[Congressional Record (Bound Edition), Volume 148 (2002), Part 1]
[Senate]
[Pages 921-934]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 2836. Mr. CONRAD (for himself and Mr. Crapo) proposed an amendment 
to amendment SA 2471 submitted by Mr. Daschle and intended to be 
proposed to the bill (S. 1731) to strengthen the safety net for 
agricultural producers, to enhance resource conservation and rural 
development, to provide for farm credit, agricultural research, 
nutrition, and related programs, to ensure consumers abundant food and 
fiber, and for other purposes; as follows:

       Beginning on page 86, strike line 22 and all that follows 
     through page 87, line 21, and insert the following:
       (2) by striking subparagraph (B) and inserting the 
     following:
       ``(B) Beet sugar.--
       ``(i) In general.--Except as otherwise provided in this 
     subparagraph and sections 359c(g), 359e(b), and 359f(b), the 
     Secretary shall make allocations for beet sugar among beet 
     sugar processors for each crop year that allotments are in 
     effect on the basis of the adjusted weighted average quantity 
     of beet sugar produced by the processors for each of the 1998 
     through 2000 crop years, as determined under this 
     subparagraph.
       ``(ii) Quantity.--The quantity of an allocation made for a 
     beet sugar processor for a crop year under clause (i) shall 
     bear the same ratio to the quantity of allocations made for 
     all beet sugar processors for the crop year as the adjusted 
     weighted average quantity of beet sugar produced by the 
     processor (as determined under clauses (iii) and (iv)) bears 
     to the total of the adjusted weighted average quantities of 
     beet sugar produced by all processors (as so determined).
       ``(iii) Weighted average quantity.--Subject to clause (iv), 
     the weighted quantity of beet sugar produced by a beet sugar 
     processor during each of the 1998 through 2000 crop years 
     shall be (as determined by the Secretary)--

       ``(I) in the case of the 1998 crop year, 25 percent of the 
     quantity of beet sugar produced by the processor during the 
     crop year;
       ``(II) in the case of the 1999 crop year, 35 percent of the 
     quantity of beet sugar produced by the processor during the 
     crop year; and
       ``(III) in the case of the 2000 crop year, 40 percent of 
     the quantity of beet sugar produced by the processor 
     (including any quantity of sugar received from the Commodity 
     Credit Corporation) during the crop year.

       ``(iv) Adjustments.--

       ``(I) In general.--The Secretary shall adjust the weighted 
     average quantity of beet sugar produced by a beet sugar 
     processor during the 1998 through 2000 crop years under 
     clause (iii) if the Secretary determines that, during any 
     such crop year, the processor--

       ``(aa) opened or closed a sugar beet processing factory;
       ``(bb) constructed a molasses desugarization facility; or
       ``(cc) suffered substantial quality losses on sugar beets 
     stored during any such crop year.

       ``(II) Quantity.--The quantity of beet sugar produced by a 
     beet sugar processor under clause (iii) shall be--

       ``(aa) in the case of a processor that opened a sugar beet 
     processing factory, increased by 1.25 percent of the total of 
     the adjusted weighted average quantities of beet sugar 
     produced by all processors during the 1998 through 2000 crop 
     years (without consideration of any adjustment under this 
     clause) for each sugar beet processing factory that is opened 
     by the processor;
       ``(bb) in the case of a processor that closed a sugar beet 
     processing factory, decreased by 1.25 percent of the total of 
     the adjusted weighted average quantities of beet sugar 
     produced by all processors during the 1998 through 2000 crop 
     years (without consideration of any adjustment under this 
     clause) for each sugar beet processing factory that is closed 
     by the processor;
       ``(cc) in the case of a processor that constructed a 
     molasses desugarization facility, increased by 0.25 percent 
     of the total of the adjusted weighted average quantities of 
     beet sugar produced by all processors during the 1998 through 
     2000 crop years (without consideration of any adjustment 
     under this clause)

[[Page 922]]

     for each molasses desugarization facility that is constructed 
     by the processor; and
       ``(dd) in the case of a processor that suffered substantial 
     quality losses on stored sugar beets, increased by 1.25 
     percent of the total of the adjusted weighted average 
     quantities of beet sugar produced by all processors during 
     the 1998 through 2000 crop years (without consideration of 
     any adjustment under this clause).
       ``(v) Permanent termination of operations of a processor.--
     If a processor of beet sugar has been dissolved, liquidated 
     in a bankruptcy proceeding, or otherwise has permanently 
     terminated operations (other than in conjunction with a sale 
     or other disposition of the processor or the assets of the 
     processor), the Secretary shall--

       ``(I) eliminate the allocation of the processor provided 
     under this section; and
       ``(II) distribute the allocation to other beet sugar 
     processors on a pro rata basis.

       ``(vi) Sale of all assets of a processor to another 
     processor.--If a processor of beet sugar (or all of the 
     assets of the processor) is sold to another processor of beet 
     sugar, the Secretary shall transfer the allocation of the 
     seller to the buyer unless the allocation has been 
     distributed to other sugar beet processors under clause (v).
       ``(vii) Sale of factories of a processor to another 
     processor.--

       ``(I) In general.--Subject to clauses (v) and (vi), 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 fiscal 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 factory or 
     factories to the total allocation of the seller.
       ``(II) Application of allocation.--The assignment of the 
     allocation under subclause (I) shall apply--

       ``(aa) during the remainder of the fiscal year during which 
     the sale described in subclause (I) occurs (referred to in 
     this clause as the `initial fiscal year'); and
       ``(bb) each subsequent fiscal year (referred in this clause 
     as a `subsequent fiscal year'), subject to subclause (III).

       ``(III) Subsequent fiscal years.--

       ``(aa) In general.--The assignment of the allocation under 
     subclause (I) shall apply during each subsequent fiscal year 
     unless the acquired factory or factories continue in 
     operation for less than the initial fiscal year and the first 
     subsequent fiscal year.
       ``(bb) Reassignment.--If the acquired factory or factories 
     do not continue in operation for the complete initial fiscal 
     year and the first subsequent fiscal year, the Secretary 
     shall reassign the temporary allocation to other processors 
     of beet sugar on a pro rata basis.

       ``(IV) Use of other factories to fill allocation.--If the 
     transferred allocation to the buyer for the purchased factory 
     or factories cannot be filled by the production by the 
     purchased factory or factories for the initial fiscal year or 
     a subsequent fiscal year, the remainder of the transferred 
     allocation may be filled by beet sugar produced by the buyer 
     from other factories of the buyer.

       ``(viii) New entrants starting production or reopening 
     factories.--If an individual or entity that does not have an 
     allocation of beet sugar under this part (referred to in this 
     subparagraph as a `new entrant') starts processing sugar 
     beets after the date of enactment of this clause, or acquires 
     and reopens a factory that produced beet sugar during the 
     period of the 1998 through 2000 crop years that (at the time 
     of acquisition) has no allocation associated with the factory 
     under this part, 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; and
       ``(II) reduce the allocations for beet sugar of all other 
     processors on a pro rata basis to reflect the new allocation.

       ``(ix) New entrants acquiring ongoing factories with 
     production history.--If a new entrant acquires a factory that 
     has production history during the period of the 1998 through 
     2000 crop years and that is producing beet sugar at the time 
     the allocations are made from a processor that has an 
     allocation of beet sugar, the Secretary shall transfer a 
     portion of the allocation of the seller to the new entrant to 
     reflect the historical contribution of the production of the 
     sold factory to the total allocation of the seller.''.

  SA 2837. Mr. HARKIN (for Mr. Grassley (for himself and Mr. Harkin) 
proposed an amendment to amendment SA 2835 submitted by Mr. Craig and 
intended to be proposed to the amendment SA 2471 proposed by Mr. 
Daschle to the bill (S. 1731) to strengthen the safety net for 
agricultural producers, to enhance resource conservation and rural 
development, to provide for farm credit, agricultural research, 
nutrition, and related programs, to ensure consumers abundant food and 
fiber, and for other purposes; as follows:

       Strike all after ``SEC.'' and insert the following:

     10__1. PROHIBITION ON PACKERS OWNING, FEEDING, OR CONTROLLING 
                   LIVESTOCK.

       (a) In General.--Section 202 of the Packers and Stockyards 
     Act, 1921 (7 U.S.C. 192(f)) (as amended by section 1021(a)), 
     is amended by striking subsection (f) and inserting the 
     following:
       ``(f) Own or feed livestock directly, through a subsidiary, 
     or through an arrangement that gives the packer operational, 
     managerial, or supervisory control over the 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 operation with respect 
     to the production of the livestock, except that this 
     subsection shall not apply to--
       ``(1) an arrangement entered into within 14 days before 
     slaughter of the livestock by a packer, a person acting 
     through the packer, or a person that directly or indirectly 
     controls, or is controlled by or under common control with, 
     the packer;
       ``(2) a cooperative or entity owned by a cooperative, if a 
     majority of the ownership interest in the cooperative is held 
     by active cooperative members that--
       ``(A) own, feed, or control livestock; and
       ``(B) provide the livestock to the cooperative for 
     slaughter; or
       ``(3) a packer that is owned or controlled by producers of 
     a type of livestock, if during a calendar year the packer 
     slaughters less than 2 percent of the head of that type of 
     livestock slaughtered in the United States; or''.
       (b) Effective Date.--
       (1) In general.--Subject to paragraph (2), the amendments 
     made by subsection (a) take effect on the date of enactment 
     of this Act.
       (2) Transition rules.--In the case of a packer that on the 
     date of enactment of this Act owns, feeds, or controls 
     livestock intended for slaughter in violation of section 
     202(f) of the Packers and Stockyards Act, 1921 (as amended by 
     subsection (a)), the amendments made by subsection (a) apply 
     to the packer--
       (A) in the case of a packer of swine, beginning on the date 
     that is 18 months after the date of enactment of this Act; 
     and
       (B) in the case of a packer of any other type of livestock, 
     beginning as soon as practicable, but not later than 180 
     days, after the date of enactment of this Act, as determined 
     by the Secretary of Agriculture.

  SA 2838. Mr. REID proposed an amendment to amendment SA 2471 
submitted by Mr. Daschle and intended to be proposed to the bill (S. 
1731) to strengthen the safety net for agricultural producers, to 
enhance resource conservation and rural development, to provide for 
farm credit, agricultural research, nutrition, and related programs, to 
ensure consumers abundant food and fiber, and for other purposes; as 
follows:

       Beginning on page 205, strike line 11 and all that follows 
     through page 258, line 19, and insert the following:
     ``40,000,000''.
       (d) Duration of Contracts; Hardwood Trees.--Section 
     1231(e)(2) of the Food Security Act of 1985 (16 U.S.C. 
     3831(e)(2)) is amended--
       (1) by striking ``In the'' and inserting the following:
       ``(A) In general.--In the'';
       (2) by striking ``The Secretary'' and inserting the 
     following:
       ``(B) Existing hardwood tree contracts.--The Secretary''; 
     and
       ``(3) by adding at the end the following:
       ``(C) Extension of hardwood tree contracts.--
       ``(i) In general.--In the case of land devoted to hardwood 
     trees under a contract entered into under this subchapter 
     before the date of enactment of this subparagraph, the 
     Secretary may extend the contract for a term of not more than 
     15 years.
       ``(ii) Rental payments.--The amount of a rental payment for 
     a contract extended under clause (i)--

       ``(I) shall be determined by the Secretary; but
       ``(II) shall not exceed 50 percent of the rental payment 
     that was applicable to the contract before the contract was 
     extended.''.

       (e) Pilot Program for Enrollment of Wetland and Buffer 
     Acreage in Conservation Reserve.--Section 1231(h) of the Food 
     Security Act of 1985 (16 U.S.C. 3831(h)) is amended--
       (1) in the subsection heading, by striking ``Pilot'';
       (2) in paragraph (1), by striking ``During the 2001 and 
     2002 calendar years, the Secretary shall carry out a pilot 
     program'' and inserting ``During the 2002 through 2006 
     calendar years, the Secretary shall carry out a program'';
       (3) in paragraph (2), by striking ``pilot''; and
       (4) in paragraph (3)(D)(i), by striking ``5 contiguous 
     acres.'' and inserting ``10 contiguous acres, of which--

       ``(I) not more than 5 acres shall be eligible for payment; 
     and
       ``(II) all acres (including acres that are ineligible for 
     payment) shall be covered by the conservation contract.''.

