity 
     to produce bioenergy under this section.
       ``(3) Eligible commodity.--The term `eligible commodity' 
     means a form of raw or refined sugar or in-process sugar that 
     is eligible to be marketed in the United States for human 
     consumption or to be used for the extraction of sugar for 
     human consumption.
       ``(4) Eligible entity.--The term `eligible entity' means an 
     entity located in the United States that markets an eligible 
     commodity in the United States.
       ``(b) Feedstock Flexibility Program.--
       ``(1) In general.--
       ``(A) Purchases and sales.--For each of the 2008 through 
     2012 crops, the Secretary shall purchase eligible commodities 
     from eligible entities and sell such commodities to bioenergy 
     producers for the purpose of producing bioenergy in a manner 
     that ensures that section 156 of the Federal Agriculture 
     Improvement and Reform Act (7 U.S.C. 7272) is operated at no 
     cost to the Federal Government by avoiding forfeitures to the 
     Commodity Credit Corporation.
       ``(B) Competitive procedures.--In carrying out the 
     purchases and sales required under subparagraph (A), the 
     Secretary shall, to the maximum extent practicable, use 
     competitive procedures, including the receiving, offering, 
     and accepting of bids, when entering into contracts with 
     eligible entities and bioenergy producers, provided that such 
     procedures are consistent with the purposes of subparagraph 
     (A).
       ``(C) Limitation.--The purchase and sale of eligible 
     commodities under subparagraph (A) shall only be made in crop 
     years in which such purchases and sales are necessary to 
     ensure that the program authorized under section 156 of the 
     Federal Agriculture Improvement and Reform Act (7 U.S.C. 
     7272) is operated at no cost to the Federal Government by 
     avoiding forfeitures to the Commodity Credit Corporation.
       ``(2) Notice.--
       ``(A) In general.--As soon as practicable after the date of 
     enactment of the Food, Conservation, and Energy Act of 2008 
     and each September 1 thereafter through September 1, 2012, 
     the Secretary shall provide notice to eligible entities and 
     bioenergy producers of the quantity of eligible commodities 
     that shall be made available for purchase and sale for the 
     crop year following the date of the notice under this 
     section.
       ``(B) Reestimates.--Not later than the January 1, April 1, 
     and July 1 of the calendar year following the date of a 
     notice under subparagraph (A), the Secretary shall reestimate 
     the quantity of eligible commodities determined under 
     subparagraph (A), and provide notice and make purchases and 
     sales based on such reestimates.
       ``(3) Commodity credit corporation inventory.--
       ``(A) Dispositions.--
       ``(i) Bioenergy and generally.--Except as provided in 
     clause (ii), to the extent that an eligible commodity is 
     owned and held in inventory by the Commodity Credit 
     Corporation (accumulated pursuant to the program authorized 
     under section 156 of the Federal Agriculture Improvement and 
     Reform Act (7 U.S.C. 7272)), the Secretary shall--

       ``(I) sell the eligible commodity to bioenergy producers 
     under this section consistent with paragraph (1)(C);
       ``(II) dispose of the eligible commodity in accordance with 
     section 156(f)(2) of that Act; or
       ``(III) otherwise dispose of the eligible commodity through 
     the buyback of certificates of quota entry.

       ``(ii) Preservation of other authorities.--Nothing in this 
     section limits the use of other authorities for the 
     disposition of an eligible commodity held in the inventory of 
     the Commodity Credit Corporation for nonfood use or otherwise 
     in a manner that does not increase the net quantity of sugar 
     available for human consumption in the United States market, 
     consistent with section 156(f)(1) of the Federal Agriculture 
     Improvement and Reform Act (7 U.S.C. 7272(f)(1)).
       ``(B) Emergency shortages.--Notwithstanding subparagraph 
     (A), if there is an emergency shortage of sugar for human 
     consumption in the United States market that is caused by a 
     war, flood, hurricane, or other natural disaster, or other 
     similar event, the Secretary may dispose of an eligible 
     commodity that is owned and held in inventory by the 
     Commodity Credit Corporation (accumulated pursuant to the 
     program authorized under section 156 of the Federal 
     Agriculture Improvement and Reform Act (7 U.S.C. 7272)) 
     through disposition as authorized under section 156(f) of 
     that Act or through the use of any other authority of the 
     Commodity Credit Corporation.
       ``(4) Transfer rule; storage fees.--
       ``(A) General transfer rule.--Except with regard to 
     emergency dispositions under paragraph (3)(B) and as provided 
     in subparagraph (C), the Secretary shall ensure that 
     bioenergy producers that purchase eligible commodities 
     pursuant to this section take possession of the eligible 
     commodities within 30 calendar days of the date of such 
     purchase from the Commodity Credit Corporation.
       ``(B) Payment of storage fees prohibited.--
       ``(i) In general.--The Secretary shall, to the maximum 
     extent practicable, carry out this section in a manner that 
     ensures no storage fees are paid by the Commodity Credit 
     Corporation in the administration of this section.
       ``(ii) Exception.--Clause (i) shall not apply with respect 
     to any commodities owned and held in inventory by the 
     Commodity Credit Corporation (accumulated pursuant to the 
     program authorized under section 156 of the Federal 
     Agriculture Improvement and Reform Act (7 U.S.C. 7272)).
       ``(C) Option to prevent storage fees.--
       ``(i) In general.--The Secretary may enter into contracts 
     with bioenergy producers to sell eligible commodities to such 
     producers prior in time to entering into contracts with 
     eligible entities to purchase the eligible commodities to be 
     used to satisfy the contracts entered into with the bioenergy 
     producers.
       ``(ii) Special transfer rule.--If the Secretary makes a 
     sale and purchase referred to in clause (i), the Secretary 
     shall ensure that the bioenergy producer that purchased 
     eligible commodities takes possession of such commodities 
     within 30 calendar days of the date the Commodity Credit 
     Corporation purchases the eligible commodities.
       ``(5) Relation to other laws.--If sugar that is subject to 
     a marketing allotment under part VII of subtitle B of title 
     III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 
     1359aa et seq.) is the subject of a payment under this 
     section, the sugar shall be considered marketed and

[[Page H3522]]

     shall count against a processor's allocation of an allotment 
     under such part, as applicable.
       ``(6) Funding.--The Secretary shall use the funds, 
     facilities, and authorities of the Commodity Credit 
     Corporation, including the use of such sums as are necessary, 
     to carry out this section.

     ``SEC. 9011. BIOMASS CROP ASSISTANCE PROGRAM.

       ``(a) Definitions.--In this section:
       ``(1) BCAP.--The term `BCAP' means the Biomass Crop 
     Assistance Program established under this section.
       ``(2) BCAP project area.--The term `BCAP project area' 
     means an area that--
       ``(A) has specified boundaries that are submitted to the 
     Secretary by the project sponsor and subsequently approved by 
     the Secretary;
       ``(B) includes producers with contract acreage that will 
     supply a portion of the renewable biomass needed by a biomass 
     conversion facility; and
       ``(C) is physically located within an economically 
     practicable distance from the biomass conversion facility.
       ``(3) Contract acreage.--The term `contract acreage' means 
     eligible land that is covered by a BCAP contract entered into 
     with the Secretary.
       ``(4) Eligible crop.--
       ``(A) In general.--The term `eligible crop' means a crop of 
     renewable biomass.
       ``(B) Exclusions.--The term `eligible crop' does not 
     include--
       ``(i) any crop that is eligible to receive payments under 
     title I of the Food, Conservation, and Energy Act of 2008 or 
     an amendment made by that title; or
       ``(ii) any plant that is invasive or noxious or has the 
     potential to become invasive or noxious, as determined by the 
     Secretary, in consultation with other appropriate Federal or 
     State departments and agencies.
       ``(5) Eligible land.--
       ``(A) In general.--The term `eligible land' includes 
     agricultural and nonindustrial private forest lands (as 
     defined in section 5(c) of the Cooperative Forestry 
     Assistance Act of 1978 (16 U.S.C. 2103a(c))).
       ``(B) Exclusions.--The term `eligible land' does not 
     include--
       ``(i) Federal- or State-owned land;
       ``(ii) land that is native sod, as of the date of enactment 
     of the Food, Conservation, and Energy Act of 2008;
       ``(iii) land enrolled in the conservation reserve program 
     established under subchapter B of chapter 1 of subtitle D of 
     title XII of the Food Security Act of 1985 (16 U.S.C. 3831 et 
     seq.);
       ``(iv) land enrolled in the wetlands reserve program 
     established under subchapter C of chapter 1 of subtitle D of 
     title XII of that Act (16 U.S.C. 3837 et seq.); or
       ``(v) land enrolled in the grassland reserve program 
     established under subchapter D of chapter 2 of subtitle D of 
     title XII of that Act (16 U.S.C. 3838n et seq.).
       ``(6) Eligible material.--
       ``(A) In general.--The term `eligible material' means 
     renewable biomass.
       ``(B) Exclusions.--The term `eligible material' does not 
     include--
       ``(i) any crop that is eligible to receive payments under 
     title I of the Food, Conservation, and Energy Act of 2008 or 
     an amendment made by that title;
       ``(ii) animal waste and byproducts (including fats, oils, 
     greases, and manure);
       ``(iii) food waste and yard waste; or
       ``(iv) algae.
       ``(7) Producer.--The term `producer' means an owner or 
     operator of contract acreage that is physically located 
     within a BCAP project area.
       ``(8) Project sponsor.--The term `project sponsor' means--
       ``(A) a group of producers; or
       ``(B) a biomass conversion facility.
       ``(b) Establishment and Purpose.--The Secretary shall 
     establish and administer a Biomass Crop Assistance Program 
     to--
       ``(1) support the establishment and production of eligible 
     crops for conversion to bioenergy in selected BCAP project 
     areas; and
       ``(2) assist agricultural and forest land owners and 
     operators with collection, harvest, storage, and 
     transportation of eligible material for use in a biomass 
     conversion facility.
       ``(c) BCAP Project Area.--
       ``(1) In general.--The Secretary shall provide financial 
     assistance to producers of eligible crops in a BCAP project 
     area.
       ``(2) Selection of project areas.--
       ``(A) In general.--To be considered for selection as a BCAP 
     project area, a project sponsor shall submit to the Secretary 
     a proposal that includes, at a minimum--
       ``(i) a description of the eligible land and eligible crops 
     of each producer that will participate in the proposed BCAP 
     project area;
       ``(ii) a letter of commitment from a biomass conversion 
     facility that the facility will use the eligible crops 
     intended to be produced in the proposed BCAP project area;
       ``(iii) evidence that the biomass conversion facility has 
     sufficient equity available, as determined by the Secretary, 
     if the biomass conversion facility is not operational at the 
     time the proposal is submitted to the Secretary; and
       ``(iv) any other appropriate information about the biomass 
     conversion facility or proposed biomass conversion facility 
     that gives the Secretary a reasonable assurance that the 
     plant will be in operation by the time that the eligible 
     crops are ready for harvest.
       ``(B) BCAP project area selection criteria.--In selecting 
     BCAP project areas, the Secretary shall consider--
       ``(i) the volume of the eligible crops proposed to be 
     produced in the proposed BCAP project area and the 
     probability that such crops will be used for the purposes of 
     the BCAP;
       ``(ii) the volume of renewable biomass projected to be 
     available from sources other than the eligible crops grown on 
     contract acres;
       ``(iii) the anticipated economic impact in the proposed 
     BCAP project area;
       ``(iv) the opportunity for producers and local investors to 
     participate in the ownership of the biomass conversion 
     facility in the proposed BCAP project area;
       ``(v) the participation rate by--

       ``(I) beginning farmers or ranchers (as defined in 
     accordance with section 343(a) of the Consolidated Farm and 
     Rural Development Act (7 U.S.C. 1991(a))); or
       ``(II) socially disadvantaged farmers or ranchers (as 
     defined in section 2501(e) of the Food, Agriculture, 
     Conservation, and Trade Act of 1990 (7 U.S.C. 2279(e)));

       ``(vi) the impact on soil, water, and related resources;
       ``(vii) the variety in biomass production approaches within 
     a project area, including (as appropriate)--

       ``(I) agronomic conditions;
       ``(II) harvest and postharvest practices; and
       ``(III) monoculture and polyculture crop mixes;

       ``(viii) the range of eligible crops among project areas; 
     and
       ``(ix) any additional information, as determined by the 
     Secretary.
       ``(3) Contract.--
       ``(A) In general.--On approval of a BCAP project area by 
     the Secretary, each producer in the BCAP project area shall 
     enter into a contract directly with the Secretary.
       ``(B) Minimum terms.--At a minimum, contracts shall include 
     terms that cover--
       ``(i) an agreement to make available to the Secretary, or 
     to an institution of higher education or other entity 
     designated by the Secretary, such information as the 
     Secretary considers to be appropriate to promote the 
     production of eligible crops and the development of biomass 
     conversion technology;
       ``(ii) compliance with the highly erodible land 
     conservation requirements of subtitle B of title XII of the 
     Food Security Act of 1985 (16 U.S.C. 3811 et seq.) and the 
     wetland conservation requirements of subtitle C of title XII 
     of that Act (16 U.S.C. 3821 et seq.);
       ``(iii) the implementation of (as determined by the 
     Secretary)--

       ``(I) a conservation plan; or
       ``(II) a forest stewardship plan or an equivalent plan; and

       ``(iv) any additional requirements the Secretary considers 
     appropriate.
       ``(C) Duration.--A contract under this subsection shall 
     have a term of up to--
       ``(i) 5 years for annual and perennial crops; or
       ``(ii) 15 years for woody biomass.
       ``(4) Relationship to other programs.--In carrying out this 
     subsection, the Secretary shall provide for the preservation 
     of cropland base and yield history applicable to the land 
     enrolled in a BCAP contract.
       ``(5) Payments.--
       ``(A) In general.--The Secretary shall make establishment 
     and annual payments directly to producers to support the 
     establishment and production of eligible crops on contract 
     acreage.
       ``(B) Amount of establishment payments.--The amount of an 
     establishment payment under this subsection shall be up to 75 
     percent of the costs of establishing an eligible perennial 
     crop covered by the contract, including--
       ``(i) the cost of seeds and stock for perennials;
       ``(ii) the cost of planting the perennial crop, as 
     determined by the Secretary; and
       ``(iii) in the case of nonindustrial private forestland, 
     the costs of site preparation and tree planting.
       ``(C) Amount of annual payments.--
       ``(i) In general.--Subject to clause (ii), the amount of an 
     annual payment under this subsection shall be determined by 
     the Secretary.
       ``(ii) Reduction.--The Secretary shall reduce an annual 
     payment by an amount determined to be appropriate by the 
     Secretary, if--

       ``(I) an eligible crop is used for purposes other than the 
     production of energy at the biomass conversion facility;
       ``(II) an eligible crop is delivered to the biomass 
     conversion facility;
       ``(III) the producer receives a payment under subsection 
     (d);
       ``(IV) the producer violates a term of the contract; or
       ``(V) there are such other circumstances, as determined by 
     the Secretary to be necessary to carry out this section.

       ``(d) Assistance With Collection, Harvest, Storage, and 
     Transportation.--
       ``(1) In general.--The Secretary shall make a payment for 
     the delivery of eligible material to a biomass conversion 
     facility to--
       ``(A) a producer of an eligible crop that is produced on 
     BCAP contract acreage; or
       ``(B) a person with the right to collect or harvest 
     eligible material.
       ``(2) Payments.--
       ``(A) Costs covered.--A payment under this subsection shall 
     be in an amount described in subparagraph (B) for--
       ``(i) collection;
       ``(ii) harvest;
       ``(iii) storage; and
       ``(iv) transportation to a biomass conversion facility.
       ``(B) Amount.--Subject to paragraph (3), the Secretary may 
     provide matching payments at a rate of $1 for each $1 per ton 
     provided by the biomass conversion facility, in an amount 
     equal to not more than $45 per ton for a period of 2 years.
       ``(3) Limitation on assistance for bcap contract acreage.--
     As a condition of the receipt of annual payment under 
     subsection (c), a producer receiving a payment under this 
     subsection for collection, harvest, storage or transportation 
     of an eligible crop produced on BCAP acreage shall agree to a 
     reduction in the annual payment.
       ``(e) Report.--Not later than 4 years after the date of 
     enactment of the Food, Conservation,

[[Page H3523]]

     and Energy Act of 2008, the Secretary shall submit to the 
     Committee on Agriculture of the House of Representatives and 
     the Committee on Agriculture, Nutrition, and Forestry of the 
     Senate a report on the dissemination by the Secretary of the 
     best practice data and information gathered from participants 
     receiving assistance under this section.
       ``(f) Funding.--Of the funds of the Commodity Credit 
     Corporation, the Secretary shall use to carry out this 
     section such sums as are necessary for each of fiscal years 
     2008 through 2012.

     ``SEC. 9012. FOREST BIOMASS FOR ENERGY.

       ``(a) In General.--The Secretary, acting through the Forest 
     Service, shall conduct a competitive research and development 
     program to encourage use of forest biomass for energy.
       ``(b) Eligible Entities.--Entities eligible to compete 
     under the program under this section include--
       ``(1) the Forest Service (acting through Research and 
     Development);
       ``(2) other Federal agencies;
       ``(3) State and local governments;
       ``(4) Indian tribes;
       ``(5) land-grant colleges and universities; and
       ``(6) private entities.
       ``(c) Priority for Project Selection.--In carrying out this 
     section, the Secretary shall give priority to projects that--
       ``(1) develop technology and techniques to use low-value 
     forest biomass, such as byproducts of forest health 
     treatments and hazardous fuels reduction, for the production 
     of energy;
       ``(2) develop processes that integrate production of energy 
     from forest biomass into biorefineries or other existing 
     manufacturing streams;
       ``(3) develop new transportation fuels from forest biomass; 
     and
       ``(4) improve the growth and yield of trees intended for 
     renewable energy production.
       ``(d) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $15,000,000 for 
     each of fiscal years 2009 through 2012.

     ``SEC. 9013. COMMUNITY WOOD ENERGY PROGRAM.

       ``(a) Definitions.--In this section:
       ``(1) Community wood energy plan.--The term `community wood 
     energy plan' means an assessment of--
       ``(A) available feedstocks necessary to supply a community 
     wood energy system; and
       ``(B) the long-term feasibility of supplying and operating 
     a community wood energy system.
       ``(2) Community wood energy system.--
       ``(A) In general.--The term `community wood energy system' 
     means an energy system that--
       ``(i) primarily services public facilities owned or 
     operated by State or local governments, including schools, 
     town halls, libraries, and other public buildings; and
       ``(ii) uses woody biomass as the primary fuel.
       ``(B) Inclusions.--The term `community wood energy system' 
     includes single facility central heating, district heating, 
     combined heat and energy systems, and other related biomass 
     energy systems.
       ``(b) Grant Program.--
       ``(1) In general.--The Secretary, acting through the Chief 
     of the Forest Service, shall establish a program to be known 
     as the `Community Wood Energy Program' to provide--
       ``(A) grants of up to $50,000 to State and local 
     governments (or designees) to develop community wood energy 
     plans; and
       ``(B) competitive grants to State and local governments to 
     acquire or upgrade community wood energy systems.
       ``(2) Considerations.--In selecting applicants for grants 
     under paragraph (1)(B), the Secretary shall consider--
       ``(A) the energy efficiency of the proposed system;
       ``(B) the cost effectiveness of the proposed system; and
       ``(C) other conservation and environmental criteria that 
     the Secretary considers appropriate.
       ``(3) Use of plan.--A State or local government applying to 
     receive a competitive grant described in paragraph (1)(B) 
     shall submit to the Secretary as part of the grant 
     application the applicable community wood energy plan.
       ``(c) Limitation.--A community wood energy system acquired 
     with grant funds provided under subsection (b)(1)(B) shall 
     not exceed an output of--
       ``(1) 50,000,000 Btu per hour for heating; and
       ``(2) 2 megawatts for electric power production.
       ``(d) Matching Funds.--A State or local government that 
     receives a grant under subsection (b) shall contribute an 
     amount of non-Federal funds towards the development of the 
     community wood energy plan, or acquisition of the community 
     wood energy systems that is at least equal to the amount of 
     grant funds received by the State or local government under 
     that subsection.
       ``(e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $5,000,000 for 
     each of fiscal years 2009 through 2012.''.
       (b) Conforming Amendment.--The Biomass Research and 
     Development Act of 2000 (7 U.S.C. 8601 et seq.) is repealed.

     SEC. 9002. BIOFUELS INFRASTRUCTURE STUDY.

       (a) In General.--The Secretary of Agriculture, the 
     Secretary of Energy, the Administrator of the Environmental 
     Protection Agency, and the Secretary of Transportation 
     (referred to in this section as the ``Secretaries''), shall 
     jointly conduct a study that includes--
       (1) an assessment of the infrastructure needs for expanding 
     the domestic production, transport, and distribution of 
     biofuels given current and likely future market trends;
       (2) recommendations for infrastructure needs and 
     development approaches, taking into account cost and other 
     associated factors; and
       (3) a report that includes--
       (A) a summary of infrastructure needs;
       (B) an analysis of alternative development approaches to 
     meeting the needs described in subparagraph (A), including 
     cost, siting, and other regulatory issues; and
       (C) recommendations for specific infrastructure development 
     actions to be taken.
       (b) Scope of Study.--
       (1) In general.--In conducting the study described in 
     subsection (a), the Secretaries shall address--
       (A) current and likely future market trends for biofuels 
     through calendar year 2025;
       (B) current and future availability of feedstocks;
       (C) water resource needs, including water requirements for 
     biorefineries;
       (D) shipping and storage needs for biomass feedstock and 
     biofuels, including the adequacy of rural roads; and
       (E) modes of transportation and delivery for biofuels 
     (including shipment by rail, truck, pipeline or barge) and 
     associated infrastructure issues.
       (2) Considerations.--In addressing the issues described in 
     paragraph (1), the Secretaries shall consider--
       (A) the effects of increased tank truck, rail, and barge 
     transport on existing infrastructure and safety;
       (B) the feasibility of shipping biofuels through pipelines 
     in existence as the date of enactment of this Act;
       (C) the development of new biofuels pipelines, including 
     siting, financing, timing, and other economic issues;
       (D) the implications of various biofuel blend levels on 
     infrastructure needs;
       (E) the implications of various approaches to 
     infrastructure development on resource use and conservation;
       (F) regional differences in biofuels infrastructure needs; 
     and
       (G) other infrastructure issues, as determined by the 
     Secretaries.
       (c) Implementation.--In carrying out this section, the 
     Secretaries --
       (1) shall--
       (A) consult with individuals and entities with interest or 
     expertise in the areas described in subsection (b);
       (B) to the extent available, use the information developed 
     and results of the related studies authorized under sections 
     243 and 245 of the Energy Independence and Security Act of 
     2007 (Public Law 110-140; 121 Stat. 1540, 1546)); and
       (C) submit to Congress the report required under subsection 
     (a)(3), including--
       (i) in the Senate--

       (I) the Committee on Agriculture, Nutrition, and Forestry ;
       (II) the Committee on Commerce, Science, and 
     Transportation;
       (III) the Committee on Energy and Natural Resources; and
       (IV) the Committee on Environment and Public Works; and

       (ii) in the House of Representatives--

       (I) the Committee on Agriculture;
       (II) the Committee on Energy and Commerce;
       (III) the Committee on Transportation and Infrastructure; 
     and
       (IV) the Committee on Science and Technology; and

       (2) may issue a solicitation for a competition to select a 
     contractor to support the Secretaries.

     SEC. 9003. RENEWABLE FERTILIZER STUDY.

       (a) In General.--Not later than 1 year after the date of 
     receipt of appropriations to carry out this section, the 
     Secretary shall--
       (1) conduct a study to assess the current state of 
     knowledge regarding the potential for the production of 
     fertilizer from renewable energy sources in rural areas, 
     including--
       (A) identification of the critical challenges to 
     commercialization of rural production of nitrogen and 
     phosphorus-based fertilizer from renewables;
       (B) the most promising processes and technologies for 
     renewable fertilizer production;
       (C) the potential cost-competitiveness of renewable 
     fertilizer; and
       (D) the potential impacts of renewable fertilizer on fossil 
     fuel use and the environment; and
       (2) submit to the Committee on Agriculture of the House of 
     Representatives and the Committee on Agriculture, Nutrition, 
     and Forestry of the Senate a report describing the results of 
     the study.
       (b) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $1,000,000 for 
     fiscal year 2009.

             TITLE X--HORTICULTURE AND ORGANIC AGRICULTURE

     SEC. 10001. DEFINITIONS.

       In this title:
       (1) Specialty crop.--The term ``specialty crop'' has the 
     meaning given the term in section 3 of the Specialty Crops 
     Competitiveness Act of 2004 (7 U.S.C. 1621 note; Public Law 
     108-465).
       (2) State department of agriculture.--The term ``State 
     department of agriculture'' means the agency, commission, or 
     department of a State government responsible for protecting 
     and promoting agriculture in the State.

           Subtitle A--Horticulture Marketing and Information

     SEC. 10101. INDEPENDENT EVALUATION OF DEPARTMENT OF 
                   AGRICULTURE COMMODITY PURCHASE PROCESS.

       (a) Evaluation Required.--The Secretary shall arrange to 
     have performed an independent evaluation of the purchasing 
     processes (including the budgetary, statutory, and regulatory 
     authority underlying the processes) used by the Department of 
     Agriculture to implement the requirement that funds available 
     under section 32

[[Page H3524]]

     of the Act of August 24, 1935 (7 U.S.C. 612c), shall be 
     principally devoted to perishable agricultural commodities.
       (b) Submission of Results.--Not later than 18 months after 
     the date of the enactment of this Act, the Secretary shall 
     submit to the Committee on Agriculture of the House of 
     Representatives and the Committee on Agriculture, Nutrition, 
     and Forestry of the Senate a report on the results of the 
     evaluation.

     SEC. 10102. QUALITY REQUIREMENTS FOR CLEMENTINES.

       Section 8e(a) of the Agricultural Adjustment Act (7 U.S.C. 
     608e-1(a)), reenacted with amendments by the Agricultural 
     Marketing Agreement Act of 1937, is amended in the matter 
     preceding the first proviso in the first sentence by 
     inserting ``clementines,'' after ``nectarines,''.

     SEC. 10103. INCLUSION OF SPECIALTY CROPS IN CENSUS OF 
                   AGRICULTURE.

       Section 2(a) of the Census of Agriculture Act of 1997 (7 
     U.S.C. 2204g(a)) is amended--
       (1) by striking ``In 1998'' and inserting the following:
       ``(1) In general.--In 1998''; and
       (2) by adding at the end the following:
       ``(2) Inclusion of specialty crops.--Effective beginning 
     with the census of agriculture required to be conducted in 
     2008, the Secretary shall conduct as part of each census of 
     agriculture a census of specialty crops (as that term is 
     defined in section 3 of the Specialty Crops Competitiveness 
     Act of 2004 (7 U.S.C. 1621 note; Public Law 108-465)).''.

     SEC. 10104. MUSHROOM PROMOTION, RESEARCH, AND CONSUMER 
                   INFORMATION.

       (a) Regions and Members.--Section 1925(b)(2) of the 
     Mushroom Promotion, Research, and Consumer Information Act of 
     1990 (7 U.S.C. 6104(b)(2)) is amended--
       (1) in subparagraph (B), by striking ``4 regions'' and 
     inserting ``3 regions'';
       (2) in subparagraph (D), by striking ``35,000,000 pounds'' 
     and inserting ``50,000,000 pounds''; and
       (3) by striking subparagraph (E) and inserting the 
     following:
       ``(E) Additional members.--In addition to the members 
     appointed pursuant to paragraph (1), and subject to the 9-
     member limit of members on the Council provided in that 
     paragraph, the Secretary shall appoint additional members to 
     the council from a region that attains additional pounds of 
     production as follows:
       ``(i) If the annual production of a region is greater than 
     110,000,000 pounds, but less than or equal to 180,000,000 
     pounds, the region shall be represented by 1 additional 
     member.
       ``(ii) If the annual production of a region is greater than 
     180,000,000 pounds, but less than or equal to 260,000,000 
     pounds, the region shall be represented by 2 additional 
     members.
       ``(iii) If the annual production of a region is greater 
     than 260,000,000 pounds, the region shall be represented by 3 
     additional members.''.
       (b) Powers and Duties of Council.--Section 1925(c) of the 
     Mushroom Promotion, Research, and Consumer Information Act of 
     1990 (7 U.S.C. 6104(c)) is amended--
       (1) by redesignating paragraphs (6), (7), and (8) as 
     paragraphs (7), (8), and (9), respectively; and
       (2) by inserting after paragraph (5) the following:
       ``(6) to develop and propose to the Secretary programs for 
     good agricultural and good handling practices and related 
     activities for mushrooms;''.

     SEC. 10105. FOOD SAFETY EDUCATION INITIATIVES.

       (a) Initiative Authorized.--The Secretary may carry out a 
     food safety education program to educate the public and 
     persons in the fresh produce industry about--
       (1) scientifically proven practices for reducing microbial 
     pathogens on fresh produce; and
       (2) methods of reducing the threat of cross-contamination 
     of fresh produce through sanitary handling practices.
       (b) Cooperation.--The Secretary may carry out the education 
     program in cooperation with public and private partners.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Secretary to carry out this section 
     $1,000,000 for each of fiscal years 2008 through 2012, to 
     remain available until expended.

     SEC. 10106. FARMERS' MARKET PROMOTION PROGRAM.

       Section 6 of the Farmer-to-Consumer Direct Marketing Act of 
     1976 (7 U.S.C. 3005) is amended--
       (1) in subsection (a), by inserting ``and to promote direct 
     producer-to-consumer marketing'' before the period at the 
     end;
       (2) in subsection (b)(1)--
       (A) in subparagraph (A), by inserting ``agri-tourism 
     activities,'' after ``programs,''; and
       (B) in subparagraph (B)--
       (i) by inserting ``agri-tourism activities,'' after 
     ``programs,'' and
       (ii) by striking ``infrastructure'' and inserting 
     ``marketing opportunities'';
       (3) in subsection (c)(1), by inserting ``or a producer 
     network or association'' after ``cooperative''; and
       (4) by striking subsection (e) and inserting the following:
       ``(e) Funding.--
       ``(1) In general.--Of the funds of the Commodity Credit 
     Corporation, the Secretary shall use to carry out this 
     section--
       ``(A) $3,000,000 for fiscal year 2008;
       ``(B) $5,000,000 for each of fiscal years 2009 through 
     2010; and
       ``(C) $10,000,000 for each of fiscal years 2011 and 2012.
       ``(2) Use of funds.--Not less than 10 percent of the funds 
     used to carry out this section in a fiscal year under 
     paragraph (1) shall be used to support the use of electronic 
     benefits transfers for Federal nutrition programs at farmers' 
     markets.
       ``(3) Interdepartmental coordination.--In carrying out this 
     subsection, the Secretary shall ensure coordination between 
     the various agencies to the maximum extent practicable.
       ``(4) Limitation.--Funds described in paragraph (2)--
       ``(A) may not be used for the ongoing cost of carrying out 
     any project; and
       ``(B) shall only be provided to eligible entities that 
     demonstrate a plan to continue to provide EBT card access at 
     1 or more farmers' markets following the receipt of the 
     grant.''.

     SEC. 10107. SPECIALTY CROPS MARKET NEWS ALLOCATION.

       (a) In General.--The Secretary shall--
       (1) carry out market news activities to provide timely 
     price and shipment information of specialty crops in the 
     United States; and
       (2) use funds made available under subsection (b) to 
     increase the reporting levels for specialty crops in effect 
     on the date of enactment of this Act.
       (b) Authorization of Appropriations.--In addition to any 
     other funds made available through annual appropriations for 
     market news services, there is authorized to be appropriated 
     to carry out this section $9,000,000 for each of fiscal years 
     2008 through 2012, to remain available until expended.

     SEC. 10108. EXPEDITED MARKETING ORDER FOR HASS AVOCADOS FOR 
                   GRADES AND STANDARDS AND OTHER PURPOSES.

       (a) In General.--The Secretary shall initiate procedures 
     under the Agricultural Adjustment Act (7 U.S.C. 601 et seq.), 
     reenacted with amendments by the Agricultural Marketing 
     Agreement Act of 1937, to determine whether it would be 
     appropriate to establish a Federal marketing order for Hass 
     avocados relating to grades and standards and for other 
     purposes under that Act.
       (b) Expedited Procedures.--
       (1) Proposal for an order.--An organization of domestic 
     avocado producers in existence on the date of enactment of 
     this Act may request the issuance of, and submit to the 
     Secretary a proposal for, an order described in subsection 
     (a).
       (2) Publication of proposal.--Not later than 60 days after 
     the date on which the Secretary receives a proposed order 
     under paragraph (1), the Secretary shall initiate procedures 
     described in subsection (a) to determine whether the proposed 
     order should proceed.
       (c) Effective Date.--Any order issued under this section 
     shall become effective not later than 15 months after the 
     date on which the Secretary initiates procedures under the 
     Agricultural Adjustment Act (7 U.S.C. 601 et seq.), reenacted 
     with amendments by the Agricultural Marketing Agreement Act 
     of 1937.

     SEC. 10109. SPECIALTY CROP BLOCK GRANTS.

       (a) Definition of Specialty Crop.--Section 3(1) of the 
     Specialty Crops Competitiveness Act of 2004 (Public Law 108-
     465; 7 U.S.C. 1621 note) is amended by inserting 
     ``horticulture and'' before ``nursery''.
       (b) Definition of State.--Section 3(2) of the Specialty 
     Crops Competitiveness Act of 2004 (Public Law 108-465; 7 
     U.S.C. 1621 note) is amended by striking ``and the 
     Commonwealth of Puerto Rico'' and inserting ``the 
     Commonwealth of Puerto Rico, Guam, American Samoa, the United 
     States Virgin Islands, and the Commonwealth of the Northern 
     Mariana Islands''.
       (c) Specialty Crop Block Grants.--Section 101 of the 
     Specialty Crops Competitiveness Act of 2004 (Public Law 108-
     465; 7 U.S.C. 1621 note) is amended--
       (1) in subsection (a)--
       (A) by striking ``Subject to the appropriation of funds to 
     carry out this section'' and inserting ``Using the funds made 
     available under subsection (j)''; and
       (B) by striking ``2009'' and inserting ``2012'';
       (2) in subsection (b), by striking ``appropriated pursuant 
     to the authorization of appropriations in subsection (i)'' 
     and inserting ``made available under subsection (j)'';
       (3) by striking subsection (c) and inserting the following:
       ``(c) Minimum Grant Amount.--Notwithstanding subsection 
     (b), each State shall receive a grant under this section for 
     each fiscal year in an amount that is at least equal to the 
     higher of--
       ``(1) $100,000; or
       ``(2) \1/3\ of 1 percent of the total amount of funding 
     made available to carry out this section for the fiscal 
     year.''; and
       (4) by striking subsection (i) and inserting the following:
       ``(i) Reallocation.--
       ``(1) In general.--The Secretary shall reallocate to other 
     States in accordance with paragraph (2) any amounts made 
     available for a fiscal year under this section that are not 
     obligated or expended by a date during that fiscal year 
     determined by the Secretary.
       ``(2) Pro rata allocation.--The Secretary shall allocate 
     funds described in paragraph (1) pro rata to the remaining 
     States that applied during the specified grant application 
     period.
       ``(3) Use of reallocated funds.--Funds allocated to a State 
     under this subsection shall be used by the State only to 
     carry out projects that were previously approved in the State 
     plan of the State.
       ``(j) Funding.--Of the funds of the Commodity Credit 
     Corporation, the Secretary of Agriculture shall make grants 
     under this section, using--
       ``(1) $10,000,000 for fiscal year 2008;
       ``(2) $49,000,000 for fiscal year 2009; and
       ``(3) $55,000,000 for each of fiscal years 2010 through 
     2012.''.

                Subtitle B--Pest and Disease Management

     SEC. 10201. PLANT PEST AND DISEASE MANAGEMENT AND DISASTER 
                   PREVENTION.

       (a) In General.--Subtitle A of the Plant Protection Act (7 
     U.S.C. 7711 et seq.) is amended by adding at the end the 
     following:

[[Page H3525]]

     ``SEC. 420. PLANT PEST AND DISEASE MANAGEMENT AND DISASTER 
                   PREVENTION.

       ``(a) Definitions.--In this section:
       ``(1) Early plant pest detection and surveillance.--The 
     term `early plant pest detection and surveillance' means the 
     full range of activities undertaken to find newly introduced 
     plant pests, whether the plant pests are new to the United 
     States or new to certain areas of the United States, before--
       ``(A) the plant pests become established; or
       ``(B) the plant pest infestations become too large and 
     costly to eradicate or control.
       ``(2) Specialty crop.--The term `specialty crop' has the 
     meaning given the term in section 3 of the Specialty Crops 
     Competitiveness Act of 2004 (7 U.S.C. 1621 note; Public Law 
     108-465).
       ``(3) State department of agriculture.--The term `State 
     department of agriculture' means an agency of a State that 
     has a legal responsibility to perform early plant pest 
     detection and surveillance activities.
       ``(b) Early Plant Pest Detection and Surveillance 
     Improvement Program.--
       ``(1) Cooperative agreements.--The Secretary shall enter 
     into a cooperative agreement with each State department of 
     agriculture that agrees to conduct early plant pest detection 
     and surveillance activities.
       ``(2) Consultation.--In carrying out this subsection, the 
     Secretary shall consult with--
       ``(A) the National Plant Board; and
       ``(B) other interested parties.
       ``(3) Federal advisory committee act.--The Federal Advisory 
     Committee Act (5 U.S.C. App.) shall not apply to 
     consultations under this subsection.
       ``(4) Application.--
       ``(A) In general.--A State department of agriculture 
     seeking to enter into a cooperative agreement under this 
     subsection shall submit to the Secretary an application 
     containing such information as the Secretary may require.
       ``(B) Notification.--The Secretary shall notify applicants 
     of--
       ``(i) the requirements to be imposed on a State department 
     of agriculture for auditing of, and reporting on, the use of 
     any funds provided by the Secretary under the cooperative 
     agreement;
       ``(ii) the criteria to be used to ensure that early pest 
     detection and surveillance activities supported under the 
     cooperative agreement are based on sound scientific data or 
     thorough risk assessments; and
       ``(iii) the means of identifying pathways of pest 
     introductions.
       ``(5) Use of funds.--
       ``(A) Plant pest detection and surveillance activities.--A 
     State department of agriculture that receives funds under 
     this subsection shall use the funds to carry out early plant 
     pest detection and surveillance activities approved by the 
     Secretary to prevent the introduction or spread of a plant 
     pest.
       ``(B) Subagreements.--Nothing in this subsection prevents a 
     State department of agriculture from using funds received 
     under paragraph (4) to enter into subagreements with 
     political subdivisions of the State that have legal 
     responsibilities relating to agricultural plant pest and 
     disease surveillance.
       ``(C) Non-federal share.--The non-Federal share of the cost 
     of carrying out a cooperative agreement under this section 
     may be provided in-kind, including through provision of such 
     indirect costs of the cooperative agreement as the Secretary 
     considers to be appropriate.
       ``(D) Ability to provide funds.--The Secretary shall not 
     take the ability to provide non-Federal costs to carry out a 
     cooperative agreement entered into under subparagraph (A) 
     into consideration when deciding whether to enter into a 
     cooperative agreement with a State department of agriculture.
       ``(6) Special funding considerations.--The Secretary shall 
     provide funds to a State department of agriculture if the 
     Secretary determines that--
       ``(A) the State department of agriculture is in a State 
     that has a high risk of being affected by 1 or more plant 
     pests or diseases, taking into consideration--
       ``(i) the number of international ports of entry in the 
     State;
       ``(ii) the volume of international passenger and cargo 
     entry into the State;
       ``(iii) the geographic location of the State and if the 
     location or types of agricultural commodities produced in the 
     State are conducive to agricultural pest and disease 
     establishment due to the climate, crop diversity, or natural 
     resources (including unique plant species) of the State; and
       ``(iv) whether the Secretary has determined that an 
     agricultural pest or disease in the State is a Federal 
     concern ; and
       ``(B) the early plant pest detection and surveillance 
     activities supported with the funds will likely--
       ``(i) prevent the introduction and establishment of plant 
     pests; and
       ``(ii) provide a comprehensive approach to compliment 
     Federal detection efforts.
       ``(7) Reporting requirement.--Not later than 90 days after 
     the date of completion of an early plant pest detection and 
     surveillance activity conducted by a State department of 
     agriculture using funds provided under this section, the 
     State department of agriculture shall submit to the Secretary 
     a report that describes the purposes and results of the 
     activities.
       ``(c) Threat Identification and Mitigation Program.--
       ``(1) Establishment.--The Secretary shall establish a 
     threat identification and mitigation program to determine and 
     address threats to the domestic production of crops.
       ``(2) Requirements.--In conducting the program established 
     under paragraph (1), the Secretary shall--
       ``(A) develop risk assessments of the potential threat to 
     the agricultural industry of the United States from foreign 
     sources;
       ``(B) collaborate with the National Plant Board; and
       ``(C) implement action plans for high consequence plant 
     pest and diseases to assist in preventing the introduction 
     and widespread dissemination of new plant pest and disease 
     threats in the United States.
       ``(3) Reports.--Not later than 1 year after the date of 
     enactment of this paragraph, and annually thereafter, the 
     Secretary shall submit to the Committee on Agriculture of the 
     House of Representatives and the Committee on Agriculture, 
     Nutrition, and Forestry of the Senate a report on the action 
     plans described in paragraph (2), including an accounting of 
     funds expended on the action plans.
       ``(d) Specialty Crop Certification and Risk Management 
     Systems.--The Secretary shall provide funds and technical 
     assistance to specialty crop growers, organizations 
     representing specialty crop growers, and State and local 
     agencies working with specialty crop growers and 
     organizations for the development and implementation of--
       ``(1) audit-based certification systems, such as best 
     management practices--
       ``(A) to address plant pests; and
       ``(B) to mitigate the risk of plant pests in the movement 
     of plants and plant products; and
       ``(2) nursery plant pest risk management systems, in 
     collaboration with the nursery industry, research 
     institutions, and other appropriate entities--
       ``(A) to enable growers to identify and prioritize nursery 
     plant pests and diseases of regulatory significance;
       ``(B) to prevent the introduction, establishment, and 
     spread of those plant pests and diseases; and
       ``(C) to reduce the risk of and mitigate those plant pests 
     and diseases.
       ``(e) Funding.--Of the funds of the Commodity Credit 
     Corporation, the Secretary shall make available to carry out 
     this section--
       ``(1) $12,000,000 for fiscal year 2009;
       ``(2) $45,000,000 for fiscal year 2010;
       ``(3) $50,000,000 for fiscal year 2011; and
       ``(4) $50,000,000 for fiscal year 2012 and each fiscal year 
     thereafter.''.
       (b) Congressional Disapproval.--Congress disapproves the 
     rule submitted by the Secretary of Agriculture relating to 
     cost-sharing for animal and plant health emergency programs 
     (68 Fed. Reg. 40541 (2003)), and such rule shall have no 
     force or effect.

     SEC. 10202. NATIONAL CLEAN PLANT NETWORK.

       (a) In General.--The Secretary shall establish a program to 
     be known as the ``National Clean Plant Network'' (referred to 
     in this section as the ``Program'').
       (b) Requirements.--Under the Program, the Secretary shall 
     establish a network of clean plant centers for diagnostic and 
     pathogen elimination services to--
       (1) produce clean propagative plant material; and
       (2) maintain blocks of pathogen-tested plant material in 
     sites located throughout the United States.
       (c) Availability of Clean Plant Source Material.--Clean 
     plant source material may be made available to--
       (1) a State for a certified plant program of the State; and
       (2) private nurseries and producers.
       (d) Consultation and Collaboration.--In carrying out the 
     Program, the Secretary shall--
       (1) consult with State departments of agriculture, land 
     grant universities, and NLGCA Institutions (as defined in 
     section 1404 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103)); 
     and
       (2) to the extent practicable and with input from the 
     appropriate State officials and industry representatives, use 
     existing Federal or State facilities to serve as clean plant 
     centers.
       (e) Funding.--Of the funds of the Commodity Credit 
     Corporation, the Secretary shall use to carry out the Program 
     $5,000,000 for each of fiscal years 2009 through 2012, to 
     remain available until expended.

     SEC. 10203. PLANT PROTECTION.

       (a) Review of Payment of Compensation.--Section 415(e) of 
     the Plant Protection Act (7 U.S.C. 7715(e)) is amended in the 
     second sentence by striking ``of longer than 60 days''.
       (b) Secretarial Discretion.--Section 442(c) of the Plant 
     Protection Act (7 U.S.C. 7772(c)) is amended by striking ``of 
     longer than 60 days''.
       (c) Subpoena Authority.--Section 423 of the Plant 
     Protection Act (7 U.S.C. 7733) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Authority To Issue.--The Secretary shall have the 
     power to subpoena the attendance and testimony of any 
     witness, the production of all evidence (including books, 
     papers, documents, electronically stored information, and 
     other tangible things that constitute or contain evidence), 
     or to require the person to whom the subpoena is directed to 
     permit the inspection of premises relating to the 
     administration or enforcement of this title or any matter 
     under investigation in connection with this title.'';
       (2) in subsection (b), by striking ``documentary''; and
       (3) in subsection (c)--
       (A) in the first sentence, by striking ``testimony of any 
     witness and the production of documentary evidence'' and 
     inserting ``testimony of any witness, the production of 
     evidence, or the inspection of premises''; and
       (B) in the second sentence, by striking ``question or to 
     produce documentary evidence'' and inserting ``question, 
     produce evidence, or permit the inspection of premises''.
       (d) Willful Violations.--Section 424(b)(1)(A) of the Plant 
     Protection Act (7 U.S.C. 7734(b)(1)(A)) is amended by 
     striking ``and $500,000 for all violations adjudicated in a

[[Page H3526]]

     single proceeding'' and inserting ``$500,000 for all 
     violations adjudicated in a single proceeding if the 
     violations do not include a willful violation, and $1,000,000 
     for all violations adjudicated in a single proceeding if the 
     violations include a willful violation''.

     SEC. 10204. REGULATIONS TO IMPROVE MANAGEMENT AND OVERSIGHT 
                   OF CERTAIN REGULATED ARTICLES.

       (a) In General.--Not later than 18 months after the date of 
     enactment of this Act, the Secretary shall--
       (1) take action on each issue identified in the document 
     entitled ``Lessons Learned and Revisions under Consideration 
     for APHIS' Biotechnology Framework'', dated October 4, 2007; 
     and
       (2) as the Secretary considers appropriate, promulgate 
     regulations to improve the management and oversight of 
     articles regulated under the Plant Protection Act (7 U.S.C. 
     7701 et seq.).
       (b) Inclusions.--In carrying out subsection (a), the 
     Secretary shall take actions that are designed to enhance--
       (1) the quality and completeness of records;
       (2) the availability of representative samples;
       (3) the maintenance of identity and control in the event of 
     an unauthorized release;
       (4) corrective actions in the event of an unauthorized 
     release;
       (5) protocols for conducting molecular forensics;
       (6) clarity in contractual agreements;
       (7) the use of the latest scientific techniques for 
     isolation and confinement distances;
       (8) standards for quality management systems and effective 
     research; and
       (9) the design of electronic permits to store documents and 
     other information relating to the permit and notification 
     processes.
       (c) Consideration.--In carrying out subsection (a), the 
     Secretary shall consider--
       (1) establishing--
       (A) a system of risk-based categories to classify each 
     regulated article;
       (B) a means to identify regulated articles (including the 
     retention of seed samples); and
       (C) standards for isolation and containment distances; and
       (2) requiring permit holders--
       (A) to maintain a positive chain of custody;
       (B) to provide for the maintenance of records;
       (C) to provide for the accounting of material;
       (D) to conduct periodic audits;
       (E) to establish an appropriate training program;
       (F) to provide contingency and corrective action plans; and
       (G) to submit reports as the Secretary considers to be 
     appropriate.

     SEC. 10205. PEST AND DISEASE REVOLVING LOAN FUND.

       (a) Definitions.--In this section:
       (1) Authorized equipment.--
       (A) In general.--The term ``authorized equipment'' means 
     any equipment necessary for the management of forest land.
       (B) Inclusions.--The term ``authorized equipment'' 
     includes--
       (i) cherry pickers;
       (ii) equipment necessary for--

       (I) the construction of staging and marshalling areas;
       (II) the planting of trees; and
       (III) the surveying of forest land;

       (iii) vehicles capable of transporting harvested trees;
       (iv) wood chippers; and
       (v) any other appropriate equipment, as determined by the 
     Secretary.
       (2) Fund.--The term ``Fund'' means the Pest and Disease 
     Revolving Loan Fund established by subsection (b).
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of Agriculture, acting through the Deputy Chief of the State 
     and Private Forestry organization.
       (b) Establishment of Fund.--There is established in the 
     Treasury of the United States a revolving fund, to be known 
     as the ``Pest and Disease Revolving Loan Fund'', consisting 
     of such amounts as are appropriated to the Fund under 
     subsection (f).
       (c) Expenditures From Fund.--
       (1) In general.--Subject to paragraph (2), on request by 
     the Secretary, the Secretary of the Treasury shall transfer 
     from the Fund to the Secretary such amounts as the Secretary 
     determines are necessary to provide loans under subsection 
     (e).
       (2) Administrative expenses.--An amount not exceeding 10 
     percent of the amounts in the Fund shall be available for 
     each fiscal year to pay the administrative expenses necessary 
     to carry out this section.
       (d) Transfers of Amounts.--
       (1) In general.--The amounts required to be transferred to 
     the Fund under this section shall be transferred at least 
     monthly from the general fund of the Treasury to the Fund on 
     the basis of estimates made by the Secretary of the Treasury.
       (2) Adjustments.--Proper adjustment shall be made in 
     amounts subsequently transferred to the extent prior 
     estimates were in excess of or less than the amounts required 
     to be transferred.
       (e) Uses of Fund.--
       (1) Loans.--
       (A) In general.--The Secretary shall use amounts in the 
     Fund to provide loans to eligible units of local government 
     to finance purchases of authorized equipment to monitor, 
     remove, dispose of, and replace infested trees that are 
     located--
       (i) on land under the jurisdiction of the eligible units of 
     local government; and
       (ii) within the borders of quarantine areas infested by 
     plant pests.
       (B) Maximum amount.--The maximum amount of a loan that may 
     be provided by the Secretary to an eligible unit of local 
     government under this subsection shall be the lesser of--
       (i) the amount that the eligible unit of local government 
     has appropriated to finance purchases of authorized equipment 
     in accordance with subparagraph (A); or
       (ii) $5,000,000.
       (C) Interest rate.--The interest rate on any loan made by 
     the Secretary under this paragraph shall be a rate equal to 2 
     percent.
       (D) Report.--Not later than 180 days after the date on 
     which an eligible unit of local government receives a loan 
     provided by the Secretary under subparagraph (A), the 
     eligible unit of local government shall submit to the 
     Secretary a report that describes each purchase made by the 
     eligible unit of local government using assistance provided 
     through the loan.
       (2) Loan repayment schedule.--
       (A) In general.--To be eligible to receive a loan from the 
     Secretary under paragraph (1), in accordance with each 
     requirement described in subparagraph (B), an eligible unit 
     of local government shall enter into an agreement with the 
     Secretary to establish a loan repayment schedule relating to 
     the repayment of the loan.
       (B) Requirements relating to loan repayment schedule.--A 
     loan repayment schedule established under subparagraph (A) 
     shall require the eligible unit of local government--
       (i) to repay to the Secretary of the Treasury, not later 
     than 1 year after the date on which the eligible unit of 
     local government receives a loan under paragraph (1), and 
     semiannually thereafter, an amount equal to the quotient 
     obtained by dividing--

       (I) the principal amount of the loan (including interest); 
     by
       (II) the total quantity of payments that the eligible unit 
     of local government is required to make during the repayment 
     period of the loan; and

       (ii) not later than 20 years after the date on which the 
     eligible unit of local government receives a loan under 
     paragraph (1), to complete repayment to the Secretary of the 
     Treasury of the loan made under this section (including 
     interest).
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Fund such sums as are necessary to 
     carry out this section.

     SEC. 10206. COOPERATIVE AGREEMENTS RELATING TO PLANT PEST AND 
                   DISEASE PREVENTION ACTIVITIES.

       Section 431 of the Plant Protection Act (7 U.S.C. 7751) is 
     amended by adding at the end the following:
       ``(f) Transfer of Cooperative Agreement Fund.--
       ``(1) In general.--A State may provide to a unit of local 
     government in the State described in paragraph (2) any cost-
     sharing assistance or financing mechanism provided to the 
     State under a cooperative agreement entered into under this 
     Act between the Secretary and the State relating to the 
     eradication, prevention, control, or suppression of plant 
     pests.
       ``(2) Requirements.--To be eligible for assistance or 
     financing under paragraph (1), a unit of local government 
     shall be--
       ``(A) engaged in any activity relating to the eradication, 
     prevention, control, or suppression of the plant pest 
     infestation covered under the cooperative agreement between 
     the Secretary and the State; and
       ``(B) capable of documenting each plant pest infestation 
     eradication, prevention, control, or suppression activity 
     generally carried out by--
       ``(i) the Department of Agriculture; or
       ``(ii) the State department of agriculture that has 
     jurisdiction over the unit of local government.''.

                    Subtitle C--Organic Agriculture

     SEC. 10301. NATIONAL ORGANIC CERTIFICATION COST-SHARE 
                   PROGRAM.

       Section 10606 of the Farm Security and Rural Investment Act 
     of 2002 (7 U.S.C. 6523) is amended--
       (1) in subsection (a), by striking ``$5,000,000 for fiscal 
     year 2002'' and inserting ``$22,000,000 for fiscal year 
     2008'';
       (2) in subsection (b)(2), by striking ``$500'' and 
     inserting ``$750''; and
       (3) by adding at the end the following:
       ``(c) Reporting.--Not later than March 1 of each year, the 
     Secretary shall submit to the Committee on Agriculture of the 
     House of Representatives and the Committee on Agriculture, 
     Nutrition, and Forestry of the Senate a report that describes 
     the requests by, disbursements to, and expenditures for each 
     State under the program during the current and previous 
     fiscal year, including the number of producers and handlers 
     served by the program in the previous fiscal year.''.

     SEC. 10302. ORGANIC PRODUCTION AND MARKET DATA INITIATIVES.

       Section 7407 of the Farm Security and Rural Investment Act 
     of 2002 (7 U.S.C. 5925c) is amended to read as follows:

     ``SEC. 7407. ORGANIC PRODUCTION AND MARKET DATA INITIATIVES.

       ``(a) In General.--The Secretary shall collect and report 
     data on the production and marketing of organic agricultural 
     products.
       ``(b) Requirements.--In carrying out subsection (a), the 
     Secretary shall, at a minimum--
       ``(1) collect and distribute comprehensive reporting of 
     prices relating to organically produced agricultural 
     products;
       ``(2) conduct surveys and analysis and publish reports 
     relating to organic production, handling, distribution, 
     retail, and trend studies (including consumer purchasing 
     patterns); and
       ``(3) develop surveys and report statistical analysis on 
     organically produced agricultural products.
       ``(c) Report.--Not later than 180 days after the date of 
     enactment of this subsection, the Secretary shall submit to 
     the Committee on Agriculture of the House of Representatives 
     and the Committee on Agriculture, Nutrition, and Forestry of 
     the Senate a report that--

[[Page H3527]]

       ``(1) describes the progress that has been made in 
     implementing this section; and
       ``(2) identifies any additional production and marketing 
     data needs.
       ``(d) Funding.--
       ``(1) In general.--Of the funds of the Commodity Credit 
     Corporation, the Secretary shall use to carry out this 
     section $5,000,000, to remain available until expended.
       ``(2) Additional funding.--In addition to funds made 
     available under paragraph (1), there are authorized to be 
     appropriated to carry out this section not more than 
     $5,000,000 for each of fiscal years 2008 through 2012, to 
     remain available until expended.''.

     SEC. 10303. NATIONAL ORGANIC PROGRAM.

       Section 2123 of the Organic Foods Production Act of 1990 (7 
     U.S.C. 6522) is amended--
       (1) by striking ``There are'' and inserting the following:
       ``(a) In General.--There are''; and
       (2) by adding at the end the following:
       ``(b) National Organic Program.--Notwithstanding any other 
     provision of law, in order to carry out activities under the 
     national organic program established under this title, there 
     are authorized to be appropriated--
       ``(1) $5,000,000 for fiscal year 2008;
       ``(2) $6,500,000 for fiscal year 2009;
       ``(3) $8,000,000 for fiscal year 2010;
       ``(4) $9,500,000 for fiscal year 2011;
       ``(5) $11,000,000 for fiscal year 2012; and
       ``(6) in addition to those amounts, such additional sums as 
     are necessary for fiscal year 2009 and each fiscal year 
     thereafter.''.

                       Subtitle D--Miscellaneous

     SEC. 10401. NATIONAL HONEY BOARD.

       Section 7(c) of the Honey Research, Promotion, and Consumer 
     Information Act (7 U.S.C. 4606(c)) is amended by adding at 
     the end the following:
       ``(12) Referendum requirement.--
       ``(A) Definition of existing honey board.--The term 
     `existing Honey Board' means the Honey Board in effect on the 
     date of enactment of this paragraph.
       ``(B) Conduct of referenda.--Notwithstanding any other 
     provision of law, subject to subparagraph (C), the order 
     providing for the establishment and operation of the existing 
     Honey Board shall continue in force, until the Secretary 
     first conducts, at the earliest practicable date, but not 
     later than 180 days after the date of enactment of this 
     paragraph, referenda on orders to establish a honey packer-
     importer board or a United States honey producer board.
       ``(C) Requirements.--In conducting referenda under 
     subparagraph (B), and in exercising fiduciary 
     responsibilities in any transition to any 1 or more successor 
     boards, the Secretary shall--
       ``(i) conduct a referendum of eligible United States honey 
     producers for the establishment of a marketing board solely 
     for United States honey producers;
       ``(ii) conduct a referendum of eligible packers, importers, 
     and handlers of honey for the establishment of a marketing 
     board for packers, importers, and handlers of honey;
       ``(iii) notwithstanding the timing of the referenda 
     required under clauses (i) and (ii) or of the establishment 
     of any 1 or more successor boards pursuant to those 
     referenda, ensure that the rights and interests of honey 
     producers, importers, packers, and handlers of honey are 
     equitably protected in any disposition of the assets, 
     facilities, intellectual property, and programs of the 
     existing Honey Board and in the transition to any 1 or more 
     new successor marketing boards;
       ``(iv) ensure that the existing Honey Board continues in 
     operation until such time as the Secretary determines that--

       ``(I) any 1 or more successor boards, if approved, are 
     operational; and
       ``(II) the interests of producers, importers, packers, and 
     handlers of honey can be equitably protected during any 
     remaining period in which a referendum on a successor board 
     or the establishment of such a board is pending; and

       ``(v) discontinue collection of assessments under the order 
     establishing the existing Honey Board on the date the 
     Secretary requires that collections commence pursuant to an 
     order approved in a referendum by eligible producers or 
     processors and importers of honey.
       ``(D) Honey board referendum.--If 1 or more orders are 
     approved pursuant to paragraph (C)--
       ``(i) the Secretary shall not be required to conduct a 
     continuation referendum on the order in existence on the date 
     of enactment of this paragraph; and
       ``(ii) that order shall be terminated pursuant to the 
     provisions of the order.''.

     SEC. 10402. IDENTIFICATION OF HONEY.

       (a) In General.--Section 203(h) of the Agricultural 
     Marketing Act of 1946 (7 U.S.C. 1622(h)) is amended--
       (1) by designating the first through sixth sentences as 
     paragraphs (1), (2)(A), (2)(B), (3), (4), and (5), 
     respectively; and
       (2) by adding at the end the following:
       ``(6) Identification of honey.--
       ``(A) In general.--The use of a label or advertising 
     material on, or in conjunction with, packaged honey that 
     bears any official certificate of quality, grade mark or 
     statement, continuous inspection mark or statement, sampling 
     mark or statement, or any combination of the certificates, 
     marks, or statements of the Department of Agriculture is 
     hereby prohibited under this Act unless there appears legibly 
     and permanently in close proximity (such as on the same 
     side(s) or surface(s)) to the certificate, mark, or 
     statement, and in at least a comparable size, the 1 or more 
     names of the 1 or more countries of origin of the lot or 
     container of honey, preceded by the words `Product of' or 
     other words of similar meaning.
       ``(B) Violation.--A violation of the requirements of 
     subparagraph (A) may be deemed by the Secretary to be 
     sufficient cause for debarment from the benefits of this Act 
     only with respect to honey.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     take effect on the date that is 1 year after the date of 
     enactment of this Act.

     SEC. 10403. GRANT PROGRAM TO IMPROVE MOVEMENT OF SPECIALTY 
                   CROPS.

       (a) Grants Authorized.--The Secretary may make grants under 
     this section to an eligible entity described in subsection 
     (b)--
       (1) to improve the cost-effective movement of specialty 
     crops to local, regional, national, and international 
     markets; and
       (2) to address regional intermodal transportation 
     deficiencies that adversely affect the movement of specialty 
     crops to markets inside or outside the United States.
       (b) Eligible Grant Recipients.--Grants may be made under 
     this section to any of, or any combination of:
       (1) State and local governments.
       (2) Grower cooperatives.
       (3) National, State, or regional organizations of 
     producers, shippers, or carriers.
       (4) Other entities as determined to be appropriate by the 
     Secretary.
       (c) Matching Funds.--The recipient of a grant under this 
     section shall contribute an amount of non-Federal funds 
     toward the project for which the grant is provided that is at 
     least equal to the amount of grant funds received by the 
     recipient under this section.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section such sums as are 
     necessary for each of fiscal years 2008 through 2012.

     SEC. 10404. MARKET LOSS ASSISTANCE FOR ASPARAGUS PRODUCERS.

       (a) In General.--As soon as practicable after the date of 
     enactment of this Act, the Secretary shall make payments to 
     producers of the 2007 crop of asparagus for market loss 
     resulting from imports during the 2004 through 2007 crop 
     years.
       (b) Payment Rate.--The payment rate for a payment under 
     this section shall be based on the reduction in revenue 
     received by asparagus producers associated with imports 
     during the 2004 through 2007 crop years.
       (c) Payment Quantity.--The payment quantity for asparagus 
     for which the producers on a farm are eligible for payments 
     under this section shall be equal to the average quantity of 
     the 2003 crop of asparagus produced by producers on the farm.
       (d) Funding.--
       (1) In general.--Subject to paragraph (2), the Secretary 
     shall make available $15,000,000 of the funds of the 
     Commodity Credit Corporation to carry out a program to 
     provide market loss payments to producers of asparagus under 
     this section.
       (2) Allocation.--Of the amount made available under 
     paragraph (1), the Secretary shall use--
       (A) $7,500,000 to make payments to producers of asparagus 
     for the fresh market; and
       (B) $7,500,000 to make payments to producers of asparagus 
     for the processed or frozen market.

                          TITLE XI--LIVESTOCK

     SEC. 11001. LIVESTOCK MANDATORY REPORTING.

       (a) Web Site Improvements and User Education.--
       (1) In general.--Section 251(g) of the Agricultural 
     Marketing Act of 1946 (7 U.S.C. 1636(g)) is amended to read 
     as follows:
       ``(g) Electronic Reporting and Publishing.--
       ``(1) In general.--The Secretary shall, to the maximum 
     extent practicable, provide for the reporting and publishing 
     of the information required under this subtitle by electronic 
     means.
       ``(2) Improvements and education.--
       ``(A) Enhanced electronic publishing.--The Secretary shall 
     develop and implement an enhanced system of electronic 
     publishing to disseminate information collected pursuant to 
     this subtitle. Such system shall--
       ``(i) present information in a format that can be readily 
     understood by producers, packers, and other market 
     participants;
       ``(ii) adhere to the publication deadlines in this 
     subtitle;
       ``(iii) present information in charts and graphs, as 
     appropriate;
       ``(iv) present comparative information for prior reporting 
     periods, as the Secretary considers appropriate; and
       ``(v) be updated as soon as practicable after information 
     is reported to the Secretary.
       ``(B) Education.--The Secretary shall carry out a market 
     news education program to educate the public and persons in 
     the livestock and meat industries about--
       ``(i) usage of the system developed under subparagraph (A); 
     and
       ``(ii) interpreting and understanding information collected 
     and disseminated through such system.''.
       (2) Applicability.--
       (A) Enhanced reporting.--The Secretary of Agriculture shall 
     develop and implement the system required under paragraph 
     (2)(A) of section 251(g) of the Agricultural Marketing Act of 
     1946 (7 U.S.C. 1636(g)), as amended by paragraph (1), not 
     later than one year after the date on which the Secretary 
     determines sufficient funds have been appropriated pursuant 
     to subsection (c).
       (B) Current system.--Notwithstanding the amendment made by 
     paragraph (1), the Secretary shall continue to use the 
     information format for disseminating information under 
     subtitle B of the Agricultural Marketing Act of 1946 (7 
     U.S.C. 1621 et seq.) in effect on the date of the enactment 
     of this Act at least until the date that is two years after 
     the date on which the Secretary makes the determination 
     referred to in subparagraph (A).

[[Page H3528]]

       (b) Study and Report.--
       (1) Study.--The Secretary shall conduct a study on the 
     effects of requiring packer processing plants to report to 
     the Secretary information on wholesale pork cuts (including 
     price and volume information), including--
       (A) the positive or negative economic effects on producers 
     and consumers; and
       (B) the effects of a confidentiality requirement on 
     mandatory reporting.
       (2) Information.--During the period preceding the 
     submission of the report under paragraph (3), the Secretary 
     may collect, and each packer processing plant shall provide, 
     such information as is necessary to enable the Secretary to 
     conduct the study required under paragraph (1).
       (3) Report.--Not later than one year after the date of the 
     enactment of this Act, the Secretary shall submit to the 
     Committee on Agriculture of the House of Representatives and 
     the Committee on Agriculture, Nutrition, and Forestry of the 
     Senate a report on the results of the study conducted under 
     paragraph (1).
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to carry out 
     this section.

     SEC. 11002. COUNTRY OF ORIGIN LABELING.

       Subtitle D of the Agricultural Marketing Act of 1946 (7 
     U.S.C. 1638 et seq.) is amended--
       (1) in section 281(2)(A)--
       (A) in clause (v), by striking ``and'';
       (B) in clause (vi), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(vii) meat produced from goats;
       ``(viii) chicken, in whole and in part;
       ``(ix) ginseng;
       ``(x) pecans; and
       ``(xi) macadamia nuts.'';
       (2) in section 282--
       (A) in subsection (a), by striking paragraphs (2) and (3) 
     and inserting the following:
       ``(2) Designation of country of origin for beef, lamb, 
     pork, chicken, and goat meat.--
       ``(A) United states country of origin.--A retailer of a 
     covered commodity that is beef, lamb, pork, chicken, or goat 
     meat may designate the covered commodity as exclusively 
     having a United States country of origin only if the covered 
     commodity is derived from an animal that was--
       ``(i) exclusively born, raised, and slaughtered in the 
     United States;
       ``(ii) born and raised in Alaska or Hawaii and transported 
     for a period of not more than 60 days through Canada to the 
     United States and slaughtered in the United States; or
       ``(iii) present in the United States on or before July 15, 
     2008, and once present in the United States, remained 
     continuously in the United States.
       ``(B) Multiple countries of origin.--
       ``(i) In general.--A retailer of a covered commodity that 
     is beef, lamb, pork, chicken, or goat meat that is derived 
     from an animal that is--

       ``(I) not exclusively born, raised, and slaughtered in the 
     United States,
       ``(II) born, raised, or slaughtered in the United States, 
     and
       ``(III) not imported into the United States for immediate 
     slaughter,

     may designate the country of origin of such covered commodity 
     as all of the countries in which the animal may have been 
     born, raised, or slaughtered.
       ``(ii) Relation to general requirement.--Nothing in this 
     subparagraph alters the mandatory requirement to inform 
     consumers of the country of origin of covered commodities 
     under paragraph (1).
       ``(C) Imported for immediate slaughter.--A retailer of a 
     covered commodity that is beef, lamb, pork, chicken, or goat 
     meat that is derived from an animal that is imported into the 
     United States for immediate slaughter shall designate the 
     origin of such covered commodity as--
       ``(i) the country from which the animal was imported; and
       ``(ii) the United States.
       ``(D) Foreign country of origin.--A retailer of a covered 
     commodity that is beef, lamb, pork, chicken, or goat meat 
     that is derived from an animal that is not born, raised, or 
     slaughtered in the United States shall designate a country 
     other than the United States as the country of origin of such 
     commodity.
       ``(E) Ground beef, pork, lamb, chicken, and goat.--The 
     notice of country of origin for ground beef, ground pork, 
     ground lamb, ground chicken, or ground goat shall include--
       ``(i) a list of all countries of origin of such ground 
     beef, ground pork, ground lamb, ground chicken, or ground 
     goat; or
       ``(ii) a list of all reasonably possible countries of 
     origin of such ground beef, ground pork, ground lamb, ground 
     chicken, or ground goat.
       ``(3) Designation of country of origin for fish.--
       ``(A) In general.--A retailer of a covered commodity that 
     is farm-raised fish or wild fish may designate the covered 
     commodity as having a United States country of origin only if 
     the covered commodity--
       ``(i) in the case of farm-raised fish, is hatched, raised, 
     harvested, and processed in the United States; and
       ``(ii) in the case of wild fish, is--

       ``(I) harvested in the United States, a territory of the 
     United States, or a State, or by a vessel that is documented 
     under chapter 121 of title 46, United States Code, or 
     registered in the United States; and
       ``(II) processed in the United States, a territory of the 
     United States, or a State, including the waters thereof, or 
     aboard a vessel that is documented under chapter 121 of title 
     46, United States Code, or registered in the United States.

       ``(B) Designation of wild fish and farm-raised fish.--The 
     notice of country of origin for wild fish and farm-raised 
     fish shall distinguish between wild fish and farm-raised 
     fish.
       ``(4) Designation of country of origin for perishable 
     agricultural commodities, ginseng, peanuts, pecans, and 
     macadamia nuts.--
       ``(A) In general.--A retailer of a covered commodity that 
     is a perishable agricultural commodity, ginseng, peanut, 
     pecan, or macadamia nut may designate the covered commodity 
     as having a United States country of origin only if the 
     covered commodity is exclusively produced in the United 
     States.
       ``(B) State, region, locality of the united states.--With 
     respect to a covered commodity that is a perishable 
     agricultural commodity, ginseng, peanut, pecan, or macadamia 
     nut produced exclusively in the United States, designation by 
     a retailer of the State, region, or locality of the United 
     States where such commodity was produced shall be sufficient 
     to identify the United States as the country of origin.''; 
     and
       (B) by striking subsection (d) and inserting the following:
       ``(d) Audit Verification System.--
       ``(1) In general.--The Secretary may conduct an audit of 
     any person that prepares, stores, handles, or distributes a 
     covered commodity for retail sale to verify compliance with 
     this subtitle (including the regulations promulgated under 
     section 284(b)).
       ``(2) Record requirements.--
       ``(A) In general.--A person subject to an audit under 
     paragraph (1) shall provide the Secretary with verification 
     of the country of origin of covered commodities. Records 
     maintained in the course of the normal conduct of the 
     business of such person, including animal health papers, 
     import or customs documents, or producer affidavits, may 
     serve as such verification.
       ``(B) Prohibition on requirement of additional records.--
     The Secretary may not require a person that prepares, stores, 
     handles, or distributes a covered commodity to maintain a 
     record of the country of origin of a covered commodity other 
     than those maintained in the course of the normal conduct of 
     the business of such person.''; and
       (3) in section 283--
       (A) by striking subsections (a) and (c);
       (B) by redesignating subsection (b) as subsection (a);
       (C) in subsection (a) (as so redesignated), by striking 
     ``retailer'' and inserting ``retailer or person engaged in 
     the business of supplying a covered commodity to a 
     retailer''; and
       (D) by adding at the end the following new subsection:
       ``(b) Fines.--If, on completion of the 30-day period 
     described in subsection (a)(2), the Secretary determines that 
     the retailer or person engaged in the business of supplying a 
     covered commodity to a retailer has--
       ``(1) not made a good faith effort to comply with section 
     282, and
       ``(2) continues to willfully violate section 282 with 
     respect to the violation about which the retailer or person 
     received notification under subsection (a)(1),

     after providing notice and an opportunity for a hearing 
     before the Secretary with respect to the violation, the 
     Secretary may fine the retailer or person in an amount of not 
     more than $1,000 for each violation.''.

     SEC. 11003. AGRICULTURAL FAIR PRACTICES ACT OF 1967 
                   DEFINITIONS.

       Section 3 of the Agricultural Fair Practices Act of 1967 (7 
     U.S.C. 2302) is amended--
       (1) by striking ``When used in this Act--'' and inserting 
     ``In this Act:'';
       (2) in subsection (a)--
       (A) by redesignating paragraphs (1) through (4) as clauses 
     (i) through (iv), respectively; and
       (B) in clause (iv) (as so redesignated), by striking 
     ``clause (1), (2), or (3) of this paragraph'' and inserting 
     ``clause (i), (ii), or (iii)'';
       (3) by striking subsection (d);
       (4) by redesignating subsections (a), (b), (c), and (e) as 
     paragraphs (3), (4), (2), (1), respectively, indenting 
     appropriately, and moving those paragraphs so as to appear in 
     numerical order;
       (5) in each paragraph (as so redesignated) that does not 
     have a heading, by inserting a heading, in the same style as 
     the heading in the amendment made by paragraph (6), the text 
     of which is comprised of the term defined in the paragraph;
       (6) in paragraph (2) (as so redesignated)--
       (A) by striking ``The term `association of producers' 
     means'' and inserting the following:
       ``(2) Association of producers.--
       ``(A) In general.--The term `association of producers' 
     means''; and
       (B) by adding at the end the following:
       ``(B) Inclusion.--The term `association of producers' 
     includes an organization whose membership is exclusively 
     limited to agricultural producers and dedicated to promoting 
     the common interest and general welfare of producers of 
     agricultural products.''; and
       (7) in paragraph (3) (as so redesignated)--
       (A) by striking ``The term'' and inserting the following:
       ``(3) Handler.--
       ``(A) In general.--The term''; and
       (B) by inserting after clause (iv) of subparagraph (A) (as 
     redesignated by subparagraph (A) and paragraph (2)) the 
     following:
       ``(B) Exclusion.--The term `handler' does not include a 
     person, other than a packer (as defined in section 201 of the 
     Packers and Stockyards Act, 1921 (7 U.S.C. 191)), that 
     provides custom feeding services for a producer.''.

     SEC. 11004. ANNUAL REPORT.

       (a) In General.--The Packers and Stockyards Act, 1921, is 
     amended--
       (1) by redesignating section 416 (7 U.S.C. 229) as section 
     417; and
       (2) by inserting after section 415 (7 U.S.C. 228d) the 
     following:

     ``SEC. 416. ANNUAL REPORT.

       ``(a) In General.--Not later than March 1 of each year, the 
     Secretary shall submit to Congress and make publicly 
     available a report that--

[[Page H3529]]

       ``(1) states, for the preceding year, separately for 
     livestock and poultry and separately by enforcement area 
     category (financial, trade practice, or competitive acts and 
     practices), with respect to investigations into possible 
     violations of this Act--
       ``(A) the number of investigations opened;
       ``(B) the number of investigations that were closed or 
     settled without a referral to the General Counsel of the 
     Department of Agriculture;
       ``(C) for investigations described in subparagraph (B), the 
     length of time from initiation of the investigation to when 
     the investigation was closed or settled without the filing of 
     an enforcement complaint;
       ``(D) the number of investigations that resulted in 
     referral to the General Counsel of the Department of 
     Agriculture for further action, the number of such referrals 
     resolved without administrative enforcement action, and the 
     number of enforcement actions filed by the General Counsel;
       ``(E) for referrals to the General Counsel that resulted in 
     an administrative enforcement action being filed, the length 
     of time from the referral to the filing of the administrative 
     action;
       ``(F) for referrals to the General Counsel that resulted in 
     an administrative enforcement action being filed, the length 
     of time from filing to resolution of the administrative 
     enforcement action;
       ``(G) the number of investigations that resulted in 
     referral to the Department of Justice for further action, and 
     the number of civil enforcement actions filed by the 
     Department of Justice on behalf of the Secretary pursuant to 
     such a referral;
       ``(H) for referrals that resulted in a civil enforcement 
     action being filed by the Department of Justice, the length 
     of time from the referral to the filing of the enforcement 
     action;
       ``(I) for referrals that resulted in a civil enforcement 
     action being filed by the Department of Justice, the length 
     of time from the filing of the enforcement action to 
     resolution; and
       ``(J) the average civil penalty imposed in administrative 
     or civil enforcement actions for violations of this Act, and 
     the total amount of civil penalties imposed in all such 
     enforcement actions; and
       ``(2) includes any other additional information the 
     Secretary considers important to include in the annual 
     report.
       ``(b) Format of Information Provided.--For subparagraphs 
     (C), (E), (F), and (H) of subsection (a)(1), the Secretary 
     may, if appropriate due to the number of complaints for a 
     given category, provide summary statistics (including range, 
     maximum, minimum, mean, and average times) and graphical 
     representations.''.
       (b) Sunset.--Effective September 30, 2012, section 416 of 
     the Packers and Stockyards Act, 1921, as added by subsection 
     (a)(2), is repealed.

     SEC. 11005. PRODUCTION CONTRACTS.

       Title II of the Packers and Stockyards Act, 1921 (7 U.S.C. 
     198 et seq.) is amended by adding at the end the following:

     ``SEC. 208. PRODUCTION CONTRACTS.

       ``(a) Right of Contract Producers to Cancel Production 
     Contracts.--
       ``(1) In general.--A poultry grower or swine production 
     contract grower may cancel a poultry growing arrangement or 
     swine production contract by mailing a cancellation notice to 
     the live poultry dealer or swine contractor not later than 
     the later of--
       ``(A) the date that is 3 business days after the date on 
     which the poultry growing arrangement or swine production 
     contract is executed; or
       ``(B) any cancellation date specified in the poultry 
     growing arrangement or swine production contract.
       ``(2) Disclosure.--A poultry growing arrangement or swine 
     production contract shall clearly disclose--
       ``(A) the right of the poultry grower or swine production 
     contract grower to cancel the poultry growing arrangement or 
     swine production contract;
       ``(B) the method by which the poultry grower or swine 
     production contract grower may cancel the poultry growing 
     arrangement or swine production contract; and
       ``(C) the deadline for canceling the poultry growing 
     arrangement or swine production contract.
       ``(b) Required Disclosure of Additional Capital Investments 
     in Production Contracts.--
       ``(1) In general.--A poultry growing arrangement or swine 
     production contract shall contain on the first page a 
     statement identified as `Additional Capital Investments 
     Disclosure Statement', which shall conspicuously state that 
     additional large capital investments may be required of the 
     poultry grower or swine production contract grower during the 
     term of the poultry growing arrangement or swine production 
     contract.
       ``(2) Application.--Paragraph (1) shall apply to any 
     poultry growing arrangement or swine production contract 
     entered into, amended, altered, modified, renewed, or 
     extended after the date of the enactment of this section.

     ``SEC. 209. CHOICE OF LAW AND VENUE.

       ``(a) Location of Forum.--The forum for resolving any 
     dispute among the parties to a poultry growing arrangement or 
     swine production or marketing contract that arises out of the 
     arrangement or contract shall be located in the Federal 
     judicial district in which the principle part of the 
     performance takes place under the arrangement or contract.
       ``(b) Choice of Law.--A poultry growing arrangement or 
     swine production or marketing contract may specify which 
     State's law is to apply to issues governed by State law in 
     any dispute arising out of the arrangement or contract, 
     except to the extent that doing so is prohibited by the law 
     of the State in which the principal part of the performance 
     takes place under the arrangement or contract.

     ``SEC. 210. ARBITRATION.

       ``(a) In General.--Any livestock or poultry contract that 
     contains a provision requiring the use of arbitration to 
     resolve any controversy that may arise under the contract 
     shall contain a provision that allows a producer or grower, 
     prior to entering the contract to decline to be bound by the 
     arbitration provision.
       ``(b) Disclosure.--Any livestock or poultry contract that 
     contains a provision requiring the use of arbitration shall 
     contain terms that conspicuously disclose the right of the 
     contract producer or grower, prior to entering the contract, 
     to decline the requirement to use arbitration to resolve any 
     controversy that may arise under the livestock or poultry 
     contract.
       ``(c) Dispute Resolution.--Any contract producer or grower 
     that declines a requirement of arbitration pursuant to 
     subsection (b) has the right, to nonetheless seek to resolve 
     any controversy that may arise under the livestock or poultry 
     contract, if, after the controversy arises, both parties 
     consent in writing to use arbitration to settle the 
     controversy.
       ``(d) Application.--Subsections (a) (b) and (c) shall apply 
     to any contract entered into, amended, altered, modified, 
     renewed, or extended after the date of the enactment of the 
     Food, Conservation, and Energy Act of 2008.
       ``(e) Unlawful Practice.--Any action by or on behalf of a 
     packer, swine contractor, or live poultry dealer that 
     violates this section (including any action that has the 
     intent or effect of limiting the ability of a producer or 
     grower to freely make a choice described in subsection (b)) 
     is an unlawful practice under this Act.
       ``(f) Regulations.--The Secretary shall promulgate 
     regulations to--
       ``(1) carry out this section; and
       ``(2) establish criteria that the Secretary will consider 
     in determining whether the arbitration process provided in a 
     contract provides a meaningful opportunity for the grower or 
     producer to participate fully in the arbitration process.''.

     SEC. 11006. REGULATIONS.

       As soon as practicable, but not later than 2 years after 
     the date of the enactment of this Act, the Secretary of 
     Agriculture shall promulgate regulations with respect to the 
     Packers and Stockyards Act, 1921 (7 U.S.C. 181 et seq.) to 
     establish criteria that the Secretary will consider in 
     determining--
       (1) whether an undue or unreasonable preference or 
     advantage has occurred in violation of such Act;
       (2) whether a live poultry dealer has provided reasonable 
     notice to poultry growers of any suspension of the delivery 
     of birds under a poultry growing arrangement;
       (3) when a requirement of additional capital investments 
     over the life of a poultry growing arrangement or swine 
     production contract constitutes a violation of such Act; and
       (4) if a live poultry dealer or swine contractor has 
     provided a reasonable period of time for a poultry grower or 
     a swine production contract grower to remedy a breach of 
     contract that could lead to termination of the poultry 
     growing arrangement or swine production contract.

     SEC. 11007. SENSE OF CONGRESS REGARDING PSEUDORABIES 
                   ERADICATION PROGRAM.

       It is the sense of Congress that--
       (1) the Secretary of Agriculture should recognize the 
     threat feral swine pose to the domestic swine population and 
     the entire livestock industry;
       (2) keeping the United States commercial swine herd free of 
     pseudorabies is essential to maintaining and growing pork 
     export markets;
       (3) the establishment and continued support of a swine 
     surveillance system will assist the swine industry in the 
     monitoring, surveillance, and eradication of pseudorabies; 
     and
       (4) pseudorabies eradication is a high priority that the 
     Secretary should carry out under the authorities of the 
     Animal Health Protection Act.

     SEC. 11008. SENSE OF CONGRESS REGARDING THE CATTLE FEVER TICK 
                   ERADICATION PROGRAM.

       It is the sense of Congress that--
       (1) the cattle fever tick and the southern cattle tick are 
     vectors of the causal agent of babesiosis, a severe and often 
     fatal disease of cattle; and
       (2) implementing a national strategic plan for the cattle 
     fever tick eradication program is a high priority that the 
     Secretary of Agriculture should carry out in order to--
       (A) prevent the entry of cattle fever ticks into the United 
     States;
       (B) enhance and maintain an effective surveillance program 
     to rapidly detect any cattle fever tick incursions; and
       (C) research, identify, and procure the tools and knowledge 
     necessary to prevent and eradicate cattle fever ticks in the 
     United States.

     SEC. 11009. NATIONAL SHEEP INDUSTRY IMPROVEMENT CENTER.

       (a) Funding.--Section 375(e)(6) of the Consolidated Farm 
     and Rural Development Act (7 U.S.C. 2008j(e)(6)) is amended 
     by striking subparagraphs (B) and (C) and inserting the 
     following:
       ``(B) Mandatory funding.--Of the funds of the Commodity 
     Credit Corporation, the Secretary shall use to carry out this 
     section $1,000,000 for fiscal year 2008, to remain available 
     until expended.
       ``(C) Authorization of appropriations.--There is authorized 
     to be appropriated to the Secretary to carry out this section 
     $10,000,000 for each of fiscal years 2008 through 2012.''.
       (b) Repeal of Requirement To Privatize Revolving Fund.--
       (1) In general.--Section 375 of the Consolidated Farm and 
     Rural Development Act (7 U.S.C. 2008j) is amended by striking 
     subsection (j).
       (2) Effective date.--The amendment made by paragraph (1) 
     takes effect on May 1, 2007.

     SEC. 11010. TRICHINAE CERTIFICATION PROGRAM.

       (a) Voluntary Trichinae Certification.--

[[Page H3530]]

       (1) Establishment.--Not later than 90 days after the date 
     of the enactment of this Act, the Secretary of Agriculture 
     shall establish a voluntary trichinae certification program. 
     Such program shall include the facilitation of the export of 
     pork products and certification services related to such 
     products.
       (2) Regulations.--The Secretary shall issue final 
     regulations to implement the program under paragraph (1) not 
     later than 90 days after the date of the enactment of this 
     Act.
       (3) Report.--If final regulations are not published in 
     accordance with paragraph (2) within 90 days of the date of 
     the enactment of this Act, the Secretary shall submit to the 
     Committee on Agriculture of the House of Representatives and 
     the Committee on Agriculture, Nutrition, and Forestry of the 
     Senate a report containing--
       (A) an explanation of why the final regulations have not 
     been issued in accordance with paragraph (2); and
       (B) the date on which the Secretary expects to issue such 
     final regulations.
       (b) Funding.--Subject to the availability of appropriations 
     under subsection (d)(1)(A) of section 10405 of the Animal 
     Health Protection Act (7 U.S.C. 8304), as added by subsection 
     (c), the Secretary shall use not less than $6,200,000 of the 
     funds made available under such subsection to carry out 
     subsection (a).
       (c) Authorization of Appropriations.--Section 10405 of the 
     Animal Health Protection Act (7 U.S.C. 8304) is amended by 
     adding at the end the following new subsection:
       ``(d) Authorization of Appropriations.--
       ``(1) In general.--There is authorized to be appropriated--
       ``(A) $1,500,000 for each of fiscal years 2008 through 2012 
     to carry out section 11010 of the Food, Conservation, and 
     Energy Act of 2008; and
       ``(B) such sums as may be necessary for each of fiscal 
     years 2008 through 2012 to carry out this section.
       ``(2) Availability.--Funds appropriated under paragraph (1) 
     shall remain available until expended.''.

     SEC. 11011. LOW PATHOGENIC DISEASES.

       The Animal Health Protection Act (7 U.S.C. 8301 et seq.) is 
     amended--
       (1) in section 10407(d)(2)(C) (7 U.S.C. 8306(d)(2)(C)), by 
     striking ``of longer than 60 days'';
       (2) in section 10409(b) (7 U.S.C. 8308(b))--
       (A) by redesignating paragraph (2) as paragraph (3);
       (B) by inserting after paragraph (1) the following new 
     paragraph:
       ``(2) Specific cooperative programs.--The Secretary shall 
     compensate industry participants and State agencies that 
     cooperate with the Secretary in carrying out operations and 
     measures under subsection (a) for 100 percent of eligible 
     costs relating to cooperative programs involving Federal, 
     State, and industry participants to control diseases of low 
     pathogenicity in accordance with regulations issued by the 
     Secretary.''; and
       (C) in paragraph (3) (as so redesignated), by striking ``of 
     longer than 60 days''; and
       (3) in section 10417(b)(3) (7 U.S.C. 8316(b)(3)), by 
     striking ``of longer than 60 days''.

     SEC. 11012. ANIMAL PROTECTION.

       (a) Willful Violations.--Section 10414(b)(1)(A) of the 
     Animal Health Protection Act (7 U.S.C. 8316(b)(1)(A)) is 
     amended by striking clause (iii) and inserting the following:
       ``(iii) for all violations adjudicated in a single 
     proceeding--

       ``(I) $500,000 if the violations do not include a willful 
     violation; or
       ``(II) $1,000,000 if the violations include 1 or more 
     willful violations.''.

       (b) Subpoena Authority.--Section 10415(a)(2) of the Animal 
     Health Protection Act (7 U.S.C. 8314) is amended
       (1) by striking subparagraph (A) and inserting the 
     following:
       ``(A) In general.--The Secretary shall have the power to 
     subpoena the attendance and testimony of any witness, the 
     production of all evidence (including books, papers, 
     documents, electronically stored information, and other 
     tangible things that constitute or contain evidence), or to 
     require the person to whom the subpoena is directed to permit 
     the inspection of premises relating to the administration or 
     enforcement of this title or any matter under investigation 
     in connection with this title.'';
       (2) in subparagraph (B), by striking ``documentary''; and
       (3) in subparagraph (C)--
       (A) in clause (i), by striking ``testimony of any witness 
     and the production of documentary evidence'' and inserting 
     ``testimony of any witness, the production of evidence, or 
     the inspection of premises''; and
       (B) in clause (ii), by striking ``question or to produce 
     documentary evidence'' and inserting ``question, produce 
     evidence, or permit the inspection of premises''.

     SEC. 11013. NATIONAL AQUATIC ANIMAL HEALTH PLAN.

       (a) In General.--The Secretary of Agriculture may enter 
     into a cooperative agreement with an eligible entity to carry 
     out a project under a national aquatic animal health plan 
     under the authority of the Secretary under section 10411 of 
     the Animal Health Protection Act (7 U.S.C. 8310) for the 
     purpose of detecting, controlling, or eradicating diseases of 
     aquaculture species and promoting species-specific best 
     management practices.
       (b) Cooperative Agreements Between Eligible Entities and 
     the Secretary.--
       (1) Duties.--As a condition of entering into a cooperative 
     agreement with the Secretary under this section, an eligible 
     entity shall agree to--
       (A) assume responsibility for the non-Federal share of the 
     cost of carrying out the project under the national aquatic 
     health plan, as determined by the Secretary in accordance 
     with paragraph (2); and
       (B) act in accordance with applicable disease and species 
     specific best management practices relating to activities to 
     be carried out under such project.
       (2) Non-federal share.--The Secretary shall determine the 
     non-Federal share of the cost of carrying out a project under 
     the national aquatic health plan on a case-by-case basis for 
     each such project. Such non-Federal share may be provided in 
     cash or in-kind.
       (c) Applicability of Other Laws.--In carrying out this 
     section, the Secretary may make use of the authorities under 
     the Animal Health Protection Act (7 U.S.C. 8301 et seq.), 
     including the authority to carry out operations and measures 
     to detect, control, and eradicate pests and diseases and the 
     authority to pay claims arising out of the destruction of any 
     animal, article, or means of conveyance.
       (d) Authorization of Appropriations.--There is authorized 
     to be appropriated such sums as may be necessary to carry out 
     this section for each of fiscal years 2008 through 2012.
       (e) Eligible Entity Defined.--In this section, the term 
     ``eligible entity'' means a State, a political subdivision of 
     a State, Indian tribe, or other appropriate entity, as 
     determined by the Secretary of Agriculture.

     SEC. 11014. STUDY ON BIOENERGY OPERATIONS.

       (a) Study.--The Secretary of Agriculture shall conduct a 
     study to evaluate the role of animal manure as a source of 
     fertilizer and its potential additional uses. Such study 
     shall include--
       (1) a determination of the extent to which animal manure is 
     utilized as fertilizer in agricultural operations by type 
     (including species and agronomic practices employed) and 
     size;
       (2) an evaluation of the potential impact on consumers and 
     on agricultural operations (by size) resulting from 
     limitations being placed on the utilization of animal manure 
     as fertilizer; and
       (3) an evaluation of the effects on agriculture production 
     contributable to the increased competition for animal manure 
     use due to bioenergy production, including as a feedstock or 
     a replacement for fossil fuels.
       (b) Report.--Not later than one year after the date of the 
     enactment of this Act, the Secretary shall submit to the 
     Committee on Agriculture of the House of Representatives and 
     the Committee on Agriculture, Nutrition, and Forestry of the 
     Senate the results of the study conducted under subsection 
     (a).

     SEC. 11015. INTERSTATE SHIPMENT OF MEAT AND POULTRY INSPECTED 
                   BY FEDERAL AND STATE AGENCIES FOR CERTAIN SMALL 
                   ESTABLISHMENTS.

       (a) Meat and Meat Products.--The Federal Meat Inspection 
     Act (21 U.S.C. 601 et seq.) is amended by adding at the end 
     the following:

          ``TITLE V--INSPECTIONS BY FEDERAL AND STATE AGENCIES

     ``SEC. 501. INTERSTATE SHIPMENT OF MEAT INSPECTED BY FEDERAL 
                   AND STATE AGENCIES FOR CERTAIN SMALL 
                   ESTABLISHMENTS.

       ``(a) Definitions.--
       ``(1) Appropriate state agency.--The term `appropriate 
     State agency' means a State agency described in section 
     301(b).
       ``(2) Designated personnel.--The term `designated 
     personnel' means inspection personnel of a State agency that 
     have undergone all necessary inspection training and 
     certification to assist the Secretary in the administration 
     and enforcement of this Act, including rules and regulations 
     issued under this Act.
       ``(3) Eligible establishment.--The term `eligible 
     establishment' means an establishment that is in compliance 
     with--
       ``(A) the State inspection program of the State in which 
     the establishment is located; and
       ``(B) this Act, including rules and regulations issued 
     under this Act.
       ``(4) Meat item.--The term `meat item' means--
       ``(A) a portion of meat; and
       ``(B) a meat food product.
       ``(5) Selected establishment.--The term `selected 
     establishment' means an eligible establishment that is 
     selected by the Secretary, in coordination with the 
     appropriate State agency of the State in which the eligible 
     establishment is located, under subsection (b) to ship 
     carcasses, portions of carcasses, and meat items in 
     interstate commerce.
       ``(b) Authority of Secretary To Allow Shipments.--
       ``(1) In general.--Subject to paragraph (2), the Secretary, 
     in coordination with the appropriate State agency of the 
     State in which an establishment is located, may select the 
     establishment to ship carcasses, portions of carcasses, and 
     meat items in interstate commerce, and place on each carcass, 
     portion of a carcass, and meat item shipped in interstate 
     commerce a Federal mark, stamp, tag, or label of inspection, 
     if--
       ``(A) the carcass, portion of carcass, or meat item 
     qualifies for the mark, stamp, tag, or label of inspection 
     under the requirements of this Act;
       ``(B) the establishment is an eligible establishment; and
       ``(C) inspection services for the establishment are 
     provided by designated personnel.
       ``(2) Prohibited establishments.--In carrying out paragraph 
     (1), the Secretary, in coordination with an appropriate State 
     agency, shall not select an establishment that--
       ``(A) on average, employs more than 25 employees (including 
     supervisory and nonsupervisory employees), as defined by the 
     Secretary;
       ``(B) as of the date of the enactment of this section, 
     ships in interstate commerce carcasses, portions of 
     carcasses, or meat items that are inspected by the Secretary 
     in accordance with this Act;
       ``(C)(i) is a Federal establishment;
       ``(ii) was a Federal establishment that was reorganized on 
     a later date under the same name

[[Page H3531]]

     or a different name or person by the person, firm, or 
     corporation that controlled the establishment as of the date 
     of the enactment of this section; or
       ``(iii) was a State establishment as of the date of the 
     enactment of this section that--
       ``(I) as of the date of the enactment of this section, 
     employed more than 25 employees; and
       ``(II) was reorganized on a later date by the person, firm, 
     or corporation that controlled the establishment as of the 
     date of the enactment of this section;
       ``(D) is in violation of this Act;
       ``(E) is located in a State that does not have a State 
     inspection program; or
       ``(F) is the subject of a transition carried out in 
     accordance with a procedure developed by the Secretary under 
     paragraph (3)(A).
       ``(3) Establishments that employ more than 25 employees.--
       ``(A) Development of procedure.--The Secretary may develop 
     a procedure to transition to a Federal establishment any 
     establishment under this section that, on average, 
     consistently employs more than 25 employees.
       ``(B) Eligibility of certain establishments.--
       ``(i) In general.--A State establishment that employs more 
     than 25 employees but less than 35 employees as of the date 
     of the enactment of this section may be selected as a 
     selected establishment under this subsection.
       ``(ii) Procedures.--A State establishment shall be subject 
     to the procedures established under subparagraph (A) 
     beginning on the date that is 3 years after the effective 
     date described in subsection (j).
       ``(c) Reimbursement of State Costs.--The Secretary shall 
     reimburse a State for costs related to the inspection of 
     selected establishments in the State in accordance with 
     Federal requirements in an amount of not less than 60 percent 
     of eligible State costs.
       ``(d) Coordination Between Federal and State Agencies.--
       ``(1) In general.--The Secretary shall designate an 
     employee of the Federal Government as State coordinator for 
     each appropriate State agency--
       ``(A) to provide oversight and enforcement of this title; 
     and
       ``(B) to oversee the training and inspection activities of 
     designated personnel of the State agency.
       ``(2) Supervision.--A State coordinator shall be under the 
     direct supervision of the Secretary.
       ``(3) Duties of state coordinator.--
       ``(A) In general.--A State coordinator shall visit selected 
     establishments with a frequency that is appropriate to ensure 
     that selected establishments are operating in a manner that 
     is consistent with this Act (including regulations and 
     policies under this Act).
       ``(B) Quarterly reports.--A State coordinator shall, on a 
     quarterly basis, submit to the Secretary a report that 
     describes the status of each selected establishment that is 
     under the jurisdiction of the State coordinator with respect 
     to the level of compliance of each selected establishment 
     with the requirements of this Act.
       ``(C) Immediate notification requirement.--If a State 
     coordinator determines that any selected establishment that 
     is under the jurisdiction of the State coordinator is in 
     violation of any requirement of this Act, the State 
     coordinator shall--
       ``(i) immediately notify the Secretary of the violation; 
     and
       ``(ii) deselect the selected establishment or suspend 
     inspection at the selected establishment.
       ``(4) Performance evaluations.--Performance evaluations of 
     State coordinators designated under this subsection shall be 
     conducted by the Secretary as part of the Federal agency 
     management control system.
       ``(e) Audits.--
       ``(1) Periodic audits conducted by inspector general of the 
     department of agriculture.--Not later than 2 years after the 
     effective date described in subsection (j), and not less 
     often than every 3 years thereafter, the Inspector General of 
     the Department of Agriculture shall conduct an audit of each 
     activity taken by the Secretary under this section for the 
     period covered by the audit to determine compliance with this 
     section.
       ``(2) Audit conducted by comptroller general of the united 
     states.--Not earlier than 3 years, nor later than 5 years, 
     after the date of the enactment of this section, the 
     Comptroller General of the United States shall conduct an 
     audit of the implementation of this section to determine--
       ``(A) the effectiveness of the implementation of this 
     section; and
       ``(B) the number of selected establishments selected by the 
     Secretary to ship carcasses, portions of carcasses, or meat 
     items under this section.
       ``(f) Technical Assistance Division.--
       ``(1) Establishment.--Not later than 180 days after the 
     effective date described in subsection (j), the Secretary 
     shall establish in the Food Safety and Inspection Service of 
     the Department of Agriculture a technical assistance division 
     to coordinate the initiatives of any other appropriate agency 
     of the Department of Agriculture to provide--
       ``(A) outreach, education, and training to very small or 
     certain small establishments (as defined by the Secretary); 
     and
       ``(B) grants to appropriate State agencies to provide 
     outreach, technical assistance, education, and training to 
     very small or certain small establishments (as defined by the 
     Secretary).
       ``(2) Personnel.--The technical assistance division shall 
     be comprised of individuals that, as determined by the 
     Secretary--
       ``(A) are of a quantity sufficient to carry out the duties 
     of the technical assistance division; and
       ``(B) possess appropriate qualifications and expertise 
     relating to the duties of the technical assistance division.
       ``(g) Transition Grants.--The Secretary may provide grants 
     to appropriate State agencies to assist the appropriate State 
     agencies in helping establishments covered by title III to 
     transition to selected establishments.
       ``(h) Violations.--Any selected establishment that the 
     Secretary determines to be in violation of any requirement of 
     this Act shall be transitioned to a Federal establishment in 
     accordance with a procedure developed by the Secretary under 
     subsection (b)(3)(A).
       ``(i) Effect.--Nothing in this section limits the 
     jurisdiction of the Secretary with respect to the regulation 
     of meat and meat products under this Act.
       ``(j) Effective Date.--
       ``(1) In general.--This section takes effect on the date on 
     which the Secretary, after providing a period of public 
     comment (including through the conduct of public meetings or 
     hearings), promulgates final regulations to carry out this 
     section.
       ``(2) Requirement.--Not later than 18 months after the date 
     of the enactment of this section, the Secretary shall 
     promulgate final regulations in accordance with paragraph 
     (1).''.
       (b) Poultry and Poultry Products.--The Poultry Products 
     Inspection Act (21 U.S.C. 451 et seq.) is amended by adding 
     at the end the following:

     ``SEC. 31. INTERSTATE SHIPMENT OF POULTRY INSPECTED BY 
                   FEDERAL AND STATE AGENCIES FOR CERTAIN SMALL 
                   ESTABLISHMENTS.

       ``(a) Definitions.--
       ``(1) Appropriate state agency.--The term `appropriate 
     State agency' means a State agency described in section 
     5(a)(1).
       ``(2) Designated personnel.--The term `designated 
     personnel' means inspection personnel of a State agency that 
     have undergone all necessary inspection training and 
     certification to assist the Secretary in the administration 
     and enforcement of this Act, including rules and regulations 
     issued under this Act.
       ``(3) Eligible establishment.--The term `eligible 
     establishment' means an establishment that is in compliance 
     with--
       ``(A) the State inspection program of the State in which 
     the establishment is located; and
       ``(B) this Act, including rules and regulations issued 
     under this Act.
       ``(4) Poultry item.--The term `poultry item' means--
       ``(A) a portion of poultry; and
       ``(B) a poultry product.
       ``(5) Selected establishment.--The term `selected 
     establishment' means an eligible establishment that is 
     selected by the Secretary, in coordination with the 
     appropriate State agency of the State in which the eligible 
     establishment is located, under subsection (b) to ship 
     poultry items in interstate commerce.
       ``(b) Authority of Secretary To Allow Shipments.--
       ``(1) In general.--Subject to paragraph (2), the Secretary, 
     in coordination with the appropriate State agency of the 
     State in which an establishment is located, may select the 
     establishment to ship poultry items in interstate commerce, 
     and place on each poultry item shipped in interstate commerce 
     a Federal mark, stamp, tag, or label of inspection, if--
       ``(A) the poultry item qualifies for the Federal mark, 
     stamp, tag, or label of inspection under the requirements of 
     this Act;
       ``(B) the establishment is an eligible establishment; and
       ``(C) inspection services for the establishment are 
     provided by designated personnel.
       ``(2) Prohibited establishments.--In carrying out paragraph 
     (1), the Secretary, in coordination with an appropriate State 
     agency, shall not select an establishment that--
       ``(A) on average, employs more than 25 employees (including 
     supervisory and nonsupervisory employees), as defined by the 
     Secretary;
       ``(B) as of the date of the enactment of this section, 
     ships in interstate commerce carcasses, portions of 
     carcasses, or poultry items that are inspected by the 
     Secretary in accordance with this Act;
       ``(C)(i) is a Federal establishment;
       ``(ii) was a Federal establishment as of the date of the 
     enactment of this section, and was reorganized on a later 
     date under the same name or a different name or person by the 
     person, firm, or corporation that controlled the 
     establishment as of the date of the enactment of this 
     section; or
       ``(iii) was a State establishment as of the date of the 
     enactment of this section that--
       ``(I) as of the date of the enactment of this section, 
     employed more than 25 employees; and
       ``(II) was reorganized on a later date by the person, firm, 
     or corporation that controlled the establishment as of the 
     date of the enactment of this section;
       ``(D) is in violation of this Act;
       ``(E) is located in a State that does not have a State 
     inspection program; or
       ``(F) is the subject of a transition carried out in 
     accordance with a procedure developed by the Secretary under 
     paragraph (3)(A).
       ``(3) Establishments that employ more than 25 employees.--
       ``(A) Development of procedure.--The Secretary may develop 
     a procedure to transition to a Federal establishment any 
     establishment under this section that, on average, 
     consistently employs more than 25 employees.
       ``(B) Eligibility of certain establishments.--
       ``(i) In general.--A State establishment that employs more 
     than 25 employees but less than 35 employees as of the date 
     of the enactment of this section may be selected as a 
     selected establishment under this subsection.

[[Page H3532]]

       ``(ii) Procedures.--A State establishment shall be subject 
     to the procedures established under subparagraph (A) 
     beginning on the date that is 3 years after the effective 
     date described in subsection (i).
       ``(c) Reimbursement of State Costs.--The Secretary shall 
     reimburse a State for costs related to the inspection of 
     selected establishments in the State in accordance with 
     Federal requirements in an amount of not less than 60 percent 
     of eligible State costs.
       ``(d) Coordination Between Federal and State Agencies.--
       ``(1) In general.--The Secretary shall designate an 
     employee of the Federal Government as State coordinator for 
     each appropriate State agency--
       ``(A) to provide oversight and enforcement of this section; 
     and
       ``(B) to oversee the training and inspection activities of 
     designated personnel of the State agency.
       ``(2) Supervision.--A State coordinator shall be under the 
     direct supervision of the Secretary.
       ``(3) Duties of state coordinator.--
       ``(A) In general.--A State coordinator shall visit selected 
     establishments with a frequency that is appropriate to ensure 
     that selected establishments are operating in a manner that 
     is consistent with this Act (including regulations and 
     policies under this Act).
       ``(B) Quarterly reports.--A State coordinator shall, on a 
     quarterly basis, submit to the Secretary a report that 
     describes the status of each selected establishment that is 
     under the jurisdiction of the State coordinator with respect 
     to the level of compliance of each selected establishment 
     with the requirements of this Act.
       ``(C) Immediate notification requirement.--If a State 
     coordinator determines that any selected establishment that 
     is under the jurisdiction of the State coordinator is in 
     violation of any requirement of this Act, the State 
     coordinator shall--
       ``(i) immediately notify the Secretary of the violation; 
     and
       ``(ii) deselect the selected establishment or suspend 
     inspection at the selected establishment.
       ``(4) Performance evaluations.--Performance evaluations of 
     State coordinators designated under this subsection shall be 
     conducted by the Secretary as part of the Federal agency 
     management control system.
       ``(e) Audits.--
       ``(1) Periodic audits conducted by inspector general of the 
     department of agriculture.--Not later than 2 years after the 
     effective date described in subsection (i), and not less 
     often than every 3 years thereafter, the Inspector General of 
     the Department of Agriculture shall conduct an audit of each 
     activity taken by the Secretary under this section for the 
     period covered by the audit to determine compliance with this 
     section.
       ``(2) Audit conducted by comptroller general of the united 
     states.--Not earlier than 3 years, nor later than 5 years, 
     after the date of the enactment of this section, the 
     Comptroller General of the United States shall conduct an 
     audit of the implementation of this section to determine--
       ``(A) the effectiveness of the implementation of this 
     section; and
       ``(B) the number of selected establishments selected by the 
     Secretary to ship poultry items under this section.
       ``(f) Transition Grants.--The Secretary may provide grants 
     to appropriate State agencies to assist the appropriate State 
     agencies in helping establishments covered by this Act to 
     transition to selected establishments.
       ``(g) Violations.--Any selected establishment that the 
     Secretary determines to be in violation of any requirement of 
     this Act shall be transitioned to a Federal establishment in 
     accordance with a procedure developed by the Secretary under 
     subsection (b)(3)(A).
       ``(h) Effect.--Nothing in this section limits the 
     jurisdiction of the Secretary with respect to the regulation 
     of poultry and poultry products under this Act.
       ``(i) Effective Date.--
       ``(1) In general.--This section takes effect on the date on 
     which the Secretary, after providing a period of public 
     comment (including through the conduct of public meetings or 
     hearings), promulgates final regulations to carry out this 
     section.
       ``(2) Requirement.--Not later than 18 months after the date 
     of the enactment of this section, the Secretary shall 
     promulgate final regulations in accordance with paragraph 
     (1).''.

     SEC. 11016. INSPECTION AND GRADING.

       (a) Grading.--Section 203 of the Agricultural Marketing Act 
     of 1946 (7 U.S.C. 1622) is amended--
       (1) by redesignating subsection (n) as subsection (o); and
       (2) by inserting after subsection (m) the following new 
     subsection:
       ``(n) Grading Program.--To establish within the Department 
     of Agriculture a voluntary fee based grading program for--
       ``(1) catfish (as defined by the Secretary under paragraph 
     (2) of section 1(w) of the Federal Meat Inspection Act (21 
     U.S.C. 601(w))); and
       ``(2) any additional species of farm-raised fish or farm-
     raised shellfish--
       ``(A) for which the Secretary receives a petition 
     requesting such voluntary fee based grading; and
       ``(B) that the Secretary considers appropriate.''.
       (b) Inspection.--
       (1) In general.--The Federal Meat Inspection Act is 
     amended--
       (A) in section 1(w) (21 U.S.C. 601(w)) --
       (i) by striking ``and'' at the end of paragraph (1);
       (ii) by redesignating paragraph (2) as paragraph (3); and
       (iii) by inserting after paragraph (1) the following new 
     paragraph:
       ``(2) catfish, as defined by the Secretary; and'';
       (B) by striking section 6 (21 U.S.C. 606) and inserting the 
     following new section:
       ``Sec. 6. (a) In General.--For the purposes hereinbefore 
     set forth the Secretary shall cause to be made, by inspectors 
     appointed for that purpose, an examination and inspection of 
     all meat food products prepared for commerce in any 
     slaughtering, meat-canning, salting, packing, rendering, or 
     similar establishment, and for the purposes of any 
     examination and inspection and inspectors shall have access 
     at all times, by day or night, whether the establishment be 
     operated or not, to every part of said establishment; and 
     said inspectors shall mark, stamp, tag, or label as 
     `Inspected and passed' all such products found to be not 
     adulterated; and said inspectors shall label, mark, stamp, or 
     tag as `Inspected and condemned' all such products found 
     adulterated, and all such condemned meat food products shall 
     be destroyed for food purposes, as hereinbefore provided, and 
     the Secretary may remove inspectors from any establishment 
     which fails to so destroy such condemned meat food products: 
     Provided, That subject to the rules and regulations of the 
     Secretary the provisions of this section in regard to 
     preservatives shall not apply to meat food products for 
     export to any foreign country and which are prepared or 
     packed according to the specifications or directions of the 
     foreign purchaser, when no substance is used in the 
     preparation or packing thereof in conflict with the laws of 
     the foreign country to which said article is to be exported; 
     but if said article shall be in fact sold or offered for sale 
     for domestic use or consumption then this proviso shall not 
     exempt said article from the operation of all the other 
     provisions of this chapter.
       ``(b) Catfish.--In the case of an examination and 
     inspection under subsection (a) of a meat food product 
     derived from catfish, the Secretary shall take into account 
     the conditions under which the catfish is raised and 
     transported to a processing establishment.''; and
       (C) by adding at the end of title I the following new 
     section:
       ``Sec. 25.  Notwithstanding any other provision of this 
     Act, the requirements of sections 3, 4, 5, 10(b), and 23 
     shall not apply to catfish.''.
       (2) Effective date.--
       (A) In general.--The amendments made by paragraph (1) shall 
     not apply until the date on which the Secretary of 
     Agriculture issues final regulations (after providing a 
     period of public comment, including through the conduct of 
     public meetings or hearings, in accordance with chapter 5 of 
     title 5, United States Code) to carry out such amendments.
       (B) Regulations.--Not later than 18 months after the date 
     of the enactment of this Act, the Secretary of Agriculture, 
     in consultation with the Commissioner of Food and Drugs, 
     shall issue final regulations to carry out the amendments 
     made by paragraph (1).
       (3) Budget request.--Not later than 30 days after the date 
     of the enactment of this Act, the Secretary of Agriculture 
     shall submit to Congress an estimate of the costs of 
     implementing the amendments made by paragraph (1), including 
     the estimated--
       (A) staff years;
       (B) number of establishments;
       (C) volume expected to be produced at such establishments; 
     and
       (D) any other information used in estimating the costs of 
     implementing such amendments.

     SEC. 11017. FOOD SAFETY IMPROVEMENT.

       (a) Federal Meat Inspection Act.--Title I of the Federal 
     Meat Inspection Act is further amended by inserting after 
     section 11 (21 U.S.C. 611) the following:

     ``SEC. 12. NOTIFICATION.

       ``Any establishment subject to inspection under this Act 
     that believes, or has reason to believe, that an adulterated 
     or misbranded meat or meat food product received by or 
     originating from the establishment has entered into commerce 
     shall promptly notify the Secretary with regard to the type, 
     amount, origin, and destination of the meat or meat food 
     product.

     ``SEC. 13. PLANS AND REASSESSMENTS.

       ``The Secretary shall require that each establishment 
     subject to inspection under this Act shall, at a minimum--
       ``(1) prepare and maintain current procedures for the 
     recall of all meat or meat food products produced and shipped 
     by the establishment;
       ``(2) document each reassessment of the process control 
     plans of the establishment; and
       ``(3) upon request, make the procedures and reassessed 
     process control plans available to inspectors appointed by 
     the Secretary for review and copying.''.
       (b) Poultry Products Inspection Act.--Section 10 of the 
     Poultry Products Inspection Act (21 U.S.C. 459) is amended--
       (1) by striking the section heading and all that follows 
     through ``sec. 10. No establishment'' and 
     inserting the following:

     ``SEC. 10. COMPLIANCE BY ALL ESTABLISHMENTS.

       ``(a) In General.--No establishment''; and
       (2) by adding at the end the following:
       ``(b) Notification.--Any establishment subject to 
     inspection under this Act that believes, or has reason to 
     believe, that an adulterated or misbranded poultry or poultry 
     product received by or originating from the establishment has 
     entered into commerce shall promptly notify the Secretary 
     with regard to the type, amount, origin, and destination of 
     the poultry or poultry product.
       ``(c) Plans and Reassessments.--The Secretary shall require 
     that each establishment subject to inspection under this Act 
     shall, at a minimum--
       ``(1) prepare and maintain current procedures for the 
     recall of all poultry or poultry products produced and 
     shipped by the establishment;

[[Page H3533]]

       ``(2) document each reassessment of the process control 
     plans of the establishment; and
       ``(3) upon request, make the procedures and reassessed 
     process control plans available to inspectors appointed by 
     the Secretary for review and copying.''.

       TITLE XII--CROP INSURANCE AND DISASTER ASSISTANCE PROGRAMS

    Subtitle A--Crop Insurance and Agricultural Disaster Assistance

     SEC. 12001. DEFINITION OF ORGANIC CROP.

       Section 502(b) of the Federal Crop Insurance Act (7 U.S.C. 
     1502(b)) is amended--
       (1) by redesignating paragraphs (7) and (8) as paragraphs 
     (8) and (9), respectively; and
       (2) by inserting after paragraph (6) the following:
       ``(7) Organic crop.--The term `organic crop' means an 
     agricultural commodity that is organically produced 
     consistent with section 2103 of the Organic Foods Production 
     Act of 1990 (7 U.S.C. 6502).''.

     SEC. 12002. GENERAL POWERS.

       (a) In General.--Section 506 of the Federal Crop Insurance 
     Act (7 U.S.C. 1506) is amended--
       (1) in the first sentence of subsection (d), by striking 
     ``The Corporation'' and inserting ``Subject to section 
     508(j)(2)(A), the Corporation''; and
       (2) by striking subsection (n).
       (b) Conforming Amendments.--
       (1) Section 506 of the Federal Crop Insurance Act (7 U.S.C. 
     1506) is amended by redesignating subsections (o), (p), and 
     (q) as subsections (n), (o), and (p), respectively.
       (2) Section 521 of the Federal Crop Insurance Act (7 U.S.C. 
     1521) is amended by striking the last sentence.

     SEC. 12003. REDUCTION IN LOSS RATIO.

       (a) Projected Loss Ratio.--Subsection (n)(2) of section 506 
     of the Federal Crop Insurance Act (7 U.S.C. 1506) (as 
     redesignated by section 12002(b)(1)) is amended--
       (1) in the paragraph heading, by striking ``as of october 
     1, 1998'';
       (2) by striking ``, on and after October 1, 1998,''; and
       (3) by striking ``1.075'' and inserting ``1.0''.
       (b) Premiums Required.--Section 508(d)(1) of the Federal 
     Crop Insurance Act (7 U.S.C. 1508(d)(1)) is amended by 
     striking ``not greater than 1.1'' and all that follows and 
     inserting ``not greater than--
       ``(A) 1.1 through September 30, 1998;
       ``(B) 1.075 for the period beginning October 1, 1998, and 
     ending on the day before the date of enactment of the Food, 
     Conservation, and Energy Act of 2008; and
       ``(C) 1.0 on and after the date of enactment of that 
     Act.''.

     SEC. 12004. PREMIUMS ADJUSTMENTS.

       Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 
     1508(a)) is amended by adding at the end the following:
       ``(9) Premium adjustments.--
       ``(A) Prohibition.--Except as provided in subparagraph (B), 
     no person shall pay, allow, or give, or offer to pay, allow, 
     or give, directly or indirectly, either as an inducement to 
     procure insurance or after insurance has been procured, any 
     rebate, discount, abatement, credit, or reduction of the 
     premium named in an insurance policy or any other valuable 
     consideration or inducement not specified in the policy.
       ``(B) Exceptions.--Subparagraph (A) does not apply with 
     respect to--
       ``(i) a payment authorized under subsection (b)(5)(B);
       ``(ii) a performance-based discount authorized under 
     subsection (d)(3); or
       ``(iii) a patronage dividend, or similar payment, that is 
     paid--

       ``(I) by an entity that was approved by the Corporation to 
     make such payments for the 2005, 2006, or 2007 reinsurance 
     year, in accordance with subsection (b)(5)(B) as in effect on 
     the day before the date of enactment of this paragraph; and
       ``(II) in a manner consistent with the payment plan 
     approved in accordance with that subsection for the entity by 
     the Corporation for the applicable reinsurance year.''.

     SEC. 12005. CONTROLLED BUSINESS INSURANCE.

       Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 
     1508(a)) (as amended by section 12004) is amended by adding 
     at the end the following:
       ``(10) Commissions.--
       ``(A) Definition of immediate family.--In this paragraph, 
     the term `immediate family' means an individual's father, 
     mother, stepfather, stepmother, brother, sister, stepbrother, 
     stepsister, son, daughter, stepson, stepdaughter, 
     grandparent, grandson, granddaughter, father-in-law, mother-
     in-law, brother-in-law, sister-in-law, son-in-law, daughter-
     in-law, the spouse of the foregoing, and the individual's 
     spouse.
       ``(B) Prohibition.--No individual (including a subagent) 
     may receive directly, or indirectly through an entity, any 
     compensation (including any commission, profit sharing, 
     bonus, or any other direct or indirect benefit) for the sale 
     or service of a policy or plan of insurance offered under 
     this title if--
       ``(i) the individual has a substantial beneficial interest, 
     or a member of the individual's immediate family has a 
     substantial beneficial interest, in the policy or plan of 
     insurance; and
       ``(ii) the total compensation to be paid to the individual 
     with respect to the sale or service of the policies or plans 
     of insurance that meet the condition described in clause (i) 
     exceeds 30 percent or the percentage specified in State law, 
     whichever is less, of the total of all compensation received 
     directly or indirectly by the individual for the sale or 
     service of all policies and plans of insurance offered under 
     this title for the reinsurance year.
       ``(C) Reporting.--Not later than 90 days after the annual 
     settlement date of the reinsurance year, any individual that 
     received directly or indirectly any compensation for the 
     service or sale of any policy or plan of insurance offered 
     under this title in the prior reinsurance year shall certify 
     to applicable approved insurance providers that the 
     compensation that the individual received was in compliance 
     with this paragraph.
       ``(D) Sanctions.--The procedural requirements and sanctions 
     prescribed in section 515(h) shall apply to the prosecution 
     of a violation of this paragraph.
       ``(E) Applicability.--
       ``(i) In general.--Sanctions for violations under this 
     paragraph shall only apply to the individuals or entities 
     directly responsible for the certification required under 
     subparagraph (C) or the failure to comply with the 
     requirements of this paragraph.
       ``(ii) Prohibition.--No sanctions shall apply with respect 
     to the policy or plans of insurance upon which compensation 
     is received, including the reinsurance for those policies or 
     plans.''.

     SEC. 12006. ADMINISTRATIVE FEE.

       (a) In General.--Section 508(b)(5) of the Federal Crop 
     Insurance Act (7 U.S.C. 1508(b)(5)) is amended--
       (1) by striking subparagraph (A) and inserting the 
     following:
       ``(A) Basic fee.--Each producer shall pay an administrative 
     fee for catastrophic risk protection in the amount of $300 
     per crop per county.''; and
       (2) in subparagraph (B)--
       (A) by striking ``PAYMENT ON BEHALF OF PRODUCERS'' and 
     inserting ``PAYMENT OF CATASTROPHIC RISK PROTECTION FEE ON 
     BEHALF OF PRODUCERS'';
       (B) in clause (i)--
       (i) by striking ``or other payment''; and
       (ii) by striking ``with catastrophic risk protection or 
     additional coverage'' and inserting ``through the payment of 
     catastrophic risk protection administrative fees'';
       (C) by striking clauses (ii) and (vi);
       (D) by redesignating clauses (iii), (iv), and (v) as 
     clauses (ii), (iii), and (iv), respectively;
       (E) in clause (iii) (as so redesignated), by striking ``A 
     policy or plan of insurance'' and inserting ``Catastrophic 
     risk protection coverage''; and
       (F) in clause (iv) (as so redesignated)--
       (i) by striking ``or other arrangement under this 
     subparagraph''; and
       (ii) by striking ``additional''.
       (b) Repeal.--Section 748 of the Agriculture, Rural 
     Development, Food and Drug Administration, and Related 
     Agencies Appropriations Act, 1999 (7 U.S.C. 1508 note; Public 
     Law 105-277) is repealed.

     SEC. 12007. TIME FOR PAYMENT.

       Section 508 of the Federal Crop Insurance Act (7 U.S.C. 
     1508) is amended--
       (1) in subsection (b)(5)(C), by striking ``the date that 
     premium'' and inserting ``the same date on which the 
     premium'';
       (2) in subsection (c)(10), by adding at the end the 
     following:
       ``(C) Time for payment.--Subsection (b)(5)(C) shall apply 
     with respect to the collection date for the administrative 
     fee.''; and
       (3) in subsection (d), by adding at the end the following:
       ``(4) Billing date for premiums.--Effective beginning with 
     the 2012 reinsurance year, the Corporation shall establish 
     August 15 as the billing date for premiums.''.

     SEC. 12008. CATASTROPHIC COVERAGE REIMBURSEMENT RATE.

       Section 508(b)(11) of the Federal Crop Insurance Act (7 
     U.S.C. 1508(b)(11)) is amended by striking ``8 percent'' and 
     inserting ``6 percent''.

     SEC. 12009. GRAIN SORGHUM PRICE ELECTION.

       Section 508(c)(5) of the Federal Crop Insurance Act (7 
     U.S.C. 1508(c)(5)) is amended by adding at the end the 
     following:
       ``(D) Grain sorghum price election.--
       ``(i) In general.--The Corporation, in conjunction with the 
     Secretary (referred to in this subparagraph as the 
     `Corporation'), shall--

       ``(I) not later than 60 days after the date of enactment of 
     this subparagraph, make available all methods and data, 
     including data from the Economic Research Service, used by 
     the Corporation to develop the expected market prices for 
     grain sorghum under the production and revenue-based plans of 
     insurance of the Corporation; and
       ``(II) request applicable data from the grain sorghum 
     industry.

       ``(ii) Expert reviewers.--

       ``(I) In general.--Not later than 120 days after the date 
     of enactment of this subparagraph, the Corporation shall 
     contract individually with 5 expert reviewers described in 
     subclause (II) to develop and recommend a methodology for 
     determining an expected market price for sorghum for both the 
     production and revenue-based plans of insurance to more 
     accurately reflect the actual price at harvest.
       ``(II) Requirements.--The expert reviewers under subclause 
     (I) shall be comprised of agricultural economists with 
     experience in grain sorghum and corn markets, of whom--

       ``(aa) 2 shall be agricultural economists of institutions 
     of higher education;
       ``(bb) 2 shall be economists from within the Department; 
     and
       ``(cc) 1 shall be an economist nominated by the grain 
     sorghum industry.
       ``(iii) Recommendations.--

       ``(I) In general.--Not later than 90 days after the date of 
     contracting with the expert reviewers under clause (ii), the 
     expert reviewers shall submit, and the Corporation shall make 
     available to the public, the recommendations of the expert 
     reviewers.
       ``(II) Consideration.--The Corporation shall consider the 
     recommendations under subclause (I) when determining the 
     appropriate pricing methodology to determine the expected 
     market

[[Page H3534]]

     price for grain sorghum under both the production and 
     revenue-based plans of insurance.
       ``(III) Publication.--Not later than 60 days after the date 
     on which the Corporation receives the recommendations of the 
     expert reviewers, the Corporation shall publish the proposed 
     pricing methodology for both the production and revenue-based 
     plans of insurance for notice and comment and, during the 
     comment period, conduct at least 1 public meeting to discuss 
     the proposed pricing methodologies.

       ``(iv) Appropriate pricing methodology.--

       ``(I) In general.--Not later than 180 days after the close 
     of the comment period in clause (iii)(III), but effective not 
     later than the 2010 crop year, the Corporation shall 
     implement a pricing methodology for grain sorghum under the 
     production and revenue-based plans of insurance that is 
     transparent and replicable.
       ``(II) Interim methodology.--Until the date on which the 
     new pricing methodology is implemented, the Corporation may 
     continue to use the pricing methodology that the Corporation 
     determines best establishes the expected market price.
       ``(III) Availability.--On an annual basis, the Corporation 
     shall make available the pricing methodology and data used to 
     determine the expected market prices for grain sorghum under 
     the production and revenue-based plans of insurance, 
     including any changes to the methodology used to determine 
     the expected market prices for grain sorghum from the 
     previous year.''.

     SEC. 12010. PREMIUM REDUCTION AUTHORITY.

       Subsection 508(e) of the Federal Crop Insurance Act (7 
     U.S.C. 1508(e)) is amended--
       (1) in paragraph (2), by striking ``paragraph (4)'' and 
     inserting ``paragraph (3)'';
       (2) by striking paragraph (3); and
       (3) by redesignating paragraphs (4) and (5) as paragraphs 
     (3) and (4), respectively.

     SEC. 12011. ENTERPRISE AND WHOLE FARM UNITS.

       Section 508(e) of Federal Crop Insurance Act (7 U.S.C. 
     1508(e)) (as amended by section 12010) is amended by adding 
     at the end the following:
       ``(5) Enterprise and whole farm units.--
       ``(A) In general.--The Corporation may carry out a pilot 
     program under which the Corporation pays a portion of the 
     premiums for plans or policies of insurance for which the 
     insurable unit is defined on a whole farm or enterprise unit 
     basis that is higher than would otherwise be paid in 
     accordance with paragraph (2).
       ``(B) Amount.--The percentage of the premium paid by the 
     Corporation to a policyholder for a policy with an enterprise 
     or whole farm unit under this paragraph shall, to the maximum 
     extent practicable, provide the same dollar amount of premium 
     subsidy per acre that would otherwise have been paid by the 
     Corporation under paragraph (2) if the policyholder had 
     purchased a basic or optional unit for the crop for the crop 
     year.
       ``(C) Limitation.--The amount of the premium paid by the 
     Corporation under this paragraph may not exceed 80 percent of 
     the total premium for the enterprise or whole farm unit 
     policy.''.

     SEC. 12012. PAYMENT OF PORTION OF PREMIUM FOR AREA REVENUE 
                   PLANS.

       Section 508(e) of the Federal Crop Insurance Act (7 U.S.C. 
     1508(e)) (as amended by section 12011) is amended--
       (1) in paragraph (2), in the matter preceding subparagraph 
     (A), by striking ``paragraph (4)'' and inserting ``paragraphs 
     (4), (6), and (7)''; and
       (2) by adding at the end the following:
       ``(6) Premium subsidy for area revenue plans.--Subject to 
     paragraph (4), in the case of a policy or plan of insurance 
     that covers losses due to a reduction in revenue in an area, 
     the amount of the premium paid by the Corporation shall be as 
     follows:
       ``(A) In the case of additional area coverage equal to or 
     greater than 70 percent, but less than 75 percent, of the 
     recorded county yield indemnified at not greater than 100 
     percent of the expected market price, the amount shall be 
     equal to the sum of--
       ``(i) 59 percent of the amount of the premium established 
     under subsection (d)(2)(B)(i) for the coverage level 
     selected; and
       ``(ii) the amount determined under subsection (d)(2)(B)(ii) 
     for the coverage level selected to cover operating and 
     administrative expenses.
       ``(B) In the case of additional area coverage equal to or 
     greater than 75 percent, but less than 85 percent, of the 
     recorded county yield indemnified at not greater than 100 
     percent of the expected market price, the amount shall be 
     equal to the sum of--
       ``(i) 55 percent of the amount of the premium established 
     under subsection (d)(2)(B)(i) for the coverage level 
     selected; and
       ``(ii) the amount determined under subsection (d)(2)(B)(ii) 
     for the coverage level selected to cover operating and 
     administrative expenses.
       ``(C) In the case of additional area coverage equal to or 
     greater than 85 percent, but less than 90 percent, of the 
     recorded county yield indemnified at not greater than 100 
     percent of the expected market price, the amount shall be 
     equal to the sum of--
       ``(i) 49 percent of the amount of the premium established 
     under subsection (d)(2)(B)(i) for the coverage level 
     selected; and
       ``(ii) the amount determined under subsection (d)(2)(B)(ii) 
     for the coverage level selected to cover operating and 
     administrative expenses.
       ``(D) In the case of additional area coverage equal to or 
     greater than 90 percent of the recorded county yield 
     indemnified at not greater than 100 percent of the expected 
     market price, the amount shall be equal to the sum of--
       ``(i) 44 percent of the amount of the premium established 
     under subsection (d)(2)(B)(i) for the coverage level 
     selected; and
       ``(ii) the amount determined under subsection (d)(2)(B)(ii) 
     for the coverage level selected to cover operating and 
     administrative expenses.
       ``(7) Premium subsidy for area yield plans.--Subject to 
     paragraph (4), in the case of a policy or plan of insurance 
     that covers losses due to a loss of yield or prevented 
     planting in an area, the amount of the premium paid by the 
     Corporation shall be as follows:
       ``(A) In the case of additional area coverage equal to or 
     greater than 70 percent, but less than 80 percent, of the 
     recorded county yield indemnified at not greater than 100 
     percent of the expected market price, the amount shall be 
     equal to the sum of--
       ``(i) 59 percent of the amount of the premium established 
     under subsection (d)(2)(B)(i) for the coverage level 
     selected; and
       ``(ii) the amount determined under subsection (d)(2)(B)(ii) 
     for the coverage level selected to cover operating and 
     administrative expenses.
       ``(B) In the case of additional area coverage equal to or 
     greater than 80 percent, but less than 90 percent, of the 
     recorded county yield indemnified at not greater than 100 
     percent of the expected market price, the amount shall be 
     equal to the sum of--
       ``(i) 55 percent of the amount of the premium established 
     under subsection (d)(2)(B)(i) for the coverage level 
     selected; and
       ``(ii) the amount determined under subsection (d)(2)(B)(ii) 
     for the coverage level selected to cover operating and 
     administrative expenses.
       ``(C) In the case of additional area coverage equal to or 
     greater than 90 percent, of the recorded county yield 
     indemnified at not greater than 100 percent of the expected 
     market price, the amount shall be equal to the sum of--
       ``(i) 51 percent of the amount of the premium established 
     under subsection (d)(2)(B)(i) for the coverage level 
     selected; and
       ``(ii) the amount determined under subsection (d)(2)(B)(ii) 
     for the coverage level selected to cover operating and 
     administrative expenses.''.

     SEC. 12013. DENIAL OF CLAIMS.

       Section 508(j)(2)(A) of the Federal Crop Insurance Act (7 
     U.S.C. 1508(j)(2)(A)) is amended by inserting ``on behalf of 
     the Corporation'' after ``approved provider''.

     SEC. 12014. SETTLEMENT OF CROP INSURANCE CLAIMS ON FARM-
                   STORED PRODUCTION.

       (a) In General.--Section 508(j) of the Federal Crop 
     Insurance Act (7 U.S.C. 1508(j)) is amended by adding at the 
     end the following:
       ``(5) Settlement of claims on farm-stored production.--A 
     producer with farm-stored production may, at the option of 
     the producer, delay settlement of a crop insurance claim 
     relating to the farm-stored production for up to 4 months 
     after the last date on which claims may be submitted under 
     the policy of insurance.''.
       (b) Study on the Efficacy of Pack Factors.--
       (1) In general.--The Secretary shall conduct a study of the 
     efficacy and accuracy of the application of pack factors 
     regarding the measurement of farm-stored production for 
     purposes of providing policies or plans of insurance under 
     the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).
       (2) Considerations.--The study shall consider--
       (A) structural shape and size;
       (B) time in storage;
       (C) the impact of facility aeration systems; and
       (D) any other factors the Secretary considers appropriate.
       (3) Report.--Not later than 3 years after the date of 
     enactment of this Act, the Secretary shall submit to the 
     Committee on Agriculture of the House of Representatives and 
     the Committee on Agriculture, Nutrition, and Forestry of the 
     Senate a report that includes the findings of the study and 
     any related policy recommendations.

     SEC. 12015. TIME FOR REIMBURSEMENT.

       Section 508(k)(4) of the Federal Crop Insurance Act (7 
     U.S.C. 1508(k)(4)) is amended by adding at the end the 
     following:
       ``(D) Time for reimbursement.--Effective beginning with the 
     2012 reinsurance year, the Corporation shall reimburse 
     approved insurance providers and agents for the allowable 
     administrative and operating costs of the providers and 
     agents as soon as practicable after October 1 (but not later 
     than October 31) after the reinsurance year for which 
     reimbursements are earned.''.

     SEC. 12016. REIMBURSEMENT RATE.

       Section 508(k)(4) of the Federal Crop Insurance Act (7 
     U.S.C. 1508(k)(4)) (as amended by section 12015) is amended--
       (1) in subparagraph (A), by striking ``Except as provided 
     in subparagraph (B)'' and inserting ``Except as otherwise 
     provided in this paragraph''; and
       (2) by adding at the end the following:
       ``(E) Reimbursement rate reduction.--In the case of a 
     policy of additional coverage that received a rate of 
     reimbursement for administrative and operating costs for the 
     2008 reinsurance year, for each of the 2009 and subsequent 
     reinsurance years, the reimbursement rate for administrative 
     and operating costs shall be 2.3 percentage points below the 
     rates in effect as of the date of enactment of the Food, 
     Conservation, and Energy Act of 2008 for all crop insurance 
     policies used to define loss ratio, except that only \1/2\ of 
     the reduction shall apply in a reinsurance year to the total 
     premium written in a State in which the State loss ratio is 
     greater than 1.2.
       ``(F) Reimbursement rate for area policies and plans of 
     insurance.--Notwithstanding subparagraphs (A) through (E), 
     for each of the 2009 and subsequent reinsurance years, the 
     reimbursement rate for area policies and plans of insurance 
     widely available as of the date of enactment of this 
     subparagraph shall be 12 percent of the premium used to 
     define loss ratio for that reinsurance year.''.

[[Page H3535]]

     SEC. 12017. RENEGOTIATION OF STANDARD REINSURANCE AGREEMENT.

       Section 508(k) of the Federal Crop Insurance Act (7 U.S.C. 
     1508(k)) is amended by adding at the end the following:
       ``(8) Renegotiation of standard reinsurance agreement.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     notwithstanding section 536 of the Agricultural Research, 
     Extension, and Education Reform Act of 1998 (7 U.S.C. 1506 
     note; Public Law 105-185) and section 148 of the Agricultural 
     Risk Protection Act of 2000 (7 U.S.C. 1506 note; Public Law 
     106-224), the Corporation may renegotiate the financial terms 
     and conditions of each Standard Reinsurance Agreement--
       ``(i) to be effective for the 2011 reinsurance year 
     beginning July 1, 2010; and
       ``(ii) once during each period of 5 reinsurance years 
     thereafter.
       ``(B) Exceptions.--
       ``(i) Adverse circumstances.--Subject to clause (ii), 
     subparagraph (A) shall not apply in any case in which the 
     approved insurance providers, as a whole, experience 
     unexpected adverse circumstances, as determined by the 
     Secretary.
       ``(ii) Effect of federal law changes.--If Federal law is 
     enacted after the date of enactment of this paragraph that 
     requires revisions in the financial terms of the Standard 
     Reinsurance Agreement, and changes in the Agreement are made 
     on a mandatory basis by the Corporation, the changes shall 
     not be considered to be a renegotiation of the Agreement for 
     purposes of subparagraph (A).
       ``(C) Notification requirement.--If the Corporation 
     renegotiates a Standard Reinsurance Agreement under 
     subparagraph (A)(iii), the Corporation shall notify the 
     Committee on Agriculture of the House of Representatives and 
     the Committee on Agriculture, Nutrition, and Forestry of the 
     Senate of the renegotiation.
       ``(D) Consultation.--The approved insurance providers may 
     confer with each other and collectively with the Corporation 
     during any renegotiation under subparagraph (A).
       ``(E) 2011 reinsurance year.--
       ``(i) In general.--As part of the Standard Reinsurance 
     Agreement renegotiation authorized under subparagraph (A)(i), 
     the Corporation shall consider alternative methods to 
     determine reimbursement rates for administrative and 
     operating costs.
       ``(ii) Alternative methods.--Alternatives considered under 
     clause (i) shall include--

       ``(I) methods that--

       ``(aa) are graduated and base reimbursement rates in a 
     State on changes in premiums in that State;
       ``(bb) are graduated and base reimbursement rates in a 
     State on the loss ratio for crop insurance for that State; 
     and
       ``(cc) are graduated and base reimbursement rates on 
     individual policies on the level of total premium for each 
     policy; and

       ``(II) any other method that takes into account current 
     financial conditions of the program and ensures continued 
     availability of the program to producers on a nationwide 
     basis.''.

     SEC. 12018. CHANGE IN DUE DATE FOR CORPORATION PAYMENTS FOR 
                   UNDERWRITING GAINS.

       Section 508(k) of the Federal Crop Insurance Act (7 U.S.C. 
     1508(k)) (as amended by section 12017) is amended by adding 
     at the end the following:
       ``(9) Due date for payment of underwriting gains.--
     Effective beginning with the 2011 reinsurance year, the 
     Corporation shall make payments for underwriting gains under 
     this title on--
       ``(A) for the 2011 reinsurance year, October 1, 2012; and
       ``(B) for each reinsurance year thereafter, October 1 of 
     the following calendar year.''.

     SEC. 12019. MALTING BARLEY.

       Section 508(m) of the Federal Crop Insurance Act (7 U.S.C. 
     1508(m)) is amended by adding at the end the following:
       ``(5) Special provisions for malting barley.--The 
     Corporation shall promulgate special provisions under this 
     subsection specific to malting barley, taking into 
     consideration any changes in quality factors, as required by 
     applicable market conditions.''.

     SEC. 12020. CROP PRODUCTION ON NATIVE SOD.

       (a) Federal Crop Insurance.--Section 508 of the Federal 
     Crop Insurance Act (7 U.S.C. 1508) is amended by adding at 
     the end the following:
       ``(o) Crop Production on Native Sod.--
       ``(1) Definition of native sod.--In this subsection, the 
     term `native sod' means land--
       ``(A) on which the plant cover is composed principally of 
     native grasses, grasslike plants, forbs, or shrubs suitable 
     for grazing and browsing; and
       ``(B) that has never been tilled for the production of an 
     annual crop as of the date of enactment of this subsection.
       ``(2) Ineligibility for benefits.--
       ``(A) In general.--Subject to subparagraph (B) and 
     paragraph (3), native sod acreage that has been tilled for 
     the production of an annual crop after the date of enactment 
     of this subsection shall be ineligible during the first 5 
     crop years of planting, as determined by the Secretary, for 
     benefits under--
       ``(i) this title; and
       ``(ii) section 196 of the Federal Agriculture Improvement 
     and Reform Act of 1996 (7 U.S.C. 7333).
       ``(B) De minimis acreage exemption.--The Secretary shall 
     exempt areas of 5 acres or less from subparagraph (A).
       ``(3) Application.--Paragraph (2) may apply to native sod 
     acreage in the Prairie Pothole National Priority Area at the 
     election of the Governor of the respective State.''.
       (b) Noninsured Crop Disaster Assistance.--Section 196(a) of 
     the Federal Agriculture Improvement and Reform Act of 1996 (7 
     U.S.C. 7333(a)) is amended by adding at the end the 
     following:
       ``(4) Program ineligibility relating to crop production on 
     native sod.--
       ``(A) Definition of native sod.--In this paragraph, the 
     term `native sod' means land--
       ``(i) on which the plant cover is composed principally of 
     native grasses, grasslike plants, forbs, or shrubs suitable 
     for grazing and browsing; and
       ``(ii) that has never been tilled for the production of an 
     annual crop as of the date of enactment of this paragraph.
       ``(B) Ineligibility for benefits.--
       ``(i) In general.--Subject to clause (ii) and subparagraph 
     (C), native sod acreage that has been tilled for the 
     production of an annual crop after the date of enactment of 
     this paragraph shall be ineligible during the first 5 crop 
     years of planting, as determined by the Secretary, for 
     benefits under--

       ``(I) this section; and
       ``(II) the Federal Crop Insurance Act (7 U.S.C. 1501 et 
     seq.).

       ``(ii) De minimis acreage exemption.--The Secretary shall 
     exempt areas of 5 acres or less from clause (i).
       ``(C) Application.--Subparagraph (B) may apply to native 
     sod acreage in the Prairie Pothole National Priority Area at 
     the election of the Governor of the respective State.''.

     SEC. 12021. INFORMATION MANAGEMENT.

       Section 515 of the Federal Crop Insurance Act (7 U.S.C. 
     1515) is amended--
        (a) in subsection (j)(3), by adding before the period at 
     the end the following: ``, which shall be subject to 
     competition on a periodic basis, as determined by the 
     Secretary''; and
       (b) by striking subsection (k) and inserting the following:
       ``(k) Funding.--
       ``(1) Information technology.--To carry out subsection 
     (j)(1), the Corporation may use, from amounts made available 
     from the insurance fund established under section 516(c), not 
     more than $15,000,000 for each of fiscal years 2008 through 
     2011.
       ``(2) Data mining.--To carry out subsection (j)(2), the 
     Corporation may use, from amounts made available from the 
     insurance fund established under section 516(c), not more 
     than $4,000,000 for fiscal year 2009 and each subsequent 
     fiscal year.''.

     SEC. 12022. RESEARCH AND DEVELOPMENT.

       (a) In General.--Section 522(b) of the Federal Crop 
     Insurance Act (7 U.S.C. 1522(b)) is amended by striking 
     paragraphs (1) and (2) and inserting the following:
       ``(1) Research and development payment.--
       ``(A) In general.--The Corporation shall provide a payment 
     to an applicant for research and development costs in 
     accordance with this subsection.
       ``(B) Reimbursement.--An applicant who submits a policy 
     under section 508(h) shall be eligible for the reimbursement 
     of reasonable research and development costs directly related 
     to the policy if the policy is approved by the Board for sale 
     to producers.
       ``(2) Advance payments.--
       ``(A) In general.--Subject to the other provisions of this 
     paragraph, the Board may approve the request of an applicant 
     for advance payment of a portion of reasonable research and 
     development costs prior to submission and approval of the 
     policy by the Board under section 508(h).
       ``(B) Procedures.--The Board shall establish procedures for 
     approving advance payment of reasonable research and 
     development costs to applicants.
       ``(C) Concept proposal.--As a condition of eligibility for 
     advance payments, an applicant shall submit a concept 
     proposal for the policy that the applicant plans to submit to 
     the Board under section 508(h), consistent with procedures 
     established by the Board for submissions under subparagraph 
     (B), including--
       ``(i) a summary of the qualifications of the applicant, 
     including any prior concept proposals and submissions to the 
     Board under section 508(h) and, if applicable, any work 
     conducted under this section;
       ``(ii) a projection of total research and development costs 
     that the applicant expects to incur;
       ``(iii) a description of the need for the policy, the 
     marketability of and expected demand for the policy among 
     affected producers, and the potential impact of the policy on 
     producers and the crop insurance delivery system;
       ``(iv) a summary of data sources available to demonstrate 
     that the policy can reasonably be developed and actuarially 
     appropriate rates established; and
       ``(v) an identification of the risks the proposed policy 
     will cover and an explanation of how the identified risks are 
     insurable under this title.
       ``(D) Review.--
       ``(i) Experts.--If the requirements of subparagraph (B) and 
     (C) are met, the Board may submit a concept proposal 
     described in subparagraph (C) to not less than 2 independent 
     expert reviewers, whose services are appropriate for the type 
     of concept proposal submitted, to assess the likelihood that 
     the proposed policy being developed will result in a viable 
     and marketable policy, as determined by the Board.
       ``(ii) Timing.--The time frames described in subparagraphs 
     (C) and (D) of section 508(h)(4) shall apply to the review of 
     concept proposals under this subparagraph.
       ``(E) Approval.--The Board may approve up to 50 percent of 
     the projected total research and development costs to be paid 
     in advance to an applicant, in accordance with the procedures 
     developed by the Board for the making of such payments, if, 
     after consideration of the reviewer reports described in 
     subparagraph (D) and such

[[Page H3536]]

     other information as the Board determines appropriate, the 
     Board determines that--
       ``(i) the concept, in good faith, will likely result in a 
     viable and marketable policy consistent with section 508(h);
       ``(ii) in the sole opinion of the Board, the concept, if 
     developed into a policy and approved by the Board, would 
     provide crop insurance coverage--

       ``(I) in a significantly improved form;
       ``(II) to a crop or region not traditionally served by the 
     Federal crop insurance program; or
       ``(III) in a form that addresses a recognized flaw or 
     problem in the program;

       ``(iii) the applicant agrees to provide such reports as the 
     Corporation determines are necessary to monitor the 
     development effort;
       ``(iv) the proposed budget and timetable are reasonable; 
     and
       ``(v) the concept proposal meets any other requirements 
     that the Board determines appropriate.
       ``(F) Submission of policy.--If the Board approves an 
     advanced payment under subparagraph (E), the Board shall 
     establish a date by which the applicant shall present a 
     submission in compliance with section 508(h) (including the 
     procedures implemented under that section) to the Board for 
     approval.
       ``(G) Final payment.--
       ``(i) Approved policies.--If a policy is submitted under 
     subparagraph (F) and approved by the Board under section 
     508(h) and the procedures established by the Board (including 
     procedures established under subparagraph (B)), the applicant 
     shall be eligible for a payment of reasonable research and 
     development costs in the same manner as policies reimbursed 
     under paragraph (1)(B), less any payments made pursuant to 
     subparagraph (E).
       ``(ii) Policies not approved.--If a policy is submitted 
     under subparagraph (F) and is not approved by the Board under 
     section 508(h), the Corporation shall--

       ``(I) not seek a refund of any payments made in accordance 
     with this paragraph; and
       ``(II) not make any further research and development cost 
     payments associated with the submission of the policy under 
     this paragraph.

       ``(H) Policy not submitted.--If an applicant receives an 
     advance payment and fails to fulfill the obligation of the 
     applicant to the Board by not submitting a completed 
     submission without just cause and in accordance with the 
     procedures established under subparagraph (B)), including 
     notice and reasonable opportunity to respond, as determined 
     by the Board, the applicant shall return to the Board the 
     amount of the advance plus interest.
       ``(I) Repeated submissions.--The Board may prohibit advance 
     payments to applicants who have submitted--
       ``(i) a concept proposal or submission that did not result 
     in a marketable product; or
       ``(ii) a concept proposal or submission of poor quality.
       ``(J) Continued eligibility.--A determination that an 
     applicant is not eligible for advance payments under this 
     paragraph shall not prevent an applicant from reimbursement 
     under paragraph (1)(B).''.
       (b) Conforming Amendments.--Section 522(b) of the Federal 
     Crop Insurance Act (7 U.S.C. 1522(b)) is amended--
       (1) in paragraph (3), by striking ``or (2)''; and
       (2) in paragraph (4)(A), by striking ``and (2)''.''

     SEC. 12023. CONTRACTS FOR ADDITIONAL POLICIES AND STUDIES.

       Section 522(c) of the Federal Crop Insurance Act (7 U.S.C. 
     1522) is amended--
       (1) by redesignating paragraph (10) as paragraph (17); and
       (2) by inserting after paragraph (9) the following:
       ``(10) Contracts for organic production coverage 
     improvements.--
       ``(A) Contracts required.--Not later than 180 days after 
     the date of enactment of the Food, Conservation, and Energy 
     Act of 2008, the Corporation shall enter into 1 or more 
     contracts for the development of improvements in Federal crop 
     insurance policies covering crops produced in compliance with 
     standards issued by the Department of Agriculture under the 
     national organic program established under the Organic Foods 
     Production Act of 1990 (7 U.S.C. 6501 et seq.).
       ``(B) Review of underwriting risk and loss experience.--
       ``(i) Review required.--

       ``(I) In general.--A contract under subparagraph (A) shall 
     include a review of the underwriting, risk, and loss 
     experience of organic crops covered by the Corporation, as 
     compared with the same crops produced in the same counties 
     and during the same crop years using nonorganic methods.
       ``(II) Requirements.--The review shall--

       ``(aa) to the maximum extent practicable, be designed to 
     allow the Corporation to determine whether significant, 
     consistent, or systemic variations in loss history exist 
     between organic and nonorganic production;
       ``(bb) include the widest available range of data collected 
     by the Secretary and other outside sources of information; 
     and
       ``(cc) not be limited to loss history under existing crop 
     insurance policies.
       ``(ii) Effect on premium surcharge.--Unless the review 
     under this subparagraph documents the existence of 
     significant, consistent, and systemic variations in loss 
     history between organic and nonorganic crops, either 
     collectively or on an individual crop basis, the Corporation 
     shall eliminate or reduce the premium surcharge that the 
     Corporation charges for coverage for organic crops, as 
     determined in accordance with the results.
       ``(iii) Annual updates.--Beginning with the 2009 crop year, 
     the review under this subparagraph shall be updated on an 
     annual basis as data is accumulated by the Secretary and 
     other sources, so that the Corporation may make 
     determinations regarding adjustments to the surcharge in a 
     timely manner as quickly as evolving practices and data 
     trends allow.
       ``(C) Additional price election.--
       ``(i) In general.--A contract under subparagraph (A) shall 
     include the development of a procedure, including any 
     associated changes in policy terms or materials required for 
     implementation of the procedure, to offer producers of 
     organic crops an additional price election that reflects 
     actual prices received by organic producers for crops from 
     the field (including appropriate retail and wholesale 
     prices), as established using data collected and maintained 
     by the Secretary or from other sources.
       ``(ii) Timing.--The development of the procedure shall be 
     completed in a timely manner to allow the Corporation to 
     begin offering the additional price election for organic 
     crops with sufficient data for the 2010 crop year.
       ``(iii) Expansion.--The procedure shall be expanded as 
     quickly as practicable as additional data on prices of 
     organic crops collected by the Secretary and other sources of 
     information becomes available, with a goal of applying this 
     procedure to all organic crops not later than the fifth full 
     crop year that begins after the date of enactment of Food, 
     Conservation, and Energy Act of 2008.
       ``(D) Reporting requirements.--
       ``(i) In general.--The Corporation shall submit to the 
     Committee on Agriculture of the House of Representatives and 
     the Committee on Agriculture, Nutrition, and Forestry of the 
     Senate an annual report on progress made in developing and 
     improving Federal crop insurance for organic crops, 
     including--

       ``(I) the numbers and varieties of organic crops insured;
       ``(II) the development of new insurance approaches; and
       ``(III) the progress of implementing the initiatives 
     required under this paragraph, including the rate at which 
     additional price elections are adopted for organic crops.

       ``(ii) Recommendations.--The report shall include such 
     recommendations as the Corporation considers appropriate to 
     improve Federal crop insurance coverage for organic crops.
       ``(11) Energy crop insurance policy.--
       ``(A) Definition of dedicated energy crop.--In this 
     subsection, the term `dedicated energy crop' means an annual 
     or perennial crop that--
       ``(i) is grown expressly for the purpose of producing a 
     feedstock for renewable biofuel, renewable electricity, or 
     biobased products; and
       ``(ii) is not typically used for food, feed, or fiber.
       ``(B) Authority.--The Corporation shall offer to enter into 
     1 or more contracts with qualified entities to carry out 
     research and development regarding a policy to insure 
     dedicated energy crops.
       ``(C) Research and development.--Research and development 
     described in subparagraph (B) shall evaluate the 
     effectiveness of risk management tools for the production of 
     dedicated energy crops, including policies and plans of 
     insurance that--
       ``(i) are based on market prices and yields;
       ``(ii) to the extent that insufficient data exist to 
     develop a policy based on market prices and yields, evaluate 
     the policies and plans of insurance based on the use of 
     weather or rainfall indices to protect the interests of crop 
     producers; and
       ``(iii) provide protection for production or revenue 
     losses, or both.
       ``(12) Aquaculture insurance policy.--
       ``(A) Definition of aquaculture.--In this subsection:
       ``(i) In general.--The term `aquaculture' means the 
     propagation and rearing of aquatic species in controlled or 
     selected environments, including shellfish cultivation on 
     grants or leased bottom and ocean ranching.
       ``(ii) Exclusion.--The term `aquaculture' does not include 
     the private ocean ranching of Pacific salmon for profit in 
     any State in which private ocean ranching of Pacific salmon 
     is prohibited by any law (including regulations).
       ``(B) Authority.--
       ``(i) In general.--As soon as practicable after the date of 
     enactment of the Food, Conservation, and Energy Act of 2008, 
     the Corporation shall offer to enter into 3 or more contracts 
     with qualified entities to carry out research and development 
     regarding a policy to insure the production of aquacultural 
     species in aquaculture operations.
       ``(ii) Bivalve species.--At least 1 of the contracts 
     described in clause (i) shall address insurance of bivalve 
     species, including--

       ``(I) American oysters (crassostrea virginica);
       ``(II) hard clams (mercenaria mercenaria);
       ``(III) Pacific oysters (crassostrea gigas);
       ``(IV) Manila clams (tapes phillipinnarium); or
       ``(V) blue mussels (mytilus edulis).

       ``(iii) Freshwater species.--At least 1 of the contracts 
     described in clause (i) shall address insurance of freshwater 
     species, including--

       ``(I) catfish (icataluridae);
       ``(II) rainbow trout (oncorhynchus mykiss);
       ``(III) largemouth bass (micropterus salmoides);
       ``(IV) striped bass (morone saxatilis);
       ``(V) bream (abramis brama);
       ``(VI) shrimp (penaeus); or
       ``(VII) tilapia (oreochromis niloticus).

       ``(iv) Saltwater species.--At least 1 of the contracts 
     described in clause (i) shall address insurance of saltwater 
     species, including--

       ``(I) Atlantic salmon (salmo salar); or
       ``(II) shrimp (penaeus).

       ``(C) Research and development.--Research and development 
     described in subparagraph (B) shall evaluate the 
     effectiveness of policies and

[[Page H3537]]

     plans of insurance for the production of aquacultural species 
     in aquaculture operations, including policies and plans of 
     insurance that--
       ``(i) are based on market prices and yields;
       ``(ii) to the extent that insufficient data exist to 
     develop a policy based on market prices and yields, evaluate 
     how best to incorporate insuring of production of 
     aquacultural species in aquaculture operations into existing 
     policies covering adjusted gross revenue; and
       ``(iii) provide protection for production or revenue 
     losses, or both.
       ``(13) Poultry insurance policy.--
       ``(A) Definition of poultry.--In this paragraph, the term 
     `poultry' has the meaning given the term in section 2(a) of 
     the Packers and Stockyards Act, 1921 (7 U.S.C. 182(a)).
       ``(B) Authority.--The Corporation shall offer to enter into 
     1 or more contracts with qualified entities to carry out 
     research and development regarding a policy to insure 
     commercial poultry production.
       ``(C) Research and development.--Research and development 
     described in subparagraph (B) shall evaluate the 
     effectiveness of risk management tools for the production of 
     poultry, including policies and plans of insurance that 
     provide protection for production or revenue losses, or both, 
     while the poultry is in production.
       ``(14) Apiary policies.--The Corporation shall offer to 
     enter into a contract with a qualified entity to carry out 
     research and development regarding insurance policies that 
     cover loss of bees.
       ``(15) Adjusted gross revenue policies for beginning 
     producers.--The Corporation shall offer to enter into a 
     contract with a qualified entity to carry out research and 
     development into needed modifications of adjusted gross 
     revenue insurance policies, consistent with principles of 
     actuarial sufficiency, to permit coverage for beginning 
     producers with no previous production history, including 
     permitting those producers to have production and premium 
     rates based on information with similar farming operations.
       ``(16) Skiprow cropping practices.--
       ``(A) In general.--The Corporation shall offer to enter 
     into a contract with a qualified entity to carry out research 
     into needed modifications of policies to insure corn and 
     sorghum produced in the Central Great Plains (as determined 
     by the Agricultural Research Service) through use of skiprow 
     cropping practices.
       ``(B) Research.--Research described in subparagraph (A) 
     shall--
       ``(i) review existing research on skiprow cropping 
     practices and actual production history of producers using 
     skiprow cropping practices; and
       ``(ii) evaluate the effectiveness of risk management tools 
     for producers using skiprow cropping practices, including--

       ``(I) the appropriateness of rules in existence as of the 
     date of enactment of this paragraph relating to the 
     determination of acreage planted in skiprow patterns; and
       ``(II) whether policies for crops produced through skiprow 
     cropping practices reflect actual production capabilities.''.

     SEC. 12024. FUNDING FROM INSURANCE FUND.

       Section 522(e) of the Federal Crop Insurance Act (7 U.S.C. 
     1522(e)) is amended--
       (1) in paragraph (1), by striking ``$10,000,000'' and all 
     that follows through the end of the paragraph and inserting 
     ``$7,500,000 for fiscal year 2008 and each subsequent fiscal 
     year'';
       (2) in paragraph (2)(A), by striking ``$20,000,000 for'' 
     and all that follows through ``year 2004'' and inserting 
     ``$12,500,000 for fiscal year 2008''; and
       (3) in paragraph (3), by striking ``the Corporation may 
     use'' and all that follows through the end of the paragraph 
     and inserting ``the Corporation may use--
       ``(A) not more than $5,000,000 for each fiscal year to 
     improve program integrity, including by--
       ``(i) increasing compliance-related training;
       ``(ii) improving analysis tools and technology regarding 
     compliance;
       ``(iii) use of information technology, as determined by the 
     Corporation; and
       ``(iv) identifying and using innovative compliance 
     strategies; and
       ``(B) any excess amounts to carry out other activities 
     authorized under this section.''.

     SEC. 12025. PILOT PROGRAMS.

       (a) In General.--Section 523 of the Federal Crop Insurance 
     Act (7 U.S.C. 1523) is amended by adding at the end the 
     following:
       ``(f) Camelina Pilot Program.--
       ``(1) In general.--The Corporation shall establish a pilot 
     program under which producers or processors of camelina may 
     propose for approval by the Board policies or plans of 
     insurance for camelina, in accordance with section 508(h).
       ``(2) Determination by board.--The Board shall approve a 
     policy or plan of insurance proposed under paragraph (1) if, 
     as determined by the Board, the policy or plan of insurance--
       ``(A) protects the interests of producers;
       ``(B) is actuarially sound; and
       ``(C) meets the requirements of this title.
       ``(3) Timeframe.--The Corporation shall commence the 
     camelina insurance pilot program as soon as practicable after 
     the date of enactment of this subsection.
       ``(g) Sesame Insurance Pilot Program.--
       ``(1) In general.--In addition to any other authority of 
     the Corporation, the Corporation shall establish and carry 
     out a pilot program under which a producer of nondehiscent 
     sesame under contract may elect to obtain multiperil crop 
     insurance, as determined by the Corporation.
       ``(2) Terms and conditions.--The multiperil crop insurance 
     offered under the sesame insurance pilot program shall--
       ``(A) be offered through reinsurance arrangements with 
     private insurance companies;
       ``(B) be actuarially sound; and
       ``(C) require the payment of premiums and administrative 
     fees by a producer obtaining the insurance.
       ``(3) Location.--The sesame insurance pilot program shall 
     be carried out only in the State of Texas.
       ``(4) Duration.--The Corporation shall commence the sesame 
     insurance pilot program as soon as practicable after the date 
     of the enactment of this subsection.
       ``(h) Grass Seed Insurance Pilot Program.--
       ``(1) In general.--In addition to any other authority of 
     the Corporation, the Corporation shall establish and carry 
     out a grass seed pilot program under which a producer of 
     Kentucky bluegrass or perennial rye grass under contract may 
     elect to obtain multiperil crop insurance, as determined by 
     the Corporation.
       ``(2) Terms and conditions.--The multiperil crop insurance 
     offered under the grass seed insurance pilot program shall--
       ``(A) be offered through reinsurance arrangements with 
     private insurance companies;
       ``(B) be actuarially sound; and
       ``(C) require the payment of premiums and administrative 
     fees by a producer obtaining the insurance.
       ``(3) Location.--The grass seed insurance pilot program 
     shall be carried out only in each of the States of Minnesota 
     and North Dakota.
       ``(4) Duration.--The Corporation shall commence the grass 
     seed insurance pilot program as soon as practicable after the 
     date of the enactment of this subsection.''.
       (b) Conforming Amendment.--Section 196(a)(2)(B) of the 
     Federal Agriculture Improvement and Reform Act of 1996 (7 
     U.S.C. 7333(a)(2)(B)) is amended by adding ``camelina,'' 
     after ``sea oats,''.

     SEC. 12026. RISK MANAGEMENT EDUCATION FOR BEGINNING FARMERS 
                   OR RANCHERS.

       Section 524(a) of the Federal Crop Insurance Act (7 U.S.C. 
     1524(a)) is amended--
       (1) in paragraph (1), by striking ``paragraph (4)'' and 
     inserting ``paragraph (5)'';
       (2) by redesignating paragraph (4) as paragraph (5); and
       (3) by inserting after paragraph (3) the following:
       ``(4) Requirements.--In carrying out the programs 
     established under paragraphs (2) and (3), the Secretary shall 
     place special emphasis on risk management strategies, 
     education, and outreach specifically targeted at--
       ``(A) beginning farmers or ranchers;
       ``(B) legal immigrant farmers or ranchers that are 
     attempting to become established producers in the United 
     States;
       ``(C) socially disadvantaged farmers or ranchers;
       ``(D) farmers or ranchers that--
       ``(i) are preparing to retire; and
       ``(ii) are using transition strategies to help new farmers 
     or ranchers get started; and
       ``(E) new or established farmers or ranchers that are 
     converting production and marketing systems to pursue new 
     markets.''.

     SEC. 12027. COVERAGE FOR AQUACULTURE UNDER NONINSURED CROP 
                   ASSISTANCE PROGRAM.

       Section 196(c)(2) of the Federal Agriculture Improvement 
     and Reform Act of 1996 (7 U.S.C. 7333(c)(2)) is amended--
       (1) by striking ``On making'' and inserting the following:
       ``(A) In general.--On making''; and
       (2) by adding at the end the following:
       ``(B) Aquaculture producers.--On making a determination 
     described in subsection (a)(3) for aquaculture producers, the 
     Secretary shall provide assistance under this section to 
     aquaculture producers from all losses related to drought.''.

     SEC. 12028. INCREASE IN SERVICE FEES FOR NONINSURED CROP 
                   ASSISTANCE PROGRAM.

       Section 196(k)(1) of the Federal Agriculture Improvement 
     and Reform Act of 1996 (7 U.S.C. 7333(k)(1)) is amended--
       (1) in subparagraph (A), by striking ``$100'' and inserting 
     ``$250''; and
       (2) in subparagraph (B)--
       (A) by striking ``$300'' and inserting ``$750''; and
       (B) by striking ``$900'' and inserting ``$1,875''.

     SEC. 12029. DETERMINATION OF CERTAIN SWEET POTATO PRODUCTION.

       Section 9001(d) of the U.S. Troop Readiness, Veterans' 
     Care, Katrina Recovery, and Iraq Accountability 
     Appropriations Act, 2007 (Public Law 110-28; 121 Stat. 211) 
     is amended--
       (1) by redesignating paragraph (8) as paragraph (9); and
       (2) by inserting after paragraph (7) the following:
       ``(8) Sweet potatoes.--
       ``(A) Data.--In the case of sweet potatoes, any data 
     obtained under a pilot program carried out by the Risk 
     Management Agency shall not be considered for the purpose of 
     determining the quantity of production under the crop 
     disaster assistance program established under this section.
       ``(B) Extension of deadline.--If this paragraph is not 
     implemented before the sign-up deadline for the crop disaster 
     assistance program established under this section, the 
     Secretary shall extend the deadline for producers of sweet 
     potatoes to permit sign-up for the program in accordance with 
     this paragraph.''.

     SEC. 12030. DECLINING YIELD REPORT.

       Not later than 180 days after the date of enactment of this 
     Act, the Secretary shall submit to the Committee on 
     Agriculture of the House of Representatives and the Committee 
     on Agriculture, Nutrition, and Forestry of the Senate a 
     report containing details about activities and administrative 
     options of the Federal Crop Insurance Corporation and Risk 
     Management Agency that address issues relating to--

[[Page H3538]]

       (1) declining yields on the actual production histories of 
     producers; and
       (2) declining and variable yields for perennial crops, 
     including pecans.

     SEC. 12031. DEFINITION OF BASIC UNIT.

       The Secretary shall not modify the definition of ``basic 
     unit'' in accordance with the proposed regulations entitled 
     ``Common Crop Insurance Regulations'' (72 Fed. Reg. 28895; 
     relating to common crop insurance regulations) or any 
     successor regulation.

     SEC. 12032. CROP INSURANCE MEDIATION.

       Section 275 of the Department of Agriculture Reorganization 
     Act of 1994 (7 U.S.C. 6995) is amended--
       (1) by striking ``If an officer'' and inserting the 
     following:
       ``(a) In General.--If an officer'';
       (2) by striking ``With respect to'' and inserting the 
     following:
       ``(b) Farm Service Agency.--With respect to'';
       (3) by striking ``If a mediation''; and inserting the 
     following:
       ``(c) Mediation.--If a mediation''; and
       (4) in subsection (c) (as so designated)--
       (A) by striking ``participant shall be offered'' and 
     inserting ``participant shall--
       ``(1) be offered''; and
       (B) by striking the period at the end and inserting the 
     following: ``; and
       ``(2) to the maximum extent practicable, be allowed to use 
     both informal agency review and mediation to resolve disputes 
     under that title.''.

     SEC. 12033. SUPPLEMENTAL AGRICULTURAL DISASTER ASSISTANCE.

       (a) In General.--The Federal Crop Insurance Act (7 U.S.C. 
     1501 et seq.) is amended by adding at the end the following:

      ``Subtitle B--Supplemental Agricultural Disaster Assistance

     ``SEC. 531. SUPPLEMENTAL AGRICULTURAL DISASTER ASSISTANCE.

       ``(a) Definitions.--In this section:
       ``(1) Actual production history yield.--The term `actual 
     production history yield' means the weighted average of the 
     actual production history for each insurable commodity or 
     noninsurable commodity, as calculated under subtitle A or the 
     noninsured crop disaster assistance program, respectively.
       ``(2) Adjusted actual production history yield.--The term 
     `adjusted actual production history yield' means--
       ``(A) in the case of an eligible producer on a farm that 
     has at least 4 years of actual production history yields for 
     an insurable commodity that are established other than 
     pursuant to section 508(g)(4)(B), the actual production 
     history for the eligible producer without regard to any 
     yields established under that section;
       ``(B) in the case of an eligible producer on a farm that 
     has less than 4 years of actual production history yields for 
     an insurable commodity, of which 1 or more were established 
     pursuant to section 508(g)(4)(B), the actual production 
     history for the eligible producer as calculated without 
     including the lowest of the yields established pursuant to 
     section 508(g)(4)(B); and
       ``(C) in all other cases, the actual production history of 
     the eligible producer on a farm.
       ``(3) Adjusted noninsured crop disaster assistance program 
     yield.--The term `adjusted noninsured crop disaster 
     assistance program yield' means--
       ``(A) in the case of an eligible producer on a farm that 
     has at least 4 years of production history under the 
     noninsured crop disaster assistance program that are not 
     replacement yields, the noninsured crop disaster assistance 
     program yield without regard to any replacement yields;
       ``(B) in the case of an eligible producer on a farm that 
     less than 4 years of production history under the noninsured 
     crop disaster assistance program that are not replacement 
     yields, the noninsured crop disaster assistance program yield 
     as calculated without including the lowest of the replacement 
     yields; and
       ``(C) in all other cases, the production history of the 
     eligible producer on the farm under the noninsured crop 
     disaster assistance program.
       ``(4) Counter-cyclical program payment yield.--The term 
     `counter-cyclical program payment yield' means the weighted 
     average payment yield established under section 1102 of the 
     Farm Security and Rural Investment Act of 2002 (7 U.S.C. 
     7912), section 1102 of the Food, Conservation, and Energy Act 
     of 2008, or a successor section.
       ``(5) Disaster county.--
       ``(A) In general.--The term `disaster county' means a 
     county included in the geographic area covered by a 
     qualifying natural disaster declaration.
       ``(B) Inclusion.--The term `disaster county' includes--
       ``(i) a county contiguous to a county described in 
     subparagraph (A); and
       ``(ii) any farm in which, during a calendar year, the total 
     loss of production of the farm relating to weather is greater 
     than 50 percent of the normal production of the farm, as 
     determined by the Secretary.
       ``(6) Eligible producer on a farm.--
       ``(A) In general.--The term `eligible producer on a farm' 
     means an individual or entity described in subparagraph (B) 
     that, as determined by the Secretary, assumes the production 
     and market risks associated with the agricultural production 
     of crops or livestock.
       ``(B) Description.--An individual or entity referred to in 
     subparagraph (A) is--
       ``(i) a citizen of the United States;
       ``(ii) a resident alien;
       ``(iii) a partnership of citizens of the United States; or
       ``(iv) a corporation, limited liability corporation, or 
     other farm organizational structure organized under State 
     law.
       ``(7) Farm.--
       ``(A) In general.--The term `farm' means, in relation to an 
     eligible producer on a farm, the sum of all crop acreage in 
     all counties that is planted or intended to be planted for 
     harvest by the eligible producer.
       ``(B) Aquaculture.--In the case of aquaculture, the term 
     `farm' means, in relation to an eligible producer on a farm, 
     all fish being produced in all counties that are intended to 
     be harvested for sale by the eligible producer.
       ``(C) Honey.--In the case of honey, the term `farm' means, 
     in relation to an eligible producer on a farm, all bees and 
     beehives in all counties that are intended to be harvested 
     for a honey crop by the eligible producer.
       ``(8) Farm-raised fish.--The term `farm-raised fish' means 
     any aquatic species that is propagated and reared in a 
     controlled environment.
       ``(9) Insurable commodity.--The term `insurable commodity' 
     means an agricultural commodity (excluding livestock) for 
     which the producer on a farm is eligible to obtain a policy 
     or plan of insurance under subtitle A.
       ``(10) Livestock.--The term `livestock' includes--
       ``(A) cattle (including dairy cattle);
       ``(B) bison;
       ``(C) poultry;
       ``(D) sheep;
       ``(E) swine;
       ``(F) horses; and
       ``(G) other livestock, as determined by the Secretary.
       ``(11) Noninsurable commodity.--The term `noninsurable 
     commodity' means a crop for which the eligible producers on a 
     farm are eligible to obtain assistance under the noninsured 
     crop assistance program.
       ``(12) Noninsured crop assistance program.--The term 
     `noninsured crop assistance program' means the program 
     carried out under section 196 of the Federal Agriculture 
     Improvement and Reform Act of 1996 (7 U.S.C. 7333).
       ``(13) Qualifying natural disaster declaration.--The term 
     `qualifying natural disaster declaration' means a natural 
     disaster declared by the Secretary for production losses 
     under section 321(a) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 1961(a)).
       ``(14) Secretary.--The term `Secretary' means the Secretary 
     of Agriculture.
       ``(15) Socially disadvantaged farmer or rancher.--The term 
     `socially disadvantaged farmer or rancher' has the meaning 
     given the term in section 2501(e) of the Food, Agriculture, 
     Conservation, and Trade Act of 1990 (7 U.S.C. 2279(e)).
       ``(16) State.--The term `State' means--
       ``(A) a State;
       ``(B) the District of Columbia;
       ``(C) the Commonwealth of Puerto Rico; and
       ``(D) any other territory or possession of the United 
     States.
       ``(17) Trust fund.--The term `Trust Fund' means the 
     Agricultural Disaster Relief Trust Fund established under 
     section 902 of the Trade Act of 1974.
       ``(18) United states.--The term `United States' when used 
     in a geographical sense, means all of the States.
       ``(b) Supplemental Revenue Assistance Payments.--
       ``(1) In general.--The Secretary shall use such sums as are 
     necessary from the Trust Fund to make crop disaster 
     assistance payments to eligible producers on farms in 
     disaster counties that have incurred crop production losses 
     or crop quality losses, or both, during the crop year.
       ``(2) Amount.--
       ``(A) In general.--Subject to subparagraph (B), the 
     Secretary shall provide crop disaster assistance payments 
     under this section to an eligible producer on a farm in an 
     amount equal to 60 percent of the difference between--
       ``(i) the disaster assistance program guarantee, as 
     described in paragraph (3); and
       ``(ii) the total farm revenue for a farm, as described in 
     paragraph (4).
       ``(B) Limitation.--The disaster assistance program 
     guarantee for a crop used to calculate the payments for a 
     farm under subparagraph (A)(i) may not be greater than 90 
     percent of the sum of the expected revenue, as described in 
     paragraph (5) for each of the crops on a farm, as determined 
     by the Secretary.
       ``(3) Supplemental revenue assistance program guarantee.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, the supplemental assistance program guarantee 
     shall be the sum obtained by adding--
       ``(i) for each insurable commodity on the farm, 115 percent 
     of the product obtained by multiplying--

       ``(I) a payment rate for the commodity that is equal to the 
     price election for the commodity elected by the eligible 
     producer;
       ``(II) the payment acres for the commodity that is equal to 
     the number of acres planted, or prevented from being planted, 
     to the commodity;
       ``(III) the payment yield for the commodity that is equal 
     to the percentage of the crop insurance yield elected by the 
     producer of the higher of--

       ``(aa) the adjusted actual production history yield; or
       ``(bb) the counter-cyclical program payment yield for each 
     crop; and
       ``(ii) for each noninsurable commodity on a farm, 120 
     percent of the product obtained by multiplying--

       ``(I) a payment rate for the commodity that is equal to 100 
     percent of the noninsured crop assistance program established 
     price for the commodity;
       ``(II) the payment acres for the commodity that is equal to 
     the number of acres planted, or prevented from being planted, 
     to the commodity; and
       ``(III) the payment yield for the commodity that is equal 
     to the higher of--

[[Page H3539]]

       ``(aa) the adjusted noninsured crop assistance program 
     yield guarantee; or
       ``(bb) the counter-cyclical program payment yield for each 
     crop.
       ``(B) Adjustment insurance guarantee.--Notwithstanding 
     subparagraph (A), in the case of an insurable commodity for 
     which a plan of insurance provides for an adjustment in the 
     guarantee, such as in the case of prevented planting, the 
     adjusted insurance guarantee shall be the basis for 
     determining the disaster assistance program guarantee for the 
     insurable commodity.
       ``(C) Adjusted assistance level.--Notwithstanding 
     subparagraph (A), in the case of a noninsurable commodity for 
     which the noninsured crop assistance program provides for an 
     adjustment in the level of assistance, such as in the case of 
     unharvested crops, the adjusted assistance level shall be the 
     basis for determining the disaster assistance program 
     guarantee for the noninsurable commodity.
       ``(D) Equitable treatment for non-yield based policies.--
     The Secretary shall establish equitable treatment for non-
     yield based policies and plans of insurance, such as the 
     Adjusted Gross Revenue Lite insurance program.
       ``(4) Farm revenue.--
       ``(A) In general.--For purposes of this subsection, the 
     total farm revenue for a farm, shall equal the sum obtained 
     by adding--
       ``(i) the estimated actual value for each crop produced on 
     a farm by using the product obtained by multiplying--

       ``(I) the actual crop acreage harvested by an eligible 
     producer on a farm;
       ``(II) the estimated actual yield of the crop production; 
     and
       ``(III) subject to subparagraphs (B) and (C), to the extent 
     practicable, the national average market price received for 
     the marketing year, as determined by the Secretary;

       ``(ii) 15 percent of amount of any direct payments made to 
     the producer under sections 1103 and 1303 of the Food, 
     Conservation, and Energy Act of 2008 or successor sections;
       ``(iii) the total amount of any counter-cyclical payments 
     made to the producer under sections 1104 and 1304 of the 
     Food, Conservation, and Energy Act of 2008 or successor 
     sections or of any average crop revenue election payments 
     made to the producer under section 1105 of that Act;
       ``(iv) the total amount of any loan deficiency payments, 
     marketing loan gains, and marketing certificate gains made to 
     the producer under subtitles B and C of the Food, 
     Conservation, and Energy Act of 2008 or successor subtitles;
       ``(v) the amount of payments for prevented planting on a 
     farm;
       ``(vi) the amount of crop insurance indemnities received by 
     an eligible producer on a farm for each crop on a farm;
       ``(vii) the amount of payments an eligible producer on a 
     farm received under the noninsured crop assistance program 
     for each crop on a farm; and
       ``(viii) the value of any other natural disaster assistance 
     payments provided by the Federal Government to an eligible 
     producer on a farm for each crop on a farm for the same loss 
     for which the eligible producer is seeking assistance.
       ``(B) Adjustment.--The Secretary shall adjust the average 
     market price received by the eligible producer on a farm--
       ``(i) to reflect the average quality discounts applied to 
     the local or regional market price of a crop or mechanically 
     harvested forage due to a reduction in the intrinsic 
     characteristics of the production resulting from adverse 
     weather, as determined annually by the State office of the 
     Farm Service Agency; and
       ``(ii) to account for a crop the value of which is reduced 
     due to excess moisture resulting from a disaster-related 
     condition.
       ``(C) Maximum amount for certain crops.--With respect to a 
     crop for which an eligible producer on a farm receives 
     assistance under the noninsured crop assistance program, the 
     national average market price received during the marketing 
     year shall be an amount not more than 100 percent of the 
     price of the crop established under the noninsured crop 
     assistance program.
       ``(5) Expected revenue.--The expected revenue for each crop 
     on a farm shall equal the sum obtained by adding--
       ``(A) the product obtained by multiplying--
       ``(i) the greatest of--

       ``(I) the adjusted actual production history yield of the 
     eligible producer on a farm; and
       ``(II) the counter-cyclical program payment yield;

       ``(ii) the acreage planted or prevented from being planted 
     for each crop; and
       ``(iii) 100 percent of the insurance price guarantee; and
       ``(B) the product obtained by multiplying--
       ``(i) 100 percent of the adjusted noninsured crop 
     assistance program yield; and
       ``(ii) 100 percent of the noninsured crop assistance 
     program price for each of the crops on a farm.
       ``(c) Livestock Indemnity Payments.--
       ``(1) Payments.--The Secretary shall use such sums as are 
     necessary from the Trust Fund to make livestock indemnity 
     payments to eligible producers on farms that have incurred 
     livestock death losses in excess of the normal mortality due 
     to adverse weather, as determined by the Secretary, during 
     the calendar year, including losses due to hurricanes, 
     floods, blizzards, disease, wildfires, extreme heat, and 
     extreme cold.
       ``(2) Payment rates.--Indemnity payments to an eligible 
     producer on a farm under paragraph (1) shall be made at a 
     rate of 75 percent of the market value of the applicable 
     livestock on the day before the date of death of the 
     livestock, as determined by the Secretary.
       ``(d) Livestock Forage Disaster Program.--
       ``(1) Definitions.--In this subsection:
       ``(A) Covered livestock.--
       ``(i) In general.--Except as provided in clause (ii), the 
     term `covered livestock' means livestock of an eligible 
     livestock producer that, during the 60 days prior to the 
     beginning date of a qualifying drought or fire condition, as 
     determined by the Secretary, the eligible livestock 
     producer--

       ``(I) owned;
       ``(II) leased;
       ``(III) purchased;
       ``(IV) entered into a contract to purchase;
       ``(V) is a contract grower; or
       ``(VI) sold or otherwise disposed of due to qualifying 
     drought conditions during--

       ``(aa) the current production year; or
       ``(bb) subject to paragraph (3)(B)(ii), 1 or both of the 2 
     production years immediately preceding the current production 
     year.
       ``(ii) Exclusion.--The term `covered livestock' does not 
     include livestock that were or would have been in a feedlot, 
     on the beginning date of the qualifying drought or fire 
     condition, as a part of the normal business operation of the 
     eligible livestock producer, as determined by the Secretary.
       ``(B) Drought monitor.--The term `drought monitor' means a 
     system for classifying drought severity according to a range 
     of abnormally dry to exceptional drought, as defined by the 
     Secretary.
       ``(C) Eligible livestock producer.--
       ``(i) In general.--The term `eligible livestock producer' 
     means an eligible producer on a farm that--

       ``(I) is an owner, cash or share lessee, or contract grower 
     of covered livestock that provides the pastureland or grazing 
     land, including cash-leased pastureland or grazing land, for 
     the livestock;
       ``(II) provides the pastureland or grazing land for covered 
     livestock, including cash-leased pastureland or grazing land 
     that is physically located in a county affected by drought;
       ``(III) certifies grazing loss; and
       ``(IV) meets all other eligibility requirements established 
     under this subsection.

       ``(ii) Exclusion.--The term `eligible livestock producer' 
     does not include an owner, cash or share lessee, or contract 
     grower of livestock that rents or leases pastureland or 
     grazing land owned by another person on a rate-of-gain basis.
       ``(D) Normal carrying capacity.--The term `normal carrying 
     capacity', with respect to each type of grazing land or 
     pastureland in a county, means the normal carrying capacity, 
     as determined under paragraph (3)(D)(i), that would be 
     expected from the grazing land or pastureland for livestock 
     during the normal grazing period, in the absence of a drought 
     or fire that diminishes the production of the grazing land or 
     pastureland.
       ``(E) Normal grazing period.--The term `normal grazing 
     period', with respect to a county, means the normal grazing 
     period during the calendar year for the county, as determined 
     under paragraph (3)(D)(i).
       ``(2) Program.--The Secretary shall use such sums as are 
     necessary from the Trust Fund to provide compensation for 
     losses to eligible livestock producers due to grazing losses 
     for covered livestock due to--
       ``(A) a drought condition, as described in paragraph (3); 
     or
       ``(B) fire, as described in paragraph (4).
       ``(3) Assistance for losses due to drought conditions.--
       ``(A) Eligible losses.--
       ``(i) In general.--An eligible livestock producer may 
     receive assistance under this subsection only for grazing 
     losses for covered livestock that occur on land that--

       ``(I) is native or improved pastureland with permanent 
     vegetative cover; or
       ``(II) is planted to a crop planted specifically for the 
     purpose of providing grazing for covered livestock.

       ``(ii) Exclusions.--An eligible livestock producer may not 
     receive assistance under this subsection for grazing losses 
     that occur on land used for haying or grazing under the 
     conservation reserve program established under subchapter B 
     of chapter 1 of subtitle D of title XII of the Food Security 
     Act of 1985 (16 U.S.C. 3831 et seq.).
       ``(B) Monthly payment rate.--
       ``(i) In general.--Except as provided in clause (ii), the 
     payment rate for assistance under this paragraph for 1 month 
     shall, in the case of drought, be equal to 60 percent of the 
     lesser of--

       ``(I) the monthly feed cost for all covered livestock owned 
     or leased by the eligible livestock producer, as determined 
     under subparagraph (C); or
       ``(II) the monthly feed cost calculated by using the normal 
     carrying capacity of the eligible grazing land of the 
     eligible livestock producer.

       ``(ii) Partial compensation.--In the case of an eligible 
     livestock producer that sold or otherwise disposed of covered 
     livestock due to drought conditions in 1 or both of the 2 
     production years immediately preceding the current production 
     year, as determined by the Secretary, the payment rate shall 
     be 80 percent of the payment rate otherwise calculated in 
     accordance with clause (i).
       ``(C) Monthly feed cost.--
       ``(i) In general.--The monthly feed cost shall equal the 
     product obtained by multiplying--

       ``(I) 30 days;
       ``(II) a payment quantity that is equal to the feed grain 
     equivalent, as determined under clause (ii); and
       ``(III) a payment rate that is equal to the corn price per 
     pound, as determined under clause (iii).

       ``(ii) Feed grain equivalent.--For purposes of clause 
     (i)(I), the feed grain equivalent shall equal--

[[Page H3540]]

       ``(I) in the case of an adult beef cow, 15.7 pounds of corn 
     per day; or
       ``(II) in the case of any other type of weight of 
     livestock, an amount determined by the Secretary that 
     represents the average number of pounds of corn per day 
     necessary to feed the livestock.

       ``(iii) Corn price per pound.--For purposes of clause 
     (i)(II), the corn price per pound shall equal the quotient 
     obtained by dividing--

       ``(I) the higher of--

       ``(aa) the national average corn price per bushel for the 
     12-month period immediately preceding March 1 of the year for 
     which the disaster assistance is calculated; or
       ``(bb) the national average corn price per bushel for the 
     24-month period immediately preceding that March 1; by

       ``(II) 56.

       ``(D) Normal grazing period and drought monitor 
     intensity.--
       ``(i) FSA county committee determinations.--

       ``(I) In general.--The Secretary shall determine the normal 
     carrying capacity and normal grazing period for each type of 
     grazing land or pastureland in the county served by the 
     applicable committee.
       ``(II) Changes.--No change to the normal carrying capacity 
     or normal grazing period established for a county under 
     subclause (I) shall be made unless the change is requested by 
     the appropriate State and county Farm Service Agency 
     committees.

       ``(ii) Drought intensity.--

       ``(I) D2.--An eligible livestock producer that owns or 
     leases grazing land or pastureland that is physically located 
     in a county that is rated by the U.S. Drought Monitor as 
     having a D2 (severe drought) intensity in any area of the 
     county for at least 8 consecutive weeks during the normal 
     grazing period for the county, as determined by the 
     Secretary, shall be eligible to receive assistance under this 
     paragraph in an amount equal to 1 monthly payment using the 
     monthly payment rate determined under subparagraph (B).
       ``(II) D3.--An eligible livestock producer that owns or 
     leases grazing land or pastureland that is physically located 
     in a county that is rated by the U.S. Drought Monitor as 
     having at least a D3 (extreme drought) intensity in any area 
     of the county at any time during the normal grazing period 
     for the county, as determined by the Secretary, shall be 
     eligible to receive assistance under this paragraph--

       ``(aa) in an amount equal to 2 monthly payments using the 
     monthly payment rate determined under subparagraph (B); or
       ``(bb) if the county is rated as having a D3 (extreme 
     drought) intensity in any area of the county for at least 4 
     weeks during the normal grazing period for the county, or is 
     rated as having a D4 (exceptional drought) intensity in any 
     area of the county at any time during the normal grazing 
     period, in an amount equal to 3 monthly payments using the 
     monthly payment rate determined under subparagraph (B).
       ``(4) Assistance for losses due to fire on public managed 
     land.--
       ``(A) In general.--An eligible livestock producer may 
     receive assistance under this paragraph only if--
       ``(i) the grazing losses occur on rangeland that is managed 
     by a Federal agency; and
       ``(ii) the eligible livestock producer is prohibited by the 
     Federal agency from grazing the normal permitted livestock on 
     the managed rangeland due to a fire.
       ``(B) Payment rate.--The payment rate for assistance under 
     this paragraph shall be equal to 50 percent of the monthly 
     feed cost for the total number of livestock covered by the 
     Federal lease of the eligible livestock producer, as 
     determined under paragraph (3)(C).
       ``(C) Payment duration.--
       ``(i) In general.--Subject to clause (ii), an eligible 
     livestock producer shall be eligible to receive assistance 
     under this paragraph for the period--

       ``(I) beginning on the date on which the Federal agency 
     excludes the eligible livestock producer from using the 
     managed rangeland for grazing; and
       ``(II) ending on the last day of the Federal lease of the 
     eligible livestock producer.

       ``(ii) Limitation.--An eligible livestock producer may only 
     receive assistance under this paragraph for losses that occur 
     on not more than 180 days per year.
       ``(5) Minimum risk management purchase requirements.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, a livestock producer shall only be eligible for 
     assistance under this subsection if the livestock producer--
       ``(i) obtained a policy or plan of insurance under subtitle 
     A for the grazing land incurring the losses for which 
     assistance is being requested; or
       ``(ii) filed the required paperwork, and paid the 
     administrative fee by the applicable State filing deadline, 
     for the noninsured crop assistance program for the grazing 
     land incurring the losses for which assistance is being 
     requested.
       ``(B) Waiver for socially disadvantaged, limited resource, 
     or beginning farmer or rancher.--In the case of an eligible 
     livestock producer that is a socially disadvantaged farmer or 
     rancher or limited resource or beginning farmer or rancher, 
     as determined by the Secretary, the Secretary may--
       ``(i) waive subparagraph (A); and
       ``(ii) provide disaster assistance under this section at a 
     level that the Secretary determines to be equitable and 
     appropriate.
       ``(C) Waiver for 2008 calendar year.--In the case of an 
     eligible livestock producer that suffered losses on grazing 
     land during the 2008 calendar year but does not meet the 
     requirements of subparagraph (A), the Secretary shall waive 
     subparagraph (A) if the eligible livestock producer pays a 
     fee in an amount equal to the applicable noninsured crop 
     assistance program fee or catastrophic risk protection plan 
     fee required under subparagraph (A) to the Secretary not 
     later than 90 days after the date of enactment of this 
     subtitle.
       ``(D) Equitable relief.--
       ``(i) In general.--The Secretary may provide equitable 
     relief to an eligible livestock producer that is otherwise 
     ineligible or unintentionally fails to meet the requirements 
     of subparagraph (A) for the grazing land incurring the loss 
     on a case-by-case basis, as determined by the Secretary.
       ``(ii) 2008 calendar year.--In the case of an eligible 
     livestock producer that suffered losses on grazing land 
     during the 2008 calendar year, the Secretary shall take 
     special consideration to provide equitable relief in cases in 
     which the eligible livestock producer failed to meet the 
     requirements of subparagraph (A) due to the enactment of this 
     subtitle after the closing date of sales periods for crop 
     insurance under subtitle A and the noninsured crop assistance 
     program.
       ``(6) No duplicative payments.--
       ``(A) In general.--An eligible livestock producer may elect 
     to receive assistance for grazing or pasture feed losses due 
     to drought conditions under paragraph (3) or fire under 
     paragraph (4), but not both for the same loss, as determined 
     by the Secretary.
       ``(B) Relationship to supplemental revenue assistance.--An 
     eligible livestock producer that receives assistance under 
     this subsection may not also receive assistance for losses to 
     crops on the same land with the same intended use under 
     subsection (b).
       ``(e) Emergency Assistance for Livestock, Honey Bees, and 
     Farm-Raised Fish.--
       ``(1) In general.--The Secretary shall use up to 
     $50,000,000 per year from the Trust Fund to provide emergency 
     relief to eligible producers of livestock, honey bees, and 
     farm-raised fish to aid in the reduction of losses due to 
     disease, adverse weather, or other conditions, such as 
     blizzards and wildfires, as determined by the Secretary, that 
     are not covered under subsection (b), (c), or (d).
       ``(2) Use of funds.--Funds made available under this 
     subsection shall be used to reduce losses caused by feed or 
     water shortages, disease, or other factors as determined by 
     the Secretary.
       ``(3) Availability of funds.--Any funds made available 
     under this subsection shall remain available until expended.
       ``(f) Tree Assistance Program.--
       ``(1) Definitions.--In this subsection:
       ``(A) Eligible orchardist.--The term `eligible orchardist' 
     means a person that produces annual crops from trees for 
     commercial purposes.
       ``(B) Natural disaster.--The term `natural disaster' means 
     plant disease, insect infestation, drought, fire, freeze, 
     flood, earthquake, lightning, or other occurrence, as 
     determined by the Secretary.
       ``(C) Nursery tree grower.--The term `nursery tree grower' 
     means a person who produces nursery, ornamental, fruit, nut, 
     or Christmas trees for commercial sale, as determined by the 
     Secretary.
       ``(D) Tree.--The term `tree' includes a tree, bush, and 
     vine.
       ``(2) Eligibility.--
       ``(A) Loss.--Subject to subparagraph (B), the Secretary 
     shall provide assistance--
       ``(i) under paragraph (3) to eligible orchardists and 
     nursery tree growers that planted trees for commercial 
     purposes but lost the trees as a result of a natural 
     disaster, as determined by the Secretary; and
       ``(ii) under paragraph (3)(B) to eligible orchardists and 
     nursery tree growers that have a production history for 
     commercial purposes on planted or existing trees but lost the 
     trees as a result of a natural disaster, as determined by the 
     Secretary.
       ``(B) Limitation.--An eligible orchardist or nursery tree 
     grower shall qualify for assistance under subparagraph (A) 
     only if the tree mortality of the eligible orchardist or 
     nursery tree grower, as a result of damaging weather or 
     related condition, exceeds 15 percent (adjusted for normal 
     mortality).
       ``(3) Assistance.--Subject to paragraph (4), the assistance 
     provided by the Secretary to eligible orchardists and nursery 
     tree growers for losses described in paragraph (2) shall 
     consist of--
       ``(A)(i) reimbursement of 70 percent of the cost of 
     replanting trees lost due to a natural disaster, as 
     determined by the Secretary, in excess of 15 percent 
     mortality (adjusted for normal mortality); or
       ``(ii) at the option of the Secretary, sufficient seedlings 
     to reestablish a stand; and
       ``(B) reimbursement of 50 percent of the cost of pruning, 
     removal, and other costs incurred by an eligible orchardist 
     or nursery tree grower to salvage existing trees or, in the 
     case of tree mortality, to prepare the land to replant trees 
     as a result of damage or tree mortality due to a natural 
     disaster, as determined by the Secretary, in excess of 15 
     percent damage or mortality (adjusted for normal tree damage 
     and mortality).
       ``(4) Limitations on assistance.--
       ``(A) Definitions of legal entity and person.--In this 
     paragraph, the terms `legal entity' and `person' have the 
     meaning given those terms in section 1001(a) of the Food 
     Security Act of 1985 (7 U.S.C. 1308(a) (as amended by section 
     1603 of the Food, Conservation, and Energy Act of 2008).
       ``(B) Amount.--The total amount of payments received, 
     directly or indirectly, by a person or legal entity 
     (excluding a joint venture or general partnership) under this 
     subsection may not exceed $100,000 for any crop year, or an 
     equivalent value in tree seedlings.
       ``(C) Acres.--The total quantity of acres planted to trees 
     or tree seedlings for which a

[[Page H3541]]

     person or legal entity shall be entitled to receive payments 
     under this subsection may not exceed 500 acres.
       ``(g) Risk Management Purchase Requirement.--
       ``(1) In general.--Except as otherwise provided in this 
     section, the eligible producers on a farm shall not be 
     eligible for assistance under this section (other than 
     subsection (c)) if the eligible producers on the farm--
       ``(A) in the case of each insurable commodity of the 
     eligible producers on the farm, did not obtain a policy or 
     plan of insurance under subtitle A (excluding a crop 
     insurance pilot program under that subtitle); or
       ``(B) in the case of each noninsurable commodity of the 
     eligible producers on the farm, did not file the required 
     paperwork, and pay the administrative fee by the applicable 
     State filing deadline, for the noninsured crop assistance 
     program.
       ``(2) Minimum.--To be considered to have obtained insurance 
     under paragraph (1)(A), an eligible producer on a farm shall 
     have obtained a policy or plan of insurance with not less 
     than 50 percent yield coverage at 55 percent of the insurable 
     price for each crop grazed, planted, or intended to be 
     planted for harvest on a whole farm.
       ``(3) Waiver for socially disadvantaged, limited resource, 
     or beginning farmer or rancher.--With respect to eligible 
     producers that are socially disadvantaged farmers or ranchers 
     or limited resource or beginning farmers or ranchers, as 
     determined by the Secretary, the Secretary may--
       ``(A) waive paragraph (1); and
       ``(B) provide disaster assistance under this section at a 
     level that the Secretary determines to be equitable and 
     appropriate.
       ``(4) Waiver for 2008 crop year.--In the case of an 
     eligible producer that suffered losses in an insurable 
     commodity or noninsurable commodity during the 2008 crop year 
     but does not meet the requirements of paragraph (1), the 
     Secretary shall waive paragraph (1) if the eligible producer 
     pays a fee in an amount equal to the applicable noninsured 
     crop assistance program fee or catastrophic risk protection 
     plan fee required under paragraph (1) to the Secretary not 
     later than 90 days after the date of enactment of this 
     subtitle.
       ``(5) Equitable relief.--
       ``(A) In general.--The Secretary may provide equitable 
     relief to eligible producers on a farm that are otherwise 
     ineligible or unintentionally fail to meet the requirements 
     of paragraph (1) for 1 or more crops on a farm on a case-by-
     case basis, as determined by the Secretary.
       ``(B) 2008 crop year.--In the case of eligible producers on 
     a farm that suffered losses in an insurable commodity or 
     noninsurable commodity during the 2008 crop year, the 
     Secretary shall take special consideration to provide 
     equitable relief in cases in which the eligible producers 
     failed to meet the requirements of paragraph (1) due to the 
     enactment of this subtitle after the closing date of sales 
     periods for crop insurance under subtitle A and the 
     noninsured crop assistance program.
       ``(h) Payment Limitations.--
       ``(1) Definitions of legal entity and person.--In this 
     subsection, the terms `legal entity' and `person' have the 
     meaning given those terms in section 1001(a) of the Food 
     Security Act of 1985 (7 U.S.C. 1308(a) (as amended by section 
     1603 of the Food, Conservation, and Energy Act of 2008).
       ``(2) Amount.--The total amount of disaster assistance 
     payments received, directly or indirectly, by a person or 
     legal entity (excluding a joint venture or general 
     partnership) under this section (excluding payments received 
     under subsection (f)) may not exceed $100,000 for any crop 
     year.
       ``(3) AGI limitation.--Section 1001D of the Food Security 
     Act of 1985 (7 U.S.C. 1308-3a) or any successor provision 
     shall apply with respect to assistance provided under this 
     section.
       ``(4) Direct attribution.--Subsections (e) and (f) of 
     section 1001 of the Food Security Act of 1985 (7 U.S.C. 1308) 
     or any successor provisions relating to direct attribution 
     shall apply with respect to assistance provided under this 
     section.
       ``(i) Period of Effectiveness.--This section shall be 
     effective only for losses that are incurred as the result of 
     a disaster, adverse weather, or other environmental condition 
     that occurs on or before September 30, 2011, as determined by 
     the Secretary.
       ``(j) No Duplicative Payments.--In implementing any other 
     program which makes disaster assistance payments (except for 
     indemnities made under subtitle A and section 196 of the 
     Federal Agriculture Improvement and Reform Act of 1996), the 
     Secretary shall prevent duplicative payments with respect to 
     the same loss for which a person receives a payment under 
     subsections (b), (c), (d), (e), or (f).
       ``(k) Application.--
       ``(1) In general.--Subject to paragraph (2) and 
     notwithstanding any provision of subtitle A, subtitle A shall 
     not apply to this subtitle.
       ``(2) Cross references.--Paragraph (1) shall not apply to a 
     specific reference in this subtitle to a provision of 
     subtitle A.''.
       (b) Transition.--For purposes of the 2008 crop year, the 
     Secretary shall carry out subsections (f)(4) and (h) of 
     section 531 of the Federal Crop Insurance Act (as added by 
     subsection (a)) in accordance with the terms and conditions 
     of sections 1001 through 1001D of the Food Security Act of 
     1985 (16 U.S.C. 1308 et seq.), as in effect on September 30, 
     2007.
       (c) Conforming Amendments.--
       (1) Section 501 of the Federal Crop Insurance Act (7 U.S.C. 
     1501) is amended by striking the section heading and 
     enumerator and inserting the following:

                ``Subtitle A--Federal Crop Insurance Act

     ``SEC. 501. SHORT TITLE AND APPLICATION OF OTHER 
                   PROVISIONS.''.

       (2) Subtitle A of the Federal Crop Insurance Act (as 
     designated under paragraph (1)) is amended--
       (A) by striking ``This title'' each place it appears and 
     inserting ``This subtitle''; and
       (B) by striking ``this title'' each place it appears and 
     inserting ``this subtitle''.

     SEC. 12034. FISHERIES DISASTER ASSISTANCE.

       Of the funds of the Commodity Credit Corporation, the 
     Secretary of Agriculture shall transfer to the Secretary of 
     Commerce $170,000,000 for fiscal year 2008 for the National 
     Marine Fisheries Service to distribute to commercial and 
     recreational members of the fishing communities affected by 
     the salmon fishery failure in the States of California, 
     Oregon, and Washington designated under section 312(a) of the 
     Magnuson-Stevens Fishery Conservation and Management Act (16 
     U.S.C. 1861a(a)) on May 1, 2008, in accordance with that 
     section.

            Subtitle B--Small Business Disaster Loan Program

     SEC. 12051. SHORT TITLE.

       This subtitle may be cited as the ``Small Business Disaster 
     Response and Loan Improvements Act of 2008''.

     SEC. 12052. DEFINITIONS.

       In this subtitle--
       (1) the terms ``Administration'' and ``Administrator'' mean 
     the Small Business Administration and the Administrator 
     thereof, respectively;
       (2) the term ``disaster area'' means an area affected by a 
     natural or other disaster, as determined for purposes of 
     paragraph (1) or (2) of section 7(b) of the Small Business 
     Act (15 U.S.C. 636(b)), during the period of such 
     declaration;
       (3) the term ``disaster loan program of the 
     Administration'' means assistance under section 7(b) of the 
     Small Business Act (15 U.S.C. 636(b)), as amended by this 
     Act;
       (4) the term ``disaster update period'' means the period 
     beginning on the date on which the President declares a major 
     disaster (including any major disaster relating to which the 
     Administrator declares eligibility for additional disaster 
     assistance under paragraph (9) of section 7(b) of the Small 
     Business Act (15 U.S.C. 636(b)), as added by this Act) and 
     ending on the date on which such declaration terminates;
       (5) the term ``major disaster'' has the meaning given that 
     term in section 102 of the Robert T. Stafford Disaster Relief 
     and Emergency Assistance Act (42 U.S.C. 5122);
       (6) the term ``small business concern'' has the meaning 
     given that term under section 3 of the Small Business Act (15 
     U.S.C. 632); and
       (7) the term ``State'' means any State of the United 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the Northern Mariana Islands, the Virgin Islands, Guam, 
     American Samoa, and any territory or possession of the United 
     States.

                 PART I--DISASTER PLANNING AND RESPONSE

     SEC. 12061. ECONOMIC INJURY DISASTER LOANS TO NONPROFITS.

       (a) In General.--Section 7(b)(2) of the Small Business Act 
     (15 U.S.C. 636(b)(2)) is amended--
       (1) in the matter preceding subparagraph (A)--
       (A) by inserting after ``small business concern'' the 
     following: ``, private nonprofit organization,''; and
       (B) by inserting after ``the concern'' the following: ``, 
     the organization,''; and
       (2) in subparagraph (D) by inserting after ``small business 
     concerns'' the following: ``, private nonprofit 
     organizations,''.
       (b) Conforming Amendment.--Section 7(c)(5)(C) of the Small 
     Business Act (15 U.S.C. 636(c)(5)(C)) is amended by inserting 
     after ``business'' the following: ``, private nonprofit 
     organization,''.

     SEC. 12062. COORDINATION OF DISASTER ASSISTANCE PROGRAMS WITH 
                   FEMA.

       The Small Business Act (15 U.S.C. 631 et seq.) is amended--
       (1) by redesignating section 37 as section 44; and
       (2) by inserting after section 36 the following:

     ``SEC. 37. COORDINATION OF DISASTER ASSISTANCE PROGRAMS WITH 
                   FEMA.

       ``(a) Coordination Required.--The Administrator shall 
     ensure that the disaster assistance programs of the 
     Administration are coordinated, to the maximum extent 
     practicable, with the disaster assistance programs of the 
     Federal Emergency Management Agency.
       ``(b) Regulations Required.--The Administrator, in 
     consultation with the Administrator of the Federal Emergency 
     Management Agency, shall establish regulations to ensure that 
     each application for disaster assistance is submitted as 
     quickly as practicable to the Administration or directed to 
     the appropriate agency under the circumstances.
       ``(c) Completion; Revision.--The initial regulations shall 
     be completed not later than 270 days after the date of the 
     enactment of the Small Business Disaster Response and Loan 
     Improvements Act of 2008. Thereafter, the regulations shall 
     be revised on an annual basis.
       ``(d) Report.--The Administrator shall include a report on 
     the regulations whenever the Administration submits the 
     report required by section 43.''.

