[Congressional Record (Bound Edition), Volume 149 (2003), Part 8]
[Senate]
[Pages 10221-10222]
[From the U.S. Government Publishing Office, www.gpo.gov]




  SENATE RESOLUTION 127--EXPRESSING THE SENSE OF THE SENATE THAT THE 
 SECRETARY OF AGRICULTURE SHOULD REDUCE THE INTEREST RATE ON LOANS TO 
PROCESSORS OF SUGAR BEETS AND SUGARCANE BY 1 PERCENT TO A RATE EQUAL TO 
       THE COST OF BORROWING TO CONFORM TO THE INTENT OF CONGRESS

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

                              S. Res. 127

       Whereas section 163 of the Federal Agriculture Improvement 
     and Reform Act of 1996 (7 U.S.C. 7283) established the 
     monthly Commodity Credit Corporation interest rate applicable 
     to loans provided for agricultural commodities by the 
     Corporation at 100 basis points greater than the rate 
     determined under the applicable interest rate formula in 
     effect on October 1, 1995;
       Whereas the interest rate formula in effect on October 1, 
     1995, for agricultural commodity loans reflected the interest 
     rate charged to the Commodity Credit Corporation by the 
     Treasury for the applicable month;
       Whereas the interest rate charged to the Commodity Credit 
     Corporation by the Treasury for a month is based on the 4- to 
     5-week average price of 1-year constant maturity securities 
     sold on the market by the Treasury in the previous month;
       Whereas the Commodity Credit Corporation had used such cost 
     of borrowing interest rates for all commodity loans since 
     January 1, 1982, and this practice was understood by Congress 
     when enacting section 163 of the Federal Agriculture 
     Improvement and Reform Act of 1996;
       Whereas section 1401(c)(2) of the Farm Security and Rural 
     Investment Act of 2002 (Public Law 107-171) amended section 
     163 of the Federal Agriculture Improvement and Reform Act of 
     1996 to provide that raw cane sugar, refined beet sugar, and 
     in-process sugar eligible for a loan under section 156 of 
     that Act (7 U.S.C. 7272) shall not be considered an 
     agricultural commodity for the purposes of section 163 of 
     that Act;
       Whereas Congress intended that loans to processors of sugar 
     be exempted from the 100-basis point surcharge and that the 
     loans should be subject to interest at the rate that is 
     charged to the Commodity Credit Corporation by the Treasury 
     for the applicable month;

[[Page 10222]]

       Whereas, during deliberations on the Farm Security and 
     Rural Investment Act of 2002, the Congressional Budget Office 
     estimated the cost of eliminating the interest rate surcharge 
     on loans to processors of sugar at $5,000,000 per year in 
     reduced revenues and Congress enacted the amendment to 
     section 163 of the Federal Agriculture Improvement and Reform 
     Act of 1996 with this understanding of its purpose and 
     effect;
       Whereas the final regulations of the Commodity Credit 
     Corporation to implement the sugar loan program recognized 
     that the amendment of section 163 of the Federal Agriculture 
     Improvement and Reform Act of 1996 by section 1401(c)(2) of 
     the Farm Security and Rural Investment Act of 2002 eliminated 
     the requirement that the Commodity Credit Corporation add 1 
     percentage point to the interest rate as calculated by the 
     procedure in place prior to October 1, 1995; and
       Whereas the Commodity Credit Corporation regulations 
     require that a loan to a processor of sugar beets or 
     sugarcane be subject to interest at rates equal to those 
     applicable to all other agricultural commodities, including 
     the 100-basis point surcharge, notwithstanding the clear 
     intent of Congress in enacting section 1401(c)(2) of the Farm 
     Security and Rural Investment Act of 2002: Now, therefore, be 
     it
       Resolved, That it is the sense of the Senate that the 
     Secretary of Agriculture should reduce the interest rate on 
     loans to processors of sugar beets and sugarcane by 100 basis 
     points to a rate equal to the cost of borrowing from the 
     Treasury to conform to the intent of Congress in enacting the 
     Farm Security and Rural Investment Act of 2002 (Public Law 
     107-171).

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