[[Page 923]]

       (f) Irrigated Land.--Section 1231 of the Food Security Act 
     of 1985 (16 U.S.C. 3831) is amended by adding at the end the 
     following:
       ``(i) Irrigated Land.--Irrigated land shall be enrolled in 
     the programs described in subsection (b)(6) at irrigated land 
     rates unless the Secretary determines that other compensation 
     is appropriate.''.
       (g) Additional Water Conservation Acreage Under 
     Conservation Reserve Enhancement Program.--Section 1231 of 
     the Food Security Act of 1985 (16 U.S.C. 3831) (as amended by 
     subsection (f)) is amended by adding at the end the 
     following:
       ``(j) Additional Water Conservation Acreage Under 
     Conservation Reserve Enhancement Program.--
       ``(1) Definitions.--In this subsection:
       ``(A) Eligible entity.--The term `eligible entity' means--
       ``(i) an owner or operator of agricultural land;
       ``(ii) a person or entity that holds water rights in 
     accordance with State law; and
       ``(iii) any other landowner.
       ``(B) Program.--The term `program' means the conservation 
     reserve enhancement program announced on May 27, 1998 (63 
     Fed. Reg. 28965).
       ``(2) Protection of private property rights.--
       ``(A) Willing sellers and lessors.--An agreement may be 
     executed under this subsection only if each eligible entity 
     that is a party to the agreement is a willing seller or 
     willing lessor.
       ``(B) Property rights.--Nothing in this subsection 
     authorizes the Federal Government or any State government to 
     condemn private property.
       ``(3) Enrollment.--In addition to the acreage authorized to 
     be enrolled under subsection (d), in carrying out the 
     program, the Secretary shall enroll not more than 500,000 
     acres in eligible States to promote water conservation.
       ``(4) Eligible states.--To be eligible to participate in 
     the program, a State--
       ``(A) shall submit to the Secretary, for review and 
     approval, a proposal that meets the requirements of the 
     program; and
       ``(B) shall--
       ``(i) have established a program to protect in-stream 
     flows; and
       ``(ii) agree to hold water rights leased or purchased under 
     a proposal submitted under subparagraph (A).
       ``(5) Eligible acreage.--An eligible entity may enroll in 
     the program land that is adjacent to a watercourse or lake, 
     or land that would contribute to the restoration of a 
     watercourse or lake (as determined by the Secretary), if--
       ``(A)(i) the land can be restored as a wetland, grassland, 
     or other habitat, as determined by the Secretary; and
       ``(ii) the restoration would significantly improve riparian 
     functions; or
       ``(B) water or water rights appurtenant to the land are 
     leased or sold to an appropriate State agency or State-
     designated water trust, as determined by the Secretary.
       ``(6) Relationship to other enrolled acreage.--For any 
     fiscal year, acreage enrolled under this subsection shall not 
     affect 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 in the program before the date of 
     enactment of this subsection.
       ``(7) Duties of eligible entities.--Under a contract 
     entered into with respect to enrolled land under the program, 
     during the term of the contract, an eligible entity shall 
     agree--
       ``(A)(i) to restore the hydrology of the enrolled land to 
     the maximum extent practicable, as determined by the 
     Secretary; and
       ``(ii) to establish on the enrolled land wetland, 
     grassland, vegetative cover, or other habitat, as determined 
     by the Secretary; or
       ``(B) to transfer to the State, or a designee of the State, 
     water rights appurtenant to the enrolled land.
       ``(8) Rental rates.--
       ``(A) Irrigated land.--With respect to irrigated land 
     enrolled in the program, the rental rate shall be established 
     by the Secretary, acting through the Deputy Administrator for 
     Farm Programs--
       ``(i) on a watershed basis;
       ``(ii) using data available as of the date on which the 
     rental rate is established; and
       ``(iii) at a level sufficient to ensure, to the maximum 
     extent practicable, that the eligible entity is fairly 
     compensated for the irrigated land value of the enrolled 
     land.
       ``(B) Nonirrigated land.--With respect to nonirrigated land 
     enrolled in the program, the rental rate shall be calculated 
     by the Secretary, in accordance with the conservation reserve 
     program manual of the Department that is in effect as of the 
     date on which the rental rate is calculated.
       ``(C) Applicability.--An eligible entity that enters into a 
     contract to enroll land into the program shall receive, in 
     exchange for the enrollment, payments that are based on--
       ``(i) the irrigated rental rate described in subparagraph 
     (A), if the owner or operator agrees to enter into an 
     agreement with the State and approved by the Secretary under 
     which the State leases, for in-stream flow purposes, surface 
     water appurtenant to the enrolled land; or
       ``(ii) the nonirrigated rental rate described in 
     subparagraph (B), if an owner or operator does not enter into 
     an agreement described in clause (i).
       ``(9) Priority.--In carrying out this subsection, the 
     Secretary shall give priority consideration to any State 
     proposal that--
       ``(A) provides a State share of 20 percent or more of the 
     cost of the proposal; and
       ``(B) significantly advances the goals of Federal, State, 
     tribal, and local fish, wildlife, and plant conservation 
     plans, including--
       ``(i) plans that address--

       ``(I) multiple endangered species or threatened species (as 
     defined in section 3 of the Endangered Species Act of 1973 
     (16 U.S.C. 1532)); or
       ``(II) species that may become threatened or endangered if 
     conservation measures are not carried out;

       ``(ii) agreements entered into, or conservation plans 
     submitted, under section 6 or 10(a)(2)(A), respectively, of 
     the Endangered Species Act of 1973 (16 U.S.C. 1535, 
     1539(a)(2)(A)); or
       ``(iii) plans that provide benefits to the fish, wildlife, 
     or plants located in 1 or more--

       ``(I) refuges within the National Wildlife Refuge System; 
     or
       ``(II) State wildlife management areas.

       ``(10) Consultation.--In carrying out this subsection, the 
     Secretary shall consult with--
       ``(A) the Secretary of the Interior; and
       ``(B) affected Indian tribes.
       ``(11) State water law.--Nothing in this subsection--
       ``(A) preempts any State water law;
       ``(B) affects any litigation concerning the entitlement to, 
     or lack of entitlement to, water that is pending as of the 
     date of enactment of this subsection;
       ``(C) expands, alters, or otherwise affects the existence 
     or scope of any water right of any individual (except to the 
     extent that the individual agrees otherwise under the 
     program); or
       ``(D) authorizes or entitles the Federal Government to hold 
     or purchase any water right.
       ``(12) California water law.--
       ``(A) In general.--Nothing in this subsection authorizes 
     the Secretary to enter into an agreement, in accordance with 
     this subchapter, with a landowner for water obtained from an 
     irrigation district, water district, or other similar 
     governmental entity in the State of California.
       ``(B) Treatment of california districts.--An irrigation 
     district, water district, or similar governmental entity in 
     the State of California--
       ``(i) shall be considered an eligible entity for purposes 
     of this subchapter; and
       ``(ii) may develop a program under this subchapter.
       ``(C) District programs.--All landowners participating in a 
     program under this subchapter that is sponsored by a district 
     or entity described in subparagraph (B) shall be willing 
     participants in the program.
       ``(13) Groundwater.--A right to groundwater shall not be 
     subject to any provision of this subsection unless the right 
     is granted--
       ``(A) under applicable State law; and
       ``(B) through a groundwater water rights process that is 
     fully integrated with the surface water rights process of the 
     applicable affected State.''.
       (h) Vegetative Cover; Haying and Grazing; Wind Turbines.--
     Section 1232(a) of the Food Security Act of 1985 (16 U.S.C. 
     3832(a)) is amended--
       (1) in paragraph (4)--
       (A) in subparagraph (A), by striking ``and'' at the end;
       (B) in subparagraph (B), by inserting ``and'' after the 
     semicolon at the end; and
       (C) by adding at the end the following:
       ``(C) in the case of marginal pasture land, an owner or 
     operator shall not be required to plant trees if the land is 
     to be restored--
       ``(i) as wetland; or
       ``(ii) with appropriate native riparian vegetation;'';
       (2) in paragraph (7)--
       (A) by striking ``except that the Secretary--'' and 
     inserting ``except that--'';
       (B) in subparagraph (A)--
       (i) by striking ``(A) may'' and inserting ``(A) the 
     Secretary may''; and
       (ii) by striking ``and'' at the end;
       (C) in subparagraph (B)--
       (i) by striking ``(B) shall'' and inserting ``(B) the 
     Secretary shall''; and
       (ii) by striking the period at the end and inserting a 
     semicolon;
       (D) in subparagraph (C), by striking the period at the end 
     and inserting ``; and''; and
       (E) by adding at the end the following:
       ``(D) for maintenance purposes, the Secretary may permit 
     harvesting or grazing or other commercial uses of forage, in 
     a manner that is consistent with the purposes of this 
     subchapter and a conservation plan approved by the Secretary, 
     on acres enrolled--
       ``(i) to establish conservation buffers as part of the 
     program described in a notice issued on March 24, 1998 (63 
     Fed. Reg. 14109) or a successor program; and
       ``(ii) into the conservation reserve enhancement program 
     described in a notice issued on May 27, 1998 (63 Fed. Reg. 
     28965) or a successor program.'';

[[Page 924]]

       (3) in paragraph (9), by striking ``and'' at the end;
       (4) by redesignating paragraph (10) as paragraph (11); and
       (5) by inserting after paragraph (9) the following:
       ``(10) with respect to any contract entered into after the 
     date of enactment of the Agriculture, Conservation, and Rural 
     Enhancement Act of 2001--
       ``(A) not to produce a crop for the duration of the 
     contract on any other highly erodible land that the owner or 
     operator owns unless the highly erodible land--
       ``(i) has a history of being used to produce a crop other 
     than a forage crop, as determined by the Secretary; or
       ``(ii) is being used as a homestead or building site at the 
     time of purchase; and
       ``(B) on a violation of a contract described in 
     subparagraph (A), to be subject to the requirements of 
     paragraph (5); and''.
       (i) Wind Turbines.--Section 1232 of the Food Security Act 
     of 1985 (8906 U.S.C. 3832) is amended by adding at the end 
     the following:
       ``(f) Wind Turbines.--
       ``(1) In general.--Subject to paragraph (2), the Secretary 
     may permit an owner or operator of land that is enrolled in 
     the conservation reserve program, but that is not enrolled 
     under continuous signup (as described in section 1231(b)(6)), 
     to install wind turbines on the land.
       ``(2) Number; location.--The Secretary shall determine the 
     number and location of wind turbines that may be installed on 
     a tract of land under paragraph (1), taking into account--
       ``(A) the location, size, and other physical 
     characteristics of the land;
       ``(B) the extent to which the land contains wildlife and 
     wildlife habitat; and
       ``(C) the purposes of the conservation reserve program.
       ``(3) Payment limitation.--Notwithstanding the amount of a 
     rental payment limited by section 1234(c)(2) and specified in 
     a contract entered into under this chapter, the Secretary 
     shall reduce the amount of the rental payment paid to an 
     owner or operator of land on which 1 or more wind turbines 
     are installed under this subsection by an amount determined 
     by the Secretary to be commensurate with the value of the 
     reduction of benefit gained by enrollment of the land in the 
     conservation reserve program.''.
       (j) Additional Eligible Practices.--Section 1234 of the 
     Food Security Act of 1985 (16 U.S.C. 3834) is amended by 
     adding at the end the following:
       ``(i) Payments.--
       ``(1) In general.--Subject to paragraph (2), the Secretary 
     shall provide signing and practice incentive payments under 
     the conservation reserve program to owners and operators that 
     implement a practice under--
       ``(A) the program to establish conservation buffers 
     described in a notice issued on March 24, 1998 (63 Fed. Reg. 
     14109) or a successor program; or
       ``(B) the conservation reserve enhancement program 
     described in a notice issued on May 27, 1998 (63 Fed. Reg. 
     28965) or a successor program.
       ``(2) Other practices.--The Secretary shall administer 
     paragraph (1) in a manner that does not reduce the amount of 
     payments made by the Secretary for other practices under the 
     conservation reserve program.''.
       (k) Payments.--Section 1239C(f) of the Food Security Act of 
     1985 (16 U.S.C. 3839c(f)) is amended by adding at the end the 
     following:
       ``(5) Exception.--Paragraph (1) shall not apply to any land 
     enrolled in--
       ``(A) the program to establish conservation buffers 
     described in a notice issued on March 24, 1998 (63 Fed. Reg. 
     14109) or a successor program; or
       ``(B) the conservation reserve enhancement program 
     described in a notice issued on May 27, 1998 (63 Fed. Reg. 
     28965) or a successor program.''.
       (l) County Participation.--Section 1243(b)(1) of the Food 
     Security Act of 1985 (16 U.S.C. 3843(b)(1)) is amended by 
     striking ``The Secretary'' and inserting ``Except for land 
     enrolled under continuous signup (as described in section 
     1231(b)(6)), the Secretary''.
       (m) Study on Economic Effects.--Not later than 270 days 
     after the date of enactment of this Act, 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 describes the economic effects on rural communities 
     resulting from 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.).

     SEC. 213. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.

       (a) In General.--Chapter 4 of subtitle D of title XII of 
     the Food Security Act of 1985 (16 U.S.C. 3839aa et seq.) is 
     amended to read as follows:

     ``SEC. 1240. PURPOSES.

       ``The purposes of the environmental quality incentives 
     program established by this chapter are to promote 
     agricultural production and environmental quality as 
     compatible national goals, and to maximize environmental 
     benefits per dollar expended, by--
       ``(1) assisting producers in complying with--
       ``(A) this title;
       ``(B) the Federal Water Pollution Control Act (33 U.S.C. 
     1251 et seq.);
       ``(C) the Safe Drinking Water Act (42 U.S.C. 300f et seq.);
       ``(D) the Clean Air Act (42 U.S.C. 7401 et seq.); and
       ``(E) other Federal, State, and local environmental laws 
     (including regulations);
       ``(2) avoiding, to the maximum extent practicable, the need 
     for resource and regulatory programs by assisting producers 
     in protecting soil, water, air, and related natural resources 
     and meeting environmental quality criteria established by 
     Federal, State, and local agencies;
       ``(3) providing flexible technical and financial assistance 
     to producers to install and maintain conservation systems 
     that enhance soil, water, related natural resources 
     (including grazing land and wetland), and wildlife while 
     sustaining production of food and fiber;
       ``(4) assisting producers to make beneficial, cost 
     effective changes to cropping systems, grazing management, 
     nutrient management associated with livestock, pest or 
     irrigation management, or other practices on agricultural 
     land;
       ``(5) facilitating partnerships and joint efforts among 
     producers and governmental and nongovernmental organizations; 
     and
       ``(6) consolidating and streamlining conservation planning 
     and regulatory compliance processes to reduce administrative 
     burdens on producers and the cost of achieving environmental 
     goals.

     ``SEC. 1240A. DEFINITIONS.