     SEC. 12063. PUBLIC AWARENESS OF DISASTER DECLARATION AND 
                   APPLICATION PERIODS.

       (a) In General.--Section 7(b) of the Small Business Act (15 
     U.S.C. 636(b)) is amended by inserting immediately after 
     paragraph (3), the following:
       ``(4) Coordination with fema.--
       ``(A) In general.--Notwithstanding any other provision of 
     law, for any disaster declared

[[Page H3542]]

     under this subsection or major disaster (including any major 
     disaster relating to which the Administrator declares 
     eligibility for additional disaster assistance under 
     paragraph (9)), the Administrator, in consultation with the 
     Administrator of the Federal Emergency Management Agency, 
     shall ensure, to the maximum extent practicable, that all 
     application periods for disaster relief under this Act 
     correspond with application deadlines established under the 
     Robert T. Stafford Disaster Relief and Emergency Assistance 
     Act (42 U.S.C. 5121 et seq.), or as extended by the 
     President.
       ``(B) Deadlines.--Notwithstanding any other provision of 
     law, not later than 10 days before the closing date of an 
     application period for a major disaster (including any major 
     disaster relating to which the Administrator declares 
     eligibility for additional disaster assistance under 
     paragraph (9)), the Administrator, in consultation with the 
     Administrator of the Federal Emergency Management Agency, 
     shall submit to the Committee on Small Business and 
     Entrepreneurship of the Senate and the Committee on Small 
     Business of the House of Representatives a report that 
     includes--
       ``(i) the deadline for submitting applications for 
     assistance under this Act relating to that major disaster;
       ``(ii) information regarding the number of loan 
     applications and disbursements processed by the Administrator 
     relating to that major disaster for each day during the 
     period beginning on the date on which that major disaster was 
     declared and ending on the date of that report; and
       ``(iii) an estimate of the number of potential applicants 
     that have not submitted an application relating to that major 
     disaster.
       ``(5) Public awareness of disasters.--If a disaster is 
     declared under this subsection or the Administrator declares 
     eligibility for additional disaster assistance under 
     paragraph (9), the Administrator shall make every effort to 
     communicate through radio, television, print, and web-based 
     outlets, all relevant information needed by disaster loan 
     applicants, including--
       ``(A) the date of such declaration;
       ``(B) cities and towns within the area of such declaration;
       ``(C) loan application deadlines related to such disaster;
       ``(D) all relevant contact information for victim services 
     available through the Administration (including links to 
     small business development center websites);
       ``(E) links to relevant Federal and State disaster 
     assistance websites, including links to websites providing 
     information regarding assistance available from the Federal 
     Emergency Management Agency;
       ``(F) information on eligibility criteria for 
     Administration loan programs, including where such 
     applications can be found; and
       ``(G) application materials that clearly state the function 
     of the Administration as the Federal source of disaster loans 
     for homeowners and renters.''.
       (b) Marketing and Outreach.--Not later than 90 days after 
     the date of enactment of this Act, the Administrator shall 
     create a marketing and outreach plan that--
       (1) encourages a proactive approach to the disaster relief 
     efforts of the Administration;
       (2) makes clear the services provided by the 
     Administration, including contact information, application 
     information, and timelines for submitting applications, the 
     review of applications, and the disbursement of funds;
       (3) describes the different disaster loan programs of the 
     Administration, including how they are made available and the 
     eligibility requirements for each loan program;
       (4) provides for regional marketing, focusing on disasters 
     occurring in each region before the date of enactment of this 
     Act, and likely scenarios for disasters in each such region; 
     and
       (5) ensures that the marketing plan is made available at 
     small business development centers and on the website of the 
     Administration.
       (c) Technical and Conforming Amendments.--
       (1) In general.--Section 3 of the Small Business Act (15 
     U.S.C. 632) is amended by adding at the end the following:
       ``(s) Major Disaster.--In this Act, the term `major 
     disaster' has the meaning given that term in section 102 of 
     the Robert T. Stafford Disaster Relief and Emergency 
     Assistance Act (42 U.S.C. 5122).''.
       (2) Technical correction.--Section 7(b)(2) of the Small 
     Business Act (15 U.S.C. 636(b)(2)) is amended by striking 
     ``Disaster Relief and Emergency Assistance Act'' and 
     inserting ``Robert T. Stafford Disaster Relief and Emergency 
     Assistance Act (42 U.S.C. 5121 et seq.)''.

     SEC. 12064. CONSISTENCY BETWEEN ADMINISTRATION REGULATIONS 
                   AND STANDARD OPERATING PROCEDURES.

       (a) In General.--The Administrator shall, promptly 
     following the date of enactment of this Act, conduct a study 
     of whether the standard operating procedures of the 
     Administration for loans offered under section 7(b) of the 
     Small Business Act (15 U.S.C. 636(b)) are consistent with the 
     regulations of the Administration for administering the 
     disaster loan program.
       (b) Report.--Not later than 180 days after the date of 
     enactment of this Act, the Administrator shall submit to 
     Congress a report containing all findings and recommendations 
     of the study conducted under subsection (a).

     SEC. 12065. INCREASING COLLATERAL REQUIREMENTS.

       Section 7(c)(6) of the Small Business Act (15 U.S.C. 
     636(c)(6)) is amended by striking ``$10,000 or less'' and 
     inserting ``$14,000 or less (or such higher amount as the 
     Administrator determines appropriate in the event of a major 
     disaster)''.

     SEC. 12066. PROCESSING DISASTER LOANS.

       (a) Authority for Qualified Private Contractors to Process 
     Disaster Loans.--Section 7(b) of the Small Business Act (15 
     U.S.C. 636(b)) is amended by inserting immediately after 
     paragraph (5), as added by this Act, the following:
       ``(6) Authority for qualified private contractors.--
       ``(A) Disaster loan processing.--The Administrator may 
     enter into an agreement with a qualified private contractor, 
     as determined by the Administrator, to process loans under 
     this subsection in the event of a major disaster (including 
     any major disaster relating to which the Administrator 
     declares eligibility for additional disaster assistance under 
     paragraph (9)), under which the Administrator shall pay the 
     contractor a fee for each loan processed.
       ``(B) Loan loss verification services.--The Administrator 
     may enter into an agreement with a qualified lender or loss 
     verification professional, as determined by the 
     Administrator, to verify losses for loans under this 
     subsection in the event of a major disaster (including any 
     major disaster relating to which the Administrator declares 
     eligibility for additional disaster assistance under 
     paragraph (9)), under which the Administrator shall pay the 
     lender or verification professional a fee for each loan for 
     which such lender or verification professional verifies 
     losses.''.
       (b) Coordination of Efforts Between the Administrator and 
     the Internal Revenue Service to Expedite Loan Processing.--
     The Administrator and the Commissioner of Internal Revenue 
     shall, to the maximum extent practicable, ensure that all 
     relevant and allowable tax records for loan approval are 
     shared with loan processors in an expedited manner, upon 
     request by the Administrator.

     SEC. 12067. INFORMATION TRACKING AND FOLLOW-UP SYSTEM.

       The Small Business Act is amended by inserting after 
     section 37, as added by this Act, the following:

     ``SEC. 38. INFORMATION TRACKING AND FOLLOW-UP SYSTEM FOR 
                   DISASTER ASSISTANCE.

       ``(a) System Required.--The Administrator shall develop, 
     implement, or maintain a centralized information system to 
     track communications between personnel of the Administration 
     and applicants for disaster assistance. The system shall 
     ensure that whenever an applicant for disaster assistance 
     communicates with such personnel on a matter relating to the 
     application, the following information is recorded:
       ``(1) The method of communication.
       ``(2) The date of communication.
       ``(3) The identity of the personnel.
       ``(4) A summary of the subject matter of the communication.
       ``(b) Follow-up Required.--The Administrator shall ensure 
     that an applicant for disaster assistance receives, by 
     telephone, mail, or electronic mail, follow-up communications 
     from the Administration at all critical stages of the 
     application process, including the following:
       ``(1) When the Administration determines that additional 
     information or documentation is required to process the 
     application.
       ``(2) When the Administration determines whether to approve 
     or deny the loan.
       ``(3) When the primary contact person managing the loan 
     application has changed.''.

     SEC. 12068. INCREASED DEFERMENT PERIOD.

       (a) In General.--Section 7 of the Small Business Act (15 
     U.S.C. 636) is amended--
       (1) by redesignating subsections (c) and (d) as subsections 
     (d) and (e), respectively; and
       (2) by inserting after subsection (e), as so redesignated, 
     the following:
       ``(f) Additional Requirements for 7(b) Loans.--
       ``(1) Increased deferment authorized.--
       ``(A) In general.--In making loans under subsection (b), 
     the Administrator may provide, to the person receiving the 
     loan, an option to defer repayment on the loan.
       ``(B) Period.--The period of a deferment under subparagraph 
     (A) may not exceed 4 years.''.
       (b) Technical and Conforming Amendments.--The Small 
     Business Act (15 U.S.C. 631 et seq.) is amended--
       (1) in section 4(c)--
       (A) in paragraph (1), by striking ``7(c)(2)'' and inserting 
     ``7(d)(2)''; and
       (B) in paragraph (2)--
       (i) by striking ``7(c)(2)'' and inserting ``7(d)(2)''; and
       (ii) by striking ``7(e),''; and
       (2) in section 7(b), in the undesignated matter following 
     paragraph (3)--
       (A) by striking ``That the provisions of paragraph (1) of 
     subsection (c)'' and inserting ``That the provisions of 
     paragraph (1) of subsection (d)''; and
       (B) by striking ``Notwithstanding the provisions of any 
     other law the interest rate on the Administration's share of 
     any loan made under subsection (b) except as provided in 
     subsection (c),'' and inserting ``Notwithstanding any other 
     provision of law, and except as provided in subsection (d), 
     the interest rate on the Administration's share of any loan 
     made under subsection (b)''.

     SEC. 12069. DISASTER PROCESSING REDUNDANCY.

       The Small Business Act (15 U.S.C. 631 et seq.) is amended 
     by inserting after section 38, as added by this Act, the 
     following:

     ``SEC. 39. DISASTER PROCESSING REDUNDANCY.

       ``(a) In General.--The Administrator shall ensure that the 
     Administration has in place a facility for disaster loan 
     processing that, whenever the Administration's primary 
     facility for disaster loan processing becomes unavailable, is 
     able to take over all disaster loan processing from that 
     primary facility within 2 days.
       ``(b) Authorization of Appropriations.--There are 
     authorized to be appropriated such

[[Page H3543]]

     sums as may be necessary to carry out this section.''.

     SEC. 12070. NET EARNINGS CLAUSES PROHIBITED.

       Section 7 of the Small Business Act (15 U.S.C. 636) is 
     amended by inserting after subsection (f), as added by this 
     Act, the following:
       ``(g) Net Earnings Clauses Prohibited for 7(b) Loans.--In 
     making loans under subsection (b), the Administrator shall 
     not require the borrower to pay any non-amortized amount for 
     the first five years after repayment begins.''.

     SEC. 12071. ECONOMIC INJURY DISASTER LOANS IN CASES OF ICE 
                   STORMS AND BLIZZARDS.

       Section 3(k)(2) of the Small Business Act (15 U.S.C. 
     632(k)(2)) is amended--
       (1) in subparagraph (A) by striking ``and'';
       (2) in subparagraph (B) by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end the following:
       ``(C) ice storms and blizzards.''.

     SEC. 12072. DEVELOPMENT AND IMPLEMENTATION OF MAJOR DISASTER 
                   RESPONSE PLAN.

       (a) In General.--Not later than 3 months after the date of 
     enactment of this Act, the Administrator shall--
       (1) by rule, amend the 2006 Atlantic hurricane season 
     disaster response plan of the Administration (in this section 
     referred to as the ``disaster response plan'') to apply to 
     major disasters; and
       (2) submit a report to the Committee on Small Business and 
     Entrepreneurship of the Senate and the Committee on Small 
     Business of the House of Representatives detailing the 
     amendments to the disaster response plan.
       (b) Contents.--The report required under subsection (a)(2) 
     shall include--
       (1) any updates or modifications made to the disaster 
     response plan since the report regarding the disaster 
     response plan submitted to Congress on July 14, 2006;
       (2) a description of how the Administrator plans to use and 
     integrate District Office personnel of the Administration in 
     the response to a major disaster, including information on 
     the use of personnel for loan processing and loan 
     disbursement;
       (3) a description of the disaster scalability model of the 
     Administration and on what basis or function the plan is 
     scaled;
       (4) a description of how the agency-wide Disaster Oversight 
     Council is structured, which offices comprise its membership, 
     and whether the Associate Deputy Administrator for 
     Entrepreneurial Development of the Administration is a 
     member;
       (5) a description of how the Administrator plans to 
     coordinate the disaster efforts of the Administration with 
     State and local government officials, including 
     recommendations on how to better incorporate State 
     initiatives or programs, such as State-administered bridge 
     loan programs, into the disaster response of the 
     Administration;
       (6) recommendations, if any, on how the Administration can 
     better coordinate its disaster response operations with the 
     operations of other Federal, State, and local entities;
       (7) any surge plan for the disaster loan program of the 
     Administration in effect on or after August 29, 2005 
     (including surge plans for loss verification, loan 
     processing, mailroom, customer service or call center 
     operations, and a continuity of operations plan);
       (8) the number of full-time equivalent employees and job 
     descriptions for the planning and disaster response staff of 
     the Administration;
       (9) the in-service and preservice training procedures for 
     disaster response staff of the Administration;
       (10) information on the logistical support plans of the 
     Administration (including equipment and staffing needs, and 
     detailed information on how such plans will be scalable 
     depending on the size and scope of the major disaster;
       (11) a description of the findings and recommendations of 
     the Administrator, if any, based on a review of the response 
     of the Administration to Hurricane Katrina of 2005, Hurricane 
     Rita of 2005, and Hurricane Wilma of 2005; and
       (12) a plan for how the Administrator, in consultation with 
     the Administrator of the Federal Emergency Management Agency, 
     will coordinate the provision of accommodations and necessary 
     resources for disaster assistance personnel to effectively 
     perform their responsibilities in the aftermath of a major 
     disaster.
       (c) Biennial Disaster Simulation Exercise.--
       (1) Exercise required.--The Administrator shall conduct a 
     disaster simulation exercise at least once every 2 fiscal 
     years. The exercise shall include the participation of, at a 
     minimum, not less than 50 percent of the individuals in the 
     disaster reserve corps and shall test, at maximum capacity, 
     all of the information technology and telecommunications 
     systems of the Administration that are vital to the 
     activities of the Administration during such a disaster.
       (2) Report.--The Administrator shall include a report on 
     the disaster simulation exercises conducted under paragraph 
     (1) each time the Administration submits a report required 
     under section 43 of the Small Business Act, as added by this 
     Act.

     SEC. 12073. DISASTER PLANNING RESPONSIBILITIES.

       (a) Assignment of Small Business Administration Disaster 
     Planning Responsibilities.--The disaster planning function of 
     the Administration shall be assigned to an individual 
     appointed by the Administrator who--
       (1) is not an employee of the Office of Disaster Assistance 
     of the Administration;
       (2) has proven management ability;
       (3) has substantial knowledge in the field of disaster 
     readiness and emergency response; and
       (4) has demonstrated significant experience in the area of 
     disaster planning.
       (b) Responsibilities.--The individual assigned the disaster 
     planning function of the Administration shall report directly 
     and solely to the Administrator and shall be responsible 
     for--
       (1) creating, maintaining, and implementing the 
     comprehensive disaster response plan of the Administration 
     described in section 12072;
       (2) ensuring there are in-service and pre-service training 
     procedures for the disaster response staff of the 
     Administration;
       (3) coordinating and directing the training exercises of 
     the Administration relating to disasters, including disaster 
     simulation exercises and disaster exercises coordinated with 
     other government departments and agencies; and
       (4) other responsibilities relevant to disaster planning 
     and readiness, as determined by the Administrator.
       (c) Coordination.--In carrying out the responsibilities 
     described in subsection (b), the individual assigned the 
     disaster planning function of the Administration shall 
     coordinate with--
       (1) the Office of Disaster Assistance of the 
     Administration;
       (2) the Administrator of the Federal Emergency Management 
     Agency; and
       (3) other Federal, State, and local disaster planning 
     offices, as necessary.
       (d) Resources.--The Administrator shall ensure that the 
     individual assigned the disaster planning function of the 
     Administration has adequate resources to carry out the duties 
     under this section.
       (e) Report.--Not later than 30 days after the date of 
     enactment of this Act, the Administrator shall submit to the 
     Committee on Small Business and Entrepreneurship of the 
     Senate and the Committee on Small Business of the House of 
     Representatives a report containing--
       (1) a description of the actions of the Administrator to 
     assign an individual the disaster planning function of the 
     Administration;
       (2) information detailing the background and expertise of 
     the individual assigned; and
       (3) information on the status of the implementation of the 
     responsibilities described in subsection (b).

     SEC. 12074. ASSIGNMENT OF EMPLOYEES OF THE OFFICE OF DISASTER 
                   ASSISTANCE AND DISASTER CADRE.

       (a) In General.--Section 7(b) of the Small Business Act (15 
     U.S.C. 636(b)) is amended by inserting immediately after 
     paragraph (6), as added by this Act, the following:
       ``(7) Disaster assistance employees.--
       ``(A) In general.--In carrying out this section, the 
     Administrator may, where practicable, ensure that the number 
     of full-time equivalent employees--
       ``(i) in the Office of the Disaster Assistance is not fewer 
     than 800; and
       ``(ii) in the Disaster Cadre of the Administration is not 
     fewer than 1,000.
       ``(B) Report.--In carrying out this subsection, if the 
     number of full-time employees for either the Office of 
     Disaster Assistance or the Disaster Cadre of the 
     Administration is below the level described in subparagraph 
     (A) for that office, not later than 21 days after the date on 
     which that staffing level decreased below the level described 
     in subparagraph (A), the Administrator shall submit to the 
     Committee on Appropriations and the Committee on Small 
     Business and Entrepreneurship of the Senate and the Committee 
     on Appropriations and Committee on Small Business of the 
     House of Representatives, a report--
       ``(i) detailing staffing levels on that date;
       ``(ii) requesting, if practicable and determined 
     appropriate by the Administrator, additional funds for 
     additional employees; and
       ``(iii) containing such additional information, as 
     determined appropriate by the Administrator.''.

     SEC. 12075. COMPREHENSIVE DISASTER RESPONSE PLAN.

       The Small Business Act (15 U.S.C. 631 et seq.) is amended 
     inserting after section 39, as added by this Act, the 
     following:

     ``SEC. 40. COMPREHENSIVE DISASTER RESPONSE PLAN.

       ``(a) Plan Required.--The Administrator shall develop, 
     implement, or maintain a comprehensive written disaster 
     response plan. The plan shall include the following:
       ``(1) For each region of the Administration, a description 
     of the disasters most likely to occur in that region.
       ``(2) For each disaster described under paragraph (1)--
       ``(A) an assessment of the disaster;
       ``(B) an assessment of the demand for Administration 
     assistance most likely to occur in response to the disaster;
       ``(C) an assessment of the needs of the Administration, 
     with respect to such resources as information technology, 
     telecommunications, human resources, and office space, to 
     meet the demand referred to in subparagraph (B); and
       ``(D) guidelines pursuant to which the Administration will 
     coordinate with other Federal agencies and with State and 
     local authorities to best respond to the demand referred to 
     in subparagraph (B) and to best use the resources referred to 
     in that subparagraph.
       ``(b) Completion; Revision.--The first plan required by 
     subsection (a) shall be completed not later than 180 days 
     after the date of the enactment of this section. Thereafter, 
     the Administrator shall update the plan on an annual basis 
     and following any major disaster relating to which the 
     Administrator declares eligibility for additional disaster 
     assistance under section 7(b)(9).
       ``(c) Knowledge Required.--The Administrator shall carry 
     out subsections (a) and (b) through an individual with 
     substantial knowledge in the field of disaster readiness and 
     emergency response.
       ``(d) Report.--The Administrator shall include a report on 
     the plan whenever the Administration submits the report 
     required by section 43.''.

[[Page H3544]]

     SEC. 12076. PLANS TO SECURE SUFFICIENT OFFICE SPACE.

       The Small Business Act is amended by inserting after 
     section 40, as added by this Act, the following:

     ``SEC. 41. PLANS TO SECURE SUFFICIENT OFFICE SPACE.

       ``(a) Plans Required.--The Administrator shall develop 
     long-term plans to secure sufficient office space to 
     accommodate an expanded workforce in times of disaster.
       ``(b) Report.--The Administrator shall include a report on 
     the plans developed under subsection (a) each time the 
     Administration submits a report required under section 43.''.

     SEC. 12077. APPLICANTS THAT HAVE BECOME A MAJOR SOURCE OF 
                   EMPLOYMENT DUE TO CHANGED ECONOMIC 
                   CIRCUMSTANCES.

       Section 7(b)(3)(E) of the Small Business Act (15 U.S.C. 
     636(b)(3)(E)) is amended by inserting after ``constitutes'' 
     the following: ``, or have become due to changed economic 
     circumstances,''.

     SEC. 12078. DISASTER LOAN AMOUNTS.

       (a) Increased Loan Caps.--Section 7(b) of the Small 
     Business Act (15 U.S.C. 636(b)) is amended by inserting 
     immediately after paragraph (7), as added by this Act, the 
     following:
       ``(8) Increased loan caps.--
       ``(A) Aggregate loan amounts.--Except as provided in 
     subparagraph (B), and notwithstanding any other provision of 
     law, the aggregate loan amount outstanding and committed to a 
     borrower under this subsection may not exceed $2,000,000.
       ``(B) Waiver authority.--The Administrator may, at the 
     discretion of the Administrator, increase the aggregate loan 
     amount under subparagraph (A) for loans relating to a 
     disaster to a level established by the Administrator, based 
     on appropriate economic indicators for the region in which 
     that disaster occurred.''.
       (b) Disaster Mitigation.--
       (1) In general.--Section 7(b)(1)(A) of the Small Business 
     Act (15 U.S.C. 636(b)(1)(A)) is amended by inserting ``of the 
     aggregate costs of such damage or destruction (whether or not 
     compensated for by insurance or otherwise)'' after ``20 per 
     centum''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply with respect to a loan or guarantee made after 
     the date of enactment of this Act.
       (c) Technical Amendments.--Section 7(b) of the Small 
     Business Act (15 U.S.C. 636(b)) is amended--
       (1) in the matter preceding paragraph (1), by striking 
     ``the, Administration'' and inserting ``the Administration''; 
     and
       (2) in the undesignated matter at the end--
       (A) by striking ``, (2), and (4)'' and inserting ``and 
     (2)''; and
       (B) by striking ``, (2), or (4)'' and inserting ``(2)''.

     SEC. 12079. SMALL BUSINESS BONDING THRESHOLD.

       (a) In General.--Except as provided in subsection (b), and 
     notwithstanding any other provision of law, for any 
     procurement related to a major disaster, the Administrator 
     may, upon such terms and conditions as the Administrator may 
     prescribe, guarantee and enter into commitments to guarantee 
     any surety against loss resulting from a breach of the terms 
     of a bid bond, payment bond, performance bond, or bonds 
     ancillary thereto, by a principal on any total work order or 
     contract amount at the time of bond execution that does not 
     exceed $5,000,000.
       (b) Increase of Amount.--Upon request of the head of any 
     Federal agency other than the Administration involved in 
     reconstruction efforts in response to a major disaster, the 
     Administrator may guarantee and enter into a commitment to 
     guarantee any security against loss under subsection (a) on 
     any total work order or contract amount at the time of bond 
     execution that does not exceed $10,000,000.
       (c) Limitation on Use of Other Funds.--The Administrator 
     may carry out this section only with amounts appropriated in 
     advance specifically to carry out this section.

                       PART II--DISASTER LENDING

     SEC. 12081. ELIGIBILITY FOR ADDITIONAL DISASTER ASSISTANCE.

       Section 7(b) of the Small Business Act (15 U.S.C. 636(b)) 
     is amended by inserting immediately after paragraph (8), as 
     added by this Act, the following:
       ``(9) Declaration of eligibility for additional disaster 
     assistance.--
       ``(A) In general.--If the President declares a major 
     disaster, the Administrator may declare eligibility for 
     additional disaster assistance in accordance with this 
     paragraph.
       ``(B) Threshold.--A major disaster for which the 
     Administrator declares eligibility for additional disaster 
     assistance under this paragraph shall--
       ``(i) have resulted in extraordinary levels of casualties 
     or damage or disruption severely affecting the population 
     (including mass evacuations), infrastructure, environment, 
     economy, national morale, or government functions in an area;
       ``(ii) be comparable to the description of a catastrophic 
     incident in the National Response Plan of the Administration, 
     or any successor thereto, unless there is no successor to 
     such plan, in which case this clause shall have no force or 
     effect; and
       ``(iii) be of such size and scope that--

       ``(I) the disaster assistance programs under the other 
     paragraphs under this subsection are incapable of providing 
     adequate and timely assistance to individuals or business 
     concerns located within the disaster area; or
       ``(II) a significant number of business concerns outside 
     the disaster area have suffered disaster-related substantial 
     economic injury as a result of the incident.''.

     SEC. 12082. ADDITIONAL ECONOMIC INJURY DISASTER LOAN 
                   ASSISTANCE.

       Paragraph (9) of section 7(b) of the Small Business Act (15 
     U.S.C. 636(b)), as added by section 12081, is amended by 
     adding at the end the following:
       ``(C) Additional economic injury disaster loan 
     assistance.--
       ``(i) In general.--If the Administrator declares 
     eligibility for additional disaster assistance under this 
     paragraph, the Administrator may make such loans under this 
     subparagraph (either directly or in cooperation with banks or 
     other lending institutions through agreements to participate 
     on an immediate or deferred basis) as the Administrator 
     determines appropriate to eligible small business concerns 
     located anywhere in the United States.
       ``(ii) Processing time.--

       ``(I) In general.--If the Administrator determines that the 
     average processing time for applications for disaster loans 
     under this subparagraph relating to a specific major disaster 
     is more than 15 days, the Administrator shall give priority 
     to the processing of such applications submitted by eligible 
     small business concerns located inside the disaster area, 
     until the Administrator determines that the average 
     processing time for such applications is not more than 15 
     days.
       ``(II) Suspension of applications from outside disaster 
     area.--If the Administrator determines that the average 
     processing time for applications for disaster loans under 
     this subparagraph relating to a specific major disaster is 
     more than 30 days, the Administrator shall suspend the 
     processing of such applications submitted by eligible small 
     business concerns located outside the disaster area, until 
     the Administrator determines that the average processing time 
     for such applications is not more than 15 days.

       ``(iii) Loan terms.--A loan under this subparagraph shall 
     be made on the same terms as a loan under paragraph (2).
       ``(D) Definitions.--In this paragraph--
       ``(i) the term `disaster area' means the area for which the 
     applicable major disaster was declared;
       ``(ii) the term `disaster-related substantial economic 
     injury' means economic harm to a business concern that 
     results in the inability of the business concern to--

       ``(I) meet its obligations as it matures;
       ``(II) meet its ordinary and necessary operating expenses; 
     or
       ``(III) market, produce, or provide a product or service 
     ordinarily marketed, produced, or provided by the business 
     concern because the business concern relies on materials from 
     the disaster area or sells or markets in the disaster area; 
     and

       ``(iii) the term `eligible small business concern' means a 
     small business concern--

       ``(I) that has suffered disaster-related substantial 
     economic injury as a result of the applicable major disaster; 
     and
       ``(II)(aa) for which not less than 25 percent of the market 
     share of that small business concern is from business 
     transacted in the disaster area;
       ``(bb) for which not less than 25 percent of an input into 
     a production process of that small business concern is from 
     the disaster area; or
       ``(cc) that relies on a provider located in the disaster 
     area for a service that is not readily available 
     elsewhere.''.

     SEC. 12083. PRIVATE DISASTER LOANS.

       (a) In General.--Section 7 of the Small Business Act (15 
     U.S.C. 636) is amended by inserting after subsection (b) the 
     following:
       ``(c) Private Disaster Loans.--
       ``(1) Definitions.--In this subsection--
       ``(A) the term `disaster area' means any area for which the 
     President declared a major disaster relating to which the 
     Administrator declares eligibility for additional disaster 
     assistance under subsection (b)(9), during the period of that 
     major disaster declaration;
       ``(B) the term `eligible individual' means an individual 
     who is eligible for disaster assistance under subsection 
     (b)(1) relating to a major disaster relating to which the 
     Administrator declares eligibility for additional disaster 
     assistance under subsection (b)(9);
       ``(C) the term `eligible small business concern' means a 
     business concern that is--
       ``(i) a small business concern, as defined under this Act; 
     or
       ``(ii) a small business concern, as defined in section 103 
     of the Small Business Investment Act of 1958;
       ``(D) the term `preferred lender' means a lender 
     participating in the Preferred Lender Program;
       ``(E) the term `Preferred Lender Program' has the meaning 
     given that term in subsection (a)(2)(C)(ii); and
       ``(F) the term `qualified private lender' means any 
     privately-owned bank or other lending institution that--
       ``(i) is not a preferred lender; and
       ``(ii) the Administrator determines meets the criteria 
     established under paragraph (10).
       ``(2) Program required.--The Administrator shall carry out 
     a program, to be known as the Private Disaster Assistance 
     program, under which the Administration may guarantee timely 
     payment of principal and interest, as scheduled, on any loan 
     made to an eligible small business concern located in a 
     disaster area and to an eligible individual.
       ``(3) Use of loans.--A loan guaranteed by the Administrator 
     under this subsection may be used for any purpose authorized 
     under subsection (b).
       ``(4) Online applications.--
       ``(A) Establishment.--The Administrator may establish, 
     directly or through an agreement with another entity, an 
     online application process for loans guaranteed under this 
     subsection.
       ``(B) Other federal assistance.--The Administrator may 
     coordinate with the head of

[[Page H3545]]

     any other appropriate Federal agency so that any application 
     submitted through an online application process established 
     under this paragraph may be considered for any other Federal 
     assistance program for disaster relief.
       ``(C) Consultation.--In establishing an online application 
     process under this paragraph, the Administrator shall consult 
     with appropriate persons from the public and private sectors, 
     including private lenders.
       ``(5) Maximum amounts.--
       ``(A) Guarantee percentage.--The Administrator may 
     guarantee not more than 85 percent of a loan under this 
     subsection.
       ``(B) Loan amount.--The maximum amount of a loan guaranteed 
     under this subsection shall be $2,000,000.
       ``(6) Terms and conditions.--A loan guaranteed under this 
     subsection shall be made under the same terms and conditions 
     as a loan under subsection (b).
       ``(7) Lenders.--
       ``(A) In general.--A loan guaranteed under this subsection 
     made to--
       ``(i) a qualified individual may be made by a preferred 
     lender; and
       ``(ii) a qualified small business concern may be made by a 
     qualified private lender or by a preferred lender that also 
     makes loans to qualified individuals.
       ``(B) Compliance.--If the Administrator determines that a 
     preferred lender knowingly failed to comply with the 
     underwriting standards for loans guaranteed under this 
     subsection or violated the terms of the standard operating 
     procedure agreement between that preferred lender and the 
     Administration, the Administrator shall do 1 or more of the 
     following:
       ``(i) Exclude the preferred lender from participating in 
     the program under this subsection.
       ``(ii) Exclude the preferred lender from participating in 
     the Preferred Lender Program for a period of not more than 5 
     years.
       ``(8) Fees.--
       ``(A) In general.--The Administrator may not collect a 
     guarantee fee under this subsection.
       ``(B) Origination fee.--The Administrator may pay a 
     qualified private lender or preferred lender an origination 
     fee for a loan guaranteed under this subsection in an amount 
     agreed upon in advance between the qualified private lender 
     or preferred lender and the Administrator.
       ``(9) Documentation.--A qualified private lender or 
     preferred lender may use its own loan documentation for a 
     loan guaranteed by the Administrator under this subsection, 
     to the extent authorized by the Administrator. The ability of 
     a lender to use its own loan documentation for a loan 
     guaranteed under this subsection shall not be considered part 
     of the criteria for becoming a qualified private lender under 
     the regulations promulgated under paragraph (10).
       ``(10) Implementation regulations.--
       ``(A) In general.--Not later than 1 year after the date of 
     enactment of the Small Business Disaster Response and Loan 
     Improvements Act of 2008, the Administrator shall issue final 
     regulations establishing permanent criteria for qualified 
     private lenders.
       ``(B) Report to congress.--Not later than 6 months after 
     the date of enactment of the Small Business Disaster Response 
     and Loan Improvements Act of 2008, the Administrator shall 
     submit a report on the progress of the regulations required 
     by subparagraph (A) to the Committee on Small Business and 
     Entrepreneurship of the Senate and the Committee on Small 
     Business of the House of Representatives.
       ``(11) Authorization of appropriations.--
       ``(A) In general.--Amounts necessary to carry out this 
     subsection shall be made available from amounts appropriated 
     to the Administration to carry out subsection (b).
       ``(B) Authority to reduce interest rates and other terms 
     and conditions.--Funds appropriated to the Administration to 
     carry out this subsection, may be used by the Administrator 
     to meet the loan terms and conditions specified in paragraph 
     (6).
       ``(12) Purchase of loans.--The Administrator may enter into 
     an agreement with a qualified private lender or preferred 
     lender to purchase any loan guaranteed under this 
     subsection.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to any major disaster declared on or after the 
     date of enactment of this Act.

     SEC. 12084. IMMEDIATE DISASTER ASSISTANCE PROGRAM.

       The Small Business Act is amended by inserting after 
     section 41, as added by this Act, the following:

     ``SEC. 42. IMMEDIATE DISASTER ASSISTANCE PROGRAM.

       ``(a) Program Required.--The Administrator shall carry out 
     a program, to be known as the Immediate Disaster Assistance 
     program, under which the Administration participates on a 
     deferred (guaranteed) basis in 85 percent of the balance of 
     the financing outstanding at the time of disbursement of the 
     loan if such balance is less than or equal to $25,000 for 
     businesses affected by a disaster.
       ``(b) Eligibility Requirement.--To receive a loan 
     guaranteed under subsection (a), the applicant shall also 
     apply for, and meet basic eligibility standards for, a loan 
     under subsection (b) or (c) of section 7.
       ``(c) Use of Proceeds.--A person who receives a loan under 
     subsection (b) or (c) of section 7 shall use the proceeds of 
     that loan to repay all loans guaranteed under subsection (a), 
     if any, before using the proceeds for any other purpose.
       ``(d) Loan Terms.--
       ``(1) No prepayment penalty.--There shall be no prepayment 
     penalty on a loan guaranteed under subsection (a).
       ``(2) Repayment.--A person who receives a loan guaranteed 
     under subsection (a) and who is disapproved for a loan under 
     subsection (b) or (c) of section 7, as the case may be, shall 
     repay the loan guaranteed under subsection (a) not later than 
     the date established by the Administrator, which may not be 
     earlier than 10 years after the date on which the loan 
     guaranteed under subsection is disbursed.
       ``(e) Approval or Disapproval.--The Administrator shall 
     ensure that each applicant for a loan under the program 
     receives a decision approving or disapproving of the 
     application within 36 hours after the Administration receives 
     the application.''.

     SEC. 12085. EXPEDITED DISASTER ASSISTANCE LOAN PROGRAM.

       (a) Definition.--In this section, the term ``program'' 
     means the expedited disaster assistance business loan program 
     established under subsection (b).
       (b) Creation of Program.--The Administrator shall take such 
     administrative action as is necessary to establish and 
     implement an expedited disaster assistance business loan 
     program under which the Administration may, on an expedited 
     basis, guarantee timely payment of principal and interest, as 
     scheduled on any loan made to an eligible small business 
     concern under paragraph (9) of section 7(b) of the Small 
     Business Act (15 U.S.C. 636(b)), as added by this Act.
       (c) Consultation Required.--In establishing the program, 
     the Administrator shall consult with--
       (1) appropriate personnel of the Administration (including 
     District Office personnel of the Administration);
       (2) appropriate technical assistance providers (including 
     small business development centers);
       (3) appropriate lenders and credit unions;
       (4) the Committee on Small Business and Entrepreneurship of 
     the Senate; and
       (5) the Committee on Small Business of the House of 
     Representatives.
       (d) Rules.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Administrator shall issue rules in 
     final form establishing and implementing the program in 
     accordance with this section. Such rules shall apply as 
     provided for in this section, beginning 90 days after their 
     issuance in final form.
       (2) Contents.--The rules promulgated under paragraph (1) 
     shall--
       (A) identify whether appropriate uses of funds under the 
     program may include--
       (i) paying employees;
       (ii) paying bills and other financial obligations;
       (iii) making repairs;
       (iv) purchasing inventory;
       (v) restarting or operating a small business concern in the 
     community in which it was conducting operations prior to the 
     applicable major disaster, or to a neighboring area, county, 
     or parish in the disaster area; or
       (vi) covering additional costs until the small business 
     concern is able to obtain funding through insurance claims, 
     Federal assistance programs, or other sources; and
       (B) set the terms and conditions of any loan made under the 
     program, subject to paragraph (3).
       (3) Terms and conditions.--A loan guaranteed by the 
     Administration under this section--
       (A) shall be for not more than $150,000;
       (B) shall be a short-term loan, not to exceed 180 days, 
     except that the Administrator may extend such term as the 
     Administrator determines necessary or appropriate on a case-
     by-case basis;
       (C) shall have an interest rate not to exceed 300 basis 
     points above the interest rate established by the Board of 
     Governors of the Federal Reserve System that 1 bank charges 
     another for reserves that are lent on an overnight basis on 
     the date the loan is made;
       (D) shall have no prepayment penalty;
       (E) may only be made to a borrower that meets the 
     requirements for a loan under section 7(b) of the Small 
     Business Act (15 U.S.C. 636(b)), as amended by this Act;
       (F) may be refinanced as part of any subsequent disaster 
     assistance provided under section 7(b) of the Small Business 
     Act (15 U.S.C. 636(b)), as amended by this Act;
       (G) may receive expedited loss verification and loan 
     processing, if the applicant is--
       (i) a major source of employment in the disaster area 
     (which shall be determined in the same manner as under 
     section 7(b)(3)(B) of the Small Business Act (15 U.S.C. 
     636(b)(3)(B))); or
       (ii) vital to recovery efforts in the region (including 
     providing debris removal services, manufactured housing, or 
     building materials); and
       (H) shall be subject to such additional terms as the 
     Administrator determines necessary or appropriate.
       (e) Report to Congress.--Not later than 5 months after the 
     date of enactment of this Act, the Administrator shall report 
     to the Committee on Small Business and Entrepreneurship of 
     the Senate and the Committee on Small Business of the House 
     of Representatives on the progress of the Administrator in 
     establishing the program.
       (f) Authorization.--There are authorized to be appropriated 
     to the Administrator such sums as are necessary to carry out 
     this section.

     SEC. 12086. GULF COAST DISASTER LOAN REFINANCING PROGRAM.

       (a) In General.--The Administrator may carry out a program 
     to refinance Gulf Coast disaster loans (in this section 
     referred to as the ``program'').
       (b) Terms.--The terms of a Gulf Coast disaster loan 
     refinanced under the program shall be identical to the terms 
     of the original loan, except that the Administrator may 
     provide an option to defer repayment on the loan. A deferment 
     under the program shall end not later than 4 years after the 
     date on which the initial disbursement under the original 
     loan was made.
       (c) Amount.--The amount of a Gulf Coast disaster loan 
     refinanced under the program shall not exceed the amount of 
     the original loan.

[[Page H3546]]

       (d) Disclosure of Accrued Interest.--If the Administrator 
     provides an option to defer repayment under the program, the 
     Administrator shall disclose the accrued interest that must 
     be paid under the option.
       (e) Definition.--In this section, the term ``Gulf Coast 
     disaster loan'' means a loan--
       (1) made under section 7(b) of the Small Business Act (15 
     U.S.C. 636(b));
       (2) in response to Hurricane Katrina of 2005, Hurricane 
     Rita of 2005, or Hurricane Wilma of 2005; and
       (3) to a small business concern located in a county or 
     parish designated by the Administrator as a disaster area by 
     reason of a hurricane described in paragraph (2) under 
     disaster declaration 10176, 10177, 10178, 10179, 10180, 
     10181, 10203, 10204, 10205, 10206, 10222, or 10223.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to carry out 
     this section.

                        PART III--MISCELLANEOUS

     SEC. 12091. REPORTS ON DISASTER ASSISTANCE.

       (a) Monthly Accounting Report to Congress.--
       (1) Reporting requirements.--Not later than the fifth 
     business day of each month during the applicable period for a 
     major disaster, the Administrator shall submit to the 
     Committee on Small Business and Entrepreneurship and the 
     Committee on Appropriations of the Senate and to the 
     Committee on Small Business and the Committee on 
     Appropriations of the House of Representatives a report on 
     the operation of the disaster loan program authorized under 
     section 7 of the Small Business Act (15 U.S.C. 636) for that 
     major disaster during the preceding month.
       (2) Contents.--Each report submitted under paragraph (1) 
     shall include--
       (A) the daily average lending volume, in number of loans 
     and dollars, and the percent by which each category has 
     increased or decreased since the previous report under 
     paragraph (1);
       (B) the weekly average lending volume, in number of loans 
     and dollars, and the percent by which each category has 
     increased or decreased since the previous report under 
     paragraph (1);
       (C) the amount of funding spent over the month for loans, 
     both in appropriations and program level, and the percent by 
     which each category has increased or decreased since the 
     previous report under paragraph (1);
       (D) the amount of funding available for loans, both in 
     appropriations and program level, and the percent by which 
     each category has increased or decreased since the previous 
     report under paragraph (1), noting the source of any 
     additional funding;
       (E) an estimate of how long the available funding for such 
     loans will last, based on the spending rate;
       (F) the amount of funding spent over the month for staff, 
     along with the number of staff, and the percent by which each 
     category has increased or decreased since the previous report 
     under paragraph (1);
       (G) the amount of funding spent over the month for 
     administrative costs, and the percent by which such spending 
     has increased or decreased since the previous report under 
     paragraph (1);
       (H) the amount of funding available for salaries and 
     expenses combined, and the percent by which such funding has 
     increased or decreased since the previous report under 
     paragraph (1), noting the source of any additional funding; 
     and
       (I) an estimate of how long the available funding for 
     salaries and expenses will last, based on the spending rate.
       (b) Weekly Disaster Updates to Congress for Presidentially 
     Declared Disasters.--
       (1) In general.--Each week during a disaster update period, 
     the Administration shall submit to the Committee on Small 
     Business and Entrepreneurship of the Senate and to the 
     Committee on Small Business of the House of Representatives a 
     report on the operation of the disaster loan program of the 
     Administration for the area in which the President declared a 
     major disaster.
       (2) Contents.--Each report submitted under paragraph (1) 
     shall include--
       (A) the number of Administration staff performing loan 
     processing, field inspection, and other duties for the 
     declared disaster, and the allocations of such staff in the 
     disaster field offices, disaster recovery centers, workshops, 
     and other Administration offices nationwide;
       (B) the daily number of applications received from 
     applicants in the relevant area, as well as a breakdown of 
     such figures by State;
       (C) the daily number of applications pending application 
     entry from applicants in the relevant area, as well as a 
     breakdown of such figures by State;
       (D) the daily number of applications withdrawn by 
     applicants in the relevant area, as well as a breakdown of 
     such figures by State;
       (E) the daily number of applications summarily declined by 
     the Administration from applicants in the relevant area, as 
     well as a breakdown of such figures by State;
       (F) the daily number of applications declined by the 
     Administration from applicants in the relevant area, as well 
     as a breakdown of such figures by State;
       (G) the daily number of applications in process from 
     applicants in the relevant area, as well as a breakdown of 
     such figures by State;
       (H) the daily number of applications approved by the 
     Administration from applicants in the relevant area, as well 
     as a breakdown of such figures by State;
       (I) the daily dollar amount of applications approved by the 
     Administration from applicants in the relevant area, as well 
     as a breakdown of such figures by State;
       (J) the daily amount of loans dispersed, both partially and 
     fully, by the Administration to applicants in the relevant 
     area, as well as a breakdown of such figures by State;
       (K) the daily dollar amount of loans disbursed, both 
     partially and fully, from the relevant area, as well as a 
     breakdown of such figures by State;
       (L) the number of applications approved, including dollar 
     amount approved, as well as applications partially and fully 
     disbursed, including dollar amounts, since the last report 
     under paragraph (1); and
       (M) the declaration date, physical damage closing date, 
     economic injury closing date, and number of counties included 
     in the declaration of a major disaster.
       (c) Periods When Additional Disaster Assistance Is Made 
     Available.--
       (1) In general.--During any period for which the 
     Administrator declares eligibility for additional disaster 
     assistance under paragraph (9) of section 7(b) of the Small 
     Business Act (15 U.S.C. 632(b)), as amended by this Act, the 
     Administrator shall, on a monthly basis, submit to the 
     Committee on Small Business and Entrepreneurship of the 
     Senate and to the Committee on Small Business of the House of 
     Representatives a report on the disaster assistance 
     operations of the Administration with respect to the 
     applicable major disaster.
       (2) Contents.--Each report submitted under paragraph (1) 
     shall specify--
       (A) the number of applications for disaster assistance 
     distributed;
       (B) the number of applications for disaster assistance 
     received;
       (C) the average time for the Administration to approve or 
     disapprove an application for disaster assistance;
       (D) the amount of disaster loans approved;
       (E) the average time for initial disbursement of disaster 
     loan proceeds; and
       (F) the amount of disaster loan proceeds disbursed.
       (d) Notice of the Need for Supplemental Funds.--On the same 
     date that the Administrator notifies any committee of the 
     Senate or the House of Representatives that supplemental 
     funding is necessary for the disaster loan program of the 
     Administration in any fiscal year, the Administrator shall 
     notify in writing the Committee on Small Business and 
     Entrepreneurship of the Senate and the Committee on Small 
     Business of the House of Representatives regarding the need 
     for supplemental funds for that loan program.
       (e) Report on Contracting.--
       (1) In general.--Not later than 6 months after the date on 
     which the President declares a major disaster, and every 6 
     months thereafter until the date that is 18 months after the 
     date on which the major disaster was declared, the 
     Administrator shall submit a report to the Committee on Small 
     Business and Entrepreneurship of the Senate and to the 
     Committee on Small Business of the House of Representatives 
     regarding Federal contracts awarded as a result of that major 
     disaster.
       (2) Contents.--Each report submitted under paragraph (1) 
     shall include--
       (A) the total number of contracts awarded as a result of 
     that major disaster;
       (B) the total number of contracts awarded to small business 
     concerns as a result of that major disaster;
       (C) the total number of contracts awarded to women and 
     minority-owned businesses as a result of that major disaster; 
     and
       (D) the total number of contracts awarded to local 
     businesses as a result of that major disaster.
       (f) Report on Loan Approval Rate.--
       (1) In general.--Not later than 6 months after the date of 
     enactment of this Act, the Administrator shall submit a 
     report to the Committee on Small Business and 
     Entrepreneurship of the Senate and the Committee on Small 
     Business of the House of Representatives detailing how the 
     Administration can improve the processing of applications 
     under the disaster loan program of the Administration.
       (2) Contents.--The report submitted under paragraph (1) 
     shall include--
       (A) recommendations, if any, regarding--
       (i) staffing levels during a major disaster;
       (ii) how to improve the process for processing, approving, 
     and disbursing loans under the disaster loan program of the 
     Administration, to ensure that the maximum assistance is 
     provided to victims in a timely manner;
       (iii) the viability of using alternative methods for 
     assessing the ability of an applicant to repay a loan, 
     including the credit score of the applicant on the day before 
     the date on which the disaster for which the applicant is 
     seeking assistance was declared;
       (iv) methods, if any, for the Administration to expedite 
     loss verification and loan processing of disaster loans 
     during a major disaster for businesses affected by, and 
     located in the area for which the President declared, the 
     major disaster that are a major source of employment in the 
     area or are vital to recovery efforts in the region 
     (including providing debris removal services, manufactured 
     housing, or building materials);
       (v) legislative changes, if any, needed to implement 
     findings from the Accelerated Disaster Response Initiative of 
     the Administration; and
       (vi) a description of how the Administration plans to 
     integrate and coordinate the response to a major disaster 
     with the technical assistance programs of the Administration; 
     and
       (B) the plans of the Administrator for implementing any 
     recommendation made under subparagraph (A).
       (g) Reports on Disaster Assistance.--The Small Business Act 
     is amended by inserting after section 42, as added by this 
     Act, the following:

     ``SEC. 43. ANNUAL REPORTS ON DISASTER ASSISTANCE.

       ``Not later than 45 days after the end of a fiscal year, 
     the Administrator shall submit to the Committee on Small 
     Business and Entrepreneurship of the Senate and the Committee 
     on Small

[[Page H3547]]

     Business of the House of Representatives a report on the 
     disaster assistance operations of the Administration for that 
     fiscal year. The report shall--
       ``(1) specify the number of Administration personnel 
     involved in such operations;
       ``(2) describe any material changes to those operations, 
     such as changes to technologies used or to personnel 
     responsibilities;
       ``(3) describe and assess the effectiveness of the 
     Administration in responding to disasters during that fiscal 
     year, including a description of the number and amounts of 
     loans made for damage and for economic injury; and
       ``(4) describe the plans of the Administration for 
     preparing to respond to disasters during the next fiscal 
     year.''.

                     TITLE XIII--COMMODITY FUTURES

     SEC. 13001. SHORT TITLE.

       This title may be cited as the ``CFTC Reauthorization Act 
     of 2008''.

                     Subtitle A--General Provisions

     SEC. 13101. COMMISSION AUTHORITY OVER AGREEMENTS, CONTRACTS 
                   OR TRANSACTIONS IN FOREIGN CURRENCY.

       (a) In General.--Section 2(c)(2) of the Commodity Exchange 
     Act (7 U.S.C. 2(c)(2)) is amended by striking subparagraphs 
     (B) and (C) and inserting the following:
       ``(B) Agreements, contracts, and transactions in retail 
     foreign currency.--
       ``(i) This Act applies to, and the Commission shall have 
     jurisdiction over, an agreement, contract, or transaction in 
     foreign currency that--

       ``(I) is a contract of sale of a commodity for future 
     delivery (or an option on such a contract) or an option 
     (other than an option executed or traded on a national 
     securities exchange registered pursuant to section 6(a) of 
     the Securities Exchange Act of 1934 (15 U.S.C. 78f(a))); and
       ``(II) is offered to, or entered into with, a person that 
     is not an eligible contract participant, unless the 
     counterparty, or the person offering to be the counterparty, 
     of the person is--

       ``(aa) a financial institution;
       ``(bb)(AA) a broker or dealer registered under section 
     15(b) (except paragraph (11) thereof) or 15C of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78o(b), 78o-5); or
       ``(BB) an associated person of a broker or dealer 
     registered under section 15(b) (except paragraph (11) 
     thereof) or 15C of the Securities Exchange Act of 1934 (15 
     U.S.C. 78o(b), 78o-5) concerning the financial or securities 
     activities of which the broker or dealer makes and keeps 
     records under section 15C(b) or 17(h) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78o-5(b), 78q(h));
       ``(cc)(AA) a futures commission merchant that is primarily 
     or substantially engaged in the business activities described 
     in section 1a(20) of this Act, is registered under this Act, 
     is not a person described in item (bb) of this subclause, and 
     maintains adjusted net capital equal to or in excess of the 
     dollar amount that applies for purposes of clause (ii) of 
     this subparagraph; or
       ``(BB) an affiliated person of a futures commission 
     merchant that is primarily or substantially engaged in the 
     business activities described in section 1a(20) of this Act, 
     is registered under this Act, and is not a person described 
     in item (bb) of this subclause, if the affiliated person 
     maintains adjusted net capital equal to or in excess of the 
     dollar amount that applies for purposes of clause (ii) of 
     this subparagraph and is not a person described in such item 
     (bb), and the futures commission merchant makes and keeps 
     records under section 4f(c)(2)(B) of this Act concerning the 
     futures and other financial activities of the affiliated 
     person;
       ``(dd) an insurance company described in section 
     1a(12)(A)(ii) of this Act, or a regulated subsidiary or 
     affiliate of such an insurance company;
       ``(ee) a financial holding company (as defined in section 2 
     of the Bank Holding Company Act of 1956);
       ``(ff) an investment bank holding company (as defined in 
     section 17(i) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78q(i))); or
       ``(gg) a retail foreign exchange dealer that maintains 
     adjusted net capital equal to or in excess of the dollar 
     amount that applies for purposes of clause (ii) of this 
     subparagraph and is registered in such capacity with the 
     Commission, subject to such terms and conditions as the 
     Commission shall prescribe, and is a member of a futures 
     association registered under section 17.
       ``(ii) The dollar amount that applies for purposes of this 
     clause is--

       ``(I) $10,000,000, beginning 120 days after the date of the 
     enactment of this clause;
       ``(II) $15,000,000, beginning 240 days after such date of 
     enactment; and
       ``(III) $20,000,000, beginning 360 days after such date of 
     enactment.

       ``(iii) Notwithstanding items (cc) and (gg) of clause 
     (i)(II) of this subparagraph, agreements, contracts, or 
     transactions described in clause (i) of this subparagraph 
     shall be subject to subsection (a)(1)(B) of this section and 
     sections 4(b), 4b, 4c(b), 4o, 6(c) and 6(d) (except to the 
     extent that sections 6(c) and 6(d) prohibit manipulation of 
     the market price of any commodity in interstate commerce, or 
     for future delivery on or subject to the rules of any 
     market), 6c, 6d, 8(a), 13(a), and 13(b) if the agreements, 
     contracts, or transactions are offered, or entered into, by a 
     person that is registered as a futures commission merchant or 
     retail foreign exchange dealer, or an affiliated person of a 
     futures commission merchant registered under this Act that is 
     not also a person described in any of item (aa), (bb), (dd), 
     (ee), or (ff) of clause (i)(II) of this subparagraph.
       ``(iv)(I) Notwithstanding items (cc) and (gg) of clause 
     (i)(II), a person, unless registered in such capacity as the 
     Commission by rule, regulation, or order shall determine and 
     a member of a futures association registered under section 
     17, shall not--

       ``(aa) solicit or accept orders from any person that is not 
     an eligible contract participant in connection with 
     agreements, contracts, or transactions described in clause 
     (i) entered into with or to be entered into with a person who 
     is not described in item (aa), (bb), (dd), (ee), or (ff) of 
     clause (i)(II);
       ``(bb) exercise discretionary trading authority or obtain 
     written authorization to exercise discretionary trading 
     authority over any account for or on behalf of any person 
     that is not an eligible contract participant in connection 
     with agreements, contracts, or transactions described in 
     clause (i) entered into with or to be entered into with a 
     person who is not described in item (aa), (bb), (dd), (ee), 
     or (ff) of clause (i)(II); or
       ``(cc) operate or solicit funds, securities, or property 
     for any pooled investment vehicle that is not an eligible 
     contract participant in connection with agreements, 
     contracts, or transactions described in clause (i) entered 
     into with or to be entered into with a person who is not 
     described in item (aa), (bb), (dd), (ee), or (ff) of clause 
     (i)(II).

       ``(II) Subclause (I) of this clause shall not apply to--

       ``(aa) any person described in any of item (aa), (bb), 
     (dd), (ee), or (ff) of clause (i)(II);
       ``(bb) any such person's associated persons; or
       ``(cc) any person who would be exempt from registration if 
     engaging in the same activities in connection with 
     transactions conducted on or subject to the rules of a 
     contract market or a derivatives transaction execution 
     facility.

       ``(III) Notwithstanding items (cc) and (gg) of clause 
     (i)(II), the Commission may make, promulgate, and enforce 
     such rules and regulations as, in the judgment of the 
     Commission, are reasonably necessary to effectuate any of the 
     provisions of, or to accomplish any of the purposes of, this 
     Act in connection with the activities of persons subject to 
     subclause (I).
       ``(IV) Subclause (III) of this clause shall not apply to--

       ``(aa) any person described in any of item (aa) through 
     (ff) of clause (i)(II);
       ``(bb) any such person's associated persons; or
       ``(cc) any person who would be exempt from registration if 
     engaging in the same activities in connection with 
     transactions conducted on or subject to the rules of a 
     contract market or a derivatives transaction execution 
     facility.

       ``(v) Notwithstanding items (cc) and (gg) of clause 
     (i)(II), the Commission may make, promulgate, and enforce 
     such rules and regulations as, in the judgment of the 
     Commission, are reasonably necessary to effectuate any of the 
     provisions of, or to accomplish any of the purposes of, this 
     Act in connection with agreements, contracts, or transactions 
     described in clause (i) which are offered, or entered into, 
     by a person described in item (cc) or (gg) of clause (i)(II).
       ``(C)(i)(I) This subparagraph shall apply to any agreement, 
     contract, or transaction in foreign currency that is--

       ``(aa) offered to, or entered into with, a person that is 
     not an eligible contract participant (except that this 
     subparagraph shall not apply if the counterparty, or the 
     person offering to be the counterparty, of the person that is 
     not an eligible contract participant is a person described in 
     any of item (aa), (bb), (dd), (ee), or (ff) of subparagraph 
     (B)(i)(II)); and
       ``(bb) offered, or entered into, on a leveraged or margined 
     basis, or financed by the offeror, the counterparty, or a 
     person acting in concert with the offeror or counterparty on 
     a similar basis.

       ``(II) Subclause (I) of this clause shall not apply to--
       ``(aa) a security that is not a security futures product; 
     or
       ``(bb) a contract of sale that--

       ``(AA) results in actual delivery within 2 days; or
       ``(BB) creates an enforceable obligation to deliver between 
     a seller and buyer that have the ability to deliver and 
     accept delivery, respectively, in connection with their line 
     of business.

       ``(ii)(I) Agreements, contracts, or transactions described 
     in clause (i) of this subparagraph shall be subject to 
     subsection (a)(1)(B) of this section and sections 4(b), 4b, 
     4c(b), 4o, 6(c) and 6(d) (except to the extent that sections 
     6(c) and 6(d) prohibit manipulation of the market price of 
     any commodity in interstate commerce, or for future delivery 
     on or subject to the rules of any market), 6c, 6d, 8(a), 
     13(a), and 13(b).
       ``(II) Subclause (I) of this clause shall not apply to--
       ``(aa) any person described in any of item (aa), (bb), 
     (dd), (ee), or (ff) of subparagraph (B)(i)(II); or
       ``(bb) any such person's associated persons.
       ``(III) The Commission may make, promulgate, and enforce 
     such rules and regulations as, in the judgment of the 
     Commission, are reasonably necessary to effectuate any of the 
     provisions of or to accomplish any of the purposes of this 
     Act in connection with agreements, contracts, or transactions 
     described in clause (i) of this subparagraph if the 
     agreements, contracts, or transactions are offered, or 
     entered into, by a person that is not described in item (aa) 
     through (ff) of subparagraph (B)(i)(II).
       ``(iii)(I) A person, unless registered in such capacity as 
     the Commission by rule, regulation, or order shall determine 
     and a member of a futures association registered under 
     section 17, shall not--
       ``(aa) solicit or accept orders from any person that is not 
     an eligible contract participant in connection with 
     agreements, contracts, or transactions described in clause 
     (i) of this subparagraph entered into with or to be entered 
     into with a person who is not described in item (aa), (bb), 
     (dd), (ee), or (ff) of subparagraph (B)(i)(II);
       ``(bb) exercise discretionary trading authority or obtain 
     written authorization to exercise written trading authority 
     over any account for or on behalf of any person that is not 
     an eligible

[[Page H3548]]

     contract participant in connection with agreements, 
     contracts, or transactions described in clause (i) of this 
     subparagraph entered into with or to be entered into with a 
     person who is not described in item (aa), (bb), (dd), (ee), 
     or (ff) of subparagraph (B)(i)(II); or
       ``(cc) operate or solicit funds, securities, or property 
     for any pooled investment vehicle that is not an eligible 
     contract participant in connection with agreements, 
     contracts, or transactions described in clause (i) of this 
     subparagraph entered into with or to be entered into with a 
     person who is not described in item (aa), (bb), (dd), (ee), 
     or (ff) of subparagraph (B)(i)(II).
       ``(II) Subclause (I) of this clause shall not apply to--
       ``(aa) any person described in item (aa), (bb), (dd), (ee), 
     or (ff) of subparagraph (B)(i)(II);
       ``(bb) any such person's associated persons; or
       ``(cc) any person who would be exempt from registration if 
     engaging in the same activities in connection with 
     transactions conducted on or subject to the rules of a 
     contract market or a derivatives transaction execution 
     facility.
       ``(III) The Commission may make, promulgate, and enforce 
     such rules and regulations as, in the judgment of the 
     Commission, are reasonably necessary to effectuate any of the 
     provisions of, or to accomplish any of the purposes of, this 
     Act in connection with the activities of persons subject to 
     subclause (I).
       ``(IV) Subclause (III) of this clause shall not apply to--
       ``(aa) any person described in item (aa) through (ff) of 
     subparagraph (B)(i)(II);
       ``(bb) any such person's associated persons; or
       ``(cc) any person who would be exempt from registration if 
     engaging in the same activities in connection with 
     transactions conducted on or subject to the rules of a 
     contract market or a derivatives transaction execution 
     facility.
       ``(iv) Sections 4(b) and 4b shall apply to any agreement, 
     contract, or transaction described in clause (i) of this 
     subparagraph as if the agreement, contract, or transaction 
     were a contract of sale of a commodity for future delivery.
       ``(v) This subparagraph shall not be construed to limit any 
     jurisdiction that the Commission may otherwise have under any 
     other provision of this Act over an agreement, contract, or 
     transaction that is a contract of sale of a commodity for 
     future delivery.
       ``(vi) This subparagraph shall not be construed to limit 
     any jurisdiction that the Commission or the Securities and 
     Exchange Commission may otherwise have under any other 
     provision of this Act with respect to security futures 
     products and persons effecting transactions in security 
     futures products.''.
       (b) Effective Date.--The following provisions of the 
     Commodity Exchange Act, as amended by subsection (a) of this 
     section, shall be effective 120 days after the date of the 
     enactment of this Act or at such other time as the Commodity 
     Futures Trading Commission shall determine:
       (1) Subparagraphs (B)(i)(II)(gg), (B)(iv), and (C)(iii) of 
     section 2(c)(2).
       (2) The provisions of section 2(c)(2)(B)(i)(II)(cc) that 
     set forth adjusted net capital requirements, and the 
     provisions of such section that require a futures commission 
     merchant to be primarily or substantially engaged in certain 
     business activities.

     SEC. 13102. ANTI-FRAUD AUTHORITY OVER PRINCIPAL-TO-PRINCIPAL 
                   TRANSACTIONS.

       Section 4b of the Commodity Exchange Act (7 U.S.C. Section 
     6b) is amended--
       (1) by redesignating subsections (b) and (c) as subsections 
     (c) and (d), respectively; and
       (2) by striking all through the end of subsection (a) and 
     inserting the following:

     ``SEC. 4B. CONTRACTS DESIGNED TO DEFRAUD OR MISLEAD.

       ``(a) Unlawful Actions.--It shall be unlawful--
       ``(1) for any person, in or in connection with any order to 
     make, or the making of, any contract of sale of any commodity 
     in interstate commerce or for future delivery that is made, 
     or to be made, on or subject to the rules of a designated 
     contract market, for or on behalf of any other person; or
       ``(2) for any person, in or in connection with any order to 
     make, or the making of, any contract of sale of any commodity 
     for future delivery, or other agreement, contract, or 
     transaction subject to paragraphs (1) and (2) of section 
     5a(g), that is made, or to be made, for or on behalf of, or 
     with, any other person, other than on or subject to the rules 
     of a designated contract market--
       ``(A) to cheat or defraud or attempt to cheat or defraud 
     the other person;
       ``(B) willfully to make or cause to be made to the other 
     person any false report or statement or willfully to enter or 
     cause to be entered for the other person any false record;
       ``(C) willfully to deceive or attempt to deceive the other 
     person by any means whatsoever in regard to any order or 
     contract or the disposition or execution of any order or 
     contract, or in regard to any act of agency performed, with 
     respect to any order or contract for or, in the case of 
     paragraph (2), with the other person; or
       ``(D)(i) to bucket an order if the order is either 
     represented by the person as an order to be executed, or is 
     required to be executed, on or subject to the rules of a 
     designated contract market; or
       ``(ii) to fill an order by offset against the order or 
     orders of any other person, or willfully and knowingly and 
     without the prior consent of the other person to become the 
     buyer in respect to any selling order of the other person, or 
     become the seller in respect to any buying order of the other 
     person, if the order is either represented by the person as 
     an order to be executed, or is required to be executed, on or 
     subject to the rules of a designated contract market unless 
     the order is executed in accordance with the rules of the 
     designated contract market.
       ``(b) Clarification.--Subsection (a)(2) of this section 
     shall not obligate any person, in or in connection with a 
     transaction in a contract of sale of a commodity for future 
     delivery, or other agreement, contract or transaction subject 
     to paragraphs (1) and (2) of section 5a(g), with another 
     person, to disclose to the other person nonpublic information 
     that may be material to the market price, rate, or level of 
     the commodity or transaction, except as necessary to make any 
     statement made to the other person in or in connection with 
     the transaction not misleading in any material respect.''.

     SEC. 13103. CRIMINAL AND CIVIL PENALTIES.

       (a) Enforcement Powers of the Commission.--Section 6(c) of 
     the Commodity Exchange Act (7 U.S.C. 9, 15) is amended in 
     clause (3) of the 10th sentence--
       (1) by inserting ``(A)'' after ``assess such person''; and
       (2) by inserting after ``each such violation'' the 
     following: ``, or (B) in any case of manipulation or 
     attempted manipulation in violation of this subsection, 
     subsection (d) of this section, or section 9(a)(2), a civil 
     penalty of not more than the greater of $1,000,000 or triple 
     the monetary gain to the person for each such violation,''.
       (b) Nonenforcement of Rules of Government or Other 
     Violations.--Section 6b of such Act (7 U.S.C. 13a) is 
     amended--
       (1) in the first sentence, by inserting before the period 
     at the end the following: ``, or, in any case of manipulation 
     or attempted manipulation in violation of section 6(c), 6(d), 
     or 9(a)(2), a civil penalty of not more than $1,000,000 for 
     each such violation''; and
       (2) in the second sentence, by inserting before the period 
     at the end the following: ``, except that if the failure or 
     refusal to obey or comply with the order involved any offense 
     under section 9(a)(2), the registered entity, director, 
     officer, agent, or employee shall be guilty of a felony and, 
     on conviction, shall be subject to penalties under section 
     9(a)(2)''.
       (c) Action to Enjoin or Restrain Violations.--Section 6c(d) 
     of such Act (7 U.S.C. 13a-1(d)) is amended by striking all 
     that precedes paragraph (2) and inserting the following:
       ``(d) Civil Penalties.--
       ``(1) In general.--In any action brought under this 
     section, the Commission may seek and the court shall have 
     jurisdiction to impose, on a proper showing, on any person 
     found in the action to have committed any violation--
       ``(A) a civil penalty in the amount of not more than the 
     greater of $100,000 or triple the monetary gain to the person 
     for each violation; or
       ``(B) in any case of manipulation or attempted manipulation 
     in violation of section 6(c), 6(d), or 9(a)(2), a civil 
     penalty in the amount of not more than the greater of 
     $1,000,000 or triple the monetary gain to the person for each 
     violation.''.
       (d) Violations Generally.--Section 9(a) of such Act (7 
     U.S.C. 13(a)) is amended in the matter preceding paragraph 
     (1)--
       (1) by striking ``(or $500,000 in the case of a person who 
     is an individual)''; and
       (2) by striking ``five years'' and inserting ``10 years''.

     SEC. 13104. AUTHORIZATION OF APPROPRIATIONS.

       Section 12(d) of the Commodity Exchange Act (7 U.S.C. 
     16(d)) is amended to read as follows:
       ``(d) There are authorized to be appropriated such sums as 
     are necessary to carry out this Act for each of the fiscal 
     years 2008 through 2013.''.

     SEC. 13105. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Section 4a(e) of the Commodity Exchange Act (7 U.S.C. 
     6a(e)) is amended--
       (1) by inserting ``or certified by a registered entity 
     pursuant to section 5c(c)(1)'' after ``approved by the 
     Commission'' ; and
       (2) by striking ``section 9(c)'' and inserting ``section 
     9(a)(5)''.
       (b) Section 4f(c)(4)(B)(i) of such Act (7 U.S.C. 
     6f(c)(4)(B)(i)) is amended by striking ``compiled'' and 
     inserting ``complied''.
       (c) Section 4k of such Act (7 U.S.C. 6k) is amended by 
     redesignating the second paragraph (5) as paragraph (6).
       (d) The Commodity Exchange Act is amended--
       (1) by redesignating the first section 4p (7 U.S.C. 6o-1), 
     as added by section 121 of the Commodity Futures 
     Modernization Act of 2000, as section 4q; and
       (2) by moving such section to after the second section 4p, 
     as added by section 206 of Public Law 93-446.
       (e) Subsections (a)(1) and (d)(1) of section 5c of such Act 
     (7 U.S.C. 7a-2(a)(1), (d)(1)) are each amended by striking 
     ``5b(d)(2)'' and inserting ``5b(c)(2)''.
       (f) Sections 5c(f) and 17(r) of such Act (7 U.S.C. 7a-2(f), 
     21(r)) are each amended by striking ``4d(3)'' and inserting 
     ``4d(c)''.
       (g) Section 8(a)(1) of such Act (7 U.S.C. 12(a)(1)) is 
     amended in the matter following subparagraph (B)--
       (1) by striking ``commenced'' in the 2nd place it appears; 
     and
       (2) by inserting ``commenced'' after ``in a judicial 
     proceeding''.
       (h) Section 9 of such Act (7 U.S.C. 13) is amended--
       (1) in subsection (f)(1), by striking the period and 
     inserting ``; or''; and
       (2) by redesignating subsection (f) as subsection (e).
       (i) Section 22(a)(2) of such Act (7 U.S.C. 25(a)(2)) is 
     amended by striking ``5b(b)(1)(E)'' and inserting 
     ``5b(c)(2)(H)''.
       (j) Section 1a(33)(A) of such Act (7 U.S.C. 1a(33)(A)) is 
     amended by striking ``transactions'' and all that follows and 
     inserting ``transactions--
       ``(i) by accepting bids or offers made by other 
     participants that are open to multiple partipants in the 
     facility or system; or

[[Page H3549]]

       ``(ii) through the interaction of multiple bids or multiple 
     offers within a system with a pre-determined non-
     discretionary automated trade matching and execution 
     algorithm.''.
       (k) Section 14(d) of such Act (7 U.S.C. 18(d)) is amended--
       (1) by inserting ``(1)'' before ``If''; and
       (2) by adding after and below the end the following:
       ``(2) A reparation award shall be directly enforceable in 
     district court as if it were a judgment pursuant to section 
     1963 of title 28, United States Code. This paragraph shall 
     operate retroactively from the effective date of its 
     enactment, and shall apply to all reparation awards for which 
     a proceeding described in paragraph (1) is commenced within 3 
     years of the date of the Commission's order.''.

     SEC. 13106. PORTFOLIO MARGINING AND SECURITY INDEX ISSUES.

       (a) The Secretary of the Treasury, the Chairman of the 
     Board of Governors of the Federal Reserve System, the 
     Chairman of the Securities and Exchange Commission, and the 
     Chairman of the Commodity Futures Trading Commission shall 
     work to ensure that the Securities and Exchange Commission 
     (SEC), the Commodity Futures Trading Commission (CFTC), or 
     both, as appropriate, have taken the actions required under 
     subsection (b).
       (b) The SEC, the CFTC, or both, as appropriate, shall take 
     action under their existing authorities to permit--
       (1) by September 30, 2009, risk-based portfolio margining 
     for security options and security futures products (as 
     defined in section 1a(32) of the Commodity Exchange Act); and
       (2) by June 30, 2009, the trading of futures on certain 
     security indexes by resolving issues related to foreign 
     security indexes.

Subtitle B--Significant Price Discovery Contracts on Exempt Commercial 
                                Markets

     SEC. 13201. SIGNIFICANT PRICE DISCOVERY CONTRACTS.

       (a) Definitions.--Section la of the Commodity Exchange Act 
     (7 U.S.C. la) is amended--
       (1) by redesignating paragraph (33) as paragraph (34); and
       (2) by inserting after paragraph (32) the following:
       ``(33) Significant price discovery contract.--The term 
     `significant price discovery contract' means an agreement, 
     contract, or transaction subject to section 2(h)(7).''.
       (b) Standards Applicable to Significant Price Discovery 
     Contracts.--Section 2(h) of such Act (7 U.S.C. 2(h)) is 
     amended by adding at the end the following:
       ``(7) Significant price discovery contracts.--
       ``(A) In general.--An agreement, contract, or transaction 
     conducted in reliance on the exemption in paragraph (3) shall 
     be subject to the provisions of subparagraphs (B) through 
     (D), under such rules and regulations as the Commission shall 
     promulgate, provided that the Commission determines, in its 
     discretion, that the agreement, contract, or transaction 
     performs a significant price discovery function as described 
     in subparagraph (B).
       ``(B) Significant price discovery determination.--In making 
     a determination whether an agreement, contract, or 
     transaction performs a significant price discovery function, 
     the Commission shall consider, as appropriate:
       ``(i) Price linkage.--The extent to which the agreement, 
     contract, or transaction uses or otherwise relies on a daily 
     or final settlement price, or other major price parameter, of 
     a contract or contracts listed for trading on or subject to 
     the rules of a designated contract market or a derivatives 
     transaction execution facility, or a significant price 
     discovery contract traded on an electronic trading facility, 
     to value a position, transfer or convert a position, cash or 
     financially settle a position, or close out a position.
       ``(ii) Arbitrage.--The extent to which the price for the 
     agreement, contract, or transaction is sufficiently related 
     to the price of a contract or contracts listed for trading on 
     or subject to the rules of a designated contract market or 
     derivatives transaction execution facility, or a significant 
     price discovery contract or contracts trading on or subject 
     to the rules of an electronic trading facility, so as to 
     permit market participants to effectively arbitrage between 
     the markets by simultaneously maintaining positions or 
     executing trades in the contracts on a frequent and recurring 
     basis.
       ``(iii) Material price reference.--The extent to which, on 
     a frequent and recurring basis, bids, offers, or transactions 
     in a commodity are directly based on, or are determined by 
     referencing, the prices generated by agreements, contracts, 
     or transactions being traded or executed on the electronic 
     trading facility.
       ``(iv) Material liquidity.--The extent to which the volume 
     of agreements, contracts, or transactions in the commodity 
     being traded on the electronic trading facility is sufficient 
     to have a material effect on other agreements, contracts, or 
     transactions listed for trading on or subject to the rules of 
     a designated contract market, a derivatives transaction 
     execution facility, or an electronic trading facility 
     operating in reliance on the exemption in paragraph (3).
       ``(v) Other material factors.--Such other material factors 
     as the Commission specifies by rule as relevant to determine 
     whether an agreement, contract, or transaction serves a 
     significant price discovery function.
       ``(C) Core principles applicable to significant price 
     discovery contracts.--
       ``(i) In general.--An electronic trading facility on which 
     significant price discovery contracts are traded or executed 
     shall, with respect to those contracts, comply with the core 
     principles specified in this subparagraph.
       ``(ii) Core principles.--The electronic trading facility 
     shall have reasonable discretion (including discretion to 
     account for differences between cleared and uncleared 
     significant price discovery contracts) in establishing the 
     manner in which it complies with the following core 
     principles:

       ``(I) Contracts not readily susceptible to manipulation.--
     The electronic trading facility shall list only significant 
     price discovery contracts that are not readily susceptible to 
     manipulation.
       ``(II) Monitoring of trading.--The electronic trading 
     facility shall monitor trading in significant price discovery 
     contracts to prevent market manipulation, price distortion, 
     and disruptions of the delivery or cash-settlement process 
     through market surveillance, compliance, and disciplinary 
     practices and procedures, including methods for conducting 
     real-time monitoring of trading and comprehensive and 
     accurate trade reconstructions.
       ``(III) Ability to obtain information.--The electronic 
     trading facility shall--

       ``(aa) establish and enforce rules that will allow the 
     electronic trading facility to obtain any necessary 
     information to perform any of the functions described in this 
     subparagraph;
       ``(bb) provide the information to the Commission upon 
     request; and
       ``(cc) have the capacity to carry out such international 
     information-sharing agreements as the Commission may require.

       ``(IV) Position limitations or accountability.--The 
     electronic trading facility shall adopt, where necessary and 
     appropriate, position limitations or position accountability 
     for speculators in significant price discovery contracts, 
     taking into account positions in other agreements, contracts, 
     and transactions that are treated by a derivatives clearing 
     organization, whether registered or not registered, as 
     fungible with such significant price discovery contracts to 
     reduce the potential threat of market manipulation or 
     congestion, especially during trading in the delivery month.
       ``(V) Emergency authority.--The electronic trading facility 
     shall adopt rules to provide for the exercise of emergency 
     authority, in consultation or cooperation with the 
     Commission, where necessary and appropriate, including the 
     authority--

       ``(aa) to liquidate open positions in a significant price 
     discovery contract; and
       ``(bb) to suspend or curtail trading in a significant price 
     discovery contract.

       ``(VI) Daily publication of trading information.--The 
     electronic trading facility shall make public daily 
     information on price, trading volume, and other trading data 
     to the extent appropriate for significant price discovery 
     contracts
       ``(VII) Compliance with rules.--The electronic trading 
     facility shall monitor and enforce compliance with any rules 
     of the electronic trading facility applicable to significant 
     price discovery contracts, including the terms and conditions 
     of the contracts and any limitations on access to the 
     electronic trading facility with respect to the contracts.
       ``(VIII) Conflict of interest.--The electronic trading 
     facility, with respect to significant price discovery 
     contracts, shall--

       ``(aa) establish and enforce rules to minimize conflicts of 
     interest in its decision-making process; and
       ``(bb) establish a process for resolving the conflicts of 
     interest.

       ``(IX) Antitrust considerations.--Unless necessary or 
     appropriate to achieve the purposes of this Act, the 
     electronic trading facility, with respect to significant 
     price discovery contracts, shall endeavor to avoid--

       ``(aa) adopting any rules or taking any actions that result 
     in any unreasonable restraints of trade; or
       ``(bb) imposing any material anticompetitive burden on 
     trading on the electronic trading facility.
       ``(D) Implementation.--
       ``(i) Clearing.--The Commission shall take into 
     consideration differences between cleared and uncleared 
     significant price discovery contracts when reviewing the 
     implementation of the core principles by an electronic 
     trading facility.
       ``(ii) Review.--As part of the Commission's continual 
     monitoring and surveillance activities, the Commission shall, 
     not less frequently than annually, evaluate, as appropriate, 
     all the agreements, contracts, or transactions conducted on 
     an electronic trading facility in reliance on the exemption 
     provided in paragraph (3) to determine whether they serve a 
     significant price discovery function as described in 
     subparagraph (B) of this paragraph.''.

     SEC. 13202. LARGE TRADER REPORTING.

       (a) Reporting and Recordkeeping.--Section 4g(a) of the 
     Commodity Exchange Act (7 U.S.C. 6g(a)) is amended by 
     inserting ``, and in any significant price discovery contract 
     traded or executed on an electronic trading facility or any 
     agreement, contract, or transaction that is treated by a 
     derivatives clearing organization, whether registered or not 
     registered, as fungible with a significant price discovery 
     contract'' after ``elsewhere''.
       (b) Reports of Positions Equal to or in Excess of Trading 
     Limits.--Section 4i of such Act (7 U.S.C. 6i) is amended--
       (1) by inserting ``, or any significant price discovery 
     contract traded or executed on an electronic trading facility 
     or any agreement, contract, or transaction that is treated by 
     a derivatives clearing organization, whether registered or 
     not registered, as fungible with a significant price 
     discovery contract'' after ``subject to the rules of any 
     contract market or derivatives transaction execution 
     facility''; and
       (2) in the matter following paragraph (2), by inserting 
     ``or electronic trading facility'' after ``subject to the 
     rules of any other board of trade''.

     SEC. 13203. CONFORMING AMENDMENTS.

       (a) Section 1a(12)(A)(x) of the Commodity Exchange Act (7 
     U.S.C. 1a(12)(A)(x)) is amended

[[Page H3550]]

     by inserting ``(other than an electronic trading facility 
     with respect to a significant price discovery contract)'' 
     after ``registered entity''.
       (b) Section 1a(29) of such Act (7 U.S.C. 1a(29)) is 
     amended--
       (1) in subparagraph (C), by striking ``and'' at the end;
       (2) in subparagraph (D), by striking the period and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(E) with respect to a contract that the Commission 
     determines is a significant price discovery contract, any 
     electronic trading facility on which the contract is executed 
     or traded.''.
       (c) Section 2(a)(1)(A) of such Act (7 U.S.C. 2(a)(1)(A)) is 
     amended by inserting after ``future delivery'' the following: 
     ``(including significant price discovery contracts)''.
       (d) Section 2(h)(3) of such Act (7 U.S.C. 2(h)(3)) is 
     amended by striking ``paragraph (4)'' and inserting 
     ``paragraphs (4) and (7)''.
       (e) Section 2(h)(4) of such Act (7 U.S.C. 2(h)(4)) is 
     amended--
       (1) in subparagraph (B), by inserting ``and, for a 
     significant price discovery contract, requiring large trader 
     reporting,'' after ``proscribing fraud'';
       (2) by striking ``and'' at the end of subparagraph (C); and
       (3) by striking subparagraph (D) and inserting the 
     following:
       ``(D) such rules, regulations, and orders as the Commission 
     may issue to ensure timely compliance with any of the 
     provisions of this Act applicable to a significant price 
     discovery contract traded on or executed on any electronic 
     trading facility; and
       ``(E) such other provisions of this Act as are applicable 
     by their terms to significant price discovery contracts or to 
     registered entities or electronic trading facilities with 
     respect to significant price discovery contracts.''.
       (f) Section 2(h)(5)(B)(iii)(I) of such Act (7 U.S.C. 
     2(h)(5)(B)(iii)(I)) is amended by inserting ``or to make the 
     determination described in subparagraph (B) of paragraph 
     (7)'' after ``paragraph (4)''.
       (g) Section 4a of such Act (7 U.S.C. 6a) is amended--
       (1) in subsection (a)--
       (A) in the first sentence, by inserting ``, or on 
     electronic trading facilities with respect to a significant 
     price discovery  contract'' after ``derivatives transaction 
     execution facilities''; and
       (B) in the second sentence, by inserting ``, or on an 
     electronic trading facility with respect to a significant 
     price discovery contract,'' after ``derivatives transaction 
     execution facility''; and
       (2) in subsection (b)--
       (A) in paragraph (1), by inserting ``or electronic trading 
     facility with respect to a significant price discovery 
     contract'' after ``facility or facilities''; and
       (B) in paragraph (2), by inserting ``or electronic trading 
     facility with respect to a significant price discovery 
     contract'' after ``derivatives transaction execution 
     facility''; and
       (3) in subsection (e)--
       (A) in the first sentence--
       (i) by inserting ``or by any electronic trading facility'' 
     after ``registered by the Commission'';
       (ii) by inserting ``or on an electronic trading facility'' 
     after ``derivatives transaction execution facility'' the 
     second place it appears; and
       (iii) by inserting ``or electronic trading facility'' 
     before ``or such board of trade'' each place it appears; and
       (B) in the second sentence, by inserting ``or electronic 
     trading facility with respect to a significant price 
     discovery contract'' after ``registered by the Commission''.
       (h) Section 5a(d) of such Act (7 U.S.C. 7a(d)(1)) is 
     amended--
       (1) by redesignating paragraphs (4) through (9) as 
     paragraphs (5) through (10); and
       (2) by inserting after paragraph (3) the following:
       ``(4) Position limitations or accountability.--To reduce 
     the potential threat of market manipulation or congestion, 
     especially during trading in the delivery month, the 
     derivatives transaction execution facility shall adopt 
     position limits or position accountability for speculators, 
     where necessary and appropriate for a contract, agreement or 
     transaction with an underlying commodity that has a 
     physically deliverable supply.''.
       (i) Section 5c(a) of such Act (7 U.S.C. 7a-2(a)) is amended 
     in paragraph (1) by inserting ``, and section 2(h)(7) with 
     respect to significant price discovery contracts,'' after ``, 
     and 5b(d)(2)''.
       (j) Section 5c(b) of such Act (7 U.S.C. 7a-2(b)) is 
     amended--
       (1) by striking paragraph (1) and inserting the following:
       ``(1) In general.--A contract market, derivatives 
     transaction execution facility, or electronic trading 
     facility with respect to a significant price discovery 
     contract may comply with any applicable core principle 
     through delegation of any relevant function to a registered 
     futures association or a registered entity that is not an 
     electronic trading facility.'';
       (2) in paragraph (2), by striking ``contract market or 
     derivatives transaction execution facility'' and inserting 
     ``contract market, derivatives transaction execution 
     facility, or electronic trading facility''; and
       (3) in paragraph (3), by striking ``contract market or 
     derivatives transaction execution facility'' each place it 
     appears and inserting ``contract market, derivatives 
     transaction execution facility, or electronic trading 
     facility''.
       (k) Section 5c(d)(1) of such Act (7 U.S.C. 7a-2(d)(1)) is 
     amended by inserting ``or 2(h)(7)(C) with respect to a 
     significant price discovery contract traded or executed on an 
     electronic trading facility,'' after ``5b(d)(2)''.
       (l) Section 5e of such Act (7 U.S.C. 7b) is amended by 
     inserting ``, or revocation of the right of an electronic 
     trading facility to rely on the exemption set forth in 
     section 2(h)(3) with respect to a significant price discovery 
     contract,'' after ``revocation of designation as a registered 
     entity''.
       (m) Section 6(b) of the Commodity Exchange Act (7 U.S.C. 
     8(b)) is amended by striking the first sentence and all that 
     follows through ``hearing on the record: Provided,'' and 
     inserting the following:
       ``The Commission is authorized to suspend for a period not 
     to exceed 6 months or to revoke the designation or 
     registration of any contract market or derivatives 
     transaction execution facility, or to revoke the right of an 
     electronic trading facility to rely on the exemption set 
     forth in section 2(h)(3) with respect to a significant price 
     discovery contract, on a showing that the contract market or 
     derivatives transaction execution facility is not enforcing 
     or has not enforced its rules of government, made a condition 
     of its designation or registration as set forth in sections 5 
     through 5b or section 5f, or that the contract market or 
     derivatives transaction execution facility or electronic 
     trading facility, or any director, officer, agent, or 
     employee thereof, otherwise is violating or has violated any 
     of the provisions of this Act or any of the rules, 
     regulations, or orders of the Commission thereunder. Such 
     suspension or revocation shall only be made after a notice to 
     the officers of the contract market or derivatives 
     transaction execution facility or electronic trading facility 
     affected and upon a hearing on the record: Provided,''.
       (n) Section 22(b)(1) of such Act (7 U.S.C. 25(b)(1)) is 
     amended by inserting ``section 2(h)(7) or'' before ``sections 
     5''.

     SEC. 13204. EFFECTIVE DATE.

       (a) In General.--Except as provided in this section, this 
     subtitle shall become effective on the date of enactment of 
     this Act.
       (b) Significant Price Discovery Standards Rulemaking.--
       (1) The Commodity Futures Trading Commission shall--
       (A) not later than 180 days after the date of the enactment 
     of this Act, issue a proposed rule regarding the 
     implementation of section 2(h)(7) of the Commodity Exchange 
     Act; and
       (B) not later than 270 days after the date of enactment of 
     this Act, issue a final rule regarding the implementation.
       (2) In its rulemaking pursuant to paragraph (1) of this 
     subsection, the Commission shall include the standards, 
     terms, and conditions under which an electronic trading 
     facility will have the responsibility to notify the 
     Commission that an agreement, contract, or transaction 
     conducted in reliance on the exemption provided in section 
     2(h)(3) of the Commodity Exchange Act may perform a price 
     discovery function.
       (c) Significant Price Discovery Determinations.--With 
     respect to any electronic trading facility operating on the 
     effective date of the final rule issued pursuant to 
     subsection (b)(1), the Commission shall complete a review of 
     the agreements, contracts, and transactions of the facility 
     not later than 180 days after that effective date to 
     determine whether any such agreement, contract, or 
     transaction performs a significant price discovery function.

                        TITLE XIV--MISCELLANEOUS

   Subtitle A--Socially Disadvantaged Producers and Limited Resource 
                               Producers

     SEC. 14001. IMPROVED PROGRAM DELIVERY BY DEPARTMENT OF 
                   AGRICULTURE ON INDIAN RESERVATIONS.

       Section 2501(g)(1) of the Food, Agriculture, Conservation, 
     and Trade Act of 1990 (7 U.S.C. 2279(g)(1)) is amended--
       (1) in the first sentence--
       (A) by striking ``Agricultural Stabilization and 
     Conservation Service, Soil Conservation Service, and Farmers 
     Home Administration offices'' and inserting ``Farm Service 
     Agency and Natural Resources Conservation Service''; and
       (B) by inserting ``where there has been a need 
     demonstrated'' after ``include''; and
       (2) by striking the second sentence.

     SEC. 14002. FORECLOSURE.

       (a) In General.--Section 331A of the Consolidated Farm and 
     Rural Development Act (7 U.S.C. 1981a) is amended:
       (1) by inserting ``(a)'' after ``Sec. 331A.''; and
       (2) by adding at the end the following:
       ``(b) Moratorium.--
       ``(1) In general.--Subject to the other provisions of this 
     subsection, effective beginning on the date of the enactment 
     of this subsection, there shall be in effect a moratorium, 
     with respect to farmer program loans made under subtitle A, 
     B, or C, on all acceleration and foreclosure proceedings 
     instituted by the Department of Agriculture against any 
     farmer or rancher who--
       ``(A) has pending against the Department a claim of program 
     discrimination that is accepted by the Department as valid; 
     or
       ``(B) files a claim of program discrimination that is 
     accepted by the Department as valid.
       ``(2) Waiver of interest and offsets.--During the period of 
     the moratorium, the Secretary shall waive the accrual of 
     interest and offsets on all farmer program loans made under 
     subtitle A, B, or C for which loan acceleration or 
     foreclosure proceedings have been suspended under paragraph 
     (1).
       ``(3) Termination of moratorium.--The moratorium shall 
     terminate with respect to a claim of discrimination by a 
     farmer or rancher on the earlier of--
       ``(A) the date the Secretary resolves the claim; or
       ``(B) if the farmer or rancher appeals the decision of the 
     Secretary on the claim to a court of competent jurisdiction, 
     the date that the court renders a final decision on the 
     claim.
       ``(4) Failure to prevail.--If a farmer or rancher does not 
     prevail on a claim of discrimination described in paragraph 
     (1), the farmer or

[[Page H3551]]

     rancher shall be liable for any interest and offsets that 
     accrued during the period that loan acceleration or 
     foreclosure proceedings have been suspended under paragraph 
     (1).''.
       (b) Foreclosure Report.--
       (1) In general.--Not later than 1 year after the date of 
     the enactment of this Act, the Inspector General of the 
     Department of Agriculture (referred to in this subsection as 
     the ``Inspector General'') shall determine whether decisions 
     of the Department to implement foreclosure proceedings with 
     respect to farmer program loans made under subtitle A, B, or 
     C of the Consolidated Farm and Rural Development Act (7 
     U.S.C. 1922 et seq.) to socially disadvantaged farmers or 
     ranchers during the 5-year period preceding the date of the 
     enactment of this Act were consistent and in conformity with 
     the applicable laws (including regulations) governing loan 
     foreclosures.
       (2) Report.--Not later than 1 year after the date of the 
     enactment of this Act, the Inspector General shall submit to 
     the Committee on Agriculture of the House of Representatives 
     and the Committee on Agriculture, Nutrition, and Forestry of 
     the Senate a report that describes the determination of the 
     Inspector General under paragraph (1).

     SEC. 14003. RECEIPT FOR SERVICE OR DENIAL OF SERVICE FROM 
                   CERTAIN DEPARTMENT OF AGRICULTURE AGENCIES.

       Section 2501A of the Food, Agriculture, Conservation, and 
     Trade Act of 1990 (7 U.S.C. 2279-1) is amended by adding at 
     the end the following new subsection:
       ``(e) Receipt for Service or Denial of Service.--In any 
     case in which a current or prospective producer or landowner, 
     in person or in writing, requests from the Farm Service 
     Agency, the Natural Resources Conservation Service, or an 
     agency of the Rural Development Mission Area any benefit or 
     service offered by the Department to agricultural producers 
     or landowners and, at the time of the request, also requests 
     a receipt, the Secretary shall issue, on the date of the 
     request, a receipt to the producer or landowner that 
     contains--
       ``(1) the date, place, and subject of the request; and
       ``(2) the action taken, not taken, or recommended to the 
     producer or landowner.''.

     SEC. 14004. OUTREACH AND TECHNICAL ASSISTANCE FOR SOCIALLY 
                   DISADVANTAGED FARMERS OR RANCHERS.

       (a) Outreach and Technical Assistance Program.--
       (1) Program requirements.--Paragraph (2) of section 2501(a) 
     of the Food, Agriculture, Conservation, and Trade Act of 1990 
     (7 U.S.C. 2279(a)) is amended to read as follows:
       ``(2) Requirements.--The outreach and technical assistance 
     program under paragraph (1) shall be used exclusively--
       ``(A) to enhance coordination of the outreach, technical 
     assistance, and education efforts authorized under 
     agriculture programs; and
       ``(B) to assist the Secretary in--
       ``(i) reaching current and prospective socially 
     disadvantaged farmers or ranchers in a linguistically 
     appropriate manner; and
       ``(ii) improving the participation of those farmers and 
     ranchers in Department programs, as reported under section 
     2501A.''.
       (2) Grants and contracts under program.--Section 2501(a)(3) 
     of the Food, Agriculture, Conservation, and Trade Act of 1990 
     (7 U.S.C. 2279(a)(3)) is amended--
       (A) in subparagraph (A), by striking ``entity to provide 
     information'' and inserting ``entity that has demonstrated an 
     ability to carry out the requirements described in paragraph 
     (2) to provide outreach''; and
       (B) by adding at the end the following new subparagraph:
       ``(D) Report.--The Secretary shall submit to the Committee 
     on Agriculture of the House of Representatives and the 
     Committee on Agriculture, Nutrition, and Forestry of the 
     Senate, and make publicly available, an annual report that 
     includes a list of the following:
       ``(i) The recipients of funds made available under the 
     program.
       ``(ii) The activities undertaken and services provided.
       ``(iii) The number of current and prospective socially 
     disadvantaged farmers or ranchers served and outcomes of such 
     service.
       ``(iv) The problems and barriers identified by entities in 
     trying to increase participation by current and prospective 
     socially disadvantaged farmers or ranchers.''.
       (3) Funding and limitation on use of funds.--Section 
     2501(a)(4) of the Food, Agriculture, Conservation, and Trade 
     Act of 1990 (7 U.S.C. 2279(a)(4)) is amended--
       (A) by striking subparagraph (A) and inserting the 
     following new subparagraph:
       ``(A) In general.--Of the funds of the Commodity Credit 
     Corporation, the Secretary shall make available to carry out 
     this section--
       ``(i) $15,000,000 for fiscal year 2009; and
       ``(ii) $20,000,000 for each of fiscal years 2010 through 
     2012.''.
       (B) by adding at the end the following new subparagraph:
       ``(C) Limitation on use of funds for administrative 
     expenses.--Not more than 5 percent of the amounts made 
     available under subparagraph (A) for a fiscal year may be 
     used for expenses related to administering the program under 
     this section.''.
       (b) Eligible Entity Defined.--Section 2501(e)(5)(A)(ii) of 
     the Food, Agriculture, Conservation, and Trade Act of 1990 (7 
     U.S.C. 2279(e)(5)(A)(ii)) is amended by striking ``work with 
     socially disadvantaged farmers or ranchers during the 2-year 
     period'' and inserting ``work with, and on behalf of, 
     socially disadvantaged farmers or ranchers during the 3-year 
     period''.

     SEC. 14005. ACCURATE DOCUMENTATION IN THE CENSUS OF 
                   AGRICULTURE AND CERTAIN STUDIES.

       Section 2501 of the Food, Agriculture, Conservation, and 
     Trade Act of 1990 (7 U.S.C. 2279) is amended by adding at the 
     end the following:
       ``(h) Accurate Documentation.--The Secretary shall ensure, 
     to the maximum extent practicable, that the Census of 
     Agriculture and studies carried out by the Economic Research 
     Service accurately document the number, location, and 
     economic contributions of socially disadvantaged farmers or 
     ranchers in agricultural production.''.

     SEC. 14006. TRANSPARENCY AND ACCOUNTABILITY FOR SOCIALLY 
                   DISADVANTAGED FARMERS OR RANCHERS.

       Section 2501A of the Food, Agriculture, Conservation, and 
     Trade Act of 1990 (7 U.S.C. 2279-1) is amended by striking 
     subsection (c) and inserting the following new subsections:
       ``(c) Compilation of Program Participation Data.--
       ``(1) Annual requirement.--For each county and State in the 
     United States, the Secretary of Agriculture (referred to in 
     this section as the `Secretary') shall annually compile 
     program application and participation rate data regarding 
     socially disadvantaged farmers or ranchers by computing for 
     each program of the Department of Agriculture that serves 
     agricultural producers and landowners--
       ``(A) raw numbers of applicants and participants by race, 
     ethnicity, and gender, subject to appropriate privacy 
     protections, as determined by the Secretary; and
       ``(B) the application and participation rate, by race, 
     ethnicity, and gender, as a percentage of the total 
     participation rate of all agricultural producers and 
     landowners.
       ``(2) Authority to collect data.--The heads of the agencies 
     of the Department of Agriculture shall collect and transmit 
     to the Secretary any data, including data on race, gender, 
     and ethnicity, that the Secretary determines to be necessary 
     to carry out paragraph (1).
       ``(3) Report.--Using the technologies and systems of the 
     National Agricultural Statistics Service, the Secretary shall 
     compile and present the data compiled under paragraph (1) for 
     each program described in that paragraph in a manner that 
     includes the raw numbers and participation rates for--
       ``(A) the entire United States;
       ``(B) each State; and
       ``(C) each county in each State.
       ``(4) Public availability of report.--The Secretary shall 
     maintain and make readily available to the public, via 
     website and otherwise in electronic and paper form, the 
     report described in paragraph (3).
       ``(d) Limitations on Use of Data.--
       ``(1) Privacy protections.--In carrying out this section, 
     the Secretary shall not disclose the names or individual data 
     of any program participant.
       ``(2) Authorized uses.--The data under this section shall 
     be used exclusively for the purposes described in subsection 
     (a).
       ``(3) Limitation.--Except as otherwise provided, the data 
     under this section shall not be used for the evaluation of 
     individual applications for assistance.''.

     SEC. 14007. OVERSIGHT AND COMPLIANCE.

       The Secretary, acting through the Assistant Secretary for 
     Civil Rights of the Department of Agriculture, shall use the 
     reports described in subsection (c) of section 2501A of the 
     Food, Agriculture, Conservation, and Trade Act of 1990 (7 
     U.S.C. 2279-1), as amended by section 14006, in the conduct 
     of oversight and evaluation of civil rights compliance.

     SEC. 14008. MINORITY FARMER ADVISORY COMMITTEE.

       (a) Establishment.--Not later than 18 months after the date 
     of the enactment of this Act, the Secretary of Agriculture 
     shall establish an advisory committee, to be known as the 
     ``Advisory Committee on Minority Farmers'' (in this section 
     referred to as the ``Committee'').
       (b) Duties.--The Committee shall provide advice to the 
     Secretary on--
       (1) the implementation of section 2501 of the Food, 
     Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 
     2279);
       (2) methods of maximizing the participation of minority 
     farmers and ranchers in Department of Agriculture programs; 
     and
       (3) civil rights activities within the Department as such 
     activities relate to participants in such programs.
       (c) Membership.--
       (1) In general.--The Committee shall be composed of not 
     more than 15 members, who shall be appointed by the 
     Secretary, and shall include--
       (A) not less than four socially disadvantaged farmers or 
     ranchers (as defined in section 2501(e)(2) of the Food, 
     Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 
     2279(e)(2)));
       (B) not less than two representatives of nonprofit 
     organizations with a history of working with minority farmers 
     and ranchers;
       (C) not less than two civil rights professionals;
       (D) not less than two representatives of institutions of 
     higher education with demonstrated experience working with 
     minority farmers and ranchers; and
       (E) such other persons as the Secretary considers 
     appropriate.
       (2) Ex-officio members.--The Secretary may appoint such 
     employees of the Department of Agriculture as the Secretary 
     considers appropriate to serve as ex-officio members of the 
     Committee.

     SEC. 14009. NATIONAL APPEALS DIVISION.

       Section 280 of the Department of Agriculture Reorganization 
     Act of 1994 (7 U.S.C. 7000) is amended--
       (1) by striking ``On the return'' and inserting the 
     following:
       ``(a) In General.--On the return''; and
       (2) by adding at the end the following:
       ``(b) Reports.--
       ``(1) In general.--Not later than 180 days after the date 
     of the enactment of this subsection, and every 180 days 
     thereafter, the head

[[Page H3552]]

     of each agency shall submit to the Committee on Agriculture 
     of the House of Representatives and the Committee on 
     Agriculture, Nutrition, and Forestry of the Senate, and 
     publish on the website of the Department, a report that 
     includes--
       ``(A) a description of all cases returned to the agency 
     during the period covered by the report pursuant to a final 
     determination of the Division;
       ``(B) the status of implementation of each final 
     determination; and
       ``(C) if the final determination has not been implemented--
       ``(i) the reason that the final determination has not been 
     implemented; and
       ``(ii) the projected date of implementation of the final 
     determination.
       ``(2) Updates.--Each month, the head of each agency shall 
     publish on the website of the Department any updates to the 
     reports submitted under paragraph (1).''.

     SEC. 14010. REPORT OF CIVIL RIGHTS COMPLAINTS, RESOLUTIONS, 
                   AND ACTIONS.

       Each year, the Secretary shall--
       (1) prepare a report that describes, for each agency of the 
     Department of Agriculture--
       (A) the number of civil rights complaints filed that relate 
     to the agency, including whether a complaint is a program 
     complaint or an employment complaint;
       (B) the length of time the agency took to process each 
     civil rights complaint;
       (C) the number of proceedings brought against the agency, 
     including the number of complaints described in paragraph (1) 
     that were resolved with a finding of discrimination; and
       (D) the number and type of personnel actions taken by the 
     agency following resolution of civil rights complaints;
       (2) submit to the Committee on Agriculture of the House of 
     Representatives and the Committee on Agriculture, Nutrition, 
     and Forestry of the Senate a copy of the report; and
       (3) make the report available to the public by posting the 
     report on the website of the Department.

     SEC. 14011. SENSE OF CONGRESS RELATING TO CLAIMS BROUGHT BY 
                   SOCIALLY DISADVANTAGED FARMERS OR RANCHERS.

       It is the sense of Congress that all pending claims and 
     class actions brought against the Department of Agriculture 
     by socially disadvantaged farmers or ranchers (as defined in 
     section 355(e) of the Consolidated Farm and Rural Development 
     Act (7 U.S.C. 2003(e)), including Native American, Hispanic, 
     and female farmers or ranchers, based on racial, ethnic, or 
     gender discrimination in farm program participation should be 
     resolved in an expeditious and just manner.

     SEC. 14012. DETERMINATION ON MERITS OF PIGFORD CLAIMS.

       (a) Definitions.--In this section:
       (1) Consent decree.--The term ``consent decree'' means the 
     consent decree in the case of Pigford v. Glickman, approved 
     by the United States District Court for the District of 
     Columbia on April 14, 1999.
       (2) Department.--The term ``Department'' means the 
     Department of Agriculture.
       (3) Pigford claim.--The term ``Pigford claim'' means a 
     discrimination complaint, as defined by section 1(h) of the 
     consent decree and documented under section 5(b) of the 
     consent decree.
       (4) Pigford claimant.--The term ``Pigford claimant'' means 
     an individual who previously submitted a late-filing request 
     under section 5(g) of the consent decree.
       (b) Determination on Merits.--Any Pigford claimant who has 
     not previously obtained a determination on the merits of a 
     Pigford claim may, in a civil action brought in the United 
     States District Court for the District of Columbia, obtain 
     that determination.
       (c) Limitation.--
       (1) In general.--Subject to paragraph (2), all payments or 
     debt relief (including any limitation on foreclosure under 
     subsection (h)) shall be made exclusively from funds made 
     available under subsection (i).
       (2) Maximum amount.--The total amount of payments and debt 
     relief pursuant to actions commenced under subsection (b) 
     shall not exceed $100,000,000.
       (d) Intent of Congress as to Remedial Nature of Section.--
     It is the intent of Congress that this section be liberally 
     construed so as to effectuate its remedial purpose of giving 
     a full determination on the merits for each Pigford claim 
     previously denied that determination.
       (e) Loan Data.--
       (1) Report to person submitting petition.--
       (A) In general.--Not later than 120 days after the 
     Secretary receives notice of a complaint filed by a claimant 
     under subsection (b), the Secretary shall provide to the 
     claimant a report on farm credit loans and noncredit 
     benefits, as appropriate, made within the claimant's county 
     (or if no documents are found, within an adjacent county as 
     determined by the claimant), by the Department during the 
     period beginning on January 1 of the year preceding the 
     period covered by the complaint and ending on December 31 of 
     the year following the period.
       (B) Requirements.--A report under subparagraph (A) shall 
     contain information on all persons whose application for a 
     loan or benefit was accepted, including--
       (i) the race of the applicant;
       (ii) the date of application;
       (iii) the date of the loan or benefit decision, as 
     appropriate;
       (iv) the location of the office making the loan or benefit 
     decision, as appropriate;
       (v) all data relevant to the decisionmaking process for the 
     loan or benefit, as appropriate; and
       (vi) all data relevant to the servicing of the loan or 
     benefit, as appropriate.
       (2) No personally identifiable information.--The reports 
     provided pursuant to paragraph (1) shall not contain any 
     information that would identify any person who applied for a 
     loan from the Department.
       (3) Reporting deadline.--
       (A) In general.--The Secretary shall--
       (i) provide to claimants the reports required under 
     paragraph (1) as quickly as practicable after the Secretary 
     receives notice of a complaint filed by a claimant under 
     subsection (b); and
       (ii) devote such resources of the Department as are 
     necessary to make providing the reports expeditiously a high 
     priority of the Department.
       (B) Extension.--A court may extend the deadline for 
     providing the report required in a particular case under 
     paragraph (1) if the Secretary establishes that meeting the 
     deadline is not feasible and demonstrates a continuing effort 
     and commitment to provide the required report expeditiously.
       (f) Expedited Resolutions Authorized.--
       (1) In general.--Any person filing a complaint under this 
     section for discrimination in the application for, or making 
     or servicing of, a farm loan, at the discretion of the 
     person, may seek liquidated damages of $50,000, discharge of 
     the debt that was incurred under, or affected by, the 1 or 
     more programs that were the subject of the 1 or more 
     discrimination claims that are the subject of the person's 
     complaint, and a tax payment in the amount equal to 25 
     percent of the liquidated damages and loan principal 
     discharged, in which case--
       (A) if only such damages, debt discharge, and tax payment 
     are sought, the complainant shall be able to prove the case 
     of the complainant by substantial evidence (as defined in 
     section 1(l) of the consent decree); and
       (B) the court shall decide the case based on a review of 
     documents submitted by the complainant and defendant relevant 
     to the issues of liability and damages.
       (2) Noncredit claims.--
       (A) Standard.--In any case in which a claimant asserts a 
     noncredit claim under a benefit program of the Department, 
     the court shall determine the merits of the claim in 
     accordance with section 9(b)(i) of the consent decree.
       (B) Relief.--A claimant who prevails on a claim of 
     discrimination involving a noncredit benefit program of the 
     Department shall be entitled to a payment by the Department 
     in a total amount of $3,000, without regard to the number of 
     such claims on which the claimant prevails.
       (g) Actual Damages.--A claimant who files a claim under 
     this section for discrimination under subsection (b) but not 
     under subsection (f) and who prevails on the claim shall be 
     entitled to actual damages sustained by the claimant.
       (h) Limitation on Foreclosures.--Notwithstanding any other 
     provision of law, during the pendency of a Pigford claim, the 
     Secretary may not begin acceleration on or foreclosure of a 
     loan if--
       (1) the borrower is a Pigford claimant; and
       (2) makes a prima facie case in an appropriate 
     administrative proceeding that the acceleration or 
     foreclosure is related to a Pigford claim.
       (i) Funding.--
       (1) In general.--Of the funds of the Commodity Credit 
     Corporation, the Secretary shall make available for payments 
     and debt relief in satisfaction of claims against the United 
     States under subsection (b) and for any actions under 
     subsection (g) $100,000,000 for fiscal year 2008, to remain 
     available until expended.
       (2) Authorization of appropriations.--In addition to funds 
     made available under paragraph (1), there are authorized to 
     be appropriated such sums as are necessary to carry out this 
     section.
       (j) Reporting Requirements.--
       (1) In general.--Not later than 180 days after the date of 
     the enactment of this Act and every 180 days thereafter until 
     the funds made available under subsection (i) are depleted, 
     the Secretary shall submit to the Committee on the Judiciary 
     of the House of Representatives and the Committee on the 
     Judiciary of the Senate a report that describes the status of 
     available funds under subsection (i) and the number of 
     pending claims under subsection (f).
       (2) Depletion of funds report.--In addition to the reports 
     required under paragraph (1), the Secretary shall submit to 
     the Committee on the Judiciary of the House of 
     Representatives and the Committee on the Judiciary of the 
     Senate a report that notifies the Committees when 75 percent 
     of the funds made available under subsection (i)(1) have been 
     depleted.
       (k) Termination of Authority.--The authority to file a 
     claim under this section terminates 2 years after the date of 
     the enactment of this Act.

     SEC. 14013. OFFICE OF ADVOCACY AND OUTREACH.

       (a) In General.--The Department of Agriculture 
     Reorganization Act of 1994 is amended by inserting after 
     section 226A (7 U.S.C. 6933) the following:

     ``SEC. 226B. OFFICE OF ADVOCACY AND OUTREACH.

       ``(a) Definitions.--In this section:
       ``(1) Beginning farmer or rancher.--The term `beginning 
     farmer or rancher' has the meaning given the term in section 
     343(a) of the Consolidated Farm and Rural Development Act (7 
     U.S.C. 1991(a)).
       ``(2) Office.--The term `Office' means the Office of 
     Advocacy and Outreach established under this section.
       ``(3) Socially disadvantaged farmer or rancher.--The term 
     `socially disadvantaged farmer or rancher' has the meaning 
     given the term in section 2501(e) of the Food, Agriculture, 
     Conservation, and Trade Act of 1990 (7 U.S.C. 2279(e)).
       ``(b) Establishment and Purpose.--

[[Page H3553]]

       ``(1) In general.--The Secretary shall establish within the 
     executive operations of the Department an office to be known 
     as the `Office of Advocacy and Outreach'--
       ``(A) to improve access to programs of the Department; and
       ``(B) to improve the viability and profitability of--
       ``(i) small farms and ranches;
       ``(ii) beginning farmers or ranchers; and
       ``(iii) socially disadvantaged farmers or ranchers.
       ``(2) Director.--The Office shall be headed by a Director, 
     to be appointed by the Secretary from among the competitive 
     service.
       ``(c) Duties.--The duties of the Office shall be to ensure 
     small farms and ranches, beginning farmers or ranchers, and 
     socially disadvantaged farmers or ranchers access to, and 
     equitable participation in, programs and services of the 
     Department by--
       ``(1) establishing and monitoring the goals and objectives 
     of the Department to increase participation in programs of 
     the Department by small, beginning, or socially disadvantaged 
     farmers or ranchers;
       ``(2) assessing the effectiveness of Department outreach 
     programs;
       ``(3) developing and implementing a plan to coordinate 
     outreach activities and services provided by the Department;
       ``(4) providing input to the agencies and offices on 
     programmatic and policy decisions;
       ``(5) measuring outcomes of the programs and activities of 
     the Department on small farms and ranches, beginning farmers 
     or ranchers, and socially disadvantaged farmers or ranchers 
     programs;
       ``(6) recommending new initiatives and programs to the 
     Secretary; and
       ``(7) carrying out any other related duties that the 
     Secretary determines to be appropriate.
       ``(d) Socially Disadvantaged Farmers Group.--
       ``(1) Establishment.--The Secretary shall establish within 
     the Office the Socially Disadvantaged Farmers Group.
       ``(2) Outreach and assistance.--The Socially Disadvantaged 
     Farmers Group--
       ``(A) shall carry out section 2501 of the Food, 
     Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 
     2279); and
       ``(B) in the case of activities described in section 
     2501(a) of that Act, may conduct such activities through 
     other agencies and offices of the Department.
       ``(3) Socially disadvantaged farmers and farmworkers.--The 
     Socially Disadvantaged Farmers Group shall oversee the 
     operations of--
       ``(A) the Advisory Committee on Minority Farmers 
     established under section 14009 of the Food, Conservation, 
     and Energy Act of 2008; and
       ``(B) the position of Farmworker Coordinator established 
     under subsection (f).
       ``(4) Other duties.--
       ``(A) In general.--The Socially Disadvantaged Farmers Group 
     may carry out other duties to improve access to, and 
     participation in, programs of the Department by socially 
     disadvantaged farmers or ranchers, as determined by the 
     Secretary.
       ``(B) Office of outreach and diversity.--The Office of 
     Advocacy and Outreach shall carry out the functions and 
     duties of the Office of Outreach and Diversity carried out by 
     the Assistant Secretary for Civil Rights as such functions 
     and duties existed immediately before the date of the 
     enactment of this section.
       ``(e) Small Farms and Beginning Farmers and Ranchers 
     Group.--
       ``(1) Establishment.--The Secretary shall establish within 
     the Office the Small Farms and Beginning Farmers and Ranchers 
     Group.
       ``(2) Duties.--
       ``(A) Oversee offices.--The Small Farms and Beginning 
     Farmers and Ranchers Group shall oversee the operations of 
     the Office of Small Farms Coordination established by 
     Departmental Regulation 9700-1 (August 3, 2006).
       ``(B) Beginning farmer and rancher development program.--
     The Small Farms and Beginning Farmers and Ranchers Group 
     shall consult with the National Institute for Food and 
     Agriculture on the administration of the beginning farmer and 
     rancher development program established under section 7405 of 
     the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 
     3319f).
       ``(C) Advisory committee for beginning farmers and 
     ranchers.--The Small Farms and Beginning Farmers and Ranchers 
     Group shall coordinate the activities of the Group with the 
     Advisory Committee for Beginning Farmers and Ranchers 
     established under section 5(b) of the Agricultural Credit 
     Improvement Act of 1992 (7 U.S.C. 1621 note; Public Law 102-
     554).
       ``(D) Other duties.--The Small Farms and Beginning Farmers 
     and Ranchers Group may carry out other duties to improve 
     access to, and participation in, programs of the Department 
     by small farms and ranches and beginning farmers or ranchers, 
     as determined by the Secretary.
       ``(f) Farmworker Coordinator.--
       ``(1) Establishment.--The Secretary shall establish within 
     the Office the position of Farmworker Coordinator (referred 
     to in this subsection as the `Coordinator').
       ``(2) Duties.--The Secretary shall delegate to the 
     Coordinator responsibility for the following:
       ``(A) Assisting in administering the program established by 
     section 2281 of the Food, Agriculture, Conservation, and 
     Trade Act of 1990 (42 U.S.C. 5177a).
       ``(B) Serving as a liaison to community-based nonprofit 
     organizations that represent and have demonstrated experience 
     serving low-income migrant and seasonal farmworkers.
       ``(C) Coordinating with the Department, other Federal 
     agencies, and State and local governments to ensure that 
     farmworker needs are assessed and met during declared 
     disasters and other emergencies.
       ``(D) Consulting within the Office and with other entities 
     to better integrate farmworker perspectives, concerns, and 
     interests into the ongoing programs of the Department.
       ``(E) Consulting with appropriate institutions on research, 
     program improvements, or agricultural education opportunities 
     that assist low-income and migrant seasonal farmworkers.
       ``(F) Assisting farmworkers in becoming agricultural 
     producers or landowners.
       ``(3) Authorization of appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     carry out this subsection for each of fiscal years 2009 
     through 2012.''.
       (b) Conforming Amendment.--Section 296(b) of the Department 
     of Agriculture Reorganization Act of 1994 (7 U.S.C. 7014(b)), 
     as amended by section 7511(b), is further amended--
       (1) in paragraph (5), by striking ``; or'' and inserting 
     ``;'';
       (2) in paragraph (6), by striking the period and inserting 
     ``; or''; and
       (3) by adding at the end the following new paragraph:
       ``(7) the authority of the Secretary to establish in the 
     Department the Office of Advocacy and Outreach in accordance 
     with section 226B.''.

                   Subtitle B--Agricultural Security

     SEC. 14101. SHORT TITLE.

       This subtitle may be cited as the ``Agricultural Security 
     Improvement Act of 2008''.

     SEC. 14102. DEFINITIONS.

       In this subtitle:
       (1) Agent.--The term ``agent'' means a nuclear, biological, 
     chemical, or radiological substance that causes agricultural 
     disease or the adulteration of products regulated by the 
     Secretary of Agriculture under any provision of law.
       (2) Agricultural biosecurity.--The term ``agricultural 
     biosecurity'' means protection from an agent that poses a 
     threat to--
       (A) plant or animal health;
       (B) public health as it relates to the adulteration of 
     products regulated by the Secretary of Agriculture under any 
     provision of law that is caused by exposure to an agent; or
       (C) the environment as it relates to agriculture 
     facilities, farmland, and air and water within the immediate 
     vicinity of an area associated with an agricultural disease 
     or outbreak.
       (3) Agricultural countermeasure.--The term ``agricultural 
     countermeasure''--
       (A) means a product, practice, or technology that is 
     intended to enhance or maintain the agricultural biosecurity 
     of the United States; and
       (B) does not include a product, practice, or technology 
     used solely in response to a human medical incident or public 
     health emergency not related to agriculture.
       (4) Agricultural disease.--The term ``agricultural 
     disease'' has the meaning given the term by the Secretary.
       (5) Agricultural disease emergency.--The term 
     ``agricultural disease emergency'' means an incident of 
     agricultural disease that requires prompt action to prevent 
     significant damage to people, plants, or animals.
       (6) Agroterrorist act.--The term ``agroterrorist act'' 
     means an act that--
       (A) causes or attempts to cause--
       (i) damage to agriculture; or
       (ii) injury to a person associated with agriculture; and
       (B) is committed or appears to be committed with the intent 
     to--
       (i) intimidate or coerce a civilian population; or
       (ii) disrupt the agricultural industry in order to 
     influence the policy of a government by intimidation or 
     coercion.
       (7) Animal.--The term ``animal'' has the meaning given the 
     term in section 10403 of the Animal Health Protection Act of 
     2002 (7 U.S.C. 8302).
       (8) Department.--The term ``Department'' means the 
     Department of Agriculture.
       (9) Development.--The term ``development'' means--
       (A) research leading to the identification of products or 
     technologies intended for use as agricultural countermeasures 
     to protect animal health;
       (B) the formulation, production, and subsequent 
     modification of those products or technologies;
       (C) the conduct of in vitro and in vivo studies;
       (D) the conduct of field, efficacy, and safety studies;
       (E) the preparation of an application for marketing 
     approval for submission to an applicable agency; or
       (F) other actions taken by an applicable agency in a case 
     in which an agricultural countermeasure is procured or used 
     prior to issuance of a license or other form of Federal 
     Government approval.
       (10) Plant.--The term ``plant'' has the meaning given the 
     term in section 411 of the Plant Protection Act of 2000 (7 
     U.S.C. 7702).
       (11) Qualified agricultural countermeasure.--The term 
     ``qualified agricultural countermeasure'' means an 
     agricultural countermeasure that the Secretary, in 
     consultation with the Secretary of Homeland Security, 
     determines to be a priority in order to address an 
     agricultural biosecurity threat.

                    CHAPTER 1--AGRICULTURAL SECURITY

     SEC. 14111. OFFICE OF HOMELAND SECURITY.

       (a) Establishment.--There is established within the 
     Department the Office of Homeland Security (in this section 
     referred to as the ``Office'').
       (b) Director.--The Office shall be headed by a Director of 
     Homeland Security, who shall be appointed by the Secretary.
       (c) Responsibilities.--The Director of Homeland Security 
     shall--
       (1) coordinate all homeland security activities of the 
     Department, including integration and

[[Page H3554]]

     coordination of interagency emergency response plans for--
       (A) agricultural disease emergencies;
       (B) agroterrorist acts; and
       (C) other threats to agricultural biosecurity;
       (2) act as the primary liaison on behalf of the Department 
     with other Federal departments and agencies on the 
     coordination of efforts and interagency activities pertaining 
     to agricultural biosecurity; and
       (3) advise the Secretary on policies, regulations, 
     processes, budget, and actions pertaining to homeland 
     security.

     SEC. 14112. AGRICULTURAL BIOSECURITY COMMUNICATION CENTER.

       (a) Establishment.--The Secretary shall establish a 
     communication center within the Department to--
       (1) collect and disseminate information and prepare for an 
     agricultural disease emergency, agroterrorist act, or other 
     threat to agricultural biosecurity; and
       (2) coordinate activities described in paragraph (1) among 
     agencies and offices within the Department.
       (b) Relation to Existing DHS Communication Systems.--
       (1) Consistency and coordination.--The communication center 
     established under subsection (a) shall, to the maximum extent 
     practicable, share and coordinate the dissemination of timely 
     information with the Department of Homeland Security and 
     other communication systems of appropriate Federal 
     departments and agencies.
       (2) Avoiding redundancies.--Paragraph (1) shall not be 
     construed to impede, conflict with, or duplicate the 
     communications activities performed by the Secretary of 
     Homeland Security under any provision of law.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated such sums as may be necessary to carry out 
     this section for each of fiscal years 2008 through 2012.

     SEC. 14113. ASSISTANCE TO BUILD LOCAL CAPACITY IN 
                   AGRICULTURAL BIOSECURITY PLANNING, 
                   PREPAREDNESS, AND RESPONSE.

       (a) Advanced Training Programs.--
       (1) Grant assistance.--The Secretary shall establish a 
     competitive grant program to support the development and 
     expansion of advanced training programs in agricultural 
     biosecurity planning and response for food science 
     professionals and veterinarians.
       (2) Authorization of appropriations.--There are authorized 
     to be appropriated to the Secretary such sums as may be 
     necessary to carry out this subsection for each of fiscal 
     years 2008 through 2012.
       (b) Assessment of Response Capability.--
       (1) Grant and loan assistance.--The Secretary shall 
     establish a competitive grant and low-interest loan 
     assistance program to assist States in assessing agricultural 
     disease response capability.
       (2) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection $25,000,000 
     for each of fiscal years 2008 through 2012.

                      CHAPTER 2--OTHER PROVISIONS

     SEC. 14121. RESEARCH AND DEVELOPMENT OF AGRICULTURAL 
                   COUNTERMEASURES.

       (a) Grant Program.--
       (1) Competitive grant program.--The Secretary shall 
     establish a competitive grant program to encourage basic and 
     applied research and the development of qualified 
     agricultural countermeasures.
       (2) Waiver in emergencies.--The Secretary may waive the 
     requirement under paragraph (1) that a grant be provided on a 
     competitive basis if--
       (A) the Secretary has declared a plant or animal disease 
     emergency under the Plant Protection Act (7 U.S.C. 7701 et 
     seq.) or the Animal Health Protection Act (7 U.S.C. 8301 et 
     seq.); and
       (B) waiving the requirement would lead to the rapid 
     development of a qualified agricultural countermeasure, as 
     determined by the Secretary.
       (b) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $50,000,000 for 
     each of fiscal years 2008 through 2012.

     SEC. 14122. AGRICULTURAL BIOSECURITY GRANT PROGRAM.

       (a) Competitive Grant Program.--The Secretary shall 
     establish a competitive grant program to promote the 
     development of teaching programs in agriculture, veterinary 
     medicine, and disciplines closely allied to the food and 
     agriculture system to increase the number of trained 
     individuals with an expertise in agricultural biosecurity.
       (b) Eligibility.--The Secretary may award a grant under 
     this section only to an entity that is--
       (1) an accredited school of veterinary medicine; or
       (2) a department of an institution of higher education with 
     a primary focus on--
       (A) comparative medicine;
       (B) veterinary science; or
       (C) agricultural biosecurity.
       (c) Preference.--The Secretary shall give preference in 
     awarding grants based on the ability of an applicant--
       (1) to increase the number of veterinarians or individuals 
     with advanced degrees in food and agriculture disciplines who 
     are trained in agricultural biosecurity practice areas;
       (2) to increase research capacity in areas of agricultural 
     biosecurity; or
       (3) to fill critical agricultural biosecurity shortage 
     situations outside of the Federal Government.
       (d) Use of Funds..--
       (1) In general.--Amounts received under this section shall 
     be used by a grantee to pay--
       (A) costs associated with the acquisition of equipment and 
     other capital costs relating to the expansion of food, 
     agriculture, and veterinary medicine teaching programs in 
     agricultural biosecurity;
       (B) capital costs associated with the expansion of academic 
     programs that offer postgraduate training for veterinarians 
     or concurrent training for veterinary students in specific 
     areas of specialization; or
       (C) other capacity and infrastructure program costs that 
     the Secretary considers appropriate.
       (2) Limitation.--Funds received under this section may not 
     be used for the construction, renovation, or rehabilitation 
     of a building or facility.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated sums as are necessary to carry out this 
     section for each of fiscal years 2008 through 2012, to remain 
     available until expended.

               Subtitle C--Other Miscellaneous Provisions

     SEC. 14201. COTTON CLASSIFICATION SERVICES.

       Section 3a of the Act of March 3, 1927 (7 U.S.C. 473a), is 
     amended to read as follows:

     ``SEC. 3A. COTTON CLASSIFICATION SERVICES.

       ``(a) In General.--The Secretary of Agriculture (referred 
     to in this section as the `Secretary') shall--
       ``(1) make cotton classification services available to 
     producers of cotton; and
       ``(2) provide for the collection of classification fees 
     from participating producers or agents that voluntarily agree 
     to collect and remit the fees on behalf of producers.
       ``(b) Fees.--
       ``(1) Use of fees.--Classification fees collected under 
     subsection (a)(2) and the proceeds from the sales of samples 
     submitted under this section shall, to the maximum extent 
     practicable, be used to pay the cost of the services provided 
     under this section, including administrative and supervisory 
     costs.
       ``(2) Announcement of fees.--The Secretary shall announce a 
     uniform classification fee and any applicable surcharge for 
     classification services not later than June 1 of the year in 
     which the fee applies.
       ``(c) Consultation.--
       ``(1) In general.--In establishing the amount of fees under 
     this section, the Secretary shall consult with 
     representatives of the United States cotton industry.
       ``(2) Exemption.--The Federal Advisory Committee Act (5 
     U.S.C. App.) shall not apply to consultations with 
     representatives of the United States cotton industry under 
     this section.
       ``(d) Crediting of Fees.--Any fees collected under this 
     section and under section 3d, late payment penalties, the 
     proceeds from the sales of samples, and interest earned from 
     the investment of such funds shall--
       ``(1) be credited to the current appropriation account that 
     incurs the cost of services provided under this section and 
     section 3d; and
       ``(2) remain available without fiscal year limitation to 
     pay the expenses of the Secretary in providing those 
     services.
       ``(e) Investment of Funds.--Funds described in subsection 
     (d) may be invested--
       ``(1) by the Secretary in insured or fully collateralized, 
     interest-bearing accounts; or
       ``(2) at the discretion of the Secretary, by the Secretary 
     of the Treasury in United States Government debt instruments.
       ``(f) Lease Agreements.--Notwithstanding any other 
     provision of law, the Secretary may enter into long-term 
     lease agreements that exceed 5 years or may take title to 
     property (including through purchase agreements) for the 
     purpose of obtaining offices to be used for the 
     classification of cotton in accordance with this Act, if the 
     Secretary determines that action would best effectuate the 
     purposes of this Act.
       ``(g) Authorization of Appropriations.--To the extent that 
     financing is not available from fees and the proceeds from 
     the sales of samples, there are authorized to be appropriated 
     such sums as are necessary to carry out this section.''.

     SEC. 14202. DESIGNATION OF STATES FOR COTTON RESEARCH AND 
                   PROMOTION.

       Section 17(f) of the Cotton Research and Promotion Act (7 
     U.S.C. 2116(f)) is amended--
       (1) by striking ``(f) The term'' and inserting the 
     following:
       ``(f) Cotton-Producing State.--
       ``(1) In general.--The term'';
       (2) by striking ``more, and the term'' and all that follows 
     through the end of the subsection and inserting the 
     following: ``more.
       ``(2) Inclusions.--The term `cotton-producing State' 
     includes--
       ``(A) any combination of States described in paragraph (1); 
     and
       ``(B) effective beginning with the 2008 crop of cotton, the 
     States of Kansas, Virginia, and Florida.''.

     SEC. 14203. GRANTS TO REDUCE PRODUCTION OF METHAMPHETAMINES 
                   FROM ANHYDROUS AMMONIA.

       (a) Definitions.--In this section:
       (1) Eligible entity.--The term ``eligible entity'' means--
       (A) a producer of agricultural commodities;
       (B) a cooperative association, a majority of the members of 
     which produce or process agricultural commodities; or
       (C) a person in the trade or business of--
       (i) selling an agricultural product (including an 
     agricultural chemical) at retail, predominantly to farmers 
     and ranchers; or
       (ii) aerial and ground application of an agricultural 
     chemical.
       (2) Nurse tank.--The term ``nurse tank'' shall be 
     considered to be a cargo tank (within the meaning of section 
     173.315(m) of title 49, Code of Federal Regulations, as in 
     effect as of the date of the enactment of this Act).
       (b) Grant Authority.--The Secretary may make a grant to an 
     eligible entity to enable the

[[Page H3555]]

     eligible entity to obtain and add to an anhydrous ammonia 
     fertilizer nurse tank a physical lock or a substance to 
     reduce the amount of methamphetamine that can be produced 
     from any anhydrous ammonia removed from the nurse tank.
       (c) Grant Amount.--The amount of a grant made under this 
     section to an eligible entity shall be the product obtained 
     by multiplying--
       (1) an amount not less than $40 and not more than $60, as 
     determined by the Secretary; and
       (2) the number of fertilizer nurse tanks of the eligible 
     entity.
       (d) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Secretary to make grants under this 
     section $15,000,000 for the period of fiscal years 2008 
     through 2012.

     SEC. 14204. GRANTS TO IMPROVE SUPPLY, STABILITY, SAFETY, AND 
                   TRAINING OF AGRICULTURAL LABOR FORCE.

       (a) Definition of Eligible Entity.--In this section, the 
     term ``eligible entity'' means an entity described in section 
     379C(a) of the Consolidated Farm and Rural Development Act (7 
     U.S.C. 2008q(a)).
       (b) Grants.--
       (1) In general.--To assist agricultural employers and 
     farmworkers by improving the supply, stability, safety, and 
     training of the agricultural labor force, the Secretary may 
     provide grants to eligible entities for use in providing 
     services to assist farmworkers who are citizens or otherwise 
     legally present in the United States in securing, retaining, 
     upgrading, or returning from agricultural jobs.
       (2) Eligible services.--The services referred to in 
     paragraph (1) include--
       (A) agricultural labor skills development;
       (B) the provision of agricultural labor market information;
       (C) transportation;
       (D) short-term housing while in transit to an agricultural 
     worksite;
       (E) workplace literacy and assistance with English as a 
     second language;
       (F) health and safety instruction, including ways of 
     safeguarding the food supply of the United States; and
       (G) such other services as the Secretary determines to be 
     appropriate.
       (c) Limitation on Administrative Expenses.--Not more than 
     15 percent of the funds made available to carry out this 
     section for a fiscal year may be used to pay for 
     administrative expenses.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section for each of fiscal years 2008 through 2012.

     SEC. 14205. AMENDMENT TO THE RIGHT TO FINANCIAL PRIVACY ACT 
                   OF 1978.

       Section 1113(k) of the Right to Financial Privacy Act of 
     1978 (12 U.S.C. 3413(k)) is amended--
       (1) by striking the subsection heading and inserting the 
     following:
       ``(k) Disclosure Necessary for Proper Administration of 
     Programs of Certain Government Authorities.--''; and
       (2) by striking paragraph (2) and inserting the following:
       ``(2) Nothing in this title shall apply to the disclosure 
     by the financial institution of information contained in the 
     financial records of any customer to any Government authority 
     that certifies, disburses, or collects payments, where the 
     disclosure of such information is necessary to, and such 
     information is used solely for the purpose of--
       ``(A) verification of the identity of any person or proper 
     routing and delivery of funds in connection with the issuance 
     of a Federal payment or collection of funds by a Government 
     authority; or
       ``(B) the investigation or recovery of an improper Federal 
     payment or collection of funds or an improperly negotiated 
     Treasury check.
       ``(3) Notwithstanding any other provision of law, a request 
     authorized by paragraph (1) or (2) (and the information 
     contained therein) may be used by the financial institution 
     or its agents solely for the purpose of providing information 
     contained in the financial records of the customer to the 
     Government authority requesting the information, and the 
     financial institution and its agents shall be barred from 
     redisclosure of such information. Any Government authority 
     receiving information pursuant to paragraph (1) or (2) may 
     not disclose or use the information, except for the purposes 
     set forth in such paragraph.''.

     SEC. 14206. REPORT ON STORED QUANTITIES OF PROPANE.

       (a) Report.--
       (1) In general.--Not later than 240 days after the date of 
     the enactment of this Act, the Secretary of Homeland Security 
     (referred to in this section as the ``Secretary'') shall 
     submit to the Committee on Agriculture, Nutrition, and 
     Forestry of the Senate and the Committee on Agriculture of 
     the House of Representatives a report describing the effect 
     of interim or final regulations issued by the Secretary 
     pursuant to section 550(a) of the Department of Homeland 
     Security Appropriations Act, 2007 (6 U.S.C. 121 note; Public 
     Law 109-295), with respect to possession of quantities of 
     propane that meet or exceed the screening threshold quantity 
     for propane established in the final rule under that section.
       (2) Inclusions.--The report under paragraph (1) shall 
     include a description of--
       (A) the number of facilities that completed a top screen 
     consequence assessment due to possession of quantities of 
     propane that meet or exceed the listed screening threshold 
     quantity for propane;
       (B) the number of agricultural facilities that completed 
     the top screen consequence assessment due to possession of 
     quantities of propane that meet or exceed the listed 
     screening threshold quantity for propane;
       (C) the number of propane facilities initially determined 
     to be high risk by the Secretary;
       (D) the number of propane facilities--
       (i) required to complete a security vulnerability 
     assessment or a site security plan; or
       (ii) that submit to the Secretary an alternative security 
     program;
       (E) the number of propane facilities that file an appeal of 
     a finding under the final rule described in paragraph (1); 
     and
       (F) to the extent available, the average cost of--
       (i) completing a top screen consequence assessment 
     requirement;
       (ii) completing a security vulnerability assessment; and
       (iii) completing and implementing a site security plan; and
       (3) Form.--The report under paragraph (1) shall be 
     submitted in unclassified form, but may include a classified 
     annex.
       (b) Educational Outreach.--Not later than 30 days after the 
     date of the enactment of this Act, the Secretary shall 
     conduct educational outreach activities for rural facilities 
     that may be required to complete a top screen consequence 
     assessment due to possession of propane in a quantity that 
     meets or exceeds the listed screening threshold quantity for 
     propane.

     SEC. 14207. PROHIBITIONS ON DOG FIGHTING VENTURES.

       (a) In General.--Section 26 of the Animal Welfare Act (7 
     U.S.C. 2156) is amended--
       (1) in subsection (a)--
       (A) in paragraph (1), by striking ``, if any animal in the 
     venture was moved in interstate or foreign commerce''; and
       (B) in the heading of paragraph (2), by striking ``state'' 
     and inserting ``State'';
       (2) in subsection (b)--
       (A) by striking ``(b) It shall be'' and inserting the 
     following:
       ``(b) Buying, Selling, Delivering, Possessing, Training, or 
     Transporting Animals for Participation in Animal Fighting 
     Venture.--It shall be''; and
       (B) by striking ``transport, deliver'' and all that follows 
     through ``participate'' and inserting ``possess, train, 
     transport, deliver, or receive any animal for purposes of 
     having the animal participate'';
       (3) in subsection (c)--
       (A) by striking ``(c) It shall be'' and inserting the 
     following:
       ``(c) Use of Postal Service or Other Interstate 
     Instrumentality for Promoting or Furthering Animal Fighting 
     Venture.--It shall be''; and
       (B) by inserting ``advertising an animal, or an instrument 
     described in subsection (e), for use in an animal fighting 
     venture,'' after ``for purposes of'';
       (4) in subsection (d), by striking ``(d) Notwithstanding'' 
     and inserting the following:
       ``(d) Violation of State Law.--Notwithstanding'';
       (5) in subsection (e), by striking ``(e) It shall be'' and 
     inserting the following:
       ``(e) Buying, Selling, Delivering, or Transporting Sharp 
     Instruments for Use in Animal Fighting Venture.--It shall 
     be'';
       (6) in subsection (f)--
       (A) by striking ``(f) The Secretary'' and inserting the 
     following:
       ``(f) Investigation of Violations by Secretary; Assistance 
     by Other Federal Agencies; Issuance of Search Warrant; 
     Forfeiture; Costs Recoverable in Forfeiture or Civil 
     Action.--The Secretary''; and
       (B) in the last sentence--
       (i) by striking ``by the United States'';
       (ii) by inserting ``(1)'' after ``owner of the animals''; 
     and
       (iii) by striking ``proceeding or in'' and inserting 
     ``proceeding, or (2) in'';
       (7) in subsection (g)--
       (A) by striking ``(g) For purposes of'' and inserting the 
     following:
       ``(g) Definitions.--In'';
       (B) in paragraph (1), by striking ``any event'' and all 
     that follows through ``entertainment'' and inserting ``any 
     event, in or affecting interstate or foreign commerce, that 
     involves a fight conducted or to be conducted between at 
     least 2 animals for purposes of sport, wagering, or 
     entertainment,'';
       (C) by striking paragraph (2);
       (D) in paragraph (5)--
       (i) by striking ``dog or other''; and
       (ii) by striking ``; and'' and inserting a period; and
       (E) by redesignating paragraphs (3) through (5) as 
     paragraphs (2) through (4), respectively;
       (8) by redesignating subsections (h) and (i) as subsections 
     (i) and (j), respectively;
       (9) in subsection (i) (as so redesignated), by striking 
     ``(i)(1) The provisions'' and inserting the following:
       ``(i) Conflict With State Law.--
       ``(1) In general.--The provisions'';
       (10) in subsection (j) (as so redesignated), by striking 
     ``(j) The criminal'' and inserting the following:
       ``(j) Criminal Penalties.--The criminal''; and
       (11) in subsection (g)(6), by striking ``(6) the conduct'' 
     and inserting the following:
       ``(h) Relationship to Other Provisions.--The conduct''.
       (b) Enforcement of Animal Fighting Prohibitions.--Section 
     49 of title 18, United States Code, is amended by striking 
     ``3 years'' and inserting ``5 years''.

     SEC. 14208. DEPARTMENT OF AGRICULTURE CONFERENCE 
                   TRANSPARENCY.

       (a) Report.--
       (1) Requirement.--Not later than September 30 of each year, 
     the Secretary of Agriculture shall submit to the Committee on 
     Agriculture of the House of Representatives and the Committee 
     on Agriculture, Nutrition, and Forestry of the Senate, a 
     report on conferences sponsored or

[[Page H3556]]

     held by the Department of Agriculture or attended by 
     employees of the Department of Agriculture.
       (2) Contents.--Each report under paragraph (1) shall 
     contain--
       (A) for each conference sponsored or held by the Department 
     or attended by employees of the Department--
       (i) the name of the conference;
       (ii) the location of the conference;
       (iii) the number of Department of Agriculture employees 
     attending the conference; and
       (iv) the costs (including travel expenses) relating to such 
     conference; and
       (B) for each conference sponsored or held by the Department 
     of Agriculture for which the Department awarded a procurement 
     contract, a description of the contracting procedures related 
     to such conference.
       (3) Exclusions.--The requirement in paragraph (1) shall not 
     apply to any conference--
       (A) for which the cost to the Federal Government was less 
     than $10,000; or
       (B) outside of the United States that is attended by the 
     Secretary or the Secretary's designee as an official 
     representative of the United States government.
       (b) Availability of Report.--Each report submitted in 
     accordance with subsection (a) shall be posted in a 
     searchable format on a Department of Agriculture website that 
     is available to the public.
       (c) Definition of Conference.--In this section, the term 
     ``conference''--
       (1) means a meeting that--
       (A) is held for consultation, education, awareness, or 
     discussion;
       (B) includes participants from at least one agency of the 
     Department of Agriculture;
       (C) is held in whole or in part at a facility outside of an 
     agency of the Department of Agriculture; and
       (D) involves costs associated with travel and lodging for 
     some participants; and
       (2) does not include any training program that is 
     continuing education or a curriculum-based educational 
     program, provided that such training program is held 
     independent of a conference of a non-governmental 
     organization.

     SEC. 14209. FEDERAL INSECTICIDE, FUNGICIDE, AND RODENTICIDE 
                   ACT AMENDMENTS.

       (a) Payment of Expenses.--Section 17(d) of the Federal 
     Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. 
     136o(d)) is amended--
       (1) by striking ``The Administrator'' and inserting the 
     following:
       ``(1) In general.--The Administrator''; and
       (2) by adding at the end the following new paragraph:
       ``(2) Department of state expenses.--Any expenses incurred 
     by an employee of the Environmental Protection Agency who 
     participates in any international technical, economic, or 
     policy review board, committee, or other official body that 
     is meeting in relation to an international treaty shall be 
     paid by the Department of State.''.
       (b) Container Recycling.--Section 19(a) of the Federal 
     Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. 
     136q(a)) is amended by adding at the end the following new 
     paragraph:
       ``(4) Container recycling.--The Secretary may promulgate a 
     regulation for the return and recycling of disposable 
     pesticide containers used for the distribution or sale of 
     registered pesticide products in interstate commerce. Any 
     such regulation requiring recycling of disposable pesticide 
     containers shall not apply to antimicrobial pesticides (as 
     defined in section 2) or other pesticide products intended 
     for non-agricultural uses.''.

     SEC. 14210. IMPORTATION OF LIVE DOGS.

       (a) In General.--The Animal Welfare Act is amended by 
     adding after section 17 (7 U.S.C. 2147) the following:

     ``SEC. 18. IMPORTATION OF LIVE DOGS.

       ``(a) Definitions.--In this section:
       ``(1) Importer.--The term `importer' means any person who, 
     for purposes of resale, transports into the United States 
     puppies from a foreign country.
       ``(2) Resale.--The term `resale' includes any transfer of 
     ownership or control of an imported dog of less than 6 months 
     of age to another person, for more than de minimis 
     consideration.
       ``(b) Requirements.--
       ``(1) In general.--Except as provided in paragraph (2), no 
     person shall import a dog into the United States for purposes 
     of resale unless, as determined by the Secretary, the dog--
       ``(A) is in good health;
       ``(B) has received all necessary vaccinations; and
       ``(C) is at least 6 months of age, if imported for resale.
       ``(2) Exception.--
       ``(A) In general.--The Secretary, by regulation, shall 
     provide an exception to any requirement under paragraph (1) 
     in any case in which a dog is imported for--
       ``(i) research purposes; or
       ``(ii) veterinary treatment.
       ``(B) Lawful importation into hawaii.--Paragraph (1)(C) 
     shall not apply to the lawful importation of a dog into the 
     State of Hawaii from the British Isles, Australia, Guam, or 
     New Zealand in compliance with the applicable regulations of 
     the State of Hawaii and the other requirements of this 
     section, if the dog is not transported out of the State of 
     Hawaii for purposes of resale at less than 6 months of age.
       ``(c) Implementation and Regulations.--The Secretary, the 
     Secretary of Health and Human Services, the Secretary of 
     Commerce, and the Secretary of Homeland Security shall 
     promulgate such regulations as the Secretaries determine to 
     be necessary to implement and enforce this section.
       ``(d) Enforcement.--An importer that fails to comply with 
     this section shall--
       ``(1) be subject to penalties under section 19; and
       ``(2) provide for the care (including appropriate 
     veterinary care), forfeiture, and adoption of each applicable 
     dog, at the expense of the importer.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     takes effect on the date of the enactment of this Act.

     SEC. 14211. PERMANENT DEBARMENT FROM PARTICIPATION IN 
                   DEPARTMENT OF AGRICULTURE PROGRAMS FOR FRAUD.

       (a) In General.--Subject to subsection (b), the Secretary 
     of Agriculture shall permanently debar an individual, 
     organization, corporation, or other entity convicted of a 
     felony for knowingly defrauding the United States in 
     connection with any program administered by the Department of 
     Agriculture from any subsequent participation in Department 
     of Agriculture programs.
       (b) Exceptions.--
       (1) Secretary determination.--The Secretary may reduce a 
     debarment under subsection (a) to a period of not less than 
     10 years if the Secretary considers it appropriate.
       (2) Food assistance.--A debarment under subsection (a) 
     shall not apply with respect to participation in domestic 
     food assistance programs (as defined by the Secretary).

     SEC. 14212. PROHIBITION ON CLOSURE OR RELOCATION OF COUNTY 
                   OFFICES FOR THE FARM SERVICE AGENCY.

       (a) Temporary Prohibition.--
       (1) In general.--Subject to paragraph (2), until the date 
     that is two years after the date of the enactment of this 
     Act, the Secretary of Agriculture may not close or relocate a 
     county or field office of the Farm Service Agency.
       (2) Exception.--Paragraph (1) shall not apply to--
       (A) an office that is located not more than 20 miles from 
     another office of the Farm Service Agency; or
       (B) the relocation of an office within the same county in 
     the course of routine leasing operations.
       (b) Limitation on Closure; Notice.--
       (1) Limitation.--After the period referred to in subsection 
     (a)(1), the Secretary shall, before closing any office of the 
     Farm Service Agency that is located more than 20 miles from 
     another office of the Farm Service Agency, to the maximum 
     extent practicable, first close any offices of the Farm 
     Service Agency that--
       (A) are located less than 20 miles from another office of 
     the Farm Service Agency; and
       (B) have two or fewer permanent full-time employees.
       (2) Notice.--After the period referred to in subsection 
     (a)(1), the Secretary of Agriculture may not close a county 
     or field office of the Farm Service Agency unless--
       (A) not later than 30 days after the Secretary proposes to 
     close such office, the Secretary holds a public meeting 
     regarding the proposed closure in the county in which such 
     office is located; and
       (B) after the public meeting referred to in subparagraph 
     (A), but not less than 90 days before the date on which the 
     Secretary approves the closure of such office, the Secretary 
     notifies the Committee on Agriculture and the Committee on 
     Appropriations of the House of Representatives, the Committee 
     on Agriculture, Nutrition, and Forestry and the Committee on 
     Appropriations of the Senate, each Senator representing the 
     State in which the office proposed to be closed is located, 
     and the member of the House of Representatives who represents 
     the Congressional district in which the office proposed to be 
     closed is located of the proposed closure of such office.

     SEC. 14213. USDA GRADUATE SCHOOL.

       (a) In General.--Section 921 of the Federal Agriculture 
     Improvement and Reform Act of 1996 (7 U.S.C. 2279b) is 
     amended--
       (1) in the heading, to read as follows:

     ``SEC. 921. DEPARTMENT OF AGRICULTURE EDUCATIONAL, TRAINING, 
                   AND PROFESSIONAL DEVELOPMENT ACTIVITIES.''; AND

       (2) by striking subsection (b) and inserting the following 
     new subsection:
       ``(b) Operation as Nonappropriated Fund Instrumentality.--
       ``(1) Cease operations.--Not later than October 1, 2009, 
     the Secretary of Agriculture shall cease to maintain or 
     operate a nonappropriated fund instrumentality of the United 
     States to develop, administer, or provide educational 
     training and professional development activities, including 
     educational activities for Federal agencies, Federal 
     employees, non-profit organizations, other entities, and 
     members of the general public.
       ``(2) Transition.--
       ``(A) In general.--The Secretary of Agriculture is 
     authorized to use funds available to the Department of 
     Agriculture and such resources of the Department as the 
     Secretary considers appropriate (including the assignment of 
     such employees of the Department as the Secretary considers 
     appropriate) to assist the General Administrative Board of 
     the Graduate School in the conversion of the Graduate School 
     to an entity that is non-governmental and not a 
     nonappropriated fund instrumentality of the United States, 
     including such privatization activities not otherwise 
     inconsistent with law or regulation.
       ``(B) Termination of authority.--The authority under 
     paragraph (1) shall terminate on the earlier of--
       ``(i) the completion of the transition of the Graduate 
     School to an entity that is non-governmental and not a 
     nonappropriated fund instrumentality of the United States, as 
     determined by the Secretary; or
       ``(ii) September 30, 2009.''.
       (b) Procurement Procedures.--Notwithstanding the amendments 
     made by subsection (a), effective on the date of the 
     enactment of this Act, the Graduate School of the Department 
     of Agriculture shall be subject to Federal procurement laws 
     and regulations in the same manner and subject to the same 
     requirements as a

[[Page H3557]]

     private entity providing services to the Federal Government.

     SEC. 14214. FINES FOR VIOLATIONS OF THE ANIMAL WELFARE ACT.

       Section 19(b) of the Animal Welfare Act (7 U.S.C. 2149(b)) 
     is amended in the first sentence by striking ``not more than 
     $2,500 for each such violation'' and inserting ``not more 
     than $10,000 for each such violation''.

     SEC. 14215. DEFINITION OF CENTRAL FILING SYSTEM.

       Section 1324(c)(2) of the Food Security Act of 1985 (7 
     U.S.C. 1631(c)(2)) is amended--
       (1) in subparagraph (C)(ii)(II), by inserting after ``such 
     debtors'' the following: ``, except that the numerical list 
     containing social security or taxpayer identification numbers 
     may be encrypted for security purposes if the Secretary of 
     State provides a method by which an effective search of the 
     encrypted numbers may be conducted to determine whether the 
     farm product at issue is subject to 1 or more liens''; and
       (2) in subparagraph (E)--
       (A) by striking ``paragraph (C)'' and inserting 
     ``subparagraph (C)''; and
       (B) by inserting before the semicolon at the end the 
     following: ``except that--
       ``(i) the distribution of the portion of the master list 
     may be in electronic, written, or printed form; and
       ``(ii) if social security or taxpayer identification 
     numbers on the master list are encrypted, the Secretary of 
     State may distribute the master list only--

       ``(I) by compact disc or other electronic media that 
     contains--

       ``(aa) the recorded list of debtor names; and
       ``(bb) an encryption program that enables the buyer, 
     commission merchant, and selling agent to enter a social 
     security number for matching against the recorded list of 
     encrypted social security or taxpayer identification numbers; 
     and

       ``(II) on the written request of the buyer, commission 
     merchant, or selling agent, by paper copy of the list to the 
     requestor''.

     SEC. 14216. CONSIDERATION OF PROPOSED RECOMMENDATIONS OF 
                   STUDY ON USE OF CATS AND DOGS IN FEDERAL 
                   RESEARCH.

       (a) In General.--The Secretary of Agriculture shall--
       (1) review--
       (A) any independent reviews conducted by a nationally 
     recognized panel of experts of the use of Class B dogs and 
     cats in federally supported research to determine how 
     frequently such dogs and cats are used in research by the 
     National Institutes of Health; and
       (B) any recommendations proposed by such panel outlining 
     the parameters of such use; and
       (2) submit to the Committee on Agriculture of the House of 
     Representatives and the Committee on Agriculture, Nutrition, 
     and Forestry of the Senate a report on how recommendations 
     referred to in paragraph (1)(B) can be applied within the 
     Department of Agriculture to ensure such dogs and cats are 
     treated in accordance with regulations of the Department of 
     Agriculture.
       (b) Class B Dogs and Cats Defined.--In this section, the 
     term ``Class B dogs and cats'' means dogs and cats obtained 
     from a Class ``B'' licensee, as such term is defined in 
     section 1.1 of title 9, Code of Federal Regulations.

     SEC. 14217. REGIONAL ECONOMIC AND INFRASTRUCTURE DEVELOPMENT.

       (a) In General.--Title 40, United States Code, is amended--
       (1) by redesignating subtitle V as subtitle VI; and
       (2) by inserting after subtitle IV the following:

     ``Subtitle V--Regional Economic and Infrastructure Development

``Chapter..............................................................
``151. GENERAL PROVISIONS.....................................15101....

``153. REGIONAL COMMISSIONS...................................15301....

``155. FINANCIAL ASSISTANCE...................................15501....

``157. ADMINISTRATIVE PROVISIONS..............................15701....

                    ``CHAPTER 1--GENERAL PROVISIONS

``Sec.
``15101. Definitions.

     ``Sec. 15101. Definitions

       ``In this subtitle, the following definitions apply:
       ``(1) Commission.--The term `Commission' means a Commission 
     established under section 15301.
       ``(2) Local development district.--The term `local 
     development district' means an entity that--
       ``(A)(i) is an economic development district that is--
       ``(I) in existence on the date of the enactment of this 
     chapter; and
       ``(II) located in the region; or
       ``(ii) if an entity described in clause (i) does not 
     exist--
       ``(I) is organized and operated in a manner that ensures 
     broad-based community participation and an effective 
     opportunity for local officials, community leaders, and the 
     public to contribute to the development and implementation of 
     programs in the region;
       ``(II) is governed by a policy board with at least a simple 
     majority of members consisting of--

       ``(aa) elected officials; or
       ``(bb) designees or employees of a general purpose unit of 
     local government that have been appointed to represent the 
     unit of local government; and

       ``(III) is certified by the Governor or appropriate State 
     officer as having a charter or authority that includes the 
     economic development of counties, portions of counties, or 
     other political subdivisions within the region; and
       ``(B) has not, as certified by the Federal Cochairperson--
       ``(i) inappropriately used Federal grant funds from any 
     Federal source; or
       ``(ii) appointed an officer who, during the period in which 
     another entity inappropriately used Federal grant funds from 
     any Federal source, was an officer of the other entity.
       ``(3) Federal grant program.--The term `Federal grant 
     program' means a Federal grant program to provide assistance 
     in carrying out economic and community development 
     activities.
       ``(4) Indian tribe.--The term `Indian tribe' has the 
     meaning given the term in section 4 of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 450b).
       ``(5) Nonprofit entity.--The term `nonprofit entity' means 
     any organization described in section 501(c) of the Internal 
     Revenue Code of 1986 and exempt from taxation under 501(a) of 
     that Code that has been formed for the purpose of economic 
     development.
       ``(6) Region.--The term `region' means the area covered by 
     a Commission as described in subchapter II of chapter 157.

                   ``CHAPTER 2--REGIONAL COMMISSIONS

``Sec.
``15301. Establishment, membership, and employees.
``15302. Decisions.
``15303. Functions.
``15304. Administrative powers and expenses.
``15305. Meetings.
``15306. Personal financial interests.
``15307. Tribal participation.
``15308. Annual report.

     ``Sec. 15301. Establishment, membership, and employees

       ``(a) Establishment.--There are established the following 
     regional Commissions:
       ``(1) The Southeast Crescent Regional Commission.
       ``(2) The Southwest Border Regional Commission.
       ``(3) The Northern Border Regional Commission.
       ``(b) Membership.--
       ``(1) Federal and state members.--Each Commission shall be 
     composed of the following members:
       ``(A) A Federal Cochairperson, to be appointed by the 
     President, by and with the advice and consent of the Senate.
       ``(B) The Governor of each participating State in the 
     region of the Commission.
       ``(2) Alternate members.--
       ``(A) Alternate federal cochairperson.--The President shall 
     appoint an alternate Federal Cochairperson for each 
     Commission. The alternate Federal Cochairperson, when not 
     actively serving as an alternate for the Federal 
     Cochairperson, shall perform such functions and duties as are 
     delegated by the Federal Cochairperson.
       ``(B) State alternates.--The State member of a 
     participating State may have a single alternate, who shall be 
     appointed by the Governor of the State from among the members 
     of the Governor's cabinet or personal staff.
       ``(C) Voting.--An alternate member shall vote in the case 
     of the absence, death, disability, removal, or resignation of 
     the Federal or State member for which the alternate member is 
     an alternate.
       ``(3) Cochairpersons.--A Commission shall be headed by--
       ``(A) the Federal Cochairperson, who shall serve as a 
     liaison between the Federal Government and the Commission; 
     and
       ``(B) a State Cochairperson, who shall be a Governor of a 
     participating State in the region and shall be elected by the 
     State members for a term of not less than 1 year.
       ``(4) Consecutive terms.--A State member may not be elected 
     to serve as State Cochairperson for more than 2 consecutive 
     terms.
       ``(c) Compensation.--
       ``(1) Federal cochairpersons.--Each Federal Cochairperson 
     shall be compensated by the Federal Government at level III 
     of the Executive Schedule as set out in section 5314 of title 
     5.
       ``(2) Alternate federal cochairpersons.--Each Federal 
     Cochairperson's alternate shall be compensated by the Federal 
     Government at level V of the Executive Schedule as set out in 
     section 5316 of title 5.
       ``(3) State members and alternates.--Each State member and 
     alternate shall be compensated by the State that they 
     represent at the rate established by the laws of that State.
       ``(d) Executive Director and Staff.--
       ``(1) In general.--A Commission shall appoint and fix the 
     compensation of an executive director and such other 
     personnel as are necessary to enable the Commission to carry 
     out its duties. Compensation under this paragraph may not 
     exceed the maximum rate of basic pay established for the 
     Senior Executive Service under section 5382 of title 5, 
     including any applicable locality-based comparability payment 
     that may be authorized under section 5304(h)(2)(C) of that 
     title.
       ``(2) Executive director.--The executive director shall be 
     responsible for carrying out the administrative duties of the 
     Commission, directing the Commission staff, and such other 
     duties as the Commission may assign.
       ``(e) No Federal Employee Status.--No member, alternate, 
     officer, or employee of a Commission (other than the Federal 
     Cochairperson, the alternate Federal Cochairperson, staff of 
     the Federal Cochairperson, and any Federal employee detailed 
     to the Commission) shall be considered to be a Federal 
     employee for any purpose.

     ``Sec. 15302. Decisions

       ``(a) Requirements for Approval.--Except as provided in 
     section 15304(c)(3), decisions by the Commission shall 
     require the affirmative vote of the Federal Cochairperson and 
     a majority of the State members (exclusive of members 
     representing States delinquent under section 15304(c)(3)(C)).
       ``(b) Consultation.--In matters coming before the 
     Commission, the Federal Cochairperson shall, to the extent 
     practicable, consult with the Federal departments and 
     agencies having an interest in the subject matter.

[[Page H3558]]

       ``(c) Quorums.--A Commission shall determine what 
     constitutes a quorum for Commission meetings; except that--
       ``(1) any quorum shall include the Federal Cochairperson or 
     the alternate Federal Cochairperson; and
       ``(2) a State alternate member shall not be counted toward 
     the establishment of a quorum.
       ``(d) Projects and Grant Proposals.--The approval of 
     project and grant proposals shall be a responsibility of each 
     Commission and shall be carried out in accordance with 
     section 15503.

     ``Sec. 15303. Functions

       ``A Commission shall--
       ``(1) assess the needs and assets of its region based on 
     available research, demonstration projects, investigations, 
     assessments, and evaluations of the region prepared by 
     Federal, State, and local agencies, universities, local 
     development districts, and other nonprofit groups;
       ``(2) develop, on a continuing basis, comprehensive and 
     coordinated economic and infrastructure development 
     strategies to establish priorities and approve grants for the 
     economic development of its region, giving due consideration 
     to other Federal, State, and local planning and development 
     activities in the region;
       ``(3) not later than one year after the date of the 
     enactment of this section, and after taking into account 
     State plans developed under section 15502, establish 
     priorities in an economic and infrastructure development plan 
     for its region, including 5-year regional outcome targets;
       ``(4)(A) enhance the capacity of, and provide support for, 
     local development districts in its region; or
       ``(B) if no local development district exists in an area in 
     a participating State in the region, foster the creation of a 
     local development district;
       ``(5) encourage private investment in industrial, 
     commercial, and other economic development projects in its 
     region;
       ``(6) cooperate with and assist State governments with the 
     preparation of economic and infrastructure development plans 
     and programs for participating States;
       ``(7) formulate and recommend to the Governors and 
     legislatures of States that participate in the Commission 
     forms of interstate cooperation and, where appropriate, 
     international cooperation; and
       ``(8) work with State and local agencies in developing 
     appropriate model legislation to enhance local and regional 
     economic development.

     ``Sec. 15304. Administrative powers and expenses

       ``(a) Powers.--In carrying out its duties under this 
     subtitle, a Commission may--
       ``(1) hold such hearings, sit and act at such times and 
     places, take such testimony, receive such evidence, and print 
     or otherwise reproduce and distribute a description of the 
     proceedings and reports on actions by the Commission as the 
     Commission considers appropriate;
       ``(2) authorize, through the Federal or State Cochairperson 
     or any other member of the Commission designated by the 
     Commission, the administration of oaths if the Commission 
     determines that testimony should be taken or evidence 
     received under oath;
       ``(3) request from any Federal, State, or local agency such 
     information as may be available to or procurable by the 
     agency that may be of use to the Commission in carrying out 
     the duties of the Commission;
       ``(4) adopt, amend, and repeal bylaws and rules governing 
     the conduct of business and the performance of duties by the 
     Commission;
       ``(5) request the head of any Federal agency, State agency, 
     or local government to detail to the Commission such 
     personnel as the Commission requires to carry out its duties, 
     each such detail to be without loss of seniority, pay, or 
     other employee status;
       ``(6) provide for coverage of Commission employees in a 
     suitable retirement and employee benefit system by making 
     arrangements or entering into contracts with any 
     participating State government or otherwise providing 
     retirement and other employee coverage;
       ``(7) accept, use, and dispose of gifts or donations or 
     services or real, personal, tangible, or intangible property;
       ``(8) enter into and perform such contracts, cooperative 
     agreements, or other transactions as are necessary to carry 
     out Commission duties, including any contracts or cooperative 
     agreements with a department, agency, or instrumentality of 
     the United States, a State (including a political 
     subdivision, agency, or instrumentality of the State), or a 
     person, firm, association, or corporation; and
       ``(9) maintain a government relations office in the 
     District of Columbia and establish and maintain a central 
     office at such location in its region as the Commission may 
     select.
       ``(b) Federal Agency Cooperation.--A Federal agency shall--
       ``(1) cooperate with a Commission; and
       ``(2) provide, to the extent practicable, on request of the 
     Federal Cochairperson, appropriate assistance in carrying out 
     this subtitle, in accordance with applicable Federal laws 
     (including regulations).
       ``(c) Administrative Expenses.--
       ``(1) In general.--Subject to paragraph (2), the 
     administrative expenses of a Commission shall be paid--
       ``(A) by the Federal Government, in an amount equal to 50 
     percent of the administrative expenses of the Commission; and
       ``(B) by the States participating in the Commission, in an 
     amount equal to 50 percent of the administrative expenses.
       ``(2) Expenses of the federal cochairperson.--All expenses 
     of the Federal Cochairperson, including expenses of the 
     alternate and staff of the Federal Cochairperson, shall be 
     paid by the Federal Government.
       ``(3) State share.--
       ``(A) In general.--Subject to subparagraph (B), the share 
     of administrative expenses of a Commission to be paid by each 
     State of the Commission shall be determined by a unanimous 
     vote of the State members of the Commission.
       ``(B) No federal participation.--The Federal Cochairperson 
     shall not participate or vote in any decision under 
     subparagraph (A).
       ``(C) Delinquent states.--During any period in which a 
     State is more than 1 year delinquent in payment of the 
     State's share of administrative expenses of the Commission 
     under this subsection--
       ``(i) no assistance under this subtitle shall be provided 
     to the State (including assistance to a political subdivision 
     or a resident of the State) for any project not approved as 
     of the date of the commencement of the delinquency; and
       ``(ii) no member of the Commission from the State shall 
     participate or vote in any action by the Commission.
       ``(4) Effect on assistance.--A State's share of 
     administrative expenses of a Commission under this subsection 
     shall not be taken into consideration when determining the 
     amount of assistance provided to the State under this 
     subtitle.

     ``Sec. 15305. Meetings

       ``(a) Initial Meeting.--Each Commission shall hold an 
     initial meeting not later than 180 days after the date of the 
     enactment of this section.
       ``(b) Annual Meeting.--Each Commission shall conduct at 
     least 1 meeting each year with the Federal Cochairperson and 
     at least a majority of the State members present.
       ``(c) Additional Meetings.--Each Commission shall conduct 
     additional meetings at such times as it determines and may 
     conduct such meetings by electronic means.

     ``Sec. 15306. Personal financial interests

       ``(a) Conflicts of Interest.--
       ``(1) No role allowed.--Except as permitted by paragraph 
     (2), an individual who is a State member or alternate, or an 
     officer or employee of a Commission, shall not participate 
     personally and substantially as a member, alternate, officer, 
     or employee of the Commission, through decision, approval, 
     disapproval, recommendation, request for a ruling, or other 
     determination, contract, claim, controversy, or other matter 
     in which, to the individual's knowledge, any of the following 
     has a financial interest:
       ``(A) The individual.
       ``(B) The individual's spouse, minor child, or partner.
       ``(C) An organization (except a State or political 
     subdivision of a State) in which the individual is serving as 
     an officer, director, trustee, partner, or employee.
       ``(D) Any person or organization with whom the individual 
     is negotiating or has any arrangement concerning prospective 
     employment.
       ``(2) Exception.--Paragraph (1) shall not apply if the 
     individual, in advance of the proceeding, application, 
     request for a ruling or other determination, contract, claim 
     controversy, or other particular matter presenting a 
     potential conflict of interest--
       ``(A) advises the Commission of the nature and 
     circumstances of the matter presenting the conflict of 
     interest;
       ``(B) makes full disclosure of the financial interest; and
       ``(C) receives a written decision of the Commission that 
     the interest is not so substantial as to be considered likely 
     to affect the integrity of the services that the Commission 
     may expect from the individual.
       ``(3) Violation.--An individual violating this subsection 
     shall be fined under title 18, imprisoned for not more than 1 
     year, or both.
       ``(b) State Member or Alternate.--A State member or 
     alternate member may not receive any salary, or any 
     contribution to, or supplementation of, salary, for services 
     on a Commission from a source other than the State of the 
     member or alternate.
       ``(c) Detailed Employees.--
       ``(1) In general.--No person detailed to serve a Commission 
     shall receive any salary, or any contribution to, or 
     supplementation of, salary, for services provided to the 
     Commission from any source other than the State, local, or 
     intergovernmental department or agency from which the person 
     was detailed to the Commission.
       ``(2) Violation.--Any person that violates this subsection 
     shall be fined under title 18, imprisoned not more than 1 
     year, or both.
       ``(d) Federal Cochairman, Alternate to Federal Cochairman, 
     and Federal Officers and Employees.--The Federal Cochairman, 
     the alternate to the Federal Cochairman, and any Federal 
     officer or employee detailed to duty with the Commission are 
     not subject to this section but remain subject to sections 
     202 through 209 of title 18.
       ``(e) Rescission.--A Commission may declare void any 
     contract, loan, or grant of or by the Commission in relation 
     to which the Commission determines that there has been a 
     violation of any provision under subsection (a)(1), (b), or 
     (c), or any of the provisions of sections 202 through 209 of 
     title 18.

     ``Sec. 15307. Tribal participation

       ``Governments of Indian tribes in the region of the 
     Southwest Border Regional Commission shall be allowed to 
     participate in matters before that Commission in the same 
     manner and to the same extent as State agencies and 
     instrumentalities in the region.

     ``Sec. 15308. Annual report

       ``(a) In General.--Not later than 90 days after the last 
     day of each fiscal year, each Commission shall submit to the 
     President and Congress a report on the activities carried out 
     by the Commission under this subtitle in the fiscal year.
       ``(b) Contents.--The report shall include--
       ``(1) a description of the criteria used by the Commission 
     to designate counties under section

[[Page H3559]]

     15702 and a list of the counties designated in each category;
       ``(2) an evaluation of the progress of the Commission in 
     meeting the goals identified in the Commission's economic and 
     infrastructure development plan under section 15303 and State 
     economic and infrastructure development plans under section 
     15502; and
       ``(3) any policy recommendations approved by the 
     Commission.

                   ``CHAPTER 3--FINANCIAL ASSISTANCE

``Sec.
``15501. Economic and infrastructure development grants.
``15502. Comprehensive economic and infrastructure development plans.
``15503. Approval of applications for assistance.
``15504. Program development criteria.
``15505. Local development districts and organizations.
``15506. Supplements to Federal grant programs.

     ``Sec. 15501. Economic and infrastructure development grants

       ``(a) In General.--A Commission may make grants to States 
     and local governments, Indian tribes, and public and 
     nonprofit organizations for projects, approved in accordance 
     with section 15503--
       ``(1) to develop the transportation infrastructure of its 
     region;
       ``(2) to develop the basic public infrastructure of its 
     region;
       ``(3) to develop the telecommunications infrastructure of 
     its region;
       ``(4) to assist its region in obtaining job skills 
     training, skills development and employment-related 
     education, entrepreneurship, technology, and business 
     development;
       ``(5) to provide assistance to severely economically 
     distressed and underdeveloped areas of its region that lack 
     financial resources for improving basic health care and other 
     public services;
       ``(6) to promote resource conservation, tourism, 
     recreation, and preservation of open space in a manner 
     consistent with economic development goals;
       ``(7) to promote the development of renewable and 
     alternative energy sources; and
       ``(8) to otherwise achieve the purposes of this subtitle.
       ``(b) Allocation of Funds.--A Commission shall allocate at 
     least 40 percent of any grant amounts provided by the 
     Commission in a fiscal year for projects described in 
     paragraphs (1) through (3) of subsection (a).
       ``(c) Sources of Grants.--Grant amounts may be provided 
     entirely from appropriations to carry out this subtitle, in 
     combination with amounts available under other Federal grant 
     programs, or from any other source.
       ``(d) Maximum Commission Contributions.--
       ``(1) In general.--Subject to paragraphs (2) and (3), the 
     Commission may contribute not more than 50 percent of a 
     project or activity cost eligible for financial assistance 
     under this section from amounts appropriated to carry out 
     this subtitle.
       ``(2) Distressed counties.--The maximum Commission 
     contribution for a project or activity to be carried out in a 
     county for which a distressed county designation is in effect 
     under section 15702 may be increased to 80 percent.
       ``(3) Special rule for regional projects.--A Commission may 
     increase to 60 percent under paragraph (1) and 90 percent 
     under paragraph (2) the maximum Commission contribution for a 
     project or activity if--
       ``(A) the project or activity involves 3 or more counties 
     or more than one State; and
       ``(B) the Commission determines in accordance with section 
     15302(a) that the project or activity will bring significant 
     interstate or multicounty benefits to a region.
       ``(e) Maintenance of Effort.--Funds may be provided by a 
     Commission for a program or project in a State under this 
     section only if the Commission determines that the level of 
     Federal or State financial assistance provided under a law 
     other than this subtitle, for the same type of program or 
     project in the same area of the State within region, will not 
     be reduced as a result of funds made available by this 
     subtitle.
       ``(f) No Relocation Assistance.--Financial assistance 
     authorized by this section may not be used to assist a person 
     or entity in relocating from one area to another.

     ``Sec. 15502. Comprehensive economic and infrastructure 
       development plans

       ``(a) State Plans.--In accordance with policies established 
     by a Commission, each State member of the Commission shall 
     submit a comprehensive economic and infrastructure 
     development plan for the area of the region represented by 
     the State member.
       ``(b) Content of Plan.--A State economic and infrastructure 
     development plan shall reflect the goals, objectives, and 
     priorities identified in any applicable economic and 
     infrastructure development plan developed by a Commission 
     under section 15303.
       ``(c) Consultation With Interested Local Parties.--In 
     carrying out the development planning process (including the 
     selection of programs and projects for assistance), a State 
     shall--
       ``(1) consult with local development districts, local units 
     of government, and local colleges and universities; and
       ``(2) take into consideration the goals, objectives, 
     priorities, and recommendations of the entities described in 
     paragraph (1).
       ``(d) Public Participation.--
       ``(1) In general.--A Commission and applicable State and 
     local development districts shall encourage and assist, to 
     the maximum extent practicable, public participation in the 
     development, revision, and implementation of all plans and 
     programs under this subtitle.
       ``(2) Guidelines.--A Commission shall develop guidelines 
     for providing public participation, including public 
     hearings.

     ``Sec. 15503. Approval of applications for assistance

       ``(a) Evaluation by State Member.--An application to a 
     Commission for a grant or any other assistance for a project 
     under this subtitle shall be made through, and evaluated for 
     approval by, the State member of the Commission representing 
     the applicant.
       ``(b) Certification.--An application to a Commission for a 
     grant or other assistance for a project under this subtitle 
     shall be eligible for assistance only on certification by the 
     State member of the Commission representing the applicant 
     that the application for the project--
       ``(1) describes ways in which the project complies with any 
     applicable State economic and infrastructure development 
     plan;
       ``(2) meets applicable criteria under section 15504;
       ``(3) adequately ensures that the project will be properly 
     administered, operated, and maintained; and
       ``(4) otherwise meets the requirements for assistance under 
     this subtitle.
       ``(c) Votes for Decisions.--On certification by a State 
     member of a Commission of an application for a grant or other 
     assistance for a specific project under this section, an 
     affirmative vote of the Commission under section 15302 shall 
     be required for approval of the application.

     ``Sec. 15504. Program development criteria

       ``In considering programs and projects to be provided 
     assistance by a Commission under this subtitle, and in 
     establishing a priority ranking of the requests for 
     assistance provided to the Commission, the Commission shall 
     follow procedures that ensure, to the maximum extent 
     practicable, consideration of--
       ``(1) the relationship of the project or class of projects 
     to overall regional development;
       ``(2) the per capita income and poverty and unemployment 
     and outmigration rates in an area;
       ``(3) the financial resources available to the applicants 
     for assistance seeking to carry out the project, with 
     emphasis on ensuring that projects are adequately financed to 
     maximize the probability of successful economic development;
       ``(4) the importance of the project or class of projects in 
     relation to the other projects or classes of projects that 
     may be in competition for the same funds;
       ``(5) the prospects that the project for which assistance 
     is sought will improve, on a continuing rather than a 
     temporary basis, the opportunities for employment, the 
     average level of income, or the economic development of the 
     area to be served by the project; and
       ``(6) the extent to which the project design provides for 
     detailed outcome measurements by which grant expenditures and 
     the results of the expenditures may be evaluated.

     ``Sec. 15505. Local development districts and organizations

       ``(a) Grants to Local Development Districts.--Subject to 
     the requirements of this section, a Commission may make 
     grants to a local development district to assist in the 
     payment of development planning and administrative expenses.
       ``(b) Conditions for Grants.--
       ``(1) Maximum amount.--The amount of a grant awarded under 
     this section may not exceed 80 percent of the administrative 
     and planning expenses of the local development district 
     receiving the grant.
       ``(2) Maximum period for state agencies.--In the case of a 
     State agency certified as a local development district, a 
     grant may not be awarded to the agency under this section for 
     more than 3 fiscal years.
       ``(3) Local share.--The contributions of a local 
     development district for administrative expenses may be in 
     cash or in kind, fairly evaluated, including space, 
     equipment, and services.
       ``(c) Duties of Local Development Districts.--A local 
     development district shall--
       ``(1) operate as a lead organization serving multicounty 
     areas in the region at the local level;
       ``(2) assist the Commission in carrying out outreach 
     activities for local governments, community development 
     groups, the business community, and the public;
       ``(3) serve as a liaison between State and local 
     governments, nonprofit organizations (including community-
     based groups and educational institutions), the business 
     community, and citizens; and
       ``(4) assist the individuals and entities described in 
     paragraph (3) in identifying, assessing, and facilitating 
     projects and programs to promote the economic development of 
     the region.

     ``Sec. 15506. Supplements to Federal grant programs

       ``(a) Finding.--Congress finds that certain States and 
     local communities of the region, including local development 
     districts, may be unable to take maximum advantage of Federal 
     grant programs for which the States and communities are 
     eligible because--
       ``(1) they lack the economic resources to provide the 
     required matching share; or
       ``(2) there are insufficient funds available under the 
     applicable Federal law with respect to a project to be 
     carried out in the region.
       ``(b) Federal Grant Program Funding.--A Commission, with 
     the approval of the Federal Cochairperson, may use amounts 
     made available to carry out this subtitle--
       ``(1) for any part of the basic Federal contribution to 
     projects or activities under the Federal grant programs 
     authorized by Federal laws; and
       ``(2) to increase the Federal contribution to projects and 
     activities under the programs above the fixed maximum part of 
     the cost of the projects or activities otherwise authorized 
     by the applicable law.

[[Page H3560]]

       ``(c) Certification Required.--For a program, project, or 
     activity for which any part of the basic Federal contribution 
     to the project or activity under a Federal grant program is 
     proposed to be made under subsection (b), the Federal 
     contribution shall not be made until the responsible Federal 
     official administering the Federal law authorizing the 
     Federal contribution certifies that the program, project, or 
     activity meets the applicable requirements of the Federal law 
     and could be approved for Federal contribution under that law 
     if amounts were available under the law for the program, 
     project, or activity.
       ``(d) Limitations in Other Laws Inapplicable.--Amounts 
     provided pursuant to this subtitle are available without 
     regard to any limitations on areas eligible for assistance or 
     authorizations for appropriation in any other law.
       ``(e) Federal Share.--The Federal share of the cost of a 
     project or activity receiving assistance under this section 
     shall not exceed 80 percent.
       ``(f) Maximum Commission Contribution.--Section 15501(d), 
     relating to limitations on Commission contributions, shall 
     apply to a program, project, or activity receiving assistance 
     under this section.

                 ``CHAPTER 4--ADMINISTRATIVE PROVISIONS

                   ``subchapter i--general provisions

``Sec. 15701. Consent of States.
``Sec. 15702. Distressed counties and areas.
``Sec. 15703. Counties eligible for assistance in more than one region.
``Sec. 15704. Inspector General; records.
``Sec. 15705. Biannual meetings of representatives of all Commissions.

                 ``subchapter ii--designation of regions

``Sec. 15731. Southeast Crescent Regional Commission.
``Sec. 15732. Southwest Border Regional Commission.
``Sec. 15733. Northern Border Regional Commission.

            ``subchapter iii--authorization of appropriations

``Sec. 15751. Authorization of appropriations.

                   ``SUBCHAPTER I--GENERAL PROVISIONS

     ``Sec. 15701. Consent of States

       ``This subtitle does not require a State to engage in or 
     accept a program under this subtitle without its consent.

     ``Sec. 15702. Distressed counties and areas

       ``(a) Designations.--Not later than 90 days after the date 
     of the enactment of this section, and annually thereafter, 
     each Commission shall make the following designations:
       ``(1) Distressed counties.--The Commission shall designate 
     as distressed counties those counties in its region that are 
     the most severely and persistently economically distressed 
     and underdeveloped and have high rates of poverty, 
     unemployment, or outmigration.
       ``(2) Transitional counties.--The Commission shall 
     designate as transitional counties those counties in its 
     region that are economically distressed and underdeveloped or 
     have recently suffered high rates of poverty, unemployment, 
     or outmigration.
       ``(3) Attainment counties.--The Commission shall designate 
     as attainment counties, those counties in its region that are 
     not designated as distressed or transitional counties under 
     this subsection.
       ``(4) Isolated areas of distress.--The Commission shall 
     designate as isolated areas of distress, areas located in 
     counties designated as attainment counties under paragraph 
     (3) that have high rates of poverty, unemployment, or 
     outmigration.
       ``(b) Allocation.--A Commission shall allocate at least 50 
     percent of the appropriations made available to the 
     Commission to carry out this subtitle for programs and 
     projects designed to serve the needs of distressed counties 
     and isolated areas of distress in the region.
       ``(c) Attainment Counties.--
       ``(1) In general.--Except as provided in paragraph (2), 
     funds may not be provided under this subtitle for a project 
     located in a county designated as an attainment county under 
     subsection (a).
       ``(2) Exceptions.--
       ``(A) Administrative expenses of local development 
     districts.--The funding prohibition under paragraph (1) shall 
     not apply to grants to fund the administrative expenses of 
     local development districts under section 15505.
       ``(B) Multicounty and other projects.--A Commission may 
     waive the application of the funding prohibition under 
     paragraph (1) with respect to--
       ``(i) a multicounty project that includes participation by 
     an attainment county; and
       ``(ii) any other type of project, if a Commission 
     determines that the project could bring significant benefits 
     to areas of the region outside an attainment county.
       ``(3) Isolated areas of distress.--For a designation of an 
     isolated area of distress to be effective, the designation 
     shall be supported--
       ``(A) by the most recent Federal data available; or
       ``(B) if no recent Federal data are available, by the most 
     recent data available through the government of the State in 
     which the isolated area of distress is located.

     ``Sec. 15703. Counties eligible for assistance in more than 
       one region

       ``(a) Limitation.--A political subdivision of a State may 
     not receive assistance under this subtitle in a fiscal year 
     from more than one Commission.
       ``(b) Selection of Commission.--A political subdivision 
     included in the region of more than one Commission shall 
     select the Commission with which it will participate by 
     notifying, in writing, the Federal Cochairperson and the 
     appropriate State member of that Commission.
       ``(c) Changes in Selections.--The selection of a Commission 
     by a political subdivision shall apply in the fiscal year in 
     which the selection is made, and shall apply in each 
     subsequent fiscal year unless the political subdivision, at 
     least 90 days before the first day of the fiscal year, 
     notifies the Cochairpersons of another Commission in writing 
     that the political subdivision will participate in that 
     Commission and also transmits a copy of such notification to 
     the Cochairpersons of the Commission in which the political 
     subdivision is currently participating.
       ``(d) Inclusion of Appalachian Regional Commission.--In 
     this section, the term `Commission' includes the Appalachian 
     Regional Commission established under chapter 143.

     ``Sec. 15704. Inspector General; records

       ``(a) Appointment of Inspector General.--There shall be an 
     Inspector General for the Commissions appointed in accordance 
     with section 3(a) of the Inspector General Act of 1978 (5 
     U.S.C. App.). All of the Commissions shall be subject to a 
     single Inspector General.
       ``(b) Records of a Commission.--
       ``(1) In general.--A Commission shall maintain accurate and 
     complete records of all its transactions and activities.
       ``(2) Availability.--All records of a Commission shall be 
     available for audit and examination by the Inspector General 
     (including authorized representatives of the Inspector 
     General).
       ``(c) Records of Recipients of Commission Assistance.--
       ``(1) In general.--A recipient of funds from a Commission 
     under this subtitle shall maintain accurate and complete 
     records of transactions and activities financed with the 
     funds and report to the Commission on the transactions and 
     activities.
       ``(2) Availability.--All records required under paragraph 
     (1) shall be available for audit by the Commission and the 
     Inspector General (including authorized representatives of 
     the Commission and the Inspector General).
       ``(d) Annual Audit.--The Inspector General shall audit the 
     activities, transactions, and records of each Commission on 
     an annual basis.

     ``Sec. 15705. Biannual meetings of representatives of all 
       Commissions

       ``(a) In General.--Representatives of each Commission, the 
     Appalachian Regional Commission, and the Denali Commission 
     shall meet biannually to discuss issues confronting regions 
     suffering from chronic and contiguous distress and successful 
     strategies for promoting regional development.
       ``(b) Chair of Meetings.--The chair of each meeting shall 
     rotate among the Commissions, with the Appalachian Regional 
     Commission to host the first meeting.

                ``SUBCHAPTER II--DESIGNATION OF REGIONS

     ``Sec. 15731. Southeast Crescent Regional Commission

       ``The region of the Southeast Crescent Regional Commission 
     shall consist of all counties of the States of Virginia, 
     North Carolina, South Carolina, Georgia, Alabama, 
     Mississippi, and Florida not already served by the 
     Appalachian Regional Commission or the Delta Regional 
     Authority.

     ``Sec. 15732. Southwest Border Regional Commission

       ``The region of the Southwest Border Regional Commission 
     shall consist of the following political subdivisions:
       ``(1) Arizona.--The counties of Cochise, Gila, Graham, 
     Greenlee, La Paz, Maricopa, Pima, Pinal, Santa Cruz, and Yuma 
     in the State of Arizona.
       ``(2) California.--The counties of Imperial, Los Angeles, 
     Orange, Riverside, San Bernardino, San Diego, and Ventura in 
     the State of California.
       ``(3) New mexico.--The counties of Catron, Chaves, Dona 
     Ana, Eddy, Grant, Hidalgo, Lincoln, Luna, Otero, Sierra, and 
     Socorro in the State of New Mexico.
       ``(4) Texas.--The counties of Atascosa, Bandera, Bee, 
     Bexar, Brewster, Brooks, Cameron, Coke, Concho, Crane, 
     Crockett, Culberson, Dimmit, Duval, Ector, Edwards, El Paso, 
     Frio, Gillespie, Glasscock, Hidalgo, Hudspeth, Irion, Jeff 
     Davis, Jim Hogg, Jim Wells, Karnes, Kendall, Kenedy, Kerr, 
     Kimble, Kinney, Kleberg, La Salle, Live Oak, Loving, Mason, 
     Maverick, McMullen, Medina, Menard, Midland, Nueces, Pecos, 
     Presidio, Reagan, Real, Reeves, San Patricio, Shleicher, 
     Sutton, Starr, Sterling, Terrell, Tom Green Upton, Uvalde, 
     Val Verde, Ward, Webb, Willacy, Wilson, Winkler, Zapata, and 
     Zavala in the State of Texas.

     ``Sec. 15733. Northern Border Regional Commission

       ``The region of the Northern Border Regional Commission 
     shall include the following counties:
       ``(1) Maine.--The counties of Androscoggin, Aroostook, 
     Franklin, Hancock, Kennebec, Knox, Oxford, Penobscot, 
     Piscataquis, Somerset, Waldo, and Washington in the State of 
     Maine.
       ``(2) New hampshire.--The counties of Carroll, Coos, 
     Grafton, and Sullivan in the State of New Hampshire.
       ``(3) New york.--The counties of Cayuga, Clinton, Essex, 
     Franklin, Fulton, Hamilton, Herkimer, Jefferson, Lewis, 
     Madison, Oneida, Oswego, Seneca, and St. Lawrence in the 
     State of New York.
       ``(4) Vermont.--The counties of Caledonia, Essex, Franklin, 
     Grand Isle, Lamoille, and Orleans in the State of Vermont.

           ``SUBCHAPTER III--AUTHORIZATION OF APPROPRIATIONS

     ``Sec. 15751. Authorization of appropriations

       ``(a) In General.--There is authorized to be appropriated 
     to each Commission to carry out this subtitle $30,000,000 for 
     each of fiscal years 2008 through 2012.

[[Page H3561]]

       ``(b) Administrative Expenses.--Not more than 10 percent of 
     the funds made available to a Commission in a fiscal year 
     under this section may be used for administrative 
     expenses.''.
       (b) Clerical Amendment to Table of Subtitles.--The table of 
     subtitles for chapter 40, United States Code, is amended by 
     striking the item relating to subtitle V and inserting the 
     following:

``V. REGIONAL ECONOMIC AND INFRASTRUCTURE DEVELOPMENT........15101 ....

``VI. MISCELLANEOUS........................................17101''.....

       (c) Conforming Amendments to Inspector General Act.--
     Section 11 of the Inspector General Act of 1978 (5 U.S.C. 
     App.) is amended--
       (1) in paragraph (1), by striking ``or the President of the 
     Export-Import Bank;'' and inserting ``the President of the 
     Export-Import Bank; or the Federal Cochairpersons of the 
     Commissions established under section 15301 of title 40, 
     United States Code;''; and
       (2) in paragraph (2), by striking ``or the Export-Import 
     Bank,'' and inserting ``the Export-Import Bank, or the 
     Commissions established under section 15301 of title 40, 
     United States Code,''.
       (d) Effective Date.--This section, and the amendments made 
     by this section, shall take effect on the first day of the 
     first fiscal year beginning after the date of the enactment 
     of this Act.

     SEC. 14218. COORDINATOR FOR CHRONICALLY UNDERSERVED RURAL 
                   AREAS.

       (a) Establishment.--The Secretary of Agriculture shall 
     establish a Coordinator for Chronically Underserved Rural 
     Areas (in this section referred to as the ``Coordinator''), 
     to be located in the Rural Development Mission Area.
       (b) Mission.--The mission of the Coordinator shall be to 
     direct Department of Agriculture resources to high need, high 
     poverty rural areas.
       (c) Duties.--The Coordinator shall consult with other 
     offices in directing technical assistance, strategic regional 
     planning, at the State and local level, for developing rural 
     economic development that leverages the resources of State 
     and local governments and non-profit and community 
     development organizations.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary such sums as necessary to 
     carry out this section for fiscal years 2008 through 2012.

     SEC. 14219. ELIMINATION OF STATUTE OF LIMITATIONS APPLICABLE 
                   TO COLLECTION OF DEBT BY ADMINISTRATIVE OFFSET.

       (a) Elimination.--Section 3716(e) of title 31, United 
     States Code, is amended to read as follows:
       ``(e)(1) Notwithstanding any other provision of law, 
     regulation, or administrative limitation, no limitation on 
     the period within which an offset may be initiated or taken 
     pursuant to this section shall be effective.
       ``(2) This section does not apply when a statute explicitly 
     prohibits using administrative offset or setoff to collect 
     the claim or type of claim involved.''.
       (b) Application of Amendment.--The amendment made by 
     subsection (a) shall apply to any debt outstanding on or 
     after the date of the enactment of this Act.

     SEC. 14220. AVAILABILITY OF EXCESS AND SURPLUS COMPUTERS IN 
                   RURAL AREAS.

       In addition to any other authority, the Secretary of 
     Agriculture may make available to an organization excess or 
     surplus computers or other technical equipment of the 
     Department of Agriculture for the purposes of distribution to 
     a city, town, or local government entity in a rural area (as 
     defined in section 343(a)(13)(A) of the Consolidated Farm and 
     Rural Development Act).

     SEC. 14221. REPEAL OF SECTION 3068 OF THE WATER RESOURCES 
                   DEVELOPMENT ACT OF 2007.

       Effective upon the date of enactment of this Act, section 
     3068 of the Water Resources Development Act of 2007 (Public 
     Law 110-114; 121 Stat. 1123), and the item relating to 
     section 3068 in the table of contents of that Act, are 
     repealed.

     SEC. 14222. DOMESTIC FOOD ASSISTANCE PROGRAMS.

       (a) Definition of Section 32.--In this section, the term 
     ``section 32'' means section 32 of the Act of August 24, 1935 
     (7 U.S.C. 612c).
       (b) Transfer to Food and Nutrition Service.--
       (1) In general.--Amounts made available for a fiscal year 
     to carry out section 32 in excess of the maximum amount 
     calculated under paragraph (2) shall be transferred to the 
     Secretary, acting through the Administrator of the Food and 
     Nutrition Service, to be used to carry out the Richard B. 
     Russell National School Lunch Act (42 U.S.C. 1751 et seq.).
       (2) Maximum amount.--The maximum amount calculated under 
     this paragraph for a fiscal year is the sum of--
       (A)(i) in the case of fiscal year 2009, $1,173,000,000;
       (ii) in the case of fiscal year 2010, $1,199,000,000;
       (iii) in the case of fiscal year 2011, $1,215,000,000;
       (iv) in the case of fiscal year 2012, $1,231,000,000;
       (v) in the case of fiscal year 2013, $1,248,000,000;
       (vi) in the case of fiscal year 2014, $1,266,000,000;
       (vii) in the case of fiscal year 2015, $1,284,000,000;
       (viii) in the case of fiscal year 2016, $1,303,000,000;
       (ix) in the case of fiscal year 2017, $1,322,000,000; and
       (x) for fiscal year 2018 and each fiscal year thereafter, 
     the amount made available for the preceding fiscal year, as 
     adjusted to reflect changes for the 12-month period ending on 
     the preceding November 30 in the Consumer Price Index for All 
     Urban Consumers published by the Bureau of Labor Statistics 
     of the Department of Labor; and
       (B) any transfers for the fiscal year from section 32 to 
     the Department of Commerce under the Fish and Wildlife Act of 
     1956 (16 U.S.C. 742a et seq.).
       (c) Fresh Fruit and Vegetable Program.--Of amounts made 
     available to carry out section 32 under subsection (b)(2)(A), 
     the Secretary shall transfer for use to carry out the fresh 
     fruit and vegetable program under section 19 of the Richard 
     B. Russell National School Lunch Act the amounts specified in 
     subsection (i) of that section.
       (d) Whole Grain Products.--Of amounts made available to 
     carry out section 32 under subsection (b)(2)(A), the 
     Secretary shall use to carry out section 4305 $4,000,000 for 
     fiscal year 2009.
       (e) Maintenance of Funding.--The funding provided under 
     subsections (c) and (d) shall supplement (and not supplant) 
     other Federal funding (including section 32 funding) for 
     programs carried out under--
       (1) the Richard B. Russell National School Lunch Act (42 
     U.S.C. 1751 et seq.), except for section 19 of that Act;
       (2) the Emergency Food Assistance Act of 1983 (7 U.S.C. 
     7501 et seq.); and
       (3) section 27 of the Food Stamp Act of 1977 (7 U.S.C. 
     2036).

     SEC. 14223. TECHNICAL CORRECTION.

       Section 923(1)(B) of the Federal Agriculture Improvement 
     and Reform Act of 1996 (7 U.S.C. 2206a(1)(B)) is amended by 
     striking ``as defined in section 316(b) of the Higher 
     Education Act of 1965 (20 U.S.C. 1059c(b))'' and inserting 
     ``as defined in section 502(a)(5) of the Higher Education Act 
     of 1965 (20 U.S.C. 1101a(a)(5))''.

                   TITLE XV--TRADE AND TAX PROVISIONS

     SEC. 15001. SHORT TITLE; ETC.

       (a) Short Title.--This title may be cited as the 
     ``Heartland, Habitat, Harvest, and Horticulture Act of 
     2008''.
       (b) Amendments to 1986 Code.--Except as otherwise expressly 
     provided, whenever in this title an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.

  Subtitle A--Supplemental Agricultural Disaster Assistance From the 
                Agricultural Disaster Relief Trust Fund

     SEC. 15101. SUPPLEMENTAL AGRICULTURAL DISASTER ASSISTANCE.

       (a) In General.--The Trade Act of 1974 (19 U.S.C. 2101 et 
     seq.) is amended by adding at the end the following:

       ``TITLE IX--SUPPLEMENTAL AGRICULTURAL DISASTER ASSISTANCE

     ``SEC. 901. SUPPLEMENTAL AGRICULTURAL DISASTER ASSISTANCE.

       ``(a) Definitions.--In this section:
       ``(1) Actual production history yield.--The term `actual 
     production history yield' means the weighted average of the 
     actual production history for each insurable commodity or 
     noninsurable commodity, as calculated under the Federal Crop 
     Insurance Act (7 U.S.C. 1501 et seq.) or the noninsured crop 
     disaster assistance program, respectively.
       ``(2) Adjusted actual production history yield.--The term 
     `adjusted actual production history yield' means--
       ``(A) in the case of an eligible producer on a farm that 
     has at least 4 years of actual production history yields for 
     an insurable commodity that are established other than 
     pursuant to section 508(g)(4)(B) of the Federal Crop 
     Insurance Act (7 U.S.C. 1508(g)(4)(B)), the actual production 
     history for the eligible producer without regard to any 
     yields established under that section;
       ``(B) in the case of an eligible producer on a farm that 
     has less than 4 years of actual production history yields for 
     an insurable commodity, of which 1 or more were established 
     pursuant to section 508(g)(4)(B) of that Act, the actual 
     production history for the eligible producer as calculated 
     without including the lowest of the yields established 
     pursuant to section 508(g)(4)(B) of that Act; and
       ``(C) in all other cases, the actual production history of 
     the eligible producer on a farm.
       ``(3) Adjusted noninsured crop disaster assistance program 
     yield.--The term `adjusted noninsured crop disaster 
     assistance program yield' means--
       ``(A) in the case of an eligible producer on a farm that 
     has at least 4 years of production history under the 
     noninsured crop disaster assistance program that are not 
     replacement yields, the noninsured crop disaster assistance 
     program yield without regard to any replacement yields;
       ``(B) in the case of an eligible producer on a farm that 
     less than 4 years of production history under the noninsured 
     crop disaster assistance program that are not replacement 
     yields, the noninsured crop disaster assistance program yield 
     as calculated without including the lowest of the replacement 
     yields; and
       ``(C) in all other cases, the production history of the 
     eligible producer on the farm under the noninsured crop 
     disaster assistance program.
       ``(4) Counter-cyclical program payment yield.--The term 
     `counter-cyclical program payment yield' means the weighted 
     average payment yield established under section 1102 of the 
     Farm Security and Rural Investment Act of 2002 (7 U.S.C. 
     7912), section 1102 of the Food, Conservation, and Energy Act 
     of 2008, or a successor section.
       ``(5) Disaster county.--
       ``(A) In general.--The term `disaster county' means a 
     county included in the geographic area

[[Page H3562]]

     covered by a qualifying natural disaster declaration.
       ``(B) Inclusion.--The term `disaster county' includes--
       ``(i) a county contiguous to a county described in 
     subparagraph (A); and
       ``(ii) any farm in which, during a calendar year, the total 
     loss of production of the farm relating to weather is greater 
     than 50 percent of the normal production of the farm, as 
     determined by the Secretary.
       ``(6) Eligible producer on a farm.--
       ``(A) In general.--The term `eligible producer on a farm' 
     means an individual or entity described in subparagraph (B) 
     that, as determined by the Secretary, assumes the production 
     and market risks associated with the agricultural production 
     of crops or livestock.
       ``(B) Description.--An individual or entity referred to in 
     subparagraph (A) is--
       ``(i) a citizen of the United States;
       ``(ii) a resident alien;
       ``(iii) a partnership of citizens of the United States; or
       ``(iv) a corporation, limited liability corporation, or 
     other farm organizational structure organized under State 
     law.
       ``(7) Farm.--
       ``(A) In general.--The term `farm' means, in relation to an 
     eligible producer on a farm, the sum of all crop acreage in 
     all counties that is planted or intended to be planted for 
     harvest by the eligible producer.
       ``(B) Aquaculture.--In the case of aquaculture, the term 
     `farm' means, in relation to an eligible producer on a farm, 
     all fish being produced in all counties that are intended to 
     be harvested for sale by the eligible producer.
       ``(C) Honey.--In the case of honey, the term `farm' means, 
     in relation to an eligible producer on a farm, all bees and 
     beehives in all counties that are intended to be harvested 
     for a honey crop by the eligible producer.
       ``(8) Farm-raised fish.--The term `farm-raised fish' means 
     any aquatic species that is propagated and reared in a 
     controlled environment.
       ``(9) Insurable commodity.--The term `insurable commodity' 
     means an agricultural commodity (excluding livestock) for 
     which the producer on a farm is eligible to obtain a policy 
     or plan of insurance under the Federal Crop Insurance Act (7 
     U.S.C. 1501 et seq.).
       ``(10) Livestock.--The term `livestock' includes--
       ``(A) cattle (including dairy cattle);
       ``(B) bison;
       ``(C) poultry;
       ``(D) sheep;
       ``(E) swine;
       ``(F) horses; and
       ``(G) other livestock, as determined by the Secretary.
       ``(11) Noninsurable commodity.--The term `noninsurable 
     commodity' means a crop for which the eligible producers on a 
     farm are eligible to obtain assistance under the noninsured 
     crop assistance program.
       ``(12) Noninsured crop assistance program.--The term 
     `noninsured crop assistance program' means the program 
     carried out under section 196 of the Federal Agriculture 
     Improvement and Reform Act of 1996 (7 U.S.C. 7333).
       ``(13) Qualifying natural disaster declaration.--The term 
     `qualifying natural disaster declaration' means a natural 
     disaster declared by the Secretary for production losses 
     under section 321(a) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 1961(a)).
       ``(14) Secretary.--The term `Secretary' means the Secretary 
     of Agriculture.
       ``(15) Socially disadvantaged farmer or rancher.--The term 
     `socially disadvantaged farmer or rancher' has the meaning 
     given the term in section 2501(e) of the Food, Agriculture, 
     Conservation, and Trade Act of 1990 (7 U.S.C. 2279(e)).
       ``(16) State.--The term `State' means--
       ``(A) a State;
       ``(B) the District of Columbia;
       ``(C) the Commonwealth of Puerto Rico; and
       ``(D) any other territory or possession of the United 
     States.
       ``(17) Trust fund.--The term `Trust Fund' means the 
     Agricultural Disaster Relief Trust Fund established under 
     section 902.
       ``(18) United states.--The term `United States' when used 
     in a geographical sense, means all of the States.
       ``(b) Supplemental Revenue Assistance Payments.--
       ``(1) In general.--The Secretary shall use such sums as are 
     necessary from the Trust Fund to make crop disaster 
     assistance payments to eligible producers on farms in 
     disaster counties that have incurred crop production losses 
     or crop quality losses, or both, during the crop year.
       ``(2) Amount.--
       ``(A) In general.--Subject to subparagraph (B), the 
     Secretary shall provide crop disaster assistance payments 
     under this section to an eligible producer on a farm in an 
     amount equal to 60 percent of the difference between--
       ``(i) the disaster assistance program guarantee, as 
     described in paragraph (3); and
       ``(ii) the total farm revenue for a farm, as described in 
     paragraph (4).
       ``(B) Limitation.--The disaster assistance program 
     guarantee for a crop used to calculate the payments for a 
     farm under subparagraph (A)(i) may not be greater than 90 
     percent of the sum of the expected revenue, as described in 
     paragraph (5) for each of the crops on a farm, as determined 
     by the Secretary.
       ``(3) Supplemental revenue assistance program guarantee.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, the supplemental assistance program guarantee 
     shall be the sum obtained by adding--
       ``(i) for each insurable commodity on the farm, 115 percent 
     of the product obtained by multiplying--

       ``(I) a payment rate for the commodity that is equal to the 
     price election for the commodity elected by the eligible 
     producer;
       ``(II) the payment acres for the commodity that is equal to 
     the number of acres planted, or prevented from being planted, 
     to the commodity;
       ``(III) the payment yield for the commodity that is equal 
     to the percentage of the crop insurance yield elected by the 
     producer of the higher of--

       ``(aa) the adjusted actual production history yield; or
       ``(bb) the counter-cyclical program payment yield for each 
     crop; and
       ``(ii) for each noninsurable commodity on a farm, 120 
     percent of the product obtained by multiplying--

       ``(I) a payment rate for the commodity that is equal to 100 
     percent of the noninsured crop assistance program established 
     price for the commodity;
       ``(II) the payment acres for the commodity that is equal to 
     the number of acres planted, or prevented from being planted, 
     to the commodity; and
       ``(III) the payment yield for the commodity that is equal 
     to the higher of--

       ``(aa) the adjusted noninsured crop assistance program 
     yield guarantee; or
       ``(bb) the counter-cyclical program payment yield for each 
     crop.
       ``(B) Adjustment insurance guarantee.--Notwithstanding 
     subparagraph (A), in the case of an insurable commodity for 
     which a plan of insurance provides for an adjustment in the 
     guarantee, such as in the case of prevented planting, the 
     adjusted insurance guarantee shall be the basis for 
     determining the disaster assistance program guarantee for the 
     insurable commodity.
       ``(C) Adjusted assistance level.--Notwithstanding 
     subparagraph (A), in the case of a noninsurable commodity for 
     which the noninsured crop assistance program provides for an 
     adjustment in the level of assistance, such as in the case of 
     unharvested crops, the adjusted assistance level shall be the 
     basis for determining the disaster assistance program 
     guarantee for the noninsurable commodity.
       ``(D) Equitable treatment for non-yield based policies.--
     The Secretary shall establish equitable treatment for non-
     yield based policies and plans of insurance, such as the 
     Adjusted Gross Revenue Lite insurance program.
       ``(4) Farm revenue.--
       ``(A) In general.--For purposes of this subsection, the 
     total farm revenue for a farm, shall equal the sum obtained 
     by adding--
       ``(i) the estimated actual value for each crop produced on 
     a farm by using the product obtained by multiplying--

       ``(I) the actual crop acreage harvested by an eligible 
     producer on a farm;
       ``(II) the estimated actual yield of the crop production; 
     and
       ``(III) subject to subparagraphs (B) and (C), to the extent 
     practicable, the national average market price received for 
     the marketing year, as determined by the Secretary;

       ``(ii) 15 percent of amount of any direct payments made to 
     the producer under sections 1103 and 1303 of the Food, 
     Conservation, and Energy Act of 2008 or successor sections;
       ``(iii) the total amount of any counter-cyclical payments 
     made to the producer under sections 1104 and 1304 of the 
     Food, Conservation, and Energy Act of 2008 or successor 
     sections or of any average crop revenue election payments 
     made to the producer under section 1105 of that Act;
       ``(iv) the total amount of any loan deficiency payments, 
     marketing loan gains, and marketing certificate gains made to 
     the producer under subtitles B and C of the Food, 
     Conservation, and Energy Act of 2008 or successor subtitles;
       ``(v) the amount of payments for prevented planting on a 
     farm;
       ``(vi) the amount of crop insurance indemnities received by 
     an eligible producer on a farm for each crop on a farm;
       ``(vii) the amount of payments an eligible producer on a 
     farm received under the noninsured crop assistance program 
     for each crop on a farm; and
       ``(viii) the value of any other natural disaster assistance 
     payments provided by the Federal Government to an eligible 
     producer on a farm for each crop on a farm for the same loss 
     for which the eligible producer is seeking assistance.
       ``(B) Adjustment.--The Secretary shall adjust the average 
     market price received by the eligible producer on a farm--
       ``(i) to reflect the average quality discounts applied to 
     the local or regional market price of a crop or mechanically 
     harvested forage due to a reduction in the intrinsic 
     characteristics of the production resulting from adverse 
     weather, as determined annually by the State office of the 
     Farm Service Agency; and
       ``(ii) to account for a crop the value of which is reduced 
     due to excess moisture resulting from a disaster-related 
     condition.
       ``(C) Maximum amount for certain crops.--With respect to a 
     crop for which an eligible producer on a farm receives 
     assistance under the noninsured crop assistance program, the 
     national average market price received during the marketing 
     year shall be an amount not more than 100 percent of the 
     price of the crop established under the noninsured crop 
     assistance program.
       ``(5) Expected revenue.--The expected revenue for each crop 
     on a farm shall equal the sum obtained by adding--
       ``(A) the product obtained by multiplying--
       ``(i) the greatest of--

       ``(I) the adjusted actual production history yield of the 
     eligible producer on a farm; and
       ``(II) the counter-cyclical program payment yield;

[[Page H3563]]

       ``(ii) the acreage planted or prevented from being planted 
     for each crop; and
       ``(iii) 100 percent of the insurance price guarantee; and
       ``(B) the product obtained by multiplying--
       ``(i) 100 percent of the adjusted noninsured crop 
     assistance program yield; and
       ``(ii) 100 percent of the noninsured crop assistance 
     program price for each of the crops on a farm.
       ``(c) Livestock Indemnity Payments.--
       ``(1) Payments.--The Secretary shall use such sums as are 
     necessary from the Trust Fund to make livestock indemnity 
     payments to eligible producers on farms that have incurred 
     livestock death losses in excess of the normal mortality due 
     to adverse weather, as determined by the Secretary, during 
     the calendar year, including losses due to hurricanes, 
     floods, blizzards, disease, wildfires, extreme heat, and 
     extreme cold.
       ``(2) Payment rates.--Indemnity payments to an eligible 
     producer on a farm under paragraph (1) shall be made at a 
     rate of 75 percent of the market value of the applicable 
     livestock on the day before the date of death of the 
     livestock, as determined by the Secretary.
       ``(d) Livestock Forage Disaster Program.--
       ``(1) Definitions.--In this subsection:
       ``(A) Covered livestock.--
       ``(i) In general.--The term `covered livestock' means 
     livestock of an eligible livestock producer that, during the 
     60 days prior to the beginning date of a qualifying drought 
     or fire condition, as determined by the Secretary, the 
     eligible livestock producer--

       ``(I) owned;
       ``(II) leased;
       ``(III) purchased;
       ``(IV) entered into a contract to purchase;
       ``(V) is a contract grower; or
       ``(VI) sold or otherwise disposed of due to qualifying 
     drought conditions during--

       ``(aa) the current production year; or
       ``(bb) subject to paragraph (3)(B)(ii), 1 or both of the 2 
     production years immediately preceding the current production 
     year.
       ``(ii) Exclusion.--The term `covered livestock' does not 
     include livestock that were or would have been in a feedlot, 
     on the beginning date of the qualifying drought or fire 
     condition, as a part of the normal business operation of the 
     eligible livestock producer, as determined by the Secretary.
       ``(B) Drought monitor.--The term `drought monitor' means a 
     system for classifying drought severity according to a range 
     of abnormally dry to exceptional drought, as defined by the 
     Secretary.
       ``(C) Eligible livestock producer.--
       ``(i) In general.--The term `eligible livestock producer' 
     means an eligible producer on a farm that--

       ``(I) is an owner, cash or share lessee, or contract grower 
     of covered livestock that provides the pastureland or grazing 
     land, including cash-leased pastureland or grazing land, for 
     the livestock;
       ``(II) provides the pastureland or grazing land for covered 
     livestock, including cash-leased pastureland or grazing land 
     that is physically located in a county affected by drought;
       ``(III) certifies grazing loss; and
       ``(IV) meets all other eligibility requirements established 
     under this subsection.