       ``In this chapter:
       ``(1) Beginning farmer or rancher.--The term `beginning 
     farmer or rancher' has the meaning provided under section 
     343(a) of the Consolidated Farm and Rural Development Act (7 
     U.S.C. 1999(a)).
       ``(2) Comprehensive nutrient management.--
       ``(A) In general.--The term `comprehensive nutrient 
     management' means any combination of structural practices, 
     land management practices, and management activities 
     associated with crop or livestock production described in 
     subparagraph (B) that collectively ensure that the purposes 
     of crop or livestock production and preservation of natural 
     resources (especially the preservation and enhancement of 
     water quality) are compatible.
       ``(B) Elements.--For the purpose of subparagraph (A), 
     structural practices, land management practices, and 
     management activities associated with livestock production 
     are--
       ``(i) manure and wastewater handling and storage;
       ``(ii) manure processing, composting, or digestion for 
     purposes of capturing emissions, concentrating nutrients for 
     transport, destroying pathogens or otherwise improving the 
     environmental safety and beneficial uses of manure;
       ``(iii) land treatment practices;
       ``(iv) nutrient management;
       ``(v) recordkeeping;
       ``(vi) feed management; and
       ``(vii) other waste utilization options.
       ``(C) Practice.--
       ``(i) Planning.--The development of a comprehensive 
     nutrient management plan shall be a practice that is eligible 
     for incentive payments and technical assistance under this 
     chapter.
       ``(ii) Implementation.--The implementation of a 
     comprehensive nutrient plan shall be accomplished through 
     structural and land management practices identified in the 
     plan.
       ``(3) Eligible land.--The term `eligible land' means 
     agricultural land (including cropland, grassland, rangeland, 
     pasture, private nonindustrial forest land, and other land on 
     which crops or livestock are produced), including 
     agricultural land that the Secretary determines poses a 
     serious threat to soil, water, or related resources by reason 
     of the soil types, terrain, climatic, soil, topographic, 
     flood, or saline characteristics, or other factors or natural 
     hazards.
       ``(4) Innovative technology.--The term `innovative 
     technology' means a new conservation technology that, as 
     determined by the Secretary--
       ``(A) maximizes environmental benefits;
       ``(B) complements agricultural production; and
       ``(C) may be adopted in a practical manner.
       ``(5) Land management practice.--The term `land management 
     practice' means a site-specific nutrient or manure 
     management, integrated pest management, irrigation 
     management, tillage or residue management, grazing 
     management, air quality management, or other land management 
     practice carried out on eligible land that the Secretary 
     determines is needed to protect from degradation, in the most 
     cost-effective manner, water, soil, or related resources.
       ``(6) Livestock.--The term `livestock' means dairy cattle, 
     beef cattle, laying hens, broilers, turkeys, swine, sheep, 
     and such other animals as are determined by the Secretary.
       ``(7) Managed grazing.--The term `managed grazing' means 
     the application of 1 or more practices that involve the 
     frequent rotation of animals on grazing land to--
       ``(A) enhance plant health;

[[Page 925]]

       ``(B) limit soil erosion;
       ``(C) protect ground and surface water quality; or
       ``(D) benefit wildlife.
       ``(8) Maximize environmental benefits per dollar 
     expended.--
       ``(A) In general.--The term `maximize environmental 
     benefits per dollar expended' means to maximize environmental 
     benefits to the extent the Secretary determines is 
     practicable and appropriate, taking into account the amount 
     of funding made available to carry out this chapter.
       ``(B) Limitation.--The term `maximize environmental 
     benefits per dollar expended' does not require the 
     Secretary--
       ``(i) to require the adoption of the least cost practice or 
     technical assistance; or
       ``(ii) to require the development of a plan under section 
     1240E as part of an application for payments or technical 
     assistance.
       ``(9) Practice.--The term `practice' means 1 or more 
     structural practices, land management practices, and 
     comprehensive nutrient management planning practices.
       ``(10) Producer.--
       ``(A) In general.--The term `producer' means an owner, 
     operator, landlord, tenant, or sharecropper that--
       ``(i) shares in the risk of producing any crop or 
     livestock; and
       ``(ii) is entitled to share in the crop or livestock 
     available for marketing from a farm (or would have shared had 
     the crop or livestock been produced).
       ``(B) Hybrid seed growers.--In determining whether a grower 
     of hybrid seed is a producer, the Secretary shall not take 
     into consideration the existence of a hybrid seed contract.
       ``(11) Program.--The term `program' means the environmental 
     quality incentives program comprised of sections 1240 through 
     1240J.
       ``(12) Structural practice.--The term `structural practice' 
     means--
       ``(A) the establishment on eligible land of a site-specific 
     animal waste management facility, terrace, grassed waterway, 
     contour grass strip, filterstrip, tailwater pit, permanent 
     wildlife habitat, constructed wetland, or other structural 
     practice that the Secretary determines is needed to protect, 
     in the most cost-effective manner, water, soil, or related 
     resources from degradation; and
       ``(B) the capping of abandoned wells on eligible land.

     ``SEC. 1240B. ESTABLISHMENT AND ADMINISTRATION OF 
                   ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.

       ``(a) Establishment.--
       ``(1) In general.--During each of the 2002 through 2006 
     fiscal years, the Secretary shall provide technical 
     assistance, cost-share payments, and incentive payments to 
     producers that enter into contracts with the Secretary under 
     the program.
       ``(2) Eligible practices.--
       ``(A) Structural practices.--A producer that implements a 
     structural practice shall be eligible for any combination of 
     technical assistance, cost-share payments, and education.
       ``(B) Land management practices.--A producer that performs 
     a land management practice shall be eligible for any 
     combination of technical assistance, incentive payments, and 
     education.
       ``(C) Comprehensive nutrient management planning.--A 
     producer that develops a comprehensive nutrient management 
     plan shall be eligible for any combination of technical 
     assistance, incentive payments, and education.
       ``(3) Education.--The Secretary may provide conservation 
     education at national, State, and local levels consistent 
     with the purposes of the program to--
       ``(A) any producer that is eligible for assistance under 
     the program; or
       ``(B) any producer that is engaged in the production of an 
     agricultural commodity.
       ``(b) Application and Term.--With respect to practices 
     implemented under the program--
       ``(1) a contract between a producer and the Secretary may--
       ``(A) apply to 1 or more structural practices, land 
     management practices, and comprehensive nutrient management 
     planning practices; and
       ``(B) have a term of not less than 3, nor more than 10, 
     years, as determined appropriate by the Secretary, depending 
     on the practice or practices that are the basis of the 
     contract; and
       ``(2) a producer may not enter into more than 1 contract 
     for structural practices involving livestock nutrient 
     management during the period of fiscal years 2002 through 
     2006.
       ``(c) Application and Evaluation.--
       ``(1) In general.--The Secretary shall establish an 
     application and evaluation process for awarding technical 
     assistance, cost-share payments, and incentive payments to a 
     producer in exchange for the performance of 1 or more 
     practices that maximize environmental benefits per dollar 
     expended.
       ``(2) Comparable environmental value.--
       ``(A) In general.--The Secretary shall establish a process 
     for selecting applications for technical assistance, cost-
     share payments, and incentive payments in any case in which 
     there are numerous applications for assistance for practices 
     that would provide substantially the same level of 
     environmental benefits.
       ``(B) Criteria.--The process under subparagraph (A) shall 
     be based on--
       ``(i) a reasonable estimate of the projected cost of the 
     proposals described in the applications; and
       ``(ii) the priorities established under the program, and 
     other factors, that maximize environmental benefits per 
     dollar expended.
       ``(3) Consent of owner.--If the producer making an offer to 
     implement a structural practice is a tenant of the land 
     involved in agricultural production, for the offer to be 
     acceptable, the producer shall obtain the consent of the 
     owner of the land with respect to the offer.
       ``(4) Bidding down.--If the Secretary determines that the 
     environmental values of 2 or more applications for technical 
     assistance, cost-share payments, or incentive 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 established under the program.
       ``(d) Cost-Share Payments.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     cost-share payments provided to a producer proposing to 
     implement 1 or more practices under the program shall be not 
     more than 75 percent of the cost of the practice, as 
     determined by the Secretary.
       ``(2) Exceptions.--
       ``(A) Limited resource and beginning farmers.--The 
     Secretary may increase the amount provided to a producer 
     under paragraph (1) to not more than 90 percent if the 
     producer is a limited resource or beginning farmer or 
     rancher, as determined by the Secretary.
       ``(B) Cost-share assistance from other sources.--Except as 
     provided in paragraph (3), any cost-share payments received 
     by a producer from a State or private organization or person 
     for the implementation of 1 or more practices on eligible 
     land of the producer shall be in addition to the payments 
     provided to the producer under paragraph (1).
       ``(3) Other payments.--A producer shall not be eligible for 
     cost-share payments for practices on eligible land under the 
     program if the producer receives cost-share payments or other 
     benefits for the same practice on the same land under chapter 
     1 and the program.
       ``(e) Incentive Payments.--The Secretary shall make 
     incentive payments in an amount and at a rate determined by 
     the Secretary to be necessary to encourage a producer to 
     perform 1 or more practices.
       ``(f) Technical Assistance.--
       ``(1) In general.--The Secretary shall allocate funding 
     under the program for the provision of technical assistance 
     according to the purpose and projected cost for which the 
     technical assistance is provided for a fiscal year.
       ``(2) Amount.--The allocated amount may vary according to--
       ``(A) the type of expertise required;
       ``(B) the quantity of time involved; and
       ``(C) other factors as determined appropriate by the 
     Secretary.
       ``(3) Limitation.--Funding for technical assistance under 
     the program shall not exceed the projected cost to the 
     Secretary of the technical assistance provided for a fiscal 
     year.
       ``(4) Other authorities.--The receipt of technical 
     assistance under the program shall not affect the eligibility 
     of the producer to receive technical assistance under other 
     authorities of law available to the Secretary.
       ``(5) Incentive payments for technical assistance.--
       ``(A) In general.--A producer that is eligible to receive 
     technical assistance for a practice involving the development 
     of a comprehensive nutrient management plan may obtain an 
     incentive payment that can be used to obtain technical 
     assistance associated with the development of any component 
     of the comprehensive nutrient management plan.
       ``(B) Purpose.--The purpose of the payment shall be to 
     provide a producer the option of obtaining technical 
     assistance for developing any component of a comprehensive 
     nutrient management plan from a certified provider.
       ``(C) Payment.--The incentive payment shall be--
       ``(i) in addition to cost-share or incentive payments that 
     a producer would otherwise receive for structural practices 
     and land management practices;
       ``(ii) used only to procure technical assistance from a 
     certified provider that is necessary to develop any component 
     of a comprehensive nutrient management plan; and
       ``(iii) in an amount determined appropriate by the 
     Secretary, taking into account--

       ``(I) the extent and complexity of the technical assistance 
     provided;
       ``(II) the costs that the Secretary would have incurred in 
     providing the technical assistance; and
       ``(III) the costs incurred by the private provider in 
     providing the technical assistance.

       ``(D) Eligible practices.--The Secretary may determine, on 
     a case by case basis, whether the development of a 
     comprehensive nutrient management plan is eligible for an 
     incentive payment under this paragraph.
       ``(E) Certification by secretary.--
       ``(i) In general.--Only persons that have been certified by 
     the Secretary under section

[[Page 926]]

     1244(f)(3) shall be eligible to provide technical assistance 
     under this subsection.
       ``(ii) Quality assurance.--The Secretary shall ensure that 
     certified providers are capable of providing technical 
     assistance regarding comprehensive nutrient management in a 
     manner that meets the specifications and guidelines of the 
     Secretary and that meets the needs of producers under the 
     program.
       ``(F) Advance payment.--On the determination of the 
     Secretary that the proposed comprehensive nutrient management 
     of a producer is eligible for an incentive payment, the 
     producer may receive a partial advance of the incentive 
     payment in order to procure the services of a certified 
     provider.
       ``(G) Final payment.--The final installment of the 
     incentive payment shall be payable to a producer on 
     presentation to the Secretary of documentation that is 
     satisfactory to the Secretary and that demonstrates--
       ``(i) completion of the technical assistance; and
       ``(ii) the actual cost of the technical assistance.
       ``(g) Modification or Termination of Contracts.--
       ``(1) Voluntary modification or termination.--The Secretary 
     may modify or terminate a contract entered into with a 
     producer under this chapter 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 this chapter if the Secretary determines 
     that the producer violated the contract.

     ``SEC. 1240C. EVALUATION OF OFFERS AND PAYMENTS.

       ``(a) In General.--In evaluating applications for technical 
     assistance, cost-share payments, and incentive payments, the 
     Secretary shall accord a higher priority to assistance and 
     payments that--
       ``(1) maximize environmental benefits per dollar expended; 
     and
       ``(2)(A) address national conservation priorities, 
     including--
       ``(i) meeting Federal, State, and local environmental 
     purposes focused on protecting air and water quality;
       ``(ii) comprehensive nutrient management;
       ``(iii) water quality, particularly in impaired watersheds;
       ``(iv) soil erosion;
       ``(v) air quality; or
       ``(vi) pesticide and herbicide management or reduction;
       ``(B) are provided in conservation priority areas 
     established under section 1230(c);
       ``(C) are provided in special projects under section 
     1243(f)(4) with respect to which State or local governments 
     have provided, or will provide, financial or technical 
     assistance to producers for the same conservation or 
     environmental purposes; or
       ``(D) an innovative technology in connection with a 
     structural practice or land management practice.

     ``SEC. 1240D. DUTIES OF PRODUCERS.

       ``To receive technical assistance, cost-share payments, or 
     incentive payments under the program, a producer shall 
     agree--
       ``(1) to implement an environmental quality incentives 
     program plan that describes conservation and environmental 
     purposes to be achieved through 1 or more practices that are 
     approved by the Secretary;
       ``(2) not to conduct any practices on the farm or ranch 
     that would tend to defeat the purposes of the program;
       ``(3) on the violation of a term or condition of the 
     contract at any time the producer has control of the land--
       ``(A) if the Secretary determines that the violation 
     warrants termination of the contract--
       ``(i) to forfeit all rights to receive payments under the 
     contract; and
       ``(ii) to refund to the Secretary all or a portion of the 
     payments received by the owner or operator under the 
     contract, including any interest on the payments, as 
     determined by the Secretary; or
       ``(B) if the Secretary determines that the violation does 
     not warrant termination of the contract, to refund to the 
     Secretary, or accept adjustments to, the payments provided to 
     the owner or operator, as the Secretary determines to be 
     appropriate;
       ``(4) on the transfer of the right and interest of the 
     producer in land subject to the contract, unless the 
     transferee of the right and interest agrees with the 
     Secretary to assume all obligations of the contract, to 
     refund all cost-share payments and incentive payments 
     received under the program, as determined by the Secretary;
       ``(5) to supply information as required by the Secretary to 
     determine compliance with the program plan and requirements 
     of the program; and
       ``(6) to comply with such additional provisions as the 
     Secretary determines are necessary to carry out the program 
     plan.

     ``SEC. 1240E. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM PLAN.

       ``(a) In General.--To be eligible to receive technical 
     assistance, cost-share payments, or incentive payments under 
     the program, a producer of a livestock or agricultural 
     operation shall submit to the Secretary for approval a plan 
     of operations that specifies practices covered under the 
     program, and is based on such terms and conditions, as the 
     Secretary considers necessary to carry out the program, 
     including a description of the practices to be implemented 
     and the purposes to be met by the implementation of the plan.
       ``(b) Avoidance of duplication.--The Secretary shall, to 
     the maximum extent practicable, eliminate duplication of 
     planning activities under the program and comparable 
     conservation programs.

     ``SEC. 1240F. DUTIES OF THE SECRETARY.

       ``To the extent appropriate, the Secretary shall assist a 
     producer in achieving the conservation and environmental 
     goals of a program plan by--
       ``(1) providing technical assistance in developing and 
     implementing the plan;
       ``(2) providing technical assistance, cost-share payments, 
     or incentive payments for developing and implementing 1 or 
     more practices, as appropriate;
       ``(3) providing the producer with information, education, 
     and training to aid in implementation of the plan; and
       ``(4) encouraging the producer to obtain technical 
     assistance, cost-share payments, or grants from other 
     Federal, State, local, or private sources.

     ``SEC. 1240G. LIMITATION ON PAYMENTS.

       ``(a) In General.--An individual or entity may not receive, 
     directly or indirectly, payments under the program that 
     exceed--
       ``(1) $50,000 for any fiscal year; or
       ``(2) $150,000 for any multiyear contract.
       ``(b) Verification.--The Secretary shall identify 
     individuals and entities that are eligible for a payment 
     under the program using social security numbers and taxpayer 
     identification numbers, respectively.

     ``SEC. 1240H. CONSERVATION INNOVATION GRANTS.

       ``(a) In General.--From funds made available to carry out 
     the program, for each of the 2003 through 2006 fiscal years, 
     the Secretary shall use not more than $100,000,000 for each 
     fiscal year to pay the cost of competitive grants that are 
     intended to stimulate innovative approaches to leveraging 
     Federal investment in environmental enhancement and 
     protection, in conjunction with agricultural production, 
     through the program.
       ``(b) Use.--The Secretary may award grants under this 
     section to governmental and nongovernmental organizations and 
     persons, on a competitive basis, to carry out projects that--
       ``(1) involve producers that are eligible for payments or 
     technical assistance under the program;
       ``(2) implement innovative projects, such as--
       ``(A) market systems for pollution reduction;
       ``(B) promoting agricultural best management practices, 
     including the storing of carbon in the soil;
       ``(C) protection of source water for human consumption; and
       ``(D) reducing nutrient loss through the reduction of 
     nutrient inputs by an amount that is at least 15 percent less 
     than the established agronomic application rate, as 
     determined by the Secretary; and
       ``(3) leverage funds made available to carry out the 
     program with matching funds provided by State and local 
     governments and private organizations to promote 
     environmental enhancement and protection in conjunction with 
     agricultural production.
       ``(c) Cost Share.--The amount of a grant made under this 
     section to carry out a project shall not exceed 50 percent of 
     the cost of the project.
       ``(d) Unused Funding.--Any funds made available for a 
     fiscal year under this section that are not obligated by 
     April 1 of the fiscal year may be used to carry out other 
     activities under this chapter during the fiscal year in which 
     the funding becomes available.

     ``SEC. 1240I. SOUTHERN HIGH PLAINS AQUIFER GROUNDWATER 
                   CONSERVATION.

       ``(a) Definitions.--In this section:
       ``(1) Eligible activity.--
       ``(A) In general.--The term `eligible activity' means an 
     activity carried out to conserve groundwater.
       ``(B) Inclusions.--The term `eligible activity' includes an 
     activity to--
       ``(i) improve an irrigation system;
       ``(ii) reduce the use of water for irrigation (including 
     changing from high-water intensity crops to low-water 
     intensity crops); or
       ``(iii) convert from farming that uses irrigation to 
     dryland farming.
       ``(2) Southern high plains aquifer.--The term `Southern 
     High Plains Aquifer' means the portion of the groundwater 
     reserve under Kansas, New Mexico, Oklahoma, and Texas 
     depicted as Figure 1 in the United States Geological Survey 
     Professional Paper 1400-B, entitled `Geohydrology of the High 
     Plains Aquifer in Parts of Colorado, Kansas, Nebraska, New 
     Mexico, Oklahoma, South Dakota, Texas, and Wyoming'.
       ``(b) Conservation Measures.--
       ``(1) In general.--Subject to paragraph (2), the Secretary 
     shall provide cost-share payments, incentive payments, and 
     groundwater education assistance to producers that draw water 
     from the Southern High Plains Aquifer to carry out eligible 
     activities.

[[Page 927]]

       ``(2) Limitations.--The Secretary shall provide a payment 
     to a producer under this section only if the Secretary 
     determines that the payment will result in a net savings in 
     groundwater resources on the land of the producer.
       ``(3) Cooperation.--In accordance with this subtitle, in 
     providing groundwater education under this subsection, the 
     Secretary shall cooperate with--
       ``(A) States;
       ``(B) land-grant colleges and universities;
       ``(C) educational institutions; and
       ``(D) private organizations.
       ``(c) Funding.--
       ``(1) In general.--Of the funds made available under 
     section 1241(b)(1) to carry out the program, the Secretary 
     shall use to carry out this section--
       ``(A) $15,000,000 for fiscal year 2003;
       ``(B) $25,000,000 for each of fiscal years 2004 and 2005;
       ``(C) $35,000,000 for fiscal year 2006; and
       ``(D) $0 for fiscal year 2007.
       ``(2) Other funds.--Subject to paragraph (3), the funds 
     made available under this subsection shall be in addition to 
     any other funds provided under the program.
       ``(3) Unused funding.--Any funds made available for a 
     fiscal year under paragraph (1) that are not obligated by 
     April 1 of the fiscal year shall be used to carry out other 
     activities in other States under the program.

     ``SEC. 1240J. PILOT PROGRAMS.

       ``(a) Drinking Water Suppliers Pilot Program.--
       ``(1) In general.--For each fiscal year, the Secretary may 
     carry out, in watersheds selected by the Secretary, in 
     cooperation with local water utilities, a pilot program to 
     improve water quality.
       ``(2) Implementation.--The Secretary may select the 
     watersheds referred to in paragraph (1), and make available 
     funds (including funds for the provision of incentive 
     payments) to be allocated to producers in partnership with 
     drinking water utilities in the watersheds, if the drinking 
     water utilities agree to measure water quality at such 
     intervals and in such a manner as may be determined by the 
     Secretary.
       ``(b) Nutrient Reduction Pilot Program.--
       ``(1) In general.--For each of fiscal years 2003 through 
     2006, the Secretary shall use funds made available to carry 
     out the program, in the amounts specified in paragraph (3), 
     in the Chesapeake Bay watershed to provide incentives for 
     agricultural producers in each State to reduce negative 
     effects on watersheds, including through the significant 
     reduction in nutrient applications, as determined by the 
     Secretary.
       ``(2) Payments.--Incentive payments made to a producer 
     under paragraph (1) shall reflect the extent to which the 
     producer reduces nutrient applications.
       ``(3) Funding.--
       ``(A) In general.--Of the amounts made available under 
     section 1241(b) to carry out the program, the Secretary shall 
     use to carry out this subsection--
       ``(i) $10,000,000 for fiscal year 2003;
       ``(ii) $15,000,000 for fiscal year 2004;
       ``(iii) $20,000,000 for fiscal year 2005;
       ``(iv) $25,000,000 for fiscal year 2006; and
       ``(v) $0 for fiscal year 2007.
       ``(B) Unexpended funds.--Any funds made available for a 
     fiscal year under subparagraph (A) that are not obligated by 
     April 1 of the fiscal year shall be used to carry out other 
     activities outside the Chesapeake Bay watershed under this 
     chapter.
       ``(c) Consistency With Watershed Plan.--In allocating funds 
     for the pilot programs under subsections (a) and (b) and any 
     other pilot programs carried out under the program, the 
     Secretary shall take into consideration the extent to which 
     an application for the funds is consistent with--
       ``(1) any applicable locally developed watershed plan; and
       ``(2) the factors established by section 1240C.
       ``(d) Contracts.--
       ``(1) In general.--In carrying out this section, in 
     addition to other requirements under the program, the 
     Secretary shall enter into contracts in accordance with this 
     section with producers the activities of which affect water 
     quality (including the quality of public drinking water 
     supplies) to implement and maintain--
       ``(A) nutrient management;
       ``(B) pest management;
       ``(C) soil erosion practices; and
       ``(D) other conservation activities that protect water 
     quality and human health.
       ``(2) Requirements.--A contract described in paragraph (1) 
     shall--
       ``(A) describe the specific nutrient management, pest 
     management, soil erosion, or other practices to be 
     implemented, maintained, or improved;
       ``(B) contain a schedule of implementation for those 
     practices;
       ``(C) to the maximum extent practicable, address water 
     quality priorities of the watershed in which the operation is 
     located; and
       ``(D) contain such other terms as the Secretary determines 
     to be appropriate.''.
       (b) Funding.--Section 1241 of the Food Security Act of 1985 
     (16 U.S.C. 3841) is amended by striking subsection (b) and 
     inserting the following:
       ``(b) Environmental Quality Incentives Program.--Subject to 
     section 241 of the Agriculture, Conservation, and Rural 
     Enhancement Act of 2001, of the funds of the Commodity Credit 
     Corporation, the Secretary shall make available to provide 
     technical assistance, cost-share payments, incentive 
     payments, bonus payments, grants, and education under the 
     environmental quality incentives program under chapter 4 of 
     subtitle D, to remain available until expended--
       ``(1) $500,000,000 for fiscal year 2002;
       ``(2) $1,300,000,000 for fiscal year 2003;
       ``(3) $1,450,000,000 for each of fiscal years 2004 and 
     2005;
       ``(4) $1,500,000,000 for fiscal year 2006; and
       ``(5) $850,000,000 for fiscal year 2007.''.
       (c) Reimbursements.--Section 11 of the Commodity Credit 
     Corporation Charter Act (15 U.S.C. 714i) is amended in the 
     last sentence by inserting ``but excluding transfers and 
     allotments for conservation technical assistance'' after 
     ``activities''.

     SEC. 214. WETLANDS RESERVE PROGRAM.

       (a) Technical Assistance.--Section 1237(a) of the Food 
     Security Act of 1985 (16 U.S.C. 3837(a)) is amended by 
     inserting ``(including the provision of technical 
     assistance)'' before the period at the end.
       (b) Maximum Enrollment.--Section 1237(b) of the Food 
     Security Act of 1985 (16 U.S.C. 3837(b)) is amended by 
     striking paragraph (1) and inserting the following:
       ``(1) Maximum enrollment.--
       ``(A) In general.--The total number of acres enrolled in 
     the wetlands reserve program shall not exceed 2,225,000 
     acres, of which, to the maximum extent practicable subject to 
     subparagraph (B), the Secretary shall enroll 250,000 acres in 
     each calendar year.
       ``(B) Wetlands reserve enhancement acreage.--Of the acreage 
     enrolled under subparagraph (A) for a calendar year, not more 
     than 25,000 acres may be enrolled in the wetlands reserve 
     enhancement program described in subsection (h).''.
       (c) Reauthorization.--Section 1237(c) of the Food Security 
     Act of 1985 (16 U.S.C. 3837(c)) is amended by striking 
     ``2002'' and inserting ``2006''.
       (d) Wetlands Reserve Enhancement Program.--Section 1237 of 
     the Food Security Act of 1985 (16 U.S.C. 3837) is amended by 
     adding at the end the following:
       ``(h) Wetlands Reserve Enhancement Program.--
       ``(1) In general.--Notwithstanding the Federal Grant and 
     Cooperative Agreement Act of 1977 (41 U.S.C. 501 et seq.), 
     the Secretary may enter into cooperative agreements with 
     State or local governments, and with private organizations, 
     to develop, on land that is enrolled, or is eligible to be 
     enrolled, in the wetland reserve established under this 
     subchapter, wetland restoration activities in watershed 
     areas.
       ``(2) Purpose.--The purpose of the agreements shall be to 
     address critical environmental issues.
       ``(3) Relationship to other authorities.--Nothing in this 
     subsection limits the authority of the Secretary to enter 
     into a cooperative agreement with a party under which 
     agreement the Secretary and the party--
       ``(A) share a mutual interest in the program under this 
     subchapter; and
       ``(B) contribute resources to accomplish the purposes of 
     that program.''.
       (e) Monitoring and Maintenance.--Section 1237C(a)(2) of the 
     Food Security Act of 1985 (16 U.S.C. 3837c(a)(2)) is amended 
     by striking ``assistance'' and inserting ``assistance 
     (including monitoring and maintenance)''.

     SEC. 2__. WATER BENEFITS PROGRAM.

       Subtitle D of title XII of the Food Security Act of 1985 
     (16 U.S.C. 3831 et seq.) is amended by adding at the end the 
     following:

                    ``CHAPTER 6--WATER CONSERVATION

     ``SEC. 1240R. WATER BENEFITS PROGRAM.