       ``(ii) Exclusion.--The term `eligible livestock producer' 
     does not include an owner, cash or share lessee, or contract 
     grower of livestock that rents or leases pastureland or 
     grazing land owned by another person on a rate-of-gain basis.
       ``(D) Normal carrying capacity.--The term `normal carrying 
     capacity', with respect to each type of grazing land or 
     pastureland in a county, means the normal carrying capacity, 
     as determined under paragraph (3)(D)(i), that would be 
     expected from the grazing land or pastureland for livestock 
     during the normal grazing period, in the absence of a drought 
     or fire that diminishes the production of the grazing land or 
     pastureland.
       ``(E) Normal grazing period.--The term `normal grazing 
     period', with respect to a county, means the normal grazing 
     period during the calendar year for the county, as determined 
     under paragraph (3)(D)(i).
       ``(2) Program.--The Secretary shall use such sums as are 
     necessary from the Trust Fund to provide compensation for 
     losses to eligible livestock producers due to grazing losses 
     for covered livestock due to--
       ``(A) a drought condition, as described in paragraph (3); 
     or
       ``(B) fire, as described in paragraph (4).
       ``(3) Assistance for losses due to drought conditions.--
       ``(A) Eligible losses.--
       ``(i) In general.--An eligible livestock producer may 
     receive assistance under this subsection only for grazing 
     losses for covered livestock that occur on land that--

       ``(I) is native or improved pastureland with permanent 
     vegetative cover; or
       ``(II) is planted to a crop planted specifically for the 
     purpose of providing grazing for covered livestock.

       ``(ii) Exclusions.--An eligible livestock producer may not 
     receive assistance under this subsection for grazing losses 
     that occur on land used for haying or grazing under the 
     conservation reserve program established under subchapter B 
     of chapter 1 of subtitle D of title XII of the Food Security 
     Act of 1985 (16 U.S.C. 3831 et seq.).
       ``(B) Monthly payment rate.--
       ``(i) In general.--Except as provided in clause (ii), the 
     payment rate for assistance under this paragraph for 1 month 
     shall, in the case of drought, be equal to 60 percent of the 
     lesser of--

       ``(I) the monthly feed cost for all covered livestock owned 
     or leased by the eligible livestock producer, as determined 
     under subparagraph (C); or
       ``(II) the monthly feed cost calculated by using the normal 
     carrying capacity of the eligible grazing land of the 
     eligible livestock producer.

       ``(ii) Partial compensation.--In the case of an eligible 
     livestock producer that sold or otherwise disposed of covered 
     livestock due to drought conditions in 1 or both of the 2 
     production years immediately preceding the current production 
     year, as determined by the Secretary, the payment rate shall 
     be 80 percent of the payment rate otherwise calculated in 
     accordance with clause (i).
       ``(C) Monthly feed cost.--
       ``(i) In general.--The monthly feed cost shall equal the 
     product obtained by multiplying--

       ``(I) 30 days;
       ``(II) a payment quantity that is equal to the feed grain 
     equivalent, as determined under clause (ii); and
       ``(III) a payment rate that is equal to the corn price per 
     pound, as determined under clause (iii).

       ``(ii) Feed grain equivalent.--For purposes of clause 
     (i)(I), the feed grain equivalent shall equal--

       ``(I) in the case of an adult beef cow, 15.7 pounds of corn 
     per day; or
       ``(II) in the case of any other type of weight of 
     livestock, an amount determined by the Secretary that 
     represents the average number of pounds of corn per day 
     necessary to feed the livestock.

       ``(iii) Corn price per pound.--For purposes of clause 
     (i)(II), the corn price per pound shall equal the quotient 
     obtained by dividing--

       ``(I) the higher of--

       ``(aa) the national average corn price per bushel for the 
     12-month period immediately preceding March 1 of the year for 
     which the disaster assistance is calculated; or
       ``(bb) the national average corn price per bushel for the 
     24-month period immediately preceding that March 1; by

       ``(II) 56.

       ``(D) Normal grazing period and drought monitor 
     intensity.--
       ``(i) FSA county committee determinations.--

       ``(I) In general.--The Secretary shall determine the normal 
     carrying capacity and normal grazing period for each type of 
     grazing land or pastureland in the county served by the 
     applicable committee.
       ``(II) Changes.--No change to the normal carrying capacity 
     or normal grazing period established for a county under 
     subclause (I) shall be made unless the change is requested by 
     the appropriate State and county Farm Service Agency 
     committees.

       ``(ii) Drought intensity.--

       ``(I) D2.--An eligible livestock producer that owns or 
     leases grazing land or pastureland that is physically located 
     in a county that is rated by the U.S. Drought Monitor as 
     having a D2 (severe drought) intensity in any area of the 
     county for at least 8 consecutive weeks during the normal 
     grazing period for the county, as determined by the 
     Secretary, shall be eligible to receive assistance under this 
     paragraph in an amount equal to 1 monthly payment using the 
     monthly payment rate determined under subparagraph (B).
       ``(II) D3.--An eligible livestock producer that owns or 
     leases grazing land or pastureland that is physically located 
     in a county that is rated by the U.S. Drought Monitor as 
     having at least a D3 (extreme drought) intensity in any area 
     of the county at any time during the normal grazing period 
     for the county, as determined by the Secretary, shall be 
     eligible to receive assistance under this paragraph--

       ``(aa) in an amount equal to 2 monthly payments using the 
     monthly payment rate determined under subparagraph (B); or
       ``(bb) if the county is rated as having a D3 (extreme 
     drought) intensity in any area of the county for at least 4 
     weeks during the normal grazing period for the county, or is 
     rated as having a D4 (exceptional drought) intensity in any 
     area of the county at any time during the normal grazing 
     period, in an amount equal to 3 monthly payments using the 
     monthly payment rate determined under subparagraph (B).
       ``(4) Assistance for losses due to fire on public managed 
     land.--
       ``(A) In general.--An eligible livestock producer may 
     receive assistance under this paragraph only if--
       ``(i) the grazing losses occur on rangeland that is managed 
     by a Federal agency; and
       ``(ii) the eligible livestock producer is prohibited by the 
     Federal agency from grazing the normal permitted livestock on 
     the managed rangeland due to a fire.
       ``(B) Payment rate.--The payment rate for assistance under 
     this paragraph shall be equal to 50 percent of the monthly 
     feed cost for the total number of livestock covered by the 
     Federal lease of the eligible livestock producer, as 
     determined under paragraph (3)(C).
       ``(C) Payment duration.--
       ``(i) In general.--Subject to clause (ii), an eligible 
     livestock producer shall be eligible to receive assistance 
     under this paragraph for the period--

       ``(I) beginning on the date on which the Federal agency 
     excludes the eligible livestock producer from using the 
     managed rangeland for grazing; and
       ``(II) ending on the last day of the Federal lease of the 
     eligible livestock producer.

       ``(ii) Limitation.--An eligible livestock producer may only 
     receive assistance under this paragraph for losses that occur 
     on not more than 180 days per year.
       ``(5) Minimum risk management purchase requirements.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, a livestock producer shall only be eligible for 
     assistance under this subsection if the livestock producer--

[[Page H3564]]

       ``(i) obtained a policy or plan of insurance under the 
     Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) for the 
     grazing land incurring the losses for which assistance is 
     being requested; or
       ``(ii) filed the required paperwork, and paid the 
     administrative fee by the applicable State filing deadline, 
     for the noninsured crop assistance program for the grazing 
     land incurring the losses for which assistance is being 
     requested.
       ``(B) Waiver for socially disadvantaged, limited resource, 
     or beginning farmer or rancher.--In the case of an eligible 
     livestock producer that is a socially disadvantaged farmer or 
     rancher or limited resource or beginning farmer or rancher, 
     as determined by the Secretary, the Secretary may--
       ``(i) waive subparagraph (A); and
       ``(ii) provide disaster assistance under this section at a 
     level that the Secretary determines to be equitable and 
     appropriate.
       ``(C) Waiver for 2008 calendar year.--In the case of an 
     eligible livestock producer that suffered losses on grazing 
     land during the 2008 calendar year but does not meet the 
     requirements of subparagraph (A), the Secretary shall waive 
     subparagraph (A) if the eligible livestock producer pays a 
     fee in an amount equal to the applicable noninsured crop 
     assistance program fee or catastrophic risk protection plan 
     fee required under subparagraph (A) to the Secretary not 
     later than 90 days after the date of enactment of this 
     subtitle.
       ``(D) Equitable relief.--
       ``(i) In general.--The Secretary may provide equitable 
     relief to an eligible livestock producer that is otherwise 
     ineligible or unintentionally fails to meet the requirements 
     of subparagraph (A) for the grazing land incurring the loss 
     on a case-by-case basis, as determined by the Secretary.
       ``(ii) 2008 calendar year.--In the case of an eligible 
     livestock producer that suffered losses on grazing land 
     during the 2008 calendar year, the Secretary shall take 
     special consideration to provide equitable relief in cases in 
     which the eligible livestock producer failed to meet the 
     requirements of subparagraph (A) due to the enactment of this 
     title after the closing date of sales periods for crop 
     insurance under the Federal Crop Insurance Act (7 U.S.C. 1501 
     et seq.) and the noninsured crop assistance program.
       ``(6) No duplicative payments.--
       ``(A) In general.--An eligible livestock producer may elect 
     to receive assistance for grazing or pasture feed losses due 
     to drought conditions under paragraph (3) or fire under 
     paragraph (4), but not both for the same loss, as determined 
     by the Secretary.
       ``(B) Relationship to supplemental revenue assistance.--An 
     eligible livestock producer that receives assistance under 
     this subsection may not also receive assistance for losses to 
     crops on the same land with the same intended use under 
     subsection (b).
       ``(e) Emergency Assistance for Livestock, Honey Bees, and 
     Farm-Raised Fish.--
       ``(1) In general.--The Secretary shall use up to 
     $50,000,000 per year from the Trust Fund to provide emergency 
     relief to eligible producers of livestock, honey bees, and 
     farm-raised fish to aid in the reduction of losses due to 
     disease, adverse weather, or other conditions, such as 
     blizzards and wildfires, as determined by the Secretary, that 
     are not covered under subsection (b), (c), or (d).
       ``(2) Use of funds.--Funds made available under this 
     subsection shall be used to reduce losses caused by feed or 
     water shortages, disease, or other factors as determined by 
     the Secretary.
       ``(3) Availability of funds.--Any funds made available 
     under this subsection shall remain available until expended.
       ``(f) Tree Assistance Program.--
       ``(1) Definitions.--In this subsection:
       ``(A) Eligible orchardist.--The term `eligible orchardist' 
     means a person that produces annual crops from trees for 
     commercial purposes.
       ``(B) Natural disaster.--The term `natural disaster' means 
     plant disease, insect infestation, drought, fire, freeze, 
     flood, earthquake, lightning, or other occurrence, as 
     determined by the Secretary.
       ``(C) Nursery tree grower.--The term `nursery tree grower' 
     means a person who produces nursery, ornamental, fruit, nut, 
     or Christmas trees for commercial sale, as determined by the 
     Secretary.
       ``(D) Tree.--The term `tree' includes a tree, bush, and 
     vine.
       ``(2) Eligibility.--
       ``(A) Loss.--Subject to subparagraph (B), the Secretary 
     shall provide assistance--
       ``(i) under paragraph (3) to eligible orchardists and 
     nursery tree growers that planted trees for commercial 
     purposes but lost the trees as a result of a natural 
     disaster, as determined by the Secretary; and
       ``(ii) under paragraph (3)(B) to eligible orchardists and 
     nursery tree growers that have a production history for 
     commercial purposes on planted or existing trees but lost the 
     trees as a result of a natural disaster, as determined by the 
     Secretary.
       ``(B) Limitation.--An eligible orchardist or nursery tree 
     grower shall qualify for assistance under subparagraph (A) 
     only if the tree mortality of the eligible orchardist or 
     nursery tree grower, as a result of damaging weather or 
     related condition, exceeds 15 percent (adjusted for normal 
     mortality).
       ``(3) Assistance.--Subject to paragraph (4), the assistance 
     provided by the Secretary to eligible orchardists and nursery 
     tree growers for losses described in paragraph (2) shall 
     consist of--
       ``(A)(i) reimbursement of 70 percent of the cost of 
     replanting trees lost due to a natural disaster, as 
     determined by the Secretary, in excess of 15 percent 
     mortality (adjusted for normal mortality); or
       ``(ii) at the option of the Secretary, sufficient seedlings 
     to reestablish a stand; and
       ``(B) reimbursement of 50 percent of the cost of pruning, 
     removal, and other costs incurred by an eligible orchardist 
     or nursery tree grower to salvage existing trees or, in the 
     case of tree mortality, to prepare the land to replant trees 
     as a result of damage or tree mortality due to a natural 
     disaster, as determined by the Secretary, in excess of 15 
     percent damage or mortality (adjusted for normal tree damage 
     and mortality).
       ``(4) Limitations on assistance.--
       ``(A) Definitions of legal entity and person.--In this 
     paragraph, the terms `legal entity' and `person' have the 
     meaning given those terms in section 1001(a) of the Food 
     Security Act of 1985 (7 U.S.C. 1308(a) (as amended by section 
     1603 of the Food, Conservation, and Energy Act of 2008).
       ``(B) Amount.--The total amount of payments received, 
     directly or indirectly, by a person or legal entity 
     (excluding a joint venture or general partnership) under this 
     subsection may not exceed $100,000 for any crop year, or an 
     equivalent value in tree seedlings.
       ``(C) Acres.--The total quantity of acres planted to trees 
     or tree seedlings for which a person or legal entity shall be 
     entitled to receive payments under this subsection may not 
     exceed 500 acres.
       ``(g) Risk Management Purchase Requirement.--
       ``(1) In general.--Except as otherwise provided in this 
     section, the eligible producers on a farm shall not be 
     eligible for assistance under this section (other than 
     subsection (c)) if the eligible producers on the farm--
       ``(A) in the case of each insurable commodity of the 
     eligible producers on the farm, did not obtain a policy or 
     plan of insurance under the Federal Crop Insurance Act (7 
     U.S.C. 1501 et seq.) (excluding a crop insurance pilot 
     program under that Act); or
       ``(B) in the case of each noninsurable commodity of the 
     eligible producers on the farm, did not file the required 
     paperwork, and pay the administrative fee by the applicable 
     State filing deadline, for the noninsured crop assistance 
     program.
       ``(2) Minimum.--To be considered to have obtained insurance 
     under paragraph (1)(A), an eligible producer on a farm shall 
     have obtained a policy or plan of insurance with not less 
     than 50 percent yield coverage at 55 percent of the insurable 
     price for each crop grazed, planted, or intended to be 
     planted for harvest on a whole farm.
       ``(3) Waiver for socially disadvantaged, limited resource, 
     or beginning farmer or rancher.--With respect to eligible 
     producers that are socially disadvantaged farmers or ranchers 
     or limited resource or beginning farmers or ranchers, as 
     determined by the Secretary, the Secretary may--
       ``(A) waive paragraph (1); and
       ``(B) provide disaster assistance under this section at a 
     level that the Secretary determines to be equitable and 
     appropriate.
       ``(4) Waiver for 2008 crop year.--In the case of an 
     eligible producer that suffered losses in an insurable 
     commodity or noninsurable commodity during the 2008 crop year 
     but does not meet the requirements of paragraph (1), the 
     Secretary shall waive paragraph (1) if the eligible producer 
     pays a fee in an amount equal to the applicable noninsured 
     crop assistance program fee or catastrophic risk protection 
     plan fee required under paragraph (1) to the Secretary not 
     later than 90 days after the date of enactment of this 
     subtitle.
       ``(5) Equitable relief.--
       ``(A) In general.--The Secretary may provide equitable 
     relief to eligible producers on a farm that are otherwise 
     ineligible or unintentionally fail to meet the requirements 
     of paragraph (1) for 1 or more crops on a farm on a case-by-
     case basis, as determined by the Secretary.
       ``(B) 2008 crop year.--In the case of eligible producers on 
     a farm that suffered losses in an insurable commodity or 
     noninsurable commodity during the 2008 crop year, the 
     Secretary shall take special consideration to provide 
     equitable relief in cases in which the eligible producers 
     failed to meet the requirements of paragraph (1) due to the 
     enactment of this title after the closing date of sales 
     periods for crop insurance under the Federal Crop Insurance 
     Act (7 U.S.C. 1501 et seq.) and the noninsured crop 
     assistance program.
       ``(h) Payment Limitations.--
       ``(1) Definitions of legal entity and person.--In this 
     subsection, the terms `legal entity' and `person' have the 
     meaning given those terms in section 1001(a) of the Food 
     Security Act of 1985 (7 U.S.C. 1308(a) (as amended by section 
     1603 of the Food, Conservation, and Energy Act of 2008).
       ``(2) Amount.--The total amount of disaster assistance 
     payments received, directly or indirectly, by a person or 
     legal entity (excluding a joint venture or general 
     partnership) under this section (excluding payments received 
     under subsection (f)) may not exceed $100,000 for any crop 
     year.
       ``(3) AGI limitation.--Section 1001D of the Food Security 
     Act of 1985 (7 U.S.C. 1308-3a) or any successor provision 
     shall apply with respect to assistance provided under this 
     section.
       ``(4) Direct attribution.--Subsections (e) and (f) of 
     section 1001 of the Food Security Act of 1985 (7 U.S.C. 1308) 
     or any successor provisions relating to direct attribution 
     shall apply with respect to assistance provided under this 
     section.
       ``(i) Period of Effectiveness.--This section shall be 
     effective only for losses that are incurred as the result of 
     a disaster, adverse weather, or other environmental condition 
     that occurs on or before September 30, 2011, as determined by 
     the Secretary.
       ``(j) No Duplicative Payments.--In implementing any other 
     program which makes disaster assistance payments (except for 
     indemnities made under the Federal Crop Insurance

[[Page H3565]]

     Act (7 U.S.C. 1501 et seq.)) and section 196 of the Federal 
     Agriculture Improvement and Reform Act of 1996), the 
     Secretary shall prevent duplicative payments with respect to 
     the same loss for which a person receives a payment under 
     subsections (b), (c), (d), (e), or (f).

     ``SEC. 902. AGRICULTURAL DISASTER RELIEF TRUST FUND.

       ``(a) Creation of Trust Fund.--There is established in the 
     Treasury of the United States a trust fund to be known as the 
     `Agricultural Disaster Relief Trust Fund', consisting of such 
     amounts as may be appropriated or credited to such Trust Fund 
     as provided in this section.
       ``(b) Transfer to Trust Fund.--
       ``(1) In general.--There are appropriated to the 
     Agricultural Disaster Relief Trust Fund amounts equivalent to 
     3.08 percent of the amounts received in the general fund of 
     the Treasury of the United States during fiscal years 2008 
     through 2011 attributable to the duties collected on articles 
     entered, or withdrawn from warehouse, for consumption under 
     the Harmonized Tariff Schedule of the United States.
       ``(2) Amounts based on estimates.--The amounts appropriated 
     under this section shall be transferred at least monthly from 
     the general fund of the Treasury of the United States to the 
     Agricultural Disaster Relief Trust Fund on the basis of 
     estimates made by the Secretary of the Treasury. Proper 
     adjustments shall be made in the amounts subsequently 
     transferred to the extent prior estimates were in excess of 
     or less than the amounts required to be transferred.
       ``(3) Limitation on transfers to agricultural disaster 
     relief trust fund.--No amount may be appropriated to the 
     Agricultural Disaster Relief Trust Fund on and after the date 
     of any expenditure from the Agricultural Disaster Relief 
     Trust Fund which is not permitted by this section. The 
     determination of whether an expenditure is so permitted shall 
     be made without regard to--
       ``(A) any provision of law which is not contained or 
     referenced in this title or in a revenue Act, and
       ``(B) whether such provision of law is a subsequently 
     enacted provision or directly or indirectly seeks to waive 
     the application of this paragraph.
       ``(c) Administration.--
       ``(1) Reports.--The Secretary of the Treasury shall be the 
     trustee of the Agricultural Disaster Relief Trust Fund and 
     shall submit an annual report to Congress each year on the 
     financial condition and the results of the operations of such 
     Trust Fund during the preceding fiscal year and on its 
     expected condition and operations during the 4 fiscal years 
     succeeding such fiscal year. Such report shall be printed as 
     a House document of the session of Congress to which the 
     report is made.
       ``(2) Investment.--
       ``(A) In general.--The Secretary of the Treasury shall 
     invest such portion of the Agricultural Disaster Relief Trust 
     Fund as is not in his judgment required to meet current 
     withdrawals. Such investments may be made only in interest 
     bearing obligations of the United States. For such purpose, 
     such obligations may be acquired--
       ``(i) on original issue at the issue price, or
       ``(ii) by purchase of outstanding obligations at the market 
     price.
       ``(B) Sale of obligations.--Any obligation acquired by the 
     Agricultural Disaster Relief Trust Fund may be sold by the 
     Secretary of the Treasury at the market price.
       ``(C) Interest on certain proceeds.--The interest on, and 
     the proceeds from the sale or redemption of, any obligations 
     held in the Agricultural Disaster Relief Trust Fund shall be 
     credited to and form a part of such Trust Fund.
       ``(d) Expenditures From Trust Fund.--Amounts in the 
     Agricultural Disaster Relief Trust Fund shall be available 
     for the purposes of making expenditures to meet those 
     obligations of the United States incurred under section 901 
     or section 531 of the Federal Crop Insurance Act (as such 
     sections are in effect on the date of the enactment of the 
     Food, Conservation, and Energy Act of 2008).
       ``(e) Authority To Borrow.--
       ``(1) In general.--There are authorized to be appropriated, 
     and are appropriated, to the Agricultural Disaster Relief 
     Trust Fund, as repayable advances, such sums as may be 
     necessary to carry out the purposes of such Trust Fund.
       ``(2) Repayment of advances.--
       ``(A) In general.--Advances made to the Agricultural 
     Disaster Relief Trust Fund shall be repaid, and interest on 
     such advances shall be paid, to the general fund of the 
     Treasury when the Secretary determines that moneys are 
     available for such purposes in such Trust Fund.
       ``(B) Rate of interest.--Interest on advances made pursuant 
     to this subsection shall be--
       ``(i) at a rate determined by the Secretary of the Treasury 
     (as of the close of the calendar month preceding the month in 
     which the advance is made) to be equal to the current average 
     market yield on outstanding marketable obligations of the 
     United States with remaining periods to maturity comparable 
     to the anticipated period during which the advance will be 
     outstanding, and
       ``(ii) compounded annually.

     ``SEC. 903. JURISDICTION.

       ``Legislation in the Senate of the United States amending 
     section 901 or 902 shall be referred to the Committee on 
     Finance of the Senate.''.
       (b) Transition.--For purposes of the 2008 crop year, the 
     Secretary shall carry out subsections (f)(4) and (h) of 
     section 901 of the Trade Act of 1974 (as added by subsection 
     (a)) in accordance with the terms and conditions of sections 
     1001 through 1001D of the Food Security Act of 1985 (16 
     U.S.C. 1308 et seq.), as in effect on September 30, 2007.
       (c) Clerical Amendment.--The table of contents for the 
     Trade Act of 1974 (19 U.S.C. 2101 et seq.) is amended by 
     adding at the end the following:

       ``TITLE IX--SUPPLEMENTAL AGRICULTURAL DISASTER ASSISTANCE

``Sec. 901. Supplemental agricultural disaster assistance.
``Sec. 902. Agricultural Disaster Relief Trust Fund.
``Sec. 903. Jurisdiction.''.

        Subtitle B--Revenue Provisions for Agriculture Programs

     SEC. 15201. CUSTOMS USER FEES.

       (a) In General.--Section 13031(j)(3)(A) of the Consolidated 
     Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 
     58c(j)(3)(A)) is amended by striking ``December 27, 2014'' 
     and inserting ``November 14, 2017''.
       (b) Other Fees.--Section 13031(j)(3)(B)(i) of the 
     Consolidated Omnibus Budget Reconciliation Act of 1985 (19 
     U.S.C. 58c(j)(3)(B)(i)) is amended by striking ``December 27, 
     2014'' and inserting ``September 30, 2017''.
       (c) Time for Remitting Certain Cobra Fees.--Notwithstanding 
     any other provision of law, any fees authorized under 
     paragraphs (1) through (8) of section 13031(a) of the 
     Consolidated Omnibus Budget Reconciliation Act of 1985 (19 
     U.S.C. 58c(a) (1) through (8)) with respect to customs 
     services provided on or after July 1, 2017, and before 
     September 20, 2017, shall be paid not later than September 
     25, 2017.
       (d) Time for Remitting Certain Merchandise Processing 
     Fees.--
       (1) In general.--Notwithstanding any other provision of 
     law, any fees authorized under paragraphs (9) and (10) of 
     section 13031(a) of the Consolidated Omnibus Budget 
     Reconciliation Act of 1985 (19 U.S.C. 58c(a) (9) and (10)) 
     with respect to processing merchandise entered on or after 
     October 1, 2017, and before November 15, 2017, shall be paid 
     not later than September 25, 2017, in an amount equivalent to 
     the amount of such fees paid by the person responsible for 
     such fees with respect to merchandise entered on or after 
     October 1, 2016, and before November 15, 2016, as determined 
     by the Secretary of the Treasury.
       (2) Reconciliation of merchandise processing fees.--Not 
     later than December 15, 2017, the Secretary of the Treasury 
     shall reconcile the fees paid pursuant to paragraph (1) with 
     the fees for services actually provided on or after October 
     1, 2017, and before November 15, 2017, and shall refund with 
     interest any overpayment of such fees and make proper 
     adjustments with respect to any underpayment of such fees. No 
     interest may be assessed with respect to any such 
     underpayment that was based on the amount of fees paid for 
     merchandise entered on or after October 1, 2016, and before 
     November 15, 2016.

     SEC. 15202. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

       The percentage under subparagraph (B) of section 401(1) of 
     the Tax Increase Prevention and Reconciliation Act of 2005 in 
     effect on the date of the enactment of this Act is increased 
     by 7.75 percentage points.

                       Subtitle C--Tax Provisions

                          PART I--CONSERVATION

          Subpart A--Land and Species Preservation Provisions

     SEC. 15301. EXCLUSION OF CONSERVATION RESERVE PROGRAM 
                   PAYMENTS FROM SECA TAX FOR CERTAIN INDIVIDUALS.

       (a) Internal Revenue Code.--Section 1402(a)(1) (defining 
     net earnings from self-employment) is amended by inserting 
     ``, and including payments under section 1233(2) of the Food 
     Security Act of 1985 (16 U.S.C. 3833(2)) to individuals 
     receiving benefits under section 202 or 223 of the Social 
     Security Act'' after ``crop shares''.
       (b) Social Security Act.--Section 211(a)(1) of the Social 
     Security Act is amended by inserting ``, and including 
     payments under section 1233(2) of the Food Security Act of 
     1985 (16 U.S.C. 3833(2)) to individuals receiving benefits 
     under section 202 or 223'' after ``crop shares''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to payments made after December 31, 2007.

     SEC. 15302. TWO-YEAR EXTENSION OF SPECIAL RULE ENCOURAGING 
                   CONTRIBUTIONS OF CAPITAL GAIN REAL PROPERTY FOR 
                   CONSERVATION PURPOSES.

       (a) In General.--
       (1) Individuals.--Section 170(b)(1)(E)(vi) (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2009''.
       (2) Corporations.--Section 170(b)(2)(B)(iii) (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2009''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to contributions made in taxable years beginning 
     after December 31, 2007.

     SEC. 15303. DEDUCTION FOR ENDANGERED SPECIES RECOVERY 
                   EXPENDITURES.

       (a) Deduction for Endangered Species Recovery 
     Expenditures.--
       (1) In general.--Paragraph (1) of section 175(c) (relating 
     to definitions) is amended by inserting after the first 
     sentence the following new sentence: ``Such term shall 
     include expenditures paid or incurred for the purpose of 
     achieving site-specific management actions recommended in 
     recovery plans approved pursuant to the Endangered Species 
     Act of 1973.''.
       (2) Conforming amendments.--
       (A) Section 175 is amended by inserting ``, or for 
     endangered species recovery'' after ``prevention of erosion 
     of land used in farming'' each place it appears in 
     subsections (a) and (c).

[[Page H3566]]

       (B) The heading of section 175 is amended by inserting ``; 
     ENDANGERED SPECIES RECOVERY EXPENDITURES'' before the period.
       (C) The item relating to section 175 in the table of 
     sections for part VI of subchapter B of chapter 1 is amended 
     by inserting ``; endangered species recovery expenditures'' 
     before the period.
       (b) Limitations.--Paragraph (3) of section 175(c) (relating 
     to additional limitations) is amended--
       (1) in the heading of subparagraph (A), by inserting ``or 
     endangered species recovery plan'' after ``conservation 
     plan'', and
       (2) in subparagraph (A)(i), by inserting ``or the recovery 
     plan approved pursuant to the Endangered Species Act of 
     1973'' after ``Department of Agriculture''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to expenditures paid or incurred after December 
     31, 2008.

                      Subpart B--Timber Provisions

     SEC. 15311. TEMPORARY REDUCTION IN RATE OF TAX ON QUALIFIED 
                   TIMBER GAIN OF CORPORATIONS.

       (a) In General.--Section 1201 (relating to alternative tax 
     for corporations) is amended by redesignating subsection (b) 
     as subsection (c) and by adding after subsection (a) the 
     following new subsection:
       ``(b) Special Rate for Qualified Timber Gains.--
       ``(1) In general.--If, for any taxable year ending after 
     the date of the enactment of the Food, Conservation, and 
     Energy Act of 2008 and beginning on or before the date which 
     is 1 year after such date, a corporation has both a net 
     capital gain and qualified timber gain--
       ``(A) subsection (a) shall apply to such corporation for 
     the taxable year without regard to whether the applicable tax 
     rate exceeds 35 percent, and
       ``(B) the tax computed under subsection (a)(2) shall be 
     equal to the sum of--
       ``(i) 15 percent of the least of--

       ``(I) qualified timber gain,
       ``(II) net capital gain, or
       ``(III) taxable income, plus

       ``(ii) 35 percent of the excess (if any) of taxable income 
     over the sum of the amounts for which a tax was determined 
     under subsection (a)(1) and clause (i).
       ``(2) Qualified timber gain.--For purposes of this section, 
     the term `qualified timber gain' means, with respect to any 
     taxpayer for any taxable year, the excess (if any) of--
       ``(A) the sum of the taxpayer's gains described in 
     subsections (a) and (b) of section 631 for such year, over
       ``(B) the sum of the taxpayer's losses described in such 
     subsections for such year.
     For purposes of subparagraphs (A) and (B), only timber held 
     more than 15 years shall be taken into account.
       ``(3) Computation for taxable years in which rate first 
     applies or ends.--In the case of any taxable year which 
     includes either of the dates set forth in paragraph (1), the 
     qualified timber gain for such year shall not exceed the 
     qualified timber gain properly taken into account for--
       ``(A) in the case of the taxable year including the date of 
     the enactment of the Food, Conservation, and Energy Act of 
     2008, the portion of the year after such date, and
       ``(B) in the case of the taxable year including the date 
     which is 1 year after such date of enactment, the portion of 
     the year on or before such later date.''.
       (b) Minimum Tax.--Subsection (b) of section 55 is amended 
     by adding at the end the following paragraph:
       ``(4) Maximum rate of tax on qualified timber gain of 
     corporations.--In the case of any taxable year to which 
     section 1201(b) applies, the amount determined under clause 
     (i) of subparagraph (B) shall not exceed the sum of--
       ``(A) 20 percent of so much of the taxable excess (if any) 
     as exceeds the qualified timber gain (or, if less, the net 
     capital gain), plus
       ``(B) 15 percent of the taxable excess in excess of the 
     amount on which a tax is determined under subparagraph (A).
     Any term used in this paragraph which is also used in section 
     1201 shall have the meaning given such term by such section, 
     except to the extent such term is subject to adjustment under 
     this part.''.
       (c) Conforming Amendment.--Section 857(b)(3)(A)(ii) is 
     amended by striking ``rate'' and inserting ``rates''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after the date of 
     enactment.

     SEC. 15312. TIMBER REIT MODERNIZATION.

       (a) In General.--Section 856(c)(5) is amended by adding 
     after subparagraph (G) the following new subparagraph:
       ``(H) Treatment of timber gains.--
       ``(i) In general.--Gain from the sale of real property 
     described in paragraph (2)(D) and (3)(C) shall include gain 
     which is--

       ``(I) recognized by an election under section 631(a) from 
     timber owned by the real estate investment trust, the cutting 
     of which is provided by a taxable REIT subsidiary of the real 
     estate investment trust;
       ``(II) recognized under section 631(b); or
       ``(III) income which would constitute gain under subclause 
     (I) or (II) but for the failure to meet the 1-year holding 
     period requirement.

       ``(ii) Special rules.--

       ``(I) For purposes of this subtitle, cut timber, the gain 
     from which is recognized by a real estate investment trust 
     pursuant to an election under section 631(a) described in 
     clause (i)(I) or so much of clause (i)(III) as relates to 
     clause (i)(I), shall be deemed to be sold to the taxable REIT 
     subsidiary of the real estate investment trust on the first 
     day of the taxable year.
       ``(II) For purposes of this subtitle, income described in 
     this subparagraph shall not be treated as gain from the sale 
     of property described in section 1221(a)(1).

       ``(iii) Termination.--This subparagraph shall not apply to 
     dispositions after the termination date.''.
       (b) Termination Date.--Subsection (c) of section 856 is 
     amended by adding at the end the following new paragraph:
       ``(8) Termination date.--For purposes of this subsection, 
     the term `termination date' means, with respect to any 
     taxpayer, the last day of the taxpayer's first taxable year 
     beginning after the date of the enactment of this paragraph 
     and before the date that is 1 year after such date of 
     enactment.''.
       (c) Effective Date.--The amendments made by subsection (a) 
     shall apply to dispositions in taxable years beginning after 
     the date of the enactment of this Act.

     SEC. 15313. MINERAL ROYALTY INCOME QUALIFYING INCOME FOR 
                   TIMBER REITS.

       (a) In General.--Section 856(c)(2) is amended by striking 
     ``and'' at the end of subparagraph (G), by inserting ``and'' 
     at the end of subparagraph (H), and by adding after 
     subparagraph (H) the following new subparagraph:
       ``(I) mineral royalty income earned in the first taxable 
     year beginning after the date of the enactment of this 
     subparagraph from real property owned by a timber real estate 
     investment trust and held, or once held, in connection with 
     the trade or business of producing timber by such real estate 
     investment trust;''.
       (b) Timber Real Estate Investment Trust.--Section 
     856(c)(5), as amended by this Act, is amended by adding after 
     subparagraph (H) the following new subparagraph:
       ``(I) Timber real estate investment trust.--The term 
     `timber real estate investment trust' means a real estate 
     investment trust in which more than 50 percent in value of 
     its total assets consists of real property held in connection 
     with the trade or business of producing timber.''.
       (c) Effective Date.--The amendments by this section shall 
     apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 15314. MODIFICATION OF TAXABLE REIT SUBSIDIARY ASSET 
                   TEST FOR TIMBER REITS.

       (a) In General.--Section 856(c)(4)(B)(ii) is amended by 
     inserting ``(in the case of a quarter which closes on or 
     before the termination date, 25 percent in the case of a 
     timber real estate investment trust)'' after ``REIT 
     subsidiaries''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 15315. SAFE HARBOR FOR TIMBER PROPERTY.

       (a) In General.--Section 857(b)(6) (relating to income from 
     prohibited transactions) is amended by adding at the end the 
     following new subparagraph:
       ``(G) Special rules for sales to qualified organizations.--
       ``(i) In general.--In the case of the sale of a real estate 
     asset (as defined in section 856(c)(5)(B)) to a qualified 
     organization (as defined in section 170(h)(3)) exclusively 
     for conservation purposes (within the meaning of section 
     170(h)(1)(C)), subparagraph (D) shall be applied--

       ``(I) by substituting `2 years' for `4 years' in clause 
     (i), and
       ``(II) by substituting `2-year period' for `4-year period' 
     in clauses (ii) and (iii).

       ``(ii) Termination.--This subparagraph shall not apply to 
     sales after the termination date.''.
       (b) Prohibited Transactions.--Section 857(b)(6)(D)(v) is 
     amended by inserting ``, or, in the case of a sale on or 
     before the termination date, a taxable REIT subsidiary'' 
     after ``any income''.
       (c) Sales That Are Not Prohibited Transactions.--Section 
     857(b)(6), as amended by subsection (a), is amended by adding 
     at the end the following new subparagraph:
       ``(H) Sales of property that are not a prohibited 
     transaction.--In the case of a sale on or before the 
     termination date, the sale of property which is not a 
     prohibited transaction through the application of 
     subparagraph (D) shall be considered property held for 
     investment or for use in a trade or business and not property 
     described in section 1221(a)(1) for all purposes of this 
     subtitle.''.
       (d) Termination Date.--Section 857(b)(6), as amended by 
     subsections (a) and (c), is amended by adding at the end the 
     following new subparagraph:
       ``(I) Termination date.--For purposes of this paragraph, 
     the term `termination date' has the meaning given such term 
     by section 856(c)(8).''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to dispositions in taxable years beginning after 
     the date of the enactment of this Act.

     SEC. 15316. QUALIFIED FORESTRY CONSERVATION BONDS.

       (a) In General.--Part IV of subchapter A of chapter 1 
     (relating to credits against tax) is amended by adding at the 
     end the following new subpart:

                ``Subpart I--Qualified Tax Credit Bonds

``Sec. 54A. Credit to holders of qualified tax credit bonds.
``Sec. 54B. Qualified forestry conservation bonds.

     ``SEC. 54A. CREDIT TO HOLDERS OF QUALIFIED TAX CREDIT BONDS.

       ``(a) Allowance of Credit.--If a taxpayer holds a qualified 
     tax credit bond on one or more credit allowance dates of the 
     bond during any taxable year, there shall be allowed as a 
     credit against the tax imposed by this chapter for the 
     taxable year an amount equal to the sum of the credits 
     determined under subsection (b) with respect to such dates.
       ``(b) Amount of Credit.--
       ``(1) In general.--The amount of the credit determined 
     under this subsection with respect to any credit allowance 
     date for a qualified tax

[[Page H3567]]

     credit bond is 25 percent of the annual credit determined 
     with respect to such bond.
       ``(2) Annual credit.--The annual credit determined with 
     respect to any qualified tax credit bond is the product of--
       ``(A) the applicable credit rate, multiplied by
       ``(B) the outstanding face amount of the bond.
       ``(3) Applicable credit rate.--For purposes of paragraph 
     (2), the applicable credit rate is the rate which the 
     Secretary estimates will permit the issuance of qualified tax 
     credit bonds with a specified maturity or redemption date 
     without discount and without interest cost to the qualified 
     issuer. The applicable credit rate with respect to any 
     qualified tax credit bond shall be determined as of the first 
     day on which there is a binding, written contract for the 
     sale or exchange of the bond.
       ``(4) Special rule for issuance and redemption.--In the 
     case of a bond which is issued during the 3-month period 
     ending on a credit allowance date, the amount of the credit 
     determined under this subsection with respect to such credit 
     allowance date shall be a ratable portion of the credit 
     otherwise determined based on the portion of the 3-month 
     period during which the bond is outstanding. A similar rule 
     shall apply when the bond is redeemed or matures.
       ``(c) Limitation Based on Amount of Tax.--
       ``(1) In general.--The credit allowed under subsection (a) 
     for any taxable year shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this part 
     (other than subpart C and this subpart).
       ``(2) Carryover of unused credit.--If the credit allowable 
     under subsection (a) exceeds the limitation imposed by 
     paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such taxable year 
     (determined before the application of paragraph (1) for such 
     succeeding taxable year).
       ``(d) Qualified Tax Credit Bond.--For purposes of this 
     section--
       ``(1) Qualified tax credit bond.--The term `qualified tax 
     credit bond' means a qualified forestry conservation bond 
     which is part of an issue that meets the requirements of 
     paragraphs (2), (3), (4), (5), and (6).
       ``(2) Special rules relating to expenditures.--
       ``(A) In general.--An issue shall be treated as meeting the 
     requirements of this paragraph if, as of the date of 
     issuance, the issuer reasonably expects--
       ``(i) 100 percent or more of the available project proceeds 
     to be spent for 1 or more qualified purposes within the 3-
     year period beginning on such date of issuance, and
       ``(ii) a binding commitment with a third party to spend at 
     least 10 percent of such available project proceeds will be 
     incurred within the 6-month period beginning on such date of 
     issuance.
       ``(B) Failure to spend required amount of bond proceeds 
     within 3 years.--
       ``(i) In general.--To the extent that less than 100 percent 
     of the available project proceeds of the issue are expended 
     by the close of the expenditure period for 1 or more 
     qualified purposes, the issuer shall redeem all of the 
     nonqualified bonds within 90 days after the end of such 
     period. For purposes of this paragraph, the amount of the 
     nonqualified bonds required to be redeemed shall be 
     determined in the same manner as under section 142.
       ``(ii) Expenditure period.--For purposes of this subpart, 
     the term `expenditure period' means, with respect to any 
     issue, the 3-year period beginning on the date of issuance. 
     Such term shall include any extension of such period under 
     clause (iii).
       ``(iii) Extension of period.--Upon submission of a request 
     prior to the expiration of the expenditure period (determined 
     without regard to any extension under this clause), the 
     Secretary may extend such period if the issuer establishes 
     that the failure to expend the proceeds within the original 
     expenditure period is due to reasonable cause and the 
     expenditures for qualified purposes will continue to proceed 
     with due diligence.
       ``(C) Qualified purpose.--For purposes of this paragraph, 
     the term `qualified purpose' means a purpose specified in 
     section 54B(e).
       ``(D) Reimbursement.--For purposes of this subtitle, 
     available project proceeds of an issue shall be treated as 
     spent for a qualified purpose if such proceeds are used to 
     reimburse the issuer for amounts paid for a qualified purpose 
     after the date that the Secretary makes an allocation of bond 
     limitation with respect to such issue, but only if--
       ``(i) prior to the payment of the original expenditure, the 
     issuer declared its intent to reimburse such expenditure with 
     the proceeds of a qualified tax credit bond,
       ``(ii) not later than 60 days after payment of the original 
     expenditure, the issuer adopts an official intent to 
     reimburse the original expenditure with such proceeds, and
       ``(iii) the reimbursement is made not later than 18 months 
     after the date the original expenditure is paid.
       ``(3) Reporting.--An issue shall be treated as meeting the 
     requirements of this paragraph if the issuer of qualified tax 
     credit bonds submits reports similar to the reports required 
     under section 149(e).
       ``(4) Special rules relating to arbitrage.--
       ``(A) In general.--An issue shall be treated as meeting the 
     requirements of this paragraph if the issuer satisfies the 
     requirements of section 148 with respect to the proceeds of 
     the issue.
       ``(B) Special rule for investments during expenditure 
     period.--An issue shall not be treated as failing to meet the 
     requirements of subparagraph (A) by reason of any investment 
     of available project proceeds during the expenditure period.
       ``(C) Special rule for reserve funds.--An issue shall not 
     be treated as failing to meet the requirements of 
     subparagraph (A) by reason of any fund which is expected to 
     be used to repay such issue if--
       ``(i) such fund is funded at a rate not more rapid than 
     equal annual installments,
       ``(ii) such fund is funded in a manner reasonably expected 
     to result in an amount not greater than an amount necessary 
     to repay the issue, and
       ``(iii) the yield on such fund is not greater than the 
     discount rate determined under paragraph (5)(B) with respect 
     to the issue.
       ``(5) Maturity limitation.--
       ``(A) In general.--An issue shall be treated as meeting the 
     requirements of this paragraph if the maturity of any bond 
     which is part of such issue does not exceed the maximum term 
     determined by the Secretary under subparagraph (B).
       ``(B) Maximum term.--During each calendar month, the 
     Secretary shall determine the maximum term permitted under 
     this paragraph for bonds issued during the following calendar 
     month. Such maximum term shall be the term which the 
     Secretary estimates will result in the present value of the 
     obligation to repay the principal on the bond being equal to 
     50 percent of the face amount of such bond. Such present 
     value shall be determined using as a discount rate the 
     average annual interest rate of tax-exempt obligations having 
     a term of 10 years or more which are issued during the month. 
     If the term as so determined is not a multiple of a whole 
     year, such term shall be rounded to the next highest whole 
     year.
       ``(6) Prohibition on financial conflicts of interest.--An 
     issue shall be treated as meeting the requirements of this 
     paragraph if the issuer certifies that--
       ``(A) applicable State and local law requirements governing 
     conflicts of interest are satisfied with respect to such 
     issue, and
       ``(B) if the Secretary prescribes additional conflicts of 
     interest rules governing the appropriate Members of Congress, 
     Federal, State, and local officials, and their spouses, such 
     additional rules are satisfied with respect to such issue.
       ``(e) Other Definitions.--For purposes of this subchapter--
       ``(1) Credit allowance date.--The term `credit allowance 
     date' means--
       ``(A) March 15,
       ``(B) June 15,
       ``(C) September 15, and
       ``(D) December 15.
     Such term includes the last day on which the bond is 
     outstanding.
       ``(2) Bond.--The term `bond' includes any obligation.
       ``(3) State.--The term `State' includes the District of 
     Columbia and any possession of the United States.
       ``(4) Available project proceeds.--The term `available 
     project proceeds' means--
       ``(A) the excess of--
       ``(i) the proceeds from the sale of an issue, over
       ``(ii) the issuance costs financed by the issue (to the 
     extent that such costs do not exceed 2 percent of such 
     proceeds), and
       ``(B) the proceeds from any investment of the excess 
     described in subparagraph (A).
       ``(f) Credit Treated as Interest.--For purposes of this 
     subtitle, the credit determined under subsection (a) shall be 
     treated as interest which is includible in gross income.
       ``(g) S Corporations and Partnerships.--In the case of a 
     tax credit bond held by an S corporation or partnership, the 
     allocation of the credit allowed by this section to the 
     shareholders of such corporation or partners of such 
     partnership shall be treated as a distribution.
       ``(h) Bonds Held by Regulated Investment Companies and Real 
     Estate Investment Trusts.--If any qualified tax credit bond 
     is held by a regulated investment company or a real estate 
     investment trust, the credit determined under subsection (a) 
     shall be allowed to shareholders of such company or 
     beneficiaries of such trust (and any gross income included 
     under subsection (f) with respect to such credit shall be 
     treated as distributed to such shareholders or beneficiaries) 
     under procedures prescribed by the Secretary.
       ``(i) Credits May Be Stripped.--Under regulations 
     prescribed by the Secretary--
       ``(1) In general.--There may be a separation (including at 
     issuance) of the ownership of a qualified tax credit bond and 
     the entitlement to the credit under this section with respect 
     to such bond. In case of any such separation, the credit 
     under this section shall be allowed to the person who on the 
     credit allowance date holds the instrument evidencing the 
     entitlement to the credit and not to the holder of the bond.
       ``(2) Certain rules to apply.--In the case of a separation 
     described in paragraph (1), the rules of section 1286 shall 
     apply to the qualified tax credit bond as if it were a 
     stripped bond and to the credit under this section as if it 
     were a stripped coupon.

     ``SEC. 54B. QUALIFIED FORESTRY CONSERVATION BONDS.

       ``(a) Qualified Forestry Conservation Bond.--For purposes 
     of this subchapter, the term `qualified forestry conservation 
     bond' means any bond issued as part of an issue if--
       ``(1) 100 percent of the available project proceeds of such 
     issue are to be used for one or more qualified forestry 
     conservation purposes,
       ``(2) the bond is issued by a qualified issuer, and
       ``(3) the issuer designates such bond for purposes of this 
     section.
       ``(b) Limitation on Amount of Bonds Designated.--The 
     maximum aggregate face amount of bonds which may be 
     designated under subsection (a) by any issuer shall not 
     exceed the limitation amount allocated to such issuer under 
     subsection (d).

[[Page H3568]]

       ``(c) National Limitation on Amount of Bonds Designated.--
     There is a national qualified forestry conservation bond 
     limitation of $500,000,000.
       ``(d) Allocations.--
       ``(1) In general.--The Secretary shall make allocations of 
     the amount of the national qualified forestry conservation 
     bond limitation described in subsection (c) among qualified 
     forestry conservation purposes in such manner as the 
     Secretary determines appropriate so as to ensure that all of 
     such limitation is allocated before the date which is 24 
     months after the date of the enactment of this section.
       ``(2) Solicitation of applications.--The Secretary shall 
     solicit applications for allocations of the national 
     qualified forestry conservation bond limitation described in 
     subsection (c) not later than 90 days after the date of the 
     enactment of this section.
       ``(e) Qualified Forestry Conservation Purpose.--For 
     purposes of this section, the term `qualified forestry 
     conservation purpose' means the acquisition by a State or any 
     political subdivision or instrumentality thereof or a 
     501(c)(3) organization (as defined in section 150(a)(4)) from 
     an unrelated person of forest and forest land that meets the 
     following qualifications:
       ``(1) Some portion of the land acquired must be adjacent to 
     United States Forest Service Land.
       ``(2) At least half of the land acquired must be 
     transferred to the United States Forest Service at no net 
     cost to the United States and not more than half of the land 
     acquired may either remain with or be conveyed to a State.
       ``(3) All of the land must be subject to a native fish 
     habitat conservation plan approved by the United States Fish 
     and Wildlife Service.
       ``(4) The amount of acreage acquired must be at least 
     40,000 acres.
       ``(f) Qualified Issuer.--For purposes of this section, the 
     term `qualified issuer' means a State or any political 
     subdivision or instrumentality thereof or a 501(c)(3) 
     organization (as defined in section 150(a)(4)).
       ``(g) Special Arbitrage Rule.--In the case of any qualified 
     forestry conservation bond issued as part of an issue, 
     section 54A(d)(4)(C) shall be applied to such issue without 
     regard to clause (i).
       ``(h) Election to Treat 50 Percent of Bond Allocation as 
     Payment of Tax.--
       ``(1) In general.--If--
       ``(A) a qualified issuer receives an allocation of any 
     portion of the national qualified forestry conservation bond 
     limitation described in subsection (c), and
       ``(B) the qualified issuer elects the application of this 
     subsection with respect to such allocation,
     then the qualified issuer (without regard to whether the 
     issuer is subject to tax under this chapter) shall be treated 
     as having made a payment against the tax imposed by this 
     chapter, for the taxable year preceding the taxable year in 
     which the allocation is received, in an amount equal to 50 
     percent of the amount of such allocation.
       ``(2) Treatment of deemed payment.--
       ``(A) In general.--Notwithstanding any other provision of 
     this title, the Secretary shall not use the payment of tax 
     described in paragraph (1) as an offset or credit against any 
     tax liability of the qualified issuer but shall refund such 
     payment to such issuer.
       ``(B) No interest.--Except as provided in paragraph (3)(A), 
     the payment described in paragraph (1) shall not be taken 
     into account in determining any amount of interest under this 
     title.
       ``(3) Requirement for, and effect of, election.--
       ``(A) Requirement.--No election under this subsection shall 
     take effect unless the qualified issuer certifies to the 
     Secretary that any payment of tax refunded to the issuer 
     under this subsection will be used exclusively for 1 or more 
     qualified forestry conservation purposes. If the qualified 
     issuer fails to use any portion of such payment for such 
     purpose, the issuer shall be liable to the United States in 
     an amount equal to such portion, plus interest at the 
     overpayment rate under section 6621 for the period from the 
     date such portion was refunded to the date such amount is 
     paid. Any such amount shall be assessed and collected in the 
     same manner as tax imposed by this chapter, except that 
     subchapter B of chapter 63 (relating to deficiency 
     procedures) shall not apply in respect of such assessment or 
     collection.
       ``(B) Effect of election on allocation.--If a qualified 
     issuer makes the election under this subsection with respect 
     to any allocation--
       ``(i) the issuer may issue no bonds pursuant to the 
     allocation, and
       ``(ii) the Secretary may not reallocate such allocation for 
     any other purpose.''.
       (b) Reporting.--Subsection (d) of section 6049 (relating to 
     returns regarding payments of interest) is amended by adding 
     at the end the following new paragraph:
       ``(9) Reporting of credit on qualified tax credit bonds.--
       ``(A) In general.--For purposes of subsection (a), the term 
     `interest' includes amounts includible in gross income under 
     section 54A and such amounts shall be treated as paid on the 
     credit allowance date (as defined in section 54A(e)(1)).
       ``(B) Reporting to corporations, etc.--Except as otherwise 
     provided in regulations, in the case of any interest 
     described in subparagraph (A) of this paragraph, subsection 
     (b)(4) of this section shall be applied without regard to 
     subparagraphs (A), (H), (I), (J), (K), and (L)(i).
       ``(C) Regulatory authority.--The Secretary may prescribe 
     such regulations as are necessary or appropriate to carry out 
     the purposes of this paragraph, including regulations which 
     require more frequent or more detailed reporting.''.
       (c) Conforming Amendments.--
       (1) Sections 54(c)(2) and 1400N(l)(3)(B) are each amended 
     by striking ``subpart C'' and inserting ``subparts C and I''.
       (2) Section 1397E(c)(2) is amended by striking ``subpart 
     H'' and inserting ``subparts H and I''.
       (3) Section 6401(b)(1) is amended by striking ``and H'' and 
     inserting ``H, and I''.
       (4) The heading of subpart H of part IV of subchapter A of 
     chapter 1 is amended by striking ``Certain Bonds'' and 
     inserting ``Clean Renewable Energy Bonds''.
       (5) The table of subparts for part IV of subchapter A of 
     chapter 1 is amended by striking the item relating to subpart 
     H and inserting the following new items:

``subpart h. nonrefundable credit to holders of clean renewable energy 
                                 bonds.

              ``subpart i. qualified tax credit bonds.''.

       (6) Paragraph (2) of section 1324(b) of title 31, United 
     States Code, is amended by striking ``or 6428 or 53(e)'' and 
     inserting ``, 53(e), 54B(h), or 6428''.
       (d) Effective Dates.--The amendments made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

                       PART II--ENERGY PROVISIONS

                     Subpart A--Cellulosic Biofuel

     SEC. 15321. CREDIT FOR PRODUCTION OF CELLULOSIC BIOFUEL.

       (a) In General.--Subsection (a) of section 40 (relating to 
     alcohol used as fuel) is amended by striking ``plus'' at the 
     end of paragraph (1), by striking ``plus'' at the end of 
     paragraph (2), by striking the period at the end of paragraph 
     (3) and inserting ``, plus'', and by adding at the end the 
     following new paragraph:
       ``(4) the cellulosic biofuel producer credit.''.
       (b) Cellulosic Biofuel Producer Credit.--
       (1) In general.--Subsection (b) of section 40 is amended by 
     adding at the end the following new paragraph:
       ``(6) Cellulosic biofuel producer credit.--
       ``(A) In general.--The cellulosic biofuel producer credit 
     of any taxpayer is an amount equal to the applicable amount 
     for each gallon of qualified cellulosic biofuel production.
       ``(B) Applicable amount.--For purposes of subparagraph (A), 
     the applicable amount means $1.01, except that such amount 
     shall, in the case of cellulosic biofuel which is alcohol, be 
     reduced by the sum of--
       ``(i) the amount of the credit in effect for such alcohol 
     under subsection (b)(1) (without regard to subsection (b)(3)) 
     at the time of the qualified cellulosic biofuel production, 
     plus
       ``(ii) in the case of ethanol, the amount of the credit in 
     effect under subsection (b)(4) at the time of such 
     production.
       ``(C) Qualified cellulosic biofuel production.--For 
     purposes of this section, the term `qualified cellulosic 
     biofuel production' means any cellulosic biofuel which is 
     produced by the taxpayer, and which during the taxable year--
       ``(i) is sold by the taxpayer to another person--

       ``(I) for use by such other person in the production of a 
     qualified cellulosic biofuel mixture in such other person's 
     trade or business (other than casual off-farm production),
       ``(II) for use by such other person as a fuel in a trade or 
     business, or
       ``(III) who sells such cellulosic biofuel at retail to 
     another person and places such cellulosic biofuel in the fuel 
     tank of such other person, or

       ``(ii) is used or sold by the taxpayer for any purpose 
     described in clause (i).
     The qualified cellulosic biofuel production of any taxpayer 
     for any taxable year shall not include any alcohol which is 
     purchased by the taxpayer and with respect to which such 
     producer increases the proof of the alcohol by additional 
     distillation.
       ``(D) Qualified cellulosic biofuel mixture.--For purposes 
     of this paragraph, the term `qualified cellulosic biofuel 
     mixture' means a mixture of cellulosic biofuel and gasoline 
     or of cellulosic biofuel and a special fuel which--
       ``(i) is sold by the person producing such mixture to any 
     person for use as a fuel, or
       ``(ii) is used as a fuel by the person producing such 
     mixture.
       ``(E) Cellulosic biofuel.--For purposes of this paragraph--
       ``(i) In general.--The term `cellulosic biofuel' means any 
     liquid fuel which--

       ``(I) is produced from any lignocellulosic or 
     hemicellulosic matter that is available on a renewable or 
     recurring basis, and
       ``(II) meets the registration requirements for fuels and 
     fuel additives established by the Environmental Protection 
     Agency under section 211 of the Clean Air Act (42 U.S.C. 
     7545).

       ``(ii) Exclusion of low-proof alcohol.--Such term shall not 
     include any alcohol with a proof of less than 150. The 
     determination of the proof of any alcohol shall be made 
     without regard to any added denaturants.
       ``(F) Allocation of cellulosic biofuel producer credit to 
     patrons of cooperative.--Rules similar to the rules under 
     subsection (g)(6) shall apply for purposes of this paragraph.
       ``(G) Registration requirement.--No credit shall be 
     determined under this paragraph with respect to any taxpayer 
     unless such taxpayer is registered with the Secretary as a 
     producer of cellulosic biofuel under section 4101.
       ``(H) Application of paragraph.--This paragraph shall apply 
     with respect to qualified cellulosic biofuel production after 
     December 31, 2008, and before January 1, 2013.''.
       (2) Termination date not to apply.--Subsection (e) of 
     section 40 (relating to termination) is amended--
       (A) by inserting ``or subsection (b)(6)(H)'' after ``by 
     reason of paragraph (1)'' in paragraph (2), and
       (B) by adding at the end the following new paragraph:
       ``(3) Exception for cellulosic biofuel producer credit.--
     Paragraph (1) shall not apply to the portion of the credit 
     allowed under this section by reason of subsection (a)(4).''.

[[Page H3569]]

       (3) Conforming amendments.--
       (A) Paragraph (1) of section 4101(a) is amended--
       (i) by striking ``and every person'' and inserting ``, 
     every person'', and
       (ii) by inserting ``, and every person producing cellulosic 
     biofuel (as defined in section 40(b)(6)(E))'' after ``section 
     6426(b)(4)(A))''.
       (B) The heading of section 40, and the item relating to 
     such section in the table of sections for subpart D of part 
     IV of subchapter A of chapter 1, are each amended by 
     inserting ``, etc.,'' after ``Alcohol''.
       (c) Biofuel Not Used as a Fuel, etc.--
       (1) In general.--Paragraph (3) of section 40(d) is amended 
     by redesignating subparagraph (D) as subparagraph (E) and by 
     inserting after subparagraph (C) the following new 
     subparagraph:
       ``(D) Cellulosic biofuel producer credit.--If--
       ``(i) any credit is allowed under subsection (a)(4), and
       ``(ii) any person does not use such fuel for a purpose 
     described in subsection (b)(6)(C),
     then there is hereby imposed on such person a tax equal to 
     the applicable amount (as defined in subsection (b)(6)(B)) 
     for each gallon of such cellulosic biofuel.''.
       (2) Conforming amendments.--
       (A) Subparagraph (C) of section 40(d)(3) is amended by 
     striking ``Producer'' in the heading and inserting ``Small 
     ethanol producer''.
       (B) Subparagraph (E) of section 40(d)(3), as redesignated 
     by paragraph (1), is amended by striking ``or (C)'' and 
     inserting ``(C), or (D)''.
       (d) Biofuel Produced in the United States.--Section 40(d) 
     is amended by adding at the end the following new paragraph:
       ``(6) Special rule for cellulosic biofuel producer 
     credit.--No cellulosic biofuel producer credit shall be 
     determined under subsection (a) with respect to any 
     cellulosic biofuel unless such cellulosic biofuel is produced 
     in the United States and used as a fuel in the United States. 
     For purposes of this subsection, the term `United States' 
     includes any possession of the United States.''.
       (e) Waiver of Credit Limit for Cellulosic Biofuel 
     Production by Small Ethanol Producers.--Section 40(b)(4)(C) 
     is amended by inserting ``(determined without regard to any 
     qualified cellulosic biofuel production)'' after ``15,000,000 
     gallons''.
       (f) Denial of Double Benefit.--
       (1) Biodiesel.--Paragraph (1) of section 40A(d) is amended 
     by adding at the end the following new flush sentence:
     ``Such term shall not include any liquid with respect to 
     which a credit may be determined under section 40.''.
       (2) Renewable diesel.--Paragraph (3) of section 40A(f) is 
     amended by adding at the end the following new flush 
     sentence:
     ``Such term shall not include any liquid with respect to 
     which a credit may be determined under section 40.''.
       (g) Effective Date.--The amendments made by this section 
     shall apply to fuel produced after December 31, 2008.

     SEC. 15322. COMPREHENSIVE STUDY OF BIOFUELS.

       (a) Study.--The Secretary of the Treasury, in consultation 
     with the Secretary of Agriculture, the Secretary of Energy, 
     and the Administrator of the Environmental Protection Agency, 
     shall enter into an agreement with the National Academy of 
     Sciences to produce an analysis of current scientific 
     findings to determine--
       (1) current biofuels production, as well as projections for 
     future production,
       (2) the maximum amount of biofuels production capable in 
     United States forests and farmlands, including the current 
     quantities and character of the feedstocks and including such 
     information as regional forest inventories that are 
     commercially available, used in the production of biofuels,
       (3) the domestic effects of an increase in biofuels 
     production levels, including the effects of such levels on--
       (A) the price of fuel,
       (B) the price of land in rural and suburban communities,
       (C) crop acreage, forest acreage, and other land use,
       (D) the environment, due to changes in crop acreage, 
     fertilizer use, runoff, water use, emissions from vehicles 
     utilizing biofuels, and other factors,
       (E) the price of feed,
       (F) the selling price of grain crops and forest products,
       (G) exports and imports of grains and forest products,
       (H) taxpayers, through cost or savings to commodity crop 
     payments, and
       (I) the expansion of refinery capacity,
       (4) the ability to convert corn ethanol plants for other 
     uses, such as cellulosic ethanol or biodiesel,
       (5) a comparative analysis of corn ethanol versus other 
     biofuels and renewable energy sources, considering cost, 
     energy output, and ease of implementation,
       (6) the impact of the tax credit established by this 
     subpart on the regional agricultural and silvicultural 
     capabilities of commercially available forest inventories, 
     and
       (7) the need for additional scientific inquiry, and 
     specific areas of interest for future research.
       (b) Report.--The Secretary of the Treasury shall submit an 
     initial report of the findings of the study required under 
     subsection (a) to Congress not later than 6 months after the 
     date of the enactment of this Act (36 months after such date 
     in the case of the information required by subsection 
     (a)(6)), and a final report not later than 12 months after 
     such date (42 months after such date in the case of the 
     information required by subsection (a)(6)).

                     Subpart B--Revenue Provisions

     SEC. 15331. MODIFICATION OF ALCOHOL CREDIT.

       (a) Income Tax Credit.--
       (1) In general.--The table in paragraph (2) of section 
     40(h) is amended--
       (A) by striking ``through 2010'' in the first column and 
     inserting ``, 2006, 2007, or 2008'',
       (B) by striking the period at the end of the third row, and
       (C) by adding at the end the following new row:


``2009 through 2010...............  45 cents.............  33.33
                                                            cents.''.
 

       (2) Exception.--Section 40(h) is amended by adding at the 
     end the following new paragraph:
       ``(3) Reduction delayed until annual production or 
     importation of 7,500,000,000 gallons.--
       ``(A) In general.--In the case of any calendar year 
     beginning after 2008, if the Secretary makes a determination 
     described in subparagraph (B) with respect to all preceding 
     calendar years beginning after 2007, the last row in the 
     table in paragraph (2) shall be applied by substituting `51 
     cents' for `45 cents'.
       ``(B) Determination.--A determination described in this 
     subparagraph with respect to any calendar year is a 
     determination, in consultation with the Administrator of the 
     Environmental Protection Agency, that an amount less than 
     7,500,000,000 gallons of ethanol (including cellulosic 
     ethanol) has been produced in or imported into the United 
     States in such year.''.
       (b) Excise Tax Credit.--
       (1) In general.--Subparagraph (A) of section 6426(b)(2) 
     (relating to alcohol fuel mixture credit) is amended by 
     striking ``the applicable amount is 51 cents'' and inserting 
     ``the applicable amount is--
       ``(i) in the case of calendar years beginning before 2009, 
     51 cents, and
       ``(ii) in the case of calendar years beginning after 2008, 
     45 cents.''.
       (2) Exception.--Paragraph (2) of section 6426(b) is amended 
     by adding at the end the following new subparagraph:
       ``(C) Reduction delayed until annual production or 
     importation of 7,500,000,000 gallons.--In the case of any 
     calendar year beginning after 2008, if the Secretary makes a 
     determination described in section 40(h)(3)(B) with respect 
     to all preceding calendar years beginning after 2007, 
     subparagraph (A)(ii) shall be applied by substituting `51 
     cents' for `45 cents'.''
       (3) Conforming amendment.--Subparagraph (A) of section 
     6426(b)(2) is amended by striking ``subparagraph (B)'' and 
     inserting ``subparagraphs (B) and (C)''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 15332. CALCULATION OF VOLUME OF ALCOHOL FOR FUEL 
                   CREDITS.

       (a) In General.--Paragraph (4) of section 40(d) (relating 
     to volume of alcohol) is amended by striking ``5 percent'' 
     and inserting ``2 percent''.
       (b) Conforming Amendment for Excise Tax Credit.--Section 
     6426(b) (relating to alcohol fuel mixture credit) is amended 
     by redesignating paragraph (5) as paragraph (6) and by 
     inserting after paragraph (4) the following new paragraph:
       ``(5) Volume of alcohol.--For purposes of determining under 
     subsection (a) the number of gallons of alcohol with respect 
     to which a credit is allowable under subsection (a), the 
     volume of alcohol shall include the volume of any denaturant 
     (including gasoline) which is added under any formulas 
     approved by the Secretary to the extent that such denaturants 
     do not exceed 2 percent of the volume of such alcohol 
     (including denaturants).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to fuel sold or used after December 31, 2008.

     SEC. 15333. ETHANOL TARIFF EXTENSION.

       Headings 9901.00.50 and 9901.00.52 of the Harmonized Tariff 
     Schedule of the United States are each amended in the 
     effective period column by striking ``1/1/2009'' and 
     inserting ``1/1/2011''.

     SEC. 15334. LIMITATIONS ON DUTY DRAWBACK ON CERTAIN IMPORTED 
                   ETHANOL.

       (a) In General.--Section 313(p) of the Tariff Act of 1930 
     (19 U.S.C. 1313(p)) is amended by adding at the end the 
     following new paragraph:
       ``(5) Special rules for ethyl alcohol.--For purposes of 
     this subsection, any duty paid under subheading 9901.00.50 of 
     the Harmonized Tariff Schedule of the United States on 
     imports of ethyl alcohol or a mixture of ethyl alcohol may 
     not be refunded if the exported article upon which a drawback 
     claim is based does not contain ethyl alcohol or a mixture of 
     ethyl alcohol.''.
       (b) Effective Date.--The amendment made by this section 
     applies with respect to--
       (1) imports of ethyl alcohol or a mixture of ethyl alcohol 
     entered for consumption, or withdrawn from warehouse for 
     consumption, on or after October 1, 2008; and
       (2) imports of ethyl alcohol or a mixture of ethyl alcohol 
     entered for consumption, or withdrawn from warehouse for 
     consumption, before October 1, 2008, if a duty drawback claim 
     is filed with respect to such imports on or after October 1, 
     2010.

                   PART III--AGRICULTURAL PROVISIONS

     SEC. 15341. INCREASE IN LOAN LIMITS ON AGRICULTURAL BONDS.

       (a) In General.--Subparagraph (A) of section 147(c)(2) 
     (relating to exception for first-time farmers) is amended by 
     striking ``$250,000'' and inserting ``$450,000''.
       (b) Inflation Adjustment.--Section 147(c)(2) is amended by 
     adding at the end the following new subparagraph:
       ``(H) Adjustments for inflation.--In the case of any 
     calendar year after 2008, the dollar amount in subparagraph 
     (A) shall be increased by an amount equal to--

[[Page H3570]]

       ``(i) such dollar amount, multiplied by
       ``(ii) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year, determined by 
     substituting `calendar year 2007' for `calendar year 1992' in 
     subparagraph (B) thereof.
     If any amount as increased under the preceding sentence is 
     not a multiple of $100, such amount shall be rounded to the 
     nearest multiple of $100.''.
       (c) Modification of Substantial Farmland Definition.--
     Section 147(c)(2)(E) (defining substantial farmland) is 
     amended by striking ``unless'' and all that follows through 
     the period and inserting ``unless such parcel is smaller than 
     30 percent of the median size of a farm in the county in 
     which such parcel is located.''.
       (d) Conforming Amendment.--Section 147(c)(2)(C)(i)(II) is 
     amended by striking ``$250,000'' and inserting ``the amount 
     in effect under subparagraph (A)''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.

     SEC. 15342. ALLOWANCE OF SECTION 1031 TREATMENT FOR EXCHANGES 
                   INVOLVING CERTAIN MUTUAL DITCH, RESERVOIR, OR 
                   IRRIGATION COMPANY STOCK.

       (a) In General.--Section 1031 (relating to exchange of 
     property held for productive use or investment) is amended by 
     adding at the end the following new subsection:
       ``(i) Special Rules for Mutual Ditch, Reservoir, or 
     Irrigation Company Stock.--For purposes of subsection 
     (a)(2)(B), the term `stocks' shall not include shares in a 
     mutual ditch, reservoir, or irrigation company if at the time 
     of the exchange--
       ``(1) the mutual ditch, reservoir, or irrigation company is 
     an organization described in section 501(c)(12)(A) 
     (determined without regard to the percentage of its income 
     that is collected from its members for the purpose of meeting 
     losses and expenses), and
       ``(2) the shares in such company have been recognized by 
     the highest court of the State in which such company was 
     organized or by applicable State statute as constituting or 
     representing real property or an interest in real 
     property.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to exchanges completed after the date of the 
     enactment of this Act.

     SEC. 15343. AGRICULTURAL CHEMICALS SECURITY CREDIT.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business related credits) is amended 
     by adding at the end the following new section:

     ``SEC. 45O. AGRICULTURAL CHEMICALS SECURITY CREDIT.

       ``(a) In General.--For purposes of section 38, in the case 
     of an eligible agricultural business, the agricultural 
     chemicals security credit determined under this section for 
     the taxable year is 30 percent of the qualified security 
     expenditures for the taxable year.
       ``(b) Facility Limitation.--The amount of the credit 
     determined under subsection (a) with respect to any facility 
     for any taxable year shall not exceed--
       ``(1) $100,000, reduced by
       ``(2) the aggregate amount of credits determined under 
     subsection (a) with respect to such facility for the 5 prior 
     taxable years.
       ``(c) Annual Limitation.--The amount of the credit 
     determined under subsection (a) with respect to any taxpayer 
     for any taxable year shall not exceed $2,000,000.
       ``(d) Qualified Chemical Security Expenditure.--For 
     purposes of this section, the term `qualified chemical 
     security expenditure' means, with respect to any eligible 
     agricultural business for any taxable year, any amount paid 
     or incurred by such business during such taxable year for--
       ``(1) employee security training and background checks,
       ``(2) limitation and prevention of access to controls of 
     specified agricultural chemicals stored at the facility,
       ``(3) tagging, locking tank valves, and chemical additives 
     to prevent the theft of specified agricultural chemicals or 
     to render such chemicals unfit for illegal use,
       ``(4) protection of the perimeter of specified agricultural 
     chemicals,
       ``(5) installation of security lighting, cameras, recording 
     equipment, and intrusion detection sensors,
       ``(6) implementation of measures to increase computer or 
     computer network security,
       ``(7) conducting a security vulnerability assessment,
       ``(8) implementing a site security plan, and
       ``(9) such other measures for the protection of specified 
     agricultural chemicals as the Secretary may identify in 
     regulation.
     Amounts described in the preceding sentence shall be taken 
     into account only to the extent that such amounts are paid or 
     incurred for the purpose of protecting specified agricultural 
     chemicals.
       ``(e) Eligible Agricultural Business.--For purposes of this 
     section, the term `eligible agricultural business' means any 
     person in the trade or business of--
       ``(1) selling agricultural products, including specified 
     agricultural chemicals, at retail predominantly to farmers 
     and ranchers, or
       ``(2) manufacturing, formulating, distributing, or aerially 
     applying specified agricultural chemicals.
       ``(f) Specified Agricultural Chemical.--For purposes of 
     this section, the term `specified agricultural chemical' 
     means--
       ``(1) any fertilizer commonly used in agricultural 
     operations which is listed under--
       ``(A) section 302(a)(2) of the Emergency Planning and 
     Community Right-to-Know Act of 1986,
       ``(B) section 101 of part 172 of title 49, Code of Federal 
     Regulations, or
       ``(C) part 126, 127, or 154 of title 33, Code of Federal 
     Regulations, and
       ``(2) any pesticide (as defined in section 2(u) of the 
     Federal Insecticide, Fungicide, and Rodenticide Act), 
     including all active and inert ingredients thereof, which is 
     customarily used on crops grown for food, feed, or fiber.
       ``(g) Controlled Groups.--Rules similar to the rules of 
     paragraphs (1) and (2) of section 41(f) shall apply for 
     purposes of this section.
       ``(h) Regulations.--The Secretary may prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section, including regulations which--
       ``(1) provide for the proper treatment of amounts which are 
     paid or incurred for purpose of protecting any specified 
     agricultural chemical and for other purposes, and
       ``(2) provide for the treatment of related properties as 
     one facility for purposes of subsection (b).
       ``(i) Termination.--This section shall not apply to any 
     amount paid or incurred after December 31, 2012.''.
       (b) Credit Allowed as Part of General Business Credit.--
     Section 38(b) is amended by striking ``plus'' at the end of 
     paragraph (30), by striking the period at the end of 
     paragraph (31) and inserting ``, plus'', and by adding at the 
     end the following new paragraph:
       ``(32) in the case of an eligible agricultural business (as 
     defined in section 45O(e)), the agricultural chemicals 
     security credit determined under section 45O(a).''.
       (c) Denial of Double Benefit.--Section 280C is amended by 
     adding at the end the following new subsection:
       ``(f) Credit for Security of Agricultural Chemicals.--No 
     deduction shall be allowed for that portion of the expenses 
     otherwise allowable as a deduction taken into account in 
     determining the credit under section 45O for the taxable year 
     which is equal to the amount of the credit determined for 
     such taxable year under section 45O(a).''.
       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 is amended by 
     adding at the end the following new item:

``Sec. 45O. Agricultural chemicals security credit.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred after the date of the 
     enactment of this Act.

     SEC. 15344. 3-YEAR DEPRECIATION FOR RACE HORSES THAT ARE 2-
                   YEARS OLD OR YOUNGER.

       (a) In General.--Clause (i) of section 168(e)(3)(A) 
     (relating to 3-year property) is amended to read as follows:
       ``(i) any race horse--

       ``(I) which is placed in service before January 1, 2014, 
     and
       ``(II) which is placed in service after December 31, 2013, 
     and which is more than 2 years old at the time such horse is 
     placed in service by such purchaser,''.

       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2008.

     SEC. 15345. TEMPORARY TAX RELIEF FOR KIOWA COUNTY, KANSAS AND 
                   SURROUNDING AREA.

       (a) In General.--Subject to the modifications described in 
     this section, the following provisions of or relating to the 
     Internal Revenue Code of 1986 shall apply to the Kansas 
     disaster area in addition to the areas to which such 
     provisions otherwise apply:
       (1) Section 1400N(d) of such Code (relating to special 
     allowance for certain property).
       (2) Section 1400N(e) of such Code (relating to increase in 
     expensing under section 179).
       (3) Section 1400N(f) of such Code (relating to expensing 
     for certain demolition and clean-up costs).
       (4) Section 1400N(k) of such Code (relating to treatment of 
     net operating losses attributable to storm losses).
       (5) Section 1400N(n) of such Code (relating to treatment of 
     representations regarding income eligibility for purposes of 
     qualified rental project requirements).
       (6) Section 1400N(o) of such Code (relating to treatment of 
     public utility property disaster losses).
       (7) Section 1400Q of such Code (relating to special rules 
     for use of retirement funds).
       (8) Section 1400R(a) of such Code (relating to employee 
     retention credit for employers).
       (9) Section 1400S(b) of such Code (relating to suspension 
     of certain limitations on personal casualty losses).
       (10) Section 405 of the Katrina Emergency Tax Relief Act of 
     2005 (relating to extension of replacement period for 
     nonrecognition of gain).
       (b) Kansas Disaster Area.--For purposes of this section, 
     the term ``Kansas disaster area'' means an area with respect 
     to which a major disaster has been declared by the President 
     under section 401 of the Robert T. Stafford Disaster Relief 
     and Emergency Assistance Act (FEMA-1699-DR, as in effect on 
     the date of the enactment of this Act) by reason of severe 
     storms and tornados beginning on May 4, 2007, and determined 
     by the President to warrant individual or individual and 
     public assistance from the Federal Government under such Act 
     with respect to damages attributable to such storms and 
     tornados.
       (c) References to Area or Loss.--
       (1) Area.--Any reference in such provisions to the Katrina 
     disaster area or the Gulf Opportunity Zone shall be treated 
     as a reference to the Kansas disaster area.
       (2) Loss.--Any reference in such provisions to any loss or 
     damage attributable to Hurricane

[[Page H3571]]

     Katrina shall be treated as a reference to any loss or damage 
     attributable to the May 4, 2007, storms and tornados.
       (d) References to Dates, etc.--
       (1) Special allowance for certain property acquired on or 
     after may 5, 2007.--Section 1400N(d) of such Code--
       (A) by substituting ``qualified Recovery Assistance 
     property'' for ``qualified Gulf Opportunity Zone property'' 
     each place it appears,
       (B) by substituting ``May 5, 2007'' for ``August 28, 2005'' 
     each place it appears,
       (C) by substituting ``December 31, 2008'' for ``December 
     31, 2007'' in paragraph (2)(A)(v),
       (D) by substituting ``December 31, 2009'' for ``December 
     31, 2008'' in paragraph (2)(A)(v),
       (E) by substituting ``May 4, 2007'' for ``August 27, 2005'' 
     in paragraph (3)(A),
       (F) by substituting ``January 1, 2009'' for ``January 1, 
     2008'' in paragraph (3)(B), and
       (G) determined without regard to paragraph (6) thereof.
       (2) Increase in expensing under section 179.--Section 
     1400N(e) of such Code, by substituting ``qualified section 
     179 Recovery Assistance property'' for ``qualified section 
     179 Gulf Opportunity Zone property'' each place it appears.
       (3) Expensing for certain demolition and clean-up costs.--
     Section 1400N(f) of such Code--
       (A) by substituting ``qualified Recovery Assistance clean-
     up cost'' for ``qualified Gulf Opportunity Zone clean-up 
     cost'' each place it appears, and
       (B) by substituting ``beginning on May 4, 2007, and ending 
     on December 31, 2009'' for ``beginning on August 28, 2005, 
     and ending on December 31, 2007'' in paragraph (2) thereof.
       (4) Treatment of net operating losses attributable to storm 
     losses.--Section 1400N(k) of such Code--
       (A) by substituting ``qualified Recovery Assistance loss'' 
     for ``qualified Gulf Opportunity Zone loss'' each place it 
     appears,
       (B) by substituting ``after May 3, 2007, and before on 
     January 1, 2010'' for ``after August 27, 2005, and before 
     January 1, 2008'' each place it appears,
       (C) by substituting ``May 4, 2007'' for ``August 28, 2005'' 
     in paragraph (2)(B)(ii)(I) thereof,
       (D) by substituting ``qualified Recovery Assistance 
     property'' for ``qualified Gulf Opportunity Zone property'' 
     in paragraph (2)(B)(iv) thereof, and
       (E) by substituting ``qualified Recovery Assistance 
     casualty loss'' for ``qualified Gulf Opportunity Zone 
     casualty loss'' each place it appears.
       (5) Special rules for use of retirement funds.--Section 
     1400Q of such Code--
       (A) by substituting ``qualified Recovery Assistance 
     distribution'' for ``qualified hurricane distribution'' each 
     place it appears,
       (B) by substituting ``on or after May 4, 2007, and before 
     January 1, 2009'' for ``on or after August 25, 2005, and 
     before January 1, 2007'' in subsection (a)(4)(A)(i),
       (C) by substituting ``May 4, 2007'' for ``August 28, 2005'' 
     in subsections (a)(4)(A)(i) and (c)(3)(B),
       (D) disregarding clauses (ii) and (iii) of subsection 
     (a)(4)(A),
       (E) by substituting ``qualified storm distribution'' for 
     ``qualified Katrina distribution'' each place it appears,
       (F) by substituting ``after November 4, 2006, and before 
     May 5, 2007'' for ``after February 28, 2005, and before 
     August 29, 2005'' in subsection (b)(2)(B)(ii),
       (G) by substituting ``the Kansas disaster area (as defined 
     in section 15345(b) of the Food, Conservation, and Energy Act 
     of 2008) but which was not so purchased or constructed on 
     account of the May 4, 2007, storms and tornados'' for ``the 
     Hurricane Katrina disaster area, but not so purchased or 
     constructed on account of Hurricane Katrina'' in subsection 
     (b)(2)(B)(iii),
       (H) by substituting ``beginning on May 4, 2007, and ending 
     on the date which is 5 months after the date of the enactment 
     of the Heartland, Habitat, Harvest, and Horticulture Act of 
     2008'' for ``beginning on August 25, 2005, and ending on 
     February 28, 2006'' in subsection (b)(3)(A),
       (I) by substituting ``qualified storm individual'' for 
     ``qualified Hurricane Katrina individual'' each place it 
     appears,
       (J) by substituting ``December 31, 2008'' for ``December 
     31, 2006'' in subsection (c)(2)(A),
       (K) by substituting ``beginning on the date of the 
     enactment of the Food, Conservation, and Energy Act of 2008 
     and ending on December 31, 2008'' for ``beginning on 
     September 24, 2005, and ending on December 31, 2006'' in 
     subsection (c)(4)(A)(i),
       (L) by substituting ``May 4, 2007'' for ``August 25, 2005'' 
     in subsection (c)(4)(A)(ii), and
       (M) by substituting ``January 1, 2009'' for ``January 1, 
     2007'' in subsection (d)(2)(A)(ii).
       (6) Employee retention credit for employers affected by may 
     4 storms and tornados.--Section 1400R(a) of the Internal 
     Revenue Code of 1986--
       (A) by substituting ``May 4, 2007'' for ``August 28, 2005'' 
     each place it appears,
       (B) by substituting ``January 1, 2008'' for ``January 1, 
     2006'' both places it appears, and
       (C) only with respect to eligible employers who employed an 
     average of not more than 200 employees on business days 
     during the taxable year before May 4, 2007.
       (7) Suspension of certain limitations on personal casualty 
     losses.--Section 1400S(b)(1) of the Internal Revenue Code of 
     1986, by substituting ``May 4, 2007'' for ``August 25, 
     2005''.
       (8) Extension of replacement period for nonrecognition of 
     gain.--Section 405 of the Katrina Emergency Tax Relief Act of 
     2005, by substituting ``on or after May 4, 2007'' for ``on or 
     after August 25, 2005''.

     SEC. 15346. COMPETITIVE CERTIFICATION AWARDS MODIFICATION 
                   AUTHORITY.

       (a) In General.--Section 48A (relating to qualifying 
     advanced coal project credit) is amended by adding at the end 
     the following new subsection:
       ``(h) Competitive Certification Awards Modification 
     Authority.--In implementing this section or section 48B, the 
     Secretary is directed to modify the terms of any competitive 
     certification award and any associated closing agreement 
     where such modification--
       ``(1) is consistent with the objectives of such section,
       ``(2) is requested by the recipient of the competitive 
     certification award, and
       ``(3) involves moving the project site to improve the 
     potential to capture and sequester carbon dioxide emissions, 
     reduce costs of transporting feedstock, and serve a broader 
     customer base,
     unless the Secretary determines that the dollar amount of tax 
     credits available to the taxpayer under such section would 
     increase as a result of the modification or such modification 
     would result in such project not being originally certified. 
     In considering any such modification, the Secretary shall 
     consult with other relevant Federal agencies, including the 
     Department of Energy.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act 
     and is applicable to all competitive certification awards 
     entered into under section 48A or 48B of the Internal Revenue 
     Code of 1986, whether such awards were issued before, on, or 
     after such date of enactment.

                   PART IV--OTHER REVENUE PROVISIONS

     SEC. 15351. LIMITATION ON EXCESS FARM LOSSES OF CERTAIN 
                   TAXPAYERS.

       (a) In General.--Section 461 (relating to general rule for 
     taxable year of deduction) is amended by adding at the end 
     the following new subsection:
       ``(j) Limitation on Excess Farm Losses of Certain 
     Taxpayers.--
       ``(1) Limitation.--If a taxpayer other than a C corporation 
     receives any applicable subsidy for any taxable year, any 
     excess farm loss of the taxpayer for the taxable year shall 
     not be allowed.
       ``(2) Disallowed loss carried to next taxable year.--Any 
     loss which is disallowed under paragraph (1) shall be treated 
     as a deduction of the taxpayer attributable to farming 
     businesses in the next taxable year.
       ``(3) Applicable subsidy.--For purposes of this subsection, 
     the term `applicable subsidy' means--
       ``(A) any direct or counter-cyclical payment under title I 
     of the Food, Conservation, and Energy Act of 2008, or any 
     payment elected to be received in lieu of any such payment, 
     or
       ``(B) any Commodity Credit Corporation loan.
       ``(4) Excess farm loss.--For purposes of this subsection--
       ``(A) In general.--The term `excess farm loss' means the 
     excess of--
       ``(i) the aggregate deductions of the taxpayer for the 
     taxable year which are attributable to farming businesses of 
     such taxpayer (determined without regard to whether or not 
     such deductions are disallowed for such taxable year under 
     paragraph (1)), over
       ``(ii) the sum of--

       ``(I) the aggregate gross income or gain of such taxpayer 
     for the taxable year which is attributable to such farming 
     businesses, plus
       ``(II) the threshold amount for the taxable year.

       ``(B) Threshold amount.--
       ``(i) In general.--The term `threshold amount' means, with 
     respect to any taxable year, the greater of--

       ``(I) $300,000 ($150,000 in the case of married individuals 
     filing separately), or
       ``(II) the excess (if any) of the aggregate amounts 
     described in subparagraph (A)(ii)(I) for the 5-consecutive 
     taxable year period preceding the taxable year over the 
     aggregate amounts described in subparagraph (A)(i) for such 
     period.

       ``(ii) Special rules for determining aggregate amounts.--
     For purposes of clause (i)(II)--

       ``(I) notwithstanding the disregard in subparagraph (A)(i) 
     of any disallowance under paragraph (1), in the case of any 
     loss which is carried forward under paragraph (2) from any 
     taxable year, such loss (or any portion thereof) shall be 
     taken into account for the first taxable year in which a 
     deduction for such loss (or portion) is not disallowed by 
     reason of this subsection, and
       ``(II) the Secretary shall prescribe rules for the 
     computation of the aggregate amounts described in such clause 
     in cases where the filing status of the taxpayer is not the 
     same for the taxable year and each of the taxable years in 
     the period described in such clause.

       ``(C) Farming business.--
       ``(i) In general.--The term `farming business' has the 
     meaning given such term in section 263A(e)(4).
       ``(ii) Certain trades and businesses included.--If, without 
     regard to this clause, a taxpayer is engaged in a farming 
     business with respect to any agricultural or horticultural 
     commodity--

       ``(I) the term `farming business' shall include any trade 
     or business of the taxpayer of the processing of such 
     commodity (without regard to whether the processing is 
     incidental to the growing, raising, or harvesting of such 
     commodity), and
       ``(II) if the taxpayer is a member of a cooperative to 
     which subchapter T applies, any trade or business of the 
     cooperative described in subclause (I) shall be treated as 
     the trade or business of the taxpayer.

       ``(D) Certain losses disregarded.--For purposes of 
     subparagraph (A)(i), there shall not be

[[Page H3572]]

     taken into account any deduction for any loss arising by 
     reason of fire, storm, or other casualty, or by reason of 
     disease or drought, involving any farming business.
       ``(5) Application of subsection in case of partnerships and 
     s corporations.--In the case of a partnership or S 
     corporation--
       ``(A) this subsection shall be applied at the partner or 
     shareholder level, and
       ``(B) each partner's or shareholder's proportionate share 
     of the items of income, gain, or deduction of the partnership 
     or S corporation for any taxable year from farming businesses 
     attributable to the partnership or S corporation, and of any 
     applicable subsidies received by the partnership or S 
     corporation during the taxable year, shall be taken into 
     account by the partner or shareholder in applying this 
     subsection to the taxable year of such partner or shareholder 
     with or within which the taxable year of the partnership or S 
     corporation ends.
     The Secretary may provide rules for the application of this 
     paragraph to any other pass-thru entity to the extent 
     necessary to carry out the provisions of this subsection.
       ``(6) Additional reporting.--The Secretary may prescribe 
     such additional reporting requirements as the Secretary 
     determines appropriate to carry out the purposes of this 
     subsection.
       ``(7) Coordination with section 469.--This subsection shall 
     be applied before the application of section 469.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2009.

     SEC. 15352. MODIFICATION TO OPTIONAL METHOD OF COMPUTING NET 
                   EARNINGS FROM SELF-EMPLOYMENT.

       (a) Amendments to the Internal Revenue Code of 1986.--
       (1) In general.--The matter following paragraph (17) of 
     section 1402(a) is amended--
       (A) by striking ``$2,400'' each place it appears and 
     inserting ``the upper limit'', and
       (B) by striking ``$1,600'' each place it appears and 
     inserting ``the lower limit''.
       (2) Definitions.--Section 1402 is amended by adding at the 
     end the following new subsection:
       ``(l) Upper and Lower Limits.--For purposes of subsection 
     (a)--
       ``(1) Lower limit.--The lower limit for any taxable year is 
     the sum of the amounts required under section 213(d) of the 
     Social Security Act for a quarter of coverage in effect with 
     respect to each calendar quarter ending with or within such 
     taxable year.
       ``(2) Upper limit.--The upper limit for any taxable year is 
     the amount equal to 150 percent of the lower limit for such 
     taxable year.''.
       (b) Amendments to the Social Security Act.--
       (1) In general.--The matter following paragraph (16) of 
     section 211(a) of the Social Security Act is amended--
       (A) by striking ``$2,400'' each place it appears and 
     inserting ``the upper limit'', and
       (B) by striking ``$1,600'' each place it appears and 
     inserting ``the lower limit''.
       (2) Definitions.--Section 211 of such Act is amended by 
     adding at the end the following new subsection:
       ``(k) Upper and Lower Limits.--For purposes of subsection 
     (a)--
       ``(1) The lower limit for any taxable year is the sum of 
     the amounts required under section 213(d) for a quarter of 
     coverage in effect with respect to each calendar quarter 
     ending with or within such taxable year.
       ``(2) The upper limit for any taxable year is the amount 
     equal to 150 percent of the lower limit for such taxable 
     year.''.
       (3) Conforming amendment.--Section 212 of such Act is 
     amended--
       (A) in subsection (b), by striking ``For'' and inserting 
     ``Except as provided in subsection (c), for''; and
       (B) by adding at the end the following new subsection:
       ``(c) For the purpose of determining average indexed 
     monthly earnings, average monthly wage, and quarters of 
     coverage in the case of any individual who elects the option 
     described in clause (ii) or (iv) in the matter following 
     section 211(a)(16) for any taxable year that does not begin 
     with or during a particular calendar year and end with or 
     during such year, the self-employment income of such 
     individual deemed to be derived during such taxable year 
     shall be allocated to the two calendar years, portions of 
     which are included within such taxable year, in the same 
     proportion to the total of such deemed self-employment income 
     as the sum of the amounts applicable under section 213(d) for 
     the calendar quarters ending with or within each such 
     calendar year bears to the lower limit for such taxable year 
     specified in section 211(k)(1).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 15353. INFORMATION REPORTING FOR COMMODITY CREDIT 
                   CORPORATION TRANSACTIONS.

       (a) In General.--Subpart A of part III of subchapter A of 
     chapter 61 (relating to information concerning persons 
     subject to special provisions) is amended by inserting after 
     section 6039I the following new section:

     ``SEC. 6039J. INFORMATION REPORTING WITH RESPECT TO COMMODITY 
                   CREDIT CORPORATION TRANSACTIONS.

       ``(a) Requirement of Reporting.--The Commodity Credit 
     Corporation, through the Secretary of Agriculture, shall make 
     a return, according to the forms and regulations prescribed 
     by the Secretary of the Treasury, setting forth any market 
     gain realized by a taxpayer during the taxable year in 
     relation to the repayment of a loan issued by the Commodity 
     Credit Corporation, without regard to the manner in which 
     such loan was repaid.
       ``(b) Statements to Be Furnished to Persons With Respect to 
     Whom Information Is Required.--The Secretary of Agriculture 
     shall furnish to each person whose name is required to be set 
     forth in a return required under subsection (a) a written 
     statement showing the amount of market gain reported in such 
     return.''.
       (b) Clerical Amendment.--The table of sections for subpart 
     A of part III of subchapter A of chapter 61 is amended by 
     inserting after the item relating to section 6039I the 
     following new item:

``Sec. 6039J. Information reporting with respect to Commodity Credit 
              Corporation transactions.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to loans repaid on or after January 1, 2007.

                 PART V--PROTECTION OF SOCIAL SECURITY

     SEC. 15361. PROTECTION OF SOCIAL SECURITY.

       To ensure that the assets of the trust funds established 
     under section 201 of the Social Security Act (42 U.S.C. 401) 
     are not reduced as a result of the enactment of this Act, the 
     Secretary of the Treasury shall transfer annually from the 
     general revenues of the Federal Government to those trust 
     funds the following amounts:
       (1) For fiscal year 2009, $5,000,000.
       (2) For fiscal year 2010, $9,000,000.
       (3) For fiscal year 2011, $8,000,000.
       (4) For fiscal year 2012, $7,000,000.
       (5) For fiscal year 2013, $8,000,000.
       (6) For fiscal year 2014, $8,000,000.
       (7) For fiscal year 2015, $8,000,000.
       (8) For fiscal year 2016, $6,000,000.
       (9) For fiscal year 2017, $7,000,000.

                      Subtitle D--Trade Provisions

              PART I--EXTENSION OF CERTAIN TRADE BENEFITS

     SEC. 15401. SHORT TITLE.

       This part may be cited as the ``Haitian Hemispheric 
     Opportunity through Partnership Encouragement Act of 2008'' 
     or the ``HOPE II Act''.

     SEC. 15402. BENEFITS FOR APPAREL AND OTHER TEXTILE ARTICLES.

       (a) Value-Added Rule.--Section 213A(b) of the Carribean 
     Basin Economic Recovery Act (19 U.S.C. 2703a(b)) is amended 
     as follows:
       (1) The subsection heading is amended to read as follows: 
     ``Apparel and Other Textile Articles''.
       (2) Paragraph (1) is amended to read as follows:
       ``(1) Value-added rule for apparel articles.--
       ``(A) In general.--Apparel articles described in 
     subparagraph (B) of a producer or entity controlling 
     production that are imported directly from Haiti or the 
     Dominican Republic shall enter the United States free of duty 
     during an applicable 1-year period, subject to the 
     limitations set forth in subparagraphs (B) and (C), and 
     subject to subparagraph (D).''.
       (3) Paragraph (2) is amended--
       (A) in subparagraph (A)--
       (i) by moving such subparagraph 2 ems to the right;
       (ii) in clause (i), by striking ``subparagraph (C)'' and 
     inserting ``clause (iii)'';
       (iii) in clause (ii), by striking ``subparagraph (C)'' and 
     inserting ``clause (iii)'';
       (iv) in the matter following clause (ii), by striking 
     ``subparagraph (E)(I)'' and inserting ``clause (v)(I)'';
       (v) by redesignating clauses (i) and (ii) as subclauses (I) 
     and (II), respectively; and
       (vi) by redesignating subparagraph (A) as clause (i);
       (B) in subparagraph (B)--
       (i) by moving such subparagraph 2 ems to the right;
       (ii) by striking ``subparagraph (A)(i)'' each place it 
     appears and inserting ``clause (i)(I)'';
       (iii) by redesignating clauses (i) and (ii) as subclauses 
     (I) and (II), respectively; and
       (iv) by redesignating subparagraph (B) as clause (ii);
       (C) in subparagraph (C)--
       (i) by moving such subparagraph 2 ems to the right;
       (ii) in the matter preceding clause (i), by striking 
     ``subparagraph (A)'' and inserting ``clause (i)'';
       (iii) in clause (ii), by striking ``that enters into 
     force'' and all that follows through ``et seq.)'' and 
     inserting ``that enters into force thereafter'';
       (iv) by redesignating clauses (i) through (v) as subclauses 
     (I) through (V), respectively; and
       (v) by redesignating subparagraph (C) as clause (iii);
       (D) in subparagraph (D)--
       (i) by moving such subparagraph 2 ems to the right;
       (ii) in clause (i)--

       (I) in the matter preceding subclause (I), by striking 
     ``subparagraph (A)'' and inserting ``clause (i)'';
       (II) in subclause (I), by striking ``clause (i) of 
     subparagraph (A)'' and inserting ``subclause (I) of clause 
     (i)'';
       (III) in subclause (II), by striking ``clause (ii) of 
     subparagraph (A)'' and inserting ``subclause (II) of clause 
     (i)'';
       (IV) by redesignating subclauses (I) and (II) as items (aa) 
     and (bb), respectively; and
       (V) by redesignating clause (i) as subclause (I);

       (iii) in clause (ii)--

       (I) in the matter preceding subclause (I), by striking 
     ``subparagraph (A)'' and inserting ``clause (i)'';
       (II) in subclause (I), by striking ``clause (i) of 
     subparagraph (A)'' and inserting ``subclause (I) of clause 
     (i)'';
       (III) in subclause (II), by striking ``clause (ii) of 
     subparagraph (A)'' and inserting ``subclause (II) of clause 
     (i)'';
       (IV) by redesignating subclauses (I) and (II) as items (aa) 
     and (bb), respectively; and

[[Page H3573]]

       (V) by redesignating clause (ii) as subclause (II);

       (iv) in clause (iii)--

       (I) by striking ``clause (i)(I) or (ii)(I)'' each place it 
     appears and inserting ``subclause (I)(aa) or (II)(aa)'';
       (II) by redesignating subclauses (I) and (II) as items (aa) 
     and (bb), respectively; and
       (III) by redesignating clause (iii) as subclause (III);

       (v) by amending clause (iv) to read as follows:

       ``(IV) Inclusion in calculation of other articles receiving 
     preferential treatment.--Entries of apparel articles that 
     receive preferential treatment under any provision of law 
     other than this subparagraph or are subject to the `General' 
     column 1 rate of duty under the HTS are not included in the 
     annual aggregation under subclause (I) or (II) unless the 
     producer or entity controlling production elects, at the time 
     the annual aggregation calculation is made, to include such 
     entries in such aggregation.''; and

       (vi) by redesignating subparagraph (D) as clause (iv);
       (E) in subparagraph (E)--
       (i) by moving such subparagraph 2 ems to the right;
       (ii) in clause (i)--

       (I) by redesignating subclauses (I) through (III) as items 
     (aa) through (cc), respectively; and
       (II) by redesignating clause (i) as subclause (I);

       (iii) in clause (ii)--

       (I) by striking ``subparagraph (C)'' and inserting ``clause 
     (iii)''; and
       (II) by redesignating clause (ii) as subclause (II); and

       (iv) by redesignating subparagraph (E) as clause (v);
       (F) in subparagraph (F)--
       (i) by moving such subparagraph 2 ems to the right;
       (ii) in clause (i)--

       (I) by striking ``The Bureau of Customs and Border 
     Protection'' and inserting ``U.S. Customs and Border 
     Protection'';
       (II) by striking ``subparagraphs (A) and (D)'' and 
     inserting ``clauses (i) and (iv)''; and
       (III) by redesignating clause (i) as subclause (I);

       (iii) in clause (ii)--

       (I) in the matter preceding subclause (I)--

       (aa) by striking ``the Bureau of Customs and Border 
     Protection'' and inserting ``U.S. Customs and Border 
     Protection'';
       (bb) by striking ``subparagraph (A)'' each place it appears 
     and inserting ``clause (i)''; and
       (cc) by striking ``subparagraph (D)'' and inserting 
     ``clause (iv)'';

       (II) in subclause (I), by striking ``clause (i) of 
     subparagraph (A)'' and inserting ``subclause (I) of clause 
     (i)'';
       (III) in subclause (II), by striking ``clause (ii) of 
     subparagraph (A)'' and inserting ``subclause (II) of clause 
     (i)'';
       (IV) in the matter following subclause (II), by striking 
     ``subparagraph (E)(i)'' and inserting ``clause (v)(I)'';
       (V) by redesignating subclauses (I) and (II) as items (aa) 
     and (bb), respectively; and
       (VI) by redesignating clause (ii) as subclause (II);

       (iv) in clause (iii)--

       (I) in subclause (I)--

       (aa) by striking ``paragraph (1)'' and inserting 
     ``subparagraph (A)''; and
       (bb) by striking ``subparagraph (A) or (D)'' and inserting 
     ``clause (i) or (iv)'';

       (II) in subclause (II), by striking ``clause (ii) of this 
     subparagraph'' and inserting ``subclause (II) of this 
     clause'';
       (III) in the matter following subclause (II)--

       (aa) by striking ``the Bureau of Customs and Border 
     Protection'' each place it appears and inserting ``U.S. 
     Customs and Border Protection''; and
       (bb) by striking ``subclause (II)'' and inserting ``item 
     (bb)''; and

       (IV) in item (bb)--

       (aa) by striking ``paragraph (1)'' and inserting 
     ``subparagraph (A)''; and
       (bb) by striking ``subparagraph (A) or (D)'' and inserting 
     ``clause (i) or (iv)''; and

       (V) in the matter following item (bb), by striking 
     ``paragraph (1)'' and inserting ``subparagraph (A)'';
       (VI) by redesignating items (aa) and (bb) as subitems (AA) 
     and (BB), respectively;
       (VII) by redesignating subclauses (I) and (II) as items 
     (aa) and (bb), respectively; and
       (VIII) by redesignating clause (iii) as subclause (III); 
     and

       (v) by redesignating subparagraph (F) as clause (vi);
       (G) in subparagraph (G)--
       (i) by moving such subparagraph 2 ems to the right;
       (ii) in clause (i)--

       (I) in the matter preceding subclause (I), by striking 
     ``subparagraph (A) or (D)'' and inserting ``clause (i) or 
     (iv)'';
       (II) in subclause (II)--

       (aa) in item (dd), by striking ``under the Bipartisan Trade 
     Promotion Authority Act of 2002'' and inserting ``with 
     respect to the United States''; and
       (bb) by redesignating items (aa) through (dd) as subitems 
     (AA) through (DD), respectively;

       (III) by redesignating subclauses (I) and (II) as items 
     (aa) and (bb), respectively; and
       (IV) by redesignating clause (i) as subclause (I);

       (iii) in clause (ii)--

       (I) in subclause (I), by striking ``clause (i)(I)'' and 
     inserting ``subclause (I)(aa)'';
       (II) in subclause (II), by striking ``clause (i)(II)'' and 
     inserting ``subclause (I)(bb)'';
       (III) by redesignating subclauses (I) and (II) as items 
     (aa) and (bb), respectively; and
       (IV) by redesignating clause (ii) as subclause (II); and

       (iv) by redesignating subparagraph (G) as clause (vii); and
       (H) by striking ``(2) Apparel articles described.--'' and 
     inserting the following:
       ``(B) Apparel articles described.--''.
       (4) Paragraph (3) is amended--
       (A) by redesignating such paragraph as subparagraph (C) and 
     moving it 2 ems to the right;
       (B) by striking ``paragraph (1)'' each place it appears and 
     inserting ``subparagraph (A)''; and
       (C) in the table--
       (i) by striking ``1.5 percent'' and inserting ``1.25 
     percent'';
       (ii) by striking ``1.75 percent'' and inserting ``1.25 
     percent''; and
       (iii) by striking ``2 percent'' and inserting ``1.25 
     percent''.
       (5) The following is added after subparagraph (C), as 
     redesignated by paragraph (4)(A) of this subsection:
       ``(D) Other preferential treatment not affected by 
     quantitative limitations.--Any apparel article that qualifies 
     for preferential treatment under paragraph (2), (3), (4), or 
     (5) or any other provision of this title shall not be subject 
     to, or included in the calculation of, the quantitative 
     limitations under subparagraph (C).''.
       (b) Special Rule for Woven Articles and Certain Knit 
     Articles.--Section 213A(b) of the Carribean Basin Economic 
     Recovery Act is amended by striking paragraph (4) and 
     inserting the following:
       ``(2) Special rule for woven articles and certain knit 
     articles.--
       ``(A) Special rule for articles of chapter 62 of the hts.--
       ``(i) General rule.--Any apparel article classifiable under 
     chapter 62 of the HTS that is wholly assembled, or knit-to-
     shape, in Haiti from any combination of fabrics, fabric 
     components, components knit-to-shape, or yarns and is 
     imported directly from Haiti or the Dominican Republic shall 
     enter the United States free of duty, subject to clauses (ii) 
     and (iii), without regard to the source of the fabric, fabric 
     components, components knit-to-shape, or yarns from which the 
     article is made.
       ``(ii) Limitation.--The preferential treatment described in 
     clause (i) shall be extended, in the 1-year period beginning 
     October 1, 2008, and in each of the 9 succeeding 1-year 
     periods, to not more than 70,000,000 square meter equivalents 
     of apparel articles described in such clause.
       ``(iii) Other preferential treatment not affected by 
     quantitative limitation.--Any apparel article that qualifies 
     for preferential treatment under paragraph (1), (3), (4), or 
     (5) or subparagraph (B) of this paragraph or any other 
     provision of this title shall not be subject to, or included 
     in the calculation of, the quantitative limitation under 
     clause (ii).
       ``(B) Special rule for certain articles of chapter 61 of 
     the hts.--
       ``(i) General rule.--Any apparel article classifiable under 
     chapter 61 of the HTS that is wholly assembled, or knit-to-
     shape, in Haiti from any combination of fabrics, fabric 
     components, components knit-to-shape, or yarns and is 
     imported directly from Haiti or the Dominican Republic shall 
     enter the United States free of duty, subject to clauses 
     (ii), (iii), and (iv), without regard to the source of the 
     fabric, fabric components, components knit-to-shape, or yarns 
     from which the article is made.
       ``(ii) Exclusions.--The preferential treatment described in 
     clause (i) shall not apply to the following:

       ``(I) The following apparel articles of cotton, for men or 
     boys, that are classifiable under subheading 6109.10.00 of 
     the HTS:

       ``(aa) All white T-shirts, with short hemmed sleeves and 
     hemmed bottom, with crew or round neckline or with V-neck and 
     with a mitered seam at the center of the V, and without 
     pockets, trim, or embroidery.
       ``(bb) All white singlets, without pockets, trim, or 
     embroidery.
       ``(cc) Other T-shirts, but not including thermal 
     undershirts.

       ``(II) T-shirts for men or boys that are classifiable under 
     subheading 6109.90.10.
       ``(III) The following apparel articles of cotton, for men 
     or boys, that are classifiable under subheading 6110.20.20 of 
     the HTS:

       ``(aa) Sweatshirts.
       ``(bb) Pullovers, other than sweaters, vests, or garments 
     imported as part of playsuits.

       ``(IV) Sweatshirts for men or boys, of man-made fibers and 
     containing less than 65 percent by weight of man-made fibers, 
     that are classifiable under subheading 6110.30.30 of the HTS.

       ``(iii) Limitation.--The preferential treatment described 
     in clause (i) shall be extended, in the 1-year period 
     beginning October 1, 2008, and in each of the 9 succeeding 1-
     year periods, to not more than 70,000,000 square meter 
     equivalents of apparel articles described in such clause.
       ``(iv) Other preferential treatment not affected by 
     quantitative limitation.--Any apparel article that qualifies 
     for preferential treatment under paragraph (1), (3), (4), or 
     (5) or subparagraph (A) of this paragraph or any other 
     provision of this title shall not be subject to, or included 
     in the calculation of, the quantitative limitation under 
     clause (iii).''.
       (c) Single Transformation Rules Not Subject to Quantitative 
     Limitations.--Section 213A(b) of the Caribbean Basin Economic 
     Recovery Act is amended by striking paragraph (5) and 
     inserting the following:
       ``(3) Apparel and other articles subject to certain 
     assembly rules.--
       ``(A) Brassieres.--Any apparel article classifiable under 
     subheading 6212.10 of the HTS that is wholly assembled, or 
     knit-to-shape, in Haiti from any combination of fabrics, 
     fabric components, components knit-to-shape, or yarns and is 
     imported directly from Haiti or the Dominican Republic shall 
     enter the United States free of duty, without regard to the 
     source of the fabric,

[[Page H3574]]

     fabric components, components knit-to-shape, or yarns from 
     which the article is made.
       ``(B) Other apparel articles.--Any of the following apparel 
     articles that is wholly assembled, or knit-to-shape, in Haiti 
     from any combination of fabrics, fabric components, 
     components knit-to-shape, or yarns and is imported directly 
     from Haiti or the Dominican Republic shall enter the United 
     States free of duty, without regard to the source of the 
     fabric, fabric components, components knit-to-shape, or yarns 
     from which the article is made:
       ``(i) Any apparel article that is of a type listed in 
     chapter rule 3, 4, or 5 for chapter 61 of the HTS (as such 
     chapter rules are contained in section A of the Annex to 
     Proclamation 8213 of the President of December 20, 2007) as 
     being excluded from the scope of such chapter rule, when such 
     chapter rule is applied to determine whether an apparel 
     article is an originating good for purposes of general note 
     29(n) to the HTS, except that, for purposes of this clause, 
     reference in such chapter rules to `6104.12.00' shall be 
     deemed to be a reference to `6104.19.60'.
       ``(ii)(I) Subject to subclause (II), any apparel article 
     that is of a type listed in chapter rule 3(a), 4(a), or 5(a) 
     for chapter 62 of the HTS, as such chapter rules are 
     contained in paragraph 9 of section A of the Annex to 
     Proclamation 8213 of the President of December 20, 2007.
       ``(II) Subclause (I) shall not include any apparel article 
     to which subparagraph (A) of this paragraph applies.
       ``(C) Luggage and similar items.--Any article classifiable 
     under subheading 4202.12, 4202.22, 4202.32 or 4202.92 of the 
     HTS that is wholly assembled in Haiti and is imported 
     directly from Haiti or the Dominican Republic shall enter the 
     United States free of duty, without regard to the source of 
     the fabric, components, or materials from which the article 
     is made.
       ``(D) Headgear.--Any article classifiable under heading 
     6501, 6502, or 6504 of the HTS, or under subheading 6505.90 
     of the HTS, that is wholly assembled, knit-to-shape, or 
     formed in Haiti from any combination of fabrics, fabric 
     components, components knit-to-shape, or yarns and is 
     imported directly from Haiti or the Dominican Republic shall 
     enter the United States free of duty, without regard to the 
     source of the fabric, fabric components, components knit-to-
     shape, or yarns from which the article is made.
       ``(E) Certain sleepwear.--Any of the following apparel 
     articles that is wholly assembled, or knit-to-shape, in Haiti 
     from any combination of fabrics, fabric components, 
     components knit-to-shape, or yarns and is imported directly 
     from Haiti or the Dominican Republic shall enter the United 
     States free of duty, without regard to the source of the 
     fabric, fabric components, components knit-to-shape, or yarns 
     from which the article is made:
       ``(i) Pajama bottoms and other sleepwear for women and 
     girls, of cotton, that are classifiable under subheading 
     6208.91.30, or of man-made fibers, that are classifiable 
     under subheading 6208.92.00.
       ``(ii) Pajama bottoms and other sleepwear for girls, of 
     other textile materials, that are classifiable under 
     subheading 6208.99.20.''.
       (d) Earned Import Allowance Rules.--Section 231A(b) of the 
     Caribbean Basin Economic Recovery Act is amended by adding at 
     the end the following new paragraph:
       ``(4) Earned import allowance rule.--
       ``(A) In general.--Apparel articles wholly assembled, or 
     knit-to-shape, in Haiti from any combination of fabrics, 
     fabric components, components knit-to-shape, or yarns and 
     imported directly from Haiti or the Dominican Republic shall 
     enter the United States free of duty, without regard to the 
     source of the fabric, fabric components, components knit-to-
     shape, or yarns from which the articles are made, if such 
     apparel articles are accompanied by an earned import 
     allowance certificate that reflects the amount of credits 
     equal to the total square meter equivalents of such apparel 
     articles, in accordance with the program established under 
     subparagraph (B). For purposes of determining the quantity of 
     square meter equivalents under this subparagraph, the 
     conversion factors listed in `Correlation: U.S. Textile and 
     Apparel Industry Category System with the Harmonized Tariff 
     Schedule of the United States of America, 2008', or its 
     successor publications, of the United States Department of 
     Commerce, shall apply.
       ``(B) Earned import allowance program.--
       ``(i) Establishment.--The Secretary of Commerce shall 
     establish a program to provide earned import allowance 
     certificates to any producer or entity controlling production 
     for purposes of subparagraph (A), based on the elements 
     described in clause (ii).
       ``(ii) Elements.--The elements referred to in clause (i) 
     are the following:

       ``(I) One credit shall be issued to a producer or an entity 
     controlling production for every three square meter 
     equivalents of qualifying woven fabric or qualifying knit 
     fabric that the producer or entity controlling production can 
     demonstrate that it purchased for the manufacture in Haiti of 
     articles like or similar to any article eligible for 
     preferential treatment under subparagraph (A). The Secretary 
     of Commerce shall, if requested by a producer or entity 
     controlling production, create and maintain an account for 
     such producer or entity controlling production, into which 
     such credits shall be deposited.
       ``(II) Such producer or entity controlling production may 
     redeem credits issued under subclause (I) for earned import 
     allowance certificates reflecting such number of earned 
     credits as the producer or entity may request and has 
     available.
       ``(III) The Secretary of Commerce may require any textile 
     mill or other entity located in the United States that 
     exports to Haiti qualifying woven fabric or qualifying knit 
     fabric to submit, upon such export or upon request, 
     documentation, such as a Shipper's Export Declaration, to the 
     Secretary of Commerce--

       ``(aa) verifying that the qualifying woven fabric or 
     qualifying knit fabric was exported to a producer in Haiti or 
     to an entity controlling production; and
       ``(bb) identifying such producer or entity controlling 
     production, and the quantity and description of qualifying 
     woven fabric or qualifying knit fabric exported to such 
     producer or entity controlling production.

       ``(IV) The Secretary of Commerce may require that a 
     producer or entity controlling production submit 
     documentation to verify purchases of qualifying woven fabric 
     or qualifying knit fabric.
       ``(V) The Secretary of Commerce may make available to each 
     person or entity identified in documentation submitted under 
     subclause (III) or (IV) information contained in such 
     documentation that relates to the purchase of qualifying 
     woven fabric or qualifying knit fabric involving such person 
     or entity.
       ``(VI) The program under this subparagraph shall be 
     established so as to allow, to the extent feasible, the 
     submission, storage, retrieval, and disclosure of information 
     in electronic format, including information with respect to 
     the earned import allowance certificates required under 
     subparagraph (A)(i).
       ``(VII) The Secretary of Commerce may reconcile 
     discrepancies in information provided under subclause (III) 
     or (IV) and verify the accuracy of such information.
       ``(VIII) The Secretary of Commerce shall establish 
     procedures to carry out the program under this subparagraph 
     and may establish additional requirements to carry out this 
     subparagraph. Such additional requirements may include--

       ``(aa) submissions by textile mills or other entities in 
     the United States documenting exports of yarns wholly formed 
     in the United States to countries described in paragraph 
     (1)(B)(iii) for the manufacture of qualifying knit fabric; 
     and
       ``(bb) procedures imposed on producers or entities 
     controlling production to allow the Secretary of Commerce to 
     obtain and verify information relating to the production of 
     qualifying knit fabric.
       ``(iii) Qualifying woven fabric defined.--For purposes of 
     this subparagraph, the term `qualifying woven fabric' means 
     fabric wholly formed in the United States from yarns wholly 
     formed in the United States, except that--

       ``(I) fabric otherwise eligible as qualifying woven fabric 
     shall not be ineligible as qualifying woven fabric because 
     the fabric contains nylon filament yarn to which section 
     213(b)(2)(A)(vii)(IV) applies;
       ``(II) fabric that would otherwise be ineligible as 
     qualifying woven fabric because the fabric contains yarns not 
     wholly formed in the United States shall not be ineligible as 
     qualifying woven fabric if the total weight of all such yarns 
     is not more than 10 percent of the total weight of the 
     fabric; and
       ``(III) fabric otherwise eligible as qualifying woven 
     fabric shall not be ineligible as qualifying fabric because 
     the fabric contains yarns covered by clause (i) or (ii) of 
     paragraph (5)(A).

       ``(iv) Qualifying knit fabric defined.--For purposes of 
     this subparagraph, the term `qualifying knit fabric' means 
     fabric or knit-to-shape components wholly formed or knit-to-
     shape in any country or any combination of countries 
     described in paragraph (1)(B)(iii), from yarns wholly formed 
     in the United States, except that--

       ``(I) fabric or knit-to-shape components otherwise eligible 
     as qualifying knit fabric shall not be ineligible as 
     qualifying knit fabric because the fabric or knit-to-shape 
     components contain nylon filament yarn to which section 
     213(b)(2)(A)(vii)(IV) applies;
       ``(II) fabric or knit-to-shape components that would 
     otherwise be ineligible as qualifying knit fabric because the 
     fabric or knit-to-shape components contain yarns not wholly 
     formed in the United States shall not be ineligible as 
     qualifying knit fabric if the total weight of all such yarns 
     is not more than 10 percent of the total weight of the fabric 
     or knit-to-shape components; and
       ``(III) fabric or knit-to-shape components otherwise 
     eligible as qualifying knit fabric shall not be ineligible as 
     qualifying knit fabric because the fabric or knit-to-shape 
     components contain yarns covered by clause (i) or (ii) of 
     paragraph (5)(A).

       ``(C) Review by united states government accountability 
     office.--The United States Government Accountability Office 
     shall review the program established under subparagraph (B) 
     annually for the purpose of evaluating the effectiveness of, 
     and making recommendations for improvements in, the program.
       ``(D) Enforcement provisions.--
       ``(i) Fraudulent claims of preference.--Any person who 
     makes a false claim for preference under the program 
     established under subparagraph (B) shall be subject to any 
     applicable civil or criminal penalty that may be imposed 
     under the customs laws of the United States or under title 
     18, United States Code.
       ``(ii) Penalties for other fraudulent information.--The 
     Secretary of Commerce may establish and impose penalties for 
     the submission to the Secretary of Commerce of fraudulent 
     information under the program established under subparagraph 
     (B), other than a claim described in clause (i).''.
       (e) Short Supply Rules.--Section 213A(b) of the Caribbean 
     Basin Economic Recovery Act is amended by adding at the end 
     the following:
       ``(5) Short supply provision.--
       ``(A) In general.--Any apparel article that is wholly 
     assembled, or knit-to-shape, in Haiti from any combination of 
     fabrics, fabric components, components knit-to-shape, or 
     yarns and is imported directly from Haiti or the Dominican 
     Republic shall enter the United States free of duty, without 
     regard to the source of the fabrics, fabric components, 
     components knit-to-

[[Page H3575]]

     shape, or yarns from which the article is made, if the 
     fabrics, fabric components, components knit-to-shape, or 
     yarns comprising the component that determines the tariff 
     classification of the article are of any of the following:
       ``(i) Fabrics or yarns, to the extent that apparel articles 
     of such fabrics or yarns would be eligible for preferential 
     treatment, without regard to the source of the fabrics or 
     yarns, under Annex 401 of the NAFTA.
       ``(ii) Fabrics or yarns, to the extent that such fabrics or 
     yarns are designated as not being available in commercial 
     quantities for purposes of--

       ``(I) section 213(b)(2)(A)(v) of this Act;
       ``(II) section 112(b)(5) of the African Growth and 
     Opportunity Act;
       ``(III) clause (i)(III) or (ii) of section 204(b)(3)(B) of 
     the Andean Trade Preference Act; or
       ``(IV) any other provision, relating to determining whether 
     a textile or apparel article is an originating good eligible 
     for preferential treatment, of a law that implements a free 
     trade agreement entered into by the United States that is in 
     effect at the time the claim for preferential treatment is 
     made.

       ``(B) Removal of designation of fabrics or yarns not 
     available in commercial quantities.--If the President 
     determines that--
       ``(i) any fabric or yarn described in clause (i) of 
     subparagraph (A) was determined to be eligible for 
     preferential treatment, or
       ``(ii) any fabric or yarn described in clause (ii) of 
     subparagraph (A) was designated as not being available in 
     commercial quantities,
     on the basis of fraud, the President is authorized to remove 
     the eligibility or designation (as the case may be) of that 
     fabric or yarn with respect to articles entered after such 
     removal.''.
       (f) Miscellaneous Provisions.--
       (1) Relationship to other preferential programs.--Section 
     213A(b) of the Caribbean Basin Economic Recovery Act is 
     amended by adding at the end the following:
       ``(6) Other preferential treatment not affected.--The duty-
     free treatment provided under this subsection is in addition 
     to any other preferential treatment under this title.''.
       (2) Definitions.--Section 213A(a) of the Caribbean Basin 
     Economic Recovery Act (19 U.S.C. 2703a(a)) is amended by 
     adding at the end the following:
       ``(3) Imported directly from haiti or the dominican 
     republic.--Articles are `imported directly from Haiti or the 
     Dominican Republic' if--
       ``(A) the articles are shipped directly from Haiti or the 
     Dominican Republic into the United States without passing 
     through the territory of any intermediate country; or
       ``(B) the articles are shipped from Haiti or the Dominican 
     Republic into the United States through the territory of an 
     intermediate country, and--
       ``(i) the articles in the shipment do not enter into the 
     commerce of any intermediate country, and the invoices, bills 
     of lading, and other shipping documents specify the United 
     States as the final destination; or
       ``(ii) the invoices and other documents do not specify the 
     United States as the final destination, but the articles in 
     the shipment--

       ``(I) remain under the control of the customs authority in 
     the intermediate country;
       ``(II) do not enter into the commerce of the intermediate 
     country except for the purpose of a sale other than at 
     retail; and
       ``(III) have not been subjected to operations in the 
     intermediate country other than loading, unloading, or other 
     activities necessary to preserve the articles in good 
     condition.

       ``(4) Knit-to-shape.--A good is `knit-to-shape' if 50 
     percent or more of the exterior surface area of the good is 
     formed by major parts that have been knitted or crocheted 
     directly to the shape used in the good, with no consideration 
     being given to patch pockets, appliques, or the like. Minor 
     cutting, trimming, or sewing of those major parts shall not 
     affect the determination of whether a good is `knit-to-
     shape.'
       ``(5) Wholly assembled.--A good is `wholly assembled' in 
     Haiti if all components, of which there must be at least two, 
     pre-existed in essentially the same condition as found in the 
     finished good and were combined to form the finished good in 
     Haiti. Minor attachments and minor embellishments (for 
     example, appliques, beads, spangles, embroidery, and buttons) 
     not appreciably affecting the identity of the good, and minor 
     subassemblies (for example, collars, cuffs, plackets, and 
     pockets), shall not affect the determination of whether a 
     good is `wholly assembled' in Haiti.''.
       (g) Termination.--Section 213A of the Caribbean Basin 
     Economic Recovery Act (19 U.S.C. 2703a) is amended by adding 
     at the end the following new subsection:
       ``(g) Termination.--Except as provided in subsection 
     (b)(1), the duty-free treatment provided under this section 
     shall remain in effect until September 30, 2018.''.
       (h) Conforming Amendments.--Subsection (e)(1) of section 
     213A of the Caribbean Basin Economic Recovery Act (19 U.S.C. 
     2703a(e)(1)) is amended by striking ``the Bureau of Customs 
     and Border Protection'' each place it appears and inserting 
     ``U.S. Customs and Border Protection''.

     SEC. 15403. LABOR OMBUDSMAN AND TECHNICAL ASSISTANCE 
                   IMPROVEMENT AND COMPLIANCE NEEDS ASSESSMENT AND 
                   REMEDIATION PROGRAM.

       Section 213A of the Caribbean Basin Economic Recovery Act 
     (19 U.S.C. 2703a), as amended by section 15402 of this Act, 
     is amended--
       (1) in subsection (a)--
       (A) by redesignating paragraph (5) as paragraph (8):
       (B) by redesignating paragraphs (2) through (4) as 
     paragraphs (4) through (6), respectively;
       (C) by inserting after paragraph (1) the following new 
     paragraphs:
       ``(2) Appropriate congressional committees.--. The term 
     ``appropriate congressional committees'' means the Committee 
     on Finance of the Senate and the Committee on Ways and Means 
     of the House of Representatives.
       ``(3) Core labor standards.--The term ``core labor 
     standards'' means--
       ``(A) freedom of association;
       ``(B) the effective recognition of the right to bargain 
     collectively;
       ``(C) the elimination of all forms of compulsory or forced 
     labor;
       ``(D) the effective abolition of child labor and a 
     prohibition on the worst forms of child labor; and
       ``(E) the elimination of discrimination in respect of 
     employment and occupation.''; and
       (D) by inserting after paragraph (6) (as redesignated) the 
     following new paragraph:
       ``(7) TAICNAR program.--The term `TAICNAR Program' means 
     the Technical Assistance Improvement and Compliance Needs 
     Assessment and Remediation Program established pursuant to 
     subsection (e).'';
       (2) by redesignating subsections (e), (f), and (g) as 
     subsections (f), (g), and (h), respectively; and
       (3) by inserting after subsection (d) the following new 
     subsection:
       ``(e) Technical Assistance Improvement and Compliance Needs 
     Assessment and Remediation Program.--
       ``(1) Continued eligibility for preferences.--
       ``(A) Presidential certification of compliance by haiti 
     with requirements.--Upon the expiration of the 16-month 
     period beginning on the date of the enactment of the Haitian 
     Hemispheric Opportunity through Partnership Encouragement Act 
     of 2008, Haiti shall continue to be eligible for the 
     preferential treatment provided under subsection (b) only if 
     the President determines and certifies to the Congress that--
       ``(i) Haiti has implemented the requirements set forth in 
     paragraphs (2) and (3); and
       ``(ii) Haiti has agreed to require producers of articles 
     for which duty-free treatment may be requested under 
     subsection (b) to participate in the TAICNAR Program 
     described in paragraph (3) and has developed a system to 
     ensure participation in such program by such producers, 
     including by developing and maintaining the registry 
     described in paragraph (2)(B)(i).
       ``(B) Extension.--The President may extend the period for 
     compliance by Haiti under subparagraph (A) if the President--
       ``(i) determines that Haiti has made a good faith effort 
     toward such compliance and has agreed to take additional 
     steps to come into full compliance that are satisfactory to 
     the President; and
       ``(ii) provides to the appropriate congressional 
     committees, not later than 6 months after the last day of the 
     16-month period specified in subparagraph (A), and every 6 
     months thereafter, a report identifying the steps that Haiti 
     has agreed to take to come into full compliance and the 
     progress made over the preceding 6-month period in 
     implementing such steps.
       ``(C) Continuing compliance.--
       ``(i) Termination of preferential treatment.--If, after 
     making a certification under subparagraph (A), the President 
     determines that Haiti is no longer meeting the requirements 
     set forth in subparagraph (A), the President shall terminate 
     the preferential treatment provided under subsection (b), 
     unless the President determines, after consulting with the 
     appropriate congressional committees, that meeting such 
     requirements is not practicable because of extraordinary 
     circumstances existing in Haiti when the determination is 
     made.
       ``(ii) Subsequent compliance.--If the President, after 
     terminating preferential treatment under clause (i), 
     determines that Haiti is meeting the requirements set forth 
     in subparagraph (A), the President shall reinstate the 
     application of preferential treatment under subsection (b).
       ``(2) Labor ombudsman.--
       ``(A) In general.--The requirement under this paragraph is 
     that Haiti has established an independent Labor Ombudsman's 
     Office within the national government that--
       ``(i) reports directly to the President of Haiti;
       ``(ii) is headed by a Labor Ombudsman chosen by the 
     President of Haiti, in consultation with Haitian labor unions 
     and industry associations; and
       ``(iii) is vested with the authority to perform the 
     functions described in subparagraph (B).
       ``(B) Functions.--The functions of the Labor Ombudsman's 
     Office shall include--
       ``(i) developing and maintaining a registry of producers of 
     articles for which duty-free treatment may be requested under 
     subsection (b), and developing, in consultation and 
     coordination with any other appropriate officials of the 
     Government of Haiti, a system to ensure participation by such 
     producers in the TAICNAR Program described in paragraph (3);
       ``(ii) overseeing the implementation of the TAICNAR Program 
     described in paragraph (3);
       ``(iii) receiving and investigating comments from any 
     interested party regarding the conditions described in 
     paragraph (3)(B) in facilities of producers listed in the 
     registry described in clause (i) and, where appropriate, 
     referring such comments or the result of such investigations 
     to the appropriate Haitian authorities, or to the entity 
     operating the TAICNAR Program described in paragraph (3);
       ``(iv) assisting, in consultation and coordination with any 
     other appropriate Haitian authorities, producers listed in 
     the registry described in clause (i) in meeting the 
     conditions set forth in paragraph (3)(B); and
       ``(v) coordinating, with the assistance of the entity 
     operating the TAICNAR Program described in paragraph (3), a 
     tripartite committee comprised of appropriate representatives 
     of government agencies, employers, and workers, as

[[Page H3576]]

     well as other relevant interested parties, for the purposes 
     of evaluating progress in implementing the TAICNAR Program 
     described in paragraph (3), and consulting on improving core 
     labor standards and working conditions in the textile and 
     apparel sector in Haiti, and on other matters of common 
     concern relating to such core labor standards and working 
     conditions.
       ``(3) Technical assistance improvement and compliance needs 
     assessment and remediation program.--
       ``(A) In general.--The requirement under this paragraph is 
     that Haiti, in cooperation with the International Labor 
     Organization, has established a Technical Assistance 
     Improvement and Compliance Needs Assessment and Remediation 
     Program meeting the requirements under subparagraph (C)--
       ``(i) to assess compliance by producers listed in the 
     registry described in paragraph (2)(B)(i) with the conditions 
     set forth in subparagraph (B) and to assist such producers in 
     meeting such conditions; and
       ``(ii) to provide assistance to improve the capacity of the 
     Government of Haiti--

       ``(I) to inspect facilities of producers listed in the 
     registry described in paragraph (2)(B)(i); and
       ``(II) to enforce national labor laws and resolve labor 
     disputes, including through measures described in 
     subparagraph (E).

       ``(B) Conditions described.--The conditions referred to in 
     subparagraph (A) are--
       ``(i) compliance with core labor standards; and
       ``(ii) compliance with the labor laws of Haiti that relate 
     directly to core labor standards and to ensuring acceptable 
     conditions of work with respect to minimum wages, hours of 
     work, and occupational health and safety.
       ``(C) Requirements.--The requirements for the TAICNAR 
     Program are that the program--
       ``(i) be operated by the International Labor Organization 
     (or any subdivision, instrumentality, or designee thereof), 
     which prepares the biannual reports described in subparagraph 
     (D);
       ``(ii) be developed through a participatory process that 
     includes the Labor Ombudsman described in paragraph (2) and 
     appropriate representatives of government agencies, 
     employers, and workers;
       ``(iii) assess compliance by each producer listed in the 
     registry described in paragraph (2)(B)(i) with the conditions 
     set forth in subparagraph (B) and identify any deficiencies 
     by such producer with respect to meeting such conditions, 
     including by--

       ``(I) conducting unannounced site visits to manufacturing 
     facilities of the producer;
       ``(II) conducting confidential interviews separately with 
     workers and management of the facilities of the producer;
       ``(III) providing to management and workers, and where 
     applicable, worker organizations in the facilities of the 
     producer, on a confidential basis--

       ``(aa) the results of the assessment carried out under this 
     clause; and
       ``(bb) specific suggestions for remediating any such 
     deficiencies;
       ``(iv) assist the producer in remediating any deficiencies 
     identified under clause (iii);
       ``(v) conduct prompt follow-up site visits to the 
     facilities of the producer to assess progress on remediation 
     of any deficiencies identified under clause (iii); and
       ``(vi) provide training to workers and management of the 
     producer, and where appropriate, to other persons or 
     entities, to promote compliance with subparagraph (B).
       ``(D) Biannual report.--The biannual reports referred to in 
     subparagraph (C)(i) are a report, by the entity operating the 
     TAICNAR Program, that is published (and available to the 
     public in a readily accessible manner) on a biannual basis, 
     beginning 6 months after Haiti implements the TAICNAR Program 
     under this paragraph, covering the preceding 6-month period, 
     and that includes the following:
       ``(i) The name of each producer listed in the registry 
     described in paragraph (2)(B)(i) that has been identified as 
     having met the conditions under subparagraph (B).
       ``(ii) The name of each producer listed in the registry 
     described in paragraph (2)(B)(i) that has been identified as 
     having deficiencies with respect to the conditions under 
     subparagraph (B), and has failed to remedy such deficiencies.
       ``(iii) For each producer listed under clause (ii)--

       ``(I) a description of the deficiencies found to exist and 
     the specific suggestions for remediating such deficiencies 
     made by the entity operating the TAICNAR Program;
       ``(II) a description of the efforts by the producer to 
     remediate the deficiencies, including a description of 
     assistance provided by any entity to assist in such 
     remediation; and
       ``(III) with respect to deficiencies that have not been 
     remediated, the amount of time that has elapsed since the 
     deficiencies were first identified in a report under this 
     subparagraph.

       ``(iv) For each producer identified as having deficiencies 
     with respect to the conditions described under subparagraph 
     (B) in a prior report under this subparagraph, a description 
     of the progress made in remediating such deficiencies since 
     the submission of the prior report, and an assessment of 
     whether any aspect of such deficiencies persists.
       ``(E) Capacity building.--The assistance to the Government 
     of Haiti referred to in subparagraph (A)(ii) shall include 
     programs--
       ``(i) to review the labor laws and regulations of Haiti and 
     to develop and implement strategies for bringing the laws and 
     regulations into conformity with core labor standards;
       ``(ii) to develop additional strategies for facilitating 
     protection of core labor standards and providing acceptable 
     conditions of work with respect to minimum wages, hours of 
     work, and occupational safety and health, including through 
     legal, regulatory, and institutional reform;
       ``(iii) to increase awareness of worker rights, including 
     under core labor standards and national labor laws;
       ``(iv) to promote consultation and cooperation between 
     government representatives, employers, worker 
     representatives, and United States importers on matters 
     relating to core labor standards and national labor laws;
       ``(v) to assist the Labor Ombudsman appointed pursuant to 
     paragraph (2) in establishing and coordinating operation of 
     the committee described in paragraph (2)(B)(v);
       ``(vi) to assist worker representatives in more fully and 
     effectively advocating on behalf of their members; and
       ``(vii) to provide on-the-job training and technical 
     assistance to labor inspectors, judicial officers, and other 
     relevant personnel to build their capacity to enforce 
     national labor laws and resolve labor disputes.
       ``(4) Compliance with eligibility criteria.--
       ``(A) Country compliance with worker rights eligibility 
     criteria.--In making a determination of whether Haiti is 
     meeting the requirement set forth in subsection (d)(1)(A)(vi) 
     relating to internationally recognized worker rights, the 
     President shall consider the reports produced under paragraph 
     (3)(D).
       ``(B) Producer eligibility.--
       ``(i) Identification of producers.--Beginning in the second 
     calendar year after the President makes the certification 
     under paragraph (1)(A), the President shall identify on a 
     biennial basis whether a producer listed in the registry 
     described in paragraph (2)(B)(i) has failed to comply with 
     core labor standards and with the labor laws of Haiti that 
     directly relate to and are consistent with core labor 
     standards.
       ``(ii) Assistance to producers; withdrawal, etc., of 
     preferential treatment.--For each producer that the President 
     identifies under clause (i), the President shall seek to 
     assist such producer in coming into compliance with core 
     labor standards and with the labor laws of Haiti that 
     directly relate to and are consistent with core labor 
     standards. If such efforts fail, the President shall 
     withdraw, suspend, or limit the application of preferential 
     treatment under subsection (b) to articles of such producer.
       ``(iii) Reinstating preferential treatment.--If the 
     President, after withdrawing, suspending, or limiting the 
     application of preferential treatment under clause (ii) to 
     articles of a producer, determines that such producer is 
     complying with core labor standards and with the labor laws 
     of Haiti that directly relate to and are consistent with core 
     labor standards, the President shall reinstate the 
     application of preferential treatment under subsection (b) to 
     the articles of the producer.
       ``(iv) Consideration of reports.--In making the 
     identification under clause (i) and the determination under 
     clause (iii), the President shall consider the reports made 
     available under paragraph (3)(D).
       ``(5) Reports by the president.--
       ``(A) In general.--Not later than one year after the date 
     of the enactment of the Haitian Hemispheric Opportunity 
     through Partnership Encouragement Act of 2008, and annually 
     thereafter, the President shall transmit to the appropriate 
     congressional committees a report on the implementation of 
     this subsection during the preceding 1-year period.
       ``(B) Matters to be included.--Each report required by 
     subparagraph (A) shall include the following:
       ``(i) An explanation of the efforts of Haiti, the 
     President, and the International Labor Organization to carry 
     out this subsection.
       ``(ii) A summary of each report produced under paragraph 
     (3)(D) during the preceding 1-year period and a summary of 
     the findings contained in such report.
       ``(iii) Identifications made under paragraph (4)(B)(i) and 
     determinations made under paragraph (4)(B)(iii).
       ``(6) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection the sum of 
     $10,000,000 for the period beginning on October 1, 2008, and 
     ending on September 30, 2013.''.

     SEC. 15404. PETITION PROCESS.

       Section 213A(d) of the Caribbean Basin Economic Recovery 
     Act (19 U.S.C. 2703A(d)) is amended by adding at the end the 
     following new paragraph:
       ``(4) Petition process.--Any interested party may file a 
     request to have the status of Haiti reviewed with respect to 
     the eligibility requirements listed in paragraph (1), and the 
     President shall provide for this purpose the same procedures 
     as those that are provided for reviewing the status of 
     eligible beneficiary developing countries with respect to the 
     designation criteria listed in subsections (b) and (c) of 
     section 502 of the Trade Act of 1974 (19 U.S.C. 2642 (b) and 
     (c)).''.

     SEC. 15405. CONDITIONS REGARDING ENFORCEMENT OF 
                   CIRCUMVENTION.

       Section 213A(f) of the Caribbean Basin Economic Recovery 
     Act, as redesignated by section 15403(2) of this Act, is 
     amended by adding at the end the following new paragraph:
       ``(3) Limitation on goods shipped from the dominican 
     republic.--
       ``(A) Limitation.--Notwithstanding subsection (a)(5), 
     relating to the definition of `imported directly from Haiti 
     or the Dominican Republic', articles described in subsection 
     (b) that are shipped from the Dominican Republic, directly or 
     through the territory of an intermediate country, whether or 
     not such articles undergo processing in the Dominican 
     Republic, shall not be considered to be `imported directly 
     from Haiti or the Dominican Republic' until the President 
     certifies to the Congress that Haiti and the Dominican 
     Republic have developed procedures to prevent unlawful 
     transshipment of the articles and the use of counterfeit 
     documents related to the importation of the articles into the 
     United States.

[[Page H3577]]

       ``(B) Technical and other assistance.--The Commissioner 
     responsible for U.S. Customs and Border Protection shall 
     provide technical and other assistance to Haiti and the 
     Dominican Republic to develop expeditiously the procedures 
     described in subparagraph (A).''.

     SEC. 15406. PRESIDENTIAL PROCLAMATION AUTHORITY.

       The President may exercise the authority under section 604 
     of the Trade Act of 1974 to proclaim such modifications to 
     the Harmonized Tariff Schedule of the United States as may be 
     necessary to carry out this part and the amendments made by 
     this part.

     SEC. 15407. REGULATIONS AND PROCEDURES.

       The President shall issue such regulations as may be 
     necessary to carry out the amendments made by sections 15402, 
     15403, and 15404. Regulations to carry out the amendments 
     made by section 15402 shall be issued not later than 
     September 30, 2008. The Secretary of Commerce shall issue 
     such procedures as may be necessary to carry out the 
     amendment made by section 15402(d) not later than September 
     30, 2008.

     SEC. 15408. EXTENSION OF CBTPA.

       Section 213(b) of the Caribbean Basin Economic Recovery Act 
     (19 U.S.C. 2703(b)) is amended--
       (1) in paragraph (2)(A)--
       (A) in clause (iii)--
       (i) in subclause (II)(cc), by striking ``2008'' and 
     inserting ``2010''; and
       (ii) in subclause (IV)(dd), by striking ``2008'' and 
     inserting ``2010''; and
       (B) in clause (iv)(II), by striking ``6'' and inserting 
     ``8''; and
       (2) in paragraph (5)(D)--
       (A) in clause (i), by striking ``2008'' and inserting 
     ``2010''; and
       (B) in clause (ii), by striking ``108(b)(5)'' and inserting 
     ``section 108(b)(5)''.

     SEC. 15409. SENSE OF CONGRESS ON INTERPRETATION OF TEXTILE 
                   AND APPAREL PROVISIONS FOR HAITI.

       It is the sense of the Congress that the executive branch, 
     particularly the Committee for the Implementation of Textile 
     Agreements (CITA), U.S. Customs and Border Protection of the 
     Department of Homeland Security, and the Department of 
     Commerce, should interpret, implement, and enforce the 
     provisions of section 213A(b) of the Caribbean Basin Economic 
     Recovery Act, as amended by section 15402 of this Act, 
     relating to preferential treatment of textile and apparel 
     articles, broadly in order to expand trade by maximizing 
     opportunities for imports of articles eligible for 
     preferential treatment under such section 213A(b).

     SEC. 15410. SENSE OF CONGRESS ON TRADE MISSION TO HAITI.

       It is the sense of the Congress that the Secretary of 
     Commerce, in coordination with the United States Trade 
     Representative, the Secretary of State, and the Commissioner 
     responsible for U.S. Customs and Border Protection of the 
     Department of Homeland Security, should lead a trade mission 
     to Haiti, within 6 months after the date of the enactment of 
     this Act, to promote trade between the United States and 
     Haiti, to promote new economic opportunities afforded under 
     the amendments made by section 15402 of this Act, and to help 
     educate United States and Haitian business concerns about 
     such opportunities.

     SEC. 15411. SENSE OF CONGRESS ON VISA SYSTEMS.

       It is the sense of the Congress that Haiti, and other 
     countries that receive preferences under trade preference 
     programs of the United States that require effective visa 
     systems to prevent transshipment, should ensure that monetary 
     compensation for such visas is not required beyond the costs 
     of processing the visa, including ensuring that such monetary 
     compensation does not violate an applicable system to combat 
     corruption and bribery.

     SEC. 15412. EFFECTIVE DATE.

       (a) In General.--Except as provided in subsection (b), this 
     part and the amendments made by this part shall take effect 
     on the date of the enactment of this Act.
       (b) Exception.--The amendments made by section 15402 shall 
     take effect on October 1, 2008, and shall apply to articles 
     entered, or withdrawn from warehouse for consumption, on or 
     after that date.

                PART II--MISCELLANEOUS TRADE PROVISIONS

     SEC. 15421. UNUSED MERCHANDISE DRAWBACK.

       (a) In General.--Section 313(j)(2) of the Tariff Act of 
     1930 (19 U.S.C. 1313(j)(2)) is amended by adding at the end 
     the following: ``For purposes of subparagraph (A) of this 
     paragraph, wine of the same color having a price variation 
     not to exceed 50 percent between the imported wine and the 
     exported wine shall be deemed to be commercially 
     interchangeable.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply with respect to claims filed for drawback under 
     section 313(j)(2) of the Tariff Act of 1930 on or after the 
     date of the enactment of this Act.

     SEC. 15422. REQUIREMENTS RELATING TO DETERMINATION OF 
                   TRANSACTION VALUE OF IMPORTED MERCHANDISE.

       (a) Requirement on Importers.--
       (1) In general.--Pursuant to sections 484 and 485 of the 
     Tariff Act of 1930 (19 U.S.C. 1484 and 1485), the 
     Commissioner responsible for U.S. Customs and Border 
     Protection shall require each importer of merchandise to 
     provide to U.S. Customs and Border Protection at the time of 
     entry of the merchandise the information described in 
     paragraph (2).
       (2) Information required.--The information referred to in 
     paragraph (1) is a declaration as to whether the transaction 
     value of the imported merchandise is determined on the basis 
     of the price paid by the buyer in the first or earlier sale 
     occurring prior to introduction of the merchandise into the 
     United States.
       (3) Effective date.--The requirement to provide information 
     under this subsection shall be effective for the 1-year 
     period beginning 90 days after the date of the enactment of 
     this Act.
       (b) Report to International Trade Commission.--
       (1) In general.--The Commissioner responsible for U.S. 
     Customs and Border Protection shall submit to the United 
     States International Trade Commission on a monthly basis for 
     the 1-year period specified in subsection (a)(3) a report on 
     the information provided by importers under subsection (a)(2) 
     during the preceding month. The report required under this 
     paragraph shall be submitted in a form agreed upon between 
     U.S. Customs and Border Protection and the United States 
     International Trade Commission.
       (2) Matters to be included.--The report required under 
     paragraph (1) shall include--
       (A) the number of importers that declare the transaction 
     value of the imported merchandise is determined on the basis 
     of the method described in subsection (a)(2);
       (B) the tariff classification of such imported merchandise 
     under the Harmonized Tariff Schedule of the United States; 
     and
       (C) the transaction value of such imported merchandise.
       (c) Report to Congress.--
       (1) In general.--Not later than 90 days after the 
     submission of the final report under subsection (b), the 
     United States International Trade Commission shall submit to 
     the appropriate congressional committees a report on the 
     information contained in all reports submitted under 
     subsection (b).
       (2) Matters to be included.--The report required under 
     paragraph (1) shall include--
       (A) the aggregate number of importers that declare the 
     transaction value of the imported merchandise is determined 
     on the basis of the method described in subsection (a)(2), 
     including a description of the frequency of the use of such 
     method;
       (B) the tariff classification of such imported merchandise 
     under the Harmonized Tariff Schedule of the United States on 
     an aggregate basis, including an analysis of the tariff 
     classification of such imported merchandise on a sectoral 
     basis;
       (C) the aggregate transaction value of such imported 
     merchandise, including an analysis of the transaction value 
     of such imported merchandise on a sectoral basis; and
       (D) the aggregate transaction value of all merchandise 
     imported into the United States during the 1-year period 
     specified in subsection (a)(3).
       (d) Sense of Congress Regarding Prohibition on Proposed 
     Interpretation of the Term ``Sold for Exportation to the 
     United States''.--
       (1) In general.--It is the sense of Congress that the 
     Commissioner responsible for U.S. Customs and Border 
     Protection should not implement a change to U.S. Customs and 
     Border Protection's interpretation (as such interpretation is 
     in effect on the date of the enactment of this Act) of the 
     term ``sold for exportation to the United States'', as 
     described in section 402(b) of the Tariff Act of 1930 (19 
     U.S.C. 1401a(b)), for purposes of applying the transaction 
     value of the imported merchandise in a series of sales, 
     before January 1, 2011.
       (2) Exception.--It is the sense of Congress that beginning 
     on January 1, 2011, the Commissioner responsible for U.S. 
     Customs and Border Protection may propose to change or change 
     U.S. Customs and Border Protection's interpretation of the 
     term ``sold for exportation to the United States'', as 
     described in paragraph (1), only if U.S. Customs and Border 
     Protection--
       (A) consults with, and provides notice to, the appropriate 
     congressional committees--
       (i) not less than 180 days prior to proposing a change; and
       (ii) not less than 90 days prior to publishing a change;
       (B) consults with, provides notice to, and takes into 
     consideration views expressed by, the Commercial Operations 
     Advisory Committee--
       (i) not less than 120 days prior to proposing a change; and
       (ii) not less than 60 days prior to publishing a change; 
     and
       (C) receives the explicit approval of the Secretary of the 
     Treasury prior to publishing a change.
       (3) Consideration of international trade commission 
     report.--It is the sense of Congress that prior to publishing 
     a change to U.S. Customs and Border Protection's 
     interpretation (as such interpretation is in effect on the 
     date of the enactment of this Act) of the term ``sold for 
     exportation to the United States'', as described in section 
     402(b) of the Tariff Act of 1930 (19 U.S.C. 1401a(b)), for 
     purposes of applying the transaction value of the imported 
     merchandise in a series of sales, the Commissioner 
     responsible for U.S. Customs and Border Protection should 
     take into consideration the matters included in the report 
     prepared by the United States International Trade Commission 
     under subsection (c).
       (e) Definitions.--In this section:
       (1) Appropriate congressional committees.--The term 
     ``appropriate congressional committees'' means the Committee 
     on Ways and Means of the House of Representatives and the 
     Committee on Finance of the Senate.
       (2) Commercial operations advisory committee.--The term 
     ``Commercial Operations Advisory Committee'' means the 
     Advisory Committee established pursuant to section 9503(c) of 
     the Omnibus Budget Reconciliation Act of 1987 (19 U.S.C. 2071 
     note) or any successor committee.
       (3) Importer.--The term ``importer'' means one of the 
     parties qualifying as an ``importer of record'' under section 
     484(a)(2)(B) in the Tariff Act of 1930 (19 U.S.C. 
     1484(a)(2)(B)).
       (4) Transaction value of the imported merchandise.--The 
     term ``transaction value of

[[Page H3578]]

     the imported merchandise'' has the meaning described in 
     section 402(b) of the Tariff Act of 1930 (19 U.S.C. 
     1401a(b)).
       And the Senate agree to the same.
     From the Committee on Agriculture, for consideration of the 
     House bill (except title XII) and the Senate amendment 
     (except secs. 12001, 12201-12601, and 12701-12808), and 
     modifications committed to conference:
     Collin C. Peterson,
     Tim Holden,
     Mike McIntyre,
     Bob Etheridge,
     Leonard L. Boswell,
     Joe Baca,
     Dennis L. Cardoza,
     David Scott,
     Bob Goodlatte,
     Robin Hayes,
     Marilyn Musgrave,
     Randy Neugebauer,
     From the Committee on Education and Labor, for consideration 
     of secs. 4303 and 4304 of the House bill, and secs. 4901-
     4905, 4911, and 4912 of the Senate amendment, and 
     modifications committed to conference:
     George Miller,
     Carolyn McCarthy,
     Todd Platts,
     From the Committee on Energy and Commerce, for consideration 
     of secs. 6012, 6023, 6024, 6028, 6029, 9004, 9005, and 9017 
     of the House bill, and secs. 6006, 6012, 6110-6112, 6202, 
     6302, 7044, 7049, 7307, 7507, 9001, 11060, 11072, 11087, and 
     11101-11103 of the Senate amendment, and modifications 
     committed to conference:
     John D. Dingell,
     Frank Pallone,
     From the Committee on Financial Services, for consideration 
     of sec. 11310 of the House bill, and secs. 6501-6505, 11068, 
     and 13107 of the Senate amendment, and modifications 
     committed to conference:
     Paul E. Kanjorski,
     Maxine Waters,
     From the Committee on Foreign Affairs, for consideration of 
     secs. 3001-3008, 3010-3014, and 3016 of the House bill, and 
     secs. 3001-3022, 3101-3107, and 3201-3204 of the Senate 
     amendment, and modifications committed to conference:
     Howard L. Berman,
     Brad Sherman,
     Ileana Ros-Lehtinen,
     From the Committee on Judiciary, for consideration of secs. 
     11102, 11312, and 11314 of the House bill, and secs. 5402, 
     10103, 10201, 10203, 10205, 11017, 11069, 11076, 13102, and 
     13104 of the Senate amendment, and modifications committed to 
     conference:
     John Conyers,
     Bobby Scott,
     From the Committee on Natural Resources, for consideration of 
     secs. 2313, 2331, 2341, 2405, 2607, 2607A, 2611, 5401, 6020, 
     7033, 7311, 8101, 8112, 8121-8127, 8204, 8205, 11063, and 
     11075 of the Senate amendment, and modifications committed to 
     conference:
     Nick Rahall,
     Madeleine Z. Bordallo,
     Cathy McMorris Rodgers,
     From the Committee on Oversight and Government Reform, for 
     consideration of secs. 1501 and 7109 of the House bill, and 
     secs. 7020, 7313, 7314, 7316, 7502, 8126, 8205, and 10201 of 
     the Senate amendment, and modifications committed to 
     conference:
     Edolphus Towns,
     From the Committee on Science and Technology, for 
     consideration of secs. 4403, 9003, 9006, 9010, 9015, 9019, 
     and 9020 of the House bill, and secs. 7039, 7051, 7315, 7501, 
     and 9001 of the Senate amendment, and modifications committed 
     to conference:
     Bart Gordon,
     Michael T. McCaul,
     From the Committee on Small Business, for consideration of 
     subtitle D of title XI of the Senate amendment, and 
     modifications committed to conference:
     Nydia M. Velazquez,
     Heath Shuler,
     From the Committee on Transportation and Infrastructure, for 
     consideration of secs. 2203, 2301, 6019, and 6020 of the 
     House bill, and secs. 2604, 6029, 6030, and 11087 of the 
     Senate amendment, and modifications committed to conference:
     James L. Oberstar,
     Eleanor H. Norton,
     Sam Graves,
     From the Committee on Ways and Means, for consideration of 
     sec. 1303 and title XII of the House bill, and secs. 12001-
     12601, and 12701-12808 of the Senate amendment, and 
     modifications committed to conference:
     Charles B. Rangel,
     Earl Pomeroy,
     For consideration of House bill (except title XII) and the 
     Senate amendment (except secs. 12001, 12201-12601, and 12701-
     12808), and modifications committed to conference:
     Rosa L. DeLauro,
     Adam H. Putnam,
                                Managers on the Part of the House.

     Tom Harkin,
     Patrick Leahy,
     Kent Conrad,
     Max Baucus,
     Blanche L. Lincoln,
     Debbie Stabenow,
     Saxby Chambliss,
     Thad Cochran,
     Pat Roberts
     (for purposes of title XV only),
     Chuck Grassley,
                               Managers on the Part of the Senate.

       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

       The Managers on the part of the House and the Senate at the 
     conference on the disagreeing votes of the two Houses on the 
     amendment of the Senate to the bill (H.R. 2419) to provide 
     for the continuation of agricultural programs through fiscal 
     year 2012, and for other purposes, submit the following joint 
     statement to the House and the Senate in explanation of the 
     effect of the action agreed upon by the managers and 
     recommended in the accompanying conference report:
       The Senate amendment struck out all of the House bill after 
     the enacting clause and inserted a substitute text.
       The House recedes from its disagreement to the amendment of 
     the Senate with an amendment which is a substitute for the 
     House bill and the Senate amendment. The differences between 
     the House bill, the Senate amendment, and the substitute 
     agreed to in conference are noted below, except for clerical 
     corrections, conforming changes made necessary by agreements 
     reached by the conferees, and minor drafting and clarifying 
     changes.

                     SHORT TITLE; TABLE OF CONTENTS

     (1) Short title
       The House bill refers to this Act as the ``Farm, Nutrition, 
     and Bioenergy Act of 2007''. (Section 1)
       The Senate amendment states that this Act may be cited as 
     the ``Food and Energy Security Act of 2007''. (Section 1)
       The Conference substitute cites this Act as the ``Food, 
     Conservation, and Energy Act of 2008''. (Section 1)

                      TITLE I--COMMODITY PROGRAMS

     (2) Definitions
       The House bill defines various terms used in the bill; most 
     terms are defined as they were in the 2002 farm bill. The 
     definitions of ``Far East price'' and two definitions 
     regarding the cotton quality and premiums, ``United States 
     Premium Factor'' and ``Comparable United States Quality'' are 
     added. (Section 1001)
       The Senate amendment defines various terms used in the 
     bill; most terms are defined as they were in the 2002 farm 
     bill. The definitions of average crop revenue payment, medium 
     grain rice, and pulse crop are added. (Section 1001) The 
     definition of Secretary applies to the entire bill. (Section 
     2) The definitions that are relevant to the peanuts subtitle 
     are found in that part. (Section 1301)
       The Conference substitute defines terms necessary for 
     implementation of this Act: Secretary, average crop revenue 
     election payment, base acres, counter-cyclical payment, 
     covered commodity, direct payment, effective price, extra 
     long staple cotton, loan commodity, medium grain rice, other 
     oilseed, payment acres, payment yield, producer, pulse crop, 
     State, target price, United States, and United States premium 
     factor. The Conference substitute adopts the Senate structure 
     for the peanut program. (Sections 2, 1001, and 1301)
     (3) Adjustments to base acres
       The House bill provides that producers are generally not 
     given a choice of updating base acres or payment yields under 
     this bill. However, it requires the Secretary to provide base 
     acre adjustments when a conservation reserve contract ends. 
     Peanut base acres are no longer specified because peanuts are 
     included as a covered commodity. (Section 1101)
       The Senate amendment provides for an adjustment in base 
     acres to include pulse crop, camelina, or newly designated 
     oilseed acreage; applies the limit on acreage enrolled in a 
     conservation program only to acreage enrolled in Federal 
     conservation programs; references base acres for peanuts; and 
     requires the Secretary to reduce base acres for land that is 
     no longer used for farming, specifically land that has been 
     developed for commercial or industrial use or has been 
     subdivided and developed for multiple residential units or 
     other nonfarming uses unless the producer demonstrates that 
     the land remains devoted exclusively to agricultural 
     production. Section 1302 applies the base acre provisions for 
     covered commodities under Section 1101 to peanuts. (Sections 
     1101 and 1301)
       The Conference substitute provides for the adjustment of 
     base acres when a conservation reserve contract expires or is 
     terminated; the producer has eligible pulse crop acreage or 
     eligible oilseed acreage as a result of the designation of 
     additional oilseeds; provides for base acres for peanuts in 
     the determination of excess base acres; provides for the 
     reduction of base acres for land that has been subdivided and 
     developed for multiple residential units; provides that 
     direct payments, counter-cyclical payments, or average crop 
     revenue election payments are prohibited if the sum of the 
     base acres of the farm is 10 acres or less unless the farm is 
     owned by a socially disadvantaged or limited resource farmer 
     or rancher; and includes authority for data collection and 
     evaluation. The Conference substitute adopts the Senate 
     structure for the peanut program. (Sections 1101 and 1302)
       The Managers intend that the Department accommodate 
     requests for adjustments in base acres for producers on 
     different farms or tracts who have agreed on a voluntary 
     basis to redistribute base acres between tracts, if base 
     acreage was previously transferred to or from a tract because 
     of participation in the Conservation Reserve Program.
       The Managers expect Section 1101(b)(1) and Section 
     1302(b)(1) to be administered in the

[[Page H3579]]

     same manner as Section 1101(g)(1) and Section 1302(f)(1) of 
     the Farm Security and Rural Investment Act of 2002 as 
     implemented in 7 CFR 1412.204(a).
       The Managers recognize the importance of assessing the 
     impact of the suspension of payments for small base acres of 
     covered commodities upon specialty crop producers. For 
     greater efficiency, the Managers expect the Secretary to 
     include the information and evaluations derived from Section 
     1101(d)(3) and Section 1302(d)(3) into the report required 
     under Section 1107(d)(7)(C) prior to its submission to the 
     Committee on Agriculture of the House of Representatives and 
     the Committee on Agriculture, Nutrition and Forestry of the 
     Senate.
       The Managers intend for the Department to allow for 
     aggregation of farms for purposes of determining the 
     suspension of payments on farms with 10 base acres or less. 
     The Managers expect for the Department to review farms in 
     this category on an annual basis rather than prohibiting 
     payments to these farms for the life of the farm bill.
     (3A) Payment yields
       The Senate amendment provides for the establishment of a 
     payment yield for any designated oilseed, camelina, or 
     eligible pulse crop for the purpose of making direct payments 
     and counter-cyclical payments. It also provides a formula for 
     calculating payment yields that is similar to the provisions 
     used in 2002. (Section 1102)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision, but 
     deletes all references to camelina. (Section 1102)
     (4) Availability of direct payments
       The House bill reflects current law for the 2008-2012 crop 
     years, except it includes peanuts; terminates advance direct 
     payments starting with the 2012 crop year; and prohibits a 
     direct payment if the payment for all covered commodities 
     would be less than $25. (Section 1102)
       The Senate amendment reflects current law for the 2008-2012 
     crop years, except it terminates advance direct payments 
     starting with the 2012 crop year; specifies separate rates 
     for long grain rice and medium grain rice; and excludes 
     participants in the average crop revenue program. (Sections 
     1103 and 1303)
       The Conference substitute provides direct payments at 
     current rates with an exception for participants in the 
     average crop revenue election program; specifies separate but 
     identical rates for long grain rice and medium grain rice; 
     and terminates advance direct payments starting with the 2012 
     crop year. The Conference substitute adopts the Senate 
     structure for the peanut program. (Sections 1103 and 1303)
     (5) Availability of counter-cyclical payments
       The House bill extends current provisions to the 2008-2012 
     crop years with the following exceptions: Includes peanuts as 
     a covered commodity; clarifies that the Secretary shall 
     establish national average loan rates for all rice and all 
     barley for the purpose of calculating counter-cyclical 
     payments; rebalances target prices for wheat, barley, oats, 
     upland cotton, soybeans, and other oilseeds; eliminates 
     partial counter-cyclical payments beginning with the 2011 
     crop year; and prohibits a counter-cyclical payment if the 
     total counter-cyclical payments for all covered commodities 
     on the farm would be less than $25. (Section 1103)
       The Senate amendment extends the counter-cyclical program 
     for the 2008-2012 crop years, except for participants in 
     average crop revenue program, and with the following 
     modifications: For long grain rice and medium grain rice, the 
     effective price is determined using the same calculation, but 
     by the type or class of rice, as determined by the Secretary; 
     rebalances target prices for wheat, grain sorghum, barley, 
     oats, upland cotton, soybeans, and other oilseeds; 
     establishes target prices for dry peas, lentils, small 
     chickpeas, and large chickpeas; eliminates partial counter-
     cyclical payments beginning with the 2011 crop year; 
     prohibits the Secretary from establishing a target price for 
     a covered commodity that is different from the target price 
     specified. (Sections 1104 and 1304)
       The Conference substitute adopts the Senate provision 
     regarding long grain rice and medium grain rice. The 
     Conference substitute provides that the revised target price 
     for upland cotton and counter-cyclical program payment by 
     class of rice will be effective beginning with the 2008 crop 
     year; establishes target prices for pulse crops beginning 
     with the 2009 crop year; and rebalances target prices for 
     wheat, grain sorghum, barley, oats, soybeans and other 
     oilseeds effective for the 2010 crop year; and eliminates 
     partial counter-cyclical payments beginning with the 2011 
     crop year. The Conference substitute adopts the Senate 
     structure for the peanut program. (Sections 1104 and 1304)
     (6) Availability of revenue-based counter-cyclical payments
       The House bill requires the Secretary to offer producers 
     the option to receive revenue-based counter-cyclical payments 
     for the 2008-2012 crop years, as an alternative to receiving 
     counter-cyclical payments under section 1103. Producers will 
     have only one opportunity to elect to receive revenue-based 
     counter-cyclical payments as soon as practicable after 
     enactment. If a producer fails to make such election in a 
     timely manner, the producer will receive counter-cyclical 
     payments pursuant to section 1103. The Secretary is required 
     to make revenue-based counter-cyclical payments to such 
     producers if the Secretary determines that the national 
     actual revenue per acre for the covered commodity is less 
     than the national target revenue per acre for the covered 
     commodity. The Secretary shall establish a national actual 
     revenue per acre by multiplying the national average yield 
     for the given year by the higher of: the national average 
     market price received by producers during the 12-month 
     marketing year; or the loan rate for the covered commodity 
     under section 1202, except that for rice and barley, the 
     Secretary shall establish national average all rice and 
     all barley loan rates. The House bill establishes the 
     national target revenue per acre as follows: wheat, 
     $149.92; corn, $344.12; grain sorghum, $131.28; barley, 
     $153.30; oats, $92.10; upland cotton, $496.93; rice, 
     $548.06; soybeans, $231.87; other oilseeds, $129.18; and 
     peanuts, $683.83. The House bill establishes the national 
     payment yield for each covered commodity and the formula 
     for the national payment rate. The House bill provides 
     that if revenue-based counter-cyclical payments are 
     required for any of the covered commodities, the amount of 
     the payment shall be equal to the product of: the national 
     payment rate; the payment acres; and the payment yield. 
     (Section 1104)
       The Senate amendment contains no comparable provision.
       The Conference substitute provides an optional revenue-
     based counter-cyclical program that will be available 
     beginning with the 2009 crop year. As an alternative to 
     receiving counter-cyclical payments under section 1104, and 
     with an agreement to forgo 20 percent of the direct payment 
     rate and 30 percent of the marketing assistance loan rates 
     for covered commodities and peanuts, producers on a farm can 
     elect to participate in the average crop revenue election 
     (ACRE) program for all covered commodities and peanuts on the 
     farm. Once they elect to participate in ACRE, the producers 
     on the farm will remain in the program for the duration of 
     the farm bill. Participants in ACRE will be eligible for 
     state-based coverage with a revenue guarantee equal to 90 
     percent of the 5-year state average yield per planted acre 
     (excluding the years with the highest and lowest yields) 
     times the 2-year national average price for the covered 
     commodity. Once the ACRE guarantee is established, it cannot 
     vary by more than 10 percent from the previous year's 
     guarantee. If the actual State revenue (yield per planted 
     acre times the national price) is less than the revenue 
     guarantee, and if the producers suffer a loss on their farm, 
     then they will receive an ACRE payment equal to the 
     difference between the State revenue guarantee and the actual 
     revenue for the crop year up to 25 percent of the revenue 
     guarantee. ACRE revenue payments are made on 85 percent of 
     the acreage planted or considered planted to the covered 
     commodity or peanuts. For the 2009, 2010 and 2011 crop years, 
     ACRE payment acres are reduced to 83.3 percent of planted or 
     considered planted acres. (Section 1105)
     (7) Producer agreement required as condition of provision of 
         direct payments and counter-cyclical payments
       The House bill is similar to current law, except it 
     includes peanuts and omits the reference to noncultivation 
     with regard to the control of noxious weeds. (Section 1105)
       The Senate amendment is similar to current law, except it 
     includes an additional provision that land cannot be used for 
     a residential use (including land subdivided and developed 
     into residential units or other nonfarming uses, or that is 
     otherwise no longer intended to be used in conjunction with a 
     farming operation) and provides that no penalty with respect 
     to benefits can be assessed against the producers on a farm 
     for an inaccurate acreage report unless the producers on the 
     farm knowingly and willfully falsified the acreage report. 
     (Section 1105)
       The Conference substitute adopts the Senate provision with 
     an amendment that provides that participants in ACRE provide 
     both acreage and production reports and that no penalty with 
     respect to benefits can be assessed against the producers on 
     a farm for an inaccurate report unless the producers on the 
     farm knowingly and willfully falsified the report. The 
     Conference substitute adopts the Senate structure for the 
     peanut program. (Sections 1106 and 1305)
       The Managers intend that if a transfer or change in 
     interest of producers on a farm occurs, and the transferee or 
     owner of the acres does not agree to assume all obligations 
     under section 1106(a), then direct payments, counter-cyclical 
     payments, and average crop revenue election payments will be 
     terminated. However, the references to average crop revenue 
     election payments in sections 1106(b)(1)(A) and 1305(b)(1)(A) 
     refer only to the limitation described in section 1105(a)(2), 
     not the actual payment acres for the average crop revenue 
     election program.
     (8) Planting flexibility
       The House bill is the same as current law, but it includes 
     peanuts and establishes a pilot Farm Flex project in Indiana 
     for the 2008-2012 crop years, under which tomatoes for 
     processing may be planted on up to 10,000 base acres. 
     (Section 1106)
       The Senate amendment is the same as current law, except 
     provides an exception for mung beans and pulse crops and 
     provides a pilot flexibility project in Indiana for the 2008 
     and 2009 crop years. (Section 1106)
       The Conference substitute provides that mung beans and 
     pulse crops can be planted

[[Page H3580]]

     on base acres, and provides a pilot project to allow the 
     production of specified fruits or vegetables for processing 
     for the 2009-2012 crop years on up to 9,000 base acre in the 
     State of Illinois; 9,000 base acres in the State of Indiana; 
     1,000 base acres in the State of Iowa; 9,000 base acres in 
     the State of Michigan; 34,000 base acres in the State of 
     Minnesota; 4,000 base acres in the State of Ohio; and 9,000 
     base acres in the State of Wisconsin; that base acres will be 
     protected; and that the Secretary will evaluate the effects 
     of the pilot project on the supply and demand of fresh fruits 
     and vegetables and fruits and vegetables for processing. The 
     Conference substitute adopts the Senate structure for the 
     peanut program. (Sections 1107 and 1306)
       The Managers expect the Secretary to establish a process to 
     ensure that the quantity of fruits or vegetables delivered 
     for processing under the pilot project does not exceed the 
     quantity reflected in the original contract between the 
     producer and the processor. The Managers further expect the 
     Secretary to seek evidence that the amount of fruits or 
     vegetables planted for processing under this pilot project is 
     delivered to the processing facility or in the case of crop 
     loss is determined by the Secretary to have been destroyed.
       In evaluating the effects of the program on the supply of 
     and price of fresh fruits and vegetables and fruits and 
     vegetables for processing, the Managers encourage the 
     Secretary to examine the impact of the program on bonus buys 
     under the authority of Section 46 of the Agricultural Act of 
     1949 and surplus removal under the authority of Section 32 of 
     the Act of August 24, 1935.
       The Managers recognize the importance of assessing the 
     impact of the expansion of the planting flexibility pilot 
     program upon specialty crop producers. For greater 
     efficiency, the Managers expect the Secretary to include the 
     information and evaluations derived from Section 1101(d)(3) 
     and Section 1302(d)(3) into the report required under this 
     Section prior to its submission/ the Committee on Agriculture 
     of the House of Representatives and the Committee on 
     Agriculture, Nutrition and Forestry of the Senate.
     (8A) Special rule for long grain and medium grain rice
       The Senate amendment provides that for the purposes of 
     making counter-cyclical payments for long grain and medium 
     grain rice, base acres on the farm shall be apportioned based 
     on acreage planted to long grain rice and medium grain rice 
     during the 2003-2006 crop years. The Senate amendment 
     requires that base acres, payment acres, and payment yields 
     established with respect to rice are maintained. (Section 
     1107)
       The House bill does not contain a comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 1108)
     (9) Period of effectiveness
       The House bill authorizes Subtitle A of Title I for the 
     2008-2012 crop years. (Section 1107)
       The Senate amendment authorizes Part I of Subtitle A of 
     Title I for each covered commodity for the 2008-2012 crop 
     years. (Section 1108)
       The Conference substitute adopts the Senate provision with 
     an amendment. (Section 1109)
     (10) Availability of nonrecourse marketing assistance loans 
         for loan commodities
       The House bill is similar to current law; but authorizes 
     that, for peanuts, a marketing assistance loan or loan 
     deficiency payments may be obtained through a marketing 
     association or marketing cooperative of producers that is 
     approved by the Secretary, or through the Farm Service 
     Agency; stipulates that as a condition for an individual or 
     entity to provide storage for peanuts for which a marketing 
     assistance loan is made, the individual or entity shall agree 
     to provide storage on a non-discriminatory basis and to 
     comply with additional requirements as the Secretary deems 
     appropriate in order to promote fairness in the 
     administration of this section; and authorizes a marketing 
     association or cooperative to market peanuts for which a loan 
     is made under this section, including by separating peanuts 
     by type and quality. (Section 1201)
       The Senate amendment is the same as current law; except for 
     participants in average crop revenue program. (Sections 1201 
     and 1307)
       The Conference substitute adopts the Senate provision. 
     (Sections 1201 and 1307)
     (10A) Peanuts storage and handling costs
       The Senate amendment replaces the payment of storage, 
     handling and associated costs under the 2002 farm bill with a 
     mechanism that ensures handling and associated costs are not 
     deducted from a producer's marketing loan. USDA would advance 
     the payment for handling and associate costs for peanuts 
     placed under loan and the advanced costs would be repaid when 
     the peanuts are redeemed. (Section 1307(a)(7))
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to begin coverage for handling, and associated 
     costs with the 2008 crop of peanuts. (Section 1307)
       In order to provide adequate storage and handling for 
     peanuts in the marketing loan program, FSRIA used funds of 
     the Commodity Credit Corporation (CCC) to provide payments 
     for storage, handling, and associated costs for peanuts in 
     the loan. However, these payments expired before the 2007 
     crop year for peanuts. The budgetary constraints made it 
     impossible to continue the storage and handling payments 
     established under FSRIA in this bill. In order to continue 
     to ensure the adequate storage and handling for peanuts in 
     the loan program, this bill instructs the Secretary to pay 
     any handling and associated costs incurred at the time the 
     peanuts are placed under loan for the 2008 through 2012 
     peanut crop years. These payments would be repaid when the 
     loan peanuts are redeemed. The Secretary would pay the 
     storage, handling, and associated costs for peanuts under 
     the loan that are forfeited. The purpose of this provision 
     is to not only ensure proper and adequate storage and 
     handling of peanuts in the loan but also to guarantee that 
     these costs are not taken out of a producer's loan 
     proceeds at the time the peanuts are placed in the loan.
     (11) Loan rates for nonrecourse marketing assistance loans
       The House bill establishes loan rates for marketing 
     assistance loans, including two loan rates for rice (one for 
     long grain rice; one for medium and short grain rice) and two 
     for barley (one for feed barley; one for malt barley), as 
     follows: wheat, $2.94 per bushel; corn, $1.95 per bushel; 
     grain sorghum, $1.95 per bushel; malt barley, $2.50 per 
     bushel; feed barley, $1.90 per bushel; oats, $1.46 per 
     bushel; base quality upland cotton, $0.52 per pound; extra 
     long staple cotton, $0.7977 per pound; long grain rice, $6.50 
     per hundredweight; medium grain rice and short grain rice, 
     $6.50 per hundredweight; soybeans, $5.00 per bushel; other 
     oilseeds, $0.1070 per pound for each of the following--
     sunflower seed, rapeseed, canola, safflower, flaxseed, 
     mustard seed, crambe, sesame seed, and other oilseeds 
     designated by the Secretary; dry peas, $5.40 per 
     hundredweight; lentils, $11.28 per hundredweight; small 
     chickpeas, $8.54 per hundredweight; peanuts, $355.00 per ton; 
     graded wool, $1.10 per pound; nongraded wool, $0.40 per 
     pound; honey, $0.60 per pound; and mohair, $4.20 per pound. 
     The House bill requires the Secretary to establish a single 
     county loan rate for corn and grain sorghum in each county; 
     and to administer the applicable loan, marketing loan, 
     counter-cyclical and related programs using an identical loan 
     rate for corn and grain sorghum in each county. (Section 
     1202)
       The Senate amendment establishes loan rates for the 2008-
     2012 crop years; includes similar provisions to the House 
     bill for corn and grain sorghum; and establishes grading 
     basis for marketing loans for pulse crops using a grade not 
     less than grade number 2 or other grade factors, including 
     the fair and average quality of the crop in any year; and may 
     be adjusted by the Secretary to reflect the normal market 
     discounts for grades less than number 2 quality. (Sections 
     1202, 1210, and 1307)
       The Conference substitute establishes loan rates for the 
     2008-2012 crop years. The Conference substitute adopts the 
     Senate structure for the peanut program. (Sections 1202 and 
     1307)
       The Managers have included in Section 1202 revisions to the 
     marketing loan rates for dry peas, lentils, and small 
     chickpeas and established a marketing loan program for large 
     chickpeas, hereinafter referred to collectively as pulse 
     crops. The Managers intend that the Secretary establish grade 
     factors for pulse crop loan eligibility that reflects the 
     established U.S. grades for #2 or better used in commercial 
     domestic and export sales transactions and that the Secretary 
     establish a commodity marketing loan grade discount schedule 
     that is comparable to, and reflects the prevailing average 
     grade discounts that apply to commercial pulse crop sales 
     transactions.
     (12) Terms of loans
       The House bill provides the same loan term as current law. 
     (Section 1203)
       The Senate amendment provides the same loan term as current 
     law, and it establishes the same loan term for peanuts as 
     current law. (Sections 1203 and 1307)
       The Conference substitute adopts the House provision and 
     the Senate structure for the peanut program. (Sections 1203 
     and 1307)
     (13) Repayment of loans
       The House bill provides the same as current law, except it 
     specifies long grain rice, medium grain rice, and short grain 
     rice; includes peanuts; and for upland cotton, it specifies 
     that USDA use price quotes from Far East market to determine 
     the prevailing world market price for upland cotton; provides 
     for adjustments to the prevailing world market price; and 
     requires the prevailing world market price be adjusted to 
     U.S. quality and location; and authorizes further adjustment 
     in the prevailing world market price. The House bill requires 
     repayment rates for dry peas, lentils and small chickpeas to 
     be based on quality grades for those commodities. (Section 
     1204)
       The Senate amendment is similar to current law, except it 
     specifies long grain rice and medium grain rice, provides 
     similar provisions for upland cotton, and requires the loan 
     repayment rate for pulse crops to be based on the specified 
     quality grades for the applicable commodity. (Sections 1204 
     and 1307)
       The Conference substitute provides that the Secretary 
     calculate a loan repayment rate for loan commodities (other 
     than upland cotton, long grain rice, medium grain rice, extra 
     long staple cotton, and confectionery and each other kind of 
     sunflower seed (other

[[Page H3581]]

     than oil sunflower seed)) based on the average market prices 
     for the loan commodity during the preceding 30-day period. 
     The Conference substitute adopts the Senate provisions with 
     respect to upland cotton with an amendment to provide an 
     adjustment for average transportation costs and adjustments 
     related to U.S. premium factor. (Section 1204)
       The Managers have included section 1204(h) which grants 
     authority to the Secretary to modify repayment rates under 
     the marketing loan program in the event of a severe 
     disruption to marketing, transportation, or related 
     infrastructure. The purpose of this provision is to grant the 
     Secretary the authority to manage the marketing loan program 
     in a manner that protects the taxpayer in the event of a 
     major market disruption similar to the disruption that 
     followed Hurricane Katrina. The Managers intend for the 
     actions taken under this provision to be used on a short-term 
     and temporary basis that should not extend beyond the 
     duration of the disruption that gives rise to the exercise of 
     this authority. Further, the Secretary should not exercise 
     this authority if the disruption can be foreseen, such as, 
     routine or announced maintenance on infrastructure, but 
     rather should reserve this authority for extraordinary 
     circumstances.
       The Managers authorize the Department of Agriculture to 
     make significant adjustments in the marketing loan program 
     for upland cotton in sections 1204 and 1210. The Managers 
     recognize that the upland cotton marketing loan program will 
     undergo another significant change in the next marketing year 
     when the Department is expected to modify its determination 
     of the adjusted world price (AWP) in the absence of a North 
     European A index. The Managers understand from the Department 
     that it has the authority to make appropriate adjustments for 
     determining and calculating the AWP for upland cotton. The 
     Managers request that the Department ensure that an accurate 
     world price is discovered in the absence of a North European 
     index and appreciate communication from the Department about 
     any changes that may be made. The Managers encourage the 
     Department to make any changes in a manner that ensures a 
     seamless transition for the program, for the Department, and 
     for the entire cotton industry. The Managers also encourage 
     the Department to ensure that such AWP calculation achieves 
     the statutory goal of allowing upland cotton produced in the 
     United States to be competitive both domestically and 
     internationally.
     (14) Loan deficiency payments
       The House bill provides the same as current law for 2008-
     2012 crop years and includes peanuts. (Section 1205)
       The Senate amendment provides the same as current law for 
     2009-2012 crop years. For the 2008 crop year, the Senate 
     amendment establishes the effective date for payment rate 
     determination as the date on which the producers on the farm 
     lost beneficial interest and requires the Secretary to 
     establish procedures for consumption on the farm. (Sections 
     1205 and 1307)
       The Conference substitute adopts the House provision and 
     the Senate structure for the peanut program. (Sections 1205 
     and 1307)
     (15) Payments in lieu of loan deficiency payments for grazed 
         acreage
       The House bill provides the same as current law. (Section 
     1206)
       The Senate bill provides the same as current law. (Section 
     1206)
       The Conference substitute adopts the House provision. 
     (Section 1206)
     (16) Special marketing loan provisions for upland cotton
       The House bill requires the President to carry out a 
     special import quota program for upland cotton whenever the 
     Secretary determines that for a consecutive 4-week period, 
     the price of American cotton exceeds the price of cotton 
     delivered in the Far East markets. The term ``special import 
     quota'' is defined as a quantity of imports that is not 
     subject to the over-quota tariff rate of a tariff-rate quota. 
     The House bill provides that the amount of cotton that can 
     come into the U.S. under the special import quota during any 
     marketing year is limited to the equivalent of 10 weeks' 
     consumption of upland cotton by domestic mills. (Section 
     1207(a))
       Subsection (b) of the House bill provides the same as 
     current law. (Section 1207(b))
       Subsection (c) of the House bill requires the Secretary, 
     beginning on the date of enactment through July 31, 2013, to 
     issue marketing certificates or cash payments to domestic 
     users of upland cotton for uses of all cotton regardless of 
     origin. The payments or certificates will equal 4 cents per 
     pound. Assistance can only be used for acquisition, 
     construction, installation, modernization, development, 
     conversion, or expansion of land, plant, buildings, 
     equipment, facilities, or machinery. No end date is 
     specified. (Section 1207(c))
       The Senate amendment provides the same as the House measure 
     except it specifies the price of American cotton delivered to 
     a definable and significant international market. (Section 
     1207(a))
       Subsection (b) of the Senate amendment is the same as 
     current law, except it provides additional discretion on the 
     quantity of quota. (Section 1207(b))
       Subsection (c) of the Senate amendment requires the 
     Secretary, beginning August 1, 2008 through June 30, 2013, to 
     provide economic adjustment assistance equal to 4 cents per 
     pound to domestic users of upland cotton for all documented 
     use of cotton during the previous month regardless of the 
     origin of the cotton. The payment rate is reduced to 0 cents 
     per pound on July 1, 2013, terminating the funding for the 
     program. It specifies the same uses for the assistance as in 
     the House bill. (Section 1207(c))
       The Conference substitute adopts the Senate provision with 
     an amendment in subsection (c) to provide assistance equal to 
     4 cents per pound during the period August 1, 2008, through 
     July 31, 2012 and reduced to 3 cents per pound beginning on 
     August 1, 2012. (Section 1207)
     (17) Special competitive provisions for extra long staple 
         cotton
       The House bill provides the same as current law. (Section 
     1208)
       The Senate amendment provides the same as current law, 
     except that it does not specify the form of payments (cash or 
     certificates). (Section 1208)
       The Conference substitute adopts the Senate provision. 
     (Section 1208)
     (18) Availability of recourse loans for high moisture feed 
         grains and seed cotton
       The House bill provides the same as current law. (Section 
     1209)
       The Senate amendment provides the same as current law. 
     (Section 1209)
       The Conference substitute adopts the Senate provision. 
     (Section 1209)
     (19) Deadline for repayment of marketing assistance loan for 
         peanuts
       The House bill requires that marketing assistance loans for 
     peanuts be redeemed no later than June 30 of the year 
     subsequent to the year in which the peanuts were harvested. 
     Such loans not redeemed by the deadline shall be deemed 
     forfeited to the Commodity Credit Corporation. (Section 1210)
       The Senate amendment contains no comparable provision.
       The Conference substitute drops this provision.
     (19A) Reimbursable agreements and payments of administrative 
         expenses
       The Senate amendment provides that the Secretary may 
     implement any reimbursable agreements or provide for the 
     payment of administrative expenses for peanuts only in a 
     manner that is consistent with such activities in regard to 
     other commodities. (Section 1307)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 1307(g))
     (19B) Adjustments of loans for peanuts
       The Senate amendment provides authority to the Secretary to 
     adjust loan rates for peanuts based on differences in grade, 
     type, quality, location, and other factors. (Section 1308)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 1308)
     (20) Commodity quality incentive payments for healthy 
         oilseeds
       The House bill, subject to the availability of funds, 
     requires the Secretary to provide commodity quality incentive 
     payments during the 2009-2013 crop years for the production 
     of oilseeds with specialized traits that enhance human 
     health. Requires the Secretary to issue a request for 
     proposals for payments under this section. (Section 1211)
       The Senate amendment is similar to House provision, except 
     it has fewer requirements for proposals; does not specify 
     multi-year contracts; provides protection for proprietary 
     information; and authorizes $400 million for the period of 
     fiscal years 2008-2012 subject to appropriations. (Section 
     1705)
       The Conference substitute adopts the Senate provision with 
     an amendment that provides, subject to the availability of 
     funds, for a quality incentive program for oilseeds 
     demonstrated to improve the health profile of the oilseed for 
     use in human consumption for the period of fiscal years 2009-
     2012. The provision sets forth the requirements for 
     proposals, protects proprietary information, and provides for 
     program compliance and penalties. (Section 1605)
     (20A) Availability of average crop revenue payments
       The Senate amendment requires the Secretary to give 
     producers the opportunity to make a one-time election to 
     receive average crop revenue payments for the 2010, 2011, and 
     2012 crop years; the 2011 and 2012 crop years; or the 2012 
     crop year in lieu of participating in the direct and counter-
     cyclical program and the marketing assistance loan program. 
     Producers who elect to participate in the average crop 
     revenue program are eligible to receive fixed payments equal 
     to not less than the product of $15 per acre and the quantity 
     of base acres on the farm for all covered commodities and 
     peanuts. The Secretary is required to make revenue payments 
     available if the actual state revenue for a covered commodity 
     or peanuts is less than the average crop revenue guarantee 
     for that commodity. Average crop revenue payments are made 
     beginning October 1, or as soon as practicable thereafter, 
     after the end of the applicable marketing year (compared to 
     direct payments, this provision delays fixed ACR payments by 
     one year with no provision for advance payments). The Senate 
     amendment establishes actual state revenue as the product of 
     the actual state yield (the quantity of the covered commodity 
     or peanuts produced in the State during the crop year divided 
     by the number of planted acres) and the average crop revenue 
     harvest price (the harvest price used to calculate revenue 
     under revenue plans offered by the Federal

[[Page H3582]]

     Crop Insurance program). The average crop revenue program 
     guarantee equals 90 percent of the product of the expected 
     state yield per planted acre and the pre-planting price (the 
     price used to calculate revenue under revenue coverage plans 
     offered by the Federal Crop Insurance program) for the crop 
     year and the preceding 2 crop years. The pre-planting price 
     cannot decrease or increase more than 15 percent from the 
     pre-planting price for the preceding year. The payment 
     amount, in addition to the amount under section 1401(b)(2) is 
     equal to the product of: the difference between the average 
     crop revenue program guarantee and the actual state revenue; 
     85 percent of the base acres on the farm for the covered 
     commodity; the ratio of APH on the farm to the expected state 
     yield; and 90 percent. The Secretary is required to make 
     recourse loans available to producers who participate in this 
     program. (Section 1401)
       The House bill contains no comparable provision.
       The Conference substitute deletes this provision.
     (21) Sugar program
       The House bill maintains many provisions of current law as 
     it relates to the sugar program. However, the loan rate for 
     raw cane sugar is increased to 18.5 cents per pound and the 
     loan rate for refined beet sugar is increased to 23.5 cents 
     per pound. The House bill eliminates the authorization of the 
     Secretary to reduce loan rates if there were negotiated 
     reductions in export and domestic subsidies of other major 
     sugar producing countries. (Section 1301)
       The House bill extends current law with regard to the term 
     of the loan and the nonrecourse nature of the loan. 
     Processors are to make adequate assurances that payments to 
     growers will be proportional to the loan values, and the 
     Secretary is authorized to set minimums for such payments.
       The Secretary is required to operate the sugar program, to 
     the maximum extent practicable, at no cost to the Federal 
     government. If the producer agrees to reduce production under 
     an inventory disposition program, and such reduced production 
     involves sugar beets or sugarcane already planted, the sugar 
     beets or sugarcane produced on diverted acres may not be used 
     for any commercial purpose other than as a bioenergy 
     feedstock.
       The House bill requires the Secretary to collect 
     information on the production, consumption, stocks and trade 
     of sugar in Mexico, including United States exports of sugar 
     to Mexico; and publicly available information on Mexican 
     production, consumption, and trade of high fructose corn 
     syrups, including United States exports of high fructose corn 
     syrups to Mexico.
       The sugar program is extended through the 2012 crop year, 
     and the program for the 2007 crop will be operated as under 
     current law.
       The Senate amendment also maintains many provisions of 
     current law as it relates to the sugar program. However, the 
     loan rate for raw cane sugar is increased to 18.25 cents per 
     pound for 2009, 18.50 cents per pound for 2010, 18.75 cents 
     per pound for 2011, and 19.00 cents per pound for 2012; and 
     the loan rate for refined beet sugar is set at 128.5 percent 
     of the loan rate for raw cane sugar. (Section 1501)
       The Senate amendment requires that the Secretary collect 
     information on the production, consumption, stocks and trade 
     of sugar in Mexico, including United States exports of sugar 
     to Mexico; and publicly available information on Mexican 
     production, consumption, and trade of high fructose corn 
     syrups.
       All other provisions of the Senate amendment are the same 
     as the House bill.
       The Conference substitute adopts the Senate provision with 
     a modification to the loan rate. The loan rate for raw cane 
     sugar will increase to 18.25 cents per pound for 2009, 18.50 
     cents per pound for 2010, 18.75 cents per pound for 2011, and 
     18.75 cents per pound for 2012. The marketing loan rate for 
     refined beet sugar is set equal to 128.5 percent of the 
     loan rate for raw cane sugar beginning with the 2009 crop 
     year.
       The Conference amendment retains a requirement that the 
     Secretary collect information on the production, consumption, 
     stocks and trade of sugar in Mexico, including United States 
     exports of sugar to Mexico; and publicly available 
     information on Mexican production, consumption, and trade of 
     high fructose corn syrups. The Managers expect such 
     information on Mexican trade of high fructose corn syrups to 
     include both imports and exports. (Section 1401)
     (22) United States membership in the International Sugar 
         Organization
       The House bill requires the Secretary of Agriculture to 
     work with the Secretary of State to restore U.S. membership 
     within the International Sugar Organization within one year 
     from date of enactment of this bill. (Section 1302)
       The Senate amendment requires the Secretary of Agriculture 
     to work with the Secretary of State to restore, to the 
     maximum extent practicable, U.S. membership within the 
     International Sugar Organization within one year from date of 
     enactment of this bill. (Section 1504(l))
       The Conference substitute adopts the House provision. 
     (Section 1402)
     (23) Flexible marketing allotments for sugar
       The House bill extends and amends the provisions of the 
     Agricultural Adjustment Act of 1938 requiring the Secretary 
     to establish marketing allotments for the 2008 through 2012 
     crops of domestically produced sugar to balance supply and 
     demand and avoid loan forfeitures. (Section 1303)
       The House bill adds a definition of ``human consumption'' 
     in the context of sugar for human consumption, as meaning 
     sugar in human food, beverages, or similar products. The 
     House bill defines the term ``market'' as meaning to sell or 
     otherwise dispose of including the forfeiture of sugar under 
     the loan program, the movement of raw cane sugar into the 
     refining process, and the sale of sugar for the production of 
     ethanol or other bioenergy product, if the disposition of the 
     sugar is administered by the Secretary.
       The Secretary is required to establish at the beginning of 
     each crop year marketing allotments at a level to maintain 
     raw and refined sugar prices above forfeiture levels. The 
     overall allotment quantity is to be not less than 85 percent 
     of the estimated quantity of sugar for domestic human 
     consumption. The marketing allotments are to apply to the 
     marketing by processors of sugar intended for domestic human 
     consumption, with exceptions to facilitate the export of 
     sugar, to enable another processor to fulfill an allocation 
     established for that processor, or for uses other than 
     domestic human consumption. Processors are prohibited from 
     marketing for domestic human consumption a quantity in excess 
     of the allocation, with the same exceptions as current law.
       The House bill strikes the provision requiring the 
     Secretary to suspend allotments when the level of imports 
     will exceed 1.532 million short tons and retains the 
     procedures for the Secretary to reassign allotments if 
     processors cannot fulfill the allocations, and specifies that 
     any resulting imports must be in the form of raw cane sugar.
       The House bill includes the definition of ``seed'' for 
     purposes of allotments in proportionate share States. The 
     House bill authorizes the Secretary to transfer the acreage 
     base history of a sugarcane farm to any other parcels of land 
     of the applicant, in order to establish proportionate shares. 
     Sugarcane base acreage that has been, or is, converted to 
     non-agricultural use may be transferred to other land 
     suitable for the production of sugarcane that can be 
     delivered to a processor in a proportionate share State.
       The House bill includes transfers of mill allocations under 
     the procedures for appeals to the Secretary regarding 
     allotments, and eliminates an obsolete special appeal 
     procedure regarding beet sugar allocations.
       The House bill extends the sugar allotments through the 
     2012 crop year. Current law shall apply to flexible marketing 
     allotments for the 2007 crop year for sugar.
       The Senate amendment is similar to the House bill, with 
     technical changes with regard to definitions and a 
     modification to indicate that the exception for uses other 
     than domestic human consumption does not include the sale of 
     sugar for the production of ethanol or other bioenergy under 
     the Feedstock Flexibility Program. (Section 1504)
       The Conference substitute adopts the Senate provision with 
     a modification to clarify that should there be a sale of a 
     factory possessing an allocation of beet sugar, then the 
     Secretary is to transfer to the buyer the allocation that has 
     been agreed upon by the buyer and seller, assuming such an 
     agreement has been reached. Additionally, it clarifies that 
     following a conversion of sugarcane base acreage to a 
     nonagricultural use in a proportionate share state, the 
     Secretary is to notify the affected landowners of the 
     transferability of the applicable base not later than 90 days 
     after the agency becomes aware of the conversion. (Section 
     1403)
     (23A) Administration of tariff rate quotas
       The House bill provides that the Secretary is to establish 
     at the beginning of the quota year, the tariff-rate quotas 
     for raw cane sugar and refined sugars at the minimum level 
     necessary to comply with obligations under international 
     trade agreements approved by Congress. The Secretary may take 
     action to increase the supply of sugar on or after April 1 of 
     each fiscal year, with certain constraints on that action. 
     Before April 1, the Secretary is to take action to increase 
     the supply of sugar only if there is an emergency shortage of 
     sugar in the United States market that is caused by war, 
     flood, hurricane, or other natural disaster or other similar 
     event. The House bill would also require the Secretary to 
     establish orderly shipping patterns for sugar imports. 
     (Section 1303)
       The Senate amendment is similar to the House bill except 
     the Senate amendment does not contain the provision requiring 
     the Secretary to establish shipping patterns. (Section 1504)
       The Conference substitute adopts the Senate provision. 
     (Section 1403)
     (23B) Storage facility loans
       The Senate amendment prohibits penalties for prepayment of 
     sugar storage facility loans. (Section 1502)
       The House contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 1404)
     (23C) Commodity Credit Corporation storage payments
       The Senate amendment establishes rates for the storage of 
     forfeited sugar for each of the 2008 through 2011 crop years 
     in an amount that is not less than 15 cents per hundredweight 
     of refined sugar per month or 10 cents per hundredweight of 
     raw cane sugar per month. For each of the 2012 and subsequent 
     crop years, establishes storage payments at rates in effect 
     at the time of enactment. (Section 1503)

[[Page H3583]]

       The House contains no comparable provision.
       The Conference substitute [adopts the Senate provision]. 
     (Section 1405)
     (23D) Sense of the Senate regarding NAFTA sugar coordination
       The Senate amendment provides a sense of the Senate that 
     the United States and Mexico should coordinate their 
     respective sugar policies and that the United States should 
     consult with Mexico on policies to maximize benefits for 
     growers, processors and consumers. (Section 1505)
       The House contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (24) Dairy Product Price Support Program
       The House bill requires the Secretary to support the price 
     of cheddar cheese, butter, and nonfat dry milk by purchasing 
     such products at specified prices: cheddar cheese in blocks 
     at not less than $1.13 per pound; cheddar cheese in barrels 
     at not less than $1.10 per pound; butter at not less than 
     $1.05 per pound; and nonfat dry milk at not less than $0.80 
     per pound. If net removals of cheese, butter or nonfat dry 
     milk exceed specific limits for 12 consecutive months, the 
     Secretary may reduce the purchase prices of that commodity 
     during the month that immediately follows. The prices that 
     the Secretary pays under this section for the commodities 
     must be uniform across the country. The Secretary may sell 
     cheese, butter, or nonfat dry milk for unrestricted use from 
     inventories of the Commodity Credit Corporation at prevailing 
     market prices, but not less than 110 percent of the prices 
     specified in the Purchase Price subsection. (Section 1401)
       The Senate amendment requires the Secretary to support the 
     price of cheddar cheese, butter, and nonfat dry milk by 
     purchasing such products at specified prices: cheddar cheese 
     in blocks at not less than $1.13 per pound; cheddar cheese in 
     barrels at not less than $1.10 per pound; butter at not less 
     than $1.05 per pound; and nonfat dry milk at not less than 
     $0.80 per pound. The prices that the Secretary pays under 
     this section for the commodities must be uniform across the 
     country. The Secretary may sell cheese, butter, or nonfat dry 
     milk for unrestricted use from inventories of the Commodity 
     Credit Corporation at prevailing market prices, but not less 
     than 110 percent of the prices specified in the Purchase 
     Price subsection. (Section 1601)
       The Conference substitute adopts the House provision with 
     an amendment to delete an unnecessary reference to Commodity 
     Credit Corporation funding. (Section 1501)
     (25) Dairy Forward Pricing Program
       The House bill requires the Secretary to establish the 
     Dairy Forward Pricing Program, which authorizes milk 
     producers to voluntarily enter into forward price contracts 
     with milk handlers for milk that is not Class I. Under such 
     forward price contracts, prices received by milk producers 
     and cooperatives will be deemed to satisfy all regulated 
     minimum milk price requirements. Milk handlers will be 
     prohibited from requiring participation in a forward price 
     contract, and the Secretary is required to investigate 
     complaints and to take appropriate action if evidence of 
     coercion is found. No forward price contract can be 
     entered into after September 30, 2012, or extend beyond 
     September 30, 2015. (Section 1402)
       The Senate amendment amends the former dairy forward 
     pricing pilot program to establish a program that allows milk 
     producers and cooperative associations to voluntarily enter 
     into forward price contracts with milk handlers with 
     protections for producers that are similar to the protections 
     provided in the House bill. (Section 1606)
       The Conference substitute adopts the House provision. 
     (Section 1502)
     (26) Dairy Export Incentive Program
       The House bill reauthorizes the dairy export incentive 
     program until December 31, 2012, and authorizes the Secretary 
     to issue rules to ensure that each year the maximum volume of 
     dairy product exports allowable within the United States' 
     obligations under the Uruguay Round Agreements is exported. 
     (Section 1403)
       The Senate amendment reauthorizes the dairy export 
     incentive program until December 31, 2012. (Section 1603)
       The Conference amendment adopts the House provision.
     (27) Revision of Federal marketing order amendment procedures
       The House bill requires the Secretary, upon receiving a 
     written request for a hearing to amend a milk marketing 
     order, issue a denial of the request or issue a notice of the 
     hearing, and stipulates the timeframe for a hearing. Notice 
     for a hearing on a proposed amendment to a marketing order 
     must be provided not less than three days before the date of 
     the hearing. The Secretary is required to issue a recommended 
     decision on a proposed amendment to a milk marketing order no 
     more than 90 days after the date set for the submission of 
     post-hearing findings, conclusions and written arguments. 
     Further, the House provision requires the final decision to 
     be issued no more than 60 days after the recommended decision 
     was issued. If the Secretary receives a request for a hearing 
     on a proposed amendment to a milk marketing order within 90 
     days after announcing a decision on a previously proposed 
     amendment to the same order, and the two proposed amendments 
     are essentially the same, the Secretary is not required to 
     call a hearing. (Section 1404)
       The Senate amendment requires the Secretary to issue 
     supplemental rules of practice within 60 days of enactment 
     and establishes 5 provisions to be included in the rules of 
     practice. The Secretary, upon receiving a proposal for a 
     hearing regarding a milk marketing order, is required to 
     issue an action plan and expected timeframes for completion 
     of the hearing not more than 180 days after the date of the 
     notice; issue a request for additional information regarding 
     the proposal; or issue a denial of the request. The Senate 
     amendment establishes a time limit of 90 days after the 
     deadline for submitting post-hearing briefs for USDA to issue 
     a recommended decision on proposed amendments to milk 
     marketing orders and to issue a final decision within 60 days 
     after the deadline for submission of comments and exceptions 
     to the recommended decision. The Senate amendment authorizes 
     industry assessments to supplement appropriated funds if 
     necessary to improve or expedite rulemaking; and authorizes 
     the use of informal rulemaking to amend orders, other than 
     provisions of orders that directly affect milk prices. The 
     Secretary is required, as part of any hearing to adjust make 
     allowances, to determine the average monthly prices of feed 
     and fuel incurred by dairy producers in the relevant 
     marketing area and to consider those prices in determining 
     whether or not to adjust make allowances. (Section 1605)
       The Conference substitute adopts the Senate provision with 
     amendments to reduce the amount of time allowed for 
     completion of a hearing to 120 days, provide a limit of up to 
     60 days for submission of post-hearing briefs, delete 
     specific requirements related to the content of the hearing 
     action plan; and adopt the House language designed to avoid 
     duplicative hearings for similar petitions received within 90 
     days of the announcement of a decision on a previously 
     proposed amendment. The conference substitute also sunsets 
     the applicability of the Senate provision related to hearings 
     involving adjustments to make-allowances coincident with the 
     Food, Conservation, and Energy Act of 2008.
     (28) Dairy Indemnity Program
       The House bill reauthorizes the dairy indemnity program 
     through September 30, 2012. (Section 1405)
       The Senate amendment reauthorizes the dairy indemnity 
     program through September 30, 2012. (Section 1603)
       The Conference substitute adopts the House provision.
     (29) Extension of Milk Income Loss Contract Program
       The House bill reauthorizes the MILC program through 2012, 
     under the same terms as current law. (Section 1406)
       The Senate amendment amends the MILC program for the period 
     October 1, 2008 through August 31, 2012 by increasing the 
     payment factor from 34 percent to 45 percent and by 
     increasing the annual eligible payment quantity from 2.4 
     million pounds to 4.15 million pounds. (Section 1602)
       The Conference substitute provides for the continuation of 
     the program. For the period from October 1, 2008 through 
     August 31, 2012, the payment factor is increased to 45 
     percent, the annual eligible payment quantity is increased to 
     2,985,000 pounds, and the $16.94 per hundredweight price is 
     adjusted whenever the National Average Dairy Feed Ration Cost 
     for a month is greater than $7.35 per hundredweight by 45 
     percent of the percentage increase in the feed ration cost. 
     Beginning September 1, 2012, the trigger for the adjustment 
     in the price used to determine the payment rate is set at 
     $9.50 per hundredweight. (Section 1506)

      FEED PRICE RATIOS: UNITED STATES, MARCH 2008 WITH COMPARISONS
------------------------------------------------------------------------
                                       2007               2008
       Feed Price Ratio \1\       --------------------------------------
                                       Mar          Feb          Mar
------------------------------------------------------------------------
Broiler-Feed: Pounds of Broiler            5.9        * 3.9          3.8
 Grower Feed equal in value to 1
 pound of broiler, live weight
 \2\.............................
Market Egg Feed: Pounds of Laying          9.1       * 11.1         11.4
 Feed equal in value to 1 dozen
 eggs \3\........................
Hog-Corn: Bushels of Corn equal           13.1        * 9.3          8.5
 in value to 100 pounds of hog,
 live weight.....................
Milk-Feed: Pounds of 16% Mixed            2.39       * 2.24         2.05
 Dairy Feed equal in value to 1
 pound of Whole Milk \4\.........
Steer & Heifer-Corn: Bushels of           28.5       * 20.8         19.4
 Corn equal in value to 100
 pounds of Steer & Heifers, live
 weight..........................
Turkey-Feed: Pounds of Turkey              5.5        * 3.6          3.8
 Grower equal in value to 1 pound
 of Turkey, live weight \5\......
------------------------------------------------------------------------
\1\ Effective January 1995, prices of commercial prepared feeds are
  based on current U.S. prices received for corn, soybeans, alfalfa hay,
  and all wheat.
\2\ The price of commercial prepared broiler feed is based on current
  U.S. prices received for corn and soybeans. The modeled feed uses 58
  percent corn and 42 percent soybeans.
\3\ The price of commercial prepared layer feed is based on current U.S.
  prices received for corn and soybeans. The modeled feed uses 75
  percent corn and 25 percent soybeans.
\4\ The price of commercial prepared dairy feed is based on current U.S.
  prices received for corn, soybeans, and alfalfa. The modeled feed uses
  51 percent corn, 8 percent soybeans, and 41 percent alfalfa.
\5\ The price of commercial prepared turkey feed is based on current
  U.S. prices received for corn, soybeans, and wheat. The modeled feed
  used 51 percent corn, 28 percent soybeans, and 21 percent wheat.
 