       ``(a) Definitions.--In this section:
       ``(1) Eligible entity.--The term `eligible entity' means--
       ``(A) an owner or operator of agricultural land;
       ``(B) a person or entity that holds water rights in 
     accordance with State law; and
       ``(C) any other landowner.
       ``(2) Program.--The term `program' means the water benefits 
     program established under subsection (b).
       ``(b) Establishment.--The Secretary shall establish a 
     program to promote water conservation, to be known as the 
     `water benefits program', under which the Secretary shall 
     make payments to eligible States to pay the Federal share of 
     the cost of--
       ``(1) in accordance with subsection (f), irrigation 
     efficiency infrastructure or measures that provide in-stream 
     flows for fish and wildlife and other environmental purposes 
     (including wetland restoration);
       ``(2) converting from production of a water-intensive crop 
     to a crop that requires less water; or
       ``(3) the lease, purchase, dry-year optioning, or 
     dedication of water or water rights to provide, directly or 
     indirectly, in-stream flows for fish and wildlife and other 
     environmental purposes (including wetland restoration).
       ``(c) Protection of Private Property Rights.--
       ``(1) Willing sellers and lessors.--An agreement may be 
     executed under this subsection only if each eligible entity 
     that is a party to the agreement is a willing seller or 
     willing lessor.

[[Page 928]]

       ``(2) Property rights.--Nothing in this section authorizes 
     the Federal Government or any State government to condemn 
     private property.
       ``(d) Eligible States.--To be eligible to receive a payment 
     under the program, a State shall--
       ``(1) establish a State program under which the State holds 
     and enforces water rights leased, purchased, dry-year 
     optioned, or dedicated to provide in-stream flows for fish 
     and wildlife;
       ``(2) designate a State agency to administer the State 
     program;
       ``(3)(A) submit to the Secretary a State plan to protect 
     in-stream flows; and
       ``(B) obtain approval of the State program and plan by the 
     Secretary;
       ``(4) subject each lease, purchase, dry-year optioning, and 
     dedication of water and water rights to any review and 
     approval required under State law, such as review and 
     approval by a water board, water court, or water engineer of 
     the State; and
       ``(5) ensure that each lease, purchase, dry-year optioning, 
     and dedication of water and water rights is consistent with 
     State water law.
       ``(e) Role of Secretary.--In carrying out this section, the 
     Secretary shall--
       ``(1) certify State programs established under subsection 
     (d)(1) for an initial term, and any subsequent renewal of 
     terms, of not more than 3 years, subject to renewal;
       ``(2) establish guidelines for participating States to pay 
     the Federal share of assisting the conversion from production 
     of water-intensive crops to crops that require less water;
       ``(3) establish guidelines for participating States to pay 
     the non-Federal share of the cost of on-farm and off-farm 
     irrigation efficiency infrastructure and measures described 
     in subsection (f)(2);
       ``(4) establish guidelines for participating States for the 
     lease, purchase, dry-year optioning, and dedication of water 
     and water rights under State programs;
       ``(5) establish a program within the Agricultural Research 
     Service, in collaboration with the United States Geological 
     Survey, to monitor State efforts under the program, including 
     the construction and maintenance of stream gauging stations;
       ``(6) revoke certification of a State program under 
     paragraph (1) if State administration of the State program 
     does not meet the terms of the certification; and
       ``(7) consult with the Secretary of the Interior and 
     affected Indian tribes, particularly with respect to the 
     establishment and implementation of the program.
       ``(f) Irrigation Efficiency Infrastructure and Measures.--
       ``(1) In general.--The Secretary may pay--
       ``(A) the Federal share of the cost of converting from 
     production of a water-intensive crop to a crop that requires 
     less water, as described in subsection (e)(2); and
       ``(B) the Federal share determined under subsection (g) of 
     the cost of on-farm and off-farm irrigation efficiency 
     infrastructure and measures described in paragraph (2) if not 
     less than 75 percent of the water conserved as a result of 
     the infrastructure and measures is permanently allocated, 
     directly or indirectly, to in-stream flows.
       ``(2) Eligible irrigation efficiency infrastructure and 
     measures.--Eligible irrigation efficiency infrastructure and 
     measures referred to in paragraph (1) are--
       ``(A) lining of ditches, insulation of piping, and 
     installation of ditch portals or gates;
       ``(B) tail water return systems;
       ``(C) low-energy precision applications;
       ``(D) low-flow irrigation systems, including drip and 
     trickle systems and micro-sprinkler systems;
       ``(E) spray jets or nozzles that improve water distribution 
     efficiency;
       ``(F) surge valves;
       ``(G) conversion from gravity or flood irrigation to low-
     flow sprinkler or drip irrigation systems;
       ``(H) intake screens, fish passages, and conversion of 
     diversions to pumps;
       ``(I) alternate furrow wetting, irrigation scheduling, and 
     similar measures; and
       ``(J) such other irrigation efficiency infrastructure and 
     measures as the Secretary determines to be appropriate to 
     carry out the program.
       ``(g) Cost Sharing.--
       ``(1) Non-federal share.--The non-Federal share of the cost 
     of converting from production of a water-intensive crop to a 
     crop that requires less water, or of an irrigation efficiency 
     infrastructure or measure assisted under subsection (f)--
       ``(A) shall be not less than 25 percent; and
       ``(B) shall be paid by--
       ``(i) a State;
       ``(ii) an owner or operator of a farm or ranch (including 
     an Indian tribe); or
       ``(iii) a nonprofit organization.
       ``(2) Increased non-federal share.--If an owner or operator 
     of a farm or ranch pays 50 percent or more of the cost of 
     converting from production of a water-intensive crop to a 
     crop that requires less water, or of an irrigation efficiency 
     infrastructure or measure, the owner or operator shall retain 
     the right to use 50 percent of the water conserved by the 
     conversion, infrastructure, or measure.
       ``(3) Leasing of conserved water.--A State shall--
       ``(A) give an eligible entity with respect to land enrolled 
     in the program the option of leasing, or providing a dry-year 
     option on, conserved water for 30 years; and
       ``(B) increase the non-Federal share under paragraph (1) 
     accordingly, as determined by the Secretary.
       ``(4) Water lease and purchase.--The cost of water or water 
     rights that are directly leased, purchased, subject to a dry-
     year option, or dedicated under this section shall not be 
     subject to the cost-sharing requirement of this subsection.
       ``(h) State Allocations.--In making allocations to States, 
     the Secretary shall consider the extent to which the State 
     plan required by subsection (d)(3)(A) significantly advances 
     the goals of Federal, State, tribal, and local fish, 
     wildlife, and plant conservation plans, including--
       ``(1) plans that address--
       ``(A) multiple endangered species or threatened species (as 
     defined in section 3 of the Endangered Species Act of 1973 
     (16 U.S.C. 1532)); or
       ``(B) species that may become threatened or endangered if 
     conservation measures are not carried out;
       ``(2) agreements entered into, or conservation plans 
     submitted, under section 6 or 10(a)(2)(A), respectively, of 
     the Endangered Species Act of 1973 (16 U.S.C. 1535, 
     1539(a)(2)(A)); and
       ``(3) plans that provide benefits to the fish, wildlife, or 
     plants located in 1 or more--
       ``(A) refuges within the National Wildlife Refuge System; 
     or
       ``(B) State wildlife management areas.
       ``(i) State Water Law.--Nothing in this section--
       ``(1) preempts any State water law;
       ``(2) affects any litigation concerning the entitlement to, 
     or lack of entitlement to, water that is pending as of the 
     date of enactment of this section;
       ``(3) expands, alters, or otherwise affects the existence 
     or scope of any water right of any individual (except to the 
     extent that the individual agrees otherwise under the 
     program); or
       ``(4) authorizes or entitles the Federal Government to hold 
     or purchase any water right.
       ``(j) California Water Law.--
       ``(1) In general.--Nothing in this section authorizes the 
     Secretary to enter into an agreement, in accordance with this 
     subchapter, with a landowner for water obtained from an 
     irrigation district, water district, or other similar 
     governmental entity in the State of California.
       ``(2) Treatment of california districts.--An irrigation 
     district, water district, or similar governmental entity in 
     the State of California--
       ``(A) shall be considered an eligible entity for purposes 
     of this subsection; and
       ``(B) may develop a program under this subsection.
       ``(3) District programs.--All landowners participating in a 
     program under this subchapter that is sponsored by a district 
     or entity described in paragraph (2) shall be willing 
     participants in the program.
       ``(k) Groundwater.--A right to groundwater shall not be 
     subject to any provision of this section unless the right is 
     granted--
       ``(1) under applicable State law; and
       ``(2) through a groundwater water rights process that is 
     fully integrated with the surface water rights process of the 
     applicable affected State.
       ``(l) Funding.--
       ``(1) In general.--Of the funds of the Commodity Credit 
     Corporation, the Secretary shall make available to carry out 
     this section--
       ``(A) $25,000,000 for fiscal year 2002;
       ``(B) $52,000,000 for fiscal year 2003; and
       ``(C) $100,000,000 for each of fiscal years 2004 through 
     2006.
       ``(2) Limitation on expenditures.--For any fiscal year, a 
     State that participates in the program shall expend not more 
     than 75 percent of the funds made available to the State 
     under the program to pay--
       ``(A) the cost of converting from production of a water-
     intensive crop to a crop that requires less water; or
       ``(B) the cost of irrigation efficiency infrastructure and 
     measures under subsection (f)(1).
       ``(3) Monitoring program.--For each fiscal year, of the 
     funds made available under paragraph (1), the Secretary shall 
     use not more than $5,000,000 to carry out the monitoring 
     program under subsection (e)(5).
       ``(4) Administration.--
       ``(A) Federal.--For each fiscal year, of the funds made 
     available under paragraph (1), the Secretary shall use not 
     more than $500,000 for administration of the program.
       ``(B) State.--For each fiscal year, of the funds made 
     available under paragraph (1), not more than 3 percent shall 
     be made available to States for administration of the 
     program.''.
                                  ____

  SA 2839. Mr. BAUCUS proposed an amendment to amendment SA 2471 
submitted by Mr. Daschle and intended to be proposed to the bill (S. 
1731) to strengthen the safety net for agricultural producers, to 
enhance resource conservation and rural development, to provide for 
farm credit, agricultural research, nutrition, and related programs, to 
ensure consumers abundant

[[Page 929]]

food and fiber, and for other purposes; as follows:

       On page 128, line 8, strike the final period and insert a 
     period and the following:

             Subtitle __--Emergency Agriculture Assistance

     SEC. __01. INCOME LOSS ASSISTANCE.

       (a) In General.--The Secretary of Agriculture (referred to 
     in this subtitle as the ``Secretary'') shall use 
     $1,800,000,000 of funds of the Commodity Credit Corporation 
     to make emergency financial assistance available to producers 
     on a farm that have incurred qualifying income losses in 
     calendar year 2001, including losses due to army worms.
       (b) Administration.--The Secretary shall make assistance 
     available under this section in the same manner as provided 
     under section 815 of the Agriculture, Rural Development, Food 
     and Drug Administration, and Related Agencies Appropriations 
     Act, 2001 (Public Law 106-387; 114 Stat. 1549A-55), including 
     using the same loss thresholds for the quantity and economic 
     losses as were used in administering that section.
       (c) Use of Funds for Cash Payments.--The Secretary may use 
     funds made available under this section to make, in a manner 
     consistent with this section, cash payments not for crop 
     disasters, but for income loss to carry out the purposes of 
     this section.

     SEC. __02. LIVESTOCK ASSISTANCE PROGRAM.

       (a) In General.--The Secretary shall use $500,000,000 of 
     the funds of the Commodity Credit Corporation to make and 
     administer payments for livestock losses to producers for 
     2001 losses in a county that has received an emergency 
     designation by the President or the Secretary after January 
     1, 2001, of which $12,000,000 shall be made available for the 
     American Indian livestock program under section 806 of the 
     Agriculture, Rural Development, Food and Drug Administration, 
     and Related Agencies Appropriations Act, 2001 (Public Law 
     106-387; 114 Stat. 1549A-51).
       (b) Administration.--The Secretary shall make assistance 
     available under this section in the same manner as provided 
     under section 806 of the Agriculture, Rural Development, Food 
     and Drug Administration, and Related Agencies Appropriations 
     Act, 2001 (Public Law 105-277; 114 Stat. 1549A-51).

     SEC. __03. MARKET LOSS ASSISTANCE FOR APPLE PRODUCERS.

       (a) In General.--The Secretary of Agriculture shall use 
     $100,000,000 of funds of the Commodity Credit Corporation for 
     fiscal year 2002 to make payments to apple producers, as soon 
     as practicable after the date of enactment of this Act, for 
     the loss of markets during the 2000 crop year.
       (b) Payment Quantity.--A payment to the producers on a farm 
     for the 2000 crop year under this section shall be made on 
     the lesser of--
       (1) the quantity of apples produced by the producers on the 
     farm during the 2000 crop year; or
       (2) 5,000,000 pounds of apples.
       (c) Limitations.--The Secretary shall not establish a 
     payment limitation, or income eligibility limitation, with 
     respect to payments made under this section.

     SEC. __04. COMMODITY CREDIT CORPORATION.

       The Secretary shall use the funds, facilities, and 
     authorities of the Commodity Credit Corporation to carry out 
     this subtitle.

     SEC. __05. ADMINISTRATIVE EXPENSES.

       (a) In General.--In addition to funds otherwise available, 
     not later than 30 days after the date of enactment of this 
     Act, out of any funds in the Treasury not otherwise 
     appropriated, the Secretary of the Treasury shall transfer to 
     the Secretary of Agriculture to pay the salaries and expenses 
     of the Department of Agriculture in carrying out this 
     subtitle $50,000,000, to remain available until expended.
       (b) Receipt and Acceptance.--The Secretary shall be 
     entitled to receive, shall accept, and shall use to carry out 
     this section the funds transferred under subsection (a), 
     without further appropriation.

     SEC. __06. REGULATIONS.

       (a) In General.--The Secretary may promulgate such 
     regulations as are necessary to implement this subtitle.
       (b) Procedure.--The promulgation of the regulations and 
     administration of this subtitle shall be made without regard 
     to--
       (1) the notice and comment provisions of section 553 of 
     title 5, United States Code;
       (2) 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
       (3) chapter 35 of title 44, United States Code (commonly 
     known as the ``Paperwork Reduction Act'').
       (c) Congressional Review of Agency Rulemaking.--In carrying 
     out this section, the Secretary shall use the authority 
     provided under section 808 of title 5, United States Code.

     SEC. __07. EMERGENCY REQUIREMENT.

       The entire amount necessary to carry out this subtitle is 
     designated by Congress as an emergency requirement pursuant 
     to section 252(e) of the Balanced Budget and Emergency 
     Deficit Control Act of 1985 (2 U.S.C. 901(e)).
                                  ____

  SA 2840. Mr. REID (for Mr. Jeffords) proposed an amendment to the 
bill S. 1206, to reauthorize the Appalachian Regional Development Act 
of 1965, and for other purposes; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Appalachian Regional 
     Development Act Amendments of 2002''.

     SEC. 2. PURPOSES.

       (a) This Act.--The purposes of this Act are--
       (1) to reauthorize the Appalachian Regional Development Act 
     of 1965 (40 U.S.C. App.); and
       (2) to ensure that the people and businesses of the 
     Appalachian region have the knowledge, skills, and access to 
     telecommunication and technology services necessary to 
     compete in the knowledge-based economy of the United States.
       (b) Appalachian Regional Development Act of 1965.--Section 
     2 of the Appalachian Regional Development Act of 1965 (40 
     U.S.C. App.) is amended--
       (1) in subsection (b), by inserting after the third 
     sentence the following: ``Consistent with the goal described 
     in the preceding sentence, the Appalachian region should be 
     able to take advantage of eco-industrial development, which 
     promotes both employment and economic growth and the 
     preservation of natural resources.''; and
       (2) in subsection (c)(2)(B)(ii), by inserting ``, including 
     eco-industrial development technologies'' before the 
     semicolon.

     SEC. 3. FUNCTIONS OF THE COMMISSION.

       Section 102(a) of the Appalachian Regional Development Act 
     of 1965 (40 U.S.C. App.) is amended--
       (1) in paragraph (5), by inserting ``, and support,'' after 
     ``formation of'';
       (2) in paragraph (7), by striking ``and'' at the end;
       (3) in paragraph (8), by striking the period at the end and 
     inserting a semicolon; and
       (4) by adding at the end the following:
       ``(9) encourage the use of eco-industrial development 
     technologies and approaches; and
       ``(10) seek to coordinate the economic development 
     activities of, and the use of economic development resources 
     by, Federal agencies in the region.''.

     SEC. 4. INTERAGENCY COORDINATING COUNCIL ON APPALACHIA.

       Section 104 of the Appalachian Regional Development Act of 
     1965 (40 U.S.C. App.) is amended--
       (1) by striking ``The President'' and inserting ``(a) In 
     General.--The President''; and
       (2) by adding at the end the following:
       ``(b) Interagency Coordinating Council on Appalachia.--
       ``(1) Establishment.--In carrying out subsection (a), the 
     President shall establish an interagency council to be known 
     as the `Interagency Coordinating Council on Appalachia'.
       ``(2) Membership.--The Council shall be composed of--
       ``(A) the Federal Cochairman, who shall serve as 
     Chairperson of the Council; and
       ``(B) representatives of Federal agencies that carry out 
     economic development programs in the region.''.

     SEC. 5. TELECOMMUNICATIONS AND TECHNOLOGY INITIATIVE.

       Title II of the Appalachian Regional Development Act of 
     1965 (40 U.S.C. App.) is amended by inserting after section 
     202 the following:

     ``SEC. 203. TELECOMMUNICATIONS AND TECHNOLOGY INITIATIVE.

       ``(a) In General.--The Commission may provide technical 
     assistance, make grants, enter into contracts, or otherwise 
     provide funds to persons or entities in the region for 
     projects--
       ``(1) to increase affordable access to advanced 
     telecommunications, entrepreneurship, and management 
     technologies or applications in the region;
       ``(2) to provide education and training in the use of 
     telecommunications and technology;
       ``(3) to develop programs to increase the readiness of 
     industry groups and businesses in the region to engage in 
     electronic commerce; or
       ``(4) to support entrepreneurial opportunities for 
     businesses in the information technology sector.
       ``(b) Source of Funding.--
       ``(1) In general.--Assistance under this section may be 
     provided--
       ``(A) exclusively from amounts made available to carry out 
     this section; or
       ``(B) from amounts made available to carry out this section 
     in combination with amounts made available under any other 
     Federal program or from any other source.
       ``(2) Federal share requirements specified in other laws.--
     Notwithstanding any provision of law limiting the Federal 
     share under any other Federal program, amounts made available 
     to carry out this section may be used to increase that 
     Federal share, as the Commission determines to be 
     appropriate.
       ``(c) Cost Sharing for Grants.--Not more than 50 percent 
     (or 80 percent in the case of a project to be carried out in 
     a county for which a distressed county designation is in 
     effect under section 226) of the costs of any

[[Page 930]]

     activity eligible for a grant under this section may be 
     provided from funds appropriated to carry out this 
     section.''.

     SEC. 6. ENTREPRENEURSHIP INITIATIVE.

       Title II of the Appalachian Regional Development Act of 
     1965 (40 U.S.C. App.) is amended by inserting after section 
     203 (as added by section 5) the following:

     ``SEC. 204. ENTREPRENEURSHIP INITIATIVE.

       ``(a) Definition of Business Incubator Service.--In this 
     section, the term `business incubator service' means a 
     professional or technical service necessary for the 
     initiation and initial sustainment of the operations of a 
     newly established business, including a service such as--
       ``(1) a legal service, including aid in preparing a 
     corporate charter, partnership agreement, or basic contract;
       ``(2) a service in support of the protection of 
     intellectual property through a patent, a trademark, or any 
     other means;
       ``(3) a service in support of the acquisition and use of 
     advanced technology, including the use of Internet services 
     and Web-based services; and
       ``(4) consultation on strategic planning, marketing, or 
     advertising.
       ``(b) Projects To Be Assisted.--The Commission may provide 
     technical assistance, make grants, enter into contracts, or 
     otherwise provide funds to persons or entities in the region 
     for projects--
       ``(1) to support the advancement of, and provide, 
     entrepreneurial training and education for youths, students, 
     and businesspersons;
       ``(2) to improve access to debt and equity capital by such 
     means as facilitating the establishment of development 
     venture capital funds;
       ``(3) to aid communities in identifying, developing, and 
     implementing development strategies for various sectors of 
     the economy; and
       ``(4)(A) to develop a working network of business 
     incubators; and
       ``(B) to support entities that provide business incubator 
     services.
       ``(c) Source of Funding.--
       ``(1) In general.--Assistance under this section may be 
     provided--
       ``(A) exclusively from amounts made available to carry out 
     this section; or
       ``(B) from amounts made available to carry out this section 
     in combination with amounts made available under any other 
     Federal program or from any other source.
       ``(2) Federal share requirements specified in other laws.--
     Notwithstanding any provision of law limiting the Federal 
     share under any other Federal program, amounts made available 
     to carry out this section may be used to increase that 
     Federal share, as the Commission determines to be 
     appropriate.
       ``(d) Cost Sharing for Grants.--Not more than 50 percent 
     (or 80 percent in the case of a project to be carried out in 
     a county for which a distressed county designation is in 
     effect under section 226) of the costs of any activity 
     eligible for a grant under this section may be provided from 
     funds appropriated to carry out this section.''.

     SEC. 7. REGIONAL SKILLS PARTNERSHIPS.

       Title II of the Appalachian Regional Development Act of 
     1965 (40 U.S.C. App.) is amended by inserting after section 
     204 (as added by section 6) the following:

     ``SEC. 205. REGIONAL SKILLS PARTNERSHIPS.

       ``(a) Definition of Eligible Entity.--In this section, the 
     term `eligible entity' means a consortium that--
       ``(1) is established to serve 1 or more industries in a 
     specified geographic area; and
       ``(2) consists of representatives of--
       ``(A) businesses (or a nonprofit organization that 
     represents businesses);
       ``(B) labor organizations;
       ``(C) State and local governments; or
       ``(D) educational institutions.
       ``(b) Projects To Be Assisted.--The Commission may provide 
     technical assistance, make grants, enter into contracts, or 
     otherwise provide funds to eligible entities in the region 
     for projects to improve the job skills of workers for a 
     specified industry, including projects for--
       ``(1) the assessment of training and job skill needs for 
     the industry;
       ``(2) the development of curricula and training methods, 
     including, in appropriate cases, electronic learning or 
     technology-based training;
       ``(3)(A) the identification of training providers; and
       ``(B) the development of partnerships between the industry 
     and educational institutions, including community colleges;
       ``(4) the development of apprenticeship programs;
       ``(5) the development of training programs for workers, 
     including dislocated workers; and
       ``(6) the development of training plans for businesses.
       ``(c) Administrative Costs.--An eligible entity may use not 
     more than 10 percent of the funds made available to the 
     eligible entity under subsection (b) to pay administrative 
     costs associated with the projects described in subsection 
     (b).
       ``(d) Source of Funding.--
       ``(1) In general.--Assistance under this section may be 
     provided--
       ``(A) exclusively from amounts made available to carry out 
     this section; or
       ``(B) from amounts made available to carry out this section 
     in combination with amounts made available under any other 
     Federal program or from any other source.
       ``(2) Federal share requirements specified in other laws.--
     Notwithstanding any provision of law limiting the Federal 
     share under any other Federal program, amounts made available 
     to carry out this section may be used to increase that 
     Federal share, as the Commission determines to be 
     appropriate.
       ``(e) Cost Sharing for Grants.--Not more than 50 percent 
     (or 80 percent in the case of a project to be carried out in 
     a county for which a distressed county designation is in 
     effect under section 226) of the costs of any activity 
     eligible for a grant under this section may be provided from 
     funds appropriated to carry out this section.''.

     SEC. 8. PROGRAM DEVELOPMENT CRITERIA.

       (a) Elimination of Growth Center Criteria.--Section 
     224(a)(1) of the Appalachian Regional Development Act of 1965 
     (40 U.S.C. App.) is amended by striking ``in an area 
     determined by the State have a significant potential for 
     growth or''.
       (b) Assistance to Distressed Counties and Areas.--Section 
     224 of the Appalachian Regional Development Act of 1965 (40 
     U.S.C. App.) is amended by adding at the end the following:
       ``(d) Assistance to Distressed Counties and Areas.--For 
     fiscal year 2003 and each fiscal year thereafter, not less 
     than 50 percent of the amount of grant expenditures approved 
     by the Commission shall support activities or projects that 
     benefit severely and persistently distressed counties and 
     areas.''.

     SEC. 9. GRANTS FOR ADMINISTRATIVE EXPENSES OF LOCAL 
                   DEVELOPMENT DISTRICTS.

       Section 302(a)(1)(A)(i) of the Appalachian Regional 
     Development Act of 1965 (40 U.S.C. App.) is amended by 
     inserting ``(or, at the discretion of the Commission, 75 
     percent of such expenses in the case of a local development 
     district that has a charter or authority that includes the 
     economic development of a county or part of a county for 
     which a distressed county designation is in effect under 
     section 226)'' after ``such expenses''.

     SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

       Section 401 of the Appalachian Regional Development Act of 
     1965 (40 U.S.C. App.) is amended to read as follows:

     ``SEC. 401. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) In General.--In addition to amounts authorized by 
     section 201 and other amounts made available for the 
     Appalachian development highway system program, there are 
     authorized to be appropriated to the Commission to carry out 
     this Act--
       ``(1) $88,000,000 for each of fiscal years 2002 through 
     2004;
       ``(2) $90,000,000 for fiscal year 2005; and
       ``(3) $92,000,000 for fiscal year 2006.
       ``(b) Telecommunications and Technology Initiative.--Of the 
     amounts made available under subsection (a), the following 
     amounts may be made available to carry out section 203:
       ``(1) $10,000,000 for fiscal year 2002.
       ``(2) $8,000,000 for fiscal year 2003.
       ``(3) $5,000,000 for each of fiscal years 2004 through 
     2006.
       ``(c) Availability.--Sums made available under subsection 
     (a) shall remain available until expended.''.

     SEC. 11. ADDITION OF COUNTIES TO APPALACHIAN REGION.

       Section 403 of the Appalachian Regional Development Act of 
     1965 (40 U.S.C. App.) is amended--
       (1) in the third undesignated paragraph (relating to 
     Kentucky)--
       (A) by inserting ``Edmonson,'' after ``Cumberland,'';
       (B) by inserting ``Hart,'' after ``Harlan,''; and
       (C) by striking ``Montogomery,'' and inserting 
     ``Montgomery,''; and
       (2) in the fifth undesignated paragraph (relating to 
     Mississippi)--
       (A) by inserting ``Montgomery,'' after ``Monroe,''; and
       (B) by inserting ``Panola,'' after ``Oktibbeha,''.

     SEC. 12. TERMINATION.

       Section 405 of the Appalachian Regional Development Act of 
     1965 (40 U.S.C. App.) is amended by striking ``2001'' and 
     inserting ``2006''.