* Revised.


[[Page H3584]]


             PRICES USED TO CALCULATE FEED PRICE RATIOS: UNITED STATES, MARCH 2008 WITH COMPARISONS
----------------------------------------------------------------------------------------------------------------
                                                                                 Entire Month        Preliminary
                 Commodity                               Unit             --------------------------------------
                                                                             Mar 2007     Feb 2008     Mar 2008
----------------------------------------------------------------------------------------------------------------
Broilers, Live............................  Lb...........................        0.500        0.500        0.510
Eggs, Market..............................  Doz..........................        0.681        1.220        1.300
Hogs, All.................................  Cwt..........................        44.90        42.20        41.20
Milk, All.................................  Cwt..........................        15.60        19.10        18.30
Steers and Heifers........................  Cwt..........................        97.70        94.20        93.80
Turkeys, Live.............................  Lb...........................        0.443        0.475        0.529
Corn......................................  Bu...........................         3.43         4.53         4.83
Hay, Alfalfa, Baled.......................  Ton..........................       121.00       138.00       143.00
Soybeans..................................  Bu...........................         6.95        11.70        11.90
Wheat, All................................  Bu...........................         4.75         9.98        11.70
----------------------------------------------------------------------------------------------------------------


                    FEEDER LIVESTOCK: PRICES PAID, UNITED STATES, MARCH 2008 WITH COMPARISONS
----------------------------------------------------------------------------------------------------------------
                                                                               2007               2008
                 Commodity                               Unit             --------------------------------------
                                                                               Mar          Feb          Mar
----------------------------------------------------------------------------------------------------------------
Feeders and Stockers Cattle and Calves....  Cwt..........................      $105.40    * $103.90      $101.60
Feeder Pigs...............................  Cwt..........................       157.00       113.00       115.00
----------------------------------------------------------------------------------------------------------------
* Revised.

     (30) Dairy Promotion and Research Program
       The House bill extends the authority to expend funds to 
     develop foreign markets through fiscal year 2012; amends the 
     definition of ``United States'' to include Alaska, Hawaii, 
     the District of Columbia, and the Commonwealth of Puerto Rico 
     for both promotion and research programs; and provides for a 
     refund of assessments for importers on contracts in effect 
     prior to July 26, 2007, for a period of one year after the 
     date of enactment. (Section 1407)
       The Senate amendment extends the authority to expend funds 
     to develop foreign markets through fiscal year 2012. (Section 
     1604)
       The Conference substitute adopts the House provision with 
     an amendment to reduce the rate of assessment on imported 
     dairy products to 7.5 cents per hundredweight. The substitute 
     also amends the Dairy Promotion Stabilization Act of 1983 to 
     authorize the Secretary to establish by regulation the time 
     and method of importer payments under the Act. (Section 1507)
       The Farm Security and Rural Investment Act of 2002 amended 
     Section 112 of the Dairy Promotion Stabilization Act of 1983 
     (7 U.S.C. 4503(d)) to require that, ``The Secretary, in 
     consultation with the United States Trade Representative, 
     shall ensure that the order is implemented in a manner 
     consistent with the international trade obligations of the 
     Federal Government.'' The Managers expect the Secretary to 
     consult with the United States Trade Representative to ensure 
     that any action taken pursuant to this section is consistent 
     with the bilateral, regional and multilateral trade 
     obligations of the Federal Government.
     (31) Report on Department of Agriculture reporting procedures 
         for nonfat dry milk
       The House bill requires the Secretary to submit a report to 
     Congress within 90 days of enactment of this Act regarding 
     USDA's reporting procedures for nonfat dry milk and the 
     impact of those procedures on Federal milk marketing order 
     minimum prices during the period July 1, 2006, through the 
     date of enactment of this Act. (Section 1408)
       The Senate amendment is the same as the House provision 
     except it requires the Secretary to submit the report to the 
     House Committee on Agriculture and the Senate Committee on 
     Agriculture, Nutrition, and Forestry. (Section 1607)
       The Conference substitute adopts the Senate provision. 
     (Section 1508)
       The Managers are encouraged by the corrective action agreed 
     to by the Department in connection with a prior misreporting 
     of nonfat dry milk prices and encourage the Secretary to 
     submit periodic implementation progress reports to the House 
     Committee on Agriculture and the Senate Committee on 
     Agriculture, Nutrition, and Forestry. While the Senate 
     provision to require USDA to formally designate an official 
     to be in charge of coordinating dairy oversight was not 
     included in the conference report, the Managers intend that 
     USDA continue with the steps to improve coordination of dairy 
     oversight within the Department and with other relevant 
     agencies as necessary to ensure accurate price 
     determinations.
     (32) Federal Milk Marketing Order Review Commission
       The House bill, subject to the availability of funds, 
     establishes the Federal Milk Marketing Order Review 
     Commission to conduct a comprehensive review and evaluation 
     of the current Federal milk marketing order system and non-
     Federal milk marketing order systems. The House bill provides 
     for the appointment of 18 Commission members; requires the 
     commission to issue a report to Congress and the Secretary of 
     Agriculture with the results of the review and evaluation 
     conducted under this section; and stipulates that the 
     commission is wholly advisory in nature, and the 
     recommendations it issues are non-binding. (Section 1608)
       The Senate amendment is similar to the House provision 
     except it provides additional areas for the Commission to 
     evaluate and modifies the appointment of Commission members. 
     (Section 1608)
       The Conference substitute adopts the House provision except 
     the objectives of the Commission are modified, the number of 
     commission members is reduced to 14 and all Commission 
     members will be appointed by the Secretary.
       The Managers are aware of a number of dairy reform 
     proposals being advocated at the State, regional and National 
     level to simplify and improve the Federal milk marketing 
     order system. The Managers intend that the Commission should 
     evaluate as many of these proposals as practicable. 
     Specifically, the Commission should analyze and report on the 
     potential economic benefits of establishing a 2-class system 
     of classified milk consisting of a fluid milk class and a 
     manufacturing grade milk class with the price of both classes 
     determined using similar component prices of butterfat, 
     protein, and other solids. The Commission should also 
     evaluate the economic impacts of proposals to eliminate 
     advance pricing that is currently used to calculate the 
     prices of Class I and Class II skim milk and instead use 4-
     week component prices that are used to calculate prices for 
     Class III and Class IV milk.
     (32A) Mandatory reporting of dairy commodities
       The Senate amendment amends current law to require 
     corporate officers or officially-designated representatives 
     of each dairy processor (other than those that process less 
     than 1 million pounds of dairy products a year) to report to 
     the Secretary on each daily reporting day such price, 
     quantity, and product characteristics as the Secretary 
     determines appropriate with respect to those package sizes 
     used to establish minimum prices for Class III or Class IV 
     milk under Federal milk marketing orders. The Senate 
     amendment requires the Secretary to make the information 
     reported available to the public on the same day as the 
     information is reported, and requires dairy manufacturers to 
     report, at periodic intervals, the quantities of dairy 
     products in storage. (Section 1609)
       The House bill has no comparable provision.
       The Conference substitute provides authority for the 
     Secretary to establish an electronic reporting system, 
     subject to the availability of funds; and requires the 
     Secretary to increase the frequency of mandatory reporting of 
     sales of dairy products once the electronic reporting system 
     is in place. (Section 1510)
     (32B) Additional mandatory dairy reporting
       The Senate amendment amends current law as amended by 
     section 1609 to require regular audits and comparisons with 
     other related dairy market statistics on at least a quarterly 
     basis. (Section 1610)
       The House bill has no comparable provision.
       The Conference substitute provides for quarterly audits of 
     information submitted or reported and comparison of such 
     information with related dairy market statistics, and 
     incorporates this requirement in the previous section. 
     (Section 1510)
     (33) Administration generally
       The House bill authorizes the use of the Commodity Credit 
     Corporation in carrying out the provisions of title I, and, 
     generally, continues other administrative provisions of the 
     2002 farm bill. (Section 1501)
       The Senate amendment includes the same provisions as the 
     House measure, and includes an additional provision to exempt 
     producers who have an option to receive advance direct and 
     partial counter-cyclical payments from constructive receipt 
     of those payments. (Section 1701)
       The Conference substitute adopts the Senate provision with 
     an amendment to provide for interim regulations to implement 
     the payment limitations and adjusted gross income provisions. 
     (Section 1601)

[[Page H3585]]

       Beginning with the 2009 crop, the Conference substitute 
     includes significant reforms to payment limitation and 
     adjusted gross income provisions. This is a complex and long-
     standing area of the law and regulations, many of which have 
     been in effect for decades. The continuity and predictability 
     of these regulations is important to the economic stability 
     of farm operators, the lenders that finance them, the input 
     suppliers who provide their seed, feed, fertilizer and other 
     inputs, and indeed for the agricultural economy as a whole. 
     In order to avoid undue disruption of all of these sectors of 
     the agricultural economy, the Managers expect USDA to provide 
     adequate notice and opportunity for comment, consistent with 
     the interim rule process, for Sections 1603 and 1604, to 
     ensure these changes are implemented in a manner that is 
     least disruptive to producers and other stakeholders, and 
     that allows the programs to continue to achieve their 
     objectives.
       The Managers further expect that in the rulemaking process, 
     USDA will give priority to addressing matters within the 
     scope of these legislative changes and guidance in this 
     Statement in order to minimize program and regulatory 
     disruption, to maximize continuity and predictability, and to 
     focus the scarce resources of the Department of Agriculture 
     on implementing these and other specific regulatory 
     requirements in this bill.
       The Managers also expect that during the interim rule 
     process USDA will amend the regulations as necessary or 
     appropriate to implement these statutory changes consistent 
     with the intent and guidance provided by the Managers 
     throughout this Statement. The Managers expect the notice and 
     comment period regarding the implementation of the AGI and 
     payment limitation provisions to include issues such as, 
     family definitions, denial of program benefits, notification 
     of interests in operation, changes in farming operations, 
     actively engaged, schemes and devices, apportionment of 
     income for joint filers, and spousal eligibility. The 
     Managers expect the Secretary to implement the AGI provision 
     in a manner that provides equitable treatment, to the maximum 
     extent practicable, to all producers.
     (34) Suspension of permanent price support authority
       The House bill provides the same as current law for 2008-
     2012 crops and for milk through December 31, 2012. (Section 
     1502)
       The Senate amendment provides the same as the House measure 
     except does not include peanuts. (Section 1702)
       The Conference substitute adopts the House provision. 
     (Section 1602)
     (35) Payment limitations
       The House bill extends payment limitations in the 2002 farm 
     bill, with revisions including the elimination of limitations 
     on marketing loan benefits and loan deficiency payments. It 
     amends the Food Security Act of 1985 to limit the total 
     amount of direct payments that a person or legal entity may 
     receive in a crop year to $60,000, excluding peanuts; and 
     counter-cyclical payments that a person or legal entity may 
     receive in a crop year to $65,000, excluding peanuts. For 
     peanuts, a person or entity may not receive more than $60,000 
     for direct payments, and no more than $65,000 for counter-
     cyclical payments. The House bill defines the term ``legal 
     entity'' as an entity that owns land or an agricultural 
     commodity, or produces an agricultural commodity; and the 
     term ``person'' as a natural person, and does not include a 
     legal entity. The House bill provides for direct attribution 
     for payments, by requiring the Secretary to promulgate 
     regulations to ensure that the total amount of payments are 
     attributed to a person, by taking into account the direct and 
     indirect ownership interests of the person in a legal entity. 
     It provides that every payment made directly to a person will 
     be combined with the person's pro rata interests in payments 
     received by a legal entity in which the person has an 
     ownership interest. It further provides that for every 
     payment made to a legal entity, the payment will be 
     attributed to those persons with an ownership interest in the 
     entity traced through four levels of ownership in the 
     entities, and includes a framework for that attribution. 
     (Section 1503)
       The Senate amendment is similar to the House measure, 
     except it establishes payment limitations under the new act 
     at $40,000 for a combination of both traditional direct and 
     average crop revenue fixed payments, and $60,000 for counter-
     cyclical payments and the revenue portion of average crop 
     revenue payments. It strikes the definition of ``loan 
     commodity, thereby also terminating the limitations on 
     marketing loan gains and loan deficiency payments,'' adds 
     definitions for ``family member'', ``legal entity'', and 
     ``person,'' and includes spouses in the definition of family 
     member. The Senate amendment provides similar direct 
     attribution requirements, except payments made to a legal 
     entity shall be reduced proportionately by an amount that 
     represents the direct or indirect ownership in the legal 
     entity that has otherwise exceeded the applicable payment 
     limitation. (Section 1703)
       The Conference substitute adopts the Senate provision with 
     an amendment that provides a $65,000 payment limit for 
     counter-cyclical payments, a reduced direct payment limit for 
     participants in the ACRE program to reflect the amount the 
     direct payment is cut as a condition to participate in ACRE, 
     and a limit in the amount of counter-cyclical and ACRE 
     payments that reflects the $65,000 limit plus the amount of 
     that the direct payment limit is reduced. The counter-
     cyclical limits and ACRE limits are combined for those 
     producers who participate in ACRE because producers would be 
     eligible to participate in the counter-cyclical program on 
     one farm and the average crop revenue election on a separate 
     farm. (Section 1603)
       The change in the administration of the payment limit 
     provisions from one based on separate ``person'' 
     determinations to one that attributes income among persons 
     and entities, based upon their share of participation, is, by 
     design, less susceptible to manipulation by changing the 
     farming structure to introduce multiple farming entities. 
     With this change, many farming operations that had been 
     approved under current law, may wish to reorganize such 
     operations for estate or tax purposes or for other reasons. 
     It is the intent of the Managers that, consistent with the 
     action taken by the Congress with the passage of the 
     significant changes in farm program participation in 1987, 
     that during the 2008 and 2009 program years, persons should 
     not be penalized for changing their farming operation 
     structure given such a significant change in the law 
     administering payment limitations.
     (35A) Special rules
       The House bill amends section 1001 of the Food Security Act 
     of 1985 by inserting a new subsection (e) to essentially 
     continue current rules for minor children, marketing 
     cooperatives, trusts and estates, cash rent tenants, and 
     federal agencies. For state, local governments, and their 
     political subdivisions, it prohibits them from receiving 
     direct and counter-cyclical payments unless they are the 
     producer of all crops on the farm and the proceeds of the 
     production benefits a public school or they have an existing 
     share crop lease. If the state, local government, or 
     political subdivision is the producer, all such qualified 
     entities in a state have a combined limit of one entity for 
     the payments they receive. For share crop leases, if the land 
     is used to maintain a public school, the state, local 
     government, or political subdivision may continue to receive 
     payments under current law until the lease expires. It 
     provides for a 2-5 year denial of benefits for evasion of 
     payment limits, including the failure to disclose material 
     information, and that benefits be denied on a pro-rata basis 
     according to ownership. In addition, the language provides 
     that the addition of a family member under the provisions of 
     section 1001A will be considered to be a bona fide and 
     substantive change. This language encompasses the addition of 
     a spouse to a farming operation, given the new provisions in 
     section 1001A concerning spouses. (Section 1503)
       The Senate amendment provides the same as the House 
     measure, except it maintained current law with regard to 
     production on land owned by state and local governments when 
     the proceeds are used to maintain a public school. The Senate 
     amendment expands the enforcement capability of the Secretary 
     and provides for extended penalties for individuals or 
     entities that perpetuate a fraud or a scheme or device in 
     order to exceed the applicable limit on payments. Persons or 
     entities that commit fraud or equally serious actions can be 
     subjected to a five-year denial of program benefits. Any 
     member of a legal entity that participates in a scheme or 
     device to evade the limitations shall be jointly and 
     severally liable for any amounts determined to be payable to 
     the Secretary. The Secretary may partially or fully release 
     from liability any person who cooperates with the Secretary 
     in enforcing payment limitation provisions. (Section 1703)
       The Conference amendment adopts the Senate provision with 
     an amendment to provide a single, combined statewide payment 
     limit of $500,000 upon all state and local governments and 
     political subdivisions that receive farm program payments. 
     This limit would not apply to states with populations less 
     than 1.5 million. (Section 1603)
       It is the intent of the Managers that the addition of a 
     spouse (also a family member) will be considered to be bona 
     fide and substantive--just as with the addition of any family 
     member.
     (35B) Three-entity rule; actively engaged in farming; denial 
         of program benefits
       The House bill amends the Food Security Act of 1985 to 
     repeal the three-entity rule and to require notification of 
     interests. Each entity or person receiving payments is to 
     provide the Secretary the name and social security number of 
     each individual, or the name and tax ID number of each 
     entity, that holds or acquires an ownership interest; and for 
     each person, provide such information for each entity in 
     which the person holds an ownership interest. (Section 1503)
       The Senate amendment provides the same as the House 
     measure. (Section 1703)
       The Conference amendment adopts the Senate provision with 
     an amendment to replace ``presented false information that 
     was material'' with ``failed to disclose material 
     information'' and to specify that the provisions apply to any 
     legal entity and any member of any legal entity. (Section 
     1603)
     (35C) Actively engaged in farming
       The House bill amends the Food Security Act of 1985 to 
     essentially continue the provisions that recipients be 
     ``actively engaged'' in farming. Existing special classes of 
     actively engaged participants are continued, with the 
     exception that as long as one spouse is determined to be 
     actively engaged, the

[[Page H3586]]

     other spouse shall be determined to have met the requirements 
     of personal labor or active personal management. (Section 
     1503)
       The Senate amendment provides the same as the House 
     measure. (Section 1703)
       The Conference substitute adopts the Senate provision. 
     (Section 1603)
       Current law concerning spouses made it very difficult for a 
     spouse to be considered to be a separate person for the 
     purpose of the application of the payment limits. In adopting 
     the provision that if one spouse has been determined to be 
     ``actively engaged,'' then the other spouse will be deemed to 
     have made a significant contribution of active labor or 
     active personal management to the operation as required by 
     section 1001A(b)(2)(A)(i)(II), it is the intent of the 
     Managers that this provision recognize the valuable 
     contributions made by the spouse in a family farming 
     operation as well as the significant value of these 
     contributions to the overall success of family farming 
     operations in America. It is further the intent of the 
     Managers that in implementing this section, the Secretary 
     shall consider such automatic ``significant'' contribution of 
     active labor or active personal management to be commensurate 
     with at least a 50% share in the profits and losses of the 
     farming operation and to be at risk. It is the intent of the 
     Managers to end the discrimination against spouses of farming 
     families and reflect their true value to the farming 
     operation. By assigning a ``significant'' level of 
     contribution of labor or active management, the Conference 
     Substitute requires the spouse only to make a significant 
     contribution of capital, equipment, or land in order to be 
     considered actively engaged.
     (35D) Transition
       The House bill provides that the current provisions of 
     Section 1001 of the Food Security Act of 1985 will remain 
     applicable to the 2007 crop. (Section 1503)
       The Senate amendment provides the same as the House 
     measure. (Section 1703)
       The Conference substitute provides that the current 
     provisions of sections 1001, 1001A, and 1001B of the Food 
     Security Act of 1985 will remain applicable to the 2007 and 
     2008 crops. (Section 1603)
     (36) Adjusted gross income limitation
       The House bill extends the adjusted gross income limitation 
     to programs under this Act and extends the effective period 
     through the 2012 crop year. (Section 1504(a))
       It also amends section 1001D of the Food Security Act of 
     1985, beginning with the 2008 crop year, to require that 
     individuals or entities have an average adjusted gross income 
     (AGI) not exceeding $1 million in order to receive program 
     payments. Further provides that an individual or entity with 
     an AGI in excess of $500,000 shall not be eligible for 
     benefits, unless at least 66.66 percent of the AGI is derived 
     from farming, ranching, or forestry operations, as determined 
     by the Secretary. (Section 1504(b))
       Modified AGI limits applicable to the 2008 through 2012 
     crop years. (Section 1504)
       The Senate amendment extends the effective period through 
     the 2012 crop year. (Section 1704(a))
       It amends section 1001D of the Food Security Act of 1985 to 
     lower the applicable average adjusted gross income (AGI) 
     limit for recipients of direct or counter-cyclical payments, 
     marketing loan gain or loan deficiency payments and average 
     crop revenue payments from the current level of $2.5 million 
     to $1,000,000 for the 2009 crop year and to $750,000 for the 
     2010 and subsequent crop years. Individuals or entities that 
     receive 66.66% of their income from farming, ranching or 
     forestry operations are exempted from this restriction. The 
     Senate amendment establishes the income limitation for 
     conservation programs at the current level of $2.5 million, 
     unless not less than 75 percent of the AGI is derived from 
     farming, ranching, or forestry operations. (Section 1704(c))
       The Senate Amendment provides that existing adjusted gross 
     income provisions of the Food Security Act shall continue to 
     apply with respect to the 2007 and 2008 crops. (Section 
     1704(d))
       Authorizes the allocation of adjusted gross income among 
     the individuals filing joint returns provided the allocation 
     is supported by a certified public accountant or attorney. 
     (Section 1704(b))
       The Conference substitute provides an average adjusted 
     gross nonfarm income cap of $500,000. If the average AGI for 
     nonfarm income of a person or legal entity exceeds $500,000, 
     they become ineligible for a host of farm programs, including 
     the non-insured assistance program and the new disaster 
     program. The Substitute also provides for an average adjusted 
     gross farm income cap of $750,000. If a person's or legal 
     entity's average farm AGI exceeds $750,000, then they become 
     ineligible for direct payments.
       The Conference substitute provides an average adjusted 
     gross nonfarm income cap of $1,000,000 for conservation 
     programs unless two-thirds or more of the income of the 
     person or legal entity is average adjusted gross farm income. 
     The Secretary is authorized to waive the limitation on a 
     case-by-case basis if the Secretary determines that 
     environmentally sensitive land of special significance would 
     be protected. (Section 1604)
       New section 1001D(a)(3) provides that married couples 
     filing joint returns may allocate appropriately their income 
     among themselves for the purposes of applying both the new 
     $750,000 adjusted gross farm income test and the new $500,000 
     nonfarm income test to each individual spouse. The section 
     requires that to secure this allocation married couples must 
     provide a professional third party certification of the 
     method used to apportion the income, and the Secretary must 
     determine that the submission is appropriate. The Managers 
     expect the Secretary to apply this provision carefully and 
     that its impact should be limited to the unique and special 
     circumstances of each individual case.
       The new provisions under section 1001D will take effect in 
     2009 and will be based on the 3 tax years preceding the most 
     immediate preceding tax year. Since these tax years occur in 
     the past and income decisions regarding them were based on 
     past circumstances the Managers expect the Secretary to allow 
     modifications to the allocation of income in these past years 
     in order to implement the new income requirements in as least 
     disruptive manner possible.
       The Conference Substitute strengthens the certification 
     requirements and ensures the Secretary can take appropriate 
     action against a person or legal entity that fails to provide 
     certifications concerning their average adjusted gross 
     income, average adjusted gross farm income and average 
     adjusted gross nonfarm income. Certifications are required to 
     be provided at least once every 3 years. The Managers intend 
     for the Secretary to deny program benefits to a person or 
     legal entity that does not provide the certifications 
     required in section 1001D, as amended, until such time as the 
     certifications are actually provided. The Secretary is also 
     to establish audit procedures that are designed to ensure 
     that audits are directed toward those persons or legal 
     entities that are most likely to exceed the adjusted gross 
     income ceilings set out in section 1001D, but is not designed 
     to authorize the Secretary to conduct repeated audits of 
     operations based upon size alone.
     (36A) Income derived from farming, ranching or forestry
       The House bill amends section 1001D of the FSA by adding a 
     new paragraph (3) to delineate income that is to be included 
     in the portion of average adjusted gross income derived from 
     farming, ranching, or forestry to include the following: The 
     production of crops, livestock, or unfinished raw forestry 
     products; the sale, including the sale of easements and 
     development rights, of farm, ranch, or forestry land or water 
     rights; the sale, but not as a dealer, of equipment purchased 
     to conduct farm, ranch, or forestry operations when the 
     equipment is otherwise subject to depreciation expense; the 
     rental of land used for farming, ranching, or forestry 
     operations; the provision of production inputs and services 
     to farmers, ranchers, and foresters; the processing, storing, 
     and transporting of farm, ranch, and forestry commodities; 
     and the sale of land that has been used for agriculture. 
     (Section 1504(b)(3))
       The Senate amendment provides the same as the House 
     measure, except the Senate does not limit the sale of 
     equipment to those other than dealers and does not include 
     the provision regarding equipment subject to depreciation; 
     includes income from water or hunting rights; includes 
     packing in processing and shedding in storage; and includes 
     payment or other income attributable to benefits received 
     under any Title I or Title II program. (Section 1704(c))
       The Conference amendment adopts the Senate provision with 
     an amendment to clarify and expand upon the items included in 
     the Senate amendment. Newly specified categories of farm 
     income include the feeding, rearing or finishing of livestock 
     and payments received under the noninsured assistance program 
     (NAP), and under the Federal Crop Insurance Act. Income 
     received from the sale of farm equipment or production inputs 
     or services to farmers can be considered farm income if two-
     thirds of a person's or legal entity's average adjusted gross 
     income comes from the other sources of farm income. (Section 
     1604)
       The Managers intend for the Secretary to create a method 
     for determining a person's average adjusted gross farm income 
     by including all income reported on IRS Schedule F (or other 
     schedule for reporting farm or farm-related income), farming, 
     ranching, or forestry related income specifically listed in 
     the statute, and other income as determined by the Secretary 
     to be income related to farming, ranching, or forestry 
     activities. The items described in section 1001D(c) to be 
     included in average adjusted gross farm income are intended 
     to be illustrative and by no means an exclusive list. The 
     Managers expect the Secretary to interpret, implement, and 
     expand the sources of income derived from farming, ranching, 
     or forestry to include the income or benefits from farming 
     and farm-related activities and other activities that the 
     Secretary determines are derived directly or indirectly from 
     farm or farm-related activities. Many of these activities may 
     be in addition to those items reported on IRS Schedule F, 
     Form 4853 (farm rental income), farm partnership returns, or 
     other schedules or forms. As farming practices, farming 
     enterprises, and farm-related activities continue to evolve 
     and modernize, the Managers intend that the Secretary will 
     expand the sources of income derived from farming, ranching, 
     or forestry for these purposes to reflect these developments.
     (37) Adjustments of loans
       The House bill amends section 162 of the 1996 farm bill by 
     inserting ``except for cotton and long grain, medium grain, 
     and short grain rice'' after ``commodity''; extending the 
     provisions; and adding provisions for cotton and rice.

[[Page H3587]]

       The House bill authorizes the Secretary to make adjustments 
     in the loan rate for cotton for differences in quality 
     factors, and requires the Secretary to revise the marketing 
     assistance loan program for cotton to better reflect market 
     values for cotton. The House bill requires revisions, 
     including: Eliminating or revising warehouse location 
     differentials to reflect market conditions; changing the way 
     premiums and discounts are calculated by using a 3-year 
     weighted moving average of spot market data, weighted by each 
     region's share of production; eliminating gaps between 
     premium and discount differentials based on certain fiber 
     lengths; and further capping premiums based on leaf and color 
     considerations.
       The House bill provides for discretionary revisions in--
     adjusting the loan rates schedule using non-spot market price 
     data in addition to spot market data for cotton; and 
     eliminating gaps between premium and discount differentials 
     based on certain longer fiber lengths.
       The House bill encourages USDA consultation with the 
     private cotton industry when making the mandatory and 
     discretionary adjustments.
       The House bill amends section 162(e) of the 1996 farm bill 
     to provide that ``with respect to long grain rice and medium 
     and short grain rice, the Secretary shall not make 
     adjustments in the loan rates for such commodities, except 
     for differences in grade and quality (including milling 
     yields)''.
       The House bill provides the same as section 162(c) of the 
     1996 farm bill, which allows the Secretary to establish 
     county loan rates in a manner that results in the lowest loan 
     rate being 95% of the national average loan rate, if those 
     loan rates do not result in an increase in outlays. 
     Prohibits any adjustment resulting in an increase in the 
     national average loan rate for any year.
       The House bill provides the same as section 162 of the 1996 
     farm bill. (Section 1505)
       The Senate amendment provides for adjustments in loan rates 
     for loan commodities other than cotton for differences in 
     grade, type, location, and other factors. (Section 1210(a))
       Subsection (b) of the Senate amendment provides the same as 
     current law. (Section 1210(b))
       Subsection (d) of the Senate amendment provides the same as 
     the House measure, except with respect to mandatory 
     revisions, the Senate amendment eliminates warehouse location 
     differentials.
       With respect to discretionary revisions, the Senate 
     amendment provides the same as the House measure.
       With respect to consultation, the Senate amendment provides 
     the same as the House provision, except that it requires 
     consultation with the private cotton industry. (Section 
     1210(d))
       With respect to rice, the Senate amendment prohibits the 
     Secretary from making adjustments in the loan rates for long 
     grain rice and medium grain rice, except for differences in 
     grade and quality (including milling yields). (Section 
     1210(f))
       Subsection (c) of the Senate amendment provides the same as 
     current law. (Section 1210(c))
       The Senate amendment provides the same as current law 
     specifically for peanuts. (Section 1308)
       The Conference substitute adopts the Senate provision with 
     an amendment to simplify language related to the requirement 
     to consult with the cotton industry. (Section 1210)
     (38) Personal liability of producers for deficiencies
       The House bill provides the same as current law. (Section 
     1506)
       The Senate amendment provides the same as current law. 
     (Section 1709)
       The Conference substitute adopts the Senate provision. 
     (Section 1606)
     (39) Extension of existing administrative authority regarding 
         loans
       The House bill provides the same as current law. (Section 
     1507)
       The Senate amendment provides the same as current law. 
     (Section 1710).
       The Conference adopts the Senate provision with an 
     amendment. (Section 1607)
     (40) Assignment of payments
       The House bill provides the same as current law. (Section 
     1508)
       The Senate amendment provides the same as current law. 
     (Section 1711)
       The Conference substitute adopts the House provision with 
     an amendment. (Section 1608)
     (41) Tracking of benefits
       The House bill requires the Secretary to track the benefits 
     provided under titles I and II directly or indirectly to 
     individuals and entities. (Section 1509)
       The Senate amendment contains no comparable provision.
       The Conference substitute adopts the House provision with 
     an amendment to give the Secretary discretionary authority to 
     track benefits. (Section 1609)
     (42) Upland cotton storage payments
       The House bill ends the practice of paying for upland 
     cotton storage, handling and other costs associated with 
     cotton going into the loan starting with the 2011 crop. 
     (Section 1510)
       The Senate amendment requires payment of cotton storage 
     costs in the same manner and at the same rates as the 
     Secretary provided for the 2006 crop of cotton effective for 
     the 2008-2012 crop years. (Section 1204(h))
       The Conference substitute adopts the Senate provision with 
     an amendment to limit the payments to a percentage of the 
     actual storage rates. (Section 1204(g))
     (43) Government publication of cotton price forecasts
       The House bill strikes the current prohibition on the 
     publication of cotton price forecasts. (Section 1511)
       The Senate amendment provides the same as the House 
     measure. (Section 1714)
       The Conference substitute adopts the Senate provision. 
     (Section 1610)
     (44) Prevention of deceased persons receiving payments under 
         farm commodity programs
       The House bill requires the Secretary to submit a report to 
     Congress which identifies any estate of a deceased person 
     that received payments under this title for more than two 
     crop years following the death of the person. The Secretary 
     is required to promulgate regulations specifying deadlines by 
     which a legal entity that receives payments or other benefits 
     under this title must notify the Secretary of any change in 
     ownership of the entity, including the death of a person with 
     direct ownership interest. Any entity that fails to comply 
     may be denied such payments or benefits. The Secretary is 
     required to recoup erroneous payments made on behalf of a 
     deceased person, and to withhold payments that otherwise 
     would be made to farming operations in which the deceased 
     person was actively engaged until the funds have been 
     recouped. The Secretary is required to biannually reconcile 
     individual tax identification numbers with the Internal 
     Revenue Service for recipients of payments under this title 
     to determine recipients? living status. (Section 1512)
       The Senate amendment prohibits the Secretary from providing 
     any agricultural payment under this Act or Act amended by 
     this Act to any deceased individual or estate of such 
     individual after 2 program years after the date of death of 
     the individual. The Secretary is required to submit reports 
     to the respective committees on agriculture that describes 
     the number of payments and the aggregate amount of payments 
     to deceased individuals and estates of deceased individuals; 
     and to specify for each such payment, the length of time the 
     estate of the deceased individual has been open. (Section 
     11073)
       The Conference substitute adopts the House provision with 
     an amendment that provides for the Secretary to issue 
     regulations to allow for the settlement of estates and to 
     preclude payments on behalf of deceased individuals that were 
     not eligible for payment. The Secretary is directed to 
     reconcile Social Security numbers of program participants 
     with the Social Security Administration at least twice 
     annually. (Section 1611)
     (45) Hard White Wheat Development Program
       The Senate amendment creates a program to compensate 
     producers of hard white wheat. It establishes acreage 
     limitation and payment rates and provides $35 million for the 
     period of fiscal years 2008-2012. (Section 1706)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to make the program subject to appropriations 
     and to modify the period of effectiveness to fiscal years 
     2009-2012. (Section 1612)
     (46) Durum Wheat Quality Program
       The Senate amendment authorizes compensation to producers 
     of durum wheat in an amount not to exceed 50% of the actual 
     cost of fungicides applied to a crop of durum wheat of the 
     producers to control wheat scab. It provides $10 million for 
     each of fiscal years 2008 through 2012 subject to 
     appropriations. (Section 1707)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to modify the period of effectiveness to fiscal 
     years 2009-2012. (Section 1613)
     (47) Storage facility loans
       The Senate amendment establishes a storage facility loan 
     program to provide funds for producers of grains, oilseeds, 
     pulse crops, hay, renewable biomass, and other storable 
     commodities (other than sugar) to construct or upgrade 
     storage and handling facilities for the commodities. It 
     provides the terms of loans, amounts, and security 
     requirements. (Section 1708)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment. (Section 1614)
     (48) State, county, and area committees
       The Senate amendment provides for producer representation 
     on county or area committees that are combined or 
     consolidated. The provision requires that minority 
     representation of socially disadvantaged farmers and ranchers 
     is maintained. The Senate amendment provides that the 
     producer is eligible to serve only as a member of the county 
     or area committee that the producer elects to administer the 
     farm records of the producer. (Section 1715)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to require the Secretary to develop procedures 
     for the purpose of maintaining representation of socially 
     disadvantaged farmers and ranchers on combined or 
     consolidated committees. (Section 1615)

[[Page H3588]]

     (49) Prohibition on charging certain fees
       The Senate amendment prohibits the Secretary from charging 
     fees or related costs for the collection of commodity 
     assessments. (Section 1716)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 1616)
     (50) Signature authority
       The Senate amendment provides that if the Secretary 
     approves a document containing signatures of program 
     applicants, the Secretary shall not subsequently determine 
     the document is inadequate or invalid because of the lack of 
     authority of any applicant signing the document on behalf of 
     the applicant unless the applicant knowingly and willfully 
     falsified the evidence of signature authority or a signature. 
     (Section 1717)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment ensuring that the Secretary can still seek 
     proper documentation despite the Senate provision and that 
     third party producers who relied upon the prior approval of 
     documents by the Secretary in good faith and substantially 
     complied with farm program requirements are not denied 
     benefits due to erroneous representations of authority. 
     (Section 1617)
       The Managers intend for the Secretary to continue to seek 
     proper affirmation of signature authority from appropriate 
     parties even as this section upholds prior document approval 
     by the Secretary despite inadequate or invalid signature 
     authority.
     (51) Modernization of Farm Service Agency
       The Senate amendment requires the Secretary to modernize 
     the Farm Service Agency information technology and 
     communication systems to ensure timely and efficient program 
     delivery at national, state, and county offices. (Section 
     1718)
       The House bill contains no comparable provision.
       The Conference substitute provides for a report addressing 
     the needs of the Department and a detailed plan to fulfill 
     the Department's needs. (Section 1618)
     (52) Geospatial systems
       The Senate amendment requires the Secretary to ensure that 
     all agencies of the Department of Agriculture consolidate the 
     geospatial systems of the agencies into a single enterprise 
     system that ensures that geospatial data are shareable, 
     portable, and standardized. (Section 1719)
       The House bill contains no comparable provision.
       The Conference substitute provides that the Secretary shall 
     ensure that all geospatial data of the agencies of the 
     Department of Agriculture are portable and standardized. 
     (Section 1619)
     (53) Leasing of office space
       The Senate amendment allows the Secretary to use Commodity 
     Credit Corporation funds to lease space for use by agencies 
     of the Department of Agriculture use provided the space is 
     jointly occupied by the agencies. (Section 1720)
       The House bill contains no comparable provision.
       The Conference substitute provides for a report on the 
     costs and time associated with complying with U.S. General 
     Services Administration (GSA) leasing procedures. (Section 
     1620)
     (53A) Geographically disadvantaged farmers and ranchers
       The Senate amendment establishes a new program to provide 
     geographically disadvantaged farmers and ranchers direct 
     reimbursement payments to cover the cost to transport 
     agricultural commodities or inputs used to produce 
     agricultural commodities. The Secretary may spend up to 
     $15,000,000 per fiscal year from funds appropriated to carry 
     out this program. (Section 6021)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment. (Section 1621)
       The Managers recognize the barriers to competition 
     associated with the high transportation costs incurred by 
     geographically disadvantaged farmers and ranchers. The 
     Managers expect the Secretary to develop, in consultation 
     with the eligible areas, an equitable allocation of the funds 
     for such areas. The Managers also expect the Secretary to 
     consult with eligible areas on administration of the program.
     (53B) Implementation
       The conference substitute provides $50,000,000 to the Farm 
     Service Agency to implement title I. (Section 1622)
     (54) Repeals
       The Senate amendment repeals section 1605 of the 2002 farm 
     bill authorizing a Commission on Application of Payment 
     Limitations; repeals section 1617 of the 2002 farm bill 
     renewing availability of market loss assistance and certain 
     emergency assistance to persons that failed to receive 
     assistance under earlier authorities. (Section 1721)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 1623)

                         TITLE II--CONSERVATION

     (1) Definitions (Section 1201 of 1985 Food Security Act 
         (FSA))
       The Senate amendment adds definitions in the 1985 FSA for 
     ``beginning farmer or rancher'', ``Indian tribe'', ``socially 
     disadvantaged farmer or rancher'', ``nonindustrial private 
     forest land'', and ``technical assistance''. The amendment 
     authorizes the Secretary to employ a reasonable test of net 
     worth or other measure to further qualify a beginning farmer 
     or rancher. (Section 2001 of the Senate amendment)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment that removes the test of net worth for a 
     beginning farmer or rancher. The Conference substitute 
     further adopts the definition of a socially disadvantaged 
     farmer or rancher as defined in Section 2501 of the Food, 
     Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 
     2279) and adds a definition of farm, integrated pest 
     management, person and legal entity, and livestock. The 
     definition of livestock is intended to include alpaca and 
     bison. (Section 2001 of Conference substitute)
     (2) Review of good faith determinations (Section 1212 of FSA)
       The Senate amendment maintains the good faith exemption and 
     provides for a second level review of highly erodible land 
     compliance decisions by the Farm Service Agency State 
     Executive Director with the technical concurrence of the 
     Natural Resources Conservation Service State Conservationist 
     or the Farm Service Agency District Director with the 
     technical concurrence of the Natural Resources Conservation 
     Service Area Conservationist or his or her equivalent. The 
     amendment allows for graduated penalties for compliance 
     violations. (Section 2101 of the Senate amendment)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision. 
     Conservation compliance was created in the 1985 FSA. It 
     requires that individuals who farm highly erodible land to 
     develop and apply a conservation plan or lose eligibility for 
     farm program benefits. It has resulted in reductions in soil 
     erosion but has often been inconsistently applied. Under 
     current law, even a small compliance infraction requires the 
     complete denial of farm program benefits.
       The Conference substitute creates a system of graduated 
     penalties, to be based on the severity of the violation. The 
     amendment also creates a process to ensure that the Farm 
     Service Agency Area Director or the Farm Service Agency State 
     Director will review local compliance decisions. The Natural 
     Resources Conservation Service will be involved to provide 
     concurrence on technical issues.
       The Managers believe this approach resolves a long-standing 
     problem and provides for increased oversight of the violation 
     process. The Managers are aware however, that current market 
     conditions are encouraging commodity production on additional 
     land and also changing cropping patterns. In light of the 
     increase in new crop production, as well as changes in 
     cropping systems, the Managers expect that the Secretary will 
     increase whatever technical assistance, planning, monitoring, 
     investigation, and enforcement activities may prove necessary 
     to ensure that producers receiving farm program benefits 
     continue to meet the applicable conservation compliance 
     requirements. (Section 2002 of Conference substitute)
     (3) Review of good faith determinations (Section 1222 of FSA)
       The Senate amendment maintains the good faith exemption and 
     provides for a second level review of wetland compliance by 
     the Farm Service Agency State Executive Director (with the 
     technical concurrence of the NRCS State Conservationist) or 
     the Farm Service Agency district director (with the technical 
     concurrence of the Natural Resources Conservation Service 
     area conservationist or his/her equivalent). (Section 2201 of 
     the Senate amendment)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision. The 
     Managers intend for this provision to provide for better 
     review and enforcement of wetlands compliance provisions. It 
     requires a second level of review of wetlands violations by 
     the Farm Service Agency with the concurrence of the Natural 
     Resources Conservation Service on technical issues. The 
     Managers intend for the Farm Service Agency to continue 
     its primary role in compliance determinations. (Section 
     2003 of Conference substitute)
     (4) Comprehensive Conservation Enhancement Program (Section 
         1230 of FSA)
       The Senate amendment extends the program through 2012 and 
     adds the Healthy Forests Reserve Program. The Environmental 
     Quality Incentives Program (EQIP) is moved to the 
     Comprehensive Stewardship Incentives Program (CSIP). (Section 
     2341) It exempts land enrolled in the Conservation Reserve 
     Enhancement Program (CREP), land affected by State or local 
     regulations that prohibit water use for agricultural 
     production, and land in the State of Washington where 
     enrollment is essential to Federal or State plans for 
     sustainable wildlife habitat from the 25 percent county 
     acreage cap. (Section 2301 of the Senate amendment)
       The House bill has no comparable provision.
       The Conference substitute does not reauthorize the program. 
     The Healthy Forest Reserve Program is retained in the 
     Forestry Title, and the county acreage cap is addressed in 
     ``Administrative Requirements for

[[Page H3589]]

     Conservation Programs''. (Section 1244 of the FSA). The 
     Conference adopts a provision to exclude CREP acreage and 
     continuous Conservation Reserve Program (CRP) acreage from 
     the 25 percent cap if the county government concurs. This 
     provision is separate and distinct from the existing waiver 
     authority. As such, the Managers do not intend for the 
     Secretary to survey producers, businesses, and other entities 
     as is required by the existing waiver authority to implement 
     this new provision.
       The Managers recognize that a loss of access to water by 
     agricultural producers can significantly impact conservation 
     needs and local economies, and that producers need access to 
     a wide range of conservation programs to help comply with a 
     State or local law, order, or regulation prohibiting water 
     use for agricultural production.
       In making any determination on the applicability of the 25 
     percent county cropland CRP enrollment limitation, the 
     Managers encourage the Secretary to maintain maximum 
     flexibility for the enrollment of acreage in CRP that cannot 
     be used for an agricultural purpose or is precluded from 
     planting as a result of a State or local law, order, or 
     regulation prohibiting water use for agricultural production.
     (5) Conservation Reserve Program (Sections 1231, 1232, 1234, 
         and 1235 of FSA)
       (a) Conservation reserve (Section 1231 of FSA)
       The House bill extends CRP until 2012 and gives the 
     Secretary authority to address issues raised by State, 
     regional, and national conservation initiatives. It amends 
     the land eligibility provision to include land the Secretary 
     determines had been planted for 4 of the 6 years preceding 
     the enactment of the Farm, Nutrition, and Bio-energy Act of 
     2007 (except for land enrolled in CRP as of that date). It 
     maintains the existing maximum enrollment of 39,200,000 
     acres. It strikes specific enumeration of Pennsylvania, 
     Maryland and Virginia, but maintains the Chesapeake Bay 
     Region as a Conservation Priority Area. The House bill also 
     provides that alfalfa grown as part of a rotation practice is 
     a commodity for cropping history criteria in determining 
     whether land is eligible to be enrolled. It extends the Pilot 
     Program for Enrollment of Wetland and Buffer Acreage in CRP 
     to 2012. (Section 2101 of the House bill)
       The Senate amendment extends CRP until 2012 and adds 
     pollinator habitat to the resources to be conserved and 
     improved through the program. The Senate amendment also 
     expands eligible land to include marginal pastureland if 
     native vegetation is grown and the land contributes to the 
     restoration of the long-leaf pine forest or similar rare and 
     declining forest ecosystem. The Senate amendment modifies 
     eligibility of land that would facilitate a net savings in 
     groundwater or surface water to apply only to alfalfa and 
     other forage crops. The section expands eligible land to 
     include land enrolled in the flooded farmland program. The 
     Senate amendment maintains the existing maximum enrollment of 
     39,200,000 acres. The Senate amendment expands the Chesapeake 
     Bay Priority Area to include all parts in the Chesapeake Bay 
     Watershed and adds the Prairie Pothole Region, Grand Lake St. 
     Mary's Watershed, and Eastern Snake Plain Aquifer region as 
     Conservation Priority Areas.
       The Senate amendment expands the lands eligible for the 
     Pilot Program for Enrollment of Wetland and Buffer Acreage to 
     include shallow water areas that were devoted to a commercial 
     pond-raised aquaculture and agricultural drainage water 
     treatment areas that provide nitrogen removal and other 
     wetland functions. The Secretary, in consultation with the 
     State technical committee, shall establish the maximum size 
     of the buffer acreage to be enrolled along with eligible 
     lands, taking into consideration the farming practices used 
     with respect to the cropland that surrounds the wetland or 
     shallow water area. The section increases the maximum wetland 
     size to 40 contiguous acres and makes all acres eligible for 
     payment. (Section 2311 of the Senate amendment)
       The Conference substitute adopts the Senate provision with 
     an amendment. The substitute extends CRP until 2012 and 
     provides the Secretary authority to address issues raised by 
     State, regional, and national conservation initiatives. These 
     ``State, regional and national conservation initiatives'' may 
     include such things as the North American Waterfowl 
     Management Plan, the National Fish Habitat Action Plan, the 
     Greater Sage-Grouse Conservation Strategy, the State 
     Comprehensive Wildlife Conservation Strategies (also referred 
     to as the State Wildlife Action Plans), the Northern Bobwhite 
     Conservation Initiative, and State forest resource 
     strategies. The Managers intend for the Secretary to consider 
     the goals and objectives identified in relevant fish and 
     wildlife conservation initiatives when establishing State and 
     national program priorities, scoring criteria, focus areas, 
     or other special initiatives. The Managers expect the 
     Department to work with conservation partners and State and 
     Federal agencies, to the extent practicable, to complement 
     the goals and objectives of these additional plans through 
     its programs.
       Regarding pollinators, the Managers have placed a provision 
     in ``Administrative Requirements for Conservation Programs'' 
     (Section 1244 of the FSA), which applies to all applicable 
     conservation programs and encourages the Secretary to give 
     priority to applications that provide pollinator habitat.
       The Conference substitute adopts the House provision on 
     land eligibility and updates the provision to include land 
     the Secretary determines has been planted for 4 of the 6 
     years preceding the enactment of the Food, Conservation, and 
     Energy Act of 2008.
       While the Managers agreed to an overall reduction in CRP 
     enrollment to 32,000,000 acres, this should not serve as an 
     indicator of declining or reduced support for CRP. The 
     Managers intend that CRP be implemented at authorized levels, 
     and that the program continue as one of USDA's key 
     conservation programs. USDA shall update rental rates and use 
     incentive payments for continuous CRP practices to make the 
     program competitive with other programs and more economically 
     viable for producers. The Managers support the use of 
     partnership agreements with State wildlife agencies and 
     nongovernmental organizations to assist in program promotion 
     and implementation. Additionally, as general CRP contracts 
     expire, the Managers encourage the enrollment of those acres 
     in the Conservation Stewardship Program (CSP), Grassland 
     Reserve Program (GRP) and the continuous CRP. The Managers 
     expect that the Department will use incentive payments, 
     promotional efforts, and agreements with the third parties 
     mentioned above to ensure that the portions of general signup 
     acreages that can be maintained in the program will be 
     enrolled through continuous CRP.
       The Conference substitute adopts the House language and 
     makes a technical correction to include all States that make 
     up the Chesapeake Bay Region as the Conservation Priority 
     Area.
       The substitute clarifies that alfalfa grown as part of a 
     rotation practice is a commodity for cropping history 
     purposes. The Managers encourage the Secretary to enroll 
     irrigated alfalfa lands into ongoing CREP projects that 
     address water quantity and quality issues. (Section 2101 of 
     Conference substitute)
       (b) Duties of owner and operators (Section 1232 of FSA)
       The House bill maintains current law regarding managed 
     haying and grazing outside of nesting seasons and expands the 
     provision to allow a producer to conduct prescribed grazing 
     for the control of invasive species on CRP lands. It allows 
     for managed grazing and requires the Secretary to reduce the 
     rental payment and require a management plan. It allows 
     dryland crop production and grazing on CREP acres where CREP 
     is initiated to address declining water resources. The 
     Secretary is required to develop a conservation plan, 
     determine eligibility of dryland crop production and grazing 
     for crop insurance, reduce the rental payment, and 
     renegotiate the agreement to allow for dryland crop 
     production and grazing at the request of the State. Such 
     lands shall be considered ``noncropland'' for crop insurance 
     purposes. (Section 2101 of the House bill)
       The Senate amendment adds that approved vegetative cover 
     shall encourage the planting of native species and the 
     restoration of biodiversity. It requires contract holders to 
     actively manage the land throughout the term of the contract 
     and clarifies that managed harvesting and grazing outside of 
     nesting and brood rearing season is permitted if it is part 
     of the conservation plan. The Senate amendment allows 
     prescribed grazing for control of invasive species. The 
     Senate amendment requires that the practices in the 
     conservation plan be compatible with wildlife and wildlife 
     habitat, clearly described and applicable through the 
     duration of the contract, consistent with the Secretary's 
     priorities for local conservation management priorities, and 
     actively managed. (Section 2311 of the Senate amendment)
       The Conference substitute adopts the House provision with 
     an amendment. The substitute allows routine grazing, 
     including prescribed grazing for the control of invasive 
     species, with appropriate restrictions. The Managers expect 
     that routine grazing will be performed in a manner that is 
     consistent with the underlying purposes of the program and 
     conducted under a site-specific vegetation plan that provides 
     for grazing frequency (duration of time throughout the year, 
     when authorized, and the number of years during the life of 
     the CRP contract). The Managers further expect that 
     guidelines for the vegetation plan and grazing use be 
     developed in consultation with the State technical committee.
       The Managers understand that there has been some concern 
     over the current rules related to haying and grazing on CRP 
     land and insufficient flexibility for forage use across 
     varied landscapes while still achieving the purposes of the 
     program. The Managers expect USDA to review rules developed 
     to implement routine grazing and to provide for appropriate 
     flexibility in grazing periods consistent with the 
     conservation goals of the program based on site-specific 
     natural resource conditions.
       The Managers understand that there has been some 
     complication in local areas with restricting access to 
     buffers while gleaning the crop residue in a field. The 
     Managers intend that short-term access to buffers that are 
     adjacent to fields be allowed post-harvest without a 
     reduction in payment. While grazing of the buffer is not 
     intended in this action, the proximity to the field crop 
     residue makes restricting access difficult. Due to the short 
     term nature of this activity (60 days maximum), it should not 
     result in a reduced payment and should be done in accordance

[[Page H3590]]

     with the contract. (Section 2107 of Conference substitute)
       (b) Payments (Section 1234 of FSA)
       The House bill requires the National Agricultural 
     Statistics Service to survey annually the per-acre estimates 
     of county average market dryland and irrigated cash rental 
     rates for all counties with 20,000 acres or more of crop and 
     pastureland. These surveys will be kept on the Department?s 
     website and made available to the public. (Section 2101 of 
     the House bill)
       The Senate amendment contains a similar provision. In 
     accepting new enrollments, the section requires that if land 
     provides equivalent environmental benefit to a competing 
     offer then the Secretary shall, to the maximum extent 
     practicable, accept an offer from an owner or operator who is 
     a local resident. (Section 2311 of the Senate amendment)
       The Conference substitute adopts the Senate provision 
     regarding the NASS survey. In accepting contract offers 
     (Section 1234(c)), the substitute adds a new requirement that 
     the Secretary provide priority to offers from local residents 
     if the offer provides equivalent conservation benefits when 
     compared to other offers. (Section 2110 of Conference 
     substitute)
       (c) Contracts (Section 1235 of FSA)
       The House bill allows the Secretary to modify a CRP 
     contract to facilitate the transition of CRP land from a 
     retiring owner to a beginning, socially disadvantaged, 
     limited resource farmer or rancher in order to return some or 
     all of the land to sustainable grazing or crop production. It 
     allows the beginning, socially disadvantaged, or limited 
     resource farmer or rancher to make land improvements and to 
     begin the organic certification process one year before the 
     CRP contract expires. The House bill: requires the retiring 
     landowner to sell or lease the CRP land to the beginning, 
     socially disadvantaged, or limited resource farmer for 
     production purposes; requires a conservation plan; allows the 
     farmer to enroll in the Conservation Security Program or EQIP 
     upon taking ownership of the land; and provides CRP payments 
     to the retiring owner/operator for an additional two years 
     after the contract terminates. The House bill allows the 
     beginning, socially disadvantaged, or limited resource farmer 
     or rancher purchasing the CRP land to reenroll a partial 
     field that is eligible for continuous sign-up and is part of 
     a conservation plan.
       The House bill requires the Secretary to allow an operator 
     to terminate a contract that has been in effect for 5 years 
     at any time. The section also provides that land enrolled in 
     continuous sign-up is ineligible for early termination. 
     (Section 2101 of the House bill)
       The Senate amendment has no comparable provision to the 
     House language on CRP transition options for beginning, 
     socially disadvantaged, or limited resource farmers. The 
     Senate amendment retains current language on early 
     termination by an owner or operator but expands current law 
     to permit contract termination if the participant is disabled 
     or retired from farming and has endured financial hardship as 
     a result of taxation from rental payments received. (Section 
     2311 of the Senate amendment)
       The Conference substitute adopts the House provision with 
     an amendment regarding the transition of CRP land from a 
     retiring farmer or rancher to a beginning or socially 
     disadvantaged farmer or rancher. In implementing the CRP 
     transition option, the Managers encourage the Department to 
     publicize the availability of the transition option widely, 
     including publicity aimed at CRP landowners who are not 
     extending contracts or re-enrolling in the program and at 
     beginning and socially disadvantaged farmers or ranchers. 
     (Section 2111 of Conference substitute)
     (6) Flooded Farmland Program (Section 1235B of FSA)
       The Senate amendment adds a new flooded farmland program 
     within CRP, which allows for the enrollment of flooded crop 
     and grazing land or land rendered inaccessible because of 
     flooding caused by the natural overflow of a closed basin in 
     the Northern Great Plains region. The section requires that 
     land enrolled must be at least 5 acres in size, flooded, and 
     rendered incapable of production during the preceding three 
     crop years and have no natural outlet. It provides for 
     enrollment through the continuous sign-up process and 
     requires that land enrolled have a consistent history of 
     being used for the production of crops or used as grazing 
     lands.
       The Senate amendment allows enrollment of adjoining land 
     that would enhance the conservation or wildlife value of the 
     tract with reduction in rental payment. During participation 
     in the program, owners are not eligible to participate in or 
     receive federal crop insurance, noninsured crop disaster 
     assistance, or any other federal agricultural crop disaster 
     assistance program benefits for land included in the 
     contract. The section also directs the Secretary to preserve 
     the cropland base, allotment history, and payment yields 
     applicable to the enrolled land and to adjust these values 
     upon contract termination to ensure equitable treatment of 
     the enrolled land relative to comparable land remaining in 
     production in the county. The owner shall take actions as 
     necessary to avoid degrading any wildlife habitat that has 
     developed as a result of the natural overflow on the land 
     covered by the contract. (Section 2312 of the Senate 
     amendment)
       The House bill has no comparable provision.
       The Conference substitute deletes this section and makes 
     modifications to CRP and the Wetlands Reserve Program (WRP) 
     to accomplish the intent of the Senate amendment.
       The pilot program for enrollment of wetland and buffer 
     acreage in CRP is expanded to include land that had been 
     cropped during 3 of 10 crop years prior to 2002 and after 
     1990 and is subject to a natural overflow of a prairie 
     wetland. Wetlands and adjacent buffer areas are enrolled 
     under the continuous sign-up process and are limited to no 
     more than 40 acre tracts. The Managers expect the Secretary 
     to require these enrollments in the CRP wetland pilot program 
     to have ratios of at least two-to-one in upland buffer areas, 
     or greater where practicable, in order to maximize wildlife 
     benefits. Participants must agree to restore wetland 
     hydrology, establish appropriate vegetation, and refrain from 
     commercial use of the land, among other duties during the 
     term of the contract. (Section 2101 of the Conference 
     substitute)
       Eligible land in WRP is expanded to include cropland or 
     grassland that was used for agricultural production prior to 
     flooding from the natural overflow of a closed basin lake or 
     pothole. These wetland areas along with functionally 
     dependent uplands, as practicable, are to be enrolled in 30-
     year easements. In determining the compensation, the 
     Secretary is expected to base the value on the use of the 
     land prior to flooding and the corresponding value of such 
     land in the county where the eligible land is located. The 
     Managers expect that enrolling these permanently and 
     temporarily flooded lands in the program will provide long 
     term benefits for wildlife habitat and water management. To 
     ensure that enrollment opportunity exists for these lands, 
     the Secretary is directed to conduct an annual survey of the 
     demand for enrollment in the Prairie Pothole Region and 
     adjust annual allocation of program funds in these interested 
     States. The Managers intend the allocations made available 
     through this adjustment process to be subject to any annual 
     pooling and reallocation of funds that the Secretary applies 
     to the entire program. (Section 2201 of the Conference 
     substitute)
     (7) Wildlife Habitat Program (Sec 1235C of FSA)
       The Senate amendment creates, for the years 2008 through 
     2012, a Wildlife Habitat Program within the CRP. The program 
     would be available to CRP contract holders who have 
     established softwood pine stands. It provides for agreements 
     that shall have management strategies and practices that 
     benefit wildlife, such as thinning, establishing wildlife 
     food plots, burning, and seeding. Contracts are up to 5-years 
     in term. The Secretary shall encourage cooperative 
     arrangements among program participants, State and local 
     government entities, and nongovernmental organizations to 
     achieve the purposes of the program. The section provides 
     cost-sharing and technical assistance to carry out the 
     program. The program terminates on September 30, 2011. 
     (Section 2313 of the Senate amendment)
       The House bill has no comparable provision.
       The Conference substitute deletes this section and makes 
     modification in CRP to accommodate the intent of the Senate 
     amendment. In providing funding and clarifying the 
     availability of cost-sharing payments related to trees, the 
     Managers encourage the Department to take this opportunity to 
     improve the condition of resources on land enrolled in CRP 
     and planted to trees. The Managers are especially interested 
     in improving wildlife habitat on land in the Southeast in CRP 
     planted to softwood pines. The Managers expect the Department 
     to work with partners to identify areas with the greatest 
     need and potential for improvement. The Managers encourage 
     the use of all appropriate forest-management practices, 
     including thinning and prescribed fire, to achieve the 
     purposes of the program.
     (8) Wetland Reserve Program (Section 1237 of FSA)
       (a) Establishment (Section 1237(a-f) of FSA)
       The House bill authorizes WRP through fiscal year 2012. The 
     section adds wetland creation to the purposes of WRP and 
     authorizes the Secretary to purchase floodplain easements. 
     The section increases the maximum enrollment to 3,605,000 
     acres; provides for an annual enrollment goal of 250,000 
     acres, of which up to 10,000 acres may be enrolled as 
     floodplain easements; and changes the program to operate on 
     fiscal year basis. The section amends eligible lands to 
     include riparian areas and floodplains. Flood plain lands are 
     eligible if the land has been damaged by flooding at least 
     once in the preceding calendar year or has been damaged by 
     flooding at least twice in the past 10 years or if the 
     enrollment of other land within the floodplain would aid in 
     flood storage, flow, or erosion control. (Section 2401(a) and 
     Section 2102(a-c) of the House bill)
       The Senate amendment authorizes WRP through fiscal year 
     2012. The section allows enrollment of 250,000 acres per 
     fiscal year with no enrollments beginning in fiscal year 
     2013. Indian Tribes may enroll land through 30-year 
     contracts, which shall be equivalent in value to a 30-year 
     easement. The section includes riparian areas and riparian 
     and adjacent areas that are linked to other parcels of 
     wetlands protected under a wetlands reserve agreement or 
     similar device. (Section 2321(1-3) of the Senate amendment)

[[Page H3591]]

       The Conference substitute adopts the House language with an 
     amendment. The substitute extends WRP to 2012, adds purposes 
     to the establishment section, caps enrollment at 3,041,200, 
     and focuses the program on private land. The substitute 
     changes the program to a fiscal year basis. Enrollment 
     conditions are modified to allow 30-year Tribal contracts. 
     The substitute stipulates that values of such contracts shall 
     be equivalent to 30-year easements.
       The substitute does not include the expansion of riparian 
     areas. The Managers recognize that riparian areas often 
     provide extremely important habitat for wildlife, and that 
     restored and protected riparian areas also help improve water 
     quality, reduce sedimentation, and help manage floodwaters. 
     Riparian areas are already eligible lands under WRP and may 
     be enrolled either as uplands that are functionally dependent 
     on a wetland or where they link wetlands that are otherwise 
     protected by easements or a similar mechanism. (Section 2201 
     of Conference substitute)
       (b) Easements and Agreements (Section 1237A of FSA)
       The House bill states that compensation for easements shall 
     be based on compensation formulas resulting in the lowest 
     cost: percentage of fair market value according to the USPAP 
     or a percentage of the market value determined by an area-
     wide survey; a geographic cap; or the landowners offer. Non-
     federal funds may be accepted to administer this program. 
     (Section 2102(e) of the House bill)
       The Senate amendment adds a requirement that spraying or 
     mowing is allowed if necessary to meet habitat needs of 
     specific wildlife species. The amendment requires that the 
     Secretary pay the lowest compensation for an easement among 
     several alternative valuation methods. The compensation for 
     easements may be provided to landowners in up to 30 payments 
     of equal or unequal size. The section also adds a Wetlands 
     Reserve Enhancement Program with the authority to enter into 
     unique wetlands reserve agreements that may include 
     compatible uses as reserved rights in the warranty easement 
     deed restriction. (Section 2322(a-c) of the Senate amendment)
       The substitute adopts the House provision with an 
     amendment. It revises the process for determining the value 
     of easements and contracts by requiring the Secretary to 
     provide the lowest amount of compensation based on a 
     comparison of the fair market value of the land (as 
     determined by either an appraisal based on the Uniform 
     Standards for Professional Appraisals or an area-wide market 
     survey), a geographic cap, or an offer made by the landowner.
       The Managers intend for the Department to develop 
     guidelines and provide direction for States regarding the 
     method for determining the value of easements. The Managers 
     do not intend for the Department to require States to use a 
     specific appraisal process, such as the ``Yellow Book'' 
     process or an appraisal rather than a market wide survey or 
     analysis. The Department should grant flexibility to State 
     conservationists who, in consultation with State technical 
     committees, should determine the method that best fits the 
     needs of their State.
       The substitute provides the Secretary authority to accept 
     non-Federal funds to assist in implementing the program but 
     places this new authority in ``Administrative Requirements 
     for Conservation Programs'' (Section 1244 of the FSA) so it 
     applies to all conservation programs.
       The substitute includes authority for a Wetlands Reserve 
     Enhancement Program (WREP). The WREP authority is intended to 
     allow the Secretary to enter into agreements with States 
     similar to what is done under CREP. It is not intended as a 
     way to enroll State-owned lands in the program. It is the 
     intent of the Managers that the Secretary will implement WREP 
     projects in order to provide focused, targeted resource 
     benefits and to leverage federal funds.
       The substitute provides authority for a Reserved Rights 
     Pilot. The Managers intend for the Secretary to explore 
     different warranty easement deeds consistent with the 
     purposes of the program, while allowing a landowner to retain 
     the right to use the land for grazing purposes. The Managers 
     intend that any activities occurring under a reserved right 
     easement be covered by a conservation plan developed and 
     approved by the Secretary.
       The substitute provides that easements with values less 
     than $500,000 be paid out over 1 to 30 years. Easements with 
     values greater than $500,000 are to be paid out over 5 to 30 
     years. The Secretary is granted authority to waive that 
     requirement and make lump sum payments if necessary to carry 
     out the purposes of the program. For land to be eligible for 
     the WRP, the land must have remained under the same ownership 
     for a minimum of 7 years. (Section 2208 of Conference 
     substitute)
       (c) Duties of Secretary (Section 1237C of FSA)
       The House bill adds criteria for the Secretary to use when 
     evaluating easement offers from landowners for wetlands or 
     floodplains. The Secretary may consider the conservation 
     benefits, the cost effectiveness, and whether the landowner 
     or someone else is offering to contribute to the cost of the 
     easement or other interest in the land to leverage Federal 
     funds. In determining the acceptability of easement offers 
     for flood plains, the Secretary may take into consideration 
     the extent to which the purpose of the program would be 
     achieved on the land, whether the land has flooded repeatedly 
     in the past 10 years, whether the easement would contribute 
     to restoration of surrounding lands, and other factors. 
     (Section 2102(f) of the House bill)
       The Senate has no comparable provision.
       The Conference substitute adopts the House language for 
     evaluating wetlands. (Section 2207 of Conference substitute)
       (d) Payments (Section 1237D of FSA)
       The House bill is the same as current law with technical 
     changes. It also changes the paragraph heading ``State 
     wetland and environmental enhancement'' to ``Wetlands Reserve 
     Enhancement''. (Section 2102(g) of the House bill)
       The Senate amendment makes a conforming change to allow 
     payments for 30-year contracts. (Section 2323 of the Senate 
     amendment)
       The Conference substitute adopts the Senate amendment. 
     (Section 2205 of Conference substitute)
     (3) Reports (Section 1237G of FSA)
       The Senate amendment directs the Secretary to evaluate and 
     report to Congress on the implications of long-term easements 
     on Department of Agriculture resources by January 1, 2010. 
     (Section 2322(d))
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision. The 
     Managers are concerned with the long-term implications of 
     managing and monitoring wetland easements. The substitute 
     requires the Secretary to provide a report on the number and 
     location of conservation easements acquired under the WRP and 
     an assessment of the extent to which the oversight of 
     conservation easement agreements impacts the availability of 
     USDA resources, including technical assistance. (Section 2210 
     of Conference substitute)
     (9) Comprehensive Stewardship Incentives Program
       The Senate amendment creates a new CSIP to coordinate the 
     two primary working lands programs: EQIP and the Conservation 
     Stewardship Program (CSP). The section defines resources of 
     concern and requires the Secretary to manage EQIP and CSP in 
     a coordinated manner. The Secretary shall ensure that 
     resources of concern are identified at the State level and 
     shall identify not more than 5 resources of concern within a 
     watershed or region within a State. The section directs the 
     Secretary to issue regulations to implement the CSIP, CSP, 
     and EQIP no later than 180 days after the date of enactment 
     of the 2007 Farm bill. (Section 2341 of the Senate amendment)
       The House bill has no comparable provision.
       The Conference substitute does not include CSIP. The 
     substitute includes a provision in ``Administrative 
     Requirements for Conservation Programs'' (Section 1244 of the 
     FSA) that requires the Secretary to ensure that there is a 
     streamlined application process for all conservation 
     programs.
     (10) Conservation Security Program
       (a) Conservation Security Program (Section 1238 FSA)
       The House bill states that no new contracts may be entered 
     into under the Conservation Security Program after October 1, 
     2007. However, payments and modifications to existing 
     contracts may be continued to be made until those contracts 
     expire. (Section 2103(b) of the House bill)
       The Senate amendment reauthorizes the Conservation Security 
     Program for existing contracts only. The section provides 
     $2,317,000,000 for current contracts to remain available 
     until expended and prohibits new contracts or renewals after 
     enactment of the Farm Bill. (Section 2391 of the Senate 
     amendment)
       The Conference substitute adopts the Senate provision and 
     provides such sums as necessary to carry out existing 
     contracts.
       (a) Definitions
       The House bill defines conservation plan, conservation 
     practice, management intensity, nondegradation standard, 
     priority resource of concern, resource specific index, and 
     socially disadvantaged farmer or rancher. (Section 2103(a) of 
     the House bill)
       The Senate amendment defines comprehensive conservation 
     plan, stewardship contract, contract offer, enhancement 
     payment, eligible land, livestock, management intensity, 
     payment, practice, producer, program, resource conserving 
     crop, resource conserving crop rotation, stewardship 
     contract, and stewardship threshold. (Section 2391 of the 
     Senate amendment)
       The Conference substitute renames the program as the 
     Conservation Stewardship Program (CSP) and defines 
     conservation activities, conservation measurement tools, 
     conservation stewardship plan, priority resource concern, 
     resource concern, and stewardship threshold. (Section 1238D 
     of the Conference substitute)
       The Managers recognize that agricultural drainage systems 
     are valuable conservation practices that can be carried out 
     under the CSP and, in particular, that the installation of 
     drainage management systems can provide benefits to water 
     quality by reducing nitrogen loading from subsurface drainage 
     as well as managing wildlife habitat. Thus, these practices 
     are included as conservation activities.
       The Conference substitute includes planning needed to 
     address a resource concern as a conservation activity. Since 
     CSP is intended to address multiple resource concerns

[[Page H3592]]

     in a coordinated manner, the Managers encourage the Secretary 
     to implement the program in a manner that encourages 
     comprehensive conservation planning through technical and 
     financial assistance under this program. The Managers 
     encourage the Secretary to use site-specific conservation 
     planning as outlined in the National Planning Procedures 
     Handbook and implement the program in a manner that 
     encourages comprehensive conservation planning on all 
     applicable resources through technical and financial 
     assistance under the program.
       The Managers are aware of the effort made by NRCS to 
     develop resource-specific indices for implementing CSP and 
     other conservation assistance programs and encourage this 
     development. Where such indices are not available or 
     practical, the Managers urge the Secretary to use substitute 
     tools that measure the degree, scope, and range of 
     conservation activities adopted by a producer to improve and 
     sustain the condition of a resource.
       The term stewardship threshold refers to the level of 
     conservation and environmental management required to improve 
     and conserve a resource. The Managers intend the Secretary to 
     set the threshold at a level that ensures substantial and 
     lasting conservation benefits.
       (b) Conservation Security Program/Conservation Stewardship 
           Program and duties of the producer
       The House bill states that a new Conservation Security 
     Program shall go into effect for fiscal years 2012 through 
     2017, and that the purpose of the Conservation Security 
     Program is to assist producers in improving environmental 
     quality by addressing priority resources of concern. To be 
     eligible, a producer must already be addressing at least one 
     priority resource of concern to the minimum level of 
     management intensity and have an approved conservation offer. 
     Eligible land includes private agricultural land, forest 
     land, and land owned by Tribes. (Section 2103 of the House 
     bill)
       The Senate amendment identifies the purposes of the program 
     as promoting agricultural production and environmental 
     quality as compatible goals and to optimize environmental 
     benefits by assisting producers to promote natural resource 
     conservation. To be eligible, a producer must address 
     priority resources of concern relating to both soil and water 
     to at least the stewardship threshold, adequately address 
     other resources of concern applicable to the operation, and 
     meet or exceed the stewardship threshold for at least 1 
     additional priority resource of concern by the end of the 
     contract.
       The Senate amendment clarifies that eligible land includes 
     cropland, pasture land, rangeland, other agricultural land 
     used for the production of livestock, land used for 
     agroforestry, land used for aquaculture, riparian areas 
     adjacent to eligible land, Tribal lands, public land (if 
     failure to enroll would defeat the purposes of the program), 
     and State and school owned land. The Senate amendment states 
     that all acres of all agricultural operations within a 
     watershed or region that constitute a cohesive management 
     unit shall be covered by the contract.
       The Senate amendment includes provisions on contract 
     offers, contract renewal, contract termination, and optimal 
     crop rotations. (Section 2391 of the Senate amendment)
       The Conference substitute establishes the program purpose 
     of encouraging producers to address resource concerns in a 
     comprehensive manner by installing and adopting new 
     conservation activities, and by improving, maintaining and 
     managing conservation activities in place at the operation. 
     The Managers encourage the Secretary to place emphasis on 
     improving and adding conservation activities.
       The Conference substitute allows nonindustrial private 
     forest land to be eligible with the limitation that not more 
     than 10 percent of annual acres made available under the 
     program can be forest land.
       Under the program, land used for cropland that had not been 
     planted, considered to be planted, or devoted to crop 
     production for 4 of the 6 years prior to the date of 
     enactment of this act shall not be the basis of any payment 
     under the program, unless the reason the land did not meet 
     the requirement is that: it had previously been enrolled in 
     CRP; had been maintained in a long term crop rotation; or was 
     incidental land needed for efficient operation, such as an 
     area of a farm or ranch that had been used for structures 
     that had been subsequently removed. The exceptions only apply 
     if they were the direct cause of the producer's inability to 
     meet the 4-of-6 year requirement.
       The Managers want to clarify that the ``additional 
     criteria'' authority provided in Section 1238F(b)(3) may not 
     supersede or be more heavily weighted than the five required 
     evaluation criteria in section 1238F(b)(1). Instead, the 
     additional criteria may provide extra ranking points to help 
     address specific priorities. Contracts shall permit all 
     economic uses of the land that maintain the agricultural 
     nature of the land and are consistent with the conservation 
     purposes of the program. The Managers intend for this to 
     apply to conservation buffers or any other partial field 
     conservation practice that may be included in the contract.
       A producer may renew a CSP contract for an additional five-
     year period, provided the terms of the existing contract have 
     been achieved to the satisfaction of the Secretary and the 
     producer agrees to adopt new conservation activities. The 
     Secretary is provided authority to require new conservation 
     activities as part of the contract renewal process. It is the 
     intent of the Managers that this could include expanding the 
     degree, scope, and comprehensiveness of conservation 
     activities adopted by a producer to address the original 
     priority resource concerns or addressing one or more 
     additional priority resource concerns.
       The Secretary may allow for contract modification if the 
     Secretary determines that a modification is consistent with 
     achieving the purposes of the program. Modifications 
     envisioned by the Managers include instances in which a 
     producer enrolls a portion of the farm in a land retirement 
     or easement program, gains or loses a lease, or has a change 
     in production due to market or weather conditions. The 
     Managers also intend for the Secretary to issue guidance for 
     cases in which a producer has a change in production that 
     requires a change to scheduled conservation practices and 
     activities. The Managers expect the Secretary to approve the 
     contract modification only as long as net conservation 
     benefits will be maintained or improved as a result.
       Supplemental payments are authorized for producers who 
     adopt a beneficial crop rotation. The Managers intend for the 
     supplemental payment to encourage producers to adopt new, 
     additional beneficial crop rotations that provide significant 
     conservation benefits. The payments are to be available to 
     producers across the country and should not be limited to a 
     particular crop, cropping system, or region of the country. 
     In the Southeast, peanuts are an example of a crop that 
     responds well to increased rotation lengths. Increased 
     rotation lengths help peanut producers conserve water, more 
     effectively control disease, reduce inputs to control disease 
     and increase productivity.
       On-farm conservation research and demonstration activities 
     and pilot-testing projects can be approved as part of 
     contract offers under the program. The Managers expect the 
     Secretary to establish and publicize design protocols and 
     application and contract offer procedures for individual 
     producer and collaborative on-farm research and demonstration 
     activities and for pilot testing projects so producers have a 
     clear understanding of how to participate in either of these 
     two options.
       The substitute requires the Secretary to provide a 
     transparent means by which producer may initiate organic 
     certification under the National Organic Program while also 
     participating in CSP. The Managers expect the Secretary to 
     coordinate this program and the organic certification process 
     to the maximum extent practicable.
       (c) Duties of the Secretary
       Under the House bill, the Secretary shall identify not more 
     than 5 priority resources of concern for a watershed or area 
     within a State. The House bill states that the payment amount 
     shall be based on a portion of the actual costs, income 
     forgone, and resource specific indices. The payment 
     limitation on the Conservation Security Program is $150,000 
     for the 5-year term of the contract.
       Under the Senate amendment, an acreage allocation is 
     specified, and contracts are limited to $240,000 for all 
     contracts entered into during any 6-year period. The Senate 
     amendment enrolls 13,273,000 acres annually at a national 
     average cost of $19 per acre. (Section 2391 and 2341 of the 
     Senate amendment)
       The conference substitute provides that the allocation of 
     acres to each State shall be based primarily on each State's 
     proportion of eligible acres to the total number of eligible 
     acres in all States. The Secretary shall also consider the 
     extent and magnitude of conservation needs associated with 
     agricultural production in each State, the degree to which 
     implementation of the program is or will be effective in 
     helping producers address those needs and other 
     considerations in order to achieve equitable geographic 
     distribution of funds.
       In carrying out the program on a continuing enrollment 
     basis, a producer can apply at any time during the year for 
     the program, but the application will only be ranked at the 
     time determined by the Secretary. The Managers intend for the 
     program to be available nationwide to all agricultural 
     producers, not only in specific watersheds or geographic 
     regions within a State. The Managers specifically intend that 
     the program not be restricted to particular watershed 
     enrollments.
       The Conference substitute requires the Secretary to 
     undertake outreach activities and provide appropriate 
     technical assistance to specialty crop and organic producers 
     and to ensure they can effectively compete in the program. In 
     providing outreach and technical assistance, the Managers 
     encourage the Secretary to provide appropriate training to 
     field staff to enable them to work with these producers and 
     to utilize cooperative agreements and contracts with 
     nongovernmental organizations with expertise in delivering 
     organic educational and technical assistance to these 
     producers.
       Payments under the program are limited to $200,000 for all 
     contracts entered into by a producer in any 5-year period. 
     This provision requires direct attribution to real persons. 
     The Managers emphasize that direct attribution is a mandatory 
     requirement. The Managers do not intend for the Secretary to 
     pay for no-till or other common practices that have no cost 
     to the producer.
       The Managers encourage the Secretary to conduct outreach to 
     encourage producers

[[Page H3593]]

     who are transitioning land out of the conservation reserve 
     program to protect conservation values by enrolling in CSP. 
     As part of this transition from land retirement to working 
     lands conservation, the Managers urge the Secretary to 
     encourage producers to maintain the land in a grass-based 
     production system with appropriate wildlife protections 
     through CSP or to adopt advanced resource-conserving cropping 
     systems through CSP in tandem with placing conservation 
     buffers and other appropriate partial field conservation 
     practices, farmed wetlands, or special wildlife habitat 
     practices in the continuous CRP. (Section 2301 of Conference 
     substitute)
     (11) Grassland Reserve Program (Section 1238N-1238Q of FSA)
       (a) Establishment and purpose (Section 1238N)
       The House bill establishes an enrollment goal of 1,340,000 
     acres by 2012. It revises the enrollment process to be based 
     on acreage rather than funding and requires that at least 60 
     percent of program acreage be in long term easements and 
     agreements. It adds a priority for enrolling CRP acres, 
     except that no more than 10 percent of the acreage enrolled 
     in any year maybe from CRP; and prohibits duplicate payments 
     for such land enrolled in GRP. It establishes that the method 
     for determining the fair market value of enrolled land will 
     be an appraisal, a market survey, a geographic cap, or the 
     landowner offer; whichever results in the lowest amount of 
     compensation to be paid. It authorizes the Secretary to enter 
     into agreements with States and their subdivisions to advance 
     the purposes of the program through a grassland reserve 
     enhancement option. (Section 2104 of the House bill)
       The Senate amendment eliminates short-term rental 
     agreements and the requirement for enrollment of at least 40 
     contiguous acres. It provides for enrollment of land through 
     30-year contracts and easements and permanent easements. The 
     30-year contract option is included to encourage tribal 
     participation in the program. A new authority is added for 
     the Secretary to enter into cooperative agreements with 
     eligible entities for the purpose of purchasing, holding, 
     monitoring, and enforcing easements. The Senate amendment 
     adds a definition of eligible entity, expands eligible land 
     to include land that contains historical or archeological 
     resources or would further goals of certain fish and wildlife 
     plans or initiatives, and specifies that easements of the 
     maximum duration by State law are equivalent to permanent 
     easements. (Section 2381 of the Senate amendment)
       The Conference substitute adopts an acreage enrollment goal 
     of an additional 1,220,000 acres by 2012. The Conference 
     substitute includes 10-, 15-, and 20-year rental contracts 
     and permanent easements. Easements of the maximum duration 
     allowed by State law are considered as permanent easements. 
     The Managers expect that the 20-year rental contracts will be 
     used to encourage tribal group participation in the program.
       The Conference substitute strikes the House priority for 60 
     percent of acreage in long term contracts and retains current 
     law that 60 percent of the funds would be dedicated to 
     easements, while 40 percent of the funds would be dedicated 
     to short term contracts. In addition, the Conference 
     substitute adopts a priority for enrollment of CRP land with 
     a modification to clarify that the priority applies upon 
     expiration of the CRP contract.
       The Conference substitute adopts the Senate additions to 
     eligible land with technical corrections. It does not include 
     a Grassland Reserve Enhancement provision. It adopts the 
     Senate definition of eligible entity and authority for the 
     Secretary to enter cooperative agreements with entities to 
     purchase easements. It also adopts the House bill provision 
     in regard to the method for determining fair market value 
     with a technical correction.
       (b) Requirements relating to easements and contracts 
           (Section 1238O)
       The Senate amendment modifies terms and conditions of 
     easements and agreements to permit fire presuppression and 
     addition of grazing-related activities, such as fencing and 
     livestock watering. Criteria for evaluating applications for 
     enrollment are expanded to provide additional flexibility to 
     the Secretary, and in the case of agreements with eligible 
     entities, to provide a priority to applications that include 
     a cash contribution or leverage other resources toward the 
     purchase price of easements.
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate amendment. The 
     Managers expect these additions to encourage improved 
     management of enrolled acreage, particularly where breaking 
     of the soil surface may be required to manage invasive 
     species or improve grazing systems, and to leverage 
     additional resources for the protection of grasslands.
       The Conference substitute adds implementation of a grazing 
     management plan as a new general requirement of landowners 
     enrolling in the program. With the inclusion of a grazing 
     management plan, the Managers emphasize the conservation 
     purpose of the program, but further clarify that once 
     established these plans are modified only by mutual agreement 
     of the involved parties.
     (c) Payments (Section 1238P)
       The Senate amendment strikes rental agreement payments and 
     modifies the rate of compensation for restoration agreements. 
     Permanent easements will be paid at a rate of not less than 
     90 nor more than 100 percent of the eligible restoration 
     costs. Thirty-year easements and contracts will be at the 
     rate of not less than 50 nor more than 75 percent of the 
     eligible restoration costs. The compensation schedule is 
     lengthened to allow for up to 30 annual payments, 
     corresponding to the newly established 30-year contract 
     agreement.
       The House bill has no comparable provision.
       The Conference substitute adopts the cost-share rate for 
     restoration agreements of not more than 50 percent of the 
     costs of carrying out restoration activities.
     (d) Delegation to private organizations (1238Q)
       The House bill expands on the authority of the Secretary to 
     transfer easement titles to private organizations and to also 
     allow entities to own and write easements under this section, 
     subject to periodic inspections by the Secretary.
       The Senate amendment provides authority for the Secretary 
     to enter into cooperative agreements with eligible entities 
     for those entities to purchase, own, enforce, and monitor 
     easements. Terms and conditions of cooperative agreements 
     require entities to demonstrate qualifications, specify 
     parcels to be enrolled, allow substitutions as agreed to by 
     the parties, specify entity reporting on fund use, allow 
     entities to use their own easement instruments, require 
     appraisals using an industry approved method, allow a 
     landowner contribution as a share of the purchase price, and 
     specify a payment schedule. The Secretary shall require 
     easements to contain a contingent right to protect the public 
     investment.
       The Conference substitute adopts the Senate amendment 
     provision for cooperative agreements between the Secretary 
     and eligible entities with a modification to the language 
     specifying that eligible entities shall assume costs of 
     administering and enforcing easements.
       The Conference substitute adopts a requirement for a 
     contingent right of enforcement. In selecting offers from 
     eligible entities for funding, the Managers expect the 
     Secretary to consider the sufficiency of the offer regarding 
     effective monitoring and enforcement, reversionary interest, 
     or other such factors that will affect the long-term 
     integrity of easement being acquired under the program. The 
     Conference establishes that eligible entities shall provide a 
     share of the easement purchase price that is equal to the 
     share provided by the Secretary. (Section 2403 of Conference 
     substitute)
     (12) Environmental Quality Incentives Program
       (a) Purposes (Section 1240 of FSA)
       The House bill adds forest management and organic 
     transition as purposes of the program. It adds forest land 
     and conserving energy to the list of purposes for installing 
     conservation practices. Energy use, organic transition, and 
     forest management are added to the list activities for which 
     the Secretary will assist producers in making cost-effective 
     changes. (Section 2105(a) of the House bill)
       The Senate amendment adds forest management as a purpose of 
     the program and adds forest land conservation and pollinators 
     to the list of purposes for installing conservation 
     practices. Fuels management and forest management are added 
     to the list activities for which the Secretary will assist 
     producers in making cost-effective changes. (Section 2351 of 
     the Senate amendment)
       The Conference substitute adopts the House bill with 
     amendment. Forest management is added to the program purpose, 
     and forest land and energy conservation are added to the 
     resources to benefit from the installation of conservation 
     practices. Fuels management and forest management are added 
     to the list activities for which the Secretary will assist 
     producers in making cost-effective changes. The Managers 
     recognize the significance of the changes made to the program 
     to reflect new needs and concerns. The Managers expect the 
     Secretary to continue to help producers address conservation 
     needs on their land while promoting agricultural production 
     and environmental quality as compatible goals.
       (b) Definitions (Section 1240A)
       The House bill adds definitions for integrated pest 
     management, socially disadvantaged farmer or rancher, and 
     adds alpaca and bison to the definition of livestock. It also 
     adds forest management and silviculture to land management 
     practices for purposes of the program.
       The Senate amendment adds a definition of producer that 
     includes custom feeders and contract growers. It modifies 
     eligible land to include private nonindustrial forest land 
     and lands used for pond-raised aquaculture production. The 
     amendment adds forest and fuels management and conservation 
     planning to practices for purposes of the program.
       The Conference substitute adopts the Senate amendment with 
     an amendment to modify eligible land. The Managers intend for 
     the Department to continue to provide assistance to custom 
     feeders and contract growers through this program.
       (c) Establishment (Section 1240B)
       The House bill adds organic certification as a practice 
     eligible for cost share payments; amends the exception to 
     establish a 90-percent cost-share rate for beginning and 
     socially disadvantaged farmers or ranchers and provides 90-
     percent cost-share for use of

[[Page H3594]]

     gasifier technology. It allows for the use of an approved 
     third party for technical assistance. Energy efficient 
     improvements and renewable energy systems are added to 
     practices eligible for incentive payments. Promotion of 
     pollinator habitat is added to the Special Rule for 
     determining incentive payment rates. The Secretary is 
     directed to reserve for 90 days not less than 5 percent of 
     program financial assistance for each of beginning farmers or 
     ranchers and socially disadvantaged farmers or ranchers. It 
     makes market agencies and custom feeding businesses eligible 
     for technical and financial assistance. (Section 2105(c) 
     through (h) of the House bill)
       The Senate amendment adds conservation plans to practices 
     eligible for incentive payments, reduces the maximum contract 
     term to 5 years, and strikes the provision on bidding down. 
     The cost-share rate exception for beginning and socially 
     disadvantaged farmers or ranchers is amended to allow 
     variable payment, not to exceed 90 percent, and authority to 
     provide advance payments up to 30 percent for the purchase of 
     materials or contracting. A guaranteed loan eligibility 
     provision is included for eligible applicants that are not 
     accepted into the program. Predator deterrence practices are 
     added to the Special Rule for determining incentive payment 
     rates. The Senate amendment authorizes assistance for water 
     conservation and irrigation efficiency practices, air quality 
     improvement practices and establishes a minimum eligibility 
     requirement for program participation. (Section 2353 of the 
     Senate amendment)
       The Conference substitute extends the program through 2012 
     and maintains the 60 percent livestock funding allocation 
     through 2012. It deletes the Senate provision on contract 
     terms (1240B(b)(2)(B)) and bidding down (1240B(c)).
       The Conference substitute does not include the Senate 
     provision on the Special Rule (1240B(e)(2)). The Managers 
     recognize that proactive, non-lethal options to deter 
     predators protected by the Endangered Species Act of 1973, as 
     well as delisted populations of gray wolves, grizzly bears, 
     and black bears, are consistent with the purposes of EQIP.
       The Conference substitute deletes the House provision on 
     cost-share for gasifier technology. The Managers recognize 
     the merits of new technologies, including gasification, as a 
     means of safely disposing animal carcasses, thereby 
     minimizing environmental impacts and threat of disease. As 
     such, the Managers encourage the Secretary to consider EQIP 
     applications involving poultry gasification and offer cost-
     share assistance of up to 75 percent.
       The Conference substitute adopts the Senate provision for 
     advance payments for beginning, socially disadvantaged and 
     limited resource farmers or ranchers and deletes the Senate 
     provision for guaranteed loan eligibility. The Conference 
     substitute adopts the Senate provision with an amendment for 
     cost-share rates and advance payments for beginning, socially 
     disadvantaged, and limited resource farmers or ranchers.
       The Managers expect EQIP to be available to organic 
     producers for conservation activities related to organic 
     transition and production. The Managers expect EQIP to be 
     available to producers who are transitioning their operations 
     to certified organic production and organic producers who may 
     be transitioning additional acres or animal herds. The 
     Managers are aware that organic conversion is a management-
     intensive activity and therefore encourage the Secretary to 
     provide levels of technical and educational assistance for 
     organic conversion commensurate to the need.
       (d) Evaluation of offers (Section 1240C)
       The House bill adds criteria to prioritize applications 
     more completely and to evaluate applications in logical 
     groupings relative to similar crop, livestock, or operation 
     types. The Secretary is directed to ensure that the 
     evaluation process is streamlined for applicants that have an 
     environmental management system in place or seek to complete 
     an existing system. (Section 2105(i) of the House bill)
       The Senate amendment adds a priority for applications that 
     propose to improve existing practices or to complete a 
     conservation system. (Section 2354 of the Senate amendment)
       The Conference substitute adopts the House bill with an 
     amendment on priority for applications. The Managers intend 
     this evaluation process to prioritize State, regional, or 
     local resource concerns, as well as allow for the grouping of 
     applications of similar agriculture operations to allow for 
     more equitable consideration.
       (e) Duties of producers (Section 1240D)
       The House bill and Senate amendment modify the duties of 
     producers to prohibit owners of enrolled forest land from 
     conducting practices that may defeat the program purposes. 
     (Section 2105(j) of the House bill and Section 2355 of the 
     Senate amendment)
       The Conference substitute adopts the House bill provision.
       (f) Environmental Quality Incentives Program plan (Section 
           1240E)
       The House bill adds a forest provision to allow a forest 
     management plan, forest stewardship plan, or similar plan to 
     serve as a plan of operations. The House bill authorizes the 
     Secretary to consider a permit required under a regulatory 
     program to serve as a plan of operations in order to avoid 
     duplication in planning. (Section 2105(k) of the House bill)
       The Senate amendment allows a producer organization to act 
     on behalf of its membership in submitting applications or 
     conducting similar activities to facilitate program 
     participation. The Senate amendment includes a provision for 
     forest plans similar to the House bill. (Section 2356 of the 
     Senate amendment)
       The Senate amendment establishes a Chesapeake Bay Watershed 
     Conservation Program under EQIP to assist producers in 
     applying conservation practices on agricultural and 
     nonindustrial private forestland in the Bay watershed to 
     address natural resource concerns related to agriculture. 
     (Section 2361 of the Senate amendment)
       The Conference substitute adopts the House provision 
     regarding forest land.
       The Conference substitute strikes the Senate amendment 
     provision on producer organizations. The Managers intend for 
     the Secretary to allow producer associations and farmer 
     cooperatives to act on behalf of their members in submitting 
     applications, plans, or other program materials for their 
     members to participate in this program. The Managers expect 
     the Secretary to clarify this option in any rule or procedure 
     related to this program.
       The Conference substitute adopts a modification to the 
     House bill provision to consider a permit required under a 
     regulatory program to serve as a plan of operations. The 
     Managers intend this addition to reduce duplication in 
     planning but expect that the plan developed for a regulatory 
     permit should contain the elements equivalent to those 
     required in a Plan of Operations, including practices to be 
     implemented, objectives of the plan, and any relevant terms 
     and conditions to carry out the plan.
       (g) Duties of the Secretary (Section 1240F)
       The House bill requires the Secretary to provide assistance 
     for a practice intended to conserve water if it will result 
     in a reduction in consumptive water use, saved water remains 
     in the source, and the practice will not result in increased 
     consumptive use on the producer's operation. (Section 2105(l) 
     of the House bill)
       The Senate amendment has no comparable provision.
       The Conference substitute retains current law. The Managers 
     address the intent of the House bill under modifications made 
     in Section 1240B to provide assistance for water conservation 
     or irrigation efficiency improvements.
       (h) Limitation on payments (Section 1240G)
       The House bill moves the limitation on payments to Section 
     2409. (Section 2409(b) of the House bill)
       The Senate amendment includes a provision to require direct 
     attribution of payments. (Section 2357 of the Senate 
     amendment)
       The Conference substitute provides for a payment limit of 
     $300,000 over 6 years. The Secretary is provided with the 
     authority to waive that limit to $450,000 in cases of special 
     environmental significance. Projects of special environmental 
     significance include methane digesters, other innovative 
     technologies, and projects that will result in significant 
     environmental improvement. The Secretary is expected to 
     utilize this waiver to achieve the purposes of the program. 
     (Section 2508 of Conference substitute)
     (12) Conservation Innovation Grants (Section 1240H of FSA)
       The House bill adds forest resource management as an 
     eligible grant activity and adds eligible projects to include 
     those that ensure the efficient and effective transfer of 
     technologies. The House bill provides mandatory funding for a 
     comprehensive conservation planning project in the Chesapeake 
     Bay Watershed, incentive and cost-share payments for air 
     quality concerns, and increased benefits for specialty crop 
     producers.
       The Senate amendment clarifies the purpose of the grants 
     are to develop and transfer innovative conservation 
     technology. The amendment seeks to increase participation by 
     specialty crop producers.
       The Conference substitute adopts the House provisions 
     related to forest resource management and air quality.
       The Conference substitute provides $150,000,000 to help 
     producers address air quality concerns. The Managers expect 
     funds will be used to provide financial assistance to 
     producers for air quality improvements that help them comply 
     with Federal, State, or local air quality requirements 
     associated with agricultural operations. The funds should be 
     used for cost-effective methods in addressing air quality and 
     to reduce emissions and pollutants from operations, including 
     making improvements in mobile or stationary equipment such as 
     engines.
       The Managers believe conservation programs as implemented 
     by USDA should recognize the use of innovative technology 
     such as enhanced efficiency fertilizers. Enhanced efficiency 
     fertilizers, which can protect water quality and reduce 
     greenhouse emissions, include slow and controlled-release 
     fertilizers (absorbed, coated, occluded or reacted) and 
     stabilized nitrogen fertilizers (urease and nitrification 
     inhibitors and nitrogen stabilizers) and are recognized by 
     State regulators of fertilizers. (Section 2509 of Conference 
     substitute)

[[Page H3595]]

     (13) Ground and Surface Water Conservation (Section 1240I of 
         FSA)
       The House bill modifies the purpose of the existing Ground 
     and Surface Water Conservation Program (GSWCP) to allow 
     cooperative agreements between the Secretary, producers, 
     government entities, and Tribes to achieve regional water 
     quality or quantity goals in water quality priority areas. 
     (Section 2106(a) of the House bill)
       The House bill requires the Secretary to invite prospective 
     partners to submit competitive grant proposals for a Regional 
     Water Enhancement Program. Proposals will be competitively 
     awarded based on the inclusion of the most lands and 
     producers; the most activities versus costs; contribution to 
     sustaining or enhancing agricultural production or rural 
     economic development; development of performance measures to 
     measure long term effectiveness; the capture of surface water 
     runoff; the participation of multiple interested persons in 
     improving issues of concern; and the assistance provided to 
     producers to meet regulatory requirements that reduce the 
     economic scope of their operation.
       The House bill provides $60,000,000 to be available for 
     each of fiscal years 2008 through 2012.
       The Senate amendment maintains the existing GSWCP and 
     provides an increase in funding from $60,000,000 to 
     $65,000,000 per year. The provision provides funding for each 
     State that received funding under the program in previous 
     years in an amount that is the simple average of funds 
     provided for fiscal years 2002-2007 or the amount provided in 
     2007, whichever is greater. For States over the Ogallala 
     Aquifer, not less than the greater of $3,000,000 or the 
     average of funds provided for fiscal years 2002-2007 is 
     provided.
       The Conference substitute adopts the House provision with 
     an amendment. The substitute creates the Agricultural Water 
     Enhancement Program (AWEP) and provides an additional 
     $40,000,000 in mandatory funding for the program.
       The purpose of AWEP is to address water quality and water 
     quantity concerns on agricultural land. The Managers expect 
     the Department to balance its resources among the needs of 
     producers in performing water quantity and quality 
     activities. The Managers intend for producers to participate 
     in the program directly or with other producers who have come 
     together with a partner. The Managers intend for the 
     Department to manage the program so that a producer who 
     chooses to participate as an individual has the same 
     opportunities as one who chooses to participate with a 
     partner.
       The purpose of authorizing partners in AWEP is to leverage 
     federal funds and to encourage producers to collectively 
     address specific water quality or quantity concerns. The 
     Managers intend for the program to be delivered according to 
     applicable program rules. Any federal funding must be 
     delivered to producers; no federal funding may be used to 
     cover the administrative expenses of partners.
       The Managers expect the Department to require partners to 
     clearly state their objectives and describe how they intend 
     to leverage federal funds and the water quantity or water 
     quality issues they intend to address. The Managers encourage 
     the Department to require the measurement and quantification 
     of actual resource outcomes as part of AWEP projects.
       The Managers recognize that water quantity conservation is 
     a significant nationwide concern. The Ogallala Aquifer is a 
     critical source of groundwater for agricultural and municipal 
     uses. Due to the scope and significance of the aquifer, there 
     is a need for regional efforts to address groundwater 
     management in the region. The Managers urge the Department to 
     work with States and agricultural producers in the Ogallala 
     region to coordinate Federal assistance with State programs 
     and to encourage cooperation among States in implementing 
     conservation programs and water reduction practices.
       The Managers recognize that water use efficiency projects 
     are an important means to encourage water conservation and 
     expect the Department to continue to support such activities. 
     The Managers intend that additional significance should be 
     placed on water conservation practices that convert irrigated 
     farming to dryland farming to encourage substantial water 
     savings.
       To ensure the effectiveness of proposals that convert 
     irrigated farming to dryland farming, the Managers have 
     included provisions to allow the Department to fund proposals 
     for an extended period of five years. In setting the payment 
     rate, the Secretary should take into account the change in 
     the land value of converting an irrigated farming operation 
     to a dryland farming operation.
       The Managers intend for the Department to make the 
     construction of small, on-farm reservoirs or irrigation ponds 
     eligible for assistance through AWEP in drought-stricken 
     areas. The Managers intend the Department to use the Drought 
     Monitor as a guide to determine the areas eligible. Any area 
     that has received a D4 drought designation for a month-long 
     period during the previous two years should be eligible. The 
     Managers intend the ponds to be no more than 40 acres in 
     size.
       The Managers believe these ponds and related activities 
     will benefit wildlife and demonstrate the potential to 
     capture on-farm surface water runoff in an environmentally 
     beneficial manner. The Managers do not intend for any State 
     water regulation or law to be waived.
       In utilizing the authority to waive the eligibility 
     provisions in Section 1001D, the Managers expect the 
     Secretary to take into account the need to accomplish the 
     purposes of the program by enrolling land that would be 
     ineligible to participate in other conservation programs.
       The Managers intend for the Secretary to give priority to 
     producers in six priority areas: The Eastern Snake Plain 
     Aquifer region, Puget Sound, the Ogallala Aquifer, the 
     Sacramento River watershed, Upper Mississippi River Basin, 
     the Red River of the North Basin, and the Everglades. 
     (Section 2510 of Conference substitute)
     (14) Grassroots Source Water Protection Program (Section 
         1240O of FSA)
       The House bill increases the appropriations authorization 
     from $5,000,000 each fiscal year to $20,000,000 each fiscal 
     year through 2012. The provision provides a one-time infusion 
     of $10,000,000 in mandatory funding to be available until 
     expended. (Section 2107 of the House bill)
       The Senate amendment is similar but does not include the 
     one-time infusion of $10,000,000 in mandatory funding. 
     (Section 2394 of the Senate amendment)
       The Conference substitute adopts the Senate provision. 
     (Section 2603 of Conference substitute)
     (15) Conservation private grazing land (Section 1240M of FSA)
       The House bill (Section 2108) and the Senate amendment 
     (Section 2392) extend the program through 2012.
       The Conference substitute adopts the Senate provision. 
     (Section 2601 of Conference substitute)
     (16) Great Lakes Basin Program for Soil Erosion and Sediment 
         Control (Section 1240P of FSA)
       The House bill extends the program through 2012. (Section 
     2109 of the House bill)
       The Senate amendment extends the program through 2012 and 
     clarifies that the purpose of the program is to assist in 
     implementing the recommendations of the Great Lakes Regional 
     Collaboration Strategy to Restore and Protect the Great 
     Lakes. (Section 2395 of the Senate amendment)
       The Conference substitute adopts the Senate provision with 
     an amendment that includes using the recommendations of the 
     Great Lakes Regional Collaboration Strategy as a basis for 
     soil erosion and sediment control projects. (Section 2604 of 
     Conference substitute)
     (17) Discovery Watershed Demonstration Program (Section 1240Q 
         of FSA)
       The Senate amendment establishes that the Secretary shall 
     carry out a demonstration program in not less than 30 small 
     watersheds in States of the Upper Mississippi River basin to 
     identify and promote the most cost effective and efficient 
     ways of reducing nutrient loss to surface waters from 
     agricultural lands. It allows for the Secretary to establish 
     or identify appropriate partnerships to select the watersheds 
     and to encourage cooperative efforts among the Secretary and 
     State, local, and nongovernmental organizations. The 
     amendment provides criteria for the selection of watersheds 
     and prohibits the use of funds for administrative expenses. 
     (Section 2397 of the Senate amendment)
       The House bill has no comparable provision.
       The Conference substitute adopts the House provision and 
     does not include the program.
       The Managers recognize that the loss of nitrogen and other 
     nutrients from agricultural land impacts water quality in 
     many parts of the nation. This is of particular concern in 
     the States of the Upper Mississippi River basin.
       The Discovery Watershed Demonstration Program was intended 
     to address this loss of nutrients in these States through 
     management projects operating on a watershed scale. The 
     projects were to be based on agriculture-related water 
     quality problems and include widespread participation from 
     local producers in the selected watershed.
       In Section 2707, the substitute provides for the 
     Cooperative Conservation Partnership Initiative (CCPI), which 
     is designed to encourage these types of activities. Given the 
     cooperative nature of the proposed Discovery Watershed 
     program, the Managers encourage the Secretary to consider 
     locally developed projects for funding under CCPI.
     (18) Emergency Landscape Restoration Program (Section 1240R 
         of FSA)
       The Senate amendment replaces the Emergency Conservation 
     Program (ECP) and the Emergency Watershed Program (EWP) with 
     a new Emergency Landscape Restoration Program. The purpose of 
     the Emergency Landscape Restoration Program is to 
     rehabilitate watersheds, nonindustrial private forest lands, 
     and working agricultural lands adversely affected by natural 
     catastrophic events.
       The amendment authorizes such sums as necessary, provides 
     for the temporary administration of ECP and EWP until final 
     regulations are formulated, and repeals ECP and EWP. (Section 
     2398 of the Senate amendment)
       The House bill has no comparable provision.
       The Conference substitute adopts the House provision and 
     does not include the program.

[[Page H3596]]

     (19) Farm and Ranchland Protection Program (Section 1238I of 
         FSA)
       The House bill establishes a certification process for 
     States. It allows grants to be made to certified States based 
     on the demonstrated need for farm and ranch land protection. 
     Up to 10 percent of those funds may be used for the costs of 
     purchasing and enforcing easements. The bill states that the 
     Secretary may also enter into agreements with eligible 
     entities. The terms and conditions of the agreements must be 
     consistent with the purposes of the program, as well as 
     include a requirement consistent with agricultural activities 
     regarding impervious surfaces. It also requires the use of a 
     conservation plan for highly erodible cropland.
       The House bill provides for the Federal Government to 
     retain a Federal contingent right of enforcement or executory 
     limitation in an easement to ensure its enforcement. This 
     right is not considered an acquisition of property.
       The House bill provides cost-share assistance for 
     purchasing an easement, but the assistance may not exceed 50 
     percent of the appraised fair market value of the easement. 
     The fair market value is determined by an appraisal using an 
     industry-approved method. (Section 2110 of the House bill)
       The Senate amendment modifies the definition of eligible 
     forest land to include land that contributes to the economic 
     viability of an operation or serves as a buffer. It also 
     amends the definition to include land that is incidental to 
     other eligible land to ensure efficient administration of the 
     program. The provision requires the Secretary to enter into 
     cooperative agreements with eligible entities as long as the 
     terms and conditions of the cooperative agreement include: 
     entity qualifications, specific projects, substitution of 
     projects, use of funds, flexibility to use unique terms and 
     conditions for easements, impervious surface limitation, 
     appraisal method, and charitable contributions.
       The Senate amendment requires the protection of Federal 
     investment through an executory limitation, but specifies 
     that the executory limitation is not a Federal acquisition of 
     real property and will not trigger any Federal appraisal or 
     other real property requirements.
       The amendment limits the amount the Secretary can share in 
     the costs of purchasing the easement to 50 percent of the 
     appraised fair market value and establishes minimum amounts 
     entities pay based on the amount of landowner contributions. 
     The Senate amendment requires appraisals based on Uniform 
     standards of Professional Appraisal Practice or any other 
     industry-approved standard. (Section 2371 of the Senate 
     amendment)
       The Conference substitute adopts the House provision with 
     amendment.
       The Managers expect the changes to the Farmland Protection 
     Program (FPP) will provide flexibility and certainty to 
     program participants. The substitute makes changes to the 
     administrative requirements, appraisal methodology, and terms 
     and conditions of cooperative agreements which shall make the 
     overall program more user-friendly.
       The substitute clarifies the purpose of the program as 
     protecting land for agricultural use by limiting 
     nonagricultural uses of the land. The substitute adopts the 
     Senate provision to modify the definition of eligible land to 
     include forestland and other land that contributes to the 
     economic viability of an operation.
       The substitute establishes a certification process similar 
     to the House bill for all eligible entities. To become 
     certified, entities must have the authority and resources to 
     enforce easements, policies in place that are consistent with 
     the purposes of the program, and clear procedures to protect 
     the integrity of the program.
       The substitute adopts terms and conditions for cooperative 
     agreements similar to the Senate amendment. The cooperative 
     agreement sets forth the working relationship between the 
     Department and the entity in carrying out the program. The 
     terms and conditions will stipulate the length of the 
     agreement; allow for the substitution of qualified projects; 
     and maintain, at a minimum, that the agreement is consistent 
     with the purpose of the program, provide for adequate 
     enforcement of the easement, and include a limit on 
     impervious surfaces. Once an entity is certified, it may 
     enter into an agreement for a minimum of five years with the 
     Department. Non-certified entities may enter into agreements 
     of not less than 3, but not more than 5 years. In selecting 
     offers from eligible entities for funding, the Managers 
     expect the Secretary to consider the sufficiency of the offer 
     regarding effective monitoring and enforcement, reversionary 
     interest, or other such factors that will affect the long-
     term integrity of easement being acquired under the program.
       The Managers intend any violation of the terms and 
     conditions will result in a penalty to the eligible entity 
     and the agreement will remain in place. It is the expectation 
     that the violation and penalty terms will be outlined in all 
     cooperative agreements between the eligible entity and the 
     Secretary.
       The substitute provides for the Federal Government to 
     retain a Federal contingent right of enforcement in an 
     easement to ensure its enforcement. The Managers do not 
     intend this right to be considered to be an acquisition of 
     real property, but in the event an easement cannot be 
     enforced by the eligible entity the Federal Government shall 
     ensure the easement remains in force. (Section 2401 of 
     Conference substitute)
     (20) Farm Viability Program (Section 1238J of FSA)
       The House bill reauthorizes the program through 2012. 
     (Section 2111 of the House bill)
       The Senate amendment reauthorizes the program through 2012. 
     (Section 2396 of the Senate amendment)
       The Conference substitute adopts the House provision. 
     (Section 2402 of Conference substitute)
     (21) Wildlife Habitat Incentive Program (Section 1240N of 
         FSA)
       The House bill reauthorizes the program through 2012. The 
     bill raises the cost-share limitation for long-term projects 
     from 15 percent to 25 percent. It also increases the cost-
     share rate for long-term agreements and activities that 
     assist producers in meeting a regulatory requirement that 
     impacts the economic scope of their operation from 15 to 25 
     percent. (Section 2111 of the House bill)
       The Senate amendment authorizes the Secretary to make 
     incentive payments and increases the percentage of funds that 
     can be used for projects longer than 15 years from 15 percent 
     to 25 percent. The Senate amendment requires the Secretary to 
     give priority to projects that would further the goals and 
     objectives of State, regional, and national fish and wildlife 
     conservation plans and initiatives. (Section 2393 of the 
     Senate amendment)
       The Conference substitute adopts the House provision with 
     an amendment. The substitute increases the limitation on 
     cost-share payments for long-term projects to 25 percent and 
     focuses the program on agricultural and nonindustrial private 
     forest lands.
       The substitute allows the Secretary to provide priority to 
     projects that address issues raised by State, regional, and 
     national conservation initiatives. These `State, regional and 
     national conservation initiatives' may include such things as 
     the North American Waterfowl Management Plan, the National 
     Fish Habitat Action Plan, the Greater Sage-Grouse 
     Conservation Strategy, the State Comprehensive Wildlife 
     Conservation Strategies (also referred to as the State 
     Wildlife Action Plans), the Northern Bobwhite Conservation 
     Initiative, and State forest resource strategies. The 
     Managers intend for the Secretary to consider the goals and 
     objectives identified in relevant fish and wildlife 
     conservation initiatives when establishing State and national 
     program priorities, scoring criteria, focus areas, or other 
     special initiatives. The Managers expect the Department to 
     work with conservation partners and State and Federal 
     agencies, to the extent practicable, to complement the goals 
     and objectives of these additional plans through USDA 
     programs. (Section 2602 of Conference substitute)
     (22) Agricultural Management Assistance Program (Section 
         524(b)(1) of Federal Crop Insurance Act)
       The House bill adds Virginia and Hawaii as eligible States. 
     It requires that 50 percent of available funds shall be used 
     for construction or improvement of watershed management or 
     irrigation structures, planting trees for windbreaks or 
     improving water quality, and mitigating risk through 
     diversification or various conservation practices; 40 percent 
     may be used for any activity relating to risk management 
     activities, including entering agriculture trade options, 
     futures, or hedging; and 10 percent shall be used for organic 
     certification cost-share assistance. (Section 2201 of the 
     House bill)
       The Senate adds Idaho as a participating State, extends the 
     program through 2012, and provides an additional $10,000,000 
     per year to the program (Section 524(b)(4)(B)(ii)) through 
     2012. (Section 2601 of the Senate amendment)
       The Conference substitute adopts the House provision with 
     an amendment and includes Hawaii as an eligible State. The 
     Conference substitute provides an additional $25,000,000 in 
     mandatory funding for fiscal years 2008 through 2012. 
     (Section 2801 of Conference substitute)
     (23) Resource Conservation and Development Program (Section 
         1528 of Agriculture and Food Act of 1981)
       The House bill clarifies that an area plan must be 
     developed through a locally led process, and that the 
     planning process must be conducted by a local council. It 
     also provides that the Secretary shall designate a 
     coordinator to provide technical assistance to councils. 
     (Section 2202 of the House bill)
       The Senate amendment is comparable to the House. (Section 
     2605 of the Senate amendment)
       The Conference substitute adopts the Senate provision. 
     (Section 2805 of Conference substitute)
     (24) Small watershed rehabilitation (Section 14 of the 
         Watershed Protection and Flood Prevention Act)
       The House bill provides $50,000,000 in mandatory funding 
     for fiscal years 2009 through 2012. It authorizes 
     appropriations for fiscal years 2007 through 2012 at the 
     current funding level of $85,000,000 per year. (Section 2203 
     of the House bill)
       The Senate amendment extends program to 2012 and authorizes 
     appropriations for fiscal years 2008 through 2012 as such 
     sums as necessary. (Section 2604 of the Senate amendment)
       The Conference substitute adopts the House provision and 
     provides $100,000,000 in mandatory funding for fiscal year 
     2009 to remain available until expended. (Section 2803 of 
     Conference substitute)

[[Page H3597]]

     (25) Chesapeake Bay Program for Nutrient Reduction and 
         Sediment Control (Section 1240Q of FSA)
       The House bill creates a new program at the Department to 
     provide financial assistance to producers to minimize excess 
     nutrients and sediments in order to restore, preserve, and 
     protect the Chesapeake Bay. The program directs the Secretary 
     to develop and implement a comprehensive plan to provide for 
     innovative approaches to advance the improvement of water 
     quality and enhance wildlife habitat. Critical projects 
     include those in the Susquehanna, Shenandoah, Potomac and 
     Patuxent River basins. The House bill includes a Sense of 
     Congress that the Department is authorized and should be a 
     member of the Chesapeake Bay Executive Council.
       The Senate bill has no comparable provision.
       The Conference substitute adopts the House provision with 
     amendment.
       The Chesapeake Bay is the nation's largest estuary. In 
     2000, Chesapeake Bay partners agreed to target water quality 
     and habitat restoration as goals to improve the health of the 
     Bay and its living resources. According to current estimates, 
     the Bay will not meet the 2012 agreement without a better 
     coordinated plan and greater targeting of resources.
       Farmers in the Chesapeake Bay region are under some of the 
     most stringent environmental regulations in the country. 
     Despite the desire and demand that exists among farmers in 
     the region to participate in conservation programs, current 
     funding levels and program allocations leave many behind. 
     While the reliance upon conservation programs and the need 
     for funding may not be unique to the Chesapeake, it is 
     nonetheless uniquely critical to the success of the Bay 
     restoration strategy and the ability of farmers to meet 
     regulatory requirements.
       The Managers intend the Chesapeake Bay Watershed Program be 
     carried out on agriculture and forestlands in the Chesapeake 
     Bay through the use of all conservation programs available to 
     producers in the region. It is the expectation this program 
     will be carried out through existing program mechanisms in 
     coordination with other relevant Federal agencies working in 
     the Bay watershed, such as the Chesapeake Bay Program Office.
       The special consideration given to the rivers under this 
     section are areas of critical need to the overall health of 
     the Chesapeake Bay. The Managers intend that the Secretary 
     focus initial program resources in these key basins and build 
     upon successful implementation elsewhere in the Chesapeake 
     Bay Watershed, as appropriate. These funds should be used to 
     install practices to help control erosion and nutrient 
     loading before they reach the Bay, and that assessments will 
     be made using existing models and information to evaluate the 
     most cost-effective strategies for reducing nonpoint source 
     nutrient inputs. This program provides $438,000,000 in 
     mandatory funding for fiscal year 2009 through fiscal year 
     2012. (Section 2605 of Conference substitute)
     (26) Voluntary Public Access and Habitat Incentive Program 
         (Section 1240R [House] or 1240S [Senate] of FSA)
       The House bill establishes a voluntary public access 
     program under which States and Tribes may apply for grants to 
     encourage owners and operators of privately held farm, ranch, 
     and forest land to make that land available for wildlife-
     dependent recreation. The Secretary shall give priority to 
     States and tribal governments that have consistent opening 
     dates for migratory bird hunting for both residents and non-
     residents. The House bill authorizes $20,000,000 in 
     discretionary funding for each of fiscal years 2008 through 
     2012. The program does not preempt a State or tribal 
     government law, including liability law. (Section 2303 of the 
     House bill)
       The Senate amendment is comparable to the House bill. It 
     includes a priority to States where the location of 
     participating lands would be available to the public and 
     provides $20,000,000 per year in mandatory funding for each 
     of fiscal years 2008 through 2012. (Section 2399 of the 
     Senate amendment)
       The Conference substitute adopts the Senate provision with 
     an amendment. The Conference substitute provides $50,000,000 
     in mandatory funds for this program. The Conference 
     substitute includes a 25 percent reduction for the total 
     grant amount if the opening dates for migratory bird hunting 
     in the State are not consistent for residents and non-
     residents. (Section 2606 of Conference substitute)
     (27) Muck soils conservation (Section 2303)
       The House bill establishes a new program under which owners 
     or operators of eligible land shall receive payments to 
     conserve soil, water, and wildlife resources. Eligible land 
     must be comprised of muck soil, be in agricultural 
     production, have a spring cover crop, a winter crop, and 
     year-round ditch banks seeded with grass. Payments are 
     authorized for between $300 and $500 per acre per year. 
     Appropriations are authorized at $50,000,000 for each of 
     fiscal years 2008 through 2012. (Section 2303 of the House 
     bill)
       The Senate amendment has no comparable provision.
       The Conference substitute adopts the Senate provision and 
     the provision is deleted. The Managers recognize the unique 
     soils throughout the Hudson Valley of New York that are 
     classified as muck soils. These soils are former wetlands 
     that have been drained with ditches years ago to allow for 
     crop production. Due to the extensive networking of drainage 
     ditches, normal buffer setback requirements associated with 
     current conservation programs take a large percentage of 
     these highly productive lands out of production. The Managers 
     encourage the Secretary to work through the State 
     Conservationist to address the needs of muck soil farmers in 
     the Hudson Valley, using existing conservation programs to 
     conserve soil, water, and wildlife resources on these lands.
     (28) Funding for programs under the Food Security Act of 1985 
         (Section 1241 of FSA)
       The House bill provides $1,454,000,000 for fiscal years 
     2007 through 2012 and $1,927,000,000 for fiscal years 2007 
     through 2017 for Conservation Security Program contracts 
     entered into before Oct. 1, 2007. Conservation Security 
     Program contracts entered into on or after Oct. 1, 2011, 
     shall be funded in the amount of $5,01,000,000 for fiscal 
     year 2012 and $4,646,000,000 for the period of fiscal years 
     2013 through 2017.
       The Farm and Ranchland Protection Program is funded at 
     $125,000,000 in fiscal year 2008; $150,000,000 in fiscal year 
     2009; $200,000,000 in fiscal year 2010; $240,000,000 in 
     fiscal year 2011; and $280,000,000 in fiscal year 2012.
       EQIP is funded at $1,250,000,000 in fiscal year 2008; 
     $1,600,000,000 in fiscal year 2009; $1,700,000,000 in fiscal 
     year 2010; $1,800,000,000 in fiscal year 2011; and 
     $2,000,000,000 in fiscal year 2012.
       WHIP is authorized at $85,000,000 each of fiscal years 2008 
     through 2012. (Section 2401 of the House bill)
       The Senate amendment funds programs in title XII of the FSA 
     for each of F 2008-2012 as follows:
       Conservation Security Program--$2,317,000,000 for current 
     contracts to remain available until expended;
       Conservation Stewardship Program--13,273,000 acres for each 
     of fiscal years 2008-2012;
       FPP--$97,000,000 for each of fiscal years 2008-2012;
       EQIP--for fiscal years 2008 and 2009: $1,270,000,000; for 
     fiscal years 2010-2012: $1,300,000,000;
       WHIP--Same as House;
       Voluntary Public Access and Habitat Incentives Program--
     $20,000,000 for each of fiscal years 2008-2012; and
       GRP--$240,000,000 for fiscal years 2008-2012.
     (Section 2401 of the Senate amendment)
       The Conference substitute provides the following in 
     additional new budget authority for these programs:
       CSP--$1,100,000,000
       EQIP--$3,393,000,000
       FPP--$773,000,000
     (Section 2701 of Conference substitute)
     (29) Conservation access (Section 1241 of FSA)
       The Senate amendment creates a new Conservation Access 
     program. The provision requires 10 percent of conservation 
     program funds and 10 percent of CRP and WRP acreage enrolled 
     in any year be used to assist beginning and socially 
     disadvantaged farmers and ranchers with annual gross sales of 
     $15,000 or more. Any unused funds are to be re-pooled back to 
     the original program and made available to all persons 
     eligible for assistance.
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment. The Conference substitute provides that 5 
     percent of CSP acres and 5 percent of EQIP funds will be used 
     to assist beginning farmers or ranchers, and an additional 5 
     percent of each to assist socially disadvantaged farmers or 
     ranchers.
       The Managers recognize the importance of providing 
     intensive technical assistance to beginning and socially 
     disadvantaged farmers or ranchers participating in farm bill 
     conservation programs. The Managers encourage the Department 
     to provide rates of technical assistance to beginning and 
     socially disadvantaged farmers or ranchers commensurate with 
     the special needs to ensure high participation levels and 
     substantial and lasting conservation benefits.
       In implementing the conservation access provisions, the 
     Managers encourage the Secretary to develop, implement, and 
     support cooperative agreements with entities, including 
     community-based and nongovernmental organizations and 
     educational institutions that have expertise in comprehensive 
     conservation planning and assistance needs of beginning and 
     socially disadvantaged farmers or ranchers.
       The Managers recognize that off-farm employment is a 
     necessity for most beginning farmers or ranchers, and that 
     transition to a full-time agricultural occupation is a 
     substantial challenge. The Managers also recognize the value 
     that sound conservation can contribute to an enduring 
     agricultural operation and a successful farming or ranching 
     livelihood. The Managers intend for the Secretary to give 
     priority to Conservation Access resources to beginning 
     farmers or ranchers who are, or who are working toward, 
     increasing their participation in the farming or ranching 
     operation. (Section 2704 of Conference substitute)
     (30) Improved provision of technical assistance under 
         conservation programs (Section 1242 of FSA)
       The House bill adds authority for contracting with third 
     party providers to provide technical assistance to program 
     participants, requires that the payment level for third party 
     providers be established based on

[[Page H3598]]

     prevailing market rates where available, and directs the 
     Secretary to consult with producers, extension and others in 
     a review and revision of conservation practice standards to 
     ensure that they are complete and relevant. (Section 2402 of 
     the House bill)
       The Senate amendment adds the purpose of technical 
     assistance, provides authority for contracting with third 
     party providers for technical assistance, and defines 
     entities eligible to receive technical assistance under this 
     title. The Secretary is directed to provide technical 
     assistance to all conservation and Agriculture Management 
     Assistance program participants. Where financial assistance 
     is not required, the Secretary may enter technical services 
     contracts with program participants. (Section 2404 of the 
     Senate amendment)
       The Conference substitute adopts the Senate amendment with 
     modifications. The Conference substitute reflects the 
     Managers' two priorities for improving the delivery of 
     technical assistance: 1) Increasing the availability of 
     technical assistance, and 2) ensuring that conservation 
     technical standards and resources are locally relevant.
       The demand for technical assistance exceeds the present 
     supply of technical resources, and the private sector cadre 
     envisioned in the 2002 Farm Bill has not developed. The 
     modifications made in the substitute are intended to correct 
     these deficiencies through authority for use of mandatory 
     funds and multi-year contracts with third party providers, 
     establishment of fair and reasonable payment rates, and a 
     nationally consistent certification process. The requirement 
     for approval of State-level certification criteria is 
     intended to address the criticism that current requirements, 
     particularly those added at the State level, result in a 
     complicated and overly burdensome process that discourages 
     participation.
       The Managers expect that these changes will provide the 
     certainty needed to encourage the development of a 
     successful, skilled, and accountable third party provider 
     sector, diminish the tension caused by tradeoffs between 
     public and private sector resources, and make locally 
     relevant conservation technical assistance from public and 
     private sources increasingly available and accessible to 
     producers. (Section 2706 of Conference substitute)
     (31) Cooperative Conservation Partnership Initiative (Section 
         1243 of FSA)
       The House bill requires the Secretary to enter into 2- to 
     5-year agreements with eligible entities to preferentially 
     enroll producers in specified conservation programs. This 
     will allow multiple producers and others to cooperate on 
     improving specific resources of concern related to farming on 
     a local, State or regional scale. Eligible partners are 
     States, State agencies, State subdivisions including counties 
     and conservation districts, Tribes, and nongovernmental 
     organizations and associations with histories of working with 
     farmers on agriculture conservation issues.
       The Conservation Security Program, EQIP, and WHIP are the 
     programs covered by the provision. Not less than 75 percent 
     shall be used for State projects and not more than 25 percent 
     for multi-State projects. It prohibits use of funds to pay 
     for partner overhead or administrative costs. (Section 2403 
     of the House bill)
       The Senate amendment includes ``Special Rules Applicable to 
     Regional Water Enhancement Projects'' that adds a section to 
     the Partnerships and Cooperation section for Regional Water 
     Enhancement Projects. This section requires the Secretary to 
     identify priority areas and names the following as priority 
     areas: Chesapeake Bay, Upper Mississippi River basin, 
     Everglades, Klamath River basin, Sacramento/San Joaquin 
     River watershed, Mobile River basin, Puget Sound, Ogallala 
     Aquifer, Illinois River watershed (of Arkansas and 
     Oklahoma), Champlain Basin, Platte River watershed (note: 
     drafting error, this should be the Platte River Basin), 
     Republican River Watershed, Chattahoochee river watershed, 
     and the Rio Grande watershed.
       The Senate amendment requires proposals to describe 
     geographical location, identification of issues, baseline 
     assessment, activities to be undertaken, and performance 
     measures. It requires competitive awards of multi-year 
     contracts for proposals that have the highest likelihood of 
     success, involve multiple stakeholders, highest percentage of 
     working agricultural lands, highest percentage of on-the-
     ground activities, the greatest contribution to sustaining 
     agriculture, and suitable performance measures. (Section 2405 
     of the Senate amendment)
       The Conference substitute adopts the House provision with 
     an amendment and names the initiative the Cooperative 
     Conservation Partnership Initiative (CCPI).
       The Managers intend that resources made available under 
     CCPI be delivered in accordance with the basic program rules 
     and mechanisms relating to basic program functions, such as 
     appeals, payment limitations, and conservation compliance. 
     The Conference substitute allows the Secretary to make 
     certain programmatic adjustments better fit the local 
     circumstances and goals and objectives of the special project 
     identified for funding under the initiative. Proposed 
     adjustments may be part of the application from the 
     conservation partnership and forwarded to the State 
     Conservationist or the Secretary for consideration. The 
     Conference substitute provides for adjustments to provide 
     producers preferential enrollment in the applicable program 
     as part of the special project.
       The Managers include the following as an example of a CCPI 
     partnership: A cannery has closed and near-by orchards are 
     going out of business. A local watershed council pulls 
     together several partners such as a State university, a 
     wildlife organization, and an organic growers' cooperative. 
     They agree to work together to improve water quality and 
     wildlife habitat while working with interested local 
     producers to transition their orchards to organic grass-based 
     cattle operations.
       The watershed council files an application with the 
     Department proposing to conduct local producer outreach; 
     provide training on transitioning to a new agricultural 
     sector, including organic certification and cattle management 
     workshops; assist with tree removal; and assist in 
     implementing habitat diversity practices with workshops, 
     labor, and seed. The council asks for designation of 
     $10,000,000 in EQIP and $250,000 in WHIP.
       The State Conservationist agrees with the proposal and sets 
     aside the approved resources, which will go to producers 
     participating in the project. When the producer applies for 
     the programs, they certify that they are a project 
     participant. If they are qualified, they bypass the regular 
     program ranking processes and enter into a contract in the 
     identified program(s). Each program in this example stands on 
     its own and all program rules apply. The difference is the 
     streamlined application and the process that works to make 
     the programs seamless in application.
       The Conference substitute applies to all of the 
     Department's conservation programs except CRP, WRP, FPP and 
     GRP. The Managers intend that applications may propose 
     projects for consideration by the State Conservationist or 
     the Secretary that include innovative combinations of covered 
     initiative programs, if such combinations aid significantly 
     in meeting the goals and objectives of the project. It is 
     also the intent of the Managers that applicants may propose 
     projects for consideration by the State conservationist or 
     the Secretary that might work in tandem with the enhancement 
     programs under CRP or WRP. (Section 2707 of Conference 
     substitute)
     (32) Regional equity and flexibility (Section 1241 of FSA)
       The House bill raises the base amount of conservation funds 
     that a State must receive in order to receive priority 
     funding for conservation programs from $12,000,000 to 
     $15,000,000. (Section 2404 of House bill)
       The Senate amendment also increases the funding from 
     $12,000,000 to $15,000,000 and adds CSP and the Agricultural 
     Management Assistance Program to the programs considered in 
     determining funding. It instructs the Secretary to conduct a 
     review of conservation program allocation formulas to 
     determine the sufficiency of the formulas in accounting for 
     State-level economic factors, level of agricultural 
     infrastructure, or related factors that affect conservation 
     program costs. (Section 2402 of the Senate amendment)
       The Conference substitute adopts the Senate provision with 
     an amendment. (Section 2703 of Conference substitute)
     (33) Administrative requirements for conservation programs 
         (Section 1244 of FSA)
       The House bill authorizes for socially disadvantaged 
     farmers to be added as a group the Secretary must provide 
     incentives for to encourage participation in conservation 
     programs. The Secretary must establish a single, simplified 
     application process for initial requests of assistance under 
     the conservation programs administered by NRCS. Applicants 
     should not be required to provide information that is already 
     available to the Secretary, and the process itself must 
     minimize complexity and redundancy. (Section 2405 of the 
     House bill)
       The Senate amendment requires the Secretary to develop a 
     streamlined application process for conservation programs and 
     provide written notification of completion to Congress not 
     later than 1 year after enactment. It requires the Secretary, 
     at the request of the landowner, to cooperate with the 
     Secretary of the Interior and Secretary of Commerce to make 
     Safe Harbor assurances available to the landowner under the 
     Endangered Species Act. The provision allows producers to 
     apply for conservation programs through a producer 
     organization and that any applicable payment limits shall 
     apply to individuals and not the organization.
       The Senate amendment requires the Secretary to immediately 
     implement policies and procedures to ensure proper payment to 
     producers participating in conservation programs and correct 
     other management deficiencies identified in the OIG report 
     50099-11-SF. It requires the Secretary to monitor and measure 
     performance of conservation programs; to demonstrate the 
     long-term benefits of the programs; and to coordinate program 
     activities with the Soil and Water Resources Conservation 
     Act. (Section 2405 of the Senate amendment)
       The Conference substitute adopts the House provision with 
     an amendment to include a pollinator provision. Despite their 
     value, native pollinators such as bees, butterflies, moths, 
     flies, beetles, bats, or hummingbirds often are under-
     appreciated in terms of their contributions to the U.S. 
     agricultural sector. Insect-pollinated crops directly 
     contributed $20,000,000,000 to the United States economy in 
     2000 alone. The

[[Page H3599]]

     Managers recognize that many native pollinator groups, 
     particularly those important to agriculture, are facing a 
     serious risk of decline as a result of habitat loss, 
     degradation, and fragmentation, among other factors.
       The Managers see conservation programs as an important tool 
     for creating, restoring, and enhancing pollinator habitat 
     quantity and quality. The Managers expect the Secretary to 
     encourage, within appropriate conservation programs, measures 
     to benefit pollinators and their habitat, such as using plant 
     species mixes in conservation plantings to provide pollinator 
     food and shelter; establishing field borders, hedgerows, and 
     shelterbelts to provide habitat in proximity to crops; 
     establishing corridors that can expand and connect important 
     pollinator habitat patches; and encouraging related 
     pollinator-friendly production practices. (Section 2708 of 
     Conference substitute)
     (34) Annual report on participation by specialty crop 
         producers in conservation programs (Section 12512 of FSA)
       The House bill requires the Secretary to submit a report to 
     the House and Senate Agriculture Committees regarding 
     specialty crop producer participation in conservation 
     programs that tracks participation by crop and livestock 
     type, includes a plan to improve access of specialty crop 
     producers to conservation programs, and the describes the 
     results of this plan. (Section 2406 of the House bill)
       The Senate amendment had no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to modify the compliance and performance 
     provisions of Section 1244 of FSA to accommodate the intent 
     of the House bill. (Section 1244 of FSA)
     (35) Promotion of market based approaches to conservation/
         conservation programs in environmental service markets 
         (Section 1245 of FSA)
       The House bill directs the Secretary to research, analyze 
     and enter into contracts and agreements to promote the 
     development of uniform standards for quantifying 
     environmental benefits, promoting the establishment of credit 
     registries and third party verification, and facilitating 
     private sector market based approaches for agriculture and 
     forest conservation activities. An Environmental Services 
     Standards Board is established to develop uniform standards 
     for quantifying environmental services in order to help 
     develop credit markets agriculture and forest conservation 
     activities. (Section 2407 of the House bill)
       The Senate amendment directs the Secretary to establish a 
     framework to develop uniform standards, design accounting 
     procedures, and establish a protocol to report environmental 
     services benefits. It also directed the Secretary to 
     establish a registry to report and maintain the benefits and 
     verify that a farmer, rancher or forest land owner has 
     implemented the conservation or land management activity. The 
     Secretary is directed to focus first on carbon markets. 
     (Section 2406 of the Senate amendment)
       The Conference substitute adopts the House provision with 
     an amendment. The Secretary is directed to establish 
     technical guidelines, including a verification process that 
     considers the role of third parties. The Secretary is 
     instructed to consult with Federal and State agencies and 
     nongovernmental interests, such as producers, academia, and 
     financial institutions. The Secretary is directed to focus 
     initially on carbon markets, as the Managers recognize that 
     this is the most pressing emerging market in which 
     agriculture may be involved. The Secretary is expected to 
     fulfill the intent of this section with resources 
     available to the Department.
       The adoption of this provision recognizes the growing 
     opportunities for agriculture to participate in emerging 
     environmental services markets. The Managers observe that the 
     largest barrier to participation is the lack of standards and 
     accounting procedures that make transparent the benefits that 
     are being produced and marketed. The Managers believe that 
     the most appropriate Federal lead for developing these common 
     standards is the Secretary and expect the Secretary to move 
     expeditiously to accomplish this task. (Section 2709 of 
     Conference substitute)
     (36) Establishment of state technical committees (Section 
         1261 of FSA)
       The House bill changes the existing composition of State 
     technical committees to include at least 12 producers 
     representing a variety of crops, livestock, or poultry grown 
     in the State.
       The House bill states that State technical committees shall 
     convene subcommittees to provide technical guidance and 
     implementation recommendations. The topics subcommittees must 
     address include: establishing priorities and criteria for 
     State initiatives; private forestland protection issues; 
     water quality and quantity issues; air quality, wildlife 
     habitat, wetland protection, and other issues. (Section 2408 
     of the House bill)
       The Senate amendment requires the Secretary to develop 
     standard operating procedures to be used by the State 
     technical committee in the development of technical 
     guidelines for the implementation of the conservation 
     provisions of this title. It makes local work groups 
     subcommittees of the State technical committee, which exempts 
     them from the Federal Advisory Committee Act. (Section 2501 
     of the Senate amendment)
       The Conference substitute adopts the House provision with 
     an amendment. The substitute requires the Secretary to 
     develop standard operating procedures for the committees, 
     updates the names of participating agencies, and deletes the 
     requirement for establishing specific issue-area 
     subcommittees. The substitute requires that public notice be 
     given for meetings of the State technical committee and adds 
     local working groups as subcommittees. The Managers expect 
     that other relevant Federal agencies will also be invited to 
     participate as needed. (Section 2711 of Conference 
     substitute)
     (37) Payment limitation (Section 1246(a-c), 1244(i), 
         1238C(d), and 1240G of FSA)
       The House bill imposes payment limitation of $60,000 per 
     fiscal year for any single program; $125,000 for payments 
     from more than one program. This limitation does not apply to 
     WRP, FPP, or GRP. The House bill requires the Secretary to 
     issue regulations ensuring direct attribution. Further, the 
     Secretary shall issue such regulations as necessary to ensure 
     that the total amount of payments are attributed to an 
     individual by taking into account the individual's direct and 
     indirect ownership interests in a legal entity that receives 
     payments. Payments to individuals shall be combined with the 
     individual's pro rata share of payments received by an entity 
     in which the individual has a direct or indirect ownership 
     interest. Likewise, payments made to an entity shall be 
     attributed to those individuals with a direct or indirect 
     ownership interest in the entity. (Section 2409 of the House 
     bill)
       The Senate amendment requires the Secretary to use direct 
     attribution for all conservation programs. In the case of a 
     producer organization, the limitation on payments on 
     applicable programs shall apply to each participating 
     producer and not to the entity. (Section 2405 and Section 
     2357 of the Senate amendment)
       The Conference substitute moves the payment limitations 
     into each individual program and deletes this Section.
     (38) Inclusion of income from affiliated packing and handling 
         operations as income derived from farming for application 
         of adjusted gross income limitation on eligibility for 
         conservation programs (Section 1001D(b)(1) of FSA)
       The House bill allows income from packing and handling 
     operations to be included as income derived from farming for 
     purposes of payment eligibility. (Section 2501 of the House 
     bill)
       The Senate amendment has no comparable provision.
       The Conference substitute adopts the Senate provision and 
     deletes this section.
     (39) Encouragement of voluntary sustainability practices 
         guidelines
       The House bill provides that the Secretary may encourage 
     the development of voluntary sustainable practices guidelines 
     for producers and processors of specialty crops. (Section 
     2502 of the House bill)
       The Senate amendment has no comparable provision.
       The Conference substitute adopts the Senate provision and 
     does not include the provision.
     (40) Farmland resource information (Section 1544 of 
         Agriculture and Food Act of 1981)
       The House bill provides that the Secretary shall design and 
     implement educational programs emphasizing the importance of 
     farming. One or more farmland information centers shall be 
     designated to provide technical assistance and serve as 
     central depositories for information on farmland issues. The 
     centers shall be funded using no more than 0.05 percent of 
     FPP funds per year but no less than $400,000 annually and 
     must be matched with non-federal funds or in-kind 
     contributions. (Section 2503 of the House bill)
       The Senate amendment has no comparable provision.
       The Conference substitute adopts the Senate provision and 
     does not include the provision.
     (41) Pilot program for four-year crop rotation for peanuts
       The House bill directs the Secretary to enter into 
     contracts with peanut producers to implement a four-year crop 
     rotation for peanuts. Funding for this pilot shall not exceed 
     $10,000,000 of mandatory funds for each of fiscal years 2008 
     through 2012. (Section 2504 of the House bill)
       The Senate amendment provides that within CSP the Secretary 
     shall provide additional payments to producers who agree to 
     adopt resource-conserving crop rotations to achieve optimal 
     crop rotations. (Section 2341 of the Senate amendment)
       The Conference substitute adopts the Senate provision with 
     an amendment.
     (42) Agriculture Conservation Experienced Services Program 
         (Section 307(a) of the Department of Agriculture 
         Reorganization Act of 1994)
       The Senate amendment authorizes the Secretary to enter into 
     agreements with organizations to hire individuals 55 and 
     older to provide assistance in administering conservation 
     related programs. Funding for the program is authorized from 
     EQIP, the Soil Conservation and Domestic Allotment Act (16 
     U.S.C. 590a et seq), and the Older Americans Act (42 U.S.C. 
     3056). The provision stipulates that agreements may not 
     displace individuals employed by the Department. It allows 
     the Secretary to provide tools, including agency vehicles, 
     necessary to carry out

[[Page H3600]]

     the program. (Section 2602 of the Senate amendment)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment that limits individuals employed under this 
     authority to providing only technical assistance. The 
     Managers intend that the program be used solely for technical 
     assistance and not for administrative tasks. (Section 2710 of 
     Conference substitute)
     (43) Technical assistance (16 U.S.C 590(a) of Soil 
         Conservation and Domestic Allotment Act and 16 U.S.C. 
         2001 of Soil and Water Resources Conservation Act)
       In the Soil Conservation and Domestic Allotment Act, the 
     Senate amendment clarifies that it is the policy of the 
     United States to preserve soil, water, and related resources 
     and to promote soil and water quality. It defines technical 
     assistance to mean technical expertise, information and tools 
     necessary for the conservation of natural resources on land 
     active in agricultural, forestry or related uses.
       In the Soil and Water Resources Conservation Act of 1977, 
     the Senate amendment expands on existing appraisal 
     requirements to include data on conservation plans, 
     conservation practices planned or implemented, environmental 
     outcomes, economic costs, and related matters. The national 
     conservation program's evaluation of existing conservation 
     programs is amended to emphasize monitoring of specific 
     program components in order to encourage further development 
     and adoption of practices and performance-based standards.
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate amendment to 
     the Soil Conservation and Domestic Allotment Act. The 
     Managers intend to clarify that it is the role of USDA to 
     provide technical assistance to farmers, ranchers, and other 
     eligible entities to assist in the conservation of soil, 
     water, and related resources. The Managers recognize that the 
     natural resource concerns that producers face are dynamic and 
     preclude an inclusive list as responsibilities for USDA.
       The Conference substitute adopts the Senate amendment to 
     Soil and Water Resources Conservation Act with an amendment. 
     The Act is extended to 2018. The Managers expect the delivery 
     of appraisals and programs to be tied more closely to the 
     Farm bill cycle, with the intent that these evaluations will 
     inform development of future farm policy. (Section 2802 of 
     Conference substitute)
     (44) National Natural Resources Conservation Foundation 
         (Section 351 of Federal Agriculture Improvement and 
         Reform Act of 1996)
       The Senate amendment updates existing foundation language 
     and expands granting authority of the foundation to include 
     making grants to individuals, entering into agreements with 
     the Federal government, and making gifts to the foundation 
     tax exempt. (Section 2606 of the Senate amendment)
       The House bill has no comparable provision.
       The Conference substitute adopts the House provision and 
     does not include the provision.
     (45) Desert terminal lakes (Sec 2507 of the Farm Security and 
         Rural Investment Act of 2002)
       The Senate amendment extends and reauthorizes through 2012. 
     It allows funds to be used to lease or to purchase land, 
     water appurtenant to the land, and related interests in the 
     Walker River Basin from willing sellers.
       The section provides $200,000,000 in mandatory funds for 
     fiscal years 2008 through fiscal year 2012. (Section 2607 in 
     the Senate amendment)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to provide $175,000,000 in mandatory funding. 
     (Section 2807 of Conference substitute)
     (46) High Plains water study
       The Senate amendment requires that program benefits under 
     the 2007 Farm bill will not be denied to eligible individuals 
     solely on the basis of participation in a one-time study of 
     aquifer recharge potential in the high plains of Texas. 
     (Section 2609 of the Senate amendment)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision. The 
     Managers recognize that the ongoing depletion of the Ogallala 
     Aquifer is an acute concern for the eight States that depend 
     on it for agricultural, domestic, industrial uses, and other 
     uses. This provision will allow agricultural producers to 
     participate in a one-time study of aquifer recharge potential 
     that will help inform State and local water conservation 
     investment and policy to aid in managing this critical 
     aquifer. The study is narrowly focused on a small number of 
     playa lakes situated on agricultural land over the Ogallala 
     Aquifer.
       Playas are temporary wetlands unique to the High Plains of 
     North America, numbering more than 60,000. Playas not only 
     serve as the primary source of recharge for the Ogallala 
     Aquifer, they are the most important wetland type for 
     wildlife in this region. The Managers encourages the 
     Department to further recognize the importance of playas 
     through increased communication to landowners of the benefits 
     of playas and conservation programs available. The Managers 
     encourage the Department to work with the Playa Lakes Joint 
     Venture to enhance the use of such programs like CRP to help 
     ensure the protection of playas. (Section 2901 of Conference 
     substitute)
     (47) Payment of expenses (Section 17(d) of the Federal 
         Insecticide, Fungicide, and Rodenticide Act)
       The Senate amendment amends the Federal Insecticide, 
     Fungicide, and Rodenticide Act (7 U.S.C. 136 et seq.) to 
     require that the Department of State shall cover expenses 
     incurred by Environmental Protection Agency staff 
     participating on an international technical, economic, or 
     policy review board, committee, or other official body with 
     respect to a related international treaty. (Section 2610 of 
     the Senate amendment)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 14209 of Conference substitute)
     (48) Use of funds for salinity control activities upstream of 
         Imperial Dam (Sec. 202(a) of the Colorado River Basin 
         Salinity Control Act)
       The Senate amendment amends Section 202(a) of the Colorado 
     River Basin Salinity Control Act (43 U.S.C. 1592(a)) to 
     create a Basin States Program to allow the Bureau of 
     Reclamation, to carry out salinity control activities in the 
     Colorado River basin. The provision requires the Secretary of 
     Interior to consult with the Colorado River Basin Salinity 
     Control Advisory Council when providing assistance in the 
     form of grants, grant commitments, or the advancement of 
     funds to Federal or non-Federal entities. It requires a 
     planning report to Congress that describes the proposed 
     implementation of the program and stipulates that no funds 
     may be expended to implement the program until 30 days after 
     the report is submitted to Congress. (Section 2611 of the 
     Senate amendment)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision. The 
     Managers intend for this provision to be fiscally neutral 
     both as to appropriations and as to draws on the basin funds. 
     It does not change the cost share ratios already established 
     in Section 205(a) of the Act, nor does it change the 
     percentage split between the two funds or the requirement 
     that no more than 15 percent of the basin States cost share 
     is to come from the Upper Colorado River Basin Fund. It is 
     only intended to clarify the authority through which 
     Reclamation expends the required cost share dollars. (Section 
     2806 of Conference substitute)
     (49) Technical corrections to the Federal Insecticide 
         Fungicide, and Rodenticide Act (Section 33 of FIFRA)
       The Senate amendment makes technical corrections to the 
     pesticide registration service fee program in the Federal 
     Insecticide, Fungicide, and Rodenticide Act. (Section 2612 of 
     the Senate amendment)
       The House bill has no comparable provision.
       The Conference substitute adopts the House provision and 
     does not include the provision. However, the Conference 
     substitute includes a container recycling provision. (Section 
     14109 of Conference substitute)
       The Managers have received concerns from numerous 
     agricultural interests concerning pest resistance to first 
     generation anticoagulant rodenticide products and the 
     importance of low-cost, widely available effective 
     rodenticides. The Managers encourage the Administrator of the 
     Environmental Protection Agency to continue to classify 
     second-generation rodenticides as general use products so as 
     to minimize the potential consequences of reclassifying these 
     materials as restricted use on target species resistance to 
     first-generation rodenticides, potential non-target species 
     poisoning, and cost and availability of rodenticides to the 
     general public.

                            TITLE III--TRADE

     (1) Agricultural Trade Development and Assistance Act of 1954
       (a) Short title (Section 1 of the Agricultural Trade 
           Development and Assistance Act of 1954)
       The Senate amendment changes the title of the underlying 
     legislation to the Food for Peace Act. It also includes 
     numerous conforming amendments. (Section 3001)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision on 
     changing the title of the underlying legislation to the Food 
     for Peace Act (Section 3001).
       (b) United States policy (Section 2 of the Food for Peace 
           Act)
       The Senate amendment deletes a paragraph describing market 
     development as one of the objectives of the programs under 
     this Act. This modification is made to reflect the approach 
     taken in operating the program in recent years. (Section 
     3002)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision that 
     deletes a paragraph in Section 2 describing market 
     development as one of the objectives of the programs under 
     this Act (Section 3002).
       (c) Food aid to developing countries (Section 3(b) of the 
           Food for Peace Act)
       The Senate amendment modifies the Sense of Congress in 
     current law to (1) require the

[[Page H3601]]

     President to seek commitments from other donors; reinforces 
     the need to keep recipient governments, non-governmental 
     organizations, and private voluntary organizations involved 
     in conducting needs assessment and implementing programs and 
     ensure that a variety of options are available to provide 
     needs-based emergency and non-emergency aid and (2) that the 
     United States should increase food aid contributions 
     consistent with the Uruguay Round Agreement on Agriculture. 
     (Section 3003)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     a minor modification. (Section 3003).
       (d) Trade and development assistance (Title I of the Food 
           for Peace Act)
       The Senate amendment renames Title I of the newly renamed 
     Food for Peace Act from Development and Trade Assistance to 
     Economic Assistance and Food Security. (Section 3004).
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision that 
     renames Title I of the newly renamed Food for Peace Act from 
     Development and Trade Assistance to Economic Assistance and 
     Food Security (Section 3004).
       (e) Agreements regarding eligible countries and private 
           entities (Section 102 of the Food for Peace Act).
       The Senate amendment strikes references to potential 
     recipient countries becoming commercial markets and strikes a 
     requirement that organizations seeking funding under the Act 
     prepare and submit agricultural market development plans. 
     (Section 3005).
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision that 
     strikes references to potential recipient countries becoming 
     commercial markets and strikes a requirement that 
     organizations seeking funding under the Act prepare and 
     submit agricultural market development plans (Section 3005).
       (f) Use of local currency payments (Section 104 of the Food 
           for Peace Act).
       The Senate amendment adds the objective of improving trade 
     capacity of the recipient country to the set of goals to be 
     achieved under agricultural development. It removes authority 
     for specific agricultural development activities such as 
     business development loans, facilities loans, and private 
     sector agricultural development. It also specifies that 
     private voluntary organizations and cooperatives may 
     implement agreements under this title. (Section 3006)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision on 
     modifying language governing the use of local currencies, 
     with the following changes: rather than striking paragraphs 
     (3), (4), (5), and (6), the substitute modifies paragraphs 
     (3), (4), and (5) to update obsolete references and leaves 
     paragraph (6) intact (Section 3006).
       (g) General authority (Section 201 of the Food for Peace 
           Act)
       The House bill amends the purposes of the Title II program 
     to clarify that food deficits to be addressed include those 
     resulting from man made and natural disasters. (Section 
     3001(a)).
       The Senate amendment clarifies the objectives for 
     assistance under Title II commodity donations. It adds the 
     promotion of food security and support of sound environmental 
     practices in paragraph (5); removes feeding programs as an 
     objective in paragraph (6); and adds a new paragraph 
     specifying the protection of livelihoods, provision of safety 
     nets for food insecure populations and to encourage 
     participation in educational, training, and other productive 
     activities. (Section 3007)
       The Conference substitute adopts both the House and Senate 
     provisions, with a modification to paragraph (6) of the 
     Senate provision to keep Section 201(6) intact and add a new 
     paragraph (7) to reflect the need to promote economic and 
     nutritional security for food insecure populations. (Section 
     3007).
       The Managers recognize that humanitarian emergencies 
     frequently occur due to a combination of factors, typically 
     encompassing natural disasters, resource mismanagement and 
     poor government policymaking. In most cases, the United 
     States government ought to respond to such catastrophes with 
     emergency assistance. However, if a disaster results mostly 
     from poorly devised or discriminatory governmental policies 
     in the recipient country, the Managers requests that the 
     Administrator brief the relevant Congressional Committees 
     before responding with assistance.
       (h) Provision of agricultural commodities (Section 202 of 
           the Food for Peace Act)
       The House bill increases the percentage of Title II funding 
     (currently at a range of 5 to 10 percent) that the 
     Administrator may make available to eligible organizations 
     for administrative and distribution costs to a range of 7 to 
     12 percent.
       The House provision also expands the purposes for which 
     such funds may be used to include developing monitoring 
     systems for Title II programs. (Section 3001(b))
       The Senate amendment revises current language to clarify 
     that the fact that a project is being proposed in a country 
     that does not have a U.S. Agency for International 
     Development mission or is not part of an overall development 
     plan for the country cannot be used as the sole rationale for 
     denying the proposal.
       It modifies the share of Title II funds which can be used 
     to cover logistical expenses incurred by the eligible 
     organizations that carry out Title II programs from between 5 
     and 10 percent to not less than 7.5 percent.
       It clarifies that such funds can be used to cover 
     management, personnel, programmatic, operational activities, 
     internal transportation, and distribution costs for new and 
     existing programs. These funds can also be used to cover the 
     costs of needs assessment and monitoring and evaluation. 
     (Section 3008).
       It also strikes language on streamlining program management 
     included in the 2002 farm bill. It also inserts new language 
     which permits the Administrator to use Title II funds to 
     address food aid quality issues, and requires that regular 
     reports on progress on these quality issues be made to the 
     relevant Congressional Committees.
       The Conference substitute adopts Senate language on 
     paragraph (1) and paragraph (3) with modifications, providing 
     $4.5 million for fiscal years 2009 through 2011 to be used to 
     study and improve food aid quality for fiscal 2009-2011 from 
     funds made available under Section 3012. It adopts House 
     language on paragraph (2) with the modifications that the 
     range of Title II funding available for administrative and 
     distributional expenses is increased to between 7.5 percent 
     and 13 percent. (Section 3008).
       The Managers urge the Administrator to explore the 
     practicality of allowing Title II recipients to enrich or 
     fortify Title II commodities overseas and produce high-value 
     and processed products to support local manufacturing of food 
     products in recipient countries. Such local products could 
     include ready-to-use therapeutic and therapeutic and 
     supplemental products and other fortified and processed foods 
     that can be used successfully to treat severe and moderate 
     malnutrition among children and provide nutritional support 
     for people living with HIV/AIDS and other vulnerable groups.
       (i) Generation and use of currencies by private voluntary 
           organizations and cooperatives (Section 203 of the Food 
           for Peace Act)
       The House bill makes a technical correction. (Section 
     3001(c))
       The Senate amendment adds activities involving micro-
     enterprises and village banking as a valid use of proceeds 
     generated by monetization of commodities donated under Title 
     II. (Section 3009)
       The Conference substitute adopts the House provision 
     (Section 3009).
       The Managers recognize that microfinance and village 
     banking, which relies on low dollar loans and collective 
     responsibility, has flourished throughout the developing 
     world for more than 30 years.
       The Managers believe that similar activities such as micro-
     enterprise lending, village banking, and microfinance can be 
     a valuable complement to development assistance projects 
     under Title II of the Food for Peace Act, and encourages the 
     Administrator to view micro-enterprise microfinance, and 
     village banking projects as valid uses of local currency 
     generated by monetization under this Act.
       (j) Levels of assistance (Section 204 of the Food for Peace 
           Act)
       The House bill extends requirements on overall minimum 
     tonnage and minimum tonnage for non-emergency assistance 
     provided under Title II through 2012. (Section 3001(d))
       The Senate amendment extends only the overall minimum 
     tonnage requirement for Title II programs through 2012. 
     (Section 3010).
       The Conference substitute adopts the House provision 
     (Section 3010).
       (k) The Food Aid Consultative Group (Section 205 of the 
           Food for Peace Act)
       The House bill extends the authority for the Food Aid 
     Consultative Group (FACG). (Section 3001(e))
       The Senate amendment requires that a representative of the 
     maritime transportation sector be included in the Group.
       It also requires the Administrator to consult with the FACG 
     in developing regulations for the pilot local cash purchase 
     program established in Section 3014, and extends the 
     authority for the FACG through 2012. (Section 3011)
       The Conference substitute adopts the House provision, and 
     paragraph (1) of the Senate provision. (Section 3011).
       (l) Administration (Section 207 of the Food for Peace Act)
       The House bill deletes a requirement that if the U.S. 
     Agency for International Development denies a proposal for a 
     Title II project, it must specify conditions that must be met 
     for the approval of such proposal.
       It also adds a new provision that requires the U.S. Agency 
     for International Development to establish and report on 
     systems to improve and evaluate Title II assistance, 
     including early warning systems to prevent famines. (Section 
     3001(f) and (g)) The Senate amendment provides more 
     flexibility to the Administrator in terms of the time 
     available to evaluate and determine whether to accept a 
     proposal for assistance under Title II, and clarifies the 
     intent of the law with respect to notifying an applicant why 
     their proposal was rejected.

[[Page H3602]]

       It deletes a requirement for handbooks which are no longer 
     used within the Title II program. Information previously 
     contained in such handbooks is now available through other 
     outlets, such as the U.S. Agency for International 
     Development website.
       It deletes a specific deadline for submitting commodity 
     orders, which on occasion can have the effect of slowing down 
     the process, and substitutes a requirement that orders should 
     be provided on a timely basis and it pushes back the date 
     from December 1 to June 1 for a report on the programs, 
     countries, and commodities approved to date within a fiscal 
     year under Title II.
       It adds language that allows the Administrator to use Title 
     II funds to pay for assessment, data collection and 
     management, and monitoring activities, and to hire contract 
     workers to undertake such work in recipient or neighboring 
     countries, without limiting existing authority to hire 
     contractors to help address emergency food needs.
       The Senate amendment also adds language allowing the 
     Administrator to pay the World Food Program of the United 
     Nations for indirect support costs of the commodities donated 
     under Title II, requiring that the Administrator report to 
     relevant Congressional committees on such payments. It also 
     clarifies the authority of the Administrator to pay indirect 
     costs associated with funds received or generated for 
     programs to PVO's and cooperatives. It also requires that 
     project reports should be submitted in such a form as can be 
     readily displayed for public use on the U.S. Agency for 
     International Development website. (Section 3012)
       The Conference substitute adopts House language to require 
     specific oversight, monitoring, and assessment activities and 
     provides up to $22 million annually of Title II funds for 
     monitoring and assessment activities for non-emergency 
     programs. It provides that no more than $8 million of 
     these funds may be used for the Famine Early Warning 
     Systems Network, but only if at least $8 million is 
     provided for this system from accounts funded pursuant to 
     the Foreign Assistance Act of 1961. It also provides up to 
     $2.5 million of the $22 million to upgrade the information 
     technology systems associated with the food aid program in 
     fiscal year 2009, to enhance the monitoring of these 
     programs.
       The Conference substitute also adopts Senate language on 
     paragraphs (2) and (3), and provides contracting authority 
     for personal service in order to undertake monitoring and 
     assessments for non-emergency programs, as part of paragraph 
     (5). It does not provide for additional authority to pay 
     indirect support costs to the World Food Program or to 
     private voluntary organizations. (Section 3012).
       The Managers recognize the use of handbooks in Title II is 
     no longer an efficient method of providing information to 
     foster development of programs under this title by eligible 
     organizations. Realizing the need for clear communication of 
     guidelines and regulations to eligible organizations, the 
     Managers expect the Administrator to ensure the accessibility 
     and clarity of information previously dispensed in the 
     handbooks such as in an electronic form readily available to 
     the public, in addition to other means as determined 
     appropriate by the Administrator.
       The Managers believe that the provision of commodities 
     overseas must be carried out in a timely manner and in a 
     manner that is consistent with planned delivery schedules.
       The Managers are aware that the U.S. Agency for 
     International Development has received significant cuts in 
     operating expenses in the President's budget and in 
     Congressional appropriations over the last several years to 
     carry out their operating expense which increasingly affects 
     the Agency's ability to monitor its programs. Although the 
     Managers appreciate these constraints, it expects the 
     Administrator to make every effort to improve the monitoring 
     and evaluation of U.S. food assistance programs. Therefore, 
     the Managers provide the Administrator with the authority to 
     contract for personal services from persons not employed by 
     the U.S. Government to carry out monitoring and oversight 
     activities. The Managers have been concerned that, in the 
     past, the U.S. Agency for International Development has not 
     had the authority or the resources for monitors for non-
     emergency food aid programs. The April 2007 Government 
     Accountability Office report on U.S. food assistance programs 
     found that monitoring of food assistance programs in-country 
     by the U.S. Agency for International Development has been 
     insufficient due to various factors, including limited staff, 
     competing priorities, and legal restrictions on the use of 
     food assistance resources. The Managers are concerned about 
     the significant gaps in monitoring and evaluation of U.S. 
     international food assistance programs and expects the 
     Administrator to address this problem immediately by 
     establishing a system to monitor food assistance programs. 
     The language in this new subsection will allow the 
     Administrator to address this criticism by employing non-
     emergency food aid monitors.
       The Managers expect the Administrator to continue to use 
     existing authority to pay those expenses required and agreed 
     upon to the World Food Program.
       (m) Assistance for stockpiling and rapid transportation, 
           delivery, and distribution of shelf-stable, prepackaged 
           foods (Section 208 of the Food for Peace Act)
       The House bill extends the authorization and increases 
     annual funding for such grants from $3 million to $7 million. 
     (Section 3001(h))
       The Senate amendment reauthorizes this program and also 
     increases the level that can be appropriated to assist in the 
     development of shelf-stable, prepackaged foods for use in 
     food aid programs from $3 million to $8 million. (Section 
     3013)
       The Conference substitute adopts the Senate provision 
     (Section 3013)
       The Managers recognize the value added to U.S. food aid 
     programs through cost sharing by implementing partners and 
     recognize that preference is given to organizations that are 
     able to provide such additional program funds. The Managers 
     are supportive of the Administrator evaluating the inclusion 
     of in-kind contributions when administering guidelines for 
     cost sharing by non-profit organizations.
       (n) General authorities and requirements (Section 401 of 
           the Food for Peace Act)
       The Senate amendment strikes the requirement that the 
     Secretary make a determination about domestic supply of the 
     commodity before releasing commodities for the food aid 
     program. (Section 3015)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision 
     (Section 3014).
       (o) Definitions (Section 402 of the Food for Peace Act)
       The Conference substitute consolidates several references 
     to the appropriate committees of Congress with respect to 
     reporting activities under the Food for Peace Act. (Section 
     3015).
       (p) Use of Commodity Credit Corporation (Section 406 of the 
           Food for Peace Act).
       The Senate amendment clarifies that costs incurred to 
     improve food aid quality to the list of activities and 
     functions can be covered by the Commodity Credit Corporation 
     through advance appropriations acts. (Section 3016)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision 
     (Section 3016).
       (q) Administrative provisions (Section 407 of the Food for 
           Peace Act)
       The House bill extends the authorization for prepositioning 
     of commodities and increases the limit on funding available 
     for prepositioning such commodities overseas from $2 million 
     to $8 million. The bill also authorizes assessment and 
     possible establishment of additional prepositioning sites. 
     (Section 3001(i))
       The Senate amendment reauthorizes pre-positioning of U.S. 
     commodities abroad and increases the limit on funding 
     available for prepositioning in foreign countries from $2 
     million to $4 million. It also requires that resource 
     requests for multi-year or ongoing non-emergency assistance 
     agreements be approved by October 1 of the fiscal year when 
     the commodities will be delivered.
       It also pushes the completion date for an annual report 
     concerning the programs and activities of this Act from 
     January 15 to April 1, and requires the Administrator to make 
     the report available to the public by electronic and other 
     means. (Section 3017)
       The Conference substitute adopts the Senate provision, but 
     increases funding for prepositioning to $10 million, and adds 
     the House language on studying the need for additional 
     prepositioning sites (Sections 3017 and 3018(a)).
       (r) Consolidation and modification of annual reports 
           regarding agricultural trade issues (Section 407 of the 
           Food for Peace Act)
       The House bill amends requirements of the report the 
     President must prepare on food aid programs that are carried 
     out under the Act. (Section 3001(j))
       The Senate amendment has no comparable provision.
       The Conference substitute consolidates a number of 
     reporting requirements and date changes for reports from both 
     Senate and House bills (Section 3018).
       (s) Expiration of assistance (Section 408 of the Food for 
           Peace Act)
       The House bill reauthorizes agreements under the Act 
     through 2/31/12. (Section 3001(k))
       The Senate amendment reauthorizes agreements under the Act 
     through December 31, 2012. (Section 3018)
       The Conference substitute adopts the House provision 
     (Section 3019).
       (t) Authorization of appropriations (Section 412 of the 
           Food for Peace Act).
       The House bill extends the Act through 2012, and sets 
     authorization levels for Title II to $2.5 billion. (Section 
     3001(l))
       The Senate amendment reauthorizes appropriations for the 
     Act through 2012. It also strikes subsection (b) and removes 
     the President's authority to transfer funds between the 
     programs under this Act. (Section 3019)
       The Conference substitute adopts the House provision, 
     modifying it with technical changes. (Section 3020).
       (u) Micronutrient Fortification Programs (Section 415 of 
           the Food for Peace Act)
       The House bill extends authorization for the program 
     through 2012 and amends the purposes. (Section 3001(m))
       The Senate amendment reauthorizes the Micronutrient 
     Fortification Program from the Farm Security and Rural 
     Investment Act of 2002 and adds new authority to assess and 
     apply technologies and systems to improve food aid. It also 
     strikes subsection (b),

[[Page H3603]]

     which limits the number of countries in which this program 
     can be implemented. (Section 3020)
       The Conference substitute adopts the Senate provision 
     (Section 3023).
       (v) John Ogonowski and Doug Bereuter Farmer-to-Farmer 
           Program (Section 501 of the Food for Peace Act)
       The House bill provides a floor level of funding for the 
     Farmer-to-Farmer program of $10 million and extends the 
     program through 2012. The House bill also increases 
     authorization of appropriations for specific regions from $10 
     million to $15 million. (Section 3001(n))
       The Senate bill reauthorizes the Farmer-to-Farmer program. 
     (Section 3022)
       The Conference substitute adopts the House provision 
     (Section 3024).
       The Managers recognize that organizations such as the Foods 
     Resource Bank provide vital financial and technical 
     assistance to agricultural production in developing countries 
     in areas of financing, market access and knowledge, and 
     development assistance. This assistance is generated through 
     sale of crops grown in a cooperative effort between members 
     of urban and rural churches and other organizations. These 
     growing projects are an outstanding example of harnessing the 
     grass-roots energy and generosity of Americans. Through use 
     of these proceeds, these members of churches and 
     organizations help to increase the technical knowledge and 
     available capital, for farmers and others in targeted 
     developing countries. These efforts enhance food security and 
     increase productivity in these countries.
       The Managers understand that in the recent years, the Foods 
     Resource Bank has received matching funds through the Global 
     Development Alliance established by the U.S. Agency for 
     International Development. The Managers encourage the 
     Administrator to continue this funding and consider entering 
     into longer term agreements with these organizations to 
     provide for more certainty in project planning.
       The Managers believe that providing funds to match such 
     contributions leverage the government's investment and 
     provide an incentive to expand the effort of growing projects 
     working in the United States to raise money. Such an action 
     would also increase public awareness of the plight of farmers 
     in developing countries.
     (2) Export Credit Guarantee Program (Sections 203 and 211 of 
         the Agricultural Trade Act of 1978)
       The House bill reduces the tenor of the GSM-102 Export 
     Credit Guarantee Program to six months beginning in fiscal 
     year 2008. (Section 3002)
       The House bill and the Senate amendment both repeal 
     authority for the Supplier Credit program, which provides 
     guarantees to buyers of U.S. commodities in foreign countries 
     for a period of not more than 180 days.
       Both bills repeal authority for the GSM-103 Intermediate 
     Credit Guarantee Program which provides guarantees for loans 
     to purchase U.S. agricultural commodities with duration of 
     between three years and ten years, and repeal the one percent 
     cap on loan origination fees for the GSM-102 export credit 
     guarantee program.
       The Senate amendment reduces the tenor of the GSM-102 
     export credit guarantee program to no more than six months 
     beginning in fiscal year 2012. The Senate amendment also 
     clarifies how the U.S. Department of Agriculture should 
     conduct evaluations of the creditworthiness of countries 
     participating in export credit guarantee programs, and 
     reduces the minimum amount that can be allocated to the 
     export credit programs from its current $5.5 billion to $5 
     billion. (Section 3101)
       The Conference substitute adopts the Senate provision, with 
     the following modification: in lieu of the reduction in tenor 
     for the GSM-102 program beginning in fiscal year 2012, the 
     conference amendment includes a cap on the credit subsidy for 
     the program of $40 million annually (Section 3101).
       The Managers eliminated proposals to limit the tenor of 
     export credit guarantees to periods shorter than 3 years in 
     length. In order to garner budget savings while preserving 
     the 3 year tenor and effectiveness of the program to support 
     U.S. agricultural exports, subsection (b) limits the 
     available budget authority for the cost of the program, as 
     determined on a net present value basis under the Federal 
     Credit Reform Act of 1990.
       Specifically, the Commodity Credit Corporation must make 
     available each year GSM-102 guarantees in an amount not less 
     than $5.5 billion, or the amount of guarantees that can be 
     supported by $40 million in budget authority (plus any budget 
     authority carried over from prior years)--whichever amount is 
     less. It is expected that the U.S. Department of Agriculture 
     can make available approximately $4 billion annually in 
     export credit guarantees on $40 million in budget authority.
       The Managers remain concerned that the U.S. Department of 
     Agriculture has consistently failed to meet its statutory 
     obligation to make available at least $5.5 billion in export 
     credit guarantees, to the detriment of U.S. agricultural 
     exports and the ability of food importing countries to meet 
     their food, feed, and fiber needs.
       The Managers expect the U.S. Department of Agriculture to 
     use this authority to design and operate the export credit 
     guarantee program to maximize the export sales of 
     agricultural commodities and to assist food importing 
     countries' efforts to meet their food, feed, and fiber needs, 
     by making available and utilizing guarantees equal to at 
     least the statutory minimum, and more as necessary to meet 
     program demand.
       Finally, the Managers believe that the changes in this 
     section satisfy U.S. commitments to comply with the Brazil 
     cotton case with regard to the export credit programs.
     (3) Market Access Program (Sections 203 and 211 of the 
         Agricultural Trade Act of 1978)
       The House bill extends the program and makes organic 
     commodities eligible for the program. It increases funding by 
     $25 million annually. (Section 3003)
       The Senate amendment makes organic commodities eligible for 
     the program. It also increases funding for the program from 
     its current level of $200 million for fiscal year 2007, 
     raising it by $10 million annually until fiscal year 2011, 
     when it returns to baseline levels. (Section 3102)
       The Conference substitute adopts the Senate provision, 
     without the increase in funding above baseline levels 
     (Section 3102).
     (4) Food for Progress Act of 1985
       The House bill extends the Food for Progress Act (7 U.S.C. 
     1736o) through 2012. (Section 3004)
       The Senate amendment reauthorizes the program through 2012, 
     and makes recipient governments, intergovernmental 
     organizations, and private entities ineligible for the 
     program. It also increases the amount that can be spent 
     transporting commodities under Food for Progress from $40 
     million to $48 million for fiscal years 2008 through 2010. 
     This figure is the effective cap on this program. (Section 
     3106)
       The Conference substitute adopts the House provision and 
     adds a provision requiring the Secretary to establish a 
     project in Malawi under this program (Section 3105).
     (5) McGovern-Dole International Food for Education and Child 
         Nutrition Program
       The House bill extends the program through 2012, requires 
     the Secretary of Agriculture to carry out the program, and 
     provides mandatory funds of: $0 for fiscal year 2008; 
     $140,000,000 for fiscal year 2009; $170,000,000 for fiscal 
     year 2010; $230,000,000 for fiscal year 2011; $300,000,000 
     for fiscal year 2012; and $0 for fiscal year 2013. (Section 
     3005)
       The Senate amendment establishes the U.S. Department of 
     Agriculture as the permanent home for this program and 
     reauthorizes the program through fiscal year 2012. Up to $300 
     million may be appropriated annually to fund this program. 
     (Section 3107)
       The Conference substitute adopts the Senate provision, 
     except it provides $84 million in mandatory money for this 
     program for fiscal year 2009, to be available until expended 
     (Section 3106).
     (6) Bill Emerson Humanitarian Trust
       The House bill extends the Bill Emerson Humanitarian Trust 
     through 2012. (Section 3006)
       The Senate amendment specifies that the Trust can be held 
     as a combination of commodities and cash, not to exceed the 
     equivalent of 4 million metric tons and allows the 
     commodities to be exchanged for funds available under Title 
     II or the McGovern-Dole program. The Secretary may sell 
     commodities in the Trust onto the market if such sales will 
     not disrupt the domestic market. It permits the Secretary to 
     manage the funds held under the Trust to maximize its value.
       The Senate amendment further clarifies the rules under 
     which commodities or funds can be released from the Trust, 
     and defines the term ``emergency'' for the purpose of 
     release. It also clarifies the rules by which the Trust is 
     managed by the Secretary, including specifying that price 
     risks must be managed and allowing the funds held in the 
     Trust to be invested in low-risk short-term securities or 
     instruments. Instructs the Secretary to maximize the value of 
     the Trust and instructs the Secretary to transfer saved 
     storage costs back to the Trust from the CCC. The Senate 
     amendment replaces the word ``replenish'' with the word 
     ``reimburse'' throughout the language, reinforcing the notion 
     that resources can be held through cash as well as 
     commodities under this program. The program is reauthorized 
     through fiscal year 2012. (Section 3201)
       The Conference substitute adopts the Senate provision, with 
     the following modifications: it removes the 4 million ton cap 
     entirely, and no longer allows the Secretary to engage in 
     futures market transactions with funds in the Trust. It also 
     does not allow the exchange of funds available under Title II 
     or the McGovern-Dole International Food for Education and 
     Child Nutrition program, nor require transfer of foregone 
     storage charges into the Trust (Section 3201).
       The Managers expect the Trust to be used in a manner that 
     recognizes its unique availability as a resource for food 
     emergencies worldwide. The sale of commodities in the Trust 
     should be undertaken in such a way as to prevent market 
     disruptions and dramatic price fluctuations in the domestic 
     market.
     (7) Technical assistance for specialty crops
       The House bill extends the Technical Assistance for 
     Specialty Crops through fiscal year 2012 and increases 
     funding from $2 million annually to $4 million in 2008, 
     ramping up to $10 million for fiscal years 2011 and 2012. 
     (Section 3007)
       The Senate amendment extends Technical Assistance for 
     Specialty Crops through fiscal year 2012 and increases 
     funding by $19 million over the baseline. (Section 1833)
       The Conference substitute adopts the House provision with 
     annual funding ramped up to $9 million in fiscal years 2011 
     and 2012, and adds a report (Section 3203).

[[Page H3604]]

     (8) Representation by the United States at international 
         standard-setting bodies
       The House bill authorizes the Secretary to enhance U.S. 
     Department of Agriculture staff support for international 
     standard-setting bodies, such as the Codex Alimentarius, the 
     International Plant Protection Convention, and the World 
     Animal Health Organization. (Section 3009)
       The Senate amendment has no comparable provision.
       The Conference substitute strikes this provision.
     (9) Foreign Market Development Cooperator Program (Section 
         702 of the Agricultural Trade Act of 1978)
       The House bill extends the program through fiscal year 
     2012. (Section 3010)
       The Senate amendment increases funding for the Foreign 
     Market Development Program from its current level of $34.5 
     million annually for fiscal year 2007 by $5 million for 
     fiscal years 2008 and 2009, by $10 million in fiscal year 
     2010, and returns to baseline levels in fiscal year 2011. 
     (Section 3105)
       The Conference substitute adopts the House provision 
     (Section 3104).
     (10) Emerging Markets and Facilities Loan Guarantee Program
       The House bill extends the program through fiscal year 
     2012. (Section 3011)
       The Senate amendment reauthorizes the Emerging Markets and 
     Facilities Guarantee Loan Program through fiscal year 2012.
       It permits the Secretary to waive requirements that U.S. 
     goods be used in the construction of a facility under this 
     program, if such goods are not available or their use is not 
     practicable. It also permits the Secretary to provide a 
     guarantee for this program for the term of the depreciation 
     schedule for the facility, not to exceed 20 years. (Section 
     3202)
       The Conference substitute adopts the Senate provision 
     (Section 3204).
     (11) Export Enhancement Program (Section 301 of the 
         Agricultural Trade Act of 1978)
       The House bill extends the program through fiscal year 
     2012. (Section 3012)
       The Senate amendment repeals authority for the program. 
     (Section 3103)
       The Conference substitute adopts the Senate provision 
     (Section 3103).
     (12) Minimum level of nonemergency food assistance
       The House bill provides that of Title II funds, the U.S. 
     Agency for International Development must use at least $450 
     million for non-emergency programs unless Congress provides 
     otherwise with new legislation. (Section 3014)
       The Senate amendment establishes a ``safe box'' for non-
     emergency, development assistance projects under Title II of 
     $600 million annually to be obligated and expended each 
     fiscal year. (Section 3019)
       The Conference substitute adopts the House provision, 
     modified to reflect a phasing in of the safe box level 
     beginning at $375 million in fiscal year 2009 and ending at 
     $450 million in fiscal year 2012. It also provides an 
     exception to the safe box designation, allowed to be 
     exercised only if the President determines that an 
     extraordinary food emergency exists and that resources 
     available from the Bill Emerson Humanitarian Trust have been 
     exhausted, and if the President has submitted a request for 
     additional appropriations to Congress equal to the reduction 
     in safe box and Emerson Trust levels (Section 3022).
     (13) Global Crop Diversity Trust
       The House bill requires the U.S. Agency for International 
     Development to make a contribution on behalf of the United 
     States to the Global Crop Diversity Trust of up to $60 
     million over 5 years. United States contributions be may not 
     exceed one fourth of the total of funds contributed to the 
     Trust from all sources. (Section 3014)
       The Senate amendment requires the U.S. Agency for 
     International Development to make contributions to the Global 
     Crop Diversity Trust to assist in conservation of genetic 
     diversity of key food crops around the world. Appropriations 
     of $60 million are authorized for the period of the fiscal 
     year 2008 through 2012 for this purpose, with a cap equal to 
     25 percent of all funds contributed to the Trust from all 
     sources. (Section 3021)
       The Conference substitute adopts the House provision, with 
     a title change for the section (Section 3202).
     (14) Report on efforts to improve procurement planning
       The House bill requires that not later than 90 days after 
     the date of the enactment the U.S. Agency for International 
     Development and the U.S. Department of Agriculture shall 
     submit to Congress a report on efforts taken to improve 
     planning for food and transportation procurement, including 
     efforts to eliminate bunching of food purchases. (Section 
     3015)
       The Senate amendment has no comparable provision.
       The Conference substitute adopts the House provision 
     (Section 3022).
     (15) International disaster
       The House bill requires that for each of fiscal year 2008 
     through 2012, $40 million of amounts made available to carry 
     out Section 491 of the Foreign Assistance Act of 1961 shall 
     be made available for famine prevention. (Section 3016)
       The Senate amendment authorizes a pilot program for local/
     regional cash purchase. Subsection (a) provides several key 
     definitions for the section. Subsection (b) establishes 
     authority for the pilot program. Subsection (c) establishes 
     the purposes for which the pilot program can be used. 
     Subsection (d) establishes criteria for local or regional 
     procurement. Subsection (e) requires the Administrator to 
     initiate an external review of prior local/regional cash 
     purchase activities by other donor countries, PVO's and 
     intergovernmental organizations within 30 days of enactment. 
     A report detailing the results of this review is also to be 
     provided to the relevant Congressional Committees. This 
     information would be used to assist in developing guidelines 
     for the request for proposals. Subsection (f) authorizes the 
     Administrator to request and approve applications for grants 
     from eligible organizations under this section, and requires 
     any projects authorized under this section to be completed by 
     Sept. 30, 2011, to allow time to complete a study of pilot 
     results before expiration of authorized appropriations in 
     subsection (k). Subsection (g) establishes requirements for 
     specific projects in selecting proposals for grants. 
     Subsection (h) lists information that would need to be 
     included in grant applications. Subsection (i) requires the 
     Administrator to arrange for independent evaluation of the 
     pilot program results, and a report to the relevant 
     Congressional Committees. It also lays out the factors that 
     would have to be examined in the report. Subsection (j) 
     requires the Administrator to promulgate guidelines for the 
     operation of this pilot program. Subsection (k) authorizes 
     appropriations of $25 million for each year between fiscal 
     2009 and fiscal 2011 for this program, to be available until 
     expended. (Section 3014)
       The Conference substitute adopts the Senate provision, 
     modified to provide that the project be conducted by the 
     Secretary with $60 million in mandatory funding between 
     fiscal 2009 and 2012. It establishes requirements for 
     undertaking such activities and requires the Secretary to 
     promulgate rules or guidelines in order to award grants or 
     cooperative agreements to conduct field-based projects using 
     local or regional procurement. It also requires entities 
     receiving grants or entering into agreements under this 
     section to provide data about market parameters and 
     methodologies used to acquire eligible commodities locally or 
     regionally, intended to be used to evaluate the effectiveness 
     of local or regional procurement (Section 3206).
     (16) Importation of agricultural products made with child 
         labor
       The Senate amendment requires the Secretary of Agriculture, 
     in cooperation with the Secretary of Labor, to develop 
     standards that importers of agricultural products into the 
     United States could choose to use to certify that those 
     products were not produced with the use of abusive forms of 
     child labor. (Section 3104)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision, 
     modified to establish a consultative group of interested 
     stakeholders charged with developing recommendations on 
     practices that would enable companies to monitor and verify 
     whether the food products they import are made with the use 
     of child or forced labor. Guidelines developed from these 
     recommendations would be released after a public comment 
     period (Section 3205).
       The Managers strongly support efforts to reduce and 
     eliminate the use of child and forced labor. The Managers 
     expect the Secretary of Agriculture to work with the multi-
     stakeholder Consultative Group to develop the recommendations 
     for best practices for the voluntary, third-party 
     certification initiative that will provide producers, 
     importers, retailers and consumers with reasonable assurances 
     as to what measures have been taken to ensure that the 
     products are not produced with child labor. After the 
     Consultative Group has issued its recommendations, the 
     Managers expect the Secretary to develop guidelines for such 
     best practices and release the guidelines for public comment. 
     The outcome expected by the Managers is a voluntary, third-
     party certification effort is designed to reduce the 
     likelihood that products produced with forced labor or child 
     labor are imported into the United States as directed in the 
     Trafficking Victims Protection Act of 2005.
       The Managers recommend that the Secretary select officials 
     from the Foreign Agricultural Service and the Agricultural 
     Marketing Service to serve on the consultative group as the 
     representatives of the U.S. Department of Agriculture. 
     Additionally, the Managers recommend that the Department of 
     Labor be represented by an individual from the Bureau of 
     International Labor Affairs, and that the Department of State 
     be represented by the Director of the Office to Monitor and 
     Combat Trafficking in Persons of the Department of State.
     (17) Biotechnology and Agricultural Trade Program
       The Senate amendment reauthorizes the Biotechnology and 
     Agricultural Trade Program through 2012. (Section 3203)
       The House bill has no comparable provision.
       The Conference substitute does not include this provision.
     (18) Technical assistance for international trade disputes
       The House bill and the Senate amendment both authorize the 
     Secretary to provide technical assistance for limited 
     resource groups involved in trade disputes. This program is 
     subject to appropriations. (House Section 3008 and Senate 
     Section 3204)

[[Page H3605]]

       The Conference substitute does not include this provision.
       The Managers understand that the U.S. Department of 
     Agriculture currently possesses the authority to provide 
     technical advice, analytical support, and other assistance to 
     help limited resource organizations and others involved in 
     exporting U.S. agricultural commodities. The Managers 
     encourage the U.S. Department of Agriculture to provide such 
     assistance, particularly to entities that both face unfair 
     trading practices and do not possess adequate internal 
     resources to address these practices given the size of their 
     domestic industry or membership. The Department is encouraged 
     to seek appropriations for this purpose as needed.
     (19) Importation of high protein food ingredients
       The Senate amendment requires the Secretary of Health and 
     Human Services to report to Congress on the importation and 
     use of high protein food ingredients. (Section 3206)
       The House bill contains no comparable provision.
       The Conference substitute does not include this provision.
     (20) U.S.-Canada Softwood Lumber Agreement
       The Senate amendment expresses the Sense of the Senate with 
     respect to ensuring that imports of Canadian softwood lumber 
     are consistent with the Softwood Lumber Agreement with 
     Canada. (Section 11093)
       The House bill contains no comparable provision.
       The Conference substitute includes a softwood lumber 
     importer declaration program. The purpose of the program is 
     to assist in the enforcement of any international obligations 
     that the United States and our trading partners assume with 
     respect to trade in softwood lumber and softwood lumber 
     products.
       The Managers are concerned that existing U.S. importer 
     declaration requirements are not sufficient to ensure 
     compliance with such obligations. If the issue is not 
     addressed, imports of noncompliant softwood lumber and 
     softwood lumber products can harm U.S. producers.
       The section amends the Tariff Act of 1930 by adding a new 
     Title VIII, the ``Softwood Lumber Act of 2008''. The Act 
     directs the President to establish a softwood lumber importer 
     declaration program. The program requires U.S. importers of 
     softwood lumber and softwood lumber products to take certain 
     steps to help the United States and its trading partners 
     ensure that trade in these products is consistent with the 
     terms of any relevant international agreement.
       As part of the program, U.S. importers must provide certain 
     information about each shipment of softwood lumber or 
     softwood lumber products at the time the importer files the 
     entry summary documentation. The importer must also declare 
     that the importer has made appropriate inquiries about the 
     shipment and that, to the best of the importer's knowledge 
     and belief, the imports of softwood lumber are consistent 
     with certain terms of any relevant international agreement 
     entered into by the country of export and the United States. 
     The Act requires the Secretary of the Treasury to reconcile 
     the transaction-specific information provided by the U.S. 
     importer with transaction-specific information provided by 
     the country of export to the United States, if any. Such 
     reconciliation is to include any revised transaction-specific 
     export prices provided by the country of export. The 
     Secretary of the Treasury must also periodically verify the 
     accuracy of the importer declarations. The Act provides for 
     the assessment of penalties against any person who knowingly 
     violates the Act. The Act, however, holds harmless importers 
     who have made appropriate inquiries and who maintain and 
     produce substantiating documentation.
       The Managers intend that the requirement for the importer 
     to provide the estimated export charges, if any, is meant to 
     apply to export charges estimated to be due at the time of 
     shipment, recognizing that the exporter's final liability 
     could increase or decrease at the time of final assessment.
       The Managers intend that, in implementing the program, the 
     President or his designee avoid placing an unnecessary burden 
     on U.S. importers. In this respect, the Managers note that 
     the statutory language creating the program neither includes 
     nor references any authority for the President or his 
     designee to establish user fees, processing fees, or any 
     other fees of any kind. It is the intention of the Managers 
     that any expenses associated with the administration of this 
     program be covered with appropriated funds.
       The Managers intend that this program meet all bilateral 
     and multilateral obligations of the United States, including 
     adherence to international rules and procedures regarding 
     trade in softwood lumber. The Managers intend the program to 
     be consistent with U.S. obligations under the Uruguay Round 
     Agreements, including the General Agreement on Tariffs and 
     Trade 1994, and any other bilateral or multilateral trade 
     agreements to which the United States is a Party.
       The Managers recognize the subject matter set forth in the 
     Act falls under the jurisdiction of the Committee on Finance 
     of the Senate and the Committee on Ways and Means of the 
     House of Representatives.