     SEC. 13. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Section 101(b) of the Appalachian Regional Development 
     Act of 1965 (40 U.S.C. App.) is amended in the third sentence 
     by striking ``implementing investment program'' and inserting 
     ``strategy statement''.
       (b) Section 106(7) of the Appalachian Regional Development 
     Act of 1965 (40 U.S.C. App.) is amended by striking 
     ``expiring no later than September 30, 2001''.
       (c) Sections 202, 214, and 302(a)(1)(C) of the Appalachian 
     Regional Development Act of 1965 (40 U.S.C. App.) are amended 
     by striking ``grant-in-aid programs'' each place it appears 
     and inserting ``grant programs''.
       (d) Section 202(a) of the Appalachian Regional Development 
     Act of 1965 (40 U.S.C. App.) is amended in the second 
     sentence by striking ``title VI of the Public Health Service 
     Act (42 U.S.C. 291-291o), the Mental Retardation Facilities 
     and Community Mental Health Centers Construction Act of 1963 
     (77 Stat. 282),'' and inserting ``title VI of the

[[Page 931]]

     Public Health Service Act (42 U.S.C. 291 et seq.), the 
     Developmental Disabilities Assistance and Bill of Rights Act 
     of 2000 (42 U.S.C. 15001 et seq.),''.
       (e) Section 207(a) of the Appalachian Regional Development 
     Act of 1965 (40 U.S.C. App.) is amended by striking ``section 
     221 of the National Housing Act, section 8 of the United 
     States Housing Act of 1937, section 515 of the Housing Act of 
     1949,'' and inserting ``section 221 of the National Housing 
     Act (12 U.S.C. 1715l), section 8 of the United States Housing 
     Act of 1937 (42 U.S.C. 1437f), section 515 of the Housing Act 
     of 1949 (42 U.S.C. 1485),''.
       (f) Section 214 of the Appalachian Regional Development Act 
     of 1965 (40 U.S.C. App.) is amended--
       (1) in the section heading, by striking ``grant-in-aid'' 
     and inserting ``grant'';
       (2) in subsection (a)--
       (A) by striking ``grant-in-aid Act'' each place it appears 
     and inserting ``Act'';
       (B) in the first sentence, by striking ``grant-in-aid 
     Acts'' and inserting ``Acts'';
       (C) by striking ``grant-in-aid program'' each place it 
     appears and inserting ``grant program''; and
       (D) by striking the third sentence;
       (3) by striking subsection (c) and inserting the following:
       ``(c) Definition of Federal Grant Program.--
       ``(1) In general.--In this section, the term `Federal grant 
     program' means any Federal grant program authorized by this 
     Act or any other Act that provides assistance for--
       ``(A) the acquisition or development of land;
       ``(B) the construction or equipment of facilities; or
       ``(C) any other community or economic development or 
     economic adjustment activity.
       ``(2) Inclusions.--In this section, the term `Federal grant 
     program' includes a Federal grant program such as a Federal 
     grant program authorized by--
       ``(A) the Consolidated Farm and Rural Development Act (7 
     U.S.C. 1921 et seq.);
       ``(B) the Land and Water Conservation Fund Act of 1965 (16 
     U.S.C. 460l-4 et seq.);
       ``(C) the Watershed Protection and Flood Prevention Act (16 
     U.S.C. 1001 et seq.);
       ``(D) the Carl D. Perkins Vocational and Technical 
     Education Act of 1998 (20 U.S.C. 2301 et seq.);
       ``(E) the Federal Water Pollution Control Act (33 U.S.C. 
     1251 et seq.);
       ``(F) title VI of the Public Health Service Act (42 U.S.C. 
     291 et seq.);
       ``(G) sections 201 and 209 of the Public Works and Economic 
     Development Act of 1965 (42 U.S.C. 3141, 3149);
       ``(H) title I of the Housing and Community Development Act 
     of 1974 (42 U.S.C. 5301 et seq.); or
       ``(I) part IV of title III of the Communications Act of 
     1934 (47 U.S.C. 390 et seq.).
       ``(3) Exclusions.--In this section, the term `Federal grant 
     program' does not include--
       ``(A) the program for construction of the Appalachian 
     development highway system authorized by section 201;
       ``(B) any program relating to highway or road construction 
     authorized by title 23, United States Code; or
       ``(C) any other program under this Act or any other Act to 
     the extent that a form of financial assistance other than a 
     grant is authorized.''; and
       (4) by striking subsection (d).
       (g) Section 224(a)(2) of the Appalachian Regional 
     Development Act of 1965 (40 U.S.C. App.) is amended by 
     striking ``relative per capita income'' and inserting ``per 
     capita market income''.
       (h) Section 225 of the Appalachian Regional Development Act 
     of 1965 (40 U.S.C. App.)--
       (1) in subsection (a)(3), by striking ``development 
     program'' and inserting ``development strategies''; and
       (2) in subsection (c)(2), by striking ``development 
     programs'' and inserting ``development strategies''.
       (i) Section 303 of the Appalachian Regional Development Act 
     of 1965 (40 U.S.C. App.) is amended--
       (1) in the section heading, by striking ``investment 
     programs'' and inserting ``strategy statements'';
       (2) in the first sentence, by striking ``implementing 
     investments programs'' and inserting ``strategy statements''; 
     and
       (3) by striking ``implementing investment program'' each 
     place it appears and inserting ``strategy statement''.
       (j) Section 403 of the Appalachian Regional Development Act 
     of 1965 (40 U.S.C. App.) is amended in the next-to-last 
     undesignated paragraph by striking ``Committee on Public 
     Works and Transportation'' and inserting ``Committee on 
     Transportation and Infrastructure''.
                                  ____

  SA 2841. Mr. KERRY (for himself and Mr. Hollings) submitted an 
amendment intended to be proposed by him to the bill S. 1926, to 
improve passenger automobile fuel economy and safety, reduce greenhouse 
gas emissions, reduce dependence on foreign oil, and for other 
purposes; which was referred to the Committee on Commerce, Science, and 
Transportation; as follows:

       At the end of the bill add the following:

     SEC. 13. TAX CREDIT FOR DOMESTICALLY PRODUCED HYPEREFFICIENT 
                   VEHICLES.

       (a) In General.--Subpart B of part IV of subchapter A of 
     chapter 1 (relating to foreign tax credit, etc.) is amended 
     by adding at the end the following:

     SEC. 30B. MANUFACTURER'S CREDIT FOR DOMESTICALLY-PRODUCED 
                   FUEL EFFICIENT VEHICLES.

       ``(a) Allowance of Credit.--In the case of a eligible 
     manufacturer, there shall be allowed as a credit against the 
     tax imposed by this chapter for the taxable year an amount 
     equal to $5,000 multiplied by the number of domestically 
     produced fuel-efficient passenger automobiles manufactured 
     and sold for use in the United States by the taxpayer during 
     the taxable year.
       ``(b) Application With Other Credits.--The credit allowed 
     under subsection (a) for any taxable year shall not exceed 
     the excess (if any) of--
       ``(1) the regular tax for the taxable year reduced by the 
     sum of the credits allowable under subpart A and sections 27, 
     29, and 30, over
       ``(2) the tentative minimum tax for the taxable year.
       ``(c) Special Rules.--
       ``(1) Reduction in basis.--For purposes of this subtitle, 
     the basis of any property for which a credit is allowable 
     under subsection (a) shall be reduced by the amount of such 
     credit so allowed.
       ``(2) No double benefit.--The amount of any deduction or 
     credit allowable under this chapter shall be reduced by the 
     amount of credit allowed under subsection (a) for such 
     vehicle for the taxable year.
       ``(3) Property used outside united states, etc., not 
     qualified.--No credit shall be allowed under subsection (a) 
     with respect to any property referred to in section 50(b) or 
     with respect to the portion of the cost of any property taken 
     into account under section 179.
       ``(4) Election to not take credit.--No credit shall be 
     allowed under subsection (a) for any vehicle if the taxpayer 
     elects to not have this section apply to such vehicle.
       ``(5) Carryforward allowed.--
       ``(A) In general.--If the credit amount allowable under 
     subsection (a) for a taxable year exceeds the amount of the 
     liability for tax under this chapter for such taxable year 
     (referred to as the `unused credit year' in this paragraph), 
     such excess shall be allowed as a credit carryforward for 
     each of the 20 taxable years following the unused credit 
     year.
       ``(B) Rules.--Rules similar to the rules of section 39 
     shall apply with respect to the credit carryforward under 
     subparagraph (A).
       ``(6) Interaction with air quality and motor vehicle safety 
     standards.--Unless otherwise provided in this section, a 
     passenger automobile shall not be considered eligible for a 
     credit under this section unless such automobile is in 
     compliance with--
       ``(A) the applicable provisions of the Clean Air Act for 
     the applicable make and model year of the vehicle (or 
     applicable air quality provisions of State law in the case of 
     a State which has adopted such provision under a waiver under 
     section 209(b) of the Clean Air Act); and
       ``(B) the motor vehicle safety provisions of sections 30101 
     through 30169 of title 49, United States Code.
       ``(d) Definitions.--In this section:
       ``(1) Eligible manufacturer.--The term `eligible 
     manufacturer' means a manufacturer of passenger automobiles 
     for which the average fuel economy standard (as determined 
     under section 32902 of title 49, United States Code) for any 
     model year that ends with or within the taxable year equals 
     or exceeds 37 miles per gallon.
       ``(2) Fuel-efficient passenger automobile.--The term `fuel-
     efficient passenger automobile' means a passenger automobile 
     (as defined in section 32901(a)(16) of title 49, United 
     States Code) that obtains an average fuel economy of more 
     than 50 miles per gallon in normal operation (as determined 
     by the Secretary of Transportation after consultation with 
     the Administrator of the Environmental Protection Agency).
       ``(3) Domestically produced.--The term `domestically 
     produced' means a vehicle at least 75 percent of the costs to 
     the manufacturer of producing the vehicle is attributable to 
     value added in the United States, as determined by the 
     Administrator of the Environmental Protection Agency on the 
     basis of information submitted by the manufacturer.
       ``(e) Regulations.--
       ``(1) In general.--The Secretary shall promulgate such 
     regulations as necessary to carry out the provisions of this 
     section.
       ``(2) Administrator of environmental protection agency.--
     The Administrator of the Environmental Protection Agency, in 
     coordination with the Secretary of Transportation and the 
     Secretary of the Treasury, shall prescribe such regulations 
     as necessary to determine whether a motor vehicle meets the 
     requirements to be eligible for a credit under this section.
       ``(f) Termination.--This section shall not apply to any 
     property placed in service after December 31, 2020.''.
       (b) Conforming Amendments.--
       (1) Section 1016(a) is amended by striking ``and'' at the 
     end of paragraph (26), by striking the period at the end of 
     paragraph (27)

[[Page 932]]

     and inserting ``, and'', and by adding at the end the 
     following:
       ``(28) to the extent provided in section 30B(c)(1).''.
       (2) Section 53(d)(1)(B)(iii) is amended by inserting ``, or 
     not allowed under section 30B solely by reason of the 
     application of section 30B(b)(2)'' before the period.
       (3) Section 53(c)(2) is amended by inserting ``30B(b),'' 
     after ``30(b)(3)''.
       (4) Section 6501(m) is amended by inserting ``30B(c)(3),'' 
     after ``30(d)(4),''.
       (5) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1 is amended by inserting after the 
     item relating to section 30A the following:

``Sec. 30B. Manufacturer's credit for domestically-produced fuel 
              efficient vehicles.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2002, in taxable years ending after such date.
                                  ____

  SA 2842. Mr. REID proposed an amendment to the bill S. 1731, to 
strengthen the safety net for agricultural producers, to enhance 
resource conservation and rural development, to provide for farm 
credit, agricultural research, nutrition, and related programs, to 
ensure consumers abundant food and fiber, and for other purposes; as 
follows:

       Beginning on page 246, strike line 4 and all that follows 
     through page 258, line 19, and insert the following:

     SEC. 215. WATER CONSERVATION.

       (a) In General.--Section 1231(d) of the Food Security Act 
     of 1985 (16 U.S.C. 3831(d)) (as amended by section 212(c)) is 
     amended by striking ``41,100,000'' and inserting 
     ``40,000,000''.
       (b) Additional Water Conservation Acreage Under 
     Conservation Reserve Enhancement Program.--Section 1231 of 
     the Food Security Act of 1985 (16 U.S.C. 3831) (as amended by 
     section 212(f)) is amended by adding at the end the 
     following:
       ``(j) Additional Water Conservation Acreage Under 
     Conservation Reserve Enhancement Program.--
       ``(1) Definitions.--In this subsection:
       ``(A) Eligible entity.--The term `eligible entity' means--
       ``(i) an owner or operator of agricultural land;
       ``(ii) a person or entity that holds water rights in 
     accordance with State law; and
       ``(iii) any other landowner.
       ``(B) Program.--The term `program' means the conservation 
     reserve enhancement program announced on May 27, 1998 (63 
     Fed. Reg. 28965).
       ``(2) Protection of private property rights.--
       ``(A) Willing sellers and lessors.--An agreement may be 
     executed under this subsection only if each eligible entity 
     that is a party to the agreement is a willing seller or 
     willing lessor.
       ``(B) Property rights.--Nothing in this subsection 
     authorizes the Federal Government or any State government to 
     condemn private property.
       ``(3) Enrollment.--In addition to the acreage authorized to 
     be enrolled under subsection (d), in carrying out the 
     program, the Secretary shall enroll not more than 500,000 
     acres in eligible States to promote water conservation.
       ``(4) Eligible states.--To be eligible to participate in 
     the program, a State--
       ``(A) shall submit to the Secretary, for review and 
     approval, a proposal that meets the requirements of the 
     program; and
       ``(B) shall--
       ``(i) have established a program to protect in-stream 
     flows; and
       ``(ii) agree to hold water rights leased or purchased under 
     a proposal submitted under subparagraph (A).
       ``(5) Eligible acreage.--An eligible entity may enroll in 
     the program land that is adjacent to a watercourse or lake, 
     or land that would contribute to the restoration of a 
     watercourse or lake (as determined by the Secretary), if--
       ``(A)(i) the land can be restored as a wetland, grassland, 
     or other habitat, as determined by the Secretary; and
       ``(ii) the restoration would significantly improve riparian 
     functions; or
       ``(B) water or water rights appurtenant to the land are 
     leased or sold to an appropriate State agency or State-
     designated water trust, as determined by the Secretary.
       ``(6) Relationship to other enrolled acreage.--For any 
     fiscal year, acreage enrolled under this subsection shall not 
     affect 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 in the program before the date of 
     enactment of this subsection.
       ``(7) Duties of eligible entities.--Under a contract 
     entered into with respect to enrolled land under the program, 
     during the term of the contract, an eligible entity shall 
     agree--
       ``(A)(i) to restore the hydrology of the enrolled land to 
     the maximum extent practicable, as determined by the 
     Secretary; and
       ``(ii) to establish on the enrolled land wetland, 
     grassland, vegetative cover, or other habitat, as determined 
     by the Secretary; or
       ``(B) to transfer to the State, or a designee of the State, 
     water rights appurtenant to the enrolled land.
       ``(8) Rental rates.--
       ``(A) Irrigated land.--With respect to irrigated land 
     enrolled in the program, the rental rate shall be established 
     by the Secretary, acting through the Deputy Administrator for 
     Farm Programs--
       ``(i) on a watershed basis;
       ``(ii) using data available as of the date on which the 
     rental rate is established; and
       ``(iii) at a level sufficient to ensure, to the maximum 
     extent practicable, that the eligible entity is fairly 
     compensated for the irrigated land value of the enrolled 
     land.
       ``(B) Nonirrigated land.--With respect to nonirrigated land 
     enrolled in the program, the rental rate shall be calculated 
     by the Secretary, in accordance with the conservation reserve 
     program manual of the Department that is in effect as of the 
     date on which the rental rate is calculated.
       ``(C) Applicability.--An eligible entity that enters into a 
     contract to enroll land into the program shall receive, in 
     exchange for the enrollment, payments that are based on--
       ``(i) the irrigated rental rate described in subparagraph 
     (A), if the owner or operator agrees to enter into an 
     agreement with the State and approved by the Secretary under 
     which the State leases, for in-stream flow purposes, surface 
     water appurtenant to the enrolled land; or
       ``(ii) the nonirrigated rental rate described in 
     subparagraph (B), if an owner or operator does not enter into 
     an agreement described in clause (i).
       ``(9) Priority.--In carrying out this subsection, the 
     Secretary shall give priority consideration to any State 
     proposal that--
       ``(A) provides a State share of 20 percent or more of the 
     cost of the proposal; and
       ``(B) significantly advances the goals of Federal, State, 
     tribal, and local fish, wildlife, and plant conservation 
     plans, including--
       ``(i) plans that address--