                      TITLE IV--NUTRITION PROGRAMS

     (1) Renaming the Food Stamp Program
       The House bill amends the Food Stamp Act of 1997 (FSA) by 
     renaming the Food Stamp Program the Secure Supplemental 
     Nutrition Assistance Program (SSNAP). Conforming amendments 
     are made to other laws, documents, and records that reference 
     either the Food Stamp Act or Food Stamp Program. (Section 
     4001)
       The Senate amendment amends the short title of the FSA by 
     renaming the Act the Food and Nutrition Act of 2007. It 
     amends the renamed Food and Nutrition Act of 2007 to change 
     the term ``food stamp program'' each place it appears to 
     ``food and nutrition program''.
       The Senate amendment also makes conforming amendments to 
     other laws that reference the Food Stamp Act/program. 
     (Section 4001, Section 4909)
       The Conference substitute adopts the Senate provisions with 
     an amendment to rename the Food Stamp Program as the 
     ``Supplemental Nutrition Assistance Program'' and to 
     incorporate these changes into section 4001; and to 
     incorporate technical changes and conforming amendments 
     necessary to reflect the new title of the program and Act 
     into section 4002. (Section 4001; Section 4002)
     (2) Definition of Drug Addition or Alcoholic Treatment and 
         Rehabilitation Program
       The House bill amends section 3(f) of the FSA by mandating 
     that drug addiction or alcoholic treatment and rehabilitation 
     programs meet the FSA's definition regarding such programs if 
     the State Title XIX agency certifies that: the program is 
     eligible to receive funds under Part B of Title XIX of the 
     Public Health Service Act (even if no funds are being 
     received); or is operating to further the purposes of Part B.
       This section also provides that nothing in the FSA's 
     definition of a drug addiction or alcoholic treatment and 
     rehabilitation program is to be construed as requiring State 
     or Federal licensure. (Section 4002)
       The Senate amendment has no comparable provision.
       The Conference substitute deletes the House provision.
     (3) Nutrition education
       The House bill amends section 4(a) of the FSA by 
     authorizing the Secretary, subject to appropriated funds, to 
     administer the food stamp nutrition education program to 
     eligible households.
       Section 11(f) of the FSA is amended by specifically giving 
     State agencies the discretion to implement nutrition 
     education programs that promote healthy food choices that are 
     consistent with the Dietary Guidelines for individuals who 
     receive, or are eligible to receive program benefits.
       States are given the discretion to deliver nutrition 
     education directly to eligible recipients through agreements 
     with the Cooperative State Research, Education and Extension 
     Service and other State and community health and nutrition 
     providers and organizations.
       States wishing to provide nutrition education must submit a 
     plan that identifies the uses of the funding for local 
     projects and conforms to standards set forth by the Secretary 
     in regulations or guidance.
       States must, whenever practicable, notify applicants, 
     participants, and eligible program participants of the 
     availability of nutrition education.
       The federal matching funds requirement is continued. 
     (Section 4003)
       The Senate amendment is the same as the House bill, with 
     technical differences. (Section 4213)
       The Conference substitute adopts the Senate provision. 
     (Section 4111)
     (4) Food distribution on Indian reservations
       The House bill amends section 4 of the FSA by permitting 
     the distribution of commodities, with or without the Secure 
     Supplemental Nutrition Assistance Program, on Indian 
     reservations whenever a request is made for concurrent or 
     separate food program operations by a tribal organization.
       Tribal organizations are permitted to be responsible for 
     the commodity distribution, should the Secretary determine 
     that they are capable of doing so. The prohibition from 
     approving plans that permit households to simultaneously 
     participate in the SSNAP and FDPIR programs is continued.
       An appropriation of $5,000,000 is authorized for fiscal 
     years 2008 through 2012 for a traditional and local foods 
     fund to distribute traditional and locally-grown 
     foods, designated by region, on Indian reservations. At 
     least 50 percent of the food distributed through the fund 
     must be produced by Native American farmers, ranchers, and 
     producers.
       The Secretary is required to submit a report to Congress on 
     the FDPIR food package. The report is to include: a 
     description of the process for determining the contents of 
     the food package; the extent to which the package conforms to 
     the 2005 Dietary Guidelines for Americans; the extent to 
     which the food package addresses nutritional and health 
     challenges specific to Native Americans and the nutritional 
     needs of Native Americans; and plans to revise the food 
     package (or any rationale for not revising it). (Section 
     4004)
       The Senate amendment is similar to the House bill with 
     technical differences but: (1) provides that, subject to the 
     availability of appropriations, the Secretary may purchase 
     bison meat for distribution through FDPIR, and (2) requires 
     the Secretary to survey participants to determine which 
     traditional foods are most desired. (Section 4501)
       The Conference substitute adopts the Senate provision with 
     amendments to require that, where practicable, at least 50 
     percent of the food distributed through the traditional

[[Page H3606]]

     and locally grown foods fund be produced by Native American 
     farmers, ranchers, and producers, and to require a report 
     describing the activities carried out under the traditional 
     and locally grown foods fund. (Section 4211)
     (5) Excluding combat related pay from countable income
       The House bill amends section 5(d) of the FSA by 
     specifically excluding combat-related military pay when 
     determining income for program eligibility and benefits. 
     (Section 4005)
       The Senate amendment is the same as the House bill, with 
     technical differences. (Section 4101)
       The Conference substitute adopts the Senate provision with 
     an amendment to specify that the exclusion of combat-related 
     military pay becomes effective on October 1, 2008. (Section 
     4101)
     (6) Increasing the standard deduction
       The House bill amends section 5(e)(1) of the FSA by 
     increasing the minimum standard deduction and indexing it for 
     inflation as measured by the Consumer Price Index (CPI-U).
       The minimum standard deduction is raised to:
       $145 (for the 48 contiguous States and the District of 
     Columbia);
       $248 (for Alaska);
       $205 (for Hawaii);
       $128 (for the Virgin Islands); and
       $291 (for Guam).
       The alternative minimum of 8.31 percent of the poverty 
     guidelines is not changed.
       On October 1, 2008 (and each October thereafter) the 
     minimum dollar-denominated standard deductions (noted above) 
     would be adjusted by the CPI-U change (for all items other 
     than food) over the 12 months ending the previous June 30th 
     (and rounded down to the nearest whole dollar). (Section 
     4006)
       The Senate amendment amends section 5(e)(1) to increase the 
     minimum standard deduction and index it for inflation as 
     measured by the CPI-U.
       The minimum standard deduction is raised to:
       $140 (for the 48 contiguous States and the District of 
     Columbia);
       $239 (for Alaska);
       $197 (for Hawaii);
       $123 (for the Virgin Islands); and
       $281 (for Guam).
       As in the House bill, the alternative minimum of 8.31% of 
     the poverty guidelines is not changed, and the amounts 
     specified for the standard deduction would be adjusted for 
     annual changes in the CPI-U and rounded down. (Section 4102)
       The Conference substitute adopts the Senate provision with 
     an amendment to increase the minimum standard deduction to:
       $144 (for the 48 contiguous States and the District of 
     Columbia);
       $246 (for Alaska);
       $203 (for Hawaii);
       $127 (for the Virgin Islands); and
       $289 (for Guam).
       The Conference substitute indexes these amounts for 
     inflation as measured by the CPI-U, rounded down and 
     specifies that these increases become effective on October 1, 
     2008. (Section 4102)
     (7) Deducting dependent care expenses
       The House bill amends section 5(e)(3) of the FSA by 
     removing the caps on dependent care deductions. (Section 
     4007)
       The Senate amendment is the same as the House bill.
       The Conference substitute adopts the House provision with 
     an amendment to make the removal of the caps on dependent 
     care deductions effective on October 1, 2008. (Section 4103)
     (8) Adjusting countable resources for inflation
       The House bill amends section 5(g) of the FSA by requiring 
     that the resource (asset) dollar limits for SSNAP households 
     be indexed. Limits are to be indexed annually for inflation 
     (measured by the CPI-U) and adjusted to the nearest $100. 
     (Section 4008)
       The Senate amendment amends section 5(g) by increasing the 
     dollar limits on financial resources that an eligible 
     household may own to $3,500 (or $4,500 for households with 
     elderly or disabled members), and requiring that they be 
     indexed annually for inflation (measured by the CPI-U) 
     rounded down and adjusted down to the nearest $250. (Section 
     4101(a))
       The Conference substitute adopts the Senate provision with 
     amendments to specify that the existing asset dollar limits 
     be indexed annually for inflation as measured by the CPI-U 
     and adjusted down to the nearest $250, to specify that such 
     policy become effective on October 1, 2008, and to make other 
     technical changes. (Section 4104)
     (9) Excluding education accounts from countable income
       The House bill amends section 5(g) of the FSA by excluding 
     tax-qualified education savings as countable financial 
     resources. (Section 4009)
       The Senate amendment is the same as the House bill, with 
     technical differences. (Section 4104(c))
       The Conference substitute adopts the Senate provision with 
     an amendment to specify that such exclusions become effective 
     on October 1, 2008, and to make other technical changes. 
     (Section 4104)
     (10) Excluding retirement accounts
       The House bill amends section 5(g) of the FSA by excluding 
     all tax-qualified retirement accounts/savings as countable 
     financial resources. (Section 4010)
       The Senate amendment is the same as the House bill with 
     technical differences. (Section 4104(b))
       The Conference substitute adopts the Senate provision with 
     an amendment to specify that such exclusions become effective 
     on October 1, 2008; and to make other technical changes. 
     (Section 4104)
     (11) Simplified reporting
       The Senate amendment amends section 6(c)(1) to allow States 
     to require periodic reporting of changes in household 
     circumstances (as opposed to reporting changes when they 
     occur) by households with elderly/disabled members, migrant/
     seasonal farmworker households, and households in which all 
     members are homeless. This provision limits the frequency 
     with which these households must report changes (other than 
     changes whereby they exceed the program's gross monthly 
     income eligibility limits). Elderly/disabled households with 
     no earned income are required to report no more often than 
     once a year; migrant/seasonal farmworker and homeless 
     households could be required to report no more often than 
     once every 4 months. (Section 4105)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to specify that the simplified reporting policy 
     change becomes effective on October 1, 2008. (Section 4105)
     (12) Deobligate food stamp coupons
       The House bill amends the FSA by prohibiting States from 
     issuing coupons, stamps, certificates or authorization cards, 
     effective upon enactment of the Farm Bill.
       The House bill provides that, effective one year after 
     enactment of this Act, only Electronic Benefit Transfer (EBT) 
     cards will be eligible for exchange at retail food stores 
     that participate in the SSNAP.
       The House bill also provides that coupons will no longer be 
     an obligation of the Federal government, effective one year 
     after enactment of the Farm Bill, thereby requiring that 
     coupons be redeemed within that one-year period. (Section 
     4011)
       The Senate amendment is similar to the House bill with 
     technical differences but: (1) directs the Secretary to 
     require a state agency to issue or deliver benefits using 
     alternative methods if the Secretary determines, in 
     consultation with the Inspector General, that it would 
     improve the integrity of the food and nutrition program; and 
     (2) provides that no interchange fees shall apply to 
     electronic benefit transfer transactions under the food and 
     nutrition program. It also makes necessary conforming 
     amendments as in the House bill. (Section 4202, 4001)
       The Conference substitute adopts the Senate provision with 
     amendments to strike the study relating to the use of program 
     benefits and to make other technical changes. While this 
     provision does generally prohibit the use of coupons in the 
     Supplemental Nutrition Assistance Program (SNAP), it is not 
     the Managers' intention to prohibit States from issuing 
     benefits in a form other than EBT cards as part of efforts 
     through SNAP to provide food assistance to eligible 
     individuals affected by a disaster. (Section 4115)
     (13) Eligibility for single unemployed adults
       The Senate amendment amends section 6(o) to lengthen the 
     eligibility period for ABAWDs who are not working or in an 
     employment/training or workfare program to 6 months in every 
     36-month period.
       The Senate amendment eliminates the current provision of 
     law under which an ABAWD who gains eligibility by meeting one 
     of the 3 work-related tests, but subsequently fails to meet 
     any of them, may remain eligible for an added 3 months. 
     (Section 4107)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision.
     (14) Transitional benefits
       The Senate amendment amends section 11(s) to permit States 
     to provide transitional food assistance benefits to 
     households with children that cease to receive cash 
     assistance under a state-funded public assistance program. 
     (Section 4108)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to make the transitional benefits policy change 
     effective on October 1, 2008. (Section 4106)
     (15) Allow for the accrual of benefits
       The House bill amends section 7(i) of the FSA by 
     authorizing States to establish procedures for recovering 
     electronically issued benefits from a household due to 
     inactivity in the household's EBT account.
       The House bill provides States with the discretion to 
     recover benefits if an EBT account has been inactive for: (1) 
     3 months during which it continuously had a balance greater 
     than $1,000 (adjusted for inflation); or (2) 12 months, 
     whichever is less.
       The House bill also provides that a household whose 
     benefits are recovered must receive notice, and have its 
     benefits made available again, upon request not less than 12 
     months after the recovery of the benefits. (Section 4012)
       The Senate amendment amends section 7(i) of the FSA to (1) 
     require that States establish procedures for recovering 
     electronically issued benefits from inactive benefit accounts 
     and allow them to store recovered benefits off-line if the 
     household has not

[[Page H3607]]

     accessed the account after 6 months and (2) require States to 
     expunge benefits that have not been accessed by a household 
     for 12 months.
       States would also be required to notify households of 
     stored benefits and make them available not later than 48 
     hours after a household's request. (Section 4106)
       The Conference substitute adopts the Senate provision. 
     (Section 4114)
     (16) Increasing the minimum benefit
       The House bill amends section 8(a) of the FSA by increasing 
     the amount of the minimum benefit for 1 and 2-person 
     households to 10 percent of the inflation-indexed ``Thrifty 
     Food Plan'' for a 1-person household. (Section 4013)
       The Senate amendment is the same as the House bill except 
     that the effective date is stipulated as October 1, 2008.
       The Conference substitute adopts the House provision with 
     an amendment to specify that the minimum benefit shall be 
     equal to 8 percent of the maximum benefit for a household of 
     one, and to make the increase in the minimum benefit 
     effective on October 1, 2008. The Managers understand that 
     the Thrifty Food Plan changes on a monthly basis, and expect 
     that the minimum benefit, as amended by this provision, will 
     be calculated on an annual basis. (Section 4107)
     (17) State option for telephonic signature
       The House bill amends Section 11(e)(2)(C) of the FSA by 
     authorizing State agencies to establish a system for 
     applicant households to sign an application by providing a 
     recorded, verbal assent over the telephone.
       The system must record the applicant's verbal assent, as 
     well as the information to which the assent was given. The 
     State system is required to include safeguards against 
     impersonation and identity theft.
       The provision specifies that a household's right to apply 
     for food stamps in writing not be precluded.
       The provision further specifies that if there are any 
     errors in the application, the applicant must return a copy 
     of the application with instructions for correcting such 
     errors.
       Applicants must satisfy all the requirements associated 
     with a written signature on an application to ensure that the 
     verbal assent triggers the effective date of the submission 
     of the application. (Section 4014)
       The Senate amendment is the same as the House bill with 
     technical differences.
       The Conference substitute adopts the Senate provision. 
     (Section 4119)
     (18) Technical clarification regarding eligibility
       The Senate amendment amends section 6(k) to require that 
     the Secretary establish procedures to ensure that States use 
     consistent procedures that disqualify individuals whom law 
     enforcement authorities are actively seeking for the purpose 
     of holding criminal proceedings. (Section 4201)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 4112)
     (19) Split issuance
       The Senate amendment amends section 7(h) to require that 
     any method for staggering the issuance of benefits throughout 
     a month not include splitting any household's monthly benefit 
     into multiple issuances--unless a benefit correction is 
     necessary. (Section 4203)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision. The 
     Managers recognize that there may be situations in which 
     individuals that leave a group home before the end of the 
     month will still be eligible to receive program benefits. The 
     Managers intend that, in such a situation, the Secretary 
     interpret the term ``benefit correction'' to allow a second 
     issuance of program benefits in a month. (Section 4113)
     (20) Privacy protection
       The Senate amendment amends section 11(e)(8) to clarify 
     rules pertaining to the disclosure of information obtained 
     from applicant households. The provision bars use of this 
     information by persons having access for any purpose other 
     than program administration/enforcement activities, and also 
     makes clear that applicants' information may be used to 
     comply with requirements for certifying schoolchildren as 
     eligible for free school meals based on their family's 
     eligibility for food and nutrition assistance program 
     benefits (Section 4205)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 4120)
     (21) Civil rights compliance
       The Senate amendment amends section 11(c) to specify in law 
     that administration of the program must be consistent with 
     the rights of households under the Age Discrimination Act, 
     section 504 of the Rehabilitation Act, the Americans with 
     Disabilities Act, and title VI of the Civil Rights Act. 
     (Section 4207)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 4117)
     (22) Employment and training
       The Senate amendment amends section 6(d)(4) to include--as 
     an eligible employment and training program activity--job 
     retention services provided (for up to 90 days after securing 
     employment) to individuals who have received other 
     employment/training services under the program.
       The Senate amendment also modifies section 6(d)(4) to 
     permit individuals voluntarily participating in employment 
     and training programs to participate beyond the required 
     maximum of 20 hours a week (or a number of hours based on 
     their benefit divided by the minimum wage). (Section 4208)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to make the changes authorized by this provision 
     effective on October 1, 2008. (Section 4108)
     (23) Codification of access rules
       The Senate amendment amends section 11(e)(1) to clarify 
     that States must comply with the Secretary's regulations 
     requiring the use of appropriate bilingual personnel and 
     materials. (Section 4209)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 4118)
     (24) Expanding the use of EBT at farmers markets
       The Senate amendment requires the Secretary to make grants 
     to carry out projects to expand the number of farmers' 
     markets that accept Food and Nutrition program electronic 
     benefit transfer (EBT) cards. Grants may not be made for 
     ongoing costs and may only be provided to entities that 
     demonstrate a plan to continue to provide EBT card access. 
     Mandatory funding of $5 million is provided for these grants. 
     (Section 4210)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision. 
     Language incorporating the goals and objectives of the Senate 
     provision appears in Section 10106 of the Horticulture and 
     Organic Agriculture title.
     (25) Review of major changes in program design
       The House bill amends section 11(e)(6) of the FSA by 
     specifying that only State agency Merit System employees are 
     authorized to:
       (1) represent the State in any communications with 
     prospective food stamp applicants, food stamp applicants, or 
     recipient households regarding their application or 
     participation in the food stamp program;
       (2) participate in making determinations regarding a 
     household's compliance with the requirements of the FSA or 
     its implementing regulations; or
       (3) make any other determinations required under this 
     section.
       The provision specifies that non-profit agencies that 
     assist low-income individuals and households in applying for 
     SSNAP benefits by helping the individuals and households 
     complete and submit applications are exempted. The non-profit 
     exemption applies to general application assistance, which is 
     currently allowed as a food stamp outreach activity, and 
     specialized projects that are operating under a waiver of the 
     FSA and its implementing regulations.
       State agencies are not prohibited from contracting for 
     automated systems or issuance services or for assistance in 
     verifying an applicant's identity.
       Funds from any appropriations act are prohibited from being 
     used for implementing or continuing any contract that fails 
     to meet the specifications regarding State Merit System 
     employees.
       State agencies are prohibited from using Federal funds to: 
     (1) perform or carry out contracts that fail to comply with 
     the specifications regarding Merit System employees; or (2) 
     pay any cost associated with the termination, breach, or full 
     or partial abrogation of any contact that does not comply 
     with the specifications regarding State Merit System 
     employees.
       State agencies are prohibited from conducting projects that 
     fail to comply with the specifications regarding State agency 
     Merit System employees.
       State agencies are prohibited from privatizing food stamp 
     eligibility determinations via the simplified food stamp 
     program.
       The Secretary of Agriculture may authorize a State agency, 
     on a temporary basis, to use non-Merit State employees to 
     determine eligibility for a disaster SSNAP program.
       States have 120 days to bring any activities inconsistent 
     with this section into compliance. (Section 4015)
       The Senate amendment amends section 11(a) to clarify State 
     responsibility for program administration (including cases 
     where the program is operated on a state or locally-
     administered basis) and to require that program records kept 
     to determine whether the State is in compliance with the Act/
     regulations, that such records be available for review in any 
     action filed by a household to enforce the Act/regulations, 
     and to specify that inspection and audit requirements are 
     subject to privacy requirements contained elsewhere in the 
     Food and Nutrition Act.
       The provision also amends section 11(a) to require the 
     Secretary to develop standards for identifying major changes 
     in State agency operations--such as substantial increases in 
     reliance on automated systems, or potential increases in 
     administrative burdens placed on applicant or recipient 
     households. It further mandates that, if a State implements a 
     major change in operations, it must notify the Secretary and 
     collect any information the Secretary needs to identify and 
     correct any adverse effects on program integrity or access. 
     (Section 4211)

[[Page H3608]]

       The Conference substitute adopts the Senate provision. 
     (Section 4116)
     (26) Preservation of access and payment accuracy
       The Senate amendment amends section 16(g) of the FSA to 
     require that computerized systems for State program 
     operations receiving federal matching payments must (1) be 
     tested adequately before and after implementation (including 
     through pilot projects evaluated by the Secretary), and (2) 
     be operated under a plan for continuous updating (to reflect 
     changed policy and circumstances) and testing (for effects on 
     households and payment accuracy). (Section 4212)
       The House bill has no comparable provision.
       The Conference substitute accepts the Senate provision. 
     (Section 4121)
     (27) Grants for simple application and eligibility 
         determination systems and improved access to benefits
       The House bill provides no changes to the Secretary's 
     authority to make grants and amends section 11(t)(1) of the 
     FSA by extending the grant program through Fiscal Year 2012.
       The Senate amendment amends section 11(t) of the Food and 
     Nutrition Act to permanently extend the authority provided 
     under that section. (Section 4801)
       The Conference substitute adopts the Senate provision with 
     an amendment to make technical changes and to link the 
     authority for grants for simple application and eligibility 
     determination systems and improved access to benefits to the 
     availability of appropriations provided through section 18(a) 
     of the Supplemental Nutrition Assistance Program (SNAP). The 
     language for this provision is incorporated into a single 
     section reauthorizing SNAP and other domestic nutrition 
     assistance programs. (Section 4406)
     (28) Civil money penalties and disqualification of retail 
         food stores and wholesale food concern
       The House bill amends section 12 of the FSA by increasing 
     the civil money penalties for retail stores and wholesale 
     food concerns to $100,000 for each violation of the FSA or 
     its regulations. The requirement that a determination as to 
     the assessment of civil money penalties be based on whether 
     there would be hardship for recipient households is removed.
       The provision stipulates that the period of 
     disqualification:
       (1) for a first violation is not to exceed 5 years; and
       (2) for a second violation is not to exceed 10 years.
       The provision does not change the permanent 
     disqualification rules, or other requirements, governing 
     applications containing false information.
       The House bill requires the Secretary, in consultation with 
     USDA's Inspector General, to establish procedures whereby 
     participating food concerns may be immediately suspended for 
     ``flagrant violations,'' pending administrative and judicial 
     appeal. Unsettled benefit claims would be subject to 
     forfeiture--or returned to the food concern if the 
     disqualification action is not upheld (without interest). 
     (Section 4017)
       The Senate amendment is the same as the House bill, with 
     technical differences. It also amends section 12 to generally 
     ease the conditions under which bonds are required of 
     violating food concerns wishing to be re-approved for 
     participation. The Secretary would be permitted to require 
     bonds from food concerns disqualified for 180+ days (or 
     subjected to a civil money penalty in lieu of a 180+ day 
     disqualification). Bonds could be required for a period of 
     not more than 5 years. Where a food concern has been 
     sanctioned and commits a subsequent violation, the Secretary 
     may require a collateral bond or irrevocable letter of credit 
     regardless of the length of the disqualification period. 
     (Section 4303)
       The Conference substitute adopts the Senate provision with 
     an amendment to make technical changes. (Section 4132)
     (29) Major systems failures
       The House bill provides that no changes are made to the 
     methods by which a State agency is authorized to collect 
     overissuances of coupons.
       The prohibition on the amount of the reduction in a 
     household's monthly allotment that a State agency is allowed 
     to collect in the instance where overissuance of coupons has 
     occurred is continued.
       Section 13(b) of the FSA is amended by providing the 
     Secretary with the discretion to determine that a State 
     agency has overissued benefits to a substantial number of 
     households as the result of a ``major systemic error'' by the 
     State.
       A State agency is given the option to appeal the 
     Secretary's determination. However, if the State agency fails 
     to appeal the Secretary's determination, or, in the case of 
     an appeal, if the State agency is held liable, the State 
     agency is required to reimburse to the Secretary the amount 
     for which the State agency is liable.
       The Secretary is authorized to prohibit, upon making a 
     determination that over-issuances have occurred, the State 
     agency from collecting the over-issuances from some or all of 
     the affected households. (Section 4018)
       The Senate amendment is the same as the House bill, with 
     technical differences.
       The Conference substitute adopts the House provision. The 
     Managers have provided the Secretary with discretionary 
     authority to determine when it is appropriate to prohibit a 
     State agency from collecting overissuances from households 
     that have been affected by a major system failure. In certain 
     instances, it may be appropriate for the Secretary to allow 
     the State to collect overissuances from households. The 
     Managers expect that the Secretary will exercise this 
     authority judiciously, and further expect that in 
     circumstances where a major systems failure is attributable 
     to a specific and deliberate action by the State, that states 
     will not be allowed to pass along the costs associated with 
     such systems failures to households. (Section 4133)
     (30) Funding for employment and training programs
       The House bill provides no program changes. The funding 
     level remains the same and is extended for each of the fiscal 
     years 2008 through 2012. (Section 4019)
       The Senate amendment amends section 16(h)(1) to limit the 
     time unspent unmatched federal funding for employment and 
     training program expenses may remain available to 2 years (as 
     opposed to until expended). Also rescinds unspent employment 
     and training program funds for any fiscal year before fiscal 
     year 2008. It also provides permanent authorization for 
     funding of employment and training programs. (Section 4304; 
     Section 4801)
       The Conference substitute adopts the Senate provisions with 
     amendments to allow funds to remain available for 15 months 
     rather than two years, to strike the requirement that any 
     unobligated employment and training funds be rescinded, and 
     to link the authority for funding for employment and training 
     programs to the availability of appropriations provided 
     through section 18(a) of the Supplemental Nutrition 
     Assistance Program (SNAP). The language from subsection (b) 
     of section 4801 of the Senate amendment is incorporated into 
     a single section reauthorizing SNAP and other domestic 
     nutrition assistance programs. (Section 4122)
     (31) Reductions in payments for administrative costs
       The House bill amends section 16(k) of the FSA by extending 
     the requirement to reduce State administrative cost payments 
     through fiscal year 2012. (Section 4020)
       The Senate amendment amends section 16(k) to permanently 
     extend the requirement to reduce State administrative cost 
     payments. (Section 4801)
       The Conference substitute adopts the Senate provision with 
     an amendment to make technical changes. The language for this 
     provision is incorporated into a single section reauthorizing 
     SNAP and other domestic nutrition assistance programs. 
     (Section 4406)
     (32) Performance standards for bio-metric identification 
         technology
       The Senate amendment amends section 16 of the FSA to 
     establish the conditions under which the Secretary may pay 
     States the federal share (50%) of costs associated with the 
     acquisition and use of biometric identification technology 
     (e.g., fingerprints, retinal scans). In order to gain federal 
     cost-sharing, States must provide a statistically valid and 
     otherwise appropriate analysis of the cost effectiveness of 
     using biometric identification technology to detect program 
     fraud, demonstrate that the proposed technology is cost 
     effective in reducing fraud and that no other fraud-detection 
     methods are at least as cost-effective, and demonstrate that 
     the system will comply with privacy protection rules. 
     (Section 4302)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision.
     (33) Cash payment pilot projects
       The House bill amends section 17(b)(1)(B)(vi) of the FSA by 
     extending the authority for cash-payment pilot projects 
     through October 1, 2012. (Section 4021)
       The Senate amendment amends section 17(b)(1)(B)(vi) by 
     permanently extending existing authority for cash-payment 
     pilot projects to households whose members are 65 years old 
     or entitled to SSI benefits. (Section 4801)
       The Conference substitute adopts the Senate provision with 
     an amendment for technical changes. The language for this 
     provision is incorporated into a single section reauthorizing 
     SNAP and other domestic nutrition assistance programs. 
     (Section 4406)
     (34) Findings of Congress regarding Secure Supplemental 
         Nutrition Assistance Program education
       The House bill contains Congressional findings regarding 
     the Food Stamp Program noting that the FSA ``plays an 
     essential role in improving the dietary and physical activity 
     practices of low-income Americans, [by] helping to reduce 
     food insecurity, prevent[ing] obesity, and reduc[ing] the 
     risks of chronic disease.''
       The Secretary is encouraged to support the most effective 
     interventions for nutrition education under the FSA, 
     including public health approaches and traditional education, 
     to increase the likelihood that recipients and potential 
     recipients of benefits under the SSNAP program choose diets 
     and physical activity practices that are consistent with the 
     Dietary Guidelines for Americans. (Section 4022)
       The Senate amendment is the same as the House bill with 
     technical differences.
       The Conference substitute deletes both the House and Senate 
     provisions. The Managers

[[Page H3609]]

     recognize that nutrition education plays an essential role in 
     improving the dietary and physical activity practices of low-
     income individuals in the United States, helping to reduce 
     food insecurity, prevent obesity, and reduce the risks of 
     chronic disease. Expert organizations, such as the Institute 
     of Medicine, indicate that dietary and physical activity 
     behavior change is more likely to result from the combined 
     application of public health approaches and education than 
     from education alone.
       The Managers expect that the Secretary will support and 
     encourage implementation of the most effective methods, 
     informed by current science, for nutrition education under 
     the Food and Nutrition Act, including those that are 
     consistent with recommendations and actions of expert bodies 
     to promote healthy eating and physical activity behavior 
     change. Funds provided under the Food and Nutrition Act 
     should be used for activities that promote the most effective 
     implementation of programs to increase the likelihood that 
     recipients of, and those potentially eligible for, 
     supplemental nutrition assistance program benefits will 
     choose diets and physical activity practices consistent with 
     the Dietary Guidelines for Americans. The Managers recognize 
     that state nutrition education activities under the Food and 
     Nutrition Act work best when coordinated with other federally 
     funded food assistance and public health programs and when 
     policies are implemented to leverage public/private 
     partnerships to maximize the resources and impact of the 
     programs.
     (35) Eligibility disqualification
       The Senate amendment amends section 6 of the FSA to 
     disqualify (for a period determined by the Secretary) persons 
     found by a court or administrative agency to have 
     intentionally obtained cash by misusing program benefits to 
     obtain money for return of deposits on containers. It also 
     modifies section 6 to disqualify (for a period determined by 
     the Secretary) persons found by a court or administrative 
     agency to have intentionally sold any food that was purchased 
     using program benefits. (Section 4305)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision. The 
     Managers do not intend for this provision to include 
     inadvertent de minimis actions such as an individual who 
     purchases a brownie mix with program benefits, then makes 
     brownies and sells them at a school bake sale. (Section 4131)
     (36) Definition of staple foods
       The Senate amendment amends section 3 to (1) add dietary 
     supplements to the list of accessory food items that are not 
     classified as staple foods for the purpose of approving the 
     participation of food concerns in the program, and (2) 
     require the Secretary to issue regulations to ensure that 
     adequate stocks of staple foods are available on a continuous 
     basis in approved food concerns. (Section 4401)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision.
     (37) Accessory food items
       The Senate amendment amends section 9 of the FSA to require 
     that, within 1 year of enactment, the Secretary issue 
     proposed regulations defining dietary supplements: 
     multivitamin-mineral supplements providing prescribed minimum 
     amounts of essential vitamins and minerals that do not exceed 
     prescribed daily upper limits and certain prescribed amounts 
     of folic acid or calcium. Final regulations as to dietary 
     supplements must be issued within 2 years of enactment. No 
     dietary supplements may be purchased with program benefits 
     until the earlier of (1) the date of final regulations with 
     regard to dietary supplements, or (2) the date the Secretary 
     certifies a voluntary system of labeling for identification 
     of eligible dietary supplements. (Section 4402)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision.
     (38) Nutrition education and promotion initiative to address 
         obesity
       The House bill amends section 17 of the FSA by adding a new 
     section that authorizes the Secretary to establish a 
     demonstration program, to be known as the ``Initiative to 
     Address Obesity Among Low-Income Americans,'' to develop and 
     implement strategies to reduce obesity among low-income 
     Americans.
       The Secretary is authorized to enter into competitively 
     awarded contracts, cooperative agreements, or grants with 
     public or private organizations or agencies.
       Agencies are required to submit applications to the 
     Secretary, and the Secretary is to evaluate demonstration 
     proposals using a variety of criteria, including: (1) 
     identifying a low-income target audience that corresponds to 
     individuals living with incomes at or below 185 percent of 
     the poverty level; (2) incorporating scientifically based 
     strategies that are designed to improve diet quality through 
     more healthful food purchases, preparation, or consumption; 
     and (3) a commitment to a demonstration plan that allows for 
     rigorous outcome evaluation, including data collection.
       Projects that limit the use of SSNAP program benefits are 
     prohibited from receiving funding. The Secretary is 
     authorized to use funds to pay costs associated with 
     monitoring, evaluating, and disseminating the Initiative's 
     findings.
       An appropriation of $10,000,000 is authorized for fiscal 
     years 2008 through 2012. No new grants are to be made after 
     September 30, 2012. (Section 4023)
       The Senate amendment amends section 17 to require and fund 
     pilot projects to develop and test methods of using the Food 
     and Nutrition program to improve the dietary and health 
     status of participants and to reduce overweight, obesity, and 
     associated co-morbidities. Among other initiatives, projects 
     may include those providing increased program benefits, 
     increased access to farmers' markets, incentives to 
     participating vendors to increase the availability of healthy 
     foods, adding vendor approval requirements with respect to 
     carrying healthy foods, point-of-purchase incentives to 
     encourage program participants to buy fruits, vegetables, and 
     other healthy foods, and providing integrated communication 
     and education programs (including school-based nutrition 
     coordinators).
       These pilot health and nutrition promotion projects would 
     include independent evaluations and annual reports on their 
     status.
       Mandatory funding of $50 million is provided, and up to $25 
     million must be used for point-of-purchase incentive 
     projects. (Section 4403)
       The Conference substitute adopts the House provision with 
     amendments to specify that the purpose of the section is to 
     carry out pilot projects to develop and test methods for 
     improving the dietary and health status of households in the 
     Supplemental Nutrition Assistance Program, as well as to 
     reduce obesity and other diet-related diseases in the United 
     States; specify the types of pilot projects that the 
     Secretary may consider; include a requirement relating to 
     evaluations and reports of the pilot projects; specify 
     mandatory funding amounts and require that the Secretary use 
     not more than $20 million of that mandatory funding to carry 
     out a point-of-purchase pilot project to encourage households 
     to purchase fruits, vegetables, or other healthy foods. 
     (Section 4141)
     (39) Hunger free communities
       The Senate amendment requires the Secretary to conduct and 
     periodically update a study of major matters relating to 
     hunger in the United States. The study would assess data on 
     hunger and food insecurity and measures that have been 
     carried out or could be carried out to achieve goals of 
     reducing domestic hunger. It also would contain 
     recommendations for removing obstacles to domestic hunger 
     goals and otherwise reducing domestic hunger.
       The Senate amendment authorizes grants to food program 
     service providers and local nonprofit organizations (like 
     emergency feeding organizations) for the federal share (up to 
     80%) of projects that assess community hunger problems and 
     meet, or develop new resources/programs to meet, goals for 
     achieving hunger-free communities.
       The provision authorizes matching grants to emergency 
     feeding organizations for infrastructure development.
       Appropriations of $50 million a year (through fiscal year 
     2012) are authorized. (Section 4405)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     amendments to strike the definition of food security; strike 
     the study and report relating to hunger; specify that not 
     more than 50 percent of the funds made available under this 
     section be used for the federal share of collaborative 
     grants; strike requirements relating to the contents of 
     collaborative grants and priority for eligible entities that 
     meet certain criteria; and to make other technical changes. 
     (Section 4405)
     (40) State performance on enrolling children receiving 
         program benefits for free school meals
       The Senate amendment requires the Secretary to submit 
     annual reports that assess the effectiveness and practices of 
     each State in enrolling school-aged children in households 
     receiving food stamp benefits for free school meals using 
     ``direct certification'' (a current-law procedure allowing 
     children in families receiving program benefits to be deemed 
     automatically eligible for free school meals). (Section 4406)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to add the House Committee on Education and 
     Labor to the list of recipients of the reports produced by 
     the Secretary in accordance with this section. The Managers 
     recognize the time and data constraints for developing the 
     report scheduled to be provided on or before December 31, 
     2008, and expect that this report will include as much data 
     as possible given such constraints. (Section 4301)
     (41) Authorization of appropriations
       The House bill amends section 18(a)(1) of the FSA by 
     reauthorizing appropriations to carry out that Act through 
     2012. (Section 4024)
       The Senate amendment amends section 18(a)(1) of the Food 
     and Nutrition Act by permanently reauthorizing appropriations 
     to carry out the Act. (Section 4801)
       The Conference substitute adopts the Senate provision with 
     an amendment to make technical changes and to extend 
     authority for appropriations to carry out the Supplemental 
     Nutrition Assistance Program

[[Page H3610]]

     (SNAP) through fiscal year 2012. The language for this 
     provision is incorporated into a single section reauthorizing 
     SNAP and other domestic nutrition assistance programs. 
     (Section 4406)
     (42) Consolidated block grants for Puerto Rico and American 
         Samoa
       The House bill amends section 19(a)(2)(A) of the FSA by 
     extending to 2012 the Secretary's authority to provide funds 
     to Puerto Rico and American Samoa to administer their 
     nutrition assistance programs. (Section 4025)
       The Senate amendment amends section 19(a)(2)(A)(ii) of the 
     Food and Nutrition Act by permanently extending the 
     Secretary's authority to provide funds to Puerto Rico and 
     American Samoa to administer their nutrition assistance 
     programs. (Section 4801)
       The Conference substitute adopts the Senate provision with 
     an amendment to make technical changes and to link the 
     authority for consolidated block grants for Puerto Rico and 
     American Samoa to the availability of appropriations provided 
     through section 18(a) of the Supplemental Nutrition 
     Assistance Program (SNAP). The language for this provision is 
     incorporated into a single section reauthorizing SNAP and 
     other domestic nutrition assistance programs. (Section 4406)
     (43) Study on comparable access to nutrition assistance 
         program benefits for Puerto Rico
       The House bill amends section 19 of the FSA by authorizing 
     the Secretary to conduct a study on the feasibility of 
     including Commonwealth of Puerto Rico in the SSNAP program, 
     in lieu of providing Puerto Rico with a block grant.
       The study is to include, among other findings: (a) an 
     assessment of the administrative, financial, and other 
     changes that would be required for Puerto Rico to establish a 
     comparable SSNAP program; (b) a discussion of the appropriate 
     program rules under other sections of the FSA, such as 
     benefit levels, income eligibility standards, and deduction 
     levels for Puerto Rico to establish a comparable SSNAP 
     program; (c) an estimate of the impact on Federal and 
     Commonwealth benefit and administrative costs; and (d) an 
     estimate on the impact of the SSNAP program on hunger and 
     food insecurity among low-income Puerto Ricans. (Section 
     4026)
       The Senate amendment is the same as the House bill (with 
     technical differences), but provides mandatory funding of $1 
     million to conduct the study. (Section 4206)
       The Conference substitute adopts the Senate provision. 
     (Section 4142)
     (44) Reauthorization of community food project competitive 
         grants
       The House bill continues the Secretary's authority to make 
     grants. Section 25 of the FSA is amended by authorizing an 
     appropriation of $30,000,000 a year through fiscal year 2012 
     for community food projects. The eligibility requirements 
     remain unchanged.
       Section 25 of the FSA is amended by expanding the list of 
     preferences for selecting community food projects to include 
     projects that are designed to serve special needs in the 
     areas of: (1) emergency food service infrastructure; (2) 
     retail access to underserved markets; (3) integration of 
     urban and metro-area food production in food projects; and 
     (4) technical assistance for youth, socially disadvantaged 
     individuals, and limited resource groups.
       The Federal share of the cost of establishing or carrying 
     out a community food project is not to exceed 75 percent of 
     the cost of the project during the time of the grant.
       The maximum term of a grant is increased to 5 years.
       No changes are made to the Secretary's authority.
       The Secretary is required to allocate, for each of the 
     fiscal years 2008 through 2012, out of the funds made 
     available to carry out community food projects, $500,000 for 
     the project to address common community problems.
       The Senate amendment amends section 25 of the Food and 
     Nutrition Act to provide $10 million a year in mandatory 
     funding for community food projects, through fiscal year 
     2012.
       The Conference substitute adopts the Senate provision with 
     amendments to authorize the establishment of and provide a 
     grant to the Healthy Food Urban Enterprise Development 
     Center; to provide authority for the Center to provide 
     subgrants to eligible entities for the purpose of carrying 
     out feasibility studies, as well as to establish and 
     facilitate enterprises that process, distribute, aggregate, 
     store, and market healthy affordable foods; to provide 
     mandatory funding of $1,000,000 a year for fiscal years 2009 
     through 2011 for the Center, and to incorporate these changes 
     into section 4402. The Senate provision providing mandatory 
     funding of $5 million a year for the Community Food Projects 
     competitive grants appears in section 4406. (Section 4402; 
     Section 4406)
     (45) Emergency Food Assistance Program
       The House bill amends section 27 of the FSA by increasing 
     the Emergency Food Assistance Program (TEFAP) commodity 
     purchase requirement. In fiscal year 2008, the Secretary is 
     authorized to purchase a total of $250,000,000 in 
     commodities; for fiscal years 2009 through 2012, the dollar 
     amount is to be indexed annually for food-price inflation. 
     (Section 4028)
       The Senate amendment is substantially similar to the House 
     bill with technical differences and without the requirement 
     to index the base amount of $250 million per year. (Section 
     4110)
       The Conference substitute adopts the Senate provision with 
     amendments to increase mandatory funding to $190,000,000 in 
     fiscal year 2008, $250,000,000 in fiscal year 2009 and 
     subsequently indexed for food-price inflation during fiscal 
     years 2010 through 2012. (Section 4201)
     (46) Authorization of appropriations
       The House bill amends section 204(a) of the Emergency 
     Assistance Food Act of 1983 by increasing the authorization 
     of appropriations to $100,000,000 a year, through fiscal year 
     2012. (Section 4201)
       The Senate amendment amends section 204(a) of the Emergency 
     Food Assistance Act by permanently increasing the 
     authorization of appropriations to $100 million a year. It 
     also requires that State TEFAP agencies submit operation and 
     administrative plans every 3 years (as opposed to every 4 
     years under current law) and makes clear that funds may be 
     applied to the cost of administering wild game donations. 
     (Section 4802, 4601)
       The Conference substitute adopts the Senate provisions with 
     amendments to specify that amendments to State operation and 
     administrative plans may be submitted as necessary; and to 
     combine sections 4802 and 4601 into a single section. 
     (Section 4201)
     (47) Distribution of commodities special nutrition projects
       The House bill provides that no changes are made to the 
     mandate encouraging reprocessing agreements, with respect to 
     surplus commodities.
       Section 1114(a)(2)(A) of the Agriculture and Food Act (AFA) 
     is amended by extending, through fiscal year 2012, the 
     requirement for the Secretary to encourage reprocessing 
     agreements. (Section 4202)
       The Senate amendment is the same as House bill with 
     technical differences. (Section 4802)
       The Conference substitute adopts the Senate provision with 
     an amendment for technical changes. The language for this 
     provision is incorporated into a single section reauthorizing 
     the Supplemental Nutrition Assistance Program and other 
     domestic nutrition assistance programs. (Section 4406)
     (48) Commodity distribution program
       The House bill amends section 4(a) of the Agriculture and 
     Consumer Protection Act of 1973 (ACPA) by extending the 
     Secretary's authority through fiscal year 2012.
       Section 5 of the ACPA is amended by extending through 
     fiscal year 2012 the ACPA requirement concerning inflation-
     indexed caseload slot grants.
       Section 5(d)(2) of the ACPA is amended by extending the 
     requirement that the Commodity Credit Corporation (CCC) 
     furnish cheese and nonfat dry milk for the Community 
     Supplemental Food Program (CSFP) through fiscal year 2012.
       Section 5(g) of the ACPA is amended by mandating that local 
     agencies are to use funds made available under the CSFP to 
     provide assistance to low-income elderly individuals, women, 
     infants, and children in need for food assistance in 
     accordance with any regulations the Secretary may prescribe. 
     Conforming amendments are made stipulating that CSFP benefits 
     are available to low-income elderly individuals.
       Section 5 of the ACPA is further amended by requiring the 
     Secretary to establish maximum income eligibility standards 
     for the CSFP that are the same for all applicants. The 
     standards are not to exceed the maximum income limits 
     established for the Special Supplemental Nutrition Program 
     for Women, Infants, and Children (WIC)--i.e., 185 percent of 
     the federal poverty income guidelines. (Section 4203)
       The Senate amendment amends section 4(a) of the ACPA by 
     permanently extending the Secretary's authority to purchase 
     and distribute agricultural commodities for food assistance 
     programs (including the Commodity Supplemental Food Program).
       The Senate amendment permanently extends the ACPA 
     requirement in section 5 for inflation-indexed caseload slot 
     grants, and permits State to serve low-income elderly persons 
     with income up to 185% of the federal poverty income 
     guidelines, if the Secretary determines that annual 
     appropriations have enabled every State seeking to 
     participate in the CSFP to participate.
       Section 4602 bars the Secretary from requiring any State or 
     local CSFP program to prioritize assistance to a particular 
     group of individuals that are low-income elderly persons or 
     women, infants, and children. (Section 4802, 4602)
       The Conference substitute adopts the Senate provisions with 
     amendments to make technical changes to incorporate the 
     reauthorization of the Commodity Supplemental Food Program 
     into Section 4406; incorporate language relating to the 
     prohibition on requiring State or local agencies to 
     prioritize assistance to certain groups of individuals into 
     section 4221. (Section 4406; Section 4221)
       The Managers recognize the importance of the Commodity 
     Supplemental Food Program (CSFP) as a critical nutrition 
     program that serves primarily the vulnerable population of 
     low-income elderly Americans. CSFP provides nutritious food, 
     often in the form of food boxes for home delivery, that are 
     designed to meet the dietary needs of seniors, women, and 
     children in 32 states, two Indian tribal organizations, and 
     the District of Columbia. In fiscal year 2007, 93 percent of 
     the recipients were elderly individuals with an annual income 
     at or below $13,273. CSFP serves a unique niche by providing 
     nutritious commodities to homebound seniors who are at severe 
     risk for hunger.

[[Page H3611]]

       The Managers fully support the continued operation of this 
     program and recognize the need for a substantial expansion of 
     the CSFP. The Managers note that there are five states that 
     have currently been approved by USDA for entry into CSFP 
     (Arkansas, Delaware, Oklahoma, New Jersey and Utah) subject 
     to the availability of appropriations. Provided that 
     sufficient funds are appropriated by Congress, the Managers 
     encourage the Secretary to approve all remaining states for 
     expansion and to expand caseload in all participating states.
     (49) Periodic surveys of foods purchased by school food 
         authorities
       The Senate amendment amends section 6 of the Richard B. 
     Russell National School Lunch Act to require periodic 
     nationally representative surveys of food purchased by 
     schools participating in the school lunch program. It also 
     provides funding of $3 million for each survey. (Section 
     4901)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to provide one-time funding of $3,000,000 to 
     carry out the section. (Section 4307)
     (50) Healthy Food Education and Program replicability
       The Senate amendment amends section 18(i) to provide that 
     sponsored projects may promote healthy food education and 
     that the Secretary must give priority to projects that can be 
     replicated in schools. It also authorizes a new pilot project 
     (at $10 million) in not more than 5 States under which grants 
     are made to ``high-poverty'' schools for initiatives with 
     hands-on gardening. No cost-sharing is required. (Section 
     4903)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to strike the authorization of appropriations to 
     carry out the provision. (Section 4303)
     (51) Purchase of fresh fruits and vegetables for distribution 
         to schools and service institutions
       The House bill amends section 10603 of the Farm Security 
     and Rural Investment Act of 2002 (FSRIA) by increasing the 
     dollar amount of fresh fruits, vegetables and other specialty 
     foods the Secretary must procure for schools and service 
     institutions participating in programs under the National 
     School Lunch Act to at least $50,000,000 a year for each of 
     the fiscal years 2008 and 2009 and $75,000,000 a year for 
     each of the fiscal years 2010 through 2012. As under current 
     law, these amounts may be spent through the Department of 
     Defense (DoD) Fresh Program. (Section 4301)
       The Senate amendment provides that, in lieu of purchases 
     required under Sec. 10603, the Secretary purchase fruits, 
     vegetables, and nuts for use in domestic food assistance 
     programs using Section 32 funds.
       Purchase amounts are set at: $390 million for fiscal year 
     2008, $393 million for fiscal year 2009, $399 million for 
     fiscal year 2010, $403 million for fiscal year 2011, and $406 
     million for fiscal year 2012 and each year thereafter.
       Items purchased may be in frozen, canned, dried, or fresh 
     form.
       The Senate amendment also allows the Secretary to offer 
     value-added products containing fruits, vegetables or nuts 
     after taking into consideration whether demand exists for the 
     value-added product and the interest of entities that receive 
     fruits, vegetables and nuts under this program. (Section 
     4907)
       The Conference substitute adopts the House language with an 
     amendment to retain the current $50 million a year 
     requirement to acquire fresh fruits and vegetables for 
     distribution in accordance with section 6(a) of the Richard 
     B. Russell National School Lunch Act. The Managers expect the 
     purchases of fresh fruits and vegetables previously made 
     through the Department of Defense Fresh Program will continue 
     under an equivalent procurement mechanism. (Section 4404)
     (52) Buy America requirements
       The House bill includes Congressional findings that: (1) 
     Federal law requires that commodities and products purchased 
     with Federal funds be, to the extent practicable, of domestic 
     origin; (2) Federal Buy American statutory requirements seek 
     to ensure that purchases made with Federal funds benefit 
     domestic producers; and (3) the School Lunch Act requires the 
     use of domestic food products for all meals served under the 
     program, including food products purchased with local funds. 
     (Section 4302)
       The Senate amendment is the same as the House bill, with 
     technical differences. (Section 4906).
       The Conference substitute adopts the House provision. 
     (Section 4306)
     (53) Expansion of Fresh Fruit and Vegetable Program
       The House bill amends section 18(f) of the Richard B. 
     Russell National School Lunch Act (NSLA) by expanding the 
     fresh fruit and vegetable program in elementary and secondary 
     schools. Mandatory funding is increased from $9,000,000 to 
     $70,000,000 a year, and the program is to be available 
     nationwide in: (A) 35 elementary and secondary schools in 
     each State; and (B) additional elementary and secondary 
     schools in each State in proportion to the student population 
     of the State.
       The Senate amendment replaces the current fresh fruit and 
     vegetable program, beginning with the 2008-2009 school year. 
     The new program would provide mandatory funding ($225 million 
     in the first year, indexed for inflation in later years) and 
     authorize additional appropriations for a program to make 
     free fresh fruits and vegetables available in participating 
     elementary schools nationwide.
       Participating elementary schools would be selected by 
     States with priority generally given to schools with the 
     highest proportion of children eligible for free or reduced-
     price school meals, those that partner with entities that 
     provide non-federal resources, and those that evidence 
     efforts to integrate the program with other efforts to 
     promote sound health and nutrition, reduce overweight and 
     obesity, or promote physical activity.
       Funding would be allocated among States under a formula 
     distributing roughly half of the funds equally among States 
     and apportioning the remainder based on State population. At 
     least 100 schools chosen to participate must be operated on 
     Indian reservations. Per-student grants would be determined 
     by the State but could not be less than $50, or more than 
     $75, annually.
       An evaluation is required and provided funding of $3 
     million to remain available until expended.
       The Senate amendment changes the final report's due date to 
     December 31, 2012.
       The Secretary is authorized, in selecting schools to 
     participate in the program, to encourage plans for 
     implementation that include locally grown foods.
       The Secretary is required to establish requirements to be 
     followed by States in administering the Fresh Fruit and 
     Vegetable Program--the initial set of requirements must be 
     established not later than 1 year after the enactment.
       The Secretary is allowed to reserve up to 1% of program 
     funding for administrative expenses related to the program. 
     States may use up to 5% of program funding for administrative 
     expenses. (Section 4904)
       The Conference substitute adopts the Senate provision with 
     several amendments. The substitute deletes Senate language 
     allowing a consortia of schools to apply for funding. The 
     substitute includes a new requirement that state agencies 
     administering the program initiate special outreach to 
     schools with significant numbers of children eligible for 
     free or reduced price meals informing them of their 
     eligibility for the program. The substitute includes a new 
     provision to ensure that states currently receiving 
     funding under the program do not see a reduction in their 
     funding as the program is phased in over time. The 
     substitute includes an amendment which allows states to 
     reserve funding for program administration, in accordance 
     with regulations promulgated by the Secretary. And the 
     substitute includes several provisions intended to aid the 
     Secretary as the program transitions from the existing 
     requirements of section 18(f) to the new requirements 
     established by this section. Mandatory funding is provided 
     through section 32 of the Act of August 24, 1935 in the 
     amounts of $40,000,000 on October 1, 2008; $65,000,000 on 
     July 1, 2009; $101,000,000 on July 1, 2010; $150,000,000 
     on July 1, 2011; $150,000,000 indexed for inflation 
     according to the CPI-U on July 1, 2012. (Section 4304)
       It is the intent of the Managers to specifically target 
     available program funding to schools with the highest 
     proportion of children who are eligible for free and reduced 
     price meals, in accordance with (d)(1)(B). Accordingly, the 
     Managers expect that, provided the rest of a school's 
     application is acceptable, that a school with a higher 
     proportion of children eligible for free and reduced-price 
     meals will be selected to participate rather than a school 
     with a lower proportion of children eligible for free and 
     reduced-price meals.
       As the name of the program makes clear, it is the intent of 
     the program to provide children with free fresh fruits and 
     vegetables. It is not the intent of the Managers to allow 
     this program to provide other products, such as nuts, either 
     on their own or comingled with other foods, such as in a 
     trail mix. The Managers support the inclusion of all fruits 
     and vegetables in the federal nutrition programs where 
     supported by science and will continue to work with the 
     Department on promoting access to all fruits and vegetables.
     (54) Purchases of locally produced foods
       The House bill amends section 9(j) of the NSLA by 
     authorizing the Secretary to:
       (1) encourage institutions that receive funds under the 
     NSLA and the Child Nutrition Act (CNA) to purchase, to the 
     maximum extent practicable and appropriate, locally-produced 
     foods;
       (2) advise institutions about the policy related to 
     purchasing locally-produced foods and post information 
     related to this policy on the website maintained by the 
     Secretary; and
       (3) allow institutions receiving funds under the NSLA and 
     the CNA, including the DoD Fruit and Vegetable Program, to 
     use geographic preference in their procurement of locally-
     produced foods. (Section 4304)
       The Senate amendment is the same as the House bill, except 
     that Senate amendment pertains to locally produced fruits and 
     vegetables. (Section 4902)
       The Conference substitute adopts the House provision with 
     an amendment to specify that the Department of Agriculture is 
     required to allow institutions to use a geographic preference 
     for the procurement of unprocessed, locally grown and raised 
     agricultural products. (Section 4302)

[[Page H3612]]

       The Managers do not intend that the Food and Nutrition 
     Service interpret the term ``unprocessed'' literally, but 
     rather intend that it be logically implemented. In specifying 
     the term ``unprocessed,'' the Managers' use of the term 
     intends to preclude the use of geographic preference for 
     agricultural products that have significant value added 
     components. The Managers do not intend to preclude de minimis 
     handling and preparation such as may be necessary to present 
     an agricultural product to a school food authority in a 
     useable form, such as washing vegetables, bagging greens, 
     butchering livestock and poultry, pasteurizing milk, and 
     putting eggs in a carton.
     (55) Seniors Farmers--Market Nutrition Program
       The House bill amends section 4402 of FSRIA by: (1) 
     extending mandatory funding of $15,000,000 for the Senior 
     Farmers' Market Nutrition Program through fiscal year 2012; 
     and (2) authorizing additional appropriations of $20,000,000 
     for fiscal year 2008, $30,000,000 for fiscal year 2009, 
     $45,000,000 for fiscal year 2010, $60,000,000 for fiscal year 
     2011, and $75,000,000 for fiscal year 2012.
       Honey is added to the list of items to be covered by 
     program vouchers.
       The value of benefits provided to eligible Senior Farmers' 
     Market Nutrition Program recipients is prohibited from being 
     considered income or resources for any purposes under any 
     Federal, State or local law. State and local governments are 
     also prohibited from collecting taxes on food purchased with 
     vouchers distributed under the program. (Section 4401)
       The Senate amendment amends section 4402 by permanently 
     extending mandatory funding for the senior farmers' market 
     nutrition program (at $15 million a year). It also mandates 
     additional funding of $10 million a year.
       Provisions regarding the treatment of senior farmers' 
     market nutrition program benefits are the same as in the 
     House bill. (Section (4701, 4702)
       The Conference substitute adopts the House provision with 
     an amendment to strike the authorization of additional 
     appropriations to carry out the program, and to make other 
     technical changes. The Senate provision requiring additional 
     mandatory funds is adopted and appears in section 4405 with 
     an amendment to increase current mandatory funding to 
     $20,600,000 a year. (Section 4231)
     (56) Congressional Hunger Center
       The House bill amends section 4404 of FSRIA with provisions 
     similar to those contained in current law. Provisions in this 
     section differ from those in current law by authorizing 
     annual appropriations of $3,000,000 a year, through fiscal 
     year 2012, and by specifically naming the Congressional 
     Hunger Center as the administering entity for Emerson and 
     Leland fellowships. (Section 4402)
       The Senate amendment is the same as the House bill, with 
     technical differences and requires: (1) issuance of a grant 
     from USDA to the Congressional Hunger Center to administer 
     the program (as opposed to a contract in the House bill); and 
     (2) an appropriations authorization set at ``such sums as are 
     necessary.'' (Section 4404)
       The Conference substitute adopts the Senate provision with 
     an amendment to strike language pertaining to congressional 
     findings, and make other technical changes. (Section 4401)
     (57) Joint Nutrition Monitoring
       The House bill amends Subtitle D of Title IV of FSRIA by 
     authorizing the Secretary of Agriculture, along with the 
     Secretary of Health and Human Services, to continue to 
     provide jointly for national nutrition monitoring and related 
     research activities.
       Among other duties, the two Secretaries are required to: 
     (a) collect continuous dietary, health, physical activity, 
     and diet and health knowledge data on a nationally 
     representative sample; (b) periodically collect data on 
     special at-risk populations as identified by the Secretaries; 
     (c) distribute information on health, nutrition, the 
     environment, and physical activity to the public in a timely 
     fashion; (d) analyze new data that becomes available; (e) 
     continuously update food composition tables; and (f) research 
     and develop data collection methods and standards. (Section 
     4403)
       The Senate amendment is the same as the House bill, with 
     technical differences. Freestanding provision. (Section 7501)
       The Conference substitute adopts the House provision with a 
     technical amendment to structure the language as a 
     freestanding provision. (Section 4403)
     (58) Team Nutrition Network
       The Senate amendment provides mandatory funding for Team 
     Nutrition Network activities--$3 million a year through 
     fiscal year 2012. (Section 4905)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision.
     (59) Agricultural policy and public health
       The Senate amendment requires the Government Accountability 
     Office (GAO) to assess whether the agricultural policies of 
     the U.S. have an impact on health, nutrition, overweight and 
     obesity, and diet-related chronic disease. (Section 4908)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision.
     (60) Sense of the Congress
       The House bill expresses the sense of Congress that food 
     items provided pursuant to the Federal School Meal Program 
     should be selected so as to reduce the incidence of juvenile 
     diabetes and to maximize nutritional value. (Section 4404)
       The Senate amendment has no comparable provision.
       The Conference substitute deletes the House provision.
     (61) Grain Pilot Program
       The Senate amendment amends the Richard B. Russell National 
     School Lunch Act to establish a pilot project to provide 
     grain products in selected elementary and secondary schools. 
     Funding of $4 million is provided--to be supplied from funds 
     available for the senior farmers' market nutrition program 
     and community food projects. (Section 4912)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     amendments to purchase whole grain products for distribution 
     in the school lunch and breakfast programs; provide an 
     evaluation of the pilot program; and to require that funding 
     to carry out this program be utilized from funds made 
     available under Section 32 of the Act of August 24, 1935. 
     (Section 4305)
     (62) Report on Federal hunger programs
       The Senate amendment requires the Government Accountability 
     Office (GAO) to submit a report that surveys all federal 
     programs that seek to alleviate hunger or food insecurity or 
     improve nutritional intake. (Section 4913)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision.
     (63) Food Employment Empowerment and Development Program
       The Senate amendment authorizes a ``food employment 
     empowerment and development'' program under which grants 
     would be made to encourage the effective use of community 
     resources to combat hunger and the causes of hunger through 
     food recovery and job training initiatives. (Section 4914)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision. The 
     Managers note that the activities authorized under the Senate 
     provision are eligible for funding under the Community Food 
     Projects (CFP) competitive grants program, and encourage 
     organizations seeking federal assistance to carry out such 
     activities to submit an application for funding through CFP.
       The Managers recognize the Community Food Projects (CFP) 
     program is designed to provide one-time grant funding for 
     projects that meet the food needs of low-income people, 
     increase the self-reliance of communities in providing for 
     their own food needs, and plan for long-term solutions to 
     address such needs. The Managers acknowledge that the Food 
     Employment Empowerment and Development (FEED) Program meets 
     the requisite eligibility standards for funding under the CFP 
     program. The goal of the FEED Program is to encourage the 
     effective use of community resources to combat hunger and the 
     root causes of hunger by creating opportunity through food 
     recovery and job training. In general, eligible participants 
     of the FEED Program, such as school based programs, will 
     focus their efforts in the following areas:
       (1) Recovery of donated food from area restaurants, 
     caterers, hotels, cafeterias, farms, or other food service 
     businesses and distribution of meals or recovered food to 
     nonprofit organizations.
       (2) Training of unemployed and underemployed adults for 
     careers in the food service industry.
       (3) Carrying out of a welfare-to-work job training.
       The Managers expect USDA to give full consideration to CFP 
     grant applications that meet the goals of the FEED program.
     (64) Infrastructure and transportation grants to support 
         rural food bank delivery of perishable foods
       The Senate amendment authorizes competitive grants--
     totaling $10 million a year through fiscal year 2012--to 
     expand the capacity and infrastructure of food banks to 
     improve their ability to handle ``time-sensitive'' 
     (perishable) food products, to improve identification of 
     potential providers of donated food, and to support the 
     procurement of locally-produced food from small and family 
     farms and ranches. (Section 4915)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     amendments to structure the provision as an amendment to the 
     Emergency Food Assistance Act of 1983; provide a requirement 
     that the Secretary use not less than 50 percent of grant 
     funds for rural areas; specify authorized levels of 
     appropriations; and to make other technical changes. (Section 
     4202)
     (65) Reauthorization and application
       The House bill extends the various expiring authorities 
     through fiscal year 2012 in sections 4016, 4019, 4020, 4021, 
     4024, 4025, 4027, 4028, 4201, 4202, and 4203 of this Act, 
     except for the authorization of appropriations for the 
     nutrition information and awareness program established by 
     Section 4403 of FSRIA. (Section 4016, 4019, 4020, 4021, 4024, 
     4025, 4027, 4028, 4201, 4202 and 4203)

[[Page H3613]]

       The Senate amendment extends most expiring authorities 
     indefinitely. Community food projects, authority in section 
     1114(a)(2) of the AFA, and the nutrition information and 
     awareness program are extended through FY2012.
       The Senate amendment also stipulates that, except as 
     otherwise provided, the amendments made in the Nutrition 
     title take effect April 1, 2008. It also provides that States 
     may implement amendments made in Sections 4101 through 4110 
     beginning on a date determined by the State during the period 
     between April 1 and October 1, 2008. States are given the 
     option to implement amendments made by sections 4103 and 4104 
     for a certification period that begins not earlier than an 
     implementation date between April 1 and October 1, 2008 (as 
     determined by the State).
       This section provides that the amendments made in sections 
     4101-4104, 4107-4109, 4110(a)(2), 4208, 4701(a)(3), 4801(g), 
     and 4903 terminate September 30, 2012. (Section 4801, 4802, 
     4803, 4910, 4911)
       The Conference substitute adopts the Senate provision with 
     amendments for technical changes, to extend various expiring 
     authorities through fiscal year 2012, and to link various 
     expiring authorities to the availability of appropriations 
     provided through section 18(a) of the Supplemental Nutrition 
     Assistance Program (SNAP). The language for this provision is 
     incorporated into a single section reauthorizing SNAP and 
     other domestic nutrition assistance programs. (Section 4406)
     (66) Study on purchases of food with program benefits
       The Senate amendment requires GAO to conduct a study of the 
     effects of a rule requiring that food stamp benefits only be 
     used to purchase food included in the most recent thrifty 
     food plan market basket. (Section 4202)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision.

                            TITLE V--CREDIT

     (1) Farming experience
       The Senate amendment amends section 302(a)(2) of the 
     Consolidated Farm and Rural Development Act (Con Act) by 
     clarifying that the Secretary may take into consideration all 
     farming experience of a loan applicant when considering 
     eligibility for farm ownership loans. (Section 5001)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 5001)
     (2) Refinancing of guaranteed farm ownership loans for 
         beginning farmers or ranchers
       The Senate amendment amends Section 303 of the Con Act by 
     allowing beginning farmers or ranchers to refinance a 
     delinquent guaranteed farm ownership loan with a direct farm 
     ownership loan. (Section 5002)
       The House bill as no comparable provision.
       The Conference substitute deletes the Senate provision.
     (3) Conservation loan guarantee program
       The House bill amends section 304 of the Con Act by 
     creating a conservation loan guarantee program. The Secretary 
     is authorized to provide loan guarantees and interest 
     subsidies, or both, to farmers, ranchers, and other entities 
     that are controlled by farmers and ranchers and primarily and 
     directly engaged in agricultural production to carry out 
     qualified conservation projects.
       The Secretary is required to give priority to: qualified 
     beginning farmers or ranchers; socially disadvantaged farmers 
     or ranchers; owners or tenants who use the loans to convert 
     to sustainable or organic agricultural production systems; 
     and producers who use the loans to build conservation 
     structures or establish conservation practices to comply with 
     section 1212 of the Food Security Act of 1985.
       The term ``qualified conservation loan'' is defined as a 
     loan in which: the proceeds are used to cover the costs of 
     the borrower in carrying out a qualified conservation 
     project; the principal amount of the loan is not more than $1 
     million; the loan repayment period is 10 years; and the total 
     amount of all processing fees does not exceed an amount to be 
     prescribed by the Secretary.
       The term ``qualified conservation project'' is defined as 
     conservation measures that address provisions of the 
     borrower's conservation plan.
       The term ``conservation plan'' is defined as a plan, 
     approved by the Secretary, that for a farming or ranching 
     operation, identifies the conservation activities that will 
     be addressed with the conservation loan, including the 
     installation of conservation structures; the establishment of 
     forest cover for sustained yield timber management, erosion 
     control, or shelter belt purposes; the installation of water 
     conservation measures; the installation of waste management 
     systems; and the establishment of improvement or permanent 
     pasture; compliance with section 1212 of the Food Security 
     Act of 1985; and any other emerging or existing conservation 
     practices, techniques, or technologies approved by the 
     Secretary.
       The amount of the interest subsidies the Secretary may 
     provide is limited to 500 basis points, if the principal 
     amount of the loan is less than $100,000; 400 basis points, 
     if the principal amount of the loan is not less than $100,000 
     and is less than $500,000; and 300 basis points in all 
     other cases.
       The Secretary is prohibited from approving any application 
     for the program unless the Secretary determines that the loan 
     sought by the applicant, as described in the application, 
     would be a qualified conservation loan, and the project for 
     which the loan is sought is likely to result in a net benefit 
     to the environment.
       Necessary appropriations are authorized for each of the 
     fiscal years 2008 through 2012. (Section 5001)
       The Senate amendment amends section 304 of the Con Act. The 
     transition to organic and sustainable farming practices is to 
     be an eligible loan purpose. The implementation of one or 
     more practices under the Environmental Quality Incentives 
     Program is also to be an eligible loan purpose.
       Beginning farmers or ranchers and socially disadvantaged 
     farmers or ranchers are to be given priority in this program.
       The loan restriction of $50,000 is eliminated. (Section 
     5003)
       The Managers agreed to include the House provision in the 
     Conference substitute, with an amendment. The amendment 
     establishes a conservation loan and loan guarantee program 
     where eligible borrowers may get a loan or loan guarantee to 
     carry out qualified conservation projects. The Secretary 
     shall guarantee 75 percent of the principle loan amount 
     guaranteed under this program. It is the intent of the 
     Managers that the loan program established in the section 
     should complement financial assistance offered in the 
     conservation title of this Act. In addition to the priorities 
     established under the program, the Secretary shall give 
     strong consideration to loan applicants who are waiting 
     funding under conservation programs authorized and 
     established under title XII of the Food Security Act of 1985. 
     (Section 5002)
       Qualified conservation projects eligible to receive funding 
     under this program must have a conservation plan that 
     identifies the conservation activities that will be addressed 
     by a loan made under this program. It is the Manager's view 
     that conservation structures that address soil, water and 
     related resources include sod waterways, permanently 
     vegetated stream boarders and filter strips, wind breaks, 
     shelterbelts, living snow fences, and other vegetative 
     practices.
       It is also the Managers intent that the Farm Service Agency 
     operating loan limitations established in section 312 of the 
     Con Act are to apply to a loan or loan guaranteed under this 
     program.
     (4) Limitations on amount of ownership loans
       The House bill amends section 305(a)(2) of the Con Act by 
     setting the farm ownership loan limit at $300,000.
       The Secretary is required to establish a plan, in 
     coordination with the activities under section 359, 360, 361, 
     and 362 of the Con Act, to encourage borrowers to graduate to 
     private commercial or other sources of credit. (Section 5002)
       The Senate amendment is the same as the House bill but has 
     no comparable provisions requiring the Secretary to establish 
     graduation criteria. (Section 5004)
       The Conference substitute adopts the Senate provision. 
     (Section 5003)
     (5) Down payment loan program
       The House bill amends section 310E of the Con Act by: 
     including socially disadvantaged farmers or ranchers in the 
     down payment loan program; setting the Farm Services 
     Administration (FSA) portion of the loan at 45 percent; 
     fixing the interest rate for the program at 4 percent below 
     the regular direct farm ownership interest rate or 1 percent, 
     whichever is greater; setting the duration of the loan at 20 
     years; requiring a borrower down payment of 5 percent; and 
     setting the maximum price for the farm or ranch at $500,000.
       The Secretary is authorized to establish annual performance 
     goals to promote the use of the down payment loan program and 
     other joint financing participation loans as the preferred 
     choice for direct real estate loans made by lenders to 
     qualified beginning farmers or ranchers or socially 
     disadvantaged farmers or ranchers. (Section 5003)
       The Senate amendment amends section 310E of the Con Act by: 
     allowing socially disadvantaged farmers or ranchers to be 
     eligible for the down payment loan program; setting the FSA 
     portion of the loan at 45 percent; and adjusting the interest 
     rate for the down payment loan to the greater of 4 percent 
     below the interest rate for the regular farm ownership loan 
     or 2 percent.
       The duration of the loan, the borrower payment, and the 
     maximum price are the same as the House bill.
       The Secretary is required to establish annual performance 
     goals to promote the use of the down payment loan program and 
     joint financing arrangements. (Section 5004)
       The Conference substitute adopts the House provision with 
     an amendment to adjust the interest rate to 4 percent below 
     the regular direct farm ownership interest rate or 1.5 
     percent, whichever is greater. (Section 5004)
     (6) Beginning farmer and rancher contract land sales program
       The House bill amends section 310F of the Con Act by: 
     expanding the beginning farmer and rancher contract land 
     sales program to include socially disadvantaged farmers or 
     ranchers; making the program permanent and expanding it 
     nationwide; requiring program participants to provide a down 
     payment of 5 percent of the purchase price of the farm or 
     ranch; setting the maximum purchase price for the farm or 
     ranch that is the subject of the contract land sale at 
     $500,000;

[[Page H3614]]

     and setting the loan guarantee period, for a loan provided 
     under this program, at 10 years.
       The land seller is given the option of choosing either a 
     prompt payment guarantee or a standard guarantee. A prompt 
     payment guarantee consists or either three amortized annual 
     installments or an amount equal to three annual installments 
     (including an amount equal to the total cost of any tax and 
     insurance incurred during the period covered by the annual 
     installments. A standard guarantee plan covers an amount 
     equal to 90 percent of the outstanding principal of the loan. 
     (Section 5004)
       The Senate amendment is the same as the House bill except 
     socially disadvantaged farmers or ranchers are not added as 
     eligible participants. In addition, the Senate amendment does 
     have a standard guarantee plan. (Section 5006)
       The Conference substitute adopts the House provision with 
     amendment. The amendment clarifies that in order for a 
     private seller to use the standard guarantee plan they must 
     obtain a servicing agent who will be responsible for 
     servicing activities associated with the contract land 
     sale. Further, the amendment allows the Secretary to 
     phase-in use of the standard guaranteed option. (Section 
     5005)
     (7) Loans to purchase highly fractioned lands
       The House bill amends section 1 of Public Law 91-229 (25 
     U.S.C. 488) by giving the Secretary of Agriculture the 
     discretionary authority to make and insure loans, as provided 
     in section 309 of the Con Act, to eligible purchasers of 
     highly fractioned lands, pursuant to section 204(c) of the 
     Indian Land Consolidation Act. (Section 5005)
       The Senate amendment is the same as the House except it 
     amends section 205(c) of the Indian Land Consolidation Act. 
     (Section 5401)
       The Conference substitute adopts the Senate provision. 
     (Section 5501)
     (8) Farming experience; direct operating loan term 
         limitations
       The Senate amendment amends section 311(a) of the Con Act 
     by clarifying that the Secretary may take into consideration 
     all farming experience of a loan applicant when considering 
     eligibility for farm operating loans. The period that a 
     participant is eligible for direct operating loan assistance 
     is extended by 1 year. (Section 5105)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to delete the provision that extends the period 
     of time a borrower is eligible for direct farm operating loan 
     assistance. (Section 5101)
     (9) Limitations on amount of operating loans
       The House bill amends section 313(a)(1) of the Con Act by 
     limiting the amount of an operating loan other than one 
     guaranteed by the Secretary to $300,000. (Section 5012)
       The Senate amendment includes the same provision as the 
     House bill. (Section 5102)
       The Conference substitute adopts the House provision. 
     (Section 5102)
     (10) Suspension of limitation on period for which borrowers 
         are eligible for guaranteed assistance
       The House bill amends section 5102 of the Farm Security and 
     Rural Investment Act of 2002 (FSRIA) by suspending, until 
     January 1, 2008, a limitation placed on the number of years 
     that borrowers are eligible to receive guaranteed assistance 
     on operating loans. (Section 5012)
       The Senate amendment repeals section 319 of the Con Act. 
     This section provides a limitation on the number of years a 
     borrower is eligible to receive guaranteed assistance on 
     operating loans. (Section 5103)
       The Conference substitute adopts the Senate provision with 
     amendment. The amendment extends the waiver on guaranteed 
     operating loan term limits through December 31, 2010. 
     (Section 5103)
     (11) Beginning farmer and rancher individual development 
         accounts
       The Senate amendment amends the Con Act by adding after 
     section that establishes the New Farmer Individual 
     Development Account Pilot Program (IDA). Its purpose is to 
     match the savings of beginning farmers or ranchers to help 
     them establish a pattern of savings and build assets which 
     will help their long term farm viability.
       The terms demonstration program, eligible participant, 
     individual development account, qualified entity are defined. 
     Subsection (a) creates definitions that will be used 
     throughout this section.
       The Secretary is authorized to establish a pilot program to 
     be administered by the FSA (FSA) in at least 15 states. Each 
     qualified entity that receives a grant under the pilot 
     program must provide a 25 percent non-Federal match of the 
     grant awarded. An eligible participant will enter into a 
     contract with a qualified entity that requires: a monthly 
     deposit into a personal savings by the eligible participant; 
     an agreement on the eligible expenditure for which the 
     savings will be used when the contract is completed; and an 
     agreed upon a match of not more than 3 to 1 for every dollar 
     for saved by the eligible participant provided by the 
     eligible entity. An eligible participant cannot receive more 
     than $9,000 in matching funds for each fiscal year of the 
     contract.
       The Senate amendment establishes an application process in 
     which eligible entities receive a grant to administer the IDA 
     program. When considering applications for the program, the 
     Secretary is to give a preference to qualified entities that 
     have a track record of serving eligible participants and 
     expertise in dealing with financial management aspects of 
     farming. The maximum grant a qualified entity may receive is 
     $300,000 to carry out the IDA program.
       Qualified entities that receive a grant must submit, to the 
     Secretary, an annual report that includes the following: an 
     evaluation of the demonstration project's progress; the 
     amounts in the reserve fund; the amounts deposited in each 
     IDA; the amounts withdrawn from the IDA and the purpose for 
     which the money was withdrawn; and information about the 
     demonstration program and participants.
       The Secretary is authorized to promulgate regulations that 
     ensure the termination of pilot program and control of the 
     reserve fund in case of early termination of a demonstration 
     program.
       An appropriation of $10,000,000 is authorized for each 
     fiscal year 2008 through 2012. The Secretary is prohibited 
     from using more than 10 percent of the funds made available 
     to administer the program and provide technical assistance to 
     qualified entities. (Section 5201)
       The House bill has no comparable provisions.
       The Conference substitute adopts the Senate provision with 
     amendment.
       The amendment increases the non-Federal match of the grant 
     amount from 25 percent to 50 percent. Federal grant money 
     used for administrative costs is limited to 10 percent. The 
     amendment caps the savings match a qualified entity may 
     provide under the program at not more than 200 percent of the 
     participant's savings. Furthermore, the amendment reduces the 
     maximum federal grant amount to $250,000. (Section 5301)
       The Managers are aware that farmers over the age of 65 
     outnumber those below the age of 35 by more than 2 to 1. 
     Access to credit and land are two of the largest problems 
     facing beginning farmers or ranchers today. The increased 
     cost of farmland, equipment, and other farm inputs have 
     created a significant barrier to farm entry. To ensure the 
     future viability of U.S. farming, the Managers are aware 
     of the need to develop public polices that address the 
     unique challenges beginning farmers and ranchers face. The 
     New Farmer Individual Development Accounts Pilot Program 
     (IDA) is designed to help those with modest means save 
     build assets and enter the financial mainstream. This 
     pilot program would assist beginning farmers or ranchers 
     by using matched savings accounts, the proceeds of which 
     may be used toward capital expenditures for a farm or 
     ranch operation, including expenses associated with the 
     purchase of farmland, buildings, equipment, livestock, 
     infrastructure, or the acquisition of training. The 
     Managers intend that the IDA established by a qualified 
     entity for an eligible participant will be separate from 
     the personal savings of the eligible participant. The IDA 
     account and funding shall be controlled by the qualified 
     entity. Upon completion of an IDA contract by an eligible 
     participant, the qualified entity shall supply funds from 
     the IDA account directly toward the eligible purchase on 
     behalf of the eligible participant.
       It is the Managers' intent that eligible participants must 
     also complete financial training established by the qualified 
     entity establishing the IDA for the participant. Such 
     training may involve education and technical assistance 
     related to budgeting, business planning, recordkeeping, 
     banking, farm credit management, cash flow management, market 
     development, equity investment, land access and land tenure 
     options, and other similar financial training needs. It is 
     the intent of the Managers that eligible entities may create 
     their own financial management training programs or utilize 
     curricula and training events of other organizations, 
     businesses, and institutions. The Managers encourage FSA to 
     coordinate with eligible entities who may want to make use of 
     the borrower financial and farm management training programs 
     established under Section 359 of the Con Act as part of their 
     financial management training offering. The Managers believe 
     when considering applications to carry out eligible 
     demonstrations the term ``new farming opportunities'' used in 
     the application criteria means either starting a farm or 
     converting to other production.
     (12) Inventory sales preferences
       The House bill amends section 335(c) of the Con Act by 
     restoring the first priority given to socially disadvantaged 
     farmers or ranchers whenever the Secretary sells or leases 
     property. The Secretary is required to ensure that socially 
     disadvantaged farmers or ranchers are included in the process 
     whenever property is sold or leased. (Section 5021)
       The Senate amendment amends section 335(c) of the Con Act 
     by making socially disadvantaged farmers or ranchers eligible 
     for inventory property in the first 135 days the Secretary is 
     able to sell the inventory property. If one or more eligible 
     socially disadvantaged or beginning farmers offer to purchase 
     the same property in the first 135 days, the buyer is to be 
     chosen randomly. (Section 5202)
       The Conference substitute adopts the Senate provision. 
     (Section 5302)
     (13) Loan authorization levels
       In section 346(b)(1) of the Con Act the Senate Amendment 
     increases the loan authorization for FSA loan programs to 
     $4,226,000,000.
       Section 346(b)(2)(A) increases the loan authorization for 
     direct loans to $1,200,000,000.

[[Page H3615]]

     The authorization for the direct farm ownership loan program 
     is increased to $350,000,000, and the authorization for the 
     direct operating loan program is increased to $850,000,000. 
     (Section 5204)
       The House bill has no comparable provisions.
       The Conference substitute adopts the Senate provision. 
     (Section 5303)
     (14) Loan fund set-asides
       The House bill amends section 346(b)(2)(A)(i)(I) of the Con 
     Act by increasing the amount of direct farm ownership loans 
     that the Secretary is to reserve for beginning farmers or 
     ranchers to 75 percent. Of the funds reserved for beginning 
     farmers or rancher in the direct farm ownership program, 66 
     percent of those funds are reserved for the down payment loan 
     program and joint financing arrangements.
       Section 346(b)(2)(A)(ii)(III) of the Con Act is amended by 
     increasing the amount of direct operating loans the Secretary 
     is to make available to beginning farmers or ranchers to 50 
     percent.
       Section 346(b)(2)(B)(i) of the Con Act is amended by 
     increasing the amount of guaranteed farm ownership loans that 
     the Secretary is to reserve for beginning farmers or ranchers 
     to 40 percent. (Section 5022)
       The Senate amendment is the same as the House provision. 
     (Section 5204)
       The Conference substitute adopts the Senate provision. 
     (Section 5302)
     (15) Transition to private commercial or other sources of 
         credit
       The House bill amends section 344 of the Con Act by 
     requiring the Secretary, when making or insuring a real 
     estate or operating loan, to establish regulations that have 
     as their goal transitioning borrowers to other sources of 
     credit, including private commercial credit, in the shortest 
     practicable period of time. (Section 5023)
       The Senate amendment is the same as House provision.
       The Conference substitute adopts the House provision. 
     (Section 5304)
     (16) Interest rate reduction program
       The Senate amendment amends section 351(a) of the Con Act 
     by clarifying that interest assistance is to be available for 
     new guaranteed operating loans or restructured guaranteed 
     operating loans. (Section 5205)
       The House bill has no comparable provisions.
       The Conference substitute deletes the Senate provision.
       The Managers are aware that the Secretary has amended 
     regulations under the guaranteed loan program to limit the 
     availability of interest rate reduction authorized under 
     section 351 of the Con Act to new guaranteed operating loans. 
     The Managers believe that non-statutory limitations in the 
     program's regulations will deter the immediate availability 
     of funds that may be appropriated in the future for interest 
     rate reductions for other categories of guaranteed loans. It 
     is the Managers' expectation that the regulations and 
     policies for the guaranteed loan program should clarify that 
     interest rate reduction may be available for all new and 
     restructured guaranteed loans.
     (17) Extension of the right of first refusal to reacquire 
         homestead property to immediate family member of 
         borrower-owner
       The House bill amends section 352(c)(4)(B) of the Con Act 
     by extending, in the case of a socially disadvantaged farmer 
     or rancher, the right of first refusal to reacquire a 
     homestead property to members of the immediate family of the 
     borrower.
       It allows, in the case of a socially disadvantaged farmer 
     or rancher, for an independent appraisal of the property by 
     an appraiser selected by the immediate family member of the 
     borrower. (Section 5024)
       The Senate amendment has no comparable provisions.
       The Conference substitute adopts the House provision. 
     (Section 5305)
     (18) Deferral of shared appreciation recapture amortization
       The Senate amendment amends section 353(e)(7)(D) of the Con 
     Act by clarifying that deferral is an available servicing 
     tool and limits any deferral to 1 year. (Section 5206)
       The House bill has no comparable provisions.
       The Conference substitute deletes the Senate provision.
       The Managers are aware that under subsection (e)(7)(D) of 
     section 353 of the Con Act, the Secretary has permitted 
     borrowers to seek only re-amortization of amortized Shared 
     Appreciation recapture payments despite the reference in that 
     section to all ``loan service tools under section 343(b)(3) 
     [7 USC Sec. 1991(b)(3)].'' It is the Managers' expectation 
     that the Secretary will amend program regulations and 
     policies to clarify that the full range of loan service tools 
     set out in subsection (b)(3) of section 343 of the Con Act is 
     available for modification of amortized Shared Appreciation 
     recapture payments.
     (19) Rural development and farm loan program activities
       The House bill amends Subtitle D of the Con Act by 
     prohibiting the Secretary from completing a study or entering 
     into a contract with any private party to carry out, without 
     a specific authorization in an Act of Congress, a competitive 
     source activity of the Secretary, including USDA support 
     personnel, relating to rural development or farm loan 
     programs. (Section 5025)
       The Senate amendment amends the Con Act by adding a new 
     section, 365, that prohibits the Secretary from completing or 
     entering into a contract with a private party to carry out 
     competitive sourcing activities relating to rural 
     development, housing, and farm loan programs at the United 
     States Department of Agriculture. (Section 5207)
       The Conference substitute adopts the House provision. 
     (Section 5306)
       The managers intend this provision to cover USDA's Rural 
     Development mission area, including rural cooperative, 
     business, housing, and energy programs.
     (20) Technical correction
       The Senate amendment amends section 3.3(b) of the Farm 
     Credit Act (FCA) of 1971 by making a technical correction. It 
     strikes ``per'' in the first sentence and inserts ``par''. 
     (Section 5302)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 5402)
     (21) Banks for cooperatives voting stock
       The House bill amends section 3.3(c) of the FCA by 
     authorizing the board of a bank for cooperatives to determine 
     the terms and conditions for the issuance and transfer of 
     bank voting stock to bank for cooperatives customers and 
     other Farm Credit System associations.
       A conforming amendment is made to section 4.3A(c)(1)(D) of 
     the FCA to add to the list of borrowers eligible to hold 
     voting stock under the bylaws of the banks for cooperatives 
     persons and entities eligible to borrow from banks for 
     cooperatives. (Section 5031)
       The Senate amendment has no comparable provisions.
       The Conference substitute adopts the House provision. 
     (Section 5403)
     (22) Confirmation of the Farm Credit Administration chair
       The Senate amendment amends section 5.8(a) of the FCA by 
     requiring the advice and consent of the Senate for the 
     confirmation of chairman of the Farm Credit Administration. 
     (Section 5303)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision.
     (23) Rural utility loans
       The House bill amends section 8.0(9) of the FCA to allow 
     rural utility loans (loans, or interest in a loan, for 
     electric and telephone facilities) to be considered as 
     ``qualified loans''. (Section 5032)
       The Senate amendment amends section 8.0(9) of the FCA by 
     adding a new subparagraph to allow rural utility loans 
     (loans, or interest in a loan, for electric and telephone 
     facilities) to be considered as ``qualified loans'' for 
     Federal Agricultural Mortgage Corporation financing.
       Section 8.6(a)(1) of the FCA is amended by making 
     conforming and technical changes to the standards established 
     under section 8.8(a) of the FCA related to agricultural real 
     estate loans and rural utility loans.
       Section 8.8(a) of the FCA is amended by authorizing the 
     creation of appropriate underwriting, security, and repayment 
     standards for agricultural mortgage loans and rural utility 
     loans.
       Minimum criteria standards are set for agricultural real-
     estate loans focused on individual borrower traits (loan-to-
     value ratio, sufficient cash flow, documentation standards, 
     appraisal process, actively engaged in farming, speculation 
     in real estate, and consideration of real estate tax 
     purposes). These standards do not apply to rural utility 
     loans.
       Loan amounts for agricultural production are established. 
     The limitation does not apply to rural utilities loans. 
     (Section 5306)
       The Conference substitute adopts the Senate provision. 
     (Section 5406)
     (24) Farm Credit System Insurance Corporation
       The House bill amends section 1.12(b) of the FCA to change 
     the method that each Farm Credit System (FCS) bank must use 
     to assess associations and other financing institutions to 
     cover the costs of making Farm Credit System Insurance 
     Corporation (FCSIC) premium payments under Part E of Title V 
     of the FCA. FCS banks are required to compute the assessments 
     on lenders in an ``equitable manner.''
       Section 5.55(a) of the FCA is amended by mandating that the 
     premiums due from System institutions will no longer be 
     collected annually when the aggregate amount in the Farm 
     Credit Insurance Fund does not exceed the secure base amount. 
     The premium due from any insured System institution is to be 
     based on the average outstanding insured debt.
       Section 5.55(b) of the FCA is amended by allowing the FCSIC 
     to collect premiums more frequently than annually.
       Section 5.55(c) of the FCA is amended by authorizing FCS 
     banks to deduct a percentage of investments guaranteed by the 
     Federal government and a percentage of investments guaranteed 
     by State governments when calculating the secure base amount.
       Section 5.55(d) of the FCA is amended by authorizing the 
     FSCIC to use the principal outstanding on all loans made by 
     an insured FCS bank or the amount outstanding on all 
     investments made by an insured system bank for purposes of 
     premium calculations and secure base amount calculations.
       Section 5.55(e) of the FCA is amended by requiring the 
     FCSIC to use year-end numbers in calculating excess funds, 
     with respect to the secure base amount. The formula 
     concerning payments from the Farm Credit Insurance Fund 
     Allocated Insurance Reserve Accounts is simplified.
       Section 5.56(a) of the FCA is amended by authorizing FCS 
     banks to file certified statements quarterly.

[[Page H3616]]

       Section 5.58(10) of the FCA is amended by clarifying that 
     FCSIC has the authority to adopt rules and regulations 
     concerning section 1.12(b) of Title I of the FCA, the 
     ``Authority to Pass Along Cost of Insurance Premiums.'' 
     (Section 5033)
       The Senate amendment amends section 1.12(b) of the FCA to 
     allow FCS banks to have flexibility in deciding how to pass 
     along insurance premiums to their affiliates. This section 
     specifies that premiums are to be computed in an equitable 
     manner. (Section 5301)
       The Senate amendment also amends section 5.55(a) of the FCA 
     by allowing the total insured debt obligations on which 
     premiums are assessed to be subtracted by 90 percent for 
     investments guaranteed by the Federal government and 80 
     percent for investments guaranteed by State governments.
       Section 5.55(b) of the FCA is amended by allowing the FCSIC 
     to collect premiums more frequently than annually.
       Section 5.55(c) of the FCA is amended by adjusting the 
     outstanding insured obligations of all insured System banks 
     by excluding an amount equal to the sum of 90 percent of 
     federal government guaranteed loans and investments and 80 
     percent of state government-guaranteed loans and investments 
     when calculating the ``secure base amount''.
       Section 5.55(d) of the FCA is amended to determine the 
     principal outstanding on all loans made by an insured System 
     bank, or the amount outstanding on all investments made by an 
     insured System bank, for the purpose of premium calculations 
     and ``secure base amount'' collections.
       Subsection 5.55(e) of the FCA is amended by allowing the 
     Farm Credit System Insurance Fund to use year-end numbers 
     rather than the average daily balance when calculating excess 
     funds and simplifying the current formula concerning payments 
     from the Allocated Insurance Reserve Accounts. (Section 5304)
       Section 5.56(a) of the FCA is amended by allowing System 
     banks to collect insurance premiums quarterly rather than 
     annually. (Section 5305)
       Section 5.58(10) of the FCA is amended to clarify that 
     FCSIC has the authority to adopt rules and regulations 
     concerning section 1.12(b) of the FCA. (Section 5301)
       The Conference substitute adopts the Senate provision with 
     technical amendments. (Sections 5401, 5404, and 5405)
     (25) Risk-based capital levels
       The House bill amends section 8.32(a)(1) of the FCA by 
     allowing FSCIC to calculate risk-based capital levels for 
     rural electric and telephone loans. (Section 5034)
       Section 8.32(a)(1) of the FCA is amended by creating a new 
     subparagraph (B) that directs the FCA to establish a risk-
     based capital standard for rural utility loans. (Section 
     5306)
       The Conference substitute adopts the Senate provision. 
     (Section 5406)
     (26) Farm credit system equalization
       The Senate amendment amends the FCA by establishing a new 
     section, 7.7, which equalizes lending authorities among FCS 
     associations in Alabama, Mississippi, and Louisiana.
       The Federal Land Banks or Credit Associations are given the 
     ability to make short- and intermediate-term loans, and 
     Production Credit Associations are given the ability to make 
     long-term loans. The new authorities can only be exercised if 
     the board of directors of the association and a majority of 
     voting stockholders approve.
       The FCA is authorized to issue charter amendments to 
     reflect the new lending authority. (Section 5307)
       The House bill has no comparable provision.
       The Conference substitution adopts the Senate provision. 
     (Section 5407)
     (27) Emergency loans for equine farmers and ranchers
       The Senate amendment amends section 321(a) of the Con Act 
     to allow equine farmers and ranchers to be eligible for FSA 
     emergency loans. (Section 5404)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 5201)
       The managers are aware that family farmers and ranchers who 
     breed and raise horses are eligible for the FSA's emergency 
     loan program. In order to be eligible for a loan under this 
     section, the farmer or rancher must meet all of the relevant 
     requirements of the Con Act, including the credit elsewhere 
     test. The farmer or rancher must also be primarily engaged in 
     the operation and must not have an operation larger than a 
     family farm. Horse owners who use horses for racing, 
     showing, recreation, or pleasure are not eligible for the 
     emergency loan program. Further, the regulation that 
     implements a specifically authorized equine disaster 
     assistance program is not applicable to the change made by 
     this provision.
     (28) Operating loan assistance for commercial fisherman
       The Senate amendment amends section 343(a)(1) of the Con 
     Act by amending the definition of farmer and farming to 
     include commercial fishing for the purposes of operating 
     loans.
       Section 343 of the Con Act is amended by adding a new 
     subsection, (c) that defines farm to include a commercial 
     fishing enterprise; the owner or operator of which is unable 
     to obtain credit from a bank or other lender, as determined 
     by the Secretary. (Section 6020)
       The House bill has no comparable provision.
       The conference substitute deletes the Senate provision.

                      TITLE VI--RURAL DEVELOPMENT

     (1) Definition of rural
       The House bill directs the Secretary to prepare and submit 
     a report to the House and Senate Agriculture Committees that: 
     (a) assesses the varying definitions of rural used by the 
     U.S. Department of Agriculture (USDA); (b) describes what 
     effect those varying definitions have on USDA programs; and 
     (c) makes recommendations on ways to better target the funds 
     provided through rural development programs. (Section 6001)
       The Senate amendment amends section 343(a)(13) of the 
     Consolidated Farm and Rural Development Act (Con Act) to 
     provide a standard definition for ``rural'' and ``rural 
     area'' to exclude: (1) cities of 50,000 or more; (2) any 
     urbanized area contiguous and adjacent to a city of 50,000 or 
     more, except for narrow strips of urbanized areas; and (3) 
     any collection of contiguous census blocks with a housing 
     density of 200 housing units per square mile that is adjacent 
     to a city of 50,000 or adjacent to an urbanized area, except 
     for narrow strips of such territory. An exception to this 
     definition is provided for Honolulu and Puerto Rico where 
     cities and counties are coterminous. An applicant may appeal 
     the determination of the Secretary with regard to the housing 
     density factor.
       The Senate amendment retains the rural area eligibility in 
     current law for the water and waste disposal loans and grants 
     program, as a city, town, or unincorporated area that has a 
     population of no more than 10,000 inhabitants. For purposes 
     of determining eligibility for Community Facility loans, the 
     Senate amendment applies the standard definition's housing 
     density requirement, thereby making the definition of rural 
     for the purposes of eligibility for such loans any area that 
     meets the standard definition's criteria and is less than 
     20,000 in population.
       The Undersecretary for Rural Development may designate a 
     place to be of rural character and include in that 
     designation any cluster of census blocks that would otherwise 
     be considered not in a rural area only because the cluster is 
     adjacent to not more that 2 census blocks that are otherwise 
     considered not in a rural area.
       The Secretary is required to submit a report, once every 2 
     years, to the House and Senate Agriculture committees on the 
     various definitions of ``rural'' and ``rural area'' that are 
     used with respect to USDA programs, the effects the 
     definitions have on those programs, and recommendations on 
     how to better target funds provided through rural development 
     programs.
       The Senate amendment makes changes to other definitions. 
     ``Sustainable agriculture'' is defined as a system of plant 
     and animal production that will satisfy human food and fiber 
     needs, enhance environmental quality and the natural 
     resources, make efficient use of nonrenewable resources and 
     integrate biological cycles and controls, sustain the 
     viability of the farming operation, and enhance the quality 
     of life for farmers and society. ``Technical assistance'' is 
     defined as managerial, financial, operational, and scientific 
     analysis and consultation. The definition of ``farmer'' and 
     ``farming'' is amended to include commercial fishermen, and 
     for the purpose of the Farm Service Agency operating loan 
     program the definition of ``farm'' is amended to include a 
     commercial fishing enterprise in which the owner or operator 
     is unable to obtain commercial credit from a bank or other 
     lender. (Section 6020)
       The Conference substitute adopts the Senate amendment with 
     several modifications. The housing density criterion in the 
     Senate amendment is struck from the standard definition of 
     ``rural'' and ``rural area'' and from Community Facilities 
     Program eligibility. However, USDA is directed to conduct a 
     rulemaking to develop additional restrictions on areas that 
     consist of any collection of contiguous census blocks with a 
     housing density of 200 housing units per square mile that is 
     adjacent to a city of 50,000 or adjacent to an urbanized 
     area. The exception for the standard definition of ``rural 
     area'' for Honolulu and Puerto Rico is retained, as is the 
     eligibility of isolated census blocks that would otherwise be 
     considered non-rural simply because they are connected by not 
     more that 2 census blocks to an urbanized area.
       The eligibility for water and waste disposal loans and 
     grants program and the community facility program are 
     unchanged from current law.
       To address urbanized area mapping complications, the 
     Undersecretary for Rural Development is provided with the 
     authority to determine a place to be of rural character if: 
     (1) it is located in an urbanized area with localities at 
     least 40 miles apart and not located next to a city of more 
     than 150,000 people; or (2) is within one-quarter mile of a 
     rural/non-rural boundary. This authority may not be delegated 
     and must be done in consultation with State rural development 
     directors and Governors. The consideration of a petition for 
     such a determination must be made public and is subject to 
     appeal. A report must be submitted to the Congress annually 
     on the use of this authority.
       The Conference substitute adopts the Senate provision 
     requiring a report, once every 2 years, on the definitions of 
     ``rural'' and ``rural area'' that are used with respect to 
     USDA programs, the effects the definitions on those programs, 
     and recommendations on

[[Page H3617]]

     how to better target funds provided through rural development 
     programs.
       The Conference substitute strikes the definitions of 
     technical assistance, sustainable agriculture, and the 
     modifications made to ``farmer'' and ``farming''. (Section 
     6018)
       The Managers have authorized the Secretary of Agriculture 
     to make areas of the Commonwealth of Puerto Rico and the 
     County of Honolulu, Hawaii eligible for Rural Development 
     programs because the unique governmental structure of those 
     entities prevents Census Bureau maps from adequately 
     capturing the demographics of these island areas. The 
     Managers do not expect the Secretary to provide access to 
     rural development programs to areas that are urban or do 
     not meet other requirements of the applicable programs, 
     but do expect the Secretary to recognize areas that meet 
     the intent and spirit of the law.
     (2) Water, waste disposal and wastewater facility grants
       The House bill extends the authorization for appropriations 
     in section 306(a)(2)(A) of the Con Act through 2012. (Section 
     6002)
       The Senate amendment is the same as the House bill. 
     (Section 6001)
       The Conference substitute adopts the House provision. 
     (Section 6001)
     (3) Rural business opportunity grants
       The House bill extends the authorization of appropriations 
     for 306(a)(11)(a) of the Con Act through 2012. (Section 6003)
       The Senate amendment is the same as the House bill. 
     (Section 6002)
       The Conference substitute adopts the Senate provision. 
     (Section 6003)
     (4) Rural water and wastewater circuit rider program
       The House bill amends section 306(a)(22)(A) of the Con Act 
     by increasing the authorization of appropriations for the 
     rural water and wastewater circuit rider program to 
     $25,000,000 for each of the fiscal years 2008 through 2012. 
     (Section 6004)
       The Senate amendment increases the authorization to 
     $20,000,000. (Section 6004)
       The Conference substitute adopts the House provision. 
     (Section 6006)
     (5) Tribal college and university essential community 
         facilities
       The House bill amends section 306(a)(25)(B) of the Con Act 
     by prohibiting the Secretary from requiring non-Federal 
     financial support in an amount that is greater than 5 percent 
     of the total cost of developing essential community 
     facilities at tribal colleges and universities. The 
     authorization is extended to 2012. (Section 6005)
       The Senate amendment provides that the maximum Federal 
     grant tribal colleges and universities may receive for the 
     cost of developing essential community facilities in rural 
     areas is 95 percent. The authorization is extended through 
     2012. (Section 6007)
       The Conference substitute adopts the House provision. 
     (Section 6007)
     (6) Child day care facility grants, loans, and loan 
         guarantees
       The Senate amendment amends section 306(a)(19) of the Con 
     Act (the community facilities program) by providing 
     $40,000,000 in mandatory funding, to remain available until 
     expended, starting in 2008. The Secretary is authorized to 
     make grants, loans and loan guarantees to pay the Federal 
     share of the cost of developing and constructing day care 
     facilities for children in rural areas. The mandatory funding 
     provided under this section is to be in addition to any other 
     funds and authorities relating to development and 
     construction of rural day care facilities. (Section 6003)
       The House contains no comparable provision.
       The Conference substitute provides that the program will 
     not receive mandatory funding, but the current set-aside for 
     this purpose in the community facility program will be 
     extended from April 1 to June 1. (Section 6004)
     (7) Community facility loans and grants for freely associated 
         States and outlying areas
       The Senate amendment reserves 0.5 percent of community 
     facility loans and grants for freely associated States and 
     outlying areas. If, after 180 days within a fiscal year, an 
     insufficient number of applications have been received to 
     account for 0.5 percent then the unused funds are to be 
     reallocated to make loans and grants to otherwise eligible 
     entities located in the States. (Section 6008)
       The House contains no comparable provision.
       The Conference substitute deletes the Senate provision.
       The Managers note the higher infrastructure costs faced by 
     those in the freely associated States and outlying areas of 
     the United States due to the very considerable distances 
     involved in transporting building materials and equipment 
     necessary for infrastructure projects to these areas. In 
     addition, severe storms that are common to these areas cause 
     repeated damage to infrastructure. USDA resources from the 
     community facilities program and from the Rural Utilities 
     Service programs can be of tremendous help in alleviating 
     these serious problems. The Managers expect the Secretary to 
     fully take into account the higher costs that are involved in 
     infrastructure projects in this region and to provide 
     assistance to allow improvements to infrastructure that will 
     be resilient to storms and less likely to be damaged by them 
     even though those costs of construction are higher.
     (8) Priority for community facility loan and grant projects 
         with high non-Federal share
       The Senate amendment provides that priority will be given 
     to community facility projects with non-Federal funding that 
     is substantially greater than the minimum requirement. 
     (Section 6009)
       The House contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (9) Emergency and Imminent Community Water Assistance Grant 
         Program
       The House bill is the same as section 306A of the Con Act, 
     which authorizes the Secretary to provide grants to assist 
     residents in rural areas and small communities comply with 
     the Water Pollution Control Act or the Safe Drinking Water 
     Act. The authorization of appropriations remains the same and 
     is extended through 2012. (Section 6006)
       The Senate amendment provides the same as the House bill. 
     (Section 6011)
       The Conference substitute adopts the House provision. 
     (Section 6008)
     (10) Water systems for rural and native villages in Alaska
       The House bill amends section 306D(d)(1)(a) of the Con Act 
     by extending the authorization of appropriations through 
     2012. (Section 6007)
       The Senate amendment provides that the Denali Commission 
     may be eligible for grants to improve solid waste disposal 
     sites that are contaminating or threatening to contaminate 
     rural drinking water in the State of Alaska. The program 
     is extended through 2013. (Section 6012)
       The Conference substitute includes the House provision, 
     with an amendment to provide a $1,500,000 authorization for 
     each of the fiscal years 2008 through 2012 under the Solid 
     Waste Disposal Act for the Denali Commission to provide 
     assistance to municipalities in Alaska. (Section 6009)
     (11) Grants to finance water well systems in rural areas
       The House bill provides for an extension of the 
     authorization of the program through 2012 and provides that 
     the level of matching funds is not to be taken into account 
     when determining priority in awarding grants. The payment by 
     a grant recipient of audit fees, business insurance, salary, 
     wages, employee benefits, printing costs, and legal fees 
     associated with the purpose of the grant program is to be 
     considered as the providing of matching funds by the grant 
     recipient. (Section 6008)
       The Senate amendment extends the program through 2012. 
     (Section 6013)
       The Conference substitute adopts the House provision with a 
     modification to strike the change with respect to 
     consideration of the matching fund levels, and to increase 
     the limitation on the amount that can be expended on each 
     well from $8,000 to $11,000. (Section 6010)
     (12) Grants to develop wells in isolated areas
       The Senate amendment amends section 306F of the Con Act by 
     authorizing $10,000,000 for a new program for each of the 
     fiscal years 2008 through 2012. The new program allows the 
     Secretary to make grants to nonprofit organizations to 
     develop and construct household, shared, and community wells 
     in isolated areas when a traditional water system is not 
     practical due to distance, geography and limited number of 
     households present. Priority is given to applicants that have 
     experience in developing similar types of wells in rural 
     areas. As a condition of receipt of a grant, the water from 
     the well is to be tested annually for quality and the results 
     made available to well users and the appropriate State 
     agency. The grant amount is limited to an amount not to 
     exceed the lesser of $50,000 and the amount that is 75 
     percent of the costs of a single well and associated system. 
     Grants are prohibited in areas where a majority of users' 
     household incomes exceed the nonmetropolitan median household 
     income. (Section 6013)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (13) Rural Cooperative Development Grants
       The House bill amends section 310B(e)(5)of the Con Act by 
     authorizing the Secretary to give preference to grant 
     applications that--
       (A) demonstrate a proven track record in administering 
     activities to promote and assist in the development of 
     cooperatively and mutually owned businesses;
       (B) demonstrate previous expertise in providing technical 
     assistance in rural areas to promote and assist in the 
     development of cooperatively and mutually owned businesses;
       (C) demonstrate the ability to assist in the retention of 
     businesses, facilitate the establishment of cooperative and 
     new cooperative approaches, and generate employment 
     opportunities that will improve the economic conditions in 
     rural areas;
       (D) commit to providing technical assistance and other 
     services to underserved and economically distressed areas in 
     rural areas of the U.S.;
       (E) demonstrate a commitment to--
       (i) networking with and sharing the results of its efforts 
     with other cooperative development centers and other 
     organizations involved in rural economic development efforts; 
     and
       (ii) developing multi-organization and multi-State 
     approaches to address the cooperative and economic 
     development needs of rural areas; and
       (F) commit to provide a 25-percent matching contribution 
     with private funds and in-

[[Page H3618]]

     kind contributions, except that the Secretary is prohibited 
     from requiring non-Federal financial support in an amount 
     that is greater than 5 percent in the case of a 1994 
     institution.
       The Secretary is authorized to award 1-year grants to 
     centers that have not received prior funding and evaluate 
     programs that receive grant funding. The Secretary is given 
     the discretion to award grants for a period of more than 1 
     year, but not more than 3 years, to programs that the 
     Secretary determines are meeting the criteria of the program. 
     The Secretary is also given the discretion to extend for only 
     1 additional 12-month period the period in which a grantee 
     may use a grant made under this section. The Secretary is 
     authorized to enter into a cooperative research agreement 
     with one or more qualified academic institutions for the 
     purpose of conducting research on the national economic 
     effects of all types of cooperatives.
       The Secretary is authorized to reserve 20 percent of 
     appropriated funds for grants for cooperative development 
     centers, individual cooperatives, or groups of cooperatives 
     serving socially disadvantaged communities when the 
     appropriated funds for a fiscal year exceed $7,500,000. If 
     the Secretary determines the number of applications received 
     for this purpose is insufficient, the Secretary is authorized 
     to use the funds for the purposes outlined in this section.
       The current law authorization is retained and extended 
     through 2012. (Section 6009)
       The Senate amendment is the same as the House bill except 
     that it requires the Secretary to award multi-year grants to 
     programs that the Secretary determines meet the parameters of 
     the program and provides a definition for the term socially 
     disadvantaged. (Section 6015)
       The Conference substitute adopts the Senate provision with 
     minor changes. (Section 6013)
     (14) Criteria to be applied in providing loans and loan 
         guarantees under the business and industry loan program
       The House bill amends section 310B(g) of the Con Act by 
     authorizing the Secretary, in providing loans and loan 
     guarantees under the Business and Industry Loan Program, to 
     consider applications more favorably--when compared to other 
     applications--when the project described in the application 
     supports community development and farm and ranch income by 
     marketing, distributing, storing, aggregating, or processing 
     locally or regionally produced agricultural product.
       A ``locally or regionally produced product'' is defined to 
     mean an agricultural product: (1) which is produced and 
     distributed in the locality or region where the finished 
     product is marketed; (2) which has been shipped a total of 
     distance of 400 or fewer miles, as determined by the 
     Secretary; and (3) about which the distributor has 
     conveyed to the end-use consumers information regarding 
     the origin of the product or production practices, or 
     other valuable information. (Section 6010)
       The Senate amendment authorizes the Secretary to make loans 
     and loan guarantees to individuals, cooperatives, businesses, 
     and other entities to establish and facilitate enterprises 
     that process, distribute, aggregate, store, and market 
     locally-produced agricultural food products.
       The term ``locally-produced agricultural food product'' is 
     to mean an agricultural product that is raised, produced, and 
     distributed within the locality or region and that is 
     transported less than 300 miles from the origin of the 
     agricultural product or the State in which the agricultural 
     product is produced.
       The term ``underserved community'' is to mean an urban, 
     rural, or Indian tribal community that has, as determined by 
     the Secretary: (i) limited access to affordable, healthy 
     foods, including fresh fruits and vegetables, in grocery 
     retail stores or farmer-to-consumer direct markets or a high 
     incidence of diet-related disease as compared to the national 
     average, including obesity; and (ii) a high rate of food 
     insecurity or a high poverty rate.
       The priorities for awarding loans and loan guarantees under 
     this program are for projects that support community 
     development and farm and ranch income by marketing, 
     distributing, storing, aggregating, or processing a locally 
     produced agricultural product; or for projects that have 
     components benefiting underserved communities, as defined in 
     this section.
       The recipients of loans and loan guarantees may use up to 
     $250,000 in loan or loan guarantee funds per retail or 
     institutional facility to modify and update facilities to 
     accommodate locally-produced agricultural food products and 
     to provide outreach to consumers about the sale of locally-
     produced agricultural food products.
       The Secretary is required to submit an annual report to the 
     House and Senate Agriculture Committees that describes the 
     projects carried out using loans and loan guarantees provided 
     under this program. The report is to include the 
     characteristics of the communities served and benefits of the 
     projects. (Section 6017)
       The Conference substitute adopts the Senate provision with 
     modifications. The distance for which a product can travel 
     and still be considered for the program is extended to 400 
     miles. ``Underserved community'' is defined as an urban, 
     rural, or Indian tribal community that has, as determined by 
     the Secretary: (i) limited access to affordable, healthy 
     foods, including fresh fruits and vegetables, in grocery 
     retail stores or farmer-to-consumer direct markets; and (ii) 
     a high rate of food insecurity or a high poverty rate. 
     Priority for the program is given to entities proposing to 
     provide product to underserved communities.
       The Conference substitute does not include the Senate 
     provision allowing recipients to redistribute loan or loan 
     guarantee proceeds to retail or institutional facilities. 
     However, the Managers expect recipients of business and 
     industry loans and loan guarantees under this section to 
     include applicants who propose to work with retail 
     establishments in underserved communities to supply items to 
     promote and ensure the salability of the locally-produced 
     agricultural food product. (Section 6015)
       The Managers expect the Administrator of the Rural Business 
     Cooperative Service to work in coordination with the 
     Administrator of the Agricultural Marketing Service on 
     implementation of this program.
       The Managers are aware of the increased demand for locally 
     and regionally produced foods. Although demand exists for 
     locally and regionally produced foods, producers in many 
     parts of the country have difficulties finding markets and 
     processing facilities as well as establishing distribution 
     channels. In many instances, retail outlets are not 
     interested in buying from smaller volume producers because 
     they cannot provide sufficient and consistent supply of food 
     products. The Managers expect this section to help bridge the 
     gap between the production of locally and regionally produced 
     agricultural food products and the processing and 
     distribution of those products. A distributor could work with 
     several farmers in an area and build the necessary 
     relationships with small, medium or large retail outlets, 
     schools, hospitals or other institutions to provide a 
     marketing channel for locally and regionally produced foods.
     (15) Cooperative equity security guarantee
       The Senate amendment amends section 310B of the Con Act to 
     allow Business and Industry guarantees for loans made for the 
     purchase of preferred stock or similar equity issued by a 
     cooperative organization or a fund that invests primarily in 
     cooperative organizations. (Section 6014)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     technical changes. (Section 6012)
     (16) Appropriate technology transfer for rural areas
       The House bill provides for the establishment of a national 
     technology transfer program for rural areas to assist 
     agricultural producers that are seeking information to help 
     them: (1) reduce their input costs; (2) conserve their energy 
     costs; (3) diversify their operations through new energy 
     crops and energy generation facilities; and (4) expand 
     markets for their agricultural commodities through the use of 
     sustainable farming practices. The Secretary is authorized to 
     carry out the program by making a grant or entering into a 
     cooperative agreement with a national non-profit agricultural 
     assistance organization. A grant or cooperative agreement 
     entered into is to provide 100 percent of the cost of 
     providing information. The program is authorized at 
     $5,000,000. (Section 6011)
       The Senate amendment is substantially similar to the House 
     bill. (Section 6018)
       The Conference substitute adopts the Senate provision with 
     minor changes to elaborate on the purpose of the program. 
     (Section 6016)
     (17) Grants to improve technical infrastructure and improve 
         quality of rural health care facilities
       The House bill authorizes a grant program for rural health 
     facilities to assist such facilities in: purchasing health 
     information technology to improve quality health care and 
     patient safety or, improving health care quality and patient 
     safety, including the development of: (a) quality improvement 
     support structures to assist rural health systems and 
     professionals; and (b) innovative approaches to financing 
     and delivery of health services to achieve rural health 
     quality goals. (Section 6012)
       The Senate amendment contains no comparable provision.
       The Conference substitute deletes the House provision.
     (18) Rural hospital loans and loan guarantees
       The Senate amendment provides $50,000,000 in mandatory 
     funding in fiscal year 2008, to remain available until 
     expended, for loans and loan guarantees for rehabilitating 
     and improving hospitals with not more than 100 acute beds in 
     rural areas. Not less than $25,000,000 is to be allocated to 
     hospitals with fewer than 50 beds. (Section 6006)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (19) Rural Entrepreneur and Microloan Assistance Program
       The House bill provides for the establishment of a rural 
     entrepreneurship and microenterprise grant and loan program, 
     authorized for $20,000,000 per year for each of the fiscal 
     years 2008 through 2012. Grants may be made to qualified 
     organizations to: (i) provide training, operations support, 
     or rural capacity-building services to qualified 
     organizations to assist them in developing microenterprise 
     training, technical assistance, market development 
     assistance, and other

[[Page H3619]]

     related services; (ii) assist in researching and developing 
     best practices in delivering training, technical assistance, 
     and microcredit to rural entrepreneurs; and (iii) carry out 
     other projects that the Secretary deems to be consistent with 
     the purposes of the program. As a condition of receiving a 
     grant, the qualified organization is required to match not 
     less than 25 percent of the total amount of the grant. In 
     addition to cash from non-Federal sources, the matching share 
     may include indirect costs or in-kind contributions funded 
     under non-Federal programs.
       A rural microloan program is established to: (i) make loans 
     to qualified organizations for the purpose of making short-
     term, fixed interest rate microloans to startup, newly 
     established, and growing rural microbusiness concerns; and 
     (ii), in conjunction with the loans provide grants for the 
     purpose of providing intensive marketing, management, and 
     technical assistance to small businesses. The term of the 
     loan is to be 20 years and the loan is to bear an annual 
     interest rate of at least 1 percent. The Secretary has the 
     discretion to defer payments, both principal and interest, 
     for 2 years beginning on the date the loan is made. The 
     amount of a grant given in connection with the loan program 
     is not to be more than 25 percent of the total outstanding 
     balance of the loan the organization received and, as a 
     condition of receiving a grant, the qualified organization is 
     required to match not less than 15 percent of the total 
     amount of the grant.
       No more than 10 percent of the assistance received by a 
     qualified organization is to be used to pay administrative 
     expenses. An organization that receives either a rural 
     entrepreneurship and microenterprise grant or a rural 
     microloan has to provide the Secretary any information that 
     the Secretary requires to ensure that the grant or loan is 
     being used for its intended purposes. (Section 6013)
       The Senate amendment amends Subtitle D of the Con Act by 
     authorizing the Secretary to establish a Rural 
     Microenterprise Program to provide low-or-moderate income 
     individuals with the skills necessary to establish a new 
     rural microenterprise and to continue technical and financial 
     assistance to rural microenterprises. The Senate and House 
     sections are substantially similar; however, the Senate 
     section requires the Secretary to ensure that grant 
     recipients include microenterprise development organizations 
     of varying sizes and that serve racially and ethnically 
     diverse populations.
       Mandatory funding of $40,000,000, to remain available until 
     expended, is provided starting in fiscal year 2008. Not less 
     than $25,000,000 of the funds provided are to be used to 
     carry out grants for the Rural Microenterprise Program. Not 
     less than $15,000,000 of the funds provided are to be used to 
     carry out the Rural Microloan Program; of that amount, not 
     more than $7,000,000 is to be used to support direct loans. 
     In addition to mandatory funding, an authorization of 
     appropriations is provided for each of fiscal years 2009 
     through 2012 to carry out this program. (Section 6022)
       The Conference substitute adopts the House provision with 
     modifications. The Conference substitute strikes as an 
     eligible use of program funding research and development of 
     best practices in delivering training, technical assistance 
     and microcredit to rural microenterprises. Additionally, the 
     Conference substitute provides $15,000,000 in mandatory 
     funding, to remain available until expended, in the following 
     years: fiscal year 2009 ($4,000,000); fiscal year 2010 
     ($4,000,000); fiscal year 2011 ($4,000,000); and fiscal year 
     2012 ($3,000,000). (Section 6022)
       The Managers intend that the Microentrepreneur Assistance 
     Program will be used to assist microenterprises located in 
     rural areas. However, a microenterprise development 
     organization receiving assistance under the program need not 
     be located in a rural area to be eligible to participate. A 
     microenterprise development organization is eligible so long 
     as the organization provides assistance to microentrepreneurs 
     located in rural areas, facilitates access to capital for a 
     microenterprise in a rural area, or has a demonstrated record 
     of delivering services to microentrepreneurs located in a 
     rural area.
       In addition, in making grants available to microenterprise 
     development organizations to support microenterprise 
     development, the Managers intend that the Secretary shall not 
     require an organization to have received a loan in order to 
     receive a grant under subsection (b)(4)(a).
     (20) Criteria to be applied in considering applications for 
         rural development projects.
       The House bill amends subtitle D of the Con Act by 
     authorizing the Secretary to review the income demographics, 
     population density, and seasonal population increases, and 
     other factors as determined by the Secretary, for eligible 
     communities that submit applications for rural development 
     programs authorized or modified by title VI of the 2007 Farm 
     Bill, or section 306, 306A, 306C, 306D, 306E, 310(c), 310(e), 
     310B(b), 310B(c), 310B(e), or 370B, or subtitles F, G, H, or 
     I, of the Con Act.
       The Secretary is authorized to issue regulations to 
     establish the limitation that a rural area cannot exceed in 
     order to remain eligible for rural development funds. 
     (Section 6014)
       The Senate amendment contains no comparable provision.
       The Conference substitute deletes the House provision.
     (21) National sheep industry improvement center
       The House bill provides for the continuation of the 
     National Sheep Industry revolving fund to promote strategic 
     development activities and collaborative efforts to 
     strengthen and enhance the production and marketing of sheep 
     or goat products in the United States; by optimizing the use 
     of available human capital and resources within the sheep 
     and goat industries, and adopting flexible and innovate 
     approaches to solving the long-term needs of the U.S. 
     sheep or goat industry.
       The House bill eliminates the requirement that the National 
     Sheep Industry Improvement Center be required to privatize 
     its revolving fund and authorizes appropriations of 
     $10,000,000 for each of the fiscal years 2008 through 2012. 
     (Section 6015)
       The Senate amendment renames the program as the National 
     Sheep and Goat Industry Improvement Center. The Senate 
     amendment also eliminates the requirement that the National 
     Sheep Industry Improvement Center be required to privatize 
     its revolving fund. The Senate amendment provides for new 
     mandatory funding of $1,000,000 for fiscal year 2008, to be 
     available until expended, and authorizes $10,000,000 for each 
     of the fiscal years 2008 through 2012 for infrastructure 
     development, business planning, production, resource 
     development and market and environmental research. (Section 
     11009)
       The Conference substitute adopts the Senate provision with 
     modifications. It retains the existing name of the Center and 
     provides $1,000,000 in mandatory funds for the Center. 
     (Section 11009 of the Livestock Title)
     (22) National rural development partnership
       The House bill extends authorization through 2012. (Section 
     6016)
       The Senate amendment extends the authorization to 2012 and 
     amends subsection (h) of section 378 of the Con Act by 
     establishing the termination date for this authority as 
     September 30, 2012. (Section 6024)
       The Conference substitute adopts the House provision. 
     (Section 6019)
     (23) Historic barn preservation
       The House bill amends section 379A(c) of the Con Act by 
     extending the authorization for this program through 2012 and 
     providing that the Secretary, in making grants, is to give 
     the highest priority to funding projects that identify, 
     document, and conduct research on historic barns and that 
     develop and evaluate appropriate techniques or best practices 
     for protecting historic barns. (Section 6017)
       The Senate amendment establishes that a grant may be made 
     to an eligible applicant for ``eligible projects'' that 
     rehabilitate or repair historic barns; preserve historic 
     barns; and identify, document, survey, and conduct research 
     on historic barns or farm structures and that evaluate 
     techniques or best practices for protecting these structures. 
     (Section 6025)
       The Conference substitute adopts the House provision with 
     technical changes. (Section 6020)
     (24) NOAA weather transmitters
       The House bill is the same as section 379B of the Con Act. 
     The authorization remains the same and is extended through 
     2012. (Section 6018)
       The Senate amendment is identical to the House bill. 
     (Section 6026)
       The Conference substitute adopts the House provision. 
     (Section 6021)
     (25) Delta Regional Authority
       The House bill provides for the extension of the Delta 
     Regional Authority (DRA) to 2012. (Section 6019)
       The Senate amendment provides for the extension of the 
     (DRA) and also authorizes the Secretary to award grants to 
     the Delta Health Alliance (DHA) for the development of health 
     care services, health educational programs, health care job 
     training, and for public health facilities in the Delta 
     region. The DHA must solicit input from local governments, 
     public health care providers and other entities in the 
     Mississippi Delta region. (Section 6029)
       The Conference substitute adopts the House provision with 
     modifications to add counties to the eligible region for the 
     DRA. (Section 6025) In addition, the Conference substitute 
     establishes a separate section called Health Care Services, 
     which authorizes $3,000,000 annually for each of fiscal years 
     2008 through 2012 for healthcare services in the Delta Region 
     to be provided by a consortium of regional institutions. 
     (Section 6024)
       The Managers note that, for the purposes of the Delta 
     Health Care Services provision, the term ``Delta region'' 
     refers to the Mississippi River Delta region. The Managers 
     recognize the serious unmet health needs in this region and 
     authorize this program with the goal of promoting 
     collaboration among entities that are working in the region 
     to provide access to quality health care.
     (26) Northern Great Plains Regional Authority
       The House bill provides for an extension of the Northern 
     Great Plains Regional Authority (NGPRA), which provides 
     funding for programs and projects designed to serve the needs 
     of distressed counties and isolated areas of distress in the 
     States of Iowa, Minnesota, Nebraska, North Dakota and South 
     Dakota. The House bill broadens the Authority's support for 
     resource conservation districts.
       The House bill makes several modifications to the authority 
     by: (1) changing the formula for the Federal share of the 
     NGPRA's administrative expenses--the formula is: for fiscal 
     year 2007, 100 percent; for fiscal year 2008, 75 percent; and 
     for fiscal

[[Page H3620]]

     year 2009, 50 percent; (2) eliminating the order of priority, 
     with respect to funding for economic and community 
     development projects, and the prohibition on providing funds 
     for projects located in nondistressed counties; (3) and 
     reducing to 25 percent, the minimum amount of funds that the 
     authority is to allocate to transportation, 
     telecommunication, and public infrastructure projects.
       The House bill also adds ``renewable energy projects'' 
     among the projects that are eligible to receive funds. 
     (Section 6020)
       The Senate amendment provides for an extension of the NGPRA 
     and makes changes similar to the House, with respect to 
     renewable energy investments and the proportion of funds made 
     available to distressed counties. The Senate amendment allows 
     the NGPRA to organize and operate without a Federal member if 
     such a member has not been confirmed by the Senate 180 days 
     after enactment. With respect to the tribal chairperson, the 
     Senate amendment allows the leaders of the Indian tribes in 
     the region to select a member if a tribal chairperson has not 
     been confirmed by the Senate within 180 days of enactment.
       The Senate amendment provides that, among other duties, the 
     NGPRA is to develop comprehensive and coordinated plans and 
     programs for multistate cooperation to advance the economic 
     and social well-being of the region and approve grants for 
     the economic development of the Northern Great Plains 
     region. Additionally, the assessment of needs and assets 
     of the region should include available research, 
     demonstrations, investigations, assessments, and 
     evaluations from the regional boards established under the 
     Rural Collaborative Investment Program (RCIP).
       The Senate amendment provides that the NGPRA should enhance 
     the capacity of, and provide support for, multistate 
     development and research organizations, local development 
     organizations and districts, and resource conservation 
     districts in the region.
       The Senate amendment amends section 383B(g)(1) of the Con 
     Act by providing a 100 percent Federal cost-share for fiscal 
     years 2008 and 2009, a 75 percent Federal cost-share for 
     fiscal year 2010, and a 50 percent Federal cost-share for 
     fiscal year 2011 and beyond.
       The Senate amendment adds a new provision to provide 
     assistance to States in developing plans to address 
     multistate economic issues, including plans to: develop a 
     regional transmission system for the movement of renewable 
     energy; assist in the harmonization of transportation 
     policies and regulations that impact the interstate movement 
     of goods and individuals; encourage and support interstate 
     collaboration on federally-funded research of national 
     interest; and establish regional working groups on 
     agriculture development and transportation concerns.
       Multistate economic issues are to include: renewable energy 
     development and transmission, transportations planning and 
     economic development, information technology, movement of 
     freight and persons in the region; conservation land 
     management, and federally funded research.
       The Senate amendment would allow grants to be awarded to 
     multistate, local or regional development district 
     organizations for administrative expenses. Grants may not 
     exceed 80 percent of the administrative expenses of the local 
     development district and no grant may exceed 3 years in 
     duration. The contribution of the grantee may be in cash or 
     in-kind, fairly evaluated, and can include equipment, space 
     and services.
       The Senate amendment removes the requirement for local 
     development districts to serve as lead organizations and 
     liaison between State, tribal, and local governments, 
     nonprofit groups, the business community, and citizens. 
     (Section 6030)
       The Conference substitute adopts the Senate amendment, but 
     modifies it to require that the NGPRA consult and coordinate, 
     as appropriate, with tribal leaders in the region should a 
     Federal or tribal chairperson not be appointed and confirmed. 
     Generally, a local development district will operate as the 
     lead organization serving a multicounty area in the region. 
     However, the Federal cochairperson, or the Secretary, if no 
     person has been confirmed, may designate an Indian tribe or 
     an alternative organization to serve in that capacity. 
     Organizations that are suitable to serve in such a capacity 
     include rural conservation and development districts, a Rural 
     Economic Area Partnership (REAP) zone organizations, or 
     regional organizations established under RCIP. (Section 6026)
     (27) Rural Collaborative Investment Program/Rural Strategic 
         Investment Program
       The House bill provides for the extension of the rural 
     strategic investment program (RSIP) in section 385E of the 
     Con Act with an authorization of appropriations of 
     $25,000,000 for fiscal years 2008 through 2012. The 
     preservation and promotion of ``rural heritage,'' as defined 
     in this section, are added to the criteria for regional 
     plans, for the purpose of making regional strategic planning 
     grants--which are competitive grants awarded to Regional 
     Boards for the purpose of developing, maintaining, and 
     evaluating regional plans.
       In awarding innovation grants, the National Board is to 
     give priority to Regional Boards that, among other criteria, 
     demonstrate a plan to protect and promote rural heritage. 
     (Section 6021)
       The Senate amendment amends section 385A of the Con Act by 
     establishing a Regional Rural Collaborative Investment 
     Program (RCIP) to provide rural regions with a flexible 
     investment vehicle to develop and implement locally 
     prioritized, comprehensive strategies for achieving regional 
     competitiveness, innovation and prosperity.
       The Senate amendment requires the Secretary to appoint a 
     National Rural Investment Board and establish a National 
     Institute on Regional Rural Competitiveness and 
     Entrepreneurship. The National Institute on Regional Rural 
     Competitiveness and Entrepreneurship will work with the 
     Secretary to create a National Rural Investment Plan and a 
     Rural Philanthropic Initiative, certify Regional Rural 
     Investment Boards, and make Regional Innovation Grants to 
     Regional Boards to implement approved regional strategies. 
     These Regional Boards are to be multijurisdictional, 
     multisectoral, regional entities which are broadly 
     representative of the long-term economic, community and 
     cultural interests of a region, and are comprised of public, 
     private and non-profit organizations and residents of the 
     region. A region must include a population of at least 25,000 
     individuals or in regions with a population density of less 
     than 2 persons per square mile, a population of at least 
     10,000 individuals. The Regional Board designs a Regional 
     Investment Strategy and competes for Regional Innovation 
     Grants.
       Grants of not more than $150,000 are to be provided on a 
     competitive basis to certified Regional Boards to develop, 
     implement and maintain Regional Investment Strategies, 
     developed through a collaborative and inclusive public 
     process. Regional Investment Strategies are to provide an 
     assessment of the region's competitive advantage, an analysis 
     of the region's economic and community development 
     challenges, opportunities, and resources, a plan of action to 
     implement the goals of the strategies identified, and 
     performance measures by which to evaluate implementation.
       Regional Innovation Grants shall be provided on a 
     competitive basis to certified Regional Boards, to implement 
     projects and programs identified in funded Regional 
     Investment Strategy Grants. The Secretary is to give priority 
     to strategies that demonstrate significant leverage of 
     capital, quality job creation, and asset-based development. A 
     Regional Board may not receive more than $6,000,000 in 
     Regional Innovation Grants during any 5-year period.
       Long-term loans may be provided to eligible community 
     foundations to assist in the implementation of funded 
     Regional Investment Strategies. The eligible community 
     foundation must be located in the covered region, provide a 
     25 percent match, and use the funds to implement priorities 
     within the Regional Investment Strategy.
       The Senate amendment provides $135,000,000 in mandatory 
     funding to remain available until expended. Of the amounts 
     made available, the Secretary is to use $15,000,000 for 
     Regional Investment Strategy Grants, $110,000,000 for 
     Regional Innovation Grants, $5,000,000 to administer the 
     National Board, and $5,000,000 to administer the National 
     Institute. (Section 6032)
       The Conference substitute adopts the Senate provision, with 
     modifications to incorporate rural heritage as a goal of the 
     program. An appropriation of $135,000,000 is authorized for 
     fiscal years 2009 through 2012 to carry out this program. 
     (Section 6028)
     (28) Northern Border Economic Development Commission
       The Senate amendment adds a new subtitle to the Con Act 
     that establishes the Northern Border Economic Development 
     Commission (NBEDC) made up of a Federal member appointed by 
     the President with the advice and consent of the Senate. The 
     membership of the Commission includes the Governors of each 
     State in the region that elects to participate in the 
     Commission. The State cochairperson is a Governor of a 
     participating State in the region. The State cochairperson 
     will serve for a term of not less than a year. Each State 
     member may have a single alternate, who is appointed by the 
     Governor of the State from among the Governor's cabinet. Each 
     Commission may appoint and fix the compensation of an 
     executive director to carryout the duties of the Commission.
       Although the Commission has the authority to determine what 
     constitutes a quorum of the Commission, the Federal 
     cochairperson must be present to reach a quorum. Alternate 
     members cannot be counted toward the quorum. Decisions, such 
     as approval of State, regional, or subregional development 
     plans or strategy statements, allocations to States, and 
     modifications to the Commission's code, may not be made 
     without a quorum.
       The Senate amendment establishes the duties and 
     administrative actions of the Commission. The amendment 
     specifies that the Commission is required to submit an annual 
     report to Congress. In addition, Federal agencies are 
     required to work with the Commission.
       Any State member, alternate, official, or employee of the 
     Commission, their immediate family, organization, or 
     organization for which the employee has an arrangement 
     concerning prospective employment, are prohibited from 
     participating personally or substantially in a matter in 
     which the employee has a financial interest. A conflict of 
     interest can be overcome by full disclosure to the Commission 
     and a subsequent determination by the Commission that the 
     matter will not substantially affect the integrity of the 
     work of the Commission.
       The Senate amendment confers upon the Commission the 
     authority to approve grants

[[Page H3621]]

     to improve economic development of the region. Grants may be 
     provided from Federal appropriations, other Federal and State 
     grant funds, or any other sources. The Federal cochairperson 
     is permitted to use funds made available to the program to 
     fund any portion of the basic Federal contribution to a 
     project of activity under a Federal grant program in the 
     region in an amount not to exceed 80 percent of the project 
     cost. The Commission is also permitted to make grants to 
     local development districts for administrative expenses as 
     long as the grant does not exceed 80 percent of the 
     administrative expense of the local development district 
     receiving the grant.
       States participating in the Commission are required to 
     submit a development plan for the area of the region 
     represented by the State member. In developing the plan, the 
     State must consult with the appropriate organizations. The 
     Commission is to encourage public participation in developing 
     such plans. Any State or regional development plan or any 
     multistate subregional plan that is proposed must be reviewed 
     by the Commission.
       An appropriation of $30,000,000 is authorized for each of 
     fiscal years 2008 through 2012; not more than 5 percent of 
     the appropriated amount is to be used for administrative 
     expenses. The authority of the Commission is terminated on 
     October 1, 2012. (Section 6034)
       The House contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     modifications to establish the Northern Border Regional 
     Commission, the Southeast Crescent Regional Commission, and 
     the Southwest Border Regional Commission in a new subtitle 
     ``Regional Economic and Infrastructure Development'' in Title 
     40 of the U.S. Code. (Section 14217 of the Miscellaneous 
     Title )
       The Conference substitute establishes commission 
     membership, voting structure, and staffing; outlines 
     conditions for financial assistance; authorizes grants to 
     local development districts; establishes an Inspector General 
     for the commissions; and includes other provisions designed 
     to produce a standard administrative framework.
       Each Commission includes a Federal cochairperson, appointed 
     by the President and confirmed by the Senate. The Federal 
     Cochairperson will appoint an alternate Federal 
     cochairperson. The membership of the Commission also includes 
     the Governors of each State in the region that elects to 
     participate in the Commission. The State cochairperson is a 
     Governor of a participating State in the region. The State 
     cochairperson will serve for a term of not less than a year. 
     Each State member may have a single alternate, who is 
     appointed by the Governor of the State from among the 
     Governor's cabinet. Each Commission may appoint and fix the 
     compensation of an executive director to carryout the duties 
     of the Commission.
       Each State member is required to submit a development plan 
     for the area of the region represented by the State member. 
     In carrying out the development planning process, a State 
     will consult with local development districts, local units of 
     government, and universities and take into account the goals, 
     objectives, and recommendations of these entities. Each 
     Commission is to establish priorities in an economic and 
     infrastructure development plan for its region, including 5-
     year regional outcome targets. The Commission will, to the 
     extent practicable, encourage and assist public participation 
     in the plans and programs of the Commission.
       The Commission is authorized to hold hearings, take 
     testimony under oath, and request information from State and 
     Federal agencies; adopt, amend, and repeal bylaws and rules 
     governing the conduct of Commission; request the head of any 
     Federal department or of any State agency or local government 
     to detail to the Commission personnel needed to carry out the 
     duties of the Commission; provide Commission employees with 
     retirement and other benefits; accept, use, and dispose of 
     gifts; enter into contracts to carry out Commission duties; 
     establish a central office and field offices for the 
     Commission; and provide an appropriate level of 
     representation in Washington, DC.
       The Federal Government will pay 50 percent of the 
     administrative expenses of the Commission and the States 
     participating in the Commission will pay 50 percent of such 
     expenses. Each Commission is required to hold an initial 
     meeting no later than 180 days after the date of enactment of 
     this Act.
       Any State member, alternate, official, or employee of the 
     Commission, their immediate family, organization, or 
     organization for which the employee has an arrangement 
     concerning prospective employment, are prohibited from 
     participating personally or substantially in a matter in 
     which the employee has a financial interest. A conflict of 
     interest can be overcome by full disclosure to the 
     Commission and a subsequent determination by the 
     Commission that the matter will not substantially affect 
     the integrity of the work of the Commission.
       Governments of Indian tribes in the region of the Southwest 
     Border Regional Commission are allowed to participate in 
     matters in the same manner and to the same extent as State 
     agencies and instrumentalities in the region.
       Not less than 90 days after the last day of each fiscal 
     year, each Commission will submit to the President and 
     Congress a report on the activities carried out by the 
     Commission in the past fiscal year. The report will include a 
     description of the criteria used by the Commission to 
     designate counties, a list of the counties designated in each 
     category, an evaluation of the progress of the Commission in 
     meeting the goals identified in the Commission's economic and 
     infrastructure development plan, and any policy 
     recommendations approved by the Commission.
       Each Commission may make grants to State and local 
     governments, Indian tribes, and public or nonprofit 
     organizations for projects to develop infrastructure in the 
     region, including transportation, public, and 
     telecommunications infrastructure; assist the region in 
     obtaining job skills training; provide assistance to severely 
     economically distressed and underdeveloped areas that lack 
     financial resources for improving basic health care and other 
     public services; promote resource conservation; promote the 
     development of renewable and alternative energy sources; and 
     other measures to achieve the purposes of this subtitle.
       The Commission will allocate at least 40 percent of any 
     grant amounts provided for transportation, public, or 
     telecommunications infrastructure for the region. The 
     Commission may use amounts appropriated to carry out this 
     subtitle to fund a project or activity under a Federal grant 
     program in the region in an amount that is above the fixed 
     maximum portion of the cost of the project otherwise 
     authorized by applicable law, but may not exceed 50 percent 
     of the costs of the project, except for distressed counties 
     or regional projects. The maximum contribution for a project 
     or activity to be carried out in a distressed county may be 
     increased to 80 percent. A Commission may increase the 
     maximum grant for a project from 50 percent to 60 percent 
     under the normal criteria of section 15501 and from 80 
     percent to 90 percent for a distressed county if the project 
     or activity involves three or more counties or more than one 
     State and the Commission determines that the project or 
     activity will bring significant inter-state or multi-county 
     benefits to a region.
       An application to a Commission for a grant or any other 
     assistance for a project is to be made through, and evaluated 
     for approval by, the State member of the Commission 
     representing the applicant. Upon certification by a State 
     member of a Commission of an application for a grant or other 
     assistance for a specific project under this section, an 
     affirmative vote of the Commission shall be required for 
     approval of the application.
       Each Commission is required, in considering programs and 
     projects to be provided assistance and in establishing a 
     priority ranking of the requests for assistance, to consider: 
     the relationship of the project or class of projects to 
     overall regional development; the per capita income and 
     poverty and unemployment and out migration rates in an area; 
     the financial resources available to the applicants for 
     assistance seeking to carry out the project; the importance 
     of the project in relation to the other projects that may be 
     in competition for the same funds; the prospects that the 
     project will improve opportunities for employment, the 
     average level of income, or the economic development of the 
     area on a continuing basis; and the extent to which the 
     project design provides for detailed outcome measurements by 
     which grant expenditures and the results of the expenditures 
     may be evaluated.
       The Commission may make grants to a local development 
     district to assist in the payment of development planning and 
     administrative expenses. In the case of a State agency 
     certified as a local development district, a grant may not be 
     awarded to the agency under this section for more than 3 
     fiscal years. The contributions of a local development 
     district for administrative expenses may be in cash or in-
     kind services including space, equipment, and services.
       A local development district is to operate as a lead 
     organization serving multi-county areas in the region at the 
     local level and serve as a liaison between the State and 
     local governments, nonprofit organizations, the business 
     community, and citizens that are involved in multi-
     jurisdictional planning; provide technical assistance; and 
     provide leadership and civic development assistance.
       Supplements to Federal grant programs may be made because 
     certain States and local communities, including local 
     development districts, may be unable to take maximum 
     advantage of Federal grant programs for which they are 
     eligible because they lack the economic resources to provide 
     the required State or local matching share. Supplemental 
     funds may also provide necessary funding for a project to be 
     carried out in the region when there are insufficient funds 
     available under applicable Federal law.
       A Commission, with the approval of the Federal 
     cochairperson, may use amounts made available to carry out 
     this subtitle for any part of the basic Federal contribution 
     to projects or activities under the Federal grant programs 
     authorized by Federal laws and to increase the Federal 
     contribution to projects and activities under the programs 
     above the fixed maximum part of the cost of the projects or 
     activities otherwise authorized by the applicable law.
       For a project for which any part of the basic Federal 
     contribution to the project or activity under a Federal grant 
     program is proposed to be made under this subtitle, the 
     Federal contribution is not to be made until the responsible 
     Federal official administering the Federal law authorizing 
     the Federal contribution certifies that the program, project, 
     or activity meets the applicable requirements of the Federal 
     law and could be

[[Page H3622]]

     approved for Federal contribution under that law if amounts 
     were available under the law for the program, project, or 
     activity. Amounts provided pursuant to this subtitle are 
     available without regard to any limitations on areas eligible 
     for assistance or authorizations for appropriation in any 
     other law.
       The Federal share of the cost of a project or activity 
     receiving assistance under this subtitle shall not exceed 80 
     percent.
       A State is not required to engage in or accept a program 
     under this subtitle without its consent.
       The Conference substitute establishes the designation of 
     distressed, transitional, and attainment counties and 
     isolated areas of distress in the region. Not later than 90 
     days after the date of enactment of this Act, and annually 
     thereafter, each Commission is required to designate counties 
     under 4 categories. The categories will include: (1) 
     distressed counties, defined as counties that are the most 
     severely and persistently economically distressed and 
     underdeveloped and have high rates of poverty, 
     unemployment, or out migration; (2) transitional counties, 
     defined as counties that are economically distressed and 
     underdeveloped or have recently suffered high rates of 
     poverty, unemployment, or out migration; (3) attainment 
     counties, which are counties that are not designated as 
     distressed or transitional counties; and (4) isolated 
     areas of distress, defined as areas, located in counties 
     designated as attainment counties, that have high rates of 
     poverty, unemployment, or out migration.
       A Commission is to allocate at least 50 percent of the 
     appropriations made available to the Commission to carry out 
     this subtitle for programs and projects designed to serve the 
     needs of distressed counties and isolated areas of distress 
     in the region.
       No funds may be provided to a county designated as an 
     attainment county except for funding the administrative 
     expenses of local development districts, a multi-county 
     project that includes participation of the attainment county, 
     and other projects if a Commission determines that the 
     project could bring significant benefits to areas of the 
     region outside the attainment county.
       For the isolated area of distress designation to be 
     effective, the designation must be supported by the most 
     recent Federal data available or if no recent Federal data 
     are available, by the most recent data available.
       Counties are not eligible for assistance in more than 1 
     region. A political subdivision included in the region of 
     more than 1 Commission will select the Commission with which 
     it will participate by notifying, in writing, the Federal 
     cochairperson and the appropriate State member of the 
     Commission. The selection of a Commission by a political 
     subdivision will apply in the fiscal year in which the 
     selection is made and will apply in each subsequent fiscal 
     year unless the political subdivision, at least 90 days 
     before the first day of the fiscal year, notifies another 
     Commission in writing that the political subdivision will 
     participate in that Commission and also transmits a copy of 
     such notification to the Commission in which the political 
     subdivision is currently participating. In this section, the 
     term ``Commission'' includes the Appalachian Regional 
     Commission.
       An Inspector General for Commissions, appointed in 
     accordance with the Inspector General Act of 1978, is 
     established for each Commission. All of the Commissions are 
     to be subject to a single Inspector General. Each Commission 
     is to maintain accurate and complete records of all 
     transactions and activities of the Commission and make them 
     available to the Inspector General for audit and examination. 
     The Inspector General will audit the activities, 
     transactions, and records of each Commission annually.
       Representatives of each Commission, the Appalachian 
     Regional Commission, and the Denali Commission will meet 
     biannually to discuss issues confronting regions suffering 
     from chronic and continuous distress as well as successful 
     strategies for promoting regional development. The chair of 
     each meeting will rotate among the Commissions, with the 
     Appalachian Regional Commission to host the first meeting.
       The region of the Southeast Crescent Regional Commission is 
     defined as consisting of all counties of the States of 
     Virginia, North Carolina, South Carolina, Georgia, Alabama, 
     Mississippi, and Florida not already served by the 
     Appalachian Regional Commission or the Delta Regional 
     Authority.
       The region of the Southwest Border Regional Commission is 
     defined as consisting of the following political 
     subdivisions:
       (1) ARIZONA--The counties of Cochise, Gila, Graham, 
     Greenlee, La Paz, Maricopa, Pima, Pinal, Santa Cruz, and Yuma 
     in the State of Arizona.
       (2) CALIFORNIA--The counties of Imperial, Los Angeles, 
     Orange, Riverside, San Bernardino, San Diego, and Ventura in 
     the State of California.
       (3) NEW MEXICO--The counties of Catron, Chaves, Dona Ana, 
     Eddy, Grant, Hidalgo, Lincoln, Luna, Otero, Sierra, and 
     Socorro in the State of New Mexico.
       (4) TEXAS--The counties of Atascosa, Bandera, Bee, Bexar, 
     Brewster, Brooks, Cameron, Coke, Concho, Crane, Crockett, 
     Culberson, Dimmit, Duval, Ector, Edwards, El Paso, Frio, 
     Gillespie, Glasscock, Hidalgo, Hudspeth, Irion, Jeff Davis, 
     Jim Hogg, Jim Wells, Karnes, Kendall, Kenedy, Kerr, Kimble, 
     Kinney, Kleberg, La Salle, Live Oak, Loving, Mason, Maverick, 
     McMullen, Medina, Menard, Midland, Nueces, Pecos, Presidio, 
     Reagan, Real, Reeves, San Patricio, Shleicher, Sutton, Starr, 
     Sterling, Terrell, Tom Green Upton, Uvalde, Val Verde, Ward, 
     Webb, Willacy, Wilson, Winkler, Zapata, and Zavala in the 
     State of Texas.
       The region of the Northern Border Regional Commission is 
     defined to include the following counties:
       (1) MAINE--The counties of Androscoggin, Aroostook, 
     Franklin, Hancock, Kennebec, Knox, Oxford, Penobscot, 
     Piscataquis, Somerset, Waldo, and Washington in the State of 
     Maine.
       (2) NEW HAMPSHIRE--The counties of Carroll, Coos, Grafton, 
     and Sullivan in the State of New Hampshire.
       (3) NEW YORK--The counties of Cayuga, Clinton, Essex, 
     Franklin, Fulton, Hamilton, Herkimer, Jefferson, Lewis, 
     Madison, Oneida, Oswego, Seneca, and St. Lawrence in the 
     State of New York.
       (4) VERMONT--The counties of Caledonia, Essex, Franklin, 
     Grand Isle, Lamoille, and Orleans in the State of Vermont.
       An authorization of $30,000,000 is provided for each of 
     fiscal years 2008 through 2012 for each Commission to carry 
     out this subtitle; not more than 10 percent of the funds made 
     available to a Commission in a fiscal year may be used for 
     administrative expenses.
       The Managers note that within the Southeastern region of 
     the United States--defined for the purposes here to include 
     the coastal and central portions of the seven Southeastern 
     States from Virginia to Mississippi--approximately 40 percent 
     of the counties have had 20 percent or more of their citizens 
     living in poverty, on average, during the last 30 years. 
     Additionally, this region has experienced natural disasters 
     at a rate of 2 to 3 times greater than any other region of 
     the U.S. The Southeastern United States is one of the last 
     areas of the country without a Federal authority dedicated to 
     ending poverty and strengthening communities. The Southeast 
     Crescent Authority will be a valuable tool to assist State 
     and local officials, county development organizations, and 
     many others in providing resources and leveraging additional 
     funds to assist communities with the greatest need.
       With regards to the Southwest border, an Interagency Task 
     Force on the Economic Development of the Southwest Border 
     found that 20 percent of the residents in this region live 
     below the poverty level. Unemployment rates often reach as 
     high as 5 times the national unemployment rate and a lack of 
     adequate access to capital has created economic disparities 
     that have made it difficult for businesses to start up in the 
     region. Border communities have long endured a depressed 
     economy and low-paying jobs. The Southwest Border Regional 
     Commission will help foster planning to encourage 
     infrastructure development, technology development and 
     deployment, education and workforce development, and 
     community development through entrepreneurship.
       Finally, the Northern Border region, while abundant in 
     natural resources and rich in potential, lags behind much of 
     the nation in its economic growth. In this region, 12.5 
     percent of the population lives in poverty. Furthermore, the 
     median household income in this region is more than $6,500 
     below the national average. Due to this region's historic 
     reliance on a few basic industries and agriculture, 
     unemployment through layoffs in traditional manufacturing 
     industries is persistent. In addition, the population growth 
     in this region increased by only 0.6 percent between 1990 and 
     2000, while the U.S. population rose by 13.2 percent during 
     that same period. The Northern Border Regional Commission 
     will assist in supporting traditional industries while 
     fostering new industry in the region.
     (29) Multijurisdictional regional planning organizations
       The Senate amendment reauthorizes section 306(a) of the Con 
     Act through fiscal year 2012. (Section 6005)
       The House bill contains no comparable provision.
       The conference substitute deletes the Senate provision.
     (30) Rural Economic area partnership zones
       The Senate amendment amends section 310B of the Con Act by 
     requiring the Secretary to continue to carry out the existing 
     rural economic area partnerships in New York, North Dakota, 
     and Vermont in accordance with terms and conditions contained 
     in the memorandums of agreement entered into by the Secretary 
     through 2012. (Section 6019)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     modifications to ensure that only those rural economic area 
     partnership zones in effect on date of enactment are to be 
     extended to 2012. (Section 6017)
     (31) SEARCH grants
       The Senate amendment amends section 306(a) of the Con Act 
     by authorizing the Secretary to make grants to eligible 
     communities for feasibility study, design, and technical 
     assistance under the water and waste disposal and wastewater 
     facilities grant program. The grants are to fund up to 100 
     percent of the eligible project cost and are to be subjected 
     to the least documentation requirements practicable.
       An ``eligible community,'' for the purposes of this 
     section, is defined as a community that has a population of 
     2,500 or fewer inhabitants and is financially distressed. Not 
     more than 4 percent of funds available for water, waste 
     disposal and essential community facilities are to be used to 
     carry out this program. (Section 6010)

[[Page H3623]]

       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     modifications to ensure that the program is modeled after the 
     existing pre-development planning grants. (Section 6002)
       The Managers expect that a community will meet the 
     definition of ``financially distressed'' if the median 
     household income of the probable area to be served by the 
     proposed project is either below the poverty line or below 80 
     percent of the statewide nonmetropolitan median household 
     income based on available historic statistical information 
     going back to the last decennial census if no more recent 
     data is available. It is the Managers' intent that the latest 
     data on income be used without the taking of an income survey 
     that would escalate the cost.
     (32) Grants to broadcasting systems
       The Senate amendment reauthorizes current law through 
     fiscal year 2012. (Section 6016)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 6014)
     (33) Geographically disadvantaged farmers and ranchers.
       The Senate amendment establishes a new program to provide 
     geographically disadvantaged farmers and ranchers direct 
     reimbursement payments to transport agricultural commodities, 
     or inputs used to produce the commodities.
       To be eligible for direct reimbursement payments the farmer 
     or rancher must provide the Secretary proof that 
     transportation or agricultural commodity or inputs occurred 
     over the distance of more than 30 miles. The total amount of 
     direct reimbursement payments provided by the Secretary is 
     not to exceed $15,000,000 for each fiscal year. Necessary 
     sums are authorized to be appropriated to carry out this 
     program. (Section 6021)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     technical changes. (Section 1620 of the Commodity Title)
       The Managers recognize the barriers to competition 
     associated with the high transportation costs incurred by 
     geographically disadvantaged farmers and ranchers. The 
     Managers expect the Secretary to develop, in consultation 
     with the eligible areas, an equitable allocation of the funds 
     for such areas. The Managers also expect the Secretary to 
     consult with eligible areas on administration of the program.
     (34) Artisanal cheese centers
       The Senate amendment amends Subtitle D of the Con Act by 
     requiring the Secretary to establish artisanal cheese centers 
     for education and technical assistance for the manufacturing 
     and marketing of artisanal cheese by small and medium-sized 
     producers and businesses. Necessary sums are authorized to be 
     appropriated for each of the fiscal years 2008 through 2012 . 
     (Section 6023)
       The House bill contains no provision.
       The Conference substitute deletes the Senate provision.
     (35) Grants to train farmworkers in new technologies and to 
         train farm workers in specialized skills necessary for 
         higher value crops.
       The Senate amendment extends section 379(c) of the Con Act 
     through fiscal year 2012. (Section 6027)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (36) Grants for expansion of employment opportunities for 
         individuals with disabilities in rural areas
       The Senate amendment amends the Con Act by adding a new 
     section, 379E, which authorizes a new grant program to 
     nonprofit organizations to expand employment opportunities 
     for individuals with disabilities in rural areas.
       To be eligible to receive a grant under this section the 
     eligible entity must have: a significant focus on serving the 
     needs of individuals with disabilities; demonstrated 
     knowledge and expertise in employment of and advising on 
     accessibility issues for individuals with disabilities; 
     expertise in removing barriers to employment for individuals 
     with disabilities; existing relationships with national 
     organizations focused on the needs of rural areas; affiliates 
     in a majority of the States; and a working relationship with 
     USDA.
       Grants are to be used to expand or enhance employment 
     opportunities, or self-employment and entrepreneurship 
     opportunities, of people with disabilities. An appropriation 
     of $2,000,000 for each of the fiscal years 2008 through 2012 
     is authorized. (Section 6028)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     minor modifications that strike the requirements that the 
     entity have affiliates in a majority of States and a working 
     relationship with USDA. (Section 6023)
     (37) Rural Business Investment Program
       The Senate amendment extends the Rural Business Investment 
     Program authorization through 2012 with the following 
     modifications: debentures may be prepaid at any time, 
     distributions may be made to cover tax liability, USDA fees 
     are limited to a $500 application fee and USDA will not be 
     required to operate the program with other Federal agencies. 
     (Section 6031)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision, but 
     removes the provision allowing distributions to be made to 
     cover tax liability. The limitation on funding from certain 
     financial institutions is maintained and raised 25 percent. 
     (Section 6027)
     (38) Funding of pending rural development loan and grant 
         applications
       The Senate amendment provides $135,000,000 in mandatory 
     funding to fund applications that are pending for water 
     systems, waste disposal systems and emergency community water 
     assistance grants. (Section 6033)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     a modification to provide $120,000,000 in mandatory funds for 
     this purpose. (Section 6029)
     (39) Expansion of 911 areas
       The House bill extends through 2012 section 315(a) of the 
     Rural Electrification Act (REA), which authorizes the 
     Secretary to make telephone loans to State or local 
     governments, Indian tribes, or other public entities for the 
     expansion of rural 911 access and integrated emergency 
     communication in rural areas. (Section 6022)
       The Senate amendment also amends section 315 of the REA by 
     expanding eligibility to emergency communications providers, 
     State or local governments, Indian tribes, or other public 
     entities for facilities and equipment to expand or improve 
     911 access, interoperable emergency communications, homeland 
     security communications, transportation safety communication 
     and location technologies used outside urbanized areas. Funds 
     made available for telephone or broadband loans are 
     authorized to be used for the program for each of the fiscal 
     years 2008 through 2012. Government-imposed fees to emergency 
     communications providers are allowed as security for a loan. 
     (Section 6107)
       The Conference substitute adopts the Senate provision with 
     modifications to allow emergency communications equipment 
     providers to apply for loans on behalf of municipalities 
     where they serve when those municipalities are unable to 
     incur such debt. The Conference substitute also adds 
     clarifying language to ensure that the program operates only 
     in rural areas. (Section 6107)
     (40) Access to broadband telecommunications services in rural 
         areas
       The House bill provides for several modifications of 
     section 601 of the REA, which authorizes the Secretary to 
     provide loans and loan guarantees for the costs of 
     construction, improvement, and acquisition of facilities and 
     equipment for broadband service in eligible rural 
     communities.
       The House bill changes the definition of an ``eligible 
     rural community'' to include any area in the United States 
     that is not: included within the boundaries of any city, 
     town, borough, or village, whether incorporated or 
     unincorporated, with a population of more than 20,000 
     inhabitants; and the urbanized area contiguous and adjacent 
     to such a city or town. The term ``incumbent service 
     provider'' is defined to mean an entity that is providing 
     broadband service to at least 5 percent of the service area 
     proposed in the application.
       The House bill requires priority to be given to 
     applications proposing to serve communities in the following 
     order: (1) no incumbent service provider; (2) 1 incumbent 
     service provider; or (3) 2 incumbent service providers who, 
     together, serve not more than 25 percent of the households in 
     the service area proposed in the application.
       This section prohibits the Secretary from making a loan 
     under 2 conditions: (1) the loan is to any community where 
     there are more than 3 incumbent service providers, unless;
       (a) the loan is to an incumbent service provider of the 
     community;
       (b) the other providers in that community are notified of 
     the application before approval by the Secretary, and have 
     sufficient time to comment on the application; and
       (c) the application includes substantially increasing the 
     quality of broadband service in the community and the 
     provision of broadband service to unserved households inside 
     and outside the community; or
       (2) the loan is for new construction (i.e. the construction 
     or acquisition of broadband facilities and equipment by a new 
     entrant into the community) in any community in which more 
     than 75 percent of the households may obtain affordable 
     broadband service, on request, from at least 1 incumbent 
     service provider.
       The House bill authorizes the Secretary to take steps to 
     reduce the costs and paperwork associated with applying for a 
     loan or loan guarantee under this section by first-time 
     applicants, particularly those who are smaller and start-up 
     Internet providers. It also mandates that not more than 25 
     percent of loans are to be made available, in a single fiscal 
     year, to entities that serve more than 2 percent of the 
     telephone subscriber lines in the United States.
       The House bill provides that the period of a loan or loan 
     guarantee cannot exceed 35 years, as the borrower may 
     request, so long as the Secretary determines that the loan is 
     adequately secured; the Secretary is to consider whether the 
     recipient is, or would be, serving an area that is not 
     receiving broadband services.

[[Page H3624]]

       This section also requires the Secretary to ensure that the 
     type, amount, and method of security used to secure a loan or 
     loan guarantee is commensurate to the risk involved with the 
     loan or loan guarantee, particularly when the loan or loan 
     guarantee is issued to a financially healthy, strong, and 
     stable entity. The Secretary is also required, in determining 
     the amount and method of security, to consider reducing the 
     security in areas that do not have broadband service.
       The Secretary must annually report to Congress by December 
     1 of each fiscal year on the rural broadband loan and loan 
     guarantee program. The annual report is to include 
     information pertaining to the loans made, communities served, 
     speed of broadband service offered, and types of services 
     offered by applicants and recipients, length of time taken to 
     approve applications submitted, and outreach efforts 
     undertaken by USDA.
       The House bill establishes a ``National Center for Rural 
     Telecommunications Assessment'' to assess the effectiveness 
     of the rural broadband loan and loan guarantee program, 
     increase broadband penetration and purchase in rural areas; 
     and develop assessments of broadband availability in rural 
     areas. An appropriation of $1,000,000 is authorized for each 
     of the fiscal years 2008 through 2012 for the Center.
       The House bill mandates that the Secretary is required to 
     set aside 10 percent of appropriated funds for eligible 
     tribal communities. Unobligated amounts contained in the 
     reserve for tribal communities will be released by June 30 of 
     each fiscal year. (Section 6023)
       The Senate amendment maintains current law, with respect to 
     the purposes for which loans and loan guarantees may be made, 
     but provides that they should be provided to ``rural areas,'' 
     as defined in section 6105 of this Act. All references to 
     eligible rural communities have been changed to rural areas.
       The Senate amendment defines the term ``mobile broadband'' 
     to mean any ``broadband service'' that is provided over a 
     licensed spectrum through the use of a mobile station or 
     receiver communicating with a land station or other mobile 
     stations communicating among themselves.
       Under the Senate amendment, highest priority is to be given 
     to applicants that offer to provide broadband service to the 
     greatest proportion of households currently without broadband 
     service. A provider is considered to offer broadband service 
     to a rural area if the provider makes the service available 
     to households in the rural area at not more than average 
     prices as compared to the prices at which similar services 
     are made available in the nearest urban area, as determined 
     by the Secretary. Eligible entities are required to: submit a 
     proposal to the Secretary that meets the requirements for a 
     project to offer to provide service to a rural area; offer to 
     provide broadband service to at least 25 percent of 
     households in a specified rural area that do not currently 
     have such service offered to them; and agree to complete 
     buildout of the broadband service within 3 years.
       The Senate amendment prohibits the Secretary from making or 
     guaranteeing loans for projects in areas where 3 or more 
     existing providers already offer to provide comparable 
     service.
       The Secretary is given the discretion to require an entity 
     to provide a cost-share in an amount not to exceed 10 percent 
     of the amount of the loan or loan guarantee. The Secretary is 
     also given the discretion to require an entity that proposes 
     to have a subscriber projection of more than 20 percent of 
     the broadband market in a rural area to submit a market 
     survey. However, the Secretary is prohibited from requiring a 
     market survey from an entity that projects to have less than 
     20 percent of the broadband market.
       State, local governments, and Indian tribes are eligible to 
     receive loans or loan guarantees available under this 
     section.
       No entity may acquire more than 20 percent of the resources 
     of the program outlined under this section in a fiscal year.
       The Senate amendment requires the Secretary to include a 
     notice of applications on the Secretary's website for 90 
     days, post information relating to the broadband proposal on 
     the website, establish a timeline on the website to track 
     applications, and establish procedures for processing loan 
     and loan guarantee applications (including requests for 
     additional information). Not later than 45 days after the 
     date on which the Secretary approves an application the 
     documents necessary for closing the loan or loan guarantee 
     are to be provided to the applicant. Not later than 10 
     business days after the date of receipt of a valid 
     documentation requesting disbursement of the approved, closed 
     loan, the disbursement of the loan funds is to occur.
       The Senate amendment requires the Secretary to establish an 
     optional pre-application process under which an applicant may 
     apply to RUS for a binding determination of whether the area 
     proposed to be served is eligible prior to preparing a full 
     loan application.
       An application for a loan or a loan guarantee under this 
     section, or a petition for reconsideration of a decision on 
     such an application, is to be considered under eligibility 
     and feasibility criteria that are no less favorable to the 
     applicant than the criteria in effect on the original date of 
     submission of the application.
       The Senate amendment establishes the annual rate of 
     interest as the lower of: (i) the cost of borrowing to the 
     Treasury Department for comparable obligations; or (ii) 4 
     percent. The loan or loan guarantee may not exceed 30 years. 
     The type, amount, and method of security used to secure a 
     loan or loan guarantee is commensurate to the risk involved 
     with the loan or loan guarantee, particularly when the loan 
     or loan guarantee is issued to a financially healthy, strong, 
     and stable entity.
       Similar to the House bill, the Senate amendment provides 
     for a National Center for Rural Telecommunications 
     Assessment. The authorization of appropriations for the 
     Center is the same as the House bill. The Center is required 
     to submit an annual report that describes its activities, the 
     results of the research it has carried, and any additional 
     information that the Secretary may request.
       The Senate amendment allows the Secretary to provide the 
     proceeds of any loan made or guaranteed under the REA for the 
     purpose of refinancing another telecommunications-related 
     loan made under REA.
       An appropriation of $25,000,000 is authorized for each of 
     the fiscal years 2008 through 2012. (Section 6110)
       The Conference substitute adopts the Senate amendment with 
     modifications. The definition of incumbent service provider 
     is retained from the House bill.
       The Conference substitute maintains the definition of rural 
     area from the Senate amendment. The Conference substitute 
     prohibits the Secretary from making a loan in any area where 
     there are more than 3 incumbent service providers unless the 
     loan meets all of the following requirements: (1) the loan is 
     to an incumbent service provider that is upgrading service in 
     that provider's existing territory; (2) the loan proposes to 
     serve an area where not less than 25 percent of the 
     households are offered service by not more than 1 provider; 
     and (3) the applicant is not eligible for funding under 
     another provision of the REA.
       The Conference substitute also prohibits the Secretary from 
     making a loan in any area where not less than 25 percent of 
     the households are offered broadband service by not more than 
     1 provider unless a prior loan has been made in the same area 
     under this section.
       The Conference substitute provides that the highest 
     priority is to be given to applicants that offer to provide 
     broadband service to the greatest proportion of households 
     currently without broadband service. Eligible entities are 
     required to submit a proposal to the Secretary that meets the 
     requirements for a project to offer to provide service to a 
     rural area and agree to complete buildout of the broadband 
     service within 3 years.
       The Conference substitute prohibits any eligible entity 
     that provides telecommunications or broadband service to at 
     least 20 percent of the households in the United States from 
     receiving an amount of funds under this section for a fiscal 
     year in excess of 15 percent of the funds authorized and 
     appropriated for the broadband loan program.
       The Conference substitute allows the Secretary to require 
     an entity to provide a cost-share in an amount not to exceed 
     10 percent of the amount of the loan or loan guarantee. The 
     Secretary is also allowed to require an entity that proposes 
     to have a subscriber projection of more than 20 percent of 
     the broadband service market in a rural area to submit a 
     market survey. However, the Secretary is prohibited from 
     requiring a market survey from an entity that projects to 
     have less than 20 percent of the broadband market.
       The Conference substitute requires public notice of each 
     application submitted, including the identity of the 
     applicant, the proposed area to be served, and the estimated 
     number of households in the application without terrestrial-
     based broadband. The Conference substitute authorizes the 
     Secretary to take steps to reduce the costs and paperwork 
     associated with applying for a loan or loan guarantee under 
     this section by first-time applicants, particularly those who 
     are smaller and start-up Internet providers.
       The Conference substitute allows the Secretary to establish 
     a pre-application process under which a prospective applicant 
     may seek a determination of area eligibility.
       The Conference substitute provides that an application, or 
     a petition for reconsideration of a decision on such an 
     application, that was pending on the date 45 days before 
     enactment of this Act and that remains pending on the date of 
     enactment of this Act is to be considered under eligibility 
     and feasibility criteria in effect on the original date of 
     submission of the application.
       The current law rate of interest for direct loans--which is 
     the rate equivalent to the cost of borrowing to the 
     Department of Treasury for obligations of comparable maturity 
     or 4 percent--is retained. The Secretary is to consider 
     existing recurring revenues at the time of application in 
     determining an adequate level of credit support.
       The Conference substitute requires the Secretary to ensure 
     that the type, amount, and method of security used to secure 
     a loan or loan guarantee is commensurate to the risk involved 
     with the loan or loan guarantee, particularly when the loan 
     or loan guarantee is issued to a financially healthy, strong, 
     and stable entity. The Secretary is also required, in 
     determining the amount and method of security, to consider 
     reducing the security in areas that do not have broadband 
     service.
       The Conference substitute requires that the Secretary 
     report to Congress by December 1 of each fiscal year on the 
     rural

[[Page H3625]]

     broadband loan and loan guarantee program. The annual report 
     is to include information pertaining to the loans made, 
     communities served and proposed to be served, speed of 
     broadband service offered, types of services offered by the 
     applicants and recipients, length of time to approve 
     applications submitted, and outreach efforts undertaken by 
     USDA.
       The Conference substitute authorizes the program at 
     $25,000,000 to be appropriated for each of fiscal years 2008 
     through 2012. (Section 6110)
       The Conference substitute provides for a National Center 
     for Rural Telecommunications Assessment and criteria for the 
     Center. The Center is to assess the effectiveness of programs 
     carried out under this section, work with existing rural 
     development centers to identify appropriate policy 
     initiatives, and provide an annual report that describes the 
     activities of the Center, the results of research carried out 
     by the Center, and any additional information that the 
     Secretary may request. An appropriation of $1,000,000 is 
     authorized for each of the fiscal years 2008 through 2012. 
     (Section 6111)
       The Managers expect the Secretary to consider the unique 
     way of life in rural America and to be mindful that mobile 
     broadband technologies are applicable to farmers, ranchers, 
     and small rural business owners. Fixed broadband service will 
     continue to be important in rural homes and offices, but 
     mobile technologies also may have a role to play in expanding 
     broadband access to rural residents. The Managers expect the 
     Secretary to weigh all appropriate technologies, including 
     the unique characteristics of mobile broadband service and 
     technologies, during consideration of applications.
       With respect to applications not described in Section 
     601(c)(2) of the REA, as amended by this section, the 
     Managers expect the Secretary to incorporate the new criteria 
     as soon as practicable, taking into consideration the need to 
     act upon pending applications within a reasonable time.
       The Managers expect the Secretary to provide the necessary 
     resources to expedite the processing of applications under 
     this section. The Managers also expect that the notice of 
     applications will be posted on the Agency's website in a 
     manner that will be easy for interested members of the public 
     to find the information described and would be posted in a 
     manner consistent to the way similar notices are currently 
     posted on the Agency's website. It is intended that such 
     notices shall not contain any proprietary information as 
     defined by section 552(b)(4) of title 5 of the United States 
     Code. Finally, the Managers also intend that in addition to 
     the notice, the Agency will also post on its website with 
     respect to each loan and loan guarantee application the 
     status of the Agency's consideration of the application and 
     an estimate of when the Agency's consideration will be 
     concluded which shall be regularly updated.
     (41) Study of Federal Assistance for Broadband Infrastructure
       The Senate amendment instructs the Comptroller General of 
     the U.S. to conduct a study and review of the Rural Utilities 
     Service (RUS) administration of Federal broadband programs 
     with recommendations for changes. (Section 6113)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (42) Comprehensive rural broadband strategy
       The House bill requires the Secretary to submit to the 
     President and the Congress a report describing a 
     comprehensive rural broadband strategy that includes:
       (1) recommendations to:
       (A) promote interagency coordination of Federal agencies 
     and improve and streamline policies, programs, and services;
       (B) coordinate among Federal agencies regarding existing 
     broadband or rural initiatives that could be of value to 
     rural broadband development;
       (C) address both short- and long-term solutions and needs 
     for a rapid buildout of rural broadband solutions and 
     applications for Federal, State, regional, and local 
     government policy makers;
       (D) identify how specific Federal agency programs and 
     resources can best respond and overcome obstacles that 
     currently impede rural broadband deployment; and
       (E) promote successful model deployments and appropriate 
     technologies being used in rural areas so that State, 
     regional, and local governments can benefit from the success 
     of other State, regional, and local governments; and
       (2) a description of goals and timeframes to achieve the 
     strategic plans and visions identified in the report. 
     (Section 6031)
       The Senate amendment requires the Secretary of Agriculture 
     and the Chairman of the Federal Communications Commission 
     (FCC) to submit a report to the Committees on Energy and 
     Commerce and Agriculture of the House and the Committees on 
     Commerce, Science, and Transportation and Agriculture, 
     Nutrition and Forestry of the Senate describing a 
     comprehensive rural broadband strategy with recommendations 
     for improvement.
       The Senate amendment includes recommendations to: (A) 
     promote interagency coordination of Federal agencies and 
     improve and streamline policies, programs, and services; (B) 
     coordinate among Federal agencies regarding existing 
     broadband or rural initiatives that could be of value to 
     rural broadband development; (C) address both short- and 
     long-term solutions and needs for a rapid buildout of rural 
     broadband solutions and applications for Federal, State, 
     regional, and local government policy makers; (D) identify 
     how specific Federal agency programs and resources can best 
     respond and overcome obstacles that currently impede rural 
     broadband deployment.
       This Senate amendment stipulates that the Chairman of the 
     FCC, in coordination with the Secretary of Agriculture, is to 
     update and evaluate the report required under this section on 
     an annual basis.
       The Senate amendment modifies section 306(a)(20)(E) of the 
     Con Act by striking the reference to dial-up Internet access. 
     (Section 6111)
       The Conference substitute adopts the Senate provision to 
     require a report on Federal broadband strategy with technical 
     changes and a modification to require the update of the 
     report required under this section in the third year 
     following enactment. (Section 6112)
       The Conference substitute adopts the Senate provision 
     striking an obsolete reference to dial-up Internet and places 
     the provision in a separate section. (Section 6005).
     (43) Community connect grant program
       The House bill amends the REA by authorizing the Secretary 
     to provide financial assistance to eligible applicants for 
     the provision of broadband transmission service that fosters 
     economic growth and delivers enhanced services. The Secretary 
     is authorized to prioritize grants that will enhance 
     community access to telemedicine and distance learning. Grant 
     applicants are required to provide a matching contribution of 
     at least 15 percent of the grant amount requested.
       An appropriation of $25,000,000 is authorized for fiscal 
     years 2008 through 2012. (Section 6024)
       The Senate amendment contains no comparable provision.
       The Conference substitute strikes the House provision
     (44) Connect the Nation
       The Senate amendment provides that the subtitle of this 
     section is to be cited as the ``Connect the Nation Act.'' 
     (Section 6201)
       The Senate amendment also creates a competitive, matching 
     grant program (80 federal/20 state) called the ``Connect the 
     Nation Act of 2007'' to be housed at Department of Commerce 
     for eligible statewide public-private partnerships to 
     benchmark current access and use, build detailed GIS maps of 
     service, and create demand through grassroots teams. Eligible 
     entities would be limited to 4 years of participation. Grant 
     applications would be reviewed through a peer review process. 
     Collaboration is required between State agencies, service 
     providers, and relevant labor organizations, and community 
     organizations to be considered eligible. An appropriation of 
     $40,000,000 for each of the fiscal years 2008 though 2012 is 
     authorized. (Section 6202)
       The House contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (45) Distance Learning and Telemedicine
       The House bill amends the Food, Agriculture, Conservation, 
     and Trade Act (FACT Act) by authorizing the Secretary to 
     provide grants to noncommercial education television 
     broadcast stations that serve rural areas for the purposes of 
     developing digital facilities, equipment, and infrastructure 
     to enhance digital services to rural areas. (Section 6028)
       The House bill amends section 2335A of the FACT Act by 
     extending the authorization of appropriations to fiscal year 
     2012. (Section 6029)
       The Senate amendment permits as allowable purposes for 
     receiving financial assistance library connectivity and 
     public television station digital conversion. The Secretary 
     is required to establish, by notice, the amount of financial 
     assistance available to applicants in the form of grants, 
     costs of money loans, combinations of grants and loans, or 
     other financial assistance. Libraries or library support 
     organizations, public television stations and parent 
     organizations of public television stations, and schools, 
     libraries, and other facilities operated by the Bureau of 
     Indian Affairs or Indian Health Service are added as eligible 
     for assistance. In prioritizing financial assistance the 
     Secretary may also consider the cost and availability of 
     high-speed network access.
       The Senate amendment allows the following as eligible 
     purposes under this section: the development, acquisition, 
     and digital distribution of instructional programming to 
     rural users; the development and acquisition of computer 
     hardware and software, audio and visual equipment, computer 
     network components, telecommunications transmission 
     facilities, date terminal equipment, or interactive video 
     equipment, teleconferencing equipment, or other facilities 
     that would further telemedicine services, library 
     connectivity, or distance learning services; the provision of 
     technical assistance and instruction for the development or 
     use of the programming, equipment, or facilities; the 
     acquisition of high-speed network transmission equipment or 
     services that would not otherwise be available or affordable 
     to the applicant; costs relating to the coordination and 
     collaboration among and between libraries on connectivity and 
     universal service initiatives, or the development of multi-
     library connectivity plans that benefit rural users; and 
     competitive

[[Page H3626]]

     grants, for public television stations or a consortium of 
     public television stations, to provide education, outreach, 
     and assistance, in cooperation with community groups, to 
     rural communities and vulnerable populations with respect to 
     the digital television transition, and particularly the 
     acquisition, delivery, and installation of the digital-to-
     analog converter boxes.
       The Senate amendment reauthorizes appropriations through 
     2012. (Section 6302)
       The Conference substitute adopts the Senate provision with 
     modifications to provide that only libraries are added as 
     eligible entities, clarifying current law. No additional uses 
     are added. However, the Managers direct that public 
     television entities are eligible to receive assistance under 
     this section for high-speed telecommunication services in 
     rural areas to provide educational programming for schools 
     and communities in rural areas. (Section 6201)
     (46) Agricultural innovation center demonstration grants
       The House bill provides for an extension of section 6402 of 
     the Farm Security and Rural Investment Act of 2002 (FSRIA) by 
     authorizing an appropriation of $6,000,000 for each of the 
     fiscal years 2008 through 2012. (Section 6025)
       The Senate amendment contains no comparable provision.
       The Conference substitute adopts the House provision. 
     (Section 6203)
     (47) Rural firefighters and emergency services assistance 
         program
       The House bill amends section 6405 of the FSRIA by 
     authorizing the Secretary to award grants to eligible 
     entities to enable such entities to provide for improved 
     emergency medical services (EMS) in rural areas. Grants may 
     be used to pay the cost of training firefighters and 
     emergency medical personnel in firefighting and emergency 
     medical practices in rural areas.
       Eligible entities must be: a State EMS office or 
     association; a State office of rural health; a local 
     government entity; an Indian tribe; or any other entity 
     determined appropriate by the Secretary. To receive a grant 
     under this section the eligible entity must prepare and 
     submit an application to the Secretary that includes: a 
     description of the activities to be carried out under the 
     grant and an assurance that the applicant will comply with 
     the grant program's matching fund requirement.
       Under the House bill, eligible entities are to use grant 
     funds only in rural areas to: (1) hire, recruit or train EMS 
     personnel; (2) recruit or retrain emergency EMS personnel; 
     (3) fund training to meet State or Federal certification 
     requirements; (4) provide training for firefighters and 
     emergency medical personnel for improvements to the training 
     facility, equipment, and personnel; (5) develop new ways to 
     educate emergency health care providers through the use of 
     technology-enhanced educational methods; (6) acquire EMS 
     vehicles and equipment; (7) acquire personal protective 
     equipment for EMS personnel as required by the Occupational 
     Safety and Health Administration (OSHA); (8) educate the 
     public concerning CPR, first aid, injury prevention, safety 
     awareness, illness prevention, and other emergency 
     preparedness topics. Preference is to be given to 
     applications that reflect a collaborative effort by 2 or more 
     eligible entities and are submitted by eligible entities who 
     intend to use grant funds to: hire, recruit, or train EMS 
     personnel; recruit or retrain volunteer EMS personnel; fund 
     training to meet State or Federal certification requirements; 
     or develop new ways to educate emergency health care 
     providers through the use of technology-enhanced educational 
     methods. Appropriations of not more than $30,000,000 are 
     authorized for each of the fiscal years 2008 through 2012; no 
     more than 10 percent of appropriated funds in a fiscal year 
     may be used for administrative expenses. (Section 6026)
       The Senate amendment contains no comparable provision.
       The Conference substitute adopts the House provision with 
     minor changes. The funds made available under this section 
     are not to go to entities operating on a for-profit basis. 
     Additionally, the amount allowed for administrative expenses 
     is decreased to 5 percent. (Section 6204)
     (48) Value-added agricultural product market development 
         grants
       The House bill extends the program through fiscal year 2012 
     and provides $30,000,000 in mandatory funding for each fiscal 
     year. Of the mandatory funds, 10 percent is to be set aside 
     for projects benefiting beginning farmers and ranchers or 
     socially disadvantaged farmers or ranchers and 10 percent is 
     to be set aside for applications that propose to develop mid-
     tier value chains, which are defined in this section as local 
     and regional supply networks that link independent producers 
     with business and cooperatives that market value-added 
     agricultural products. Should viable applications for these 2 
     purposes not meet the full 10 percent set-aside, amounts 
     unobligated by June 30 may be reallocated. The House bill 
     requires the Secretary, in awarding grants under this 
     section, to consider applications more favorably, when 
     compared to other applications, to the extent that the 
     project proposed in the application contributes to 
     increasing opportunities for operators of small and 
     medium-sized farms and ranches structured as ``family 
     farms''--as defined in the regulations prescribed under 
     section 302 of the Con Act. (Section 6027)
       The Senate amendment provides for an extension of the 
     program through 2012 and updates the definitions of 
     ``assisting organization,'' ``technical assistance,'' and 
     ``value-added agricultural product.'' Under the Senate 
     amendment, a grant recipient can receive no more than 
     $300,000 in the case of grants including working capital or 
     $100,000 in the case of all other grants. The amount of grant 
     funds provided to an assisting organization for research, 
     training, technical assistance, and outreach for a fiscal 
     year may not exceed 10 percent of the total funds that are 
     used to make grants.
       The Senate amendment requires that grants made under this 
     section be limited to a 3-year term. The Secretary is 
     authorized to offer a simplified application form and process 
     for project proposals that request less than $50,000. The 
     Secretary is also authorized, to the maximum extent 
     practicable, to provide grants to projects that provide 
     training and outreach activities in areas that have received 
     relatively fewer grants. The Senate amendment adds a priority 
     for projects that contribute to increasing opportunities for 
     beginning farmers or ranches, socially disadvantaged farmers 
     or ranchers, and operators of small and medium-sized farms 
     and ranches that are not larger than family farms and support 
     new ventures that do not have well-established markets or 
     product development staffs and budgets, including the 
     development of local food systems and the development of 
     infrastructure to support local food systems. (Section 6401)
       The Conference substitute adopts the Senate provision with 
     modifications. The Secretary is required to reserve 10 
     percent of funds for projects that benefit beginning farmers 
     or ranchers or socially disadvantaged farmers or ranchers and 
     10 percent of funds for projects proposing to develop mid-
     tier value-chains. Priority in awarding grants should go for 
     projects that contribute to increasing opportunities for 
     beginning farmers and ranchers, socially disadvantaged 
     farmers or ranchers, and operators of small and medium-sized 
     farms and ranches that are structured as family farms. 
     Mandatory funding of $15,000,000, to remain available until 
     expended, is to be provided in fiscal year 2009. The 
     authorization of appropriations for the program is extended 
     through 2012. (Section 6202)
       The Managers are aware of the increasing producer interest 
     in mid-tier value chains that are strategic alliances between 
     small and mid-sized farms and ranches and other supply chain 
     partners that deal in significant volumes of high-quality, 
     differentiated food products and distribute rewards equitably 
     across the supply chain. The Managers expect that awards 
     under this new mid-tier value chain component of the program 
     will support strategic alliances in which the producer, 
     producer group, farmer cooperative, or majority-controlled 
     producer based venture participate in developing the overall 
     framework and specific rules for the alliance.
     (49) Guarantees for bonds and notes
       The House bill extends guarantees for bonds and notes 
     issued for electrification or telephone purposes through 
     2012. (Section 6030)
       The Senate amendment extends eligibility for guarantees for 
     telephone installation purposes; expands the funds available 
     for guarantees to $1,000,000,000; requires the annual fee 
     paid for the guarantee of a bond or note to be equal to 30 
     basis points of the amount of the unpaid principal; and 
     requires a lender to pay fees required on a semi-annual basis 
     on a schedule structured by the Secretary.
       The Senate amendment also extends the Secretary's authority 
     to guarantee payments to September 30, 2012. (Section 6106)
       The Conference substitute adopts the Senate provision, with 
     a modification to allow the provision expanding the funds 
     available for guarantees to apply immediately upon enactment. 
     (Section 6106)
     (50) Study of rural transportation issues
       The House bill authorizes the Secretary of Agriculture, in 
     coordination with the Secretary of Transportation, to conduct 
     a study, and submit a report to Congress on the results of 
     the study within 9 months of the date of enactment of this 
     Act, on railroad issues, with respect to the movement of 
     agricultural products, domestically produced renewable fuels 
     and domestically produced resources for the production of 
     electricity in rural America.
       The study includes an examination of the importance of 
     freight railroads to: the delivery of equipment, seed, 
     fertilizer, and other products important to the development 
     of agricultural commodities and products; the movement of 
     agricultural commodities and products to market; the delivery 
     of ethanol and other renewable fuels; the delivery of 
     domestically produced resources for use in the generation of 
     electricity in rural America; the location of grain 
     elevators, ethanol plants, and other facilities; the 
     development of manufacturing facilities; the vitality and 
     economic development of rural communities; the sufficiency in 
     rural America of railroad capacity, the sufficiency of rail 
     competition, the reliability of rail service, and the 
     reasonableness of rail prices; and the accessibility to rail 
     customers in rural America of Federal processes for the 
     resolution of rail customer grievances with the railroad. 
     (Section 6032)
       The Senate amendment contains no comparable provision.
       The Conference substitute adopts the House provision with 
     an amendment expanding the study to include other modes of

[[Page H3627]]

     transportation, including truck and barge. (Section 6206)
     (51) Energy efficiency programs
       The Senate amendment amends sections 2(a) and 4 in the REA 
     by authorizing the Secretary to extend loans to energy 
     efficiency programs. (Section 6101)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 6101)
       The Managers note that assistance is authorized under this 
     section for renewable energy, including geo-thermal ground 
     loops, under sections 2 and 4 of the REA as amended. The 
     Managers expect that applications for such assistance will be 
     properly considered and when meritorious, that they should be 
     funded.
     (52) Loans and grants for electric generation and 
         transmission
       The Senate amendment amends section 4 of the REA by 
     requiring the Secretary to make loans and grants for the 
     purpose of financing the construction and operation of 
     generating plants, electric transmission and distribution 
     lines or systems for the furnishing and improving of electric 
     services to persons in rural areas if appropriated funds are 
     made available. (Section 6102)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
       If funds are appropriated for Section 4 of the REA, the 
     Managers expect the Secretary to make funds available for 
     baseload generation.
     (53) Fees for electrification baseload generation loan 
         guarantees
       The Senate amendment amends the REA by adding a new 
     section, 5, which allows the Secretary to charge an upfront 
     fee to cover the cost of loan guarantees. The fee is to be at 
     least equal to the costs of the loan guarantee. The Secretary 
     is given the authority to establish a separate fee for each 
     loan. (Section 6103)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision, but 
     adopts an amendment to require a study on the electric power 
     generation needs in rural areas. (Section 6113)
     (54) Deferment of payments to allow loans for improved energy 
         efficiency and demand reduction
       The Senate amendment amends section 12 of the REA by 
     requiring the Secretary to allow borrowers to defer payment 
     of principal and interest on any direct loan to enable the 
     borrower to make loans to residential, commercial, and 
     industrial consumers to install energy efficient measures or 
     devices that reduce the demand on electric systems for 60 
     months. (Section 6104)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     modifications to allow energy efficiency and use audits as an 
     eligible purpose under the program. (Section 6103)
       The Conference substitute also makes technical changes to 
     allow for direct lending from the U.S. Department of Treasury 
     for RUS financing. Under the authority conferred to it under 
     section 4 of the REA, RUS has the ability to guarantee loans 
     made by the Federal Financing Bank (FFB), an agency of the 
     U.S. Department of the Treasury (Treasury), to rural electric 
     providers. Through approval of both the Office of Management 
     and Budget and the appropriations process, direct loans from 
     the Treasury have been used in addition to the FFB loan 
     guarantees for several years. Language is included in a new 
     section authorizing the loan rate program through Treasury 
     with a requirement that cost of money loans be made with 1/8 
     of 1 percent added to the interest rate. This will 
     effectively take the place of the FFB program. The loans 
     should continue to be scored at a negative subsidy. (Section 
     6102)
       The Managers expect that this language will enable the 
     loans to be processed more efficiently and still protect the 
     taxpayer investment in a strong, modern infrastructure in 
     rural America.
     (55) Rural electrification assistance
       The Senate bill amends the definition of ``rural area'' to 
     mean an area that excludes: (1) cities of 50,000 or more; (2) 
     any urbanized area contiguous and adjacent to a city of 
     50,000 or more, except for narrow strips of urbanized areas; 
     and (3) any collection of contiguous census blocks with a 
     housing density of 200 housing units per square mile that is 
     adjacent to a city of 50,000 or adjacent to an urbanized 
     area, except for narrow strips of such territory. The 
     definition is also amended to include any area within the 
     service area of a borrower for which a borrower has an 
     outstanding loan made under titles I through V of the REA. 
     (Section 6105)
       With respect to loans and loan guarantees made under the 
     rural broadband program, the term rural area also excludes a 
     city, town, or unincorporated area that has a population of 
     greater than 20,000 inhabitants.
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate amendment with 
     modifications. Rural area is defined to mean an area that 
     excludes a city or town of 20,000 or more, or is an area 
     within the service area of a borrower for which a borrower 
     has an outstanding loan made under titles I through V of the 
     REA. (Section 6104)
     (56) Electric loans for renewable energy
       The Senate amendment amends Title III of the REA by adding 
     a new section, 317, which allows the Secretary to make loans 
     to rural electric cooperatives for purposes of electric 
     generation and transmission of renewable energy. Renewable 
     energy source is defined as a qualified energy resource under 
     section 45(c)(1) of the Internal Revenue Code of 1986. 
     (Section 6108)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     modifications. The provision to allow transmission under this 
     section is deleted with the understanding that the agency 
     currently possesses authorization to make loans for such 
     transmission. Additionally, the definition of renewable 
     energy source is redefined to mean ``an energy conversion 
     system fueled from a solar, wind, hydropower, biomass, or 
     geothermal source of energy.'' (Section 6108)
       The Managers expect the Secretary to make electric loans 
     under this title for electric generation from renewable 
     energy resources to rural and nonrural residents.
     (57) Bonding requirements
       The Senate amendment amends Title III of the REA by adding 
     agency procedures for loans or grants under this Act. The 
     amendment: (1) requires that loan applicants are contacted at 
     least once each month by RUS regarding the status of any 
     pending loan applications; (2) requires the Secretary to 
     ensure that applicants for any RUS grants have the 
     opportunity to present a case for financial need and that 
     these special economic circumstances are considered in 
     determining the grant status of the applicant; (3) allows the 
     Secretary to adjust population limitations related to digital 
     mobile wireless service; and (4) requires the Secretary to 
     review bonding requirements for all programs administered by 
     RUS. (Section 6109)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision to 
     require the Secretary to review bonding requirements for all 
     programs administered by RUS, but strikes the other 
     provisions in the Senate amendment. (Section 6109)
       The Managers are aware of significant annual increases in 
     the cost of labor and materials in major electric generation 
     and transmission projects resulting in parallel increases in 
     cost for Surety and Performance Bonds. The cost of Surety and 
     Performance Bonds precludes some contractors from bidding on 
     projects successfully. The Managers therefore request the 
     Secretary give consideration to other measures that will 
     ensure more contractors can bid on projects and 
     simultaneously protect the government's investment in these 
     projects. Suggestions have been made that lines of credit or 
     parent company guarantees are examples of methods that could 
     provide such protection for both the borrowers and the 
     government.
     (58) Substantially underserved trust areas
       The Senate amendment provides that Native American trust 
     lands, where more than 20 percent of the population does not 
     have electric, telecommunications, broadband or water 
     service, are to be considered substantially underserved trust 
     areas. The Secretary may make programs administered by RUS 
     available to such areas at lower loan rates and may waive 
     non-duplication requirements. (Section 6112)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     modifications to ensure that only the restrictions and 
     requirements specified under this section are waived with 
     this authority. The authority of the Secretary to waive non-
     duplication restrictions, matching fund requirements, or 
     credit support requirements from any loan or grant program 
     administered by RUS to facilitate the construction, 
     acquisition, or improvement of infrastructure is not to 
     affect any loan or grant program administered by the U.S. 
     Environmental Protection Agency. In addition, the language in 
     this section is not intended to amend, alter, or affect any 
     statutory provisions contained in the Safe Drinking Water Act 
     or any regulations promulgated under that Act, including any 
     orders or guidance issued pursuant to that authority. 
     (Section 6105)
     (59) Rural electronic commerce extension
       The Senate amendment reauthorizes section 1670(e) of the 
     FACT Act through 2012. (Section 6301)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (60) Insurance of loans for housing and related facilities 
         for domestic farm labor
       The Senate amendment amends section 514 (f)(3) of the 
     Housing Act of 1949, by extending the definition of 
     ``domestic farm labor'' to include any person who receives a 
     substantial portion of their income from the processing of 
     agricultural or aquaculture commodities. (Section 6402)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 6205)
     (61) Housing Assistance Council
       The Senate amendment provides for the ``Housing Assistance 
     Council Authorization Act of 2007.'' (Section 6501)

[[Page H3628]]

       This section authorizes the Secretary of Housing and Urban 
     Development (HUD) to provide financial assistance to the 
     Housing Assistance Council (HAC) for the purpose of 
     supporting community-based housing development organizations' 
     community development and affordable housing projects and 
     programs in rural areas. (Section 6502)
       The Senate amendment requires the Comptroller General to 
     audit any institution receiving funds from HAC and a GAO 
     report on the use of any funds appropriated to HAC over the 
     past 10 years. (Section 6503)
       The Senate amendment prohibits funds from subtitle D of 
     this Act from being used to provide housing assistance to 
     persons not lawfully present in the United States. (Section 
     6504)
       The Senate amendment prohibits funds from being used to 
     lobby or retain a lobbyist. (Section 6505)
       The House bill contains no comparable provisions.
       The Conference substitute adopts the Senate amendment, with 
     modifications to allow the GAO to use private, independent 
     audits for the review of HAC. (Sections 6301, 6302, 6303, 
     6304, and 6305)
     (62) Interest rates for water and waste disposal
       The Senate amendment amends section 307(a)(3) of the Con 
     Act to ensure that interest rates for intermediate and 
     poverty rate loans are tied to the current market rate. The 
     poverty rate is set at 60 percent of the market rate and the 
     intermediate rate is set at 80 percent of the market rate. 
     (Section 12602)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate amendment, with 
     modifications to exclude from the interest rate change, those 
     loans that have been approved prior to the enactment of this 
     Act. (Section 6011)

                          TITLE VII--RESEARCH

     (1) Definitions
       The House bill defines terms necessary to implement this 
     Act: capacity program, competitive program, capacity program 
     critical base funding, competitive program critical base 
     funding, ASCARR Institution, Secretary, Directors, Under 
     Secretary, and Hispanic-serving agricultural college and 
     university. (Section 7101)
       The Senate amendment amends the Department of Agriculture 
     Reorganization Act of 1994 to define the terms: advisory 
     board, competitive program, director, infrastructure program, 
     and institute (Section 7401). The Senate amendment amends 
     Section 1404 of the National Agricultural Research, Extension 
     and Teaching Policy Act of 1977 (NARETPA) to define the terms 
     Hispanic-serving agricultural colleges and universities, and 
     Hispanic-serving institution, and to expand `college' and 
     `university' to include research foundations maintained by a 
     college or university. (Section 7001)
       The Conference substitute adopts the House provision with 
     an amendment to include the terms defined in the House bill 
     and the Senate amendment.
       The Conference substitute defines the following terms 
     necessary to implement this Act: capacity and infrastructure 
     program, capacity and infrastructure program critical base 
     funding, competitive program, competitive program critical 
     base funding, Hispanic-serving agricultural colleges and 
     universities, NLGCA Institution (non-land-grant colleges of 
     agriculture), 1862 Institution, 1890 Institution, and 1994 
     Institution. (Section 7501)
       The Conference substitute amends section 1404 of the 
     NARETPA to define Hispanic-serving agricultural colleges and 
     universities, Hispanic-serving institutions, and NLGCA 
     Institutions (non-land-grant colleges of agriculture), and to 
     expand the definition of ``college'' and ``university'' to 
     include research foundations maintained by a college or 
     university. (Section 7101)
       The Conference substitute amends section 251 of the 
     Department of Agriculture Reorganization Act of 1994 (7 
     U.S.C. 6971) to define the terms ``capacity and 
     infrastructure program'' and ``competitive program''. 
     (Section 7511)
     (2) Budget submission and funding
       The House bill requires the President to submit with the 
     annual budget request a single line item reflecting the total 
     funding requested for competitive programs for the fiscal 
     year and the previous five fiscal years. The capacity program 
     critical base funding request should be apportioned among 
     programs based on priorities established by the Under 
     Secretary of Research, Education, and Economics, and the 
     Directors of the National Agricultural Research Program 
     Office (NARPO). Additional funds requested should enhance 
     1890 institutions, 1994 institutions, small 1862 
     institutions, ASCARR institutions, and Hispanic-serving 
     agricultural colleges and universities. The competitive 
     program critical base funding request should be apportioned 
     among programs based on priorities established by the Under 
     Secretary and Directors of NARPO. Additional funds requested 
     should support the study of emerging problems and their 
     solutions. Necessary funds are authorized to be appropriated. 
     Competitive programs under this section include only those 
     requested by the President for funding. (Section 7102)
       The Senate amendment has no comparable provision.
       The Conference substitute adopts the House provision with 
     an amendment to include the total amount requested by the 
     President for the research, extension, and education 
     activities of the Research, Education, and Economics (REE) 
     mission area of the Department in a single budget line item. 
     The Conference substitute recommends that out of funds above 
     the capacity and infrastructure critical base funding level, 
     budgetary emphasis should be placed on certain institutions; 
     and out of funds above the competitive program critical base 
     funding level, budgetary emphasis should be placed on 
     emerging problems. (Section 7506)
       The Managers recognize the numerous benefits of competitive 
     research programs and have supported the expansion of funding 
     for these programs. The Managers encourage the Department to 
     make every effort to increase support for competitive 
     programs while maintaining the needs of capacity and 
     infrastructure programs when making budgetary decisions.
       The Managers expect the Secretary to review, in conjunction 
     with the consultative panel on the Extension Indian 
     Reservation Program (also known as the Federally Recognized 
     Tribes Extension Programs), the demand for and status of 
     extension services on Indian reservations and reflect that 
     need in their budget submission.
     (3) Additional purposes of agricultural research and 
         extension
       The House bill amends section 1403 of the NARETPA to add 
     the following to the purposes of agricultural research and 
     extension: integrating and organizing agricultural research, 
     extension, education, and related programs to respond to 21st 
     century challenges; continuing to meet the needs of society 
     from a local, tribal, State, national, and international 
     perspective; minimizing duplication and maximizing 
     coordination of the program at all levels; positioning the 
     research, extension, education, and related programs to 
     expand the portfolio to increase its contribution to society. 
     (Section 7103)
       The Senate amendment has no comparable provision.
       The Conference substitute deletes the House provision.
     (4) National Agriculture Research Program Office
       The House bill establishes six research Program Offices, 
     collectively known as the ``National Agricultural Research 
     Program Office'' (NARPO) within the office of the Under 
     Secretary of Agriculture for Research, Education, and 
     Economics. The NARPO will coordinate the programs and 
     activities of the research agencies within the mission area 
     to the maximum extent practicable. The NARPO will include the 
     following offices:
       (1) Renewable energy, resources, and environment;
       (2) Food safety, nutrition, and health;
       (3) Plant health and production and plant products;
       (4) Animal health and production and animal products;
       (5) Agriculture systems and technology; and
       (6) Agriculture economics and rural communities.
       Each research program office will have a director appointed 
     by the Under Secretary. The requirements to qualify for one 
     of the director positions include performance of outstanding 
     research, extension, or education in agriculture or forestry, 
     a doctoral-level degree, and other standards as required for 
     appointment to a senior level of the competitive service.
       The Directors will formulate programs, assess workforce 
     needs, cooperate with the National Agricultural Research, 
     Extension, Education, and Economics Advisory Board (NAREEE 
     Advisory Board) in planning for personnel needs, develop 
     strategic planning and priorities for Department-wide 
     research, extension, education, and related activities, and 
     communicate with program beneficiaries.
       The Under Secretary, along with the Directors, and in 
     consultation with the NAREEE Advisory Board, will direct and 
     coordinate programs within relevant departmental agencies to 
     focus on understanding program problems and opportunities, 
     and addressing those problems along with national, regional, 
     and local priorities.
       The Under Secretary will coordinate with the Directors and 
     receive the advice of the NAREEE Advisory Board to ensure 
     that programs are integrated and coordinated.
       The Under Secretary will fund each Program Office with 
     appropriated funds made available to the agencies within the 
     mission area. The total number of staff for all Program 
     Offices will not exceed 30 full time positions and will have 
     to be filled by current positions.
       The Under Secretary will integrate leadership functions 
     from existing program offices to ensure that program offices 
     are the primary program leaders.
       The Under Secretary will develop and implement specialty 
     crop research activities, facilitate information delivery, 
     and ensure coordination among research initiatives related to 
     specialty crops. (Section 7104)
       The Senate amendment requires coordination between the 
     Agricultural Research Service (ARS) and the National 
     Institute of Food and Agriculture (NIFA)--formerly the 
     Cooperative State Research, Education, and Extension Service 
     (CSREES). The Under Secretary for Research, Education, and 
     Economics will coordinate the programs under the authority of 
     the Administrator of ARS and the Director of NIFA. The staff 
     of the Administrator and the Director, including

[[Page H3629]]

     national program leaders, are required to meet on a regular 
     basis to: increase coordination and integration of research 
     programs at ARS and the research, extension, and education 
     programs of NIFA; coordinate responses to emerging issues; 
     minimize unnecessary duplication of work and resources at the 
     staff level of each agency; use the extension and education 
     program to deliver knowledge to stakeholders; address 
     critical needs facing agriculture; and focus the research, 
     extension, and education funding strategy of the Department. 
     An annual report to Congress is required on efforts to 
     increase coordination between ARS and NIFA.
       The Undersecretary for Research, Education, and Economics 
     is charged with undertaking a roadmap to identify major 
     opportunities and gaps in agricultural research, extension, 
     and education and to use this roadmap to set the research 
     agenda and recommend funding levels for programs in this 
     mission area of the Department.
       Such sums necessary for activities undertaken to develop 
     the roadmap are authorized. (Section 7402)
       The Conference substitute adopts the House provision with 
     an amendment to change the name of the office to the 
     Research, Extension, and Education Office (REEO) and to 
     integrate it into the office of the Under Secretary for 
     Research, Education, and Economics. The Conference substitute 
     also captures the roadmap from the Senate amendment.
       The Conference substitute requires the Under Secretary for 
     Research, Education, and Economics to have specialized 
     training or significant experience in agricultural research, 
     education, and economics. The Under Secretary is designated 
     as the chief scientist of the Department and is tasked with 
     the coordination of the research, education, and extension 
     activities of the Department.
       The Conference substitute organizes the REEO into six 
     Divisions:
       (1) Renewable energy, natural resources, and environment;
       (2) Food safety, nutrition, and health;
       (3) Plant health and production and plant products;
       (4) Animal health and production and animal products;
       (5) Agriculture systems and technology; and
       (6) Agriculture economics and rural communities.
       Each Division will be led by a Division Chief. The Division 
     Chiefs are to be selected by the Under Secretary to promote 
     leadership and professional development, to enable personnel 
     to interact with other agencies of the Department, and to 
     allow for the rotation of Department personnel into the 
     position of Division Chief. Each Division Chief is required 
     to have conducted exemplary research, extension, or education 
     in the field of agriculture or forestry and is required to 
     have earned an advanced degree at an institution of higher 
     education. Each Division Chief is limited to a four-year term 
     of service. The duties of each Division Chief include 
     addressing the agricultural research, extension, and 
     education needs and priorities within the Department and 
     communicating with stakeholders, as well as the development 
     of the roadmap as described in section 7504 of this Act. 
     (Section 7511 and Section 7504)
       The Managers expect the REEO to be staffed and funded from 
     appropriations made available to the agencies within the REE 
     mission area. There is concern that the REEO will evolve into 
     a new layer of bureaucracy. To address this, the Managers 
     have included language to limit the number of staff positions 
     for the REEO to 30 full-time current positions.
       The Managers expect the REEO Divisions to coordinate the 
     research, extension, and education activities across the 
     Department. The Managers expect the Division Chiefs of each 
     office to: coordinate the functions of intramural and 
     extramural research, extension, and education programs to 
     ensure the maximum integration of activities; and to 
     formulate programs, assess workforce needs, and cooperate 
     with the agencies of the REE mission area and the NAREEE 
     Advisory Board in developing strategic planning and 
     priorities for the Department.
       The Managers expect that once REEO is operational, the 
     Division Chiefs will be able to track, report, and identify 
     research gaps, unnecessary duplication among programs, and 
     assess the needs for immediate, emerging, and future needs 
     for research, extension, and education programs.
     (5) Establishment of competitive grant programs under the 
         National Institute for Food and Agriculture
       The House bill establishes the NIFA within CSREES to 
     administer all competitive programs as defined in section 
     7101 of this Act. (Section 7105)
       The Senate amendment transfers all authorities under CSREES 
     to NIFA, and all programs currently under CSREES will 
     continue under NIFA. NIFA will be headed by a Director, who 
     is required to report to and consult with the Secretary on 
     the research, extension, and education activities of NIFA. 
     The Director will work with the Under Secretary for Research, 
     Education, and Economics to ensure proper coordination and 
     integration of all research programs that are within the 
     responsibility of the Department.
       The Senate amendment establishes four offices at NIFA to 
     increase competitive grant opportunities and re-establish the 
     importance of the land-grant college and university system. 
     First, the Office of the Agricultural Research, Extension, 
     and Education Network administers all infrastructure programs 
     (also known as capacity programs) such as those funded by 
     formula funds at state agricultural experiment stations and 
     the extension service. Second, the Office of Competitive 
     Programs for Fundamental Research administers competitive 
     programs that fund fundamental (basic) food and agricultural 
     research, such as the National Research Initiative's basic 
     research projects. Third, the Office of Competitive Programs 
     for Applied Research administers competitive programs for 
     applied food and agricultural research. Fourth, the Office 
     of Competitive Programs for Education and Other Purposes 
     administers competitive programs for education and other 
     fellowships. The Director of NIFA has the discretion to 
     divide programs that intersect more than one competitive 
     program office.
       The Senate amendment authorizes appropriations for NIFA, 
     above the authorizations of individual programs, to be 
     allocated according to recommendations in the roadmap to be 
     developed by the Under Secretary of Research, Education and 
     Economics under section 7402 of this Act.
       The Senate amendment includes a series of conforming 
     amendments to modify each place in current law to reflect the 
     change from ``Cooperative State Research, Education, and 
     Extension Service'' to ``National Institute of Food and 
     Agriculture''. (Section 7401)
       The Conference substitute adopts the Senate provision to 
     modify the appointment, supervision, compensation, and 
     authorities of the Director of NIFA and to modify the 
     organization of offices under NIFA. It also modifies the 
     programs under the definition of ``capacity and 
     infrastructure program'' and ``competitive program'';
       The Conference substitute provides that NIFA will be 
     established by October 1, 2009. The Director of NIFA is 
     required to be a distinguished scientist and will be 
     appointed by the President. The Director is required to 
     report to the Secretary or the designee of the Secretary and 
     will serve a six-year term, subject to reappointment for an 
     additional six-year term.
       The Conference substitute also provides the Director with 
     discretion to organize NIFA into offices and functions to 
     administer fundamental and applied research and extension and 
     education programs. The NIFA Director is required to ensure 
     an appropriate balance between fundamental and applied 
     research programs, and is required to promote the use and 
     growth of competitively awarded grants.
       The Conference substitute provides an authorization of 
     appropriations for NIFA without fiscal year limitation, in 
     addition to funds appropriated to each program administered 
     by the Institute. The appropriated funding is required to be 
     allocated according to recommendations in the roadmap 
     described in section 7504 of this Act.
       The Managers are concerned about the visibility of 
     competitive research grants, the increasing demands placed on 
     the land-grant system, and the weakening financial support of 
     both competitive grants and formula funds. By restructuring 
     CSREES, the Managers intend for NIFA to raise the profile of 
     agricultural research, extension, and education. The Managers 
     believe that NIFA will be commensurate in stature with other 
     grant-making agencies across the Federal government, such as 
     the National Institutes of Health and the National Science 
     Foundation. The Managers intend for NIFA to be an 
     independent, scientific, policy-setting agency for the food 
     and agricultural sciences, which will reinvigorate our 
     nation's investment in agricultural research, extension, and 
     education.
       The Managers are concerned about the balance between 
     fundamental and applied research at the Department. The 
     Managers note that the Conference substitute gives the 
     Director of NIFA discretion to establish offices, to set 
     appropriate policy, and to address problems that agricultural 
     research, extension, and education can help solve. In 
     particular, the Managers intend that the Director place 
     emphasis on fundamental research because this type of 
     research is the engine and cornerstone for all other types of 
     research. Although fundamental research across the sciences 
     is funded by the National Science Foundation, the Managers 
     expect NIFA to play a larger role in funding this type of 
     research. However, the Managers recognize that without 
     applied research, the fruits of fundamental research would 
     never be used to solve the pressing needs of the public. 
     Therefore, the Managers intend for the Director to carefully 
     analyze the needs of the agricultural research, extension, 
     and education system and address them accordingly by 
     allocating appropriate staff and resources within NIFA. 
     (Section 7511)
     (6) Merging of IFAFS and NRI
       The House bill combines the Initiative for Future 
     Agriculture and Food Systems (IFAFS) with the National 
     Research Initiative (NRI) by repealing section 401 of the 
     Agricultural Research, Extension, and Education Reform Act of 
     1998, except for section 401(b)(3) of that Act which will 
     remain in effect, and incorporating the priorities under 
     section 401 into subsection (b) of the Competitive, Special, 
     and Facilities Research Grant Act.
       This section states that competitive grants authorized 
     under the new program are to be available to State 
     agricultural experiment

[[Page H3630]]

     stations, all colleges, universities, university research 
     foundations, research institutions and organizations, Federal 
     agencies, national laboratories, private organizations, 
     corporations, and individuals.
       The term of any grant received under this program will not 
     exceed 10 years. All grant awards are to be made on the basis 
     of peer and merit review. Funds may not be used for 
     construction.
       Within the combined program, there will be two separate 
     programs for basic and applied research, to be referred to as 
     NRI and IFAFS respectively. Out of the funds made available 
     to the combined program, 60 percent will fund NRI and 40 
     percent will fund IFAFS.
       Within the NRI allocation, funding will be allocated as 
     follows: 30 percent for multidisciplinary teams; 20 percent 
     for mission-linked systems research; not less than 10 percent 
     for education and research opportunities. The offer or 
     availability of matching funds shall not be taken into 
     account when making a grant. The match requirement may be 
     waived in certain cases.
       Matching funds will be required for IFAFS grants if the 
     grant is for applied, commodity-specific research and not 
     national in scope.
       In addition to NRI grants, the Secretary may conduct a 
     program in agricultural, food, and environmental sciences in 
     a variety of specified categories. Funding made available 
     under current law for IFAFS will be transferred to this new 
     combined program. The House bill authorizes $500,000,000 to 
     be appropriated and to remain available until expended for 
     obligations incurred in that fiscal year.
       This section repeals the authority for construction of non-
     Federal agricultural research facilities with appropriated 
     Federal funds. (Section 7106)
       The Senate amendment amends Section 401 of the Agricultural 
     Research, Extension, and Education Reform Act of 1998 to add 
     sustainable and renewable agriculture-based energy 
     production, ecosystem services, and beginning farmers and 
     ranchers to the purposes of IFAFS.
       This section strikes a provision allocating $200,000,000 
     per year in mandatory funds for IFAFS and provides 
     $45,000,000 in mandatory funds for IFAFS to be obligated 30 
     days after the enactment of the farm bill. This section 
     requires 32 percent of appropriated funds for the NRI to go 
     towards IFAFS grants if funds are not appropriated or 
     obligated for IFAFS. (Section 7201)
       The Senate amendment amends the Competitive, Special, and 
     Facilities Research Grant Act to add research on agricultural 
     genomics and biotechnology, classical animal and plant 
     breeding, beginning farmers and ranchers, and the judicious 
     use of antibiotics to the research priorities of the NRI.
       This section modifies the availability of grant funds for 
     classical plant and animal breeding to ten years and 
     establishes National Research Support Project-7 for research 
     on drugs for use in minor animal species. (Section 7307)
       The Conference substitute adopts the House provision with 
     an amendment to replace subsection (b) of the Competitive, 
     Special, and Facilities Research Grant Act to create a new 
     program, titled the ``Agriculture and Food Research 
     Initiative'' (AFRI), to award competitive grants for 
     fundamental and applied research, extension, and education to 
     address food and agricultural sciences. The program combines 
     the priority areas of the NRI with the purposes and priority 
     areas of IFAFS. There are six priority areas in AFRI:
       (1) Plant health and production and plant products;
       (2) Animal health and production and animal products;
       (3) Food safety, nutrition, and health;
       (4) Renewable energy, natural resources, and environment;
       (5) Agriculture systems and technology; and
       (6) Agriculture economics and rural communities.
       The term of competitive grants awarded under AFRI may not 
     exceed 10 years.
       Under AFRI, the Secretary will seek proposals to conduct 
     research, extension, or education activities in a specific 
     priority area, determine the relevance and merit of 
     proposals, and award grants on the basis of merit, quality, 
     and relevance as determined by experts in the specific 
     subject area.
       AFRI funds are to be allocated in the following manner: 60 
     percent will be made available for fundamental research and 
     40 percent will be made available for applied research. Of 
     the allocation for fundamental research, not less than 30 
     percent will be made available for multidisciplinary research 
     and not more than two percent will be made available for 
     equipment grants.
       Grants awarded through AFRI may also be used to assist in 
     the development of capabilities in the agricultural, food, 
     and environmental sciences to certain institutions, 
     investigators, and faculty members where such development is 
     necessary.
       Eligible entities that may receive grants through AFRI 
     include State agricultural experiment stations, colleges and 
     universities, university research foundations, other research 
     institutions and organizations, Federal agencies, national 
     laboratories, private organizations or corporations, 
     individuals, or groups thereof.
       AFRI funds are prohibited from being used for the 
     construction, acquisition, remodeling, or alteration of a 
     facility or building.
       For equipment grants funded through AFRI, the cost of the 
     equipment required may not exceed 50 percent of the Federal 
     funds. The Secretary may waive this matching requirement 
     under specified conditions. For grants awarded to conduct 
     applied research that is commodity-specific and not of 
     national scope, the grant is required to be matched with 
     equal matching funds from a non-Federal source.
       The authorization level for AFRI is set at $700,000,000 
     from fiscal year 2008 through fiscal year 2012, of which not 
     less than 30 percent is required to be made available for 
     integrated research. (Section 7406)
       The Managers expect that in providing an annual 
     authorization of appropriations of $700,000,000 that AFRI 
     will receive substantial funding to carry out its purposes in 
     the annual appropriations process. NRI and IFAFS have been 
     consistently underfunded despite the growing list of 
     identified needs in agricultural research, extension, and 
     education.
       The Managers created AFRI to enhance the work funded by NRI 
     and IFAFS. As such, AFRI should receive the combined level of 
     authorized and mandatory funding that NRI and IFAFS, 
     respectively, were to receive in previous fiscal years. The 
     Managers expect that AFRI be funded at increasing levels each 
     fiscal year to meet identified priority agriculture research, 
     extension and education demands.
       The Managers are aware of the importance of supporting 
     public sector conventional plant and animal breeding, as 
     evidenced by the specific mention of this priority under the 
     ``plant health and production and plant products'' and 
     ``animal health and production and animal products'' 
     priorities in AFRI. The Managers intend that the term 
     ``conventional breeding,'' also known as ``classical 
     breeding,'' refer to breeding techniques which rely on 
     creating an organism with desirable traits through controlled 
     mating and selection. Because conventional breeding is 
     critical to the development of seeds and breeds that are well 
     adapted to local conditions and changing environmental 
     constraints, these efforts are important to the food and 
     agriculture sector. The Managers are aware that participatory 
     breeding programs, where producers are involved in the 
     process of developing new plant varieties and animal breeds, 
     yield varieties and breeds that are better adapted to local 
     environments. The Managers encourage an emphasis on funding 
     of conventional plant and animal breeding as part of the new 
     AFRI.
       The Managers are aware of the need for integrated research, 
     extension, and education activities to stimulate 
     entrepreneurship across rural America to support business 
     development, improve skills of current and emerging 
     entrepreneurs, expand access to capital, and build 
     entrepreneurial networks. Under the priority area of 
     ``agriculture economics and rural communities,'' AFRI 
     includes ``rural entrepreneurship'' to increase competitive 
     funding for integrated entrepreneurship activities. The 
     Managers intend for this priority area to include both 
     agricultural and rural development ventures, including 
     strengthening non-farm, self-employment for farm and rural 
     populations.
       The Managers intend that most program areas within AFRI 
     would have grant terms of short duration. However, the 
     Managers are aware that there are areas of research where 
     longer-term grants are needed, such as conventional plant and 
     animal breeding, environmental research, and nutrition 
     research. The Managers expect the Secretary to use 10-year 
     grant terms only when it is critical for long-term systems 
     research.
       The Managers encourage the Director of NIFA to continue to 
     support National Research Support Project-7 and to work 
     cooperatively with the Center for Veterinary Medicine of the 
     Food and Drug Administration to facilitate the development 
     and approval of drugs for minor species and minor uses for 
     major species. (Section 7406)
       In order to improve the Department's capacity to develop 
     programs designed to address critical and emerging issues, 
     leverage Federal resources, and promote public and private 
     sector participation, Congress created an Integrated 
     Research, Education, and Extension Competitive Grants 
     Program in 1998. The Managers continue to support this 
     important competitive grants program and have extended the 
     authorization for these activities in section 7306 of this 
     Act. To further expand on these activities, the Managers 
     have included a provision in this section which directs 
     that not less than 30 percent of the funds made available 
     to AFRI be used for integrated research, extension, and 
     education competitive grants. It is the intent of the 
     Managers that with these additional funds, the Department 
     will be able to expand the number and scope of programs 
     supported under this authority.
     (7) Capacity building grants for ASCARR Institutions
       The House bill establishes a competitive grant program for 
     ASCARR Institutions to maintain and expand education, 
     outreach, and research capacity relating to agriculture, 
     renewable resources, and other similar fields. Necessary sums 
     are authorized to be appropriated. (Section 7107)
       The Senate amendment has no comparable provision.
       The Conference substitute adopts the House provision with 
     an amendment to add a new section, 1473F, to NARETPA, and to 
     replace the term ``ASCARR'' with the term ``NLGCA,'' an 
     abbreviation for ``non-land-grant colleges of agriculture.'' 
     (Section 7138)

[[Page H3631]]

     (8) Establishment of research laboratories for animal disease
       The House bill authorizes the Secretary to establish animal 
     disease research laboratories, and to the extent that an 
     animal disease constitutes a threat to the livestock 
     industry, authorizes the Secretary to conduct research, 
     diagnostics, and other activities. This section prohibits a 
     person, State, or Federal agency from importing, 
     transporting, or storing at a research facility a live virus 
     that the Secretary determines to be a threat to livestock, 
     such as Foot and Mouth Disease. The Secretary may, however, 
     import, transport, or store such a live virus and may also 
     allow for a person, State, or Federal agency to do the same 
     if it is in the public interest. Necessary sums are 
     authorized to be appropriated. (Section 7108)
       The Senate amendment requires the Secretary to issue a 
     permit to the Department of Homeland Security for work on 
     live Foot and Mouth Disease virus at the National Bio- and 
     Agro-Defense Laboratory. This section allows the Secretary to 
     invalidate the permit if research is not conducted in 
     accordance with its regulations. This section clarifies that 
     the suspension, revocation, or impairment of the permit is 
     only to be made by the Secretary of Agriculture and is a 
     nondelegable function. (Section 11016)
       The Conference substitute adopts the Senate provision with 
     an amendment to replace the term ``National Bio- and Agro-
     Defense Laboratory'' with ``any facility that is a successor 
     to the Plum Island Animal Disease Center and charged with 
     researching high-consequence biological threats involving 
     zoonotic and foreign animal diseases.'' (Section 7524)
     (9) Grazinglands Research Laboratory
       The House bill requires that Federal land and facilities 
     currently administered by the Department as the Grazinglands 
     Research Laboratory shall not be declared excess or surplus 
     property. (Section 7109)
       The Senate amendment has no comparable provision.
       The Conference substitute adopts the House provision with 
     an amendment to sunset the provision at the end of fiscal 
     year 2012. (Section 7502)
     (10) Research training
       The House bill requires plant genetic researchers that 
     receive certain federal funds to complete an approved 
     training program. (Section 7110)
       The Senate has no comparable provision.
       The Conference substitute deletes the House provision.
     (11) Fort Reno Science Park Research Facility
       The House bill allows the Secretary to lease land at the 
     Grazinglands Research Laboratory to the University of 
     Oklahoma. (Section 7111)
       The Senate amendment has no comparable provision.
       The Conference substitute adopts the House provision. 
     (Section 7503)
     (12) Assessing the nutritional composition of beef products
       The House bill allows the Secretary to award a grant, 
     contract, or other agreement to a land-grant university to 
     update the Nutrient Composition Handbook for Beef. Necessary 
     sums are authorized to be appropriated. (Section 7112)
       The Senate amendment has no comparable provision.
       The Conference substitute deletes the House provision.
     (13) Sense of Congress regarding funding for human nutrition 
         research
       The House bill states that it is the sense of Congress that 
     human nutrition research has the potential for improving the 
     health of Americans. (Section 7113)
       The Senate amendment has no comparable provision.
       The Conference substitute deletes the House provision.
     (14) Advisory Board
       The House bill amends Section 1408(g)(1) of NARETPA by 
     increasing the maximum annual appropriations for the NAREEE 
     Advisory Board to $500,000. (Section 7201)
       The Senate amendment amends Section 1408 of NARETPA by 
     increasing the maximum annual appropriations for the NAREEE 
     Advisory Board to $500,000 and to change the membership of 
     the board from 31 to 24 members. The Senate amendment 
     mandates that members representing the following 
     organizations are no longer to be members of the board: a 
     national animal commodity organization; a national crop 
     commodity organization; a national aquaculture 
     association; a non-land grant college or university with a 
     historic commitment to research in the food and 
     agricultural sciences; the portion of the scientific 
     community not closely associated with agriculture; an 
     agency within the Department that lacks research 
     capabilities; a research agency of the Federal Government 
     other than the Department; and national organizations 
     directly involved in agricultural research, extension, and 
     education. One member actively engaged in aquaculture is 
     added to compensate for the loss of a representative from 
     a national aquaculture association. (Section 7002 and 
     Section 7401)
       The Conference substitute adopts the Senate provision with 
     an amendment to include a member representing NLGCA 
     institutions; a member actively engaged in the production of 
     a food animal commodity recommended by a coalition of 
     national livestock organizations; a member actively engaged 
     in the production of a plant commodity recommended by a 
     coalition of national crop organizations; and a member 
     actively engaged in aquaculture recommended by a coalition of 
     national aquaculture organizations. (Section 7102)
     (15) Advisory Board termination
       The House bill (section 7202) and the Senate amendment 
     (section 7002) extend section 1408(h) of NARETPA through 
     2012.
       The Conference substitute adopts the Senate provision. 
     (Section 7102)
     (16) Renewable Energy Committee
       The House bill adds a new section, 1408B, to NARETPA that 
     requires the executive committee of the NAREEE Advisory Board 
     to establish and appoint initial members to a permanent 
     renewable energy subcommittee responsible for studying the 
     research, extension, and economics programs affecting the 
     renewable energy industry. The renewable energy committee 
     will submit annual reports to the Board with the committee's 
     findings and recommendations.
       This section states that the Renewable Energy Subcommittee 
     shall coordinate with the Biomass Research and Development 
     Act Technical Advisory Committee.
       This section states also that when preparing the annual 
     budget recommendations for the Department, the Secretary 
     shall take into account the recommendations made by the 
     committee and adopted by the NAREEE Advisory Board. (Section 
     7203)
       The Senate amendment has no comparable provision.
       The Conference substitute adopts the House provision with 
     an amendment to make technical changes in the Renewable 
     Energy Committee. (Section 7104)
     (17) Specialty Crop Committee Report
       The House bill amends section 1408A(c) of NARETPA by 
     expanding the list of recommendations the Specialty Crops 
     Subcommittee must make annually to the NAREEE Advisory Board 
     to include economic analyses of the specialty crops sector 
     and data that provides applied information useful to 
     specialty crop growers. (Section 7204)
       The Senate amendment has no comparable provision.
       The Conference substitute adopts the House provision with 
     an amendment to make technical changes. (Section 7103)
     (18) Inclusion of UDC grants and fellowships for food and 
         agricultural sciences education
       The House bill amends section 1417 of NARETPA by adding the 
     University of the District of Columbia (UDC) as an eligible 
     university to compete for food and agricultural sciences 
     education grants and fellowships. (Section 7205)
       The Senate amendment is the same as the House provision 
     with technical differences. (Section 7004)
       The Conference substitute adopts the Senate provision. 
     (Section 7106)
     (19) Grants and fellowships for food and agricultural 
         sciences education
       The House bill amends section 1417(j) of NARETPA by adding 
     agriculture programs for grades K-12 to the purposes of these 
     grants. The current authorization of appropriations of 
     $60,000,000 for each fiscal year is extended through 2012. 
     This section requires a report on the distribution of funds 
     to teaching programs. (Section 7206)
       The Senate amendment is the same as House provision with 
     technical differences. (Section 7007)
       The Conference substitute adopts the House provision with 
     an amendment to require a biennial report. (Section 7109)
     (20) Grants for research on production and marketing of 
         alcohols and industrial hydrocarbons from agricultural 
         commodities and forest products
       The House bill (section 7207) and the Senate amendment 
     (section 7008) extend section 1419(d) of NARETPA through 
     2012.
       The Conference substitute adopts the Senate provision with 
     an amendment to repeal this section from current law. 
     (Section 7110)
     (21) Policy research centers
       The House bill amends section 1419A of NARETPA by including 
     the Food Agricultural Policy Research Institute (FAPRI) and 
     the Agricultural and Food Policy Center (AFPC) as eligible to 
     receive grants under the policy research center authorization 
     and extending the authorization of appropriations through 
     2012. (Section 7208)
       The Senate amendment amends section 1419A of NARETPA by 
     including FAPRI, the AFPC, the Rural Policy Research 
     Institute, and the Community Vitality Center as eligible to 
     receive grants under the policy research center authorization 
     and extending the authorization of appropriations through 
     2012. (Section 7009)
       The Conference substitute adopts the Senate provision with 
     an amendment to remove the Community Vitality Center, add the 
     Drought Mitigation Center, and clarify that the specialty 
     crops sector should be covered by the centers. (Section 7111)
       The Managers recognize specialty crops are a vital 
     component of agriculture in the Midwestern region of the 
     United States and encourage the development of a 
     collaborative research program at a land-grant university to 
     support specialty crop research focused on genetic resource 
     development, sustainable production practices, and improved 
     marketing systems. The Managers recognize the resources and 
     expertise available among the Midwestern land-grant 
     universities, such as Purdue University, and encourage the 
     Secretary to support continued expansion of the

[[Page H3632]]

     specialty crop research, extension, and education 
     capabilities of these institutions.
     (22) Human Nutrition Intervention and Health Promotion 
         Research Program
       The House bill (section 7209) and the Senate amendment 
     (Section 7010) extend section 1424(d) of NARETPA through 
     2012.
       The Conference substitute adopts the House provision. 
     (Section 7114)
     (23) Pilot Research Program to combine medical and 
         agricultural research
       The House bill (section 7210) and the Senate amendment 
     (section 7011) extend section 1424A(d) of NARETPA through 
     2012.
       The Conference substitute adopts the Senate provision. 
     (Section 7115)
       The Managers recognize the potential for the development of 
     pharmaceuticals for human use through the use of bovine blood 
     products.8e usefulness of bovine blood products has resulted 
     from a number of technical advances. These advances ensure 
     the proper and necessary level of control of the animal-based 
     raw materials so that they can now meet or exceed the 
     requirements to develop safe and efficacious pharmaceuticals 
     for human use. The Managers encourage the Secretary to fund 
     pilot projects through this authorization to accelerate the 
     development of pharmaceuticals for human use from bovine 
     blood products.
     (24) Nutrition Education Program
       The House bill authorizes appropriations of $90,000,000 for 
     each fiscal year through 2012 to carry out the food and 
     nutrition education program. (Section 7211)
       The Senate amendment has no comparable provision. (Section 
     7012)
       The Conference substitute deletes the House provision.
     (25) Continuing animal health and disease research programs
       The House bill (section 7212) and the Senate amendment 
     (section 7014) extend section 1433(a) of NARETPA through 
     2012.
       The Conference substitute adopts the House provision. 
     (Section 7117)
     (26) Cooperation among eligible institutions
       The House bill requires the Secretary to encourage 
     cooperation among institutions eligible for funding under 
     continuing animal health and disease research programs in 
     setting research priorities. (Section 7213)
       The Senate amendment has no comparable provision.
       The Conference substitute adopts the House provision. 
     (Section 7118)
     (27) Appropriations for research on national or regional 
         problems
       The House bill (section 7214) and the Senate amendment 
     (section 7015) extend section 1434(a) of NARETPA through 
     2012.
       The Conference substitute adopts the Senate provision. 
     (Section 7119)
     (28) Authorization level of extension at 1890 land-grant 
         colleges
       The House bill (section 7215) and the Senate amendment 
     (section 7017) modify section 1444(a)(2) of NARETPA by 
     increasing from 15 to 20 percent the Smith-Lever (extension) 
     formula funding allocated to 1890 institutions.
       The Conference substitute adopts the House provision. 
     (Section 7121)
     (29) Authorization level for agricultural research at 1890 
         land-grant colleges
       The House bill (section 7216) and the Senate amendment 
     (section 7018) modify section 1445(a)(2) of NARETPA by 
     increasing from 25 to 30 percent the Hatch Act (research) 
     formula funding that is allocated to 1890 institutions.
       The Conference substitute adopts the Senate provision. 
     (Section 7122)
     (30) Grants to upgrade agriculture food sciences facilities 
         at the District of Columbia Land-Grant University
       The House bill (section 7217) and the Senate amendment 
     (section 7020) amend NARETPA by adding an authorization of 
     $750,000 in annual appropriations for grants to be made to 
     UDC to acquire, alter, or repair facilities or relevant 
     equipment necessary for conducting agricultural research.
       The Conference substitute adopts the Senate provision. 
     (Section 7124)
     (31) Grants to upgrade agricultural and food sciences 
         facilities at 1890 land-grant colleges, including 
         Tuskegee University.
       The House bill (section 7218) and the Senate amendment 
     (section 7019) extend section 1447(b) of NARETPA through 
     2012.
       The Conference substitute adopts the House provision. 
     (Section 7123)
     (32) National research and training virtual centers.
       The House bill (section 7219) and the Senate amendment 
     (section 7021) extend section 1448 of NARETPA through 2012.
       The Conference substitute adopts the Senate provision. 
     (Section 7126)
     (33) Matching funds requirement for research and extension 
         activities of 1890 institutions
       The House bill (section 7220) and the Senate amendment 
     (section 7022) extend section 1455 of NARETPA through 2012.
       The Conference substitute adopts the House provision with 
     an amendment to update current law and clarify the current 
     requirement of providing equal matching funds from non-
     Federal sources. (Section 7127)
     (34) Hispanic-serving institutions
       The House bill extends section 1455(c) of NARETPA through 
     2012. (Section 7221)
       The Senate amendment amends section 1455 of NARETPA by 
     removing the ability to receive a grant without a competitive 
     application process. The modification also allows single 
     institutions to receive grants. The annual appropriation is 
     increased from $20,000,000 to $40,000,000 and the 
     authorization of appropriations is extended through 2012. 
     (Section 7023)
       The Conference substitute adopts the Senate provision with 
     an amendment to make technical changes. (Section 7128)
     (35) Hispanic-serving agricultural colleges and universities
       The House bill adds a new section, 1456, to NARETPA which 
     establishes an endowment fund, an institutional capacity 
     building grant program, and a competitive grant program to 
     benefit Hispanic-serving agricultural colleges and 
     universities (HSACUs).
       This section defines Hispanic-serving agricultural colleges 
     and institutions as institutions that qualify as Hispanic-
     serving institutions under the Higher Education Act and offer 
     an associate, bachelor, or other accredited degree in 
     agricultural fields of study.
       This section authorizes necessary funds to be appropriated 
     for the endowment fund, extension, and institutional capacity 
     building, and competitive grants through 2012. A formula for 
     the distribution of appropriations is authorized for the 
     endowment and maintenance of Hispanic-serving agricultural 
     colleges and universities in the same manner prescribed under 
     the Second Morrill Act. (Section 7222)
       The Senate amendment is similar to the House provision with 
     technical differences. (Section 7024)
       The Conference substitute adopts the Senate provision with 
     an amendment to make technical changes. (Section 7129)
     (36) International agricultural research, extension, and 
         education
       The House bill (section 7223) and the Senate amendment 
     (section 7025) modify section 1458(a) of NARETPA by allowing 
     the Secretary to give priority under this program to 
     institutions with existing memoranda of understanding or 
     agreements with U.S. institutions or State or Federal 
     agencies. This section includes HSACUs as organizations the 
     Secretary may enter into agreements with to help develop a 
     sustainable global agricultural system. This section adds 
     HSACUs to the list of universities eligible for support to do 
     collaborative research with other countries on U.S. 
     agricultural competitiveness. This section also adds HSACUs 
     to the list of colleges and universities where Federal 
     scientists are involved with research conducted 
     internationally. This section establishes a program to 
     provide fellowships to U.S. or foreign students to study at 
     foreign agricultural colleges.
       The Conference substitute adopts the Senate provision with 
     an amendment to add anti-hunger and nutrition efforts and 
     increased quantity, quality, and availability of food to the 
     purposes of agreements between eligible institutions or 
     organizations and the Department. (Section 7130)
     (37) Competitive grants for international agricultural 
         science and education programs
       The House bill (section 7224) and the Senate amendment 
     (section 7026) extend section 1459A(c) of the NARETPA through 
     2012.
       The Conference substitute adopts the House provision. 
     (Section 7131)
     (38) Limitation on indirect costs for agricultural research, 
         education, and extension programs
       The House bill amends section 1462(a) of NARETPA to allow a 
     recipient of any grant administered under the REE mission 
     area, excluding those administered under the Small Business 
     Act, to use up to 19 percent of Federal funds for indirect 
     costs. (Section 7225)
       The Senate amendment amends section 1462(a) of NARETPA by 
     raising from 19 to 30 percent the allowance of indirect costs 
     a recipient institution can use from a competitive grant 
     awarded by the Department. (Section 7027)
       The Conference substitute adopts the House provision with 
     an amendment to increase the indirect cost limitation to 22 
     percent. (Section 7132)
     (39) Research equipment grants
       The House bill (section 7226) and the Senate amendment 
     (section 7028) extend section 1462A(e) of NARETPA through 
     2012.
       The Conference substitute adopts the Senate provision. 
     (Section 7133)
     (40) University research
       The House bill (section 7227) and the Senate amendment 
     (section 7029) extend section 1463 of NARETPA through 2012. 
     (Section 7227)
       The Conference substitute adopts the House provision. 
     (Section 7134)
     (41) Extension service
       The House bill (section 7228) and the Senate amendment 
     (section 7030) extend section 1464 of NARETPA through 2012.
       The Conference substitute adopts the Senate provision. 
     (Section 7135)
     (42) Supplemental and alternative crops
       The House bill (section 7229) and the Senate amendment 
     (section 7032) extend section 1473D(a) of NARETPA through 
     2012.
       The Conference substitute adopts the House provision. 
     (Section 7136)
     (43) Aquaculture assistance programs
       The House bill extends section 1477 of NARETPA through 
     2012. (Section 7230)
       The Senate amendment extends section 1477 of NARETPA 
     through 2012 and amends section 1475(f) of the Act to 
     prioritize the

[[Page H3633]]

     study and management of Viral Hemorrhagic Septicemia (VHS). 
     (Section 7033)
       The Conference substitute adopts the House provision and 
     adds VHS research as a high-priority item in section 7203 of 
     this Act.
       The Managers are aware of the devastating impacts that VHS 
     is having on freshwater fish populations in the United 
     States. The Managers encourage the Department's Animal and 
     Plant Health Inspection Service to coordinate its VHS 
     management activities with State natural resource management 
     agencies and tribes to research, develop, and implement a 
     comprehensive set of priorities for managing VHS, including 
     providing funds for research into the spread of the disease, 
     surveillance, monitoring, risk evaluation, enforcement, 
     screening, and management. (Section 7140)
     (44) Rangeland research
       The House bill extends section 1483(a) of NARETPA through 
     2012. (Section 7231)
       The Senate amendment extends section 1483(a) of NARETPA 
     through 2012 and amends section 1480(a) of the Act by 
     authorizing pilot programs to address natural resources 
     management issues and facilitate the collection of 
     information and analysis to provide information for improved 
     management of public and private rangeland. (Section 7034)
       The Conference substitute adopts the House provision. 
     (Section 7141)
     (45) Special authorization for biosecurity planning and 
         response
       The House bill (section 7232) and the Senate amendment 
     (section 7035) extend section 1484(a) of NARETPA through 
     2012.
       The Conference substitute adopts the Senate provision. 
     (Section 7142)
     (46) Resident Instruction and Distance Education Grants 
         Program for Insular Area Institutions of Higher Education
       The House bill (section 7233) and the Senate amendment 
     (section 7036) extend sections 1490(f) and 1491 of NARETPA 
     through 2012.
       The Conference substitute adopts the House provision. 
     (Section 7143)
     (47) Hispanic-serving institutions
       The House bill (section 7234) and the Senate amendment 
     (section 7001) modify section 1404 of NARETPA to give the 
     term ``Hispanic-Serving Institution'' The same definition as 
     section 502(a) of the Higher Education Act of 1965.
       The Conference substitute adopts the House provision with 
     an amendment to move it into the definitions section of this 
     Act. (Section 7101)
     (48) Specialty Crop Policy Research Institute
       The House bill amends section 1419A of NARETPA by 
     establishing a Specialty Crop Policy Research Institute 
     within FAPRI. The objectives are to produce and disseminate 
     analyses of the specialty crop sector and an annual review on 
     the state of the specialty crop industry. Necessary sums are 
     authorized to be appropriated. (Section 7235)
       The Senate amendment has no comparable provision.
       The Conference substitute adopts the House provision with 
     an amendment to incorporate the purposes of this section into 
     subsection (a)(1) of section 1419A of NARETPA. (Section 7111)
     (49) Emphasis of Human Nutrition Initiative
       The House bill amends section 1424(b) of NARETPA (7 U.S.C. 
     3174(b)) to add a new emphasis to the Human Nutrition 
     Intervention and Health Promotion Research Program to examine 
     the efficacy of agricultural programs in promoting the health 
     of disadvantaged populations. (Section 7236)
       The Senate amendment has no comparable provision.
       The Conference substitute adopts the House provision. 
     (Section 7113)
     (50) Grants to upgrade agriculture and food sciences 
         facilities at insular area land-grant institutions
       The House bill amends NARETPA by authorizing assistance to 
     insular land-grant institutions to acquire, alter, or repair 
     facilities or equipment for agricultural research. An 
     appropriation of $8,000,000 is authorized for each fiscal 
     year through 2012. (Section 7237)
       The Senate amendment has no comparable provision.
       The Conference substitute adopts the House provision. 
     (Section 7125)
     (51) Veterinary medicine loan repayment
       The Senate amendment amends section 1415A of NARETPA by 
     setting a deadline for rulemaking to implement the National 
     Veterinary Medical Services Act (NVMSA). This section amends 
     NVMSA to prioritize large and mixed animal practitioner 
     shortages in rural communities and prohibits funds to be used 
     for the existing Federal employee loan repayment program 
     under 5 U.S.C. 5379. (Section 7003)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to clarify the priorities within NVMSA and to 
     disapprove of the transfer of funds from CSREES to the Food 
     Safety and Inspection Service (FSIS). The funds are required 
     to be transferred back CSREES from FSIS. (Section 7105)
       The Managers continue to be frustrated by the lack of 
     progress by the Department in implementing NVMSA. When 
     developing this legislation, the House Committee on 
     Agriculture worked closely with the various agencies of the 
     Department to ensure that the legislation was drafted in a 
     manner in which it could be implemented and administered. 
     During Committee consideration, amendments were included at 
     the Department's request to ensure quick and efficient 
     implementation. In a legislative report submitted by the 
     Secretary of Agriculture, with the consent of the Office of 
     Management and Budget, the Department reiterated its support 
     and recommended that the legislation be enacted. More than 
     $2,000,000 has been appropriated for this program, yet the 
     Department has not taken steps to develop regulations to 
     implement it. Instead, the Managers note that CSREES, to 
     which authority to administer NVMSA had been delegated, chose 
     to transfer funds appropriated for this important program to 
     another agency of the Department to assist in loan repayment 
     for Federal employees. While this funding transfer was 
     technically within the authority of the NVMSA legislation, it 
     was not in line with the intent of Congress in developing 
     this legislation. The Managers disapprove of this funding 
     transfer and expect the full amount of funds that were 
     transferred to be returned. Likewise, amendments have been 
     included in NVMSA to prevent further funding transfers.
       In a hearing held before the House Subcommittee on 
     Livestock, Dairy, and Poultry on February 7, 2008, 
     representatives of the Department were asked repeatedly if 
     the Administration intended to propose legislation to amend 
     NVMSA to speed its implementation. To date, no proposed 
     legislation has been submitted, leading the Managers to 
     conclude that the Department has sufficient funding and 
     capability to implement and administer this law. The Managers 
     have therefore included a deadline for the Department to 
     propose regulations for NVMSA and expect the Department to 
     meet this deadline without further delay.
     (52) Expansion of Food and Agricultural Sciences Award
       The Senate amendment amends section 1417(i) of NARETPA by 
     expanding the current National Agricultural Teaching Award to 
     include research and extension. (Section 7006)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 7108)
     (53) Purposes and findings relating to animal health and 
         disease research
       The Senate amendment amends Section 1429 of NARETPA to add 
     a purpose supporting research on the judicious use of 
     antibiotics. (Section 7013)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision.
     (54) Animal Health and Disease Research Program
       The Senate amendment amends section 1434(b) of NARETPA by 
     clarifying that 1890 institutions are eligible for animal 
     health and disease research grants under this section. 
     (Section 7015)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 7120)
       The Managers are concerned about arthropod-borne diseases 
     that increasingly affect the U.S. livestock industry and 
     wildlife. Consequently, the Managers expect the Agricultural 
     Research Service to update the March 2005 feasibility study 
     on the modernization of the arthropod-borne animal disease 
     research laboratory.
     (55) Farm management training and public farm benchmarking 
         database
       The Senate amendment adds a new section, 1468, to NARETPA 
     that establishes a National Farm Management Center to improve 
     farm management knowledge and the skills of agriculture 
     producers through an education program. It also authorizes 
     the creation of a database that will allow for the comparison 
     of farm management data among producers. This section 
     authorizes annual appropriations for the center and database 
     through 2012. (Section 7037)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to modify the Food, Agriculture, Conservation, 
     and Trade Act of 1990 (FACT Act) and to allow the Secretary 
     to make competitive research and extension grants for the 
     purposes of the program. (Section 7208)
       The Managers recognize that the Center for Farm Financial 
     Management at the University of Minnesota has a proven record 
     of providing farm financial planning, marketing, and credit 
     analysis and encourage the Department to continue to support 
     its benchmarking efforts.
     (56) Tropical and subtropical agricultural research
       The Senate amendment adds a new section, 1473E, to NARETPA 
     that establishes a competitive program for research on 
     tropical and subtropical agriculture. Annual appropriations 
     for the program are authorized through 2012. (Section 7038)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision and 
     adds tropical and subtropical research as a high priority 
     item in Section 7203 of this Act.
     (57) Regional centers of excellence
       The Senate amendment adds a new section, 1473F, to NARETPA 
     that establishes regional

[[Page H3634]]

     centers of excellence, including a Poultry Sustainability 
     Center of Excellence, funded by Federal, State, and industry 
     funds to research a specific commodity. Annual appropriations 
     are authorized for the centers through 2012. (Section 7039)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision and 
     gives priority to regional centers of excellence that 
     leverage funds from Federal, State, and private sector 
     sources to research a specific agricultural commodity or 
     concern under Section 7203 of this Act.
     (58) National Drought Mitigation Center
       The Senate amendment adds a new section, 1473G, to NARETPA 
     that authorizes the Secretary to enter into an agreement with 
     the National Drought Mitigation Center. Annual appropriations 
     are authorized for the Center through 2012. (Section 7040)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision and 
     adds the National Drought Mitigation Center as one of the 
     research institutions and organizations that is eligible to 
     receive funding through the policy research center 
     authorization in section 7111 of this Act.
     (59) Agricultural development in the American-Pacific region
       The Senate amendment adds a new section, 1473H, to NARETPA 
     that establishes consortia of institutions in the American-
     Pacific region to carry out integrated research, extension, 
     and instruction programs in support of food and agricultural 
     sciences. Annual appropriations are authorized for the 
     consortia through 2012. (Section 7041)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision and 
     adds agricultural development in the American-Pacific region 
     as a high priority item in Section 7203 of this Act.
     (60) Farm and ranch stress assistance network
       The Senate amendment adds a new section, 1473K, to NARETPA 
     that establishes a farm and ranch stress assistance network 
     to provide behavioral programs to participants in the U.S. 
     agricultural sector. Annual appropriations are authorized for 
     the network through 2012. (Section 7044)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to clarify the activities covered under this 
     authorization and to make technical changes. (Section 7522)
     (61) Rural entrepreneurship and enterprise facilitation
       The Senate amendment adds a new section, 1473L, to NARETPA 
     to establish a program for the promotion of rural 
     entrepreneurship, rural business development, and 
     collaboration among rural entrepreneurs, local business 
     communities, nonprofit organizations, and K-12 and higher 
     education institutions. The program also provides rural 
     entrepreneurs with technical assistance and access to 
     capital, and it determines the best methods of 
     entrepreneurial training. Annual appropriations for the 
     program are authorized. (Section 7045)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision.
     (62) Seed distribution
       The Senate amendment adds a new section, 1473M, to NARETPA 
     that establishes a program to distribute vegetable seeds to 
     underserved communities free-of-charge. Annual appropriations 
     are authorized for the program through 2012. (Section 7046)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to award grants on a competitive basis and to 
     make technical changes. (Section 7523)
     (63) Farm and ranch safety
       The Senate amendment adds a new section, 1473N, to NARETPA 
     that establishes a grant program to determine how to decrease 
     the incidence of injury and death on farms and ranches. 
     Annual appropriations for the program are authorized through 
     2012. (Section 7047)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision and 
     adds farm and ranch safety as a high priority item in section 
     7203 of this Act.
     (64) Women and minorities in STEM fields
       The Senate amendment adds a new section, 1473O, to NARETPA 
     that establishes a grant program to increase participation by 
     women and underrepresented minorities from rural areas in 
     science, technology, engineering, and mathematics fields 
     (STEM fields). Annual appropriations for the program are 
     authorized through 2012. (Section 7048)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision and 
     adds women and minorities in STEM fields as a high priority 
     item in section 7203 of this Act.
     (65) Natural Products Research Program
       The Senate amendment adds a new section, 1473P, to NARETPA 
     that establishes a research program for the discovery, 
     development, and commercialization of pharmaceuticals and 
     agrichemicals from natural products, including those from 
     plant, marine, and microbial sources. Annual appropriations 
     are authorized for the program. (Section 7049)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to make technical changes. (Section 7525)
     (66) International Anti-Hunger and Nutrition Program
       The Senate amendment adds a new section, 1473Q, to NARETPA 
     that authorizes the Secretary to support nonprofit 
     organizations that focus on promoting research concerning 
     anti-hunger and improved nutrition efforts internationally 
     and increased quantity, quality, and availability of food. 
     (Section 7050)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision and 
     adds the purposes of the Senate amendment to section 7130 of 
     this Act.
     (67) Consortium for Agricultural and Rural Transportation 
         Research and Education
       The Senate amendment adds a new section, 1473R, to NARETPA 
     that establishes a research program focusing on critical 
     rural and agricultural transportation and logistics issues 
     facing agricultural producers and other rural businesses. 
     Annual appropriations of $19,000,000 are authorized for each 
     fiscal year through 2012. (Section 7051)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to give priority to institutions that apply as a 
     group and to make technical changes. (Section 7529)
     (68) Regional Centers of Excellence in Food Systems 
         Veterinary Medicine
       The Senate amendment adds a new section, 1473S, to NARETPA 
     that establishes a grant program for veterinary schools to 
     support centers of emphasis in food systems veterinary 
     medicine. Annual appropriations for the centers are 
     authorized through 2012. (Section 7052)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision, 
     adds food systems veterinary medicine as a high priority item 
     in Section 7203 of this Act, and captures the purposes of the 
     Senate amendment in the regional centers of excellence 
     provision under section 7203 of this Act.
     (69) National Genetics Resources Program
       The House bill extends section 1635(b) of the FACT Act 
     through 2012. (Section 7301)
       The Senate amendment extends section 1635(b) of the FACT 
     Act through 2012 and adds research on plant and animal 
     breeding to the purposes and functions of this program as 
     listed in section 1632 of the FACT Act. (Section 7101)
       The Conference substitute adopts the House provision. 
     (Section 7201)
     (70) National Agricultural Weather Information System
       The House bill extends section 1641(c) of the FACT Act 
     through 2012. (Section 7302)
       The Senate amendment has no comparable provision.
       The Conference substitute adopts the House provision. 
     (Section 7202)
       The Managers recognize the importance of creating a 
     southern mesonetwork of weather stations to support applied 
     research in solar and wind energy production. The Managers 
     are aware of the capabilities and experience of the Center 
     for Earth and Environmental Studies at Texas A&M 
     International University in this area and believe this 
     institution could prove to be a valuable resource in the Rio 
     Grande Valley.
     (71) Partnerships
       The House bill amends section 1672(d) of the FACT Act by 
     requiring that grant proposals received must be 
     scientifically meritorious and involve cooperation of 
     multiple entities in order to receive priority consideration 
     under the High Priority Research and Extension Initiative. 
     (Section 7303)
       The Senate amendment has no comparable provision.
       The Conference substitute adopts the House provision. 
     (Section 7203)
     (72) Aflatoxin Research and Extension
       The House bill amends section 1672(e)(3) of the FACT Act by 
     changing the existing grant description contained in current 
     law to improve and commercialize aflatoxin control in corn 
     and other crops. (Section 7304)
       The Senate amendment has no comparable provision.
       The Conference substitute adopts the House provision. 
     (Section 7203)
     (73) High Priority Research and Extension Areas
       The House bill amends section 1672 of the FACT Act by 
     adding the following to the High Priority Research and 
     Extension Area Initiatives: farmed and wild cervid disease 
     and genetic research; air emissions from livestock 
     operations; swine genome project; cattle fever tick program; 
     colony collapse disorder program; synthetic gypsum from power 
     plants research; cranberry research program; sorghum research 
     initiative; and a bean health research program. (Section 
     7305)
       The Senate amendment amends section 1672 of the FACT Act by 
     adding the following to the High Priority Research and 
     Extension

[[Page H3635]]

     Area Initiatives: Colony Collapse Disorder and Pollinator 
     Research Program; Marine Shrimp Farming Program; Cranberry 
     Research Program; Turfgrass Research Initiative; Pesticide 
     Safety Research Initiative; Swine Genome Project; High Plains 
     Aquifer Region; Cellulosic Feedstock Transportation and 
     Delivery Initiative; Deer Initiative; Pasture-Based Beef 
     Systems; Sustainable Agricultural Production for the 
     Environment; Biomass-Derived Energy Resources; Brucellosis 
     Control and Eradication; and Bighorn and Domestic Sheep 
     Disease Mechanisms. (Section 7102)
       The Conference substitute adopts the Senate provision with 
     an amendment to add the following to the list of high-
     priority research and extension initiatives: Air Emissions 
     from Livestock Operations; Swine Genome Project; Cattle Fever 
     Tick Program; Synthetic Gypsum; Cranberry Research Program; 
     Sorghum Research Initiative; Marine Shrimp Farming Program; 
     Turfgrass Research Initiative; Agricultural Worker Safety 
     Research Initiative; High Plains Aquifer Region; Deer 
     Initiative; Pasture-Based Beef Systems Research Initiative; 
     Agricultural Practices Relating to Climate Change; 
     Brucellosis Control and Eradication; Bighorn and Domestic 
     Sheep Disease Mechanisms; Agricultural Development in the 
     American-Pacific Region; Tropical and Subtropical 
     Agricultural Research; Viral Hemorrhagic Septicemia; Farm and 
     Ranch Safety; Women and Minorities in STEM Fields; Alfalfa 
     and Forage Research Program; Food Systems Veterinary 
     Medicine; Biochar Research.
       The Conference substitute also strikes the following from 
     section 1672 of the FACT Act: Brown citrus aphid and citrus 
     tristeza virus research and extension; Mesquite research and 
     extension; Red meat safety research and extension; Grain 
     sorghum ergot research and extension; Low-bush blueberry 
     research and extension; Wild pampas grass control, 
     management, and eradication research and extension; Sheep 
     scrapie research and extension; Forestry research and 
     extension; Wind erosion research and extension; Crop loss 
     research and extension; Harvesting productivity for fruits 
     and vegetables; Agricultural marketing; Beef cattle genetics; 
     Dairy pipeline cleaner; Development of publicly held plants 
     and animal varieties; and Specialty crop research. (Section 
     7204)
       The Managers encourage the Secretary to support 
     collaborative research focusing on the development of viable 
     strategies for the prevention, diagnosis and treatment of 
     infectious, parasitic, and toxic diseases of farmed deer and 
     the mapping of the deer genome. This initiative may be 
     carried out by a consortium that can include land-grant 
     universities and veterinary schools with appropriate 
     facilities and experience in husbandry and care of captive 
     cervidae. The consortium may carry out research dedicated to 
     developing vaccines for epizootic hemorrhagic disease and 
     blue tongue disease in farmed deer and may work to map the 
     deer genome with emphasis on the identification of genes that 
     confer resistance or susceptibility to disease relevant to 
     the production of farmed deer.
       The Managers recognize the unique needs of the Appalachian 
     region for the Pasture-Based Beef Systems Initiative.
       The Managers intend that the term ``Caribbean and Pacific 
     basins'' refers to the States of Hawaii and Florida, the 
     Commonwealth of Puerto Rico, the United States Virgin 
     Islands, American Samoa, Guam, the Commonwealth of the 
     Northern Mariana Islands, the Federated States of Micronesia, 
     the Republic of the Marshall Islands, and the Republic of 
     Palau.
       The Managers intend that the term ``American-Pacific 
     region'' refers to the States of Hawaii and Alaska, American 
     Samoa, Guam, the Commonwealth of the Northern Mariana 
     Islands, the Federated States of Micronesia, the Republic of 
     the Marshall Islands, and the Republic of Palau.
     (74) High priority research and extension initiative
       The House bill extends Section 1672(h) of the FACT Act 
     through 2012. (Section 7306)
       The Senate amendment extends section 1672(h) of the FACT 
     Act through 2012 and authorizes an annual appropriation of 
     $20,000,000 for the Colony Collapse Disorder and Pollinator 
     Research Program. (Section 7102)
       The Conference substitute adopts the House provision. 
     (Section 7204)
     (75) Nutrient management research and extension initiative
       The House bill amends section 1672A of the FACT Act by 
     giving a priority to grant proposals that address unique 
     regional concerns as eligible for priority treatment. The 
     House bill also adds dairy cattle waste as a type of waste to 
     be studied to develop new methods of managing air and water 
     quality. The authorization of appropriations is extended 
     through 2012. (Section 7307)
       The Senate amendment: establishes a consortium of land 
     grant colleges in the northeast region to perform research on 
     dairy nutrient management and energy production (Section 
     9023); establishes a Southwest regional dairy, environment, 
     and private land program for the research, development, and 
     implementation of solutions for issues faced by the dairy 
     industry (Section 11092); and extends section 1672A of the 
     FACT Act through 2012. (Section 7103)
       The Conference substitute adopts the House provision with 
     an amendment to include the production of renewable energy 
     from animal waste as an eligible activity to receive grants 
     under this section. (Section 7205)
       The Managers recognize that different regions of the 
     country have varying needs for both energy development and 
     nutrient management, and that cooperative efforts by 
     institutions and States will leverage available resources to 
     address problems and identify solutions. The Managers 
     therefore encourage the development of regional consortia in 
     which partners would work together to accomplish the goals of 
     developing viable nutrient management systems, energy 
     products from manure, and to assess these systems for cost, 
     performance, and function among dairy, poultry, and swine 
     operations.
     (76) Agricultural Telecommunications Program
       The House bill (section 7308) and the Senate amendment 
     (section 7105) extend section 1673(h) of the FACT Act through 
     2012.
       The Conference substitute adopts the House provision with 
     an amendment to repeal section 1673 of the FACT Act. (Section 
     7209)
     (77) Assistive Technology Program for Farmers with 
         Disabilities
       The House bill (section 7309) and the Senate amendment 
     (section 7106) extend section 1680(c)(1) of the FACT Act 
     through 2012.
       The Conference substitute adopts the Senate provision. 
     (Section 7210)
     (78) Organic research
       The House bill amends section 1672B of the FACT Act by 
     expanding the Organic Agriculture Research and Extension 
     Initiative to examine optimal conservation and environmental 
     outcomes for organically produced agricultural products and 
     to develop new and improved seed varieties that are 
     particularly suited for organic agriculture. This section 
     authorizes $25,000,000 in mandatory funding for each of 
     fiscal years 2008 through 2012. Appropriations of $25,000,000 
     are authorized for each of fiscal years 2009 through 2012. 
     The Director of NARPO is to coordinate this program to avoid 
     duplication. (Section 7310)
       The Senate amendment amends Section 1672B of the FACT Act 
     by authorizing mandatory funds of $16,000,000 per year for 
     fiscal years 2008 through 2012 for the Organic Agriculture 
     Research and Extension Initiative. (Section 7104)
       The Conference substitute adopts the House provision with 
     an amendment to provide the initiative with a total of 
     $78,000,000 in mandatory funds for fiscal year 2009 through 
     fiscal year 2012. (Section 7206)
       Organic farming has the potential to capture atmospheric 
     carbon and store it in the soil in the form of soil organic 
     matter. The Managers encourage continued support of the 
     research at the Rodale Institute regarding this research as 
     it relates to certified organic standards.
     (79) National Rural Information Center Clearinghouse
       The House bill (section 7311) and the Senate amendment 
     (section 7107) extend section 2381(e) of the FACT Act through 
     2012.
       The Conference substitute adopts the House provision. 
     (Section 7212)
     (80) New Era Rural Technology Program
       The House bill establishes a grant program for community 
     colleges to develop an agriculture-based renewable energy and 
     timber industry workforce. Annual appropriations are 
     authorized for the program through 2012. (Section 7312)
       The Senate amendment adds a new section, 1473J, to NARETPA 
     to establish a grant program for community colleges to 
     develop an agriculture-based renewable energy and timber 
     industry workforce and provides the definition of rural 
     community college. Annual appropriations are authorized for 
     the program through 2012. (Section 7043)
       The Conference substitute adopts the House provision with 
     an amendment to make technical changes and to add a new 
     section, 1473E, to NARETPA. (Section 7137)
       The Managers recognize the importance of developing a 
     workforce to support the fields of bioenergy, agriculture-
     based renewable energy resources, and pulp and paper 
     manufacturing. The Managers recognize that Alabama Southern 
     Community College, Northeast Iowa Community College, Eastern 
     Iowa Community College District, Hawkeye Community College, 
     Neosho County Community College, Kennebec Valley Community 
     College, Itasca Community College, York Technical College, 
     Midstate Technical College, Jones County Junior College, 
     Minnesota West Technical and Community College, Orangeburg-
     Calhoun Technical College, Horry-Georgetown Technical 
     College, and Central Carolina Technical College are among the 
     rural community colleges that have a proven record and the 
     ability to develop and implement programs to supply certified 
     technicians. The Managers encourage the Secretary to work 
     with these community colleges to establish the New Era Rural 
     Technology Program.
     (81) Partnerships for high-value agricultural product quality 
         research
       The House bill (section 7401) and the Senate amendment 
     (section 7202) extend section 402(g) of the Agricultural 
     Research, Extension, and Education Reform Act of 1998 
     (AREERA) through 2012.
       The Conference substitute adopts the Senate provision with 
     an amendment to repeal section 402 of AREERA. (Section 7302)
     (82) Precision agriculture
       The House bill (section 7402) and the Senate amendment 
     (section 7203) extend section 403(i)(1) of AREERA through 
     2012.
       The Conference substitute adopts the House provision with 
     an amendment to repeal section 403 of AREERA. (Section 7303)

[[Page H3636]]

     (83) Biobased products
       The House bill (section 7403) and the Senate amendment 
     (section 7204) extend section 404(e)(2) of AREERA through 
     2012.
       The Conference substitute adopts the House provision. 
     (Section 7304)
     (84) Thomas Jefferson Initiative for Crop Diversification
       The House bill (section 7404) and the Senate amendment 
     (section 7205) extend section 405(h) of AREERA through 2012.
       The Conference substitute adopts the Senate provision with 
     an amendment to repeal section 405 of AREERA. (Section 7305)
     (85) Integrated Research, Education, and Extension 
         Competitive Grants Program
       The House bill (section 7405) and the Senate amendment 
     (section 7206) extend section 406(f) of AREERA through 2012.
       The Conference substitute adopts the Senate provision. 
     (Section 7306)
     (86) Fusarium graminearum grants
       The House bill amends section 408 of AREERA to provide a 
     technical correction and extends the authorization of 
     appropriations through 2012. (Section 7406)
       The Senate amendment extends section 408(e) of AREERA 
     through 2012. (Section 7207)
       The Conference substitute adopts the House provision. 
     (Section 7307)
     (87) Bovine Johne's Disease Control Program
       The House bill (section 7407) and the Senate amendment 
     (section 7208) extend section 409(b) of AREERA through 2012.
       The Conference substitute adopts the Senate provision. 
     (Section 7308)
     (88) Grants for youth organizations
       The House bill amends section 410 of AREERA to provide 
     additional flexibility in content delivery and management of 
     grant funds to recipient organizations under this section. 
     The authorization of appropriations is extended through 2012. 
     (Section 7408)
       The Senate amendment extends section 410(c) of AREERA 
     through 2012. (Section 7209)
       The Conference substitute adopts the House provision. 
     (Section 7309)
     (89) Agricultural research and development for developing 
         countries
       The House bill (section 7409) and the Senate amendment 
     (section 7210) extend section 411(c) of AREERA through 2012. 
     (Section 7409)
       The Conference substitute adopts the House provision. 
     (Section 7310)
     (90) Agricultural bioenergy and biobased products research 
         initiative
       The House bill adds a new section, 412, to AREERA that 
     establishes a bioenergy and biobased products research 
     initiative to enhance the production, sustainability, and 
     conversion of biomass to renewable fuels and related 
     products. The research initiative will be supported by a 
     bioenergy and biobased product laboratory network that will 
     focus research on improving biomass production and 
     sustainability and improving biomass conversion in 
     biorefineries. The Director of NARPO, established under 
     section 7410 of the House bill, will coordinate projects and 
     activities under the Biomass Research and Development Act of 
     2000 to coordinate and maximize the strengths of the 
     Department and the Department of Energy. The Secretary is 
     authorized to carry out research and award grants on a 
     competitive basis. Appropriations are authorized at 
     $50,000,000 for each of fiscal years 2008 through 2012. The 
     Director of NARPO is to coordinate this program to avoid 
     duplication of projects carried out under the Biomass 
     Research and Development Act. (Section 7410)
       The Senate amendment has no comparable provision.
       The Conference substitute adopts the House provision with 
     an amendment to incorporate the purposes of sections 9010 and 
     9020 of the House bill, and sections 9010, 9011, 9022, and 
     9025 of the Senate amendment.
       The Conference substitute, titled the ``Agricultural 
     Bioenergy Feedstock and Energy Efficiency Research and 
     Extension Initiative,'' establishes a program to award 
     competitive grants for projects with a focus on supporting 
     on-farm biomass crop research and the dissemination of 
     results to enhance the production of biomass energy crops and 
     the integration of such production with the production of 
     bioenergy. The Conference substitute directs the Secretary to 
     establish a best-practices database on the production of 
     various biomass crops and on the harvesting, transport, and 
     storage of biomass crops.
       The Conference substitute authorizes competitive grants for 
     on-farm energy efficiency research and extension projects 
     aimed at improving the energy efficiency of agricultural 
     operations. (Section 7207)
       The Managers encourage the Secretary to consider the 
     approach of the New Century Farm at Iowa State University as 
     a model for integrated research in the areas of biomass crop 
     research and the production of bioenergy and to use its 
     established capabilities.
       The Managers encourage the Secretary to consider the Future 
     Farmsteads program at the University of Georgia as a model 
     for on-farm energy efficiency research and to use its 
     established capabilities.
       Additionally, the Managers encourage the Secretary to use 
     the capabilities of the Colorado Renewable Energy 
     Collaboratory in carrying out this section.
       The Managers recognize the significant work Arkansas State 
     University is conducting in the area of plant cell wall 
     structure and function and encourages the Secretary to 
     continue to recognize the value of plant-produced, 
     biotechnology-derived, enzymatic-developed products.
       The Managers are aware of the work being done at the 
     Pennsylvania State University on all aspects of biofuels 
     development from plant transformation to production, harvest, 
     and storage to fuel formulation and engine testing.
     (91) Specialty crop research initiative
       The House bill adds a new section, 413, to AREERA that 
     establishes the Specialty Crop Research Initiative to develop 
     and disseminate science-based tools to address the needs of 
     specific crops and their regions, including work in plant 
     breeding and genetics, safety, quality, and yield; efforts to 
     identify and address threats posed by invasive species; 
     marketing; pollination; and efforts to improve production. 
     The Secretary is authorized to award competitive grants 
     through this program. Appropriations are authorized at 
     $100,000,000 for each of fiscal years 2008 through 2012. 
     Additionally, $215,000,000 in mandatory funds is to be 
     provided in fiscal year 2008 to remain available until 
     expended. The Director of NARPO shall coordinate this program 
     to avoid duplication. (Section 7411)
       The Senate amendment adds a new section, 412, to AREERA 
     that establishes a Specialty Crop Research Initiative. This 
     section is similar to the House provision and has additional 
     language to include in the purposes of the program the 
     optimization of organic specialty crop production and 
     research on methods to prevent, control, and respond to 
     pathogen contamination of specialty crops, including fresh-
     cut produce. Mandatory funding is provided at $16,000,000 per 
     year for fiscal years 2008 through 2012 for the initiative. 
     (Section 7211)
       The Conference substitute adopts the House provision with 
     an amendment that adds a new section, 412, to AREERA. It 
     expands the initiative to a research and extension 
     initiative; incorporates the prevention, detection, 
     monitoring, control, and response to food safety hazards in 
     the production and processing of specialty crops, including 
     fresh products; allocates 10 percent of the funds obligated 
     through this initiative to each of the research and extension 
     activities described in this section; and provides 
     $230,000,000 in mandatory funds for fiscal years 2008 
     through 2012. (Section 7311)
       The Managers intend that most activities funded by the 
     initiative would have grant terms of short duration. However, 
     the Managers are aware that there are areas of research where 
     longer term grants are needed, such as research related to 
     tree fruits. The Managers expect the Secretary to use 10-year 
     grant terms only when it is critical for long-term systems 
     research.
       The Managers recognize the critical importance of research 
     directed at food safety hazards in the production and 
     processing of specialty crops including fresh fruits and 
     vegetables. The Managers encourage the Secretary to select 
     projects for funding this area at focus on applied research 
     and technology transfer.
     (92) Office of Pest Management Policy
       The House bill extends section 614(f) of AREERA through 
     2012. (Section 7412)
       The Senate amendment amends section 614 of AREERA by 
     placing the Office of Pest Management Policy within the 
     Office of the Chief Economist and extending the authorization 
     of appropriations through 2012. (Section 7212)
       The Conference substitute adopts the House provision. 
     (Section 7313)
     (93) Food Animal Residue Avoidance Database Program
       The Senate amendment amends section 604 of AREERA by 
     authorizing annual appropriations of $2,500,000 for the Food 
     Animal Residue Avoidance Database program. (Section 7213)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment that clarifies that the authorized funds are in 
     addition to other funds available as specified in section 
     604(c) of AREERA. (Section 7312)
     (94) Critical Agricultural Materials Act
       The House bill (section 7501) and the Senate amendment 
     (section 7301) extend section 16(a) of the Critical 
     Agricultural Materials Act through 2012.
       The Conference substitute adopts the Senate provision. 
     (Section 7401)
     (95) Equity in Educational Land-Grant Status Act of 1994
       The House bill extends sections 533(b), 535, and 536(c) of 
     the Equity in Educational Land-Grant Status Act of 1994 
     (EELGSA) through 2012. (Section 7502)
       The Senate amendment extends sections 533(b), 535, and 
     536(c) of EELGSA through 2012 and amends section 532 of the 
     EELGSA to add Ilisagvik College in Alaska to the list of 
     land-grant tribal colleges. (Section 7302)
       The Conference substitute adopts the Senate provision with 
     an amendment to redistribute endowment funds that would be 
     paid to a 1994 Institution among other 1994 Institutions if 
     that 1994 Institution declines to accept funds or fails to 
     meet existing accreditation requirements. (Section 7402)
     (96) Agricultural Experiment Station Research Facilities Act
       The House bill (section 7503) and the Senate amendment 
     (section 7305) extend section

[[Page H3637]]

     6(a) of the Research Facilities Act through 2012.
       The Conference substitute adopts the House provision. 
     (Section 7405)
     (97) National Agricultural Research, Extension and Teaching 
         Policy Act Amendments of 1985
       The House bill (section 7306) and the Senate amendment 
     (section 7306) extend section 1431 of the NARETPA Amendments 
     of 1985 through 2012.
       The Conference substitute adopts the Senate provision. 
     (Section 7416)
     (98) Competitive, Special and Facilities Research Grant Act 
         (National Research Initiative)
       The House bill amends section 2 of the Competitive, 
     Special, and Facilities Research Grant Act (CSFRGA) to extend 
     the authorization of appropriations through 2012 and to 
     repeal the authority to limit allowable overhead costs. 
     (Section 7505)
       The Senate amendment has no comparable provision.
       The Conference substitute deletes the House provision but 
     reauthorizes section 2 of the CSFRGA in section 7406 of this 
     Act.
     (99) Agricultural Risk Protection Act of 2000 (Carbon Cycle 
         Research)
       The House bill extends the section 221of the Agricultural 
     Risk Protection Act of 2000 (ARPA) through 2012. (Section 
     7506)
       The Senate amendment extends the section 221 of ARPA 
     through 2012 and transfers authority for this program from 
     that Act to the Farm and Energy Security Act of 2007. 
     (Section 7315)
       The Conference substitute adopts the House provision. 
     (Section 7407)
     (100) Renewable Resources Extension Act of 1978
       The House bill (section 7507) and the Senate amendment 
     (section 8201) extend section 6 of the Renewable Resources 
     Extension Act of 1978 (RREA) and section 8 of RREA through 
     2012. (Section 7507)
       The Conference substitute adopts the House provision. 
     (Section 7413)
       The Managers are aware of the U.S. Forest Service's (USFS) 
     work one Fire Research and Management Exchange System, an 
     Internet-based, centralized national portal for access to and 
     exchange of science-based data, analysis tools, training 
     materials, and other information related to interagency 
     wildland fire management. The Managers recognize that the 
     system can make a major contribution to science-based 
     understanding and response to wildland fires, which continue 
     to threaten many areas of our nation. The Managers expect 
     the USFS to continue to work with its partners to develop 
     a plan for nationwide implementation by 2011.
     (101) National Aquaculture Act of 1980
       The House bill (section 7508) and the Senate amendment 
     (section 7311) extend section 10 of the National Aquaculture 
     Act of 1980 (16 U.S.C. 2809) through 2012. (Section 7508)
       The Conference substitute adopts the Senate provision. 
     (Section 7414)
     (102) Construction of a Chinese Garden at the National 
         Arboretum
       The House bill amends the Act of March 4, 1927, (20 U.S.C. 
     191 et seq.) by authorizing the construction of a Chinese 
     garden at the National Arboretum. (Section 7509)
       The Senate amendment amends the Act of March 4, 1927, (20 
     U.S.C. 191 et seq.) by authorizing the construction of a 
     Chinese garden at the National Arboretum, prohibiting federal 
     funds from being used for the construction of the Chinese 
     Garden, and requiring an annual report to Congress on the 
     budget and expenditures of the National Arboretum. (Section 
     7312)
       The Conference substitute adopts the House provision. 
     (Section 7415)
     (103) Public Education Regarding Use of Biotechnology in 
         Producing Food for Human Consumption
       The House bill extends section 10802 of the Farm Security 
     and Rural Investment Act of 2002 (FSRIA) through 2012. 
     (Section 7510)
       The Senate amendment has no comparable provision.
       The Conference substitute deletes the House provision and 
     repeals section 10802 of FSRIA. (Section 7411)
     (104) Fresh Cut Produce Safety Grants
       The House bill authorizes the Secretary to award 
     competitive research and extension grants to improve and 
     enhance the safety of fresh cut produce. Universities, 
     colleges, and other entities that have relationships with 
     producers of fresh cut produce are eligible. Grant recipients 
     must provide an equal amount of matching funds or in-kind 
     support from non-federal sources. The Director of NARPO is to 
     coordinate this program to avoid duplication. Mandatory 
     funding of $25,000,000 is provided for each of fiscal years 
     2008 through 2012. Additionally, an appropriation for 
     necessary funds is authorized from fiscal year 2008 through 
     fiscal year 2012. (Section 7511)
       The Senate amendment has no comparable provision.
       The Conference substitute deletes the House provision and 
     incorporates the purposes and priorities of this program and 
     funding into section 7311 of this Act.
     (105) UDC/EFNEP eligibility
       The House bill (section 7512) and the Senate amendment 
     (section 7313) amend Section 208 of the District of Columbia 
     Public Postsecondary Education Reorganization Act (Public Law 
     93-471; 88 Stat. 1428) to make the UDC eligible for the 
     Expanded Food and Nutrition Education Program.
       The Conference substitute adopts the Senate provision. 
     (Section 7417)
     (106) Hatch Act of 1887
       The House bill amends Section 3(d)(4) of the Hatch Act of 
     1887 by requiring a 50 percent match of funds from the 
     District of Columbia in order for UDC to receive formula 
     funds for agricultural research. The Secretary is allowed to 
     waive the matching requirement if necessary. (Section 7513)
       The Senate amendment amends Section 3(d)(4) of the Hatch 
     Act of 1887 by requiring a 50 percent match of funds from the 
     District of Columbia in order for UDC to receive formula 
     funds for agricultural research. The Secretary is allowed to 
     waive the matching requirement if necessary. This section 
     also amends Section 6 of the Hatch Act of 1887 by eliminating 
     Penalty Mail Authorities for State agricultural experiment 
     stations and the extension service and making conforming 
     amendments to NARETPA and to 39 U.S.C. 3202(a). (Section 
     7304)
       The Conference substitute adopts the Senate provision. 
     (Section 7404)
     (107) Smith-Lever Act
       The Senate amendment amends Section 3 of the Act of May 8, 
     1914 (7 U.S.C. 343) to allow 1890 institutions to participate 
     in the Children, Youth, and Families Education and Research 
     Network Program. This section also amends section 5 of the 
     Act of May 8, 1914 (7 U.S.C. 345) to eliminate the Governor's 
     Report requirement for the extension service. (Section 7304)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to change programs authorized under section 3(d) 
     of the Smith-Lever Act (7 U.S.C. 343(d)) into programs that 
     award competitive grants and to add a conforming amendment to 
     section 1444(a)(2) of NARETPA. (Section 7403)
     (108) Education grants to Alaska Native Serving Institutions 
         and Native Hawaiian Serving Institutions
       The Senate amendment amends section 759 of the Agriculture, 
     Rural Development, Food and Drug Administration, and Related 
     Agencies Appropriations Act, 2000 by permitting consortia of 
     Alaska Native and Native Hawaiian Serving Institutions to 
     designate fiscal agents and allocate funds for their members. 
     (Section 7308)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to add this provision as a new section, 1419B, 
     to NARETPA. (Section 7112)
     (109) McIntire-Stennis Cooperative Forestry Act
       The Senate amendment amends Section 2 of the McIntire-
     Stennis Cooperative Forestry Act (16 U.S.C. 582a-1) by 
     authorizing the participation of 1890 institutions to 
     participate in the McIntire-Stennis cooperative forestry 
     program. (Section 7310)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 7412)
     (110) Exchange or sale authority
       The Senate amendment adds Section 307 to Title III of the 
     Federal Crop Insurance and Department of Agriculture 
     Reorganization Act of 1994 by authorizing USDA to exchange, 
     sell, or otherwise dispose of any qualified items of personal 
     property and to retain and apply the sale or other proceeds 
     to acquire any qualified items of personal property or to 
     offset costs related to the maintenance, care, or feeding of 
     any qualified items of personal property. (Section 7314)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 7408)
     (111) Enhanced Use Lease Authority Pilot Program
       The Senate amendment adds a new section, 308, to Title III 
     of the Federal Crop Insurance and the Department of 
     Agriculture Reorganization Act of 1994 by establishing a 
     pilot program that allows non-Federal entities to use and 
     invest in capital improvements at the Beltsville Agricultural 
     Research Center and the National Agricultural Library by 
     leasing non-excess property of the Center or the Library. 
     (Section 7316)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to limit the terms of leases established under 
     this authority to 30 years, sunset this authority five years 
     after the date of enactment of this Act, and make technical 
     changes. (Section 7409)
     (112) Research and education grants for the study of 
         antibiotic-resistant bacteria in livestock
       The Senate amendment establishes a competitive grant 
     program for research and education on antibiotic-resistant 
     bacteria in livestock. (Section 7317)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to modify the purposes of this research program. 
     (Section 7521)
       The Managers are aware that resistance to antibiotics is a 
     serious and growing public health concern in the United 
     States and around the world. The Managers intend that section 
     7521 of this Act provide the necessary

[[Page H3638]]

     research and information for livestock producers as well as 
     the general public to minimize the use of such drugs while 
     still ensuring healthy animals and people. The Managers 
     encourage the Secretary to fund research that can minimize 
     the development and spread of antibiotic-resistant bacteria 
     and to make this a priority research area within relevant 
     competitive research programs, including national programs 
     related to animal production and water quality.
     (113) Merit review of extension and educational grants
       The House bill amends subsection (a)(2)(A) of section 103 
     of AREERA by inserting NIFA as the administering body for 
     which merit review procedures must be established. (Section 
     7601)
       The Senate amendment has no comparable provision.
       The Conference substitute deletes the House provision.
     (114) Review of plan of work requirements
       The House bill (section 7602) and the Senate amendment 
     (section 7503) require a review of the Plan of Work 
     requirements under NARETPA, the Hatch Act, and the Smith-
     Lever Act. They also require a report to Congress identifying 
     measures to streamline the plan of work requirements.
       The Conference substitute adopts the House provision with 
     an amendment to remove the reporting requirement. (Section 
     7505)
     (115) Multistate and integration funding
       The House bill amends section 3 of the Hatch Act of 1887 
     and section 3 of the Smith-Lever Act by requiring that, of 
     the federal formula funds States receive under these Acts, 25 
     percent must be spent on the integration of cooperative 
     research and extension activities. (Section 7603)
       The Senate amendment has no comparable provision.
       The Conference substitute deletes the House provision.
     (116) Expanded Food and Nutrition Education Program
       The House bill amends section 1425 of NARETPA by changing 
     the allocation of funds in excess of the amount appropriated 
     in fiscal year 1981. Funds in the amount of $100,000 are to 
     be distributed to each land-grant college and university. The 
     authorization of appropriations is increased to $90,000,000 
     through 2014. (Section 7604)
       The Senate amendment is the same as House provision with 
     technical differences. (Section 7012)
       The Conference substitute adopts the Senate provision with 
     an amendment to make technical changes. (Section 7116)
     (117) Grants to 1890 schools to expand extension capacity
       The House bill (section 7605) and the Senate amendment 
     (section 7005) amend section 1417(b)(4) of NARETPA to add 
     extension as one of the purposes for which grants may be made 
     through this program.
       The Conference substitute adopts the House provision. 
     (Section 7107)
     (118) Borlaug International Agricultural Science and 
         Technology Fellowship Program
       The House bill establishes a fellowship program that 
     provides scientific training to individuals from eligible 
     countries that specialize in agricultural research, 
     extension, and education. Necessary sums are authorized to be 
     appropriated without fiscal year limitation. (Section 7606)
       The Senate amendment adds a new section, 1473I, to NARETPA 
     that authorizes annual appropriations for the Borlaug 
     International Agricultural Science and Technology Fellowship 
     Program. The fellowship program brings scientists from 
     developing countries to U.S. land-grant institutions to learn 
     about improving agricultural productivity. (Section 7042)
       The Conference substitute adopts the Senate provision. 
     (Section 7139)
     (119) Cost recovery
       The House bill amends Section 1473A of NARETPA by raising 
     the indirect cost cap for cost reimbursable agreements 
     between the Secretary and State cooperative institutions or 
     colleges and universities from 10 percent to 19 percent. 
     (Section 7607)
       The Senate amendment amends Section 1473A of NARETPA by 
     raising the indirect cost cap for cost reimbursable 
     agreements between the Secretary and State cooperative 
     institutions or colleges and universities from 10 percent to 
     30 percent. (Section 7031)
       The Conference substitute deletes both the House and Senate 
     provisions.
     (120) Organic food and agricultural systems funding
       The House bill expresses a sense of Congress that a portion 
     of the annual funding provided for ARS should support 
     research specific to organic food and agricultural systems. 
     (Section 7608)
       The Senate amendment expresses a sense of the Senate that 
     recognizes the need to increase funding at USDA for research 
     specific to organic agriculture to keep pace with the 
     expansion of the organic sector of U.S. agriculture. (Section 
     7505)
       The Conference substitute deletes the House and Senate 
     provisions.
     (121) Demonstration project authority for temporary positions
       The Senate amendment authorizes the demonstration project 
     authority for temporary positions indefinitely. (Section 
     7502)
       The House bill has no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 7528)
     (122) Modifications to information technology service
       The Senate amendment prohibits the Secretary from 
     implementing any modification that reduces the availability 
     or provision of information technology service, or 
     administrative management control of that service, including 
     data or center service agency, functions, and personnel at 
     the National Finance Center and the National Information 
     Technology Center service locations until a notification is 
     received by Congress from the Department. This section 
     requires the Secretary to report to Congress and the 
     Government Accountability Office on specified administrative 
     modifications made to the National Finance Center and 
     National Technology Center service locations. (Section 7506)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate provision.
     (123) Studies and reports by the Department of Agriculture, 
         the Department of Health and Human Services, and the 
         National Academy of Sciences on food products from cloned 
         animals.
       The Senate amendment requires studies on the safety and the 
     impact on trade of allowing food products from cloned animals 
     and their offspring into the food supply. The Secretary of 
     Health and Human Services (HHS) is prohibited from issuing 
     the final draft risk assessment on food from cloned animals 
     and their offspring. The Secretary of HHS is also prohibited 
     from lifting the voluntary moratorium on allowing food from 
     cloned animals and their offspring from entering the food 
     supply until after the studies are completed. (Section 7507)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate amendment.
     (124) Animal bioscience facility in Bozeman, Montana
       The Senate amendment authorizes appropriations of 
     $16,000,000 for the construction of an animal bioscience 
     facility in Bozeman, Montana. (Section 7508)
       The House bill has no comparable provision.
       The Conference substitute deletes the Senate amendment.

                          TITLE VIII--FORESTRY

     (1) National priorities for private forest conservation
       The House bill amends section 2 of the Cooperative Forestry 
     Assistance Act of 1978 (CFAA) by requiring the Secretary to 
     focus on a set of three national private forest conservation 
     priorities when allocating appropriated CFAA funds: (1) 
     conserving and managing working forest landscapes; (2) 
     protecting forests from threats, including wildfire, 
     hurricane, tornado, windstorm, snow or ice storm, flooding, 
     drought, invasive species, or insect or disease outbreak, and 
     restoring appropriate forest types in response to such threat 
     [included because paragraphs (1) & (3) contain full list of 
     items]; and (3) enhancing public benefits from private 
     forests, including air and water quality, forest products, 
     forestry-related jobs, production of renewable energy, 
     wildlife and wildlife habitat, and recreation. The House 
     bill requires the Secretary to submit a report to Congress 
     describing how funding has been used under the CFAA, and 
     through other programs administered by the Secretary, to 
     address the three national priorities. (Section 8001)
       The Senate amendment amends section 2 of the CFAA by adding 
     a new subsection which requires the Secretary to focus on a 
     set of three national private forest conservation priorities 
     when allocating appropriated CFAA funds. The national 
     priorities are: (1) conserving and managing working forest 
     landscapes for multiple values and uses; (2) protecting 
     forests from threats to forest and forest health including 
     unnaturally large wildfires, hurricanes, tornadoes, 
     windstorms, snow and ice storms, flooding, drought, invasive 
     species, insect or disease outbreak, development, and 
     restoring appropriate forest structures and ecological 
     processes in response to such threats; and (3) enhancing 
     public benefits from private forests including air and water 
     quality, forest products, forest-related jobs, production of 
     renewable energy, wildlife, enhancing biodiversity, the 
     establishment of wildlife corridors and habitat, and 
     recreation. The Senate amendment amends section 2 of the CFAA 
     by adding a new subsection that requires the Secretary to 
     submit a report to Congress describing how CFAA funds were 
     used to address the three national priorities and the 
     outcomes achieved in meeting the national priorities. 
     (Section 8001)
       The Conference substitute adopts the House provision with 
     minor changes. (Section 8001)
     (2) Long-term, state-wide assessments and strategies for 
         forest resources
       The House bill amends section 2 of the CFAA by adding a new 
     section that requires, for a State to be eligible to receive 
     CFAA funds, that the State forester--or equivalent State 
     official--develop and submit a State-wide assessment of 
     forest resource conditions and a State-wide forest resource 
     strategy. The State-wide assessment of forest conditions is 
     to encompass a number of factors, including: the conditions 
     and trends of forest resources in the State; the threats to

[[Page H3639]]

     forest lands and resources in the State, consistent with the 
     three national priorities; any priority areas or regions in a 
     State that are of priority; and any areas that are of 
     priority to more than just that State. The State-wide forest 
     resource strategy is to encompass a number of factors, 
     including: strategies for addressing threats to forest 
     resources in the State outlined in the State-wide assessment 
     of forest conditions; and a description of the resources 
     available to the State forester--or equivalent State 
     official--from all sources to implement the State-wide forest 
     resource strategy. The State forester--or equivalent State 
     official--is required to submit the State-wide forest 
     resource strategy on an annual basis. The State-wide 
     assessment of forest resource conditions is to be updated as 
     the Secretary or State forester--or equivalent State 
     official--determines to be necessary. The State forester--or 
     equivalent State official--is required in developing the 
     State-wide assessment and annual strategy, to coordinate with 
     the State Forest Stewardship Committee established for the 
     State, the State wildlife agency, and the State Technical 
     Committee. The Secretary is prohibited from using more than 
     $10 million in a fiscal year to implement this section. 
     (Section 8002)
       The Senate amendment amends the CFAA by inserting after 
     section 19 a new section entitled ``Comprehensive State-wide 
     Forest Planning'' under which requires the Secretary to 
     provide financial and technical assistance to States for use 
     in the development and implementation of State-wide forest 
     resource assessments and plans. For a State to be eligible 
     for CFAA funding, the State forester or equivalent State 
     official must develop a State-wide forest resource assessment 
     and plan. At a minimum, the State-wide forest resource 
     assessment and plan should identify each critical forest 
     resource in the State consistent with national priorities; 
     incorporate any current forest management plan in the State; 
     address the needs of the region without regard to State 
     borders; provide a comprehensive statewide plan for managing 
     forestland that achieves the three national priorities; and 
     include a multiyear forest management strategy for forest 
     management. The State-wide forest resource and plan should 
     include a multiyear integrated forest management strategy. 
     The State Forester--or equivalent State official--is required 
     to coordinate with the State Forest Stewardship Coordination 
     Committee, State wildlife agencies, the State Technical 
     Committee and other applicable Federal land management 
     agencies in developing State-wide assessments and plans. 
     Subsection (b)(3) requires the Secretary to review the 
     statewide assessments and plans established under this 
     section. Subsection (d) authorizes $10,000,000 to be 
     appropriated to carryout this section. (Section 8004)
       The Managers adopt the House provision in the Conference 
     substitute with amendment. The amendment allows the Secretary 
     to require the long term State-wide assessment and strategy 
     to be updated and resubmitted as the Secretary or State 
     Forester or equivalent State official determines necessary. 
     The Managers expect that the assessments and strategies will 
     guide the annual allocation of Federal resources available 
     under the authorities of the CFAA, to focus such resources on 
     national priorities. In developing and updating the State-
     wide assessments and strategies, applicable Federal land 
     management agencies are added to the list of organizations 
     with which the State forester or equivalent State official is 
     expected to coordinate. Existing forest management plans of 
     the State are to be incorporated when developing State-wide 
     assessments and strategies. The Conference amendment 
     authorizes up to $10,000,000 to provide States financial and 
     technical assistance needed for the development of the 
     assessments and strategies under this section. The Conference 
     amendment requires the State forester--or equivalent State 
     official--to submit an annual report to the Secretary 
     demonstrating how Federal resources under the CFAA were used 
     to implement the State-wide strategy. (Section 8002)
       The Managers intend that Multi-State areas that are a 
     regional priority should reflect areas identified at both the 
     national and State level through assessment and mapping 
     efforts. The Managers recognize that there is a national 
     assessment and mapping effort underway and encourage 
     consideration be given to multi-State areas identified in 
     this effort.
     (3) Community forest and open space program
       The Senate amendment amends the CFAA by adding a new 
     section, 7A, entitled ``Community Forest and Open Space 
     Conservation Program.'' The program provides Federal matching 
     grants to help county or local governments, Indian tribes, or 
     non-profit organizations acquire private forests that are 
     threatened by conversion to non-forest uses and are 
     economically, environmentally and culturally important to 
     communities. The terms ``eligible entity,'' ``Indian 
     tribe,'' ``local governmental entity,'' ``non-profit 
     organization,'' ``program'' and ``Secretary'' are defined. 
     The Federal cost share of a grant provided under the 
     program is to equal not more than 50-percent of the cost 
     to acquire one or more parcels of land. Eligible entities 
     are permitted to provide a non-Federal match in cash, 
     donation, or in kind equal to the outstanding amount. An 
     application process is established whereby an eligible 
     entity is required to submit to the State forester or 
     equivalent official (or in the case of an eligible entity 
     that is an Indian tribe an equivalent official of the 
     Indian tribe) an application that includes a description 
     of land to be acquired and a forest plan that includes a 
     description of community benefits achieved from 
     acquisition. Eligible entities must provide public access 
     for recreational use consistent with the purposes of the 
     program and are prohibited from converting the property to 
     other uses. Eligible entities that sell or convert land 
     acquired under this program to non-forest use must 
     reimburse the Federal government in an amount equal to the 
     greater of the sale price or current appraisal value of 
     the land. Eligible entities that either sell or convert 
     the land are prohibited from being eligible for additional 
     grants under the program. The Secretary is authorized to 
     allocate 10-percent of funds made available for the 
     program to State foresters--or equivalent officials (or in 
     the case of an eligible entity that is an Indian tribe an 
     equivalent official of the Indian tribe)--for program 
     administration and technical assistance. An appropriation 
     of such sums as necessary is authorized to carryout the 
     program. (Section 8002)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 8003) The Managers strongly encourage eligible 
     entities acquiring forestland with resources under this 
     program to manage the forestland as ``working forests,'' 
     generating economic benefits and providing jobs and economic 
     stability to communities. The Managers encourage the 
     Secretary to provide a level of oversight over these acquired 
     forests, to see that these goals are met and maintained. The 
     authorities in this program allow non-profit organizations to 
     use funds to acquire properties under this program. The 
     Managers intend such authorities to be used only when a non-
     profit organization's acquisition of forestland results in a 
     clear benefit to the community, and where there is not a 
     significant loss in the property-tax base for the community. 
     Where a local government entity can perform the same 
     functions as the non-profit, the Managers encourage the 
     Secretary to work with the local government entity. 
     Additionally, revenues generated by the non-profit in the 
     management of forestland acquired under the program should be 
     used for the direct benefit of the local community.
     (4) Assistance to the Federated States of Micronesia, the 
         Republic of the Marshall Islands, and the Republic of 
         Palau
       The House bill amends section 13(d)(1) of the CFAA to 
     specify that the Federated States of Micronesia, the Republic 
     of the Marshall Islands, the Republic are Palau are to be 
     included in the terms ``United States'' or ``States'' for 
     purposes of the CFAA. (Section 8003)
       The Senate amendment is the same as the House bill. 
     (Section 8005)
       The Conference substitute adopts the House provision. 
     (Section 8004)
     (5) Changes to Forest Resource Coordinating Committee
       The House bill amends section 19(a) of the CFAA by revising 
     the Forest Resource Coordinating Committee (FRCC).
       The House bill states the FRCC is to be composed of the 
     following: the Chief of the Forest Service, the Chief of the 
     Natural Resources Conservation Service, the Director of the 
     Farm Service Agency; and the Administrator of the Cooperative 
     State Research, Education, and Extension Service.
       The House bill states the FRCC is to be composed of the 
     following persons: at least three State foresters or 
     equivalent State officials from geographically diverse 
     regions of the United States; a representative of a State 
     fish, a private nonindustrial forest landowner, a forest 
     industry representative, a conservation organization 
     representative, a land grant university or college 
     representative, a representative of a State Technical 
     Committees, and such other persons as the Secretary 
     determines appropriate.
       The House bill states the FRCC is to perform a number of 
     duties, including: (1) providing direction to the United 
     States Department of Agriculture (USDA) and enabling 
     coordination with State agencies and the private sector to 
     address the three national priorities; (2) clarifying 
     individual agency responsibilities for each agency 
     represented on the FRCC regarding the three national 
     priorities; (3) providing advice on the allocation of funds, 
     including competitive funds; and (4) assisting in developing 
     a report on efforts to address the three national priorities.
       The House bill requires the FRCC to meet twice a year to 
     discuss the national priorities and issues regarding 
     nonindustrial private forest land. (Section 8004)
       The Senate amendment contains no comparable provision.
       The Conference substitute adopts the House provision with 
     minor changes. (Section 8005)
     (6) Changes to State Forest Stewardship Coordinating 
         Committees
       The House bill amends section 19(b)(1)(B)(ii) of the CFAA 
     by specifying that a representative from a State Technical 
     Committee is to be on the State Forest Stewardship 
     Coordinating Committee (SFSCC). It also amends section 
     19(b)(2)(C) of the CFAA by mandating that the SFSCC is to 
     make recommendations for the State-wide assessments and 
     strategies. The House bill strikes section 19(b)(3) and 
     19(b)(4) of the CFAA. (Section 8005)

[[Page H3640]]

       The Senate amendment contains no comparable provision.
       The Conference substitute adopts the House provision. 
     (Section 8006)
     (7) Forest legacy applications
       The House bill maintains current law.
       The Senate amendment amends section 19(b)(2)(D) of the CF 
     AA by stating that applications submitted by Indian tribes do 
     not have to pass through the State Coordinating Committee. 
     (Section 8003)
       The Conference substitute deletes the Senate provision.
     (8) Competition in programs under Cooperative Forestry 
         Assistance Act of 1978
       The House bill authorizes the Secretary to competitively 
     allocate a portion of CFAA funds to State foresters or 
     equivalent State officials. The Secretary is required to 
     consult with the FRCC when determining the allocation of 
     funds. The Secretary is also required to give priority for 
     funding to States in which the strategies listed in the 
     State-wide assessments best promote the three national 
     priorities. (Section 8006)
       The Senate amendment contains no comparable provision.
       The Conference substitute adopts the House provision. 
     (Section 8007)
     (9) Cooperative forest innovation partnership projects
       The House bill states the Secretary is authorized to 
     competitively allocate not more than 5 percent of CFAA funds 
     to support innovative national, regional, or local education, 
     outreach, or technology projects that the Secretary 
     determines would increase the ability of USDA to address the 
     national priorities outlined in section 8001. State or local 
     governments, Indian tribes, land-grant colleges or 
     universities, or private entities are authorized to compete 
     for the funds. The House bill states the Secretary is 
     prohibited from covering more than 50 percent of the total 
     cost of a project. The Secretary is required, in calculating 
     the total cost of a project and the contributions made with 
     regard to the project, to include in-kind contributions. 
     (Section 8007)
       The Senate amendment contains no comparable provision.
       The Conference substitute adopts the House provision. 
     (Section 8008)
     (10) Healthy forest reserve program
       The House bill amends section 508(2) of the Healthy Forests 
     Restoration Act by extending the Healthy Forests Reserve 
     Program to 2012, and providing $10 million in mandatory 
     funding for each of the fiscal years 2008 through 2012. 
     (Section 8101)
       The Senate amendment moves the Healthy Forests Reserve 
     Program into the Food and Security Act of 1985. An 
     authorization of such sums as necessary are authorized for 
     fiscal years 2008 through 2012 to carry out the program. The 
     99-year easement option is eliminated and replaced with a 
     permanent easement option. Indian tribes are encouraged to 
     participate in the program by being allowed to enroll in 30-
     year contracts. The Senate amendment strikes section 502(e) 
     of the Healthy Forests Restoration Act, which limits the 
     amount of acreage that can be enrolled in the program to 2 
     million acres. (Section 2331)
       The Managers agree to adopt the House provision in the 
     Conference substitute, with amendment. The current 99-year 
     easement option is replaced with a permanent easement option. 
     Indian tribes are allowed to enter into 10-year cost-share 
     agreements or 30-year contracts that are equivalent to the 
     value of a 30-year easement. Of the funds expended in a 
     fiscal year, not more than 40 percent of the funding can be 
     used for cost-share agreements while not more than 60 percent 
     can be used for easements. A repooling date of April 1 is put 
     in place to address potential high demand for a particular 
     enrollment method. The Managers provide $9.75 million each of 
     fiscal years 2009 through 2012, in mandatory funding for the 
     program. The Managers adopted the changes in the Senate 
     amendment regarding Indian tribes, to ensure tribes can 
     participate in the program. The Managers intend that tribal 
     land enrolled in the program should be land held in private 
     ownership by a tribe or an individual tribal member. Tribal 
     lands held in trust or reserved by the U.S. government or 
     restricted fee lands should not be enrolled in the program, 
     regardless of ownership. (Section 8205)
     (11) Emergency forest restoration program
       The House bill amends title VI of the Agricultural Credit 
     Act (ACA) by authorizing the Secretary to provide financial 
     and technical assistance to owners of nonindustrial private 
     forest lands who have suffered a loss due to a number of 
     events, including wildfires, hurricanes, drought, and 
     windstorms, to assist with the development and implementation 
     of plans that: (1) provide for the restoration and the 
     rehabilitation of the nonindustrial private forest land; (2) 
     restores the land and its related natural resources; (3) use 
     best management practices on the forest land; and (4) 
     incorporate good stewardship and conservation practices on 
     the land.
       The House bill provides for a cost share of up to 75 
     percent, and limits the amount that an owner of nonindustrial 
     forest lands may receive to $50,000 per year. Nonindustrial 
     private landowners are eligible under the House bill if the 
     Secretary determines that their lands are under an imminent 
     threat of loss or damage by insect or disease and immediate 
     action would help them avoid loss or damage.
       The House bill defines nonindustrial private forest land to 
     mean rural lands, as determined by the Secretary that: (1) 
     have existing tree cover or had tree cover within the 
     preceding 10 years; and (2) are owned by any nonindustrial 
     private individual, group, association, corporation, Indian 
     tribe, or other private legal entity so long as the 
     individual, group, association, corporation, tribe or entity 
     has definitive decision-making authority over the lands.
       The House bill requires the Secretary of Agriculture to 
     issue regulations to carry out the section within one year of 
     enactment. (Section 8102)
       The Senate amendment establishes a new emergency landscape 
     restoration program to rehabilitate cropland, grasslands, and 
     private nonindustrial forest lands adversely affected by 
     natural catastrophic events such as fire, drought, flood, 
     excessive wind, ice, or other natural events. Entities 
     eligible for assistance are community-based associations and 
     city, county or regional governments, including watershed 
     councils and conservation districts. Individuals eligible for 
     assistance include producers, ranchers, operators, private 
     nonindustrial forest landowners, and landlords on working 
     agricultural land.
       The Senate amendment provides a source of financial 
     assistance for restoring and protecting natural resources and 
     preventing further impairment of land and water, allows the 
     Secretary to purchase floodplain easements, prioritizes 
     applications that protect human health and safety, and 
     provides technical assistance and cost-share payments up to 
     75 percent of the cost of remedial activities to rehabilitate 
     watersheds.
       The Senate amendment defines ``remedial activities'' to 
     include debris removal, stream bank stabilization, 
     establishment of cover, restoration of fences, construction 
     of conservation structures, providing livestock water in 
     drought situations, restoring nonindustrial private 
     forestland. Discretionary funding is authorized.
       The Senate amendment provides for the temporary 
     administration of current emergency programs until final 
     regulations are formulated. (Section 2398)
       The Conference substitute adopts the House provision with 
     amendment. The amendment clarifies that Secretary is 
     authorized to make payments to owners of nonindustrial 
     private forest land to carry out specific emergency measures 
     on their land following natural disasters. To receive 
     assistance owners will be required to demonstrate that 
     their land had tree cover prior to the natural disaster. 
     The amendment includes a separate authorization of 
     appropriations, at such sums as necessary.
       The Managers include a definition of natural disasters, 
     with an allowance for Secretarial discretion in determining 
     if other resource-impacting events other than those 
     specifically mentioned, constitute a natural disaster. The 
     Managers intend the discretion to be used to help forest 
     owners recover from events such as catastrophic insect or 
     disease infestations, if the Secretary determines that such 
     events are far outside normal ranges and did not result from 
     a lack of forest management. Infestations can include 
     outbreaks of non native forest pests including Emerald Ash 
     Borer, Hemlock Woolly Adelgid, and Sudden Oak Death. (Section 
     8203)
       The Managers recognize that the Forest Service has 
     significant experience in responding to natural disasters 
     including assessment of resource damage and responding to a 
     wide range of incidents and emergencies. The Managers 
     encourage the Secretary of Agriculture to utilize this 
     expertise in implementing this section, where appropriate.
     (12) Office of International Forestry
       The House bill maintains current law, and extends the 
     authorization of appropriation to 2012. (Section 8103)
       The Senate amendment is the same as the House bill. 
     (Section 8203)
       The Conference substitute adopts the House provision. 
     (Section 8202)
     (13) Rural revitalization technologies
       The House bill maintains current law, and extends the 
     authorization through 2012. (Section 8014)
       The Senate amendment contains no comparable provision.
       The Conference substitute adopts the House provision. 
     (Section 8201)
     (14) Renewable Resources Extension Act
       The House bill extends authorization through fiscal year 
     2012 and makes provisions of the Renewable Resources 
     Extension Act effective through September 30, 2012. (Section 
     7507)
       The Senate amendment is the same as the House bill. 
     (Section 8201)
       The Conference substitute adopts the House provision. 
     (Section 7413)
     (15) Definitions
       The Senate amendment provides definitions for ``Indian'', 
     ``Indian Tribe'' and ``National Forestry System'' that will 
     be used under Subtitle B of this bill--Tribal-Forest Service 
     Cooperative Relations. (Section 8101)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (16) Indian Tribes participation in the Forest Legacy Program
       The Senate amendment amends section 7(a) of the CF AA by 
     including Indian tribes as direct participants in the Forest 
     Legacy Program. Section 7(l) of the CFAA is amended to allow 
     Indian tribes to receive grants

[[Page H3641]]

     from the Secretary to carry out the Forest Legacy Program. 
     The Secretary is prohibited from providing grant for any 
     project on land held in trust by the United States. 
     Additionally, land acquired using grant funds cannot be 
     converted to land held in trust by the United States on 
     behalf of any Indian tribe. (Section 8111)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (17) Indian Tribes assistance
       The Senate amendment authorizes the Secretary to provide 
     financial, technical, educational and related assistance to 
     Indian tribes for consultation and coordination with the U.S. 
     Forest Service on issues relating to: (1) access to Forest 
     Service land by members of a tribe for traditional, religious 
     and cultural purposes; (2) coordinated or cooperative 
     management of resources shared by the tribe and the Forest 
     Service; (3) the provision of expertise or knowledge; (4) 
     projects and activities for conservation education and 
     awareness with respect to forestland and grassland that is 
     eligible Indian land; and (5) technical assistance for forest 
     resources planning, management, and conservation on eligible 
     Indian land. Indian tribes are only allowed to participate in 
     one approved activity that receives assistance under this 
     section or the Forest Stewardship Program under section 5 of 
     the CFAA. The Secretary is required to promulgate regulations 
     relating to assistance under this section within 180 days of 
     enactment, including rules for determining the distribution 
     of assistance. The Secretary is also required to coordinate 
     with the Secretary of the Interior to ensure that activities 
     authorized under this section do not conflict with Indian 
     tribal programs at the Department of the Interior and achieve 
     the goals established by affected Indian tribes. (Section 
     8112)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (18) Purposes of cultural and heritage cooperative 
         authorities
       The Senate amendment: permits the reburial of human remains 
     and cultural items, including items repatriated under the 
     Native American Graves Protection and Repatriation Act, on 
     National Forest System land; prevents the unauthorized 
     disclosure of information regarding burial sites; authorizes 
     the Secretary to allow Indians and Indian tribes to access 
     National Forest System land for traditional and cultural 
     purposes; and authorizes the Secretary to protect the 
     confidentiality of certain information that is culturally 
     sensitive to Indian tribes. (Section 8121)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 8101)
     (19) Definitions
       The Senate amendment provides definitions for ``adjacent 
     site,'' ``cultural items,'' ``human remains,'' ``lineal 
     descendant,'' ``reburial site,'' and ``traditional and 
     cultural purpose.'' (Section 8122)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 8102)
     (20) Authorization for reburial of human remains and cultural 
         items on National Forest System land
       The Senate amendment provides that the Secretary may allow 
     the use of National Forest System land for reburial of human 
     remains or cultural items in possession of the Indian tribe 
     or lineal descendant that have been disinterred from National 
     Forest System land or adjacent site. The Senate amendment 
     allows the Secretary to recover or rebury human remains and 
     cultural items on National Forest System land at Federal 
     expense when done with the consent of the affected Indian 
     tribe or lineal descendent. It also allows the Secretary to 
     authorize such uses on reburial sites, or the area 
     immediately surrounding the reburial sites, as the Secretary 
     determines necessary for management of the National Forest 
     System land. The Secretary is required to avoid adverse 
     impacts to cultural items and human remains to the maximum 
     extent practicable. (Section 8123)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     minor changes. (Section 8103)
     (21) Temporary closure of National Forest System land for 
         traditional and cultural purposes
       The Senate amendment requires the Secretary to ensure, to 
     the maximum extent practicable, that Indian tribes have 
     access to National Forest System land for traditional and 
     cultural purposes. It provides that the Secretary may 
     temporarily close from public access specifically identified 
     National Forest System land to protect the privacy of tribal 
     activities for traditional and cultural purposes on the 
     smallest practicable area for a minimal period of time. 
     (Section 8124)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 8104)
     (22) Forest products for traditional and cultural purposes
       The Senate amendment allows the Secretary to provide Indian 
     tribes with forest products from National Forest System land 
     if the forest products are for traditional and cultural 
     purposes and are not used for commercial purposes. (Section 
     8125)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 8105)
     (23) Disclosure
       The Senate prohibits the Secretary from disclosing 
     information under the Freedom of Information Act relating to: 
     human or cultural items reburied on National Forest System 
     land or a site used for traditional and cultural purposes by 
     an Indian tribe; and resources, cultural items, uses or 
     activities that have a traditional and cultural purpose and 
     are provided to the Secretary by an Indian tribe under an 
     express expectation of confidentiality in the context of 
     forest and rangeland research activities carried out by the 
     Forest Service. The Secretary is not required to disclose 
     information concerning the identity, use or specific location 
     of a site or resource used for traditional and cultural 
     purposes by an Indian tribe; or certain cultural items. The 
     Secretary may disclose information about the location of 
     human remains or cultural items if the Secretary consults 
     with an affected Indian tribe or lineal descendant before 
     disclosure and determines that the disclosure is necessary to 
     protect human remains or cultural items from harm, theft, or 
     destruction and mitigates any adverse impacts that may result 
     from disclosure. The Secretary may disclose information 
     regarding human remains or cultural items if the Secretary 
     determines that disclosing the information to the public 
     would not create an unreasonable risk of harm, theft or 
     destruction of the resource, site or object; and would be 
     consistent with other applicable laws. (Section 8126)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate amendment with 
     minor changes. (Section 8106)
     (24) Severability and savings provisions
       The Senate amendment provides that if any provision in 
     Subtitle B of the amendment is deemed invalid it will not 
     affect the remainder of the subtitle. It also provides a 
     savings clause that covers trust responsibility, agreements 
     between the Forest Service and Indian tribes, rights of an 
     Indian tribe, and rights relating to National Forest System 
     land or other public land. (Section 8127)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate amendment. 
     (Section 8107)
     (25) Hispanic-Serving Institution Agricultural Land National 
         Resources Leadership Program
       The House bill authorizes the Secretary to establish an 
     undergraduate scholarship program to assist Hispanic-serving 
     institutions in the retention, recruitment, and training of 
     Hispanics and other under-represented groups in forestry and 
     related fields. An appropriation of such sums as necessary is 
     authorized for fiscal years 2008 through 2012 to carry out 
     the program. (Section 8201)
       The Senate amendment contains no comparable provision.
       The Conference substitute adopts the House provision. 
     (Section 8402)
     (26) Green Mountain boundary adjustment
       The Senate amendment authorizes modification of the 
     boundary of the Green Mountain National Forest in Vermont to 
     include 13 designated expansion units depicted on forest maps 
     Green Mountain Expansion Area Map I and Green Mountain 
     Expansion Area Map II, which is on file with the Chief of 
     the Forest Service. (Section 8203)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 8301)
     (27) Illegal logging
       The Senate amendment amends section 2(f) of the Lacey Act 
     Amendments of 1981 to change the definition of ``plant.'' 
     Section 2(j) of the Lacey Act is amended to define the terms 
     taken and taking. Section 3(a)(2)(B) of the Lacey Act is 
     amended to make it illegal for any plant: to be taken, 
     possessed, transported or sold in violation of any State or 
     foreign law that protects plants or regulates the theft of 
     plants; to be taken from a park or forest reserve, or other 
     officially protected area; and to be taken from an officially 
     designated area or without, or contrary to, required 
     authorization. The Senate amendment also makes it illegal to 
     take, possess, transport or sell plants without the payment 
     of royalties, taxes, or stumpage fees or in violation of any 
     limitation under any State or any foreign law. Section 
     3(a)(3) of the Lacey Act is amended to make it illegal, 
     within the special maritime and territorial jurisdiction of 
     the United States, for any plant to be taken, possessed, 
     transported or sold in violation of any state or foreign law 
     that regulates the theft of plants. The taking of plants from 
     a park or forest reserve, or other officially protected area 
     and the taking of plants from an officially designated area 
     or without, or contrary to, required authorization are also 
     made illegal. Additionally, the amendment makes it illegal to 
     take, possess, transport or sell plants without the payment 
     of royalties, taxes, or stumpage fees or in violation of any 
     limitation under any State or any foreign law, governing the 
     export or transshipment of plants.

[[Page H3642]]

       A new subsection (f) is created in the Lacey Act to require 
     a plant declaration to be filed upon importation of a plant. 
     The plant declaration must include the scientific name of any 
     plant, a description of the value, quantity (including the 
     unit of measure) of the plant, and the name of the country 
     from where the plant was taken. If a plant species or country 
     of origin cannot be determined, the plant declaration is to 
     include a list of possible plant species that could be found 
     in the product or a list of possible countries from which the 
     plant originated. An exclusion is provided for plants used 
     exclusively as packing material unless the packing materials 
     are the items being brought in. The Secretary is required to 
     review the plant declaration. The Secretary is also required 
     to review the exclusion for wood and paper packing and to 
     limit the scope of the exclusion if the Secretary determines 
     that such a limitation in scope is warranted. The Secretary 
     is required to issue a report with analyses and 
     recommendations on the affects of these new requirements.
       Section 4 of the Lacey Act is amended by making conforming 
     technical changes to the penalties and sanctions section of 
     the Act. The forfeiture provisions in Section 5 of the Lacey 
     Act are amended by adding a new subsection (d) which 
     reaffirms, as has been the case since 2002, that civil 
     forfeitures under this section shall are to be governed by 
     chapter 46 of title 18, United States Code. (Section 8204)
       The House bill contains no comparable provision.
       The Managers agree to include the Senate provision in the 
     Conference substitute, with an amendment to modify the 
     definition of plant, exclude recycled material from the plant 
     declaration, clarify the application of section 3 paragraph 
     (B)(iii) of the Lacey Act to regulations or laws pertaining 
     to the export or transshipment of plants, and to require the 
     Secretaries of Agriculture and the Interior to develop 
     regulations to further define the term ``plant.''
       The Managers understand illegal logging undermines 
     responsible forest enterprises by distorting timber markets 
     with unfair competition and price undercutting. Illegal 
     logging also threatens the conservation of forest resources, 
     wildlife, and biodiversity, by facilitating forest conversion 
     to non-forest uses and depleting or completely eliminating 
     certain forest ecosystems or the habitat of certain forest 
     dependent wildlife. Finally, illegal logging results in a 
     loss of revenue when taxes or royalties are not paid that 
     could otherwise be invested in sustainable forest management 
     or economic development.
       There are several relevant multilateral and international 
     agreements intended to address illegal logging and the 
     illegal timber trade, ranging from voluntary to legally 
     binding multilateral agreements that enable signatory 
     governments to seize illegal products. Yet, despite these 
     many efforts, the problems of illegal logging continue to 
     persist, driven by the demand for products that are developed 
     from illegally harvested wood and the lack of adequate 
     regulatory mechanisms in both exporting and consumer 
     countries.
       According to the Department of Justice there is no legal 
     mechanism that currently exists in U.S. law to preclude the 
     importation of wood and wood products known to be illegally 
     harvested in other countries. Currently under the Lacey Act, 
     it is unlawful for any person to: (1) import, export, sell, 
     acquire, or purchase any fish, wildlife or plants taken, 
     possessed, transported, or sold in violation of U.S. law or 
     regulation or in violation of any Indian tribal law; or (2) 
     to import, export, sell, receive, acquire, or purchase in 
     interstate or foreign commerce any fish or wildlife, taken, 
     possessed, transported, or sold in violation of State or 
     foreign law or any plant taken, possessed, transported or 
     sold in violation of any State law. There are misdemeanor 
     felony criminal and civil penalties for violations of the 
     Act, and strict liability is established for forfeiture of 
     illegal fish, wildlife or plants.
       Current law applies to all fish and wildlife and their 
     parts, but is much narrower in its application of plants. The 
     Lacey Act currently only applies to species of plants that 
     are native to the United States and that are specifically 
     protected either under State law or the Convention on 
     International Trade in Endangered Species of Wild Fauna and 
     Flora. It currently does not apply to plants that are 
     protected under foreign laws.
       Because the Lacey Act does not extend to plants that are 
     taken, transported, or sold in violation of foreign laws, the 
     U.S. government is not able to use the criminal and civil 
     penalties of the Act to preclude the importation of wood and 
     wood products or other plants and plant products harvested in 
     violation of the laws of foreign governments designed to 
     protect such plants, or to seize such illegally harvested 
     plants and products when they enter the United States. 
     According to Justice Department enforcement officials, 
     changes to the Lacey Act that would extend its coverage to 
     plants taken in violation of foreign laws would allow law 
     enforcement officers to initiate actions similar to those 
     they now use for fish and wildlife taken in violation of 
     foreign laws.
       Section 8204 of the Senate amendment amends the prohibited 
     acts section of the Lacey Act by making it unlawful to import 
     any plant or plant product taken in violation of foreign laws 
     related to the harvest, taking and protection of plants or 
     fees or taxes applicable to the plants.
       The Conference substitute amends the Senate amendment to 
     clarify the definition of the term ``plant.'' This definition 
     clarifies that ``wild'' members of the plant kingdom include 
     trees, whether they are naturally or artificially 
     regenerated. The inclusion of trees, whether in natural or 
     planted forest stands, is consistent with the longstanding 
     interpretation of the Lacey Act to cover wild species whether 
     the specimens are taken from the wild or captive bred.
       The exclusions to the term ``plant'' in section 2, 
     subsection (f)(2), of the Lacey Act are meant to maintain the 
     exclusions in current law with respect to cultivars and food 
     crops.
       The exclusion to the definition of ``plant'' in the new 
     subsection (f)(2)(C) of section 2 of the Lacey Act applies to 
     plants (as that term is defined in new subsection (f)(1)) 
     that are to remain planted or to be planted or replanted, and 
     should include related or preparatory uses such as grafting 
     or plant breeding. Thus, consistent with subsection (f)(1) of 
     the Act, any member of the plant kingdom, including roots, 
     seeds, germplasm, cuttings, parts, or products thereof, and 
     including trees from either natural or planted forest stands, 
     that is to remain planted or to be planted or replanted is 
     covered under the exclusion.
       The Conference substitute adds a new section 7(c) to the 
     Lacey Act which authorizes the Secretaries of Agriculture and 
     the Interior to promulgate regulations to define the terms 
     used in section 2(f)(2)(A). The Managers added this new 
     section to clarify the scope of what constitutes common 
     cultivars and common food crops. The Managers are aware that 
     some plant species produced in agricultural settings as 
     cultivars or for food, food supplements, or medicines, also 
     continue to be taken from the wild in volumes that threaten 
     the conservation of these species. For example, the Court in 
     United States v. McCullough, 891 F. Supp. 422 (N.D. Ohio 
     1995) read the current Lacey Act exclusion from the 
     definition of plant for ``common food crops and cultivars'' 
     as applying to American ginseng, a species that is 
     artificially produced but also threatened in the wild by 
     unsustainable exploitation. Therefore, the Managers added 
     section 7(c) to the Act to help clarify the terms of this 
     exclusion such that trade in cultivars and common food crops 
     is not unduly burdened, while wild plant species threatened 
     with extinction (which may also be artificially produced) are 
     adequately protected from illegal and unsustainable 
     exploitation.
       The Managers are aware that the exclusion to the definition 
     of ``plant'' in section 2, subsection (f)(2)(A), could 
     capture some commonly cultivated trees, grown on very short 
     rotation, in a farm or nursery and not in a forest stand, 
     that are harvested (as compared with those that are 
     replanted) but do not typically face problems with illegal 
     logging. Such trees could include conifers grown and 
     harvested for Christmas trees or trees not typically grown in 
     forest stands grown and harvested for floral arrangements. It 
     is the intention of the Managers to allow the Secretaries of 
     Agriculture and the Interior, through the promulgations of 
     regulations as provided in section 7(c), to clarify the 
     application of this Act and minimize the burden on growers of 
     Christmas trees and other flowering trees, for which the 
     Secretaries have determined there is little risk of illegal 
     harvesting.
       It is the Managers' intention that in developing any 
     regulations pursuant to this Act, the Secretaries of 
     Agriculture and the Interior minimize the cost and regulatory 
     burden placed on importers and consumers of plants and plant 
     products covered by this Act. The Managers note in particular 
     that the statutory language creating the requirement for a 
     plant declaration does not include, or reference any 
     authority to impose user fees to administer this provision. 
     The Managers intend that the administration of the plant 
     declaration requirement be carried out using appropriated 
     funds and urge caution on the part of the Administration in 
     seeking to interpret other laws to enable the taxation of 
     importers of plants and plant products for this purpose. 
     Additionally, the Managers urge the Secretaries of 
     Agriculture and the Interior to develop a system to allow 
     electronic filing of plant declarations required under this 
     Act.
       It is the Managers' intention that with regards to 
     ``plants,'' in this Act, the term ``Secretary,'' as clarified 
     in paragraph (a), subparagraph (2), means primarily the 
     Secretary of Agriculture. The addition of the term ``also'' 
     is meant to ensure that the Secretary of Agriculture consults 
     with the Secretary of the Interior and the Secretary of 
     Commerce in the implementation of this Act. This modification 
     should not be interpreted to remove the Secretary of 
     Agriculture as the lead authority with respect to plants. 
     (Section 8204)
     (28) Green Mountain land exchange/sale
       The Senate amendment authorizes the Secretary to sell or 
     exchange a few specific parcels in the Green Mountain 
     National Forest designated on the map entitled ``Proposed 
     Bromley Land Sale or Exchange'' dated April 7, 2004. Funds 
     from the sale of this land are to be used to relocate small 
     portions of the Appalachian Trail or purchase additional land 
     within the boundary of the Green Mountain National Forest. 
     (Section 8205)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 8303)
     (29) Timber contracts
       The Senate amendment authorizes the Secretary to cancel or 
     re-determine rates of

[[Page H3643]]

     qualifying timber contracts if the rate at which a qualifying 
     contract would be advertised on the date of enactment of this 
     language is at least 50 percent less than the original 
     purchased rate of the contract. The Secretary is also 
     authorized to substitute the Producer Price Index for other 
     authorized producer price indexes for a qualifying contract. 
     The Secretary is authorized to extend re-determined contracts 
     by one year. The provision is to have the effect of 
     surrendering any claim by the United States against any 
     timber purchaser that arose under a qualifying timber 
     contract before the date of enactment of the provision. 
     (Section 8301)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to allow the Secretary to adjust the terms of 
     certain hardwood lumber contracts, if the Secretary does not 
     substitute the Producer Price Index. The Secretary is also 
     allowed to apply market-related contract term additions, 
     consistent with regulations, to contracts awarded before 
     January 1, 2007. (Section 8401)
       The Managers appreciate the efforts of the Forest Service 
     to provide certain contractual relief to timber sale 
     purchasers within their legal abilities under the timber sale 
     contract and through existing regulations during these times 
     of difficult markets. In that context, the provisions within 
     this section provide additional help to timber sale 
     purchasers. The Forest Service is encouraged to implement 
     this section as quickly as possible. Because the provision in 
     paragraph (c) is limited in scope, i.e. contracts awarded 
     prior to January 1, 2007, the Managers encourage the Forest 
     Service to revise the existing regulations within 90 days of 
     enactment of this Act to reflect provisions of this section 
     for future market problems. The Forest Service should modify 
     existing contracts upon the request of the purchaser to 
     include these revised regulations so that purchasers will not 
     have similar problems with Market Related Contract Term 
     Adjustments in the future.
     (30) Land conveyances, New Mexico and Virginia
       The Senate amendment authorizes the conveyance, without 
     consideration, of certain lands in New Mexico, to the 
     Chihuahuan Desert Nature Park. (Section 11075)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to authorize the conveyance, without 
     consideration, of certain lands in the George Washington 
     National Forest. (Section 8302)

                            TITLE IX--ENERGY

     (1) Table of contents
       The House bill provides a table of contents. (Section 9001)
       The Senate amendment provides a substitute amendment to 
     title IX of FSRIA of 2002. The amendment makes the new 
     section 9001 the definitions section and includes definitions 
     for: Administrator, Advisory Committee, advanced biofuel, 
     biobased product, biofuel, biomass conversion facility, 
     biorefinery, board, Indian Tribe, Institute of Higher 
     Education, intermediate ingredient or feedstock, renewable 
     biomass, renewable energy, rural area and Secretary. (Section 
     9001)
       The Conference substitute adopts the Senate approach of 
     amending title IX of the FSRIA of 2002 and accepts the Senate 
     definitions with amendments. (Section 9001, new section 9001 
     of FSRIA)
       The Managers intend that the term ``advanced biofuel'' 
     includes home heating fuels and aviation and jet fuels made 
     from cellulosic biomass.
     (2) Federal procurement of biobased products
       The House bill clarifies that products with at least 5 
     percent of intermediate ingredients and feedstocks, that are 
     biobased, should be considered for a procurement preference. 
     (Section 9002(a))
       The Senate amendment changes the name of this section to 
     Biobased Markets Program and clarifies that products to be 
     considered for procurement preference should be composed of 
     at least 5 percent of biobased intermediate ingredients and 
     feedstocks, or a lesser percentage that the Secretary 
     determines to be appropriate. (Section 9001)
       The Conference substitute deletes both of these provisions.
     (3) Designation and information provided
       The Senate amendment provides for designation of items for 
     which there is only one product or manufacturer in the 
     category and automatic designation of items composed of at 
     least 50 percent biobased intermediate ingredients or 
     feedstocks. It also specifies that information provided for a 
     biobased intermediate ingredient or feedstock shall be 
     considered to be provided for an item composed of that 
     ingredient or feedstock. This subsection also specifies that 
     the Secretary may not require more information from 
     manufacturers or vendors of biobased products than is 
     required from other vendors or manufacturers. (Section 9001)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     amendments. (Section 9001, new Section 9002 of FSRIA)
       The Managers recognize that USDA and its contractors have 
     developed considerable capabilities in the designation of 
     biobased products and have established an extensive network 
     of biobased industry contacts. The Managers encourage USDA to 
     continue to utilize those capabilities and resources in 
     carrying out the biobased products procurement and labeling 
     programs.
     (4) State procurement models
       The Senate amendment directs the Secretary to offer models 
     for States for procurement of biobased products within 180 
     days of enactment. (Section 9001)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision. The 
     Managers encourage the Secretary to make models for the 
     procurement of biobased products available to States upon 
     request.
     (5) Procurement guideline considerations
       The House bill clarifies that the Secretary should consider 
     life cycle costs only to the extent that information on life 
     cycle costs is appropriate and available. (Section 9002(b))
       The Senate amendment contains no comparable provision.
       The Conference substitute deletes the House provision.
     (6) Labeling requirement and revised deadline
       The House bill requires the Secretary to issue new 
     regulations for the program within 90 days of enactment with 
     criteria for finished products and intermediate ingredients 
     and feedstocks. It also requires the Secretary to consult 
     with other Federal agencies and non-governmental groups with 
     an interest in biobased products, including small and large 
     producers of biobased materials and products, industry, trade 
     organizations, academia, consumer organizations, and 
     environmental organizations. (Section 9002(c))
       The Senate amendment is the same as the House bill, except 
     consultation is with the Administrator and representatives 
     from small and large businesses, academia, other Federal 
     agencies and such other persons as the Secretary considers 
     appropriate. (Section 9001)
       The Conference substitute adopts the Senate provision. 
     (Section 9001, new Section 9002 of FSRIA)
     (7) Biobased Markets Program--Establishment
       The Senate amendment establishes a voluntary program under 
     which the Secretary is directed to recognize agencies, 
     contractors and persons that use significant amounts of 
     biobased products. (Section 9002(b)(4))
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 9001, new Section 9002 of FSRIA)
     (8) Biobased Markets Program--Applicability
       The Senate amendment requires that Capitol Complex 
     procurement shall comply with the biobased product mandate 
     within 90 days of enactment. The Senate amendment also 
     requires the secretary to sponsor or support a biobased 
     products showcase annually. (Section 9001)
       The House bill contains no comparable provision.
       The Conference substitute does not require that the Capitol 
     Complex procurement comply with the biobased product mandate, 
     but encourages the Capitol procurement agencies to consider 
     products designated under this program when making their 
     procurement decisions. (Section 9001, new Section 9002 of 
     FSRIA)
       The Managers also encourage the Secretary to continue 
     outreach activities to the applicable agencies that may 
     include an annual showcase of biobased products to meet the 
     requirements of this section.
     (9) Biobased Markets Program--Testing centers
       The Senate amendment permits the Secretary to establish one 
     or more national testing centers for biobased products, 
     giving preference to entities with established biobased 
     testing capabilities. (Section 9001)
       The House bill contains no comparable provision.
       The Conference substitute directs the Secretary to create a 
     national registry of biobased product testing centers. 
     (Section 9001 new Section 9002 of FSRIA)
       The Managers intend that the registry should include 
     entities with expertise in performance testing, verifying 
     conformance with long-term performance standards, 
     establishing biobased contents, evaluating uniformity of 
     product quality, and other biobased product characteristics 
     that producers may require. The Managers believe that the 
     University of Northern Iowa is an example of an appropriate 
     entity for listing in the national registry because of its 
     biobased product testing activities.
     (10) Biobased Markets Program--Education and awareness
       The Senate amendment establishes a new Education and 
     Awareness campaign for bioenergy (other than biodiesel) and 
     biobased products, which is to be carried out through 
     competitive grants to eligible entities. (Section 9001)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (11) Authorization of appropriations; Federal procurement
       The House bill caps the currently unlimited authorization 
     at $1,000,000 annually for 2008-13 to implement the section 
     (other than the labeling provisions). (Section 9002(d))
       The Senate amendment provides for mandatory funding of 
     $3,000,000 annually for 2008

[[Page H3644]]

     through 2012 to carry out mandatory testing and implement the 
     bioenergy education and awareness campaign. Any additional 
     sums, as necessary, are authorized. (Section 9001)
       The Conference substitute provides for mandatory funding 
     $1,000,000 in fiscal year 2008 and $2,000,000 annually for 
     2009 through 2012 to carry out mandatory testing and 
     labeling. The Conference substitute authorizes an additional 
     $2,000,000 per year for fiscal year 2009 through fiscal year 
     2012. (Section 9001, new Section 9002 of FSRIA)
     (12) Authorization of appropriations--Labeling
       The House bill authorizes $1,000,000 annually for 2008-2013 
     for labeling. (Section 9001)
       The Senate bill contains no comparable provision.
       The Conference substitute deletes the House provision.
     (13) Report requirements--Report by agencies to administrator 
         for Federal procurement policy
       The House bill requires procurement agencies to assist the 
     Administrator for Federal Procurement by submitting annual 
     reports and requires the Secretary of Agriculture to submit a 
     report to Congress on implementation 6 months after enactment 
     and annually thereafter. (Section 9002 (e))
       The Senate amendment provides that the Office of Federal 
     Procurement Policy submit a report to Congress every 2 years 
     describing implementation progress, including information 
     provided by the Agencies with specific data related to the 
     biobased procurement requirement. It requires the Secretary 
     to report to Congress on program implementation within 180 
     days and each year thereafter. (Section 9001)
       The Conference substitute adopts the Senate provision with 
     amendments. The substitute requires a report on program 
     implementation progress and program details once every 2 
     years, and deletes the requirement to report to Congress 
     after the first 180 days. (Section 9001, new Section 9002 of 
     FSRIA)
     (14) Grants and loan guarantees for biorefineries and biofuel 
         production plants.
       The House bill provides for loan guarantees to help pay for 
     development and construction of biorefineries and biofuel 
     production plants and retrofitting of other facilities to 
     demonstrate the commercial viability of converting biomass to 
     fuels or chemicals. (Section 9003(3))
       The Senate amendment renamed this section as the 
     Biorefinery and Repowering Assistance Program. It establishes 
     grants for pilot or demonstration scale biorefineries, for 
     repowering projects, and for repowering feasibility studies. 
     It establishes loan guarantees for commercial scale 
     biorefineries and repowering projects. Biorefineries are 
     limited to advanced biofuels production. Repowering projects 
     replace fossil fuel energy systems with renewable energy 
     systems for biorefineries (including corn ethanol plants), 
     power plants, or manufacturing facilities. (Section 9001)
       The Conference substitutes a provision entitled 
     ``Biorefinery Assistance,'' which provides for grants and 
     loan guarantees for construction and retrofitting of 
     biorefineries for the production of advanced biofuels. The 
     substitute provides for grants for constructing 
     demonstration-scale biorefineries, and loan guarantees for 
     the development and construction of commercial-scale 
     biorefineries that use technologies that are either pre-
     commercial or commercially available. (Section 9001, new 
     section 9003 of FSRIA)
       The Managers believe that it is in the nation's interest to 
     accelerate the commercialization of the production of 
     advanced biofuels. The Managers also are aware that several 
     commercial biorefinery projects are at the advanced planning 
     stages and are ready for construction as soon as loan 
     guarantees can become available through this program.
       Therefore, the Managers expect the Secretary to implement 
     this program as soon as possible in fiscal year 2009. The 
     Managers have provided specific funding for this program for 
     fiscal year 2009 to emphasize the need to implement this 
     program as soon as possible. To enable expedited 
     implementation of this program, the Managers expect that the 
     Secretary consider issuing a Notice of Funds Availability 
     (NOFA) to initiate the program as was done in the case of the 
     section 9006 grants program after passage of the Farm 
     Security and Rural Investment Act of 2002. The Managers 
     expect that the NOFA will comply with, and be consistent with 
     the spirit of, the provisions contained in section 9003 of 
     this Act. At the same time of the release of the NOFA, the 
     Managers expect the Secretary will issue an Advanced Notice 
     of Proposed Rulemaking (ANPR) to offer the public an 
     opportunity to provide comments regarding the development of 
     an Interim Rule for this program. Specifically, the Managers 
     expect the ANPR will solicit comments with respect to 
     critical issues regarding the implementation of section 9003, 
     such as whether the program loan guarantee will cover 
     construction of the facility or be limited to post 
     construction financing. It is expected that comments received 
     will be included in the record of subsequent rulemaking 
     regarding this program and will be considered by the 
     Secretary during the development of such regulations. To 
     further facilitate the rapid implementation of this program, 
     the Managers expect that the Secretary consider using the 
     processes and aspects developed for existing USDA loan 
     guarantee programs including the Business and Industry 
     Program and the Rural Energy for America Program (including 
     its predecessor the section 9006 program), in the initial 
     development of this program, especially if the Secretary 
     intends to initiate implementation through the use of a NOFA.
       To ensure that proposals that are not yet in their final 
     development stage can be considered, the Managers expect the 
     Secretary to reserve funds for the second half of each fiscal 
     year and reserve a portion of funds to be made available over 
     the life of the Farm Bill.
       The Managers also expect the Secretary to take steps to 
     evaluate the credit worthiness and the technical merit of 
     proposals to make decisions regarding the responsible use of 
     funds.
       It is the intent of the Managers that the Secretary use the 
     approach for defining pre-commercial and commercially 
     available technologies that were adopted in the regulations 
     for Section 9006 of the Farm Security and Rural Investment 
     Act of 2002 (7 U.S.C. 8106) prior to the date of enactment of 
     this Act.
       It is the intent of the Managers that, to the maximum 
     extent practicable, preference be given to applicants seeking 
     assistance for development and construction of biorefineries 
     planning to convert cellulosic biomass feedstocks into 
     advanced biofuels. It is also the intent of the Managers that 
     for the purpose of ranking applications under the Biorefinery 
     Program, the level of financial participation by the 
     applicant from non-federal sources could include direct 
     financial support, technical support, and contributions of 
     in-kind resources, including such kinds of support from state 
     governments.
       The Managers expect that demonstration or pilot-scale 
     facilities will demonstrate the potential of a technology for 
     commercial application at a biorefinery, including 
     operational characteristics such as throughput rates and 
     process yields.
       It is the intent of the Managers that the Secretary use the 
     approach for defining pre-commercial and commercially 
     available technologies that were adopted in the regulations 
     for Section 9006 of the Farm Security and Rural Investment 
     Act of 2002 (7 U.S.C. 8106) prior to the date of enactment of 
     this Act.
       The Managers understand that over the life of this Act, it 
     is likely that mandatory funding provided for loan guarantees 
     will be awarded to commercial projects that are first-of-a-
     kind. This may include the commercial application of a 
     technology that is: expanded to new regions, modified to 
     utilize different feedstocks, or substantially improved such 
     that it represents a significant technological risk.
       It is the intent of the Managers that existing facilities 
     including wood products facilities and sugar mills seeking to 
     retrofit the facility with technologies to produce advanced 
     biofuels be eligible for assistance under this section.
       The Conference substitute establishes a new section to 
     support the repowering of existing biorefineries by making 
     payments for the installation of new systems that use 
     renewable biomass or for the new production of energy from 
     renewable biomass. (Section 9001, new section 9004 of FSRIA)
       It is the intent of the Managers that this repowering 
     program should focus on biorefineries whose primary product 
     is liquid transportation biofuels. The Managers encourage the 
     Secretary to consider providing payments over time to help to 
     ensure that repowering projects are operated as intended and 
     produce the reduction in fossil fuels projected. The Managers 
     also intend that new energy production need not come from a 
     new energy system in order to be eligible for new production 
     payments. The Managers also intend that no support should be 
     given for installation or operation of repowering 
     facilities that use feed grains that receive Title I 
     payments, such as corn, as their energy source.
     (15) Grants--Limitations
       The Senate amendment provides for grants for pilot or 
     demonstration scale biorefineries limited to 50 percent of 
     project costs, grants for repowering projects limited to 20 
     percent of project costs and grants for repowering 
     feasibility studies limited to the lesser of 50 percent of 
     study costs and $150,000. (Section 9001)
       The House bill contains no comparable provision.
       The Conference substitute authorizes grants for pilot or 
     demonstration scale biorefineries for up to 30 percent of 
     project costs. (Section 9001, new section 9003 of FSRIA)
     (16) Loan guarantees--Limitations
       The House bill requires that loan guarantees not exceed 90 
     percent of the principal and interest due on the loan. It 
     provides that the total amount of principal and interest 
     guaranteed may not exceed $1,000,000,000 for relatively small 
     plants (up to $100,000,000) and may not exceed $1,000,000,000 
     for larger plants ($100,000,000--$250,000,000). The Secretary 
     determines the maximum loan term. (Section 9003(3))
       The Senate amendment authorizes the Secretary to guarantee 
     up to 100 percent of the principal and interest on such 
     loans. The principal amount of a loan guaranteed for 
     commercial biorefineries is limited to $250,000,000. The 
     principal amount of a loan guaranteed for repowering projects 
     is limited to $70,000,000. A loan guaranteed for a commercial 
     biorefinery or repowering a biomass conversion facility shall 
     not exceed 80 percent of project costs. (Section 9001)
       The Conference substitute limits guarantees to 90 percent 
     of the principal and interest on loans. The maximum principal

[[Page H3645]]

     amount of a loan guaranteed may not exceed $250,000,000 or 80 
     percent of project costs. The substitute requires that the 
     amount of the loan guaranteed by the Department be reduced by 
     the amount of other direct Federal funding going toward the 
     project. (Section 9001, new section 9003 of FSRIA)
     (17) Loan guarantees (and grants)--Priority
       The House bill provides selection criteria for loans which 
     follow those for the existing grants program in section 9003 
     of FSRIA. Two new selection criteria are added to address the 
     level of local ownership and the impact on other users of 
     feedstocks. (Section 9003(4))
       The Senate amendment's selection criteria for grants follow 
     those for the existing grant program in Section 9003 of 
     FSRIA. One new selection criterion is added: whether the 
     distribution of funds would have minimal impact on existing 
     manufacturing and other facilities that use similar 
     feedstocks. Selection criteria for grants for repowering 
     projects include the change in energy efficiency, the 
     reduction in fossil fuel use, and the volume of biomass 
     feedstock within a proximity to make local sourcing 
     economically practicable. Preference for grants and loan 
     guarantees is to be given to projects that receive financial 
     support from the State in which they are located and priority 
     is given to projects with significant local ownership. 
     (Section 9001)
       The Conference substitute requires a feasibility study 
     conducted by a third party be submitted as part of any 
     application. Ranking criteria for grants include: the 
     potential market for the biofuel and by-products; the level 
     of financial participation by the applicant including other 
     non-Federal and private sources; whether the applicant is 
     proposing to use a feedstock not previously used in advanced 
     biofuel production; whether the applicant is proposing to 
     work with producer associations or cooperatives; whether the 
     process will have a positive impact on resource conservation, 
     public health and the environment; the potential for rural 
     economic development; whether the area where the proposed 
     facility will be located has other similar facilities; 
     whether the project can be replicated; and the scalability of 
     the proposed technology to commercial production.
       Ranking criteria for the loan guarantees include the same 
     criteria as for the grants, with several changes and 
     additions, including: whether the applicant has an 
     established market for the biofuels and by-products; whether 
     the applicant can establish that, if adopted, the biofuels 
     production technology proposed in the application will not 
     have any significant negative impacts on existing 
     manufacturing and other facilities that use similar 
     feedstocks; and the level of local ownership proposed in the 
     application. The scalability of the project is not included 
     in the loan guarantee criteria. (Section 9001, new section 
     9003 of FSRIA)
       In considering the level of financial participation by the 
     applicant from non-federal sources, it is the intent of the 
     Managers that such support could include direct financial 
     support, technical support, and contributions of in-kind 
     resources, including such kinds of support from state 
     governments.
     (18) Loan guarantees (and grants) condition of assistance
       The House bill requires prevailing wages for workers on 
     projects financed under the section. (Section 9003(5))
       The Senate bill contains no comparable provision.
       The Conference substitute adopts the House provision. 
     (Section 9001, new section 9003 of FSRIA)
     (19) Requirement for commitment
       The Senate amendment states conditions for assistance in 
     the form of a loan guarantee include a binding commitment to 
     cover at least 20 percent of project costs from non-Federal 
     funds, demonstration of technology readiness, and 
     demonstration that investment opportunities have been offered 
     to local investors. (Section 9001)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (20) Loan guarantees (and grants) funding
       The House bill extends the grant program in section 9003 of 
     FSRIA through fiscal year 2012 and specifies mandatory 
     funding levels for loan guarantees that total $800,000,000 
     over the period fiscal year 2008 through fiscal year 2012. 
     (Section 9003 (6)(7))
       The Senate amendment provides mandatory funding of 
     $300,000,000 for fiscal year 2008 to remain available until 
     expended. (Section 9001)
       The Conference substitute provides mandatory funding of 
     $75,000,000 for fiscal year 2009 to remain available until 
     expended and $245,000,000 for fiscal year 2010 to remain 
     available until expended for loan guarantees. It also 
     authorizes $150,000,000 annually for fiscal year 2009 through 
     fiscal year 2012. (Section 9001, new section 9003 of FSRIA)
     (21) Energy audit and renewable energy development program
       The House bill extends the energy audit and renewable 
     energy development program through 2012. (Section 9004)
       The Senate amendment folds the energy audit program into 
     the new REAP program. (Section 9001)
       The Conference substitute adopts the Senate provision with 
     amendments as presented below. (Section 9001, new Section 
     9007 of FSRIA)
     (22) Rural Energy for America Program--Name
       The House bill renames program under section 9006 the 
     ``Rural Energy for America Program.'' (Section 9005(2)(3))
       The Senate amendment is the same as the House bill, except 
     that section 9006 is renumbered to become section 9007. 
     (Section 9001)
       The Conference substitute adopts the House provision. 
     (Section 9001, new Section 9007 of FSRIA)
     (23) Rural Energy for America Program--Eligible 
         participants--Grants, loans and loan guarantees
       The House bill expands program eligibility, which currently 
     extends to farmers, ranchers, and rural small businesses, to 
     also include ``other agricultural producers''. (Section 
     9005(2)(3))
       The Senate amendment provides for grants or loan guarantees 
     for renewable energy systems and energy efficiency 
     improvements for agricultural producers and rural small 
     businesses. The Senate amendment excludes direct loans. 
     (Section 9001)
       The Conference substitute adopts the Senate provision. 
     (Section 9001, new Section 9007 of FSRIA)
     (24) Rural Energy for America Program--Eligible 
         participants--Energy audit and renewable energy 
         development assistance
       The Senate amendment adds State agencies and public power 
     entities to eligible participants in the Energy Audit and 
     Renewable Energy Assistance Program. (Section 9001)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     amendments to make units of State, tribal, or local 
     governments eligible. (Section 9001, new section 9007 of 
     FSRIA)
       The Managers expect the definition for the term public 
     power entity used in this section to be the same as the 
     definition of state utility as defined in section 217(a)(4) 
     of the Federal Power Act (16 U.S.C. 824q(a)). The Committee 
     intends that in carrying out subsection 9007(b), the 
     Secretary may conduct a merit review process through the 
     solicitation of input regarding applications from qualified 
     experts either individually or collectively.
     (25) Rural Energy for America Program--Eligible 
         participants--Energy from animal manure
       The Senate amendment specifies the following as eligible 
     participants: Agricultural producers; rural small businesses; 
     rural cooperatives; and other similar entities. (Section 
     9001)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision. It 
     is the intent of the Managers that the Rural Energy for 
     America Program continue to provide significant support for 
     projects that convert animal manure to energy, including both 
     on-farm and community projects.
     (26) Rural Energy for America Program--Eligible activities--
         Grants, loans and loan guarantees
       The House bill expands to include sale of electricity 
     generated by new renewable energy systems. (Section 9005(2))
       The Senate amendment adds production-based incentives for 
     renewable energy to eligible activities, eliminates direct 
     loans and renewable energy systems. (Section 9001)
       The Conference substitute deletes both provisions.
     (27) Rural Energy for America Program--Eligible activities--
         Energy from animal manure
       The Senate amendment provides for grants and loan 
     guarantees for facilities to convert animal manure to energy, 
     including associated feedstock gathering systems and gas 
     pipelines, as well as first-year operating costs. For new 
     technologies, the first 2 years of operation are eligible. 
     This section also directs extension of the Energy Star 
     program to address equipment and facilities for the 
     agricultural sector. (Section 9001)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
       The Managers encourage the Secretary to compile and submit 
     a list of equipment commonly used by agricultural producers 
     to the Environmental Protection Agency and the Department of 
     Energy for consideration in the existing Energy Star program.
     (28) Rural Energy for America Program--Criteria and 
         preferences--grants, loans and loan guarantees
       The award considerations in the Senate amendment for energy 
     efficiency improvements and renewable energy systems (section 
     9007(c)(2)) include: The type of renewable energy system; 
     estimated quantity of renewable energy to be produced; 
     expected environmental benefits; quantity of energy savings 
     expected; expected energy savings payback time; and expected 
     system's energy efficiency. Preferences for grants and loan 
     guarantees under section 9007 are to be given to projects 
     that receive financial support from the state in which they 
     are located. (Section 9001)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate award 
     considerations, but deletes the Senate provision that gives 
     preference to projects receiving state funds. (Section 9001, 
     new Section 9007 of FSRIA)

[[Page H3646]]

       The Managers encourage the Secretary to continue funding 
     animal manure digester projects. The Managers believe these 
     projects have and will continue to be an important tool to 
     produce renewable energy in rural areas, create value for 
     agricultural producers, and address environmental concerns 
     surrounding manure management.
       It is the Managers' intent that funding under this section 
     may be used for the construction of infrastructure for 
     collection and transportation of feedstocks and biogas for 
     manure digesters, including community digesters. The Managers 
     also intend that bioenergy production and utilization 
     projects that also produce useful byproducts, such as 
     fertilizer or biochar to be used as a soil conditioner, are 
     eligible for support under the Rural Energy for America 
     program.
       The Managers encourage the Secretary to use the references 
     to energy efficiency and renewable energy sources in this 
     section to include geothermal heat pump systems using ground 
     loops and that small hydroelectric systems (as determined by 
     the Secretary) be considered renewable energy systems for the 
     purpose of receiving financial assistance under this program.
     (29) Rural Energy for America Program--Criteria and 
         preferences--energy from animal manure
       The Senate amendment states selection considerations for 
     energy from animal manure projects include quality of energy 
     produced, net energy conversion efficiency, environmental 
     issues, net impact on greenhouse gas emissions, diversity 
     factors, and proposed costs. (Section 9001)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (30) Rural Energy for America Program--Cost sharing
       The House bill increases the limit on the maximum amount of 
     the combined loan and grant from 50 percent to 75 percent of 
     the funded activity. It limits the maximum amount of loan 
     guaranteed to 75 percent of the funded activity and not more 
     than $25,000,000. (Section 9005(4))
       The Senate amendment states that for energy from animal 
     manure projects: Grants are limited to 50 percent of project 
     costs for smaller systems costing less than $500,000; for 
     larger projects, grants are limited to the greater of 
     $250,000 or 25 percent of project costs, with a cap of 
     $2,000,000; loan guarantees are limited to loans not 
     exceeding $25,000,000 and 80 percent of developer's project 
     costs. (Section 9001)
       The Conference substitute adopts the House provision. 
     (Section 9001, new section 9007 of FSRIA)
     (31) Rural Energy for America Program--Feasibility studies
       The House bill allows the Secretary to use up to 10 percent 
     of funds available under the section to provide assistance to 
     eligible participants to conduct feasibility studies for 
     eligible projects, but provides that if such assistance is 
     provided, the participant is ineligible for assistance under 
     other laws for such assistance. (Section 9005(6))
       The Senate amendment is the same as the House provision. 
     (Section 9001)
       The Conference substitute adopts the House provision. 
     (Section 9001, new section 9007 of FSRIA)
     (32) Rural Energy for America Program--Reserve
       The House bill reserves 15 percent of funds for projects 
     costing $50,000 or less. (Section 9005(6))
       The Senate amendment directs the Secretary to develop a 
     streamlined process for projects seeking less than $20,000, 
     and it directs that not less than 20 percent of the funds for 
     this section be made available for such projects. (Section 
     9001)
       The Conference substitute sets aside not less than 20 
     percent of the funds for this section for grants of less than 
     $20,000, with any remaining funds reverting to the general 
     pool of funding on June 30 of each fiscal year. The 
     substitute directs the Secretary to perform outreach at the 
     State and local levels. This outreach should include local 
     Rural Development, Farm Service Agency, Natural Resources 
     Conservation Service and Extension offices. (Section 9001, 
     new Section 9007 of FSRIA)
     (33) Rural Energy for America Program--Funding
       The House bill reauthorizes the program and provides 
     mandatory funding of $50,000,000 in fiscal year 2008; 
     $75,000,000 in fiscal year 2009; $100,000,000 in fiscal year 
     2010; $125,000,000 in fiscal year 2011; and $150,000,000 in 
     fiscal year 2012. (Section 9005(7))
       The Senate amendment provides mandatory funding of 
     $230,000,000 in fiscal year 2008, to remain available until 
     expended, for audits, loan guarantees and grants for energy 
     efficiency improvements and renewable energy systems and loan 
     guarantees and grants for animal manure facilities. It 
     specifies that not less than 5 percent of the funding is to 
     be used for Energy Audit and Renewable Energy Development 
     Program and not less than 15 percent is to be used for animal 
     manure facilities. It also authorizes additional funds as 
     necessary to carry out this section from fiscal year 2008 
     through fiscal year 2012. (Section 9001)
       The Conference substitute provides mandatory funding of 
     $50,000,000 in fiscal year 2009, $60,000,000 in fiscal year 
     2010, and $70,000,000 annually in fiscal year 2011 and fiscal 
     year 2012. It also specifies that 4 percent is to be used for 
     the Energy Audit and Renewable Energy Development Assistance 
     portion of the program. The Conference substitute authorizes 
     an additional $25,000,000 annually from fiscal year 2009 
     through fiscal year 2012. (Section 9001, new section 9007 of 
     FSRIA)
     (34) Biomass Research and Development Act of 2000
       The House bill modifies findings to include biodiesel. It 
     increases the number of individuals affiliated with an 
     environmental or conservation organization on the Advisory 
     Committee from 1 to 2. It adds an individual with expertise 
     in agronomy, crop science, or soil science to the Advisory 
     Committee. The provision includes language to improve dried 
     distillers grain quality and clarifies the role of commercial 
     applications in the objectives of the Biomass Research and 
     Development Initiative. It requires the Secretary to submit a 
     management plan to Congress every five years evaluating the 
     success of the Initiative. It also provides mandatory funding 
     of $35,000,000 for fiscal year 2008; $60,000,000 for fiscal 
     year 2009; $75,000,000 for fiscal year 2010; $100,000,000 for 
     fiscal year 2011; and $150,000,000 for fiscal year 2012. The 
     House bill does not change the current law provision that 
     authorizes an additional annual appropriation of $200,000,000 
     through fiscal year 2015. It amends technical study areas to 
     clarify that research areas include sugar processing and 
     refining plants and self-processing crops that express 
     enzymes capable of degrading cellulosic biomass. (Section 
     9006)
       The Senate amendment removes findings from the language. It 
     changes ``biobased fuel'' to ``biofuel'' and ``biomass'' to 
     ``renewable biomass'' for consistency across the Title. It 
     also adds an individual with expertise in plant biology and 
     biomass feedstock development. The provision adds language to 
     emphasize research on harvest, collection, transport and 
     storage of renewable biomass feedstocks. It removes specific 
     funding allocations to the different technical areas and 
     instead requires that at least 15 percent of funds go to each 
     technical area. The Senate language requires the Secretary to 
     submit a management plan to Congress every five years 
     evaluating the success of the Initiative. It provides 
     mandatory funding of $15,000,000 for fiscal year 2008; 
     $25,000,000 for fiscal year 2009; and $35,000,000 for fiscal 
     year 2010. The Senate amendment authorizes an additional 
     annual appropriation of $85,000,000 through fiscal year 2012. 
     (Section 9001)
       The Conference substitute moves the Initiative in statute 
     to Title IX of the FSRIA of 2002. It removes findings from 
     the language and changes ``biobased fuel'' to ``biofuel'' and 
     ``biomass'' to ``renewable biomass'' for consistency across 
     the Title. The substitute increases the number of individuals 
     affiliated with an environmental or conservation organization 
     on the Advisory Committee from 1 to 2, adds an individual 
     with expertise in plant biology and biomass feedstock 
     development and adds an individual with expertise in 
     agronomy, crop science, or soil science to the Advisory 
     Committee. The substitute reduces the number of technical 
     areas from 6 to 3 and streamlines considerations for grant 
     selection. The new technical areas include feedstock 
     development, biofuels and biobased products development, and 
     biofuels development analysis. At least 15 percent of the 
     available funding is required to be allocated to each of the 
     three technical areas. The substitute also increases the 
     minimum cost-share requirements for demonstration projects 
     from 20 percent to 50 percent and for research projects from 
     0 percent to 20 percent, with a provision that allows the 
     Secretary to waive the matching requirement for research if a 
     waiver is determined to be necessary and appropriate.
       The substitute provides mandatory funding of $20,000,000 in 
     fiscal year 2009, $28,000,000 in fiscal year 2010, 
     $30,000,000 in fiscal year 2011, and $40,000,000 in fiscal 
     year 2012. It authorizes $35,000,000 per year for fiscal year 
     2009 through fiscal year 2012. (Section 9001, new section 
     9008 of FSRIA)
       The substitute replaced language that was included in the 
     Energy Independence and Security Act of 2007 (P.L. 110-140) 
     (EISA) at amended Section 307(d) of the Biomass Research and 
     Development Act of 2000 (7 U.S.C. 8606(d)). In order to 
     ensure the sustainable production of biofuels, the Managers 
     want to clarify that intention of Sec. 9008(e)(3)(C)(ii) is 
     to improve and develop analytical tools to facilitate the 
     analysis of life-cycle energy and greenhouse gas emissions, 
     including emissions related to resource management, 
     associated with all potential biofuel feedstocks and 
     production processes.
       The Managers encourage the Board to consider funding 
     projects that address the critical need for integrated 
     research and technology development in the area of biofuels. 
     Funded projects should consider an integrated approach along 
     the full biofuels and biobased products value chain and 
     should serve as a platform for both technology transfer and 
     workforce development. The Managers recognize that the New 
     Century Farm project at Iowa State University specifically 
     includes integrated research and development activities 
     ranging from cropping practices and feedstock production, to 
     biomass harvest and handling, and including biorefinery 
     conversion processes. The Managers also are aware that 
     Pennsylvania State University is working on all aspects of 
     biofuels development from plant transformation to production, 
     harvest, and storage; and from biomass pretreatment to fuel 
     formulation and engine testing in collaboration with private 
     industry and the government. The Managers are aware that 
     Claflin

[[Page H3647]]

     University has been undertaking work in the area of biofuels 
     and biobutanol and hope they can continue that work. The 
     Managers recognize that these are viable models which can 
     provide invaluable feedback and systematic improvement to 
     development of a national biofuels infrastructure.
       The Managers recognize the tremendous potential market that 
     exists in this country for renewable aviation and jet fuel, 
     and acknowledges that while much research and development has 
     been directed toward the development of biofuels for ground 
     transportation, the development of renewable aviation fuels 
     has lagged far behind. For this reason, the Managers 
     encourage the Secretary of Agriculture and the Secretary of 
     Energy to give equal consideration to projects under this 
     initiative that would perform innovative and beneficial 
     research and commercial development of renewable aviation 
     fuels.
       The Managers are aware of the use of algae to create 
     biodiesel fuels, and believe this technology will contribute 
     to relieving the U.S. of its dependence on fossil fuels. The 
     Managers understand that algal-based oil yields are 2-3 times 
     that of the highest yielding land plants and that algae can 
     be cultured on land unfit for traditional commercial crops. 
     The Managers encourage the Department to support existing 
     algaculture laboratories that have the ability to develop 
     algal-based feedstocks for the biodiesel industry. The 
     Managers request the Department to report back within 90 
     days, or as soon as practicable on the status of this effort.
       The Managers hope that scientists and students at minority 
     serving institutions, such as the Nation's historically black 
     colleges and universities and Hispanic-serving institutions 
     will utilize this program and other research and development 
     programs in this title to continue the development of 
     biofuels and biobased products in all regions of the 
     country.
       The Managers also believe that this program plays a 
     critical role in bridging the funding gap that many promising 
     technologies face after university basic research is 
     completed and before becoming attractive to venture 
     capitalists and commercialized in the market. The Managers 
     believe that support between basic research and 
     commercialization is important for quickly bringing new 
     technologies to market, and the Managers urge the Secretary 
     to make sufficient funds available to address this issue.
       The Managers encourage consideration of collaborative 
     research on corn and cellulosic genomics to support improved 
     biofuels conversion processes.
       The Managers recognize the need for research and 
     development to convert forest biomass to advanced biofuels 
     and encourage USDA and DOE, in implementing the authorities 
     in this section, work in partnership with the Forest Service 
     to develop new techniques, technologies and methods toward 
     this goal. The Managers do not intend the additional 
     authority in section 9012 to preclude these activities under 
     this section.
     (35) Adjustments to the bioenergy program--Eligibility
       The House bill clarifies that the term ``bioenergy'' also 
     includes the production of heat and power at a biofuels 
     plant, biomass gasification, hydrogen made from cellulosic 
     commodities for fuel cells, and renewable diesel. The 
     provision excludes corn starch from the list of eligible 
     feedstock under the program. (Section 9007)
       The Senate amendment clarifies that this program is 
     intended to support increased production of advanced 
     biofuels, which includes fuels derived from renewable biomass 
     excluding those derived from corn starch. (Section 9001)
       The Conference substitute directs the Secretary to make 
     payments to producers of advanced biofuels to support a 
     stable and expanding production base. The payments are to be 
     based on the quantity and duration of production, the net 
     non-renewable energy content of the advanced biofuel, and 
     other factors as determined by the Secretary. (Section 9001, 
     new section 9005 of FSRIA)
       It is the intent of the Managers that the Secretary support 
     existing advanced biofuel production, as well as encourage 
     new production. The Managers recognize that, with respect to 
     forest biomass, the feedstock for the production of advanced 
     biofuels is often the same feedstock used by forest products 
     facilities, include pulp and paper mills. The Managers 
     encourage the Secretary to consider competing market outlets 
     when establishing the payment rate for such feedstocks.
     (36) Adjustments to the bioenergy program--Renewable diesel
       The House bill defines renewable diesel. (Section 9007)
       The Senate amendment contains no comparable provision.
       The Conference substitute deletes the House provision.
     (37) Adjustments to the bioenergy program--Payment rate and 
         priority
       The House bill provides for a priority based on factors 
     listed in section 9003(e)(2)(B) of FSRIA. (Section 9007(2))
       The Senate amendment directs the Secretary to base payments 
     on: level of production; price of feedstock; net nonrenewable 
     energy content; and other appropriate factors. It restricts 
     the payment to producers that do not receive the small 
     producer tax credits and to production from facilities with 
     capacity of less than 150,000,000 gallons per year. (Section 
     9001)
       The Conference substitute directs the Secretary to base 
     payments on the quantity and duration of production, the net 
     non-renewable energy content of the advanced biofuel, and 
     other appropriate factors as determined by the Secretary. 
     (Section 9001, new Section 9005 of FSRIA)
     (38) Adjustments to the bioenergy program--Project viability
       The House bill requires Secretary to review project 
     viability before renewing contracts. (Section 9007(2))
       The Senate amendment contains no comparable provision.
       The Conference substitute deletes the House provision.
     (39) Adjustments to the bioenergy program--Funding
       The House bill provides mandatory funds of $225,000,000 for 
     fiscal year 2008; $250,000,000 for fiscal year 2009; 
     $275,000,000 for fiscal year 2010; $300,000,000 for fiscal 
     year 2011; and $350,000,000 for fiscal year 2012. (Section 
     9007(3))
       The Senate amendment provides mandatory funds of 
     $245,000,000 for fiscal year 2008 to remain available until 
     expended. (Section 9001)
       The Conference substitute provides mandatory funding of 
     $55,000,000 in fiscal year 2009, $55,000,000 in fiscal year 
     2010, $85,000,000 in fiscal year 2011, and $105,000,000 in 
     fiscal year 2012. It authorizes $25,000,000 per year for 
     fiscal year 2009 through fiscal year 2012. It stipulates that 
     no more than 5 percent of each year's funding may be for 
     production at facilities with a total refining capacity 
     exceeding 150,000,000 gallons per year. (Section 9001)
     (40) Research, extension and educational programs on biobased 
         energy technologies and products
       The House bill extends current authorization for 
     appropriations at a level of $75,000,000 through 2012. It 
     provides a research focus for insular and Pacific areas. 
     (Section 9008)
       The Senate amendment provides for mandatory funding of 
     $5,000,000 for fiscal year 2008; and $10,000,000 for fiscal 
     year 2009 and fiscal year 2010 and provides for authorization 
     for appropriations at an annual level of $70,000,000 from 
     fiscal year 2008 through fiscal year 2012. It provides for a 
     ``subcenter'' at the University of Hawaii with a research 
     focus for insular and Pacific areas. (Section 9001)
       The Conference substitute adopts the Senate provision with 
     amendments and moves the provision in statute to the Research 
     Title of this Act. No mandatory funding is provided. The 
     Conference substitute authorizes $75,000,000 per year for 
     fiscal year 2008 through fiscal year 2010. (Section 7526)
     (41) Regional biomass crop experiments
       The Senate amendment establishes a program of regional 
     biomass crop experiments at 10 geographically dispersed and 
     competitively selected land-grant universities. Crop 
     experiments are to include all appropriate biomass species, 
     including perennials, annuals, and woody biomass species. 
     Selection criteria include crop experiment capabilities and 
     experience, species and cropping practices proposed, crop 
     experiment plan, and commitment of adequate acreage and 
     resources. The provision calls for coordination among 
     participants, with the Biomass Research and Development Board 
     and with the Sun Grant Centers, and the establishment of a 
     ``best practices'' database on all aspects of biomass crop 
     production. It provides mandatory funding of $40,000,000 over 
     the life of the bill, to be allocated as $1,000,000, 
     $2,000,000, and $1,000,000 per institution for years fiscal 
     year 2008, fiscal year 2009, and fiscal year 2010, 
     respectively. (Section 9001)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
       The Managers believe that the agricultural bioenergy 
     feedstock and energy efficiency research and extension 
     program included in section 7207 of the Research title will 
     accomplish the purposes of this section.
     (42) USDA Energy Council
       The House bill creates an Energy Council in the Office of 
     the Secretary at USDA to coordinate energy policy at the 
     Department and consult with other agencies. (The existing 
     Office of Energy Policy and New Uses will support the 
     activities of the Council.) (Section 9009)
       The Senate amendment directs the Secretary to assign 
     coordination of projects and information, liaison work with 
     other agencies and public outreach on USDA's energy programs 
     to one entity within the Department. (Section 9001)
       The Conference substitute deletes both provisions.
       It is the intent of the Managers that the Department should 
     implement the actions outlined in the Senate bill using 
     existing authorities. It is also the Managers' intent that a 
     single entity in the Department be responsible for 
     coordinating energy policy activities in the Department and 
     with other agencies.
     (43) Farm energy production pilot program
       The House bill establishes a pilot program to provide 
     grants to farmers for the purpose of demonstrating the 
     feasibility of making a farm energy neutral using existing 
     technologies. It authorizes $5,000,000 for fiscal years 2008 
     through 2012. (Section 9010)
       The Senate amendment contains no comparable provisions.
       The Conference substitute deletes the House provision.

[[Page H3648]]

       The Managers believe that the purposes of this Section can 
     be carried out through Section 7207 of the Research title.
     (44) Rural energy self-sufficiency initiative and rural 
         energy systems renewal
       The House bill authorizes the Secretary to make cost-share 
     grants to enable eligible rural communities to develop 
     renewable energy systems to increase their energy self-
     sufficiency. The provision authorizes appropriations of 
     $5,000,000 in fiscal year 2008 and such sums as necessary in 
     fiscal year 2009 through fiscal year 2012. (Section 9011)
       The Senate amendment: (1) establishes a program of 
     competitive cost-shared grants for rural communities to 
     assess their energy systems, and to formulate and implement 
     strategies for improvements; (2) specifies appropriate 
     activities; (3) requires a 50 percent cost share; (4) directs 
     the USDA in consultation with DOE to provide technical 
     assistance; and (5) authorizes $5,000,000 per year for fiscal 
     year 2008 through fiscal year 2012. (Section 9001)
       The Conference substitute authorizes $5,000,000 per year 
     for fiscal year 2009 through fiscal year 2012 for a program 
     of cost-shared grants to enable rural communities to assess 
     their energy usage, formulate strategies for improvements and 
     install and utilize integrated renewable energy systems. 
     (Section 9001, new Section 9009 of FSRIA)
       It is the intent of the Managers that energy assessments 
     will include total energy usage by all members and activities 
     of the community, including an assessment of energy used in 
     community facilities, energy for heating, cooling, lighting, 
     and energy for all other building and facility uses; energy 
     used in transportation by community members; current sources 
     and types of energy used; energy embedded in other materials 
     and products; and the major impacts of the energy usage, 
     including the impact on the quantity of oil imported, total 
     costs, the environment, and greenhouse gas emissions.
       Energy system improvement strategies are intended to reduce 
     conventional energy usage and greenhouse gas emissions by the 
     community through adoption or use of measures such as 
     building insulation, automatic controls on lighting and 
     electronics, zone energy usage, and building energy 
     conservation practices; transportation alternatives, vehicle 
     options, transit options, transportation conservation, and 
     walk- and bike-to-school programs; community configuration 
     alternatives to provide pedestrian access to regular 
     services; and community options for alternative energy 
     systems, including alternative fuels, photovoltaic 
     electricity, wind energy, geothermal heat pump systems, and 
     combined heat and power.
     (45) Agricultural biofuels from biomass internship pilot 
         program
       The House bill authorizes an internship program to 
     encourage students to pursue employment in renewable energy 
     related jobs. (Section 9012)
       The Senate amendment contains no comparable provision.
       The Conference substitute deletes the House provision.
     (46) Feedstock flexibility program for bioenergy producers.
       The House bill amends the energy title of FSRIA to require 
     the Secretary to purchase sugar to produce bioenergy if 
     necessary to avoid forfeitures of sugar to the Commodity 
     Credit Corporation, and to ensure that the sugar loan 
     program operates at no cost to the Federal government. 
     (Section 9012)
       The Senate amendment is the same as the House bill. 
     (Section 1501(f))
       The Conference substitute adopts the House provision with 
     amendments. (Section 9001, new Section 9010 of FSRIA)
       Since the Feedstock Flexibility Program is a new program 
     involving many interests, the Managers expect the program to 
     be implemented following a public notice and comment period, 
     providing an opportunity for all parties affected by the 
     program to have input into its operations.
     (47) Biomass inventory report
       The House bill requires the Secretary to conduct an 
     inventory of biomass resources on a county by county basis 
     and report to Congress within 1 year of enactment. (Section 
     9014)
       The Senate amendment requires the Secretary to conduct an 
     assessment of the growth potential for cellulosic material on 
     a state-by-state basis, and to report to Congress within 18 
     months. (Section 9001)
       The Conference substitute deletes both provisions.
       The Managers believe that adequate biomass resource 
     assessments are underway or planned. The Economic Research 
     Service (ERS) in the Department is working on a biomass 
     resource inventory and the Managers encourage the Secretary 
     to continue this important work.
     (48) Future farmsteads program
       The House bill establishes a program to advance farm energy 
     use efficiencies and on farm production of renewable 
     energies. (Section 9015)
       The Senate amendment is the same as the House bill. 
     (Section 9001)
       The Conference substitute deletes both provisions.
       The Managers believe that the agricultural bioenergy 
     feedstock and energy efficiency research and extension 
     program included in section 7207 of the Research title will 
     accomplish the purposes of this section.
     (49) Sense of Congress on renewable energy
       The House bill provides a sense of Congress on renewable 
     energy. (Section 9016)
       The Senate amendment contains no comparable provision.
       The Conference substitute deletes the House provision.
     (50) Biodiesel fuel education program
       The House bill doubles funding to $2,000,000 annually for 
     fiscal year 2008 through fiscal year 2012. (Section 9017)
       The Senate amendment is the same as the House bill except 
     it adds oil refiners, automotive companies and owners and 
     operators of watercraft fleets to the list of entities 
     targeted for education about biodiesel. (Section 9001)
       The Conference substitute adopts the House provision except 
     that it funds the program at $1,000,000 annually for fiscal 
     year 2008 through fiscal year 2012. (Section 9001, new 
     Section 9006)
     (51) Biomass energy reserve
       The House bill establishes a biomass energy reserve (BER) 
     and provides financial and technical assistance to landowners 
     and operators to produce energy crops and harvest, store, and 
     transport cellulosic material. BER project areas must be 
     within a 50 mile radius of an existing bioenergy facility.
       Under the House provision, BER eligible crop land must have 
     been tilled in the current or immediately preceding crop 
     year, and does not include Federal land, certain forest land, 
     or land enrolled in specified conservation programs (unless 
     biomass harvest occurs in accordance with a conservation plan 
     outside of nesting and rearing season, and payments under the 
     conservation program are reduced--subsection (h)). (Forest 
     land is covered in subsection (e), which provides $5,000,000 
     for grants to help owners develop plans for sustainable 
     management of biomass from forest land.)
       Groups of owners and operators, energy and agricultural 
     companies, and Agricultural Innovation Centers (AICs) are all 
     ``Eligible Applicants'' that may submit proposals for BER 
     project areas. AICs have a dual role in the program, and may 
     also serve as ``Qualified Organizations'', which assist other 
     Eligible Applicants in developing proposals for approval by 
     USDA.
       Under the House provision, the Secretary selects 10 
     qualified organizations across the country. Qualified 
     organizations, which may also be colleges and universities, 
     help eligible applicants structure projects that will advance 
     the goal of sustainable production of dedicated energy crops. 
     Specifically, a qualified organization will help eligible 
     applicants to identify suitable land and crop mixtures and 
     get a commitment from a bioenergy facility. Program crops and 
     invasive or noxious species are ineligible. Qualified 
     organizations then rate the various project area applications 
     according to a ranking system established by the Secretary, 
     based on criteria set out in subsection (d)(5). The Secretary 
     selects at least one project area in each of the 10 qualified 
     organizations, which are regionally dispersed.
       Under the House provision, the Secretary enters into 5-year 
     contracts with owners and operators (Eligible Participants) 
     in the BER project area. Such contracts must comply with 
     certain conservation requirements and provide for information 
     sharing. The Secretary makes Establishment Payments to 
     eligible participants to cover seeds, stock, and the cost of 
     planting, and annual Rental Payments in an amount to be 
     determined by the Secretary.
       Under the House provision, the Secretary may also provide 
     Matching Payments of not more than $45 per ton for 
     collecting, harvesting, storing, and transporting biomass. 
     (Matching Payments are at a rate of $1 for every $1 per ton 
     paid by the bioenergy facility for the biomass. The Secretary 
     must reduce Rental Payments if making a Matching Payment to 
     an eligible participant.) Forest land owners are eligible for 
     this Matching Payment if acting under a forest stewardship 
     plan. (Section 9018)
       The Senate amendment establishes a Biomass Crop Transition 
     Assistance Program (BCTAP) to provide transitional assistance 
     (including grants) for the establishment and production of 
     eligible crops to be used in the production of advanced 
     biofuels. The program includes assistance for the 
     harvesting, transportation and storage of renewable 
     biomass. Producers are not eligible to receive assistance 
     for the establishment and production of crops eligible to 
     receive benefits under Title I and that are invasive or 
     noxious. Eligible land is defined as private agriculture 
     or forest land planted or considered to be planted for at 
     least 4 of the 6 years preceding enactment.
       The Senate amendment provides that contract requirements 
     include adherence to conservation compliance and 
     implementation of a conservation plan approved by the local 
     soil conservation district. The conservation plans should 
     advance the goals and objectives of fish and wildlife 
     conservation plans and initiatives and comply with mandatory 
     environmental requirements for a producer under Federal, 
     State and local law.
       Eligible participants under the Senate amendment include 
     individual agricultural producers, forest land owners or 
     other individuals holding the right to collect or harvest the 
     crop. Farmer-owned cooperatives, agricultural trade 
     associations (or similar entitles on behalf of producer 
     members) may serve as aggregators and enter into contracts as 
     eligible participants. The Secretary is directed to provide 
     planning grants of up to $50,000 (with a required 100 percent 
     match) to

[[Page H3649]]

     assist in assessing the viability for, or assembling of, a 
     regional supply.
       Under the Senate amendment, the Secretary will enter into 
     contracts for perennial crops, covering the cost of 
     establishing the crop/s during the first year and each 
     subsequent year the Secretary will make an incentive payment 
     determined by the Secretary to encourage the participant to 
     produce renewable biomass. All participants in this Section 
     are required to keep records determined by the Secretary to 
     allow for best practices to be studied and shared.
       Assistance under the Senate amendment is restricted to 
     crops for use in the production of advanced biofuels, other 
     biobased products, heat or power from a biomass conversion 
     facility. Participants must have a letter of intent or proof 
     of financial commitment from a biomass conversion facility 
     and the production operation must be located in proximity of 
     a biomass conversion facility to make delivery to the 
     location economically practicable. Eligibility is also 
     conditioned on the impact on wildlife, air, soil and water 
     quality and availability and the local and regional economic 
     impacts/benefits.
       The Senate amendment allows the Secretary to provide 
     technical assistance and establishment cost-sharing for 
     eligible participants planting annual biomass crops. The crop 
     shall not be eligible for benefits under Title I and 
     assistance is conditioned on adherence to conservation 
     compliance requirements.
       The Senate amendment also creates a program that provides 
     fixed-rate payments to eligible participants for the 
     estimated cost of collection, harvest, storage and transport 
     of renewable biomass. It also provides for forest biomass 
     planning grants to help forest landowners sustainably harvest 
     woody biomass for heat, energy or biobased products for use 
     in a biomass conversion facility.
       The Senate amendment included $130,000,000 in mandatory 
     funding for fiscal year 2008, to remain available until 
     expended, for transition assistance for biomass crops. Of 
     this amount, no more than $5,000,000 was to be used for 
     biomass planning grants and no more than 5 percent expended 
     for forest biomass planning grants. The payments for 
     collection, harvest, storage and transportation were 
     appropriated mandatory funding of $10,000,000 per year for 
     each of fiscal year 2009, fiscal year 2010, and fiscal year 
     2011, to remain available until expended. (Section 9001)
       The Conference substitute establishes a Biomass Crop 
     Assistance Program (BCAP). Under this Section, the Secretary 
     will select BCAP project areas from applications consisting 
     of a group of producers willing to commit to biomass crop 
     production or a biomass conversion facility.
       Biomass crop producers within these BCAP project areas will 
     enter into contracts directly with the Secretary which will 
     enable producers to receive financial assistance for crop 
     establishment costs as well as annual payments to support 
     biomass production. Contracts include resource conservation 
     requirements.
       The Secretary is directed to reduce annual payments when 
     the biomass crops are sold to the conversion facility, used 
     for other allowed purposes or if the producer violates the 
     BCAP contract. This section also authorizes cost-sharing 
     support for biomass harvest, transport, storage, and delivery 
     to biomass user facilities, both within BCAP project areas 
     and elsewhere. The Conference substitute provides mandatory 
     funding of such sums as necessary to carry out this section 
     for each of fiscal year 2008 through fiscal year 2012. 
     (Section 9001, new Section 9011 of FSRIA)
       The Managers expect the Secretary to determine if a 
     producer is within an economically practicable distance from 
     a facility based on the expected cost of transporting a 
     feedstock to the facility. The Managers understand that this 
     distance may vary depending on several factors including the 
     density of the feedstock and the producer's plan for 
     preprocessing the biomass including chopping, pelletizing or 
     other techniques that make the biomass more easily 
     transportable.
       The Managers intend that nonindustrial private forestland 
     be included as ``eligible land'' in a BCAP area and also be 
     eligible for establishment and annual payments. Prior to 
     entering into a contract with an owner of nonindustrial 
     private forestland with existing tree cover, the Managers 
     encourage the Secretary to consider the most suitable use of 
     the land and encourage the maintenance of native forests and 
     late successional forest stands and discourage conversion of 
     native forests to non-forest use. The Managers understand 
     that woody biomass feedstocks may require varying management 
     practices including: establishment (natural or artificial 
     regeneration), site preparation, and management of competing 
     vegetation. The Managers recognize that in some cases, 
     biomass from forests established or enhanced under this 
     program may not be available for harvest within the timeframe 
     of the contract, but may provide a long-term source of 
     feedstock for a biomass conversion facility.
       It is the intent of the Managers that in determining the 
     amount of an annual payment, the Secretary shall consider the 
     costs of the activity being funded and the need for the 
     involved biomass conversion facility to bear some costs of 
     producing the feedstock.
       The Managers intend that the use of ``soil, water and 
     related resources'' under this section includes wildlife-
     related concerns.
       The Managers also intend that the primary focus of the BCAP 
     will b be promoting the cultivation of perennial bioenergy 
     crops and annual bioenergy crops that show exceptional 
     promise for producing highly energy-efficient bioenergy or 
     biofuels, that preserve natural resources, and that are not 
     primarily grown for food or animal feed. In making BCAP 
     project area selections, the Managers expect that the 
     Secretary will consider the economic viability of the 
     proposed biomass crop. The Managers do not intend that 
     BCAP contract acreage provide all the feedstock necessary 
     to supply a biomass conversion facility.
       It is the Managers' intent that if the establishment or 
     annual payment to a producer is reduced under this section, 
     that the Secretary may vary the amount of payment reduction 
     based on the reason for reducing the payment. It is also the 
     intent of the Managers that establishment and annual payments 
     are to be reduced by an appropriate amount in the case where 
     a portion of an eligible crop is not sold or intended to be 
     sold to the biomass conversion facility.
       The Managers direct the Secretary to provide a report to 
     Congress on how information gathered under this Section was 
     disseminated. The Managers urge the Secretary to utilize the 
     Best Practices database created in Section 7207 of this Act 
     and to utilize the expertise of institutions of higher 
     education and Agriculture Innovation Centers to collect such 
     information.
     (52) Forest biomass for energy
       The House bill requires the Secretary of Agriculture, 
     through the Forest Service, to conduct a competitive research 
     and development program to encourage use of forest biomass 
     for energy. The House bill provides $15,000,000 per year for 
     fiscal year 2008-2012 in mandatory funding. (Section 9019) 
     Note that there are 2 sections numbered 9019 in the House 
     bill.
       The Senate amendment is similar to the House bill but does 
     not provide mandatory funding for the program. (Section 9001)
       The Conference substitute adopts the House provision with 
     amendments. It authorizes $15,000,000 per year for fiscal 
     year 2009 through fiscal year 2012. (Section 9001, new 
     Section 9012 of FSRIA)
       As part of this program, the Managers encourage the 
     Secretary to work closely with the Pine Genome Initiative 
     (PGI), which would promote healthy forests and the 
     development of new biofuels technology.
     (53) Community wood energy program.
       The House bill provides grants for community wood energy 
     systems. (Section 9019) Note that there are 2 sections 
     numbered 9019 in the House bill.
       The Senate amendment is similar to the House provision. 
     (Section 9001)
       The Conference substitute adopts the Senate provision with 
     amendments. It authorizes $5,000,000 per year for fiscal year 
     2009 through fiscal year 2012. (Section 9001, new Section 
     9013)
     (54) Supplementing corn as an ethanol feedstock
       The House bill requires the Secretary of Agriculture to 
     establish a program to make grants of not to exceed 
     $1,000,000 each to no more than 20 universities for a 3-year 
     program of demonstration of supplementing corn as an ethanol 
     feedstock with sweet sorghum and switchgrass. (Section 9020)
       The Senate amendment contains no comparable provision.
       The Conference substitute deletes the House provision.
       The Managers believe that the agricultural bioenergy 
     feedstock and energy efficiency research and extension 
     program included in section 7207 of the Research title will 
     accomplish the purposes of this section.
     (55) New Century Farm Project
       The Senate amendment authorizes support for the development 
     and operation of an integrated and sustainable biomass, 
     feedstock, and biofuels production system to serve as a model 
     for a new century farm. It authorizes $15,000,000 for fiscal 
     year 2008 through fiscal year 2012, to remain available until 
     expended. (Section 9001)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
       The Managers believe that the agricultural bioenergy 
     feedstock and energy efficiency research and extension 
     program included in section 7207 of the Research title will 
     accomplish the purposes of this section.
     (56) Biochar research, development and demonstration
       The Senate amendment establishes a program of competitive 
     grants for research and demonstration of the production and 
     use of biochar in the agricultural sector. Activity areas 
     include biochar production and use, agronomic effects, 
     biochar characterization, soil carbon and greenhouse gas 
     emission effects, integration with renewable energy systems, 
     and economics. The provision authorizes $3,000,000 for each 
     year of fiscal year 2008 through fiscal year 2012. (Section 
     9001)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision. 
     Research on biochar production and use is included as a high-
     priority research and extension area in section 7203 of the 
     Research title.
     (57) Voluntary renewable biomass certification
       The Senate amendment establishes a voluntary certification 
     program for renewable biomass that is grown using sustainable 
     practices, in consultation with EPA. Standards are to be 
     designed to reduce greenhouse

[[Page H3650]]

     gases and improve soil carbon, protect wildlife habitat, and 
     protect air, soil, and water quality. (Section 9001)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (58) Biofuels infrastructure study
       The Senate amendment directs USDA, in collaboration with 
     the Secretaries of Energy and Transportation and the 
     Administrator of the Environmental Protection Agency, to 
     conduct a study of the infrastructure needs associated with a 
     significant expansion in biofuel production and use. The 
     amendment specifically includes dedicated ethanol pipeline 
     feasibility studies and examination of water resource 
     needs. The provision requires a report to Congress 
     including recommendations. It also authorizes $1,000,000 
     in each of fiscal year 2008 and fiscal year 2009. (Section 
     9001)
       The House bill contains no comparable provision.
       The Conference substitute directs USDA to jointly conduct a 
     study with DOE, DOT and EPA on the infrastructure needs 
     associated with significant expansion in biofuels production 
     and use. (Section 9002)
       It is the intent of the Managers that this study should 
     include an assessment of appropriate planning and development 
     timelines associated with infrastructure development. The 
     Managers suggest that the Biomass Research and Development 
     Board established under the Biomass Research and Development 
     Initiative may be an appropriate entity for coordination and 
     oversight of this multi-agency study. While this study is to 
     use the information and results from the two related studies 
     authorized in sections 243 and 245 of the Energy Independence 
     and Security Act of 2007 (P.L.110-140), it is the intent of 
     the Managers that the Secretary should not wait on the 
     execution or completion of those related studies before 
     undertaking this study.
     (59) Nitrogen fertilizer study
       The Senate amendment directs USDA to assess the feasibility 
     of producing nitrogen fertilizer from renewable energy, 
     including formulation of recommendations for an R&D program. 
     It authorizes $1,000,000 for fiscal year 2008. (Section 9001)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     amendments. It authorizes $1,000,000 in fiscal year 2009. 
     (Section 9003)
     (60) Study of life-cycle analysis of biofuels
       The Senate amendment directs USDA in consultation with the 
     Secretary of Energy and the Administrator of the EPA to 
     conduct a study of methods for evaluating the life-cycle 
     greenhouse gas emissions of conventional fuels and biofuels, 
     and to provide recommendations for a streamlined, simplified 
     method for evaluating the lifecycle greenhouse gas emissions 
     of fuels. (Section 9001)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (61) E-85 fuel program
       The Senate amendment authorizes $20,000,000 for the period 
     fiscal year 2008 through fiscal year 2012 for the USDA to 
     award grants to ethanol production facilities where a 
     majority of ownership is comprised of agricultural producers, 
     to install blending and retail fueling infrastructure. 
     (Section 9001)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (62) Research and development of renewable energy
       The Senate amendment directs the Secretary to carry out a 
     program of biomass and other renewable energy research in 
     coordination with the Colorado Renewable Energy Collaboratory 
     and authorizes funding to USDA and DOE for this purpose. 
     (Section 9001)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision. The 
     Managers believe that the agricultural bioenergy feedstock 
     and energy efficiency research and extension program included 
     in section 7207 of the Research title will accomplish the 
     purposes of this section.
     (63) Northeast Dairy Nutrient Management and Energy 
         Development Program
       The Senate amendment provides for nutrient management and 
     research extension. (Section 9001)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
       The Managers believe that the nutrient management research 
     and extension initiative included in section 7204 of the 
     Research title will accomplish the purposes of this section.
     (64) Sense of the Senate concerning higher levels of ethanol 
         blended gasoline
       The Senate amendment provides a Sense of the Senate 
     encouraging the federal government to investigate and 
     authorize the use of higher blends of ethanol in gasoline. 
     (Section 9002)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (65) Conforming amendments
       The Senate amendment makes conforming amendments. (Section 
     9003)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (66) Sense of Senate concerning regional bioenergy consortia
       The Senate amendment directs the Secretary to continue to 
     allow and support regional consortia of public institutions 
     to support the bioeconomy. (Section 9004)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
       The Managers encourage the Secretary to continue to allow 
     and support efforts of regional consortiums of public 
     institutions, including land grant universities and State 
     departments of agriculture, to jointly support the bio-
     economy through research, extension and education activities.

             TITLE X--HORTICULTURE AND ORGANIC AGRICULTURE

     (1) Annual report on response to honey bee colony collapse 
         disorder
       The House bill requires the Secretary to submit a report to 
     Congress on the investigation of honey bee colony collapse 
     and strategies to reduce colony loss. (Section 10001)
       The Senate amendment contains no comparable provision.
       The Conference substitute deletes the House provision. 
     Language incorporating the goals and objectives of this 
     provision appears in section 7203 of the research title.
     (2) National Honey Board
       The Senate amendment amends section 7(c) of the Honey 
     Research, Promotion and Consumer Information Act (& U.S.C. 
     4606(c)) to ensure that the Honey Board continues and that 
     the Secretary cannot conduct any referendum on the 
     continuation or termination of the order without first 
     conducting a concurrent referendum for approval of orders to 
     establish a successor marketing board. (Section 1854)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to discontinue the current Honey Board after the 
     Secretary has conducted a referendum for honey producers or 
     honey packers, importers and handlers. The Secretary is also 
     required to act as a fiduciary in the conducting of referenda 
     for new marketing boards to ensure that the rights and 
     interests of producers, importers, packers, and handlers of 
     honey are equitably protected in the transition to any 1 or 
     more new successor marketing boards. (Section 10401)
     (3) Identification of Honey
       The Senate amendment amends section 203(h) of the 
     Agricultural Marketing Act of 1946 (7 U.S.C. 1622(h)) to 
     require the grading mark, statement, inspection mark of the 
     Department of Agriculture to be located in close proximity of 
     the country of origin label on packaged honey. (Section 1855)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to specify that violations of the labeling 
     requirements of this section, with respect to honey, may be 
     deemed by the Secretary to be sufficient cause for debarment 
     from the benefits of the Agricultural Marketing Act of 1946. 
     (Section 10402)
     (4) Tree assistance program
       The House bill: (1) amends subtitle C of the Farm and Rural 
     Investment Act of 2002, (2) makes nursery tree growers 
     eligible under the Tree Assistance Program and future 
     disaster assistance programs for which assistance is provided 
     under that program, (3) changes the $75,000 limitation on 
     assistance to $150,000 per year, and (4) maintains current 
     discretionary authorization. (Section 10101)
       The Senate amendment: (1) amends the Trade Act of 1974 by 
     creating a Tree Assistance Program to compensate eligible 
     growers for losses suffered due to natural disasters, (2) 
     makes nursery tree growers eligible under the Tree Assistance 
     Program, (3) changes the $75,000 limitation on assistance to 
     $100,000 per year, (4) adds reimbursement for 50 percent of 
     the cost of pruning, removal and other costs to salvage 
     existing trees or prepare the land to replant trees, and (5) 
     provides necessary mandatory funding to carry out the program 
     over the next five years. (Section 12101(e))
       The Conference substitute adopts the Senate provision with 
     amendments to modify the reimbursement of the cost of 
     replanting trees lost due to a natural disaster; amend the 
     Federal Crop Insurance Act with a provision identical to that 
     which appears in the Trade Act of 1974; incorporate these 
     changes into sections 12033 and 15101 of this Act; and to 
     make other technical changes. (Section 12033; Section 15101)
       The Managers wish to clarify that the insurance requirement 
     for eligibility in the Tree Assistance Program applies only 
     to insurance on crops and not on the underlying vines or 
     trees.
     (5) Specialty crop block grants
       The House bill amends section 101 of the Specialty Crops 
     Competitiveness Act by continuing the Specialty Crop Block 
     Grant Program through 2012, and increasing the mandatory 
     levels of funding to:

[[Page H3651]]

       $60,000,000 in FY'08
       $65,000,000 in FY'09
       $70,000,000 in FY'10
       $75,000,000 in FY'11
       $95,000,000 in FY'12.
       The House provision changes the definition of ``specialty 
     crop'' under the Specialty Crops Competitiveness Act of 2004 
     to include ``horticulture,'' and the definition of ``State'' 
     to include Guam, American Samoa, the U.S. Virgin Islands and 
     the Northern Mariana Islands. (Section 10102)
       The Senate amendment is the same as the House bill, except 
     funding is discontinued after FY'11. The Senate definitions 
     are the same as in the House bill, but also includes 
     ``turfgrass sod'' and ``herbal crops'' in the definition of 
     ``specialty crop''.
       The Senate amendment modifies section 101(e) to require 
     that states, to the maximum extent practicable and 
     appropriate, develop plans that take into consideration the 
     views of beginning and socially disadvantaged farmers and 
     ranchers who produce specialty crops. It also changes the 
     minimum grant amount from $100,000 to one-half of one percent 
     of the overall funding allocated to the program in a given 
     fiscal year. (Section 1841)
       The Conference substitute adopts the House provision with 
     amendments to specify that any funds made available for a 
     fiscal year under the program that are not expended by 
     certain date, to be determined by the Secretary, will be 
     reallocated to other States; change the minimum grant amount 
     to $100,000 or one-third of one percent of the overall 
     funding allocated to the program in a given fiscal year 
     (whichever is higher); provide mandatory levels of funding 
     in the amounts of:
       $10 million for fiscal year 2008;
       $49 million for fiscal year 2009; and
       $55 million for each of fiscal years 2010 through 2012. 
     (Section 10109)
       The Managers expect that the Secretary will encourage each 
     state making applications for funding under the Specialty 
     Crop Block Grant Program to provide a written plan detailing 
     the affirmative steps it will take to perform outreach to 
     specialty crop producers in the development of the State's 
     overall grant plan, including outreach to socially 
     disadvantaged and beginning farmers of specialty crops. The 
     Managers also note that herbal crops fall within the 
     statutory definition of eligible specialty crops under the 
     Specialty Crop Block Grant Program, and direct the 
     Agricultural Marketing Service to include a comprehensive 
     list of specific categories of eligible specialty crops in 
     all relevant promotional materials distributed in connection 
     to the program. The Managers expect the Secretary to continue 
     to consider the cultivation of turfgrass sod as horticulture, 
     and therefore included as part of the definition of specialty 
     crop under the Specialty Crop Competitiveness Act of 2004, 
     and as a specialty crop for any other purposes in this or any 
     other Act.
       The Managers urge the Secretary to encourage state 
     departments of agriculture to develop their grant plans 
     through a competitive process in order to ensure maximum 
     public input and benefit. The Managers expect the Secretary 
     to ensure that States conduct extensive outreach to 
     interested parties through a transparent process of receiving 
     and considering public comment so that grant applications are 
     developed with proven and justified public support, 
     particularly when developing applications for multi-state 
     projects. Further, the Managers expect the Secretary to 
     carefully review requests that extend existing projects to 
     ensure that support remains across the broad array of public-
     private partnerships unique to the structure of the specialty 
     crop industry.
       The Managers note that since 2006 many states have used 
     specialty crop block grant funding for marketing programs, 
     some of which promote state grown products. The Managers 
     expect the Secretary to carefully monitor the use of funds 
     under grant awards to ensure that funds are promoting 
     specialty crops as defined under the Specialty Crop 
     Competitiveness Act of 2004 and are not being used in 
     generically cross-marketing other commodities which fall 
     under state marketing programs but are outside the scope of 
     the Act's definition.
       The Managers recognize the ability of States to submit 
     multi-state projects under current program regulations. The 
     Managers also recognize the growing need for solutions to 
     problems that cross state boundaries and may therefore be 
     addressed more effectively by multi-state projects. These 
     problems include addressing good agricultural practices, 
     research on crop productivity or quality, enhancing access to 
     federal nutrition programs, pest and disease management, or 
     commodity-specific projects addressing common issues in 
     multi-state regions. The Managers therefore request that the 
     Secretary encourage state departments of agriculture to 
     submit grant plans that include multi-state and regional 
     project proposals. The Managers also request that the 
     Secretary give strong consideration to multi-state projects 
     when reallocating unobligated block grant funding.
     (6) Additional section 32 funds for purchase of fruits, 
         vegetables and nuts to support domestic nutrition 
         assistance programs
       The House bill provides funding in addition to amounts 
     available under section 32. Additional amounts of section 32 
     funds dedicated to fruit, vegetable and nut purchases are:
       $190,000,000 in FY'08
       $193,000,000 in FY'09
       $199,000,000 in FY'10
       $203,000,000 in FY'11
       $206,000,000 in FY 2012 and each FY thereafter.
       The House provision expands the Secretary's purchase 
     discretion to include value-added fruit, vegetable and nut 
     products. (Section 10103)
       The Senate amendment is the same as the House bill, with 
     technical differences. (Section 4907)
       The Conference substitute adopts the House provision with 
     an amendment to require that, for each of fiscal years 2008 
     through 2012, the Secretary shall use not less than 
     $50,000,000 of the funds dedicated to fruit, vegetable and 
     nut purchases under section 32 to purchase fresh fruits and 
     vegetables for distribution to schools and service 
     institutions in accordance with section 6(a) of the National 
     School Lunch Act. This provision appears in section 4404 of 
     this Act. (Section 4404)
     (7) Additional section 32 funds to provide grants for the 
         purchase and operation of urban gardens growing organic 
         fruits and vegetables for the local population
       The House bill provides grants to individuals or 
     cooperatives composed of residents of urban neighborhoods 
     where urban gardens or greenhouses are located to assist in 
     purchasing and operating organic fruit and vegetable gardens 
     and greenhouses. Provides that grants may not exceed $25,000 
     per year; $20,000,000 in discretionary funds are appropriated 
     for fiscal year 2008 and each fiscal year thereafter. 
     (Section 10103A)
       The Senate amendment contains no comparable provision.
       The Conference substitute deletes the House provision.
       The Managers recognize the importance of urban gardens in 
     providing opportunities for individuals and groups to produce 
     food, beautify their neighborhoods, and educate themselves 
     about food production systems. The Managers also recognize 
     with the growing consumer awareness of organically produced 
     food many communities may wish to operate organic gardens and 
     greenhouses. The Managers further recognize the role of the 
     Community Food Projects program in satisfying the need for 
     these projects and strongly encourage the Secretary to 
     increase the program's outreach to urban areas in order to 
     increase the submission of grant applications for urban 
     gardens and greenhouses.
     (8) Independent evaluation of Department of Agriculture 
         commodity purchase process
       The House bill requires an independent evaluation of the 
     commodity purchasing processes and the importance of 
     increasing purchases of specialty crops. (Section 10104)
       The Senate amendment contains no comparable provision.
       The Conference substitute adopts the House provision with 
     an amendment to require the Secretary to arrange to have 
     performed an independent evaluation of the purchasing 
     processes used by the Department of Agriculture to 
     implement the requirement that funds available under 
     section 32 of the Act of August 24, 1935 be principally 
     devoted to perishable agricultural commodities. (Section 
     10101)
     (9) Quality requirement for clementines
       The House bill amends section 8e(a) of the Agricultural 
     Adjustment Act by adding clementines to the list of 
     commodities. (Section 10105)
       The Senate amendment is the same as the House bill. 
     (Section 3207)
       The Conference substitute adopts the Senate provision. 
     (Section 10102)
     (10) Implementation of food safety programs under marketing 
         orders
       The House bill amends section 8c of the Agricultural 
     Adjustment Act by authorizing the implementation of quality-
     related food safety programs under specialty crop marketing 
     orders. (Section 10106)
       The Senate amendment contains no comparable provision.
       The Conference substitute deletes the House provision.
       The managers are aware that the Secretary has issued 
     marketing orders which include quality-related provisions 
     intended to enhance the safety of the commodities to which 
     they are applicable. Therefore, the managers recognize that 
     statutory language is unnecessary. It is not the manager's 
     intention to alter the Secretary's authority to incorporate 
     practices to improve the safety of commodities in marketing 
     orders, but rather, to encourage the development of programs 
     of quality-related good agricultural, manufacturing and 
     handling practices with full industry and public 
     participation and in consultation with the Food and Drug 
     Administration.
     (11) Inclusion of specialty crops in census of agriculture
       The House bill amends section 2(a) of the Census of 
     Agriculture Act to include a census of specialty crops as 
     part of the general census of agriculture. (Section 10107)
       The Senate amendment contains a freestanding provision 
     which requires the Secretary to conduct a census of specialty 
     crops not later than September 30, 2008 and each 5 years 
     thereafter. It also allows the Secretary to include the 
     census of specialty crops in the census on agriculture. 
     (Section 1814)
       The Conference substitute adopts the House provision. 
     (Section 10103)
     (12) Maturity requirements for Hass avocados
       The House bill: (1) amends subtitle A of the Agricultural 
     Marketing Act of 1946 by adding at the end of the title a new 
     section, (2) requires the Secretary to issue regulations 
     requiring all Hass avocados sold in the U.S. to

[[Page H3652]]

     meet a minimum maturity requirement, (3) allows for 
     exceptions from this requirement for avocadoes intended for 
     charities, relief agencies or processing, (4) uses existing 
     inspectors that already inspect avocadoes under other orders, 
     and allows the Secretary to collect fees to pay for 
     inspection activities, (5) imposes civil penalties between 
     $50 and $5,000 for each violation, (6) allows for the 
     diversion of avocados that don't meet the maturity 
     requirements, and (7) authorizes appropriations for necessary 
     sums. (Section 10108)
       The Senate amendment contains a freestanding provision 
     which authorizes an organization of domestic avocado 
     producers to submit to the Secretary a proposal for a grades 
     and standards marketing order for Hass avocados. Once that 
     proposal is received, the Secretary is required to initiate 
     established procedures under the normal marketing order 
     process for the purpose of determining whether there is 
     sufficient industry support for the proposal submitted by the 
     organization. If the Secretary deems it appropriate to 
     establish a marketing order, the language also requires the 
     Secretary to complete that order within 15 months. (Section 
     1856)
       The Conference substitute adopts the Senate provision. 
     (Section 10108)
     (13) Mushroom promotion research and consumer information
       The House bill: (1) amends the Mushroom Promotion, Research 
     and Consumer Information Act of 1990, (2) reflects the 
     changed geographic distribution of mushroom growers and their 
     productivity by combining the regions that are represented on 
     the Board, and increasing the number of pounds required for 
     representation in the region, and (3) allows the development 
     of good agricultural practices and good handling practices 
     under the mushroom research and promotion order. (Section 
     10109)
       The Senate amendment is the same as the House bill, except 
     also allows the development of food safety programs under the 
     promotion order. (Section 1853)
       The Conference substitute adopts the House provision with 
     an amendment to clarify that the mushroom council may develop 
     and propose to the Secretary programs for good agricultural 
     and good handling practices and related activities for 
     mushrooms. (Section 10104)
     (14) Fresh produce education initiative
       The House bill authorizes a program to educate persons 
     involved in the fresh produce industry and the public about 
     ways to reduce pathogens in fresh produce and sanitary 
     handling practices. It authorizes necessary sums for each FY 
     2008 through 2012. (Section 10110)
       The Senate amendment is the same as the House, except 
     authorizes $1,000,000 in discretionary funding to carry out 
     the section. (Section 1813)
       The Conference substitute adopts the Senate provision with 
     an amendment to specify that there are authorized to be 
     appropriated to carry out this section $1,000,000 for each of 
     fiscal years 2008 through 2012, to remain available until 
     expended. (Section 10105)
     (15) Pest and disease program
       The House bill establishes a new program to conduct early 
     pest detection and surveillance activities in coordination 
     with state departments of agriculture, to prioritize and 
     create action plans to address pest and disease threats to 
     specialty crops, and to create an audit-based certification 
     approach to protect against the spread of plant pests. It 
     provides mandatory funding in the amount of:
       (1) $10,000,000 in FY 2008;
       (2) $25,000,000 in FY 2009;
       (3) $40,000,000 in FY 2010;
       (4) $55,000,000 in FY 2011; and
       (5) $70,000,000 in FY 2012. (Section 10201)
       The Senate amendment is the same as the House, except for 
     technical differences and provides mandatory funds in the 
     amounts of:
       (1) $10,000,000 for FY 2008;
       (2) $25,000,000 for FY 2009;
       (3) $40,000,000 for FY 2010;
       (4) $50,000,000 for FY 2011;
       (5) $64,000,000 for FY 2012. (Section 12101(f))
       The Conference substitute adopts the Senate provision with 
     an amendment to: describe the application procedure for the 
     program; prohibit the Department of Agriculture from 
     considering the availability of nonfederal funds in 
     determining whether to enter into a cooperative agreement 
     with a State department of agriculture; direct the Secretary 
     to consider various risk factors when considering an 
     application for a cooperative agreement; express 
     Congressional disapproval of a cost-sharing rule for animal 
     and health emergency programs and; specify mandatory funding 
     in the amounts of:
       (1) $12,000,000 for fiscal year 2009;
       (2) $45,000,000 for fiscal year 2010;
       (3) $50,000,000 for fiscal year 2011; and
       (4) $50,000,000 for fiscal year 2012. (Section 10201)
       The Managers believe that the nursery plant pest risk 
     management systems established under this section will 
     provide the nursery industry with assistance and flexibility 
     in developing programs that meet its needs to determine and 
     manage plant pest and disease risks
       The Managers note that the U.S. Department of Agriculture 
     has taken specific steps to promote new methods of inspection 
     and regulation based on new approaches to nursery pest risk 
     management, sometimes referred to as the ``systems 
     approach.'' These steps include a technical agreement under 
     the auspices of the North American Plant Protection 
     Organization (Regional Standards for Phytosanitary Measures 
     Number 24), and the development of the U.S. Nursery 
     Certification Program, a limited test-pilot program developed 
     by Animal and Plant Health Inspection Service Plant 
     Protection and Quarantine to promote U.S. nursery shipments 
     to Canada.
       The Managers are aware of the U.S. Department of 
     Agriculture's efforts to promote the systems approach for the 
     nursery industry. The development of effective systems of 
     pest risk management and the industry adoption of such 
     systems will be hastened and made more effective through an 
     initiative based on collaboration among key agencies, 
     Departmental personnel, industry organizations, and research 
     institutions. To implement the nursery plant pest risk 
     management systems under this section, U.S. Department of 
     Agriculture policies and regulations must have a sound 
     foundation in research and experience through pilot programs 
     of nursery plant pest risk management systems. In addition, 
     there must be collaboration among industry and state and 
     federal regulators to improve programs of inspection, 
     certification and regulation using such systems.
       The Managers recognize that systems of pest risk management 
     developed by the nursery industry must satisfy prevailing 
     regulatory requirements if they are to be useful and 
     effective. The Managers encourage the U.S. Department of 
     Agriculture to provide guidance and technical assistance to 
     the nursery industry, and to promote and coordinate related 
     programs of research in the implementation of nursery plant 
     pest risk management systems under this section.
     (16) Multi-species fruit fly research and sterile fly 
         production
       The House bill authorizes the construction of a warehouse 
     and irradiation containment facility for fruit fly rearing 
     and sterilization in Waimanalo, Hawaii. It also authorizes 
     the appropriation of $15,000,000 for construction and 
     $1,000,000 for 2008 and each subsequent fiscal year for 
     facility maintenance. (Section 10202)
       The Senate amendment contains no comparable provision.
       The Conference substitute deletes the House provision.
       The Managers recognize that fruit flies are among the most 
     destructive pests of fruits and vegetables in the world and 
     pose a significant risk to U.S. agriculture. Further, the 
     Managers recognize the importance of the Animal and Plant 
     Health Inspection Service's (APHIS) Fruit Fly Control 
     Programs in controlling fruit flies. Given the need for a 
     backup sterile fruit fly facility for Mediterranean, Melon, 
     Oriental, and Solanaceaous fruit flies, the Managers strongly 
     encourage the Secretary to fully consider Waimanalo, Hawaii, 
     when determining where such a multi-species facility will be 
     located. In examining Waimanalo, Hawaii, and other locations, 
     APHIS should consider whether the locations will support the 
     establishment of the species of fruit flies being produced, 
     existing researcher expertise and experience, whether the 
     area is already infested with the species of fruit flies 
     being produced, and cost effectiveness. The Managers strongly 
     encourage APHIS to request appropriated funding as authorized 
     by 7 U.S.C. 428a to provide for the costs of building, 
     maintaining, and operating a backup sterile multi-species 
     fruit fly facility at the location deemed most suitable.
     (17) National organic certification cost-share program
       The House bill amends section 10606 of the Farm Security 
     and Rural Investment Act to provide $22,000,000 for the 
     national organic certification cost-share program, to be 
     available until expended. It provides that the federal share 
     may not exceed 75 percent of the cost of certification, and 
     the maximum amount a producer may receive is raised from $500 
     to $750. (Section 10301)
       The Senate amendment amends section 10606 of the Farm 
     Security and Rural Investment Act of 2002 (7 U.S.C. 6523) to 
     reauthorize the National Organic Certification Cost-Share 
     program, which provides funds for the Secretary to assist 
     producers and handlers of agricultural products in obtaining 
     certification under the Organic Foods Production Act of 1990. 
     Payments to producers or handlers are limited to $750, and 
     the federal share of the certification cost will be no more 
     than 75 percent of the total certification cost incurred. The 
     Senate provision adds language to require the Secretary to 
     submit to Congress, reports that describes the expenditures 
     for each state under the program during the previous fiscal 
     year. It also provides $22,000,000 in mandatory funding. 
     (Section 1823)
       The Conference substitute adopts the Senate provision with 
     an amendment to delete the federal share requirements as well 
     as the federal and state recordkeeping requirements, and to 
     require the Secretary to submit to the House and Senate 
     Agriculture Committees a report containing certain program 
     information. (Section 10301)
       The Managers encourage the Secretary to keep accurate and 
     current records of requests by and disbursements to States 
     under the program, and require accurate and consistent 
     recordkeeping from each State and entity that receives 
     program payments. The Managers also recognize the importance 
     of distributing cost-share funds to the States in a timely 
     manner, and request that the Secretary distribute such funds 
     at the soonest date practicable following the deadline for

[[Page H3653]]

     submission of funding requests under the program. The 
     Managers are aware that there have been discussions between 
     the Department of Agriculture and the States regarding 
     administrative fees for the program and encourage the 
     Department to review administrative fees to ensure optimal 
     performance in serving the needs of organic producers and 
     handlers.
     (18) Organic production and market data
       The House bill: (1) amends section 7407 of the Farm 
     Security and Rural Investment Act to add pricing of organic 
     products as new data to be included in the ongoing collection 
     of data on agriculture production and marketing, (2) provides 
     that the data on organics under this section shall be 
     collected to analyze crop loss risk of organic methods of 
     production, (3) provides $3,000,000 in mandatory funds to be 
     available until expended, and (4) includes a free-standing 
     provision that requires the Secretary of Agriculture to 
     submit to Congress a report regarding the progress made in 
     implementing this amendment. (Section 10302)
       The Senate amendment amends section 2104 of the Organic 
     Foods Production Act of 1990 (7 U.S.C. 6503) by granting the 
     Secretary authority to segregate data as it relates to the 
     organic industry by publishing organic production and 
     marketing information and surveys. The language is intended 
     to remedy the lack of price and yield information for organic 
     producers.
       Senate expands upon House language by requiring detailed 
     data collection for: organic production and market data 
     initiatives and surveys; expand, collect, and publish organic 
     census data analysis, fund comprehensive reporting of prices 
     relating to organically-produced agricultural products; 
     conduct analysis relating to organic production, handling, 
     distribution, retail, and trend studies; study and perform 
     periodic updates on the effects of organic standards on 
     consumer behavior; conduct analysis for organic agriculture 
     using the national crop table.
       The Senate provision provides $5,000,000 in mandatory 
     funding. (Section 1821) The Conference substitute adopts the 
     Senate provision with an amendment to clarify the data 
     collection, analysis, and survey development requirements for 
     the Secretary, as well as to further specify the contents of 
     the report that the Secretary shall submit to the House and 
     Senate Agriculture Committees. (Section 10302)
       The Managers have provided $5,000,000 in mandatory funding 
     in an effort to jump-start organic data collection efforts at 
     the Department of Agriculture, but recognize that remedying 
     the unmet data collection needs of the organic sector will 
     require further investment, and therefore, have provided an 
     additional authorization of appropriations of $25,000,000 for 
     the period of fiscal years 2008 through 2012 to carry out the 
     program. The Managers intend that $3.5 million of the funding 
     provided for this section be allocated to the Agricultural 
     Market Service to collect and distribute comprehensive 
     reporting of prices relating to organically produced 
     agricultural products. The Managers also note the critical 
     importance of collecting data related to crop loss risk, and 
     farm-gate prices, in order to determine appropriate products 
     and premiums for crop insurance policies offered to organic 
     producers. The Managers further intend that $1.5 million of 
     the funding provided for this section be used by the Economic 
     Research Service and National Agricultural Statistics Service 
     to carry out the specified requirements of the initiative 
     that are appropriate to each agency.
     (19) Organic conversion, technical and educational assistance
       The House bill authorizes $50,000,000 over five years to 
     provide technical assistance and cost-sharing grants to 
     farmers trying to transition to organic farming. (Section 
     10303)
       The Senate amendment contains a comparable provision in the 
     conservation title (EQIP).
       The Conference substitute deletes the House provision. 
     Language addressing the goal of providing technical 
     assistance to farmers trying to transition to organic farming 
     appears in section 2501 of the conservation title.
     (20) Exemption of certified organic products from assessments
       The Senate amendment amends section 501(e) of the Federal 
     Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7401 
     (e)) to allow farmers who have some or part of their farm 
     certified organic to receive the exemption. Only producers 
     that are USDA organically certified may receive the exemption 
     for that portion of land they produce organically. (Section 
     1822)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (21) National organic program
       The Senate amendment amends section 2123 of the Organic 
     Foods Production Act of 1990 (7 U.S.C. 6522) to provide 
     increased authorized incremental funding levels for the 
     National Organic Program to ensure proper compliance and 
     oversight of the National Organic Program. It also authorizes 
     $5,000,000 for fiscal year 2008; $6,500,000 for fiscal year 
     2009; $8,000,000 for fiscal year 2010; $9,500,000 for fiscal 
     year 2011; and $11,000,000 for fiscal year 2012. (Section 
     1824)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to provide such additional sums as are necessary 
     to carry out the program. (Section 10303)
       The National Organic Program (NOP) is the first line of 
     defense in assuring consumers that organic products certified 
     under the program consistently meet the program's standards. 
     The Managers are aware of concerns raised by numerous organic 
     agriculture interests concerning the level of resources 
     devoted to the NOP. While the program's funding level has 
     increased over time, the Managers view the current level 
     of funding as inadequate to permit the NOP to properly 
     address the world-wide scope of accreditation oversight 
     and certifier training. The Managers strongly encourage 
     the Secretary to prepare NOP budget requests at least 
     equal to the appropriations levels authorized in this Act.
     (22) Grant program to improve the movement of specialty crops
       The House bill: (1) authorizes the Secretary to make grants 
     to State and local governments, grower cooperatives, and 
     producer and shipper organizations to improve the cost-
     effective movement of specialty crops, (2) provides that the 
     grant recipient must match the amount of funds received under 
     this program, and (3) authorizes appropriations for necessary 
     sums to carry out the section. (Section 10401)
       The Senate amendment is the same as the House bill, except 
     Senate language amends title II of the Specialty Crops 
     Competitiveness Act of 2004 (Public Law 108-465; 118 Stat. 
     3884), and clarifies that non-profit trucking associations 
     and their research entities are eligible to receive grants. 
     (Section 1842)
       The Conference substitute adopts the House provision with 
     an amendment to allow national, state, or regional 
     organizations of producers, shippers or carriers to be 
     eligible for grants under the program. (Section 10403)
     (23) Authorization of appropriations for market news 
         activities regarding specialty crops
       The House bill authorizes necessary funds for each of 
     fiscal years 2008 through 2012 to support market news 
     activities regarding specialty crops. (Section 10402)
       The Senate amendment authorizes $9,000,000 for each of 
     fiscal years 2008 through 2012, to remain available until 
     expended for market news activities to provide timely price 
     information on fruits and vegetables. (Section 1811)
       The Conference substitute adopts the Senate provision with 
     an amendment to specify that in addition to any other funds 
     made available through annual appropriations for market news 
     services, there is authorized to be appropriated $9,000,000 
     for each of fiscal years 2008 through 2012, to remain 
     available until expended. (Section 10107)
     (24) Farmer marketing assistance program
       The House bill: (1) amends section 6 of the Farmer-to-
     Consumer Direct Marketing Act of 1976 and provides findings, 
     (2) renames the Farmers' Market Promotion Program the 
     ``Farmer Marketing Assistance Program'', (3) specifies 
     categories of farmer-to-consumer direct marketing activities 
     eligible for funding under the program, (4) provides 
     mandatory funds in the amounts of $5,000,000 for fiscal years 
     2008 through 2010; and $10,000,000 for fiscal years 2011 
     through 2012, and (5) provides that 10 percent of these funds 
     shall be used to support the use of electronic benefit 
     transfers at farmer's markets. (Section 10403)
       The Senate amendment: (1) amends section 6 of the Farmer-
     to-Consumer Direct Marketing Act of 1976 (7 U.S.C. 3005) to 
     reauthorize the Farmers Market Promotion Program, (2) adds 
     language to include producer networks or associations, and 
     (3) provides mandatory funds in the amounts of $5,000,000 for 
     each of fiscal years 2008 through 2011; and $10,000,000 for 
     fiscal year 2012. (Section 1812)
       The Conference substitute adopts the Senate provision with 
     an amendment to specify that 10 percent of the funds 
     available to carry out the Farmers' Market Promotion Program 
     be used to implement electronic benefit transfer systems at 
     farmers' markets; and to specify mandatory funding in the 
     amounts of:
       $3,000,000 for fiscal year 2008;
       $5,000,000 for each of fiscal years 2009 and 2010;
       $10,000,000 for each of fiscal years 2011 and 2012. 
     (Section 10106)
       The Managers recognize that farmer-to-consumer direct 
     marketing activities offer significant economic opportunities 
     for farmers and ranchers seeking to increase profit 
     retention. The Farmers' Market Promotion Program is intended 
     to support the development and expansion of farmers' markets, 
     and all other forms of direct marketing, through the 
     provision of grants to assist in organizing, marketing, 
     training, business plan development, community outreach and 
     education, and other associated activities designed to 
     establish or improve direct marketing opportunities for 
     farmers and ranchers and the consumers they serve.
       The Managers recognize that the growth of farmers' markets 
     and other direct marketing ventures has been limited in some 
     communities and regions, and therefore encourage the 
     Department to determine the underlying reasons for this 
     uneven distribution, with the goal of addressing this 
     disparity through the support of meritorious projects in 
     these locations.
       The Managers are aware of the growing role that the more 
     than 4,300 farmers markets and 1,200 community supported 
     agriculture enterprises across the country play in providing 
     access to fresh, healthy, and

[[Page H3654]]

     local foods, to all Americans, including those who 
     participate in federal food assistance programs. As of 2006, 
     the USDA estimated that only 6 percent of farmers' markets 
     nationwide have electronic benefit transfer (EBT) systems in 
     place to accept food stamp benefits. To increase the use of 
     food stamp benefits at farmers' markets and community 
     supported agriculture enterprises, the Managers have required 
     a minimum of ten percent of the Farmers' Market Promotion 
     Program funds be devoted to projects designed to implement 
     EBT systems. The Managers also encourage the Secretary to 
     examine and implement more systemic administrative approaches 
     to increase the nationwide access of EBT technology suitable 
     for farmers' markets and community supported agriculture 
     enterprises, including possible ways to improve the 
     administration of EBT service provider contracts to achieve 
     this goal.
     (25) National clean plant network
       The House bill creates a funding source for clean planting 
     stock and authorizes the Secretary to enter into cooperative 
     agreements to produce, maintain and distribute healthy 
     planting stock. It authorizes the appropriation of necessary 
     funds through 2012 in addition to $20,000,000 in mandatory 
     funds for the period of fiscal years 2008 through 2012. 
     (Section 10404)
       The Senate amendment is the same as the House bill, with 
     technical differences. (Section 1851)
       The Conference substitute adopts the Senate provision with 
     an amendment to add NLGCA institutions to the list of 
     entities the Secretary shall consult with in carrying out the 
     program, and to specify mandatory funding in the amounts of 
     $5,000,000 for each of fiscal years 2009 through 2012. 
     (Section 10202)
     (26) Healthy food urban enterprise development program
       The House bill: (1) provides competitive grants to eligible 
     entities to conduct studies on improving access of 
     underserved communities to affordable, locally produced food, 
     (2) provides that the maximum grant amount shall not exceed 
     $250,000, and (3) authorizes the appropriation of necessary 
     funds for each of fiscal years 2008 through 2012. (Section 
     10405)
       The Senate amendment requires the Secretary of Agriculture 
     to establish, through a competitive grant process, the 
     Healthy Enterprise Development Center, the mission of which 
     is to increase access to healthy, affordable foods to 
     underserved communities. The Healthy Food Enterprise 
     Development Center will be required to collect, develop, and 
     provide technical assistance to agricultural producers, food 
     wholesalers and retailers, schools, and other entities 
     regarding best practices for aggregating, storing, 
     processing, and marketing local agricultural products and 
     increasing the availability of such products in underserved 
     communities. The Healthy Food Enterprise Development Center 
     is also provided with the authority to subgrant funds to 
     carry out feasibility studies to carry out the purposes of 
     the Center. The provision provides $7,000,000 in mandatory 
     money. (Section 1843)
       The Conference substitute adopts the Senate provision with 
     amendments to place language for the Healthy Urban Food 
     Enterprise Development Center within the Community Food 
     Projects statute; clarify that subgrants may be used to 
     establish and facilitate enterprises that process, 
     distribute, aggregate, store, and market healthy affordable 
     foods; limit the amount allocated for administrative 
     expenses; provide $1,000,000 in funding for each of fiscal 
     years 2009 through 2011; and authorize $2,000,000 for fiscal 
     year 2012. (Section 4402)
       The Managers expect that sub-grants be provided for 
     activities in underserved areas that assist appropriate 
     institutions in modifying and upgrading facilities through 
     the purchase of refrigeration units, coolers or other 
     equipment appropriate to accommodate healthy and locally 
     produced agricultural food products.
     (27) Definitions
       The Senate amendment sets out definitions to apply 
     throughout subtitle F for the terms ``specialty crop'', 
     ``state'', and ``state department of agriculture.'' (Section 
     1801)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to remove the definition of the term ``State.'' 
     (Section 10001)
     (28) Foreign market access study and strategy plan
       The Senate amendment requires the Comptroller General of 
     the United States to carry out a study regarding the extent 
     to which United States specialty crops have or have not 
     benefited from the reduction of foreign trade barriers under 
     the Uruguay Round. (Section 1831)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (29) Consultations on sanitary and phytosanitary restrictions 
         for fruits and vegetables
       The Senate amendment requires the Secretary to consult with 
     interested persons and conduct annual briefings on sanitary 
     and phytosanitary trade issues, included the development of a 
     strategic risk management framework and as appropriate 
     implementation of a peer review for risk analysis. (Section 
     1833)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (30) Market loss assistance for asparagus producers
       The Senate amendment establishes a program to pay those 
     producers currently growing asparagus for revenue losses 
     during the 2004-2007 crop years due to imports. The language 
     provides $15,000,000 in mandatory funding ($7,500,000 for 
     producers of fresh asparagus and $7,500,000 for producers of 
     processed or frozen asparagus). (Section 1852)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 10404)

                          TITLE XI--LIVESTOCK

     (1) Livestock mandatory price reporting
       The Senate amendment amends the Livestock Mandatory 
     Reporting Act in subsection (a). It amends section 232(c)(3) 
     to change the time of the afternoon swine report from 2:00 
     p.m. to 3:00 p.m. (Central Time). It also changes the time 
     that USDA will publish the afternoon swine report from 3:00 
     p.m. to 4:00 p.m. (Central Time). Subsection (b) directs USDA 
     to study the economic impacts of including wholesale pork 
     product sales reporting on producers and consumers, including 
     the effects of a confidentiality requirement on mandatory 
     reporting. Upon completion of that study, USDA may establish 
     mandatory packer reporting of wholesale pork product sales 
     (such as pork cuts and retail-ready pork products), requiring 
     each packer processing plant to report to USDA price and 
     volume information at least twice each reporting day. 
     Subsection (c) ensures that USDA continues to publish retail 
     scanner data. (Section 10001)
       The House bill contains no comparable provision.
       The Conference substitute deletes subsection (a) of the 
     Senate provision to amend the afternoon swine report. The 
     conference substitute adopts subsection (b) of the Senate 
     provision with an amendment to restrict the focus of the 
     wholesale pork study to only pork cuts. Additionally, the 
     Secretary of Agriculture will be provided 1 year to complete 
     the study upon enactment of this Act. The substitute also 
     clarifies that the Secretary is only authorized to collect 
     the data necessary to complete the study during the period 
     preceding the completion of the report. An authorization 
     of such sums as necessary is provided to complete the 
     study. The Conference substitute deletes subsection (c) of 
     the Senate provision.
       The conference substitute also provides enhancements to 
     improve readability and understanding of information 
     published under the Livestock Mandatory Reporting Act through 
     electronic reporting.
       The Managers expect the website improvements to be 
     presented in a user friendly format that can be readily 
     understood by producers, packers and other market 
     participants. The website should include charts and graphs 
     that provide real time data, including comparable data from 
     previous days so that producers and other industry 
     participants can track market changes. (Section 11001)
     (2) Grading and inspection
       The Senate amendment amends section 203 of the Agricultural 
     Marketing Act of 1946 (7 U.S.C. 1622) to provide USDA 
     authority to establish a voluntary grading program at USDA 
     for catfish. The provision requires USDA to provide 
     inspection activities under the Federal Meat Inspection Act 
     for farm raised catfish, by adding catfish to the list of 
     ``amenable species.'' The Secretary, while establishing the 
     grading and inspection program for catfish, is required to 
     ensure that nothing duplicates, impedes, or undermines any of 
     the food safety or product grading activities conducted by 
     the Department of Commerce or the Food and Drug 
     Administration. (Section 10002)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to authorize a voluntary fee-based grading 
     program at USDA for catfish. Additional species of farm-
     raised fish or farm-raised shellfish may be added to the 
     grading program through a petition process to the Secretary 
     of Agriculture. The conference substitute also provides that 
     catfish shall be an amenable species under the Federal Meat 
     Inspection Act, and therefore will be subject to examination 
     and inspection by USDA's Food Safety and Inspection Service 
     (FSIS) when processed for use as human food. In conducting 
     such inspections, FSIS is authorized to take into account the 
     conditions under which the catfish are raised and transported 
     to a processing establishment. Additional species of fish and 
     shellfish are not addressed in this amendment; however, the 
     Managers note that the Secretary has underlying authority 
     within the Federal Meat Inspection Act to amend the 
     definition of amenable species as he considers necessary and 
     appropriate.
       Additionally, the conference substitute requires the 
     Secretary, in promulgating regulations for inspection 
     activities, to consult with the Commissioner of the Food and 
     Drug Administration. Final regulations for grading and 
     inspection activities shall be promulgated not later than 18 
     months after the date of enactment of this section. The 
     Conference substitute also requires the Secretary of 
     Agriculture to submit an estimate of the costs of 
     implementing the program. (Section 11016)