       ``(I) multiple endangered species or threatened species (as 
     defined in section 3 of the Endangered Species Act of 1973 
     (16 U.S.C. 1532)); or
       ``(II) species that may become threatened or endangered if 
     conservation measures are not carried out;

       ``(ii) agreements entered into, or conservation plans 
     submitted, under section 6 or 10(a)(2)(A), respectively, of 
     the Endangered Species Act of 1973 (16 U.S.C. 1535, 
     1539(a)(2)(A)); or
       ``(iii) plans that provide benefits to the fish, wildlife, 
     or plants located in 1 or more--

       ``(I) refuges within the National Wildlife Refuge System; 
     or
       ``(II) State wildlife management areas.

       ``(10) Consultation.--In carrying out this subsection, the 
     Secretary shall consult with--
       ``(A) the Secretary of the Interior; and
       ``(B) affected Indian tribes.
       ``(11) State water law.--Nothing in this subsection--
       ``(A) preempts any State water law;
       ``(B) affects any litigation concerning the entitlement to, 
     or lack of entitlement to, water that is pending as of the 
     date of enactment of this subsection;
       ``(C) expands, alters, or otherwise affects the existence 
     or scope of any water right of any individual (except to the 
     extent that the individual agrees otherwise under the 
     program); or
       ``(D) authorizes or entitles the Federal Government to hold 
     or purchase any water right.
       ``(12) California water law.--
       ``(A) In general.--Nothing in this subsection authorizes 
     the Secretary to enter into an agreement, in accordance with 
     this subchapter, with a landowner for water obtained from an 
     irrigation district, water district, or other similar 
     governmental entity in the State of California.
       ``(B) Treatment of california districts.--An irrigation 
     district, water district, or similar governmental entity in 
     the State of California--
       ``(i) shall be considered an eligible entity for purposes 
     of this subchapter; and
       ``(ii) may develop a program under this subchapter.
       ``(C) District programs.--All landowners participating in a 
     program under this subchapter that is sponsored by a district 
     or entity described in subparagraph (B) shall be willing 
     participants in the program.
       ``(13) Groundwater.--A right to groundwater shall not be 
     subject to any provision of this subsection unless the right 
     is granted--
       ``(A) under applicable State law; and
       ``(B) through a groundwater water rights process that is 
     fully integrated with the surface water rights process of the 
     applicable affected State.''.
       (c) Water Benefits Program.--Subtitle D of title XII of the 
     Food Security Act of 1985 (16 U.S.C. 3831 et seq.) is amended 
     by adding at the end the following:

                    ``CHAPTER 6--WATER CONSERVATION

     ``SEC. 1240R. WATER BENEFITS PROGRAM.

       ``(a) Definitions.--In this section:

[[Page 933]]

       ``(1) Eligible entity.--The term `eligible entity' means--
       ``(A) an owner or operator of agricultural land;
       ``(B) a person or entity that holds water rights in 
     accordance with State law; and
       ``(C) any other landowner.
       ``(2) Program.--The term `program' means the water benefits 
     program established under subsection (b).
       ``(b) Establishment.--The Secretary shall establish a 
     program to promote water conservation, to be known as the 
     `water benefits program', under which the Secretary shall 
     make payments to eligible States to pay the Federal share of 
     the cost of--
       ``(1) in accordance with subsection (f), irrigation 
     efficiency infrastructure or measures that provide in-stream 
     flows for fish and wildlife and other environmental purposes 
     (including wetland restoration);
       ``(2) converting from production of a water-intensive crop 
     to a crop that requires less water; or
       ``(3) the lease, purchase, dry-year optioning, or 
     dedication of water or water rights to provide, directly or 
     indirectly, in-stream flows for fish and wildlife and other 
     environmental purposes (including wetland restoration).
       ``(c) Protection of Private Property Rights.--
       ``(1) Willing sellers and lessors.--An agreement may be 
     executed under this subsection only if each eligible entity 
     that is a party to the agreement is a willing seller or 
     willing lessor.
       ``(2) Property rights.--Nothing in this section authorizes 
     the Federal Government or any State government to condemn 
     private property.
       ``(d) Eligible States.--To be eligible to receive a payment 
     under the program, a State shall--
       ``(1) establish a State program under which the State holds 
     and enforces water rights leased, purchased, dry-year 
     optioned, or dedicated to provide in-stream flows for fish 
     and wildlife;
       ``(2) designate a State agency to administer the State 
     program;
       ``(3)(A) submit to the Secretary a State plan to protect 
     in-stream flows; and
       ``(B) obtain approval of the State program and plan by the 
     Secretary;
       ``(4) subject each lease, purchase, dry-year optioning, and 
     dedication of water and water rights to any review and 
     approval required under State law, such as review and 
     approval by a water board, water court, or water engineer of 
     the State; and
       ``(5) ensure that each lease, purchase, dry-year optioning, 
     and dedication of water and water rights is consistent with 
     State water law.
       ``(e) Role of Secretary.--In carrying out this section, the 
     Secretary shall--
       ``(1) certify State programs established under subsection 
     (d)(1) for an initial term, and any subsequent renewal of 
     terms, of not more than 3 years, subject to renewal;
       ``(2) establish guidelines for participating States to pay 
     the Federal share of assisting the conversion from production 
     of water-intensive crops to crops that require less water;
       ``(3) establish guidelines for participating States to pay 
     the non-Federal share of the cost of on-farm and off-farm 
     irrigation efficiency infrastructure and measures described 
     in subsection (f)(2);
       ``(4) establish guidelines for participating States for the 
     lease, purchase, dry-year optioning, and dedication of water 
     and water rights under State programs;
       ``(5) establish a program within the Agricultural Research 
     Service, in collaboration with the United States Geological 
     Survey, to monitor State efforts under the program, including 
     the construction and maintenance of stream gauging stations;
       ``(6) revoke certification of a State program under 
     paragraph (1) if State administration of the State program 
     does not meet the terms of the certification; and
       ``(7) consult with the Secretary of the Interior and 
     affected Indian tribes, particularly with respect to the 
     establishment and implementation of the program.
       ``(f) Irrigation Efficiency Infrastructure and Measures.--
       ``(1) In general.--The Secretary may pay--
       ``(A) the Federal share of the cost of converting from 
     production of a water-intensive crop to a crop that requires 
     less water, as described in subsection (e)(2); and
       ``(B) the Federal share determined under subsection (g) of 
     the cost of on-farm and off-farm irrigation efficiency 
     infrastructure and measures described in paragraph (2) if not 
     less than 75 percent of the water conserved as a result of 
     the infrastructure and measures is permanently allocated, 
     directly or indirectly, to in-stream flows.
       ``(2) Eligible irrigation efficiency infrastructure and 
     measures.--Eligible irrigation efficiency infrastructure and 
     measures referred to in paragraph (1) are--
       ``(A) lining of ditches, insulation of piping, and 
     installation of ditch portals or gates;
       ``(B) tail water return systems;
       ``(C) low-energy precision applications;
       ``(D) low-flow irrigation systems, including drip and 
     trickle systems and micro-sprinkler systems;
       ``(E) spray jets or nozzles that improve water distribution 
     efficiency;
       ``(F) surge valves;
       ``(G) conversion from gravity or flood irrigation to low-
     flow sprinkler or drip irrigation systems;
       ``(H) intake screens, fish passages, and conversion of 
     diversions to pumps;
       ``(I) alternate furrow wetting, irrigation scheduling, and 
     similar measures; and
       ``(J) such other irrigation efficiency infrastructure and 
     measures as the Secretary determines to be appropriate to 
     carry out the program.
       ``(g) Cost Sharing.--
       ``(1) Non-federal share.--The non-Federal share of the cost 
     of converting from production of a water-intensive crop to a 
     crop that requires less water, or of an irrigation efficiency 
     infrastructure or measure assisted under subsection (f)--
       ``(A) shall be not less than 25 percent; and
       ``(B) shall be paid by--
       ``(i) a State;
       ``(ii) an owner or operator of a farm or ranch (including 
     an Indian tribe); or
       ``(iii) a nonprofit organization.
       ``(2) Increased non-federal share.--If an owner or operator 
     of a farm or ranch pays 50 percent or more of the cost of 
     converting from production of a water-intensive crop to a 
     crop that requires less water, or of an irrigation efficiency 
     infrastructure or measure, the owner or operator shall retain 
     the right to use 50 percent of the water conserved by the 
     conversion, infrastructure, or measure.
       ``(3) Leasing of conserved water.--A State shall--
       ``(A) give an eligible entity with respect to land enrolled 
     in the program the option of leasing, or providing a dry-year 
     option on, conserved water for 30 years; and
       ``(B) increase the non-Federal share under paragraph (1) 
     accordingly, as determined by the Secretary.
       ``(4) Water lease and purchase.--The cost of water or water 
     rights that are directly leased, purchased, subject to a dry-
     year option, or dedicated under this section shall not be 
     subject to the cost-sharing requirement of this subsection.
       ``(h) State Allocations.--In making allocations to States, 
     the Secretary shall consider the extent to which the State 
     plan required by subsection (d)(3)(A) significantly advances 
     the goals of Federal, State, tribal, and local fish, 
     wildlife, and plant conservation plans, including--
       ``(1) plans that address--
       ``(A) multiple endangered species or threatened species (as 
     defined in section 3 of the Endangered Species Act of 1973 
     (16 U.S.C. 1532)); or
       ``(B) species that may become threatened or endangered if 
     conservation measures are not carried out;
       ``(2) agreements entered into, or conservation plans 
     submitted, under section 6 or 10(a)(2)(A), respectively, of 
     the Endangered Species Act of 1973 (16 U.S.C. 1535, 
     1539(a)(2)(A)); and
       ``(3) plans that provide benefits to the fish, wildlife, or 
     plants located in 1 or more--
       ``(A) refuges within the National Wildlife Refuge System; 
     or
       ``(B) State wildlife management areas.
       ``(i) State Water Law.--Nothing in this section--
       ``(1) preempts any State water law;
       ``(2) affects any litigation concerning the entitlement to, 
     or lack of entitlement to, water that is pending as of the 
     date of enactment of this section;
       ``(3) expands, alters, or otherwise affects the existence 
     or scope of any water right of any individual (except to the 
     extent that the individual agrees otherwise under the 
     program); or
       ``(4) authorizes or entitles the Federal Government to hold 
     or purchase any water right.
       ``(j) California Water Law.--
       ``(1) In general.--Nothing in this section authorizes the 
     Secretary to enter into an agreement, in accordance with this 
     subchapter, with a landowner for water obtained from an 
     irrigation district, water district, or other similar 
     governmental entity in the State of California.
       ``(2) Treatment of california districts.--An irrigation 
     district, water district, or similar governmental entity in 
     the State of California--
       ``(A) shall be considered an eligible entity for purposes 
     of this subsection; and
       ``(B) may develop a program under this subsection.
       ``(3) District programs.--All landowners participating in a 
     program under this subchapter that is sponsored by a district 
     or entity described in paragraph (2) shall be willing 
     participants in the program.
       ``(k) Groundwater.--A right to groundwater shall not be 
     subject to any provision of this section unless the right is 
     granted--
       ``(1) under applicable State law; and
       ``(2) through a groundwater water rights process that is 
     fully integrated with the surface water rights process of the 
     applicable affected State.
       ``(l) Funding.--
       ``(1) In general.--Of the funds of the Commodity Credit 
     Corporation, the Secretary shall make available to carry out 
     this section--
       ``(A) $25,000,000 for fiscal year 2002;
       ``(B) $52,000,000 for fiscal year 2003; and
       ``(C) $100,000,000 for each of fiscal years 2004 through 
     2006.
       ``(2) Limitation on expenditures.--For any fiscal year, a 
     State that participates in the

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     program shall expend not more than 75 percent of the funds 
     made available to the State under the program to pay--
       ``(A) the cost of converting from production of a water-
     intensive crop to a crop that requires less water; or
       ``(B) the cost of irrigation efficiency infrastructure and 
     measures under subsection (f)(1).
       ``(3) Monitoring program.--For each fiscal year, of the 
     funds made available under paragraph (1), the Secretary shall 
     use not more than $5,000,000 to carry out the monitoring 
     program under subsection (e)(5).
       ``(4) Administration.--
       ``(A) Federal.--For each fiscal year, of the funds made 
     available under paragraph (1), the Secretary shall use not 
     more than $500,000 for administration of the program.
       ``(B) State.--For each fiscal year, of the funds made 
     available under paragraph (1), not more than 3 percent shall 
     be made available to States for administration of the 
     program.''.

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