[[Page H3655]]

       It is the intent of Congress that catfish be subject to 
     continuous inspection and that imported catfish inspection 
     programs be found to be equivalent under USDA regulations 
     before foreign catfish may be imported into the United 
     States.
       The Managers intend that nothing in this section be 
     interpreted to reduce funding or the level of inspection for 
     meat, poultry and egg products. The Managers expect the 
     Secretary to budget accordingly each year for catfish 
     inspection. The Managers expect the Secretary, in approving 
     any petition for voluntary, fee-based grading services for 
     any additional farm-raised fish or farm-raised shellfish 
     species, to make any resulting service available only on a 
     facility by facility basis.
     (3) Country of origin labeling
       The House bill amends the Agricultural Marketing Act of 
     1946 to provide new country of origin labeling requirements 
     for beef, lamb, pork and goat. It amends the list of covered 
     commodities to include goat meat. The provision specifies 
     labeling requirements for products that are of United States 
     country of origin, multiple countries of origin, imported for 
     immediate slaughter, and from a foreign country of origin. To 
     be eligible for U.S. country of origin, the product must be 
     derived from an animal that was exclusively born, raised, and 
     slaughtered in the U.S. (with a narrow exception for animals 
     from Alaska or Hawaii and transported through Canada), or 
     present in the U.S. on or before January 1, 2008. The House 
     provision authorizes the Secretary to conduct audits to 
     verify compliance with this section. It prohibits the 
     Secretary from requiring a person or entity to maintain a 
     record of the country of origin of covered commodities, other 
     than those maintained in the course of the normal conduct of 
     business of such person or entity. The House bill amends 
     section 283 to clarify that a retailer or person engaged in 
     the business of supplying a covered commodity to a retailer 
     notified of a violation will be provided 30 days to come into 
     compliance with the law. It provides that if such person does 
     not make a good faith effort to comply, and continues to 
     willfully violate the law, the Secretary may fine the person 
     in an amount up to $1,000 for each violation. (Section 11104)
       The Senate amendment is similar to the House language but 
     has several modifications. It amends the list of covered 
     commodities to include goat meat, macadamia nuts and chicken. 
     In addition to House language, Senate adds language to U.S. 
     country of origin labeling category to require that animals 
     present in the United States on or before January 1, 2008, 
     and once present in the United States, must have remained 
     continuously in the United States. In addition to House 
     language regarding multiple countries of origin, Senate adds 
     disclaimer under subsection (B) to clarify that labeling for 
     multiple countries of origin is a mandatory requirement. 
     (Section 10003)
       The Conference substitute adopts the Senate provision with 
     an amendment to add ginseng and pecans as covered 
     commodities. Covered commodities, such as beef, lamb, pork, 
     chicken, or goat present in the United States on or before 
     July 15, 2008 will be labeled as product of the United 
     States. The Managers reinstate current law regarding the 
     labeling of processed wild fish to include locations such as 
     aboard a vessel that is documented under chapter 121 of title 
     46, United States Code, or registered in the United States. 
     (Section 11002)
     (4) Definitions
       The Senate amendment: (1) amends the definitions of terms 
     provided for the purposes of the Agricultural Fair Practices 
     Act of 1967, (2) expands the definition of ``association of 
     producers'' to also include general livestock, poultry and 
     farm groups, and (3) clarifies that a handler is not a 
     producer, nor a person that provides custom feeding services. 
     (Section 10101)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to define the term associations of producers to 
     include organizations with a membership exclusively limited 
     to agricultural producers and dedicated to promoting the 
     common interest and general welfare of agricultural products. 
     Additionally, the conference substitute deletes the Senate 
     provision that excluded the term ``producer'' from the 
     definition of ``handler.'' The conference substitute also 
     removes the provision defining the Secretary of Agriculture 
     under the Agricultural Fair Practices Act of 1967. (Section 
     11003)
       It is the intent of the Managers that custom feeding 
     services should be interpreted to mean a producer or business 
     that feeds livestock for other producers, but does not own 
     the livestock they are feeding and raising for those 
     producers.
     (5) Prohibited practices
       The Senate amendment: (1) amends section 4 of the 
     Agricultural Fair Practices Act to expand the list of 
     prohibited practices, (2) amends the first category to add 
     that it shall also be unlawful for any handler to knowingly 
     engage or permit any employee or agent to coerce any producer 
     in the exercise of his right to form an association of 
     producers, and (3) adds that it shall be unlawful to ``fail 
     to bargain in good faith with an association of producers.'' 
     (Section 10102)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (6) Enforcement
       The Senate amendment amends the enforcement provisions by 
     striking section 5 and replacing it with a directive for the 
     Secretary to conduct rulemaking to clarify what constitutes 
     normal and fair dealing per section 10104. It also strikes 
     section 6 of the current law to provide the Secretary of 
     Agriculture the authority to bring a civil action in United 
     States District Court by filing a complaint requesting 
     preventative relief, including an application for a permanent 
     or temporary injunction, restraining order or other order, 
     against the handler. Under the Senate provision, handlers 
     found to have violated the Act are liable for the amount of 
     damages including the costs of litigation and reasonable 
     attorneys' fees. The Senate provision changes the statute of 
     limitations from 2 years to 4 years and provides for an 
     additional penalty of not more than $1,000 per violation. 
     (Section 10103)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (7) Rules and regulations
       The House bill amends the Agricultural Fair Practices Act 
     by adding provisions for the promulgation of new rules and 
     regulations. It directs USDA to promulgate rules and 
     regulations, including rules or regulations necessary to 
     clarify what constitutes fair and normal dealing for purposes 
     of the selection of customers by handlers. Please note 
     section 5 (7 U.S.C. 2304) was struck pursuant to section 
     10103. (Section 10104)
       The Senate amendment
       The Conference substitute deletes the Senate provision.
     (8) Special counsel for agricultural competition
       The Senate amendment amends the Packers and Stockyards Act 
     by adding a new subtitle that provides for the appointment of 
     a special counsel at USDA to investigate and also prosecute 
     violations of Packers and Stockyards Act and Agricultural 
     Fair Practices Act. The Special Counsel will oversee the 
     Office of Special Counsel and will have the responsibility 
     for all duties and functions of the Packers and Stockyards 
     programs at USDA. Employees within GIPSA's Packers and 
     Stockyards programs will report to the Special Counsel. Grain 
     inspection activities currently carried out by GIPSA would 
     continue to report to the Administrator for GIPSA as a 
     separate agency or as determined by the Secretary upon 
     implementing this section. The Administrator for GIPSA would 
     no longer oversee activities of the Packers and Stockyards 
     programs. The Senate provision provides that the Special 
     Counsel will report to the Secretary of Agriculture. The 
     Special Counsel shall be free from the direction and control 
     of any person in the Department of Agriculture other than the 
     Secretary. The Special Counsel shall be appointed by the 
     President with the advice and consent of the Senate. The 
     Senate provision provides that the Special Counsel shall 
     report twice each year to Congress that details the number of 
     complaints received and closed, number of investigations and 
     civil and administrative actions initiated, carried out and 
     completed, number and type of decisions agreed to and number 
     of stipulation agreements, the number of investigations and 
     civil and administrative actions that the Secretary objected 
     to or prohibited from being carried out, and the stated 
     purpose of the Secretary for each objection or prohibition. 
     The Special Counsel, prior to commencing, defending, or 
     intervening in any civil action under the Packers and 
     Stockyards Act or the Agricultural Fair Practices Act, shall 
     give written notification to the Attorney General. Should the 
     Attorney General fail to commence, defend, or intervene in 
     the proposed action, the Special Counsel may commence, defend 
     or intervene and supervise the litigation in the name of the 
     Special Counsel. Nothing prevents the Attorney General from 
     intervening on behalf of the United States in any civil 
     action under the Packers and Stockyards Act or the 
     Agricultural Fair Practices Act. (Section 10201)
       The House bill contains no comparable provision.
       The Conference substitute provides that the Secretary shall 
     submit an annual report by the Grain Inspection, Packers and 
     Stockyards Administration at the Department of Agriculture to 
     detail the number of investigations into possible violations 
     of the Packers and Stockyards Act, 1921. The annual report 
     will detail the length of time that investigations are 
     pending with the Grain Inspection, Packers and Stockyards 
     Administration, the General Counsel of the Department of 
     Agriculture and the Department of Justice. The annual 
     report requirement will expire with the expiration of this 
     Act. (Section 11004)
       It is the intent of the Managers that the annual report 
     provide ranges into the length of time investigations may be 
     pending with the Grain Inspection, Packers and Stockyards 
     Administration, the Office of General Counsel, or the 
     Department of Justice. The Managers have provided flexibility 
     for the Secretary to conduct the report using various summary 
     statistics such as range, maximum, minimum, mean and average 
     times. However, at a minimum, the Managers request charts to 
     be provided in the annual report denoting the ranges in 6 
     month intervals.
     (9) Investigation of live poultry dealers
       The Senate amendment: (1) amends section 2 of the Packers 
     and Stockyards Act to remove the poultry slaughter 
     requirement

[[Page H3656]]

     from the existing definitions, (2) amends title II of the 
     Packers and Stockyards Act to give the USDA administrative 
     enforcement authority over live poultry dealers under the 
     Act, (3) defines ``poultry grower'' as any person engaged in 
     the business of raising or caring for live poultry under a 
     poultry growing arrangement, regardless of whether the 
     poultry is owned by the person or by another person, (4) 
     amends section 408 of the Packers and Stockyards Act to 
     provide authority for the Secretary to request a temporary 
     injunction or restraining order if a person subject to the 
     Act fails to pay a poultry grower what is due the poultry 
     grower for poultry care, (5) increases the penalty for 
     violations under the Act from $10,000 to $22,000, and (6) 
     repeals sections regarding poultry enforcement under sections 
     411, 412, and 413. (Section 10202)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (10) Definition of capital investment
       The Senate amendment amends title I of the Packers and 
     Stockyards Act to add the definition of a capital investment. 
     Capital investment is defined as an investment in a 
     structure, such as a building or manure storage structure; or 
     machinery or equipment associated with producing livestock or 
     poultry that has a useful life of more than 1 year. (Section 
     10203(a))
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (11) Definition of contractor
       The Senate amendment amends title I of the Packers and 
     Stockyards Act to add the definition of a contractor. 
     Contractor is defined as a person that obtains livestock or 
     poultry from a contract producer in accordance with a 
     production contract. (Section 10203(a))
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (12) Definition of contract producer
       The Senate amendment amends title I of the Packers and 
     Stockyards Act to add the definition of a contract producer. 
     Contract producer is defined as a producer that produces 
     livestock or poultry under a production contract. (Section 
     10203(a))
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (13) Definition of investment requirement
       The Senate amendment amends title I of the Packers and 
     Stockyards Act to add the definition of an investment 
     requirement. Investment requirement is defined as an 
     investment that requires a contract producer to make a 
     capital investment that, but for the production contract, the 
     producer would not have made; or a representation by a 
     contractor that results in the contract producer making a 
     capital investment. (Section 10203(a))
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (14) Definition of production contract
       The Senate amendment amends title I of the Packers and 
     Stockyards Act to add the definition of a production 
     contract. A production contract is defined as a written 
     agreement that provides for the production of livestock or 
     poultry by a contract producer or the provision of a 
     management service relating to the production of livestock or 
     poultry by a contract producer. (Section 10203(a))
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (15) Right to cancel production contracts
       The Senate amendment amends title II of the Packers and 
     Stockyards Act to add a new section (section 208) governing 
     production contracts. It allows contract producers to cancel 
     a production contract within three business days after the 
     contract execution date. The contract shall disclose the 
     right of the producer to cancel a production contract and the 
     method by which the contract producer may cancel the 
     production contract, including the deadline for canceling the 
     production contract. (Section 10203(b))
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to provide that poultry growers and swine 
     production contract growers may cancel their contract up to 
     three business days after the date on which the contract was 
     signed. (Section 11005)
     (16) Production contracts requiring large capital investments
       The Senate amendment amends title II of the Packers and 
     Stockyards Act to add a new section (section 208) governing 
     production contracts that require large capital investments. 
     The provision allows contract producers who have made an 
     investment of $100,000 or more for purposes of securing the 
     production contract with a packer, live poultry dealer, or 
     swine contractor, to be given at least 90 days to correct an 
     alleged breach before a contractor can terminate a contract. 
     The contractor may terminate or cancel a production contract 
     without notice for voluntary abandonment by the contract 
     producer, conviction of the contract producer of an offense 
     or fraud or theft committed against the contractor, the 
     natural end of the production contract, or if the well-being 
     of the livestock or poultry would be in jeopardy once under 
     the care of the contract producer. If not later than 90 days, 
     a producer remedies the cause of breach under the contract, 
     the contractor may not terminate or cancel a production 
     contract. (Section 10203(b))
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
       In Section 11006 of the conference substitute, the Managers 
     require the Secretary to promulgate rules regarding what 
     constitutes a reasonable period of time for a live poultry 
     dealer or swine production contract grower to remedy a breach 
     of contract that could lead to termination of the poultry 
     growing arrangement or swine production contract.
     (17) Additional capital investments
       The Senate amendment amends title II of the Packers and 
     Stockyards Act to add a new section (section 208) to prohibit 
     a contractor from requiring additional investments of the 
     contract producer during the term of the contract unless the 
     additional investments are offset by reasonable additional 
     consideration, including compensation or a modification of 
     the terms of the contract; and the contract producer agrees 
     in writing that there is acceptable and satisfactory 
     consideration for the additional capital investment; or 
     without the additional capital investments the well-being of 
     the livestock or poultry subject to the contract are in 
     jeopardy. (Section 10203(b))
       The House bill contains no comparable provision.
       The Conference substitute provides that a poultry growing 
     arrangement or swine production contract contain a 
     conspicuous statement that additional large capital 
     investments may be required of the poultry grower or swine 
     production contract grower during the term of the poultry 
     growing arrangement or swine production contract. The 
     provision will apply to any poultry growing arrangement or 
     swine production contract entered into, amended, altered, 
     modified, renewed, or extended after the date of enactment of 
     this section. (Section 11005)
     (18) Choice of law, jurisdiction and venue
       The Senate amendment: (1) amends title II of the Packers 
     and Stockyards Act to add a new section (section 209) 
     governing the settlement of disputes arising under production 
     or marketing contracts governed by the Packers and Stockyards 
     Act, (2) provides that any provision of a livestock or 
     poultry contract shall be subject to the jurisdiction, venue 
     of the state in which the production occurs, and (3) 
     designates that the choice of law, jurisdiction and venue 
     requirements shall apply to any production or marketing 
     contract entered into, amended, altered, modified, renewed, 
     or extended after the date of enactment. (Section 10203)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to require that the forum for resolving any 
     dispute among the parties to a poultry growing arrangement or 
     swine production or marketing contract shall be the Federal 
     judicial district in which the principal part of the 
     performance takes place under the arrangement or contract. A 
     poultry growing arrangement or swine production or marketing 
     contract may specify which State's law is to apply to issues 
     governed by State law in any dispute arising out of the 
     arrangement or contract, except to the extent that doing so 
     is prohibited by the law of the State in which the principal 
     part of the performance takes place under the arrangement or 
     contract. (Section 11005)
     (19) Arbitration of livestock and poultry contracts
       The Senate amendment amends title II of the Packers and 
     Stockyards Act to add a new section (section 210) governing 
     the settlement of disputes arising under contracts governed 
     by the Packers and Stockyards Act. The Senate provision 
     provides that arbitration may be used to settle a controversy 
     arising from a livestock or poultry contract only if, after 
     the controversy arises, both parties consent in writing to 
     use arbitration to settle the controversy. (Section 10203(b))
       The House bill amended the Packers and Stockyards Act to 
     instruct the Secretary to promulgate regulations to establish 
     standards related to arbitration provisions in livestock and 
     poultry contracts. The provision directs the Secretary to 
     promulgate regulations addressing venue, costs, number and 
     appointment of arbitrators, and other elements of 
     arbitration, as necessary. The provision requires that any 
     person appointed as arbitrator disclose any circumstances 
     that could raise doubt as to impartiality.
       The Conference substitute provides a producer or grower the 
     ability to decline arbitration prior to entering the 
     contract. Any livestock or poultry contract that contains a 
     provision requiring the use of arbitration shall 
     conspicuously disclose the right of the contract producer or 
     grower, prior to entering the contract, to decline the 
     requirement to use arbitration to resolve any controversy 
     that may arise under the livestock or poultry contract. Any 
     contract producer or grower that declines arbitration prior 
     to entering the contract has the right to still seek the

[[Page H3657]]

     use of arbitration after a controversy arises, if both 
     parties consent in writing to use arbitration to settle the 
     controversy. The conference substitute provides that it shall 
     be an unlawful practice under the Packers and Stockyards Act 
     for a packer, swine contractor, or live poultry dealer to 
     violate this section including any action that has the intent 
     or effect of limiting the ability of a producer or grower to 
     freely make a choice to decline the use of arbitration. The 
     Secretary is also required to promulgate regulations to 
     establish criteria to be used in determining whether the 
     arbitration process provided in a contract provides a 
     meaningful opportunity for the grower or producer to 
     participate fully in the arbitration process. (Section 11005)
       When used in this section, the Managers intend that the 
     term ``contract'' means at a minimum, poultry growing 
     arrangements, livestock production, marketing and forward 
     contracts.
       The Managers expect that this section be implemented in 
     such a manner that producers and growers have a choice and 
     the ability to decline arbitration prior to entering the 
     contract. Additionally, it is the intent of the Managers that 
     the Secretary of Agriculture develop regulations which 
     provide producers and growers a reasonable period of time in 
     which to decide whether or not to decline arbitration prior 
     to entering the contract.
     (20) Right to discuss terms of contracts
       The Senate amendment amends section 10503 of the Farm 
     Security and Rural Investment Act of 2002 to add to the list 
     in current law. It would allow contract growers to also 
     discuss contract terms with business associates, neighbors, 
     and other producers. (Section 10204)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (21) Attorneys' fees
       The Senate amendment amends section 308 to allow producers 
     to attempt to recover the costs of the litigation, including 
     reasonable attorneys' fees, (in addition to damages) in an 
     action arising under the Packers and Stockyards Act. (Section 
     10205)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (22) Appointment of outside counsel
       The Senate amendment amends section 407 to provide the 
     Secretary with the authority to obtain the services of 
     attorneys who are not federal employees to aid in 
     investigations and civil cases. (Section 10206)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (23) Prohibition on packers owning, feeding, or controlling 
         livestock
       The Senate amendment amends section 202 of the Packers and 
     Stockyards Act (7 U.S.C. 192) to add to the list of 
     prohibited practices. It prohibits most major packers from 
     owning, feeding, or controlling livestock directly, or 
     through a subsidiary, or through an arrangement that gives 
     the packer operational, managerial, or supervisory control 
     over livestock or over the farming operation that produces 
     the livestock, to such an extent that the producer is no 
     longer materially participating in the management of the 
     livestock operation. The prohibition does not apply to: 
     packers who enter into arrangements within 14 days before 
     slaughter; cooperatives where the majority of ownership 
     interest is held by active cooperative members; packers not 
     required to report to USDA under section 212 of the 
     Agricultural Marketing Act of 1946 (7 U.S.C. 1635a); or a 
     packer that only owns one livestock processing plant. The 
     provision provides that a packer of swine would be in 
     violation of this provision if it owns, feeds or controls 
     swine later than 18 months after the enactment of this Act. 
     It provides that a packer of livestock, other than swine, 
     would be in violation of this provision if it owns, feeds or 
     controls livestock later than 180 days after enactment of 
     this Act. (Section 10207)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (24) Regulations
       The Senate amendment directs USDA to promulgate rules and 
     regulations, including regulations dealing with 
     discrimination against smaller volume producers. It provides 
     that regulations shall also be promulgated to require that 
     live poultry dealers provide written notice to poultry 
     growers if the live poultry dealer imposes an extended layout 
     period in excess of 30 days prior to removal of the previous 
     flock. (Section 10208)
       The House bill contains no comparable provision.
       The Conference substitute provides for the promulgation of 
     regulations under the Packers and Stockyards Act, 1921 not 
     later than two years after enactment, to establish criteria 
     that the Secretary of Agriculture will consider when 
     developing the regulations enumerated in this section 
     (Section 11006)
     (25) Sense of Congress regarding pseudorabies eradication 
         program
       The House bill expresses the sense of Congress that the 
     eradication of pseudorabies is a high priority that should be 
     carried out under the authorities of the Animal Health 
     Protection Act. (Section 11101)
       The Senate amendment is similar to House provision but 
     expands upon the House language to recognize the threat that 
     feral swine pose to not only swine, but also the entire 
     livestock industry. Senate language also details the 
     importance of pseudorabies surveillance funding to assist the 
     swine industry in monitoring, surveillance, and eradication 
     of pseudorabies, including the monitoring and surveillance of 
     other diseases effecting swine production and trade. (Section 
     10301)
       The Conference substitute adopts the House provision with 
     an amendment to recognize the threat that feral swine pose to 
     not only the domestic swine population but also the entire 
     livestock industry. (Section 11007)
     (26) Sense of Congress regarding the cattle fever tick 
         eradication program
       The House bill expresses the sense of Congress that 
     implementing a national strategic plan for the cattle fever 
     tick eradication program is a high priority in order 
     to identify and procure the necessary tools to prevent and 
     eradicate fever ticks in the United States. (Section 
     11106)
       The Senate amendment is the same as the House bill. 
     (Section 10302)
       The Conference substitute adopts the House provision. 
     (Section 11008)
     (27) National Sheep and Goat Industry Improvement Center
       The House bill amends section 375 of the Consolidated Farm 
     and Rural Development Act (7 U.S.C. 2008j by eliminating the 
     requirement that the National Sheep Industry Improvement 
     Center privatize its revolving fund. An authorization of 
     appropriations of $10 million is authorized for each of the 
     fiscal years 2008 through 2012. (Section 6015)
       The Senate amendment: (1) amends section 375 of the 
     Consolidated Farm and Rural Development Act (7 U.S.C. 2008j) 
     by eliminating the requirement that the National Sheep 
     Industry Improvement Center privatize its revolving fund, (2) 
     renames the Center as the National Sheep and Goat Industry 
     Improvement Center, and (3) provides for new mandatory 
     funding of $1,000,000 for FY2008, to be available until 
     expended, and authorizes $10,000,000 for each FY2008-2012. 
     (Section 10303)
       The Conference substitute adopts the Senate provision with 
     an amendment to delete the renaming of the Center. (Section 
     11009)
     (28) Trichinae certification program
       The Senate amendment amends section 10409 of the Animal 
     Health Protection Act, to direct the USDA to establish and 
     implement a trichinae certification program to certify farm 
     operations that are trichinae free to be eligible for export 
     or other market opportunities. It authorizes appropriations 
     of $1.25 million for each of fiscal years 2008 through 2012. 
     (Section 10304)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to require the Secretary of Agriculture to 
     provide an explanation should the final rule not be 
     promulgated within 90 days of enactment of this Act. Subject 
     to appropriation of funds, the Secretary is authorized to use 
     $6,200,000 to carry out the certification program (Section 
     11010)
     (29) Protection of information in the animal identification 
         program
       The Senate amendment directs the Secretary of Agriculture 
     to promulgate regulations consistent with the Freedom of 
     Information Act regarding the disclosure of information 
     submitted by farmers and ranchers who participate in the 
     national animal identification system. The regulations 
     promulgated are subject to public comment and should address 
     the protection of trade secrets and other proprietary and or 
     confidential business information. (Section 10305)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (30) Sense of Congress regarding the voluntary control 
         program for low pathogenic avian influenza
       The House bill expresses the sense of Congress that the 
     voluntary control program for low pathogenic avian influenza 
     is a critical component of the animal health protection 
     system, and that the Secretary should continue to provide 100 
     percent compensation for eligible costs to owners of poultry 
     and cooperating States. (Section 11105)
       The Senate amendment amends section 10407(d)(2) of the 
     Animal Health Protection Act. It defines ``eligible costs'' 
     for the purpose of low pathogenic avian influenza 
     indemnification as ``costs determined eligible for indemnity 
     under part 56 of title 9, Code of Federal Regulations, as in 
     effect on the date of enactment of this clause.'' The Senate 
     provision also provides that, subject to subparagraphs (B) 
     and (D), with respect to compensation provided to an owner of 
     an animal required to be destroyed under section 10407 of the 
     Animal Health Protection Act, the compensation to any owner 
     or contract grower of poultry participating in the voluntary 
     control program for low pathogenic avian influenza under the 
     National Poultry Improvement Plan, and payments to 
     cooperating State agencies, shall be made in an amount equal 
     to 100 percent of the eligible costs. (Section 10306)
       The Conference substitute provides that the Secretary 
     compensate industry participants and States that cooperate 
     with the

[[Page H3658]]

     Secretary in conducting livestock pest or disease detection, 
     control or eradication measures for 100 percent of eligible 
     costs. .
       It is the intent of the Managers that compensation under 
     this section go to any owner or contract grower of poultry 
     participating in the voluntary control program for low 
     pathogenic avian influenza under the National Poultry 
     Improvement Plan, and payments to cooperating state agencies 
     in an amount equal to 100 percent of the eligible costs. 
     Eligible costs are defined in accordance with part 56 of 
     title 9, Code of Federal Regulations, as in effect on the 
     date of enactment of this section. (Section 11011)


                        Chronic Wasting Disease

       The Managers expect the Secretary to promulgate, as soon as 
     practicable, a final rule to establish a herd certification 
     program to combat chronic wasting disease in farmed and 
     captive deer, elk and moose.8e Managers expect the rule to 
     include appropriate certification procedures to allow for the 
     interstate movement of participating deer, elk, and moose.
     (31) Study on bioenergy operations
       The Senate amendment directs USDA to submit to the House 
     and Senate Agriculture Committees a report describing the 
     potential economic issues (including potential costs) 
     associated with animal manure used in normal agricultural 
     operations and as a feedstock in bioenergy production. 
     (Section 10307)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to require the study to evaluate the extent to 
     which animal manure is utilized as fertilizer in 
     agricultural operations, the potential impact on consumers 
     and on agricultural operations resulting from limitations 
     being placed on the utilization of animal manure as a 
     fertilizer, and the effects on agriculture production 
     contributable to the increased competition for animal 
     manure use due to bioenergy production, including as a 
     feedstock or a replacement for fossil fuels. The study is 
     to be submitted to the respective House and Senate 
     Committees within 1 year of enactment of this Act. 
     (Section 11014)
     (32) Sense of the Senate on indemnification of livestock 
         producers
       The Senate amendment expresses the sense of the Senate that 
     the USDA should ``partner with the private insurance industry 
     to implement an approach for expediting the indemnification 
     of livestock producers in the case of catastrophic disease 
     outbreaks.'' (Section 10308)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (33) State-inspected meat and poultry
       The House bill requires the Secretary to submit a report to 
     Congress with the results of a review of each State meat and/
     or poultry inspection program in section 11103(a). Such 
     review will include a determination of the effectiveness of 
     the program, and an identification of the changes necessary 
     for the program to meet and enforce Federal inspection 
     standards. Subsections (b) and (c) of section 11103 amend the 
     Federal Meat Inspection Act (FMIA) and the Poultry Products 
     Inspection Act (PPIA), respectively, with regard to State 
     inspection programs. Authorizes the Secretary to approve a 
     State to ship product inspected under such State's inspection 
     program in interstate commerce, if such State inspection 
     program has implemented identical requirements to those 
     contained in the FMIA and/or PPIA and Federal regulations 
     under such statutes. The House bill provides requirements for 
     new State inspection programs, including that the Secretary 
     shall review all new State inspection programs within one 
     year after such State inspection program was approved. Upon 
     such review, the State inspection program must implement all 
     recommendations from the review. The provision provides that 
     a State inspection program will operate subject to a 
     cooperative agreement with the Secretary, and establishes the 
     terms of such cooperative agreement, including: State must 
     adopt requirements identical to Federal inspection 
     requirements; State mark of inspection will be deemed an 
     official mark; State will comply with labeling requirements 
     issued by the Secretary; Secretary will have authority to 
     detain and seize products under the State program; Secretary 
     will have access to facilities and records of State program; 
     and other provisions as determined by the Secretary. The 
     provision also provides that the Secretary shall reimburse a 
     State for not more than 50 percent of the State's costs for 
     the State meat inspection program, and not more than 60 
     percent of the State's costs for the State poultry inspection 
     program. The House bill requires the Secretary to take action 
     if the Secretary determines that a State inspection program 
     is not in compliance with the cooperative agreement, 
     including suspending or revoking the approval of the State 
     inspection program. Authorizes the Secretary to institute 
     Federal inspection at a State-inspected plant if the 
     Secretary determines that such State plant is not operating 
     in accordance with the cooperative agreement and requirements 
     herein. It also requires the Secretary to conduct annual 
     review of each State inspection program. It provides that no 
     State may prohibit or restrict the movement or sale of meat 
     or poultry products that have been inspected and passed in 
     accordance with this section. (Section 11103)
       The Senate amendment amends the Federal Meat Inspection Act 
     (21 U.S.C. 601 et seq.) and the Poultry Products Inspection 
     Act (21 U.S.C. 451 et seq.) create an option for state 
     inspected plants that are 25 employees or less to ship in 
     interstate commerce. This will not replace the existing state 
     inspection programs. Plants that are selected by the 
     Secretary to ship in interstate commerce using this option 
     must follow the Federal Meat Inspection Act and Poultry 
     Products Inspection Act in the same manner as expected of a 
     federally inspected establishment. Establishments that are 
     larger than 25 employees but less than 35 employees are 
     eligible for this option, but must transition to a federal 
     establishment three years after promulgation of the final 
     rule. Establishments that are currently under Federal 
     inspection are not eligible for this option. The Secretary 
     shall reimburse a state for costs related to the inspection 
     of selected establishments in the state at an amount not less 
     than 60 percent of eligible state costs. The Secretary may 
     also reimburse a state for 100 percent of the eligible state 
     costs if the selected establishment provides additional 
     verification microbiological testing in excess of typical 
     Federal establishments. The Secretary shall designate a 
     Federal employee as a state coordinator for each state agency 
     that has a state inspection program. The state coordinator 
     will be under direct supervision of the Secretary. The state 
     coordinator will visit selected establishments with a 
     frequency appropriate to ensure that these establishments are 
     operating in a manner consistent with the Federal Meat 
     Inspection Act and Poultry Products Inspection Act. The state 
     coordinator shall provide on a quarterly basis a report that 
     describes the status of each selected state establishment in 
     regard to compliance with the Federal Meat Inspection Act and 
     Poultry Products Inspection Act. If a state coordinator finds 
     any selected establishment in violation of the Federal Meat 
     Inspection Act or Poultry Products Inspection Act, the state 
     coordinator shall notify the Secretary of the violation and 
     deselect the selected establishment or suspend inspection. 
     The Senate provision requires USDA's Inspector General not 
     later than two years after the effective date of enactment, 
     and not less than every two years, conduct an audit of each 
     activity taken by the Secretary to determine compliance of 
     this program with the law. The Government Accountability 
     Office shall also conduct an audit of the implementation of 
     this program. It also authorizes the Secretary of Agriculture 
     to establish within the Food Safety Inspection Service (FSIS) 
     at USDA an inspection training division to coordinate 
     outreach, education, training and technical assistance of 
     very small and certain small establishments. The Senate 
     language allows the Secretary to provide grants to 
     appropriate state agencies to help establishments covered by 
     intrastate inspection under title III of the Federal Meat 
     Inspection Act to transition to the new program under title 
     V. (Section 11067)
       The Conference substitute adopts the Senate provision with 
     an amendment to strike section (c)(2) of the Senate amendment 
     regarding microbiological verification testing. Periodic 
     audits required of the Inspector General under Senate section 
     (e)(1) was changed from two years to not less often than 
     every three years. (Section 11015)
     (34) Food Safety Commission
       The Senate amendment establishes a Congressional Bipartisan 
     Food Safety Commission to review the food safety system of 
     the United States and to prepare a report that makes 
     recommendations on ways to: modernize the U.S. food safety 
     system; harmonize and update food safety statutes; improve 
     Federal, State, local, and interagency coordination of food 
     safety personnel, activities, budgets, and leadership; 
     allocate scarce resources according to risk; ensure that 
     regulations directives, guidance, and other standards and 
     requirements are based on best-available science and 
     technology; emphasize preventative strategies; provide to 
     Federal agencies funding mechanisms necessary to effectively 
     carry out food safety responsibilities; and to draft specific 
     statutory language that would implement recommendations of 
     the Commission. The Commission is required to review and 
     consider statutes, studies and reports as listed in 
     legislative language to understand the U.S. food safety 
     system. The initial meeting is required to take place 30 days 
     after the final Commission member is appointed. One year 
     after its initial meeting, the Commission is required to 
     publish a report on its findings, upon which the Commission 
     will dissolve. The members of the Commission will be 
     appointed 60 days after the enactment of this legislation. 
     Members are required to have training, education or 
     experience in food safety research, food safety law and 
     policy, or program design and implementation. Members must 
     consist of the Secretary of Agriculture (or a designee), the 
     Secretary of Health and Human Services (or a designee), one 
     Member of the House of Representatives, one Member of the 
     Senate, and 15 members that represent consumer organizations, 
     agricultural and livestock production, public health 
     professionals, State regulators, Federal employees, and the 
     livestock and food manufacturing and processing industry. Two 
     members of the Commission are appointed by the President, 13 
     are appointed by Congress. The Commission is required to hold 
     at least five stakeholder meetings, and can hold

[[Page H3659]]

     hearings and secure information from Federal agencies to 
     carry out its work. Commission members who are not officers 
     or employees of the Federal Government can be compensated for 
     serving on the Commission. Commission members are allowed 
     travel expenses while away from home or place of business. 
     The Chairperson of the Commission can appoint an executive 
     director and additional personnel to carry out the work of 
     the commission. Federal Government employees can be detailed 
     to the Commission without reimbursement. This provision 
     authorizes appropriations to carry out this section. (Section 
     11060)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (35) Action by President and Congress based on report
       The Senate amendment states: (1) the President is required 
     to review the report from the Congressional Bipartisan Food 
     Safety Commission established by the Senate amendment, and is 
     required to submit to Congress proposed legislation based on 
     the recommendations for statutory language contained in the 
     Commission's report and proposed legislation, and (2) 
     Congress may hold hearings and other activities for 
     consideration of the statutory language from the Commission 
     and the President. At also contains a Sense of the Senate 
     expressing: the need for additional resources and direction 
     for the food safety agencies of the Federal Government; the 
     need for additional food safety inspectors; the need for food 
     safety agreements between the United States and its trading 
     partners; the need for Congress to work on comprehensive food 
     safety legislation. (Section 11072)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (36) Food safety improvement
       The Senate amendment modifies the FMIA and PPIA to create a 
     reporting requirement for establishments regulated by USDA-
     FSIS to provide information to the Secretary upon determining 
     that a meat and/or poultry product it manufactured had 
     entered the stream of commerce and was reasonably likely to 
     cause serious adverse health events or death (the Class I 
     recall standard). Reports are not required if products are 
     under the control of the establishment and corrective actions 
     are taken to ensure that the product is no longer 
     adulterated, or if the product never enters into the stream 
     of commerce. Upon receipt of a report, the Secretary would be 
     able to use existing authority to request additional 
     information related to the incident, issue a public health 
     alert, and work with the establishment to notify relevant 
     members of the supply chain and pursue a corrective action 
     plan. The language encourages USDA to coordinate such efforts 
     with State and local public health officials. The provision: 
     (1) requires all establishments regulated by USDA-FSIS to 
     have in place a recall plan per USDA Directive 8080.1, 
     Revision 4, (2) requires all beef establishments regulated by 
     USDA-FSIS to have in place an E. coli reassessment as 
     described in 67 Federal Register 62325 (October 7, 2002), (3) 
     directs the Secretaries of Agriculture and HHS to promulgate 
     sanitary food transportation regulations, as described in 
     section 416(b) of the Federal Food, Drug, and Cosmetics Act, 
     and (4) directs USDA, HHS, and DOT to enter into a Memorandum 
     of Understanding related to sanitary food transportation. 
     (Section 11087)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to add a new section 12 to the Federal Meat 
     Inspection Act (21 U.S.C. 611) to require immediate 
     notification of the Secretary if an establishment believes or 
     has reason to believe that an adulterated or misbranded meat 
     or meat food product has entered commerce; add a new section 
     13 to the Federal Meat Inspection Act (21 U.S.C. 611) to 
     require establishments to prepare and maintain, in writing, a 
     recall plan and any reassessments of their hazard analysis 
     and critical control point plans, and to have those plans and 
     reassessments available to USDA inspectors. Identical changes 
     were made to the Poultry Products Inspection Act (21 U.S.C. 
     459) by modifying section 10 of the PPIA. (Section 11017)
     (37) Oversight of national aquatic animal health plan
       The Senate amendment establishes a General advisory 
     Committee for Oversight of National Aquatic Animal Health 
     (composed of not more than 20 members). The advisory 
     committee is to make recommendations to the Secretary on:
        the establishment and membership of appropriate 
     experts to efficiently implement the national aquatic animal 
     health plan developed by the National Aquatic Animal Health 
     Task Force
        disease and species-specific best management 
     practices related to activities carried out under the 
     national aquatic animal health plan developed by the National 
     Aquatic Animal Health Task Force
        the establishment and administration of an 
     indemnification fund (see below)
       The Senate amendment requires the Secretary to promulgate 
     regulations establishing the national aquatic animal health 
     improvement program, in accordance with the Animal Health 
     Protection Act. The provision allows for participation by 
     State and Tribal Governments and the Private Sector who upon 
     election to participate will enter into agreements with the 
     Secretary to assume responsibility for a portion of the non-
     Federal share of the costs of carrying out the national 
     aquatic animal health plan developed by the National Aquatic 
     Animal Health Task Force. It establishes an indemnification 
     fund to compensate aquatic farmers for specified purposes. It 
     also requires a report not later than 2 years after the date 
     of enactment to describe:
        activities carried out under the national aquatic 
     animal health plan developed by the National Aquatic Animal 
     Health Task Force
        activities carried out by the advisory committee
        recommendations for subsequent years' funding
       The Senate amendment authorizes appropriations of 
     $15,000,000 for fiscal years 2008 and 2009, of which not less 
     than 50 percent is to be deposed into the indemnification 
     fund and not more than 50 percent shall be used to carry out 
     the national aquatic animal health plan developed by the 
     National Aquatic Animal Health Task Force. (Section 11086)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment. (Section 11013)
       The Managers are conscious of the need for an aquatic 
     animal health plan. The United States is facing a seafood 
     trade deficit of over $9 billion, and faces loss of export 
     markets in Europe, partially due to the lack of a coordinated 
     industry health program. Without an effective control program 
     in place, the United States faces difficulty in safeguarding 
     against pest and disease incursions. The Managers therefore 
     encourage the Animal and Plant Health Inspection Service to 
     implement a National Aquatic Animal Health Plan (NAAHP) 
     within 18 months of enactment of this Act. It is further 
     expected that NAAHP should be based on the existing plan 
     developed by the National Aquatic Animal Health Task Force, 
     and to be refined with extensive consultation of cooperators, 
     including state agencies, tribal governments, industry, and 
     fish health professionals.
       The Managers note the potential benefits of an advisory 
     board to ensure the success of such a Plan; such a board 
     should have a balanced representation of state and tribal 
     governments and commercial aquaculture interests. The 
     Managers likewise recognize the potential benefits of an 
     appropriate number of representative expert committees. Such 
     expert committees would be charged with recommending disease- 
     and species- specific plans, taking into account any existing 
     aquaculture-related projects undertaken under the aegis of 
     the Plan as of the date of enactment of this legislation.

                       TITLE XII--CROP INSURANCE

     (1) Premiums and reinsurance requirements
       (a) Premium Adjustments (Section 508(a) of the Federal Crop 
           Insurance Act)
       The House bill: prohibits paying premiums, offering rebates 
     for premiums, or making other inducements to purchase crop 
     insurance or after crop insurance has been purchased, except 
     for administrative fees pursuant to section 508(b)(5)(B) of 
     the Federal Crop Insurance Act or performance-based discounts 
     under section 508(d)(3) of the same Act. (Section 11001(a))
       The Conference substitute adopts the House provision, with 
     the following modification--the rebating rules are modified 
     so as to permit certain cooperatives that were authorized to 
     offer payments in accordance with section (b)(5)(B) as in 
     effect the day before the date of enactment by the Risk 
     Management Agency (RMA) in the 2005, 2006, and 2007 
     reinsurance years to continue to do so (Section 12004).
       The Managers' intent in including clause (9)(B)(iii) is to 
     ``grandfather in'' entities that have previously been 
     approved by the Federal Crop Insurance Corporation 
     (Corporation) to make payments in accordance with subsection 
     (b)(5)(B) as in effect on the day before the date of 
     enactment. These entities must provide payments or patronage 
     dividends in a consistent manner with the payment plan 
     previously approved in accordance with such subsection for 
     the entity by the Corporation. The Managers expect the 
     Corporation to notify, in writing and on an annual basis, 
     entities covered under the grandfather clause as well as 
     508(b)(5)(B) as amended of their ability to provide such 
     payments and the scope of providing such payments. The 
     Managers expect the Corporation to exercise strict oversight 
     to ensure that these entities are operating consistent with 
     federal and state law and the payment plan submitted and 
     approved. The Managers understand through discussions with 
     RMA that the parties covered by the grandfather clause 
     represent the universe of parties engaged in this activity. 
     The Managers also understand from RMA that, while two 
     submissions are still under review, no further requests are 
     pending or expected from additional parties seeking to engage 
     in the activities of those parties covered by the grandfather 
     clause.
       (b) Administrative Fee (Section 508(b) of the Federal Crop 
           Insurance Act)
       Section 11001(b) of the House bill amends the Federal Crop 
     Insurance Act to limit the ability of an insurance provider, 
     cooperative association, or trade association to pay for only 
     catastrophic risk protection administrative fees on behalf of 
     a producer. The Senate amendment clarifies language that 
     permits cooperatives or trade associations to

[[Page H3660]]

     pay premiums on behalf of farmer-members to make it clear 
     that the provision applies only to fees for catastrophic 
     coverage. It also strikes clause (ii) which requires that 
     licensing fees in connection with the issuance of 
     catastrophic risk protection or additional coverage to be 
     paid to cooperatives or trade associations from insurance 
     providers shall be subject to laws regarding rebates in the 
     various states in which the fee or other payment is made. 
     (Section 1905)
       The Conference substitute adopts the Senate provision 
     (Section 12006).
       (c) Time for Payment (Section 508(d) of the Federal Crop 
           Insurance Act)
       Section 11001(c) of the House bill requires that beginning 
     with the 2012 reinsurance year, the Corporation must 
     establish August 1 as the billing date for crop insurance 
     premiums.
       Paragraph (1) of section 1906 of the Senate amendment 
     establishes the date when policyholder premiums must be paid, 
     beginning in the 2012 reinsurance year, to no later than 
     September 30. (Section 1906)
       The Conference substitute adopts the House provision, with 
     a date change to August 15. (Section 12007)
       (d) Reimbursement rate (Section 508(k) of the Federal Crop 
           Insurance Act)
       Paragraph (1) of Section 11001(d) of the House bill amends 
     section 508(k)(4)(A) of the Federal Crop Insurance Act to 
     provide that beginning with the 2009 reinsurance year, the 
     Corporation shall reimburse insurance providers and agents 
     for administrative and operating (A&O) expenses at a rate 2.9 
     percentage points below the rates in effect on the day of 
     enactment of this Act.
       Section 1912 of the Senate amendment reduces the 
     reimbursement rate for existing plans of insurance by 2 
     percentage points below the rates in effect at the time of 
     enactment of this Act, except that the reduction shall not be 
     applied in any reinsurance year for a state in which the loss 
     ratio exceeds 1.2, beginning in the 2009 reinsurance year. It 
     also reduces the reimbursement rate for area policies (such 
     as Group Risk Plan (GRP) and Group Risk Income Protection 
     (GRIP)) to 17 percent of premiums because delivery costs are 
     not as high relative to delivery costs for other products. 
     (Section 1912)
       The Conference substitute adopts the Senate provision, with 
     the following modification--it provides for a 2.3 percentage 
     point reduction from current levels for the overall A&O 
     reduction, with a snapback that restores one half of the 
     reduction to states in years in which their overall loss 
     ratio exceeds 1.2. In addition, it includes the reduction to 
     the reimbursement rate for area policies from the Senate 
     provision, with the rate lowered to 12 percent of total 
     premiums. (Section 12016)
       The Managers intend for the limitation in paragraph (F) to 
     apply only to plans of insurance that are established and 
     widely available at the time of enactment, and not apply to 
     area plans such as the Pasture, Rangeland, and Forage program 
     that have higher delivery costs than policies such as GRIP 
     and GRP.
       (e) Renegotiation of the Standard Reinsurance Agreement 
           (Section 508(k) of the Federal Crop Insurance Act)
       Paragraph (2) of Section 11001(d) of the House bill 
     provides that during the year following the reinsurance year 
     ending June 30, 2012, the Corporation may renegotiate the 
     financial terms of the Standard Reinsurance Agreement (SRA), 
     and subsequently conduct such renegotiations once during each 
     period of five reinsurance years thereafter and stipulates 
     that changes in Federal law that require the Corporation to 
     revise the financial terms of the SRA will not be considered 
     to be a renegotiation of the agreement. It also provides that 
     approved insurance providers may confer with each other 
     during the renegotiation process.
       The Senate amendment allows the Federal Crop Insurance 
     Corporation to renegotiate the SRA, which contains the 
     contractual obligations and financial terms of the 
     relationship between RMA and the crop insurance companies, 
     every five years, the first occurring not sooner than the end 
     of the 2012 reinsurance year. It provides an exception to 
     allow the SRA to be renegotiated more frequently if necessary 
     to address unexpected adverse circumstances experienced by 
     the companies. The Secretary is required to notify the 
     relevant Congressional Committees before invoking this 
     exception. This section also allows crop insurance companies 
     to confer with each other in the course of the renegotiation 
     process, as well as collectively with RMA. (Section 1913)
       The Conference substitute adopts the Senate provision with 
     modifications, incorporating the House language on treatment 
     of changes in the SRA due to changes in Federal law. It moves 
     up the time when the next SRA can be negotiated, to be 
     effective for the 2011 reinsurance year. It also requires the 
     RMA to consider certain alternative mechanisms for 
     compensating companies for delivery expenses, when 
     negotiating the SRA. (Section 12017)
       (f) Time for Reimbursement (Section 508(k) of the Federal 
           Crop Insurance Act)
       Section 11001(e) of the House bill requires that beginning 
     with the 2012 reinsurance year, the Corporation make 
     administrative and operating expense payments during October 
     2012, and every October thereafter.
       Paragraph (2) of section 1906 of the Senate amendment 
     establishes the date when the Federal Crop Insurance 
     Corporation makes payments to crop insurance companies to 
     reimburse them for administrative and operating expenses, 
     beginning in the 2012 reinsurance year, allowing payments to 
     be made as soon as practicable after October 1 of the year 
     following the reinsurance year, but not later than October 
     30.
       The Conference substitute adopts the Senate provision. 
     (Section 12015)
       (g) Premium Reduction Authority (Section 508(e) of the 
           Federal Crop Insurance Act)
       Paragraph (1) of Section 11001(f) of the House bill strikes 
     the authority for the Premium Reduction Plan (PRP) and the 
     Premium Rate Reduction Pilot. The Senate amendment repeals 
     the authority for the Premium Reduction Plan (PRP) and 
     requires RMA to commission an independent study of the 
     feasibility of offering a discount to farmers in the Federal 
     crop insurance program. This study is to be completed within 
     18 months of enactment of the farm bill. (Section 1908)
       The Conference substitute adopts the House provision, but 
     drops the elimination of the Premium Rate Reduction Pilot 
     language. (Section 12010)
       The Managers repeal the authority for the Premium Reduction 
     Plan. The Managers believe it would serve a useful purpose 
     for the Risk Management Agency to evaluate the process that 
     led to the promulgation of the regulations under which PRP 
     has been operated, to try to determine where mistakes might 
     have been made, in either concept or execution.
     (2) Catastrophic risk protection administrative fee
       The House bill amends section 508(b)(5)(A) of the Federal 
     Crop Insurance Act to provide for a $200 catastrophic risk 
     protection administrative fee. (Section 11002)
       The Senate amendment increases the fee for catastrophic 
     risk protection coverage from its current $100 per crop per 
     county to $200 per crop per county, and strikes language 
     allowing a higher fee to be charged as a function of imputed 
     premium. (Section 1905(a))
       The Conference substitute adopts the Senate provision, with 
     modifications--it increases the fee to $300 per crop per 
     county, and repeals an annual appropriations rider barring 
     charges fees based on imputed premium levels. (Section 12006)
     (3) Funding for reimbursement, contracting, risk management 
         education, and information technology
       The House bill amends section 516 of the Federal Crop 
     Insurance Act to provide that the Corporation use not more 
     than $30 million in each fiscal year for costs associated 
     with: research and development and partnerships for risk 
     management in section 522 of such Act; education and 
     information programs in section 524 of such Act; and 
     information technology. Further, it provides that the 
     Corporation use no more than $5 million to carry out 
     contracting for research and development for underserved 
     states, pursuant to section 522(c)(1)(A) of such Act. It also 
     prohibits the Corporation from conducting research and 
     development for any new policy for a commodity under this 
     title. (Section 11003)
       The Senate amendment reduces mandatory funding available to 
     reimburse research and development of new crop insurance 
     products from its current $15 million annually to $7.5 
     million annually in paragraph (1). Paragraph (2) reduces 
     mandatory funding availability for contracting and 
     partnerships from its current $25 million annually to $12.5 
     million annually. Paragraph (3) permits the Corporation to 
     use up to $5 million of otherwise unused funds available for 
     reimbursement, contracting, or partnership payments to 
     strengthen crop insurance compliance oversight activities, 
     including information technology and data mining. (Section 
     1919)
       The Conference substitute adopts the Senate provision. 
     (Section 12024)
     (4) Reimbursement of research and development costs related 
         to new crop insurance products
       The House bill authorizes the Corporation to reimburse an 
     applicant for research and development costs related to a 
     policy that is submitted pursuant to a Federal Crop Insurance 
     Corporation (FCIC) Reimbursement Grant or is submitted to the 
     FCIC Board and approved in section 11004(a).
       Section 11004(b) authorizes the Corporation to provide FCIC 
     Reimbursement Grants to persons proposing to prepare crop 
     insurance policies for submission to the Board, and who have 
     applied and been approved for such grants. The provision 
     stipulates the required materials for a grant application, 
     including: a concept paper; an explanation of the need for 
     the product, including the product's marketability, the 
     projected impact of the product, and that no similar product 
     is offered by the private sector; and an identification of 
     the risks the product will cover and that the risks are 
     insurable under the Federal Crop Insurance Act. Approval of a 
     grant is by majority vote of the Board, and the Board shall 
     approve an application only if: the proposal establishes the 
     need for the policy; the applicant has the qualifications to 
     successfully complete the project; the proposal can 
     reasonably be expected to be actuarially appropriate; the 
     Board has sufficient funding; and the proposed budget and 
     timeline are reasonable.
       The provision requires payment for work performed under 
     this section to be based on rates determined by the 
     Corporation. Either the Corporation or applicant may 
     terminate any grant for just cause. (Section 11004)

[[Page H3661]]

       The Senate amendment authorizes the reimbursement of 
     development costs related to a policy through a Federal Crop 
     Insurance Reimbursement Grant or is submitted to the FCIC 
     Board and is approved in subsection (a). Subsection (b) 
     provides an alternative process for policy development, by 
     establishing a grant-making mechanism (called FCIC 
     Reimbursement Grants). This mechanism permits eligible 
     applicants to submit a concept proposal, to be reviewed by 
     crop insurance experts, for consideration by the Board of the 
     Federal Crop Insurance Corporation. If the grant request is 
     approved, the development work is ensured of funding and when 
     completed, submitted to the Board for approval. The Board can 
     require an interim feasibility study before allowing 
     development work to proceed. Rates for work performed shall 
     be based on rates determined by the Corporation for products 
     submitted under section 508(h) or research contracted for 
     under section 522(c). The grant can be terminated at any time 
     for just cause. Subsection (c) eliminates language in section 
     523(b)(10) of the FCIA that provides an exception for 
     research and development costs in livestock program funding 
     caps. (Section 1918)
       The Conference substitute adopts the House provision, with 
     significant modifications. The provision as adopted provides 
     an opportunity for applicants with approved concept papers to 
     receive up to 50 percent of their estimated expenses in 
     advance. If their proposed crop insurance product is 
     subsequently approved by the Board, they then are reimbursed 
     for the remainder of their expenses. If they submit a 
     proposed product to the Board and it is rejected, they 
     receive no additional funds but are not required to repay the 
     advance. Only if they fail to submit a completed submission 
     without just cause would they be required to repay the 
     advance. Applicants with poor track records on submissions 
     may be prohibited from receiving advance payments, but would 
     still be eligible to develop crop insurance products under 
     508(h) procedures in current law. (Section 12022)
       The Managers intend for the Corporation to develop the 
     procedures to implement this section as soon as practicable 
     so that the Corporation may start accepting applications for 
     advanced reimbursement of research and development costs 180 
     days after this section's enactment. Since under current law, 
     crop insurance products approved under 508(h) procedures are 
     eligible, at the Corporation's discretion under appropriate 
     circumstances, for reimbursement at U.S. General Services 
     Administration competitive rates, the Managers intend for 
     reimbursements made under this section to be equally eligible 
     for such rates, still subject to the Corporation's 
     discretion.
     (5) Research and development contract for organic production 
         coverage improvements
       The House bill mandates that the Corporation enter into one 
     or more contracts for the development of improvements in 
     Federal crop insurance policies for organically raised crops. 
     Any such contracts must review the underwriting, risk, and 
     loss experience of organic crops in order for the Corporation 
     to determine variation in loss history between organic and 
     non-organic production. The Corporation shall eliminate or 
     reduce the premium surcharge for coverage of organic crops, 
     unless the Corporation's review documents significant, 
     consistent, and systemic variations in loss history between 
     organic and non-organic crops. The House provision provides 
     that a contract include the development of a procedure to 
     offer producers of organic crops an additional price election 
     reflecting actual retail or wholesale prices received by 
     organic producers, and requires that the Corporation 
     submit an annual report to Congress on the progress made 
     in developing and improving Federal crop insurance for 
     organic crops. (Section 11005)
       The Senate amendment adds a new paragraph (12) which 
     requires the Federal Crop Insurance Corporation to offer to 
     enter into one or more contracts to improve crop insurance 
     coverage for organic crops. New paragraph (10) requires the 
     Federal Crop Insurance Corporation to offer to enter into one 
     or more contracts to develop policies to insure dedicated 
     energy crops such as switchgrass. New paragraph (11) requires 
     the Federal Crop Insurance Corporation to offer to enter into 
     one or more contracts to develop policies to insure 
     aquaculture operations. New paragraph (13) requires the 
     Federal Crop Insurance Corporation to offer to enter into a 
     contract to study how to incorporate the use of skiprow 
     cropping practices to grow corn and sorghum in the Central 
     Great Plains into existing policies and plans of insurance 
     offered in the Federal crop insurance program. (Section 1917)
       Section 1907 prohibits the Federal Crop Insurance 
     Corporation from charging a surcharge on premiums paid to 
     insure organic crops. It allows surcharges to be required 
     only when consistent evidence of greater loss variability is 
     validated on a crop by crop basis. (Section 1907)
       The Conference substitute adopts the House provision, with 
     the inclusion of Senate provisions requiring contracts 
     regarding dedicated energy crops, aquaculture, skiprow 
     cropping practices, and the following additions: the 
     Corporation is also required to offer to enter into contracts 
     for developing a poultry policy, a policy for bee-keepers, 
     and a study on what modifications might be needed for 
     Adjusted Gross Revenue policies to make them more useful for 
     beginning farmers. In the subsection addressing development 
     of aquaculture policies, more details are provided about what 
     species should be considered. (Section 12023)
       The Managers are concerned that producers in the Central 
     Great Plains seeking to utilize skip row planting patterns 
     are being offered crop insurance coverage for less than 100% 
     of the planted fields despite ongoing research showing that 
     skip row planting results in no loss in overall yields. In 
     including this provision in paragraph (16), the Managers are 
     seeking to have RMA review existing and soon-to-be completed 
     skip row research and production histories, develop crop 
     insurance rules and policies that adequately reflect this 
     research, and thus better capture the actual productive 
     capability of skip row planting patterns.
       The Managers are also concerned how recent natural 
     disasters in the Southeastern United States have revealed 
     that existing crop insurance products and programs are not 
     well-tailored to the unique horticultural practices of the 
     nursery industry across the country. The Managers urge the 
     Risk Management Agency (RMA) to work with the nursery 
     industry on crop insurance policies specifically designed for 
     nursery growers and encourage the Administrator of RMA, under 
     his existing authority, to consider initiating a pilot 
     program or programs with nursery growers in affected regions 
     to ensure that crop insurance programs avoid in the future 
     the issues that arose in the aftermath of these natural 
     disasters.
     (6) Targeting risk management education for beginning farmers 
         and ranchers and certain other farmers and ranchers
       The House bill requires the Secretary to include a special 
     emphasis on risk management strategies and education and 
     outreach to beginning farmers and ranchers, immigrant farmers 
     and ranchers attempting to become established producers in 
     the United States, socially disadvantaged farmers and 
     ranchers, farmers and ranchers who are preparing to retire 
     and are trying to help new farmers and ranchers get started, 
     and farmers and ranchers who are converting production and 
     marketing systems to new markets. (Section 11006)
       The Senate amendment requires the Secretary to place 
     special emphasis in utilizing funds available to address the 
     needs of farmers in underserved states to assist in risk 
     management strategies of beginning farmers and ranchers, 
     immigrant farmers and ranchers, socially disadvantaged 
     farmers and ranchers, farmers and ranchers preparing to 
     retire and engaged in transition strategies to help beginning 
     farmers get established, and established farmers and ranchers 
     seeking to shift practices and marketing to pursue new 
     markets. (Section 1922)
       The Conference substitute adopts the Senate provision, with 
     one minor language change. (Section 12026)
     (7) Crop insurance ineligibility related to crop production 
         on noncropland
       The House bill defines ``noncropland'' as native grassland 
     and pasture the Secretary determines has never been used for 
     crop production. It also provides that noncropland acreage 
     planted with an agricultural commodity for which insurance is 
     available under this title is not eligible for crop insurance 
     under this title for the first four years of planting. In the 
     fifth year of planting, the producer may purchase crop 
     insurance for the commodity. The yield for such insurance 
     shall be determined by using actual production history for 
     the farm and, for years without actual production history, 
     using the average actual production history for the commodity 
     in the county. (Section 11007)
       The Senate amendment denies crop insurance and noninsured 
     crop disaster assistance program benefits (NAP) on lands 
     converted from native sod after passage of this farm bill. In 
     section 2608(a)(1), native sod is defined as land on which 
     the plant cover is composed principally of native grasses, 
     grasslike plants, forbs, or shrubs suitable for grazing and 
     browsing, and which has never been used for production of an 
     agricultural commodity. Section 2608(a)(2)(B) establishes de 
     minimus exception of 5 acres. Section 2608(c) directs the 
     Secretary to provide a report to Congress on the extent of 
     conversion of noncropland to cropland since 1995 within 180 
     days of the passage of the Farm Bill, and to provide annual 
     updates by January 1st of each year. (Section 2608)
       The Conference substitute adopts the House bill with 
     modification. At the election of the Governor of a State in 
     the Prairie Pothole Region National Priority Area, native sod 
     acreage that is tilled for the production of an annual crop 
     will be ineligible for crop insurance and noninsured crop 
     disaster assistance benefits during the first 5 crop years of 
     planting. Native sod is defined as land on which the plant 
     cover is composed principally of native grasses, grasslike 
     plants, forbs, or shrubs suitable for grazing and browsing; 
     and that has not been tilled for the production of an annual 
     crop at the date of enactment. The Secretary may exempt 
     conversions of 5 acres or less from the terms of the 
     provision. (Section 12020).
       The Managers adopted this modification in recognition of 
     the significant interest in conserving native tall-, mixed-, 
     and short-grass prairie in the Prairie Pothole Region (PPR). 
     Several recent reports have analyzed grassland conversion and 
     potential drivers in certain areas of the PPR over the past 
     two decades. The analysis by the Government Accountability 
     Office (GAO) found that crop

[[Page H3662]]

     insurance program payments may serve as an incentive for 
     conversion, but that many other factors such as crop prices 
     and new farming technologies also play a role in producer 
     decisions. GAO also identified a general lack of current and 
     comprehensive data on land conversions, precluding reliable 
     trend analysis. Correspondingly, GAO's final recommendations 
     were that USDA should: (1) track annual conversion and 
     provide current data to policymakers, and (2) conduct a study 
     of the relationship between farm program payments and land 
     conversion and report findings to Congress.
       The Managers determined that existing information is 
     insufficient to apply a broad-sweeping national policy to 
     address what may be a localized concern. However, where 
     states determine that grassland conversion is a present 
     threat and want to create disincentives for conversion, the 
     Managers are making a ``sodsaver'' program option available 
     at the request of the State. The Managers further expect USDA 
     to address the GAO recommendations order to inform future 
     policy decisions on this issue. In addition, the Managers 
     reauthorized a number of conservation programs, such as the 
     grassland reserve program and the environmental quality 
     incentives program, which provide incentives for grassland 
     protection and conservation. The Managers encourage States to 
     leverage these programs to provide further incentives to 
     their grassland protection objectives.
       The Managers intend for the Secretary to undertake a study 
     on the influence of the crop insurance program on the 
     conversion of native sod to crop production. The study should 
     consider as part of the review, added land provisions, yield 
     plugs, written agreements, and county T yields. The study 
     should also consider the sufficiency of grazing coverage 
     available through crop insurance or the non-insurance 
     assistance program as compared to the economics of crops 
     planted on converted grazing land. The managers expect the 
     Secretary to address specific actions that may be taken by 
     the Department or recommended to Congress to mitigate any 
     identified conversion influences of the crop insurance 
     program. The managers expect the Secretary to present the 
     results of the study to the Senate Committee on Agriculture, 
     Nutrition, and Forestry and the House Committee on 
     Agriculture in early 2009.
     (8) Funds for data mining
       The House bill authorizes the Corporation to use not more 
     than $11 million during fiscal year 2008, and not more than 
     $7 million during fiscal year 2009 and each subsequent fiscal 
     year, for crop insurance program compliance and integrity, 
     including data mining, for a total of $73 million in outlays 
     over ten years. (Section 11008)
       The Senate amendment allows RMA to charge a fee to crop 
     insurance companies for access to company-relevant results of 
     data-mining analysis, and would require that these funds are 
     used for improvements in the crop insurance data mining 
     system. If RMA were to require companies to access the data-
     mining results for purposes of compliance, including quality 
     assurance requirements under the terms of the SRA, they could 
     not be charged a fee under those circumstances. (Section 
     1915)
       The Conference substitute adopts the House provision, 
     except it provides a total of $36 million over ten years for 
     this purpose, and it requires periodic competition for these 
     funds. A new subsection provides $60 million for upgrading 
     computer technology at the Risk Management Agency. (Section 
     12021)
     (9) Noninsured crop assistance program
       The House bill amends the Agricultural Market Transition 
     Act to provide that service fees producers must pay for the 
     Noninsured Crop Insurance Program shall be $200 per crop per 
     county; or $600 per producer per county, with a limit of 
     $1,800 per producer. (Section 11009)
       The Senate amendment doubles the service fee charged for 
     participation in the NAP program from its current $100 to 
     $200, or $600 per producer per county, with a limit of $1,500 
     per producer. (Section 1926)
       The Senate amendment also clarifies that losses from 
     aquacultural activities resulting from drought should be 
     indemnified if the farmer has NAP coverage for that 
     production. (Section 1925)
       The conference substitute adopts the Senate language from 
     Section 1925, changing the new fee to $250 per crop per 
     county, or $750 per producer per county, with a limit of 
     $1,875 per producer. (Section 12028).
       The Conference substitute also adopts the Senate provision 
     on eligibility for indemnification for drought losses for 
     aquaculture. (Section 12027)
     (10) Change in due date for corporation payments for 
         underwriting gains
       The House bill directs the Corporation to make payments for 
     underwriting gains on October 1, 2012, and for each 
     subsequent reinsurance year, on October 1 of the next 
     calendar year, beginning with the 2011 reinsurance year. 
     (Section 11010)
       The Senate amendment establishes the date as October 1 that 
     the Federal Crop Insurance Corporation makes payments for 
     underwriting gains to crop insurance companies, beginning in 
     the 2011 reinsurance year. (Section 1914)
       The Conference substitute adopts the Senate provision. 
     (Section 12018)
     (11) Sesame Insurance Pilot Program
       The House bill requires the Secretary to establish a pilot 
     program under which sesame producers in the State of Texas 
     may obtain crop insurance. Under the pilot program, producers 
     obtaining the insurance shall pay premiums and administrative 
     fees. (Section 11011)
       The Senate amendment is the same as the House bill. 
     (Section 1921)
       The Conference substitute adopts the Senate provision with 
     an amendment to strike the end date, and adds the camelina 
     pilot program from Senate Section 1920 and adds a new pilot 
     program for grass seed. (Section 12025)
     (12) National Drought Council and drought preparedness plans
       The House bill establishes a National Drought Council 
     within the office of the Secretary of Agriculture that will 
     develop a National Drought Policy Action Plan for integrating 
     and coordinating drought activities of the Federal government 
     and States, including drought preparedness, mitigation, risk 
     management and emergency relief. Additional Council duties 
     include reviewing and evaluating existing drought programs, 
     making recommendations to the President and Congress, and 
     developing public awareness activities on drought.
       The House bill establishes the Drought Assistance Fund 
     within the Department of Agriculture to, in part, pay the 
     costs of providing technical and financial assistance to 
     States, Indian Tribes, local governments and other groups for 
     the development and implementation of drought preparedness 
     plans, and for the cost of mitigating the risk and impact of 
     droughts. The language provides requirements for the 
     guidelines associated with the distribution of funds from the 
     Drought Assistance Fund, including requiring that States and/
     or Indian tribes developing plans for interstate watersheds 
     coordinate with other States and/or Indian tribes in the 
     development of said plans.
       The House bill requires the Secretary, with concurrence of 
     the Council, to develop guidelines for administering a 
     national program to provide assistance to States, Indian 
     tribes, local governments and others for the development, 
     maintenance, and implementation of drought preparedness 
     plans. The provision requires the Secretary to develop 
     Federal drought preparedness plans, which will integrate with 
     drought plans of State, tribal, local government, and others. 
     The provision stipulates the elements for such drought 
     preparedness plans.
       The House bill authorizes appropriations of $2 million for 
     fiscal year 2008 and each of the subsequent seven fiscal 
     years for the Council; authorizes the appropriation of such 
     sums as necessary to carry out the Drought Assistance Fund. 
     (Section 11012)
       The Senate amendment contains no comparable provision.
       The Conference substitute drops the House provision.
     (13) Payment of portion of premium for area revenue plans
       The House bill establishes the premium subsidy amount for 
     area revenue insurance plans, based on (1) the percentage of 
     the recorded county yield indemnified, and (2) the sum of a 
     percentage of the premium established for additional 
     catastrophic risk protection and the amount determined to 
     cover operating and administrative expenses for additional 
     catastrophic risk protection.
       The House bill establishes the premium subsidy amount for 
     area yield insurance plans, based on (1) the percentage of 
     the recorded country yield indemnified, and (2) the sum of a 
     percentage of premium established for additional catastrophic 
     risk protection and the amount determined to cover operating 
     and administrative expenses for additional catastrophic risk 
     protection. (Section 11013)
       The Senate amendment contains no comparable provision.
       The Conference substitute adopts the House provision. 
     (Section 12012)
     (14) Share of risk
       The House bill amends the Federal Crop Insurance Act to 
     require that companies that are being reinsured by the 
     Corporation share the risk of loss, such that the 
     underwriting gain or loss and the associated premium and 
     losses ceded to the Corporation under any reinsurance 
     agreement be not less than 12.5 percent. The provision 
     further requires the Corporation to pay a ceding commission 
     to such companies of 2 percent of the premium used to define 
     the loss ratio for the approved insurance provider's book of 
     business. (Section 11014)
       The Senate amendment contains no comparable provision.
       The Conference substitute drops the House provision.
     (15) Livestock assistance
       The House bill stipulates that the purchase of a Non-
     insured Assistance Program policy is not a requirement to 
     receive any Federal livestock disaster assistance. (Section 
     11015)
       The Senate amendment contains no comparable provision.
       The Conference substitute drops the House provision.
     (16) Determination of certain sweet potato production
       The House bill excludes Risk Management Agency Pilot 
     Program data for determining

[[Page H3663]]

     the 2005-2006 Farm Service Agency Crop Disaster Program for 
     sweet potatoes. (Section 11016)
       The Senate amendment amends section 9001 of the U.S. Troop 
     Readiness, Veterans Care, Katrina Recovery, and Iraq 
     Accountability Appropriations Act of 2007 (P.L. 100-28, 121 
     Stat. 211). It prohibits the Farm Service Agency from 
     utilizing yield data collected from a sweet potato crop 
     insurance pilot program to determine losses for the crop 
     disaster assistance program recently enacted for the 2005 and 
     2006 crop years. If sign-up for that program is completed 
     before the 2007 farm bill is enacted, then the sign-up period 
     would have to be re-opened for producers of sweet potatoes. 
     (Section 1927)
       The Conference substitute adopts the Senate provision. 
     (Section 12029)
     (16A) Report on funds; rate of Federal crop insurance
       The House bill gives the Secretary of the Interior the 
     authority to further cuts the expense reimbursement rate for 
     crop insurance companies if the actual revenue from offshore 
     oil leases fails to meet projections beginning in 2012. 
     (Section 13011)
       The Senate amendment contains no comparable provision.
       The Conference substitute drops the House provision.
     (17) Definition of organic crop
       The Senate amendment defines organic crops for the purposes 
     of the Federal crop insurance program. (Section 1901)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 12001)
     (18) General powers
       The Senate amendment clarifies in subsection (a)(1) that 
     the provision added in the Agricultural Risk Protection Act 
     of 2000 (section 508(j)(2)(A)), which allows farmers to sue 
     the Corporation over a denied claim only in the U.S. District 
     Court for the district where the insured farm is located, 
     takes precedent over the more general provision in section 
     506(d).
       Subsection (a)(2) of the Senate amendment strikes 
     subsection (n) of the Federal Crop Insurance Act (7 U.S.C. 
     1506), in order to clarify that it is superseded by Section 
     515(h) added in the Agricultural Risk Protection Act which 
     specifically establishes sanctions for producers, agents, and 
     loss adjusters for program noncompliance and fraud. (Section 
     1902)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 12002)
     (19) Reduction in loss ratio
       The Senate amendment reduces the statutory national loss 
     ratio for the Federal crop insurance program to 1.0. (Section 
     1903)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 12003)
     (20) Controlled business insurance
       The Senate amendment prohibits farmers from collecting 
     commissions as crop insurance agents on policies in which 
     they or members of their immediate family have a substantial 
     beneficial interest if more than 30 percent of their total 
     commissions are derived from policies sold on operations that 
     they or their immediate family have beneficial interest in. 
     This prohibition is applied on a calendar year basis. 
     (Section 1904)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision, with 
     modifications to the definitions of immediate family and 
     compensation to clarify the intent of Congress. (Section 
     12005)
       For individuals meeting the tests in clauses (B)(i) and 
     (B)(ii), the Managers' intent is to prohibit compensation on 
     policies or plans of insurance in which they or members of 
     their immediate family have a substantial beneficial 
     interest, rather than all policies or plans of insurance that 
     they service.
       The Managers expect the Risk Management Agency (RMA) to 
     enforce this section through an effective system of 
     statistical sampling and spot checks rather than through the 
     imposition of blanket new reporting requirements on agents, 
     subagents, or approved insurance providers. The Managers 
     further expect that the RMA will enforce this section in a 
     manner that does not affect bona fide customer service 
     representatives or other such employees of an agent who work 
     in a capacity other than as an agent or subagent and whose 
     employment with an agent is not intended to merely circumvent 
     the prohibitions under this section.
     (21) Enterprise and whole farm unit pilot program
       The Senate amendment establishes a pilot program to allow 
     farmers to convert the value of their crop insurance coverage 
     under optional and basic units to higher levels of coverage 
     for enterprise or whole farm units. (Section 1909)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision, with 
     modifications, so as to allow any farmer to participate in 
     this pilot, whether or not they had purchased coverage with 
     optional or basic units in previous crop years. It also 
     requires that the farmer-paid share of premium under this 
     program be no less than 20 percent. (Section 12011)
     (22) Denial of claims
       The Senate amendment clarifies that approved insurance 
     providers are only liable for lawsuits in Federal District 
     courts for denial of claims if that claim is denied at the 
     behest of the Federal Crop Insurance Corporation, not if they 
     deny such claims themselves. (Section 1910)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 12013)
     (23) Measurement of farm-stored commodities
       The Senate amendment allows farmers the option to elect to 
     have the Farm Service Agency measure the quantity of crops 
     stored on farms for the purpose of providing evidence on 
     their level of losses, at their own expense. (Section 1911)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision, with 
     modifications. It allows farmers basing their crop insurance 
     loss claim on measurement of farm-stored commodities to defer 
     settlement of that claim for up to 4 months to allow stored 
     grain to settle in the bin. (Section 12014)
     (24) Malting barley
       The Senate amendment allows RMA to modify the quality 
     endorsement for malting barley to take into account changing 
     market conditions. (Section 1929)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 12019)
     (25) Producer eligibility
       The Senate amendment makes producers who raise livestock 
     under contract eligible to purchase coverage, as long as 
     those livestock are not covered by other policies reinsured 
     under the Federal crop insurance program. (Section 1916)
       The House bill contains no comparable provision.
       The Conference substitute drops the Senate provision, but 
     includes a requirement that the Risk Management Agency offer 
     to enter into a contract to develop an insurance policy for 
     poultry production elsewhere in the title.
     (26) Camelina pilot program
       The Senate amendment requires the Federal Crop Insurance 
     Corporation to develop a pilot program under which producers 
     or processors of camelina (an oilseed suitable for use as a 
     feedstock for biodiesel) may propose for approval by the 
     Board policies or plans of insurance in accordance with 
     existing procedures under Section 508(h). Camelina producers 
     would be made eligible for the Noninsured Crop Assistance 
     Program (NAP) until a crop insurance policy is made 
     available. (Section 1920)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     slight modification to simply list camelina as a NAP eligible 
     crop. (Section 12025)
     (27) Agricultural management assistance
       The Senate amendment permits the Secretary to utilize funds 
     available for agricultural management assistance to provide 
     matching funds to states providing additional discounts on 
     farmer-paid premiums in underserved states. (Section 1923)
       The House bill contains no comparable provision.
       The Conference substitute drops the Senate provision.
     (28) Crop insurance mediation
       The Senate amendment allows producers involved in a dispute 
     over a crop insurance claim to utilize both informal agency 
     review and mediation to reach a resolution, so the producer 
     would not necessarily have to choose between the two paths. 
     (Section 1924)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 12032)
     (29) Perennial crop report
       The Senate amendment requires the Secretary to submit a 
     report within 180 days of enactment to the Senate Committee 
     on Agriculture, Nutrition and Forestry and the House 
     Committee on Agriculture that addresses issues relating to 
     declining yields in producers--actual production histories 
     (APH), and declining and variable yields for perennial crops, 
     including pecans. (Section 1928)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision, with 
     a title change. (Section 12030)
       The Managers recognize risk management challenges faced by 
     producers, especially with respect to declining yields in 
     light of increases in premiums. The Managers also understand 
     that there are unique issues with yield variability for 
     perennial crops, such as pecans. The Managers are interested 
     in the Department of Agriculture's activities to address 
     these issues and options that the Department has to address 
     these issues administratively.
     (30) Definition of basic unit
       The Senate amendment maintains definition of basic unit in 
     crop insurance for producers of tobacco. (Section 1930)
       The House bill contains no comparable provision.

[[Page H3664]]

       The Conference substitute adopts the Senate provision. 
     (Section 12031)


                               subtitle b

     (31) Short Title and Definitions (12051 and 12052)
     (32) Disaster Loans to Nonprofits
       The Senate amendment provides the Small Business 
     Administration (SBA) Administrator with the discretion to 
     make loans to non-profit organizations located or operating 
     in a declared disaster area, and to provide services to 
     persons evacuated from any disaster area. (Section 11121)
       The House bill contains no comparable provision.
       The Conference substitute amends the Senate provision and 
     renames the provision ``Economic Injury Disaster Loans to 
     Nonprofits'', with alternate language that will permit 
     private nonprofit organizations to qualify for disaster 
     assistance within the disaster area. (Section 12061)
       The Managers do not, however, intend for this amendment to 
     extend SBA disaster assistance to private nonprofit 
     organizations located outside designated disaster areas.
       The Conference substitute also adds a section titled 
     ``Applicants That Have Become a Major Source of Employment 
     Due to Changed Economic Circumstances''. This provision 
     permits small businesses that were not a major source of 
     employment prior to the disaster, but which subsequently are 
     a major source of employment following the disaster, to 
     qualify for disaster loans beyond the current statutory 
     limit. (Section 12077)
       The Managers intend for this provision to authorize the SBA 
     to administer the disaster loan program with reference to the 
     borrower's circumstances relative to the local area's 
     economic conditions when the loan application is made and 
     not rely solely upon the loan applicant's status as a 
     major source of employment prior to the disaster.
     (33) Disaster loan amounts
       The Senate amendment raises the maximum outstanding loan 
     amounts available to borrowers from the current level of 
     $1,500,000, capping it at $2,000,000 subject to the 
     discretion of the SBA based upon the economic conditions in 
     the affected disaster region. (Section 11122)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate amendment. 
     (Section 12078)
       The Conference substitute adds a provision titled, 
     ``Increased Deferment Period'', which will provide disaster 
     victims with an option of receiving a four year deferment 
     period for disaster loans. (Section 12068)
       The Managers intend for this provision to provide the SBA 
     with authority to provide disaster victims with a deferment 
     beyond the current two-year deferment authority so that they 
     may rebuild homes and businesses and reestablish income 
     streams before beginning repayment of their SBA disaster 
     loan. The Managers intend for extended deferment periods to 
     be implemented at the discretion of the Administrator. 
     Additionally, while the Managers do not intend for loan 
     repayments to occur during deferments, interest should 
     continue to accrue on loans during the deferment period.
       The Conference substitute also adds a provision titled, 
     ``Net Earnings Clauses Prohibited'', which will preclude the 
     imposition of loan terms that require supplemental repayment 
     amounts on disaster assistance loans during the first five 
     years of repayment. (Section 12070)
       The Managers believe that this provision will benefit 
     capital-intensive businesses that receive SBA disaster 
     assistance loans and require earnings for reinvestment in the 
     business to remain profitable. The Managers do not, however, 
     intend for this provision to completely prohibit the SBA from 
     imposing a net earnings clause, it simply precludes imposing 
     these terms within the first five years of loan repayment.
       And the Conference substitute adds a provision called, 
     ``Gulf Coast Disaster Loan Refinancing Program'', which 
     enables the SBA, at their discretion, to institute a program 
     to refinance Gulf Coast disaster loans resulting from 
     Hurricanes Katrina, Rita, or Wilma up to an amount no greater 
     than the original loan. (Section 12086)
     (34) Small Business Development Center portability grants
       The Senate amendment grants the SBA the ability to make an 
     award to a Small Business Development Center (SBDC) greater 
     than $100,000 due to extraordinary circumstances after a 
     catastrophic disaster. (Section 11123)
       The House bill contains no comparable provision.
       The Conference substitute adopts the House provision.
     (35) Assistance to out-of-state businesses
       The Senate amendment authorizes SBDCs outside of the 
     geographic region of a disaster area to provide assistance to 
     small businesses located within a declared disaster area at 
     the discretion of the Administrator. (Section 11124)
       The House bill contains no comparable provision.
       The Conference substitute adopts the House provision.
     (36) Outreach programs
       The Senate amendment establishes a procurement outreach and 
     technical assistance program at the discretion of the 
     Administrator following a disaster declaration. (Section 
     11125)
       The House bill contains no comparable provision.
       The Conference substitute adopts the House provision.
     (37) Small business bonding threshold
       The Senate permits the Administrator to guarantee any 
     surety against loss on a bid bond, payment bond, or 
     performance bond that does not exceed $5,000,000.
       Additionally, the provision would authorize the 
     Administrator to guarantee bonds related to reconstruction 
     efforts following a major disaster in amounts of up to 
     $10,000,000 upon the request by the head of any Federal 
     Agency involved in reconstruction efforts (Section 11126)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate amendment but 
     requires that these initiatives only be carried out with 
     amounts appropriated in advance specifically for their 
     purpose. (Section 12079)
     (38) Termination of program
       The Senate amendment terminates the Small Business 
     Competitive Demonstration Program Act of 1988. (Section 
     11127)
       The House bill contains no comparable provision.
       The Conference substitute adopts the House provision.
     (39) Increasing collateral requirements
       The Senate amendment increases the loan amount under which 
     collateral is not required from $10,000 to $14,000 (or higher 
     as deemed appropriate by the Administrator). (Section 11128)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 12065)
     (40) Public awareness of disaster declaration and application 
         periods
       The Senate amendment enhances coordination between the SBA 
     and Federal Emergency Management Agency (FEMA) disaster 
     assistance application periods, and outlines a Congressional 
     reporting requirement on information relating to SBA and FEMA 
     disaster assistance applications. The provision also requires 
     that the SBA communicate information on disaster assistance 
     availability to the public through all available channels of 
     communication. The section also requires that the SBA create 
     a marketing and outreach plan to convey disaster assistance 
     eligibility and application requirements. (Section 11129)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision 
     (Section 12063).
       The Conference substitute adds a provision titled, 
     ``Coordination of Disaster Assistance Programs with FEMA'' 
     that will require the SBA to establish uniform guidelines in 
     consultation with the director of the FEMA to provide for the 
     coordination of their assistance programs. Specifically, the 
     provision requires the SBA to establish regulations to ensure 
     that applications for disaster assistance are submitted to 
     the appropriate agency as quickly as is practicable.
       The Managers intend for these regulations to remedy 
     problems that arise when the SBA's disaster loan program is 
     used as a screening mechanism for FEMA's disaster assistance 
     grants. Additionally, the Managers intend for these 
     regulations to limit the need for the SBA to first consider 
     disaster loan applications from victims who are patently 
     ineligible for SBA assistance as a precondition to 
     consideration for FEMA assistance. (Section 12062)
       The Conference substitute also adds a provision titled, 
     ``Information Tracking and Follow-up System'', which will 
     require the SBA to develop, implement, or maintain a 
     centralized information system to track all communications 
     (written, e-mail and phone) between disaster victims and SBA 
     personnel concerning the status of their application. At a 
     minimum, this system must record the method and date of 
     communication and the identity of the SBA employee involved 
     and a summary of the communication. It also requires the SBA 
     to provide follow-up communications to disaster victims as 
     their disaster loan proceeds through critical stages of the 
     origination, approval and disbursement process.
       The Managers intend for this section to address 
     deficiencies in the SBA's current systems for tracking and 
     organizing information that result in lost documentation, 
     repeated status updates from applicants, and misinformed SBA 
     personnel. (Section 12067)
       The Conference substitute also adds a provision titled, 
     ``Economic Injury Disaster Loans in Cases of Ice Storms and 
     Blizzards'', which will add ice storms and blizzards to the 
     list of enumerated disasters for which a small business 
     disaster may be declared. (Section 12071)
     (41) Consistency between administration regulations and 
         standard operating procedures
       The Senate amendment contains a provision requiring the SBA 
     to conduct a study of whether the standard operating 
     procedures for administering disaster loan assistance are 
     consistent with the Administration's regulations for 
     administering the disaster loan program. (Section 11130)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 12064)
     (42) Processing disaster loans
       The Senate amendment authorizes the SBA to enter into 
     agreements to pay qualified private contractors a fee for 
     processing SBA disaster loan applications during any

[[Page H3665]]

     major disaster declaration. This provision would also 
     authorize the Administrator to enter into agreements to pay 
     qualified lenders or loss verification professionals a fee 
     for performing loan loss verification services. Additionally, 
     this section would require the SBA Administrator and the 
     Internal Revenue Service Commissioner to ensure that all 
     relevant and allowable tax records for loan approval are 
     shared with loan processors in an expedited manner upon 
     request by the Administrator.
       The Managers do not intend for this provision to authorize 
     the SBA to delegate all their disaster loan disbursement or 
     servicing functions with private contractors. Nor do the 
     Managers intend for this provision to abrogate the SBA's 
     authority to approve or disapprove disaster loan 
     applications. (Section 11131)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 12066)
       The Conference substitute adds a provision titled, 
     ``Disaster Processing Redundancy'', which will require the 
     SBA to maintain a backup disaster processing operation in a 
     separate geographic location from the primary processing 
     operation. The backup facility must be capable of taking over 
     all disaster loan processing from the SBA's primary facility 
     within two days following a disaster, which renders the 
     primary facility inoperable. (Section 12069)
       The Managers intend for this provision to mitigate the risk 
     associated with the practice of maintaining a single primary 
     disaster processing facility.
       The Conference substitute also adds a provision titled, 
     ``Plans to Secure Additional Office Space'', which requires 
     the SBA to develop long-term plans to secure sufficient space 
     to accommodate an expanded workforce in times of disaster. 
     (Section 12076)
     (43) Development and implementation of major disaster 
         response plan
       The Senate amendment contains a provision that would 
     require the SBA to amend the 2006 Atlantic Hurricane Season 
     Disaster Response Plan to apply to all major disasters, and 
     report to Congress on its progress. Additionally, this 
     provision would require the SBA to develop and execute 
     simulation exercises within six months of submitting its 
     report to Congress to demonstrate the effectiveness of the 
     updated response plan. (Section 11132)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate amendment and 
     requires the SBA to conduct a disaster simulation exercise at 
     least once every two fiscal years that includes, at a 
     minimum, the participation of not less than half of the 
     agency's disaster reserve corps. Additionally, the biennial 
     disaster simulation exercise should include stress-testing of 
     the agency's vital information technology and 
     telecommunications system, including various aspects of the 
     SBA's current loan processing and call support systems, the 
     DCMS system, the core application functions, and additional 
     components such as loss verification and scanning systems. 
     This stress-testing should simulate an increased number of 
     concurrent users to determine whether the complete system, 
     operating at maximum capacity will meet the agency's needs 
     for effective and accurate operations in a major disaster. 
     Additionally, the biennial disaster simulation exercise 
     should be based upon the most serious disaster scenarios that 
     the agency has identified in the comprehensive disaster 
     response plan and the agency should change the disaster 
     scenario and the geographic region upon which each disaster 
     simulation is predicated. (Section 12072)
       The Conference substitute adds a provision titled 
     ``Comprehensive Disaster Response Plan'', which requires the 
     SBA to develop, implement, or maintain a comprehensive 
     written disaster response plan. The plan should include a 
     risk-based assessment of the various types of disasters 
     likely to occur in each of the agency's 10 districts. Each 
     assessment should include an analysis of the SBA's needs 
     for an effective response to each disaster scenario, with 
     emphasis on strategies to meet rapidly expanding demand 
     for information technology, telecommunications, human 
     resources, and office space needs. Additionally, the 
     comprehensive plan should include appropriate guidelines 
     for coordination with other federal agencies as well as 
     with State and local authorities to effectively respond to 
     each disaster and best utilize agency resources. In 
     developing the comprehensive plan, the SBA should 
     integrate the results of disaster simulation exercises and 
     catastrophe modeling programs to generate its disaster 
     risk assessments and estimate the demand on agency 
     resources. Additionally, the agency must include a report 
     on the status of the disaster plan, highlighting any 
     changes and developments from previous years, in its 
     annual report to Congress as required by this Act. 
     (Section 12075)
     (44) Disaster planning responsibilities
       The Senate amendment requires the SBA to assign disaster 
     planning responsibilities to a qualified employee who is not 
     an employee of the Office of Disaster Assistance. (Section 
     11133)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate amendment with 
     changes. The SBA must create a new position within the agency 
     that is solely and exclusively dedicated to the function of 
     disaster planning and readiness. The individual appointed to 
     this position will be appointed by the Administrator and will 
     report directly and solely to the Administrator. The 
     individual must have substantial expertise in the field of 
     disaster readiness and emergency response and should have 
     proven management ability. (Section 12073)
       The Managers intend for this individual to serve as a high-
     level administration official who operates independently from 
     all of the agency's existing offices and who has exclusive 
     authority over the disaster planning function. Additionally, 
     this provision mandates that the Administrator ensure that 
     the individual assigned the disaster planning function has 
     adequate resources to carry out their enumerated duties. .
     (45) Additional authority for the district offices of the 
         Administration
       The Senate amendment gives the SBA the ability to grant 
     district offices permission to process disaster loans and 
     requires the SBA to designate an employee in each district 
     office to act as a disaster loan liaison between the 
     processing center and the applicants. (Section 11134)
       The House bill contains no comparable provision.
       The Conference substitute adopts the House provision.
     (46) Assignment of employees of the Office of Disaster 
         Assistance and Disaster Cadre
       The Senate amendment requires that the Administrator may, 
     where practicable, ensure that the number of full-time 
     equivalent employees be maintained at 800 for the Office of 
     Disaster Assistance and at 750 for the SBA's Disaster Cadre. 
     If the staffing level for either of those offices falls below 
     the statutorily mandated limit, the Administrator is required 
     to submit a report to Congress and request additional funds 
     if necessary. (Section 11135)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision, but 
     raises the minimum staffing levels for the Disaster Cadre to 
     1,000. (Section 12074)
     (47) Small Business Act Catastrophic National Disaster 
         Declaration
       The Senate amendment establishes a new Presidential 
     disaster declaration that would have existed solely within 
     the Small Business Act known as a ``Small Business Act 
     Catastrophic National Disaster Declaration.'' The Senate 
     amendment would also give the Administrator the authority to 
     make economic injury disaster to loans to businesses located 
     outside the designated disaster area. (Section 11141)
       The House bill contains no comparable provision.
       The Conference substitute amends the Catastrophic Disaster 
     Declaration and entitles it ``Eligibility for Additional 
     Disaster Assistance,'' which authorizes the Administrator to 
     declare eligibility for additional disaster assistance 
     following a Presidential major disaster declaration that 
     rises to the level of a catastrophic incident. The Managers 
     do not intend for every major disaster to give rise to a 
     declaration of eligibility for additional disaster 
     assistance, but intend that the SBA authorize this additional 
     disaster assistance only in the most extraordinary and 
     devastating of catastrophic incidents that render the SBA's 
     conventional disaster assistance programs inadequate or 
     ineffective. The Managers intend that, when determining 
     whether additional disaster assistance is to be made 
     available, the SBA should ensure that the eligible disaster 
     must be similar in size or scope to the terrorist attacks 
     that occurred on September 11, 2001 or hurricanes ``Katrina'' 
     or ``Rita'' that struck the U.S. Gulf Coast in 2005. (Section 
     12081)
       The Conference substitute adopts a portion of this Senate 
     provision and adds a section titled, ``Additional Economic 
     Injury Disaster Loan Assistance,'' which authorizes the 
     Administrator to make economic injury disaster loans to small 
     businesses located outside the disaster area that have 
     suffered identifiable economic injury as a direct result of a 
     major disaster for which the Administrator has declared 
     eligibility for additional disaster assistance.
       The Managers intend that businesses receiving assistance 
     under this provision have suffered damage that was 
     proximately caused by the disaster. Additionally, the 
     Managers do not intend for this provision to displace the 
     timely processing and disbursement of disaster assistance 
     applications for businesses that are actually located within 
     the designated disaster area. This provision further details 
     eligibility requirements for affected businesses and provides 
     for the suspension of the program if it has a significant 
     negative impact on normal SBA loan processing times. (Section 
     12082)
     (48) Private disaster loans
       The Senate amendment provides definitions of key terms and 
     defines the parameters for authorization and use of Private 
     Disaster Loans. The provision allows the SBA to guarantee 
     timely payment of principal and interest on private loans 
     issued to eligible small businesses and homeowners within an 
     eligible disaster area, and the provision establishes an 
     online application. The SBA may guarantee no more than 
     85 percent of a loan, worth a maximum amount of $2 
     million. Within one year the SBA must issue permanent 
     regulations and criteria. The SBA is also given the 
     authority to reduce the interest rate on any loan. 
     (Section 11142)

[[Page H3666]]

       The House bill contains no comparable provision.
       The Conference substitute adopts a portion of the Senate 
     provision and further requires the SBA to implement a Private 
     Disaster Assistance program, whereby the SBA may guarantee 
     timely payment of principal and interest of up to 85 percent 
     of disaster loans made to eligible small businesses and 
     homeowners within an eligible disaster area following a major 
     disaster for which the Administrator declares eligibility for 
     additional assistance. The SBA is also given authority to 
     establish an online application process for private disaster 
     loans and may permit lenders to use their own documentation. 
     Loans administered under the program, however, must carry the 
     same interest rate and be made on the same terms and 
     conditions as SBA disaster loans made under the existing 7(b) 
     disaster assistance program, and the SBA may use funds 
     appropriated to the 7(b) program to fulfill this requirement. 
     Private disaster loans for homeowners, however, may only be 
     made by lenders who participate in the SBA's Preferred Lender 
     Program. By contrast, loans for small businesses may be made 
     by any lender who meets the agency's qualification 
     requirements, or by a Preferred Lender who also makes loans 
     to homeowners. (Section 12083)
     (49) Technical and conforming amendments
       (Section 11143)
     (50) Expedited Disaster Assistance Loan Program
       The Senate amendment requires the Administrator to set up 
     an Expedited Disaster Assistance Loan program in consultation 
     with Congress, appropriate lenders and creditors, SBDCs, and 
     appropriate offices within the Small Business Administration. 
     The loans, made to borrowers otherwise eligible for loans 
     under the Small Business Act, shall not exceed $150,000, 
     exceed 180 days in length, and be more then one percent over 
     the prime rate. (Section 11144)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate amendment and 
     requires that the loans only be made by private institutions 
     and the Administrator may guarantee timely payments of 
     principal and interest. (Section 12085)
       The Conference substitute also adds a provision titled 
     ``Immediate Disaster Assistance Program,'' which will 
     establish an SBA disaster loan program to provide small 
     businesses with immediate, small-dollar loans administered 
     through private sector lenders after any disaster. Loans made 
     under the program would carry an 85 percent guarantee on 
     amounts up to $25,000. Loans made under this program would 
     also be contingent upon the business applying for and meeting 
     basic criteria for a subsequent SBA disaster loan, and the 
     outstanding loan balance must be repaid with the proceeds of 
     the conventional SBA loan. (Section 12084)
       The Managers intend for both the Immediate Disaster 
     Assistance Program and the Expedited Disaster program to 
     function as bridge financing programs for businesses that are 
     awaiting approval or disbursement of funds under the SBA's 
     conventional disaster loan program. The Immediate Disaster 
     assistance program is intended to provide eligible small 
     business concerns with emergency, small-dollar financing 
     within 36 hours following a disaster pending the victim's 
     receipt of a conventional disaster loan. This contrasts the 
     SBA's current loan program which has a target approval 
     timeframe of 21 days and is intended to provide the disaster 
     victim with long-term, low-interest assistance. The Expedited 
     Disaster program is intended to provide bridge loans to 
     disaster victims eligible for the 7(b) program who need a 
     greater amount of funding. The loans are also intended to be 
     disbursed more quickly than a standard SBA disaster loan.
     (51) HUBZones
       The Senate amendment makes any area designated as a 
     Catastrophic National Disaster Area a HUBZone, as well as all 
     disaster areas designated as a result of Hurricane Katrina or 
     Rita. This designation shall persist for the two-year period 
     beginning on the date of the designation of the area as a 
     Small Business catastrophic national disaster area, or longer 
     at the discretion of the SBA. (Section 11145)
       The House bill contains no comparable provision.
       The Conference substitute adopts the House provision.
     (52) Congressional oversight
       The Senate amendment requires the submission of monthly 
     reports on disaster loan programs to Congress detailing 
     lending volume and activity, as well as daily updates during 
     a Presidential disaster declaration. The SBA would also be 
     required to submit a report to Congress every six months (for 
     up to 18 months after the President declares a major 
     disaster), detailing the numbers of contracts awarded to 
     various types of small businesses in the area, as well as a 
     report that details how the SBA can improve the processing of 
     applications under the Disaster Loan Program. (Section 11161)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate amendment and 
     requires the SBA to submit to Congress a report on the 
     Disaster Assistance Program performance during the previous 
     fiscal year. This report will cover changes in staffing, 
     technology, and a review of challenges encountered and 
     overall results. Additionally, during any period for which 
     the Administrator has declared eligibility for additional 
     assistance, the SBA is required to make monthly reports to 
     Congress with basic information on their disaster response. 
     During a Presidential disaster declaration period, the SBA 
     must submit weekly updates to Congress, as opposed to daily 
     updates in the original Senate amendment. The Conference 
     substitute changes the name to ``Reports on Disaster 
     Assistance'' (Section 12091)

            TITLE XIII--AMENDMENTS TO COMMODITY EXCHANGE ACT

     (1) Short title
       The Senate amendment cites this title as the ``CFTC 
     Reauthorization Act of 2008''. (Section 13001)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 13001)
     (2) Commission authority over off-exchange retail foreign 
         currency transactions
       The Senate amendment amends section 2(c)(2) of the 
     Commodity Exchange Act (CEA) (7 U.S.C. 2(c)(2)) by clarifying 
     that the Commodity Futures Trading Commission's (Commission) 
     anti-fraud authority applies to retail off-exchange foreign 
     currency (forex) transactions that are: (i) offered to, or 
     entered into with, a person that is not an eligible contract 
     participant (i.e., a retail customer); and (ii) offered or 
     entered into on a leveraged or margined basis, or financed by 
     the offeror, the counterparty, or a person acting in concert 
     with the offeror or counterparty, on a similar basis.
       If the test in new section 2(c)(2)(C) is met, courts will 
     no longer have to decide whether forex transactions that meet 
     these requirements are futures contracts in order to permit 
     the Commission to pursue an action for fraud. But since CEA 
     section 4b remains limited by its terms to futures, a new 
     provision (section 2(c)(2)(C)(iv)) is added to ensure that 
     section 4b applies to all covered forex transactions (e.g., 
     ``rolling spot'' or other futures look-alike products) ``as 
     if'' they were futures contracts. Under this provision, the 
     Commission need not prove that such transactions are futures 
     in order to establish a fraud violation. However, this 
     provision is not intended to suggest, nor does it create a 
     negative inference, that such contracts are not futures 
     contracts.
       The phrase ``leveraged or margined basis'' is not limited 
     to the same type of leverage or margin that exists for 
     trading in on-exchange markets. The fact that off-exchange 
     transactions are at issue means that they are likely to 
     operate differently from exchange-traded instruments in this 
     regard.
       Excluded from new section 2(c)(2)(C) are: (i) transactions 
     offered or entered into by certain otherwise-regulated 
     entities, such as financial institutions, broker-dealers, and 
     insurance companies; (ii) securities that are not security 
     futures products; and (iii) transactions that create an 
     enforceable obligation to deliver between a seller and buyer 
     that have the ability to deliver and accept delivery, 
     respectively, in connection with their line of business. The 
     term ``line of business'' in new section 
     2(c)(2)(C)(i)(II)(bb)(BB) refers to any legitimate line of 
     business, not just a foreign exchange business. The reference 
     to ``an enforceable obligation to deliver'' in connection 
     with a ``line of business'' emphasizes the commercial nature 
     of this exclusion.
       The Senate amendment explicitly reserves CEA sections 
     2(a)(1)(B) (principal-agent liability); 4(b) (foreign 
     markets); 4o (fraud by commodity pool operators and commodity 
     trading advisors); 13(a) (aiding and abetting liability); and 
     13(b) (controlling person liability) with respect to 
     fraudulent forex activities.
       While the secondary liability provisions of principal-
     agent, aiding-abetting, and controlling-person liability were 
     implied in the Commodity Futures Modernization Act of 2000 
     (CFMA), these amendments make that reservation of Commission 
     anti-fraud authority explicit. The amendments are not 
     intended to suggest, nor do they create a negative inference, 
     that these secondary liability provisions are not available 
     in actions brought under other sections of the CEA where 
     Commission anti-fraud or anti-manipulation authority is 
     reserved, such as CEA sections 2(h)(2), 2(h)(4), and 5d(c).
       The Senate amendment also provides authority to the 
     Commission to issue rules proscribing fraud in connection 
     with any agreement, contract or transaction in an exempt or 
     agricultural commodity that is (i) offered to, or entered 
     into with, a person that is not an eligible contract 
     participant (i.e., a retail customer); and (ii) offered or 
     entered into on a leveraged or margined basis, or financed by 
     the offeror, the counterparty, or a person acting in concert 
     with the offeror or counterparty, on a similar basis. 
     (Section 13101)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     amendment.
       With the amendment, the managers intend to address several 
     additional problems currently resulting in consumers being 
     the victims of fraud related to off-exchange foreign currency 
     transactions. The CFMA permitted registered Futures 
     Commission Merchants (FCM) to offer foreign currency trading 
     to the public without requiring that they be substantially or 
     primarily engaged in the business of exchange-traded futures.

[[Page H3667]]

       Since passage of the CFMA, the Managers note that an 
     inordinate number of fraudulent schemes are currently 
     implemented through shell FCMs and their unregistered 
     affiliates. These shell FCMs meet minimal requirements for 
     FCMs and typically conduct little, if any, traditional on-
     exchange business of an FCM. Their purpose instead is to 
     serve as the parent company for their unregistered 
     affiliates. It is the unregistered affiliates that will 
     typically conduct the retail sale of foreign currency 
     contracts. Unregistered affiliates of a shell FCM are subject 
     to little if any regulatory oversight, making them harbors 
     for fraudulent schemes.
       The amendment addresses the problem of shell FCMs and 
     unregistered affiliates by providing that only FCMs that are 
     primarily or substantially engaged in the buying and/or 
     selling of futures contracts on a Designated Contract Market 
     or Derivatives Transaction Execution Facility, or a material 
     affiliate of such an FCM are lawful FCM or FCM-affiliate 
     counterparties for a retail transaction in foreign currency.
       The Managers intend that the Commission will utilize the 
     rulemaking authority provided in this section to define when 
     a registered futures commission merchant is primarily or 
     substantially engaged in the buying and/or selling of futures 
     contracts as described in CEA section 1a(20) for the purposes 
     of new provisions 2(c)(2)(B)(i)(II)(cc)(AA) and (BB).
       A material affiliate is an affiliate for which an FCM is 
     required to keep records relating to an affiliate's futures 
     and financial activities under CEA section 4f(c)(2)(B). The 
     amendment provides that FCMs and FCM-affiliates must maintain 
     minimum net capital of $20 million to be a lawful 
     counterparty. This capital requirement is phased in over a 
     period of one year.
       The amendment provides for a new category of dealer known 
     as a ``retail foreign exchange dealer'' (RFED). The amendment 
     provides that RFEDs also must maintain a minimum of $20 
     million in net capital to be a lawful counterparty for a 
     retail off-exchange foreign transaction. This capital 
     requirement is phased in over a period of one year.
       The purpose of imposing a $20 million minimum capital 
     requirement on FCMs, FCM-affiliates, and RFEDs is to ensure 
     that forex dealers utilizing these classifications to conduct 
     retail foreign currency business are sufficiently capitalized 
     to ensure their financial soundness--especially given that 
     many entities in this area run what are essentially off-
     exchange, retail forex markets.
       In addition to maintaining a minimum of $20 million in 
     adjusted net capital, the managers expect the Commission to 
     use the rulemaking authority provided under this section to 
     promulgate any other requirements necessary to ensure the 
     financial soundness of RFEDs.
       The rules and regulations issued under this section should 
     appropriately address the level of financial risk posed by 
     RFEDs and their operations. To the extent their risk profiles 
     are similar, the managers intend for FCMs and RFEDs to be 
     regulated substantially equivalently in terms of their off-
     exchange retail foreign currency business. The managers do 
     not intend for the Commission to provide either FCMs or RFEDs 
     with a more favorable regulatory environment over the other 
     or create two significantly different regulatory regimes for 
     similar business models--to the extent the financial risks 
     posed by such operations are similar.
       In addition to regulatory authority over FCMs and RFEDs, 
     the amendment provides the Commission with greater authority 
     over participants in the off-exchange foreign currency 
     trading industry who are not the actual counterparty to the 
     transaction to ensure that the Commission has authority 
     needed over these industry participants to take action to 
     address fraudulent or deceptive practices.
       The amendment strikes the Senate provision to provide 
     authority to the Commission to issue rules proscribing fraud 
     in connection with any agreement, contract or transaction in 
     an exempt or agricultural commodity that is (i) offered to, 
     or entered into with, a person that is not an eligible 
     contract participant (i.e., a retail customer); and (ii) 
     offered or entered into on a leveraged or margined basis, or 
     financed by the offeror, the counterparty, or a person acting 
     in concert with the offeror or counterparty, on a similar 
     basis. (Section 13101)
     (3) Liaison with Department of Justice
       The Senate amendment requires the Attorney General to 
     designate a liaison between the Department of Justice and the 
     Commission to coordinate civil and criminal investigations 
     and prosecutions of violations of the CEA. (Section 13102)
       The House bill contains no comparable provision.
       The Senate recedes.
     (4) Anti-fraud authority over principal-to-principal 
         transactions
       The Senate amendment amends section 4b of the CEA (7 U.S.C. 
     section 6b) to clarify that the CEA gives the Commission the 
     authority to bring fraud actions in off-exchange ``principal-
     to-principal'' futures transactions. Subsection 4b(a)(2) is 
     amended by adding the words ``or with'' to address principal-
     to-principal transactions on the new markets and trading 
     venues permitted under the CFMA. This new language clarifies 
     that the Commission has the authority to bring anti-fraud 
     actions in off-exchange principal-to-principal futures 
     transactions, including exempt commodity transactions in 
     energy under section 2(h), as well as transactions conducted 
     on derivatives transaction execution facilities. The 
     prohibitions in subparagraphs (A) through (D) of the new 
     section 4b(a) would apply to all transactions covered by 
     paragraphs (1) and (2).
       Derivatives clearing organizations are not subject to fraud 
     actions under section 4b in connection with their clearing 
     activities.
       The amendments to CEA section 4b(a) regarding transactions 
     currently prohibited under subparagraph (iv) (found in new 
     subparagraph (D)) are not intended to affect in any way the 
     Commission's historical ability to prosecute cases of 
     indirect bucketing of orders executed on designated contract 
     markets. (See, e.g., Reddy v. CFTC, 191 F.3d 109 (2nd Cir. 
     1999); In re DeFrancesco, et al., CFTC Docket No. 02-09 (CFTC 
     May 22, 2003) (Order Making Findings and Imposing Remedial 
     Sanctions as to Respondent Brian Thornton)).
       These amendments should not be interpreted or understood as 
     calling into question the Commission's historical use of 
     section 4b to address principal-to-principal trading in the 
     retail context on regulated futures exchanges. (Section 
     13103)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 13102)
     (5) Criminal and civil penalties
       The Senate amendment amends the CEA to double the civil and 
     criminal penalties available for certain violations of the 
     CEA such as manipulation, attempted manipulation, and false 
     reporting. The increased civil monetary penalties in the 
     Reauthorization Act are intended to render the CEA's penalty 
     provisions comparable to the penalty provisions that Congress 
     enacted in the Energy Policy Act of 2005 for manipulation 
     cases brought by the Federal Energy Regulatory Commission 
     with respect to physical energy markets. (Section 13104)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     amendment. The amendment addresses technical drafting issues. 
     (Section 13103)
     (6) Authorization of appropriations
       The Senate amendment authorizes such sums as may be 
     necessary to carry out the Act for fiscal years 2008 through 
     2013. (Section 13105)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision. 
     (Section 13104)
     (7) Technical and conforming amendments
       The Senate amendment contains various amendments to correct 
     statutory errors and other conforming changes. (Section 
     13106)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     amendment. The amendment makes additional technical and 
     conforming changes to the CEA.
       The amendment amends section 1(a)(33) of the CEA (7 U.S.C. 
     1). The definition of ``trading facility'' under the CEA is a 
     key criterion for defining a number of categories of 
     regulated markets (e.g., designated contract markets, 
     derivatives transaction execution facilities), exempt markets 
     (e.g., exempt commercial markets, exempt boards of trade) and 
     excluded markets (e.g., CEA section 2(d)(2)). By amending the 
     definition of trading facility, the Managers address a 
     concern where the Commission's jurisdiction could be 
     compromised if novel auction systems which aggregate the 
     market sentiments of multiple participants to derive a market 
     price according to a pre-determined algorithm were to fall 
     outside the agency's regulatory ambit. The definition of 
     ``trading facility'' has been amended to anticipate and 
     include, prospectively, markets which utilize automated 
     trade matching and execution algorithms.
       Section 4a(e) of the CEA provides, among other things, that 
     it is a violation of the CEA, for any person to violate a 
     speculative limit rule of a designated contract market, 
     derivatives transaction execution facility, or other board of 
     trade if that rule has been approved by the Commission. 
     section 5c(c) of the CEA, though, permits exchanges to 
     certify such rules rather than submit them for prior 
     Commission approval. The Managers amend section 4a(e) to 
     bring it into harmony with the CEA provisions regarding 
     certification of exchange rules. Specifically, the Managers 
     amend section 4a(e) to provide that it is a violation of the 
     CEA, for which the Commission may bring an enforcement 
     action, for any person to violate a speculative limit rule 
     that has been certified by a registered entity.
       The Managers are concerned that complainants seeking to 
     enforce an award received through the Commission's 
     reparations process are facing difficulties in obtaining 
     relief from Federal District courts. Accordingly, the 
     Managers include language in this amendment amending section 
     14(d) of the Commodity Exchange Act (7 U.S.C. 18) to provide 
     that Commission reparations awards are directly enforceable 
     in Federal District courts as if they were local judgments 
     pursuant to 29 U.S.C. 1963. The Managers also provide that 
     the amendment shall operate retroactively. (Section 13105)
     (8) Portfolio margining and security index issues
       Following enactment of the CFMA, the Commission and 
     Securities and Exchange

[[Page H3668]]

     Commission (SEC) jointly promulgated rules relating to the 
     margining of security futures products (SFP). Under those 
     rules, SFPs have been subject to the same fixed-rate 
     strategy-based margining scheme applicable to security 
     options customer accounts, rather than the risk-based 
     portfolio margining system typical in the futures industry. 
     Many have argued that this has contributed to the low volume 
     of trading in SFPs which, by contrast, have been successful 
     in Europe. The Senate amendment directs the Commission and 
     SEC to use their existing authorities by September 30, 2008, 
     to allow customers to benefit from the use of a risk-based 
     portfolio margining system for both security options and 
     SFPs.
       The detailed statutory test of a narrow-based security 
     index was tailored to fit the U.S. equity markets, which are 
     by far the largest, deepest and most liquid securities 
     markets in the world. The amendment provides clarity in this 
     area by requiring the Commission and the SEC to take action 
     under their existing authorities to promulgate, by June 30, 
     2008, final rules providing criteria that will exclude broad-
     based indexes on foreign equities from the definition of 
     narrow-based security index as appropriate. (Section 13107)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to extend the deadlines to September 30, 2009 
     for implementing portfolio margining and June 30, 2009 for 
     promulgating criteria for excluding broad-based indexes on 
     foreign equities from the definition of narrow-based security 
     index as appropriate. (Section 13106)
     (9) Significant price discovery contracts
       The Senate amendment provided for greater regulation of 
     contracts traded on exempt commercial markets (ECM) that 
     fulfill a price discovery function. It sets forth criteria 
     for the Commission to consider in determining whether an ECM 
     contract qualifies as a significant price discovery contract 
     (SPDC). These criteria include: (i) price linkage; (ii) 
     arbitrage; (iii) material price reference; and (iv) material 
     liquidity and other such material factors as the Commission 
     specifies by rule.
       The amendment applies core principles to ECM contracts that 
     are determined to perform a significant price discovery 
     function by the Commission. These Core Principles are derived 
     from selected DCM core principles and designation criteria 
     set forth in CEA section 5. These core principles include 
     those relating to: contracts not being readily susceptible to 
     manipulation, monitoring of trading, the ability of the 
     Commission to obtain information, position limitations or 
     accountability limitations, emergency authority, daily 
     publication of trading information, compliance with rules, 
     and conflict of interest.
       The amendment gives the electronic trading facility the 
     explicit discretion to take into account differences between 
     cleared and uncleared SPDCs only in applying the emergency 
     authority and the position limits or accountability core 
     principles and directs the Commission to take such 
     differences into consideration when reviewing implementation 
     of such principles by the electronic trading facility in 
     (7)(D);
       The amendment requires an electronic trading facility to 
     notify the Commission whenever it has reason to believe that 
     an agreement, contract or transaction conducted in reliance 
     on the exemption provided in 2(h)(3) displays any of the 
     factors relating to a significant price discovery function 
     described in subparagraph (7)(B); and directs the Commission 
     to conduct an evaluation at least once a year to determine 
     whether any agreement, contract or transaction conducted on 
     an electronic trading facility in reliance on the exemption 
     in 2(h)(3) performs a significant price discovery function in 
     (7)(E). (Section 13201)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     amendment. With the amendment the Managers make several 
     changes to the Senate provision.
       The Managers provide that the Commission shall promulgate 
     rules and regulations to implement the authorities provided 
     by this Act regarding significant price discovery contracts. 
     The Senate provision had originally made such promulgation 
     discretionary. The Managers also allow the Commission to 
     consider the potential for arbitrage between a potential SPDC 
     and an existing SPDC in making a determination whether a 
     contract is a SPDC.
       The Managers amend the Senate provision to make clear that 
     an electronic trading facility shall have reasonable 
     discretion to account for differences between cleared and 
     uncleared contracts in complying with all the core principles 
     applicable under this Act to SPDCs.
       The Managers amend the Senate provision to make clear that 
     in determining appropriate position limits or position 
     accountability limits under this Act, an electronic trading 
     facility shall consider cleared swaps transactions that are 
     treated by a derivatives clearing organization as fungible 
     with significant price discovery contracts. The Managers also 
     amend the Senate language to apply the conflict of interest 
     and antitrust considerations core principles to electronic 
     trading facilities only with respect to SPDCs traded on 
     such facilities.
       Not all the listed factors must be present to make a 
     determination that a contract performs a significant price 
     discovery function. However, the Managers intend that the 
     Commission should not make a determination that an agreement, 
     contract or transaction performs a significant price 
     discovery function on the basis of the price linkage factor 
     unless the agreement, contract or transaction has sufficient 
     volume to impact other regulated contracts or to become an 
     independent price reference or benchmark that is regularly 
     utilized by the public.
       The core principles that apply to SPDCs are derived from 
     selected DCM core principles and designation criteria set 
     forth in CEA section 5, and the Managers intend that they 
     will be construed in like manner as the DCM core principles.
       The Managers do not intend that the Commission conduct an 
     exhaustive annual examination of every contract traded on an 
     electronic trading facility pursuant to the section 2(h)(3) 
     exemption, but instead to concentrate on those contracts that 
     are most likely to meet the criteria for performing a 
     significant price discovery function.
       The Managers further intend that the Commission should 
     conduct such examinations in the course of its normal 
     monitoring of ECM contracts and surveillance of designated 
     contract market and derivatives transaction execution 
     facility contracts when considering the potential for 
     arbitrage or price linkage as the basis for an SPDC 
     determination. (Section 13201)
     (10) Large trader reporting
       The Senate amendment amends CEA section 4g to require 
     reporting and recordkeeping of every person registered with 
     the Commission regarding the transactions and positions of 
     such person in any SPDC traded or executed on an electronic 
     trading facility. It also amends CEA section 4i to make any 
     person buying or selling SPDCs on an electronic trading 
     facility subject to reporting requirements set by the 
     Commission and to require such person to report and keep 
     records on transactions or positions equal to or in excess of 
     any reporting threshold the Commission has set. (Section 
     13202)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate Provision with 
     amendment. The amendment provides that large trader reporting 
     requirements imposed by this Act for SPDCs shall include 
     contracts, transactions, or agreements that are treated by a 
     derivatives clearing organization as fungible with SPDCs. 
     (Section 13202)
     (11) Conforming amendments
       The Senate amendment provides various amendments to conform 
     other areas of current law based on changes made in sections 
     13201 and 13202. The amendment provides that an electronic 
     trading facility shall be considered as a registered entity 
     for the purposes of the CEA and provides that the Commission 
     shall have exclusive jurisdiction over significant price 
     discovery contracts. (Section 13203)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     amendment.
       The amendment included by the managers clarifies that the 
     CEA's grant of exclusive jurisdiction to the Commission in 
     CEA section 2(a)(1)(A) applies to significant price discovery 
     contracts traded on ECMs. The amendment further clarifies 
     that the provisions of the CEA made applicable to SPDCs 
     traded on ECMs by this Act are not precluded by CEA section 
     2(h)(3).
       The Managers note that in creating the new authorities 
     contained in this Act, it is the intent of the Managers to 
     enhance the Commission's authority over (2)(h)(3) markets 
     under the CEA. It is the Managers' intent that this provision 
     not affect FERC authority over the activities of regional 
     transmission organizations or independent system operators 
     because such activities are not conducted in reliance on 
     section 2(h)(3). (Section 13203)
     (12) Effective date
       The Senate amendment: (1) provides that this subtitle shall 
     become effective on the date of enactment of this Act, (2) 
     requires the Commission to issue a proposed rule regarding 
     the significant price discovery standards in section 13201(b) 
     within 180 days of the date of enactment of this Act and a 
     final rule within 270 days, and (3) requires the Commission 
     to complete a review of the agreements, contracts and 
     transactions of any electronic trading facility operating on 
     the effective date of the final rule described in 13204(b) 
     within 180 days after that effective date to determine 
     whether such agreement, contract or transaction performs a 
     significant price discovery function. (Section 13204)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     amendment.
       The amendment directs the Commission to conduct a 
     rulemaking to implement a process for determining whether ECM 
     contracts are SPDCs.
       The managers note that although status as a registered 
     entity would attach to an ECM upon the Commission's 
     determination that a particular ECM contract serves a 
     significant price discovery function, the managers intend 
     that the Commission rulemaking include a grace period after a 
     significant price discovery determination to enable the ECM 
     to come into compliance with its newly-applicable core 
     principles. Such a grace period,

[[Page H3669]]

     which need only be made available to ECMs that have been 
     determined to have a SPDC for the first time, should ensure 
     that such ECMs have sufficient time to implement the 
     necessary regulatory requirements and operations. (Section 
     13204)

                        TITLE XIV--MISCELLANEOUS

       *For items 1 through 52 of the House bill and Senate 
     amendment, see title XII--Crop Insurance.
       * For items 53 through 79 and item 120 of the House bill 
     and Senate amendment, see title XI--Livestock.
     (1) Prohibition on use of live animals for marketing of 
         medical devices; fines under the Animal Welfare Act
       The House bill amends the Animal Welfare Act to prohibit 
     using a live animal to demonstrate a medical device or 
     product for marketing purposes or to train a sales 
     representative to use such product. The prohibition does not 
     apply to the training of medical personnel for a purpose 
     other than marketing. The House language amends the Animal 
     Welfare Act to set a cap for violations at not more than 
     $10,000 for each violation. It specifies that each violation, 
     each day that a violation continues, and each animal that is 
     subject to each violation, shall be a separate offense. The 
     House language also amends the Animal Welfare Act to require 
     that the report to Congress also identify all research 
     facilities, intermediate handlers, carriers, and exhibitors 
     registered under section 6 of the Act. It strikes the 
     provision requiring information and recommendations related 
     to the Horse Protection Act. (Section 11316)
       The Senate amendment contains no comparable provision.
       The Conference substitute provides that fines under the 
     Animal Welfare Act are increased from $2500 to $10,000. 
     (Section 14214)
     (2) Protection of pets
       The House bill amends the Animal Welfare Act by replacing 
     section 7. The new section provides a definition for person 
     to be used only in this section. Person includes any 
     individual, partnership, firm, joint stock company, 
     corporation, association, trust, estate, pound, shelter, or 
     other legal entity. This section prohibits research 
     facilities or Federal research facilities from using a cat or 
     dog for educational or research purposes if it was obtained 
     from a permissible source. Also, no person may donate, sell, 
     or offer a dog or cat to any research facility or Federal 
     research facility unless it came from a permissible source. A 
     permissible source is defined to mean a dealer licensed under 
     AWA; a publicly owned pound registered with the Secretary and 
     in compliance with the protection of pet standards outlines 
     in the Act and has obtained the cat or dog from a legal 
     owner, other than a pound or shelter; or a person that is 
     donating the dog or cat that bred and raised it and owned it 
     for not less than one year preceding donation; a research 
     facility or Federal research facility licensed by the 
     Secretary. In addition to existing penalties for violating 
     the Animal Welfare Act this provision establishes an 
     additional fine of $1,000 for each violation of this section. 
     Nothing in this section requires a pound or shelter to 
     donate, sell, or offer a dog or cat to a research facility. 
     (Section 11317)
       The Senate amendment is the same as the House bill. It adds 
     a provision that would phase out the use of random source 
     dogs and cats from class B dealers within five years after 
     enactment of this act. (Section 11079)
       The Conference substitute adopts the House provision with 
     an amendment that defines Class B dogs and cats and requires 
     the Secretary to review any independent reviews and 
     recommendations by a nationally recognized panel on the use 
     of Class B dogs and cats in federal research.
       The Managers are aware of the concerns relating to the use 
     of random source animals from Class-B dealers for medical 
     research. As part of the Consolidated Appropriations Act, 
     2008 (P.L. 110-161), Congress requested an independent review 
     by a nationally recognized panel of experts of the use of 
     Class B dogs and cats in federally supported research. The 
     National Academy of Science is in the process of conducting 
     this review. Results from the review are expected to be 
     finalized in the spring of 2009. The results of this study 
     will help provide Congress information regarding the value of 
     Class B dogs and cats in medical research. It is the Managers 
     view upon completion of the review the House Committee on 
     Agriculture and United States Senate Committee on 
     Agriculture, Nutrition and Forestry should address whether to 
     continue Class B dealers as a legitimate vendor of random 
     source animals for medical research.
       The Managers are also aware of concerns relating to how 
     Class B dealers acquire random source animals. Under 9 CFR 
     2.132(d) dealers are prohibited from obtaining a dog or cat 
     from any person who is not licensed (other than a pound or 
     shelter), unless they obtain a certification (source record) 
     that the animals were born and raised on that person's 
     premises and, if the animals are for research purposes, that 
     the person has sold fewer than 25 dogs and/or cats that year. 
     The Animal and Plant Health Inspection Service (APHIS) 
     conducts four unannounced inspections of each Class B dealer 
     on an annual basis. During these inspections, APHIS conducts 
     random trace back of source records. In addition, every 2 to 
     3 years APHIS does 100 percent trace back of every source 
     record of all Class B dealers. APHIS data indicates a 95 
     percent trace back of these records. Understanding concerns 
     raised about the validity of these source records, the 
     Managers intend to ask the Government Accountability Office 
     to review APHIS regulations to ensure they are sufficiently 
     assuring the source of random source animals.
       The Managers are also concerned with the humane handling 
     and treatment of all animals. In section 14114, fines for 
     violating the Animal Welfare Act are increased for the first 
     time since 1985. (Section 14216)
     (3) Sense of the Senate on the U.S. Department of 
         Agriculture's wildlife services competing against private 
         industry for nuisance bird control work
       The Senate amendment contains a Sense of the Senate that 
     USDA Wildlife Services should not compete nor condone 
     competition with the private sector for business regarding 
     the management of nuisance wildlife problems in urban areas 
     where private sector services are available. Wildlife 
     Services should inform cooperators of the availability of and 
     their right to acquire services from private service 
     providers prior to entering into any cooperative agreement 
     for wildlife damage management activities. The Secretary of 
     Agriculture should ensure that Wildlife Services does not 
     aggressively compete with private pest management industry 
     for European starling, house sparrow, and pigeon control work 
     in urban areas where private sector services are available. 
     The Secretary of Agriculture should rely on the scientific 
     and widely excepted definitions to define the term urban 
     rodent in order to clarify the express restrictions in law on 
     Wildlife Services activities. Finally, the Secretary should 
     direct Wildlife Service to work with private industry, 
     through a Memorandum of Understanding, to delineate common 
     areas of cooperation so that issue of competition are 
     addresses, taking into account the interests of the wildlife 
     resources and the need to manage damage caused by that 
     resource. (Section 11085)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
       The Managers expect the Secretary to continue and strictly 
     enforce the current Wildlife Service Directive 3.101, 
     ``Interfacing with Business and Establishing Cooperatives 
     Programs,'' dated May 25, 2005. The Managers intend that the 
     Secretary, consistent with this Directive, shall inform 
     service requesters of the availability of other private 
     service providers and their right to choose. The Managers 
     strongly encourage the Secretary to ensure that Wildlife 
     Services does not compete with professional pest management 
     companies which manage nuisance birds such as European 
     starlings, house sparrows, and pigeons in urban areas. The 
     Managers strongly encourage the Secretary to enter into a 
     Memorandum of Understanding with industry to address 
     issues of competition for service, taking into account the 
     ability of private entities to respond to requests for 
     wildlife damage management and the common goal of both the 
     Department and the private sector to meet the increasing 
     need of managing damages caused by pests in urban areas.
     (4) Prohibitions on dog fighting ventures
       The Senate amendment amends section 26 of the Animal 
     Welfare Act to strengthen penalties for dog fighting. Section 
     26(a)(1) of the AWA is amended to make it unlawful to 
     knowingly sponsor or exhibit an animal in a dog fighting 
     venture as defined later in this section. Section 26(b) of 
     the AWA is amended to add it is illegal to knowingly sell, 
     buy, posses, train, transport, deliver or receive any dog, 
     other animal or offspring of the dog or other animal for the 
     purpose of having them participate in a dog fighting venture. 
     Section 26(f) of the AWA is amended to allow costs incurred 
     for the care of animals seized or forfeited under this 
     section to be recoverable from the owner. Subsection (g) is 
     amended to include a definition for a dog fighting venture to 
     mean any event that involves a fight between at least two 
     animals, one being a dog, which is conducted for purposes of 
     sport, wagering, or entertainment. An exclusion for hunting 
     is also added. Section 49 of title 18, United States Code, is 
     also amended to increase the penalty for violations of 
     section 26 of the Animal Welfare Act to not more than five 
     years imprisonment. (Section 11076)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     a minor amendment. (Section 14207)
     (5) Domestic pet turtle market access; review, report and 
         action on the sale of baby turtles
       The Senate amendment requires the Secretary of Health and 
     Human Services, acting though the Commissioner of Food and 
     Drugs, to determine the prevalence of salmonella in each 
     species of reptile and amphibian sold legally in the United 
     States to determine whether or not the prevalence of 
     salmonella in these animals is not more than 10 percent less 
     than the percentage of salmonella in pet turtles. If the 
     prevalence is not more than 10 percent less than the 
     percentage of salmonella in pet turtles the Secretary of 
     Agriculture shall conduct a study of how pet turtles can be 
     sold safely as pets in the United States. In conducting the 
     study the Secretary shall consult with all relevant 
     stakeholders. (Sections 11101, 11102, and 11103)
       If the prevalence of salmonella in other amphibians and 
     reptiles is greater than that of salmonella in pet turtles 
     the Secretary shall prohibit the sale of those amphibians and 
     reptiles.
       The House bill contains no comparable provision.

[[Page H3670]]

       The Conference substitute strikes this provision.
     (6) Importation of live dogs
       The Senate amendment adds a new section to the Animal 
     Welfare Act (7 U.S.C. 2147) to restrict the importation of 
     certain dogs for resale. This provision defines ``importer'' 
     as any person who, for purposes of resale, transports into 
     the United States puppies from a foreign country. Resale is 
     defined to mean any transfer of ownership or control of an 
     imported dog of less than 6 months of age to another person, 
     for more than de minimis consideration. No dog shall be 
     imported into the United States for purposes of resale unless 
     the Secretary of Agriculture determines the dog is in good 
     health; has received all necessary vaccinations; and is at 
     least 6 months of age, if imported for resale. Exemptions are 
     provided for dogs imported for research purposes or 
     veterinary treatment. The Secretaries of Agriculture, Health 
     and Human Services, Commerce, and Homeland Security will 
     promulgate regulations necessary to implement this section. 
     Failure to comply by an importer will result in the importer 
     being subject to fines under section 19 of the Animal Welfare 
     Act and providing for the care, forfeiture, and adoption of 
     each applicable dog at the expense of the importer. (Section 
     3205)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     amendment. The Managers recognizes that Hawaii may have a 
     unique situation arising out of Hawaii's current quarantine 
     regulations. In the case of Hawaii, so long as the state 
     continues to quarantine dogs imported from the mainland 
     United States, the Secretary may permit an exception to allow 
     the import of dogs under the age of 6 months from 
     jurisdictions currently exempt from the Hawaii quarantine 
     (i.e. Guam, Australia, New Zealand, and the British Isles) 
     for resale in Hawaii, provided all other regulations of the 
     Secretary, and of the State of Hawaii, are complied with. Any 
     dogs imported into Hawaii pursuant to this exception shall 
     not be shipped to any other jurisdiction within the United 
     States for resale at less than 6 months of age.
       The Managers do not intend for the exception for veterinary 
     treatment to be used for routine veterinary care. This 
     exemption is in place for emergency situations where the dogs 
     in question are in need of immediate veterinary treatment and 
     may not have the required vaccinations. Congress expects that 
     such dogs would also be properly quarantined until the dogs 
     are determined to be in good health as defined by regulations 
     promulgated by the Secretary. Further, it is not the intent 
     of Managers to prevent organizations from importing dogs 
     under the age of 6 months in the event of an emergency, and 
     transferring ownership or control of such dogs under the age 
     of 6 months, provided such organization does not receive more 
     than de minimus consideration for such adopted or transferred 
     dogs. (Section 14210)
     (7) Outreach and technical assistance for socially 
         disadvantaged farmers and ranchers and limited resource 
         farmers and ranchers
       The House bill amends section 2501 of the Food, 
     Agriculture, Conservation, and Trade Act (FACT Act) to 
     specify that the 2501 Technical and Outreach Assistance 
     Program is to be used to enhance the coordination, outreach, 
     technical assistance, and education efforts authorized under 
     USDA programs.
       The House bill authorizes agencies within USDA to make 
     grants and enter into contracts and cooperative agreements 
     with a community-based organization in order to utilize the 
     community-based organization to provide outreach and 
     technical assistance. It requires the Secretary to submit to 
     the House and Senate Agriculture Committees an annual report 
     that includes the following: the recipients of funds made 
     available under the 2501 Outreach and Technical Assistance 
     Program; the activities undertaken and services provided; the 
     number of producers served and the outcomes of such service; 
     and the problems and barriers identified by entities in 
     trying to increase participation by socially disadvantaged 
     farmers and ranchers.
       Section 11201(1)(C) provides mandatory funding in the 
     amount of $15 million for each of the fiscal years 2008 
     through 2012. No more than 5 percent of the funds made 
     available in each fiscal year are to be used for 
     administrative expenses related to administering the 2501 
     Program.
       Eligible entities are defined as any community-based 
     organizations, networks, or coalition of community based 
     organizations that have demonstrated experience in providing 
     agricultural education or other agriculturally related 
     services to and on behalf of socially disadvantaged farmers 
     and ranchers and have provided to the Secretary documentary 
     evidence of work with socially disadvantaged farmers and 
     ranchers. (Section 11201)
       The Senate amendment amends section 2501 of the Food, 
     Agriculture, Conservation, and Trade Act (FACT Act) to 
     specify that the 2501 Technical and Outreach Assistance 
     Program is to be used to enhance the coordination, outreach, 
     technical assistance, and education efforts authorized under 
     USDA programs. The 2501 Program is to assist the Secretary in 
     reaching socially disadvantaged farmers and ranchers and 
     prospective socially disadvantaged farmers and ranchers, and 
     improving the participation of those farmers and ranchers in 
     USDA programs. The Secretary is required to submit and make 
     publicly available a report that describes: (A) the 
     accomplishments of the 2501 program, and (B) any gaps or 
     problems in program service delivery, as reported by program 
     grantees. Appropriations of up to $50,000,000 annually are 
     authorized for fiscal years 2008-2012. No more than 5 percent 
     of the funds made available in each fiscal year are to be 
     used for administrative expenses related to administering The 
     2501 Outreach and Technical Assistance Program. The provision 
     changes eligibility guidelines for potential grantees by 
     extending from 2 to 3 years the period of time for which 
     documentary evidence of work with socially-disadvantaged 
     farmers must be provided. The Secretary is authorized to 
     provide for the renewal of a grant, contract, or other 
     agreement under this section to an entity that: (A) has 
     previously received 2501 funding; (B) has demonstrated an 
     ability to reach socially disadvantaged farmers and increase 
     the participation of such farmers in USDA programs; and (C) 
     demonstrates to the satisfaction of the Secretary that an 
     entity will continue to fulfill the purposes of the 2501 
     Program. This section requires the Secretary to promulgate 
     regulations establishing criteria for grants under this 
     program. This section requires the Secretary, following 
     consultation with entities eligible for the 2501 Program to 
     co-locate the 2501 Program and the Office of Outreach within 
     18 months of enactment. (Section 11052)
       The Conference substitute adopts the Senate amendment with 
     modifications to delete language from the Senate amendment 
     pertaining to renewal of contracts, review of proposals, and 
     coordination with the Office of Outreach of the Department of 
     Agriculture, which is now addressed in Section 14013, Office 
     of Advocacy and Outreach. The Conference substitute also 
     provides $75 million in mandatory funding for the 2501 
     Program. (Section 14004)
     (8) Improved program delivery by Department of Agriculture on 
         Indian reservations
       The House bill amends section 2501(g) of the FACT Act by 
     authorizing the Secretary to require the Agricultural 
     Stabilization and Conservation Service, the Soil Conservation 
     Service, the Farmers Home Administration offices, and any 
     such offices and functions that the Secretary chooses to 
     include, establish a consolidated suboffice at tribal 
     headquarters on Indian reservations, where there is a 
     demonstrated need. (Section 11202)
       The Senate amendment is the same as the House bill, with 
     technical differences. (Section 11054)
       The Conference substitute adopts the House provision with a 
     technical change to correct the agency names in the statute. 
     (Section 14001)
     (9) Transparency and accountability for socially 
         disadvantaged farmers and ranchers
       The House bill amends section 2501A of the FACT Act by 
     requiring the Secretary to annually compile, for each county 
     and State in the United States, program application and 
     participation rate data regarding socially disadvantaged 
     farmers or ranchers by computing for each USDA program that 
     serves agricultural producers and landowners: (A) raw numbers 
     of applicants and participants by race, ethnicity, and 
     gender; and (B) the application and participation rate by 
     race, ethnicity, and gender, as a percentage of the total 
     participation rate of all agricultural producers and 
     landowners.
       The Secretary, using the technologies and systems of the 
     National Agricultural Statistics Service, is authorized to 
     compile and present application and participation rate data 
     regarding socially disadvantaged farmers or ranchers in a 
     manner that includes the raw numbers and participation rates 
     for: the entire United States; each State; and, each county 
     in each State. The Secretary is required to make the data 
     (i.e., report) available to the public, via a website and 
     otherwise in electronic and paper form. (Section 11203)
       The Senate amendment amends section 2501A of the FACT Act 
     by requiring the Secretary to annually compile, for each 
     county and State in the United States, program application 
     and participation rate data regarding socially disadvantaged 
     farmers and ranchers by computing for each USDA program that 
     serves agricultural producers and landowners: (A) raw numbers 
     of applicants and participants by race, ethnicity, and 
     gender; and (B) the application and participation rate by 
     race, ethnicity, and gender, as a percentage of the total 
     participation rate of all agricultural producers and 
     landowners.
       The Secretary, using the technologies and systems of the 
     National Agricultural Statistics Service, is authorized to 
     compile and present application and participation rate data 
     regarding socially disadvantaged farmers or ranchers in a 
     manner that includes the raw numbers and participation rates 
     for: the entire United States; each State; and each county in 
     each State. (Section 11056)
       The Conference substitute adopts the House provision. 
     (Section 14006)
     (10) Beginning farmer and rancher development program
       The House bill provides that mandatory funding in the 
     amount of $15 million is to be provided for each of the 
     fiscal years 2008 through 2012 to carry out the program. 
     (Section 11204)
       The Senate amendment incorporates energy conservation 
     efficiency and transition to organic farming into the 
     programs and services eligible to receive competitive grants 
     under this program. It limits grants under this program to 
     $250,000. The provision

[[Page H3671]]

     adds a set of evaluation criteria the Secretary shall 
     consider when awarding grants under this program. The 
     Secretary is also required to ensure, to the maximum extent 
     practicable, geographic diversity of grantees under this 
     program. Organizations that work with refugee or immigrant 
     beginning farmers or ranchers are added to be eligible to 
     receive grants. This provision authorizes $30,000,000 in 
     annual appropriations for the BFRDP. (Section 7309)
       The Conference substitute adopts the Senate provision with 
     an amendment to move the program into the research title of 
     this Act, to delete the incorporation of energy conservation 
     efficiency and transition to organic farming into the 
     program, to delete the clarification on organizations that 
     work with refugee or immigrant beginning farmers, and to add 
     $15,000,000 in mandatory funding for each fiscal year from 
     2009 and $20 million for each of fiscal years 2010 through 
     2012.
       The Managers encourage the Secretary to include asset-based 
     farming opportunity strategies in the grant categories of the 
     Beginning Farmer and Rancher Development Program (BFRDP) in 
     order to aid with the overall purposes of the program, which 
     include financial management training, the acquisition and 
     management of agricultural credit, and innovative farm and 
     ranch transfer strategies.
       The Managers expect the panels that will review the grant 
     applications through the BFRDP to include a broad range of 
     individuals with appropriate expertise and experience in 
     delivering beginning farmer and rancher programs.
       The Managers intend for the BFRDP to include immigrant 
     beginning farmers and ranchers in the funding set-aside for 
     socially disadvantaged and limited resource farmers and 
     ranchers.
       The Managers are aware of and fully support the goals of 
     the National Young Farmers Education Association National 
     Forum on Identifying Issues and Enhancing Success for 
     America's Young and Beginning Agricultural Producers. To the 
     extent practicable, the Managers encourage the Secretary to 
     provide support to this important forum. (Section 7410)
     (11) Provision of receipt for service or denial of service
       The House bill authorizes the Secretary to provide a 
     receipt for service to a producer or landowner, or 
     prospective producer or landowner, in any case where the 
     producer or landowner, or prospective producer or landowner, 
     requests any benefit or service offered by USDA to 
     agricultural producers or landowners. The receipt for service 
     is to be issued on the date the request is made and must 
     contain the date, place, and subject of the request, as well 
     as the action taken, not taken, or recommendations made in 
     response to the request. (Section 11205)
       The Senate amendment differs from the House version in that 
     it: (1) specifies that Farm Service Agency and Natural 
     Resources Conservation Service are the agencies subject to 
     this provision, and (2) requires the receipt upon request. 
     Section 11057 amends Section 2501A of the Food, Agriculture, 
     Conservation, and Trade Act of 1990 (7 U.S.C. 2279-1)(as 
     amended by section 11056). This section requires the 
     Secretary of Agriculture to issue to farmers and ranchers 
     seeking a benefit or service offered by the Farm Service 
     Agency or the Natural Resources Conservation Services of 
     USDA, a receipt upon request that contains the date, place, 
     and subject of the request as well as the action taken, not 
     taken, or recommended to the farmer or rancher. (Section 
     11057)
       The Conference substitute adopts the Senate amendment but 
     modifies the language to include ``current or prospective 
     producer or landowner'' and adds Rural Development to the 
     agencies that are subject to the provision. (Section 14003)
     (12) Tracking of socially disadvantaged farmers or ranchers 
         and limited resource farmers or ranchers in Census of 
         Agriculture and certain studies
       The House bill requires the Secretary to ensure, to the 
     maximum extent possible, that the Census of Agriculture 
     accurately documents the number, location, and economic 
     contributions of socially disadvantaged and limited resource 
     farmers or ranchers. (Section 11206)
       The Senate amendment amends section 2501 of the Food, 
     Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 
     2279). The Secretary is required to ensure, to the maximum 
     extent possible, that the Census of Agriculture accurately 
     documents the number, location, and economic contributions of 
     socially disadvantaged and limited resource farmers or 
     ranchers. (Section 11055)
       The Conference substitute adopts the Senate amendment. 
     (Section 14005)
     (13) Farmworker coordinator
       The House bill authorizes the Secretary to establish the 
     position of Farmworker Coordinator, to be located in USDA's 
     Office of Outreach. The Farmworker Coordinator is to have a 
     number of duties, including: serving as a liaison to 
     community-based, non-profit organizations that represent low-
     income migrant and seasonal farmworkers; coordinating with 
     USDA and State and local governments to assure that 
     farmworker needs are met during declared disasters and 
     emergencies; and assuring that farmworkers have access to 
     services and support that will assist them in entering 
     agriculture as producers. An appropriation of such sums as 
     necessary is authorized for fiscal years 2008 through 2012. 
     (Section 11207)
       The Senate amendment is the same as the House bill, with 
     technical differences. The Senate provision amends section 
     296(b) of the Department of Agriculture Reorganization Act of 
     1994 (7 U.S.C. 7014(b)). (Section 11059)
       The Conference substitute adopts the Senate provision with 
     an amendment to specify that the Farmworker Coordinator shall 
     have responsibility for assisting farmworkers in becoming 
     agricultural producers or landowners, and to make other 
     technical changes. The Farmworker Coordinator has been 
     relocated into the Office of Advocacy and Outreach as 
     described in (93) of this document. (Section 14013)
     (14) Office of Outreach relocation
       The House bill authorizes the Secretary to develop a 
     proposal to relocate USDA's Office of Outreach. The Office of 
     Outreach is to be responsible for the 2501 Outreach and 
     Technical Assistance Program and the Beginning Farmer and 
     Rancher Development Program. (Section 11208)
       The Senate amendment contains no comparable provision.
       The Conference substitute adopts the House amendment with 
     modification. The substitute establishes a new Office of 
     Advocacy and Outreach, the purpose of which is to improve the 
     viability and profitability of small farms and ranches, 
     beginning farmers or ranchers, and socially disadvantaged 
     farmers or ranchers, as well as to improve access to programs 
     of the Department of Agriculture.
       The Office of Advocacy and Outreach is to be overseen by a 
     director appointed by the Secretary from among the 
     competitive service and to have two distinct groups, a 
     Socially Disadvantaged Farmer Group and a Small Farms and 
     Beginning Farmers and Ranchers Group. The Socially 
     Disadvantaged Farmers Group is to carry out the 2501 Program, 
     oversee the Minority Farmer Advisory Committee, oversee the 
     Farmworker Coordinator, and carry out the functions of the 
     Office of Outreach and Diversity previously carried out by 
     the Office of the Assistant Secretary for Civil Rights. The 
     Small Farms and Beginning Farmers and Ranchers Group is to 
     oversee the Office of Small Farms Coordination, consult with 
     the National Institute for Food and Agriculture on the 
     administration of the Beginning Farmer and Rancher 
     Development Program, coordinate with the Advisory Committee 
     for Beginning Farmers and Ranchers, and carry out other such 
     duties as determined appropriate by the Secretary of 
     Agriculture. (Section 14013)
     (15) Minority farmer advisory committee
       The House bill authorizes the Secretary to establish a 
     minority advisory committee, to be overseen by USDA's Office 
     of Outreach. The committee is to have a number of duties, 
     including: reviewing civil rights cases to ensure that they 
     are processed in a timely manner; reporting quarterly to the 
     Secretary on civil rights enforcement and outreach; 
     recommending to the Secretary corrective actions to prevent 
     civil rights violations; and reviewing the operations of the 
     2501 Outreach and Technical Assistance Program.
       The Committee is to be composed of the following:
       (A) 3 members appointed by the Secretary;
       (B) 2 members appointed by the chairman of the Committee on 
     Agriculture, Nutrition, and Forestry, of the Senate--in 
     consultation with the ranking member;
       (C) 2 members appointed by the chairman of the House 
     Agriculture Committee--in consultation with the Ranking 
     member;
       (D) a civil rights professional;
       (E) a socially disadvantaged farmer or rancher; and
       (F) such other persons or professionals that the Secretary 
     determines to be appropriate. (Section 11209)
       The Senate amendment contains no comparable provision.
       The Conference substitute adopts the House provision with 
     amendment. The substitute specifies that the duty of the 
     committee is to provide advice to the Secretary on 
     implementation of the 2501 Program, methods of maximizing the 
     participation of minority farmers and ranchers in Department 
     of Agriculture programs, and civil rights activities at the 
     Department of Agriculture. The substitute deletes components 
     of the House bill pertaining to review of civil rights cases, 
     the processing of civil rights cases, quarterly reporting to 
     the Secretary on civil rights enforcement, annual reporting 
     to the Secretary on civil rights compliance, recommendations 
     to the Secretary regarding corrective actions to prevent 
     civil rights violations, review of operations of the 2501 
     Program, and review of outreach efforts in the agencies and 
     programs of the Department.
       The substitute also revises the membership of the 
     committee, specifying not less than four socially 
     disadvantaged farmers and ranchers, not less than two 
     representatives of nonprofit organizations, not less than two 
     civil rights professionals, not less than two representatives 
     of higher education, and other such persons as deemed 
     appropriate by the Secretary. The substitute also provides 
     the Secretary of Agriculture with authority to appoint 
     employees of the Department of Agriculture as ex-officio 
     members. (Section 14008)
     (16) Coordinator for chronically underserved rural areas
       The House bill authorizes the Secretary to establish a 
     Coordinator for Chronically Underserved Rural Areas, to be 
     located in

[[Page H3672]]

     USDA's Office of Outreach. The mission of the Coordinator is 
     to direct USDA's resources to high need, high poverty rural 
     areas. The Coordinator's duties are to include consulting 
     with other USDA offices in directing technical assistance, 
     strategic planning, at the State and local level, for 
     developing rural economic development that leverages the 
     resources of State and local governments and non-profit and 
     community development organizations. An appropriation of such 
     sums as necessary is authorized for each of the fiscal years 
     2008 through 2012. (Section 11210)
       The Senate amendment contains no comparable provision.
       The Conference substitute adopts the House provision with 
     an amendment to locate the Coordinator in Rural Development 
     instead of the Office of Outreach. (Section 14118)
     (17) Foreclosure
       The Senate amendment states that currently there is a USDA 
     guidance that prohibits loan foreclosures when there is a 
     pending claim of racial discrimination against the 
     Department. This provision amends section 307 of the 
     Consolidated Farm and Rural Development Act (7 U.S.C. 1927) 
     to put into law what is already in place in a guidance at 
     USDA.
       Subsection (a) Moratorium. This section mandates a 
     moratorium on all loan acceleration and foreclosure 
     proceedings where there is a pending claim of discrimination 
     against the Department related to a loan acceleration or 
     foreclosure. This section also waives any interest and 
     offsets that might accrue on all loans under this title for 
     which loan and foreclosure proceedings have been instituted 
     for the period of the moratorium. If a farmer or rancher does 
     not prevail on his claim of discrimination, then the farmer 
     or rancher will be liable for any interest and offsets that 
     accrued during the period that the loan was in abeyance. The 
     moratorium will terminate on either the date the Secretary 
     resolves the discrimination claim or the court renders a 
     final decision on the claim, whichever is earlier.
       Subsection (b) Report. This section requires the Inspector 
     General of USDA to determine whether loan foreclosure 
     proceedings of socially disadvantaged farmers have been 
     implemented according to applicable laws and regulations. The 
     Inspector General shall submit a report of its determination 
     to the Senate and House Committees on Agriculture not later 
     than a year after this legislation's enactment. (Section 
     11051)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate amendment with 
     an amendment that the farmer or rancher is required to have a 
     program discrimination claim and that the Department makes a 
     procedural determination to accept the claim as a valid one. 
     The determination to accept the claim by the Department is 
     intended to be procedural and not a statement as to the 
     merits of the claim. The Conference substitute amends Section 
     331A of the Consolidated Farm and Rural Development Act (7 
     U.S.C. 1981a) and specifies that the provision applies to 
     farmer program loans made under subtitle A, B, or C. (Section 
     14002)
     (18) Additional contracting authority
       The Senate amendment amends section 2501(a)(3) of the Food, 
     Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 
     2279(a)(3)). This section clarifies that the agencies and 
     programs of the Department of Agriculture are authorized to 
     enter into contracts and cooperative agreements with 
     community-based organizations to provide service to socially-
     disadvantaged farmers and ranchers, clarifies that the 
     Secretary is not required to require matching funds for such 
     agreements, and allows federal agencies to contribute to 
     grants or cooperative agreements made under the 2501 Program 
     as the agency determines that contributing funds for such 
     purpose will further the authorized programs of the 
     contributing agency. (Section 11053)
       The House bill contains a similar provision in section 
     11201.
       The Conference substitute deletes both House and Senate 
     provisions.
     (19) Emergency grants to assist low-income migrant and 
         seasonal farmworkers
       The Senate amendment amends Section 2281 of the Food, 
     Agriculture, Conservation and Trade Act of 1990 (42 U.S.C. 
     5177a). This section requires the Secretary to maintain a 
     disaster fund of $2,000,000, and authorizes discretionary 
     funding to maintain it. This section further requires that 
     public or private entities eligible to receive funding under 
     this section must have at least five years demonstrated 
     experience in representing and providing emergency services 
     to low-income migrant or seasonal farmworkers. Types of 
     allowable assistance are specified, in addition to such other 
     priorities that the Secretary determines to be appropriate. 
     (Section 11061)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate amendment.
     (20) National appeals division
       The Senate amendment amends section 280 of the Department 
     of Agriculture Reorganization Act of 1994 (7 U.S.C. 7000). 
     This section establishes a reporting requirement that states 
     the head of each agency shall report to the House and Senate 
     Agriculture Committees, and post on the Department's website 
     information that includes a description of all cases returned 
     to the agency by the National Appeals Division, the status of 
     implementation of each final determination and if the final 
     determination has not been implemented then the reason and 
     the projected date of implementation. The reporting 
     requirement to Congress should be every 180 days and the 
     website should be updated not less than monthly. (Section 
     11058)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate amendment. 
     (Section 14009)
     (21) Oversight and compliance
       The Senate amendment requires the Secretary of Agriculture 
     to use the reports required under section 2501 of the FACT 
     Act in the conduct of program oversight regarding the 
     participation of socially disadvantaged farmers in USDA 
     programs as well as in the evaluation of civil rights 
     performance. (Section 11064)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate amendment. 
     (Section 14007)
     (22) Report of civil rights complaints, resolutions, and 
         actions
       The Senate amendment requires the Secretary of Agriculture 
     to issue an annual report on program and employment civil 
     rights complaints, including the number of complaints filed, 
     the length of time required to process complaints, the number 
     of complaints resolved with a finding of discrimination, and 
     the personnel actions taken by the agency following 
     resolution of civil rights complaints. (Section 11065)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate amendment. The 
     Managers intend that if the Secretary, in compiling 
     determines the aggregate data does not accurately reflect the 
     scope of complaints, then the Secretary may note in the 
     report that multiple complaints came from a single 
     individual, in order to provide a clear picture of the scope 
     of the complaints. (Section 14010)
     (23) Grants to improve supply, stability, safety, and 
         training of agricultural labor force
       The Senate amendment directs the Secretary to make grants 
     to nonprofit organizations to assist agricultural employers 
     and farmworkers with services that help improve the quality 
     of the agricultural labor force through job training, short-
     term housing, workplace literacy and ESL training, and health 
     and safety instruction, among other purposes. Discretionary 
     funding is authorized to carry out this section. (Section 
     11066)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     amendments to clarify the eligible services that may be 
     provided with grant funds through the program; to specify 
     that assistance may be provided to farmworkers who are 
     citizens or otherwise legally present in the United States; 
     and to establish a 15 percent limit on administrative 
     expenses for the program. (Section 14204)
     (24) Office of small farms and beginning farmers and ranchers
       The Senate amendment establishes an office at USDA to be 
     known as the Office of Small Farms and Beginning Farmers and 
     Ranchers. Section (b) outlines the purposes of the office 
     including ensuring coordination across all agencies; ensuring 
     small, beginning, and socially disadvantaged farmers and 
     ranchers access to all USDA programs; ensuring the number and 
     economic contributions of small, limited resource, beginning 
     and socially disadvantaged farmers and ranchers are 
     accurately reflected in the Census of Agriculture; and 
     assessing and enhancing the effectiveness of outreach 
     programs at the department. Subsection (c) establishes the 
     office should be headed by a director. Subsection (d) 
     outlines the duties of the office including to establish 
     cross-cutting and strategic departmental goals and objectives 
     for small, beginning, and socially disadvantaged farmer and 
     rancher programs. Subsection (e) requires the office to 
     maintain a website to share information with interested 
     producers and to collect and respond to comments from small 
     and beginning farmers and ranchers. Subsection (f) requires 
     the Secretary to provide the office human and capital 
     resources sufficient to allow the office to carry out its 
     duties using funds made available to the Secretary through 
     appropriations acts. Subsection (g) requires an annual report 
     to the Committee on Agriculture of the House of 
     Representatives and the Committee on Agriculture, Nutrition, 
     and Forestry in the Senate. (Section 11088)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment that Section 14013 subsumes this office into the 
     Office of Advocacy and Outreach. (Section 14013)
     (25) Designation of separate cotton-producing States under 
         Cotton Research and Promotion Act
       The House bill amends the definition of ``cotton-producing 
     State'' in the Cotton Research and Promotion Act to include 
     Kansas, Virginia, and Florida as each being considered 
     separate cotton-producing States under the Act, beginning 
     with the 2008 crop of cotton. (Section 11301)
       The Senate amendment designates Kansas, Virginia, and 
     Florida as each being considered separate cotton-producing 
     States effective beginning with the 2008 crop of cotton

[[Page H3673]]

     for purposes of the Cotton Research and Promotion Act. 
     (Section 1713)
       The Conference substitute adopts the Senate provision. 
     (Section 14202)
     (26) Cotton classification services
       The House bill extends the authority of the Secretary to 
     make cotton classification services available to producers of 
     cotton and to collect classification fees from participating 
     producers through FY 2012. The provision authorizes the 
     Secretary to enter into long-term lease agreements that 
     exceed five years or take title to property in order to 
     obtain offices used for the classification of cotton. 
     (Section 11302)
       The Senate amendment authorizes cotton classing services 
     without any fiscal year restrictions. Similar to the House 
     bill, the Senate amendment authorizes the Secretary to enter 
     into long-term lease agreements that exceed five years or 
     take title to property in order to obtain offices used for 
     the classification of cotton. The provision requires the 
     Secretary to consult with the cotton industry in establishing 
     the fees. It ensures that the Federal Advisory Committee Act 
     requirements do not apply to consultations with the US Cotton 
     industry. It also provides greater discretion to the 
     Secretary in establishing the fees. (Section 1712)
       The Conference substitute adopts the Senate provision with 
     an amendment to ensure that the Secretary announces the 
     classification fee and any applicable surcharge for 
     classification services not later than June 1 of the year in 
     which the fee applies.
       The Managers expect the cotton classification fee to be 
     established in the same manner as was applied during the 1992 
     through 2007 fiscal years. The classification fee should 
     continue to be a basic, uniform per bale fee as determined 
     necessary to maintain cost-effective cotton classification 
     service.)n consulting with the cotton industry, the Secretary 
     should demonstrate the level of fees necessary to maintain 
     effective cotton classification services and provide the 
     Department of Agriculture with an adequate operating reserve, 
     while also working to limit adjustments in the year-to-year 
     fee. (Section 14201)
     (27) Availability of excess and surplus computers in rural 
         areas
       The House bill provides that the Secretary may make surplus 
     USDA computers or technical equipment available to any city 
     or town in a rural area. (Section 11303)
       The Senate amendment contains no comparable provision.
       The Conference substitute adopts the House provision with 
     an amendment to ensure that the activities authorized under 
     this section are in addition to, and would not replace, 
     activities conducted under other existing authorities of the 
     Secretary with regard to property disposal.
       The Managers expect the Secretary to use this authority to 
     continue to make available excess or surplus computers to 
     city or towns located in rural areas through organizations 
     that are able to refurbish such equipment and supply it to 
     rural schools, libraries, and city halls in need.
       The intent of the conferees is that local governments 
     include independent school districts. (Section 14220)
     (28) Permanent debarment from participation in Department of 
         Agriculture programs for fraud
       The House bill authorizes the Secretary to permanently 
     debar an individual or entity convicted of knowingly 
     defrauding the United States in connection with any program 
     administered by the Department of Agriculture from any 
     subsequent participation in such programs. (Section 11304)
       The Senate amendment contains no comparable provision.
       The Conference substitute adopts the House provision with 
     an amendment. The amendment provides the Secretary the 
     authority to limit the debarment to not less than ten years. 
     The amendment further provides that debarment shall not have 
     any effect on the receipt of domestic food assistance. 
     (Section 14211)
     (29) No discrimination against use of registered pesticide 
         products or classes of pesticide products
       The House bill prohibits the Secretary from discriminating 
     against the use of specified registered pesticide products or 
     classes of pesticide products in establishing priorities and 
     evaluation criteria for approval of plants, contracts and 
     agreements under the conservation title of this Act. (Section 
     11305)
       The Senate amendment contains no comparable provision.
       The Conference substitute strikes this provision. Insomuch 
     as the underlying House provision was a restatement of long-
     standing policy of the Natural Resources Conservation Service 
     (NRCS), the managers recognize that statutory language is 
     unnecessary.
       The House provision referred to pesticides registered by 
     the Environmental Protection Agency (EPA) in accordance with 
     the Federal Insecticide, Fungicide and Rodenticide Act 
     (FIFRA) and the Food Quality Protection Act (FQPA). A FIFRA 
     registration implies that uses of pesticides have been deemed 
     by EPA to have met established standards of safety to human 
     health and the environment when used in accordance with the 
     label.
       Under various conservation programs authorized in Title II, 
     the managers have directed the Secretary to establish 
     priorities and evaluation criteria to ensure the efficient 
     and effective use of resources.
       However, it is not the intent of the managers to undermine 
     the regulatory framework for the legal use of registered 
     pesticides while implementing various conservation programs 
     in this Title.
       Therefore, in establishing priorities and evaluation 
     criteria for the approval of plans, contracts and agreements 
     under Title II of this Act, it is the expectation of the 
     managers that the NRCS shall neither prohibit the use of 
     specific registered pesticides or classes of pesticides, nor 
     advocate for the use of alternatives to registered pesticides 
     or classes of pesticides.
       The managers intend for NRCS to assist farmers wishing to 
     adopt new technologies and specific pest management 
     strategies that contribute to agricultural production and 
     environmental quality. For example, programs that assist 
     farmers in developing risk mitigation measures regarding 
     pesticide use are entirely consistent with the current 
     regulatory program administered by EPA and would not be in 
     conflict with Congressional intent.
     (30) Prohibition on closure or relocation of county offices 
         for the Farm Service Agency, Rural Development Agency, 
         and Natural Resources Conservation Service
       The House bill prohibits the Secretary from closing or 
     relocating a county or field office of the Farm Service 
     Agency, Rural Development Agency, or Natural Resources 
     Conservation Service for one year following the date of 
     enactment of this Act. (Section 11306)
       The Senate amendment defines ``critical access county FSA 
     office'' in subsection (a) as an office of the Farm Service 
     Agency proposed to be closed during the period beginning on 
     November 10, 2005 and ending on December 31, 2007; proposed 
     to be closed with the closing delayed until after January 1, 
     2008; or included on a list of critical access county FSA 
     offices. FSA offices that are located not more than 20 miles 
     from another FSA office or that employ no full-time 
     equivalent employees are excepted from the definition of 
     critical access county FSA office. Subsection (b) prohibits 
     the Secretary from using any funds to pay the salaries or 
     expenses of any USDA officer or employee to close any 
     critical access county FSA office during the period from the 
     date of enactment through September 30, 2012. The Secretary 
     is required to maintain a staff of not less than 3 full-time 
     equivalent employees in each critical access county FSA 
     office although the staff may be located in any other county 
     office of the FSA in that State. However, a critical access 
     county FSA office must have at least 1 full-time equivalent 
     employee.
       Subsection (c) allows the Secretary to close a critical 
     access county FSA office only on concurrence by Congress and 
     the applicable State Farm Service Agency committee. (Section 
     11071)
       The Conference substitute adopts the House provision with 
     an amendment.
       The Managers have provided the exception paragraph to allow 
     the Secretary to review offices meeting the criteria and 
     close those offices if justified; the language in the 
     exception paragraph does not require the Secretary to close 
     offices meeting the criteria. The Managers expect that the 
     Department will communicate with Congressional delegations 
     about proposed closures and respond to concerns about such 
     closures. (Section 14212)
     (31) Regulation of exports of plants, plant products, 
         biological control organisms, and noxious weeds
       The House bill amends the Agricultural Risk Protection Act 
     of 2000 to require the Secretary to coordinate fruit and 
     vegetable market analyses with the private sector and Foreign 
     Agricultural Service. Further requires the Secretary to list 
     on an Internet website the status of export petitions, an 
     explanation of associated sanitary or phytosanitary issues, 
     and information on the import requirements of foreign 
     countries for fruits and vegetables. (Section 11307)
       The Senate amendment contains no comparable provision.
       The Conference substitute adopts the House provision with 
     an amendment to strike the original language and insert a 
     provision in the Technical Assistance for Specialty Crops 
     program requiring the Secretary to submit an annual report on 
     sanitary and phytosanitary trade barriers.(Section 3203)
     (32) Grants to reduce production of methamphetamines from 
         anhydrous ammonia
       The House bill authorizes the Secretary to make grants to 
     eligible entities to enable such entities to obtain and add 
     to an anhydrous ammonia fertilizer nurse tank a substance 
     that will reduce the amount of methamphetamine that can be 
     produced from such tank. It provides that the grant amount be 
     between $40 and $60, multiplied by the number of nurse tanks 
     for each eligible entity. The provision also authorizes 
     appropriations of not more than $15 million for each of 
     fiscal years 2008 through 2012. (Section 11308)
       The Senate amendment is the same as the House bill, except 
     it provides that a grant can be used either for a physical 
     lock or a chemical substance. (Section 11062)
       The Conference substitute adopts the Senate amendment. 
     (Section 14203)
     (33) USDA Graduate School
       The House bill amends the Federal Agriculture Improvement 
     and Reform Act of 1996 to prohibit the Department of 
     Agriculture

[[Page H3674]]

     from establishing, maintaining, or operating a non-
     appropriated fund instrumentality of the United States to 
     develop, administer, or provide educational training and 
     professional development activities, including educational 
     activities for Federal agencies, Federal employees and other 
     entities, effective October 1, 2008. (Section 11309)
       The Senate amendment contains no comparable provision.
       The Conference substitute adopts the House provision with 
     an amendment.
       The modification keeps the House language but extends the 
     deadline for the General Administrative Board of the Graduate 
     School to transition the Graduate School into a non-
     governmental nonappropriated fund instrumentality to October 
     1, 2009. It further authorizes the Secretary to use available 
     appropriated funds and other resources to assist in the 
     Graduate School's transition. Effective immediately, the 
     Graduate School shall be subject to Federal 
     procurementrocedures in the same manner and subject to the 
     same requirements as a commercial entity. (Section 14213)
     (34) Prevention and investigation of payment and fraud and 
         error
       The House bill amends the Right to Financial Privacy Act of 
     1978 to allow financial institutions to disclosure an 
     individual's financial records to any Government entity that 
     certifies, disburses or collects payments, when such 
     disclosure is necessary for the proper administration of 
     programs. The provision expands the permitted use of the 
     disclosed financial information to include the verification 
     of the identity of any person in connection with Federal 
     payment or collection of funds, or the investigation or 
     recovery of improper Federal payments, improperly collected 
     funds, or an improperly negotiated Treasury check. (Section 
     11310)
       The Senate amendment is the same as the House bill except:
       (1) The provision does not change paragraph (k)(1) of the 
     existing exception in the Right to Financial Privacy Act of 
     1978, which allows disclosure of the name and address of any 
     financial institution customer if the disclosure is necessary 
     for the proper administration of section 1441 of Title 26, 
     title II of the Social Security Act, or the Railroad 
     Retirement Act.
       (2) New paragraph (2) allows disclosure of a customer's 
     financial records, rather than just a customer's name and 
     address as permitted under paragraph (1), to reflect the fact 
     that electronic payments are not directed to customers by 
     means of a name and address, in contrast to paper checks.
       (3) Information may be disclosed under the new paragraph 
     (2)(A) not only to the extent that the information is 
     necessary to verify the identity of any person making or 
     receiving a Federal payment, but also to verify the proper 
     routing and delivery of funds.
       (4) New paragraph (3) applies to a request authorized by 
     paragraph (k)(1) or (2). Similar to the House version, the 
     provision does not allow for the disclosure by a financial 
     institution of the customer's financial records in their 
     entirety, but only the information contained in the records 
     that are relevant to the purpose of the request. (Section 
     11068)
       The Conference substitute adopts the Senate provision. 
     (Section 14205)
     (35) Sense of Congress regarding food deserts, geographically 
         isolated neighborhoods and communities with limited or no 
         access to major chain grocery stores
       The House bill expresses the sense of Congress that the 
     Secretary of Agriculture, in conjunction with the National 
     Institutes of Health, Centers for Disease Control and 
     Prevention, Institute of Medicine, and faith-based 
     organizations, should assess ``food deserts'' in the United 
     States (geographically isolated neighborhoods and communities 
     with limited or no access to major-chain grocery stores), and 
     develop recommendations for eliminating them. (Section 11311)
       The Senate amendment requires the Secretary to study and 
     report on areas in the United States with limited access to 
     affordable and nutritious food, with a focus on predominantly 
     lower-income neighborhoods and communities. (Section 7504)
       The Conference substitute adopts the Senate provision with 
     an amendment to move this provision to the Research Title of 
     this Act, to include and define the term ``food desert,'' and 
     to include an authorization of appropriations for the study. 
     (Section 7527)
     (36) Pigford claims
       The House bill provides that Pigford claimants who have not 
     had their cases determined on the merits may, in a civil 
     action, obtain such a determination. Payments or debt relief 
     are to be exclusively made from mandatory funds provided to 
     carry out this section. The total amount of payments and debt 
     relief are prohibited from exceeding $100 million; 
     additionally, payments and debt relief provided under this 
     section are not to be made from Judgment Fund established by 
     31 U.S.C. 1304. The intent of Congress is to have this 
     section liberally construed. Not later than 60 days after the 
     Secretary receives notice that a Pigford claimant desires to 
     have a determination made on the merits of a claim, the 
     Secretary is to provide the claimant with a report on farm 
     credit loans made within the claimant's county, or adjacent 
     county, by USDA for a period beginning on Jan. 1 of the year 
     or years covered by the complaint and ending on Dec. 31 of 
     the following year or years.
       The report is to contain information on all persons whose 
     loans were accepted, including:
       (a) the race of the applicant;
       (b) the date of the application;
       (c) the date of the loan decision;
       (d) the location of the office making the loan decision; 
     and
       (e) all data relevant to the process of deciding the loan.
       The reports provided by USDA are not to contain identifying 
     information regarding the person that applied for a USDA 
     loan. Claimants who allege discrimination in the application 
     for, or making or servicing of, a farm loan are permitted to 
     seek liquidated damages of $50,000, or a discharge of the 
     debt that was incurred under, or affected by, the alleged 
     discrimination that is the subject of the complaint, and a 
     tax payment in an amount of the liquidated damages and loan 
     principal discharged only if:
       (1) the claimant is able to prove his or her case by 
     substantial evidence; and
       (2) the court decides the case based on documents, 
     submitted by the claimant, that are relevant to the issue of 
     liability and damages.
       The Secretary is prohibited from beginning acceleration on 
     or foreclosure of a loan if the borrower is a Pigford 
     claimant and, during an administrative proceeding, the 
     claimant makes a prima facie case that the foreclosure is 
     related to a Pigford claim. A ``Pigford claimant'' is defined 
     as an individual who previously submitted a late-filing 
     request under section 5(f) of the Pigford consent decree, in 
     the case of Pigford v. Glickman, approved by the U.S. 
     District Court for DC on April 14, 1999. A ``Pigford claim'' 
     is defined as a discrimination complaint, as defined by 
     section 1(h) of the Pigford consent decree and documented 
     under section 5(b) of the decree.
       Mandatory funding of $100 million is to be made for fiscal 
     year 2008. The funding is to remain available until it has 
     been expended for payments and debt relief in satisfaction of 
     claims against the U.S., with respect to a Pigford claimants 
     who have their claims determined on the merits, and for any 
     actions made related to the prohibition regarding 
     foreclosures related to Pigford claims. (Section 11312)
       The Senate amendment is the same as the House bill except:
       (1) Subsection (a)(1) requires all claimants to file in 
     United States District Court for the District of Columbia.
       (2) Subsection (a)(2) connects the definition of 
     ``substantial'' evidence to the one used in the original 
     consent decree.
       (3) Authorizes appropriate funds as necessary beyond the 
     $100 million in mandatory funding. (Section 5402)
       The Conference substitute adopts the Senate amendment with 
     modifications. The Secretary will have 120 days to provide 
     the claimant a report, or may petition the court for an 
     extension. The modification requires the Secretary to 
     retrieve data from within the claimant's county, or, if no 
     documents are found then within an adjacent county as 
     determined by the claimant.
       The modification provides for those who are filing a claim 
     for discrimination involving a noncredit benefit to be able 
     to obtain a report from the Secretary. It also provides for 
     those claimants to receive a maximum of $3,000 
     irrespective of the number of noncredit claims on which 
     the claimant prevails.
       The modification provides for those filers who chose not to 
     go through the expedited resolutions process, to be entitled 
     to actual damages if the claimant prevails.
       The modification also provides a requirement for the 
     Secretary to report once every six months to both the House 
     and Senate Committees on the Judiciary the status of 
     available funds and the number of pending claims under the 
     expedited resolutions process. It further requires the 
     Secretary to notify those Committees once 75% of the funds 
     have been depleted. It further provides for a 2-year statute 
     of limitations to file a claim under this section. (Section 
     14012)
     (37) Sense of Congress relating to claims brought by socially 
         disadvantaged farmers or ranchers
       The Senate amendment contains a sense of Congress that the 
     Secretary should resolve all claims and class actions brought 
     against the United States Department of Agriculture by 
     socially disadvantaged farmers or ranchers including Native 
     Americans, Hispanics, and female farmers regarding 
     discrimination in farm loan program participation. (Section 
     5403)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate amendment with 
     a modification that all pending claims should be resolved 
     expeditiously. (Section 14011)
     (38) Comptroller general study of wastewater infrastructure 
         near United States-Mexico border
       The House bill mandates that the Comptroller General study 
     wastewater infrastructure in rural communities within 150 
     miles of the United States-Mexico border to determine how the 
     Government can assist these communities in updating the 
     wastewater infrastructure. (Section 11313)
       The Senate amendment contains no comparable provision.
       The Conference substitute deletes this provision.
     (39) Elimination of statute of limitations applicable to 
         collection of debt by administrative offset
       The House bill amends 31 U.S.C. 3716(e) to eliminate the 
     statute of limitations within

[[Page H3675]]

     which a government agency can initiate the collection of an 
     outstanding claim by administrative offset. (Section 11314)
       The Senate amendment is the same as the House bill. 
     (Section 11069)
       The Conference substitute adopts the House provision. 
     (Section 14219)
     (40) Pollinator protection
       The House bill cites this section as the ``Pollinator 
     Protection Act of 2007''. It states Congress' findings 
     regarding the importance of bee pollination to agriculture 
     and the concerns related to colony collapse disorder in the 
     bee population. The provision authorizes appropriations, as 
     follows:
        For the Agricultural Research Service at USDA--$3 
     million for each of fiscal years 2008 through 2012 for new 
     personnel, facilities improvement, and additional research at 
     the USDA Bee Research Laboratories; $2.5 million for each of 
     fiscal years 2008 and 2009 for research on honey and native 
     bee physiology, and other research; and $1.75 million for 
     each of fiscal years 2008 through 2010 for an area-wide 
     research program to identify causes and solutions for colony 
     collapse disorder.
        For the Cooperative State Research, Education, and 
     Extension Service--$10 million to fund grants to investigate 
     honey bee biology, immunology, ecology, genomics, 
     bioinformatics, crop pollination and habitat conservation, 
     the effects of insecticides, herbicides and fungicides, and 
     other research.
        For the Animal and Plant Health Inspection 
     Service--$2.25 million for each of fiscal years 2008 through 
     2012 to conduct a honey bee pest and pathogen surveillance 
     program.
       The House bill requires the Secretary to submit a report to 
     Congress on the status and progress of bee research projects. 
     It amends the Food Security Act of 1985 to require the 
     Secretary, when carrying out a conservation program other 
     than the farmland protection program, to establish a priority 
     and provide incentives for increasing habitat for pollinators 
     and to establish practices to protect native and managed 
     pollinators. (Section 11315)
       The Senate amendment contains no comparable provision.
       The Conference substitute adopts the House provision with 
     an amendment to move the research-related items of this 
     provision to the research title of this Act to amend section 
     1672 of the Food, Agriculture, Conservation, and Trade Act of 
     1990 (7 U.S.C. 5925), and to move the conservation-related 
     item of this provision to the conservation title of this Act. 
     (Section 7204)
     (41) Exemption from AQI user fees
       The Senate amendment exempts commercial trucks from payment 
     of agricultural quarantine and inspection user fees if it 
     originates in Alaska and reenters the United States directly 
     from Canada or if it originates in the United States and 
     transits through Canada before entering Alaska. Commercial 
     trucks exempt from user fees are required to remain sealed 
     during transit through Canada. (Section 11080)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (42) Regulations to improve management and oversight of 
         certain regulated articles
       The Senate amendment requires the Secretary to promulgate 
     regulations for improved management and oversight of articles 
     regulated under the Plant Protection Act. (Section 11077)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to change the timeframe for the promulgation of 
     regulations and to make technical changes. This provision can 
     be found in the horticulture and organic agriculture title. 
     (Section 10204)
     (43) Invasive pest and disease emergency response funding 
         clarification
       The Senate amendment clarifies that the Secretary may 
     provide emergency funding to States to combat invasive pest 
     and disease outbreaks for any appropriate period after 
     initial detection of the pest or disease, as determined by 
     the Secretary. (Section 11078)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (44) Invasive species management, Hawaii
       The Senate amendment requires cooperation among the Federal 
     agencies involved in preventing the introduction of and 
     controlling invasive species in the State of Hawaii; requires 
     the development of collaborative Federal and State procedures 
     to minimize the introduction of invasive species into Hawaii, 
     and requires a report to Congress on the development of those 
     procedures; establishes a process for Hawaii to seek approval 
     from the Federal Government to impose restrictions on the 
     introduction or movement of invasive species or disease into 
     the State that are in addition to Federal restrictions; in 
     the event of an emergency or imminent invasive species 
     threat, allows Hawaii to impose restrictions of up to 2 years 
     to prevent introduction of the threat upon approval by the 
     Federal Government. (Section 11063)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision. The 
     Managers remain concerned about the serious and growing 
     invasive species problem in the State of Hawaii. The Managers 
     are aware of the threats that invasive species present to 
     Hawaii's unique ecosystem, which is highly susceptible to 
     invasive species because of the combination of isolation of 
     the Hawaiian islands and high passenger, baggage and cargo 
     traffic to the islands. The Managers encourage the 
     Secretaries of the Department of Agriculture, Interior and 
     Homeland Security to work together in close cooperation with 
     the State of Hawaii to effectively reduce the number of 
     invasive species in Hawaii. The Managers emphasize this 
     collaboration is critical at Hawaiian ports of entry.
     (45) Invasive species revolving loan fund
       The Senate amendment establishes an invasive species 
     revolving loan fund. This loan fund allows eligible units of 
     local government to finance purchases of authorized equipment 
     to monitor, remove, dispose of, and replace infested trees on 
     land under the jurisdiction of the eligible local government 
     and within the boarders of a quarantine area infested by an 
     invasive pest. These loans can be no more than $5,000,000 and 
     shall have an interest rate of two percent. An eligible unit 
     of local government shall work with the Secretary to 
     establish a loan repayment schedule. This schedule requires 
     that not later than one year after the eligible unit of local 
     government received a loan they must repay the loan. The 
     payments can be scheduled semiannually after. (Section 11090)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to move this provision to the horticulture and 
     organic title of this Act, to replace all references to 
     ``invasive species'' with the term ``pest and disease,'' and 
     to strike the provision allowing the unit of local government 
     to use the financing of contracts with individuals and 
     entities as part of the matching requirement in this program. 
     (Section 10205)
     (46) Cooperative agreements relating to invasive species 
         prevention activities
       The Senate amendment allows States to provide cost-sharing 
     assistance or financing mechanism to a unit of local of the 
     State through any cooperative agreement entered into between 
     the Secretary and a State relating to the prevention of 
     invasive species infestation.(Section 11091)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to move this section to the horticulture and 
     organic title of this Act, to amend section 431 of the Plant 
     Protection Act (7 U.S.C. 7751), and to make technical 
     changes. (Section 10206)
     (47) Report relating to the ending of childhood hunger in the 
         United States
       The Senate amendment includes a sense of Congress regarding 
     childhood hunger in the United States. This section specifies 
     that, not later than one year after the date of enactment of 
     the Act, the Secretary shall submit to Congress a report that 
     describes the best and most cost-effective manner by which 
     the federal government could allocate funds to achieve the 
     goal of abolishing childhood hunger and food insecurity by 
     2013. (Section 11082)
       The House bill contains no comparable provision.
       The Conference substitute deletes this provision.
     (48) GAO report on access to health care for farmers
       The Senate amendment provides that the GAO shall provide a 
     report on rural Americans access to health care with a focus 
     on farmers by November 30, 2008. (Section 11074)
       The House bill contains no comparable provision.
       The Conference substitute deletes this provision.
     (49) Conveyance of land to Chihuahuan Desert Natural Park
       The Senate amendment conveys 935.62 acres of land in Dona 
     Ana County New Mexico to the Chihuahuan Desert Nature Park, 
     Inc., a non-profit organization in New Mexico. The land is to 
     be conveyed within one year after enactment of this Act. 
     Subsection (c) outlines the conditions for the land 
     conveyance. The United States reserves all mineral and 
     subsurface rights of the land. The Chihuahuan Desert 
     Nature Board must pay any costs associated relating to the 
     conveyance. Also this subsection requires the land to be 
     used for only educational or scientific purposes. 
     Subsection (d) states if the land is not used for 
     educational or scientific purposes the land may revert to 
     the United States. If the land is environmentally 
     contaminated, the Chihuahuan Desert Nature Park, Inc. or 
     successor is responsible for the contamination and shall 
     be required to remediate the contamination. (Section 
     11075)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to authorize the conveyance, without 
     consideration, of certain lands in the George Washington 
     National Forest. (Section 8302)
     (50) Department of Agriculture conference transparency
       The Senate amendment requires the Secretary to quarterly 
     report to the Inspector General costs and contracting 
     procedures relating to conferences held by USDA for which the 
     cost to the Federal Government was over $10,000. Subsection 
     (c) requires the Secretary to annually report to the Senate 
     and House Agriculture Committees a detailed report about each 
     conference where

[[Page H3676]]

     the USDA paid travel expenses. (Section 11081)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment. The modification provides reporting guidelines 
     for conferences that are held by the Department or attended 
     by employees of the Department. For conferences held by the 
     Department, the Secretary will have to include a description 
     of the contracting procedures related to the conference. The 
     provision is not intended to apply to any training program 
     for employees of the Department, or to conferences held 
     outside the United States and attended by the Secretary or a 
     designee as an official representative of the U.S. 
     Government. Travel under (c)(1)(d) does not apply to local 
     travel for conferences. (Section 14208)
     (51) National emergency grant to address effects of 
         Greensburg, Kansas tornado
       The Senate amendment states the Department of Labor awarded 
     Greensburg, KS a $20 million grant to assist with cleanup 
     from a F5 tornado that hit the town in May of 2007. The 
     language allows the planning process to begin and allow 
     federal funds that have already been awarded to flow more 
     smoothly and efficiently. (Section 11083)
       The House bill contains no comparable provision.
       The Conference substitute deletes this provision.
     (52) Report on program results
       The Senate amendment requires the Secretary to report 
     information regarding programs that have received a Program 
     Assessment Rating Tool score of ``results not demonstrated'' 
     and for each program provide reasons that the program has not 
     been able to demonstrate results, steps taken to demonstrate 
     results and what might be necessary to facilitate the 
     demonstration of results. (Section 11084)
       The House bill contains no comparable provision.
       The Conference substitute deletes this section. The 
     Managers recognize that the reporting requirements in the 
     Senate amendment may duplicate actions already taken by the 
     Secretary in regards to the Program Assessment Rating Tool 
     and that information on Program Assessment Rating Tool scores 
     is publicly available. However, in order to raise greater 
     awareness about such evaluation, the Managers encourage the 
     Secretary to provide progress reports to Congress on the 
     programs that have received a Program Assessment Rating Tool 
     of ``results not demonstrated''.
     (53) Study of impacts of local food systems and commerce
       The Senate amendment requires the Secretary of Agriculture 
     to evaluate the potential community, economic, health and 
     nutrition, environmental, food safety, and food security 
     impacts of advancing local food systems and commerce, the 
     challenges that prevent local foods from comprising a larger 
     share of the per capita food consumption in the United 
     States, and existing and potential strategies, policies, and 
     programs to address those challenges. (Section 11089)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate amendment.
       USDA's Economic Research Service (ERS) has indicated that 
     the Agency is in the process of conducting a study of local 
     food systems, thereby mitigating the need for a statutory 
     mandate in this conference agreement. The ERS study will 
     address issues raised in the Senate amendment including an 
     evaluation of the effects of local food systems on economic 
     activity, nutrition, and environmental resources. ERS has 
     likewise indicated that the study will consider possible 
     reasons for government policies to support local food markets 
     and reduce barriers to growth of that sector.
       The Managers are aware of the budgetary constraints ERS is 
     operating under. In order to minimize costs and maximize the 
     utility of the study being undertaken, the Managers encourage 
     ERS to leverage available resources through collaboration 
     with other appropriate Federal agencies, farm operators 
     serving local markets, institutions of higher education, non-
     governmental organizations, and state and local agencies. To 
     the extent resources and data are available, the Managers 
     also encourage ERS to examine regional market trends and 
     production, processing and distribution needs and evaluate 
     the role and successes of relevant Federal, State, and local 
     policies in areas where the production, processing and 
     consumption of locally grown produce, meat, dairy, and other 
     agricultural products is above normative levels.
     (54) Disclosure of country of harvest for ginseng
       The Senate amendment amends the Agricultural Marketing Act 
     of 1946 (7 U.S.C. 1621 et seq.) It requires persons that sell 
     ginseng at retail to provide the country of harvest by means 
     of a label, stamp, mark, placard, or other easily legible and 
     visible sign on the ginseng or on the package, display, 
     holding unit, or bin containing the ginseng. The Secretary 
     may levy fines for not more than $1,000 for willful 
     violations of this provision. (Section 10004)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
       The Managers have included ginseng in section 11002 of the 
     Livestock Title.
     (55) Definitions
       The Senate amendment defines the following terms used in 
     the subtitle: agent; agricultural biosecurity; agricultural 
     countermeasure; agricultural disease; agriculture; 
     agroterrorist act; animal; department; development; plant; 
     and qualified agricultural countermeasure. (Section 11011)
       The House has no comparable provision.
       The Conference substitute adopts the Senate provision with 
     technical amendments to the definitions and incorporates this 
     provision into the Agricultural Security Improvement Act of 
     2008. (Section 14102)
       The Managers have serious concerns regarding the efforts of 
     the Department of Homeland Security (DHS) to absorb the 
     critical agricultural security functions of the USDA, and 
     DHS' ability to successfully incorporate and manage functions 
     previously housed within the USDA. The USDA is best equipped 
     to handle routine agricultural disease emergencies and 
     emergency response activities in the agricultural sector. 
     While the Managers fully appreciate the vital importance of 
     the broad DHS mandate, DHS has ignored critical expertise 
     within USDA and of the agriculture sector in managing 
     agricultural disease response activities. In doing so, DHS 
     has ignored and failed to incorporate the concerns of the 
     agriculture sector. For example, independent investigations 
     carried out by the House Committee on Agriculture and the 
     Government Accountability Office, as well as a joint audit by 
     the Inspector's General of USDA and DHS, have revealed 
     numerous deficiencies in the agricultural port inspection 
     program. Under DHS leadership, this program has suffered a 
     marked decline in its capability to prevent and detect the 
     movement of agricultural pests and diseases into the United 
     States. This decline in mission capabilities is primarily due 
     to an exodus of experienced staff after the transfer of 
     agricultural inspections from USDA to DHS, declining morale 
     and resources, and the lack of importance placed on the 
     program's mission by DHS management. The Managers believe if 
     this trend continues unabated, the security of the U.S. 
     agriculture sector will be seriously, perhaps irreversibly, 
     jeopardized. In addition, DHS is currently increasing their 
     role in routine agricultural disease response activities and 
     has claimed Federal jurisdiction as the lead agency for these 
     activities traditionally managed by the USDA. Rather than 
     attempt to duplicate the existing functions and capacities of 
     USDA in this critical area, DHS would be better served, and 
     scarce financial resources could be better allocated, if USDA 
     and DHS effectively partnered in securing the Nation's 
     agriculture sector. The Department of Agriculture has over 
     146 years of valuable experience in preventing the 
     introduction of agricultural pests and diseases and 
     effectively managing agricultural disease outbreaks when they 
     occur. To ignore this history is to do a disservice to the 
     agriculture sector, and the Nation at large.
       The Managers are concerned about efforts to reorganize USDA 
     in an attempt to heighten the Department's response and 
     management capabilities regarding threats to agricultural 
     biosecurity. The Managers recognize that the existing 
     structure at USDA to address such threats is adequate, and 
     will continue to successfully prevent, control, and eradicate 
     agricultural diseases. However, the Managers have codified 
     the Office of Homeland Security at USDA in this Act in 
     response to the concerns of other Committees. All homeland 
     security-related activities at USDA will be coordinated by 
     this office, ensuring that USDA will maintain its long 
     tradition of protecting the U.S. agriculture sector from 
     foreign and domestic agricultural pests and diseases. In 
     addition, the Director of the Office of Homeland Security 
     will serve as the primary liaison with other Federal agencies 
     on homeland security coordination efforts, providing USDA 
     with a unified voice on agricultural security matters of 
     Federal concern.
       The Managers expect the Secretary, in establishing the 
     Agricultural Biosecurity Communications Center, to use, to 
     the maximum extent practicable, the existing resources and 
     infrastructure of the Emergency Operations Center of the 
     Animal and Plant Health Inspection Service located in 
     Riverdale, Maryland. In addition, the Managers expect the 
     Secretary to share and coordinate the dissemination of 
     information with the National Operations Center, the National 
     Biosurveillance Integration Center, the National Response 
     Coordination Center, and the National Infrastructure 
     Coordination Center of DHS, as appropriate. The Managers 
     recognize that existing communication activities at DHS will 
     not be hampered by the creation of the Agricultural 
     Biosecurity Communications Center. However, the Managers also 
     recognize the critical need for USDA to maintain and govern 
     its own communication system given the subject matter 
     expertise of USDA officials and their close ties to the 
     domestic agriculture sector and international trading 
     partners who trust their guidance and input.
       The Managers understand that any successful agricultural 
     disease interdiction, prevention, or mitigation effort is 
     largely dependent on local response capabilities. State and 
     regional entities play a critical role in any agricultural 
     disease emergency; however, the Federal government must 
     provide them with the necessary expertise and information to 
     establish successful local programs. The Managers recognize 
     that no Federal agency is better equipped to assist in

[[Page H3677]]

     this endeavor than the Department of Agriculture. USDA enjoys 
     an established network of local veterinarians, plant health 
     professionals, producers, farmers and ranchers who view the 
     Department as a partner in agricultural disease response 
     activities. These long-established relationships will be 
     buttressed by the Agricultural Biosecurity Task Force and 
     will strengthen the Nation's disease response capabilities at 
     the local and regional level. The Managers encourage the 
     Secretary to collaborate with DHS in the provision of 
     agricultural biosecurity best practices to State and tribal 
     regulatory authorities. In doing so, DHS will be afforded the 
     opportunity to benefit from the expertise of USDA in this 
     area of national security.
       The Managers are especially concerned with the degradation 
     of the AQI program following its transfer from USDA to DHS in 
     2002, and are aware that the agriculture sector continues to 
     raise serious concerns about the ability and willingness of 
     DHS to prioritize agricultural quarantine and inspection 
     activities at ports of entry. In light of the broad mandate 
     given to DHS, the Managers understand that limiting the 
     introduction of agricultural pests and diseases into the 
     United States is not a top priority for DHS. While some 
     observers have concluded that the scientific nature of the 
     AQI program does not fit well with the police function of the 
     Customs and Border Protection Program, the Managers have 
     nevertheless chosen to maintain the program within the 
     Department of Homeland Security. As such, the Managers 
     encourage the Secretary to increase USDA's oversight 
     regarding this vitally important program to ensure that the 
     concerns of the agricultural sector are given a priority 
     status commensurate with the threat that these diseases pose 
     to the U.S. economy. To do so, the Managers encourage the 
     Secretary to establish a comprehensive activity reporting 
     mechanism detailing how DHS uses funds transferred by USDA 
     to carry out the AQI program. In order to keep Congress 
     and the public informed about the use of these funds, the 
     Managers encourage the Secretary to provide a detailed 
     accounting to the Senate and House Agriculture Committees 
     on how DHS uses these funds. The Managers strongly 
     encourage the Secretary of Agriculture and the Secretary 
     of Homeland Security to revise the transfer agreement 
     mandated under section 421(e) of the Homeland Security Act 
     of 2002 so that the financial information requested is 
     provided in a timely manner. The Managers intend that any 
     information provided to the Secretary on the use of funds 
     by DHS be scrutinized not only by Congress, but also by 
     the senior leadership of the USDA and DHS to ensure 
     expedient and comprehensive improvements in this program.
       The Managers also encourage the Secretary to seek detailed 
     information to track the promotion of CBP field officers, 
     import specialists, and agricultural specialists into 
     supervisorial and managerial grades since the transfer of 
     function in 2003. The information provided should break out, 
     by fiscal year and by series, the number of employees who 
     have been permanently promoted into supervisor, chief, 
     program manager, assistant port director, and port director 
     positions at ports of entry throughout the country. The 
     information provided should also cite whether the affected 
     employees were legacy customs, immigration, or agriculture 
     personnel.
     (56) National plant disease recovery system and national 
         veterinary stockpile
       The Senate amendment establishes the National Plant Disease 
     Recovery System (NPDRS) in subsection (a). The NPDRS will 
     include agricultural countermeasures, available within a 
     single growing season, to respond to an outbreak of plant 
     disease that poses a significant biosecurity threat. 
     Subsection (b) establishes the National Veterinary Stockpile 
     (NVS). The NVS will include agricultural countermeasures, 
     available to any State veterinarian not later than 24 hours 
     after an official request, to leverage the infrastructure of 
     the strategic national stockpile. (Section 11012)
       The House bill contains no comparable provision.
       The Conference substitute deletes the Senate provision.
     (57) Research and development of agricultural countermeasures
       The Senate amendment establishes a competitive grant 
     program at USDA to stimulate research and development 
     activity for qualified agricultural countermeasures. It 
     provides for a waiver of the competitive grant process in the 
     case of emergencies and permits the use of foreign animal and 
     plant diseases in research and development activities. USDA 
     will provide information to DHS on each grant funded through 
     this authorization. The provision authorizes appropriations 
     of $50,000,000 for each fiscal year from 2008 through 2012. 
     (Section 11013)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to make technical changes. (Section 14121)
     (58) Veterinary workforce grant program
       The Senate amendment establishes a veterinary workforce 
     grant program at USDA to increase the number of veterinarians 
     trained in biosecurity. It authorizes such sums as necessary 
     for each fiscal year from 2008 through 2012. (Section 11014)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to establish a program of competitive grants to 
     veterinarians and food science professionals to increase 
     agricultural biosecurity capacity. (Section 14122)
     (59) Assistance to build local capacity in biosecurity 
         planning, preparedness, and response
       The Senate amendment requires USDA to provide grants to 
     support the development and expansion of advanced training 
     programs in agricultural biosecurity planning and response 
     for food science professionals and veterinarians. The Section 
     also requires USDA to provide grant and low-interest loan 
     assistance to States for use in assessing agricultural 
     disease response capability for food science and veterinary 
     biosecurity planning. (Section 11015)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision and 
     incorporates this section into the Agricultural Security 
     Improvement Act of 2008 (Section 14113).
     (60) Plant protection
       The Senate amendment modifies penalties in the Plant 
     Protection Act (PPA) as follows: $500,000 for each violation 
     adjudicated in a single proceeding; $1,000,000 for each 
     violation adjudicated in a single proceeding involving a 
     genetically modified organism. The provision requires an 
     action, suit or proceeding regarding a violation of the PPA 
     to be considered no later than 5 years after the date the 
     violation is initially discovered by the Secretary. (Section 
     11017)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment/ strike the change to the statute of 
     limitations, to expand the penalties to cover any willful 
     violation of the PPA, and to clarify subpoena authorities of 
     the Department under the PPA. The Conference substitute also 
     modifies the ability of the executive branch to delay the 
     provision of compensation for economic losses under this 
     section. This provision can be found in the horticulture and 
     organic agriculture title of this Act. (Section 10203) 
     Identical amendments were made to the Animal Health 
     Protection Act, and this provision can be found in the 
     livestock title of this Act. (Section 11012)
       The Managers intend for the Secretary or the Secretary's 
     designee to continue to possess the ability to review actions 
     of officers, employees, and agents of the Secretary with 
     regards to the payment of compensation under the Plant 
     Protection Act.
       Further, the Managers expect the additional subpoena 
     authority provided in this section to be used to assist the 
     Secretary in compiling such information, assembling such 
     evidence, and conducting such investigations as the Secretary 
     determines is necessary and proper for the administration and 
     enforcement of this Title.
     (61) Report on stored quantities of propane
       The Senate amendment requires the Secretary of Homeland 
     Security to submit to Congress a report of the effects DHS 
     interim or final regulations regarding possession of 
     quantities of propane that exceed the screening threshold set 
     by the DHS rules. The provision includes number of 
     agricultural facilities and total number of facilities 
     affected, numbers of facilities filing security assessments, 
     alternative security programs, and appeals, as well as costs 
     of compliance. (Section 11070)
       The House bill contains no comparable provision.
       The Conference substitute adopts the Senate provision with 
     an amendment to limit the report to the Committees on 
     Agriculture of the House and Senate, and to strike the 
     subparagraph on the use of the Food and Agricultural Sector 
     Coordinating Council. (Section 14206)

                 I. DISASTER ASSISTANCE TRUST FUND \1\
---------------------------------------------------------------------------

     \1\ The statement of managers does not contain descriptions 
     of the provisions in the House bill and Senate amendment that 
     were not agreed to by the conferees.
---------------------------------------------------------------------------
     (Sec. 12101 of the Senate amendment, sec. 901 of the Trade 
         Act of 1974 and sec. 15101 of the conference agreement)


                              Present Law

       The Farm Service Agency (``FSA'') of the United States 
     Department of Agriculture (``USDA'') offers various ongoing 
     programs for agricultural producers to facilitate recovery 
     from losses caused by natural events. Ongoing programs 
     include the Emergency Conservation Program (``ECP''), the 
     Noninsured Crop Disaster Assistance Program (``NAP''), the 
     Disaster Debt Set-Aside Program (``DSA''), and the Emergency 
     Loan Program (``EM'').
       ECP is a discretionary program funded through annual 
     appropriations that provides funding for farmers and ranchers 
     to rehabilitate farmland damaged by natural disaster and for 
     carrying out emergency water conservation measures during 
     severe drought. The natural disaster must create new 
     conservation problems that if untreated would 1) impair or 
     endanger the land; 2) materially affect the productive 
     capacity of the land; 3) represent unusual damage which, 
     except for wind erosion, is not the type likely to recur 
     frequently in the same area; and 4) be so costly to repair 
     that federal assistance is, or will be required, to return 
     the land to productive agricultural use.

[[Page H3678]]

       NAP provides a low level of insurance to producers who grow 
     otherwise noninsurable crops. NAP provides coverage for crop 
     losses and planting prevented by disasters. Landowners, 
     tenants, or sharecroppers who share in the risk of producing 
     an eligible crop may qualify for this program. Before 
     payments can be issued, applications must first be received 
     and approved, generally before the crop is planted, and the 
     crop must have suffered a minimum of 50 percent loss in 
     yield. Payments are 55 percent of the commodities' average 
     market price on crop losses beyond 50 percent. Eligible crops 
     include commercial crops and other agricultural commodities 
     produced for food, including livestock feed or fiber for 
     which the catastrophic level of crop insurance is 
     unavailable. Also eligible for NAP coverage are controlled-
     environment crops (mushroom and floriculture), specialty 
     crops (honey and maple sap), and value loss crops 
     (aquaculture, Christmas trees, ginseng, ornamental nursery, 
     and turfgrass sod).
       DSA is available to those producers who are borrowers from 
     the Farm Service Agency in primary or contiguous counties 
     that have been declared by the President or designated by the 
     Secretary of Agriculture (``Secretary'') as a disaster area. 
     When borrowers affected by natural disasters are unable to 
     make their scheduled payments on any debt, FSA is authorized 
     to consider the set-aside of some payments to allow the 
     farming operation to continue. After a disaster designation 
     is made, FSA will notify borrowers of the availability of the 
     DSA. Borrowers who are notified have eight months from the 
     date of designation to apply. FSA borrowers may also request 
     a release of income proceeds to meet current operating and 
     family living expenses or may request special servicing 
     provisions from their local FSA county offices to explore 
     other options.
       EM provides emergency loans to help producers recover from 
     production and physical losses due to drought, flooding, 
     other natural disasters, or quarantine. Emergency loans may 
     be made to farmers and ranchers who own or operate land 
     located in a county declared by the President as a disaster 
     area or designated by the Secretary as a disaster area or 
     quarantine area (for physical losses only, the FSA 
     administrator may authorize emergency loan assistance). EM 
     funds may be used to: (1) restore or replace essential 
     property; (2) pay all or part of production costs associated 
     with the disaster year; (3) pay essential family expenses; 
     (4) reorganize the farming operation; and (5) refinance 
     certain debts.


                               House Bill

       No provision.


                            Senate Amendment

     In general
       The provision amends the Trade Act of 1974 to create a 
     permanent Agriculture Disaster Relief Trust Fund (``PADTF'') 
     that would provide payments to farmers and ranchers who 
     suffer losses in areas that are declared disaster areas by 
     the USDA. The trust fund will be funded by an amount equal to 
     3.34 percent of the amounts received in the general fund of 
     the Treasury that are attributable to the duties collected on 
     articles entered, or withdrawn from warehouse, for 
     consumption under the Harmonized Tariff Schedule. The PADTF 
     could make payments under four new disaster assistance 
     programs: the permanent crop disaster assistance program, the 
     permanent livestock indemnity program, the tree assistance 
     program, and the emergency assistance program for livestock, 
     honey bees, and farm raised fish. In addition, the PADTF will 
     also fund a new pest and disease management and disaster 
     prevention program. Amounts not required to meet current 
     withdrawals may be invested in U.S. Treasury obligations with 
     interest credited to the PADTF. The PADTF may also borrow, 
     with interest, as repayable advances sums necessary to carry 
     out the purposes of the fund.
     Permanent Crop Disaster Assistance Program (``PCDP'')
       Generally, PCDP payments will be paid to producers located 
     in disaster counties on 52 percent of the difference between 
     the disaster program guarantee and the sum of total farm 
     revenue. Disaster counties include counties receiving 
     disaster declarations by the Secretary due to production 
     losses resulting directly or indirectly from adverse weather, 
     counties contiguous to such counties, and any farm whose 
     production due to weather was less than 50 percent of normal 
     production. To be eligible for PCDP payments, the producer 
     must have purchased or enrolled in both crop insurance for 
     insurable crops at a minimum of 50 percent of yield at 55 
     percent of price and NAP for uninsurable crops. The Secretary 
     may waive this requirement under certain conditions.
       The disaster program guarantee for insurable crops is equal 
     to the product of a measure of crop yield, the percentage of 
     crop insurance yield guarantee, the percentage of crop 
     insurance price elected by the producer, the crop insurance 
     price, and 115 percent. The disaster program guarantee for 
     noninsured crops is equal to the product of the yield as 
     determined by NAP for each crop, 100 percent of the NAP 
     established price, and 115 percent. The disaster program 
     guarantee is the sum of the disaster program guarantee for 
     insurable and noninsured crops.
       Total farm revenue includes the sum of the estimated value 
     of crops and grazing, crop insurance and NAP indemnities 
     accruing to the farm, the value of prevented planting 
     payments, the amount of other natural disaster assistance 
     payments provided by the federal government to a farm for the 
     same loss, and an amount equal to 20 percent of any direct 
     payments made to the producer under section 1103 of the Farm 
     Security and Rural Investment Act of 2002. The estimated 
     value of crops is generally the product of actual crop 
     acreage grazed or harvested, estimated actual yields of 
     grazing land or crop production, and the average market price 
     during the first five months of the marketing year in which a 
     farm or portion of a farm is located.
     Permanent Livestock Indemnity Program
       The PADTF may also make payments under the permanent 
     livestock indemnity program to eligible producers on farms 
     that have incurred livestock death losses in excess of normal 
     mortality rates during the calendar year due to adverse 
     weather, as determined by the Secretary. Indemnity payments 
     are made at a rate of 75 percent of the fair market value of 
     the livestock on the day before the date of death of the 
     livestock as determined by the Secretary.
     Tree Assistance Program
       The Secretary shall make payments to eligible orchardists 
     as follows. Assistance is in the form of 1) 75 percent 
     reimbursement for the cost of replanting trees lost due to a 
     natural disaster if tree mortality is in excess of 15 
     percent, adjusted for normal mortality, or sufficient 
     seedlings to reestablish a stand; and 2) 50 percent 
     reimbursement of the cost of pruning, removal, and other 
     costs incurred to salvage existing trees or to prepare land 
     to replant trees lost due to a natural disaster in excess of 
     15 percent damage and/or mortality adjusted for normal tree 
     damage and/or mortality.
     Buy-up NAP coverage
       Under NAP, FSA compensates eligible producers for losses of 
     noninsurable crops exceeding 50 percent of the expected yield 
     based on 55 percent of the average market price of the 
     commodity. This provision permits producers to buy additional 
     NAP coverage. Producers could purchase additional coverage 
     guarantee up to 60 or 65 percent, as elected by the 
     producers, of expected yield, and up to 100 percent of the 
     average market price of the commodity. Fees would be 
     established and collected by the Secretary to fully offset 
     the cost of supplemental NAP coverage.
     Emergency assistance for livestock, honey bees, and farm-
         raised fish
       The Secretary shall use up to $35,000,000 annually from the 
     trust fund to provide emergency relief to producers of 
     livestock (including horses), honey bees, and farm-raised 
     fish due to losses from adverse weather or other 
     environmental conditions, such as blizzards and wildfires, as 
     determined by the Secretary, that are not covered under the 
     authority of the Secretary to make qualifying natural 
     disaster declarations. For purposes of the provision, 
     farm-raised fish includes the propagation and rearing of 
     aquatic species (including any species of finfish, 
     mollusk, crustacean, or other aquatic invertebrate, 
     amphibian, reptile, or aquatic plant) in controlled or 
     semi-controlled environments.
     Limitations
       No eligible producer may receive more than $100,000 
     annually in total disaster assistance under this Act. A 
     producer is not eligible for benefits under the provision if, 
     as determined by the Secretary, such producer's adjusted 
     gross income (as defined in section 1001D(a) of the Food 
     Security Act of 1985 or any successor provision) exceeds $2.5 
     million, unless not less than 75 percent of the average 
     adjusted gross income of such producer is derived from 
     farming, ranching or forestry operations.
     Pest and disease management and disaster prevention
       The provision also establishes a new program under which 
     USDA will conduct early pest detection and surveillance 
     activities in coordination with State departments of 
     agriculture, will prioritize and create action plans to 
     address pest and disease threats to specialty crops, and will 
     create an audit-based certification approach to protect 
     against the spread of plant pests.
     Sunset of provision
       The authority provided by the provision expires at the same 
     time as the 2007 Farm Bill.


                          Conference Agreement

     Supplemental Agricultural Disaster Assistance Program 
         description and provisions (For crop years 2008-2011)
       The provision amends the Trade Act of 1974 to create a 
     Supplemental Agricultural Disaster Assistance trust fund 
     (``Trust Fund'') that would provide payments to farmers and 
     ranchers who suffer losses in areas that are designated 
     disaster areas by the USDA. The Trust Fund could make 
     payments under five new disaster assistance programs: the 
     Supplemental Revenue Program (``SURE''), the Livestock Forage 
     Disaster Program (``LFP''), the Livestock Indemnity Program 
     (``LIP''), the Tree Assistance Program (``TAP''), and the 
     Emergency Assistance Program for Livestock, Honey bees, and 
     Farm raised fish.
     Supplemental Revenue Assistance Payments (SURE)
       Section 901(b) SURE Assistance will be available to 
     eligible producers on farms in disaster determined and 
     contiguous counties that have incurred crop production losses 
     and/or crop quality losses.

[[Page H3679]]

       901(a)(5) For purposes of the supplemental revenue 
     assistance program, disaster counties are counties that 
     received Secretarial Disaster declarations due to production 
     losses resulting directly or indirectly from adverse weather. 
     However, Secretarial designations are waived for farms with 
     greater than 50% production losses.
       901(b)(2)(A) SURE Assistance payments will be issued on 60% 
     of the difference between the disaster assistance program 
     guarantee AND total farm revenue (as defined).
       The conferees expect that when payments are calculated, 
     USDA will not discount any final payments for any activity 
     that has already been deducted as an adjustment to a crop 
     insurance indemnity or noninsured assistance payment such as 
     harvest costs, packing, or transportation.
       901(b)(3) The SURE Assistance Program Guarantee is the sum 
     obtained by adding:
       For each insurable commodity, the product obtained by 
     multiplying: the higher of the Adjusted APH yield, or the 
     counter-cyclical program payment yield the percentage of crop 
     insurance yield guarantee, the crop insurance price election, 
     the acres planted or prevented from being planted, and 115%, 
     AND for each non-insurable commodity on the farm, the product 
     obtained by multiplying: the higher of the adjusted 
     noninsured assistance program yield guarantee or the counter-
     cyclical program payment yield, 100% of the NAP established 
     price, the acres planted or prevented from being planted, and 
     120%.
       The conferees intend the price election for revenue 
     products to be the price the crop insurance indemnity would 
     be calculated for the plan of insurance obtained by the 
     producer.
       901(a)(2) The Adjusted APH Yield and Section 901(a)(3) the 
     Adjusted Noninsured Crop Disaster Assistance Yield are 
     determined by dropping replacement yields for producers with 
     at least four years of actual production history. For 
     producers with four years or less, one replacement yield may 
     be dropped from the calculation.
       The SURE Assistance guarantee will be adjusted in the 
     following manners. 901(b)(2)(B) The guarantee may not exceed 
     90% of the expected revenue for the whole farm. 
     901(b)(3)(B)&(C) Where crop insurance or the NAP makes 
     adjustments for prevented planting or un-harvested 
     production, the adjusted guarantee will be the basis for 
     calculating the SURE Assistance guarantee.
       901(b)(3)(D) The Secretary is also charged with the 
     responsibility to establish equitable treatment for non-
     standard crop insurance products like AgriLite.
       901(b)(4) The total Farm Revenue for the farm shall be 
     equal to the sum obtained by adding: the estimated actual 
     value of the production for each crop produced by multiplying 
     the actual crop acreage harvested; the estimated actual 
     yield; the national average market price for the marketing 
     year for each commodity, as determined by the Secretary; the 
     crop insurance or NAP indemnities accruing to the farm; the 
     value of any other natural disaster assistance payments 
     provided by the federal government on a farm for the same 
     loss; 15% of direct payments accruing to the farm; all 
     marketing loan proceeds (including certificate gains); and 
     all counter-cyclical or average crop revenue payments.
       The conferees encourage the Secretary to accept Loss 
     Adjustment yields to determine estimated actual yield when 
     available with the understanding that all of the units for 
     the crop on the farm would need to be adjusted to arrive at 
     total farm production.
       When loss adjusted yields are not available, the conferees 
     expect the Secretary to obtain APH certified yields submitted 
     to the Risk Management Agency through participating crop 
     insurance companies.
       901(b)(4)(B) The Secretary shall adjust the average market 
     price received to reflect average quality discounts applied 
     to the local or regional market price of the crop during the 
     year of production. The Secretary shall also account for crop 
     value reduced due to excess moisture resulting from a 
     disaster related condition.
       The conferees expect the Secretary, assisted by Farm 
     Service Agency State and County committees, will determine 
     local or regional discounts for the marketing year in a 
     manner similar to what has been used to administer recent ad 
     hoc quality loss programs.
       The conferees encourage the Secretary to consider salvage 
     values when quality factors prevent the commodity from being 
     marketed for its originally intended purpose.
       901(b)(5) Expected crop revenue is used to calculate the 
     90% limit of the SURE Assistance Guarantee and is equal to 
     the sum obtained by adding:
       For each insured commodity, the product obtained by 
     multiplying: the higher of the Actual Production History 
     (APH) yield, the Adjusted APH yield, or the counter-cyclical 
     program payment yield; the acreage planted or prevented from 
     being planted; and the insurance price guarantee, AND for 
     each noninsured crop, the product obtained by multiplying: 
     the adjusted non-insurable assistance program (NAP) yield, 
     the adjusted Actual Production History (APH) NAP yield; the 
     acreage planted or prevented from being planted; and 100% of 
     the NAP protection price.
       The entire farm constitutes unit structure for this program 
     including all crops in all counties in the farming operation 
     and shared production.
     Livestock Indemnity Program (LIP)
       901(c)(1) The Trust Fund may also make payments under the 
     Livestock Indemnity Program (LIP) to eligible producers on 
     farms that have incurred livestock death losses in excess of 
     normal mortality rates during the calendar year due to 
     adverse weather, as determined by the Secretary.
       901(c)(2) Indemnity payments are made at a rate of 75 
     percent of the fair market value of the livestock on the day 
     before the date of death of the livestock as determined by 
     the Secretary.
       It is the intent of the conferees that the Secretary shall 
     make LIP payments based upon individual producers' eligible 
     losses. No state, county, or other trigger shall be used by 
     the Secretary to define an eligible LIP area.
       It is expected that the Secretary, through the State Farm 
     Service Agency Committee will obtain recommendations from 
     applicable state livestock organizations, state Cooperative 
     Extension Service, and other knowledgeable and credible 
     sources to establish the normal mortality rate for each type 
     of livestock on a state-by-state basis.
       When determining the market value of applicable livestock 
     in order to determine payment rates for LIP, the Secretary 
     shall establish market values for each type of livestock from 
     credible livestock markets. Credible livestock markets 
     include sale barns, local sales as well as terminal market 
     centers or slaughtering facilities.
     Livestock Forage Disaster Program (LFP)
       901(d) The Livestock Forage Program provides ranchers 
     assistance for forage losses due to drought. Ranchers in 
     counties with droughts designated by the Drought Monitor as 
     severe, extreme or exceptional qualify for assistance. 
     Producers in a severe drought will receive one month's 
     payment. Producers experiencing extreme drought will get two 
     month's payment and producers in a county with an exceptional 
     drought will receive three month's payment. The payment is 60 
     percent of either 1) the monthly feed cost for the total 
     number of livestock covered or, 2) the monthly feed cost 
     calculated by using the normal carrying capacity of the 
     eligible grazing land, whichever is smaller.
       901(d)(4) LFP also covers losses to ranchers whose 
     livestock utilize federal grazing permits. Payments are 
     available to eligible livestock producers whose livestock are 
     prohibited by a Federal agency from grazing due to fire. 
     Payments will be made for the time period beginning on the 
     date the Federal Agency excludes the eligible livestock 
     producer and ending on the last day of the eligible 
     producer's Federal lease. The payment rate is 50 percent of 
     the monthly feed costs for the total number of livestock 
     covered by the Federal lease.
       The conferees intend this section to also apply to trust 
     property and range units managed under the authority of the 
     Department of Interior through the Bureau of Indian Affairs.
       901(d)(1)(D) In order to disallow excessive payments to 
     livestock producers who overgraze pasture and grazing lands 
     the Secretary shall calculate the normal carrying capacity of 
     the eligible livestock producer's grazing and pasture land 
     and issue payments based on the lesser of the actual number 
     of the livestock producer's eligible livestock or the maximum 
     carrying capacity of the eligible livestock producer's 
     pasture and grazing land for the type and weight of the 
     eligible producer's livestock.
       901(d)(5) One of the eligibility requirements for the LFP 
     is that a livestock producer shall have timely applied for 
     and obtained, if available, either crop insurance, including 
     pilot programs implemented by the Risk Management Agency such 
     as the Pastureland Rangeland Forage Program; or coverage 
     under the NAP on the pasture or grazing land which suffered 
     an eligible loss. Producers are not required to purchase any 
     pilot program if they purchase NAP.
       901(d)(5)(C) For the 2008 crop year only, if a livestock 
     producer had not timely obtained either crop insurance or NAP 
     coverage, if it was available, the Secretary shall waive this 
     requirement if the livestock producer pays any fee that would 
     have been required to enroll in either crop insurance or NAP.
       901(d)(5)(D) For any year after 2008, the Secretary may on 
     a case-by-case basis provide equitable relief for producers 
     who the county Farm Service Agency Committee determines 
     unintentionally failed to obtain crop insurance or NAP 
     coverage on applicable grazing and pasture land.
       The conferees recommend that for LFP applications for which 
     payment would be less than $25,000, the State Farm Service 
     Agency Committee may provide equitable relief; and that for 
     LFP applications for which payments exceed $25,000 the 
     Secretary or designee shall review a recommendation from the 
     county and state Farm Service Agency committees and determine 
     whether equitable relief applies.
     Emergency assistance for livestock, honey bees, and farm-
         raised fish
       901(e)(1) The Secretary shall use up to $50,000,000 
     annually from the Trust Fund to provide emergency relief to 
     producers of livestock (including horses), honey bees, and 
     farm-raised fish due to losses from adverse weather or other 
     conditions, such as blizzards and wildfires, as determined by 
     the Secretary.
       The conferees wish to clarify that program is intended to 
     cover disasters that are not adequately covered by any other 
     disaster program.

[[Page H3680]]

     Tree Assistance Program (TAP)
       901(f) The Secretary shall make payments to eligible 
     orchardists and nursery tree growers as follows. Assistance 
     is in the form of 1) 70 percent reimbursement for the cost of 
     replanting trees lost due to a natural disaster if tree 
     mortality is in excess of 15 percent, adjusted for normal 
     mortality, or sufficient seedlings to reestablish a stand; 
     and 2) 50 percent reimbursement of the cost of pruning, 
     removal, and other costs incurred to salvage existing trees 
     or to prepare land to replant trees lost due to a natural 
     disaster in excess of 15 percent damage and/or mortality 
     adjusted for normal tree damage and/or mortality.
       The conferees wish to clarify that the insurance 
     requirement for TAP eligibility refers to insurance on the 
     crop and not on the underlying vines or trees.
     Risk management purchase requirements
       901(g) To be eligible for SURE Assistance, the producer 
     must have purchased or be enrolled in (at a minimum) the 
     Catastrophic crop insurance (CAT) for insurable crops and the 
     Noninsured Assistance Program (NAP) for uninsurable crops.
       901(g)(4) For the 2008 crop year, the Secretary will waive 
     the purchase requirement if producers pay a fee equal to the 
     administrative fees for CAT and NAP on crops for which no 
     coverage has been purchased within 90 days after the 
     enactment of this subtitle.
       The conferees intend that participation in pilot crop 
     insurance programs may establish linkage, but pilot 
     participation would not be necessary to establish linkage if 
     CAT or NAP coverage is secured.
       901(g)(5) The Secretary may provide equitable relief to 
     producers who unintentionally fail to meet the crop insurance 
     or NAP purchase requirements for one or more crops on a farm 
     on a case-by-case basis. For 2008, the Secretary will have 
     additional authority for producers who failed purchase 
     requirements of this subtitle.
       The conferees intend that the Secretary will use equitable 
     relief provisions in circumstances where severe weather 
     events result in revised planting intentions for crops for 
     which the producer had not obtained a minimum CAT or NAP 
     coverage.
       901(g)(3) The Secretary may waive the crop insurance 
     purchase requirement for limited resource, minority and/or 
     beginning farmers and provide disaster assistance benefits at 
     a level deemed appropriate by the Secretary.
       The conferees do not expect the Secretary to conduct an 
     annual signup to participate in the SURE Assistance program. 
     The conferees anticipate an effective public information 
     effort will be conducted by USDA with the cooperation of the 
     Farm Service Agency, the Natural Resources Conservation 
     Service, the Risk Management Agency (including crop insurance 
     companies), the Cooperative State Research, Education, and 
     Extension Service, and State Departments of Agriculture.
     Limitations
       901(h) No eligible producer may receive more than $100,000 
     annually in total disaster assistance under this section, 
     excluding subsection 901(f). A producer is not eligible for 
     benefits under the provision if, as determined by the 
     Secretary, such producer's adjusted gross income (as defined 
     in section 1001D(a) of the Food Security Act of 1985 or any 
     successor provision). Direct attribution of benefits as 
     described in subsection (e) and (f) of Section 1001 of the 
     Food Security Act of 1985 (7 U.S.C. 1308) or any successor 
     provision shall apply.
       The conferees anticipate that the AGI limit would be 
     consistent with limitations for the noninsured assistance 
     program.
       The conferees note that the Tree Assistance Program (TAP) 
     has a separate $100,000 annual limitation.
     Period of effectiveness
       Section 901(i) states that the Supplemental Agricultural 
     Disaster Assistance program shall cover disaster related 
     losses occurring on or before September 30, 2011.
       The conferees expect the Secretary to cover all losses for 
     which disaster conditions were evident on or before September 
     30, 2011.
     Duplicate payments
       Section 901(j) instructs the Secretary to prevent 
     duplicative payments.
       The conferees expect Emergency Conservation Programs (ECP), 
     or any other similar program not directed to production or 
     revenue losses of the farm, are not intended to be covered by 
     this section.
     Agricultural Disaster Relief Trust Fund (Trust Fund)
       902(b) The Trust Fund will be funded by an amount equal to 
     3.08 percent of the amounts received in the general fund of 
     the Treasury that are attributable to the duties collected on 
     articles entered, or withdrawn from warehouse, for 
     consumption under the Harmonized Tariff Schedule. Amounts not 
     required to meet current withdrawals may be invested in U.S. 
     Treasury obligations with interest credited to the trust 
     fund. The Trust Fund may also borrow, with interest, as 
     repayable advances sums necessary to carry out the purposes 
     of the fund.
       902(b)(3) Funds will not be appropriated to the Trust Fund 
     if any changes are made to the operation of the programs 
     within the Trust Fund that are not permitted by the Trust 
     Fund.
     Jurisdiction
       Section 903 requires legislation in the Senate of the 
     United States that amends section 901 or section 902 be 
     referred to the Committee on Finance of the Senate.

            II. REVENUE PROVISIONS FOR AGRICULTURE PROGRAMS

                    A. Extension of Custom User Fees

     (Sec. 15201 of the conference agreement)


                              Present Law

       Section 13031 of the Consolidated Omnibus Budget 
     Reconciliation Act of 1985 (19 U.S.C. 58c) (``COBRA'') 
     authorizes the Secretary of the Treasury to collect certain 
     customs services fees. Section 412 of the Homeland Security 
     Act of 2002 authorizes the Secretary of the Treasury to 
     delegate such authority to the Secretary of Homeland 
     Security. Customs user fees include passenger and conveyance 
     processing fees (e.g., fees for processing air and sea 
     passengers, commercial trucks, rail cars, private aircraft 
     and vessels, commercial vessels, dutiable mail packages, 
     barges and bulk carriers, cargo, and Customs broker permits) 
     and merchandise processing fees. Congress has authorized 
     collection of the passenger and conveyance processing fees 
     through December 27, 2014. The current authorization for the 
     collection of the merchandise processing fees is through 
     December 27, 2014.


                               House Bill

       No provision.


                            Senate Amendment

       No provision.


                          Conference Agreement

       The conference agreement amends Section 13031 of the 
     Consolidated Omnibus Budget Reconciliation Act of 1985 to 
     extend the passenger and conveyance processing fees through 
     September 30, 2017, and extend the merchandise processing 
     fees through November 14, 2017. The conference agreement 
     would require remittance, by no later than September 25, 
     2017, of passenger and conveyance fees for the period July 1, 
     2017 though September 20, 2017. It would also require an 
     estimated prepayment of the merchandise processing fees no 
     later than September 25, 2017 for merchandise entered on or 
     after October 1, 2017 and before November 15, 2017. The 
     estimated prepayment will be based on the amount paid in the 
     equivalent period of the previous year, as determined by the 
     Secretary of the Treasury. The conference agreement also 
     holds service users harmless for overpayments or 
     underpayments of merchandise processing fees by requiring the 
     Secretary of Treasury to reconcile the fees paid with the 
     actual fees incurred for services rendered. The Secretary of 
     Treasury must then refund any overpayments with interest, and 
     make adjustments for any underpayments of such merchandise 
     processing fees.


                             Effective Date

       The provision is effective on the date of enactment.

B. Modifications to Corporate Estimated Tax Payments (Sec. 15202 of the 
                         conference agreement)


                              Present Law

     In general
       In general, corporations are required to make quarterly 
     estimated tax payments of their income tax liability. For a 
     corporation whose taxable year is a calendar year, these 
     estimated tax payments must be made by April 15, June 15, 
     September 15, and December 15.
     Tax Increase Prevention and Reconciliation Act of 2005 
         (``TIPRA'')
       TIPRA provided the following special rules:
       In case of a corporation with assets of at least $1 
     billion, the payments due in July, August, and September 
     2012, shall be increased to 106.25 percent of the payment 
     otherwise due and the next required payment shall be reduced 
     accordingly.
       In case of a corporation with assets of at least $1 
     billion, the payments due in July, August, and September 
     2013, shall be increased to 100.75 percent of the payment 
     otherwise due and the next required payment shall be reduced 
     accordingly.
     Subsequent legislation
       Several public laws have been enacted since TIPRA which 
     further increase the percentage of payments due under each of 
     the two special rules enacted by TIPRA described above.


                               House Bill

       No provision.


                            Senate Amendment

       No provision.


                          Conference Agreement

       The provision makes a modification to the corporate 
     estimated tax payment rules.
       In case of a corporation with assets of at least $1 
     billion, the payments due in July, August, and September 
     2012, are increased by 7\3/4\ percentage points of the 
     payment otherwise due and the next required payment shall be 
     reduced accordingly.


                             Effective Date

       The provision is effective on the date of enactment.

[[Page H3681]]

                          III. TAX PROVISIONS

                            A. Conservation

1. Exclusion of Conservation Reserve Program Payments from SECA tax for 
individuals receiving Social Security retirement or disability payments 
   (Sec. 12202 of the Senate amendment, sec. 15301 of the conference 
                agreement and sec. 1402(a) of the Code)


                              Present Law

       Generally, the Self-Employment Contributions Act (``SECA'') 
     tax is imposed on an individual's net earnings from self-
     employment income within the Social Security wage base. Net 
     earnings from self-employment generally mean gross income 
     (including the individual's net distributive share of 
     partnership income) derived by an individual from any trade 
     or business carried on by the individual less applicable 
     deductions.\2\
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     \2\ Sec, 1402.
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                               House Bill

       No provision.


                            Senate Amendment

       The provision excludes conservation reserve program 
     payments from self-employment income for purposes of the SECA 
     tax in the case of individuals who are receiving Social 
     Security retirement or disability benefits. The treatment of 
     conservation reserve program payments received by other 
     taxpayers is not changed.
       Effective date.--The provision is effective for payments 
     made after December 31, 2007.


                          Conference Agreement

       The conference agreement follows the Senate amendment.

2. Make permanent the special rule encouraging contributions of capital 
gain real property for conservation purposes (Sec. 12203 of the Senate 
 amendment, sec. 15302 of the conference agreement and sec. 170 of the 
                                 Code)


                              Present Law

     Charitable contributions generally
       In general, a deduction is permitted for charitable 
     contributions, subject to certain limitations that depend on 
     the type of taxpayer, the property contributed, and the donee 
     organization. The amount of deduction generally equals the 
     fair market value of the contributed property on the date of 
     the contribution. Charitable deductions are provided for 
     income, estate, and gift tax purposes.\3\
---------------------------------------------------------------------------
     \3\ Secs. 170, 2055, and 2522, respectively. Unless otherwise 
     provided, all section references are to the Internal Revenue 
     Code of 1986, as amended (the ``Code'').
---------------------------------------------------------------------------
       In general, in any taxable year, charitable contributions 
     by a corporation are not deductible to the extent the 
     aggregate contributions exceed 10 percent of the 
     corporation's taxable income computed without regard to net 
     operating or capital loss carrybacks. For individuals, the 
     amount deductible is a percentage of the taxpayer's 
     contribution base, (i.e., taxpayer's adjusted gross income 
     computed without regard to any net operating loss carryback). 
     The applicable percentage of the contribution base varies 
     depending on the type of donee organization and property 
     contributed. Cash contributions of an individual taxpayer to 
     public charities, private operating foundations, and certain 
     types of private nonoperating foundations may not exceed 50 
     percent of the taxpayer's contribution base. Cash 
     contributions to private foundations and certain other 
     organizations generally may be deducted up to 30 percent of 
     the taxpayer's contribution base.
       In general, a charitable deduction is not allowed for 
     income, estate, or gift tax purposes if the donor transfers 
     an interest in property to a charity while also either 
     retaining an interest in that property or transferring an 
     interest in that property to a noncharity for less than full 
     and adequate consideration. Exceptions to this general rule 
     are provided for, among other interests, remainder interests 
     in charitable remainder annuity trusts, charitable remainder 
     unitrusts, and pooled income funds, present interests in the 
     form of a guaranteed annuity or a fixed percentage of the 
     annual value of the property, and qualified conservation 
     contributions.
     Capital gain property
       Capital gain property means any capital asset or property 
     used in the taxpayer's trade or business the sale of which at 
     its fair market value, at the time of contribution, would 
     have resulted in gain that would have been long-term capital 
     gain. Contributions of capital gain property to a qualified 
     charity are deductible at fair market value within certain 
     limitations. Contributions of capital gain property to 
     charitable organizations described in section 170(b)(1)(A) 
     (e.g., public charities, private foundations other than 
     private non-operating foundations, and certain governmental 
     units) generally are deductible up to 30 percent of the 
     taxpayer's contribution base. An individual may elect, 
     however, to bring all these contributions of capital gain 
     property for a taxable year within the 50-percent limitation 
     category by reducing the amount of the contribution deduction 
     by the amount of the appreciation in the capital gain 
     property. Contributions of capital gain property to 
     charitable organizations described in section 170(b)(1)(B) 
     (e.g., private non-operating foundations) are deductible up 
     to 20 percent of the taxpayer's contribution base.
       For purposes of determining whether a taxpayer's aggregate 
     charitable contributions in a taxable year exceed the 
     applicable percentage limitation, contributions of capital 
     gain property are taken into account after other charitable 
     contributions. Contributions of capital gain property that 
     exceed the percentage limitation may be carried forward for 
     five years.
     Qualified conservation contributions
       Qualified conservation contributions are not subject to the 
     ``partial interest'' rule, which generally bars deductions 
     for charitable contributions of partial interests in 
     property. A qualified conservation contribution is a 
     contribution of a qualified real property interest to a 
     qualified organization exclusively for conservation purposes. 
     A qualified real property interest is defined as: (1) the 
     entire interest of the donor other than a qualified mineral 
     interest; (2) a remainder interest; or (3) a restriction 
     (granted in perpetuity) on the use that may be made of the 
     real property. Qualified organizations include certain 
     governmental units, public charities that meet certain public 
     support tests, and certain supporting organizations. 
     Conservation purposes include: (1) the preservation of land 
     areas for outdoor recreation by, or for the education of, the 
     general public; (2) the protection of a relatively natural 
     habitat of fish, wildlife, or plants, or similar ecosystem; 
     (3) the preservation of open space (including farmland and 
     forest land) where such preservation will yield a significant 
     public benefit and is either for the scenic enjoyment of the 
     general public or pursuant to a clearly delineated Federal, 
     State, or local governmental conservation policy; and (4) the 
     preservation of an historically important land area or a 
     certified historic structure.
       Qualified conservation contributions of capital gain 
     property are subject to the same limitations and carryover 
     rules of other charitable contributions of capital gain 
     property.
     Special rule regarding contributions of capital gain real 
         property for conservation purposes
       In general
       Under a temporary provision that is effective for 
     contributions made in taxable years beginning after December 
     31, 2005,\4\ the 30-percent contribution base limitation on 
     contributions of capital gain property by individuals does 
     not apply to qualified conservation contributions (as defined 
     under present law). Instead, individuals may deduct the fair 
     market value of any qualified conservation contribution to an 
     organization described in section 170(b)(1)(A) to the extent 
     of the excess of 50 percent of the contribution base over the 
     amount of all other allowable charitable contributions. These 
     contributions are not taken into account in determining the 
     amount of other allowable charitable contributions.
---------------------------------------------------------------------------
     \4\ Sec. 170(b)(1)(E).
---------------------------------------------------------------------------
       Individuals are allowed to carryover any qualified 
     conservation contributions that exceed the 50-percent 
     limitation for up to 15 years.
       For example, assume an individual with a contribution base 
     of $100 makes a qualified conservation contribution of 
     property with a fair market value of $80 and makes other 
     charitable contributions subject to the 50-percent limitation 
     of $60. The individual is allowed a deduction of $50 in the 
     current taxable year for the non-conservation 
     contributions (50 percent of the $100 contribution base) 
     and is allowed to carryover the excess $10 for up to 5 
     years. No current deduction is allowed for the qualified 
     conservation contribution, but the entire $80 qualified 
     conservation contribution may be carried forward for up to 
     15 years.
       Farmers and ranchers
       In the case of an individual who is a qualified farmer or 
     rancher for the taxable year in which the contribution is 
     made, a qualified conservation contribution is allowable up 
     to 100 percent of the excess of the taxpayer's contribution 
     base over the amount of all other allowable charitable 
     contributions.
       In the above example, if the individual is a qualified 
     farmer or rancher, in addition to the $50 deduction for non-
     conservation contributions, an additional $50 for the 
     qualified conservation contribution is allowed and $30 may be 
     carried forward for up to 15 years as a contribution subject 
     to the 100-percent limitation.
       In the case of a corporation (other than a publicly traded 
     corporation) that is a qualified farmer or rancher for the 
     taxable year in which the contribution is made, any qualified 
     conservation contribution is allowable up to 100 percent of 
     the excess of the corporation's taxable income (as computed 
     under section 170(b)(2)) over the amount of all other 
     allowable charitable contributions. Any excess may be carried 
     forward for up to 15 years as a contribution subject to the 
     100-percent limitation.\5\
---------------------------------------------------------------------------
     \5\ Sec. 170(b)(2)(B).
---------------------------------------------------------------------------
       As an additional condition of eligibility for the 100 
     percent limitation, with respect to any contribution of 
     property in agriculture or livestock production, or that is 
     available for such production, by a qualified farmer or 
     rancher, the qualified real property interest must include a 
     restriction that the property remain generally available for 
     such production. (There is no requirement as to any specific 
     use in agriculture or farming, or necessarily that the 
     property be used for such purposes, merely that the property 
     remain available for such purposes.) Such additional 
     condition does not apply to contributions made on or before 
     August 17, 2006.
       A qualified farmer or rancher means a taxpayer whose gross 
     income from the trade or

[[Page H3682]]

     business of farming (within the meaning of section 
     2032A(e)(5)) is greater than 50 percent of the taxpayer's 
     gross income for the taxable year.
       Termination
       The special rule regarding contributions of capital gain 
     real property for conservation purposes does not apply to 
     contributions made in taxable years beginning after December 
     31, 2007.


                               house bill

       No provision.


                            senate amendment

       The Senate amendment makes permanent the special rule 
     regarding contributions of capital gain real property for 
     conservation purposes.
       Effective date.--The provision is effective for 
     contributions made in taxable years beginning after December 
     31, 2007.


                          conference agreement

       The conference agreement follows the Senate amendment by 
     extending the special rule regarding contributions of capital 
     gain real property for conservation purposes. However, under 
     the conference agreement, the special rule does not apply for 
     contributions made in taxable years beginning after December 
     31, 2009.

 3. Deduction for endangered species recovery expenditures (Sec. 12205 
  of the Senate amendment, sec. 15303 of the conference agreement and 
                         sec. 175 of the Code)


                              present law

       Under present law, a taxpayer engaged in the business of 
     farming may treat expenditures that are paid or incurred by 
     him during the taxable year for the purpose of soil or water 
     conservation in respect of land used in farming, or for the 
     prevention of erosion loss of land used in farming, as 
     expenses that are not chargeable to capital account. Such 
     expenditures are allowed as a deduction, not to exceed 25 
     percent of the gross income derived from farming during the 
     taxable year.\6\ Any excess above such percentage is 
     deductible for succeeding taxable years, not to exceed 25 
     percent of the gross income derived from farming during such 
     succeeding taxable year.
---------------------------------------------------------------------------
     \6\ Sec.175.
---------------------------------------------------------------------------


                               house bill

       No provision.


                            senate amendment

       The Senate amendment provides that expenditures paid or 
     incurred by a taxpayer engaged in the business of farming for 
     the purpose of achieving site-specific management actions 
     pursuant to the Endangered Species Act of 1973 \7\ are to be 
     treated the same as expenditures for the purpose of soil or 
     water conservation in respect of land used in farming, or for 
     the prevention of erosion of land used in farming, i.e., such 
     expenditures are treated as not chargeable to capital account 
     and are deductible subject to the limitation that the 
     deduction may not exceed 25 percent of the farmer's gross 
     income derived from farming during the taxable year.
---------------------------------------------------------------------------
     \7\ 16 U.S.C. 1533(f)(B).
---------------------------------------------------------------------------
       Effective date.--The provision is effective for 
     expenditures paid or incurred after the date of enactment.


                          conference agreement

       The conference agreement follows the Senate amendment, 
     except that the conference agreement provision is effective 
     for expenditures paid or incurred after December 31, 2008.

4. Temporary reduction in corporate tax rate for qualified timber gain; 
  timber REIT provisions (Secs. 12212-12217 of the Senate amendment, 
 secs. 15311-15315 of the conference agreement and secs. 856, 857, and 
                           1201 of the Code)


                              present law

     Treatment of certain timber gain
       Under present law, if a taxpayer cuts standing timber, the 
     taxpayer may elect to treat the cutting as a sale or exchange 
     eligible for capital gains treatment (sec. 631(a)). The fair 
     market value of the timber on the first day of the taxable 
     year in which the timber is cut is used to determine the gain 
     attributable to such cutting. Such fair market value is also 
     considered the taxpayer's cost of the cut timber for all 
     purposes, such as to determine the taxpayer's income from 
     later sales of the timber or timber products. Also, if a 
     taxpayer disposes of the timber with a retained economic 
     interest or makes an outright sale of the timber, the gain is 
     eligible for capital gain treatment (sec. 631(b)). This 
     treatment under either section 631(a) or (b) requires that 
     the taxpayer has owned the timber or held the contract right 
     for a period of more than one year.
       Under present law, for taxable years beginning before 
     January 1, 2011, the maximum rate of tax on long term capital 
     gain (``net capital gain'') \8\ of an individual, estate, or 
     trust is 15 percent. Any net capital gain that otherwise 
     would be taxed at a 10- or 15-percent rate is taxed at a 
     zero-percent rate. These rates apply for purposes of both the 
     regular tax and the alternative minimum tax.\9\
---------------------------------------------------------------------------
     \8\ Net capital gain is defined as the excess of net long-
     term capital gain over net short-term capital gain for the 
     taxable year. Sec. 1222(11).
     \9\ Because the entire amount of the capital gain is included 
     in alternative minimum taxable income (``AMTI''), for 
     taxpayers subject to the alternative minimum tax with AMTI in 
     excess of $112,500 ($150,000 in the case of a joint return), 
     the gain may cause a reduction in the minimum tax exemption 
     amount and thus effectively tax the gain at rates of 21.5 or 
     22 percent. Also the gain may cause the phase-out of certain 
     benefits in computing the regular tax.
---------------------------------------------------------------------------
       For taxable years beginning after December 31, 2010, the 
     maximum rate of tax on the net capital gain of an individual 
     is 20 percent. Any net capital gain that otherwise would be 
     taxed at a 10- or 15-percent rate is taxed at a 10-percent 
     rate. In addition, any gain from the sale or exchange of 
     property held more than five years that would otherwise have 
     been taxed at the 10-percent rate is taxed at an eight-
     percent rate. Any gain from the sale or exchange of property 
     held more than five years and the holding period for which 
     began after December 31, 2000, which would otherwise have 
     been taxed at a 20-percent rate, is taxed at an 18-percent 
     rate.
       The net capital gain of a corporation is taxed at the same 
     rates as ordinary income, up to a maximum rate of 35 
     percent.\10\
---------------------------------------------------------------------------
     \10\ Secs. 11 and 1201.
---------------------------------------------------------------------------
       Real estate investment trusts (``REITs'') are subject to a 
     special taxation regime. Under this regime, a REIT is allowed 
     a deduction for dividends paid to its shareholders.\11\ As a 
     result, REITs generally do not pay tax on distributed income, 
     but the income is taxed to the REIT shareholders. A REIT that 
     has long-term capital gain can declare a dividend that 
     shareholders are entitled to treat as long-term capital gain.
---------------------------------------------------------------------------
     \11\ A distribution to a corporate shareholder out of current 
     or accumulated earnings and profits of the corporation is a 
     dividend, unless the distribution is a redemption that 
     terminates the shareholder's stock interest or reduces the 
     shareholder's interest in the distributing corporation to an 
     extent considered to result in treatment as a sale or 
     exchange of the shareholder's stock. Secs. 301 and 302. A 
     distribution in excess of corporate earnings and profits is 
     treated by shareholders as first a recovery of their stock 
     basis and then, to the extent the distribution exceeds a 
     shareholder's stock basis, as a sale or exchange of the 
     stock. Sec. 301. These rules generally apply to REITs.
---------------------------------------------------------------------------
       REITs generally are required to distribute 90 percent of 
     their taxable income (other than net capital gain). A REIT 
     generally must pay tax at regular corporate rates on any 
     undistributed income. However, a REIT that has net capital 
     gain can retain that gain without distributing it, and the 
     shareholders can report the net capital gain as if it were 
     distributed to them. In that case the REIT pays a C 
     corporation tax on the retained gain, but the shareholders 
     who report the income are entitled to a credit or refund for 
     the difference between the tax that would be due if the 
     income had been distributed and the 35-percent rate paid by 
     the REIT.\12\ In effect, net capital gain of a REIT 
     (including but not limited to timber gain) can be taxed as 
     net capital gain of the shareholders, whether or not the gain 
     is distributed.
---------------------------------------------------------------------------
     \12\ Sec. 857(b)(3)(D). The shareholders also obtain a basis 
     increase in their REIT stock for the gross amount of the 
     deemed distribution that is included in their income less the 
     amount of corporate tax deemed paid by them that was paid by 
     the REIT on the retained gain. Sec. 857(b)(3)(D)(iii).
---------------------------------------------------------------------------
     Other REIT provisions
       A REIT is also subject to a four-percent excise tax to the 
     extent it does not distribute specified percentages of its 
     income within any calendar year. The required distributed 
     percentage is 85 percent in the case of the REIT ordinary 
     income, and 95 percent in the case of the REIT capital gain 
     net income (as defined).\13\ The amount of the excess of 
     the required distribution over the actual distribution is 
     subject to the 4-percent tax.
---------------------------------------------------------------------------
     \13\ Section 4981. The definition is the excess of gains from 
     sales or exchanges of capital assets over losses from such 
     sales or exchanges for the calendar year, reduced by any net 
     ordinary loss.
---------------------------------------------------------------------------
       A REIT generally is restricted to earning certain types of 
     passive income. Among other requirements, at least 75 percent 
     of the gross income of a REIT in a taxable year must consist 
     of certain types of real estate related income, including 
     rents from real property, income from the sale or exchange of 
     real property (including interests in real property) that is 
     not stock in trade, inventory, or held by the taxpayer 
     primarily for sale to customers in the ordinary course of its 
     trade or business, and interest on mortgages secured by real 
     property or interests in real property.\14\ Interests in real 
     property are specifically defined to exclude mineral, oil, or 
     gas royalty interests.\15\ A REIT will not qualify as a REIT, 
     and will be taxable as a C corporation, for any taxable year 
     if it does not meet this income test.
---------------------------------------------------------------------------
     \14\ Section 856(c) and section 1221(a). Income from sales 
     that are not prohibited transactions solely by virtue of 
     section 857(b)(6) is also qualified REIT income.
     \15\ Section 856(c)(5)(C).
---------------------------------------------------------------------------
       Some REITs have been formed to hold land on which trees are 
     grown. Upon maturity of the trees, the standing trees are 
     sold by the REIT. The Internal Revenue Service has issued 
     private letter rulings in particular instances stating that 
     the income from the sale of the trees under section 631(b) 
     can qualify as REIT real property income because the uncut 
     timber and the timberland on which the timber grew is 
     considered real property and the sale of uncut trees can 
     qualify as capital gain derived from the sale of real 
     property.\16\
---------------------------------------------------------------------------
     \16\ Timber income under section 631(b) has also been held to 
     be qualified real estate income even if the one year holding 
     period is not met. See, e.g., PLR 200052021, see also PLR 
     199945055, PLR 199927021, PLR 8838016. A private letter 
     ruling may be relied upon only by the taxpayer to which the 
     ruling is issued. However, such rulings provide an indication 
     of administrative practice.

---------------------------------------------------------------------------

[[Page H3683]]

       A REIT is subject to a 100-percent excise tax on gain from 
     any sale that is a ``prohibited transaction,'' defined as a 
     sale of property that is stock in trade, inventory, or 
     property held by the taxpayer primarily for sale to customers 
     in the ordinary course of its trade or business.\17\ This 
     determination is based on facts and circumstances. However, a 
     safe-harbor provides that no excise tax is imposed if certain 
     requirements are met. In the case of timber property, the 
     safe harbor is met, regardless of the number of sales that 
     occur during the taxable year, if (i) the REIT has held the 
     property for not less than four years in connection with the 
     trade or business of producing timber; (ii) the aggregate 
     adjusted bases of the property sold (other than foreclosure 
     property) during the taxable year does not exceed 10 percent 
     of the aggregate bases of all the assets of the REIT as of 
     the beginning of the taxable year, and if certain other 
     requirements are met. These include requirements that limit 
     the amount of expenditures the REIT can make during the 4-
     year period prior to the sale that are includible in the 
     adjusted basis of the property,\18\ that require marketing to 
     be done by an independent contractor, and that forbid a sales 
     price that is based on the income or profits of any 
     person.\19\ There is a similar but separate safe harbor for 
     sales of non-timber property, with similar rules, including a 
     4-year holding period requirement and a limit on the 
     percentage of the aggregate adjusted basis of property that 
     can be sold in one taxable year.\20\
---------------------------------------------------------------------------
     \17\ Sections 857(b)(6) and 1221(a)(1). There is an exception 
     for certain foreclosure property.
     \18\ Aggregate expenditures (other than timberland 
     acquisition expenditures) during such period made by the REIT 
     or a partner of the REIT, which are includible in basis, may 
     not exceed 30 percent of the net selling price in the case of 
     expenditures that are directly related to operation of the 
     property for the production of timber or the preservation of 
     the property for use as timberland, and may not exceed 5 
     percent of the net selling price in the case of expenditures 
     that are not directly related to those purposes.
     \19\ Section 857(b)(6)(D).
     \20\ Section 857(b)(6)(C).
---------------------------------------------------------------------------
       A REIT is not generally permitted to hold securities 
     representing more than 10 percent of the voting power or 
     value of the securities of any one issuer; nor may more than 
     5 percent of the fair market value of REIT assets be 
     securities of any one issuer.\21\ However, under an 
     exception, a REIT may hold any amount of securities of one or 
     more ``taxable REIT subsidiary'' (TRS) corporations, provided 
     that such TRS securities do not represent more than 20 
     percent of the fair market value of REIT assets at the end of 
     any quarter. A TRS is a C corporation that is subject to 
     regular corporate tax on its income and that meets certain 
     other requirements. A taxable REIT subsidiary may conduct 
     activities that would produce disqualified non-passive or 
     non-real estate income that could disqualify the REIT if 
     conducted by a REIT itself. Such business could include 
     business relating to processing timber, or holding timber 
     products or other assets for sale to customers in the 
     ordinary course of business. Such income would be subject to 
     regular corporate rates of tax as income of the TRS.\22\
---------------------------------------------------------------------------
     \21\ Section 856(c)(4)(B)(ii) and (iii). Certain interests 
     are not treated as ``securities'' for purposes of the rule 
     forbidding the REIT to hold securities representing more than 
     10 percent of the value of securities of any one issuer. Sec. 
     856(m).
     \22\ A 100-percent excise tax is imposed on the amount of 
     certain transactions involving a TRS and a REIT, to the 
     extent such amount would exceed an arm's length amount under 
     section 482. Sec. 857(b)(7).
---------------------------------------------------------------------------


                               House Bill

       No provision.


                            senate amendment

     Elective deduction for 60 percent of qualified timber gain
       The Senate amendment allows a taxpayer to elect to deduct 
     an amount equal to 60 percent of the taxpayer's qualified 
     timber gain (or, if less, the net capital gain) for a taxable 
     year. In the case of an individual, the deduction reduces 
     adjusted gross income. Qualified timber gain means the net 
     gain described in section 631(a) and (b) for the taxable 
     year.
       The deduction is allowed in computing the regular tax and 
     the alternative minimum tax (including the adjusted current 
     earnings of a corporation).
       If a taxpayer elects the deduction, the 40 percent of the 
     gain subject to tax is taxed at ordinary income tax 
     rates.\23\
---------------------------------------------------------------------------
     \23\ Under the provision, because only 40 percent of the gain 
     is included in adjusted gross income and AMTI, only that 
     amount of gain would result in the phase-out of tax benefits.
---------------------------------------------------------------------------
       In the case of a pass-thru entity other than a REIT, the 
     election may be made separately by each taxpayer subject to 
     tax on the gain. The Treasury Department may prescribe rules 
     appropriate to apply this provision to gain taken into 
     account by a pass-thru entity.
       In the case of a REIT, the election to take the 60-percent 
     deduction is made by the REIT. If a REIT makes the election, 
     then the timber gain is excluded from the computation of 
     capital gain or loss of the REIT and can no longer be 
     designated as a capital gain dividend to shareholders. 
     Instead, the gain is treated as ordinary income for purposes 
     of applying the REIT income distribution requirements, but 
     for this purpose 60-percent of the amount of the gain is 
     deductible by the REIT in computing its income. REIT earnings 
     and profits also exclude the portion of the timber gain that 
     is deductible. Thus, 40 percent of the gain is subject to the 
     REIT distribution requirements,\24\ and 40 percent of the 
     gain increases REIT earnings and profits. Accordingly, 
     because REIT earnings and profits have been increased by the 
     40-percent amount, there is sufficient earnings and profits 
     that a distribution of that 40-percent amount that otherwise 
     qualifies as a dividend would be treated as an ordinary 
     dividend distribution to shareholders. Since this dividend is 
     from a REIT and is not derived from an entity that was taxed 
     as a C corporation, it would not qualify for the current 15-
     percent qualified dividend rates and would be taxed at the 
     ordinary income rates of the shareholders.
---------------------------------------------------------------------------
     \24\ For purposes of the section 4981 excise tax on 
     undistributed REIT income, the amount treated as subject to 
     the 95 percent distribution requirement is the 40 percent of 
     timber gain income that remains after allowing the deduction.
---------------------------------------------------------------------------
       REIT shareholders obtain an upward basis adjustment in 
     their REIT interests, equal to the 60 percent of the timber 
     gain that is deductible by the electing REIT. Because the 60 
     percent of timber gain that was deductible by the REIT does 
     not increase REIT earnings and profits, a distribution of 
     such 60 percent to the shareholder generally will not be 
     treated as a dividend (in the absence of other retained 
     earnings) but as a return of basis under the general rules of 
     section 301(c). Because the shareholders' basis has been 
     increased by this 60 percent, this distribution would not 
     exceed the shareholders' basis and thus would be nontaxable 
     return of basis, rather than capital gain in excess of basis. 
     However, if a REIT shareholder has obtained such an upward 
     basis adjustment for a REIT interest and disposes of the 
     interest before having held the interest for at least 6 
     months, then any loss on disposition of the interest is 
     disallowed to the extent of such upward basis adjustment.
     Additional REIT provisions
       Timber gain qualified REIT income without regard to 1 year 
           holding period
       The Senate amendment specifically includes timber gain 
     under section 631(a) as a category of statutorily recognized 
     qualified real estate income of a REIT if the cutting is 
     provided by a taxable REIT subsidiary, and also includes gain 
     recognized under section 631(b). For purposes of such 
     qualified income treatment under those provisions, the 
     requirement of a one-year holding period is removed. Thus, 
     for example, a REIT can acquire timber property and harvest 
     the timber on the property within one year of the 
     acquisition, with the resulting income being qualified real 
     estate income for REIT qualification purposes, even though 
     such income is not eligible for long-term capital gain 
     treatment under sections 631(a) or (b). The provision 
     specifically provides, however, that for all purposes of the 
     Code, such income shall not be considered to be gain 
     described in section 1221(a)(1), that is, it shall not be 
     treated as income from the sale of stock in trade, inventory, 
     or property held by the REIT primarily for sale to customers 
     in the ordinary course of the REITs trade or business.
       For purposes of determining REIT income, if the cutting is 
     done by a taxable REIT subsidiary, the cut timber is deemed 
     sold on the first day of the taxable year to the taxable REIT 
     subsidiary (with subsequent gain, if any, attributable to the 
     taxable REIT subsidiary).
       REIT prohibited transaction safe harbor for timber property
       For sales to a qualified organization for conservation 
     purposes, as defined in section 170(h), the provision reduces 
     to two years the present law four-year holding period 
     requirement under section 857(b)(6)(D), which provides a safe 
     harbor from ``prohibited transaction'' treatment for certain 
     timber property sales. Also, in the case of such sales, the 
     safe-harbor limitations on how much may be added, within the 
     four-year period prior to the date of sale, to the aggregate 
     adjusted basis of the property, are changed to refer to the 
     two-year period prior to the date of sale.
       The Senate amendment also removes the safe-harbor 
     requirement that marketing of the property must be done by an 
     independent contractor, and permits a taxable REIT subsidiary 
     of the REIT to perform the marketing.
       The Senate amendment states that any gain that is eligible 
     for the timber property safe harbor is considered for all 
     purposes of the Code not to be described in section 
     1221(a)(1), that is, it shall not be treated as income from 
     the sale of stock in trade, inventory, or property held by 
     the REIT primarily for sale to customers in the ordinary 
     course of the REITs trade or business.
       Special rules for timber REITs
       The Senate amendment contains several provisions applicable 
     only to a ``timber REIT,'' defined as a REIT in which more 
     than 50 percent of the value of its total assets consists of 
     real property held in connection with the trade or business 
     of producing timber.
       First, mineral royalty income from real property owned by a 
     timber REIT and held, or once held, in connection with the 
     trade or business of producing timber by such REIT, is 
     included as qualifying real estate income for purposes of the 
     REIT income tests.
       Second, a timber REIT is permitted to hold TRS securities 
     with a value up to 25 percent, (rather than 20 percent) of 
     the value of the total assets of the REIT.

[[Page H3684]]

     Effective date
       The provision applies to taxable years beginning after the 
     date of enactment, but does not apply after the last day of 
     the first taxable year beginning after the date of enactment.


                          Conference Agreement

     Corporate rate reduction for qualified timber gain
       The conference agreement provides a 15-percent alternative 
     tax rate for corporations on the portion of a corporation's 
     taxable income that consists of qualified timber gain (or, if 
     less, the net capital gain) for a taxable year.\25\
---------------------------------------------------------------------------
     \25\ The conference agreement does not contain the 60 percent 
     deduction for qualified timber income that was contained in 
     the Senate amendment, nor does it make any change to section 
     4981.
---------------------------------------------------------------------------
       The alternative 15-percent tax rate applies to both the 
     regular tax and the alternative minimum tax.
       Qualified timber gain means the net gain described in 
     section 631(a) and (b) for the taxable year, determined by 
     taking into account only trees held more than 15 years.
       Effective date.--The provision applies to taxable years 
     ending after the date of enactment and beginning on or before 
     the date which is one year after the date of enactment. In 
     the case of a taxable year that includes the date of 
     enactment, qualified timber gain may not exceed the qualified 
     timber gain properly taken into account for the portion of 
     the year after that date. In the case of a taxable year that 
     includes the date that is one year after the date of 
     enactment, qualified timber gain may not exceed the qualified 
     timber gain properly taken into account for the portion of 
     the year on or before that date.
     Additional REIT provisions
       The conference agreement follows the additional REIT 
     provisions in the Senate amendment.
       Effective date.--The additional REIT provisions apply only 
     for the first taxable year of the REIT that begins after the 
     date of enactment and before the date that is one year after 
     the date of enactment. The provisions terminate after that 
     time.

  5. Qualified forestry conservation bonds (Sec. 12808 of the Senate 
amendment, and sec. 15316 of the conference agreement and new secs. 54A 
                          and 54B of the Code)


                              Present Law

     Tax-exempt bonds
       In general
       Subject to certain Code restrictions, interest on bonds 
     issued by State and local government generally is excluded 
     from gross income for Federal income tax purposes. Bonds 
     issued by State and local governments may be classified as 
     either governmental bonds or private activity bonds. 
     Governmental bonds are bonds the proceeds of which are 
     primarily used to finance governmental functions or which are 
     repaid with governmental funds. Private activity bonds are 
     bonds in which the State or local government serves as a 
     conduit providing financing to nongovernmental persons. For 
     this purpose, the term ``nongovernmental person'' generally 
     includes the Federal Government and all other individuals and 
     entities other than States or local governments. The 
     exclusion from income for interest on State and local bonds 
     does not apply to private activity bonds, unless the bonds 
     are issued for certain permitted purposes (``qualified 
     private activity bonds'') and other Code requirements are 
     met.
       Private activity bond tests
       Present law provides two tests for determining whether a 
     State or local bond is in substance a private activity bond, 
     the private business test and the private loan test.\26\
---------------------------------------------------------------------------
     \26\ Sec. 141(b) and (c).
---------------------------------------------------------------------------
       Private business tests
       Private business use and private payments result in State 
     and local bonds being private activity bonds if both parts of 
     the two-part private business test are satisfied--
       1. More than 10 percent of the bond proceeds is to be used 
     (directly or indirectly) by a private business (the ``private 
     business use test''); and
       2. More than 10 percent of the debt service on the bonds is 
     secured by an interest in property to be used in a private 
     business use or to be derived from payments in respect of 
     such property (the ``private payment test'').\27\
---------------------------------------------------------------------------
     \27\ The 10-percent private business use and payment 
     threshold is reduced to five percent for private business 
     uses that are unrelated to a governmental purpose also being 
     financed with proceeds of the bond issue. In addition, as 
     described more fully below, the 10-percent private business 
     use and private payment thresholds are phased-down for larger 
     bond issues for the financing of certain ``output'' 
     facilities. The term output facility includes electric 
     generation, transmission, and distribution facilities.
---------------------------------------------------------------------------
       Private business use generally includes any use by a 
     business entity (including the Federal Government), which 
     occurs pursuant to terms not generally available to the 
     general public. For example, if bond-financed property is 
     leased to a private business (other than pursuant to certain 
     short-term leases for which safe harbors are provided under 
     Treasury regulations), bond proceeds used to finance the 
     property are treated as used in a private business use, and 
     rental payments are treated as securing the payment of the 
     bonds. Private business use also can arise when a 
     governmental entity contracts for the operation of a 
     governmental facility by a private business under a 
     management contract that does not satisfy Treasury regulatory 
     safe harbors regarding the types of payments made to the 
     private operator and the length of the contract.\28\
---------------------------------------------------------------------------
     \28\ See Treas. Reg. sec. 1.141-3(b)(4) and Rev. Proc. 97-13, 
     1997-1 C.B. 632.
---------------------------------------------------------------------------
       Private loan test
       The second standard for determining whether a State or 
     local bond is a private activity bond is whether an amount 
     exceeding the lesser of (1) five percent of the bond proceeds 
     or (2) $5 million is used (directly or indirectly) to finance 
     loans to private persons. Private loans include both business 
     and other (e.g., personal) uses and payments by private 
     persons; however, in the case of business uses and payments, 
     all private loans also constitute private business uses and 
     payments subject to the private business test. Present law 
     provides that the substance of a transaction governs in 
     determining whether the transaction gives rise to a private 
     loan. In general, any transaction which transfers tax 
     ownership of property to a private person is treated as a 
     loan.
       Qualified private activity bonds
       As stated, interest on private activity bonds is taxable 
     unless the bonds meet the requirements for qualified private 
     activity bonds. Qualified private activity bonds permit 
     States or local governments to act as conduits providing tax-
     exempt financing for certain private activities. The 
     definition of qualified private activity bonds includes an 
     exempt facility bond, or qualified mortgage, veterans' 
     mortgage, small issue, redevelopment, 501(c)(3), or student 
     loan bond (sec. 141(e)). The definition of exempt facility 
     bond includes bonds issued to finance certain transportation 
     facilities (airports, ports, mass commuting, and high-speed 
     intercity rail facilities); qualified residential rental 
     projects; privately owned and/or operated utility facilities 
     (sewage, water, solid waste disposal, and local district 
     heating and cooling facilities, certain private electric and 
     gas facilities, and hydroelectric dam enhancements); public/
     private educational facilities; qualified green building and 
     sustainable design projects; and qualified highway or surface 
     freight transfer facilities (sec. 142(a)).
       In most cases, the aggregate volume of these tax-exempt 
     private activity bonds is restricted by annual aggregate 
     volume limits imposed on bonds issued by issuers within each 
     State. For calendar year 2007, the State volume cap, which is 
     indexed for inflation, equals $85 per resident of the State, 
     or $256.24 million, if greater.
       Arbitrage restrictions
       The tax exemption for State and local bonds also does not 
     apply to any arbitrage bond.\29\ An arbitrage bond is defined 
     as any bond that is part of an issue if any proceeds of the 
     issue are reasonably expected to be used (or intentionally 
     are used) to acquire higher yielding investments or to 
     replace funds that are used to acquire higher yielding 
     investments.\30\ In general, arbitrage profits may be earned 
     only during specified periods (e.g., defined ``temporary 
     periods'') before funds are needed for the purpose of the 
     borrowing or on specified types of investments (e.g., 
     ``reasonably required reserve or replacement funds''). 
     Subject to limited exceptions, investment profits that are 
     earned during these periods or on such investments must be 
     rebated to the Federal Government.
---------------------------------------------------------------------------
     \29\ Sec. 103(a) and (b)(2).
     \30\ Sec. 148.
---------------------------------------------------------------------------
       Indian tribal governments
       Indian tribal governments are provided with a tax status 
     similar to State and local governments for specified purposes 
     under the Code.\31\ Among the purposes for which a tribal 
     government is treated as a State is the issuance of tax-
     exempt bonds. However, bonds issued by tribal governments are 
     subject to limitations not imposed on State and local 
     government issuers. Tribal governments are authorized to 
     issue tax-exempt bonds only if substantially all of the 
     proceeds are used for essential governmental functions or 
     certain manufacturing facilities.\32\
---------------------------------------------------------------------------
     \31\ Sec. 7871.
     \32\ Sec. 7871(c).
---------------------------------------------------------------------------
     Clean renewable energy bonds
       As an alternative to traditional tax-exempt bonds, States 
     and local governments may issue clean renewable energy bonds 
     (``CREBs''). CREBs are defined as any bond issued by a 
     qualified issuer if, in addition to the requirements 
     discussed below, 95 percent or more of the proceeds of such 
     bonds are used to finance capital expenditures incurred by 
     qualified borrowers for qualified projects. ``Qualified 
     projects'' are facilities that qualify for the tax credit 
     under section 45 (other than Indian coal production 
     facilities), without regard to the placed-in-service date 
     requirements of that section.\33\ The term ``qualified 
     issuers'' includes (1) governmental bodies (including 
     Indian tribal governments); (2) mutual or cooperative 
     electric companies (described in section 501(c)(12) or 
     section 1381(a)(2)(C), or a not-for-profit electric 
     utility which has received a loan or guarantee under the 
     Rural Electrification Act); and (3) clean renewable energy 
     bond lenders. The term ``qualified borrower'' includes a 
     governmental body (including an Indian tribal government) 
     and a mutual or cooperative electric company. A clean 
     renewable energy

[[Page H3685]]

     bond lender means a cooperative which is owned by, or has 
     outstanding loans to, 100 or more cooperative electric 
     companies and is in existence on February 1, 2002.
---------------------------------------------------------------------------
     \33\ In addition, Notice 2006-7 provides that qualified 
     projects include any facility owned by a qualified borrower 
     that is functionally related and subordinate to any facility 
     described in section 45(d)(1) through (d)(9) and owned by 
     such qualified borrower.
---------------------------------------------------------------------------
       Unlike tax-exempt bonds, CREBs are not interest-bearing 
     obligations. Rather, the taxpayer holding CREBs on a credit 
     allowance date is entitled to a tax credit. The amount of the 
     credit is determined by multiplying the bond's credit rate by 
     the face amount on the holder's bond. The credit rate on the 
     bonds is determined by the Secretary and is to be a rate that 
     permits issuance of CREBs without discount and interest cost 
     to the qualified issuer. The credit accrues quarterly and is 
     includible in gross income (as if it were an interest payment 
     on the bond), and can be claimed against regular income tax 
     liability and alternative minimum tax liability.
       CREBs are subject to a maximum maturity limitation. The 
     maximum maturity is the term which the Secretary estimates 
     will result in the present value of the obligation to repay 
     the principal on a CREBs being equal to 50 percent of the 
     face amount of such bond. In addition, the Code requires 
     level amortization of CREBs during the period such bonds are 
     outstanding.
       CREBs also are subject to the arbitrage requirements of 
     section 148 that apply to traditional tax-exempt bonds. 
     Principles under section 148 and the regulations thereunder 
     apply for purposes of determining the yield restriction and 
     arbitrage rebate requirements applicable to CREBs.
       In addition to the above requirements, at least 95 percent 
     of the proceeds of CREBs must be spent on qualified projects 
     within the five-year period that begins on the date of 
     issuance. To the extent less than 95 percent of the proceeds 
     are used to finance qualified projects during the five-year 
     spending period, bonds will continue to qualify as CREBs if 
     unspent proceeds are used within 90 days from the end of such 
     five-year period to redeem any ``nonqualified bonds.'' The 
     five-year spending period may be extended by the Secretary 
     upon the qualified issuer's request demonstrating that the 
     failure to satisfy the five-year requirement is due to 
     reasonable cause and the projects will continue to proceed 
     with due diligence.
       Issuers of CREBs are required to report issuance to the IRS 
     in a manner similar to the information returns required for 
     tax-exempt bonds. There is a national CREB limitation of $1.2 
     billion. The maximum amount of CREBs that may be allocated to 
     qualified projects of governmental bodies is $750 million. 
     CREBs must be issued before January 1, 2009.


                               house bill

       No provision.


                            senate amendment

       The Senate amendment creates a new category of tax-credit 
     bonds, qualified forestry conservation bonds. Qualified 
     forestry conservation bonds are bonds issued by qualified 
     issuers to finance qualified forestry conservation projects. 
     The term ``qualified issuer'' means a State or a section 
     501(c)(3) organization. The term ``qualified forestry 
     conservation project'' means the acquisition by a State or 
     section 501(c)(3) organization from an unrelated person of 
     forest and forest land that meets the following 
     qualifications: (1) some portion of the land acquired must be 
     adjacent to United States Forest Service Land; (2) at least 
     half of the land acquired must be transferred to the United 
     States Forest Service at no net cost and not more than half 
     of the land acquired may either remain with or be donated to 
     a State; (3) all of the land must be subject to a habitat 
     conservation plan for native fish approved by the United 
     States Fish and Wildlife Service; and (4) the amount of 
     acreage acquired must be at least 40,000 acres.
       There is a national limitation on qualified forestry 
     conservation bonds of $500 million. Allocations of qualified 
     forestry conservation bonds are among qualified forestry 
     conservation projects in the manner the Secretary determines 
     appropriate so as to ensure that all of such limitation is 
     allocated before the date that is 24 months after the date of 
     enactment. The Senate amendment also requires the Secretary 
     to solicit applications for allocations of qualified forestry 
     conservation bonds no later than 90 days after the date of 
     enactment.
       The Senate amendment requires 100 percent of the available 
     project proceeds of qualified forestry conservation bonds to 
     be used within the three-year period that begins on the date 
     of issuance. The Senate amendment defines available project 
     proceeds as proceeds from the sale of the issue less issuance 
     costs (not to exceed two percent) and any investment earnings 
     on such sale proceeds. To the extent less than 100 percent of 
     the available project proceeds are used to finance qualified 
     forestry conservation purposes during the three-year spending 
     period, bonds will continue to qualify as qualified forestry 
     conservation bonds if unspent proceeds are used within 90 
     days from the end of such three-year period to redeem bonds. 
     The three-year spending period may be extended by the 
     Secretary upon the issuer's request demonstrating that the 
     failure to satisfy the three-year requirement is due to 
     reasonable cause and the projects will continue to proceed 
     with due diligence.
       Qualified forestry conservation bonds generally are subject 
     to the arbitrage requirements of section 148. However, 
     available project proceeds invested during the three-year 
     spending period are not subject to the arbitrage restrictions 
     (i.e., yield restriction and rebate requirements). In 
     addition, amounts invested in a reserve fund are not subject 
     to the arbitrage restrictions to the extent: (1) such fund is 
     funded in a manner reasonably expected to result in an amount 
     not greater than an amount necessary to repay the issue; and 
     (2) the yield on such fund is not greater than the average 
     annual interest rate of tax-exempt obligations having a term 
     of 10 years or more that are issued during the month the 
     qualified forestry conservation bonds are issued.
       The maturity of qualified forestry conservation bonds is 
     the term that the Secretary estimates will result in the 
     present value of the obligation to repay the principal on 
     such bonds being equal to 50 percent of the face amount of 
     such bonds, using as a discount rate the average annual 
     interest rate of tax-exempt obligations having a term of 10 
     years or more that are issued during the month the qualified 
     forestry conservation bonds are issued.
       As with present-law tax credit bonds, the taxpayer holding 
     qualified forestry conservation bonds on a credit allowance 
     date is entitled to a tax credit. The credit rate is set by 
     the Secretary at 70 percent of the rate that would permit 
     issuance of qualified forestry conservation bonds without 
     discount and interest cost to the issuer. The amount of the 
     tax credit to the holder is determined by multiplying the 
     bond's credit rate by the face amount on the holder's bond. 
     The credit accrues quarterly, is includible in gross income 
     (as if it were an interest payment on the bond), and can be 
     claimed against regular income tax liability and alternative 
     minimum tax liability. Unused credits in one year may be 
     carried forward to succeeding taxable years. In addition, 
     credits may be separated from the ownership of the underlying 
     bond similar to how interest coupons can be stripped for 
     interest-bearing bonds.
       Issuers of qualified forestry conservation bonds are 
     required to certify that the financial disclosure 
     requirements that apply to State and local bonds offered for 
     sale to the general public are satisfied with respect to any 
     Federal, State, or local government official directly 
     involved with the issuance of such bonds. The Senate 
     amendment authorizes the Secretary to impose additional 
     financial reporting requirements by regulation.
       Effective date.--The provision is effective for bonds 
     issued after the date of enactment.


                          Conference Agreement

       The conference agreement includes the Senate amendment with 
     modifications. Under the conference agreement, the credit 
     rate on qualified forestry conservation bonds is determined 
     by the Secretary at the rate that permits issuance of such 
     bonds without discount and interest cost to the qualified 
     issuer.
       The conference agreement also provides that a qualified 
     issuer receiving an allocation to issue qualified forestry 
     conservation bonds may, in lieu of issuing bonds, elect to 
     treat such allocation as a deemed payment of tax (regardless 
     of whether the issuer is subject to tax under chapter 1 of 
     the Code) that is equal to 50 percent of the amount of such 
     allocation. An election to treat an allocation of qualified 
     forestry conservation bonds as a deemed payment is not valid 
     unless the qualified issuer certifies to the Secretary that 
     any payment of tax refunded to the issuer will be used 
     exclusively for one or more qualified forestry conservation 
     purposes. The deemed tax payment may not be used as an offset 
     or credit against any other tax and shall not accrue 
     interest. In addition, if the qualified issuer fails to use 
     any portion of the overpayment for qualified forestry 
     conservation purposes, the issuer shall be liable to the 
     United States in an amount equal to such portion, plus 
     interest, for the period from the date such portion was 
     refunded to the date such amount is paid.
       Effective date.--The provision is effective for bonds 
     issued after the date of enactment.

                          B. Energy Provisions

   1. Credit for production of cellulosic biofuel (Sec. 12312 of the 
Senate amendment, sec. 15321 of the conference agreement and sec. 40 of 
                               the Code)


                              present law

       In the case of ethanol, the Code provides a separate 10-
     cents-per-gallon credit for up to 15 million gallons per year 
     for small producers, defined generally as persons whose 
     production capacity does not exceed 60 million gallons per 
     year. The ethanol must (1) be sold by such producer to 
     another person (a) for use by such other person in the 
     production of a qualified alcohol fuel mixture in such 
     person's trade or business (other than casual off-farm 
     production), (b) for use by such other person as a fuel in a 
     trade or business, or, (c) who sells such ethanol at retail 
     to another person and places such ethanol in the fuel tank of 
     such other person; or (2) used by the producer for any 
     purpose described in (a), (b), or (c). A cooperative may pass 
     through the small ethanol producer credit to its patrons. The 
     credit is includible in income and is treated as a general 
     business credit, subject to the ordering rules and 
     carryforward/carryback rules that apply to business credits 
     generally. The alcohol fuels tax credit, of which the small 
     producer credit is a part, is scheduled to expire after 
     December 31, 2010.
       Under the Renewable Fuels Standard Program all renewable 
     fuel produced or imported on or after September 1, 2007 must 
     have a renewable identification number (RIN) associated with 
     it. Producers and importers must generate RINs to represent 
     all

[[Page H3686]]

     the renewable fuel they produce or import and provide those 
     RINs to the EPA. For cellulosic ethanol, 2.5 RINs are 
     generated for every gallon produced.


                               house bill

       No provision.


                            senate amendment

       The Senate amendment provides an income tax credit for each 
     gallon of qualified cellulosic fuel production of the 
     producer for the taxable year. The amount of the credit per 
     gallon is $1.25 less the credit amount for alcohol fuel and 
     the credit amount for small ethanol producers as of the date 
     the cellulosic biofuel fuel is produced. This credit is in 
     addition to any credit that may be available under section 40 
     of the Code.
       Qualified cellulosic biofuel production is any cellulosic 
     biofuel which is produced by the taxpayer and which is sold 
     by such producer to another person (a) for use by such other 
     person in the production of a qualified biofuel fuel mixture 
     in such person's trade or business (other than casual off-
     farm production), (b) for use by such other person as a fuel 
     in a trade or business, or, (c) who sells such biofuel at 
     retail to another person and places such biofuel in the fuel 
     tank of such other person; or (2) used by the producer for 
     any purpose described in (a), (b), or (c).
       Cellulosic biofuel means any alcohol, ether, ester, or 
     hydrocarbon that is produced in the United States and is 
     derived from any lignocellulosic or hemicellulosic matter 
     that is available on a renewable or recurring basis. However, 
     it does not include any alcohol with a proof of less than 
     150. Examples of lignocellulosic or hemicellulosic matter 
     that is available of a renewable or recurring basis 
     include dedicated energy crops and trees, wood and wood 
     residues, plants, grasses, agricultural residues, fibers, 
     animal wastes and other waste materials, and municipal 
     solid waste. A qualified cellulosic biofuel mixture is a 
     mixture of cellulosic biofuel and any petroleum fuel 
     product which is sold by the person producing such mixture 
     to any person for use as a fuel, or is used as a fuel by 
     the person producing such mixture.
       The credit terminates on April 1, 2015.
       The Senate amendment waives the 15 million gallon 
     limitation of the small ethanol producer credit for 
     cellulosic biofuel that is ethanol.
       Effective date.--The provision is effective for fuel 
     produced after December 31, 2007.


                          Conference Agreement

       The conference agreement adds a new component to section 40 
     of the Code, the ``cellulosic biofuel producer credit.'' This 
     credit is a nonrefundable income tax credit for each gallon 
     of qualified cellulosic fuel production of the producer for 
     the taxable year. The amount of the credit per gallon is 
     $1.01, except in the case of cellulosic biofuel that is 
     alcohol. In the case of cellulosic biofuel that is alcohol, 
     the $1.01 credit amount is reduced by (1) the credit amount 
     applicable for such alcohol under the alcohol mixture credit 
     as in effect at the time cellulosic biofuel is produced and 
     (2) in the case of cellulosic biofuel that is ethanol, the 
     credit amount for small ethanol producers as in effect at the 
     time the cellulosic biofuel fuel is produced. The reduction 
     applies regardless of whether the producer claims the alcohol 
     mixture credit or small ethanol producer credit with respect 
     to the cellulosic alcohol. When the alcohol mixture credit 
     and small ethanol producer credit expire after December 31, 
     2010, cellulosic biofuel will receive the $1.01 without 
     reduction.
       ``Qualified cellulosic biofuel production'' is any 
     cellulosic biofuel which is produced by the taxpayer and 
     which is sold by the taxpayer to another person (a) for use 
     by such other person in the production of a qualified biofuel 
     fuel mixture in such person's trade or business (other than 
     casual off-farm production), (b) for use by such other person 
     as a fuel in a trade or business, or, (c) who sells such 
     biofuel at retail to another person and places such biofuel 
     in the fuel tank of such other person; or (2) used by the 
     producer for any purpose described in (a), (b), or (c).
       ``Cellulosic biofuel'' means any liquid fuel that (1) is 
     produced in the United States and used as fuel in the United 
     States,\34\ (2) is derived from any lignocellulosic or 
     hemicellulosic matter that is available on a renewable or 
     recurring basis and (3) meets the registration requirements 
     for fuels and fuel additives established by the Environmental 
     Protection Agency under section 211 of the Clean Air Act. 
     Thus, to qualify for the credit the fuel must be approved by 
     the Environmental Protection Agency. Cellulosic biofuel does 
     not include any alcohol with a proof of less than 150. 
     Examples of lignocellulosic or hemicellulosic matter that is 
     available of a renewable or recurring basis include dedicated 
     energy crops and trees, wood and wood residues, plants, 
     grasses, agricultural residues, fibers, animal wastes and 
     other waste materials, and municipal solid waste.
---------------------------------------------------------------------------
     \34\ For this purpose, ``United States'' includes any 
     possession of the United States.
---------------------------------------------------------------------------
       A ``qualified cellulosic biofuel mixture'' is a mixture of 
     cellulosic biofuel and a special fuel or of cellulosic 
     biofuel and gasoline, which is sold by the person producing 
     such mixture to any person for use as a fuel, or is used as a 
     fuel by the person producing such mixture. The term ``special 
     fuel'' includes any liquid fuel (other than gasoline) which 
     is suitable for use in an internal combustion engine.
       The cellulosic biofuel producer credit terminates on 
     December 31, 2012. The conference agreement requires 
     cellulosic biofuel producers to be registered with the IRS. 
     The cellulosic biofuel producer credit cannot be claimed 
     unless the taxpayer is registered with the IRS as a producer 
     of cellulosic biofuel.
       With respect to the small ethanol producer credit, the 
     conference agreement also waives the 15 million gallon 
     limitation for cellulosic biofuel that is ethanol. Thus the 
     small ethanol producer credit may be claimed for cellulosic 
     ethanol in excess of 15 million gallons. The other 
     requirements for the small ethanol producer credit continue 
     to apply for ethanol other than cellulosic ethanol, including 
     the 15 million gallon limitation.
       Under the conference agreement, cellulosic biofuel and 
     alcohols cannot qualify as biodiesel, renewable diesel, or 
     alternative fuel for purposes of the credit and payment 
     provisions relating to those fuels.
       Effective date.--The provision is effective for fuel 
     produced after December 31, 2008.

   2. Comprehensive study of biofuels (Sec. 15322 of the conference 
                               agreement)


                              Present Law

       The National Academy of Sciences serves to investigate, 
     examine, experiment and report upon any subject of science 
     whenever called upon to do so by any department of the 
     government. The National Research Council is part of the 
     National Academies. The National Research Council was 
     organized by the National Academy of Sciences in 1916 and is 
     its principal operating agency for conducting science policy 
     and technical work.


                               House Bill

       No provision.\35\
---------------------------------------------------------------------------
     \35\ A provision requiring a comprehensive study on biofuels 
     was included in section 402 of H.R. 5351, passed by the House 
     on February 27, 2008.
---------------------------------------------------------------------------


                            Senate Amendment

       No provision.


                          Conference Agreement

       The conference agreement requires the Secretary, in 
     consultation with the Department of Energy and the Department 
     of Agriculture and the Environmental Protection Agency, to 
     enter into an agreement with the National Academy of Sciences 
     to produce an analysis of current scientific findings to 
     determine:
       1. Current biofuels production, as well as projections for 
     future production;
       2. The maximum amount of biofuels production capable on 
     U.S. forests and farmlands, including the current quantities 
     and character of the feedstocks and including such 
     information as regional forest inventories that are 
     commercially available, used in the production of biofuels;
       3. The domestic effects of a increase in biofuels 
     production on, for example, (a) the price of fuel, (b) the 
     price of land in rural and suburban communities, (c) crop 
     acreage and other land use, (d) the environment, due to 
     changes in crop acreage, fertilizer use, runoff, water use, 
     emissions from vehicles utilizing biofuels, and other 
     factors, (e) the price of feed, (f) the selling price of 
     grain crops, and forest products, (g) exports and imports of 
     grains and forest products, (h) taxpayers, through cost or 
     savings to commodity crop payments, and (i) the expansion of 
     refinery capacity;
       4. The ability to convert corn ethanol plants for other 
     uses, such as cellulosic ethanol or biodiesel;
       5. A comparative analysis of corn ethanol versus other 
     biofuels and renewable energy sources, considering cost, 
     energy output, and ease of implementation;
       6. The impact of the credit for production of cellulosic 
     biofuel (as established by this Act) on the regional 
     agricultural and silvicultural capabilities of commercially 
     available forest inventories; and
       7. The need for additional scientific inquiry, and specific 
     areas of interest for future research.
       The Secretary shall submit an initial report of the 
     findings to the Congress not later than six months after the 
     date of enactment, and a final report not later than 12 
     months after the date of enactment. In the case of 
     information relating to the impact of the tax credits 
     established by the Act on the regional agricultural and 
     silvicultural capabilities of commercially available forest 
     inventories, the initial report is due 36 months after the 
     date of enactment and the final report is due 42 months after 
     the date of enactment.
       Effective date.--The provision is effective on the date of 
     enactment.

3. Modification of alcohol credit (Sec. 12315 of the Senate amendment, 
and sec. 15331 of the conference agreement and secs. 40 and 6426 of the 
                                 Code)


                              Present Law

     Income tax credit
       The alcohol fuels credit is the sum of three credits: the 
     alcohol mixture credit, the alcohol credit, and the small 
     ethanol producer credit. Generally, the alcohol fuels credit 
     expires after December 31, 2010.\36\
---------------------------------------------------------------------------
     \36\ The alcohol fuels credit is unavailable when, for any 
     period before January 1, 2011, the tax rates for gasoline and 
     diesel fuels drop to 4.3 cents per gallon.
---------------------------------------------------------------------------
       Taxpayers are eligible for an income tax credit of 51 cents 
     per gallon of ethanol (60 cents in the case of alcohol other 
     than ethanol) used in the production of a qualified mixture 
     (the ``alcohol mixture credit''). A ``qualified mixture'' 
     means a mixture of alcohol and gasoline, (or of alcohol and a 
     special fuel) sold by the taxpayer as fuel, or

[[Page H3687]]

     used as fuel by the taxpayer producing such mixture. The term 
     ``alcohol'' includes methanol and ethanol but does not 
     include (1) alcohol produced from petroleum, natural gas, or 
     coal (including peat), or (2) alcohol with a proof of less 
     than 150.
       Taxpayers may reduce their income taxes by 51 cents for 
     each gallon of ethanol, which is not in a mixture with 
     gasoline or other special fuel, that they sell at the retail 
     level as vehicle fuel or use themselves as a fuel in their 
     trade or business (``the alcohol credit''). For alcohol other 
     than ethanol, the rate is 60 cents per gallon.\37\
---------------------------------------------------------------------------
     \37\ In the case of any alcohol (other than ethanol) with a 
     proof that is at least 150 but less than 190, the credit is 
     45 cents per gallon (the ``low-proof blender amount''). For 
     ethanol with a proof that is at least 150 but less than 190, 
     the low-proof blender amount is 37.78 cents.
---------------------------------------------------------------------------
       In the case of ethanol, the Code provides an additional 10-
     cents-per-gallon credit for up to 15 million gallons per year 
     for small producers. Small producer is defined generally as 
     persons whose production capacity does not exceed 60 million 
     gallons per year. The ethanol must (1) be sold by such 
     producer to another person (a) for use by such other person 
     in the production of a qualified alcohol fuel mixture in such 
     person's trade or business (other than casual off-farm 
     production), (b) for use by such other person as a fuel in a 
     trade or business, or, (c) who sells such ethanol at retail 
     to another person and places such ethanol in the fuel tank of 
     such other person; or (2) used by the producer for any 
     purpose described in (a), (b), or (c). A cooperative may pass 
     through the small ethanol producer credit to its patrons.
       The alcohol fuels credit is includible in income and is 
     treated as a general business credit, subject to the ordering 
     rules and carryforward/carryback rules that apply to business 
     credits generally. The credit is allowable against the 
     alternative minimum tax.
     Excise tax credit and payment provision for alcohol fuel 
         mixtures
       The Code also provides an excise tax credit and payment 
     provision for alcohol fuel mixtures. Like the income tax 
     credit, the amount of the credit is 60 cents per gallon of 
     alcohol used as part of a qualified mixture (51 cents in the 
     case of ethanol). For purposes of the excise tax credit and 
     payment provisions, alcohol includes methanol and ethanol but 
     does not include (1) alcohol produced from petroleum, natural 
     gas, or coal (including peat), or (2) alcohol with a proof of 
     less than 190. Such term also includes an alcohol gallon 
     equivalent of ethyl tertiary butyl ether or other ethers 
     produced from alcohol. In lieu of a tax credit, a person 
     making a qualified mixture eligible for the credit may seek a 
     payment from the Secretary in the amount of the credit. The 
     payment provisions and credits are coordinated such that the 
     incentive is not claimed more than once for each gallon of 
     alcohol used as part of qualified mixture.
     Renewable Fuels Standard Program
       Under the Renewable Fuels Standard Program all renewable 
     fuel produced or imported on or after September 1, 2007 must 
     have a renewable identification number (RIN) associated with 
     it. Producers and importers must generate RINs to represent 
     all the renewable fuel they produce or import and provide 
     those RINs to the Environmental Protection Agency. For 
     cellulosic ethanol, 2.5 RINs are generated for every gallon 
     produced.


                               House Bill

       No provision.


                            Senate Amendment

       Under the Senate amendment, the 51-cent-per-gallon 
     incentive for ethanol is adjusted to 46 cents per gallon 
     beginning with the first calendar year after the year in 
     which 7.5 billion gallons of ethanol (including cellulosic 
     ethanol) have been produced in or imported into the United 
     States after the date of enactment, as certified by the 
     Secretary in consultation with the Administrator of the 
     Environmental Protection Agency.
       Effective date.--The provision is effective on the date of 
     enactment.


                          Conference Agreement

       Under the conference agreement, the 51-cent-per-gallon 
     incentive for ethanol is adjusted to 45 cents per gallon for 
     the calendar year 2009 and thereafter.\38\ If the Secretary 
     makes a determination, in consultation with the Administrator 
     of the Environmental Protection Agency, that 7,500,000,000 
     gallons of ethanol (including cellulosic ethanol) were not 
     produced in or imported into the United States in 2008, the 
     reduction in the credit amount will be delayed. If a 
     determination is made that the threshold was not reached in 
     2008, the reduction for 2010 also will be delayed if the 
     Secretary determines 7,500,000,000 gallons were not produced 
     or imported in 2009. In the absence of a determination, the 
     reduction remains in effect. In the event the determination 
     is made subsequent to the start of a calendar year, those 
     persons claiming the reduced amount prior to the Secretary's 
     determination will be entitled to the difference between the 
     correct credit amount for that year and the credit amount 
     claimed, e.g. between 51 cents per gallon and 45 cents per 
     gallon.
---------------------------------------------------------------------------
     \38\ The low-proof blender amount is adjusted accordingly to 
     33.33 cents.
---------------------------------------------------------------------------
       Effective date.--The provision is effective on the date of 
     enactment.

4. Calculation of volume of alcohol for fuel credits (Sec. 12316 of the 
 Senate amendment, and sec. 15332 of the conference agreement and sec. 
                            40 of the Code)


                              Present Law

       The Code provides a per-gallon credit for the volume of 
     alcohol used as a fuel or in a qualified mixture. For 
     purposes of determining the number of gallons of alcohol with 
     respect to which the credit is allowable, the volume of 
     alcohol includes any denaturant, including gasoline.\39\ The 
     denaturant must be added under a formula approved by the 
     Secretary and the denaturant cannot exceed five percent of 
     the volume of such alcohol (including denaturants).
---------------------------------------------------------------------------
     \39\ Sec. 40(d)(4).
---------------------------------------------------------------------------


                               House Bill

       No provision.


                            Senate Amendment

       The Senate amendment reduces the amount of allowable 
     denaturants to two percent of the volume of the alcohol.
       Effective date.--The provision is effective for fuel sold 
     or used after December 31, 2007.


                          Conference Agreement

       The conference agreement follows the Senate amendment.
       Effective date.--The provision is effective for fuel sold 
     or used after December 31, 2008.

  5. Ethanol tariff extension (Sec. 12317 of the Senate amendment and 
                sec. 15333 of the conference agreement)


                              Present Law

       Heading 9901.00.50 of the Harmonized Tariff Schedule of the 
     United States imposes a cumulative general duty of 14.27 
     cents per liter (approximately 54 cents per gallon) to 
     imports of ethyl alcohol, and any mixture containing ethyl 
     alcohol, if used as a fuel or in producing a mixture to be 
     used as a fuel, that are entered into the United States prior 
     to January 1, 2009.
       Taxpayers who blend ethanol with gasoline are eligible to 
     claim an alcohol fuels tax credit of 51 cents per gallon, 
     irrespective of whether the ethanol used is produced 
     domestically or imported. Heading 9901.00.50 applies a 
     temporary duty to ethanol imports that offsets the benefit of 
     the alcohol fuels tax credit to imported ethanol.
       Heading 9901.00.52 of the Harmonized Tariff Schedule of the 
     United States imposes a general duty of 5.99 cents per liter 
     to imports of ethyl tertiary-butyl ether, and any mixture 
     containing ethyl tertiary-butyl ether, that are entered into 
     the United States prior to January 1, 2009.


                               House Bill

       No provision.


                            Senate Amendment

       The Senate amendment modifies the existing effective period 
     for ethyl alcohol as classified under heading 9901.00.50 and 
     9901.00.52 of the Harmonized Tariff Schedule of the United 
     States from before January 1, 2009 to before January 1, 2011.
       Effective date.--The provision is effective on the date of 
     enactment.


                          Conference Agreement

       The conference agreement follows the Senate amendment.
       Effective date.--The provision is effective on the date of 
     enactment.

6. Limitations on duty drawback on certain imported ethanol (Sec. 12318 
  of the Senate amendment and sec. 15334 of the conference agreement)


                              Present Law

       Subheading 9901.00.50 of the Harmonized Tariff Schedule of 
     the United States (``HTSUS''), imposes an additional duty on 
     ethanol that is used as fuel or used to make fuel. Subsection 
     (b) of Section 313 of the Tariff Act of 1930 permits the 
     refund of duty if the duty-paid good, or a substitute good, 
     is used to make an article that is exported. Subsection 
     (j)(2) of Section 313 permits the refund of duty if the duty-
     paid good, or a substitute good, is exported. Subsection (p) 
     of section 313 permits the substitution on exportation for 
     drawback eligibility of one motor fuel for another motor 
     fuel. A person who manufactures or acquires gasoline with 
     ethanol subject to the duty imposed by subheading 9901.00.50, 
     HTSUS, can export jet fuel (which does not involve the use of 
     ethanol) and obtain a refund of the duty paid under 
     subheading 9901.00.50, HTSUS.


                               House Bill

       No provision.


                            Senate Amendment

       The Senate amendment eliminates the ability to obtain a 
     refund of the duty imposed by subheading 9901.00.50, HTSUS, 
     by substitution of ethanol not subject to the duty under 
     9901.00.50 of the HTSUS for ethanol subject to the duty 
     imposed under subheading 9901.00.50, HTSUS, for drawback 
     purposes. Also, under the provision, an exported article that 
     does not contain ethyl alcohol or a mixture of ethyl alcohol 
     shall not be treated as the same kind and quality as a 
     qualified article that does contain ethyl alcohol or a 
     mixture of ethyl alcohol, for substitution duty drawback 
     purposes under section 313(p) of the Tariff Act of 1930. In 
     particular, this eliminates the ability to export jet fuel as 
     a substitute for motor fuel made with imports of ethyl 
     alcohol or a mixture of ethyl alcohol, and receive duty 
     drawback based upon the import duty paid under subheading 
     9901.00.50, HTSUS.
       Effective date.--Effective for articles exported on or 
     after the date that is 15 days after the date of enactment.


                          Conference Agreement

       Under the conference agreement, any duty paid under 
     subheading 9901.00.50, HTSUS, on

[[Page H3688]]

     imports of ethyl alcohol or a mixture of ethyl alcohol may 
     not be refunded if the exported article upon which a drawback 
     claim is based does not contain ethyl alcohol or a mixture of 
     ethyl alcohol. In particular, the provision eliminates the 
     ability to export jet fuel as a substitute for motor fuel 
     made with imports of ethyl alcohol or a mixture of ethyl 
     alcohol, and then receive duty drawback based upon the import 
     duty paid on the ethyl alcohol or the mixture of ethyl 
     alcohol under subheading 9901.00.50, HTSUS.
       Effective date.--The provision applies to imports of ethyl 
     alcohol or a mixture of ethyl alcohol entered for 
     consumption, or withdrawn from warehouse for consumption, on 
     or after October 1, 2008. With respect to claims for 
     substitution duty drawback that are based upon imports of 
     ethyl alcohol or a mixture of ethyl alcohol entered for 
     consumption, or withdrawn from warehouse for consumption, 
     before October 1, 2008, such claims must be filed not later 
     than September 30, 2010; otherwise, such claims are 
     disallowed.

                       C. Agricultural Provisions

 1. Qualified small issue bonds for farming (Sec. 12401 of the Senate 
 amendment, sec. 15341 of the conference agreement and sec. 144 of the 
                                 Code)


                              Present Law

       Qualified small issue bonds are tax-exempt bonds issued by 
     State and local governments to finance private business 
     manufacturing facilities (including certain directly related 
     and ancillary facilities) or the acquisition of land and 
     equipment by certain first-time farmers. A first-time farmer 
     means any individual who has not at any time had any direct 
     ownership interest in substantial farmland in the operation 
     of which such individual materially participated. In 
     addition, an individual does not qualify as a first-time 
     farmer if such individual has received more than $250,000 in 
     qualified small issue bond financing. Substantial farmland 
     means any parcel of land unless (1) such parcel is smaller 
     than 30 percent of the median size of a farm in the county in 
     which such parcel is located and (2) the fair market value of 
     the land does not at any time while held by the individual 
     exceed $125,000.


                               House Bill

       No provision.


                            Senate Amendment

       The Senate amendment increases the maximum amount of 
     qualified small issue bond proceeds available to first-time 
     farmers to $450,000 and indexes this amount for inflation. 
     The provision also eliminates the fair market value test from 
     the definition of substantial farmland.
       Effective date.--The provision is effective for bonds 
     issued after the date of enactment.


                          Conference Agreement

       The conference agreement follows the Senate amendment.

  2. Allowance of section 1031 for exchanges involving certain mutual 
ditch, reservoir, or irrigation company stock (Sec. 12403 of the Senate 
amendment, sec. 15342 of the conference agreement and sec. 1031 of the 
                                 Code)


                              Present Law

       An exchange of property, like a sale, generally is a 
     taxable event. However, no gain or loss is recognized if 
     property held for productive use in a trade or business or 
     for investment is exchanged for property of a ``like-kind'' 
     which is to be held for productive use in a trade or business 
     or for investment.\40\ If section 1031 applies to an exchange 
     of properties, the basis of the property received in the 
     exchange is equal to the basis of the property transferred, 
     decreased by any money received by the taxpayer, and further 
     adjusted for any gain or loss recognized on the exchange. In 
     general, section 1031 does not apply to any exchange of stock 
     in trade or other property held primarily for sale; stocks, 
     bonds or notes; other securities or evidences of indebtedness 
     or interest; interests in a partnership; certificates of 
     trust or beneficial interests; or choses in action.\41\
---------------------------------------------------------------------------
     \40\ Sec. 1031(a)(1).
     \41\ Sec. 1031(a)(2).
---------------------------------------------------------------------------


                               House Bill

       No provision.


                            Senate Amendment

       The Senate amendment provides that the general exclusion 
     from section 1031 treatment for stocks shall not apply to 
     shares in a mutual ditch, reservoir, or irrigation company, 
     if at the time of the exchange: (1) the company is an 
     organization described in section 501(c)(12)(A) (determined 
     without regard to the percentage of its income that is 
     collected from its members for the purpose of meeting losses 
     and expenses); and (2) the shares in the company have been 
     recognized by the highest court of the State in which such 
     company was organized or by applicable State statute as 
     constituting or representing real property or an interest in 
     real property.
       Effective date.--The provision is effective for transfers 
     after the date of enactment.


                          Conference Agreement

       The conference agreement follows the Senate amendment.

3. Agricultural chemicals security tax credit (Sec. 12405 of the Senate 
 amendment, sec. 15343 of the conference agreement and new sec. 45O of 
                               the Code)


                              Present Law

       Present law does not provide a credit for agricultural 
     chemicals security.


                               House Bill

       No provision.


                            Senate Amendment

       The Senate amendment establishes a 30 percent credit for 
     qualified chemical security expenditures for the taxable year 
     with respect to eligible agricultural businesses. The credit 
     is a component of the general business credit.\42\
---------------------------------------------------------------------------
     \42\ Sec. 38(b)(1).
---------------------------------------------------------------------------
       The credit is limited to $100,000 per facility, this amount 
     is reduced by the aggregate amount of the credits allowed for 
     the facility in the prior five years. In addition, each 
     taxpayer's annual credit is limited to $2,000,000.\43\ The 
     credit only applies to expenditures paid or incurred before 
     December 31, 2012. The taxpayer's deductible expense is 
     reduced by the amount of the credit claimed.
---------------------------------------------------------------------------
     \43\ The term taxpayer includes controlled groups under rules 
     similar to the rules set out in section 41(f)(1) and (2).
---------------------------------------------------------------------------
       Qualified chemical security expenditures are amounts paid 
     for: (1) employee security training and background checks; 
     (2) limitation and prevention of access to controls of 
     specific agricultural chemicals stored at a facility; (3) 
     tagging, locking tank valves, and chemical additives to 
     prevent the theft of specific agricultural chemicals or to 
     render such chemicals unfit for illegal use; (4) protection 
     of the perimeter of areas where specified agricultural 
     chemicals are stored; (5) installation of security lighting, 
     cameras, recording equipment and intrusion detection sensors; 
     (6) implementation of measures to increase computer or 
     computer network security; (7) conducting security 
     vulnerability assessments; (8) implementing a site security 
     plan; and (9) other measures provided for by regulation. 
     Amounts described in the preceding sentences are only 
     eligible to the extent they are incurred by an eligible 
     agricultural business for protecting specified agricultural 
     chemicals.
       Eligible agricultural businesses are businesses that: (1) 
     sell agricultural products, including specified agricultural 
     chemicals, at retail predominantly to farmers and ranchers; 
     or (2) manufacture, formulate, distribute, or aerially apply 
     specified agricultural chemicals.
       Specified agricultural chemicals means: (1) fertilizer 
     commonly used in agricultural operations which is listed 
     under section 302(a)(2) of the Emergency Planning and 
     Community Right-to know Act of 1986, section 101 or part 172 
     of title 49, Code of Federal Regulations, or part 126, 127 or 
     154 of title 33, Code of Federal Regulations; and (2) any 
     pesticide (as defined in section 2(u) of the Federal 
     Insecticide, Fungicide, and Rodenticide Act) including all 
     active and inert ingredients which are used on crops grown 
     for food, feed or fiber.
       Effective date.--The provision is effective for expenses 
     paid or incurred after date of enactment.


                          Conference Agreement

       The conference agreement follows the Senate amendment.

 4. Three-year depreciation for all race horses (Sec. 12509(a) of the 
 Senate amendment, and sec. 15344 of the conference agreement and sec. 
                            168 of the Code)


                              Present Law

       A taxpayer is allowed to recover, through annual 
     depreciation deductions, the cost of certain property used in 
     a trade or business or for the production of income. The 
     amount of the depreciation deduction allowed with respect to 
     tangible property for a taxable year is determined under the 
     modified accelerated cost recovery system (``MACRS'').\44\ 
     The class lives of assets placed in service after 1986 are 
     generally set forth in Revenue Procedure 87-56.\45\ Any race 
     horse that is more than two years old at the time it is 
     placed in service is assigned a three-year recovery 
     period.\46\ A seven-year recovery period is assigned to any 
     race horse that is two years old or younger at the time it is 
     placed in service.\47\
---------------------------------------------------------------------------
     \44\ Sec. 168.
     \45\ 1987-2 C.B. 674 (as clarified and modified by Rev. Proc. 
     88-22, 1988-1 C.B. 785).
     \46\ Sec. 168(e)(3)(A)(i).
     \47\ Rev. Proc. 87-56, 1987-2 C.B. 674, asset class 01.225.
---------------------------------------------------------------------------


                               House Bill

       No provision.


                            Senate Amendment

       The Senate amendment provides a three-year recovery period 
     for any race horse.
       Effective date.--The provision applies to property placed 
     in service on or after the date of enactment.


                          Conference Agreement

       The conference agreement follows the Senate amendment, 
     except that the provision applies to any race horse that is 
     two years old or younger at the time that it is placed in 
     service after December 31, 2008 and before January 1, 2014.

 5. Temporary relief for Kiowa County, Kansas and surrounding area \48\
---------------------------------------------------------------------------

     \48\ The provisions of this Act generally provide tax relief 
     similar to certain other disaster areas. They do not modify 
     the otherwise applicable tax relief to those other disaster 
     areas.
---------------------------------------------------------------------------

(a) Suspension of certain limitations on personal casualty losses (Sec. 
 12701 of the Senate amendment, sec. 15345 of the conference agreement 
                     and sec. 1400S(b) of the Code)


                              Present Law

       Under present law, a taxpayer may generally claim a 
     deduction for any loss sustained during the taxable year and 
     not compensated by insurance or otherwise (sec. 165).

[[Page H3689]]

     For individual taxpayers, deductible losses must be incurred 
     in a trade or business or other profit-seeking activity or 
     consist of property losses arising from fire, storm, 
     shipwreck, or other casualty, or from theft. Personal 
     casualty or theft losses are deductible only if they exceed 
     $100 per casualty or theft (the ``$100 limitation'') (sec. 
     165(h)). In addition, aggregate net casualty and theft losses 
     are deductible only to the extent they exceed 10 percent of 
     an individual taxpayer's adjusted gross income (the ``AGI 
     limitation'') (sec. 165(h)).


                               House Bill

       No provision.


                            Senate Amendment

       The Senate amendment removes two limitations on personal 
     casualty or theft losses to the extent those losses arose 
     from such events in the Kansas disaster area after May 4, 
     2007, and are attributable to the disaster occurring at that 
     time. For purposes of the provisions of this Act, the term 
     ``Kansas disaster area'' means an area with respect to which 
     a major disaster has been declared by the President under 
     section 401 of the Robert T. Stafford Disaster Relief and 
     Emergency Assistance Act (FEMA-1699-DR, as in effect on the 
     date of enactment of this Act) by reason of severe storms and 
     tornados beginning on May 4, 2007, and determined by the 
     President to warrant individual or individual and public 
     assistance from the Federal Government under such Act with 
     respect to damages attributable to storms and tornados. These 
     personal casualty or theft losses are deductible without 
     regard to either the $100 limitation or the AGI limitation. 
     For purposes of applying the AGI limitation to other personal 
     casualty or theft losses, losses deductible under this 
     provision are disregarded. Thus, the provision has the effect 
     of treating personal casualty or theft losses from the 
     disaster separate from all other casualty losses.
       Effective date.--The provision is effective for losses 
     arising on or after May 4, 2007.


                          Conference Agreement

       The conference agreement follows the Senate amendment.

 (b) Extension of replacement period for nonrecognition of gain (Sec. 
    12701 of the Senate amendment, and sec. 15345 of the conference 
                               agreement)


                              Present Law

       Generally, a taxpayer realizes gain to the extent the sales 
     price (and any other consideration received) exceeds the 
     taxpayer's basis in the property. The realized gain is 
     subject to current income tax unless the gain is deferred or 
     not recognized under a special tax provision.
       Under section 1033, gain realized by a taxpayer from an 
     involuntary conversion of property is deferred to the extent 
     the taxpayer purchases property similar or related in service 
     or use to the converted property within the applicable 
     period. The taxpayer's basis in the replacement property 
     generally is the cost of such property, reduced by the amount 
     of gain not recognized.
       The applicable period for the taxpayer to replace the 
     converted property begins with the date of the disposition of 
     the converted property (or if earlier, the earliest date of 
     the threat or imminence of requisition or condemnation of the 
     converted property) and ends two years after the close of the 
     first taxable year in which any part of the gain upon 
     conversion is realized (the ``replacement period'').
       Special rules extend the replacement period for certain 
     real property \49\ and principal residences damaged by a 
     Presidentially declared disaster \50\ to three years and four 
     years, respectively, after the close of the first taxable 
     year in which gain is realized. Similarly, the replacement 
     period for livestock sold on account of drought, flood, or 
     other weather-related conditions is extended from two years 
     to four years after the close of the first taxable year in 
     which any part of the gain on conversion is realized.\51\
---------------------------------------------------------------------------
     \49\ Sec. 1033(g)(4).
     \50\ Sec. 1033(h)(1)(B).
     \51\ Sec. 1033(e)(2).
---------------------------------------------------------------------------


                               House Bill

       No provision.


                            Senate Amendment

       The Senate amendment extends from two to five years the 
     replacement period in which a taxpayer may replace converted 
     property, in the case of property that is in the Kansas 
     disaster area and that is compulsorily or involuntarily 
     converted on or after May 4, 2007, by reason of the May 4, 
     2007, storms and tornados. Substantially all of the use of 
     the replacement property must be in this area.
       Effective date.--The provision is effective on the date of 
     enactment.


                          Conference Agreement

       The conference agreement follows the Senate amendment.

(c) Employee retention credit (Sec. 12701 of the Senate amendment, sec. 
    15345 of the conference agreement and sec. 1400R(a) of the Code)


                              Present Law

       For employers affected by Hurricanes Katrina, Rita, or 
     Wilma, section 1400R provides a credit of 40 percent of the 
     qualified wages (up to a maximum of $6,000 in qualified wages 
     per employee) paid by an eligible employer to an eligible 
     employee.
       Hurricane Katrina
       An eligible employer is any employer (1) that conducted an 
     active trade or business on August 28, 2005, in the GO Zone 
     and (2) with respect to which the trade or business described 
     in (1) is inoperable on any day after August 28, 2005, and 
     before January 1, 2006, as a result of damage sustained by 
     reason of Hurricane Katrina.
       An eligible employee is, with respect to an eligible 
     employer, an employee whose principal place of employment on 
     August 28, 2005, with such eligible employer was in the GO 
     Zone. An employee may not be treated as an eligible employee 
     for any period with respect to an employer if such employer 
     is allowed a credit under section 51 with respect to the 
     employee for the period.
       Qualified wages are wages (as defined in section 51(c)(1) 
     of the Code, but without regard to section 3306(b)(2)(B) of 
     the Code) paid or incurred by an eligible employer with 
     respect to an eligible employee on any day after August 28, 
     2005, and before January 1, 2006, during the period (1) 
     beginning on the date on which the trade or business first 
     became inoperable at the principal place of employment of the 
     employee immediately before Hurricane Katrina, and (2) ending 
     on the date on which such trade or business has resumed 
     significant operations at such principal place of employment. 
     Qualified wages include wages paid without regard to whether 
     the employee performs no services, performs services at a 
     different place of employment than such principal place of 
     employment, or performs services at such principal place of 
     employment before significant operations have resumed.
       The credit is a part of the current year business credit 
     under section 38(b) and therefore is subject to the tax 
     liability limitations of section 38(c). Rules similar to 
     sections 51(i)(1) and 52 apply to the credit.
       Hurricane Rita and Wilma
       The credit for employers affected by Hurricanes Rita and 
     Wilma is subject to the same rules as Katrina, except the 
     reference dates for affected employers, comparable to the 
     August 28, 2005 date for Katrina, are September 23, 2005, and 
     October 23, 2005, respectively.


                               House Bill

       No provision.


                            Senate Amendment

       The Senate amendment extends the retention credit, as 
     modified to include an employer size limitation, for 
     employers affected by the Kansas storms and tornados. The 
     reference dates for these employers, comparable to the August 
     28, 2005 and January 1, 2006 dates of present law for 
     employers affected by Hurricane Katrina, are May 4, 2007, and 
     January 1, 2008, respectively.
       The retention credit for employers affected by the Kansas 
     storms and tornados includes an employer size limitation. The 
     credit only applies to eligible employers who employed an 
     average of not more than 200 employees on business days 
     during the taxable year before May 4, 2007.
       Effective date.--The provision is effective on the date of 
     enactment.


                          Conference Agreement

       The conference agreement follows the Senate amendment.

(d) Special depreciation allowance (Sec. 12701 of the Senate amendment, 
 sec. 15345 of the conference agreement and sec. 1400N(d) of the Code)


                              Present Law

       A taxpayer is allowed to recover, through annual 
     depreciation deductions, the cost of certain property used in 
     a trade or business or for the production of income. The 
     amount of the depreciation deduction allowed with respect to 
     tangible property for a taxable year is determined under the 
     modified accelerated cost recovery system (``MACRS'').\52\ 
     Under MACRS, different types of property generally are 
     assigned applicable recovery periods and depreciation 
     methods. The recovery periods applicable to most tangible 
     personal property (generally tangible property other than 
     residential rental property and nonresidential real property) 
     range from 3 to 20 years. The depreciation methods generally 
     applicable to tangible personal property are the 200-percent 
     and 150-percent declining balance methods, switching to the 
     straight-line method for the taxable year in which the 
     depreciation deduction would be maximized.
---------------------------------------------------------------------------
     \52\ Sec. 168.
---------------------------------------------------------------------------
       For qualified Gulf Opportunity Zone property, the Code 
     provides an additional first-year depreciation deduction 
     equal to 50 percent of the adjusted basis.\53\ In order to 
     qualify, property generally must be placed in service on or 
     before December 31, 2007 (December 31, 2008 in the case of 
     nonresidential real property and residential rental 
     property).
---------------------------------------------------------------------------
     \53\ Sec. 1400N(d).
---------------------------------------------------------------------------
       The additional first-year depreciation deduction is allowed 
     for both regular tax and alternative minimum tax purposes for 
     the taxable year in which the property is placed in service. 
     The additional first-year depreciation deduction is subject 
     to the general rules regarding whether an item is deductible 
     under section 162 or subject to capitalization under section 
     263 or section 263A. The basis of the property and the 
     depreciation allowances in the year of purchase and later 
     years are appropriately adjusted to reflect the additional 
     first-year depreciation deduction. In addition, the provision 
     provides that

[[Page H3690]]

     there is no adjustment to the allowable amount of 
     depreciation for purposes of computing a taxpayer's 
     alternative minimum taxable income with respect to property 
     to which the provision applies. A taxpayer is allowed to 
     elect out of the additional first-year depreciation for any 
     class of property for any taxable year.
       In order for property to qualify for the additional first-
     year depreciation deduction, it must meet all of the 
     following requirements. First, the property must be property 
     to which the general rules of the Modified Accelerated Cost 
     Recovery System (``MACRS'') apply with (1) an applicable 
     recovery period of 20 years or less, (2) computer software 
     other than computer software covered by section 197, (3) 
     water utility property (as defined in section 168(e)(5)), (4) 
     certain leasehold improvement property, or (5) certain 
     nonresidential real property and residential rental property. 
     Second, substantially all of the use of such property must be 
     in the Gulf Opportunity Zone and in the active conduct of a 
     trade or business by the taxpayer in the Gulf Opportunity 
     Zone. Third, the original use of the property in the Gulf 
     Opportunity Zone must commence with the taxpayer on or after 
     August 28, 2005.\54\ Finally, the property must be acquired 
     by purchase (as defined under section 179(d)) by the taxpayer 
     on or after August 28, 2005 and placed in service on or 
     before December 31, 2007 (December 31, 2008, for qualifying 
     nonresidential real property and residential rental 
     property). Property does not qualify if a binding written 
     contract for the acquisition of such property was in effect 
     before August 28, 2005. However, property is not precluded 
     from qualifying for the additional first-year depreciation 
     merely because a binding written contract to acquire a 
     component of the property is in effect prior to August 28, 
     2005.
---------------------------------------------------------------------------
     \54\ Used property may constitute qualified property so long 
     as it has not previously been used within the Gulf 
     Opportunity Zone. In addition, it is intended that additional 
     capital expenditures incurred to recondition or rebuild 
     property the original use of which in the Gulf Opportunity 
     Zone began with the taxpayer would satisfy the ``original 
     use'' requirement. See Treasury Regulation sec. 1.48-2, 
     Example 5.
---------------------------------------------------------------------------
       Property that is manufactured, constructed, or produced by 
     the taxpayer for use by the taxpayer qualifies if the 
     taxpayer begins the manufacture, construction, or production 
     of the property after August 27, 2005, and before January 1, 
     2008, and the property is placed in service on or before 
     December 31, 2007 (and all other requirements are met). In 
     the case of qualified nonresidential real property and 
     residential rental property, the property must be placed in 
     service on or before December 31, 2008. Property that is 
     manufactured, constructed, or produced for the taxpayer by 
     another person under a contract that is entered into prior to 
     the manufacture, construction, or production of the property 
     is considered to be manufactured, constructed, or produced by 
     the taxpayer.
       The special allowance for Gulf Opportunity Zone property 
     was extended for certain nonresidential real property and 
     residential rental property, and certain personal property if 
     substantially all of the use of such property is in such 
     building,\55\ placed in service in specified portions of the 
     GO Zone by the taxpayer on or before December 31, 2010.\56\ 
     The extension only applies to nonresidential real property 
     and residential rental property to the extent of the adjusted 
     basis attributable to manufacture, construction, or 
     production before January 1, 2010.\57\
---------------------------------------------------------------------------
     \55\ Such personal property must be placed in service by the 
     taxpayer not later than 90 days after such building is placed 
     in service.
     \56\ Sec. 1400N(d)(6).
     \57\ Sec. 1400N(d)(6)(D).
---------------------------------------------------------------------------


                               House Bill

       No provision.


                            Senate Amendment

       The Senate amendment provides an additional first-year 
     depreciation deduction equal to 50 percent of the adjusted 
     basis for qualified Recovery Assistance property. In order 
     for property to qualify for the additional first-year 
     depreciation deduction, it must meet all of the following 
     requirements: (1) The property must be property to which the 
     general rules of the MACRS apply with (a) an applicable 
     recovery period of 20 years or less, (b) computer software 
     other than computer software covered by section 197, (c) 
     water utility property (as defined in section 168(e)(5)), (d) 
     certain leasehold improvement property, or (e) certain 
     nonresidential real property and residential rental property; 
     (2) substantially all of the use of such property must be in 
     the Kansas Disaster Zone and in the active conduct of a trade 
     or business by the taxpayer in the Kansas Disaster Zone. 
     Third, the original use of the property in the Kansas 
     Disaster Zone must commence with the taxpayer on or after May 
     5, 2007.\58\ Finally, the property must be acquired by 
     purchase (as defined under section 179(d)) by the taxpayer on 
     or after May 5, 2007 and placed in service on or before 
     December 31, 2008 (December 31, 2009, for qualifying 
     nonresidential real property and residential rental 
     property). Property does not qualify if a binding written 
     contract for the acquisition of such property was in effect 
     before May 5, 2007. However, property is not precluded from 
     qualifying for the additional first-year depreciation merely 
     because a binding written contract to acquire a component of 
     the property is in effect prior to May 5, 2007.
---------------------------------------------------------------------------
     \58\ Used property may constitute qualified property so long 
     as it has not previously been used within the Kansas Disaster 
     Zone. In addition, it is intended that additional capital 
     expenditures incurred to recondition or rebuild property the 
     original use of which in the Kansas Disaster Zone began with 
     the taxpayer would satisfy the ``original use'' requirement. 
     See Treasury Regulation sec. 1.48-2, Example 5.
---------------------------------------------------------------------------
       Property that is manufactured, constructed, or produced by 
     the taxpayer for use by the taxpayer qualifies if the 
     taxpayer begins the manufacture, construction, or production 
     of the property after May 4, 2007, and before January 1, 
     2009, and the property is placed in service on or before 
     December 31, 2008 (and all other requirements are met). In 
     the case of qualified nonresidential real property and 
     residential rental property, the property must be placed 
     in service on or before December 31, 2009. Property that 
     is manufactured, constructed, or produced for the taxpayer 
     by another person under a contract that is entered into 
     prior to the manufacture, construction, or production of 
     the property is considered to be manufactured, 
     constructed, or produced by the taxpayer.
       Effective date.--The provision is effective on the date of 
     enactment.


                          Conference Agreement

       The conference agreement follows the Senate amendment.

 (e) Increase in expensing under section 179 (Sec. 12701 of the Senate 
amendment, sec. 15345 of the conference agreement and sec. 1400N(e) of 
                               the Code)


                              Present Law

       In lieu of depreciation, a taxpayer with a sufficiently 
     small amount of annual investment may elect to deduct (or 
     ``expense'') such costs under section 179. Present law 
     provides that the maximum amount a taxpayer may expense, for 
     taxable years beginning in 2007 through 2010, is $125,000 of 
     the cost of qualifying property placed in service for the 
     taxable year.\59\ In general, qualifying property is defined 
     as depreciable tangible personal property that is purchased 
     for use in the active conduct of a trade or business. Off-
     the-shelf computer software placed in service in taxable 
     years beginning before 2010 is treated as qualifying 
     property. The $125,000 amount is reduced (but not below zero) 
     by the amount by which the cost of qualifying property placed 
     in service during the taxable year exceeds $500,000. The 
     $125,000 and $500,000 amounts are indexed for inflation in 
     taxable years beginning after 2007 and before 2011.
---------------------------------------------------------------------------
     \59\ Additional section 179 incentives are provided with 
     respect to qualified property meeting applicable requirements 
     that is used by a business in an empowerment zone (sec. 
     1397A), a renewal community (sec. 1400J), or the Gulf 
     Opportunity Zone (sec. 1400N(e)).
---------------------------------------------------------------------------
       The amount eligible to be expensed for a taxable year may 
     not exceed the taxable income for a taxable year that is 
     derived from the active conduct of a trade or business 
     (determined without regard to this provision). Any amount 
     that is not allowed as a deduction because of the taxable 
     income limitation may be carried forward to succeeding 
     taxable years (subject to similar limitations). No general 
     business credit under section 38 is allowed with respect to 
     any amount for which a deduction is allowed under section 
     179. An expensing election is made under rules prescribed by 
     the Secretary.\60\
---------------------------------------------------------------------------
     \60\ Sec. 179(c)(1). Under Treas. Reg. sec. 1.179-5, 
     applicable to property placed in service in taxable years 
     beginning after 2002 and before 2008, a taxpayer is permitted 
     to make or revoke an election under section 179 without the 
     consent of the Commissioner on an amended Federal tax return 
     for that taxable year. This amended return must be filed 
     within the time prescribed by law for filing an amended 
     return for the taxable year. T.D. 9209, July 12, 2005.
---------------------------------------------------------------------------
       For taxable years beginning in 2011 and thereafter (or 
     before 2003), the following rules apply. A taxpayer with a 
     sufficiently small amount of annual investment may elect to 
     deduct up to $25,000 of the cost of qualifying property 
     placed in service for the taxable year. The $25,000 amount is 
     reduced (but not below zero) by the amount by which the cost 
     of qualifying property placed in service during the taxable 
     year exceeds $200,000. The $25,000 and $200,000 amounts are 
     not indexed. In general, qualifying property is defined as 
     depreciable tangible personal property that is purchased for 
     use in the active conduct of a trade or business (not 
     including off-the-shelf computer software). An expensing 
     election may be revoked only with consent of the 
     Commissioner.\61\
---------------------------------------------------------------------------
     \61\ Sec. 179(c)(2).
---------------------------------------------------------------------------
       For qualified section 179 Gulf Opportunity Zone property, 
     the maximum amount that a taxpayer may elect to deduct is 
     increased by the lesser of $100,000 or the cost of qualified 
     section 179 Gulf Opportunity Zone property for the taxable 
     year.\62\ The provision applies with respect to qualified 
     section 179 Gulf Opportunity Zone property acquired on or 
     after August 28, 2005, and placed in service on or before 
     December 31, 2007. This placed in service date was extended 
     to December 31, 2008 for property substantially all of the 
     use of which is in one or more specified portions of the GO 
     Zone. The threshold for reducing the amount expensed is 
     computed by increasing the $500,000 present-law amount by the 
     lesser of (1) $600,000, or (2) the cost of qualified section 
     179 Gulf Opportunity Zone property placed in service during 
     the taxable year. Neither the $100,000 nor $600,000 amounts 
     are indexed for inflation.
---------------------------------------------------------------------------
     \62\ Sec. 1400N(e).
---------------------------------------------------------------------------
       Qualified section 179 Gulf Opportunity Zone property means 
     section 179 property (as defined in section 179(d)) that also 
     meets the

[[Page H3691]]

     following requirements: (1) The property must be property to 
     which the general rules of the MACRS apply with (a) an 
     applicable recovery period of 20 years or less, (b) computer 
     software other than computer software covered by section 197, 
     (c) water utility property (as defined in section 168(e)(5)), 
     (d) certain leasehold improvement property; (2) substantially 
     all of the use of which is in the Gulf Opportunity Zone and 
     is in the active conduct of a trade or business by the 
     taxpayer in that Zone; (3) the original use of which 
     commences with the taxpayer on or after August 28, 2005; (4) 
     which is acquired by the taxpayer by purchase on or after 
     August 28, 2005, but only if no written binding contract for 
     the acquisition was in effect before August 28, 2005; and (5) 
     which is placed in service by the taxpayer on or before 
     December 31, 2007.


                               House Bill

       No provision.


                            Senate Amendment

       The Senate amendment increases the amount that a taxpayer 
     may elect for qualified section 179 Recovery Assistance 
     property. The maximum amount that a taxpayer may elect to 
     deduct under section 179 is increased by the lesser of 
     $100,000 or the cost of qualified section 179 Recovery 
     Assistance property for the taxable year. The provision 
     applies with respect to qualified section 179 Recovery 
     Assistance property acquired on or after May 5, 2007, and 
     placed in service on or before December 31, 2008. The 
     threshold for reducing the amount expensed is computed by 
     increasing the $500,000 present-law amount by the lesser of 
     (1) $600,000, or (2) the cost of qualified section 179 
     Recovery Assistance property placed in service during the 
     taxable year. Neither the $100,000 nor $600,000 amounts are 
     indexed for inflation.
       Qualified section 179 Recovery Assistance property means 
     section 179 property (as defined in section 179(d)) that also 
     meets the following requirements: (1) The property must be 
     property to which the general rules of the MACRS apply with 
     (a) an applicable recovery period of 20 years or less, (b) 
     computer software other than computer software covered by 
     section 197, (c) water utility property (as defined in 
     section 168(e)(5)), or (d) certain leasehold improvement 
     property; (2) substantially all of the use of which is in the 
     Kansas Disaster Zone and is in the active conduct of a trade 
     or business by the taxpayer in that Zone; (3) the original 
     use of which commences with the taxpayer on or after May 5, 
     2007; (4) which is acquired by the taxpayer by purchase on or 
     after May 5, 2007, but only if no written binding contract 
     for the acquisition was in effect before May 5, 2007; and (5) 
     which is placed in service by the taxpayer on or before 
     December 31, 2008.
       Effective date.--The provision is effective on the date of 
     enactment.


                          Conference Agreement

       The conference agreement follows the Senate amendment.

(f) Expensing for certain demolition and clean-up costs (Sec. 12701 of 
 the Senate amendment, sec. 15345 of the conference agreement and sec. 
                         1400N(f) of the Code)


                              Present Law

       Under present law, the cost of demolition of a structure is 
     capitalized into the taxpayer's basis in the land on which 
     the structure is located.\63\ Land is not subject to an 
     allowance for depreciation or amortization.
---------------------------------------------------------------------------
     \63\ Sec. 280B.
---------------------------------------------------------------------------
       The treatment of the cost of debris removal depends on the 
     nature of the costs incurred. For example, the cost of debris 
     removal after a storm may in some cases constitute an 
     ordinary and necessary business expense which is deductible 
     in the year paid or incurred. In other cases, debris removal 
     costs may be in the nature of replacement of part of the 
     property that was damaged. In such cases, the costs are 
     capitalized and added to the taxpayer's basis in the 
     property. For example, Revenue Ruling 71-161 \64\ permits the 
     use of clean-up costs as a measure of casualty loss but 
     requires that such costs be added to the post-casualty basis 
     of the property.
---------------------------------------------------------------------------
     \64\ 1971-1 C.B. 76.
---------------------------------------------------------------------------
       Under section 1400N(f), a taxpayer is permitted a deduction 
     for 50 percent of any qualified Gulf Opportunity Zone clean-
     up cost paid or incurred during the period beginning on 
     August 28, 2005, and ending on December 31, 2007. The 
     remaining 50 percent is capitalized and treated as described 
     above. A qualified Gulf Opportunity Zone clean-up cost is an 
     amount paid or incurred for the removal of debris from, or 
     the demolition of structures on, real property located in the 
     Gulf Opportunity Zone to the extent that the amount would 
     otherwise be capitalized. In order to qualify, the property 
     must be held for use in a trade or business, for the 
     production of income, or as inventory.


                               House Bill

       No provision.


                            Senate Amendment

       Under the Senate amendment, a taxpayer is permitted a 
     deduction for 50 percent of any qualified Recovery Assistance 
     clean-up cost paid or incurred during the period beginning on 
     May 4, 2007, and ending on December 31, 2009. The remaining 
     50 percent is treated as under present law. A qualified 
     Recovery Assistance clean-up cost is an amount paid or 
     incurred for the removal of debris from, or the demolition of 
     structures on, real property located in the Kansas disaster 
     area to the extent that the amount would otherwise be 
     capitalized. In order to qualify, the property must be held 
     for use in a trade or business, for the production of income, 
     or as inventory.
       Effective date.--The provision is effective on the date of 
     enactment.


                          Conference Agreement

       The conference agreement follows the Senate amendment.

(g) Treatment of public utility property disaster losses (Sec. 12701 of 
 the Senate amendment, Sec. 15345 of the conference agreement and sec. 
                         1400N(o) of the Code)


                              Present Law

       Under section 165(i), certain losses attributable to a 
     disaster occurring in a Presidentially declared disaster area 
     may, at the election of the taxpayer, be taken into account 
     for the taxable year immediately preceding the taxable year 
     in which the disaster occurred.
       Section 6411 provides a procedure under which taxpayers may 
     apply for tentative carryback and refund adjustments with 
     respect to net operating losses, net capital losses, and 
     unused business credits.
       Section 1400N(o) provides an election for taxpayers who 
     incurred casualty losses attributable to Hurricane Katrina 
     with respect to public utility property located in the Gulf 
     Opportunity Zone. Under the election, such losses may be 
     taken into account in the fifth taxable year (rather than the 
     1st taxable year) immediately preceding the taxable year in 
     which the loss occurred. If the application of this provision 
     results in the creation or increase of a net operating loss 
     for the year in which the casualty loss is taken into 
     account, the net operating loss may be carried back or 
     carried over as under present law applicable to net operating 
     losses for such year.
       For purposes of section 1400N(o), public utility property 
     is property used predominantly in the trade or business of 
     the furnishing or sale of electrical energy, water, or sewage 
     disposal services; gas or steam through a local distribution 
     system; telephone services, or other communication services 
     if furnished or sold by the Communications Satellite 
     Corporation for purposes authorized by the Communications 
     Satellite Act of 1962; or transportation of gas or steam by 
     pipeline. Such property is eligible regardless of whether the 
     taxpayer's rates are established or approved by any 
     regulatory body.
       A taxpayer making the election under the provision is 
     eligible to file an application for a tentative carryback 
     adjustment of the tax for any prior taxable year affected by 
     the election. As under present law with respect to tentative 
     carryback and refund adjustments, the IRS generally has 90 
     days to act on the refund claim. Under the provision, the 
     statute of limitations with respect to such a claim can not 
     expire earlier than one year after the date of enactment. 
     Also, a taxpayer making the election with respect to a loss 
     is not entitled to interest with respect to any overpayment 
     attributable to the loss.


                               house bill

       No provision.


                            senate amendment

       The Senate amendment provides an election for taxpayers who 
     incurred casualty losses attributable to the Kansas storms 
     and tornados with respect to public utility property located 
     in the Kansas Disaster Zone. Under the election, such losses 
     may be taken into account in the fifth taxable year (rather 
     than the 1st taxable year) immediately preceding the taxable 
     year in which the loss occurred. If the application of this 
     provision results in the creation or increase of a net 
     operating loss for the year in which the casualty loss is 
     taken into account, the net operating loss may be carried 
     back or carried over as under present law applicable to net 
     operating losses for such year. The other definitions and 
     rules that apply under section 1400N(o) shall apply to the 
     losses claimed in the Kansas Disaster Zone.
       Effective date.--The provision is effective on the date of 
     enactment.


                          conference agreement

       The conference agreement follows the Senate amendment.

  (h) Treatment of net operating losses attributable to storm losses 
   (Sec. 12701 of the Senate amendment, sec. 15345 of the conference 
                agreement and sec. 1400N(k) of the Code)


                              present Law

       Under present law, a net operating loss (``NOL'') is, 
     generally, the amount by which a taxpayer's business 
     deductions exceed its gross income. In general, an NOL may be 
     carried back two years and carried over 20 years to offset 
     taxable income in such years.\65\ NOLs offset taxable income 
     in the order of the taxable years to which the NOL may be 
     carried.\66\
---------------------------------------------------------------------------
     \65\ Sec. 172(b)(1)(A).
     \66\ Sec. 172(b)(2).
---------------------------------------------------------------------------
       Different rules apply with respect to NOLs arising in 
     certain circumstances. A three-year carryback applies with 
     respect to NOLs (1) arising from casualty or theft losses of 
     individuals, or (2) attributable to Presidentially declared 
     disasters for taxpayers engaged in a farming business or a 
     small business. A five-year carryback applies to NOLs (1) 
     arising from a farming loss (regardless of

[[Page H3692]]

     whether the loss was incurred in a Presidentially declared 
     disaster area), or (2) certain amounts related to Hurricane 
     Katrina and the Gulf Opportunity Zone. Special rules also 
     apply to real estate investment trusts (no carryback), 
     specified liability losses (10-year carryback), and excess 
     interest losses (no carryback to any year preceding a 
     corporate equity reduction transaction). Additionally, a 
     special rule applies to certain electric utility companies.


                               house bill

       No provision.


                            senate amendment

       The Senate amendment provides rules in connection with 
     certain net operating losses similar to the rules provided 
     for Gulf Opportunity Zone losses under section 1400N(k). The 
     rules, as applied to qualified Recovery Assistance losses, 
     are as follows:
     In general
       The provision provides a special five-year carryback period 
     for NOLs to the extent of certain specified amounts related 
     to the Kansas storms and tornados. The amount of the NOL 
     which is eligible for the five year carryback (``eligible 
     NOL'') is limited to the aggregate amount of the following 
     deductions: (i) qualified Recovery Assistance casualty 
     losses; (ii) certain moving expenses; (iii) certain temporary 
     housing expenses; (iv) depreciation deductions with respect 
     to qualified Recovery Assistance property for the taxable 
     year the property is placed in service; and (v) deductions 
     for certain repair expenses resulting from the Kansas 
     storms and tornados. The provision applies for losses paid 
     or incurred after May 3, 2007, and before January 1, 2010; 
     however, an irrevocable election not to apply the five-
     year carryback under the provision may be made with 
     respect to any taxable year.
     Qualified Recovery Assistance casualty losses
       The amount of qualified Gulf Opportunity Zone casualty 
     losses which may be included in the eligible NOL is the 
     amount of the taxpayer's casualty losses with respect to (1) 
     property used in a trade or business, and (2) capital assets 
     held for more than one year in connection with either a trade 
     or business or a transaction entered into for profit. In 
     order for a casualty loss to qualify, the property must be 
     located in the Kansas Disaster Zone and the loss must be 
     attributable to Kansas storms or tornados. As under present 
     law, the amount of any casualty loss includes only the amount 
     not compensated for by insurance or otherwise. In addition, 
     the total amount of the casualty loss which may be included 
     in the eligible NOL is reduced by the amount of any gain 
     recognized by the taxpayer from involuntary conversions of 
     property located in the Kansas Disaster Zone caused by the 
     Kansas storms or tornados.
       To the extent that a casualty loss is included in the 
     eligible NOL and carried back under the provision, the 
     taxpayer is not eligible to also treat the loss as having 
     occurred in the prior taxable year under section 165(i). 
     Similarly, the five year carryback under the provision does 
     not apply to any loss taken into account for purposes of the 
     ten-year carryback of public utility casualty losses which is 
     provided under another provision in the Act.
     Moving expenses
       Certain employee moving expenses of an employer may be 
     included in the eligible NOL. In order to qualify, an amount 
     must be paid or incurred after May 3, 2007, and before 
     January 1, 2010 with respect to an employee who (i) lived in 
     the Kansas Disaster Zone before May 4, 2007, (ii) was 
     displaced from their home either temporarily or permanently 
     as a result of the Kansas storms or tornados, and (iii) is 
     employed in the Kansas Disaster Zone by the taxpayer after 
     the expense is paid or incurred.
       For this purpose, moving expenses are defined as under 
     present law to include only the reasonable expenses of moving 
     household goods and personal effects from the former 
     residence to the new residence, and of traveling (including 
     lodging) from the former residence to the new place of 
     residence. However, for purposes of the provision, the former 
     residence and the new residence may be the same residence if 
     the employee initially vacated the residence as a result of 
     the Kansas storms or tornados. It is not necessary for the 
     individual with respect to whom the moving expenses are 
     incurred to have been an employee of the taxpayer at the time 
     the expenses were incurred. Thus, assuming the other 
     requirements are met, a taxpayer who pays the moving expenses 
     of a prospective employee and subsequently employs the 
     individual in the Kansas Disaster Zone may include such 
     expenses in the eligible NOL.
     Temporary housing expenses
       Any deduction for expenses of an employer to temporarily 
     house employees who are employed in the Kansas Disaster Zone 
     may be included in the eligible NOL. It is not necessary for 
     the temporary housing to be located in the Kansas Disaster 
     Zone in order for such expenses to be included in the 
     eligible NOL; however, the employee's principal place of 
     employment with the taxpayer must be in the Kansas Disaster 
     Zone. So, for example, if a taxpayer temporarily houses an 
     employee at a location outside of the Kansas Disaster Zone, 
     and the employee commutes into the Kansas Disaster Zone to 
     the employee's principal place of employment, such temporary 
     housing costs will be included in the eligible NOL (assuming 
     all other requirements are met).
     Depreciation of Gulf Opportunity Zone property
       The eligible NOL includes the depreciation deduction (or 
     amortization deduction in lieu of depreciation) with respect 
     to qualified Recovery Assistance property placed in service 
     during the year. The special carryback period applies to the 
     entire allowable depreciation deduction for such property for 
     the year in which it is placed in service, including both the 
     regular depreciation deduction and the additional first-year 
     depreciation deduction, if any. An election out of the 
     additional first-year depreciation deduction for qualified 
     Recovery Assistance property does not preclude eligibility 
     for the five-year carryback.
     Repair expenses
       The eligible NOL includes deductions for repair expenses 
     (including the cost of removal of debris) with respect to 
     damage caused by the Kansas storms or tornados. In order to 
     qualify, the amount must be paid or incurred after May 3, 
     2007 and before January 1, 2010, and the property must be 
     located in the Kansas Disaster Zone.
     Other rules
       The amount of the NOL to which the five-year carryback 
     period applies is limited to the amount of the corporation's 
     overall NOL for the taxable year. Any remaining portion of 
     the taxpayer's NOL is subject to the general two-year 
     carryback period. Ordering rules similar to those for 
     specified liability losses apply to losses carried back under 
     the provision.
       In addition, the general rule which limits a taxpayer's NOL 
     deduction to 90 percent of AMTI does not apply to any NOL to 
     which the five-year carryback period applies under the 
     provision. Instead, a taxpayer may apply such NOL carrybacks 
     to offset up to 100 percent of AMTI.
       Effective date.--The provision is effective on the date of 
     enactment.


                          conference agreement

       The conference agreement follows the Senate amendment.

   (i) Representations regarding income eligibility for purposes of 
 qualified residential rental project requirements (Sec. 12701 of the 
   Senate amendment, sec. 15345 of the conference agreement and sec. 
                         1400N(n) of the Code)


                              present law

     In general
       Under present law, gross income does not include interest 
     on State or local bonds (sec. 103). State and local bonds are 
     classified generally as either governmental bonds or private 
     activity bonds. Governmental bonds are bonds which are 
     primarily used to finance governmental functions or are 
     repaid with governmental funds. Private activity bonds are 
     bonds with respect to which the State or local government 
     serves as a conduit providing financing to nongovernmental 
     persons (e.g., private businesses or individuals). The 
     exclusion from income for State and local bonds does not 
     apply to private activity bonds, unless the bonds are issued 
     for certain permitted purposes (``qualified private activity 
     bonds'').
     Qualified private activity bonds
       The definition of a qualified private activity bond 
     includes an exempt facility bond, or qualified mortgage, 
     veterans' mortgage, small issue, redevelopment, 501(c)(3), or 
     student loan bond. The definition of exempt facility bond 
     includes bonds issued to finance certain transportation 
     facilities (airports, ports, mass commuting, and high-speed 
     intercity rail facilities); qualified residential rental 
     projects; privately owned and/or operated utility facilities 
     (sewage, water, solid waste disposal, and local district 
     heating and cooling facilities, certain private electric and 
     gas facilities, and hydroelectric dam enhancements); public/
     private educational facilities; qualified green building and 
     sustainable design projects; and qualified highway or surface 
     freight transfer facilities.
       Subject to certain requirements, qualified private activity 
     bonds may be issued to finance residential rental property or 
     owner-occupied housing. Residential rental property may be 
     financed with exempt facility bonds if the financed project 
     is a ``qualified residential rental project.'' A project is a 
     qualified residential rental project if 20 percent or more of 
     the residential units in such project are occupied by 
     individuals whose income is 50 percent or less of area median 
     gross income (the ``20-50 test''). Alternatively, a project 
     is a qualified residential rental project if 40 percent or 
     more of the residential units in such project are occupied by 
     individuals whose income is 60 percent or less of area median 
     gross income (the ``40-60 test''). The issuer must elect to 
     apply either the 20-50 test or the 40-60 test. Operators of 
     qualified residential rental projects must annually certify 
     that such project meets the requirements for qualification, 
     including meeting the 20-50 test or the 40-60 test.


                               house bill

       No provision


                            senate amendment

       Under the provision, the operator of a qualified 
     residential rental project may rely on the representations of 
     prospective tenants displaced by reason of the severe storms 
     and tornados in the Kansas disaster area beginning on May 4, 
     2007 for purposes of determining whether such individual 
     satisfies the income limitations for qualified residential 
     rental projects and, thus, the project is in compliance with 
     the 20-50 test or the 40-60

[[Page H3693]]

     test. This rule only applies if the individual's tenancy 
     begins during the six-month period beginning on the date when 
     such individual was displaced.
       Effective date.--The provision is effective on the date of 
     enactment.


                          conference agreement

       The conference agreement includes the Senate amendment 
     provision.
       (j) Use of retirement funds from retirement plans relating 
     to the Kansas Disaster Zone (Sec. 12701 of the Senate 
     amendment, sec. 15345 of the conference agreement and sec. 
     1400Q of the Code)


                              present law

     In general


                   Withdrawals from retirement plans

       Under present law, a distribution from a qualified 
     retirement plan under section 401(a), a qualified annuity 
     plan under section 403(a), a tax-sheltered annuity under 
     section 403(b) (a ``403(b) annuity''), an eligible deferred 
     compensation plan maintained by a State or local government 
     under section 457 (a ``governmental 457 plan''), or an 
     individual retirement arrangement under section 408 (an 
     ``IRA'') generally is included in income for the year 
     distributed (secs. 402(a), 403(a), 403(b), 408(d), and 
     457(a)). (These plans are referred to collectively as 
     ``eligible retirement plans''.) In addition, a distribution 
     from a qualified retirement or annuity plan, a 403(b) 
     annuity, or an IRA received before age 59\1/2\, death, or 
     disability generally is subject to a 10-percent early 
     withdrawal tax on the amount includible in income, unless an 
     exception applies (sec. 72(t)).
       An eligible rollover distribution from a qualified 
     retirement or annuity plan, a 403(b) annuity, or a 
     governmental 457 plan, or a distribution from an IRA, 
     generally can be rolled over within 60 days to another plan, 
     annuity, or IRA. The IRS has the authority to waive the 60-
     day requirement if failure to waive the requirement would be 
     against equity or good conscience, including cases of 
     casualty, disaster, or other events beyond the reasonable 
     control of the individual. Any amount rolled over is not 
     includible in income (and thus also not subject to the 10-
     percent early withdrawal tax).
       Distributions from a qualified retirement or annuity plan, 
     403(b) annuity, a governmental 457 plan, or an IRA are 
     generally subject to income tax withholding unless the 
     recipient elects otherwise. An eligible rollover distribution 
     from a qualified retirement or annuity plan, 403(b) annuity, 
     or governmental 457 plan is subject to income tax 
     withholding at a 20-percent rate unless the distribution 
     is rolled over to another plan, annuity or IRA by means of 
     a direct transfer. Any distribution is an eligible 
     rollover distribution unless specifically excepted. 
     Exceptions include a distribution that is part of a series 
     of substantially equal periodic payments made at least 
     annually for the life of the employee.
       Certain amounts held in a qualified retirement plan that 
     includes a qualified cash-or deferred arrangement (a ``401(k) 
     plan'') or in a 403(b) annuity may not be distributed before 
     severance from employment, age 59\1/2\, death, disability, or 
     financial hardship of the employee. Amounts deferred under a 
     governmental 457 plan may not be distributed before severance 
     from employment, age 70\1/2\, or an unforeseeable emergency 
     of the employee.
       Loans from retirement plans
       An individual is permitted to borrow from a qualified plan 
     in which the individual participates (and to use his or her 
     accrued benefit as security for the loan) provided the loan 
     bears a reasonable rate of interest, is adequately secured, 
     provides a reasonable repayment schedule, and is not made 
     available on a basis that discriminates in favor of employees 
     who are officers, shareholders, or highly compensated.
       Subject to certain exceptions, a loan from a qualified 
     employer plan to a plan participant is treated as a taxable 
     distribution of plan benefits. A qualified employer plan 
     includes a qualified retirement plan under section 401(a), a 
     qualified annuity plan under section 403(a), a tax-deferred 
     annuity under section 403(b), and any plan that was (or was 
     determined to be) a qualified employer plan or a governmental 
     plan.
       An exception to this general rule of income inclusion is 
     provided to the extent that the loan (when added to the 
     outstanding balance of all other loans to the participant 
     from all plans maintained by the employer) does not exceed 
     the lesser of (1) $50,000 reduced by the excess of the 
     highest outstanding balance of loans from such plans during 
     the one-year period ending on the day before the date the 
     loan is made over the outstanding balance of loans from the 
     plan on the date the loan is made or (2) the greater of 
     $10,000 or one-half of the participant's accrued benefit 
     under the plan (sec. 72(p)). This exception applies only if 
     the loan is required, by its terms, to be repaid within five 
     years. An extended repayment period is permitted for the 
     purchase of the principal residence of the participant. Plan 
     loan repayments (principal and interest) must be amortized in 
     level payments and made not less frequently than quarterly, 
     over the term of the loan.
       Plan amendments
       Present law provides a remedial amendment period during 
     which, under certain circumstances, a plan may be amended 
     retroactively in order to comply with the qualification 
     requirements (sec. 401(b)). In general, plan amendments 
     required to reflect changes in the law generally must be made 
     by the time prescribed by law for filing the income tax 
     return of the employer for the employer's taxable year in 
     which the change in law occurs. The Secretary of the Treasury 
     may extend the time by which plan amendments need to be made.
     Use of retirement funds related to disaster relief for 
         Hurricanes Katrina, Rita, and Wilma
       In general
       Section 1400Q provides exceptions to certain rules 
     regarding distributions from retirement plans, for loans from 
     retirement plans, and for plan amendments to retirement 
     plans.\67\
---------------------------------------------------------------------------
     \67\ The relief with respect to Hurricane Katrina was 
     initially provided in the Katrina Emergency Relief Act of 
     2005 (Pub. L. No. 109-73). The IRS provided guidance on those 
     relief provisions in Notice 2005-92, 2005-2 CB 1165. The 
     relief was codified in section 1400Q and was expanded to the 
     Hurricanes Rita and Wilma Disaster areas in the Gulf 
     Opportunity Zone Act of 2005 (Pub. L. No. 109-135).
---------------------------------------------------------------------------
       Tax favored withdrawals from retirement plans
       Section 1400Q(a) provides an exception to the 10-percent 
     early withdrawal tax in the case of a qualified hurricane 
     distribution from a qualified retirement or annuity plan, a 
     403(b) annuity, or an IRA. In addition, as discussed more 
     fully below, income attributable to a qualified hurricane 
     distribution may be included in income ratably over three 
     years, and the amount of a qualified hurricane distribution 
     may be recontributed to an eligible retirement plan within 
     three years.
       A qualified hurricane distribution includes certain 
     distributions from an eligible retirement plan related to 
     Hurricanes Katrina, Wilma, and Rita. Specifically, qualified 
     hurricane distributions include the following distributions 
     from an eligible retirement plan: Any distribution made on or 
     after August 25, 2005, and before January 1, 2007, to an 
     individual whose principal place of abode on August 28, 2005, 
     is located in the Hurricane Katrina disaster area and who has 
     sustained an economic loss by reason of Hurricane Katrina; 
     any distribution made on or after September 23, 2005, and 
     before January 1, 2007, to an individual whose principal 
     place of abode on September 23, 2005, is located in the 
     Hurricane Rita disaster area and who has sustained an 
     economic loss by reason of Hurricane Rita; and any 
     distribution made on or after October 23, 2005, and before 
     January 1, 2007, to an individual whose principal place of 
     abode on October 23, 2005, is located in the Hurricane Wilma 
     disaster area and who has sustained an economic loss by 
     reason of Hurricane Wilma.
       The total amount of qualified hurricane distributions that 
     an individual can receive from all plans, annuities, or IRAs 
     is $100,000. Thus, any distributions in excess of $100,000 
     during the applicable periods are not qualified hurricane 
     distributions.
       Any amount required to be included in income as a result of 
     a qualified hurricane distribution is included in income 
     ratably over the three-year period beginning with the year of 
     distribution unless the individual elects not to have ratable 
     inclusion apply.
       Any portion of a qualified hurricane distribution may, at 
     any time during the three-year period beginning the day after 
     the date on which the distribution was received, be 
     recontributed to an eligible retirement plan to which a 
     rollover can be made. Any amount recontributed within the 
     three-year period is treated as a rollover and thus is not 
     includible in income. For example, if an individual receives 
     a qualified hurricane distribution in 2005, that amount is 
     included in income, generally ratably over the year of the 
     distribution and the following two years, but is not 
     subject to the 10-percent early withdrawal tax. If, in 
     2007, the amount of the qualified hurricane distribution 
     is recontributed to an eligible retirement plan, the 
     individual may file an amended return (or returns) to 
     claim a refund of the tax attributable to the amount 
     previously included in income. In addition, if, under the 
     ratable inclusion provision, a portion of the distribution 
     has not yet been included in income at the time of the 
     contribution, the remaining amount is not includible in 
     income.
       A qualified hurricane distribution is a permissible 
     distribution from a 401(k) plan, 403(b) annuity, or 
     governmental 457 plan, regardless of whether a distribution 
     would otherwise be permissible. A plan is not treated as 
     violating any Code requirement merely because it treats a 
     distribution as a qualified hurricane distribution, provided 
     that the aggregate amount of such distributions from plans 
     maintained by the employer and members of the employer's 
     controlled group does not exceed $100,000. A plan is not 
     treated as violating any Code requirement merely because an 
     individual might receive total distributions in excess of 
     $100,000, taking into account distributions from plans of 
     other employers or IRAs.
       Qualified hurricane distributions are subject to the income 
     tax withholding rules applicable to distributions other than 
     eligible rollover distributions. Thus, 20-percent mandatory 
     withholding does not apply.
       Recontributions of withdrawals for home purchases
       Section 1400Q(b) generally provides that a distribution 
     received from a 401(k) plan, 403(b) annuity, or IRA in order 
     to purchase a home in the Hurricane Katrina, Rita, or Wilma 
     disaster areas may be recontributed to such a plan, annuity, 
     or IRA in certain circumstances.
       The ability to recontribute applies to an individual who 
     receives a qualified distribution. A qualified distribution 
     is a hardship

[[Page H3694]]

     distribution from a 401(k) plan or 403(b) annuity, or a 
     qualified first-time homebuyer distribution from an IRA, that 
     is a qualified Katrina distribution, a qualified Rita 
     distribution, or a qualified Wilma distribution.
       A qualified Katrina distribution is a distribution: (1) 
     that is received after February 28, 2005, and before August 
     29, 2005; and (2) that was to be used to purchase or 
     construct a principal residence in the Hurricane Katrina 
     disaster area, but the residence is not purchased or 
     constructed on account of Hurricane Katrina. Any portion of a 
     qualified Katrina distribution may, during the period 
     beginning on August 25, 2005, and ending on February 28, 
     2006, be recontributed to a plan, annuity or IRA to which a 
     rollover is permitted.
       A qualified Hurricane Rita distribution is a distribution: 
     (1) that is received after February 28, 2005, and before 
     September 24, 2005; and (2) that was to be used to purchase 
     or construct a principal residence in the Hurricane Rita 
     disaster area, but the residence is not purchased or 
     constructed on account of Hurricane Rita. Any portion of a 
     qualified Hurricane Rita distribution may, during the period 
     beginning on September 23, 2005, and ending on February 28, 
     2006, be recontributed to a plan, annuity or IRA to which a 
     rollover is permitted.
       A qualified Hurricane Wilma distribution is a distribution: 
     (1) that is received after February 28, 2005, and before 
     October 24, 2005; and (2) that was to be used to purchase or 
     construct a principal residence in the Hurricane Wilma 
     disaster area, but the residence is not purchased or 
     constructed on account of Hurricane Wilma. Any portion of a 
     qualified Hurricane Wilma distribution may, during the period 
     beginning on October 23, 2005, and ending on February 28, 
     2006, be recontributed to a plan, annuity or IRA to which a 
     rollover is permitted.
       Any amount recontributed is treated as a rollover. Thus, 
     that portion of the qualified distribution is not includible 
     in income (and also is not subject to the 10-percent early 
     withdrawal tax).
       Loans from qualified plans to individuals sustaining an 
           economic loss
       Section 1400Q(c) provides an exception to the income 
     inclusion rule for loans from a qualified employer plan 
     related to Hurricanes Katrina, Rita, and Wilma made to a 
     qualified individual during an applicable period and provides 
     a repayment delay for loans that are outstanding on or after 
     a qualified beginning date if the due date for any repayment 
     with respect to such loan occurs after the qualified 
     beginning date and December 31, 2006.
       The exception to the general rule of income inclusion is 
     provided to the extent that the loan (when added to the 
     outstanding balance of all other loans to the participant 
     from all plans maintained by the employer) does not exceed 
     the lesser of (1) $100,000 reduced by the excess of the 
     highest outstanding balance of loans from such plans during 
     the one-year period ending on the day before the date the 
     loan is made over the outstanding balance of loans from the 
     plan on the date the loan is made or (2) the greater of 
     $10,000 or the participant's accrued benefit under the plan.
       In the case of a qualified individual with an outstanding 
     loan on or after the qualified beginning date from a 
     qualified employer plan, if the due date for any repayment 
     with respect to such loan occurs during the period beginning 
     on the qualified beginning date, and ending on December 31, 
     2006, such due date is delayed for one year. Any subsequent 
     repayments with respect to such loan shall be appropriately 
     adjusted to reflect the delay in the due date and any 
     interest accruing during such delay. The period during which 
     required repayment is delayed is disregarded in complying 
     with the requirements that the loan be repaid within five 
     years and that level amortization payments be made.
       A qualified individual entitled to this plan loan relief 
     includes a qualified Katrina individual, a qualified Rita 
     individual, or a qualified Wilma individual. A qualified 
     Hurricane Katrina individual is an individual whose principal 
     place of abode on August 28, 2005, is located in the 
     Hurricane Katrina disaster area and who has sustained an 
     economic loss by reason of Hurricane Katrina. The qualified 
     beginning date for a qualified Katrina individual is August 
     25, 2005 and the applicable period is the period beginning on 
     September 24, 2005, and ending December 31, 2006.
       A qualified Hurricane Rita individual is an individual 
     whose principal place of abode on September 23, 2005, is 
     located in a Hurricane Rita disaster area and who has 
     sustained an economic loss by reason of Hurricane Rita. The 
     qualified beginning date for a qualified Hurricane Rita 
     individual is September 23, 2005, and the applicable 
     period is the period beginning on September 23, 2005, and 
     ending on December 31, 2006.
       A qualified Hurricane Wilma individual is an individual 
     whose principal place of abode on October 23, 2005, is 
     located in a Hurricane Wilma disaster area and who has 
     sustained an economic loss by reason of Hurricane Wilma. The 
     qualified beginning date for a qualified Hurricane Wilma 
     individual is October 23, 2005, and the applicable period is 
     the period beginning on October 23, 2005, and ending on 
     December 31, 2006.
       An individual cannot be a qualified individual with respect 
     to more than one hurricane.
       Plan amendments relating to Hurricanes Katrina, Rita, and 
           Wilma
       Section 1400Q(d) permits certain plan amendments made 
     pursuant to any provision in section 1400Q, or regulations 
     issued thereunder, to be retroactively effective. If the plan 
     amendment meets the requirements of section 1400Q, then the 
     plan will be treated as being operated in accordance with its 
     terms. In order for this treatment to apply, the plan 
     amendment is required to be made on or before the last day of 
     the first plan year beginning on or after January 1, 2007, or 
     such later date as provided by the Secretary of the Treasury. 
     Governmental plans are given an additional two years in which 
     to make required plan amendments. If the amendment is 
     required to be made to retain qualified status as a result of 
     the changes made by section 1400Q (or regulations), the 
     amendment is required to be made retroactively effective as 
     of the date on which the change became effective with respect 
     to the plan, and the plan is required to be operated in 
     compliance until the amendment is made. Amendments that are 
     not required to retain qualified status but that are made 
     pursuant to section 1400Q may be made retroactively effective 
     as of the first day the plan is operated in accordance with 
     the amendment. A plan amendment will not be considered to be 
     pursuant to section 1400Q (or regulations) if it has an 
     effective date before the effective date of the provision (or 
     regulations) to which it relates.


                               House Bill

       No provision.


                            Senate Amendment

       The Senate amendment provides relief similar to the relief 
     provided in section 1400Q with respect to use of retirement 
     funds in connection with the tornadoes and storms that 
     occurred in the Kansas disaster area.
       Effective date.--The provision is effective on the date of 
     enactment.


                          Conference Agreement

       The conference agreement follows the Senate amendment.

      6. Modification of the advanced coal project credit and the 
gasification project credit (Sec. 15346 of the conference agreement and 
                     secs. 48A and 48B of the Code)


                              Present Law

     Advanced coal project credit
       An investment tax credit is available for power generation 
     projects that use integrated gasification combined cycle 
     (``IGCC'') or other advanced coal-based electricity 
     generation technologies.\68\ The credit amount is 20 percent 
     for investments in qualifying IGCC projects and 15 percent 
     for investments in qualifying projects that use other 
     advanced coal-based electricity generation technologies.
---------------------------------------------------------------------------
     \68\ Sec. 48A.
---------------------------------------------------------------------------
       To qualify, an advanced coal project must be located in the 
     United States and use an advanced coal-based generation 
     technology to power a new electric generation unit or to 
     retrofit or repower an existing unit. Generally, an electric 
     generation unit using an advanced coal-based technology must 
     be designed to achieve a 99 percent reduction in sulfur 
     dioxide and a 90 percent reduction in mercury, as well as to 
     limit emissions of nitrous oxide and particulate matter.\69\
---------------------------------------------------------------------------
     \69\ For advanced coal project certification applications 
     submitted after October 2, 2006, an electric generation unit 
     using advanced coal-based generation technology designed to 
     use subbituminous coal can meet the performance requirement 
     relating to the removal of sulfur dioxide if it is designed 
     either to remove 99 percent of the sulfur dioxide or to 
     achieve an emission limit of 0.04 pounds of sulfur dioxide 
     per million British thermal units on a 30-day average.
---------------------------------------------------------------------------
       The fuel input for a qualifying project, when completed, 
     must use at least 75 percent coal. The project, consisting of 
     one or more electric generation units at one site, must have 
     a nameplate generating capacity of at least 400 megawatts, 
     and the taxpayer must provide evidence that a majority of the 
     output of the project is reasonably expected to be acquired 
     or utilized.
       Credits are available only for projects certified by the 
     Secretary of Treasury, in consultation with the Secretary of 
     Energy. Certifications are issued using a competitive bidding 
     process. The Secretary of Treasury must establish a 
     certification program no later than 180 days after August 8, 
     2005,\70\ and each project application must be submitted 
     during the three-year period beginning on the date such 
     certification program is established. An applicant for 
     certification has two years from the date the Secretary 
     accepts the application to provide the Secretary with 
     evidence that the requirements for certification have been 
     met. Upon certification, the applicant has five years from 
     the date of issuance of the certification to place the 
     project in service.
---------------------------------------------------------------------------
     \70\ The Secretary issued guidance establishing the 
     certification program on February 21, 2006 (IRS Notice 2006-
     24).
---------------------------------------------------------------------------
       The Secretary of Treasury may allocate $800 million of 
     credits to IGCC projects and $500 million to projects using 
     other advanced coal-based electricity generation 
     technologies. Qualified projects must be economically 
     feasible and use the appropriate clean coal technologies. 
     With respect to IGCC projects, credit-eligible investments 
     include only investments in property associated with the 
     gasification of coal, including any coal handling and gas 
     separation equipment. Thus, investments in equipment that 
     could operate by drawing fuel directly from a natural gas 
     pipeline do not qualify for the credit.
       In determining which projects to certify that use IGCC 
     technology, the Secretary

[[Page H3695]]

     must allocate power generation capacity in relatively equal 
     amounts to projects that use bituminous coal, subbituminous 
     coal, and lignite as primary feedstock. In addition, the 
     Secretary must give high priority to projects which include 
     greenhouse gas capture capability, increased by-product 
     utilization, and other benefits.
     Gasification project credit
       A 20-percent investment tax credit is also available for 
     investments in certain qualifying coal gasification 
     projects.\71\ Only property which is part of a qualifying 
     gasification project and necessary for the gasification 
     technology of such project is eligible for the gasification 
     credit.
---------------------------------------------------------------------------
     \71\ Sec. 48B.
---------------------------------------------------------------------------
       Qualified gasification projects convert coal, petroleum 
     residue, biomass, or other materials recovered for their 
     energy or feedstock value into a synthesis gas composed 
     primarily of carbon monoxide and hydrogen for direct use or 
     subsequent chemical or physical conversion. Qualified 
     projects must be carried out by an eligible entity, defined 
     as any person whose application for certification is 
     principally intended for use in a domestic project which 
     employs domestic gasification applications related to (1) 
     chemicals, (2) fertilizers, (3) glass, (4) steel, (5) 
     petroleum residues, (6) forest products, and (7) agriculture, 
     including feedlots and dairy operations.
       Credits are available only for projects certified by the 
     Secretary of Treasury, in consultation with the Secretary of 
     Energy. Certifications are issued using a competitive bidding 
     process. The Secretary of Treasury must establish a 
     certification program no later than 180 days after August 8, 
     2005,\72\ and each project application must be submitted 
     during the three-year period beginning on the date such 
     certification program is established. The Secretary of 
     Treasury may not allocate more than $350 million in credits. 
     In addition, the Secretary may certify a maximum of $650 
     million in qualified investment as eligible for credit with 
     respect to any single project.
---------------------------------------------------------------------------
     \72\ The Secretary issued guidance establishing the 
     certification program on February 21, 2006 (IRS Notice 2006-
     25).
---------------------------------------------------------------------------


                               House Bill

       No provision.


                            Senate Amendment

       No provision.


                          Conference Agreement

       In implementing either section 48A (relating to the credit 
     described above) or section 48B (relating to the coal 
     gasification credit), the provision directs the Secretary to 
     modify the terms of any competitive certification award and 
     any associated closing agreements in certain cases. 
     Specifically, modification is required when it (1) is 
     consistent with the objectives of such section, (2) is 
     requested by the recipient of the award, and (3) involves 
     moving the project site to improve the potential to capture 
     and sequester carbon dioxide emissions, reduce costs of 
     transporting feedstock, and serve a broader customer base. 
     However, no modification is required if the Secretary 
     determines that the dollar amount of tax credits available to 
     the taxpayer under the applicable section would increase as a 
     result of the modification or such modification would result 
     in such project not being originally certified. In 
     considering any such modification, the Secretary must consult 
     with other relevant Federal agencies, including the 
     Department of Energy.


                             Effective Date

       The provision is effective for credit allocation awards 
     issued before, on, or after the date of enactment.

                      D. Other Revenue Provisions

1. Limitation on farming losses of certain taxpayers (Sec. 12501 of the 
 Senate amendment, sec. 15351 of the conference agreement and sec. 461 
                              of the Code)


                              Present Law

       For taxpayers who materially participate (as defined in 
     section 469(h)) in a farming activity, net farming losses are 
     reported in full as a reduction to income from both passive 
     and nonpassive sources. For taxpayers who do not materially 
     participate in a farming activity, the passive activity rules 
     of section 469 limit the ability to use such losses to reduce 
     income from nonpassive sources.
       Farming income generally includes sales of livestock, 
     produce, grains, and other products; cooperative 
     distributions; Agricultural Program Payments; certain 
     Commodity Credit Corporation (``CCC'') loans (if an election 
     is made to include loan proceeds in income in the year 
     received); certain crop insurance proceeds and federal crop 
     disaster payments; and other income. Farm expenses generally 
     include feed, fertilizers, gasoline, fuel, and oil; 
     insurance; interest; hired labor; rent and lease payments; 
     repairs and maintenance; taxes; utilities; depreciation; and 
     other business-related expenses. Living expenses and other 
     personal expenses are not deductible farming expenses.
       Present law (section 263A(e)(4)) \73\ defines a farming 
     business as the trade or business of farming, including the 
     trade or business of operating a nursery or sod farm, or the 
     raising or harvesting of trees bearing fruit, nuts, or other 
     crops, or ornamental trees (excluding evergreen trees that 
     are more than six years old at the time severed from the 
     roots). Treasury regulation section 1.263A-4(a)(4) further 
     provides that a farming business generally means a trade or 
     business involving the cultivation of land or the raising or 
     harvesting of any agricultural or horticultural commodity. 
     The raising, shearing, feeding, caring for, training, and 
     management of animals are included in this definition. For 
     example, the raising of cattle for sale is considered a 
     farming business. However, the mere buying and reselling of 
     plants or animals grown or raised entirely by another is not 
     considered to be raising an agricultural or horticultural 
     commodity. While a farming business does include processing 
     activities that are normally incident to the growing, 
     raising, or harvesting of agricultural or horticultural 
     products (e.g., harvesting, washing, inspecting, and packing 
     fruits and vegetables for sale), it does not include the 
     processing of commodities or products beyond those activities 
     that are normally incident to the growing, raising, or 
     harvesting of such products.
---------------------------------------------------------------------------
     \73\ This is the same definition of ``farming business'' used 
     for averaging of farm income under section 1301.
---------------------------------------------------------------------------


                               House Bill

       No provision.


                            Senate Amendment

       The Senate amendment limits the amount of losses that can 
     be claimed by an individual, estate, trust, or partnership on 
     Schedule F to $200,000 in cases where the taxpayer has 
     received Agricultural Program Payments or CCC loans. Losses 
     that are limited in a particular year may be carried forward 
     to subsequent years.
       Effective date.--The provision is effective for taxable 
     years beginning after December 31, 2007.


                          Conference Agreement

       The conference agreement follows the Senate amendment with 
     modifications. The conference agreement limits the farming 
     loss of a taxpayer, other than a C corporation, for any 
     taxable year in which any applicable subsidies are received 
     to the greater of (1) $300,000 ($150,000 in the case of a 
     married person filing a separate return), or (2) the 
     taxpayer's total net farm income for the prior five taxable 
     years. For purposes of the provision, applicable subsidies 
     are (1) any direct or counter-cyclical payments under title I 
     of the Food, Conservation, and Energy Act of 2008 (or any 
     payment elected in lieu of any such payment), or (2) any CCC 
     loan. Total net farm income is an aggregation of all income 
     and loss from farming businesses for the prior five taxable 
     years.
       The following examples illustrate the operation of this 
     provision:
       Example 1.--Assume an individual taxpayer has $1 million of 
     net income from a farming business in each taxable year 2010 
     to 2014, and incurs a $5 million farming loss in 2015. For 
     purposes of this provision, the farming loss in 2015 is 
     limited to the greater of (1) $300,000 or (2) $5 million 
     (total net farm income for the prior five taxable years). 
     Thus, the farming loss is allowable in full in 2015. Assuming 
     the taxpayer had no other income or deductions in any of the 
     taxable years 2010 to 2015, the $5 million net operating loss 
     for 2015 is carried back to the prior five taxable years 
     under the present-law net operating loss carryback rules and 
     reduces the taxpayer's taxable income in each of those years 
     to zero.\74\
---------------------------------------------------------------------------
     \74\ Under section 172(b)(1)(G), farming losses may be 
     carried back to each of the five taxable years preceding the 
     taxable year of the loss.
---------------------------------------------------------------------------
       Example 2.--Assume an individual taxpayer has $300,000 of 
     net farm income and $700,000 of non-farm income in 2010, and 
     $1 million of net farm income in each taxable year 2011 to 
     2014. In 2015, the taxpayer incurs a $7 million farming loss. 
     For purposes of this provision, the farming loss in 2015 is 
     limited to the greater of (1) $300,000 or (2) $4.3 million 
     (total net farm income for the prior five taxable years). 
     Thus, $2.7 million of the farming loss is disallowed under 
     the provision and will be treated as a deduction attributable 
     to a farming business in 2016. The $4.3 million farming loss 
     allowed for 2015 is carried back to the prior five taxable 
     years and allowed as a deduction under present-law rules. The 
     taxpayer's taxable income in each of the years 2010 \75\ to 
     2013 is reduced to zero and taxable income in 2014 is 
     reduced by the remaining farm loss of $300,000 to 
     $700,000.
---------------------------------------------------------------------------
     \75\ The loss carryback to 2010 reduces both the $300,000 of 
     net farm income and $700,000 of non-farm income to zero.
---------------------------------------------------------------------------
       For purposes of calculating total net farm income for the 
     prior five years, losses that are limited under the provision 
     are taken into account in the year in which they are allowed 
     as a deduction. For example, if a taxpayer has a $500,000 
     excess farm loss in 2010 that is not allowed as a deduction 
     until 2012, the calculation in 2011 of total net farm income 
     for the prior five years does not take into account the 
     $500,000 as a farm loss. Instead, the $500,000 loss would be 
     included in the calculation of prior year's total net farm 
     income for taxable years 2013 through 2017. In the case where 
     the filing status of the taxpayer is not the same for the 
     taxable year and each of the taxable years in the five-year 
     period, the Treasury Department is authorized to provide 
     guidance for the computation of total net farm income.
       In the case of a partnership or S corporation, the limit is 
     applied at the partner or shareholder level.\76\ Therefore, 
     each partner

[[Page H3696]]

     or shareholder takes into account its proportionate share of 
     income, gain, or deduction from farming businesses of a 
     partnership or S corporation, and any applicable subsidies 
     received by a partnership or S corporation during the taxable 
     year (regardless of whether such items are treated as income 
     for Federal tax purposes).
---------------------------------------------------------------------------
     \76\ The Treasury Department may provide guidance for the 
     application of this provision to any other pass-thru entity 
     to the extent necessary to carry out the purposes of this 
     provision. In the case of tiered partnership or pass-thru 
     entity structures, the Treasury Department may provide 
     guidance as necessary to carry out the purposes of this 
     provision.
---------------------------------------------------------------------------
       For purposes of the provision, the term ``farming 
     business'' has the meaning provided in present-law section 
     263A(e)(4), with a modification for certain processing 
     activities. Thus, for purposes of this provision, the 
     conference agreement broadens the definition of ``farming 
     business'' to include the processing of commodities, without 
     regard to whether such activity is incidental, by a taxpayer 
     otherwise engaged in a farming business with respect to such 
     commodities. The farming activities of a cooperative are 
     attributed to each member for purposes of this rule. Thus, a 
     member of a cooperative who raises a commodity and sells it 
     to the cooperative for processing is considered to be the 
     processor of such commodity. In this case, patronage 
     dividends received from a cooperative that is engaged in a 
     farming business are considered to be income from a farming 
     business for purposes of this provision.
       As under the Senate amendment, any loss that is disallowed 
     under the provision in a particular year is carried forward 
     to the next taxable year and treated as a deduction 
     attributable to farming businesses in that year.
       Farming losses arising by reason of fire, storm, or other 
     casualty, or by reason of disease or drought, are disregarded 
     for purposes of calculating the limitation.
       Treasury regulatory authority is provided to prescribe such 
     additional reporting requirements as appropriate to carry out 
     the purposes of this provision.
       Effective date.--The provision is effective for taxable 
     years beginning after December 31, 2009.

 2. Increase and index dollar thresholds for farm optional method and 
nonfarm optional method for computing net earnings from self-employment 
   (Sec. 12502 of the Senate amendment, sec. 15352 of the conference 
                agreement and sec. 1402(a) of the Code)


                              Present Law

     In general
       Generally, tax under the Self-Employment Contributions Act 
     (SECA) is imposed on the self-employment income of an 
     individual. SECA tax has two components. Under the old-age, 
     survivors, and disability insurance component, the rate of 
     tax is 12.40 percent on self-employment income up to the 
     Social Security wage base ($97,500 for 2007). Under the 
     hospital insurance component, the rate is 2.90 percent of all 
     self-employment income (without regard to the Social Security 
     wage base).
       Self-employment income subject to the SECA tax is 
     determined as the net earnings from self-employment. An 
     individual may use one of three methods to calculate net 
     earnings from self-employment. Under the generally applicable 
     rule, net earnings from self-employment means gross income 
     (including the individual's net distributive share of 
     partnership income) derived by an individual from any trade 
     or business carried on by the individual, less the deductions 
     attributable to the trade or business that are allowed under 
     the SECA tax rules. Alternatively, an individual may elect to 
     use one of two optional methods for calculating net earnings 
     from self-employment. These methods are: (1) the farm 
     optional method; and (2) the nonfarm optional method. The 
     farm optional method allows individuals to pay SECA taxes 
     (and secure Social Security benefit coverage) when they have 
     low net income or losses from farming. The nonfarm optional 
     method is similar to the farm optional method.
     Farm optional method
       If an individual is engaged in a farming trade or business, 
     either as a sole proprietor or as a partner, the individual 
     may elect to use the farm optional method in one of two 
     instances. The first instance is an individual engaged in a 
     farming business who has gross farm income of $2,400 or less 
     for the taxable year. In this instance, the individual may 
     elect to report two-thirds of gross farm income as net 
     earnings from self-employment. In the second instance, an 
     individual engaged in a farming business may elect the farm 
     optional method even though gross farm income exceeds $2,400 
     for the taxable year but only if the net farm income is less 
     than $1,733 for the taxable year. In this second instance, 
     the individual may elect to report $1,600 as net earnings 
     from self-employment for the taxable year. In all other 
     instances (i.e., more than $2,400 of gross farm income and 
     net farm income of at least $1,733) a person engaged in a 
     farming business must compute net earnings from self-
     employment under the generally applicable rule. There is no 
     limit on the number of years that an individual may elect the 
     farm optional method during such individual's lifetime.
       The dollar limits in the farm optional method are not 
     indexed for inflation.
     Nonfarm optional method
       The nonfarm optional method is available only to 
     individuals who have been self-employed for at least two of 
     the three years before the year in which they seek to elect 
     the nonfarm optional method and who meet certain other 
     requirements. Specifically, an individual may elect the 
     nonfarm optional method if the individual's: (1) net nonfarm 
     income for the taxable year is less than $1,733; and (2) net 
     nonfarm income for the taxable year is less than 72.189 
     percent of gross nonfarm income. If a qualified individual 
     engaged in a nonfarming business who elects the nonfarm 
     optional method has gross nonfarm income of $2,400 or less 
     for the taxable year, then the individual may elect to report 
     two-thirds of gross nonfarm income as net earnings from self-
     employment. If the electing individual engaged in a 
     nonfarming business has gross nonfarm income of at least 
     $2,400 for the taxable year, then the individual may elect to 
     report $1,600 as net earnings from self-employment for the 
     taxable year. In all other instances, a person engaged in a 
     nonfarming business must compute net earnings from self-
     employment under the generally applicable rule. An individual 
     may elect to use the nonfarm optional method for no more than 
     five years in the course of the individual's lifetime.
       The dollar limits in the nonfarm optional method are not 
     indexed for inflation.
     Other rules applicable to farm optional and nonfarm optional 
         methods
       In the case of a cash method trade or business, gross 
     income is defined as the gross receipts from such trade or 
     business less the cost or other basis of property sold in 
     carrying out such trade or business with certain adjustments. 
     In the case of an accrual method trade or business, gross 
     income is defined as the gross income from the trade or 
     business with certain adjustments. If an individual 
     (including a member of a partnership) derives gross income 
     from more than one trade or business then such gross income 
     (including the individual's distributive share of the gross 
     income of any partnership) is treated as derived from a 
     single trade or business.
     Social Security benefit eligibility
       Generally, Social Security benefits can be paid to an 
     individual (and dependents or survivors) only if that 
     individual has worked long enough in covered employment to be 
     insured. Insured status is measured in terms of ``credits,'' 
     previously called ``quarters of coverage.'' For this purpose, 
     Social Security uses the lifetime record of earnings reported 
     for that individual. In the case of a self-employed 
     individual, net earnings from self-employment is used to 
     calculate Social Security benefit eligibility.
       Up to four quarters of coverage can be earned for a year, 
     depending on covered wages for the year and the amount needed 
     to earn each quarter of coverage. For 2007, credit for a 
     quarter of coverage is provided for each $1,000 of wages.


                               house bill

       No provision.


                            senate amendment

       The Senate amendment modifies the farm optional method so 
     that electing taxpayers may be eligible to secure four 
     credits of Social Security benefit coverage each taxable year 
     by increasing and indexing the thresholds. The provision 
     makes a similar modification to the nonfarm optional method.
       Effective date.--The provision is effective for taxable 
     years beginning after December 31, 2007.


                          conference agreement

       The conference agreement follows the Senate amendment.

3. Information reporting for commodity credit corporation transactions 
   (Sec. 12503 of the Senate amendment, sec. 15353 of the conference 
               agreement and new sec. 6039J of the Code)


                              present law

       The Farm Security and Rural Investment Act of 2002 \77\ 
     authorizes a marketing assistance loan program through the 
     Commodity Credit Corporation (``CCC''). Under such program, 
     the CCC may make loans for eligible commodities at a 
     specified rate per unit of commodity (the original loan 
     rate). The repayment amount for such a loan secured by an 
     eligible commodity generally is based on the lower of the 
     original loan rate or the alternative repayment rate, as 
     determined by the CCC, as of the date of repayment. The 
     alternative repayment rate may be adjusted to reflect quality 
     and location for each type of commodity. A taxpayer receiving 
     a CCC loan can use cash to repay such a loan, purchase CCC 
     certificates for use in repayment of the loan, or deliver the 
     pledged collateral as full payment for the loan at maturity.
---------------------------------------------------------------------------
     \77\ Pub. L. No. 107-171.
---------------------------------------------------------------------------
       If a taxpayer uses cash or CCC certificates to repay a CCC 
     loan, and the loan is repaid at a time when the repayment 
     rate is less than the original loan rate, the difference 
     between the original loan amount and the lesser repayment 
     amount is market gain. Regardless of whether a taxpayer 
     repays a CCC loan in cash or uses CCC certificates in 
     repayment of the loan, the market gain is taken into account 
     either as income or as an adjustment to the basis of the 
     commodity (if the taxpayer has made an election under section 
     77).
       If a farmer uses cash instead of certificates, the farmer 
     will receive a Form CCC-1099-G Information Return showing the 
     market gain realized. For transactions prior to January 1, 
     2007, however, if a farmer uses CCC certificates to 
     facilitate repayment of a

[[Page H3697]]

     CCC loan, the farmer will not receive an information return. 
     For loans repaid on or after January 1, 2007, IRS Notice 
     2007-63 provides that the CCC reports market gain associated 
     with the repayment of a CCC loan whether the taxpayer repays 
     the loan with cash or uses CCC certificates in repayment 
     of the loan.\78\ The CCC reports the market gain on Form 
     1099-G, Certain Government Payments.
---------------------------------------------------------------------------
     \78\ 2007-33 IRB.
---------------------------------------------------------------------------


                               house bill

       No provision.


                            senate amendment

       The Senate amendment codifies the requirements of IRS 
     Notice 2007-63 providing that the CCC reports market gain 
     associated with the repayment of a CCC loan, regardless of 
     whether the taxpayer repays the loan with cash or uses CCC 
     certificates in repayment of the loan.
       Effective date.--The provision is effective for loans 
     repaid on or after January 1, 2007.


                          conference agreement

       The conference agreement includes the Senate amendment 
     provision.

    E. Protection of Social Security (Sec. 15361 of the Conference 
                               agreement)

       To ensure that the assets of the trust funds established 
     under section 201 of the Social Security Act are not reduced 
     as the result of the enactment of this Act, the Secretary of 
     the Treasury shall transfer certain amounts annually from the 
     general revenues of the Federal Government to those trust 
     funds.

                          IV. TRADE PROVISIONS

                 A. Extension of Certain Trade Benefits

     (Secs. 15401-15407 and 15410-15411 of the conference 
         agreement)


                              Present Law

       Sec. 213A of the Caribbean Basin Recovery Act (19 U.S.C. 
     2703a) establishes the Haitian Hemispheric Opportunity 
     through Partnership Encouragement Act of 2006 (``HOPE I''). 
     HOPE I extended preferences to Haiti for apparel meeting 
     certain rules of origin, and for certain automotive wire 
     harnesses.
       With respect to apparel, HOPE I extended preferential 
     treatment to three categories of apparel: (1) apparel meeting 
     a value-added rule of origin; (2) limited quantities of woven 
     apparel wholly assembled in Haiti; and (3) brassieres meeting 
     a cut and sew requirement.
       HOPE I (in section 213A(d)) conditions Haiti's eligibility 
     for these preferences on the President determining and 
     certifying that Haiti has either established, or is making 
     continual progress towards establishing, protection of 
     internationally recognized worker rights. These rights 
     include the right of association, the right to organize and 
     bargain collectively, a prohibition on the use of any form of 
     forced or compulsory labor, a minimum age of employment of 
     children, and acceptable conditions of work with respect to 
     minimum wages, hours of work, and occupational safety and 
     health.
       The use of the HOPE I preference program has been very 
     limited to date.
       In fact, just 1.6% of Haiti's apparel exports in 2007 were 
     under the HOPE I program. The Conferees believe that the 
     limited use of the program is largely attributable to HOPE 
     I's complex value-added rule of origin. As a result, the 
     economic benefits -- namely, new investment and significant 
     new job creation -- that the preference program was intended 
     to spread widely to foster stability and security in Haiti 
     have not been forthcoming.


                               House Bill

       No provision.


                            Senate Amendment

       No provision.


                          Conference Agreement

       To address the deficiencies in HOPE I, the conference 
     report includes the Haitian Hemispheric Opportunity through 
     Partnership Encouragement Act of 2008 (HOPE II), which 
     provides additional ways (under simplified rules) that 
     Haitian apparel can qualify for duty-free treatment, as well 
     as authorizing a new apparel sector labor capacity building 
     and monitoring program (the Technical Assistance Improvement 
     and Compliance Needs Assessment and Remediation Program or 
     ``TAICNAR program'') to ensure the benefits of the new 
     preferences are spread widely. The Conferees intend HOPE II 
     to help Haitian industry attract new investment and create 
     immediate jobs, generate income for workers to cover 
     increased food costs and pay for other necessities, and 
     continue to provide incentives to encourage the use of inputs 
     manufactured by U.S. companies.
       Key aspects of the HOPE II apparel provisions are outlined 
     below. The Conferees note that HOPE II creates six discrete 
     stand alone rules for apparel (and some textile) products to 
     qualify for preferential treatment: (1) the value-added rule 
     (as provided for in HOPE I, subject to a change in the cap); 
     (2) a capped benefit for woven apparel meeting a wholly 
     assembled/knit-to-shape rule; (3) a capped benefit for 
     certain knit apparel meeting a wholly assembled/knit-to-shape 
     rule; (4) an uncapped benefit for certain types of apparel 
     meeting a wholly assembled/knit-to-shape rule; (5) an 
     uncapped benefit for apparel meeting a wholly assembled/knit-
     to-shape rule under the ``3 for 1'' Earned Import Allowance 
     Program; and (6) an uncapped benefit for apparel meeting a 
     wholly assembled/knit-to-shape rule, where the apparel is 
     made from ``short supply'' yarns or fabrics. The Conferees 
     note that if a capped benefit is filled in a given year, an 
     importer can still use one or more of the other rules. In 
     addition, apparel from Haiti may also qualify for 
     preferential access to the U.S. market under the United 
     States--Caribbean Basin Trade Partnership Act (Title II of 
     Public Law 106-200) (CBTPA).
       Ten Year Duration.--The conference report extends most 
     apparel preferences, including all apparel preferences 
     created under HOPE II, for 10 years, until September 30, 
     2018. The ten year duration is aimed at fostering a more 
     stable investment climate for businesses seeking to use HOPE 
     I or II preferences.
       Expanded Preferences for Woven Apparel.--The conference 
     report expands the HOPE I ``woven apparel cap'' to 70 million 
     square meters equivalents (``SMEs''), and extends the benefit 
     for 10 years. Apparel exported under this provision can 
     qualify for preferences if the apparel is ``wholly 
     assembled'' or knit-to-shape, or both, in Haiti, without 
     regard to the origin of the fabric (or fabric components, or 
     components knit to shape, or yarn) comprising the apparel 
     article. The definition of ``wholly assembled'' is taken from 
     existing Customs regulations.
        New Knit Apparel Cap.--HOPE II creates a new ``knit 
     apparel cap'' of 70 million SMEs, with exclusions for men's/
     boys' cotton t-shirts, men's/boys' mmf t-shirts, certain 
     men's/boys' sweatshirts/pullovers, and certain men's/boy's 
     cotton-blend sweatshirts. Apparel exported under this 
     provision can qualify for preferences if the apparel is 
     ``wholly assembled'' or knit-to-shape, or both, in Haiti, 
     without regard to the origin of the fabric (or fabric 
     components, or components knit to shape, or yarn) comprising 
     the apparel article.
       Modified Single Transformation Rule for Certain Apparel and 
     Certain Luggage.--HOPE II extends preferential treatment to 
     certain apparel articles wholly assembled, or knit to shape, 
     or both, in Haiti, without regard to the origin of the fabric 
     (or fabric components, or components knit to shape, or yarn) 
     comprising the apparel article. The apparel articles covered 
     by this provision are: (1) brassieres; (2) those apparel 
     articles covered by the Central America-Dominican Republic-
     United States Free Trade Agreement (CAFTA-DR) ``single 
     transformation'' rule; (3) headgear; and (4) certain 
     sleepwear.
       With regard to covered sleepwear, HOPE II extends 
     preferences to women's and girls' pajama bottoms (i.e., sleep 
     pants), regardless of whether such bottoms are a separate 
     garment or are part of a set.
       HOPE II also extends preferential treatment to luggage and 
     handbags wholly assembled in Haiti, without regard to the 
     source of the fabric, materials or components. The Conferees 
     did not include the concept of knit-to-shape in this 
     provision, because such processing does not typically occur 
     for such luggage/handbags.
       ``3 for 1'' EIA Program for Knit or Woven Apparel.--HOPE II 
     creates a ``3 for 1'' earned import allowance program (EIA) 
     to be developed and administered by the Secretary of 
     Commerce. Under the ``3 for 1'' EIA, Haitian producers or 
     entities controlling production that purchase qualifying 
     fabric for apparel production in Haiti may export other 
     apparel to the United States duty-free, and not subject to 
     quantitative limitations, regardless of the origin of the 
     fabric (or fabric components, components knit to shape, or 
     yarns) from which the apparel product is made. Specifically, 
     for every 3 SMEs of qualifying fabric purchased, a producer 
     or entity controlling production receives a ``credit'' for 1 
     SME that can be used in the manufacture of apparel using non-
     qualifying fabric (e.g., Taiwanese fabric). The Secretary of 
     Commerce is to establish electronic ``accounts'' for 
     producers or entities controlling production where such 
     ``credits'' can be deposited. A producer or entity 
     controlling production can then withdraw these credits for an 
     ``earned import allowance certificate'' that reflects the 
     requested number of credits. Apparel wholly assembled, or 
     knit to shape, or both, in Haiti using non-qualifying fabric 
     may enter the United States duty-free, if the apparel is 
     accompanied by such an ``earned import allowance 
     certificate'' that reflects the number of credits equal to 
     the SMEs of the apparel for which preferential treatment is 
     sought.
       An example may help illustrate the process: Producer A in 
     Haiti purchases 300 SMEs of denim fabric woven in the United 
     States using U.S. yarns in order to manufacture jeans in 
     Haiti. Producer A, upon submission of documentation 
     supporting the purchase of the U.S. denim (such documentation 
     can include information submitted by the U.S. textile mill 
     that exported the fabric), will receive 100 credits in 
     Producer A's Commerce Department account. If Producer A 
     subsequently wants to export jeans that are wholly assembled 
     in Haiti to the United States duty-free and such jeans are 
     wholly assembled in Haiti from Italian denim, Producer A 
     would redeem all or part of the accrued 100 credits for the 
     requisite earned import allowance certificate. For instance, 
     if the jeans made with the Italian fabric account for 50 
     SMEs, Producer A would request a certificate that equaled 50 
     credits.
       In HOPE II, the Conferees have established principles for 
     the ``3 for 1'' EIA program. The Conferees expect and intend 
     the Secretary of Commerce to establish additional 
     requirements in order to make the program efficient, 
     workable, and administrable, and have provided the Secretary 
     with the authority to promulgate and enforce such 
     requirements. In addition, the Conferees urge the Secretary 
     of Commerce to establish the ``3 for 1'' EIA

[[Page H3698]]

     program as an electronic program, including with respect to 
     the EIA certificate.
       The Conferees note that woven and knit fabrics are treated 
     differently under the HOPE II-created EIA program. 
     Specifically, qualifying woven fabric must be wholly formed 
     in the United States, from U.S. yarns (subject to some 
     limited exceptions). Qualifying knit fabric may be wholly 
     formed or knit to shape in the United States, U.S. free trade 
     agreement (FTA) partner country or U.S. preference partner 
     country (e.g., a beneficiary country under the African Growth 
     and Opportunity Act), or any combination, from U.S. yarns 
     (subject to some limited exceptions).
       Modified Single Transformation Rule for Apparel Made from 
     ``Short Supply'' Fabrics/Yarns.--HOPE II also includes a 
     provision to extend duty-free treatment to any apparel 
     article wholly assembled or knit to shape, or both, in Haiti 
     where the apparel article is made from fabrics or yarns 
     designated as not being available in commercial quantities 
     under any U.S. preference program or FTA, or is covered by 
     certain provisions of Annex 401 of the NAFTA (i.e., those 
     provisions which extend duty-free treatment to apparel 
     notwithstanding the origin of fabric or yarns). The Conferees 
     note that the entire apparel article need not be made from a 
     ``short supply'' fabric or yarn--only the fabric, fabric 
     components, components knit to shape, or yarns that make up 
     the component that determines the tariff classification of 
     the article need be made of ``short supply'' fabrics or yarns 
     for entry under this rule.
       Transition Value-Added Rule.--HOPE II preserves the 
     existing value-added rule of origin from HOPE I, but freezes 
     the cap for exports qualifying for this rule at the 2008 
     level (i.e., 1.25% of U.S. apparel imports). Under HOPE II, 
     the value-added rule retains the termination date provided 
     for in HOPE I (five years from enactment of HOPE I). The 
     Conferees chose to sunset this provision as provided for in 
     HOPE I and not extend the rule for an additional ten years, 
     because Haitian exports under the value-added rule have been 
     minimal, reflecting the complexity of the rule. The conferee 
     notes that more flexible value-added rules applied to apparel 
     in other preferential trade arrangements (e.g., the United 
     States-Jordan Free Trade Agreement) have been effective in 
     increasing trade.
       Allow Direct Shipment from and Co-production in the 
     Dominican Republic.--HOPE II recognizes the unique situation 
     of Haiti and the Dominican Republic, the two sovereign 
     nations that share the Caribbean island of Hispaniola, and 
     the ties between the textile and apparel industries of both 
     countries. The Conferees believe that existing ties between 
     the textiles and apparel industries of both countries should 
     be maintained and strengthened. Toward that end, HOPE II 
     allows direct shipment from the Dominican Republic of apparel 
     qualifying under section 213A, as amended by HOPE II. The 
     direct shipment provision will minimize transit times and 
     costs when apparel wholly assembled or knit to shape in Haiti 
     is sent to the Dominican Republic for packaging or post-
     assembly operations.
       The Conferees have included direction to the Commissioner 
     responsible for U.S. Customs and Border Protection to provide 
     technical and other assistance to Haiti and the Dominican 
     Republic to develop procedures to prevent unlawful 
     transshipment and use of counterfeit documents. The Conferees 
     intend that assistance to be provided expeditiously and in a 
     manner that facilitates trade, and to include assisting Haiti 
     and the Dominican Republic in developing a secure, electronic 
     system to combat unlawful transshipment and use of 
     counterfeit documents.
       The Conferees also expect the processing requirement 
     necessary for an apparel article to qualify under HOPE II--
     that is, that apparel be wholly assembled or knit to shape, 
     or both, in Haiti--to facilitate co-production between Haiti 
     and the Dominican Republic. The HOPE II processing 
     requirement does not preclude assembly or other operations 
     from occurring outside Haiti. Co-production operations 
     performed in the Dominican Republic could include, but are 
     not limited to, activities such as minor assembly, repair, 
     embellishment, and finishing.
       Clarifications on Administration of Caps.--HOPE II 
     clarifies that exports qualifying for preferences under 
     apparel provisions not subject to quantitative limitations 
     (e.g., the apparel qualifying under the rules contained in 
     section 213A(b)(3), as amended by HOPE II) should not be 
     included in the calculation of any quantitative limitations 
     contained in HOPE II. In addition, apparel qualifying under a 
     rule subject to a particular cap (e.g., the woven or knit 
     apparel caps in section 213A(b)(2), as amended by HOPE II), 
     should not be counted against another cap (e.g., the value--
     added cap, included in section 213A(b)(1), as amended by HOPE 
     II). Finally, the legislation clarifies that HOPE II benefits 
     are in addition to preferences extended to Haitian exports 
     under the Caribbean Basin Economic Recovery Act (CBERA), 
     including apparel preferences under section 213(b)(2) of the 
     CBERA, as amended, and that apparel exports qualifying for 
     preferences under 213(b)(2) should not be counted against the 
     quantitative limitations established in HOPE II.
       Labor Provisions. The conference agreement amends Section 
     213A of the Caribbean Basin Recovery Act to include new 
     provisions to promote compliance with core labor standards, 
     as enumerated in the legislation, and to improve working 
     conditions, in particular in the textile and apparel sector. 
     The Conferees recognize that the core labor standards defined 
     in the legislation refer to the rights as listed in the 1998 
     International Labor Organization Declaration on Fundamental 
     Principles and Rights at Work and its Follow Up. 
     Specifically, HOPE II requires that the President certify, 
     within 16 months of enactment, that Haiti has created an 
     independent Labor Ombudsman's Office responsible for 
     performing the functions set forth in the conference 
     agreement and established, with the assistance of the 
     International Labor Organization (``ILO''), the TAICNAR 
     Program. Unless the President extends the period for meeting 
     these requirements, which is permitted under certain limited 
     conditions set out in the conference agreement, the President 
     is required to terminate Haiti's eligibility for preferential 
     treatment under the section.
       The functions of the Labor Ombudsman include overseeing the 
     implementation of the TAICNAR Program, maintaining a registry 
     of the textile and apparel producers that may seek 
     preferential treatment and coordinating a committee comprised 
     of representatives of government agencies, employers, and 
     workers to consult on the implementation of the TAICNAR 
     Program and other matters of common concern. The Labor 
     Ombudsman is also responsible for receiving comments from 
     interested parties about the labor conditions in the 
     facilities of the registered producers and, where such 
     comments are submitted in good faith and supported with 
     evidence, directing the comments to the ILO or the 
     appropriate Haitian government official. Further, where 
     registered producers are found to have deficiencies, the 
     Labor Ombudsman also shares responsibility for assisting them 
     in complying with core labor standards and national labor 
     laws directly relating to the standards and acceptable 
     conditions of work with respect to minimum wages, hours of 
     work, and occupational health and safety. In performing its 
     functions, the Labor Ombudsman is expected to coordinate and 
     consult with other appropriate Haitian government officials 
     (e.g., in the Ministry of Labor).
       The TAICNAR Program is comprised of two elements. The first 
     element of the program is technical assistance from the ILO 
     to build Haiti's own capacity to inspect the facilities of 80 
     registered textile and apparel producers, enforce its labor 
     laws, and resolve labor disputes. The scope of such 
     assistance is broad, including ILO assistance in reviewing 
     national labor laws and regulations and bringing them into 
     compliance with core labor standards, increasing awareness of 
     worker rights, and on-the-job training for labor inspectors, 
     judicial officers, and other government officials.
       The second element of the TAICNAR Program is ILO assessment 
     of compliance with core labor standards and national labor 
     laws in the facilities of the producers registered with the 
     Labor Ombudsman and, where necessary, assistance with 
     remediating deficiencies. Consistent with existing practice 
     under its Better Factories Cambodia and Better Works 
     programs, the ILO has a number of tools to perform such 
     assessments, including unannounced site visits and 
     confidential interviews with management and workers. The 
     results of the assessment are reported, confidentially in the 
     first instance, to the management and workers (or, where 
     there is union representation, worker representatives) 
     together with suggestions for remediation of deficiencies. 
     Under the program, the ILO then aids the producer in 
     remediating any deficiencies, with assistance, if necessary, 
     from the Labor Ombudsman or other parties. Every six months, 
     following implementation of the TAICNAR Program by Haiti, the 
     ILO is expected to publish a public report on the assessments 
     it has conducted during the preceding six-months. Such 
     reports will identify the specific factories assessed and the 
     conditions in these factories.
       To encourage compliance with core labor standards and 
     national labor laws directly related to core labor standards, 
     the conference agreement provides for preferential treatment 
     to be denied in certain circumstances. Specifically, the 
     conference agreement directs the President to identify (on a 
     biennial basis, beginning in the second year after 
     implementation) producers who are failing to comply with 
     these compliance conditions. The President is directed to 
     offer assistance to any such producers in meeting the 
     compliance conditions and, if the assistance is refused or if 
     the producer otherwise fails to come into compliance, to 
     withdraw, suspend, or limit preferential treatment to 
     articles of the producer. The preferential treatment may be 
     reinstated if the President later determines that the 
     producer has come into compliance with core labor standards 
     and national labor laws directly related to core labor 
     standards. In making both the initial identification of non-
     compliant producers and any later reinstatement 
     determination, the President is to consider the reports of 
     the ILO.

                         B. Extension of CBTPA

     (Sec. 15408-15409 of the conference agreement)


                              Present law

       The Caribbean Basin Economic Recovery Act (19 U.S.C. 
     2703(b)), as amended by the United States-Caribbean Basin 
     Trade Partnership Act (Title II of Public Law 106-200) 
     (CBTPA), provides that eligible textile and apparel articles 
     of a designated CBTPA beneficiary country shall enter the 
     United States

[[Page H3699]]

     free of duty and free of quantitative limitations, provided 
     that the President determines that the country has 
     implemented the necessary procedures and requirements. These 
     preference program provisions expire on September 30, 2008.


                               House Bill

       No provision.


                            Senate Amendment

       No provision.


                          Conference Agreement

       The conference agreement amends section 213(b) of the 
     Caribbean Basin Economic Recovery Act to extend the Caribbean 
     Basin Trade Partnership Act, including the textile and 
     apparel preference program provisions, through September 30, 
     2010.

                     C. Unused Merchandise Drawback

     (Sec. 15421 of the conference agreement)


                              Present law

       Section 313(j) of the Tariff Act of 1930 (19 U.S.C. 
     1313(j)) currently provides for unused merchandise drawback. 
     Unused drawback is permitted if imported merchandise is 
     exported or destroyed within 3 years of import without being 
     used in the United States. Pursuant to section 313(j)(2) of 
     the Tariff Act of 1930 (19 U.S.C. 1313(j)(2)), domestic or 
     imported merchandise that is commercially interchangeable 
     with the imported merchandise may be substituted for the 
     imported merchandise and drawback granted on the export or 
     destruction of the substituted merchandise within the 3-year 
     period beginning on the date of importation. The drawback is 
     limited to 99% of the duty, tax and fee imposed under Federal 
     law on the imported merchandise upon entry or importation.
       Section 313(j)(2) of the Tariff Act of 1930 does not 
     contain a definition of ``commercially interchangeable.'' 
     From late 2001 to May 2007, U.S. Customs and Border 
     Protection (CBP) paid drawback claims on wine based on white 
     domestic and imported table wine being commercially 
     interchangeable with relatively valued imported white table 
     wine. Red domestic and imported table wine was also 
     considered to be commercially interchangeable with relatively 
     valued imported red table wine. Relatively valued wine was 
     considered to be wine within a price range of 50%.
       CBP informed wine drawback claimants in May 2007 that, 
     effective immediately, the above standard for commercial 
     interchangeability was no longer applicable. CBP did not 
     provide a definitive new standard but stated that the 
     criterion of the varietal wine should have been a determining 
     factor in determining commercial interchangeability.
       The new provision carries forward the standard used for 
     commercial interchangeability from 2001 to May 2007, and 
     provides certainty for the filing and processing of unused 
     drawback claims for imported and exported wine.


                               House Bill

       No provision.


                            Senate Amendment

       No provision.


                          Conference Agreement

       The conference agreement amends section 313(j)(2) of the 
     Tariff Act of 1930, to provide a standard for what is 
     considered to be ``commercially interchangeable'' for 
     purposes of unused merchandise drawback for wine. The 
     provision is effective for claims filed for drawback on or 
     after the date of enactment.

   D. Requirements Relating to Determination of Transaction Value of 
                          Imported Merchandise

     (Sec. 15422 of the conference agreement)


                              Present Law

       No provision.


                               House Bill

       No provision.


                            Senate Amendment

       No provision.


                          Conference Agreement

       The Conference agreement includes an importer declaration 
     requirement for one year to assist in gathering information 
     on the valuation of goods imported into the United States.
       The value of merchandise imported into the United States is 
     determined primarily under transaction value. Transaction 
     value is defined in section 402(b) of the Tariff Act of 1930 
     (19 U.S.C. 1401a(b)(1)) as the price actually paid or payable 
     for the merchandise when sold for exportation to the United 
     States. Import transactions can involve one sale of the 
     imported goods prior to importation or a series of sales. In 
     the multiple sale scenario, Customs and Border Protection 
     (``CBP'') currently permits importers to base transaction 
     value on the price paid by the buyer in the first or earlier 
     sale (e.g. the sale between the manufacturer and the 
     intermediary), provided the importer can establish by 
     sufficient evidence that the sale was at arm's length and 
     that at the time of such sale, the merchandise was clearly 
     destined for exportation to the United States.
       On January 24, 2008, CBP published in the Federal Register 
     a proposed interpretation of the expression ``sold for 
     exportation to the United States.'' 73 Fed. Reg. 4254 (Jan. 
     24, 2008). In the publication, CBP proposed that when 
     imported merchandise has been subject to a series of sales 
     prior to importation, the price actually paid or payable for 
     the imported goods when sold for exportation is the price 
     paid in the last sale occurring prior to the introduction of 
     the goods into the United States.
       Congress has serious concerns that CBP did not provide 
     Congress or the importing community with any notice about its 
     proposed interpretation. Congress also has serious concerns 
     that CBP proposed its new interpretation without conducting 
     adequate analysis of the proposed impact of such 
     interpretation. Moreover, Congress has received several 
     concerns and questions about CBP's proposed interpretation, 
     including questions of the number and value of importations 
     that would be impacted by the change. CBP informed Congress 
     that it does not keep records indicating which importers are 
     basing transaction value on the price paid by the buyer in 
     the first or earlier sale. Therefore, there is no information 
     available to assess which sectors are using this provision, 
     the extent of its use, and probable impact on the United 
     States.
       The Conferees through section (a) require Customs to 
     collect adequate information regarding the impact of such 
     proposal by requiring that importers declare whether the 
     transaction value of the imported merchandise is determined 
     on the basis of the price paid in the first or earlier sale 
     occurring prior to introduction of the merchandise into the 
     United States. The term ``first or earlier sale'' as used in 
     subsection (a)(2) is intended to refer to the current CBP 
     interpretation expressed in the January 24, 2008 Federal 
     Register Notice.
       Subsection (b) requires CBP to provide the collected 
     information to the United States International Trade 
     Commission (``ITC'') on a monthly basis. The Conferees intend 
     for CBP and ITC to mutually agree on the format in which CBP 
     will submit the data for ITC use. Subsection (c) requires the 
     ITC to submit a report to the House Ways and Means Committee 
     and the Senate Finance Committee within ninety days of 
     receipt of CBP's last monthly report.
       In subsection (d), the Conferees express a sense of 
     Congress that CBP should not before January 1, 2011, 
     implement a change of interpretation of the expression ``sold 
     for exportation to the United States'' for purposes of 
     applying the transaction value of the imported merchandise in 
     a series of sales. It is the sense of Congress that after 
     January 1, 2011, CBP may propose to change or change its 
     interpretation only if CBP: (1) consults with and provides 
     notice to the appropriate committees not less than 180 days 
     prior to proposing a change and not less than 90 days prior 
     to publishing a change; (2) consults with, provides notice 
     to, and takes into consideration views expressed by the 
     Commercial Operations Advisory Committee not less than 120 
     days prior to proposing a change and not less than 60 days 
     prior to publishing a change; and (3) receives the explicit 
     approval of the Secretary of Treasury prior to publishing a 
     change. The term ``publishing'', as used in subsection (d), 
     includes any notice CBP may provide to the regulated 
     community through a public notice.
       Through subsection (d)(3), the Conferees express a sense of 
     Congress that CBP should take into consideration the ITC 
     report as referenced in subsection (b) before publishing any 
     change to the expression ``sold for exportation to the United 
     States.''

                       V. TAX COMPLEXITY ANALYSIS

       Section 4022(b) of the Internal Revenue Service 
     Restructuring and Reform Act of 1998 (the ``IRS Reform Act'') 
     requires the Joint Committee on Taxation (in consultation 
     with the Internal Revenue Service and the Department of the 
     Treasury) to provide a tax complexity analysis. The 
     complexity analysis is required for all legislation reported 
     by the Senate Committee on Finance, the House Committee on 
     Ways and Means, or any committee of conference if the 
     legislation includes a provision that directly or indirectly 
     amends the Internal Revenue Code (the ``Code'') and has 
     widespread applicability to individuals or small businesses.
       The staff of the Joint Committee on Taxation has determined 
     that a complexity analysis is not required under section 
     4022(b) of the IRS Reform Act because the bill contains no 
     provisions that have ``widespread applicability'' to 
     individuals or small businesses.

   COMPLIANCE WITH RULE XXI, CL.9 (HOUSE) AND WITH RULE XLIV (SENATE)

       The following list is submitted in compliance with clause 9 
     of rule XXI of the Rules of the House of Representatives and 
     rule XLIV of the Standing Rules of the Senate, which require 
     publication of a list of congressionally directed spending 
     items (Senate), congressional earmarks (House), limited tax 
     benefits, and limited tariff benefits included in the 
     conference report, or in the joint statement of managers 
     accompanying the conference report, including the name of 
     each Senator, House Member, Delegate, or Resident 
     Commissioner who submitted a request to the Committee of 
     jurisdiction for each item so identified. Congressionally 
     directed spending items (as defined in the Senate rule) and 
     congressional earmarks (as defined in the House rule) in this 
     division of the conference report or joint statement of 
     managers are listed below. Neither the conference report nor 
     the statement of managers contains any limited tax benefits 
     or limited tariff benefits as defined in the applicable House 
     and Senate rules.

[[Page H3700]]



----------------------------------------------------------------------------------------------------------------
                Member                        Program description                     Funding level
----------------------------------------------------------------------------------------------------------------
Baucus................................  National Sheep and Goat         $1 million.
                                         Industry Improvement Center.
Baucus................................  Appropriate Technology          Authorized for appropriation.
                                         Transfer to Rural Areas.
Baucus................................  Camelina Pilot Program........  $9 million.
Biden.................................  Chesapeake Bay Watershed        $382 million.
                                         Conservation Program.
Cardin................................  Chesapeake Bay Watershed        $382 million.
                                         Conservation Program.
Casey.................................  Chesapeake Bay Watershed        $382 million.
                                         Conservation Program.
Chambliss.............................  Cost Share Assistance for       Up to $100 million.
                                         Wildlife Corridors.
Cochran...............................  Natural Products Research       Authorized for appropriation.
                                         Laboratory.
Conrad................................  Grants to Broadcasting Systems  Authorized for appropriation.
Harkin................................  Congressional Hunger Center...  Authorized for appropriation.
Harkin................................  Appropriate Technology          Authorized for appropriation.
                                         Transfer to Rural Areas.
Harkin................................  Policy Research Centers.......  Authorized for appropriation.
Hinojosa..............................  Housing Assistance Council....  Authorized for appropriation.
Inouye................................  Insular Pacific Sun Grant Sub-  Authorized for appropriation.
                                         Center.
Inouye................................  Education Grants to Alaska      Authorized for appropriation.
                                         Native Serving Institutions
                                         and Native Hawaiian Serving
                                         Institutions.
Kohl..................................  Housing Assistance Council....  Authorized for appropriation.
Nelson................................  Drought Mitigation Center/      Authorized for appropriation.
                                         University of Nebraska.
Reid..................................  Desert Terminal Lakes/Nevada..  $175 million FY 08-12.
Roberts...............................  Consortium for Agricultural     Authorized for appropriation.
                                         Soils Mitigation of
                                         Greenhouse Gases/Kansas State
                                         University.
Stevens...............................  Education Grants to Alaska      Authorized for appropriation.
                                         Native Serving Institutions
                                         and Native Hawaiian Serving
                                         Institutions.
Stevens...............................  Water Systems for Rural and     Authorized for appropriation.
                                         Native Villages in Alaska.
----------------------------------------------------------------------------------------------------------------

     From the Committee on Agriculture, for consideration of the 
     House bill (except title XII) and the Senate amendment 
     (except secs. 12001, 12201-12601, and 12701-12808), and 
     modifications committed to conference:
                       Collin C. Peterson,
                       Tim Holden,
                       Mike McIntyre,
                       Bob Etheridge,
                       Leonard L. Boswell,
                       Joe Baca,
                       Dennis L. Cardoza,
                       David Scott,
                       Bob Goodlatte,
                       Robin Hayes,
                       Marilyn Musgrave,
                       Randy Neugebauer,
     From the Committee on Education and Labor, for consideration 
     of secs. 4303 and 4304 of the House bill, and secs. 4901-
     4905, 4911, and 4912 of the Senate amendment, and 
     modifications committed to conference:
                       George Miller,
                       Carolyn McCarthy,
                       Todd R. Platts,
     From the Committee on Energy and Commerce, for consideration 
     of secs. 6012, 6023, 6024, 6028, 6029, 9004, 9005, and 9017 
     of the House bill, and secs. 6006, 6012, 6110-6112, 6202, 
     6302, 7044, 7049, 7307, 7507, 9001, 11060, 11072, 11087, and 
     11101-11103 of the Senate amendment, and modifications 
     committed to conference:
                       John D. Dingell,
                       Frank Pallone,
     From the Committee on Financial Services, for consideration 
     of sec. 11310 of the House bill, and secs. 6501-6505, 11068, 
     and 13107 of the Senate amendment, and modifications 
     committed to conference:
                       Paul E. Kanjorski,
                       Maxine Waters,
     From the Committee on Foreign Affairs, for consideration of 
     secs. 3001-3008, 3010-3014, and 3016 of the House bill, and 
     secs. 3001-3022, 3101-3107, and 3201-3204 of the Senate 
     amendment, and modifications committed to conference:
                       Howard L. Berman,
                       Brad Sherman,
                       Ileana Ros-Lehtinen,
     From the Committee on Judiciary, for consideration of secs. 
     11102, 11312, and 11314 of the House bill, and secs. 5402, 
     10103, 10201, 10203, 10205, 11017, 11069, 11076, 13102, and 
     13104 of the Senate amendment, and modifications committed to 
     conference:
                       John Conyers,
                       Bobby Scott,
     From the Committee on Natural Resources, for consideration of 
     secs. 2313, 2331, 2341, 2405, 2607, 2607A, 2611, 5401, 6020, 
     7033, 7311, 8101, 8112, 8121-8127, 8204, 8205, 11063, and 
     11075 of the Senate amendment, and modifications committed to 
     conference:
                       Nick Rahall,
                       Madeleine Z. Bordallo,
                       Cathy McMorris Rodgers,
     From the Committee on Oversight and Government Reform, for 
     consideration of secs. 1501 and 7109 of the House bill, and 
     secs. 7020, 7313, 7314, 7316, 7502, 8126, 8205, and 10201 of 
     the Senate amendment, and modifications committed to 
     conference:
                       Edolphus Towns,
     From the Committee on Science and Technology, for 
     consideration of secs. 4403, 9003, 9006, 9010, 9015, 9019, 
     and 9020 of the House bill, and secs. 7039, 7051, 7315, 7501, 
     and 9001 of the Senate amendment, and modifications committed 
     to conference:
                       Bart Gordon,
                       Michael T. McCaul,
     From the Committee on Small Business, for consideration of 
     subtitle D of title XI of the Senate amendment, and 
     modifications committed to conference:
                       Nydia M. Velazquez,
                       Heath Shuler,
     From the Committee on Transportation and Infrastructure, for 
     consideration of secs. 2203, 2301, 6019, and 6020 of the 
     House bill, and secs. 2604, 6029, 6030, and 11087 of the 
     Senate amendment, and modifications committed to conference:
                       James L. Oberstar,
                       Eleanor H. Norton,
     From the Committee on Ways and Means, for consideration of 
     sec. 1303 and title XII of the House bill, and secs. 12001-
     12601, and 12701-12808 of the Senate amendment, and 
     modifications committed to conference:
                       Charles B. Rangel,
                       Earl Pomeroy,
     For consideration of House bill (except title XII) and the 
     Senate amendment (except secs. 12001, 12201-12601, and 12701-
     12808), and modifications committed to conference:
                       Rosa L. DeLauro,
                       Adam H. Putnam,
                                Managers on the Part of the House.

                       Tom Harkin,
                       Patrick Leahy,
                       Kent Conrad,
                       Max Baucus,
                       Blanche L. Lincoln,
                       Debbie Stabenow,
                       Saxby Chambliss,
                       Thad Cochran,
                       Pat Roberts
       (For purposes of Title XV only),
                       Chuck Grassley,
     Managers on the Part of the Senate.

                          ____________________